Moody's Investors Service upgraded Tenet Healthcare Corporation’s (NYSE:THC) Corporate Family Rating (CFR) from Ba3 to Ba2 and changed the outlook from positive to stable.
The agency also raised Tenet’s senior secured first‑lien notes to Ba2 (from Ba3) and its senior unsecured notes to B1 (from B2).
The upgrade reflects sustained deleveraging driven by strong EBITDA growth and substantial debt paydown over the last 24 months.
Moody's expects Tenet to continue growing revenue and EBITDA primarily through expansion of its ambulatory care business.
The rating agency anticipates disciplined financial policies, with share buybacks and distributions aligned to free cash flow, and expects Tenet to keep its debt‑to‑EBITDA ratio within 3.5x‑4.5x.
Tenet’s Ba2 rating reflects its significant scale, diversified business model, moderately high financial leverage, and very good liquidity.
In January 2026, Tenet and CommonSpirit Health (rated A3 Stable) agreed to an early termination of a revenue‑cycle‑management services contract; Tenet plans to offset the lost business by expanding these services with other customers.
As of 31 March 2026, Tenet held over $2.9 billion in cash and a $1.9 billion ABL revolver, both almost entirely available for use.
Moody's projects Tenet will generate more than $1.5 billion in annual free cash flow after distributions to non‑controlling interests.
The rating could be upgraded further if Tenet achieves additional cost‑saving benefits, improves profit margins, and sustains debt‑to‑EBITDA below 3.5x.
Conversely, the rating could be downgraded if the company experiences strategic missteps or if debt‑to‑EBITDA remains above 4.5x.
