Fitch gives CHS/Community notes B/RR1

Fitch Ratings said it assigned an expected B/RR1 rating to CHS/Community Health Systems, Inc.'s $1.03 billion proposed senior secured notes due 2024.

Proceeds are expected to be used to refinance the term loan G amounts outstanding under the senior secured credit facility.

CHS completed a transaction that exchanged the majority of the 8% senior notes due 2019 and the 7 1/8% senior notes due 2020 for about $1.8 billion of new 11% senior secured junior priority notes due 2023 and $1.4 billion of new 8 1/8% senior secured junior priority notes due 2024.

A $368 million portion of the 6 7/8% senior notes due 2022 were also exchanged.

“The DDE slightly enhanced near-term liquidity by pushing out a 2019-2020 unsecured debt maturity wall, which buys the company more time to execute on an operational turn-around plan focused on restoring organic growth and improving profitability of hospitals in certain targeted markets,” Fitch said in a news release.

However, the agency also said that credit concerns of a high overall debt burden and persistently weak operating trends remain, and CHS has additional large debt maturities beginning in 2021.

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