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Default, Transition, and Recovery: Corporate Defaults Fall Slightly From Record Highs In The Third Quarter

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Credit Trends: Risky Credits: U.S. And Canadian Upgrades Outpace Downgrades In 'CCC' Category As Issuers Access Debt

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Credit Trends: Review Of Ratings Performance Highlights Resilience In 2020

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Default, Transition, and Recovery: Revenue Pressures Continue To Weigh On Consumer-Related Weakest Links

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Default, Transition, and Recovery: Two European Corporate Defaults Push The 2021 Global Tally To 11


Default, Transition, and Recovery: Corporate Defaults Fall Slightly From Record Highs In The Third Quarter

Globally, 51 companies S&P Global Ratings rated as of June 1, 2020, defaulted by the end of the third quarter, down from 88 rated defaults in the second quarter (see table 1). Defaults were concentrated in the U.S. region (which includes tax havens) with 31, down from 57, followed by Europe with 13 (up from 12), and emerging markets, with seven (down from 11). There were no defaults in the other developed region (which includes Australia, Canada, Japan, and New Zealand), down from eight. The global third-quarter default rate was 0.72%, down from 1.23% in the second quarter of 2020 (see table 1).

Table 1

Quarterly Global Corporate Default Summary For The Last Five Years
Quarter Total defaults* Investment-grade defaults Speculative-grade defaults Default rate (%) Investment-grade default rate (%) Speculative-grade default rate (%) Total debt defaulting (bil. $)
2020Q3 57 51 0.72 0.00 1.45 78.7
2020Q2 93 88 1.23 0.00 2.45 151.4
2020Q1 31 30 0.42 0.00 0.84 38.9
2019Q4 34 30 0.42 0.00 0.83 65.5
2019Q3 21 18 0.25 0.00 0.50 36.3
2019Q2 34 26 0.36 0.00 0.73 29.0
2019Q1 29 2 24 0.36 0.06 0.66 52.4
2018Q4 21 17 0.24 0.00 0.47 18.7
2018Q3 13 12 0.17 0.00 0.34 28.3
2018Q2 22 20 0.28 0.00 0.58 36.9
2018Q1 26 26 0.37 0.00 0.76 47.7
2017Q4 24 23 0.33 0.00 0.68 52.6
2017Q3 15 15 0.22 0.00 0.45 13.2
2017Q2 32 26 0.38 0.00 0.78 26.1
2017Q1 24 19 0.28 0.00 0.57 12.7
2016Q4 32 1 29 0.44 0.03 0.87 49.6
2016Q3 37 35 0.51 0.00 1.06 31.1
2016Q2 57 51 0.75 0.00 1.54 101.7
2016Q1 37 36 0.52 0.00 1.07 57.4
2015Q4 31 29 0.42 0.00 0.85 32.0
2015Q3 23 19 0.27 0.00 0.56 22.1
2015Q2 34 29 0.42 0.00 0.85 36.0
2015Q1 25 22 0.32 0.00 0.65 20.2
2014Q4 16 13 0.19 0.00 0.39 13.9
2014Q3 18 16 0.24 0.00 0.49 15.7
2014Q2 14 10 0.15 0.00 0.32 52.5
2014Q1 12 10 0.15 0.00 0.32 9.5
2013Q4 20 18 0.28 0.00 0.59 17.9
2013Q3 13 8 0.13 0.00 0.27 11.3
2013Q2 23 19 0.31 0.00 0.67 11.9
2013Q1 25 22 0.36 0.00 0.79 56.2
2012Q4 21 18 0.30 0.00 0.67 16.3
2012Q3 17 13 0.22 0.00 0.49 5.4
2012Q2 17 14 0.24 0.00 0.54 16.7
2012Q1 28 24 0.41 0.00 0.94 19.7
*This column includes companies that were at the start of the year in which they defaulted. Data as of Sept. 30, 2020. Source: S&P Global Ratings Research.

Defaults Drop From Record Levels To Just Very High

The most recent 12-month static pool, consisting of ratings as of Oct. 1, 2019, shows a very high level of defaults, especially among the lowest rated issuers (see table 2). Of the 'CCC/C' ratings observed in this cohort, 47.6% defaulted by Sept. 30, 2020, much higher than the long-term weighted average of 27.2%, and close to the maximum default rate for 'CCC/C' of 52.3%, in November 2009. Other rating categories have fared in line with their historical averages, with 'B' rated issuers defaulting 3.3% of the time compared to 3.4% over the long term, and 'BB' rated issuers defaulted 0.7% of the time, the same as the long term average. No investment-grade entities defaulted in the last six quarters.

Table 2

Descriptive Statistics On 1-Year Global Default Rates
AAA AA A BBB BB B CCC/C
Most recent 12-month static pool (10/01/2019) 0.0 0.0 0.0 0.0 0.7 3.3 47.6
Weighted long-term average 0.0 0.0 0.0 0.2 0.7 3.4 27.2
Difference between last four quarters and average 0.0 (0.0) (0.0) (0.2) 0.0 (0.1) 20.4
Min 0.0 0.0 0.0 0.0 0.0 0.3 0.0
Max 0.0 0.4 0.5 1.0 5.1 16.0 52.3
Median 0.0 0.0 0.0 0.1 0.5 3.2 24.9
Standard deviation 0.0 0.1 0.1 0.2 1.1 3.4 10.7
Skewness 0.0 5.3 2.0 1.3 1.8 1.3 0.2
Kurtosis 0.0 28.1 3.5 1.0 3.1 1.3 (0.4)
# of standard deviations (0.3) (0.5) (0.7) 0.0 (0.0) 1.9
2008 default rates 0.0 0.4 0.4 0.5 0.8 4.1 27.3
Data through Sept. 30, 2020, Source: S&P Global Ratings Research.

The U.S. and tax havens accounted for 31 of the 51 rated defaults in the third quarter (see chart 1), as well as 62.2% of defaulting debt (see chart 2). The 31 rated defaults were down from 57 in the second quarter of 2020 and up from 11 in the third quarter of 2019. Emerging markets and Europe had 13 and seven defaults, respectively, while there were no defaults from other developed countries (Australia, Canada, Japan, and New Zealand) (see chart 3).

Chart 1

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Chart 2

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Chart 3

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Regional And Sector Default Trends

The energy and natural resources sector had the most public defaults in the third quarter with 18, followed by consumer/services with 13 and leisure and entertainment with six (see table 3). The three largest defaults by outstanding debt amount in the third quarter were all in the energy and natural resources sector: Swiss offshore drilling company Transocean Ltd. and two U.S. based companies, California Resources Corp. and Texas-based Denbury Resources Inc. These defaults alone account for a third of all defaulting debt in the third quarter.

Table 3

Global Defaults: Third-Quarter 2020
Default date Company Country Industry Rated debt amount (mil. US$) Default type
7/1/2020 California Resources Corp. U.S. Energy and Natural Resources 8,429.0 Missed Interest
7/1/2020

Grupo Aeromexico S.A.B. de C.V.

Mexico Transportation 400.0 Chapter 11
7/1/2020

Grupo Posadas S.A.B. de C.V.

Mexico Leisure Time/Media 400.0 Missed Interest
7/2/2020 Denbury Resources Inc. U.S. Energy and Natural Resources 8,169.8 Missed Interest
7/2/2020 Lonestar Resources U.S. Inc. U.S. Energy and Natural Resources 250.0 Missed Interest
7/2/2020

Tailored Brands Inc.

U.S. Consumer/Service Sector 1,500.0 Missed Interest
7/8/2020

PT Modernland Realty Tbk.

Indonesia Real Estate 390.0 Missed Interest
7/10/2020

Tupperware Brands Corp.

U.S. Consumer/Service Sector 600.0 Distressed Exchange
7/13/2020 Hi- Crush Inc. U.S. Energy and Natural Resources 450.0 Chapter 11
7/16/2020 Chaparral Energy Inc. U.S. Energy and Natural Resources 300.0 Missed Interest
7/17/2020 Bruin E&P Partners LLC U.S. Energy and Natural Resources 600.0 Chapter 11
7/17/2020 Noble Corp. PLC U.K. Energy and Natural Resources 5,200.0 Missed Interest
7/17/2020

Seadrill Partners LLC

Marshall Islands Energy and Natural Resources 2,900.0 Missed Interest
7/20/2020

Renfro Corp.

U.S. Consumer/Service Sector 230.1 Distressed Exchange
7/22/2020

Global Eagle Entertainment Inc.

U.S. Telecommunications 585.0 Chapter 11
7/23/2020

Ascena Retail Group Inc.

U.S. Consumer/Service Sector 1,800.0 Chapter 11
7/23/2020 Lakeland Holdings LLC U.S. Leisure Time/Media 655.0 Chapter 11
7/27/2020

Party City Holdings Inc.

U.S. Consumer/Service Sector 2,223.0 Distressed Exchange
7/28/2020 CB Poly Investments LLC U.S. Consumer/Service Sector 917.0 Distressed Exchange
7/28/2020

Never Slip Topco Inc.

U.S. Consumer/Service Sector 283.0 Distressed Exchange
7/30/2020

Missouri TopCo Ltd.

U.K. Consumer/Service Sector 593.2 Distressed Exchange
7/30/2020 Mood Media Corp. U.S. Leisure Time/Media 0.0 Chapter 11
7/30/2020

Nostrum Oil and Gas PLC

U.K. Energy and Natural Resources 2,085.0 Missed Interest
8/3/2020

AMC Entertainment Holdings Inc.

U.S. Leisure Time/Media 6,707.5 Distressed Exchange
8/4/2020 Forum Energy Technologies Inc. U.S. Energy and Natural Resources 715.5 Distressed Exchange
8/6/2020 PIZZAEXPRESS FINANCING 1 PLC U.K. Consumer/Service Sector 874.1 Missed Interest
8/6/2020

Transocean Ltd.

Switzerland Energy and Natural Resources 11,006.0 Distressed Exchange
8/10/2020 UTEX Industries Inc. U.S. Energy and Natural Resources 742.0 Missed Interest
8/14/2020

Martin Midstream Partners L.P.

U.S. Energy and Natural Resources 745.7 Distressed Exchange
8/19/2020 Omnimax International Inc. U.S. Forest & Building Products/Homebuilders 385.0 Missed Principal
8/21/2020

Northwest Hardwoods Inc.

U.S. Forest & Building Products/Homebuilders 435.0 Missed Interest
8/24/2020

KCIBT Holdings LP

U.S. Consumer/Service Sector 600.0 Distressed Exchange
8/26/2020 Town Sports International Holdings Inc. U.S. Leisure Time/Media 340.0 Missed Principal
8/27/2020 SAExploration Holdings Inc. U.S. Energy and Natural Resources 0.0 Chapter 11
8/30/2020 Shiloh Industries Inc. U.S. Aerospace/Automotive/Capital Goods/Metal 0.0 Chapter 11
9/4/2020

Boardriders Inc.

U.S. Consumer/Service Sector 861.0 Distressed Exchange
9/4/2020

Premier Brands Group Holdings LLC

U.S. Consumer/Service Sector 325.0 Missed Principal
9/9/2020 MAI Holdings Inc. U.S. Aerospace/Automotive/Capital Goods/Metal 135.0 Distressed Exchange
9/9/2020

Swissport Group S.a.r.l

Luxembourg Transportation 1,868.5 Distressed Exchange
9/10/2020

iQor Holdings Inc.

U.S. Telecommunications 820.0 Chapter 11
9/15/2020

Distribuidora Internacional de Alimentacion S.A.

