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Default, Transition, and Recovery: Monthly Default Tally Reached Four-Year High In April

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Default, Transition, and Recovery: Monthly Default Tally Reached Four-Year High In April

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S&P Global Ratings' 2024 global corporate default tally has reached 55 after the following defaults in April:

  • Chilean telecom service provider Wom S.A.
  • U.S. IT provider Rackspace Technology Global Inc.
  • U.S. footwear manufacturer Never Slip Topco Inc.
  • Luxembourg-based industrial machinery manufacturer Arvos LuxCo S.a.r.l.
  • Canadian iron ore mining Baffinland Iron Mines Corp.
  • U.S. provider of infrastructure technology solutions Casa Systems Inc.
  • U.S. collaboration technology service provider ConvergeOne Holdings Inc.
  • Dutch silicone release liner manufacturer Loparex Midco B.V.
  • U.S. retailer 99 Cents Only Stores LLC
  • U.S. fashion retailer Express Inc.
  • U.S. beverage co-manufacturer City Brewing Co. LLC
  • U.S. eyecare service provider EyeCare Partners LLC
  • U.S. advertising solution service provider Digital Media Solutions Inc.
  • Dutch garden consumer product manufacturer Keter Group B.V.
  • Canadian broadband service provider Xplore Inc.
  • Three confidential issuers

Defaults More Than Doubled In April

After a slight lull in defaults in March, April experienced a sharp spike in defaults, which increased to 18, from eight in March. Year-to-date defaults amount to 55, which is on par with the number of defaults in the same period last year, and exceed the 10-year average by 25%.

The monthly default tally increased across geographies. The U.S. led with 56%, followed by Europe (22%), other developed regions (11%), and emerging markets (11%). The number of defaults in the U.S. doubled to 10 in April, compared with March, and increased to four in Europe, from three in the previous month. Year-to-date defaults in Europe are currently at their highest levels since 2008. Defaults in April accounted for one-third of defaults year to date (see chart 1).

Chart 1

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Defaulted Debt Almost Halved

Defaulted debt decreased to $8.6 billion in April, from $16.3 billion in March (see chart 2). The high amount of defaulted debt in March mainly resulted from the default of U.S. telecommunications company Lumen Technologies Inc.

Most of the defaulted debt in April came from the U.S. with $7.1 billion, or 85%, of total defaulted debt, from $15.4 billion (94% of the total) in March.

Unlike in March, when most defaulted debt came from the telecommunications sector, the high technology and consumer products sectors were the main contributors to the volume of defaulted debt in April (see chart 3). High technology accounted for 41% and consumer products for 26% of defaulted debt volumes, which translated into $5.8 billion of defaulted debt in April. Still tight market conditions and exceedingly high costs of debt limited companies' ability to obtain favorable refinancing conditions, while their liquidity continued to deteriorate.

Chart 2

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Chart 3

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Defaults Mainly Resulted From Distressed Exchanges And Bankruptcies

Distressed exchanges led to the default of 28 companies year to date and remain the main reason for defaults in 2024. They accounted for 44% of defaults in April and 51% of year-to-date defaults. As companies become comfortable with higher leverage levels in their capital structures, they continue to use distressed exchanges to manage looming maturity dates. Europe is driving this trend, with distressed exchanges causing all defaults of publicly rated companies in April. In the U.S., 44% of total publicly rated defaults in April resulted from distressed exchanges and 56% from bankruptcies.

In addition to distressed exchanges, bankruptcies in April led to four defaults in the U.S., one default in Canada, and one in Chile. The number of defaulting issuers filing for bankruptcy increased to six in April, from one in March (see chart 4). In comparison, the total number of issuers filing for bankruptcy in the first quarter of 2024 was seven. Looming maturities, strained operations, and elevated refinancing costs were among the main reasons for the increase in bankruptcies. In general, bankruptcies slowed in recent years, with most issuers leaning toward distressed exchanges. Defaulted issuers that opted for bankruptcy filings faced increasing free operating cash flow deficits, weak operating metrics, or liquidity issues.

