Fresenius expected to launch revolver and two term loans on Thursday

By Sara Rosenberg

New York, May 29 - Fresenius SE & Co. KGaA is scheduled to hold a bank meeting in Europe on Thursday to launch its revolver and term loan A debt, according to a market source.

A second source said that a New York bank meeting for the pro rata debt may take place next week.

The institutional loans are expected to launch in July.

Company documents have outlined the roughly €2.7 billion credit facility as a €400 million revolver, a €700 million A facility, a $200 million A facility, a €500 million B facility and a $1.2 billion B facility. The facilities carry maturities of five to seven years.

Proceeds will be used to help fund the public takeover offer made to Rhon-Klinikum AG shareholders and the refinancing of a credit facility that was obtained in 2008 for the acquisition of APP Pharmaceuticals.

Other funds for the transaction will come from about €2.1 billion of bonds comprised of €1.5 billion and $750 million.

Backing the entire financing package is a commitment for a bridge loan divided between €3.1 billion and $2.15 billion.

Deutsche Bank, JPMorgan, Societe Generale, Credit Suisse and UniCredit are the lead banks on the financing.

In addition, the company intends to raise up to €1 billion through equity instruments.

The company is targeting net debt to EBITDA of less than 3.5 times but more than 3 times in 2012 and at the upper end of the 2.5 times to 3 times range in 2013.

Under the proposed takeover, Fresenius is offering Rhon-Klinikum shareholders €22.50 per share in cash, for a total purchase price of around €3.1 billion.

Closing is targeted for the third quarter, with the offer contingent upon a minimum acceptance threshold of 90% of Rhon-Klinikum's share capital and upon antitrust approval. Fresenius anticipates that a few hospital locations may need to be divested to secure antitrust clearance.

The plan is to combine Rhon-Klinikum into Helios to create a new entity named Helios-Rhon. This entity will have sales of about €6 billion and will be the largest private hospital operator in Germany.

Fresenius is a Bad Homburg, Germany-based provider of dialysis services and products.

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