Prospect News reports six new defaults for May 12 to May 18, S&P 10

By Caroline Salls

Pittsburgh, May 20 – Prospect News reported six new defaults for the period of May 12 through May 18.

Specifically, Prospect News reported Chapter 11 bankruptcy filings made by Dex Media, Inc., Constellation Enterprises LLC and Penn Virginia Corp. and missed interest payments on Seventy Seven Energy Inc.’s $650 million 6 5/8% senior notes due 2019, Consolidated Minerals Ltd.’s 8% senior secured notes due May 15, 2020 and Stone Energy Corp.’s 7˝% senior notes due 2022.

In addition, Prospect News reported Chapter 11 bankruptcy filings made by SandRidge Energy, Inc. and Breitburn Energy Partners LP, missed interest payments on Abengoa, SA’s €375 million of 7% senior notes due 2020, China Shanshui Cement Group Ltd.’s 6.2% medium-term debentures due 2017 and Paragon Shipping Inc.’s 8 3/8% senior notes due 2021, a missed principal payment on Yingli Green Energy Holding Co. Ltd.’s Baoding Tianwei Yingli New Energy Co. Ltd. medium-term notes and a Companies’ Creditors Arrangement Act filing made by Connacher Oil & Gas Ltd. However, all of those companies had previously defaulted.

So far this year, Prospect News has reported 110 defaults, including 50 Chapter 11 bankruptcy filings, 36 missed interest payments, six missed principal payments, four Companies’ Creditors Arrangement Act filings, three Chapter 15 bankruptcy filings, two each of missed principal and interest payments, insolvencies and Chapter 7 bankruptcy filings and one each of administrations, judicial management requests, schemes of arrangement, missed interest payments paid late and suspension of payments.

Meanwhile, Standard & Poor’s reported 10 new defaults for the week, raising its global corporate default tally to 72 issuers so far in 2016.

S&P defaults

The latest S&P defaults included the following:

• S&P lowered its corporate credit rating on Denbury Resources Inc. to SD from CC after it negotiated an agreement to exchange some of its senior subordinated notes for new second-lien notes and new common shares at a discount;

• S&P lowered its long-term corporate credit rating on Intelsat SA to SD from CCC, reflecting the issuer’s repurchase of about $400 million of its 2022 notes in the private secondary market and nearly $60 million via open market purchases;

• S&P lowered its corporate credit rating on Chesapeake Energy Corp. to SD from CCC following its debt-for-equity exchange on its 2.5% contingent convertible senior notes due 2037 and 6.5% notes due 2017;

• S&P lowered its long-term corporate credit rating on Permian Resources Holdings LLC to SD from CCC+ after the issuer said it had repurchased $203 million of its exchangeable junior subordinated notes due 2022 for $21.5 million in cash;

• S&P lowered its corporate credit and issue-level ratings on SandRidge Energy to D from CCC- following its bankruptcy filing;

• S&P lowered its long-term corporate credit rating on Breitburn to D from CC after its bankruptcy filing;

• S&P lowered its long-term corporate credit rating on Stone Energy to D from CCC- after its missed interest payment;

• S&P lowered its long-term corporate credit rating on Constellation Enterprises after its bankruptcy filing;

• S&P lowered its long-term corporate credit rating on Seventy Seven Energy to D from CC after its missed interest payment; and

• S&P lowered its long-term corporate credit rating on Tervita Corp. to D from B- after the issuer skipped the interest payment on its 11 7/8% senior subordinated notes due Nov. 15, 2018.

Of the 72 defaulting issuers so far in 2016, S&P said 31 defaulted because of missed principal and/or interest payments, 17 because of distressed exchanges, nine after bankruptcy filings, five because of debt exchanges, four because of de facto restructurings and one each because of deferred interest payments, regulatory intervention and a moratorium. The remaining three defaults were confidential.

So far in 2016, S&P said 53 of the defaulting issuers are based in the United States, 10 in emerging markets, six in the other developed nations, which include Australia, Canada, Japan and New Zealand, and three in Europe.

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