Basis or interest rate. Risk resulting from interest-rate variance between yields on assets and costs on liabilities due to different bases, such as LIBOR versus SIFMA or the U.S. prime rate.
Put. Risk that bonds can be “put” back to the hospital by the lender.
Bank. Risk that the bank’s underlying credit rating will negatively impact the cost or stability of the loan.
Renewal. Risk that renewal of a bank letter of credit will come at an inopportune time or be unobtainable for a variety of reasons.
Credit. Risk that an organization’s credit rating changes while it is using certain programs that are dependent on the organization being at a certain credit level.
Failed term extension. Risk that the bank or other lender will fail to offer a new term at acceptable rates and/or business terms for a direct loan.
Tax reform. Risk that changes to personal or corporate tax rates, or to the deductibility of tax-exempt interest income lead to a higher cost of funding.
