Prospect News, S&P each report seven new defaults for Dec. 14-Dec. 21

By Caroline Salls

Pittsburgh, Dec. 23 – Prospect News reported seven new defaults for the week of Dec. 15 through Dec. 21.

Specifically, Prospect News reported Chapter 11 bankruptcy filings made by Argon Credit LLC, Modular Space Corp., Dakota Plains Holdings, Inc., Lensar, Inc. and Optima Specialty Steel, Inc., South Gobi Resources Ltd.’s missed interest payment on its convertible debentures and PJSC Tatfondbank’s moratorium.

In addition, Prospect News reported DTEK Finance plc’s Chapter 15 bankruptcy filing. However, DTEK previously defaulted in connection with a March 29, 2016 missed interest payment.

So far this year, Prospect News has reported 225 defaults, including 107 Chapter 11 bankruptcy filings, 47 missed interest payments, 11 each of Chapter 15 bankruptcy filings, missed principal payments and missed principal and interest payments, six Chapter 7 bankruptcy filings, five each of Companies’ Creditors Arrangement Act filings and missed interest payments paid within the grace period, three restructurings, two each of insolvencies, administrations, liquidations and recapitalizations and one each of bankruptcies, CBCA filings, moratoriums, judicial management requests, schemes of arrangement, plans of arrangement, debt arrangements, missed interest payments paid late, suspensions of payments, protective shields and homologaciones.

S&P defaults

Meanwhile, Standard & Poor’s also reported seven new defaults for the week, raising its global corporate default tally to 157 issuers so far in 2016.

S&P said the default count is almost 30% higher than at this time in 2015. The last time the global tally was higher at this point in the year was in 2009, when it reached 268 during the financial crisis.

The ratings agency’s latest default included:

• S&P lowered its corporate credit rating on iHeartMedia Inc. to SD from CCC after the issuer announced it would not repay $57.1 million of iHeartCommunications Inc.’s 5½% senior unsecured notes maturing Dec. 15;

• S&P lowered its corporate credit rating on Optima Specialty Steel to D from CC following Optima’s bankruptcy filing;

• S&P placed its issuer credit and financial strength ratings on Istmo Compania de Reaseguros Inc. under regulatory supervision after the company failed to execute a three-month plan to improve its financial position;

• S&P lowered its corporate credit rating on Sierra Hamilton LLC to D from CCC after the issuer entered into a 30-day-grace period to make interest payment on its senior secured notes due 2018. The agency said it expects Sierra Hamilton will not make the interest payment within the grace period and will instead seek a debt restructuring;

• S&P lowered its long-term and short-term counterparty credit ratings on Tatfondbank to D from CCC-, reflecting the regulatory intervention by the Central Bank of Russia after the issuer failed to meet its creditors’ claims for more than seven days, something we regard as a failure to meet financial obligations as a result of a liquidity crisis;

• S&P lowered its corporate credit and senior unsecured debt ratings on Illinois Power Generating Co. to D from CC as a result of the issuer’s Chapter 11 bankruptcy filing; and

• S&P lowered its long-term counterparty credit ratings on PrivatBank to R from B- after the Ukrainian government announced it had fully nationalized the bank, triggered by the National Bank of Ukraine’s decision to declare the bank insolvent and suspend the decision-making authority of the bank’s shareholders and managers.

By region, S&P said the United States accounts for the most defaults with 103, followed by 31 from emerging markets, 12 from Europe and 11 from the other developed nations, which includes Australia, Canada, Japan and New Zealand.

Of the 157 defaulters so far in 2016, S&P said 58 issuers defaulted because of missed principal/interest/coupon payments, 40 because of distressed exchanges, 20 upon bankruptcy filings, 14 were confidential, seven because of debt exchanges, six upon de facto restructurings, three each because of deferred interest payments, debt moratoriums and regulatory intervention and one each defaulted because of debt acceleration, distressed restructuring and judicial reorganization.

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