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.

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. U.S. oil, natural gas rig count drops by 34 to 954
  2. Is Big Brother a backseat driver?
  3. Mylan discounts speculation of a possible takeover by Teva
  4. Google’s changes to search results formula expected to shake up mobile economy
  5. Pa. employers shed 12,700 jobs in March; unemployment rate rises to 5.3 percent
  6. Renewed fears of Greek default whack stock market
  7. Jump in home loans, trading commissions lead to profitable 1st quarter for banks
  8. Review: Chevrolet Trax is an affordable SUV option
  9. Opportunities grow for grads
  10. Glaxo to close Moon office, affecting 274 workers
  11. PPG axes 1,700 jobs as part of global restructuring