S&P sees three more defaults; Prospect News records bankruptcies, missed payments

By Caroline Salls

Pittsburgh, Oct. 30 - Standard & Poor's reported three global corporate defaults for the week ended Oct. 29. They bring the year-to-date tally to 238, which is roughly triple the 79 defaults recorded at this time in 2008, according to an agency news release.

"Two of the three defaulters this week filed for Chapter 11, and one missed its interest payment," S&P's Diane Vazza said in the release.

"In 2009 year to date, there have been 84 defaults resulting from distressed exchanges, the most cited reason this year, followed by missed interest payments and Chapter 11."

All three of this week's defaulters were based in the United States.

Meanwhile, Prospect News recorded three bankruptcy filings for the week, one missed payment and two payments scheduled to be missed in December.

The bankruptcy filings were made by Capmark Financial Group Inc., FairPoint Communications, Inc. and GPX International Tire Corp.

In addition, Centaur LLC missed a payment on its first-lien and second-lien term loans, and Bradford & Bingley plc said it would not make payments due Dec. 12 and Dec. 20 on its 5.75% fixed-rate step-up subordinated notes.

By region, S&P said 175 issuers have defaulted this year in the United States, 15 issuers in Europe, 34 issuers in the emerging markets and 14 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 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, for average recovery prospects of 30% to 50%;

• 11% 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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