Valeant Returns to Bond Market to Refinance Debt Due in 2020
(Bloomberg) -- Valeant Pharmaceuticals International Inc. returned to the bond market to start refinancing the more than $4 billion of junk debt that the drugmaker has coming due starting in just over two years.
The Laval, Quebec-based company priced $1.5 billion of senior unsecured notes due 2025, and plans to use the proceeds to buy three different bonds maturing in 2020.
Valeant is weighed down by a $27 billion debt load that it accumulated to fund acquisitions. Long-time Chief Executive Officer Mike Pearson stepped down last year after the company restated several quarters of results and faced questions about its sales and pricing practices.
His replacement, Joe Papa, has been cutting debt, refinancing obligations and selling assets to revive the business. Valeant has cut its debt burden from around $30 billion at the start of the year through these measures.
The company is taking advantage of a junk bond market that is still hot. U.S. speculative grade debt has gained 7.2 percent this year including interest payments, according to Bloomberg Barclays indexes, after rising 17.1 percent last year. Companies have sold more than $315 billion of U.S. junk bonds this year, putting 2017 on track to be the busiest year since 2014, according to data compiled by Bloomberg.
Valeant has done its part: it had sold $6.75 billion of bonds this year and borrowed $4.245 billion of loans as it refinances debt, Bloomberg data show.
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