Valeant bleeding continues on down session; Community Health loses amid healthcare debate; Intelsat lower

By Colin Hanner

Chicago, March 21 – As equity markets tumbled into a freefall on Tuesday, the high-yield secondary space traded mixed on the session, with the most-active issues coming from Valeant Pharmaceuticals International Inc., which continued to leak after several sessions of similar declines.

“Everything was weak today following equity markets,” a trader said of the high-yield arena in general. Stocks had their worst day of the year amid a series of impending policy decisions by the Trump administration.

Market sentiment, along with the continuing declines of some issues, paired for some steeper gains on the session, a trader said.

“There was a little more activity today,” the trader said. “[Monday] was definitely sleepy.”

Hospitals were mixed on a day that brought President Trump before Congress to bolster support for the American Health Care Act, which goes to a vote on Thursday in effort to supplant the current healthcare act, though Community Health Systems Inc. was down on the session.

Intelsat SA’s subsidiaries were overall lower on the day, traders said, following a mix on movement on Monday, exploration and production companies were generally lower as oil prices moved down, and Neiman Marcus Group, Inc. was up after being sideways a session prior.

Valeant’s declines continue

“The most active name” in all of high-yield was Valeant’s 6 3/8% notes due 2020, which “traded a ton,” a trader said. Those notes were down 3/8 point to 87.

Following not too far behind were the 7% notes due 2024, which were down 5/8 point to 101¼.

The 6½% notes due 2022 were down 3/8 point to 101½, a trader said.

Its 7½% notes due 2021 were down 1½ points to 86, a market source said.

And rounding out issues were the 6 1/8% notes due 2025, which were unchanged at 73¾, and the 5 3/8% notes due 2020, down 1/8 point to 86.

Though not as pertinent as the deadline-driven American Health Care Act bill currently navigating through Congress, President Trump rehashed his continuing fight against drug companies in comments made at a rally in Louisville, Ky., on Tuesday night.

“Once healthcare reform is done and Obamacare has been repealed, it will be time to get to work on medicine, bringing down the cost of medicine by having a fair and competitive bidding process,” Trump said at the event.

Hospitals mixed on uncertain week

A vague sense of certainty spilled out of a closed-door meeting of House Republicans on Tuesday, where President Trump asked representatives to support the American Health Care Act, a day following hesitation by the House Freedom Caucus to support the bill.

“The president just came here and knocked the ball out of the park,” House Speaker Paul Ryan said of the meeting on Tuesday, according to media outlets.

The swift on-the-surface about-face of the bill’s progress affected healthcare and hospital corporations on the session, which felt the brunt of Trump’s and Ryan’s remarks as a signal that repeal-and-replace of President Obama’s Affordable Care Act could occur soon.

The new bill is expected to go to the House on Thursday for a vote.

Franklin, Tenn.-based hospital operator Community Health Systems’ 6 1/8% notes due 2023 were down ½ point to “par and a quarter,” a trader said.

The 8% notes due 2019 were down 5/8 point to 97¾.

Community Health’s stock was down 68 cents, or 7.64%, to $8.22.

Intelsat falters

Two of satellite telecommunications company Intelsat’s issues were down following a mixed session on Monday.

Intelsat Luxembourg Holdings SA’s 8 1/8% notes due 2023 were “trading below 60,” one trader said.

A market source said the notes were down 1 point to 59¼.

And Intelsat Jackson Holdings SA’s 5½% notes due 2023 were down 1 point to 82¼, a trader said, while another desk said the notes were down by the same margin to an 82½ handle.

E&P’s weaker

Following a trend of trading weaker in the past few sessions, offshore drilling contractor Noble Holdings International Ltd.’s 7¾% notes due 2024 were down ¾ point to 91½, a trader said.

California Resources Corp.’s 8% notes due 2022 were down 1¼ points to 78¾, a trader said, while another trader said the notes were down 1½ points to 78½.

And Canadian oil sands producer MEG Energy Corp.’s 7% notes due 2024 were down 1 point to 88, a market source said.

Neiman gains

The struggling retailer saw a “1 [point] and change” increase in its 8¾% notes due 2021, a trader said. The notes were flat on Monday.

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