Humana Inc. (NYSE:HUM) Files An 8-K Entry into a Material Definitive Agreement
Item1.01.
| Entry into a Material Definitive Agreement. |
| A. | Underwriting Agreement. |
On March13, 2017, HumanaInc. (the Company) entered into an
underwriting agreement (the Underwriting Agreement) with J.P.
Morgan Securities LLC, Merrill Lynch, Pierce, Fenner Smith
Incorporated, Morgan Stanley Co. LLC and U.S. Bancorp
Investments, Inc., as representatives of the several underwriters
(together, the Underwriters), to which the Company agreed to
issue and sell to the Underwriters $600,000,000 aggregate
principal amount of its 3.950% Senior Notes due 2027 (the 2027
Senior Notes), and $400,000,000 aggregate principal amount of its
4.800% Senior Notes due 2047 (the 2047 Senior Notes and, together
with the 2027 Senior Notes, the Senior Notes), in accordance with
the terms and conditions set forth in the Underwriting Agreement.
The 2027 Senior Notes were sold at a public offering price of
99.877% of the aggregate principal amount thereof and the 2047
Senior Notes were sold at a public offering price of 99.905% of
the aggregate principal amount thereof.
The sale of the Senior Notes has been registered with the
Securities and Exchange Commission (the Commission) in a
registration statement on FormS-3, File No.333-202623 (the
Registration Statement). The terms of the Senior Notes are
described in the Companys Prospectus dated March9, 2015, as
supplemented by a final Prospectus Supplement dated March13, 2017
as filed with the Commission on March14, 2017, to
Rule424(b)(2)under the Securities Act of 1933, as amended (the
Securities Act).
The closing of the sale of the Senior Notes occurred on March16,
2017, and the terms of the Senior Notes are described below. The
Company estimates that the net proceeds from the sale of the
Senior Notes, after deducting the Underwriters discounts and
commissions and estimated offering expenses, will be
approximately $988million.
The Underwriters have performed commercial banking, investment
banking and advisory services for us from time to time for which
they have received customary fees and expenses. The Underwriters
may, from time to time, engage in transactions with and perform
services for us in the ordinary course of their business. In
addition, affiliates of certain of the Underwriters are lenders
under our credit facility. We intend to use the net proceeds for
general corporate purposes.
A copy of the Underwriting Agreement is filed as Exhibit1.1 to
this Current Report on Form8-K and is incorporated by reference
herein. The description of the material terms of the Underwriting
Agreement is qualified in its entirety by reference to such
exhibit.
| B. |
Supplemental Indentures Relating to the Notes |
On March16, 2017, the Company completed a public offering of the
Senior Notes. The Senior Notes were issued under an indenture
dated as of August5, 2003, by and between the Company and The
Bank of New York Mellon Trust Company, N.A. (formerly known as
The Bank of New York Trust Company, N.A) (as successor to The
Bank of New York), as trustee (the Trustee) (the Original
Indenture) as supplemented by a tenth supplemental indenture,
dated as of March16, 2017, by and between the Company and the
Trustee relating to the 2027 Senior Notes (the Tenth Supplemental
Indenture and, together with the Original Indenture, the Tenth
Indenture) and an eleventh supplemental indenture, dated as of
March16, 2017, by and between the Company and the Trustee
relating to the 2047 Senior Notes (the Eleventh Supplemental
Indenture and, together with the Original Indenture, the Eleventh
Indenture, the Tenth Indenture and the Eleventh Indenture are
referred to herein as the Indentures). to the terms of each of
the Indentures, the Senior Notes are unsecured senior obligations
of the Company and rank equally with all of the Companys other
unsecured, unsubordinated indebtedness. The 2027 Senior Notes
bear interest at an annual rate of 3.950% and the 2047 Senior
Notes bear interest at an annual rate of 4.800%. Interest on the
Senior Notes is payable by the Company on September15 and March
15 of each year, beginning on September15, 2017. The 2027 Senior
Notes mature on March15, 2027 and the 2047 Senior Notes mature on
March15, 2047.
