S&P reports three new global corporate defaults; 2014 tally up to 43

By Caroline Salls

Pittsburgh, Sept. 22 – Standard & Poor’s global corporate default tally rose to 43 issuers after S&P reported three new defaults last week, according to a report from the ratings agency.

Specifically, S&P said that American Media Inc.’s corporate credit rating was lowered to SD from CCC+ after the company exchanged $7.8 million of its 13½% second-lien senior secured notes due 2018 and $113.3 million of its 10% second-lien senior secured pay-in-kind notes due 2018 for equity; Waterford Gaming LLC’s ratings were lowered, including its corporate credit rating to D from CC, following a missed payment on the outstanding principal balance of its 8 5/8% senior unsecured notes at maturity; and Phones4U was downgraded to D from B- after it filed a petition for administration.

Accounting for 16 of the 43 defaults so far this year, S&P said missed interest or principal payments have overtaken bankruptcy filings, which have prompted 14 defaults as the most common reason for default in 2014. Of the remaining defaults, eight resulted from distressed exchanges, three were confidential, one stemmed from a judicial reorganization, and one was the result of a creditor protection filing.

Of the 43 issuers that have defaulted so far this year, the agency said 22 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 four are based in Europe.

As previously reported, Prospect News reported three defaults for the period of Sept. 11 through Sept. 17, including the Chapter 11 bankruptcy filing of NII Holdings, Inc., the Companies’ Creditors Arrangement Act filing of U.S. Steel Canada Inc. and the bankruptcy administration of Phones4U.

Prospect News previously reported a default of NII on Aug. 15 when the company announced its decision to not pay roughly $118.8 million of interest due Aug. 15 on senior notes issued by its subsidiaries NII Capital Corp. and NII International Telecom, SCA.

Prospect News has reported 101 defaults so far for 2014.

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