On Nov. 6, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Florida-based health care service provider CDRH Parent Inc. to 'SD' from 'CCC+' because of the distressed nature of its credit agreement amendment, where the issuer amended its credit agreement to provide covenant relief and improve liquidity. Reduced EBITDA amid the pandemic and oil price crisis in early 2020 stressed the operating performance of the issuer. 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. In table 13, the times to default are from the date that each entity received each unique rating in its path to default. Post the transaction, the company will have new senior secured three-and-half-year US$171.4 million notes due in 2024 and five-year US$251 million notes due in 2025. The transaction was viewed as distressed because lenders got less than they were originally promised. 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. It is expected that North American and international markets are likely to contract up to 50% and 20%, respectively. On April 22, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Massachusetts-based department store operator Neiman Marcus Group Ltd. LLC to 'D' from 'CCC-' after the issuer missed paying interest due on unsecured notes maturing October 2021. 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. Distressed exchanges (which are typically selective defaults) accounted for 37.6% of all defaults, the same as missed interest or principal payments (37.6%). The Content shall not be used for any unlawful or unauthorized purposes. For instance, in table 32, the weighted average first-year default rate for all speculative-grade-rated companies for all 40 pools was 3.71%, meaning that an average of 96.29% survived one year. On Nov. 25, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC-' from 'SD' following the debt repurchases. Moody's optimistic scenario entails a strong recovery leading to a default rate forecast of just 2% for the year-end and maintaining around the 2% area for the initial months of 2022. 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. If the rating on the issuer was withdrawn in the middle of 1991, it would be included in the column representing transitions to NR in the 1991 transition matrix. Our analysis is conducted at the bond level with RAD as the recovery rate measure. On July 20, 2020, S&P Global Ratings withdrew its ratings at the issuer's request. It had other coupon payments of US$8 million each in August and October. 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. However, since 2008, speculative-grade ratings in Europe have surged, with the share more than doubling to 44.5% at the end of 2020. 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. 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 updated 2021 energy default rate forecasts are 8% and 6% for LL and HY . Later, on May 2, 2020, the issuer entered into standstill agreement with the lenders of the notes due 2021 and the term loan due 2023, until July 31, 2020. As a result, the trustee placed the issuer into receivership (with KordaMentha as receivers). Furthermore, weak liquidity supports our view of O1 Properties' general default. 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 Denbury Resources Inc. to 'D' from 'CCC+'. The issuer submitted a prepackaged plan. This preview shows page 40 - 41 out of 49 pages. of 15.1%. Table 29 displays the summary of one-year transitions in the investment-grade and speculative-grade rating categories. On May 15, 2020, S&P Global Ratings lowered the issuer credit rating on Texas-based oilfield products and services provider Forum Energy Technologies Inc. to 'SD' from 'CC'. On Nov. 18, 2020, S&P Global Ratings lowered the issuer credit ratings to 'D' from 'CCC-' after the issuer missed interest payments due on Oct. 15, 2020, and announced that it had entered into a restructuring support agreement, which it intended to file for 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. On Sept. 25, 2020, we withdrew our 'D' long-term issuer and issue credit ratings at the issuer's request. 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. On Aug. 19, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Georgia-based building products producer Omnimax International Inc. to 'D' from 'CCC-' after the issuer announced that it missed a principal repayment due on its US$385 million senior notes. Difference between last four quarters and weighted average, Largest corporate defaulters by outstanding debt amount, Texas Competitive Electric Holdings Co. LLC. As per the forbearance agreement, the term loan and ABL lenders agreed to not exercise or enforce certain remedies with respect to this nonpayment for 60 days, ending May 31, 2020. 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. We make our best effort to capture such defaults in the database, and we include an entity in the annual default rate calculations if it was rated as of Jan. 1 in the year of default. An obligor rated 'SD' (selective default) or 'D' (default) is in default on one or more of its financial obligations, including rated and unrated financial obligations but excluding hybrid instruments classified as regulatory capital or in nonpayment according to terms. Moody's Seasoned Baa Corporate Bond Yield-Moody's Seasoned Aaa Corporate Bond Yield. For the purposes of this study, we form static pools by grouping issuers (for example, by rating category) at the beginning of each year, quarter, or month that the database covers. The rating action followed the issuer's completed exchange of its unsecured notes of cash and PIK. 