8-KOther EventsExhibits & Filings

CENTENE CORP 8-K Report, Corporate Update (Feb 11, 2021)

Filed February 11, 2021For Securities:CNC

Summary

Centene Corporation (CNC) announced on February 10, 2021, the pricing of a public offering of $2.2 billion aggregate principal amount of 2.50% Senior Notes due 2031. The company entered into an underwriting agreement with BofA Securities, Inc. and Barclays Capital Inc. as representatives of the underwriters. This offering is part of Centene's strategy to manage its debt obligations. The net proceeds from this new note issuance are intended to fund the repurchase and redemption of its outstanding 4.75% Senior Notes due 2025. Specifically, the funds will be used for the cash tender offer for any and all of the $2.2 billion in 2025 Notes, and to redeem any remaining 2025 Notes not purchased in the tender offer. This move indicates a proactive approach by Centene to refinance its debt, likely aiming for more favorable interest rates or maturity profiles.

Key Highlights

  • 1Centene Corporation priced a public offering of $2.2 billion in 2.50% Senior Notes due 2031.
  • 2The offering was conducted under a registration statement on Form S-3ASR.
  • 3BofA Securities, Inc. and Barclays Capital Inc. acted as the representatives for the underwriters.
  • 4The net proceeds will be used to fund a cash tender offer for its 4.75% Senior Notes due 2025.
  • 5Any 2025 Notes not purchased in the tender offer will be redeemed.
  • 6The company will also pay related premiums, accrued interest, and expenses for the refinancing.
  • 7Pending use, net proceeds may be temporarily allocated to general corporate purposes.

Frequently Asked Questions

The primary purpose of issuing the new 2.50% Senior Notes due 2031 is to refinance Centene's existing 4.75% Senior Notes due 2025. The company plans to use the proceeds to repurchase these older notes through a cash tender offer and redeem any notes not purchased, along with associated costs.

Centene is looking to refinance up to $2.2 billion aggregate principal amount of its 4.75% Senior Notes due 2025. This matches the aggregate principal amount of the new notes being issued.

Centene is issuing $2.2 billion aggregate principal amount of 2.50% Senior Notes due 2031.

By refinancing, Centene is likely aiming to lower its overall interest expense by issuing new notes at a lower interest rate (2.50% compared to 4.75%) and potentially adjust its debt maturity profile. This is a common strategy to improve financial flexibility and profitability.