PDF Corporate Default and Recovery Rates, 1920-2009 - Is My Money Safe Further, on Sept. 25, 2020, we lowered the issuer credit rating to 'SD' from 'CC' after the issuer announced it retired US$38.7 million principal of 2025 notes at below the price of US$575 per 1,000 principal. Historically, a growing concentration of speculative-grade ratings often precedes a period of increased defaults. On March 9, 2020, Bluestem Brands Inc. defaulted, having filed for Chapter 11 bankruptcy to restructure its debt. Default activity in 2020 did increase, but to a lesser extent than recent recessions (see chart 1 and table 1). . In line with expectations, the Gini coefficients decline over time because longer time horizons allow for greater credit degradation among higher-rated entities. Date Document Type Title Issuer/Entity 24 Feb 2023 Data Report Fleet Lease Securitizations: Loss Severity Modeling With an increase in the proportion of downgrades during the year, the number of large rating changes (which we define as more than six notches) increased in 2020. The transaction was approved by 100% of lenders, and it provided the issuer with additional liquidity. Often these are issuer-weighted averages. The debt structure of the issuer became unsustainable, with adjusted debt to EBITDA close to 8x in 2019. With these liquidity supports from central banks in place, market volatility eased after the spring. The company received commitments for US$256 million in debtor-in-possession financing from various lenders. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses. 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. 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. The issuer announced that it completed an amend-and-extend transaction for all of its US$100 million senior term loans due in February 2022 and most of its US$300 million junior term loans. Corporate Power; Enforceability : 35 : 3.3 : Company Board Approval; Fairness Opinion; Anti-Takeover Laws : 36 : . 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. On Oct. 19, 2020, S&P Global Ratings lowered its long-term issuer credit rating on California-based health care provider Alliance HealthCare Services to 'SD' from 'B-' after the issuer completed a distressed exchange of its second-lien debt. PDF Sovereign Default and Recovery Rates - Moody's Analytics On Feb. 13, 2020, S&P Global Ratings lowered its long-term issuer credit rating on California-based newspaper publisher The McClatchy Co. to 'D' from 'CC' after the issuer filed for bankruptcy under Chapter 11. Our updated 2021 energy default rate forecasts are 8% and 6% for LL and HY . Only in longer time frames do companies with higher original ratings surface among the defaulters. The nonfinancial sector tends to have a much higher share of companies rated speculative grade, with 60.6% globally as of the beginning of 2020, compared with just 24.7% of financial services companies. As an example, the two-year column of table 32 shows the two-year default rates (not conditional on survival) for each static pool. On June 15, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Colorado-based oil and gas exploration and production company SM Energy Co. to 'SD' from 'CC' after the issuer announced the results of its previous exchange offer. On Nov. 3, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC+' from 'SD' on the basis of increased liquidity. On June 17, 2020, we withdrew the ratings on the issuer. This also followed the issuer's missed $65.6 million principal payment on its 8.375% unsecured notes due on May 10, 2020. On Jan. 30, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Pinnacle Operating Corp. to 'SD' from 'CCC'. On Dec. 22, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Pennsylvania-based high-availability infrastructure and disaster recovery services provider Sungard AS New Holdings LLC to 'SD' from 'B-'. The estimated cross section of recovery rates is plausible, with an average recovery rate of 54% and substantial cross-sectional variation. The higher default rates for nonfinancial sectors are not surprising, given their higher concentration of speculative-grade issuers. On Nov. 25, 2020, S&P Global Ratings withdrew its rating at the issuer's request. COMMENTS; 4 May, 2022 | 17:17; . The company was acquired by an unrated company. Rating transition rates may be compared with the marginal and cumulative default rates described in the previous sections. 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. (EDGAR Online via COMTEX) -- NETSCOUT SYSTEMS INC false 0001078075 0001078075 2023-02-22 2023-02-22 The U.S. has the largest number of rated corporate issuers, accounting for roughly 45.9% of the global total at the start of 2020. Table 8 provides a list of all the publicly rated companies that defaulted in 2020. Earlier, on Feb. 7, 2020, we lowered the long-term issuer credit rating to 'CCC-' from 'CCC' after it reported some operational missteps, resulting in a covenant violation. To facilitate the proposed exchange, the issuer entered a new term loan facility of US$190 million maturing in 2024. On Dec. 16, 2020, S&P Global Ratings lowered the issuer credit rating to 'CC' from 'CCC-' with a negative outlook due to the distressed debt-for-equity proposal. On Dec. 28, 2020, S&P Global Ratings withdrew its rating at the issuer's request. 