UnitedHealth Sells $2.5 Billion of Bonds to Finance Amil Stake
UnitedHealth Group Inc. (UNH) raised $2.5 billion in a four-part, dollar-denominated debt offering to help finance the biggest U.S. health insurer’s plan to buy 90 percent of Amil Participacoes SA. (AMIL3)
UnitedHealth sold equal $625 million portions of 0.85 percent, three-year notes that yield 45 basis points more than similar-maturity Treasuries, 1.4 percent, five-year debt with a 65 basis-point spread, 2.75 percent bonds due in February 2023 that pay 95 basis points more than benchmarks and 3.95 percent, 30-year securities with an extra yield of 110 basis points, according to data compiled by Bloomberg.
Proceeds will fund a portion of the $4.9 billion acquisition price, Minnetonka, Minnesota-based UnitedHealth said today in a regulatory filing. The company’s $1.1 billion of 2.875 percent notes maturing in March 2022 traded at 103 cents on the dollar on Oct. 12 to yield 2.5 percent with an 85 basis- point spread over Treasuries, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Buying the Rio de Janeiro-based insurer and hospital chain would give UnitedHealth a stake in the world’s second-biggest emerging economy as U.S. insurers snap up smaller rivals while preparing for tighter profit margins under President Barack Obama’s health-care overhaul.
The new bonds are expected to be rated A3 by Moody’s Investors Service, which signals the debt is subject to low credit risk, Bloomberg data show.
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