Fitch: Energy, Metals/Mining Leveraged Loan Defaults Keep Coming

NEW YORK--(BUSINESS WIRE)-- March marked the 11th consecutive month that the institutional leveraged loan universe recorded defaults in the beleaguered energy or metals/mining sectors, according to Fitch Ratings.

Southcross Holdings' filing on Monday ended a six week reprieve of energy and metals/mining defaults in the leveraged loan space since Paragon's filing on Feb. 14th, 2016.

The pace of defaults could pick up again as a few other energy and metals/mining companies remain on the brink, including Peabody Energy, Foresight Energy and Templar Energy. Filings by Peabody and Foresight would propel the metals/mining sector's trailing 12-month (TTM) leveraged loan default rate to roughly 32%, up from 12.9% at end-2015. Meanwhile, the energy sector TTM rate would surpass 12% with defaults for Southcross Holdings and Templar Energy.

"For some companies with commodity price exposures, it's not a question of if they will file, but when," said Eric Rosenthal, Senior Director of Leveraged Finance.

The U.S. institutional term loan market is less affected by the energy and metals/mining sectors, which account for 6%, versus the high yield market where the exposure is 25%.

Sports Authority, Aspect Software and Town Sports International along with Southcross Holdings comprised the $1.4 billion in institutional loan defaults in March. February included defaults for Paragon and Noranda Aluminum Holdings Corp., tallying $1.1 billion.

Despite the energy and metals/mining challenges, institutional term loan issuance is slightly ahead of last year's issuance, at $23 billion. CLO volume has been slightly more impacted, with less than $3 billion compiled through end-February versus $15 billion a year ago.

The full report, "Leveraged Loan Default Insight: Energy, Metals/Mining Defaults Continue; Secondary Bid Levels Strengthen," is available at www.fitchratings.com

Additional information is available at 'www.fitchratings.com'.

Fitch U.S. Leveraged Loan Default Insight (Energy, Metals/Mining Defaults Continue; Secondary Bid Levels Strengthen)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=879232

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160329006032/en/

Fitch Ratings
Eric Rosenthal
Senior Director
Leveraged Finance
+1-212-908-0286
Fitch Ratings, Inc.
33 Whitehall St.
New York, NY 10004
or
Michael Paladino, CFA
Managing Director
Leveraged Finance
+1-212-908-9113
or
Sharon Bonelli
Senior Director
Leveraged Finance
+1-212-908-0581
or
Media Relations:
Alyssa Castelli, +1 212-908-0540
[email protected]

Source: Fitch Ratings

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Dubai Added Nearly 72,000 New Companies in a Single Year as Founder Relocation Accelerates, Says Savvy Setup
• Genco Shipping & Trading Limited Comments on Diana Shipping Inc.’s Misleading Tender Offer Disclosures
• Medline announces Prime Vendor agreement with Allina Health