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Community Health Completes Tender Offer for Senior Notes
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Community Health Systems, Inc. (CYH - Free Report) recently announced the completion of the previously announced cash tender offer for its outstanding 5.125% Senior Secured Notes, due 2018.
Community Health’s balance sheet is highly leveraged. Based on its current divestiture plan and debt, management expects senior secured net leverage ratio at the end of 2017 to be approximately 3.2 times the previous year.
In spite of the company’s efforts to repay debt through several divestures, its debt level remains high. This results in higher interest expenses, in turn, weakening shareholders’ confidence on the stock. In the last one year, Community Health’s stock has lost 52.3%, whereas the Medical-Hospitals industry has gained 19.6%.
Management intends to use the net proceeds from this offering to repay $1.445 billion aggregate principal amount of term loans outstanding as well as pay-related fees and expenses. The remainder will be utilized for general corporate purposes.
However, the company has been taking up corrective measures to manage its high debt level, as reflected in its 2016 results. Management reduced its long-term debt by 11% to $14.8 billion in 2016. The metric is now expected to go down 13% to $12.9 million at the end of 2017.
Zacks Rank and Stocks to Consider
Community Health carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the medical sector include UnitedHealth Group, Inc. (UNH - Free Report) , Inogen Inc. (INGN - Free Report) and Infinity Pharmaceuticals, Inc. . While Inogen and Infinity sport a Zacks Rank #1 (Strong Buy), UnitedHealth holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Inogen posted positive surprises in three of the last four quarters with an average positive surprise of 49.08%.
Infinity delivered positive surprises in the trailing four quarters with an average beat of 28.38%.
UnitedHealth delivered positive surprises in last four quarters with an average beat of 3.80%.
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Community Health Completes Tender Offer for Senior Notes
Community Health Systems, Inc. (CYH - Free Report) recently announced the completion of the previously announced cash tender offer for its outstanding 5.125% Senior Secured Notes, due 2018.
Community Health’s balance sheet is highly leveraged. Based on its current divestiture plan and debt, management expects senior secured net leverage ratio at the end of 2017 to be approximately 3.2 times the previous year.
In spite of the company’s efforts to repay debt through several divestures, its debt level remains high. This results in higher interest expenses, in turn, weakening shareholders’ confidence on the stock. In the last one year, Community Health’s stock has lost 52.3%, whereas the Medical-Hospitals industry has gained 19.6%.
Management intends to use the net proceeds from this offering to repay $1.445 billion aggregate principal amount of term loans outstanding as well as pay-related fees and expenses. The remainder will be utilized for general corporate purposes.
However, the company has been taking up corrective measures to manage its high debt level, as reflected in its 2016 results. Management reduced its long-term debt by 11% to $14.8 billion in 2016. The metric is now expected to go down 13% to $12.9 million at the end of 2017.
Zacks Rank and Stocks to Consider
Community Health carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the medical sector include UnitedHealth Group, Inc. (UNH - Free Report) , Inogen Inc. (INGN - Free Report) and Infinity Pharmaceuticals, Inc. . While Inogen and Infinity sport a Zacks Rank #1 (Strong Buy), UnitedHealth holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Inogen posted positive surprises in three of the last four quarters with an average positive surprise of 49.08%.
Infinity delivered positive surprises in the trailing four quarters with an average beat of 28.38%.
UnitedHealth delivered positive surprises in last four quarters with an average beat of 3.80%.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>