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Default, Transition, and Recovery: Global Corporate Default Tally Reaches 50


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Default, Transition, and Recovery: Global Corporate Default Tally Reaches 50


S&P Global Ratings' 2023 global corporate default tally has reached 50 following 13 defaults in April:

  • U.S.-based skin care company Rodan & Fields LLC
  • Chilean-based coal-fired power generator Guacolda Energia S.A.
  • U.S.-based quick service restaurants operator Burger BossCo Intermediate Inc.
  • U.S.-based specialty retailer Bed Bath & Beyond Inc.
  • U.S-based mobile gaming platform operator Skillz Inc.
  • Luxembourg-incorporated residential real estate holding company Adler Group S.A.
  • U.S.-based communication infrastructure and renewable energy services provider QualTek LLC
  • Swiss-based pharmaceutical company Covis Finco S.a.r.l.
  • U.S.-based manufacturer of generic pharmaceutics Lannett Co. Inc.
  • Mexico-based petrochemicals producer Grupo Idesa S.A. de C.V.
  • And three confidential issuers.

With 13 defaults in April, the year-to-date global default tally stands at 50, more than 75% above last year's tally and 25% higher than the 10-year average. (see chart 1). Despite the sharp rise so far this year, the number of defaults in April was lower than that of March by one, the second month-on-month decline in a row. However, the number of weakest links as of March 31 was up by 18 from the end of February, indicating increased future default pressure (see table 1).

Latin America Pushes Up Defaults In Emerging Markets

All eight emerging market defaults so far this year--four of which were in April alone--were in Latin America, versus only two Latin American defaults for the same period in 2022. The region's extremely tight financing conditions are exacerbating companies' funding costs and heightening credit stress for entities that already had precarious liquidity positions. (see "Risky Credits: Emerging Market Default Risk Centers On Latin America", April 28, 2023). We think the default risk in emerging markets remains high because weakest links (defined as issuers rated 'B-' and below with either negative outlooks or on CreditWatch with negative implications) increased to 38 from 28 during March. In addition, the negative bias among risky credits (defined as issuers in the 'CCC' rating category) surged to 80%.

Greater Number Of Sectors Contributed To Defaults In April

Defaults during April came from a wide number of sectors. Eight sectors contributed to the tally, with two each from health care, capital goods, media and entertainment, utilities, and retail/restaurants.

Distressed Exchanges Remain The Leading Reason For Default This Year

Five out of 13 defaults in April were due to distressed exchanges. This led to a total of 21 so far this year--42% of all defaults, and 2.6x higher than the same period in 2022 (eight defaults). The number of distressed exchanges has risen as distressed issuers view out-of-court restructuring more favorably than other options, such as a traditional bankruptcy.

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Table 1

Increase in weakest links indicates rising default pressure
Region 12-month trailing speculative-grade default rate (%) Weakest links
U.S. *2.42 203
Emerging markets 1.9 38
Europe *2.70 47
Other developed regions 2.2 11
Global 2.4 299
*Trailing 12-month speculative-grade default rates from April 30, 2023 are preliminary and subject to change. Year-to-date data as of April 30, 2023. Weakest link data is as of March 31, 2023. Other developed regions includes Australia, Canada, Japan, and New Zealand. Default counts may include confidentially-rated issuers. Sources: S&P Global Ratings Credit Research and S&P Global Market Intelligence's CreditPro®.

Table 2

Global default tally through April 30 stands at 50
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.(A)

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 interest 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 interest 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

Akorn Operating Co. LLC

U.S. Health care D CCC+ Bankruptcy

Community Health Systems Inc.

U.S. Health care SD B- Distressed exchange

LendingTree Inc.

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

Loyalty Ventures Inc.

U.S. Media and entertainment D CCC+ Bankruptcy

Silicon Valley Bank

U.S. Financial institutions D BBB Regulatory

Bioplan USA Inc.

U.S. Media and entertainment D CCC Out-Of-Court Restructuring

Gol Linhas Aereas Inteligentes S.A.

Brazil Transportation SD CC Distressed exchange

Technicolor Creative Studios

France Media and entertainment D CCC- Missed interest payments

Mallinckrodt PLC

Ireland Health care SD B- Distressed exchange

National CineMedia Inc.

U.S. Media and entertainment D CCC- Missed interest payments

SVB Financial Group

U.S. Financial institutions D NR Regulatory

Flint HoldCo S.a.r.l.

Luxembourg Chemicals, packaging, and environmental services SD CCC Missed principal payments

Toro Private Holdings I Ltd.

U.K. Transportation SD CCC+ Distressed exchange

Wahoo Fitness Acquisition LLC

U.S. Consumer products D CCC- Missed principal and interest payments

Lannett Co. Inc.

U.S. Health care SD CCC+ Missed interest payments

Rodan & Fields LLC

U.S. Consumer products D CCC- Out-Of-Court Restructuring

Covis Finco S.a.r.l.

Switzerland Health care SD CCC+ Distressed exchange
4/6/2023 Confidential Confidential Capital goods D CCC- Confidential

QualTek LLC

U.S. Capital goods SD CCC+ Missed interest payments
4/10/2023 Confidential Confidential Media and entertainment D CC Confidential
4/12/2023 Confidential Confidential Utilities D CCC- Confidential

Guacolda Energia S.A.

Chile Utilities D CC Distressed exchange

Adler Group S.A. (ADO Group Ltd.)

Luxembourg Homebuilders/real estate companies SD CC Distressed exchange

Skillz Inc.

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

Bed Bath & Beyond Inc.(B)

U.S. Retail/restaurants D CCC- Bankruptcy

Burger BossCo Intermediate Inc.

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

Grupo Idesa S.A. de C.V.

Mexico Chemicals, packaging, and environmental services SD CC Distressed exchange
Data as of April 30, 2023. NR--Not rated. SD--Selective default. 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:Sarah Limbach, Paris + 33 14 420 6708;
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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