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Credit Trends: State Of Play: Record Issuance Lifts Global Corporate Debt By 6%

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Credit Trends: Risky Credits: Risks Increase For North American 'CCC' And Below Issuers

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Default, Transition, and Recovery: Global Corporate Default Tally Remains At 67 As Defaults Continue To Slow

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Credit Trends: U.S. Corporate Bond Yields As Of Dec. 1, 2021

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Credit Trends: Potential Downgrades Fall While Potential Upgrades Stall


Credit Trends: State Of Play: Record Issuance Lifts Global Corporate Debt By 6%

Global corporate bond issuance surged to a record high in the first three quarters of 2020, exceeding full-year issuance volumes of the past two years. This new issuance fueled an expansion of corporate debt globally--it grew by over $1.2 trillion in 2020, reaching $21.8 trillion by Oct. 1. This figure consists of corporate debt instruments (including bonds, notes, loans, revolving credit facilities, and preferred securities from financial and nonfinancial corporate issuers) that are rated by S&P Global Ratings.

The debt level increased by 6% in the first three quarters of 2020, in line with the growth rate for full-year 2019.

Investment- and speculative-grade debt rose as companies built up cash reserves and raised the amount of available debt funding to cover unexpected revenue declines amid the COVID-19 pandemic. In 2020 (through Oct. 1), the amount of global investment-grade (rated 'BBB-' and above) debt increased by 5% to $16.8 trillion, while speculative-grade (rated 'BB+' and below) debt increased by 9% to $5.03 trillion. During this period, investor demand for corporate credit has been strong as investors search for yield in a lower-for-longer interest rate environment.

Chart 1

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Chart 2

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In addition to recent issuance, the rising level of speculative-grade debt also reflects the number of companies that were downgraded to speculative grade from investment grade. The fallen angels include several large issuers, each with more than $10 billion in rated debt. These large fallen angels through September this year included Ford Motor Co., Occidental Petroleum Corp., The Kraft Heinz Co., Renault S.A., Atlantia SpA, and Apache Corp.

77% Of Global Corporate Debt Is Rated Investment Grade

By dollar amount of rated debt, 77% of global corporate debt is rated investment grade, even though only about 50.3% of issuers are rated investment grade. By contrast, 49.7% of global corporate issuers are rated speculative grade, and just 23% of corporate debt globally is rated speculative grade. Speculative-grade issuers tend to be smaller, with lower revenue and lower debt outstanding, even as they have higher leverage than investment-grade issuers.

Within investment grade, the 'BBB' rating category is the largest, accounting for $8.43 trillion in debt. Within speculative grade, the 'BB' category has the highest amount of speculative-grade debt, with $2.49 trillion (see chart 3).

Debt rated in the 'CCC'/'C' category showed the largest growth within speculative grade in 2020 as containment measures for the COVID-19 pandemic led to a sudden and sharp economic shutdown that contributed to a wave of downgrades. As a result, the number of 'CCC'/'C' category issuers rose by 96% from the end of 2019 to 463 as of Sept. 30, 2020, and the amount of debt rated in the 'CCC'/'C' category increased by 37% to $541.1 billion.

Chart 3

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Table 1

Global Corporate Debt Amounts By Rating Category
--Debt amount (bil. $)-- --Debt amount (%)--
Financial Nonfinancial Total Financial Nonfinancial Total
AAA 870.2 88.4 958.6 4.0 0.4 4.4
AA 1,013.8 723.3 1,737.1 4.6 3.3 8.0
A 2,716.0 2,954.5 5,670.5 12.4 13.5 26.0
BBB 2,493.3 5,940.8 8,434.1 11.4 27.2 38.6
BB 466.8 2,026.2 2,493.1 2.1 9.3 11.4
B 135.8 1,859.6 1,995.4 0.6 8.5 9.1
CCC/below 16.2 524.9 541.1 0.1 2.4 2.5
Investment grade 7,093.3 9,706.9 16,800.2 32.5 44.5 77.0
Speculative grade 618.8 4,410.7 5,029.5 2.8 20.2 23.0
Total 7,712.1 14,117.6 21,829.7 35.3 64.7 100.0
Data as of Oct. 1, 2020. Includes bonds, notes, loans, and revolving credit facilities rated by S&P Global Ratings. Excludes debt instruments that do not have a global scale rating. Foreign currencies are converted to U.S. dollars at the exchange rate on close of business on Oct. 1, 2020. Source: S&P Global Ratings.

