- Extends Maturities of Term Loan Debt to 2022
- Provides Increased Operational Flexibility
- Leverage Neutral Transactions
LAVAL, Quebec, March 21, 2017 /CNW/ -- Valeant Pharmaceuticals
International, Inc. (NYSE: VRX) (TSX: VRX) ("Valeant" or the
"Company") announced today that it has closed its previously
announced refinancing transactions. These transactions include its
offering of $1.25 billion aggregate
principal amount of 6.50% senior secured notes due 2022 and
$2.0 billion aggregate principal
amount of 7.00% senior secured notes due 2024, and its borrowing of
an additional approximately $3
billion of new term loans maturing in 2022. The Company used
the proceeds of the offering and the new term loan together with
cash on hand to repay all term loans under its credit facility
maturing in 2018, 2019 and 2020, $350
million of revolver borrowings and $1.1 billion of its 6.75% Senior Notes due
2018.
In addition, as part of these transactions, the Company amended
its existing credit agreement to remove the financial maintenance
covenants from the term loans and modify the financial maintenance
covenants under the revolving facility and to make certain other
amendments.
"Upon closing these transactions, the issuance of $1.25 billion and $2.0
billion of senior secured notes due 2022 and 2024,
respectively, and the tender for $1.1
billion of our Senior Notes due 2018, the amount of
our debt maturing prior to 2020 will be substantially
reduced," said Joseph C. Papa,
Chairman and CEO of Valeant. "In addition, the amended terms of the
credit agreement will provide us with improved operating
flexibility and a greater margin of safety with respect to
financial covenants. Together, these transactions, coupled with our
ongoing asset sale process, will enable Valeant to focus on driving
the fundamental operating performance of its various businesses. We
want to thank the lenders, investors and other financial
institutions that supported us in the completion of this important
initiative."
See the Annex to this press release for further details about
the refinancing and its impact on our capital structure.
About Valeant
Valeant Pharmaceuticals International, Inc. (NYSE/TSX: VRX) is a
multinational specialty pharmaceutical company that develops,
manufactures and markets a broad range of pharmaceutical products
primarily in the areas of dermatology, gastrointestinal disorders,
eye health, neurology and branded generics.
Forward-Looking Statements
This press release may contain forward-looking statements,
including, but not limited to, our financing plans, including the
offering of Notes and the details thereof, the Credit Agreement
Amendment and the details thereof, including the proposed use of
proceeds therefrom, and the Tender Offer and the details thereof,
and other expected effects of the offering of Notes, the Credit
Agreement Amendment and the Tender Offer. Forward-looking
statements may generally be identified by the use of the words
"anticipates," "expects," "intends," "plans," "should," "could,"
"would," "may," "will," "believes," "estimates," "potential,"
"target," or "continue" and variations or similar expressions.
These statements are based upon the current expectations and
beliefs of management and are subject to certain risks and
uncertainties that could cause actual results to differ materially
from those described in the forward-looking statements. These risks
and uncertainties include, but are not limited to, risks and
uncertainties discussed in our most recent annual and quarterly
reports and detailed from time to time in our other filings with
the Securities and Exchange Commission and the Canadian Securities
Administrators, which risks and uncertainties are incorporated
herein by reference. Readers are cautioned not to place undue
reliance on any of these forward-looking statements. These
forward-looking statements speak only as of the date hereof. We
undertake no obligation to update any of these forward-looking
statements to reflect events or circumstances after the date of
this press release or to reflect actual outcomes, except as
required by law.
ANNEX
Changes to Financial Covenants under the Credit
Agreement
The refinancing transactions resulted in:
- with respect to the term loans, the removal of financial
maintenance covenants;
- with respect to the revolving credit facility, a reduction of
the interest coverage ratio maintenance covenant to 1.50:1.00
beginning in the fiscal quarter ending March
31, 2017 through the fiscal quarter ending March 31, 2019 (stepping up to 1.75:1.00 for any
fiscal quarter ending June 30, 2019
and thereafter), as compared to a ratio of 2.00:1.00 prior to these
transactions;
- with respect to the revolving credit facility, an increase of
the secured leverage ratio maintenance covenant to 3.00:1.00
beginning in the fiscal quarter ending March
31, 2017 through the fiscal quarter ending March 31, 2019 (stepping down to 2.75:1.00 for
any fiscal quarter ending June 30,
2019 and thereafter), as compared to a ratio of 2.50:1.00
prior to these transactions; and
- An increased amortization rate for term loans from 0.25% per
quarter (1% per annum) to 1.25% per quarter (5% per annum).
The revised financial maintenance covenants will apply only with
respect to revolving loans and can be waived or amended without the
consent of the term loan lenders under the Credit Agreement.
In addition, the definition of EBITDA used to calculate the
financial maintenance covenants was revised to permit the addback
of payments of certain litigation expenses, actual or prospective
legal settlements, fines, judgments or orders for up to
$500 million in any twelve-month
period, subject to certain limitations.
Capitalization Table
The following table sets forth the Company's cash and cash
equivalents and capitalization as of December 31, 2016,
- on an actual basis; and
- on an as adjusted basis to give effect to the refinancing
transactions.
