LabCorp prepays 60-day $400 million bridge loan used for Covance buy

By Toni Weeks

San Luis Obispo, Calif., March 16 – Laboratory Corp. of America Holdings said it paid in full its 60-day $400 million term loan bridge credit facility arranged on Feb. 13 with Bank of America, NA as administrative agent, according to an 8-K filing with the Securities and Exchange Commission.

The facility was provided for financing a portion of the cash consideration and fees and expenses related to the company’s acquisition of Covance Inc. on Feb. 19. The full $400 million was advanced on the same day.

The company prepaid the bridge facility without penalty, and the credit agreement was terminated on March 16.

As previously reported, the interest rate was 125 basis points to 200 bps, with the exact margin based on the company’s credit ratings. LabCorp was also required to pay a delayed commitment fee of 25 bps of any principal amount outstanding on the 30th day following closing.

The bridge facility was subject to mandatory prepayment upon the receipt of net cash proceeds from certain asset dispositions, debt issuances or equity issuances.

Under the loan terms, the company had to maintain a leverage ratio of no greater than 4.75 to 1.00 with respect to the last day of each fiscal quarter following the closing date.

Burlington, N.C.-based LabCorp develops diagnostic technologies through genomic testing. Covance, whose headquarters have been combined with LabCorp’s, is a drug development services company.

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