The 2020 global corporate default tally has reached 91 after three companies defaulted this week, including Mexican retailer Grupo Famsa S.A.B. de C.V. and two U.K.-based offshore drilling contractors Noble Corp. PLC and Valaris plc. The oil and gas sector now leads the 2020 corporate default tally with 15 defaults but remains below both its 2016 and 2017 year-to-date tallies with 31 and 17, respectively. Nonetheless, the number of oil and gas weakest links (defined as issuers rated 'B-' or lower by S&P Global Ratings with negative outlooks or ratings on CreditWatch with negative implications) has risen to an all-time high of 62 (see chart 1). We can therefore expect the number of oil and gas defaults to also rise as default rates among weakest links are typically about eight times higher on average globally than default rates of total speculative-grade issuers (see "More Than One-Quarter Of Speculative-Grade Issuers Are Weakest Links, May 14, 2020).

Chart 1

This Week's Observations

• At this point in 2019 and 2018, there were 49 and 43 defaults, respectively.
• Two of the three defaults this week were due to missed interest and principal payments, which leads the overall tally so far in 2020 with 39.
• By region, the U.S. leads the default tally with 59, followed by emerging market, with 14.
• By sector, oil and gas, with 15, overtakes media and entertainment, with 14, to lead the global default tally.
• The 12-month-trailing speculative-grade default rate is estimated to increase for the U.S. to 4.6% in May 2020 from 4.1% in April 2020, while the same rate for the European region is estimated to increase to 2.8% in May 2020 from 2.7% in April 2020.

Chart 2

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Chart 5

Table 1

Table 2

Related Research

• Grupo Famsa Downgraded To 'SD' From 'CCC-' On Missed Interest And Principal Payments On 2020 Senior Unsecured Notes, Jun 03, 2020
• Noble Corp. PLC Downgraded To 'SD' On Distressed Debt Repurchase, June 3, 2020
• Valaris PLC Downgraded To 'D' From 'CCC-' On Missed Interest Payments On Senior Notes, June 4, 2020
• The U.S. Speculative-Grade Corporate Default Rate Is Likely To Reach 12.5% By March 2021, May 28, 2020
• U.S. Upstream Oil And Gas Rating Action Summary And Key Takeaways Following The March 2020 Hydrocarbon Price Deck Revision, May 19, 2020.
• Recession Likely Will Spur The European Speculative-Grade Default Rate To Rise Toward 8%, March 31, 2020
• Unrestrained Supply Swamps Oil Outlook: S&P Global Ratings Revises Oil & Gas Assumptions, March 9, 2020

Default Studies

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

Corporate (financial and nonfinancial)

• 2019 Annual Taiwan Ratings Corp. Corporate Default And Rating Transition Study
• 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 U.S. Corporate Default And Rating Transition Study
• 2018 Annual Asia Corporate Default And Rating Transition Study
• 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 Taiwan Structured Finance Default And Rating Transition Study
• 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

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

• 2019 Annual Sovereign Default And Rating Transition Study
• 2018 Annual International Public Finance Default And Rating Transition Study