Fitch puts Tenet ratings on positive watch

Mon, 12/13/2010 - 11:45am
The Associated Press

Fitch Ratings on Monday placed Tenet Healthcare Corp.'s ratings on a watch for a positive review, citing a $3 billion buyout bid from fellow hospital operator Community Health Systems Inc.

The ratings apply to about $4.3 billion in outstanding debt, as of Sept. 30.

Currently, Fitch assigns a "B-," or highly speculative issuer default rating to the company, and "BB-," or speculative rating, to its secured bank facility and senior secured notes. It assigns a "B" to the company's senior unsecured notes.

On Thursday, Community Health took the buyout bid public. It sent a letter to Tenet's board last month offering $6 per share for the Dallas-based company, including $5 in cash and $1 in stock, which would represent a 40 percent premium to Tent's closing price Thursday. Tenet's board has rejected the offer.

A combined company would have about $22 billion in annual revenue and own or operate 176 hospitals in 30 states.

"Although the outcome of the situation and its ultimate impact on Tenet's capital structure is highly uncertain, Fitch believes there is the potential for the consolidated credit profile to be stronger than Tenet's standalone profile," Fitch said, in statement.


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