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

By Caroline Salls

Pittsburgh, Nov. 13 - Standard & Poor's reported two global corporate defaults for the week ended Nov. 12, bringing the year-to-date tally to 241, according to an agency news release.

"By comparison, this total is nearly triple the 85 defaults at this time in 2008 and is the highest annual global default total since our series began in 1981," S&P's Diane Vazza said in the release.

"This total even exceeds the 229 defaulted issuers in 2001 during the previous recession."

The agency said one of the latest defaulters was based in Europe and the other in the United States.

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

Specifically, Advanta Corp. filed for Chapter 11 bankruptcy, and Temecula Valley Bancorp Inc. made a Chapter 7 bankruptcy filing.

By region, S&P said 176 issuers have defaulted this year in the United States, 17 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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