Fitch Ratings has assigned a 'B+' rating to Community Health Systems, Inc.'s (Community) planned $250 million senior subordinated notes issue. Fitch has also affirmed Community's 'BB' rated, $1.625 billion secured credit facility and 'B+' rated convertible subordinated notes due 2008. The Rating Outlook is Stable.

Proceeds from the issue are expected to term-out borrowings under the company's $425 million revolving bank facility which were drawn down to fund Community's recent share repurchase. At the time the share repurchase was announced, Fitch affirmed Community's ratings and noted that while the increase in borrowing was rather large, Community's credit profile had been trending positively. Industry issues such as bad debt have taken their toll on Community's margins but the company has fared better than its peers in this regard and pricing remains fairly strong (especially for rural providers like Community). Despite the increase in debt, leverage and coverage remain appropriate for the category. Fitch anticipates that at year-end 2004 leverage will be between 3.5 times (x) and 3.7x and coverage will be between 6.0x and 6.2x. Fitch does expect Community to remain fairly aggressive with regards to acquisitions, however, the level of activity is dependent on the pipeline and current multiples.