Bloomberg News

Cigna Obtains $2.5 Billion Bridge Loan for Healthspring Purchase

October 24, 2011

Oct. 24 (Bloomberg) -- Cigna Corp., the fifth-largest U.S. insurer, obtained a $2.5 billion bridge loan to support its $3.8 billion acquisition of Healthspring Inc.

Morgan Stanley is providing the financing, which along with available liquidity “is sufficient to fund the acquisition,” the company said today in a statement distributed by Business Wire.

Cigna, based in Bloomfield, Connecticut, plans to raise approximately 20 percent of the purchase price through the issuance of new equity and fund the balance with new debt and available cash.

“Prior to closing we expect to access the capital markets for permanent financing, which will include both debt and equity components,” Ralph Nicoletti, chief financial officer, said in a conference call today. “We believe this financing structure allows us to maintain a strong balance sheet and liquidity.”

Healthspring investors will receive $55 a share, the companies said in the statement. The offer represents a 37 percent premium over Nashville, Tennessee-based Healthspring’s Oct. 21 closing price.

--Editors: Faris Khan, Chapin Wright

To contact the reporter on this story: Krista Giovacco in New York at kgiovacco1@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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