Endo 2019 debt refi transactions garner lower debt, revised revolver

By Devika Patel

Knoxville, Tenn., Feb. 26 – Endo International plc refinanced some debt last March, then paid down some near-term debt maturities and revised the terms of its revolving credit facility.

“As a result of the debt refinancing completed in March, we successfully improved our financial flexibility by meaningfully reducing our nearest debt maturities and by amending and extending our revolving credit facility,” chairman, president and chief executive officer Paul V. Campanelli said on the company’s fourth quarter and year ended Dec. 31, 2019 earnings conference call on Tuesday.

As of Dec. 31, 2019, the company had about $1.5 billion in unrestricted cash, debt of $8.4 billion, net debt of about $6.9 billion and a net debt to adjusted EBITDA ratio of 5.3x.

On March 14, 2019, Endo subsidiary Endo Finance LLC launched cash tender offers to purchase notes from four series for up to $1.5 billion.

The tender offer was upsized from $1 billion.

Endo offered a maximum aggregate consideration (excluding accrued interest) of up to $1.5 billion for the following outstanding notes, listed in order of acceptance priority level and with the tender offer consideration per $1,000 principal amount:

• 7¼% senior notes due 2022 issued by Endo Finance and Endo Finco Inc. at $970;

• 5¾% senior notes due 2022 issued by Endo Finance at $930;

• 5 3/8% senior notes due 2023 issued by Endo Finance and Endo Finco at $810; and

• 6% senior notes due 2023 issued by Endo Finance, Endo Finco and Endo DAC at $790.

The offers for the 5 3/8% notes due 2023 and 6% senior notes due 2023 were subject to an aggregate purchase price subcap of $650 million, increased from $500 million.

Holders who tendered their notes by 5 p.m. ET on March 27, 2019, the early tender date, were eligible to receive in addition to the tender offer consideration an early tender premium of $30 per $1,000 principal amount.

Holders also received accrued interest up to but excluding the applicable settlement date.

The tender offers expired on April 10.

Also on March 14, 2019, Endo said it planned to extend the maturity of its revolver to March 2024 from April 2022.

The company also said it would modify some covenants, such as the secured net leverage ratio springing maintenance covenant, for increased flexibility.

The company amended its credit facility as part of some refinancing transactions that include an issuance of additional secured debt totaling at least $1 billion and cash tender offers for four series of existing senior notes.

Endo is a generics and specialty branded pharmaceutical company based in Malvern, Pa.

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