UnitedHealth Group, the managed-care insurer with operations in Hartford, is moving to retire as much as $750 million of its outstanding debt to reset its balance sheet and cut debt costs.
The Minneapolis-based company set up a “Dutch auction” cash tender to buy back up to $200 million of its short-term notes and up to $550 million of intermediate-term notes.
Four issues of short-term debt securities and six issues of intermediate debt are covered in the offer set to expire at midnight on Feb. 3, UnitedHealth said.
In a Dutch auction, the asking price of the debt or assets offered is lowered until there are enough bids to sell it all.
UnitedHealth said it will use cash on hand and proceeds from the issuance of commercial paper to fund the debt purchase. The company says it doesn’t anticipate any charges to earnings to retire the tendered notes.
The insurer said the buyback of debt will improve the match of floating rate assets and liabilities on its balance sheet, as well as trim its cost of debt service.
Bank of America Merrill Lynch, Citigroup, J.P. Morgan Chase and Royal Bank of Scotland are dealer managers for the offer. Global Bondholder Services Corp. is the information agent and depositary for the tender offers.
