Cigna Corporation (NYSE: CI) (“Cigna”) today announced
the commencement of private offers to exchange (each, an
“Exchange Offer” and, collectively, the “Exchange
Offers”) any and all of certain outstanding notes issued by
Cigna’s wholly-owned subsidiaries, Cigna Holding Company, Express
Scripts Holding Company and Medco Health Solutions, Inc.
(collectively, the “Existing Notes”) for (1) new senior
notes to be issued by Cigna (the “New Cigna Notes”) and (2)
cash, subject to the terms and conditions set forth in Cigna’s
confidential offering memorandum and consent solicitation
statement, dated September 26, 2019 (the “Offering Memorandum
and Consent Solicitation Statement”).
In connection with the Exchange Offers, Cigna is also soliciting
consents (each, a “Consent Solicitation” and, collectively,
the “Consent Solicitations” and, together with the Exchange
Offers, the “Exchange Offers and Consent Solicitations”)
from holders of the Existing Notes to amend (collectively, the
“Proposed Amendments”) the indentures governing the Existing
Notes (each, an “Existing Indenture” and, collectively, the
“Existing Notes Indentures”) to eliminate certain of the
covenants, restrictive provisions, reporting requirements, events
of default and related provisions therein, subject to the terms and
conditions set forth in the Offering Memorandum and Consent
Solicitation Statement. If the Proposed Amendments are adopted,
certain terms of the Existing Notes will be less restrictive and
will afford reduced protection to holders of the Existing Notes
compared to those terms and protections currently in the indenture
governing Cigna’s existing senior notes or those terms and
protections that will be applicable to the New Cigna Notes. Other
than with respect to the 8.30% 2023 notes issued by Cigna Holding
Company, the 7.65% 2023 notes issued by Cigna Holding Company, the
7.865% 2027 notes issued by Cigna Holding Company and the 8.30%
2033 step-down notes issued by Cigna Holding Company (collectively,
the “Super-Majority Notes”), the consent of the holders of a
majority of the aggregate principal amount of the Existing Notes
outstanding of each series will be required in order to effectuate
the Proposed Amendments to the Existing Indenture for each such
series. With respect to the Super-Majority Notes, the consent of
holders of 662/3% of the aggregate principal amount of the
Super-Majority Notes outstanding of each series will be required in
order to effectuate the Proposed Amendments to the Existing
Indenture for each series.
The following table sets forth each series of Existing Notes
subject to the Exchange Offers and Consent Solicitations and the
“Exchange Consideration”, the “Early Tender Premium” and the “Total
Exchange Consideration” offered in the Exchange Offers.
Cigna Holding Company
Notes
Title of Series of Old
Notes
CUSIP Number
Aggregate Principal Amount
Outstanding
Title of Series of Notes to be
Issued
Exchange
Consideration(1)
+
Early Tender
Premium(1)
=
Total Exchange
Consideration(1)(2)
New Cigna Notes (principal
amount)
New Cigna Notes (principal
amount)
Cash
New Cigna Notes (principal
amount)
Cash
4.500% Notes due 2021
125509BP3
$300,000,000
New Cigna 4.500% Notes due
2021
$970
$30
$1.00
$1,000
$1.00
4.000% Notes due 2022
125509BS7
$750,000,000
New Cigna 4.000% Notes due
2022
$970
$30
$1.00
$1,000
$1.00
8.30% Notes due 2023
125509AG4
$16,860,000
New Cigna 8.30% Notes due
2023
$970
$30
$1.00
$1,000
$1.00
7.65% Notes due 2023
125509AH2
$100,000,000
New Cigna 7.65% Notes due
2023
$970
$30
$1.00
$1,000
$1.00
3.250% Notes due 2025
125509BU2
$900,000,000
New Cigna 3.250% Notes due
2025
$970
$30
$1.00
$1,000
$1.00
7.875% Debentures due 2027
125509AZ2
$259,483,000
New Cigna 7.875% Notes due
2027
$970
$30
$1.00
$1,000
$1.00
3.050% Notes due 2027
125509BV0
$600,000,000
New Cigna 3.050% Notes due
2027
$970
$30
$1.00
$1,000
$1.00
8.30% Step-Down Notes due
2033(3)
125509BE8
$45,354,000
New Cigna 8.30% Step-Down Notes
due 2033
$970
$30
$1.00
$1,000
$1.00
