Catholic Healthcare West scaled back an expected $753 million debt deal last week to $300.1 million as rising interest rates in recent weeks wiped out any potential gains on the remaining bonds. The $453 million unsold may be brought to market if conditions improve, said Andrew Pines, managing director in the Citigroup healthcare finance group. CHW's deal comes as tax-exempt borrowers have rushed to take advantage of strong investor demand, which has helped lower interest rates that climbed last fall as the financial markets faltered and the recession worsened. CHW's Oct. 28 deal was reported by Modern Healthcare on Oct. 26 (p. 14) as a $919 million bond issue, which included $166 million that is expected to go to market in November. Pines said the system is expected to refinance $166 million of variable-rate demand bonds in November to replace the bank that provides credit and liquidity backing for the debt. Last week, investors bought $139.5 million of CHW fixed-rate bonds with long-term yields of 5.2% and 5.23%, Pines said. The remaining $160.6 million were sold as three-year put bonds with a rate of 2.875% or five-year put bonds with rates of 3.875%. For more financing news, see story, p. 14.
Late News: CHW halves debt deal as rates wipe out gains
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