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Default, Transition, and Recovery: Corporate Defaults Reach Their Highest Year-To-Date Total Since 2009


S&P Global Ratings' 2023 global corporate default tally has reached 23 after the following issuers defaulted in February:

  • U.S.-based retailer of marine aftermarket parts Rising Tide Holdings Inc.
  • U.S.-based fitness provider Equinox Holdings Inc.
  • Canada-based medical device manufacturer Bausch Health Cos. Inc.
  • Spain-based pizza delivery provider Foodco Bondco SAU
  • Luxembourg-based financial service provider Altisource Portfolio Solutions S.A.
  • U.S.-based women's apparel wholesaler Premier Brands Group Holdings LLC
  • U.S.-based theatrical exhibition service provider AMC Entertainment Holdings Inc.
  • U.S.-based unified communications and call center service provider Avaya Holdings Corp.
  • Brazil-based telecom service provider Oi S.A.
  • U.S.-based retail store 99 Cents Only Stores LLC
  • U.S.-based manufacturer and supplier of air filter and aftermarket products K&N Parent Inc.
  • U.S.-based specialty equipment rental and logistics company Yak Access LLC
  • U.S.-based home decor service provider KNB Holdings Corp.
  • U.S.-based sports marketing service provider Diamond Sports Group LLC
  • One confidentially rated company

These 15 defaults in February marked the highest monthly total since November 2020, and the year-to-date default tally is at its highest since 2009.

Chart 1


Chart 2


U.S. Media And Entertainment Sector Leads February Defaults

Over three-quarters of defaults in February were U.S.-based, led by an uptick in defaults from the media and entertainment sector amid an uneven recovery from the COVID-19 pandemic. Persistent high interest rates and a potential economic recession pose additional risks to the high number of lower-rated issuers in the sector--nearly one-third of media and entertainment issuers globally rated 'B-' or lower are assigned negative outlooks or CreditWatch implications.

The sector also has the highest number of issues trading at distressed levels, amounting to nearly one-fifth of total U.S. distressed issues, according to our calculations. The sector's weakened credit quality and high number of distressed issues could suggest more defaults to come (see "This Month In Credit: Consumer Health Complicates Credit Picture (February 2023)").

Downgrade Pressure Expected To Continue

U.S. defaults are over 2.5x higher than at this time last year, with 16 defaults so far in 2023 and just six in 2022. In Europe, there have been three defaults so far in 2023, compared with none during the same period in 2022. Given our expectation that economic conditions will continue to deteriorate through 2023, we expect the U.S. speculative-grade corporate default rate could reach 4% by December, while the European corporate speculative-grade default rate could reach 3.25% (see "Growing Strains Could Push The U.S. Speculative-Grade Corporate Default Rate To 4% By December 2023" and "The European Speculative-Grade Corporate Default Rate Could Rise To 3.25% By December 2023, Amid Uncertain Backdrop," Feb. 16, 2023).

The retail sector leads defaults so far in 2023 as it continues to face challenges from logistics, labor, and supplier cost inflation, all squeezing margins for both retailers and their suppliers. Nearly half of retail issuers rated 'B-' or lower globally are assigned negative outlooks or CreditWatch implications, and therefore we can expect further downgrades as well as a potential increase in defaults (see chart 3).

Chart 3


Table 1

Defaults Rates Are Expected To Increase In The U.S. And Europe Through February
Region Trailing-12-month speculative-grade default rate (%) Weakest links count
U.S. 2.02* 191
Emerging markets 2.25 17
Europe 2.50* 51
Other developed 2.22 9
Global 1.96 268
Notes: Other developed region is Australia, Canada, Japan, and New Zealand. Default counts may include confidentially rated issuers. Weakest link data is as of Jan. 31, 2023. Trailing-12-month speculative-grade default rates for Jan. 31, 2022-Jan. 31, 2023. *Trailing-12-month speculative-grade default rates for Feb. 28, 2022-Feb. 28, 2023, preliminary and subject to change. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro®.

Chart 4


Chart 5


Table 2

2023 Global Corporate Default Tally Reaches 23
Date Parent company Country/market Subsector To From Reason

Moran Foods LLC (SAL Acquisition Corp.)

U.S. Retail/restaurants SD CCC+ Distressed exchange

Americanas S.A. (Lojas Americanas S.A.)

Brazil Retail/restaurants D B Missed principal and interest payments

Party City Holdings Inc. (PC Nextco Holdings LLC)

U.S. Retail/restaurants D CCC Bankruptcy

Mexarrend S.A.P.I. de C.V.

Mexico Financial institutions D CC Missed principal and interest payments

Serta Simmons Bedding LLC

U.S. Consumer products D CCC- Bankruptcy

Bed Bath & Beyond Inc.

U.S. Retail/restaurants D CC Missed principal and interest payments

Cooper-Standard Holdings Inc.

U.S. Automotive SD CC Distressed exchange

Missouri TopCo Ltd.

U.K. Consumer products SD CCC- Distressed exchange

Oi S.A.

Brazil Telecommunications D CCC- Missed principal and interest payments

KNB Holdings Corp.

U.S. Consumer products D CCC- Bankruptcy

Yak Access LLC

U.S. Capital goods D CCC Distressed exchange

K&N Parent Inc.

U.S. Automotive D CCC- Distressed exchange

99 Cents Only Stores LLC

U.S. Retail/restaurants SD CCC+ Missed payments

Avaya Holdings Corp.

U.S. High technology D CC Bankruptcy

Diamond Sports Group LLC

U.S. Media and entertainment D CCC- Missed payments
2/16/2023 Confidential Confidential Media and entertainment D CC Confidential

AMC Entertainment Holdings Inc.

U.S. Media and entertainment SD CC Distressed exchange

Premier Brands Group Holdings LLC

U.S. Consumer products SD CCC Distressed exchange

Altisource Portfolio Solutions S.A.

Luxembourg Financial institutions SD CC Distressed exchange

Foodco Bondco SAU

Spain Retail/restaurants SD CCC- Missed payments

Bausch Health Cos. Inc.

Canada Health care SD CCC+ Distressed exchange

Equinox Holdings Inc.

U.S. Media and entertainment SD CCC- Distressed exchange

Rising Tide Holdings Inc.

U.S. Retail/restaurants SD CC Distressed exchange
SD--Selective default. Data as of Feb. 28, 2023. Sources: S&P Global Ratings Credit Research & Insights 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

Public Finance

Sovereign And International Public Finance

This report does not constitute a rating action.

Credit Research & Insights:Nicole Serino, New York + 1 (212) 438 1396;
Patrick Drury Byrne, Dublin (00353) 1 568 0605;
Research Contributor:Vaishali Singh, Pune;

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