The 2020 global corporate default tally has reached 62--half of which were in April including five defaults this week. Three of these defaults were U.S.-based. The defaulters were Canadian-based diamond company Northwest Acquisitions ULC, Houston-based contract drilling service provider Diamond Offshore Drilling Inc., Chilean-based casino operator Enjoy S.A., Tennessee-based health care service provider Envision Healthcare Corp., and Kansas-based bakery products producer CSM Bakery Solutions LLC.

Chart 1

With the month coming to a close, April has now seen just as many defaults as the first three months of the year combined (31 in total). The sectors with the most defaults in April have been the media and entertainment, and oil and gas sectors with six defaults each as extended coronavirus-containment measures have had a major effect on corporations, especially for issuers in the industries at the lower end of the rating scale most exposed to COVID-19-related risk. These sectors also experienced a large number of issuers with downgrades in April due to COVID-19 and the collapse of oil prices (see chart 2).

Although our economic forecasts continue to worsen, financing conditions have been gradually improving as central banks and governments around the world have enacted liquidity and helped stabilized financial markets. However, as we entered the pandemic with a record level of issuers rated 'B' and below, we can expect the speculative-grade default rate to rise to 10% within the next 12 months (see "Global Credit Conditions: Rising Credit Pressures Amid Deeper Recession, Uncertain Recovery Path," April 22, 2020).

Chart 2

This Week's Observations

• There were 31 defaults in April, the same number of defaults in the entire first quarter of 2020.
• April defaults were led by the media and entertainment, and oil and gas sectors, with six each, followed by health care, with five, and retail and restaurants, with four.
• At this point in 2019 and 2018, there had been 42 and 32 defaults respectively.
• By region, the U.S. leads the default tally, with 42, followed by emerging markets, with eight, and the European region, with seven.
• Missed interest and principle payments lead reasons for defaults in 2020 so far with 26, followed by distressed exchanges, with 20.

Chart 3

Chart 4

Chart 5

Table 1

Table 2

Related Research

• COVID-19 Weekly Digest, April 29, 2020
• CSM Bakery Solutions LLC Downgraded To 'SD' On Maturity Extension; Debt Ratings Lowered, April 29, 2020
• Envision Healthcare Corp. Downgraded To 'SD', Debt To 'D' On Distressed Exchange, April 29, 2020
• Enjoy S.A. Rating Lowered To 'D' From 'B-' On Judicial Reorganization Filing, April 25, 2020
• Northwest Acquisitions ULC Downgraded To 'D' From 'CCC+' On Filing For Insolvency Protection, April 24, 2020
• Diamond Offshore Drilling Inc. Downgraded To 'D' On Weakening Market Conditions And Missed Interest Payment, April 24, 2020
• Credit Conditions North America: Pressures Persist, Risks Resound, April 23, 2020
• Global Credit Conditions: Rising Credit Pressures Amid Deeper Recession, Uncertain Recovery Path, April 22, 2020
• The Global Recession Is Likely To Push The U.S. Default Rate To 10%, March 19, 2020

Default Studies

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

Corporate (financial and nonfinancial)

• 2019 Annual Global Corporate Default And Rating Transition Study
• Japanese Issuer Credit Rating Transitions Study 2019
• 2018 Annual Infrastructure Default And Rating Transition Study
• 2018 Annual Mexican National Scale Corporate And Public Finance Default And Rating Transition Study
• 2018 Annual Latin American Corporate Default And Rating Transition Study
• 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 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

Structured finance

• 2019 Annual Japanese Structured Finance Default And Rating Transition Study
• 2018 Annual Mexican Structured Finance Default And Rating Transition Study
• 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

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