Globally, 20 companies rated by S&P Global Ratings as of April 1, 2021, defaulted by the end of the second quarter, down from 23 in first-quarter 2021 and 88 in second-quarter 2020. The default tally in the U.S. region (including tax havens) fell to 10, representing 50% of all defaults for the quarter, down from 12 in the first quarter (52%) and 57 in the second quarter of 2020 (65%). Emerging markets accounted for six defaults (22%), up from two, and Europe saw three defaults, down from eight in the previous quarter. The global default rate for the second quarter was , and third-quarter 2021 default rate was 0.28%, down from 0.32% in the first quarter (see table 1).

Table 1

Quarterly Global Corporate Default Summary
Quarter	Total defaults*	Investment-grade defaults	Speculative-grade defaults	Default rate (%)	Investment-grade default rate (%)	Speculative-grade default rate (%)	Total debt defaulting (bil. $)
2021Q2	21	0	20	0.28	0.00	0.55	12.93
2021Q1	26	0	23	0.32	0.00	0.64	25.87
2020Q4	45	0	41	0.58	0.00	1.16	85.78
2020Q3	57	0	51	0.72	0.00	1.44	76.61
2020Q2	93	0	88	1.23	0.00	2.45	151.44
2020Q1	31	0	30	0.42	0.00	0.84	39.60
2019Q4	34	0	30	0.42	0.00	0.84	65.49
2019Q3	21	0	18	0.25	0.00	0.50	36.35
2019Q2	34	0	26	0.36	0.00	0.73	28.99
2019Q1	29	2	24	0.36	0.06	0.66	52.39
2018Q4	21	0	17	0.24	0.00	0.47	18.73
2018Q3	13	0	12	0.17	0.00	0.34	28.34
2018Q2	22	0	19	0.27	0.00	0.55	36.89
2018Q1	26	0	26	0.37	0.00	0.76	47.69
2017Q4	24	0	23	0.33	0.00	0.68	52.59
2017Q3	15	0	15	0.22	0.00	0.45	13.17
2017Q2	32	0	26	0.38	0.00	0.78	26.14
2017Q1	24	0	19	0.28	0.00	0.57	12.67
2016Q4	32	1	29	0.44	0.03	0.87	49.61
2016Q3	37	0	35	0.51	0.00	1.06	31.10
2016Q2	57	0	51	0.75	0.00	1.54	101.71
2016Q1	37	0	36	0.52	0.00	1.07	57.38
2015Q4	31	0	29	0.42	0.00	0.85	32.02
2015Q3	23	0	19	0.27	0.00	0.56	22.10
2015Q2	34	0	29	0.42	0.00	0.85	35.96
2015Q1	25	0	22	0.32	0.00	0.65	20.24
2014Q4	16	0	13	0.19	0.00	0.39	13.92
2014Q3	18	0	16	0.24	0.00	0.49	15.69
2014Q2	14	0	10	0.15	0.00	0.32	52.48
2014Q1	12	0	10	0.15	0.00	0.32	9.46
2013Q4	20	0	18	0.28	0.00	0.59	17.90
2013Q3	13	0	8	0.13	0.00	0.27	11.31
2013Q2	23	0	19	0.31	0.00	0.67	11.89
2013Q1	25	0	22	0.36	0.00	0.79	56.19
2012Q4	21	0	18	0.30	0.00	0.67	16.34
2012Q3	17	0	13	0.22	0.00	0.49	5.42
2012Q2	17	0	14	0.24	0.00	0.54	16.73
2012Q1	28	0	24	0.41	0.00	0.94	19.66
*This column includes companies that were not rated at the start of the year in which they defaulted. Data as of June 30, 2021. Source: S&P Global Ratings Research.

Recent Default Experience Lower Than Historical Average

The most-recent 12-month static pool, consisting of ratings observed on July 1, 2020, shows a default distribution consistent with our historical observations. Of the 'CCC'/'C' ratings on Oct. 1, 2020, 22.7% defaulted by June 30, 2021--slightly lower than the long-term weighted average of 22.7% annually. Meanwhile, 0.7% of 'B' ratings defaulted, lower than the 3.3% annual rate, and 0.2% of 'BB' ratings defaulted, lower than the 0.7% annual average.

Table 2

Descriptive Statistics On One-Year Global Default Rates
	AAA	AA	A	BBB	BB	B	CCC/C
Most recent 12 month static pool (07/01/2020)	0.0	0.0	0.0	0.0	0.2	0.7	22.7
Weighted long-term average	0.0	0.0	0.0	0.1	0.7	3.3	27.7
Difference between last four quarters and average	0.0	(0.0)	(0.0)	(0.1)	(0.5)	(2.6)	(4.9)
Min	0.0	0.0	0.0	0.0	0.0	0.3	0.0
Max	0.0	0.4	0.5	1.0	5.1	16.0	52.3
Median	0.0	0.0	0.0	0.1	0.5	3.2	25.0
Standard deviation	0.0	0.1	0.1	0.2	1.1	3.4	10.8
Skewness	0.0	5.3	2.0	1.3	1.9	1.4	0.2
Kurtosis	0.0	28.8	3.6	1.1	3.2	1.3	(0.5)
No. of standard deviations		(0.3)	(0.5)	(0.7)	(0.5)	(0.8)	(0.5)
2008 default rates	0.0	0.4	0.4	0.5	0.8	4.1	27.3
Data through June 30, 2021. Source: S&P Global Ratings Research.

The U.S. and tax havens accounted for 10 of the 20 rated defaults in the second quarter (see chart 1), as well as about 77% of defaulting debt (see chart 2). The 10 U.S. rated defaults were down from 12 in the first quarter and 57 in the first quarter of 2020. Emerging markets had six defaults, Europe had three, and other developed countries (Australia, Canada, Japan, and New Zealand) had one (see chart 3).

The energy and natural resources sector had the most rated defaults in the second quarter, with six (see table 3). There were four large defaults in the second quarter (with a rated debt amount over $1 billion), including Serta Simmons Bedding LLC ($3.451 billion), Peabody Energy Corp. ($1.918 billion), Carlson Travel Inc. ($1.309 billion), and Codere S.A. ($1.202 billion). Together, these companies represent 62% of all defaulting debt in the second quarter.

There was a noticeable slowdown in default activity from month to month in the second quarter. There were 10 defaults in April, four in May, and only two in June.

Globally, the trailing-three-month speculative-grade default rate fell to 0.55% as of June 30, 2021, from 0.64% at the end of first-quarter 2021 (see chart 4). The U.S. default rate fell to 0.52% from 0.64%, the European default rate fell to 0.41% from 1.1%, and the emerging markets default rate rose to 0.41% from 0.24%.

