West Penn Allegheny Looming Default No Bellwether: Muni Credit
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The $100 billion market for high-yield municipal debt is rallying the most in three years in the face of the potential bankruptcy of the biggest tax-exempt junk issue since at least 1990.
West Penn Allegheny Health System, a hospital group in Pittsburgh with $726 million of debt below investment grade, is struggling with deepening losses and falling revenue. There is “a high likelihood” the provider will seek bankruptcy protection or restructure its bonds, even as it discusses affiliating with one of the nation’s 10 biggest health-insurance companies, Moody’s Investors Service said last week.