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

The 2021 global corporate default tally has reached 26 after we added one confidentially rated default in a monthly reconciliation process. This year's tally is less than two-thirds of the tally at the same point in 2020, when credit stress rapidly increased due to the COVID-19 pandemic.

Distressed exchanges remain the leading reason for default, accounting for nearly 60% of the global total. The 12-month trailing count of distressed exchanges is at its highest point since 2010, with 81 since April 2020 (see chart 1). In the first quarter of 2021, there were only three bankruptcy-related defaults, compared with nine in the first quarter of 2020.

Chart 1

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This Week's Observations

  • At this point in 2020, there had been 43 defaults globally in the year.
  • By region, the U.S. leads the 2021 default tally with 15, followed by Europe with eight.
  • By sector, oil and gas and media and entertainment lead the default tally with five and four, respectively, whereas at this point in 2020, retail and restaurants led the default tally with six.
  • Defaults in the automotive and homebuilder and real estate sectors are above 2020 levels.

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

Year-To-Date Defaults Are Much Lower In 2021 (26) Than In 2020 (43)
Global corporate default summary
Region 12-month trailing speculative-grade default rate (%) 2021 year-to-date default tally 2020 year-to-date default tally 2020 default tally Weakest links tally
U.S. 6.3* 15 29 146 322
Emerging markets 3.1 2 5 28 35
Europe 5.9* 8 5 42 84
Other developed 5.9 1 4 10 25
Global 5.4 26 43 226 466
Notes: Other developed region consists of Australia, Canada, Japan, and New Zealand. Default counts may include confidentially rated issuers. *Trailing-12-month default rates from March 31, 2020-March 31, 2021, are preliminary and subject to change. Year-to-date data as of April 7, 2021. Weakest link data as of Jan. 31, 2021. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®.

Table 2

The 2021 Global Corporate Default Tally Rises To 26
Date Parent company Country Subsector To From Reason
1/5/2021

HGIM Corp.

U.S. Oil and gas SD CC Distressed exchange
1/6/2021

Promotora de Informaciones S.A.

Spain Media and entertainment SD CC Distressed exchange
1/8/2021

Burger BossCo Intermediate Inc.

U.S. Retail/restaurants SD CCC Distressed exchange
1/8/2021

Riverbed Parent Inc.

U.S. High technology SD CC Distressed exchange
1/21/2021

AMC Entertainment Holdings Inc.

U.S. Media and entertainment SD CC Distressed exchange
1/25/2021

Awesome Acquisition Co. L.P.

U.S. Retail/restaurants D NR Chapter 11
1/25/2021

Alpha Media LLC

U.S. Media and entertainment D NR Bankruptcy
1/27/2021

Imagine Group LLC (The)

U.S. Media and entertainment D CCC Distressed exchange
2/2/2021

Belk Inc.

U.S. Retail/restaurants D CC Missed interest payments
2/3/2021

Peabody Energy Corp.

U.S. Metals, mining, and steel SD CC Distressed exchange
2/3/2021 Confidential Confidential Health care SD CCC- Confidential
2/11/2021 Confidential Confidential Automotive D CCC- Confidential
2/11/2021

Vallourec

France Oil and gas SD CC Missed principal payments
2/19/2021

Renfro Corp.

U.S. Consumer products SD CCC- Distressed exchange
2/22/2021

CatLuxe Sarl (CatLuxe Acquistion Sarl)

Luxembourg Consumer products SD CCC+ Distressed exchange
2/22/2021

Form Technologies LLC

U.S. Capital goods SD CC Distressed exchange
2/26/2021

YPF S.A.

Argentina Oil and gas SD CC Distressed exchange
3/2/2021

Sunshine 100 China Holdings Ltd.*

Cayman Islands Homebuilders/real estate companies SD CCC- Distressed exchange
3/7/2021 Confidential Confidential Financial institutions D NR Confidential
3/8/2021 Confidential Confidential Financial institutions D B+ Confidential
3/16/2021

Ensign Drilling Inc. (Ensign Energy Services Inc.)

Canada Oil and gas SD CCC+ Distressed exchange
3/16/2021

HighPoint Resources Corp.

U.S. Oil and gas D CC Chapter 11
3/17/2021

Washington Prime Group Inc.

U.S. Homebuilders/real estate companies D CC Missed interest payments
3/18/2021 Confidential Confidential Consumer products D CCC Confidential
3/23/2021

AI Mistral Holdco Ltd.

U.K. Transportation SD CCC+ Distressed exchange
3/26/2021

Avation PLC

U.K. Transportation SD CC Distressed exchange
*Sunshine 100 China Holdings Ltd. is incorporated in the Cayman Islands but invests in, develops, and manages real estate properties in China. Companies incorporated in the Cayman Islands are included in the U.S. default rate computation due to their location in a U.S. tax haven. NR--Not rated. SD--Selective default. Data as of March 31, 2021. 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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