Table 3

Global Defaults: Second Quarter 2021
Default date	Company	Country	Industry	Rated debt amount (mil. $)	Default type
4/13/2021	YPF Energia Electrica S.A.	Argentina	Energy and Natural Resources	400	Distressed Exchange
4/14/2021	Ion Geophysical Corp.	United States of America	Energy and Natural Resources	121	Distressed Exchange
4/15/2021	Summit Midstream Partners LP	United States of America	Energy and Natural Resources	800	Distressed Exchange
4/16/2021	Basic Energy Services Inc.	United States of America	Energy and Natural Resources	300	Missed Interest
4/19/2021	Medical Depot Holdings Inc.	United States of America	Health Care/Chemicals	292	Distressed Exchange
4/19/2021	Serta Simmons Bedding LLC	United States of America	Consumer/Service Sector	3,451	Distressed Exchange
4/23/2021	Isagenix Worldwide Inc	United States of America	Consumer/Service Sector	415	Distressed Exchange
4/27/2021	Maxcom Telecomunicaciones S.A.B. de C.V.	Mexico	Telecommunications	57	Missed Interest
4/28/2021	Future Retail Ltd.	India	Consumer/Service Sector	500	Distressed Exchange
4/30/2021	Codere S.A.	Spain	Leisure Time/Media	1,203	Distressed Exchange
5/10/2021	Voyager Aviation Holdings LLC	United States of America	Transportation	500	Distressed Exchange
5/10/2021	gategroup Holding AG	Switzerland	Transportation	0	Distressed Exchange
5/14/2021	CDRH Parent Inc.	United States of America	Health Care/Chemicals	878	Distressed Exchange
5/19/2021	Boart Longyear Ltd.	Australia	Energy and Natural Resources	488	Foreign Bankruptcy
6/3/2021	Peabody Energy Corp.	United States of America	Energy and Natural Resources	1,918	Distressed Exchange
6/23/2021	Carlson Travel Inc	United States of America	Leisure Time/Media	1,309	Missed Interest
*Excludes confidential defaults. Data through June 30, 2021. Source: S&P Global Ratings Research; S&P Global CreditPro®.

Regional And Sector Default Trends

Trailing-three-month default rates provide a more-current picture of default trends than our trailing-12-month rates, since the trailing-three-month default rates are not unduly influenced by more-distant periods of unusual calm or stress in corporate credit markets.

The global trailing-12-month speculative-grade default rate was 3.51% as of June 30, 2021, down from 5.43% at the end of the first quarter (see chart 5). The U.S. trailing-12-month default rate fell to 3.82% from 6.27%, the European rate fell to 4.7% from 6.11%, and the emerging markets rate fell to 2.13% from 2.8%.

Looking at a specific breakout for energy and natural resources both in the U.S. and excluding U.S., we can see that this sector has been the main driver of defaults for periods of high and low default activity (see chart 6). The U.S. energy and natural resources' 12-month default rate has fallen from a recent high, to 14.79% from 21.91% at the end of March 2021. Outside the U.S., the default rate is also down from a recent high, to 7.64% from 11.46% at the end of February. The nonenergy and natural resources default rates have seen much lower levels, with other U.S. sectors peaking recently at 5.44% in September 2020, and now down to 2.71%, while non-U.S. other sectors peaked at 3.88% in March and are now down to 2.76%.

Upgrades Lead Downgrades Again For First Time In Five Years

The proportion of upgrades among all ratings rose to 3.6% in second-quarter 2021 from 2.3% in the first quarter, and downgrades fell to 1.9% from 2.1% (see table 4). Of note, there have been no two quarters in a row in the past five years where upgrades have outnumbered downgrades, until the first two quarters of 2021. The quarterly default rate fell at 0.28% from 0.32%; the percentage of unchanged ratings fell to 92.1% from 93.3%; and the ratio of downgrades to upgrades fell to 0.5% from 0.94%. (A ratio of 1.00% would indicate that the number of downgrades was equal to the number of upgrades.) The past four quarters have averaged 2.2% upgrades, double the previous four quarters, which saw 1.1% upgrades. Downgrades are down by more than half, at 2.4% compared with 6.5%. Defaults have been more consistent, averaging 0.5% over the past four quarters versus 0.6% in the previous four quarters.

Table 4

Quarterly Global Corporate Rating Actions Summary
Quarter	Issuers	Upgrades (%)	Downgrades§ (%)	Defaults (%)	Withdrawn ratings (%)	Changed ratings (%)	Unchanged ratings (%)	Downgrade/upgrade ratio
2021Q2	7,183	3.6	1.9	0.3	2.1	7.9	92.1	0.5
2021Q1	7,126	2.3	2.1	0.3	2.0	6.7	93.3	0.9
2020Q4	7,092	1.7	2.6	0.6	1.8	6.6	93.4	1.5
2020Q3	7,090	1.1	3.0	0.7	1.5	6.3	93.7	2.7
2020Q2	7,178	0.4	10.6	1.2	1.8	14.1	85.9	28.3
2020Q1	7,212	0.9	8.8	0.4	2.1	12.2	87.8	9.9
2019Q4	7,198	1.5	3.3	0.4	2.0	7.2	92.8	2.1
2019Q3	7,214	1.7	3.4	0.2	2.0	7.3	92.7	2.0
2019Q2	7,183	2.3	2.5	0.4	1.8	6.9	93.1	1.1
2019Q1	7,235	1.4	2.7	0.4	2.3	6.7	93.3	1.9
2018Q4	7,202	2.4	3.1	0.2	2.0	7.8	92.2	1.3
2018Q3	7,130	2.3	2.4	0.2	2.2	7.0	93.0	1.1
2018Q2	7,044	2.5	2.6	0.3	2.2	7.6	92.4	1.0
2018Q1	6,972	2.5	2.8	0.4	1.7	7.4	92.6	1.1
2017Q4	6,935	2.7	3.3	0.3	2.3	8.6	91.4	1.2
2017Q3	6,903	2.1	3.1	0.2	2.4	7.8	92.2	1.4
2017Q2	6,866	2.8	3.2	0.4	2.4	8.7	91.3	1.1
2017Q1	6,880	2.5	1.9	0.3	2.2	6.9	93.1	0.8
2016Q4	6,858	2.2	2.5	0.4	2.2	7.4	92.6	1.1
2016Q3	6,833	2.4	3.1	0.5	1.9	8.0	92.0	1.3
2016Q2	6,835	2.5	3.8	0.7	2.1	9.2	90.8	1.5
2016Q1	6,904	1.8	6.4	0.5	2.3	11.1	88.9	3.6
*This table compares the net change in ratings from the first to the last day of each quarter. All intermediate ratings are disregarded. §Excludes downgrades to 'D', shown separately in the defaults column. Data as of June 30, 2021. Source: S&P Global Ratings Research; S&P Global CreditPro®.

