Published on 1/30/2023 in the Prospect News Investment Grade Daily.
New Issue: Elevance Health sells $2.6 billion of senior notes in three tranches
By Wendy Van Sickle
Columbus, Ohio, Jan. 30 – Elevance Health, Inc. priced $2.6 billion of fixed-rate senior notes (Baa2/A/BBB) in three tranches on Monday, according to an FWP filed with the Securities and Exchange Commission.
The company sold $500 million of 4.9% three-year notes at a spread of 97 basis points over Treasuries. These notes priced at 99.895 to yield 4.938%.
Elevance additionally priced $1 billion of 4.75% 10-year notes with a 122 bps spread over Treasuries. These notes priced at 99.841 to yield 4.77%.
Also, Elevance sold $1.1 billion of 5.125% 30-year notes at a spread of 147 bps over Treasuries. These notes priced at 99.634 to yield 5.149%.
Each tranche will feature a make-whole call followed by a par call.
The notes also have change-of-control puts at 101.
Goldman Sachs & Co. LLC, Barclays and J.P. Morgan Securities LLC were the active bookrunners. Citigroup Global Markets Inc. and Mizuho Securities USA LLC are the passive bookrunning managers for the offering.
Proceeds will be used for working capital and for general corporate purposes, including funding of acquisitions, repayment of short-term and long-term debt, and repurchase of common stock under its share repurchase program.
Formerly known as Anthem, Inc., Indianapolis-based Elevance is a health benefits company.
| Issuer: | Elevance Health, Inc.
|
| Amount: | $2.6 billion
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| Issue: | Senior notes
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| Bookrunners: | Goldman Sachs & Co. LLC, Barclays and J.P. Morgan Securities LLC (active) and Citigroup Global Markets Inc. and Mizuho Securities USA LLC (passive)
|
| Senior co-managers: | BofA Securities, Inc., Credit Suisse Securities (USA) LLC, Deutsche Bank Securities Inc., Morgan Stanley & Co. LLC, PNC Capital Markets LLC, Truist Securities, Inc., U.S. Bancorp Investments, Inc. and Wells Fargo Securities, LLC
|
| Junior co-managers: | BNY Mellon Capital Markets, LLC. and Huntington Securities, Inc.
|
| Trustee: | Bank of New York Mellon Trust Co., NA
|
| Counsel to issuer: | Hogan Lovells US LLP with assistance on Indiana law from Faegre Drinker Biddle & Reath LLP
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| Counsel to underwriters: | Davis Polk & Wardwell LLP
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| Change-of-control put: | At 101
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| Pricing date: | Jan. 30
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| Settlement date: | Feb. 8
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| Ratings: | Moody’s: Baa2
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| S&P: A
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| Fitch: BBB
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| Distribution: | SEC registered
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|
|
| Notes due 2026
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| Amount: | $500 million
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| Maturity: | Feb. 8, 2026
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| Coupon: | 4.9%
|
| Price: | 99.895
|
| Yield: | 4.938%
|
| Spread: | Treasuries plus 97 bps
|
| Call feature: | Make-whole call at Treasuries plus 15 bps prior to Feb. 8, 2024, then a par call
|
| Cusip: | 28622HAA9
|
|
|
| Notes due 2033
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| Amount: | $1 billion
|
| Maturity: | Feb. 15, 2033
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| Coupon: | 4.75%
|
| Price: | 99.841
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| Yield: | 4.77%
|
| Spread: | Treasuries plus 122 bps
|
| Call feature: | Make-whole call at Treasuries plus 20 bps prior to Nov. 15, 2032, then a par call
|
| Cusip: | 28622HAB7
|
|
|
| Notes due 2053
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| Amount: | $1.1 billion
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| Maturity: | Feb. 15, 2053
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| Coupon: | 5.125%
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| Price: | 99.634
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| Yield: | 5.149%
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| Spread: | Treasuries plus 147 bps
|
| Call feature: | Make-whole call at Treasuries plus 25 bps prior to Aug. 15, 2052, then a par call
|
| Cusip: | 28622HAC5
|
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