Item 1.01. Entry into a Material Definitive Agreement.
On November 2, 2020, Molina Healthcare, Inc., a Delaware corporation (the
"Company"), entered into a purchase agreement (the "Purchase Agreement"), by and
between the Company and BofA Securities, Inc., acting as representative of the
several initial purchasers named in Schedule A thereto (the "Initial
Purchasers"), relating to the issuance and sale of $650 million aggregate
principal amount of the Company's senior notes due 2030 (the "Notes"), in a
private offering to individuals reasonably believed to be "qualified
institutional buyers" pursuant to Rule 144A under the Securities Act of 1933, as
amended (the "Securities Act"), and to certain persons outside the United States
in reliance on Regulation S under the Securities Act. The offering is expected
to close on or about November 17, 2020, subject to the satisfaction of customary
closing conditions (the "Settlement Date").
The Notes will bear interest at a rate of 3.875% per year. Interest will be
payable semi-annually in arrears on May 15 and November 15 of each year,
commencing May 15, 2021, and will accrue from the Settlement Date. The Notes
will mature on November 15, 2030.
The Company estimates that after deducting fees and expenses payable by the
Company, the net proceeds from the issuance and sale of the Notes will be
approximately $641 million (the "Net Proceeds"). The Company intends to use
approximately $346 million of the Net Proceeds to redeem the entire $330 million
outstanding principal amount of its 4.875% senior notes due 2025, and to pay
related fees and expenses. The Company intends to use the remaining Net
Proceeds for general corporate purposes, which may include repayment of
indebtedness, share repurchases, funding for acquisitions, capital expenditures,
additions to working capital and capital contributions to the Company's health
plan subsidiaries to meet statutory requirements in new or existing states.
The Purchase Agreement contains customary representations, warranties and
agreements by the Company. In addition, the Company has agreed to indemnify the
Initial Purchasers against certain liabilities, as more particularly described
in Section 7(a) of the Purchase Agreement.
The foregoing summary of the Purchase Agreement does not purport to be complete
and is subject to, and qualified in its entirety by, the full text of the
Purchase Agreement. A copy of the Purchase Agreement is being filed as Exhibit
1.1 hereto and is incorporated herein by reference.
Item 8.01. Other Events.
On November 2, 2020, the Company issued a press release announcing the pricing
of the Notes. A copy of the press release is being filed as Exhibit 99.1 to
this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
1.1 Purchase Agreement, dated November 2, 2020, by and among the Company
and BofA Securities, Inc., as representative of the several initial
purchasers named in Schedule A thereto
99.1 Press release of Molina Healthcare, Inc. issued November 2, 2020
104 Cover page information from Molina Healthcare, Inc.'s Current Report on
Form 8-K filed on November 3, 2020 formatted in iXBRL (Inline Extensible
Business Reporting Language)
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