Large downgrades (those of six notches or more, not including defaults) have been rare in recent years and are down from the highs of the financial crisis (see chart 7). The number of large downgrades since 2011 is on par with the tallies during the benign economic periods of the mid-1990s and 2004-2006, both of which were characterized by relatively stable corporate credit. However, there were six large downgrades in 2007, which ended up being the start of a two-year period of increased large downgrades and defaults. For all the downgrades over the past two years, there was only one large downgrade in 2020, down from two in 2019. There have been no large downgrades so far in 2021.

All of the 'AAA' rated companies on July 1, 2020, were still rated 'AAA' at the end of second-quarter 2021 (see table 5). In the past 12 months, 51 companies have moved to investment grade (rated 'BBB-' or higher) from speculative grade (rated 'BB+' or lower), down from 65 companies in the previous 12 months. On the other hand, 22 companies have moved to speculative grade from investment grade in the past 12 months, up from 21 companies in the previous 12 months.

Table 5

Trailing Four-Quarter Transition Rates By Region (2020 Q3 – 2021 Q2, %)
Global	From / To	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
	AAA	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
	AA	0.00	87.79	7.59	0.00	0.00	0.00	0.00	0.00	4.62
	A	0.00	0.43	93.26	4.05	0.00	0.00	0.00	0.00	2.27
	BBB	0.00	0.05	1.09	91.24	2.78	0.00	0.00	0.00	4.84
	BB	0.00	0.00	0.00	1.86	86.04	3.81	0.08	0.17	8.04
	B	0.00	0.00	0.00	0.00	3.41	80.22	4.21	0.75	11.41
	CCC/C	0.00	0.00	0.00	0.00	0.00	18.95	45.47	22.74	12.84
U.S.	From / To	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
	AAA	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
	AA	0.00	89.68	3.97	0.00	0.00	0.00	0.00	0.00	6.35
	A	0.00	0.36	91.53	5.95	0.00	0.00	0.00	0.00	2.16
	BBB	0.00	0.14	1.13	91.27	2.96	0.00	0.00	0.00	4.51
	BB	0.00	0.00	0.00	2.07	86.16	4.34	0.21	0.21	7.02
	B	0.00	0.00	0.00	0.00	3.24	82.21	3.24	0.67	10.66
	CCC/C	0.00	0.00	0.00	0.00	0.00	22.64	42.57	20.95	13.85
Europe	From / To	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
	AAA	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
	AA	0.00	85.71	13.19	0.00	0.00	0.00	0.00	0.00	1.10
	A	0.00	0.26	93.09	3.84	0.00	0.00	0.00	0.00	2.81
	BBB	0.00	0.00	1.43	92.84	1.91	0.00	0.00	0.00	3.82
	BB	0.00	0.00	0.00	2.93	82.93	4.88	0.00	0.49	8.78
	B	0.00	0.00	0.00	0.00	2.79	80.47	5.81	1.16	9.77
	CCC/C	0.00	0.00	0.00	0.00	0.00	13.48	46.07	31.46	8.99
Emerging markets	From / To	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
	AAA	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
	AA	0.00	95.56	0.00	0.00	0.00	0.00	0.00	0.00	4.44
	A	0.00	1.16	94.96	2.33	0.00	0.00	0.00	0.00	1.55
	BBB	0.00	0.00	0.95	89.35	3.99	0.00	0.00	0.00	5.70
	BB	0.00	0.00	0.00	1.13	86.71	2.93	0.00	0.00	9.23
	B	0.00	0.00	0.00	0.00	5.09	73.95	5.39	0.60	14.97
	CCC/C	0.00	0.00	0.00	0.00	0.00	7.46	53.73	23.88	14.93
Data as of June 30, 2021. Source: S&P Global Ratings Research; S&P Global CreditPro®.

Table 6

Global Average One-Year Transition Rates, 1981 To 2020 (%)
From / To	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
AAA	87.06	9.06	0.53	0.05	0.11	0.03	0.05	0.00	3.11
AA	0.48	87.24	7.76	0.47	0.05	0.06	0.02	0.02	3.89
A	0.03	1.60	88.59	5.00	0.26	0.11	0.02	0.05	4.34
BBB	0.00	0.09	3.24	86.50	3.56	0.43	0.10	0.16	5.92
BB	0.01	0.03	0.11	4.55	77.81	6.80	0.55	0.63	9.51
B	0.00	0.02	0.07	0.15	4.54	74.59	4.96	3.34	12.34
CCC/C	0.00	0.00	0.10	0.17	0.55	12.47	43.10	28.31	15.29
Data as of June 30, 2021. Source: S&P Global Ratings Research; S&P Global CreditPro®.

Ratings Performance Holds

The Gini ratio, a quantitative measure of the rank-ordering power of a rating system over a given time horizon, shows an annual global Gini coefficient of 82.8% at one year, 75.3% at three years, 71.5% at five years, and 69.2% at seven years (see table 7). If the rank ordering of corporate ratings only randomly approximated default risk, the Gini coefficient would be zero. Alternatively, if corporate ratings were perfectly rank ordered so that all defaults in each time frame occurred only among the lowest-rated entities, the curve would capture all of the area on the graph above the diagonal, and the Gini coefficient would be 100% (see Appendix I).

Table 7

Gini Coefficients By Region (%)
	Time horizon
Region	One-year	Three-year	Five-year	Seven-year
Global	82.85	75.32	71.54	69.16
U.S. and tax havens	80.98	72.89	69.06	66.65
Europe*	90.46	85.18	82.44	79.83
*Europe refers to Austria, Belgium, British Virgin Islands, Bulgaria, Channel Islands, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Guernsey, Hungary, Iceland, Ireland, Isle of Man, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, Montenegro, Netherlands, Norway, Poland, Portugal, Republic Of Moldova, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, and the U.K. Data as of June 30, 2021. Source: S&P Global Ratings Research; S&P Global CreditPro®.

The data we collected from the pool of global defaulters indicate that speculative-grade defaults tend to occur in the third year after an initial rating assignment, particularly in the 'BB' and 'B' rating categories (see chart 8). For example, among defaulters that we initially rated 'B', the default rate climbed to a high of 18.5% in the first three years before decreasing in the following years. Defaulted issuers rated 'BB' at origination showed a similar pattern, but they peaked a little later--typically in the fourth year. On the other hand, for defaulting entities that were initially rated 'CCC', we observed the highest default rate in the first year--not surprising, given their weaker credit profiles.

