Default-Defying Muni Rally Shows Dimon Departs From Whitney
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Sarah Bush Lincoln Health Center was set to borrow about $45 million for emergency-room and laboratory improvements in Mattoon, Illinois, when demand for tax-exempt debt began to dissolve late last year.
Investors, spooked by bank analyst Meredith Whitney’s prediction of “hundreds of billions of dollars” of municipal defaults in 2011, started fleeing the market in record numbers, sending interest rates soaring, according to Craig Sheagren, the hospital’s chief financial officer. As bond buyers ran, JPMorgan Chase & Co. and other underwriters stepped up with offers of loans, letting the institution bypass the public markets.