Fresenius Kabi $2.4 billion credit facility to launch to retail investors in early September

By Sara Rosenberg

New York, Aug. 12 - Fresenius Kabi is currently expecting to launch general syndication of its $2.4 billion senior secured credit facility in Europe and the United States in early September, according to a 425 filed with the Securities and Exchange Commission Tuesday.

Deutsche Bank, Credit Suisse and JPMorgan are the senior mandated lead arrangers on the deal, with Deutsche Bank the global coordinator.

During the first phase of syndication, 20 of Fresenius' key relationship banks from Europe, North America and Japan, acting as mandated lead arrangers and joint lead arrangers, have provided strong commitments towards the deal.

With these commitments, the target amount has been substantially oversubscribed, the filing said.

Following review of customary documentation, the first phase of syndication is expected to close on Aug. 20.

The facility consists of a $500 million five-year revolver to be made available to a financing subsidiary of Fresenius, a $150 million five-year revolver to be made available to APP Pharmaceuticals Inc., a $900 million five-year term loan A and an $850 million six-year term loan B.

The company previously estimated that the term loan A will be priced around Libor plus 287.5 basis points and that the term loan B will be priced around Libor plus 350 bps.

Financial covenants include a consolidated leverage ratio, a consolidated fixed-charge coverage ratio, an interest expense coverage ratio and limits amounts spent on capital expenditure.

Proceeds from the credit facility will be used to help fund the acquisition of APP Pharmaceuticals in a transaction that could be valued at up to $5.6 billion, refinance APP's existing senior credit facility, and for general corporate and working capital purposes.

The transaction is expected to close at the end of 2008 or beginning of 2009, subject to certain conditions, including regulatory approvals, and approvals under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

Fresenius Kabi is a Bad Homburg, Germany, infusion therapy and clinical nutrition company. APP is a Schaumburg, Ill., hospital-based injectable pharmaceutical company.

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