The risk that banks represent to healthcare borrowers since the credit crisis is by now familiar. Hospitals that enter debt markets with bank credit backing can find investors wary or uninterested when banks' own credit strength falters. That can drive up interest rates or force borrowers to rapidly buy back or refinance debt.
So it should come as no surprise that the downgrade of 15 banks by Moody's Investors Service last week would create uncertainty for some healthcare borrowers. Moody's included Bank of America, Citibank, Morgan Stanley Bank and the Royal Bank of Scotland on the list and dropped the banks' short-term credit rating to P2 from P1.