Fitch assigns BB+/RR1 to HCA notes

Fitch Ratings said it assigned a BB+/RR1 rating to HCA Inc.'s proposed senior secured notes issuance.

Proceeds will be used to fund planned acquisitions and for general corporate purposes.

The outlook is stable.

The ratings apply to $31.7 billion of debt outstanding at March 31.

Fitch said the rating reflects that HCA has hospital industry-leading operating margins and generates consistent and ample discretionary FCF (operating cash flows less capex). Financial flexibility has improved significantly in recent years as a result of organic growth in the business as well as proactive management of the capital structure.

In addition, the agency forecasts that HCA will produce cash flow from operations (CFO) of about $4.8 billion in 2017, and will prioritize use of cash for M&A, organic investment in the business, and share repurchases. At 4 times, HCA's leverage is below the average of the group of publicly traded hospital companies, and Fitch said it does not believe that there is a compelling financial incentive for HCA to use cash for debt reduction.

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