LONG-TERM DEBT

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



	Maturity Date	2013			2012
Revolving Credit Facility⁽¹⁾	April 2018	$	—		$	—
Series A-1 Tranche A Term Loan Facility, net of unamortized debt discount (2013 — $3,635; 2012 — $30,288)⁽¹⁾	April 2016	258,985			2,083,462
Series A-2 Tranche A Term Loan Facility, net of unamortized debt discount of $6,205⁽¹⁾	April 2016	228,145			—
Series A-3 Tranche A Term Loan Facility, net of unamortized debt discount of $35,412 ⁽¹⁾	October 2018	1,935,713			—
Series D-2 Tranche B Term Loan Facility, net of unamortized debt discount of (2013 — $27,046; 2012 — $24,833)⁽¹⁾	February 2019	1,256,704			1,275,167
Series C-2 Tranche B Term Loan Facility, net of unamortized debt discount of (2013 — $20,692; 2012 — $26,012)⁽¹⁾	December 2019	966,808			973,988
Series E Tranche B Term Loan Facility, net of unamortized debt discount of $85,493⁽¹⁾	August 2020	3,090,506			—
Senior Notes:
6.50%	July 2016	—			915,500
6.75%, net of unamortized debt discount (2013 — $1,338; 2012 — $1,695)	October 2017	498,662			498,305
6.875%, net of unamortized debt discount (2013 — $4,402; 2012 — $5,303)	December 2018	940,178			939,277
7.00%, net of unamortized debt discount (2013 — $2,909; 2012 — $3,340)	October 2020	687,091			686,660
6.75%	August 2021	650,000			650,000
7.25%, net of unamortized debt discount (2013 — $7,756; 2012 — $8,665)	July 2022	542,244			541,335
6.375%, net of unamortized discount (2013 — $28,609; 2012 — $25,480)	October 2020	2,221,391			1,724,520
6.375%, net of unamortized discount (2012 — $7,280)	October 2020	—			492,720
6.75%, net of unamortized discount (2013 — $18,153)	August 2018	1,581,847			—
7.50%, net of unamortized discount (2013 — $19,121)	July 2021	1,605,879			—
5.625%, net of unamortized discount (2013 — $8,463)	December 2021	891,537			—
Medicis Convertible Notes⁽²⁾	Various	209			233,793
Other⁽³⁾	Various	11,803			898
		17,367,702			11,015,625
Less current portion		(204,756		)	(480,182		)
Total long-term debt		$	17,162,946		$	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)	Represents obligations assumed from Medicis.


(3)	Relates to the obligations assumed from B&L (discussed below).

The Company’s Senior Secured Credit Facilities and indentures related to its senior notes contain customary covenants, including, among other things, and subject to certain qualifications and exceptions, covenants that restrict the Company’s ability and the ability of its subsidiaries to: incur or guarantee additional indebtedness; create or permit liens on assets; pay dividends on capital stock or redeem, repurchase or retire capital stock or subordinated indebtedness; make certain investments and other restricted payments; engage in mergers, acquisitions, consolidations and amalgamations; transfer and sell certain assets; and engage in transactions with affiliates.

The Company’s Senior Secured Credit Facilities also contain specified financial covenants (consisting of a secured leverage ratio and an interest coverage ratio), various customary affirmative covenants and specified events of default. The Company’s indentures also contain certain customary affirmative covenants and specified events of default.

The total fair value of the Company’s long-term debt, with carrying values of $17.4 billion and $11.0 billion at December 31, 2013 and 2012, was $18.4 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.

Aggregate maturities of our long-term debt for each of the five succeeding years ending December 31 and thereafter are as follows:



2014	$	204,756
2015	372,534
2016	744,814
2017	954,215
2018	3,497,814
Thereafter	11,862,803
Total gross maturities	17,636,936
Unamortized discounts	(269,234		)
Total long-term debt	$	17,367,702

Senior Secured Credit Facilities

On February 13, 2012, the Company and certain of its subsidiaries as guarantors entered into the Credit Agreement with a syndicate of financial institutions and investors. Between February 13, 2012 and December 31, 2012, the Company and certain of its subsidiaries as guarantors entered into a series of joinder agreements to, among other things, (i) increase the existing tranche B term loan facility (the “Tranche B Term Loan Facility”) through new incremental term loans, (ii) reprice and refinance the Tranche B Term Loan Facility (such repriced Tranche B Term Loan Facility, the “Series D Tranche B Term Loan Facility”), and (iii) increase the amount of commitments under the revolving credit facility provided under the Credit Agreement (the “Revolving Credit Facility”). In connection with the repricing and refinancing of the Tranche B Term Loan Facility, the Company recognized a loss on extinguishment of debt of $17.6 million in the three-month period ended December 31, 2012. In addition, in connection with the Medicis acquisition, the Company on December 11, 2012, issued $1.0 billion in a new Series C of the Tranche B Term Loans (the “Series C Tranche B Term Loan Facility”). As of December 31, 2012, the Credit Agreement provided for a $450.0 million Revolving Credit Facility, including a sublimit for the issuance of standby and commercial letters of credit and a sublimit for swing line loans, a $2.225 billion senior secured tranche A term loan facility (the “Tranche A Term Loan Facility”), a $1.3 billion senior secured Series D Tranche B Term Loan Facility and a $1.0 billion senior secured Series C Tranche B Term Loan Facility.

