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Bausch Health Seeking to Refinance Existing Credit Agreement

January 19, 2022, 07:00 AM
Filed Under: Pharmaceuticals

Bausch Health Companies announced that it is seeking to refinance its existing credit agreement (the "Credit Agreement" and such refinancing, the "Credit Agreement Refinancing"). The refinanced Credit Agreement is expected to consist of approximately $2.5 billion of term B loans (the "New Term B Loans") and a $975 million revolving credit facility. The Credit Agreement Refinancing is expected to occur only upon completion of the initial public offering (IPO) of Bausch + Lomb Corporation ("Bausch + Lomb" and such offering, the "Bausch + Lomb IPO") and a related debt financing by Bausch + Lomb (the "Bausch + Lomb Debt Financing"). At the time of the Bausch + Lomb IPO, Bausch + Lomb will initially remain a "restricted" subsidiary subject to the terms of the Credit Agreement covenants, but the Credit Agreement Refinancing is expected to permit Bausch Health to designate Bausch + Lomb as an "unrestricted" subsidiary outside the terms of the Credit Agreement covenants upon achievement of a 7.6x pro forma "Total Leverage Ratio." The Credit Agreement Refinancing is designed to facilitate the separation and distribution of Bausch + Lomb.

The Company also intends, subject to market conditions, to issue approximately $1.0 billion of secured debt securities (the "New Debt Securities"). The proceeds of the New Term B Loans and the offering of the New Debt Securities, along with proceeds from the Bausch + Lomb IPO and from the repayment of an intercompany note owed by Bausch + Lomb (which is expected to be funded by the Bausch + Lomb Debt Financing), are expected to be used to fund the redemption in full of our outstanding 6.125% Senior Notes due 2025 (the "6.125% Notes due 2025"), refinance all of the existing Term B Loans, fund a partial redemption of our outstanding 9.000% Senior Notes due 2025 (the "9.000% Notes due 2025" and, collectively with the 9.000% Notes due 2025, the "Existing Notes") and to pay related fees, premiums and expenses.

The Company also announced that it intends to issue today conditional notices of redemption to redeem in full all of its outstanding 6.125% Notes due 2025 and to redeem $370 million aggregate principal amount of its outstanding 9.000% Notes due 2025. The redemption of the 6.125% Notes due 2025 will be conditioned upon the completion of the Credit Agreement Refinancing (the "6.125% Notes Condition"). The Company intends to discharge the indenture governing the 6.125% Notes due 2025 concurrently with satisfying such 6.125% Notes Condition. The redemption of the 9.000% Notes due 2025 will be conditioned upon the receipt of aggregate gross proceeds from the Bausch + Lomb IPO, the Bausch + Lomb Debt Financing, the Credit Agreement Refinancing and the offering of the New Debt Securities of at least $7.0 billion (the "9.000% Notes Condition" and, together with the 6.125% Notes Condition, the "Conditions").

Copies of the conditional notices of redemption with respect to the Existing Notes will be issued today to the record holders of the applicable series of Existing Notes. Payment of the redemption price and surrender of the applicable series of Existing Notes for redemption will be made through the facilities of the Depository Trust Company in accordance with the applicable procedures of the Depository Trust Company on Feb. 17, 2022, unless the applicable Condition is not satisfied, in which case the applicable redemption date will be delayed until the relevant Condition is satisfied. The name and address of the paying agent are as follows: The Bank of New York Mellon Trust Company, N.A., c/o The Bank of New York Mellon; 111 Sanders Creek Parkway, East Syracuse, N.Y. 13057; Attn: Redemption Unit; Tel: (800) 254- 2826.

The foregoing transactions are subject to market and other conditions and are anticipated to close in the first quarter of 2022. However, there can be no assurance that the Company will be able to successfully complete the transactions, on the terms described above, or at all.

The New Debt Securities will not be registered under the Securities Act of 1933, as amended (the "Securities Act"), or any state securities law and may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act and applicable state securities laws. The New Debt Securities have not been and will not be qualified for sale to the public by prospectus under applicable Canadian securities laws and, accordingly, any offer and sale of the securities in Canada will be made on a basis, which is exempt from the prospectus requirements of such securities laws.







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