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Giant-sized Valeant deal caps nearly $16 billion week, new bonds busy; energy names slide
By Paul A. Harris and Paul Deckelman
New York, March 13 – Valeant Pharmaceuticals International Inc. brought its eagerly awaited and much-discussed $10 billion equivalent four-part bond deal to market on Friday – and the giant-sized offering, one of the biggest ever seen in Junkbondland, more than lived up to all of the hype.
The Canadian drugmaker’s new issue, which included three multi-billion-dollar tranches of U.S.-dollar-denominated notes as well as a sizable euro-denominated piece of paper, moved higher in the aftermarket from the get-go, with all three dollar credits racking up extremely heavy volume.
Those dealings came against a backdrop of news reports indicating that Valeant plans to sweeten its offer for sector peer Salix Pharmaceuticals Ltd. – a purchase being funded in great part by the bond deal proceeds – in order to trump a rival bid from Endo International plc.
The day’s $8.78 billion of new dollar-denominated paper – easily the heaviest single-day new-issue volume so far this year – brought new issuance for the week to just under $16 billion of dollar-denominated and fully-junk-rated bonds from domestic or industrialized-country borrowers in 19 tranches, according to data compiled by Prospect News, almost double the $8.5 billion of such paper that priced in 13 tranches last week, ended March 6.
Traders said the junk market generally was lower, with the energy names such as California Resources Corp., Linn Energy LLC and the recent bond deals from Comstock Resources Inc. and Peabody Energy Corp. leading the way downward, in line with a renewed plunge in oil prices.
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