On March 4, 2020 Cigna Corporation (NYSE: CI) reported that it has commenced tender offers to purchase for cash (1) up to $500,000,000 (the "2022 Notes Aggregate Maximum Principal Amount") of Cigna Holding Company’s 4.000% Senior Notes due 2022, Cigna Corporation’s 4.000% Senior Notes due 2022, Express Scripts Holding Company’s 3.900% Senior Notes due 2022 and Cigna Corporation’s 3.900% Senior Notes due 2022 (collectively, the "2022 Existing Notes," and such tender offer, the "2022 Notes Tender Offer") and (2) up to $950,000,000 (the "2023 Notes Aggregate Maximum Principal Amount") of Cigna Holding Company’s 7.650% Senior Notes due 2023, Cigna Corporation’s 7.650% Senior Notes due 2023 and 3.750% Senior Notes due 2023, Express Scripts Holding Company’s 3.000% Senior Notes due 2023 and Cigna Corporation’s 3.000% Senior Notes due 2023 (collectively, the "2023 Existing Notes," and such tender offer, the "2023 Notes Tender Offer"), in each case, validly tendered and accepted by Cigna, upon the terms (including the Aggregate Maximum Principal Amount Allocation (as defined below)) and subject to the conditions set forth in the Offer to Purchase dated March 4, 2020 and the related Letter of Transmittal (collectively, the "Offer to Purchase") (Press release, Cigna , MAR 4, 2020, View Source [SID1234555189]). The 2022 Existing Notes and the 2023 Existing Notes are referred to collectively as the "Securities" and the 2022 Notes Tender Offer and the 2023 Notes Tender Offer are referred to collectively as the "Tender Offers."
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The Tender Offers
The following table summarizes the material pricing terms for the Tender Offers:
Denotes a series of Securities for which the calculation of the applicable Total Consideration will be performed using the present value of such Securities as determined at the Price Determination Time (as defined in the Offer to Purchase) as if the principal amount of Securities had been due on the applicable par call date of such series rather than the maturity date.
Denotes a series of Securities for which the calculation of the applicable Total Consideration will be performed using the present value of such Securities as determined at the Price Determination Time as if the principal amount of Securities had been due on the applicable par call date of such series rather than the maturity date.
As further described in the Offer to Purchase, for each of the Tender Offers Cigna will accept for purchase validly tendered Securities in the order of the related "Acceptance Priority Level" set forth in the tables above, beginning at the lowest numerical value first; provided that Securities tendered at or before the Early Tender Date will be accepted for purchase in priority to Securities tendered after the Early Tender Date, even if such Securities tendered after the Early Tender Date have a higher Acceptance Priority Level. Securities of a series may be subject to proration if the aggregate principal amount of the Securities of such series validly tendered and not validly withdrawn would cause the 2022 Notes Aggregate Maximum Principal Amount or the 2023 Notes Aggregate Maximum Principal Amount, as applicable, to be exceeded, as further described in the Offer to Purchase. In the event that the 2022 Notes Aggregate Maximum Principal Amount or the 2023 Notes Aggregate Maximum Principal Amount, as applicable, is not achieved, Cigna, at its option, may allocate the remaining difference to the other applicable Tender Offer, thereby increasing the 2022 Notes Aggregate Maximum Principal Amount or the 2023 Notes Aggregate Maximum Principal Amount, as applicable, by the amount of such shortfall; provided that in no event shall the sum of the 2022 Notes Aggregate Maximum Principal Amount and the 2023 Notes Aggregate Maximum Principal Amount exceed $1,450,000,000 (unless increased by the Company at its option as further described in the Offer to Purchase) (such allocation, the "Aggregate Maximum Principal Amount Allocation").
The Tender Offers will expire at 11:59 P.M., New York City Time, on March 31, 2020 (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 March 17, 2020 (such time and date, as the same may be extended, the "Withdrawal Deadline") but not thereafter.
Holders of each series of Securities that are validly tendered prior to or at 5:00 P.M., New York City Time, on March 17, 2020 (such time and date, as the same may be extended, the "Early Tender Date") and that are accepted for purchase will receive an amount determined by the Dealer Managers (as described below) based on a spread over the reference U.S. Treasury Security, as set forth in the table above, in accordance with standard market practice as of 9:00 a.m., New York City time, on March 18, 2020 (unless such time is extended) (the "Total Consideration"). The Total Consideration with respect to each series of Securities so calculated includes an "Early Tender Payment" equal to the applicable amount set forth in the tables above under the headings "Early Tender Payment." Holders of Securities that are validly tendered after the Early Tender Date but prior to or at the Expiration Date and that are accepted for purchase will receive in cash the Total Consideration minus the applicable Early Tender Payment.
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 Cigna’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 March 19, 2020, the second 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 April 2, 2020, the second business day after the Expiration Date.
Additional Information
Cigna’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 Cigna of proceeds from a proposed issuance of securities generating net proceeds in an amount that is sufficient, together with cash on hand and/or borrowings under Cigna’s commercial paper facility, 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.
BofA Securities, Goldman Sachs & Co. LLC and Morgan Stanley & Co. 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 BofA Securities at (980) 387-3907 (collect) or (888) 292-0070 (toll-free), Goldman Sachs & Co. LLC at (917) 343-9660 (collect) or (800) 828-3182 (toll-free) and Morgan Stanley & Co. LLC at (212) 761-1057 (collect) or (800) 624-1808 (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. by calling toll-free at (800) 499-8541 (banks and brokers may call collect at (212) 269-5550) or email [email protected].
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.