On January 24, 2013, the Company and certain of its subsidiaries as guarantors entered into Amendment No. 3 to the Credit Agreement to reprice the Tranche A Term Loan Facility, (as so amended, the “Series A-1 Tranche A Term Loan Facility”) and the Revolving Credit Facility. Borrowings under the Revolving Credit Facility and the Series A-1 Tranche A Term Loan Facility bore interest at a rate per annum equal to, at the Company’s option, either (a) a base rate or (b) a LIBO rate, in each case plus an applicable margin. The initial applicable margin for borrowings under the Revolving Credit Facility and the Tranche A Term Loan Facility was 1.75% with respect to base rate borrowings and 2.75% with respect to LIBO rate borrowings. As amended, the applicable margins for the Tranche A Term Loan Facility and the Revolving Credit Facility each were reduced by 0.75%. Interest rates for the Revolving Credit Facility and the Series A-1 Tranche A Term Loan Facility are subject to increase or decrease quarterly based on leverage ratios. For the year ended December 31, 2013, the effective rate of interest on the Company’s borrowings under the Series A-1 Tranche A Term Loan Facility was 2.46% per annum. In 2013, the Company made a voluntary prepayment of the scheduled March 2014 amortization payment applicable to the Series A-1 Tranche A Term Loan Facility, resulting in a principal reduction of $106.3 million.

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 Series D Tranche B Term Loan Facility and Series C Tranche B Term Loan Facility by the issuance of $1.3 billion and $1.0 billion in new incremental term loans (the “Series D-1 Tranche B Term Loan Facility” and “Series C-1 Tranche B Term Loan Facility”, respectively). Term loans under the Series D Tranche B Term Loan Facility and Series C Tranche B Term Loan Facility were either exchanged for, or repaid with the proceeds of, the Series D-1 Tranche B Term Loan Facility and Series C-1 Tranche B Term Loan Facility, respectively. The applicable margins for borrowings under the Series D-1 Tranche B Term Loan Facility and Series C-1 Tranche B Term Loan Facility 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 and a 1.75% base rate floor. The term loans under the Series D-1 Tranche B Term Loan Facility and the Series C-1 Tranche B Term Loan Facility mature on February 13, 2019 and December 11, 2019, respectively, began amortizing quarterly on March 31, 2013 at an annual rate of 1.0% and have terms consistent with the Series D Tranche B Term Loan Facility and Series C Tranche B Term Loan Facility, respectively. In connection with the repricing of the Series D Tranche B Term Loan Facility and the Series C Tranche B Term Loan Facility, the Company paid a prepayment premium of approximately $23.0 million, equal to 1.0% of the refinanced term loans under the Series D Tranche B Term Loan Facility and Series C Tranche B Term Loan Facility. In connection with this transaction, the Company recognized a loss on extinguishment of debt of $21.4 million in the three-month period ended March 31, 2013.

On June 6, 2013, the Company and certain of its subsidiaries, as guarantors, entered into Amendment No. 5 to the Credit Agreement to implement certain revisions in connection with the B&L Acquisition. The amendment provided for certain revisions in connection with, among other things, the formation of VPII Escrow Corp., the offering of the senior unsecured notes by VPII Escrow Corp., the equity offering, the waiver of certain closing conditions and/or requirements in connection with the incurrence of incremental term loans and/or establishment of incremental revolving commitments related to the consummation of the B&L Acquisition.

On June 26, 2013, the Company and certain of its subsidiaries, as guarantors, entered into Amendment No. 6 to the Credit Agreement to, among other things, allow for the increase in commitments under the Revolving Credit Facility and the extension of the maturity of the Revolving Credit Facility from April 20, 2016 to April 20, 2018, and to amend certain other provisions of the Credit Agreement. On July 15, 2013, the increase in commitments and maturity extension under the Revolving Credit Facility was completed, with commitments increased by $550.0 million to $1.0 billion. For the year ended December 31, 2013, the effective rate of interest on the Company’s borrowings under the Revolving Credit Facility was 2.40% per annum.

