Business Context and Reporting Period
Company: Bausch Health Companies Inc. (Parent of Bausch + Lomb Corporation)
Filing Type: Form 8-K (Current Report)
Date of Report: June 26, 2025
Event: Completion of a senior secured notes offering and a partial refinancing of the credit agreement by Bausch + Lomb Corporation, a subsidiary of the registrant.
Key Financial Metrics and Capital Structure
Debt Issuance and Refinancing
- Senior Secured Notes: Issued €675,000,000 aggregate principal amount of senior secured floating rate notes due 2031.
- Refinancing Term Loans: Established a new $2,325 million tranche of term loans maturing in 2031.
- New Revolving Credit Facility: Created an $800 million facility maturing in 2030, replacing the previous $500 million facility.
Interest Rates and Terms
- Notes Interest: Three-month EURIBOR (0% floor) + 3.875% per annum, reset quarterly.
- Term Loan Interest: 4.25% (term SOFR-based) or 3.25% (U.S. dollar base rate).
- Revolving Loan Interest: 1.75%–2.75% (term SOFR/CORRA/EURIBOR/SONIA) or 0.75%–1.75% (base rate), based on total net leverage ratio.
- Amortization: Refinancing Term Loans amortize at 1.00% per annum, with the first installment due September 30, 2025.
Use of Proceeds
Net proceeds from the Notes and Refinancing Term Loans were used to:
- Repay in full outstanding borrowings under the existing revolving credit facility.
- Refinance in full outstanding Term A loans due 2027.
- Refinance in full outstanding Term B loans due 2027.
- Pay related fees and expenses.
Material Changes Versus Prior Period
- Debt Maturity Extension: Refinanced 2027 term loans and the revolving facility with new maturities extending to 2030 and 2031.
- Increased Leverage Capacity: The financial covenant for the new revolving facility was adjusted to a maximum first lien net leverage ratio of 5.75:1.00 (stepping down to 5.00:1.00 over time), an increase from the previous 4.50:1.00 level.
- Covenant Flexibility: The utilization threshold triggering the Revolving Facility Test Condition was lowered from 40% to 35%.
- Facility Size: The revolving credit facility capacity increased from $500 million to $800 million.
Outlook, Risks, and Covenants
Covenants and Restrictions
The Indenture and amended Credit Agreement limit the ability of Bausch + Lomb and its Restricted Subsidiaries to:
- Incur or guarantee additional indebtedness.
- Make certain investments and restricted payments.
- Create liens.
- Enter into affiliate transactions.
- Engage in mergers, consolidations, or asset sales.
Redemption and Repurchase Provisions
- Optional Redemption: Issuers may redeem Notes on or after June 30, 2026, at 100% of principal plus accrued interest. Prior to this date, redemption is possible with a "make-whole" premium.
- Change of Control: Holders may require repurchase at 101% of principal plus accrued interest upon a change of control.
- Equity Redemption: Up to 40% of Notes may be redeemed prior to June 30, 2026, using proceeds from certain equity offerings.
Risks and Contingencies
The filing notes that the Notes are structurally subordinated to the indebtedness of non-guarantor subsidiaries and effectively subordinated to debt secured by non-collateral assets. The filing does not provide specific revenue, profit, or cash flow figures for the reporting period.
Investor Verification Checklist
- Verify the exact interest rate reset mechanism for the EURIBOR-based Notes and the impact of the 0% floor.
- Confirm the current total net leverage ratio of Bausch + Lomb to assess compliance with the new 5.75:1.00 covenant threshold.
- Review the full text of the Indenture (Exhibit 4.1) and Third Amendment (Exhibit 10.1) for specific definitions of "Restricted Subsidiaries" and "Change of Control."
- Monitor the amortization schedule for the Refinancing Term Loans, noting the first payment date of September 30, 2025.
- Assess the impact of the increased leverage ratio covenant on future borrowing flexibility and refinancing costs.