Moody’s gives US Radiology, loans B3

Moody’s Investors Service said it gave a B3 corporate family rating and B3-PD probability of default rating to US Radiology Specialists, Inc. Moody’s also assigned B3 ratings to the company’s senior secured first-lien term loan and revolving credit facility. US Radiology and US Outpatient Imaging Specialists, Inc. will be co-borrowers of the proposed credit facility.

“USRS’ B3 CFR reflects its moderate scale, high leverage and execution risk associated with an active debt-funded acquisition strategy. Further, USRS has some geographic concentration with Texas, North Carolina and Georgia representing more than 70% of consolidated revenues. Moody’s estimates that the company’s pro forma debt/EBITDA at the close of the refinancing transaction, including certain add-backs for transaction expenses and estimated contributions from acquisitions, will approximate 6.4 times,” Moody’s said in a press release.

Loan proceeds will be used to refinance about $619 million of debt, finance three near-term acquisitions, provide capacity for future acquisitions, and cover transaction-related expenses.

The outlook is stable, reflecting the view USRS will keep its leverage in the 6x-7.5x range, Moody’s said.

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