Debt

9 Months Ended

Sep. 30, 2020

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


(In millions)	September 30, 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
$1,750 million, 3.2% Notes due 9/2020	—		1,748
$349 million, 4.125% Notes due 9/2020	—		351
$500 million, 2.6% Notes due 11/2020	500		496
$400 million, Floating Rate Notes due 11/2020	400		400
$250 million, 4.375% Notes due 12/2020	250		249
$1,400 million, Floating Rate Term Loan due 3/2021	1,399		—
$78 million, 6.37% Notes due 6/2021	78		—
$1,000 million, Floating Rate Notes due 9/2021	999		—
$1,250 million, 3.4% Notes due 9/2021	1,248		—
Commercial paper	1,555		944
Other, including finance leases	20		27
Total short-term debt	$	6,449	$	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
$1,000 million, Floating Rate Notes due 2021	—		998
$1,250 million, 3.4% Notes due 2021	—		1,247
$1,248 million, 4.75% Notes due 2021	—		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	489		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	973		966
$2,187 million, 3.75% Notes due 2023	2,180		3,088
$1,000 million, 3.5% Notes due 2024	976		970
$900 million, 3.25% Notes due 2025	896		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	1,406		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	3,779		3,776
$1,500 million, 2.4% Notes due 2030	1,489		—
$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	2,180		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	1,465		1,465
$1,000 million, 3.875% Notes due 2047	988		988
$3,000 million, 4.9% Notes due 2048	2,966		2,964
$1,250 million, 3.4% Notes due 2050	1,235		—
Other, including finance leases	40		61
Total long-term debt	$	29,537	$	31,893

Debt Issuance and Redemption. In order to decrease future 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 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 and April 2020, the Company completed a tender offer and an optional redemption totaling $3.5 billion of aggregate principal amount of certain of its outstanding debt securities. The principal amount repurchased in this tender offer was $1.5 billion. Additionally, $2.0 billion of notes were repurchased via optional redemption. The Company recorded a pre-tax loss of $199 million ($151 million after-tax), consisting primarily of premium payments on the tender and optional redemption.

Debt Exchange. In the fourth quarter of 2019, the Company settled an exchange of approximately $12.7 billion of Notes issued by Express Scripts Holding Company, Medco Health Solutions, Inc. and Cigna Holding Company (formerly named Cigna Corporation) for privately placed Notes issued by Cigna with the same interest rates and maturities and comparable other terms. We initiated an exchange offer to register such debt in the second quarter of 2020 and completed the exchange in July 2020.

Debt Repayment. During the first nine months of 2020, the Company repaid $6.9 billion of long-term debt, including the $3.5 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.

Additionally, Cigna has a 364-day $1.0 billion revolving credit agreement that will mature in October 2021. The agreement replaces the $1.0 billion 364-day revolving credit agreement that expired in October 2020. The agreement 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%. As of September 30, 2020, there were no outstanding balances under the revolving credit agreements.

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 re-borrowed. 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 $1.6 billion outstanding at September 30, 2020 at an average interest rate of 0.2%.

The Company was in compliance with its debt covenants as of September 30, 2020.