Credit crunch alters RadNet debt refinancing

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Uncertainties in the liquidity of the credit market have caused outpatient diagnostic imaging center operator RadNet to defer its previously contemplated $445 million debt refinancing, according to the Los Angeles-based firm. Instead, GE Healthcare Financial Services has agreed to arrange for RadNet an incremental $35 million term loan as part of its existing credit facilities, the company said.

The incremental facility will consist of an additional $25 million as part of its first lien Term Loan B and $10 million of additional capacity under RadNet’s existing revolving line of credit. RadNet said the incremental facility will be used to fund certain identified strategic initiatives and for general corporate purposes.

According to Mark Stolper, RadNet’s chief financial officer, the continuing deterioration of the credit markets over the last few weeks, caused by troubles in the sub-prime lending market and other factors, dictate that the company is unable to achieve its original refinancing objectives at this time.

In the past 30 days, many debt financings were cancelled and many of those that were completed were done under terms and conditions much less attractive than desired, Stolper noted.

RadNet owns and operates 138 outpatient diagnostic imaging centers in the United States.