LPC: Valeant loans rise after CEO says company to seek debt amendment

Tue Aug 9, 2016 4:11pm EDT
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By Kristen Haunss

NEW YORK Aug 9 (Reuters) - Valeant Pharmaceuticals International's loans traded up Tuesday after the company's chief executive officer said it would seek to modify covenants on its $31 billion of debt.

The company obtained an amendment earlier this year to help stave off default, allowing it additional time to file its financial statements with securities regulators. Specific details of the proposed amendment request have not been released.

Joe Papa, Valeant's CEO, said on a conference call Tuesday that the company will seek to modify the interest financial maintenance coverage covenant on its bank debt, according to a transcript of the call. Valeant, which is currently in compliance with its covenants, will begin the amendment process "shortly," he said.

Following the news, the company's $3.88 billion F tranche term loan was quoted at 99.75-100.125 Tuesday, an increase from 98.375-98.875 Monday, according to sources.

Valeant's $2.45 billion E tranche term loan was quoted at 99.5-99.875 Tuesday, an increase from 97.75-98.25 Monday, the sources said.

The company announced a net loss of $302 million in the second quarter compared to a net loss of $53 million in the second quarter of 2015, according to an earnings release.

A spokesperson for Valeant did not immediately return a telephone call seeking comment. A spokesperson for Barclays, the bank that arranged the loan amendment earlier this year, declined to comment.

Papa said during the call that the company's bank debt is raised in every meeting he has with shareholders and analysts.   Continued...