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LPC: Valeant seeks new debt to support refinancing effort

(Updates with bond details)

By Jonathan Schwarzberg and Kristen Haunss

NEW YORK, March 6 (Reuters) - Valeant Pharmaceuticals International Inc plans to line up a US$3.06bn incremental term loan and junk bond sale as part of a debt restructuring, sources said.

In addition to the new debt offering, the company paid down about US$1.1bn of senior secured term loans with proceeds from the sale of its skincare products assets on March 3, according to a Monday regulatory filing.

Valeant is also repaying a portion of its 6.75% senior notes due in 2018 and extending the maturity date of its revolving credit facility with the proceeds from the new loan and a secured high-yield bond.

"This debt repayment further enhances the company's confidence in meeting its goals, and it is taking this opportunity to refinance and amend additional portions of its outstanding debt to further create operating flexibility," the company said in the filing.

The new loan is scheduled to launch during a lenders call late Monday morning. Commitments are due March 10.

Barclays leads the deal with Goldman Sachs.

As part of the transaction, Valeant is seeking to remove maintenance covenants from its term B loans and modify its revolver maintenance covenants.

The new debt will be fungible with the company's term loan F due in April 2022.

The proceeds will allow Valeant to extend the maturity of three separate term loans by combining them with the term loan F.

Pricing is expected to be 475bp over Libor with a 0.75% floor, which is the same as the existing term loan F.

Valeant is offering lenders an original issue discount of 99.75 cents on the dollar.

The company is proposed to pay its existing term loan F lenders an amendment fee of 25bp.

Barclays declined to comment. A representative from Goldman Sachs was not immediately available for comment.

A spokesperson for Valeant did not immediately return a telephone call seeking comment.

(Additional reporting by Davide Scigliuzzo with IFR.) (Reporting by Jonathan Schwarzberg and Kristen Haunss; Editing By Lynn Adler and Jon Methven)