Prospect News reports six new defaults for June 9 to June 15, S&P five

By Caroline Salls

Pittsburgh, June 17 – Prospect News reported six new defaults for the period of June 9 through June 15.

Specifically, Prospect News reported Chapter 11 filings made by Peak Web LLC, Gulf Chemical & Metallurgical Corp. and Hastings Entertainment, Inc., missed interest payments on Forbes Energy Services Ltd.’s 9% senior notes due 2019 and Lightstream Resources Ltd.’s 9 7/8% second-lien secured notes and a missed principal payment on Jyoti Structures Ltd.’s non-convertible debentures.

So far this year, Prospect News has reported 123 defaults, including 62 Chapter 11 bankruptcy filings, 35 missed interest payments, seven 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, missed interest payments paid within the grace period and suspension of payments.

Meanwhile, Standard & Poor’s said its global corporate default tally grew to 87 issuers so far in 2016 with the addition of five defaulters since its last report.

S&P lowered its corporate credit rating on Chesapeake Energy Corp. to SD from CCC- to reflect its view that the debt-for-equity exchange on Chesapeake’s senior notes was a distressed exchange.

In addition, S&P lowered its corporate credit rating on Cenveo Inc. to SD from CC after the company announced that it will exchange about 80% of its 11½% senior unsecured notes due 2017 for less principal and interest than what was promised on the original securities.

The ratings agency downgraded Fieldwood Energy LLC to SD from CC following the company’s announcement that its Riverstone Holdings LLC financial sponsor purchased more than $640 million in par value of its second-lien term loan at a significant discount.

S&P also lowered its corporate credit rating on Harvest Operations Corp. to SD from CC after the issuer said it has completed a debt exchange proposal under which it exchanged a portion of its senior unsecured notes outstanding for new issuance. S&P views this transaction as a de facto restructuring.

Finally, the ratings agency lowered its corporate credit rating on Barminco Holdings Pty Ltd. to SD from B- following the company’s completion of its recent note repurchases at below par value.

Of the 87 issuers that have defaulted so far in 2016, S&P said 34 defaulted because of missed principal and/or interest payments, 24 because of distressed exchanges, 11 after filing for bankruptcy, five each because of debt exchanges and 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 60 of the entities that have defaulted so far in 2016 are based in the United States, 15 in emerging markets, eight in the other developed nations, including Australia, Canada, Japan and New Zealand, and four in Europe.

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