Moody's ups LabCorp outlook to positive

Moody's Investors Service said it changed the outlook for Laboratory Corp. of America Holdings to positive from stable.

Moody's said it also affirmed the Baa3 senior unsecured rating on the company's senior debt.

The agency said it had noted on May 12 that there was no immediate impact on LabCorp's rating from the exercise of the company's option to redeem a portion of its convertible debt.

However, the combination of the reduction in leverage from that transaction, the mitigation of the risk of a potential put of those instruments, the continued strong operating results and free cash flow generation of the company, the ability to complete the acquisition of Monogram Biosciences, Inc. with available liquidity, and the expectation that the company could complete the recently announced level of share repurchase authorization without increasing leverage led us to the revise the outlook to positive, the agency noted.

LabCorp's Baa3 senior unsecured rating reflects the company's modest financial leverage, strong interest expense coverage and robust cash flow generation, Moody's said.

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