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Healthcare was the fastest growing category of municipal bonds in 2024, with issuance more than doubled from the previous year to $36.55 billion. Care Hospital.
The 116% surge in healthcare bond sales from 2023 is a “splashback from an issue that plunged several years ago,” says Matt Fabian, partner at Municipal Market Analytics. “We had a really difficult year because of Covid,” he said. “Last year was the first year after that period. The hospital is a little more stable.”
Last year also marked a rebound in hospital credits from “a really rough year for breach of contract in 2023,” Fabian said. In 2024, “Investors are more confident.” He also attributed to the need to refinance private loans, which had some of the increase last year, which had been stolen in the previous year, prior to the difficulties of several healthcare facilities. That's what I thought.
The largest healthcare bond sales of 2024 include:
The $1.9 billion issue in April by the South Carolina Employment Economic Development Department funded the acquisition of three hospitals by the Novant Health Mandatory Group. $1.3 billion in sales from the Hillsboro County Industrial Development Department of Florida BayCare Health System in August. Tower Health's $1.2 billion issue with Berks County Municipal Authorities in September, a $1.1 billion sale for New York State Door Health obligations October group. $718 bond issued in March by the Colorado Department of Health and Facilities.
Susie R. Desai, Managing Director & Sector Lead for the US Nonprofit Health Group at S&P Global Assessment, said: “We expect it to continue until 2025 with regard to expenditure and debt issuance pickup.”
S&P steadyly raised its outlook on the acute healthcare sector last year, but the outlook remains “unstable” for many underrated issuers due to uneven economic recovery and regulatory challenges I reported that there was.
Desai said he is keeping an eye on policy changes under the Trump administration that could affect hospital debt. She listed concerns about municipal bond exemptions, changes in Medicaid and Medicare funding, and changes in tariffs as factors that could increase the risk of hospital funding.
“These concerns are there,” she said. However, she added that the impact of changing policies will likely not collide with the market until 2026.
According to LSEG data, typical acute care hospitals accounted for $30.27 billion in healthcare trading volume in 2024, an increase of 138% from 2023 to 2023. The number of issues in these facility jumped from 138 in 2023 to 206. Continued care facility bond issuances rose 37% to $2.72 billion, but the amount of children's hospital bonds has more than tripled.
Funding for ongoing care facilities increased from more than a third to more than $2.72 billion in 45 transactions in 2023 to more than a third in 58 transactions. Bond issuances for single specialty hospitals and general health facilities increased by 42% by $382.4 million, or 5.4%. $186.5 million each.
State agencies and local governments have sold nearly 90% of total medical issues in 2024, or $20.54 billion in medical bonds from $8.4 billion in 2023, with local governments from $486 billion to 12.4 billion. We sold $50 million in healthcare bonds. .
Healthcare issuances by cities and towns rose 55% to almost $1.1 billion, while district issuances fell 30% to $1 billion.
Taxable bonds dominated healthcare last year, as taxable bonds totaled just $1.56 billion. Still, Westchester Medical Center Health Network's $286.9 million tax issue was a bond buyer's healthcare transaction, celebrating its pioneering use of taxable tender offers.
Revenue bonds accounted for almost all medical funds, but general obligation transactions sank to $643 million from $1.36 billion in 2023. Money and refinance transactions.
Fixed-rate borrowing took control of healthcare in 2024, more than doubled from the previous year to $29.27 billion. Fluid-rate (short put) bonds increased from $1.6 billion to $4.13 billion, while variable-rate (long-term/no put) transactions in 2023 fell from $2.5 billion to $1.49 billion . 2023.
Bond insurance for healthcare issues has not changed since 2023 at $1.45 billion. Credit letters rose from $710 million the previous year to $2.4 billion in 2024.
Bank-qualified bonds rose from $278.2 million in four transactions in 2024, from $14.6 million in three transactions in the previous year to $278.2 million.
