Key Takeaways
- Global defaults in March slowed to eight, from 15 in February, but remain above the 10-year average across regions.
- Europe is the only region in which year-to-date defaults are above the 2023 year-to-date tally. Defaults in the region remain at their highest, year-to-date, since 2008.
- U.S.-based telecoms led defaults in March, with two. The sector now leads in terms of the volume of defaulted debt, at US$13 billion.
- Three quarters of defaults in March were from distressed exchanges as the number of re-defaults grows.
S&P Global Ratings' 2024 global corporate default tally has reached 37 after the following defaults in March:
- U.S. based consumer finance company Curo Group Holdings Corp.
- Norway-based cruise lines operator Hurtigruten Group AS
- U.S.-based fabrics and crafts retailer Joann Inc.
- U.S.-based telecommunications service provider Lumen Technologies Inc.
- Swedish real estate company Samhallsbyggnadsbolaget i Norden AB (publ)
- U.S.-based global provider of solutions for enterprise customers' contact center operations Atlas Midco Inc.
- U.S. -based telecommunications service provider Aventiv Technologies LLC
- France-based outsourced cleaning and facility management services company La Financiere Atalian SAS
European Defaults Remain High
The number of defaults dropped to eight in March, from 15 in February and 14 in January. Globally, corporate defaults are now at 37, three fewer than at this time last year but still well above the 10-year average of 27.
The slowdown in March came from the U.S., other developed regions, and the emerging markets--all of which are now below their previous year tallies. Europe is the only region in which year-to-date defaults are above the 2023 year-to-date tally--increasing to 11 from seven on a quarterly basis and having reached their highest year-to-date tally since 2008. The quarterly rise primarily reflects companies needing to restructure their debt obligations, with the media and entertainment and consumer product sectors accounting for about 36% of total European defaults. S&P Global Ratings expects the European trailing-12-month speculative-grade corporate default rate to go down to 3.5% by December 2024, the same as in December 2023, indicating a stabilization after an expected modest increase over the summer (see "European Speculative-Grade Default Rate To Stabilize At 3.5% By December 2024," Feb. 15, 2024).
Chart 1
The U.S. Reaches $33.2 Billion In Defaulted Debt In First-Quarter 2024
Although Europe has seen elevated defaults in first-quarter 2024, the amount of debt issuers have defaulted on remains low at US$1.5 billion compared to US$4.0 billion for the same period last year, a 63% decrease. This is likely due to the increase in distressed exchanges in the region, where the issuer has exchanged part of their capital structure to improve their liability structure or liquidity by offering creditors less than what was originally promised.
Most defaulted debt remains concentrated in the U.S. where it has reached US$33.2 billion in first-quarter 2024, up 53% from the same quarter in 2023. This has been primarily driven by telecommunication defaults, which have added US$12.8 billion to the volume of defaulted debt in March.
Chart 2
Chart 3
Telecoms Lead Defaults In March
In March, 25% of defaults came from the telecom sector, with two companies defaulting. For both, prolonged high interest rates have constrained their access to the capital markets, and weakened liquidity and credit ratios exposed their more leveraged capital structures. Meanwhile, consumer-sensitive sectors such as consumer products (six defaults) and media and entertainment (seven) suffered tepid consumer demand, followed by health care (five). Despite some easing, financing conditions remain challenging for companies with highly leveraged structures and weak operating metrics.
Chart 4
Distressed Exchanges Represent 75% Of March Defaults
Distressed exchanges continue to make up the lion's share of defaults in 2024, with 20, compared to 16 at this point in 2023. Europe is driving this trend with all three defaults in March stemming from distressed exchanges. For the U.S., 54% of total defaults have been from a distressed exchange (64% in Europe).
Distressed exchanges are increasing, as are issuers who are defaulting more than once. These increases have been partly driven by more entities becoming comfortable with higher levels of leverage in their capital structures. Many of these were set up during (and in anticipation of sustained) low interest rates. For more on this, see our recently published research “Credit FAQ: The Rise Of Repeat Defaulters”).
