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Valeant debt buy repeated by Goldman

June 2, 2017

Goldman Sachs Credit Research analyst Shubhomoy Mukherjee says Valeant Pharmaceuticals’ (VRX +4.3%) credit story remains optimistic because it should be able to progressively pay down debt via cash on hand, free cash flow, asset sales and available (but limited) secured debt capacity while likely to refinance maturities until fiscal 2020.

Debt payments through 2020 total a bit over $7B while cash from operations, cash on hand and asset sales should tally about the same amount or slightly more.

He adds that he is “cautious” about the company’s 2017 guidance citing soft Xifaxan prescription trends (down 2% yoy) but the dermatology franchise remains stable.

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