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Default, Transition, and Recovery: Exela Technologies Brings The Corporate Default Tally To 64

The 2021 global corporate default tally increased to 64 after the default of Texas-based business process automation company, Exela Technologies Inc. (see "Exela Technologies Inc. Downgraded To 'SD' From 'CCC-' On Debt Repurchases And Announced Debt Exchanges," Nov. 2, 2021).

With the addition of Exela, the U.S. fourth-quarter default tally has reached four, far below fourth-quarter total at this point in 2020 at 12. While defaults in both the U.S. and Europe have slowed so far in 2021, the U.S. has demonstrated a starker recovery as defaults have contracted by 73% from this point in 2020. Meanwhile defaults in Europe have contracted by 64% during the same period (see chart 1).

The number of U.S. weakest links--issuers rated 'B-' or lower by S&P Global Ratings with negative outlooks or ratings on CreditWatch with negative implications--has also fallen by 71% from its June 2020 peak compared with a 46% decline in Europe (see "Signs Of Weakness Among Lowest-Rated Homebuilder And Real Estate Issuers," Oct. 29, 2021). Several indicators point toward a lower default rate ahead for the U.S., including robust economic growth through 2023 and a shrinking speculative-grade negative bias for the region, indicating lower downgrade risk.

Chart 1

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Chart 2

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This Week's Observations

  • The 2021 fourth-quarter default tally recorded four defaults from the U.S., compared with 12 at this point in 2020 (see chart 4).
  • The consumer products sector continues to lead the 2021 global tally with nine defaults, followed by the media and entertainment sector with eight (see chart 5).
  • Over half of the defaults in 2021 were related to distressed exchanges. In the fourth quarter, however, defaults related to distressed exchanges and missed payments were tied (see chart 6).
  • We estimate that the U.S. 12-month trailing speculative-grade default rate fell to 2.0% in October 2021, and the European 12-month trailing speculative-grade default rate fell to 2.5% (see table 1).

Chart 3

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Chart 4

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Chart 5

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Chart 6

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Chart 7

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Table 1

U.S. Leads 2021 Defaults With 35 Out Of 64
Region 12-month trailing speculative-grade default rate (%) 2021 YTD 2020 YTD 2020 Weakest links
U.S. 2.0* 35 132 146 155
Emerging market 2.2 13 27 28 20
Europe 2.5* 13 36 42 54
Other developed 3.0 3 9 10 13
Global 2.6 64 204 226 242
Note: Trailing-12-month default rates from Oct. 31, 2020 - Oct. 31, 2021, are preliminary and subject to change. Year-to-date data as of Nov. 3, 2021. Weakest link data is as of Sept. 30, 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

The 2021 Global Corporate Default Tally Is At 64
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. (A)

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
4/13/2021

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

Argentina Utilities SD CCC- Distressed exchange
4/14/2021

ION Geophysical Corp.

U.S. Oil and gas SD CC Distressed exchange
4/15/2021

Summit Midstream Partners, LP

U.S. Midstream SD CC Distressed exchange
4/16/2021

Basic Energy Services Inc.

U.S. Oil and gas D CCC- Missed interest payments
4/19/2021

Medical Depot Holdings, Inc.

U.S. Health care SD CCC+ Distressed exchange
4/19/2021

Serta Simmons Bedding LLC

U.S. Consumer products SD CC Distressed exchange
4/23/2021

Isagenix Worldwide, Inc

U.S. Consumer products SD CCC Distressed exchange
4/26/2021 Confidential Confidential High technology SD CCC+ Confidential
4/27/2021

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

Mexico Telecommunications D CCC- Missed interest payments
4/28/2021

Future Retail Ltd.

India Retail/restaurants SD CCC- Distressed exchange
4/28/2021 Confidential Confidential Consumer products SD CCC- Confidential
4/30/2021

Codere S.A.

Spain Media and entertainment SD CC Distressed exchange
5/3/2021 Confidential Confidential Transportation D CC Confidential
5/10/2021

gategroup Holding AG

Switzerland Transportation SD CCC Distressed exchange
5/10/2021

Voyager Aviation Holdings LLC

U.S. Transportation SD CC Distressed exchange
5/14/2021

CDRH Parent Inc.

U.S. Health care D CC Distressed exchange
5/19/2021

Boart Longyear Ltd.

Australia Metals, mining, and steel D CC Bankruptcy
5/25/2021 Confidential Confidential Homebuilders/real estate companies D CCC- Confidential
6/3/2021

Peabody Energy Corp. (B)

U.S. Metals, mining, and steel SD CCC+ Distressed exchange
6/23/2021

Carlson Travel Inc

U.S. Media and entertainment D CCC Missed interest payments
6/23/2021 Confidential Confidential Consumer products D CCC- Confidential
7/1/2021

GTT Communications Inc.

U.S. Telecommunications SD CCC- Missed interest payments
7/8/2021

KCIBT Holdings LP

U.S. Consumer products SD CCC Distressed exchange
7/9/2021

Joye Media SLU

Spain Media and entertainment D CCC- Missed interest payments
7/12/2021

Peabody Energy Corp. (C)

U.S. Metals, mining, and steel SD CCC Distressed exchange
7/13/2021

Sichuan Languang Development Co. Ltd.,

China Homebuilders/real estate companies D CCC- Missed bond repayment
7/20/2021

Alpha Holding S.A. de C.V.

Mexico Financial institutions D CC Missed interest payments
7/30/2021

Comdata Spa

Italy Financial institutions SD CC Distressed exchange
8/3/2021 Confidential Confidential Transportation SD CC Confidential
8/9/2021

Glass Mountain Pipeline LLC

U.S. Utilities D CC Missed interest payments
8/11/2021

Sunshine 100 China Holdings Ltd.

Cayman Islands Homebuilders/real estate companies SD CCC- Missed bond repayment
8/13/2021

CLISA-Compania Latinoamericana de Infraestructura & Servicios S.A.

Argentina Capital goods SD CC Distressed exchange
9/21/2021

Array Canada Inc.

Canada Consumer products SD CCC Distressed exchange
9/29/2021 Confidential Confidential Financial institutions D B- Confidential
10/4/2021

IPC Corp.

United States Telecommunications SD CCC- Distressed exchange
10/5/2021

Fantasia Holdings Group Co. Ltd.

Cayman Islands Homebuilders/real estate companies SD CCC Missed bond repayment
10/19/2021

Sinic Holdings (Group) Co. Ltd.

Cayman Islands Homebuilders/real estate companies SD CC Missed bond repayment
11/2/2021

Exela Technologies Inc.

United States Media and entertainment SD CCC- Distressed exchange
Data as of Nov. 3, 2021. (B) designation indicates the issuer's second default for 2021. *Sunshine 100 China Holdings Ltd., Fantasia Holdings Group Co. Ltd., and Sinic Holdings (Group)Co Ltd. are incorporated in the Cayman Islands but invest, develop, and manage 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. NR--Not rated. 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
Secondary Contact:David C Tesher, New York + 212-438-2618;
david.tesher@spglobal.com
Research Contributor:Tanya Dias, CRISIL Global Analytical Center, an S&P affiliate, Mumbai

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