Prospect News reports two new defaults for Sept. 16-Sept. 21, S&P five

By Caroline Salls

Pittsburgh, Sept. 23 – Prospect News reported two new defaults for the period of Sept. 16 through Sept. 21.

Specifically, Prospect News reported HeSaLight A/S’s missed principal payment on its 7% senior secured bond issue 2014/2019 and ITT Educational Services, Inc.’s Chapter 7 bankruptcy filing.

In addition, Prospect News reported a restructuring of Templar Energy LLC’s $1.45 billion second-lien term loan due Nov. 25, 2020 and Swiber Holdings Ltd.’s missed interest payment on its 7¾% notes due 2017. However, Templar Energy and Swiber both previously defaulted.

So far this year, Prospect News has reported 172 defaults, including 83 Chapter 11 bankruptcy filings, 39 missed interest payments, eight missed principal payments, seven each of Chapter 15 bankruptcy filings and missed principal and interest payments, four each of Companies’ Creditors Arrangement Act filings, Chapter 7 bankruptcy filings and missed interest payments paid within the grace period, three restructurings, two each of insolvencies and CBCA filings and one each of administrations, judicial management requests, schemes of arrangement, plans of arrangement, debt arrangements, missed interest payments paid late, liquidations, mandataire ad hoc appointments and homologacions.

Meanwhile, Standard & Poor’s said the number of corporate defaults globally rose to 127 to date in 2016 after defaults this week from five issuers.

S&P lowered its corporate credit rating on Golfsmith International Holdings LP to D from CC after the issuer announced bankruptcy proceedings in the United States and Canada.

The agency also lowered its corporate credit rating on Basic Energy Services Inc. to D from CC after the company elected not to pay the interest payment on its 2019 notes upon expiration of the 30-day grace period and lowered its corporate credit rating on Chesapeake Energy Corp. to SD from CC following settlement of its below-par tender offer for its 2020 and 2023 senior note as a distressed transaction.

S&P said it lowered its corporate credit rating on Claire’s Stores Inc. to SD from after the issuer completed a debt exchange offer for its second-lien and senior unsecured notes.

The final default was confidential.

Of the 127 defaulters so far in 2016, S&P said 47 issuers defaulted because of missed principal and/or interest payments, 33 because of distressed exchanges, 16 upon bankruptcy filings, 12 were confidential, six each because of de facto restructurings and debt exchanges, two because of deferred interest payments, and one each defaulted because of debt acceleration, distressed restructuring, judicial reorganization, regulatory intervention and a debt moratorium.

The United States tops the list with 86, or 68%, of the defaults, so far this year, with 22 from emerging markets 10 from the other developed nations, including Australia, Canada, Japan and New Zealand and nine from Europe.

S&P said the default tally is 61% higher than the count at this time in 2015 and has surpassed the total number of defaults recorded in full-year 2015. The last time the global tally was higher at this point in the year was in 2009, when it reached 220 during the financial crisis.

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