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RBC maintains Connetics at outperform
Connetics Corp. was maintained at its outperform rating, speculative risk, and $10 price target by RBC Capital Markets analyst Ken Trbovich as 2008 noteholders agree to modified covenants due to incentives, and the company announced restatement of about $11 million. The analyst believes the most likely scenario is that the company pays the 2015 noteholders $200 million and makes $4.5 million in payments to 2008 holder for their consent to the waiver. This scenario, although dilutive, removes uncertainty and avoids a potential cash-crunch which would result from having to pay both notes at par. Shares of the Palo Alto, Calif.-based specialty pharmaceutical company were up 20 cents, or 2.44%, at $8.41 on volume of 712,160 shares versus the three-month running average of 779,323 shares. (Nasdaq: CNCT)
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