Fitch Analyzes First Lien Issues with Atypically Low Recovery Rates

NEW YORK--()--Low recovery rates for debt issues secured by a first lien on assets are unusual in U.S. bankruptcy cases, according to a new Fitch Ratings' report. An analysis of 181 defaulters in Fitch's bankruptcy case study database identified 25 cases with first lien loan or bond recoveries of less than 50%, including 12 cases where recoveries were below $0.30. Drivers and common themes in these cases were studied.

The Table of Contents is as follows:

--List of Outlier Issues and Recovery Rates

--Contractual or Structural Disadvantages

--Split Collateral

--Cyclical Trough

--Flawed Business Model --Secular Decline

--Outlier Issuers Compared With Broad Group

--Bankruptcy Case Outcomes

See Fitch special report First-Lien Issues with Poor Recovery Rates, dated Nov. 3, 2015.

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

First-Lien Issues with Poor Recovery Rates (Drivers and Common Themes of Outliers)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=872764

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Contacts

Fitch Ratings
Sharon Bonelli, +1-212-908-0581
Senior Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Media Relations
Alyssa Castelli, New York, +1-212-908-0540
alyssa.castelli@fitchratings.com

Contacts

Fitch Ratings
Sharon Bonelli, +1-212-908-0581
Senior Director
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Media Relations
Alyssa Castelli, New York, +1-212-908-0540
alyssa.castelli@fitchratings.com