Fitch rates Valeant, facility, notes

Fitch Ratings said it assigned a B- issuer default rating to Valeant Pharmaceuticals International, Inc.

The agency also assigned a BB-/RR1 rating to the company’s senior secured bank facility, a BB-/RR1 rating to its senior secured notes and a B-/RR4 rating to its senior unsecured notes.

The ratings apply to $25.75 billion of debt outstanding as of Dec. 31.

The outlook is stable.

“Valeant'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. The company has made decent progress in reducing the absolute level of debt outstanding, having paid down more than $6.5 billion in debt since March 31, 2016 with a combination of internally generated cash flow and proceeds from asset divestitures,” Fitch said in a news release.

“However, leverage remains high, with gross debt to EBITDA of 7.4x as of Dec. 31, 2017.

“To date, deleveraging has depended upon debt paydown as EBITDA has contracted by $1.69 billion since 2015, due to a combination of divestitures executed at relatively favorable multiples, loss of exclusivity on certain products and price and volume headwinds in certain businesses.”

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