Trending in Healthcare Treasury and Capital Markets
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Stay up to date on changes in the capital markets and get insights on the implications of market movements and industry trends for Treasury operations in this biweekly blog, authored by Kaufman Hall Managing Director Eric Jordahl.
The Massive Gulf Between Normal and Today
We see a continued modest capital formation environment. Bon Secours Mercy issued approximately $400 million of tax-exempt debt in a very difficult market. The transaction got done, but...
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Navigating Under Pressure
Not-for-profit healthcare issuance remains light across all public and private funding channels. Rates remain relatively attractive, but uncertainty about the depth and breadth of the new issue healthcare markets persists.
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Living in Interesting Times
The landing point of the COVID cycle seems to be a profoundly challenged operating model paired with escalating balance sheet vulnerability due to reduced organic cash flow generation and volatile investment markets.
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How Intractable Will Inflation Be?
2022 is not the 1980s, but lessons learned during earlier battles with inflation can help inform scenarios of what we might be facing today if inflation proves more intractable than our current government and policy leaders anticipate.
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A Midyear Assessment
In a midyear assessment, we look at the current situation from the angles of inflation and labor, Federal Reserve activity, key benchmarks, and risk indicators and the funding environment.
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Inflation and Behavioral Economics
Behavioral economics describes how human error can upend statistical or logical expectations. This may have serious implications for the Fed’s efforts to control inflation.
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The Inflation Narrative
Capital markets are fueled by translating data into perception, and narratives have always been important in shaping this process. The question today is whether the Fed is losing control over the inflation narrative.
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Bracing Yourself for the Coming Storm
JPMorgan CEO Jamie Dimon recently warned of a coming economic storm. There are specific actions you can take to brace your organization against what might be a tropical storm or a Category 5 hurricane.
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Troubled Waters
With increasing turbulence in the markets, different parts of the capital structure playbook may need to change. Funding channels, return on risk, and credit-liquidity cost are all topics to watch.
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Be Careful Out There
As the operating, financing, and investing activities of every health system face significant headwinds, it will be important to continuously reassess what type of external capital you should access and how you should access it.
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Inflation and the Holding Company Threat
The market environment remains challenging given sharply higher benchmark rates and continued uncertainty around credit spreads. Transactions are moving through the process but each one...
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What the Yield Curve Is Saying
The current Treasury yield curve seems to be communicating that we have both a “short-term” inflation problem and a long-term growth concern.
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Repricing Risk
Risk appetites and risk pricing are recalibrating in response to macroeconomic, geopolitical factors and changes in Fed policy. Eric Jordahl offers three observations from the early days of the risk recalibration journey.
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Managing Market Issues and Opportunities Amid Complex Pressures
Financial markets are reacting to a whirlwind of competing pressures: COVID-19, inflation, and a war in Europe. Learn more about the emerging issues and opportunities for hospitals during a complex market moment.
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Higher Rates and Capital Structure Management
As organizations consider how to respond to rising rates, one option is introducing capital structure risk: using floating rate products, put bonds, or other structures that move debt to a lower cost point on the yield curve in exchange for assuming risk.
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Driving New Roads with Old Maps
As inflationary pressures mount and the Fed prepares to act, new risks of market dislocation emerge. These are compounded by the risk that we—and the Fed—may be driving new roads with an old map.
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COVID Stabilization and Lines of Credit
As the COVID crisis moderates, the question for most organizations is whether to maintain lines of credit. The answer requires clarity on the purpose of these facilities today.
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To 2022 and Beyond
We are moving out of the realm of crisis and uncertainty and into the realm of stabilization and risk. Unfortunately, stabilization does not mean the absence of turbulence.
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Fun With Statistics Healthcare Treasury and Capital Markets
One of the pillars of statistical analysis is reversion to the mean. But what guide do you use when the Fed’s policies have fundamentally reset how markets work?
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A Long Strange Trip
If COVID is King Kong and inflation is Godzilla, Kong is winning and will likely keep winning until time and events help us figure out how to live with COVID as endemic.
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The Balance Sheet You Need
We are in a moment that offers an unprecedented opportunity to reposition balance sheet resources to get to the liquidity profile needed to drive operational and strategic success.
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Are Inflationary Pressures Transitory or Structural?
The Fed is predicting that inflationary pressures are transitory, but healthcare leaders face the business challenge of major expense inputs that have moved to new levels based on pressures that may have a relatively long tail.
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Resiliency and the Management of “Accessible” Resources
Federal Reserve Chairman Jerome Powell suggested that the Fed would start tapering its bond purchasing activities in November with the plan of fully winding down the element of market support by mid-2022, at which point they might begin to raise short-term rates.
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Better Enterprise Resource Management
The pathway through the period of widespread volatility we face will require making resiliency a central organizational objective, and the only way to achieve financial resiliency is through effective resource allocation.
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Better Enterprise Risk Management
Organizations should focus on strategic risk management to identify and ultimately address the risks representing the major financial headwinds the organization confronts.
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A Technology Strategy for Treasury
A well thought out technology plan is an important element in building a strategic Treasury function.
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Viewing Assets Through a Resiliency Lens
Over the past months we have advanced the point of view that COVID-driven business model disruptions make it essential for every healthcare organization to focus on resiliency.
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