The company announced Tuesday that Humana will issue up to $1.25 billion in bonds to pay off debt and finance operations.
The insurer plans to use the proceeds to pay down $500 million in debt through 2021 to offset the costs of the acquisition deal. Home Care Company Kindred At Homeand for general corporate purposes.
Hamina expects the bond to be valued at $1.21 billion after accounting for underwriting costs. The offer is expected to close on March 13. The company did not immediately respond to a request for an interview.
The insurer is being restructured since Medicare Advantage enrollments fell short of expectations for the 2022 plan year. Humana is the second largest Medicare Advantage carrier and had 5.1 million members at year end. The company is expected to add 625,000 enrollments this year.
Humana is implementing a $1 billion value-creation plan focused on Medicare Advantage and primary care clinics for Medicare beneficiaries. The company split its operations into an insurance division and Centerwell, its healthcare distribution and services arm. Humana announced last week that it would End Your $4 Billion Commercial Employer Business To focus solely on government sponsored insurance and care delivery.
Humana reported 4.5% Net income to decline to $2.8 billion in 2022, with the decline primarily related to charges stemming from its value-creation plan and a decline in investment income. Revenue increased nearly 12% to $92.87 billion.