8-KMaterial AgreementsFinancial EventsExhibits & Filings

CENTENE CORP 8-K Report, Material Agreement (Feb 11, 2016)

Filed February 11, 2016For Securities:CNC

Summary

On February 11, 2016, Centene Corporation (CNC) announced the issuance of $2.4 billion in aggregate principal amount of senior notes through its wholly-owned subsidiary, Centene Escrow Corporation. This offering comprises $1.4 billion of 5.625% Senior Notes due 2021 and $1.0 billion of 6.125% Senior Notes due 2024. The net proceeds from these notes, along with borrowings from a new senior credit facility, are earmarked to finance the cash consideration for the proposed acquisition of Health Net, Inc., as well as related fees and general corporate purposes. The notes were issued in reliance on Rule 144A and Regulation S, meaning they were sold to qualified institutional buyers and non-U.S. persons, and are not registered under the Securities Act of 1933. The funds from the note issuance have been placed into an escrow account. These proceeds will be released to Centene upon the satisfaction of certain conditions related to the Health Net merger. In the event the merger is not consummated, Centene Escrow Corporation is obligated to redeem the notes at par, plus accrued interest.

Key Highlights

  • 1Centene Corporation issued $2.4 billion in aggregate principal amount of senior notes through its subsidiary, Centene Escrow Corporation, on February 11, 2016.
  • 2The issuance includes $1.4 billion of 5.625% Senior Notes due 2021 and $1.0 billion of 6.125% Senior Notes due 2024.
  • 3Proceeds are intended to fund the acquisition of Health Net, Inc., pay related fees, and for general corporate purposes.
  • 4The notes were issued privately to qualified institutional buyers and non-U.S. persons under Rule 144A and Regulation S, and are unregistered.
  • 5Funds are held in escrow and will be released upon the successful closing of the Health Net acquisition.
  • 6If the acquisition does not close, Centene Escrow Corporation must redeem the notes at 100% of the principal amount plus accrued interest.
  • 7The notes are unsecured senior obligations of Centene and rank equally with existing and future unsecured senior indebtedness, but are not guaranteed by subsidiaries under normal circumstances.

Frequently Asked Questions

The primary purpose of issuing these senior notes is to fund the cash consideration for the proposed acquisition of Health Net, Inc. The proceeds will also be used to pay associated fees and expenses, and for general corporate purposes.

If the acquisition of Health Net is not consummated, Centene Escrow Corporation is required to redeem each series of the notes at a redemption price equal to 100% of the principal amount, plus any accrued and unpaid interest to the redemption date.

The notes will be unsecured senior obligations of Centene Corporation. They are not guaranteed by any of Centene's subsidiaries under normal circumstances, although guarantees may be required in limited future situations as specified in the indentures.

These notes were sold to qualified institutional buyers in reliance on Rule 144A and to non-U.S. persons in reliance on Regulation S. They have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States without registration or an applicable exemption.