HCA HCA Healthcare Inc

Item 1.01 Entry into a Material Definitive Agreement.

Issuance of $5,000,000,000 aggregate principal amount of senior secured notes

Overview

On June 12, 2019, HCA Inc. (the “Issuer”), a direct, wholly owned subsidiary of HCA Healthcare, Inc. (the “Parent Guarantor”), completed the public offering of $5,000,000,000 aggregate principal amount of its senior secured notes, consisting of (i) $2,000,000,000 aggregate principal amount of 4 ¹ ⁄ ₈ % Senior Secured Notes due 2029 (the “2029 Notes”), (ii) $1,000,000,000 aggregate principal amount of 5 ¹ ⁄ ₈ % Senior Secured Notes due 2039 (the “2039 Notes”) and (iii) $2,000,000,000 aggregate principal amount of 5 ¹ ⁄ ₄ % Senior Secured Notes due 2049 (the “2049 Notes” and, together with the 2029 Notes and the 2039 Notes, the “Notes”), each guaranteed on a senior unsecured basis by the Parent Guarantor and on a senior secured basis by certain of the Issuer’s subsidiaries (together with the Parent Guarantor, the “Guarantors”). The Notes have been registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the Issuer’s and the Guarantors’ shelf registration statement on Form S-3, filed on August 9, 2018 (File No. 333-226709) (the “Registration Statement”), as supplemented by the prospectus supplement dated June 5, 2019, previously filed with the Securities and Exchange Commission under the Securities Act.

On June 12, 2019, the Notes were issued pursuant to an Indenture, dated as of August 1, 2011 (the “Base Indenture”), among the Issuer, the Parent Guarantor, Delaware Trust Company (as successor to Law Debenture Trust Company of New York), as trustee (the “Trustee”), and Deutsche Bank Trust Company Americas, as registrar, paying agent and transfer agent (the “Registrar”), as amended and supplemented by (i) the Supplemental Indenture No. 23, dated as of June 12, 2019, among the Issuer, the Guarantors, the Trustee and the Registrar, relating to the 2029 Notes (together with the Base Indenture, the “2029 Notes Indenture”), (ii) the Supplemental Indenture No. 24, dated as of June 12, 2019, among the Issuer, the Guarantors, the Trustee and the Registrar, relating to the 2039 Notes (together with the Base Indenture, the “2039 Notes Indenture”), and (iii) the Supplemental Indenture No. 25, dated as of June 12, 2019, among the Issuer, the Guarantors, the Trustee and the Registrar, relating to the 2049 Notes (together with the Base Indenture, the “2049 Notes Indenture” and, together with the 2029 Notes Indenture and the 2039 Notes Indenture, the “Indentures”).

Net proceeds from the offering of the Notes, after deducting underwriter discounts and estimated offering expenses, are estimated to be approximately $4.905 billion. The Issuer intends to use the net proceeds from the offering of the Notes for general corporate purposes and the redemption of all $600 million outstanding aggregate principal amount of the Issuer’s existing 4.25% Senior Secured Notes due 2019, all $3.000 billion outstanding aggregate principal amount of the Issuer’s existing 6.50% Senior Secured Notes due 2020 and all $1.350 billion outstanding aggregate principal amount of the Issuer’s existing 5.875% Senior Secured Notes due 2022.

The following is a brief description of the terms of the Notes and the Indentures.

Maturity and Interest Payment Dates

The 2029 Notes will mature on June 15, 2029, the 2039 Notes will mature on June 15, 2039 and the 2049 Notes will mature on June 15, 2049. Interest on the Notes will be payable semi-annually, on June 15 and December 15 of each year, commencing on December 15, 2019, to holders of record on the preceding June 1 and December 1, as the case may be.

Ranking

The Notes are the Issuer’s senior secured obligations and: (i) rank senior in right of payment to any of its existing and future subordinated indebtedness, (ii) rank equally in right of payment with any of its existing and future senior indebtedness, (iii) are effectively senior in right of payment to any unsecured indebtedness to the extent of the collateral securing the Notes, (iv) are effectively equal in right of payment with indebtedness under its cash flow credit facility and the existing first lien notes to the extent of the collateral securing such indebtedness, (v) are effectively subordinated in right of payment to all indebtedness under its asset-based revolving credit facility to the extent of the shared collateral securing such indebtedness, and (vi) are structurally subordinated in right of payment to all existing and future indebtedness and other liabilities of its non-guarantor subsidiaries (other than indebtedness and liabilities owed to it or one of its subsidiary guarantors).

Guarantees

The Notes are fully and unconditionally guaranteed on a senior unsecured basis by the Parent Guarantor and on a senior secured basis by each of the Issuer’s existing and future direct or indirect wholly owned domestic subsidiaries that guarantees its obligations under its senior secured credit facilities (except for certain special purpose subsidiaries that only guarantee and pledge their assets under the Issuer’s asset-based revolving credit facility).

