S&P cuts Radiology Partners

S&P said it downgraded Radiology Partners Holdings LLC’s issuer rating to SD, Selective Default, from CC, its secured notes to D from CCC+ and its senior unsecured notes to D from C. The CCC+ rating on the revolver is unchanged.

Radiology Partners completed a transaction that extends the maturities and modifies other terms of its debt obligations. This transaction is in conjunction with raising about $720 million of equity. The proceeds will be used to repay the $380 million balance outstanding on the revolver, $168 million of the term loan, and $68 million of secured notes.

S&P said it views the transaction as distressed and the equivalent of default on the term loan, secured notes, and unsecured notes.

“We believe lenders received less than the original promise of those obligations. However, given the full repayment of the revolver and consideration received, we do not view the modifications to the revolver as tantamount to a default,” the agency said in a press release.

S&P added it plans to reassess Radiology Partners’ ratings over the coming days to reflect the revised capital structure and enhanced liquidity and credit profile.

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