Fresenius Kabi $2.45 billion credit facility to launch Monday in Frankfurt, Wednesday in New York

By Sara Rosenberg

New York, Sept. 4 - Fresenius Kabi has scheduled a management presentation and conference call in Frankfurt on Monday and in New York on Wednesday to launch its proposed $2.45 billion senior credit facility (Baa2) to retail investors, according to a market source.

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, provided strong commitments towards the deal, oversubscribing the target amount.

The facility consists of a $450 million five-year revolver talked at Libor plus 287.5 basis points, a $1 billion five-year term loan A talked at Libor plus 287.5 bps and a $1 billion six-year term loan B talked at Libor plus 350 bps, the source said.

Other financing will come from a $1.3 billion bridge loan commitment that could be replaced by high-yield financing opportunities.

Originally, the term loan A was expected to be sized at $900 million, the term loan B was expected to be sized at $850 million and the bridge loan was expected to be sized at $1.65 billion, but funds were move from the bridge into the term loans as a result of the strong reception during the senior managing agents round, the source explained.

The revolver can eventually have a total size of $650 million since there is $200 million of uncommitted availability.

According to the company, $150 million of the revolver will be made available to APP Pharmaceuticals Inc. and $300 million of the revolver, along with the $200 million uncommitted, will be made available to a financing subsidiary of Fresenius.

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 and the bridge loan 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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