Potential Bank of America Downgrade Could Impact Hospital Bonds

Moody's Investors Services is reviewing Bank of America for a potential downgrade, and hospitals with bonds backed by the giant lender's letters of credit should have a contingency plan in place, according to an HFA Partners report.


Hospitals with BoA-backed bonds that do not take some kind of action may wind up paying a higher interest rate on an accelerated amortization schedule, according to the report. HFA Partners recommends hospitals evaluate three options if a downgrade does occur:

•    Get a substitute letter of credit.
•    Refinance with a bank direct placement.
•    Refinance with a public offering.

To read the entire HFA Partners article, click here.

More Articles on Hospital Bonds:

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Hospital Bond Volumes Down 27% in 1Q of 2012

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