8-KLeadership ChangesMaterial AgreementsFinancial Events+2

CENTENE CORP 8-K Report, Material Agreement (Dec 14, 2017)

Filed December 14, 2017For Securities:CNC

Summary

Centene Corporation (CNC) has filed an 8-K report on December 14, 2017, detailing significant updates regarding its financing and executive compensation. The company has amended and restated its credit agreement to establish a new $1.5 billion unsecured multi-currency revolving credit facility. This facility, maturing in December 2022, provides substantial liquidity and flexibility for future growth and operations, with provisions for incremental loans up to certain leverage ratios. In addition to financing activities, the report also highlights changes in executive compensation for Cynthia Brinkley, President and Chief Operating Officer. These adjustments include an increased base salary, revised short-term and long-term incentive targets, and new restricted and performance stock unit awards, reflecting the company's investment in its key leadership. The company also issued its 2018 financial guidance and confirmed 2017 guidance, with an investor meeting scheduled to discuss these details.

Key Highlights

  • 1Centene has secured a new $1.5 billion unsecured multi-currency revolving credit facility, enhancing its financial flexibility.
  • 2The new credit facility has a maturity date of December 14, 2022.
  • 3The agreement allows for additional incremental loans, subject to leverage covenants, providing room for future expansion.
  • 4Key financial covenants include a minimum fixed charge coverage ratio and a maximum total debt-to-EBITDA ratio.
  • 5Compensation for COO Cynthia Brinkley was adjusted with an increased base salary, higher incentive targets, and new stock awards.
  • 6The company issued its 2018 financial guidance and confirmed 2017 guidance on December 14, 2017.
  • 7An investor meeting was scheduled for December 15, 2017, to discuss financial guidance, including a webcast for remote participants.

Frequently Asked Questions

The $1.5 billion unsecured multi-currency revolving credit facility is intended to provide Centene Corporation with enhanced financial flexibility, liquidity for its operations, and capacity for potential future growth initiatives or acquisitions. It replaces and amends the company's existing credit agreement.

The new credit agreement includes important financial covenants such as a minimum fixed charge coverage ratio and a maximum total debt-to-EBITDA ratio. These covenants are designed to ensure the company maintains a healthy financial position while utilizing the credit facility.

Effective January 1, 2018, Cynthia Brinkley's compensation was updated to include an annual base salary of $850,000, an annual short-term incentive target of 125% of her base salary, and a cash long-term incentive target for the 2018-2020 cycle. She also received grants of restricted stock units and performance stock units, subject to vesting requirements.

On December 14, 2017, Centene Corporation issued its financial guidance for 2018 and confirmed its financial guidance for 2017. Further details were expected to be discussed at an investor meeting held on December 15, 2017.