
10.	LONG-TERM DEBT

A summary of the Company’s consolidated long-term debt as of March 31, 2013 and December 31, 2012, respectively, is outlined in the table below:



	Maturity Date	As of March 31, 2013			As of December 31, 2012
New Revolving Credit Facility⁽¹⁾	April 2016	$	—		$	—
New Term Loan A Facility⁽¹⁾	April 2016	1,926,577			2,083,462
New Term Loan B Facility⁽¹⁾⁽²⁾	February 2019	1,265,726			1,275,167
New Incremental Term Loan B Facility⁽¹⁾⁽²⁾	December 2019	973,765			973,988
Senior Notes:
6.50%	July 2016	915,500			915,500
6.75%	October 2017	498,394			498,305
6.875%	December 2018	939,502			939,277
7.00%	October 2020	686,768			686,660
6.75%	August 2021	650,000			650,000
7.25%	July 2022	541,562			541,335
6.375%⁽³⁾	October 2020	1,725,325			1,724,520
6.375%⁽³⁾	October 2020	492,950			492,720
Convertible Notes:
1.375% Convertible Notes⁽⁴⁾	June 2017	209			228,576
2.50% Convertible Notes⁽⁴⁾	June 2032	—			5,133
1.50% Convertible Notes⁽⁴⁾	June 2033	—			84
Other		842			898
		10,617,120			11,015,625
Less current portion		(289,676		)	(480,182		)
Total long-term debt		$	10,327,444		$	10,535,443

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(1)	Together, the “Senior Secured Credit Facilities” under the Company’s Third Amended and Restated Credit and Guaranty Agreement (the “Credit Agreement”).

(2)

On February 21, 2013, the Company and certain of its subsidiaries, as guarantors, entered into an amendment to the Credit Agreement to effectuate a repricing of its existing senior secured term loan B facility (the “Term Loan B Facility”) and its existing incremental term B loans (the “Incremental Term Loan B Facility”) by the issuance of $1.3 billion and $1.0 billion in new incremental term loans (the “New Term Loan B Facility” and the “New Incremental Term Loan B Facility”, respectively, and together, the “Repriced Term Loan B Facilities”).

(3)

On March 29, 2013, the Company announced that its wholly owned subsidiary Valeant commenced an offer to exchange (the “Exchange Offer”) any and all of its outstanding $500.0 million aggregate principal amount of 6.375% senior notes due 2020 (the “Existing Notes”) into the current outstanding $1.75 billion 6.375% senior notes due 2020. Valeant conducted the Exchange Offer in order to satisfy its obligations under the indenture governing the Existing Notes with the anticipated result being that some or all of such notes will be part of a single series of 6.375% senior notes under one indenture. The Exchange Offer, which did not result in any changes to existing terms or to the total amount of the Company’s debt outstanding, expired on April 26, 2013. $497.7 million of aggregate principal amount of the Existing Notes was exchanged as of such date.


(4)	Represents obligations assumed from Medicis.

The total fair value of the Company’s long-term debt, including current portion, with carrying values of $10.6 billion and $11.0 billion at March 31, 2013 and December 31, 2012, was $11.2 billion and $11.7 billion, respectively. The fair value of the Company’s long-term debt is estimated using the quoted market prices for the Company’s debt issuances.

Senior Secured Credit Facilities

On January 24, 2013, the Company and certain of its subsidiaries as guarantors entered into Amendment No. 3 to the Credit Agreement to reprice its senior secured term loan A facility (the “Term Loan A Facility”, as so amended, the “New Term Loan A Facility”) and its revolving credit facility (the “Revolving Credit Facility”, as so amended, the “New Revolving Credit Facility”). As amended, the applicable margins for the New Term Loan A Facility and the New Revolving Credit Facility each were reduced by 0.75%. Interest rates for the New Revolving Credit Facility and the New Term Loan A Facility are subject to increase or decrease quarterly based on leverage ratios. As of March 31, 2013, the effective rate of interest on the Company’s borrowings under the New Term Loan A Facility was 2.41% per annum. During the three-month period ended March 31, 2013, the Company did not draw down on its New Revolving Credit Facility.

On February 21, 2013, the Company and certain of its subsidiaries as guarantors entered into Amendment No. 4 to the Credit Agreement to effectuate a repricing of the Term Loan B Facility and the Incremental Term Loan B Facility (the “Term Loan B Repricing Transaction”) by the issuance of the Repriced Term Loan B Facilities. Term loans under the Term Loan B Facility and the Incremental Term Loan B Facility were either exchanged for, or repaid with the proceeds of the Repriced Term Loan B Facilities. The applicable margins for borrowings under the Repriced Term Loan B Facilities are 1.75% with respect to base rate borrowings and 2.75% with respect to LIBO rate borrowings, subject to a 0.75% LIBO rate floor. The incremental term loans under the New Term Loan B Facility and the New Incremental Term Loan B Facility mature on February 13, 2019 and December 11, 2019, respectively, begin amortizing quarterly on March 31, 2013 at an annual rate of 1.0% and have terms consistent with the previous Term Loan B Facility and the Incremental Term Loan B Facility, respectively. In connection with the refinancing of the Term Loan B Facility and the Incremental Term Loan B Facility pursuant to the Term Loan B Repricing Transaction, the Company paid a prepayment premium of approximately $23.0 million, equal to 1.0% of the refinanced term loans under the Term Loan B Facility and Incremental Term Loan B Facility. In addition, repayments of outstanding loans under the Repriced Term Loan B Facilities in connection with certain refinancings on or prior to August 21, 2013 require a prepayment premium of 1.0% of such loans prepaid. In connection with the Term Loan B Repricing Transaction, the Company recognized a loss on extinguishment of debt of $21.4 million in the three-month period ended March 31, 2013. As of March 31, 2013, the effective rate of interest on the Company’s borrowings under both the New Term Loan B Facility and the New Incremental Term Loan B Facility was 4.07% per annum.

1.375% Convertible Notes, 2.50% Convertible Notes and 1.50% Convertible Notes

In connection with the acquisition of Medicis, the Company assumed Medicis’ outstanding long-term debt, including current portion, of approximately $778.0 million at the Medicis acquisition date. As described in note 3, the Medicis long-term debt, including current portion, is comprised of the following: (i) 1.375% convertible senior notes due June 1, 2017 (the “1.375% Convertible Notes”), (ii) 2.50% contingent convertible senior notes due June 4, 2032 (the “2.50% Convertible Notes”) and (iii) 1.50% contingent convertible senior notes due June 4, 2033 (the “1.50% Convertible Notes”).

On February 11, 2013, all of the outstanding 2.50% Convertible Notes and 1.50% Convertible Notes were converted by holders and settled 100% in cash in the aggregate amount of $5.1 million and $0.1 million, respectively. In addition, during the three-month period ended March 31, 2013, $228.4 million principal amount of the 1.375% Convertible Notes were converted into cash.