Since the beginning of 2020, secured debtholders had received 95% of par, on average, in the form of cash, preferred stock, and common equity for US$130 million of secured notes due 2023. In 2005, the speculative-grade share of European corporate ratings peaked near 21%, and once the cycle turned, the European speculative-grade default rate peaked at 9.9% in November 2009. Fourth quarter earnings releases have provided insight into corporate margin pressures, but labor market commentary signals that some of these headwinds may be abating. Following a year marked by one of the deepest recessions in the past 100 years, 2021 proved to be a year of better-than-expected economic recovery, despite the lingering COVID-19 pandemic. On May 11, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Chinese furniture maker Yihua Enterprise (Group) Co. Ltd. to 'SD' from 'CCC' after the issuer failed to make interest payment on its domestic medium-term notes due 2022. We utilize the Lorenz curve, a graphical representation of the proportionality of a distribution, as one measure of ratings performance, and we summarize this via the Gini coefficient. On Sept. 28, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC-' from 'SD' following the debt exchange. However, reported average ultimate recoveries [2] included in our data set of unrated project finance bank loans remained stable at 76.8% (Moody's) for the period 1983-2020. On Jan. 2, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Virginia-based aerospace and defense service provider Constellis Holdings LLC to 'SD' (selective default) from 'CC' after the company failed to make a mandatory principal payment on its $872 million first-lien term loan. The issuer halted production at some of its plants because of the impact of the coronavirus pandemic and reached an agreement with its senior secured lenders for a financial restructuring plan. In addition to these subsectors, this study groups insurance service providers (such as insurance brokers and third-party administrators that are rated according to corporate criteria) with the insurance industry. On April 2, 2020, S&P Global Ratings lowered its long-term issuer credit rating on U.K.-based oilfield services company KCA DEUTAG Alpha Ltd. to 'SD' from 'CCC+' after the issuer announced it would use the grace period for interest payments. Note: The totals included may differ from the counts in table 1 because defaults that are not rated at the beginning of the pool year are excluded. These average matrices are a true summary, the ratios of which represent the historical incidence of the ratings listed in the first column changing to the ones listed in the top row over the course of the multiyear period (see tables 33-40). On Sept. 9, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Luxembourg-based global airport ground handler Swissport Group S.a.r.l to 'SD' from 'CCC' after the issuer completed issuing 230 million super senior secured debt for liquidity purposes and was planning to issue another 70 million. The local currency senior unsecured rating is the preferred debt rating used for the proxy because it is usually consistent with the issuer credit rating. After beginning with heightened credit market stress and a 45-plus-day stretch without any speculative-grade issuance in the U.S. and Europe, 2019 ultimately saw only marginally higher default and downgrade rates than 2018. On May 26, 2020, S&P Global Ratings lowered its issuer credit rating on Oklahoma-based oil and gas exploration and production company Unit Corp. to 'D' from 'CC' after the issuer reorganized under Chapter 11 of the U.S. Bankruptcy Code. The issuer also amended the terms of its first- and second-lien credit agreements to extend the maturity of revolving credit and temporary allow itself to make partial PIK interest payments. For example, in the average one-year global transition matrix in table 33, each cell's weighted standard deviation is calculated from the series of that particular cell in each of the 40 cohorts beginning with the 1981 cohort and ending with the 2020 cohort. This also applies to transition matrices that span longer time horizons. The share of management teams citing labor shortages, now at less than a third of the peak in 3Q 2021, indicates loosening in the jobs market. On April 16, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Plano, Texas-based department store operator J.C. Penney Co. Inc. to 'D' from 'CCC' after the company announced it would not make an interest payment. Global: Default and recovery rates for sustainable project finance bank loans, 1983-2020 MOODY'S INVESTORS SERVICE. Corporate default rate climbed in December. Our data on defaulted corporate issuers globally shows that defaults among speculative-grade entities tend to be clustered in the third year after the initial rating, particularly in the 'B' rating category (see chart 9). Finally, PD estimates should also be compared across banks (EBA 2020). For the Gini ratios in tables 2, 27, and 28, the standard deviations are derived from the time series of Gini ratios for all of