S&P lowers LabCorp

Standard & Poor's said it lowered Laboratory Corp. of America Holdings (LabCorp) by one notch, including its corporate credit rating, which was lowered to BBB from BBB+.

The outlook is stable.

The downgrades reflect the company's more aggressive financial policy, said Gail Hessol, an S&P analyst.

The agency said it previously believed that LabCorp had about $500 million of additional debt capacity at the BBB+ corporate credit rating. The company's newly stated target of 2.5x reported debt-to-EBITDA implies an incremental $1 billion of debt without any incremental EBITDA, S&P said.

The ratings reflect the company's satisfactory business risk profile as a low-cost U.S. provider of clinical laboratory services, recognizing its superior operating efficiency, track record of relatively strong and fairly stable profit margins, the agency said.

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