The Massachusetts Health and Educational Facilities Authority Thursday will create a merger committee to move forward with Gov. Deval Patrick's plans to combine the authority with the Massachusetts Development Finance Agency, although market participants worry the initiative may increase borrowing fees.

Having one conduit bonding authority for hospitals, higher educational institutions, cultural organizations, and other nonprofits would eliminate competition between the two agencies and potentially raise borrowing costs. HEFA's fee schedule is less expensive than MassDevelopment's, although both authorities negotiate with clients regarding fees.

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