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Default, Transition, and Recovery: About 90% Of 2021 Corporate Defaults Are From 'CCC+' Or Lower-Rated Entities

The 2021 corporate default tally increased to 47, with two defaults this week. The defaulters were:

  • Minnesota-based travel services company Carlson Travel Inc., and
  • One confidential issuer.

The number of defaults so far in 2021 surpassed defaults at this point in 2018 (46) but remains lower than that in 2020 (120) and 2019 (60). Defaults so far in 2021 have largely come from 'CCC+' or lower ratings--at 92% globally and 89% in the U.S. region--as the lowest-rated issuers tend to be more vulnerable to external market pressures.

In the U.S., upgrades have far outpaced downgrades in the 'CCC' rating category for the sixth consecutive month as 'CCC' net upgrades (upgrades minus downgrades) remain the highest among all other rating categories, which has led to a sharp decrease in the total number of issuers in the rating category. The negative bias (proportion of issuers with negative outlooks or ratings on CreditWatch negative) among 'CCC+' or lower-rated issuers has dropped significantly in the U.S. region to 2015 levels (see chart 1). This signals a further slowdown in downgrades (see "Risky Credits: The 'CCC' Category Leads Speculative-Grade Net Upgrades," June 15, 2021).

This Week's Observations

  • By region, the U.S. continues to lead defaults in 2021, with 26 out of 47, but that's lower than at this point in 2020 (79), 2019 (42), and 2018 (30).
  • Most defaults have been from the 'CCC+' or lower rating category, although the three-month-trailing default count in the U.S. region has dropped by 80% to 11 from 57 in second-quarter 2020.
  • By sector, oil and gas and consumer products have the highest number of defaults so far in 2021 with seven each, followed by media and entertainment, with six (see chart 2).
  • Nearly 60% of defaults so far in 2021 are related to distressed exchanges, whereas only 35% were related to distressed exchanges in 2020 (see chart 4).

Chart 1

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Chart 2

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Chart 3

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Chart 4

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Table 1

The U.S. Leads 2021 Defaults With 26 Out Of 47
Region 12-month-trailing speculative-grade default rate (%) 2021 YTD 2020 YTD 2020 Weakest links
U.S. 4.7* 26 79 146 213
Emerging market 2.7 8 16 28 27
Europe 5.4* 11 16 42 66
Other developed 3.5 2 9 10 18
Global 4.8 47 120 226 324
*Trailing-12-month default rates from May 31, 2020-May 31, 2021, are preliminary and subject to change. Year-to-date data as of June 23. Weakest link data is as of May 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

2021 Global Corporate Defaults Total 47
Date Parent company Country Subsector To From Reason
1/5/21

HGIM Corp.

U.S. Oil and gas SD CC Distressed exchange
1/6/21

Promotora de Informaciones S.A.

Spain Media and entertainment SD CC Distressed exchange
1/8/21

Burger BossCo Intermediate Inc.

U.S. Retail/restaurants SD CCC Distressed exchange
1/8/21

Riverbed Parent Inc.

U.S. High technology SD CC Distressed exchange
1/21/21

AMC Entertainment Holdings Inc.

U.S. Media and entertainment SD CC Distressed exchange
1/25/21

Awesome Acquisition Co. L.P.

U.S. Retail/restaurants D NR Chapter 11
1/25/21

Alpha Media LLC

U.S. Media and entertainment D NR Bankruptcy
1/27/21

Imagine Group LLC (The)

U.S. Media and entertainment D CCC Distressed exchange
2/2/21

Belk Inc.

U.S. Retail/restaurants D CC Missed interest payments
2/3/21

Peabody Energy Corp. (A)

U.S. Metals, mining, and steel SD CC Distressed exchange
2/3/21 Confidential Confidential Health care SD CCC- Confidential
2/11/21 Confidential Confidential Automotive D CCC- Confidential
2/11/21

Vallourec

France Oil and gas SD CC Missed principal payments
2/19/21

Renfro Corp.

U.S. Consumer products SD CCC- Distressed exchange
2/22/21

CatLuxe Sarl (CatLuxe Acquisition Sarl)

Luxembourg Consumer products SD CCC+ Distressed exchange
2/22/21

Form Technologies LLC

U.S. Capital goods SD CC Distressed exchange
2/26/21

YPF S.A

Argentina Oil and gas SD CC Distressed exchange
3/2/21

Sunshine 100 China Holdings Ltd.

Cayman Islands Homebuilders/real estate companies SD CCC- Distressed exchange
3/7/21 Confidential Confidential Financial institutions D NR Confidential
3/8/21 Confidential Confidential Financial institutions D B+ Confidential
3/16/21

Ensign Drilling Inc. (Ensign Energy Services Inc.)

Canada Oil and gas SD CCC+ Distressed exchange
3/16/21

HighPoint Resources Corp.

U.S. Oil and gas D CC Chapter 11
3/17/21

Washington Prime Group Inc.

U.S. Homebuilders/real estate companies D CC Missed interest payments
3/18/21 Confidential Confidential Consumer products D CCC Confidential
3/23/21

AI Mistral Holdco Ltd.

U.K. Transportation SD CCC+ Distressed exchange
3/26/21

Avation PLC

U.K. Transportation SD CC Distressed exchange
4/13/21

YPF Energia Electrica S.A. (YPF S.A)

Argentina Utilities SD CCC- Distressed exchange
4/14/21

ION Geophysical Corp.

U.S. Oil and gas SD CC Distressed exchange
4/15/21

Summit Midstream Partners, LP

U.S. Midstream SD CC Distressed exchange
4/16/21

Basic Energy Services Inc.

U.S. Oil and gas D CCC- Missed interest payments
4/19/21

Medical Depot Holdings Inc.

U.S. Health care SD CCC+ Distressed exchange
4/19/21

Serta Simmons Bedding LLC

U.S. Consumer products SD CC Distressed exchange
4/23/21

Isagenix Worldwide, Inc

U.S. Consumer products SD CCC Distressed exchange
4/26/21 Confidential Confidential High technology SD CCC+ Confidential
4/27/21

Maxcom Telecomunicaciones, S.A.B. de C.V.

Mexico Telecommunications D CCC- Missed interest payments
4/28/21

Future Retail Ltd.

India Retail/restaurants SD CCC- Distressed exchange
4/28/21 Confidential Confidential Consumer products SD CCC- Confidential
4/30/21

Codere S.A.

Spain Media and entertainment SD CC Distressed exchange
5/3/21 Confidential Confidential Transportation D CC Confidential
5/10/21

gategroup Holding AG

Switzerland Transportation SD CCC Distressed exchange
5/10/21

Voyager Aviation Holdings LLC

U.S. Transportation SD CC Distressed exchange
5/14/21

CDRH Parent Inc.

U.S. Health care D CC Distressed exchange
5/19/21

Boart Longyear Ltd.

Australia Metals, mining, and steel D CC Bankruptcy
5/25/21 Confidential Confidential Homebuilders/real estate companies D CCC- Confidential
6/3/21

Peabody Energy Corp. (B)

U.S. Metals, mining, and steel SD CCC+ Distressed exchange
6/23/21

Carlson Travel Inc

U.S. Media and entertainment D CCC Missed interest payments
6/23/21 Confidential Confidential Consumer products D CCC- Confidential
(B)designation indicates the issuer's second default for 2021. *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 June 23, 2021. 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
Secondary Contact:David C Tesher, New York + 212-438-2618;
david.tesher@spglobal.com
Research Contributor:Shripati Pranshu, CRISIL Global Analytical Center, an S&P affiliate, Mumbai

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