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COMMENTS

Default, Transition, and Recovery: 2022 Defaults Inch Past Year-To-Date 2021 Tally As Credit Conditions Worsen

COMMENTS

This Month In Credit: 2024 Data Companion

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Credit Trends: Risky Credits: U.S. And Canadian Risky Credits Drop For Third Straight Quarter Amid Sector Divergences

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Credit Trends: Risky Credits: Defaults Have Driven A Decline In European Risky Credits

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Credit Trends: Risky Credits: Emerging Markets: Issuance Activity And Deleveraging Plans


Default, Transition, and Recovery: 2022 Defaults Inch Past Year-To-Date 2021 Tally As Credit Conditions Worsen

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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

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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

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Chart 3

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Chart 4

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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

Default Studies

More analysis and statistics are available in our annual default studies, published on RatingsDirect:

Corporate (financial and nonfinancial)

Structured finance
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
Research Contributor:Vaishali Singh, CRISIL Global Analytical Center, an S&P affiliate, Mumbai

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