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S&P cuts Valeant's rating after getting notice from bondholders

Published 2016-04-14, 08:39 a/m
© Reuters. S&P cuts Valeant's rating after getting notice from bondholders
BHC
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April 14 (Reuters) - Standard & Poor's downgraded Valeant
Pharmaceuticals International Inc's VRX.TO VRX.N corporate
credit rating on Thursday after the drugmaker got a notice of
default from bondholders as a result of a delay in filing its
annual report.
The rating agency cut its corporate credit rating on Valeant
to 'B' from 'B+' and its secured debt rating to 'BB-' from 'BB'.
The downgrades reflect increased risk of near-term default
if the company is unable to file its annual report and unable to
negotiate with bondholders over the next two months, S&P said in
a statement.
Valeant said on Tuesday that it had until June 11 to file
the report, under its bond agreements, but reiterated its
intention to file it on or before April 29.
S&P said it was encouraged by Valeant's "unwavering
expectation" to file the annual report by April 29. The ratings
agency also said it continued to believe that the value of
Valeant's assets likely exceeded its outstanding debt.
Valent had long-term debt of about $30 billion as of Sept.
30, according to a regulatory filing.
The company was originally due to file the report by March
15 but said in February that it would not meet that deadline as
a result of a committee reviewing its accounting practices.
"In the event that the company alleviates threats of near
term default ... we are likely to maintain the rating at 'B'
until we have greater confidence that 2016 operating trends will
meet our base case," S&P said.
Valeant's U.S.-listed shares were down 0.3 percent at $33 in
premarket trading.

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