8-KMaterial AgreementsFinancial EventsExhibits & Filings

CENTENE CORP 8-K Report, Material Agreement (Dec 6, 2019)

Filed December 6, 2019For Securities:CNC

Summary

Centene Corporation (CNC) filed an 8-K on December 6, 2019, to report the issuance of a significant amount of senior notes. The company raised a total of $7 billion across three tranches: $1 billion in 4.75% Senior Notes due 2025, $2.5 billion in 4.25% Senior Notes due 2027, and $3.5 billion in 4.625% Senior Notes due 2029. These notes were offered to qualified institutional buyers and non-U.S. persons in reliance on exemptions from registration requirements. The primary use of proceeds is to finance the cash consideration for Centene's previously announced acquisition of WellCare Health Plans, Inc., along with related fees and expenses. Any remaining proceeds will be used for general corporate purposes, including repaying revolving credit facility borrowings.

Key Highlights

  • 1Centene issued a total of $7 billion in aggregate principal amount of senior notes across three series.
  • 2The notes consist of $1 billion of 4.75% Senior Notes due 2025, $2.5 billion of 4.25% Senior Notes due 2027, and $3.5 billion of 4.625% Senior Notes due 2029.
  • 3The primary purpose of the note issuance is to fund the acquisition of WellCare Health Plans, Inc.
  • 4Proceeds will also be used for related acquisition expenses and general corporate purposes, including revolver borrowings.
  • 5The notes are senior unsecured obligations and are equal in right of payment to existing and future senior indebtedness.
  • 6The issuance included registration rights agreements, obligating Centene to facilitate the exchange or resale of the notes under certain conditions, with potential additional interest payments for non-compliance.
  • 7Special mandatory redemption provisions exist for the 2027 and 2029 notes if the WellCare merger is not consummated by a specified date or is terminated.

Frequently Asked Questions

The primary reason Centene issued these notes is to finance the cash portion of its acquisition of WellCare Health Plans, Inc., as well as to cover associated fees and expenses. A portion of the proceeds will also be used for general corporate purposes and to repay borrowings under its revolving credit facility.

Centene raised a substantial total of $7 billion in aggregate principal amount through the issuance of its senior notes.

No, these notes are designated as senior unsecured obligations of Centene. They rank equally with the company's existing and future senior indebtedness and are senior to any subordinated debt.

If the acquisition of WellCare is not completed by September 26, 2020, or if the merger agreement is terminated before that date, Centene will be required to redeem the 2027 and 2029 notes at their principal amount plus accrued interest. This is known as a special mandatory redemption.