By Cristal Cody
Tupelo, Miss., Nov. 14 – Anthem, Inc. priced $5.5 billion of fixed-rate senior notes (Baa2/A/BBB) in five tranches on Tuesday, according to a market source.
The company sold $900 million of 2.55% three-year notes at a spread of Treasuries plus 75 basis points.
Anthem priced $750 million of 2.95% five-year notes with a 90 bps over Treasuries spread.
The $850 million tranche of 3.355% seven-year notes was placed at a spread of 110 bps over Treasuries.
In the 10-year tranche, Anthem priced $1.6 billion of 3.65% notes with a spread of Treasuries plus 130 bps.
The final $1.4 billion tranche of 4.375% notes was sold with a spread of 155 bps over Treasuries.
The tranches all priced on the tight side of guidance.
BofA Merrill Lynch, Credit Suisse Securities (USA) LLC and UBS Securities LLC were the bookrunners.
Proceeds will be used to fund the planned acquisition of HealthSun Health Plans, Inc. and the acquisitions of Freedom Health, Inc., Optimum HealthCare, Inc. and America’s 1st Choice of South Carolina, Inc. and to fund the tender offers for any and all of the company’s 7% notes due 2019 and up to $600 million of its 5.95% notes due 2034, 5.85% notes due 2036, 6.375% notes due 2037, 5.8% notes due 2040 and 5.1% notes due 2044, to redeem any 7% notes due 2019 still remaining after the tender, for working capital and for general corporate purposes.
Indianapolis-based Anthem is a health benefits company.
| Issuer: | Anthem, Inc.
|
| Amount: | $5.5 billion
|
| Description: | Senior notes
|
| Bookrunners: | BofA Merrill Lynch, Credit Suisse Securities (USA) LLC and UBS Securities LLC
|
| Trade date: | Nov. 14
|
| Ratings: | Moody’s: Baa2
|
| S&P: A
|
| Fitch: BBB
|
| Distribution: | SEC registered
|
|
|
| Three-year notes
|
| Amount: | $900 million
|
| Maturity: | Nov. 21, 2020
|
| Coupon: | 2.55%
|
| Spread: | Treasuries plus 75 bps
|
| Price guidance: | Treasuries plus 80 bps area
|
|
|
| Five-year notes
|
| Amount: | $750 million
|
| Maturity: | Dec. 1, 2022
|
| Coupon: | 2.95%
|
| Spread: | Treasuries plus 90 bps
|
| Price guidance: | Treasuries plus 95 bps area
|
|
|
| Seven-year notes
|
| Amount: | $850 million
|
| Maturity: | Dec. 1, 2024
|
| Coupon: | 3.355%
|
| Spread: | Treasuries plus 110 bps
|
| Price guidance: | Treasuries plus 115 bps area
|
|
|
| 10-year notes
|
| Amount: | $1.6 billion
|
| Maturity: | Dec. 1, 2027
|
| Coupon: | 3.65%
|
| Spread: | Treasuries plus 130 bps
|
| Price guidance: | Treasuries plus 135 bps area
|
|
|
| 30-year notes
|
| Amount: | $1.4 billion
|
| Maturity: | Dec. 1, 2047
|
| Coupon: | 4.375%
|
| Spread: | Treasuries plus 155 bps
|
| Price guidance: | Treasuries plus 160 bps area
|
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