Key Takeaways
- The global corporate default tally rose by seven to 68 as of Oct. 31, four above comparable 2021 levels. Both Europe and emerging markets have higher year-to-date defaults than 2021.
- Europe added three defaults, and we estimate the European trailing-12-month speculative-grade corporate default rate will jump to 1.8% as of October 2022 from 1.3%.
- Defaults in emerging markets continue to climb and are closing in on 2x 2021 year-to-date levels.
S&P Global Ratings' 2022 global corporate default tally has increased to 68 after seven companies defaulted in October:
- U.K.-based business communications MLN UK Holdco Ltd.
- Bermuda based aircraft services provider Fly Leasing Ltd.
- U.S.-based car and truck parts provider K&N Parent Inc.
- Uzbekistan-based bank Private Joint-Stock Commercial Bank Turkiston
- Switzerland-domiciled offshore contract driller Transocean Ltd.
- Luxembourg-based nonferrous and ferrous metal trader and recycler Metalcorp Group S.A.
- One confidential issuer
With seven defaults in October, global levels remain higher than at this point in 2021. Emerging markets exhibit the greatest underperformance versus 2021 with a total only seven fewer defaults than the U.S., which has a significantly larger issuer base.
For the second consecutive month, Europe co-leads monthly defaults and has surpassed its 2021 year-to-data level of 14. In the U.S., defaults remain low at 17% below the previous year's level. Nonetheless, we expect the number of defaults to continue to rise across regions for the remainder of 2022 amid worsening credit conditions, which could erode margins and limit lower-rated companies' ability to access funding.
Chart 1
By sector, homebuilders and real estate, and consumer products lead with 11 defaults each. While consumer product defaults are spread across multiple regions, the majority of homebuilder and real estate defaults come from the emerging markets region due to an increase in China-based homebuilder defaults as the sector continues to be hit by weaker sales and delays to housing construction and delivery. Media and entertainment (primarily leisure) defaults, however, are largely European-based as issuers face the consequences of higher inflation as consumer-driven sectors remain most exposed to the reduction in real disposable incomes.
Chart 2
Table 1
Global Corporate Default Summary | ||||||
---|---|---|---|---|---|---|
Region | Trailing-12-month speculative-grade default rate (%) | Weakest links | ||||
U.S. | 1.6* | 144 | ||||
Emerging market | 1.9 | 22 | ||||
Europe | 1.8* | 43 | ||||
Other developed | 2.3 | 11 | ||||
Global | 1.6 | 220 | ||||
*Trailing-12-month speculative-grade default rates for from Oct. 31, 2022, to Oct. 31, 2022, are preliminary and subject to change. All other trailing-12-month speculative-grade default rates are from Sept. 30, 2022, to Sept. 30, 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®. |
We continued to see an increase in distressed exchanges in October. Four of the defaults in October were from distressed exchanges. Distressed exchanges have become more prevalent in recent 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 exchanges to continue to rise, and in 2022 to date, it represents the primary reason for defaults.
Chart 3
Chart 4
Table 2
So Far In 2022, Total Global Default Tally Reaches 68 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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 | Confidential | Confidential | Homebuilders/real estate companies | SD | CC | Confidential | ||||||||
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 | Confidential | Confidential | Aerospace and defense | SD | CCC+ | Confidential | ||||||||
5/3/2022 | Envision Healthcare Corp. (Envision Healthcare Holdings Inc.) | U.S. | Health Care | SD | CCC | Distressed exchange | ||||||||
5/6/2022 | Safari Beteiligungs Gmbh (Dice Midco Sarl) | Germany | Media & Entertainment | SD | CC | Distressed exchange | ||||||||
5/10/2022 | Talen Energy Supply LLC (Talen Energy Corp.) | U.S. | Utlities | D | CCC | Bankruptcy | ||||||||
5/26/2022 | Confidential | Confidential | Financial institutions | SD | CCC- | Confidential | ||||||||
6/1/2022 | Confidential | Confidential | Homebuilders/real estate companies | SD | CC | Confidential | ||||||||
6/10/2022 | Confidential | Confidential | Homebuilders/real estate companies | SD | CC | Confidential | ||||||||
6/13/2022 | Confidential | Confidential | Homebuilders/real estate companies | SD | CC | Confidential | ||||||||
6/16/2022 | Revlon Inc. | U.S. | Consumer products | D | CCC- | Bankruptcy | ||||||||
6/21/2022 |
Greenland Holding Group Co. Ltd. |
China | Homebuilders/real estate companies | SD | CC | Distressed exchange | ||||||||
6/30/2022 |
Rite Aid Corp. |
U.S. | Retail/restaurants | SD | CC | Distressed exchange | ||||||||
7/6/2022 |
Canopy Growth Corp. |
Canada | Consumer products | SD | CCC | Distressed exchange | ||||||||
7/7/2022 |
SAS AB |
Sweden | Transportation | D | CC | Bankruptcy | ||||||||
