Valeant Pharmaceuticals International Inc. is losing the confidence of its biggest investor base: debt markets that lent the drugmaker more than US$30 billion to fund its rapid expansion.

The company's bonds plunged Tuesday by the most ever, pushing the yield on its most actively traded securities above 10 percent for the first time after it slashed its forecast for the year and warned that it may breach debt agreements. Standard & Poor's and Barclays Plc lowered their outlook on the debt, and Moody's Investors Service cut its credit rating on the company deeper into junk.

"You want to be an investor, not a gambler. This could be a sign of capitulation." --Matthew Duch, Calvert InvestmentsCreditors are starting to lose faith that CEO Michael Pearson will be able to execute on his promise of rapidly cutting Valeant's debt load. A delay in filing its annual report with regulators is also complicating the company's standing in debt markets. Failing to file its 10-K before Wednesday will trigger a technical default under its credit agreement, restricting it from using its credit line, the company said.

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