Key Takeaways
- Following eight defaults in September, the global corporate default tally reached 61 in 2022--one higher than in year-to-date 2021.
- Half of defaults in September came from Europe, led by U.K.-based cinema operators. So far this year, European defaults are now only one behind the 2021 full-year total.
- Over one-third of all corporate defaults this year are because of distressed exchanges.
S&P Global Ratings' 2022 global corporate default tally increased to 61 after eight companies defaulted in September:
- Netherland-based automotive light product manufacturer Bright Bidco B.V.,
- U.K.-based cinema operators Vue International Bidco PLC and Cineworld Group PLC,
- U.S.-based steel mill service provider Phoenix Services International LLC,
- Germany-based packing solution provider Schur Flexibles GmbH,
- Canada-based health care company Bausch Health Cos. Inc.,
- U.S.-based consumer products provider Isagenix Worldwide Inc., and
- One confidential issuer.
After a slow start to the year, the default tally has reached an inflection point at 61 (through September), one higher than at this point in 2021 (see chart 1). We can expect the number of defaults to continue to rise for the remainder of 2022 amid worsening credit conditions, which could erode margins and limit lower-rated companies' ability to access funding.
Month over month, defaults in Europe have been increasing and are now only one below their full-year 2021 total of 12. Half of global defaults in September came from the region--the largest percentage of which were U.K.-based cinema providers as the sector continues to struggle with weaker demand. With these defaults, we estimated that the European 12-month-trailing speculative-grade default rate rose to 1.4% in September from 0.9% in August (see table 1).
Chart 1
Table 1
Estimated Regional Default Rates In The U.S. And Europe Rose In September | ||||||
---|---|---|---|---|---|---|
Region | 12-month-trailing speculative-grade default rate (%) | Weakest links | ||||
U.S. | 1.6* | 144 | ||||
Emerging markets | 1.9 | 22 | ||||
Europe | 1.4* | 43 | ||||
Other developed | 2.2 | 11 | ||||
Global | 1.5 | 220 | ||||
*Trailing-12-month speculative-grade default rates for the U.S. and Europe are from Sept. 30, 2021-Sept. 30, 2022, and are preliminary and subject to change. Trailing-12-month speculative-grade default rates for emerging markets and other developed regions are from Aug. 31, 2021-Aug. 31, 2022. Weakest link data is as of Sept. 15, 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®. |
Distressed Exchanges Are Increasing
Distressed exchanges led defaults in September, with four, and so far in 2022, they're 36% of total defaults. Distressed exchanges have become popular over the last 10 years as a way for distressed companies to restructure out of court and negotiate with investors to address liquidity or solvency needs. As financing conditions continue to tighten and speculative-grade credit deteriorates, we can expect the number of distressed companies to rise. As a result, defaults due to distressed exchanges could become more frequent as some sectors will come under increasing pressure and issuers trade at discounted prices.
Chart 2
Chart 3
Chart 4
Table 2
So Far In 2022, Global Default Tally Reaches 61 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Date | Parent company | Country/Market | Subsector | To | From | Reason | ||||||||
4-Jan-22 |
ION Geophysical Corp. |
U.S. | Oil and gas | D | CCC | Missed principal and interest payments | ||||||||
4-Jan-22 | Confidential | Confidential | Utilities | D | NR | Confidential | ||||||||
13-Jan-22 |
R&F Properties (HK) Co. Ltd. |
Hong Kong | Homebuilders/real estate companies | SD | CC | Distressed exchange | ||||||||
19-Jan-22 | Confidential | Confidential | Homebuilders/real estate companies | SD | CCC- | Confidential | ||||||||
24-Jan-22 |
Fusion Connect Inc. |
U.S. | Telecommunications | SD | CC | Distressed exchange | ||||||||
1-Feb-22 |
Future Retail Ltd. |
India | Consumer products | SD | CCC- | Missed principal payments | ||||||||
1-Feb-22 |
TPC Group Inc. (TPC Group LLC) |
U.S. | Health care | D | CCC | Missed interest payments | ||||||||
4-Feb-22 | Confidential | Confidential | Consumer products | D | NR | Confidential | ||||||||
9-Feb-22 | Confidential | Confidential | Consumer products | SD | CCC | Confidential | ||||||||
10-Feb-22 |
Credito Real, S.A.B. de C.V., SOFOM, E.N.R. |
Mexico | Financial institutions | SD | CCC- | Missed principal payments | ||||||||
