Radiology Partners’ debt holders weighing options with attorneys following credit downgrade

A group of Radiology Partners’ debt holders is reportedly discussing their options with attorneys after S&P recently downgraded the imaging industry giant’s credit rating.

The lenders, which represent half of RP’s $1.6 billion term loan, recently held talks with lawyers at Gibson Dunn & Crutcher, Bloomberg Law noted, citing anonymous sources. As reported by Radiology Business last week, the El Segundo, California, provider group’s obligations total some $3.37 billion, with a sizable chunk coming due in 2025.

Rad Partners’ loan hit a recent low of 72 cents on the dollar, according to Bloomberg-compiled data, down from 80 cents in April. S&P downgraded Rad Partners’ rating on June 5 from B- to CCC+, a “speculative grade” denoting its debts are “currently vulnerable and dependent on favorable business, financial and economic conditions” to meet commitments.

“Lower-rated companies looking to refinance loans are facing challenges, in part because collateralized loan obligations—the biggest buyers of the debt—are restricted from putting money to work,” Bloomberg noted.

RP declined to comment on the report, which included the same statement sent to Radiology Business last week:

“Notwithstanding the economic and policy headwinds that radiology practices face and must be addressed, we remain committed to adapting to the current environment by reducing debt and strengthening our balance sheet through organic [earnings before interest, taxes, depreciation and amortization] growth," a spokesperson said.

Read the rest of the report from Bloomberg Law (subscription required):