Key Takeaways
- Our dataset consists of roughly 910 public and private speculative-grade companies in the U.S. and Canada, with about 35% backed by one or more private-equity sponsors. A quick comparison of the two groups confirms our expectation that sponsor-backed companies are smaller in size and have lower credit ratings.
- Sponsor-backed companies have outperformed non-sponsored ones in profit growth since 2023, helping to narrow the leverage gap. However, not all strong earnings momentum translated into higher free operating cash flow (FOCF), with twice as many sponsor-owned companies reporting negative FOCF than non-sponsored ones in the 12 months ended June 30, 2024.
- In the past 12 months, downgrades have outnumbered upgrades for PE-owned companies but not by a large margin. In contrast, rating trends have turned generally positive for companies not backed by sponsors for the same period.
- In the 12 months ended Aug. 31, 2024, PE-owned companies had a disproportionately large share of defaults led by distressed debt exchanges, including liability management transactions, outnumbering those by non-sponsored companies by 1.5 to 1--an observation that we believe is consistent with the credit ratings.
The third quarter kicked off a steady stream of sponsor (and non-sponsor) activity, led by dividend recapitalizations and leveraged buyouts. While new supply of loans has picked up, overall deal flow, including mergers and acquisitions (M&A), remains below the levels the market once enjoyed. The onset of interest rate reductions (even if the timing and magnitude of cuts remain uncertain) should help private equity buyers and sellers close the valuation gap, leading to some normalization in M&A deal-making conditions.
In this quarterly update, we analyze companies owned by private equity (PE) firms, which have generally experienced positive earnings trends. In the 12 months through the second quarter of 2024, 61% of sponsor-backed companies expanded their reported EBITDA compared with 50% of non-PE owned companies. PE-owned companies have taken initiatives to improve margins and reduce capital expenditures (capex), ahead of their counterparties and on a larger scale, contributing to their outperformance. With the rate cut for the entire market last month and the promise of more to come, we can expect to see it flow through financial results. This could potentially benefit sponsor-owned companies more due to their capital structure being heavily weighted toward floating rates.
Sponsor-owned firms continue to face uncertainty, particularly in sectors like health care providers and services, in which they have a significant presence, along with constrained free operating cash flow (FOCF)--factors that have contributed to numerous downgrades. Furthermore, over the past 12 months, sponsor-backed companies had a disproportionately large share of defaults, once again driven by health care providers, a trend we believe aligns with our credit ratings.
Click here to access many of the charts and tables in an interactive format.
PE vs. Non-PE: Comparing Credit Profile And Performance Trends
Our dataset consists of roughly 910 public and private companies in the U.S. and Canada, with about 35% backed by one or more private-equity sponsors (see charts 1 and 2). A quick comparison of the two groups confirms our expectation that sponsor-backed companies are smaller in size and have lower credit ratings.
Specifically, the sponsor-backed group has a median profile characterized by a 'B-' rating and EBITDA of $167 million, indicating higher vulnerabilities than the higher EBITDA ($395 million) and stronger credit rating (BB-) of a typical non-sponsor-backed company.
Sponsored companies dominate the segment of companies with EBITDA of $100 million or below, representing 56% of that cohort, but have a limited presence among those exceeding $300 million. The significant disparity in credit ratings is also evident, with non-sponsored companies showing a greater prevalence of 'BB' category ratings (BB+/BB/BB-), accounting for more than half of the group, compared with less than 5% among sponsored companies.
Chart 1
Chart 2
Sponsor-backed companies outperformed in profit expansion
The latest credit trends continue to support a soft landing narrative as companies collectively deliver sustained profit growth.
Sponsor-backed companies have outperformed non-sponsored ones in EBITDA expansion. In the 12 months leading up to the second quarter of 2024, 61% of sponsor-backed companies increased their last-12-month (LTM) EBITDA (see chart 3), marking three consecutive years of expansion. Moderating input costs and supply chain disruptions have, among other things, supported earnings growth.
At the same time, profit growth among non-sponsored companies was lackluster in comparison, with an almost even split between expansion and contraction during the same period. This is below the long-term average of 58% since 2020, which peaked in June 2021 when 83% of non-sponsored companies reported positive quarter-over-quarter LTM growth as they bounced back from the COVID-19 pandemic disruptions.
Despite steady earnings growth, much of this benefit was offset by elevated interest expenses, given the high portion of loan issuers in the sponsor-owned companies. As a result, EBITDA interest coverage remained largely unchanged in both sponsored and non-sponsored groups, bottoming out from earlier deterioration. The ongoing rate cuts, as they gradually take effect, will help to halt the deterioration. In addition, recent stabilization was also aided by meaningful credit spread tightening from the refinancing and repricing boom in 2024, which benefited the heavily 'BB' rated- non-sponsored segment more than the lower-rated sponsor-backed companies.
A persistent risk remains that interest coverage is still a major issue for 'B-' rated PE-owned companies, with coverage at just 1.2x in the second quarter of 2024. Even as interest rates have begun to decline, slowing economic growth in 2025 remains a challenge.
Chart 3
Stronger growth has helped to close the leverage gap
Despite the resurgence of opportunistic dealmaking, aggregate leverage levels have remained stable for both groups (see chart 4).
For 'B-' rated companies, the positive growth momentum and the efforts to contain costs, led by PE-owned companies, have helped close the leverage gap. Since the end of 2022, the cluster of 'B-' rated PE-owned companies has reduced leverage by nearly two turns.
Chart 4
However, twice as many sponsor-backed companies reported negative FOCF
The positive earnings momentum for sponsor-backed companies did not translate into improved FOCF. The entities still face high cash burn despite cost-containment measures. In fact, 47% of the segment reported negative FOCF for the 12 months through the second quarter after rising by 7% in the first half of 2024, suggesting that free cash flows continue to be a pressure point (see chart 5). The deterioration in some instances was attributable to volatile working capital swings and restructuring transaction-related expenses, as well as the discretionary nature of companies' service and product offerings that have pressured top-line sales.
PE-owned companies have not been able to exit and have looked at other ways to return capital to their limited partners, such as issuing dividends funded by debt. Still, companies remain cautious about large-scale investments, likely due to the lingering economic growth uncertainty. However, with the rate cuts and promise of more to come, the M&A market may pick up with improving business confidence, and postponed business sales and investments will likely be restarted.
For companies not backed by private equity, the portion reporting negative FOCF has fallen to 22% during the same period, thanks partly to their lower debt capitalization, decreasing inflationary pressures, and good inventory management.
This leads to a substantial gap in the FOCF-to-debt ratios between the two groups. Over the past three years, sponsored companies have had a median FOCF-to-debt ratio averaging 1.1%, only a fraction of the much healthier 8.8% seen in companies not controlled by private equity.
Chart 5
Industry Trends We Are Seeing
Consumer products. This group has seen slowing median EBITDA growth due to the depletion of pandemic-era excess savings and lower discretionary spending for lower-income consumers. Despite this, the median FOCF-to-debt ratio has improved over the past several quarters, supported by deleveraging efforts, reduced capital intensity, and leaner inventory levels as supply chains normalize.
Technology. Median FOCF to debt deteriorated over time for lower-rated technology firms, especially those owned by a sponsor. While the higher interest rate environment was a key factor driving this decline as EBITDA interest coverage deteriorated, higher working capital outflows driven by a pay down of payables and accrued liabilities along with reductions in deferred revenue balances (indicating a slowdown in new bookings) drove cash flows lower.
Real estate. The dip in median FOCF to debt for real estate is largely driven by homebuilders spending on land and development, thus building inventory levels to meet resilient demand for homes amid an undersupply in the resale market.
Health care. The speculative-grade universe within the health care industry is dominated by health care service providers. This sub-sector, especially the labor-intensive, lower-margin, and predominantly sponsor-owned service providers at the lower end of the ratings scale, continues to be vulnerable to negative rating actions. As a result, this segment has seen multiple downgrades and defaults over the past several quarters. While the lower margins are partly driven by labor inflation, the higher leverage profile has crushed free cash flow generation due to the higher interest rate environment; free cash flow deficits were further exacerbated by the disruptions from the No Surprise Act (especially, the delays in payments from insurance companies to service providers due to the arbitration process established to protect patients from surprise billing) and Medicaid redeterminations.
Diverging Rating Trends
In the past 12 months, downgrades have outnumbered upgrades for PE-owned companies but not by a large margin. In contrast, rating trends have turned generally positive for companies not backed by sponsors (see chart 6).
PE-owned companies accounted for 13 of the 18 downgrades to 'CCC+' from 'B-', with cash flow deficits being a key factor in most cases. This is not surprising given that PE-owned companies constitute the bulk of the 'B-' level. One typical example is laundry service provider Spin HoldCo Inc., which struggled to generate free cash flow due to its predominantly floating-rate debt and substantial ongoing capital investments in machinery and equipment. We lowered the rating, anticipating an increasing likelihood of a distressed transaction because we expect its liquidity position to deteriorate over the upcoming quarters. Similarly, Guitar Center Inc.'s declining revenue and shrinking margins led to consistently negative free operating cash flow. We downgraded the company to 'CCC+' because we expected its performance to remain challenged in the near term.
Health care stands out as the largest contributor to downgrades, accounting for 27% of downgrades among sponsored companies--double the 13% seen in the next largest sector, restaurant/retailing. Downgrades in health care span staffing companies, outpatient rehabilitation, dental, and eye care service providers. We expect such rating deterioration in health care to slow in 2025 as demand normalizes and inflationary pressures moderate.
