Valeant Completes Refinancing Transactions

Valeant Pharmaceuticals International, Inc. (NYSE: VRX) (TSX: VRX) (“Valeant” or the “Company”) announced today 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.”

Capitalization Table

The following table sets forth the Company’s cash and cash equivalents and capitalization as of December 31, 2016,

  • on an actual basis; and
  • on an as adjusted basis to give effect to the refinancing transactions.

This table should be read in conjunction with the press release to which this Annex is attached and our audited consolidated financial statements appearing in our Annual Report on Form 10-K for the year ended December 31, 2016.

As of December 31, 2016

(in millions)

Actual

As adjusted

Cash and cash equivalents

$ 542

$ 319

Credit Facilities(1)

Revolving Credit Facility(2)

$ 875

$ 525

Term Loan Facilities(3)

9,939

6,917

Senior Secured Notes:

2022 notes(1)

1,250

2024 notes(1)

2,000

Senior Unsecured Notes:(1)

6.75% Senior Notes due 2018(4)

1,600

500

5.375% Senior Notes due 2020

2,000

2,000

6.375% Senior Notes due 2020

2,250

2,250

7.00% Senior Notes due 2020

690

690

5.625% Senior Notes due 2021

900

900

6.75% Senior Notes due 2021

650

650

7.50% Senior Notes due 2021

1,625

1,625

7.25% Senior Notes due 2022

550

550

4.50% Senior Notes due 2023(5)

1,578

1,578

5.50% Senior Notes due 2023

1,000

1,000

5.875% Senior Notes due 2023

3,250

3,250

6.125% Senior Notes due 2025

3,250

3,250

Other

12

12

Total Debt

30,169

28,947

Total Equity(6)

3,258

3,258

Total Capitalization(6)

$ 33,427

$ 32,205

(1)
Balances of our Credit Facilities, the 2022 and 2024 notes and the Senior Unsecured Notes reflect the full outstanding principal amount of those obligations without reduction for unamortized debt discounts and debt issuance costs.

(2)
As of December 31, 2016, we had drawn $875 million under the Revolving Credit Facility and $582 million was available for borrowing under the Revolving Credit Facility, after adjusting for outstanding standby letters of credit of $43 million. As adjusted, $932 million was available for borrowing under the Revolving Credit Facility, after adjusting for outstanding standby letters of credit of $43 million.

(3)
As of December 31, 2016, consisted of $1,032 million of Series A-3 Tranche A Term Loan Facilities due 2018, $668 million of Series A-4 Tranche A Term Loan Facilities due 2020, $1,068 million of Series D-2 Tranche B Term Loan Facilities due 2019, $823 million of Series C-2 Tranche B Term Loan Facilities due 2019, $2,456 million of Series E-1 Tranche B Term Loan Facilities due 2020 and $3,892 million of Series F Tranche B Term Loan Facilities due 2022. On March 3, 2017, we completed sale of our CeraVe®, AcneFree™ and AMBI® skincare brands (the “Skincare Sale”), the net proceeds of which were used to pay down an aggregate principal amount of $1.1 billion of the term loans outstanding under the Credit Agreement across certain series of term loans. In addition, earlier during 2017 we paid down approximately $35 million of term loans outstanding under the Credit Agreement. As adjusted consists of an incremental amount of $3,060 million under the Series F-3 Tranche B Term Loan Facility due 2022 resulting from the refinancing of our Credit Agreement.

(4)
Adjusted to reflect the purchase of $1,100 million aggregate principal amount of the 6.75% Senior Notes due 2018 (including under the previously announced tender offer.)

(5)
Euro Notes are shown in U.S. dollars at an exchange rate of $1.05 per €1.00.

(6)
Total Capitalization has not been adjusted for unamortized debt discounts and debt issuance costs included in the balances of our Credit Facilities, the 2022 and 2024 notes and the Senior Unsecured Notes and Total Equity does not give effect to (i) the gain, if any, associated with asset sales, including the Skincare Sale, (ii) interest expense associated with unamortized debt discounts and debt issuance costs paid from the application of proceeds as contemplated by the refinancing transactions and the Skincare Sale and (iii) any gain or loss associated with the offering of the 2022 notes and the 2024 notes or the use of proceeds related to the refinancing transactions and the Skincare Sale.

SOURCE Valeant Pharmaceuticals International, Inc.