This table should be read in conjunction with the press release
to which this Annex is attached and our audited consolidated
financial statements appearing in our Annual Report on Form 10-K
for the year ended December 31,
2016.
|
As of December 31,
2016
|
(in
millions)
|
Actual
|
|
As
adjusted
|
Cash and cash
equivalents
|
$
542
|
|
$
319
|
Credit
Facilities(1)
|
|
|
|
Revolving Credit
Facility(2)
|
$
875
|
|
$
525
|
Term Loan
Facilities(3)
|
9,939
|
|
6,917
|
Senior Secured
Notes:
|
|
|
|
2022
notes(1)
|
—
|
|
1,250
|
2024
notes(1)
|
—
|
|
2,000
|
Senior Unsecured
Notes:(1)
|
|
|
|
6.75% Senior Notes
due 2018(4)
|
1,600
|
|
500
|
5.375% Senior Notes
due 2020
|
2,000
|
|
2,000
|
6.375% Senior Notes
due 2020
|
2,250
|
|
2,250
|
7.00% Senior Notes
due 2020
|
690
|
|
690
|
5.625% Senior Notes
due 2021
|
900
|
|
900
|
6.75% Senior Notes
due 2021
|
650
|
|
650
|
7.50% Senior Notes
due 2021
|
1,625
|
|
1,625
|
7.25% Senior Notes
due 2022
|
550
|
|
550
|
4.50% Senior Notes
due 2023(5)
|
1,578
|
|
1,578
|
5.50% Senior Notes
due 2023
|
1,000
|
|
1,000
|
5.875% Senior Notes
due 2023
|
3,250
|
|
3,250
|
6.125% Senior Notes
due 2025
|
3,250
|
|
3,250
|
Other
|
12
|
|
12
|
Total Debt
|
30,169
|
|
28,947
|
Total
Equity(6)
|
3,258
|
|
3,258
|
Total
Capitalization(6)
|
$
33,427
|
|
$
32,205
|
|
|
|
|
(1)
|
Balances of our
Credit Facilities, the 2022 and 2024 notes and the Senior Unsecured
Notes reflect the full outstanding principal amount of those
obligations without reduction for unamortized debt discounts and
debt issuance costs.
|
|
|
(2)
|
As of December 31,
2016, we had drawn $875 million under the Revolving Credit Facility
and $582 million was available for borrowing under the Revolving
Credit Facility, after adjusting for outstanding standby letters of
credit of $43 million. As adjusted, $932 million was available for
borrowing under the Revolving Credit Facility, after adjusting for
outstanding standby letters of credit of $43 million.
|
|
|
(3)
|
As of December 31,
2016, consisted of $1,032 million of Series A-3 Tranche A Term Loan
Facilities due 2018, $668 million of Series A-4 Tranche A Term Loan
Facilities due 2020, $1,068 million of Series D-2 Tranche B Term
Loan Facilities due 2019, $823 million of Series C-2 Tranche B Term
Loan Facilities due 2019, $2,456 million of Series E-1 Tranche B
Term Loan Facilities due 2020 and $3,892 million of Series F
Tranche B Term Loan Facilities due 2022. On March 3, 2017, we
completed sale of our CeraVe®, AcneFree™ and AMBI® skincare brands
(the "Skincare Sale"), the net proceeds of which were used to pay
down an aggregate principal amount of $1.1 billion of the term
loans outstanding under the Credit Agreement across certain series
of term loans. In addition, earlier during 2017 we paid down
approximately $35 million of term loans outstanding under the
Credit Agreement. As adjusted consists of an incremental amount of
$3,060 million under the Series F-3 Tranche B Term Loan Facility
due 2022 resulting from the refinancing of our Credit
Agreement.
|
|
|
(4)
|
Adjusted to reflect
the purchase of $1,100 million aggregate principal amount of the
6.75% Senior Notes due 2018 (including under the previously
announced tender offer.)
|
|
|
(5)
|
Euro Notes are shown
in U.S. dollars at an exchange rate of $1.05 per €1.00.
|
|
|
(6)
|
Total Capitalization
has not been adjusted for unamortized debt discounts and debt
issuance costs included in the balances of our Credit Facilities,
the 2022 and 2024 notes and the Senior Unsecured Notes and Total
Equity does not give effect to (i) the gain, if any, associated
with asset sales, including the Skincare Sale, (ii) interest
expense associated with unamortized debt discounts and debt
issuance costs paid from the application of proceeds as
contemplated by the refinancing transactions and the Skincare Sale
and (iii) any gain or loss associated with the offering of the 2022
notes and the 2024 notes or the use of proceeds related to the
refinancing transactions and the Skincare Sale.
|
Contact Information:
Elif McDonald
elif.mcdonald@valeant.com
514-856-3855
877-281-6642 (toll free)
Media:
Renée Soto
or
Chris Kittredge/Jared Levy
Sard Verbinnen & Co.
212-687-8080
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/valeant-completes-refinancing-transactions-300427193.html
SOURCE Valeant Pharmaceuticals International, Inc.