The Cigna Group Announces Commencement of Tender Offers for up to $2.25 Billion in Aggregate Principal Amount of Outstanding Notes
- None.
- The company's obligation to accept for purchase and pay for securities is subject to certain conditions
- The tender offers do not constitute an offer or solicitation in jurisdictions where it is not permitted by law or to any person to whom it is unlawful to make such offer or solicitation
Insights
The announcement by The Cigna Group regarding its tender offers for various senior notes is a strategic financial maneuver aimed at optimizing the company's debt profile. By repurchasing higher-interest notes and potentially issuing new securities at a lower interest rate, the company may reduce its interest expenses, which could positively impact its net income and cash flow statements. The tender offer indicates proactive debt management, which is generally well-received by investors as it can lead to improved credit ratings and reduced risk of default. Financial analysts would closely monitor the acceptance rate of the tender offers, as a high rate of tendering by note holders would suggest confidence in the company's future performance and liquidity position.
From a debt market perspective, the specific details of the tender offers, such as the acceptance priority levels and fixed spreads over corresponding Treasury securities, are crucial for evaluating the attractiveness of the offer to bondholders. The tender sub-caps and the prioritization of certain notes indicate the company's targeted approach to debt reduction. A debt market analyst would assess the market's reception of the tender offers by examining the trading volumes and pricing of these notes post-announcement. The fixed spread is particularly noteworthy, as it reflects the premium Cigna is willing to pay over risk-free Treasury rates, providing insights into the company's cost of borrowing and perceived creditworthiness.
An economist might evaluate the broader economic implications of such a tender offer, considering the current interest rate environment and expectations for future rates. If the tender offers are part of a refinancing strategy in anticipation of rising interest rates, it could signal Cigna's expectations for the economy and its interest rate forecasts. Additionally, the scale of the tender offers and the financial health of The Cigna Group can serve as indicators of corporate confidence and may influence economic predictions in the healthcare sector and the broader corporate bond market.
BLOOMFIELD, Conn., Feb. 5, 2024 /PRNewswire/ -- The Cigna Group (NYSE: CI) announced today that it has commenced tender offers to purchase for cash (1) any and all of The Cigna Group's (the "Company")
The Tender Offers
The following table summarizes the material pricing terms for the Tender Offers:
Any and All Tender Offer
Title of Security | CUSIP | Principal | Early Tender Payment(a) | Fixed Spread | Reference | Bloomberg |
The Cigna Group's | 125523BX7; 125523BW9; U1716AAT4 | 20 |
| FIT3 | ||
Evernorth Health, Inc.'s | 30219GAK4 | 20 |
| FIT3 |
(a) Per |
Maximum Tender Offer
Title of Security | CUSIP | Principal Amount Outstanding | Tender Sub-Cap (a) | Acceptance | Early Tender Payment (c) | Fixed Spread | Reference | Bloomberg |
The Cigna Group's | 125523AG5; 40573LAQ9; U4058LAH6 | 1 | 45 |
| FIT1 | |||
The Cigna Group's | 125523BZ2; 125523BY5; U1716AAU1
| 2 | 45 |
| FIT1 | |||
Evernorth Health, Inc.'s | 30219GAM0 | 2 | 45 |
| FIT1 | |||
The Cigna Group's | 125523CP3
| 3 | 45 |
| FIT1 | |||
The Cigna Group's | 125523AZ3; 125523AY6; U1716AAG2 | 4 | 45 |
| FIT1 | |||
Cigna Holding Company's | 125509BV0 | 4 | 45 |
| FIT1 | |||
The Cigna Group's | 125523CL2 | 5 | 75 |
| FIT1 |
(a) | The 2025-2026 Tender Sub-Cap (as defined below), the 2026-2027 Tender Sub-Cap (as defined below) and the 2030 Tender Sub-Cap (as defined below) represent the maximum aggregate principal amount of such series of Maximum Tender Offer Notes that will be purchased within each Tender Sub-Cap (as defined below). We reserve the right, but are under no obligation, to increase, decrease or eliminate any Tender Sub-Cap at any time, including on or after the Price Determination Time (as defined below) and without extending the Early Tender Date or the Withdrawal Deadline (each as defined below), subject to compliance with applicable law. |
(b) | We will accept the Maximum Tender Offer Notes in the order of their respective Acceptance Priority Level specified in the table above (each, an "Acceptance Priority Level," with "1" being the highest Acceptance Priority Level and "5" being the lowest Acceptance Priority Level), upon the terms and subject to the conditions set forth in the Offer to Purchase, including the Maximum Tender Offer Amount, the 2025-2026 Tender Sub-Cap, the 2026-2027 Tender Sub-Cap and the 2030 Tender Sub-Cap. |
(c) | Per |
As further described in the Offer to Purchase, notwithstanding the Maximum Tender Offer Amount, the Company will accept for purchase (i) no more than
The Tender Offers will expire at 5:00 P.M., New York City Time, on March 5, 2024 (such time and date, as the same may be extended, the "Expiration Date"). Securities tendered may be withdrawn at any time at or prior to 5:00 P.M., New York City Time, on February 16, 2024 (such time and date, as the same may be extended, the "Withdrawal Deadline") but not thereafter. Holders of Securities who tender their Securities after the Withdrawal Deadline may not withdraw their tendered Securities.
