Tenet Healthcare to retire $500 million of debt; 5x leverage targeted

By Devika Patel

Knoxville, Tenn., May 22 – Tenet Healthcare Corp. targets a leverage ratio of below 5x by the end of 2019, which will primarily be achieved through earnings growth, but the company has already retired some debt recently and plans to retire $500 million more in early 2019.

“In terms of leverage, our target is 5x or lower by the end of next year,” chief financial officer Daniel Cancelmi said at the Barclays High Yield Bond & Syndicated Loan Conference in Colorado Springs, Colo., on Tuesday.

“We’ll achieve that primarily through earnings growth.

“However, we will continue to look for opportunities to pay down debt or retire debt efficiently,” Cancelmi said.

The company has already retired some debt and has $500 million of debt coming due in early 2019.

“Last year we retired $250 million of 8% notes with some sales proceeds,” Cancelmi said.

“In the first quarter of this year, we retired $50 million worth of debt at a pretty attractive yield.

“Next year we have $500 million of notes coming due in March of 2019 and we’ll probably use some cash flow to retire that debt as well.

“Through a combination of continued improvement on our operations as well as efficient opportunities to reduce debt, that’s the path that getting our leverage down to 5x or less,” Cancelmi said.

The company’s top executive reiterated Cancelmi’s statements.

“Leverage is important to us to get down,” executive chairman and chief executive officer Ronald Rittenmeyer said on the call.

“We’ve committed to being below 5x by 2019.

“We’re on a clear path to do that,” Rittenmeyer said.

Tenet is a Dallas-based owner and operator of acute care hospitals, ambulatory surgery centers, diagnostic imaging centers and related healthcare facilities.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.