S&P affirms Bausch Health

S&P said it affirmed its BB- issue-level rating and 1 recovery rating on Bausch Health Cos. Inc.'s (formerly Valeant Pharmaceuticals International Inc.) senior secured term loan B due in 2025, issued by wholly owned subsidiary Valeant Pharmaceuticals International, with a proposed $750 million add-on.

The debt is rated the same as the company's existing senior secured debt.

The add-on is part of an announced plan by Bausch Health to refinance $1.5 billion outstanding in unsecured debt maturing in 2021 with a combination of $1.5 billion in senior secured term loan and senior secured notes (unrated).

The issuer credit rating remains B with a stable outlook. S&P also affirmed all other ratings on Bausch Health, including the BB- senior secured rating and B- senior unsecured debt ratings.

“Our BB- rating and 1 recovery rating on Bausch Health's senior secured debt reflects our expectations for very high (90%-100%; rounded estimate: 95%) recovery in event of default. The B- rating and 5 recovery rating on Bausch Health's unsecured debt indicates our expectations for modest (10%-30%; rounded estimate: 20%) recovery in the event of payment default,” S&P said in a news release.

“The proposed transaction is leverage-neutral, with proceeds earmarked to repay $1.5 billion of the company's unsecured debt due in 2021.”

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