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. Subsequently, on May 29, 2020, the issuer obtained an amendment for extending the grace period until June 12 for the payment of interest of around US$4.1 million. The syndicated creditors will now acquire 49% of the capital of the operating business. Posted on . On Jan. 13, 2021, we raised the issuer credit rating to 'CCC+' form 'SD' after the issuer retired a huge sum of principal in second half of 2020, approximately US$550 million by early December 2020. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro. On Nov. 3, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC' from 'D' on the completed exchange offer. The issuer reached an agreement with 78% of its intellectual property notes lender and 71% of its term loan lenders to exchange around US$1.65 billion of debt for equity. In addition, on March 13, 2020, the issuer's license was suspended by the Kazakh insurance regulator due to breach of the regulatory ratios. A missed or delayed disbursement of a contractually-obligated interest or principal payment (excluding missed payments cured within a contractually allowed grace period), as defined in credit agreements and indentures; 2. On July 23, 2020, S&P Global Ratings lowered its rating on the issuer to 'D' from 'CCC-' upon the company filing for Chapter 11 bankruptcy, following which, on Jan. 5, 2021, the ratings on the issuer were withdrawn. prior to May 2014, Kathrin was a lead analyst in Moody's EMEA Corporate Finance Group in Frankfurt, Germany, covering a diverse set of heavy industrial corporations across . For each rating listed in the matrix's leftmost column, there are nine ratios listed in the rows, corresponding to the ratings from 'AAA' to 'D', plus an entry for NR (see table 22). We considered the transaction as distressed given the company's weak operating performance, negative cash flow generation, and near-term debt maturities. Finally, PD estimates should also be compared across banks (EBA 2020). On July 20, 2020, S&P Global Ratings lowered its issuer credit rating to 'D' from 'SD' after the company filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. The issuer missed an interest payment of US$8 million on its senior convertible notes due in 2024. The company effectively converted its existing 270 million first-lien term loans from paying cash interest to paying interest as part-cash, part-payment-in-kind over the next three years and 20 million second-lien term loans from paying cash interest to all payment-in-kind until maturity, with unanimous lender approval. Yet each of the four pools in which this company was included (1987-1990) would record its 1993 default at the appropriate time horizon. For example, of all the companies that defaulted during 1981-2020, only two entities rated 'AAA' at inception defaulted within seven years. Moody's | Better decisions 3Q 2021 Investor Presentation 2 . COMMENTS; 4 May, 2022 | 17:17; . On July 20, 2020, S&P Global Ratings withdrew its ratings at the issuer's request. Default, Transition, and Recovery: The U.S. Speculative-Grade Corporate On Aug. 17, 2020, S&P Global Ratings withdrew its ratings on the issuer. On June 8, 2020, we lowered our issuer credit rating to 'D' from 'SD' after the issuer's announcement of a reorganization petition filed under Chapter 11 of the Bankruptcy Code. For example, if an entity was rated 'A' on Jan. 1, 2020, and was downgraded to 'BBB' in the middle of the year and then upgraded to 'A' later in the year (with no other subsequent rating changes), this entity would be included only in the percentage of issuers that began the year as 'A' that ended the year as 'A'. The two-year default rates in table 24 are calculated in the same way as those in the cumulative average section for the two-year column in table 32, while those in the 'D' column of table 34 are equivalent to adding up all the defaults behind the two-year column's annual default rates in table 32, divided by the sum of all the issuers in table 32 for the years 1981-2020. Earlier, on May 5, 2020 we lowered the issuer credit rating on Avianca to 'CCC-' from 'CCC' and kept the ratings on CreditWatch with negative implications. Earlier, on May 29, 2020, we lowered our ratings on BLY from 'CCC+' to 'CC' and placed them on CreditWatch with negative implications following the company's announcement of a proposal to convert the interest payments due on its senior secured notes in 2020 to PIK interest payments. On Oct. 9, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Brazil-based telecom operator Oi S.A. to 'SD' from 'CC' after the issuer announced that the judicial court ratified the amendment to the company's judicial reorganization plan, which was approved by the majority of its creditholders on Sept. 8, 2020. Investment-grade ratings are proportionately more prevalent among financial services companies as well (relative to nonfinancials). The company will not make the interest payments within the 30-day grace period. Liquidity also weakened as cash flows for debt repayment diminished. According to S&P, at the end of 2020, their 12-month trailing default rates amounted to 6.6% for U.S. speculative-grade. The median rating for all recently defaulted entities was solidly in the speculative-grade category in the seven years preceding default, and for all of that period, it was at least one notch below that of the long-term equivalent. Within this study, tables and charts are often presented using specific geographic regions. For both axes of the Lorenz curve, the observations are ordered from the low end of the ratings scale ('CCC'/'C') to the high end ('AAA'). On Nov. 6, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC' from 'SD' on completion of restructuring. On April 1, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Colorado-based crude oil and natural gas exploration and production company Whiting Petroleum Corp to 'D' from 'CCC+' after the issuer filed for voluntary Chapter 11 bankruptcy. 