Anthem greenshoe exercised, increasing equity units to $1.25 billion

By Marisa Wong

Madison, Wis., May 12 – The underwriters of Anthem Inc.’s recent offering of convertible equity units exercised their $75 million over-allotment option in full, according to an 8-K filing with the Securities and Exchange Commission.

This brings the total deal size to $1.25 billion.

Anthem priced an upsized $1,175,000,000 of convertible equity units at $50 each after the market close on May 6 to yield 5.25% with an initial conversion premium of 30%, as previously reported.

The registered off-the-shelf deal was initially talked at $900 million. The $75 million greenshoe was downsized from $135 million.

Pricing came at the rich end of talked terms, which was for a 5.25% to 5.75% yield and 25% to 30% premium.

Credit Suisse Securities (USA) LLC and BofA Merrill Lynch were joint bookrunners of the offering.

The units are non-callable and mature in three years. They have full dividend protection via a conversion rate adjustment above $0.625 per quarter. There is a takeout put, including make-whole shares.

Proceeds are expected to be used for general corporate purposes, including repurchase of a portion of Anthem’s outstanding 2.75% convertibles.

Indianapolis-based Anthem is a health benefits company.

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