Stock Update (NYSE:VRX): Valeant Pharmaceuticals Intl Inc Completes Refinancing Transactions


Valeant Pharmaceuticals Intl Inc (NYSE:VRX) announced that it has closed its previously announced refinancing transactions. These transactions include its offering of $1.25 billion aggregate principal amount of 6.50% senior secured notes due 2022 and $2.0 billion aggregate principal amount of 7.00% senior secured notes due 2024, and its borrowing of an additional approximately $3 billion of new term loans maturing in 2022. The Company used the proceeds of the offering and the new term loan together with cash on hand to repay all term loans under its credit facility maturing in 2018, 2019 and 2020, $350 million of revolver borrowings and $1.1 billion of its 6.75% Senior Notes due 2018.

In addition, as part of these transactions, the Company amended its existing credit agreement to remove the financial maintenance covenants from the term loans and modify the financial maintenance covenants under the revolving facility and to make certain other amendments.

“Upon closing these transactions, the issuance of $1.25 billion and $2.0 billion of senior secured notes due 2022 and 2024, respectively, and the tender for $1.1 billion of our  Senior Notes due 2018, the amount of our debt maturing prior to 2020 will be substantially reduced,” said Joseph C. Papa, Chairman and CEO of Valeant. “In addition, the amended terms of the credit agreement will provide us with improved operating flexibility and a greater margin of safety with respect to financial covenants. Together, these transactions, coupled with our ongoing asset sale process, will enable Valeant to focus on driving the fundamental operating performance of its various businesses. We want to thank the lenders, investors and other financial institutions that supported us in the completion of this important initiative.”

Shares of Valeant closed today at $10.72, up $0.08 or 0.75%. VRX has a 1-year high of $38.50 and a 1-year low of $10.35. The stock’s 50-day moving average is $13.90 and its 200-day moving average is $18.08.

On the ratings front, Valeant has been the subject of a number of recent research reports. In a report issued on March 14, Canaccord Genuity analyst Neil Maruoka reiterated a Hold rating on VRX, with a price target of $12, which implies an upside of 12% from current levels. Separately, on the same day, Wells Fargo’s David Maris reiterated a Sell rating on the stock and has a price target of $11.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Neil Maruoka and David Maris have a yearly average loss of 3.1% and a return of 8.9% respectively. Maruoka has a success rate of 38% and is ranked #4124 out of 4564 analysts, while Maris has a success rate of 48% and is ranked #956.

Overall, 3 research analysts have rated the stock with a Sell rating, 9 research analysts have assigned a Hold rating and 3 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 $13.75 which is 28.3% above where the stock opened today.

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. 

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