Moody's rates Tenet notes B3

Moody's Investors Service said it assigned a B3 rating to Tenet Healthcare's new $500 million senior unsecured note offering. At the same time, Moody's affirmed the company's B2 senior implied rating and other long-term ratings and its SGL-4 speculative grade liquidity rating. The outlook remains negative.

Moody's said it understands that the proceeds from this new issue will be used largely to refinance all remaining 2006 and 2007 debt maturities. In addition, depending on final issuance size, the company expects to have some additional funds available to support cash balances, which have been depleted to about $500 million following the recent $395 million Redding settlement and a collateral requirement for Tenet's outstanding LOCs under a new temporary loan agreement.

The ratings incorporate the expectation that Tenet will be able to collect a tax refund related to facility divestitures within the next several months, raising cash balances to at least the $1 billion range during the second quarter of 2005, according to Moody's.

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