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). The analysis excludes public information ("pi") ratings and ratings based on the guarantee of another company or government entity. One key reason is that financial services companies typically start with investment-grade ratings, while most nonfinancial issuers have speculative-grade initial ratings, particularly over the past 10 years. 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, Monaco, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, and U.K. Australia, Canada, Japan, and New Zealand. 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). 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. On May 27, 2020, S&P Global Ratings lowered its issuer credit rating on Chile-based Latam Airlines Group S.A. to 'D' from 'CCC-' after the issuer volunteered a reorganization process under Chapter 11 of the Bankruptcy Code in the U.S. We consider that the debt restructuring under Chapter 11 constitutes a default. 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. Combined global bond issuance for nonfinancial corporates and financial services companies hit $5.7 trillion--a 27% increase from the high in 2019. The study introduces two kinds of models of distribution, Beta distribution estimation and kernel density distribution estimation, to simulate the distribution of recovery rates of corporate loans and bonds. The performance of Moody's corporate debt ratings - Q4 2022 - Excel supplement MOODY'S . On April 1, 2020, we raised the issuer credit rating on Yida to CCC-' from 'SD' on a reassessment of the company's credit profile. Overall, ultimate recovery rates for project finance bank loans are similar to those for senior secured corporate bank loans and overall corporate bank loans. *This table compares the net change in ratings from the first to the last day of each year. The Credit Transition Model and Credit Risk Calculator give users access to easy to use, web-based tools to quickly calculate customized rating transition matrices and default rates based on the DRD data. Defaults in 2020 came from all sectors, but--consistent with recent years--were heavily represented by two sectors: the energy and natural resources sector (with 62 defaults) and the consumer services sector (with 60 defaults). Default, Transition, and Recovery: Growing Strains Could Push The U.S. Speculative-Grade Corporate Default Rate To 4% By December 2023. The company was operating at a reduced rate of utilization--a production rate of 5.7 million tons per year against total nameplate capacity of 17.3 million tons per year. To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw or suspend such acknowledgment at any time and in its sole discretion. On March 27, 2020, S&P Global Ratings lowered its long-term issuer credit rating on China-based business parks developer and operator Yida China Holdings Ltd. to 'SD' from 'CC' after the issuer completed a distressed exchange. On Jan. 15, 2020, S&P Global Ratings withdrew its ratings at the issuer's request. It would not be part of the 1986 pool because it was not rated as of the first day of that year, and it would not be included in any pool after the last day of 1990 because the rating had been withdrawn by then. It is expected that North American and international markets are likely to contract up to 50% and 20%, respectively. If any defaulting entity reemerges from bankruptcy--or otherwise restructures its defaulted debt instruments, thereby reestablishing regular, timely payment of all its debts--we reenter this issuer into the database as a new entity. The average number of notches for an upgrade moved to 1.19 in 2020, while downgrades remained at an average of 1.46 notches--the highest rate since 2010 (when the average was 1.52 notches) (see chart 8). Subsequently, we withdrew the ratings due to insufficient information. All of S&P Global Ratings Research's default studies have found a clear correlation between ratings and defaults: The higher the rating, the lower the observed frequency of default, and vice versa. On March 26, 2020, we withdrew our issuer ratings at the company's request. On May 27, 2020, we lowered our ratings on the issuer to 'D' from 'SD' after it filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code, and subsequently on June 26, 2020, we withdrew our credit ratings. Sovereign default and recovery rates, 1983-2020 - Excel Data: 15 Sep 2009 . On Aug. 21, 2020, we withdrew the issuer credit ratings on the company at its request. S&P Global Ratings viewed Technicolor's completed debt-to-equity swap as equivalent to a default. The amendment includes a discount on debt for some of its debtholders, which we assess as equivalent to default. 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. On Dec. 16, 2020, S&P Global Ratings withdrew the issuer credit ratings at the issuer's request. 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. Over this same period, as the number of the highest-rated investment-grade companies dwindled, the count of the lowest-rated investment-grade companies surged. Our model further indicates that the global rate will . With the region moving to promote disintermediation, this share of speculative-grade issuers could continue to grow. On June 2, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Mexican retailer Grupo Famsa S.A.B. On April 20, 2020, we raised the rating to 'CCC+' on account of liquidity the company maintained. S&P does not act as a fiduciary or an investment advisor except where registered as such. S&P and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. The issuer has limited refinancing options owing to the disruptions caused by the coronavirus and the presence of foreign currency-denominated debt, about 40%. On June 11, 2020, S&P Global Ratings withdrew its credit ratings on the issuer. 