CHICAGO — The Illinois Finance Authority board advanced borrowing plans Tuesday for three central Illinois hospitals seeking to refund debt or raise funds for new projects, including $400 million for the Carle Foundation’s overhaul of its Urbana campus.

Authority officials noted that issuance is off to a slow start this year. Though 2010 also started slow, it picked up in its second half as borrowers sought to take advantage of expiring federal programs, officials said.

The IFA issued $2.3 billion last year in 46 transactions on behalf of not-for-profit health care and higher education borrowers and for economic development.

The agency sold $4.1 billion in 43 issues in 2009. Health care issuance in Illinois fell to $1.9 last year from $3.6 billion in 2009, according to Thomson Reuters.

Among the business discussed at its meeting Tuesday, the IFA board gave final approval to the Carle Foundation’s sale of up to $400 million of debt.

The bonds will refinance $55 million of taxable debt and notes related to mortgages on two of its facilities, and finance various renovation projects of existing facilities and the construction and equipping a new nine-story heart and vascular institute. 

Construction is expected to begin in July and continue through mid-2013. The foundation received a certificate of need for the projects from Illinois regulators in 2008.

It operates a 325-bed hospital in Urbana, a certified home health agency, a hospice, and a range of other medical-related facilities through affiliates throughout the central Illinois region.

Last April, the foundation acquired the Carle Clinic Association, which includes Health Alliance Medical Plans and various group medical practices. With the new issue, the members of the obligated group will be expanded to include the acquired companies.

Structural details of the deal that is expected to price this spring were not ­finalized. It could include a mix of floating-rate and fixed-rate bonds, depending on market conditions.

Barclays Capital and Goldman, Sachs & Co. are the underwriters, Ponder & Co. is financial adviser, and Jones Day is bond counsel.

The foundation currently carries AA-minus ratings from Fitch Ratings and Standard & Poor’s.

Methodist Medical of Illinois, based in Peoria, won preliminary approval for up to $150 million to refinance a line of credit that was tapped for hospital renovations, to refund outstanding debt from a 1998 issue, and to cover the estimated $15 million cost of terminating a swap.

Methodist operates a 318-bed hospital in Peoria. It also operates a medical group with 39 locations and a nursing college.

The hospital is considering selling a mix of fixed-rate and floating-rate bonds in May.

It currently has an A2 rating from Moody’s Investors Service. Any variable-rate debt would carry a letter of credit from PNC Bank and US Bank.

Morgan Stanley is the underwriter, Ponder is financial adviser, and Jones Day is bond counsel.

The IFA board gave final approval for the Sarah Bush Lincoln Health System’s sale of up to $45 million to refund outstanding bonds from a 1996 issue and to finance the expansion and renovation of its hospital in Mattoon.

The health care provider would privately place the bonds with JPMorgan. The system has an A-plus rating from Standard & Poor’s though the bonds will not carry a public rating.

Ponder is financial adviser and Jones Day is bond counsel.

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