“The stable outlook reflects our expectation that [CHS] will maintain strong margins while integrating recently acquired facilities and investing in ongoing capital projects,” said Dean Diaz, a senior credit officer at Moody’s, in the release.
Overall, CHS’ corporate family rating from Moody’s remains at B1, and all of its senior secured term loans and revolving credit facilities have Baa3 ratings. CHS has been active acquiring hospitals in the past several years, and Moody’s said CHS could receive a ratings upgrade if it is able to “achieve and sustain adjusted debt to EBITDA below 4.0 times.”
Moody’s noted, however, that CHS does have a significant amount of debt and is involved in various investigations and litigation. While those concerns are present, Moody’s does not expect a downgrade to happen, especially if CHS can manage its cash flow coverage of debt. “While exposure to ongoing investigations remains a risk, we do not expect it to detrimentally affect [CHS’] very good liquidity position in the near term,” Mr. Diaz said.
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