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Default, Transition, and Recovery: U.S. Defaults To Rise After October Lull

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Credit Quality Improved At A Slower Pace In Third Quarter 2023


Default, Transition, and Recovery: U.S. Defaults To Rise After October Lull

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S&P Global Ratings' 2023 global corporate default tally has reached 127, following nine defaults in October:

  • U.S.-based plastic packaging manufacturer Poseidon Investment Intermediate L.P.,
  • Azerbaijan-based financial service provider Muganbank OJSC,
  • U.S.-based air medical transportation service provider Air Methods Corp.,
  • Canada-based diagnostic imaging operator Akumin Inc.,
  • U.S.-based drugstore retailer Rite Aid Corp.,
  • Canada-based drilling contractor Ensign Energy Services Inc.,
  • Brazil-based transportation infrastructure group Investimentos e Participacoes em Infraestrutura S.A. - Invepar, and
  • Two confidential issuers.

Fewer defaults in the U.S. contributed to much of this month's global slowdown in defaults. In October, the U.S. saw its lowest monthly level of defaults so far this year (see chart 1). However, the 2023 U.S. tally is still over two times 2022 levels and we do not expect this lull to last. The number of risky credits in the U.S. and Canada remains elevated at 181 and 76% are at risk of a further downgrade or default (see "Risky Credits: North American Telecoms In The Spotlight," Nov. 1, 2023).

Chart 1

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Latin America Continues To Dominate Emerging Market Defaults

Emerging markets and the other developed region (consisting of Canada, Japan, Australia, and New Zealand) saw higher defaults in October. Defaults from Latin America have been boosting defaults in the emerging markets region this year--contributing to 88% of total defaults. Most of these defaults have been due to a distressed exchange or missed interest payment, triggered by liquidity strains, refinancing risk, and necessary capital restructuring (see "Latin America Sector Roundup Q4 2023: Uneven Trends Amid Rising Crosscurrents," Oct. 24, 2023).

Chart 2

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Health Care Led Defaults In October While Oil And Gas Recorded Its First Default In 2023

The health care sector led defaults in October with two, one each in the U.S. and Canada. This brought the year-to-date tally to 14--more than double the previous year. We have also seen more downgrades in the sector this year, particularly among speculative-grade health care issuers, as higher interest rate expenses pressure margins and cash flow (see "This Month In Credit: On Fragile Footing," Oct. 27, 2023).

Meanwhile, the oil and gas sector recorded its first default in 2023 after Canada-based drilling contractor Ensign Energy Services Inc. selectively defaulted due to a distressed exchange after facing refinancing risk. The sector continues to see more upgrades than downgrades in 2023, even across speculative-grade rating categories, as issuers demonstrate resilient cash flow (see "Industry Top Trends Update North America: Oil and Gas," July 18, 2023).

Chart 3

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Chart 4

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Chart 5

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Table 1

We estimate the U.S. default rate will remain 4.1%
Region 12-month trailing speculative-grade default rate (%) Weakest links
U.S. 4.1* 229
Emerging markets 1.8 27
Europe 2.9* 49
Other developed 2.9 9
Global 3.3 314
*Trailing-12-month speculative grade default rates are preliminary and subject to change. Year-to-date data as of Oct. 31, 2023. Weakest link data is as of Sept. 30, 2023. Other developed region 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 corporate defaults so far in 2023
Date Parent company Country/Market Subsector To From Reason
Jan. 3, 2023

Moran Foods LLC (SAL Acquisition Corp.)

U.S. Retail/restaurants SD CCC+ Distressed exchange
Jan. 16, 2023

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

Brazil Retail/restaurants D B Missed principal and interest payments
Jan. 19, 2023

Party City Holdings Inc. (PC Nextco Holdings LLC)

U.S. Retail/restaurants D CCC Bankruptcy
Jan. 20, 2023

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

Mexico Financial institutions D CC Missed principal and interest payments
Jan. 24, 2023

Serta Simmons Bedding LLC

U.S. Consumer products D CCC- Bankruptcy
Jan. 27, 2023

Bed Bath & Beyond Inc.(A)

U.S. Retail/restaurants D CC Missed principal and interest payments
Jan. 30, 2023

Cooper-Standard Holdings Inc.

U.S. Automotive SD CC Distressed exchange
Jan. 31, 2023

Missouri TopCo Ltd.

U.K. Consumer products SD CCC- Distressed exchange
Jan. 31, 2023

Invacare Corp.

U.S. Health care D NR Bankruptcy
Feb. 3, 2023

Oi S.A.

Brazil Telecommunications D CCC- Missed principal and interest payments
Feb. 9, 2023

KNB Holdings Corp.

