Barclays Agents RadNet Facility Amendment
RadNet announced the company completed its previously announced proposed amendment of its existing senior secured first lien credit facility and entered into a new senior secured second lien term loan facility. Barclays acted as administrative agent and collateral agent.
The company and its wholly owned subsidiary, RadNet Management, RadNet Management affiliates and Barclays Bank amended its existing credit and guaranty agreement to provide for, among other things, the borrowing by RadNet Management of $30 million of new first lien term loans.
RadNet Management has the option of paying interest on the new term loans under the second lien credit agreement at either the adjusted LIBOR rate plus 7.0% or the base rate plus 6.0%. The interest rates payable on the new term loans under the first lien credit agreement are the same as the rates currently payable under the first lien credit agreement, which are the adjusted LIBOR rate plus 3.25% or the base rate plus 2.25%. The adjusted LIBOR rate has a minimum floor of 1.0% on both the first lien term loans and the second lien term loans. In addition, RadNet Management has paid certain customary fees in connection with obtaining this financing.
The obligations of RadNet Management under the first lien credit agreement and the second lien credit agreement are guaranteed by the company, all of RadNet Management’s current and future wholly owned domestic subsidiaries and certain of its affiliates. The obligations are secured by substantially all of the assets of RadNet Management, the company and such subsidiaries and affiliates and by a pledge of the equity capital of RadNet Management and such subsidiaries.
After giving effect to this new senior debt financing, RadNet Management has approximately $415.3 million of senior secured first lien term loans outstanding under the first lien credit agreement and $180 million of senior secured second lien term loans outstanding under the second lien credit agreement. In addition, the company has access to a $101.3 million first lien revolving loan facility, which as of December 31, 2013 was undrawn.
Proceeds from the new first lien term loans and second lien term loans will be used in part to finance the payment of total consideration payable to holders of RadNet Management’s $200 million in aggregate principal amount of 10 3/8% senior notes due 2018 in connection with its previously announced offer to purchase any and all of its notes through a tender offer and the related solicitation of consents to amend the indenture governing the notes, and any related fees and expenses. In addition, proceeds will also be used to pay fees and expenses related to the transaction and for general corporate purposes.
Dr. Howard Berger, president and CEO of RadNet, noted, “We are very pleased to announce the completion of our refinancing transaction. We have successfully replaced our senior unsecured notes with a second lien term loan and additional borrowings under our existing credit facility, resulting in lower cash interest obligations of approximately $5.1 million per year. Additionally, the refinancing provides us with more operating flexibility and lengthens the maturity of our most junior debt capital.”
RadNet is a national provider of freestanding, fixed-site diagnostic imaging services.