For nonfinancial entities, the path to default in the seven years prior is typically gradual (see chart 9). As with the industrial companies that defaulted during the trailing 12 quarters, the median ratings on financial companies were consistently lower in the seven years leading up to default than the long term (Jan. 1, 1981-June 30, 2021) median ratings. While we tend to take more rating actions on defaulting financial companies than on their counterparts in the industrial sector, the frequency of defaults in the financial sector is much lower. In the past 12 quarters, 24 financial institutions or insurance companies defaulted, whereas 420 nonfinancial companies defaulted. (In charts 9 and 10, we do not include rating changes to not rated.)

The rating paths of defaulters over the trailing 12 quarters vary depending on the sector. The median ratings on financial institutions and insurance companies that defaulted were higher roughly five to seven years before default. After that point, the median ratings fell abruptly to considerably below their long-term levels (see chart 10). Prior to defaulting, financial companies tend to experience a sudden loss of investor confidence, which causes them to default more quickly than their higher-rated counterparts in the industrial sector. But many of the issuers included in the defaulting cohort from the past 12 quarters were downgraded to speculative grade during the financial crisis in 2008 (or shortly thereafter).

The average time to default (from the date of original rating) for the 21 defaulted issuers in second-quarter 2021 (including those that were not rated at the start of the quarter) was 2.3 years--much lower than the historical average of 5.9 years. None of the defaults this quarter were initially rated investment grade, with two originally rated in the 'BB' category, seven originally rated in the 'B' category, and 12 originally rated in the 'CCC'/'C' category.

There is a generally negative relationship between the initial rating on a defaulting issuer and the time to default (see table 8). For the entire pool of defaulters (January 1981-June 2021), the average times to default for issuers that were originally rated in the 'A' and 'B' rating categories were 14.1 years and 5.1 years, respectively, from the time of initial rating (or from Dec. 31, 1980, for published ratings that were current at the start date of the study regardless of actual rating date). For issuers rated in the 'CCC'/'C' category, the average time to default was only 2.1 years.

In cases where an entity emerged from a previous default (including distressed exchanges), we treated the reemergence as a separate entity and designated the original rating as the first rating after the default event. The "range" column in table 8 shows the difference between each rating category's minimum and maximum time to default.

Table 8

Time To Default From Original Rating For Global Corporate Defaulters, 1981-June 30, 2021
Original rating	Defaults	Average years from original rating*	Median years from original rating	St. dev. of years from original rating	Range
AAA	8	18.0	18.5	11.4	23.0
AA	32	17.4	19.6	10.6	37.8
A	101	14.1	10.9	9.1	37.7
BBB	224	9.3	7.3	6.8	36.1
BB	655	7.1	5.4	5.9	37.8
B	1,756	5.1	3.8	4.3	33.1
CCC/C	369	2.1	1.3	2.7	17.4
Total	3,145	5.9	4.0	5.7	39.4
Range is the difference between each rating category's minimum and maximum time to default; *Or Dec. 31, 1980, whichever is later. NR--Not rated. N/A--Not available. Source: S&P Global Ratings Research; S&P Global CreditPro®.

Tracking the time to default from subsequent ratings further supports this negative relationship between rating quality and default remoteness (see table 9). But for the most part, times to default from subsequent ratings are shorter than those for initial ratings. This is largely a result of rating changes, particularly downgrades. As an issuer approaches default, it typically experiences several rating changes in a short amount of time.

Table 9

Time To Default From Post-Original Rating For Global Corporate Defaulters, 1981-June 30, 2021
Rating path to default	Average years from rating category	Median years from rating category	St. dev. of years from rating category
AAA	27.4	27.7	10.0
AA	14.9	15.8	9.4
A	11.5	9.9	8.3
BBB	8.4	6.5	6.9
BB	6.1	4.2	5.8
B	3.3	1.9	3.9
CCC/C	0.9	0.3	1.7
NR	5.2	3.1	5.8
Total	3.4	1.3	5.0
NR--Not rated. N/A--Not available. Source: S&P Global Ratings Research; S&P Global CreditPro®.

Speculative-Grade Bond Issuance Rises Slightly, Maintaining Strong 2021 Totals

New speculative-grade issuance in the U.S. rose to $117.2 billion in the second quarter of 2021 from $116.1 billion in the first quarter of 2021. Issuers rated 'BB' had $55.6 billion in new issuance, up from $50.3 billion; 'B' rated issuers had $47.1 billion, down from $51.2 billion; and 'CCC' rated issuers had $14.5 billion, down slightly from $14.6 billion (see chart 11).

Corporate bond spreads were narrower in the second quarter. At the end of June 2021, 'BB' rated spreads were down to 257 basis points (bps) from 300 bps at the end of March; 'B' rated spreads were down to 419 bps from 448 bps; and 'CCC' rated spreads were down to 611 bps from 624 bps.

Defaults Are Expected To Decrease In The U.S.

Our baseline forecast is for a forward-12-month (through June 2022) U.S. speculative-grade corporate default rate of 2.5% (see chart 12). To realize our mean baseline projection, a total of 49 speculative-grade issuers would need to default between July 2021 and June 2022.

We determine our forecast based on a variety of factors, including our proprietary default model for the U.S. speculative-grade corporate bond market. The main components of the model include economic variables, such as the unemployment rate; financial variables, such as corporate profits, the Fed's Senior Loan Officer Opinion Survey On Bank Lending Practices, the interest burden, and the slope of the yield curve; and credit-related variables, like negative bias (the proportion of entities with negative outlooks or ratings on CreditWatch negative).

The interaction between the U.S. speculative-grade default rate and the input variables is in line with our expectations. For instance, increases in the unemployment rate and negative bias positively correlate with the speculative-grade default rate, which means that as the unemployment rate or negative bias increases, so does the default rate. We update our outlook for the U.S. corporate speculative-grade default rate each quarter after analyzing the latest economic data and expectations.

These default projections are consistent with S&P Global economists' projections. In addition to the baseline, we have one pessimistic scenario and one optimistic scenario. The pessimistic scenario yields a mean 12-month projection of 5.5%; a total of 108 issuers would need to default in the next 12 months to realize our pessimistic scenario. The optimistic scenario yields a mean 12-month projection of 2%, meaning 39 issuers would have to default in the next 12 months.

