Humana will issue up to $1.25 billion in bonds to pay off debt and finance operations, the company announced Tuesday.
The insurer plans to use the proceeds to pay off a $500 million loan from 2021 to offset the cost of its deal to acquire home care company Kindred at Home, and for general corporate purposes.
Humana expects the bonds to be valued at $1.21 billion after accounting for underwriting costs. The offering is expected to close March 13. The company did not immediately respond to an interview request.
The insurer has been restructuring since Medicare Advantage enrollment came in below expectations for the 2022 plan year. Humana is the second-largest Medicare Advantage carrier and had 5.1 million members at the end of the year. The company expects to add 625,000 enrollees this year.
Humana is implementing a $1 billion value-creation plan focused on Medicare Advantage and primary care clinics for Medicare beneficiaries. The company divided its operations into an insurance division and CenterWell, its healthcare delivery and services arm. Humana announced last week it would end its $4 billion commercial employer business to focus on solely government-sponsored insurance and care delivery.
Humana reported a 4.5% decline in net income to $2.8 billion in 2022, with the drop primarily related to charges stemming from its value-creation plan and a dip in investment income. Revenue grew nearly 12% to $92.87 billion.
