U.S. Defaults Increased Marginally In 2024

The number of rated U.S. defaults ticked up to 86 in 2024 from 82 the previous year as stubborn inflation and higher-for-longer interest rates strained cash flows for some issuers. The consumer services sector led defaults (26), followed by health care/chemicals (16), aerospace/automotive/capital goods/metal (14), and leisure time/media (14). Together, these four sectors accounted for 72% of U.S. corporate defaults in 2024.

Meanwhile, downgrades decreased from the previous year. Also, upgrades outpaced downgrades, reversing the trend from 2023, when credit quality deteriorated, particularly among speculative-grade-rated issuers. The U.S. speculative-grade default rate rose to 5.13% in 2024--the highest since 2020--from 4.48% the previous year (see chart 1 and table 1).

The data included in this study is as of Jan. 1, 2025.

Table 1

U.S. corporate default summary
Year	Total defaults*	Investment-grade defaults	Speculative-grade defaults	Default rate (%)	Investment-grade default rate (%)	Speculative-grade default rate (%)	Total debt defaulting (bil. $)
2001	173	6	133	4.53	0.33	10.53	100.91
2002	134	10	82	3.17	0.56	7.24	188.14
2003	89	0	65	2.32	0.00	5.59	42.68
2004	45	1	29	1.08	0.06	2.44	18.68
2005	33	1	26	0.95	0.06	2.02	42.04
2006	22	0	19	0.65	0.00	1.37	6.97
2007	18	0	15	0.50	0.00	1.02	7.02
2008	95	11	66	2.55	0.74	4.29	334.34
2009	195	5	166	5.98	0.34	11.78	516.08
2010	58	0	45	1.68	0.00	3.46	79.45
2011	39	1	30	1.12	0.07	2.15	74.30
2012	46	0	39	1.36	0.00	2.65	39.00
2013	45	0	34	1.15	0.00	2.19	64.85
2014	33	0	27	0.87	0.00	1.61	81.98
2015	66	0	52	1.58	0.00	2.85	85.90
2016	106	0	92	2.84	0.00	5.20	166.77
2017	64	0	54	1.70	0.00	3.09	70.70
2018	47	0	43	1.35	0.00	2.42	101.55
2019	78	2	59	1.85	0.14	3.12	147.88
2020	145	0	124	3.81	0.00	6.66	222.84
2021	40	0	29	0.89	0.00	1.54	52.68
2022	37	0	32	0.97	0.00	1.66	56.91
2023	96	2	80	2.59	0.14	4.48	146.49
2024	97	0	86	2.82	0.00	5.13	211.72
*Total defaults column includes companies that were no longer rated at the time of default. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

For the purposes of this study, we consider issuers that reemerge from default--including after a distressed exchange--to be new entities and consider the ratings on these entities to be initial ratings. We make our best effort to capture these defaults in the database, and we include them in the annual default rate calculations if the entity was rated by Jan. 1 of the year it defaulted.

However, if S&P Global Ratings withdrew the rating before Jan. 1 of the year the issuer defaulted, we do not include the issuer in the default rate calculation for that year.

Including issuers that were confidentially rated or not rated at the beginning of the year, 97 U.S. corporate issuers defaulted in 2024. Of these, 86 were publicly rated at the start of the year, five were confidentially rated, and six were not rated when the year began. Five of the defaulted issuers received new initial ratings following an earlier default in 2024, and one was newly rated and defaulted in 2024 (see table 2).

Our study of corporate defaults in the U.S. region (which includes the tax havens Bermuda and the Cayman Islands) identified a clear correlation between low ratings and the probability of default. The one-year U.S. Gini ratio (a measure of the rank-ordering power of ratings over a given time horizon) decreased to 86.2% in 2024 from 89.4% in 2023. It remained higher than the 80.7% long-term weighted average one-year Gini ratio for U.S. corporate ratings going back to 1981.

The Gini ratio is a measure of the rank-ordering power of ratings over a given time horizon. High Gini ratios reflect a high proportion of the lowest-rated issuers among defaulters in a given period.

This study includes industrials, utilities, financial institutions (including banks, brokerages, asset managers, and other financial entities), and insurance companies from the U.S. region.

We calculated default and transition rates based on the number of issuers in the sample period. The weighted average default rates in this study use the number of issuers at the beginning of each year as the basis for each year's weight (see Appendix 1 for terms and definitions).

The data we present in this study, unless labeled otherwise, refers to only public and confidential issuer credit ratings on nonfinancial and financial issuers and excludes credit estimates.

