S&P rates Tenet notes B+, CCC+

Standard & Poor's said it assigned its B+ issue-level rating to Tenet Healthcare Corp.'s proposed $1.8 billion senior secured notes due 2019, with a 2 recovery rating, indicating prospects of substantial recovery (70%-90%) of principal in the event of a default.

In addition, the agency assigned its CCC+ rating to Tenet's proposed $2.8 billion senior unsecured notes due 2021, with a 6 recovery rating, indicating prospects of negligible recovery (0%-10%)of principal in the event of a default.

The B corporate credit rating is unchanged.

The new notes, which will finance the company's pending acquisition of Vanguard, will increase debt leverage to about 6x.

S&P said he ratings on Tenet reflect its "weak" business risk profile highlighted by reimbursement risk and some reliance on its top three states for nearly half of total revenues. In addition, Tenet operates in several large markets that we believe are competitive, the agency said.

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