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Default, Transition, and Recovery: IPC Corp. Defaults, Pushing This Year's Corporate Default Tally To 101

The 2019 global corporate default tally reached 101 this week after the default of New Jersey-based global trading communication systems, compliance solutions, and network services provider IPC Corp., which executed an amendment with its second-lien lenders (see "IPC Corp. Downgraded To 'SD' Following Second-Lien Term Loan Amendment," Nov. 14, 2019). With the default of IPC, the telecommunications sector accounts for eight defaults this year, its highest total since 2013. The telecom sector has already had more defaults in 2019 than it had in all of 2017 and 2018 together (see chart 1).

Rating trends in the telecom sector across North America, Asia, and Latin America turned more negative over the past 12 months. S&P Global Ratings expects the global telecom industry to experience more modest revenue growth and improvements in profitability and leverage moving into 2020 (see "Industry Top Trends 2020: Telecommunications," Nov. 21, 2019).

Chart 1

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This Week's Observations

  • The telecommunications default rate surpassed the global 12-month trailing default rate this year, reaching a 28-month high of 3.38% in September and remaining elevated at 3.36% as of Oct. 31 (see chart 2).
  • By region, defaults in the sector are split evenly between the U.S. and emerging markets, and 86% of telecom defaults were from telecom service providers.
  • The 12-month speculative-grade default rates in both the U.S. and Europe increased in October, to 3.0% and 2.2%, respectively (see table 1).
  • The U.S. 12-month trailing speculative-grade default rate is expected to increase to 3.9% by September 2020.

Chart 2

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Chart 3

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Chart 4

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Table 1

The U.S. And European Default Rates Increased To 3.0% And 2.2% In October
Global corporate default summary
Region 12-month trailing speculative-grade default rate (%) 2019 year-to-date default tally 2018 year-to-date default tally 2018 default tally Weakest links tally
U.S. 3.0 71 43 47 177
Emerging markets 1.3 15 16 17 47
Europe 2.2 12 10 13 36
Other developed 1.3 3 5 5 3
Global 2.3 101 74 82 263
Note: Trailing-12-month default rates from Oct. 31, 2018-Oct. 31, 2019, are preliminary and subject to change. Other developed region consists of Australia, Canada, Japan, and New Zealand. Default counts may include confidentially rated issuers. Year-to-date data as of Nov. 20, 2019. Weakest link data as of Sept. 23, 2019. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®.

Table 2

IPC Corp.'s Distressed Exchange Takes This Year's Global Corporate Default Tally To 101
Global corporate defaults in 2019
Date Parent company Country Subsector To From Reason
1/2/2019

Ultra Petroleum Corp.

U.S. Oil and gas SD CC Distressed exchange
1/8/2019 Confidential Confidential Telecommunications D CCC Confidential
1/15/2019

API Heat Transfer Co.

U.S. Capital goods SD CCC- Distressed exchange
1/16/2019 Shopko Stores Inc. U.S. Retail/restaurants D NR Chapter 11
1/16/2019 Pacific Gas & Electric Co. (PG&E Corp.) U.S. Utilities D CC Missed interest payments
1/18/2019

Ditech Holding Corp.

U.S. Finance companies SD CCC Missed interest payments
1/29/2019

PG&E Corp.

U.S. Utilities D CC Chapter 11
1/30/2019

Eletson Holdings Inc.

Liberia Transportation SD CCC Missed interest payments
1/31/2019 New Look Retail Group Ltd. U.K. Retail/restaurants SD CC Distressed exchange
2/1/2019 Tsesnabank Kazakhstan Bank SD B- Distressed exchange/out-of-court restructuring
2/4/2019 Confidential Confidential Homebuilders/real estate companies D CCC- Confidential
2/4/2019 Charlotte Russe Inc. U.S. Retail/restaurants D CCC- Chapter 11
2/6/2019 TRM Holdings Corp. U.S. Retail/restaurants D NR Chapter 11
2/7/2019 Fuse Media Inc. U.S. Media and entertainment D CC Missed interest payments
2/7/2019

Hornbeck Offshore Services Inc.

