The 2021 corporate default tally remained at 59 after there have been no defaults since Aug. 13. So far, the third quarter has seen the fewest number of defaults (12) since the first quarter of 2014 (see chart 1). Several factors have contributed to the decline in defaults, but the primary drivers include a stronger-than-expected global economic recovery, fueled by the COVID-19 vaccine. Additionally, credit quality has stabilized as upgrades have outpaced downgrades, propelled by exceptionally favorable financing conditions. Both the U.S. and European default rates have been on a downward trajectory reflecting the lower projection of speculative grade corporate default rates. S&P Global Ratings expects the U.S. speculative-grade default rate to decline to 2.5% by June 2022, with 49 defaults (see "The U.S. Speculative-Grade Corporate Default Rate Could Fall To 2.5% By June 2022," Aug. 20, 2021). The European 12-month-trailing speculative-grade default rate is estimated to fall to 3.25% by June 2022 (see "The European Speculative-Grade Corporate Default Rate Could Fall To 3.25% By June 2022," Aug. 25, 2021).
However, risks remain as receptive markets during economic lockdowns in 2020 have contributed to higher leverage and a larger proportion of issuers rated 'B-' and lower than at any time in history. This could produce a higher default rate over the longer term and, based on historical experience, implies a higher default rate than our current projection (see "No Time For Complacency For The U.S. Speculative-Grade Market," Sept. 2, 2021).
Chart 1
This Week's Observations
- Globally, at this point in 2020, there were 173 defaults in the year, while in 2018 and 2019, there were 60 and 80 defaults, respectively (see chart 3).
- By sector, the consumer products and media and entertainment sectors lead 2021 defaults, with eight each. At this time in 2020, oil and gas led defaults, with 34, followed by consumer products, with 30 (see chart 2).
- Defaults related to distressed exchanges lead 2021 defaults so-far with 31; more than 50% of total defaults (see chart 4).
Chart 2
Chart 3
Chart 4
Table 1
Global Corporate Default Summary | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Region | 12-Month Trailing Speculative-Grade Default Rate (%) | 2021 YTD | 2020 YTD | 2020 | Weakest Links | |||||||
U.S. | 2.8* | 31 | 116 | 146 | 188 | |||||||
Emerging market | 1.7 | 13 | 22 | 28 | 26 | |||||||
Europe | 4.0* | 13 | 26 | 42 | 65 | |||||||
Other developed | 2.3 | 2 | 9 | 10 | 18 | |||||||
Global | 3.0 | 59 | 173 | 226 | 297 | |||||||
Note: *Trailing-12-month default rates from Aug. 31, 2020-Aug. 31, 2021, preliminary and subject to change. Year-to-date data as of Sept. 15, 2021. Weakest link data is as of July 30, 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
Global Corporate Defaults 2021 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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. (A) |
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 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 | ||||||||
3/7/2021 | Confidential | Confidential | Financial institutions | D | NR | Confidential | ||||||||
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 | Al Mistral Holdco Ltd. | U.K. | Transportation | SD | CCC+ | Distressed exchange | ||||||||
3/26/2021 | Avation PLC | U.K. | Transportation | SD | CC | Distressed exchange | ||||||||
4/13/2021 |
YPF Energia Electrica S.A. (YPF S.A) |
Argentina | Utilities | SD | CCC- | Distressed exchange | ||||||||
4/14/2021 |
ION Geophysical Corp. |
U.S. | Oil and gas | SD | CC | Distressed exchange | ||||||||
4/15/2021 |
Summit Midstream Partners L.P. |
U.S. | Midstream | SD | CC | Distressed exchange | ||||||||
4/16/2021 |
Basic Energy Services Inc. |
U.S. | Oil and gas | D | CCC- | Missed interest payments | ||||||||
4/19/2021 |
Medical Depot Holdings, Inc. |
U.S. | Health care | SD | CCC+ | Distressed exchange | ||||||||
4/19/2021 |
Serta Simmons Bedding LLC |
U.S. | Consumer products | SD | CC | Distressed exchange | ||||||||
4/23/2021 |
Isagenix Worldwide, Inc |
U.S. | Consumer products | SD | CCC | Distressed exchange | ||||||||
4/26/2021 | Confidential | Confidential | High technology | SD | CCC+ | Confidential | ||||||||
4/27/2021 |
Maxcom Telecomunicaciones, S.A.B. de C.V. |
Mexico | Telecommunications | D | CCC- | Missed interest payments | ||||||||
4/28/2021 |
Future Retail Ltd. |
India | Retail/restaurants | SD | CCC- | Distressed exchange | ||||||||
4/28/2021 | Confidential | Confidential | Consumer products | SD | CCC- | Confidential | ||||||||
4/30/2021 |
Codere S.A. |
