News Headlines Article

A.M. Vitals: Hospitals Face Consequences of Interest-Rate Bets
The Wall Street Journal

A lot of hospitals made what turned out to be bad bets on the direction of interest rates using complicated financial instruments, and are now facing the consequences — including huge penalties for disentangling themselves from the contracts, the WSJ reports. At least one in six nonprofit hospitals bought interest-rate swaps, one firm tells the paper, while other institutions issued auction-rate securities. Rock-bottom interest rates have made those decisions costly, and in some cases the investments have contributed to layoffs or halted expansion plans, the paper says.