PRICING AGREEMENT
Exhibit
1.2
Xxxxxxx,
Xxxxx & Co.
Xxxxxx
Xxxxxxx & Co. Incorporated
As
Representatives of the several
Underwriters
named in Schedule I hereto
November
29, 2007
Ladies
and
Gentlemen:
Aetna
Inc., a Pennsylvania corporation (the “Company”), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement dated as of June 6, 2006 (the “Underwriting
Agreement”), to issue and sell to the Underwriters named in Schedule I
hereto (the “Underwriters”) the debt securities specified in
Schedule II hereto (the “Designated Securities”). Each of the
provisions of the Underwriting Agreement is incorporated herein by reference
in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of
the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement. Each reference to the
Representatives herein and in the provisions of the Underwriting Agreement
so
incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Underwriting Agreement are used herein
as
therein defined. The Representatives designated to act on behalf of each of
the
Underwriters of the Designated Securities pursuant to Section 15 of the
Underwriting Agreement and the address of the Representatives referred to in
such Section 15 are set forth at the end of Schedule II hereto.
Subject
to
the terms and conditions set forth herein and in the Underwriting Agreement
incorporated herein by reference, the Company agrees to issue and to sell to
each of the Underwriters, and each of the Underwriters agrees, severally and
not
jointly, to purchase from the Company, at the time and place and at the purchase
price to the Underwriters set forth in Schedule II hereto, the principal amount
of Designated Securities set forth opposite the name of such Underwriter in
Schedule I hereto.
If
the
foregoing is in accordance with your understanding, please sign and return
to us
counterparts hereof, and upon acceptance hereof by you, on behalf of each of
the
Underwriters, this letter and such acceptance hereof, including the provisions
of the Underwriting Agreement incorporated herein by reference, shall constitute
a binding agreement between each of the Underwriters and the Company. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is or will be pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request.
| Very truly yours, | |||
|
AETNA
INC.
|
|||
| By: | /s/ Xxxxxx X. Xxxxx, Xx. | ||
| Name: | Xxxxxx X. Xxxxx, Xx. | ||
| Title: | Vice President, Finance and Treasurer | ||
2
Accepted
as of the date hereof:
Xxxxxxx,
Sachs & Co.
Xxxxxx
Xxxxxxx & Co. Incorporated
On
behalf
of each of the
Underwriters
By:
Xxxxxxx,
Sachs & Co.
| By: | /s/ Xxxxxxx, Xxxxx & Co. | ||
| (Xxxxxxx, Sachs & Co.) | |||
By:
Xxxxxx
Xxxxxxx & Co. Incorporated
| By: | /s/ Yurij Slyz | ||
| Name: | Yurij Slyz | ||
| Title: | Vice President | ||
3
SCHEDULE
I
|
Underwriter
|
Principal
Amount
of 6.75% Senior Notes due 2037 to be Purchased
|
|||
|
Xxxxxxx,
Xxxxx &
Co.
|
$227,500,000
|
|||
|
Xxxxxx
Xxxxxxx & Co.
Incorporated
|
227,500,000
|
|||
|
Bank
of America
Securities
LLC
|
21,777,777
|
|||
|
Barclays
Capital
Inc.
|
21,777,777
|
|||
|
Citigroup
Global Markets
Inc.
|
21,777,778
|
|||
|
Credit
Suisse Securities
(USA)
LLC
|
21,777,778
|
|||
|
Deutsche
Bank Securities
Inc.
|
21,777,778
|
|||
|
X.X.
