Anthem tallies early results in oversubscribed tender for five series

By Susanna Moon

Chicago, Nov. 29 – Anthem, Inc. said that its capped tender offer has been oversubscribed as of the early deadline at 5 p.m. ET on Nov. 28.

As announced Nov. 14, the company was tendering for up to $600 million principal amount of five other series of notes until 11:59 p.m. ET on Dec. 12.

Because the tendered amount exceeds the cap, Anthem will accept for purchase all of the tendered notes for the first four series of notes and none of the fifth series, according to a Wednesday press release.

Tendered notes may no longer be withdrawn as of the early deadline.

The early settlement date is expected to be Nov. 30.

Investors had tendered the following amount of notes as of the early deadline with pricing to be set using the bid-side price of the 2.75% U.S. Treasury note due Aug. 15, 2047 plus a fixed spread:

• $276,614,000 of the $646,633,000 outstanding 6.375% notes due 2037 with a priority level of 1 and a fixed spread of 105 bps for a hypothetical purchase price of $1,333.95;

• $111,728,000 of the $448,294,000 outstanding 5.95% notes due 2034 with a priority level of 2 and a fixed spread of 100 bps for a hypothetical purchase price of $1,258.63;

• $376,269,000 of the $775,456,000 outstanding 5.85% notes due 2036 with a priority level of 2 and a fixed spread of 105 bps for a hypothetical purchase price of $1,249.58;

• $71,736,000 of the $197,507,000 outstanding 5.8% notes due 2040 with a priority level of 2 and a fixed spread of 115 bps for a hypothetical purchase price of $1,264.42; and

• $484,991,000 of the $600 million outstanding 5.1% notes due 2044 with a priority level of 3, a tender sub-limit of $200 million and a fixed spread of 120 bps for a hypothetical purchase price of $1,165.76.

Specifically, Anthem said that it will not purchase any of the 5.1% notes tendered in the offer.

In the capped offers, each total purchase price includes an early tender premium of $30.00 per $1,000 of notes tendered by the early deadline.

Pricing was scheduled for at 2 p.m. ET on Nov. 29.

The hypothetical purchase prices were set using the U.S. Treasury reference security at 2 p.m. ET on Nov. 13.

Holders also will receive accrued interest.

The issuer also was tendering for any and all of its $440.33 million outstanding 7% notes due 2019 and took in tenders for $185,147,000 of those notes.

The offer opened on Nov. 14 and ended at 5 p.m. ET on Nov. 20.

The company paid $1,058.19 per $1,000 of tendered notes.

Pricing was set at 2 p.m. ET on Nov. 20 using the 0.75% U.S. Treasury note due Feb. 15, 2019 for a reference yield of 1.688% plus a spread of 50 basis points.

Holders also received accrued interest.

BofA Merrill Lynch (888 292-0070 or 980 387-3907) and Deutsche Bank Securities (866 627-0391 or 212 250-2955) are the dealer managers. D.F. King & Co., Inc. (800 884-4725, 212 269-5550, antm@dfking.com or dfking.com/antm) is the information agent.

Indianapolis-based Anthem is a health benefits company.

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