Chart 5
Chart 6
Table 1
We expect the U.S. and Europe default rates to remain elevated in the coming months | ||||||
---|---|---|---|---|---|---|
Region | 12-month trailing speculative-grade default rate (%) | Weakest links | ||||
U.S. | 4.8* | 213 | ||||
Emerging market | 1.849405548 | 23 | ||||
Europe | 4.11* | 48 | ||||
Other developed | 4.411764706 | 8 | ||||
Global | 3.922716628 | 292 | ||||
*Trailing 12-month speculative grade default rates for from March 31, 2023-March 31, 2024 are preliminary and subject to change. Trailing 12-month speculative grade default rates for from Feb. 28, 2023-Feb. 29, 2024. Year-to-date data as of March 31, 2024. Weakest link data is as of Feb. 29, 2024. 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 default tally at 37 in 2024 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Date | Parent company | Country/market | Subsector | To | From | Reason | ||||||||
Jan. 02, 2024 | Resolute Investment Managers Inc., | U.S. | Financial institutions | D | CC | Distressed exchange | ||||||||
Jan. 04, 2024 | Toro Private Holdings I, Ltd. | U.K. | Transportation | D | CC | Distressed exchange | ||||||||
Jan. 05, 2024 | AMT TopCo, LLC | U.S. | Health care | D | CCC | Missed Payments | ||||||||
Jan. 10, 2024 | Ignition Topco BV | Netherlands | Chemicals, packaging, and environmental services | D | CCC | Missed Payments | ||||||||
Jan. 11, 2024 | Amphora Intermediate II Ltd. | U.K. | Consumer products | SD | CCC+ | Missed Payments | ||||||||
Jan. 11, 2024 | Confidential | Confidential | Metals, mining, & steel | SD | CC | Confidential | ||||||||
Jan. 16, 2024 | Covis Finco S.a r.l | Switzerland | Health care | SD | CCC- | Distressed exchange | ||||||||
Jan. 17, 2024 | TMK Hawk Parent Corp., | U.S. | Consumer products | SD | CC | Distressed exchange | ||||||||
Jan. 18, 2024 | KNS Holdco LLC | U.S. | Consumer products | SD | B- | Distressed exchange | ||||||||
Jan. 19, 2024 | System1 Inc., | U.S. | Media & entertainment | SD | CCC | Distressed exchange | ||||||||
Jan. 24, 2024 | New Trojan Parent Inc., | U.S. | Consumer products | D | CCC- | Bankruptcy | ||||||||
Jan. 26, 2024 | Gol Linhas Aereas Inteligentes S.A. | Brazil | Transportation | D | CCC- | Bankruptcy | ||||||||
Jan. 31, 2024 | AMC Entertainment Holdings Inc. | U.S. | Media & entertainment | SD | CCC+ | Distressed exchange | ||||||||
Jan. 31, 2024 | Enjoy S.A. | Chile | Media & entertainment | D | CCC- | Bankruptcy | ||||||||
Feb. 05, 2024 | Cano Health Inc., | U.S. | Health Care | D | CCC- | Bankruptcy | ||||||||
Feb. 06, 2024 | Astro Intermediate Holding II Corp. | U.S. | Consumer Products | SD | CCC | Missed Payments | ||||||||
Feb. 08, 2024 | Pluto Acquisition I Inc., | U.S. | Health Care | SD | CC | Distressed exchange | ||||||||
Feb. 09, 2024 | Confidential | Confidential | Telecommunications | D | CC | Confidential | ||||||||
Feb. 14, 2024 | CLISA-Compania Latinoamericana de Infraestructura & Servicios S.A. | Argentina | Capital Goods | SD | CC | Distressed exchange | ||||||||
Feb. 14, 2024 | GoTo Group Inc., | U.S. | High Technology | SD | CCC+ | Distressed exchange | ||||||||
Feb. 15, 2024 | AFE S.A. SICAV-RAIF | U.K. | Financial Institutions | SD | CC | Distressed exchange | ||||||||
Feb. 16, 2024 | Enviva Inc. | U.S. | Utility | D | CCC- | Missed Payments | ||||||||
Feb. 16, 2024 | Range Parent Inc. | U.S. | Capital Goods | D | CCC- | Bankruptcy | ||||||||
Feb. 20, 2024 | Vue Entertainment International Ltd. | U.K. | Media & Entertainment | SD | CC | Distressed exchange | ||||||||
Feb. 21, 2024 | Hornblower HoldCo LLC, | U.S. | Media & Entertainment | D | CCC- | Bankruptcy | ||||||||
Feb. 21, 2024 | Tribe Buyer LLC | U.S. | Media & Entertainment | D | CCC- | Missed Payments | ||||||||
Feb. 23, 2024 | Avison Young (Canada) Inc. | Canada | Financial Institutions | SD | CCC | Missed Payments | ||||||||
Feb. 26, 2024 | Apex Tool Group LLC, | U.S. | Forest Products & Building Materials | SD | CCC+ | Distressed exchange | ||||||||
Feb. 26, 2024 | Radiology Partners Holdings LLC, | U.S. | Health Care | SD | CC | Distressed exchange | ||||||||