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. Qinghai Provincial Investment Group Co. Ltd. APC Automotive Technologies Intermediate Holdings LLC. For these counts of large downgrades, we include movements to 'D' (default) along with what we normally report as downgrades (that is, downward movements between active ratings). 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. On April 2, 2020, S&P Global Ratings raised its issuer credit rating on Optiv Inc. to 'CCC' from 'SD', on the view that the company was willing to use its liquidity to repay additional debt. On Feb. 14, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Italy-based maritime transportation services Moby SpA to 'SD' from 'CCC-' after the company entered into a standstill agreement to not pay scheduled payments in mid-February. The company had debt of about US$1.4 billion and was not likely to pay the interest within the grace period. The issuer is exploring other strategic alternatives as liquidity remains constrained. Most were nonfinancial companies, and five were financial services issuers. Over the long term (1981-2020), heightened ratings stability is broadly consistent with higher ratings (see table 21). On Feb. 28, 2020, S&P Global Ratings raised the long-term issuer ratings on Calfrac to 'CCC-' from 'SD' after it completed a debt exchange, which reduced the debt by US$98 million. The one-year Gini ratio in 2020 was 86.1%, alongside a speculative-grade default rate of 5.5%. Earlier, on April 2, 2020, we lowered our long-term issuer credit rating to 'CCC+' from 'B-' because of weaker operating performance projections in 2020 owing to the coronavirus pandemic. Although defaulters that are not rated (NR) are not always captured in the default rate calculations for the year of default, we do capture them in the longer-term cumulative default rate statistics, which are tied back to the year in which defaulters were last rated. For example, for the entire pool of defaulters in this study (1981-2020), the average times to default for issuers originally rated in the 'A' and 'B' categories were 14.1 years and 5.1 years, respectively, from the initial rating (or from Dec. 31, 1980, the start date of the study), whereas issuers in the 'CCC' rating category or lower had an average time to default of only 2.2 years. Estimated 5-year default probabilities are on average 67% higher than default probabilities obtained using the standard 40% recovery assumption. In 2019, the issuer derived about 41% of its revenue from the food service segment and about 32% from the retail segment. The Gini coefficient is defined as area B divided by the total of area A plus area B. On March 12, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Illinois-based engineered fastener distributor Optimas OE Solutions Holding LLC to 'SD' from 'CCC+'. On Aug. 6, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC-' from 'SD'. However, some of the variation in default rates between sectors stems from overall sample size differences, as well as differences in the ratings distribution across industries. Defaults increased in many sectors in 2020, though the consumer services and energy and natural resources sectors once again led the global default tally, together accounting for almost 54% of the total. Since 1981, the 'B' rating category has accounted for 1,735 defaults (56% of the total from initial rating), well more than double the number of defaulters from the 'BB' category (see tables 10 and 12). If an issuer defaults or if the rating on the issuer is withdrawn in the middle of the year, then it would be considered rated 'D' or not rated as of Dec. 31 of that particular year. last several cycles haven't had Key to those discussions at pandemics and land wars in Eu-their two-day policy meeting 0 0 Units in buildings with ve units or more 0 rope in them." will be estimating how much The Fed's rate moves didn't 1980 '90 2000 '10 '20 1980 '90 2000 '10 '20 1980 '90 2000 '10 '20 their previous . Furthermore, weak liquidity supports our view of O1 Properties' general default. On Oct. 16, 2020 S&P Global Ratings lowered its long-term issuer credit rating on Chile-based bank holding company Corp Group Banking S.A. to 'D' from 'CC' after the issuer missed its US$16.9 million semiannual interest payment on its bond. The defaulters are: Argentina-based oil and gas company YPF S.A., and Cayman Islands-incorporated (China-based) real estate developer Sunshine 100 China Holdings Ltd. We have also revised our default tally in a monthly reconciliation process to include Oregon-based digital media and . 