Express Scripts 2011 Annual Report Download - page 75

Express Scripts 2011 Annual Report 73
On November 14, 2011, we issued $4.1 billion of Senior Notes (the ―November 2011 Senior Notes‖),
including:
$900 million aggregate principal amount of 2.750% Senior Notes due 2014 (the ―November 2014 Senior
Notes‖)
$1.25 billion aggregate principal amount of 3.500% Senior Notes due 2016 (the ―November 2016 Senior
Notes‖)
$1.25 billion aggregate principal amount of 4.750% Senior Notes due 2021 (the ―2021 Senior Notes‖)
$700 million aggregate principal amount of 6.125% Senior Notes due 2041 (the ―2041 Senior Notes‖)
These notes were issued through our subsidiary, Aristotle Holding, Inc., (―Aristotle‖) which was organized
for the purpose of effecting the transactions contemplated under the Merger Agreement with Medco. The November
2014 Senior Notes require interest to be paid semi-annually on May 21 and November 21. The November 2016
Senior Notes, 2021 Senior Notes, and 2041 Senior Notes require interest to be paid semi-annually on May 15 and
November 15. The net proceeds may be used to pay a portion of the cash consideration to be paid in the merger and
to pay related fees and expenses (see Note 3 – Changes in business). The net proceeds from the November 2011
Senior Notes reduced the commitments under the bridge facility by $4.1 billion.
We may redeem some or all of each series of November 2011 Senior Notes prior to maturity at a price
equal to the greater of (1) 100% of the aggregate principal amount of any notes being redeemed, plus accrued and
unpaid interest; or (2) the sum of the present values of the remaining scheduled payments of principal and interest on
the notes being redeemed, not including unpaid interest accrued to the redemption date, discounted to the
redemption date on a semiannual basis at the treasury rate plus 35 basis points with respect to any November 2014
Senior Notes being redeemed, 40 basis points with respect to any November 2016 Senior Notes being redeemed, 45
basis points with respect to any 2021 Senior Notes being redeemed, or 50 basis points with respect to any 2041
Senior Notes being redeemed, plus in each case, unpaid interest on the notes being redeemed accrued to the
redemption date. In the event that we do not consummate the Mergers on or prior to April 20, 2012, the special
mandatory redemption triggering date, then we will redeem all of the notes at a redemption price equal to 101% for
the aggregate principal amount of the notes, plus accrued and unpaid interest from the date of initial issuance to, but
not exceeding, the special mandatory redemption date. The special mandatory redemption date may be extended to a
date not later than July 20, 2012. The November 2011 Senior Notes, issued by Aristotle, are jointly and severally
and fully and unconditionally (subject to certain customary release provisions, including sale, exchange, transfer or
liquidation of the guarantor subsidiary) guaranteed on a senior unsecured basis by Express Scripts, Inc. and most of
our current and future 100% owned domestic subsidiaries, including upon consummation of the Transaction, Medco
and (within 60 days following the consummation of the Transaction) certain of Medco’s 100% owned domestic
subsidiaries.
COMMITMENT LETTER
In 2009, we entered into a commitment letter with a syndicate of commercial banks for an unsecured, 364-
day, $2.5 billion term loan credit facility in order to finance the NextRx acquisition. Upon completion of the public
offering of common stock and debt securities, we terminated the credit facility and incurred $56.3 million in fees
and incurred an additional $10.0 million in fees upon the completion of the acquisition.
FINANCING COSTS
Financing costs of $3.9 million related to the 2010 credit facility are being amortized over three years and
are reflected in other intangible assets, net in the accompanying consolidated balance sheet.
Financing costs of $13.3 million, for the issuance of the June 2009 Senior Notes, are being amortized over
an average weighted period of 5.2 years. Financing costs of $10.9 million for the issuance of the May 2011 Senior
Notes are being amortized over 5 years. Financing costs of $29.9 million for the issuance of the November 2011
Senior Notes are being amortized over a weighted average period of 12.1 years.