distressed company alert · rating on camposol s.a. to ccc from b- and its $200 million senior...

the distressed company alert

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Volume 14, No. 7 | February 19, 2016 Page | 1

VOLUME 14, NO. 7 | FEBRUARY 19, 2016

New Generation Research’s weekly newsletter that monitors and reports on companies showing signs of financial distress.

PAGE COMPANY CATEGORY 6 Avaya Inc. Low Rating 7 Camposol Holding Limited Low Rating 8 Denver Parent Corp. (Venoco, Inc.) Miscellaneous/ Low Rating 9 Energy XXI Ltd Miscellaneous 10 Fairway Group Holdings Corp. Low Rating 11 Heat Biologics, Inc. Audit Concern 12 Maxcom Telecomunicaciones S.A.B. de C.V. Low Rating 13 NeuroMetrix, Inc. Audit Concern 14 Payless Inc. Low Rating 15 Town Sports International Holdings, Inc. Low Rating 16 UCI Holdings Limited Miscellaneous/ Low Rating 17 WS Packaging Group, Inc. Low Rating

18 Profile Updates 24 Watch List 25 Bankruptcies

Avaya Inc.

On February 12, 2016, Moody’s Investors Service downgraded Avaya Inc.’s corporate family rating to Caa1 from B3, its probability of default rating to Caa1-PD from B3-PD, its first lien debt facilities to B2 from B1 and its second lien notes to Caa2 from Caa1. According to Moody’s, the downgrade was driven by continued declines in performance as well as concerns about the sustainability of the current capital structure including its ability to refinance $600 million of debt maturing in 2017. Moody’s further states that the negative outlook reflects Moody’s expectation for declining revenues and concern that the Company may face challenges in refinancing 2017 and 2018 debt maturities. Camposol Holding Limited

On February 17, 2016, Standard & Poor’s Ratings Services lowered its corporate credit rating on Camposol S.A. to CCC from B- and its $200 million senior unsecured notes were lowered to CCC from B-. According to Standard & Poor’s, the downgrade reflects the increased likelihood that the Company could default within the next 12 months without an unforeseen positive development that could mitigate the Company’s refinancing risk, given the significant debt maturities related to its $200 million senior unsecured notes due in February 2017. Standard & Poor’s further states that the negative outlook reflects their view that Camposol could be highly vulnerable to nonpayment over the next few months and the potential that the Company could pursue a debt exchange or similar transaction that S&P would view as distressed.

Profile Highlights on next page…




Profile Highlights, continued Denver Parent Corp. (Venoco, Inc.)

On February 16, 2016, Venoco, Inc. announced that it has chosen not to make the $13.7 million semi-annual interest payment due February 16, 2016 on its 8.875% senior unsecured notes as the Company considers its options to reduce debt and strengthen the Company’s financial position. An event of default would occur if the interest payment isn’t made by March 17, 2016, 30 days after February 16. Venoco has sufficient liquidity to continue normal oil and gas operations and meet its regular financial obligations for some time. However, the declining price of oil and the ongoing closure of Plains All-American pipeline have presented significant challenges. The down pipeline, for which there is no certain restart date, has resulted in the curtailment of more than 50% of Venoco’s production.

On February 17, 2016, Standard & Poor’s Ratings Services lowered its corporate credit ratings on Venoco, Inc. and parent company Denver Parent Corp. to D from CCC+. The Companies senior unsecured notes were also lowered, to D from CCC-. “The ‘D’ rating reflects Venoco’s announcement that it has elected not to make the interest payment on its 8.875% senior notes due 2019,” said Standard & Poor’s credit analyst Aaron McLean. “We don’t believe the company will not make this payment before the 30-day grace period ends on March 17, 2016,” he added.

Energy XXI Ltd In Form 8-K filed on February 16,

2016, Energy XXI Ltd announced financial and operating results for the three months ended December 31, 2015 and provided an operations update. As Energy XXI continues its discussions with its lenders, the Company elected not to make an interest payment that was due on February 16, 2016, commencing a 30-day grace period. If the Company does not make the interest payment or restructure the debt before the grace period expires, the holders of the notes could accelerate amounts due under the notes and could also result in default and acceleration under other debt instruments.

On February 16, 2016, Standard & Poor’s Ratings Services lowered its corporate credit ratings on Energy XXI Ltd and its subsidiary EPL Oil & Gas to D from CCC+, its second-lien debt to D from B- and its unsecured debt to D from CCC-. “The ‘D’ rating reflects Energy XXI’s announcement that it has elected not to make the interest payment on its 8.25% senior notes due 2018, and our belief that the company will not make this payment before the 30-day grace period ends,” said Standard & Poor’s credit analyst Michael Tsai. “We believe the company will likely reorganize under Chapter 11,” he added.

On February 18, 2016, Fitch Ratings downgraded Energy XXI Ltd (EXXI) and Energy XXI Gulf Coast, Inc.’s (EGC) long-term Issuer Default Ratings to ‘C’ following the non-payment of interest due February 16 on EPL Oil & Gas’ (EPL) unsecured notes due 2018. EPL is a wholly-owned subsidiary of EGC. Fitch believes that EXXI’s capital structure is unsustainable at the current oil & natural gas price deck, and that the potential for debt exchanges or restructuring will be elevated over the next six months.

Profile Highlights continued on next page…




Profile Highlights, continued Fairway Group Holdings Corp.

On February 17, 2016, Moody’s Investors Service downgraded Fairway Group Acquisition Company’s corporate family rating to Caa2 from Caa1, its probability of default rating to Caa2-PD from Caa1-PD and its $267 million senior secured term loan and $40 million senior secured revolving credit facility, both to Caa2 from Caa1. “Fairway’s operating performance and liquidity continues to be weak and we expect the company to breach its financial covenants in the fourth quarter ending April 3, 2016,” Moody’s Senior Analyst Mickey Chadha stated. “Although Fairway can exercise equity cure rights or seek some form of covenant relief from lenders to avoid default, any such cure or relief without the larger capital infusion that the company is actively exploring would only be temporary as its current capital structure is unsustainable and could result in some form of distressed exchange,” Chadha further stated. Heat Biologics, Inc.

In Form 10-K filed on February 18, 2016, Heat Biologics, Inc.’s auditor, BDO USA, LLP, raised substantial doubt about the Company’s ability to continue as a going concern. According to BDO USA, the Company has suffered recurring losses from operations and has not generated significant revenue or positive cash flows from operations. To meet its capital needs, the Company is considering multiple alternatives, including, but not limited to, additional equity financings, debt financings and/or funding from partnerships or collaborations. There can be no assurance that the Company will be able to complete any such transactions on acceptable terms or otherwise. If the Company is unable to obtain the necessary capital, it will need to pursue a plan to scale back its operations, license or sell its assets, seek to be acquired by another entity and/or cease operations.

Maxcom Telecomunicaciones S.A.B. de C.V.

On February 17, 2016, Standard & Poor’s Ratings Services lowered its corporate credit rating on Maxcom Telecomunicaciones S.A.B. de C.V. to CCC+ from B- and its senior secured notes rating to CCC+ from B-. According to Standard & Poor’s, the downgrade reflects Maxcom’s weaker credit metrics during 2015, which isn’t in line with earlier expectations. Maxcom’s commercial strategies to increase its participation in the commercial segment didn’t turn out as expected, resulting in weak sales performance, and declining revenues, revenue generating units (RGUs) and EBITDA margins. Standard & Poor’s further states that they are also uncertain about the sustainability of its business model due to high competitive pressures from the entrance of AT&T, the merger of Axtel and Alestra, and existing larger and better capitalized telecom and cable companies. NeuroMetrix, Inc.

In Form 10-K filed on February 12, 2016, NeuroMetrix, Inc.’s auditor, Pricewater-houseCoopers LLP, raised substantial doubt about the Company’s ability to continue as a going concern. According to Pricewater-houseCoopers, the Company has suffered recurring losses from operations and negative cash flows from operating activities. The Company continues to face significant challenges and uncertainties and, as a result, the Company’s available capital resources may be consumed more rapidly than currently expected due to (a) decreases in sales and the uncertainty of future revenues; (b) changes the Company may make to the business that affect ongoing operating expenses; (c) changes the Company may make in its business strategy; (d) regulatory developments affecting the Company’s existing products; (e) changes the Company may make in its research and development spending plans; and (f) other items affecting the Company’s forecasted level of expenditures and use of cash resources. Profile Highlights continued on next page…




Profile Highlights, continued Payless Inc.

