Key Takeaways
- The number of year-to-date global corporate defaults rose by nine to 26 in March 2025, but the year-to-date count is below the 37 recorded for the same period in 2024 and the five-year average of 29.
- Re-defaulters accounted for five defaults in March or 56% of monthly defaults. The share of re-defaulters reached 42% in first-quarter 2025, the highest level since first-quarter 2019 when it was at 48%.
- Market volatility and increasing investor risk aversion due to rising trade tensions pose the most imminent risks to credit in this environment. While we have not updated our base-case default projections yet, defaults could trend closer to our downside scenario if tariffs remain elevated.
S&P Global Ratings' 2025 global corporate default tally stands at 26 after the following nine defaults in March:
- Canada-based diamond company Mountain Province Diamonds Inc.
- Netherlands-based manufacturer of automotive lightening products Bright Bidco B.V.
- U.K.-based cloud and on-site business communications and collaboration software provider Mitel Networks (International) Ltd.
- U.S.-based designer and manufacturer of rigid plastic packaging Poseidon Investment Intermediate L.P.
- U.S.-based pharmaceutical company Alvogen Pharma US Inc.
- U.S.-based cloud-based software solutions provider for higher educational institutions Astra Acquisition Corp.
- U.S.-based e-commerce rug retailer Runner Buyer Inc.
- U.S.-based industrial light staffing solutions provider EmployBridge Holding Co.
- U.S-based restaurant group HoA Restaurant Group LLC
Corporate Defaults Dropped Below The Five-Year Average
Corporate defaults increased to nine in March, up from seven in February. The default count has reached 26 year to date, compared with 37 in first-quarter 2024. For the first time since first-quarter 2022, the total is below the five-year average of 29 (see chart 1).
The slowdown in the pace of defaults is evident across regions. Compared with first-quarter 2024, defaults declined to 16 from 22 in the U.S., to eight from 11 in Europe, and to one from three in emerging markets. Other developed regions recorded their first default since April 2024, meaning the total number of defaults in this region has not changed over the past 12 months.
Chart 1
Global Default Rates Could Increase
Global and regional default rates have continued their downward trend (see chart 2 and table 1).
However, trade tensions are threatening hitherto favorable credit conditions for most borrowers. Market volatility and increasing investor risk aversion pose the most imminent risks to credit in the current environment. Borrowers must pay up for financing and, worse, some lower-rated borrowers could be shut out of the capital markets.
While we have not updated our base-case default projections yet, defaults could trend closer to our downside scenario if tariffs remain elevated. Our current downside scenario includes default rates of 6.00% in the U.S. and 6.25% in Europe by December 2025, compared with our baseline forecasts of 3.50% and 3.75%, respectively.
Chart 2
Table 1
| The U.S. estimated default rate in March 2025 was 4.59% | ||||||
|---|---|---|---|---|---|---|
| Region | 12-month trailing speculative-grade default rate (%) | Weakest links | ||||
| U.S. | 4.59 | 156 | ||||
| Emerging markets | 0.94 | 11 | ||||
| Europe | 4.11 | 48 | ||||
| Other developed | 1.54 | 10 | ||||
| Global | 3.54 | 225 | ||||
| Trailing 12-month speculative-grade default rates are for the period from Feb. 29, 2024, to Feb. 28, 2025, except for the U.S. and Europe. For these two regions, they are for the period from March 31, 2024, to March 31, 2025, preliminary, and subject to change. Weakest link data as of Feb. 28, 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. | ||||||
Consumer-Facing Sectors Remain Most Vulnerable To Defaults
Similarly to 2024, the three sectors that accounted for most defaults (46%) in first-quarter 2025 include consumer products (5), media and entertainment (4), and health care (3) (see chart 3). Four of the nine defaults in March occurred in the high technology sector and the retail and restaurant sector. Despite declining interest rates, issuers in these sectors still face higher refinancing costs on average.
Financing conditions remain challenging for companies with highly leveraged structures and weak operating metrics because they constrain these companies' access to capital markets in the current environment. Additionally, consumer-sensitive sectors suffered tepid consumer demand.
Credit strain on borrowers could intensify, given tight liquidity and higher borrowing costs. This raises the likelihood of more defaults.
Chart 3
Distressed Exchanges Continue To Dominate
Distressed exchanges remain the primary reason for defaults and accounted for 62% in first-quarter 2025 (see chart 4). That said, the share of distressed exchanges dropped to 44% in March, compared with close to 86% in February. Year to date, distressed exchanges account for 16 defaults, compared with 20 in the same period last year.
Notably, all distressed exchanges in March occurred in North America, with three in the U.S. and one in Canada. Missed payments resulted in three defaults, while bankruptcy procedures led to two defaults.
Re-defaulters--issuers defaulting more than once--accounted for five defaults in March or 56% of monthly defaults. We observe that highly leveraged companies with fundamental operating and liquidity issues will likely redefault, even though a revised capital structure could provide some reprieve. With 42%, the share of re-defaulters in first-quarter 2025 has reached its highest level since first-quarter 2019 when it was at 48% (see chart 4).
Chart 4
Defaulted Debt Has Declined To Its Lowest Level Since 2023
Total defaulted debt decreased to $5.5 billion in March, from $8.9 billion in February (see chart 5). This is the lowest monthly volume since January 2023.
Notably, 68% of defaulted debt in March resulted from two defaults in the high technology sector and the media and entertainment sector:
- Mitel Networks (International) Ltd. filed for Chapter 11 bankruptcy protection on March 10, 2025, due to persistently weak operating performance, including a decline in revenues and insufficient liquidity to cover debt service obligations and investment needs.