U.S. Consumer products D CCC- Bankruptcy
Feb. 10, 2023

Yak Access LLC

U.S. Capital goods D CCC Distressed exchange
Feb. 14, 2023

K&N Parent Inc.

U.S. Automotive D CCC- Distressed exchange
Feb. 15, 2023

99 cents only stores LLC

U.S. Retail/restaurants SD CCC+ Missed payments
Feb. 15, 2023

Avaya Holdings Corp.

U.S. High technology D CC Bankruptcy
Feb. 15, 2023

Diamond Sports Group LLC

U.S. Media and entertainment D CCC- Missed interest payments
Feb. 16, 2023

Stanadyne Holdings Inc.

U.S. Capital goods D NR Bankruptcy
Feb. 16, 2023 Confidential Confidential Media and entertainment D CC Confidential
Feb. 17, 2023

AMC Entertainment Holdings Inc.

U.S. Media and entertainment SD CC Distressed exchange
Feb. 17, 2023

Premier Brands Group Holdings LLC

U.S. Consumer products SD CCC Distressed exchange
Feb. 22, 2023

Altisource Portfolio Solutions S.A.

Luxembourg Financial institutions SD CC Distressed exchange
Feb. 22, 2023

Foodco Bondco SAU

Spain Retail/restaurants SD CCC- Missed interest payments
Feb. 24, 2023

Bausch Health Cos. Inc.

Canada Health care SD CCC+ Distressed exchange
Feb. 28, 2023

Equinox Holdings Inc.

U.S. Media and entertainment SD CCC- Distressed exchange
Feb. 28, 2023

Rising Tide Holdings Inc.(A)

U.S. Retail/restaurants SD CC Distressed exchange
Mar. 1, 2023

Akorn Operating Co. LLC

U.S. Health care D CCC+ Bankruptcy
Mar. 2, 2023

Community Health Systems Inc.

U.S. Health care SD B- Distressed exchange
Mar. 6, 2023

LendingTree Inc.

U.S. Media and entertainment SD B- Distressed exchange
Mar. 10, 2023

Loyalty Ventures Inc.

U.S. Media and entertainment D CCC+ Bankruptcy
Mar. 10, 2023

Silicon Valley Bank

U.S. Financial institutions D BBB Regulatory
Mar. 14, 2023

Bioplan USA Inc.

U.S. Media and entertainment D CCC Out-of-court restructuring
Mar. 14, 2023

Gol Linhas Aereas Inteligentes S.A.

Brazil Transportation SD CC Distressed exchange
Mar. 14, 2023

Technicolor Creative Studios

France Media and entertainment D CCC- Missed interest payments
Mar. 16, 2023

Mallinckrodt plc

Ireland Health care SD B- Distressed exchange
Mar. 17, 2023

National CineMedia Inc.

U.S. Media and entertainment D CCC- Missed interest payments
Mar. 17, 2023

SVB Financial Group

U.S. Financial institutions D NR Regulatory
Mar. 20, 2023

TV Azteca S.A. de C.V.

Mexico Media and entertainment D NR Bankruptcy
Mar. 23, 2023

Flint HoldCo S.a.r.l.

Luxembourg Chemicals, packaging, and environmental services SD CCC Missed principal payments
Mar. 31, 2023

Toro Private Holdings I Ltd.

U.K. Transportation SD CCC+ Distressed exchange
Mar. 31, 2023

Wahoo Fitness Acquisition LLC

U.S. Consumer products D CCC- Missed principal and interest payments
Apr. 5, 2023

FQM (Akubra) Inc.

Canada Metals, mining, and steel D NR Bankruptcy
Apr. 6, 2023

Lannett Co. Inc.

U.S. Health care SD CCC+ Missed interest payments
Apr. 6, 2023

Rodan & Fields LLC

U.S. Consumer products D CCC- Out-of-court restructuring
Apr. 6, 2023

Covis Finco S.a.r.l.

Switzerland Health care SD CCC+ Distressed exchange
Apr. 6, 2023 Confidential Confidential Capital goods D CCC- Confidential
Apr. 10, 2023

QualTek LLC

U.S. Capital goods SD CCC+ Missed interest payments
Apr. 10, 2023 Confidential Confidential Media and entertainment D CC Confidential
Apr. 12, 2023 Confidential Confidential Utlities D CCC- Confidential
Apr. 12, 2023

Guacolda Energia S.A.(A)

Chile Utlities D CC Distressed exchange
Apr. 17, 2023

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

Luxembourg Homebuilders/real estate companies SD CC Distressed exchange
Apr. 17, 2023

David's Bridal Inc.

