S&P marks four global corporate defaults for Nov. 20 to Dec. 3; Prospect News records seven

By Caroline Salls

Pittsburgh, Dec. 4 - Standard & Poor's reported four global corporate defaults for the period of Nov. 20 to Dec. 3, bringing the year-to-date tally to 251, according to an agency news release.

S&P said the year-to-date default count is the highest tally since its series began in 1981.

The agency said two of the latest defaulters were based in the United States, one in the emerging markets and one in the other-developed region, which includes Australia, Canada, Japan and New Zealand.

Meanwhile, Prospect News recorded seven defaults for the period, including five bankruptcy filings, one missed payment and one distressed exchange.

Specifically, GSI Group, Inc., Majestic Star Casino, LLC and Palm Beach Finance Partners, LP made Chapter 11 bankruptcy filings, and New York City Off-Track Betting Corp. made a Chapter 9 bankruptcy filing.

Integra Telecom Inc. made a distressed exchange, and Dune Energy Inc. missed an interest payment on its 10½% senior secured notes due 2012.

S&P recorded defaults by Dune Energy, Integra Telecom, Corporacion Interamericana de Entretenimiento, SAB de CV and Japan Airlines Corp.

"Two of the most recent defaults were the results of distressed exchanges, one was due to a payment suspension on specific notes, and one was the result of a missed interest payment," S&P's Diane Vazza said in the release.

"So far this year, distressed exchanges lead the default charge with 91 defaults, followed by missed interest and/or principal payments with 84 defaults and bankruptcy-related filings with 60 defaults."

By region, S&P said 183 issuers have defaulted this year in the United States, 18 issuers in Europe, 35 issuers in the emerging markets and 15 issuers in the other-developed region.

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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