CHICAGO — The Illinois Finance Authority board on Tuesday advanced plans for a series of financings, including the first in the state in seven years to take advantage of the FHA 242 Hospital Mortgage Insurance Program. Another could be the first to tap the state’s Midwestern disaster area bond allocation.

The board gave preliminary approval to Mercy Hospital and Medical Center’s plan to issue up to $80 million of bonds to finance the costs of renovating its birth centers and cardiac units, install a hospital-wide sprinkler and fire alarm system, and other projects. The deal would also refinance a bank note for $35 million.

The 479-bed acute-care facility located just south of downtown Chicago would issue fixed-rate bonds under the Department of Housing and Urban Development’s FHA 242 hospital mortgage insurance program — the first in Illinois since 2003, according to IFA documents.

The program is designed to enable affordable financing of needed health care facilities by providing mortgage insurance to enhance the credit of hospital financings. It insures 99% of the mortgage loan amount, enabling borrowers to achieve up to a double-A debt rating in current market conditions, according to IFA documents. The bonds would carry a final maturity of no more than 28 years. Jones Day is bond counsel and JPMorgan is serving as underwriter.

The board gave preliminary approval to a $21 million issue for KONE Centre Investment Fund LLC in a sale that is expected to be the first in Illinois to take advantage of the state’s $1.5 billion allocation for disaster-area bonds. The state has 18 counties that qualify for the program after their designation as disaster areas due to 2008 flooding and storms.

Congress included the new category of tax-exempt bonds in the Heartland Disaster Tax Relief Act. The program allocates tax-exempt private-activity bonds for eligible projects that don’t count against a state’s volume cap for such bonds in affected counties in Iowa, Wisconsin, Missouri, Illinois, Indiana, Nebraska, and Arkansas. The deadline for issuing bonds is Jan. 1, 2013.

The borrower will use the proceeds to finance a portion of the costs to acquire, construct, and equip an 8-story office and residential building at KONE Court in Moline. The city is located in Rock Island County on Illinois’ western border. A portion of the space will serve as headquarters for KONE Inc., the U.S. operating subsidiary of Finland-based KONE OYJ, an elevator and escalator business.

U.S. Bank NA will purchase the bonds directly. The bonds are being sold with an initial term of seven years that can be extended up to a total of 25 years. They will be issued in a floating-rate mode with an initial weekly remarketing cycle. Greenberg Traurig LLP is bond counsel and Deloitte Tax LLP is an adviser on the transaction.

The IFA board gave final approval to a $5.5 million issue of recovery zone facility bonds for Annex II LLC. The borrower will use the proceeds to finance the construction of a single-story, 75,000-square-foot records storage facility in Monroe County in southwestern Illinois The site is adjacent to Annex I which offers 398,862 square feet, or 9.15 acres, of office and temperature controlled file storage space.

The expansion is needed due to the facility’s contract with the nation’s record-keeper — the National Archives and Records Administration. Monroe County and Randolph Counties agreed to cede their allocations under the federal stimulus program to the IFA in order to pave the way for the financing. Gov. Pat Quinn signed legislation earlier this year that allows counties to pool their allocations.

The bonds will be purchased by United Community Bank. Stifel Nicolaus & Co. is financial adviser.

The board gave preliminary approval to the Chicago Mission Hockey Club’s plan to issue $9.8 million of bonds to finance the acquisition and renovation of the Seven Bridges Arena in Woodridge, just outside Chicago.

The organization is a nonprofit that seeks to promote, encourage, develop, govern, and provide opportunity for amateur skating and ice hockey for boys and girls by hosting youth teams and tournaments. The organization plans to sell floating-rate bonds backed by a letter of credit from American Chartered Bank with a confirming letter of credit possibly from the Federal Home Loan Bank of Chicago. Wells Fargo Securities is the underwriter.

The board also gave preliminary approval to Old Town School of Folk Music Inc.’s proposed issuance of $10 million to finance an expansion of its current facility across the street from its existing building on Chicago’s north side. Some of the proceeds would also refinance taxable loans.

The facility would house additional dance studios, music classrooms and performance space, and is needed to address overcrowding at the popular facility. First Midwest Bank would purchase the bonds directly. The floating-rate bonds would carry an initial term of five years that could be extended to a total of 26 years. Ice Miller LLP is bond counsel.

In other health care transactions, the board gave preliminary approval to Little Company of Mary Hospital’s plan to sell up to $75 million of new-money fixed-rate bonds this fall to finance construction of a new pavilion. The hospital, located in Evergreen Park just outside of Chicago, is rated A by Standard & Poor’s. Jones Day is bond counsel and Barclays Capital is underwriter.

The board also gave preliminary approval for Provena Health to sell up to $85 million later this summer to finance various capital projects. The system that operates six hospitals is considering ­issuing floating-rate bonds with a letter of credit. Provena is rated in the high triple-B category. JPMorgan is underwriter, Kaufman Hall & Associates Inc. is adviser, and Jones Day is bond counsel.

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