Key Takeaways
- The global corporate default tally rose to 84 as of June 30, 2023, with 13 defaults in June.
- With 44 defaults in the second quarter, the quarterly tally reached its highest level since the fourth quarter of 2020.
- The increase in defaults was led by the U.S. region which alone accounted for 64% of total defaults in the quarter.
- Bankruptcies led defaults last month with five, compared to distressed exchanges with four.
S&P Global Ratings' 2023 global corporate default tally has reached to 84 after following 13 defaults in June:
- Australia based health care sector Genesis Care Pty Limited
- Atlanta-based coin-operated amusement machine operator Lucky Bucks LLC
- Virginia-based third-party provider of visas, passports, and immigration-related travel documentation KCIBT Holdings L.P..
- U.S.-based data center operator Cyxtera Technologies Inc..
- U.S. based ATM and point-of-sale terminal manufacturer, seller, and servicer Diebold Nixdorf Inc.
- U.S.-based competitive telecommunications and cloud provider U.S. TelePacific Holdings Corp.Canada based mining and processing iron ore mineral reserves Tacora Resources Inc.
- Brazil based cement producer and seller InterCement Brasil S.A..
- U.S. based home appliance Instant Brands Holdings Inc..
- U.S. based transport service provider URS Holdco Inc.
- U.S. based media and entertainment service provider Photo Holdings LLC
- U.S. based provide credit report services PGX Holdings Inc..
- And one confidential issuer.
With 44 defaults in the second quarter, the global default tally recorded its highest quarterly default tally since the fourth quarter of 2020, as defaults continue to rise. By region, nearly two-thirds of defaults in the second quarter were from the U.S., where credit conditions remain tight with benchmark rates unlikely to fall, continuing pricing pressures, and lenders becoming even more selective. In June alone, 77% of defaults were from U.S. based companies. Meanwhile in Europe, the number of defaults has been more stable in recent weeks with none in June and only six defaults this quarter, down from seven in the first quarter.
Moving forward, we expect there will be greater stress in the U.S., where 38% of speculative grade issuers have these low ratings, compared with 30% in Europe, and only 16% in the rest of the world. Considering current trends, we anticipate defaults will increase through early 2024--to 4.25% in the U.S. and 3.6% in Europe (see "Global Credit Conditions Q3 2023: Higher For Longer Will Fuel Ratings Divergence", June 27, 2023).
Chart 1
Chart 2
In the emerging markets region, defaults have been rising. All 11 emerging market defaults so far this year—six of which were in the second quarter--were in Latin America, versus only two Latin American defaults for the same period in 2022 (see chart 3). The region's extremely tight financing conditions are exacerbating companies' funding costs and heightening credit stress for entities that already had precarious liquidity positions. More defaults may come given persistently higher interest rates coupled with looming debt maturities in the region.
Chart 3
The media and entertainment sector continued to lead defaults in June with three followed by consumer products and telecom with two each. For the media and entertainment sector, year-to-date totals are almost five times greater than at this point in 2022. The combination of now-elevated rates and worsening secular or cyclical media trends is hurting cash flow generation of lower-rated companies, especially in the U.S. where many of these defaults are from. We expect this trend to broadly continue as media and entertainment and consumer products lead our weakest link tally.
Chart 4
Bankruptcies led defaults last month with five, compared with distressed exchanges with four. However, the number of distressed exchanges for the quarter remains elevated with 41% of total defaults--- slightly higher than the previous quarter.
