H2C INDUSTRY INSIGHTS: CAPITAL MARKETS

Bond Issuance & Volume

Week of December 5, 2022

Primary Market Activity: Healthcare

Commentary – Monthly Deal Activity

  • “November municipal bond issuance hit a 23-year low for the month as total volume dipped below $20 billion” (1). Municipal bond issuance for the month was $19.7 billion, a 29% decrease compared to October and a 47% decrease YoY. YTD municipal bond issuance has been approximately $361 billion, a YoY decrease of 18% (2). The Municipal Securities Rulemaking Board reported that trading volume “reached another record in November 2022 with 1.29 million trades recorded.” This volume is more than doubled compared to November 2021 (3).

  • Total not-for-profit hospital bond issuance declined in November compared to October representing a 72% decrease MoM. Total issuance fell by 90% YoY. YTD issuance is lower by 40% YoY. There were no taxable issuances for not-for-profit hospitals in November (4). 

  • Baylor Scott & White Health’s issuances account for 99% of November’s not-for-profit hospital volume. The bond proceeds will be used for construction, expansion, improvement, acquisition, buildings, and capital equipment for healthcare facilities in various cities of Texas.

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

Graph 1.png
Chart 1.png
  1. The Bond Buyer “November issuance dips below $20B for first time since 1999” dated November 30, 2022​

  2. Source: Bloomberg and The Bond Buyer market data as of December 2, 2022​

  3. The Bond Buyer “Munis rally to kick off December” dated December 1, 2022​

  4. Source: Bloomberg​

  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.​

  6. Fixed Rate Put Bonds​

  7. Mandatory Tender Date

Primary Market Activity: Higher Education

Commentary – Monthly Deal Activity

Higher Education Issuance • ($ in billions)

Chart 2.png
  • “November municipal bond issuance hit a 23-year low for the month as total volume dipped below $20 billion” (1). Municipal bond issuance for the month was $19.7 billion, a 29% decrease compared to October and a 47% decrease YoY. YTD municipal bond issuance has been approximately $361 billion, a YoY decrease of 18% (2). The Municipal Securities Rulemaking Board reported that trading volume “reached another record in November 2022 with 1.29 million trades recorded.” This volume is more than doubled compared to November 2021 (3).  

  • Higher education bond issuance was slightly lower in November with $0.8 billion in total volume, representing 10% decrease MoM and a 55% decrease YoY. Year to date, higher education bond volume is down 14% compared to 2021. The issuance in November comprised of both tax-exempt and taxable debt (4).

  • John Hopkins University’s $300 million (2022A) issuance accounts for more than one third of November’s $813 million in higher education volume. Proceeds will be used to finance certain capital projects of the institution and to pay for the cost of issuance of the bonds.

Graph 2.png
  1. The Bond Buyer “November issuance dips below $20B for first time since 1999” dated November 30, 2022​

  2. Source: Bloomberg and The Bond Buyer as of December 2, 2022​

  3. The Bond Buyer “Munis rally to kick off December” dated December 1, 2022 ​

  4. Source: Bloomberg​

  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.​

  6. Spread to the 10-year US Treasury

Key Rate Updates

Graph 3.png
Graph 5.png
Graph 4.png
Graph 6.png

Source: U.S. Department of the Treasury, Bond Buyer, Investment Company Institute, Bloomberg and Refinitiv/TM3 Data as of December 2nd, 2022.​


(1)   Weekly SIFMA and SIFMA/1M-LIBOR as of November 30th, 2022​

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

Michael Hammond

Managing Director

212.257.4550

mhammond@h2c.com

Richard Bayman

Managing Director 404.937.1340

rbayman@h2c.com

William B. Hanlon III

Managing Director

858.242.4801

bhanlon@h2c.com

Emily Abrantes

Managing Director

212.257.4500

eabrantes@h2c.com

Victoria Poindexter

Managing Director

312.508.4201

vpoindexter@h2c.com

Mike McCullough

Senior Associate

212.257.4511

mmccullough@h2c.com

Andy An

Associate

312.508.4208

yan@h2c.com

Greg Zuber

Analyst

312.508.4202

gzuber@h2c.com

Anirudh Vemulapalli

Analyst

212.257.4534

avemulapalli@h2c.com

Shawn Sinel

Director

212.301.2700

ssinel@h2c.com

Catherine Gao

Vice President

212.257.4508

cgao@h2c.com

Luke Vaughn

Analyst

312.508.4206

lvaughn@h2c.com

Calvin Zhu

Analyst

847.654.1508

czhu@h2c.com

Carlos Aro

Director

615.618.5349

caro@h2c.com