West Penn Allegheny violated bond terms in June
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 email@example.com.
Add Alex Nixon to your Google+ circles.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Koppers CEO believes struggling company can do better, transform
- More employers adopt generous leave policies
- How companies may adjust to tax on employee benefits
- Judge backs Sunoco in dispute over its use of eminent domain
- 2 Marcellus pipeline projects move forward
- Republican presidential hopeful Bush sets domestic energy as priority
- ATMs to give cash without your card
- Small-scale solar power market draws big utilities
- States extend $1.5B in breaks for data centers
- Many losers, few winners for 3Q funds
- For some small-business owners, fast, short-term loans have unsustainable interest