Fresenius Said to Offer $1.7 Billion Acquisition Loan to Lenders

Fresenius SE, a German health care group, started syndicating a 1.2 billion-euro ($1.7 billion) loan to fund an acquisition that will create Europe’s biggest chain of private hospitals.

The financing includes 900 million euros of term debt and a 300 million-euro credit line, according to two people with knowledge of the deal, who asked not to be identified because the transaction is private. Deutsche Bank AG, Bank of America Corp. and Commerzbank AG are arranging the facilities.

The debt helps fund the company’s 3.07 billion-euro acquisition of 43 hospitals and 15 outpatient centers from Rhoen-Klinikum AG. Fresenius also obtained a 1.8 billion-euro bridge loan to fund the purchase, according to an Oct. 16 statement on its website.

Lenders are invited to company presentations in New York, London and Frankfurt starting Nov. 7, the people said. Fresenius is offering to pay an interest margin of 175 basis points, or 1.75 percentage points, more than the euro interbank offered rate for both the credit line and the 450 million-euro term loan A, said the people. The margin on the term loan B hasn’t been determined.

Matthias Link, a spokesman for Bad Homburg, Germany-based Fresenius, declined to comment on the details of the financing.

The acquisition will add about 2 billion euros in annual sales and 250 million euros in earnings before interest, taxes, depreciation and amortization, Fresenius said on Sept. 13.

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