Fitch rates Valeant loan BB-

Fitch Ratings said it assigned a BB- with recovery rating of RR1 rating to Valeant Pharmaceuticals International's add-on senior secured term loan.

The proceeds of this offering, along with other secured debt and cash on hand, are expected to be used to fund a tender offer to repurchase $1.5 billion of its 7½% senior unsecured notes due 2021.

Fitch said it expects the transaction to be leverage neutral.

The outlook is stable.

Parent company, Bausch Health Cos. Inc.'s balance sheet is highly leveraged due to past acquisitions funded in part with significant debt and suboptimal operations management under the leadership of prior management, Fitch said.

The company has made decent progress in reducing the absolute level of debt outstanding, having reduced debt by about $7.4 billion since March 31 with a combination of internally generated cash flow and proceeds from asset divestitures, the agency said.

But, the company's leverage remains high with a gross debt-to-EBITDA ratio of about 7.4x, Moody's noted.

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