Valeant bonds shed Monday gains; Horizon Pharma converts slide; AMD firm despite downgrade

By Paul Deckelman

New York, Oct. 20 – Valeant Pharmaceuticals International, Inc.’s bonds may have temporarily escaped the downturn that the troubled Canadian drug maker’s shares saw on Monday after the company released earnings and outlined changes in its controversial operating strategy – but their luck ran out on Tuesday as the bonds were off across the board in active dealings while its equity carnage only got worse.

Junk market players were meantime puzzled by the implications of the sharp fall, on heavy trading, of the new bond issue from another Canadian pharmaceuticals company, Concordia Healthcare Corp. That $790 million of seven-year notes were seen trading in the mid-90s, just hours after the deal had priced with little fanfare at par – although the debt was said to have been sold to investors by the banks at a discount.

Also in the biotech and pharmaceuticals sector, Horizon Pharma plc’s convertibles slid by multiple points on a damaging news report news report about the Irish company’s pricing policies for one of its key drugs.

Away from the pharmaceutical and biotech realm, Chesapeake Energy Corp.’s bonds were sharply lower in busy trading Tuesday against a backdrop of continually declining crude oil prices. Other sector names seen off included Linn Energy LLC and American Energy-Permian Basin LLC – ahead of the latter company’s upcoming five-year note issue.

Standard & Poor’s lowered the credit ratings of Advanced Micro Devices Inc. But the computer-chip manufacturer’s bonds were seen having firmed on the session, although volume was light.

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