On June 27, 2013, the Company priced new incremental term loan facilities in an aggregate principal amount of $4,050.0 million (the “Incremental Term Loan Facilities”) under its existing Senior Secured Credit Facilities. The Incremental Term Loan Facilities consist of (1) $850.0 million of tranche A term loans, maturing on April 20, 2016 (the “Series A-2 Tranche A Term Loan Facility”), bearing interest at a rate per annum equal to, at the election of the Company, (i) the base rate plus 1.25% or (ii) LIBO rate plus 2.25% and having terms that are consistent with the Company’s existing Series A-1 Tranche A Term Loan Facility, and (2) $3,200.0 million of tranche B term loans maturing on August 5, 2020 (the “Series E Tranche B Term Loan Facility”), bearing interest at a rate per annum equal to, at the election of the Company, (i) the base rate plus 2.75%, subject to a 1.75% base rate floor or (ii) LIBO rate plus 3.75%, subject to a 0.75% LIBO rate floor and having terms that are consistent with the Company’s Series D-1 Tranche B Term Loan Facility. The Incremental Term Loan Facilities closed on August 5, 2013, concurrent with the closing of the B&L Acquisition. Pursuant to the Credit Agreement, in connection with the funding of the Incremental Term Loan Facilities, the interest margins under the Series D-1 Tranche B Term Loan Facility and Series C-1 Tranche B Term Loan Facility increased by 0.875% per annum. For the year ended December 31, 2013, the effective rate of interest on the Company’s borrowings under the Series A-2 Tranche A Term Loan Facility and Series E Tranche B Term Loan Facility were 2.43% and 4.50% per annum, respectively. In 2013, the Company made a voluntary prepayment of the scheduled March 2014 amortization payment applicable to the Series A-2 Tranche A Term Loan Facility and Series E Tranche B Term Loan Facility, resulting in a principal reduction of $42.5 million and $8.0 million, respectively.

On September 17, 2013, the Company and certain of its subsidiaries, as guarantors, entered into Amendment No. 7 to the Credit Agreement to effectuate a repricing of the Series D-1 Tranche B Term Loan Facility and the Series C-1 Tranche B Term Loan Facility by issuance of $1,287.0 million and $990.0 million in new incremental term loans (the “Series D-2 Tranche B Term Loan Facility” and “Series C-2 Tranche B Term Loan Facility”, respectively). Term loans under the Series D-1 Tranche B Term Loan Facility and Series C-1 Tranche B Term Loan Facility were either exchanged for, or repaid with the proceeds of the Series D-2 Tranche B Term Loan Facility and Series C-2 Tranche B Term Loan Facility, respectively. The applicable margins for borrowings under the Series D-2 Tranche B Term Loan Facility and Series C-2 Tranche B Term Loan Facility are 2.0% with respect to base rate borrowings and 3.0% with respect to LIBO rate borrowings, subject to a 1.75% base rate floor and a 0.75% LIBO rate floor. The Series D-2 Tranche B Term Loan Facility and Series C-2 Tranche B Term Loan Facility have terms consistent with the Series D-1 Tranche B Term Loan Facility and Series C-1 Tranche B Term Loan Facility, respectively. For the year ended December 31, 2013, the effective rate of interest on the Company’s borrowings under both the Series D-2 Tranche B Term Loan Facility and Series C-2 Tranche B Term Loan Facility was 3.87% per annum. In 2013, the Company made a voluntary prepayment of the scheduled March 2014 amortization payment applicable to the Series D-2 Tranche B Term Loan Facility and Series C-2 Tranche B Term Loan Facility, resulting in a principal reduction of $3.3 million and $2.5 million, respectively.

On December 20, 2013, the Company entered into Amendment No. 8 to the Credit Agreement to allow for the extension of the maturity of all or a portion of the Series A-1 Tranche A Term Loans and Series A-2 Tranche A Term Loans outstanding from April 20, 2016 to October 20, 2018 (as extended, the “Series A-3 Tranche A Term Loan Facility”). Some of the lenders exchanged and/or converted a portion or all of their existing term loans outstanding under the Series A-1 Tranche A Term Loan Facility and Series A-2 Tranche A Term Loan Facility into the Series A-3 Tranche A Term Loan Facility. In addition, several existing lenders increased their term loans outstanding under the Series A-3 Tranche A Term Loan Facility for an aggregate amount of $33.0 million. For the year ended December 31, 2013, the effective rate of interest on the Company’s borrowings under the Series A-3 Tranche A Term Loan Facility was 2.42% per annum. On December 31, 2013, the Company made a voluntary prepayment of the scheduled March 2014 amortization payment applicable to the Series A-3 Tranche A Term Loan Facility, resulting in a principal reduction of $25.0 million.

The Revolving Credit Facility matures on April 20, 2018 and does not amortize. The Series A-1 Tranche A Term Loans mature on April 20, 2016 and began amortizing quarterly on March 31, 2012 at an initial annual rate of 5.0%. The amortization schedule under the Series A-1 Tranche A Term Loans increased to 10.0% annually commencing March 31, 2013 and following the closing of Amendment No. 8, will amortize at an annual rate of approximately 25% beginning June 30, 2014. The Series A-2 Tranche A Term Loans mature on April 20, 2016 and began amortizing quarterly on September 30, 2013 at an initial annual rate of 10.0% and, following the closing of Amendment No. 8, will amortize at an annual rate of approximately 22% beginning June 30, 2014. The Series A-3 Tranche A Term Loans mature on October 20, 2018 and will begin amortizing on March 31, 2014 at an initial annual rate of 5.0% increasing to 10.0% annually commencing March 31, 2015, increasing again to 20.0% annually commencing March 31, 2016. The Series D-2 Tranche B Term Loan Facility matures on February 13, 2019 and amortizes quarterly at an annual rate of 1.0%. The Series C-2 Tranche B Term Loan Facility matures on December 11, 2019, and amortizes quarterly at an annual rate of 1.0%. The Series E Tranche B Term Loan Facility matures on August 5, 2020, and amortizes quarterly at an annual rate of 1.0%.

