Healthcare borrowers continued to wait for relief last week after the United States massive financial rescue package failed to deliver a confidence boost to investors as hoped.
Tax-exempt hospitals and health systems have been frozen out of markets for long-term bonds with fixed interest rates since the mid-September bankruptcy of a major Wall Street bank fueled investor panic.
In Wisconsin, the unrest has stalled one health systems deal and the Wisconsin Health and Educational Facilities Authority, which issues bonds for tax-exempt hospitals and health systems, will consider four more at a scheduled meeting on Oct. 20.
We are just a small part of a large inventory of financings that are ready to be marketed that are waiting for investor confidence to return, said Lawrence Nines, the authoritys executive director.
Meanwhile, bonds sold in short-term markets with variable rates saw interest move rapidly upward as investors fears heightened, though rates have subsided somewhat. In New Jersey, the Health Care Facilities Financing Authority oversees a $100 million pool with variable-rate short-term bonds and rates spiked to 8% in recent weeks before settling to 4.75%, said Mark Hopkins, the authoritys executive director.
Eight healthcare borrowers have deals under development with the agency, though none will reach the market before mid-November.