Key Takeaways
- The global corporate default tally jumped to 107 as of Aug. 31, 2023, with 16 defaults in August, the highest August monthly tally since 2009.
- Media and entertainment defaults, so far in 2023, are six times higher than at this point in 2022.
- Latin America is the pressure point within emerging markets accounting for 13 of the 14 defaults year to date.
- We expect the U.S. and European 12-month trailing speculative-grade default rates to continue to rise from current levels, to 4.5% and 3.75% respectively, by June 2024.
S&P Global Ratings' 2023 global corporate default tally has reached 107 following 16 defaults in August:
- Luxembourg based European fashion retailer Takko Fashion S.a.r.l.
- U.S. based transportation service provider Yellow Corp..
- U.S. based multi cloud service managing Rackspace Technology Global Inc.
- U.S. based financial services provider CNG Holdings Inc..
- Chile based coal-fired thermoelectric generation facility provider Guacolda Energia S.A..
- U.S. based niche glass and plastic recycling company Strategic Materials Holding Corp.U.S. based fishing equipment manufacturer Pure Fishing's Inc.
- U.S. based data center operator Dawn Acquisitions LLC
- U.S. based regional casino and cardroom operator Maverick Gaming LLC
- U.S. based DMS provides technology-enabled Digital Media Solutions Inc.
- France based food retailer, Casino Guichard - Perrachon S.A.
- U.S. based cargo aircraft owner and operator Western Global Airlines Inc.
- And four confidential issuers.
Historically, default counts tend to slow in the summer, specifically in August where the 10-year monthly average is 8.6 defaults, compared with an overall monthly 10-year average of 9.8 defaults. However, with 16 defaults, this August's tally was the highest August monthly tally since 2009 during the Global Financial Crisis.
Chart 1
An increase in distressed exchanges drove defaults in August, representing 50% of the monthly tally. Distressed exchanges have been increasing in 2023 and account for 43% of total defaults. These types of defaults are continuing to appeal to distressed issuers that view out-of-court restructuring more favorably than other options like traditional bankruptcy.
Chart 2
Most Defaults In August Were From The U.S. Or Europe
Regionally, both the U.S. and Europe had notable month-over-month increases in defaults, bringing both regions' year-to-date totals well above 2022 year-to-date levels. In Europe, monthly defaults in August reached their highest levels since October 2020 (see chart 3), as the European default tally approaches close to three times 2022 levels.
S&P global ratings expects the European trailing-12-month speculative-grade corporate default rate to rise 3.75% by June 2024, from 3.1% as of July 2023 ("The European Speculative-Grade Corporate Default Rate Could Rise To 3.75% By June 2024", Aug. 18, 2023 ) and the U.S. trailing-12-month speculative-grade corporate default rate to rise 4.5% by June 2024, from 3.5% as of July 2023 (see "The U.S. Speculative-Grade Corporate Default Rate Could Rise To 4.5% By June 2024", Aug. 17, 2023).
Chart 3
Latin America Region Is Showing Heightened Default Risk
While the number of defaults in emerging markets continues to lag, there has been an increase in defaults from Latin American–based issuers, accounting for 13 of the 14 defaults across emerging markets this year so far. Higher-for-longer interest rates are making it difficult for companies with unsustainable capital structures to meet their refinancing needs. We expect the effect on Latin America will be more significant than on other emerging markets, particularly for issuers rated 'CCC+' and below (see "Risky Credits: Refinancing Struggles Keep Emerging Markets On Their Toes", July 26, 2023).
By sector, Latin American-based utility companies lead defaults, so far in 2023, with nearly a quarter of all emerging market defaults. This is in contrast with early 2022 when 40% of all emerging market defaults were China-based homebuilder and real estate issuers. Although rating actions have been limited, we are seeing signs of added stress in China's property market.
Chart 4
Defaults From The Media And Entertainment Sector Are Six Times Higher Than At This point In 2022
By sector, media and entertainment alone accounted for one-third of defaults in the U.S. region and 25% of the total defaults in August. The sectors total of 24 is six times times higher than previous year-to-date default. Defaults in consumer products have led defaults in the European region and are 50% higher than the previous year.