Spain Consumer/Service Sector 710.9 Distressed Exchange
9/18/2020 Oasis Petroleum Inc. U.S. Energy and Natural Resources 2,475.0 Missed Interest
9/21/2020

PGS ASA

Norway Energy and Natural Resources 0.0 Missed Interest
9/23/2020 FTS International Inc. U.S. Energy and Natural Resources 1,050.0 Chapter 11
9/23/2020

Technicolor S.A.

France High Tech/Computers/Office Equipment 1,674.6 Distressed Exchange
9/24/2020

Garrett Motion Inc.

U.S. Aerospace/Automotive/Capital Goods/Metal 2,157.1 Chapter 11
9/25/2020 Summit Midstream Partners LP U.S. Energy and Natural Resources 1,100.0 Distressed Exchange
9/28/2020

Cassini SAS

France Leisure Time/Media 767.0 Foreign Bankruptcy

Globally, the trailing-three-month speculative-grade default rate stood at 1.45% as of Sept. 30, 2020, down from 2.45 % in the second quarter (see chart 4). The U.S. default rate dropped to 1.70% from 3.05% while the European default rate rose to 1.80% from 1.66%, and the emerging markets default fell to 0.83%% at the end of the third quarter from 1.29% through the end of the second quarter.

The trailing-three-month default rates provide a more current picture of default trends than our trailing-12-month rates, since the trailing-three-month default rates are not unduly influenced by more distant periods of unusual calm or stress in corporate credit markets.

Chart 4

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The global trailing-12-month speculative-grade default rate was 5.15% as of Sept. 30, 2020, up from 4.38% at the end of the second quarter (see chart 5). The U.S. trailing-12-month default rate rose to 6.32% from 5.40%, the European rate rose to 4.35% from 3.36%, and the emerging markets rate rose to 3.23% from 2.84% in the same period.

Chart 5

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The U.S. energy and natural resources sector had a default rate of 13.85% in the 12 months ending Sept. 30 (up from 11.76% in the 12 months ended June 30). The region/sector combination raced ahead of both non-U.S. energy and natural resource defaults (8.23%, up from 6.13%), as well as other U.S. sectors (5.45%, up from 4.63%).

Chart 6

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Downgrades And Upgrades Move Closer While Defaults Are Still Elevated

Downgrades fell to 3% in the third quarter, from a very high level of 10.7% in the second quarter (see table 4). Upgrades rose as well, to 1.1% from 0.4% in the second quarter, and the default rate fell to 0.72% from 1.23%, another very high number. The rate of unchanged ratings returned to a more normal range, with 93.7% of ratings staying the same in the quarter, up from 85.9% in the second quarter. The downgrade-to-upgrade ratio is more in line with historical averages, at 2.79 downgrades to every upgrade. The trailing-four-quarter average of upgrades fell to 1% from 2% in the previous quarter, while downgrades rose to 6.4% from 2.9% in the previous four quarters.

Table 4

Quarterly Global Corporate Rating Actions Summary For The Last Five Years
Quarter Issuers Upgrades (%) Downgrades¶ (%) Defaults (%) Withdrawn ratings (%) Changed ratings (%) Unchanged ratings (%) Downgrade/upgrade ratio
2020Q3 7,066 1.1 3.0 0.72 1.5 6.3 93.7 2.79
2020Q2 7,162 0.4 10.7 1.23 1.9 14.1 85.9 28.33
2020Q1 7,199 0.9 8.8 0.42 2.1 12.3 87.7 9.91
2019Q4 7,189 1.5 3.3 0.42 2.0 7.2 92.8 2.15
2019Q3 7,202 1.7 3.4 0.25 2.0 7.4 92.6 2.01
2019Q2 7,171 2.3 2.5 0.36 1.8 7.0 93.0 1.05
2019Q1 7,221 1.4 2.7 0.36 2.3 6.7 93.3 1.96
2018Q4 7,188 2.4 3.1 0.24 2.0 7.8 92.2 1.30
2018Q3 7,116 2.3 2.4 0.17 2.2 7.0 93.0 1.06
2018Q2 7,027 2.5 2.6 0.28 2.2 7.7 92.3 1.02
2018Q1 6,954 2.5 2.8 0.37 1.7 7.4 92.6 1.13
2017Q4 6,921 2.7 3.3 0.33 2.3 8.7 91.3 1.19
2017Q3 6,890 2.1 3.1 0.22 2.4 7.9 92.1 1.44
2017Q2 6,859 2.8 3.1 0.38 2.4 8.7 91.3 1.12
2017Q1 6,874 2.5 1.9 0.28 2.2 6.9 93.1 0.75
2016Q4 6,853 2.2 2.5 0.44 2.2 7.4 92.6 1.10
2016Q3 6,826 2.4 3.1 0.51 1.9 8.0 92.0 1.27
2016Q2 6,830 2.5 3.8 0.75 2.1 9.2 90.8 1.50
2016Q1 6,898 1.8 6.4 0.52 2.3 11.1 88.9 3.54
2015Q4 6,899 2.1 4.1 0.42 2.2 8.9 91.1 1.93
* This table compares the net change in ratings from the first to the last day of each quarter. All intermediate ratings are disregarded. ¶Excludes downgrades to 'D', shown separately in the defaults column. Data as of Sept. 30, 2020. Source: Standard & Poor's CreditPro®.

Large downgrades (those of six notches or more, not including defaults) have been rare in recent years and are down from the highs of the financial crisis (see chart 7). There has been just one large downgrade so far in 2020, U.A.E.-based health care provider NMC Health PLC to 'CCC' from 'BB'.

Chart 7

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All of the 'AAA' rated companies as of Oct. 1, 2019, were still rated 'AAA' at the end of the third quarter of 2020 (see table 5). In the past 12 months, 19 companies have moved to investment-grade (rated 'BBB-' or higher) from speculative-grade (rated 'BB+' or lower), down from 29 companies in the previous 12 months. On the other hand, 74 companies have moved to speculative-grade from investment-grade in the past 12 months, up from 23 in the previous 12 months.

Table 5

Trailing Four-Quarter Transition Rates By Region (2019 Q3 – 2020 Q3, %)
Global
AAA 100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA 0.00 89.23 8.00 0.00 0.00 0.00 0.00 0.00 2.77
A 0.00 0.00 93.00 4.17 0.07 0.00 0.00 0.00 2.76
BBB 0.00 0.00 1.35 90.37 3.57 0.38 0.00 0.00 4.33
BB 0.00 0.00 0.00 1.38 76.67 11.51 1.23 0.69 8.52
B 0.00 0.00 0.00 0.05 0.87 70.45 13.34 3.25 12.03
CCC/C 0.00 0.00 0.00 0.00 0.00 3.93 33.62 47.60 14.85
U.S.
AAA 100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA 0.00 92.54 6.72 0.00 0.00 0.00 0.00 0.00 0.75
A 0.00 0.00 94.59 3.73 0.00 0.00 0.00 0.00 1.68
BBB 0.00 0.00 2.37 90.92 2.93 0.70 0.00 0.00 3.07
BB 0.00 0.00 0.00 1.59 74.38 15.72 1.24 1.06 6.01
B 0.00 0.00 0.00 0.09 0.94 71.27 13.81 3.17 10.72
CCC/C 0.00 0.00 0.00 0.00 0.00 3.29 35.53 50.00 11.18
Europe
AAA 100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA 0.00 84.00 11.00 0.00 0.00 0.00 0.00 0.00 5.00
A 0.00 0.00 93.59 3.33 0.00 0.00 0.00 0.00 3.08
BBB 0.00 0.00 1.15 88.99 5.50 0.00 0.00 0.00 4.36
BB 0.00 0.00 0.00 2.36 73.11 8.96 2.36 0.00 13.21
B 0.00 0.00 0.00 0.00 0.23 75.29 11.67 2.29 10.53
CCC/C 0.00 0.00 0.00 0.00 0.00 7.32 29.27 48.78 14.63
Emerging markets
AAA 100.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
AA 0.00 97.73 0.00 0.00 0.00 0.00 0.00 0.00 2.27
A 0.00 0.00 90.68 6.09 0.36 0.00 0.00 0.00 2.87
BBB 0.00 0.00 0.38 89.83 4.03 0.19 0.00 0.00 5.57
BB 0.00 0.00 0.00 0.64 80.38 7.68 0.64 0.64 10.02
B 0.00 0.00 0.00 0.00 1.35 65.50 12.40 3.50 17.25
CCC/C 0.00 0.00 0.00 0.00 0.00 3.70 22.22 44.44 29.63
Data as of Sept. 30, 2020. Source: S&P Global CreditPro®.

Table 6

Global Average One-Year Transition Rates, 1981 To 2019 (%)
From / To AAA AA A BBB BB B CCC/C D NR
AAA 87.03 9.08 0.53 0.05 0.11 0.03 0.05 0.00 3.12
AA 0.49 87.23 7.73 0.48 0.05 0.06 0.02 0.02 3.91
A 0.03 1.66 88.42 5.04 0.27 0.11 0.02 0.05 4.40
BBB 0.01 0.09 3.37 86.32 3.52 0.44 0.10 0.16 5.99
BB 0.01 0.03 0.11 4.73 77.78 6.58 0.54 0.61 9.60
B 0.00 0.02 0.07 0.16 4.76 74.75 4.48 3.33 12.42
CCC/C 0.00 0.00 0.11 0.19 0.58 12.93 43.64 27.08 15.47
Data as of Sept. 30, 2020. Source: S&P Global CreditPro®.

Ratings Performance Holds

The Gini ratio, a quantitative measure of the rank-ordering power of a rating system over a given time horizon, shows an annual global Gini coefficient of 82.5% at one year, 75.2% at three years, 71.4% at five years, and 69.3% at seven years (see table 7). If the rank ordering of corporate ratings only randomly approximated default risk, the Gini coefficient would be zero. Alternatively, if corporate ratings were perfectly rank ordered so all defaults in each time frame occurred only among the lowest-rated entities, the curve would capture all of the area on the graph above the diagonal, and the Gini coefficient would be 100% (see Appendix I).

Table 7

Gini Coefficients By Region (%)
--Time horizon--
Region One-year Three-year Five-year Seven-year
Global 82.5 75.2 71.4 69.3
U.S. and tax havens 80.7 72.9 69.0 66.8
Europe* 90.3 85.2 82.6 80.0
*Europe refers to 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. Data as of Sept. 30, 2020. Source: S&P Global Ratings Research.

The data we collected from the pool of global defaulters indicates that speculative-grade defaults tend to occur in the third year after an initial rating assignment, particularly in the 'BB' and 'B' rating categories (see chart 7). For example, among defaulters that S&P Global Ratings initially rated 'B', 18.3% of defaults happened in the third year; by the end of the fourth year, 53.4% of all defaulted issuers initially rated 'B' would have defaulted. Issuers rated 'BB' at origination showed a similar pattern, but they peaked a little later, typically in the fourth year. Conversely, for defaulting entities that were initially rated 'CCC', we observed the highest default rate in the first year--not surprising, given their weaker credit profiles.

Chart 8

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For nonfinancial entities, the path to default in the seven years prior is typically gradual (see chart 9). As with the industrial companies that defaulted during the trailing 12 quarters, the median ratings on financial companies were consistently lower in the seven years leading up to default than the long-term (Jan. 1, 1981 to Sept. 30, 2020) median ratings.