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 July 28, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Delaware-based footwear provider Never Slip Topco Inc. to 'D' from 'CCC' after the issuer entered a distressed exchange to amend first- and second-lien credit agreements. It shows the ratio of actual rank-ordering performance to theoretically perfect rank ordering. Default, Transition, and Recovery: 2020 Annual Global Corporate Default On June 20, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Cary, N.C.-based information technology and business skills learning solutions provider GK Holdings Inc. to 'D' from 'CC' as the company did not make the interest payments due March 31, 2020, on its revolver and first- and second-lien term loans. On June 29, 2020, S&P Global Ratings withdrew its ratings on Intelsat. On Aug. 21, 2020, we withdrew the issuer credit ratings on the company at its request. In 2020, the share of new speculative-grade issuers rated 'B-' and lower reached 56.8%. The rating action followed Covia's announcement that its domestic subsidiaries filed voluntary petitions for restructuring under Chapter 11 of the U.S. Bankruptcy Code. On July 6, 2004, we withdrew our ratings on the issuer. On Jan. 7, 2021, S&P Global Ratings raised the rating on the issuer to 'CCC+' from 'SD' based on its response to a decline in revenue by significantly reducing costs and capital investments. In connection with the filing, the company entered into a restructuring support agreement with the holders of approximately 92% of the principal amount of its tranche B-2 term loan and approximately 87% of the principal amount of its asset-based lending FILO term loan. A ratio of 1 would indicate that the percentages of upgrades and downgrades were equal. On Dec. 23, 2020, we raised the issuer credit ratings to 'B-' from 'D'. On Feb. 12, 2020, S&P Global Ratings lowered its long-term issuer credit rating on RentPath LLC to 'D' after the issuer defaulted and filed for Chapter 11 bankruptcy. These include industrials, utilities, financial institutions, and insurance companies around the world with long-term local currency ratings. Counterparty credit ratings, corporate credit ratings, and sovereign credit ratings are all forms of issuer credit ratings. PDF Markets, Bankers and Analysts Differ on 2021's Default Rate We calculated annual default rates for each static pool, first in units and later as percentages with respect to the number of issuers in each rating category. On Aug. 18, 2020, S&P Global Ratings withdrew its ratings on the issuer. 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'. On Feb. 25, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Canada-based oilfield services provider Calfrac Well Services Ltd. to 'SD' from 'CC' after the company completed a distressed exchange on the U.S. dollar unsecured notes due in 2026. The negative outlook reflects our view of a potential risk from a prolonged decline in customer's mining and drilling activity and slower-than-expected recovery, which could lead to further liquidity pressure and leverage remaining above 10x ahead of the large debt maturities in 2022, increasing the risk of another distressed transaction. Rating transition rates may be compared with the marginal and cumulative default rates described in the previous sections. The company was acquired by an unrated company. As coincident indicators, the proportion of new speculative-grade ratings at 'B-' or lower in the U.S. and the year-end U.S. speculative-grade default rate generally mirror each other throughout most of their shared history (see chart 17). The one-year Gini in 2020 was well above the one-year weighted average (since 1981) Gini ratio of 82.8% and was higher than the median annual Gini ratio over the last 40 years of 85.7% (see table 2 and chart 30). We use rating modifiers (plus and minus signs) to calculate upgrade and downgrade percentages, as well as the magnitude of rating changes, throughout this study. PDF China Banking System Credit trends amid policy-led recovery and a On Feb. 4, 2020, S&P Global Ratings lowered its ratings on Lecta S.A. to 'D' from 'SD', on completion of restructuring of its debt obligation, and subsequently withdrew the ratings. On Jan. 8, 2021, S&P Global Ratings withdrew its issuer credit rating. What is in the DRD? The company had a $135 million interest payment due in mid-July and a $208 million debt maturity in August 2020, and its bonds traded at less than $0.10 on the dollar. In this new report, Moody's forecasts that the rate will peak at 7.3% in March 2021, and then decline to 4.7% by December. Earlier, on May 15, 2020, S&P Global Ratings withdrew the issuer credit ratings at the issuer's request. The issuer's financial and operational situation had worsened because of the coronavirus pandemic. Moody's Corporation reported revenue of $1.5 billion for the three months ended March 31, 2022, down 5% from the prior-year period. On July 9, 2020, S&P Global Ratings withdrew its issuer credit rating at the company's request. In periods of high defaults, there tends to be greater variation in the distribution of ratings prior to default, which reduces the Gini. The global corporate default tally has increased to 17 after two issuers defaulted since our last report. Corporate downgrades also increased, to near an all-time high. Selective defaults accounted for just over half of all defaults in 2020. On Oct. 15, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC+' from 'SD' because the issuer had enough liquidity to pay the remainder of the bond's maturity. We also include the defaulting instruments for each company that S&P Global Ratings rates. The amendment includes a discount on debt for some of its debtholders, which we assess as equivalent to default. 