How much capital did Humana raise and on what terms?

Humana sold $750 million of 5.550% Senior Notes due 2035 at 99.885% of principal and $500 million of 6.000% Senior Notes due 2055 at 98.951% of principal, for total aggregate principal of $1.25 billion. The company estimates net proceeds of approximately $1.231 billion.

What will the company do with the proceeds?

Humana intends to use the net proceeds to repay its 4.500% Senior Notes due 2025 at maturity in April 2025. The remainder is intended for general corporate purposes, which may include repaying existing indebtedness, including borrowings under its commercial paper program.

What are the key terms and payment schedule of the notes?

The notes are unsecured senior obligations that rank equally with the company's other unsecured, unsubordinated debt. The 2035 notes mature May 1, 2035 and the 2055 notes mature May 1, 2055. Interest is payable May 1 and November 1 each year, beginning November 1, 2025. The notes were issued under an indenture dated August 5, 2003 with The Bank of New York Mellon Trust Company, N.A., as trustee.

Which regulatory and operational risks did the company highlight alongside the offering?

The accompanying press releases cite a significant expected decline in Medicare Advantage plans rated 4-star or higher in 2025, with Humana suing to set aside the 2025 Star Ratings and warning of reduced 2026 quality bonus payments. They also reference the Final RADV Rule, which Humana believes violates the Administrative Procedure Act, as well as government regulation, cybersecurity, and benefit expense reserve estimates. Investors are referred to the 2024 Form 10-K for further discussion.

Do the underwriters have other relationships with Humana?

Yes. The filing states that the underwriters and their affiliates have performed commercial banking, investment banking, corporate trust and advisory services for the company for customary fees, and that certain affiliates are lenders under the company's revolving credit facility and 364-day credit facility. The underwriters or their affiliates may also hold the company's existing senior notes.

HUM 8-K: Material Agreements & Financial Events

01—Abstract

Summary

Summary of the 8-K filed March 5, 2025. Cited figures are marked; the original filing is the authoritative source.

Humana Inc. (NYSE: HUM) filed this Current Report on Form 8-K to disclose the issuance of $1.25 billion^a in aggregate principal amount of senior notes.

The offering consisted of $750 million^b of 5.550% Senior Notes due 2035, sold at 99.885% of principal, and $500 million of 6.000% Senior Notes due 2055, sold at 98.951% of principal. The underwriting agreement was entered into on March 3, 2025, and the offering was completed on March 5, 2025. The notes were issued under an indenture dated August 5, 2003 with The Bank of New York Mellon Trust Company, N.A., as trustee, and are unsecured senior obligations ranking equally with the company's other unsecured, unsubordinated indebtedness.

Interest is payable May 1 and November 1 each year, beginning November 1, 2025. The company estimates net proceeds of approximately $1.231 billion^c after underwriters' discounts and estimated offering expenses. Humana intends to use the proceeds primarily to repay its 4.500% Senior Notes due 2025 at maturity in April 2025, with the remainder for general corporate purposes, which may include repaying existing indebtedness such as borrowings under its commercial paper program.

The filing also incorporates the risk factors summarized in the accompanying press releases. These highlight Medicare Advantage Star Ratings declines expected in 2025 (which Humana is contesting in litigation), the Final RADV Rule, government regulation, cybersecurity, and reserve adequacy. Investors are directed to the Form 10-K for the year ended December 31, 2024 for fuller discussion.

02—Key points

Key Highlights

Issued $1.25 billion of senior notes: $750 million of 5.550% notes due 2035 and $500 million of 6.000% notes due 2055
Notes sold at 99.885% (2035) and 98.951% (2055) of principal amount; the underwriting agreement is dated March 3, 2025 and the offering closed March 5, 2025
Estimated net proceeds of approximately $1.231 billion after underwriters' discounts and estimated offering expenses
Proceeds intended first to repay the 4.500% Senior Notes due 2025 at maturity in April 2025, with the remainder for general corporate purposes, including possible repayment of commercial paper borrowings
Notes are unsecured senior obligations ranking equally with the company's other unsecured, unsubordinated indebtedness; interest paid semiannually on May 1 and November 1, beginning November 1, 2025
Press releases flag the expected significant decline in the number of Medicare Advantage plans rated 4-star or higher in 2025, which Humana is challenging in a lawsuit
Risk factors cited include the Final RADV Rule published by CMS on January 30, 2023, which Humana believes fails to adequately address statutory requirements and violates the Administrative Procedure Act

03—Questions

Frequently Asked Questions

How much capital did Humana raise and on what terms?
Humana sold $750 million of 5.550% Senior Notes due 2035 at 99.885% of principal and $500 million of 6.000% Senior Notes due 2055 at 98.951% of principal, for total aggregate principal of $1.25 billion. The company estimates net proceeds of approximately $1.231 billion.
What will the company do with the proceeds?
Humana intends to use the net proceeds to repay its 4.500% Senior Notes due 2025 at maturity in April 2025. The remainder is intended for general corporate purposes, which may include repaying existing indebtedness, including borrowings under its commercial paper program.
What are the key terms and payment schedule of the notes?
The notes are unsecured senior obligations that rank equally with the company's other unsecured, unsubordinated debt. The 2035 notes mature May 1, 2035 and the 2055 notes mature May 1, 2055. Interest is payable May 1 and November 1 each year, beginning November 1, 2025. The notes were issued under an indenture dated August 5, 2003 with The Bank of New York Mellon Trust Company, N.A., as trustee.
Which regulatory and operational risks did the company highlight alongside the offering?
The accompanying press releases cite a significant expected decline in Medicare Advantage plans rated 4-star or higher in 2025, with Humana suing to set aside the 2025 Star Ratings and warning of reduced 2026 quality bonus payments. They also reference the Final RADV Rule, which Humana believes violates the Administrative Procedure Act, as well as government regulation, cybersecurity, and benefit expense reserve estimates. Investors are referred to the 2024 Form 10-K for further discussion.
Do the underwriters have other relationships with Humana?
Yes. The filing states that the underwriters and their affiliates have performed commercial banking, investment banking, corporate trust and advisory services for the company for customary fees, and that certain affiliates are lenders under the company's revolving credit facility and 364-day credit facility. The underwriters or their affiliates may also hold the company's existing senior notes.

04—Continue

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