September 1997
$1,500,000,000
Private Placement of Commercial Paper Notes
THE COMMERCIAL PAPER NOTES ("NOTE") HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND INITIAL SALE OF THE NOTES
MAY BE MADE ONLY TO INSTITUTIONAL INVESTORS APPROVED AS "ACCREDITED
INVESTORS" (AS DEFINED IN RULE 501 (a) UNDER THE ACT) BY CHEMICAL SECURITIES
INC. ("CSI") OR ANOTHER AUTHORIZED PLACEMENT AGENT, AN ("AUTHORIZED
PLACEMENT AGENT"). SUBSEQUENT SALES OF THE NOTES MAY BE MADE ONLY TO
INSTITUTIONAL INVESTORS APPROVED AS ACCREDITED INVESTORS BY AN AUTHORIZED
PLACEMENT AGENT OR TO "QUALIFIED INSTITUTIONAL BUYERS" (AS DEFINED IN RULE
144A UNDER THE ACT). BY ITS ACCEPTANCE OF A NOTE, THE PURCHASER REPRESENTS
(1) THAT THE NOTE IS BEING ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR
FOR SALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF: (2) THAT IT IS AN
ACCREDITED INVESTOR OR, IN THE CASE OF RESALES PURSUANT TO RULE 144A, THAT
IT IS A QUALIFIED INSTITUTIONAL BUYER; (3) THAT IT UNDERSTANDS THAT THE NOTE
MAY BE SOLD TO IT PURSUANT TO RULE 144A; (4) THAT IT AGREES THAT ANY RESALE
OF THE NOTE WILL BE MADE ONLY IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE ACT AND ONLY (A) TO AN AUTHORIZED PLACEMENT AGENT, (B) THROUGH
AN AUTHORIZED PLACEMENT AGENT TO AN APPROVED INSTITUTIONAL ACCREDITED
INVESTOR OR A QUALIFIED INSTITUTIONAL BUYER OR (C) DIRECTLY TO A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MADE PURSUANT TO RULE 144A; AND
(5) AS TO THE OTHER MATTER SET FORTH UNDER THE SECTION "PRIVATE PLACEMENT"
CONTAINED HEREIN.
CREDIT RATINGS
Commercial Paper
Standard & Poor's Ratings Service A-2
Moody's Investors Service P-2
TERMS OF COMMERCIAL PAPER NOTES
Issuer: Humana Inc. (the "Company").
Incorporation: Delaware
Program Size: Authorized to a maximum outstanding
of $1,500,000,000.
Securities: Unsecured commercial paper notes (the "Notes"),
ranking pari passu with Humana Inc.'s other
unsubordinated and unsecured indebtedness.
Exemption: The Notes are exempt from registration under
the Securities Act of 1933 pursuant to Section
4(2), as amended, and cannot be resold unless
registered or pursuant to an exemption from
registration.
Offering Price: Par less a discount representing an interest
factor or, if interest bearing, at par.
Denominations: Minimum of $250,000.
Maturities: Up to 270 days from date of issue.
Redemption: The Notes will not be redeemed prior to
maturity or be subject to voluntary prepayment.
Form: Each Note will be evidenced by (i) a note
certificate issued in bearer form or (ii) one
of two master notes (interest bearing or
discount) registered in the name of the nominee
of the Depository Trust Company ("DTC"). Each
master note (the "Book-Entry Notes") will be
deposited with the Issuing and Paying Agent as
subcustodian for DTC or its successor. The
Company has been advised that DTC will record,
by appropriate entries on its book-entry
registration and transfer system, the
respective amounts payable in respect of Book-
Entry Notes. Payments by DTC participants to
purchasers for whom a DTC participant is acting
as agent in respect of Book-Entry Notes will be
governed by the standing instructions and
customary practices under which securities are
held at DTC through DTC participants.
Settlement: Unless otherwise agreed to, same day basis, in
immediately available funds.
Issuing & Paying Agent: The Chase Manhattan Bank
55 Water St. - 2nd Floor, Room 234
New York, NY 10041
USE OF PROCEEDS
Proceeds from the sale of the commercial paper notes will be used to meet
working capital requirements and for general corporate purposes, including
the funding of acquisitions and share repurchases.
BANK FACILITIES
Humana Inc. maintains unsecured bank borrowing facilities sufficient to
support the commercial paper outstanding.
PRIVATE PLACEMENT
The Commercial Paper Notes (the "Notes") have not been registered under the
Securities Act of 1933, as amended (the "Act") in reliance upon the exemption
from registration provided by Section 4(2) thereof, which exempts transactions
by an issuer not involving any public offering. The Notes are being offered
initially only to accredited investors in minimum denominations of $250,000.
