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LabCorp Prices $2.9B Offering of Senior Notes

NEW YORK (GenomeWeb) – Laboratory Corporation of America on Thursday priced its offering of $2.9 billion in senior notes.

LabCorp will use the proceeds from the offering to help pay for its $6.1 billion acquisition of contract research firm Covance.

The offering consists of four tranches: $500 million aggregate principal amount of 2.625 percent senior notes due 2020; $500 million aggregate principal amount of 3.2 percent senior notes due 2022; $1 billion aggregate principal amount of 3.6 percent senior notes due 2025; and $900 million aggregate principal amount of 4.7 percent senior notes due 2045.

The notes bear interest from Jan. 30, 2015, payable in semi-annual installments on Feb. 1 and Aug. 1, commencing on Aug. 1 this year. LabCorp expects to close the offer on Jan. 30.

Joint book-running managers for the offering are Merrill Lynch, Pierce, Fenner & Smith; Wells Fargo Securities; and Credit Suisse Securities (USA). The co-managers are Mitsubishi UFJ Securities (USA); Barclays Capital; KeyBanc Capital Markets; PNC Capital Markets; TD Securities (USA); US Bancorp Investments; Credit Agricole Securities (USA); BNY Mellon Capital Markets; and Fifth Third Securities.

The senior notes offering comes around a month after LabCorp amended and restated an existing senior revolving credit facility in the principal amount of $1 billion and entered into a five-year term loan credit facility in the principal amount of $1 billion. The loan credit facility is also expected to be used to help pay for the Covance acquisition.