Moody's Ratings has raised Tenet Healthcare Corporation's (NYSE:THC) Corporate Family Rating to Ba2 from Ba3 and revised the outlook to stable from positive, the ratings agency said. Alongside the CFR upgrade, Moody's also upgraded Tenet's senior secured first lien notes to Ba2 from Ba3 and its senior unsecured notes to B1 from B2.
The agency framed the upgrade as a response to Tenet's sustained deleveraging over the past 24 months, attributing the improvement to robust EBITDA growth and meaningful debt paydown during that period. Moody's said it expects the company to continue expanding revenue and EBITDA, largely through growth in its ambulatory care operations.
Moody's noted that the upgrade also incorporates an expectation that Tenet will adhere to disciplined financial policies. Specifically, the agency expects share repurchases and other distributions to be managed in line with free cash flow generation, and for the company to maintain a debt-to-EBITDA ratio in the 3.5 times to 4.5 times range.
In assessing the company's credit profile, Moody's described Tenet's Ba2 CFR as reflecting its sizable scale, good business diversity, moderately high financial leverage and very good liquidity. The agency referenced a contractual development in January 2026: Tenet and CommonSpirit Health (rated A3 with a stable outlook) agreed to end early a relationship under which a Tenet subsidiary provided revenue cycle management services to CommonSpirit.
Moody's acknowledged that Tenet plans to offset the lost revenue from that contract by growing its revenue cycle management services with other clients.
On liquidity, Tenet reported having over $2.9 billion in cash and an approximately $1.9 billion asset-based lending revolver that was almost entirely available as of March 31, 2026. Moody's also projected that Tenet will produce more than $1.5 billion in annual free cash flow after distributions to non-controlling interests.
The ratings agency outlined scenarios that could prompt further rating movement. An upgrade could follow if Tenet captures additional benefits from cost and operating initiatives, including higher profit margins, and sustains debt-to-EBITDA below 3.5 times. Conversely, a downgrade could arise if the company encounters setbacks in executing strategic initiatives or if debt-to-EBITDA remains above 4.5 times for a sustained period.