Appendix I: Gini Methodology

To measure ratings performance, or ratings accuracy, we plot the cumulative share of issuers by rating against the cumulative share of defaulters in a Lorenz curve to show the accuracy of its rank ordering. Max O. Lorenz developed the Lorenz curve as a graphical representation of the proportionality of a distribution.

To build the Lorenz curve, we order the observations from the low end of the ratings scale ('CC') to the high end ('AAA'). If the rank ordering of S&P Global Ratings' corporate ratings only randomly approximated default risk, the curve would fall along the diagonal. Thus, the Gini coefficient (a summary statistic of the Lorenz curve) would be zero. If corporate ratings were perfectly rank ordered so that all defaults occurred only among the lowest-rated entities, the curve would capture all of the area above the diagonal on the graph, and the Gini coefficient would be 100% (see chart 12). To calculate Gini coefficients, we divide area B by the total of area A plus area B to capture the extent to which actual ratings accuracy diverges from a random scenario.

For definitions of the terms and calculations that we use in this report, see Appendix I in "2018 Annual Global Corporate Default And Rating Transition Study," published April 9, 2019.

Appendix II: 2021 Second-Quarter Defaults In Profile

In the second quarter of 2021, 21 companies including five confidential issuers defaulted on the outstanding debt of $12.93 billion. This appendix provides summaries of the events leading up to each default and, in some cases, events following the default. We also include the defaulting instruments for each company that S&P Global Ratings rates.

YPF Energia Electrica S.A.

• $400 million 10.00% bonds due July 25, 2026

On April 13, 2021, S&P Global Ratings lowered its long-term issuer credit rating on Argentina-based electricity generation company YPF Energia Electrica S.A. (YPF S.A.) to 'SD' (selective default) from 'CCC-' following execution of a distressed exchange for its $100 million series I bond. The central bank lifted restrictions on domestic issuers with debt maturities over $1 million. The company offered a combination of cash and two other options including an exchange for 100% of the bond and series VI bond. The refinanced amount was to be extended for an additional two years.

Later on April 15, 2021, we raised our issuer credit rating on the company to 'CCC+' from 'SD'. The rating action reflected that the company would not have additional debt after the refinancing, which would start to reduce the company's leverage in 2021. The company completed three projects in fourth-quarter 2020, and another three projects are likely to be completed by 2021. Given this, the short-term refinancing risks for the company have ceased because it doesn't have large maturities until 2026.

Rating history 

Table 10

Issuer Credit Rating - YPF Energia Electrica S.A. (YPF S.A.)
Date	To
4/15/2021	CCC+/Stable/--
4/13/2021	SD/NM/--
9/18/2020	CCC-/Watch Neg/--
9/8/2020	CCC+/Stable/--
5/8/2020	CCC+/Negative/--
8/20/2019	B-/Negative/--
7/17/2019	B/Stable/--
SD--Selective default. NM--Not meaningful.

ION Geophysical Corp.

• $120.569 million 9.125% senior secured second priority notes due Dec. 15, 2021

On April 14, 2021, S&P Global Ratings lowered its long-term issuer credit rating on Texas-based marine seismic data company ION Geophysical Corp. to 'SD' from 'CC', following the company's completion of a debt exchange, which extended the maturity of its second-lien bonds to 2025. The $121 million 9.125% second lien senior secured bonds were exchanged with a combination of cash and new 8% second-lien senior convertible notes due in 2025.

Later, on June 2, 2021, we raised the long-term issuer credit rating on the company to 'CCC' from 'SD' with a negative outlook after it completed a debt restructuring. The company raised $14 million of net proceeds after issuing $116 million. This improved its liquidity position and increased its cash balance to nearly $48 million. The company still faces business challenges as oil and gas companies continue to limit their spending.

Rating history 

Table 11

Issuer Credit Rating - ION Geophysical Corp.
Date	To
6/2/2021	CCC/Negative/--
4/14/2021	SD/NM/--
1/6/2021	CC/Negative/--
2/24/2020	CCC+/Negative/--
2/12/2019	CCC+/Stable/--
10/6/2016	CCC+/Negative/--
4/29/2016	SD/NM/--
3/1/2016	CC/Negative/--
6/15/2015	CCC/Developing/--
11/24/2014	B-/Negative/--
12/10/2013	B/Negative/--
5/1/2013	B+/Stable/--
SD--Selective default. NM--Not meaningful.

Summit Midstream Partners L.P.

• $300 million 5.50% senior notes due Aug. 15, 2022
• $500 million 5.75% senior notes due April 15, 2025

On April 15, 2021, S&P Global Ratings lowered its issuer credit rating on Texas-based natural gas and crude treatment company Summit Midstream Partners L.P. to 'SD' from 'CC'. The issuer closed its $18.66 million preferred unit exchange, in which 30 common units will be issued for each preferred unit. The exchange was considered distressed because the preferred holders will get less than what was promised. This action will reduce over $9 million from the company's debt balance.

Rating history 

Table 12

Issuer Credit Rating - Summit Midstream Partners LP
Date	To
4/15/2021	SD/NM/--
3/18/2021	CC/Negative/--
1/13/2021	CCC+/Negative/--
9/25/2020	SD/NM/--
9/2/2020	CC/Negative/--
8/5/2020	CCC/Negative/--
6/23/2020	SD/NM/--
6/5/2020	CCC/Negative/--
3/25/2020	B/Negative/--
2/6/2020	B+/Stable/--
11/8/2017	BB-/Stable/--
6/5/2013	B+/Stable/--
SD--Selective default. NM--Not meaningful.

Basic Energy Services Inc.

• $300 million 10.75% notes due 2023

On April 16, 2021, S&P Global Ratings lowered its long-term issuer credit rating on Texas-based oilfield services provider Basic Energy Services Inc. to 'D' from 'CCC-' after the company chose not to make an interest payment of $16.335 million, even with the 30-day grace period. The interest was due on the 10.75% senior secured notes due in 2023.

Rating history 

Table 13

Issuer Credit Rating - Basic Energy Services Inc.
Date	To
4/16/2021	D/--/--
12/21/2020	CCC-/Negative/--
11/6/2020	CC/Negative/--
1/31/2020	CCC+/Negative/--
5/21/2019	B-/Negative/--
9/21/2018	B/Negative/--
3/5/2018	B/Stable/--
10/25/2016	NR/--/--
9/16/2016	D/--/--
8/15/2016	CC/Negative/--
7/25/2016	CCC-/Negative/--
3/24/2016	CCC+/Negative/--
8/5/2015	B-/Negative/--
4/10/2015	B/Stable/--
8/29/2013	B+/Stable/--
9/28/2012	B+/Positive/--
7/1/2011	B+/Stable/--
8/3/2010	B/Stable/--
12/10/2009	B/Negative/--
7/7/2009	B+/Negative/--
2/10/2009	BB-/Negative/--
7/17/2008	BB-/Stable/--
4/22/2008	BB-/Watch Pos/--
3/10/2008	BB-/Stable/--
3/30/2006	B+/Positive/--
11/22/2005	B+/Stable/--
10/28/2003	B/Stable/--
NR--Not rated.

