Hospitals and health systems worried about the impending Medicare sequestration cuts may be able to breathe easier, as their municipal bonds have yielded returns at their highest levels since 2009, according to a Bloomberg Businessweek report.
Hospital bonds have gained 9.1 percent this year, while healthcare bonds have gained 9.5 percent. Currently, they are the best-performing revenue instruments in the municipal market, according to the report.
Standard & Poor's and other financial agencies expect the big gains to continue, as the Federal Reserve plans to keep interest rates at historic lows, which will invite investors to add riskier, higher-yielding bonds like hospital and healthcare debt.
The interest rate spread between AAA-rated securities and BBB-rated securities in August fell to 1.1 percent, the smallest spread since 2008, according to the report.
Hospital bonds have gained 9.1 percent this year, while healthcare bonds have gained 9.5 percent. Currently, they are the best-performing revenue instruments in the municipal market, according to the report.
Standard & Poor's and other financial agencies expect the big gains to continue, as the Federal Reserve plans to keep interest rates at historic lows, which will invite investors to add riskier, higher-yielding bonds like hospital and healthcare debt.
The interest rate spread between AAA-rated securities and BBB-rated securities in August fell to 1.1 percent, the smallest spread since 2008, according to the report.
More Articles on Hospital Bonds:
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Reviewing This Summer's Hospital Bond Markets: Q&A With Pierre Bogacz, Co-Founder of HFA Partners
Riskier Hospital Bonds Attract Yield-Seeking Investors