H2C INDUSTRY INSIGHTS: CAPITAL MARKETS

Bond Issuance & Volume

Week of August 1, 2022

Primary Market Activity: Healthcare

Commentary – Monthly Deal Activity

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

Primary Market Activity: Higher Education

Commentary – Monthly Deal Activity

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

• Total municipal bond issuance was $25.6 billion in July, a 22% decrease compared to June and a 32% decrease YoY. YTD municipal bond issuance has been $234 billion, a YoY decrease of 15% (1).

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• Total not-for-profit hospital bond issuance grew in July compared to June with a 6% increase MoM, however, total issuance fell by 28% YoY. All not-for-profit hospital issuance in the month of July was tax-exempt, nearly doubling June’s tax-exempt issuance ($1.5 billion vs $780 million) and resulted in a nearly 50% increase YoY (2).

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• July’s strong not-for-profit hospital issuance was almost completely due to Intermountain Healthcare’s $1.4 billion in tax-exempt issuances. Following its acquisition of SCL Health (CO), the Utah-based system created a new obligated group to issue six separate series ranging from $125 million to nearly $500 million and included both fixed-rate and variable-rate debt (78% fixed, 22% variable). 

(1) Source: The Bond Buyer market data as of July 31, 2022

(2) Source: Bloomberg

(3) Mandatory Tender Date

(4) 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.

• Total municipal bond issuance was $25.6 billion in July, a 22% decrease compared to June and a 32% decrease YoY. YTD municipal bond issuance has been $234 billion, a YoY decrease of 15% (1).

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• Higher education bond issuance fell sharply in July with just $580 million in total volume, representing a 59% decrease MoM and an 82% decrease YoY. Nearly all of July’s issuance was for tax-exempt debt. Year to date, higher education bond volume is down 18% compared to 2021. Further, both the University of Montana and Eastern Kentucky University insured their bonds with AGM and BAM, respectively (2).

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• July’s higher education volume was comprised of several relatively small deals with Northeastern University’s $379 million issuance being the only transaction to top $60 million. The money will be used to construct and equip a new 340,000 square foot engineering building that will include robotics and computer laboratories, classrooms, offices, and a dining area (3).

(1) Source: The Bond Buyer as of June 30, 2022

(2) Source: Bloomberg

(3) Source: Yeshiva University’s Series 2022A Preliminary Official Statement

(4) Has not yet posted an official statement. Pricing results are sourced from Thomson Municipal Market Monitor (TM3)

(5) 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.