RadNet, Inc. has completed its previously announced proposed amendment of its existing senior secured first lien credit facility and has entered into a new senior secured second lien term loan facility.
The company has amended its existing Credit and Guaranty Agreement (as amended, the "First Lien Credit Agreement"), by and among the company, its wholly-owned subsidiary, RadNet Management, Inc., a California corporation ("RadNet Management"), as the borrower, certain subsidiaries and affiliates of RadNet Management, the lenders party thereto from time to time, and Barclays Bank PLC ("Barclays"), as administrative agent and collateral agent, to provide for, among other things, the borrowing by RadNet Management of $30.0 million of new first lien term loans.
In addition, the company has entered into a Second Lien Credit and Guaranty Agreement (the "Second Lien Credit Agreement"), by and among the company, RadNet Management, as the borrower, certain subsidiaries and affiliates of RadNet Management, the lenders party thereto from time to time, and Barclays, as administrative agent and as collateral agent, pursuant to which RadNet Management has borrowed $180.0 million of new second lien term loans.
RadNet Management has the option of paying interest on the new term loans under the Second Lien Credit Agreement at either (a) the adjusted LIBOR rate plus 7.0% or (b) 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 (a) the adjusted LIBOR rate plus 3.25% or (b) 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 $180.0 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.
Dr. Howard Berger, President and Chief Executive Officer of RadNet, Inc. 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."
"With our first lien term loan due in 2018 and our new second lien term loan due in 2021, we face no near-term maturities. This allows our management time and attention to be dedicated to operating our business and driving strategic initiatives," added Dr. Berger.
On March 20, 2014 RadNet Management received the required consents to amend the indenture governing its Notes in connection with the Tender Offer and the Consent Solicitation. The terms and conditions of the Tender Offer and Consent Solicitation are described in the Company's Offer to Purchase and Consent Solicitation Statement, dated March 7, 2014 (the "Offer to Purchase").
RadNet, Inc. is a leading national provider of freestanding, fixed-site diagnostic imaging services in the United States based on the number of locations and annual imaging revenue. RadNet has a network of 250 owned and/or operated outpatient imaging centers. RadNet's core markets include California, Maryland, Delaware, New Jersey, New York and Rhode Island.