CHICAGO — The Illinois Finance Authority Tuesday advanced $915 million of bond-financed health care projects across the state of Illinois, including up to $550 million for Hospital Sisters Service Inc.
The board passed the final bond resolution for HSSI, a Springfield-based system with 13 hospitals in Illinois and Wisconsin, all of which will be liable for the debt.
The board’s approval clears the way for the borrower to head to market in September to finance various renovations to existing facilities and construction of a new critical-access hospital in Highland.
HSSI intends to sell $112 million through a direct purchase with JPMorgan Chase NA and issue $101 million of variable-rate bonds supported by a direct-pay letter of credit from BMO Harris Bank.
The hospital will issue another $156 million of variable-rate bonds backed by self-liquidity and $45 million of fixed-rate bonds.
Bank of America Merrill Lynch and BMO Capital Markets are the underwriters.
Ponder & Co. is advising the system and Jones Day is bond counsel.
The deal would refund debt from 2003, 2007 and 2008, and raise new money to finance the costs of renovating certain facilities and construction of a 25-bed critical access hospital in Highland.
Roughly $115 million of the bonds will be used to renovate a Springfield hospital, including the demolition of three buildings, relocation of infrastructure and renovation of four floors to create all-private patient rooms.
“The design facilitates efficient access to patients and improved work flow and will create smaller units that focus on specific disease states such as oncology, neuroscience, etc.,” the IFA said in documents.
HSSI carries ratings of A1 from Moody’s Investors Service and AA-minus from Fitch Ratings and Standard & Poor’s.
The board also gave final approval to a $200 million financing by OSF Healthcare System.
The transaction will refund $120 million of fixed-rate bonds for interest-rate savings and shift $16 million of variable-rate bonds into a fixed-rate mode to eliminate variable-rate debt risk.
Another $26.5 million will be used to permanently finance a line of credit from PNC Bank, and $16 million of new money will be used to reimburse the system for money it spent to build a birthing center in Bloomington.
Barclays is the underwriter. Jones Day is bond counsel and Anne Donahoe is financial advisor. Moody’s rates the system A3, and Fitch and Standard & Poor’s both assign an A.
Lutheran Home and Services Obligated Group, which operates senior-living facilities in suburban Chicago, won preliminary board approval to issue up to $120 million of bonds to finance expansion and renovation of existing facilities, refund variable-rate debt issued in 2001 and 2003, and establish a debt-service reserve fund.
The bonds will be unrated and sold at a fixed rate, according to board documents. They will be secured by a first mortgage on property and equipment and a gross revenue pledge.
SwedishAmerican Hospital won final approval for a $45 million new-money issue that will be used to finance a cancer treatment center and finance upgrades to an existing hospital in Rockford. The system hopes to close the deal by September. Bank of America-Merrill Lynch is underwriter.
SwedishAmerican operates two acute-acre hospitals, in Rockford and Belvidere, Ill, serving patients in northwest Illinois and southern Wisconsin.
Standard & Poor’s is expected to rate the deal A-minus and Fitch is expected to assign an A rating, according to board documents.
