Mallinckrodt dips on InfaCare purchase; Endo, Valeant earnings on tap; Fannie Mae up

By Stephanie N. Rotondo

Seattle, Aug. 7 – The distressed debt market was once again largely passed over for the high-yield space on Monday, as another flurry of new issues hit the tape.

There was, however, some activity in the distressed pharmaceutical arena.

Mallinckrodt plc’s 4¾% notes due 2023 were a touch weaker after the company said it was acquiring InfaCare Pharmaceutical Corp. in a deal estimated to be worth $425 million.

A trader called the notes down a quarter-point at 88¾.

The acquisition will put a developing jaundice drug for newborns into Mallinckrodt’s hands. The drug was put on the Food and Drug Administration’s fast track back in December, given that there are few drugs currently in the market that meet such needs.

Meanwhile, generic pharmaceutical company Endo International plc saw its debt trade unchanged to lower ahead of its earnings release on Tuesday.

A trader deemed the 6% notes due 2023 steady at 84, though the 6% notes due 2025 dipped a quarter-point to 81¾.

Another pharmaceutical company with earnings coming on Tuesday, Valeant Pharmaceuticals International Inc.’s 5 7/8% notes due 2023 were pegged at 85 3/8, a gain of half a point.

Last quarter, the company – which has struggled amid price fixing allegations – surprised the market by beating expectations.

As for the distressed preferred stock market, Fannie Mae’s 8.25% series S fixed-to-floating rate noncumulative preferreds (OTCBB: FNMAS) were trading active, firming 16 cents, or 2.33%, to $7.02.

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