Fitch cuts Tenet ratings

Fitch Ratings said it has downgraded Tenet Healthcare Corp.'s senior unsecured debt and bank facility ratings to B+ from BB.

The outlook is negative.

Fitch said the downgrade reflects continued weak operating performance primarily as it relates to cash flow. The company's weakness in earning power is mostly attributed to the company's difficulty in achieving market-level increases in its managed care contracting efforts and continued bad debt exposure driven, in part, by the company's price structure.

Tenet recently announced a major restructuring plan that will include the divestiture of nearly one-third of the company's hospitals. The facilities targeted for divestiture are poor performers, and Tenet believes it is retaining a core of profitable facilities. The company will take a $1.4 billion charge to reflect asset impairments and goodwill write-down.

Proceeds from the sale are expected to generate about $600 million.

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