Prospect News reports three new defaults for Oct. 2-Oct. 8, S&P four

By Caroline Salls

Pittsburgh, Oct. 10 – Prospect News reported three new defaults for the period of Oct. 2 through Oct. 8.

Specifically, Prospect News reported the Chapter 11 bankruptcy filing of GT Advanced Technologies Inc., a missed payment by Trinidad Cement Ltd. and a default on OSX 3 Leasing BV’s 13% senior secured callable bond issue 2012/2015 resulting from the company’s failure to prove there were enough funds in an escrow account to pay insurance premiums.

Prospect News has reported 108 defaults so far for 2014, including 55 Chapter 11 bankruptcy filings, 11 missed interest payments, eight Chapter 15 bankruptcy filings, four controlled management requests, three each of Companies’ Creditors Arrangement Act filings and missed principal and interest payments, two each of administrations, concurso mercantil filings, insolvencies, missed principal payments, missed payments, defaults and restructurings and one of each of bankruptcy filings, bankruptcy administrations, judicial recovery requests, Chapter 7 bankruptcy filings, missed interest payments paid within the grace period, reconstructions, reorganizations, distressed exchanges, curatorships and liquidations.

S&P latest defaults

Meanwhile, Standard & Poor’s said its global default tally has risen by four issuers to 47 since Oct. 2.

S&P said the first default occurred after Reichhold Industries announced that its U.S. subsidiaries had filed Chapter 11 bankruptcy. Following the bankruptcy announcement, S&P lowered its corporate credit rating on Reichhold to D from CCC-.

The second default occurred when Mashantucket (Western) Pequot Tribe failed to make full and timely interest payments to its junior debtholders on Sept. 30 because of a blocking notice from senior lenders stemming from Mashantucket’s failure to comply with financial covenants under its senior credit facility on June 30. S&P said it lowered its issuer credit rating on Mashantucket to SD from CC.

The ratings agency said the third default occurred when Trinidad Cement missed its debt service payments on Sept. 30, which led S&P to downgrade the company to D from B.

Also, the company gave notice to its stakeholders that it was putting all payments on hold and would submit a restructuring plan by Oct. 31.

S&P said the last default occurred when Industrias Metalurgicas Pescarmona (IMPSA) failed to make a payment on its local bonds, series VIII and IX, for which the five-day grace period ended on Oct. 3. Subsequently, Standard & Poor’s downgraded IMPSA and its sister company, WPEIC, to D from CC.

Accounting for 18 of the 47 defaults so far this year, S&P said missed interest or principal payments have overtaken bankruptcy filings, which have accounted for 14 defaults, as the most common reason for default in 2014. Of the remaining defaults, nine resulted from distressed exchanges, four were confidential, one resulted from a judicial reorganization, and one was the result of a creditor protection filing.

Of the 47 issuers that have defaulted so far this year, S&P said 25 are based in the United States, 13 are based in the emerging markets, five are based in the other developed region, consisting of Australia, Canada, Japan and New Zealand, and four are based in Europe.

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