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A loan typically issued by a bank that has a maturity of one to ten years

A form of long-term financing whereby an issuer receives cash from a lender (an investor), and in return issues a promissory note (a "bond") agreeing to make principal or interest payments on specific dates

A fund into which monies are set aside each year to ensure that a bond can be liquidated at maturity

The art of offsetting high variable rate debt payments with returns from high-rate investments

Hospital borrower exchanges or swaps interest rates (fixed to variable rate or variable to fixed rate) between another party, typically a bank or investment banking firm, with the intent of securing a more favorable rate

An asset with clear value (such as land and buildings) that is pledged against a loan to reduce risk to the lender. If the loan is not paid off satisfactorily, the lender has a legal claim to seize the pledged asset

Prohibits the health care provider from giving a lien (claim) on its real estate to any other creditor

A preliminary study undertaken by an organization and complied by a third party to determine and document a project's financial viability.

The amount of total debt that an organization can be reasonably expected to take on and pay off in a timely manner

An agent for bondholders who ensures that the health care facility is making timely principal and interest payments to the bondholders and complies with legal covenants of the bond

By purchasing bond insurance, which protects against default, a hospital borrower can lower its cost of debt and improve the bond's marketability

A bond that trades in the marketplace

Gross proceeds less the underwriter's and others' issuance fees

A preliminary official statement offered to prospective buyers of a bond by the underwriters to help determine a fair market price for the bond

An entity who owns an asset that is then leased out

An entity who negotiates the use of another's asset via a lease

A lease that lasts shorter than the useful life of the leased asset, typically one year or less. This type arrangement can be canceled at any time without penalty, but there is no option to purchase the asset once the lease has expired

A lease that lasts for an extended period, up to the life of the leased asset. This type cannot be canceled without penalty, and at the end of the lease period, the lessee may have the option to purchase the asset. ALSO called a financial lease

A type of capital lease whereby an institution sells an owned asset and then simultaneously leases it back from the purchaser. The selling institution retains rights to use the asset but benefits from the immediate acquisition of cash from the sale

An investment for a for-profit entity that reduces the amount of income tax to be paid, often because interest and depreciation expenses are tax deductible

The gradual process of paying off debt through a series of equal periodic payments

When the market rate is higher than the coupon rate, a bond is said to be selling at a discount from its par value

A bond that pays fixed amount of interest at regular periodic intervals, usually semiannually

Offered through a bank, this can be used to enhance the creditworthiness of an institution and hence a bond's rating

What a bond would sell for in today's open market

The face value amount of a bond; it is the amount the bondholder is paid at maturity, and it does not include any coupon payments

When the market rate is lower than the coupon rate, a bond is said to be selling at premium

The market interest rate on similar-risk bonds

The rate at which the market value of a bond is equal to the bond's present value of future coupon payments plus

Ratings assess the organization's creditworthiness or the likelihood of default of a bond. Higher rating, the lower the interest rate