Prospect News reports two new defaults for May 5 to May 11, S&P five

By Caroline Salls

Pittsburgh, May 13 – Prospect News reported two new defaults for the period of May 5 through May 11.

Specifically, Prospect News reported a Chapter 11 bankruptcy filing made by Vanguard Healthcare, LLC and Atlas Iron Ltd.’s filing of a scheme of arrangement.

In addition, Prospect News reported Chapter 11 bankruptcy filings made by LINN Energy, LLC, CHC Group Ltd./CHC Helicopter SA and Chaparral Energy, Inc., a Chapter 15 bankruptcy filing made by Kaisa Group Holdings Ltd. and a missed principal payment on Havila Shipping ASA’s senior secured callable bond issue 2010/2016. However, all of those companies had previously defaulted.

So far this year, Prospect News has reported 102 defaults, including 46 Chapter 11 bankruptcy filings, 33 missed interest payments, six 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, schemes of arrangement, missed interest payments paid late and missed interest payments paid within the grace period.

Meanwhile, Standard & Poor’s reported five new defaults for the week, raising its global corporate default tally to 62 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 this time in May.

The latest S&P defaults included the following:

• S&P lowered its corporate credit rating on Fairmount Santrol Inc. to SD from CCC+ after the company’s credit agreement was amended to allow the extension of the maturity date on about 89% of the principal amount of its outstanding tranche B-1 term loan to July 2018 from March 2017;

• S&P lowered its long-term corporate credit rating on RGL Reservoir Management Inc. to SD from CCC+ following the addition of amendments to its senior secured debt facilities that significantly changed the amount outstanding and the terms of the facility;

• S&P lowered its corporate credit rating on Claire’s Stores Inc. to SD from CCC after the issuer agreed with sponsor-related Apollo Global to exchange $174 million of its senior subordinated notes due 2017 for notes with similar terms with the exception that the company will make its June interest payment as a payment-in-kind and would have the option to also make its December 2016 interest payment that way;

• S&P lowered its long-term corporate credit rating on Atlas Iron to SD from CC after it completed its credit restructuring; and

• S&P lowered its global scale corporate credit rating on USJ Acucar e Alcool S/A to SD from CC after the company missed a May 9 interest payment on its unsecured bond due 2019.

Of the 62 defaulting issuers so far in 2016, S&P said 28 defaulted because of missed principal and/or interest payments, 13 because of distressed exchanges, six after bankruptcy filings, five because of debt exchanges, four 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 45 of the defaulting issuers are based in the United States, 10 in emerging markets, five in the other developed nations, which include Australia, Canada, Japan and New Zealand, and two in Europe.

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