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Default, Transition, and Recovery: Quarter-On-Quarter Default Totals Inch Up

The 2022 global corporate default tally increased to 14 after Ukraine-based leading poultry meat producer and exporter of consumer goods MHP SE missed an interest payment. So far in 2022, the global corporate default tally is at its lowest year-to-date level since 2014; however, the pace of defaults has increased compared with the previous two quarters, which had 13 and 12 defaults, respectively (see chart 1).

By region, emerging markets now leads the global corporate default tally along with the U.S., with seven defaults each. This is the highest year-to-date default tally for emerging markets since 2015 and comes at a time when global financing conditions are tightening, inflation is rising, and the Russia-Ukraine conflict is generating significant market volatility--all of which could lead to additional credit stress for lower rated issuers (see "Credit Conditions Emerging Markets Q2 2022: Conflict Exacerbates Risks," March 29, 2022).

This Weeks Observations:

  • The first quarter of 2022 reached its highest quarterly total since second-quarter 2021 as the default total increased to 14.
  • All defaults year to date have been exclusively in the emerging markets or U.S. regions, with seven each.
  • The emerging markets default rate at 1.8% remains below its five-year average, but risks in the region are rising.
  • Globally, the consumer products and home builders/real estate sectors led the tally with three defaults each.

Table 1

Year-To-Date 2022 Global Defaults Increased To 14
Region 12-month-trailing speculative-grade default rate (%) YTD 2022 YTD 2021 2021 Weakest links
U.S. 1.5 7 15 40 121
Emerging market 1.8 7 2 15 64
Europe 1.2 0 8 14 61
Other developed 2.2 0 1 3 10
Global 1.5 14 26 72 256
Note: Trailing-12-month speculative-grade default rates from Feb. 28, 2021 – Feb. 28, 2022. YTD--Year-to-date data as of March 30. Weakest link data is as of Feb. 28, 2022. 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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Table 2

The Global Corporate Defaults Tally Reaches 14 So Far In 2022
Date Parent company Country/Market Subsector To From Reason
1/4/2022

ION Geophysical Corp.

U.S. Oil and gas D CCC Missed principal and interest payments
1/4/2022 Confidential Confidential Utilities D NR Confidential
1/13/2022

R&F Properties (HK) Co. Ltd.

Hong Kong Homebuilders/real estate companies SD CC Distressed exchange
1/19/2022 Confidential Confidential Homebuilders/real estate companies SD CCC- Confidential
1/24/2022 Fusion Connect Inc. U.S. Telecommunications SD CC Distressed exchange
2/1/2022

Future Retail Ltd.

India Consumer Products SD CCC- Missed principal payments
2/1/2022 TPC Group Inc. (TPC Group LLC) U.S. Health care D CCC Missed interest payments
2/9/2022 Confidential Confidential Consumer Products SD CCC Confidential
2/10/2022

Credito Real, S.A.B. de C.V., SOFOM, E.N.R.

Mexico Financial Institutions SD CCC- Missed principal payments
2/11/2022 Confidential Confidential Homebuilders/real estate companies SD CC Confidential
2/17/2022

U.S. TelePacific Holdings Corp.

U.S. Telecommunications SD CCC- Distressed exchange
3/15/2022 Diamond Sports Group, LLC (Sinclair Broadcast Group Inc.) U.S. Media and Entertainment SD CC Distressed exchange
3/21/2022

Mulhacen Pte. Ltd.

Singapore Financial Institutions D CC Distressed exchange
3/24/2022

MHP SE

Ukraine Consumer Products SD B- Missed interest payments
Data as of March 30, 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
Patrick Drury Byrne, Dublin (00353) 1 568 0605;
patrick.drurybyrne@spglobal.com
Additional Contact:Vaishali Singh, Pune;
vaishali.singh2@spglobal.com

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