ITEM 8.01 OTHER EVENTS
Pursuant to the terms of the indentures (each an “Existing Centene Indenture”) governing the terms of Centene Corporation’s (the “Company”) 4.75% senior notes due 2022, the Company’s 6.125% senior notes due 2024, the Company’s 4.75% senior notes due 2025 and the Company’s 5.375% senior notes due 2026 (collectively, the “Existing Centene Notes”), if:
(a) such series of Existing Centene Notes has a rating equal to or higher than Baa3 (or the equivalent) by Moody’s Investor Service, Inc. or BBB- (or the equivalent) by Standard & Poor’s Ratings Services (“S&P”), in each case, with a stable or better outlook; and
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(b)
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no Default (as such term is defined in the applicable Existing Centene Indenture) has occurred and is continuing under the applicable Existing Centene Indenture;
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then the Company and its restricted subsidiaries (as such term is defined in the applicable Existing Centene Indenture) shall cease to be subject to the following provisions of such Existing Centene Indenture, with respect to such series:
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“Incurrence of Indebtedness and Issuance of Preferred Stock,”
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“Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries,”
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“Limitation on Issuances of Guarantees of Indebtedness,”
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“Transactions with Affiliates” and
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“Asset Sales” (collectively, the “Terminated Covenants”).
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On November 12, 2019, S&P announced that the credit rating of each series of Existing Centene Notes had been upgraded by S&P in satisfaction of the requirement in clause (a) above. As no Default has occurred and is continuing under the Centene Existing Indentures, the covenants described above no longer apply to Centene and its restricted subsidiaries with respect to each series of Existing Centene Notes. As further described in the offering memorandum and consent solicitation statement, dated November 1, 2019, for the exchange offers (the “Exchange Offers”) being made by the Company and concurrent consent solicitations being made by the Company on behalf of WellCare Health Plans, Inc. (“WellCare”), the indentures (the “New Centene Indentures”) governing the new notes (the “New Notes”) to be issued by the Company in connection with the Exchange Offers for any and all of the outstanding 5.25% senior notes due 2025 and 5.375% senior notes due 2026 issued by WellCare will include similar covenant termination provisions and, as such, if the requirements set forth in (a) and (b) above remain satisfied on the settlement date for the Exchange Offers (or are thereafter satisfied), such covenants will also cease to apply to the Company and its restricted subsidiaries with respect to the New Notes and there will be no covenants or provisions contained in the New Centene Indentures which may afford the holders of a series of the New Notes protection in the event of a highly leveraged transaction, reorganization, restructuring, merger or similar transaction involving the Company or its subsidiaries that may adversely affect holders except to the limited extent described below.
The Terminated Covenants will not be reinstated even if the Company subsequently does not satisfy either or both of the requirements set forth in clauses (a) and (b) above. The Company and its restricted subsidiaries shall remain subject to the provisions in the applicable Existing Centene Indenture and in the applicable New Notes Indenture under the caption “- Repurchase at the Option of Holders - Change of Control” and described under the following subheadings:
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“Merger, Consolidation or Sale of Assets” (other than the financial test set forth in clause (4) of that covenant) and
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The foregoing summary of certain provisions of the Existing Centene Indentures and the New Centene Indentures is not complete and is subject to, and is qualified in its entirety by reference to, all provisions of the applicable indenture (including the definitions of terms used therein).