Over that period, seven sectors have displayed average times to default that are lower than the overall average of 5.9 years: energy and natural resources; financial institutions; health care/chemicals; high technology, computers, and office equipment; leisure time and media; real estate; and telecommunications (see table 17). The issuer with the longest time to default in 2020 was U.S.-based Revlon Inc., with an initial issuer credit rating of 'AA' as of Dec. 31, 1980, 39.4 years before the rating was lowered to 'SD' (selective default) in May 2020. The issuer was also planning for a comprehensive debt restructuring involving debt-for-equity swaps. S&P's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. On Aug. 6, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC-' from 'SD'. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. Nick W Kraemer, FRM, New York+ 1 (212) 438 1698; Nivritti Mishra Richhariya, CRISIL Global Analytical Center, an S&P Global Ratings affiliate, Mumbai, Sundaram Iyer, CRISIL Global Analytical Center, an S&P affiliate, Mumbai, Lyndon Fernandes, CRISIL Global Analytical Center, an S&P affiliate, Mumbai, Abinash Meher, CRISIL Global Analytical Center, an S&P affiliate, Mumbai, Shripati Pranshu, CRISIL Global Analytical Center, an S&P affiliate, Mumbai, APAC, United States of America, Latin America, Canada, EMEA, APAC. On June 24, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Salt Lake City-based drilling services provider and manufacturer Boart Longyear Ltd. (BLY) to 'SD' from 'CC'. On Sept. 28, 2020, S&P Global Ratings lowered its long-term issuer credit rating on French trade show organizer Cassini SAS to 'D' from 'CCC' after the issuer entered into safeguard procedures because of losses caused by COVID-19-related show cancellations and postponements. S&P Global Ratings assigned initial ratings to 622 issuers in 2020, down from 650 issuers in 2019 and 875 in 2018. The issuer, doing business as Elara Caring, completed the exchange of its US$195 million second-lien debt for US$186 million new junior 1.5-lien debt. On May 11, 2020, we withdrew the ratings on the issuer. On May 21, 2020, after the settlement of the exchange, we raised the issuer credit rating to 'CCC+' from 'SD'. On Nov. 3, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC' from 'D' on the completed exchange offer. A ratio of 1 would indicate that the percentages of upgrades and downgrades were equal. We deem 'D', 'SD', and 'R' issuer ratings to be defaults for the purposes of this study. Corporate downgrades also increased, to near an all-time . S&P Global Ratings viewed the repurchases as a distressed debt restructuring given the significant discount to par, cumulative size of the transactions, and W&T's weakened credit profile brought on by the weak and erratic pricing for crude oil and natural gas in 2020. This usually leads to shorter time frames from which to calculate default statistics. As is the case globally, the proportion of speculative-grade ratings reached an all-time high in the U.S. as well, at 57.8%. de C.V. (GFamsa) to 'SD' from 'CCC-' .The company missed its interest and principal payments on its 7.25% senior unsecured notes on June 1, 2020. No sharing of passwords/user IDs and no simultaneous access via the same password/user ID is permitted. Later, on Oct. 15, 2020, we withdrew the ratings at the issuer's request. On June 25, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Houston-based exploration and production (E&P) company W&T Offshore Inc. to 'SD' from 'CCC+' following the company's announcement that it repurchased about $72.5 million of its second-lien notes due 2023, about 10% of its total year-end 2019 long-term debt, for roughly $23.9 million, or an average 33% of par value. We considered this exchange as a distressed exchange. Foreign currency translation unfavorably impacted Moody's revenue by 2%. Its Gini coefficient--which is a summary statistic of the Lorenz curve--would thus be zero. 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. This scheme was expected to save about 7.6 million per year in cash, but the company was still facing an interest payment of about 35 million and huge rent payments. On July 23, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Virginia-based student educational travel provider Lakeland Holdings LLC to 'D' from 'CCC-' after the issuer filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. This would be considered a default since S&P Global Ratings believes the second-lien noteholders will receive less than they were originally promised. In this case, however, the 'AA+' figure was derived from a much smaller sample than that for the 'AA' rating. Over the long term, defaults in nonfinancial sectors have tended to be more cyclical than defaults in the financial sectors. Earlier, on Oct. 1, 2020, S&P Global Ratings lowered the long-term issuer credit rating to 'CC' from 'CCC' after the issuer announced the restructuring transaction. 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). In addition, the company exchanged US$307.5 million of its existing first-lien term loan for a new super-priority second out term loan. All of the defaulters in 2020 with active ratings immediately prior to default were rated in the lowest rating categories. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro. Austria, Belgium, British Virgin Islands, Bulgaria, Channel Islands, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Guernsey, Hungary, Iceland, Ireland, Isle of Man, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Moldova Republic of, Monaco, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, and the U.K. S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. It is expected to reduce debt by US$500 million. NAIC - Supporting Insurance, Regulators, & Public Interest There were three additional defaults in 2021 following our last report on Dec. 9, 2021: Malaysia-based engineering and construction company Serba Dinamik Holdings Bhd., China-based (Cayman Island incorporated) real estate company China Evergrande Group, and One confidential issuer. In other words, the Gini coefficient captures the extent to which actual ratings accuracy diverges from the random scenario and aspires to the ideal scenario. 