S&P rates Radiology Partners notes B-

S&P said it gave Radiology Partners Holdings LLC’s planned $650 million in new senior secured notes a B- rating with a 3 recovery rating. The 3 recovery rating reflects an expectation of meaningful (50%-70%; rounded estimate: 55%) recovery in default. The agency lowered the recovery estimate from 60% due to the overall increase in senior secured debt.

Radiology received approval to acquire Mednax Radiology Solutions for $885 million. It will use the proceeds, $130 million in cash on hand and a $150 million equity infusion to fund the acquisition.

“We expect Radiology Partners to remain highly leveraged. We expect debt-to-EBTIDA leverage of 8.6x in 2021 and 7.9x in 2022. Radiology Partners has been aggressively acquiring companies over the past several years, and we expect it will continue to require debt as the major source of funding for additional acquisitions, keeping it highly leveraged,” S&P said in a press release.

The agency also affirmed Radiology’s B- issuer rating, and the outlook remains stable.

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