Xxxxxx Securities
Inc.
|
21,777,778
|
|||
|
Greenwich
Capital Markets,
Inc.
|
21,777,778
|
|||
|
UBS
Securities
LLC
|
21,777,778
|
|||
|
Wachovia
Capital Markets,
LLC
|
21,777,778
|
|||
|
BNY
Capital Markets,
Inc.
|
8,166,666
|
|||
|
Fifth
Third Securities,
Inc.
|
8,166,666
|
|||
|
Lazard
Capital Markets
LLC
|
8,166,667
|
|||
|
NatCity
Investments,
Inc.
|
8,166,667
|
|||
|
Xxxxx
Xxxxxxx & Co.
|
8,166,667
|
|||
|
PNC
Capital Markets
LLC
|
8,166,667
|
|||
|
Total
|
$700,000,000
|
|||
SCHEDULE
II
TITLE
OF
DESIGNATED SECURITIES:
6.75%
Senior Notes due December 15, 2037 (hereinafter referred to as the
“Notes”)
AGGREGATE
PRINCIPAL AMOUNT:
$700,000,000
PRICE
TO
PUBLIC:
99.322%
of
the principal amount of the Notes, plus accrued interest, if any, from December
4, 2007.
PURCHASE
PRICE BY UNDERWRITERS:
98.447%
of
the principal amount of the Notes, plus accrued interest, if any, from December
4, 2007.
SPECIFIED
FUNDS FOR PAYMENT OF PURCHASE PRICE:
Immediately
Available Funds
INDENTURE:
Senior
Indenture dated as of March 2, 2001, between the Company, and U.S. Bank National
Association, successor in interest to State Street Bank and Trust Company,
as
Trustee.
MATURITY:
December
15, 2037
INTEREST
RATE:
6.75%
per
annum
INTEREST
PAYMENT DATES:
June
15
and December 15, beginning June 15, 2008.
REDEMPTION
PROVISIONS:
Optional
Redemption
The
Notes will be redeemable at any
time, in whole or in part, at a redemption price equal to the greater
of:
|
|
•
|
100%
of the principal amount of the Notes being redeemed,
or
|
|
|
•
|
the
sum of the present values of the remaining scheduled payments of
principal
and interest on the Notes being redeemed from the redemption date
to the
maturity date discounted to the redemption date on a semiannual basis
(assuming a 360-day year consisting of twelve 30-day months) at the
Treasury Rate (as defined below) plus 40 basis
points,
|
plus,
in
each case, any interest accrued but not paid to the date of
redemption.
“Treasury
Rate” means,
with respect to any redemption date for any portion of the Notes,
|
|
•
|
the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical
release designated “H.15(519)” or any successor publication which is
published weekly by the Board of Governors of the Federal Reserve
System
and which establishes yields on actively traded United States Treasury
securities adjusted to constant maturity under the caption “Treasury
Constant Maturities,” for the maturity corresponding to the Comparable
Treasury Issue (if no maturity is within three months before or after
the
maturity date for the Notes, yields for the two published maturities
most
closely corresponding to the Comparable Treasury Issue will be determined
and the Treasury Rate shall be interpolated or extrapolated from
those
yields on a straight line basis, rounding to the nearest month),
or
|
|
|
•
|
if
the release referred to in the previous bullet (or any successor
release)
is not published during the week preceding the calculation date or
does
not contain the yields referred to above, the rate per annum equal
to the
semi-annual equivalent yield to maturity of the Comparable Treasury
Issue,
calculated using a price for the Comparable Treasury Issue (expressed
as a
percentage of its principal amount) equal to the Comparable Treasury
Price
for that redemption date.
|
The
Treasury Rate will be calculated on the third Business Day preceding the
redemption date.
2
“Comparable
Treasury
Issue” means the United States Treasury security selected by an
“Independent Investment Banker” as having a maturity comparable to the remaining
term of the Notes to be redeemed that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining
term
of the Notes to be redeemed. “Independent Investment
Banker” means one of the Reference Treasury Dealers appointed by the
Trustee after consultation with the Company.
“Comparable
Treasury
Price” means, with respect to any redemption date for any Notes, the
average of all Reference Treasury Dealer Quotations (as defined below)
obtained.
“Reference
Treasury
Dealer” means each of Xxxxxxx, Sachs & Co. and Xxxxxx Xxxxxxx &
Co. Incorporated. If any Reference Treasury Dealer ceases to be a
primary U.S. government securities dealer in New York City (a
“PrimaryTreasury Dealer”), the Company will
substitute another Primary Treasury Dealer for that dealer.
