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HFA is the leading source for research and insights on the healthcare bond markets. Our articles are published in major publications including Modern Healthcare, HFMA Strategic Financial Planning and The Bond Buyer.
SEPTEMBER 10, 2017bond ratings
Fitch Ratings placed 12% of its hospital and health system bond ratings on "rating watch" in connection with the agency's announcement last week that it is revising its criteria for evaluating not-for-profit hospitals. The changes are relatively evenly distributed between neutral, negative and positive.
SEPTEMBER 6, 2017bond ratings
Fitch Ratings today proposed new rating criteria that will affect 15% of the approximately 280 not-for-profit hospitals and health systems the agency currently covers. Most hospitals will be hard-pressed to determine if the new criteria will result in a upgrade or a downgrade.
AUGUST 24, 2017regulatoryMSRBdisclosureSEC
The SEC crackdown on municipal continuing disclosure, once described by an issuer as a monumental waste of resources, has gone to the enforcement phase with two MCDC settlements so far this year. For the many muni borrowers who spent time and money self-reporting under the MCDC initiative, the two enforcement actions to date may be disappointing.
AUGUST 7, 2017marketsbank debtswaps
Last week, UK regulators announced the plan to abandon the controversial Libor benchmark by 2021, and a group within the Bank of England started working on potential replacements. Given how entrenched Libor is in the bank markets and in interest rate swaps, the transition is sure to cause hospitals some headaches.
AUGUST 2, 2017markets
After a slow start, hospital tax exempt bond issuance picked up in the second quarter of 2017, but still lags behind 2016 record volumes. In a reversal from last year, AA borrowers are conspicuously absent from the borrowing scene.
JUNE 17, 2017refundings
In the Summer 2017 edition of the HFMA Strategic Financial Planning newsletter, we offer a primer to cover the basic structures hospitals use to refund tax-exempt bonds and maximize savings, including various types of advance refunding before first call date.
JUNE 5, 2017bank debtregulatoryMSRBdisclosure
In response to market uproar, the Municipal Securities Rulemaking Board has revised its draft amendments to Rule G-34 and now proposes to exempt bank placements from registration. If adopted, the amendments would be a win for hospitals and other borrowers that rely on placements for a portion of their debt structure.
MAY 18, 2017markets
In the May 17 article "Fast Cash Handy for Those Hospital Fixer-Upper Projects", HFA Partners is asked by Modern Healthcare to discuss recent hospital bond issues and the state of the healthcare debt markets.
MAY 17, 2017regulatorySEC
Three years after its adoption, some not-for-profit hospitals are still unfamiliar with the SEC's Municipal Advisor Rule that restricts the information broker-dealers can discuss with them. Today we review the rule and its exceptions, and discuss the steps needed to take advantage of the IRMA exemption.
MAY 12, 2017marketscredit spreadsinterest rates
When planning debt issuance, hospitals and other borrowers try to anticipate the direction of interest rates, but they should also pay attention to credit spreads. In the last several years, spreads have not only declined but also compressed, which has cut borrowing costs and made rating upgrades less valuable.
APRIL 4, 2017bank debtregulatoryMSRBdisclosure
The Municipal Securities Rulemaking Board's latest attempt to regulate direct bank purchases and other private placements by requiring the same registration as public bond offerings, is getting a rare response from market participants: unanimous pushback.
MARCH 2, 2017bank debtregulatoryMSRBdisclosureSEC
The Securities and Exchange Commission is proposing to add certain financial obligations to the material events which municipal obligors must disclose under Rule 15c2-12. Although the SEC has yet to clarify what constitutes a financial obligation, its stated intent is to capture bank placements, where disclosure has been limited.
FEBRUARY 23, 2017markets
Hospitals staged a massive return to the debt markets in 2016 as public bond issuance jumped 87%, more than any other municipal sector. The increase affected all rating categories, including lower investment grade borrowers who had previously stayed on the sidelines.
