UHS · 10-Q · 2026Q2 · Full report

Interest Rate and Refinancing Exposure

UNIVERSAL HEALTH SERVICES INC · 2026-08-07 · Importance 69 · Surprise 60 · In source text

UHS states that higher borrowing rates have significantly increased interest expense, reduced free cash flow and impaired access to capital markets on favorable terms. Its $700 million of 1.65% senior notes mature on September 1, 2026. Management expects to refinance these 2026 Notes at significantly higher interest rates, increasing interest expense and reducing net income attributable to UHS.

Key facts

• The company's $700 million, 1.65% senior notes ("2026 Notes") mature on September 1, 2026 and the company expects to refinance them at significantly higher interest rates, which will significantly increase interest expense. source
• Revolving credit and existing term loan A borrowings after the Eleventh Amendment bear interest at either ABR plus applicable margin (0.25% to 0.625%) or term SOFR plus applicable margin (1.25% to 1.625%); as of June 30, 2026 the applicable margins were 0.25% for ABR-based loans and 1.25% for SOFR-based loans. source
• The average effective interest rate (including amortization of deferred financing costs and OID) under our revolving credit, term loan A and senior notes was 3.9% during the second quarter of 2026 and 4.1% during the second quarter of 2025. source

Impact estimates