Mallinckrodt down; Walter Investment up on debt adviser news; California Resources drift

By Colin Hanner

Chicago, June 5 – In line with typical Monday sessions, activity was lighter in the distressed debt arena to start the week, though muted issues in recent times came to surface.

Staines-upon-Thames, England-based Mallinckrodt Pharmaceuticals became the target of Citron Research, a short-seller firm headed by Andrew Edward Left, on Monday. Citron released a report that accused the company of price gouging a drug, comparing it to the likes of Valeant Pharmaceuticals International Inc.

Two series of Mallinckrodt’s bonds were down by 1 point or more, and its stock was down several points.

On the other hand, mortgage servicing company Walter Investment Management Corp. was up on the session on substantial volume, a trader said. On Friday, the company said it had recently hired a financial debt restructuring adviser to support its debt restructuring initiatives, according to an 8-K filing with the Securities and Exchange Commission.

Elsewhere, California Resources Corp. “continued to drift,” a market source said, as West Texas Intermediate crude oil continued to leak in the broader market, falling below $47.50 a barrel.

Intelsat SA, largely in flux prior to and following the breakdown of an exchange offer last week, was again mixed on Monday in three series of notes, Frontier Communications Corp. stayed active in one of its issues and companies that saw increased activity a week prior saw few trades.

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