articles Ratings /ratings/en/research/articles/210304-default-transition-and-recovery-the-2021-global-corporate-default-tally-rises-to-17-after-two-emerging-mar-11864783 content esgSubNav
In This List
COMMENTS

Default, Transition, and Recovery: The 2021 Global Corporate Default Tally Rises To 17 After Two Emerging Market Defaults

COMMENTS

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

COMMENTS

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

COMMENTS

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

COMMENTS

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


Default, Transition, and Recovery: The 2021 Global Corporate Default Tally Rises To 17 After Two Emerging Market Defaults

The global corporate default tally has increased to 17 after two issuers defaulted since our last report. The defaulters are:

  • Argentina-based oil and gas company YPF S.A., and
  • Cayman Islands-incorporated (China-based) real estate developer Sunshine 100 China Holdings Ltd.

We have also revised our default tally in a monthly reconciliation process to include Oregon-based digital media and marketing company Alpha Media LLC.

By region, the U.S. leads the default tally with 12, followed by Europe with four. The Argentina-based oil and gas company YPF S.A. and China-based real estate developer Sunshine 100 China Holdings Ltd. are the first defaults from the emerging markets region so far in 2021.

With an additional default this week, the oil and gas sector's year-to-date tally has reached three, one each from the U.S., Europe, and Emerging markets regions (see chart 1). The sector led the year-end default tally in both 2020 and 2019 with 50 and 20 defaults, respectively, and continues to face downward rating pressure and the potential for continued defaults in 2021 from lower demand due to a gradual economic recovery despite rising crude oil prices. Among 50 oil and gas sector defaults last year, 10 were from the European region and were primarily based in the U.K. We expect the 12-month-trailing speculative-grade default rate for Europe to rise to 6.5% by December 2021 from 5.3% in December 2020, with 47 defaults (see "The European Speculative-Grade Corporate Default Rate Could Reach 6.5% By December 2021," Feb. 26, 2021).

Chart 1

image

This Week's Observations

  • By region, the U.S. is leading the default tally, with 12 out of 17 defaults in 2021 so far, followed by Europe with four (see chart 3).
  • The media and entertainment sector leads 2021 defaults, with four, followed by retail and restaurants (3) and oil and gas (3). These three sectors contribute to about 60% of the 2021 defaults (see chart 2).
  • The 12-month-trailing speculative-grade default rate for the U.S. is estimated to decrease to 6.4% in February 2021 from 6.6% in January 2021, whereas the same for the European region is estimated to increase to 5.4% in February 2021 from 5.0% in January 2021 (see table 1).
  • Distressed-exchange-related defaults lead the tally so far in 2021, with 12, followed by bankruptcies, and missed interest and principal payment-related defaults, with two each (see chart 4).

Chart 2

image

Chart 3

image

Chart 4

image

Chart 5

image

Table 1

European 12-Month-Trailing Speculative-Grade Default Rate Estimated To Rise To 5.4% In February 2021
12-month-trailing speculative-grade default rate (%) 2021 2020 2019 Weakest links
U.S. 6.4* 12 146 78 322
Emerging market 3.1 1 28 22 35
Europe 5.4* 4 42 15 84
Other developed 6.0 0 10 3 25
Global 5.4 17 226 118 466
Note: *Trailing-12-month default rates from Feb. 29, 2020, to Feb. 28, 2021, are preliminary and subject to change. Year-to-date data as of March 3, 2021. Weakest link data is as of Jan. 31, 2021. 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 Rises To 17
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
1/25/2021

Awesome Acquisition Co. L.P.

U.S. Retail/restaurants D NR Chapter 11
1/25/2021

Alpha Media LLC

U.S. Media and entertainment D NR Bankruptcy
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
2/11/2021 Confidential Confidential Automotive D CCC- Confidential
2/11/2021

Vallourec

France Oil and gas SD CC Missed principal payments
2/19/2021

Renfro Corp.

U.S. Consumer products SD CCC- Distressed exchange
2/22/2021

CatLuxe Sarl (CatLuxe Acquistion Sarl)

Luxembourg Consumer products SD CCC+ Distressed exchange
2/22/2021

Form Technologies LLC

U.S. Capital goods SD CC Distressed exchange
2/26/2021

YPF S.A

Argentina Oil and gas SD CC Distressed exchange
3/2/2021

Sunshine 100 China Holdings Ltd.*

Cayman Islands Homebuilders/real estate companies SD CCC- Distressed exchange
NR--Not rated. SD--Selective default. Data as of March 3, 2021. Sources: S&P Global Ratings Research and S&P Global Market Intelligence’s CreditPro®. *Sunshine 100 China Holdings Ltd. is incorporated in the Cayman Islands but invests, develops, and manages real estate properties in the People’s Republic of China. Companies incorporated in the Cayman Islands are included in the U.S. default rate computation due to the location as a U.S. tax haven.

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

No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.

Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P’s opinions, analyses and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.

To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw or suspend such acknowledgment at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.

S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.standardandpoors.com/usratingsfees.

Any Passwords/user IDs issued by S&P to users are single user-dedicated and may ONLY be used by the individual to whom they have been assigned. No sharing of passwords/user IDs and no simultaneous access via the same password/user ID is permitted. To reprint, translate, or use the data or information other than as provided herein, contact S&P Global Ratings, Client Services, 55 Water Street, New York, NY 10041; (1) 212-438-7280 or by e-mail to: research_request@spglobal.com.


 

Create a free account to unlock the article.

Gain access to exclusive research, events and more.

Already have an account?    Sign in