Table 2

2024 U.S. region publicly rated corporate defaults*
Company name	Reason for default	Industry	Debt amount (mil. $)	Default date	Rating one year prior to default	Rating three years prior to default	First rating	Date of first rating
Resolute Investment Managers Inc.	Distressed exchange	Financial institutions	991.00	1/2/2024	B	B+	B+	6/12/2015
AMT TopCo LLC	Missed interest	Health care/chemicals	320.00	1/5/2024	B-	-	B-	3/8/2021
TMK Hawk Parent Corp.	Distressed exchange	Consumer/service sector	936.10	1/17/2024	CCC	CCC	CCC	10/13/2020
KNS Holdco LLC†	Distressed exchange	Consumer/service sector	662.00	1/18/2024	B	-	B	3/30/2021
System1 Inc.	Distressed exchange	Leisure time/media	400.00	1/19/2024	B	-	B	2/7/2022
New Trojan Parent Inc.	Chapter 11	Consumer/service sector	815.00	1/24/2024	B-	B	B	1/11/2021
AMC Entertainment Holdings Inc.†	Distressed exchange	Leisure time/media	6,230.00	1/31/2024	-	-	CCC+	2/22/2023
Cano Health Inc.	Chapter 11	Health care/chemicals	1,564.00	2/5/2024	B-	-	B	6/18/2021
Astro Intermediate Holding II Corp.	Missed principal/interest	Consumer/service sector	450.00	2/6/2024	B-	-	B-	9/28/2021
Pluto Acquisition I Inc.	Distressed exchange	Health care/chemicals	913.36	2/8/2024	B-	B-	B-	5/31/2019
GoTo Group Inc.	Distressed exchange	High tech/computers/office equipment	3,250.00	2/14/2024	B	B-	B-	8/3/2020
Enviva Inc.	Missed interest	Energy and natural resources	750.00	2/16/2024	BB-	BB-	B+	10/17/2016
Range Parent Inc.	Chapter 11	Aerospace/automotive/capital goods/metal	727.00	2/16/2024	-	-	CCC-	1/12/2024
Hornblower HoldCo LLC	Chapter 11	Leisure time/media	715.00	2/21/2024	CCC	CCC	B	3/9/2018
Tribe Buyer LLC	Missed principal	Leisure time/media	400.00	2/21/2024	CCC+	CCC+	B	1/25/2017
Apex Tool Group LLC	Distressed exchange	Forest and building products / homebuilders	1,376.56	2/26/2024	B-	CCC+	B	3/22/2013
Radiology Partners Holdings LLC	Distressed exchange	Health care/chemicals	3,885.00	2/26/2024	B-	B-	B	6/12/2018
Curo Group Holdings Corp.	Missed interest	Financial institutions	1,000.00	3/5/2024	-	-	CCC+	5/23/2023
Joann Inc.	Chapter 11	Consumer/service sector	675.00	3/19/2024	CCC+	B-	B	10/9/2012
Lumen Technologies Inc.†	Distressed exchange	Telecommunications	29,772.23	3/22/2024	B	BB	BB-	12/31/1980
Atlas Midco Inc.	Distressed exchange	High tech/computers/office equipment	935.00	3/29/2024	B-	-	B-	4/19/2021
Aventiv Technologies LLC	Distressed exchange	Telecommunications	1,889.50	3/29/2024	CCC+	B-	B-	1/17/2020
Rackspace Technology Global Inc.	Distressed exchange	High tech/computers/office equipment	3,300.00	4/3/2024	-	-	CCC+	8/18/2023
Never Slip Topco Inc.	Chapter 11	Consumer/service sector	283.00	4/4/2024	CCC+	CCC+	CCC+	8/5/2020
Casa Systems Inc.	Chapter 11	High tech/computers/office equipment	218.85	4/5/2024	CCC	B-	BB-	11/30/2016
ConvergeOne Holdings Inc.	Chapter 11	Consumer/service sector	1,385.00	4/5/2024	B-	B-	B	5/29/2014
99 cents only stores LLC	Chapter 11	Consumer/service sector	350.00	4/10/2024	CCC	-	CCC	4/4/2023
Express Inc.	Chapter 11	Consumer/service sector	-	4/22/2024	NR	NR	B	6/19/2007
City Brewing Co. LLC	Distressed exchange	Consumer/service sector	850.00	4/23/2024	CCC	B+	B+	3/23/2021
EyeCare Partners LLC	Distressed exchange	Health care/chemicals	2,400.00	4/24/2024	B-	B	B	1/22/2020
Digital Media Solutions Inc.†	Distressed exchange	Leisure time/media	275.00	4/29/2024	-	-	CCC	8/30/2023
Cumulus Media Inc.	Distressed exchange	Leisure time/media	1,025.00	5/6/2024	B-	B-	B-	5/30/2018
Steward Health Care System LLC	Chapter 11	Health care/chemicals	-	5/6/2024	NR	NR	B	3/28/2013
Global Medical Response Inc.	Distressed exchange	Health care/chemicals	4,474.10	5/20/2024	CCC+	B	B	10/6/2010
Zachry Holdings Inc.	Chapter 11	Aerospace/automotive/capital goods/metal	-	5/21/2024	NR	NR	BB-	3/12/2013
New Insight Holdings Inc.	Chapter 11	Leisure time/media	-	5/22/2024	CCC+	B-	B	11/2/2017
Astra Acquisition Corp.	Distressed exchange	High tech/computers/office equipment	1,440.00	5/23/2024	B-	B-	B-	2/7/2020
Maverick Gaming LLC	Distressed exchange	Leisure time/media	350.00	5/28/2024	-	-	CCC	8/31/2023
AMC Entertainment Holdings Inc.‡	Distressed exchange	Leisure time/media	6,005.00	5/30/2024	-	-	CCC+	2/8/2024
Sound Inpatient Physicians Inc.	Distressed exchange	Health care/chemicals	1,050.00	6/3/2024	B-	B	B	5/5/2021
Valcour Packaging LLC	Distressed exchange	Aerospace/automotive/capital goods/metal	580.00	6/11/2024	CCC+	-	B-	9/20/2021
Vyaire Medical Inc.	Chapter 11	Health care/chemicals	360.00	6/12/2024	CCC	CCC+	B-	3/19/2018
Premier Dental Services Inc.	Distressed exchange	Health care/chemicals	600.00	6/18/2024	B-	B-	B	10/18/2012
Office Properties Income Trust	Distressed exchange	Real estate	2,150.00	6/21/2024	BB	BBB-	BBB-	9/21/2010
Rodan & Fields LLC	Missed principal/interest	Consumer/service sector	549.60	7/18/2024	CCC	-	CCC	5/16/2023
AMC Entertainment Holdings Inc.‡	Distressed exchange	Leisure time/media	6,005.00	7/23/2024	-	-	CCC+	6/5/2024
Conn's Inc.	Chapter 11	Consumer/service sector	-	7/23/2024	NR	B	B	6/23/2014
Stitch Acquisition Corp.	Distressed exchange	Consumer/service sector	370.00	7/24/2024	CCC	B	B	7/7/2021
Quincy Health LLC	Distressed exchange	Health care/chemicals	732.00	7/29/2024	-	-	CCC-	12/14/2023
Community Health Systems Inc.	Distressed exchange	Health care/chemicals	12,145.39	8/7/2024	-	-	CCC+	12/18/2023
Del Monte Foods Inc.	Distressed exchange	Consumer/service sector	725.00	8/8/2024	B	B-	CCC+	7/2/2018
HDT Holdco Inc.	Distressed exchange	Aerospace/automotive/capital goods/metal	320.00	8/12/2024	CCC	B	B	6/10/2021
Avon Products Inc.	Chapter 11	Consumer/service sector	250.00	8/13/2024	BB-	BB-	A-	11/1/1982
Connect Holding II LLC	Distressed exchange	Telecommunications	3,600.00	8/15/2024	B-	-	B-	9/19/2022
SIRVA Inc.	Distressed exchange	Consumer/service sector	610.00	8/22/2024	B-	CCC+	B	10/26/2016
Magenta Buyer LLC	Distressed exchange	High tech/computers/office equipment	4,465.00	8/26/2024	B-	B	B	4/16/2021
PECF USS Intermediate Holding III Corp.	Distressed exchange	Forest and building products / homebuilders	2,650.00	8/28/2024	CCC+	-	B-	10/26/2021
Big Lots Inc.	Chapter 11	Consumer/service sector	-	9/9/2024	NR	NR	BBB	10/1/1997
American Rock Salt Co. LLC	Missed interest	Energy and natural resources	600.00	9/10/2024	B-	B	B	2/24/2004
Wheel Pros Inc.	Chapter 11	Aerospace/automotive/capital goods/metal	3,061.55	9/10/2024	-	-	CCC+	9/27/2023
Digital Media Solutions Inc.‡	Chapter 11	Leisure time/media	363.00	9/12/2024	-	-	CCC	5/2/2024
Poseidon Investment Intermediate L.P.	Distressed exchange	Aerospace/automotive/capital goods/metal	3,209.00	9/16/2024	-	-	CCC+	10/23/2023
Tosca Services LLC	Distressed exchange	Aerospace/automotive/capital goods/metal	626.50	9/24/2024	CCC+	B	B	2/20/2020
Vertex Energy Inc.	Chapter 11	Energy and natural resources	-	9/26/2024	B	-	B	7/5/2022
ASP Unifrax Holdings Inc.	Distressed exchange	Aerospace/automotive/capital goods/metal	2,550.00	10/2/2024	CCC+	B-	B-	10/16/2018
Lumen Technologies Inc.‡	Distressed exchange	Telecommunications	38,733.23	10/2/2024	-	-	CCC+	4/4/2024
New Constellis Borrower LLC	Distressed exchange	Aerospace/automotive/capital goods/metal	260.00	10/2/2024	CCC+	CCC+	B-	5/6/2020
LifeScan Global Corp.	Missed principal/interest	Health care/chemicals	1,705.15	10/7/2024	CCC+	-	CCC+	5/30/2023
Accuride Corp.	Chapter 11	Aerospace/automotive/capital goods/metal	363.06	10/10/2024	CCC+	CCC+	B	7/21/2010
CareerBuilder LLC	Distressed exchange	Leisure time/media	415.00	10/10/2024	CCC-	-	CCC-	5/31/2023
Reception Purchaser LLC	Distressed exchange	Transportation	149.00	10/14/2024	B	-	B	4/20/2022
WellPath Holdings Inc.	Missed principal/interest	Health care/chemicals	610.00	10/14/2024	CCC+	B-	B-	9/5/2018
WideOpenWest Finance LLC	Distressed exchange	Telecommunications	980.00	10/18/2024	BB-	B	B	10/3/2006
American Tire Distributors Inc.	Chapter 11	Aerospace/automotive/capital goods/metal	1,000.00	10/24/2024	B-	B-	B-	1/14/2019
Exactech Inc.	Chapter 11	Health care/chemicals	320.00	11/1/2024	CCC	CCC+	B-	1/25/2018
CMG Media Corp.	Distressed exchange	Leisure time/media	3,494.00	11/4/2024	B	B	B	12/2/2019
Franchise Group Inc.	Chapter 11	Consumer/service sector	1,425.00	11/6/2024	B	B+	B+	10/27/2020
Sensience, Inc.	Distressed exchange	Aerospace/automotive/capital goods/metal	535.00	11/12/2024	CCC	-	B-	5/2/2022
Dish Network Corp.	Distressed exchange	Telecommunications	8,500.00	11/14/2024	CCC+	B-	B-	5/12/1994
Spirit Airlines Inc.	Chapter 11	Transportation	-	11/18/2024	B	B	BB-	7/21/2015
Dodge Construction Network LLC	Distressed exchange	Consumer/service sector	625.00	11/21/2024	B-	-	B-	1/25/2022
H-Food Holdings LLC	Chapter 11	Consumer/service sector	2,624.50	11/22/2024	CCC+	B-	B	4/15/2014
LaserShip, Inc.	Distressed exchange	Transportation	880.00	11/22/2024	CCC+	B-	B-	10/6/2021
FinThrive Software Intermediate Holdings Inc.	Distressed exchange	Health care/chemicals	1,900.00	11/26/2024	CCC	-	CCC	11/21/2023
Congruex Group LLC	Missed interest	Aerospace/automotive/capital goods/metal	545.00	12/2/2024	B	-	B	4/7/2022
Empire Today LLC	Distressed exchange	Consumer/service sector	595.00	12/11/2024	CCC+	B	B	2/16/2011
Veritas Holdings Ltd.§	Distressed exchange	High tech/computers/office equipment	3,075.00	12/18/2024	CCC+	B-	B-	2/14/2019
KNS Holdco LLC‡	Distressed exchange	Consumer/service sector	662.00	12/19/2024	-	-	CCC+	1/25/2024
SWF Holdings I Corp.	Distressed exchange	Consumer/service sector	2,375.00	12/19/2024	CCC+	B-	B-	9/8/2021
GrafTech International Ltd.	Distressed exchange	Aerospace/automotive/capital goods/metal	3,200.00	12/23/2024	B+	BB-	BB-	7/20/1995
iHeartCommunications Inc.	Distressed exchange	Leisure time/media	6,051.00	12/23/2024	B	-	B+	2/28/2022
Container Store Group Inc. (The)	Chapter 11	Consumer/service sector	200.00	12/24/2024	B	B	B	11/15/2013
*This total does not match table 1 because it excludes confidentially rated defaults. §Bermuda-based issuer. †Represents the first occurrence of an issuer default. ‡Initial ratings for these companies are those immediately following a prior default in 2024. Initial ratings, or those as of Dec. 31, 1980. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Consumer-Reliant Sectors Led U.S. Defaults Once Again In 2024