Chart 5
Chart 6
Table 1
U.S. speculative-grade default rate is expected to climb to 3.2% in June | ||||||
---|---|---|---|---|---|---|
Region | 12-month trailing speculative-grade default rate (%) | Weakest links | ||||
U.S. | *3.24 | 209 | ||||
Emerging market | 2.4 | 40 | ||||
Europe | *3.06 | 52 | ||||
Other developed | 2.9 | 10 | ||||
Global | 2.8 | 311 | ||||
Note:* Trailing-12-month speculative grade default rates for from June 30, 2023- June 30, 2023 are preliminary and subject to change.Trailing-12-month speculative grade default rates for from May 31, 2023- May 31, 2023. Year-to-date data as of June 30, 2023. Weakest link data is as of May 31, 2023. Other developed region includes Australia, Canada, Japan, and New Zealand. Default counts may include confidentially-rated issuers. Sources: S&P Global Ratings Credit Research and S&P Global Market Intelligence’s CreditPro®. |
Table 2
Year-to-date global corporate default tally elevated to 84 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Date | Parent company | Country/Market | Subsector | To | From | Reason | ||||||||
1/3/2023 |
Moran Foods LLC (SAL Acquisition Corp.) |
U.S. | Retail/Restaurants | SD | CCC+ | Distressed exchange | ||||||||
1/16/2023 |
Americanas S.A. (Lojas Americanas S.A.) |
Brazil | Retail/Restaurants | D | B | Missed principal and interest payments | ||||||||
1/19/2023 |
Party City Holdings, Inc. (PC Nextco Holdings LLC) |
U.S. | Retail/Restaurants | D | CCC | Bankruptcy | ||||||||
1/20/2023 |
Mexarrend, S.A.P.I. de C.V. |
Mexico | Financial Institutions | D | CC | Missed principal and interest payments | ||||||||
1/24/2023 |
Serta Simmons Bedding LLC |
U.S. | Consumer Products | D | CCC- | Bankruptcy | ||||||||
1/27/2023 |
Bed Bath & Beyond Inc.(A) |
U.S. | Retail/Restaurants | D | CC | Missed principal and interest payments | ||||||||
1/30/2023 |
Cooper-Standard Holdings, Inc. |
U.S. | Automotive | SD | CC | Distressed exchange | ||||||||
1/31/2023 |
Missouri TopCo Ltd. |
U.K. | Consumer Products | SD | CCC- | Distressed exchange | ||||||||
1/31/2023 |
Invacare Corp. |
U.S. | Health care | D | NR | Bankruptcy | ||||||||
2/3/2023 |
Oi S.A. |
Brazil | Telecommunications | D | CCC- | Missed principal and interest payments | ||||||||
2/9/2023 |
KNB Holdings Corp. |
U.S. | Consumer Products | D | CCC- | Bankruptcy | ||||||||
2/10/2023 |
Yak Access, LLC |
U.S. | Capital goods | D | CCC | Distressed exchange | ||||||||
2/14/2023 |
K&N Parent Inc. |
U.S. | Automotive | D | CCC- | Distressed exchange | ||||||||
2/15/2023 |
99 cents only stores LLC |
U.S. | Retail/Restaurants | SD | CCC+ | Missed payments | ||||||||
2/15/2023 |
Avaya Holdings Corp. |
U.S. | High Technology | D | CC | Bankruptcy | ||||||||
2/15/2023 |
Diamond Sports Group LLC |
U.S. | Media and entertainment | D | CCC- | Missed interest payments | ||||||||
2/16/2023 | Confidential | Confidential | Media and entertainment | D | CC | Confidential | ||||||||
2/16/2023 |
Stanadyne Holdings, Inc. |
U.S. | Capital goods | D | NR | Bankruptcy | ||||||||
2/17/2023 |
AMC Entertainment Holdings Inc. |
U.S. | Media and entertainment | SD | CC | Distressed exchange | ||||||||
2/17/2023 |
Premier Brands Group Holdings LLC |
U.S. | Consumer Products | SD | CCC | Distressed exchange | ||||||||
2/22/2023 |
Altisource Portfolio Solutions S.A. |
Luxembourg | Financial Institutions | SD | CC | Distressed exchange | ||||||||
2/22/2023 |
Foodco Bondco SAU |
Spain | Retail/Restaurants | SD | CCC- | Missed interest payments | ||||||||
2/24/2023 |
Bausch Health Cos. Inc. |
