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22. Senior Notes

As of December 31, Senior Notes of the Fresenius Group consisted of the following:

    Book value
€ in millions
  Notional amount Maturity Interest rate 2011 2010
Fresenius Finance B.V.
2006/2013
€500 million Jan. 31, 2013 5.00% 500 500
Fresenius Finance B.V.
2006/2016
€650 million Jan. 31, 2016 5.50% 637 635
Fresenius US Finance II, Inc.
2009/2015
€275 million July 15, 2015 8.75% 264 261
Fresenius US Finance II, Inc.
2009/2015
US$500 million July 15, 2015 9.00% 372 356
FMC Finance VI S.A.
2010/2016
€250 million July 15, 2016 5.50% 248 247
FMC Finance VII S.A.
2011/2021
€300 million Feb. 15, 2021 5.25% 294 0
FMC Finance VIII S.A.
2011/2016
€100 million Oct. 15, 2016 variable 100 0
FMC Finance VIII S.A.
2011/2018
€400 million Sept. 15, 2018 6.50% 395 0
Fresenius Medical Care US Finance, Inc. 2007/2017 US$500 million July 15, 2017 6.875% 383 370
Fresenius Medical Care US Finance, Inc. 2011/2021 US$650 million Feb. 15, 2021 5.75% 498 0
Fresenius Medical Care US Finance II, Inc. 2011/2018 US$400 million Sept. 15, 2018 6.50% 305 0
Senior Notes       3,996 2,369

    Book value
€ in millions
  Notional amount Maturity Interest rate 2011 2010
Fresenius Finance B.V.
2006/2013
€500 million Jan. 31, 2013 5.00% 500 500
Fresenius Finance B.V.
2006/2016
€650 million Jan. 31, 2016 5.50% 637 635
Fresenius US Finance II, Inc.
2009/2015
€275 million July 15, 2015 8.75% 264 261
Fresenius US Finance II, Inc.
2009/2015
US$500 million July 15, 2015 9.00% 372 356
FMC Finance VI S.A.
2010/2016
€250 million July 15, 2016 5.50% 248 247
FMC Finance VII S.A.
2011/2021
€300 million Feb. 15, 2021 5.25% 294 0
FMC Finance VIII S.A.
2011/2016
€100 million Oct. 15, 2016 variable 100 0
FMC Finance VIII S.A.
2011/2018
€400 million Sept. 15, 2018 6.50% 395 0
Fresenius Medical Care US Finance, Inc. 2007/2017 US$500 million July 15, 2017 6.875% 383 370
Fresenius Medical Care US Finance, Inc. 2011/2021 US$650 million Feb. 15, 2021 5.75% 498 0
Fresenius Medical Care US Finance II, Inc. 2011/2018 US$400 million Sept. 15, 2018 6.50% 305 0
Senior Notes       3,996 2,369

All Senior Notes of Fresenius Finance B.V. and of Fresenius US Finance II, Inc. are guaranteed by Fresenius SE & Co. KGaA, Fresenius Kabi AG and Fresenius ProServe GmbH. The holders have the right to request that the issuers repurchase the Senior Notes at 101% of principal plus accrued interest upon the occurrence of a change of control followed by a decline in the rating of the respective Senior Notes. Since January 31, 2011, the Senior Notes of Fresenius Finance B.V. maturing in 2016 may be redeemed at the option of the issuer at prices that have already been fixed at the date of issuance in the indentures. All other Senior Notes of Fresenius Finance B.V. and of Fresenius US Finance II, Inc. may be redeemed prior to their maturity at the option of the issuers, in whole but not in part, at a price of 100% plus accrued interest and a premium calculated pursuant to the terms of the indentures under observance of certain notice periods.

