RadNet closes more than $1B debt refinancing transaction
RadNet Inc. has closed its more than $1 billion in previously announced debt refinancing transactions, the Los Angeles-based imaging center operator announced Thursday.
The company is replacing a $679 million term loan originally due in 2028 with a new $875 million credit vehicle now maturing in 2031. RadNet also is refinancing an undrawn $195 million revolving credit line coming due in 2026, replacing that with a $282 million credit line due in 2029.
Leaders said previously that the publicly traded provider—which owns or operates 377 outpatient imaging centers and counting—will use the proceeds to fuel growth. RadNet recently announced its entrance into the Houston market, and it has already acquired 13 locations in America’s fourth largest city.
RadNet can choose for the $875 million term loan to carry an interest rate of either term (with a floor of 0%) plus 2.5% or the prime rate plus 1.5%. The revolving credit line, meanwhile, will also start at term (0% floor) plus 3% or the prime rate plus 2%.
Along with fueling future growth, the refinancing will pay off the $679 million outstanding balance (as of December 2023) and any accrued interest. About $168 million, after subtracting nearly $134 million in accrued interest, will go directly to RadNet’s balance sheet, according to an April 18 announcement. RadNet will need to make quarterly payments of principal on the term loan of about $2.2 million versus $1.8 million under the previous agreement, the company revealed in an SEC filing.
Barclays Bank, Banco Santander, Capital One, J.P. Morgan Chase Bank, Mizuho Bank and Wells Fargo acted as joint bookrunners and lead arrangers in the transaction.
Prior to closing, ratings agencies S&P and Moody’s reacted favorably to the proposed transaction, highlighting RadNet’s strong trio of revenue growth, competitive position and liquidity.
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.