Valeant Pharmaceuticals Intl Inc (NYSE: VRX) is having a great start to the trading session this morning, and for good reason. The company announced the redemption of Senior Notes. Of course, this led to excitement among investors, causing gains in the value of the stock and prompting our friends at Trade Ideas to alert us to the movement. At the moment (9:43), VRX is trading at $17.59 per share after a gain of $0.60 per share (3.53%) thus far today.
VRX Announces Redemption Of Senior Notes
As mentioned above, Valeant Pharmaceuticals is having an incredibly strong start to the trading session this morning after announcing that it will be redeeming Senior Notes. In fact, the company said it would be redeeming the remaining approximately $500 million aggregate principal amount of its outstanding $6.75 Senior Notes that are due in 2018. In order to do so, the company will use cash on hand and will issue an irrevocable notice of redemption today.
Once the notes are redeemed, VRX will have cut a big chunk out of its outstanding debt, reducing it by more than $4.8 billion since the end of the first quarter of 2016. Once the notes are redeemed, the company will have no significant debt maturities as well as no mandatory amortization requirements through the year 2019. In a statement, Joseph C. Papa, Chairman and CEO at VRX, had the following to offer:
“By redeeming these Notes, we will be close to achieving our expectation of paying down $5 billion of debt from divestitures and free cash flow within 18 months of August 2016... We are confident we will not only meet, but also exceed our debt reduction commitment early.”
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What We'll Be Watching For Ahead
Moving forward, the CNA Finance team will be keeping a close eye on VRX. In particular, we'll continue to follow the company's efforts in paying down $5 billion debt on a deadline - something they are doing well with so far. We'll continue to follow the story closely and bring the news to you as it breaks!
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