S&P assigns Primedex, loan B

Standard & Poor's said it assigned its B corporate credit rating to Primedex Health Systems Inc. and subsidiary RadNet Management Inc.

The outlook is stable.

In addition, S&P said it gave RadNet's secured $10 million revolving credit facility and $125 million first-lien term loan a B with a recovery rating of 2. Also, the company's $45 million second-lien term loan was rated CCC+ with a recovery rating of 5.

The agency noted the low-speculative-grade ratings on Primedex reflect the company's relatively small presence in the competitive medical imaging field, geographic concentration, reimbursement risk, the limitations of capitated managed care contracts and high debt leverage.

These factors overshadow favorable demand prospects related to the aging population and the benefits of imaging itself, which can preclude more expensive medical procedures, the company's regional hub-and-spoke model and its efficient technology systems.

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