Drugs giant Endo skipping interest payment, creditors want bankruptcy

Endo International Plc, the latest drugmaker pushed to the brink by opioid lawsuits, skipped a $38 million interest payment as it looks at options including a potential bankruptcy filing.

The move, which affects the company's unsecured bonds, means that the company sided with senior creditors, who argue that skipping the bond payment and reorganizing in bankruptcy is better for the company. Endo has 30 days to hand over the missing cash before it becomes a formal default. The company skipped the payment because it keeps talking to creditors about ways to help ease its debt load, Endo said in a regulatory filing.

Creditor groups with differing views on its best path for dealing with lawsuits over its role in America's opioid epidemic, increasing debt load and a dimmed outlook for its bestselling drug have been discussed by the company.

According to people with knowledge of the talks, the company s senior lenders favor bankruptcy and wanted the company to skip upcoming interest payments to preserve cash. Endo's lower-ranking creditors are pressing options that would restructure its debts outside of court.

After Endo skipped the payment, Bloomberg Intelligence credit analyst Mike Holland said the company was probably looking hard at taking such a step because Endo has greatly reduced earnings expectations as a result of competition for its top drug, Vasostrict.

Holland said earlier this week that it appears that secured lenders and secured bondholders will be in position to drive a possible restructuring process, despite the dismay of vocal junior bondholders.

Representatives of Endo did not return calls and emails seeking comment.

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