Debt

3 Months Ended

Mar. 31, 2020

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


(In millions)	March 31, 2020		December 31, 2019
Short-term debt
$1,000 million, Floating Rate Notes due 3/2020	$	—	$	999
$300 million, 5.125% Notes due 6/2020	300		300
$1,750 million, 3.2% Notes due 9/2020	1,748		1,748
$349 million, 4.125% Notes due 9/2020	351		351
$500 million, 2.6% Notes due 11/2020	497		496
$400 million, Floating Rate Notes due 11/2020	400		400
$250 million, 4.375% Notes due 12/2020	249		249
Commercial paper	770		944
Other, including finance leases	25		27
Total short-term debt	$	4,340	$	5,514
Long-term debt
$500 million, 3.3% Notes due 2021	$	—	$	499
$300 million, 4.5% Notes due 2021	—		298
$78 million, 6.37% Notes due 2021	78		78
$1,000 million, Floating Rate Notes due 2021	998		998
$1,250 million, 3.4% Notes due 2021	1,247		1,247
$289 million, 4.75% Notes due 2021	292		1,272
$277 million, 4% Notes due 2022	276		747
$973 million, 3.9% Notes due 2022	972		999
$500 million, 3.05% Notes due 2022	487		485
$17 million, 8.3% Notes due 2023	17		17
$63 million, 7.65% Notes due 2023	63		100
$700 million, Floating Rate Notes due 2023	698		698
$1,000 million, 3% Notes due 2023	969		966
$2,187 million, 3.75% Notes due 2023	2,179		3,088
$1,000 million, 3.5% Notes due 2024	973		970
$900 million, 3.25% Notes due 2025	895		895
$2,200 million, 4.125% Notes due 2025	2,189		2,188
$1,500 million, 4.5% Notes due 2026	1,505		1,506
$1,500 million, 3.4% Notes due 2027	1,400		1,396
$259 million, 7.875% Debentures due 2027	259		259
$600 million, 3.05% Notes due 2027	595		595
$3,800 million, 4.375% Notes due 2028	3,777		3,776
$1,500 million, 2.4% Notes due 2030	1,488		—
$45 million, 8.3% Step Down Notes due 2033	45		45
$190 million, 6.15% Notes due 2036	190		190
$2,200 million, 4.8% Notes due 2038	2,179		2,178
$750 million, 3.2% Notes due 2040	742		—
$121 million, 5.875% Notes due 2041	119		119
$448 million, 6.125% Notes due 2041	490		491
$317 million, 5.375% Notes due 2042	315		315
$1,500 million, 4.8% Notes due 2046	1,464		1,465
$1,000 million, 3.875% Notes due 2047	988		988
$3,000 million, 4.9% Notes due 2048	2,965		2,964
$1,250 million, 3.4% Notes due 2050	1,235		—
Other, including finance leases	58		61
Total long-term debt	$	32,147	$	31,893

Debt issuance and redemption. In order to decrease interest expense and reduce future refinancing risk, the Company entered into the following transactions:

•Debt issuance: On March 16, 2020, the Company issued $3.5 billion of new senior notes. The proceeds of this debt were mainly used to pay the consideration for the cash tender and redemption offer as described below. Interest on this debt is generally paid semi-annually.

Principal

Maturity Date

Interest Rate

Net Proceeds

$1,500 million

March 15, 2030

2.40%

$1,491 million

$750 million

March 15, 2040

3.20%

$743 million

$1,250 million

March 15, 2050

3.40%

$1,237 million

•Debt tender and redemption: In March 2020, the Company completed a tender offer and an optional redemption totaling $3.2 billion of aggregate principal amount of certain of its outstanding debt securities. The principal amount repurchased in this tender offer was $1,450 million and $1,760 million of notes were repurchased via optional redemption during March 2020. The Company recorded a pre-tax loss of $185 million ($140 million after-tax), consisting primarily of premium payments on the tender and optional redemption. An additional $289 million of outstanding debt securities were repurchased via optional redemption on April 15, 2020. The effect of a pre-tax loss from this April redemption was not material.

Debt Repayment. During the first three months of 2020, the Company repaid $4.2 billion of long-term debt, including the $3.2 billion debt tender and redemption described above.

Revolving Credit Agreements. Cigna has a revolving credit and letter of credit agreement that matures in April 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. This 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.

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.

The revolving credit agreements contain customary covenants and restrictions including a financial covenant that the Company’s leverage ratio may not exceed 60%.

Term Loan Credit Agreement. On April 1, 2020, the Company borrowed an aggregate principal amount of $1.4 billion under a new 364-Day Term Loan Credit Agreement (the "Credit Agreement"). The Company entered into the Credit Agreement to enhance its liquidity position in light of disruption in the commercial paper market and used a portion of the net proceeds to pay down amounts outstanding under its commercial paper facility. The Credit Agreement may be prepaid at any time in whole or in part without premium or penalty. Term loans prepaid may not be reborrowed. The Credit Agreement provides for mandatory prepayment of the term loans in an amount equal to 20% of any Net Cash Proceeds (as defined in the Credit Agreement) arising from the previously announced sale of Cigna’s U.S. Group Disability and Life insurance business to New York Life Insurance Company.

Commercial Paper. The commercial paper program had approximately $770 million outstanding at March 31, 2020 at an average interest rate of 2.28%.

The Company was in compliance with its debt covenants as of March 31, 2020.