By Paul A. Harris
Portland, Ore., June 12 – Fortrea Holdings Inc. priced a $570 million issue of seven-year senior secured notes (Ba3/BB/BB+) at par to yield 7½% on Monday, according to market sources.
The yield printed at the tight end of the 7½% to 7¾% yield talk. Initial guidance was in the high-7% to 8% area.
The deal was heard to be 6½-times oversubscribed, according to a trader, who added that it broke to 101¾ bid, 102 offered before settling in at 101 3/8 bid, 101¾ offered at the Monday close.
Barclays was the left bookrunner. Joint bookrunners were Goldman Sachs & Co. LLC, BofA Securities Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, MUFG Securities Americas Inc., PNC Capital Markets LLC and Wells Fargo Securities LLC.
Proceeds plus a $1.52 billion credit facility will be used to fund the cash portion of the spinoff of Fortrea from Laboratory Corp. of America (LabCorp). Fortrea will make an expected $1.605 billion cash distribution to LabCorp as partial consideration for the assets to be contributed in the spinoff.
Fortrea is a Durham, N.C.-based contract research organization providing comprehensive phase I through IV biopharmaceutical product and medical devices services.
| Issuer: | Fortrea Holdings Inc.
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| Amount: | $570 million
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| Issue: | Senior secured notes
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| Maturity: | July 1, 2030
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| Left bookrunner: | Barclays
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| Joint bookrunners: | Goldman Sachs & Co. LLC, BofA Securities Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, MUFG Securities Americas Inc., PNC Capital Markets LLC and Wells Fargo Securities LLC
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| Co-managers: | Citizens Capital Markets Inc., TD Securities (USA) LLC, U.S. Bancorp Investments Inc., CIT Capital Securities LLC and Credit Agricole CIB
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| Coupon: | 7½%
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| Price: | Par
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| Yield: | 7½%
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| Spread: | 363 bps
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| First call: | July 1, 2026 at 103.75
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| Trade date: | June 12
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| Settlement date: | June 27
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| Ratings: | Moody’s: Ba3
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| S&P: BB
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| Fitch: BB+
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 7½% to 7¾%
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| Marketing: | Roadshow
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