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Default, Transition, and Recovery: High Ridge Brands Defaults, Pushing This Year's Corporate Default Tally To 92

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Default, Transition, and Recovery: High Ridge Brands Defaults, Pushing This Year's Corporate Default Tally To 92

The 2019 global corporate default tally reached 92 this week after High Ridge Brands Co., the subsidiary of Connecticut-based skin and oral care products manufacturer CDR HRB Holdings Inc., missed principal and interest payments on some of its senior unsecured notes and senior secured bank credit facilities. For more details, see "High Ridge Brands Co. And Parent CDR HRB Holdings Inc. Downgraded To 'D' On Missed Principal And Interest Payments," published Oct. 17, 2019.

This is the consumer products sector's seventh default this year, marking the fourth-highest tally among all sectors. While this figure trails the sector's default tally last year (10) and the year prior (11), the sector's high number of weakest links (defined as issuers rated 'B-' or lower with negative outlooks or ratings on CreditWatch with negative implications), which typically default at a rate eight times higher than other speculative-grade issuers, suggests that more defaults could be in the offing. For more information, see "Weakest Links Reach A 10-Year High," published Oct. 17, 2019.

Chart 1

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This Week's Observations

  • Weakest links reached a 10-year high of 263 in September, with 52 from the consumer products sector, 27 from oil and gas, and 26 from media and entertainment, indicating elevated default prospects in these sectors, which also have high concentrations of defaults so far this year (see chart 2).
  • The 12-month trailing speculative-grade default rate rose in the U.S. to 2.8% as of Sept. 30, 2019, the highest since June 2018, while Europe's rate rose to 2.1%. The global default rate reached 2.3%, the highest since July 2018, and the emerging markets default rate dipped slightly, to 1.4%.
  • The default rate in the energy and natural resources sector rose 0.77 percentage point to 6.4% as of Sept. 30, and that for consumer services rose 0.16 percentage point to 3%.

Table 1

Rising Default Rates In Europe And The U.S. Raise The Global Default Rate
Global corporate default summary
Region 12-month trailing speculative-grade default rate (%) 2019 year-to-date default tally 2018 year-to-date default tally 2018 default tally Weakest links tally
U.S. 2.8 63 39 47 177
Emerging markets 1.4 14 15 17 47
Europe 2.1 12 10 13 36
Other developed 1.9 3 5 5 3
Global 2.3 92 69 82 263
Note: Trailing-12-month default rates from Sept. 30, 2018-Sept. 30, 2019, are preliminary and subject to change. Other developed region consists of Australia, Canada, Japan, and New Zealand. Default counts may include confidentially rated issuers. Year-to-date data as of Oct. 23, 2019. Weakest link data as of Sept. 23, 2019. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®.

Chart 2

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Chart 3

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Chart 4

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Table 2

Oil And Gas Leads The 2019 Default Tally With 18
Global corporate defaults in 2019
Date Parent company Country Subsector To From Reason
1/2/2019 Ultra Petroleum Corp. U.S. Oil and gas SD CC Distressed exchange
1/8/2019 Confidential Confidential Telecommunications D CCC Confidential
1/15/2019

API Heat Transfer Co.

U.S. Capital goods SD CCC- Distressed exchange
1/16/2019 Shopko Stores Inc. U.S. Retail/restaurants D NR Chapter 11
1/16/2019 Pacific Gas & Electric Co. (PG&E Corp.) U.S. Utilities D CC Missed interest payments
1/18/2019

Ditech Holding Corp.

U.S. Finance companies SD CCC Missed interest payments
1/29/2019

PG&E Corp.

U.S. Utilities D CC Chapter 11
1/30/2019

Eletson Holdings Inc.

