Summary
Centene Corporation (CNC) announced on May 23, 2018, the issuance of $1.8 billion in aggregate principal amount of 5.375% Senior Notes due 2026. These notes were issued by a wholly-owned subsidiary, Centene Escrow I Corporation, and the proceeds are intended to finance a portion of the cash consideration for the acquisition of substantially all of the assets of New York State Catholic Health Plan, Inc., d/b/a Fidelis Care New York. The remainder of the proceeds will be used for related fees, expenses, and general corporate purposes, potentially including debt repayment.
Key Highlights
- 1Centene issued $1.8 billion in 5.375% Senior Notes due 2026.
- 2Proceeds are earmarked to partially fund the acquisition of Fidelis Care New York.
- 3If the Fidelis acquisition does not close, the notes will be redeemed at 100% of principal plus accrued interest.
- 4The notes are senior unsecured obligations of Centene, ranking equally with existing and future senior indebtedness.
- 5The Indenture includes covenants restricting the company's ability to incur additional debt, pay dividends, sell assets, and engage in certain other transactions.
- 6Redemption provisions allow for early redemption, with varying premium structures depending on the timing.
- 7A change of control event triggers an offer to purchase the notes at 101% of principal.
Frequently Asked Questions
The primary purpose is to secure financing for a portion of the cash consideration required for Centene's previously announced acquisition of substantially all of the assets of Fidelis Care New York.
If the Fidelis acquisition is not consummated, Centene Escrow I Corporation is obligated to redeem all of the Senior Notes at a price equal to 100% of the principal amount, plus any accrued and unpaid interest.
No, the notes are not guaranteed by any of Centene's subsidiaries. Guarantees by subsidiaries would only be required under limited future circumstances as outlined in the Indenture.
The Indenture imposes covenants that limit the company's ability to incur additional debt, pay dividends, make restricted payments and investments, sell assets, create liens, and engage in certain other corporate actions, subject to specified exceptions.