The consumer/services and health care and chemicals sectors had the most defaults in the U.S., with 26 and 16, respectively, because of consumer spending challenged by shifting demand, higher interest rates, and the cumulative effects of inflation. This marks the eighth consecutive year that the consumer/services sector led the U.S. default tally.

The top five sectors with the highest default rates have now exceeded 4.0% for the second consecutive year. U.S. corporate sectors exhibited a significant shift in 2024: The telecommunications sector overtook leisure as the top spot at 7.58%, while leisure fell to fifth following a 2.8% year-over-year decrease. Health care moved up to second from fourth following a 1.6% increase in its 2024 default rate. Meanwhile, the forest products and building materials sector saw the highest year-over-year increase in its default rate, rising to 3.77% in 2024 after recording no defaults the prior year.

The telecommunications sector also had the highest cumulative amount of defaulted debt, totaling $83.5 billion at the beginning of 2024. Most of the telecommunication sector's debt was due to the distressed exchange of U.S.-based Lumen Technologies Inc., a company that defaulted twice in 2024, with total rated debt of $68.5 billion. The remaining telecommunication defaults were first-time defaulters.

Nine nonfinancial industries had a higher default rate in 2024 than in 2023, and 10 of them had a default rate above their long-term averages (see chart 2).

In most periods, nonfinancial issuers have higher cumulative default rates than financial issuers, which reflects the higher proportion of speculative-grade issuers in U.S. nonfinancial sectors (table 3).

