Aetna’s Plan to Fund Humana Purchase

7131425_lAetna Inc. is putting together a plan to buy Louisville-based Humana Inc.

The Connecticut insurer filed a document with the U.S. Securities and Exchange Commission Thursday that outlines a bond plan to fund the $37 billion deal announced last year.

“We intend to use the net proceeds of this offering, together with cash on hand at Aetna and Humana, and an approximately $3.2 billion term loan that we expect to borrow at the time the merger is completed, to fund the cash portion of the purchase price of the merger,” the filing said.

Aetna’s offering raised $13 billion to fund the deal, making this one of the year’s biggest debt financings related to mergers and acquisitions, The Wall Street Journal reports.

The offering was split into eight tranches, according to the report. It’s the third-largest bond deal of the year, with the biggest being Anheuser-Busch InBev NV’s $46 billion offering in January and Dell Inc.’s $20 billion last month.

The offering was split into eight tranches, according to the report. It’s the third-largest bond deal of the year, with the biggest being Anheuser-Busch InBev NV’s $46 billion offering in January and Dell Inc.’s $20 billion last month.

Investors seemed to take this filing as sign the deal is on track, The Wall Street Journal reported. Aetna and Humana (NYSE: HUM) stocks both were several percentage points higher by mid-afternoon Thursday.

The deal has been working its way through the regulatory approvals process, and officials have said it’s on track to close in the second half of this year.

The deal still needs sign-off from a few state regulators and the U.S. Department of Justice, which is looking into antitrust concerns surrounding this merger and another deal pending between Anthem Inc. with Cigna Corp. If both of those mergers went through, there would be only three major health insurers in the U.S.

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