CHICAGO — The Illinois Finance Authority advanced deals totaling more than $400 million Tuesday to finance projects for the University of Chicago Medical Center, Advocate Health Care Network, the Franciscan Communities, and the Big Ten Conference.
The conduit issuer board also approved an $11.3 million allocation of Midwestern Disaster Area Bonds on behalf of agricultural and food product giant Cargill Inc. The company is tapping the federal program ahead of its Dec. 31 expiration to finance construction of a 300,000 bushel grain elevator in Mercer County. Proceeds will also finance other projects at facilities in Douglas County and Edgar County.
The bonds will not be rated, but Cargill does carry corporate ratings in the mid-single A category. Thornton Farish, Inc. is the underwriter and Kutak Rock LLP the bond counsel.
The state was awarded a $1.5 billion allocation under the $14.6 billion program which permits the use of tax-exempt bonds for qualified privately-owned projects aimed at generating jobs and economic activity in Midwestern counties hurt by weather-related damage in 2008.
Illinois has about $1.38 billion remaining. Cargill has made good use of the program especially in Iowa where the Iowa Finance Authority has granted $200 million of the state’s allocation for the company’s use.
The Big Ten Conference Inc., which regulates inter-collegiate athletic programs, received clearance for its sale of up to $13 million of bonds to finance construction of a new headquarters in Rosemont just outside of northwest Chicago.
The bonds with a final maturity of up to six years would be directly purchased by JPMorgan Chase Bank NA. Schiff Hardin LLP is bond counsel. The conference was founded in 1896 but not incorporated until 1987. It is governed by a 12-member board representing its 12 member institutions.
The conference’s staff — which manages nearly 1,000 broadcast events, provides legislative services and manages 25 championships and tournaments — currently has a headquarters and meeting center located in another northwest suburb Park Ridge.
“The new Big Ten Headquarters, located in Rosemont, with improved access to O’Hare International Airport, will also provide expanded conferencing facilities,” IFA documents read. More space is also needed as staff has grown to 36 from the 24 employed when the Park Ridge facility opened in 1991.
The University of Chicago Medical Center received final approval for up to $75 million in borrowing for renovation and construction costs at its health facilities including a new eight-story parking structure.
The medical center system includes its main facility Mitchell Hospital, a maternity and women’s hospital, and Comer Children’s Hospital.
Bank of America NA will purchase the bonds directly. They are secured by a security interest in the obligated group’s unrestricted receivables.
The medical center carries current underlying ratings in the low-double-A category from all three rating agencies. Melio & Co. advises the hospital and Jones Day is bond counsel.
In affirming the medical center’s rating earlier this year on $756 million of debt, Moody’s Investors Service said the rating reflects “UCMC’s continued favorable operating results, maintenance of good cash on hand, and strong relationship with Aa1 rated University of Chicago,”
“UCMC is issuing more debt than what was planned originally and its debt coverage ratios are stressed at the Aa3 rating level,” Moody’s added of the medical center’s capital plans.
The IFA board gave preliminary approval to the Franciscan Communities Inc.’s issue for up to $160 million in a cross-border financing. The deal will refund debt issued through the Indiana Health Facility Financing Authority and Cuyahoga County, Ohio. It also will generate about $25 million in new money for projects at various facilities.
The borrower intends to issue about $120 million of fixed-rate tax-exempt bonds with another $40 million of variable-rate tax-exempt and taxable securities purchased directly by a bank. The bonds are secured by a gross pledge of the obligated group under and a mortgage or leasehold mortgage.
The publicly issued bonds are expected to be rated in the triple-B category by Fitch Ratings. “Upon completion of the financing, the proposed existing obligated group will operate eight facilities in three states with an aggregate of 1,912 total units, including 511 entrance fee independent living units, 238 rental independent living units, 387 assisted living/sheltered units, and 776 skilled nursing units,” IFA documents rated.
BB&T Capital Markets is the underwriter and Jones Day is bond counsel.
The board also advanced Advocate’s $150 million deal pricing this week with Citi as the lead underwriter. Proceeds will finance a new bed tower at one of its 10 Illinois hospitals and a new outpatient diagnostic and treatment center and cancer center at another.
