HCA split-rated deal prices; recent issues easier; Valeant up on asset sale; funds gain

By Paul Deckelman and Paul A. Harris

New York, June 8 – The high-yield primary market continued to coast along for a third straight session on Thursday, following the intense activity that opened the week.

No new U.S. dollar-denominated and fully junk-rated issues priced during the session, although there was one sizable split-rated crossover issue which got done – hospital operator HCA Inc.’s $1.5 billion of 30-year secured long bonds.

Traders meantime said that while there was still a fair amount of activity going on in some of the recently priced junk offerings, including those from Tenet Healthcare Corp., Hertz Corp. and PetSmart, Inc. – those issues were all lower on Thursday.

Away from the new deals, traders said that Canadian drug manufacturer Valeant Pharmaceuticals International Inc.’s bonds moved up on the news that underperforming Valeant will sell one of its divisions for close to $1 billion, the proceeds expected to be used to pay down some of its massive debt.

On the downside, Rite Aid Corp.’s bonds fell amid media speculation that the drugstore chain operator’s planned acquisition by larger rival Walgreen Boots Alliance may not come to fruition due to potential antitrust issues.

Statistical market performance measures fell across the board for a third straight session on Thursday; they had turned lower on Tuesday and then stayed down there, after having been mixed on Monday and stronger all around last Thursday and Friday.

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