On May 12, 2020, S&P Global Ratings lowered the issuer credit rating on New York-based beauty and personal care manufacturer and distributor Revlon Inc. to 'SD' from 'CC' after the issuer completed refinancing its 2016 term loan. On Feb. 14, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Kansas-based Pizza Hut restaurants franchise operator NPC International Inc. to 'SD' from 'CCC-' after the company decided not to make interest payments due Jan. 31, 2020.
PDF Default Recovery Rates and LGD in Credit Risk Modeling and Practice Esma50 165 2229 TRV 2 22 | PDF | Inflation | Monetary Policy Often these are issuer-weighted averages. Foreign currency translation unfavorably impacted Moody's revenue by 2%. On July 1, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Mexican commercial aviation services provider Grupo Aeromexico S.A.B. 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 . On June 16, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Wisconsin-based small-engine manufacturer Briggs & Stratton Corp. to 'SD' from 'CCC-' after the issuer didn't make semiannual interest payments and used the grace period. On July 17, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Delaware-based oil and gas exploration and production company Bruin E&P Partners LLC to 'D' from 'CC' after the issuer filed for Chapter 11 bankruptcy. The status of the issuer's subsidiary, Anagram International, is changed to unrestricted subsidiary, which raised another US$110 million of secured debt. Earlier, on April 4, 2020, we lowered our issuer credit rating on Covia to 'CCC+' from 'BB-' after customers were dealing with a sudden and dramatic collapse in prices for the oil and gas they produce. A key consideration when analyzing transition matrices that present averages computed over multiple static pools is that the standard deviations associated with each transition point in the matrix are large relative to the averages (outside of stability rates). On Dec. 17, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC-' from 'SD', which reflects the completion of the distressed exchange and significant risks over the next few months given looming debt maturities and very high leverage. On May 27, 2020, S&P Global Ratings withdrew its ratings on the issuer. On Feb. 26, 2020, S&P Global Ratings withdrew its ratings on the issuer.
PDF Relative Attractiveness of Direct Lending: Term and Credit Risk 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 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. Excludes downgrades to 'D', shown separately in the default column. With these liquidity supports from central banks in place, market volatility eased after the spring. On Sept. 4, 2020, S&P Global Ratings lowered its long-term issuer credit rating on New York-based apparel designer and manufacturer Premier Brands Group Holdings LLC to 'SD' from 'B-' after the issuer announced that it received a waiver for reducing excess cash flow payment of about US$11 million, which was due in April 2020. Each static pool can be interpreted as a buy-and-hold portfolio. Sources: High yield spreads, default rate and unemployment assumptions sourced from Moody's Investors Service . It shows the ratio of actual rank-ordering performance to theoretically perfect rank ordering. We also do not include short-term issuer credit ratings. 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. Default and recovery rates for sustainable project finance bank loans, 1983-2020: 16 Feb 2023 . This study--in line with previous default studies--confirms that over the long term (1981-2020), higher ratings are more stable than lower ratings. The 50.3% at the end of 2020 does represent an all-time high, albeit by a margin of only 0.1%. 0 ratings 0% found this document useful (0 votes) 2 views. 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. On March 3, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Texas-based oilfield services provider Pioneer Energy Services Corp. to 'D' from 'CCC-'. Broadly consistent with 2019, almost 54% of defaults in 2020 came from two sectors: consumer services and energy and natural resources (with 122 defaults combined). The default rate Jennifer Tennant for all Moody's-rated corporate issuers rose to 1.9% at the end of 2008 Analyst from 0.3% at year-end 2007. Such rating categories with smaller populations will experience high rating transition rates when even a small number of issuers are upgraded or downgraded. Defaults are much less frequent for financial services companies than for nonfinancials, which can allow outliers to bias the averages. A total of 3,098 defaults have been recorded globally since 1981. Of the 198 companies that defaulted in 2020 that were rated at the start of the year, all but 12 were in the 'B' category or lower, and 57% were in the 'CCC'/'C' category, leading to a one-year global Gini ratio of 86.1%. The amount of the senior secured notes is half of the original 600 million, and the senior unsecured noteholders had not received any of the 150 million they invested. bp by year-end 2020. 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. Loan loss charges also retreated to well below management's earlier guidance to 117 million (Q3 2020: 273 million) or 10 basis However, the data was gathered for 40 years, and all calculations are based on the rating experience of that period. S&P Global Ratings assigned initial ratings to 622 issuers in 2020, down from 650 issuers in 2019 and 875 in 2018. Other methods may calculate default rates using only the most recent year's default and rating data, which may yield comparatively low default rates during periods of high rating activity because they ignore prior years' default activity. 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. The transaction was viewed as distressed because lenders got less than they were originally promised. We believe the company is unlikely to make this interest payment within the 30-day grace period as it has pursued a comprehensive capital restructuring or bankruptcy filing.