Table 3

Cumulative U.S. corporate default rates by sector (%)
	--All financials--			--All nonfinancials--
Year	One-year	Three-year	10-year	One-year	Three-year	10-year
1981	0.00	N/A	N/A	0.17	N/A	N/A
1982	1.60	N/A	N/A	1.21	N/A	N/A
1983	1.32	2.46	N/A	0.74	2.17	N/A
1984	0.00	2.40	N/A	1.10	2.91	N/A
1985	0.50	1.97	N/A	1.29	2.62	N/A
1986	0.00	1.14	N/A	2.20	4.48	N/A
1987	0.00	0.99	N/A	1.22	4.31	N/A
1988	1.31	1.94	N/A	1.51	4.20	N/A
1989	1.93	3.70	N/A	1.67	4.12	N/A
1990	0.90	4.44	6.56	3.47	5.73	8.36
1991	2.19	5.30	8.80	3.94	8.97	9.94
1992	1.82	4.95	8.55	1.71	8.88	10.39
1993	0.38	4.60	7.95	0.77	6.20	11.09
1994	0.00	2.23	9.41	0.97	2.83	10.97
1995	0.48	0.94	7.12	1.57	2.65	10.46
1996	0.00	0.53	9.12	0.87	3.23	11.83
1997	0.28	0.80	9.40	0.97	3.07	12.48
1998	0.38	0.30	8.19	1.54	3.01	12.94
1999	0.63	0.85	6.31	2.87	4.35	12.56
2000	1.12	2.13	6.13	3.97	7.44	9.85
2001	0.76	2.53	4.05	5.84	11.53	7.59
2002	0.52	2.74	2.83	4.14	12.90	9.06
2003	0.53	2.03	3.17	2.98	12.72	11.31
2004	0.40	1.55	3.50	1.33	8.65	12.10
2005	0.14	0.92	2.99	1.23	5.37	12.33
2006	0.13	0.53	3.39	0.83	3.26	14.19
2007	0.25	0.41	4.63	0.59	2.70	17.23
2008	1.99	2.53	5.70	2.76	3.97	19.97
2009	1.57	3.74	6.11	7.59	9.24	21.53
2010	0.70	3.98	5.08	2.04	11.30	19.70
2011	0.42	2.61	4.64	1.36	10.51	15.33
2012	0.42	1.39	4.36	1.68	4.80	12.45
2013	0.14	0.98	4.27	1.48	3.98	10.96
2014	0.00	0.56	4.54	1.14	3.72	11.63
2015	0.13	0.42	4.65	2.02	4.11	13.03
2016	1.02	1.23	5.23	3.43	5.56	14.88
2017	0.39	1.43	5.10	2.12	6.73	16.22
2018	0.13	1.27	3.27	1.73	6.57	15.47
2019	0.64	1.03	1.81	2.22	5.16	10.16
2020	0.26	0.92	1.96	4.92	7.49	10.57
2021	0.00	0.90	1.82	1.17	7.53	10.57
2022	0.13	0.39	1.69	1.22	6.77	10.95
2023	0.66	0.78	2.60	3.19	4.39	11.72
2024	0.40	0.92	2.60	3.60	6.30	13.07
Average	0.60	1.84	5.07	2.14	5.87	12.65
Median	0.41	1.33	4.64	1.62	4.98	11.83
Standard deviation	0.61	1.36	2.35	1.50	2.93	3.22
Minimum	0.00	0.30	1.69	0.17	2.17	7.59
Maximum	2.19	5.30	9.41	7.59	12.90	21.53
Note: All financials refer to financial institutions and insurance combined. N/A--Not applicable. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Seven of the 13 industries had more upgrades than downgrades in 2024, in stark contrast to 2023, when only two industries had upgrades outpace downgrades. The insurance industry had the highest net positive rating actions (more issuer upgrades than downgrades or defaults) in 2024 with 25, followed by energy and natural resources (13) and aerospace/automotive/capital goods/metal (12).

Table 4

Rating action comparison
	--2024--			--2023--			--Net positive rating actions (no.)--
Industry	Upgrades	Downgrades	Defaults	Upgrades	Downgrades	Defaults	2024	2023	Difference
Aerospace/automotive/capital goods/metal	43	19	12	26	30	14	12	(18)	30
Consumer/service sector	33	37	22	42	70	22	(26)	(50)	24
Energy and natural resources	26	11	2	35	7	1	13	27	(14)
Financial institutions	16	11	3	18	28	5	2	(15)	17
Forest and building products/homebuilders	16	3	4	11	13	0	9	(2)	11
Health care/chemicals	14	24	15	14	42	12	(25)	(40)	15
High tech/computers/office equipment	14	12	7	9	22	2	(5)	(15)	10
Insurance	32	7	0	9	9	0	25	0	25
Leisure time/media	34	21	11	35	21	19	2	(5)	7
Real estate	7	23	1	10	17	0	(17)	(7)	(10)
Telecommunications	2	8	5	2	11	4	(11)	(13)	2
Transportation	4	4	3	7	5	3	(3)	(1)	(2)
Utility	22	25	1	5	20	0	(4)	(15)	11
Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

All Defaults In 2024 Were Speculative-Grade

All defaults in 2024 occurred at the lowest rating categories, supporting the view that ratings are effective indicators of relative credit risk. The 'CCC'/'C' speculative-grade rating category was the only one to record a 2024 default rate above its long-term average (see table 5).

