S&P ups Community Health, rates notes

S&P said it raised its corporate credit rating on Community Health Systems Inc. to CCC+ from SD (selective default).

The outlook is negative.

At the same time, the agency assigned its CCC- issue-level rating to the company's new $1.77 billion junior-lien priority notes due 2023 and $1.35 billion junior-lien priority notes due 2024. The 6 recovery rating indicates an expectation for negligible (0%-10%; rounded estimate: 0%) recovery in the event of a default.

The agency also assigned its B- issue-level rating to the company's proposed $1 billion senior secured bond. The 2 recovery rating indicates an expectation for substantial (70%-90%; rounded estimate: 80%) recovery.

The issue-level rating on the company's existing senior secured debt remains B- with a recovery rating of 2. The issue-level rating on the company's existing unsecured notes remains CCC- with a recovery rating of 6.

The upgrade reflects the company's longer-dated debt maturity schedule, and a view that its efforts to rationalize its hospital portfolio as well as improve financial performance and cash flow should strengthen credit measures over the next 12 to 18 months, S&P said.

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