The loans under the Senior Secured Credit Facilities may be made to, and the letters of credit under the Revolving Credit Facility may be issued on behalf of, the Company. All borrowings under the Senior Secured Credit Facilities are subject to the satisfaction of customary conditions, including the absence of a default or an event of default and the accuracy in all material respects of representations and warranties.

In addition to paying interest on outstanding principal under the Senior Secured Credit Facilities, the Company is required to pay commitment fees of 0.50% per annum in respect of the unutilized commitments under the Revolving Credit Facility, payable quarterly in arrears. The Company also is required to pay letter of credit fees on the maximum amount available to be drawn under all outstanding letters of credit in an amount equal to the applicable margin on LIBO rate borrowings under the Revolving Credit Facility on a per annum basis, payable quarterly in arrears, as well as customary fronting fees for the issuance of letters of credit and agency fees.

Subject to certain exceptions and customary baskets set forth in the Credit Agreement, the Company is required to make mandatory prepayments of the loans under the Senior Secured Credit Facilities under certain circumstances, including from (a) 100% of net cash proceeds from asset sales outside the ordinary course of business (subject to reinvestment rights), (b) 100% of the net cash proceeds of insurance and condemnation proceeds for property or asset losses (subject to reinvestment rights and net proceeds threshold), (c) 50% of the net cash proceeds from the issuance of equity securities subject to decrease based on leverage ratios, (d) 100% of the net cash proceeds from the incurrence of debt (other than permitted debt as defined in the Credit Agreement) and (e) 50% of Consolidated Excess Cash Flow (as defined in the Credit Agreement) subject to decrease based on leverage ratios.

The Company is permitted to voluntarily reduce the unutilized portion of the revolving commitment amount and repay outstanding loans under the Revolving Credit Facility at any time without premium or penalty, other than customary “breakage” costs with respect to LIBO rate loans. As of December 31, 2013, the Company is permitted to voluntarily repay outstanding loans under the Tranche A Term Loan Facility at any time without premium or penalty, other than customary “breakage” costs with respect to LIBO rate loans. Any repayment of the Series D-2 Tranche B Term Loan Facility or the Series C-2 Tranche B Term Loan Facility in connection with certain refinancings on or prior to March 17, 2014 requires a prepayment premium of 1.0% of such loans prepaid. As of December 31, 2013, any repayment of the Series E Tranche B Term Loan Facility in connection with certain refinancings on or prior to February 5, 2014 required a prepayment premium of 1.0% of such loans prepaid. As a result of the Series E Tranche B Term Loan Facility refinancing launched on December 5, 2013, which closed on February 6, 2014 (see note 27 titled “SUBSEQUENT EVENTS AND PENDING TRANSACTIONS”), any repayment of the repriced Series E Tranche B Term Loan Facility in connection with certain refinancings on or prior to August 6, 2014 will require a prepayment premium of 1.0% of such loans prepaid.

The Company’s obligations and the obligations of the guarantors under the Senior Secured Credit Facilities and certain hedging arrangements and cash management arrangements entered into with lenders under the Senior Secured Credit Facilities (or affiliates thereof) are secured by first-priority security interests in substantially all tangible and intangible assets of the Company and the guarantors, including 100% of the capital stock of Valeant and each material subsidiary of the Company (other than Valeant’s foreign subsidiaries) and 65% of the capital stock of each foreign subsidiary of Valeant that is directly owned by Valeant or a guarantor that is a domestic subsidiary of Valeant, in each case subject to certain exclusions set forth in the credit documentation governing the Senior Secured Credit Facilities.

As of December 31, 2013, the Company was in compliance with all covenants associated with the Senior Secured Credit Facilities.

6.50% Senior Notes due 2016 and 7.25% Senior Notes due 2022

On March 8, 2011, Valeant issued $950.0 million aggregate principal amount of 6.50% senior notes due 2016 (the “2016 Notes”) and $550.0 million aggregate principal amount of 7.25% senior notes due 2022 (the “2022 Notes”) in a private placement. The 2016 Notes had a maturity date of July 15, 2016, accrued interest at the rate of 6.50% per year, and were issued at par. The 2022 Notes will mature on July 15, 2022 and accrue interest at the rate of 7.25% per year, payable semi-annually in arrears on each January 15 and July 15, commencing on July 15, 2011. The 2022 Notes were issued at 98.125% of par for an effective annual yield of 7.50%. The 2016 Notes and 2022 Notes were and are, respectively, senior unsecured obligations of Valeant and jointly and severally guaranteed on a senior unsecured basis by the Company and each of the Company’s subsidiaries (other than Valeant) that is a guarantor under the Senior Secured Credit Facilities. Certain of the future subsidiaries of the Company may be required to guarantee the 2022 Notes.

In the fourth quarter of 2011, Valeant redeemed $34.5 million of principal amount of the 2016 Notes for $34.2 million through open-market purchases. In the fourth quarter of 2013, Valeant redeemed all $915.5 million of the outstanding principal amount of the 2016 Notes for $945.3 million, including a call premium of $29.8 million, plus accrued and unpaid interest, and satisfied and discharged the 2016 Notes indenture, solely with respect to the 2016 Notes. In connection with this transaction, the Company recognized a loss on extinguishment of debt of $32.5 million in the three-month period ended December 31, 2013.

