China Merchants Bank contributes $50 million USD to a $1 billion USD syndicated revolving credit facility to Merck & Co. for general corporate purposes

Project narrative

On May 6, 2009, a syndicate of banks — including China Merchants Bank Co., Ltd. and JPMorgan Chase Bank, N.A. serving as administrative agent — entered an Incremental Credit Agreement for a $1.0 billion USD syndicated revolving credit facility (RCF) to Merck & Co., Inc. — a New Jersey-incorporated American multinational pharmaceutical company headquartered in Rahway, New Jersey listed on the New York Stock Exchange — for general corporate purposes purposes. This RCF carried a maturity period of one-year (364 days) from the merger date (ended up being November 3, 2009) and an interest rate based on the borrower's option, being either the administrative agent's prime rate or the federal funds rates plus 0.50% or one-month LIBOR plus a margin of 1.00% or the reserve-adjusted eurodollar rate plus an applicable margin. This RCF was unsecured but guaranteed. The proceeds were to be used by the borrower for general corporate purposes including to backstop commercial paper and to fund the Merck & Co., Inc. and Schering-Plough Corporation merger. China Merchants Bank committed $50 million USD to the loan syndicate. In 2009, as part of a merger, Merck & Co. Inc. was renamed Merck Sharp & Dohme Corp (Old Merck), and Schering-Plough Corporation was renamed Merck & Co., Inc. (New Merck). Old Merck became a wholly-owned subsidiary of New Merck. On November 3, 2009, New Merck signed a Guarantor Joinder Agreement to guarantee the Incremental Credit Agreement.