On November 21, 2019 Centene Corporation (NYSE: CNC) ("Centene" or the "Company") reported that it has priced its offering of $7,000,000,000 aggregate principal amount of senior notes (Press release, Centene , NOV 21, 2019, View Source [SID1234551597]). The $7,000,000,000 of senior notes will include $1,000,000,000 aggregate principal amount of additional 4.750% senior notes due 2025 (the "Additional 2025 Notes") at a premium to yield 3.76%, $2,500,000,000 aggregate principal amount of new 4.250% senior notes due 2027 (the "2027 Notes") at a discount to yield 4.375% and $3,500,000,000 aggregate principal amount of new 4.625% senior notes due 2029 (the "2029 Notes" and, together with the Additional 2025 Notes and the 2027 Notes, the "Notes"). The Additional 2025 Notes will have the same terms as the Company’s existing 4.750% senior notes due 2025 (the "Existing 2025 Notes"), other than the issue date, the issue price, transfer restrictions, certain related registration rights and certain other limited exceptions. The Additional 2025 Notes will initially constitute a separate series of notes from the Existing 2025 Notes, but the Company has agreed to exchange the Additional 2025 Notes for additional Existing 2025 Notes, subject to certain conditions.
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The Additional 2025 Notes priced at 102.875% of the principal amount thereof, the 2027 Notes priced at 99.160% of the principal amount thereof and the 2029 Notes priced at 100.000% of the principal amount thereof, which together will result in aggregate gross proceeds of $7,007,750,000. The offering is expected to close on or about December 6, 2019, subject to customary closing conditions.
Centene intends to use the net proceeds of the 2027 Notes and the 2029 Notes and a portion of the proceeds of the Additional 2025 Notes to finance the cash consideration payable in connection with Centene’s previously announced acquisition of WellCare Health Plans, Inc. ("WellCare") and to pay related fees and expenses. Centene expects to use the remainder of the net proceeds of the Additional 2025 Notes for general corporate purposes, including the repayment of revolver borrowings. Centene currently expects the acquisition to be completed by the first half of 2020. The acquisition is, however, subject to customary closing conditions, and Centene cannot guarantee that the acquisition will be completed at or about such time, or at all. The closing of this offering is not conditioned on the closing of the acquisition. If the acquisition is not consummated, the Company will be required to redeem the 2027 Notes and the 2029 Notes at a redemption price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to but excluding the redemption date. The Additional 2025 Notes will not be subject to a special mandatory redemption.
The Notes will be senior unsecured obligations of the Company and will be equal in right of payment with all of the Company’s existing and future senior indebtedness and will be senior in right of payment to all of the Company’s existing and future subordinated debt. The Notes will not be guaranteed by any of its subsidiaries.
The Notes will be offered to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to non-United States persons outside the United States in compliance with Regulation S under the Securities Act. The Notes have not been registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration, qualification or exemption under the securities laws of any such jurisdiction.