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. 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. Similarly, if it defaulted in the middle of 1991, it would be included in the column representing transitions to 'D' in the 1991 one-year transition matrix. Of the 226 corporate defaults in 2020, the majority (146) were from companies in the U.S. and associated tax havens (Bermuda and the Cayman Islands). On Dec. 8, 2020, we raised the rating on the issuer to 'CCC' from 'SD', reflecting our view of reduced refinancing risk. U.S., Bermuda, and the Cayman Islands, Other developed: Earlier, in 2004, S&P Global Ratings withdrew its ratings on the company. On April 2, 2020, we lowered our issuer credit rating to 'CCC' from 'B-' and removed all of the ratings from CreditWatch negative, where they had been placed on March 19, 2020, as the company faced significant operational headwinds due to the coronavirus pandemic and had about $215 million of 8% senior unsecured notes maturing in less than two years. A market share war between Saudi Arabia and Russia led to a crash in crude oil prices, on top of the significant demand destruction for crude oil and natural gas due to the coronavirus. This does not necessarily indicate a default event, but during the period of regulatory supervision, the regulators may have the power to favor one class of obligations over others or pay some obligations and not others. 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-'. Multiplying 92.81% by 96.77% results in a 89.82% survival rate to the end of the third year, which results in a three-year average cumulative default rate of 10.18%. Earlier, on March 21, 2020, we lowered our issuer credit rating on GNC to 'CC' from 'CCC+' and placed all ratings on CreditWatch with negative implications as the company announced that it did not expect to have sufficient cash flow from operations to repay its convertible senior notes and tranche B-2 term loan due. We included such subsidiaries for the period during which they had a distinct and separate risk of default. We considered the transaction to be a distressed exchange and tantamount to a default on the notes because the noteholders were not adequately compensated and received less than they were originally promised under the securities. Any Passwords/user IDs issued by S&P to users are single user-dedicated and may ONLY be used by the individual to whom they have been assigned. A majority of issuers have been rated speculative grade before--the first instance in July 2018--but the ratio has largely hovered around 50% since. After speculative-grade ratings reached a peak of 51% of U.S. corporate ratings in 2007, the default rate hit its cyclical peak of 12% in 2009, following the Great Recession (see chart 23). The COVID-19 pandemic and lockdowns in 2020 led to one of the deepest recessions since the Great Depression roughly 90 years ago. Defaults are much less frequent for financial services companies than for nonfinancials, which can allow outliers to bias the averages. We combined these percentages to obtain cumulative default rates for the 40 years the study covers (see tables 24-26 and 30-32). S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof. Default & Recovery Database | Moody's Analytics S&P reserves the right to disseminate its opinions and analyses. Project Finance Bank Loans: Default and Recovery Rates for 1983-2020 (APAC) APAC Edition. Therefore, each annual default study is self-contained and effectively supersedes all previous versions. We study the effect of industry distress on recovery rates by using 5334 debt and loan instruments from Moody's Default and Recovery Database for the period from 1990 to 2017. When comparing default rates across sectors, we note some key differences between the industries. This transaction of extending the maturity date and 40% discount at par was not a healthy sign for the company's operational performance. The leading shareholder, LetterOne, purchased 97.5% of its 300 million 1% notes due in 2021 and 76% of its 300 million 0.875% notes due in 2023. On April 30, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Australia-based airline company Virgin Australia Holdings Ltd. to 'D' from 'CC' after the company filed for Chapter 15 bankruptcy and announced it would not pay the coupon on its US$425 million senior unsecured notes because of a moratorium on all creditor payments. Research & Ratings: Default & Ratings Analytics - Moody's On April 14, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Ohio-based glassware manufacturer Libbey Inc. to 'SD' from 'CCC' after the issuer deferred an excess prepayment of about US$12 million.

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