LabCorp gets $1 billion restated revolver, new $750 million term loan

By Marisa Wong

Morgantown, W.Va., Sept. 15 – Laboratory Corp. of America Holdings entered into a second amendment and restatement of its existing senior revolving credit facility on Sept. 15, according to an 8-K filing with the Securities and Exchange Commission.

The restated $1 billion five-year revolver may be increased by up to an additional $350 million.

The facility also provides for an up to $100 million subfacility for swingline loans and an up to $150 million subfacility for issuances of letters of credit.

Bank of America, NA is acting as administrative agent, swingline lender and a letter-of-credit issuer.

Also on Friday, the company entered into a $750 million five-year term loan with Bank of America as administrative agent.

The entire $750 million was advanced at closing, with about $700 million of the proceeds being used to repay outstanding loans under the company’s prior senior revolver entered into on Dec. 19, 2014.

The new term loan accrues interest at Libor plus a margin ranging from 87.5 basis points to 150 bps. Advances under the restated revolver will bear interest at Libor plus a margin ranging from 77.5 bps to 125 bps. The facility fee under the revolver ranges from 10 bps to 25 bps. The interest margins and the facility fee are based on the company’s senior credit ratings as determined by Standard & Poor’s and Moody’s, which are currently BBB and Baa2, respectively.

Under the restated revolver and new term loan, the company is required to maintain a leverage ratio of no greater than 4.00 to 1.00.

In addition, on Friday the company entered into a third amendment to its existing five-year term loan dated Dec. 19, 2014 with Bank of America as administrative agent.

The company made changes to covenants and technical amendments to make the terms of the existing term loan consistent with those of the new credit facilities. The third amendment does not change any of the pricing terms or the maturity of the existing term loan.

As of Sept. 15, after taking into account the new loan proceeds and subsequent borrowings, about $25 million was outstanding under the amended and restated revolver, with existing letters of credit totaling about $66 million continued under the facility, and $750 million was outstanding under the new term loan.

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

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