S&P: Ardent still on negative watch

Standard & Poor's said it maintained its B+ rating on Ardent Health Services Inc. on CreditWatch with negative implications following Ardent's announcement of a definitive agreement to sell its 20 behavioral health hospitals to Psychiatric Solutions Inc. (B+/Watch negative/--) for $560 million in cash and stock.

Ardent has indicated that it will use the proceeds from the sale to tender for its $225 million of senior subordinated notes due 2013, repay other debt and for general corporate purposes. Other uses would include capital spending for a new hospital in Tulsa, Okla., an expansion of cardiovascular services in its two key markets, and a dividend to the equity sponsor.

S&P said the ratings on Ardent Health Services reflect its geographically concentrated acute-care asset portfolio, aggressive growth plans, the risk of volatile reimbursement trends for hospitals, and its short track record operating its key assets.

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