U.S. Oil and gas SD CC Distressed exchange
2/10/2019 Trident Holding Co. LLC U.S. Health care D NR Chapter 11
2/19/2019 Payless Inc. U.S. Retail/restaurants D CCC- Chapter 11
2/21/2019

Novasep Holding S.A.S.

France Health care SD CC Distressed exchange
2/21/2019 One Call Corp. (One Call Care Management Inc.) (A) U.S. Insurance SD CC Distressed exchange/out-of-court restructuring
2/26/2019 Windstream Holdings Inc. U.S. Telecommunications D CCC- Chapter 11
3/8/2019 Affinion Group Holdings Inc. U.S. Media and entertainment SD CCC- Missed interest payments
3/11/2019 CTI Foods Holding Co. LLC U.S. Consumer products D CCC- Chapter 11
3/15/2019 Imperial Metals Corp. Canada Metals, mining, and steel SD CCC- Missed interest payments
3/15/2019 Cloud Peak Energy Resources LLC U.S. Metals, mining, and steel SD CCC Missed interest payments
3/15/2019 PHI Inc. U.S. Oil and gas D CCC- Chapter 11
3/20/2019 Nyrstar N.V. Belgium Metals, mining, and steel SD CCC+ Missed interest payments
3/21/2019 Murray Energy Corp. (A) U.S. Metals, mining, and steel SD CCC+ Distressed exchange
3/28/2019 Evergreen AcqCo1 L.P. d/b/a Savers U.S. Retail/restaurants SD CCC Distressed exchange
3/29/2019 Confidential Confidential High technology D CCC- Confidential
4/1/2019

Hexion Inc.

U.S. Chemicals, packaging, and environmental services D CCC Chapter 11
4/1/2019 Southcross Energy Partners L.P. U.S. Utilities D NR Chapter 11
4/2/2019 Sungard Availability Services Capital Inc. U.S. High technology D CCC+ Chapter 11
4/2/2019

Monitronics International Inc.

U.S. Media and entertainment SD CC Missed interest payments
4/3/2019 Maxcom Telecomunicaciones S.A.B. de C.V. (A) Mexico Telecommunications SD CCC+ Distressed exchange
4/3/2019 Bellatrix Exploration Ltd. Canada Oil and gas D CCC Missed interest payments
4/4/2019

Debenhams PLC

U.K. Retail/restaurants SD CC Distressed exchange
4/4/2019

Fusion Connect Inc.

U.S. Telecommunications D B Missed interest payments
4/5/2019 Curvature Inc. U.S. High technology SD CCC+ Distressed exchange
4/12/2019 MIE Holdings Corp. Cayman Islands Oil and gas SD CC Distressed exchange
4/14/2019 Jones Energy Inc. U.S. Oil and gas D NR Chapter 11
4/15/2019 Crossmark Holdings Inc. U.S. Consumer products SD CC Missed interest payments
4/16/2019 Bristow Group Inc. U.S. Oil and gas D CCC- Missed interest payments
5/1/2019 Confidential Confidential Media and entertainment D NR Confidential
5/2/2019 Senvion Holding GmbH (Suzlon Energy Ltd.) Germany Capital goods SD CC Missed interest payments
5/2/2019 Parq Holdings Ltd. Partnership Canada Media and entertainment SD CCC Missed interest payments
5/6/2019 Hospital Acquisition LLC (d/b/a LCI Holding Co. LLC) U.S. Health care D NR Chapter 11
5/9/2019 Preferred Proppants LLC U.S. Metals, mining, and steel D CCC+ Distressed exchange
5/22/2019

USJ Acucar e Alcool S/A

Brazil Consumer products SD CC Distressed exchange
5/27/2019 Confidential Confidential Chemicals, packaging, and environmental services SD CCC Confidential
5/28/2019 White Star Petroleum Holdings LLC U.S. Oil and gas D NR Chapter 11
5/31/2019 Sheridan Investment Partners II L.P. (Sheridan Holding Co. II LLC) U.S. Finance companies SD CCC- Missed interest payments
5/31/2019 Sheridan Investment Partners I LLC (Sheridan Holding Co. I LLC) U.S. Finance companies SD CCC- Distressed exchange
6/3/2019 Confidential Confidential Media and entertainment D NR Confidential
6/3/2019 FTD Inc. U.S. Retail/restaurants D NR Chapter 11
6/4/2019 Legacy Reserves L.P. U.S. Oil and gas D CCC- Missed interest payments
6/11/2019 Neiman Marcus Group LLC (The) U.S. Retail/restaurants SD CC Distressed exchange/out-of-court restructuring
6/14/2019

New Academy Holding Co. LLC

U.S. Retail/restaurants SD CCC+ Distressed exchange
6/19/2019

Denbury Resources Inc.

