Valeant Gets Funding for Bausch Deal; RCN Cable Unit Refinances

Valeant Pharmaceuticals International Inc. (VRX) obtained as much as $7.2 billion of debt financing for its purchase of Bausch & Lomb Holdings Inc., while RCN Corp.’s Yankee cable unit was among companies asking lenders in the loan market to lower their borrowing costs.

Valeant got financing of $6.7 billion to $7.2 billion from Goldman Sachs Group Inc. to help fund its $4.5 billion purchase of Bausch & Lomb and will spend $4.2 billion to repay the eye-care company’s debt, according to a joint company statement. RCN, the cable-television and Internet provider, is seeking a lower rate on $848 million of loans for its Yankee Cable Acquisition LLC unit, according to a person with knowledge of the transaction.

The first-lien term portion due in March 2020 may pay interest at 3.25 percentage points to 3.5 percentage points more than the London interbank offered rate, with a 1 percent floor on the lending benchmark, the person said. The current term piece pays 4 percentage points more than Libor, with a 1.25 percent minimum, according to data compiled by Bloomberg.

Companies are refinancing debt as demand in the leveraged-loan market outstrips supply and the price of the speculative-grade debt trades around the highest level since July 2007. Leveraged loans, a type of high-yield, high-risk debt ranked below Baa3 by Moody’s Investors Service and less than BBB- by Standard & Poor’s, averaged 98.64 cents on the dollar today, according to the S&P/LSTA U.S. Leveraged Loan 100 index.

$100 Million Add-On

Jazz Pharmaceuticals Plc (JAZZ) is seeking $757.2 million in loans to refinance debt, according to a person with knowledge of the transaction, who asked not to be identified because the deal is private. The transaction includes a $457.2 million term portion due in June 2018 and a $100 million credit line due in June 2017, the person said. The company is seeking to take on an additional $100 million of each portion of the debt, which was obtained last year to support Jazz Pharmaceutical’s acquisition of EUSA Pharma Inc.

Sedgwick Claims Management Services Inc., a provider of claims and productivity management to employees in the U.S. and Canada, is seeking $1.195 billion in loans to refinance debt and pay a dividend, according to a person with knowledge of the transaction.

Sedgwick’s deal consists of an $850 million first-lien term loan due in five years, a $285 million, second-lien piece expiring in 5 1/2 years and a $60 million revolving line of credit due in five years, the person said.

Harvey Gulf International Marine Inc., a provider of marine transportation services, is seeking a $750 million term loan to refinance debt and fund the acquisition of nine vessels from Gulf Offshore Logistics, according to a person with knowledge of transaction.

To contact the reporter on this story: Christine Idzelis in New York at cidzelis@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net

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