Bangkok--4 Nov--Standard & Poor's
Three U.S.-based corporate issuers defaulted this week, raising the 2011 global corporate default tally to 39, said an article published today by Standard & Poor's Global Fixed Income Research, titled "Global Corporate Default Update (Oct. 28 - Nov. 2, 2011)."
Standard & Poor's Ratings Services lowered its ratings on MF Global Holdings Ltd. to 'D' after the company filed for Chapter 11. This is the first time a U.S.-based corporate issuer has defaulted from an investment-grade rating since the ratings on Washington Mutual Bank were lowered to 'D' after it was placed into FDIC receivership and simultaneously sold to JPMorgan Chase & Co. on Sept. 26, 2008.
The other two defaulters this week were homebuilder Hovnanian Enterprises Inc. and Native American casino operator River Rock Entertainment Authority. Standard & Poor's Ratings Services lowered its issuer credit rating on Hovnanian to 'SD' after the company completed a distressed tender offer, and the ratings on River Rock were lowered to 'D' following the issuer's failure to repay principal on its existing $200 million senior notes at maturity.
Of the total defaulters this year, 29 are based in the U.S., three are based in New Zealand, two are in Canada, and one each is in the Czech Republic, Greece, France, Israel, and Russia. Of the defaulters by this time in 2010, 53 were U.S.-based issuers, nine were from the other developed region (Australia, Canada, Japan, and New Zealand), eight were from the emerging markets, and two were European issuers.
Fifteen of this year's defaults were due to missed interest or principal payments and eight were due to distressed exchanges--both of which were among the top reasons for defaults in 2010. Bankruptcy filings followed with seven defaults, and regulatory actions accounted for three. Of the remaining defaults, one issuer failed to finalize refinancing on its bank loan, one issuer had its banking license revoked by its country's central bank, another was appointed a receiver, and three were confidential.
By comparison, in 2010, 28 defaults resulted from missed interest or principal payments, 25 from Chapter 11 and foreign bankruptcy filings, 23 from distressed exchanges, three from receiverships, one from a regulatory directive, and one from administration.
The report is available to subscribers of RatingsDirect on the Global Credit Portal at www.globalcreditportal.com. If you are not a RatingsDirect subscriber, you may purchase a copy of the report by calling (1) 212-438-7280 or sending an e-mail to
[email protected]. Ratings information can also be found on Standard & Poor's public Web site by using the Ratings search box located in the left column at www.standardandpoors.com. Members of the media may request a copy of this report by contacting the media representative provided.
Media Contact:
John Piecuch, New York (1) 212-438-1579,
[email protected]
Analyst Contacts:
Diane Vazza, New York (1) 212-438-2760