Key Takeaways
- Speculative-grade issuers have experienced mixed signs of financial health, demonstrating both earnings growth recovery and persistent challenges to cash flow and coverage measures.
- Growth and profitability are slowly returning to normalcy, with a significant portion (70%-80%) of issuers rebounding from steep declines in revenue and EBITDA during the COVID-19 lockdowns.
- Despite recovery signs, the overall business environment remains challenging. The percentage of companies experiencing three or more consecutive quarters of EBITDA declines is increasing, while 28% of issuers witness declines in all three of our key earnings measures (revenue, EBITDA, and EBITDA margin), nearly the highest in the past two years.
- We conclude that we were in the late stages of the credit cycle in the third quarter of 2023, as many of our cyclical-rated companies saw poor earnings growth momentum.
- Nevertheless, the two-year trend of slowing EBITDA growth ended in third-quarter 2023, with many product- and service-focused companies seeing earnings growth momentum.
- As there isn't always a strong connection between an issuer's earnings growth and free operating cash flow (FOCF) to debt improvements, we anticipate that many issuers with large cash flow deficits will struggle to grow into their capital structures over the next 12-24 months unless they reduce their interest expense, capital investments, or debt.
Earnings performance has been resilient over the past two years, although growth has been lackluster since third-quarter 2021 (see tables 4a, 4b, 4c). However, the trend of slowing growth ended in third-quarter 2023, when the median EBITDA growth rate for the last 12 months (LTM) slightly increased to 0.8% from 0.5% in second-quarter 2023. Although a single quarter cannot be used to predict a trend, this increase is a potential step toward future earnings growth. Our analysts expect EBITDA growth to improve to the mid-single-digit percentage in 2024.
S&P Global Ratings has observed that credit metrics vary widely within and across rating categories, so statistical measures such as averages and medians provide only a partial picture. Accordingly, in this report we focus on our rated entity (issuer) counts to analyze the third-quarter 2023 earnings growth improvement. Additionally, we delve deeper into industries experiencing the most earnings pressure or improvement. We focus on EBITDA and EBITDA margins as our earnings proxies.
For our earnings review, we used a sample portfolio representing roughly two-thirds of our speculative-grade portfolio (see Data Used In This Report). We then track the credit trends and quality of speculative-grade borrowers in North America through four key credit metrics: median EBITDA interest coverage, FOCF to debt, gross leverage, and EBITDA growth. FOCF to debt has improved for four consecutive quarters (see tables 2a, 2b, 2c), but cash flow generation shortfalls remain elevated for many issuers (table 3).
We expect the federal funds rate to fall 80 basis points (bps) in 2024 and about 260 bps by the end of 2025. While lower rates will help many issuers, a reduction in interest rates may not be enough for the large percentage (21%) of issuers with FOCF to debt of less than -3%. They will likely require a significant increase in earnings, sharp cuts in capital investments, or a recapitalization.
Lastly, we look at the latest trends in recovery ratings on newly issued first-lien debt, which fell in the quarter.
We conclude that we were in the late stages of the credit cycle in the third quarter of 2023, as many of our cyclical-rated companies saw poor earnings growth momentum; and that the road back to improving rating trends may be long and bumpy, especially for highly leveraged, low-rated issuers.
Here, access many of the charts and tables in an interactive format.
Growth And Profitability Measures Slowly Return To Normal
The number of issuers experiencing EBITDA, revenue, or EBITDA margin growth is returning to their long-term historical averages after two macroeconomic shocks (COVID-19 lockdowns and surging inflation). Despite the large increase in issuers reporting revenue declines--jumping to 47% in third-quarter 2023 from 14% in first-quarter 2022--volatility is broadly trending lower. In the quarter, 54% of our issuers reported EBITDA growth and 53% reported revenue growth, which is below the five-year average of about 60%.
Chart 1
Furthermore, 70%-80% of issuers have recovered from the sharp revenue and EBITDA declines during COVID-19 lockdowns. About 80% have higher revenue as of the third quarter of 2023, and 72% have higher reported EBITDA. Additionally, EBITDA margin, which has historically been the most challenging profitability measure to improve, grew to a median of 15.1% from 14.6% pre-COVID-19, with 54% of issuers reporting higher EBITDA margins. Nevertheless, industries have a broad dispersion, with many still struggling to recover.
Table 1
| Speculative-grade issuers by industry | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Percent of issuers with higher revenue, EBITDA margin, EBITDA, or FOCF to debt at Q3 2023 vs. Q4 2019 (pre-COVID-19) | ||||||||||
| Industry | % with revenue higher than pre-COVID-19 | % with EBITDA margin higher than pre-COVID-19 | % with EBITDA higher than pre-COVID-19 | % with FOCF to debt higher than pre-COVID-19 | ||||||
| Homebuilders & Developers | 86% | 100% | 100% | 86% | ||||||
| Environmental Services | 88% | 88% | 100% | 75% | ||||||
| Capital Goods | 88% | 63% | 92% | 46% | ||||||
| Oil & Gas Drilling, Equipment & Services | 75% | 88% | 88% | 63% | ||||||
| Oil & Gas Integrated, Exploration & Production | 95% | 67% | 87% | 85% | ||||||
| Healthcare Equipment | 83% | 50% | 83% | 58% | ||||||
| Building Materials | 97% | 74% | 82% | 82% | ||||||
| Technology - Software & Services | 90% | 63% | 82% | 42% | ||||||
| Containers & Packaging | 85% | 54% | 81% | 50% | ||||||
| Business & Consumer Services | 88% | 49% | 81% | 50% | ||||||
| Operating Leasing | 75% | 50% | 75% | 75% | ||||||
| Engineering & Construction | 75% | 69% | 75% | 63% | ||||||
| Metals & Mining Downstream | 85% | 50% | 75% | 60% | ||||||
| Metals & Mining Upstream | 87% | 52% | 74% | 57% | ||||||
| Leisure & Sports | 75% | 65% | 73% | 54% | ||||||
| Specialty Chemicals | 73% | 64% | 73% | 45% | ||||||
| Technology - Hardware & Semiconductors | 65% | 65% | 71% | 39% | ||||||
| Consumer Durables | 80% | 50% | 70% | 45% | ||||||
| Forest & Paper Products | 83% | 67% | 67% | 50% | ||||||
| Pharmaceuticals | 78% | 56% | 67% | 33% | ||||||
| Retail & Restaurants | 77% | 56% | 66% | 55% | ||||||
| Healthcare Services | 89% | 50% | 63% | 37% | ||||||
| Telecom & Cable | 61% | 45% | 61% | 35% | ||||||
| Auto Suppliers | 82% | 35% | 59% | 35% | ||||||
| Branded Nondurables | 75% | 43% | 56% | 59% | ||||||
| Aerospace & Defense | 59% | 50% | 55% | 36% | ||||||
| Commodity Chemicals | 75% | 33% | 50% | 50% | ||||||
| Media & Entertainment | 58% | 41% | 49% | 37% | ||||||
| Transportation Cyclical | 75% | 25% | 42% | 33% | ||||||
| Total | 80% | 54% | 72% | 51% | ||||||
| Reflects GAAP reported last twelve months (LTM) at quarter end. Excludes subsectors with less than five issuers and real estate investment trusts. The total row reflects all the issuers within the sample portfolio. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||
Below The Surface, The Business Environment Remains Challenging
In third-quarter 2023, EBITDA fell for 46% of issuers, while 28% witnessed declines in all three of our key earnings measures (revenue, EBITDA, and EBITDA margin), which is nearly the highest in the past two years (31% at second-quarter 2023).
Chart 2
More concerning, issuers with consecutive quarters of EBITDA declines are trending higher. In Q3 2023, 23% of issuers reported three consecutive quarters of EBITDA declines, an increase from 20% in Q2 2023. Issuers that saw EBITDA fall for four consecutive quarters increased to 14% from 12%. Retail & restaurants, branded nondurables, business & consumer services, commodity chemicals, and metals & mining downstream had the most issuers with four consecutive quarters of EBITDA declines.
Cyclical Issuers Face Earnings Growth Challenges; Service & Product Issuers Prove Resilient
Across industries, cyclical issuers are most challenged. 58% of issuers with a commodity focus experienced a decline in LTM quarter-over-quarter (QoQ) EBITDA, compared to 43% with a capital or assets focus and 42% with a product and service focus.
We provide the percentage of issuers within each industry that saw EBITDA decline in Q3 2023, the median percent that LTM EBITDA fell QoQ in that quarter only if EBITDA fell, and the median ratings for issuers that saw EBITDA fall (table 2). We also indicate industries that have seen a weakening or improving shift in the momentum of issuers reporting EBITDA declines.
