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Default, Transition, and Recovery: Corporate Defaults Slowed In August

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Default, Transition, and Recovery: Spotlight On U.S. Defaults In October

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Default, Transition, and Recovery: European Speculative-Grade Default Rate Should Fall To 4.25% By September 2025

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Default, Transition, and Recovery: U.S. Speculative-Grade Corporate Default Rate To Fall Further To 3.25% By September 2025

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Credit Trends: U.S. Public Finance Credit Quality: Obligors' Finances Drove Rating Actions In The Third Quarter


Default, Transition, and Recovery: Corporate Defaults Slowed In August

The 2020 global corporate default tally increased by one to 163 as of Sept. 2, 2020. Since our last report, we added one confidential issuer to the tally due to a monthly reconciliation exercise.

The pace of defaults slowed in August to 10, compared with the previous four-month average of 30.5 defaults per month. However, this is not atypical--we have observed that August is a slower month historically for defaults. We expect the pace of defaults to pick up amid the continued impact of COVID-19 on economic and credit conditions.

The U.S. region continues to lead the tally with 109 defaults--the region's highest number of defaults since 2009, when the U.S. total hit 155 at this point in the year (see chart 1). S&P Global Ratings Research expects the U.S. trailing-12-month speculative-grade corporate default rate to rise to 12.5% by June 2021 from 5.4% as of June 2020 (see "The Gap Between Market Expectations And Credit-Based Indications Of U.S. Defaults Is Growing," Aug 27, 2020).

Chart 1

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This Week's Observations

The pace of defaults slowed in August, with no defaults in the past week.

  • By region, the U.S. leads the default tally in 2020, with 109, followed by Europe, with 23.
  • By sector, oil and gas sector leads the default tally in 2020, with 33, followed by the consumer products and media and entertainment sectors, with 27 and 25, respectively (see chart 2).
  • We expect the 12-month-trailing speculative-grade default rate for the U.S. region to increase to 6.2% in August 2020 from 5.9% in July 2020, while the same for the European region is expected to rise to 3.8% from 3.6% (see table 1).

Chart 2

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Chart 3

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Chart 4

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Chart 5

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Table 1

The U.S. Leads 2020 Year-To-Date Defaults With 109
Region 12-month-trailing speculative-grade default rate (%) 2020 year-to-date 2019 year-to-date 2019 Weakest links
U.S. 6.2* 109 52 78 418
Emerging market 3.2 22 12 22 45
Europe 3.8* 23 8 15 99
Other developed 5.3 9 3 3 27
Global 4.8 163 75 118 589
*Trailing-12-month default rates from Aug. 31, 2019-Aug. 31, 2020, are preliminary and subject to change. Year-to-date data as of Sept. 2. Weakest link data is as of July 17, 2020. Other developed region is Australia, Canada, Japan, and New Zealand. Default counts may include confidentially rated issuers. Sources: S&P Global Ratings Research and S&P Global Market Intelligence’s CreditPro®.

Table 2

Global Corporate Defaults Total 163 In 2020
Date Parent company Country Subsector To From Reason
1/2/2020

Constellis Holdings LLC

U.S. Aerospace and defense SD CC Missed principal payments
1/7/2020

TOMS Shoes LLC

U.S. Consumer products D CCC Distressed exchange
1/9/2020

Moran Foods LLC (SAL Acquisition Corp.)

U.S. Retail/restaurants SD CCC Missed interest payments
1/13/2020

Lecta S.A.

Luxembourg Forest products and building materials SD CC Missed interest payments
1/14/2020

Qinghai Provincial Investment Group Co. Ltd.

China Metals, mining, and steel D CCC- Missed interest payments
1/19/2020

Krystal Co. (The)

U.S. Retail/restaurants D NR Chapter 11
1/21/2020

Panda Green Energy Group Ltd.

Bermuda Utilities SD CC Distressed exchange
1/22/2020

Deoleo S.A.

Spain Consumer products SD CC Distressed exchange/ out-of-court restructuring
1/29/2020

Doncasters Group Ltd.

U.K. Capital goods SD CCC- Distressed exchange/ out-of-court restructuring
1/30/2020

Pinnacle Operating Corp.

U.S. Chemicals, packaging, and environmental services SD CCC Distressed exchange/ out-of-court restructuring
2/7/2020

Commercial Barge Line Co.

