American Physician Partners buys time to settle outstanding debts

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(Bloomberg) – American Physician Partners lenders have given the emergency medical personnel company more time to repay its delinquent loans following the collapse of a refinancing deal last month, according to reports. people familiar with the subject.

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The extension came after the company, jointly owned by its member doctors, management and Brown Brothers Harriman & Co., suspended a leveraged loan sale. The package was designed to replace funding that expired on December 21.

American Physician sought to raise $520 million to cover its existing debt and fund planned acquisitions, but struggled to attract investors even after making creditor-friendly changes to terms and sweetening prices.

Representatives for American Physician, based in Brentwood, Tenn., did not respond to a request for comment, while Brown Brothers Harriman declined to comment. Reorg previously reported on the loan extension.

Default risk

American Physician had about $472 million to pay last month, according to a Dec. 13 rating from S&P Global Ratings, which downgraded its debt rating to CCC — due to high risk of near-term default.

The company provides emergency medicine and medication management services to hospitals and health systems; about 88% of its revenue comes from medical staffing for emergency rooms, according to S&P. Volume has recovered in recent quarters after demand suffered during the pandemic as patients shun large hospitals, S&P said.

But the company’s loan offer has been clouded by concerns over the No Surprises Act, a federal law that took effect in January that protects consumers from unexpected large bills when receiving emergency services and out-of-network care. It also creates an arbitration process between insurers and providers to resolve payment disputes.

The legislation could weigh on the company’s revenue depending on the percentage of its out-of-network patients, billing practices and arbitration process, Moody’s Investors Service wrote in November.

American Physician generates about $651 million in annual revenue, with Texas, Florida, Tennessee and Arizona accounting for more than 60% of its profits, according to Moody’s. The company has approximately 155 contracts with health systems in 17 US states.

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