CHICAGO – The merger of HealthPartners Inc. with Park Nicollet Health Services won’t have an immediate impact on the credits of either system. as no change is expected in the obligated group backing each organization’s debt, Standard & Poor’s said in a report this week.

The two Minnesota systems announced last week the signing of an agreement to combine operations and oversight boards in a union considered the most significant in the competitive local health care market in years. It could also spawn mergers similar to what has occurred in other major markets as systems seek a competitive edge while grappling with federal reforms and capital challenges. The merger still requires state and federal approval. If cleared, it would take effect in January.

The system would bear the HealthPartners name. HealthPartners chief executive officer Mary Brainerd will lead the system and Park Nicollet’s CEO, David Abelson, would be president.

The merger expands HealthPartners physician clinic offerings while girding the smaller Park Nicollet against competition from other nearby hospitals in larger systems. Park Nicollet also would be included in HealthPartners insurance business.

HealthPartners is based in Bloomington and operates an insurer, dozens of medical and doctors clinics and its flagship facility Regions Hospital. Collectively, they generate $3.9 billion in revenue annually.

Park Nicollet is based in St. Louis Park. It operates more than 25 clinics and its flagship Methodist Hospital, with revenues of $1.2 billion.

Standard & Poor’s rates HealthPartners BBB-plus with a positive outlook and Park Nicollet A with a stable rating. The obligated groups of each system will remain separate for debt purposes, but the union bodes well for each, it said.

“We believe that combining the two entities augments each entity’s business position because both entities operate in complementary markets,” Standard & Poor’s wrote. “We also believe that the increased scale of the combined entity should provide opportunities for realizing cost efficiencies and implementing strategies that better position the organization for health care reform.”

A possible risk is trouble integrating the two practitioner groups. “We do not expect any immediate financial implications but will meet with each organization in the near term to better understand the combined strategy and potential enterprise and financial impacts,” the agency said.

HealthPartners’ positive outlook reflects its sustained strong earnings, and if it is able to maintain its current level of membership while continuing to generate annual returns on revenue of about 3%, it could win an upgrade in the coming year.

Moody’s Investors Service rates HealthPartners’ $280 million of debt A3 with a positive outlook. In revising the outlook last year from stable, Moody’s recognized improved operating performance since fiscal 2010. Park Nicollet has about $400 million of debt.

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