Dallas-based Tenet Healthcare has upsized its previously announced $1.5 billion private senior notes offering to $2 billion, according to a Sept. 8 news release.
The health system agreed to issue and sell $2 billion in aggregate principal amount of senior notes due Sept. 15, 2034, carrying a 6.250% annual interest rate. The offering is expected to close Sept. 22, subject to customary conditions.
Tenet plans to use the net proceeds, together with cash on hand, to redeem all $1.5 billion of its outstanding 5.125% senior secured first lien notes due November 2027. The system will also use proceeds for the partial redemption of an additional $500 million of its outstanding 6.125% senior notes due October 2028, according to the release.
The notes are Tenet’s unsecured obligation and will rank equally with its existing and future senior unsecured obligations. They will be sold only to those reasonably believed to be “qualified institutional buyers” under Rule 144A of the Securities Act and to non-U.S. persons in compliance with Regulation S. The notes will not be registered under the Securities Act of 1933.
The upsized deal comes six weeks after Tenet’s stock hit a record high and the system raised its full-year outlook following a strong second quarter.
The debt picture
Tenet had $2.1 billion in cash on hand as of June 30, with leverage at 2.33 times adjusted EBITDA. The board also authorized a $2 billion expansion of its share repurchase program in the second quarter, leaving $2.13 billion available; the company bought back 5.7 million shares for $1.04 billion during the quarter.
Behind the refinancing
Tenet posted $826 million in net income in the second quarter, up from $288 million a year earlier, according to a July 23 financial report. Operating income was $1.5 billion, a 26.7% operating margin, compared with $823 million and a 15.6% margin a year earlier.
Total operating revenue rose 6.8% year over year to $5.6 billion, a figure that includes $413 million tied to the early conclusion of Conifer’s revenue cycle services contract with Chicago-based CommonSpirit Health.
Tenet raised its full-year 2026 guidance across the board: net operating revenue of $21.9 billion to $22.5 billion, net income of $2.87 billion to $3.02 billion, and adjusted EBITDA of $4.83 billion to $5.03 billion.
The system’s stock closed at a record $262.63 on July 28, up roughly 32% from where it opened 2026 and about 68% above its 52-week low of $156.72, according to Seeking Alpha.
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