Medical Depot Holdings Inc.

• $122.5 million floating-rate first-lien bank loan due June 1, 2025
• $2.5 million floating-rate revolver bank loan due Jan. 3, 2022
• $167 million floating-rate second-lien bank loan due Jan. 3, 2024

On April 19, 2021, S&P Global Ratings lowered its long-term issuer credit rating on New York-based durable medical devices manufacturer Medical Depot Holdings Inc., to 'SD' from 'CCC+', after the issuer completed a distressed exchange. During this transaction the issuer amended the terms of the first-lien term loan and also converted $1.5 billion lien loan into preferred shares. We view this transaction as distressed because of an increase in the maturity of the first-lien loan, though there is an incremental paid-in-kind interest of 2%. There is still $4 million outstanding in the capital structure of the company.

On April 26, 2021, we raised our long-term issuer credit rating on the company to 'CCC+' from 'SD'. The distressed exchange improved the company's short-term liquidity position, but the market offset due to the pandemic still bears some risks.

Rating history 

Table 14

Issuer Credit Rating - Medical Depot Holdings Inc.
Date	To
4/26/2021	CCC+/Negative/--
4/19/2021	SD/NM/--
10/15/2019	CCC+/Negative/--
10/7/2019	D/--/--
9/23/2019	CC/Watch Neg/--
9/12/2019	CCC/Negative/--
7/24/2017	B-/Negative/--
11/14/2016	B/Stable/--
SD--Selective default. NM--Not meaningful.

Serta Simmons Bedding LLC

• $1.95 billion floating-rate first-lien term bank loan due Nov. 8, 2023
• $450 million floating-rate second-lien term bank loan due Nov. 8, 2024
• $200 million floating-rate first-out super priority bank loan due Aug. 10, 2023
• $851 million second-out super priority bank loan due Aug. 10, 2023

On April 19, 2021, S&P Global Ratings lowered its issuer credit rating on Illinois-based mattresses and bedding products manufacturer Serta Simmons Bedding LLC to 'SD' from 'CC'. The company completed a tender offer for a distressed exchange on second-lien term loan due in 2024 at $0.60 on the dollar.

On May 12, 2021, we raised our long-term issuer credit rating on the issuer to 'CCC-' from 'SD', after the issuer's liquidity position improved. After the exchange, the issuer will have $200 million in cash and another $170 million revolver. This action reduced the leverage to 13.3x from 12.5x.

On June 30, 2021, we raised our long-term issuer credit rating on the issuer to 'CCC' after the issuer announced to repurchase on its first-lien debt tranche. Further debt restructuring is possible since the capital structure remains unsustainable.

Rating history 

Table 15

Issuer Credit Rating - Serta Simmons Bedding LLC
Date	To
6/30/2021	CCC/Negative/--
5/12/2021	CCC-/Negative/--
4/19/2021	SD/NM/--
4/5/2021	CC/Negative/--
7/6/2020	CCC+/Negative/--
6/23/2020	SD/NM/--
6/9/2020	CC/Negative/--
4/21/2020	CCC-/Negative/--
12/4/2019	CCC/Negative/--
3/28/2019	CCC+/Negative/--
3/20/2018	B-/Negative/--
9/7/2012	B/Stable/--
SD--Selective default. NM--Not meaningful.

Isagenix Worldwide Inc.

• $40 million floating-rate revolver bank loan due June 14, 2023
• $375 million floating-rate term loan bank loan due June 14, 2025

On April 23, 2021, S&P Global Ratings lowered its long-term issuer credit rating on Delaware-based cosmetics products manufacturer Isagenix Worldwide Inc. to 'SD' from 'CCC'. The issuer repurchased a significant portion of its senior secured term loan at an average price well below par, about $0.65 per dollar. The total repurchased value is about $65.5 million of its $375 million loan amount.

On April 30, 2021, we raised our long-term issuer credit rating on the company to 'B-' from 'SD'. Its operating performance has improved, and we expect EBITDA to grow in 2021, though the uncertainty in the post-pandemic environment could affect performance.

Rating history 

Table 16

Issuer Credit Rating - Isagenix Worldwide Inc.
Date	To
4/30/2021	B-/Negative/--
4/23/2021	SD/NM/--
2/20/2020	CCC/Negative/--
12/10/2019	CCC+/Negative/--
7/29/2019	B-/Negative/--
2/14/2019	B+/Negative/--
7/2/2018	B+/Stable/--
SD--Selective default. NM--Not meaningful.

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

• $56.858 million 8.00% notes due Oct. 25, 2024

On April 27, 2021, S&P Global Ratings lowered its long-term issuer credit rating on Mexico-based telecom services provider Maxcom Telecomunicaciones S.A.B. de C.V. to 'D' from 'CCC-' after the issuer announced that it won't be making the interest payment on its 8% senior secured notes due in 2024. The interest amount of about $2.3 million won't be paid within the 30-day grace period. The issuer has limited access to financial and capital markets given the tax claim from Mexico's Servicio de Administración Tributaria. The company is still in talks with its shareholders for some strategic alternatives.

Rating history 

Table 17

Issuer Credit Rating - Maxcom Telecomunicaciones, S.A.B. de C.V.
Date	To
4/27/2021	D/--/--
11/9/2020	CCC-/Negative/--
7/7/2020	CCC-/Watch Neg/--
12/10/2019	CCC+/Stable/--
8/21/2019	D/--/--
6/19/2019	CC/Watch Neg/--
4/5/2019	CCC/Negative/--
4/3/2019	SD/NM/--
5/26/2017	CCC+/Stable/--
5/24/2017	SD/NM/--
4/27/2017	CC/Negative/--
2/17/2016	CCC+/Stable/--
4/1/2014	B-/Stable/--
6/19/2013	D/--/--
2/21/2013	CC/Negative/--
12/6/2012	CCC+/Watch Neg/--
8/23/2011	CCC+/Negative/--
3/3/2011	B-/Negative/--
6/22/2010	B/Negative/--
3/9/2009	B/Stable/--
10/12/2007	B/Positive/--
11/27/2006	B/Stable/--
SD--Selective default. NM--Not meaningful.

