Fitch rates Tenet notes BB

Fitch Ratings said it assigned a BB rating with a recovery rating of RR1 to Tenet Healthcare Corp.'s 4½% senior secured notes due 2021.

The company has an issuer default rating of B, along with a BB rating and RR1 recovery rating to its senior secured credit facility and senior secured notes and B- rating and RR5 recovery rating to its senior unsecured notes.

The outlook is stable.

Tenet will use the proceeds of the $850 million senior secured notes issuance to retire $714 million of its 10% senior secured notes due 2018 in a tender offer, Fitch said.

The balance will be used for general corporate purposes, including acquisitions, share repurchases and retirement of debt outstanding under its bank revolving credit facility, the agency said.

While Tenet's liquidity and financial flexibility have incrementally improved, the company continues to exhibit industry-lagging profitability and negative free cash flow, Fitch added.

Tenet's liquidity profile is otherwise solid. Debt maturities are small until 2015, the company has adequate available liquidity in cash on hand and credit revolver availability, and there are no financial maintenance covenants in effect under its debt agreements, the agency said.

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