“Reference
Treasury Dealer
Quotations” means, with respect to each Reference Treasury Dealer and
any redemption date, the average, as determined by the Trustee, of the bid
and
asked prices for the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) quoted in writing to the Trustee by that
Reference Treasury Dealer at 5:00 p.m. on the third Business Day preceding
the
redemption date.
Notice
of any redemption will be mailed
at least 30 days but no more than 60 days before the redemption date to each
holder of Notes to be redeemed.
Unless
the Company defaults in payment
of the redemption price, interest will cease to accrue on the Notes or portions
of the Notes called for redemption on and after the redemption
date.
Repurchase
Upon a Change of Control
If
a Change of Control Triggering Event
occurs, unless the Company has exercised its right to redeem the Notes in full,
as described under “Optional Redemption” above, the Company will make an offer
to each holder (the “Change of Control Offer”) to repurchase
any and all (equal to $2,000 or an integral multiple of $1,000) of such holder’s
Notes at a repurchase price in cash equal to 101% of the aggregate principal
amount of the Notes repurchased plus accrued and unpaid interest, if any,
thereon, to the date of repurchase (the “Change of Control
Payment”).Within 30 days following any Change of Control Triggering
Event, the Company will mail a notice to holders of Notes describing the
transaction or transactions that constitute the Change of Control
3
Triggering
Event and offering to repurchase the Notes on the date specified in the notice,
which date will be no less than 30 days and no more than 60 days from the date
such notice is mailed (the “Change of Control Payment Date”),
pursuant to the procedures required by the Notes and described in such
notice.
The
Company will comply with the
requirements of Rule 14e-1 under the Exchange Act, and any other securities
laws
and regulations thereunder to the extent those laws and regulations are
applicable in connection with the repurchase of the Notes as a result of a
Change of Control Triggering Event. To the extent that the provisions of any
securities laws or regulations conflict with the Change of Control repurchase
provisions of the Notes, the Company will comply with the applicable securities
laws and regulations and will not be deemed to have breached its obligations
under the Change of Control repurchase provisions of the Notes by virtue of
such
conflicts.
The
Company will not be required to
offer to repurchase the Notes upon the occurrence of a Change of Control
Triggering Event if a third party makes such an offer in the manner, at the
times and otherwise in compliance with the requirements for an offer made by
the
Company and the third party repurchases on the applicable date all Notes
properly tendered and not withdrawn under its offer; provided
that for all purposes of the Notes and the Senior Indenture, a
failure by such third party to comply with the requirements of such offer and
to
complete such offer shall be treated as a failure by the Company to comply
with
its obligations to offer to purchase the Notes unless the Company promptly
makes
an offer to repurchase the Notes at 101% of the principal amount thereof plus
accrued and unpaid interest, if any, thereon, to the date of repurchase, which
shall be no later than 30 days after the third party’s scheduled Change of
Control Payment Date.
On
the Change of Control Payment Date,
the Company will, to the extent lawful:
|
·
|
accept
or cause a third party to accept for payment all Notes or portions
of
Notes properly tendered pursuant to the Change of Control
Offer;
|
|
·
|
deposit
or cause a third party to deposit with the paying agent an amount
equal to
the Change of Control Payment in respect of all Notes or portions
of Notes
properly tendered; and
|
|
·
|
deliver
or cause to be delivered to the Trustee the Notes properly accepted,
together with an officer’s certificate stating the principal amount of
Notes or portions of Notes being
purchased.
