Key Takeaways
- Global corporate defaults amounted to 10 in January 2025, the same number as in December 2024. U.S.-based issuers accounted for 70% of defaults in January.
- Consumer products and health care companies contributed to 50% of defaults in January.
- With €4.98 billion, the health care sector accounted for 62% of the defaulted debt amount in January.
- Distressed exchanges, which remain the primary reason for defaults, caused six defaults in January.
S&P Global Ratings' global corporate default tally in 2025 stands at 10 after the following defaults in January:
- U.S.-based beverage co-manufacturer City Brewing Co. LLC
- U.S.-based beer marketer Blue Ribbon LLC
- U.S.-based specialty retailer Joann Inc.
- U.S.-based cleaning and sanitation services provider Packers Holdings LLC
- U.S.-based hotel management company Aimbridge Acquisition Co. Inc.
- Irish specialty material solutions provider Trinseo PLC
- U.S.-based primary care service provider Physician Partners LLC
- Nordic debt collector Intrum AB (publ)
- Brazil-based airline Azul S.A.
- U.S.-based health care data analytics company MultiPlan Corp.
Steady Default Tally In January
The number of defaults totaled 10 in January 2025, unchanged from December. European issuers accounted for two defaults in January, with no defaults in December 2024. Defaults in the U.S. have decreased to seven in January, down from nine in December 2024. However 70% of defaults occurred in the U.S. The consumer products and health care sectors accounted for 50% of defaults in January, with three and two defaults, respectively (see charts 1 and 2).
Chart 1
Chart 2
50% Of Defaults Resulted From Consumer Products and Health Care
The consumer products and health care sectors led defaults in January. Together with the media and entertainment sector, they accounted for close to 40% of defaults in 2024--a trend that has continued into 2025 (see chart 3).
Chart 3
Many lower-rated consumer products companies are small, highly leveraged, and have weak business risk profiles. Even though some speculative-grade issuers addressed debt maturities as interest rates declined, they remain vulnerable to volatile operating performance and could struggle to restore profitability and cash flows (see "Industry Credit Outlook: Consumer Products," published Jan. 14, 2025).
The number of defaults in the U.S. health care sector has been elevated since 2022. Even if the number of health care defaults moderates in 2025, it will likely remain above historical levels because of high labor costs and many speculative-grade companies' virtually unsustainable capital structures (see "Industry Credit Outlook: Health Care," published Jan. 14, 2025).
The consumer products, health care, and media and entertainment sectors accounted for 60% of defaults in January and 39% of the weakest links (issuers rated 'B-' and below with a negative outlook). This suggests defaults in these sectors could increase further. Additionally, these sectors face significant amounts of speculative-grade debt maturing before 2028, which increases their vulnerability and the potential risk of default if interest rates remain high.
The Health Care Sector Led Defaulted Debt Volumes
Defaulted debt in January declined to $8.1 billion--the lowest level since September 2024--with U.S.-based issuers accounting for 94% (see chart 4). Health care companies represented 62% or $4.98 billion of defaulted debt, which is the highest amount in this sector since February 2024 (see chart 5). The consumer products sector followed with $1.3 billion.
Chart 4
Chart 5
Most of the health care sector's debt ($4.1 billion) resulted from the distressed exchange of U.S.-based company MultiPlan Corp. Its issuer subsidiary MPH Acquisition Holdings LLC completed the exchange of more than 99% of MultiPlan's debt. We view the debt restructuring as tantamount to a default because, in our view, lenders received less than originally promised and were not compensated adequately.
Distressed Exchanges Caused Most Defaults In January
Distressed exchanges remained the primary reason of defaults and accounted for 60% of defaults in January (see chart 6). The increasing prevalence of distressed exchanges across sectors is part of a trend that began in 2017. The number of distressed exchanges has risen in recent years as distressed issuers view out-of-court restructuring more favorably than other options, such as a traditional bankruptcy.
