Bausch Health floats price talk for $1B of 5-year secured notes

Bausch Health Cos. Inc.s $1 billion offering of five-year (non-call two) secured bonds is guided to price in the 6.25% area, according to market sources. Books for the Barclays-led deal will close today at 1:30 p.m. ET.

The bonds are accompanied by a $2.5 billion term loan, and together the proceeds will be used to repay the company's existing term loan B in full, repay its 6.125% notes due 2025 and support a partial redemption of its 9% senior notes due 2025.

Goldman Sachs, Morgan Stanley, Citi, Deutsche Bank, DNB, HSBC, J.P. Morgan and Truist Securities make up the full bookrunning group. BofA Securities is a co-manager. The bonds feature a 40% equity claw.

The loan was presented at a lender meeting Jan. 19, guided at 475-500 basis points over the secured overnight financing rate plus a credit spread adjustment, or CSA, with a 0.5% floor and an original issue discount of 99. Price talk was revised wider this morning to Sofr+CSA+525, with a 0.5% floor and 99 OID, alongside the bond announcement. A ticking fee was also added that starts at 50% of the spread from day 46 moving to the full spread from day 91. The loan will also now feature a 50 bps most favored nation for 36 months with no dollar basket carve-out. Previously, the MFN was 50 bps for 12 months and a dollar basket carve-out.

Corporate ratings are B+/B2/B, with negative outlooks, while secured loan and bond ratings are out at BB/Ba3/BB, with a 1 recovery rating at both S&P Global Ratings and Fitch.

The refinancing will be effective only upon the IPO of Bausch & Lomb and its related debt financing. The eye care business last week filed an S-1 in which it disclosed plans to issue a new term loan in connection with its separation from Bausch Health. Bausch & Lomb is expected to list on the New York Stock Exchange and the Toronto Stock Exchange under the symbol BLCO.

Bausch Health develops, manufactures and markets a range of pharmaceutical, medical device and over-the-counter products.