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Standard & Poor’s Ratings Services yesterday lowered Valeant Pharmaceuticals International Inc.’s corporate credit rating after a large holder called a default as a result of the Canadian drugmaker’s failure to file its annual report earlier this year, the Wall Street Journal reported today. The ratings agency, which notched Valeant down to B from B+, also lowered the company’s secured debt rating, to BB- from BB. Centerbridge Partners LP, a $25 billion private-equity and distressed debt investor, recently sent Valeant a notice of default, the Wall Street Journal reported on Tuesday. Valeant reiterated then that it remains on schedule to file the report by April 29, which would enable it to avoid a default. New York-based Centerbridge owns about $250 million in face value of Valeant’s $1 billion bond issue due 2023, some of the people said. Under Valeant debt covenants, holders of 25 percent of any single issuance of bonds under certain circumstances, such as untimely financial statements, can call a default.

SunEdison Inc., the renewable-energy company already teetering on the brink of bankruptcy, missed a bond payment this month, Bloomberg News reported yesterday. The company was supposed to pay $2.6 million April 1 on its 2 percent convertible bonds, which are due in 2018, according to data compiled by Bloomberg. SunEdison has a grace period through May 1. The trustee, Wilmington Trust Corp., confirmed April 11 that the payment was missed, according to data compiled by Bloomberg. Not making the payment “means SunEdison is likely in technical default,” Greg Jones, an analyst at CreditSights, said in an e-mail Wednesday. Failure to cure by May 1 “could potentially trigger cross-default provisions in other debt obligations.” About $256 million remains on the bonds. They were issued in December 2013 and are currently trading at about 9 cents on the dollar. SunEdison is already facing technical defaults on at least $1.4 billion in loans and credit facilities because of its failure to file its 2015 annual report. The company amassed $11.7 billion in debt by Sept. 30, and now faces inquiries into its financial status from an internal audit committee, the U.S. Department of Justice and the U.S. Securities and Exchange Commission.

U.S. oil and gas producer Energy XXI Ltd., which has operations in Louisiana, Texas and the Gulf of Mexico, said today that it has filed for bankruptcy protection, becoming one of the biggest casualties of the oil rout to date, Reuters reported. The company said that it will eliminate more than $2.8 billion in debt from its balance sheet through the chapter 11 restructuring. Energy XXI's bankruptcy filing underscores the stress oil and gas companies face as oil prices hover around $40 a barrel, down from above $100 almost two years ago. The company's break even is at $60 and above. Energy XXI said last month that it was delaying paying the interest due on the debt of one of its subsidiaries, kicking off a 30-day grace period. The company owed about $2.8 billion as of mid-February. The company follows more than 40 other energy companies who have sought court protection from their creditors last year. Up to a third of all producers may end up in bankruptcy this year if commodity prices remain depressed, according to consulting firm Deloitte. Read more. 

Has the final shoe dropped for the E&P industry? A session tomorrow at ABI's 34th Annual Spring Meeting features experts discussing energy industry distress. Click here to register. 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Pre-order your copy of ABI's revised and expanded When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition. Print copies will be available at the onsite bookstore at the Annual Spring Meeting. 

Struggling U.S. coal miner Foresight Energy LP and a group of bondholders are closing in on a deal in which billionaire founder Chris Cline would inject cash to repay the creditors, Bloomberg News reported yesterday. The company, which faces a deadline for resolving the dispute with bondholders who claim they are owed more than $600 million, needs an agreement to help stave off bankruptcy amid the worst coal downturn in decades. Under the deal being discussed, Cline would buy some or all of that debt. Cline may also invest capital in Foresight’s part-owner Murray Energy Corp. A group of the miner’s senior secured debt holders are seeking a consent fee to agree to any terms.

Bankruptcy Judge Christopher Sontchi gave the green light to Paragon Offshore PLC’s creditors to vote on its restructuring plan, which would wipe more than $1 billion in existing debt from its balance sheet, the Wall Street Journal reported today. Judge Sontchi on Monday signed off on an outline of Paragon’s restructuring plan, court papers show, paving the way for creditors to begin casting their votes. In addition to lowering the company’s debt load, Paragon will also see a $60 million reduction in annual cash interest expense from its balance sheet. Creditors eligible to vote on the plan will have until May 31 to submit ballots, and Judge Sontchi will consider approving the plan itself at a hearing set for June 3.

Peregrine Midstream Partners LLC filed a chapter 11 plan that proposes to slash the natural gas storage company’s debts by more than $249 million, the Wall Street Journal reported today. The plan, filed on Monday with the U.S. Bankruptcy Court in Wilmington, Del., is the product of last month’s deal under which key lenders pledged their support for a restructuring that will see them forgive several hundred million dollars in debt in exchange for new debt and/or equity in the reorganized business. The lenders that have signed the plan-support agreement include ING Capital LLC, Royal Bank of Canada and Sumitomo Mitsui Banking Corp., according to court papers. Houston-based Peregrine and its affiliates sought chapter 11 protection on Feb. 2 after the construction of its Ryckman Creek natural gas storage facility in Wyoming ran into trouble, including a fire that caused substantial damage, and contributed to the company’s debt load. Read more. (Subscription required.) 

Has the final shoe dropped for the E&P industry? A session at ABI's 34th Annual Spring Meeting features experts discussing energy industry distress. Click here to register. 

Get a better understanding of what happens when an oil, gas or other natural resources company goes bankrupt. Pre-order your copy of ABI's revised and expanded When Gushers Go Dry: The Essentials of Oil & Gas Bankruptcy, Second Edition. 

The House voted yesterday to add a new section to the Bankruptcy Code specifically for banks, a measure meant to provide an alternative to President Obama's financial reform law for ensuring that big banks can fail without bailouts, the Washington Examiner reported today. The legislation "ensures that shareholders and creditors, not taxpayers, bear the losses related to the failure of a financial company," said House Judiciary Committee Chairman Bob Goodlatte (R). The Republican House passed the bank bankruptcy legislation last Congress, but it was not taken up by the then Democratic-led Senate. Republicans in the Senate have not advanced similar legislation this year.