Some Valeant Creditors Reportedly 'Balking' At Revised Lending Agreement; Investors Concerned
Valeant Pharmaceuticals Intl Inc (NYSE: VRX) shares finished a down Monday with a sharp move to the $26 mark after a Bloomberg report said the company's creditors were resistant to relaxed lending standards.
According to a source with knowledge of the matter, Bloomberg said Valeant was "facing push back from some of its lenders as it seeks to waive a default and loosen restrictions on its debt."
Valeant has until Wednesday to get lenders to approve revised loan agreements, the report added. The company needs more than half of its secured loan-backers -- holding a value of about $11 billion in debt -- to agree to a new pact, ideally one that's more affordable for Valeant. "Those that are balking are demanding a higher interest rate and a better fee," the report added.
Barclays is reportedly mediating Valeant's loan amendment process, according to Bloomberg.
Bloomberg Intelligence's Elizabeth Krutoholow told the outlet that these latest developments mean Valeant "may not be able to repay debt as quickly or generate projected earnings."
Valeant traded down 7.4 percent since the start of Monday's trading.
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