Community Health, Tenet Default Swaps Climb on Overbilling Suit
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Credit-default swaps on Community Health Systems Inc. and Tenet Healthcare Corp. soared after Tenet sued the hospital operator for allegedly overbilling Medicare.
Contracts protecting the debt of Franklin, Tennessee-based Community Health jumped 159.5 basis points to 612.6 basis points, according to data provider CMA. The contracts cost 4.5 percent upfront, meaning investors would pay $450,000 initially and $500,000 annually to protect $10 million of the company’s debt. Swaps on Tenet climbed 71.9 basis points to 529.2.