Mar. 05, 2024 | Curo Group Holdings Corp. | U.S. | Financial Institutions | SD | CCC- | Missed Payments | ||||||||
Mar. 18, 2024 | Hurtigruten Group AS | Norway | Media & Entertainment | SD | CC | Distressed exchange | ||||||||
Mar. 19, 2024 | JOANN Inc. | U.S. | Retail/Restaurants | D | CCC | Bankruptcy | ||||||||
Mar. 22, 2024 | Lumen Technologies Inc., | U.S. | Telecommunications | SD | CC | Distressed exchange | ||||||||
Mar. 27, 2024 | Samhallsbyggnadsbolaget i Norden AB (publ) | Sweden | Homebuilders/real estate companies | SD | CCC+ | Distressed exchange | ||||||||
Mar. 29, 2024 | Atlas Midco, Inc. | U.S. | High Technology | D | CCC+ | Distressed exchange | ||||||||
Mar. 29, 2024 | Aventiv Technologies, LLC | U.S. | Telecommunications | SD | CC | Distressed exchange | ||||||||
Mar. 29, 2024 | La Financiere Atalian SAS | France | Consumer Products | D | CC | Distressed exchange | ||||||||
Data as of March 31, 2024. NR--Not rated. SD--Selective default. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro® |
Related Research
- Credit FAQ: The Rise of Repeat Defaulters, April 11, 2024
- U.S. Speculative-Grade Corporate Default Rate To Hit 4.75% By December 2024 After Third-Quarter Peak, Feb. 15, 2024
- European Speculative-Grade Default Rate To Stabilize At 3.5% By December 2024, Feb. 16, 2024
- Curo Group Holdings Corp. Downgraded To 'D' On Chapter 11 Bankruptcy Filing; Ratings Withdrawn At Company's Request, Mar. 28, 2024
- Hurtigruten Group AS Downgraded To 'SD' On Completed Debt Restructuring; Issue Ratings Lowered To 'D', Mar. 18, 2024
- Joann Inc. Downgraded To 'D' From 'CCC' On Chapter 11 Bankruptcy Filing, Mar. 20, 2024
- Lumen Technologies Inc. Downgraded To 'SD' From 'CC', Mar. 23, 2024
- Swedish Real Estate Company SBB Downgraded To 'SD' After Accepting Below-Par Tender Offer, Mar. 27, 2024
- Atlas Midco Inc. Downgraded To 'D' From 'CCC+' On Distressed Exchange, Mar. 30, 2024
- Aventiv Technologies LLC Downgraded To 'SD' On Distressed Exchange; Issue-Level Ratings Lowered To 'D', Mar. 30, 2024
- Atalian Ratings Lowered To 'D' On Completion Of Debt Restructuring, Mar. 30, 2024
Default Studies
More analysis and statistics are available in our annual default studies, published on RatingsDirect:
Corporate (financial and nonfinancial)
- 2022 Annual Global Financial Services Default And Rating Transition Study
- 2023 Annual Global Corporate Default And Rating Transition Study
- 2022 Annual U.S. Corporate Default And Rating Transition Study
- 2022 United Kingdom Corporate Default And Rating Transition Study
- 2022 Annual European Corporate Default And Rating Transition Study
- 2023 Annual Japanese Corporate Default And Rating Transition Study
- 2022 Annual Asia Corporate Default And Rating Transition Study
- 2023 Annual Taiwan Ratings Corp. Corporate Default And Rating Transition Study
- 2022 Annual Emerging And Frontier Markets Corporate Default And Rating Transition Study
- 2022 Annual Greater China Corporate Default And Rating Transition Study
Structured finance
- 2023 Annual Global Structured Finance Default And Rating Transition Study
- 2022 Annual Japanese Structured Finance Default And Rating Transition Study
- 2022 Annual European Structured Finance Default And Rating Transition Study
- 2023 Annual Taiwan Ratings Corp. Structured Finance Default And Rating Transition Study
- 2022 Annual Mexican Structured Finance Default And Rating Transition Study
- 2022 Annual Global Leveraged Loan CLO Default And Rating Transition Study
Public finance
- 2023 Annual U.S. Public Finance Default And Rating Transition Study
- 2022 Annual International Public Finance Default And Rating Transition Study
- 2022 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: | Ekaterina Tolstova, Frankfurt +49 173 6591385; ekaterina.tolstova@spglobal.com |
Nicole Serino, New York + 1 (212) 438 1396; nicole.serino@spglobal.com | |
Research Contributor: | Vaishali Singh, CRISIL Global Analytical Center, an S&P affiliate, Mumbai |
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