By region, U.S.-based issuers (including from the tax havens of Bermuda and the Cayman Islands) account for the largest share of rated debt globally, with $10.63 trillion. Compared with other regions, the U.S. has the higher proportion of debt from nonfinancial companies (76% of U.S. corporate debt is from nonfinancials) as well as speculative-grade debt (nearly 29% of U.S. corporate debt is speculative grade). In part, this reflects the highly developed capital markets in the U.S. and its high degree of banking disintermediation.

Emerging market corporate debt totals $1.32 trillion, only 6% of rated debt globally. Although, a considerable share of the region's overall outstanding debt is unrated. (This study excludes debt instruments that do not have global scale ratings.) We expect this share of rated emerging market debt to continue to grow as capital markets in the region grow and develop.

Table 2

Global Corporate Rated Debt Amounts By Region
--Debt amount (bil. $)-- --Debt amount (%)--
Region Investment grade Speculative grade Total Investment grade Speculative grade Total
U.S. 7,576.8 3,051.5 10,628.3 35 14 49
Nonfinancial 5,347.8 2,765.5 8,113.4 24 13 37
Financial 2,229.0 285.9 2,514.9 10 1 12
Europe 6,569.8 1,326.9 7,896.7 30 6 36
Nonfinancial 2,977.1 1,073.1 4,050.2 14 5 19
Financial 3,592.7 253.8 3,846.5 16 1 18
Other developed 1,693.8 291.8 1,985.6 8 1 9
Nonfinancial 719.1 266.2 985.2 3 1 5
Financial 974.7 25.7 1,000.4 4 0 5
Emerging markets 959.8 359.3 1,319.1 4 2 6
Nonfinancial 662.9 305.9 968.8 3 1 4
Financial 296.9 53.4 350.3 1 0 2
Totals
Nonfinancial 9,706.9 4,410.7 14,117.6 44 20 65
Financial 7,093.3 618.8 7,712.1 32 3 35
Grand total 16,800.2 5,029.5 21,829.7 77 23 100
Data as of Oct. 1, 2020. Includes bonds, notes, loans, and revolving credit facilities rated by S&P Global Ratings. Excludes debt instruments that do not have a global scale rating. Foreign currencies are converted to U.S. dollars at the exchange rate on close of business on Oct. 1, 2020. Source: S&P Global Ratings Research.

By country, the U.S., the U.K., France, and Germany each has over $1 trillion in rated corporate debt. Together, these countries account for two-thirds of the world's rated corporate debt. Among these, the U.S.-based companies account for the largest share, with nearly $10.3 trillion (excluding debt from tax havens). The U.K. follows with $1.59 trillion, France with $1.41 trillion, and Germany with $1.22 trillion (see table 3).

Table 3

Rated Global Corporate Debt By Country And Rating Grade
--Nonfinancials-- --Financials-- --Total--
(Bil. $) Investment grade Speculative grade Investment grade Speculative grade Investment grade Speculative grade Grand total
U.S. 5,195.2 2,628.0 2,193.6 278.3 7,388.8 2,906.3 10,295.1
U.K. 704.3 257.1 535.4 90.5 1,239.7 347.6 1,587.3
France 555.7 142.1 700.6 13.9 1,256.4 156.0 1,412.4
Germany 586.0 134.2 483.2 20.0 1,069.2 154.2 1,223.4
Canada 334.9 212.5 334.5 8.8 669.5 221.3 890.7
Netherlands 159.0 149.3 492.0 9.7 651.0 159.0 810.0
Japan 230.6 20.3 285.6 15.5 516.2 35.9 552.1
Spain 143.5 43.7 308.8 22.1 452.3 65.8 518.1
Australia 140.7 19.9 354.6 1.3 495.3 21.2 516.4
Switzerland 153.6 21.4 219.8 23.1 373.4 44.5 417.9
Italy 128.3 74.7 120.7 41.8 249.0 116.5 365.4
China 139.2 15.9 144.4 8.2 283.6 24.1 307.7
Others 1,235.8 691.6 920.1 85.7 2,155.9 777.2 2,933.1
Data as of Oct. 1, 2020. Source: S&P Global Ratings Research.

