Mallinckrodt notes up on hope of settlement; Party City active as ratings downgraded

By James McCandless

San Antonio, Nov. 25 – The distressed debt market began a truncated week with a focus on news in the pharma and retail sectors.

Mallinckrodt plc’s notes traded up after news broke of a potential settlement between the government and generic producers over alleged price fixing.

The 5¾% senior notes due 2025 jumped up 4¼ points to close at 31 bid. The 5½% senior notes due 2025 gained 4 points to close at 27 bid.

The Staines-upon-Thames, England-based generic drug producer’s structure saw positivity after news broke that a group of generic drug makers are expecting to reach a settlement with the Department of Justice over alleged price fixing in the generics market.

Meanwhile, in retail, Party City Holdco Inc.’s issues varied in direction as it received a ratings downgrade.

The 6 1/8% senior notes due 2023 rose ¾ point to close at 76¾ bid. The 6 5/8% senior notes due 2026 shaved off ¾ point to close at 60¼ bid.

During the Monday session, Moody’s Investors Service issued a downgrade for the Elmsford, N.Y.-based retailer.

The agency lowered the company’s corporate family rating, probability of default rating and issue-level ratings, citing weaker-than-expected operating results for the third quarter.

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