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Default, Transition, and Recovery: Distressed Exchanges Lead Corporate Defaults So Far In 2021


Credit Trends: U.S. Public Finance Ended 2020 With A Rise In Downgrades


Default, Transition, and Recovery: Three Distressed Exchanges Push The 2021 Corporate Default Tally To 14


Default, Transition, and Recovery: The European Speculative-Grade Corporate Default Rate Could Reach 6.5% By December 2021


ESG Concerns In Oil And Gas Sectors Led To A Surge In Downgrade Pressure In January, Which Was Realized By Mid-February

Default, Transition, and Recovery: Distressed Exchanges Lead Corporate Defaults So Far In 2021

Global corporate defaults in 2021 reach four, after two U.S.-based companies defaulted since our last report, including:

  • Delaware-based quick-service restaurant operator Burger BossCo Intermediate Inc., and
  • California-based information technology services provider Riverbed Parent Inc.

This Week's Observations

  • All four defaults in 2021 so far are related to distressed exchanges, continuing the trend seen in the final quarter of 2020.
  • By region, the U.S. leads the defaults tally in 2021, with three, followed by Europe, with one.
  • By sector, there is one default each from oil and gas, media and entertainment, retail and restaurants, and high technology sectors in 2021.
  • Looking ahead, we expect the number of defaults to continue at their elevated pace, with the U.S. trailing-12-month speculative-grade default increasing slightly to 6.6% in December 2020 from 6.4% in November 2020.

Distressed exchanges continue to lead the default tally moving into the early weeks for 2021 as issuers look for alternative ways to avoid bankruptcy and reduce their debt burdens or extend their upcoming maturities. Over one-third of defaults in 2020 were a result of distressed exchanges. While distressed exchanges typically buy some time to resolve operational issues with companies under stress, they do generally carry high risk (roughly 1 in 3) of defaulting again if operational or business conditions do not improve. Additionally, all four defaults were rated 'CCC' and below prior to default, illustrating the high default risk associated with this part of the ratings spectrum.

Chart 1


In the U.S., negative bias (percentage of issuers with their outlook or negative or ratings on CreditWatch with negative implications) among 'CCC+' or lower rated issuers has lowered to pre-pandemic levels. However, the counts of issuers with these ratings are still high (nearly double of pre-pandemic counts), which suggests more rating actions are to follow for lower rated issuers in 2021 (see chart 1).

Chart 2


Chart 3


Chart 4


Chart 5


Table 1

U.S. Leads 2021 Corporate Default Tally, With Three
12-month-trailing speculative-grade default rate (%) 2021 2020 2019 Weakest links
U.S. 6.6* 3 146 78 365
Emerging market 3.5 0 28 22 36
Europe 5.3* 1 42 15 88
Other developed 6.0 0 10 3 26
Global 5.5 4 226 118 515
Note: *Trailing-12-month default rates from Dec. 31, 2019 - Dec. 31, 2020, are preliminary and subject to change. Year-to-date data as of Jan. 13, 2021. Weakest link data is as of Nov. 19, 2020. Other developed region includes Australia, Canada, Japan, and New Zealand. Default counts may include confidentially rated issuers. Sources: S&P Global Ratings Research and S&P Global Market Intelligence’s CreditPro®.

Table 2

The 2021 Global Corporate Default Tally At Four
Date Parent company Country Subsector To From Reason

HGIM Corp.

U.S. Oil and gas SD CC Distressed exchange

Promotora de Informaciones S.A.

Spain Media and entertainment SD CC Distressed exchange

Burger BossCo Intermediate Inc.

U.S. Retail/restaurants SD CCC Distressed exchange

Riverbed Parent Inc.

U.S. High technology SD CC Distressed exchange
NR--Not rated. SD--Selective default. Data as of Jan. 13, 2021. Sources: S&P Global Ratings Research and S&P Global Market Intelligence’s CreditPro®. (B) designation indicates the issuers second default for 2020.

Related Research

Default Studies

More analysis and statistics are available in our annual default studies, published on RatingsDirect:

Corporate (financial and nonfinancial)
Structured finance
U.S. public finance
Sovereign and international public finance

This report does not constitute a rating action.

Credit Markets Research:Nicole Serino, New York + 1 (212) 438 1396;
Sudeep K Kesh, New York (1) 212-438-7982;
Research Contributor:Shripati Pranshu, Mumbai;

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