Tenet Healthcare Corp., Santa Barbara, Calif., said it has reached a new agreement with bank lenders easing restrictions on the company but also cutting its available credit to $800 million from $1.2 billion. The reduction in Tenet's available funded loans and letters of credit is similar to what was predicted by Jeff Villwock, an adviser to Tenet critic and shareholder M. Lee Pearce, after the company's restructuring was announced in January. Some Tenet operating subsidiaries had to guarantee the parent company's obligations, and the capital stock of some subsidiaries was pledged to secure the available credit. In return, the banks allowed Tenet more flexibility in two financial measures, the leverage and fixed-charge ratios. Without the more flexible terms, Tenet said it expected to break the ratio levels in the second or third quarter. Tenet said it has no loans and $215 million in letters of credit against the $800 million bank line. The company owns or operates 100 hospitals but plans to divest 31. -- by Vince Galloro
Tenet swaps higher credit line for easier terms
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