Table 2
| Speculative-grade issuers reporting EBITDA declines by industry & group profile at Q3 2023 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| % of issuers reporting EBITDA declines | Group profile | Industry | Q3 2023 LTM QoQ EBITDA Decline§ | Median issuer rating† | Over 1 standard deviation of change | |||||||
| 92% | Commodity Focus/Cost Driven | Commodity Chemicals* | -21% | B | Weakened | |||||||
| 85% | Commodity Focus/Scale Driven | Oil & Gas Integrated, Exploration & Production* | -14% | B+ | -- | |||||||
| 83% | Commodity Focus/Cost Driven | Forest & Paper Products | -12% | B | Weakened | |||||||
| 71% | Capital or Asset Focused | Homebuilders & Developers | -3% | B | Weakened | |||||||
| 65% | Commodity Focus/Scale Driven | Metals & Mining Downstream | -12% | BB- | -- | |||||||
| 63% | Commodity Focus/Scale Driven or Capital or Asset Focused | Oil & Gas Drilling, Equipment & Services | -3% | BB | Weakened | |||||||
| 63% | Services and Product Focus | Environmental Services | -7% | B+ | -- | |||||||
| 61% | Capital or Asset Focused | Technology - Hardware & Semiconductors* | -11% | BB- | Weakened | |||||||
| 59% | Services and Product Focus | Retail & Restaurants* | -6% | BB- | Weakened | |||||||
| 58% | Capital or Asset Focused | Transportation Cyclical | -31% | B+ | -- | |||||||
| 51% | Services and Product Focus | Media & Entertainment* | -8% | B+ | -- | |||||||
| 50% | Other | Operating Leasing | -9% | BB-/B+ | -- | |||||||
| 50% | Commodity Focus/Scale Driven or Product Focus/Scale Driven | Healthcare Equipment | -14% | CCC+/B- | -- | |||||||
| 48% | Services and Product Focus | Leisure & Sports* | -7% | B+ | -- | |||||||
| 46% | Capital or Asset Focused | Containers & Packaging* | -5% | B | -- | |||||||
| 43% | Commodity Focus/Cost Driven | Metals & Mining Upstream | -12% | B | Strengthened | |||||||
| 43% | Services and Product Focus | Business & Consumer Services* | -5% | B- | -- | |||||||
| 43% | Services and Product Focus | Branded Nondurables* | -8% | B | Strengthened | |||||||
| 41% | Services and Product Focus | Aerospace & Defense | -6% | B- | -- | |||||||
| 40% | Services and Product Focus | Consumer Durables | -5% | BB/BB- | -- | |||||||
| 39% | Services and Product Focus | Telecom & Cable* | -5% | B/B- | Strengthened | |||||||
| 38% | Capital or Asset Focused | Building Materials* | -4% | B+ | -- | |||||||
| 36% | Capital or Asset Focused | Specialty Chemicals | -3% | BB- | -- | |||||||
| 32% | Capital or Asset Focused | Capital Goods* | -5% | B | -- | |||||||
| 28% | Commodity Focus/Scale Driven | Health care Services* | -4% | B- | Strengthened | |||||||
| 25% | Services and Product Focus | Engineering & Construction | -12% | B/B- | -- | |||||||
| 24% | Capital or Asset Focused | Auto Suppliers | -9% | BB-/B+ | Strengthened | |||||||
| 22% | Services and Product Focus | Pharmaceuticals | -15% | B | Strengthened | |||||||
| 19% | Services and Product Focus | Technology - Software & Services* | -6% | B- | Strengthened | |||||||
| The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. *Top 15 subsectors by count of issuers with EBITDA declines. The last column reflects the momentum of issuers reporting EBITDA declines or increases. We use the trailing 6-quarter (which includes the current quarter) z-score of the percentage of issuers with EBITDA declines or increases. Weakened industries demonstrated a one-standard-deviation increase in the percentage of issuers with EBITDA declines. In contrast, strengthened industries demonstrated a one-standard deviation decrease. Excludes subsectors with less than five issuers and REITS. §Median Q3 2023 LTM QoQ EBITDA decline percent reflects reported GAAP financials without S&P Global Ratings' adjustments. †Median issuer rating for issuers reporting EBITDA declines. LTM--Last 12 months. QoQ--Quarter over quarter. Source: S&P Global Ratings. | ||||||||||||
Commodity-focused issuers
Commodity-focused issuers often compete on cost efficiency, price, and availability, with little product differentiation. Factors such as higher costs, price volatility, persistent customer destocking, macroeconomic-driven softness, some challenged key end markets (such as housing), and slower-than-expected growth in China have hampered earnings growth. For example, in third-quarter 2023, about 92% of commodity chemical and 83% of forest and paper issuers saw EBITDA decline. Adverse operating conditions due to weak end-market demand, volatile prices, and channel destocking resulted in depressed earnings. Additionally, higher borrowing costs and cash flow stress resulted in many downgrades of commodity chemical issuers in 2023. We expect soft demand fundamentals for these two industries to continue in 2024.
Alternatively, the health care services industry has experienced a steady demand for its services, and its EBITDA level remained steady throughout 2023. However, despite an improving labor situation, the industry's profitability is still lagging behind pre-pandemic levels. We expect the challenge of managing labor costs and high interest expenses to continue to weigh down cash flows despite expected earnings improvements.
Capital- and asset-focused issuers
The current financing and economic environment poses significant challenges for issuers focused on capital or assets, which often require substantial investments. Factors such as high interest rates, lower customer investment spending, and supply chain disruptions have hurt demand.
For instance, the health care equipment industry saw half of its issuers reporting EBITDA declines, with a median of -14% in the quarter. The median rating for issuers that saw EBITDA decline was low in the 'B-' to 'CCC+' range, highlighting the industry's high credit risks.
However, there are a few bright spots despite the negative earnings trends. For instance, although homebuilders and developers saw 71% of their issuers report EBITDA declines in third-quarter 2023, we expect resilient demand to spur their recovery. Tight supply, low existing home inventory, and prudent capital allocation are all factors that we believe will benefit this sector in the long term. Additionally, although the technology hardware and semiconductor industry saw 61% of issuers report EBITDA declines, we anticipate that technology hardware spending will improve in 2024, with growth across segments such as PC and smartphone shipments, servers, storage, and semiconductors.
Service- and product-focused issuers
Service- and product-focused issuers often rely on their brands, product quality or technology, and service reputation to differentiate their offerings. Wage inflation, rising costs, and shifting consumer spending have impaired demand and earnings. Retail and restaurants remain one of the most challenged, with 59% experiencing EBITDA decline in third-quarter 2023 and only 66% with higher EBITDA since before the COVID-19 pandemic. Furthermore, we expect rating trends will remain on a negative trajectory due to slowing consumer spending. Increasing household financial pressure, including multiple years of high inflation, depleted excess savings, reinstated student loan obligations, and higher interest rates, are pressuring demand.
Still, the momentum of issuers reporting EBITDA declines has broadly remained stable or improved in third-quarter 2023. Favorable expectations for industries such as software and services could see improved earnings as they benefit from solid demand for digital transformation, public cloud, and automation solutions.
For the media and entertainment industry, 2024 could be the year when the sector begins to turn the corner as political advertising returns and the impact of the writers strikes fade. Nevertheless, secular challenges as consumers change media consumption patterns continue to pressure some issuers, and less than half have recovered their pre-COVID-19 EBITDA or EBITDA margins.
Improved Earnings Growth Doesn't Always Correlate To Improved FOCF To Debt
S&P Global Ratings expects the federal funds rate to fall about 80 bps in 2024 and about 260 bps by the end of 2025, which we expect to improve EBITDA cash conversion. However, in third-quarter 2023, only 68% of issuers with positive EBITDA growth saw FOCF to debt improve.
The table below displays the number of issuers with free operating cash flow (FOCF) to debt deficits by quarter. The highest rate recorded within our sample was third-quarter 2022, when 39.6% reported cash flow deficits, but it has since fallen to 32.5%. While lower rates will help many issuers, interest rate cuts may not be enough for the large percentage (21%) of issuers with FOCF to debt of less than -300 bps.
Table 3
| FOCF to debt by deficit bands | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Quarter | <=(10%) | >(10%) to (5%)% | >(5%) to (4)% | >(4%) to (3)% | >(3%) to (2)% | >(2%) to (1)% | >(1%) to 0% | Less than 0% | ||||||||||
| Q4 2019 | 7.9% | 5.5% | 1.9% | 1.7% | 2.3% | 2.9% | 5.6% | 27.8% | ||||||||||
| Q4 2020 | 8.0% | 5.0% | 1.1% | 1.2% | 2.5% | 1.8% | 2.7% | 22.3% | ||||||||||
| Q1 2021 | 7.5% | 5.2% | 0.9% | 0.9% | 2.0% | 2.5% | 2.4% | 21.4% | ||||||||||
| Q2 2021 | 8.0% | 5.7% | 1.6% | 1.5% | 1.9% | 1.8% | 3.5% | 23.9% | ||||||||||
| Q3 2021 | 8.4% | 6.9% | 2.6% | 2.1% | 2.2% | 1.5% | 3.4% | 27.0% | ||||||||||
| Q4 2021 | 8.7% | 7.9% | 2.7% | 3.0% | 2.9% | 3.0% | 3.5% | 31.8% | ||||||||||
| Q1 2022 | 10.6% | 9.5% | 2.2% | 2.7% | 3.4% | 4.1% | 3.8% | 36.3% | ||||||||||
| Q2 2022 | 12.7% | 10.8% | 3.4% | 2.0% | 2.9% | 3.6% | 2.7% | 38.1% | ||||||||||
| Q3 2022 | 15.2% | 8.4% | 3.3% | 2.3% | 3.8% | 4.2% | 2.4% | 39.6% | ||||||||||
| Q4 2022 | 12.9% | 9.6% | 2.3% | 2.9% | 3.2% | 2.7% | 4.7% | 38.3% | ||||||||||
| Q1 2023 | 11.4% | 8.9% | 1.7% | 3.3% | 2.7% | 3.1% | 4.2% | 35.3% | ||||||||||
| Q2 2023 | 10.8% | 7.6% | 2.2% | 3.0% | 3.3% | 3.5% | 3.8% | 34.3% | ||||||||||
| Q3 2023 | 8.9% | 7.6% | 2.6% | 2.3% | 2.1% | 4.6% | 4.5% | 32.5% | ||||||||||
| Credit measures reflect GAAP reported numbers, without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||||||||||
First-lien New Issue Recovery Prospects
During fourth-quarter 2023, investor appetite rose further for debt rated 'B' or lower, with the share of new issues 5% higher than the previous quarter (chart 3). The average recovery estimate for new issues inched down to 61% in the fourth quarter from nearly 64% over the past few quarters, primarily due to multiple new issues from a distressed issuer.