Future Retail Ltd.

• $500 million 5.60% notes due Jan. 22, 2025

On April 28, 2021, S&P Global Ratings lowered its issuer credit rating on India-based fashion and household products retailer Future Retail Ltd. to 'SD' from 'CCC-' after the issuer completed a one-time restructuring on its onshore debt of about 102 billion Indian rupees. The restructuring was approved by the Central Bank under the resolution framework for COVID-19-related stress.

On April 30, 2021, we raised our issuer credit rating on the issuer to 'CCC-' from 'SD'. After completing the debt restructuring, the liquidity status of the company has improved because it has pushed debt repayments further. Although its debt service ability remains uncertain in the long term--since its sales dropped by 70% due to the pandemic--the asset sale to Reliance Industries Ltd. could improve the issuer's credit standing.

Rating history 

Table 18

Issuer Credit Rating - Future Retail Ltd.
Date	To
4/30/2021	CCC-/Developing/--
4/28/2021	SD/NM/--
9/15/2020	CCC-/Developing/--

Codere S.A.

• €500 million 6.75% notes due Nov. 1, 2023
• $300 million 7.625% notes due Nov. 1, 2023
• €85 million 12.75% notes due Sept. 30, 2023
• €165 million 10.75% notes due Sept. 30, 2023

On April 30, 2021, S&P Global Ratings lowered its long-term issuer credit rating on the Spain–based gaming business owner Codere S.A. to 'SD' from 'CC'. The company entered into an agreement with its ad hoc committee, formed by the majority of its noteholders, to pursue a debt restructuring. The issuer has used its 30-day grace period for paying interest on its super senior notes due 2023. The issuer deferred the interest payment of its $13.4 million coupon payment.

Rating history 

Table 19

Issuer Credit Rating - Codere S.A.
Date	To
4/30/2021	SD/NM/--
3/18/2021	CC/Negative/--
11/6/2020	CCC/Negative/--
10/15/2020	SD/NM/--
7/16/2020	CC/Negative/--
6/17/2020	CCC-/Negative/--
4/30/2020	CCC/Negative/--
3/17/2020	CCC+/Negative/--
10/14/2019	B-/Negative/--
9/10/2019	B/Watch Neg/--
9/29/2016	B/Stable/--
1/16/2014	D/--/--
12/19/2013	SD/NM/--
9/24/2013	CC/Negative/--
8/20/2013	SD/NM/--
7/29/2013	CC/Negative/--
6/21/2013	SD/NM/--
12/19/2012	CCC/Negative/--
7/6/2012	B-/Negative/--
7/2/2010	B/Stable/--
7/2/2009	B/Negative/--
10/27/2008	B+/Watch Neg/--
10/26/2007	BB-/Stable/--
6/11/2007	BB-/Watch Neg/--
6/14/2005	BB-/Stable/--

gategroup Holding AG

On May 10, 2021, S&P Global Ratings lowered its issuer credit rating on the Switzerland-based airline catering service provider gategroup Holding AG to 'SD' from 'CCC', after the issuer restructured its loans. The creditors have agreed to extend the maturity of its €665 million senior bank debt and 350 million Swiss franc (CHF) unsecured notes by five years. Senior debt lenders also agreed for an option in exchange of annual interest payments. Their shareholders have provided them additional liquidity freedom, as the financial maintenance covenants were replaced with a CHF25 million minimum liquidity test.

On May 19, 2021, we raised our long-term issuer credit rating on the company to 'CCC+' from 'SD' after it completed the restructuring and issued a new CHF475 million subordinated loan due March 2027 provided by its shareholders. These transactions have improved the liquidity position of the company, along with reducing the interest payments and principal repayments in 2021-2022.

Rating history 

Table 20

Issuer Credit Rating - gategroup Holding AG
Date	To
5/19/2021	CCC+/Stable/--
5/10/2021	SD/NM/--
11/18/2020	CCC/Watch Neg/--
4/9/2020	B/Watch Neg/--
12/6/2019	B+/Stable/--
4/3/2019	B-/Watch Pos/--
3/29/2018	B-/Stable/--
3/8/2018	B-/Watch Pos/--
2/13/2018	B-/Stable/--
11/29/2017	B/Stable/--
12/23/2016	B+/Stable/--
4/20/2016	BB-/Watch Neg/--
7/15/2014	BB-/Positive/--
6/11/2013	BB-/Stable/--
2/28/2013	BB/Negative/--
2/28/2012	BB/Stable/--
SD--Selective default. NM--Not meaningful.

Voyager Aviation Holdings LLC

• $500 million 8.50% notes due Aug. 15, 2021

On May 10, 2021, S&P Global Ratings lowered its long-term issuer credit rating on Delaware-based aircraft leasing company Voyager Aviation Holdings LLC to 'SD' from 'CC'. The issuer completed restructuring its $415 million senior unsecured notes due in August 2021. About 98.5% of its bondholders approved this transaction. The $415 million senior unsecured notes were exchanged for $150 million 8.5% senior unsecured notes, $200 million in preferred equity, and 100% of the issuer's common equity shares. Later on the same day, we withdrew the issuer credit rating at the issuer's request.

Rating history 

Table 21

Issuer Credit Rating - Voyager Aviation Holdings LLC
Date	To
5/10/2021	NR/--/--
5/10/2021	SD/NM/--
2/22/2021	CC/Watch Neg/--
2/18/2021	CCC-/Watch Neg/--
12/16/2020	CCC/Negative/--
7/22/2020	CCC+/Watch Dev/--
3/31/2020	B/Watch Neg/--
7/23/2018	B+/Stable/--
SD--Selective default. NM--Not meaningful.

CDRH Parent Inc.

• $545 million floating-rate first-lien term bank loan due July 1, 2021
• $82.5 million floating-rate revolver bank loan due July 1, 2021
• $250 million floating-rate second-lien term bank loan due July 1, 2022

On May 14, 2021, S&P Global Ratings lowered its long-term issuer credit rating on Florida-based wound care services provider CDRH Parent Inc. to 'D' from 'CC', following a distressed exchange of debt. The issuer will exchange a portion of its outstanding principal amount, nearly $150 million, under first-lien credit facilities with preferred equity, and it paid another $440 million with new debt and equity. It has also exchanged another $269 million second-lien term loan with common equity shares. Later on June 21, 2021, we withdrew the issuer credit rating at the issuer's request.