Liberia Transportation SD CCC Missed interest payments
1/31/2019 New Look Retail Group Ltd. U.K. Retail/restaurants SD CC Distressed exchange
2/1/2019 Tsesnabank Kazakhstan Bank SD B- Distressed exchange/out-of-court restructuring
2/4/2019 Confidential Confidential Homebuilders/real estate companies D CCC- Confidential
2/4/2019 Charlotte Russe Inc. U.S. Retail/restaurants D CCC- Chapter 11
2/6/2019 TRM Holdings Corp. U.S. Retail/restaurants D NR Chapter 11
2/7/2019 Fuse Media Inc. U.S. Media and entertainment D CC Missed interest payments
2/7/2019

Hornbeck Offshore Services Inc.

U.S. Oil and gas SD CC Distressed exchange
2/10/2019 Trident Holding Co. LLC U.S. Health care D NR Chapter 11
2/19/2019 Payless Inc. U.S. Retail/restaurants D CCC- Chapter 11
2/21/2019

Novasep Holding S.A.S.

France Health care SD CC Distressed exchange
2/21/2019 One Call Corp. (One Call Care Management Inc.) U.S. Insurance SD CC Distressed exchange/out-of-court restructuring
2/26/2019 Windstream Holdings Inc. U.S. Telecommunications D CCC- Chapter 11
3/8/2019 Affinion Group Holdings Inc. U.S. Media and entertainment SD CCC- Missed interest payments
3/11/2019 CTI Foods Holding Co. LLC U.S. Consumer products D CCC- Chapter 11
3/15/2019 Imperial Metals Corp. Canada Metals, mining, and steel SD CCC- Missed interest payments
3/15/2019 Cloud Peak Energy Resources LLC U.S. Metals, mining, and steel SD CCC Missed interest payments
3/15/2019 PHI Inc. U.S. Oil and gas D CCC- Chapter 11
3/20/2019 Nyrstar N.V. Belgium Metals, mining, and steel SD CCC+ Missed interest payments
3/21/2019 Murray Energy Corp. (A) U.S. Metals, mining, and steel SD CCC+ Distressed exchange
3/28/2019 Evergreen AcqCo1 L.P. d/b/a Savers U.S. Retail/restaurants SD CCC Distressed exchange
3/29/2019 Confidential Confidential High technology D CCC- Confidential
4/1/2019

Hexion Inc.

U.S. Chemicals, packaging, and environmental services D CCC Chapter 11
4/1/2019 Southcross Energy Partners L.P. U.S. Utilities D NR Chapter 11
4/2/2019 Sungard Availability Services Capital Inc. U.S. High technology D CCC+ Chapter 11
4/2/2019

Monitronics International Inc.

U.S. Media and entertainment SD CC Missed interest payments
4/3/2019 Maxcom Telecomunicaciones S.A.B. de C.V. (A) Mexico Telecommunications SD CCC+ Distressed exchange
4/3/2019 Bellatrix Exploration Ltd. Canada Oil and gas D CCC Missed interest payments
4/4/2019

Debenhams PLC

U.K. Retail/restaurants SD CC Distressed exchange
4/4/2019

Fusion Connect Inc.

