Moody's introduces new ratings

Moody's Investors Service has introduced two new ratings: probability-of-default ratings and loss-given-default ratings.

The agency's current long-term credit ratings are opinions about expected credit loss that incorporate both the likelihood of default and the expected loss in the event of default. The loss-given-default rating methodology will disaggregate these two key assessments in long-term ratings. The agency said the methodology will also enhance the consistency in its notching practices across industries and will improve the transparency and accuracy of its ratings, as Moody's research shows that credit losses on bank loans have tended to be lower than those for similarly rated bonds.

Probability-of-default ratings are assigned only to issuers, not specific debt instruments, and use the standard Moody's alpha-numeric scale. They express Moody's opinion of the likelihood that any entity within a corporate family will default on any of its debt obligations.

Loss-given-default assessments (or LGDs) are assigned to individual rated debt issues - loans, bonds and preferred stock - and express Moody's opinion of expected loss as a percent of principal and accrued interest at the resolution of the default, with assessments ranging from LGD1 (loss anticipated to be 0%-9%) to LGD6 (loss anticipated to be 90%-100%).

Below is a list of the rating actions for Moody's rated companies, sorted by industry. The rating immediately after the company name denotes the corporate family rating and the percentages next to the LGDs represent the expected loss-given-default rates.

U.S. hospital and long-term care

Capella Healthcare, Inc., B3; probability-of-default rating: B3; revolver and first-lien term loan, upgraded to B2 from B3, LGD3, 36%; second-lien term loan, Caa2, LGD5, 87%.

Community Health Systems, Inc., Ba3; probability-of-default rating: Ba3; notes, upgraded to B2 from B3, LGD6, 92%. CHS/Community Health Systems, Inc., revolver and term loan, Ba3, LGD3, 42%.

Extendicare Health Services, Inc., Ba3; probability-of-default rating: Ba3; revolver and term loan, upgraded to Ba1 from Ba2, LGD2, 18%; senior unsecured notes, upgraded to Ba3 from B1, LGD4, 59%; senior subordinated notes, B2, LGD6, 91%.

Genesis HealthCare Corp., Ba3; probability-of-default rating: Ba3; revolver, upgraded to Baa3 from Ba2, LGD1, 9%; notes, upgraded to B1 from B2, LGD4, 63%.

Genoa Healthcare Group, LLC, B2; probability-of-default rating: B2; revolver and first-lien term loan, upgraded to Ba3 from B2, LGD2, 27%; second-lien term loan, Caa1, LGD5, 78%.

GGNSC Holdings, LLC, B2; probability-of-default rating: B2. Golden Gate National Senior Care, LLC, revolver and first-lien term loan, upgraded to Ba3 from B1, LGD2, 26%; second-lien term loan, upgraded to B3 from Caa1, LGD4, 68%.

HCA Inc., Ba2; probability-of-default rating: Ba2; revolver, notes and debentures, Ba2, LGD4, 60%; unsecured senior shelf, prospective Ba2, LGD4, 60%.

HealthSouth Corp., B3; probability-of-default rating: B3; revolver and term loan, B2, LGD3, 36%; notes, downgraded to Caa1 from B3, LGD5, 72%.

Iasis Healthcare LLC, B1; probability-of-default rating: B1; revolver and term loan, upgraded to Ba2 from B1, LGD2, 23%; notes, B3, LGD5, 78%.

LifeCare Holdings, Inc., B2; probability-of-default rating: B2; revolver and term loan, upgraded to Ba3 from B2, LGD3, 31%; notes, Caa1, LGD5, 85%.

LifePoint Hospitals, Inc., Ba3; probability-of-default rating: Ba3; revolver and term loan, Ba3, LGD3, 45%; convertible notes, B2, LGD6, 94%.

MedCath Holdings Corp., B2; probability-of-default rating: B2; revolver and term loan, B2, LGD3, 44%; notes, Caa1, LGD5, 81%;

Select Medical Holdings Corp., B1; probability-of-default rating: B1; notes, upgraded to B3 from Caa1, LGD6, 90%. Select Medical Corp., revolver and term loan, upgraded to Ba1 from B1, LGD2, 19%; notes, upgraded to B2 from B3, LGD4, 67%.

Skilled Healthcare Group, Inc., B2; probability-of-default rating: B2; revolver and term loan, upgraded to Ba3 from B1, LGD2, 27%; notes, Caa1, LGD5, 82%.

Tenet Healthcare Corp., B3; probability-of-default rating: B2; notes, B3, LGD5, 73%.

Triad Hospitals, Inc., Ba3; probability-of-default rating: Ba3; revolver and term loan, upgraded to Ba1 from Ba2, LGD2, 18%; senior unsecured notes, upgraded to B1 from B2, LGD4, 64%; senior subordinated notes, upgraded to B2 from B3, LGD5, 89%.

Triumph Healthcare Second Holdings, Inc., B2; probability-of-default rating: B2; revolver and first-lien term loan, upgraded to B1 from B2, LGD3, 35%; second-lien term loan, Caa1, LGD5, 86%.

Vanguard Health Holding Co. I, LLC, B2; probability-of-default rating: B2; discount notes, upgraded to Caa1 from Caa2, LGD6, 95%. Vanguard Health Holding Co. II, LLC, revolver and term loan, upgraded to Ba3 from B2, LGD2, 26%; notes, Caa1, LGD5, 81%.

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