6.150% Notes due 2036
125509BH1
$190,498,000
New Cigna 6.150% Notes due
2036
$970
$30
$1.00
$1,000
$1.00
5.875% Notes due 2041
125509BQ1
$120,523,000
New Cigna 5.875% Notes due
2041
$970
$30
$1.00
$1,000
$1.00
5.375% Notes due 2042
125509BT5
$317,282,000
New Cigna 5.375% Notes due
2042
$970
$30
$1.00
$1,000
$1.00
3.875% Notes due 2047
125509BW8
$1,000,000,000
New Cigna 3.875% Notes due
2047
$970
$30
$1.00
$1,000
$1.00
Express Scripts Holding Company
Notes
Title of Series of Old
Notes
CUSIP Number
Aggregate Principal Amount
Outstanding
Title of Series of Notes to be
Issued
Exchange
Consideration(1)
+
Early Tender
Premium(1)
=
Total Exchange
Consideration(1)(2)
New Cigna Notes (principal
amount)
New Cigna Notes (principal
amount)
Cash
New Cigna Notes (principal
amount)
Cash
3.300% Senior Notes due 2021
30219GAL2
$500,000,000
New Cigna 3.300% Notes due
2021
$970
$30
$1.00
$1,000
$1.00
4.750% Senior notes due 2021
30219GAE8
$1,250,000,000
New Cigna 4.750% Notes due
2021
$970
$30
$1.00
$1,000
$1.00
3.900% Senior Notes due 2022
30219GAF5
$1,000,000,000
New Cigna 3.900% Notes due
2022
$970
$30
$1.00
$1,000
$1.00
3.050% Senior Notes due 2022
30219GAT5
$500,000,000
New Cigna 3.050% Notes due
2022
$970
$30
$1.00
$1,000
$1.00
3.000% Senior Notes due 2023
30219GAQ1
$1,000,000,000
New Cigna 3.000% Notes due
2023
$970
$30
$1.00
$1,000
$1.00
3.50% Senior Notes due 2024
30219GAK4
$1,000,000,000
New Cigna 3.50% Notes due
2024
$970
$30
$1.00
$1,000
$1.00
4.500% Senior Notes due 2026
30219GAM0
$1,500,000,000
New Cigna 4.500% Notes due
2026
$970
$30
$1.00
$1,000
$1.00
3.400% Senior Notes due 2027
30219GAN8
$1,500,000,000
New Cigna 3.400% Notes due
2027
$970
$30
$1.00
$1,000
$1.00
6.125% Senior Notes due 2041
30219GAG3
$448,668,000
New Cigna 6.125% Notes due
2041
$970
$30
$1.00
$1,000
$1.00
4.800% Senior Notes due 2046
30219GAP3
$1,500,000,000
New Cigna 4.800% Notes due
2046
$970
$30
$1.00
$1,000
$1.00
Medco Health Solutions, Inc.
Notes
Title of Series of Old
Notes
CUSIP Number
Aggregate Principal Amount
Outstanding
Title of Series of Notes to be
Issued
Exchange
Consideration(1)
+
Early Tender
Premium(1)
=
Total Exchange
Consideration(1)(2)
New Cigna Notes (principal
amount)
New Cigna Notes (principal
amount)
Cash
New Cigna Notes (principal
amount)
Cash
4.125% Senior Notes due 2020
58405UAG7
$500,000,000
New Cigna 4.125% Notes due
2020
$970
$30
$1.00
$1,000
$1.00
(1) For each $1,000 principal amount of the Existing Notes
(as defined herein) accepted for exchange. (2) Includes the
Early Tender Premium (as defined herein). (3) The interest
rate on these notes will step-down to 8.08% on January 15,
2023.
The Exchange Offers and Consent Solicitations are being made
only to Eligible Holders (as defined below). Eligible Holders must
validly tender (and not validly withdraw) their Existing Notes at
or prior to 5:00 p.m., New York City time, on October 9, 2019 (the
“Early Tender Date”), in order to be eligible to receive the
applicable “Early Tender Premium” shown in the table above.
Existing Notes tendered after the Early Tender Date but prior to
the Expiration Date (as defined below) will only be eligible to
receive the applicable “Exchange Consideration” shown in the table
above. Eligible Holders of Existing Notes may deliver their consent
to the Proposed Amendments to the corresponding Existing Indenture
for such series pursuant to the Consent Solicitations only by
tendering Existing Notes of the applicable series in the applicable
Exchange Offer. Eligible Holders may not deliver a consent pursuant
to the Consent Solicitations without tendering Existing Notes in
the applicable Exchange Offer. If an Eligible Holder tenders
Existing Notes in an Exchange Offer, such Eligible Holder will also
be delivering its consent, with respect to the principal amount of
such tendered Existing Notes, to the Proposed Amendments. Tenders
may be validly withdrawn at any time on or prior to 5:00 p.m., New
York City time, on October 9, 2019, but not thereafter, unless
required by law.
