Drop us a line! We will reply during business hours.


The Municipal Market Data 30-year tax-exempt bond yield reached a new record low of 2.44% earlier this week, fueled by strong investor demand for safer assets and a dearth of supply as hospitals and other municipal borrowers refrain from taking on debt.

July 5, 2016 Update: The 30-year "AAA" G.O. MMD reached a record low of 1.94%.

It's official: the yield on the U.S. 30-year Municipal Market Data (MMD) triple-A G.O. index fell for the second stright day yesterday to reach 2.44%, beating its November 2012 record of 2.47%.


Demand for municipal bonds is up as domestic and foreign buyers move away from riskier asset classes and general market volatility, fanning the rally (bond prices move inversely with yield).

According to Lipper, municipal bond funds saw their 32nd straight week of inflows, adding up to $22.1 billion for this year.

When combined with compressed hospital credit spreads, this low MMD makes for the lowest all-in cost of debt anybody can remember in the healthcare bond markets.

Unlike what some had expected, this interest rate environment has not led to more supply. Tax-exempt bond supply is down 10% from last year.

Tax-exempt borrowers continue to avoid issuing "new money" bonds, preferring to pay down or refund existing debt.

Supply has also eroded due to bank placements which continue to siphon debt away from the public bond markets.

As a result of imbalance between buyers and sellers, municipal bond issues are being snapped up like hot cakes, with some offerings seven times oversubscribed.

It's hard to predict what will happen to rates, but once the presidential election is over, some speculate that borrowers will return to the municipal debt markets to fund much-needed infrastructure projects.

Compared to other municipal sectors, healthcare has had additional concerns to deal with, including the future of reform and government reimbursement, but given the favorable interest rate environment, more hospitals could return to the debt markets later this year with refundings and new money bonds.

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.

Frequently Asked Questions

Notify me of new articles

To be notified by email of all new articles and newsletter issues, please register.

I forgot my login info

Your email is your user ID. To reset your password, enter your email address here.

Do you provide speakers?

HFA professionals are available to speak at corporate functions, Board retreats, and other events. To find out more, email us.

Where is HFA based?

HFA is based in Tampa, Florida. We work with acute care providers across the entire U.S.

Other questions

Send us an email.

Linking & Reprints Policy

View our policy on linking to and reprinting content published by HFA Partners.

Privacy Policy

View our privacy policy.


Register to get notifications of new articles, issues of the Hospital Finance Update, and more credits to access cost report data and bond ratings. It's quick and it's free.

Contact Us

550 N. Reo Street
      Suite 300
      Tampa, FL 33609

(813) 347-9150