Prospect News reports two new defaults for March 17-March 23, S&P five

By Caroline Salls

Pittsburgh, March 24 – Prospect News reported two new defaults for the period of March 17 through March 23.

Specifically, Prospect News reported Emerald Oil, Inc.’s Chapter 11 bankruptcy filing and Templar Energy LLC’s missed interest payment on its $1.45 billion second-lien term loan due Nov. 25, 2020.

Prospect News also reported a Chapter 11 filing made by Venoco, Inc. during the week, but Venoco had previously defaulted in connection with a Feb. 16 missed interest payment.

So far this year, Prospect News has reported 69 defaults, including 32 missed interest payments, 25 Chapter 11 filings, two each of insolvencies, Chapter 7 bankruptcy filings and missed interest and principal payments and one each of administrations, CCAA filings, Chapter 15 bankruptcy filings, judicial management requests, missed interest payments paid within the grace period and missed principal payments.

Meanwhile, Standard & Poor’s reported five new defaults for the week, raising its 2016 global corporate default tally to 31 issuers. S&P said this is the highest year-to-date tally at this point since 2009.

The defaults reported by the ratings agency for the week included:

• S&P lowered its corporate credit rating on Peabody Energy Corp. to D from CCC+ after the company said it will not comply with its financial covenants as of the end of March;

• S&P lowered its corporate credit rating on UCI Holdings Ltd. to SD from CCC after the company entered into a forbearance agreement with the holders of its 8 5/8% senior unsecured notes following its failure to make an interest payment on Feb. 16;

• S&P lowered its global scale corporate credit rating on Usinas Siderurgicas de Minas Gerais SA to SD from CCC+ after it reached a standstill agreement with the banks that hold most of its debt as part of a restructuring process;

• S&P lowered its corporate credit rating on American Media Inc. to SD from CCC+ after the company completed an exchange of $58.9 million of its existing 11˝% first-lien senior secured notes due 2017 for $78 million 7% senior secured second-lien notes due 2020; and

• S&P lowered its corporate credit rating on Templar Energy to SD from CCC- to reflect the company’s decision to skip the interest payment on the second-lien term loan and enter into a 30-day grace period while it negotiates a debt restructuring.

S&P said that of the 31 defaulting issuers so far in 2016, 14 defaulted because of missed interest payments, nine because of distressed exchanges, five after bankruptcy filings, two because of de facto restructurings and one because of a regulatory intervention.

Of the 31 defaulting issuers, 27 are based in the United States, three in emerging markets and one in the other developed nations, which include Australia, Canada, Japan and New Zealand.

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