Moody's downgrades HCA note to Caa1

Moody's Investors Service said it downgraded HCA Inc.'s $7.5 million senior unsecured notes to Caa1 (LGD6, 90%) from Ba2 (LGD4, 60%) following the closing of the leveraged buyout of the company by Bain Capital, Kohlberg Kravis Roberts & Co. and Merrill Lynch Global Private Equity.

The agency also affirmed the company's $2 billion asset-based revolving credit facility due 2012 at Ba2 (LGD2, 13%); $2 billion revolving credit facility due 2012, $2.75 billion term loan A due 2012 and $8.8 billion term loan B due 2013 at Ba3 (LGD3, 32%); $1.25 billion euro term loan due 2013 at Ba3 (LGD2, 23%); $4.2 billion second-lien notes and $1.5 billion second-lien payment-in-kind notes at B2 (LGD4, 57%); corporate family and probability of default rating at B2 and speculative grade liquidity rating at SGL-2.

The outlook is stable

The downgrade of the unsecured notes to Caa1 reflects the deep subordination of these instruments to a considerable amount of secured debt and the expectation of a considerable loss in value in a default scenario, Moody's said.

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