8-KMaterial AgreementsFinancial EventsExhibits & Filings

CENTENE CORP 8-K Report, Material Agreement (Oct 7, 2020)

Filed October 7, 2020For Securities:CNC

Summary

Centene Corporation (CNC) has announced the successful completion of a $2.2 billion underwritten public offering of 3.00% Senior Notes due 2030. The primary purpose of this issuance is to refinance existing debt, specifically the redemption of its 4.75% Senior Notes due 2022, its 5.25% Senior Notes due 2025, and WellCare Health Plans Inc.'s 5.25% Senior Notes due 2025. This strategic move aims to lower the company's overall interest expense and extend its debt maturity profile. The new notes will mature in October 2030 and carry a semi-annual interest payment. The redemption of the older notes is scheduled to occur in late October 2020. While the net proceeds are earmarked for debt redemption, they may be temporarily used for general corporate purposes until then. The offering was made under Centene's existing shelf registration statement, indicating a well-established framework for accessing capital markets.

Key Highlights

  • 1Completed a $2.2 billion public offering of 3.00% Senior Notes due 2030.
  • 2Proceeds will be used to redeem outstanding 4.75% Senior Notes due 2022 and 5.25% Senior Notes due 2025 (including WellCare's notes).
  • 3Refinancing aims to reduce interest expenses and extend debt maturity.
  • 4New notes mature on October 15, 2030, with semi-annual interest payments.
  • 5Redemption of existing notes is scheduled for October 2020.
  • 6The offering was conducted under Centene's effective shelf registration statement (Form S-3ASR).

Frequently Asked Questions

The main purpose of the new notes is to raise capital to redeem and refinance Centene's existing, higher-interest-bearing debt, specifically the 4.75% Senior Notes due 2022 and the 5.25% Senior Notes due 2025 (including those of WellCare Health Plans Inc.). This is expected to lower the company's overall interest expense and optimize its debt structure.

The new notes have a coupon rate of 3.00% and will mature on October 15, 2030. Interest payments will be made semi-annually in arrears on April 15 and October 15, beginning April 15, 2021.

The redemption of the existing notes is scheduled to take place shortly after the closing of the offering. Specifically, the 4.75% Notes and the 5.25% WellCare Notes are set for redemption on October 26, 2020, while the 5.25% Centene Notes will be redeemed on October 9, 2020.

The new 3.00% Senior Notes due 2030 are senior unsecured obligations of Centene Corporation. They rank equally with other existing and future senior indebtedness and are senior to any subordinated indebtedness. However, they are effectively junior to any secured indebtedness to the extent of the value of the collateral securing such debt.