CHICAGO — The Illinois Finance Authority board signed off this week on Centegra Health System's plans to borrow $200 million for a new hospital and an agreement to help the state obtain ratings on a possible financing tied to the proposed Illiana toll road.
The board gave final approval to Centegra's financing for costs associated with the construction and equipping of a new 384,000-square foot, 128-bed acute care hospital facility in the far northwest Chicago community of Huntley. The system currently operates hospitals in McHenry and Woodstock, all far northwest of Chicago.
Centegra Health System is rated BBB-plus with a stable outlook by Standard & Poor's, which recently affirmed the rating. Fitch Ratings affirmed the system's A-minus rating and negative outlook in October.
JPMorgan is underwriter with Kaufman Hall as financial advisor and Chapman and Cutler LLP is bond counsel. Jones Day was originally slated to serve as bond counsel, but its Chicago-based healthcare group of attorneys recently joined Chapman and Cutler.
The board approved a resolution authorizing an intergovernmental agreement with the Illinois Department of Transportation. It paves the way for the agency to work on selecting a rating agency to provide a preliminary rating opinion on a possible financing for the proposed Illiana toll road.
The IFA would serve as the financing arm for an Illiana related borrowing. Illinois has said it would not pursue the project if it does not have sufficient investor interest in what would mark its first public-private partnership project.
Illinois and Indiana are pursuing separate public-private partners to finance the $1.3 billion project. The Illinois DOT in late January announced its final list of qualified developer teams allowed to bid on the Illinois portion of the Illiana. The final group selected would be charged with designing, building, financing, operating and maintaining the state's portion of the road.
The proposed 47-mile highway would link Interstate 55 in Illinois to Indiana's Interstate 65. The two states hope to begin construction in the spring of 2015.
Illinois' developer list includes:
Illiana West Mobility Partners, which includes Cintra Infraestructuras, S.A. and contractors Ferrovial Agroman US Corp and White Construction, Inc.; and Illinois Corridor Connection Group which includes ACS Infrastructure Development, Inc., and Fengate Capital Management, Ltd. and contractors Dragados USA, Inc., F.H. Paschen, S.N. Nielson & Associates, LLC, and William Charles Construction Company, LLC.
Others are Illinois Mobility Partners, with members Fluor Enterprises, Inc., Plenary Group USA Ltd. and contractor Illinois Mobility Constructors (Fluor Enterprises, Inc., Lane Construction Corporation, and Granite Construction Co.); and WM Illinois - Illiana Partners, LLC which includes Meridiam Infrastructure Illiana IL, LLC, and Walsh Investors, LLC and contractor Walsh Construction Company, IL, LLC.
Indiana recently announced its own shortlist of potential partners.
The states are expected to use a financing structure that would rely on a P3 availability payment model with the package possibly including a private activity borrowing component, a Transportation Infrastructure and Innovation Act loan, private equity, and other sources.
The Illinois side of the project is controversial with prominent opponents including Chicago Mayor Rahm Emanuel and several agencies and environmental groups. A recent report from one slammed the project's value to the region and warned that Illinois could be on the hook for as much as $1 billion.
Illinois Gov. Pat Quinn, Indiana Gov. Mike Pence and other supporters defend the project as needed to support the region's traffic, steer trucks off local roads, improve safety, and promote development along its corridor.