Chart 4

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Consumer Products Sector Led Defaults In April

The consumer products sector contributed to four of the 18 defaults in April, while another three defaults came from the media and entertainment sector (see chart 5). Defaults in both sectors resulted from distressed exchanges and bankruptcies alike. Year-to-date, these two sectors continue to lead the tally, with each sector accounting for 10 defaults. The consumer products sector has consistently been the highest contributor to defaults since the start of the COVID-19-induced recession. If spending remains subdued, this trend could continue (see chart 6).

Chart 5

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Chart 6

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Table 1

We expect U.S. and Europe default rates will increase over the coming months
Region 12-month trailing speculative-grade default rate (%) Weakest links
U.S. 4.91* 199
Emerging markets 1.8 13
Europe 4.12* 52
Other developed 4.3 10
Global 3.9 274
*Trailing-12-month speculative grade default rates for from April 30, 2023, to April 30, 2024, are preliminary and subject to change.Trailing-12-month speculative grade default rates from March 31, 2023, to March 31, 2024. Year-to-date data as of April 30, 2024. Weakest link data is as of April 30, 2024. Other developed 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 in 2024
Parent company Country/market Subsector To From Reason
Jan. 2, 2024

Resolute Investment Managers Inc.

U.S. Financial institutions D CC Distressed exchange
Jan. 4, 2024

Toro Private Holdings I Ltd.

U.K. Transportation D CC Distressed exchange
Jan. 5, 2024

AMT TopCo LLC

U.S. Health care D CCC Missed payments
Jan. 10, 2024

Ignition Topco B.V.

Netherlands Chemicals, packaging, and environmental services D CCC Missed payments
Jan. 11, 2024

Amphora Intermediate II Ltd.

U.K. Consumer products SD CCC+ Missed payments
Jan. 11, 2024 Confidential Confidential Metals, mining, and steel SD CC Confidential
Jan. 16, 2024

Covis Finco S.a.r.l.

Switzerland Health care SD CCC- Distressed exchange
Jan. 17, 2024

TMK Hawk Parent Corp.

U.S. Consumer products SD CC Distressed exchange
Jan. 18, 2024

KNS Holdco LLC

U.S. Consumer products SD B- Distressed exchange
Jan. 19, 2024

System1 Inc.

U.S. Media and entertainment SD CCC Distressed exchange
Jan. 24, 2024

New Trojan Parent Inc.

U.S. Consumer products D CCC- Bankruptcy
Jan. 26, 2024

Gol Linhas Aereas Inteligentes S.A.

Brazil Transportation D CCC- Bankruptcy
Jan. 31, 2024

AMC Entertainment Holdings Inc.

U.S. Media and entertainment SD CCC+ Distressed exchange
Jan. 31, 2024

Enjoy S.A.

Chile Media and entertainment D CCC- Bankruptcy
Feb. 5, 2024

Cano Health Inc.

U.S. Health care D CCC- Bankruptcy
Feb. 6, 2024

Astro Intermediate Holding II Corp.

U.S. Consumer products SD CCC Missed payments
Feb. 8, 2024

Pluto Acquisition I Inc.

U.S. Health care SD CC Distressed exchange
Feb. 9, 2024 Confidential Confidential Telecommunications D CC Confidential
Feb. 14, 2024

CLISA-Compania Latinoamericana de Infraestructura & Servicios S.A.

Argentina Capital goods SD CC Distressed exchange
Feb. 14, 2024

GoTo Group Inc.

U.S. High technology SD CCC+ Distressed exchange
Feb. 15, 2024

AFE S.A.

U.K. Financial institutions SD CC Distressed exchange
Feb. 16, 2024

Enviva Inc.

U.S. Utility D CCC- Missed payments
Feb. 16, 2024

Range Parent Inc.