Canada | Health care | SD | CCC+ | Distressed exchange | ||||||||
2/28/2023 |
Equinox Holdings Inc. |
U.S. | Media and entertainment | SD | CCC- | Distressed exchange | ||||||||
2/28/2023 |
Rising Tide Holdings, Inc. |
U.S. | Retail/Restaurants | SD | CC | Distressed exchange | ||||||||
3/1/2023 |
Akorn Operating Company LLC |
U.S. | Health Care | D | CCC+ | Bankruptcy | ||||||||
3/2/2023 |
Community Health Systems Inc. |
U.S. | Health Care | SD | B- | Distressed exchange | ||||||||
3/6/2023 |
LendingTree Inc. |
U.S. | Media and entertainment | SD | B- | Distressed exchange | ||||||||
3/10/2023 |
Loyalty Ventures Inc. |
U.S. | Media and entertainment | D | CCC+ | Bankruptcy | ||||||||
3/10/2023 |
Silicon Valley Bank |
U.S. | Financial institutions | D | BBB | Regulatory | ||||||||
3/14/2023 |
Bioplan USA Inc. |
U.S. | Media and entertainment | D | CCC | Out-Of-Court Restructuring | ||||||||
3/14/2023 |
Gol Linhas Aereas Inteligentes S.A. |
Brazil | Transportation | SD | CC | Distressed exchange | ||||||||
3/14/2023 |
Technicolor Creative Studios |
France | Media and entertainment | D | CCC- | Missed interest payments | ||||||||
3/16/2023 |
Mallinckrodt plc |
Ireland | Health Care | SD | B- | Distressed exchange | ||||||||
3/17/2023 |
National CineMedia Inc. |
U.S. | Media and entertainment | D | CCC- | Missed interest payments | ||||||||
3/17/2023 |
SVB Financial Group |
U.S. | Financial institutions | D | NR | Regulatory | ||||||||
3/20/2023 |
TV Azteca, S.A.B de C.V. |
Mexico | Media and entertainment | D | NR | Bankruptcy | ||||||||
3/23/2023 |
Flint HoldCo S.a r.l. |
Luxembourg | Chemicals, packaging, and environmental services | SD | CCC | Missed principal payments | ||||||||
3/31/2023 |
Toro Private Holdings I, Ltd |
U.K. | Transportation | SD | CCC+ | Distressed exchange | ||||||||
3/31/2023 |
Wahoo Fitness Acquisition LLC |
U.S. | Consumer products | D | CCC- | Missed principal and interest payments | ||||||||
4/5/2023 |
FQM (Akubra) Inc. |
Canada | Metals, mining, and steel | D | NR | Bankruptcy | ||||||||
4/6/2023 | Lannett Company Inc. | U.S. | Health Care | SD | CCC+ | Missed interest payments | ||||||||
4/6/2023 | Rodan & Fields, LLC | U.S. | Consumer products | D | CCC- | Out-Of-Court Restructuring | ||||||||
4/6/2023 | Covis Finco S.a r.l | Switzerland | Health Care | SD | CCC+ | Distressed exchange | ||||||||
4/6/2023 | Confidential | Confidential | Capital goods | D | CCC- | Confidential | ||||||||
4/10/2023 |
QualTek LLC |
U.S. | Capital goods | SD | CCC+ | Missed interest payments | ||||||||
4/10/2023 | Confidential | Confidential | Media and entertainment | D | CC | Confidential | ||||||||
4/12/2023 | Confidential | Confidential | Utlities | D | CCC- | Confidential | ||||||||
4/12/2023 | Guacolda Energia S.A | Chile | Utlities | D | CC | Distressed exchange | ||||||||
4/17/2023 | David's Bridal, LLC | U.S. | Consumer Products | D | NR | Bankruptcy | ||||||||
4/17/2023 | Adler Group S.A. (ADO Group Ltd.) | Luxembourg | Homebuilders/real estate companies | SD | CC | Distressed exchange | ||||||||
4/19/2023 |
Skillz Inc. |
U.S. | Media and entertainment | SD | CCC+ | Distressed exchange | ||||||||
4/24/2023 |
Bed Bath & Beyond Inc.(B) |
U.S. | Retail/Restaurants | D | CCC- | Bankruptcy | ||||||||
4/27/2023 |
Burger BossCo Intermediate, Inc. |
U.S. | Retail/Restaurants | D | CCC- | Missed principal and interest payments | ||||||||
4/27/2023 |
Grupo IDESA S.A. de C.V. |
Mexico | Chemicals, packaging, and environmental services | SD | CC | Distressed exchange | ||||||||
