Prospect News records three new defaults for week; S&P marks two

By Caroline Salls

Pittsburgh, Oct. 8 - Prospect News reported three new defaults for the week ended Thursday in the form of missed payments.

Specifically, Prospect News reported a missed promissory note principal payment by Behringer Harvard Landmark LP, Raser Technologies, Inc.'s missed interest payment on its 8% convertible senior dues due 2013 and Angiotech Pharmaceuticals, Inc.'s missed interest payment on its 7¾% senior subordinated notes.

In addition, Prospect News reported that RT Holding missed an interest payment on its 9.8% bonds. RT Holding previously defaulted in May.

Meanwhile, Standard and Poor's marked two defaults for the week, bringing its year-to-date default total to 68. S&P's defaults included Angiotech's missed interest payment and a missed interest payment from U.S.-based retailer Loehmann's Holdings Inc.

By region, S&P's current 2010 default tallies stand at 46 in the United States, three in Europe, eight in the emerging markets and 11 in the other developed region, which includes Australia, Canada, Japan and New Zealand.

So far this year, missed interest or principal payments have accounted for 23 of S&P's defaults, Chapter 11 and foreign bankruptcy filings are responsible for 22, distressed exchanges have accounted for 18, receiverships account for three and regulatory directives and administration accounted for one each.

Of the global corporate defaulters so far in 2010, S&P said:

• 42% of issues with available recovery ratings had recovery ratings of 6, indicating the agency's expectation for negligible recovery of 0% to 10%;

• 12% of the issues had recovery ratings of 5, for modest recovery prospects of 10% to 30%;

• 8% had recovery ratings of 4, for average recovery prospects of 30% to 50%;

• 17% had recovery ratings of 3, for meaningful recovery prospects of 50% to 70%;

• 12% of the issues had recovery ratings of 2, indicating substantial recovery prospects of 70% to 90%; and

• 10% of issues had recovery ratings of 1, or very high recovery prospects of 90% to 100%.

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