Prospect News reports two new defaults for June 1 to June 8, S&P five

By Caroline Salls

Pittsburgh, June 10 – Prospect News reported two new defaults for the period of June 2 through June 8 in the form of Chapter 11 bankruptcy filings made by Hercules Offshore, Inc. and Warren Resources, Inc.

In addition, Prospect News reported Chapter 11 bankruptcy filings made by Seventy Seven Energy Inc. and UCI Holdings Ltd., as well as Puerto Rico Public Finance Corp.’s missed interest payment on its series 2012A commonwealth appropriation bonds. However, all three of those issuers had previously defaulted.

So far this year, Prospect News has reported 115 defaults, including 58 Chapter 11 bankruptcy filings, 33 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 said its global corporate default tally grew to 82 issuers so far in 2016 with the addition of five defaulters since its last report. S&P said the last time the global tally was higher by this point in the year was in 2009 when it reached 147 during the financial crisis.

S&P said two of the latest defaults reflected Linc USA GP’s and Hercules Offshore’s bankruptcy filings, and one default was confidential.

In addition, the ratings agency said it lowered its corporate credit rating on Bill Barrett Corp. to SD from B- after the company completed a distressed exchange of its senior unsecured notes due 2019 for common shares.

S&P also lowered its corporate credit rating on Far-Eastern Shipping Co. plc to SD from CC after the issuer failed to make a coupon payment on its senior secured eurobonds within the 30-day grace period that expired on June 3.

Of the 82 issuers that have defaulted so far in 2016, S&P said 34 defaulted because of missed principal and/or interest payments, 20 because of distressed exchanges, 11 after filing for bankruptcy, five because of debt exchanges, four because of de facto restructurings and one each because of a deferred interest payment, debt acceleration, regulatory intervention and debt moratorium. The remaining four were confidential.

S&P said 57 of the entities that have defaulted so far in 2016 are based in the United States, 15 in emerging markets, six in the other developed nations, including Australia, Canada, Japan and New Zealand, and four in Europe.

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