While S&P Global Ratings tends to take more rating actions on defaulting financial companies than on their counterparts in the industrial sector, the frequency of defaults in the financial sector is much lower. In the past 12 quarters, 22 financial institutions or insurance companies defaulted, whereas 368 nonfinancial companies defaulted. (In charts 9-10, we do not include withdrawals.)

The rating paths of defaulters over the trailing 12 quarters depends on the sector. The median ratings on financial institutions and insurance companies that defaulted were higher roughly five to seven years before default. Afterward, the median ratings fell abruptly to considerably below their long-term levels (see chart 10). Prior to defaulting, financial companies often experience a sudden loss of investor confidence, which causes them to default more quickly than their higher-rated counterparts in the industrial sector. However, many of the issuers included in the defaulting cohort from the past 12 quarters were downgraded to speculative-grade during the financial crisis in 2008 (or shortly thereafter).

Chart 9

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Chart 10

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The average time to default (from the date of original rating) for the 57 defaulted issuers in the third quarter of 2020 (including those that were not rated at the start of the quarter) was 5.2 years, lower than the historical average of 5.9 years. All but two of the defaulters in the third quarter were initially rated speculative-grade, with two issuers with initial ratings of 'BBB' that defaulted 15.2 years on average after their initial rating.

There is a generally negative relationship between the initial rating on a defaulting issuer and the time to default (see table 8). For the entire pool of defaulters (January 1981 to September 2020), the average times to default for issuers that were originally rated in the 'A' and 'B' rating categories were 14.1 years and 5.0 years, respectively, from the time of the initial rating (or from Dec. 31, 1980, for published ratings that were current at the start date of the study regardless of the actual rating date). For issuers rated in the 'CCC/C' category, the average time to default was only 2.2 years.

In cases where an entity emerged from a previous default (including distressed exchanges), we treated the reemergence as a separate entity and designated the original rating as the first rating after the default. (The "range" column in table 8 shows the difference between each rating category's minimum and maximum time to default.)

Table 8

Time To Default From Original Rating For Global Corporate Defaulters, 1981-Sept. 30, 2020
Original rating Defaults Average years from original rating* Median years from original rating Standard deviation of years from original rating Range
AAA 8 18.0 18.5 11.4 23.0
AA 32 17.4 19.6 10.6 37.8
A 101 14.1 10.9 9.1 37.7
BBB 219 9.2 7.3 6.8 36.1
BB 644 7.0 5.3 5.8 37.8
B 1,709 5.0 3.7 4.3 30.5
CCC/C 340 2.2 1.3 2.7 17.4
Total 3,053 5.9 4.1 5.7 39.4
*Or Dec. 31, 1980, whichever is later. NR--Not rated. N/A--Not available. Source: S&P Global Ratings Research and Standard & Poor’s CreditPro® .

Tracking the time to default from subsequent ratings further supports this negative relationship between rating quality and default remoteness (see table 9). However, for the most part, times to default from subsequent ratings are shorter than for initial ratings. This is largely a result of rating changes, particularly downgrades. As an issuer approaches default, it typically experiences several rating changes in a short period.

Table 9

Time To Default From Post-Original Rating For Global Corporate Defaulters, 1981-Sept. 30, 2020
Rating path to default Average years from rating category Median years from rating category Standard deviation of years from rating category
AAA 27.4 27.7 10.0
AA 14.9 15.8 9.4
A 11.5 9.9 8.3
BBB 8.3 6.5 6.9
BB 6.1 4.2 5.8
B 3.3 1.9 3.9
CCC/C 0.9 0.3 1.6
NR 5.1 3.0 5.6
Total 3.4 1.3 4.9
NR--Not rated. N/A--Not available. Source: S&P Global Global Ratings Research; S&P Global CreditPro®

Speculative-Grade Bond Issuance Continued At A High Pace

New speculative-grade issuance in the U.S. stayed strong at $99 billion in the third quarter, only the second-highest quarterly issuance after $118 billion in the preceding quarter. Issuers rated 'BB' had $56.4 billion in new issuance, down from $79.7 billion; 'B' rated issuers had $33.7 billion, up from $31.9 billion; and 'CCC' rated issuers had $9.1 billion, up from $6.7 billion (see chart 10).

Corporate bond spreads in the 'B' and 'BB' categories further narrowed in the third quarter, with five-years spreads for 'BB' narrowing to 450 basis points (bps) from 514 bps, 'B' to 633 bps from 719 bps, and 'CCC' to 900 bps from 1,071 bps.

Chart 11

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Defaults Will Likely Increase In The U.S.

Our baseline forecast is for a forward-12-month (through September 2021) U.S. speculative-grade corporate default rate of 9% (see chart 11). To realize our mean baseline projection, a total of 165 speculative-grade issuers would need to default between October 2020 and September 2021 (see "The U.S. Speculative-Grade Corporate Default Rate Could Rise To 9% By September 2021," Nov. 23, 2020).

Chart 12

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We determine our forecast based on a variety of factors, including our proprietary default model for the U.S. speculative-grade corporate bond market. The main components of the model include economic variables, such as the unemployment rate; financial variables, such as corporate profits, the Fed's Senior Loan Officer Opinion Survey On Bank Lending Practices, the interest burden, and the slope of the yield curve; and credit-related variables, such as negative bias (the proportion of entities with negative outlooks or ratings on CreditWatch negative).

The interaction between the U.S. speculative-grade default rate and the input variables is in line with our expectations. For instance, increases in the unemployment rate and negative bias positively correlate with the speculative-grade default rate, which means that as the unemployment rate or negative bias increases, so does the default rate. We update our outlook for the U.S. corporate speculative-grade default rate each quarter after analyzing the latest economic data and expectations.

These default projections are consistent with S&P Global economists' projections. In addition to the baseline, we have one pessimistic scenario and one optimistic scenario. The pessimistic scenario yields a mean 12-month projection of 12%; a total of 220 issuers would need to default in the next 12 months to realize our pessimistic scenario. The optimistic scenario yields a mean 12-month projection of 3.5 %, meaning 64 issuers would have to default in the next 12 months.

Appendix I: Gini Methodology

To measure ratings performance, or ratings accuracy, we plot the cumulative share of issuers by rating against the cumulative share of defaulters in a Lorenz curve to show the accuracy of its rank ordering. Max O. Lorenz developed the Lorenz curve as a graphical representation of the proportionality of a distribution.

To build the Lorenz curve, we order the observations from the low end of the ratings scale ('CC') to the high end ('AAA'). If the rank ordering of S&P Global Ratings' corporate ratings only randomly approximated default risk, the curve would fall along the diagonal. Thus, the Gini coefficient (a summary statistic of the Lorenz curve) would be zero. If corporate ratings were perfectly rank ordered so that all defaults occurred only among the lowest-rated entities, the curve would capture all of the area above the diagonal on the graph, and the Gini coefficient would be 100% (see chart 12). To calculate Gini coefficients, we divide area B by the total of area A plus area B to capture the extent to which actual ratings accuracy diverges from a random scenario.

Chart 13

image

For definitions of the terms and calculations that we use in this report, see Appendix I in "2019 Annual Global Corporate Default And Rating Transition Study," published April 29, 2020.

Appendix II: Third-Quarter 2019 Defaults In Profile

In the third quarter of 2020, 57 companies, including nine confidential issuers, defaulted on US$75.455 billion of debt. This appendix provides summaries of the events leading up to each default and, in some cases, events following the default. We also include the defaulting instruments for each company that S&P Global Ratings rates.

California Resources Corp.
  • US$1.75 billion 5.50% senior notes due Sept. 15, 2021
  • US$1 billion revolver bank loan due June 30, 2021
  • US$1 billion term bank loan due June 30, 2021
  • US$2.25 billion 6.00% senior notes due Nov. 15, 2024
  • US$2.25 billion 8.00% second lien bank note due Dec. 15, 2022
  • US$1.3 billion floating rate first lien second-out term bank loan due Dec. 31, 2021
  • US$1.3 billion floating rate term B bank loan due 2022

On July 1, 2020, S&P Global Ratings downgraded its long-term issuer credit rating on California-based based oil and gas exploration and production company California Resources Corp. to 'D' from 'CC'. The issuer missed the aggregate interest payments on first, second and 1.5-lien term loans due in 2021 and 2022, which is unlikely to be paid in the 30-day grace period.

Later on Aug. 18, 2020, S&P Global Ratings had withdrawn credit ratings on the issuer.

Table 10

Issuer Credit Rating--California Resources Corp.
Date To
8/18/2020 NR/--/--
7/1/2020 D/--/--
2/24/2020 CC/Negative/--
9/9/2016 CCC+/Negative/--
8/24/2016 SD/NM/--
8/2/2016 CC/Negative/--
1/14/2016 CCC+/Negative/--
9/28/2015 BB-/Negative/--
7/15/2015 BB+/Negative/--
9/5/2014 BB+/Stable/--
Grupo Aeromexico S.A.B. de C.V.
  • US$400 million 7.00% notes due Feb. 5, 2025

On July 1, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Mexican commercial aviation services provider Grupo Aeromexico S.A.B. de C.V. to 'D' from 'B-', after the issuer filed for bankruptcy under chapter 11 of U.S. Bankruptcy Code. The company aims to restructure its' debt, capital structure and business model in order to adapt to post-Covid prospects.

Table 11

Issuer Credit Rating--Grupo Aeromexico S.A.B. de C.V.
Date To
7/1/2020 D/--/--
5/21/2020 B-/Negative/--
3/20/2020 B+/Watch Neg/--
1/24/2020 BB-/Negative/--
Grupo Posadas S.A.B. de C.V.
  • US$400 million 7.875% notes due June 30, 2022

On July 1, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Mexican lodging company Grupo Posadas S.A.B. de C.V. to 'D' from 'CC' after the issuer missed interest payment on senior unsecured notes due June 2022, which represents over 98% of total debt due, and announced it won't do it within the grace period. The decision to miss interest payments of about US$15.5 million is based on prioritization of liquidity towards its operations.

Table 12

Issuer Credit Rating--Grupo Posadas S. A. B. de C. V.
Date To
7/1/2020 D/--/--
6/26/2020 CC/Watch Neg/--
3/25/2020 CCC+/Negative/--
11/27/2019 B/Negative/--
11/30/2018 B+/Stable/--
11/27/2017 B+/Positive/--
11/29/2016 B+/Stable/--
5/3/2016 B+/Positive/--
12/21/2012 B/Stable/--
7/17/2012 CCC+/Watch Pos/--
12/27/2011 CCC+/Negative/--
5/12/2011 B-/Negative/--
11/12/2010 B-/Watch Neg/--
1/14/2010 B+/Stable/--
12/18/2009 B+/Negative/--
6/15/2009 B+/Watch Neg/--
5/8/2009 BB-/Watch Neg/--
1/7/2009 BB-/Negative/--
10/13/2008 BB-/Watch Neg/--
6/6/2007 BB/Stable/--
8/31/2006 BB-/Positive/--
2/3/2006 BB-/Stable/--
12/1/2005 BB-/Watch Neg/--
7/15/2004 BB-/Stable/--
Denbury Resources Inc.
  • US$400 million 6.375% senior notes due Aug. 15, 2021
  • US$1.2 billion 4.625% senior sub notes due July 15, 2023
  • US$1.25 billion 5.50% senior notes due May 1, 2022
  • US$3.5 billion revolving bank loan due Dec. 9, 2021
  • US$615.1 million 9.00% second lien notes due May 15, 2021
  • US$455.7 million 9.25% second lien notes due 2022
  • US$400 million second lien notes due 2024
  • US$528.026 million 7.75% second lien notes due Feb. 15, 2024
  • US$245 million senior unsecured notes due Dec. 31, 2024

On July 2, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Texas based oil and gas exploration and production company Denbury Resources Inc. to 'D' from 'CCC+', on the same day it raised the issuer credit rating to 'CCC+' from 'SD'. The issuer missed interest payment of US$8 million on its senior convertible notes due in 2024.