Among nonfinancial companies, the largest and most capital-intensive sectors often have the highest amounts of debt outstanding in the market. The utilities, telecommunications, and consumer products sectors lead with the highest debt amounts, at $1.92 trillion, $1.49 trillion, and $1.39 trillion, respectively.

Table 4

Global Corporate Debt Amounts By Rating Grade And Sector
(Bil. $) Investment grade Speculative grade Total
Financials 7,093.3 618.8 7,712.1
Financial institutions 6,265.6 538.6 6,804.2
Insurance 827.6 80.2 907.9
Nonfinancials 9,706.9 4,410.7 14,117.6
Aerospace and defense 182.8 104.2 287.0
Auto 496.2 248.5 744.7
Capital goods 450.6 175.4 626.0
Consumer products 957.2 435.9 1,393.1
Chemicals, packaging, and environmental services 368.4 266.1 634.5
Diversified 23.9 1.9 25.8
Forest products and building materials 157.4 105.0 262.3
Health care 808.1 453.0 1,261.1
High technology 749.6 340.5 1,090.1
Homebuilders/real estate cos. 487.2 144.4 631.6
Media and entertainment 374.8 685.2 1,060.0
Metals, mining, and steel 194.8 110.4 305.2
Oil and gas 805.5 290.6 1,096.1
Retail/restaurants 439.4 213.1 652.5
Telecommunications 1,030.1 460.0 1,490.1
Transportation 507.1 129.3 636.4
Utility 1,673.7 247.3 1,921.0
Total 16,800.2 5,029.5 21,829.7
Data as of Oct. 1, 2020. Includes bonds, notes, loans, and revolving credit facilities rated by S&P Global Ratings. Excludes debt instruments that do not have a global scale rating. Foreign currencies are converted to U.S. dollars at the exchange rate on close of business on Oct. 1, 2020. Source: S&P Global Ratings Research.

The sectors with the most investment-grade nonfinancial debt are utilities ($1.67 trillion), telecommunications ($1.03 trillion), and consumer products ($957.2 billion). The nonfinancial corporate sectors with the largest amounts of speculative-grade debt are media and entertainment ($685.2 billion), telecommunications ($460 billion), and health care ($453 billion).

Among financial services issuers, $7.09 trillion (92% of total debt) is in investment grade, and most of this debt is from financial institutions, such as banks and brokerages.

U.S. Speculative-Grade Debt Crosses The $3 Trillion Mark

U.S. rated corporate debt has risen by nearly 7% since the beginning of 2020 to $10.63 trillion as of Oct. 1. This credit expansion followed the Fed's extraordinary intervention in the credit market, which spurred a resurgence of liquidity that supported record bond issuance volumes.

  • U.S. investment-grade-rated corporate debt rose by 5% to $7.58 trillion between Jan. 1 and Oct. 1, 2020.
  • Speculative-grade-rated debt rose at a higher rate of 12% and reached $3.05 trillion--surpassing the $3 trillion mark for the first time on record.
  • In the U.S., speculative-grade debt represented 29% of all rated corporate debt as of Oct. 1, 2020, up from 27.5% at the beginning of the year (see chart 3).
  • Fallen angels such as Ford Motor Co., Occidental Petroleum Corp., and The Kraft Heinz Co. that were downgraded to speculative grade in the first half of 2020 contributed to the increase in speculative-grade debt.
  • In the U.S., the auto sector had the largest increase in speculative-grade debt in 2020--it more than doubled in the year through Oct. 1, to nearly $150 billion. Ford's downgrade to speculative grade accounted for much of this increase.
  • Investors show less of an appetite for floating-rate debt while the interest rate remains lower for longer. Bonds and notes now account for the majority of speculative-grade nonfinancial debt, having grown to 51% (from 45% at the beginning of the year) as companies are increasingly turning to the bond market for funding.

