8-KMaterial AgreementsFinancial EventsOther Events+1

CENTENE CORP 8-K Report, Material Agreement (Jan 14, 2015)

Filed January 14, 2015For Securities:CNC

Summary

Centene Corporation (CNC) filed an 8-K on January 14, 2015, reporting on a significant debt offering. The company entered into an underwriting agreement on January 9, 2015, to sell $200 million in aggregate principal amount of its 4.75% senior notes due 2022. These notes are fungible with and an additional issuance to the previously issued $300 million of the same notes, bringing the total outstanding to $500 million. The net proceeds from this offering are earmarked for repaying outstanding amounts under the company's revolving credit facility and for general corporate purposes, including funding statutory capital. This debt issuance indicates Centene's strategy to manage its capital structure, likely to support ongoing operations and potential growth initiatives. The terms of the notes, including their interest rate, maturity date, and redemption provisions, are detailed, as are the covenants within the indenture which govern the company's future financial flexibility. The offering was underwritten by a syndicate of reputable financial institutions, including Citigroup Global Markets Inc., Barclays Capital Inc., SunTrust Robinson Humphrey, Inc., and Wells Fargo Securities, LLC.

Key Highlights

  • 1Centene Corporation issued an additional $200 million of its 4.75% senior notes due 2022.
  • 2The offering was conducted on January 9, 2015, with net proceeds intended for credit facility repayment and general corporate purposes.
  • 3These new notes are fully fungible with and rank equally with the $300 million of the same notes issued on April 29, 2014.
  • 4The total aggregate principal amount of the 4.75% senior notes due 2022 outstanding is now $500 million.
  • 5The notes mature on May 15, 2022, and bear interest at 4.75% per annum, payable semi-annually.
  • 6The indenture includes covenants that restrict the company's ability to incur additional debt, pay dividends, make investments, and sell assets, among other limitations.
  • 7The company has the option to redeem the notes at specified premiums before maturity, particularly before May 15, 2019.

Frequently Asked Questions

The primary purpose of this 8-K filing was to report Centene Corporation's entry into a material definitive agreement for the issuance of $200 million in 4.75% senior notes due 2022.

The net proceeds from the offering are intended to repay amounts outstanding under Centene's revolving credit facility, and the remainder will be used for general corporate purposes, primarily including the funding of statutory capital.

After this offering, the total aggregate principal amount of Centene's 4.75% senior notes due 2022 outstanding will be $500 million ($300 million issued previously plus the new $200 million).

The indenture governing the notes includes covenants that limit Centene's and its restricted subsidiaries' ability to incur additional indebtedness, pay dividends or make other distributions, make investments, sell assets, create certain liens, and engage in other restrictive activities, subject to specified exceptions.