The debt swaps include exchanging Rad Partners’ senior unsecured notes (due in 2028) for new second lien notes (now due in 2030). Last month, S&P Global Ratings labeled this transaction as a “distressed” debt exchange, with the obligations “highly vulnerable” to nonpayment. Default, ratings analysts claimed, was “expected to be a virtual certainty.”
S&P did not immediately respond to a Radiology Business request for comment Thursday. While agency analysts previously said they planned to classify RP’s modified debt as “distressed,” once the practice finalized its restructuring, they spoke favorably of prospective new investments.
“We expect the capital raise and extension of maturities to alleviate near-term liquidity shortfalls, which will give the company time to resolve the working capital shortfalls, address operational challenges, and start reaping benefits from investment in new sites and cost-saving initiatives,” analysts wrote Jan. 26.
Rad Partners said the financing comes from both new and existing investors. The practice could not immediately provide details on the breakdown of contributors late Thursday.
Kirkland & Ellis and Sidley Austin served as legal counsel to Rad Partners in the transaction, while Moelis & Company and Barclays Capital provided financial guidance. Gibson Dunn and Centerview Partners acted as legal and financial advisors to certain RP lenders.
Radiology Partners employs over 3,600 physicians who service 3,300 hospitals and outpatient facilities across all 50 states. Prior to Thursday’s news, physicians owned about 33% of the company, with private equity firm Whistler Capital, venture capital group New Enterprise Associates and the Australian sovereign wealth Future Fund holding the balance. RP could not provide an updated breakdown of its post-transaction ownership structure as of late Thursday.
This is a developing story. Radiology Business will have further details.
