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Default, Transition, and Recovery: The 2020 Default Tally Jumps To 57 After Six Defaults

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Default, Transition, and Recovery: The 2020 Default Tally Jumps To 57 After Six Defaults

The 2020 global corporate default tally has reached 57 this week after six defaults, three of which were U.S.-based retailers including J.C. Penney Co. Inc., The Neiman Marcus Group LLC, and Mister Car Wash Holdings Inc. There have been 15 defaults from the consumer/services sector (which includes both consumer and retail and restaurants sectors) so far in 2020--14 of which were based in the U.S.

Credit risks to the global retail sector have increased dramatically as the effort to contain COVID-19 results in store closures, changes to shopping habits, and heightened risk of a broad-based macroeconomic decline. 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," published March 20, 2020.) Given the growing number of weakest links (defined as an issuer rated 'B-' or lower with a negative outlook or CreditWatch placement) in both the retail and consumer products sectors (97 as of March 31), we can expect the number of defaults in the sector to continue to rise (see chart 2).

Chart 1

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This Week's Observations

  • At this point in 2019 and 2018, there had been 42 and 31 defaults, respectively.
  • By sector, retail and restaurants lead the default tally, with nine, followed by the oil and gas and media and entertainment sectors, both with seven defaults.
  • Missed interest and principle payments have been the leading reasons for defaults so far in 2020, with 25.
  • The 12-month-trailing speculative-grade default rate for the U.S. increased to 3.5% in March 2020 from 3.2% in February 2020, while the same metric for the European region decreased to 2.4% in March 2020 from 2.5% in February 2020.
  • The 12-month-trailing speculative-grade default rate for the global consumer services sector increased to 4.6% in March 2020, its highest point since May 2018.

Chart 2

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Chart 3

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Chart 3

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Chart 5

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Table 1

Global Corporate Default Summary
Region 12-Month-trailing speculative-grade default rate (%) 2020 year-to-date 2019 year-to-date 2019 Weakest links
U.S. 3.5 39 31 78 309
Emerging market 1.9 7 5 22 41
Europe 2.4 7 4 15 70
Other developed 2.0 4 2 3 20
Global 2.8 57 42 118 440
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 22, 2020. Weakest link data is as of March 31, 2020. 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
2/12/2020

RentPath LLC

U.S. Media and entertainment D NR 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
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
3/9/2020

Bluestem Brands Inc.

U.S. Retail/restaurants D NR 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. (Biglari Holdings Inc.)

U.S. Retail/restaurants SD CCC- Distressed exchange
4/1/2020

Whiting Petroleum Corp.

U.S. Oil and gas D CCC+ Chapter 11
4/2/2020

KCA DEUTAG Alpha Ltd.

U.K. Oil and gas SD CCC+ Missed interest payments
4/3/2020

CDS Group

Canada Media and entertainment D CCC- Missed principal and interest payments
4/3/2020

New Millennium Holdco Inc

U.S. Health care D CC Missed principal and interest payments
4/6/2020

BW Homecare Holdings LLC

U.S. Health care SD CCC Distressed exchange
4/6/2020

FE Investments Ltd. (FE Investments Group Ltd.)

New Zealand Finance companies D CCC Receivership
4/7/2020

Gavilan Resources LLC

U.S. Oil and gas D CCC- Missed interest payments
4/7/2020

Jason Inc.

U.S. Capital goods SD CCC Missed interest payments
4/7/2020

Quorum Health Corp.

U.S. Health care D CCC- Chapter 11
4/7/2020

Speedcast International Ltd.

Australia Telecommunications D CCC Missed principal and interest payments
4/8/2020

North American Lifting Holdings Inc.

U.S. Capital goods SD CCC- Missed interest payments
4/8/2020

SPR Holdings LLC

U.S. Oil and gas D CCC+ Missed interest payments
4/9/2020 Confidential Confidential Media and entertainment SD CC Confidential
4/10/2020

Vestel Elektronik Sanayi Ve Ticaret A.S.

Turkey High technology SD CCC+ Distressed exchange
4/14/2020

LSC Communications Inc.

U.S. Media and entertainment D CC Chapter 11
4/14/2020

Libbey Inc.

U.S. Consumer products SD CCC Distressed exchange
4/14/2020

NMC Health PLC

U.A.E. Health care D CCC- Missed interest payments
4/15/2020

Intelsat S.A.

Luxembourg Telecommunications SD CCC+ Missed interest payments
4/16/2020

O1 Properties Ltd.

Cyprus Homebuilders/real estate companies D CC Missed coupon payment
4/16/2020

J.C. Penney Co. Inc.

U.S. Retail/restaurants D CCC Missed interest payments
4/17/2020

Mister Car Wash Holdings Inc.

U.S. Retail/restaurants SD CCC+ Distressed exchange
4/17/2020

Ultra Petroleum Corp.

U.S. Oil and gas D CCC- Missed interest payments
4/21/2020

Engine Holding LLC

U.S. Media and entertainment D CCC- Missed interest payments
4/22/2020

The Neiman Marcus Group LLC

U.S. Retail/restaurants D CCC- Missed interest payments
NR--Not rated. SD--Selective default. Data as of April 22, 2020. Sources: S&P Global Ratings Research and S&P Global Market Intelligence’s CreditPro®.

Related Research

  • The Neiman Marcus Group LLC Downgraded To 'D' On Missed Interest Payment, April 23, 2020
  • Engine Holding LLC Downgraded To 'D' On Forbearance Agreement Following Missed Debt Interest And Amortization Payments, April 22, 2020
  • Mister Car Wash Holdings Inc. Downgraded To 'SD' From 'CCC+' On Distressed Debt Restructuring, April 18, 2020
  • J.C. Penney Co. Inc. Downgraded To 'D' On Missed Interest Payment, April 17, 2020
  • Ultra Petroleum Corp. Downgraded To 'D' From 'CCC-' Following Missed Interest Payment On Unsecured Notes, April 17, 2020
  • An Already Historic U.S. Downturn Now Looks Even Worse, April 16, 2020
  • O1 Properties Ltd. Downgraded To 'D' On Missed Coupon Payment, April 16, 2020
  • Social Distancing Boosts Weakest Links, April 8, 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
  • 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 Brazil Corporate Default Study And Rating Transitions
  • 2017 Annual European Corporate Default Study And Rating Transitions
  • 2017 Annual Greater China Corporate Default Study And Rating Transitions
  • 2017 Inaugural Nordic Default Study And Rating Transitions
  • 2017 Annual Canadian Corporate Default Study And Rating Transitions
  • 2017 Annual Brazil Corporate Default Study And Rating Transitions
Structured finance
  • 2019 Annual Japanese Structured Finance Default And Rating Transition Study
  • 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 Japanese Structured Finance Default Study And Rating Transitions
  • 2018 Annual Global Structured Finance Default Study And Rating Transitions
  • 2017 Annual Mexican Structured Finance Default Study And Rating Transitions
U.S. public finance
  • 2018 Annual International Public Finance Default And Rating Transition Study
  • 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 Higher Education And Nonprofit Organization Default Study And Rating Transitions
  • 2017 Annual U.S. Public Finance Charter School 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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