- EmployBridge Holding Co. completed a distressed exchange transaction, which S&P Global Ratings considers tantamount to a default as investors will receive less than originally promised.
In the U.S., cumulative defaulted debt reached $13.1 billion in first-quarter 2025, down 61% from $33.2 billion in the same period last year (see chart 6). The spike in first-quarter 2024 primarily resulted from significant defaults of telecommunications companies in the U.S.
Conversely, cumulative defaulted debt in Europe increased to $9.42 billion over the first three months of 2025, surpassing year-to-date figures in 2023 and 2024.
Chart 5
Chart 6
Table 2
| The global corporate default tally stands at 26 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 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/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 Inc. |
U.S. | Health care | SD | CC | Distressed exchange | ||||||||
| Feb. 4, 2025 |
Selecta Group B.V. |
Netherlands | Consumer products | SD | CCC- | Missed payments | ||||||||
| Feb. 20, 2025 |
Altisource Portfolio Solutions S.A. |
Luxembourg | Finance companies | SD | CC | Distressed exchange | ||||||||
| Feb. 20, 2025 |
Hurtigruten Newco AS |
Norway | Media and entertainment | D | CC | Distressed exchange | ||||||||
| Feb. 21, 2025 |
Confluence Technologies, Inc. |
U.S. | Media and entertainment | SD | CCC+ | Distressed exchange | ||||||||
| Feb. 21, 2025 |
Stitch Acquisition Corp. |
U.S. | Consumer products | SD | CCC | Distressed exchange | ||||||||
| Feb. 24, 2025 |
OT Merger Corp. |
U.S. | Capital goods | SD | CCC+ | Distressed exchange | ||||||||
| Feb. 25, 2025 |
Thames Water Utilities Ltd. |
U.K. | Utilities | D | CC | Distressed exchange | ||||||||
| March 3, 2025 |
Bright Bidco B.V. |
Netherlands | Automotive | SD | CCC+ | Missed payments | ||||||||
| March 3, 2025 |
Poseidon Investment Intermediate L.P. |
U.S. | Chemicals, packaging, and environmental services | SD | CCC | Distressed exchange | ||||||||
| March 7, 2025 |
Alvogen Pharma US Inc. |
U.S. | Health care | SD | CCC+ | Distressed exchange | ||||||||
| March 10, 2025 |
Astra Acquisition Corp. |
U.S. | High technology | SD | CCC | Missed payments | ||||||||
| March 11, 2025 |
Runner Buyer Inc. |
U.S. | Retail/restaurants | D | CCC | Missed payments | ||||||||
| March 12, 2025 |
Mitel Networks (International) Ltd. |
U.K. | High technology | D | CCC | Bankruptcy | ||||||||
| March 14, 2025 |
EmployBridge Holding Co. |
U.S. | Media and entertainment | SD | CC | Distressed exchange | ||||||||
| March 21, 2025 |
Mountain Province Diamonds Inc. |
Canada | Metals, mining, and steel | SD | CCC | Distressed exchange | ||||||||
| March 31, 2025 |
HoA Restaurant Group LLC |
U.S. | Retail/restaurants | D | NR | Bankruptcy | ||||||||
| Data as of March 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
- How Much Will Credit Conditions Deteriorate As Global Trade Tensions Heat Up? April 3, 2025
- Global Credit Conditions Q2 2025, March 31, 2025
- Mountain Province Diamonds Inc. Downgraded To 'SD' From 'CCC' On Debt Restructuring; Second-Lien Notes Rating Cut To 'D', March 21, 2025
- Tariffs Cloud Corporate Earnings, March 19, 2025
- EmployBridge Holding Co. Downgraded To 'SD' From 'CC' On Completed Distressed Exchange, March 14, 2025
- Europe Leads February Defaults, March 13, 2025
- Mitel Networks (International) Ltd. Downgraded To 'D' From ‘CCC’ On Chapter 11 Bankruptcy Filing, March 12, 2025
- Runner Buyer Inc. Downgraded To 'D' From 'CCC' On Missed Interest Payment, March 12, 2025
- Astra Acquisition Corp. Downgraded To 'SD' From 'CCC'; Issue Level Ratings Unchanged, March 11, 2025
- Alvogen Pharma US Inc. Downgraded To 'SD' From 'CCC+' On Distressed Debt Exchange, March 8, 2025
- Poseidon Investment Intermediate L.P. Downgraded To 'SD' From 'CCC' On Debt Repurchase, March 4, 2025
- Bright Bidco B.V. Downgraded To 'SD' (Selective Default) And Exit Term Loan To 'D' (Default) On Deferred Cash Interest Payment, March 3, 2025
- The European Speculative-Grade Default Rate Could Level Out At 3.75% By December 2025, Feb. 21, 2025
- The U.S. Speculative-Grade Corporate Default Rate Could Fall To 3.5% By December 2025, Feb. 20, 2025
- Consumer Products And Health Care Led Defaults In January, Feb. 13, 2025
- Industry Credit Outlook 2025: Technology, Jan. 14, 2025
- Industry Credit Outlook 2025: Retail and Restaurants, Jan. 14, 2025
- Industry Credit Outlook 2025: Media and Entertainment, Jan. 14, 2025
- Industry Credit Outlook 2025: Consumer Products, Jan. 14, 2025
Default Studies
More analyses 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
- 2024 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
- 2024 Annual Japanese Corporate And Public Finance 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
- 2024 Annual Global Structured Finance Default And Rating Transition Study 2024 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: | Vaishali Singh, CRISIL Global Analytical Center, an S&P affiliate, Mumbai |
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