Valeant Pharmaceuticals just received horrible news from Centerbridge

Valeant Pharmaceuticals Default

Valeant Pharmaceuticals bond investor, Centerbridge, has told the company that they will call a default on the firm, Dow Jones reports.

News of the default arrives less than a month after Valeant announced that it had secured an agreement to avoid default and refinance $11 billion in secured loans from 50% of its creditors.

The company was risking a default after it failed to file its annual report by March 15. Failure to file by April 29 would have triggered a technical default on those loans.

With a default now called, Valeant has a 60-day window where it must file its annual report or pay its bonds back early.

Here’s the company’s full statement on the default notice:

Valeant Pharmaceuticals… today announced that it has received a notice of default from holders of its 5.5% Notes due 2023 as a result of the delay in the Company filing its Form 10-K for the fiscal year ended December 31, 2015.

The Company discussed on its March 15, 2016 preliminary earnings call the possibility of receipt of such notice. Under its bond indentures, the Company has until June 11, 2016, 60 days from the receipt of the notice, to file its 10-K, which will cure the default in all respects.

The Company is working diligently and is on schedule to file its 10-K on or before April 29, 2016. The notice of default does not result in the acceleration of any of the Company’s indebtedness.

The company says it will meet its April 29th obligation to file its annual report.

Accoring the WSJ, Centerbridge controls about $250 million face value of the $1 billion 2023 note issue, and holders with 25% of any single Valeant issue can call a default under certain circumstances, including its failure to file.

Shares at the company are down just over 3% in after hours trading.

Valeant Pharmaceuticals