RadNet, Inc. (NASDAQ:RDNT) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
Amendment to First Lien Credit and Guaranty Agreement
On August 22, 2017 (the “Amendment Date”), Radnet Management, Inc. (the “Borrower”), a wholly-owned subsidiary of RadNet, Inc. (the “Company”), entered into that certain Amendment No. 5, Consent and Incremental Joinder Agreement to Credit and Guaranty Agreement by and among Borrower, the Company, Barclays Bank PLC, as administrative agent and collateral agent (“Barclays”) and the lenders party thereto, (the “Amendment”) to which the Borrower is amending Borrower’s Amended and Restated First Lien Credit and Guaranty Agreement, dated as of July 1, 2016 (as amended, restated, amended and restated, supplemented or modified from time to time prior to the Amendment Date, the “Existing First Lien Credit Agreement”, and as amended to the Amendment, the “Amended First Lien Credit Agreement”).
The Amendment amends the Existing First Lien Credit Agreement to permit the issuance of $170 million in incremental first lien term loans and provide for the repayment in full of all outstanding second lien term loans and all other obligations under the Company’s Second Lien Credit and Guaranty Agreement dated March 25, 2014. Under the Amended First Lien Credit Agreement, the Company now has approximately $637 million in first lien term loans outstanding and a $117.5 million revolving credit facility (the “Revolving Credit Facility”), which was undrawn as of June 30, 2017.
The Amendment also changes the interest rate margin applicable to borrowings under the Amended First Lien Credit Agreement. As with the Existing First Lien Credit Agreement, borrowings under the Amended First Lien Credit Agreement bear interest at either an Adjusted Eurodollar Rate or a Base Rate (in each case, as more fully defined in the Amended First Lien Credit Agreement), plus an applicable margin. Whereas under the Existing First Lien Credit Agreement the applicable margin for Adjusted Eurodollar Rate borrowings and Base Rate borrowings was 3.25% and 2.25%, respectively,under the Amendment, the applicable margin for Eurodollar Rate loans and Base Rate borrowings will initially be 3.75% and 2.75%, respectively. These rates adjust depending on the Company’s leverage ratio, according to the following schedule:
| First Lien Leverage Ratio | Eurodollar Rate Spread | Base Rate Spread |
| > 5.50x | 4.50% | 3.50% |
| > 4.00x, but ≤ 5.50x | 3.75% | 2.75% |
| > 3.50x, but ≤ 4.00x | 3.50% | 2.50% |
| ≤ 3.50x | 3.25% | 2.25% |
Previously, the applicable margin on the Borrower’s second lien term loans was 7.00% for Eurodollar Rate loans and 6.00% for Base Rate loans.
The Amended First Lien Credit Agreement provides for quarterly payments of principal under the first lien term loans in the amount of approximately $8.3 million, as compared to approximately $6.0 million under the Existing First Lien Credit Agreement. The Amended First Lien Credit Agreement extends the call protection provided to the holders of the first lien term loans issued thereunder for a period of twelve months following the Amendment Date.
The Amendment also amends certain covenants under the Existing First Lien Credit Agreement to provide the Company with additional operating flexibility, including the ability to incur certain additional debt and to make certain additional restricted payments, investments and dispositions, in each case as more fully set forth in the Amendment.
A copy of the Amendment is attached hereto as Exhibit 10.1 and is incorporated herein by this reference. The foregoing descriptions of the Amendment and the Amended First Lien Credit Agreement do not purport to be complete and are qualified in their entirety by reference to Exhibit 10.1.
A copy of the press release issued by the Company related to the Amendment is attached hereto as Exhibit 99.1 and incorporated herein by reference.
| Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The information set forth in Item 1.01 of this report is incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits |
(d) Exhibits
| Exhibit No. | Description |
|
10.1 |
Amendment No. 5, Consent and Incremental Joinder Agreement to Credit and Guaranty Agreement, dated as of August 22, 2017, by and among Radnet Management, Inc., RadNet, Inc., certain subsidiaries and affiliates of RadNet, Inc., the lenders party thereto from time to time, and Barclays Bank PLC, as administrative agent and collateral agent. |
| 99.1 | Press Release dated August 22, 2017 |
RadNet, Inc. ExhibitEX-10.1 2 radnet_ex1001.htm AGREEMENT Exhibit 10.1 Execution Version AMENDMENT NO. 5,…To view the full exhibit click here
About RadNet, Inc. (NASDAQ:RDNT)
RadNet, Inc. is a provider of freestanding, fixed-site outpatient diagnostic imaging services in the United States. The Company operates directly or indirectly through joint ventures with hospitals, approximately 300 centers located in California, Delaware, Florida, Maryland, New Jersey, New York and Rhode Island. Its centers provide physicians with imaging capabilities to facilitate the diagnosis and treatment of diseases and disorders. Its services include magnetic resonance imaging (MRI), computed tomography (CT), positron emission tomography (PET), nuclear medicine, ultrasound, diagnostic radiology (X-ray), fluoroscopy and other related procedures. It operates approximately 140 fixed-site, freestanding outpatient diagnostic imaging facilities in California, over 10 in Delaware, three in Florida, 50 in Maryland, 20 in New Jersey, 20 in the Rochester and Hudson Valley areas of New York, approximately 40 in New York City, as well as five in Rhode Island.