Prospect News reports four new defaults for week, S&P records two

By Caroline Salls

Pittsburgh, Aug. 27 - Prospect News reported four new defaults for the week ended Aug. 26 in the form of Chapter 11 bankruptcy filings made by Petroflow Energy Ltd., Midwest Banc Holdings, Inc. and Oriental Trading Co. Inc. and the receivership of Allied Nationwide Finance Ltd.

Allied was placed in receivership on Aug. 20 by trust deed trustee The New Zealand Guardian Trust Co. Ltd. "in the best interest of debenture stockholders."

In addition, Trico Marine Services, Inc. filed for Chapter 11 bankruptcy during the week. Trico had previously defaulted in May of this year May 2004.

REO Securities Ltd. also announced that it would miss an interest payment due Aug. 31 on its 7.5% convertible unsecured loan stock.

Meanwhile, Standard & Poor's saw two defaults for the week ended Thursday, bringing the year-to-date default count to 52.

S&P's latest defaults came from Allied Nationwide Finance Ltd. and Radio One Inc.

Prospect News reported on Aug. 17 that Radio One was in talks with its bondholders and lenders to seek financing alternatives in light of a payment blockage imposed on its 6 3/8% notes and defaults on its senior credit facility.

On Aug. 23, Radio One said its going-concern status was in jeopardy and that it could face bankruptcy.

By region, S&P's current 2010 default tallies stand at 38 in the United States, two in Europe, five in the emerging markets and seven in the other developed region, which includes Australia, Canada, Japan and New Zealand.

So far this year, missed interest or principal payments have accounted for 17 defaults, distressed exchanges have accounted for 16, Chapter 11 filings are responsible for 12 and regulatory directives, receiverships and debt reorganization account for one each.

The remaining four defaulted issuers were confidential.

Of the global corporate defaulters so far in 2010, S&P said:

• 42% of issues with available recovery ratings had recovery ratings of 6, indicating the agency's expectation for negligible recovery of 0% to 10%;

• 12% of the issues had recovery ratings of 5, for modest recovery prospects of 10% to 30%;

• 12% had recovery ratings of 4, for average recovery prospects of 30% to 50%;

• 15% had recovery ratings of 3, for meaningful recovery prospects of 50% to 70%;

• 10% of the issues had recovery ratings of 2, indicating substantial recovery prospects of 70% to 90%; and

• 10% of issues had recovery ratings of 1, or very high recovery prospects of 90% to 100%.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.