Community Health Systems, Inc. (NYSE: CYH) completed the redemption of $13.749 million of its 5.625% Senior Secured Notes due 2027 and $222.5 million of its 10.875% Senior Secured Notes due 2032 on December 15, 2025.
The redemption lowered the company’s outstanding 2032 senior secured debt to $2.0025 billion, bringing the net‑debt‑to‑EBITDA ratio down from 7.6× at the end of Q3 2025 to 6.7×, a move that improves interest coverage and frees cash flow for operations and future portfolio pruning.
The proceeds that funded the redemption came from a series of asset sales that have generated more than $1.5 billion in cash, including the sale of select ambulatory outreach laboratory services to Labcorp for roughly $194 million and an 80 % stake in Tennova Healthcare‑Clarksville for $600 million.
CEO Kevin Hammons said the company is focused on "long‑term sustainability and reducing our debt leverage and getting our balance sheet on more solid footing," underscoring the strategic intent behind the debt‑reduction program and the confidence in the company’s cash‑generating ability.
The market reaction to the redemption was muted, with a slight negative shift that reflected ongoing concerns about the company’s high leverage and the challenging reimbursement environment, despite the positive step toward deleveraging.
The redemption is part of a broader strategy that includes refinancing $1.7 billion of 2027 notes in August 2025 and issuing $1.8 billion of new 2034 notes, as well as continued divestitures aimed at generating cash to support a target net‑debt‑to‑EBITDA ratio below 5.5×. The move signals management’s commitment to strengthening the balance sheet while maintaining operational flexibility in a sector facing inflationary and regulatory pressures.
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