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Valeant Pharmaceuticals gets $9.28 billion bridge loan commitment
By Sara Rosenberg
New York, May 31 - Valeant Pharmaceuticals International Inc. revealed in an 8-K filed with the Securities and Exchange Commission on Friday that the financing for its purchase of Bausch + Lomb Holdings Inc. is backed by a commitment for $9,275,000,000 of senior unsecured increasing rate bridge loans.
The bridge debt is split between an up to $7,575,000,000 tranche 1 and an up to $1.7 billion tranche 2, with 50% of each tranche maturing in eight years and 50% of each tranche maturing in 10 years.
The tranche 2 loan will be automatically reduced by any equity issuance.
Initial pricing on the bridge loans is Libor plus 475 basis points with a 1% Libor floor. The spread will increase by 50 bps after three months and every three months thereafter until a specified cap is reached.
As previously reported, the company has said that it expects to get a new $4.3 billion term loan, $3.23 billion of new senior unsecured notes and $1.75 billion of new equity for the acquisition.
Goldman Sachs Bank USA is leading the financing.
Pro forma for the transaction, net senior secured leverage is expected to be 2.1 times and net total leverage is expected to be 4.6 times.
Under the agreement, Bausch + Lomb is being bought for $8.7 billion, of which about $4.5 billion will go to an investor group led by Warburg Pincus and about $4.2 billion will be used to repay Bausch + Lomb's outstanding debt.
Closing is expected in the third quarter, subject to customary conditions and regulatory approvals.
Valeant is a Laval, Quebec-based specialty pharmaceutical company. Bausch + Lomb is a Rochester, N.Y.-based eye health.
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