Valeant bonds fall despite company’s presentation; Chesapeake chopped on gas price weakness

By Paul Deckelman and Paul A. Harris

New York, Oct. 26 – Valeant Pharmaceuticals International, Inc. – last week’s favorite punching bag in both the junk bond and the equity markets after a short-seller unleashed a report making devastating allegations about the company – tried to go on the offensive on Monday – but it did not succeed in restoring much investor confidence in the beleaguered Canadian drug maker.

Valeant held a conference call on which senior executives offered a detailed rebuttal of the charges of fraudulent dealings with a specialty pharmacy company and attacked the motives of the report’s issuer. But at the end of the day, its bonds and shares, which had moved higher on Friday on expectations the company might put the matter to rest on Monday, resumed their recent slide, in heavy trading.

Elsewhere, oil and natural gas-related issues were once again being beaten down in line with lower commodity prices, with Chesapeake Energy Corp. – one of the biggest gas producers – being especially punished in very active dealings as gas prices hit a new three-year low. Gas sector peer Consol Energy Inc.’s bonds were also pushed lower.

Oil issues meantime remained under pressure as crude oil prices continued to erode.

Power producer Dynegy Inc. – which actually is a big energy user that would normally get a boost from lower fuel costs – was seen down on Monday in line with a fall in its stock after a brokerage house lowered its equity price target on Dynegy.

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