CHICAGO - Illinois-based Advocate Health Care Network is planning a refunding in the coming weeks of as much as $365 million.

The Illinois Finance Authority, which is serving as the issuer for the bonds, signed off on the transaction at its November meeting. Advocate will refund bonds from 2007 and 2008, including bonds sold by Sherman Health System which was acquired by Advocate.

Advocate, the largest not-for-profit system in Illinois with 250 healthcare sites including 10 hospitals, intends to use a fixed-rate structure. Advocate carries ratings in the mid-double-A category from Fitch Ratings, Moody's Investors Service, and Standard & Poor's.

JPMorgan is serving as the underwriter with Loop Capital Markets LLC and Cabrera Capital Markets LLC acting as co-managers. Kaufman Hall is acting as financial advisor and Chapman and Cutler LLP is bond counsel.

Ahead of the sale, Moody's affirmed Advocate's rating on $1 billion of debt. The rating reflects Advocate's size and "good geographic diversity and well positioned individual hospitals, consistent and adequate operating margins, moderate debt levels driving exceptional debt measures, strong and growing investment portfolio, and [fully] funded pension plan," Moody's said.

The system is challenged by an increasingly competitive and consolidating healthcare market, moderate margins compared with Aa2-rated peers, and expected increases in capital spending, although at manageable levels relative to cash flow.

Advocate has steadily expanded its reach with acquisitions. The latest is a pending merger with the Aa2 rated NorthShore University Health System. Moody's described the merger as a credit positive for both organizations. "The systems' aligned strategies, proven management and strong financial resources will position the new organization to meet the challenges of a rapidly changing industry," analysts wrote.

The new entity will be known as Advocate NorthShore Health Partners and operate 16 hospitals with more than $7 billion in annual revenues. The new system would become the nation's 11th largest and serve three million patients annually.

Standard & Poor's on Monday affirmed NorthShore's AA rating and took the credit off its Creditwatch with positive implications. A positive outlook was assigned.

"The positive outlook reflects the announced agreement to merge with Advocate Health Care Network to form Chicagoland's largest health care system, which in our opinion would position it for continued success and further enterprise and financial profile improvement," said Standard & Poor's analyst Martin Arrick.

The rating reflects large employed physician group, a large outpatient presence in a favorable service area, and strong financial improvement in the current year after a somewhat weaker operating performance in 2013.

At its November meeting Friday, the IFA board also approved Naperville-based North Central College's plans to issue up to $65 million in two tranche. The deal will refund variable rate bonds and terminate swap agreements tied to 2008 bonds and raise new money for construction of an art science building.

BMO Harris Bank NA will directly purchase the two series.

The college intends to return to the IFA next year for approval to sell $32 of bonds to finance construction of a new 229 bed residence hall and refund 1999 debt. PNC Bank NA will directly purchase the bonds.

The three series will not carry ratings. The bonds will be secured by the college's unrestricted revenues.

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