Aetna details new $1.5 billion five-year revolving credit facility

By Jennifer Chiou

New York, March 28 - Aetna Inc. revealed the specifics of its new $1.5 billion five-year revolving credit agreement with JPMorgan Chase Bank, NA as administrative agent and 20 lenders in an 8-K filing with the Securities and Exchange Commission.

As previously reported, the new revolving facility replaces Aetna's existing $1.5 billion five-year revolving credit agreement.

Interest is from Libor plus 68 basis points to Libor plus 135 bps, depending on Aetna's long-term senior unsecured debt rating. The initial rate is Libor plus 90 bps.

Facility fees range from 7 bps to 15 bps per year, also depending on Aetna's rating. The current facility fee is 10 bps.

JPMorgan, Bank of America, NA and Citibank NA led the bank syndicate.

Aetna has the option to expand commitments to a maximum of $2 billion.

The facility has a $200 million limit for letters of credit.

The new agreement expires on March 27, 2017, but it may be extended by one year on each March 27 for commitments represented by lenders consenting to any extension.

The agreement required the company to maintain its ratio of total debt to adjusted consolidated capitalization as of the end of each fiscal quarter ending after March 27 at or below 0.5 to 1.0.

The Hartford, Conn.-based health insurance company previously said the facility provides it with continued financial flexibility aligned with its long-term capital strategy.

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