Moody’s ups LabCorp view to stable

Moody's Investors Service said it changed the outlook of Laboratory Corp. of America Holdings (LabCorp) to stable from negative and affirmed its Baa2 senior unsecured rating.

Moody’s said the outlook change reflects its expectation that LabCorp's credit metrics will improve as the company continues to integrate the acquired operations of Covance Inc. and repay debt incurred to complete that transaction.

The affirmation of the Baa2 senior unsecured rating reflects the agency’s expectation that debt to EBITDA will decline to closer to 3 times over the next 12 to 18 months as the company approaches its stated leverage target of 2.5 times. While Moody's anticipates that LabCorp will continue to pursue acquisitions, it expects that earnings growth and debt repayment will result in improved credit metrics.

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