U.S. Transportation D CC Chapter 11
2/12/2020

RentPath LLC

U.S. Media and entertainment D NR Chapter 11
2/13/2020

The McClatchy Co.

U.S. Media and entertainment D CC Chapter 11
2/14/2020

Moby SpA

Italy Transportation SD CCC- Distressed exchange/ out-of-court restructuring
2/14/2020

NPC International Inc.

U.S. Retail/restaurants SD CCC- Missed interest payments
2/18/2020

Pier 1 Imports Inc.

U.S. Retail/restaurants D CCC- Chapter 11
2/21/2020

Tunghsu Group Co. Ltd.

China High technology SD CCC- Missed principal and interest payments
2/24/2020

VIP Cinema Holdings Inc.

U.S. Consumer products D CCC- Chapter 11
2/25/2020

Calfrac Well Services Ltd.

Canada Oil and gas SD CC Distressed exchange
2/28/2020

PFS Holding Corp.

U.S. Consumer products SD CCC- Missed interest payments
3/3/2020

Pioneer Energy Services Corp.

U.S. Oil and gas D CCC- Chapter 11
3/9/2020

Bluestem Brands Inc.

U.S. Retail/restaurants D NR Chapter 11
3/12/2020

Ascena Retail Group Inc. (A)

U.S. Consumer products SD CCC Distressed exchange
3/12/2020

Optimas OE Solutions Holding LLC

U.S. Capital goods SD CCC+ Distressed exchange
3/12/2020 Confidential Confidential Metals, mining, and steel SD CCC- Confidential
3/16/2020

Frontier Communications Corp.

U.S. Telecommunications SD CCC- Missed interest payments
3/17/2020

Internap Corp.

U.S. Telecommunications D CCC+ Chapter 11
3/19/2020

Geo Energy Resources Ltd.

Singapore Metals, mining, and steel SD B- Distressed exchange
3/20/2020

Grain Insurance Co. JSC

Kazakhstan Insurance D B Missed interest payments
3/27/2020

Optiv Inc.

U.S. High technology SD CCC+ Distressed exchange
3/27/2020

Yida China Holdings Ltd.

Cayman Islands Homebuilders/real estate companies SD CC Distressed exchange
4/1/2020

PGX Holdings Inc.

U.S. Media and entertainment D CCC Missed principal and interest payments
4/1/2020

Steak n Shake Inc. (Biglari Holdings Inc.)

U.S. Retail/restaurants SD CCC- Distressed exchange
4/1/2020

Whiting Petroleum Corp.

U.S. Oil and gas D CCC+ Chapter 11
4/2/2020

KCA DEUTAG Alpha Ltd.

U.K. Oil and gas SD CCC+ Missed interest payments
4/3/2020

CDS Group

Canada Media and entertainment D CCC- Missed principal and interest payments
4/3/2020

New Millennium Holdco Inc

U.S. Health care D CC Missed principal and interest payments
4/6/2020

BW Homecare Holdings LLC

U.S. Health care SD CCC Distressed exchange
4/6/2020

FE Investments Ltd. (FE Investments Group Ltd.)

New Zealand Finance companies D CCC Missed interest payments
4/7/2020

Gavilan Resources LLC

U.S. Oil and gas D CCC- Missed interest payments
4/7/2020

Jason Inc.

U.S. Capital goods SD CCC Missed interest payments
4/7/2020

Quorum Health Corp.

U.S. Health care D CCC- Chapter 11
4/7/2020

Speedcast International Ltd.

Australia Telecommunications D CCC Missed principal and interest payments
4/8/2020

North American Lifting Holdings Inc.

U.S. Capital goods SD CCC- Missed interest payments
4/8/2020

SPR Holdings LLC

U.S. Oil and gas D CCC+ Missed interest payments
4/9/2020 Confidential Confidential Media and entertainment SD CC Confidential
4/10/2020

Vestel Elektronik Sanayi Ve Ticaret A.S.

Turkey High technology SD CCC+ Distressed exchange
4/10/2020 Confidential Confidential Media and entertainment D CCC- Confidential
4/12/2020

Pace Industries Inc.

U.S. Consumer products D NR Chapter 11
4/14/2020

LSC Communications Inc.

U.S. Media and entertainment D CC Chapter 11
4/14/2020

Libbey Inc.

