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Default, Transition, and Recovery: Global Corporate Defaults Drop Nearly 70% In 2021

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Default, Transition, and Recovery: Global Corporate Defaults Drop Nearly 70% In 2021

(Editor's Note: Relevant calculations are based on issuer count rather than outstanding debt amount.)

There were three additional defaults in 2021 following our last report on Dec. 9, 2021:

  • Malaysia-based engineering and construction company Serba Dinamik Holdings Bhd.,
  • China-based (Cayman Island incorporated) real estate company China Evergrande Group, and
  • One confidential issuer.

The 2021 corporate default tally of 72 is the lowest since 2014--down nearly 70% from the previous year's total of 226 and significantly below its pre-pandemic 2019 levels (see table 1). The pace of defaults in 2021 slowed with each quarter, dropping to only 12 defaults in the fourth quarter (the lowest quarterly tally since 2014), from 26 defaults in the first quarter (see chart 1). Distressed exchanges accounted for the largest portion of corporate defaults in 2021 at 51% while the highest number of defaults were concentrated within the homebuilders and real estate sector at 10 (see charts 2 and 3). We estimate that the December 2021 12-month trailing speculative-grade default rates for the U.S and Europe will be 1.5% and 1.8%, respectively.

Table 1

The U.S. Leads 2021 Defaults With 40 Out Of 72
Region 12-month trailing speculative-grade default rate (%) 2021 2020 2019 Weakest links
U.S. 1.5* 40 146 78 135
Emerging market 1.7 15 28 22 20
Europe 1.8* 14 42 15 50
Other developed 2.2 3 10 3 11
Global 1.8 72 226 119 216
*Trailing-12-month speculative-grade default rates from Nov. 30, 2020-Nov. 30, 2021 are preliminary and subject to change. Year-to-date data as of Jan. 5, 2022. Weakest link data as of Dec. 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®.

Chart 1

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Chart 2

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Chart 3

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ION Geophysical Corp. Becomes The First Default Of 2022

2022 recorded its first default of the year as U.S.-based marine seismic data company ION Geophysical Corp. missed interest and principal payments on its 8% senior secured notes due 2025 and its 9.125% unsecured notes due 2020 (see "ION Geophysical Corp. Downgraded To 'D' On Missed Interest And Principal Payments," Jan. 4, 2021). This is ION's second default in the last 12 months, having previously defaulted in April 2021 after completing a debt exchange offer. Overall, we expect speculative-grade defaults to remain low through 2022, with default forecasts of 2.5% for both the U.S and Europe by September 2022 (see "The U.S. Speculative-Grade Corporate Default Rate Could Reach 2.5% By September 2022," Nov. 16, 2021 and "The European Speculative-Grade Corporate Default Rate Could Reach 2.5% By September 2022," Nov. 18, 2021).

Chart 4

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Chart 5

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Table 2

The 2021 Global Corporate Default Tally Increased To 72
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. (A)

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. (A)

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

AI 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

Sunshine 100 China Holdings Ltd. (B)

Cayman Islands 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
9/21/2021 Array Canada Inc. Canada Consumer products SD CCC Distressed exchange
9/29/2021 Confidential Confidential Financial institutions D B- Confidential
10/4/2021

IPC Corp.

U.S. Telecommunications SD CCC- Distressed exchange
10/5/2021

Fantasia Holdings Group Co. Ltd.

Cayman Islands Homebuilders/real estate companies SD CCC Missed bond repayment
10/15/2021 Confidential Confidential Homebuilders/real estate companies SD CC Confidential
10/19/2021

Sinic Holdings (Group) Co. Ltd.

Cayman Islands Homebuilders/real estate companies SD CC Missed bond repayment
11/2/2021

Exela Technologies Inc.

U.S. Media and entertainment SD CCC- Distressed exchange
11/11/2021

Investimentos e Participacoes em Infraestrutura S.A. - Invepar

Brazil Utility D CC Distressed exchange
11/17/2021

Riverbed Parent Inc. (B)

U.S. High Technology D CC Chapter 11
12/6/2021

China Aoyuan Group Ltd.

Cayman Islands Homebuilders/real estate companies SD CCC Missed principal payments
12/8/2021 Confidential Confidential Capital goods D CCC+ Confidential
12/9/2021

Serba Dinamik Holdings Bhd.

Malaysia Capital Goods D CC Missed principal payments
12/17/2021

China Evergrande Group

Cayman Islands Homebuilders/real estate companies SD CC Missed interest payments
12/19/2021 Confidential Confidential Transportation D NR Confidential
Data as of Jan. 6, 2022. (B) designation indicates the issuer's second default for 2021. (C) designation indicates the issuer's third default for 2021. *Sunshine 100 China Holdings Ltd., Fantasia Holdings Group Co. Ltd. and Sinic Holdings (Group) Co Ltd. are incorporated in the Cayman Islands but invest, develop, and manage 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. Sources: S&P Global Ratings Research and S&P Global Market Intelligence’s CreditPro®.

Table 3

The 2022 Global Corporate Default Tally Opened With 1
Date Parent company Country Subsector To From Reason
1/4/2022

ION Geophysical Corp.

U.S. Oil and gas D CCC Missed principal and interest payments
Data as of Jan. 5, 2022. NR--Not rated. SD--Selective default. 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:Patrick Drury Byrne, Dublin (00353) 1 568 0605;
patrick.drurybyrne@spglobal.com
Research Contributor:Yogesh Kumar, CRISIL Global Analytical Center, an S&P affiliate, Mumbai

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