TribLIVE

| Business


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

West Penn Allegheny violated bond terms in June

Email Newsletters

Click here to sign up for one of our email newsletters.

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.

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.

Subscribe today! Click here for our subscription offers.

 

 

 


Show commenting policy

Most-Read Business Headlines

  1. Supreme Court justices ream EPA for ignoring costs to meet air standards
  2. Snappers treat revitalizes Lawrenceville’s Edward Marc Brands chocolatier
  3. Bank of New York Mellon seeks to intervene in N.J. casino saga as power plant taps collateral
  4. Heinz executives to dominate post-merger management of Kraft Heinz Co.
  5. Drillers to submit electronic records on fracking chemicals to Pa. DEP
  6. Pending home sales in U.S. climb to 9-year high
  7. Greece makes stocks slip to worst day of year
  8. Trump Plaza casino would stay closed for 10 years or more under plan
  9. More investors abandon stock pickers for index funds
  10. University mine rescue teams join to set rules, competitions
  11. Teen retailer American Eagle Outfitters goes mobile, revamps site