RE:RE:RE:RE:RE:The effect of rate hikes...bandit69 wrote:
I've come across many in the world of markets that didn't fully understand the full ramifications of the cost of money (The Fed and bond markets), the how's or the why's. You should know the most basics then such as I've mentioned before if I can get X from a virtually risk free treasury then whoever is borrowing will need to offer me XX+ to take on the risk of lending to them. That's just one aspect with the cost of money. As I've already mentoned before, other factors are also affected in an increasing rate environment (business or personal....) not just debt servicing costs. If you're in that business then you should know this.
pat yourself on the back for reading your economics text book?
I would comment as follows:
- WELL's bank spreads will not change for a number of years because of rising rates - they have committed credit. even at term renewal, the medical space is highly competitive amongst senior lenders due to its low risk, stable cashflow generating profile and it is doubtful their credit spread will increase in a meaningful way. WELL can weather the increased cost of borrowing based on movements in CDOR/LIBOR/SOFR.
- WELL offers a substantial risk/reward premium over risk-free assets to investors / lenders.
- maybe you missed my post on valuations, but the private marketplace for healthcare is more robust than ever. especially as we head into a recessionary enviroment. multiples have not been materially hit by the increased cost of capital. the PE space is clamoring for companies like this. WELL is building this company to sell.
no - I don't work with WELL. I'm just an accredited investor and an experienced lender.