The global corporate default tally increased by one this past week after a confidential default was added to the tally. With just 32 defaults year to date, and only four in May, the pace is considerably slower than previous years (see chart 1).
By region, U.S. defaults are 40% lower than the previous year, with only 15 defaults so far in 2022, compared with 25 in 2021 and 66 in 2020 (see chart 2). However, the U.S. distress ratio nearly doubled over the last month to 4.3% from 2.4%. The U.S. distress ratio is the proportion of speculative-grade (rated 'BB+' or lower) issues with option-adjusted composite spreads of more than 1,000 basis points relative to U.S. Treasuries. Although the distress ratio is low compared with historical averages, the month-over-month change is the highest since March 2020, indicating we could begin to see defaults rise in the region (see "Highest Month-Over-Month Change Since March 2020 As U.S. Distress Ratio Rises To 4.3%," June 13, 2022).
This Week's Observations
- The global corporate default tally of 32 remains well below its five-year average of 57 defaults.
- The consumer products sector leads the default tally with six, followed by homebuilders/real estate with five (see chart 3).
- We currently expect the U.S. 12-month-trailing speculative-grade default rate to increase to 3% by March 2023 (see "The U.S. Speculative-Grade Corporate Default Rate Could Reach 3% By 2023 As Risks Continue To Increase," May 19, 2022).
Table 1
Global Corporate Defaults Total 32 So Far in 2022 | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Region | 12-month-trailing speculative-grade default rate (%) | 2022 YTD | 2021 YTD | 2021 | Weakest links | |||||||
U.S. | *1.4 | 15 | 25 | 40 | 118 | |||||||
Emerging markets | 2.1 | 12 | 7 | 15 | 17 | |||||||
Europe | *0.9 | 5 | 11 | 14 | 48 | |||||||
Other developed | 1.5 | 0 | 2 | 3 | 10 | |||||||
Global | 1.5 | 32 | 45 | 72 | 193 | |||||||
Note: Trailing-12-month speculative-grade default rates are from April 30, 2022-April 30, 2022. *Trailing-12-month speculative-grade default rates are from May 31, 2022-May 31, 2022, and are preliminary and subject to change. Year-to-date data as of June 8, 2022. Weakest link data is as of April 25, 2022. 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®. |
Chart 1
Chart 2
Chart 3
Table 2
One Confidential Issuer Was Added To The Tally This Week Due To A Reconciliation Process | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Date | Parent company | Country/market | Subsector | To | From | Reason | ||||||||
1/4/2022 |
ION Geophysical Corp. |
U.S. | Oil and gas | D | CCC | Missed principal and interest payments | ||||||||
1/4/2022 | Confidential | Confidential | Utilities | D | NR | Confidential | ||||||||
1/13/2022 |
R&F Properties (HK) Co. Ltd. |
Hong Kong | Homebuilders/real estate companies | SD | CC | Distressed exchange | ||||||||
1/19/2022 | Confidential | Confidential | Homebuilders/real estate companies | SD | CCC- | Confidential | ||||||||
1/24/2022 |
Fusion Connect Inc. |
U.S. | Telecommunications | SD | CC | Distressed exchange | ||||||||
2/1/2022 |
Future Retail Ltd. |
India | Consumer products | SD | CCC- | Missed principal payments | ||||||||
2/1/2022 |
TPC Group Inc. (TPC Group LLC) |
U.S. | Health care | D | CCC | Missed interest payments | ||||||||
2/4/2022 | Confidential | Confidential | Consumer products | D | NR | Confidential | ||||||||
2/9/2022 | Confidential | Confidential | Consumer products | SD | CCC | Confidential | ||||||||
2/10/2022 |
Credito Real, S.A.B. de C.V., SOFOM, E.N.R. |
Mexico | Financial institutions | SD | CCC- | Missed principal payments | ||||||||
2/11/2022 | Confidential | Confidential | Homebuilders/real estate companies | SD | CC | Confidential | ||||||||
2/17/2022 |
U.S. TelePacific Holdings Corp. |
U.S. | Telecommunications | SD | CCC- | Distressed exchange | ||||||||
3/15/2022 |
Diamond Sports Group LLC (Sinclair Broadcast Group Inc.) |
U.S. | Media and entertainment | SD | CC | Distressed exchange | ||||||||
3/21/2022 |
Mulhacen Pte. Ltd. |
Singapore | Financial institutions | D | CC | Distressed exchange | ||||||||
3/24/2022 |
MHP SE |
Ukraine | Consumer products | SD | B- | Missed interest payments | ||||||||
4/1/2022 |
Ruby Pipeline LLC |
U.S. | Utilities | D | CC | Missed principal payments | ||||||||
4/7/2022 |
