Narrative
Full Description
Project narrative
On December 15, 2017, financial close was reached on a deal in which a syndicate of 20 banks — including Bank of China and ICBC — entered into a $5,000,000,000 USD syndicated loan agreement with CVS Health Corporation — a U.S.-based retail pharmacy and healthcare company — for the acquisition of Aetna Inc., a leading American health insurance company. This loan was divided into two tranches: a $3,000,000,000 USD 3-year maturity tranche and a $2,000,000,000 USD 5-year maturity tranche. The interest rate for both tranches was LIBOR plus an applicable margin. The proceeds were used by the borrower to finance the strategic acquisition of Aetna Inc., which allowed CVS Health Corporation to vertically integrate its pharmacy operations with a major health insurer and expand its influence across the U.S. healthcare market. While Bank of China contributed $65,100,000 USD to the 3-year tranche (Record ID#108080) and $43,400,000 USD to the 5-year tranche (Record ID#108081), and ICBC contributed $65,100,000 USD to the 3-year tranche (Record ID#108082) and $43,400,000 USD to the 5-year tranche (Record ID#108083), the following lenders also participated: Barclays Bank PLC ($252,000,000 USD — 3-year tranche; $168,000,000 USD — 5-year tranche), Goldman Sachs Bank USA ($252,000,000 USD; $168,000,000 USD), Bank of America, N.A. ($252,000,000 USD; $168,000,000 USD), JPMorgan Chase Bank, N.A. ($252,000,000 USD; $168,000,000 USD), Wells Fargo Bank, N.A. ($252,000,000 USD; $168,000,000 USD), The Bank of Tokyo-Mitsubishi UFJ, Ltd. ($186,000,000 USD; $124,000,000 USD), Mizuho Bank, Ltd. ($186,000,000 USD; $124,000,000 USD), Royal Bank of Canada ($186,000,000 USD; $124,000,000 USD), SunTrust Bank ($186,000,000 USD; $124,000,000 USD), U.S. Bank National Association ($186,000,000 USD; $124,000,000 USD), The Bank of New York Mellon ($120,000,000 USD; $80,000,000 USD), Fifth Third Bank ($96,000,000 USD; $64,000,000 USD), KeyBank National Association ($96,000,000 USD; $64,000,000 USD), PNC Bank, National Association ($96,000,000 USD; $64,000,000 USD), Santander Bank, N.A. ($96,000,000 USD; $64,000,000 USD), Sumitomo Mitsui Banking Corporation ($96,000,000 USD; $64,000,000 USD), TD Bank, N.A. ($65,100,000 USD; $43,400,000 USD), and Guggenheim Life and Annuity Company ($14,700,000 USD; $9,800,000 USD). In November 2019, CVS Health completed the acquisition of Aetna.
Staff comments
1. The original loan agreement text can be accessed at https://www.sec.gov/Archives/edgar/data/64803/000119312517373753/d508259dex101.htm The dropbox link is available via: https://www.dropbox.com/scl/fi/opuxwaygjx36630x7urvz/Source_ID_218160.pdf?rlkey=u82rr8885jkoss1553khjzsxv&st=su159u63&dl=0 2. CVS Health Corporation is an American healthcare company headquartered in Woonsocket, Rhode Island. It owns CVS Pharmacy, one of the largest pharmacy chains in the U.S., and operates health insurance services through Aetna, pharmacy benefit managers, and retail clinics. 3. AidData estimates the interest rate by adding the 6-month average LIBOR rate in December 2017 and an applicable margin based on credit ratings (BBB+ rating or 1.25% margin).