Halister News

--PAUL COX

(Bloomberg) -- Despite $2b of announced volume so far, June defaults unlikely to match the $3.4b level a year earlier, Fitch analysts led by Eric Rosenthal say in a report Thursday.

• May level was 2.3%, lowest since June 2015; this month to approach 2% with year-end forecast just under 3%
• Fitch sees ~$34b of volume this year, led by iHeartCommunications; YTD U.S. defaults have totaled $11.5b
  • iHeart bankruptcy would add 0.8 percentage point to the default level, sending media to almost 18%, Fitch says
  • Related story: IHeart Said to Plan Sixth Debt- Swap Extension as Talks Revive
• Energy default rate to continue falling from January peak of 19.7% and end year at ~2.5%
  • Energy secondary bid prices fall to 97.4, down ~200bps since Feb. 23 when crude topped $54/barrel
  • NOTE: California Resources Corp., Northern Oil & Gas Inc., W&T Offshore Inc., EV Energy Partners LP, Pioneer Energy Services, EXCO Resources Inc. and Sunshine Oilsands Ltd. on Fitch’s U.S. “bonds of concern” list
• Expected retail default rate of 9% driven by Claire’s Stores Inc. and Sears Holdings Corp.; rate drops to 4% without those names
  • NOTE: Claire’s, Sears, Nine West Holdings, Chinos Intermediate Holdings (J. Crew Group) and 99 Cents Only Stores on Fitch’s U.S. bonds of concern list
• Post-default prices climb to 55% of par, well above non-recessionary 47% average and highest since March 2015
  • NOTE: Claire’s, iHeart, Sears, CRC, W&T Offshore and 99 Cents Only have interest payments due today
  • Related story: See co. listings on Americas Distressed Watch

To contact the reporter on this story: Molly Smith in New York at msmith604@bloomberg.net To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net Rick Green

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