Against all expectations, bank placements continue to overshadow public bond offerings as financing vehicle of choice for many not-for-profit hospitals and health systems. Placements showed no signs of slowing down in 2013 as banks aggressively pursued borrowers across the entire credit spectrum.
With only 3 months to go, 2013 is looking positively sluggish for healthcare bond issuance. This may be bad news for bond underwriters, but low volumes make for favorable market conditions for hospitals with debt offerings in the works.
HFA Partners has introduced a unique formula which tracks the cost of hospital tax-exempt bonds by taking into account all maturities within each bond issue, not just the long bond. The formula promises improved accuracy when evaluating bond underwriter performance and comparing funding options.
Always wondered how large the bond markets really are but were afraid to ask? Here is some trivia we compiled on municipal and healthcare debt markets to help you shine at your next finance committee or cocktail party. In a nutshell, bond markets are big. Really big.
The Municipal Securities Rulemaking Board’s EMMA website has launched a new tool to help calendar-challenged borrowers keep up with annual and quarterly disclosure requirements. Although intended to improve disclosure, the new service may face a court battle with DAC, a private service provider with patents on similar functionality.
Interest rates jumped on June 19 after the Fed announced the possibility of tapering current bond purchases. A number of hospital refundings were postponed, but borrowers with offerings in the works ought to stay the course and see if economic news releases over the next few weeks can lead to another adjustment, this time in their favor.
The fees underwriters charge hospitals to access the bond markets have plunged in the last few years. With basic market data and an understanding of how fees are set, CFOs are in ideal position to negotiate and save on their costs of issuance.
Hospitals who were out of the public debt markets for the last year are learning that expanded federal securities laws now require bond underwriters to disclose their allegiances to borrowers. The new disclosures may surprise hospitals who came to rely on underwriters for financial advice.