HCA, LifePoint ready bonds
Chains move to lengthen debt maturities
HCA and LifePoint Hospitals are getting while the getting is good for investor-owned hospital chains, and in credit markets generally, according to one investment banker. Both companies announced plans last week that lengthen their debt maturities and, in the case of LifePoint, add new borrowing capacity.
Jeff Villwock, managing director of Genesis Capital in Atlanta, said good, strong credits such as HCA and LifePoint are wise to move now. One huge risk to credit markets going forward is the staggeringly high and still rising government debt levels in Greece, Japan, Spain, Portugal, the United Kingdom and the U.S., Villwock said.
“In today’s environment, with continued uncertainty around the world, it’s probably a good idea to lock in your amendments and your extensions early,” Villwock said. “There’s a cost, whether doing a bond offering or extending your credit lines, but it’s not significant in the scheme of things.”
Even though the recession has put pressure on admissions for many hospital operators, their reimbursements are growing faster than their costs, Villwock said. The aging of the population is going to bring more volume, but Villwock has been forecasting a sharp future cut in Medicare reimbursements in response to the rapid growth in