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The amendment includes a discount on debt for some of its debtholders, which we assess as equivalent to default. As one measure of ratings performance, the cumulative share of defaulters was plotted against the cumulative share of issuers by rating in a Lorenz curve to visually render the accuracy of its rank ordering (for definitions and methodology, refer to Appendix II). (For a detailed explanation of our data sources and methodology, see Appendix I.). 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. On June 10, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Michigan-based inventory service and data collection provider RGIS Holdings LLC to 'D' from 'CCC-' after the issuer missed an interest payment on its secured term loan due on April 30, 2020. Earlier, on April 20, 2020, we lowered our issuer credit rating on Valaris to 'CCC-' from 'CCC+' following the collapse in oil prices that led to a sharp drop in demand for all oilfield services, and the offshore activity that was expected to be weak over at least the next two years, given the higher cost, higher operating risk, and longer payback periods for offshore projects relative to onshore plays. The date the debtor filed for, or was forced into, bankruptcy. On Sept. 14, 2020, we withdrew the issuer credit ratings on the company at its request. The sovereign downgrades of China in 2017, the U.K. in 2016, France in 2012, and the U.S. in 2011 have factored into the downgrades of many higher-rated financial services companies. On May 27, 2020, Texas-based retailer Tuesday Morning Corp. defaulted as the company filed for Chapter 11. 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). Post default, the issuer has been upgraded three times, leading to a 'B' rating on Dec. 14, 2020, with a positive outlook, due to its improved financials and liquidity. 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first day of that year, and it would not be included in any pool after the last day of 1990 because the rating had been withdrawn by then. On June 2, 2020, S&P Global Ratings lowered its issuer credit rating on U.K.-based offshore drilling contractor Noble Corp. PLC to 'SD' from 'CCC-'as the company paid off 85% of its two seller loans (unrated) in exchange for a discount to the outstanding balance, effectively repurchasing both loans at about 85% of par value. On April 12, 2020, Pace Industries Inc. filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. The company exchanged $315 million of its existing unsecured notes for new 9% convertible secured notes due 2025, which we considered less than the original promise and tantamount to default. Posted on . On Oct. 9, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Brazil-based telecom operator Oi S.A. to 'SD' from 'CC' after the issuer announced that the judicial court ratified the amendment to the company's judicial reorganization plan, which was approved by the majority of its creditholders on Sept. 8, 2020. For the purposes of this study, we form static pools by grouping issuers (for example, by rating category) at the beginning of each year, quarter, or month that the database covers. This study analyzes the rating histories of 21,693 companies that S&P Global Ratings rated as of Dec. 31, 1980, or that were first rated between that date and Dec. 31, 2020. On Nov. 17, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC+' from 'SD' on lower refinancing risk. On Jan. 8, 2021, S&P Global Ratings withdrew its issuer credit rating at the company's request. If S&P Global Ratings' corporate ratings only randomly approximated default risk, the Lorenz curve would fall along the diagonal. Default activity in 2020 did increase, but to a lesser extent than recent recessions (see chart 1 and table 1). On Aug. 26, 2020, S&P Global Ratings raised the issuer credit rating to 'B-' from 'SD'. IssuanceEconomist For 2019's offerings of US$-denominated corporate bonds, Higher ratings show a negative correspondence with the observed frequency of default. On Sept. 25, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC+' from 'SD' as the liquidity metrics significantly improved and debt was lower, with sources of cash exceeding uses by significantly more than 1.5x in the following 12 months. This transaction brought remaining principal balance to US$29 million. On May 25, 2020, S&P Global Ratings withdrew its credit ratings on the issuer. According to S&P, at the end of 2020, their 12-month trailing default rates amounted to 6.6% for U.S. speculative-grade. Moody's Economy.com January 21, 2009 The new president and Congress are working to implement a large fiscal stimulus plan to mitigate the severe economic downturn. The procedure for calculating the Gini coefficients is illustrated in chart 31: Area B is bounded by the random curve and the Lorenz curve, while area A is bounded by the Lorenz curve and the ideal curve. The group issued a US$450 million senior secured term loan and US$111 million senior secured term loan due in May 2024 and refinanced the US$111 million additional RCF that was maturing in December 2020. After beginning with heightened credit market stress and a 45-plus-day stretch without any speculative-grade issuance in the U.S. and Europe, 2019 ultimately saw only marginally higher default and downgrade rates than 2018. On Oct. 15, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Spain-based private gaming service provider Codere S.A. to 'SD' from 'CCC' after the scheme of arrangement was approved by the courts, after 99.6% of creditors participating in the scheme voted in favor. This influx of new speculative-grade issuers has contributed to the growing share of speculative-grade ratings globally, with the U.S. and European regions accounting for roughly two-thirds of the total since 2010. Table 10 displays the median, average, and standard deviations for the time to default from the original rating. The number of 'AAA' rated issuers globally declined to just eight by the end of 2020 from 89 at the beginning of 2008. We treated this as distressed because the issuer did not meet its contractual obligation to pay principal and interest in a timely manner, and did not adequately compensate lenders for agreeing to temporarily waive their rights. This relationship between higher ratings and higher ratings stability holds even over longer time horizons (see table 21) and when broken out by region (see table 22). ROYAL CARIBBEAN CRUISES LTD . We did not expect the company to make the interest payments due June 30 and anticipated that it could complete a comprehensive debt restructuring with its debtholders prior to Sept. 30, 2020, which is when its latest forbearance agreement would expire and its next interest payments come due. All 1981 static pool members still rated on Jan. 1, 2020, had 40 one-year transitions, while companies first rated on Jan. 1, 2020, had only one. On May 21, 2020, after the settlement of the exchange, we raised the issuer credit rating to 'CCC+' from 'SD'. 