Moody's lowers Tenet ratings

Moody's Investors Service said it downgraded Tenet Healthcare Corp.'s ratings, including the senior implied rating to B2 from B1, the senior unsecured notes rating to B3 from B1, the issuer rating to B3 from B1, and the senior subordinated notes to Caa2 from B3.

The outlook is negative.

Moody's said its rating actions are based on the belief that Tenet's ability to fund its cash needs over the next 12-18 months with both internal and external sources of cash is uncertain. This belief is based on the expectation that Tenet will generate negative free cash flow from the operation of its core facilities and those it plans to divest; the recent announcement that Tenet will need to pay about $148 million to settle the Bredosian lawsuit within the next several weeks; and a likely reduction in external liquidity as Tenet requests relief from its bank lenders.

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