Endo International (ENDP) announced early tender results of its cash tender offers and consent solicitations for up to $1.5 billion of its outstanding senior notes. According to the company, the principal amount tendered was as follows:

  • $390 million of 7.25% senior notes due 2020
  • $518 million of 5.75% senior notes due 2022
  • $540 million of 5.375% senior notes due 2023
  • $999 million of 6.00% senior notes due 2023

The caveat is that the 5.375% senior notes due 2023 and the 6.00% senior notes due 2023 are subject to an aggregate purchase price acceptance sub-limit of $650 million. That would imply that up to $1.5 billion of the the senior notes were tendered.

I understand the transactions are expected to extend the maturity of the company’s revolving credit facility from April 2022 to March 2024, and incur an additional $1.0 billion of secured debt. I believe the financing is a win for Endo for the following reasons.

It Extends Endo’s Debt Maturities

At year end 2018 Endo had total contractual obligations of $11.6 billion, of which $8.4 billion was long-term debt. Principal payments on long-term debt were $1.1 billion and $2.4 billion for 2022 and 2023, respectively. The refinancing pushes sizeable principal payments out to 2023. This buys the company time to realize the upside from Xiaflex and other new products. Read more:

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