Narrative
Full Description
Project narrative
On October 30, 2012, a syndicate of 72 banks — including the New York Branch of Bank of China (BOC), the New York Branch of the Industrial and Commercial Bank of China (ICBC), and the New York Branch of the Bank of Communications Co., Ltd. (BoComm) — entered into a $3,200,000,000.00 and a €500,000,000.00 syndicated loan agreement with Fresenius Medical Care AG & Co. KGAA (FME) — a German partnership limited by shares and healthcare company which provides kidney dialysis services, publicly traded on the New York Exchange and the Frankfurt Stock Exchange with its largest (non-majority shareholder) being Germany-headquartered healthcare company Fresenius SE & Co. KGaA — and Fresenius Medical Care Holdings, Inc. (FMCH) — a New York corporation wholly owned by Fresenius Medical Care North America Holdings Limited Partnership, a Delaware corporation owned by Fresenius Medical Care Beteiligungsgesellschaft mbH (98.9% stake), Fresenius Medical Care US Zwei Vermögensverwaltungs GmbH & Co. KG [a Germany-incorporated limited liability partnership owned by Fresenius Medical Care Vermögensverwaltungs GmbH (as general partner) (1% stake) and Fresenius Medical Care Beteiligungsgesellschaft mbH (as limited partner) (99% stake)] (0.1% stake), and Fresenius Medical Care US Vermögensverwaltungs GmbH & Co. KG [a Germany-incorporated limited liability partnership owned by Fresenius Medical Care Vermögensverwaltungs GmbH (as general partner) (1% stake) and Fresenius Medical Care Beteiligungsgesellschaft mbH (as limited partner) (99% stake)] (1% stake). The use of the proceeds were to be used by the borrowers to refinance certain existing indebtedness and for general corporate purposes. This five-year maturity syndicated loan was divided into four tranches: a $200,000,000.00 USD U.S. dollar-denominated Revolving loan tranche, a $400,000,000.00 USD Multi-Currency Revolving loan tranche, €500,000,000.00 EUR Euro-denominated Revolving loan tranche, and $2,600,000,000.00 Tranche A Term loan tranche. Tranche A Term Loan shall be repaid in eighteen consecutive quarterly installments on the last business day of each July, October, January and April, beginning on July 30, 2013 and ending on October 30, 2017. The first seventeen installments will each be in the principal amount of Fifty Million Dollars ($50,000,000) and the last installment will be in the remaining principal amount. The interest rate for both the tranche loan and the Revolving Credit Facilities (RCFs) is fixed LIBOR rate plus an applicable margin and a commitment fee based on the consolidated leverage ratio of the borrowers. The default rate is the regular interest plus 2%. While BOC committed $18,000,000.00 USD to the $200 million USD Revolving loan tranche (Record ID#104022) and $27,000,000 USD to the Tranche A Term loan tranche (Record ID#104024), both ICBC committed $45,000,000.00 USD (Record ID#104045) and BoComm committed $5,000,000.00 USD to the $2.6 billion USD Tranche A Term loan tranche (Record ID#104026), the following banks also contributed to the loan: Bank of America (Administrative Agent and Collateral Agent), Deutsche Bank AG New York Branch, Commerzbank AG Filial Luxembourg, JP Morgan Chase Bank, N.A., The Bank of Nova Scotia, Unicreditbank AG New York Branch, Wells Fargo Bank, National Association, Suntrust Bank, DNB Bank ASA, Grand Cayman Branch,KFW IPEX-Bank GmbH Palmenjartenstrabe 5 9 60325 Frankfurt am Main, Landesbank Hessen-Thüringen Girozentrale, DZ Bank AG Deutsche Zentral-Genossenschaftsbank, Credit Suisse AG, Cayman Islands Branch, Barclays Bank PLC, Sovereign Bank, N.A., Credit Agricole Corporate And Investment Bank Deutschland Taunusanlage 14 60325 Frankfurt Am Main, Sumitomo Mitsui Banking Corporation, Lloyds TSB Bank PLC., Mizuho Corporate Bank, LTD.,The Royal Bank of Scotland PLC Niederlassung Frankfurt, Landesbank Baden Wuerttemberg, Cayman Islands Branch, Society Generale, Acting through its New York Branch, BNP Paribas, First Hawaiian Bank, TD Bank, N.A., The Bank of Tokyo-Mitsubishi UFJ, LTD., HSBC Bank, PLC, BBVA Ireland P.L.C., Bayern LB Bayerische Landesbank, PNC Bank, National Association, SEB AG, Citibank, N.A., London Branch, The Bank of New York Mellon, Credit Industrial et Commercial, Credit mutuel- BECM Niederlassung Deutschland, U.S. Bank National Association, Raymond James Bank, N.A., Raiffeisen Bank International AG, Mediobanca international (Luxembourg) S.A., Royal Bank of Canada, The Huntington National Bank, Keybank National Association, Morgan Stanley Bank, N.A., Goldman Sachs Bank USA, The Northern Trust Company, Fifth Third Bank, Bank of Taiwan, New York Branch, Deustche Apothekner - UMND Arztebank, Chang Haw Commercial Bank, LTD., New York Branch, Taiwan Cooperative Bank LTD. Seattle Branch, E. Sun Commercial Bank, LTD., Los Angeles Branch, Taipei Fubon Commercial Bank Co., LTD., Taiwan Business Bank, Los Angeles branch, MEGA International Commercial Bank CO., LTD., New York Branch, MEGA International Commercial Bank CO., LTD., Silicon Valley Branch, Chinatrust Commercial Bank, New York Branch, Cathay