Fitch upgrades Tenet Healthcare

Fitch Ratings said it upgraded Tenet Healthcare Corp.'s long-term issuer default rating to B+ from B. Fitch also boosted Tenet's instrument ratings by one notch, including the asset-based lending revolver to BB+/RR1 from BB/RR1, the senior secured first-lien notes to BB-/RR3 from B+/RR3, the senior secured second-lien notes to B+/RR4 from B/RR4 and the senior unsecured notes to B+/RR4 from B/RR4.

“The upgrade reflects Tenet's improving competitive position as a healthcare provider and the durability of its operational and financial results through the pandemic, with debt leverage declining meaningfully in recent years albeit still at high levels. Fitch expects leverage to remain below 5.5x (based on Fitch-defined EBITDA) through the rating horizon, as is appropriate for the B+ rating, but notes potential risk to leverage levels should Tenet's capital allocation decisions prove overly aggressive through large, debt-funded acquisitions and its stated potential to consider commencing share repurchases in 2023,” the agency said in a press release.

The outlook is stable.

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