Prospect News reports two new defaults for Aug. 14-Aug. 20, S&P four

By Caroline Salls

Pittsburgh, Aug. 22 – Prospect News reported two new defaults for the period of Aug. 14 through Aug. 20.

Specifically, Prospect News reported Daehan Shipbuilding Co., Ltd.’s Chapter 15 bankruptcy filing and NII Holdings Inc.’s election not to pay roughly $118.8 million of interest due Aug. 15 on its senior notes.

Prospect News has reported 90 defaults so far for 2014, including 45 Chapter 11 bankruptcy filings, 12 missed interest payments, seven Chapter 15 bankruptcy filings, three controlled management requests, two each of concurso mercantil filings, Companies’ Creditors Arrangement Act filings, administrations, missed principal payments, missed principal and interest payments and bankruptcy filings and one of each of restructurings, judicial recovery requests, Chapter 7 bankruptcy filings, missed interest payments paid within the grace period, missed payments, reconstructions, reorganizations, insolvencies, distressed exchanges, defaults and liquidations.

Meanwhile, Standard & Poor’s reported four new filings for the week, bringing its year-to-date global corporate default tally to 39.

Specifically, S&P said Walter Energy Inc. completed a distressed exchange, swapping $25 million of its 9 7/8% senior unsecured notes due 2020 for 2.25 million shares of its common stock; Essar Steel Algoma Inc. failed to make a July 16 interest payment on its $385 million senior unsecured notes and announced a planned recapitalization transaction; NII Holdings missed interest payments on Aug. 15; and Alion Science and Technology Corp. completed a distressed exchange transaction.

The ratings agency said bankruptcy filings have been a driving force for global corporate defaults in 2014, accounting for 13 of the 39 defaults so far this year. In addition, S&P said 14 defaults were the result of missed interest and/or principal payments, seven resulted from distressed exchanges, and one each resulted from judicial reorganization and a creditor protection filing. The remaining three defaults were confidential.

Of the 39 defaults so far this year, S&P said 19 are based in the United States, 12 are based in the emerging markets, five are based in the other developed region, consisting of Australia, Canada, Japan and New Zealand, and three are based in Europe.

S&P said global default activity has been gradually accelerating over the past two weeks and, with four global corporate defaults this week, it looks like the trend could be accelerating.

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