Key Takeaways
- Defaults totaled 14 in May, bringing the global corporate default tally to 69 so far this year--well above its five-year average but below the tally of 71 at this time in 2023.
- Over one-third of defaults in May came from media entertainment. The sector leads defaults so far in 2024 as lower-rated issuers continue to struggle with changing consumer preferences, highly leveraged capital structures, and looming debt maturities.
- Year-to-date defaults in Europe remain at their highest levels since 2008--nearly 60% of which have been distressed exchanges.
- Although we expect the default rate in Europe to remain elevated, we expect it to level out around 3.75% as of March 2025.
S&P Global Ratings' 2024 global corporate default tally has reached 69 after 14 defaults in May (see table 2).
Although down from the previous month, defaults in May remained elevated, and the tally is five higher than its three-year monthly average (see chart 1). Defaults in May dropped across most regions, apart from Europe, which remains at its highest year-to-date default tally since 2008.
In Europe, persistently high market rates are making it more difficult for lower-rated issuers to service their debt. Although the European Central Bank started to cut rates by 25 basis points on June 6, persistently high inflation and still uncertain economic growth across the region's major economies are keeping defaults elevated. In addition, the rate-cutting cycle may be slower or include fewer cuts than we had anticipated at the start of this year.
Furthermore, an increase in the number of distressed exchanges in the region, over a quarter of which were from issuers with at least one previous default (re-defaulters), seems to be a key reason for the pickup in defaults in the region (see charts 2 and 3). This is likely due to a higher number of 'B-' and below rated issuers--given a larger number of negative rating actions since the onset of the COVID-19 pandemic--coupled with wider use of distressed exchanges by distressed issuers.
Although default rates will remain higher in the short to medium term, we expect the European trailing-12-month speculative-grade corporate default rate to level out around 3.75% by March 2025, only slightly below the 4.1% default rate for the 12 months ended April 2024 (see chart 4) (see "The European Speculative-Grade Default Rate Should Level Out At 3.75% By March 2025," May 22, 2024).
Chart 1
Chart 2
Chart 3
Chart 4
Media And Entertainment Led Defaults In May
The media and entertainment sector led defaults in May with five, increasing its year-to-date total by 50% (see chart 5). Defaults were spread across a variety of subsectors, including media, gaming, and leisure as capital market conditions remain challenging for many lower-rated issuers. Most media and entertainment defaults in May were distressed exchanges.
Although the sector leads defaults so far in 2024, the total is one lower than at this point in 2023.
Meanwhile, high technology leads with the greatest increase in defaults from the previous year, with five defaults so far in 2024, compared with only one at this point in 2023 (see chart 6). All five defaults in the sector this year have been U.S.-based issuers rated 'CCC+' and below.
Chart 5
Chart 6
Table 1
The U.S. default rate is expected to fall in May | ||||||
---|---|---|---|---|---|---|
Region | 12-month-trailing speculative-grade default rate (%) | Weakest links (count) | ||||
U.S. | 4.66* | 199 | ||||
Emerging markets | 2.0 | 13 | ||||
Europe | 4.30* | 52 | ||||
Other developed | 5.8 | 10 | ||||
Global | 4.1 | 274 | ||||
Note: Trailing-12-month speculative-grade default rates are from April 30, 2023, to April 30, 2024. *Trailing-12-month speculative-grade default rates are from May 31, 2023, to May 31, 2024, and are preliminary and subject to change. Year-to-date data as of May 31, 2024. Weakest link data is as of April 30, 2024. Other developed regions include 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
2024 global corporate default tally reaches 69 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Date | Parent company | Country/market | Subsector | To | From | Reason | ||||||||