Meanwhile, issues with '3' recovery ratings (which implies 50%-70% recovery in the event of payment default) stood at 60% compared to 65% during the last quarter (chart 4). This decrease corresponded to a commensurate increase in lower recovery assessments of '4' (30%-50%) and '6' (0%-10%), which, combined, accounted for a 10% share versus 6% in the third quarter.
Chart 3
Chart 4
Appendix
Table 1a
| Median EBITDA interest coverage by industry | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported last-12-months period (x) | ||||||||||||||||||||||||||||||
| Industry | Entity count | Dec. 31, 2019 | Dec. 31, 2020 | Mar. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | ||||||||||||||||
| Aerospace/Defense | 22 | 3.3 | 2.2 | 2.0 | 1.8 | 1.8 | 1.9 | 2.0 | 2.0 | 2.1 | 2.0 | 2.0 | 2.1 | 2.1 | ||||||||||||||||
| Auto/Trucks | 28 | 3.5 | 2.9 | 3.2 | 4.4 | 4.4 | 4.1 | 3.8 | 3.6 | 4.0 | 4.0 | 3.5 | 2.9 | 2.6 | ||||||||||||||||
| Business and Consumer Services | 76 | 2.1 | 2.4 | 2.6 | 2.7 | 2.7 | 2.8 | 3.2 | 3.1 | 3.0 | 2.4 | 2.1 | 1.9 | 1.8 | ||||||||||||||||
| Cap Goods/Machine&Equip | 103 | 3.0 | 2.9 | 3.1 | 3.2 | 3.2 | 3.5 | 3.6 | 3.4 | 3.5 | 3.2 | 3.0 | 2.9 | 2.8 | ||||||||||||||||
| Chemicals | 25 | 3.4 | 3.0 | 3.3 | 3.7 | 4.8 | 5.0 | 5.2 | 5.3 | 5.1 | 4.3 | 4.2 | 3.2 | 1.9 | ||||||||||||||||
| Consumer Products | 92 | 2.5 | 2.7 | 3.1 | 3.3 | 2.9 | 2.8 | 2.9 | 2.8 | 2.8 | 2.8 | 2.4 | 2.1 | 2.0 | ||||||||||||||||
| Forest Prod/Bldg Mat/Packaging | 45 | 3.0 | 4.0 | 4.0 | 4.8 | 4.7 | 5.1 | 4.8 | 4.8 | 4.7 | 4.9 | 4.3 | 3.8 | 3.9 | ||||||||||||||||
| Healthcare | 93 | 1.8 | 1.8 | 2.0 | 2.2 | 2.3 | 2.2 | 2.1 | 2.0 | 1.7 | 1.6 | 1.4 | 1.5 | 1.5 | ||||||||||||||||
| Media, Entertainment & Leisure | 132 | 3.2 | 1.8 | 1.8 | 2.2 | 2.4 | 2.5 | 2.9 | 2.9 | 2.7 | 2.8 | 2.9 | 2.6 | 2.4 | ||||||||||||||||
| Mining & Minerals | 44 | 4.8 | 3.8 | 4.3 | 5.3 | 6.5 | 7.6 | 9.2 | 8.5 | 6.7 | 7.3 | 7.0 | 5.5 | 4.4 | ||||||||||||||||
| Oil & Gas | 58 | 5.6 | 2.6 | 2.7 | 4.1 | 4.9 | 6.8 | 7.7 | 10.8 | 14.1 | 15.8 | 14.3 | 12.4 | 10.6 | ||||||||||||||||
| Restaurants/Retailing | 77 | 3.4 | 2.3 | 3.0 | 3.9 | 4.0 | 4.1 | 4.5 | 4.5 | 4.5 | 4.4 | 3.8 | 3.4 | 3.0 | ||||||||||||||||
| Real Estate | 18 | 3.6 | 3.3 | 3.3 | 3.4 | 3.2 | 3.5 | 3.8 | 3.6 | 3.7 | 3.9 | 3.9 | 3.8 | 3.3 | ||||||||||||||||
| Technology | 86 | 2.0 | 2.3 | 2.4 | 2.4 | 2.5 | 2.4 | 2.7 | 2.4 | 2.3 | 2.2 | 2.2 | 1.9 | 1.9 | ||||||||||||||||
| Telecommunications | 40 | 2.8 | 3.5 | 3.9 | 3.7 | 4.2 | 4.6 | 4.5 | 4.1 | 4.0 | 4.0 | 3.9 | 3.8 | 3.4 | ||||||||||||||||
| Transportation | 23 | 5.3 | 2.2 | 1.8 | 2.4 | 3.4 | 3.0 | 4.3 | 4.1 | 4.3 | 4.5 | 3.6 | 3.7 | 3.5 | ||||||||||||||||
| Total | 962 | 2.9 | 2.5 | 2.7 | 3.1 | 3.3 | 3.5 | 3.6 | 3.6 | 3.5 | 3.3 | 3.1 | 2.8 | 2.6 | ||||||||||||||||
| Footnote: *Rating as of Jan. 5, 2024. n.m. -- Not meaningful due to small sample size. Coverage calculated as reported EBITDA over reported interest expense, without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||||||||||||||||||||||
Table 1b
| Median EBITDA interest coverage by issuer credit rating | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported last-12-months period (x) | ||||||||||||||||||||||||||||||
| Issuer credit rating* | Entity count | Dec. 31, 2019 | Dec. 31, 2020 | Mar. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | ||||||||||||||||
| BB+ | 100 | 6.3 | 5.7 | 6.6 | 7.5 | 8.5 | 8.4 | 9.1 | 9.3 | 9.5 | 9.1 | 8.7 | 7.9 | 7.4 | ||||||||||||||||
| BB | 106 | 5.5 | 5.2 | 6.0 | 6.4 | 7.1 | 7.4 | 7.9 | 8.3 | 7.9 | 6.4 | 5.9 | 5.5 | 5.5 | ||||||||||||||||
| BB- | 111 | 4.4 | 3.6 | 3.8 | 4.8 | 5.2 | 6.0 | 6.1 | 6.3 | 6.3 | 5.8 | 5.3 | 4.8 | 4.5 | ||||||||||||||||
| B+ | 128 | 3.4 | 2.9 | 3.0 | 3.5 | 3.9 | 4.2 | 4.1 | 4.3 | 4.3 | 4.2 | 3.8 | 3.4 | 3.3 | ||||||||||||||||
| B | 184 | 2.5 | 2.4 | 2.5 | 2.8 | 2.8 | 3.0 | 3.2 | 3.3 | 3.3 | 3.0 | 2.8 | 2.6 | 2.4 | ||||||||||||||||
| B- | 198 | 1.7 | 1.7 | 1.8 | 2.0 | 1.9 | 1.9 | 1.8 | 1.7 | 1.7 | 1.6 | 1.5 | 1.4 | 1.4 | ||||||||||||||||
| CCC+ | 99 | 1.8 | 1.4 | 1.4 | 1.7 | 1.5 | 1.4 | 1.2 | 1.2 | 1.4 | 1.2 | 1.2 | 1.1 | 1.0 | ||||||||||||||||
| CCC | 26 | 1.5 | 1.7 | 1.7 | 1.7 | 1.7 | 1.7 | 1.6 | 1.3 | 1.1 | 1.0 | 0.9 | 0.9 | 0.8 | ||||||||||||||||
| CCC- | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | ||||||||||||||||
| CC | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | ||||||||||||||||
| Total | 962 | 2.9 | 2.5 | 2.7 | 3.1 | 3.3 | 3.5 | 3.6 | 3.6 | 3.5 | 3.3 | 3.1 | 2.8 | 2.6 | ||||||||||||||||
| *Rating as of Jan. 5, 2024. Coverage calculated as reported EBITDA over reported interest expense, without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. n.m. = not meaningful due to small sample size. Source: S&P Global Ratings. | ||||||||||||||||||||||||||||||
Table 1c
| Median EBITDA interest coverage by company size | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| reported last-12-months period (x) | ||||||||||||||||||||||||||||||
| Entity size (measured by EBITDA) | Entity Count | Dec. 31, 2019 | Dec. 31, 2020 | Mar. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | ||||||||||||||||
| <50 | 103 | 1.5 | 1.4 | 1.6 | 1.7 | 1.7 | 1.4 | 1.1 | 1.2 | 1.1 | 0.9 | 0.7 | 0.6 | 0.6 | ||||||||||||||||
| 50-100 | 115 | 1.8 | 1.9 | 2.0 | 2.1 | 2.3 | 2.0 | 2.0 | 2.0 | 1.9 | 1.8 | 1.7 | 1.5 | 1.5 | ||||||||||||||||
| 100-200 | 192 | 2.4 | 2.3 | 2.4 | 2.6 | 2.4 | 2.5 | 2.8 | 2.7 | 2.9 | 2.6 | 2.4 | 2.3 | 2.1 | ||||||||||||||||
| 200-300 | 127 | 2.8 | 2.8 | 3.0 | 3.5 | 3.5 | 3.5 | 3.5 | 3.4 | 3.4 | 3.2 | 3.2 | 3.0 | 2.7 | ||||||||||||||||
| 300-500 | 146 | 3.4 | 3.2 | 3.5 | 3.9 | 4.1 | 4.5 | 4.5 | 4.8 | 4.8 | 4.6 | 4.0 | 3.8 | 3.7 | ||||||||||||||||
