Key Takeaways
- The U.S. leads the default tally with five out of this year's six defaults thus far, with one default from Europe.
- With three out of six defaults, the media and entertainment sector leads the default tally for 2021 thus far.
- The 12-month-trailing speculative-grade default rate for the leisure time/media sector has been rising for 10 consecutive months, now at 7.6%, up from 1.7% at the end of March 2020.
Global corporate defaults in 2021 rise to six, with two defaults from the U.S. media and entertainment this week including:
- Missouri-based theatrical exhibition company AMC Entertainment Holdings Inc., and
- Minnesota-based marketing company The IMAGINE Group LLC.
So far in 2021, all six defaults have been from distressed exchanges, continuing the trend of the final quarter of 2020. Five of the six issuers were rated in the 'CCC' rating category after completing a distressed exchange transaction, reflecting our view of these issuers' challenge of ongoing and significant revenue challenges due to the COVID-19 pandemic.
In 2020, there were 31 defaults in the media and entertainment sector, the third highest among sectors. So far in 2021, the sector leads the default tally with three--two from the U.S. and one from Europe. Even with a broadly available vaccine, lingering consumer fears about returning to large public events will delay any return to normal or permanently alter sector dynamics. Recovery in the sector depends on the availability of the vaccine (see "Industry Top Trends 2021 Media and Entertainment: Sector Under Pressure From Secular Trends And Pandemic Fallout," Dec. 10, 2020).
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Table 1
U.S. Leads 2021 Corporate Default Tally, With Three | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Region | 12-month-trailing speculative-grade default rate (%) | 2021 | 2020 | 2019 | Weakest links | |||||||
U.S. | 6.6 | 3 | 146 | 78 | 338 | |||||||
Emerging market | 3.1 | 0 | 28 | 22 | 35 | |||||||
Europe | 5.3 | 1 | 42 | 15 | 85 | |||||||
Other developed | 5.9 | 0 | 10 | 3 | 24 | |||||||
Global | 5.5 | 4 | 226 | 118 | 482 | |||||||
Trailing-12-month default rates from Dec. 31, 2019 - Dec. 31, 2020, are preliminary and subject to change. Year-to-date data as of Jan. 20, 2021. Weakest link data is as of Dec. 28, 2020. Other developed region includes 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
The 2021 Global Corporate Default Tally At Six | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Date | Parent company | Country | Subsector | To | From | Reason | ||||||||
5-Jan-2021 |
HGIM Corp. |
U.S. | Oil and gas | SD | CC | Distressed exchange | ||||||||
6-Jan-2021 |
Promotora de Informaciones S.A. |
Spain | Media and entertainment | SD | CC | Distressed exchange | ||||||||
8-Jan-2021 |
Burger BossCo Intermediate Inc., |
U.S. | Retail/restaurants | SD | CCC | Distressed exchange | ||||||||
8-Jan-2021 |
Riverbed Parent Inc., |
U.S. | High technology | SD | CC | Distressed exchange | ||||||||
1/21/2021 |
AMC Entertainment Holdings Inc. |
U.S. | Media and entertainment | SD | CC | Distressed exchange | ||||||||
1/27/2021 |
Imagine Group LLC (The) |
U.S. | Media and entertainment | D | CCC | Distressed exchange | ||||||||
Data as of Jan. 20, 2021. SD--Selective default. Sources: S&P Global Ratings Research and S&P Global Market Intelligence’s CreditPro®. |
Related Research
- The Imagine Group LLC Downgraded To 'D' Following Completed Debt Recapitalization; Ratings Discontinued, Jan. 28, 2021
- AMC Entertainment Holdings Inc. Downgraded To 'SD' From 'CC' On Distressed Exchange; Debt Rating Lowered To 'D', Jan. 22, 2021
- The Elevated Weakest Links Tally May Signal Sustained Default Pressure In 2021, Jan. 19, 2021
- Industry Top Trends 2021: Oil And Gas, Dec. 10, 2020
- Industry Top Trends 2021: Retail and Restaurants, Dec. 10, 2020
- Industry Top Trends 2021: Technology, Dec. 10, 2020
- Industry Top Trends 2021: Media and Entertainment, Dec. 10, 2020
Default Studies
More analysis and statistics are available in our annual default studies, published on RatingsDirect:
Corporate (financial and nonfinancial)
- 2019 Annual Mexican National Scale Corporate And Public Finance Default And Rating Transition Study
- 2019 Annual Greater China Corporate Default And Rating Transition Study
- 2019 Annual Emerging Markets Corporate Default And Rating Transition Study
- 2019 Annual European Corporate Default And Rating Transition Study
- 2019 Annual Latin American Corporate Default And Rating Transition Study
- 2019 Annual Asia Corporate Default And Rating Transition Study
- 2019 Annual Global Financial Services Default And Rating Transition Study
- 2019 Annual U.S. Corporate Default And Rating Transition Study
- 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
- 2017 Annual Australia And New Zealand 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 Mexican Structured Finance Default And Rating Transition Study
- 2019 Annual European Structured Finance Default And Rating Transition Study
- 2019 Annual Global Leveraged Loan CLO Default And Rating Transition Study
- 2019 Annual Global Structured Finance Default And Rating Transition Study
- 2019 Annual Taiwan Structured Finance Default And Rating Transition Study
- 2019 Annual Japanese Structured Finance Default And Rating Transition Study
U.S. public finance
- 2019 Annual U.S. Public Finance Default And Rating Transition Study
- 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
- 2019 Annual International Public Finance Default And Rating Transition Study
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: | Lyndon Fernandes, CRISIL Global Analytical Center, an S&P affiliate, Mumbai |
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