On February 12, 2016, Moody’s Investors Service downgraded Payless Inc.’s corporate family rating to B3 from B2, its probability of default rating to B3-PD from B2-PD and the Company’s $520 million 1st lien term loan due 2021 and $145 million 2nd lien term loan due 2022 were also downgraded to B2 and Caa1, respectively. According to Moody’s, the downgrades reflect weaker than anticipated operating performance and Moody’s expectation that modest improvements to the Company’s operating performance over the next 12-24 months will be insufficient to return credit metrics back in line with the B2 rating category. Moody’s states that Payless’ liquidity is weak, driven by Moody’s expectation for negative free cash flow over the next 12-18 months combined with an already elevated estimated level of borrowings on the Company’s $300 million ABL revolving credit facility expiring in 2019. Town Sports International Holdings, Inc.

On February 16, 2016, Moody’s Investors Service downgraded Town Sports International Holdings, Inc.’s corporate family rating to Caa2 from B3, its probability of default rating to Caa2-PD from B3-PD and its senior secured bank facility rating to Caa2 from B3. According to Moody’s, the downgrade of Town Sports’ CFR reflects the Company’s continued overall and comparable-club revenue declines that have further weakened operating metrics, resulting in sustained negative free cash flow generation and an untenable capital structure. Moody’s further states that the negative outlook reflects Moody’s expectation that operating performance will continue to weaken over the next 12 months, with little to no free cash flow generation until the Company stabilizes its top-line and reverses negative trends in member attrition.

UCI Holdings Limited On February 16, 2016, UCI Holdings

Limited announced that its wholly-owned subsidiaries, UCI International LLC and UCI Acquisition Holdings (No.3) Corp., have elected to exercise the grace period with respect to the $17,250,000 interest payment due on its 8.625% senior unsecured notes. Under the terms of the indenture governing the Notes, the Company has a 30 day grace period for interest payments.

On February 17, 2016, Standard & Poor’s Ratings Services lowered the corporate credit rating on UCI Holdings Limited to CCC from CCC+ and, as a consequence, lowered the issue-level rating on the Company’s unsecured debt to a CCC- from CCC. “The downgrade reflects our view that there is at least a one-in-two likelihood of default within the next 12 months,” said Standard & Poor’s credit analyst Lawrence Orlowski. “UCI’s announcement yesterday indicating its intent to exercise its grace period with respect to a $17.25 million interest payment due on its 8.625% senior unsecured notes raises questions as to the likelihood that it will meet its debt obligation.”

Profile Highlights continued on next page…




Profile Highlights, continued WS Packaging Group, Inc.

On February 16, 2016, Standard & Poor’s Ratings Services lowered its corporate credit rating on W/S Packaging Holdings Inc. to CCC from B and its senior secured credit facility, which includes its term loan and revolving credit facility, were lowered to CCC+ from B+. According to Standard & Poor’s, it is highly likely that the Company will be unable to service its debt obligations if it is unable to improve its free cash flow and obtain an amendment to its credit agreement to address tighter financial covenants in the next few quarters. “The negative outlook reflects our view that the company is at risk of violating its financial covenant and not meeting its scheduled principal and interest payments if operating performance does not improve significantly and the company does not obtain a timely amendment to its credit agreement,” said Standard & Poor’s credit analyst Christopher Corey.

On February 18, 2016, Moody’s

Investors Service downgraded the corporate family rating of W/S Packaging Group, Inc. to Caa2 from B3, its probability of default rating to Caa3-PD from Caa1-PD and the ratings on the Company’s senior secured credit facilities were downgraded to Caa1 from B2. According to Moody’s, the downgrade reflects weaker-than-expected operating performance in the first two quarters of fiscal 2016 that prompted an equity cure to avoid a covenant breach. The downgrade also reflects expectations that liquidity will remain weak as the covenant steps down again in March and December of 2016, leaving little headroom for negative variance in operating performance.




Category: Low Rating

Avaya Inc. 4655 Great America Parkway Santa Clara, CA 95054 908 953-6000 Officers: Kevin J. Kennedy -- C.E.O., President David Vellequette -- S.V.P., C.F.O.

Federal Tax ID: 22-3713430 SIC: 3661 Telephone and Telegraph Apparatus Employees: 11,701 Company Website: www.avaya.com Auditor: PricewaterhouseCoopers LLP

Securities: 10 1/2% 2nd Lien Secured Notes due 2021; $1,384,244,110 outstanding (CUSIP: 053499AJ8) 7% Senior Senior Notes due 2019; $1,009,000,000 outstanding (CUSIP: 053499AG4) 9% Senior Notes due 2019; $290,000,000 outstanding (CUSIP: 053499AH2)

Bank Debt: First Lien Sr. Secured Term B7 Loan due 2020, $2,120.0 million / First Lien Sr. Secured Term B3 Loan due 2017, $616.0 million / First Lien Sr. Secured Term B6 Loan due 2018, $537.0 million / First Lien Sr. Secured ABL Revolver due 2020, $335.0 million / First Lien Sr. Secured Revolver due 2016, $200.0 million / First Lien Sr. Secured ABL Revolver due 2020, $150.0 million Business: Avaya Inc., together with its subsidiaries, provides contact center, unified communications and networking products and services worldwide. The Company operates through three segments: Global Communications Solutions (GCS), Avaya Networking (Networking) and Avaya Global Services (AGS). The Company serves financial services, manufacturing, retail, transportation, energy, media and communications, healthcare, education and government industries directly, as well as through a network of alliance partners, distributors, dealers, value-added resellers, telecommunications service providers and system integrators. Avaya Inc. is a subsidiary of Avaya Holdings Corp. Balance Sheet: ($millions) 09/30/2015 09/30/2014Total Current Liabilities $1,652.00 $1,672.00Total Long Term Debt $5,960.00 $5,949.00Total Liabilities $10,240.00 $10,271.00Total Current Assets $1,372.00 $1,499.00Total Assets $6,862.00 $7,202.00 Income Statement: ($millions, except per share data) 09/30/2015 09/30/2014 09/30/2013 Period 12 months ending 12 months ending 12 months ending Revenue $4,081.00 $4,371.00 $4,578.00 Net Income $-144.00 $-231.00 $-364.00 Event: On February 12, 2016, Moody’s Investors Service downgraded Avaya Inc.’s corporate family rating to Caa1 from B3, its probability of default rating to Caa1-PD from B3-PD, its first lien debt facilities to B2 from B1 and its second lien notes to Caa2 from Caa1. According to Moody’s, the downgrade was driven by continued declines in performance as well as concerns about the sustainability of the current capital structure including its ability to refinance $600 million of debt maturing in 2017. Source: Moody’s / Profile Number: 678-5056





Camposol Holding Limited Kanika International Business Center 6th Floor Profiti Ilia No 4 Germasogeia Limassol, 4046, Cyprus Officers: Samuel B.D. Coriat -- Chairman & C.E.O. Maria Cristina Couturier -- C.F.O.

