Prospect News reports one new default for week, S&P records two

By Caroline Salls

Pittsburgh, Aug. 20 - Prospect News reported one new default for the week ended Aug. 19 in the form of a Chapter 11 bankruptcy filing made by EBG Holdings LLC/Boston Generating.

Prospect News also reported a missed interest payment by Affinity Group Holding, Inc., which previously defaulted in February 2010 and August 2009, and a Chapter 11 bankruptcy filing, which was made by Caribbean Petroleum Corp. during the previous week.

Meanwhile, Standard & Poor's saw two defaults for the week ended Thursday, bringing the year-to-date default count to 50.

By region, S&P's current 2010 default tallies stand at 37 in the United States, two in Europe, five in the emerging markets and six in the other developed region, which includes Australia, Canada, Japan and New Zealand.

So far this year, distressed exchanges have accounted for 16 defaults, missed interest or principal payments account for 15, Chapter 11 filings are responsible for 12 and regulatory directives, receiverships and debt reorganization account for one each.

The remaining four defaulted issuers were confidential.

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

• 39% of issues with available recovery ratings had recovery ratings of 6, indicating the agency's expectation for negligible recovery of 0% to 10%;

• 12% of the 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%;

• 16% had recovery ratings of 3, for meaningful recovery prospects of 50% to 70%;

• 11% of the issues had recovery ratings of 2, indicating substantial recovery prospects of 70% to 90%; and

• 11% of issues had recovery ratings of 1, or very high recovery prospects of 90% to 100%.

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