On the day of Wednesday, Humana Inc. borrowed $1 billion from the investors with a public offering of senior notes. The Louisville, Kentucky-based health insurer placed $600 million in ten-year senior notes. Those notes are due March 15, 2027, at 99.877 percent of the principal amount. The notes pay an interest rate of 3.95 percent. Humana borrowed $1 billion from investors with public offering note.
The company also placed $400 million in thirty-year senior notes. Those notes are due March 15, 2047, at 99.905% of the principal amount. They pay an interest rate of 4.8%.
Humana hopes to end up with $988 million in cash after it pays the companies that underwrote the offering. Humana borrowed $1 billion from investors with public offering note.
The managers of the offering were Bank of America Merrill Lynch, J.P. Morgan, Morgan Stanley and US Bancorp. The managers each took 2027 notes with a principal rate of $114.75 million and 2047 notes with a principal amount of $76.5 million.
Humana claims that it will use the proceeds for general corporate purposes, involving the investments, acquisitions and working capital.
The company claims that, at the end of 2016 year, the terms of several credit and business arrangements provided it the financial capacity to take on about $4.6 billion in additional debt.
Humana is active in the group health market and the Medicare plan market. It has a small closed block of stand-alone long-term care insurance business.
The company offers a detailed description of risks it confronts in the offering prospectus. It notes that few of the possible risks include issues with bargaining for good prices on drugs, data security issues, and failures to strategically execute new information systems.
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