8-KRegulation FDOther EventsExhibits & Filings

CENTENE CORP 8-K Report, Regulation FD Disclosure (May 18, 2011)

Filed May 18, 2011For Securities:CNC

Summary

Centene Corporation (CNC) announced on May 18, 2011, the pricing of a public offering of $250 million aggregate principal amount of 5.75% senior notes due 2017. The offering, expected to close around May 27, 2011, is a strategic move to manage its debt profile and enhance its financial flexibility. The primary use of the net proceeds, estimated at approximately $242 million after deducting fees and expenses, is to redeem Centene's outstanding 7.25% senior notes due 2014. This includes paying the associated call premium. Additionally, a portion of the proceeds will be used to repay outstanding amounts under the company's revolving credit facility, cover related fees and expenses, and the remainder for general corporate purposes. This debt refinancing aims to lower the company's interest expense and extend its debt maturity profile.

Key Highlights

  • 1Centene Corporation priced a $250 million public offering of 5.75% senior notes due 2017.
  • 2The offering is expected to close on or about May 27, 2011.
  • 3Net proceeds are estimated to be approximately $242 million.
  • 4Proceeds will be used to redeem 7.25% senior notes due 2014, including the call premium.
  • 5Funds will also be used to repay amounts outstanding under the company's revolving credit facility.
  • 6Remaining proceeds will cover related fees, expenses, and general corporate purposes.
  • 7This refinancing aims to reduce interest expense and improve the company's debt maturity structure.

Frequently Asked Questions

The primary purpose of this $250 million senior notes offering is to refinance Centene's existing debt. Specifically, the proceeds will be used to redeem the company's 7.25% senior notes due 2014, including paying the call premium, and to repay outstanding borrowings under its revolving credit facility.

The new senior notes will bear interest at a rate of 5.75% per annum and mature on June 1, 2017. The offering was priced at 98.753% of par, resulting in a yield of 6.0%.

Centene expects to receive approximately $242 million in net proceeds from the offering, after deducting underwriting discounts, commissions, and estimated offering expenses.

The 7.25% senior notes due 2014 will be redeemed using a portion of the proceeds from this new offering. This redemption includes paying the applicable call premium.