Table 5

One-year U.S. corporate default rates by rating modifier (%)
	AAA	AA+	AA	AA-	A+	A	A-	BBB+	BBB	BBB-	BB+	BB	BB-	B+	B	B-	CCC/C
1981	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	3.28	0.00	0.00
1982	0.00	0.00	0.00	0.00	0.00	0.34	0.00	0.00	0.71	0.00	0.00	2.86	7.14	2.22	2.33	8.33	21.43
1983	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.41	2.22	0.00	1.64	1.25	10.00	5.26	6.67
1984	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.46	0.00	0.00	1.69	1.56	2.17	3.57	8.33	25.00
1985	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.64	1.56	1.43	2.65	13.11	8.33	15.38
1986	0.00	0.00	0.00	0.00	0.00	0.00	0.78	0.00	0.79	0.00	1.82	1.23	0.00	5.36	12.16	17.50	23.08
1987	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.85	1.35	6.02	6.98	12.28
1988	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	2.33	2.05	4.55	10.00	20.37
1989	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.90	0.83	0.00	0.00	0.00	2.04	0.44	7.86	5.13	31.37
1990	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.76	0.00	1.11	1.41	3.09	4.50	4.95	12.38	22.58	31.82
1991	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.83	0.77	0.00	3.70	1.12	1.05	8.72	16.88	31.43	32.76
1992	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.73	15.87	21.74	31.37
1993	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.98	0.00	1.32	4.26	4.55	14.29
1994	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.90	0.00	1.87	6.85	3.33	17.39
1995	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.74	0.00	1.69	1.25	2.89	7.29	7.89	30.43
1996	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.63	2.49	3.92	4.17	8.70
1997	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.48	0.00	0.00	0.00	0.00	0.47	0.80	5.74	15.91	8.33
1998	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.36	0.00	0.00	0.71	0.46	1.68	6.67	8.20	42.86
1999	0.00	0.00	0.00	0.65	0.00	0.37	0.43	0.00	0.38	0.46	0.85	1.32	0.81	4.29	9.04	15.38	37.50
2000	0.00	0.00	0.00	0.00	0.00	0.38	0.93	0.00	0.38	0.92	0.00	1.27	2.90	6.61	10.31	14.67	42.19
2001	0.00	0.00	0.00	0.00	0.93	0.00	0.00	0.40	0.71	0.45	0.81	1.32	4.24	4.88	18.03	27.27	50.62
2002	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.20	1.03	1.75	1.75	1.16	4.06	2.30	6.96	19.05	34.62
2003	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.92	1.61	0.40	1.03	5.41	13.89	36.11
2004	0.00	0.00	0.00	0.00	0.00	0.44	0.00	0.00	0.00	0.00	0.00	1.18	0.40	0.00	3.45	3.80	20.48
2005	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.31	0.00	0.79	0.00	0.40	1.09	3.37	4.85	11.11
2006	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.85	0.00	0.41	0.52	0.74	0.93	16.22
2007	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.53	0.39	0.00	0.00	0.69	16.90
2008	0.00	0.00	1.16	0.99	0.81	0.48	1.02	0.47	0.78	0.93	2.59	0.62	0.80	3.19	3.23	7.98	31.43
2009	0.00	0.00	0.00	0.00	0.00	0.49	0.00	0.50	0.38	0.88	0.00	1.41	0.92	5.38	10.24	20.81	50.35
2010	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.02	3.30	23.23
2011	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.40	0.00	0.00	0.00	0.69	0.77	6.06	17.24
2012	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.33	1.42	1.89	30.85
2013	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.61	0.61	2.22	29.41
2014	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	2.86	26.25
2015	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.43	0.70	1.94	5.88	30.99
2016	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.44	1.09	2.33	10.37	41.96
2017	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.63	0.00	0.42	0.52	3.40	27.89
2018	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.35	1.37	29.37
2019	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.99	0.00	0.00	0.00	0.38	0.69	3.14	32.09
2020	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.68	0.00	2.99	2.12	1.94	6.55	48.70
2021	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.92	0.47	0.21	8.76
2022	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.52	0.41	0.21	1.38	12.79
2023	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.36	0.35	0.00	0.00	0.00	0.00	0.00	0.00	2.99	34.55
2024	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.49	0.91	2.35	3.08	29.30
Average	0.00	0.00	0.03	0.04	0.04	0.06	0.07	0.13	0.21	0.23	0.46	0.63	1.07	1.84	5.18	8.49	26.01
Median	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.47	1.09	3.51	5.97	28.60
Standard deviation	0.00	0.00	0.18	0.18	0.18	0.15	0.24	0.29	0.36	0.45	0.85	0.83	1.52	2.00	4.92	7.66	12.23
Minimum	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
Maximum	0.00	0.00	1.16	0.99	0.93	0.49	1.02	1.20	1.46	1.75	3.70	3.09	7.14	8.72	18.03	31.43	50.62
Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Distressed Exchanges Led Defaults

Distressed exchanges (which are typically selective defaults) were the most common reason for default in 2024, with 57. Of the U.S. companies that defaulted last year, 59% opted for distressed exchanges, up from 52% the prior year. Without these exchanges, many of them would have faced meaningful liquidity challenges (see "Europe And The U.S. Undermine 2024 Drop In Global Corporate Defaults," Jan. 17, 2025).

By sector, consumer services and leisure time/media led distress exchanges with 10 each, followed by health care with nine and aerospace/automotive/capital goods/metal with eight.

Distressed exchanges typically involve entities in distress that restructure their obligations in a way that offers less than the originally promised. A distressed exchange is an alternative to a conventional default, in which the investor or counterparty stands to fare even worse, and this motivates (at least partially) their acceptance of such an offer.

S&P Global Ratings treats such offers and buybacks analytically as de facto restructuring--and, accordingly, as equivalent to a default on the part of the issuer. Given this analytical treatment, distressed exchanges are included in default rates and other relevant statistics.

Chapter 11 bankruptcy filing was the second-most common cause of default in 2024 (with 28 defaults), of which 13 were from consumer services.

The largest default in 2024 came from telecommunications provider Lumen Technologies Inc., which defaulted twice in 2024. The issuer accounted for $29.8 billion in debt outstanding in March 2024 when S&P Global Ratings lowered its issuer credit rating on Lumen to 'SD' (selective default) from 'CC' after the company completed its debt restructuring. At the time of its second default in October 2024, Lumen accounted for an even larger $38.7 billion in debt outstanding.

The company exchanged a portion of the outstanding senior secured and unsecured debt at Lumen and wholly owned subsidiary Level 3 Financing Inc. for new debt with a senior ranking, higher coupons, fees, and tighter covenants. S&P Global Ratings considers these debt exchanges as distressed and tantamount to a default given that lenders will not receive adequate compensation to offset the maturity extensions.

After being re-rated soon after the initial distressed exchange at 'CCC+', the issuer credit rating was again lowered to 'CC' from 'CCC+' on a new proposed debt exchange. Soon thereafter, S&P Global Ratings lowered its rating to 'SD' from 'CC' because Lumen exchanged a series of senior unsecured notes at wholly owned subsidiary Level 3 Financing Inc. for new 10% senior secured second-lien notes due in 2032. It also exchanged a series of senior unsecured notes at Lumen for new 10% super-priority second-out notes also due in 2032.

We viewed Lumen's capital structure as unsustainable and believed the up-tiering to a more senior position and new higher interest rate were not sufficient to offset an extension of maturities and a discount to par on the new notes (see "Lumen Technologies Inc. Downgraded To 'SD' (Selective Default) On Distressed Exchange," Oct. 2, 2024).

The U.S. Accounts For Most Of The World's Speculative-Grade Issuers

The share of U.S. corporate issuers that are rated speculative-grade has increased in recent years as investors have shown willingness to accept higher credit risk for additional yield. The share ended the year at 53.7%, below the all-time high of 59% in September 2021 and up nearly 10 percentage points since 2004.

Newly assigned ratings have contributed to most of this growth. Since 1980, 67% of new ratings annually have been speculative-grade, on average, and this proportion has been rising. Since 2009, speculative-grade ratings have accounted for 86% of new ratings annually, on average. In 2024, 262 corporate issuers were assigned new ratings in the U.S., and 81% of these were speculative-grade.

The U.S. accounts for 45% of all global corporate issuer ratings. With its high proportion of speculative-grade ratings, the U.S. accounts for the most speculative-grade corporate issuers of any region (see chart 3). Globally, there were 3,256 speculative-grade issuers at the end of 2024, with 50% of these based in the U.S. Furthermore, the U.S. accounts for 62% of issuers rated 'B- 'or lower--the lowest-rated speculative-grade issuers--globally.

As a result, the U.S. typically experiences a higher number of rated corporate defaults annually than other regions. In 2024, 67% of global defaults were from issuers based in the U.S., up from 63% in 2023.

Since 1992, the global speculative-grade default rate has been higher than the U.S. speculative-grade default rate in only seven years (see chart 4).

Corporate Ratings Follow A Gradual Path To Default

As an issuer's credit quality weakens and it moves toward default, the ratings should reflect that.

