The 2020 global corporate default tally rose to 15 after four companies defaulted this week--matching 2018's tally at this time of the year and slightly lower than that 17 defaults at this time last year. The defaulters were U.S.-based newspaper publisher The McClatchy Co., Italy-based maritime transportation services provider Moby S.p.A., U.S.-based Pizza Hut and Wendy's restaurant franchisee NPC International Inc., and U.S.-based home decor and furniture retailer Pier 1 Imports Inc.
Two out of four defaults this week are from the retail and restaurants sector, which drew the second-highest tally of defaults (16) in 2019, of which 13 were based in the U.S. (see chart 1). Ratings for retailers are largely biased toward the downside, carrying a negative bias (proportion of issuers with a negative outlook or ratings on CreditWatch with negative implications) of 26% compared with a positive bias of 4%. U.S. retailers in particular also have a comparatively large portion of the sector rated 'CCC+' and below (15%), reflecting additional vulnerability. Key risks for this sector in 2020 include changing consumer behaviors (shifting to e-commerce), geopolitical risks (involving tariffs) and a slowdown (see "Industry Top Trends 2020: Retail And Restaurants," Nov. 19, 2019).
Chart 1
This Week's Observations
- At this point in 2019 and 2018, there had been 17 and 15 defaults, respectively.
- Three out of four defaults this week are from the U.S. region, which leads the 2020 default tally at 10, followed by Europe at four (see table 1).
- Retail and restaurants lead the 2020 default tally, with four defaults (26.67%), all from the U.S.
- Defaults caused by distressed exchanges lead the 2020 default tally at six, followed by missed payments at five, and bankruptcy related defaults at four (see chart 3).
Chart 2
Chart 3
Chart 4
Table 1
Global Corporate Default Summary | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
12-month trailing speculative-grade default rate (%) | 2020¶ | 2019 | 2018 | Weakest links | ||||||||
U.S. | 3.2* | 10 | 78 | 47 | 190 | |||||||
Emerging market | 1.8 | 1 | 22 | 17 | 41 | |||||||
Europe | 2.5* | 4 | 15 | 13 | 43 | |||||||
Other developed | 1.3 | 0 | 3 | 5 | 8 | |||||||
Global | 2.5 | 15 | 118 | 82 | 282 | |||||||
Note: *Trailing-12-month default rates from Jan. 31, 2019 - Jan. 31, 2020, are preliminary and subject to change. ¶Data as of Feb. 19, 2020. Weakest link data is as of Dec. 31, 2019. Other developed region includes Australia, Canada, Japan, and New Zealand. Default counts may include confidentially rated issuers. Sources: S&P Global Ratings Research and S&P Global Market Intelligence’s CreditPro®. |
Table 2
Global Corporate Defaults 2020 | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Date | Parent company | Country | Subsector | To | From | Reason | ||||||||
1/2/2020 |
Constellis Holdings, LLC |
U.S. | Aerospace and defense | SD | CC | Missed principal payments | ||||||||
1/7/2020 |
TOMS Shoes LLC |
U.S. | Consumer products | D | CCC | Distressed exchange | ||||||||
1/9/2020 |
Moran Foods LLC (SAL Acquisition Corp.) |
U.S. | Retail/restaurants | SD | CCC | Missed interest payments | ||||||||
1/13/2020 |
Lecta S.A. |
Luxembourg | Forest products and building materials | SD | CC | Missed interest payments | ||||||||
1/14/2020 |
Qinghai Provincial Investment Group Co. Ltd. |
China | Metals, mining, and steel | D | CCC- | Missed interest payments | ||||||||
1/19/2020 |
Krystal Co. (The) |
U.S. | Retail/restaurants | D | NR | Chapter 11 | ||||||||
1/21/2020 |
Panda Green Energy Group Ltd. |
Bermuda | Utilities | SD | CC | Distressed exchange | ||||||||
1/22/2020 |
Deoleo S.A. |
Spain | Consumer products | SD | CC | Distressed exchange/ out-of-court restructuring | ||||||||
1/29/2020 |
Doncasters Group Ltd. |
U.K. | Capital goods | SD | CCC- | Distressed exchange/ out-of-court restructuring | ||||||||
1/30/2020 |
Pinnacle Operating Corp. |
U.S. | Chemicals, packaging, and environmental services | SD | CCC | Distressed exchange/ out-of-court restructuring | ||||||||
2/7/2020 |
Commercial Barge Line Co. |
U.S. | Transportation | D | CC | Chapter 11 | ||||||||
2/13/2020 |
The McClatchy Co. |
U.S. | Media and entertainment | D | CC | Chapter 11 | ||||||||
2/14/2020 |
Moby SpA |
Italy | Transportation | SD | CCC- | Distressed exchange/ out-of-court restructuring | ||||||||
2/14/2020 |
NPC International Inc. |
U.S. | Retail/restaurants | SD | CCC- | Missed interest payments | ||||||||
2/18/2020 |
Pier 1 Imports Inc. |
U.S. | Retail/restaurants | D | CCC- | Chapter 11 | ||||||||
NR--Not rated. SD--Selective default. Data as of Feb. 19, 2020. Sources: S&P Global Ratings Research and S&P Global Market Intelligence’s CreditPro®. |
Related Research
- The McClatchy Co. Downgraded To 'D' On Chapter 11 Bankruptcy Filing, Feb. 14, 2020
- Italy-Based Ferry Operator Moby SpA Downgraded To 'SD' From 'CCC-' On Announced Standstill Agreement, Feb. 14, 2020
- NPC International Inc. Rating Lowered To 'SD' On Missed Interest Payments; Existing Debt Ratings Lowered To 'D', Feb. 15, 2020
- Pier 1 Imports Inc. Downgraded To 'D' From 'CCC-' On Chapter 11 Bankruptcy Filing, Feb. 19, 2020
- Industry Top Trends 2020: Retail And Restaurants, Nov. 19, 2019
Default Studies
More analysis and statistics are available in our annual default studies, published on RatingsDirect:
Corporate (financial and nonfinancial)
- 2018 Annual Infrastructure Default And Rating Transition Study
- 2018 Annual Mexican National Scale Corporate And Public Finance Default And Rating Transition Study
- 2018 Annual Latin American Corporate Default And Rating Transition Study
- 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 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
Structured finance
- 2018 Annual Mexican Structured Finance Default And Rating Transition Study
- 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
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: | Shripati Pranshu, Mumbai; shripati.pranshu@spglobal.com |
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