The Exchange Offers and Consent Solicitations will expire at
5:00 p.m., New York City time, on November 4, 2019 (the
“Expiration Date”). The settlement date for the Exchange
Offers and Consent Solicitations will occur promptly after the
Expiration Date (the “Final Settlement Date”), subject to
all conditions to the Exchange Offers and Consent Solicitations
having been satisfied or waived by Cigna. Cigna may elect to have
an early settlement for any or all series of Existing Notes and
issue the New Cigna Notes with respect to such Existing Notes
validly tendered prior to the Early Tender Date (and not validly
withdrawn) at any time after the Early Tender Date and prior to the
Final Settlement Date (such date, the “Early Settlement
Date”), subject to all conditions to the Exchange Offers and
Consent Solicitations having been satisfied or waived by Cigna. If
elected, such Early Settlement Date would not be expected to occur
earlier than October 11, 2019.
Each series of New Cigna Notes will accrue interest from (and
including) the most recent date on which interest has been paid on
the corresponding series of Existing Notes accepted in the Exchange
Offers and the Consent Solicitations; provided that interest will
only accrue with respect to the aggregate principal amount of New
Cigna Notes an Eligible Holder receives, which will be less than
the principal amount of Existing Notes tendered for exchange if
such Eligible Holder tenders its Existing Notes after the Early
Tender Date. Except as set forth in the preceding sentence, no
accrued but unpaid interest will be paid with respect to Existing
Notes tendered in the Exchange Offers and Consent
Solicitations.
The New Cigna Notes will be fully and unconditionally
guaranteed, jointly and severally, on an unsecured and
unsubordinated basis, by each of Cigna Holding Company and Express
Scripts Holding Company, subject to a guarantee release condition
which will be set forth in the indenture governing the New Cigna
Notes (the “Guarantee Release Condition”). The Guarantee
Release Condition may be satisfied concurrent with or shortly after
the issuance of the New Cigna Notes, or at any point
thereafter.
The Exchange Offers and Consent Solicitations are conditioned on
the satisfaction or waiver of certain customary conditions, as
described in the Offering Memorandum and Consent Solicitation
Statement. The Exchange Offers and Consent Solicitations are not
conditioned upon any minimum amount of Existing Notes being
tendered. Cigna may terminate, withdraw, amend or extend any or all
of the Exchange Offers and/or Consent Solicitations.
The New Cigna Notes have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”) or
any state or foreign securities laws. The New Cigna Notes may not
be offered or sold in the United States or to any U.S. persons
except pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act.
The Exchange Offers and Consent Solicitations are only being made
to persons who certify that they are (a) “Qualified Institutional
Buyers”, as such term is defined in Rule 144A under the Securities
Act or (b) persons that are outside the United States and that are
(i) not “U.S. persons,” as such terms are defined in Rule 902 under
the Securities Act and (ii) “non-U.S. qualified offerees”, as such
term is defined in the Eligibility Letter (as defined below) (such
persons, “Eligible Holders”). As such, documents relating to
the Exchange Offers and Consent Solicitations will only be
distributed to holders of Existing Notes who complete and return an
eligibility letter (“Eligibility Letter”) confirming that
they are Eligible Holders of Existing Notes. In addition, if an
Eligible Holder of Existing Notes is a resident of Canada, such
Eligible Holder must also certify that it is an “accredited
investor,” as such term is defined in the National Instrument
45-106—Prospectus Exemptions or Section 73.3(1) of the Securities
Act (Ontario), as applicable, and is a “permitted client,” as such
term is defined in National Instrument 31-103—Registration
Requirements, Exemptions and Ongoing Registrant Obligations.
Cigna will enter into a registration rights agreement on the
first issuance date of the New Cigna Notes, pursuant to which Cigna
will agree to use its commercially reasonable efforts to file an
exchange offer registration statement with the Securities and
Exchange Commission (the “SEC”) to allow holders of New
Cigna Notes to exchange their New Cigna Notes for the same
principal amount of exchange notes of the same series, which will
have terms identical in all material respects to such New Cigna
Notes, except that the exchange notes will not contain transfer
restrictions.
The complete terms and conditions of the Exchange Offers and
Consent Solicitations are described in the Offering Memorandum and
Consent Solicitation Statement, copies of which may be obtained by
Eligible Holders by contacting D.F. King Co., Inc., the exchange
agent and information agent in connection with the Exchange Offers
and Consent Solicitations, at: (800) 499-8541 (toll free) or: (212)
269-5550 (bankers and brokers call collect) or email at
cigna@dfking.com. The Eligibility Letter is available
electronically at: www.dfking.com/cigna.
