Financial pressures on hospitals are easing after a challenging 2022, presenting an opportunity for muni-bond investors.
In Brief
- While general obligation bonds receive most of the headlines, revenue bonds represent a much larger portion of the municipal bond market.
- The hospital sector is a large slice of the revenue-bond market and represents 13% of the overall muni market, as represented by the Bloomberg Municipal Bond Index.
- Hospital muni bonds typically provide more yield than other areas in the municipal-bond market, so the sector can deliver attractive long-term returns when performing well.
- Based upon our positive credit outlook and the sector’s relatively higher yields, we are bullish about the outlook for the performance of the hospital sector for the remainder of 2023.
Lord Abbett
By Pranav Sharma, Kari T. Gauster, Nicholas Bragdon
June 14, 2023