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Default, Transition, and Recovery: The 2019 Corporate Default Tally Hits 100

The 2019 global corporate default tally reached 100 this week after the defaults of Dallas-based milk processor Dean Foods Co. and Colorado-based auto part manufacturer APC Automotive Technologies Intermediate Holdings LLC. In addition, we have revised our default tally due to a monthly reconciliation process to include Delaware-based auto supplier Dura Automotive Systems LLC, Pennsylvania-based retailer Destination Maternity Corp., and one confidential issuer.

The U.S. makes up the overwhelmingly largest percentage of this year's default tally, with 70%. The U.S. speculative-grade default rate has increased so far in 2019, to 2.8% in September from 2.3% in January (see chart 1). Current financial and credit environment indicators, including an inverted yield curve, a weaker speculative-grade ('BB+' or lower) rating distribution, and an increase in 'B-' first-time-rated issuers, suggest the default rate could reach 10% or higher by late 2020-2022 (see "A Double-Digit U.S. Default Rate Could Be On The Horizon," Oct. 2, 2019).

Chart 1

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This Week's Observations

  • Of the five additions to this week's tally, four are from the U.S., and two of these are from the auto sector.
  • The global 12-month trailing speculative-grade default rate has increased in 2019, to 2.3% in September from 2% in January, largely due to an increase in U.S. defaults.
  • Oil and gas and the retail and restaurants sector lead defaults in the U.S. with 16 and 13, respectively.
  • Bankruptcy-related defaults have increased this year, reaching a total of 28--already the second-highest number of bankruptcy-related defaults since 2009, trailing only 2016, when there were 29.

Chart 2

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Chart 3

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Chart 4

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Table 1

We Estimate The U.S. And European Default Rates Increased In October
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. 3.0* 70 43 47 177
Emerging markets 1.4 15 16 17 47
Europe 2.2* 12 10 13 36
Other developed 1.9 3 5 5 3
Global 2.3 100 74 82 263
Notes: Other developed region consists of Australia, Canada, Japan, and New Zealand. Default counts may include confidentially rated issuers. *Trailing-12-month default rates from Oct. 31, 2018-Oct. 31, 2019, are preliminary and subject to change. Year-to-date data as of Nov. 13, 2019. Weakest link data as of Sept. 23, 2019. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®.

Table 2

Five Defaults Take The 2019 Global Corporate Default Tally To 100 This Week
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.) (A) 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. (B) 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
10/17/2019 Dura Automotive Systems LLC U.S. Automotive D NR Chapter 11
10/21/2019 Destination Maternity Corp. U.S. Retail/restaurants D NR Chapter 11
10/27/2019 Confidential Confidential Consumer products D CCC+ Confidential
10/31/2019 Foresight Energy L.P. (Murray Energy Corp.) U.S. Metals, mining, and steel SD CCC- Missed interest payments
10/31/2019 One Call Corp. (One Call Care Management Inc.) (B) U.S. Insurance SD CC Distressed exchange
11/6/2019

Hovnanian Enterprises Inc.

U.S. Homebuilders/real estate companies SD CCC+ Distressed exchange
11/12/2019

Dean Foods Co.

U.S. Consumer products D CCC+ Chapter 11
11/13/2019 APC Automotive Technologies Intermediate Holdings LLC U.S. Automotive SD CC Distressed exchange
NR--Not rated. SD--Selective default. Data as of Nov. 13, 2019. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®.

Related Research

  • APC Automotive Technologies Intermediate Holdings Downgraded To 'SD' On Distressed Exchange; Debt Rating Lowered To 'D', Nov. 13, 2019
  • Dean Foods Co. Downgraded To 'D' On Chapter 11 Filing, Nov. 12, 2019

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 European Structured Finance Default And Rating Transition Study
  • 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
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:Nicole Serino, New York;
nicole.serino@spglobal.com
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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