Spain | Media and entertainment | SD | CC | Distressed exchange | ||||||||
5/3/2021 | Confidential | Confidential | Transportation | D | CC | Confidential | ||||||||
5/10/2021 |
gategroup Holding AG |
Switzerland | Transportation | SD | CCC | Distressed exchange | ||||||||
5/10/2021 |
Voyager Aviation Holdings LLC |
U.S. | Transportation | SD | CC | Distressed exchange | ||||||||
5/14/2021 |
CDRH Parent Inc., |
U.S. | Health care | D | CC | Distressed exchange | ||||||||
5/19/2021 |
Boart Longyear Ltd. |
Australia | Metals, mining, and steel | D | CC | Bankruptcy | ||||||||
5/25/2021 | Confidential | Confidential | Homebuilders/real estate companies | D | CCC- | Confidential | ||||||||
6/3/2021 |
Peabody Energy Corp. (B) |
U.S. | Metals, mining, and steel | SD | CCC+ | Distressed exchange | ||||||||
6/23/2021 |
Carlson Travel Inc |
U.S. | Media and entertainment | D | CCC | Missed interest payments | ||||||||
6/23/2021 | Confidential | Confidential | Consumer products | D | CCC- | Confidential | ||||||||
7/1/2021 |
GTT Communications Inc. |
U.S. | Telecommunications | SD | CCC- | Missed interest payments | ||||||||
7/8/2021 |
KCIBT Holdings L.P. |
U.S. | Consumer products | SD | CCC | Distressed exchange | ||||||||
7/9/2021 |
Joye Media SLU |
Spain | Media and entertainment | D | CCC- | Missed interest payments | ||||||||
7/12/2021 |
Peabody Energy Corp. (C) |
U.S. | Metals, mining, and steel | SD | CCC | Distressed exchange | ||||||||
7/13/2021 |
Sichuan Languang Development Co. Ltd., |
China | Homebuilders/real estate companies | D | CCC- | Missed bond repayment | ||||||||
7/20/2021 |
Alpha Holding S.A. de C.V. |
Mexico | Financial institutions | D | CC | Missed interest payments | ||||||||
7/30/2021 |
Comdata Spa |
Italy | Financial institutions | SD | CC | Distressed exchange | ||||||||
8/3/2021 | Confidential | Confidential | Transportation | SD | CC | Confidential | ||||||||
8/9/2021 |
Glass Mountain Pipeline, LLC |
U.S. | Utilities | D | CC | Missed interest payments | ||||||||
8/11/2021 | Confidential | Confidential | Financial institutions | SD | CCC+ | Confidential | ||||||||
8/11/2021 |
Sunshine 100 China Holdings Ltd. |
U.S. | Homebuilders/real estate companies | SD | CCC- | Missed bond repayment | ||||||||
8/13/2021 |
CLISA-Compania Latinoamericana de Infraestructura & Servicios S.A. |
Argentina | Capital goods | SD | CC | Distressed exchange | ||||||||
NR--Not rated. SD--Selective default. Data as of Sept. 15, 2021. Sources: S&P Global Ratings Research and S&P Global Market Intelligence’s CreditPro®. (B) designation indicates the issuers 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. |
Related Research
- Ratings Weekly Digest, Sept. 15, 2021
- Ratings Weekly Digest, Sept. 8, 2021
- No Time For Complacency For The U.S. Speculative-Grade Market, Sept. 2, 2021
- The European Speculative-Grade Corporate Default Rate Could Fall To 3.25% By June 2022, Aug. 25, 2021
- The U.S. Speculative-Grade Corporate Default Rate Could Fall To 2.5% By June 2022, Aug. 20, 2021
Default Studies
More analysis and statistics are available in our annual default studies, published on RatingsDirect:
Corporate (financial and nonfinancial)
- 2020 Annual Global Financial Services Default And Rating Transition Study
- 2020 Annual Latin American Corporate Default And Rating Transition Study
- 2020 Annual Greater China Corporate Default And Rating Transition Study
- 2020 Annual European Corporate Default And Rating Transition Study
- 2020 Annual Asia Corporate Default And Rating Transition Study
- 2020 Annual Taiwan Ratings Corp. Corporate Default And Rating Transition Study
- 2020 Annual U.S. Corporate Default And Rating Transition Study
- 2020 Annual Global Corporate Default And Rating Transition Study
- 2020 Annual Japanese Issuer Credit Rating Transition Study
- 2019 Annual Mexican National Scale Corporate And Public Finance Default And Rating Transition Study
- 2019 Annual Emerging Markets Corporate Default And Rating Transition Study
Structured finance
- 2020 Annual Global Leveraged Loan CLO Default And Rating Transition Study
- 2020 Annual Taiwan Structured Finance Default And Rating Transition Study
- 2020 Annual Global Structured Finance Default And Rating Transition Study
- 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
U.S. public finance
Sovereign and international public finance
- 2020 Annual International Public Finance Default And Rating Transition Study
- 2020 Annual Sovereign 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 |
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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