Jan. 2, 2024 |
Resolute Investment Managers Inc. |
U.S. | Financial institutions | D | CC | Distressed exchange | ||||||||
Jan. 4, 2024 |
Toro Private Holdings I Ltd. |
U.K. | Transportation | D | CC | Distressed exchange | ||||||||
Jan. 5, 2024 |
AMT TopCo LLC |
U.S. | Health care | D | CCC | Missed payments | ||||||||
Jan. 10, 2024 |
Ignition Topco B.V. |
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, and 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 and 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 and entertainment | SD | CCC+ | Distressed exchange | ||||||||
Jan. 31, 2024 |
Enjoy S.A. |
Chile | Media and entertainment | D | CCC- | Bankruptcy | ||||||||
Feb. 5, 2024 |
Cano Health Inc. |
U.S. | Health care | D | CCC- | Bankruptcy | ||||||||
Feb. 6, 2024 |
Astro Intermediate Holding II Corp. |
U.S. | Consumer products | SD | CCC | Missed payments | ||||||||
Feb. 8, 2024 |
Pluto Acquisition I Inc. |
U.S. | Health care | SD | CC | Distressed exchange | ||||||||
Feb. 9, 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 and entertainment | SD | CC | Distressed exchange | ||||||||
Feb. 21, 2024 |
Hornblower HoldCo LLC |
U.S. | Media and entertainment | D | CCC- | Bankruptcy | ||||||||
Feb. 21, 2024 |
Tribe Buyer LLC |
U.S. | Media and 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 and building materials | SD | CCC+ | Distressed exchange | ||||||||
Feb. 26, 2024 |
Radiology Partners Holdings LLC |
U.S. | Health care | SD | CC | Distressed exchange | ||||||||
Mar. 5, 2024 |
Curo Group Holdings Corp. |
U.S. | Financial institutions | SD | CCC- | Missed payments | ||||||||
Mar. 18, 2024 |
Hurtigruten Group AS |
Norway | Media and 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 | ||||||||
Apr. 1, 2024 |
Wom S.A. |
Chile | Telecommunications | D | CCC | Bankruptcy | ||||||||
Apr. 3, 2024 |
Rackspace Technology Global Inc. |
U.S. | High technology | SD | CCC- | Distressed exchange | ||||||||
Apr. 4, 2024 |
Never Slip Topco Inc. |
U.S. | Consumer products | D | CCC- | Bankruptcy | ||||||||
Apr. 5, 2024 |
Arvos LuxCo S.a.r.l. |
Luxembourg | Capital goods | D | CC | Distressed exchange | ||||||||
Apr. 5, 2024 |
Baffinland Iron Mines Corp. |
Canada | Metals, mining, and steel | SD | CCC | Distressed exchange | ||||||||
Apr. 5, 2024 |
Casa Systems Inc. |
U.S. | High technology | D | CCC+ | Bankruptcy | ||||||||
Apr. 5, 2024 |
ConvergeOne Holdings Inc. |
U.S. | Media and entertainment | D | CCC+ | Bankruptcy | ||||||||
Apr. 8, 2024 |
Loparex Midco B.V. |
Netherlands | Forest products and building materials | SD | CCC+ | Distressed exchange | ||||||||
Apr. 9, 2024 | Confidential | Confidential | Media and entertainment | D | CCC- | Confidential | ||||||||
Apr. 10, 2024 |
99 cents only stores LLC |
U.S. | Retail/restaurants | D | CCC | Bankruptcy | ||||||||
Apr. 22, 2024 |
Express Inc. |
U.S. | Consumer products | D | NR | Bankruptcy | ||||||||
Apr. 23, 2024 |
City Brewing Company LLC (Blue Ribbon Holdings LLC) |
U.S. | Consumer products | SD | CCC | Distressed exchange | ||||||||
Apr. 24, 2024 |
EyeCare Partners LLC |
U.S. | Health care | SD | CCC | Distressed exchange | ||||||||
Apr. 25, 2024 | Confidential | Confidential | Homebuilders/real estate companies | SD | CCC+ | Confidential | ||||||||
Apr. 29, 2024 |
Digital Media Solutions Inc. |
U.S. | Media and entertainment | SD | CCC | Distressed exchange | ||||||||
Apr. 29, 2024 |
Keter Group B.V. |
Netherlands | Consumer products | SD | CC | Distressed exchange | ||||||||
Apr. 29, 2024 |
Xplore Inc. |
Canada | Telecommunications | D | CCC- | Missed payments | ||||||||
Apr. 29, 2024 | Confidential | Confidential | Retail/restaurants | SD | CCC+ | Confidential | ||||||||
May 6, 2024 |
Cumulus Media Inc. |
U.S. | Media and entertainment | SD | CC | Distressed exchange | ||||||||
May 6, 2024 |
Steward Health Care System LLC |
U.S. | Health care | D | NR | Bankruptcy | ||||||||
May 10, 2024 |
Farfetch Ltd. |
U.K. | Retail/restaurants | D | CC | Missed payments | ||||||||
May 16, 2024 |
Credivalores - Crediservicios SAS |
Colombia | Financial institutions | D | NR | Bankruptcy | ||||||||
May 17, 2024 |
Petrofac Ltd. |
