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Friday, 24 November 2017

Valeant bonds jump on profit, debt reduction

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Bonds of Valeant Pharmaceuticals International jumped on Tuesday after the company reported better-than-expected quarterly profit and showed it is cutting debt faster than anticipated.

Valeant’s 6.125% 2025s and 5.875% 2023s were up 2.6 and 2.9 points respectively and were the most actively traded early in the session, according to data from MarketAxess.

Its stock rallied 13% in pre-market trading.

The company said it shaved US$6bn off its massive debt pile between the end of the first quarter of 2016 and November 7, exceeding its commitment to reduce debt by US$5bn by February 2018. nL3N1ND4FA

Through a series of debt buybacks this year, Valeant said it has now eliminated all long-term maturities until 2020 as well as all mandatory amortization requirements.

Around 80% of its debt is fixed-rate.

Valeant has raised a combined US$4.25bn in the US junk bond market so far this year to refinance debt, according to IFR data. It had total debt of US$27.4bn as of the end of September, according to its quarterly filings.

 

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