When we look at the path to default for U.S. corporate issuers since 1981, we see that the median rating for an issuer five years prior to default was 'B+' (for all defaulters since 1981). The median U.S. corporate rating falls to 'B' 30 months prior to default, to 'B-' nine months prior to default, and to 'CCC+' three months prior to default (see chart 5).

U.S. corporate issuers that have defaulted within the past 12 quarters have shown lower median ratings along the path to default. These issuers had a median rating of 'B' five years prior to default. This median rating drops to 'B-' 41 months prior to default, to 'CCC+' 12 months prior to default, and to 'CCC' two months prior to default. The number of issuer defaults over the trailing 12 quarters is 230, much lower than the total from 1981 to 2024 of 2,545.

The median path to default for nonfinancial issuers is similar to the total sample, given most defaults in this study are from nonfinancial issuers (see chart 6). Nonfinancial issuers have historically had a smoother, more gradual path to default than financial issuers, albeit with a much larger sample. There were 2,364 nonfinancial issuer defaults from 1981 to 2024, while the total from the most recent 12-quarter period is 221.

By comparison, financial services defaults are less frequent, yet some of these issuers have historically experienced relatively swift transitions to default. Financial services companies are typically more confidence-sensitive than nonfinancial companies, and the loss of confidence from stakeholders (such as counterparties or funding sources) can contribute to a rapid decline in liquidity and credit quality. This was evident during the global financial crisis, when many highly rated financial services issuers defaulted within a short time.

Since 1981, the median rating for financial services issuers was 'BBB-' five years prior to default, notably higher than the 'B+' median rating for a nonfinancial corporate issuer five years prior to default. These median ratings are based on a much smaller sample of just 181 issuer defaults (for the period from 1981 to 2024).

Financial entities that defaulted over the past 12 quarters (from 2022 to 2024) experienced a much more gradual path to default from a lower rating level. These issuers displayed a median rating of 'BB-' five years prior to default--two notches higher than the 'B' median rating for a nonfinancial corporate issuer that defaulted over the same period.

To measure upgrades and downgrades in this study, we compared the rating on an issuer as of Jan. 1 with that as of Dec. 31 of the same year. Using this approach, issuers downgraded (or upgraded) multiple times during the year are counted as one downgrade (or upgrade).

While the U.S. default rate rose in 2024, credit quality improved: The upgrade rate rose to 8.61% while the downgrade rate fell to 6.71% year over year (see table 6). The downgrade-to-upgrade ratio decreased to 0.78 from 1.32.

Table 6

Summary of U.S. net annual corporate rating changes (%)
Year	Issuers as of Jan. 1	Upgrades	Downgrades*	Defaults	Withdrawn ratings	Changed ratings	Unchanged ratings	Downgrade/upgrade ratio
1981	1,318	9.94	13.35	0.15	2.12	25.57	74.43	1.34
1982	1,363	5.80	12.69	1.25	5.58	25.31	74.69	2.19
1983	1,374	7.42	11.94	0.80	5.39	25.55	74.45	1.61
1984	1,447	11.33	10.16	0.97	2.90	25.36	74.64	0.90
1985	1,524	8.01	14.44	1.18	4.07	27.69	72.31	1.80
1986	1,762	7.26	15.78	1.82	6.92	31.78	68.22	2.17
1987	1,906	7.29	12.28	1.00	9.29	29.85	70.15	1.68
1988	1,970	8.98	12.13	1.47	8.32	30.91	69.09	1.35
1989	1,976	9.87	11.23	1.72	8.10	30.92	69.08	1.14
1990	1,941	6.54	15.87	2.89	6.96	32.25	67.75	2.43
1991	1,827	6.40	13.25	3.50	4.00	27.15	72.85	2.07
1992	1,837	10.56	10.07	1.74	4.25	26.62	73.38	0.95
1993	1,965	9.67	8.50	0.66	8.80	27.63	72.37	0.88
1994	2,115	7.94	8.42	0.71	4.96	22.03	77.97	1.06
1995	2,289	9.48	8.82	1.27	5.29	24.86	75.14	0.93
1996	2,398	10.18	7.59	0.63	7.84	26.23	73.77	0.75
1997	2,568	10.28	7.40	0.78	8.22	26.67	73.33	0.72
1998	2,883	8.64	9.05	1.21	8.08	26.99	73.01	1.05
1999	3,122	6.60	10.73	2.31	8.58	28.22	71.78	1.63
2000	3,143	5.98	13.36	3.25	7.22	29.81	70.19	2.23
2001	3,066	5.54	16.89	4.53	7.14	34.12	65.88	3.05
2002	2,903	5.10	19.94	3.17	7.03	35.24	64.76	3.91
2003	2,806	5.92	15.72	2.32	7.20	31.15	68.85	2.66
2004	2,774	7.32	9.91	1.08	7.75	26.06	73.94	1.35
2005	2,842	9.71	11.40	0.95	7.71	29.77	70.23	1.17
2006	2,916	10.94	10.49	0.65	8.09	30.18	69.82	0.96
2007	3,000	10.37	11.97	0.50	9.43	32.27	67.73	1.15
2008	3,017	7.23	18.69	2.55	7.62	36.10	63.90	2.59
2009	2,859	5.42	19.31	5.98	7.03	37.74	62.26	3.56
2010	2,677	13.22	9.49	1.68	5.75	30.15	69.85	0.72
2011	2,778	12.46	10.58	1.12	7.24	31.39	68.61	0.85
2012	2,861	9.05	8.88	1.36	6.15	25.45	74.55	0.98
2013	2,948	12.31	7.67	1.15	6.99	28.12	71.88	0.62
2014	3,104	10.12	7.09	0.87	6.70	24.77	75.23	0.70
2015	3,293	7.29	10.36	1.58	8.14	27.36	72.64	1.42
2016	3,239	8.00	11.64	2.84	8.15	30.63	69.37	1.46
2017	3,178	8.46	8.65	1.70	8.59	27.41	72.59	1.02
2018	3,192	9.37	8.49	1.35	8.05	27.26	72.74	0.91
2019	3,303	5.75	10.96	1.85	7.42	25.98	74.02	1.91
2020	3,254	3.44	19.27	3.81	6.18	32.70	67.30	5.60
2021	3,249	11.94	5.66	0.89	10.31	28.81	71.19	0.47
2022	3,302	8.84	7.18	0.97	7.93	24.92	75.08	0.81
2023	3,166	7.04	9.32	2.59	6.03	24.98	75.02	1.32
2024	3,053	8.61	6.71	2.82	6.58	24.73	75.27	0.78
Weighted average		8.40	11.33	1.85	7.20	28.78	71.22	1.58
Median		8.54	10.66	1.36	7.21	27.66	72.34	1.25
Standard deviation		2.21	3.63	1.18	1.71	3.44	3.44	1.01
Minimum		3.44	5.66	0.15	2.12	22.03	62.26	0.47
Maximum		13.22	19.94	5.98	10.31	37.74	77.97	5.60
Note: This table compares the net change in ratings from the first to the last day of each year. All intermediate ratings are disregarded. *Excludes downgrades to 'D', shown separately in the default column. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Transition Tables And Cumulative Default Rates Demonstrate Rating Performance

One-year rating transitions in the U.S. were generally consistent with rating transitions globally in 2024. U.S. investment-grade ratings tend to have more stability (as measured by transition rates) than speculative-grade ratings (see table 7).

