HCA, LifePoint ready bonds

Chains move to lengthen debt ma­tu­ri­ties

Modern Healthcare - - The Week In Healthcare - Vince Gal­loro

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

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