Valeant may redeem the 2022 Notes at any time prior to July 15, 2016 at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium. On or after July 15, 2016, Valeant may redeem all or a portion of the 2022 Notes, at the redemption prices applicable to the 2022 Notes, as set forth in the 2022 Notes indenture, plus accrued and unpaid interest to the date of redemption of the 2022 Notes, as applicable. In addition, prior to July 15, 2014, Valeant may redeem up to 35% of the aggregate principal amount of the 2022 Notes, at redemption prices of 107.250% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net proceeds of certain equity offerings.

6.75% Senior Notes due 2017 and 7.00% Senior Notes due 2020

Concurrent with the closing of the Merger in September 2010 (the “Merger Date”), Valeant issued $500.0 million aggregate principal amount of 6.75% senior notes due 2017 (the “2017 Notes”) and $700.0 million aggregate principal amount of 7.00% senior notes due 2020 (the “October 2020 Notes”) in a private placement. The 2017 Notes mature on October 1, 2017 and the October 2020 Notes mature on October 1, 2020. Interest on the 2017 Notes and October 2020 Notes accrues at the rate of 6.75% and 7.00%, respectively, and is payable semi-annually in arrears on each April 1 and October 1, commencing on April 1, 2011. The 2017 Notes were issued at a discount of 99.5% for an effective annual yield of 6.84% and the October 2020 Notes were issued at a discount of 99.375% for an effective annual yield of 7.09%. The 2017 Notes and October 2020 Notes are the senior unsecured obligations of Valeant and are jointly and severally guaranteed on a senior unsecured basis by the Company and each of the Company’s subsidiaries (other than Valeant) that is a guarantor under the Senior Secured Credit Facilities. Certain of the future subsidiaries of the Company may be required to guarantee the 2017 Notes and 2020 Notes.

Valeant may redeem all or a portion of the 2017 Notes at any time prior to October 1, 2014, and Valeant may redeem all or a portion of the October 2020 Notes at any time prior to October 1, 2015, in each case at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium, as set forth in the 2017 Notes and October 2020 Notes indenture. In the fourth quarter of 2011, Valeant redeemed $10.0 million of principal amount of the October 2020 Notes for $9.5 million through open-market purchases. On or after October 1, 2014, Valeant may redeem all or a portion of the 2017 Notes, and on or after October 1, 2015, Valeant may redeem all or a portion of the October 2020 Notes, in each case at the redemption prices applicable to the 2017 Notes or the October 2020 Notes, as set forth in the 2017 Notes and October 2020 Notes indenture, plus accrued and unpaid interest to the date of redemption.

6.875% Senior Notes due 2018

On November 23, 2010, Valeant issued $1.0 billion aggregate principal amount of 6.875% senior notes due 2018 (the “December 2018 Notes”) in a private placement. The December 2018 Notes mature on December 1, 2018. Interest on the December 2018 Notes accrues at a rate of 6.875% and is payable semi-annually in arrears on each June 1 and December 1, commencing on June 1, 2011. The December 2018 Notes were issued at a discount of 99.24% for an effective annual yield of 7.0%. The December 2018 Notes are senior unsecured obligations of Valeant and are jointly and severally guaranteed on a senior unsecured basis by the Company and each of the Company’s subsidiaries (other than Valeant) that is a guarantor under the Senior Secured Credit Facilities. Certain of the future subsidiaries of the Company may be required to guarantee the December 2018 Notes.

Valeant may redeem all or a portion of the December 2018 Notes at any time prior to December 1, 2014, at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium, as set forth in the December 2018 Notes indenture. In the fourth quarter of 2011, Valeant redeemed $55.4 million of principal amount of the December 2018 Notes for $54.9 million. On or after December 1, 2014, Valeant may redeem all or a portion of the December 2018 Notes at the redemption prices applicable to the December 2018 Notes, as set forth in the December 2018 Notes indenture, plus accrued and unpaid interest to the date of redemption.

6.75% Senior Notes due 2021

On February 8, 2011, Valeant issued at par $650.0 million aggregate principal amount of 6.75% senior notes due 2021 (the “August 2021 Notes”) in a private placement. Interest on the August 2021 Notes accrues at the rate of 6.75% per year and is payable semi-annually in arrears on each February 15 and August 15, commencing on August 15, 2011. The August 2021 Notes mature on August 15, 2021. The August 2021 Notes are senior unsecured obligations of Valeant and are jointly and severally guaranteed on a senior unsecured basis by the Company and each of the Company’s subsidiaries (other than Valeant) that is a guarantor under the Senior Secured Credit Facilities. Certain of the future subsidiaries of the Company may be required to guarantee the August 2021 Notes.

The net proceeds of the August 2021 Notes offering were used principally to finance the acquisitions of PharmaSwiss (as described in note 3) and Zovirax® (as described in note 4).

