Molycorp bonds mauled on poor earnings; Cliffs clobbered too; hard-hit Aegerion comes back

By Paul Deckelman

New York, Nov. 6 – Molycorp Inc.’s bonds slid badly on Thursday after the rare-earth mining concern reported a much wider quarterly loss amid a toxic mix of lower pricing, lower volume and higher costs.

The company’s convertible notes were also seen taking it on the chin.

Distressed-debt traders said that Cliffs Natural Resources Inc.’s bonds were in some cases several points lower, reflecting continued weak commodity prices in the energy space.

However, some of its coal-sector peers such as Arch Coal Inc., Alpha Natural Resources, Inc. and Walter Energy, Inc. were better.

But other energy names, such as Goodrich Petroleum Corp., were seen lower.

In the convertibles market, apart from the Molycorp paper, which, as noted was down along with its junk bonds and its underlying shares, Solazyme Inc.’s convertibles were sharply lower amid a 58% slide in the underlying shares of the bio-industrial company to $3.14 following disappointing earnings and production plant problems.

Recently hard-hit Aegerion Pharmaceuticals Inc.’s convertibles were on the rebound after having gotten clubbed on Friday on a third-quarter earnings miss and amid allegations tying the company’s chief executive officer to a scandal swirling around Jefferies’ global head of health-care investment banking.

After the market close, Salix Pharmaceuticals Ltd. was being closely watched following disappointing earnings and the resignation of the chief financial officer of the Raleigh, N.C.-based drug company.

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