FEBRUARY 2, 2017marketsbond ratings
Fitch Ratings reports that in 2016, the agency saw the highest number of public finance upgrades of the last 10 years, outnumbering downgrades more than 2:1. But in the not-for-profit hospital sector, the ratio of upgrades to downgrades was down from 2015 and continues to vary significantly between rating agencies.
JANUARY 4, 2017refundingsbank debt
Hospitals looking to pay off or refinance tax-exempt debt are finding out that while public offerings offer limited options, bank direct purchases and other forms of private placements are more conducive to early redemption. With an understanding of prepayment formulas and market practices, hospitals can reduce or even eliminate penalties and realize substantial cash savings along the way.
DECEMBER 14, 2016regulatorydisclosureSEC
Described by one issuer as a monumental waste of resources, the Municipalities Continuing Disclosure Cooperation initiative is about to get much less cooperative. SEC officials said they've ended settlements with underwriters and issuers that voluntarily disclosed, and the Commission is now shifting its focus to those that didn't.
DECEMBER 1, 2016marketscredit spreadsinterest ratestaxable debt
Tax-exempt rates have climbed steadily since July's historical lows, and the pace picked up after the presidential election. Some hospitals had to put refundings on hold, but others are speeding up plans to issue new money debt, and with the MMD now higher than Treasuries, taxable debt is looking more attractive.
OCTOBER 24, 2016markets
Fueled by low interest rates and a flurry of refundings, hospitals returned to the municipal public debt markets en masse this year, ending the drought and setting the stage for new issuance records. Bond underwriters couldn't be happier.
OCTOBER 13, 2016bank debtregulatoryMSRBdisclosure
The MSRB is pushing hard for more regulation of bank placements, but so far the SEC has not shown much interest and is not providing guidance on how unregulated loans could become regulated securities. It remains to be seen if the MSRB's latest move asking borrowers to voluntary disclose loans on EMMA will be more successful.
SEPTEMBER 26, 2016marketsinterest rates
The Fed held rates unchanged at last week's FOMC meeting, noting economic growth was not quite there yet, but left the door open to a hike later this year. Fed watchers are debating what to expect for the next three months and for 2017, and predictive tools diverge on what the Fed will do.
SEPTEMBER 8, 2016regulatorydisclosureSEC
The SEC recently announced settlements with 71 municipal issuers for continuing disclosure violations uncovered by the agency's MCDC initiative launched in 2014. Four healthcare providers were on the list and more are expected in the coming months.
AUGUST 14, 2016marketsinterest rates
Would your organization issue bonds due in a hundred years? That's what New York and Presbyterian Hospital and Cleveland Clinic did in the last 24 months. Locking in interest rates for the next century may be tempting to some, but ultra-long bonds could prove costly if called.
JULY 7, 2016marketsinterest rates
The MMD 30-year tax-exempt yield reached a new low of 1.93% on Wednesday as foreign investors chase yield and safety and the Fed weighs in on the Brexit fallout. Hospitals planning to sell bonds in the next year or two should understand the various options available for locking in today's rates.
JULY 6, 2016interest ratesunderwriting
Current municipal market rules do not require underwriters to disclose markups on bonds traded in the secondary market, but savvy hospitals can now go on EMMA to review trades and determine if their bonds priced on market, or if they left money on the table.
JUNE 24, 2016bond ratings
Since the Great Recession, not-for-profit hospitals have hoarded cash as evidenced by improving rating agency liquidity ratios. Faced with a growing list of capital projects and mediocre investment returns, CFOs are now wondering how much cash to keep on hand.

This material is intended for general information purposes only and does not constitute legal advice. For legal issues that arise, readers should consult legal counsel. Linking & reprinting policy. To discuss this article or HFA Partners' municipal advisory services, email or call 888-699-4830. © 2009-2017 HFA Partners, LLC. www.hfapartners.com.

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