Moody's rates Tenet's proposed senior secured notes; outlook negative

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Moody's Investors Services has assigned a "Ba2" rating to Dallas-based Tenet Healthcare's offering of $500 million of floating rate senior secured notes due 2020 and a "B3" rating to its proposed $1.9 billion of senior unsecured notes due 2023.

The proceeds from the debt offering will be used to fund the for-profit hospital operator's share of the equity contribution to the previously announced joint venture with Welsh, Carson, Anderson & Stowe, to refinance approximately $1.5 billion of existing indebtedness at United Surgical Partners International, to fund the acquisition of U.K. hospital operator Aspen Healthcare, and to pay related transaction fees and expenses, according to Moody's.

Moody's made no change to Tenet's existing ratings, including its "B1" Corporate Family Rating and "B1-PD" Probability of Default Rating.

Moody's also maintained Tenet's negative outlook, which reflects the rating agency's view that "Tenet has very little cushion to absorb negative developments or additional debt funded acquisition, share repurchases or shareholder distributions at the current rating level given its high financial leverage."

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