Prospect News records two new defaults for two weeks ended Dec. 3; S&P sees one

By Jennifer Lanning Drey

Savannah, Ga., Dec. 3 - Prospect News recorded two new defaults for the two-week period of Nov. 19 to Dec. 3 in the form of a missed interest payment by Palm Harbor Homes and a distressed exchange by Little Traverse Bay Bands of Odawa Indians.

Meanwhile, Standard & Poor's saw a new default on Nov. 19, bringing its year-to-date default tally to 75.

S&P's default was recorded by Local Insight Regatta Holdings, which filed for Chapter 11 bankruptcy.

By region, S&P's current default tallies stand at 52 in the United States, three in Europe, nine in 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 27 defaults, Chapter 11 and foreign bankruptcy filings are responsible for 23, distressed exchanges have accounted for 20, receiverships accounted for three and regulatory directives and administration accounted for one each.

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

• 41% of issues with available recovery ratings had ratings of 6, indicating the agency's expectation for negligible recovery of 0% to 10%;

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

• 10% had recovery ratings of 4, for average recovery prospects of 30% to 50%;

• 16% had recovery ratings of 3, for meaningful recovery prospects of 50% to 70%;

• 13% of the issues had recovery ratings of 2, indicating substantial recovery prospects of 70% to 90%; and

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

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