| 500-1000 | 140 | 4.5 | 3.2 | 3.3 | 4.6 | 5.4 | 6.1 | 6.9 | 6.4 | 5.9 | 5.7 | 5.3 | 5.1 | 4.6 | ||||||||||||||||
| >1000 | 139 | 5.1 | 3.8 | 4.1 | 5.2 | 5.4 | 6.3 | 6.9 | 7.7 | 7.3 | 6.5 | 5.9 | 5.5 | 5.4 | ||||||||||||||||
| Total | 962 | 2.9 | 2.5 | 2.7 | 3.1 | 3.3 | 3.5 | 3.6 | 3.6 | 3.5 | 3.3 | 3.1 | 2.8 | 2.6 | ||||||||||||||||
| Coverage calculated as reported EBITDA over reported interest expense, without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||||||||||||||||||||||
Table 2a
| Median FOCF to debt by industry | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported last-12-months period (%) | ||||||||||||||||||||||||||||||
| Industry | Entity count | Dec. 31, 2019 | Dec. 31, 2020 | Mar. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | ||||||||||||||||
| Aerospace/Defense | 22 | 5.2 | 4.2 | 3.6 | 3.2 | 2.4 | 3.4 | 1.5 | 2.6 | 4.6 | 0.9 | (1.5) | (3.8) | (2.5) | ||||||||||||||||
| Auto/Trucks | 28 | 7.0 | 9.1 | 9.2 | 11.8 | 0.1 | (0.2) | (0.9) | 0.9 | 1.1 | 2.4 | 4.0 | 5.2 | 3.8 | ||||||||||||||||
| Business and Consumer Services | 76 | 4.6 | 7.9 | 9.1 | 7.7 | 7.8 | 5.0 | 3.8 | 3.1 | 2.4 | 2.5 | 2.9 | 2.9 | 3.5 | ||||||||||||||||
| Cap Goods/Machine&Equip | 103 | 3.1 | 8.5 | 9.7 | 6.8 | 3.6 | 1.5 | (0.4) | (1.2) | (2.0) | 0.6 | 1.3 | 2.7 | 3.9 | ||||||||||||||||
| Chemicals | 25 | 6.0 | 5.5 | 6.6 | 6.9 | 9.5 | 7.3 | 7.7 | 5.8 | 5.4 | 5.6 | 5.5 | 5.8 | 4.4 | ||||||||||||||||
| Consumer Products | 92 | 7.0 | 9.9 | 8.4 | 6.2 | 4.6 | 3.0 | 0.8 | (0.0) | (0.5) | 0.5 | 2.2 | 5.1 | 7.8 | ||||||||||||||||
| Forest Prod/Bldg Mat/Packaging | 45 | 8.8 | 14.1 | 14.6 | 10.2 | 4.0 | 3.1 | 0.5 | 0.2 | 0.9 | 4.7 | 7.2 | 8.2 | 10.2 | ||||||||||||||||
| Healthcare | 93 | 2.1 | 6.4 | 6.4 | 4.3 | 2.8 | 2.0 | 1.0 | 0.5 | 0.0 | (0.5) | (0.9) | (0.8) | 0.7 | ||||||||||||||||
| Media, Entertainment & Leisure | 132 | 7.1 | 5.4 | 4.9 | 8.2 | 6.4 | 5.7 | 5.4 | 6.2 | 5.4 | 5.5 | 5.3 | 5.6 | 5.3 | ||||||||||||||||
| Mining & Minerals | 44 | 5.1 | 7.9 | 11.8 | 11.3 | 9.3 | 10.4 | 11.7 | 8.6 | 7.7 | 5.6 | 6.8 | 3.9 | 4.5 | ||||||||||||||||
| Oil & Gas | 58 | 0.0 | 1.3 | 4.2 | 6.7 | 6.8 | 12.5 | 13.9 | 27.2 | 35.5 | 41.5 | 35.1 | 27.0 | 19.7 | ||||||||||||||||
| Restaurants/Retailing | 77 | 5.6 | 13.3 | 16.4 | 16.5 | 13.6 | 9.6 | 7.2 | 3.3 | 1.8 | 1.4 | 4.0 | 6.2 | 6.8 | ||||||||||||||||
| Real Estate | 18 | 5.8 | 6.8 | 10.7 | 6.9 | 3.7 | (1.0) | (0.3) | 2.0 | 2.4 | 6.6 | 6.4 | 7.2 | 7.9 | ||||||||||||||||
| Technology | 86 | 4.3 | 7.5 | 9.5 | 9.2 | 10.1 | 10.3 | 8.2 | 6.4 | 5.0 | 3.8 | 3.5 | 3.2 | 3.8 | ||||||||||||||||
| Telecommunications | 40 | 3.3 | 4.5 | 6.6 | 5.5 | 5.5 | 3.9 | 3.0 | 2.1 | 1.1 | 1.1 | 0.0 | (1.3) | (0.0) | ||||||||||||||||
| Transportation | 23 | 0.5 | (8.4) | (2.5) | 1.2 | 0.4 | 2.8 | 3.2 | 1.0 | 1.6 | (2.1) | 0.9 | (2.3) | (2.5) | ||||||||||||||||
| Total | 962 | 4.8 | 7.3 | 7.9 | 7.3 | 5.9 | 5.0 | 3.8 | 2.9 | 2.2 | 2.7 | 3.3 | 4.1 | 4.6 | ||||||||||||||||
| *Rating as of Jan. 5, 2024; n.m. = not meaningful due to small sample size. FOCF: free operating cash flow, as reported and without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings | ||||||||||||||||||||||||||||||
Table 2b
| Median FOCF to debt by issuer credit rating | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported last-12-months period (%) | ||||||||||||||||||||||||||||||
| Issuer credit rating* | Entity count | Dec. 31, 2019 | Dec. 31, 2020 | Mar. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | ||||||||||||||||
| BB+ | 100 | 12.0 | 18.4 | 22.2 | 20.8 | 22.9 | 20.4 | 17.4 | 15.5 | 14.3 | 14.7 | 11.9 | 11.7 | 12.5 | ||||||||||||||||
| BB | 106 | 12.9 | 16.6 | 17.3 | 18.0 | 16.4 | 14.4 | 12.6 | 12.2 | 9.5 | 9.3 | 9.2 | 12.1 | 14.0 | ||||||||||||||||
| BB- | 111 | 8.0 | 10.8 | 15.3 | 13.1 | 13.1 | 11.6 | 10.5 | 11.5 | 8.1 | 9.5 | 12.4 | 14.5 | 14.8 | ||||||||||||||||
| B+ | 128 | 7.0 | 8.3 | 8.1 | 8.6 | 7.4 | 6.0 | 5.1 | 3.7 | 3.7 | 5.6 | 7.0 | 7.8 | 8.8 | ||||||||||||||||
| B | 184 | 3.5 | 7.1 | 7.3 | 6.2 | 3.8 | 4.7 | 3.4 | 2.7 | 2.7 | 3.2 | 3.9 | 3.8 | 4.1 | ||||||||||||||||
| B- | 198 | 1.5 | 4.4 | 4.6 | 2.8 | 1.2 | 0.1 | (0.8) | (1.0) | (1.2) | (0.4) | (0.4) | (0.2) | 0.1 | ||||||||||||||||
| CCC+ | 99 | 0.6 | 1.5 | 2.6 | (0.0) | (1.1) | (2.8) | (4.6) | (5.1) | (4.9) | (4.1) | (3.9) | (3.1) | (1.9) | ||||||||||||||||
| CCC | 26 | 1.5 | 3.7 | 5.3 | 2.7 | 0.5 | (0.1) | (1.4) | (3.8) | (5.6) | (5.1) | (3.7) | (3.5) | (3.5) | ||||||||||||||||
| CCC- | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | ||||||||||||||||
| CC | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | ||||||||||||||||
| Total | 962 | 4.8 | 7.3 | 7.9 | 7.3 | 5.9 | 5.0 | 3.8 | 2.9 | 2.2 | 2.7 | 3.3 | 4.1 | 4.6 | ||||||||||||||||
| Free operating cash flow (FOCF), as reported and without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||||||||||||||||||||||
Table 2c
| Median FOCF to debt by company size | ||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported last-12-months period (%) | ||||||||||||||||||||||||||||||
| Entity size (measured by EBITDA) | Entity count | Dec. 31, 2019 | Dec. 31, 2020 | Mar. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | ||||||||||||||||
| <50 | 103 | 0.7 | 3.4 | 3.0 | 1.3 | (0.5) | (1.6) | (2.4) | (4.9) | (4.8) | (5.0) | (6.6) | (6.4) | (3.5) | ||||||||||||||||
| 50-100 | 115 | 2.7 | 5.3 | 4.9 | 3.2 | 1.6 | 0.2 | (1.5) | (2.3) | (2.4) | (0.5) | 1.2 | (0.2) | 1.0 | ||||||||||||||||
| 100-200 | 192 | 2.4 | 6.0 | 6.3 | 5.5 | 3.5 | 3.2 | 0.8 | 0.2 | 0.0 | (0.1) | 0.6 | 1.7 | 2.5 | ||||||||||||||||
| 200-300 | 127 | 4.8 | 8.3 | 9.3 | 8.9 | 7.5 | 5.6 | 5.4 | 3.9 | 3.2 | 4.0 | 4.5 | 6.5 | 7.0 | ||||||||||||||||
| 300-500 | 146 | 6.7 | 11.0 | 13.2 | 12.3 | 7.7 | 6.9 | 6.0 | 4.9 | 4.4 | 4.4 | 4.6 | 5.7 | 7.0 | ||||||||||||||||