Valeant may redeem all or a portion of the August 2021 Notes at any time prior to February 15, 2016, at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of redemption, plus a “make-whole” premium. On or after February 15, 2016, Valeant may redeem all or a portion of the August 2021 Notes at the redemption prices applicable to the August 2021 Notes as set forth in the August 2021 Notes indenture, plus accrued and unpaid interest to the date of redemption of the August 2021 Notes. In addition, prior to February 15, 2014, Valeant may redeem up to 35% of the aggregate principal amount of the August 2021 Notes at a redemption price of 106.750% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net proceeds of certain equity offerings.

6.375% Senior Notes due 2020

On October 4, 2012, VPI Escrow Corp. (the “VPI Escrow Issuer”), a newly formed wholly owned subsidiary of Valeant, issued $1,750.0 million aggregate principal amount of 6.375% senior notes due 2020 (the “6.375% Notes”) in a private placement. The 6.375% Notes mature on October 15, 2020. The 6.375% Notes accrue interest at the rate of 6.375% per year, which is payable semi-annually in arrears on April 15 and October 15, which commenced on April 15, 2013. In connection with the issuance of the 6.375% Notes, the Company incurred approximately $26.3 million in underwriting fees, which are recognized as debt issue discount, which resulted in the net proceeds of $1,723.7 million. At the time of the closing of the Medicis Acquisition, (1) the VPI Escrow Issuer merged with and into Valeant, with Valeant continuing as the surviving corporation, (2) Valeant assumed all of the VPI Escrow Issuer’s obligations under the 6.375% Notes and the related indenture and (3) the funds previously held in escrow were released to the Company and were used to finance the Medicis Acquisition.

The 6.375% Notes are jointly and severally guaranteed on a senior unsecured basis by the Company and each of the Company’s subsidiaries (other than Valeant) that is a guarantor under the Senior Secured Credit Facilities. Certain of the future subsidiaries of the Company may be required to guarantee the 6.375% Notes.

The indenture governing the terms of the 6.375% Notes provides that the 6.375% Notes are redeemable at the option of Valeant, in whole or in part, at any time on or after October 15, 2016, at the specified redemption prices, plus accrued and unpaid interest, if any, to the redemption date. In addition, Valeant may redeem some or all of the 6.375% Notes prior to October 15, 2016, in each case at a price equal to 100% of the principal amount thereof, plus a make-whole premium. Prior to October 15, 2015, Valeant may also redeem up to 35% of the aggregate principal amount of the 6.375% Notes using the proceeds from certain equity offerings at a redemption price equal to 106.375% of the principal amount of the 6.375% Notes, plus accrued and unpaid interest to the date of redemption.

Concurrently with the offering of the 6.375% Notes on October 4, 2012, Valeant issued $500.0 million aggregate principal amount of 6.375% senior notes due 2020 (the “Exchangeable Notes”) in a private placement, the form and terms of such notes being substantially identical to the form and terms of the 6.375% Notes, as described above. In connection with the issuance of the Exchangeable Notes, the Company incurred approximately $7.5 million in underwriting fees, which are recognized as debt issue discount, which resulted in the net proceeds of $492.5 million.

On March 29, 2013, the Company announced that Valeant commenced an offer to exchange (the “Exchange Offer”) any and all of its Exchangeable Notes into the previously outstanding 6.375% Notes. Valeant conducted the Exchange Offer in order to satisfy its obligations under the indenture governing the Exchangeable Notes with the anticipated result being that some or all of such notes would 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 Exchangeable Notes was exchanged as of such date. In the third quarter of 2013, Valeant executed a private exchange of the remaining $2.3 million of aggregate principal amount of the Exchangeable Notes into the previously outstanding 6.375% Notes.

6.75% Senior Notes due 2018 and 7.50% Senior Notes due 2021

On July 12, 2013, VPII Escrow Corp. (the “VPII Escrow Issuer”), a newly formed wholly-owned subsidiary of the Company, issued $1,600.0 million aggregate principal amount of the 6.75% senior notes due 2018 (the “August 2018 Notes”) and $1,625.0 million aggregate principal amount of the 7.50% senior notes due 2021 (the “July 2021 Notes”) in a private placement. The August 2018 Notes mature on August 15, 2018 and bear interest at the rate of 6.75% per annum, payable semi-annually on February 15 and August 15 of each year, commencing on February 15, 2014. The July 2021 Notes mature on July 15, 2021 and bear interest at the rate of 7.50% per annum, payable semi-annually on January 15 and July 15 of each year, commencing on January 15, 2014. In connection with the issuances of the August 2018 Notes and the July 2021 Notes, the Company incurred approximately $20.0 million and $20.3 million in underwriting fees, respectively, which are recognized as debt issue discount and which resulted in net proceeds of $1,580.0 million and $1,604.7 million, respectively. At the time of the closing of the B&L Acquisition, (1) the VPII Escrow Issuer was voluntarily liquidated and all of its obligations were assumed by, and all of its assets were distributed to the Company, (2) the Company assumed all of the VPII Escrow Issuer’s obligations under the August 2018 Notes and July 2021 Notes and the related indenture and (3) the funds previously held in escrow were released to the Company and were used to finance the B&L Acquisition.

The August 2018 Notes and July 2021 Notes are jointly and severally guaranteed on a senior unsecured basis by each of the Company’s subsidiaries that is a guarantor under the Senior Secured Credit Facilities.

