The 2020 global corporate default tally reached 33 this week after one Shanghai-based (Cayman Island-incorporated) and four U.S.-based issuers defaulted. The defaulted companies were: Chinese-based business parks developer and operator Yida China Holdings Ltd., U.S.-based cyber security service provider Optiv Inc., credit report repair service provider PGX Holdings Inc., hamburger restaurant chain Steak n Shake Inc. (SnS), and crude oil and natural gas exploration and production company Whiting Petroleum Corp.
There have been 10 defaults from the consumer/services sector (which includes both consumer and retail and restaurants sectors) so far in 2020--nine of which are U.S.-based. Credit risks to the global retail sector have increased dramatically as the effort to contain COVID-19 continues, in many cases through social distancing and mandatory closures of nonessential business operations. This is resulting in store closures, changes to shopping habits, and heightened expectations for broad-based macroeconomic decline (and subsequently lower spending prospects). The degree of any impact on our ratings will depend on the duration of shutdowns and trajectory of a future rebound (see "Coronavirus Dramatically Increases Risk For Already Stressed Retail And Restaurant Sectors," March 21, 2020).
Chart 1
This Week's Observations
- The current 2020 tally is just slightly above where it was at this point in 2019 and 2018, with 31 and 26, respectively.
- By sector, consumer products and retail and restaurants lead the tally with five defaults each.
- Distressed exchanges lead defaults in 2020, with 13, followed by missed principal and interest payments, with 10.
- We estimate the 12-month-trailing speculative-grade default rate for the U.S. region will increase to 3.4% in March 2020 from 3.2% in February 2020, while we expect the same for the European region to fall to 2.4% in March 2020 from 2.5% in February 2020.
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Table 1
| Global Corporate Default Summary | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Region | 12-month trailing speculative-grade default rate (%) | 2020 year-to-date default tally | 2019 year-to-date default tally | 2019 | Weakest links | |||||||
| U.S. | 3.4* | 23 | 23 | 78 | 190 | |||||||
| Emerging market | 1.6 | 5 | 4 | 22 | 41 | |||||||
| Europe | 2.4* | 4 | 3 | 15 | 43 | |||||||
| Other developed | 2.6 | 1 | 1 | 3 | 8 | |||||||
| Global | 2.7 | 33 | 31 | 118 | 282 | |||||||
| Note: *Trailing-12-month default rates from March 31, 2019 - March 31, 2020, are preliminary and subject to change. Year-to-date data as of April 1, 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 & 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 |
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 | ||||||||
| 2/12/2020 |
RentPath LLC |
U.S. | Media and entertainment | D | NR | Chapter 11 | ||||||||
| 2/13/2020 |
McClatchy Co. (The) |
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 | ||||||||
| 2/21/2020 |
Tunghsu Group Co. Ltd. |
China | High technology | SD | CCC- | Missed principal and interest payments | ||||||||
| 2/24/2020 |
VIP Cinema Holdings Inc. |
U.S. | Consumer products | D | CCC- | Chapter 11 | ||||||||
| 2/25/2020 |
Calfrac Well Services Ltd. |
Canada | Oil and gas | SD | CC | Distressed exchange | ||||||||
| 2/28/2020 |
PFS Holding Corp. |
U.S. | Consumer products | SD | CCC- | Missed interest payments | ||||||||
| 3/3/2020 |
Pioneer Energy Services Corp. |
U.S. | Oil and gas | D | CCC- | Chapter 11 | ||||||||
| 3/12/2020 |
Ascena Retail Group Inc. |
U.S. | Consumer products | SD | CCC | Distressed exchange | ||||||||
| 3/12/2020 |
Optimas OE Solutions Holding LLC |
U.S. | Capital goods | SD | CCC+ | Distressed exchange | ||||||||
| 3/12/2020 | Confidential | Confidential | Metals, mining, and steel | SD | CCC- | Confidential | ||||||||
| 3/16/2020 |
Frontier Communications Corp. |
U.S. | Telecommunications | SD | CCC- | Missed interest payments | ||||||||
| 3/17/2020 |
Internap Corp. |
U.S. | Telecommunications | D | CCC+ | Chapter 11 | ||||||||
| 3/19/2020 |
Geo Energy Resources Ltd. |
Singapore | Metals, mining, and steel | SD | B- | Distressed exchange | ||||||||
| 3/20/2020 |
Grain Insurance Co. JSC |
Kazakhstan | Insurance | D | B | Missed interest payments | ||||||||
| 3/27/2020 |
Optiv Inc. |
U.S. | High technology | SD | CCC+ | Distressed exchange | ||||||||
| 3/27/2020 |
Yida China Holdings Ltd. |
Cayman Islands | Homebuilders/real estate companies | SD | CC | Distressed exchange | ||||||||
| 4/1/2020 |
PGX Holdings Inc. |
U.S. | Media and entertainment | D | CCC | Missed principal and interest payments | ||||||||
| 4/1/2020 |
Steak n Shake Inc. |
U.S. | Retail/restaurants | SD | CCC- | Distressed exchange | ||||||||
| 4/1/2020 |
Whiting Petroleum Corp. |
U.S. | Oil and gas | D | CCC+ | Chapter 11 | ||||||||
| NR--Not rated. SD--Selective default. Data as of April 1, 2020. Sources: S&P Global Ratings Research and S&P Global Market Intelligence’s CreditPro®. | ||||||||||||||
Related Research
- PGX Holdings Inc. Downgraded To 'D' From 'CCC' On Missed Interest And Principal Payments And Forbearance Agreement, April 2, 2020
- Whiting Petroleum Corp. Downgraded To 'D' From 'CCC+' On Announced Commencement Of Chapter 11 Bankruptcy Proceeding, April 2, 2020
- Steak n Shake Inc. Rating Lowered To 'SD' Following Distressed Exchange; Debt Rating Lowered To 'D', April 1, 2020
- Optiv Inc. Issuer Credit Rating Revised To 'CCC' From 'SD' Following Distressed Debt Exchange; Outlook Negative,April 2,2020
- Optiv Inc. Downgraded To 'SD' From 'CCC+' On Distressed Debt Exchange; Second-Lien Rating Lowered To 'D', March 28, 2020
- Yida China Downgraded To 'SD', Issue Rating Lowered To 'D' On Distressed Exchange Completion, March 27, 2020
- Coronavirus Dramatically Increases Risk For Already Stressed Retail And Restaurant Sectors, March 21, 2020
Default Studies
More analysis and statistics are available in our annual default studies, published on RatingsDirect:
Corporate (financial and nonfinancial)
- Japanese Issuer Credit Rating Transitions Study 2019
- 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 + 1 (212) 438 1396; 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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