Staff of the California Health Facilities Financing Authority recommended approving a plan to issue $275 million of bonds on behalf of San Diego-based Scripps Health.

The authority was expected to review the staff report at its Dec. 1 meeting.

Because Scripps has requested a series of fixed-rate bonds and a series of variable-rate bonds to be issued by the authority, there will be a separate loan agreement and bond indenture for each series or type of bonds, according to the report.

The underwriters on the bonds are JPMorgan and Barclays Capital.

Scripps exhibits a solid financial position with an operating pro forma debt service coverage ratio of 4.88 times, according to the report.

The cost of the two-year capital improvement program is estimated at $981.8 million.

The improvements include renovations to existing facilities and the purchase of new equipment.

Scripps plans to build a new cardiovascular institute in La Jolla and to expand the emergency department at Scripps Mercy Hospital in order to serve more patients in San Diego and surrounding areas.

Planned improvements include seismic and fire alarm system upgrades.

Scripps Health's total operating revenues have grown significantly by approximately 18% over the review period from around $1.9 billion in fiscal 2008 to $2.2 billion in fiscal 2010, the report said.

In February, Moody's Investors Service upgraded Scripps Health's rating to Aa3 from A1 and assigned a stable outlook.

Fitch Ratings and Standard & Poor's affirmed their AA-minus ratings, also with stable outlooks.

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