Fitch Ratings assigned its “BB-” rating to Ontario, Calif.-based Prime Healthcare Foundation’s proposed $123 million series 2017A and $127 million series 2017B.
The assignment was a result of PHF’s strong liquidity metrics relative to its debt burden and its experienced senior management team.
The outlook was revised to negative from stable, reflecting PHF’s unexpected decline in profitability and an increased debt burden.
https://www.beckershospitalreview.com/finance/chs-in-negotiations-to-extend-nearly-2b-in-debt.html
Franklin, Tenn.-based Community Health Systems is in talks with a group of bondholders led by Franklin Resources, an asset management company, to extend approximately $2 billion in bonds due in 2019, people familiar with the matter told the Wall Street Journal.
The company is in talks to swap the 2019 unsecured notes for debt secured by its assets, one person familiar with the matter told WSJ. This type of transaction would be difficult for CHS to complete, as the company can only issue about $1 billion in new secured debt without permission from its lenders to waive a covenant in its revolver loans.
Extending the debt due in 2019 is only a short-term solution because CHS faces billions of dollars in debt maturities from 2020 to 2023, according to the report.
CHS put a financial turnaround plan into place last year, which included selling 30 hospitals to reduce its heavy debt load. The company completed the divestiture plan earlier this month. With the help of proceeds from the hospital sales, CHS brought down its long-term debt load to $13.9 billion in the third quarter of this year, from $14.8 billion in the same period of 2016.
CHS ended the most recent quarter with a net loss of $110 million on revenues of $3.67 billion. That’s compared to the third quarter of 2016, when the company posted a net loss of $79 million on revenues of $4.38 billion.
Franklin, Tenn.-based Community Health Systems completed its 30-hospital divestiture plan Nov. 1. Now, the company expects to sell another group of its hospitals with combined revenue of $2 billion, Chairman and CEO Wayne Smith said during a third quarter earnings call.
To improve its finances and reduce its heavy debt load, CHS put a turnaround plan into place last year. As part of the initiative, the company announced in early 2017 that it intended to sell off 30 hospitals. In August, CHS extended its divestiture plan. The company said it would sell a group of hospitals with combined revenue of $1.5 billion in addition to the 30 hospitals already announced.
With the sales last week of Highlands Regional Medical Center in Sebring, Fla., and Merit Health Northwest Mississippi in Clarksdale, Mr. Smith said the 30 hospital divestitures are complete, and the company is once again expanding its divestiture plan.
“We are now pursuing sale transaction of hospitals accounting for at least $2 billion of net revenue, which has increased from $1.5 billion last quarter,” Mr. Smith said.
Mr. Smith said the company has signed several letters of intent for the hospitals in the next group of divestitures, accounting for more than $1.2 billion in net revenue.
“Our goal is to emerge from this process with a sustainable group of hospitals that are positioned for long-term success and growth,” he said.
With the help of proceeds from the hospital sales, CHS brought down its long-term debt load to $13.9 billion in the third quarter of this year, from $14.8 billion in the same period of 2016.
The company ended the most recent quarter with a net loss of $110 million on revenues of $3.67 billion. That’s compared to the third quarter of 2016, when the company posted a net loss of $79 million on revenues of $4.38 billion.
Community Health Systems, a 127-hospital chain based in Franklin, Tenn., posted a net loss of $110 million in the third quarter of 2017, compared to a net loss of $79 million in the same period of the year prior.
CHS said revenues dipped to $3.67 billion in the third quarter of this year, down from $4.38 billion in the same period of 2016. The decrease in revenue was attributable, in part, to lower patient volume. On a same-facility basis, admissions were down 14.8 percent in the third quarter of this year. When adjusted for outpatient activity, admissions decreased 15.5 percent year over year.
The company’s financials also took a $40 million hit from hurricanes Harvey and Irma in the three months ended Sept. 30. CHS said the hurricanes caused it to incur additional expenses and miss out on revenues.
Although CHS’ operating expenses declined in the third quarter, one-time charges took a toll on the company’s bottom line. CHS said its third quarter financial results included $33 million in impairment charges and losses related to the sale of some of its hospitals.
To improve its finances and reduce its heavy debt load, CHS put a turnaround plan into place in 2016. As part of the initiative, the company announced plans this year to sell off 30 hospitals. With the sale this week of Highlands Regional Medical Center in Sebring, Fla., and Merit Health Northwest Mississippi in Clarksdale, CHS Chairman and CEO Wayne T. Smith said Wednesday the 30 hospital divestitures are complete.
“Looking forward, we remain focused on strategic initiatives that we believe will yield positive results in the future,” said Mr. Smith. “Our goal is to emerge from this process with a sustainable group of hospitals that are positioned for long-term success and growth.”
CHS brought down its long-term debt load to $13.9 billion in the third quarter of this year, from $14.8 billion in the same period of 2016.
HENRY KOTULA 