Category Archives: Debt Refinancing

Debt default risk for hospitals drops from 2020 high

Posted on by • Posted in Bond Default Risk, Debt Default, Debt Levels, Debt Refinancing, Debt Restructuring, Economic Stimulus, Financial Ratios, Financial Viability, Financially Distressed, Health System, Hospital, Hospital Industry, Liquidity • Leave a comment
https://www.beckershospitalreview.com/finance/debt-default-risk-for-hospitals-drops-from-2020-high.html?origin=CFOE&utm_source=CFOE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G
UAE firms face default risk as customers delay payments | Business Insurance

The likelihood that U.S. hospitals will default on debt within the next year fell significantly since the 2020 peak amid the early days of the pandemic, according to a March 10 report from S&P Global Market Intelligence. 

In 2020, the median default odds jumped to 8.1 percent. However, as of March 8, the probability of default rate fell to 0.9 percent. 

Samuel Maizel, a partner from law firm Dentons, told S&P Global that many hospitals operate on razor-thin margins, and they are seeing less cash flow amid the pandemic as patients shy away from receiving care, but stimulus funds should help avert a tidal wave of hospital bankruptcies in the next year.

“They’re sitting on a lot of cash, which gives them a cushion, even though they’re continuing to lose money,” Mr. Maizel told S&P Global. 

S&P said that as stimulus funds dry up other pressures may challenge healthcare facilities.

Trinity Health may issue $1.7 billion in debt

Posted on by • Posted in Debt Refinancing, Health System, Hospital Industry, Tax Exempt Debt, Taxable Bonds • Leave a comment

https://www.modernhealthcare.com/finance/trinity-health-may-issue-17-billion-debt?utm_source=modern-healthcare-daily-dose-tuesday&utm_medium=email&utm_campaign=20190924&utm_content=article3-readmore

Image result for mountain of money

Trinity Health, based in Livonia, Mich., is considering the refinancing of $1.7 billion in debt, with $1.4 billion of that amount likely to take the form of taxable bonds.

The debt under consideration for refinancing represents about 22% of the system’s $6.3 billion in total long-term debt.

The remaining $300 million in debt may or may not be issued as a tax-exempt security, but would be issued to cover the cost of the acquisition, construction, renovation and equipping of new and existing Trinity Health facilities or the refinancing of such expenditures, according to a municipal bond filing.

Not-for-profit hospitals typically borrow in the tax-exempt market but because of new refunding restrictions or depending on market conditions, they may elect to borrow in what is typically a higher cost environment.

In February, Trinity issued $383 million worth of tax-exempt fixed-rate hospital revenue with $78.9 million of that used for refunding of bonds. During the first nine months of fiscal 2019, which ended March 31, Trinity reported $14.3 billion in operating revenue and profit of $457.9 million, according to Modern Healthcare’s financial database.

Earlier this month, Trinity and an anesthesia group reached a settlement following a contract dispute, reported Crain’s Detroit Business.

In August, the system named Cassandra Willis-Abner as senior vice president of diversity and inclusion and chief experience officer; Marcus Shipley as Trinity’s chief information officer and senior vice president of innovation; and Dr. Mouhanad Hammami its senior vice president of safety net transformation, community benefit, and community health and well-being.