Prospect News, S&P each report four new defaults for April 28-May 4

By Caroline Salls

Pittsburgh, May 6 – Prospect News reported four new defaults for the period of April 28 through May 4.

Specifically, Prospect News reported Chapter 11 bankruptcy filings made by Aeropostale, Inc., Fairway Group Holdings Corp. and CORE Entertainment Inc., as well as Government Development Bank for Puerto Rico’s missed principal payment on its series B 2011 senior notes.

In addition, Prospect News reported Ultra Petroleum Corp. and Midstates Petroleum Co., Inc.’s Chapter 11 bankruptcy filings. However, both of those companies had previously defaulted in connection with missed interest payments.

So far this year, Prospect News has reported 97 defaults, including 42 Chapter 11 bankruptcy filings, 34 missed interest payments, five missed principal payments, three each of Companies’ Creditors Arrangement Act filings and Chapter 15 bankruptcy filings, two each of missed principal and interest payments, insolvencies and Chapter 7 bankruptcy filings and one each of administrations, judicial management requests, missed interest payments paid late and missed interest payments paid within the grace period.

Meanwhile, Standard & Poor’s also reported four new defaults for the week, raising its global corporate default tally to 57 issuers so far in 2016. S&P said this is the highest tally of global defaults by this time in the year since during the financial crisis in 2009, when 67 defaults had been recorded by early May.

S&P said it lowered its corporate credit rating on White Star Petroleum LLC to SD from CCC after the company said it repurchased $148 million in face value of its 12% second-lien notes for $19.4 million in cash separate transactions, which the agency views as distressed exchanges.

In addition, S&P lowered its long-term corporate credit rating on Perpetual Energy Inc. to SD from CC and issue-level rating on the company’s senior unsecured notes to D from C after it completed a previously announced securities swap proposal to holders of its 8¾% senior unsecured notes due 2018 and 2019 for shares of Tourmaline Oil Corp.

The ratings agency said it also lowered its corporate credit rating on ION Geophysical Corp. to SD from CC and on its second-lien notes to D from CC following the company’s announcement that it closed on an exchange offer to holders of its 8 1/8% second-lien notes due 2018 for new 9 1/8% second-lien notes due 2021 and shares of common equity.

Finally, S&P lowered its corporate credit rating on Fairway to D from CCC- and its issue-level rating on the company’s senior secured credit facility to D from CC in light of the Chapter 11 bankruptcy filing.

Of the 57 defaulting issuers so far in 2016, S&P said 27 defaulted because of missed principal and/or interest payments, 11 because of distressed exchanges, six after bankruptcy filings, four because of debt exchanges, three because of de facto restructurings and one each because of deferred interest payments, regulatory intervention and a moratorium. The remaining three defaults were confidential.

So far in 2016, S&P said 43 of the defaulting issuers are based in the United States, nine in emerging markets, three in the other developed nations, which include Australia, Canada, Japan and New Zealand, and two in Europe.

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