Chart 4

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Chart 5

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  • The 'BBB' category accounts for the largest share of rated U.S. corporate debt, with $4.34 trillion, or 41% of U.S. corporate debt (see chart 6).
  • This 'BBB' category debt includes nearly $3.16 trillion in debt from nonfinancial companies and $1.18 trillion in financial services debt.
  • Within speculative grade, the 'BB' category accounts for the largest amount of debt, at $1.39 trillion, while the 'B' category accounts for a smaller $1.29 trillion and a larger proportion of issuers.
  • Within speculative grade, the 'BB' category grew the most in absolute terms (up $178.7 billion year to date to $1.39 trillion), while the 'CCC'/'C' category grew the most in relative terms (up 26% to $363.6 billion).

Chart 6

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Table 5

U.S. Corporate Debt Amounts By Rating Category
--Debt amount (bil. $)-- --Debt amount (%)--
Financial Nonfinancial Total Financial Nonfinancial Total
AAA 0.0 85.6 85.6 0.0 0.8 0.8
AA 172.7 404.3 577.0 1.6 3.8 5.4
A 876.3 1,702.6 2,578.9 8.2 16.0 24.3
BBB 1,180.0 3,155.3 4,335.3 11.1 29.7 40.8
BB 180.6 1,213.5 1,394.0 1.7 11.4 13.1
B 93.6 1,200.2 1,293.8 0.9 11.3 12.2
CCC/below 11.8 351.9 363.6 0.1 3.3 3.4
Investment grade 2,229.0 5,347.8 7,576.8 21.0 50.3 71.3
Speculative grade 285.9 2,765.5 3,051.5 2.7 26.0 28.7
Total 2,514.9 8,113.4 10,628.3 23.7 76.3 100.0
Includes bonds, loans, and revolving credit facilities that are rated by S&P Global Ratings from financial and nonfinancial issuers. Data as of Oct. 1, 2020. Source: S&P Global Ratings Research.

Among nonfinancial companies, U.S. sectors with the most debt are:

  • Rated corporate debt: utilities ($1.02 trillion), high technology ($935.3 billion), and telecommunications ($825.5 billion) (see table 6);
  • Investment-grade-rated corporate debt: utilities ($847 billion), high technology ($674.4 billion), and telecommunications ($624.6 billion); and
  • Speculative-grade-rated corporate debt: media and entertainment ($528.4 billion), consumer products ($281 billion), health care ($262.2 billion), and high technology ($260.9 billion).

Table 6

U.S. Corporate Debt Amounts By Rating Grade And Sector
(Bil. $) Investment grade Speculative grade Total
Financials 2,229.0 285.9 2,514.9
Financial institutions 1,712.4 209.8 1,922.2
Insurance 516.6 76.1 592.8
Nonfinancials 5,347.8 2,765.5 8,113.4
Aerospace and defense 156.6 77.3 234.0
Auto 99.8 149.5 249.3
Capital goods 342.1 116.0 458.1
Consumer products 468.8 281.0 749.7
Chemicals, packaging, and environmental services 189.5 138.3 327.8
Forest products and building materials 57.1 62.5 119.6
Health care 466.8 262.2 728.9
High technology 674.4 260.9 935.3
Homebuilders/real estate cos. 241.4 98.9 340.3
Media and entertainment 288.6 528.4 817.0
Metals, mining, and steel 21.2 54.7 76.0
Oil and gas 251.7 156.8 408.5
Retail/restaurants 367.0 139.0 506.1
Telecommunications 624.6 201.0 825.5
Transportation 251.2 63.8 315.0
Utility 847.0 175.2 1,022.2
Total 7,576.8 3,051.5 10,628.3
Data as of Oct. 1, 2020. Includes bonds, notes, loans, and revolving credit facilities rated by S&P Global Ratings. Excludes debt instruments that do not have a global scale rating. Foreign currencies are converted to U.S. dollars at the exchange rate on close of business on Oct. 1, 2020. Source: S&P Global Ratings Research.