U.S. Consumer products SD CCC Missed interest payments
4/14/2020

NMC Health PLC

U.A.E. Health care D CCC- Missed interest payments
4/15/2020

Intelsat S.A.

Luxembourg Telecommunications SD CCC+ Missed interest payments
4/16/2020

O1 Properties Ltd.

Cyprus Homebuilders/real estate companies D CC Missed interest payments
4/16/2020

J.C. Penney Co. Inc.

U.S. Retail/restaurants D CCC Missed interest payments
4/17/2020

Mister Car Wash Holdings Inc.

U.S. Retail/restaurants SD CCC+ Distressed exchange
4/17/2020

Ultra Petroleum Corp.

U.S. Oil and gas D CCC- Missed interest payments
4/21/2020

Engine Holding LLC

U.S. Media and entertainment D CCC- Missed principal and interest payments
4/22/2020

The Neiman Marcus Group LLC

U.S. Retail/restaurants D CCC- Missed interest payments
4/23/2020

Northwest Acquisitions ULC

Canada Metals, mining, and steel D CCC+ Foreign Bankruptcy
4/24/2020

Diamond Offshore Drilling Inc.

U.S. Oil and gas D CC Chapter 11
4/24/2020

Enjoy S.A.

Chile Media and entertainment D B- Bankruptcy
4/28/2020

Envision Healthcare Corp. (Envision Healthcare Holdings Inc.)

U.S. Health care SD CC Distressed exchange
4/29/2020

CSM Bakery Solutions LLC

U.S. Consumer products SD CCC Distressed exchange
4/30/2020

Virgin Australia Holdings Ltd.

Australia Transportation D CC Chapter 15
5/4/2020

J. Crew Group Inc.

U.S. Consumer products D CCC- Chapter 11
5/5/2020

Evergreen Skills Lux S.ar.l.

Luxembourg High technology D CCC- Missed interest payments
5/6/2020 Confidential Confidential Media and entertainment D CCC Confidential
5/6/2020

Techniplas LLC

U.S. Capital goods D NR Chapter 11
5/7/2020

Hertz Global Holdings Inc.

U.S. Transportation SD CCC- Missed principal and interest payments
5/8/2020

Petra Diamonds Ltd.

Bermuda Metals, mining, and steel D CCC+ Missed interest payments
5/11/2020

Avianca Holdings S.A.

Panama Transportation D CCC- Chapter 11
5/11/2020

Yihua Enterprise (Group) Co. Ltd.

China Consumer products SD CCC Missed interest payments
5/12/2020

Fieldwood Energy LLC

U.S. Oil and gas D CCC Missed interest payments
5/12/2020

Revlon Inc.

U.S. Consumer products SD CC Distressed exchange
5/13/2020

Outerstuff LLC

U.S. Consumer products SD CCC Missed principal and interest payments
5/14/2020 Confidential Confidential Media and entertainment SD CCC- Confidential
5/15/2020

Extraction Oil & Gas Inc. (Extraction Oil & Gas Holdings LLC)

U.S. Oil and gas D CC Missed interest payments
5/15/2020

Forum Energy Technologies Inc. (A)

U.S. Oil and gas SD CC Distressed exchange
5/17/2020 Confidential Confidential Transportation D NR Confidential
5/19/2020

Aeropuertos Argentina 2000 S.A.

Argentina Utilities SD CC Distressed exchange
5/19/2020

Takko Fashion S.a.r.l.

Luxembourg Consumer products SD CCC+ Missed interest payments
5/19/2020 Confidential Confidential Capital goods D NR Confidential
5/20/2020

Downstream Development Authority

U.S. Media and entertainment SD CCC Missed principal payments
5/20/2020

Equinox Holdings Inc.

U.S. Media and entertainment SD CCC Distressed exchange
5/21/2020

Akorn Inc.

U.S. Health care D CC Chapter 11
5/21/2020

Centennial Resource Development Inc.

U.S. Oil and gas SD CC Distressed exchange
5/21/2020

Guitar Center Inc. (Guitar Center Holdings Inc.)

U.S. Retail/restaurants SD CCC Distressed exchange
5/25/2020

Travelex Holdings Ltd.

U.K. Media and entertainment SD CC Missed interest payments
5/26/2020

Unit Corp.