Conversely, rating trends among non-PE-owned companies have been generally positive, supported by a broader range of factors, including debt reduction post-asset sale, resolution of operation disruptions, and reduced advertising and overhead spending. Upgrades were led by moves to 'BB-' from 'B+' and to 'BB' from 'BB-'. In the first cluster, aerospace components manufacturer TransDigm Inc., the second-most widely held obligor among U.S. broadly syndicated collateralized loan obligations (BSL CLOs), benefited from strong aftermarket demand, increasing aircraft build rates, and robust defense spending. In the latter cluster, we upgraded concrete and cement mixes manufacturer Quikrete Holdings Inc., the 43rd most widely held, following its successful integration of water and drainage pipe manufacturer Forterra Inc.
Chart 6
Defaults by sponsored companies outnumbered those by non-sponsored companies by 1.5 to 1
PE-owned companies had a disproportionately large share of defaults in the 12 months ended Aug. 31, 2024 (see table 1), an observation that we believe is consistent with the credit ratings.
When facing financial difficulties, these companies have increasingly resorted to distressed debt exchanges to bridge liquidity gaps and buy time to turn around their operations. In fact, nearly 70% of default events among sponsor-backed companies involved distressed exchanges. The share is lower among non PE-owned companies (58%) but still far exceeds the number of bankruptcy filings. Eight companies undertook several such transactions. For example, Teleset Canada repurchased debt below par twice in 2023; both instances were viewed as distressed exchanges. Another high-profile example is AMC Entertainment Holdings Inc., which executed a series of debt-for-equity swaps this year.
Some of these transactions employed so-called liability management transaction (LMT) tactics, such as collateral transfer and double dip. Existing lenders were often offered the opportunity to participate with new capital and exchange their holdings under different terms, resulting in a wide disparity in returns and recoveries. Although the specific mechanics vary from transaction to transaction, these tactics inevitably harm lenders by diminishing recovery prospects and especially for those who choose not to exchange in a future default. This risk is significant given that the post-exchange ratings in 86% of cases remain 'CCC+' or lower, indicating we expect a subsequent default--whether through a distressed debt exchange or a more comprehensive restructuring like Chapter 11--is more likely than not. We recently launched a new research series focusing on LMTs. In the first two installments, we featured Magenta Buyer LLC (formerly known as McAfee) and Del Monte Foods Inc, providing an overview of the exchange and its impact on liquidity and recovery prospects. (See Related Research at the end of the report for links to the Debt Restructuring Snapshot series.)
Table 1
| Default events between September 2023 and August 2024 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Sponsored | % of sponsored | Not sponsored | % of non-sponsored | |||||||
| Bankruptcy | 8 | 17% | 11 | 33% | ||||||
| Distressed exchange | 33 | 69% | 19 | 58% | ||||||
| Missed interest payments | 2 | 4% | 2 | 6% | ||||||
| Missed payments | 5 | 10% | 1 | 3% | ||||||
| Total | 48 | 33 | ||||||||
| Source: S&P Global Ratings. | ||||||||||
With less drag from LMTs, recovery prospects of first-lien new issues modestly rebounded from the bottom
The average recovery estimate for new issues saw a modest improvement to 64% in the third quarter of 2024, driven by a significant decrease in bottom-tier issuances (recovery ratings of '5' and '6', which indicate less than 30% recovery in the event of a payment default). Starting in the third quarter, we excluded first-lien new issuance resulted from restructuring debt exchanges to avoid bias since we may only rate a certain section of the exchanged first lien, preventing us from providing a holistic view of the overall first-lien recovery. This approach led to fewer bottom-tier recovery estimates, which are often associated with second-out or third-out loans, placing them in a junior collateral position.
New issues with '3' recovery ratings (which implies 50%-70% recovery in the event of a payment default) were 66% compared with 58% during the last quarter. This increase corresponded to a commensurate decrease in lower recovery assessments of '4' (30%-50%), '5' (10%-30%), and '6' (less than 10%), which combined accounted for a 3% share compared with 12% in the previous quarter (see charts 7 and 8).
Chart 7
Chart 8
Appendix
Table 1a
| Median EBITDA interest coverage (x) by industry | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended-- | ||||||||||||||||||||||||||||||||||||
| Industry | Entity count | Dec. 31, 2019 | Dec. 31, 2020 | March 31, 2021 | June 30, 2021 | Sept. 30, 2021 | Dec. 31, 2021 | March 31, 2022 | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | |||||||||||||||||||
| Aerospace/Defense | 17.0 | 2.7 | 1.9 | 1.7 | 1.7 | 1.8 | 2.0 | 2.1 | 2.1 | 2.0 | 1.9 | 2.0 | 1.9 | 2.1 | 1.9 | 1.9 | 2.0 | |||||||||||||||||||
| Auto/Trucks | 30.0 | 3.1 | 2.6 | 3.1 | 4.1 | 4.1 | 3.7 | 3.5 | 3.4 | 3.1 | 2.6 | 2.6 | 2.6 | 2.2 | 2.1 | 2.3 | 2.2 | |||||||||||||||||||
| Business and consumer services | 62.0 | 2.8 | 2.5 | 2.6 | 2.8 | 2.9 | 2.8 | 3.2 | 2.9 | 2.9 | 2.4 | 2.0 | 1.9 | 1.7 | 1.8 | 1.8 | 1.7 | |||||||||||||||||||
| Cap goods/Machine and equip | 97.0 | 3.0 | 3.0 | 3.0 | 3.1 | 3.2 | 3.5 | 3.6 | 3.5 | 3.5 | 3.4 | 3.3 | 3.3 | 3.1 | 3.1 | 2.9 | 2.8 | |||||||||||||||||||
| Chemicals | 26.0 | 3.3 | 2.7 | 3.2 | 3.9 | 4.8 | 4.7 | 5.2 | 5.2 | 5.5 | 4.7 | 4.0 | 2.3 | 1.7 | 1.9 | 1.7 | 2.3 | |||||||||||||||||||
| Consumer products | 87.0 | 2.7 | 2.8 | 3.2 | 3.3 | 3.6 | 3.3 | 3.1 | 3.3 | 3.3 | 2.9 | 2.6 | 2.2 | 2.1 | 2.1 | 1.9 | 2.2 | |||||||||||||||||||
| Forest prod/Bldg mat/Packaging | 41.0 | 3.1 | 4.4 | 4.0 | 4.8 | 4.7 | 5.2 | 4.8 | 4.8 | 4.7 | 5.0 | 4.4 | 4.1 | 4.2 | 4.1 | 3.4 | 2.8 | |||||||||||||||||||
