H2C INDUSTRY INSIGHTS: CAPITAL MARKETS
Bond Issuance & Volume
Week of November 6, 2023
Primary Market Activity: Healthcare
Commentary – Monthly Deal Activity
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There were 661 municipal bond issues in October for a total of $37.2 billion, a 29.3% increase year-over-year, and the second straight month of year-over-year supply growth. However, October’s $37.2 billion of issuance is still below the 10-year average of $43.8 billion for the month (1).
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Not-for-profit hospital issuance was $1.3 billion in October, a 14% decrease compared to September and a 25% decrease year-over-year. Year-to-date, not-for-profit hospital issuance is down nearly 40% compared to the same time period in 2022.
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Vandalia Health came to market with $407.7 million of tax-exempt, fixed rate bonds. Proceeds from the bonds will refund previous issuances and fund improvements at Vandalia hospitals throughout West Virginia. The bond structure includes 6% coupons on select term bonds maturing in 2048 and 2053. A portion of the bonds are insured by AGM.
Not-For-Profit Hospital Issuance • ($ in billions)
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Source: The Bond Buyer as of October 31, 2023.
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Bonds are insured by Assured Guaranty Municipal (AGM).
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Spreads as of the date of sale. Tax-exempt bonds are spread to the corresponding AAA MMD benchmark maturity published by TM3. Taxable bonds spread to 30-year UST unless otherwise stated.
Primary Market Activity: Higher Education
Commentary – Monthly Deal Activity
Higher Education Issuance • ($ in billions)
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There were 661 municipal bond issues in October for a total of $37.2 billion, a 29.3% increase year-over-year, and the second straight month of year-over-year supply growth. However, October’s $37.2 billion of issuance is still below the 10-year average of $43.8 billion for the month (1).
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Total higher education issuance was $656.8 million in October, a 50% decrease compared to September and a 27% decrease year-over-year. Year-to-date, higher education issuance is down 29% compared to the same time period in 2022.
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Colorado State University came to market with $60.7 million (Series 2023A-1) of long-term, fixed rate bonds and $60.0 million (Series 2023A-2) of put bonds structured with a mandatory tender on March 1, 2032. Bond proceeds will be used to: (i) finance various campus improvements; (ii) fund capitalized interest and; (iii) pay costs of issuance.
Source: Bloomberg LP
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Source: The Bond Buyer as of October 31, 2023.
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Bonds insured by BAM.
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Remarketing of Series Y Bonds (originally issued June 1, 2000).
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Put Bonds; priced to mandatory tender on March 1, 2032.
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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 UST unless otherwise noted.
Key Rate Updates
Source: U.S. Department of the Treasury, Bond Buyer, Investment Company Institute, Bloomberg and Refinitiv/TM3. Data as of November 3, 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.
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H2C Capital Markets Team