Anthem prices tender for five series after announcing early results

By Wendy Van Sickle

Columbus, Ohio, Nov. 29 – Anthem, Inc. announced pricing in its capped tender offer for five series of notes on Wednesday evening, after announcing earlier in the day that the offer had 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 series of notes until 11:59 p.m. ET on Dec. 12.

Because the early tenders exceeded the original cap, Anthem increased the cap and will accept for purchase all $836,347,000 of the tendered notes from 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Tendered notes may no longer be withdrawn as of the early deadline.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 at the prices listed, which were set using the bid-side price of the 2.75% U.S. Treasury note due Aug. 15, 2047, for a yield of 2.831%, 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 total consideration of $1,339.39;

• $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 total consideration of $1,263.39;

• $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 total consideration of $1,254.52;

• $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 total consideration of $1,270.18; 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 total consideration of $1,171.66.

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 set at 2 p.m. ET on Nov. 29.

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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