Security

The Notes and related subsidiary guarantees are secured by first-priority liens, subject to permitted liens, on certain of the assets of the Issuer and the subsidiary guarantors that secure the Issuer’s cash flow credit facility and the existing first lien notes on a pari passu basis, including: (i) substantially all of the capital stock of substantially all wholly owned first-tier subsidiaries of the Issuer or of subsidiary guarantors of the existing first lien notes (but limited to 65% of the stock of any such wholly-owned first-tier subsidiary that is a foreign subsidiary) subject to certain limited exceptions; and (ii) substantially all tangible and intangible assets of the Issuer and each subsidiary guarantor, other than (1) other properties that do not secure the Issuer’s senior secured credit facilities, (2) certain deposit accounts, other bank or securities accounts and cash, (3) leaseholds and certain other exceptions; provided that, with respect to the portion of the collateral comprised of real property, the Issuer will have up to 90 days following the issue date of the Notes to complete those actions required to perfect the first-priority lien on such collateral and (4) certain receivables collateral that only secures the Issuer’s asset-based revolving credit facility, in each case subject to exceptions, and except that the lien on properties defined as “principal properties” under the Issuer’s existing indenture dated as of December 16, 1993 so long as such indenture remains in effect, will be limited to securing a portion of the indebtedness under the Notes, the Issuer’s cash flow credit facility and the existing first lien notes that, in the aggregate, does not exceed 10% of the Issuer’s consolidated net tangible assets.

The Notes and the related subsidiary guarantees will be secured by second-priority liens, subject to permitted liens, on certain receivables of the Issuer and the subsidiary guarantors that secure the Issuer’s asset-based revolving credit facility on a first-priority basis.

In the event that each of Moody’s Investors Service, Inc. and Standard & Poor’s Ratings Services issues an investment grade rating with respect to both the Notes and the “corporate family rating” (or comparable designation) for the Parent Guarantor and its subsidiaries, the collateral securing the Notes and the related subsidiary guarantees will be released. In addition, to the extent the collateral is released as security for the Issuer’s senior secured credit facilities, it will also be released as security for the Notes and for the related subsidiary guarantees.

Covenants

The Indentures contain covenants limiting the Issuer’s and certain of its subsidiaries’ ability to: (i) create liens on certain assets to secure debt, (ii) engage in certain sale and lease-back transactions, and (iii) in the case of the Issuer, consolidate, merge, sell or otherwise dispose of all or substantially all of its assets. These covenants are subject to a number of important limitations and exceptions.

Optional Redemption

The Indentures permit the Issuer to redeem some or all of the Notes at any time at the redemption prices set forth in the applicable Indenture.

Change of Control

Upon the occurrence of a change of control, as defined in the Indentures, each holder of the Notes has the right to require the Issuer to repurchase some or all of such holder’s Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the repurchase date.

Events of Default

The Indentures also provide for events of default which, if any of them occurs, would permit or require the principal of and accrued interest on the Notes to become or to be declared due and payable.

Intercreditor Arrangements

First Lien Intercreditor Agreement

Bank of America, N.A., as collateral agent for the existing first lien notes and obligations under the cash flow credit facility (the “First Lien Collateral Agent”), Bank of America, N.A., as authorized representative of the lenders under the cash flow credit facility (the “Administrative Agent”), and Law Debenture Trust Company of New York, as authorized representative of the holders of the existing first lien notes, entered into a First Lien Intercreditor Agreement, dated as of April 22, 2009, with respect to the collateral (the “Collateral”) that secures the cash flow credit facility, the existing first lien notes and the Notes and may secure additional first lien obligations (“Additional First Lien Obligations”) permitted to be incurred under the Issuer’s debt instruments and designated as Additional First Lien Obligations for purposes of the First Lien Intercreditor Agreement, the Security Agreement and the Pledge Agreement. The Notes and related subsidiary guarantees became subject to the First Lien Intercreditor Agreement as of June 12, 2019. Pursuant to an Additional First Lien Secured Party Consent dated as of June 12, 2019, Bank of America, N.A. was also appointed as collateral agent for the holders of the Notes, and therefore the Notes and related subsidiary guarantees became subject to the First Lien Intercreditor Agreement as of that date.

Additional Receivables Intercreditor Agreement

In addition, the First Lien Collateral Agent and Bank of America, N.A., as collateral agent (the “ABL Collateral Agent”) in connection with the asset-based revolving facility, entered into an Additional Receivables Intercreditor Agreement, dated as of June 12, 2019, by which the Notes are given the same ranking, rights, privileges and obligations with respect to certain receivables collateral that secures the asset-based revolving credit facility on a first-priority basis and the Notes, cash flow credit facility and the existing first lien notes on a second-priority basis.

The foregoing descriptions of the Notes, the Indentures (including the forms of the Notes) and Security and Intercreditor Agreements are qualified in their entirety by the terms of such agreements. Please refer to such agreements, which are incorporated herein by reference and attached hereto as Exhibits 4.1 through 4.11.