A higher credit rating would likely cut the interest Presence would have to pay on new loans, although Mr. Orsini said the network has no plans to refinance its existing debt of $1.1 billion.
A higher rating also would be a key sign that the merger, which created the second-largest health care system in the Chicago area, was delivering the higher revenue and lower costs the deal promised when it was announced in July 2011.
Still, while the strategic plan outlined by management seems promising, it's difficult to tell whether the merger will result in better financial performance, said Suzie Desai, associate director in S&P's Chicago office.
“It's all in the execution,” she said.
The two hospital systems currently distribute separate financial reports to bondholders until a planned consolidation into a single obligated group, the legal entity liable for the health system's debts. The process requires bondholder approval.
“This would be the equivalent of marrying your spouse and then taking on his car loan,” said Adam Lynch, vice-president at Principle Valuation LLC in Chicago. “It's one thing to go down the aisle. It's another to sign your name on the line for the Toyota Corolla for $7,000.”
In a hopeful sign, Resurrection and Provena did not report taking any special charges because of merger costs during the second quarter, after racking up more than $18 million.
Presence is on track to realize $54 million in savings from the merger over the next year or two, Mr. Orsini said.
The two systems separately have presented mixed results this year, with Resurrection ahead of budget while Provena was behind, new financial statements show.
Resurrection's operating income rose 137 percent, to nearly $17.9 million, during the first two quarters of 2012, from $7.5 million during the same six-month period in 2011.
Meanwhile, Provena's operating loss was a little more than $5 million between Jan. 1 and June 30, from an operating surplus of $6.6 million during the same six-month period in 2011.
Both systems have seen their cash decline compared with a year ago. Resurrection had 215 days of cash on hand as of June 30, from 225 days a year ago. Provena had just 124 days of cash on hand as of June 30, from 148 days a year ago.
Mr. Orsini said that rather than track each organization separately, he is keeping an eye on the health systems' combined financial performance, “and it is on track.”
Last week the Illinois Finance Authority approved the proposal by Resurrection and Provena to combine their obligated groups, a necessary step to getting bondholders to sign off.
Mr. Orsini said he could not predict how long the process would last.