Moody’s: Tenet upsized bond is credit negative

Moody's Investors Service said that Tenet Healthcare Corp.’s upsizing of its senior secured second-lien bond offering is credit negative as it will increase leverage and interest costs.

Tenet issued a total of $750 million of 7˝% senior secured second-lien notes maturing 2022 on Nov. 16. This represents an upsize from the $500 million initially announced.

The incremental debt increases adjusted leverage by 0.1 times and brings the agency’s expectation of debt to EBITDA at the end of 2016 to about 7 times.

However, there is no change to Tenet's existing ratings, including the B2 corporate family rating and the Ba3 rating on the notes.

The outlook is negative.

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