5/1/2023 |
FXI Holdings, Inc. |
U.S. | Chemicals, packaging, and environmental services | SD | CC | Distressed exchange | ||||||||
5/2/2023 | Confidential | Confidential | Consumer products | D | CCC- | Confidential | ||||||||
5/2/2023 |
WeWork Companies LLC |
U.S. | Media and entertainment | SD | CC | Distressed exchange | ||||||||
5/5/2023 |
Frigoglass SAIC |
Greece | Consumer products | SD | CC | Distressed exchange | ||||||||
5/8/2023 |
CatLuxe Sarl (CatLuxe Acquistion Sarl) |
Luxembourg | Consumer products | D | CC | Out-Of-Court Restructuring | ||||||||
5/10/2023 |
Range Parent Inc. |
U.S. | Capital goods | SD | CCC | Distressed exchange | ||||||||
5/15/2023 |
Telesat Canada (Telesat Holdings Inc.) |
Canada | Telecommunications | SD | CCC+ | Distressed exchange | ||||||||
5/16/2023 |
Envision Healthcare Corp. (Envision Healthcare Holdings Inc.) |
U.S. | Health Care | D | CCC | Bankruptcy | ||||||||
5/16/2023 |
Monitronics International Inc. |
U.S. | Media and entertainment | D | CCC | Bankruptcy | ||||||||
5/17/2023 |
At Home Group Inc. |
U.S. | Retail/Restaurants | SD | CCC+ | Distressed exchange | ||||||||
5/17/2023 |
CareerBuilder, LLC |
U.S. | Media and entertainment | SD | CCC | Distressed exchange | ||||||||
5/18/2023 |
Curo Group Holdings Corp. |
U.S. | Financial institutions | SD | B- | Distressed exchange | ||||||||
5/18/2023 |
Venator Materials PLC |
U.K. | Chemicals, packaging, and environmental services | D | CCC- | Bankruptcy | ||||||||
5/22/2023 |
LifeScan Global Corp. |
U.S. | Health Care | SD | CC | Distressed exchange | ||||||||
5/24/2023 | Confidential | Confidential | Media and entertainment | D | CCC | Confidential | ||||||||
5/29/2023 | Confidential | Confidential | Forest products and building materials | SD | CCC- | Confidential | ||||||||
6/1/2023 |
Genesis Care Pty Ltd. |
Australia | Health care | D | CCC- | Bankruptcy | ||||||||
6/1/2023 |
Lucky Bucks, LLC |
U.S. | Media and entertainment | D | CCC- | Missed principal and interest payments | ||||||||
6/2/2023 |
Diebold Nixdorf Inc. |
U.S. | High Technology | D | CC | Bankruptcy | ||||||||
6/4/2023 |
PGX Holdings Inc. |
U.S. | Media and entertainment | D | NR | Bankruptcy | ||||||||
6/5/2023 |
KCIBT Holdings LP |
U.S. | Consumer Products | SD | CCC | Distressed exchange | ||||||||
6/6/2023 |
Cyxtera Technologies, Inc. |
U.S. | Telecommunications | D | CCC- | Bankruptcy | ||||||||
6/7/2023 |
U.S. TelePacific Holdings Corp. |
U.S. | Telecommunications | SD | CCC- | Distressed exchange | ||||||||
6/12/2023 |
Tacora Resources Inc. |
Canada | Metals, mining, and steel | D | CCC- | Missed Interest Payments | ||||||||
6/12/2023 |
InterCement Brasil S.A. (InterCement Participacoes S.A.) |
Brazil | Forest products and building materials | SD | CC | Missed principal and interest payments | ||||||||
6/13/2023 |
Instant Brands Holdings Inc. |
U.S. | Consumer Products | D | CCC- | Bankruptcy | ||||||||
6/21/2023 |
Photo Holdings, LLC |
U.S. | Media and entertainment | SD | CC | Distressed exchange | ||||||||
6/23/2023 |
URS Holdco, Inc. |
U.S. | Transportation | SD | CCC+ | Distressed exchange | ||||||||
6/30/2023 | Confidential | Confidential | Aerospace and defense | D | CCC- | Confidential | ||||||||
Data as of June 30, 2023. NR--Not rated. SD--Selective default. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence's CreditPro® Copyright © 2018 by Standard & Poor’s Financial Services LLC. All rights reserved. |
We would like to thank our colleague Vaishali Singh at S&P Global/CRISIL for his assistance with this report.
