TribLIVE

| Business


 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

West Penn Allegheny violated bond terms in June

On the Grid

From the shale fields to the cooling towers, Trib Total Media covers the energy industry in Western Pennsylvania and beyond. For the latest news and views on gas, coal, electricity and more, check out On the Grid today.

Daily Photo Galleries

Friday, March 29, 2013, 12:01 a.m.
 

West Penn Allegheny Health System was in default of an agreement with bondholders at the end of June last year, the financially troubled hospital network said Thursday.

In a statement to bondholders, West Penn Allegheny said a ratio of cash to annual debt payments fell below the level required by investors holding more than $700 million of the system's bonds.

Spokesman Dan Laurent declined to comment.

The disclosure moves up by six months the point at which the system failed to meet at least one part of the agreement. West Penn Allegheny, which is in a deal to be acquired by health insurer Highmark Inc., failed to release an audited financial statement for the year ended June 30 by the end of December.

That could have led bondholders to force West Penn Allegheny into bankruptcy, but the hospital system and Highmark struck a deal with investors in January in which Highmark will buy the system's bonds at a discount of 87.5 cents on the dollar.

The bondholders agreed to hold off until May 1 on forcing repayment of the bonds. If West Penn Allegheny and Highmark don't complete the acquisition by the end of next month, bondholders would be free to demand payment, a move that would push the system into bankruptcy.

The deal is under review by the state Insurance Department, which has not said when it plans to make a ruling.

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or anixon@tribweb.com.

Add Alex Nixon to your Google+ circles.

 

 

 
 


Show commenting policy

Most-Read Business Headlines

  1. Beacons track shoppers’ smartphones amid retailers’ aisles
  2. 8 Western Pennsylvania hospitals penalized over infections
  3. Nonprofit hospitals in Western Pa. feel pain in finances despite Affordable Care Act
  4. Hospital finances still crying ‘ouch’
  5. Online price battle heats up with intraday price fluctuations
  6. EDMC accused in GI Bill scheme
  7. Ford expands air bag recall across U.S.
  8. Stock market makes biggest gain in 3 years
  9. FedEx to buy product-return firm Genco in e-commerce push
  10. Natural gas groups says increase in Pennsylvania taxes would bring dire results for economy
  11. Peet’s Coffee & Tea closes its 3 Pittsburgh stores
Subscribe today! Click here for our subscription offers.