Bausch Health plans $2.5B term loan to back refinancing; lender call Jan. 19

Bausch Health Cos. Inc. is approaching the market with a proposed $2.5 billion term loan B as part of a refinancing effort in connection with the company's spinoff of Bausch & Lomb, according to sources. The Barclays-led deal will launch with a lender call at 11 a.m. ET on Jan. 19.

Price talk is not yet announced, but note that the new TLB will have a seven-year maturity and come with six months of 101 soft call protection.

Proceeds from the term loan, along with $1 billion of secured debt securities and proceeds from the IPO of Bausch & Lomb and a related debt financing, will be used to refinance in full the company's existing TLB, to redeem all of its $2.65 billion issue of 6.125% senior unsecured notes due April 2025, and to redeem $370 million of the $1.5 billion outstanding of 9% senior unsecured notes due December 2025. As of Sept. 30, 2021, there was $2.83 billion outstanding of the company's TLB due June 2025 (L+300, 0% Libor floor) and $994 million of its TLB due November 2025 (L+275, 0% floor). Barclays is the administrative agent on the existing loans.

Additional financing for Bausch Health includes a new $975 million revolving credit facility.

The refinancing will be effective only upon the IPO of Bausch & Lomb and a related debt financing. The eyecare 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. Current corporate ratings are B+/B2/B, with negative outlooks on all sides.