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HilltopSecurities’ High Yield Survey Weighs Investor Concerns and Projections

01/31/2022

The HilltopSecurities high yield team published the findings of its High Yield Impact Survey last month, providing a snapshot of the current outlook for a range of sectors in the coming year. Some of the survey’s key findings highlighted skilled nursing and senior living as areas of concern, while at the same time, investors pointed to charter schools, health care, and senior living, but not skilled nursing, as sectors they were looking to add exposure in 2022.

Bloomberg’s Joe Mysak outlined what this could mean for municipal market participants in his article, “Senior Living Gives Investors Jitters.” He believes that no other sector has been hit harder by the pandemic. Mysak also noted that according to Municipal Market Analytics, almost 60% of the $2.9 billion in municipal issuances sold for senior living projects including nursing homes defaulted in 2021.

Amy Stulick at Skilled Nursing News interviewed Yaffa Rattner, HilltopSecurities’ head of municipal credit and one of the study’s authors, about the survey’s findings for a Jan. 17 article, noting that the results seemed surprising due to the industry’s robust M&A market. According to Rattner, “outlooks don’t generally overlap between the bond market and M&A; participants have different drivers for their investment decisions.”

In addition to Rattner, HilltopSecurities’ High Yield Impact Survey was authored by John Pellicci, head of municipal underwriting and sales, and Elizabeth Funk, municipal underwriter. The team received 88 responses regarding high yield investment opinions in 2022.

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