Holders of each series of Securities that are validly tendered prior to or at 5:00 P.M., New York City Time, on February 16, 2024 (such time and date, as the same may be extended, the "Early Tender Date") and that are accepted for purchase will receive an amount calculated in accordance with the respective formula described in Annex 1 of the Offer to Purchase (such amount, the "Total Consideration") that would reflect a yield to the maturity date or the par call date, as applicable, of such series of Securities equal to the sum of: (i) the Reference Yield (as defined in the Offer to Purchase) for such series of Securities, plus (ii) the fixed spread for such series of Securities set forth in the tables on the front cover page of the Offer to Purchase (each, a "Fixed Spread"), per
Payment for the Securities that are validly tendered prior to or at the Early Tender Date and that are accepted for purchase may be made, at the Company's option, on the date referred to as the "Early Settlement Date." The Early Settlement Date, if it occurs, will be promptly following the Early Tender Date. It is anticipated that the Early Settlement Date, if it occurs, will be on or around February 22, 2024, the third business day after the Early Tender Date. If the Early Settlement Date occurs, payment for the Securities that are validly tendered after the Early Tender Date and prior to or at the Expiration Date and that are accepted for purchase will be made on the date referred to as the "Final Settlement Date." If no Early Settlement Date occurs, then payment for all the Securities that are validly tendered at any time prior to the Expiration Date and that are accepted for purchase will be made on the Final Settlement Date. The Final Settlement Date will be promptly following the Expiration Date. It is anticipated that the Final Settlement Date for the Securities will be on or around March 8, 2024, the third business day after the Expiration Date.
Additional Information
The Company's obligation to accept for purchase and to pay for Securities validly tendered and not withdrawn pursuant to the Tender Offers is subject to the satisfaction or waiver of certain conditions, which are more fully described in the Offer to Purchase, including, among others, the receipt by the Company of proceeds from a proposed issuance of securities generating net proceeds in an amount that is sufficient to effect the repurchase of the Securities validly tendered and accepted for purchase pursuant to the Tender Offers, including the payment of any premiums, accrued interest (as described below) and costs and expenses incurred in connection therewith.
In addition to the applicable consideration described above, all holders of Securities accepted for purchase will also receive accrued and unpaid interest on Securities validly tendered and accepted for purchase from the applicable last interest payment date up to, but not including, the applicable settlement date.
J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC and Wells Fargo Securities, LLC are the Dealer Managers for the Tender Offers. D.F. King & Co., Inc. has been appointed as the tender agent and information agent for the Tender Offers.
Persons with questions regarding the Tender Offers should contact J.P. Morgan Securities LLC at (212) 834-3554 (collect) or (866) 834-4666 (toll-free), Deutsche Bank Securities Inc. at (212) 250-2955 (collect) or (866) 627-0391 (toll-free), Goldman Sachs & Co. LLC at (212) 902-5962 (collect) or (800) 828-3182 (toll-free) and Wells Fargo Securities, LLC at (704) 410-4759 (collect) or (866) 309-6316 (toll-free). The Offer to Purchase will be distributed to holders of Securities promptly. Holders who would like additional copies of the Offer to Purchase may contact the information agent, D.F. King & Co., Inc. at www.dfking.com/cigna, by calling toll-free at (888) 567-1626 (banks and brokers may call collect at (212) 269-5550) or by email at cigna@dfking.com.
This press release is not an offer to sell or a solicitation of an offer to buy any security. The Tender Offers are being made solely pursuant to the Offer to Purchase.
The Tender Offers do not constitute, and the Offer to Purchase may not be used in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not permitted by law or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.
About The Cigna Group
The Cigna Group (NYSE: CI) is a global health company committed to creating a better future built on the vitality of every individual and every community. We relentlessly challenge ourselves to partner and innovate solutions for better health. The Cigna Group includes products and services marketed under Evernorth Health Services, Cigna Healthcare, or its subsidiaries. The Cigna Group maintains sales capabilities in more than 30 countries and jurisdictions, and has approximately 165 million customer relationships around the world. Learn more at www.thecignagroup.com.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This press release, and oral statements made in connection with this release, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on The Cigna Group's current expectations and projections about future trends, events and uncertainties. These statements are not historical facts. Forward-looking statements may include, among others, statements concerning an anticipated financing and other statements regarding our future beliefs, expectations, plans, intentions, financial condition or performance. You may identify forward-looking statements by the use of words such as "believe," "expect," "project," "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. The discussions in our Annual Report on Form 10-K for the year ended December 31, 2022, including the "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" sections therein, as such discussions may be updated from time to time in our periodic filings with the Securities and Exchange Commission incorporated by reference in the Offer to Purchase, include both expanded discussion of these factors and additional risk factors and uncertainties that could affect the matters discussed in the forward-looking statements. You should not place undue reliance on forward-looking statements, which 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. The Cigna Group 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.
INVESTOR RELATIONS CONTACT:
Ralph Giacobbe
860-787-7968
Ralph.Giacobbe@TheCignaGroup.com
MEDIA CONTACT:
Justine Sessions
860-810-6523
Justine.Sessions@Evernorth.com
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SOURCE The Cigna Group
FAQ
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