Moody's rates Centene notes Ba1

Moody's Investors Service said it gave a Ba1 senior unsecured debt rating to Centene Corp.'s planned issuance of 2031 debt. The total planned issuance is expected to be $1.8 billion, split between the new 2031 debt and an add on to the Ba1-rated 2.45% senior note issuance, due 2028.

“The assignment of the Ba1 senior unsecured debt rating reflects the leverage neutral impact of the refinancing. Additionally, Centene will prepay $750 million in 5 3/8% senior unsecured debt due January 2026 which will be refinanced by adding an equal amount to its existing non-rated, floating-rate term loan, currently with $1.45 billion outstanding. The updated term loan will have a five-year maturity, 1.375% spread (down from 1.75%) and no prepayment cost. These transactions will reduce annual interest expense by approximately $70 million or 10%,” Moody’s said in a press release.

The outlook on Centene remains unchanged at stable.

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