U.S. Oil and gas D CC Chapter 11
5/27/2020

Latam Airlines Group S.A.

Chile Transportation D CCC- Chapter 11
5/27/2020

Tuesday Morning Corp.

U.S. Retail/restaurants D NR Chapter 11
6/2/2020

Grupo Famsa S.A.B. de C.V.

Mexico Retail/restaurants SD CCC- Missed principal and interest payments
6/2/2020

Noble Corp. PLC (A)

U.K. Oil and gas SD CCC- Distressed exchange
6/3/2020

Valaris plc

U.K. Oil and gas D CCC- Missed interest payments
6/4/2020

California Pizza Kitchen Inc.

U.S. Retail/restaurants D CCC- Missed interest payments
6/5/2020

24 Hour Fitness Worldwide Inc.

U.S. Media and entertainment D CCC+ Missed interest payments
6/5/2020

APC Automotive Technologies Intermediate Holdings, LLC

U.S. Automotive D CCC Chapter 11
6/5/2020 Confidential Confidential Consumer products SD CCC- Confidential
6/5/2020 Confidential Confidential Consumer products SD CC Confidential
6/10/2020

RGIS Holdings LLC

U.S. Consumer products D CCC- Missed interest payments
6/10/2020 Confidential Confidential Media and entertainment D CCC- Confidential
6/11/2020 Confidential Confidential Media and entertainment D CCC Confidential
6/15/2020

Calfrac Well Services Ltd. (B)

Canada Oil and gas D CCC- Missed interest payments
6/15/2020

Pyxus International Inc.

U.S. Consumer products D CCC- Chapter 11
6/15/2020

SM Energy Co.

U.S. Oil and gas SD CC Distressed exchange
6/16/2020

Briggs & Stratton Corp.

U.S. Capital Goods SD CCC- Missed interest payments
6/16/2020

CSI Compressco LP

U.S. Midstream SD CC Distressed exchange
6/16/2020

Ferrellgas Partners L.P.

U.S. Midstream SD CC Missed principal payments
6/16/2020

Source Energy Services Ltd.

Canada Oil and gas D CCC- Missed interest payments
6/18/2020

Confidential

Confidential Retail/restaurants SD CCC Confidential
6/18/2020

ASP MCS Acquisition Corp.

U.S. Consumer products D CCC Missed interest payments
6/18/2020

Jo-ann Stores LLC (Jo-Ann Stores Holdings Inc)

U.S. Retail/restaurants SD CCC Distressed exchange
6/18/2020

Confidential

Confidential Homebuilders/real estate companies D CC Confidential
6/18/2020

Confidential

Confidential Retail/restaurants D CCC Confidential
6/19/2020

Chesapeake Energy Corp.

U.S. Oil and gas D CC Missed interest payments
6/19/2020

GK Holdings Inc.

U.S. Media and entertainment D CC Missed interest payments
6/23/2020

Boart Longyear Ltd.

Australia Metals, mining, and steel SD CC Distressed exchange
6/23/2020

Serta Simmons Bedding LLC

U.S. Consumer products SD CC Distressed exchange
6/23/2020

Summit Midstream Partners L.P.

U.S. Midstream SD CCC Distressed exchange
6/24/2020

GNC Holdings Inc.

U.S. Retail/restaurants D CC Chapter 11
6/25/2020

CEC Entertainment Inc.

U.S. Retail/restaurants D CC Chapter 11
6/25/2020

W&T Offshore Inc.

U.S. Oil and gas SD CCC+ Distressed exchange
6/30/2020

Covia Holdings Corp (SCR-Sibelco NV)

U.S. Metals, mining, and steel D CCC+ Chapter 11
7/1/2020

California Resources Corp.

U.S. Oil and gas D CC Missed interest payments
7/1/2020

Grupo Aeromexico S.A.B. de C.V.

Mexico Transportation D B- Chapter 11
7/1/2020

Grupo Posadas S.A.B. de C.V.

Mexico Media and entertainment D CC Missed interest payments
7/2/2020

Denbury Resources Inc.

U.S. Oil and gas D CCC+ Missed interest payments
7/2/2020

Lonestar Resources U.S. Inc.

U.S. Oil and gas D CCC- Missed interest payments
7/2/2020

Confidential

Confidential Media and entertainment SD CCC Confidential
7/2/2020

Tailored Brands Inc.