Chart 6
Table 1
Estimated European and U.S. default rates remain elevated | ||||||
---|---|---|---|---|---|---|
Region | 12-month trailing speculative-grade default rate (%) | Weakest links | ||||
U.S. | 5.1 | 164 | ||||
Emerging markets | 1.1 | 11 | ||||
Europe | 4.1 | 50 | ||||
Other developed | 2.3 | 10 | ||||
Global | 3.9 | 232 | ||||
Trailing 12-month speculative-grade default rates are from Dec. 31, 2023, to Dec. 31, 2024, except for the U.S. and Europe. For these two regions, they are from Jan. 31, 2024, to Jan. 31, 2025, preliminary, and subject to change. Weakest link data as of Jan. 31, 2025. Other developed includes Australia, Canada, Japan, and New Zealand. Default counts may include confidentially rated issuers. Sources: S&P Global Ratings Credit Research, S&P Global Market Intelligence's CreditPro. |
Table 2
10 companies defaulted globally year to date | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Date | Parent company | Country | Subsector | To | From | Reason | ||||||||
Jan. 8, 2025 |
City Brewing Co. LLC |
U.S. | Consumer products | SD | B- | Missed payments | ||||||||
Jan. 16, 2025 |
Blue Ribbon LLC |
U.S. | Consumer products | SD | CCC- | Distressed exchange | ||||||||
Jan. 16, 2025 |
JOANN Inc. |
U.S. | Retail and restaurants | D | CCC | Bankruptcy | ||||||||
Jan. 16, 2025 |
Packers Holdings LLC |
U.S. | Consumer products | SD | CCC- | Distressed exchange | ||||||||
Jan. 17, 2025 |
Aimbridge Acquisition Co. Inc. |
U.S. | Media and entertainment | D | CCC | Missed payments | ||||||||
Jan. 17, 2025 |
Trinseo PLC |
Ireland | Chemicals, packaging, and environmental services | SD | CC | Distressed exchange | ||||||||
Jan. 23, 2025 |
Physician Partners LLC |
U.S. | Health care | SD | CCC+ | Distressed exchange | ||||||||
Jan. 28, 2025 |
Intrum AB (publ) |
Sweden | Finance companies | SD | CC | Missed payments | ||||||||
Jan. 29, 2025 |
Azul S.A. |
Brazil | Transportation | SD | CC | Distressed exchange | ||||||||
Jan. 31, 2025 |
MultiPlan Corp. |
U.S. | Health care | SD | CC | Distressed exchange | ||||||||
Data as of Jan. 31, 2025. NR--Not rated. SD--Selective default. Sources: S&P Global Ratings Credit Research & Insights, S&P Global Market Intelligence’s CreditPro. |
Related Research
- MultiPlan Corp. And MPH Acquisition Holdings LLC Issuer Credit Rating Lowered To 'SD' From 'CC' On Debt Restructuring, Jan. 31, 2025
- Brazilian Airline Azul S.A. Downgraded To 'SD' Following Distressed Debt Exchange, Jan. 29, 2025
- Intrum Downgraded To 'SD' After Missing Interest Payments; Rated Notes Lowered To 'D', Jan. 28, 2025
- Physician Partners LLC Downgraded To 'SD' On Completed Debt Exchange, Jan. 23, 2025
- Aimbridge Acquisition Co. Inc. Downgraded To 'D' From 'CCC' On Planned Interest and Principle Payment Extensions In Executed Restructuring Plan, Jan. 17, 2025
- Trinseo PLC Ratings Lowered To 'SD' On Completion of Distressed Exchange, Jan. 17, 2025
- Blue Ribbon LLC Downgraded To ‘SD’ From ‘CCC-’ On Priming Term Loan Transaction Partly Funding Brewer Transition, Jan. 16, 2025
- Joann Inc. Downgraded To 'D' From 'CCC' On Chapter 11 Bankruptcy Filing, Jan. 16, 2025
- Packers Holdings LLC Downgraded To 'SD' From 'CCC-' Following Below-Par Debt Transaction, Jan. 16, 2025
- Industry Credit Outlook: Consumer Products, Jan. 14, 2025
- Industry Credit Outlook: Health Care, Jan. 14, 2025
- City Brewing Co. LLC Downgraded To 'SD' From 'B-' On Missed Principal Payments; New Priming Bridge Loan Rated 'B-', Jan. 8, 2025
- Global Speculative-Grade Corporate Default Rate To Decline To 3.5% By September 2025, Dec. 12, 2024
- Global Credit Outlook 2025: Promise And Peril, Dec.4, 2024
- European Speculative-Grade Default Rate Should Fall To 4.25% By September 2025, Nov. 18, 2024
- U.S. Speculative-Grade Corporate Default Rate To Fall Further To 3.25% By September 2025, Nov. 15, 2024
Default Studies
More analysis and statistics are available in our annual default studies, published on RatingsDirect:
Corporate (financial and non-financial)
- 2023 Annual Global Financial Services Default And Rating Transition Study
- 2023 Annual Global Corporate Default And Rating Transition Study
- 2023 Annual U.S. Corporate Default And Rating Transition Study
- 2023 United Kingdom Corporate Default And Rating Transition Study
- 2023 Annual European Corporate Default And Rating Transition Study
- 2023 Annual Japanese Corporate Default And Rating Transition Study
- 2023 Annual Asia Corporate Default And Rating Transition Study
- 2023 Annual Taiwan Ratings Corp. Corporate Default And Rating Transition Study
- 2023 Annual Emerging And Frontier Markets Corporate Default And Rating Transition Study
- 2023 Annual Greater China Corporate Default And Rating Transition Study
- 2023 Short-Term Corporate Default And Rating Transition Study
Structured finance
- 2023 Annual Global Structured Finance Default And Rating Transition Study
- 2023 Annual Japanese Structured Finance Default And Rating Transition Study
- 2023 Annual European Structured Finance Default And Rating Transition Study
- 2023 Annual Taiwan Ratings Corp. Structured Finance Default And Rating Transition Study
- 2023 Annual Mexican Structured Finance Default And Rating Transition Study
- 2023 Annual Global Leveraged Loan CLO Default And Rating Transition Study
Public finance
- 2023 Annual U.S. Public Finance Default And Rating Transition Study
- 2023 Annual International Public Finance Default And Rating Transition Study
- 2023 Annual Mexican National Scale Corporate And Public Finance Default And Rating Transition Study
Sovereign and international public finance
This report does not constitute a rating action.
Credit Market Research: | Ekaterina Tolstova, Frankfurt +49 173 6591385; ekaterina.tolstova@spglobal.com |
Nicole Serino, New York + 1 (212) 438 1396; nicole.serino@spglobal.com | |
Research Contributor: | Lyndon Fernandes, CRISIL Global Analytical Center, an S&P affiliate, Mumbai |
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