Later on July 30, 2020, S&P Global Ratings had withdrawn credit ratings on the issuer.

Table 13

Issuer Credit Rating--Denbury Resources Inc.
Date To
7/30/2020 NR/--/--
7/2/2020 D/--/--
7/2/2019 CCC+/Negative/--
6/19/2019 SD/NM/--
6/5/2019 CC/Negative/--
3/26/2019 CCC+/Negative/--
10/30/2018 B-/Watch Pos/--
8/14/2018 B-/Stable/--
5/23/2018 CCC+/Positive/--
2/15/2018 CCC+/Stable/--
12/11/2017 SD/NM/--
12/4/2017 CC/Negative/--
5/24/2016 CCC+/Negative/--
5/12/2016 SD/NM/--
5/4/2016 CC/Negative/--
2/9/2016 B/Negative/--
12/23/2015 BB-/Negative/--
10/2/2015 BB-/Stable/--
1/16/2015 BB/Negative/--
1/22/2013 BB/Stable/--
10/25/2012 BB/Positive/--
6/21/2010 BB/Stable/--
1/26/2009 BB/Negative/--
11/4/2005 BB/Stable/--
3/11/2004 BB-/Positive/--
5/20/2002 BB-/Stable/--
6/8/2001 B+/Positive/--
9/3/1999 B+/Stable/--
4/27/1999 B/Positive/--
8/11/1998 B/Stable/--
1/27/1998 B+/Stable/--
Lonestar Resources U.S. Inc.
  • US$250 million 11.25% senior notes due Jan. 1, 2023
  • US$500 million reserve-based revolver due Nov. 15, 2023

On July 2, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Texas-based oil and gas exploration and production company Lonestar Resources U.S. Inc. to 'D' from 'CCC-' after the issuer elected to skip interest payment on its unsecured notes due 2023, and is less likely to pay within 30-day grace period.

Later on Aug. 6, 2020, S&P Global Ratings had withdrawn its credit ratings on the issuer. The issuer is exploring other strategic alternatives as liquidity remains constrained.

Table 14

Issuer Credit Rating--Lonestar Resources U.S. Inc.
Date To
8/6/2020 NR/--/--
7/2/2020 D/--/--
4/20/2020 CCC-/Negative/--
3/18/2020 CCC+/Negative/--
8/11/2017 B-/Stable/--
Tailored Brands Inc.
  • US$600 million 7.00% senior notes due July 1, 2022
  • US$900 million floating rate term B-2 bank loan due April 9, 2025

On July 2, 2020, S&P Global Ratings lowered its long-term issuer credit rating on California-based specialty apparel retailer Tailored Brands Inc. to 'D' from 'CCC+', reflecting interest payment default on its senior notes due 2022. The company had a debt of about US$ 1.4 billion and is less likely to pay the interest within the grace period. Later the issuer commenced a chapter 11 bankruptcy and looking for restructuring of capital structure.

Table 15

Issuer Credit Rating--Tailored Brands Inc.
Date To
7/2/2020 D/--/--
3/20/2020 CCC+/Negative/--
9/25/2019 B/Negative/--
6/20/2019 B+/Negative/--
3/19/2018 B+/Stable/--
10/12/2017 B/Stable/--
2/18/2016 B/Negative/--
PT Modernland Realty Tbk.
  • US$150 million 10.75% notes due Aug. 30, 2021
  • US$240 million 6.95% notes due April 13, 2024

On July 8, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Indonesia-based property developer PT Modernland Realty Tbk. to selective default (SD) from 'CCC-', after the issuer missed principal payment on its IDR150 billion domestic notes and entered a 10-day grace period. It has other coupon payment of US$8 million each in August and October this year.

Table 16

Issuer Credit Rating--PT Modernland Realty Tbk.
Date To
7/8/2020 SD/NM/--
7/2/2020 CCC-/Watch Neg/--
6/19/2020 CCC/Negative/--
4/7/2020 B-/Watch Neg/--
8/21/2019 B/Negative/--
9/28/2018 B/Stable/--
8/13/2018 B/Negative/--
7/28/2013 B/Stable/--
Tupperware Brands Corp.
  • US$600 million 4.75% senior unsecured notes due June 1, 2021
  • US$600 million senior secured revolver due March 29, 2024

On July 10, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Florida-based consumer products manufacturer and seller Tupperware Brands Corp. to 'SD' from 'CC', after the issuer completed a distressed exchange, for about US$97.6 million of its US$600 million where noteholders received less than par value.

Later on July 13, 2020, S&P Global Ratings raised the credit ratings to 'CCC-' from 'SD', with a developing outlook, which reflects that the ratings can be raised or lowered, depending how the issuer addresses remaining debt.

Table 17

Issuer Credit Rating--Tupperware Brands Corp.
Date To
7/13/2020 CCC-/Developing/--
7/10/2020 SD/NM/--
5/27/2020 CC/Negative/--
4/6/2020 CCC+/Negative/--
2/26/2020 B/Watch Neg/--
8/15/2019 BB+/Negative/--
2/6/2019 BBB-/Negative/--
6/30/2010 BBB-/Stable/--
2/22/2010 BB+/Watch Pos/--
8/18/2008 BB+/Stable/--
6/23/2008 BB/Watch Pos/--
12/6/2005 BB/Stable/--
8/10/2005 BB+/Watch Neg/--
8/26/2004 BB+/Stable/--
12/17/2003 BB+/Negative/--
9/25/2003 BBB-/Watch Neg/--
6/6/2003 BBB-/Stable/--
7/31/2002 BBB/Negative/--
6/23/2000 BBB/Stable/--
6/14/1999 BBB/Negative/--
2/3/1999 BBB+/Watch Neg/--
1/12/1998 BBB+/Negative/--
6/19/1996 BBB+/Stable/--
Hi- Crush Inc.
  • US$450 million notes due 2026

On July 13, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Texas-based frac-sand and logistics company Hi- Crush Inc. to 'D' from 'CC', after the issuer filed for bankruptcy under chapter 11 and agreed into a restructuring support agreement with noteholders who control 94% of company's senior unsecured noted due in 2026. The company is operating at a reduced rate of utilization, production rate of 5.7 million tons per year against total nameplate capacity of 17.3 million tons per year.

Earlier on July 2, 2020, the issuer ratings were lowered to 'CC' from 'CCC+' after the issuer defaulted on its unrated asset-backed lending credit facility.

Table 18

Issuer Credit Rating--Hi- Crush Inc.
Date To
7/13/2020 D/--/--
7/2/2020 CC/Watch Neg/--
12/13/2019 CCC+/Negative/--
10/3/2019 B-/Negative/--
5/31/2018 B-/Positive/--
5/26/2017 B-/Stable/--
5/25/2016 B-/Negative/--
11/20/2015 B+/Negative/--
4/9/2014 B+/Stable/--
Chaparral Energy Inc.
  • US$300 million 8.75% senior notes due July 15, 2023
  • US$750 million reserve-based revolver exit due Dec. 21, 2022

On July 16, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Ohio-based oil and gas exploration and production company Chaparral Energy Inc. to 'D' from 'CCC-', after the issuer elected not to make interest payments of US$13.1 million due on its unsecured notes due 2023. The issuer was engaged in discussions with creditors for a debt restructuring.

Later on Aug. 17, 2020, S&P Global Ratings had withdrawn credit ratings on the issuer.

Table 19

Issuer Credit Rating--Chaparral Energy Inc.
Date To
8/17/2020 NR/--/--
7/16/2020 D/--/--
4/14/2020 CCC-/Negative/--
5/15/2019 CCC+/Negative/--
6/19/2018 B-/Stable/--
4/7/2016 NR/--/--
3/2/2016 D/--/--
2/16/2016 CCC-/Negative/--
1/21/2016 CCC+/Negative/--
10/2/2015 B-/Stable/--
1/16/2015 B/Stable/--
1/24/2014 B/Positive/--
4/14/2010 B/Stable/--
2/19/2010 CCC+/Watch Dev/--
2/9/2010 CCC+/Watch Pos/--
12/17/2009 CCC+/Negative/--
10/13/2009 CCC+/Watch Dev/--
12/19/2008 CCC+/Developing/--
11/14/2008 B/Watch Neg/--
10/24/2008 B/Watch Dev/--
7/15/2008 B/Watch Pos/--
1/10/2007 B/Stable/--
9/19/2006 B/Negative/--
11/14/2005 B+/Stable/--
Bruin E&P Partners LLC
  • US$600 million notes due 2023
  • US$300 million second-lien second term loan due March 7, 2023

On July 17, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Delaware-based oil and gas exploration and production company Bruin E&P Partners LLC to 'D' from 'CC', after the issuer filed for chapter 11 bankruptcy. The issuer aims to eliminate US$840 million of debt by using restructuring and a US$230 million debtor-in-possession (DIP) facility.

Later on Aug. 18, 2020, S&P Global Ratings had withdrawn credit ratings on the issuer.

Table 20

Issuer Credit Rating--Bruin E&P Partners LLC
Date To
8/18/2020 NR/--/--
7/17/2020 D/--/--
6/2/2020 CC/Negative/--
4/13/2020 CCC-/Negative/--
1/15/2020 CCC+/Negative/--
7/24/2019 B-/Stable/--
7/16/2018 B/Stable/--
Seadrill Partners LLC
  • US$2.9 billion term loan B bank loan due Feb. 21, 2021

On July 17, 2020 S&P Global Ratings lowered its long-term issuer credit rating on Marshall Islands-based offshore driller Seadrill Partners LLC, subsidiary of Seadrill Ltd., to 'SD' from 'CCC', after the issuer announced that it would use the 30-day grace period for interest payment. The drilling market in under stress and recent drop in oil prices and COVID-19 pandemic has further worsen the problem. The debt structure of the issuer has become unsustainable, with adjusted debt to EBITDA close to 8x in 2019.

Table 21

Issuer Credit Rating--Seadrill Partners LLC
Date To
7/17/2020 SD/--/--
11/8/2019 CCC/Negative/--
3/27/2018 CCC+/Stable/--
10/20/2016 CCC+/Negative/--
3/30/2016 B-/Watch Neg/--
12/10/2015 B/Negative/--
3/20/2015 BB-/Negative/--
6/9/2014 BB-/Stable/--
Noble Corp. PLC
  • US$400 million 6.20% senior notes due Aug. 1, 2040
  • US$500 million senior notes due Aug. 1, 2020
  • US$400 million 4.625% senior hybrid due March 1, 2021
  • US$400 million 6.05% senior hybrid due March 1, 2041
  • US$400 million 3.95% notes due March 15, 2022
  • US$500 million 5.25% notes due March 15, 2042
  • US$450 million 5.95% senior notes due April 1, 2025
  • US$400 million 6.95% senior notes due April 1, 2045
  • US$1 billion 7.75% senior notes due Jan. 15, 2024
  • US$750 million 7.875% senior notes due Feb. 1, 2026

On July 17, 2020 S&P Global Ratings lowered its long-term issuer credit rating on the U.K.-based offshore drilling contractor Noble Corp. PLC, to 'D' from 'CCC-', after the issuer missed the interest payment on 7.75% senior notes due in 2024. It is also difficult for the issuer to pay the interest in the 30-day grace period as it is pursuing a capital restructuring or bankruptcy filing. In the given macroeconomic and industry situation it will be hard for the issuer to pay all or substantially part of its obligations, which are coming due.

