$350M144A Private Placement for Highmark Inc.

NEW YORK (Dow Jones)–Health insurer Highmark Inc. sold Tuesday a $600 million two-part debt offering in the private placement Rule 144a market.

The issue includes $350 million 10- and $250 million 30-year tranches and was sold via joint bookrunners Bank of America Merrill Lynch (BAC), J.P. Morgan Chase & Co.(JPM) and PNC Financial Services Group (PNC).

The 10-year piece was sold with a risk premium of 155 basis points over Treasurys and the 30-year tranche was priced at 180 basis points. Both pieces were launched earlier Tuesday five basis points narrower than preliminary pricing guidance had suggested, indicating good demand for the issue.

The offering includes a change-of-control provision, which is designed to safeguard investors against event risk if the issuer is taken over in a leveraged buyout or undergoes some other fundamental corporate change. The covenant is triggered at a premium price of $101.

Proceeds will be used for general corporate purposes, which could include the repayment of outstanding debt securities.

The deal has been rated Baa2 by Moody’s Investors Service and A by Standard & Poor’s

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