Community Health Systems, Inc. (NYSE: CYH) completed a partial redemption of $222.5 million in principal of its 10.875% Senior Secured Notes due 2032 on February 2 2026, reducing the outstanding principal balance on the 2032 notes to $1.78 billion.
The redemption brings the company’s debt‑to‑EBITDA ratio closer to its target range. As of September 30 2025, the ratio stood at 8.73, down from 7.1× at the end of Q1 2025 and 7.4× at year‑end 2024. By lowering the debt load, the company is moving toward a more sustainable leverage profile that supports future growth initiatives.
The transaction is part of CHS’s broader deleveraging strategy, which includes pruning its hospital portfolio to focus on core markets and reduce operating costs. Management cited regulatory and volume headwinds—such as tightening reimbursement rates and fluctuating patient volumes—as key drivers for strengthening the balance sheet. Recent divestitures, including three Pennsylvania hospitals and an Alabama facility, have already generated over $1 billion in proceeds, further supporting the debt‑reduction plan.
The freed‑up cash will be deployed in a mix of capital expenditures, working capital needs, and additional debt reduction. Management emphasized that the company will prioritize projects that enhance operational efficiency and support long‑term profitability, while maintaining flexibility to respond to market conditions.
CEO Kevin Hammons highlighted the company’s progress, noting that leverage was 6.7× as of September 30 2025, down from 7.4× on December 31 2024. He added that CHS had generated positive adjusted free cash flow on a 12‑month basis for the first time since the second quarter of 2022, underscoring the effectiveness of the deleveraging and portfolio optimization efforts.
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