Bausch Health Cos.' $500 Million Senior Secured Notes Due 2027 Rated 'BB-' (Recovery: '1'), Subsidiary Notes Also Rated

TORONTO (S&P Global Ratings) Feb. 22, 2019--S&P Global Ratings today assigned 
its 'BB-' issue-level rating and '1' recovery rating to Bausch Health Cos. 
Inc.'s $500 million senior secured notes due 2027. The '1' recovery rating 
indicates our expectation for very high (90%-100%; rounded estimate: 95%) 
recovery in the event of a default.

At the same time, we assigned our 'B-' issue-level rating and '5' recovery 
rating to the $750 million senior unsecured notes due 2027 issued by the 
company's wholly owned subsidiary, Bausch Health Americas Inc. Bausch Health 
Cos. Inc. guarantees the notes. The '5' recovery rating indicates our 
expectation for modest (10%-30%; rounded estimate: 15%) recovery in the event 
of a payment default.

We also affirmed all of our existing issue-level ratings on Bausch Health, 
including our 'BB-' rating on its senior secured debt and our 'B-' rating on 
its senior unsecured debt.

Our 'B' issuer credit rating and stable outlook on the company remain 
unchanged. We view the transaction as leverage neutral because the company 
will use the proceeds from the new debt to refinance $1.25 billion of its 
existing 2021 and 2023 notes, which will extend Bausch Health's maturity 
schedule.

Bausch Health has continued to follow its turnaround strategy. We believe 
that, after several years of declining sales due to patent expirations and 
pricing pressures, the company could begin to increase its revenue, EBITDA, 
and cash flows as early as 2019, which would enable it to continue to steadily 
deleverage. The company's sales declined by 4% in 2018, mainly due to the 
affect of generic competition. The company's Bausch + Lomb International and 
Salix (mainly Xifaxan, a treatment for irritable bowel syndrome) franchises 
are key growth drivers and collectively account for roughly 76% of its total 
sales. The two franchises experienced organic growth of 6% in 2018 when the 
company's Xifaxan sales grew by 12%. 

  Bausch Health continues to maintain substantial scale and revenue diversity, 
multiple growth drivers (such as Xifaxan), and an improving product pipeline. 
The company has also been less affected by lost sales due to patent 
expirations. Bausch has limited therapeutic concentrations as only one 
drug--Xifaxan--accounts for more than 10% of its revenue. Bausch Health has 
also continued to deleverage, having repaid over $1 billion of its debt in 
2018, and generate solid free cash flows. The company doesn't face any 
significant debt maturities until 2023.
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