S&P sees one weekly default; Prospect News records five bankruptcies

By Caroline Salls

Pittsburgh, Nov. 6 - Standard & Poor's reported one global corporate default for the week ended Nov. 5, bringing the year-to- date tally to 239, according to an agency news release.

The 2009 default count is roughly triple the 82 defaults recorded at this time in 2008, S&P said.

S&P said this week's default was a result of a distressed exchange, which ups the tally of distressed exchange related defaults to 85 issuers, the most cited reason for defaults this year.

The agency said the latest defaulter was based in Europe.

Meanwhile, Prospect News recorded five bankruptcy filings for the week.

The bankruptcy filings were made by CIT Group Inc., Panolam Industries International, Inc., California Coastal Communities, Inc., Otter Tail Ag Enterprises LLC and Lazy Days' R.V. Center Inc.

S&P's default was recorded by Invitel Holdings A/S.

By region, S&P said 175 issuers have defaulted this year in the United States, 16 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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