Hospital Debt Proves Worst Casualty in Sick Market: Muni Credit
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Bonds sold by hospitals are turning into the biggest losers in the municipal market as a delay in a provision of President Barack Obama’s health-care overhaul converges with near-record withdrawals from high-yield funds.
Hospital and health-care debt has lost 3.8 percent this month, making it the market’s weakest segment, Standard & Poor’s data show. The slide marks a reversal, after the bonds beat all local borrowings in the first four months of 2013. The debt is being punished by diminished demand for high-yield munis, which have dropped 4.6 percent in July. Almost half of stand-alone hospitals are rated junk or within three levels of it, according to S&P.