SIC: 5140 Groceries and Related Products Employees: 13,000 Company Website: www.camposol.com.pe Auditor: PricewaterhouseCoopers LLP

Securities: 9 7/8% Senior Notes due 2017; $200,000,000 outstanding (CUSIP: 134638AA3)

Business: Camposol Holding Limited, an agro industrial company, engages in harvesting, processing and marketing agricultural products primarily in Peru. The Company’s products include avocados, blueberries, asparagus, table grapes, mangos, mandarins, pomegranates, artichokes, peppers, shrimps, tangerines and piquillos. It also exports its products as fresh, preserved, or frozen products to the European Union, the United States and Asia. The Company was formerly known as Camposol Holding PLC and changed its name to Camposol Holding Limited in April 2014. Camposol S.A. is a subsidiary of Camposol Holding Limited. Balance Sheet: ($millions) 12/31/2014 12/31/2013Total Current Liabilities $131.60 $109.70Total Long Term Debt $199.60 $125.60Total Liabilities $377.70 $284.40Total Current Assets $223.20 $178.30Total Assets $676.10 $610.20 Income Statement: ($millions, except per share data) 12/31/2014 12/31/2013 12/31/2012 Period 12 months ending 12 months ending 12 months ending Revenue $267.60 $231.20 $183.20 Net Income $-34.00 $31.30 $16.80 Earnings Per Share $-1.24 $1.15 $0.60 Event: On February 17, 2016, Standard & Poor’s Ratings Services lowered its corporate credit rating on Camposol S.A. to CCC from B- and its $200 million senior unsecured notes were lowered to CCC from B-. According to Standard & Poor’s, the downgrade reflects the increased likelihood that the Company could default within the next 12 months without an unforeseen positive development that could mitigate the Company’s refinancing risk, given the significant debt maturities related to its $200 million senior unsecured notes due in February 2017. Source: S&P Profile Number: 678-5973




Category: Miscellaneous

Denver Parent Corp. (Venoco, Inc.) 370 17th Street, Suite 3900 Denver, CO 80202 303 626-8300 Officers: Timothy Marquez -- C.E.O., DPC Mark A. DePuy -- C.E.O., Venoco & Pres. & C.O.O. DPC Scott M. Pinsonnault -- C.F.O., DPC & Venoco

Federal Tax ID: 44-0821005 SIC: 1311 Crude Petroleum and Natural Gas Employees: 158 Company Website: www.venocoinc.com Auditor: Ernst & Young LLP

Securities: 12 1/4% PIK Senior Notes due 2018 ; $323,040,000 outstanding (DPC) (CUSIP: 249375AB2) 8 7/8% Senior Notes due 2019; $308,220,000 outstanding (Venoco) (CUSIP: 92275PAF6)

Bank Debt: First Lien Sr. Secured Term Loan due 2017, $75.0 million (Venoco) Business: Denver Parent Corp. (DPC), through its subsidiary, Venoco, Inc., engages in the acquisition, exploration, exploitation, and development of oil and natural gas properties primarily in offshore and onshore California. It holds interests in South Ellwood field, Santa Clara Federal Unit, Dos Cuadras field, Beverly Hills West field, and onshore Monterey shale formation in Southern California. As of December 31, 2014, the Company had net proved reserves of approximately 40.4 million barrels of oil equivalents. Balance Sheet: ($millions) 12/31/2014 12/31/2013Total Current Liabilities $40.10 $96.34Total Long Term Debt $840.07 $953.50Total Liabilities $911.16 $1,113.14Total Current Assets $86.96 $51.22Total Assets $620.95 $736.72 Income Statement: ($millions, except per share data) 12/31/2014 12/31/2013 12/31/2012 Period 12 months ending 12 months ending 12 months ending Revenue $224.21 $317.50 $356.52 Net Income $84.57 $-28.44 $-49.50 Event: On February 16, 2016, Venoco, Inc. announced that it has chosen not to make the $13.7 million semi-annual interest payment due February 16, 2016 on its 8.875% senior unsecured notes as the Company considers its options to reduce debt and strengthen the Company’s financial position. The declining price of oil and the ongoing closure of Plains All-American pipeline have presented significant challenges. Source: Press Release Profile Number: 678-5737





Energy XXI Ltd Canon’s Court, Victoria St., P.O. Box HM1179 Hamilton, HM EX 441 295-2244 Officers: John D. Schiller, Jr. -- Chairman & C.E.O. Antonio de Pinho -- President Bruce W. Busmire -- C.F.O.

Federal Tax ID: 98-0499286 SIC: 1311 Crude Petroleum and Natural Gas Employees: 378 Company Website: www.energyxxi.com Auditor: BDO USA, LLP

Securities: Ticker: EXXI Exchange: NASDAQ Common Stock; 94,966,655 shares outstanding as of September 18, 2015 (CUSIP: BMG100821401) 3% Senior Convertible Notes due 2018; $400,000,000 outstanding (CUSIP: 29274UAB7) 8 1/4% Senior Notes due 2018; $510,000,000 outstanding (CUSIP: 29274UAN5) Business: Energy XXI Ltd, previously known as Energy XXI (Bermuda) Ltd., engages in the acquisition, exploration, development, and operation of oil and natural gas properties onshore in Louisiana and Texas, and on the Gulf of Mexico. As of June 30, 2015, the Company had net proved reserves of 183.5 million barrels of oil equivalent. It operated or had an interest in 567 gross producing wells on 388,199 net developed acres, including interests in 52 producing fields. Energy XXI Gulf Coast, Inc. operates as a subsidiary of Energy XXI Ltd. Balance Sheet: ($millions) 06/30/2015 06/30/2014Total Current Liabilities $359.00 $699.90Total Long Term Debt $4,597.00 $3,744.60Total Liabilities $5,419.60 $5,606.90Total Current Assets $968.90 $457.50Total Assets $4,690.80 $7,341.50 Income Statement: ($millions, except per share data) 06/30/2015 06/30/2014 06/30/2013 Period 12 months ending 12 months ending 12 months ending Revenue $1,170.00 $1,240.10 $1,180.40 Net Income $-2,433.80 $18.10 $180.80 Earnings Per Share $-25.97 $0.09 $2.14 Event: In Form 8-K filed on February 16, 2016, Energy XXI Ltd announced financial and operating results for the three months ended December 31, 2015 and provided an operations update. As Energy XXI continues its discussions with its lenders, the Company elected not to make an interest payment that was due on February 16, 2016, commencing a 30-day grace period. If the Company does not make the interest payment or restructure the debt before the grace period expires, the holders of the notes could accelerate amounts due under the notes and could also result in default and acceleration under other debt instruments. Source: Form 8-K Profile Number: 678-4994





Fairway Group Holdings Corp. 2284 12th Avenue New York, NY 10027 646 616-8000 Officers: John E. Murphy -- Chairman, C.E.O. & Co-President Edward C. Arditte -- Co-President & C.F.O.

Federal Tax ID: 74-1201087 SIC: 5411 Grocery Stores Employees: 4,300 Company Website: www.fairwaymarket.com Auditor: Grant Thornton LLP

Securities: Ticker: FWM Exchange: NASDAQ Common Stock; 29,596,880 shares outstanding as of May 15, 2015 (CUSIP: 30603D109)

Bank Debt: First Lien Sr. Secured Term B Loan due 2018, $274.3 million / First Lien Sr. Secured Revolver due 2018, $274.3 million Business: Fairway Group Holdings Corp., together with its subsidiaries, operates as a food retailer in the United States. The Company offers fresh produce; Deli products, such as sandwiches, side dishes, toppings, platters, snacks, and main dishes; specialty and gourmet products; cheese; meat and chicken products; seafood products; bakery products comprising cookies, tarts, cupcakes, baguettes, and bagels; coffee; and kosher products. It operates 15 locations in New York, New Jersey, and Connecticut, including 4 Fairway Wines & Spirits locations. Fairway Group Acquisition Company is a wholly-owned subsidiary Fairway Group Holdings Corp. Balance Sheet: ($millions) 03/30/2015 03/30/2014Total Current Liabilities $57.85 $57.18Total Long Term Debt $254.34 $253.71Total Liabilities $381.74 $368.80Total Current Assets $75.42 $98.64Total Assets $359.14 $380.34 Income Statement: ($millions, except per share data) 03/30/2015 03/30/2014 03/30/2013 Period 12 months ending 12 months ending 12 months ending Revenue $797.56 $775.99 $661.24 Net Income $-46.53 $-80.28 $-62.87 Earnings Per Share $-1.07 $-3.10 $-7.52 Event: On February 17, 2016, Moody’s Investors Service downgraded Fairway Group Acquisition Company’s corporate family rating to Caa2 from Caa1, its probability of default rating to Caa2-PD from Caa1-PD and its $267 million senior secured term loan and $40 million senior secured revolving credit facility, both to Caa2 from Caa1. “Fairway’s operating performance and liquidity continues to be weak and we expect the company to breach it’s financial covenants in the fourth quarter ending April 3, 2016,” Moody’s Senior Analyst Mickey Chadha stated. Source: Moody’s / Profile Number: 678-5951




Category: Audit Concern

Heat Biologics, Inc. 801 Capitola Drive Durham, NC 27713 919 240-7133 Officers: Jeffrey Wolf -- C.E.O. Timoth Creech -- C.F.O.