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. Earlier, on March 2, 2020, we lowered our issuer credit ratings on LSC to 'CC' from 'CCC+' after the issuer entered into a forbearance agreement for failing to comply with its consolidated leverage and interest ratio credit agreements covenants. In our view, continued supply-demand rebalancing will be necessary to slow wage . Qinghai Provincial Investment Group Co. Ltd. APC Automotive Technologies Intermediate Holdings LLC. The issuer was hit by an ongoing bankruptcy proceeding of its joint venture partner Sanchez Energy and by the decline in oil prices owing to the Saudi-Russia price war and decline in demand related to the coronavirus pandemic. On July 2, 2020, S&P Global Ratings lowered its long-term issuer credit rating on California-based specialty apparel retailer Tailored Brands Inc. to 'D' from 'CCC+', reflecting interest payment default on its senior notes due 2022. The issuer was engaged in discussions with creditors for a debt restructuring. The company filed for Chapter 11 bankruptcy with a prepackaged plan to equitize around US$300 million of unsecured notes. 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%. We also do not include short-term issuer credit ratings. Issuer credit ratings can be either long-term or short-term. On Dec. 9, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Tennessee-based health care services provider Community Health Systems Inc. to 'SD' from 'CC'. Uploaded by Dimitris Vrachoritis. 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. to 'D' from 'CC' after the issuer completed a distressed debt exchange for both its US$115 million notes due in April 2021 and US$370 million notes due in April 2022. The number of 'AAA' rated issuers globally declined to just eight by the end of 2020 from 89 at the beginning of 2008. Many default studies, including this one, also look at transition rates, which gauge the degree to which ratings change--either up or down--over a particular period. 'R' (regulatory intervention) indicates that an obligor is under regulatory supervision owing to its financial condition. On July 2, 2020, S&P Global Ratings withdrew its ratings on the issuer. The debt has been converted from cash to PIK at LIBOR+450 for US$125 million while another US$50 million at LIBOR+1000. For the full year, there were three large downgrades (and two large upgrades), compared with two downgrades in 2019 (see chart 7). An issuer that remained rated for more than one year was counted as many times as the number of years it was rated. 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. A mere 0.88% of the approximately $500 billion of U.S. CLOs issued from 1994-2009 that were rated by S&P Global Ratings experienced defaults, and no defaults were recorded among the AAA- and AA-rated tranches rated by Moody's. 7 In fact, default rates among CLOs were not only lower than those of CDOs, but also lower than those of similarly . On July 9, 2020, S&P Global Ratings withdrew its issuer credit rating at the company's request. 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. As in most years, the U.S. accounted for the majority of defaults in 2020, by both count and the amount of affected debt. We understood that the company was making those amendments to preserve cash because customers have had to suspend their mining operations or delay their project spending due to the coronavirus pandemic. On Oct. 15, 2020, S&P Global Ratings lowered the issuer credit rating to 'CC' and on Nov. 16, 2020, lowered it to 'SD' from 'CC'. 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 company issued new money debt of about US$155 million and released another US$492 million of preferred stock to lenders who contributed new money. Static pool methodology. On Nov. 18, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Texas-based debt issuing company Summit Midstream Partners Holdings LLC to 'D' from 'CC' after the issuer closed its sole debt restructuring transaction, at a significant discount. These are calculated in the same way as the default column in table 20, though table 20 shows the one-year default rates for each rating category for 2020 exclusively. Meaningfully lower yoy default rates in 2021 are expected for the energy and retail industries, which produced a significant volume of defaults over the prior five years. Over each time span, lower ratings correspond to higher default rates (see chart 4 and chart 25), and this relationship holds true when broken out by rating modifier (see tables 24 and 26) and by region (see table 25). 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 July 22, 2020, S&P Global Ratings lowered its long-term issuer credit rating on California-based media and satellite-based connectivity provider Global Eagle Entertainment Inc. to 'D' from 'CCC-' after the issuer filed for petitions under Chapter 11 of U.S. Bankruptcy Code. The default rates in table 34 are calculated as not conditional on survival, while those in table 24 are average default rates conditional on survival. We also include the defaulting instruments for each company that S&P Global Ratings rates. Otherwise, the methodology was identical to that used for single-year transitions. (See table 15 for the 13 publicly rated investment-grade defaults during this period.) S&P reserves the right to disseminate its opinions and analyses. These were Macy's Inc., Ally Financial Inc., Ambac Assurance Corp., Mutual Benefit Life Insurance Co., Executive Life Insurance Co. CA, Confederation Life Insurance Co., Motors Liquidation Co. (formerly known as General Motors Corp.), and Eastman Kodak Co. Table 13 shows the cumulative defaults over various time horizons from all ratings received subsequent to initial ratings. commercial paper obligations rated A 1 or P 1 or better by Moody's Investors Service, Inc. or Standard & Poor's Corporation, respectively; or (iii) . Sources: StepStone Group, CS HY Index, Barclays US IG, Moody's, Cliffwater, Refinitiv LPC as of December 2022. The issuer's business had been suffering and further deteriorated due to the coronavirus pandemic. On April 14, 2020, S&P Global Ratings withdrew the issuer credit rating at the issuer's request.