The global corporate default tally has increased to 17 after two issuers defaulted since our last report. The defaulters are:
- Argentina-based oil and gas company YPF S.A., and
- Cayman Islands-incorporated (China-based) real estate developer Sunshine 100 China Holdings Ltd.
We have also revised our default tally in a monthly reconciliation process to include Oregon-based digital media and marketing company Alpha Media LLC.
By region, the U.S. leads the default tally with 12, followed by Europe with four. The Argentina-based oil and gas company YPF S.A. and China-based real estate developer Sunshine 100 China Holdings Ltd. are the first defaults from the emerging markets region so far in 2021.
With an additional default this week, the oil and gas sector's year-to-date tally has reached three, one each from the U.S., Europe, and Emerging markets regions (see chart 1). The sector led the year-end default tally in both 2020 and 2019 with 50 and 20 defaults, respectively, and continues to face downward rating pressure and the potential for continued defaults in 2021 from lower demand due to a gradual economic recovery despite rising crude oil prices. Among 50 oil and gas sector defaults last year, 10 were from the European region and were primarily based in the U.K. We expect the 12-month-trailing speculative-grade default rate for Europe to rise to 6.5% by December 2021 from 5.3% in December 2020, with 47 defaults (see "The European Speculative-Grade Corporate Default Rate Could Reach 6.5% By December 2021," Feb. 26, 2021).
This Week's Observations
- By region, the U.S. is leading the default tally, with 12 out of 17 defaults in 2021 so far, followed by Europe with four (see chart 3).
- The media and entertainment sector leads 2021 defaults, with four, followed by retail and restaurants (3) and oil and gas (3). These three sectors contribute to about 60% of the 2021 defaults (see chart 2).
- The 12-month-trailing speculative-grade default rate for the U.S. is estimated to decrease to 6.4% in February 2021 from 6.6% in January 2021, whereas the same for the European region is estimated to increase to 5.4% in February 2021 from 5.0% in January 2021 (see table 1).
- Distressed-exchange-related defaults lead the tally so far in 2021, with 12, followed by bankruptcies, and missed interest and principal payment-related defaults, with two each (see chart 4).
|European 12-Month-Trailing Speculative-Grade Default Rate Estimated To Rise To 5.4% In February 2021|
|12-month-trailing speculative-grade default rate (%)||2021||2020||2019||Weakest links|
|Note: *Trailing-12-month default rates from Feb. 29, 2020, to Feb. 28, 2021, are preliminary and subject to change. Year-to-date data as of March 3, 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®.|
|The 2021 Global Corporate Default Tally Rises To 17|
|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.
Riverbed Parent Inc.
|U.S.||High technology||SD||CC||Distressed exchange|
AMC Entertainment Holdings Inc.
|U.S.||Media and entertainment||SD||CC||Distressed exchange|
Awesome Acquisition Co. L.P.
Alpha Media LLC
|U.S.||Media and entertainment||D||NR||Bankruptcy|
Imagine Group LLC (The)
|U.S.||Media and entertainment||D||CCC||Distressed exchange|
|U.S.||Retail/restaurants||D||CC||Missed interest payments|
Peabody Energy Corp.
|U.S.||Metals, mining, and steel||SD||CC||Distressed exchange|
|France||Oil and gas||SD||CC||Missed principal payments|
|U.S.||Consumer products||SD||CCC-||Distressed exchange|
CatLuxe Sarl (CatLuxe Acquistion Sarl)
|Luxembourg||Consumer products||SD||CCC+||Distressed exchange|
Form Technologies LLC
|U.S.||Capital goods||SD||CC||Distressed exchange|
|Argentina||Oil and gas||SD||CC||Distressed exchange|
Sunshine 100 China Holdings Ltd.*
|Cayman Islands||Homebuilders/real estate companies||SD||CCC-||Distressed exchange|
|NR--Not rated. SD--Selective default. Data as of March 3, 2021. Sources: S&P Global Ratings Research and S&P Global Market Intelligence’s CreditPro®. *Sunshine 100 China Holdings Ltd. is incorporated in the Cayman Islands but invests, develops, and manages real estate properties in the People’s Republic of China. Companies incorporated in the Cayman Islands are included in the U.S. default rate computation due to the location as a U.S. tax haven.|
- Sunshine 100 Downgraded To 'SD' On Distressed Repurchase, March 2, 2021
- Argentine Oil And Gas Company YPF S.A. Downgraded To 'SD' From 'CC' On Completion Of Debt Exchange Offer, Feb. 26, 2021
- The European Speculative-Grade Corporate Default Rate Could Reach 6.5% By December 2021, Feb. 26, 2021
- ESG Concerns In Oil And Gas Sectors Led To A Surge In Downgrade Pressure In January, Which Was Realized By Mid-February, Feb. 24, 2021
- Revenue Pressures Continue To Weigh On Consumer-Related Weakest Links, Feb. 22, 2021
- The Change To The Industry Risk Assessment For Exploration & Production Companies And What It Means For Issuer Ratings, Jan. 26, 2021
- Industry Top Trends 2021: Oil And Gas, Dec. 10, 2020
More analysis and statistics are available in our annual default studies, published on RatingsDirect:
Corporate (financial and nonfinancial)
- 2019 Annual Mexican National Scale Corporate And Public Finance Default And Rating Transition Study
- 2019 Annual Greater China Corporate Default And Rating Transition Study
- 2019 Annual Emerging Markets Corporate Default And Rating Transition Study
- 2019 Annual European Corporate Default And Rating Transition Study
- 2019 Annual Latin American Corporate Default And Rating Transition Study
- 2019 Annual Asia Corporate Default And Rating Transition Study
- 2019 Annual Global Financial Services Default And Rating Transition Study
- 2019 Annual U.S. Corporate Default And Rating Transition Study
- 2019 Annual Taiwan Ratings Corp. Corporate Default And Rating Transition Study
- 2019 Annual Global Corporate Default And Rating Transition Study
- Japanese Issuer Credit Rating Transitions Study 2019
- 2018 Annual Infrastructure Default And Rating Transition Study
- 2017 Annual Australia And New Zealand Corporate Default Study And Rating Transitions
- 2017 Annual Canadian Corporate Default Study And Rating Transitions
- 2017 Inaugural Nordic Default Study And Rating Transitions
- 2017 Annual Brazil Corporate Default Study And Rating Transitions
- 2019 Annual Mexican Structured Finance Default And Rating Transition Study
- 2019 Annual European Structured Finance Default And Rating Transition Study
- 2019 Annual Global Leveraged Loan CLO Default And Rating Transition Study
- 2019 Annual Global Structured Finance Default And Rating Transition Study
- 2019 Annual Taiwan Structured Finance Default And Rating Transition Study
- 2019 Annual Japanese Structured Finance Default And Rating Transition Study
U.S. public finance
- 2019 Annual U.S. Public Finance Default And Rating Transition Study
- 2017 Annual U.S. Public Finance Not-For-Profit Health Care Default Study And Rating Transitions
- 2017 U.S. Public Finance Utility Default Study And Rating Transitions
- 2017 U.S. Public Finance Transportation Default Study And Rating Transitions
- 2017 Annual U.S. Public Finance Housing Default Study And Rating Transitions
- 2017 Annual U.S. Public Finance Charter School Default Study And Rating Transitions
- 2017 Annual U.S. Public Finance Higher Education And Nonprofit Organization Default Study And Rating Transitions
Sovereign and international public finance
- 2019 Annual Sovereign Default And Rating Transition Study
- 2019 Annual International Public Finance Default And Rating Transition Study
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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