By debt type, bonds and notes account for the majority of U.S. corporate debt, and this share has grown during the year:

  • Most rated financial sector corporate debt in the U.S. (96%) was in the form of bonds, notes, or preferred securities (see table 7).
  • 22% of rated nonfinancial sector corporate debt in the U.S. was in the form of loans and revolving credit facilities.
  • Bonds and notes now account for 53% of speculative-grade debt, with loans now a smaller share as investor demand for floating-rate debt has receded. The stock of rated loans has further declined as companies issued more than $50 billion in new bonds to take out existing loans in the second and third quarters.
  • As of Oct. 1, U.S. nonfinancial companies had $421.8 billion in revolving credit facilities that were rated (including both drawn and undrawn facilities).
  • According to data from LCD, an offering of S&P Global Market Intelligence, U.S. companies drew down more than $300 billion from revolvers since March 5, as companies sought to bolster liquidity and working capital as the COVID-19 pandemic spread.

Table 7

Rated U.S. Corporate Debt Amounts By Instrument Type
(Bil. $) Investment grade Speculative grade Total
Financial debt
Revolver 13.3 10.6 23.9
Term loan 1.4 82.5 83.9
Loan/revolver total 14.7 93.1 107.8
Senior secured 100.3 12.8 113.1
Senior unsecured 1,749.2 65.8 1,815.0
Subordinated 241.1 9.1 250.2
Preferred/other 123.7 105.1 228.8
Bond/note total 2,214.3 192.8 2,407.1
Financial total 2,229.0 285.9 2,514.9
Nonfinancial debt
Revolver 221.5 200.2 421.8
Term loan 243.2 1,149.2 1,392.4
Loan/revolver total 464.8 1,349.4 1,814.2
Senior secured 365.5 205.7 571.2
Senior unsecured 4,415.7 1,147.2 5,562.8
Subordinated 45.7 21.8 67.4
Preferred/other 56.2 41.5 97.7
Bond/note total 4,883.0 1,416.1 6,299.1
Nonfinancial total 5,347.8 2,765.5 8,113.4
All corporate debt
Loan/revolver total 479.5 1,442.5 1,922.0
Bond/note total 7,097.4 1,608.9 8,706.3
Rated debt total 7,576.8 3,051.5 10,628.3
Includes rated debt from financial and nonfinancial issuers. Data as of Oct. 1, 2020. Excludes debt instruments that do not have a global scale rating. Foreign currencies are converted to U.S. dollars at the exchange rate on close of business on Oct. 1, 2020. Source: S&P Global Ratings Research.

European Corporate Debt Expanded By 7% Through The Third Quarter

European corporate debt has risen by 7% since the beginning of 2020 to $7.9 trillion as of Oct. 1, 2020. Part of this growth reflects the depreciating dollar, as European corporate debt shows a more modest 2% growth over the same period in euro terms (see the euro-denominated tables in the Appendix).

  • Between Jan. 1 and Oct. 1, 2020, European investment-grade-rated corporate debt increased by 6% to near $6.6 trillion, while speculative-grade-rated debt rose by 9% to $1.3 trillion (see chart 7).
  • Downgrades of European fallen angels this year through third quarter have contributed to this increase in speculative-grade debt, including Renault S.A., Atlantia SpA, and IHO Verwaltungs GmbH.
  • Speculative-grade debt represents 17% of European rated corporate debt as of Oct. 1, 2020, up from 16% at the beginning of the year.
  • The majority (60%) of European speculative-grade debt is in the form of bonds and notes, while loans and revolvers account for 40% of the debt.

Chart 7

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Chart 8

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  • The largest share of rated European corporate debt was rated in the 'BBB' category (with 37%, or $2.92 trillion) (see chart 9).
  • This 'BBB' category debt includes $1.9 trillion from nonfinancial companies and $1 trillion from financial services issuers.
  • European financial services companies have $860 billion in debt that is rated 'AAA', and this includes secured debt, such as covered bonds, that may be rated higher than the corresponding issuer.
  • Within speculative grade, the 'BB' rating category accounts for the largest amount of debt, at $656 billion, followed closely by the 'B' category with $542 billion (even as the 'B' category includes twice as many issuers as the 'BB' category).

