Prospect News reports three new defaults for May 14-May 20, S&P five

By Kali Hays

New York, May 22 – Prospect News reported three new defaults for the period of May 14 through May 20.

Specifically, Prospect News reported the Chapter 11 bankruptcy filings of El Paso Children’s Hospital Corp. and Life Partners Holdings, Inc. and Colt Defense LLC’s $10.9 million missed interest payment on its 8¾% unsecured notes due 2017.

Prospect News has reported 77 defaults so far in 2015, including 33 Chapter 11 bankruptcy filings, 13 missed interest payments, nine Companies’ Creditors Arrangement Act filings, seven distressed exchanges, four Chapter 15 bankruptcy filings, three bankruptcy filings, two missed principal payments and one each of judicial recovery requests, reorganizations, missed interest payments paid within the grace period, missed principal and interest payments, defaults and schemes of arrangement.

Meanwhile, Standard & Poor’s reported five defaults for the period, raising its year-to-date default tally to 41.

Specifically, S&P said it lowered the credit rating of Patriot Coal Corp. to D from B- following the company’s announcement that it had filed for Chapter 11 bankruptcy. The credit rating of Colt Defense LLC was also lowered to D from CC after its missed interest payment.

S&P also lowed the corporate credit rating of Far-Eastern Shipping Co. plc to SD from CC after a cash tender offer for the company’s senior secured notes resulted in some meaningful losses in principal when existing investors received a combination of cash and new debt that was less than what they were promised under the original securities.

The fourth and fifth S&P defaults were Tunica-Biloxi Gaming Authority, which had its credit rating lowered to D from CCC after the company failed to make a $6.75 million interest payment to senior unsecured noteholders on May 15, and SandRidge Energy Inc., which had its credit rating lowered to SD from CCC+ following the completion of an agreement with some senior unsecured noteholders for a common stock exchange.

Of the 41 issuers that have defaulted so far this year, S&P said 26 are based in the United States, eight in the emerging markets, five in Europe and two in the other developed nations, including Australia, Canada, Japan and New Zealand.

So far in 2015, S&P said 15 issuers defaulted as a result of missed interest or principal payments, 10 due to distressed exchanges, 11 from bankruptcy filings and two because of regulatory intervention. The other three defaults were confidential.

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