Sentara Healthcare Series 2021 and 2021A

15 Oct

Case studies

Sentara Healthcare Series 2021 and 2021A

Pricing Date: October 7, 2021

Closing Date: October 14, 2021

$156,035,000 Series 2021A Tax-Exempt Bonds

$300,000,000 Series 2021 Taxable Bonds


  1. The Series 2012A fixed rate bonds provide refunding savings potential, but are not currently callable until August 2022.
  2. Fast growing health system in Virginia/North Carolina with potential for future expansion.
  3. Historically low leverage and strong liquidity compared to ‘AA’ category peers.
  4. Flexible plan of finance, driven by opportunistic financing.

Challenging Market Environment

  1. Rising Rate Environment: In the weeks leading up to pricing, benchmark MMD and Treasury rates increased by 15 and 30 basis pts.
  2. Volatile Tax-Exempt Market: After months of steady demand, investor appetite for sub-4.00% bonds weakened with the rise in rates.
  3. Increasing Tax-Exempt Credit Spreads: A heightened expectation of rising rates has led investors to demand higher yields.


Replacement Refunding (20 basis point forward premium): Sentara refunded variable rate debt with fixed rate debt as part of the 2021 financing. In 2022, Sentara plans to refund the Series 2012A fixed rate bonds with variable rate debt to recapture variable exposure.

Pricing Day Bond Structuring Solution: During the order period, investors showed no appetite for 3.00% bonds in 2050, but showed strong interest for the 2.625% 2050 and 3.00% 2046 structures. Given flexibility with amortization, Sentara was able to allocate the unsold 3.00% 2050’s to the other two bond maturities.

About Sentara Healthcare: ‘Aa2/AA’ (Moody’s/S&P)

Sentara is the controlling entity of an integrated healthcare delivery system and a group of affiliated health insurance plans. Sentara provides a comprehensive array of healthcare services in Virginia and northeastern North Carolina.

30 yr Benchmark MMD and Treasury Yields Sept. – Oct. 7, 2021:

Sentara Healthcare 30 yr MMD and Treasury

Pricing Results:

Sentara Healthcare Series 2021 Pricing Results