Health reform hearings driving up hospital chains' credit-default swaps

Investors appear to be getting nervous about the prospects for national health care reform, in full, surviving the U.S. Supreme Court challenge. Even before yesterday's questions that led many observers to say the nation's top judges appear to be leaning toward scrapping the insurance mandate, the price of credit-default swaps on the debt of hospital chains HCA, CHS and others had been rising, write Heather Perlberg and Sridhar Natarajan at Bloomberg.

Swaps on HCA, the biggest issuer in the index, have jumped 45 basis points this month to 501 basis points, according to CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market. The contracts climbed to within 30 basis points of the Markit CDX North America High Yield Index on March 26, the narrowest gap since Oct. 4.