Fresenius SE & Co. KGaA has agreed to a number of covenants to provide protection to the bondholders, which, under certain circumstances, partly restrict the scope of action of Fresenius SE & Co. KGaA and its subsidiaries (excluding Fresenius Medical Care AG & Co. KGaA (FMC-AG & Co. KGaA) and its subsidiaries). These covenants include restrictions on further debt that can be raised, the payment of dividends, the volume of capital expenditure, the redemption of subordinated liabilities and the mortgaging or sale of assets, among other items. Some of these restrictions are lifted automatically when the rating of the respective Notes reaches investment grade. In the event of non-compliance with certain terms of the Senior Notes, the bondholders (owning in aggregate more than 25% of the outstanding Senior Notes) are entitled to call the Senior Notes and demand immediate repayment plus interest. As of December 31, 2011, the Fresenius Group was in compliance with all of its covenants.

On October 17, 2011, FMC Finance VIII S.A. issued €100 million of unsecured, floating-rate Senior Notes at par, which are due in 2016. The Senior Notes carry interest of three-month EURIBOR plus 350 basis points. Net proceeds were used for acquisitions, to repay indebtedness and for general corporate purposes.

On September 14, 2011, Fresenius Medical Care US Finance II, Inc. and FMC Finance VIII S.A. issued unsecured Senior Notes of US$400 million and €400 million, respectively. The Senior Notes have a coupon of 6.5% and are due in 2018. They were issued at an issue price of 98.62% and had a yield to maturity of 6.75%. Net proceeds were used for acquisitions, to refinance indebtedness and for general corporate purposes.

On June 20, 2011, Fresenius Medical Care US Finance, Inc. acquired substantially all of the assets of FMC Finance III S.A. and assumed the obligations of FMC Finance III S.A. under its US$500 million 6.875% Senior Notes due in 2017 and the related indenture. The guarantees of FMC-AG & Co. KGaA, Fresenius Medical Care Holdings, Inc. (FMCH) and Fresenius Medical Care Deutschland GmbH (FMC D-GmbH) for these Senior Notes have not been amended and remain in full force and effect.

On February 3, 2011, Fresenius Medical Care US Finance, Inc. and FMC Finance VII S.A. issued unsecured Senior Notes of US$650 million and €300 million, respectively, which are due in 2021. The Senior Notes issued by Fresenius Medical Care US Finance, Inc. with a coupon of 5.75% at an issue price of 99.06% had a yield to maturity of 5.875%. The Senior Notes issued by FMC Finance VII S.A. have a coupon of 5.25% and were issued at par. Net proceeds were used to repay indebtedness, for acquisitions and for general corporate purposes.

On January 20, 2010, FMC Finance VI S.A. issued €250 million of unsecured Senior Notes with a coupon of 5.50% at an issue price of 98.66%. The Senior Notes had a yield to maturity of 5.75% and are due in 2016. Net proceeds were used to repay short-term indebtedness and for general corporate purposes.

The Senior Notes of Fresenius Medical Care US Finance, Inc., Fresenius Medical Care US Finance II, Inc., FMC Finance VI S.A., FMC Finance VII S.A. and FMC Finance VIII S.A. (wholly-owned subsidiaries of FMC-AG & Co. KGaA) are guaranteed on a senior basis jointly and severally by FMC-AG & Co. KGaA, FMCH and FMC D-GmbH. The holders have the right to request that the respective issuers repurchase the respective Senior Notes at 101% of principal plus accrued interest upon the occurrence of a change of control followed by a decline in the rating of the respective Senior Notes. The issuers may redeem the Senior Notes (except for the floating-rate Senior Notes of FMC Finance VIII S.A.) at any time at 100% of principal plus accrued interest and a premium calculated pursuant to the terms of the indentures.

FMC-AG & Co. KGaA has agreed to a number of covenants to provide protection to the holders which, under certain circumstances, limit the ability of FMC-AG & Co. KGaA and its subsidiaries to, among other things, incur debt, incur liens, engage in sale and leaseback transactions and merge or consolidate with other companies or sell assets. As of December 31, 2011, FMC-AG & Co. KGaA and its subsidiaries were in compliance with all of their covenants under the Senior Notes existing at this point in time.

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