Centene launches $7 billion notes in three parts; pricing Thursday

By Paul A. Harris

Portland, Ore., Nov. 21 – Centene Corp. launched $7 billion of senior notes (Ba1/BBB-/BB+) in three tranches on Thursday, according to market sources.

All three tranches launched inside of final price talk.

Details are as follows:

• An upsized $1 billion add-on to the Centene 4¾% senior notes due Jan. 15, 2025, callable Jan. 15, 2020 at 103.563, launched at 102.875, 12.5 basis points beyond the rich end of the 102.25 to 102.75 price talk, and upsized from $750 million;

• A $2.5 billion tranche of eight-year notes, which are non-callable for three years and launched with a 4¼% coupon at 99.16 to yield 4 3/8%, 12.5 bps beneath the tight end of the 4½% to 4 5/8% price talk (initial talk was 4¾% area, the tranche size range was $2.5 billion to $3 billion); and

• A $3.5 billion tranche of 10-year notes, which are non-callable for five years, launched at par to yield 4 5/8%, 12.5 bps beneath the tight end of the 4¾% to 4 7/8% price talk (initial talk was 5% area, the tranche size range was $3 billion to $3.5 billion).

The deal is set to price on Thursday.

An add-on to the Centene 5 3/8% notes due 2026 was withdrawn and replaced with the add-on to the 4¾% notes due 2025.

Left bookrunner Barclays will bill and deliver. J.P. Morgan Securities LLC, SunTrust Robinson Humphrey Inc., Wells Fargo Securities LLC and BofA Securities Inc. are joint bookrunners.

Fifth Third Securities Inc., MUFG, U.S. Bancorp Investments Inc., Regions Securities Inc., PNC Capital Markets LLC, BMO Capital Markets Corp., Stifel, CIBC World Markets and Allen & Co. are the co-managers.

The initial call premiums on the eight-year notes and 10-year notes will be set at par plus 50% of the respective coupons.

The eight-year notes and 10-year notes have a Rule 144A with registration rights format.

The St. Louis-based provider of services to government sponsored and commercial health care programs plans to use the proceeds to help fund acquisition of WellCare Health Plans Inc., a Tampa, Fla.-based provider of government-sponsored managed care services, as well as for general corporate purposes, including the refinancing of certain Centene and WellCare debt.

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