Radiology Partners Inc. has withdrawn a $485 million loan offering intended to fund an acquisition, signaling continued strain in the leveraged loan market. The firm now plans to issue junk bonds instead, according to a source familiar with the matter. Banks led by Barclays Plc. were scheduled to discuss the offering with investors.
The shift comes as borrowing costs rise and investor appetite wanes for riskier debt, particularly amid concerns over the sustainability of the AI boom. Loans with floating rates expose companies to higher costs as inflation concerns push yields upward. Grant Thornton Advisors LLC recently canceled a $500 million euro-denominated loan in favor of bonds for its CBIZ Inc. acquisition.
AVI-SPL scrapped a $690 million refinancing, while Circet and ICG delayed a €3 billion debt deal due to adverse conditions. Envestnet Inc. had to improve terms on a $625 million loan for its Vestmark Inc. purchase. The Radiology Partners loan was offered at up to 4.75 percentage points above the benchmark, with pricing as low as 98 cents on the dollar.
Commitments were due October 14, with bond pricing expected Wednesday.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing