| Item 1.01 |
Entry into a Material Definitive Agreement.
|
On November 7, 2022, Humana Inc. (the “Company”) entered into
an underwriting agreement (the “Underwriting Agreement”) with BofA
Securities, Inc., Goldman Sachs & Co. LLC, J.P. Morgan
Securities LLC and PNC Capital Markets LLC, as representatives of
the several underwriters (together, the “Underwriters”), pursuant
to which the Company agreed to issue and sell to the Underwriters
$500 million aggregate principal amount of its 5.750% Senior
Notes due 2028 (the “2028 Senior Notes”) and $750 million
aggregate principal amount of its 5.875% Senior Notes due 2033 (the
“2033 Senior Notes” and, together with the 2028 Senior Notes, the
“Senior Notes”), in accordance with the terms and conditions set
forth in the Underwriting Agreement. The 2028 Senior Notes were
sold at a public offering price of 99.705% of the aggregate
principal amount thereof and the 2033 Senior Notes were sold at a
public offering price of 99.508% 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 Form S-3, File No. 333-254041 (the “Registration
Statement”). The terms of the Senior Notes are described in the
Company’s Prospectus dated March 9, 2021, as supplemented by a
final Prospectus Supplement dated November 7, 2022 as filed
with the Commission on November 8, 2022, pursuant to Rule
424(b)(5) under the Securities Act of 1933, as amended (the
“Securities Act”).
The Senior Notes are unsecured senior obligations of the Company
and rank equally with all of the Company’s other unsecured,
unsubordinated indebtedness. The 2028 Senior Notes bear interest at
an annual rate of 5.750% and the 2033 Senior Notes bear interest at
an annual rate of 5.875%. Interest on the Senior Notes is payable
by the Company on March 1 and September 1 of each year,
beginning on March 1, 2023. The 2028 Senior Notes mature on
March 1, 2028 and the 2033 Senior Notes mature on
March 1, 2033. The closing of the sale of the Senior Notes is
expected to occur on November 22, 2022, subject to customary
closing conditions. 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 $1.232 billion.
The Underwriters and their affiliates have performed commercial
banking, investment banking and advisory services for the Company
from time to time for which they have received customary fees and
expenses. The Underwriters and their affiliates may, from time to
time, engage in transactions with and perform services for the
Company in the ordinary course of their business. In addition,
certain affiliates of the Underwriters are lenders under the
Company’s revolving credit facility, 364-day credit facility and term loans,
and the Underwriters or their affiliates may hold the Company’s
existing senior notes for their own accounts.
The Company intends to use the net proceeds from the Senior Notes
offerings to repay its 2.900% Senior Notes due 2022 and its 3.150%
Senior Notes due 2022 at maturity during December 2022. The Company
intends to use the remainder of the net proceeds from the Senior
Notes offerings for general corporate purposes, which may include
the repayment of borrowings under the Company’s commercial paper
program.
A copy of the Underwriting Agreement is filed as Exhibit 1.1 to
this Current Report on Form 8-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.
The Company issued a press release announcing the pricing of the
offering of the Senior Notes, which is attached as Exhibit 99.1 to
this Current Report on Form 8-K and is hereby incorporated by
reference herein.