The Cigna Group Announces Pricing Terms of Tender Offers

Rhea-AI Summary

Cigna Group (CI) announces pricing terms for its tender offers to purchase senior notes with specific details on Total Consideration, Early Tender Payment, and Tender Offer amounts. The offers include Any and All Tender Offer and Maximum Tender Offer, with detailed information on the securities, acceptance priority levels, and reference U.S. Treasury securities.

Insights

Financial Analyst

The announcement by The Cigna Group regarding the pricing terms of its tender offers for various senior notes is significant for investors and analysts monitoring the company's capital structure and financial strategy. A Financial Analyst would examine the impact of these tender offers on the company's interest expenses and debt profile. The offers indicate a proactive approach to managing debt maturities and potentially reducing the cost of debt. By repurchasing notes due in the near term, Cigna may be aiming to take advantage of current market conditions to refinance at lower rates or improve its debt maturity schedule.

The specified fixed spreads and Total Consideration for each series of notes provide insight into the premium that Cigna is willing to pay over the benchmark U.S. Treasury yields. This premium reflects the market's perception of the company's creditworthiness and the current interest rate environment. The acceptance of notes based on priority levels suggests a targeted approach to liability management, focusing on specific tranches of debt that may offer the most financial benefit when repurchased.

Furthermore, the fact that the Maximum Tender Offer has been fully subscribed as of the Early Tender Date indicates strong demand from note holders and could be interpreted as a positive signal regarding investor confidence in Cigna's financial position and outlook. However, it is also important to monitor the liquidity position of the company post-offer to ensure that it maintains sufficient cash reserves for operational needs.

Debt Capital Markets Expert

A Debt Capital Markets Expert would focus on the implications of the tender offers for the broader debt capital markets. Cigna's decision to repurchase debt before maturity can be seen as a move to optimize its capital structure amid fluctuating interest rates. The expert would analyze the fixed spreads and reference yields to assess market sentiment and the cost of refinancing for the company. The spreads above the reference U.S. Treasury securities are indicative of the risk premium investors require to hold Cigna's debt over risk-free government debt.

The tender offers, particularly the Any and All Tender Offer with a fixed spread of 20 basis points, suggest that Cigna is taking a conservative approach, likely aiming to mitigate refinancing risk and interest rate risk. The selection of notes with varying maturities, from 2024 to 2030, provides a window into the company's strategic financial planning, indicating an effort to smooth out debt obligations over time rather than facing significant bullet maturities.

An expert would also consider the potential impact on the secondary market for Cigna's debt. The tender offers may lead to tighter bid-ask spreads and could influence the pricing of Cigna's other outstanding securities. Additionally, the expert would evaluate the potential signaling effect of such offers, as they could influence perceptions of Cigna's credit quality and the likelihood of similar actions by other issuers in the healthcare sector or more broadly.

Market Research Analyst

A Market Research Analyst would evaluate the tender offers in the context of market trends and investor sentiment. Given the early subscription of the Maximum Tender Offer, it's clear that the market has responded favorably to Cigna's initiative, which could be seen as a reflection of the current appetite for corporate debt repurchase programs. This trend is often associated with a company's strong financial health and a management team that is actively engaged in optimizing the balance sheet.

The analyst would also assess the potential impact on Cigna's stock market performance. While the tender offers primarily affect debt holders, equity investors often view such financial maneuvers as a sign of a company's strength and commitment to reducing leverage, which can be positive for stock valuation. The analyst would also compare Cigna's actions with those of its peers to determine if this reflects a broader industry movement or a company-specific strategy.

Moreover, the timing and terms of the tender offers could be analyzed in relation to historical and projected interest rate movements. A market research analyst would consider how these factors might affect Cigna's future borrowing costs and overall financial strategy, potentially influencing investor expectations and the company's ability to access capital markets in the future.

BLOOMFIELD, Conn., Feb. 20, 2024 /PRNewswire/ -- The Cigna Group (NYSE: CI) announced today the pricing terms of its previously announced offers to purchase for cash (1) any and all of The Cigna Group's (the "Company") 3.50% Senior Notes due 2024 and Evernorth Health, Inc.'s ("Evernorth") 3.50% Senior Notes due 2024 (collectively, the "Any and All Notes," and such tender offer, the "Any and All Tender Offer") and (2) up to $1,550,000,000 aggregate principal amount (the "Maximum Tender Offer Amount") of the Company's 4.125% Senior Notes due 2025, the Company's 4.500% Senior Notes due 2026, Evernorth's 4.500% Senior Notes due 2026, the Company's 1.250% Senior Notes due 2026, the Company's 3.050% Senior Notes due 2027, Cigna Holding Company's 3.050% Senior Notes due 2027 and the Company's 2.400% Senior Notes due 2030 (collectively, the "Maximum Tender Offer Notes," and such tender offer, the "Maximum Tender Offer"), in each case, validly tendered and accepted by the Company, upon the terms and subject to the conditions set forth in the Offer to Purchase dated February 5, 2024 and as amended by the press release dated the date hereof announcing the early results of the Tender Offers (as defined below) and the upsize of the Maximum Tender Offer (the "Offer to Purchase"). The Any and All Notes and the Maximum Tender Offer Notes are referred to collectively as the "Securities" and the Any and All Tender Offer and the Maximum Tender Offer are referred to collectively as the "Tender Offers."

