Research Update: Community Health Systems Inc. Downgraded To 'SD' From 'CCC+' On Senior Note Repurchase

Community Health Systems Inc. recently repurchased approximately $130 million in principal amount of its 6.875% senior notes due 2028 for approximately $98 million. In the context of our 'CCC+' issuer credit rating on Community Health and its continued high adjusted leverage, we view these repurchases on the senior notes due 2028 as a default under our criteria given that lenders received less value than they were initially promised under the original securities. Therefore, we lowered our issuer credit rating on Community Health to 'SD' (selective default) from 'CCC+'. We also lowered our issue-level rating on the affected senior notes to 'D' from 'CCC-'. Our issue-level ratings on the other obligations are unchanged. We expect to raise the rating back to

...- Community Health Systems Inc. recently repurchased approximately $130 million in principal amount of its 6.875% senior notes due 2028 for approximately $98 million. - In the context of our '###+' issuer credit rating on Community Health and its continued high adjusted leverage, we view these repurchases on the senior notes due 2028 as a default under our criteria given that lenders received less value than they were initially promised under the original securities. - Therefore, we lowered our issuer credit rating on Community Health to '##' (selective default) from '###+'. - We also lowered our issue-level rating on the affected senior notes to 'D' from '###-'. - Our issue-level ratings on the other obligations are unchanged. - We expect to raise the rating back to '###+' from '##' and assign a negative outlook over the next few business days....

Research Update