|
“Below
Investment Grade Rating
Event” means the Notes are rated below an Investment Grade Rating by
each of the Rating Agencies on any date from the earlier of (1) the occurrence
of a Change of Control and (2) public notice
4
of
the
Company’s intention to effect a Change of Control, in each case until the end of
the 60-day period following public notice of the occurrence of the Change of
Control; provided,
however, that if (i) during such 60-day period one or more Rating
Agencies has publicly announced that it is considering the possible downgrade
of
the Notes, and (ii) a downgrade by each of the Rating Agencies that has made
such an announcement would result in a Below Investment Grade Rating Event,
then
such 60-day period shall be extended for such time as the rating of the Notes
by
any such Rating Agency remains under publicly announced consideration for
possible downgrade to a rating below an Investment Grade Rating and a downgrade
by such Rating Agency to a rating below an Investment Grade Rating could cause
a
Below Investment Grade Rating Event. Notwithstanding the foregoing, a rating
event otherwise arising by virtue of a particular reduction in rating will
not
be deemed to have occurred in respect of a particular Change of Control (and
thus will not be deemed a rating event for purposes of the definition of Change
of Control Triggering Event) if the rating agencies making the reduction in
rating to which this definition would otherwise apply do not announce or
publicly confirm or inform the Trustee in writing at the Company’s or the
Trustee’s request that the reduction was the result, in whole or in part, of any
event or circumstance comprised of or arising as a result of, or in respect
of,
the applicable Change of Control (whether or not the applicable Change of
Control has occurred at the time of the rating event).
“Change
of Control”
means the occurrence of any of the following: (1) direct or indirect
sale,
transfer, conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or
substantially all of the properties or assets of the Company and its
subsidiaries taken as a whole to any “person” (as that term is used in Section
13(d)(3) of the Exchange Act) other than to the Company or one of its
subsidiaries; (2) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
“person” (as that term is used in Section 13(d)(3) of the Exchange Act) other
than the Company or one of its subsidiaries becomes the beneficial owner,
directly or indirectly, of more than 50% of the then outstanding number of
shares of the Company’s voting stock; or (3) the first day on which a majority
of the members of the Company’s Board of Directors are not Continuing Directors;
provided, however, that a transaction will not be deemed to involve a
Change of Control if (A) the Company becomes a wholly owned subsidiary of a
holding company and (B)(x) the holders of the voting stock of such holding
company immediately following that transaction are substantially the same as
the
holders of the Company’s voting stock immediately prior to that transaction or
(y) immediately following that transaction no Person is the beneficial owner,
directly or indirectly, of more than 50% of the voting stock of such holding
company. For purposes of this definition, “voting stock” means
capital stock of any class or kind the holders of which are ordinarily, in
the
absence of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of the Company, even if the right to
vote
has been suspended by the happening of such a contingency.
5
“Change
of Control Triggering
Event” means the occurrence of both a Change of Control and a Below
Investment Grade Rating Event.
“Continuing
Directors”
means, as of any date of determination, any member of the Board of
Directors of
the Company who (1) was a member of the Board of Directors of the Company on
the
date of the issuance of the Notes; or (2) was nominated for election or elected
to the Board of Directors of the Company with the approval of a majority of
the
Continuing Directors who were members of such Board of Directors of the Company
at the time of such nomination or election (either by specific vote or by
approval of the Company’s proxy statement in which such member was named as a
nominee for election as a director).
“Fitch”
means
Fitch
Ratings Inc.
“Investment
Grade
Rating” means a rating by Xxxxx’x equal to or higher than Baa3 (or the
equivalent under a successor rating category of Moody’s), a rating by S&P
equal to or higher than BBB- (or the equivalent under any successor rating
category of S&P), a rating by Fitch equal to or higher than BBB- (or the
equivalent under any successor rating category of Fitch), and the equivalent
investment grade credit rating from any replacement rating agency or rating
agencies selected by the Company under the circumstances permitting the Company
to select a replacement agency and in the manner for selecting a replacement
agency, in each case as set forth in the definition of “Rating
Agencies”.
“Moody’s”
means
Xxxxx’x Investors Service, Inc.
“Rating
Agencies”
means (1) Xxxxx’x, S&P and Fitch; and (2) if any or all of Xxxxx’x, S&P
or Fitch ceases to rate the Notes or fails to make a rating of the Notes
publicly available for reasons outside of the Company’s control, a “nationally
recognized statistical rating organization” within the meaning of Rule
15c3-1(c)(2)(vi)(F) under the Exchange Act, that the Company selects (pursuant
to a resolution of the Company’s Board of Directors) as a replacement agency for
any of Xxxxx’x, S&P or Fitch, or all of them, as the case may
be.
“S&P”
means
Standard & Poor’s Ratings Services, a division of The XxXxxx-Xxxx Companies,
Inc.