| 500-1000 | 140 | 8.1 | 8.9 | 9.3 | 10.3 | 11.5 | 9.9 | 9.7 | 8.6 | 7.7 | 8.0 | 7.6 | 8.0 | 9.2 | ||||||||||||||||
| >1000 | 139 | 7.4 | 7.9 | 11.3 | 11.5 | 12.8 | 11.0 | 10.8 | 11.2 | 11.5 | 10.8 | 10.5 | 11.1 | 10.3 | ||||||||||||||||
| Total | 962 | 4.8 | 7.3 | 7.9 | 7.3 | 5.9 | 5.0 | 3.8 | 2.9 | 2.2 | 2.7 | 3.3 | 4.1 | 4.6 | ||||||||||||||||
| Free operating cash flow (FOCF), as reported and without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||||||||||||||||||||||
Table 3a
| Median gross leverage by industry | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported last-12-months period (x) | ||||||||||||||||||||||||||||||||||||
| Industry | Entity count | Dec. 31, 2019 | Mar. 31, 2020 | Jun. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2020 | Mar. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | |||||||||||||||||||
| Better: Improved or deleveraged compared to year-end 2022 levels | ||||||||||||||||||||||||||||||||||||
| Aerospace/Defense | 20 | 4.2 | 5.7 | 7.0 | 7.7 | 6.4 | 8.7 | 7.6 | 5.9 | 6.6 | 7.7 | 8.1 | 6.8 | 6.7 | 6.6 | 6.2 | 6.5 | |||||||||||||||||||
| Business and Consumer Services | 81 | 6.4 | 7.1 | 6.8 | 6.7 | 6.3 | 6.7 | 6.8 | 7.2 | 6.4 | 6.7 | 6.5 | 6.5 | 6.6 | 6.5 | 6.5 | 5.9 | |||||||||||||||||||
| Cap Goods/Machine&Equip | 99 | 5.9 | 6.4 | 6.4 | 6.2 | 5.4 | 5.8 | 5.4 | 5.4 | 6.0 | 6.1 | 6.4 | 6.3 | 6.1 | 5.9 | 5.3 | 5.1 | |||||||||||||||||||
| Healthcare | 95 | 7.0 | 7.6 | 8.1 | 7.9 | 8.4 | 8.2 | 6.8 | 7.0 | 7.5 | 8.2 | 8.8 | 9.8 | 9.4 | 8.7 | 8.0 | 7.7 | |||||||||||||||||||
| Technology | 93 | 7.6 | 7.4 | 7.3 | 7.1 | 6.9 | 7.6 | 7.6 | 7.4 | 7.3 | 7.2 | 7.5 | 7.7 | 7.7 | 8.0 | 7.6 | 7.4 | |||||||||||||||||||
| Transportation | 26 | 4.5 | 4.6 | 6.7 | 8.7 | 8.2 | 9.0 | 6.7 | 6.5 | 6.0 | 5.5 | 5.8 | 5.9 | 5.6 | 5.0 | 4.5 | 4.8 | |||||||||||||||||||
| Worse: Leverage increased from year-end 2022 levels | ||||||||||||||||||||||||||||||||||||
| Chemicals | 26 | 5.5 | 5.8 | 6.4 | 6.8 | 5.4 | 4.2 | 4.1 | 3.9 | 4.1 | 4.1 | 4.1 | 4.2 | 4.4 | 5.5 | 6.1 | ||||||||||||||||||||
| Mining & Minerals | 45 | 2.7 | 2.9 | 3.3 | 3.6 | 4.2 | 3.7 | 2.8 | 2.4 | 2.0 | 1.8 | 1.6 | 1.8 | 1.8 | 2.2 | 2.4 | 2.1 | |||||||||||||||||||
| Oil & Gas | 72 | 2.9 | 3.2 | 4.5 | 5.3 | 5.2 | 5.1 | 4.1 | 3.1 | 2.1 | 1.9 | 1.2 | 0.9 | 0.9 | 1.0 | 1.2 | 1.3 | |||||||||||||||||||
| Telecommunications | 42 | 5.2 | 5.1 | 4.8 | 4.9 | 4.7 | 4.6 | 4.7 | 4.4 | 4.8 | 5.2 | 5.3 | 5.2 | 5.0 | 5.0 | 5.2 | 5.3 | |||||||||||||||||||
| Leverage remained relatively flat since year-end 2022 | ||||||||||||||||||||||||||||||||||||
| Auto/Trucks | 29 | 3.8 | 4.3 | 6.8 | 6.0 | 5.6 | 5.1 | 4.0 | 3.9 | 4.0 | 4.1 | 4.3 | 4.0 | 4.0 | 4.1 | 3.7 | 4.1 | |||||||||||||||||||
| Consumer Products | 81 | 6.3 | 6.3 | 6.0 | 6.1 | 6.2 | 5.8 | 5.7 | 6.2 | 6.6 | 6.9 | 6.8 | 6.7 | 5.9 | 6.5 | 6.4 | 5.9 | |||||||||||||||||||
| Forest Prod/Bldg Mat/Packaging | 41 | 5.2 | 5.5 | 4.4 | 4.4 | 4.4 | 4.0 | 4.0 | 3.9 | 4.6 | 4.9 | 4.5 | 4.2 | 3.4 | 4.0 | 4.1 | 3.5 | |||||||||||||||||||
| Media, Entertainment & Leisure | 134 | 4.8 | 6.3 | 8.0 | 8.2 | 8.3 | 9.1 | 6.9 | 6.4 | 6.6 | 5.8 | 5.5 | 5.2 | 5.0 | 5.0 | 5.2 | 5.0 | |||||||||||||||||||
| Restaurants/Retailing | 74 | 4.6 | 4.8 | 6.4 | 5.4 | 5.4 | 4.5 | 3.8 | 3.7 | 3.6 | 3.7 | 3.6 | 3.8 | 3.7 | 3.7 | 3.7 | 3.7 | |||||||||||||||||||
| Real Estate | 33 | 7.2 | 8.8 | 7.9 | 8.3 | 7.8 | 8.1 | 7.4 | 6.6 | 6.8 | 6.3 | 6.3 | 6.5 | 6.5 | 5.8 | 6.7 | 6.5 | |||||||||||||||||||
| Total | 991 | 5.4 | 6.0 | 6.5 | 6.3 | 6.3 | 6.2 | 5.5 | 5.5 | 5.6 | 5.7 | 5.5 | 5.4 | 5.4 | 5.2 | 5.2 | 5.2 | |||||||||||||||||||
| Leverage calculated as reported gross debt over reported EBITDA, without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||||||||||||||||||||||||||||
Table 3b
| Median gross leverage by issuer credit rating | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported last-12-months period (x) | ||||||||||||||||||||||||||||||||||||
| Issuer cedit rating* | Entity count | Dec. 31, 2019 | Mar. 31, 2020 | Jun. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2020 | Mar. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | |||||||||||||||||||
| BB+ | 96 | 3.3 | 3.5 | 4.5 | 3.9 | 3.6 | 3.7 | 3.0 | 2.7 | 3.1 | 2.9 | 2.7 | 2.5 | 2.5 | 2.7 | 2.8 | 2.8 | |||||||||||||||||||
| BB | 108 | 3.5 | 3.9 | 4.0 | 3.9 | 3.7 | 3.7 | 3.2 | 3.1 | 3.1 | 3.1 | 2.9 | 3.4 | 3.3 | 3.5 | 3.3 | 3.3 | |||||||||||||||||||
| BB- | 116 | 4.1 | 4.3 | 4.8 | 4.8 | 4.8 | 4.5 | 3.4 | 3.2 | 3.3 | 3.4 | 3.3 | 3.3 | 3.2 | 3.3 | 3.5 | 3.3 | |||||||||||||||||||
| B+ | 129 | 4.6 | 5.1 | 5.5 | 5.6 | 5.4 | 5.5 | 5.0 | 4.4 | 4.3 | 4.6 | 4.6 | 4.4 | 4.2 | 4.3 | 4.1 | 4.2 | |||||||||||||||||||
| B | 177 | 5.9 | 6.7 | 7.2 | 6.8 | 6.9 | 6.7 | 6.1 | 5.6 | 5.3 | 5.3 | 5.0 | 4.9 | 4.8 | 4.7 | 5.0 | 4.9 | |||||||||||||||||||
| B- | 222 | 7.2 | 7.9 | 7.8 | 7.6 | 8.3 | 8.4 | 8.1 | 8.5 | 9.2 | 9.2 | 8.9 | 8.9 | 8.6 | 8.3 | 8.2 | 8.0 | |||||||||||||||||||
| CCC+ | 105 | 7.9 | 8.3 | 8.5 | 8.3 | 9.6 | 9.5 | 9.9 | 9.2 | 10.8 | 11.4 | 11.2 | 11.0 | 11.1 | 10.2 | 9.9 | 10.3 | |||||||||||||||||||
| CCC | 30 | 8.1 | 9.2 | 9.4 | 9.3 | 8.4 | 8.5 | 7.7 | 8.7 | 9.6 | 9.6 | 13.8 | 16.8 | 16.9 | 16.9 | 14.5 | 15.2 | |||||||||||||||||||
| CCC- | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | |||||||||||||||||||
| CC | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | |||||||||||||||||||
| Total | 991 | 5.4 | 6.0 | 6.5 | 6.3 | 6.3 | 6.2 | 5.5 | 5.5 | 5.6 | 5.7 | 5.5 | 5.4 | 5.4 | 5.2 | 5.2 | 5.2 | |||||||||||||||||||
| *Rating as of Jan. 5, 2024. n.m. -- Not meaningful due to small sample size. Leverage calculated as reported gross debt over reported EBITDA, without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||||||||||||||||||||||||||||
Table 3c
