Prospect News marks three defaults for week ended Feb. 11; S&P at one

By Caroline Salls

Pittsburgh, Feb. 12 - Prospect News reported three defaults in the week ended Feb. 11, all of them bankruptcy filings.

Specifically, Penton Media Inc. and Spheris Inc. made Chapter 11 bankruptcy filings during the week, while JSC BTA Bank made a Chapter 15 filing in connection with its restructuring proceedings in Kazakhstan.

Meanwhile, Standard & Poor's recorded one global corporate default for the week, bringing its year-to-date tally to 14 defaults.

S&P's most recent default came from Bahrain-based Gulf Finance House, GSC.

S&P's year-to-date default counts by region include 12 defaults in the United States, one in the emerging markets and one in the Other Developed region of Australia, Canada, Japan and New Zealand. The agency said its figures include the addition of four U.S.-based issuers that have defaulted after their ratings were withdrawn and the deletion of one issuer that does not meet its default criteria.

So far this year, S&P said six issuers have defaulted because of distressed exchanges, four because of missed interest payments and four because of bankruptcies.

Of the global corporate defaulters so far in 2010, S&P said:

• 38% of issues with available recovery ratings had recovery ratings of 6, indicating the agency's expectation for negligible recovery of 0% to 10%;

• 13% of the issues had recovery ratings of 5, for modest recovery prospects of 10% to 30%;

• 13% had recovery ratings of 4, for average recovery prospects of 30% to 50%;

• 25% had recovery ratings of 3, for meaningful recovery prospects of 50% to 70%;

• None of the issues had recovery ratings of 2, indicating substantial recovery prospects of 70% to 90%; and

• 13% of issues had recovery ratings of 1, or very high recovery prospects of 90% to 100%.

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