Moody's rates Quest notes Baa2

Moody's Investors Service said it assigned a Baa2 rating to the proposed offering of senior unsecured notes of Quest Diagnostics Inc.

There are no changes to Moody's existing ratings on Quest, including its Baa2 senior unsecured long-term rating.

The outlook remains stable.

The proceeds of the offering will be primarily used to refinance $300 million in bonds due in April 2019, outstanding indebtedness under its secured receivables credit facility and for general corporate purposes, Moody's said.

The proposed offering does not have a material effect on Quest's financial leverage, the agency said.

The ratings are supported by the company's significant scale and leading position in the highly fragmented U.S. laboratory sector, Moody's said.

Quest has a long track record of maintaining modest financial leverage and generating stable cash flows, which Moody's said it expects to continue, the agency said.

The ratings are constrained by Quest's near-total concentration in the U.S. laboratory sector, which will continue to be challenged by low volume growth and pricing pressure, Moody's said.

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