Federal Tax ID: 26-2844103 SIC: 2834 Pharmaceutical Preparations Employees: 25 Company Website: www.heatbio.com Auditor: BDO USA, LLP

Securities: Ticker: HTBX Exchange: NASDAQ Common Stock; 8,424,641 shares outstanding as of February 17, 2016 (CUSIP: 42237K102) Business: Heat Biologics, Inc., a clinical-stage biopharmaceutical company, focuses on the development and commercialization of novel allogeneic off-the-shelf cellular therapeutic vaccines for a range of cancers and infectious diseases in the United States. Its Immune Pan-Antigen Cytotoxic Therapy platform technology is designed to educate and stimulate the immune system to combat cancer disease. The Company’s products under development include therapeutic vaccine candidates, such as viagenpumatucel-L (HS-110) that is in Phase II clinical trials for the treatment of non-small cell lung cancer; and vesigenurtacel-L (HS-410), which is in Phase II clinical trials for the treatment of non-muscle invasive bladder cancer. It is also developing cell lines for the treatment of ovarian cancer, triple negative breast cancer and pediatric rhabdomyosarcoma. Balance Sheet: ($millions) 12/31/2015 12/31/2014Total Current Liabilities $6.96 $2.57Total Long Term Debt $3.62 $2.31Total Liabilities $10.72 $4.88Total Current Assets $12.50 $15.28Total Assets $13.22 $15.92 Income Statement: ($millions, except per share data) 12/31/2015 12/31/2014 Period 12 months ending 12 months ending Revenue $0.00 $0.00 Net Income $-21.12 $-12.43 Earnings Per Share $-2.53 $-1.83 Event: In Form 10-K filed on February 18, 2016, Heat Biologics, Inc.’s auditor, BDO USA, LLP, raised substantial doubt about the Company’s ability to continue as a going concern. According to BDO USA, the Company has suffered recurring losses from operations and has not generated significant revenue or positive cash flows from operations. Source: Form 10-K Profile Number: 678-6094





Maxcom Telecomunicaciones, S.A.B. de C.V. Colonia Centro de Ciudad Santa Fe Alvaro Obregon, 01210, Mexico D.F. 52 55 5147 1111 Officers: Enrique Ibarra Anaya -- C.E.O. Armando Jorge Rivero Laing -- C.F.O.

SIC: 4813 Telephone Communications, Except Radiotelephone Employees: 1,309 Company Website: www.maxcom.com.mx Auditor: PricewaterhouseCooopers LLP

Securities: Ticker: MXMTY Exchange: OTC Common Stock; 249,498,700 shares outstanding as of December 1, 2015 (CUSIP: 5773A508) 6% Senior Secured Notes due 2020; $138,383,000 outstanding (CUSIP: 5773AAL6) Business: Maxcom Telecomunicaciones, S.A.B. de C.V. a telecommunication company, provides voice and data services to residential and small, medium-sized business and large corporations in Mexico. It offers various services, including local and long-distance telephone service, voice over Internet protocol services, cellular telephony, data, Internet and television services. The Company operates through a network of approximately 7,200 kilometers of fiber optics and 4,800 kilometers of copper rings in 73 cities. Balance Sheet: (MXNmillions) 12/31/2014 12/31/2013Total Current Liabilities MXN683.60 MXN471.40Total Long Term Debt MXN2,218.90 MXN1,909.10Total Liabilities MXN3,002.90 MXN2,591.40Total Current Assets MXN2,259.70 MXN2,743.90Total Assets MXN5,944.30 MXN5,747.00 Income Statement: (MXNmillions, except per share data) 12/31/2014 12/31/2013 Period 12 months ending 12 months ending Revenue MXN2,689.90 MXN2,467.70 Net Income MXN-305.30 MXN-1,260.40 Earnings Per Share MXN-2.05 MXN-23.47 Event: On February 17, 2016, Standard & Poor’s Ratings Services lowered its corporate credit rating on Maxcom Telecomunicaciones S.A.B. de C.V. to CCC+ from B- and its senior secured notes rating to CCC+ from B-. According to Standard & Poor’s, the downgrade reflects Maxcom’s weaker credit metrics during 2015, which isn’t in line with earlier expectations. Maxcom’s commercial strategies to increase its participation in the commercial segment didn’t turn out as expected, resulting in weak sales performance, and declining revenues, revenue generating units (RGUs) and EBITDA margins. Source: S&P Profile Number: 678-6095




Category: Audit Concern

NeuroMetrix, Inc. 1000 Winter Street Waltham, MA 02451 781 890-9989 Officers: Shai N. Gozani, M.D., Ph.D. -- President & C.E.O. Thomas T. Higgins -- S.V.P., C.F.O.

Federal Tax ID: 04-3308180 SIC: 3841 Surgical and Medical Instruments and Apparatus Employees: 48 Company Website: www.neurometrix.com Auditor: PricewaterhouseCoopers LLP

Securities: Ticker: NURO Exchange: NASDAQ Common Stock; 4,049,807 shares outstanding as of February 1, 2016 (CUSIP: 641255500) Business: NeuroMetrix, Inc., a medical device company, develops and markets products for the detection, diagnosis and monitoring of peripheral nerve and spinal cord disorders, such as those associated with carpal tunnel syndrome, lumbosacral disc disease and spinal stenosis and diabetes. The Company develops wearable medical technology and point-of-care tests that help patients and physicians manage chronic pain, nerve diseases and sleep disorders. Its marketed products include Quell, a wearable device for relief of chronic pain, such as nerve pain due to diabetes and lower back problems; the SENSUS pain therapy device, a prescription neurostimulation device based on transcutaneous electrical nerve stimulation for relief of chronic, intractable pain; DPNCheck, a test used to evaluate systemic neuropathies, such as diabetic peripheral neuropathy; and ADVANCE NCS/EMG system, a platform for the performance of traditional nerve conduction studies and invasive electromyography procedures for the assessment of carpal tunnel syndrome. Balance Sheet: ($millions) 12/31/2015 12/31/2014Total Current Liabilities $3.19 $2.70Total Long Term Debt $0.00 $5.32Total Liabilities $3.47 $8.02Total Current Assets $15.15 $11.09Total Assets $16.03 $11.40 Income Statement: ($millions, except per share data) 12/31/2015 12/31/2014 12/31/2013 Period 12 months ending 12 months ending 12 months ending Revenue $7.30 $5.51 $5.28 Net Income $-9.19 $-7.77 $-8.02 Earnings Per Share $-7.75 $-1.54 $-3.07 Event: In Form 10-K filed on February 12, 2016, NeuroMetrix, Inc.’s auditor, PricewaterhouseCoopers LLP, raised substantial doubt about the Company’s ability to continue as a going concern. According to PricewaterhouseCoopers, the Company has suffered recurring losses from operations and negative cash flows from operating activities. Source: Form 10K Profile Number: 678-5798





Payless Inc. 3231 SE Sixth Avenue Topeka, KS 66607 785 233-5171 Officers: W. Paul Jones -- C.E.O. & President Michael Schwindle -- S.V.P. & C.F.O. Mike Vitelli -- E.V.P. & C.O.O.

