8-KMaterial AgreementsExhibits & Filings

QUEST DIAGNOSTICS INC 8-K Report, Material Agreement (Nov 18, 2009)

Filed November 18, 2009For Securities:DGX

Summary

Quest Diagnostics Incorporated (DGX) filed an 8-K report on November 18, 2009, to announce a significant financing event. The company issued a total of $750 million in senior unsecured notes to enhance its capital structure. Specifically, $500 million of 4.750% Senior Notes due 2020 and $250 million of 5.750% Senior Notes due 2040 were issued. These notes are senior unsecured obligations of the company, ranking equally with other senior unsecured debt. The indenture governing these notes includes covenants that may restrict the company's ability to incur certain liens, engage in sale and leaseback transactions, merge, or transfer assets. Importantly, upon a change of control triggering event, Quest Diagnostics will be required to offer to repurchase the notes at 101% of their principal amount plus accrued interest. This issuance provides the company with long-term debt capital, with specific maturity dates and interest rates detailed.

Key Highlights

  • 1Quest Diagnostics issued $500 million in 4.750% Senior Notes due 2020.
  • 2Quest Diagnostics issued $250 million in 5.750% Senior Notes due 2040.
  • 3The total aggregate principal amount of notes issued is $750 million.
  • 4The Notes are senior unsecured obligations of the Company.
  • 5The Indenture includes covenants limiting the company's ability to create liens, enter into sale and leaseback transactions, merge, transfer assets, and make restricted payments.
  • 6A change of control triggering event requires the Company to offer to repurchase the Notes at 101% of their principal amount plus accrued interest.
  • 7The issuance of these notes occurred on November 17, 2009, and was reported on November 18, 2009.

Frequently Asked Questions

The primary purpose of this 8-K filing was to announce the entry into a material definitive agreement regarding the issuance of $750 million in senior unsecured notes, comprising $500 million of 4.750% Senior Notes due 2020 and $250 million of 5.750% Senior Notes due 2040.

The Notes bear interest at 4.750% for the 2020 series and 5.750% for the 2040 series, payable semi-annually. They are senior unsecured obligations of Quest Diagnostics, ranking equally with existing and future senior unsecured debt. The governing indenture includes covenants restricting certain financial actions and mandates an offer to repurchase the notes at 101% of par value plus accrued interest upon a change of control.

This issuance adds $750 million in long-term debt to Quest Diagnostics' balance sheet. While it provides capital, the associated indenture imposes restrictions on certain corporate actions, such as asset sales, mergers, and further liens, and includes a change of control put option, which could increase financial obligations under specific circumstances. Investors should review the indenture for detailed covenant information.