PDF Sovereign Default and Recovery Rates - Moody's Analytics On July 8, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Indonesia-based property developer PT Modernland Realty Tbk. All speculative-grade categories had higher default rates in 2020 than their long-term averages, though in the cases of the 'BB' and 'B' categories, these increases were relatively small. In the seven-year Lorenz curve, speculative-grade issuers constituted 88.3% of defaulters and only 36.7% of the entire sample (see chart 29). On May 20, 2020, S&P Global Ratings lowered its issuer credit rating on Oklahoma-based casino resort operator Downstream Development Authority (DDA) to 'SD' from 'CCC'. On Aug. 19, 2020, we withdrew our issuer credit ratings on the company at its request. Note: Numbers in parentheses are weighted standard deviations, weighted by the issuer base. esgSubNav, Discover more about S&P Globals offerings. On April 24, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Chilean casino operator Enjoy S.A. to 'D' from 'B-' after the company announced suspension of its shareholder meeting to treat a capital increase while the board decided to file for judicial reorganization. On Dec. 7, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Louisiana-based oil field services company Superior Energy Services Inc. to 'D' from 'CC'. We viewed this transaction as tantamount to a default on the term loan because the company's operations were distressed, making it difficult for it to meet its obligations. On July 1, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Mexican lodging company Grupo Posadas S.A.B. The higher default rates for nonfinancial sectors are not surprising, given their higher concentration of speculative-grade issuers. 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. On June 18, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Lewisville, Texas-based ASP MCS Acquisition Corp. (MCS) to 'D' from 'CCC' after the company missed its June 15 interest payment on its secured term loan due 2024. On April 6, 2020, we raised the issuer rating to 'CCC-' from 'SD' to reflect the risk of a conventional default or restructuring, which was likely in the following six months. 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 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. We included such subsidiaries for the period during which they had a distinct and separate risk of default. But in both cases, defaults and downgrades were largely limited to the lowest rating categories, resulting in generally strong ratings performance in 2020. In its base case, Moody's analyzed the underlying collateral pool as having a performing par (after treating deferring securities as performing if they meet certain criteria) of $260.9 million, defaulted/deferring par of $0 million, a weighted average default probability of 12.33% (implying a WARF of 1527), and a weighted average recovery rate . If corporate ratings were perfectly rank ordered so that all defaults occurred only among the lowest-rated entities, the curve would capture all of the area above the diagonal on the graph (the ideal curve), and its Gini coefficient would be 1 (see chart 31). /ratings/en/research/articles/210407-default-transition-and-recovery-2020-annual-global-corporate-default-and-rating-transition-study-11900573 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. 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. 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. S&P Global Ratings had previously withdrawn its ratings on Techniplas. On March 9, 2020, Bluestem Brands Inc. defaulted, having filed for Chapter 11 bankruptcy to restructure its debt. These weights are based on each cohort's rating level's contribution to the 40-year total issuer base for each rating level. 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. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro. On Feb. 21, 2020, S&P Global Ratings raised the issuer ratings to 'CCC-' from 'SD', after the issuer reached a settlement on the US$350 million notes via a partial exchange, and the new shareholder Beijing Energy Group Co. Ltd. can provide credit enhancements. This was especially evident during the global financial crisis, when many highly rated banks defaulted within a short amount of time after initial downgrades. S&P Global Ratings lowers its rating on an obligor to 'D' or 'SD' if the obligor is conducting a distressed exchange offer. In return, the issuer agreed to a small increase in overall interest (cash interest plus PIK) for the first quarter. However, even when we limit the pool of new issuers to those that have never been rated before, speculative-grade issuers still account for 75% of the total. 