S&P rates Akumin, loan, notes B-

S&P said it assigned B- ratings to Akumin Inc. and its proposed secured notes and revolver. The agency plans to sell $375 million of senior secured notes due 2025 and to secure a $75 million five-year senior secured revolver. The recovery rating for the secured debt is 3, indicating an expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of default.

Proceeds will be used to refinance its $69 million revolving credit facility ($28 million is currently drawn), $65 million term loan A due 2024 and $265 million term loan B due 2024.

“Our rating reflects the company's small scale of operations and narrow focus on radiology, combined with leverage of about 6x, and an inconsistent record of generating positive free cash flow,” S&P said in a press release.

The outlook is stable.

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