Low Investment-Grade Hospitals Face Highest Borrowing Costs Since 2009

Hospitals with low investment-grade ratings are now experiencing the highest relative borrowing costs since 2009, according to a Bloomberg report.

To hold BBB rated 10-year hospital bonds over top-rated general-obligation debt, hospitals had to generate extra yield of 2.74 percentage points beginning May 13, compared to 1.93 percentage points beginning Jan. 17. This is the widest spread since Oct. 13, 2009, according to Bloomberg data. AA rated hospital debt above the 10-year top-rated bonds became 1.51 points May 16, the widest level since Aug. 2009.

Higher-rated hospitals are less likely to face spreads widening to this degree, according to the report.

Read the Bloomberg report on borrowing costs.

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