Fitch gives Tenet notes B+

Fitch has assigned a B+/RR3 rating to the first-lien senior secured notes issued by Tenet Healthcare Corp. (B/Stable). Fitch expects the newly issued notes will refinance second-lien secured notes.

Tenet’s ratings and stable outlook reflect the issuers solid competitive position as a healthcare provider and the relative durability of its operational and financial results amid the pandemic, offset in part by persistently high debt leverage.

Fitch expects leverage will remain in line with the B ratings through the rating horizon, but notes the potential for further improvement depending on Tenet’s capital allocation priorities, including its potential Conifer segment spin-off.

Fitch expects gross leverage (after adjusting for cash distributions to non-controlling interests and the repayment of $478 million of senior unsecured notes) will sustain around 6x through the rating horizon, which is generally consistent with Tenet's public comments of targeting less than 5x on a net basis before non-controlling interests for 2021.

The affirmation and stable outlook reflect that gross leverage has remained high relative to peers despite the aforementioned improvements. Gross debt has remained steady with $15.4 billion currently outstanding pro forma for the recent debt repayment as compared to $15.5 billion at Dec. 31, 2016. Fitch-calculated leverage will improve by about 1x from around 7x towards 6x.

© 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.