Table 22

Issuer Credit Rating--Noble Corp. PLC
Date To
9/14/2020 NR/--/--
7/17/2020 D/--/--
6/5/2020 CCC-/Negative/--
6/2/2020 SD/NM/--
4/17/2020 CCC-/Negative/--
9/25/2019 CCC+/Stable/--
8/31/2018 B/Negative/--
Renfro Corp.
  • US$209.9 million floating rate term loan B bank loan due March 31, 2021
  • US$20.2 million floating rate priming term bank loan due Feb. 12, 2021

On July 20, 2020, S&P Global Ratings lowered its long-term issuer credit rating on North Carolina-based sock manufacturer Renfro Corp. to 'SD' from 'CCC-', after the issuer completed a distressed exchange. The issuer borrowed US$20.2 million new term loan including US$10.1 million of priming new money and rolling up existing US$10.1 million term loan. The transaction was viewed as distressed because the issuer's operations were hit by the pandemic and also its debt was at a disadvantaged position in the secondary market.

Later on July 23, 2020, the ratings on the issuer were raised to 'CCC-' from 'SD', as the new priming loan is at a senior collateral position relative to the existing debt. The transactions was approved by 100% of its lenders and it provided the issuer with additional liquidity.

Table 23

Issuer Credit Rating--Renfro Corp.
Date To
7/23/2020 CCC-/Negative/--
7/20/2020 SD/NM/--
5/18/2020 CCC-/Negative/--
1/31/2020 CCC/Negative/--
9/17/2019 CCC+/Negative/--
10/2/2018 B/Negative/--
9/26/2017 B/Stable/--
10/30/2015 B/Negative/--
1/9/2013 B/Stable/--
10/25/2012 B/Positive/--
10/6/2010 B/Stable/--
4/22/2010 B-/Positive/--
5/18/2009 B-/Negative/--
12/11/2008 B/Watch Neg/--
9/24/2008 B/Negative/--
9/11/2006 B/Stable/--
Global Eagle Entertainment Inc.
  • US$85 million floating rate revolver bank loan due Jan. 6, 2022
  • US$500 million floating rate term bank loan due Jan. 6, 2023
  • US$82.5 million 2.75% senior unsecured convertible notes due Feb. 15, 2023

On July 22, 2020, S&P Global Ratings lowered its long-term issuer credit rating on California-based media and satellite-based connectivity provider Global Eagle Entertainment Inc. to 'D' from 'CCC-', after the issuer filed for petitions under chapter 11 of U.S. Bankruptcy code. In the proceedings, the issuer will obtain US$80 million in DIP, and if the prepackaged plan gets approved, then the issuer will emerge with US$400 million of debt.

Table 24

Issuer Credit Rating--Global Eagle Entertainment Inc.
Date To
7/22/2020 D/--/--
4/13/2020 CCC-/Negative/--
7/23/2019 CCC/Developing/--
4/11/2019 CCC/Negative/--
6/12/2018 B-/Negative/--
10/3/2017 NR/--/--
9/18/2017 B-/Watch Neg/--
6/28/2017 B/Watch Neg/--
5/11/2017 B+/Watch Neg/--
12/1/2016 B+/Stable/--
Ascena Retail Group Inc.
  • US$1.8 billion floating rate term loan bank loan due Aug. 21, 2022
  • US$500 million first lien asset-based revolver due Feb. 27, 2023

On July 23, 2020, S&P Global Ratings lowered its long-term issuer credit rating on New Jersey-based specialty apparel retailer Ascena Retail Group Inc. to 'D' from 'CCC-', after the issuer filed for bankruptcy under chapter 11 of U.S. Bankruptcy code. The issuer will continue its operations, as it has sourced at least US$150 million of new DIP term loan commitments.

The issuer also defaulted earlier this year on March 12, 2020, on distressed repurchase.

Table 25

Issuer Credit Rating--Ascena Retail Group Inc.
Date To
7/23/2020 D/--/--
3/16/2020 CCC-/Negative/--
3/12/2020 SD/NM/--
11/20/2019 CCC/Negative/--
6/19/2019 CCC+/Negative/--
4/5/2019 B-/Negative/--
3/14/2018 B/Negative/--
9/28/2017 B+/Negative/--
3/9/2017 BB-/Negative/--
6/3/2016 BB-/Stable/--
6/26/2015 BB/Stable/--
7/24/2013 NR/--/--
5/29/2013 BB-/Positive/--
5/22/2012 BB-/Stable/--
Lakeland Holdings LLC
  • US$60 million floating rate revolver bank loan due Dec. 15, 2022
  • US$35 million floating rate delayed draw term B bank loan due Dec. 15, 2024
  • US$560 million floating rate term B bank loan due Dec. 15, 2024

On July 23, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Virginia-based student educational travel provider Lakeland Holdings LLC to 'D' from 'CCC-', after the issuer filed for bankruptcy under chapter 11 of U.S. Bankruptcy code. The issuer has submitted a prepackaged plan.

Later on Sept. 28, 2020, the issuer credit rating was raised to 'CCC+' from 'D', after the issuer emerged from bankruptcy with a new capital structure comprising a priority exit facility due 2023. The current liquidity status will be adequate for the issuer if student travel resumes in mid-2021.

Table 26

Issuer Credit Rating--Lakeland Holdings LLC
Date To
9/28/2020 CCC+/Negative/--
7/23/2020 D/--/--
7/16/2020 CCC-/Negative/--
3/20/2020 CCC+/Negative/--
10/17/2019 B-/Stable/--
7/19/2018 B/Negative/--
11/28/2017 B/Stable/--
Party City Holdings Inc.
  • US$60 million floating rate revolver bank loan due Dec. 15, 2022
  • US$35 million floating rate delayed draw term B bank loan due Dec. 15, 2024
  • US$560 million floating rate term B bank loan due Dec. 15, 2024

On July 27, 2020, S&P Global Ratings lowered its long-term issuer credit rating on New York-based party goods retailer and wholesaler Party City Holdings Inc. to 'SD' from 'CC', after the issuer completed a distressed exchange, at 33.5% of par value for the debt exchanged. The status of the issuer's subsidiary Anagram International is changed to unrestricted subsidiary, which raised another US$110 million of secured debt.

Table 27

Issuer Credit Rating--Party City Holdings Inc.
Date To
7/29/2020 CCC/Negative/--
7/27/2020 SD/NM/--
5/29/2020 CC/Negative/--
3/19/2020 CCC+/Negative/--
11/15/2019 B/Negative/--
3/15/2016 B+/Stable/--
6/5/2015 B/Positive/--
5/2/2014 B/Stable/--
7/29/2013 B/Negative/--
7/9/2012 B/Stable/--
CB Poly Investments LLC
  • US$88 million floating rate ABL revolver bank loan due Aug. 16, 2021
  • US$175 million floating rate second lien term bank loan due Feb. 16, 2024
  • US$654.039 million floating rate first lien term bank loan due Aug. 16, 2023

On July 28, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Delaware-based promotional products supplier CB Poly Investments LLC to 'SD' from 'B-', after the issuer completed a distressed exchange of its second lien debt due in August 2024. The transaction reduced the company's annual interest payments by about US$ \19.25 million. The debt has been converted from cash to payment-in-kind (PIK) at LIBOR+450 for US$125 million while another US$50 million at LIBOR+1000.

Later on July 31, 2020, the issuer credit rating was raised to 'CCC+' from 'SD', on the basis of increased liquidity.

Table 28

Issuer Credit Rating--CB Poly Investments LLC
Date To
7/31/2020 CCC+/Negative/--
7/28/2020 SD/NM/--
4/2/2020 B-/Negative/--
7/27/2016 B/Stable/--
Never Slip Topco Inc.
  • US$25 million floating rate revolver bank loan due April 27, 2024
  • US$258 million floating rate first-lien term loan bank loan due April 27, 2024
  • US$100 million second-lien term loan

On July 28, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Delaware-based footwear provider Never Slip Topco Inc. to 'D' from 'CCC', after the issuer entered a distressed exchange to ammend first- and second lien credit agreements. The issuer also deferred on principal payments.

Later on Aug. 5, 2020, the issuer credit ratings were raised to 'CCC+' from 'D', as a part of transaction CCMP Capital Advisors L.P. and some other shareholders will increment their equity by US$ 20 million

Table 29

Issuer Credit Rating--Never Slip Topco Inc.
Date To
8/5/2020 CCC+/Negative/--
7/28/2020 D/--/--
10/22/2019 CCC/Negative/--
10/23/2017 CCC+/Negative/--
7/5/2017 B-/Negative/--
10/28/2016 B/Negative/--
10/30/2015 B/Stable/--
Missouri TopCo Ltd.
  • £130 million 9.50% notes due Jan. 31, 2024
  • £350 million 6.75% first lien, callable notes due Jan. 31, 2023
  • £25 million 16.50% notes due July 25, 2022
  • £50 million revolver due July 18, 2022

On July 30, 2020 S&P Global Ratings lowered its long-term issuer credit rating on the U.K.-based retailer Missouri TopCo Ltd. to 'SD' from 'CCC-', after the issuer converted its £80 million second lien notes into a PIK toggle instrument. The issuers' operating performance is stressed due to pandemic. This scheme is expected to save about £7.6 million per year in cash but the company is still facing interest payment of about £35 million and huge rent payments.

Later on Aug. 6, 2020, the issuer credit rating was upgraded to 'CCC-' from 'SD'.

Table 30

Issuer Credit Rating--Missouri TopCo Ltd.
Date To
8/6/2020 CCC-/Negative/--
7/30/2020 SD/NM/--
6/11/2020 CCC-/Negative/--
4/14/2020 CCC/Negative/--
1/26/2018 B-/Stable/--
1/15/2018 CCC+/Watch Pos/--
6/27/2017 CCC+/Stable/--
1/17/2017 CCC/Negative/--
10/14/2015 CCC+/Stable/--
6/16/2014 B-/Stable/--
1/31/2014 B-/Negative/--
2/8/2013 B-/Stable/--
1/24/2012 B/Negative/--
11/1/2011 B/Stable/--
5/9/2011 B+/Negative/--
4/4/2011 B+/Watch Neg/--
3/18/2010 B+/Stable/--
Nostrum Oil and Gas PLC
  • US$725 million 8.00% notes due July 25, 2022
  • US$400 million 7.00% bonds due Feb. 16, 2025
  • US$560 million 9.50% notes due June 25, 2033
  • US$400 million 9.50% notes due Jan. 14, 2033

On July 30, 2020, S&P Global Ratings lowered its long-term issuer credit rating on the U.K.-based oil and gas company Nostrum Oil and Gas PLC to 'SD' from 'CCC-', after the issuer announced nonpayment of interest on 2022 notes and 2025 notes and would likely use the grace period. Reduced EBITDA amid the pandemic and oil price crisis in earlier 2020 has stressed the operating performance of the issuer. The debt-to-EBITDA ratio even in the end of 2019 was about 5.9x.

