Fitch Ratings has revised the basis of the long-term 'AA' rating and assigned a short-term rating of 'F1+' to the Indiana Finance Authority hospital revenue refunding bonds (Indiana University Health Obligated Group), Series 2016B and 2016C. The Rating Outlook is Stable for the long-term rating.

KEY RATING DRIVERS

The long-term 'AA' rating is now based on the higher of the underlying long-term rating assigned to the bonds by Fitch (currently rated 'AA', Stable Outlook), and the long-term rating assigned by Fitch to BMO Harris Bank, N.A. (rated 'AA-', Stable Outlook), the bank providing the irrevocable direct-pay letters of credit (LOCs) securing the bonds, which have an initial stated expiration date of Dec. 18, 2018, unless extended or earlier terminated, during the daily and weekly interest rate mode only. The short-term 'F1+' rating is based solely on the LOC. For information about the underlying credit rating see press release dated Jan. 7, 2016 available at 'www.fitchratings.com'.

The bank is obligated to make regularly scheduled payments of principal of and interest on the bonds in addition to payments due upon maturity, acceleration and redemption, as well as purchase price for tendered bonds. Additionally, the bond obligor is in the flow of funds to make timely payments of principal and interest due upon maturity, acceleration and redemption. Each LOC provides full and sufficient coverage of principal plus an amount equal to 53 days of interest at a maximum rate of 12% based on a year of 365 days and purchase price for tendered bonds, while in the daily and weekly rate modes. The Remarketing Agent for the series 2016B bonds is J.P. Morgan Securities LLC and for the series 2016C bonds is RBC Capital Markets, LLC. The bonds are expected to be delivered on or about Feb. 18, 2016.

Each series of bonds initially bears interest at a weekly rate, but may be converted to a daily, long-term, bond interest term, index, or short-term rate. While bonds bear interest in the weekly rate mode, interest payments are on the first Wednesday of each month, commencing March 2, 2016. The trustee is obligated to make timely draws on the LOC to pay principal, interest, and purchase price. Funds drawn under the LOC are held uninvested and are free from any lien prior to that of the bondholders.

Holders may tender their bonds on any business day, provided the trustee and remarketing agent are given the requisite prior notice of the purchase. The bonds are subject to mandatory tender: (1) upon conversion of the interest rate mode; (2) upon expiration, substitution or termination of the LOC; (3) following receipt of written notice from the bank of an event of default under the Reimbursement Agreement, and (4) following receipt of notice from the bank that the interest component will not be reinstated directing such mandatory tender. The bank has the option of directing acceleration rather than a mandatory tender upon an event of default under the Reimbursement Agreement or non-reinstatement of LOC interest. Optional and mandatory redemption provisions also apply to the bonds. There are no provisions for the issuance of additional bonds.

Bond proceeds will be used to refund a portion of the outstanding Indiana Health and Educational Facility Financing Authority hospital refunding revenue bonds, (Clarian Health Obligated Group), series 2006B.

RATING SENSITIVITIES

The long-term rating is tied to the Fitch long-term rating assigned to the bonds and the long-term rating that Fitch maintains on the bank providing the LOC. Changes to one or both of these ratings may affect the long-term rating assigned to the bonds.

The short-term rating is exclusively tied to the short-term rating that Fitch maintains on the bank providing the LOC and will reflect all changes to that rating.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria

Rating Guidelines for Letter of Credit-Supported Bonds and Commercial Paper (pub. 21 May 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=866152

U.S. Municipal Structured Finance Criteria (pub. 23 Feb 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=862222

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=998237

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=998237

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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