| Healthcare | 80.0 | 1.9 | 1.8 | 2.2 | 2.4 | 2.4 | 2.2 | 2.1 | 2.0 | 1.7 | 1.6 | 1.5 | 1.5 | 1.6 | 1.4 | 1.5 | 1.5 | |||||||||||||||||||
| Media, entertainment and leisure | 129.0 | 3.4 | 1.7 | 1.8 | 2.2 | 2.3 | 2.5 | 2.8 | 3.0 | 2.8 | 3.0 | 3.0 | 2.6 | 2.4 | 2.4 | 2.4 | 2.3 | |||||||||||||||||||
| Mining and minerals | 38.0 | 5.1 | 3.8 | 4.3 | 5.7 | 6.7 | 8.7 | 9.3 | 9.4 | 9.2 | 9.1 | 8.0 | 6.5 | 5.9 | 6.5 | 6.6 | 6.3 | |||||||||||||||||||
| Oil and gas | 60.0 | 5.3 | 2.6 | 2.7 | 3.4 | 4.7 | 6.3 | 7.6 | 10.8 | 12.9 | 14.5 | 13.8 | 12.3 | 10.6 | 9.7 | 8.4 | 8.7 | |||||||||||||||||||
| Restaurants/Retailing | 80.0 | 3.4 | 2.7 | 3.2 | 3.9 | 4.0 | 4.1 | 4.5 | 4.7 | 4.5 | 4.4 | 3.9 | 3.5 | 3.1 | 3.0 | 3.0 | 3.1 | |||||||||||||||||||
| Real estate | 21.0 | 3.5 | 3.4 | 3.4 | 3.5 | 3.2 | 3.5 | 3.8 | 3.8 | 3.8 | 3.9 | 3.5 | 3.2 | 2.9 | 2.3 | 2.4 | 2.3 | |||||||||||||||||||
| Technology | 83.0 | 2.1 | 2.6 | 2.7 | 2.7 | 2.6 | 2.7 | 2.9 | 2.8 | 2.7 | 2.5 | 2.5 | 2.3 | 2.1 | 1.9 | 1.7 | 1.9 | |||||||||||||||||||
| Telecommunications | 38.0 | 2.8 | 3.4 | 3.6 | 3.7 | 4.2 | 4.8 | 4.7 | 4.3 | 4.2 | 4.3 | 4.0 | 3.8 | 3.4 | 3.3 | 3.2 | 2.9 | |||||||||||||||||||
| Transportation | 18.0 | 6.0 | 0.9 | 0.8 | 1.3 | 2.0 | 2.5 | 2.7 | 2.8 | 2.1 | 2.6 | 2.7 | 3.1 | 2.7 | 2.8 | 2.6 | 2.1 | |||||||||||||||||||
| Total | 907.0 | 3.1 | 2.6 | 2.8 | 3.2 | 3.4 | 3.5 | 3.7 | 3.7 | 3.8 | 3.5 | 3.2 | 3.0 | 2.7 | 2.6 | 2.6 | 2.5 | |||||||||||||||||||
| 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. EBITDA--Earnings before interest, taxes, depreciation, and amortization. Source: S&P Global Ratings. | ||||||||||||||||||||||||||||||||||||
Table 1b
| Median EBITDA interest coverage (x) by issuer credit rating | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended-- | ||||||||||||||||||||||||||||||||||||
| Issuer credit rating* | Entity count | Dec. 31, 2019 | Dec. 31, 2020 | March 31, 2021 | June 30, 2021 | Sept. 30, 2021 | Dec. 31, 2021 | March 31, 2022 | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | |||||||||||||||||||
| BB+ | 103 | 6.2 | 5.6 | 6.2 | 7.0 | 8.2 | 7.9 | 8.6 | 9.1 | 8.8 | 8.8 | 7.5 | 6.6 | 6.6 | 6.3 | 6.4 | 6.2 | |||||||||||||||||||
| BB | 114 | 5.8 | 5.2 | 6.0 | 6.1 | 7.1 | 7.8 | 8.3 | 8.4 | 7.9 | 6.5 | 6.1 | 5.7 | 5.8 | 5.5 | 5.7 | 5.8 | |||||||||||||||||||
| BB- | 115 | 4.1 | 3.5 | 3.7 | 4.7 | 4.8 | 5.6 | 5.7 | 5.8 | 5.5 | 5.2 | 5.0 | 4.5 | 4.3 | 4.2 | 4.0 | 3.9 | |||||||||||||||||||
| B+ | 116 | 3.0 | 2.7 | 3.0 | 3.3 | 3.6 | 3.8 | 3.9 | 3.9 | 4.0 | 3.9 | 3.7 | 3.4 | 3.2 | 3.0 | 2.9 | 3.0 | |||||||||||||||||||
| B | 154 | 2.7 | 2.4 | 2.6 | 2.6 | 2.8 | 3.2 | 3.4 | 3.4 | 3.4 | 3.3 | 2.9 | 2.6 | 2.4 | 2.3 | 2.1 | 2.2 | |||||||||||||||||||
| B- | 190 | 1.7 | 1.8 | 1.9 | 2.0 | 2.0 | 1.8 | 1.8 | 1.7 | 1.7 | 1.7 | 1.5 | 1.4 | 1.3 | 1.2 | 1.2 | 1.3 | |||||||||||||||||||
| CCC+ | 72 | 1.5 | 1.3 | 1.4 | 1.6 | 1.6 | 1.4 | 1.3 | 1.3 | 1.5 | 1.4 | 1.3 | 1.2 | 1.0 | 0.9 | 1.0 | 1.0 | |||||||||||||||||||
| CCC | 28 | 1.6 | 1.5 | 1.5 | 1.8 | 1.7 | 1.7 | 1.8 | 1.6 | 1.5 | 1.5 | 1.2 | 1.0 | 0.8 | 0.6 | 0.6 | 0.6 | |||||||||||||||||||
| CCC- | 11 | 2.1 | 2.6 | 2.8 | 2.4 | 2.4 | 2.5 | 2.4 | 2.2 | 2.2 | 2.7 | 2.1 | 1.9 | 1.7 | 1.5 | 1.5 | 1.4 | |||||||||||||||||||
| 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 | 907 | 3.1 | 2.6 | 2.8 | 3.2 | 3.4 | 3.5 | 3.7 | 3.7 | 3.8 | 3.5 | 3.2 | 3.0 | 2.7 | 2.6 | 2.6 | 2.5 | |||||||||||||||||||
| *Rating as of Sept. 17, 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. EBITDA--Earnings before interest, taxes, depreciation, and amortization. Source: S&P Global Ratings. | ||||||||||||||||||||||||||||||||||||
Table 1c
| Median EBITDA interest coverage (x) by company size | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended-- | ||||||||||||||||||||||||||||||||||||
| Entity size (measured by EBITDA) | Entity count | Dec. 31, 2019 | Dec. 31, 2020 | March 31, 2021 | June 30, 2021 | Sept. 30, 2021 | Dec. 31, 2021 | March 31, 2022 | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | |||||||||||||||||||
| <50 | 83 | 1.7 | 1.4 | 1.6 | 1.9 | 1.7 | 1.7 | 1.6 | 1.3 | 1.2 | 1.0 | 1.1 | 0.8 | 0.9 | 0.6 | 0.5 | 0.4 | |||||||||||||||||||
| 50-100 | 98 | 1.9 | 1.7 | 1.8 | 2.1 | 2.1 | 2.0 | 2.2 | 2.2 | 2.2 | 1.9 | 1.8 | 1.7 | 1.5 | 1.5 | 1.5 | 1.5 | |||||||||||||||||||
| 100-200 | 168 | 2.3 | 2.3 | 2.4 | 2.4 | 2.5 | 2.5 | 2.7 | 2.6 | 2.7 | 2.4 | 2.2 | 2.2 | 2.0 | 1.9 | 1.8 | 1.8 | |||||||||||||||||||
| 200-300 | 133 | 2.9 | 2.9 | 3.1 | 3.2 | 3.5 | 3.2 | 3.3 | 3.4 | 3.2 | 3.0 | 3.1 | 3.0 | 2.7 | 2.5 | 2.4 | 2.2 | |||||||||||||||||||
| 300-500 | 154 | 3.5 | 3.2 | 3.5 | 4.2 | 4.1 | 4.6 | 4.4 | 5.0 | 4.7 | 4.5 | 3.9 | 3.8 | 3.9 | 3.6 | 3.5 | 3.5 | |||||||||||||||||||
| 500-1000 | 138 | 4.4 | 3.6 | 3.6 | 4.7 | 4.9 | 5.7 | 5.6 | 5.8 | 5.6 | 5.5 | 5.3 | 5.0 | 4.6 | 4.5 | 4.3 | 4.3 | |||||||||||||||||||
| >1000 | 133 | 5.2 | 3.8 | 4.2 | 5.4 | 5.7 | 6.4 | 6.9 | 7.8 | 7.5 | 6.5 | 5.7 | 5.2 | 5.2 | 5.2 | 5.2 | 5.1 | |||||||||||||||||||
| Total | 907 | 3.1 | 2.6 | 2.8 | 3.2 | 3.4 | 3.5 | 3.7 | 3.7 | 3.8 | 3.5 | 3.2 | 3.0 | 2.7 | 2.6 | 2.6 | 2.5 | |||||||||||||||||||
| 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. EBITDA--Earnings before interest, taxes, depreciation, and amortization. Source: S&P Global Ratings. | ||||||||||||||||||||||||||||||||||||
Table 2a
| Median free operating cash flow-to-debt (%) by industry | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended-- | ||||||||||||||||||||||||||||||||||||
| Industry | Entity count | Dec. 31, 2019 | Dec. 31, 2020 | March 31, 2021 | June 30, 2021 | Sept. 30, 2021 | Dec. 31, 2021 | March 31, 2022 | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | |||||||||||||||||||
| Aerospace/Defense | 17 | 6.1 | 4.6 | 6.0 | 3.5 | 3.1 | 2.6 | 1.5 | 1.1 | 4.3 | 3.7 | 4.5 | 1.2 | 0.5 | 0.8 | 2.6 | 4.9 | |||||||||||||||||||
| Auto/Trucks | 30 | 7.0 | 7.5 | 9.2 | 11.2 | 0.5 | 0.4 | (0.9) | 0.0 | 0.5 | 1.0 | 3.1 | 4.5 | 3.0 | 3.4 | 3.3 | 3.0 | |||||||||||||||||||
| Business and consumer services | 62 | 5.2 | 7.2 | 8.3 | 6.9 | 6.2 | 4.3 | 3.8 | 3.5 | 2.4 | 3.3 | 2.6 | 4.1 | 4.1 | 4.0 | 3.7 | 4.4 | |||||||||||||||||||
| Cap goods/Machine and equip | 97 | 2.6 | 8.5 | 9.9 | 6.9 | 3.2 | 0.9 | (0.4) | (1.3) | (1.2) | 0.3 | 1.3 | 2.7 | 3.9 | 5.2 | 3.5 | 3.0 | |||||||||||||||||||
