Valeant Pharmaceuticals Intl Inc (NYSE:VRX) announced that following the successful closure of the skincare products asset sale on March 3, 2017, Valeant has used the net proceeds of the sale to pay down approximately $1.1 billion of its senior secured term loans. This debt repayment further enhances the company’s confidence in meeting its goals, and it is taking this opportunity to refinance and amend additional portions of its outstanding debt to further create operating flexibility.
Valeant is seeking to refinance and amend the Company’s existing credit agreement (the “Credit Agreement”), borrow new Term B loans under the Credit Agreement and issue new secured debt securities (together, the “Refinancing”). The Refinancing is expected to have the effect of extending the maturity date of the revolving facility and the Term B loans that mature prior to 2022, repaying all of the outstanding Term A loans, removing the maintenance covenants from the Term B loans, modifying the maintenance covenants under the revolving facility, modifying certain other provisions of the Credit Agreement and repaying a portion of the Company’s outstanding 6.75% Senior Notes due 2018.
The Refinancing is subject to market and other conditions and is anticipated to close in the first quarter of 2017. However, there can be no assurance that the Company will be able to successfully complete the Refinancing, on the terms described above, or at all.
Shares of Valeant are up one percent to $13.19 in pre-market trading Monday. VRX has a 1-year high of $70.43 and a 1-year low of $12.90. The stock’s 50-day moving average is $14.80 and its 200-day moving average is $19.58.
On the ratings front, Valeant has been the subject of a number of recent research reports. In a report issued on March 1, Jefferies analyst David Steinberg reiterated a Buy rating on VRX, with a price target of $18, which implies an upside of 38% from current levels. Separately, on the same day, J.P. Morgan’s Chris Schott maintained a Hold rating on the stock and has a price target of $15.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, David Steinberg and Chris Schott have a yearly average return of 2.8% and 4.3% respectively. Steinberg has a success rate of 47% and is ranked #1534 out of 4513 analysts, while Schott has a success rate of 58% and is ranked #1353.
Overall, 3 research analysts have rated the stock with a Sell rating, 8 research analysts have assigned a Hold rating and 2 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $15.20 which is 16% above where the stock closed last Friday.
Valeant Pharmaceuticals International, Inc. is a pharmaceutical company which engages in developing, manufacturing, and marketing pharmaceutical products in the areas of dermatology, eye health, neurology, and generics. It operates through the Developed Markets and Emerging Markets. The Developed Markets segment offers over-the-counter and medical products as well as alliance and contract service revenues, in the areas of dermatology and podiatry, neurology, gastrointestinal disorders, eye health, oncology and urology, dentistry, aesthetics, and women’s health. The Emerging Markets consists of branded generic pharmaceutical and branded pharmaceuticals; over-the-counter and medical device products.