The global corporate default tally in 2021 has risen to eight, following two defaults from U.S. companies:
- North Carolina-based department store chain Belk Inc.
- Missouri-based coal mining company Peabody Energy Corp.
Although it's still early in the year, the global default tally is below the year-to-date totals for each of the past three years (at 10 each).
By industry, the media and entertainment sector continues to lead defaults so far with three, followed by retail with two--both reflecting larger numbers of issuers with higher leverage and lower ratings, as well as limited revenue growth capacity for lodging, leisure, in-store purchases for retail chains, and dining in restaurants due to COVID-19 safety measures. Default rates in both the consumer services and leisure time/media sectors remain well above pre-pandemic levels but have begun to show signs of slowing, supported somewhat by stronger liquidity prospects despite revenue challenges (see chart 1).
Chart 1
This Week's Observations
- Distressed exchanges lead with nearly 90% of defaults, continuing the trend of the final quarter of 2020 (see chart 3).
- By region, the U.S. has dominated the default tally so far with seven out of this year's eight defaults, with the remaining default from Europe (see chart 4).
- Despite a slower start to the year, we expect the number of defaults to pick up, with the U.S. trailing-12-month speculative-grade default rate increasing to 9% as of September 2021.
Chart 2
Chart 3
Chart 4
Chart 5
Table 1
U.S. Default Rate For January Estimated At 6.6%; Europe At 5.0% | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Global corporate default summary | ||||||||||||
Region | 12-month trailing speculative-grade default rate (%) | 2021 default tally | 2020 default tally | 2019 default tally | Weakest links tally | |||||||
U.S. | 6.6* | 7 | 146 | 78 | 338 | |||||||
Emerging markets | 3.1 | 0 | 28 | 22 | 35 | |||||||
Europe | 5.0* | 1 | 42 | 15 | 85 | |||||||
Other developed | 5.9 | 0 | 10 | 3 | 24 | |||||||
Global | 5.5 | 4 | 226 | 118 | 482 | |||||||
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 Jan. 31, 2020-Jan. 31, 2021, are preliminary and subject to change. Year-to-date data as of Feb. 3, 2021. Weakest link data as of Dec. 28, 2020. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®. |
Table 2
The 2021 Global Corporate Default Tally Rises To Eight | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Date | Parent company | Country | Subsector | To | From | Reason | ||||||||
1/5/2021 |
HGIM Corp. |
U.S. | Oil and gas | SD | CC | Distressed exchange | ||||||||
1/6/2021 |
Promotora de Informaciones S.A. |
Spain | Media and entertainment | SD | CC | Distressed exchange | ||||||||
1/8/2021 |
Burger BossCo Intermediate Inc. |
U.S. | Retail/restaurants | SD | CCC | Distressed exchange | ||||||||
1/8/2021 |
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 | ||||||||
2/2/2021 |
Belk Inc. |
U.S. | Retail/restaurants | D | CC | Missed interest payments | ||||||||
2/3/2021 |
Peabody Energy Corp. |
U.S. | Metals, mining, and steel | SD | CC | Distressed exchange | ||||||||
SD--Selective default. Data as of Feb. 3, 2021. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®. |
Related Research
- Peabody Energy Corp. Downgraded To 'SD' From 'CC' Following Distressed Exchange; 2022 Notes Rating Lowered To 'D', Feb. 3, 2021
- Belk Inc. Downgraded To 'D' From 'CC' Following Missed Debt Service Payments, Feb. 2, 2021
- The Elevated Weakest Links Tally May Signal Sustained Default Pressure In 2021, Jan. 19, 2021
- Industry Top Trends 2021: Media And Entertainment, Dec. 10, 2020
- 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
- The U.S. Speculative-Grade Corporate Default Rate Could Rise To 9% By September 2021, Nov. 23, 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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