Bausch + Lomb tendering notes

[Anonymous]

“The refinancing and upsizing of our credit agreement in May provided the liquidity to pursue growth opportunities in our business, including the recent acquisition of ISTA Pharmaceuticals, Inc. With that acquisition completed, we determined that the most effective near-term use of the additional liquidity from the soon-to-expire delayed draw term loan portion of the refinancing was to tender for a portion of our senior notes.”

In layman's terms what does this mean? Does it mean that B+L is having trouble paying its debts and that a corporation wide layoff to cut costs at this company is likely?

Why is this a news feed on the company website? Seems strange.

 

[Anonymous]

In the game of high finance their are no layman's terms until the word bankruptcy is used.

Bla Bla Bla bla Bla bla bankruptcy.

 

[Anonymous]

It means they are buying back outstanding bonds with a lower rate of interest.

They have outstanding bonds... companies sell bonds with high rates of interest to generate cash, just like the US sells to china, but let's say 6 years ago they were sold at much higher rates. So someone is holding a 10 year B&L bond at 10% that matures in 4 years and B&L wants to buy it back with the extra cash from their recent line of credit.

They got a line of credit at a low rate because of the state of the economy. they bought ista with it and have some spare change left over...
They buy back an outstanding bond at 10% with a line of credit that cost 3%.
They save 7 % APR over the life of that bond.

Some people will tender the bond... meaning give it up to get paid now.
others will hold out... hoping to get their 10% yield... they might be sad they didn't take the tender offer now....

 

[wilfam]

Time will tell.