LabCorp holders to receive contingent interest on LYONs, 0% convertibles

By Jennifer Chiou

New York, March 12 - Laboratory Corp. of America Holdings (LabCorp) announced that its zero-coupon convertible subordinated notes due 2021 and zero-coupon Liquid Yield Option Notes due 2021 will accrue contingent interest from March 12 to Sept. 18.

The notes will accrue contingent cash interest at a rate of no less than 0.125% of the average market price of a LYON or zero-coupon note for the five trading days ended March 7 in addition to the continued accrual of the original issue discount.

LabCorp said it has determined the contingent interest to be $1.31 per note. It will be payable to holders of record as of Aug. 27.

The payment is slated for Sept. 11.

On Jan. 4, the company announced that the notes will remain convertible for the first quarter.

As already noted, the LYONs are convertible into 13.4108 LabCorp common shares per $1,000 principal amount. There was $590,000 of the LYONs outstanding as of Dec. 31.

If the zero-coupon convertibles are converted, the company will pay cash for the accreted principal amount and stock for the remaining amount, if any.

The LYONs and zero-coupon convertibles are convertible until 5 p.m. ET on March 31.

The Bank of New York is the trustee and conversion agent.

The notes also were convertible for the previous five quarters.

Burlington, N.C.-based LabCorp develops diagnostic technologies through genomic testing.

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