Dive Brief:
- Centene's $2.4 billion offering includes $1.4 billion aggregate principal amount of 5.625% senior notes due 2021 and $1.0 billion aggregate principal amount of 6.125% senior notes due 2024, L.A. Biz reported. The notes will help pay for the proposed $6.8 billion acquisition of Health Net.
- Although the offering is expected to close Feb. 11, it is under close scrutiny by California regulators, and the California Insurance Commissioner has indicated they could reject the deal.
- The Health Net deal was announced in July 2015 and Wells Fargo is putting up $2.7 billion in financing. Existing cash and debt financing are covering the remainder of the cash portion.
Dive Insight:
The proposed deal would add Health Net's Medicare platform to Centene's Medicaid programs, resulting in a company with more than 10 million members and close to $37 billion in revenue.
The deal will also enable Centene to expand Medicaid and Medicare programs in additional states, including Arizona, Oregon, and Washington.
Centene announced preliminary 2015 financial results of $22.8 billion in revenue, and is projecting 2016 revenue to be between $41.2 billion and $42 billion.