Financing

Fresenius meets its financing needs through a combination of operating cash flows generated in the business segments and short, mid, and long-term debt. In addition to bank loans, important financing instruments include the issuance of Senior Notes, Euro Notes, Trust Preferred Securities, a commercial paper program, a receivables securitization program, and Mandatory Exchangeable Bonds.

In 2009, the Group’s financing activities mainly involved the refinancing of existing and maturing financing instruments.

In January 2009, Fresenius issued unsecured Senior Notes in two tranches through its subsidiary Fresenius US Finance II, Inc. The proceeds were US$ 800 million. The euro tranche was issued in a principal amount of € 275 million and was priced at 93.024 %. With a coupon of 8.75 %, the euro tranche has a yield to maturity of 10.25 %. The US dollar tranche was issued in a principal amount of US$ 500 million and was priced at 93.076 %. With a coupon of 9.00 %, its yield to maturity is 10.50 %. Both tranches are due in 2015 and are non-callable. Fresenius used the proceeds to refinance the existing US$ 650 million bridge facility, which was taken up to finance the APP Pharmaceuticals acquisition, and to repay short-term debt. The financing of the APP Pharmaceuticals acquisition was completed with this transaction.

In April 2009, Fresenius Medical Care issued Euro Notes in the principal amount of € 200 million in a private placement with European investors. These new Euro Notes, which are senior and unsecured, were issued by Fresenius Medical Care AG & Co. KGaA in four tranches, with maturities of 3.5 and 5.5 years and fixed and floating interest rates. The proceeds were used to redeem Euro Notes that were due in July 2009.

In June 2009, Fresenius placed a tap to its 2006 Senior Notes by Fresenius Finance B.V. This transaction had a principal amount of € 150 million and was priced at 92.0 %. With a coupon of 5.5 %, the yield to maturity is 7.0 %. The Notes were also offered in a private placement to institutional investors, which was well oversubscribed. The proceeds were used to repay short-term debt. This has lengthened the maturity profile of our debt.

In January 2010, Fresenius Medical Care issued unsecured Senior Notes due in 2016 in the principal amount of € 250 million. The coupon is 5.5 %. With an issue price of 98.6636 %, the yield to maturity is 5.75 %. The proceeds were used to repay short-term debt and for general corporate purposes.

As the chart shows, further larger scale refinancing within the Fresenius Group is only due in 2011.

Fresenius SE has a commercial paper program under which up to € 250 million in short-term notes can be issued. No commercial papers were outstanding as of December 31, 2009 and December 31, 2008.

The Fresenius Group has drawn about € 4.7 billion of bilateral and syndicated credit lines. In addition, the Group had approximately € 1.3 billion in unused credit lines as of December 31, 2009 (including committed credit lines of € 0.8 billion) available. These credit facilities are generally used for covering working capital needs and are – with the exception of the Fresenius SE 2008 credit agreement and the Fresenius Medical Care 2006 credit agreement – usually unsecured.

As of December 31, 2009, both Fresenius SE and Fresenius Medical Care AG & Co. KGaA, including all subsidiaries, complied with the covenants under all the credit agreements.

Detailed information on the Fresenius Group’s financing can be found here.

Financial position – FIVE-YEAR OVERVIEW


in million € 2009 2008 2007 2006 2005
1 Trade accounts receivable and inventories, less trade accounts payable and payments received on accounts.
Operating Cash flow 1,553 1,074 1,296 1,052 780
as % of sales 11.0 8.7 11.4 9.8 9.9
Working Capital 1 3,088 2,937 2,467 2,322 2,159
in % of sales 21.8 23.8 21.7 21.5 27.4
Investments in property, plant and equipment, net 662 736 662 571 331
Cash flow before acquisitions and dividends 891 338 634 481 449
as % of sales 6.3 2.7 5.6 4.5 5.7

in million € 2009 2008 2007 2006 2005
1 Trade accounts receivable and inventories, less trade accounts payable and payments received on accounts.
Operating Cash flow 1,553 1,074 1,296 1,052 780
as % of sales 11.0 8.7 11.4 9.8 9.9
Working Capital 1 3,088 2,937 2,467 2,322 2,159
in % of sales 21.8 23.8 21.7 21.5 27.4
Investments in property, plant and equipment, net 662 736 662 571 331
Cash flow before acquisitions and dividends 891 338 634 481 449
as % of sales 6.3 2.7 5.6 4.5 5.7

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