Bausch + Lomb recoups some losses after last week’s dip on debt financed acquisition news

By Sara Rosenberg

New York, July 3 – Bausch + Lomb Corp.’s term loan regained some ground in the secondary market on Monday following a slide on Friday when the company revealed plans to acquire some assets from Novartis and take on additional debt to fund the upfront cash purchase price.

The term loan rose to 97 bid, 97¾ offered on Monday from 96¼ bid, 97¼ offered on Friday, a market source remarked. Prior to Friday’s acquisition news, the term loan was quoted at 97 5/8 bid, 98 1/8 offered.

Under the agreement, Bausch + Lomb will buy Xiidra, a non-steroid eye drop specifically approved to treat the signs and symptoms of dry eye disease, libvatrep, an investigational compound being studied for the treatment of chronic ocular surface pain, and AcuStream, an investigational device that may have the potential to facilitate precise dosing and accurate delivery of certain topical ophthalmic medications to the eye, from Novartis.

The purchase price is up to $2.5 billion, split between a $1.75 billion upfront cash price and potential milestone obligations up to $750 million based on sales thresholds and pipeline commercialization.

J.P. Morgan provided the financing commitment for the transaction.

Closing is expected by the end of the year, subject to regulatory approval and other customary conditions.

Bausch + Lomb is a Vaughan, Ont.-based eye health company.

Loan indices rise

In other news, IHS Markit’s iBoxx loan indices were stronger on Friday, with the Leveraged Loan indexes (MiLLi) closing out the day up 0.14% and the Liquid Leveraged Loan indices (LLLi) closing out the day up 0.16%.

Month to date, the MiLLi is up 2.24% and year to date it is up 6.23%, and the LLLi is up 2.22% month to date and up 6.15% year to date.

Average secondary market bids in the U.S. on Friday were 91.66, up 0.09% from the previous day and down 0.24% year to date.

According to the IHS Markit data, some of the top advancers on Friday were New Trojan/Careismatic’s January 2021 covenant-lite term loan at 54.88, up from 53.5, Dawn Acquisition’s (AT&T Colocation) December 2018 covenant-lite term loan at 60.38, up from 59.09, and Whole Earth Brands’ February 2021 term loan B at 77.3, up from 76.

Some top decliners on Friday were Petmate/Doskocil’s October 2021 incremental covenant-lite term loan B at 63.01, down from 63.8, Euro Garages/EG Group’s March 2018 U.S. incremental facility A covenant-lite term loan B at 98.17, down from 99.31, and Driven Performance/Holley Performance’s November 2021 term loan at 85.21, down from 86.13.

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