8-KOther EventsExhibits & Filings

CENTENE CORP 8-K Report, Corporate Update (Oct 28, 2016)

Filed October 28, 2016For Securities:CNC

Summary

Centene Corporation (CNC) filed an 8-K on October 28, 2016, reporting an underwriting agreement for a public offering of $1.2 billion in 4.75% senior notes due 2025. The offering, expected to close around November 9, 2016, is a strategic move to optimize the company's debt structure. The primary use of the net proceeds is to refinance existing debt. Specifically, Centene plans to redeem its 5.75% senior notes due 2017 and Health Net, Inc.'s 6.375% senior notes due 2017. Additionally, funds will be used to repay outstanding amounts under its Revolving Credit Facility, cover associated fees and expenses, and for general corporate purposes. This offering signals Centene's proactive approach to managing its financial obligations and potentially lowering its overall interest expense.

Key Highlights

  • 1Centene Corporation entered into an underwriting agreement to sell $1.2 billion of 4.75% senior notes due 2025.
  • 2The offering is expected to close on or about November 9, 2016.
  • 3Proceeds will be used to redeem Centene's 5.75% senior notes due 2017.
  • 4Proceeds will also be used to redeem Health Net, Inc.'s 6.375% senior notes due 2017.
  • 5Funds will be allocated to repay outstanding amounts under Centene's Revolving Credit Facility.
  • 6A portion of the proceeds will cover related fees and expenses.
  • 7Remaining proceeds are designated for general corporate purposes.

Frequently Asked Questions

The primary goal is to refinance existing debt obligations, specifically redeeming Centene's 5.75% senior notes due 2017 and Health Net's 6.375% senior notes due 2017. This is a move to optimize the company's capital structure and potentially reduce interest expenses.

The offering is anticipated to close on or about November 9, 2016, subject to customary closing conditions.

The net proceeds will also be used to repay amounts outstanding under Centene's Revolving Credit Facility, cover associated fees and expenses related to the offering, and for general corporate purposes.

The underwriters include Barclays Capital Inc., Citigroup Global Markets Inc., SunTrust Robinson Humphrey, Inc., and Wells Fargo Securities, LLC, acting as representatives. Evercore Group L.L.C. is acting solely as the qualified independent underwriter.