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Long-Term Debt | 9 Months Ended
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Sep. 30, 2022
Long Term Debt And Capital Lease Obligations [Abstract] |
LONG-TERM DEBT | 6. LONG-TERM DEBT Long-term debt, net of unamortized deferred debt issuance costs, consists of the following (in millions):
|  | September 30, |  |  | December 31, |
|  | 2022 |  |  | 2021 |
6⅝% Senior Secured Notes due 2025 |  | $ | — |  |  | $ | 1,462 |
8% Senior Secured Notes due 2026 |  |  | 2,101 |  |  |  | 2,101 |
8% Senior Secured Notes due 2027 |  |  | 700 |  |  |  | 700 |
5⅝% Senior Secured Notes due 2027 |  |  | 1,900 |  |  |  | 1,900 |
6⅞% Senior Notes due 2028 |  |  | 756 |  |  |  | 767 |
6% Senior Secured Notes due 2029 |  |  | 900 |  |  |  | 900 |
5¼% Senior Secured Notes due 2030 |  |  | 1,535 |  |  |  | — |
4¾% Senior Secured Notes due 2031 |  |  | 1,058 |  |  |  | 1,095 |
6⅞% Junior-Priority Secured Notes due 2029 |  |  | 1,665 |  |  |  | 1,775 |
6⅛% Junior-Priority Secured Notes due 2030 |  |  | 1,331 |  |  |  | 1,440 |
ABL Facility |  |  | — |  |  |  | — |
Finance lease and financing obligations |  |  | 425 |  |  |  | 398 |
Other |  |  | 36 |  |  |  | 37 |
Less: Unamortized deferred debt issuance costs and note premium |  |  | (443 | ) |  |  | (435 | )
Total debt |  |  | 11,964 |  |  |  | 12,140 |
Less: Current maturities |  |  | (21 | ) |  |  | (31 | )
Total long-term debt |  | $ | 11,943 |  |  | $ | 12,109 |
On February 4, 2022, CHS/Community Health Systems, Inc. (“CHS”) completed a private offering of $1.535 billion aggregate principal amount of 5¼% Senior Secured Notes due May 15, 2030 (the “5¼% Senior Secured Notes due 2030”). The proceeds of the offering were used to redeem the 6⅝% Senior Secured Notes due 2025 on February 4, 2022, and to pay related fees and expenses. The 5¼% Senior Secured Notes due 2030 bear interest at a rate of 5.250% per year payable semi-annually in arrears on May 15 and November 15, commencing on November 15, 2022. The 5¼% Senior Secured Notes due 2030 are unconditionally guaranteed on a senior-priority secured basis by the Company and each of the current and future domestic subsidiaries of CHS that provide guarantees under the revolving asset-based loan facility (the “ABL Facility”), any capital market debt securities of CHS (including CHS’ outstanding senior notes) and certain other long-term debt of CHS. The 5¼% Senior Secured Notes due 2030 and the related guarantees are secured by shared (i) first-priority liens on the collateral that also secures on a first-priority basis CHS’ senior-priority secured notes and (ii) second-priority liens on the collateral that secures on a first-priority basis the ABL Facility, in each case subject to permitted liens described in the indenture governing the 5¼% Senior Secured Notes due 2030. CHS is entitled, at its option, to redeem all or a portion of the 5¼% Senior Secured Notes due 2030 at any time prior to May 15, 2025, upon not less than 10 nor more than 60 days’ notice, at a price equal to 100% of the principal amount of the 5¼% Senior Secured Notes due 2030 redeemed plus accrued and unpaid interest, if any, plus a “make-whole” premium, as described in the indenture governing the 5¼% Senior Secured Notes due 2030. CHS may redeem up to 40% of the aggregate principal amount of the 5¼% Senior Secured Notes due 2030 at any time prior to May 15, 2025 using the net proceeds from certain equity offerings at a redemption price of 105.250% of the principal amount of the 5¼% Senior Secured Notes due 2030 redeemed, plus accrued and unpaid interest, if any. In addition, any time prior to May 15, 2025, but not more than once during each twelve-month period, CHS may redeem up to 10% of the original aggregate principal amount of the 5¼% Senior Secured Notes due 2030 at a redemption price equal to 103% of the principal amount of the 5¼% Senior Secured Notes due 2030 to be redeemed, plus accrued and unpaid interest, if any. At any time and from time to time on or after May 15, 2025, CHS may redeem the 5¼% Senior Secured Notes due 2030 in whole or in part, upon not less than 10 nor more than 60 days’ prior written notice at a redemption price equal to the percentage of principal amount set forth below plus accrued and unpaid interest, if any, on the 5¼% Senior Secured Notes due 2030 redeemed, to, but excluding, the applicable date of redemption, if redeemed during the twelve-month period beginning on May 15 of the years indicated below:
