CHICAGO - OSF Healthcare System in Illinois heads into the market next week after Standard & Poor's on Aug. 31 revised its outlook on its A rating to positive from stable. That followed Moody's Investors Service's upgrade to A2 from A3 a week earlier.

Barclays Capital is the senior manager on the $368 million deal slated to sell next week through the Illinois Finance Authority.

"The rating and outlook revision reflect our assessment of OSF's improved unrestricted reserves, operational improvements in fiscal 2015 to date, dominant business position in the Peoria, Ill., market, and breadth of facilities and services," said Standard & Poor analyst Kevin Holloran.

The system is selling a total of $460 million as it will privately place a taxable series for $94 million. Proceeds of the public offering and privately placed debt will refund existing debt and help fund a new pavilion at OSF's Rockford facility, other capital projects at OSF's Peoria, Bloomington and Galesburg facilities, and reimburse OSF for prior capital expenditures.

Moody's raised the system's $950 million of debt on Aug. 27.

OSF Healthcare System operates eleven acute care hospitals and a multi-specialty physician group of close to 690 physicians. Ten of the system's hospitals are in Illinois. OSF also owns a small critical access hospital in the Upper Peninsula of Michigan.

The bonds are backed by a security interest in the unrestricted receivables of the obligated group, which makes up most of the system. With the new financing, the OSF Multi-Specialty Group will be added to the obligated group.




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