Cigna to buy $1 billion of five note series in oversubscribed tender

By Susanna Moon

Chicago, Sept. 19 – Cigna Corp. announced the early tender results in the oversubscribed offer to buy up to $1 billion principal amount of notes from seven series of its debt that began Sept. 5.

The early tender count is as follows, with the notes listed in descending order of priority of acceptance and pricing for each $1,000 principal amount:

• $37,786,000 of the $83.14 million of 8.3% step down notes due 2033 at a price of $1,480.26 using a fixed spread of 115 basis points over the 3% Treasury due May 2047 for a reference yield of 2.810%;

• $309,502,000 of the $500 million of 6.15% notes due 2036 at a price of $1,319.29 using a fixed spread of 98 basis points over the 3% Treasury due May 2047 for a reference yield of 2.810%;

• $179,477,000 of the $300 million of 5.875% notes due 2041 at a price of $1,314.38 using a fixed spread of 100 bps over the 3% Treasury due May 2047 for a reference yield of 2.810%;

• $432,718,000 of the $750 million of 5.375% notes due 2042 at a price of $1,253.19 using a fixed spread of 95 bps over the 3% Treasury due May 2047 for a reference yield of 2.810%;

• $206,799,000 of the $300 million of 7.875% debentures due 2027 at a price of $1,391.90 using a fixed spread of 90 bps over the 2.25% Treasury due August 2027 for a reference yield of 2.238%;

• $1,535,000 of the $16.86 million of 8.3% notes due 2023 at a price of $1,276.86 using a fixed spread of 85 bps over the 3% Treasury due August 2022 for a reference yield of 1.832%; and

• $44,177,000 of the $100 million of 7.65% notes due 2023 at a price of $1,258.99 using a fixed spread of 70 bps over the 3% Treasury due August 2022 for a reference yield of 1.832%.

Pricing was set at 2 p.m. ET on Sept. 18.

All the prices include an early tender payment of $30.00 per $1,000 that will only be paid to holders who tender by 5 p.m. ET on Sept. 18.

Cigna will also pay accrued interest up to but excluding the settlement date.

Because the offer cap has been exceeded, Cigna expects to accept tenders for all of the 8.3% step down notes due 2033, 6.15% notes due 2036, 5.875% notes due 2041 and 5.375% notes due 2042; the 7.875% debentures due 2027 using a proration factor of about 20%; and none of the 8.3% notes due 2023 or 7.65% notes due 2023, according to a company update on Tuesday.

The tender had been set to end at 11:59 p.m. ET on Oct. 2, but because the offer has been fully subscribed, no more notes will be purchased in the offer.

Tendered securities may not be withdrawn after 5 p.m. ET on Sept. 18.

Early settlement is planned for Sept. 19.

HSBC Securities (USA) Inc. (212 525-5552 or 888 HSBC-4LM), J.P. Morgan Securities LLC (212 834-8553 or 866 834-4666) and MUFG Securities Americas Inc. (212 405-7481 or 877 744-4532) are dealer managers.

D.F. King & Co., Inc. (800 628-8532, 212 269-5550 or ci@dfking.com) is information agent.

Cigna is a Bloomfield, Conn., provider of health benefit plans and insurance.

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