their constituent annual cohorts. In light of our expectation of a continued economic recovery and accommodative funding conditions in the coming year, Moody's Analytics Credit Transition Model projects the global default rate will fall to 1.7% at the end of this year. Reduced EBITDA amid the pandemic and oil price crisis in early 2020 stressed the operating performance of the issuer. In a small number of cases, we use the subordinated debt rating or the senior secured rating as the proxy. S&P Global Ratings lowers its rating on an obligor to 'D' or 'SD' if the obligor is conducting a distressed exchange offer. Therefore, we believe Serta Simmons' capital structure remains unsustainable, especially amid an uncertain economic environment that could continue to pressure operating performance and cash flow. Earlier, on April 21, 2020, we lowered the rating on the issuer to 'CC' from 'CCC' after it announced entering into a voluntary administration to undertake a proposed debt restructuring and recapitalization of the business. Sovereign default and recovery rates, 1983-2020 - Excel Data: 15 Sep 2009 . On July 28, 2020, we lowered the issuer credit rating to 'CC' from 'CCC- 'following the company's announcement that it commenced an offer to exchange any and all of its outstanding amounts of 5.75% notes due February 2021 for a combination of new 5.75% notes due February 2024 and an early tender/consent fee. On Dec. 7, 2020, S&P Global Ratings raised the issuer credit rating to 'B-' from 'SD' on improved liquidity with constraints from high leverage. On May 4, 2020, we raised the credit ratings to 'CCC' from 'SD' after the reduction of debt by approximately US$329 million. An administrator was appointed by the court, after the lenders moved to court. Earlier, on April 22, 2020, we lowered our issuer credit rating on Takko to 'CCC+' from 'B-', reflecting our view that the group's ability to service its financial commitments could be further strained. The negative outlook reflects that we could lower the rating on Outerstuff if operating underperformance continues to pressure liquidity such that we believe a default is inevitable within the subsequent six months. A 'D' rating is assigned when S&P Global Ratings believes that the default will be a general default and that the obligor will fail to pay all or substantially all of its obligations as they come due. Other sectors, such as consumer services, have had more frequent default cycles, both during and between economic cycles. The company faced intense earnings pressure due to years of market-share declines, further exacerbated by the stay-at-home orders and economic recession stemming from COVID-19. On Oct. 7, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Massachusetts-based foodservice equipment and supplies distributes TMK Hawk Parent Corp. to 'SD' from 'CCC' after the issuer completed a recapitalization transaction and issued a new US$120 million super-priority first out term loan, which was provided by a majority of its first-lien lenders. Measured on a dollar volume basis, Moody's global speculative-grade bond default rate ended 2009 at 15.6%, up from 5.9% at the end of 2008. On Aug. 5, 2020, S&P Global Ratings raised the issuer credit ratings to 'CCC+' from 'D', as the company completed a distressed restructuring and amended its first-and second-lien credit agreements. The high default rate for commodity sector in 2016 was caused by low oil prices, among other factors, and more than half of last year's 144 defaults documented by Moody's occurred in commodity . The company will not make the interest payments within the 30-day grace period. On March 26, 2020, we withdrew our issuer ratings at the company's request. Angola, Argentina, Armenia, Aruba, Azerbaijan, Bahamas, Bahrain, Bangladesh, Barbados, Belarus, Belize, Bhutan, Bolivia, Bosnia-Herzegovina, Brazil, Brunei Darussalam, Cambodia, Chile, China, Colombia, Costa Rica, Curacao, Dominican Republic, Ecuador, Egypt, El Salvador, Fiji, Gabon, Georgia, Ghana, Grenada, Guatemala, Honduras, Hong Kong, India, Indonesia, Israel, Jamaica, Jordan, Kazakhstan, Kenya, Korea (Republic of), Kuwait, Lebanon, Liberia, Macao Special Administrative Region of China, Malaysia, Marshall Islands, Mauritius, Mexico, Mongolia, Morocco, Namibia, Netherlands Antilles, Nigeria, Oman, Pakistan, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Qatar, Russian Federation, Saudi Arabia, Singapore, South Africa, Sri Lanka, Syrian Arab Republic, Taiwan, Thailand, Togo, Trinidad and Tobago, Tunisia, Turkey, Turks and Caicos Islands, Ukraine, United Arab Emirates, Uruguay, Uzbekistan, Venezuela, Vietnam, and Yemen. Subsequently, on June 29, 2020, S&P Global Ratings withdrew its ratings on the issuer. S&Ps opinions, analyses and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. On Jan. 8, 2021, S&P Global Ratings withdrew its issuer credit rating at the company's request. Moody's Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby disclosesthat most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody's Investors Service, Inc. The issuer was also