U.S. Consumer products D NR Bankruptcy
Apr. 19, 2023

Skillz Inc.

U.S. Media and entertainment SD CCC+ Distressed exchange
Apr. 24, 2023 Bed Bath & Beyond Inc.(B) U.S. Retail/restaurants D CCC- Bankruptcy
Apr. 27, 2023

Burger BossCo Intermediate Inc.

U.S. Retail/restaurants D CCC- Missed principal and interest payments
Apr. 27, 2023

Grupo IDESA S.A. de C.V.

Mexico Chemicals, packaging, and environmental services SD CC Distressed exchange
May. 1, 2023

FXI Holdings Inc.

U.S. Chemicals, packaging, and environmental services SD CC Distressed exchange
May. 2, 2023 Confidential Confidential Consumer products D CCC- Confidential
May. 2, 2023

WeWork Cos. LLC

U.S. Media and entertainment SD CC Distressed exchange
May. 5, 2023

Frigoglass SAIC

Greece Consumer products SD CC Distressed exchange
May. 8, 2023

CatLuxe S.a.r.l. (CatLuxe Acquistion S.a.r.l.)

Luxembourg Consumer products D CC Out-of-court restructuring
May. 10, 2023

Range Parent Inc.

U.S. Capital goods SD CCC Distressed exchange
May. 15, 2023

Telesat Canada (Telesat Holdings Inc.)

Canada Telecommunications SD CCC+ Distressed exchange
May. 16, 2023

Envision Healthcare Corp. (Envision Healthcare Holdings Inc.)

U.S. Health care D CCC Bankruptcy
May. 16, 2023

Monitronics International Inc.

U.S. Media and entertainment D CCC Bankruptcy
May. 17, 2023

At Home Group Inc.

U.S. Retail/restaurants SD CCC+ Distressed exchange
May. 17, 2023

CareerBuilder LLC

U.S. Media and entertainment SD CCC Distressed exchange
May. 18, 2023

Curo Group Holdings Corp.

U.S. Financial institutions SD B- Distressed exchange
May. 18, 2023

Venator Materials PLC

U.K. Chemicals, packaging, and environmental services D CCC- Bankruptcy
May. 22, 2023

LifeScan Global Corp.

U.S. Health care SD CC Distressed exchange
May. 24, 2023 Confidential Confidential Media and entertainment D CCC Confidential
May. 29, 2023 Confidential Confidential Forest products and building materials SD CCC- Confidential
Jun. 1, 2023

Genesis Care Pty Ltd.

Australia Health care D CCC- Bankruptcy
Jun. 1, 2023

Lucky Bucks LLC

U.S. Media and entertainment D CCC- Missed principal and interest payments
Jun. 2, 2023

Diebold Nixdorf Inc.

U.S. High technology D CC Bankruptcy
Jun. 4, 2023

PGX Holdings Inc.

U.S. Media and entertainment D NR Bankruptcy
Jun. 5, 2023

KCIBT Holdings L.P.

U.S. Consumer products SD CCC Distressed exchange
Jun. 6, 2023

Cyxtera Technologies Inc.

U.S. Telecommunications D CCC- Bankruptcy
Jun. 7, 2023

U.S. TelePacific Holdings Corp.

U.S. Telecommunications SD CCC- Distressed exchange
Jun. 9, 2023

Tacora Resources Inc.

Canada Metals, mining, and steel D CCC- Missed interest payments
Jun. 12, 2023

InterCement Brasil S.A. (InterCement Participacoes S.A.)

Brazil Forest products and building materials SD CC Missed principal and interest payments
Jun. 13, 2023

Instant Brands Holdings Inc.

U.S. Consumer products D CCC- Bankruptcy
Jun. 21, 2023

Photo Holdings LLC

U.S. Media and entertainment SD CC Distressed exchange
Jun. 23, 2023

URS Holdco Inc.

U.S. Transportation SD CCC+ Distressed exchange
Jun. 30, 2023 Confidential Confidential Aerospace and defense D CCC- Confidential
Jul. 14, 2023

Azul S.A.

Brazil Transportation SD CC Distressed exchange
Jul. 14, 2023

NSA International LLC

U.S. Consumer products D CCC- Distressed exchange
Jul. 18, 2023

MVK Intermediate Holdings LLC

U.S. Consumer products SD CCC- Missed interest payments
Jul. 18, 2023

Mallinckrodt plc

Ireland Health care SD CCC Missed interest payments
Jul. 20, 2023

Anchor Glass Container Corp.

U.S. Chemicals, packaging, and environmental services SD CCC Missed interest payments
Jul. 21, 2023

Exela Technologies Inc.