United Bank, LTD., DBS Bank LTD., Los Angeles Agency, The Bank of East Asia, Limited, Los Angeles Branch, Associated Bank N.A., First Commercial Bank, New York Branch, Hua Nan Commercial Bank. LTD., Lost Angeles Branch, American Savings Bank, F.S.B., California First National Bank, People’s United Bank, Eastern Bank, First Tennessee Bank, NA., Far East National Bank, and First Niagara Bank, N.A. In addition, the following guarantors pledge to repay the lenders for any outstanding amount that the borrowers may not be able to pay: Fresenius Medical Care Deutschland GmbH, Fresenius Medical Care Beteiligungsgesellschaft mbH, Fresenius Medical US Beteiligungsgesellschaft mbH, Fresenius Medical Care ZWEI Vermogensverwaltungs GmbH & Co. KG, Fresenius Medical Care GmbH, FMC Finance II S.a.r.l, FMC Finance VI S.a., FMC Finance VII S.A., FMC Finance VIII S.A., Fresenius Medical Care North America Holding Limited Partnership, Bio-Medical Applications Management Company, INC., Bio-Medical Applications of Maine, INC., Everest Healthcare Holdings, INC., Fresenius Securities, INC., SRC Holding Company, INC., Fresenius Medical Care US Finance INC., Fresenius Medical Care US Finance II INC., Fresenius Medical Care B, LLC., Stat Dialysis Holdings, INC., Liberty Dialysis Intermediate Holdings II, INC., Renal Advantage Partners, LLC., EA Acquisition CO., LLC, RAI II, LLC, RAI Care Centers Holdings I, LLC, RAI Care Centers Holdings II, LLC, Liberty Dialysis Intermediate Holdings, INC., Liberty Dialysis, INC., Liberty II, INC., Liberty III, INC., Liberty IV, INC., Summit Dialysis II, INC., Liberty Ignition, INC., Liberty Ignition II, INC., Liberty Ignition III, INC., Liberty Venture Partners, LLC, American Access Care Investment Holdings, LLC, Fresenius Vascular Care, INC., Renex Corp., Liberty Acquisitions LLC, and New York Dialysis Services, INC. On November 26, 2014, the 2012 credit agreement was amended to increase the total credit facility to approximately $4,400,000,000 USD and extend the term for an additional two years until October 30, 2019. The new loan includes a revolving credit facility of approximately $ 1,500,000,000 comprising a $ 1,000,000,000 USD revolving facility and a € 400,000,000 EUR revolving facility; a term loan facility of $ 2,300,000,000; and a term loan facility of € 276,000,000 EUR scheduled to mature on October 30, 2019. Interest on the credit facilities is at a rate equal to either (LIBOR or EURIBOR plus an applicable margin. In addition to scheduled principal payments, indebtedness outstanding under the amended 2012 credit agreement would be reduced by portions of the net cash proceeds received from certain sales of assets. Obligations under the amended 2012 credit agreement are secured by pledges of capital stock of certain material subsidiaries in favor of the lenders. In addition, the amended credit agreement in 2014 provides for a limitation on dividends, share buy-backs and similar payments and requires the borrowers to comply with a maximum consolidated leverage ratio. Bank of China's contribution to the upsizing of the USD-denominated revolving credit is captured in Record ID#104081. On July 11, 2017, the Borrower further amended and extended its syndicated credit agreement resulting in a total credit facility of approximately $3.9 billion USD with maturities in 2020 and 2022. The amended credit agreement is now unsecured and has lower tiered pricing for interest rates. In August 2019, the RCF of the credit facility was increased by €100 million EUR to expand the financial cushion.
Staff comments
1. Fresenius Medical Care AG & Co. KGaA is a German healthcare company which provides kidney dialysis services through a network of 4,171 outpatient dialysis centers, serving 345,425 patients. Fresenius Medical Care Holdings, Inc. is the U.S.bases subsidiary of the German-based company. FMC has 38% market share of the dialysis market in the United States. 2. AidData has coded the interest rate of this syndicated loan as the sum of the 6-month average LIBOR rate in October 2012 (0.58%) plus the applicable margin (2%) determined by the company's Consolidated Leverage Ratio in 2012 (0.58%+2%=2.58%). For more information on interest rates, consult pages 3 and 111 on the credit agreement. 3. The Commitment fee based on the Consolidated Leverage Ratio as of October 2012 is 0.625%. 4. AidData calculated the de facto grace period by dividing the months lead up to the first loan payment date (9 months) by 12 months (9/12=0.75 years). 5. AidData does not record the BOC, ICBC and BoComm's maturity extensions as projects after the first and second amendments because these amendments to the original credit agreement created de facto new loans, and not, in fact, the rescheduling of old debt (See pg. 43-44 of 2nd Amendment: https://www.sec.gov/Archives/edgar/data/1333141/000104746917006724/a2233570zex-2_34.htm). Because ICBC left the loan syndicate and was replaced by another BOC branch, AidData does not record the extensions to avoid potential overestimation. In the absence of further information, this issue warrants further investigaton.