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Merge Healthcare Incorporated. Message Board

  • micro00 micro00 Mar 15, 2013 9:17 AM Flag

    street comment

    Refinancing of high cost debt. MRGE currently carries $252M of 11.75% notes (~12.25% fully
    loaded) which equates to interest payments in excess of $30M annually (compares to our 2013
    adjusted EBITDA of $60.5M). Early repayment penalties make refinancing prior to May 2013
    unlikely, but we would expect MRGE to take action thereafter. In today’s market, we believe MRGE
    could refinance its current debt at 7%-9% (we model 8%). Clearly, numerous scenarios could play
    out, but we view a debt refinancing event at lower rates by mid-2013 as likely, even though a most
    Street models do not include.
    Stage 2 Meaningful Use adoption. We believe recently finalized Stage 2 requirements will aid
    MRGE in two ways. First, we expect renewed HCIT investment as eligible providers and
    organizations make buying decisions and begin planning for Stage 2 implementation and second,
    we believe optional imaging components contained in Stage 2 rules will catalyze growing demand

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