Valeant Pharmaceuticals launches $3.06 billion series F-3 term loan B

By Sara Rosenberg

New York, March 6 – Valeant Pharmaceuticals International Inc. was scheduled to hold a lender call at 11 a.m. ET on Monday to launch a fungible $3.06 billion incremental series F-3 term loan B due April 1, 2022 talked at Libor plus 475 basis points with a 0.75% Libor floor and an original issue discount of 99.75 on new money, according to a market source.

The spread and the floor on the incremental loan matches pricing on the existing series F term loan B.

Barclays and Goldman Sachs Bank USA are the bookrunners on the deal.

Proceeds will be used to extend a portion of the series D-2 term loan B, series C-2 term loan B and series E-1 term loan B in order to create one series F tranche.

With the refinancing, the company is looking to amend its credit agreement to provide for additional covenant cushion and improve financial flexibility, the source continued. A news release said that the amendment would remove the maintenance covenants from the term B loan, revise maintenance covenants under the revolving credit facility and modify certain other provisions.

Extending D-2, C-2 and E-1 lenders are being offered a 25 bps consent to be paid as an original issue discount on the incremental F-3 loan, series F term loan B lenders are being offered a 25 bps consent fee and non-extending series D-2, C-2 and E-1 lenders are not being offered any consent fee, the source added.

Commitments and consents are due at 2 p.m. ET on Friday.

Valeant revealed in the news release that it intends to issue new secured debt securities, in addition to the incremental term loan, as part of its refinancing plans.

Along with the term debt extension, the refinancing is expected to have the effect of extending the maturity date of the existing revolver, repaying all of the outstanding term loan A borrowings and repaying a portion of the outstanding 6¾% senior notes due 2018.

The company also disclosed that it paid down about $1.1 billion of its senior secured term loans using proceeds from the sale of its skincare products asset.

Valeant is a Laval, Quebec-based specialty pharmaceutical company.

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