CHICAGO — The Illinois Finance Authority board gave a green light to two health care financings and renewed its executive director’s appointment for another year.
The board signed off on Elmhurst Memorial Hospital’s plan to refund up to $200 million of variable-rate bonds from a 2008 issue. The debt will be directly placed with JPMorgan Chase Bank NA and PNC Bank NA and will not be rated.
JPMorgan will purchase $125 million and PNC will purchase the other $75 million.
The initial interest rate is expected to be between 1.00% and 1.50% depending on the London Interbank Offered Rate at the time of closing.
Elmhurst carries public ratings of BBB and a stable outlook from Fitch Ratings and an equivalent Baa2 with a negative outlook from Moody’s Investors Service. Jones Day is bond counsel.
The board also approved the Memorial Medical Center’s proposed $140 million sale to finance the acquisition, construction and remodeling tied to major expansion projects at its main hospital and teaching facilities. MMC is part of the Memorial Health System.
The system, which serves central Illinois, owns a 471-bed hospital in Springfield and several affiliates, including Abraham Lincoln Memorial Hospital and Taylorville Memorial Hospital, which are critical-access hospitals located in Lincoln and Taylorville.
The bonds will be secured by a pledge of the obligated group and a security interest in pledged revenues.
The system is currently rated A1 by Moody’s and A-plus by Standard & Poor’s.
The expansion projects include the construction of three additional levels totaling 115,000 gross square feet.
“This expansion will take MMC to all medical-surgical private rooms without changing the total number of available beds. In addition, the main entrance and lobby will be renovated. The estimated cost is $63.8 million,” IFA documents read. The main operating area will also be expanded at a cost of about $31.4 million.
The system is also building a new four-story facility at a cost of $36.1 million to serve as the Memorial Center for Learning and Innovation.
“The MCLI will allow MMC to enhance education and training capabilities for staff and physicians and strengthen the relationship with Southern Illinois University,” IFA documents read. A portion of the facility may not qualify for tax-exempt financing and will be funded by the system.
The bond proceeds also will finance renovations to an existing energy plant and other infrastructure work.
The system intends to issue a fixed-rate Series A in a public offering. It will return for IFA approval early next year on a subsequent Series B floating-rate paper that would be directly purchased by one or more lenders.
Piper Jaffray & Co. is underwriter and Jones Day is bond counsel.
The board also approved the reappointment of IFA executive director Christopher Meister to another one-year term.
The board also received a briefing on the agency’s $134.5 million state revolving fund sale last month.
The deal’s all-in cost was 1.87 % and a total of $308 million in retail, sealed bids and institutional orders.
While the top-rated bonds sold at a spread to the triple-A Municipal Market Data benchmark, officials attributed it to the lack of a state income-tax exemption and the traditional spread between state revolving fund bonds and benchmarks, and not the so-called Illinois penalty tacked on to most deals tied to the state.