01—Abstract
Summary
Summary of the 8-K filed September 23, 2024. Cited figures are marked; the original filing is the authoritative source.
On September 23, 2024, Laboratory Corporation of America Holdings (the Issuer) and Labcorp Holdings Inc. (the Company, which guaranteed the notes) entered into a base indenture with U.S. Bank Trust Company, National Association, as trustee, and three supplemental indentures.
Under these agreements the Issuer issued $2.0 billiona of senior notes in a public offering: $650 million of 4.350% Senior Notes due 2030, $500 million of 4.550% Senior Notes due 2032, and $850 million of 4.800% Senior Notes due 2034. Interest is payable semi-annually on April 1 and October 1, beginning April 1, 2025. The notes were sold under an effective Form S-3 shelf registration filed May 17, 2024, and a prospectus supplement dated September 16, 2024.
The Issuer expects net proceeds of approximately $1,982.1 millionb after underwriting discounts and estimated offering expenses. It plans to use the proceeds to redeem or repay its 2.300% Senior Notes due 2024, its 3.600% Senior Notes due 2025, and $350 million of revolving credit facility borrowings, with any remainder used for general corporate purposes. This refinancing shifts near-term maturities into longer-dated debt.
The Indenture and Supplemental Indentures include covenants that, subject to exceptions, limit the Issuer and its subsidiaries' ability to create liens, enter into sale and leaseback transactions, and incur indebtedness or issue preferred stock at the subsidiary level. They also contain customary events of default that could accelerate repayment.
Before each Par Call Date (March 1, 2030, February 1, 2032, and July 1, 2034, respectively), the Issuer may redeem notes at the greater of par or a make-whole price, plus accrued interest. From each Par Call Date onward, redemption is at 100%c of principal plus accrued interest.
02—Key points
Key Highlights
- The Issuer sold $2.0 billion of senior notes in three tranches: $650 million due 2030 at 4.350%, $500 million due 2032 at 4.550%, and $850 million due 2034 at 4.800%.
- Expected net proceeds are approximately $1,982.1 million after underwriting discounts and estimated offering expenses.
- Proceeds are expected to redeem or repay the 2.300% Senior Notes due 2024, the 3.600% Senior Notes due 2025, and $350 million of revolving credit facility borrowings.
- Labcorp Holdings Inc. fully guaranteed the notes, as stated in the filing.
- Interest is paid semi-annually on April 1 and October 1, with the first payment due April 1, 2025.
- The notes contain covenants limiting liens, sale and leaseback transactions, and subsidiary-level indebtedness or preferred stock issuance, subject to exceptions.
- Optional redemption before each Par Call Date is at the greater of 100% of principal or a make-whole premium, plus accrued interest; on or after those dates, it is 100% of principal plus accrued interest.
03—Questions
Frequently Asked Questions
How much debt did the company issue and what are the maturities?
The Issuer issued $2.0 billion of senior notes: $650 million of 4.350% notes due 2030, $500 million of 4.550% notes due 2032, and $850 million of 4.800% notes due 2034.
What will the company do with the proceeds?
The Issuer expects net proceeds of approximately $1,982.1 million. It plans to use them to redeem or repay its 2.300% Senior Notes due 2024, its 3.600% Senior Notes due 2025, and $350 million of revolving credit facility borrowings, with any remaining amount used for general corporate purposes.
Who guarantees the notes?
Labcorp Holdings Inc. guaranteed the notes, as described in the supplemental indentures filed with the 8-K.
When do interest payments occur and when is the first payment?
Interest is payable semi-annually on April 1 and October 1 of each year, beginning April 1, 2025.
Can the company redeem the notes early, and at what price?
Before March 1, 2030 (2030 Notes), February 1, 2032 (2032 Notes), and July 1, 2034 (2034 Notes), the Issuer may redeem notes at the greater of 100% of principal or a make-whole premium, plus accrued and unpaid interest. On or after those dates, the redemption price is 100% of principal plus accrued and unpaid interest.
04—Continue