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Moody's ups Tenet Healthcare
Moody's Investors Service said it upgraded the corporate family and probability of default ratings of Tenet Healthcare Corp. to B2 from B3, along with its:
• $800 million senior secured revolving credit facility due 2011 to Ba2 (LGD 1, 3%) from Ba3 (LGD 1, 3%), 9% senior secured notes due 2015 to B1 (LGD 3, 37%) from B2 (LGD 3, 35%);
• 10% senior secured notes due 2018 to B1 (LGD 3, 37%) from B2 (LGD 3, 35%), 8.875% senior secured notes due 2019 to B1 (LGD 3, 37%) from B2 (LGD 3, 35%), 6 3/8% senior notes due 2011 to Caa1 (LGD 5, 85%) from Caa2 (LGD 5, 84%);
• 6½% senior notes due 2012 to Caa1 (LGD 5, 85%) from Caa2 (LGD 5, 84%), 7 3/8% senior notes due 2013 to Caa1 (LGD 5, 85%) from Caa2 (LGD 5, 84%), 9 7/8% senior notes due 2014 to Caa1 (LGD 5, 85%) from Caa2 (LGD 5, 84%); and
• 9¼% senior notes due 2015 to Caa1 (LGD 5, 85%) from Caa2 (LGD 5, 84%) and 6 7/8% senior notes due 2031 to Caa1 (LGD 5, 85%) from Caa2 (LGD 5, 84%).
The agency also said it affirmed its speculative grade liquidity rating at SGL-2.
The outlook is stable.
The upgrade reflects continued improvement in operating results, which was further supported by the company's recent announcement raising 2010 adjusted EBITDA guidance, Moody's said.
The agency said it believes that leverage will continue to modestly improve based on EBITDA growth and it is expected that the company will likely see positive free cash flow for the full year ending Dec. 31, 2010, aided by the ending of settlement payments in the third quarter.
The ratings also consider the significant headwinds facing the company, and the sector as a whole, with respect to the cost of uncompensated care, weak volume trends and changes in mix as commercial volumes decline.
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