For example, 92.64% of U.S. issuers rated 'BBB' on Jan. 1 were still rated 'BBB' on Dec. 31, whereas 87.72% of 'BB' rated issuers maintained a 'BB' rating over the same period. The transition rate generally falls further down the rating scale as the likelihood that ratings move (down or up) increases (see table 7).

Table 7

2024 one-year corporate transition rates: U.S. versus global (%)
From/to	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
U.S.
AAA	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
AA	0.00	93.97	1.72	0.00	0.00	0.00	0.00	0.00	4.31
A	0.00	0.98	94.31	4.12	0.00	0.00	0.00	0.00	0.59
BBB	0.00	0.00	2.81	92.64	1.47	0.00	0.00	0.00	3.08
BB	0.00	0.00	0.19	3.12	87.72	3.31	0.39	0.19	5.07
B	0.00	0.00	0.00	0.00	4.00	78.63	4.11	2.32	10.95
CCC/C	0.00	0.00	0.00	0.00	0.00	11.16	40.93	29.30	18.60
Global
AAA	100.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
AA	0.00	93.68	3.16	0.00	0.00	0.00	0.00	0.00	3.16
A	0.00	0.86	95.07	2.43	0.00	0.00	0.00	0.00	1.64
BBB	0.00	0.00	2.49	92.53	1.30	0.11	0.05	0.05	3.46
BB	0.00	0.00	0.08	3.61	87.31	2.44	0.25	0.17	6.13
B	0.00	0.00	0.00	0.06	4.59	79.30	3.38	1.72	10.95
CCC/C	0.00	0.00	0.00	0.00	0.00	10.82	46.78	28.36	14.04
NR--Not rated. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

In any given year, this relationship may not hold true, but it is clear when multiple samples are averaged together (see table 8). Of the U.S. issuers rated 'AAA', 87.55% retained the rating after one year, whereas only 75.84% of issuers rated 'B' maintained the rating after one year, on average. The stability of higher-rated issuers in the U.S. is largely consistent with global corporate ratings performance (see tables 8-10).

The 'A' rating category has the lowest transition rate, and this becomes more pronounced as the time horizon lengthens. The smaller sample sizes of issuers in the 'AAA' and 'AA' categories likely contribute to their higher transition rates.

Table 8

Average one-year corporate transition rates (1981-2024) (%)
From/to	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
U.S.
AAA	87.55	8.54	0.56	0.04	0.16	0.04	0.04	0.00	3.06
	(10.21)	(10.03)	(1.13)	(0.20)	(0.39)	(0.27)	(0.27)	(0.00)	(2.54)
AA	0.48	87.65	7.14	0.54	0.07	0.09	0.03	0.03	3.98
	(0.52)	(6.14)	(4.58)	(0.81)	(0.22)	(0.27)	(0.10)	(0.15)	(2.31)
A	0.04	1.54	88.90	5.09	0.32	0.13	0.02	0.06	3.89
	(0.12)	(1.22)	(4.39)	(2.50)	(0.48)	(0.29)	(0.10)	(0.15)	(1.87)
BBB	0.01	0.10	3.22	87.29	3.38	0.52	0.09	0.18	5.20
	(0.05)	(0.17)	(1.87)	(4.82)	(1.82)	(0.81)	(0.15)	(0.29)	(1.86)
BB	0.02	0.04	0.16	4.57	78.35	7.29	0.55	0.67	8.36
	(0.08)	(0.11)	(0.27)	(2.28)	(5.53)	(3.99)	(0.64)	(0.82)	(2.41)
B	0.00	0.02	0.08	0.16	4.16	75.84	4.96	3.16	11.61
	(0.00)	(0.09)	(0.21)	(0.23)	(1.95)	(4.13)	(2.74)	(3.08)	(2.49)
CCC/C	0.00	0.00	0.11	0.17	0.48	12.53	44.45	27.91	14.35
	(0.00)	(0.00)	(0.46)	(0.67)	(0.99)	(7.84)	(7.91)	(12.16)	(4.75)
Global
AAA	87.28	8.92	0.51	0.03	0.10	0.03	0.05	0.00	3.08
	(7.37)	(7.16)	(0.81)	(0.13)	(0.26)	(0.17)	(0.34)	(0.00)	(2.45)
AA	0.45	87.74	7.50	0.44	0.05	0.06	0.02	0.02	3.74
	(0.52)	(5.18)	(4.19)	(0.65)	(0.18)	(0.19)	(0.06)	(0.07)	(1.69)
A	0.02	1.48	89.42	4.64	0.23	0.10	0.01	0.05	4.04
	(0.08)	(1.04)	(4.06)	(2.21)	(0.36)	(0.22)	(0.06)	(0.10)	(1.71)
BBB	0.00	0.07	3.05	87.33	3.21	0.40	0.09	0.14	5.71
	(0.03)	(0.14)	(1.58)	(4.09)	(1.67)	(0.62)	(0.19)	(0.23)	(1.52)
BB	0.01	0.02	0.10	4.44	78.89	6.25	0.50	0.56	9.23
	(0.05)	(0.08)	(0.22)	(1.88)	(4.81)	(3.14)	(0.65)	(0.76)	(2.21)
B	0.00	0.02	0.06	0.14	4.47	75.18	4.79	2.93	12.41
	(0.00)	(0.07)	(0.17)	(0.19)	(1.98)	(3.81)	(2.59)	(2.87)	(2.28)
CCC/C	0.00	0.00	0.07	0.13	0.40	13.18	45.07	26.12	15.03
	(0.00)	(0.00)	(0.34)	(0.53)	(0.79)	(7.18)	(8.17)	(11.29)	(4.37)
Note: Numbers in parentheses are weighted standard deviations. NR--Not rated. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Table 9