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. Corporate downgrades also increased, to near an all-time high. Earlier, on April 1, 2020, we lowered our issuer credit rating on Gavilan to 'CCC-' from 'CCC+' after the issuer drew the full amount on the US$200 million reserve-based lending facility, which was up for redetermination in April 2020. On March 17, 2020, we withdrew our issuer credit rating at the issuer's request. Note: Descriptive statistics for regions other than U.S. calculated from 1996 to 2020 due to sample size considerations. 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. The default rate for all Moody's-rated corporate issuers rose to 5.4% at the end of 2009 from 2.0% at year-end 2008. 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+'. To compute one-year rating transition rates by rating category, we compared the rating on each entity at the end of a particular year with the rating at the beginning of the same year. Earlier, on Dec. 5, 2019, we lowered the rating on the company to 'CCC+' from 'B' because it was facing heightened risk in addressing the US$550 million secured notes maturing in November 2022. 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). Default activity in 2020 did increase, but to a lesser extent than recent recessions (see chart 1 and table 1). 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 | On Jan 1, 2001, Edward I. Altman and others published Analyzing and Explaining Default Recovery Rates | Find, read and cite all the research you need on ResearchGate The issuer's operation was suffering from weak crude oil prices and depressed demand. Default, Transition, and Recovery: 2020 Annual Global Corporate Default And Rating Transition Study, China's Local Governments Are Shedding Their Ties To Struggling SOEs, Instant Insights: Key Takeaways From Our Research, Research Update: Dexus Wholesale Property Fund Outlook Revised To Stable From Positive On Merger Completion; 'A' Ratings Affirmed, Scenario Analysis: Higher Rates Threaten The Credit Quality Of 13 EMEA Retail And Restaurant Companies. On June 26, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Irving, Texas-based CEC Entertainment Inc. to 'D' from 'CC' as the company filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. 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. The COVID-19 pandemic and lockdowns in 2020 led to one of the deepest recessions since the Great Depression roughly 90 years ago. 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. 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 June 5, 2020, we withdrew our ratings on the issuer. For the most part, the speculative-grade share of every sector has grown over the past decade, with the exception of the real estate sector. On Oct. 13, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC' from 'SD' following the completion of the exchange. Earlier, on April 15, 2020, we lowered our issuer credit rating on CEC to 'CC' from 'CCC' following the company's announcement that it formed a restructuring committee to explore various strategic alternatives, including an out-of-court or in-court restructuring. We viewed the proposed transaction, if completed, as distressed and tantamount to a selective default because the proposed transaction involved debt exchange at a discount. Broadly speaking, the average and median times to default for each rating category are longer when based on the initial rating than when based on subsequent ratings, particularly for speculative-grade ratings. In other words, the use of a rating category suggests that transitions, for example, to 'AA' from 'AA-' or to 'BBB+' from 'BBB-', are not considered to be rating transitions because the rating remained within the rating category.
PDF An Update on Proposed C1 Bond Factors - National Association of On Nov. 18, 2020, S&P Global Ratings withdrew the issuer credit rating at the issuer's request. On Nov. 23, 2020, S&P Global Ratings withdrew its rating on the issuer. On Sept. 21, 2020, S&P Global Ratings lowered the long-term issuer credit rating on Norway-based oilfield services provider PGS ASA to 'SD' from 'CCC' after it missed a principal repayment. On Oct. 1, 2020, S&P Global Ratings lowered its long-term issuer credit rating on New Hampshire-based specialty apparel retailer Jill Acquisition LLC to 'SD' from 'CC', as the issuer closed its previously announced transaction to extend the maturity on its debt by two years, which we consider distressed and tantamount to default.