planning for a comprehensive debt restructuring involving debt-for-equity swaps. This brought the downgrade-to-upgrade ratio to a new high of 6.6. Later, on Sept. 16, 2020, we withdrew the issuer credit ratings on the company at its request. *This column includes companies that were no longer rated one year prior to default. The majority (94%) began the year rated in the 'B' or 'CCC'/'C' category (57% 'CCC'/'C' and 37% 'B'). On May 11, 2020, S&P Global Ratings lowered its issuer credit rating on Colombia-based air transportation company Avianca Holdings S.A. to 'D' from 'CCC-' after the issuer and its subsidiaries and affiliates voluntarily filed for bankruptcy under Chapter 11 in New York to preserve its business structure amid the severe impact of COVID-19 on the global air transportation industry. On Nov. 3, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC+' from 'SD' after the company completed the distressed exchange. Note: Excludes confidentially rated defaults. On Sept. 14, 2020, we withdrew the issuer credit ratings on the company at its request. On Oct. 19, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Oklahoma-based home security and monitoring company Central Security Group Inc. to 'SD' from 'CCC-' after the issuer completed a distressed debt exchange on the first-lien credit facility, in which lenders will exchange about US$396 million of their respective claims for a new US$200 million first-lien term loan due 2025 and most of the reorganized equity, and the second-lien lenders will exchange 100% of their US$50 million claim for 1% of the company's reorganized equity. The issuer missed the interest payment on its US$450 million second-lien debt. The proportion of defaulters with confidential ratings in 2020 (11.5%) held steady relative to 11% in 2019. For example, the one-year default rate column of table 24 is equivalent to column 'D' of the average one-year transition matrix in table 21, as well as the cumulative average in the "Summary statistics" of the one-year column in table 32. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro. On April 14, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Chicago-based printing and digital media company LSC Communications Inc. to 'D' from 'CC' after the issuer filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. On Nov. 20, 2020, S&P Global Ratings withdrew its ratings on the issuer. On May 22, 2020, S&P Global Ratings lowered its issuer credit rating on Illinois-based generic pharmaceutical manufacturer company Akorn Inc. to 'D' from 'CC' after the issuer petitioned for reorganization under Chapter 11 of the U.S. Bankruptcy Code. Earlier, on June 6, 2020, we lowered our issuer credit rating on SMLP to 'CCC' from 'B'. S&P reserves the right to disseminate its opinions and analyses. CEC expects to achieve a balance sheet restructuring that supports its reopenings and long-term strategic plans. Document Information click to expand document information . On Sept. 18, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Texas-based oil and gas exploration and production company Oasis Petroleum Inc. to 'D' from 'CCC-' after the issuer missed an interest payment and entered into the 30-day grace period. For example, of the 251 companies that defaulted within 12 months of having been rated, 233 (or 92.8%) were originally in the 'B' or 'CCC'/'C' categories (see table 12). The shareholder made an offer to purchase the remaining 2023 notes. Tables 30, 31, and 32 are broken out by the broadest rating classifications (all rated, investment grade, and speculative grade). On July 2, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Texas-based oil and gas exploration and production company Lonestar Resources U.S. Inc. to 'D' from 'CCC-' after the issuer elected to skip an interest payment on its unsecured notes due 2023, and was not likely to pay within the 30-day grace period. These factors, combined with asset managers' growing tolerance for investing in lower-rated companies, leave just a handful of the highest-rated entities. On Aug. 30, 2020, Ohio-based automotive components manufacturer Shiloh Industries Inc. defaulted after the issuer filed for Chapter 11 of the U.S. Bankruptcy Code. The global speculative-grade corporate default rate edged up to 2.8% for the 12 months ended in December from 2.6% in November, and will rise to 5.1% by the end of 2023 under our baseline forecasts. The only ratings considered in these calculations are those on entities at the beginning of each static pool and those at the end. On June 16, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Alta-based frac sand producer and supplier Source Energy Services Ltd. to 'D' from 'CCC-' after the issuer missed the interest payment due on June 15, and we believed the company was unlikely to make the interest payment within the 60-day grace period. On July 20, 2020, S&P Global Ratings lowered its long-term issuer credit rating on North Carolina-based sock manufacturer Renfro Corp. to 'SD' from 'CCC-' after the issuer completed a distressed exchange. On June 29, 2020, S&P Global Ratings withdrew its