| Median gross leverage by company size | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported last-12-months period (x) | ||||||||||||||||||||||||||||||||||||
| Entity size (measured by EBITDA) | Entity count | Dec. 31, 2019 | Mar. 31, 2020 | Jun. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2020 | Mar. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | |||||||||||||||||||
| <50 | 112 | 7.8 | 8.2 | 9.0 | 9.0 | 9.2 | 9.2 | 8.7 | 8.8 | 10.9 | 13.4 | 14.2 | 15.1 | 18.2 | 18.8 | 19.3 | 18.2 | |||||||||||||||||||
| 50-100 | 121 | 6.7 | 7.6 | 7.4 | 7.1 | 7.2 | 6.9 | 7.4 | 7.3 | 7.5 | 7.7 | 7.8 | 7.5 | 7.4 | 7.3 | 7.0 | 6.9 | |||||||||||||||||||
| 100-200 | 199 | 6.3 | 7.0 | 7.3 | 6.7 | 6.9 | 7.0 | 6.4 | 6.4 | 6.4 | 6.1 | 6.1 | 5.9 | 6.0 | 5.7 | 5.7 | 5.9 | |||||||||||||||||||
| 200-300 | 133 | 5.6 | 6.1 | 6.4 | 6.1 | 5.7 | 5.8 | 5.7 | 5.5 | 5.6 | 5.8 | 5.6 | 5.7 | 5.5 | 5.4 | 5.2 | 5.2 | |||||||||||||||||||
| 300-500 | 141 | 4.9 | 5.3 | 5.6 | 5.3 | 5.4 | 5.3 | 4.7 | 4.5 | 4.5 | 4.4 | 4.3 | 4.3 | 3.9 | 3.9 | 4.0 | 4.2 | |||||||||||||||||||
| 500-1000 | 146 | 3.8 | 4.4 | 5.1 | 5.8 | 5.4 | 5.0 | 4.2 | 3.7 | 3.7 | 3.6 | 3.6 | 3.6 | 3.6 | 3.6 | 3.6 | 3.5 | |||||||||||||||||||
| >1000 | 139 | 3.8 | 4.3 | 5.3 | 5.0 | 4.7 | 4.3 | 3.7 | 3.4 | 3.5 | 3.6 | 3.4 | 3.2 | 3.3 | 3.2 | 3.1 | 3.1 | |||||||||||||||||||
| Total | 991 | 5.4 | 6.0 | 6.5 | 6.3 | 6.3 | 6.2 | 5.5 | 5.5 | 5.6 | 5.7 | 5.5 | 5.4 | 5.4 | 5.2 | 5.2 | 5.2 | |||||||||||||||||||
| Leverage calculated as reported gross debt over reported EBITDA, without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||||||||||||||||||||||||||||
Table 4a
| Median EBITDA growth by industry | ||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported last-12-months period quarter over quarter (%) | ||||||||||||||||||||||||||
| Industry | Entity count | Mar. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | ||||||||||||||
| Aerospace/Defense | 22 | 1.6 | 10.9 | 4.1 | 4.3 | (2.1) | 0.1 | 1.5 | 2.5 | 4.7 | 2.8 | 0.9 | ||||||||||||||
| Auto/Trucks | 28 | 15.3 | 32.7 | 1.7 | 2.6 | (2.5) | 0.3 | 1.2 | 4.3 | (0.6) | 6.1 | 2.1 | ||||||||||||||
| Business and Consumer Services | 76 | 3.0 | 7.0 | 2.5 | 2.5 | 3.1 | 3.3 | 4.0 | 2.6 | 1.6 | 1.9 | 2.0 | ||||||||||||||
| Cap Goods/Machine&Equip | 103 | 3.9 | 5.5 | 1.9 | 0.8 | 3.4 | 3.4 | 5.6 | 5.2 | 4.0 | 3.1 | 2.5 | ||||||||||||||
| Chemicals | 25 | 5.8 | 13.1 | 9.7 | 4.9 | 5.5 | 4.3 | (1.3) | (2.1) | (6.5) | (13.0) | (1.6) | ||||||||||||||
| Consumer Products | 92 | 8.6 | 9.2 | 2.4 | (0.9) | (0.8) | 1.7 | (1.0) | 0.5 | (1.4) | (0.6) | 1.4 | ||||||||||||||
| Forest Prod/Bldg Mat/Packaging | 45 | 7.8 | 11.2 | 1.0 | 1.2 | 7.4 | 6.1 | 3.9 | 0.8 | (1.0) | (0.8) | 0.1 | ||||||||||||||
| Healthcare | 93 | 9.1 | 9.1 | 3.3 | 0.9 | 0.1 | (2.1) | (1.8) | (0.2) | 0.6 | 5.3 | 3.4 | ||||||||||||||
| Media, Entertainment & Leisure | 132 | 2.4 | 25.8 | 9.1 | 5.4 | 5.0 | 1.7 | 1.4 | 2.8 | 0.1 | (0.1) | 0.0 | ||||||||||||||
| Mining & Minerals | 44 | 7.0 | 20.6 | 15.4 | 9.5 | 10.1 | 6.1 | (0.9) | (9.0) | (3.3) | (5.9) | (1.1) | ||||||||||||||
| Oil & Gas | 58 | 6.1 | 38.0 | 27.6 | 36.3 | 19.0 | 27.8 | 17.8 | 4.9 | 2.4 | (10.3) | (4.6) | ||||||||||||||
| Restaurants/Retailing | 77 | 9.8 | 30.2 | 2.2 | 5.4 | 1.6 | (0.6) | (0.9) | 0.0 | (0.3) | (0.1) | (1.7) | ||||||||||||||
| Real Estate | 18 | 2.5 | 6.8 | 4.6 | 5.2 | 2.7 | 3.6 | 5.3 | 3.4 | (0.5) | (1.5) | (0.6) | ||||||||||||||
| Technology | 86 | 6.7 | 5.2 | 4.8 | 3.4 | 2.2 | 0.2 | 1.2 | 1.3 | 2.7 | 2.6 | 3.2 | ||||||||||||||
| Telecommunications | 40 | 2.0 | 2.7 | 1.2 | 0.0 | (1.2) | (2.7) | (0.9) | (0.4) | (1.9) | (0.2) | 0.5 | ||||||||||||||
| Transportation | 23 | (2.9) | 30.8 | 18.7 | 21.0 | 2.7 | 3.4 | 5.5 | 3.8 | 5.6 | 6.2 | (2.8) | ||||||||||||||
| Total | 962 | 5.3 | 11.6 | 4.5 | 3.4 | 2.8 | 2.0 | 1.7 | 1.3 | 0.7 | 0.5 | 0.8 | ||||||||||||||
| Reported EBITDA without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||||||||||||||||||
Table 4b
| Median EBITDA growth by issuer credit rating | ||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported last-12-months period quarter over quarter (%) | ||||||||||||||||||||||||||
| Issuer Credit Rating* | Entity Count | Mar. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | ||||||||||||||
| BB+ | 100 | 5.1 | 11.3 | 4.7 | 4.4 | 4.9 | 2.6 | 2.0 | 0.4 | (1.3) | (0.3) | (0.3) | ||||||||||||||
| BB | 106 | 6.2 | 11.4 | 6.0 | 2.3 | 1.9 | 2.2 | 1.1 | 1.1 | (0.9) | (0.6) | 0.7 | ||||||||||||||
| BB- | 111 | 5.6 | 20.9 | 7.4 | 6.7 | 5.3 | 2.1 | 3.2 | 2.3 | 1.0 | (0.5) | 1.3 | ||||||||||||||
| B+ | 128 | 4.6 | 10.4 | 6.4 | 5.3 | 2.7 | 1.7 | 1.1 | 2.2 | 1.4 | (0.4) | (1.6) | ||||||||||||||
| B | 184 | 6.4 | 14.6 | 5.9 | 4.3 | 4.0 | 4.8 | 3.1 | 2.2 | 0.9 | 0.1 | 0.5 | ||||||||||||||
| B- | 198 | 5.2 | 7.1 | 1.2 | 0.0 | 2.5 | 0.0 | 2.4 | 2.1 | 1.6 | 3.7 | 3.8 | ||||||||||||||
| CCC+ | 99 | 3.7 | 7.4 | 1.9 | (0.9) | (2.7) | (3.1) | (2.9) | (2.7) | 3.5 | 0.8 | (0.1) | ||||||||||||||
| CCC | 26 | 3.8 | 2.9 | (0.2) | (0.5) | (6.8) | (5.6) | (8.9) | (5.3) | (4.5) | (0.8) | (3.2) | ||||||||||||||
| CCC- | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | ||||||||||||||
| CC | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | ||||||||||||||
| Total | 962 | 5.3 | 11.6 | 4.5 | 3.4 | 2.8 | 2.0 | 1.7 | 1.3 | 0.7 | 0.5 | 0.8 | ||||||||||||||
| *Rating as of Jan. 5, 2024. n.m. -- Not meaningful due to small sample size. Reported EBITDA without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||||||||||||||||||
Table 4c
| Median EBITDA growth by company size | ||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported last-12-months period quarter over quarter (%) | ||||||||||||||||||||||||||
