Valeant Pharmaceuticals reports disappointing results, cuts guidance; oil and gas firms

By Stephanie N. Rotondo

Seattle, June 7 – Valeant Pharmaceuticals International Inc. was “one of the more notable names” in the distressed debt market on Tuesday, according to a trader.

The notoriety of the name – and its debt – came as the troubled drug maker released disappointing earnings and also lowered its guidance.

Away from Valeant, a trader said that “a lot of the oil and gas stuff continues to be better.”

Chesapeake Energy Corp.’s 8% second-lien notes due 2022, for instance, were “higher again,” the trader said, placing the issue in an 84½ to 85 context.

Another trader said the bonds were “up again,” trading up 1½ points to 84¾.

Yet another market source pegged the 6 5/8% notes due 2020 at 73¾ bid, a gain of 2½ points.

California Resources Corp.’s 8% second-lien notes due 2022 were also firm, adding a deuce to close at 75¼, according to one trader.

Even Seventy Seven Energy Inc. – an Oklahoma City-based oilfield services provider spun off from Chesapeake in 2014 – managed to hold steady, even as the company filed for bankruptcy.

One trader said the 6 5/8% notes due 2019 were “unchanged on the day” at 46. Another trader placed the issue in the mid-40s.

The bonds are now trading flat, or without accrued interest, given the filing.

Under the prepackaged filing, the company will convert $1.1 billion of its $1.8 billion in debt into new equity. The existing equity will be canceled.

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