8-KMaterial AgreementsFinancial EventsOther Events+1

CENTENE CORP 8-K Report, Material Agreement (Apr 29, 2014)

Filed April 29, 2014For Securities:CNC

Summary

Centene Corporation (CNC) filed this Form 8-K on April 29, 2014, to report the entry into a material definitive agreement concerning the public offering and sale of $300 million of its 4.75% senior notes due 2022. The offering was conducted through an underwriting agreement with Barclays Capital Inc., SunTrust Robinson Humphrey, Inc., and Wells Fargo Securities, LLC, among others. The net proceeds from this debt issuance are earmarked for repaying outstanding amounts under Centene's revolving credit facility, covering related fees and expenses, and for general corporate purposes, primarily to fund statutory capital requirements. The issuance of these notes, detailed in an indenture with The Bank of New York Mellon Trust Company, N.A., establishes a new debt maturity of May 15, 2022, with semi-annual interest payments due on May 15 and November 15, starting November 15, 2014. The notes are senior unsecured obligations, ranking equally with existing and future unsecured debt, but are effectively subordinated to any secured indebtedness. The company retains the option to redeem the notes at various premium prices before maturity, and is obligated to offer to repurchase the notes at 101% of principal if a change of control occurs.

Key Highlights

  • 1Centene Corporation successfully completed a public offering of $300 million in 4.75% senior notes due 2022.
  • 2Proceeds will be used to reduce outstanding revolving credit facility balances and for general corporate purposes, including statutory capital funding.
  • 3The new notes mature on May 15, 2022, with interest paid semi-annually on May 15 and November 15.
  • 4The notes are senior unsecured debt, ranking pari passu with existing and future unsecured debt.
  • 5The company has redemption options for the notes prior to maturity, with specified make-whole premiums.
  • 6A change of control provision requires Centene to offer to purchase the notes at 101% of their principal amount.

Frequently Asked Questions

The primary purpose of issuing these $300 million in senior notes is to repay outstanding balances on Centene's revolving credit facility, cover associated fees, and for general corporate purposes, notably to fund statutory capital requirements.

The notes mature on May 15, 2022, carry a fixed interest rate of 4.75% payable semi-annually on May 15 and November 15, are senior unsecured obligations, and rank equally with other senior unsecured indebtedness. They can be redeemed by Centene before maturity, subject to certain conditions and premiums.

In the event of specific types of changes of control at Centene Corporation, the company is obligated to offer to purchase these senior notes from holders at a price of 101% of their principal amount, plus any accrued and unpaid interest.

This issuance increases Centene's long-term debt by $300 million, extending its maturity profile and potentially improving its liquidity by reducing reliance on its revolving credit facility. The notes are unsecured, meaning they are subordinated to any secured debt the company may have or issue in the future.