Table 31

Issuer Credit Rating--Nostrum Oil and Gas PLC
Date To
7/30/2020 SD/NM/--
4/3/2020 CCC-/Negative/--
2/4/2020 CCC/Negative/--
7/3/2019 CCC+/Stable/--
11/29/2018 B-/Stable/--
11/10/2017 B/Negative/--
2/11/2016 B/Stable/--
10/5/2015 B+/Negative/--
8/2/2013 B+/Stable/--
8/10/2012 B/Positive/--
10/22/2010 B/Stable/--
10/13/2010 B-/Watch Pos/--
8/2/2010 B-/Stable/--
4/22/2010 B-/Watch Pos/--
Mood Media Corp.

On May 15, 2020, the issuer credit ratings were withdrawn at the issuer's request.

Table 32

Issuer Credit Rating--Mood Media Corp.
Date To
5/15/2020 NR/--/--
7/1/2019 CCC/Negative/--
6/28/2019 SD/NM/--
5/28/2019 CC/Negative/--
7/31/2018 CCC+/Negative/--
6/30/2017 B-/Negative/--
6/29/2017 SD/NM/--
4/18/2017 CC/Negative/--
4/17/2015 CCC+/Negative/--
4/7/2014 B-/Negative/--
4/24/2013 B-/Stable/--
10/9/2012 B/Stable/--
4/27/2012 B/Positive/--
4/6/2011 B/Stable/--
AMC Entertainment Holdings Inc.
  • US$600 million 5.75% senior sub notes due June 15, 2025
  • £500 million 6.375% senior notes due Nov. 15, 2024
  • US$595 million 5.875% senior notes due 2026
  • US$475 million 6.125% notes due May 15, 2027
  • US$225 million floating rate revolving facility bank loan due April 22, 2024
  • US$2 billion floating rate initial B-1 term bank loan due April 22, 2026
  • US$500 million 10.50% first-lien notes due April 15, 2025
  • US$1.46 billion 12.00% second-lien notes due June 15, 2026
  • US$200 million 10.50% first-lien notes due April 24, 2026
  • US$600 million 2.95% senior unsecured notes due Sept. 15, 2024
  • US$100 million first-lien senior secured revolver due Feb. 14, 2022

On Aug. 3, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Missouri-based motion picture exhibitor AMC Entertainment Holdings Inc. to 'SD' from 'CC', after the issuer completed the distressed exchange of its subordinated debt at 70%-75% of its par value. In the transaction the issuer raised another US$200 million notes due in 2026.

Later on Aug. 7, 2020, the issuer credit rating on the issuer was raised to 'CCC+' from 'SD'.

On Oct. 1, 2020, the issuer credit rating on the issuer was lowered to 'CCC-' from 'CCC+' on liquidity concerns, as the audience attendance remain weak after reopening and major release dates getting delayed.

Table 33

Issuer Credit Rating--AMC Entertainment Holdings Inc.
Date To
10/1/2020 CCC-/Negative/--
8/7/2020 CCC+/Watch Neg/--
8/3/2020 SD/NM/--
6/3/2020 CC/Negative/--
4/2/2020 CCC-/Negative/--
3/16/2020 B/Watch Neg/--
8/7/2018 B/Stable/--
8/21/2017 B+/Negative/--
3/13/2017 B+/Stable/--
1/24/2017 B+/Watch Neg/--
10/21/2016 B+/Stable/--
3/7/2016 B+/Watch Neg/--
3/10/2015 B+/Stable/--
10/17/2012 B/Stable/--
5/21/2012 B/Watch Dev/--
6/8/2007 B/Stable/--
Forum Energy Technologies Inc.
  • US$400 million 6.25% notes due Oct. 1, 2021
  • US$315.5 million 9.00% convertible notes due Aug. 4, 2025
  • US$300 million first lien guaranteed senior secured due July 1, 2021

On Aug. 4, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Texas-based oilfield products and services provider Forum Energy Technologies Inc. to 'SD' from 'CC', after the issuer completed the distressed exchange of its 6.25% senior unsecured notes due in Oct. 2021. The new notes will carry 9% interest, of which 6.25% is paid in cash, with the remaining in cash or additional notes. The issuer is looking for alternative strategies, including potential bankruptcy.

Later on Aug. 19, 2020, the issuer credit rating was raised to 'CCC+' from 'SD', as the equity conversion right with the issuer will help them in lowering of debt levels, if the stock price recovers.

Table 34

Issuer Credit Rating--Forum Energy Technologies Inc.
Date To
8/19/2020 CCC+/Negative/--
8/4/2020 SD/NM/--
7/7/2020 CC/Negative/--
6/18/2020 CCC-/Negative/--
5/15/2020 SD/NM/--
4/15/2020 CC/Negative/--
4/3/2020 CCC/Negative/--
8/28/2019 B-/Negative/--
6/11/2019 B/Negative/--
3/7/2018 B/Stable/--
5/19/2016 B/Negative/--
2/29/2016 B+/Stable/--
9/25/2013 BB/Stable/--
PIZZAEXPRESS FINANCING 1 PLC
  • £200 million 8.625% notes due Aug. 1, 2022
  • £465 million 6.625% notes due Aug. 1, 2021

On Aug. 6, 2020, S&P Global Ratings lowered its long-term issuer credit rating on the U.K.-based pizza restaurants operator PIZZAEXPRESS FINANCING 1 PLC to 'D' from 'CC', after the issuer opted for nonpayment of interests on it secured and unsecured notes. The issuer also conveyed that it has entered into a lock-up agreement with its senior secured lenders and is in talks of a restructuring plan. The issuer is also planning to sale its mainland China operations.

Table 35

Issuer Credit Rating--PIZZAEXPRESS FINANCING 1 PLC
Date To
8/6/2020 D/--/--
5/6/2020 CC/Negative/--
3/26/2020 CC/Watch Neg/--
12/17/2019 CCC-/Negative/--
12/13/2019 SD/NM/--
11/11/2019 CCC-/Watch Neg/--
9/24/2019 CCC+/Negative/--
9/27/2018 CCC+/Stable/--
9/18/2017 B-/Stable/--
11/3/2014 B/Stable/--
Transocean Ltd.
  • US$100 million 7.45% notes due April 15, 2027
  • US$200 million 8.00% deb due April 15, 2027
  • US$600 million 7.50% senior notes due April 15, 2031
  • US$0 million 6.80% senior notes due March 15, 2038
  • US$900 million 6.50% senior notes due Nov. 15, 2020
  • US$1.2 billion 6.375% senior notes due 2021
  • US$300 million 7.35% senior notes due 2041
  • US$750 million variable/fixed rate senior unsecured notes due Oct. 15, 2022
  • US$1.25 billion 9.00% senior notes due 2023
  • US$750 million notes due 2026
  • US$1.36 billion floating rate revolving bank ln due June 22, 2023
  • US$750 million 7.25% senior notes due Dec. 31, 2025
  • US$750 million senior notes due 2027
  • US$300 million 7.00% notes due June 1, 2028
  • US$600 million 7.75% senior secured notes due Oct. 15, 2024
  • US$625 million 6.25% senior notes due Dec. 1, 2024
  • US$750 million 5.875% notes due Jan. 15, 2024
  • US$600 million 6.125% notes due Aug. 1, 2025
  • US$550 million 6.875% notes due Feb. 1, 2027
  • US$500 million 5.375% notes due May 15, 2023
  • US$863.179 million senior unsecured convertible notes due Jan. 30, 2023
  • US$237.993 million senior unsecured convertible notes due Jan. 30, 2027

On Aug. 6, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Switzerland-based offshore drilling contractor Transocean Ltd. to 'SD' from 'CCC', after the issuer opted maturity and for an exchange of US$356 million due in 2023 for US$ 213 million new debt at a higher interest rate. This transaction of extending the maturity date and 40% discount at par which are not healthy sign for the operational performance of the business.

Later on Sept. 28, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC-' from 'SD'.

Table 36

Issuer Credit Rating--Transocean Ltd.
Date To
9/28/2020 CCC-/Negative/--
8/6/2020 SD/NM/--
4/20/2020 CCC/Negative/--
9/25/2019 CCC+/Negative/--
8/30/2018 B-/Negative/--
UTEX Industries Inc.
  • US$542 million floating rate first lien term bank loan due May 24, 2021
  • US$200 million second lien term bank loan due May 23, 2022

On Aug. 10, 2020, S&P Global Ratings lowered its long-term issuer credit rating on New York-based oil field service and drilling service provider UTEX Industries Inc. to 'D' from 'CCC', after the issuer opted for missing interest payment on its first-lien and second-lien notes. Low demand, weak macroeconomic performance, and the pandemic has led to weakening liquidity and performance.

Later on Sept. 16, 2020, S&P Global Ratings withdrew the issuer credit rating at the issuer's request.

Table 37

Issuer Credit Rating--UTEX Industries Inc.
Date To
9/16/2020 NR/--/--
8/10/2020 D/--/--
10/16/2019 CCC/Negative/--
4/26/2018 CCC+/Stable/--
4/18/2017 CCC+/Negative/--
11/12/2015 CCC+/Stable/--
4/15/2015 B-/Stable/--
12/22/2014 B/Negative/--
3/22/2013 B/Stable/--
Martin Midstream Partners L.P.
  • US$400 million 7.25% notes due Feb. 15, 2021
  • US$291.97 million 11.50% second lien notes due Feb. 28, 2025
  • US$53.75 million 10.00% first lien notes due Feb. 29, 2024

On Aug. 14, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Texas-based midstream energy company Martin Midstream Partners L.P. to 'SD' from 'CC', after the issuer announced the completion of distressed exchange of US$364.5 million senior unsecured notes due in 2021. This transaction brought the remaining principal balance to US$29 million.

Later on Aug. 26, 2020, S&P Global Ratings raised the credit rating to 'B-' from 'SD'. We are expecting that the issuer will be able to generate sufficient cash for debt repayment, though the times are challenging.

Table 38

Issuer Credit Rating--Martin Midstream Partners L.P.
Date To
8/26/2020 B-/Negative/--
8/14/2020 SD/NM/--
7/10/2020 CC/Negative/--
3/20/2020 CCC-/Negative/--
12/24/2019 B-/Developing/--
8/5/2019 B/Stable/--
3/28/2019 B/Negative/--
10/21/2016 B/Stable/--
12/18/2014 B+/Negative/--
8/11/2014 B+/Watch Neg/--
8/15/2013 B+/Stable/--
10/3/2012 B+/Negative/--
6/19/2012 B+/Stable/--
9/21/2011 B+/Negative/--
3/17/2010 B+/Stable/--
Omnimax International Inc.
  • US$385 million 12.00% notes due 2020
  • US$127.5 million guaranteed senior unsecured PIK term loan due Feb. 28, 2021

On Aug. 19, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Georgia-based building products producer Omnimax International Inc. to 'D' from 'CCC-', after the issuer announced that it had missed the principal repayment due on its US$385 million senior notes. This act is classified as general default as the issuer has not paid substantial amount of its obligations.

