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Valeant Seeks to Reduce Rate on $3.2 Billion Loan

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Dec. 5 (Bloomberg) -- Valeant Pharmaceuticals International Inc. is seeking to lower the rate and extend maturities on $5.7 billion of loans, including debt raised to back its August purchase of Bausch & Lomb Holdings Inc.

The Canadian drug distributor met with lenders today to lower the interest rate on a $3.2 billion term B portion to 2.75 percentage points to 3 percentage points more than the London interbank offered rate, down from 3.75 percentage points, the company said in a regulatory filing.

“It’s slightly credit positive for the company as a whole and for holders of Valeant’s other debt, but it’s a negative for the holders of this specific term loan,” Mark McCabe, an analyst at debt researcher KDP Investment Advisors Inc., wrote in an e-mailed statement. The transaction will save the company more than $30 million in annual interest expense, he said.

Valeant also seeks to extend maturities on a $1.695 billion A-1 piece and a $765 million A-2 portion to October 2018, from April 2016. Lenders are offered a 15 basis-point extension fee. A basis point is 0.01 percentage point.

The Laval, Quebec-based company bought eye-care company Bausch & Lomb from Warburg Pincus LLC for about $8.7 billion.

The term B loan was quoted at 101.25 cents on the dollar today, up from 100.125 cents on July 3, according to prices compiled by Bloomberg.

Laurie Little in investor relations at Valeant didn’t reply to an e-mail seeking comment about the financing.

A term loan B is sold mainly to non-bank lenders such as collateralized loan obligations, bank loan mutual funds and hedge funds. A term loan A is sold mainly to banks.

To contact the reporter on this story: Krista Giovacco in New York at kgiovacco1@bloomberg.net

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

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