11-Feb-22 | Confidential | Confidential | Homebuilders/real estate companies | SD | CC | Confidential | ||||||||
17-Feb-22 |
U.S. TelePacific Holdings Corp. |
U.S. | Telecommunications | SD | CCC- | Distressed exchange | ||||||||
15-Mar-22 |
Diamond Sports Group, LLC (Sinclair Broadcast Group Inc.) |
U.S. | Media and entertainment | SD | CC | Distressed exchange | ||||||||
21-Mar-22 |
Mulhacen Pte. Ltd. |
Singapore | Financial Institutions | D | CC | Distressed exchange | ||||||||
24-Mar-22 |
MHP SE |
Ukraine | Consumer products | SD | B- | Missed interest payments | ||||||||
1-Apr-22 |
Ruby Pipeline LLC |
U.S. | Utilities | D | CC | Missed principal payments | ||||||||
7-Apr-22 |
Owl Finance Ltd. (Hibu Group Ltd.) |
U.K. | Media and entertainment | SD | CC | Distressed exchange | ||||||||
7-Apr-22 |
PSS Industrial Group Corp |
U.S. | Utilities | D | CCC- | Missed principal and interest payments | ||||||||
8-Apr-22 |
Guangzhou R&F Properties Co. Ltd. |
China | Homebuilders/real estate companies | SD | CC | Distressed exchange | ||||||||
8-Apr-22 |
Kernel Holding S.A. |
Ukraine | Consumer products | SD | B- | Missed interest payments | ||||||||
11-Apr-22 | Confidential | Confidential | Homebuilders/real estate companies | SD | CC | Confidential | ||||||||
11-Apr-22 |
Promotora de Informaciones S.A. |
Spain | Media and entertainment | SD | CC | Distressed exchange | ||||||||
12-Apr-22 |
Dunn Paper Holdings Inc. |
U.S. | Chemicals, packaging, and environmental services | D | CCC | Missed interest payments | ||||||||
12-Apr-22 |
Grupo Kaltex S.A. de C.V. |
Mexico | Consumer products | D | CCC- | Missed principal payments | ||||||||
12-Apr-22 |
Petropavlovsk PLC |
U.K. | Metals, mining, and steel | SD | CCC- | Missed interest payments | ||||||||
13-Apr-22 | Confidential | Confidential | High technology | D | CCC | Confidential | ||||||||
14-Apr-22 |
EuroChem Group AG |
Switzerland | Chemicals, packaging, and environmental services | SD | CCC- | Missed interest payments | ||||||||
22-Apr-22 | Confidential | Confidential | Aerospace and defense | SD | CCC+ | Confidential | ||||||||
3-May-22 |
Envision Healthcare Corp. (Envision Healthcare Holdings Inc.) |
U.S. | Health care | SD | CCC | Distressed exchange | ||||||||
6-May-22 |
Safari Beteiligungs Gmbh (Dice Midco Sarl) |
Germany | Media and entertainment | SD | CC | Distressed exchange | ||||||||
10-May-22 |
Talen Energy Supply LLC (Talen Energy Corp.) |
U.S. | Utilities | D | CCC | Bankruptcy | ||||||||
26-May-22 | Confidential | Confidential | Financial institutions | SD | CCC- | Confidential | ||||||||
1-Jun-22 | Confidential | Confidential | Homebuilders/real estate companies | SD | CC | Confidential | ||||||||
10-Jun-22 | Confidential | Confidential | Homebuilders/real estate companies | SD | CC | Confidential | ||||||||
13-Jun-22 | Confidential | Confidential | Homebuilders/real estate companies | SD | CC | Confidential | ||||||||
16-Jun-22 |
Revlon Inc. |
U.S. | Consumer products | D | CCC- | Bankruptcy | ||||||||
21-Jun-22 |
Greenland Holding Group Co. Ltd. |
China | Homebuilders/real estate companies | SD | CC | Distressed exchange | ||||||||
30-Jun-22 |
Rite Aid Corp. |
U.S. | Retail/restaurants | SD | CC | Distressed exchange | ||||||||
6-Jul-22 |
Canopy Growth Corp. |
Canada | Consumer products | SD | CCC | Distressed exchange | ||||||||
7-Jul-22 |
SAS AB |
Sweden | Transportation | D | CC | Bankruptcy | ||||||||
14-Jul-22 |
SK HoldCo LLC |
U.S. | Automotive | SD | CC | Distressed exchange | ||||||||
18-Jul-22 |
PT Sawit Sumbermas Sarana Tbk |
Indonesia | Forest products and building materials | SD | CC | Distressed exchange | ||||||||
28-Jul-22 |
Mountain Province Diamonds Inc. |
Canada | Metals, mining, and steel | SD | CCC- | Distressed exchange | ||||||||
9-Aug-22 |
Output Services Group Inc. |
U.S. | Consumer products | D | CC | Bankruptcy | ||||||||
9-Aug-22 |
Unifin Financiera S.A.B. de C.V. |
Mexico | Financial institutions | D | B+ | Missed principal and interest payments | ||||||||
11-Aug-22 |
Dawn Acquisitions LLC (Infra Colodata Holdings LLC) |
U.S. | Telecommunications | SD | CCC | Distressed exchange | ||||||||
12-Aug-22 | Confidential | Confidential | Retail/restaurants | SD | CCC- | Confidential | ||||||||
12-Aug-22 |
Altera Infrastructure L.P. |
Marshall Islands | Midstream | D | NR | Bankruptcy | ||||||||
17-Aug-22 |
Endo International PLC |
Ireland | Health care | D | CC | Bankruptcy | ||||||||
19-Aug-22 |
