Why Community Health Systems Spiked on Wednesday
Community Health Systems (NYSE: CYH) announced Tuesday afternoon that it is floating over $1.4 billion in new debt. The operator of acute care hospitals saw its stock rise by nearly 11% the following day as a result.
All told, $1.44 billion worth of junior-priority secured notes are being floated in Community Health's issue, at a rate of 6.125%. The notes mature in 2030.
This substantially cuts the cost of the company's borrowings and gives it several more years to repay them -- Community Health will use the issue's proceeds, combined with cash on hand, to redeem all of its outstanding 8.125% junior-priority secured notes. These mature in 2024.
Source Fool.com
