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  "documentTitle": "NMC Health plc (NMC.LN)",
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  "authorName": "Carson C. Block",
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  "notes": "Includes two tables detailing debt refinancing by year and interest rates on total debt.",
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      "text": "In FY 2018, interest expense grew precipitously, and these costs formed the most significant component of NMC's earnings miss.",
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      "text": "Interest Rate: 5.90%",
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      "text": "acquisition of Al Zahra Hospital. Further, we understand that local banks do not require cash collateralization at a ratio worse than 5:1 to 4:1 for a large business, yet we calculate this ratio for NMC is roughly 3.6:1 overall and 2.2:1 on bank debt.",
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      "text": "In FY 2018, interest expense grew precipitously, and these costs formed the most significant component of NMC’s earnings miss. This rise in finance costs to nearly 6% of the disclosed debt balance makes more sense amid NMC’s undisclosed debt and reverse factoring.",
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      "text": "Compounding our concerns about the negative carry, NMC churns its debt at a rate that imposes significant costs. NMC refinanced its five-year loans in 2013, 2015, and 2017. In these cases, the company wrote off unamortized financing fees totaling $12.8 million. NMC then refinanced its entire long-term debt balance again in 2018, even as its average interest rate ballooned from 3.9% to 5.7%.",
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      "text": "Footnotes 24 and 25 referencing external news sources.",
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      "text": "Debt refinancing data from 2012-2018 including term loans, bond/sukuk, and repayment metrics.",
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      "text": "Interest rate data from H1 2016 to H1 2019 including debt balances, interest expense, and calculated interest rates.",
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      "text": "Table 1: NMC Debt Refinancing by Year",
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      "kind": "title",
      "text": "NMC’s Margins Seem too Good to be True as Compared to Those of Regional Peers",
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      "text": "Table 2: NMC Interest Rate on Total Debt",
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