...Favorable Operating Profile: Tenet is among the largest for-profit operators of acute care hospitals in the U.S. and, following the acquisition of a majority ownership interest in United Surgical Partners International (USPI) in 2015, the largest operator of ambulatory surgery and imaging centers. Scale is increasingly important as U.S. healthcare providers seek efficiencies to offset the effects of an overall constrained reimbursement environment. Lengthy Deleveraging Horizon: Debt funding of the USPI transaction has prolonged the deleveraging horizon Fitch Ratings had considered following Tenet's 2013 acquisition of Vanguard Health Systems, Inc. (Vanguard). Deleveraging has been slow since it relies primarily on EBITDA growth. Tenet's weak FCF limits the company's ability to repay debt; about $1 billion in cash proceeds from recent asset sales does provide a debt reduction opportunity and the capital structure includes some high coupon callable notes. FCF Weak But Improving: Improved...
