Valeant drops with Q3 announcement on horizon; Nortel up after settlement; Alliance leaks after deal

By Colin Hanner

Chicago, Oct. 13 – The start of the third quarter earnings season, coupled with the release of the Federal Reserve’s minutes on Wednesday and Chinese exports plunging, seemed to weigh on distressed debt activity on Thursday.

Valeant Pharmaceuticals International Inc.’s 5 7/8% notes due in 2023 were bidding at 83 at the midmorning on Thursday; on Wednesday, they were trading at 85, a trader said.

The company’s 7½% notes due 2021 were the market’s key loser on the day, down 1¾ points to 94.25.

The announcement of the company’s third quarter results are on the horizon – Oct. 19.

More concrete news surrounding Valeant came out of a report that claims a lead poisoning drug produced by Valeant had its price increased by 2,700% in a single year.

There was a “fair amount of activity” in Alliance One International Inc., a market source said. The company’s 9 7/8% notes due 2021 were down a bit, trading around 82¼ to 82½, the source continued.

“That one has been leaking ever since they did that new secured deal,” the source continued.

The deal was announced on Oct. 6, which debuted a senior secured first lien note due 2021 in the amount of $275 million with an annual 8½% interest rate

On the up side, a trader pointed to Nortel Networks Corp., a company that is “not really distressed prices, but it is sort of a stressed/distressed name,” saying the company’s 10% notes were up around the “99 level.”

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