Debt

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Debt

Note 6 – Debt

The outstanding amounts of debt and finance leases were as follows:

		September 30,		December 31,
(In millions)	Issuer	2019		2018
Short-term debt
Current maturities: $1,000 million, 2.25% Senior Notes	Express Scripts	$	-	$	995
Current maturities: $337 million, 7.25% Senior Notes	ESI (1)		-		343
Current maturities: $1,000 million, Floating Rate Notes due 2020	Cigna		998		-
Current maturities: $300 million, 5.125% Notes due 2020	Old Cigna		300		-
Current maturities: $1,750 million, 3.2% Notes due 2020	Cigna		1,748		-
Current maturities: $500 million, 4.125% Senior Notes due 2020	Medco (1)		503		-
Commercial paper	Old Cigna/Cigna		1,140		1,500
Other, including finance leases	Other		23		117
Total short-term debt		$	4,712	$	2,955
Long-term uncollateralized debt
Cigna debt (issued to finance acquisition)
$1,000 million, Floating Rate Notes due 2020	Cigna	$	-	$	997
$1,750 million, 3.2% Notes due 2020	Cigna		-		1,743
$1,000 million, Floating Rate Notes due 2021	Cigna		997		996
$1,250 million, 3.4% Notes due 2021	Cigna		1,246		1,245
$1,000 million, Floating Rate Term Loan due 2021	Cigna		999		2,997
$700 million, Floating Rate Notes due 2023	Cigna		698		697
$3,100 million, 3.75% Notes due 2023	Cigna		3,087		3,085
$2,200 million, 4.125% Notes due 2025	Cigna		2,188		2,187
$3,800 million, 4.375% Notes due 2028	Cigna		3,775		3,774
$2,200 million, 4.8% Notes due 2038	Cigna		2,178		2,178
$3,000 million, 4.9% Notes due 2048	Cigna		2,964		2,964
Express Scripts debt (assumed in acquisition)
$500 million, 4.125% Senior Notes due 2020	Medco (1)		-		506
$500 million, 2.6% Senior Notes due 2020	Express Scripts		496		493
$400 million, Floating Rate Senior Notes due 2020	Express Scripts		400		399
$500 million, 3.3% Senior Notes due 2021	Express Scripts		499		499
$1,250 million, 4.75% Senior Notes due 2021	Express Scripts		1,276		1,285
$1,000 million, 3.9% Senior Notes due 2022	Express Scripts		999		998
$500 million, 3.05% Senior Notes due 2022	Express Scripts		485		481
$1,000 million, 3% Senior Notes due 2023	Express Scripts		965		959
$1,000 million, 3.5% Senior Notes due 2024	Express Scripts		970		966
$1,500 million, 4.5% Senior Notes due 2026	Express Scripts		1,507		1,508
$1,500 million, 3.4% Senior Notes due 2027	Express Scripts		1,396		1,386
$449 million, 6.125% Senior Notes due 2041	Express Scripts		492		493
$1,500 million, 4.8% Senior Notes due 2046	Express Scripts		1,465		1,465
Old Cigna debt (pre-acquisition)
$300 million, 5.125% Notes due 2020	Old Cigna		-		298
$250 million, 4.375% Notes due 2020	Old Cigna		249		248
$78 million, 6.37% Notes due 2021	Other		78		78
$300 million, 4.5% Notes due 2021	Old Cigna		298		297
$750 million, 4% Notes due 2022	Old Cigna		747		746
$100 million, 7.65% Notes due 2023	Old Cigna		100		100
$17 million, 8.3% Notes due 2023	Old Cigna		17		17
$900 million, 3.25% Notes due 2025	Old Cigna		895		895
$600 million, 3.05% Notes due 2027	Old Cigna		595		595
$259 million, 7.875% Debentures due 2027	Old Cigna		259		259
$45 million, 8.3% Step Down Notes due 2033	Old Cigna		45		45
$191 million, 6.15% Notes due 2036	Old Cigna		190		190
$121 million, 5.875% Notes due 2041	Old Cigna		119		119
$317 million, 5.375% Notes due 2042	Old Cigna		315		315
$1,000 million, 3.875% Notes due 2047	Old Cigna		988		988
Other, including finance leases	Other		64		32
Total long-term debt		$	34,041	$	39,523
(1) Express Scripts, Inc. is identified as ESI. Medco Health Solutions, Inc. is identified as Medco.

Notes issued to fund the Express Scripts acquisition. In the third quarter of 2018, the Company issued private placement Notes with registration rights to finance the Express Scripts acquisition. Total proceeds were approximately $20.0 billion. Interest on this debt is

generally paid semi-annually except for quarterly interest payments on the floating rate notes. We completed an exchange offer to register such debt in the third quarter of 2019.

Exchange offer for legacy Notes. In the fourth quarter of 2019, the Company settled an exchange of approximately $12.6 billion of Notes issued by Express Scripts, Medco and Old Cigna for Notes issued by Cigna with the same interest rates and maturities and comparable other terms. The Company entered into this exchange to simplify its capital structure. Interest on this debt is generally paid semi-annually. This exchange is not reflected in the table above as it was completed subsequent to September 30, 2019. The effect of the exchange is not expected to be material to the Company’s results of operations.

Term Loan Credit Agreement. Cigna borrowed $3.0 billion under its Term Loan Credit Agreement (the “Term Loan Credit Agreement”) to finance the Merger and to pay fees and expenses of the Merger. The Term Loan Credit Agreement contains customary covenants and restrictions, including a financial covenant that Cigna’s leverage ratio may not exceed 60%. There is no remaining amount available for borrowing under this agreement. During the first nine months of 2019, the Company repaid $2.0 billion principal of the term loan.

Revolving Credit Agreement. Cigna has a Revolving Credit and Letter of Credit Agreement (the “Revolving Credit Agreement”) that matures on April 6, 2023 and is diversified among 23 banks.

Cigna can borrow up to $3.25 billion for general corporate purposes, with up to $500 million available for issuance of letters of credit, net of $21 million of letters of credit outstanding under the Revolving Credit Agreement as of September 30, 2019. The Revolving Credit Agreement also includes an option to increase the facility amount up to $500 million and an option to extend the termination date for additional one-year periods, subject to consent of the banks.

The Revolving Credit Agreement contains customary covenants and restrictions including a financial covenant that the Company’s leverage ratio may not exceed 60%.

Cigna is the borrower under the Revolving Credit Agreement and the Term Loan Credit Agreement and certain subsidiaries of Cigna may be required to guarantee these obligations under certain circumstances.

In the fourth quarter of 2019, the Company entered into an additional 364-day revolving credit agreement that matures in October 2020 and is diversified among 23 banks. Pursuant to this revolving credit agreement, Cigna can borrow up to $1.0 billion for general corporate purposes. The agreement includes the option to “term out” any revolving loans that are outstanding at maturity by converting them into a term loan maturing on the one-year anniversary of conversion.

Commercial Paper. The commercial paper program had approximately $1.1 billion outstanding at September 30, 2019 at an average interest rate of 2.26%.

The Company was in compliance with its debt covenants as of September 30, 2019.