Chart 9

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Table 8

European Corporate Debt By Rating And Sector
--Debt amount (bil. $)-- --Debt amount (%)--
Financial Nonfinancial Total Financial Nonfinancial Total
AAA 860.0 0.0 860.0 10.9 0.0 10.9
AA 504.7 266.5 771.1 6.4 3.4 9.8
A 1,204.5 813.4 2,017.8 15.3 10.3 25.6
BBB 1,023.6 1,897.3 2,920.8 13.0 24.0 37.0
BB 218.2 437.8 656.0 2.8 5.5 8.3
B 32.7 509.8 542.5 0.4 6.5 6.9
CCC and below 3.0 125.5 128.5 0.0 1.6 1.6
Investment-grade 3,592.7 2,977.1 6,569.8 45.5 37.7 83.2
Speculative-grade 253.8 1,073.1 1,326.9 3.2 13.6 16.8
Total 3,846.5 4,050.2 7,896.7 48.7 51.3 100.0
Data as of Oct. 1, 2020. Source: S&P Global Ratings Research.

By nonfinancial corporate sector, European sectors with the most debt are:

  • Rated corporate debt: consumer products ($573.5 billion), utilities ($567.1 billion), and telecommunications ($508.4 billion) (see table 9);
  • Investment-grade-rated corporate debt: utilities ($531.5 billion), consumer products ($460.2 billion), and health care ($305 billion); and
  • Speculative-grade-rated corporate debt: telecommunications ($221.7 billion), media and entertainment ($117.1 billion), and consumer products ($113.3 billion).

Table 9

European Corporate Debt Amounts By Rating Grade And Sector
(Bil. $) Investment grade Speculative grade Total
Financials 3,592.7 253.8 3,846.5
Financial institutions 3,369.9 252.2 3,622.2
Insurance 222.8 1.6 224.3
Nonfinancials 2,977.1 1,073.1 4,050.2
Aerospace and defense 24.5 13.8 38.3
Auto 242.1 76.9 319.0
Capital goods 94.7 47.0 141.7
Consumer products 460.2 113.3 573.5
Chemicals, packaging, and environmental services 104.8 88.5 193.3
Forest products and building materials 82.1 23.8 105.9
Health care 305.0 108.7 413.7
High technology 52.7 69.7 122.4
Homebuilders/real estate cos. 163.8 11.5 175.3
Media and entertainment 70.7 117.1 187.8
Metals, mining, and steel 70.3 15.6 85.8
Oil and gas 292.2 41.6 333.8
Retail/restaurants 45.2 49.6 94.9
Telecommunications 286.7 221.7 508.4
Transportation 150.7 38.7 189.3
Utility 531.5 35.6 567.1
Total 6,569.8 1,326.9 7,896.7
Data as of Oct. 1, 2020. Includes bonds, notes, loans, and revolving credit facilities rated by S&P Global Ratings. Excludes debt instruments that do not have a global scale rating. Foreign currencies are converted to U.S. dollars at the exchange rate on close of business on Oct. 1, 2020. Source: S&P Global Ratings.

By debt type, bonds and notes account for the majority of European corporate debt, while loans and revolving credit facilities are highly concentrated among speculative-grade and nonfinancial companies:

  • Bonds and notes remain the predominant funding source for speculative-grade nonfinancials in Europe, at 51% of rated debt (unchanged from the beginning of the year) (see table 10).
  • Close to one-fifth of rated nonfinancial sector corporate debt in Europe was in the form of loans and revolvers.
  • As of Oct. 1, 2020, European nonfinancial companies had $119.9 billion in revolving credit facilities that were rated (including both drawn and undrawn facilities), and $49.9 billion of this is speculative grade.
  • Speculative-grade-rated nonfinancial sector corporate debt had a larger proportion of loans and revolvers (49%) than investment grade (8%).