| Chemicals | 26 | 4.2 | 5.6 | 5.8 | 5.8 | 8.1 | 5.9 | 1.9 | 0.8 | 3.1 | 4.9 | 4.4 | 3.6 | 3.3 | 2.2 | 2.5 | 3.8 | |||||||||||||||||||
| Consumer products | 87 | 7.2 | 10.8 | 9.4 | 6.8 | 5.2 | 3.1 | 0.8 | (0.6) | (0.4) | 1.3 | 2.2 | 5.6 | 7.9 | 9.9 | 8.8 | 7.7 | |||||||||||||||||||
| Forest prod/Bldg mat/Packaging | 41 | 8.8 | 14.9 | 16.3 | 10.3 | 4.0 | 1.8 | 0.2 | 0.3 | 0.9 | 6.4 | 7.2 | 7.6 | 10.2 | 10.0 | 10.7 | 8.1 | |||||||||||||||||||
| Healthcare | 80 | 2.1 | 7.4 | 8.2 | 4.9 | 3.1 | 2.0 | 1.3 | 0.4 | (0.3) | (1.0) | (0.7) | (0.6) | 1.6 | 1.9 | 1.0 | 1.1 | |||||||||||||||||||
| Media, entertainment and leisure | 129 | 6.7 | 5.2 | 5.4 | 8.2 | 6.6 | 6.0 | 6.3 | 7.1 | 6.5 | 6.1 | 5.8 | 6.3 | 5.3 | 5.5 | 5.7 | 6.4 | |||||||||||||||||||
| Mining and minerals | 38 | 5.1 | 7.9 | 11.8 | 11.3 | 7.0 | 10.4 | 12.2 | 11.9 | 9.9 | 10.2 | 7.6 | 3.5 | 3.3 | 6.1 | 2.1 | 5.2 | |||||||||||||||||||
| Oil and gas | 60 | 0.7 | 2.0 | 4.4 | 7.6 | 7.8 | 12.2 | 14.0 | 26.0 | 35.3 | 38.8 | 31.2 | 23.3 | 21.1 | 19.9 | 14.1 | 13.8 | |||||||||||||||||||
| Restaurants/Retailing | 80 | 5.8 | 13.1 | 16.7 | 16.9 | 14.1 | 11.9 | 7.6 | 3.4 | 2.2 | 2.3 | 4.6 | 6.3 | 7.0 | 8.3 | 6.2 | 7.9 | |||||||||||||||||||
| Real estate | 21 | 5.8 | 6.8 | 7.7 | 6.3 | 6.3 | (0.7) | 0.7 | 2.9 | 3.2 | 5.7 | 5.8 | 6.1 | 5.6 | 5.2 | 6.6 | 2.9 | |||||||||||||||||||
| Technology | 83 | 5.1 | 9.2 | 11.4 | 12.1 | 11.8 | 10.6 | 8.4 | 6.7 | 5.5 | 4.1 | 4.5 | 4.5 | 5.8 | 4.0 | 3.4 | 4.3 | |||||||||||||||||||
| Telecommunications | 38 | 3.3 | 4.9 | 7.1 | 5.5 | 5.5 | 3.9 | 3.8 | 3.3 | 2.1 | 2.0 | 2.0 | (0.7) | 0.1 | 0.7 | (0.9) | (0.1) | |||||||||||||||||||
| Transportation | 18 | 4.1 | (1.9) | 0.7 | 0.7 | 1.1 | 1.5 | 2.7 | 0.3 | (1.2) | (2.4) | 0.5 | (0.1) | 0.2 | (1.9) | (1.7) | (2.8) | |||||||||||||||||||
| Total | 907 | 5.0 | 7.4 | 8.1 | 7.7 | 6.2 | 4.9 | 3.8 | 3.2 | 2.6 | 3.4 | 3.8 | 4.7 | 5.1 | 5.3 | 4.8 | 4.8 | |||||||||||||||||||
| 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 free operating cash flow to debt (%) by issuer credit rating | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended-- | ||||||||||||||||||||||||||||||||||||
| Issuer credit rating* | Entity count | Dec. 31, 2019 | Dec. 31, 2020 | March 31, 2021 | June 30, 2021 | Sept. 30, 2021 | Dec. 31, 2021 | March 31, 2022 | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | |||||||||||||||||||
| BB+ | 103 | 12.3 | 18.6 | 20.7 | 19.1 | 21.1 | 18.2 | 16.8 | 13.5 | 13.7 | 13.4 | 11.4 | 12.1 | 12.6 | 12.4 | 14.4 | 15.0 | |||||||||||||||||||
| BB | 114 | 12.4 | 16.8 | 17.8 | 18.0 | 15.4 | 15.1 | 12.6 | 12.2 | 10.0 | 9.7 | 10.6 | 15.0 | 15.0 | 17.2 | 17.1 | 17.8 | |||||||||||||||||||
| BB- | 115 | 7.8 | 10.0 | 13.5 | 12.6 | 13.0 | 10.9 | 9.3 | 9.8 | 7.8 | 8.9 | 9.5 | 11.1 | 13.2 | 13.2 | 11.8 | 9.3 | |||||||||||||||||||
| B+ | 116 | 6.3 | 7.8 | 8.1 | 8.6 | 7.3 | 5.6 | 4.5 | 3.4 | 3.7 | 5.8 | 7.0 | 7.7 | 8.5 | 9.8 | 10.1 | 9.1 | |||||||||||||||||||
| B | 154 | 3.4 | 7.9 | 7.8 | 6.5 | 4.7 | 3.9 | 2.6 | 1.7 | 1.7 | 2.5 | 3.7 | 4.3 | 5.3 | 4.6 | 3.5 | 3.6 | |||||||||||||||||||
| B- | 190 | 1.6 | 4.0 | 4.3 | 2.3 | 1.3 | 0.8 | (0.4) | (0.6) | (1.2) | (0.6) | (1.0) | (0.6) | (0.6) | (0.0) | (0.4) | (0.3) | |||||||||||||||||||
| CCC+ | 72 | (0.5) | 1.3 | 3.5 | 1.0 | (0.9) | (2.4) | (4.4) | (6.2) | (6.1) | (4.4) | (3.3) | (2.5) | (1.1) | (0.4) | (0.4) | (1.3) | |||||||||||||||||||
| CCC | 28 | 1.7 | 4.6 | 6.5 | 4.3 | 0.5 | (1.1) | (5.2) | (5.7) | (5.9) | (6.3) | (5.7) | (4.8) | (4.6) | (3.4) | (2.5) | (1.8) | |||||||||||||||||||
| CCC- | 11 | 6.6 | 3.6 | 2.6 | 5.8 | 5.1 | 4.6 | 3.5 | 2.1 | 0.4 | (0.5) | (0.4) | 1.0 | 0.0 | (2.1) | (4.3) | (4.2) | |||||||||||||||||||
| 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 | 907 | 5.0 | 7.4 | 8.1 | 7.7 | 6.2 | 4.9 | 3.8 | 3.2 | 2.6 | 3.4 | 3.8 | 4.7 | 5.1 | 5.3 | 4.8 | 4.8 | |||||||||||||||||||
| *Rating as of Sept. 17, 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 2c
| Median free operating cash flow to debt (%) by company size | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended-- | ||||||||||||||||||||||||||||||||||||
| Entity size (measured by EBITDA) | Entity count | Dec. 31, 2019 | Dec. 31, 2020 | March 31, 2021 | June 30, 2021 | Sept. 30, 2021 | Dec. 31, 2021 | March 31, 2022 | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | |||||||||||||||||||
| <50 | 83 | 2.3 | 6.6 | 6.9 | 4.8 | 1.2 | (0.1) | (2.0) | (3.4) | (4.5) | (2.7) | (3.0) | (3.3) | (0.7) | (0.3) | (1.0) | (1.6) | |||||||||||||||||||
| 50-100 | 98 | 1.3 | 3.6 | 4.1 | 1.6 | 1.5 | 0.8 | (1.3) | (2.6) | (2.9) | (2.4) | (1.7) | (0.1) | 0.9 | 0.8 | 1.1 | 0.5 | |||||||||||||||||||
| 100-200 | 168 | 2.5 | 5.8 | 6.1 | 4.8 | 3.4 | 3.0 | 1.2 | 1.1 | 1.1 | 0.5 | 1.4 | 1.9 | 2.6 | 2.9 | 2.2 | 2.0 | |||||||||||||||||||
| 200-300 | 133 | 4.6 | 8.6 | 8.8 | 8.9 | 7.5 | 5.5 | 4.4 | 2.2 | 2.2 | 2.4 | 4.1 | 4.5 | 5.2 | 5.3 | 4.5 | 4.5 | |||||||||||||||||||
| 300-500 | 154 | 6.2 | 10.5 | 10.2 | 8.6 | 6.8 | 5.8 | 5.8 | 5.3 | 4.2 | 4.3 | 4.6 | 6.1 | 7.1 | 8.7 | 7.8 | 8.0 | |||||||||||||||||||
| 500-1000 | 138 | 7.6 | 8.7 | 9.8 | 12.8 | 11.2 | 10.3 | 8.8 | 8.4 | 7.6 | 6.3 | 7.4 | 7.0 | 7.9 | 7.4 | 7.2 | 8.7 | |||||||||||||||||||
| >1000 | 133 | 8.3 | 8.4 | 11.3 | 12.4 | 12.8 | 10.4 | 11.1 | 11.5 | 11.0 | 10.8 | 10.0 | 10.8 | 11.4 | 10.4 | 9.9 | 10.3 | |||||||||||||||||||
| Total | 907 | 5.0 | 7.4 | 8.1 | 7.7 | 6.2 | 4.9 | 3.8 | 3.2 | 2.6 | 3.4 | 3.8 | 4.7 | 5.1 | 5.3 | 4.8 | 4.8 | |||||||||||||||||||
| 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. EBITDA--Earnings before interest, taxes, depreciation, and amortization. Source: S&P Global Ratings. | ||||||||||||||||||||||||||||||||||||
Table 3a
| Median gross leverage (x) by industry | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended-- | ||||||||||||||||||||||||||||||||||||
| Industry | Entity count | Dec. 31, 2019 | Dec. 31, 2020 | March 31, 2021 | June 30, 2021 | Sept. 30, 2021 | Dec. 31, 2021 | March 31, 2022 | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | |||||||||||||||||||
| Better: Improved or deleveraged compared to year-end 2022 levels | ||||||||||||||||||||||||||||||||||||
