- This year's global corporate default tally rose to 23 as of Feb. 28--the highest year-to-date tally since 2009--with 15 defaults in February alone, marking the highest monthly total since November 2020.
- Nearly three-quarters of February defaults came from U.S.-based issuers, and U.S. corporate defaults this year are already over 2.5x higher than the year-to-date 2022 total.
- U.S.-based media and entertainment issuers led February defaults, but the retail sector leads defaults year to date with seven (over 30% of the global tally).
- We forecast the U.S. and European trailing-12-month speculative-grade corporate default rates could rise to 4% and 3.25%, respectively, by December 2023.
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.
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).
|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|
|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®.|
|2023 Global Corporate Default Tally Reaches 23|
Moran Foods LLC (SAL Acquisition Corp.)
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)
Mexarrend S.A.P.I. de C.V.
|Mexico||Financial institutions||D||CC||Missed principal and interest payments|
Serta Simmons Bedding LLC
Bed Bath & Beyond Inc.
|U.S.||Retail/restaurants||D||CC||Missed principal and interest payments|
Cooper-Standard Holdings Inc.
Missouri TopCo Ltd.
|U.K.||Consumer products||SD||CCC-||Distressed exchange|
|Brazil||Telecommunications||D||CCC-||Missed principal and interest payments|
KNB Holdings Corp.
Yak Access LLC
|U.S.||Capital goods||D||CCC||Distressed exchange|
K&N Parent Inc.
99 Cents Only Stores LLC
Avaya Holdings Corp.
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
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.
|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®.|
- Equinox Holdings Inc. Downgraded To 'SD' From 'CCC-' On Revolver Maturity Extension, Feb. 28, 2023
- Rising Tide Holdings Inc. Downgraded To 'SD' On Completion Of Distressed Exchange; Debt Ratings Lowered To 'D', Feb. 28, 2023
- This Month In Credit: Consumer Health Complicates Credit Picture (February 2023), Feb. 27, 2023
- Bausch Health Cos. Inc. Downgraded To 'SD' On Below-Par Debt Repurchases; Unsecured Notes Rating Lowered To 'D', Feb. 24, 2023
- Altisource Portfolio Solutions S.A. Downgraded To 'SD' From 'CC' On Completed Distressed Exchange, Feb. 22, 2023
- Telepizza Group Subsidiary Foodco Bondco SAU Downgraded To 'SD' (Selective Default) On Standstill Agreement, Feb. 22, 2023
- Premier Brands Group Holdings LLC Downgraded To 'SD' On Distressed Exchange; Debt Rating Lowered To 'D', Feb. 17, 2023
- AMC Entertainment Holdings Inc. Downgraded To 'SD' From 'CC' Following Completion Of Distressed Exchange, Feb. 17, 2023
- Growing Strains Could Push The U.S. Speculative-Grade Corporate Default Rate To 4% By December 2023, Feb. 16, 2023
- The European Speculative-Grade Corporate Default Rate Could Rise To 3.25% By December 2023, Amid Uncertain Backdrop, Feb. 16, 2023
- 99 Cents Only Stores LLC Downgraded To 'SD' On Temporary Deferral Of Preferred Dividends, Feb. 15, 2023
- Avaya Holdings Corp. Downgraded To 'D' From 'CC' Following Chapter 11 Bankruptcy Filing, Feb. 15, 2023
- Diamond Sports Holdings LLC And Subsidiary Downgraded To 'D' From 'CCC-' On Missed Interest Payments, Feb. 15, 2023
- K&N Parent Inc. Downgraded To 'D' From 'CCC-' Following Distressed Transaction; Debt Ratings Lowered To 'D', Feb. 14, 2023
- Yak Access LLC Downgraded To 'D' On Debt Restructuring, Feb. 10, 2023
- KNB Holdings Corp. Downgraded To 'D' On Chapter 11 Bankruptcy Filing, Feb. 9, 2023
- Oi S.A. Downgraded To 'D' From 'CCC-' After Receiving Judicial Protection From Creditors, Feb. 3, 2023
More analysis and statistics are available in our annual default studies, published on RatingsDirect:
Corporate (Financial And Nonfinancial)
- 2021 Annual Global Financial Services Default And Rating Transition Study
- 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 European Corporate Default And Rating Transition Study
- 2021 Annual Asia Corporate Default And Rating Transition Study
- 2021 Annual Taiwan Ratings Corp. Corporate Default And Rating Transition Study
- 2021 Annual Greater China Corporate Default And Rating Transition Study
- 2021 Annual Emerging And Frontier Markets Corporate Default And Rating Transition Study
- 2021 Global Structured Finance Defaults And Rating Transition Study
- 2021 Annual Japanese Structured Finance Default And Rating Transition Study
- 2021 Annual European Structured Finance Default And Rating Transition Study
- 2021 Annual Taiwan Structured Finance Default And Rating Transition Study
- 2021 Annual Mexican Structured Finance Default And Rating Transition Study
- 2021 Annual Global Leveraged Loan CLO Default And Rating Transition Study
- 2021 Annual U.S. Public Finance Default And Rating Transition Study
- 2021 Annual International Public Finance Default And Rating Transition Study
- 2021 Annual Mexican National Scale Corporate And Public Finance Default And Rating Transition Study
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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