01—Abstract
Summary
Summary of the 8-K filed March 13, 2024. Cited figures are marked; the original filing is the authoritative source.
Humana Inc. (NYSE: HUM) entered into an underwriting agreement on March 11, 2024 with Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, PNC Capital Markets LLC and Wells Fargo Securities, LLC, as representatives of the underwriters, to issue and sell $1,250 milliona of 5.375% Senior Notes due 2031 (sold at 99.940% of principal) and $1,000 million of 5.750% Senior Notes due 2054 (sold at 99.949% of principal).
The offering was completed on March 13, 2024, and the filing states that net proceeds are expected to be approximately $2.226 billionb after underwriters' discounts and estimated offering expenses. The Senior Notes are unsecured senior obligations of Humana, ranking equally with its other unsecured, unsubordinated indebtedness. Interest is payable semiannually on April 15 and October 15, beginning October 15, 2024, and the notes mature on April 15, 2031 and April 15, 2054, respectively.
The notes were issued under a 2003 indenture with The Bank of New York Mellon Trust Company, N.A. as trustee, supplemented by the Twenty-Eighth and Twenty-Ninth Supplemental Indentures dated March 13, 2024. The company intends to use the net proceeds for general corporate purposes, which may include repaying existing indebtedness, including borrowings under its commercial paper program.
The filing also notes that the underwriters and their affiliates have provided commercial banking, investment banking and advisory services to Humana, and that certain affiliates are lenders under its revolving credit facility and 364-day credit facility. The accompanying press releases dated March 11 and March 13, 2024 announced the pricing and closing of the offering.
02—Key points
Key Highlights
- Humana issued $2.25 billion in aggregate principal amount of senior notes: $1.25 billion of 5.375% notes due 2031 and $1.00 billion of 5.750% notes due 2054.
- The 2031 notes were priced at 99.940% of principal and the 2054 notes at 99.949% of principal.
- Estimated net proceeds are approximately $2.226 billion after underwriters' discounts and estimated offering expenses.
- Proceeds are intended for general corporate purposes, which may include repaying existing indebtedness, including commercial paper borrowings.
- The notes are unsecured senior obligations ranking equally with Humana's other unsecured, unsubordinated indebtedness.
- Interest is payable April 15 and October 15 each year, beginning October 15, 2024; maturities are April 15, 2031 and April 15, 2054.
- The offering was registered on Form S-3 (File No. 333-277734) and closed on March 13, 2024.
03—Questions
Frequently Asked Questions
How much debt did Humana raise and in what forms?
Humana sold $2.25 billion in aggregate principal amount of senior notes: $1.25 billion of 5.375% Senior Notes due 2031 and $1.00 billion of 5.750% Senior Notes due 2054.
How much cash will Humana receive from the offering?
The company expects net proceeds of approximately $2.226 billion after deducting underwriters' discounts and commissions and estimated offering expenses.
What will Humana use the proceeds for?
The filing states the proceeds are intended for general corporate purposes, which may include repaying existing indebtedness, including borrowings under its commercial paper program.
When do the notes pay interest and mature?
Interest on both series is payable on April 15 and October 15 of each year, beginning October 15, 2024. The 2031 notes mature April 15, 2031, and the 2054 notes mature April 15, 2054.
What is the ranking of the new notes?
The Senior Notes are unsecured senior obligations of Humana and rank equally with all of its other unsecured, unsubordinated indebtedness.
04—Continue