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Default, Transition, and Recovery: Corporate Defaults Record Highest August Total Since 2009

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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

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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

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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

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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

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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.

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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)
Structured finance
Public finance
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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