Table 1
U.S. and Europe default rates are estimated to tick up further in August | ||||||
---|---|---|---|---|---|---|
Region | 12-Month Trailing speculative-grade default rate (%) | Weakest links | ||||
U.S. | *3.7 | 211 | ||||
Emerging market | 2.07 | 40 | ||||
Europe | *3.4 | 52 | ||||
Other developed | 3.55 | 9 | ||||
Global | 3.07 | 312 | ||||
Note:* Trailing-12-month speculative grade default rates for from Aug. 31, 2023- Aug. 31, 2023 are preliminary and subject to change.Trailing-12-month speculative grade default rates for from July 31, 2023- July 31, 2023. Year-to-date data as of Aug. 31, 2023. Weakest link data is as of July 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 rises to 107 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Date | Parent company | Country/Market | Subsector | To | From | Reason | ||||||||
1/3/2023 |
Moran Foods LLC |
U.S. | Retail/restaurants | SD | CCC+ | Distressed exchange | ||||||||
1/16/2023 |
Americanas S.A. |
Brazil | Retail/restaurants | D | B | Missed principal and interest payments | ||||||||
1/19/2023 |
Party City Holdings Inc. |
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. |
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 Co. 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. 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 Co. 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 Inc. |
U.S. | Consumer Products | D | NR | Bankruptcy | ||||||||
4/17/2023 |
Adler Group S.A. |
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. |
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 Cos. 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 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 |
Canada | Telecommunications | SD | CCC+ | Distressed exchange | ||||||||
5/16/2023 |
Envision Healthcare Corp. |
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 L.P. |
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. |
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 | ||||||||
7/14/2023 |
Azul S.A. |
Brazil | Transportation | SD | CC | Distressed exchange | ||||||||
7/14/2023 |
NSA International LLC |
U.S. | Consumer products | D | CCC- | Distressed exchange | ||||||||
7/18/2023 |
MVK Intermediate Holdings LLC |
U.S. | Consumer products | SD | CCC- | Missed Interest Payments | ||||||||
7/18/2023 |
Mallinckrodt plc |
Ireland | Health care | SD | CCC | Missed Interest Payments | ||||||||
7/20/2023 |
Anchor Glass Container Corp. |
U.S. | Chemicals, packaging, and environmental services | SD | CCC | Missed Interest Payments | ||||||||
7/21/2023 |
Exela Technologies Inc. |
U.S. | Media and entertainment | SD | CC | Distressed exchange | ||||||||
7/28/2023 |
U.S. Renal Care Inc. |
U.S. | Health care | D | CCC+ | Distressed exchange | ||||||||
8/1/2023 | Confidential | Confidential | Homebuilders/real estate companies | SD | CCC- | Confidential | ||||||||
8/1/2023 | Confidential | Confidential | Capital goods | D | CCC | Confidential | ||||||||
8/4/2023 | Confidential | Confidential | Media and entertainment | SD | CC | Confidential | ||||||||
8/7/2023 |
Western Global Airlines Inc. |
U.S. | Transportation | D | NR | Bankruptcy | ||||||||
8/8/2023 |
Takko Fashion S.a.r.l. |
Luxembourg | Consumer products | D | CC | Distressed exchange | ||||||||
8/8/2023 |
Yellow Corp. |
U.S. | Transportation | D | CC | Bankruptcy | ||||||||
8/9/2023 | Confidential | Confidential | Homebuilders/real estate companies | SD | CCC | Confidential | ||||||||
8/10/2023 |
Rackspace Technology Global Inc. |
U.S. | High technology | SD | CCC+ | Distressed exchange | ||||||||
8/16/2023 |
CNG Holdings Inc. |
U.S. | Financial institutions | SD | CC | Distressed exchange | ||||||||
8/16/2023 |
Guacolda Energia S.A. |
Chile | Utlities | D | CC | Distressed exchange | ||||||||
8/16/2023 |
Strategic Materials Holding Corp. |
U.S. | Chemicals, packaging, and environmental services | D | CC | Missed principal and interest payments | ||||||||
8/21/2023 |
Pure Fishing Inc. |
U.S. | Media and entertainment | SD | CCC | Distressed exchange | ||||||||
8/22/2023 |
Dawn Acquisitions LLC |
U.S. | Telecommunications | SD | CCC | Distressed exchange | ||||||||
8/25/2023 |
Maverick Gaming LLC |
U.S. | Media and entertainment | SD | B- | Distressed exchange | ||||||||
8/28/2023 |
Digital Media Solutions Inc. |
U.S. | Media and entertainment | SD | CCC+ | Distressed exchange | ||||||||
8/31/2023 |
Casino Guichard - Perrachon S.A. |
France | Retail/restaurants | D | CC | Missed interest payments | ||||||||
Data as of Aug. 31, 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. |
Related Research
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
- 2022 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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