Related Research
- URS Holdco Inc. Downgraded To ‘SD’ On Distressed Exchange; Ratings Subsequently Withdrawn, June 24, 2023
- Photo Holdings LLC Downgraded To 'SD' From 'CC' On Completion Of Subpar Debt Exchange, June 22, 2023
- Instant Brands Holdings Inc. Downgraded To ‘D’ On Chapter 11 Bankruptcy Filing, June 14, 2023
- InterCement Brasil S.A. Downgraded To ‘SD’ From ‘CC’ Following Standstill Agreement With Debenture Holders, June 13, 2023
- Tacora Resources Inc. Downgraded To ‘D’ From ‘CCC-‘ Following Missed Interest Payment, June 9, 2023
- U.S. TelePacific Holdings Corp. Downgraded To ‘SD’; Debt Rating Lowered To ‘D’, June 7, 2023
- Cyxtera Technologies Inc. Downgraded To ‘D’ From ‘CCC-‘ On Chapter 11 Bankruptcy Filing, June 7, 2023
- KCIBT Holdings L.P. Downgraded To ‘SD’ From ‘CCC’ On Completion Of Its Distressed Debt Amendments; Debt Ratings Lowered, June 5, 2023
- Diebold Nixdorf Inc. Ratings Lowered To ‘D’ On Bankruptcy Filing, June 3, 2023
- Genesis Care Pty Ltd. Downgraded To ‘D’ From ‘CCC-‘ Following U.S. Chapter 11 Bankruptcy Filing, June 1, 2023
- Lucky Bucks LLC Downgraded To 'D' From 'CCC-' On Missed Principal And Interest Payments, June 1, 2023
Default Studies
More analysis and statistics are available in our annual default studies, published on RatingsDirect:
Corporate (financial and nonfinancial)
- 2021 Annual Global Financial Services Default And Rating Transition Study
- 2022 Annual Global Corporate Default And Rating Transition Study
- 2021 Annual U.S. Corporate Default And Rating Transition Study
- 2022 Annual European Corporate Default And Rating Transition Study
- 2022 Annual Japanese Corporate And Public Finance Default And Rating Transition Study
- 2021 Annual Asia Corporate Default And Rating Transition Study
- 2022 Annual Taiwan Ratings Corp. Corporate Default And Rating Transition Study
- 2022 Annual Emerging And Frontier Markets Corporate Default And Rating Transition Study
- 2021 Annual Greater China Corporate Default And Rating Transition Study
Structured finance
- Annual Global Structured Finance Default And Rating Transition Study
- 2022 Annual Japanese Structured Finance Default And Rating Transition Study
- 2021 Annual European Structured Finance Default And Rating Transition Study
- 2022 Annual Taiwan Ratings Corp. Structured Finance Default And Rating Transition Study
- 2021 Annual Mexican Structured Finance Default And Rating Transition Study
- 2022 Annual Global Leveraged Loan CLO Default And Rating Transition Study
Public finance
- 2022 Annual U.S. Public Finance Default And Rating Transition Study
- 2022 Annual International Public Finance Default And Rating Transition Study
- 2021 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 Research & Insights: | 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, Pune; vaishali.singh2@spglobal.com |
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