Federal Tax ID: 43-1813160 SIC: 5661 Shoe Stores Employees: 22,050 Company Website: www.paylesscorporate.com

Bank Debt: First Lien Sr. Secured Term B Loan due 2021, $520.0 million / First Lien Sr. Secured ABL Revolver due 2019, $250.0 million / Second Lien Secured Term Loan due 2022, $145.0 million Business: Payless Inc. offers footwear and related accessories. The Company operates Payless ShoeSource stores that offer casual and dress shoes, sandals, boots, slippers and other footwear products; and handbags, jewelry, bath-and-beauty products and hosiery. The Company is also involved in the wholesale of footwear in various retail formats, including premier department stores, specialty stores, and athletic and sporting good stores; and through independent distributors and licensees. In addition, Collective Brands, Inc. designs and markets nautical performance, outdoor recreational, dress-casual and casual footwear for adults and children, as well as apparel and accessories under the Sperry Top-Sider and Sperry names; technical running, minimalist, athletic lifestyle, outdoor trail, and fashion athletic shoes, as well as athletic apparel and accessories under the Saucony and Saucony Originals names; fashion-athletic and casual footwear, and accessories under the Keds, Pro-Keds, and Grasshoppers names; and dresses, athletic and casual footwear, boots and sandals for children under Stride Rite and Robeez names. The Company operates a total of 4,496 retail stores; and franchises 163 stores. The Company, formerly known as Collective Brands, Inc. Current Financials Not Available Event: On February 12, 2016, Moody’s Investors Service downgraded Payless Inc.’s corporate family rating to B3 from B2, its probability of default rating to B3-PD from B2-PD and the Company’s $520 million 1st lien term loan due 2021 and $145 million 2nd lien term loan due 2022 were also downgraded to B2 and Caa1, respectively. According to Moody’s, the downgrades reflect weaker than anticipated operating performance and Moody’s expectation that modest improvements to the Company’s operating performance over the next 12-24 months will be insufficient to return credit metrics back in line with the B2 rating category. Source: Moody’s Profile Number: 678-5329





Town Sports International Holdings, Inc. 5 Penn Plaza, 4th Fl. New York, NY 10001 212 246-6700 Officers: Daniel Gallagher -- C.E.O. & President Carolyn Spatafora -- C.F.O.

Federal Tax ID: 20-0640002 SIC: 7991 Physical Fitness Facilities Employees: 8,000 Company Website: www.mysportsclubs.com Auditor: PricewaterhouseCoopers LLP

Securities: Ticker: CLUB Exchange: NASDAQ Common Stock; 24,358,013 shares outstanding as of February 19, 2015 (CUSIP: 89214A102)

Bank Debt: First Lien Sr. Secured Term B Loan due 2020, $325.0 million / First Lien Sr. Secured Revolver due 2018, $45.0 million Business: Town Sports International Holdings, Inc., together with its subsidiaries, owns and operates fitness clubs in the Northeast and Mid-Atlantic regions of the United States. It offers special purpose rooms for group fitness classes; and other exercise programs, as well as accommodates cardiovascular and strength-training equipment. As of March 31, 2015 the Company operated 158 fitness clubs comprising 107 New York Sports Clubs, 30 Boston Sports Clubs, 13 Washington Sports Clubs, 5 Philadelphia Sports Clubs and 3 clubs located in Switzerland, as well as 2 BFX Studios. Balance Sheet: ($millions) 12/31/2014 12/31/2013Total Current Liabilities $70.61 $77.81Total Long Term Debt $296.76 $311.66Total Liabilities $527.92 $457.31Total Current Assets $122.89 $105.64Total Assets $409.83 $413.79 Income Statement: ($millions, except per share data) 12/31/2014 12/31/2013 12/31/2012 Period 12 months ending 12 months ending 12 months ending Revenue $453.84 $470.23 $478.98 Net Income $-68.99 $12.32 $11.97 Earnings Per Share $-2.84 $0.51 $0.51 Event: On February 16, 2016, Moody’s Investors Service downgraded Town Sports International Holdings, Inc.’s corporate family rating to Caa2 from B3, its probability of default rating to Caa2-PD from B3-PD and its senior secured bank facility rating to Caa2 from B3. According to Moody’s, the downgrade of Town Sports’ CFR reflects the Company’s continued overall and comparable-club revenue declines that have further weakened operating metrics, resulting in sustained negative free cash flow generation and an untenable capital structure. Source: Moody’s Profile Number: 678-5121





UCI Holdings Limited 1900 West Field Court Lake Forest, IL 60045 847 482-2045 Officers: Bruce M. Zorich -- President, C.E.O. Ricardo F. Alvergue -- V.P., C.F.O.

Federal Tax ID: 16-1760186 SIC: 3714 Motor Vehicle Parts and Accessories Employees: 3,900 Company Website: www.uciholdings.com Auditor: Grant Thornton LLP

Securities: 8 5/8% Senior Notes due 2019; $400,000,000 outstanding (CUSIP: 90266DAB7)

Bank Debt: First Lien Sr. Secured Term B Loan due 2017, $300.0 million / First Lien Sr. Secured Revolver due 2016, $75.0 million Business: UCI Holdings Limited designs, develops, manufactures, and distributes vehicle replacement parts. The Company offers various filtration products, including oil, air, fuel, transmission, cabin air, fuel dispensing and hydraulic filters, as well as PCV valves and fuel/water separators. It also provides fuel delivery systems comprising fuel pump assemblies, electric and mechanical fuel pumps, and strainers and kits; cooling products, such as aluminum and cast iron cooling systems and fan clutches; and vehicle electronics components, including distributor caps and rotors, ignition coils, electronic controls, sensors, emission components, solenoids, switches, voltage regulators and wire sets. UCI International, Inc. is a subsidiary of UCI Holdings Limited. Balance Sheet: ($millions) 12/31/2014 12/31/2013Total Current Liabilities $270.82 $269.59Total Long Term Debt $684.99 $687.86Total Liabilities $1,134.54 $1,145.98Total Current Assets $559.90 $571.11Total Assets $1,360.12 $1,441.76 Income Statement: ($millions, except per share data) 12/31/2014 12/31/2013 12/31/2012 Period 12 months ending 12 months ending 12 months ending Revenue $1,009.79 $995.93 $984.50 Net Income $-36.25 $-12.24 $14.63 Event: On February 16, 2016, UCI Holdings Limited announced that its wholly-owned subsidiaries, UCI International LLC and UCI Acquisition Holdings (No.3) Corp., have elected to exercise the grace period with respect to the $17,250,000 interest payment due on its 8.625% senior unsecured notes. Under the terms of the indenture governing the Notes, the Company has a 30 day grace period for interest payments. Source: Press Release Profile Number: 678-5537





WS Packaging Group, Inc. 2571 South Hemlock Road Green Bay, WI 54229 920 866-6300 Officers: Frederick C. Tinsey -- C.E.O. Jeff Hayenga -- C.F.O. Scott Fisher -- C.O.O.

SIC: 2679 Converted Paper and Paperboard Products, not Elsewhere Classified Employees: 2,000 Company Website: www.wspackaging.com

Bank Debt: First Lien Sr. Secured Term B Loan due 2019, $236.0 million / First Lien Sr. Secured Revolver due 2018, $40.0 Business: WS Packaging Group, Inc. engages in the design, manufacture, and supply of printing and packaging products to small businesses, large high-volume manufacturers and consumer product goods companies worldwide. It offers a range of label products, including pressure sensitive paper and film labels, in mold injection labels, shrink decorations, glue applied and film labels, static cling decals, and thermal transfer and direct thermal labels; coupons and folded booklets; re-sealable extended text labels; flexible packaging, including printable paper and film-faced laminated structures; games and sweepstakes; folding cartons; and signage and durable graphics. The Company also provides automated labeling and packaging equipment; and specialty products comprising overwrapping, interactive marketing solutions, RFID solutions, laser writable coatings, stock thermal labels, industrial and specialty tapes and wafer seals. It serves customers in food, beverage, household, personal care, OTC health, medical, wine and spirits, promotional, industrial and tobacco markets. WS Packaging Group, Inc. was formerly known as Wisconsin Label Corporation and changed its name to WS Packaging Group, Inc. in October 2000. WS Packaging Group, Inc. operates as a subsidiary of W/S Packaging Holdings Inc. Financials Not Available Event: On February 16, 2016, Standard & Poor’s Ratings Services lowered its corporate credit rating on W/S Packaging Holdings Inc. to CCC from B and its senior secured credit facility, which includes its term loan and revolving credit facility, were lowered to CCC+ from B+. According to Standard & Poor’s, it is highly likely that the Company will be unable to service its debt obligations if it is unable to improve its free cash flow and obtain an amendment to its credit agreement to address tighter financial covenants in the next few quarters. Source: S&P Profile Number: 678-5796




Distressed Company Alert Profile Updates Paragon Offshore plc – Chapter 11 – February 14, 2016

Paragon Offshore and 25 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, lead case number 16-10386. The Company, which provides offshore drilling rigs related equipment and work crews to conduct oil and gas drilling and workover operations, is represented by Mark D. Collins of Richards, Layton & Finger. The Company also announced that it has entered into a plan support agreement (PSA) with an ad hoc committee representing approximately 77% in the aggregate of holders of Paragon Offshore’s 6 3/4% Senior Unsecured Notes maturing July 2022 and 7 1/4% Senior Unsecured Notes maturing August 2024 to support a balance sheet restructuring. Concurrent with its Chapter 11 petition, the Company also filed a Joint Plan of Reorganization and related Disclosure Statement.

