Cigna Corporation (NYSE:CI) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a RegistrantItem 2.03
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
On December 22, 2017, Cigna Corporation entered into the Fifth Amended and Restated Revolving Credit and Letter of Credit Agreement with the lenders named therein, JPMorgan Chase Bank, N.A., as administrative agent, JPMorgan Chase Bank, N.A., Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, and Wells Fargo Securities, LLC, as joint lead arrangers and joint book managers, Citibank, N.A., as syndication agent, and Bank of America, N.A. and Wells Fargo Bank, National Association, as documentation agents (the "Credit Agreement"). The Credit Agreement replaces the Company's Fourth Amended and Restated Revolving Credit and Letter of Credit Agreement, dated December 12, 2014.
Under the Credit Agreement, the Company can borrow up to an aggregate principal amount of $1.5 billion for general corporate purposes, of which up to $500 million is available for the issuance of standby letters of credit. The Credit Agreement also includes an option to increase the facility amount up to $2.0 billion and an option to extend the termination date of December 22, 2022 for additional one year periods, in each case, subject to the consent of the administrative agent and the committing banks and satisfaction of certain other conditions.
The Credit Agreement provides for interest rate options on advances at rates equal to either: (x) in the case of base rate advances, the highest of (i) JPMorgan's base (or prime) rate, (ii) the federal funds rate plus 0.50% and (iii) one-month LIBOR plus 1.0% plus an applicable margin based on the Company's public debt ratings (as determined by Moody's Investors Service, Inc. or Standard & Poor's Rating Services); or (y) in the case of Eurodollar rate advances, LIBOR plus an applicable margin based on the Company's public debt ratings.
The Credit Agreement contains customary covenants and restrictions, including a financial covenant that the Company may not permit its leverage ratio – which is total consolidated debt to total consolidated capitalization (each as defined in the Credit Agreement) – to be greater than 0.50 to 1.00. The leverage ratio calculation excludes net unrealized appreciation in fixed maturity investments and the portion of the post-retirement benefits liability adjustment attributable to pension as included in accumulated other comprehensive loss on the Company's consolidated balance sheets.
The Credit Agreement contains other customary provisions regarding events of default, which could result in the termination of commitments, an acceleration of repayment of any advances outstanding and/or the provision of cover in an amount equal to the aggregate amount of any outstanding letters of credit. The events of default include, among other things, bankruptcy or insolvency proceedings, change of control and cross-defaults from other debt agreements.
The agents and banks under the Credit Agreement perform normal banking, investment banking and/or advisory services for the Company from time to time for which they receive customary fees and expenses.
The description above is a summary and is qualified in its entirety by the Credit Agreement, which is filed as Exhibit 99.1 to this report and incorporated herein by reference.
Item 9.01Financial Statements and Exhibits.
(d) Exhibits.
CIGNA CORP ExhibitEX-99.1 2 ex99-1.htm EXHIBIT 99.1 Exhibit 99.1 EXECUTION COPY ═══════════════════════════════════════ FIFTH AMENDED AND RESTATED REVOLVING CREDIT AND LETTER OF CREDIT AGREEMENT Dated as of December 22,…To view the full exhibit click here
About Cigna Corporation (NYSE:CI)
Cigna Corporation (Cigna), together with its subsidiaries, is a health services company. The Company offers medical, dental, disability, life and accident insurance and related products and services. The Company’s segments include Global Health Care, Global Supplemental Benefits, Group Disability and Life, Other Operations and Corporate. The Global Health Care segment aggregates the commercial and Government operating segments. The Global Supplemental Benefits segment offers supplemental health, life and accident insurance products primarily in Asia, Europe and the United States. The Company’s Global Supplemental Benefits segment offers supplemental health, life and accident insurance products primarily in Asia, Europe and the United States. Its products are offered through employers and other groups, such as Governmental and non-Governmental organizations, unions and associations. Cigna also offers commercial health and dental insurance, and Medicare and Medicaid products and health.