About Cigna
Cigna Corporation (NYSE: CI) is a global health service company
dedicated to improving the health, well-being and peace of mind of
those we serve. Cigna delivers choice, predictability,
affordability and access to quality care through integrated
capabilities and connected, personalized solutions that advance
whole person health. All products and services are provided
exclusively by or through operating subsidiaries of Cigna
Corporation, including Cigna Health and Life Insurance Company,
Cigna Life Insurance Company of New York, Connecticut General Life
Insurance Company, Express Scripts companies or their affiliates,
and Life Insurance Company of North America. Such products and
services include an integrated suite of health services, such as
medical, dental, behavioral health, pharmacy, vision, supplemental
benefits, and other related products including group life, accident
and disability insurance.
Cigna maintains sales capability in over 30 countries and
jurisdictions, and has more than 165 million customer relationships
throughout the world.
Forward Looking
Statements
Information included or incorporated by reference in this
communication, and information which may be contained in other
filings with the SEC and press releases or other public statements,
contains or may contain forward-looking statements. Forward-looking
statements are based on Cigna’s expectations and projections about
future trends, events and uncertainties as of the date the
statement is made and are not statements of historical fact.
Forward-looking statements may include, among others, statements
concerning future financial or operating performance, including
Cigna’s ability to deliver affordable, personalized and innovative
solutions for Cigna’s customers and clients; future growth,
business strategy, strategic or operational initiatives; economic,
regulatory or competitive environments, particularly with respect
to the pace and extent of change in these areas; financing or
capital deployment plans and amounts available for future
deployment; Cigna’s prospects for growth in the coming years; the
merger (“Merger”) with Express Scripts Holding Company; and
other statements regarding Cigna’s future beliefs, expectations,
plans, intentions, financial condition or performance. You may
identify forward-looking statements by the use of words such as
“believe,” “expect,” “plan,” “intend,” “anticipate,” “estimate,”
“predict,” “potential,” “may,” “should,” “will” or other words or
expressions of similar meaning, although not all forward-looking
statements contain such terms.
Forward-looking statements are subject to risks and
uncertainties, both known and unknown, that could cause actual
results to differ materially from those expressed or implied in
forward-looking statements. Such risks and uncertainties include,
but are not limited to:
- Cigna’s ability to achieve its financial, strategic and
operational plans or initiatives;
- Cigna’s ability to predict and manage medical and pharmacy
costs and price effectively;
- Cigna’s ability to adapt to changes or trends in an evolving
and rapidly changing industry;
- Cigna’s ability to effectively differentiate its products and
services from those of its competitors and maintain or increase
market share;
- Cigna’s ability to develop and maintain good relationships with
physicians, hospitals, other health care providers and
pharmaceutical manufacturers;
- the impact of modifications to Cigna’s operations and
processes;
- Cigna’s ability to identify potential strategic acquisitions or
transactions and realize the expected benefits (including
anticipated synergies) of such transactions in full or within the
anticipated time frame, including with respect to the Merger, as
well as its ability to integrate operations, resources and
systems;
- the substantial level of government regulation over Cigna’s
business and the potential effects of new laws or regulations or
changes in existing laws or regulations;
- the outcome of litigation, regulatory audits, investigations,
actions and/or guaranty fund assessments; uncertainties surrounding
participation in government-sponsored programs such as
Medicare;
- the effectiveness and security of Cigna’s information
technology and other business systems;
- the impact of Cigna’s debt service obligations on the
availability of funds for other business purposes;
- unfavorable industry, economic or political conditions,
including foreign currency movements;
- acts of war, terrorism, natural disasters or pandemics;
and
- other risks and uncertainties that are described in SEC reports
filed by Cigna.
You should carefully consider these and other relevant factors,
including those risk factors in this communication and other risks
and uncertainties that affect the business Cigna described in its
filings with the SEC, when reviewing any forward-looking statement.
These factors are noted for investors as permitted under the
Private Securities Litigation Reform Act of 1995. Investors should
understand it is impossible to predict or identify all such factors
or risks. As such, you should not consider the foregoing list, or
the risks identified in SEC filings, to be a complete discussion of
all potential risks or uncertainties, and should not place undue
reliance on forward-looking statements. Forward-looking statements
speak only as of the date they are made, are not guarantees of
future performance or results, and are subject to risks,
uncertainties and assumptions that are difficult to predict or
quantify. Cigna undertakes no obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise, except as may be required by law.
No Offer or Solicitation
This communication is for informational purposes only and not
intended to and does not constitute an offer to subscribe for, buy
or sell, the solicitation of an offer to subscribe for, buy or sell
or an invitation to subscribe for, buy or sell any securities in
any jurisdiction, nor shall there be any sale, issuance or transfer
of securities in any jurisdiction in contravention of applicable
law.
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version on businesswire.com: https://www.businesswire.com/news/home/20190926005481/en/
INVESTOR RELATIONS CONTACT: William McDowell 215-761-4198
william.mcdowell2@cigna.com
MEDIA CONTACT: Ellie Polack 860-902-4906
elinor.polack@cigna.com
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