Standard & Poor's downgraded the debt of Tenet Healthcare Corp., Santa Barbara, Calif., to a speculative BB rating from BBB- and said its outlook on the company remains negative. Tenet had about $4.1 billion in debt outstanding as of March 1. Moody's Investors Service announced a similar downgrade for Tenet last month, after the hospital company said revenue and profits would be lower for the 12 months ended June 30, 2004. Tenet said its new policy reducing Medicare outlier payments and tougher bargaining from managed-care organizations are behind the lower revenue projection. S&P cited "weaker profitability and cash flow expectations" and uncertainty generated by multiple federal probes of the company. Earlier this week, Tenet said the Securities and Exchange Commission had intensified its inquiry into a formal investigation of the company's outlier payments. -- by Vince Galloro
S&P follows Moody's in downgrading Tenet debt
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