| Aerospace/Defense | 18 | 4.7 | 6.4 | 8.7 | 8.2 | 5.8 | 9.1 | 8.8 | 8.2 | 7.6 | 6.7 | 6.5 | 6.2 | 6.3 | 5.9 | 5.7 | 5.5 | |||||||||||||||||||
| Business and consumer services | 65 | 5.8 | 6.3 | 6.6 | 6.7 | 6.4 | 6.2 | 6.7 | 6.5 | 6.6 | 6.8 | 6.6 | 7.0 | 6.2 | 6.0 | 6.2 | 6.1 | |||||||||||||||||||
| Cap goods/Machine and equip | 101 | 5.7 | 5.1 | 5.3 | 5.4 | 5.3 | 5.6 | 5.8 | 5.5 | 5.2 | 5.9 | 5.0 | 4.8 | 4.9 | 4.7 | 4.6 | 4.5 | |||||||||||||||||||
| Consumer products | 90 | 5.7 | 5.8 | 4.8 | 4.8 | 5.4 | 6.1 | 6.2 | 6.1 | 6.0 | 5.9 | 6.2 | 6.1 | 5.9 | 5.4 | 5.1 | 5.2 | |||||||||||||||||||
| Healthcare | 86 | 6.9 | 7.7 | 7.0 | 6.5 | 6.6 | 6.5 | 7.1 | 8.5 | 8.8 | 8.9 | 8.6 | 8.0 | 7.9 | 7.6 | 7.2 | 6.8 | |||||||||||||||||||
| Technology | 86 | 6.5 | 5.8 | 6.2 | 6.8 | 6.5 | 6.7 | 6.5 | 7.2 | 7.1 | 6.9 | 7.1 | 6.6 | 6.4 | 6.4 | 6.4 | 6.7 | |||||||||||||||||||
| Transportation | 19 | 3.2 | 10.1 | 9.2 | 7.2 | 6.8 | 6.4 | 6.8 | 6.6 | 7.1 | 6.2 | 5.1 | 4.8 | 5.4 | 5.3 | 5.9 | 5.9 | |||||||||||||||||||
| Worse: Leverage increased from year-end 2022 levels | ||||||||||||||||||||||||||||||||||||
| Auto/Trucks | 30 | 3.8 | 5.7 | 5.0 | 4.1 | 4.1 | 4.4 | 4.6 | 4.3 | 4.2 | 4.0 | 4.3 | 4.2 | 4.2 | 4.9 | 4.6 | 4.9 | |||||||||||||||||||
| Chemicals | 30 | 7.4 | 6.1 | 5.9 | 4.8 | 4.4 | 4.2 | 4.4 | 4.2 | 4.3 | 4.8 | 5.0 | 7.2 | 7.7 | 6.8 | 6.6 | 6.0 | |||||||||||||||||||
| Forest prod/Bldg mat/Packaging | 44 | 4.7 | 4.4 | 4.5 | 4.2 | 3.8 | 4.4 | 4.9 | 4.4 | 4.0 | 4.0 | 3.8 | 4.0 | 3.8 | 4.3 | 4.8 | 4.8 | |||||||||||||||||||
| Mining and minerals | 39 | 2.6 | 3.4 | 3.0 | 2.7 | 2.0 | 1.9 | 1.7 | 1.5 | 1.7 | 1.8 | 2.2 | 2.4 | 2.2 | 2.2 | 2.3 | 2.6 | |||||||||||||||||||
| Oil and gas | 63 | 2.9 | 5.2 | 4.8 | 4.0 | 3.0 | 2.0 | 1.9 | 1.2 | 0.9 | 0.9 | 0.9 | 1.2 | 1.2 | 1.4 | 1.4 | 1.5 | |||||||||||||||||||
| Real estate | 30 | 7.1 | 7.8 | 7.2 | 7.0 | 6.6 | 6.7 | 6.2 | 6.2 | 6.3 | 6.2 | 5.6 | 6.3 | 6.1 | 6.2 | 6.3 | 6.6 | |||||||||||||||||||
| Telecommunications | 37 | 5.0 | 4.5 | 4.3 | 4.6 | 4.2 | 4.6 | 4.8 | 4.6 | 4.7 | 4.6 | 4.7 | 5.0 | 5.0 | 4.9 | 5.2 | 5.7 | |||||||||||||||||||
| Leverage remained relatively flat since year-end 2022 | ||||||||||||||||||||||||||||||||||||
| Media, entertainment and leisure | 135 | 4.8 | 8.1 | 8.4 | 7.1 | 6.4 | 6.5 | 5.9 | 5.5 | 5.2 | 5.1 | 5.0 | 5.2 | 5.2 | 5.1 | 5.2 | 5.0 | |||||||||||||||||||
| Restaurants/Retailing | 81 | 4.6 | 5.0 | 4.4 | 3.7 | 3.6 | 3.5 | 3.6 | 3.5 | 3.5 | 3.6 | 3.6 | 3.6 | 3.7 | 3.9 | 3.8 | 3.7 | |||||||||||||||||||
| Total | 954 | 5.0 | 6.0 | 5.7 | 5.2 | 5.1 | 5.3 | 5.2 | 5.0 | 5.0 | 5.2 | 5.0 | 5.0 | 5.1 | 4.9 | 5.0 | 4.9 | |||||||||||||||||||
| Leverage is 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. EBITDA--Earnings before interest, taxes, depreciation, and amortization. Source: S&P Global Ratings. | ||||||||||||||||||||||||||||||||||||
Table 3b
| Median gross leverage (x) by issuer credit rating | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended-- | ||||||||||||||||||||||||||||||||||||
| Issuer credit rating* | Entity count | Dec. 31, 2019 | Dec. 31, 2020 | March 31, 2021 | June 30, 2021 | Sept. 30, 2021 | Dec. 31, 2021 | March 31, 2022 | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | |||||||||||||||||||
| BB+ | 108 | 3.1 | 3.5 | 3.4 | 2.9 | 2.6 | 3.1 | 2.8 | 2.7 | 2.6 | 2.8 | 2.8 | 2.7 | 2.7 | 2.8 | 2.8 | 2.8 | |||||||||||||||||||
| BB | 117 | 3.4 | 3.8 | 3.8 | 3.1 | 3.1 | 3.0 | 3.3 | 3.0 | 3.2 | 3.3 | 3.2 | 3.3 | 3.2 | 3.1 | 3.0 | 3.0 | |||||||||||||||||||
| BB- | 121 | 4.1 | 5.0 | 4.7 | 4.0 | 3.6 | 3.5 | 3.6 | 3.6 | 3.6 | 3.6 | 3.7 | 3.8 | 3.6 | 3.7 | 3.9 | 3.9 | |||||||||||||||||||
| B+ | 125 | 4.6 | 5.4 | 5.5 | 5.0 | 4.5 | 4.6 | 4.7 | 4.6 | 4.4 | 4.2 | 4.3 | 4.1 | 4.1 | 4.1 | 4.1 | 4.1 | |||||||||||||||||||
| B | 161 | 5.4 | 6.4 | 6.2 | 5.7 | 5.4 | 5.5 | 5.1 | 4.8 | 4.8 | 4.8 | 4.9 | 5.0 | 4.9 | 5.0 | 5.2 | 5.2 | |||||||||||||||||||
| B- | 208 | 7.3 | 8.0 | 8.1 | 8.1 | 8.3 | 9.3 | 9.3 | 9.1 | 9.0 | 9.0 | 8.7 | 8.5 | 8.5 | 8.5 | 8.4 | 8.0 | |||||||||||||||||||
| CCC+ | 72 | 7.9 | 9.0 | 8.0 | 8.0 | 9.0 | 10.1 | 10.7 | 10.7 | 9.7 | 9.8 | 9.3 | 9.7 | 9.6 | 9.8 | 9.6 | 9.4 | |||||||||||||||||||
| CCC | 27 | 7.4 | 9.9 | 8.4 | 7.9 | 9.2 | 8.6 | 9.2 | 10.0 | 9.2 | 9.3 | 10.6 | 11.2 | 13.5 | 16.1 | 13.8 | 15.7 | |||||||||||||||||||
| CCC- | 11 | 6.9 | 6.7 | 6.2 | 7.4 | 7.3 | 6.0 | 6.0 | 6.3 | 6.9 | 7.3 | 8.2 | 9.3 | 9.0 | 10.6 | 9.0 | 8.0 | |||||||||||||||||||
| 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 | 954 | 5.0 | 6.0 | 5.7 | 5.2 | 5.1 | 5.3 | 5.2 | 5.0 | 5.0 | 5.2 | 5.0 | 5.0 | 5.1 | 4.9 | 5.0 | 4.9 | |||||||||||||||||||
| *Rating as of Sept. 17, 2024. N.M.--Not meaningful due to small sample size. Leverage is 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 (x) by company size | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended-- | ||||||||||||||||||||||||||||||||||||
| Entity size (measured by EBITDA) | Entity count | Dec. 31, 2019 | Dec. 31, 2020 | March 31, 2021 | June 30, 2021 | Sept. 30, 2021 | Dec. 31, 2021 | March 31, 2022 | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | |||||||||||||||||||
| <50 | 88 | 6.6 | 7.9 | 7.4 | 7.0 | 7.5 | 9.7 | 10.9 | 10.8 | 11.6 | 12.2 | 11.5 | 12.9 | 14.2 | 19.6 | 21.5 | 21.0 | |||||||||||||||||||
| 50-100 | 103 | 6.4 | 7.3 | 7.5 | 6.8 | 7.3 | 7.3 | 7.2 | 6.9 | 7.1 | 6.6 | 6.8 | 6.9 | 6.5 | 6.3 | 6.8 | 6.3 | |||||||||||||||||||
| 100-200 | 179 | 6.0 | 6.3 | 6.2 | 6.0 | 6.0 | 6.3 | 6.1 | 6.1 | 6.0 | 6.1 | 6.2 | 5.9 | 6.3 | 5.9 | 6.2 | 6.0 | |||||||||||||||||||
| 200-300 | 142 | 5.6 | 5.9 | 5.8 | 5.8 | 5.6 | 5.7 | 5.9 | 5.9 | 5.5 | 5.5 | 5.2 | 5.0 | 5.1 | 4.9 | 5.0 | 5.1 | |||||||||||||||||||
| 300-500 | 164 | 4.9 | 5.4 | 5.4 | 5.0 | 4.6 | 4.4 | 4.4 | 4.5 | 4.5 | 4.4 | 4.2 | 4.2 | 4.2 | 4.2 | 4.1 | 4.0 | |||||||||||||||||||
| 500-1000 | 144 | 4.0 | 4.9 | 4.6 | 4.0 | 3.6 | 3.6 | 3.6 | 3.5 | 3.5 | 3.7 | 3.6 | 3.6 | 3.4 | 3.5 | 3.5 | 3.5 | |||||||||||||||||||
| >1000 | 134 | 3.6 | 4.7 | 4.2 | 3.7 | 3.4 | 3.6 | 3.5 | 3.1 | 3.3 | 3.3 | 3.3 | 3.4 | 3.2 | 3.2 | 3.2 | 3.1 | |||||||||||||||||||
| Total | 954 | 5.0 | 6.0 | 5.7 | 5.2 | 5.1 | 5.3 | 5.2 | 5.0 | 5.0 | 5.2 | 5.0 | 5.0 | 5.1 | 4.9 | 5.0 | 4.9 | |||||||||||||||||||
