S&P rates Valeant notes B

Standard & Poor’s said it assigned B ratings to Valeant Pharmaceuticals International Inc.’s proposed issuance of $1 billion of senior unsecured notes maturing 2023.

The agency also said it assigned a recovery rating of 6 to these notes, reflecting 0 to 10% expected default recovery.

The company also is upsizing its $1 billion revolver by $500 million and its term loan A-3 by $250 million. The ratings on the secured debt remain at BB with the recovery rating at 2, indicating 70% to 90% expected default recovery.

The proceeds will be used to redeem the outstanding 6 7/8 senior notes due 2018, reduce amounts outstanding under the revolver and for general corporate purposes.

The BB- corporate credit rating on Valeant reflects the company’s satisfactory business risk and aggressive financial risk profile, S&P said.

The outlook is stable.

The ratings reflect the company’s broad diversification of geography, therapy, products and payers, S&P said.

The ratings also consider the company’s strong profitability as characterized by margins of more than 40%, the agency said.

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