The 2022 global corporate default tally increased to 28 this week after Colorado-based health care company Envision Healthcare Corp. announced that it had raised new financing at one of its subsidiaries and used the net proceeds to repurchase portions of its outstanding first-lien term loan B, incremental term loan, and unsecured notes at a price below par. We view this transaction as a distressed exchange and tantamount to a default because the company's creditors received less than the principal amount they were originally due to receive (see "Envision Healthcare Corp. Downgraded To 'SD' On Below-Par Debt Repurchases, Ratings On Affected Issues Lowered To 'D'," May 3, 2022).
The global tally remains well below previous year levels, largely driven by a decrease of defaults in Europe and the U.S. The U.S. tally is now at its lowest year-to-date level since 2011 despite concerns regarding rising inflation, monetary policy tightening and ongoing supply-chain challenges (see "U.S. Corporate Credit Quality Remains Insulated From The Russia-Ukraine Conflict…So Far," April 28, 2022). S&P Global Ratings expects the 12-month-trailing speculative-grade default rate to rise to 3% by December 2022.
This Week's Observations:
- U.S-based health care company Envision was the only default over the last week, bringing the global tally to 28.
- The global default tally remains materially below its 2021 year-to-date total of 39.
- All regions except emerging markets have lower year-to-date totals compared with last year.
- The consumer products sector leads the tally with six, followed by the homebuilders' and real estate sector with four defaults.
Table 1
Year-To-Date 2022 Global Defaults Increased To 28 | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Region | 12-month-trailing speculative-grade default rate (%) | YTD 2022 | YTD 2021 | 2021 | Weakest links | |||||||
U.S. | 1.3* | 13 | 22 | 40 | 121 | |||||||
Emerging market | 2.0 | 11 | 6 | 15 | 64 | |||||||
Europe | 0.9* | 4 | 10 | 14 | 61 | |||||||
Other developed | 1.5 | 0 | 1 | 3 | 10 | |||||||
Global | 1.4 | 28 | 39 | 72 | 256 | |||||||
YTD--Year to date. Note: *Trailing-12-month speculative-grade default rates from March 31, 2021 – March 31, 2022, are preliminary and subject to change. Year-to-date data as of May 4, 2022. Weakest link data is as of March 8, 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®. |
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Table 2
The Global Corporate Defaults Tally Reaches 28 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 | ||||||||
2/4/2022 | Confidential | Confidential | Consumer Products | D | NR | Confidential | ||||||||
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 | ||||||||
4/1/2022 | Ruby Pipeline LLC | U.S. | Utilities | D | CC | Missed principal payments | ||||||||
4/7/2022 | Owl Finance Ltd. (Hibu Group Ltd.) | U.K. | Media and entertainment | SD | CC | Distressed exchange | ||||||||
4/7/2022 | PSS Industrial Group Corp. | U.S. | Utilities | D | CCC- | Missed principal and interest payments | ||||||||
4/8/2022 |
Guangzhou R&F Properties Co. Ltd. |
China | Homebuilders/real estate companies | SD | CC | Distressed exchange | ||||||||
4/8/2022 |
Kernel Holding S.A. |
Ukraine | Consumer products | SD | B- | Missed interest payments | ||||||||
4/11/2022 |
Promotora de Informaciones S.A. |
Spain | Media and entertainment | SD | CC | Distressed exchange | ||||||||
4/12/2022 |
Dunn Paper Holdings Inc. |
U.S. | Chemicals, packaging, and environmental services | D | CCC | Missed interest payments | ||||||||
4/12/2022 | Grupo Kaltex, S.A. de C.V. | Mexico | Consumer products | D | CCC- | Missed principal payments | ||||||||
4/12/2022 | Petropavlovsk PLC | U.K. | Metals, mining, and steel | SD | CCC- | Missed interest payments | ||||||||
4/13/2022 | Confidential | Confidential | High technology | D | CCC | Confidential | ||||||||
4/14/2022 | EuroChem Group AG | Switzerland | Chemicals, packaging, and environmental services | SD | CCC- | Missed interest payments | ||||||||
4/22/2022 | Wesco Aircraft Holdings Inc. (Wolverine Intermediate Holding Corp.) | U.S. | Aerospace and defense | SD | CCC+ | Distressed exchange | ||||||||
5/3/2022 | Envision Healthcare Corp. (Envision Healthcare Holdings Inc.) | U.S. | Health Care | SD | CCC | Distressed exchange | ||||||||
Data as of May 4, 2022. NR--Not rated. SD--Selective default. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro® |
Related Research
- Slower, But Continued Positive Momentum, Points To Lower Near-Term Downgrade Risk, May 5, 2022
- Envision Healthcare Corp. Downgraded To 'SD' On Below-Par Debt Repurchases, Ratings On Affected Issues Lowered To 'D', May 3, 2022
- U.S. Corporate Credit Quality Remains Insulated From The Russia-Ukraine Conflict…So Far, April 28, 2022
Default Studies
More analysis and statistics are available in our annual default studies, published on RatingsDirect:
Corporate (financial and nonfinancial)
- 2021 Annual Global Corporate Default And Rating Transition Study
- 2021 Annual Japanese Corporate Default And Rating Transition Study
- 2020 Annual Australia And New Zealand Corporate Default And Rating Transition Study
- 2020 Annual Infrastructure Default And Rating Transition Study
- 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 Mexican National Scale Corporate And Public Finance Default And Rating Transition Study
- 2020 Annual Emerging And Frontier Markets Corporate Default And Rating Transition Study
Structured finance
- 2021 Annual Japanese Structured Finance Default And Rating Transition Study
- 2020 Annual Mexican Structured Finance Default And Rating Transition Study
- 2020 Annual European Structured Finance Default And Rating Transition Study
- 2020 Annual Global Leveraged Loan CLO Default And Rating Transition Study
- 2020 Annual Taiwan Structured Finance Default And Rating Transition Study
U.S. public finance
- 2020 Annual U.S. Public Finance Default And Rating Transition Study
- 2020 Annual Mexican National Scale Corporate And Public Finance Default And Rating Transition Study
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 | |
Vaishali Singh, Pune; vaishali.singh2@spglobal.com |
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