Tenet Healthcare Debt Rating Lowered to ‘Junk’ Status
Moody's Investors Service on Wednesday lowered Santa Barbara-based Tenet Healthcare's debt rating to "junk" status following the hospital chain's announcement that it would lower profit forecasts for the third time since November, the Reuters/Orange County Register reports (Reuters/Orange County Register, 6/26). Tenet on Monday announced that profits for the second-quarter and full-year would be lower than forecast (Bloomberg /Los Angeles Times). After the announcement, Moody's moved Tenet from "Baa3," its lowest investment-grade rating, to "Ba3," its third-highest junk rating, lower than the previous Ba3 rating. In a statement, Moody's said it was concerned that "unanticipated revenue and expense pressures will contribute to dramatically lower-than-expected cash flow, essentially eliminating Tenet's free cash flow," adding that it might further lower Tenet's rating. Tenet spokesperson Steven Campanini said the move to junk status would not cause covenant changes in either its public debt or its undrawn $1.5 billion revolving credit facility (Reuters/Orange County Register, 6/26).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.