Community Health Systems Inc. Upgraded To #CCC+# From #SD#, Outlook New Debt Rated

Stocks and Financial Services Press Releases Friday June 29, 2018 10:42
NEW YORK--29 Jun--S&P Global Ratings

NEW YORK (S&P Global Ratings) June 28, 2018--S&P Global Ratings today raised its corporate credit rating on Franklin, Tenn.-based hospital operator Community Health Systems Inc. to 'CCC+' from 'SD' (selective default). The outlook is negative.

At the same time, we assigned our 'CCC-' issue-level rating and '6' recovery rating to the company's new $1.77 billion junior-lien priority notes due 2023 and $1.35 billion junior-lien priority notes due 2024. The '6' recovery rating indicates our expectation for negligible (0%-10%; rounded estimate: 0%) recovery of principal in the event of a payment default.

We also assigned our 'B-' issue-level ratings and '2' recovery rating to the company's proposed $1 billion senior secured bond. The '2' recovery rating indicates our expectation for substantial (70%-90%; rounded estimate: 80%) recovery of principal in the event of a payment default.

Our issue-level rating on the company's existing senior secured debt remains 'B-' with a recovery rating of '2' (the same as the rating on the proposed senior secured bond. Our issue-level rating on the company's existing unsecured notes remains 'CCC-' with a recovery rating of '6', indicating our expectation for negligible (0%-10%, rounded: 0%) recovery in the event of payment default.

The upgrade of Community to 'CCC+' reflects the company's longer-dated debt maturity schedule, and our view that its efforts to rationalize its hospital portfolio as well as improve financial performance and cash flow should strengthen credit measures over the next 12 to 18 months. Based on our current expectation that the company will successfully refinance its term loan G through the proposed secured note issuance, we believe near-term refinancing risk is alleviated. However, we see risk to our current expectation of significant improvement in operating performance, and believe Community could face covenant pressures that lead to constrained liquidity if the company is unable to strengthen EBITDA.

The negative rating outlook reflects risks to our current base-case expectations that Community can improve its operations such that cash flow is about breakeven and the company can maintain modest cushions on its financial covenants, as well as the risk of a near-term restructuring if the pending refinancing of term loan G is not successful.

Latest Press Release

KTC achieves major milestone with a net profit of 3.911 billion Baht in Q3,with preparations in motion to diversity into Nano and Pico Finances.

KTC declares a net profit for the end of Q3 of 3.911 billion Baht. Profits have grown 65 percent due to a surge in credit card spendings, receivables from credit cards and personal loans, along with the upholding of approval standards within appropriate...

Photo Release: KBank and AIS support hospitals to make transition toward the Healthcare 4.0 era

Recently, at KBank Phahon Yothin Building, Mr. Wirawat Panthawangkul (right), KBank Senior Executive Vice President, and Mr. Yongsit Rojsrikul, Chief Enterprise Business Officer, Advanced Wireless Network Company Limited of AIS Group, signed a memorandum...

AEON partners with JCB to launch AEON J-Premier Platinum Credit Card to offer exclusive privileges throughout Thailand and Japan

AEON Thana Sinsap (Thailand) Public Company Limited partners with JCB International (Thailand) Co., Ltd. to launch "AEON J-Premier Platinum Credit Card" that will allow Thais to enjoy everything Japan, with exclusive privileges and offers in dining,...

China and Europe post double digit increases in RD spending

- China and Europe increase R&D spending the most as global R&D investment reaches US$782bn - 88 companies outperform industry peers on sustained financial success with modest R&D spend - Amazon retains top spot as world's largest corporate...

Photo Release: EXIM Thailand Hosts 6th Council of Specialized Financial Institutions Meeting in 2018

Mr. Pisit Serewiwattana (forth right), President of Export-Import Bank of Thailand (EXIM Thailand), welcomed Mr. Pornchai Triraveja (fifth right), Fiscal Policy Advisor of Fiscal Policy Office (FPO), and Mr. Chatchai Sirilai (fifth left), President of...

Related Topics