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WellPoint plans debt offerings to fund Amerigroup acquisition

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Indianapolis-based WellPoint Inc., the second-biggest U.S. health insurer, is planning a four-part debt offering to help fund its $4.9 billion acquisition of Amerigroup Corp.

The operator of the Blue Cross and Blue Shield insurance plans may sell three-year, five-year, 10-year and 30-year notes as soon as Wednesday, according to a person familiar with the transaction. The offering will be of benchmark size, typically at least $500 million.

Wellpoint plans to use proceeds, along with cash on hand and commercial paper borrowings, to fund the roughly $5 billion acquisition, the company said in a filing Wednesday. The company agreed to acquire Virginia Beach, Va.-based Amerigroup in July, expanding WellPoint’s Medicaid coverage to more than 4.5 million members.

If the acquisition isn’t closed by Sept. 9, 2013, the debt will be repaid at 101 cents on the dollar, said the person, who asked not to be identified because the terms aren’t set.

The new bonds may be rated Baa2, the second-lowest level of investment grade, by Moody’s Investors Service, the person said. Citigroup Inc., Credit Suisse Group AG and Deutsche Bank AG are managing the sale.

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  1. What became of this project? Anyone know?

  2. Scott, could you post an enlarged photo of the exterior of the building? This will be a great addition to Walnut Street. This area will only continue to develop with additions like this. Also, please give us more updates on the "Cultural Trail light" expansion. Also a great move for the city, as long as there is maintenance money set aside.

  3. Great story IBJ! Citizens don't have a real sense of the financial magnitude of supporting Indy's sports and tourism sector. The CIB was a brilliant idea for creating a highly integrated public-private partnership to support this sector from the economic activity it generates. Unfortunately, most folks think the benefits of that economic activity accrue directly to the City budget, and it doesn't. So though the CIB is facing lean times (covering its costs while maintaining minimally acceptable reserves), the City is operating with deficit - less tax revenue than expenses each year - with a very fragile reserve balance. That's why it's so challenging for the City to fund basic needs or new intitatives (e.g. pre-k education; new jail), and some credit rating agencies have downgraded Indy from it's past stellar AAA status. More reporting on City finances would be welcomed.

  4. Sure, I'll admit that it bugs me to see that the IBJ.COM censors it's blog posts almost as much as the D of I does when someone points out the falsehoods and fabrications. _____But I think it bothers me almost as much that Captain/Defender/Disciple get his yanked too. You see, those of us with a sense of integrity, humanity, compassion, and a need for fact based opinion WANT to see all of his screeds posted. It makes our point so much better than we can do it ourselves.

  5. We're conflating two very different topics. Voter fraud is a myth and excessive gun violence is all too real. I just hope rational gunowners decide to stop being shouted down by the, well, let's call them "less rational" ones.

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