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Health Net plans to redeem 9 7/8% notes due 2011 after backing with Treasuries
By Jennifer Chiou
New York, June 28 - Health Net, Inc. announced that it intends to redeem its $400 million of 9 7/8% senior notes due 2011 assuming that an increase in ratings results in the decrease of the interest rate to 8 3/8%.
The ratings upgrades to investment grade are expected as a result of the Woodland Hills, Calif., managed health care company's pledge of collateral to secure the notes.
Health Net entered into a bridge loan facility with The Bank of Nova Scotia and a term loan credit facility with JP Morgan Chase Bank, NA, and the company used the proceeds to purchase U.S. Treasury securities, which were pledged as collateral for the notes.
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