The "Total Consideration" payable per $1,000 principal amount of each series of Securities validly tendered and accepted for purchase was determined by the Dealer Managers (as named below) based on a spread over a reference U.S. Treasury Security, as set forth in the tables below, in accordance with standard market practice as of 10:00 a.m., New York City time, on February 20, 2024 (the "Price Determination Time") and, as set forth in the tables below, includes an Early Tender Payment of $30. As previously announced, the Company does not expect to accept any of the Company's 3.050% Senior Notes due 2027 or Cigna Holding Company's 3.050% Senior Notes due 2027. Any and All Notes validly tendered and not validly withdrawn will be accepted as set forth in the Offer to Purchase until the Expiration Date (as defined below).

The following table summarizes the material pricing terms for the Tender Offers:

Any and All Tender Offer

Title of Security	CUSIP Numbers	Fixed Spread (bps)	Reference U.S. Treasury Security	Reference Yield	Total Consideration(a)(b)
The Cigna Group's 3.50% Senior Notes due 2024	125523BX7; 125523BW9; U1716AAT4	20	0.250% U.S. Treasury Notes due June 15, 2024	5.406 %	$993.39
Evernorth Health, Inc.'s 3.50% Senior Notes due 2024	30219GAK4	20	0.250% U.S. Treasury Notes due June 15, 2024	5.406 %	$993.39

(a)	Per $1,000 principal amount.
(b)	Total Consideration is based on the Fixed Spread for the applicable series of Securities to the yield of the Reference U.S. Treasury Security for that series as of 10:00 a.m., New York City time, on February 20, 2024. The Total Consideration excludes accrued and unpaid interest on the Securities accepted for purchase and includes an Early Tender Payment of $30.

Maximum Tender Offer

Title of Security	CUSIP Numbers	Acceptance Priority Level(a)	Fixed Spread (bps)	Reference U.S. Treasury Security	Reference Yield	Total Consideration(b)(c)
The Cigna Group's 4.125% Senior Notes due 2025	125523AG5; 40573LAQ9; U4058LAH6	1	45	4.250% U.S. Treasury Notes due January 31, 2026	4.584 %	$985.05
The Cigna Group's 4.500% Senior Notes due 2026	125523BZ2; 125523BY5; U1716AAU1	2	45	4.250% U.S. Treasury Notes due January 31, 2026	4.584 %	$989.92
Evernorth Health, Inc.'s 4.500% Senior Notes due 2026	30219GAM0	2	45	4.250% U.S. Treasury Notes due January 31, 2026	4.584 %	$989.92
The Cigna Group's 1.250% Senior Notes due 2026	125523CP3	3	45	4.250% U.S. Treasury Notes due January 31, 2026	4.584 %	$926.69
The Cigna Group's 2.400% Senior Notes due 2030	125523CL2	5	75	4.000% U.S. Treasury Notes due January 31, 2029	4.231 %	$866.32

(a)	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 (each as defined in the Offer to Purchase and, as applicable, as amended in the Company's previously announced press release dated the date hereof).
(b)	Per $1,000 principal amount.
(c)	Total Consideration is based on the Fixed Spread for the applicable series of Securities to the yield of the Reference U.S. Treasury Security for that series as of 10:00 a.m., New York City time, on February 20, 2024. The Total Consideration excludes accrued and unpaid interest on the Securities accepted for purchase and includes an Early Tender Payment of $30.

 

As previously announced, it is anticipated that payment for the Securities that were validly tendered and accepted for purchase as of 5:00 p.m., New York City time, on February 16, 2024 (the "Early Tender Date") will be made on February 22, 2024.

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"). As previously announced, because the Maximum Tender Offer has been fully subscribed as of the Early Tender Date, the Company does not expect to accept for purchase any Maximum Tender Offer Notes tendered by holders after the Early Tender Date. Any and All Notes validly tendered and not validly withdrawn will be accepted as set forth in the Offer to Purchase until the Expiration Date.

Additional Information

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 successful completion of the Tender Offers 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

What is the ticker symbol for Cigna Group mentioned in the press release?

The ticker symbol for Cigna Group is CI.

What are the pricing terms announced by Cigna Group for its tender offers?

Cigna Group announced the pricing terms for its tender offers to purchase senior notes, including Total Consideration, Early Tender Payment, and Tender Offer amounts.

When do the Tender Offers by Cigna Group expire?

The Tender Offers by Cigna Group will expire at 5:00 p.m., New York City Time, on March 5, 2024.

Who are the Dealer Managers for the Tender Offers announced by Cigna Group?

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 announced by Cigna Group.

What is the contact information for persons with questions regarding the Tender Offers by Cigna Group?

Persons with questions regarding the Tender Offers by Cigna Group should contact J.P. Morgan Securities LLC, Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC, or Wells Fargo Securities, LLC as per the provided contact details.