November 15, 2012 / 5:31 PM / in 5 years

TEXT-S&P: Community Health Service ratings unaffected by amendment

Nov 15 - Standard & Poor's Ratings Services said today that its ratings on
U.S. hospital operator Community Health Systems Inc. (B+/Stable/--) are
unaffected by the company's proposed bank amendment that would revise its debt
covenants. Most notably, the company is seeking to prevent the stepdown in its
leverage covenant to 5x from 5.5x on Dec. 31, 2013. The amendment would replace
that stepdown with a stepdown to 5.25x on Jan. 1, 2015, remaining at that level
for the life of the facility. In our view, the avoidance of this near-term
stepdown adds to our confidence that Community's cushion on this covenant will
remain over 15%, supporting our "adequate" liquidity profile (based on our

The rating on Community is based on our assessment of the company's business 
risk profile as "fair," reflecting its relatively diversified hospital 
portfolio as well as its significant reimbursement risk. We consider the 
financial risk profile as "highly leveraged," reflecting leverage above 5x and 
funds from operations to lease-adjusted debt at a stable level near 14%. 
Community owns and operates acute care hospitals.
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