S&P marks two defaults for week; Prospect News sees four bankruptcies

By Caroline Salls

Pittsburgh, Oct. 9 - Standard & Poor's reported two global corporate defaults for the week ended Oct. 8, bringing the year-to-date tally to 228, according to a news release.

S&P said one of the two defaults stemmed from a distressed exchange, which accounts for 78 defaults this year and is thus far the most cited reason for default in 2009. The other issuer was confidential.

One of the latest defaulters was based in the United States while the other was based in Europe.

Meanwhile, Prospect News recorded four bankruptcy filings for the week. The bankruptcy filings were made by Questex Media Group Inc., Accuride Corp., True Temper Sports, Inc. and Canwest Global Communications Corp., which filed for Companies' Creditors Arrangement Act protection in Canada and made a Chapter 15 bankruptcy filing in the United States.

S&P's defaulters for the week included Advanstar Inc. and a confidential company.

The ratings agency said the distressed exchanges are trailed by missed payments as the top reason for default in 2009 with 76. S&P's year-to-date bankruptcy filing default tally stands at 54 issuers.

By region, S&P said 163 issuers have defaulted this year in the United States, 14 issuers in Europe, 34 issuers in the emerging markets and 13 issuers in the other-developed region, which includes Australia, Canada, Japan and New Zealand.

Of the global corporate defaulters so far this year, S&P said:

• 40% of issues with available recovery ratings had recovery ratings of 6, indicating the ratings agency's expectation for negligible recovery of 0% to 10%;

• 15% of issues had recovery ratings of 5, for modest recovery prospects of 10% to 30%;

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

• 10% had recovery ratings of 3, for meaningful recovery prospects of 50% to 70%;

• 12% of 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%.

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