Cigna Selling $500 Million In Bonds To Help Fund HealthSpring Deal

Cigna Corp. (CI) is marketing a three-part, benchmark-sized bond offering, according to a person familiar with the sale.

Benchmark means the healthcare company plans to borrow at least $500 million, but the deal could be far larger.

Proceeds from the sale will be used to help Cigna fund its $3.8 billion acquisition of HealthSpring Inc. (HS), and if that acquisition is never consummated part of the money will be for other general corporate purposes.

Leading the sale are Bank of America Merrill Lynch, Morgan Stanley and UBS, supported by HSBC as a passive bookrunner.

The borrower can also buy the debt back at par, or 100 cents on the dollar, three months before its scheduled maturity in the case of the 10-year debt, and also at par six months before maturity in the case of the 30-year debt.

Additionally, there is a mandatory redemption at a premium of 101 cents on the dollar if the HealthSpring deal is not consummated by Aug. 24, 2012--but only for the five- and 10-year debt. The borrower will also have to buy the bonds back at 101 if it is downgraded below investment-grade or there is a change of control, such as a merger or takeover.

The debt is expected to be rated Baa2 by Moody's Investors Service and BBB by both Standard & Poor's and Fitch Ratings.

-By Katy Burne, Dow Jones Newswires; 212-416-3084; katy.burne@dowjones.com

Healthspring (NYSE:HS)
Graphique Historique de l'Action
De Avr 2024 à Mai 2024