U.S. Telecommunications D B Missed interest payments
4/5/2019 Curvature Inc. U.S. High technology SD CCC+ Distressed exchange
4/12/2019 MIE Holdings Corp. Cayman Islands Oil and gas SD CC Distressed exchange
4/14/2019 Jones Energy Inc. U.S. Oil and gas D NR Chapter 11
4/15/2019 Crossmark Holdings Inc. U.S. Consumer products SD CC Missed interest payments
4/16/2019 Bristow Group Inc. U.S. Oil and gas D CCC- Missed interest payments
5/1/2019 Confidential Confidential Media and entertainment D NR Confidential
5/2/2019 Senvion Holding GmbH (Suzlon Energy Ltd.) Germany Capital goods SD CC Missed interest payments
5/2/2019 Parq Holdings L.P. Canada Media and entertainment SD CCC Missed interest payments
5/6/2019 Hospital Acquisition LLC (d/b/a LCI Holding Co. LLC) U.S. Health care D NR Chapter 11
5/9/2019 Preferred Proppants LLC U.S. Metals, mining, and steel D CCC+ Distressed exchange
5/22/2019 USJ Acucar e Alcool S.A. Brazil Consumer products SD CC Distressed exchange
5/27/2019 Confidential Confidential Chemicals, packaging, and environmental services SD CCC Confidential
5/28/2019 White Star Petroleum Holdings LLC U.S. Oil and gas D NR Chapter 11
5/31/2019 Sheridan Investment Partners II L.P. (Sheridan Holding Co. II LLC) U.S. Finance companies SD CCC- Missed interest payments
5/31/2019 Sheridan Investment Partners I LLC (Sheridan Holding Co. I LLC) U.S. Finance companies SD CCC- Distressed exchange
6/3/2019 Confidential Confidential Media and entertainment D NR Confidential
6/3/2019 FTD Inc. U.S. Retail/restaurants D NR Chapter 11
6/4/2019 Legacy Reserves L.P. U.S. Oil and gas D CCC- Missed interest payments
6/11/2019 Neiman Marcus Group LLC (The) U.S. Retail/restaurants SD CC Distressed exchange/out-of-court restructuring
6/14/2019

New Academy Holding Co. LLC

U.S. Retail/restaurants SD CCC+ Distressed exchange
6/19/2019

Denbury Resources Inc.

U.S. Oil and gas SD CC Distressed exchange
6/21/2019 Confidential Confidential Transportation SD CC Confidential
6/21/2019

Galapagos Holding S.A.

Luxembourg Capital goods SD CC Missed interest payments
6/24/2019 Confidential Confidential Health care D NR Confidential
6/26/2019

Cell C (Pty) Ltd.

South Africa Telecommunications SD CCC- Distressed exchange
6/28/2019

Mood Media Corp.

U.S. Media and entertainment SD CC Distressed exchange
7/2/2019

Weatherford International PLC

Ireland Oil and gas D CC Chapter 11
7/3/2019 PES Holdings LLC U.S. Oil and gas D B- Missed interest payments
7/11/2019

Stearns Holdings LLC

U.S. Finance companies D CCC+ Chapter 11
7/12/2019 Confidential Confidential Homebuilders/real estate companies SD CC Confidential
7/18/2019

American Energy Permian Holdings LLC

U.S. Oil and gas D CC Missed interest payments
7/19/2019 Blackhawk Mining U.S. Metals, mining, and steel D NR Chapter 11
7/23/2019

99 Cents Only Stores LLC

U.S. Retail/restaurants SD CC Distressed exchange
7/23/2019

Avianca Holdings S.A.

Panama Transportation SD CCC+ Missed principal payments
8/6/2019 Barneys New York Inc. U.S. Retail/restaurants D NR Chapter 11
8/7/2019 Halcon Resources Corp. U.S. Oil and gas D CC Chapter 11
8/12/2019 Sanchez Energy Corp. U.S. Oil and gas D CC Chapter 11
8/21/2019 Maxcom Telecomunicaciones S.A.B. de C.V. (B) Mexico Telecommunications D CC Missed interest payments
9/3/2019 Burger BossCo Intermediate Inc. U.S. Retail/restaurants SD CCC+ Distressed exchange
9/12/2019 Alta Mesa Resources Inc. U.S. Oil and gas D CCC- Chapter 11
9/13/2019

Chesapeake Energy Corp.

U.S. Oil and gas SD B+ Distressed exchange
9/13/2019 PT Delta Merlin Dunia Textile Indonesia Consumer products D CC Missed interest payments
9/17/2019

EP Energy LLC

U.S. Oil and gas D CC Missed interest payments
9/19/2019 Confidential Confidential Capital goods D CCC Confidential
9/24/2019

Thomas Cook Group PLC

U.K. Media and entertainment D CC Chapter 15
9/27/2019

Premiere Global Services Inc.

U.S. Telecommunications SD CCC- Distressed exchange
10/2/2019

Acosta Inc.

