Valeant Pharmaceuticals Intl Inc (NYSE:VRX) has kicked off the process to obtain an amendment waiver to extend its credit facility but the burden of debt on the company makes it an unattractive buy for Mizuho Securities. According to the coverage by Mizuho’s Irina Koffler, the news regarding the amendment waiver are as expected but in the long term the view on Valeant remains bearish. Mizuho Securities has an Underperform rating on Valeant stock with a price target of $18.

Amendment waivers are little more than routine with companies as heavily leveraged as Valeant according to the analyst; but while expected, it is not a positive development. In this kind of situation, banks and other lenders impose higher interest rates on the borrower, require wider spreads as well as greater fees on the balance; an additional burden on Valeant. Koffler reports that lenders might be given fees of 50 basis points with coupon of 50 basis points. The analyst does highlight a piece of good news, a lack of irregularity in the company’s finances by the Ad Hoc Committee.

Mizuho Securities however remains bearish on the stock with the company still subject to a Congressional hearing. Koffler has also expressed the firm’s belief that the Street’s consensus for the third quarter fiscal year 2016 are too optimistic with Mizuho’s view being that Valeant’s revenue is being eroded and the company’s resources are continuously being drained from the burden of repaying debt. There is no solution in sight for Valeant at the moment it seems. Investors should keep in mind that this is a stock that has dropped around 90% from where it was a year ago and has lost $80 billion valuation in the process.