Health Net 2007 Annual Report Download - page 121

Download and view the complete annual report

Please find page 121 of the 2007 Health Net annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 219

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200
  • 201
  • 202
  • 203
  • 204
  • 205
  • 206
  • 207
  • 208
  • 209
  • 210
  • 211
  • 212
  • 213
  • 214
  • 215
  • 216
  • 217
  • 218
  • 219

HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
failure to pay principal or premium, if any, on any note when due, either at maturity, upon any
redemption, by declaration or otherwise;
failure to perform any other covenant or agreement in the notes or indenture for a period of 60 days
after notice that performance was required;
(A) our failure or the failure of any of our subsidiaries to pay indebtedness for money we borrowed or any
of our subsidiaries borrowed in an aggregate principal amount of at least $50,000,000, at the later of final
maturity and the expiration of any related applicable grace period and such defaulted payment shall not
have been made, waived or extended within 30 days after notice or (B) acceleration of the maturity of
indebtedness for money we borrowed or any of our subsidiaries borrowed in an aggregate principal
amount of at least $50,000,000, if that acceleration results from a default under the instrument giving rise
to or securing such indebtedness for money borrowed and such indebtedness has not been discharged in
full or such acceleration has not been rescinded or annulled within 30 days after notice; or
events in bankruptcy, insolvency or reorganization of our Company.
Our Senior Notes payable balance was $398.1 and $0 million as of December 31, 2007 and 2006,
respectively.
Revolving Credit Facility
On June 25, 2007, we entered into a $900 million five-year revolving credit facility with Bank of America,
N.A. as Administrative Agent, Swingline Lender, and L/C Issuer, and the other lenders party thereto, replacing
our $700 million revolving credit facility which had a maturity date of June 30, 2009. As of December 31, 2007,
no amounts were outstanding under our revolving credit facility and the maximum amount available for
borrowing under the revolving credit facility was $779.2 million (see “—Letters of Credit” below).
Amounts outstanding under the new revolving credit facility will bear interest, at our option, at (a) the base
rate, which is a rate per annum equal to the greater of (i) the federal funds rate plus one-half of one percent and
(ii) Bank of America’s prime rate (as such term is defined in the facility), (b) a competitive bid rate solicited
from the syndicate of banks, or (c) the British Bankers Association LIBOR rate (as such term is defined in the
facility), plus an applicable margin, which is initially 70 basis points per annum and is subject to adjustment
according to the our credit ratings, as specified in the facility.
Our revolving credit facility includes, among other customary terms and conditions, limitations (subject to
specified exclusions) on our and our subsidiaries’ ability to incur debt; create liens; engage in certain mergers,
consolidations and acquisitions; sell or transfer assets; enter into agreements which restrict the ability to pay
dividends or make or repay loans or advances; make investments, loans, and advances; engage in transactions
with affiliates; and make dividends.
Our revolving credit facility contains customary events of default, including nonpayment of principal or
other amounts when due; breach of covenants; inaccuracy of representations and warranties; cross-default and/or
cross-acceleration to other indebtedness of the Company or our subsidiaries in excess of $50 million; certain
ERISA-related events; noncompliance by us or any of our subsidiaries with any material term or provision of the
HMO Regulations or Insurance Regulations (as each such term is defined in the facility); certain voluntary and
involuntary bankruptcy events; inability to pay debts; undischarged, uninsured judgments greater than $50
million against us and/or our subsidiaries; actual or asserted invalidity of any loan document; and a change of
control. If an event of default occurs and is continuing under the facility, the lenders thereunder may, among
other things, terminate their obligations under the facility and require us to repay all amounts owed thereunder.
F-25