Bausch Health seeks $3.8 billion in new credit facilities

LAVAL, QC - Bausch Health Companies Inc. (NYSE:BHC)(TSX:BHC), a global pharmaceutical company with annual revenue of $9.6 billion and EBITDA of $3.1 billion, has initiated the syndication of new senior secured credit facilities, aiming to raise at least $3.8 billion. The move is part of the company’s strategy to refinance its debt and improve its debt maturity profile, particularly important given its total debt of $21.8 billion. The facilities will be managed by the company’s indirect wholly-owned subsidiary, 1261229 B.C. Ltd., and are not guaranteed by the company’s current notes. According to InvestingPro analysis, the company’s short-term obligations currently exceed its liquid assets, with a current ratio of 0.86.

The new credit includes a 5-year senior secured revolving credit facility of at least $400 million and a 5.5-year secured term loan B facility of $3.4 billion. JPMorgan Chase Bank, N.A. has been appointed as the lead arranger for these facilities. The company plans to use the proceeds to repay and terminate its existing credit agreement and redeem various senior secured notes due between 2025 and 2028, among other corporate purposes.

Bausch Health, which has recorded seven consecutive quarters of growth with a notable 9.91% revenue increase in the last twelve months, has previously reduced its net debt by nearly $1 billion in 2024. The company’s CEO, Thomas J. Appio, stated that the transaction aligns with their goal to access capital markets and address upcoming maturities. InvestingPro data shows that three analysts have recently revised their earnings upward for the upcoming period, suggesting positive momentum. The transaction’s success, however, is contingent on market conditions and other significant factors, and there is no assurance of its completion as anticipated.

The proposed refinancing transactions are subject to market conditions and significant conditions, and the company has received advisory services from Evercore, Proskauer, and Norton Rose Fulbright Canada. U.S. lenders under the new facilities must be qualified purchasers as per the Investment Company Act of 1940.

Bausch Health is a global pharmaceutical company with a diverse portfolio focusing on various therapeutic areas, including eye health through its controlling interest in Bausch + Lomb Corporation. For a deeper understanding of Bausch Health’s financial position and growth prospects, investors can access comprehensive analysis and additional ProTips through InvestingPro, which offers detailed insights into the company’s valuation and future potential.

This news article is based on a press release statement and contains forward-looking statements that involve risks and uncertainties. The company has made no assurances that the anticipated transactions will be completed on the expected terms or at all.

In other recent news, Bausch Health Companies Inc. announced its engagement with J.P. Morgan to assist in achieving its financing goals, though the completion of any financing transactions remains uncertain and contingent on market conditions. The company emphasized that no securities sales would occur in jurisdictions where such actions would contravene local securities laws. Additionally, Jefferies analysts downgraded Bausch Health’s stock from Buy to Hold, reducing the price target from $12.00 to $8.00. This downgrade followed the announcement that the Bausch + Lomb spin-off process did not result in a transaction, attributed to a likely price discrepancy, pausing the anticipated near-term separation of the company.

Meanwhile, Bausch Health’s medication XIFAXAN® has been selected for drug price negotiations by the Centers for Medicare and Medicaid Services (CMS), with discussions set for 2027 under the Inflation Reduction Act’s Drug Price Negotiation program. The medication is approved for the reduction of overt hepatic encephalopathy recurrence and for treating irritable bowel syndrome with diarrhea in adults, although it carries specific contraindications and potential adverse reactions. The company plans to discuss the drug’s value with CMS, highlighting endorsements from medical associations. Bausch Health continues to focus on patient access to medications and innovation in healthcare, though its forward-looking statements are subject to risks and uncertainties.

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