Health-care issues soared by 43.7% in the first half of 1993 compared with the same period in 1992, with refundings providing most of the push.

A total of 506 issues were priced during the first half of this year, totaling $15.6 billion. In the first half of 1992, 443 issues for a $10.8 billion total were priced, according to statistics compiled by Securities Data Co.

Refundings accounted for $9.1 billion of all health-care issues, up 84.9% over 1992 figures.

"It's hard to discount the fact that rates have been at their lowest in 20 years," said Troy A. Gerleman, vice president of tax-exempt fixed-income research at Kemper Securities Inc.

Gerleman said many health-care issuers had been "sitting on the trigger," waiting for interest rates to fall before doing any advance refundings.

"A lot [of issuers] hit the trigger in the first six months," Gerleman said.

In accounting for the surge in volume, Gerleman also pointed to health-care issuers that borrowed to "beef up" their cash supplies in preparation for any changes forced on them by national health-care reform.

Anne G. Ross, vice president and manager at Roosevelt & Cross Inc., said another reason for the jump in bond volume is increased issuance by healthcare providers that have "turned the corner" financially in the last three to five years.

Nearly all of the health-care bonds priced in the first half of the year were tax-exempt issues. There were 33 taxable issues, totaling $454 million, and three alternative minimum-tax issues, totaling $34.1 million.

Negotiated offerings accounted for 461 issues, totaling $15 billion, compared with $346 million of debt that was sold competitively and $218 million that was privately placed.

Pricings for acute-care facilities accounted for 366 issues, totaling $13.8 billion. Acute-care issues increased 61.7% over last year. Bonds issued by specialized medical facilities increased to $439 million with 15 issues, from $379 million and 16 issues last year.

Ross said the surge in acute-care issuance can be partly attributed to the increase in issuance by community hospitals that are joining forces to provide a range of advanced medical care as a group, competing with teaching hospitals that provide such services on their own.

"Over the last several years, [community hospitals] have found it palatable to invest in their plants and equipment," Ross said.

Debt issuance for children's facilities, equipment loans, nursing homes, and life-care facilities for the elderly all decreased in the first half of 1993, compared to last year.

Ross and Gerleman said the decline in issuance by children's facilities, a drop of 16.1% since last year, is due mainly to shrinking Medicaid reimbursements.

Issuance for equipment plummeted by 33.1% over last year, partly because many institutions have found it more economical to lease equipment than to issue bonds, Ross said.

From January to June, there were 172 insured health-care issues totaling $7.9 billion, up 59.1% over last year. Twenty-four issues, totaling $397 million, were backed by letters of credit, compared with $604 million last year.

There were 465 revenue bond issues totaling $15.3 billion and 41 general obligation issues totaling $276 million in the first half of the year.

Merrill Lynch & Co. underwrote 29 health-care issues totaling $1.86 billion for a 12.1% market share, surpassing all others in the industry. First Boston Corp. ranked second, underwriting 32 issues totaling $1.51 billion for a 9.8% market share. Third-ranked Morgan Stanley & Co. underwrote 14 issues, totaling $1.19 billion for a 7.7% market share. PaineWebber Inc. came in fourth place, underwriting $1.12 billion of bonds in 26 issues. Goldman Sachs & Co. placed fifth, underwriting $1.04 billion of bonds in 19 issues.

California led the nation in total health-care issuance, pricing $1.83 billion of bonds in 34 issues with a 11.8% market share. Issuers in second-ranked Pennsylvania priced $1.14 billion of bonds in 43 issues with a 7.4% market share. New York placed third, pricing $1.09 billion of bonds in 23 issues with a 7% market share.

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