Owl Finance Ltd. (Hibu Group Ltd.) |
U.K. | Media and entertainment | SD | CC | Distressed exchange | ||||||||
4/7/2022 |
PSS Industrial Group Corp. |
U.S. | Utilities | D | CCC- | Missed principal and interest payments | ||||||||
4/8/2022 |
Guangzhou R&F Properties Co. Ltd. |
China | Homebuilders/real estate companies | SD | CC | Distressed exchange | ||||||||
4/8/2022 |
Kernel Holding S.A. |
Ukraine | Consumer products | SD | B- | Missed interest payments | ||||||||
4/11/2022 | Confidential | Cayman Islands | Homebuilders/real estate companies | SD | CC | Confidential | ||||||||
4/11/2022 |
Promotora de Informaciones S.A. |
Spain | Media and entertainment | SD | CC | Distressed exchange | ||||||||
4/12/2022 |
Dunn Paper Holdings Inc. |
U.S. | Chemicals, packaging, and environmental services | D | CCC | Missed interest payments | ||||||||
4/12/2022 |
Grupo Kaltex S.A. de C.V. |
Mexico | Consumer products | D | CCC- | Missed principal payments | ||||||||
4/12/2022 |
Petropavlovsk PLC |
U.K. | Metals, mining, and steel | SD | CCC- | Missed interest payments | ||||||||
4/13/2022 | Confidential | Confidential | High technology | D | CCC | Confidential | ||||||||
4/14/2022 |
EuroChem Group AG |
Switzerland | Chemicals, packaging, and environmental services | SD | CCC- | Missed interest payments | ||||||||
4/22/2022 | Confidential | Confidential | Aerospace and defense | SD | CCC+ | Confidential | ||||||||
5/3/2022 |
Envision Healthcare Corp. (Envision Healthcare Holdings Inc.) |
U.S. | Health care | SD | CCC | Distressed exchange | ||||||||
5/6/2022 |
Safari Beteiligungs Gmbh (Dice Midco Sarl) |
Germany | Media and entertainment | SD | CC | Distressed exchange | ||||||||
5/10/2022 |
Talen Energy Supply LLC (Talen Energy Corporation) |
U.S. | Utilities | D | CCC | Bankruptcy | ||||||||
5/26/2022 | Confidential | Confidential | Financial institutions | SD | CCC- | Confidential | ||||||||
Data as of June 8, 2022. NR--Not rated. SD--Selective default. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®. |
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- U.S. Corporate Bond Yields As Of June 1, 2022, June 2, 2022
- Cutting China From Supply Chains--Easy To Say, Hard To Do, June 1, 2022
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Default Studies
More analysis and statistics are available in our annual default studies, published on RatingsDirect:
Corporate (financial and nonfinancial)
- 2021 Annual Global Corporate Default And Rating Transition Study
- 2021 Annual U.S. Corporate Default And Rating Transition Study
- 2021 Annual Japanese Corporate Default And Rating Transition Study
- 2021 Annual Taiwan Ratings Corp. Corporate Default And Rating Transition Study
- 2021 Annual Taiwan Structured Finance Default And Rating Transition Study
- 2020 Annual Australia And New Zealand Corporate Default And Rating Transition Study
- 2020 Annual Infrastructure Default And Rating Transition Study
- 2020 Annual European Corporate Default And Rating Transition Study
- 2020 Annual Asia Corporate Default And Rating Transition Study
- 2020 Annual Greater China Corporate Default And Rating Transition Study
- 2020 Annual Latin American Corporate Default And Rating Transition Study
- 2020 Annual Global Financial Services Default And Rating Transition Study
- 2020 Annual Emerging And Frontier Markets Corporate Default And Rating Transition Study
Structured finance
- 2021 Annual Global Structured Finance Default And Rating Transition Study
- 2021 Annual Japanese Structured Finance Default And Rating Transition Study
- 2021 Annual Taiwan Structured Finance Default And Rating Transition Study
- 2020 Annual European Structured Finance Default And Rating Transition Study
- 2020 Annual Mexican Structured Finance Default And Rating Transition Study
U.S. public finance
Sovereign and international public finance
- 2021 Annual Global Sovereign Default And Rating Transition Study
- 2020 Annual International Public Finance Default And Rating Transition Study
- 2020 Annual Mexican National Scale Corporate And 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; nicole.serino@spglobal.com |
Patrick Drury Byrne, Dublin (00353) 1 568 0605; patrick.drurybyrne@spglobal.com | |
Research Contributor: | Vaishali Singh, CRISIL Global Analytical Center, an S&P affiliate, Mumbai |
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