Bank of Communications contributes to $4 billion USD syndicated term loan to Baxter International for the acquisition of Hill-Rom Holdings in 2021

Project narrative

On September 30, 2021, financial close was reached on a deal in which a syndicate of 37 banks — including the Chicago Branch of Bank of China (BOC), the New York Branch of Agricultural Bank of China (ABC), the New York Branch of China Construction Bank Corporation (CCB) and New York Branch of Bank of Communications Co., Ltd. (BoComm) — entered into a $4 billion USD syndicated term loan credit agreement with Baxter International, Inc. — an American multinational healthcare company that primarily focuses on products to treat kidney disease and other chronic and acute medical conditions — for the acquisition of Hill-Rom Holdings, Inc. This loan has two tranches: tranche one involves $2 billion USD with a maturity of 3 years and tranche two involves $2 billion USD and has a maturity of 5 years. This term loan replaces a $11.4 billion 364-day senior unsecured note that expired on September 2, 2021. The term loan enables Baxter to borrow funds in U.S. Dollars on an unsecured basis (LIBOR+applicable margin) on the closing date of the Merger in order to fund, in part, the Merger and related transactions, and pay fees and expenses related to the Merger and related transactions. Baxter is also required to pay a ticking fee that will accrue on the aggregate undrawn commitments under the Term Loan Credit Agreement at a per annum rate based upon Baxter’s long-term debt rating in effect from time to time. The Term Loan Credit Agreement contains financial and other covenants, including a net leverage ratio covenant. On September 28, 2022, after the retirement of LIBOR rates, the credit agreement was amended twice to use SOFR as the basis of the interest rates. On March 13, 2023, the borrower and the lenders entered into the 3rd amendment, changing the net leverage ratio. On December 13, 2021, the Borrower completed the acquisition of all outstanding equity interests of Hill-Rom Holdings, Inc. (Hillrom) for a purchase price of $10.48 billion USD. Including the assumption of Hillrom's outstanding debt obligations, the enterprise value of the transaction was $12.84 billion USD. While BOC (Record ID#103515), ABC (Record ID#103518), BoComm (Record ID103520) and CCB (Record ID#103521) contributed to this loan, the following 33 lenders contributed to the loan: Citicorp North America, INC., Wells Fargo Bank, National Association, US Bank, National Association, The Bank of Nova Scotia, New York Branch of Banco Bilbao Vizcaya Argentaria, S.A., PNC Bank, National Association, Sumitomo Mitsui Banking Corporation, Societe Generale, DBS Bank Ltd., National Westminster Bank PLC, Royal Bank of Canada, Fifth Third Bank, National Association, Bank of America, N.A. (Syndication Agent), JPMorgan Chase Bank, N.A.(Administrative Agent), Deutsche Bank AG New York Branch, Barclays Bank PLC, MUFG Bank, Ltd., First National Bank of Pennsylvania, Mediobanca International (Luxembourg), Credit Suisse, New York Branch, Citibank, Huntington National Bank, New York Branch of State Bank of India, Bank of the Philippine Islands, HSBC Bank USA, National Association, Goldman Sachs Bank USA, Mizuho Bank Ltd., Citizens Bank, N.A., The Northern Trust Company, First Hawaiian Bank, BankUnited, N.A., American Savings Bank, F.S.B., Chang Hwa Commercial Bank, Ltd., New York Branch, The Toronto-Dominion New York Branch, and The Chiba Bank Ltd., New York Branch. In the first half of 2022, the Borrower repaid $335 million of the $2.0 billion three-year term loan facility and $355 million of the $2.0 billion five-year term loan facility. As of December 31, 2023, the Borrower had $130 million outstanding under one tranche of the U.S. Dollar-denominated term loan credit facility that matures in 2024 and $1.64 billion outstanding under the other tranche of the U.S. Dollar-denominated term loan credit facility that matures in 2026..