U.S. Media and entertainment SD CC Distressed exchange
Jul. 28, 2023

U.S. Renal Care Inc.

U.S. Health care D CCC+ Distressed exchange
Aug. 1, 2023 Confidential Confidential Homebuilders/real estate companies SD CCC- Confidential
Aug. 1, 2023 Confidential Confidential Capital Goods D CCC Confidential
Aug. 4, 2023 Confidential Confidential Media and entertainment SD CC Confidential
Aug. 7, 2023

Western Global Airlines Inc.

U.S. Transportation D NR Bankruptcy
Aug. 8, 2023

Takko Fashion S.a.r.l.

Luxembourg Consumer products D CC Distressed exchange
Aug. 8, 2023

Yellow Corp.

U.S. Transportation D CC Bankruptcy
Aug. 9, 2023 Confidential Confidential Homebuilders/real estate companies SD CCC Confidential
Aug. 10, 2023

Rackspace Technology Global Inc.

U.S. High technology SD CCC+ Distressed exchange
Aug. 16, 2023

CNG Holdings Inc.

U.S. Financial institutions SD CC Distressed exchange
Aug. 16, 2023 Guacolda Energia S.A (B) Chile Utlities D CC Distressed exchange
Aug. 16, 2023

Strategic Materials Holding Corp.

U.S. Chemicals, packaging, and environmental services D CC Missed principal and interest payments
Aug. 21, 2023

Pure Fishing Inc.

U.S. Media and entertainment SD CCC Distressed exchange
Aug. 22, 2023

Dawn Acquisitions LLC (Infra Colodata Holdings LLC)

U.S. Telecommunications SD CCC Distressed exchange
Aug. 25, 2023

Maverick Gaming LLC

U.S. Media and entertainment SD B- Distressed exchange
Aug. 28, 2023

Digital Media Solutions Inc.

U.S. Media and entertainment SD CCC+ Distressed exchange
Aug. 31, 2023

Casino Guichard - Perrachon S.A.

France Retail/restaurants D CC Missed interest payments
Sep. 1, 2023

Carvana Co.

U.S. Automotive D CC Distressed exchange
Sep. 7, 2023

Cornerstone Chemical Co.

U.S. Chemicals, packaging, and environmental services D CC Missed interest payments
Sep. 11, 2023

Haya Holdco 2 PLC

Spain Consumer products D CC Distressed exchange
Sep. 13, 2023

Learfield Communications LLC

U.S. Media and entertainment SD CCC- Distressed exchange
Sep. 15, 2023 Confidential Confidential Transportation SD CC Confidential
Sep. 19, 2023

Sunac China Holdings Ltd.

Cayman Island Homebuilders/real estate companies D NR Bankruptcy
Sep. 21, 2023

Ideal Standard International S.A.

Luxembourg Forest products and building materials D CC Distressed exchange
Sep. 21, 2023 Confidential Confidential Capital goods SD CCC+ Confidential
Sep. 21, 2023 Rising Tide Holdings Inc.(B) U.S. Retail/restaurants SD CCC Distressed exchange
Sep. 21, 2023

Wheel Pros Inc.

U.S. Automotive SD CCC Distressed exchange
Sep. 25, 2023 Confidential Confidential Capital goods SD CC Confidential
Oct. 4, 2023

Poseidon Investment Intermediate L.P.

U.S. Chemicals, packaging, and environmental services SD CCC+ Distressed exchange
Oct. 4, 2023 Confidential Confidential Consumer products SD CCC+ Confidential
Oct. 13, 2023

Ensign Energy Services Inc.

Canada Oil and gas SD CCC Distressed exchange
Oct. 16, 2023

Rite Aid Corp.

U.S. Retail/restaurants D CCC- Bankruptcy
Oct. 19, 2023 Confidential Confidential Media and entertainment SD CCC Confidential
Oct. 24, 2023

Akumin Inc.

Canada Health care D CCC Bankruptcy
Oct. 25, 2023

Air Methods Corp.

U.S. Health care D CCC Bankruptcy
Oct. 25, 2023

Investimentos e Participacoes em Infraestrutura S.A. - Invepar

Brazil Transportation D CCC- Distressed exchange
Oct. 25, 2023

Muganbank OJSC

Azerbaijan Financial institutions D B- Regulatory
Data as of Oct. 31, 2023. NR--Not rated. SD--Selective default. (A) indicates an issuer's first default this year. (B) indicates an issuer's second default this year. 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;
nicole.serino@spglobal.com
Patrick Drury Byrne, Dublin (00353) 1 568 0605;
patrick.drurybyrne@spglobal.com
Research Contributor:Vaishali Singh, Pune;
vaishali.singh2@spglobal.com

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