Bausch Health gives early results of exchange offer, consent bid

By Mary-Katherine Stinson

Lexington, Ky., Sept. 14 – Bausch Health Cos. Inc. reported the early results of its exchange offers for 11 of its senior notes and related consent solicitations that were launched Aug. 31, according to a press release Wednesday.

In total, $5,577,725,000 senior notes have been tendered by the early deadline of 5 p.m. ET on Sept. 13.

For the 11 senior notes that are part of the offer, for which Bausch is offering to trade each $1,000 note in the series, the results listed by acceptance priority level are as follows:

• $534.1 million of the $1.5 billion outstanding 9% senior notes due 2025 (Cusips: 91911KAP7, C94143AM3) were tendered for which the total consideration is $722.50 detailed as $452 of first-lien notes, $89.50 of second-lien notes and $181 of secured notes;

• $751,831,000 of the $1.5 billion outstanding 9¼% senior notes due 2026 issued by Bausch Health Americas, Inc. (Cusips: 91911XAV6, U9098VAN2) were tendered for which the total consideration is $682.50 detailed as $427 of first-lien notes, $84.50 of second-lien notes and $171 of secured notes;

• $500 million of the $1.75 billion outstanding 8½% senior notes due 2027 issued by Bausch Health Americas (Cusips: 91911XAW4, U9098VAP7) were tendered for which the total consideration is $590 detailed as $369 of first-lien notes, $73 of second-lien notes and $148 of secured notes, with a $500 million tender cap for just this series;

• $336,099,000 of the $909,188,000 outstanding 5¼% senior notes due 2031 (Cusips: 071734AL1, C07885AG8) were tendered for which the total consideration is $470 detailed as $294 of first-lien notes, $58 of second-lien notes and $118 of secured notes;

• $330,887,000 of the $1,201,000,000 outstanding 5¼% senior notes due 2030 (Cusips: 071734AJ6, C07885AE3) were tendered for which the total consideration is $440 detailed as $275 of first-lien notes, $55 of second-lien notes and $110 of secured notes;

• $369,352,000 of the $834 million outstanding 5% senior notes due 2029 (Cusips: 071734AM9, C07885AH6) were tendered for which the total consideration is $480 detailed as $300 of first-lien notes, $60 of second-lien notes and $120 of secured notes;

• $708,120,000 of the $1,176,000,000 outstanding 5% senior notes due 2028 (Cusips: 071734AH0, C07885AD5) were tendered for which the total consideration is $495 detailed as $309 of first-lien notes, $62 of second-lien notes and $124 of secured notes;

• $539,909,000 of the $1,406,000,000 outstanding 6¼% senior notes due 2029 (Cusips: 071734AK3, C07885AF0) were tendered for which the total consideration is $480 detailed as $300 of first-lien notes, $60 of second-lien notes and $120 of secured notes;

• $372.37 million of the $745 million outstanding 7¼% senior notes due 2029 (Cusips: 071734AF4, C07885AC7) were tendered for which the total consideration is $510 detailed as $319 of first-lien notes, $63 of second-lien notes and $128 of secured notes;

• $536,618,000 of the $748 million outstanding 7% senior notes due 2028 (Cusips: 071734AD9, C07885AB9) were tendered for which the total consideration is $542.50 detailed as $339 of first-lien notes, $67.50 of second-lien notes and $136 of secured notes; and

• $598,439,000 of the $1.75 billion outstanding 8½% senior notes due 2027 issued by Bausch Health Americas (Cusips: 91911XAW4, U9098VAP7) were tendered for which the total consideration is $590 detailed as $369 of first-lien notes, $73 of second-lien notes and $148 of secured notes.

The total considerations include an early tender premium of $31 of first-lien notes, $6 of second-lien notes and $13 of secured notes that will only be paid to holders who tendered by the early deadline.

Potentially, the exchange considerations could be reallocated, if necessary.

Accrued interest will be paid in cash.

As previously reported, the company is offering to exchange a $1,000-par note in each offer for a combination of three notes where the face value total consideration is less than $1,000.

The $4 billion exchange, in terms of what the notes would be exchanged into, is weighted toward $2.5 billion of new 11% first-lien secured notes due 2028. The smallest new series in the exchange is $500 million of 14% second-lien secured notes due 2030. The third part that notes would be exchanged into is $1 billion of new 9% senior secured notes due 2028 issued by 1375209 B.C. Ltd., an existing wholly owned unrestricted subsidiary that holds 38.6% of the outstanding issued and common shares of Bausch + Lomb.

As the offer is oversubscribed, the company will prorate the tendered notes.

Based on the early results, the company expects approximately $3.119 billion of new secured notes to be issued in the offers, consisting of approximately $1.768 billion in aggregate principal amount of new 11% first lien secured notes due 2028, $351 million in aggregate principal amount of new 14% second lien secured notes due 2030 in each case, to be issued by the company, and $1 billion in aggregate principal amount of new 9% senior secured notes due 2028 to be issued by 1375209 B.C. Ltd.

However, such principal amounts may be adjusted as a result of any additional participation in the offers. Tenders are being prioritized by acceptance priority level. The deadline is irrelevant in this case.

The new notes issued by Bausch Health will be guaranteed by the company’s subsidiaries and secured by either a first priority basis or second priority basis, as applicable. The third series will be secured by the assets of the Holdco issuer but will not have any recourse to the company, Bausch + Lomb or any of their restricted subsidiaries.

Certain holders of the existing notes agreed to participate in the exchange and tender all of their notes at the beginning of the offer. Noteholders representing about 22.8% of the principal amount of existing notes entered into a support agreement. The support agreement provides that supporting holders will have certain consent rights over extensions, amendments or waivers to the exchange offers or consent solicitations by the company.

The offers and solicitations are being made only to holders of existing notes who are either non-U.S. persons under Regulation S who agree to purchase new secured notes outside of the United States or persons who are reasonably believed to be both qualified institutional buyers under Rule 144A under the U.S. Securities Act of 1933 and qualified purchasers under Section 2(a)(51) of the U.S. Investment Company Act of 1940.

Consent Solicitations

Concurrently with the exchange offers, the issuers are soliciting consents to amend certain provisions of the indentures.

In addition, as of the early tender time, the company and BHA have received the requisite number of consents to adopt the proposed amendments with respect to the following series of existing senior notes: 9.25% senior notes due 2026, 8.50% senior notes due 2027, 5% senior notes due 2028 and 7% senior notes due 2028. The proposed amendments will become operative upon the settlement date.

However, if any series of existing senior notes are subject to proration the consent solicitation with respect to that series will be terminated and the supplemental indenture would not become operative for that series.

Details

The exchange offers and consent solicitation end at 11:59 p.m. ET on Sept. 27.

The withdrawal deadline has passed.

D.F. King & Co., Inc. is the information and exchange agent for the offer (877 478-5045, 212 232-3233, bhc@dfking.com).

Bausch is a Laval, Quebec-based health care company.

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