SINKING
FUND PROVISIONS:
No
sinking
fund provisions
TIME
OF
DELIVERY:
9:00
a.m. Eastern time on December 4,
2007
6
CLOSING
LOCATION:
Xxxxxxxx
&
Xxxxxxxx
LLP, 000 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx00000
NAMES
AND
ADDRESSES OF REPRESENTATIVES:
Xxxxxxx,
Sachs & Co.
00
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Xxxxxx
Xxxxxxx & Co. Incorporated
0000
Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
7
SCHEDULE
III
Specify
Time of Sale and Time of Sale Information
Time
of Sale
3
p.m. on
November 29, 2007
Time
of Sale Information
Preliminary
Prospectus dated November 29, 2007
Free
Writing Prospectus dated November 29, 2007
SCHEDULE
IV
Term
Sheet for Designated Securities
$700,000,000
6.75%
Senior Notes due Dec
15,
2037
|
Issuer:
|
Aetna
Inc.
|
|
A3/A-/A-
|
|
|
Note
Type:
|
Senior
Notes
|
|
Legal
Format:
|
SEC
Registered
|
|
Principal
Amount:
|
$700,000,000
|
|
Trade
Date:
|
November
29,
2007
|
|
Settlement
Date (T+3
days):
|
December
4,
2007
|
|
Maturity
Date:
|
December
15,
2037
|
|
Coupon:
|
6.75%
|
|
Interest
Payment
Frequency:
|
Semi-annual
|
|
Interest
Payment
Dates:
|
December
15 and June
15
|
|
First
Pay
Date:
|
June
15,
2008
|
|
Day
Count:
|
30/360
|
|
Pricing
Benchmark:
|
4.75%
due
2/2037
|
|
Benchmark
Spot:
|
106-16+
|
|
Benchmark
Yield:
|
4.353%
|
|
Reoffer
Spread to
Benchmark:
|
+245
bps
|
|
Reoffer
Yield:
|
6.803%
|
|
Price
to Public / Reoffer
Price:
|
99.322%
|
|
Underwriting
Fees:
|
0.875%
|
|
Use
of Proceeds:
|
Net
proceeds will be used to repay outstanding commercial paper and,
to the
extent of any remaining proceeds, for general corporate purposes,
including share repurchases
|
|
Optional
Redemption:
|
At
the greater of 100% of the
principal amount of the notes or at
a make-whole using a
discount rate of Treasury plus 40 basis points
|
|
Minimum
Denomination:
|
$2,000
x
$1,000
|
|
Joint
Bookrunning
Managers:
|
Xxxxxxx,
Xxxxx & Co.,
Xxxxxx Xxxxxxx & Co. Incorporated
|
|
Senior
Co-Managers:
|
Bank
of America Securities LLC,
Barclays Capital
Inc., Citigroup Global Markets Inc., Credit Suisse Securities (USA)
LLC,
Deutsche Bank Securities Inc., X.X. Xxxxxx Securities Inc., Greenwich
|
| Capital Markets, Inc., UBS Securities LLC, Wachovia Capital Markets, LLC | |
|
Junior
Co-Managers:
|
BNY
Capital Markets, Inc., Fifth
Third Securities, Inc., Lazard Capital Markets LLC, NatCity Investments,
Inc., Xxxxx Xxxxxxx & Co., PNC Capital Markets
LLC
|
|
CUSIP
Number:
|
00817Y
AG3
|
|
ISIN
Number:
|
XX00000XXX00
|
Xxxxx
Inc.
has filed a registration statement (including a prospectus) with the SEC for
the
offering to which this communication relates. Before you invest, you should
read
the prospectus in that registration statement and the other documents Aetna
Inc.
has filed with the SEC for more complete information about Aetna Inc. and this
offering. You may get these documents for free by visiting the SEC Web site
at
xxx.xxx.xxx. Alternatively, copies of the prospectus and the
prospectus supplement may be obtained from Xxxxxxx, Sachs & Co. by calling
0-000-000-0000 or from Xxxxxx Xxxxxxx & Co. Incorporated by calling
1-866-718-1649