A copy of the Original Indenture was filed as an Exhibit to the
Companys Quarterly Report on Form 10-Q for the quarter ended
September 30, 2003 and is incorporated by reference herein. A
copy of the Tenth Supplemental Indenture is filed as Exhibit 4.2
to this Current Report on Form 8-K and is incorporated by
reference herein. The form of 2027 Senior Notes is filed as
Exhibit 4.3 to this Current Report on Form 8-K and is
incorporated by reference herein. A copy of the Eleventh
Supplemental Indenture is filed as Exhibit 4.4 to this Current
Report on Form 8-K and is incorporated by reference herein. The
form of 2047 Senior Notes is filed as Exhibit 4.5 to this Current
Report on Form 8-K and is incorporated by reference herein. The
descriptions of the material terms of the Tenth Supplemental
Indenture, the 2027 Senior Notes, the Eleventh Supplemental
Indenture and the 2047 Senior Notes are qualified in their
entirety by reference to such exhibits. In addition, the legal
opinion related to the Notes is attached hereto as Exhibit 5.1
and is incorporated herein by reference.
The Trustee has also been appointed registrar and paying agent
with regard to the Senior Notes and serves the same roles with
respect to certain other series of the Companys senior notes. An
affiliate of the Trustee is also a lender under the Companys
existing credit facility.
| Item2.03 |
Creation of a Direct Financial Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a Registrant. |
The disclosure above under Item1.01 of this Current Report on
Form 8-K are also responsive to Item2.03 of this Current Report
on Form 8-K and are hereby incorporated by reference into this
Item2.03.
| Item7.01. | Regulation FD Disclosure. |
The Company issued a press release announcing the closing of the
offering of the Notes, which is attached as Exhibit 99.1 to this
Current Report on Form 8-K and is hereby incorporated by
reference herein.
None of the information furnished in this Item 7.01 hereto
(including Exhibit 99.1) shall be deemed to be filed for purposes
of Section18 of the Securities Exchange Act of 1934, as amended.
Unless expressly set forth by specific reference in such filings,
none of the information furnished in this Item 7.01 (including
Exhibit 99.1) shall be incorporated by reference in any filing
under the Securities Act, whether made before or after the date
hereof and regardless of any general incorporation language in
such filings.
| Item9.01. | Financial Statements and Exhibits. |
|
Exhibit No. |
Description |
|
| 1.1 |
Underwriting Agreement, dated March 13, 2017, among the Company, J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner Smith Incorporated, Morgan Stanley Co. LLC and U.S. Bancorp Investments, Inc., as representatives of the several Underwriters. |
|
| 4.1 |
Indenture, dated as of August 5, 2003, by and between the Company and the Bank of New York, as trustee (incorporated herein by reference to Exhibit 4.1 to Humana Inc.s Quarterly Report on Form 10-Q for the quarter ended September30, 2003). |
|
| 4.2 |
Tenth Supplemental Indenture, dated March16, 2017, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee. |
|
| 4.3 | Form of 3.950% Senior Notes due 2027. | |
| 4.4 |
Eleventh Supplemental Indenture, dated March16, 2017, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee. |
|
| 4.5 | Form of 4.800% Senior Notes due 2047. | |
| 5.1 | Opinion of Fried, Frank, Harris, Shriver Jacobson LLP. | |
| 23.1 |
Consent of Fried, Frank, Harris, Shriver Jacobson LLP (See Exhibit 5.1). |
|
| 99.1 | Press Release, dated March16, 2017, issued by the Company. |
About Humana Inc. (NYSE:HUM)
Humana Inc. is a health and well-being company. The Company’s segments include Retail, Group, Healthcare Services and Other Businesses. The Retail segment consists of Medicare benefits, marketed to individuals or directly via group accounts, as well as individual commercial fully-insured medical and specialty health insurance benefits, including dental, vision, and other supplemental health and financial protection products. The Group segment consists of employer group commercial fully-insured medical and specialty health insurance benefits, including dental, vision, and other supplemental health and voluntary insurance benefits, as well as administrative services only products. The Healthcare Services segment includes services, such as pharmacy solutions, provider services, home-based services and clinical programs, as well as services and capabilities to advance population health. The Other Businesses segment includes its closed-block long-term care insurance policies. Humana Inc. (NYSE:HUM) Recent Trading Information
Humana Inc. (NYSE:HUM) closed its last trading session up +0.35 at 219.25 with 706,715 shares trading hands.