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Stalled acquisition deal with Northwestern Memorial leaves Centegra Health's credit rating at risk

Chicago-based Northwestern Memorial HealthCare's stalled acquisition of Centegra Health System has placed the Crystal Lake, Ill.-based institution's investment grade rating at risk, according to The Bond Buyer.

Fitch Ratings placed the three-hospital system on rating watch negative May 2, and noted it may lose its rating altogether if the proposed acquisition by Northwestern Memorial falls through or is delayed further.

The health systems announced the acquisition in 2016 and planned to close the deal the same year. However, the transaction was pushed to 2017 and has reportedly languished as the health systems attempt to resolve several issues.

Centegra and Northwestern Memorial are expected to enter into a definitive agreement within the next month and close the deal in September, the report states.

If completed, the acquisition "should translate to a significant change for Centegra, providing the organization with the resources and enhanced profile needed to remain competitive in this consolidating market and reduce operating expenses through significant synergies with NMH," according to The Bond Buyer citing Fitch Ratings.

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