GEO Group Inc. (The) |
U.S. | Consumer products | SD | CC | Distressed exchange | ||||||||
23-Aug-22 |
Carestream Health Inc. |
U.S. | Health care | D | CC | Bankruptcy | ||||||||
29-Aug-22 | Confidential | Confidential | Homebuilders/real estate companies | SD | CCC | Confidential | ||||||||
30-Aug-22 |
Envision Healthcare Corp. (Envision Healthcare Holdings Inc.) |
U.S. | Health care | SD | CCC | Distressed exchange | ||||||||
1-Sep-22 |
Bright Bidco B.V. |
Netherlands | Automotive | D | CCC | Bankruptcy | ||||||||
1-Sep-22 |
Vue International Bidco plc (Vue Entertainment International Ltd) |
U.K. | Media and entertainment | D | CC | Distressed exchange | ||||||||
9-Sep-22 |
Cineworld Group PLC |
U.K. | Media and entertainment | D | CCC | Bankruptcy | ||||||||
27-Sep-22 |
Eurotorg LLC |
Belarus | Retail/restaurants | SD | CCC | Distressed exchange | ||||||||
28-Sep-22 |
Phoenix Services International LLC |
U.S. | Metals, mining, and steel | D | CCC+ | Bankruptcy | ||||||||
30-Sep-22 |
Isagenix Worldwide Inc. |
U.S. | Consumer products | D | CCC | Missed principal and interest payments | ||||||||
30-Sep-22 |
Bausch Health Cos. Inc. |
Canada | Health care | SD | CC | Distressed exchange | ||||||||
30-Sep-22 |
Schur Flexibles GmbH |
Germany | Chemicals, packaging, and environmental services | SD | CC | Distressed exchange | ||||||||
Data as of Sept. 30, 2022. NR--Not rated. SD--Selective default. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®. |
Related Research
- Bausch Health Cos. Inc. Rating Lowered To 'SD' From 'CC' On Distressed Exchange, Oct. 1, 2022
- Isagenix Worldwide Inc. Downgraded To 'D' From 'CCC' On Forbearance Agreement, Missed Payments, Oct. 1, 2022
- Schur Flexibles GmbH Downgraded To 'SD' On Completion Of Debt Restructuring, Sept. 30, 2022
- Phoenix Services International LLC Downgraded To 'D' From 'CCC+' On Voluntary Petitions For Chapter 11 Bankruptcy, Sept. 29, 2022
- Global Macro Update: Many Routes To The Bottom, Sept. 28, 2022
- Credit Conditions Europe Q4 2022: Hunkering Down For Winter, Sept. 27, 2022
- Cineworld Group PLC Downgraded To 'D' Following Chapter 11 Bankruptcy Filing, Sept. 9, 2022
- Nord Stream 1 Shutdown: Will Utilities And Markets Freeze This Winter?, Sept. 6, 2022
- Bright Bidco B.V. Downgraded To 'D' Following Chapter 11 Filing, Sept. 1, 2022
- Cinema Operator Vue Downgraded To 'D' On Unanimous Agreement To Restructuring Transaction, Sept. 1, 2022
- Europe Braces For A Bleak Winter, Aug. 29, 2022
- The European Speculative-Grade Corporate Default Rate Could Rise To 3% By June 2023, Aug. 22, 2022
- The U.S. Speculative-Grade Corporate Default Rate Could Reach 3.5% By June 2023, Aug. 19, 2022
- Assessing Media's Vulnerability To Today's Macroeconomic Risks, Aug. 3, 2022
- Industry Top Trends Update: Media And Entertainment North America, July 14, 2022
- Industry Top Trends Update: Media And Entertainment EMEA, July 14, 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 U.S. Corporate Default And Rating Transition Study
- 2021 Annual European Corporate Default And Rating Transition Study
- 2021 Annual Japanese Corporate Default And Rating Transition Study
- 2021 Annual Taiwan Ratings Corp. 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 Asia Corporate Default And Rating Transition Study
- 2020 Annual Greater China Corporate Default And Rating Transition Study
- 2020 Annual Latin American Corporate Default And Rating Transition Study
- 2020 Annual Global Financial Services Default And Rating Transition Study
- 2020 Annual Emerging And Frontier Markets Corporate Default And Rating Transition Study
Structured finance
- 2021 Annual Global Structured Finance Default And Rating Transition Study
- 2021 Annual European Structured Finance Default And Rating Transition Study
- 2021 Annual Japanese Structured Finance Default And Rating Transition Study
- 2021 Annual Taiwan Structured Finance Default And Rating Transition Study
- 2020 Annual Mexican Structured Finance Default And Rating Transition Study
Public finance
- 2021 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
- 2021 Annual Global Sovereign Default And Rating Transition Study
- 2021 Annual International Public Finance 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 |
Patrick Drury Byrne, Dublin (00353) 1 568 0605; patrick.drurybyrne@spglobal.com | |
Research Contributor: | Vaishali Singh, CRISIL Global Analytical Center, an S&P affiliate, Mumbai |
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