Table 39

Issuer Credit Rating--Omnimax International Inc.
Date To
8/19/2020 D/--/--
3/3/2020 CCC-/Watch Neg/--
9/4/2019 CCC/Negative/--
7/26/2019 CCC+/Watch Neg/--
8/12/2015 B-/Stable/--
7/23/2015 CCC/Watch Dev/--
3/25/2015 CCC/Developing/--
7/29/2014 B-/Negative/--
3/12/2010 B-/Stable/--
7/28/2009 B-/Negative/--
7/14/2009 D/--/--
4/1/2009 CC/Negative/--
10/8/2008 CCC+/Negative/--
12/11/2007 B-/Negative/--
5/1/2007 B/Negative/--
9/22/2006 B/Stable/--
6/14/2005 B+/Negative/--
4/15/2005 BB-/Watch Neg/--
9/24/2004 BB-/Stable/--
7/23/2003 BB-/Negative/--
9/12/2002 BB-/Stable/--
8/11/1997 BB-/Negative/--
9/4/1996 BB-/Stable/--
Northwest Hardwoods Inc.
  • US$435 mil 7.50% senior secured notes due Aug. 1, 2021

On Aug. 21, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Virginia-based Washington-based building materials supplier and manufacturer Northwest Hardwoods Inc. to 'SD' from 'CCC-', after the issuer elected not to pay interest on its 2021 senior secured notes. The issuer is also looking for restructuring to tackle the present pandemic situation.

Table 40

Issuer Credit Rating--Northwest Hardwoods Inc.
Date To
8/21/2020 SD/NM/--
4/16/2020 CCC-/Negative/--
6/24/2019 CCC/Negative/--
2/15/2019 CCC+/Negative/--
6/26/2018 B-/Stable/--
6/23/2017 B-/Negative/--
7/9/2014 B/Stable/--
KCIBT Holdings L.P.
  • US$395 million floating rate first-lien term loan B bank loan due June 1, 2024
  • US$140 million floating rate second-lien term bank loan due June 1, 2025
  • US$65 million floating rate first-lien revolving bank loan due June 1, 2022

On Aug. 26, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Virginia-based travel assistance provider KCIBT Holdings L.P. to 'SD' from 'CCC+', after the issuer deferred on cash interest payment on the second-lien term loan. The issuer also amended the terms of its first- and second-lien credit agreements to extend the maturity of revolving credit and temporary allowing itself to make partial PIK interest payments. This transactions has increased the available liquidity with the issuer and reduced cash interest for short term.

Later on Aug. 26, 2020, we raised the credit rating to 'CCC' from 'SD'.

Table 41

Issuer Credit Rating--KCIBT Holdings LP
Date To
8/26/2020 CCC/Negative/--
8/24/2020 SD/NM/--
3/17/2020 CCC+/Negative/--
12/20/2019 B-/Negative/--
3/13/2019 B-/Stable/--
5/15/2017 B/Stable/--
Town Sports International Holdings Inc.
  • US$325 million floating rate term B bank loan due Nov. 15, 2020
  • US$15 million floating rate revolver bank loan due 2020

On Aug. 26, 2020, S&P Global Ratings lowered its long-term issuer credit rating on New York-based fitness club operator Town Sports International Holdings Inc. to 'SD' from 'CC', after the issuer failed to pay US$ 14 million outstanding revolver balance. The lenders can accelerate the payment of outstanding term loan balance; as of December 2019 it was about US$ 178 million.

Later on Sept. 15, 2020, we raised the issuer credit rating to 'CC' from 'SD' after its subsidiary Town Sports International LLC filed for bankruptcy under chapter 11 of U.S. Bankruptcy Code, while the parent was not included in it.

Table 42

Issuer Credit Rating--Town Sports International Holdings Inc.
Date To
9/15/2020 CC/Negative/--
8/26/2020 SD/NM/--
6/15/2020 CC/Negative/--
11/18/2019 CCC/Negative/--
4/16/2018 B-/Stable/--
3/21/2018 CCC+/Watch Pos/--
3/10/2016 CCC+/Negative/--
3/8/2016 SD/NM/--
8/6/2015 B-/Negative/--
8/12/2014 B/Negative/--
2/21/2014 B+/Negative/--
3/22/2012 B+/Stable/--
4/4/2011 B/Positive/--
2/27/2009 B/Stable/--
8/28/2006 B+/Stable/--
6/8/2006 B/Watch Pos/--
7/1/2005 B/Watch Dev/--
1/26/2004 B/Stable/--
SAExploration Holdings Inc.
  • US$60 million 6.00% secured notes due Sept. 26, 2023

Table 43

Issuer Credit Rating--SAExploration Holdings Inc.
Date To
6/14/2016 NR/--/--
6/14/2016 CC/Negative/--
5/20/2016 CCC-/Negative/--
9/10/2015 B-/Negative/--
8/27/2015 SD/NM/--
6/17/2014 B-/Stable/--
Shiloh Industries Inc.

Table 44

Issuer Credit Rating--Shiloh Industries Inc.
Date To
1/27/2016 NR/--/--
1/27/2016 B+/Negative/--
5/18/2015 BB-/Negative/--
2/24/2011 BB-/Stable/--
7/15/2010 B+/Positive/--
4/13/2010 B/Positive/--
7/23/2009 B/Negative/--
4/30/2009 BB-/Watch Neg/--
1/13/2009 BB-/Negative/--
11/13/2008 BB-/Watch Neg/--
12/23/2004 BB-/Stable/--
6/11/2004 B+/Positive/--
7/16/2003 B/Negative/--
4/23/2002 CCC+/Negative/--
2/6/2002 B-/Watch Neg/--
12/12/2001 BB-/Watch Neg/--
7/26/2000 BB-/Stable/--
Boardriders Inc.
  • US$450 million floating rate first-lien term bank loan due April 8, 2024
  • US$286 million term B-2 bank loan due April 23, 2024
  • US$45 million term A bank loan due Oct. 23, 2023
  • US$80 million term B-1 bank loan due April 23, 2024

On Sept. 4, 2020, S&P Global Ratings lowered its long-term issuer credit rating on New York-based action sports apparel company Boardriders Inc. to 'SD' from 'CCC+' after the issuer completed a distressed transaction to increase its liquidity and fund for operations. The issuer has recently issued new money debt of about US$155 million and released another US$492 million of preferred stock to lenders who contributed new money.

Later on Sept. 24, we raised the issuer credit rating on the issuer to 'CCC' from 'SD'.

Table 45

Issuer Credit Rating--Boardriders Inc.
Date To
9/24/2020 CCC/Negative/--
9/4/2020 SD/NM/--
6/10/2020 CCC+/Negative/--
2/14/2020 B-/Negative/--
3/5/2018 B-/Stable/--
1/5/2018 CCC+/Watch Pos/--
6/28/2017 CCC+/Negative/--
4/8/2016 B-/Negative/--
9/10/2015 D/--/--
6/19/2015 CCC+/Negative/--
7/14/2014 B-/Negative/--
7/10/2013 B-/Stable/--
10/16/2012 B-/Negative/--
11/29/2010 B/Stable/--
8/10/2010 B-/Watch Pos/--
12/23/2009 B-/Negative/--
3/17/2009 B-/Watch Dev/--
11/24/2008 B+/Negative/--
4/1/2008 BB-/Watch Neg/--
5/7/2007 BB-/Negative/--
3/12/2007 BB/Watch Neg/--
6/30/2005 BB/Stable/--
Premier Brands Group Holdings LLC
  • US$325 million floating rate first-lien term bank loan due March 20, 2024

On Sept. 4, 2020, S&P Global Ratings lowered its long-term issuer credit rating on New York-based apparel designer and manufacturer Premier Brands Group Holdings LLC to 'SD' from 'B-' after the issuer announced it had received a waiver for reducing excess cash flow payment of about US$11 million, which was due in April 2020. Half of this amount, US$5.5 million, is waived until the maturity of notes in 2024, while the issuer is still negotiating the payment date for other half.

Table 46

Issuer Credit Rating--Premier Brands Group Holdings LLC
Date To
9/4/2020 SD/NM/--
3/27/2020 B-/Negative/--
3/11/2019 B-/Positive/--
4/23/2018 NR/--/--
4/6/2018 D/--/--
5/12/2017 CCC-/Negative/--
8/26/2016 CCC/Negative/--
12/3/2015 CCC+/Negative/--
2/27/2014 B-/Stable/--
2/19/2014 B/Stable/--
MAI Holdings Inc.
  • US$135 million 9.50% notes due June 1, 2023

On Sept. 9, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Missouri-based printing equipment designer and manufacturer MAI Holdings Inc. to 'SD' from 'CCC-', after the issuer completed partial exchange of its' senior secured notes. The new notes are in a payment favorable position. This transaction was aimed at preserving the liquidity as the sales volume and operating income has been adversely affected by the pandemic.

Later on Sept. 17, 2020, S&P Global Rating withdrew credit ratings at the issuer's request.

Table 47

Issuer Credit Rating--MAI Holdings Inc.
Date To
9/17/2020 NR/--/--
9/9/2020 SD/NM/--
5/15/2020 CCC-/Negative/--
5/16/2019 CCC/Negative/--
5/31/2018 B/Stable/--
Swissport Group S.a.r.l
  • EUR250 million 9.00% notes due Feb. 15, 2025
  • EUR410 million 5.25% notes due Aug. 15, 2024
  • EUR900 million floating rate term loan bank loan due Aug. 14, 2024
  • EUR290 million 9.75% callable notes due Dec. 15, 2022
  • EUR400 million 6.75% callable notes due Dec. 15, 2021

On Sept. 9, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Luxembourg-based global airport ground handler Swissport Group S.a.r.l to 'SD' from 'CCC', after the issuer completed issuing EUR230 million super senior secured debt for liquidity purposes and is planning to issue another EUR70 million. The issuer is also planning for a comprehensive debt restructuring, which involves debt-for-equity swaps.

Table 48

Issuer Credit Rating--Swissport Group S.a.r.l
Date To
9/9/2020 SD/NM/--
6/4/2020 CCC/Watch Neg/--
4/9/2020 CCC/Negative/--
7/27/2018 B-/Stable/--
3/13/2018 B-/Negative/--
12/5/2017 B-/Stable/--
8/15/2017 B/Stable/--
5/9/2017 B/Watch Neg/--
11/18/2015 B/Stable/--
iQor Holdings Inc.
  • US$610 million floating rate first lien term B loan bank loan due April 1, 2021
  • US$170 million floating rate second lien term bank loan due April 1, 2022
  • US$40 million floating rate term A-1 bank loan due April 1, 2021

On Sept. 10, 2020, S&P Global Ratings lowered its long-term issuer credit rating on New York-based business process outsourcing and product support services provider iQor Holdings Inc. to 'D' from 'CC', after the issuer filed petition under chapter 11 of U.S. Bankruptcy Code. The issuer has entered into an agreement with majority of its lenders for recapitalization of its funded debt. The issuer has submitted a prepackaged plan and will continue to work, with a DIP financing of US$130 million.

Table 49

Issuer Credit Rating--iQor Holdings Inc.
Date To
9/10/2020 D/--/--
6/10/2020 CC/Negative/--
8/23/2018 CCC/Negative/--
3/20/2018 B/Negative/--
1/30/2014 B/Stable/--
12/18/2013 B/Watch Dev/--
2/22/2013 B/Stable/--
8/22/2012 B-/Negative/--
2/8/2012 B-/Developing/--
2/1/2011 B/Stable/--
Distribuidora Internacional de Alimentacion S.A.
  • EUR300 million 1.00% med-term notes due April 28, 2021
  • EUR300 million 0.875% med-term notes serial 3 due April 6, 2023
  • EUR200million first lien super senior secured term bank loan due June 25, 2022

On Sept. 15, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Spain-based food products retailer Distribuidora Internacional de Alimentacion S.A. to 'SD' from 'CC', after the issuer completed distressed exchange. The leading shareholder of the issuer, LetterOne, purchased 97.5% of its EUR300 million 1% notes due in 2021 and 76% of its EUR300 million 0.875% notes due in 2023. The shareholder has made an offer to purchase the remaining 2023 notes.

