Endo's $2.5B Debt Sale for Bankruptcy Exit, Cuts $5.5B Debt

Endo International raises $2.5 billion through bonds and loans to exit Chapter 11, reducing debt by $5.5 billion.

By Jack Wilson

4/11, 16:48 EDT
Goldman Sachs Group, Inc.
JP Morgan Chase & Co.

Key Takeaway

  • Endo International sells $2.5 billion in bonds and loans to exit Chapter 11, reducing debt by $5.5 billion.
  • Financing includes a $1 billion bond at 8.5% and a $1.5 billion term loan, with Goldman Sachs and JPMorgan leading the sale.
  • The deal reflects investor interest in distressed companies' debt, highlighting complex legal-financial restructuring strategies.

Endo International's Debt Restructuring

Endo International has successfully sold $2.5 billion in bonds and loans to support its emergence from Chapter 11 bankruptcy, following a judge's approval of the drugmaker's debt restructuring plan last month. The financing package is a crucial step for Endo as it seeks to navigate its way out of Chapter 11, with the company having received court approval for a bankruptcy plan in March that addresses significant opioid liabilities. This plan is expected to reduce Endo's debt by approximately $5.5 billion and is contingent on settlements with opioid victims and government authorities. The exit financing comprises a new $1 billion bond with an 8.5% coupon and a $1.5 billion term loan priced at 450 basis points over the Secured Overnight Financing Rate. Additionally, Endo's restructuring includes a $400 million super priority revolver. Banks led by Goldman Sachs Group Inc. and JPMorgan Chase & Co. facilitated the debt sale, which was initially proposed to be an even split between the bond and term loan but was later adjusted.

Market Dynamics and Legal Complexities

The debt restructuring of Endo International highlights the intricate legal and financial maneuvers involved in navigating Chapter 11 bankruptcy and resolving extensive liabilities. This case is part of a broader trend where drugmakers have filed for Chapter 11 to manage lawsuits related to the opioid crisis. The restructuring process for Endo not only involves significant legal proceedings but also complex financial arrangements to ensure the company can move forward. The successful sale of bonds and loans indicates a critical milestone in Endo's efforts to restructure its debt and address its liabilities effectively.

Broader Implications for the Debt Market

The situation with Endo International sheds light on the broader dynamics of the debt market, especially concerning companies in distress or undergoing restructuring. The demand for Endo's bonds and loans, as well as the involvement of major banks in the sale, underscores the continued interest and appetite among investors for debt instruments, even in complex situations. This case also highlights the role of legal and financial advisors in orchestrating such deals, demonstrating the importance of strategic planning and negotiation in achieving successful restructuring outcomes.