By Jennifer Chiou and Rebecca Melvin
New York, Oct. 2 - WellPoint Inc. priced its $1.35 billion offering of 30-year convertible debentures after the market close on Tuesday to yield 2.75% with an initial conversion premium of 25%.
The yield came in the middle of talk set at 2.5% to 3% and the conversion premium was at the wide end of the 20% to 25% range.
As announced, the Rule 144A offering has a $150 million over-allotment option and was sold via joint bookrunners Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch and UBS Investment Bank.
The debentures are non-callable for 10 years and then are provisionally callable if the underlying shares are 150% of the conversion price. There are no puts.
The securities have net share settlement, and they have dividend and change-of-control protection.
About $400 million of proceeds are earmarked for stock repurchases concurrently with the debenture offering. The balance of proceeds will be used for general corporate purposes, including but not limited to additional share repurchases and repayment of short- and long-term debt.
The health benefits company is based in Indianapolis.
| Issuer: | WellPoint Inc.
|
| Issue: | Convertible debentures
|
| Amount: | $1.35 billion
|
| Maturity: | Oct. 15, 2042
|
| Bookrunners: | Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch and UBS Investment Bank
|
| Interest: | 2.75%
|
| Price: | Par
|
| Yield: | 2.75%
|
| Initial conversion premium: | 25%
|
| Initial conversion price: | $75.575
|
| Initial conversion rate: | 13.2319 shares
|
| Provisional call: | On or after Oct. 20, 2022 at issuer's option at 150% hurdle
|
| Distribution: | Rule 144A
|
| Pricing date: | Oct. 2
|
| Settlement date: | Oct. 9
|
| Stock symbol: | NYSE: WLP
|
| Stock reference price: | $60.46, as of close Oct. 2
|
| Market capitalization: | $19.66 billion
|
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