Back to top

Analyst Blog

Last week, Humana Inc. (HUM - Analyst Report) 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% discount.

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 note.

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 stock.

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
CENTURY ALU… CENX 22.53 +4.50%
ERBA DIAGNO… ERB 2.91 +4.30%
PLANAR SYST… PLNR 4.31 +3.86%
MALLINCKROD… MNK 72.17 +3.83%
GTT COMMUNI… GTT 12.06 +3.52%