U.S. Consumer products D CCC+ Missed interest payments
7/7/2020

Confidential

Confidential Homebuilders/real estate companies D CC Confidential
7/8/2020

PT Modernland Realty Tbk.

Indonesia Homebuilders/real estate companies SD CCC- Missed principal payments
7/10/2020

Tupperware Brands Corp.

U.S. Consumer products SD CC Distressed exchange
7/13/2020

Hi- Crush Inc.

U.S. Metals, mining, and steel D CC Chapter 11
7/13/2020

Confidential

Confidential Oil and gas D CC Confidential
7/16/2020

Chaparral Energy Inc.

U.S. Oil and gas D CCC- Missed interest payments
7/17/2020

Bruin E&P Partners, LLC

U.S. Oil and gas D CC Chapter 11
7/17/2020

Noble Corp. PLC (B)

U.K. Oil and gas D CCC- Missed interest payments
7/17/2020

Seadrill Partners LLC (Seadrill Ltd.)

Marshall Islands Oil and gas SD CCC Missed interest payments
7/20/2020

Confidential

Confidential Forest products and building materials SD CC Confidential
7/20/2020

Renfro Corp.

U.S. Consumer products SD CCC- Distressed exchange
7/20/2020

Confidential

Confidential Oil and gas D NR Confidential
7/22/2020

Global Eagle Entertainment Inc.

U.S. Telecommunications D CCC- Chapter 11
7/23/2020

Ascena Retail Group Inc. (B)

U.S. Consumer products D CCC- Chapter 11
7/23/2020

Lakeland Holdings LLC

U.S. Media and entertainment D CCC- Chapter 11
7/27/2020

Party City Holdings Inc. (PC Nextco Holdings LLC)

U.S. Retail/restaurants SD CC Distressed exchange
7/28/2020

CB Poly Investments LLC

U.S. Consumer products SD B- Distressed exchange
7/28/2020

Never Slip Topco Inc.

U.S. Consumer products D CCC Distressed exchange
7/30/2020

Confidential

Confidential Media and entertainment D CCC- Confidential
7/30/2020

Missouri TopCo Ltd.

U.K. Consumer products SD CCC- Distressed exchange
7/30/2020

Nostrum Oil and Gas PLC

U.K. Oil and gas SD CCC- Missed interest payments
7/30/2020

Mood Media Corp.

U.S. Media and entertainment D NR Chapter 11
8/3/2020

AMC Entertainment Holdings Inc.

U.S. Media and entertainment SD CC Distressed exchange
8/4/2020

Forum Energy Technologies Inc. (B)

U.S. Oil and gas SD CC Distressed exchange
8/6/2020

PIZZAEXPRESS FINANCING 1 PLC

U.K. Retail/restaurants D CC Missed interest payments
8/6/2020

Transocean Ltd.

Switzerland Oil and gas SD CCC Distressed exchange
8/10/2020

UTEX Industries Inc.

U.S. Oil and gas D CCC Missed interest payments
8/14/2020

Martin Midstream Partners L.P.

U.S. Midstream SD CC Distressed exchange
8/19/2020

Omnimax International Inc.

U.S. Forest products and building materials D CCC- Missed principal payments
8/21/2020

Northwest Hardwoods Inc.

U.S. Forest products and building materials SD CCC- Missed interest payments
8/24/2020

KCIBT Holdings LP

U.S. Consumer products SD CCC+ Distressed exchange
8/26/2020

Town Sports International Holdings Inc.

U.S. Media and entertainment SD CC Missed revolver payment
NR--Not rated. SD--Selective default. Data as of Sept. 2, 2020. (B) designation indicates the issuers second default for 2020. Sources: S&P Global Ratings Research and S&P Global Market Intelligence’s CreditPro®.

Related Research

Default Studies

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

Corporate (financial and nonfinancial)
Structured finance
U.S. public finance
Sovereign and international public finance

This report does not constitute a rating action.

Credit Markets Research: Nicole Serino, New York + 1 (212) 438 1396;
nicole.serino@spglobal.com
Sudeep K Kesh, New York (1) 212-438-7982;
sudeep.kesh@spglobal.com
Research Contributor: Shripati Pranshu, Mumbai;
shripati.pranshu@spglobal.com

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