News and Analysis
Bausch readies debt maneuvers ahead of sizable maturities
- Rachel Butt
- +Max Frumes
•2 min read
Bausch Health is gearing up for a liability management transaction in the coming months in a bid to bring down leverage, according to 9fin sources.
The company has been sounding out interest from its existing creditors on a potential deal ahead of massive debt walls, sources said. It will likely seek a large holder to anchor an exchange offer, a source said.
Investors have been anticipating Bausch to take a multi-pronged approach to create more breathing room. The company has already chipped away its debt stack last year through buybacks, as it tackled legal challenges to the spin-off of its valuable eye-care unit Bausch + Lomb.
As of YE 23, Bausch had roughly $2.6bn of debt coming due in 2025, followed by $737m of unsecured notes due in 2026. The short dated bonds are quoted in the mid-90s, while the notes due 2027 and beyond are in the 50s to 60s, sources said.
The company has been hit by the overhang of patent litigations over Xifaxan, which treats irritable bowel syndrome and contributes a significant portion of the company’s free cash flow. While Bausch won favorable rulings last year, which prevent the FDA from approving Norwich Pharmaceuticals’s generic version until 2029, it’s contending with appeals at the Federal Circuit.
During the Q4 23 earnings call, Bausch management guided $775m to $825m of adjusted operating cash flow, which is typically used by the company to manage its debt.
A representative at Bausch didn’t respond to request for comment.
