Bausch + Lomb closes €675m secured notes offering and expands credit agreement with new $2.325bn term loan facility

Why did Bausch + Lomb issue new senior secured notes and refinance its existing term loans in mid-2025?

Bausch + Lomb Corporation (NYSE/TSX: BLCO), a global leader in eye health solutions, announced the successful closing of a €675 million senior secured floating rate notes offering due 2031, alongside a significant partial refinancing of its existing debt framework. The transaction, executed through its subsidiaries Bausch+Lomb Netherlands B.V. and Bausch & Lomb Incorporated, reflects the Canadian-American drugmaker’s ongoing strategy to enhance liquidity and operational flexibility while reducing short-term debt burdens. The capital raise and restructuring included not only the upsized notes issuance but also the establishment of a new $2.325 billion Term B loan facility maturing in 2031 and an $800 million revolving credit facility maturing in 2030.

Institutional investors view the dual funding action as a positive step toward balance sheet optimization. Analysts tracking capital structure trends in the eye health sector noted that such refinancing actions are typically aimed at managing maturity profiles, mitigating interest expense risk in rising rate environments, and enabling long-term investments in pipeline development and international expansion.

What interest rates and repayment terms were secured for the €675 million notes and the new term B loan?

The €675 million senior secured notes bear interest pegged to the three-month EURIBOR, with a 0% floor, plus 3.875% annually—reset quarterly. Issued at 99.500% of their principal, these notes will mature on January 15, 2031. The high-yield euro-denominated debt instrument is part of Bausch + Lomb’s broader debt refinancing strategy and carries a security package that mirrors existing credit obligations, including first-priority liens across key assets.

Simultaneously, the $2.325 billion Term B loan—also due in 2031—was split across two interest rate options. For loans indexed to SOFR (Secured Overnight Financing Rate), the interest is 4.25%, while for ABR (Alternate Base Rate) indexed loans, the interest is 3.25%. Repayments for this tranche commence with a 1% annual amortization rate beginning September 30, 2025, offering a low-cost debt servicing profile that favors long-term cash preservation. The revolving credit facility of $800 million, maturing in 2030, retains its current interest rate structure but now benefits from updated financial covenants and expanded transaction flexibility.

How does this refinancing affect Bausch + Lomb’s capital structure and near-term financial obligations?

The American-Canadian eye care developer plans to utilize proceeds from the notes and new term loans to completely repay its previous revolving credit facility and refinance both term A and term B loans that were previously due in 2027. This move effectively extends the company’s debt maturity horizon by four years and consolidates multiple tranches under a simplified and longer-term structure. It also frees up the new $800 million revolving credit line for operational use and potential inorganic growth opportunities.

From a financial management standpoint, this maneuver enhances the company’s liquidity position while also reducing refinancing risk during uncertain macroeconomic conditions. Analysts expect that this approach may lower annual interest expense variability, especially as the new term loans offer clearer predictability over multiyear debt costs. In light of the company’s broad geographic footprint across 100 countries and its robust pipeline of approximately 400 eye care products, such financial restructuring is seen as a preemptive alignment of resources with medium-to-long-term R&D and commercialization priorities.

What are the implications for institutional investors and how is the market reacting to Bausch + Lomb’s debt restructuring?

Institutional sentiment toward Bausch + Lomb remains cautiously optimistic following this refinancing. By eliminating near-term debt maturities and streamlining its financial covenants, the ophthalmic product innovator has likely improved its profile among both equity and credit investors. Fixed-income participants—particularly those in the U.S. private placement and European high-yield segments—view the new notes and loan facility as appropriately priced given the company’s global brand strength and stable cash flows from core eye care segments.

While the transaction does not directly affect the company’s equity share count or trigger dilution, it enhances its strategic agility. Observers also suggest that the streamlined capital structure may support future asset acquisitions or licensing agreements, particularly in the surgical devices or ophthalmic pharmaceutical domains. Analysts maintain that strong institutional interest in the note offering signals underlying confidence in the company’s ability to maintain credit metrics despite ongoing investments in R&D and international market penetration.

How do analysts view the future outlook for Bausch + Lomb following this strategic refinancing move?

Going forward, analysts expect Bausch + Lomb to leverage its new debt structure to further enhance innovation in contact lenses, surgical devices, and ophthalmic pharmaceuticals. The longer maturity profile and increased financial flexibility may provide headroom for the launch of next-generation therapeutic devices and potential M&A in high-growth markets like Asia-Pacific and Latin America.

Given its historical roots dating back to 1853 and its presence in more than 100 countries, the Vaughan, Ontario–headquartered company is well-positioned to execute a multi-year growth strategy. Institutional expectations suggest that additional filings, especially in ophthalmic drug formulations and surgical platforms, are likely to follow in the second half of 2025 and into 2026. Some industry watchers have also hinted at potential public or private spin-offs of underutilized assets, particularly if credit markets remain favorable and internal returns on capital improve as a result of this refinancing.

In conclusion, Bausch + Lomb’s recent debt refinancing marks a pivotal financial milestone, reflecting prudent balance sheet management amid rising interest rate pressures. With reduced rollover risk and enhanced operational liquidity, the global eye care leader is poised to advance both its commercial and clinical development agenda in the years ahead.