U.S. Oil and gas SD CC Distressed exchange
6/21/2019 Confidential Confidential Transportation SD CC Confidential
6/21/2019

Galapagos Holding S.A.

Luxembourg Capital goods SD CC Missed interest payments
6/24/2019 Confidential Confidential Health care D NR Confidential
6/26/2019

Cell C (Pty) Ltd.

South Africa Telecommunications SD CCC- Distressed exchange
6/28/2019

Mood Media Corp.

U.S. Media and Entertainment SD CC Distressed exchange
7/2/2019

Weatherford International plc

Ireland Oil and gas D CC Chapter 11
7/3/2019 PES Holdings LLC U.S. Oil and gas D B- Missed interest payments
7/11/2019 Stearns Holdings LLC U.S. Finance companies D CCC+ Chapter 11
7/12/2019 Confidential Confidential Homebuilders/real estate companies SD CC Confidential
7/18/2019 American Energy Permian Holdings LLC U.S. Oil and gas D CC Missed interest payments
7/19/2019 Blackhawk Mining U.S. Metals, mining, and steel D NR Chapter 11
7/23/2019

99 Cents Only Stores LLC

U.S. Retail/restaurants SD CC Distressed exchange
7/23/2019

Avianca Holdings S.A.

Panama Transportation SD CCC+ Missed principal payments
8/6/2019 Barneys New York Inc. U.S. Retail/restaurants D NR Chapter 11
8/7/2019 Halcon Resources Corp. U.S. Oil and gas D CC Chapter 11
8/12/2019 Sanchez Energy Corp. U.S. Oil and gas D CC Chapter 11
8/21/2019 Maxcom Telecomunicaciones S.A.B. de C.V. (B) Mexico Telecommunications D CC Missed interest payments
9/3/2019 Burger BossCo Intermediate Inc. U.S. Retail/Restaurants SD CCC+ Distressed exchange
9/12/2019 Alta Mesa Resources Inc. U.S. Oil and gas D CCC- Chapter 11
9/13/2019

Chesapeake Energy Corp.

U.S. Oil and gas SD B+ Distressed exchange
9/13/2019 PT Delta Merlin Dunia Textile Indonesia Consumer products D CC Missed interest payments
9/17/2019

EP Energy LLC

U.S. Oil and gas D CC Missed interest payments
9/19/2019 Confidential Confidential Capital goods D CCC Confidential
9/24/2019 Thomas Cook Group PLC U.K. Media and entertainment D CC Chapter 15
9/27/2019

Premiere Global Services Inc.

U.S. Telecommunications SD CCC- Distressed exchange
10/2/2019

Acosta Inc.

U.S. Consumer products SD CCC Missed principal and interest payments
10/2/2019

Syncreon Group Holdings B.V.

Netherlands Consumer products SD CC Distressed exchange
10/3/2019 Deluxe Entertainment Services Group Inc. U.S. Media and entertainment D CC Chapter 11
10/4/2019 Murray Energy Corp. (B) U.S. Metals, mining, and steel SD CCC Missed amortization and interest payments
10/7/2019 Medical Depot Holdings Inc. U.S. Health care D CC Distressed exchange
10/14/2019

Jain Irrigation Systems Ltd.

India Capital goods SD CCC Missed principal payments
10/15/2019

Rite Aid Corp.

U.S. Retail/restaurants SD B- Distressed exchange
10/16/2019 Confidential Confidential Capital goods D CCC- Confidential
10/17/2019 CDR HRB Holdings Inc. U.S. Consumer products D CCC- Missed principal and interest payments
10/17/2019 Dura Automotive Systems LLC U.S. Automotive D NR Chapter 11
10/21/2019 Destination Maternity Corp. U.S. Retail/restaurants D NR Chapter 11
10/27/2019 Confidential Confidential Consumer products D CCC+ Confidential
10/31/2019 Foresight Energy L.P. (Murray Energy Corp.) U.S. Metals, mining, and steel SD CCC- Missed interest payments
10/31/2019 One Call Corp. (One Call Care Management Inc.) (B) U.S. Insurance SD CC Distressed exchange
11/6/2019

Hovnanian Enterprises Inc.

