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July 27, 2015 at 01:39 PM
(Bloomberg) — Anthem Inc.’s bid to become the largest health insurer in history is setting up one of the biggest debt offerings backing a takeover.
Anthem (NYSE:ANTM) has received financing commitments of as much as $26.5 billion to finance the $48.4 billion purchase of Cigna Corp. (NYSE:CI), according to a regulatory filing. That puts the size of the funding in the ranks of deals such as the $31 billion Charter Communications Inc. obtained to acquire Time Warner Cable Inc. and the $21 billion raised by Actavis PLC to buy Allergan Inc.
See also: Anthem: $1.4 billion in Cigna deal admin savings
Anthem is poised to join seven other companies that have tapped the bond market for at least $10 billion to finance takeovers this year, according to data compiled by Bloomberg. More than $149 billion of bonds backing takeovers have been sold in 2015 after a record $160 billion of the debt was issued last year. The takeover is expected to close in the second half of 2016, pending regulatory approval.
“This is symptomatic of where we are in the credit cycle,” said Nicholas Elfner, head of corporate-bond research at Breckinridge Capital Advisors Inc., which manages $22 billion. “The larger the deals, the more aggressive the leveraging, the more compensation bondholders should be offered.”
Kristin Binns, a spokeswoman for Indianapolis-based Anthem, didn’t immediately comment.
