“While we anticipated some resistance from the banks to follow our proposal, it turned out that it was fully understood and supported by the respective banks,” explains Steffen Diel, Global Treasury, Head of Treasury Finance at SAP.
SAP achieved a 100% hit rate with the invited banks, with all 27 agreeing to sign the final credit facility agreement on 13th November 2013. From this date the €2 billion RCF became effective. The Bank of Tokyo- Mitsubishi, Landesbank Hessen-Thüringen, Citigroup, and Deutsche Bank all acted as book-runners to this transaction. Allen & Overy LLP Frankfurt was SAP’s legal adviser.
Best practice and innovation
Using a two-tiered structure, segregating banks into two different credit commitment levels is a real first for SAP. This structure helps to optimise bank relationship management through offering a leaner approach. The tiered structure also assists in setting clear expectations towards the banks regarding any ancillary business opportunities.
Innovation was shown through the soft market sounding process. The treasury team called every individual bank on the pre-defined list in order to explain the targeted terms and conditions. The experience with the soft market sounding was very positive, based on providing the utmost transparency at an early stage, close alignment with the banks’ relationship managers and optimised process management. The result was a 100% hit ratio (ie none of the invited banks dropped out) and a significant oversubscription of more than 60%.
“The successful refinancing of SAP’s syndicated revolving credit facility once again acknowledges SAP’s strong financial position and excellent reputation in the capital markets,” says Diel.