S&P marks five global defaults for week; Prospect News records eight

By Caroline Salls

Pittsburgh, Nov. 20 - Standard & Poor's reported five global corporate defaults for the week ended Nov. 19, bringing the year-to-date tally to 247, according to an agency news release.

S&P said the year-to-date default count is nearly triple the 87 defaults at this time last year and the highest tally since its series began in 1981.

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

Meanwhile, Prospect News recorded eight defaults for the week, including five bankruptcy filings, one administration application and two missed interest payments.

Specifically, Simmons Bedding Co., Champion Enterprises, Inc., deCODE genetics, Inc., Penn Traffic Co. and Moonlight Basin Ranch filed for bankruptcy, Hellas Telecommunications (Luxembourg) II applied for administration, White Birch Paper Co. missed a bank debt interest payment and Mashantucket (Western) Pequot Tribe missed a notes interest payment.

S&P recorded defaults by Hellas, White Birch and Mashantucket, as well as Energy XXI (Bermuda) Ltd. and Energy Future Holdings Corp.

By region, S&P said 181 issuers have defaulted this year in the United States, 18 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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