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H2C INDUSTRY INSIGHTS: CAPITAL MARKETS

Bond Issuance & Volume

Week of May 1, 2023

Primary Market Activity: Healthcare

Commentary – Monthly Deal Activity

Not-For-Profit Hospital Issuance • ($ in billions)

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  • Total municipal bond issuance was $30.6 billion in April, a 6% decrease  compared to March and a 24% decrease YoY (1).

  • Not-for-profit hospital issuance increased by 285% MoM compared to March with $2.6 billion issued in April. 

  • Large taxable issuances from UPMC, SSM Health and Providence St. Joseph Health drove the highest monthly volume YTD. However, April’s $2.6 billion is 58% less than April 2022 and 37% less than April 2021. 

  • UPMC came to market with over $1.6 billion of issuance including an $800.0 million corporate taxable, structured as 10- and 20-year bullets. In addition, UPMC came to market with $571.3 million of tax-exempt fixed rate bonds and $250.0 million of tax-exempt index floaters.$250.0 million of tax-exempt index floaters.

Source: Bloomberg LP

  1. Source: The Bond Buyer as of April 28, 2023.

  2. SSM Health’s Series 2023A bonds have a mandatory tender on June 1, 2028. Yield is priced to optional redemption date of December 1, 2027. 

  3. SSM Health’s Series 2023B variable rate bonds and UPMC’s Series 2023 D-1 and D-2 index floaters reset weekly and contain no external credit or liquidity support. 

  4. Series 2019C Remarketing; bonds were converted from a FRN Rate Period to an Adjustable Long Term Rate Period beginning May 1, 2023. The Bonds have a Mandatory Tender Date on May 1, 2028. 

  5. Spreads as of the date of sale. Tax-exempt bonds are spread to the corresponding AAA MMD benchmark maturity published by TM3. 

Primary Market Activity: Higher Education

Commentary – Monthly Deal Activity

Higher Education Issuance • ($ in billions)

  • Total municipal bond issuance was $30.6 billion in April, a 6% decrease  compared to March and a 24% decrease YoY (1).

  • Higher education issuance of $1.3 billion in April is a 18% increase MoM compared to March. Issuance is primarily fixed-rate (75% fixed, 25% variable) and tax-exempt (75% tax-exempt, 25% taxable). 

  • The Ohio State University came to market with $328.8 million of Variable Rate Demand Bonds, the largest issuance in April. The bonds were issued in two equal tranches, with Barclays and Wells Fargo serving as bookrunners. No external liquidity or credit support. 

  • Georgetown University issued a $300.0 million corporate taxable bond. The bond proceeds will be used to finance certain student housing projects, refund certain existing indebtedness, and terminate certain interest rate swaps (2).

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Source: Bloomberg LP

Competitive Sale

Green Bonds

  1. Source: The Bond Buyer as of April 28, 2023.

  2. Source: Georgetown University Series 2023 Official Memorandum. 

  3. Spreads as of the date of sale. Tax-exempt bonds are spread to the corresponding AAA MMD benchmark maturity published by TM3. Taxable bonds are spread to the 30-year US Treasury unless otherwise noted.

Key Rate Updates

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Source: U.S. Department of the Treasury, Bond Buyer, Investment Company Institute, Bloomberg and Refinitiv/TM3 Data as of April 28, 2023.


(1)   Weekly SIFMA and SIFMA/1M-LIBOR as of April 26, 2023

The information presented herein was obtained from resources believed to be reliable and accurate, but H2C Securities Inc. does not guarantee the accuracy or completeness or assume a responsibility for any loss which may result from the action by any person upon such information. Such information is subject to change without notice and is not intended as a recommendation, offer, or solicitation with the respect to the purchase or sale of any security.

About H2C Securities Inc. ("H2C")

H2C is a strategic advisory and investment banking firm committed to providing superior advice to healthcare organizations, higher education institutions, and related companies throughout the United States. H2C’s professionals have a long track record of success in healthcare and higher education mergers and acquisitions, capital markets, and real estate transactions, acting as lead advisors on hundreds of transactions representing billions of dollars in value.

Securities and services offered through H2C Securities Inc., member FINRA/SIPC, a registered broker-dealer and an indirect subsidiary of Fifth Third Bank, National Association. All rights reserved. Securities and services offered through H2C Securities Inc.: Are Not FDIC Insured; Offer No Bank Guarantee; May Lose Value; Are Not Insured by any Federal Government Agency; Are Not a Deposit.

H2C Capital Markets Team

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William B. Hanlon III

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Mike McCullough

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Anirudh Vemulapalli

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Catherine Gao

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Luke Vaughn

Associate

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Calvin Zhu

Analyst

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Carlos Aro

Director

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