7/14/2022 | SK HoldCo LLC | U.S. | Automotive | SD | CC | Distressed exchange | ||||||||
7/18/2022 | PT Sawit Sumbermas Sarana Tbk | Indonesia | Forest products and building materials | SD | CC | Distressed exchange | ||||||||
7/28/2022 |
Mountain Province Diamonds Inc. |
Canada | Metals, mining, and steel | SD | CCC- | Distressed exchange | ||||||||
8/9/2022 | Output Services Group, Inc. | U.S. | Consumer products | D | CC | Bankruptcy | ||||||||
8/9/2022 | Unifin Financiera, S.A.B. de C.V. | Mexico | Financial institutions | D | B+ | Missed principal and interest payments | ||||||||
8/11/2022 | Dawn Acquisitions LLC (Infra Colodata Holdings LLC) | U.S. | Telecommunications | SD | CCC | Distressed exchange | ||||||||
8/12/2022 | Confidential | Confidential | Retail/restaurants | SD | CCC- | Confidential | ||||||||
8/12/2022 | Altera Infrastructure L.P. | Marshall Islands | Midstream | D | NR | Bankruptcy | ||||||||
8/17/2022 | Endo International PLC | Ireland | Health Care | D | CC | Bankruptcy | ||||||||
8/19/2022 | GEO Group (The) Inc. | U.S. | Consumer products | SD | CC | Distressed exchange | ||||||||
8/23/2022 |
Carestream Health Inc. |
U.S. | Health Care | D | CC | Bankruptcy | ||||||||
8/29/2022 | Confidential | Confidential | Homebuilders/real estate companies | SD | CCC | Confidential | ||||||||
8/30/2022 | Envision Healthcare Corp. (Envision Healthcare Holdings Inc.) | U.S. | Health Care | SD | CCC | Distressed exchange | ||||||||
9/1/2022 |
Bright Bidco B.V. |
Netherlands | Automotive | D | CCC | Bankruptcy | ||||||||
9/1/2022 | Vue International Bidco plc (Vue Entertainment International Ltd) | U.K. | Media and entertainment | D | CC | Distressed exchange | ||||||||
9/9/2022 |
Cineworld Group PLC |
U.K. | Media and entertainment | D | CCC | Bankruptcy | ||||||||
9/27/2022 | Confidential | Confidential | Retail/Restaurants | SD | CC | Confidential | ||||||||
9/28/2022 |
Phoenix Services International LLC |
U.S. | Metals, mining, and steel | D | CCC+ | Bankruptcy | ||||||||
9/30/2022 | Isagenix Worldwide, Inc | U.S. | Consumer products | D | CCC | Missed principal and interest payments | ||||||||
9/30/2022 | Bausch Health Companies Inc. | Canada | Health care | SD | CC | Distressed exchange | ||||||||
9/30/2022 |
Schur Flexibles GmbH |
Germany | Chemicals, packaging, and environmental services | SD | CC | Distressed exchange | ||||||||
10/3/2022 |
Transocean Ltd. |
Switzerland | Oil and gas | SD | CC | Distressed exchange | ||||||||
10/6/2022 | Metalcorp Group S.A. | Luxembourg | Metals, mining, and steel | SD | B | Missed principal payments | ||||||||
10/11/2022 |
Turkiston Bank |
Uzbekistan | Financial institutions | D | CCC+ | Bankruptcy | ||||||||
10/13/2022 | K&N Parent, Inc. | U.S. | Automotive | D | CCC | Distressed exchange | ||||||||
10/19/2022 | Fly Leasing Ltd | Bermuda | Transportation | SD | CCC- | Distressed exchange | ||||||||
10/25/2022 | Confidential | Confidential | Homebuilders/real estate companies | SD | CC | Confidential | ||||||||
10/31/2022 | Mitel Networks (International) Ltd | U.K. | High Technology | SD | CCC | Distressed exchange | ||||||||
Data as of Oct. 31, 2022. NR--Not rated. SD--Selective default. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®. |
Related Research
- S&P Global Ratings’ Metal Price Assumptions: Lower Prices And Higher Costs Start Squeezing Profits, Nov. 1, 2022
- Mitel Networks (International) Ltd. Downgraded To 'SD' From 'CCC' On Distressed Exchange; Debt Rating Lowered To 'D', Nov. 1, 2022
- Fly Leasing Ltd. Downgraded To ‘SD’ On Below-Par Debt Repurchases; Unsecured Note Rating Lowered To ‘D’, Oct. 20, 2022
- K&N Parent Inc. Downgraded To 'D' From 'CCC' On Distressed Transaction; Debt Ratings Lowered To 'D', Oct. 14, 2022
- Uzbekistan-Based Turkiston Bank Downgraded To 'D/D' And Ratings Withdrawn After Central Bank Revokes License, Oct. 11, 2022
- Transocean Ltd. Downgraded To 'SD' On Completion Of Distressed Exchanges, Oct. 3, 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 Japanese Corporate Default And Rating Transition Study
- 2021 Annual Taiwan Ratings Corp. Corporate Default And Rating Transition Study
- 2021 Annual Taiwan Structured Finance 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 European Corporate 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 Leveraged Loan CLO Default And Rating Transition Study
- 2021 Annual Global 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 European Structured Finance Default And Rating Transition Study
- 2020 Annual Mexican Structured Finance Default And Rating Transition Study
U.S. public finance
- 2021 Annual U.S. Public Finance Default And Rating Transition Study
- 2020 Annual International 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
- 2020 Annual International Public Finance Default And Rating Transition Study
- 2020 Annual Mexican National Scale Corporate And 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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