Cigna gives early results, pricing of tender offers, ups capped offer

By Marisa Wong

Los Angeles, Feb. 20 – Cigna Group announced the early results and pricing terms of its Feb. 5 tender offers to purchase for cash any and all of two series of notes and up to $1.25 billion aggregate principal amount of seven other series of notes, according to Tuesday morning and afternoon press releases.

Cigna also announced that it increased the maximum tender offer to $1.55 billion from $1.25 billion and increased one of the tender sub-caps to $1.2 billion.

The early tender date was 5 p.m. ET on Feb. 16.

Pricing was determined at 10 a.m. ET on Feb. 20.

Any-and-all offer

Cigna is offering to purchase any and all of its $713,513,000 outstanding 3.5% senior notes due 2024 (Cusip: 125523BX7, 125523BW9, U1716AAT4) and Evernorth Health, Inc.’s $286,478,000 outstanding 3.5% senior notes due 2024 (Cusip: 30219GAK4).

As of the early tender date, holders had tendered $172,848,000 of Cigna’s 2024 notes and $36,476,000 of Evernorth’s 2024 notes.

The company will accept for purchase all of the early tendered notes.

The total consideration per $1,000 principal amount is $993.39 for both series.

The purchase price was calculated based on the 0.25% U.S. Treasury due June 15, 2024 and a fixed spread of 20 basis points.

Capped offer

Cigna is now offering to purchase up to $1.55 billion aggregate principal amount of notes from seven series issued by Cigna, Evernorth and Cigna Holding Co.

As of the early tender date, holders had tendered the following amounts:

• $983,877,000 of Cigna’s $2.2 billion outstanding 4.125% senior notes due 2025 (Cusip: 125523AG5, 40573LAQ9, U4058LAH6), with acceptance priority level 1, all of which was accepted for purchase at a purchase price of $985.05 per $1,000 principal amount, based on the 4.25% U.S. Treasury due Jan. 31, 2026 and a fixed spread of 45 bps;

• $528,406,000 of Cigna’s $1,234,360,000 outstanding 4.5% senior notes due 2026 (Cusip: 125523BZ2, 125523BY5, U1716AAU1), with acceptance priority level 2, $183,587,000 of which was accepted with a proration factor of 34.79% at a purchase price of $989.92 per $1,000 principal amount, based on the 4.25% U.S. Treasury due Jan. 31, 2026 and a fixed spread of 45 bps;

• $101.52 million of Evernorth’s $265,575,000 outstanding 4.5% senior notes due 2026 (Cusip: 30219GAM0), with acceptance priority level 2, $32,536,000 of which was accepted for purchase with a proration factor of 34.79% at a purchase price of $989.92 per $1,000 principal amount, based on the 4.25% U.S. Treasury due Jan. 31, 2026 and a fixed spread of 45 bps;

• $428,434,000 of Cigna’s $800 million outstanding 1.25% senior notes due 2026 (Cusip: 125523CP3), with acceptance priority level 3, $250 million of which was accepted for purchase with a proration factor of 58.43% at a purchase price of $926.69 per $1,000 principal amount, based on the 4.25% U.S. Treasury due Jan. 31, 2026 and a fixed spread of 45 bps;

• $284,784,000 of Cigna’s $549.66 million outstanding 3.05% senior notes due 2027 (Cusip: 125523AZ3, 125523AY6, U1716AAG2), with acceptance priority level 4, none of which was accepted for purchase. The purchase price would have been based on the 4% U.S. Treasury due Jan. 15, 2027 and a fixed spread of 45 bps;

• $6,773,000 of Cigna Holding’s $50,259,000 outstanding 3.05% senior notes due 2027 (Cusip: 125509BV0), with acceptance priority level 4, none of which was accepted for purchase. The purchase price would have been based on the 4% U.S. Treasury due Jan. 15, 2027 and a fixed spread of 45 bps; and

• $766,057,000 of Cigna’s $1.5 billion outstanding 2.4% senior notes due 2030 (Cusip: 125523CL2), with acceptance priority level 5, $100 million of which was accepted for purchase with a proration factor of 13.11% at a purchase price of $866.32 per $1,000 principal amount, based on the 4% U.S. Treasury due Jan. 31, 2029 and a fixed spread of 75 bps.

The notes with acceptance priority levels 1 and 2 are subject to a tender sub-cap of $1.2 billion, increased from an original $900 million; the notes with acceptance priority levels 3 and 4 are subject to a tender sub-cap of $250 million; and the notes with acceptance priority level 5 are subject to a tender sub-cap of $100 million.

The company had said at the beginning of the offer that it has the right to increase, decrease or eliminate any tender sub-cap.

Details

For each series, the total consideration includes an early tender payment of $30 per $1,000 principal amount tendered by the early tender date.

Holders tendering after the early tender date will not be eligible to receive the early tender payment.

In addition, the company will pay accrued interest to but excluding the applicable settlement date.

Early settlement is expected to be on Feb. 22.

Tenders may no longer be withdrawn.

The offers will expire at 5 p.m. ET on March 5.

However, because the capped offer was fully subscribed as of the early tender date, the company does not expect to accept for purchase any notes tendered under the capped offer after the early tender date.

Final settlement, which would still apply to notes tendered under the any-and-all offer, is slated for March 8.

The tender offers are subject to some conditions, including the receipt of proceeds from a proposed issuance of securities in an amount sufficient for repurchasing securities under the tender offers.

J.P. Morgan Securities LLC (212 834-3554 or 866 834-4666), Deutsche Bank Securities Inc. (212 250-2955 or 866 627-0391), Goldman Sachs & Co. LLC (212 902-5962 or 800 828-3182) and Wells Fargo Securities, LLC (704 410-4759 or 866 309-6316) are the dealer managers for the tender offers.

D.F. King & Co., Inc. (www.dfking.com/cigna; 888 567-1626 or, for banks and brokers, 212 269-5550; cigna@dfking.com.) is the tender agent and information agent.

The health services and insurance company is based in Bloomfield, Conn.

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