UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 19, 2004
AETNA INC.
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(Exact name of registrant as specified in its charter)
Pennsylvania 1-16095 23-2229683
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
151 Farmington Avenue
Hartford, Connecticut 06156
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(Address of principal executive offices) (Zip Code)
(860) 273-0123
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(Registrant's telephone number, including area code)
N/A
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(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Section 1 - Registrant's Business and Operations
Item 1.01 Entry into a Material Definitive Agreement.
On November 19, 2004, Aetna Inc. ("Aetna") entered into a new unsecured $800
million, five-year revolving credit agreement (the "Credit Agreement") with
JPMorgan Chase Bank, N.A. ("JPMCB"), as administrative agent, and the 17 lender
parties thereto led by JPMCB, Bank of America, NA, Citibank N.A., Deutsche Bank
AG New York Branch, and Wachovia Bank, N.A. The Credit Agreement replaces
Aetna's existing credit facilities. The Credit Agreement is summarized in Item
2.03 of this report, which is incorporated by reference into this Item 1.01.
The administrative agent and certain of the lender parties to the Credit
Agreement perform normal banking, investment banking and/or advisory services
for Aetna and its affiliates from time to time for which they have received
customary fees and expenses.
A copy of the Credit Agreement is filed as Exhibit 99.1 to this report and is
incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement.
On November 19, 2004, simultaneously with entering into the Credit Agreement,
Aetna terminated its existing credit facilities (the "Existing Facilities").
The lending commitments under the Existing Facilities were evidenced by a
certain $500 million, three-year revolving credit agreement dated as of November
27, 2002, among Aetna, JPMCB, as administrative agent, and the nine lender
parties thereto led by JPMCB, Bank of America, NA, Citibank N.A., Deutsche Bank
AG New York Branch, and Fleet National Bank; and a certain 364-day revolving
credit agreement dated as of November 26, 2003, among Aetna, JPMCB, as
administrative agent, and the 13 lender parties thereto led by JPMCB, Bank of
America, NA, Citibank N.A., Deutsche Bank AG New York Branch, and Fleet National
Bank. The three-year Existing Facility was scheduled to expire on November 27,
2005, and the 364-day Existing Facility was scheduled to expire on November 24,
2004.
The administrative agent and certain of the lender parties to the Existing
Facilities have performed normal banking, investment banking and/or advisory
services for Aetna and its affiliates from time to time for which they have
received customary fees and expenses.
Section 2 - Financial Information
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The Credit Agreement provides for the granting of revolving loans and the
issuance of letters of credit at Aetna's request, up to a maximum aggregate
amount outstanding of $800 million. Aetna has the option to expand the lenders'
aggregate commitments under the Credit Agreement to a maximum of $1 billion,
subject to certain conditions precedent. The maximum aggregate amount of
outstanding letters of credit under the Credit Agreement is limited to $150
million. Outstanding letters of credit count as usage of the available
commitments under the Credit Agreement.
The Credit Agreement expires November 19, 2009. Various interest rate options
are available under the Credit Agreement. Any revolving borrowings mature on
the termination date of the Credit Agreement. Aetna pays facility fees on the
lenders' aggregate commitments under the facility ranging from 0.08% to 0.225%
per annum, depending on Aetna's long-term senior unsecured debt rating. The
facility fee at November 23, 2004 is at an annual rate of 0.11%.
The Credit Agreement contains customary representations, warranties and
covenants, including financial covenants, for a transaction of this type. Under
the terms of the facility, Aetna is required to maintain a minimum level of
shareholders' equity, excluding any minimum pension liability adjustment and any
net unrealized capital gains and losses, as of each fiscal quarter ending on or
after December 31, 2004. The required minimum level is increased by 50% of
Aetna's consolidated net income for each quarter beginning with the quarter
ending December 31, 2004. Aetna also is required to maintain its ratio of total
debt to consolidated capitalization as of each fiscal quarter ending on or after
December 31, 2004 at or below 0.40 to 1.00. For this purpose, consolidated
capitalization means the sum of shareholders' equity, excluding any minimum
pension liability adjustment and any net unrealized capital gains and losses,
plus total debt.
The Credit Agreement also contains customary events of default, including a
cross default provision and a change of control provision. If an event of
default occurs that is not otherwise waived or cured, lenders holding a
specified percentage of the commitments or outstanding loans may terminate the
obligations of the lenders to make loans under the Credit Agreement and the
obligations of the issuing banks to issue letters of credit and/or may declare
the loans outstanding under the Credit Agreement to be due and payable. Such
termination and acceleration will occur automatically in the event of a
bankruptcy default.
The foregoing summary of the Credit Agreement is not complete and is qualified
in its entirety by reference to the Credit Agreement, a copy of which is filed
as Exhibit 99.1 to this report and is incorporated herein by reference. You are
encouraged to read the Credit Agreement.
Section 9 - Financial Statements and Exhibits
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
99.1 $800,000,000 Five-Year Credit Agreement Dated as of November 19, 2004.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AETNA INC.
Date: November 23, 2004 By: /s/ Ronald M. Olejniczak
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Name: Ronald M. Olejniczak
Title: Vice President and Controller
EXHIBIT INDEX
Exhibit No. Description
99.1 $800,000,000 Five-Year Credit Agreement Dated as of November 19,
2004.