Later on Oct. 9, 2020, the issuer credit rating was raised to 'CCC-' from 'SD'; at this point in time LetterOne owned 89.7% of the 2023 notes.

Table 50

Issuer Credit Rating--Distribuidora Internacional de Alimentacion S.A.
Date To
10/9/2020 CCC-/Negative/--
9/15/2020 SD/NM/--
8/13/2020 CC/Negative/--
2/6/2019 CCC/Negative/--
12/19/2018 CCC+/Negative/--
11/23/2018 B/Watch Neg/--
10/19/2018 BB-/Watch Neg/--
7/31/2018 BBB-/Negative/--
6/2/2014 BBB-/Stable/--
Oasis Petroleum Inc.
  • US$400 million 6.50% senior notes due Nov. 1, 2021
  • US$400 million 6.875% senior notes due Jan. 15, 2023
  • US$1 billion 6.875% senior notes due March 15, 2022
  • US$275 million convertible senior notes due Sept. 15, 2023
  • US$400 million 6.25% notes due May 1, 2026

On Sept. 18, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Texas-based oil and gas exploration and production company Oasis Petroleum Inc. to 'D' from 'CCC-' after the issuer missed an interest payment and entered into the 30-day grace period. The issuer is facing constrained liquidity position and with the current low demand and macroeconomic scenario, it will be hard for the issuer to pay interest in the grace period. The issuer is also in talks with its lenders and noteholders for a comprehensive financial restructuring.

Table 51

Issuer Credit Rating--Oasis Petroleum Inc.
Date To
9/18/2020 D/--/--
7/2/2020 CCC-/Negative/--
3/26/2020 CCC+/Negative/--
9/15/2016 B+/Stable/--
2/9/2016 B+/Negative/--
10/4/2013 BB-/Stable/--
9/6/2013 B+/Watch Pos/--
1/31/2012 B+/Stable/--
10/27/2011 B/Positive/--
1/25/2011 B/Stable/--
PGS ASA

On Sept. 21, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Norway-based oilfield services provider PGS ASA to 'SD' from 'CCC', after the issuer missed principal repayment. The issuer extended the maturity on its revolving credit facility of US$135 million by one week. The pandemic, low demand, and oil prices crisis has pushed the issuer into a weaker liquidity position, which makes it difficult for it to repay the amount. The issuer is also in talks with lenders to secure a new capital structure.

Table 52

Issuer Credit Rating--PGS ASA
Date To
9/21/2020 SD/NM/--
6/17/2020 CCC/Negative/--
3/31/2020 B-/Watch Neg/--
2/17/2020 B/Stable/--
6/4/2018 NR/--/--
5/8/2018 CCC+/Positive/--
1/11/2017 CCC+/Stable/--
12/23/2016 SD/NM/--
11/29/2016 CC/Negative/--
2/26/2016 CCC+/Negative/--
11/16/2015 B/Negative/--
1/22/2015 B+/Negative/--
11/4/2014 BB-/Negative/--
7/28/2014 BB/Negative/--
12/2/2010 BB/Stable/--
2/12/2010 BB-/Positive/--
7/10/2006 BB-/Stable/--
3/31/2006 B+/Watch Dev/--
11/16/2005 B+/Positive/--
5/6/2005 B+/Stable/--
11/12/2003 NR/--/--
7/30/2003 D/--/--
12/30/2002 CC/Watch Neg/--
11/20/2002 CCC+/Negative/--
10/29/2002 B/Negative/--
9/26/2002 BB-/Watch Dev/--
7/31/2002 BB-/Negative/--
5/3/2002 BBB-/Watch Neg/--
1/19/2001 BBB-/Stable/--
12/7/1998 BBB/Stable/--
10/20/1997 BBB/Positive/--
2/3/1997 BBB-/Positive/--
5/1/1996 BBB-/Stable/--
FTS International Inc.
  • US$550 million floating rate term bank loan due April 16, 2021
  • US$500 million 6.25% secured notes due May 1, 2022

On Sept. 23, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Texas -based oilfield services company FTS International Inc. to 'D' from 'CC', after the issuer has filed petitions under chapter 11 of U.S. Bankruptcy Code. The issuer will continue to operate through the bankruptcy process, and as of Sept. 18, 2020, the issuer had a US$161 million of cash.

Earlier on Aug. 25, 2020, the issuer credit rating was lowered to 'CC' from 'CCC-' after the issuer entered into a restructuring support agreement with majority of lenders.

Table 53

Issuer Credit Rating--FTS International Inc.
Date To
9/23/2020 D/--/--
8/25/2020 CC/Negative/--
4/20/2020 CCC-/Negative/--
11/27/2019 CCC+/Negative/--
2/23/2018 B/Stable/--
8/15/2017 B-/Stable/--
7/20/2016 CCC+/Negative/--
7/6/2016 SD/NM/--
6/7/2016 CC/Negative/--
5/18/2016 CCC+/Negative/--
9/28/2015 B-/Negative/--
5/27/2015 B-/Stable/--
12/22/2014 B/Negative/--
9/23/2014 B/Stable/--
4/3/2014 B-/Positive/--
11/4/2013 B-/Stable/--
Technicolor S.A.
  • EUR450 million bank loan due Dec. 6, 2023
  • EUR275 million bank loan due Dec. 6, 2023
  • US$300 million bank loan due Dec. 6, 2023
  • US$119.779 million bank loan due June 30, 2024
  • EUR191.35 million notes due June 30, 2024
  • EUR158.31 million notes due June 30, 2024

On Sept. 23, 2020, S&P Global Ratings lowered its long-term issuer credit rating on France-based technology group Technicolor S.A. to 'SD' from 'CC', after the issuer completed the debt-to-equity swap. This transaction had two components, first to convert EUR1.234 billion debt into EUR660 million of equity and a EUR574 million facility, and second to issue new debt of EUR457 million for liquidity and repayment purposes.

Later on Sept. 25, 2020, the issuer credit rating was raised to 'CCC+' from 'SD'.

Table 54

Issuer Credit Rating--Technicolor S.A.
Date To
9/25/2020 CCC+/Stable/--
9/23/2020 SD/NM/--
7/3/2020 CC/Watch Neg/--
5/29/2020 CCC-/Negative/--
2/27/2020 B-/Stable/--
3/27/2019 B/Stable/--
3/14/2018 B+/Stable/--
7/5/2017 BB-/Negative/--
4/29/2016 BB-/Stable/--
7/24/2015 B+/Stable/--
4/24/2015 B+/Positive/--
4/15/2014 B+/Stable/--
8/23/2012 B/Stable/--
3/29/2011 B-/Stable/--
10/20/2010 CCC+/Positive/--
6/1/2010 CCC-/Watch Pos/--
12/1/2009 D/--/--
5/7/2009 SD/NM/--
1/29/2009 CC/Negative/--
12/2/2008 B/Watch Neg/--
8/4/2008 B+/Negative/--
5/20/2008 BB-/Negative/--
3/11/2008 BB/Negative/--
2/14/2008 BBB-/Watch Neg/--
8/3/2007 BBB-/Negative/--
3/5/2007 BBB-/Stable/--
3/27/2006 BBB/Negative/--
2/2/2006 BBB+/Watch Neg/--
11/16/2005 BBB+/Negative/--
7/24/2002 BBB+/Stable/--
Garrett Motion Inc.
  • EUR430 million floating rate revolving credit facility bank loan due Sept. 27, 2023
  • EUR330 million floating rate term loan A bank ln due Sept. 27, 2023
  • EUR350 million 5.125% notes due Oct. 15, 2026
  • US$425 million floating rate term loan B bank loan due Sept. 27, 2025
  • EUR375 million floating rate term loan B bank loan due Sept. 27, 2025

On Sept. 24, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Delaware-based turbocharger maker Garrett Motion Inc. to 'D' from 'B', after the issuer filed for bankruptcy protection under chapter 11 of U.S. Bankruptcy Code. This resulted from the inability of issuer to sustain increasing R&D investing and participate to industry consolidation along with uncertain market conditions. KPS Capital Partners L.P. has offered to purchase part of the issuer's assets and liabilities for US$2.1 billion in cash.

Earlier on Sept. 4 2020, the issuer credit ratings was lowered to 'B' from 'BB-', after the issuer announced for potential balance sheet restructuring.

Table 55

Issuer Credit Rating--Garrett Motion Inc.
Date To
9/24/2020 D/--/--
9/4/2020 B/Watch Neg/--
7/23/2020 BB-/Negative/--
4/14/2020 BB-/Watch Neg/--
3/12/2020 BB-/Negative/--
11/12/2018 BB-/Stable/--
Summit Midstream Partners L.P.
  • US$300 million 5.50% senior notes due Aug. 15, 2022
  • US$500 million 5.75% senior notes due April 15, 2025
  • US$300 million floating rate bank loan due May 13, 2022
  • US$1.25 billion first-lien guaranteed senior secured bank loan due May 13, 2022
  • US$28 million first-lien guaranteed senior secured bank loan due March 31, 2021

On Sept. 25, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Texas-based midstream energy infrastructure company Summit Midstream Partners L.P. to 'SD' from 'CC', after the issuer settled about US$33.5 million of senior unsecured notes due in 2022 and US$ 38.7 million of senior unsecured notes due in 2025, in exchange for US$72.2 million in cash. Since May 2020 the issuer has retired US$210.8 million of aggregate principal amount at a weighted average discount of about 39%. Now S&P Global Ratings has forecasted the adjusted debt-to-EBITDA ratio for the issuer to rise between 6x and 6.5x by year-end 2020.

The issuer credit rating was also lowered to 'SD' from 'CCC', earlier on June 23, 2020, after the issuer announced a distressed debt repurchase.

Table 56

Issuer Credit Rating--Summit Midstream Partners L.P.
Date To
9/25/2020 SD/NM/--
9/2/2020 CC/Negative/--
8/5/2020 CCC/Negative/--
6/23/2020 SD/NM/--
6/5/2020 CCC/Negative/--
3/25/2020 B/Negative/--
2/6/2020 B+/Stable/--
11/8/2017 BB-/Stable/--
6/5/2013 B+/Stable/--
Cassini SAS
  • EUR90 million floating rate revolving credit facility bank loan due March 8, 2025
  • EUR568 million facility B bank loan due March 28, 2026

On Sept. 28, 2020, S&P Global Ratings lowered its long-term issuer credit rating on France-based exhibition and trade show organizer Cassini SAS to 'D' from 'CCC', after the issuer filed for safeguard procedures, which entails a reorganization of liabilities. The issuer has faced losses due to cancellations and postponements of shows due to the COVID-19 pandemic. The rising cases of COVID-19 cases in France has forced the government to decrease the limit of public gathering further to 1,000 from 5,000 in some risky areas.

Earlier on Sept. 14, 2020, the issuer credit rating was lowered to 'CCC' from 'B-' on tight liquidity after shows postponement and refunds.

Table 57

Issuer Credit Rating--Cassini SAS
Date To
9/28/2020 D/--/--
9/14/2020 CCC/Negative/--
6/10/2020 B-/Watch Neg/--
3/20/2020 B-/Negative/--
2/4/2020 B/Negative/--
5/8/2019 B/Stable/--

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
Zev R Gurwitz, New York + 1 (212) 438 7128;
zev.gurwitz@spglobal.com
Research Contributor:Lyndon Fernandes, CRISIL Global Analytical Center, an S&P affiliate, Mumbai

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