U.S. Capital goods D CCC- Bankruptcy
Feb. 20, 2024

Vue Entertainment International Ltd

U.K. Media and entertainment SD CC Distressed exchange
Feb. 21, 2024

Hornblower HoldCo LLC

U.S. Media and entertainment D CCC- Bankruptcy
Feb. 21, 2024

Tribe Buyer LLC

U.S. Media and entertainment D CCC- Missed payments
Feb. 23, 2024

Avison Young (Canada) Inc.

Canada Financial institutions SD CCC Missed payments
Feb. 26, 2024

Apex Tool Group LLC

U.S. Forest products and building materials SD CCC+ Distressed exchange
Feb. 26, 2024

Radiology Partners Holdings LLC

U.S. Health care SD CC Distressed exchange
March 5, 2024

Curo Group Holdings Corp.

U.S. Financial institutions SD CCC- Missed payments
March 18, 2024

Hurtigruten Group AS

Norway Media and entertainment SD CC Distressed exchange
March 19, 2024

JOANN Inc.

U.S. Retail/restaurants D CCC Bankruptcy
March 22, 2024

Lumen Technologies Inc.

U.S. Telecommunications SD CC Distressed exchange
March 27, 2024

Samhallsbyggnadsbolaget i Norden AB (publ)

Sweden Homebuilders/real estate companies SD CCC+ Distressed exchange
March 29, 2024

Atlas Midco Inc.

U.S. High technology D CCC+ Distressed exchange
March 29, 2024

Aventiv Technologies LLC

U.S. Telecommunications SD CC Distressed exchange
March 29, 2024

La Financiere Atalian SAS

France Consumer products D CC Distressed exchange
April 1, 2024

Wom S.A.

Chile Telecommunications D CCC Bankruptcy
April 3, 2024

Rackspace Technology Global Inc.

U.S. High technology SD CCC- Distressed exchange
April 4, 2024

Never Slip Topco Inc.

U.S. Consumer products D CCC- Bankruptcy
April 5, 2024

Arvos LuxCo S.a.r.l.

Luxembourg Capital goods D CC Distressed exchange
April 5, 2024

Baffinland Iron Mines Corp.

Canada Metals, mining, and steel SD CCC Distressed exchange
April 5, 2025

Casa Systems Inc.

U.S. High technology D CCC+ Bankruptcy
April 5, 2024

ConvergeOne Holdings Inc.

U.S. Media and entertainment D CCC+ Bankruptcy
April 8, 2024

Loparex Midco B.V.

Netherlands Forest products and building materials SD CCC+ Distressed exchange
April 9, 2024 Confidential Confidential Media and entertainment D CCC- Confidential
April 10, 2024

99 Cents Only Stores LLC

U.S. Retail/restaurants D CCC Bankruptcy
April 22, 2024

Express Inc.

U.S. Consumer products D NR Bankruptcy
April 23, 2024

City Brewing Co. LLC

U.S. Consumer products SD CCC Distressed exchange
April 24, 2024

EyeCare Partners LLC

U.S. Health care SD CCC Distressed exchange
April 25, 2024 Confidential Confidential Homebuilders/real estate companies SD CCC+ Confidential
April 29, 2024

Digital Media Solutions Inc.

U.S. Media and entertainment SD CCC Distressed exchange
April 29, 2024

Keter Group B.V.

Netherlands Consumer products SD CC Distressed exchange
April 29, 2024

Xplore Inc.

Canada Telecommunications D CCC- Missed payments
April 29, 2024 Confidential Confidential Retail/restaurants SD CCC+ Confidential
Data as of April 30, 2024. 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 analyses and statistics are available in our annual default studies, published on RatingsDirect:

Corporate (financial and non-financial)
Structured finance
Public finance
Sovereign and international public finance

This report does not constitute a rating action.

Credit Research & Insights:Ekaterina Tolstova, Frankfurt +49 173 6591385;
ekaterina.tolstova@spglobal.com
Nicole Serino, New York + 1 (212) 438 1396;
nicole.serino@spglobal.com

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