Period |  | Redemption Price
May 15, 2025 to May 14, 2026 |  | 102.625%
May 15, 2026 to May 14, 2027 |  | 101.313%
May 15, 2027 to May 14, 2030 |  | 100.000%
During the three months ended September 30, 2022, the Company extinguished a portion of certain series of its outstanding notes through open market repurchases, as follows (in millions):
|  | Principal Amount |
6⅞% Senior Notes due 2028 |  | $ | 11 |
4¾% Senior Secured Notes due 2031 |  |  | 37 |
6⅞% Junior-Priority Secured Notes due 2029 |  |  | 110 |
6⅛% Junior-Priority Secured Notes due 2030 |  |  | 109 |
Total principal amount of debt extinguished |  | $ | 267 |
The Company recognized a pre-tax and after-tax gain from early extinguishment of debt associated with these open market repurchases of $78 million and $68 million, respectively, during the three months ended September 30, 2022. The maximum aggregate principal amount under the ABL Facility is $1.0 billion. At September 30, 2022, the available borrowing base under the ABL Facility was $935 million, of which $83 million was reserved for outstanding letters of credit and $852 million represented excess availability. Letters of credit were reduced during the nine months ended September 30, 2022 by $30 million due to a reduction in an insurance-related letter of credit. The Company had no outstanding borrowings as of September 30, 2022. The issued letters of credit are primarily in support of potential insurance-related claims and certain bonds. The ABL Facility contains customary representations and warranties, subject to limitations and exceptions, and customary covenants restricting the Company’s ability, subject to certain exceptions, to, among other things (1) declare dividends, make distributions or redeem or repurchase capital stock, (2) prepay, redeem or repurchase other debt, (3) incur liens or grant negative pledges, (4) make loans and investments and enter into acquisitions and joint ventures, (5) incur additional indebtedness or provide certain guarantees, (6) engage in mergers, acquisitions and asset sales, (7) conduct transactions with affiliates, (8) alter the nature of the Company’s, CHS’ or the guarantors’ businesses, (9) grant certain guarantees with respect to physician practices, (10) engage in sale and leaseback transactions or (11) change the Company’s fiscal year. The Company is also required to comply with a consolidated fixed charge coverage ratio, upon certain triggering events described below, and various affirmative covenants. The consolidated fixed charge coverage ratio is calculated as the ratio of (x) consolidated EBITDA (as defined in the ABL Facility) less capital expenditures to (y) the sum of consolidated interest expense (as defined in the ABL Facility), scheduled principal payments, income taxes and restricted payments made in cash or in permitted investments. For purposes of calculating the consolidated fixed charge coverage ratio, the calculation of consolidated EBITDA as defined in the ABL Facility is a trailing 12-month calculation that begins with the Company’s consolidated net income, with certain adjustments for interest, taxes, depreciation and amortization, net income attributable to noncontrolling interests, stock compensation expense, restructuring costs, and the financial impact of other non-cash or non-recurring items recorded during any such 12-month period. The consolidated fixed charge coverage ratio is a required covenant only in periods where the total borrowings outstanding under the ABL Facility reduce the amount available in the facility to less than the greater of (i) $95 million or (ii) 10% of the calculated borrowing base. As a result, in the event the Company has less than $95 million available under the ABL Facility, the Company would need to comply with the consolidated fixed charge coverage ratio. At September 30, 2022, the Company is not subject to the consolidated fixed charge coverage ratio as such triggering event had not occurred during the twelve months ended September 30, 2022. The Company paid interest of $204 million and $268 million on borrowings during the three months ended September 30, 2022 and 2021, respectively, and $614 million and $572 million on borrowings during the nine months ended September 30, 2022 and 2021, respectively.

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