Jan 4 - The corporate credit rating on U.S.-based LBI Media Inc. has been
lowered to 'selective default (SD), marking the first global corporate default
recorded in 2013, said an article published today by Standard & Poor's Global
Fixed Income Research, titled, ""here
"This action took place' yesterday after LBI Media's parent company, LBI Media
Holdings Inc., and some lenders agreed to a distressed exchange transaction on
Dec. 31, 2012," said Diane Vazza, head of Standard & Poor's Global Fixed
Income Research. The distressed exchange comprises about $174.6 million in
senior subordinated notes due in 2017 for new 11.5%/13.5% payment-in-kind
second-priority secured subordinated toggle notes due in 2020 and warrants.
LBI Media Inc. previously defaulted in October 2012 after it missed an
interest payment on its senior discount notes. With this action occurring on
Jan. 3, the 2013 global corporate default tally begins one day earlier than
the 2012 tally. Last year, 47 of the 82 defaulters were based in the U.S., 22
in the emerging markets, nine in Europe, and four in the other developed
region (Australia, Canada, Japan, and New Zealand).
Missed payments and bankruptcy filings tied for the top reason for default in
2012, with 23 issuers each. Of the remaining defaults, distressed exchanges
accounted for 17, 13 were are confidential, and six entities defaulted for
various other reasons (see table 2). In 2011, 21 issuers defaulted because of
missed interest or principal payments, and 13 defaulted because of bankruptcy
filings--both of which were among the top reasons for defaults in 2010.
Distressed exchanges--another top reason for default in 2010--followed with 11
defaults in 2011. Of the remaining defaults, two issuers failed to finalize
refinancing on bank loans, two were subject to regulatory action, two were
confidential, one had its banking license revoked by its country's central
bank, and one was appointed a receiver.