CHICAGO - The Illinois Finance Authority board yesterday advanced more than $500 million in financings, including Hospital Sisters Services Inc.'s $130 million refunding and Resurrection Health Care's $105 million auction-rate restructuring.
Hospital Sisters sought approval to refund its 1998 fixed-rate issue for savings. The system will use a variable rate demand bond structure, providing its own liquidity. The agency is rated AA-minus by Fitch Ratings, AA by Standard & Poor's, and Aa3 by Moody's Investors Service. Merrill Lynch & Co. is the underwriter and Jones Day is bond counsel.
The system, which operates 13 hospitals in Illinois and Wisconsin, is also converting another $165 million of auction-rate bonds through the IFA. Approval for that deal comes under an omnibus resolution approved by the board in March that permits the restructuring without further review of auction-rate securities because of the auction-rate market's collapse earlier this year due to the credit crunch.
Resurrection received approval to refund its $100 million 1999C series of auction-rate securities that carries triple-A insurance from Financial Security Assurance. The hospital system, based in Chicago, will refund the ARS with variable rate demand bonds that will carry letters of credit from JPMorgan Chase Bank and Bank of America.
The system is also converting its series 1999A and B, each for $116 million, from auction-rate to variable-rate demand bonds, but approval for those deals also comes under the March resolution so no further board action was required yesterday.
Resurrection carries an A rating from Fitch, an A-minus from Standard & Poor's, and an A3 from Moody's. The system, the largest Catholic one in the Chicago area with nine hospitals in the city and suburbs, saw a round a downgrades of 2006 and 2007 due to the impact of operating losses at the time. The system has about $700 million of debt outstanding.
The Chicago Symphony Orchestra received approval to sell up to $85 million of variable-rate demand bonds that will be remarketed weekly to retire a line of credit from Northern Trust Co. that was recently tapped to acquire its 2002 insured auction-rate bonds. A letter of credit from The Royal Bank of Scotland PLC will back the new issue. The CSO carries an underlying rating of A3 from Moody's with a positive outlook. Morgan Stanley is the underwriter and Chapman and Cutler LLP is bond counsel.
Lake Forest College sought preliminary approval to sell up to $40 million of new money and refunding bonds. The college will use about $23 million to refund its 1998 bond issue for net present value and restructuring savings as the final maturity will be extended by 10 years. The remainder will provide new money to finance the construction and equipping of a 70,000-square-foot addition to its sports facilities. The college will use a floating rate structure and will seek a bank letter of credit. William Blair & Co.is the underwriter.
DePaul University in Chicago received final approval to issue up to $55 million of revenue bonds to finance the purchase of student housing facilities from MJH Educational Assistance Illinois III LLC. The university wants to exercise its option to now buy a building with 34 units and other dormitories that is has leased from MJH. The university and MJH have a series of agreements on various housing projects under which MJH develops and manages the properties in transactions that are not counted on DePaul's balance sheet.
The university intends to use a fixed-rate structure on the deal with Lehman Brothers serving as the underwriter and Chapman and Cutler serving as bond counsel. DePaul's current ratings are A3 from Moody's Investors Service and A-minus from Fitch. The university will seek a first-time rating from Standard & Poor's in conjunction with the new issue.