Jersey | Oil and gas | SD | CCC- | Missed payments | ||||||||
May 20, 2024 |
Global Medical Response Inc. (Air Medical Holdings LLC) |
U.S. | Health care | SD | CC | Distressed exchange | ||||||||
May 21, 2024 |
Compact Bidco B.V. |
Netherlands | Forest products and building materials | SD | CCC- | Missed payments | ||||||||
May 21, 2024 |
Zachry Holdings Inc. |
U.S. | Capital goods | D | NR | Bankruptcy | ||||||||
May 22, 2024 | Confidential | Confidential | Retail/restaurants | D | CCC | Confidential | ||||||||
May 22, 2024 |
New Insight Holdings Inc. |
U.S. | Media and entertainment | D | NR | Bankruptcy | ||||||||
May 23, 2024 |
Astra Acquisition Corp. |
U.S. | High technology | SD | CCC | Distressed exchange | ||||||||
May 28, 2024 |
Safari Beteiligungs Gmbh |
Germany | Media and entertainment | D | CCC+ | Distressed exchange | ||||||||
May 28, 2024 |
Maverick Gaming LLC |
U.S. | Media and entertainment | D | CCC | Distressed exchange | ||||||||
May 30, 2024 |
AMC Entertainment Holdings Inc. |
U.S. | Media and entertainment | SD | CCC+ | Distressed exchange | ||||||||
Data as of May 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
- AMC Entertainment Holdings Inc. Downgraded To 'SD' From 'CCC+' Following Debt Exchange, May 30, 2024
- Safari Beteiligungs GmbH Ratings Lowered To ‘D’ From ‘CCC+’ On Amend And Extend Transaction, May 28, 2024
- Maverick Gaming LLC Downgraded To ‘D’ From ‘CCC’ On Following Completion Of Distressed Debt Exchange, May 28, 2024
- Astra Acquisition Corp. Downgraded To ‘SD’ From ‘CCC’ Following Distressed Debt Exchange, May 24, 2024
- The European Speculative-Grade Default Rate Should Level Out At 3.75% By March 2025, May 22, 2024
- Compact Bidco B.V. (Consolis) Ratings Lowered To ‘SD’ From ‘CCC-‘ On Missed Coupon Payment And Debt Restructuring, May 21, 2024
- Global Medical Response Inc. Downgraded To ‘SD’ From ‘CC’ On Distressed Debt Exchange, May 21, 2024
- Petrofac Ltd. Downgraded To ‘SD’ On Missed Coupon Payment, May 17, 2024
- Resilient Growth, Resilient Yields, And Resilient Defaults To Bring The U.S. Speculative-Grade Corporate Default Rate To 4.5% By March 2025, May 16, 2024
- Resilient Growth, Resilient Yields, And Resilient Defaults To Bring The U.S. Speculative-Grade Corporate Default Rate To 4.5% By March 2025, May 16, 2024
- Farfetch Ltd. Downgraded To ‘D’; All Ratings Withdrawn, May 10, 2024
- Cumulus Media Inc. Downgraded To ‘SD’ From ‘CC’ Following Completion Of Distressed Debt Restructuring, May 6, 2024
- Credit FAQ: The Rise Of Repeat Defaulters, April 11, 2024
Default Studies
More analysis and statistics are available in our annual default studies, published on RatingsDirect:
Corporate (financial and nonfinancial)
- 2023 Annual Global Corporate Default And Rating Transition Study
- 2023 Annual U.S. Corporate Default And Rating Transition Study
- 2023 Annual Japanese Corporate And Public Finance Default And Rating Transition Study
- 2023 Annual Taiwan Ratings Corp. Corporate Default And Rating Transition Study
- 2023 Annual Emerging And Frontier Markets Corporate Default And Rating Transition Study
- 2023 Annual Asia Corporate Default And Rating Transition Study
- 2023 Annual Greater China Corporate Default And Rating Transition Study
- 2022 Annual European Corporate Default And Rating Transition Study
- 2022 Annual Global Financial Services Default And Rating Transition Study
- 2022 United Kingdom Corporate Default And Rating Transition Study
Structured finance
- 2023 Annual Global Structured Finance Default And Rating Transition Study
- 2023 Annual Taiwan Structured Finance Default And Rating Transition Study
- 2023 Annual Japanese Structured Finance Default And Rating Transition Study
- 2022 Annual European 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
This report does not constitute a rating action.
Credit Research & Insights: | Nicole Serino, New York + 1 (212) 438 1396; nicole.serino@spglobal.com |
Ekaterina Tolstova, Frankfurt +49 173 6591385; ekaterina.tolstova@spglobal.com | |
Research Contributor: | Vaishali Singh, CRISIL Global Analytical Center, an S&P affiliate, Mumbai |
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