PRICING AGREEMENT

PRICING AGREEMENT

 

Merrill Lynch, Pierce, Fenner & Smith

March 4, 2014

 

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 May 1, 2012 (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 addresses 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, less the principal amount of Designated Securities covered by Delayed Delivery Contracts, if any, as may be specified in Schedule II hereto.

 

The Company further represents and warrants to, and agrees with, each of the Underwriters, as of the date hereof and as of the Time of Delivery for the Designated Securities, that:

 

 

 

 

 

 

Accepted as of the date hereof:

Underwriters

 

 

 

Underwriter	Principal Amount of 2.200% Senior Notes due 2019 to be Purchased		Principal Amount of 4.750% Senior Notes due 2044 to be Purchased
Credit Suisse Securities (USA) LLC	$67,500,000		$67,500,000
Merrill Lynch, Pierce, Fenner & Smith                      Incorporated	67,500,000		67,500,000
RBS Securities Inc.	67,500,000		67,500,000
U.S. Bancorp Investments, Inc.	67,500,000		67,500,000
Citigroup Global Markets Inc. Barclays Capital Inc. Goldman, Sachs & Co. J.P. Morgan Securities LLC Mitsubishi UFJ Securities (USA), Inc. Morgan Stanley & Co. LLC SunTrust Robinson Humphrey, Inc. UBS Securities LLC Wells Fargo Securities, LLC BNY Mellon Capital Markets, LLC Fifth Third Securities, Inc. HSBC Securities (USA), Inc. PNC Capital Markets LLC	10,172,000 10,166,000 10,166,000 10,166,000 10,166,000 10,166,000 10,166,000 10,166,000 10,166,000 3,375,000 3,375,000 3,375,000 3,375,000		10,172,000 10,166,000 10,166,000 10,166,000 10,166,000 10,166,000 10,166,000 10,166,000 10,166,000 3,375,000 3,375,000 3,375,000 3,375,000
Total	$375,000,000		$375,000,000

 

 

TITLE OF DESIGNATED SECURITIES:

 

2.200% Senior Notes due March 15, 2019 (hereinafter referred to as the “2019 Notes”)

 

4.750% Senior Notes due March 15, 2044 (hereinafter referred to as the “2044 Notes”, and together with the 2019 Notes, the “Notes”)

 

AGGREGATE PRINCIPAL AMOUNT:

 

2019 Notes:  $375,000,000

 

2044 Notes:  $375,000,000

 

PRICE TO PUBLIC:

 

99.900% of the aggregate principal amount of the 2019 Notes, plus accrued interest, if any, from March 7, 2014

 

99.760% of the aggregate principal amount of the 2044 Notes, plus accrued interest, if any, from March 7, 2014

 

PURCHASE PRICE BY UNDERWRITERS:

 

99.300% of the aggregate principal amount of the 2019 Notes, plus accrued interest, if any, from March 7, 2014

 

98.885% of the aggregate principal amount of the 2044 Notes, plus accrued interest, if any, from March 7, 2014

 

SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:

 

Immediately available funds delivered to the bank account(s) specified in the form of cross-receipt to the Underwriters

 

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 (the “Base Indenture”), as supplemented by the Supplemental Indenture to be dated on or prior to March 7, 2014, between the Company and the Trustee (as so supplemented, the “Indenture”).

 

MATURITY:

 

March 15, 2019 for the 2019 Notes

 

March 15, 2044 for the 2044 Notes

 

INTEREST RATE:

 

2.200% per annum for the 2019 Notes

 

4.750% per annum for the 2044 Notes

 

INTEREST PAYMENT DATES:

 

With respect to the 2019 Notes, each March 15 and September 15, beginning September 15, 2014.

 

With respect to the 2044 Notes, each March 15 and September 15, beginning September 15, 2014.

 

In any case where any interest payment date is not a Business Day, payment of interest may be made on the next succeeding Business Day without any additional amount being payable in respect of any delay.