Previous DCA Event: Low Rating 12/21/2015 Previous DCA Event: Low Rating 6/8/2015 Previous DCA Event: Miscellaneous 9/17/2015

Updates: 2/12/16, 1/22/16, 9/25/15, 6/19/15 Watch List: 1/16/15, 11/26/14

For more information on this filing and other bankruptcy filings, go to

www.bankruptcydata.com

A.M. Castle & Co. Previous DCA Event: Profile Update 2/9/2016

On February 9, 2016, Standard & Poor’s Ratings Services lowered its corporate credit rating on A.M. Castle & Co. to SD from CC and its 12.75% senior secured notes to D from CC. According to Standard & Poor’s, the rating action reflects A.M. Castle’s February 3, 2016 announcement of the consummation of the exchange offer for its senior secured notes. According to the Company, all the conditions to carry through the offer had been satisfied and the settlement date was on February 8, 2016. Moody’s Downgrades

On February 12, 2016, Moody’s Investors Service downgraded A.M. Castle & Co.’s corporate family rating to Ca from Caa2, its probability of default rating to Ca-PD/LD from Caa2-PD and its existing senior secured notes to C from Caa2. According to Moody’s, the ratings downgrades reflect the Company’s very weak operating results and credit metrics and the completion of the exchange of its senior secured notes. Alta Mesa Holdings, LP Previous DCA Event: Low Rating 2/10/2016

On February 10, 2016, Standard & Poor’s Ratings Services lowered its corporate credit rating on Alta Mesa Holdings, LP to CCC+ from B-. According to Standard & Poor’s, the downgrade reflects the expectation for Alta Mesa to have significantly weaker credit measures following the reduction in S&P’s oil and natural gas price deck assumptions. The Company’s senior unsecured notes were affirmed at CCC+. S&P Lowers Ratings Further

On February 12, 2016, Standard & Poor’s Ratings Services lowered its corporate credit rating on Alta Mesa Holdings, LP to CC from CCC+ and its $450 million senior unsecured notes due October 2018 to CC from CCC+. “The downgrade follows Alta Mesa’s announcement that it has launched an exchange offer to existing holders of its $450 million senior unsecured notes for a new issue of third-lien term loans due 2021,” said Standard & Poor’s credit analyst Daniel Krauss.

Profile Updates continued on next page…




Distressed Company Alert Profile Updates, continued Chaparral Energy, Inc. Previous DCA Event: Low Rating 1/21/2016

On January 21, 2016, Standard & Poor’s Ratings Services lowered its corporate rating on Chaparral Energy, Inc. to CCC+ from B- and its unsecured debt rating to CCC from CCC+. “The downgrade reflects our assessment of the company’s unsustainable credit measures and liquidity, as weak hydrocarbon prices continue to depress its operating cash flows,” said Standard & Poor’s credit analyst Michael Tsai. S&P Lowers Ratings Further

On February 16, 2016, Standard & Poor’s Ratings Services lowered its corporate credit rating on Chaparral Energy, Inc. to CCC- from CCC+ and its unsecured debt rating to CC from CCC. “The downgrade reflects the increased risk that Chaparral could elect to file for chapter 11 and/or restructure its debt following the draw-down on its credit facility,” said Standard & Poor’s credit analyst Michael Tsai. Foresight Energy LP Previous DCA Event: Profile Update 1/18/2016

On January 18, 2016, Foresight Energy, LLC and Foresight Energy Finance Corporation extended the term of the existing forbearance agreement that was entered into on December 18, 2015 with certain of the Issuers’ 7.875% Senior Notes due 2021. As a result of the extension, the forbearance period runs through January 21, 2016, unless further extended by the Consenting Noteholders in their sole discretion or unless earlier terminated in accordance with its terms. Moody’s Downgrades

On February 12, 2016, Moody’s Investors Service downgraded all ratings of Foresight Energy, LLC including the corporate family rating to Caa1 from B3, the probability of default rating to Caa1-PD from B3-PD, the senior unsecured rating to Caa3 from Caa2 and the Company’s senior secured rating to B2 from B1. According to Moody’s, the downgrade reflects the continued headwinds in the coal sector and the recent deterioration in seaborne and domestic coal prices, which is expected to persist, putting pressure on average realizations over the next two years as higher priced contracts roll off. Goodrich Petroleum Corporation Previous DCA Event: Profile Update 1/13/2016

On January 13, 2016, Goodrich Petroleum Corporation announced that it received notification from the New York Stock Exchange that the NYSE has commenced proceedings to delist the Company’s common stock as a result of the NYSE’s determination that the Company’s common stock was no longer suitable for listing on the NYSE based on “abnormally low” price levels. The NYSE suspended trading in the Company’s common stock effective immediately. S&P Lowers Ratings

On February 18, 2016, Standard & Poor’s Ratings Services lowered its issue-level rating on Goodrich Petroleum Corporation’s 3.25% senior unsecured convertible notes due 2026 and 5% senior unsecured convertible notes due 2029 to ‘CC’ from ‘CCC’ following the Company’s offer to exchange the unsecured notes to common stock at a ratio of 800.635 shares of common stock per $1,000 principal amount of notes. Additionally, Standard & Poor’s lowered the Company’s 8% second-lien senior secured notes due 2018 to CC from CCC+ based on the Company’s announcement that it will offer to exchange the notes for new senior secured notes with materially identical terms except that interest thereon may be paid at the Company’s option either in cash or in-kind or deferred until maturity.





Distressed Company Alert Profile Updates, continued Murray Energy Corporation Previous DCA Event: Profile Update 1/29/2016

On January 29, 2016, Standard & Poor’s Ratings Services lowered its corporate credit rating on Murray Energy Corporation to SD from B, its first-lien term notes to D from B and its second-lien term notes to D from CCC+. “The rating action reflects Murray Energy Corp.’s ongoing debt repurchases of its senior secured debt. We are lowering the corporate credit rating on the company and the issue-level ratings on the senior secured debt because we view the related transactions to be distressed, according to our criteria,” said Standard & Poor’s credit analyst Vania Dimova. Moody’s Downgrades Ratings

On February 12, 2016, Moody’s Investors Service downgraded the ratings of Murray Energy Corporation, including its corporate family rating to Ca from Caa1, probability of default rating to Ca-PD from Caa1-PD, first lien term loan rating to Caa2 from B2 and the rating on its second lien senior secured notes to C from Caa2. According to Moody’s, the downgrade reflects the expectation that the Company’s leverage metrics and cash flow generation will continue to be under stress due to the headwinds facing the coal industry as well as the issues facing its affiliate Foresight Energy GP LLC, in which Murray holds 50% of limited partner units. Ortho-Clinical Diagnostics, Inc. Previous DCA Event: Low Rating 1/29/2016

On January 29, 2016, Moody’s Investors Service downgraded the ratings of Ortho-Clinical Diagnostics SA, including the corporate family rating to B3 from B2, its probability of default rating to B3-PD from B2-PD and its unsecured notes rating to Caa2 from Caa1. According to Moody’s, the downgrade of Ortho’s corporate family rating reflects higher leverage than expected at the time of the Company’s sale by Johnson & Johnson to The Carlyle Group in 2014. S&P Lowers Ratings