| Leverage is 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. EBITDA--Earnings before interest, taxes, depreciation, and amortization. Source: S&P Global Ratings. | ||||||||||||||||||||||||||||||||||||
Table 4a
| Media EBITDA growth (%) by industry | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended (quarter over quarter)-- | ||||||||||||||||||||||||||||||||
| Industry | Entity count | March 31, 2021 | June 30, 2021 | Sept. 30, 2021 | Dec. 31, 2021 | March 31, 2022 | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | |||||||||||||||||
| Aerospace/Defense | 17 | -3.2% | 11.9% | 11.0% | 7.6% | 5.9% | 4.1% | 4.0% | 5.1% | 4.7% | 0.8% | 0.8% | 4.7% | 0.3% | 2.9% | |||||||||||||||||
| Auto/Trucks | 30 | 16.6% | 29.5% | 4.7% | 3.2% | 2.4% | 1.8% | 1.2% | 2.7% | 2.5% | 5.5% | 2.0% | 1.4% | -1.3% | -1.8% | |||||||||||||||||
| Business and consumer services | 62 | 3.5% | 6.4% | 2.2% | 2.5% | 1.4% | 3.3% | 3.1% | 0.3% | 1.5% | 1.6% | 1.7% | 2.2% | 1.5% | 1.9% | |||||||||||||||||
| Cap goods/Machine and equip | 97 | 4.2% | 5.4% | 1.9% | 0.2% | 3.6% | 6.6% | 7.4% | 6.9% | 3.7% | 3.4% | 1.7% | 2.5% | -1.2% | 0.6% | |||||||||||||||||
| Chemicals | 26 | 12.2% | 14.9% | 8.6% | 5.3% | 3.7% | 4.6% | -1.1% | -7.1% | -9.0% | -14.6% | -2.4% | 0.0% | 0.8% | -0.7% | |||||||||||||||||
| Consumer products | 87 | 8.6% | 10.1% | 1.8% | -0.6% | -0.4% | 0.8% | -1.4% | 0.2% | -1.4% | -1.5% | 1.3% | 2.1% | 1.0% | 1.8% | |||||||||||||||||
| Forest prod/Bldg mat/Packaging | 41 | 6.2% | 11.2% | 1.2% | 1.4% | 7.4% | 6.1% | 4.0% | 0.8% | 0.4% | -0.8% | 0.1% | 0.1% | -0.1% | -0.8% | |||||||||||||||||
| Healthcare | 80 | 8.9% | 8.2% | 3.2% | 0.6% | -1.2% | -2.4% | -2.2% | -1.4% | 1.5% | 5.2% | 4.0% | 3.9% | 4.3% | 2.1% | |||||||||||||||||
| Media, entertainment and leisure | 129 | 3.1% | 27.4% | 8.2% | 5.5% | 3.9% | 2.5% | 1.1% | 2.4% | 0.3% | -0.4% | 0.0% | -0.5% | 0.0% | 0.7% | |||||||||||||||||
| Mining and minerals | 38 | 6.6% | 18.4% | 16.1% | 12.8% | 12.3% | 6.8% | -0.9% | -9.8% | -3.7% | -9.0% | -2.2% | 2.8% | -4.7% | -3.6% | |||||||||||||||||
| Oil and gas | 60 | 9.9% | 33.5% | 28.1% | 37.4% | 19.0% | 27.8% | 17.2% | 5.6% | 1.4% | -10.3% | -3.5% | -1.2% | -2.5% | 2.1% | |||||||||||||||||
| Restaurants/Retailing | 80 | 10.3% | 30.1% | 2.5% | 5.4% | 1.6% | -0.7% | 0.3% | 0.0% | 0.3% | 0.0% | -0.7% | -1.3% | 0.4% | -1.0% | |||||||||||||||||
| Real estate | 21 | 0.4% | 5.0% | 4.5% | 5.0% | 2.6% | 2.2% | 4.3% | 3.6% | -0.3% | -1.4% | -2.4% | -2.4% | 0.3% | 1.6% | |||||||||||||||||
| Technology | 83 | 7.5% | 5.4% | 4.1% | 4.7% | 2.0% | 0.1% | 2.7% | 0.0% | 1.9% | 2.5% | 2.8% | -0.4% | 2.4% | 1.4% | |||||||||||||||||
| Telecommunications | 38 | 2.8% | 2.6% | 1.2% | 0.1% | -1.2% | -2.4% | -1.4% | -0.7% | -2.3% | -0.4% | 0.3% | 0.7% | 0.0% | -0.3% | |||||||||||||||||
| Transportation | 18 | 0.4% | 28.2% | 16.8% | 19.7% | -0.6% | -2.6% | 6.1% | 9.6% | 13.3% | 10.2% | -2.4% | -0.7% | -1.6% | -1.7% | |||||||||||||||||
| Total | 907 | 5.8% | 10.9% | 4.5% | 3.6% | 2.6% | 2.2% | 1.5% | 1.4% | 0.6% | 0.2% | 0.6% | 0.9% | 0.3% | 0.9% | |||||||||||||||||
| 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. EBITDA--Earnings before interest, taxes, depreciation, and amortization. Source: S&P Global Ratings. | ||||||||||||||||||||||||||||||||
Table 4b
| Median EBITDA growth (%) by issuer credit rating | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended (quarter over quarter)-- | ||||||||||||||||||||||||||||||||
| Issuer credit rating* | Entity count | March 31, 2021 | June 30, 2021 | Sept. 30, 2021 | Dec. 31, 2021 | March 31, 2022 | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | |||||||||||||||||
| BB+ | 103 | 5.1% | 11.0% | 4.5% | 3.9% | 4.5% | 3.0% | 1.7% | 0.4% | -1.7% | -0.2% | 0.7% | 0.9% | -0.4% | 0.2% | |||||||||||||||||
| BB | 114 | 4.9% | 10.4% | 6.0% | 3.7% | 2.9% | 2.8% | 2.1% | 1.9% | 0.2% | -0.4% | 0.2% | 0.2% | 0.8% | 0.5% | |||||||||||||||||
| BB- | 115 | 5.6% | 16.7% | 5.2% | 5.4% | 4.4% | 0.6% | 1.5% | 1.6% | 1.8% | 0.2% | 1.0% | 1.3% | 0.1% | 0.6% | |||||||||||||||||
| B+ | 116 | 7.6% | 10.2% | 6.8% | 5.2% | 3.4% | 2.7% | 2.7% | 3.7% | 1.1% | 0.9% | -0.7% | -0.2% | -0.3% | -0.6% | |||||||||||||||||
| B | 154 | 8.1% | 14.8% | 6.4% | 5.0% | 4.4% | 4.3% | 2.7% | 1.9% | 0.3% | -1.2% | 0.9% | 1.1% | 0.1% | 1.4% | |||||||||||||||||
| B- | 190 | 5.6% | 7.1% | 3.4% | -0.2% | 1.6% | 1.0% | 1.9% | 3.3% | 1.8% | 2.9% | 1.8% | 2.2% | 1.9% | 2.1% | |||||||||||||||||
| CCC+ | 72 | 6.7% | 7.2% | 2.1% | 1.5% | -1.9% | -2.3% | -1.6% | -2.1% | 1.9% | -2.2% | -0.6% | 0.5% | -0.5% | -0.6% | |||||||||||||||||
| CCC | 28 | 6.4% | 11.0% | 1.2% | -0.8% | -5.8% | -1.1% | -1.3% | -3.0% | -1.9% | -8.0% | -4.2% | -6.2% | 2.0% | -0.4% | |||||||||||||||||
| CCC- | 11 | 5.0% | 2.3% | 0.0% | -3.0% | -1.6% | -6.0% | -8.6% | -3.3% | -5.3% | -4.8% | -5.5% | -7.1% | 1.9% | -2.1% | |||||||||||||||||
| 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. | |||||||||||||||||
| Total | 907 | 5.8% | 10.9% | 4.5% | 3.6% | 2.6% | 2.2% | 1.5% | 1.4% | 0.6% | 0.2% | 0.6% | 0.9% | 0.3% | 0.9% | |||||||||||||||||
| *Rating as of Sept. 17, 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. EBITDA--Earnings before interest, taxes, depreciation, and amortization. Source: S&P Global Ratings. | ||||||||||||||||||||||||||||||||
Table 4c
| Median EBITDA growth (%) by company size | ||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended (quarter over quarter)-- | ||||||||||||||||||||||||||||||||
| Entity size (measured by EBITDA) | Entity count | March 31, 2021 | June 30, 2021 | Sept. 30, 2021 | Dec. 31, 2021 | March 31, 2022 | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | |||||||||||||||||
| <50 | 83 | 9.9% | 14.6% | 2.2% | 0.4% | -4.8% | -7.3% | -4.9% | -3.2% | -1.4% | -3.6% | -2.4% | -10.9% | -0.7% | -4.3% | |||||||||||||||||
| 50-100 | 98 | 5.8% | 10.7% | 4.6% | 0.8% | 1.3% | 1.8% | 1.1% | -0.2% | 0.1% | 0.8% | 0.4% | 3.1% | -1.1% | 0.8% | |||||||||||||||||
| 100-200 | 168 | 6.5% | 8.7% | 2.2% | 0.9% | 0.3% | 0.4% | 1.3% | 1.1% | 0.5% | 1.8% | 1.0% | 0.9% | 0.4% | 1.5% | |||||||||||||||||