Table 10

Rated European Corporate Debt Amounts By Instrument Type
(Bil. $) Investment grade Speculative grade Total
Financial debt
Revolver 0.0 0.2 0.2
Term loan 0.4 3.5 3.9
Loan/revolver total 0.4 3.7 4.1
Senior secured 814.9 9.5 824.4
Senior unsecured 1,935.7 10.7 1,946.4
Subordinated 762.0 107.3 869.3
Preferred/other 79.7 122.6 202.3
Bond/note total 3,592.3 250.1 3,842.4
Financial total 3,592.7 253.8 3,846.5
Nonfinancial debt
Revolver 70.0 49.9 119.9
Term loan 178.4 477.4 655.8
Loan/revolver total 248.4 527.3 775.6
Senior secured 66.1 176.7 242.8
Senior unsecured 2,573.8 302.4 2,876.2
Subordinated 37.5 38.6 76.1
Preferred/other 51.3 28.1 79.5
Bond/note total 2,728.7 545.8 3,274.6
Nonfinancial total 2,977.1 1,073.1 4,050.2
All corporate debt
Loan/revolver total 248.7 531.0 779.8
Bond/note total 6,321.0 795.9 7,116.9
Rated debt total 6,569.8 1,326.9 7,896.7
Includes rated debt from financial and nonfinancial issuers. Data as of Oct. 1, 2020. Excludes debt instruments that do not have a global scale rating. Foreign currencies are converted to U.S. dollars at the exchange rate on close of business on Oct. 1, 2020. Source: S&P Global Ratings Research.

Appendix

Euro-denominated tables

Table 11

European Corporate Debt By Rating And Sector
-- Debt amount (bil. €) -- --Debt amount (%)--
Financial Nonfinancial Total Financial Nonfinancial Total
AAA 732.4 0.0 732.4 10.9 0.0 10.9
AA 429.8 226.9 656.7 6.4 3.4 9.8
A 1,025.7 692.7 1,718.4 15.3 10.3 25.6
BBB 871.7 1,615.7 2,487.4 13.0 24.0 37.0
BB 185.8 372.9 558.7 2.8 5.5 8.3
B 27.8 434.1 462.0 0.4 6.5 6.9
CCC and below 2.5 106.9 109.4 0.0 1.6 1.6
Investment grade 3,059.5 2,535.3 5,594.8 45.5 37.7 83.2
Speculative grade 216.2 913.9 1,130.0 3.2 13.6 16.8
Total 3,275.7 3,449.2 6,724.8 48.7 51.3 100.0
Data as of Oct. 1, 2020. Source: S&P Global Ratings Research.

Table 12

European Corporate Debt Amounts By Rating Grade And Sector
(Bil. €) Investment grade Speculative grade Total
Financials 3,059.5 216.2 3,275.7
Financial institutions 2,869.8 214.8 3,084.6
Insurance 189.7 1.3 191.0
Nonfinancials 2,535.3 913.9 3,449.2
Aerospace and defense 20.8 11.8 32.6
Auto 206.2 65.4 271.7
Capital goods 80.6 40.1 120.7
Consumer products 391.9 96.5 488.4
Chemicals, packaging, and environmental services 89.2 75.3 164.6
Forest products and building materials 69.9 20.3 90.1
Health care 259.7 92.6 352.3
High technology 44.9 59.3 104.2
Homebuilders/real estate cos. 139.5 9.8 149.3
Media and entertainment 60.2 99.7 159.9
Metals, mining, and steel 59.8 13.3 73.1
Oil and gas 248.8 35.5 284.3
Retail/restaurants 38.5 42.2 80.8
Telecommunications 244.1 188.8 432.9
Transportation 128.3 32.9 161.2
Utility 452.6 30.3 483.0
Total 5,594.8 1,130.0 6,724.8
Data as of Oct. 1, 2020. Includes bonds, notes, loans, and revolving credit facilities rated by S&P Global Ratings. Excludes debt instruments that do not have a global scale rating. Foreign currencies are converted to U.S. dollars at the exchange rate on close of business on Oct. 1, 2020. Source: S&P Global Ratings Research.