On February 18, 2016, Standard & Poor’s Ratings Services lowered its corporate credit rating on Ortho-Clinical Diagnostics, Inc. to B- from B, its senior secured facilities to B- from B and its senior unsecured notes to CCC from CCC+. “The rating downgrade follows Ortho-Clinical’s continued operating underperformance lasting for several quarters,” said Standard & Poor’s credit analyst Maryna Kandrukhin. Pacific Exploration & Production Corporation Previous DCA Event: Profiled Update 1/19/2016

On January 19, 2016, Moody’s Investors Service downgraded Pacific Exploration & Production Corporation’s corporate family rating and senior unsecured debt ratings to C from Caa3. According to Moody’s, the downgrade was triggered by the Company’s announcement on January 14 that it will use the 30-day grace period under the senior unsecured notes due 2025 and 2019 to assess liquidity and capital structure alternatives. Press Release Filed

On February 11, 2016, Pacific Exploration & Production Corporation announced that the Company, together with its legal and financial advisors and through the Independent Committee of the Board of Directors, is actively working with its creditors pursuant to its revolving credit facilities and note indentures to formulate a comprehensive plan to address the current oil price environment and ensure the long-term viability of its business. The Company remains, and intends to remain, current with its suppliers, trade partners and contractors.





Distressed Company Alert Profile Updates, continued Peabody Energy Corporation Previous DCA Event: Profile Update 1/15/2016

On January 15, 2016, Standard & Poor’s Ratings Services lowered its corporate credit rating on Peabody Energy Corporation to CCC+ from B, its first-lien debt to B from BB-, its second-lien debt to CCC+ from BB- and its junior subordinated debt to CC from CCC. “The negative outlook mirrors our decidedly negative outlook for the domestic coal sector over the next year. A significant portion of the supply base has been or will be undertaking restructuring efforts that will alter the competitive landscape, making it more challenging for companies with weaker balance sheets.” Fitch Lowers Ratings

On February 12, 2016, Fitch Ratings downgraded its ratings on Peabody Energy Corporation, including its long-term Issuer Default Rating (IDR) to CC from CCC and its senior second lien secured notes to C from B-. According to Fitch, the downgrade of the second lien notes reflects their position in the capital structure after the $1.7 billion revolver, the $1.3 billion term loan, and letters of credit- secured by receivables as well as Fitch’s assumptions for lower going concern EBITDA and lower enterprise value multiples.

PetroQuest Energy, Inc. Previous DCA Event: Distressed Debt Exchange 1/19/2016

On January 19, 2016, Moody’s Investors Service downgraded PetroQuest Energy, Inc.’s corporate family rating to Caa3 from B3, the probability of default rating to Caa3-PD from B3-PD and the Company’s senior unsecured notes ratings to Ca from Caa1. PetroQuest announced a private exchange offer to exchange up to $300 million of its existing 10% senior unsecured notes due 2017 for up to $75 million of cash, $202.5 million of new 10% second lien senior secured notes due 2021 and six million shares of its common stock. Moody’s views this exchange offer as a distressed exchange. S&P Lowers Ratings

On February 18, 2016, Standard & Poor’s Ratings Services lowered its corporate credit rating on PetroQuest Energy, Inc. to SD from CC and its $350 million 10% senior unsecured notes due September 2017 were lowered to D from CC. “The downgrade follows PetroQuest’s announcement that it has completed an exchange offer to existing holders of its $350 million senior unsecured notes for cash, common stock, and a new issue of 10% senior secured second-lien notes due 2021,” said Standard & Poor’s credit analyst Danny Krauss. Prospect Holding Company LLC Previous DCA Event: Distressed Debt Exchange 2/9/2016

On February 9, 2016, Standard & Poor’s Ratings Services lowered its long-term issuer credit and issue ratings on Prospect Holding Company LLC to CC from CCC+. “We expect the settlement of the tender payment to occur on March 8, at which time we plan to lower the issuer credit rating to ‘SD’ (selective default) and the rating on the senior notes to ‘D’ (default),” said Standard & Poor’s credit analyst Stephen Lynch. “According to our criteria, we view the below-par prepayment as distressed and, hence, a de facto restructuring and a default on the fund’s obligations.” Moody’s Lowers Ratings

On February 12, 2016, Moody’s Investors Service downgraded Prospect Holding Company, LLC’s corporate family and senior unsecured ratings to Caa2 from B2. According to Moody’s, the downgrade follows Prospect’s announcement of a tender offer to repurchase two third of its senior unsecured notes at a discount of almost 40%. Moody’s views this transaction as a distressed exchange, which is a default under Moody’s definitions.





Distressed Company Alert Profile Updates, continued

Rex Energy Corporation Previous DCA Event: Profile Update 1/25/2016

On January 25, 2016, Moody’s Investors Service downgraded Rex Energy Corporation’s corporate family rating to Caa3 from Caa1, its probability of default rating to Caa3-PD from Caa1-PD and its senior unsecured notes to Ca from Caa2. “The ratings downgrade was driven by the continued steep deterioration in the commodity price environment, its impact on the credit metrics of REXX and the increased likelihood of a distressed debt exchange…has significantly elevated the potential for purchases of debt at steep discounts to the face value or other balance sheet restructuring including bankruptcy filing,” commented Sreedhar Kona, Moody’s Senior Analyst. S&P Lowers Ratings

On February 12, 2016, Standard & Poor’s Ratings Services lowered its corporate credit rating on Rex Energy Corporation to CC from CCC- and its senior unsecured notes rating to C from CC. “The downgrade follows Rex’s announcement that it has launched an exchange offer to existing holders of its 8.875% and 6.25% senior unsecured notes for shares of common equity and a new issue of 10% senior secured second-lien notes due 2020,” said Standard & Poor’s credit analyst Aaron McLean.

SandRidge Energy, Inc. Previous DCA Event: Update 1/25/2016

In Form 8-K field on January 25, 2016, SandRidge Energy, Inc. stated that it has retained Kirkland & Ellis LLP, as legal advisor, and Houlihan Lokey, Inc., as financial advisor, to assist the Company in analyzing and considering financial, transactional and strategic alternatives. No further action or disclosures are anticipated at this time. Grace Period Utilized

On February 17, 2016, SandRidge Energy, Inc. announced that it elected to exercise its grace period and defer making approximately $21.7 million in interest payments due February 16, 2016, on its outstanding $543.6 million principal amount of 7.5% senior notes due 2023 and its outstanding $46.9 million principal amount of 7.5% senior convertible notes due 2023. The Company has sufficient liquidity to make these interest payments, but has elected to use the 30-day grace period in connection with its ongoing discussions with stakeholders. S&P Lowers Rating

On February 18, 2016, Standard & Poor’s Ratings Services lowered its corporate credit rating on SandRidge Energy, Inc. to D from SD, its second-lien debt rating to D from B, its unsecured debt rating to D from CCC- and its convertible preferred stock rating to D from C. “The ‘D’ rating reflects SandRidge’s announcement that it has elected to defer making interest payments on its 7.5% senior notes due 2023 and 7.5% senior convertible notes due 2023, and our belief that the company will not make these payments before the 30-day grace period ends,” said Standard & Poor’s credit analyst Ben Tsocanos.





Distressed Company Alert Profile Updates, continued

Ultra Petroleum Corp. Previous DCA Event: Update 2/1/2016

On February 1, 2016, Standard & Poor’s Ratings Services lowered the corporate credit rating on Ultra Petroleum Corp. to CCC- from B+ and its subordinated unsecured debt rating to C from B+ given the view that the Company may look to restructure its debt over the next six months. “The rating action reflects our view that Ultra Petroleum’s leverage and liquidity continue to deteriorate in light of our recently reduced commodity price deck and our estimate that the company will breach financial covenants on both its unsecured credit facility and senior unsecured notes at the end of the first quarter,” said Standard & Poor’s credit analyst Carin Dehne-Kiley. Financial & Legal Advisors Retained

On February 18, 2016, Ultra Petroleum Corp. reported fourth quarter and full-year 2015 operating and financial results. In light of the Company’s near term maturities and covenant requirements, the Company is evaluating a variety of strategic alternatives related to its capital structure. The Company has engaged Kirkland & Ellis LLP as legal advisor and Rothschild and Petrie Partners as financial advisors.