| 200-300 | 133 | 4.2% | 11.3% | 2.2% | 2.5% | 2.4% | 1.7% | 1.0% | 3.3% | 1.6% | 0.7% | 1.0% | 1.4% | 0.2% | 0.9% | |||||||||||||||||
| 300-500 | 154 | 5.2% | 9.0% | 4.4% | 4.6% | 3.7% | 4.2% | 2.6% | 1.6% | 1.0% | 0.1% | 1.1% | 1.1% | 0.3% | 1.3% | |||||||||||||||||
| 500-1000 | 138 | 6.0% | 16.9% | 8.2% | 5.9% | 4.1% | 3.0% | 2.0% | 1.2% | 1.0% | 0.0% | 0.6% | 1.0% | 1.0% | 0.7% | |||||||||||||||||
| >1000 | 133 | 6.5% | 11.2% | 7.5% | 7.2% | 4.9% | 4.6% | 3.0% | 2.2% | -0.6% | -0.3% | 0.1% | 1.4% | 0.3% | 0.9% | |||||||||||||||||
| Total | 907 | 5.8% | 10.9% | 4.5% | 3.6% | 2.6% | 2.2% | 1.5% | 1.4% | 0.6% | 0.2% | 0.6% | 0.9% | 0.3% | 0.9% | |||||||||||||||||
| 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. EBITDA--Earnings before interest, taxes, depreciation, and amortization. Source: S&P Global Ratings. | ||||||||||||||||||||||||||||||||
Table 5a
| Median capex growth (%) by industry | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended (quarter over quarter)-- | ||||||||||||||||||||||
| Industry | Entity count | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | ||||||||||||
| Aerospace/Defense | 19 | 5.2% | 11.3% | 1.9% | -0.5% | 7.1% | -0.1% | 3.6% | 0.4% | -7.3% | ||||||||||||
| Auto/Trucks | 35 | 3.3% | -2.8% | 1.4% | -2.5% | 0.8% | 2.3% | 0.7% | 2.6% | 2.2% | ||||||||||||
| Business and consumer services | 75 | 7.5% | 5.9% | 3.1% | 2.7% | 0.4% | -1.0% | -1.3% | -1.0% | 0.0% | ||||||||||||
| Cap goods/Machine and equip | 116 | 3.5% | 4.7% | 3.4% | 3.0% | 3.5% | 2.7% | 2.3% | 0.9% | -0.4% | ||||||||||||
| Chemicals | 33 | 4.3% | 1.6% | 0.5% | 3.5% | 1.8% | 1.7% | -2.3% | -3.4% | -1.8% | ||||||||||||
| Consumer products | 99 | 5.0% | 1.9% | 1.2% | -1.2% | 2.0% | -1.8% | 1.1% | -3.0% | -2.8% | ||||||||||||
| Forest prod/Bldg mat/Packaging | 49 | 4.4% | 1.2% | 5.7% | 4.8% | 3.5% | 4.9% | 3.4% | -2.0% | -1.7% | ||||||||||||
| Healthcare | 104 | 4.7% | 4.7% | 4.7% | 0.7% | -0.6% | -1.3% | -1.8% | -0.7% | 0.2% | ||||||||||||
| Media, entertainment and leisure | 156 | 8.9% | 7.2% | 3.4% | 4.9% | 2.0% | 1.0% | -1.6% | -0.6% | -1.3% | ||||||||||||
| Mining and minerals | 41 | 7.2% | 8.0% | 8.2% | 9.0% | 6.9% | 3.5% | 4.2% | -0.8% | 1.1% | ||||||||||||
| Oil & Gas | 77 | 14.8% | 14.0% | 16.0% | 8.1% | 5.9% | 0.9% | 1.9% | 0.4% | -2.4% | ||||||||||||
| Restaurants/Retailing | 86 | 6.1% | 8.2% | 6.1% | 2.2% | 1.9% | 0.0% | -0.5% | 1.8% | -0.7% | ||||||||||||
| Real estate | 29 | 5.3% | 6.0% | 2.7% | 1.7% | 2.0% | 6.3% | 0.4% | 1.1% | 3.5% | ||||||||||||
| Technology | 102 | 4.2% | 4.8% | 5.0% | 1.2% | 2.0% | -0.4% | -3.8% | -0.3% | -1.6% | ||||||||||||
| Telecommunications | 43 | 6.3% | 4.5% | 5.3% | 3.1% | -0.6% | -2.0% | -5.7% | -3.4% | -4.4% | ||||||||||||
| Transportation | 25 | 4.5% | 7.7% | 12.2% | 4.4% | 8.3% | 1.0% | -0.5% | 2.9% | 0.3% | ||||||||||||
| Total | 1089 | 5.6% | 6.2% | 4.7% | 2.7% | 2.3% | 0.8% | -0.1% | -0.4% | -1.2% | ||||||||||||
| Reported 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 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended (quarter over quarter)-- | ||||||||||||||||||||||
| Issuer credit rating* | Entity count | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | ||||||||||||
| BB+ | 113 | 5.5% | 6.8% | 7.2% | 5.1% | 3.3% | 1.9% | -1.4% | -0.5% | -1.2% | ||||||||||||
| BB | 125 | 4.4% | 5.0% | 5.1% | 3.9% | 3.3% | 1.5% | 0.0% | -0.3% | -0.4% | ||||||||||||
| BB- | 137 | 7.0% | 7.7% | 4.1% | 5.4% | 4.9% | 3.5% | 2.4% | 0.7% | -0.4% | ||||||||||||
| B+ | 148 | 6.1% | 7.9% | 4.4% | 3.7% | 2.4% | 0.6% | 1.4% | 0.5% | 1.5% | ||||||||||||
| B | 192 | 6.2% | 5.8% | 6.3% | 2.4% | 3.3% | 1.5% | -0.1% | 0.0% | -0.9% | ||||||||||||
| B- | 238 | 4.7% | 3.8% | 4.5% | 1.3% | 0.8% | 1.2% | -0.1% | 0.2% | -1.7% | ||||||||||||
| CCC+ | 87 | 2.9% | 0.7% | -1.4% | -1.1% | -3.8% | -5.5% | -4.3% | -6.0% | -3.0% | ||||||||||||
| CCC | 32 | 5.8% | 0.9% | 2.4% | -3.3% | 0.5% | -5.5% | -12.2% | -5.6% | -12.5% | ||||||||||||
| CCC- | 13 | 10.4% | 6.3% | 3.0% | 0.4% | 0.4% | -0.9% | -4.9% | -3.5% | -6.0% | ||||||||||||
| CC | N.M. | N.M. | N.M. | N.M. | N.M. | N.M. | N.M. | N.M. | N.M. | N.M. | ||||||||||||
| Total | 1,089 | 5.6% | 6.2% | 4.7% | 2.7% | 2.3% | 0.8% | -0.1% | -0.4% | -1.2% | ||||||||||||
| * Rating as of Sept. 17, 2024. N.M.--Not meaningful due to small sample size. Source: S&P Global Ratings. | ||||||||||||||||||||||
Table 5c
| Median capex growth (%) by company size | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended (quarter over quarter)-- | ||||||||||||||||||||||
| Entity size (measured by EBITDA) | Entity count | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | ||||||||||||
| <50 | 113 | 4.6% | 5.5% | 5.9% | -0.8% | -1.4% | -3.0% | -6.6% | -5.1% | -1.7% | ||||||||||||
| 50-100 | 125 | 4.5% | 2.9% | 3.0% | 0.5% | 0.8% | -1.2% | -1.4% | -2.1% | -2.8% | ||||||||||||
| 100-200 | 213 | 6.0% | 5.4% | 4.1% | 2.0% | 3.2% | 0.4% | 0.0% | -0.6% | -2.1% | ||||||||||||
| 200-300 | 157 | 5.2% | 5.5% | 2.1% | 2.3% | 1.3% | 2.1% | 0.5% | 0.3% | 0.3% | ||||||||||||
| 300-500 | 180 | 5.9% | 6.4% | 6.6% | 4.3% | 3.2% | 1.6% | -2.0% | -0.3% | -0.5% | ||||||||||||
| 500-1000 | 159 | 5.7% | 7.7% | 4.2% | 3.1% | 2.2% | 0.6% | 0.8% | 0.0% | -0.4% | ||||||||||||
| >1000 | 142 | 6.0% | 7.2% | 7.3% | 5.9% | 4.4% | 1.9% | 1.2% | 0.2% | -1.6% | ||||||||||||
| Total | 1,089 | 5.6% | 6.2% | 4.7% | 2.7% | 2.3% | 0.8% | -0.1% | -0.4% | -1.2% | ||||||||||||
| Reported 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. EBITDA--Earnings before interest, taxes, depreciation, and amortization. Source: S&P Global Ratings. | ||||||||||||||||||||||
Table 6a
| Median working capital change as a percentage of revenue by industry | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended (quarter over quarter) | ||||||||||||||||||||||
| Industry | Entity count | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | ||||||||||||
| Aerospace/Defense | 19 | -1.0% | -2.2% | -3.3% | -1.9% | -3.1% | -1.4% | -1.4% | -0.4% | -1.1% | ||||||||||||
| Auto/Trucks | 35 | -2.4% | -0.9% | -1.0% | -0.4% | -0.3% | 0.3% | 0.1% | -0.1% | -0.5% | ||||||||||||
| Business and consumer services | 77 | -2.2% | -2.0% | -2.0% | -1.2% | -0.8% | -0.6% | -0.2% | -0.2% | -0.3% | ||||||||||||
