RE:RE:Fitch Ratings"But they have $2B in debt maturities in the next 12 months."
This is the essence of Baxter's debt woes. Every year they will have about the same amount, if not much more, of debt that needs to be rolled over into new debt. New debt, with a much higher interest rate than the bonds that originally came due.
The bonds that Baxter issued for that ill advised Hilrom purchase, were probably issued at around 4% or less, as those bonds mature and come due, the new interest rate is atleast double that rate, actually probably more thanks to their Fitch issues. The interest expense for their foolish spending is going to be continuously rolling into a much much higher interest rate.
The 10.5 Billion that Baxter paid for Hilrom was paid for by bonds that Baxter issued in the end of 2021. Interest rates back then were very friendly to business, today, not so much. Baxter also assumed 2B of Hilroms debt, and those bonds are surely coming home to roost soon.
I'm not trying to hate on Baxter, but if I was a shareholder of them, I'd start to be scared that they are going to have to halt their dividend. Heck maybe that Hilrom hospital bed asset miraculously starts to perform like they thought it would, but going into a contracting economy, I wouldn't bet on it.
All I'm trying to say is that the PMX distribution rights, is in much better, more financially secure hands, when Baxter finally sells Vantive to PE, and if that PE decides they want the whole kit and caboodle for synergystic reasons, then all the better for us.