| Entity size (measured by EBITDA) | Entity count | Mar. 31, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | Mar. 31, 2022 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | ||||||||||||||
| <50 | 103 | 5.6 | 12.5 | 1.5 | (2.9) | (4.8) | (4.8) | (8.4) | (13.6) | (4.1) | (0.7) | 1.9 | ||||||||||||||
| 50-100 | 115 | 7.9 | 7.4 | 3.2 | 0.8 | 0.3 | 0.5 | 1.0 | 0.5 | 1.4 | 3.1 | 0.5 | ||||||||||||||
| 100-200 | 192 | 4.0 | 11.5 | 3.3 | 1.8 | 2.5 | 0.2 | 1.7 | 1.9 | 0.6 | 0.8 | 2.3 | ||||||||||||||
| 200-300 | 127 | 5.7 | 12.7 | 3.1 | 2.7 | 2.7 | 2.0 | 1.2 | 1.5 | 0.4 | 1.3 | 1.0 | ||||||||||||||
| 300-500 | 146 | 3.7 | 10.4 | 3.5 | 3.1 | 2.9 | 2.6 | 2.0 | 2.2 | 1.6 | 0.6 | 1.1 | ||||||||||||||
| 500-1000 | 140 | 6.2 | 13.7 | 8.3 | 6.6 | 5.1 | 3.4 | 2.4 | 1.3 | 1.7 | 0.1 | 0.6 | ||||||||||||||
| >1000 | 139 | 6.3 | 15.0 | 8.1 | 7.6 | 5.9 | 5.9 | 4.4 | 2.3 | (0.6) | (0.4) | (0.4) | ||||||||||||||
| Total | 962 | 5.3 | 11.6 | 4.5 | 3.4 | 2.8 | 2.0 | 1.7 | 1.3 | 0.7 | 0.5 | 0.8 | ||||||||||||||
| Reported EBITDA without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||||||||||||||||||
Table 5a
| Median capex growth by industry | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported last-12-months period quarter over quarter (%) | ||||||||||||||||
| Industry | Entity count | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | |||||||||
| Aerospace/Defense | 24 | 1.3 | 9.2 | (1.4) | (2.9) | 6.3 | 0.1 | |||||||||
| Auto/Trucks | 32 | 3.7 | (2.6) | 0.8 | (1.9) | 1.0 | 4.1 | |||||||||
| Business and Consumer Services | 90 | 7.3 | 6.5 | 4.1 | 2.8 | 1.0 | (1.0) | |||||||||
| Cap Goods/Machine&Equip | 111 | 1.9 | 3.3 | 2.4 | 3.1 | 3.0 | 2.1 | |||||||||
| Chemicals | 27 | 5.4 | 6.5 | (0.1) | 3.5 | 2.4 | 1.1 | |||||||||
| Consumer Products | 98 | 5.7 | 2.1 | 1.1 | (0.6) | 0.8 | (1.2) | |||||||||
| Forest Prod/Bldg Mat/Packaging | 52 | 4.5 | 1.1 | 6.5 | 5.1 | 3.1 | 2.5 | |||||||||
| Healthcare | 105 | 2.9 | 4.6 | 3.4 | 0.0 | 0.0 | (2.6) | |||||||||
| Media, Entertainment & Leisure | 148 | 8.9 | 7.9 | 2.8 | 4.6 | 2.0 | 0.3 | |||||||||
| Mining & Minerals | 44 | 8.1 | 8.7 | 8.4 | 9.0 | 7.4 | 3.9 | |||||||||
| Oil & Gas | 70 | 13.9 | 12.2 | 11.3 | 8.1 | 5.8 | (0.4) | |||||||||
| Restaurants/Retailing | 79 | 5.7 | 7.3 | 6.7 | 2.7 | 2.0 | 0.0 | |||||||||
| Real Estate | 26 | 4.3 | 4.9 | 2.5 | 1.4 | (1.6) | 10.6 | |||||||||
| Technology | 98 | 3.2 | 4.3 | 3.3 | 0.6 | 2.9 | (0.1) | |||||||||
| Telecommunications | 42 | 5.3 | 3.6 | 3.9 | 2.6 | (0.4) | (2.0) | |||||||||
| Transportation | 29 | 5.8 | 5.8 | 8.1 | 10.4 | 4.6 | 1.0 | |||||||||
| Total | 1,075 | 5.4 | 5.9 | 4.2 | 2.7 | 2.4 | 0.4 | |||||||||
| Reported capital expenditure (capex) without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||||||||
Table 5b
| Median capex growth by issuer credit rating | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported last-12-months period quarter over quarter (%) | ||||||||||||||||
| Issuer credit rating* | Entity count | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | |||||||||
| BB+ | 103 | 6.2 | 6.8 | 7.6 | 5.7 | 3.3 | 1.9 | |||||||||
| BB | 115 | 4.3 | 4.0 | 4.3 | 3.8 | 2.0 | 0.7 | |||||||||
| BB- | 121 | 7.1 | 7.9 | 4.2 | 5.7 | 3.7 | 2.1 | |||||||||
| B+ | 145 | 6.0 | 6.5 | 4.6 | 2.7 | 3.8 | 1.6 | |||||||||
| B | 208 | 6.1 | 6.6 | 5.4 | 3.6 | 3.5 | 0.3 | |||||||||
| B- | 232 | 3.4 | 4.7 | 3.6 | 1.6 | 1.7 | (1.1) | |||||||||
| CCC+ | 109 | 4.2 | (1.2) | (1.7) | (1.2) | (1.6) | (0.1) | |||||||||
| CCC | 30 | 7.4 | 8.6 | 4.5 | 1.0 | (3.5) | (5.4) | |||||||||
| CCC- | 10 | 13.3 | 3.7 | (0.5) | (5.7) | (8.3) | (7.8) | |||||||||
| CC | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | |||||||||
| Total | 1,075 | 5.4 | 5.9 | 4.2 | 2.7 | 2.4 | 0.4 | |||||||||
| *Rating as of Jan. 5, 2024. n.m. -- Not meaningful due to small sample size. Reported capital expenditure (capex) without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||||||||
Table 5c
| Median EBITDA growth by company size | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported last-12-months period quarter over quarter (%) | ||||||||||||||||
| Entity size (measured by EBITDA) | Entity count | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | |||||||||
| <50 | 132 | 4.4 | 3.4 | 3.2 | (1.3) | (1.4) | (4.0) | |||||||||
| 50-100 | 136 | 5.8 | 4.0 | 3.1 | 0.6 | 1.6 | (0.8) | |||||||||
| 100-200 | 217 | 3.8 | 4.7 | 3.0 | 1.4 | 3.0 | (0.9) | |||||||||
| 200-300 | 136 | 5.5 | 3.2 | 3.6 | 2.2 | 2.2 | 1.8 | |||||||||
| 300-500 | 160 | 5.8 | 7.0 | 4.4 | 4.4 | 3.0 | 1.5 | |||||||||
| 500-1000 | 150 | 5.8 | 6.9 | 4.3 | 3.6 | 2.4 | 0.8 | |||||||||
| >1000 | 144 | 6.1 | 7.9 | 7.9 | 6.6 | 4.5 | 1.7 | |||||||||
| Total | 1075 | 5.4 | 5.9 | 4.2 | 2.7 | 2.4 | 0.4 | |||||||||
| Reported capital expenditure (capex) without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||||||||
Table 6a
| Median working capital change as a percentage of revenue by industry | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported last-12-month period quarter over quarter (%) | ||||||||||||||||
| Industry | Entity count | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | |||||||||
| Aerospace/Defense | 24 | (0.9) | (2.3) | (3.3) | (3.5) | (3.2) | (1.6) | |||||||||
| Auto/Trucks | 31 | (2.8) | (0.9) | (0.8) | 0.4 | (0.3) | (0.1) | |||||||||
| Business and Consumer Services | 86 | (2.5) | (2.1) | (1.8) | (1.1) | (0.7) | (0.5) | |||||||||
| Cap Goods/Machine&Equip | 109 | (3.8) | (3.9) | (3.3) | (1.9) | (1.2) | (0.3) | |||||||||
| Chemicals | 27 | (3.7) | (3.9) | (2.3) | (1.5) | 0.4 | 0.8 | |||||||||
| Consumer Products | 98 | (5.4) | (4.4) | (4.2) | (2.0) | (0.2) | 1.6 | |||||||||
| Forest Prod/Bldg Mat/Packaging | 51 | (4.7) | (4.1) | (2.7) | (1.1) | 0.3 | 1.5 | |||||||||
| Healthcare | 105 | (2.5) | (3.3) | (2.2) | (2.2) | (1.8) | (1.0) | |||||||||