In the case of a non-bank purchaser acting as a fiduciary for one or more
third parties, each third party must be an accredited investor and must
purchase at least $250,000 in Notes. Each purchaser of a Note from or
through an Authorized Placement Agent will be deemed to have represented and
agreed as follows: (1) the purchaser understands that the Notes are being
issued only in transactions not involving any public offering within the
meaning of the Act; (2) the purchaser is a sophisticated institutional
investor who (A) is an "Accredited Investor" (as that term is defined in
Rule 501(a) of Regulation D under the Act) (or is a fiduciary or agent (other
than a U.S. bank or savings and loan association) which is purchasing the
Notes for the account of an institutional Accredited Investor), (B) has
knowledge and experience (or is a fiduciary or agent with sole investment
discretion having such knowledge and experience) in financial and business
matters and it (or such fiduciary or agent) is capable of evaluating the
merits and risks of investing in the Notes, (C) has had access to such
information as the purchaser deems necessary in order to make an informed
investment decision, and (D) in the case of a resale of Notes pursuant to
Rule 144A under the Act, is a "Qualified Institutional Buyer" as defined in
Rule 144A or is a Qualified Institutional Buyer purchasing the Notes on
behalf of one or more other Qualified Institutional Buyers; (3) such Note
is being purchased for the purchaser's own account (or for the account of one
or more institutional Accredited Investors (or, in the case of a resale
pursuant to Rule 144A under the Act, one or more other Qualified Institutional
Buyers) for which it is acting as duly authorized fiduciary or agent) for
investment and not with a view to, or for sale in connection with, any
distribution thereof; (4) if in the future the purchaser (or any such
investor or any other fiduciary or agent representing such investor) decides
to sell such Note prior to maturity, it will be sold only in a transaction
exempt from registration under the Act, and only (A) to an Authorized
Placement Agent, (B) through an Authorized Placement Agent to an institutional
investor approved by an Authorized Placement Agent as an Accredited Investor
or a Qualified Institutional Buyer or (C) directly to a Qualified
Institutional Buyer in a transaction made pursuant to Rule 144A; (5) the
purchaser understands that, although an Authorized Placement Agent may
repurchase Notes, the Authorized Placement Agents are not obligated to do so,
and accordingly the purchaser (or any such other investor) should be prepared
to hold such Note until maturity; (6) the purchaser has had the opportunity
to ask questions of, and receive answers from, the Company; (7) the purchaser
acknowledges that the Authorized Placement Agents have not verified any of the
information contained or incorporated by reference in this Memorandum and make
no representation of any kind as to the accuracy or completeness of such
information; (8) the purchaser acknowledges that Notes sold to the purchaser
by an Authorized Placement Agent may be sold to the purchaser pursuant to
Rule 144A under the Act; and (9) the purchaser understands that each Note
will bear a legend substantially as set forth in capital letters on the cover
page.
HUMANA INC.
Since 1983, the Company has offered managed health care products which
integrate medical management with the delivery of health care services through
a network of providers who share financial risk or who have incentives to
deliver cost-effective medical services. These products are marketed
primarily through health maintenance organizations ("HMOs") and preferred
provider organizations ("PPOs") that require or encourage the use of
contracting providers. HMOs and PPOs control health care costs by various
means, including pre-admission approval for hospital inpatient services and
pre-authorization of outpatient surgical procedures. The company also offers
various specialty and administrative service products including dental, group
life, workers' compensation, and pharmacy benefit management services.
AVAILABLE INFORMATION
Humana Inc. is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and, in accordance therewith, files reports
and other information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information may be inspected without
charge at the public reference facilities maintained by the Commission at 450
Fifth Street, NW, Washington, D.C. 20549, and at the Regional Offices of the
Commission. Copies thereof may be obtained from the Commission upon payment
of the prescribed fees. If available, such reports and other information may
also be accessed electronically through the Commission's electronic data
gathering, analysis and retrieval system ("EDGAR"). Humana Inc. will provide
without charge to each purchaser of the Notes, upon oral or written request,
a copy of any and all documents filed with the Commission and any and all
publicly available financial information. Requests should be directed to:
Humana Inc., 500 West Main Street, Louisville, Kentucky 40202, (502) 580-1000.
CSI AFFILIATES
Chase Manhattan Bank and other lending affiliates of CSI participate on a
regular basis in various general financing and banking transactions and
services for the Company. Proceeds from the sales of the Notes may be used
to repay indebtedness of the Company to The Chase Manhattan Bank or other
lending affiliates of CSI.
ADDITIONAL INFORMATION
If you require additional information or have any questions, please contact:
Ronald D. Flynn
Money Market Origination
Chase Securities Inc.
270 Park Avenue, 7th Floor
New York, NY 10017
Phone: (212) 834-3435
Fax: (212) 834-6560
The information contained herein has been obtained from sources which CSI
believes to be reliable; however, CSI makes no representation as to either
the completeness or accuracy of this information.
CSI, a wholly-owned subsidiary of The Chase Manhattan Corporation, is a
separate entity from The Chase Manhattan Bank and other lending affiliates.
Unless expressly disclosed otherwise to you, securities sold, offered or
recommended by CSI are not deposits, are not insured by the Federal Deposit
Insurance Corporation, are not guaranteed by an affiliated bank or other
lending affiliate, and are not otherwise an obligation or responsibility of
any affiliated bank or other lending affiliate.
Offering Memorandum Approval:
The information in the sections "CSI Affiliates" and "Additional Information"
is particular to Chase Securities Inc. All other information contained in
this memorandum has been provided by and agreed upon by the Company.
Approved:
By: James W. Doucette
Title: Vice President and Treasurer
Date: September 11, 1997