Highmark Inc. and the West Penn Allegheny Health System officials today said they have reached an agreement with bondholders on a debt reduction deal.
According to a press release, Highmark has offered to purchase outstanding series 2007A bonds issued for WPAHS by the Allegheny County Hospital Development Authority for 87.5 cents on the dollar.
Highmark officials said the deal will preserve the pensions for the 12,000 West Penn Allegheny employees.
UMB Bank, trustee for the WPAHS bondholders, filed notice Tuesday that it was scheduling a bondholder call for Thursday morning in anticipation of today's announcement.
Although terms of the deal will be discussed in the private call, a formal vote by bondholders is not expected for some time as legal documents are prepared.
The agreement is considered crucial to Highmark's plans to acquire West Penn Allegheny, which it plans to have as the crown jewel in the regional integrated health care delivery system it is putting together to compete with UPMC.
Without it, efforts to gain approval from the Pennsylvania Insurance Department could have been in jeopardy.
With a deal in hand, Highmark will now file an amended application with the insurance department.
Steve Twedt: firstname.lastname@example.org or 412-263-1963.