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. Entities that have had ratings withdrawn--that is, revised to not rated (NR)--are surveilled with the aim of capturing a potential default. This default and rating transition study includes industrials, utilities, financial institutions (banks, brokerages, asset managers, and other financial entities), and insurance companies globally with long-term local currency ratings from S&P Global Ratings. Later, the issuer commenced a Chapter 11 bankruptcy and was looking to restructure its capital structure. On May 25, 2020, S&P Global Ratings lowered the issuer credit rating on U.K.-based foreign-exchange service provider Travelex Holdings Ltd. to 'D' from 'CCC' after the issuer failed to make the interest payments on its senior secured notes. The debt structure of the issuer became unsustainable, with adjusted debt to EBITDA close to 8x in 2019. Later, on Oct. 15, 2020, we withdrew the ratings at the issuer's request. The new notes are in a payment favorable position. The company extended the maturity on its revolving credit facility of US$135 million by one week. This transaction was viewed as distressed because the exchange was at a much discounted rate, of about 70 cents on a dollar. 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 restructuring was viewed as a distressed exchange because it would delay the interest payments. Consistent with the increase in the number of defaults in 2020, the volume of debt affected by defaults almost doubled to $353.4 billion. The coronavirus pandemic-related business disruption (i.e., diamond sales and marketing) affected the cash flow of the issuer. The company's credit quality deteriorated with the pressure on airlines' cash flows and liquidity due to the coronavirus pandemic. On May 27, 2020, S&P Global Ratings withdrew its ratings on the issuer. On Dec. 28, 2020, S&P Global Ratings withdrew its rating at the issuer's request. The downgrade followed the completion of the partial repurchase of senior secured notes. 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. We considered this exchange as a distressed exchange. Rising stars. On June 5, 2020, we withdrew our ratings on the issuer. 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. 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. 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. 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 rating action followed the company's distressed exchange after repaying only a portion of amount outstanding on its 1.5-lien notes. The coronavirus pandemic-related impact has further weakened the operational performance and financial results. 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. On July 20, 2020, S&P Global Ratings withdrew its ratings at the issuer's request. These tables can also be constructed for each rating category. Most were nonfinancial companies, and five were financial services issuers. On July 7, 2020, we lowered the issuer credit rating on Forum to 'CC' from 'CCC-' following the issuer's announcement to exchange its remaining $328 million of 6.25% senior unsecured notes due October 2021. Data provided in table 13 also differ from default rates in table 24 owing to the use of the static pool methodology. Of the 226 defaults in 2020, 198 were from companies rated as of the beginning of the year. As in most recovery periods, defaults fell relative to the prior year, with the S&P Global Ratings global speculative-grade corporate default rate falling below 2% for only the eighth time in the past 41 . 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. The rating process begins when an arranger, issuer, sponsor, or underwriter contacts a member of Fitch's Business Relationship Management (BRM) group with a request to engage Fitch. This included two main components: first, the conversion of about 1,234 million of debt into a new 574 million facility and 660 million of equity on Sept. 22, 2020, and second, the issuance of 457 million of new debt to repay the US$110 million J.P. Morgan bridge facility and to support Technicolor's liquidity needs, undertaken in July and September 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 rating action followed the issuer's completed exchange of its unsecured notes of cash and PIK. On March 9, 2020, Bluestem Brands Inc. defaulted, having filed for Chapter 11 bankruptcy to restructure its debt. 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'. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro. 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. 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. It expected the transaction would reduce net debt by $400 million. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENTS FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. Later, on Dec. 10, 2020, we raised the issuer credit rating to 'CCC+' from 'SD' after the company completed debt repurchases on favorable terms. Earlier, in 2004, S&P Global Ratings withdrew its ratings on the company. NPC is the largest franchisee of Pizza Hut and Wendy's restaurants operating nearly 1,600 locations in the U.S. On July 1, 2020, S&P Global Ratings lowered the ratings on the issuer to 'D' from 'SD' following its Chapter 11 bankruptcy filing, following which, on Aug. 5, 2020, the ratings on the issuer were withdrawn. In the transaction, the issuer raised another US$200 million notes due in 2026. Issuers rated 'AAA' were still rated 'AAA' one year later 87.1% of the time, while issuers rated in the 'CCC'/'C' category retained those ratings just 43.1% of the time. Specifically, 87.6% were rated 'CCC+' or lower just prior to default, which is much higher than the 69.4% long-term average. On Aug. 26, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Virginia-based travel assistance provider KCIBT Holdings L.P. to 'SD' from 'CCC+' after the issuer deferred a cash interest payment on its second lien-term loan. Acharya: Credit Risk - Introduction 7 Moody's Definition Of Default: "Credit Events" 1. S&P Global Ratings had previously withdrawn its ratings on Techniplas. Average and standard deviation for Europe calculated for the period 1996-2020 due to sample size considerations. The issuer was also in talks with its lenders and noteholders for a comprehensive financial restructuring. 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 2, 2020, we withdrew our ratings on the issuer after it filed for reorganization under Chapter 11. These two sectors, along with leisure time/media, had 2020 default rates in excess of 6%, which were much higher than other sectors and were markedly higher than their sectoral long-term weighted averages (see table 19). Uploaded by Dimitris Vrachoritis. Default activity in 2020 did increase, but to a lesser extent than recent recessions (see chart 1 and table 1). However, the two-year default rate column in table 24 is not the same as column 'D' of the average two-year transition matrix in table 34. 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. . This opinion focuses on the obligor's capacity and willingness to meet its financial commitments as they come due.