The indenture governing the terms of the August 2018 Notes and July 2021 Notes provides that the August 2018 Notes and the July 2021 Notes are redeemable at the option of the Company, in whole or in part, at any time on or after August 15, 2015 and July 15, 2016, respectively, plus accrued and unpaid interest, if any, to the applicable redemption date. In addition, the Company may redeem some or all of the August 2018 Notes prior to August 15, 2015 and some or all of the July 2021 Notes prior to July 15, 2016, in each case at a price equal to 100% of the principal amount thereof, plus a make-whole premium. Prior to August 15, 2015, the Company may redeem up to 35% of the aggregate principal amount of the August 2018 Notes and prior to July 15, 2016, the Company may redeem up to 35% of the aggregate principal amount of the July 2021 Notes, in each case using the proceeds of certain equity offerings at the respective redemption price equal to 106.75% and 107.50% of the principal amount of the August 2018 Notes and July 2021 Notes, respectively, plus accrued and unpaid interest to the applicable date of redemption.

5.625% Senior Notes due 2021

On December 2, 2013, the Company issued $900.0 million aggregate principal amount of the 5.625% senior notes due 2021 (the “December 2021 Notes”) in a private placement. The December 2021 Notes mature on December 1, 2021 and bear interest at the rate of 5.625% per annum, payable semi-annually on June 1 and December 1 of each year, commencing on June 1, 2014. In connection with the issuances of the December 2021 Notes, the Company incurred approximately $8.5 million in underwriting fees, respectively, which are recognized as debt issue discount and which resulted in net proceeds of $891.5 million.

The net proceeds of the December 2021 Notes offering were used principally to finance the redemption of all of the 2016 Notes in the fourth quarter of 2013 (as described above).

The December 2021 Notes are jointly and severally guaranteed on a senior unsecured basis by each of the Company’s subsidiaries that is a guarantor under the Senior Secured Credit Facilities.

The indenture governing the terms of the December 2021 Notes provides that the December 2021 Notes are redeemable at the option of the Company, in whole or in part, at any time on or after December 1, 2016, plus accrued and unpaid interest, if any, to the applicable redemption date. In addition, the Company may redeem some or all of the December 2021 Notes prior to December 1, 2016, in each case at a price equal to 100% of the principal amount thereof, plus a make-whole premium. Prior to December 1, 2016, the Company may redeem up to 35% of the aggregate principal amount of the December 2021 Notes using the proceeds of certain equity offerings at the redemption price equal to 105.625% of the principal amount of the December 2021 Notes, plus accrued and unpaid interest to the redemption date.

If the Company experiences a change in control, the Company may be required to repurchase each of the senior notes issuances discussed above, as applicable, in whole or in part, at a purchase price equal to 101% of the aggregate principal amount of the senior notes repurchased, plus accrued and unpaid interest to, but excluding the applicable purchase date of the senior notes.

Medicis 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, was 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”).

During the year ended December 31, 2013, $228.4 million principal amount of the 1.375% Convertible Notes were converted by holders and settled 100% in cash. 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.

Other

In connection with the B&L Acquisition, the Company assumed B&L’s outstanding long-term debt, including current portion, of approximately $4,209.9 million at the B&L Acquisition date. As described in note 3, subsequent to the acquisition date, the Company settled the majority of the assumed long-term debt. As of December 31, 2013, B&L’s outstanding long-term debt is comprised of the following debentures: (i) 7.125% senior notes, due August 1, 2028, with outstanding principal amount of $11.7 million and (ii) 6.56% senior notes, due August 12, 2026, with outstanding principal amount of less than $0.1 million. In the fourth quarter of 2013, the Company repaid the amounts outstanding under the Japanese yen-denominated variable-rate backed secured revolving credit facility (the “Japanese Revolving Credit Facility”) assumed in connection with the B&L Acquisition. In January 2014, the Company terminated the Japanese Revolving Credit Facility.

Commitment Letters

In connection with the B&L Acquisition, the Company and its subsidiary, Valeant, entered into a commitment letter dated as of May 24, 2013 (as amended and restated as of June 4, 2013, the “Commitment Letter”), with Goldman Sachs Lending Partners LLC, Goldman Sachs Bank USA and other financial institutions to provide up to $9.275 billion of unsecured bridge loans. In connection with the effectiveness of Amendment No. 5, $4.3 billion of the commitments under the Commitment Letter were reallocated from unsecured bridge loans to a commitment in respect of incremental term loans under the Company’s Senior Secured Credit Facilities and were not subject to a commitment fee. Subsequently, the Company obtained $9.575 billion in financing through a syndication of the Incremental Term Loan Facilities under the Company’s existing Senior Secured Credit Facilities of $4.05 billion, the issuance of the August 2018 Notes in an aggregate principal amount of $1.6 billion, the issuance of the July 2021 Notes in an aggregate principal amount of $1.625 billion, and the issuance of new equity of approximately $2.3 billion. The proceeds from the issuance of the Incremental Term Loan Facilities, the August 2018 Notes, the July 2021 Notes and the equity were utilized to fund (i) the transactions contemplated by the Merger Agreement, (ii) B&L’s obligation to repay all outstanding loans under certain of its existing credit facilities, (iii) B&L’s tender offer for or discharge or irrevocable call for redemption and deposit of cash to effect such discharge or redemption of B&L’s 9.875% Senior Notes due 2015 and (iv) certain transaction expenses. In connection with the Commitment Letter, the Company incurred approximately $37.3 million in fees, which were recognized as deferred financing costs. In the second quarter of 2013, the Company expensed $24.2 million of deferred financing costs associated with the Commitment Letter to Interest expense in the consolidated statements of (loss) income. The remaining $13.1 million of deferred financing costs was expensed to Interest expense in the third quarter of 2013 upon closing of the August 2018 Notes and July 2021 Notes on July 12, 2013.

