Item 1.01.
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Entry into a Material Definitive Agreement.
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A.
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Underwriting Agreement.
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On March 13, 2017, Humana Inc. (the
Company) entered into an underwriting agreement (the Underwriting Agreement) with J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC and U.S. Bancorp
Investments, Inc., as representatives of the several underwriters (together, the Underwriters), pursuant to which the Company agreed to issue and sell to the Underwriters $600,000,000 aggregate principal amount of its 3.950% Senior Notes
due 2027 (the 2027 Senior Notes), and $400,000,000 aggregate principal amount of its 4.800% Senior Notes due 2047 (the 2047 Senior Notes and, together with the 2027 Senior Notes, the Senior Notes), in accordance
with the terms and conditions set forth in the Underwriting Agreement. The 2027 Senior Notes were sold at a public offering price of 99.877% of the aggregate principal amount thereof and the 2047 Senior Notes were sold at a public offering price of
99.905% of the aggregate principal amount thereof.
The sale of the Senior Notes has been registered with the Securities and Exchange
Commission (the Commission) in a registration statement on
Form S-3,
File
No. 333-202623
(the Registration Statement). The terms of the
Senior Notes are described in the Companys Prospectus dated March 9, 2015, as supplemented by a final Prospectus Supplement dated March 13, 2017 as filed with the Commission on March 14, 2017, pursuant to
Rule 424(b)(2) under the Securities Act of 1933, as amended (the Securities Act).
The closing of the sale of the
Senior Notes occurred on March 16, 2017, and the terms of the Senior Notes are described below. The Company estimates that the net proceeds from the sale of the Senior Notes, after deducting the Underwriters discounts and commissions and
estimated offering expenses, will be approximately $988 million.
The Underwriters have performed commercial banking, investment
banking and advisory services for us from time to time for which they have received customary fees and expenses. The Underwriters may, from time to time, engage in transactions with and perform services for us in the ordinary course of their
business. In addition, affiliates of certain of the Underwriters are lenders under our credit facility. We intend to use the net proceeds for general corporate purposes.
A copy of the Underwriting Agreement is filed as Exhibit 1.1 to this Current Report on
Form 8-K
and is incorporated by reference herein. The description of the material terms of the Underwriting Agreement is qualified in its entirety by reference to such exhibit.
B.
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Supplemental Indentures Relating to the Notes
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On March 16, 2017, the
Company completed a public offering of the Senior Notes. The Senior Notes were issued under an indenture dated as of August 5, 2003, by and between the Company and The Bank of New York Mellon Trust Company, N.A. (formerly known as The Bank of
New York Trust Company, N.A) (as successor to The Bank of New York), as trustee (the Trustee) (the Original Indenture) as supplemented by a tenth supplemental indenture, dated as of March 16, 2017, by and between the
Company and the Trustee relating to the 2027 Senior Notes (the Tenth Supplemental Indenture and, together with the Original Indenture, the Tenth Indenture) and an eleventh supplemental indenture, dated as of March 16,
2017, by and between the Company and the Trustee relating to the 2047 Senior Notes (the Eleventh Supplemental Indenture and, together with the Original Indenture, the Eleventh Indenture, the Tenth Indenture and the Eleventh
Indenture are referred to herein as the Indentures). Pursuant to the terms of each of the Indentures, the Senior Notes are unsecured senior obligations of the Company and rank equally with all of the Companys other unsecured,
unsubordinated indebtedness. The 2027 Senior Notes bear interest at an annual rate of 3.950% and the 2047 Senior Notes bear interest at an annual rate of 4.800%. Interest on the Senior Notes is payable by the Company on September 15 and March
15 of each year, beginning on September 15, 2017. The 2027 Senior Notes mature on March 15, 2027 and the 2047 Senior Notes mature on March 15, 2047.
A copy of the Original Indenture was filed as an Exhibit to the Companys Quarterly Report on Form 10-Q for the quarter ended September
30, 2003 and is incorporated by reference herein. A copy of the Tenth Supplemental Indenture is filed as Exhibit 4.2 to this Current Report on Form
8-K
and is incorporated by reference herein. The form of 2027
Senior Notes is filed as Exhibit 4.3 to this Current Report on Form
8-K
and is incorporated by reference herein. A copy of the Eleventh Supplemental Indenture is filed as Exhibit 4.4 to this Current Report on
Form
8-K
and is incorporated by reference herein. The form of 2047 Senior Notes is filed as Exhibit 4.5 to this Current Report on Form
8-K
and is incorporated by
reference herein. The descriptions of the material terms of the Tenth Supplemental Indenture, the 2027 Senior Notes, the Eleventh Supplemental Indenture and the 2047 Senior Notes are qualified in their entirety by reference to such exhibits. In
addition, the legal opinion related to the Notes is attached hereto as Exhibit 5.1 and is incorporated herein by reference.
The Trustee has also been appointed registrar and paying agent with regard to the Senior Notes
and serves the same roles with respect to certain other series of the Companys senior notes. An affiliate of the Trustee is also a lender under the Companys existing credit facility.