MOODY'S GIVES BAA3 RATING TO FRESENIUS MEDICAL CARE FINANCING

     (The following press release from Moody's was received by e-mail. It was 
not confirmed by the sender.) 
Moody's assigns definitive Baa3 rating to Fresenius Medical Care's senior 
secured credit facilities 
Frankfurt am Main, November 20, 2012 -- Moody's Investors Service has 
today assigned a definitive Baa3 rating to USD 3.8 billion worth of bank 
facilities syndicated by Fresenius Medical Care AG & Co. KGaA ("FME" or 
"the group"), following the receipt of the final documentation of the 
loan. This rating is in line with the previously assigned provisional 
rating. The financing was put in place to primarily refinance existing 
senior bank obligations maturing in March 2013. The FME's Ba1 Corporate 
Family Rating (CFR) and unsecured ratings remain unchanged. The outlook
on the ratings is stable.  
RATINGS RATIONALE 
The Baa3 rating (LGD 2, 26%) assigned to around USD3.8 billion senior 
credit facilities issued at the holding level of Fresenius Medical Care 
AG & Co. KGaA reflects the instrument's priority position in the capital 
structure. The facilities are guaranteed on a senior basis by key 
intermediary holding and selected operating companies, and are secured by 
share pledges (65%-100%) of a significant part of the group's operating 
subsidiaries. Compared to the previous bank agreement the senior lenders 
don't benefit from a springing lien which had required security over all 
material assets in case of senior bank debt instrument rating downgrade 
to below Ba3. The removal of the springing lien in the new facility 
agreement weakens senior lenders' security position and makes monitoring 
of guarantor coverage more difficult. As a result our loss given default 
rate increases from 20% to 26%. However, limited debt at operating 
subsidiary level and extra guarantor coverage, primarily from US 
subsidiaries, which is not available to unsecured bond lenders justify 
the upward notching of secured senior lenders. 
FME's Ba1 Corporate Family Rating (CFR) is supported by (i) its absolute
scale, vertical integration and a very strong market position as a 
leading global provider of dialysis products and private dialysis 
services; (ii) continued favourable industry growth trends and the 
recurring non-cyclical nature of its revenues; (iii) high profitability 
levels; and (iv) good financial flexibility. With the extension of FME's
bank lines, the group's short term liquidity also improves
substantially, with barely any debt maturities in the next 12 -- 18 
months. 
The rating is constrained by (i) FME's relatively high adjusted financial
leverage, as evidenced by a debt/EBITDA ratio of 3.5x as per end of June 
2012 LTM; (ii) the company's exposure to tightening healthcare budgets, 
potential regulatory changes, government investigations or changes in the 
payer mix, which could have an impact on the FME's profitability; (iii) a 
pure-play focus on the dialysis market, albeit operating through the 
whole value chain; (iv) high regional concentration on the key US market; 
(v) a strong appetite for acquisitions to complement organic growth,
which are to a large degree debt financed resulting in continued reliance 
on access to capital markets which could lead to short term liquidity
pressures. 
Assignments: 
.. Issuer: Fresenius Medical Care AG & Co. KGaA 
. Senior Secured credit facilities , Assigned Baa3, LGD2, 26% 
Given the strategy of FME to grow the business externally an upgrade of
the rating is currently unlikely. A rating upgrade would require a 
change in the financial policy of FME towards lower external growth and a 
change in the management of short term liquidity. In addition it would 
require enhanced regional diversification, which appears somewhat 
challenging in the medium term, profitability at current levels 
(EBIT-margin in the high teens) and the generation of positive free cash 
flow applied to debt reduction contributing to gradual improvements in 
leverage towards 3.0 times debt/EBITDA and CFO/ debt approaching 20%. 
In Moody's view, downward rating pressure would likely be the result of: 
(i) unfavourable reimbursement changes in core markets or changes in 
payer mix, affecting the group's profit generation; (ii) an increase in 
financial leverage, evidenced by a debt/EBITDA ratio sustainably above 
3.5x and a CFO/debt ratio below 15%; (iii) failure to ensure adequate 
liquidity profile or (iv) material litigation. 
The principal methodology used in rating FME was the Global Healthcare
Service Providers Industry Methodology published in December 2011. Other 
methodologies used include Loss Given Default for Speculative-Grade
Non-Financial Companies in the U.S., Canada and EMEA published in June 
2009 . Please see the Credit Policy page on www.moodys.com for a copy of 
these methodologies. 
FME is the world's leading provider of dialysis products and dialysis
services, with LTM 2012 revenues of USD13.5 billion as of end of 
September 2012. The company is a vertically integrated player with 
operations as a dialysis service provider, a dialysis product
manufacturer for its own dialysis clinics and a supplier of dialysis 
products to external dialysis service providers. FME is controlled by 
Fresenius SE & Co. KGaA (rated Ba1, stable), which owns 31% of the 
company but controls 100% of the general partner of FME, given FME's 
legal status as a Kommanditgesellschaft auf Aktien (KGaA; partnership 
limited by shares). 
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AlexVerbov
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Corporate Finance Group
Moody's Deutschland GmbH
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MatthiasHellstern
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Releasing Office:
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