Moody's affirms RadNet

Moody's Investors Service said it affirmed the B2 corporate family rating of RadNet Management, Inc., a subsidiary of RadNet, Inc.

Moody's also affirmed the ratings on the existing first-lien loans at Ba3 (LGD2, 26%), second-lien loans at Caa1 (LGD5, 78%) and speculative grade liquidity rating at SGL-2.

The outlook is stable.

According to the agency, the affirmation of the B2 corporate family rating continues to reflect RadNet's favorable operating results and stable credit metrics.

Ratings are constrained by the potential for continued regulatory and reimbursement scrutiny on the sector and risks associated with RadNet's aggressive acquisition strategy, the agency said.

The company's financial leverage and the industry's capital intensive nature of the industry result in modest interest coverage and free cash flow, Moody's said. While geographic concentration in certain markets benefits the company's operations in several ways, it also leaves the company vulnerable to event risk in those particular markets, the agency said.

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