Table 13

Rated European Corporate Debt Amounts By Instrument Type
(Bil. €) Investment grade Speculative grade Total
Financial debt
Revolver 0.0 0.2 0.2
Term loan 0.3 3.0 3.3
Loan/revolver total 0.3 3.2 3.5
Senior secured 694.0 8.1 702.0
Senior unsecured 1,648.4 9.1 1,657.6
Subordinated 648.9 91.4 740.3
Preferred/other 67.9 104.4 172.2
Bond/note total 3,059.2 213.0 3,272.2
Financial total 3,059.5 216.2 3,275.7
Nonfinancial debt
Revolver 59.6 42.5 102.1
Term loan 151.9 406.5 558.5
Loan/revolver total 211.5 449.0 660.5
Senior secured 56.3 150.5 206.8
Senior unsecured 2,191.8 257.5 2,449.3
Subordinated 31.9 32.9 64.8
Preferred/other 43.7 24.0 67.7
Bond/note total 2,323.8 464.8 2,788.6
Nonfinancial total 2,535.3 913.9 3,449.2
All corporate debt
Loan/revolver total 211.8 452.2 664.0
Bond/note total 5,383.0 677.8 6,060.8
Rated debt total 5,594.8 1,130.0 6,724.8
Includes rated debt from financial and nonfinancial issuers. Data as of Oct. 1, 2020. Excludes debt instruments that do not have a global scale rating. Source: S&P Global Ratings Research.
Rating distribution by issuer count

Chart 10

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Chart 11

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Chart 12

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Data Methodology

For this report, we analyzed the amount of financial and nonfinancial corporate debt rated by S&P Global Ratings.

We included the rated debt of all parent companies and their foreign subsidiaries in each region. We counted the debt of all of these companies regardless of the currency or market in which the debt was issued. We converted any non-U.S.-dollar-denominated debt to U.S. dollars based on the end-of-day exchange rates on Oct. 1, 2020.

The issue types covered are loans, revolving credit facilities, bank notes, bonds, debentures, convertible bonds, covered bonds, intermediate notes, medium-term notes, index-linked notes, equipment pass-through certificates, and preferred stock. In the case of revolving credit facilities, the amount usually represents the original facility limit, not necessarily the amount that has been drawn. Debt amounts are tallied as the face value of outstanding rated debt instruments. We exclude individual issues that are not currently rated at the instrument level, as well as instruments from issuers that are currently rated 'D' (default) or 'SD' (selective default).

We aggregated the data by issue-level credit rating. We also aggregated sector-specific data according to the subsector of the issuer. The financial services sector is defined as all banks, brokers, insurance companies, asset managers, mortgage companies, and other financial institutions. We aggregated debt issued by financial arms of nonfinancial companies with the sector of the corporate parent.

For this study, we aggregated the amount of rated corporate debt among four regions.

U.S. and tax havens:  U.S., Bermuda, and the Cayman Islands

Other developed:  Australia, Canada, Japan, and New Zealand

Europe:  Austria, Belgium, British Virgin Islands, Bulgaria, Channel Islands, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Guernsey, Hungary, Iceland, Ireland, Isle of Man, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, and the U.K.

Emerging markets:  Argentina, Armenia, Aruba, Azerbaijan, Bahamas, Bahrain, Bangladesh, Barbados, Belarus, Belize, Bolivia, Bosnia-Herzegovina, Brazil, Brunei Darussalam, Cambodia, Chile, China, Colombia, Costa Rica, Curacao, Dominican Republic, Egypt, El Salvador, Fiji, Gabon, Georgia, Ghana, Grenada, Guatemala, Honduras, Hong Kong, India, Indonesia, Israel, Jamaica, Jordan, Kazakhstan, Korea (Republic of), Kuwait, Lebanon, Liberia, Macao, Malaysia, Marshall Islands, Mauritius, Mexico, Mongolia, Morocco, Namibia, Netherlands Antilles, Nigeria, Oman, Pakistan, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Qatar, Russian Federation, Saudi Arabia, Singapore, South Africa, Sri Lanka, Syrian Arab Republic, Taiwan, Thailand, Togo, Trinidad and Tobago, Tunisia, Turkey, Turks and Caicos Islands, Ukraine, United Arab Emirates, Uruguay, Uzbekistan, Venezuela, and Vietnam

Related Research

This report does not constitute a rating action.

Ratings Performance Analytics:Nick W Kraemer, FRM, New York (1) 212-438-1698;
nick.kraemer@spglobal.com
Evan M Gunter, New York (1) 212-438-6412;
evan.gunter@spglobal.com
Jon Palmer, CFA, New York;
jon.palmer@spglobal.com
Research Contributor:Abhik Debnath, CRISIL Global Analytical Center, an S&P Global Ratings affiliate, Mumbai

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