The speculative-grade rating on Franklin, Tenn.-based Community Health Systems Inc. reflects its significant debt leverage as a result of its July 2007 debt-financed acquisition of Triad Hospitals Inc., and industry challenges that the company faces, such as uncertain third-party reimbursement, significant bad debt expense, and relatively weak industry patient volume trends. We expect these factors to continue to strain its highly leveraged financial risk profile. The company's diversified hospital portfolio, good local market positions, and management's experience operating a large hospital portfolio does not mitigate these risks, but does lessen downside business risk when compared to peer companies with a more concentrated portfolio. Community's hospital portfolio of 116 hospitals is down from a peak of 131 hospitals when the company
