Item 8.01 Other Events.
The Notes Offering
On May 5, 2020, Anthem, Inc. (the "Company") closed its sale of $400 million
aggregate principal amount of additional senior notes pursuant to a reopening of
its existing 2.375% Notes due 2025 (the "2025 Notes"), $1,100 million aggregate
principal amount of its 2.250% Notes due 2030 (the "2030 Notes") and
$1,000 million aggregate principal amount of its 3.125% Notes due 2050 (the
"2050 Notes" and, together with the 2025 Notes and the 2030 Notes, the "Notes")
pursuant to an Underwriting Agreement, dated April 30, 2020 (the "Underwriting
Agreement"), among the Company and BofA Securities, Inc., Wells Fargo
Securities, LLC and Deutsche Bank Securities Inc., as representatives of the
several underwriters named on Exhibit A thereto (the "Underwriters"). The Notes
have been registered under the Securities Act of 1933, as amended (the "Act")
pursuant to a registration statement on Form S-3 (File No. 333-221824)
previously filed with the Securities and Exchange Commission under the Act.
The Company received proceeds of approximately $2,483 million from the sale of
the Notes after deducting underwriting discounts and its offering expenses. The
Company intends to use the net proceeds for working capital and for general
corporate purposes, including, but not limited to, repayment of short-term and
long-term debt, the repurchase of its common stock pursuant to its share
repurchase program and to fund acquisitions. The Indenture (as defined below)
does not prohibit or limit the incurrence of indebtedness and other liabilities
by the Company or its subsidiaries.
The Notes have been issued pursuant to an Indenture, dated as of November 21,
2017 (the "Indenture"), between the Company and The Bank of New York Mellon
Trust Company, N.A., as trustee (the "Trustee"). Interest on the 2025 Notes will
be deemed to have accrued from January 15, 2020 and is payable semi-annually in
arrears on January 15 and July 15 of each year, commencing July 15, 2020. Each
interest payment on the 2025 Notes will be made to the persons who are
registered holders of the 2025 Notes at the close of business on the immediately
preceding January 1 or July 1 (whether or not a Business Day), as applicable.
Interest on the 2030 Notes and the 2050 Notes is payable semi-annually in
arrears on May 15 and November 15 of each year, commencing November 15, 2020.
Each interest payment on the 2030 Notes and the 2050 Notes will be made to the
persons who are registered holders of such Notes at the close of business on the
immediately preceding May 1 or November 1 (whether or not a Business Day), as
applicable. Interest, in each case, will be computed on the basis of a 360-day
year of twelve 30-day months.
The Notes may be declared immediately due and payable by the Trustee or the
holders of 25% of the principal amount of the Notes of the affected series if an
event of default occurs under the Indenture and has not been cured. An event of
default generally means that the Company (1) fails to pay the principal or any
premium on a Note on its due date, (2) does not pay interest on a Note within 30
days of its due date, (3) remains in breach of any other term of the Indenture
for 90 days after its receipt of written notice of such failure or (4) files for
bankruptcy or certain other events in bankruptcy, insolvency or reorganization
occurs.
The 2025 Notes will mature on January 15, 2025, the 2030 Notes will mature on
May 15, 2030 and the 2050 Notes will mature on May 15, 2050. Prior to (i) with
respect to the 2025 Notes, December 15, 2024 (one month prior to the maturity
date of such notes), (ii) with respect to the 2030 Notes, February 15, 2030
(three months prior to the maturity date of such notes) and (ii) with respect to
the 2050 Notes, November 15, 2049 (six months prior to the maturity date of such
notes) (each such date, a "Par Call Date"), the Company will have the right to
redeem the Notes of any such series, in whole at any time or in part from time
to time, at a redemption price equal to the greater of (1) 100% of the principal
amount of the Notes to be redeemed and (2) the sum of the present values of the
remaining scheduled payments of principal and interest on the applicable Notes
to be redeemed (assuming that the such Notes matured on their applicable Par
Call Date), discounted to the date of redemption on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate, as defined in the Indenture, plus 20 basis points in the case of the 2025
Notes, 30 basis points in the case of the 2030 Notes and 30 basis points in the
case of the 2050 Notes, plus, in each case, accrued and unpaid interest thereon
to the date of redemption.
On or after the applicable Par Call Date for the 2025 Notes, the 2030 Notes and
the 2050 Notes, the Notes of such series are redeemable at the Company's option,
in whole at any time or in part from time to time, at a redemption price equal
to 100% of the principal amount of the Notes to be redeemed, plus accrued and
unpaid interest on the principal amount of such Notes being redeemed to such
redemption date.
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Unless the Company has exercised its right to redeem the 2025 Notes, the 2030
Notes and the 2050 Notes in full as described above, upon the occurrence of both
(1) a change of control of the Company and (2) a downgrade of a series of the
Notes below an investment grade rating by each of Moody's Investors Services,
Inc., S & P Global Ratings and Fitch Ratings, Inc. within a specified period,
the Company will be required to make an offer to purchase all of the Notes of
such series at a price equal to 101% of the principal amount of such Notes, plus
any accrued and unpaid interest to the date of repurchase.
Certain of the Underwriters and their affiliates are full service financial
institutions that have engaged in, and may in the future engage in, investment
banking and other commercial dealings in the ordinary course of business with
the Company and its affiliates, for which they have received, or may in the
future receive, customary fees and commissions.
The foregoing description of the issuance and sale does not purport to be
complete and is qualified in its entirety by reference to the Underwriting
Agreement, which is incorporated by reference hereto as Exhibit 1.1, and the
Indenture, which is filed as Exhibit 4.1 to the Company's Current Report on Form
8-K filed on November 21, 2017.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
The following exhibits are being filed herewith:
Exhibit
No. Exhibit
1.1 Underwriting Agreement, dated as of April 30, 2020, among Anthem,
Inc. and BofA Securities, Inc., Wells Fargo Securities, LLC and
Deutsche Bank Securities Inc.
4.1 Form of the 2.375% Notes due 2025 (incorporated by reference to
Exhibit 4.1 to the Company's Current Report on Form 8-K filed on
September 9, 2019)
4.2 Form of the 2.250% Notes due 2030
4.3 Form of the 3.125% Notes due 2050
5.1 Opinion of Hogan Lovells US LLP
5.2 Opinion of Faegre Drinker Biddle & Reath LLP
23.1 Consent of Hogan Lovells US LLP (included in the opinion filed as
Exhibit 5.1)
23.2 Consent of Faegre Drinker Biddle & Reath LLP (included in the
opinion filed as Exhibit 5.2)
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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