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Default, Transition, and Recovery: 2021 Corporate Default Tally Climbs To 37

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Default, Transition, and Recovery: 2021 Corporate Default Tally Climbs To 37

This year's global corporate default tally rose to 37 after five companies defaulted since our last report. The defaulters are:

  • Delaware-based consumer products manufacturer Isagenix Worldwide Inc.,
  • Mexico-based telecom services provider Maxcom Telecomunicaciones S.A.B. de C.V.,
  • India-based retailing fashion and consumer products manufacturer Future Retail Ltd., and
  • Two confidential issuers.

Although the default tally continues to rise, it remains well below the 63 defaults at this point last year.

In the U.S. region, defaults are led by oil and gas, with four, as many speculative-grade companies are still struggling to generate break-even cash flow and access capital markets to meet upcoming debt maturities. This is especially true for exploration and production and oilfield services companies. The U.S. trailing-12-month speculative-grade corporate default rate fell for the third consecutive month to 6.3% in March 2021 from 6.4% in February 2021, while the U.S. speculative-grade energy default rate fell to 21.0% from 21.8% in the same period. Although decreasing, both default rates are higher than their five-year averages (see chart 1).

S&P Global Ratings recently raised its price assumptions for Brent and West Texas Intermediate (WTI) crude oil for the remainder of 2021 and 2022, to $60 and $55, respectively. Although the longer-term outlook is improving as companies work off their excess inventory and offshore drilling benefits from improved costs and commodity prices, we believe oilfield services will continue to face near-term headwinds due to the capital constraints in the industry (see "S&P Global Ratings Revises Oil And AECO Natural Gas Price Assumptions And Introduces Dutch Title Transfer Facility Assumption," March 8, 2021).

Chart 1

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This Week's Observations

  • By sector, global defaults are led by oil and gas, with seven, followed by consumer products, with six (see chart 3).
  • The 12-month-trailing speculative-grade default rate for global energy and natural resources dropped slightly in March 2021 to 16.5% from 17.0% in February 2021 (see chart 5).
  • The 12-month-trailing speculative grade default rate for Europe increased to 6.1% in March 2021 from 5.4% in February 2021.

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

U.S. Year-To-Date Defaults Are Much Lower In 2021 (22) Than In 2020 (43)
Region 12-month-trailing speculative-grade default rate (%) 2021 YTD 2020 YTD 2020 Weakest links
U.S. 6.3 22 43 146 322
Emerging markets 2.8 5 8 28 35
Europe 6.1 9 7 42 84
Other developed 6.6 1 5 10 25
Global 5.4 37 63 226 466
Note: 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 28. Weakest link data is as of Jan. 31, 2021. Other developed region is 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 Rises To 37
Date Parent company Country Subsector To From Reason
5-Jan-21

HGIM Corp.

U.S. Oil and gas SD CC Distressed exchange
6-Jan-21

Promotora de Informaciones S.A.

Spain Media and entertainment SD CC Distressed exchange
8-Jan-21

Burger BossCo Intermediate Inc.

U.S. Retail/restaurants SD CCC Distressed exchange
8-Jan-21

Riverbed Parent Inc.

U.S. High technology SD CC Distressed exchange
21-Jan-21

AMC Entertainment Holdings Inc.

U.S. Media and entertainment SD CC Distressed exchange
25-Jan-21

Awesome Acquisition Co. L.P.

U.S. Retail/restaurants D NR Chapter 11
25-Jan-21

Alpha Media LLC

U.S. Media and entertainment D NR Bankruptcy
27-Jan-21

Imagine Group LLC (The)

U.S. Media and entertainment D CCC Distressed exchange
2-Feb-21

Belk Inc.

U.S. Retail/restaurants D CC Missed interest payments
3-Feb-21

Peabody Energy Corp.

U.S. Metals, mining, and steel SD CC Distressed exchange
3-Feb-21 Confidential Confidential Health care SD CCC- Confidential
11-Feb-21 Confidential Confidential Automotive D CCC- Confidential
11-Feb-21

Vallourec

France Oil and gas SD CC Missed principal payments
19-Feb-21

Renfro Corp.

U.S. Consumer products SD CCC- Distressed exchange
22-Feb-21

CatLuxe Sarl (CatLuxe Acquisition Sarl)

Luxembourg Consumer products SD CCC+ Distressed exchange
22-Feb-21

Form Technologies LLC

U.S. Capital goods SD CC Distressed exchange
26-Feb-21

YPF S.A.

Argentina Oil and gas SD CC Distressed exchange
2-Mar-21

Sunshine 100 China Holdings Ltd.

Cayman Islands Homebuilders/real estate companies SD CCC- Distressed exchange
7-Mar-21 Confidential Confidential Financial institutions D NR Confidential
8-Mar-21 Confidential Confidential Financial institutions D B+ Confidential
16-Mar-21

Ensign Drilling Inc. (Ensign Energy Services Inc.)

Canada Oil and gas SD CCC+ Distressed exchange
16-Mar-21

HighPoint Resources Corp.

U.S. Oil and gas D CC Chapter 11
17-Mar-21

Washington Prime Group Inc.

U.S. Homebuilders/real estate companies D CC Missed interest payments
18-Mar-21 Confidential Confidential Consumer products D CCC Confidential
23-Mar-21

AI Mistral Holdco Ltd.

U.K. Transportation SD CCC+ Distressed exchange
26-Mar-21

Avation PLC

U.K. Transportation SD CC Distressed exchange
13-Apr-21

YPF Energia Electrica S.A. (YPF S.A)

Argentina Utilities SD CCC- Distressed exchange
14-Apr-21

ION Geophysical Corp.

U.S. Oil and gas SD CC Distressed exchange
15-Apr-21

Summit Midstream Partners L.P.

U.S. Midstream SD CC Distressed exchange
16-Apr-21

Basic Energy Services Inc.

U.S. Oil and gas D CCC- Missed interest payments
19-Apr-21

Medical Depot Holdings Inc.

U.S. Health care SD CCC+ Distressed exchange
19-Apr-21

Serta Simmons Bedding LLC

U.S. Consumer products SD CC Distressed exchange
23-Apr-21

Isagenix Worldwide Inc.

U.S. Consumer products SD CCC Distressed exchange
26-Apr-21 Confidential Confidential High technology SD CCC+ Confidential
27-Apr-21

Maxcom Telecomunicaciones S.A.B. de C.V.

Mexico Telecommunications D CCC- Missed interest payments
28-Apr-21

Future Retail Ltd.

India Retail/restaurants SD CCC- Distressed exchange
28-Apr-21 Confidential Confidential Consumer products SD CCC- Confidential
NR--Not rated. SD--Selective default. Data as of April 28, 2021. *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. 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
Secondary Contact:David C Tesher, New York + 212-438-2618;
david.tesher@spglobal.com
Research Contributor:Shripati Pranshu, Mumbai;
shripati.pranshu@spglobal.com

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