Rating history 

Table 22

Issuer Credit Rating - CDRH Parent Inc.
Date	To
6/21/2021	NR/--/--
5/14/2021	D/--/--
4/7/2021	CC/Watch Neg/--
12/17/2020	CCC-/Negative/--
11/6/2020	SD/NM/--
12/5/2019	CCC-/Negative/--
5/14/2019	CCC+/Negative/--
2/8/2018	B-/Negative/--
6/27/2017	B-/Stable/--
6/9/2014	B/Negative/--
SD--Selective default. NR--Not rated.

Boart Longyear Ltd.

• $88 million 7.00% senior notes due Dec. 31, 2022
• $200 million 10.00% senior secured notes due Dec. 31, 2022

On May 19, 2021, S&P Global Ratings lowered its long-term issuer credit rating on Australia-based drilling services provider and manufacturer Boart Longyear Ltd. to 'D' from 'CC' following a restructuring agreement with its lenders. As per the agreement, after completing upcoming legal proceedings in Australia, Boart will file for protection under Chapter 15 of the U.S. Bankruptcy Code. Under this agreement, a sizeable proportion ($796 million) of its debt will be converted to new equity stocks.

Earlier on March 5, 2021, S&P Global Ratings lowered its long-term issuer credit rating on Boart to 'CC' from 'CCC+'. The downgrade followed ongoing negotiations on recapitalization or refinancing of the company's debt obligations ahead of its June 2021 interest payment on its senior secured notes.

Rating history 

Table 23

Issuer Credit Rating - Boart Longyear Ltd.
Date	To
5/19/2021	D/--/--
3/5/2021	CC/Watch Neg/--
7/1/2020	CCC+/Negative/--
6/23/2020	SD/NM/--
5/29/2020	CC/Watch Neg/--
9/13/2017	CCC+/Stable/--
9/13/2017	CCC+/Negative/--
9/1/2017	SD/NM/--
4/5/2017	CC/Watch Neg/--
2/10/2017	CCC-/Negative/--
7/15/2015	CCC+/Stable/--
7/15/2015	CCC+/Negative/--
7/18/2014	CCC/Watch Pos/--
7/18/2014	CCC/Negative/--
3/6/2014	CCC+/Negative/--
9/12/2013	B/Negative/--
7/15/2013	B+/Stable/--
3/15/2011	BB-/Stable/--
3/15/2011	BB-/Positive/--
3/15/2011	BB-/Stable/--
SD--Selective default. NM--Not meaningful.

Peabody Energy Corp.

• $500 million 6.00% notes due March 31, 2022
• $500 million 6.375% notes due March 31, 2025
• $400 million floating-rate term bank loan due March 31, 2025
• $324 million 6.00% letters of credit facility note due Dec. 31, 2024
• $194 million 8.50% payment-in-kind notes due Dec. 31, 2024

On June 3, 2021, S&P Global Ratings lowered its long-term issuer credit rating on Missouri-based coal producer, Peabody Energy Corp. to 'SD' from 'CCC+'. The issuer completed debt-for-equity exchanges for a total of $26.5 million of principal outstanding of 6% senior notes. This is the second time we lowered our rating on the issuer to 'SD' in 2021.

On June 9, 2021, we raised our long-term issuer credit rating on Peabody Energy Corp. to 'CCC' from 'SD' after it restructured its issue of senior unsecured notes due in 2022. The issuer has nearly $1.6 billion in debt, most of which will come due between 2022 and 2025. While the company's leverage ratio (7.5x-8.5x EBITDA) does not indicate an unsustainable capital structure, the 'CCC' rating and negative outlook factor in environmental, social, and governance concerns that might pose a risk to refinancing debt obligations before or at maturity.

On July 12, 2021, we lowered our long-term issuer credit rating on Peabody to 'SD' from 'CCC' following open market repurchases and an announcement of a tender offer to purchase debt. In the second quarter, the issuer purchased about $53.13 million of its first-lien debt at 73.84% of par value.

Rating history 

Table 24

Issuer Credit Rating - Peabody Energy Corp.
Date	To
7/12/2021	SD/NM/--
6/9/2021	CCC/Negative/--
6/3/2021	SD/NM/--
2/8/2021	CCC+/Negative/--
2/3/2021	SD/NM/--
2/2/2021	CC/Negative/--
11/10/2020	CCC-/Watch Neg/--
8/14/2020	CCC+/Negative/--
7/10/2020	B/Negative/--
12/9/2019	B+/Stable/--
2/22/2018	BB-/Stable/--
5/10/2017	B+/Stable/--
10/25/2016	NR/--/--
3/18/2016	D/--/--
1/15/2016	CCC+/Negative/--
7/15/2015	B/Stable/--
5/9/2014	BB-/Negative/--
5/9/2014	BB-/Stable/--
8/26/2013	BB/Stable/--
9/15/2008	BB+/Stable/--
7/20/2001	BB/Watch Pos/--
7/20/2001	BB/Stable/--
7/20/2001	BB/Positive/--
7/20/2001	BB/Stable/--
5/11/1998	BB-/Positive/--
5/11/1998	BB-/Stable/--
SD--Selective default. NR--Not rated. NM--Not meaningful.

Carlson Travel Inc.

• €325 million floating-rate senior notes due June 15, 2025
• $410.978 million 6.75% senior notes due Dec. 15, 2025
• $250 million 11.50% senior notes due Dec. 15, 2026
• $260 million 10.50% senior notes due March 31, 2025

On April 7, 2021, S&P Global Ratings assigned its 'CCC' long-term issuer credit rating on Minnesota-based travel management company Carlson Travel Inc. The rating reflects the risk of the company violating its covenants or engaging in a debt restructuring over the next 12 months. The expectation of low travel volumes amid the pandemic places further pressure on the company's cash flow despite cost-management initiatives.

On June 23, 2021, we lowered our issuer credit rating on Carlson Travel to 'D' from 'CCC'. The company entered into a forbearance agreement with its lenders on June 21, 2021, to defer on its interest payment that was due on June 15, 2021. This agreement allows the firm to defer its interest payments and preserve cash on balance sheet.

Rating history 

Table 25

Issuer Credit Rating - Carlson Travel Inc.
Date	To
6/23/2021	D/--/--
4/7/2021	CCC/Negative/--

Ratings Performance Analytics:	Nick W Kraemer, FRM, New York + 1 (212) 438 1698; nick.kraemer@spglobal.com
	Zev R Gurwitz, New York + 1 (212) 438 7128; zev.gurwitz@spglobal.com
Research Contributors:	Lyndon Fernandes, CRISIL Global Analytical Center, an S&P affiliate, Mumbai
	Shripati Pranshu, CRISIL Global Analytical Center, an S&P affiliate, Mumbai