Orlando Health, whose flagship facility is Orlando Regional Medical Center, shown here, announced Wednesday signing a letter of intent to affiliate with Lakeland Regional Health.

BRADENTON, Fla. – Two of central Florida's largest nonprofit medical facilities announced they have signed a letter of intent to create an integrated regional health care system.

The affiliation between Lakeland Regional Health and Orlando Health was disclosed to bondholders on EMMA Wednesday.

"Today's rapidly changing health care environment is creating exciting ways to improve the health of not only individuals, but of entire populations," Orlando Health Chief Executive Officer David Strong said in the announcement. "With this affiliation, together we will touch more than three million people who will benefit from the shared knowledge and expertise, enhanced service line offerings, and coordinated care provided by our joint efforts."

Both providers said in a joint announcement that developing a regional system would better position them to expand clinical programs, improve access, and enhance the clinical quality of services.

It will also foster the development of an academic graduate medical education program at Lakeland Regional, manage health across the region, and promote joint formation of strategic goals and objectives, they said.

"We expect both organizations' financials to improve with this transaction as a result of growth and savings opportunities to be realized as a $3.4 billion operation," said Orlando Health spokesperson Kena Lewis.

Lewis also said that both organizations will continue to be responsible for their own debt, and that the transaction will strengthen their financial performance.

Orlando Health had $982.3 million of long-term bonds and notes outstanding as of Sept. 30, 2015, according to its latest comprehensive annual financial report.

The bonds, rated A by Fitch Ratings, A2 by Moody's Investors Service, and A by S&P Global Ratings, were issued by the Orange County Health Facilities Authority.

Lakeland Regional had $356.8 million of outstanding bonds as of Sept. 30, 2016, according to its CAFR.

The bonds, issued by the city of Lakeland, are rated A2 by Moody's Investors Service.

The affiliation between the two health systems is expected to be effective Oct. 1 after the completion of due diligence and the execution of a definitive agreement, officials said.

As proposed under the transaction, Lakeland Regional would remain an asset of the city, and would continue to be governed by a board of leaders in the community, with the addition of one director representing Orlando Health.

The board of directors for Orlando Health would remain in position, with the addition of two directors from the Lakeland Regional board.

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