New Issue: Anthem discloses details on $5.5 billion five-tranche fixed-rate notes

By Devika Patel

Knoxville, Tenn., Nov. 15 – Anthem, Inc. offered further details about a $5.5 billion issue of fixed-rate senior notes (Baa2/A/BBB) that priced in five tranches on Tuesday, according to an FWP filed with the Securities and Exchange Commission.

The company sold $900 million of 2.55% three-year notes at a spread of Treasuries plus 75 basis points. These notes priced at 99.822 to yield 2.562%.

Anthem priced $750 million of 2.95% five-year notes with a 90 bps over Treasuries spread. These notes priced at 99.953 to yield 2.96%.

The $850 million tranche of 3.355% seven-year notes was placed at a spread of 110 bps over Treasuries. These notes priced at 99.968 to yield 3.355%.

In the 10-year tranche, Anthem priced $1.6 billion of 3.65% notes with a spread of Treasuries plus 130 bps. These notes priced at 99.799 to yield 3.674%.

The final $1.4 billion tranche of 4.375% notes was sold with a spread of 155 bps over Treasuries. These notes priced at 99.999 to yield 4.375%.

The tranches all priced on the tight side of guidance.

BofA Merrill Lynch, Credit Suisse Securities (USA) LLC, UBS Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC and Wells Fargo 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, UBS Securities LLC, Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC and Wells Fargo Securities LLC
Senior co-managers:	Barclays, Mizuho Securities USA Inc., MUFG, PNC Capital Markets LLC, RBC Capital Markets Corp., SMBC Nikko Securities America, Inc., SunTrust Robinson Humphrey Inc. and U.S. Bancorp Investments Inc.
Junior co-managers:	BNY Capital Markets Inc., Fifth Third Securities Inc. and HSBC Securities (USA) Inc.
Trade date:	Nov. 14
Settlement date:	Nov. 21
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%
Price:	99.822
Yield:	2.562%
Spread:	Treasuries plus 75 bps
Call feature:	Make-whole call at Treasuries plus 12.5 bps
Price guidance:	Treasuries plus 80 bps area
Five-year notes
Amount:	$750 million
Maturity:	Dec. 1, 2022
Coupon:	2.95%
Price:	99.953
Yield:	2.96%
Spread:	Treasuries plus 90 bps
Call feature:	Make-whole call at Treasuries plus 15 bps until Nov. 1, 2022, then a par call
Price guidance:	Treasuries plus 95 bps area
Seven-year notes
Amount:	$850 million
Maturity:	Dec. 1, 2024
Coupon:	3.355%
Price:	99.968
Yield:	3.355%
Spread:	Treasuries plus 110 bps
Call feature:	Make-whole call at Treasuries plus 20 bps until Oct. 1, 2024, then a par call
Price guidance:	Treasuries plus 115 bps area
10-year notes
Amount:	$1.6 billion
Maturity:	Dec. 1, 2027
Coupon:	3.65%
Price:	99.799
Yield:	3.674%
Spread:	Treasuries plus 130 bps
Call feature:	Make-whole call at Treasuries plus 20 bps until Sept. 1, 2027, then a par call
Price guidance:	Treasuries plus 135 bps area
30-year notes
Amount:	$1.4 billion
Maturity:	Dec. 1, 2047
Coupon:	4.375%
Price:	99.999
Yield:	4.375%
Spread:	Treasuries plus 155 bps
Call feature:	Make-whole call at Treasuries plus 25 bps until June 1, 2047, then a par call
Price guidance:	Treasuries plus 160 bps area

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.