U.S. Homebuilders/real estate companies SD CCC+ Distressed exchange
11/12/2019

Dean Foods Co.

U.S. Consumer products D CCC+ Chapter 11
11/13/2019

APC Automotive Technologies Intermediate Holdings LLC

U.S. Automotive SD CC Distressed exchange
11/14/2019

IPC Corp.

U.S. Telecommunications SD CC Distressed exchange
NR--Not rated. SD--Selective default. Data as of Nov. 20, 2019. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®.

Related Research

  • The U.S. Speculative-Grade Corporate Default Rate Is Expected To Reach 3.9% By September 2020, Nov. 20, 2019
  • The U.S. Distress Ratio Grows To 8.5%, Nov. 18, 2019
  • IPC Corp. Downgraded To 'SD' Following Second-Lien Term Loan Amendment, Nov. 14, 2019

Default Studies

More analysis and statistics are available in our annual default studies, published on RatingsDirect:

Corporate (financial and nonfinancial)
  • 2018 Annual Global Financial Services Default And Rating Transition Study
  • 2018 Annual Greater China Corporate Default And Rating Transition Study
  • 2018 Annual Taiwan Ratings Corp. Corporate Default And Rating Transition Study
  • 2018 Annual Global Corporate Default And Rating Transition Study
  • 2018 Annual U.S. Corporate Default And Rating Transition Study
  • 2018 Annual Asia Corporate Default And Rating Transition Study
  • Japanese Issuer Credit Rating Transitions Study 2018
  • 2017 Annual Australia And New Zealand Corporate Default Study And Rating Transitions
  • 2017 Inaugural Infrastructure Default Study And Rating Transitions
  • 2017 Mexican National-Scale Corporate And Public Finance Default Study And Rating Transitions
  • 2017 Annual Emerging Markets Corporate Default Study And Rating Transitions
  • 2017 Annual European Corporate Default Study And Rating Transitions
  • 2017 Annual Canadian Corporate Default Study And Rating Transitions
  • 2017 Inaugural Nordic Default Study And Rating Transitions
  • 2017 Annual Brazil Corporate Default Study And Rating Transitions
  • 2017 Annual Latin American Corporate Default Study And Rating Transitions
Structured finance
  • 2018 Annual European Structured Finance Default And Rating Transition Study
  • 2018 Annual Global Leveraged Loan CLO Default And Rating Transition Study
  • 2018 Annual Taiwan Structured Finance Default Study And Rating Transitions
  • 2018 Annual Global Structured Finance Default Study And Rating Transitions
  • 2018 Annual Japanese Structured Finance Default Study And Rating Transitions
  • 2017 Annual Mexican Structured Finance Default Study And Rating Transitions
U.S. public finance
  • 2018 Annual U.S. Public Finance Default Study And Rating Transitions
  • 2017 Annual U.S. Public Finance Not-For-Profit Health Care Default Study And Rating Transitions
  • 2017 U.S. Public Finance Utility Default Study And Rating Transitions
  • 2017 U.S. Public Finance Transportation Default Study And Rating Transitions
  • 2017 Annual U.S. Public Finance Housing Default Study And Rating Transitions
  • 2017 Annual U.S. Public Finance Charter School Default Study And Rating Transitions
  • 2017 Annual U.S. Public Finance Higher Education And Nonprofit Organization Default Study And Rating Transitions
Sovereign and international public finance
  • 2018 Annual International Public Finance Default And Rating Transition Study
  • 2018 Annual Sovereign Default And Rating Transition Study

This report does not constitute a rating action.

Credit Markets Research:Nicole Serino, New York;
nicole.serino@spglobal.com
Sudeep K Kesh, New York (1) 212-438-7982;
sudeep.kesh@spglobal.com
Research Contributor:Lyndon Fernandes, CRISIL Global Analytical Center, an S&P affiliate, Mumbai

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