Moody's lifts RadNet

Moody's Investors Service said it upgraded RadNet Management, Inc.'s corporate family to B2 from B3. The agency also assigned a rating of B2 (LGD3, 33%) to its proposed first-lien credit facilities consisting of a $45 million senior secured first-lien revolving credit facility and a $400 million senior secured first lien-term loan B.

Moody's also affirmed a speculative grade liquidity rating of SGL-2 and probability-of-default rating at B3. RadNet Management is a subsidiary RadNet, Inc.

The outlook has been changed to stable from positive.

Proceeds from the new credit facilities will be used to refinance debt, fund future acquisitions and provide working capital.

The upgrade reflects operating results, stable credit metrics and cost savings after merging with Radiologix, the agency said. The SGL-2 rating reflects its liquidity profile and the expectation that the company will continue to fund all working capital and capital expenditures from operating cash flow.

Moody's said the stable outlook reflects the agency's expectation that the company will continue to grow revenue and cash flow through the expansion of procedure volume in a disciplined manner.

The ratings could be downgraded if the adjusted total debt-to-EBITDA ratio increases above 6.5 times or could be upgraded if it falls below 4.3 times on a sustained basis.

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