Aug. 12 at 12:37 AM
S&P Global Ratings revised its outlook on Universal Health Services to positive from stable and affirmed its ‘BB+’ issuer credit rating. It also assigned a ‘BBB-’ issue rating and ‘2’ recovery rating to the company’s proposed senior notes, implying substantial 70%-90% recovery in a default.
The positive outlook reflects potential for an upgrade if UHS maintains leverage at 2.0x-3.0x and healthcare policy risks remain contained. Proceeds from the notes will refinance
$700 million of debt due in September 2026 and fund part of its
$835 million acquisition of Talkspace, with the remaining purchase price financed through a recently issued
$400 million delayed-draw term loan.
S&P expects UHS revenue growth to slow from 9.7% in 2025, forecasting 7%-7.5% growth in 2026 and 6%-6.5% in 2027. Adjusted EBITDA margins are expected to fall about 60 bps to 15.5% in 2026, while adjusted free operating cash flow to debt should improve to 17.7% from 16.7%.
$UHS