Community Health plans to extend bank debt, refinance revolver

By Aleesia Forni

Columbus, Ohio, Dec. 13 - Community Health Systems, Inc. plans to focus on extending its bank debt going forward this year and into 2012 as well as refinancing its revolver.

"We've had a lot more acquisitions than were in our original guidance of two to three [acquisitions], and we probably will have some draw down on the revolver," chief financial officer W. Larry Cash said during the company's presentation at the Oppenheimer & Co. Healthcare Conference in New York on Tuesday.

The company used its revolver "a little bit" to pay expenses in connection with its bond offering in November.

"We're also working on AR securitization, which will be effective financing and help us on the acquisitions, and as we grow cash flow next year, we should be able to pay for the acquisitions unless we do more," Cash said. "Then we'll use the revolver."

The company uses most of its cash flow for acquisitions.

About 91% of the company's debt is fixed rate.

As of Sept. 30, the company had long-term debt of roughly $8.7 billion and debt to EBITDA of 4.8x.

Cash added that debt to EBITDA should "continue to improve" with the company's "natural growth" of EBITDA and as debt is kept "roughly stable."

The Franklin, Tenn.-based hospital operator expects cash provided by operating activities to be between $1.15 billion and $1.25 billion for fiscal 2011.

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