Medstar Health, Inc
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NEW ISSUE—BOOK-ENTRY ONLY Ratings† Fitch: A Moody’s: A2 Standard & Poor’s: A- $100,895,000 MEDSTAR HEALTH, INC. TAXABLE BONDS, SERIES 2015 Dated: Date of Issue Due August 15, as set forth on inside cover Interest Payable: February 15 and August 15 The MedStar Health, Inc. Taxable Bonds, Series 2015 (the “Bonds”) are general obligations of MedStar Health, Inc. (the “Corporation”), issued pursuant to an Indenture, as described herein, and will be payable from payments made by the Corporation under the Indenture and from certain funds held under the Indenture. The obligations of the Corporation under the Indenture are evidenced and secured by a promissory note of the Obligated Group to the Trustee issued under the Master Indenture and secured equally and ratably with certain other outstanding Obligations of the Corporation under the Master Indenture. In addition, except as described herein, the Material System Affiliates and certain other System Affiliates (the “Guarantors”) have entered into a Guaranty Agreement in favor of the Master Trustee jointly and severally guaranteeing the payment and performance of the obligations of the Corporation under the Master Indenture. The obligations of the Guarantors are secured by certain Deeds of Trust on certain property of the Guarantors. See “Security and Sources of Payment for the Bonds.” The Bonds are issuable only as fully registered bonds in denominations of $1,000 or integral multiples thereof. All of the Bonds initially will be maintained under a book-entry system under which The Depository Trust Company, New York, New York (“DTC”), will act as securities depository. Purchases of the Bonds will be in book-entry form only (without physical certificates) and, under limited circumstances, will be exchangeable for physical certificates, as more fully described herein. Interest on the Bonds from the date of their initial delivery is payable on August 15, 2015, and semiannually thereafter on each February 15 and August 15. As long as the Bonds are maintained under a book-entry system, payments of the principal of and Make-Whole Redemption Price, if any, and interest on the Bonds will be made when due by U.S. Bank National Association, (the “Trustee”), to DTC in accordance with the Indenture, and the Trustee will have no obligation to make any payments to any beneficial owner of any Bonds. See Appendix E — “Book-Entry System” herein. The Bonds are subject to optional redemption prior to their respective maturities, as described herein. Interest on, and gain, if any, on the sale of the Bonds are not excludable from gross income for federal, state or local income tax purposes. See “Certain United States Federal Income Tax Considerations” herein. This cover page contains information for general reference only. It is not intended as a summary of these transactions. Investors are advised to read the entire Offering Memorandum to obtain information essential to making an informed investment decision. The Bonds are offered, subject to prior sale, when, as and if received by the Underwriters, and to the approval of certain legal matters for the Corporation by the Executive Vice President and General Counsel of the Corporation and Ballard Spahr LLP, special counsel to the Corporation, and by Orrick, Herrington & Sutcliffe LLP, counsel to the Underwriters, and to certain other conditions. It is expected that the Bonds will be available for delivery through DTC on or about February 11, 2015. J.P. Morgan BofA Merrill Lynch Citigroup Loop Capital Markets RBC Capital Markets US Bancorp Wells Fargo Securities January 29, 2015 † See the caption “RATINGS” herein. $100,895,000 MEDSTAR HEALTH, INC. Taxable Bonds, Series 2015 MATURITY SCHEDULE Maturity Date Principal Interest (August 15) Amount Rate Yield Price CUSIP± 2016 $5,155,000 0.800% 0.800% 100% 58506YAA0 2017 5,130,000 1.216 1.216 100 58506YAB8 2018 4,965,000 1.735 1.735 100 58506YAC6 2019 6,730,000 2.025 2.025 100 58506YAD4 2020 6,740,000 2.325 2.325 100 58506YAE2 2021 6,730,000 2.562 2.562 100 58506YAF9 2022 6,770,000 2.762 2.762 100 58506YAG7 2023 9,225,000 2.899 2.899 100 58506YAH5 2024 5,140,000 3.049 3.049 100 58506YAJ1 2025 6,100,000 3.099 3.099 100 58506YAK8 2026 6,155,000 3.249 3.249 100 58506YAL6 2027 6,240,000 3.399 3.399 100 58506YAM4 2028 6,330,000 3.499 3.499 100 58506YAN2 2029 6,400,000 3.599 3.599 100 58506YAP7 2030 6,490,000 3.649 3.649 100 58506YAQ5 2031 6,595,000 3.699 3.699 100 58506YAR3 ± Copyright 2015, American Bankers Association. CUSIP data herein are provided by the CUSIP Service Bureau, managed on behalf of the American Bankers Association by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. The CUSIP numbers listed above are being provided solely for the convenience of bondholders only and neither the Underwriters nor the Corporation makes any representation with respect to such numbers or undertakes any responsibility for their accuracy. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. No dealer, broker, sales representative or other person has been authorized by MedStar Health, Inc. (the “Corporation”) or the Underwriters to give any information or to make any representation other than as contained in this Offering Memorandum and, if given or made, such other information or representation must not be relied upon as having been authorized by any of the foregoing. This Offering Memorandum does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. The information set forth herein has been obtained from the Corporation, The Depository Trust Company (“DTC”) and other sources that are believed to be reliable but is not guaranteed as to accuracy or completeness by the Underwriters, and is not to be construed as a representation either by the Underwriters or, as to information from sources other than DTC, by DTC. The Underwriters have provided the following sentence for inclusion in this Offering Memorandum: The Underwriters have reviewed the information in this Offering Memorandum in accordance with and as part of their responsibility to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the Bonds, or determined that this Offering Memorandum is accurate or complete. Any representation to the contrary is a criminal offense. This Offering Memorandum contains certain “forward-looking statements” concerning the operations and financial condition of the Corporation. These statements are based upon a number of assumptions and estimates which are subject to significant uncertainties, many of which are beyond the control of the Corporation. The words “may,” “would,” “could,” “will,” “expect,” “anticipate,” “believe,” “intend,” “plan,” “estimate” and similar expressions are meant to identify these forward-looking statements. Actual results may differ materially from those expressed or implied by these forward-looking statements. The Corporation does not plan to issue any updates or revisions to these forward-looking statements if or when its expectations or events, conditions or circumstances on which such statements are based occur. All quotations from and summaries and explanations of provisions of laws and documents herein do not purport to be complete and reference is made to such laws and documents for full and complete statements of their provisions. Any statements made in this Offering Memorandum involving estimates or matters of opinion, whether or not expressly so stated, are intended merely as estimates or opinions and not as representations of fact. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Offering Memorandum nor any sale of the Bonds shall under any circumstances create any implication that there has been no change in the affairs of the Corporation or DTC since the date hereof. The Bonds have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), and are being issued in reliance on an exemption under Section 3(a)(4) of the Securities Act. The Bonds are not exempt in every jurisdiction in the United States; some jurisdictions’ securities laws (the “blue sky laws”) may require a filing and a fee to secure the Bonds’ exemption from registration. [THIS PAGE INTENTIONALLY LEFT BLANK] TABLE OF CONTENTS Page INTRODUCTORY STATEMENT ........................................................................................................................... 1 ESTIMATED USES AND SOURCES OF FUNDS ................................................................................................. 2 PLAN OF FINANCING ............................................................................................................................................ 2 THE BONDS ............................................................................................................................................................. 3 General .........................................................................................................................................................