The global corporate default tally has increased to 25 after U.K.-based commercial passenger aircraft leasing company Avation PLC defaulted. With this default, the tally in Europe has reached eight--half of which have occurred in March--and an all-time high first-quarter total. Over half of the defaults so far in the region have been distressed exchanges as issuers look for ways to avoid bankruptcy and reduce their debt burdens or extend their upcoming maturities. However, financing conditions remain largely accommodative throughout the region as the number of quarterly defaults has slowed considerably since 2020 (see chart 1).
We estimate the 12-month-trailing speculative-grade default rate for Europe increased to 5.9% in March 2021 from 5.4% in February 2021. We expect the 12-month-trailing speculative-grade default rate to rise to 6.5% by December 2021 (see "The European Speculative-Grade Corporate Default Rate Could Reach 6.5% By December 2021," Feb. 25, 2021).
Chart 1
This Week's Observations
- Globally, the oil and gas sector leads the default tally, with five, followed by media and entertainment, with four (see chart 3).
- Over 60% of global defaults in 2021 so far are related to distressed exchanges (see chart 5).
- We estimate the 12-month-trailing speculative-grade default rate for the U.S. decreased marginally to 6.3% in March 2021 from 6.4% in February 2021 (see table 1).
Chart 2
Chart 3
Chart 4
Chart 5
Chart 6
Table 1
Year-To-Date Defaults Are Lower In 2021 (25) Than In 2020 (31) | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Region | 12-month-trailing speculative-grade default rate (%) | 2021 YTD | 2020 YTD | 2020 | Weakest links | |||||||
U.S. | 6.3* | 14 | 21 | 146 | 322 | |||||||
Emerging markets | 3.1 | 2 | 5 | 28 | 35 | |||||||
Europe | 5.9* | 8 | 4 | 42 | 84 | |||||||
Other developed | 5.9 | 1 | 1 | 10 | 25 | |||||||
Global | 5.4 | 25 | 31 | 226 | 466 | |||||||
*Trailing-12-month default rates from March 31, 2020-March 31, 2021, are preliminary and subject to change. Year-to-date data as of March 31. Weakest link data is as of Jan. 31, 2021. 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
The 2021 Global Corporate Default Tally Rises To 25 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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 | ||||||||
2/3/2021 | Confidential | Confidential | Health care | SD | CCC- | Confidential | ||||||||
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 Acquisition 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 | ||||||||
3/8/2021 | Confidential | Confidential | Financial institutions | D | B+ | Confidential | ||||||||
3/16/2021 |
Ensign Drilling Inc. (Ensign Energy Services Inc.) |
Canada | Oil and gas | SD | CCC+ | Distressed exchange | ||||||||
3/16/2021 |
HighPoint Resources Corp. |
U.S. | Oil and gas | D | CC | Chapter 11 | ||||||||
3/17/2021 |
Washington Prime Group Inc. |
U.S. | Homebuilders/real estate companies | D | CC | Missed interest payments | ||||||||
3/18/2021 | Confidential | Confidential | Consumer products | D | CCC | Confidential | ||||||||
3/23/2021 |
AI Mistral Holdco Ltd. |
U.K. | Transportation | SD | CCC+ | Distressed exchange | ||||||||
3/26/2021 |
Avation PLC |
U.K. | Transportation | SD | CC | Distressed exchange | ||||||||
*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. NR--Not rated. SD--Selective default. Data as of March 31, 2021. Sources: S&P Global Ratings Research and S&P Global Market Intelligence’s CreditPro®. |
Related Research
- Credit Markets Update Europe Q2 2021, March 30, 2021
- U.S. Speculative-Grade Corporate Default Rate Forecast For Year-End 2021 Falls To 5.5%, March 30, 2021
- Avation PLC Downgraded To 'SD' On Completion Of Bond Restructuring; Issue Rating Lowered To 'D', March 26, 2021
- The European Speculative-Grade Corporate Default Rate Could Reach 6.5% By December 2021, Feb. 26, 2021
Default Studies
More analysis and statistics are available in our annual default studies, published on RatingsDirect:
Corporate (financial and nonfinancial)
- 2020 Annual Japanese Issuer Credit Rating Transition Study
- 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
- 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
- 2020 Annual Japanese Structured Finance Default And Rating Transition Study
- 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
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: | Shripati Pranshu, CRISIL Global Analytical Center, an S&P affiliate, Mumbai |
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