Valeant Pharmaceuticals is just a couple of weeks away from defaulting on its debt. And not in an Argentina’s-just-not-going-to-pay-its-bills kind of way, but in the we-can’t-make-routine-filings-on-time kind of way, which is a thing. Now the company has made reassuring noises, promising that it will file that 10-K no more than a month late. It has also made some less reassuring noises, like asking permission to file it a little later than a month late even though it’s a stone-cold lead-pipe lock that it’ll file on April 29 or even before.
All of this had made Standard & Poor’s a teensy bit nervous about taking Valeant at its word. So it’s sticking to its word and downgrading it. You know, as practice for cutting it to junk if (when?) it tells the world that the dog ate its 10-K on April 30.
The ratings agency, which notched Valeant down to B from B+, also lowered the company’s secured debt rating, to BB- from BB….
“We are uncertain whether the holders’ motivation is simply to seek a consent fee if the 10-K filing is further delayed, or whether their objectives will preclude a smooth consent process, should that be necessary,” S&P said Thursday.