ratings on Intelsat. In contrast, the average time to default among entities initially rated speculative grade was 6.2 years, with an associated standard deviation of 6.3 years. A ratio of 1 would indicate that the percentages of upgrades and downgrades were equal. Issuers rated 'AAA' were still rated 'AAA' one year later 87.1% of the time, while issuers rated in the 'CCC'/'C' category retained those ratings just 43.1% of the time. On Aug. 6, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC-' from 'SD'. On June 17, 2020, we withdrew the ratings on the issuer. Moody's Default and Ratings Analytics team publishes Moody's default studies, ratings transitions and ratings performance studies for corporates, financial institutions, sovereign and sub-sovereign, public finance and infrastructure sectors. Furthermore, weak liquidity supports our view of O1 Properties' general default. The company eliminated its prepetition debt during the bankruptcy process. The largest gap between the two was in financial institutions, which had a five-notch difference: The 233 financial institutions that defaulted had a median original rating of 'B+', compared with a sector median of 'BBB'. Table 29 displays the summary of one-year transitions in the investment-grade and speculative-grade rating categories. On June 25, 2020, we raised our long-term issuer credit rating on Jo-Ann to 'CCC' from 'SD', reflecting the ongoing risk of a conventional default. Over the long term (since 1981), financial services defaulters show a median rating of 'BB+' five years prior to default. Low demand, weak macroeconomic performance, and the pandemic led to weakening liquidity and performance. Across sectors, the average difference between an industry's median initial rating and the median initial rating of its defaulters was about 1.5 notches. Normally, recessions include, or are followed shortly by, marked increases in corporate defaults. The issuer's financial and operational situation had worsened because of the coronavirus pandemic. On Sept. 15, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Spain-based food products retailer Distribuidora Internacional de Alimentacion S.A. to 'SD' from 'CC' after the issuer completed a distressed exchange. On April 1, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Utah-based credit report repair service provider PGX Holdings Inc. to 'D' from 'CCC'. Europe: In its base case, Moody's analyzed the underlying collateral pool as having a performing par of USD267.4 million, (For more information on methodologies and definitions, see Appendix I.). Cumulative default rates are one minus the product of the proportion of survivors (nondefaulters). As a supplement to many of the averages and time series presented in this study, standard deviations are also shown to provide a gauge of the dispersion of data behind these averages. On Oct. 20, 2020, S&P Global Ratings assigned its 'B-' issuer credit rating on the company, with a negative outlook. These two sectors, along with leisure time/media, had 2020 default rates in excess of 6%, which were much higher than other sectors and were markedly higher than their sectoral long-term weighted averages (see table 19). On April 6, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Texas-headquartered home health provider BW Homecare Holdings LLC to 'SD' from 'CCC'. S&P Global Ratings subsequently withdrew the ratings at the issuer's request. On Dec. 9, 2020, S&P Global Ratings withdrew its 'D' issuer credit rating at the issuer's request. Earlier, on April 10, 2020, we lowered the rating on the issuer to 'CC' from 'CCC-' after it was unable to obtain mezzanine debt lenders' consent to extend the loan and had insufficient liquidity. In the transaction, the issuer raised another US$200 million notes due in 2026. On April 7, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Texas-based exploration and production (E&P) company Gavilan Resources LLC to 'D' from 'CCC-'. The issuer is still under high execution risk after its Chapter 11 filing in 2019. On July 20, 2020, we raised the issuer credit rating to 'CCC+' from 'SD' after the issuer announced an improvement in leverage, which brought the borrowing base down to US$215 million from US$250 million. An analysis of transition rates for 2020 suggests that ratings behavior continues to exhibit consistency with long-term trends. In 2020, 216 of the 226 defaults, or 96%, were from companies originally rated speculative grade, which is nearly eight percentage points higher than the long-term average of 88.3%. For example, 427 defaults were recorded in the five-year pool that began in January 2016, of which 414 were rated speculative grade on Jan. 1, 2016. On May 21, 2020, S&P Global Ratings lowered the issuer credit rating on Colorado-based oil and gas exploration and production company Centennial Resource Development Inc. to 'SD' from 'CC' after the issuer announced the exchange of a portion of its 2026 and 2027 senior secured notes for new second-lien secured notes due 2025 at 50% of par value.

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