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Corporate Defaults Take A Pause

Apr. 25 2019 — After an uptick in defaults over the past several weeks, this year's global corporate default tally has taken a pause, remaining at 40 this week. However, it still exceeds the 32 defaults reported at this point in 2018.

  • The retail and restaurants sector and oil and gas lead the default tally with seven and six defaults, respectively, and combined, they account for nearly one-third of total defaults. Both sectors led the 2018 default tally as well, together accounting for 42% of the tally.
  • So far in 2019, metals, mining, and steel; telecommunications; and high technology defaults have risen past their year-end 2018 totals (see chart 1).
  • The global speculative-grade default rate has widened marginally, to 1.98% as of March 31, 2019, from 1.95% in February 2019, but it remains below the default rate of 2.64% at this point in 2018. The U.S. default rate tightened, while default rates increased in Europe, emerging markets, and the other developed region (Australia, Canada, Japan, and New Zealand) (see chart 3).

The U.S. 12-month trailing speculative-grade default rate estimate fell to 2.1% in March, while Europe's estimate rose to 2%.
Region Trailing-12-month speculative-grade default rate (%) 2019 year-to-date tally* 2018 year-to-date tally* Full-year 2018 tally Weakest links tally§
U.S. 2.14 29 23 47 147
Emerging markets 1.59 5 4 17 27
Europe 2.01 4 2 13 23
Other developed 2.03 2 3 5 7
Global 1.98 40 32 82 204
Note: Trailing-12-month default rates from March 31, 2018-March 31, 2019, are preliminary and subject to change. The other developed region consists of Australia, Canada, Japan, and New Zealand. Default counts may include confidentially rated issuers. *Year-to-date data as of April 24, 2019. §Weakest link data as of March 18, 2019. Sources: S&P Global Fixed Income Research and S&P Global Market Intelligence's CreditPro®.