In connection with the acquisition of Medicis, the Company and its subsidiary, Valeant, entered into a commitment letter, dated as of September 2, 2012, with JPMorgan Chase Bank, N.A. and J.P. Morgan Securities LLC to provide up to $2.75 billion through a bridge loan facility. On September 11, 2012, the Company and Valeant entered into an amended and restated commitment letter with JPMorgan Chase Bank, N.A., J.P. Morgan Securities LLC and other financial institutions. Subsequently, the Company obtained $2.75 billion in financing through a syndication of $1.0 billion in the Series C Tranche B Term Loan Facility under the Company’s Senior Secured Credit Facilities and the issuance of the 6.375% Notes in the aggregate principal amount of $1.75 billion. Consequently, the commitment under the commitment letter to provide the bridge loan facility was not utilized and terminated on December 11, 2012, concurrently with the closing of the Medicis Acquisition. As a result, the Company wrote off of $8.0 million of deferred financing costs in the year ended December 31, 2012.

5.375% Convertible Notes

On June 10, 2009, the Company issued $350.0 million principal amount of 5.375% senior convertible notes due August 1, 2014 (the “5.375% Convertible Notes”).

On June 29, 2012, the Company distributed a notice of redemption to holders of the Company’s 5.375% Convertible Notes to redeem all of the outstanding 5.375% Convertible Notes on August 2, 2012 (the “Redemption Date”), at a redemption price of 100% of the outstanding aggregate principal amount, plus accrued and unpaid interest to, but excluding, the Redemption Date. On August 1, 2012, all of the outstanding 5.375% Convertible Notes were converted by holders, and on September 5, 2012, they were settled 100% in cash in the aggregate amount of $62.1 million.

Immediately prior to settlement, the carrying amount of the liability component of the 5.375% Convertible Notes was $16.0 million and the estimated fair value of the liability component was $18.3 million. The difference of $2.3 million between the carrying amount and the estimated fair value of the liability component was recognized as a loss on extinguishment of debt in the three-month period ended September 30, 2012. The difference of $43.8 million between the estimated fair value of the liability component of $18.3 million and the aggregate purchase price of $62.1 million resulted in charges to additional paid-in capital and accumulated deficit of $0.2 million and $43.6 million, respectively.

During the year ended December 31, 2012 and 2011, the Company repurchased $1.1 million and $205.0 million aggregate principal amount of the 5.375% Convertible Notes, respectively, for an aggregate purchase price of $4.0 million and $623.3 million, respectively.

4.0% Convertible Notes

In connection with the Merger in September 2010, the Company assumed $225.0 million aggregate outstanding principal amount of Valeant’s 4.0% Convertible Notes and call option agreements in respect of the shares underlying the conversion of $200.0 million principal amount of the 4.0% Convertible Notes.

All of the outstanding 4.0% Convertible Notes were converted into 17,782,764 common shares of the Company, at a conversion rate of 79.0667 common shares per $1,000 principal amount of notes, which represented a conversion price of approximately $12.65 per share. Immediately prior to settlement, the carrying amount of the liability component of the 4.0% Convertible Notes was $221.3 million and the estimated fair value of the liability component was $226.0 million. The difference of $4.7 million between the carrying amount and the estimated fair value of the liability component was recognized as a loss on extinguishment of debt in the three-month period ended June 30, 2011. The difference of $666.0 million between the estimated fair value of the liability component of $226.0 million and the aggregate fair value of the common shares issued to effect the settlement of $892.0 million resulted in charges to additional paid-in capital and accumulated deficit of $226.0 million and $440.0 million, respectively.

With respect to Valeant’s call option agreements in respect of the shares underlying the conversion of $200.0 million principal amount of the 4.0% Convertible Notes, these agreements consisted of purchased call options on 15,813,338 common shares, which matured on May 20, 2011, and written call options on the identical number of shares, which matured on August 18, 2011. As of the Merger Date, these call options were to be settled in common shares of the Company. In June 2011, 11,479,365 common shares were received on the net-share settlement of the purchased call options, which common shares were subsequently cancelled.

In September 2011, Valeant amended the written call option agreements so that Valeant could elect to settle all or some of the written call options in cash. In the third quarter of 2011, Valeant paid $66.9 million in cash and issued 7,518,595 of its common shares on a net-share basis to settle the written call options. In October 2011, 961,461 common shares were issued on a net-share basis to complete the settlement of the written call options.