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 June 25, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Pittsburgh-based retailer of health and wellness products GNC Holding Inc. to 'D' from 'CC' as the company commenced a voluntary prearranged Chapter 11 bankruptcy filing on June 23, 2020. S&P Global Ratings subsequently withdrew the ratings at the issuer's request. Each static pool can be interpreted as a buy-and-hold portfolio. On Oct. 14, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Argentina-based Banco Hipotecario S.A. to 'SD' from 'CC' after the issuer announced that 46.7% of the bondholders of its outstanding US$279.8 million series 29 notes due on Nov. 30, 2020, accepted the exchange offer originally launched in early September. In 2020, the share of new speculative-grade issuers rated 'B-' and lower reached 56.8%. On July 27, 2020, S&P Global Ratings lowered its long-term issuer credit rating on New York-based party goods retailer and wholesaler Party City Holdings Inc. to 'SD' from 'CC' after the issuer completed a distressed exchange, at 33.5% of par value for the debt exchanged. On Dec. 22, 2020, S&P Global Ratings lowered the rating to 'D' following the debt restructuring. An obligor is considered in default unless S&P Global Ratings believes that such payments will be made within five business days of the due date in the absence of a stated grace period, or within the earlier of the stated grace period or 30 calendar days. On Aug. 14, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Texas-based midstream energy company Martin Midstream Partners L.P. to 'SD' from 'CC' after the issuer announced the completion of the distressed exchange of US$364.5 million senior unsecured notes due in 2021. 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'. This was the second-largest default since 2014, when Texas Competitive Electric Holdings Co. LLC defaulted with $28.7 billion in associated debt (see table 5). The transaction reduced the company's annual interest payments by about US$19.25 million. We view the nonpayment of interest as akin to default on the senior secured notes. This is followed by a rating withdrawal in 1990 and a default in 1993. Earlier, on March 17, 2020, we lowered the long-term issuer credit rating to 'CCC+' from 'B' after the issuer's refinancing prospects were difficult and capital structure was unsustainable. The issuer also received a waiver on its total leverage ratio through June 12, 2020. 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. The pandemic, low demand, and oil prices crisis pushed the company into a weaker liquidity position, making it difficult for the company to repay the amount. 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. Such rating categories with smaller populations will experience high rating transition rates when even a small number of issuers are upgraded or downgraded. On April 14, 2020, S&P Global Ratings lowered its long-term issuer credit rating on United Arab Emirates-based health care service provider NMC Health PLC to 'D' from 'CCC-' after the issuer missed interest payments on its bank loans. In a small number of cases, we use the subordinated debt rating or the senior secured rating as the proxy. 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. bp by year-end 2020. For example, at the end of 2020, the one-year default rate among all financial entities was 0.23%, compared with 3.8% for all nonfinancial entities. On Sept. 23, 2020, S&P Global Ratings lowered its long-term issuer credit rating on France-based media and entertainment company Technicolor S.A. to 'SD' from 'CC' after the group completed its financial restructuring plan. No sharing of passwords/user IDs and no simultaneous access via the same password/user ID is permitted. default rates and decrease of recovery rates registered during a substantial part of the 1999-2009 period. We viewed the repurchases as distressed and tantamount to a default given lenders participating in the repurchase received substantially less than the original promise of the term loan. On Jan. 13, 2020, S&P Global Ratings lowered its long-term issuer credit rating on paper manufacturer Lecta S.A. to 'SD' from 'CC' after failing to pay the interest of 3.8 million due November 2019 on its 225 million senior secured floating notes due 2020. Of the rated defaulters at the beginning of 2020, none began the year with an investment-grade rating. The proportion of defaulters with confidential ratings in 2020 (11.5%) held steady relative to 11% in 2019. However, the data was gathered for 40 years, and all calculations are based on the rating experience of that period. The default rates in the columns of these tables, associated with each static pool year, are calculated in the same way as they would be for individual years' one-year transition matrices. On Oct. 8, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Oklahoma-based oil and gas exploration and production company Ascent Resources Utica Holdings LLC to 'SD' from 'CC' after the issuer announced the expiration of its offer to exchange its 2022 senior notes for a combination of a new second-lien term loan due 2025 and new senior notes due 2027.