| Cap goods/Machine and equip | 124 | -3.5% | -3.7% | -2.9% | -1.9% | -1.1% | -0.3% | 0.4% | 0.7% | 0.3% | ||||||||||||
| Chemicals | 35 | -4.1% | -3.9% | -2.9% | -1.3% | 0.9% | 0.8% | 2.1% | 2.7% | 1.5% | ||||||||||||
| Consumer products | 101 | -5.6% | -4.3% | -3.7% | -1.5% | 0.1% | 1.7% | 2.6% | 2.4% | 1.5% | ||||||||||||
| Forest prod/Bldg mat/Packaging | 51 | -5.1% | -4.1% | -2.7% | -1.1% | 0.3% | 2.0% | 2.1% | 1.5% | 0.9% | ||||||||||||
| Healthcare | 108 | -2.4% | -2.4% | -2.2% | -2.1% | -2.1% | -1.1% | -0.3% | -1.0% | -0.6% | ||||||||||||
| Media, entertainment and leisure | 162 | -1.4% | -1.3% | -1.1% | -0.8% | -0.6% | -0.6% | 0.0% | -0.1% | -0.3% | ||||||||||||
| Mining and minerals | 42 | -4.5% | -3.4% | -2.6% | -2.1% | -1.5% | -1.4% | 0.3% | 0.4% | 0.4% | ||||||||||||
| Oil and gas | 82 | -2.0% | -0.9% | -0.2% | 0.1% | 0.6% | -0.8% | -0.1% | -0.5% | -0.7% | ||||||||||||
| Restaurants/Retailing | 91 | -1.2% | -1.6% | -1.9% | -1.2% | -0.5% | 0.1% | 0.3% | 0.0% | 0.1% | ||||||||||||
| Real estate | 33 | -5.2% | -3.7% | -5.0% | -2.0% | 0.8% | 0.9% | -0.5% | -2.7% | -3.1% | ||||||||||||
| Technology | 107 | -1.7% | -2.2% | -2.5% | -2.0% | -1.6% | -1.1% | -0.6% | -0.7% | -0.7% | ||||||||||||
| Telecommunications | 45 | -1.4% | -0.9% | -0.9% | -1.4% | -1.8% | -1.8% | -1.2% | -1.6% | -0.1% | ||||||||||||
| Transportation | 29 | -0.5% | 0.0% | -0.2% | 0.3% | 0.9% | 0.8% | 0.3% | -0.7% | -0.6% | ||||||||||||
| Total | 1,141 | -2.6% | -2.3% | -2.0% | -1.2% | -0.6% | -0.3% | 0.2% | 0.0% | -0.1% | ||||||||||||
| 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 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended (quarter over quarter)-- | ||||||||||||||||||||||
| Issuer credit rating* | Entity count | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | ||||||||||||
| BB+ | 113 | -1.8% | -1.7% | -2.0% | -1.3% | -1.0% | -1.0% | -0.7% | -0.4% | -0.3% | ||||||||||||
| BB | 127 | -2.7% | -2.5% | -2.8% | -1.8% | -1.1% | -0.4% | -0.1% | 0.0% | 0.0% | ||||||||||||
| BB- | 140 | -2.7% | -2.7% | -2.0% | -1.2% | -0.6% | -0.4% | 0.0% | -0.3% | -0.4% | ||||||||||||
| B+ | 154 | -2.7% | -2.0% | -1.8% | -1.6% | -1.0% | -0.8% | -0.1% | 0.1% | -0.1% | ||||||||||||
| B | 211 | -3.4% | -2.7% | -2.4% | -1.2% | -0.6% | -0.2% | 0.0% | -0.1% | -0.4% | ||||||||||||
| B- | 253 | -2.1% | -1.9% | -1.6% | -0.8% | -0.4% | 0.4% | 0.6% | 0.2% | -0.1% | ||||||||||||
| CCC+ | 92 | -3.1% | -2.9% | -2.2% | -0.9% | 0.0% | 0.7% | 1.3% | 0.6% | 0.4% | ||||||||||||
| CCC | 34 | -4.3% | -3.0% | -3.2% | -2.3% | -0.6% | 2.2% | 2.7% | 1.5% | 1.4% | ||||||||||||
| CCC- | 13 | -1.4% | -0.1% | -1.4% | 0.3% | 1.3% | 1.7% | 2.3% | 1.0% | 0.9% | ||||||||||||
| CC | 4 | -4.5% | -2.8% | 0.7% | -0.5% | -2.1% | -2.0% | -1.1% | -2.7% | -0.4% | ||||||||||||
| Total | 1,141 | -2.6% | -2.3% | -2.0% | -1.2% | -0.6% | -0.3% | 0.2% | 0.0% | -0.1% | ||||||||||||
| *Rating as of Sept. 17, 2024. 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 | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| --12 months ended (quarter over quarter)-- | ||||||||||||||||||||||
| Entity size (measured by EBITDA) | Entity count | June 30, 2022 | Sept. 30, 2022 | Dec. 31, 2022 | March 31, 2023 | June 30, 2023 | Sept. 30, 2023 | Dec. 31, 2023 | March 31, 2024 | June 30, 2024 | ||||||||||||
| <50 | 122 | -1.8% | -1.4% | -0.9% | -0.2% | 0.4% | 1.4% | 2.0% | 1.1% | 1.4% | ||||||||||||
| 50-100 | 135 | -2.7% | -3.1% | -2.9% | -1.3% | -0.6% | 0.0% | 0.6% | 0.9% | -0.3% | ||||||||||||
| 100-200 | 228 | -2.9% | -2.9% | -2.4% | -1.6% | -0.6% | -0.3% | 0.3% | 0.1% | -0.2% | ||||||||||||
| 200-300 | 162 | -3.0% | -2.2% | -1.8% | -1.2% | -0.5% | 0.0% | 0.7% | 0.4% | 0.1% | ||||||||||||
| 300-500 | 190 | -3.0% | -3.0% | -2.5% | -1.5% | -1.0% | -0.7% | -0.3% | -0.4% | -0.3% | ||||||||||||
| 500-1000 | 162 | -2.2% | -2.1% | -1.8% | -1.1% | -0.5% | -0.6% | -0.2% | -0.2% | -0.5% | ||||||||||||
| >1000 | 142 | -2.0% | -1.6% | -1.1% | -0.7% | -0.8% | -0.7% | -0.4% | -0.7% | -0.3% | ||||||||||||
| Total | 1,141 | -2.6% | -2.3% | -2.0% | -1.2% | -0.6% | -0.3% | 0.2% | 0.0% | -0.1% | ||||||||||||
| 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. EBITDA--Earnings before interest, taxes, depreciation, and amortization. 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 for which we have received and spread financial statements for the latest quarter. Each quarter, we construct a sample pool from the large set in which we have quarter-end financial reports for every quarter since Dec. 31, 2019. This sample set varies somewhat quarter by quarter because it excludes entities rated 'S.D.' (selective default) or no longer outstanding as of the end of each quarter (due to default or being withdrawn) but includes new issuers for which we have historical financial reports.
The sample set is generally smaller than the large set but is nonetheless a representative sample of the North American speculative-grade universe. The sample in this report consists of approximately 910 companies because some private companies had yet to report second-quarter 2024 financial results before our extraction date of Sept. 17, 2024. These companies will re-enter the sample once we have all the financial statements and have built the next sample.
Related Research
- Debt Restructuring Snapshot: Del Monte Foods Inc., Oct. 8, 2024
- Debt Restructuring Snapshot: Magenta Buyer LLC (dba Trellix And Skyhigh Security), Oct. 2, 2024
- U.S. Leveraged Finance Q2 2024: Credit Trends Generally Positive, But First-Lien Recovery Prospects Still Under Pressure, Aug. 7, 2024
- U.S. Leveraged Finance Q1 2024 Update: For Most 'B-' Rated Issuers, Solid Businesses Have Shaky Finances, May 23, 2024
- 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 |
| Omkar V Athalekar, Toronto +1 6474803504; omkar.athalekar@spglobal.com | |
| Secondary Contacts: | Steve H Wilkinson, CFA, New York + 1 (212) 438 5093; steve.wilkinson@spglobal.com |
| Minesh Patel, CFA, New York + 1 (212) 438 6410; minesh.patel@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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