Moody's rates CHS/Community Health notes B3

Moody's Investors Service said it assigned a B3 (LGD 5, 85%) rating to CHS/Community Health Systems, Inc.'s proposed offering of $750 million of senior unsecured notes due 2019.

The proceeds of the offering, which is an add-on to notes issued in November 2011, will be used to refinance a portion of the remaining 8 7/8% senior unsecured notes due 2015.

The company's B1 corporate family and probability of default ratings are unchanged, along with its speculative-grade liquidity rating of SGL-1.

The proposed issuance will continue to extend the company's maturity profile and is not expected to meaningfully affect leverage, Moody's said.

The outlook remains negative.

The ratings unchanged also include the Ba3 (LGD 3, 32%) ratings on its senior secured revolving credit facility due 2016, senior secured term loan A due 2016, senior secured term loan B due 2014 and senior secured term loan B due 2017.

The company's B3 (LGD 5, 85%) ratings on its 8 7/8% senior notes due 2015 and 8% senior notes due 2019 also remain unchanged.

The ratings reflect an expectation that leverage will remain high and interest expense coverage will continue to be modest, Moody's said.

The agency said it anticipates that the opportunity to reduce leverage with free cash flow will be constrained in the near term given the company's expected investment in capital spending.

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