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

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Default, Transition, and Recovery: Distressed Exchanges Account For Over Half Of 2021 Defaults


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

The global corporate default tally has increased to 14 after three issuers defaulted since our last report. The defaulters are:

  • North Carolina-based sock manufacturer Renfro Corp.,
  • Luxembourg-based bridal wear designer CatLuxe Sarl, and
  • Delaware-based global manufacturer of engineered components Form Technologies LLC.

With these additions, defaults from distressed exchanges have reached 10 (about 71% of total defaults), continuing the trend seen in the last two quarters of 2020 (see chart 1). By region, the U.S. leads with eight distressed exchanges, followed by Europe with two, as these regions continue to shift away from more traditional forms of defaults such as missed interest payments or bankruptcy.

Chart 1

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This Week's Observations

  • By region, the U.S. is leading the default tally, with 10 out of 14 defaults in 2021 (see table 1).
  • Four sectors: media and entertainment (3), retail and restaurants (3), oil and gas (2), and consumer products (2), contribute to about 71% of the 2021 defaults (see chart 3).
  • The 12-month trailing speculative grade default rate for Europe declined to 5.0% in January 2021 from 5.3% in December 2020, while the same rate for the U.S. remained at 6.6%.
  • The 12-month trailing speculative-grade default rate for the global energy and natural resources sector increased to 15.6% in January 2021 from 15.0% in December 2020 (see chart 4).

Chart 2

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Chart 3

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Chart 4

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Chart 5

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Table 1

Global Corporate Default Summary
Region 12-month trailing speculative-grade default rate (%) 2021 2020 2019 Weakest links
U.S. 6.6 10 146 78 322
Emerging market 3.1 0 28 22 35
Europe 5.0 4 42 15 84
Other developed 6.0 0 10 3 25
Global 5.4 14 226 118 466
Note: Trailing-12-month default rates from Jan. 31, 2020 -Jan. 31, 2021, are preliminary and subject to change. Year-to-date data as of Feb. 24, 2021. Weakest link data is as of Jan. 31, 2021. Other developed region includes Australia, Canada, Japan, and New Zealand. Default counts may include confidentially-rated issuers. Sources: S&P Global Ratings Research and S&P Global Market Intelligence’s CreditPro®.

Table 2

Global Corporate Defaults 2021
Date Parent company Country Subsector To From Reason
1/5/21 HGIM Corp. U.S. Oil and gas SD CC Distressed exchange
1/6/21 Promotora de Informaciones S.A. Spain Media and entertainment SD CC Distressed exchange
1/8/21 Burger BossCo Intermediate Inc., U.S. Retail/restaurants SD CCC Distressed exchange
1/8/21 Riverbed Parent Inc., U.S. High technology SD CC Distressed exchange
1/21/21 AMC Entertainment Holdings Inc. U.S. Media and entertainment SD CC Distressed exchange
1/25/21 Awesome Acquisition Co. L.P. U.S. Retail/restaurants D NR Chapter 11
1/27/21 Imagine Group LLC (The) U.S. Media and entertainment D CCC Distressed exchange
2/2/21 Belk Inc., U.S. Retail/restaurants D CC Missed interest payments
2/3/21 Peabody Energy Corp. U.S. Metals, mining, and steel SD CC Distressed exchange
2/11/21 Confidential Confidential Automotive D CCC- Confidential
2/11/21 Vallourec France Oil and gas SD CC Missed principal payments
2/19/21 Renfro Corp. U.S. Consumer products SD CCC- Distressed exchange
2/22/21 CatLuxe Sarl (CatLuxe Acquistion Sarl) Luxembourg Consumer products SD CCC+ Distressed exchange
2/22/21 Form Technologies LLC U.S. Capital goods SD CC Distressed exchange
Data as of Feb. 24, 2021. SD--Selective default. Sources: S&P Global Ratings Research and S&P Global Market Intelligence’s CreditPro®.

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;
nicole.serino@spglobal.com
Sudeep K Kesh, New York (1) 212-438-7982;
sudeep.kesh@spglobal.com
Research Contributor:Shripati Pranshu, Mumbai;
shripati.pranshu@spglobal.com

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