8-KMaterial AgreementsOther EventsExhibits & Filings

QUEST DIAGNOSTICS INC 8-K Report, Material Agreement (Mar 17, 2014)

Filed March 17, 2014For Securities:DGX

Summary

Quest Diagnostics Incorporated (DGX) has filed an 8-K report detailing a significant financing transaction. On March 17, 2014, the company issued $300 million in 2.700% Senior Notes due 2019 and $300 million in 4.250% Senior Notes due 2024, totaling $600 million in aggregate principal amount. These notes are senior unsecured obligations and rank equally with other existing and future senior unsecured debt. The issuance was made under an existing indenture, as supplemented by a sixteenth supplemental indenture dated March 17, 2014. The indenture includes covenants that may restrict the company's ability to take certain actions, such as creating liens, entering into sale and leaseback transactions, consolidating assets, incurring indebtedness of non-guarantor subsidiaries, and making restricted payments. Importantly, the notes include a change of control provision requiring the company to offer to repurchase the notes at 101% of their principal amount plus accrued interest in the event of a change of control triggering event.

Key Highlights

  • 1Quest Diagnostics issued $600 million in new senior unsecured notes on March 17, 2014.
  • 2The issuance comprises $300 million of 2.700% Senior Notes due 2019 and $300 million of 4.250% Senior Notes due 2024.
  • 3Interest payments on the notes are semi-annual, due April 1 and October 1, with the first payment on October 1, 2014.
  • 4The notes mature on April 1, 2019 (2019 Notes) and April 1, 2024 (2024 Notes).
  • 5The issuance is governed by an existing indenture, supplemented by a sixteenth supplemental indenture.
  • 6Covenants in the indenture place restrictions on company actions, including liens, sale-leasebacks, asset transfers, and indebtedness.
  • 7A 'change of control' clause mandates an offer to repurchase notes at 101% of principal plus accrued interest if a triggering event occurs.

Frequently Asked Questions

This 8-K filing reports on the entry into a material definitive agreement, specifically the issuance of $600 million in senior notes. It also announces related events such as a press release about the offering and the underwriting agreement.

Quest Diagnostics issued $300 million of 2.700% Senior Notes due 2019 and $300 million of 4.250% Senior Notes due 2024. These are senior unsecured obligations with semi-annual interest payments beginning October 1, 2014.

The indenture contains covenants that limit Quest Diagnostics' and its subsidiaries' ability to create liens, engage in sale and leaseback transactions, merge or transfer substantially all assets, incur debt at non-guarantor subsidiaries, and make restricted payments. These covenants are designed to protect noteholders by maintaining the company's financial health and asset base.

If a change of control triggering event occurs, as defined in the indenture, Quest Diagnostics is required to make an offer to purchase the new notes from the holders at a price equal to 101% of their principal amount, plus any accrued and unpaid interest.