Energy names, Valeant gain – but Mallinckrodt, Community Health and Sprint get hammered

By Paul Deckelman

New York, Nov 7 – Traders in distressed debt and bonds of underperforming companies and sectors saw an upturn in some formerly beleaguered areas.

They said that energy names such as California Resources Corp., Denbury Resources Inc. and QEP’s existing bonds all firmed smartly, riding their upside momentum of the past several sessions – even though world crude oil prices declined after three straight advances.

Valeant Pharmaceuticals International Inc.’s bonds also moved up, as the Canadian drugmaker reported third-quarter earnings and reported continued progress in cutting its massive debt load using asset-sale proceeds and generated cash flow.

But other healthcare names were seen struggling.

Fellow drugmaker Mallinckrodt plc’s bonds were on the slide after the company reported disappointing quarterly earnings.

Hospital operator Community Health Systems Inc.’s bonds remained sickly.

However, sector peer Tenet Healthcare Corp.’s bonds rebounded from Monday’s downturn.

Sprint Corp. continued to fall following the end of its efforts to merge with competitor T-Mobile.

In the convertibles market, Priceline Group Inc.’s paper took a tumble Tuesday after the company lowered its future guidance in its 10-Q filing with the Securities and Exchange Commission.

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