Nervous investors who are eager to get rid of short-term bonds or commercial paper pose a risk for health systems that have agreed to use their own cash to buy back the debt, New York ratings agency Moodys Investors Service cautioned in a report. Two dozen health systems rated by Moodys have issued a total $8.4 billion with pledges to take the debt off investors hands when no one else will. Investors began to unload the bonds in late September, thanks to stark unrest in credit markets, occasionally forcing health systems to step in. Bonds are typically sold each day or week, leaving borrowers hours or days to come up with the money. Analysts said hospitals have, thus far, effectively managed these programs and responded well to cash needs. The unprecedented turmoil has forced three not-for-profit systems to buy back bonds to date: NorthShore University HealthSystem, North Mississippi Health Services and Riverside Health System, according to the report. -- by Melanie Evans
Bond buy-backs may stress liquidity: Moody's
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