S&P marks three defaults in week ended Aug. 13, no bankruptcies

By Caroline Salls

Pittsburgh, Aug. 14 - Standard & Poor's reported three global corporate defaults for the week ended Aug. 13, all based in the United States and all resulting from distressed exchanges, according to a news release.

Prospect News' records also showed no bankruptcies or missed payments for the week. The most recent default recorded by Prospect News was Finlay Enterprise, Inc.'s Chapter 11 bankruptcy filing on Aug. 5.

Looking ahead, Affinity Group Holding, Inc. plans to defer the interest payment due Aug. 15 on its 10 7/8% senior notes due 2012, according to a 10-Q filed with the Securities and Exchange Commission.

Meanwhile, the three defaults recorded by S&P brought the ratings agency's year-to-date tally to 197.

S&P said the three defaults recorded in the week ended Thursday stemmed from distressed exchanges, bringing the year-to-date tally of distressed exchanges to 63.

So far this year, S&P has reported 67 defaults from missed interest payments and 52 from bankruptcy filings.

S&P said this week's defaulters were American Achievement Corp., Duane Reade Inc. and MXEnergy Holdings Inc.

By region, S&P's year-to-date default tallies now stand at 140 issuers in the United States, 11 issuers in Europe, 33 issuers in the emerging markets and 13 issuers in the other-developed region, which includes Australia, Canada, Japan and New Zealand.

Of the global corporate defaulters so far this year, S&P said:

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

• 16% of issues had recovery ratings of 5, for modest recovery prospects of 10% to 30%;

• 12% had recovery ratings of 4, or average recovery prospects of 30% to 50%;

• 11% had recovery ratings of 3, for meaningful recovery prospects of 50% to 70%;

• 11% of 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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