) announced that its public offering of 3.15% senior notes worth
$600 million, maturing in December 2022, and 4.625% senior notes
worth $400 million, due December 2042, has been completed. The
3.15% senior notes have been issued at a 0.39% discount, while
the 4.625% senior notes have been issued at a 0.063%
Humana will use the proceeds from the notes to pay the
purchase consideration for the acquisition of
Metropolitan Health Networks Inc.
), fees and expenses related to this acquisition as well as to
repay the latter's outstanding debt. Residual proceeds will be
used for the company's general corporate purposes.
However, Humana will redeem both types of notes in case the
acquisition does not culminate by May 31, 2013 or if the
agreement gets terminated by that date. The notes will be
redeemed at principal plus 1% premium on the principal value.
Additionally, the accrued and unpaid interest on the notes till
the day before the redemption will be paid to the holders of the
Humana announced the agreement to acquire Florida-based
Metropolitan Health - a medical services organization - in
November 2012. The purchase consideration amounts to $850
million, excluding transaction costs. Accordingly, Humana will
make a cash payment of $11.25 per Metropolitan Health share to
the shareholders of the latter. In addition to the proceeds from
the issuance, the company will use its available cash balance to
finance the acquisition.
Currently, the shares of Humana carry a Zacks #3 Rank (Hold).
We maintain a long-term 'Neutral' recommendation on the
HUMANA INC NEW (HUM): Free Stock Analysis
METRO HLTH NET (MDF): Free Stock Analysis
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