| Media, Entertainment & Leisure | 145 | (1.5) | (1.5) | (1.2) | (0.8) | (0.5) | (0.4) | |||||||||
| Mining & Minerals | 45 | (4.1) | (2.7) | (2.7) | (1.8) | (1.8) | (1.8) | |||||||||
| Oil & Gas | 70 | (2.6) | (1.2) | (0.4) | 0.2 | 1.1 | (0.9) | |||||||||
| Restaurants/Retailing | 83 | (1.8) | (2.2) | (1.9) | (1.3) | (0.3) | 0.0 | |||||||||
| Real Estate | 28 | (6.6) | (4.7) | (5.8) | (2.9) | 0.5 | 0.4 | |||||||||
| Technology | 97 | (2.3) | (2.7) | (2.5) | (1.7) | (1.5) | (0.9) | |||||||||
| Telecommunications | 41 | (2.9) | (1.6) | (1.5) | (1.4) | (1.8) | (1.8) | |||||||||
| Transportation | 27 | (0.8) | (0.8) | (0.2) | 0.2 | 0.2 | 0.2 | |||||||||
| Total | 1,067 | (2.9) | (2.7) | (2.1) | (1.3) | (0.6) | (0.3) | |||||||||
| Reported working capital change and revenue without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||||||||
Table 6b
| Median working capital change as a percentage of revenue by issuer credit rating | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported last-12-months period quarter over quarter (%) | ||||||||||||||||
| Issuer credit rating* | Entity count | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | |||||||||
| BB+ | 104 | (2.0) | (1.7) | (1.8) | (1.4) | (1.1) | (1.1) | |||||||||
| BB | 119 | (2.6) | (2.9) | (3.1) | (1.9) | (1.1) | (0.6) | |||||||||
| BB- | 124 | (2.7) | (2.6) | (2.2) | (1.0) | (0.6) | (0.4) | |||||||||
| B+ | 146 | (3.1) | (2.5) | (1.8) | (1.3) | (0.2) | (0.1) | |||||||||
| B | 208 | (3.3) | (3.0) | (2.4) | (0.9) | (0.6) | (0.3) | |||||||||
| B- | 220 | (2.9) | (2.7) | (1.9) | (1.1) | (0.9) | (0.1) | |||||||||
| CCC+ | 107 | (3.0) | (3.0) | (1.9) | (1.1) | (0.1) | 0.1 | |||||||||
| CCC | 28 | (1.3) | (2.0) | (1.8) | (0.6) | 1.6 | 2.8 | |||||||||
| CCC- | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | |||||||||
| CC | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | n.m. | |||||||||
| Total | 1,067 | (2.9) | (2.7) | (2.1) | (1.3) | (0.6) | (0.3) | |||||||||
| *Rating as of Jan. 5, 2024. n.m. -- Not meaningful due to small sample size. Reported working capital change and revenue without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||||||||
Table 6c
| Median working capital change as a percentage of revenue by company size | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reported last-12-months period quarter over quarter (%) | ||||||||||||||||
| Entity size (measured by EBITDA) | Entity count | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Mar. 31, 2023 | Jun. 30, 2023 | Sep. 30, 2023 | |||||||||
| <50 | 129 | (2.9) | (2.2) | (1.0) | (0.6) | 0.3 | 1.5 | |||||||||
| 50-100 | 131 | (3.4) | (3.5) | (2.0) | (1.0) | (0.4) | 0.3 | |||||||||
| 100-200 | 213 | (3.0) | (3.3) | (3.3) | (1.9) | (1.1) | (0.6) | |||||||||
| 200-300 | 137 | (3.2) | (2.7) | (2.2) | (1.5) | (1.1) | (0.1) | |||||||||
| 300-500 | 161 | (3.2) | (3.7) | (2.8) | (1.5) | (1.1) | (0.7) | |||||||||
| 500-1000 | 152 | (2.7) | (2.1) | (1.8) | (1.1) | (0.6) | (0.5) | |||||||||
| >1000 | 144 | (1.8) | (1.4) | (0.9) | (0.6) | (0.4) | (0.8) | |||||||||
| Total | 1067 | (2.9) | (2.7) | (2.1) | (1.3) | (0.6) | (0.3) | |||||||||
| Reported working capital change and revenue without adjustment by S&P Global Ratings. The sample in this study is rebalanced each quarter following selection criteria, as detailed in the "The Data Used in This Report" section. Source: S&P Global Ratings. | ||||||||||||||||
Data Used In This Report
Our large data set contains financial data for all speculative-grade corporate entities rated in the U.S. and Canada, covering both public and private companies, where we have received and spread their financial statement for the latest quarter. Each quarter, we construct a sample pool from the large set where we have quarter-end reported financials for every quarter since Dec 31, 2019. This sample set varies somewhat quarter by quarter as it excludes entities rated 'S.D.' (selective default) or no longer outstanding as of each quarter-end (due to default or being withdrawn) but includes new issuers where we have their historical financials. The sample set is generally smaller than the large set but is nonetheless a representative sample of the North American speculate-grade universe.
The sample in this report consists of 962 companies, as some private companies have yet to report third-quarter 2023 financials before our extraction date of January 5, 2024. These companies will re-enter the sample once we have all the financials and when we build the next sample.
Related Research
- U.S. Leveraged Finance Q3 2023 Update: The Lowdown On High Interest Rates, Nov. 9, 2023
- U.S. Leveraged Finance Q2 2023 Update: Disparities Emerge By Sector, Rating, Company Size, And Debt Cushion, Aug. 3, 2023
- U.S. Leveraged Finance Q1 2023 Update: Ch-Ch-Ch-Changes -- Material Shifts In Key Credit Stats Drove Downgrades To 'B-' And 'CCC', And Upgrades To 'B-', May 4, 2023
- Recovering From COVID-19: Why The Timing Of Bankruptcy And Emergence Matters For Debt Recovery, Feb. 7, 2022
This report does not constitute a rating action.
| Primary Credit Analysts: | Hanna Zhang, New York + 1 (212) 438 8288; Hanna.Zhang@spglobal.com |
| Minesh Patel, CFA, New York + 1 (212) 438 6410; minesh.patel@spglobal.com | |
| Omkar V Athalekar, Toronto +1 6474803504; omkar.athalekar@spglobal.com | |
| Secondary Contact: | Steve H Wilkinson, CFA, New York + 1 (212) 438 5093; steve.wilkinson@spglobal.com |
| Analytical Manager: | Ramki Muthukrishnan, New York + 1 (212) 438 1384; ramki.muthukrishnan@spglobal.com |
| Research Contributor: | Maulik Shah, Mumbai, + (91)2240405991; maulik.shah@spglobal.com |
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