Narrative
Full Description
Project narrative
On May 1, 2023, financial close was reached on a deal in which a syndicate of 20 banks — including the New York Branch of the Bank of China (BOC) and the New York Branch of the Industrial and Commercial Bank of China (ICBC) — entered into a $5 billion USD 364-day term loan agreement with CVS Health Corporation — a U.S.-based retail pharmacy and healthcare company — for the acquisition of Oak Street Health, a primary care network specializing in care for older adults. The maturity of the loan was 364 days and the interest rate was SOFR plus an applicable margin. The proceeds were used by the borrower to finance the strategic acquisition of Oak Street Health, expanding CVS Health Corporation’s healthcare delivery capabilities and strengthening its position in the primary care sector across the United States. On February 8, 2023, CVS Health entered into a definitive agreement to acquire Oak Street Health for $39 USD per share, or $10.6 billion USD. The acquisition was completed on May 2, 2023. While Bank of China (Record ID#108093) and ICBC (Record ID#108094) contributed to this loan, the following lenders also participated: Barclays Bank PLC, Bank of America, N.A., Goldman Sachs Bank USA, JPMorgan Chase Bank, N.A., Wells Fargo Bank, National Association, Citibank, N.A., Credit Suisse AG, New York Branch, Mizuho Bank, Ltd., Royal Bank of Canada, Truist Bank, U.S. Bank National Association, Fifth Third Bank, National Association, Morgan Stanley Bank, N.A., PNC Bank, National Association, Sumitomo Mitsui Banking Corporation, The Bank of New York Mellon, KeyBank National Association, and TD Bank, N.A. On May 2, 2023, the acquisition was completed.
Staff comments
1. The original loan agreement can be accessed at https://www.sec.gov/Archives/edgar/data/64803/000094787123000511/ss2023948_ex1001.htm. The dropbox link for the loan is available here: https://www.dropbox.com/scl/fi/dp9mv4vzdrg3tryzyz61t/Source_ID_218210.pdf?rlkey=1cyklb9isr0vixe29356l5wuo&st=xwh2omu5&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. Oak Street Health was an American network of primary care centers focused specifically on serving Medicare-eligible patients, especially older adults. The company was founded in 2012 in Chicago, Illinois, with a mission to rebuild healthcare as it should be — focusing on preventive care and minimizing unnecessary hospitalizations among seniors. 3. AidData estimates the interest rate by adding the 6-month average SOFR rate in May 2023 and an applicable margin based on credit ratings (BBB rating or 1.25% margin). 4. The individual contributions of the 20 lenders to this $5,000,000,000 USD syndicated loan are unknown. For the time being, AidData has estimated the contribution of Bank of China by assuming that each lender contributed an equal amount ($250,000,000 USD) to the loan syndicate.