Fitch: Capital Structure Management: More Options for Health Care Borrowers.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- In a newly released health care special report, Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. provides analysis on a new variable-rates financing structure recently utilized by the University of Pittsburgh Medical Center The University of Pittsburgh Medical Center (UPMC) is a leading American healthcare provider and institution for medical research. It consistently ranks in US News and World Report's "Honor Roll" of the approximately 15 best hospitals in America. . As the use of floating-rate debt by hospital and health care providers has grown dramatically, there has been a corresponding desire by those borrowers to diversify their variable-rate liabilities. In November 2005, the University of Pittsburgh Medical Center (UPMC See Ultra-Mobile PC. ) and its investment banker Investment Banker A person representing a financial institution that is in the business of raising capital for corporations and municipalities. Notes: An investment banker may not accept deposits or make commercial loans. Goldman Sachs debuted an alternative tax-exempt variable-rate security called Extendible Municipal Bonds, or X-Tenders. Similar to variable-rate demand obligations, bonds in the X-Tender mode are issued with a long-term nominal maturity (up to 30 years) and an interest rate that is reset on a weekly basis. The X-Tender mode is unique in that the bonds are issued with a 13-month mandatory tender, which can be extended at the option of the bondholder on a monthly basis. Fitch's special report reviews the various characteristics of the X-Tenders relative to the more common variable-rate demand bond and auction-rate security structures. Fitch believes the use of floating-rate debt by hospitals and health care systems will continue to grow over the long term as a result of more sophisticated asset/liability strategies and the growing acceptance of and comfort with interest-rate swaps by health care management and boards. Floating-rate structures provide health care borrowers a greater degree of flexibility in managing their capital needs due to their multimodal Two or more modes of operation. The term is used to refer to a myriad of functions and conditions in which two or more different methods, processes or forms of delivery are used. On the Web, it refers to asking for something one way and receiving the answer another; for example requesting feature and flexible redemption provisions. 'The increased use of interest-rate swaps has provided issuers the ability to create synthetic fixed-rate obligations that offer more efficiencies than conventional fixed-rate debt,' said James LeBuhn, Senior Director for Fitch Ratings' U.S. Public Finance sector. 'However, as floating-rate debt makes up a larger portion of their overall capital structure, many health care borrowers have seen the need to diversify their variable-rate liability through the use of differing variable-rate structures.' The new report 'Capital Structure Management: More Options for Health Care Borrowers' is available at www.fitchratings.com under the 'U.S. Public Finance' tab and 'Special Reports'. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria, and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance, and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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