U.S. Consumer products SD CCC Missed principal and interest payments
10/2/2019

Syncreon Group Holdings B.V.

Netherlands Consumer products SD CC Distressed exchange
10/3/2019

Deluxe Entertainment Services Group Inc.

U.S. Media and entertainment D CC Chapter 11
10/4/2019

Murray Energy Corp.

U.S. Metals, mining, and steel SD CCC Missed amortization and interest payments
10/7/2019

Medical Depot Holdings Inc.

U.S. Health care D CC Distressed exchange
10/14/2019

Jain Irrigation Systems Ltd.

India Capital goods SD CCC Missed principal payments
10/15/2019

Rite Aid Corp.

U.S. Retail/restaurants SD B- Distressed exchange
10/16/2019 Confidential Confidential Capital goods D CCC- Confidential
10/17/2019 CDR HRB Holdings Inc. U.S. Consumer products D CCC- Missed principal and interest payments
NR--Not rated. SD--Selective default. Data as of Oct. 23, 2019. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®.

Default Studies

More analysis and statistics are available in our annual default studies, published on RatingsDirect:

Corporate (financial and nonfinancial)
  • 2018 Annual Global Financial Services Default And Rating Transition Study
  • 2018 Annual Greater China Corporate Default And Rating Transition Study
  • 2018 Annual Taiwan Ratings Corp. Corporate Default And Rating Transition Study
  • 2018 Annual Global Corporate Default And Rating Transition Study
  • 2018 Annual U.S. Corporate Default And Rating Transition Study
  • 2018 Annual Asia Corporate Default And Rating Transition Study
  • Japanese Issuer Credit Rating Transitions Study 2018
  • 2017 Annual Australia And New Zealand Corporate Default Study And Rating Transitions
  • 2017 Inaugural Infrastructure Default Study And Rating Transitions
  • 2017 Mexican National-Scale Corporate And Public Finance Default Study And Rating Transitions
  • 2017 Annual Emerging Markets Corporate Default Study And Rating Transitions
  • 2017 Annual European Corporate Default Study And Rating Transitions
  • 2017 Annual Canadian Corporate Default Study And Rating Transitions
  • 2017 Inaugural Nordic Default Study And Rating Transitions
  • 2017 Annual Brazil Corporate Default Study And Rating Transitions
  • 2017 Annual Latin American Corporate Default Study And Rating Transitions
Structured finance
  • 2018 Annual Global Leveraged Loan CLO Default And Rating Transition Study
  • 2018 Annual Taiwan Structured Finance Default Study And Rating Transitions
  • 2018 Annual Global Structured Finance Default Study And Rating Transitions
  • 2018 Annual Japanese Structured Finance Default Study And Rating Transitions
  • 2017 Annual Mexican Structured Finance Default Study And Rating Transitions
  • 2017 Annual European Structured Finance Default Study And Rating Transitions
U.S. public finance
  • 2018 Annual U.S. Public Finance Default Study And Rating Transitions
  • 2017 Annual U.S. Public Finance Not-For-Profit Health Care Default Study And Rating Transitions
  • 2017 U.S. Public Finance Utility Default Study And Rating Transitions
  • 2017 U.S. Public Finance Transportation Default Study And Rating Transitions
  • 2017 Annual U.S. Public Finance Housing Default Study And Rating Transitions
  • 2017 Annual U.S. Public Finance Charter School Default Study And Rating Transitions
  • 2017 Annual U.S. Public Finance Higher Education And Nonprofit Organization Default Study And Rating Transitions
Sovereign and international public finance
  • 2018 Annual International Public Finance Default And Rating Transition Study
  • 2018 Annual Sovereign Default And Rating Transition Study

This report does not constitute a rating action.

Credit Markets Research:Sudeep K Kesh, New York (1) 212-438-7982;
sudeep.kesh@spglobal.com
Research Contributor:Lyndon Fernandes, CRISIL Global Analytical Center, an S&P affiliate, Mumbai

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