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LAVAL, QC - Bausch Health Companies Inc. (NYSE:BHC)(TSX:BHC), a global pharmaceutical company with annual revenue of $9.6 billion and a robust gross profit margin of 71.1%, announced it is initiating a $4 billion offering of senior secured notes due 2032, through its subsidiary, 1261229 B.C. Ltd. According to InvestingPro data, the company’s current market capitalization stands at $2.58 billion. The company also plans to establish new senior secured credit facilities totaling at least $3.8 billion.
The offering of the new senior secured notes and the establishment of the credit facilities are contingent on market conditions and other factors. The notes will be secured by a first priority lien on nearly all assets of the issuer, including equity interest in Bausch + Lomb, and will be guaranteed by Bausch Health and certain subsidiaries. InvestingPro analysis reveals that the company’s total debt stands at $21.8 billion, with a concerning current ratio of 0.86, indicating that short-term obligations exceed liquid assets.
Proceeds from the notes, alongside borrowings under a new term loan facility, are intended to retire the company’s existing credit agreement, redeem existing senior secured notes due between 2025 and 2028, cover related fees and expenses, and support general corporate purposes.
Bausch Health also plans to issue a conditional notice of redemption for all existing notes, with the redemption obligation hinging on the successful completion of the offering and term loan funding. The company aims to discharge indentures governing the existing notes if they are not redeemed before the closing date.
The notes will be offered to qualified institutional buyers in the U.S. and to non-U.S. persons outside the country, in accordance with the Securities Act of 1933 and other regulations. They will not be registered under the Securities Act or state securities laws and will not be publicly offered in Canada.
This announcement is made in line with Rule 135c under the Securities Act and does not constitute an offer to sell or a solicitation to buy securities.
Bausch Health, with a portfolio that includes gastroenterology, neurology, dermatology, and eye health products, aims to be a trusted healthcare company worldwide. While currently unprofitable, InvestingPro analysts expect the company to return to profitability this year, with three analysts recently revising their earnings estimates upward. The information for this article is based on a press release statement and InvestingPro data, where investors can access a comprehensive Pro Research Report offering deep-dive analysis of BHC and 1,400+ other top stocks.
In other recent news, Bausch Health Companies Inc. has initiated the syndication of new senior secured credit facilities to raise at least $3.8 billion. This effort, led by JPMorgan Chase Bank, N.A., includes a 5-year revolving credit facility of at least $400 million and a 5.5-year term loan B facility of $3.4 billion. The company intends to use these funds to refinance its existing debt and improve its debt maturity profile. In another development, Bausch Health’s medication XIFAXAN® has been selected for drug price negotiations with the Centers for Medicare and Medicaid Services, set for 2027. This inclusion is part of the Inflation Reduction Act’s Drug Price Negotiation program. Meanwhile, Jefferies has downgraded Bausch Health’s stock rating from Buy to Hold, reducing the price target to $8.00 from $12.00, following the stalled spin-off process of Bausch + Lomb Corporation. The company has also engaged J.P. Morgan to assist in achieving its financing goals, although successful completion depends on market conditions. These developments reflect Bausch Health’s ongoing strategic efforts in managing its financial and operational objectives.
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