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Default, Transition, and Recovery: Distressed Exchanges Drive 2023 Global Corporate Defaults To 118

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Default, Transition, and Recovery: Distressed Exchanges Drive 2023 Global Corporate Defaults To 118

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S&P Global Ratings' 2023 global corporate default tally has reached 118 following 11 defaults in September:

  • U.S. based online used-car retailer Carvana Co..
  • U.S. based intermediate chemicals producer Cornerstone Chemical Co.
  • U.S. based college sports marketer Learfield Communications LLC
  • Luxembourg based (Belgium headquartered) bathroom product manufacturer and distributor Ideal Standard International S.A.
  • Florida-based marine aftermarket retailer Rising Tide Holdings Inc.
  • U.S. based custom wheel producer Wheel Pros Inc.
  • Cayman Island based (China incorporated) residential and commercial property developer Sunac China Holdings Ltd.
  • Spain based real estate company Haya Holdco 2 PLC
  • And three confidential issuers.

Defaults in September reached 11, a 31% decrease from the previous month. Although down month over month, both U.S. and European defaults have increased by 185% and 91%, respectively, from 2022 totals. Persistent core inflation, a drawn-out period of high rates, and slower growth is expected to continue to drag on lower-rated corporate issuers. S&P Global Ratings expects the European trailing-12-month speculative-grade corporate default rate to rise to 3.75% by June 2024, from 3.3% as of August 2023 (see "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 3.7% as of August 2023 ( see "The U.S. Speculative-Grade Corporate Default Rate Could Rise To 4.5% By June 2024", Aug. 17, 2023).

With an additional two defaults this month, the year-to-date European default tally is the second highest since 2008 (see chart 2). We should expect defaults in Europe to continue, given the elevated number of weakest links--issuers rated 'B-' and below, with either a negative outlook or CreditWatch placement compared with their long-term averages (both five-year and 10 year). Many of the weakest issuers come from consumer facing sectors likes consumer products and media and entertainment. Both sectors rely on resilient consumer spending--which is under pressure due to inflation and high interest rates--and will likely contribute to the future increase in European defaults (see "Credit Conditions Europe Q4 2023", Sept. 26, 2023).

Chart 1

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Chart 2

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Distressed Exchanges Continue To Drive Defaults

In September, 55% of the defaults were a result of distressed exchanges. With six additions, the total count of distressed exchanges increased to 52, its highest year-to-date tally since 2009 (see chart 3). These types of defaults are continuing to appeal to some distressed issuers that view out-of-court restructuring more favorably than other options like traditional bankruptcy. Asset value preservation as a going concern, in addition to both time and money saved, are big incentives for lenders and issuers to opt to restructure out of bankruptcy court.

Chart 3

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Increasing Default Trends From Capital Goods Sector

While media and entertainment and consumer products still lead year to date, capital goods and autos led defaults in September, with two each. Capital goods have had eight defaults so far in 2023, up from only two defaults in full year 2022, as lower rated issuers in the capital goods sector are dealing with higher financing costs and rely on stronger earnings and cash flow in 2023 to refinance 2024 and 2025 maturities (see "Industry Top Trends: Capital Goods", July 18, 2023).

In the autos sector, all four defaults this year have been distressed exchanges from the U.S. However, the U.S. speculative grade negative bias for the autos sector is currently sitting at 25%-- lower than its negative bias at the begginning of 2023, as well as its five-year average at 26.3% and 31.8%, respectively.

Chart 4

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Chart 5

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Table 1

Global corporate default summary--U.S. estimated default rate elevated
Region 12-month trailing speculative-grade default rate (%) Weakest links
U.S. *4.07 228
Emerging market 1.8 30
Europe *3.09 54
Other developed 3.6 10
Global 3.2 322
Note: *Trailing-12-month speculative grade default rates for from Sep. 30, 2023- Sep. 30, 2023 are preliminary and subject to change. Trailing-12-month speculative grade default rates for from Aug. 31, 2023- Aug. 31, 2023. Year-to-date data as of Sep. 30, 2023. Weakest link data is as of Aug. 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

Global corporate defaults, So far in 2023
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 (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
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 (B)

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
9/1/2023

Carvana Co.

U.S. Automotive D CC Distressed exchange
9/7/2023

Cornerstone Chemical Co.

U.S. Chemicals, packaging, and environmental services D CC Missed Interest Payments
9/11/2023

Haya Holdco 2 PLC

Spain Consumer Products D CC Distressed exchange
9/13/2023

Learfield Communications, LLC

U.S. Media and entertainment SD CCC- Distressed exchange
9/15/2023 Confidential Confidential Transportation SD CC Confidential
9/19/2023

Sunac China Holdings Ltd.

Cayman Island Homebuilders/real estate companies D NR Bankruptcy
9/21/2023

Ideal Standard International S.A.

Luxembourg Forest products and building materials D CC Distressed exchange
9/21/2023 Confidential Confidential Capital goods SD CCC+ Confidential
9/21/2023

Rising Tide Holdings, Inc.

U.S. Retail/Restaurants SD CCC Distressed exchange
9/21/2023

Wheel Pros, Inc.

U.S. Automotive SD CCC Distressed exchange
9/25/2023 Confidential Confidential Capital goods SD CC Confidential
Data as of Sep. 30, 2023. NR--Not rated. SD--Selective default. Sources: S&P Global Ratings Credit Research & Insights 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 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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