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. The cumulative value of the repurchase represents nearly 9% of the term loan debt outstanding compared with the value in fiscal 2019. 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. The two upgrades are U.S.-based Noble Energy Inc. and Infor Inc. Companies that experience large downgrades are often outliers, especially in years of high credit stability. However, given that machine learning currently receives a lot of attention in the credit risk community, further reviews and benchmark studies would certainly be welcome. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro. On March 17, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Georgia-based data center operator Internap Corp. to 'D' from 'CCC+' after the issuer, along with its subsidiaries, filed for Chapter 11 bankruptcy with the Southern District of New York. 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. On Aug. 26, 2020, S&P Global Ratings lowered its long-term issuer credit rating on New York-based fitness club operator Town Sports International Holdings Inc. to 'SD' from 'CC' after the issuer failed to pay its US$14 million outstanding revolver balance. On Aug. 6, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC-' from 'SD'. The company entered into a forbearance agreement with its senior debt lenders and is expected to pursue a debt restructuring. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro. On Sept, 24, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Switzerland-based automobiles and components manufacturing company Garrett Motion Inc. to 'D' from 'B' after the issuer filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. 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 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. The CreditWatch negative reflected Avianca's weakening liquidity and that the absence of extraordinary financial support from shareholders or the Colombian government could force the company to default on the repayment of its 8.375% senior unsecured notes due 2020. 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 Jan. 8, 2021, S&P Global Ratings withdrew its issuer credit rating. On Aug. 19, 2020, we withdrew our issuer credit ratings on the company at its request. "ESPP" means the Company's 2020 Employee Stock Purchase Plan, . The status of the issuer's subsidiary, Anagram International, is changed to unrestricted subsidiary, which raised another US$110 million of secured debt. On May 28, 2020, SMLP closed the acquisition of Summit Midstream Partners LLC (Summit Investments), the owner of its general partner (Summit Midstream Partners Holdings LLC [SMP Holdings]), in a simplification transaction. On Nov. 17, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC' from 'SD', reflecting our assessment of the company's credit risk following the debt repurchases. In contrast, the relationship is slightly more discontinuous when we examine rating transitions across modifiers (the plus or minus after a rating), but these variations are likely a result of sample size considerations, and we do not consider them significant (see table 23). Second Party Opinions & Transaction Evaluations, U.S. Local Governments Credit Scenario Builder, Annual Global Trends: Defaults Reach Their Highest Level Since 2009, Lower Ratings Are Much More Vulnerable To Default, Industry Variations: Energy And Consumer Services Lead Again, But Defaults Were Widespread In 2020, Speculative-Grade Ratings Represent About Half Of Corporate Issuers, Transition And Cumulative Default Rates Demonstrate Ratings Performance, Criteria For Assigning CCC+, CCC, CCC-, And CC Ratings, U.S. Recovery Study: Clouds Loom As Defaults Rise. 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. On Oct. 2, 2020, S&P Global Ratings raised its issuer credit rating to 'CCC+' from 'SD'. An analysis of transition rates for 2020 suggests that ratings behavior continues to exhibit consistency with long-term trends. On Dec. 9, 2020, S&P Global Ratings withdrew its 'D' issuer credit rating at the issuer's request. The latest step in this effort is the plan put forth by House Democrats in mid-January. In 2020, the share of new speculative-grade issuers rated 'B-' and lower reached 56.8%. Recovery rate is essential to the estimation of the portfolio's loss and economic capital. Earlier, on March 19, 2020, we lowered the issuer credit rating on Libbey to 'CCC' from 'B-' on constrained liquidity and less likelihood of refinancing its term loans. However, despite posting the 10th-highest annual default rate in 2020, the global Gini ratio finished closer to the middle of the annual distribution (18th), based on 40 years of observations. S&P Global Ratings assigned initial ratings to 622 issuers in 2020, down from 650 issuers in 2019 and 875 in 2018.