Texas Hospital Seizes on Demand for Short-Term Debt in Mega Deal

Houston Methodist, a non-profit hospital in Texas, raised roughly $1.25 billion in a bond sale this week that capitalized on increasing investor demand for debt with shorter maturities.

The offering, issued to refinance outstanding debt, only included securities maturing from three to 10 years.

Typically, muni bond sales feature longer maturities, extending out 20 to 30 years, because borrowers want more time to pay back their debt. A deal by a hospital in Florida, for example, featured a 25-year maturity.

But there’s a growing buying force in the muni market — separately managed accounts — that prefer short-term ...