The following companies had their ratings affirmed:

CPG International Inc. – Standard & Poor’s Ratings Services Corporate credit rating affirmed at B $625 million senior secured term loan due 2020 affirmed at B $315 million senior unsecured notes due 2021 affirmed at CCC+

GenOn Energy, Inc. – Standard & Poor’s Ratings Services Corporate credit rating affirmed at CCC+ $1.95 billion senior unsecured notes affirmed at B-

Hexion Inc. – Standard & Poor’s Ratings Services Corporate credit rating affirmed at CCC+ Senior secured notes rating affirmed at CCC+

NPC International, Inc. – Moody’s Investors Service Corporate family rating affirmed at B2 Probability of default rating affirmed at B2-PD First lien senior secured revolving credit facility due September 2018 affirmed at B1 First lien senior secured term loan due December 2018 affirmed at B1 Unsecured notes due 2020 affirmed at Caa1

The following companies had their ratings withdrawn:

Cambium Learning Group, Inc. – Moody’s Investors Service




Distressed Company Alert Watch List The following companies had their ratings downgraded, but not quite low enough:

Erickson Incorporated (Portland, OR) – Standard & Poor’s Ratings Services Corporate credit rating lowered to B- from B Second lien debt lowered to B- from B+

Hecla Mining Company* – Standard & Poor’s Ratings Services Corporate credit rating lowered to B- from B Senior unsecured notes lowered to B- from B

Kronos Worldwide, Inc.* – Standard & Poor’s Ratings Services Corporate credit rating lowered to B from B+

Offshore Drilling Holding S.A. (Mexico) – Standard & Poor’s Ratings Services Corporate credit lowered to B+ from BB-

Polyus Gold International Limited (United Kingdom) – Standard & Poor’s Ratings Services Corporate credit rating lowered to BB- from BB+

Teck Resources Limited (Vancouver, Canada) – Standard & Poor’s Ratings Services Corporate credit rating lowered to B+ from BB Senior unsecured notes rating lowered to B+ from BB

Teekay Corporation (Vancouver, BC) – Moody’s Investors Service Corporate family rating downgraded to B2 from B1 Senior Unsecured Bond/Debentures due 2020 downgraded to B3 from B2

Vedanta Resources plc (United Kingdom) – Standard & Poor’s Ratings Services Guaranteed notes and loans lowered to B from B+

The following (proposed) bonds were assigned below a “B” rating:

Corporate Risk Holdings, LLC (New York, NY) – Standard & Poor’s Ratings Services $825 million notes ($682 million outstanding) due 2019 assigned a CCC+ rating $96 million second-lien notes due 2020 assigned a CCC- rating

Prestige Brands, Inc.* – Moody’s Investors Service $350 million senior unsecured notes due 2024 assigned a Caa1 rating

** Please note that we will not have profiles on the above companies until, or unless, they qualify for our criteria, which is defined on the last page of this issue. * Previously profiled in the DCA




Bankruptcies The data provided below offers a snapshot of Chapter 7 & Chapter 11 filings that have occurred since the prior reporting period for which the petitioning company has sales of at least $1 million. Additional information on companies that have filed for bankruptcy can be found at BankruptcyData.com. Rescue One Ambulance, Paramount, CA | Bankruptcy Date: 2/18/2016 St Jude Nursing Center Inc, Troy, MI | Bankruptcy Date: 2/18/2016 Merchandising Service Of America Inc, Philadelphia, PA | Bankruptcy Date: 2/18/2016 Louisiana Pellets Inc, Urania, LA | Bankruptcy Date: 2/18/2016 Emlogis Inc, Houston, TX | Bankruptcy Date: 2/17/2016 Camelback LLC, Scottsdale, AZ | Bankruptcy Date: 2/17/2016 La Casa De La Raza Inc, Santa Barbara, CA | Bankruptcy Date: 2/17/2016 Parrish Excavating Inc, Damascus, OR | Bankruptcy Date: 2/17/2016 Carlbrook Properties LLC, South Boston, VA | Bankruptcy Date: 2/17/2016 Trellis Earth Products Inc, Wilsonville, OR | Bankruptcy Date: 2/17/2016 American Precision Sheet Metal Corp, Middlesex, NJ | Bankruptcy Date: 2/17/2016 Calzados Astur Inc, San Juan, PR | Bankruptcy Date: 2/17/2016

Primrose La Sara LLC, Cedar Park, TX | Bankruptcy Date: 2/17/2016 LLJZ Industries Inc, Ridott, IL | Bankruptcy Date: 2/16/2016 Riverside General Hospital Inc, Houston, TX | Bankruptcy Date: 2/16/2016 Blooming Terrace LLC, Denver, CO | Bankruptcy Date: 2/16/2016 Saber Mountain Landing LLC, Lincoln, NH | Bankruptcy Date: 2/16/2016 Hetran Inc, Orwigsburg, PA | Bankruptcy Date: 2/16/2016 Builders Associates LLC, Caguas, PR | Bankruptcy Date: 2/16/2016 Greenhunter Hydrocarbons LLC, Grapevine, TX | Bankruptcy Date: 2/16/2016 Genesis Title Holding Corporation, Sacramento, CA | Bankruptcy Date: 2/16/2016 Carolina Renovation Experts Inc, Wake Forest, NC | Bankruptcy Date: 2/15/2016 St Louis Metal And Recycling Company Inc, St. Louis, MO | Bankruptcy Date: 2/15/2016 Paragon Offshore plc, Houston, TX | Bankruptcy Date: 2/14/2016

Bankruptcy information is provided by BankruptcyData.com’s Business Bankruptcy Filing Data Service. For information on how you can receive a daily file of business bankruptcies

e-mail [email protected].




Alert Categories The goal of the Distressed Company Alert newsletter is to alert subscribers of significant recent events reported by U.S. Public Companies indicating possible distress. The Categories Triggering an Alert: Default: A missed interest or principal payment on a debt obligation or the election of a company to not make a payment during or after the grace period. Covenant Violation: A violation of a covenant in an agreement or indenture governing a debt obligation. Audit Concern: A qualification as to the Company’s ability to continue as a going concern is reported by its independent accountants in an annual report. Low Rating: A major ratings agency has downgraded a Company’s publicly traded debt or any other rating to below a “B” rating, indicating vulnerability to default. Debt at Significant Discount: The Company’s public debt trades with a current yield or yield-to-maturity in excess of ten points over long-term Treasury bond rate. Distressed Debt Exchange: A debt exchange where the principal amount or interest rate is significantly reduced because the issuer is having difficulty meeting the original terms. Preferred Dividend Omission: The Company omits a dividend on its preferred stock. Miscellaneous The editors determine a recent event that represents distress or challenges the future prospects of the Company. DISCLAIMER: Company Profiles in the Distressed Company Alert are selected by the editors because, in their opinion, the occurrence of such an event or the existence of such a circumstance is a likely indicator of current or prospective financial or operating difficulty. The inclusion of a profile suggests the possibility of financial distress or the possibility that the Company may be of interest to workout professionals for some other reason. Inclusions do not represent analysis of the condition of the Company or a definitive determination that the Company is in difficulty. ACCURACY & COVERAGE: The information presented has been obtained from sources believed to be reliable, but accuracy cannot be guaranteed. Do not rely on the Distressed Company Alert without independent verification.

Distressed Company Alert is published weekly by New Generation Research, Inc., 1212 Hancock St., Suite LL-15, Quincy, MA 02169 Publisher: George Putnam, III; Editor: Kerry Mastroianni

Subscription Rate: $270.00 for six months or $500.00 per year. For more information, visit www.distressedcompanyalert.com. Other Publications from New Generation Research, Inc. include Bankruptcy Week--a weekly companion newsletter for BankruptcyData.com; The Bankruptcy Yearbook and Almanac--an annual compendium of bankruptcy information; The Turnaround Letter—a monthly investment newsletter. For more information on these publications, e-mail us at [email protected] or call us at (800) 468-3810.

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