Community Health Systems Inc. has completed its new debt offerings to exchange unsecured notes due 2022 for new senior secured notes due 2027 and new unsecured notes due 2028. We view the exchange as a distressed transaction due to high debt levels, the company's debt maturity schedule, and the extended maturity that investors are receiving on the new unsecured notes. We are lowering the issuer credit rating on Community Health Systems to 'SD' from 'CC'. We are lowering the issue-level ratings on its 6.875% notes due 2022 to 'D' from 'CC', reflecting our view that the exchange transaction constitutes a default. The downgrade follows Community's exchange of the $2.632 billion outstanding on the 6.875% notes due 2022 for $700 million
