Huron slides outright, ‘comes in’ on swap on disappointing earnings; Horizon rebounds

By Rebecca Melvin

New York, Oct. 23 – Huron Consulting Group Inc.’s 1.25% convertibles were slammed on an outright basis and contracted 0.5 point to 1 point on a swap basis on Friday after disappointing earnings and guidance. Shares of the Chicago-based financial consulting company plunged 24%.

The Huron convertibles fell to the lower 90s from about 104 to 105.

Elsewhere, the convertibles of Horizon Pharma plc rebounded along with the common shares of the Dublin-based specialty pharmaceutical company.

Fellow specialty pharmaceutical company and fellow convert issuer DepoMed Inc. was also better, although its convertibles were not as actively traded as those of Horizon’s.

The rebound in these names was strong but not as strong as the downdraft that preceded it. Horizon still remains down at least 7 or 8 points on an outright basis and 3 points on swap from a week ago.

Behind the jump on Friday may have been investors getting comfortable with the idea that the fallout from allegations against specialty pharmacies may be contained, a New York-based trader said.

“It may have been a bit of a relief as investors do their due diligence and determine: is it legitimate and who does it impact; and they may be seeing that there was an overreaction on the credit; although we don’t know yet,” the trader said.

Valeant Pharmaceuticals International Inc. was hit by allegations of fraud in a report published this week by Citron Research. Valeant denies the allegations.

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