 

REDEMPTION PROVISIONS:

 

 

At any time prior to February 15, 2019 (1 month prior to the maturity date of the 2019 Notes), the 2019 Notes will be redeemable, in whole or in part, at a redemption price equal to the greater of:

 

·

100% of the principal amount of the 2019 Notes being redeemed, or

 

·

the sum of the present value of (i) 100% of the principal amount of the 2019 Notes being redeemed and (ii) all required remaining scheduled interest payments due on the 2019 Notes being redeemed, in each case calculated as if the maturity date of the 2019 Notes were February 15, 2019 (1 month prior to the maturity date of the 2019 Notes), discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus 15 basis points,

 

plus, in each case, any interest accrued but not paid to the date of redemption.

 

At any time on or after February 15, 2019 (1 month prior to the maturity date of the 2019 Notes), the 2019 Notes will be redeemable, in whole or in part, at a redemption price equal to

 

 

 

At any time prior to September 15, 2043 (6 months prior to the maturity date of the 2044 Notes), the 2044 Notes will be redeemable, in whole or in part, at a redemption price equal to the greater of:

 

·

100% of the principal amount of the 2044 Notes being redeemed, or

 

·

the sum of the present value of (i) 100% of the principal amount of the 2044 Notes being redeemed and (ii) all required remaining scheduled interest payments due on the 2044 Notes being redeemed, in each case calculated as if the maturity date of the 2044 Notes were September 15, 2043 (6 months prior to the maturity date of the 2044 Notes), discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate (as defined below) plus 20 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 of a series,

 

·

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 Remaining Life for the Notes of such series, 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.

 

 

 

 

 

 

 

 

 

 

 

 

 

·

accept or cause a third party to accept for payment all Notes of such series or portions of Notes of such series  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 each Note of such series or portions of Notes of such series properly tendered; and

 

·

deliver or cause to be delivered to the Trustee the Notes of such series properly accepted, together with an officer’s certificate stating the aggregate principal amount of Notes of such series or portions of Notes of such series being purchased.

 

 

 

“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” (as that term is used in Section 13(d)(3) of the Exchange Act) 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.

 

“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 Moody’s equal to or higher than Baa3 (or the equivalent under any 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 Moody’s Investors Service, Inc.

 

“Rating Agencies” means (1) Moody’s, S&P and Fitch; and (2) if any or all of Moody’s, S&P or Fitch ceases to rate the Notes of a series or fails to make a rating of the Notes of such series 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 Moody’s, S&P or Fitch, or all of them, as the case may be, with respect to such series of Notes.

 

“S&P” means Standard & Poor’s Ratings Services, a division of McGraw-Hill Financial, Inc.

 

SINKING FUND PROVISIONS:

 

No sinking fund provisions

 

TIME OF DELIVERY:

 

9:00 a.m. Eastern time on March 7, 2014

 

CLOSING LOCATION:

 

Sullivan & Cromwell LLP, 125 Broad Street, New York, New York 10004

 

DELAYED DELIVERY:

 

None

 

NAMES AND ADDRESSES OF REPRESENTATIVES:

 

Credit Suisse Securities (USA) LLC

11 Madison Avenue

New York, New York 10010

 

Merrill Lynch, Pierce, Fenner & Smith

Incorporated

One Bryant Park

New York, New York 10036

RBS Securities Inc.

600 Washington Blvd

Stamford, CT 06901

U.S. Bancorp Investments, Inc.

214 N. Tryon Street, 26th Floor

Charlotte, NC 28202

OTHER TERMS:

 

 

 

 

 

2:42 p.m. Eastern time on March 4, 2014

 

 

Preliminary Prospectus dated March 4, 2014

 

Free Writing Prospectus dated March 4, 2014

 

 

 

[intentionally omitted]

 

The Issuer 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 other documents the Issuer has filed with the SEC for more complete information about the Issuer and this offering.  You may get these documents for free by visiting EDGAR on the SEC Web site at www.sec.gov.  Alternatively, copies of the prospectus and the prospectus supplement may be obtained from Credit Suisse Securities (USA) LLC by calling ###-###-####, Merrill Lynch, Pierce, Fenner & Smith Incorporated by calling ###-###-####, RBS Securities Inc. by calling ###-###-#### or U.S. Bancorp Investments, Inc. by calling ###-###-####.