Fitch affirms Community Health

Fitch Ratings said it affirmed Community Health Systems Inc.'s BB rated senior secured bank facility and B+ rated convertible subordinated notes following the announcement that the company has agreed to repurchase $290 million of its common stock.

The outlook is stable.

Community is expected to finance the share repurchase with about $30 million in cash and a $260 million draw on the company's currently undrawn $425 million revolving bank facility.

While the increase in borrowing is rather large, Fitch said Community's credit profile has been trending positively. Industry issues such as bad debt have taken their toll on Community Health's margins, but the company has fared better than its peers in this regard and pricing remains fairly strong.

Despite the increase in debt, leverage and coverage remain appropriate for the category. Fitch said it anticipates that at year-end leverage will be between 3.5x to 3.7x and coverage will be in the 5.5x to 5.7x range.

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