Average three-year corporate transition rates (1981-2024) (%)
From/to	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
U.S.
AAA	67.02	20.27	2.42	0.40	0.32	0.12	0.12	0.16	9.16
	(15.75)	(16.66)	(2.10)	(1.03)	(0.66)	(0.43)	(0.42)	(0.53)	(4.87)
AA	1.03	68.14	16.67	2.07	0.38	0.31	0.03	0.16	11.21
	(0.80)	(10.96)	(6.96)	(1.77)	(0.56)	(0.63)	(0.12)	(0.36)	(4.57)
A	0.09	3.61	71.44	11.24	1.28	0.47	0.10	0.31	11.47
	(0.11)	(2.54)	(8.21)	(3.14)	(1.17)	(0.73)	(0.18)	(0.37)	(3.94)
BBB	0.02	0.31	7.79	68.39	6.37	1.75	0.24	0.83	14.29
	(0.07)	(0.40)	(3.46)	(9.46)	(2.70)	(1.50)	(0.35)	(0.78)	(4.09)
BB	0.01	0.07	0.55	10.15	49.24	12.74	1.25	3.87	22.13
	(0.06)	(0.16)	(0.76)	(4.06)	(8.80)	(3.74)	(0.85)	(3.39)	(4.08)
B	0.00	0.03	0.21	0.63	8.49	43.70	5.45	11.52	29.98
	(0.05)	(0.11)	(0.45)	(0.78)	(3.23)	(5.70)	(2.16)	(6.97)	(4.84)
CCC/C	0.00	0.00	0.13	0.54	1.39	14.01	10.82	44.69	28.43
	(0.00)	(0.00)	(0.52)	(1.23)	(1.76)	(6.70)	(6.18)	(12.84)	(8.13)
Global
AAA	65.98	21.90	2.29	0.31	0.21	0.08	0.10	0.13	9.01
	(11.96)	(12.13)	(1.68)	(0.75)	(0.46)	(0.29)	(0.41)	(0.36)	(5.28)
AA	1.04	68.20	17.67	1.84	0.30	0.19	0.02	0.11	10.62
	(0.87)	(9.65)	(6.23)	(1.43)	(0.48)	(0.42)	(0.07)	(0.18)	(3.76)
A	0.05	3.46	72.29	10.62	0.98	0.34	0.07	0.20	11.98
	(0.09)	(2.16)	(8.08)	(3.15)	(1.00)	(0.56)	(0.13)	(0.26)	(3.61)
BBB	0.01	0.21	7.53	68.14	6.29	1.31	0.23	0.67	15.60
	(0.05)	(0.35)	(2.96)	(7.96)	(2.19)	(1.21)	(0.32)	(0.86)	(3.18)
BB	0.01	0.04	0.39	10.09	50.52	10.75	1.10	3.18	23.93
	(0.05)	(0.11)	(0.62)	(3.43)	(8.03)	(2.85)	(0.82)	(3.19)	(3.46)
B	0.00	0.02	0.14	0.59	8.79	43.11	5.39	10.60	31.37
	(0.04)	(0.09)	(0.38)	(0.69)	(3.46)	(5.02)	(1.96)	(6.57)	(4.50)
CCC/C	0.00	0.00	0.08	0.40	1.34	16.44	10.83	41.07	29.85
	(0.00)	(0.00)	(0.41)	(1.00)	(1.40)	(6.46)	(5.54)	(11.86)	(7.31)
Note: Numbers in parentheses are weighted standard deviations, weighted by the issuer base. NR--Not rated. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Table 10

Average 10-year corporate transition rates (1981-2024) (%)
From/to	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
U.S.
AAA	27.13	34.12	8.04	2.36	0.20	0.28	0.08	0.81	26.97
	(13.29)	(19.34)	(3.84)	(3.17)	(0.43)	(0.70)	(0.34)	(0.85)	(7.00)
AA	1.31	29.88	27.96	6.45	1.01	0.48	0.04	1.03	31.85
	(0.98)	(9.67)	(4.61)	(2.75)	(0.89)	(0.52)	(0.12)	(1.00)	(4.87)
A	0.14	4.65	40.08	17.28	2.67	0.97	0.16	1.71	32.33
	(0.19)	(1.96)	(8.84)	(2.36)	(1.18)	(0.80)	(0.24)	(0.97)	(4.96)
BBB	0.03	0.66	11.12	38.00	6.60	2.39	0.18	4.11	36.91
	(0.10)	(0.60)	(3.77)	(9.05)	(1.47)	(1.38)	(0.21)	(2.19)	(6.27)
BB	0.01	0.10	1.57	11.74	17.42	8.92	0.81	14.24	45.18
	(0.07)	(0.15)	(1.19)	(3.05)	(5.70)	(3.00)	(0.51)	(6.09)	(3.67)
B	0.00	0.03	0.33	2.08	6.51	10.09	1.06	26.47	53.44
	(0.00)	(0.07)	(0.57)	(1.66)	(1.68)	(3.07)	(0.56)	(8.22)	(6.40)
CCC/C	0.00	0.00	0.15	0.69	2.84	2.69	0.29	55.56	37.79
	(0.00)	(0.00)	(0.58)	(0.96)	(2.73)	(2.16)	(0.63)	(9.86)	(8.42)
Global
AAA	25.46	35.21	9.20	2.67	0.13	0.18	0.05	0.68	26.40
	(9.37)	(14.02)	(3.41)	(2.27)	(0.28)	(0.46)	(0.22)	(0.73)	(7.16)
AA	1.15	30.98	29.07	6.09	0.82	0.36	0.02	0.71	30.80
	(0.87)	(7.37)	(3.33)	(2.32)	(0.73)	(0.35)	(0.07)	(0.61)	(4.28)
A	0.09	4.93	40.34	16.60	2.32	0.75	0.10	1.18	33.68
	(0.16)	(1.52)	(7.96)	(2.20)	(1.00)	(0.66)	(0.15)	(0.90)	(4.53)
BBB	0.02	0.52	11.24	37.28	6.48	1.97	0.23	3.27	38.99
	(0.08)	(0.59)	(2.62)	(7.27)	(1.01)	(1.07)	(0.21)	(2.26)	(4.09)
BB	0.01	0.07	1.47	11.59	18.02	7.88	0.68	12.04	48.25
	(0.06)	(0.11)	(0.96)	(2.40)	(5.37)	(1.85)	(0.35)	(6.46)	(2.57)
B	0.00	0.02	0.26	2.04	6.79	10.22	1.08	24.43	55.15
	(0.00)	(0.06)	(0.52)	(1.50)	(1.67)	(2.84)	(0.53)	(8.16)	(6.04)
CCC/C	0.00	0.00	0.10	0.75	3.47	3.67	1.12	49.76	41.13
	(0.00)	(0.00)	(0.46)	(0.81)	(2.42)	(2.72)	(1.77)	(10.97)	(8.77)
Note: Numbers in parentheses are weighted standard deviations, weighted by the issuer base. NR--Not rated. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

When we look at rating transitions in more detail by including the rating modifier--the plus (+) or minus (-) following the rating--the same relationship generally holds true.

However, differences in stability rates frequently exist among rating modifiers within the same rating category. For example, within the 'AA' category, the 'AA+' rating has a stability rate of 82.55%, which is slightly higher than the stability rate of 82.42% for debt rated 'AA' (see table 11). Differences in the sample size of issuers for each rating contribute to this.

Table 11

Average one-year transition rates for U.S. corporates by rating modifier (1981-2024) (%)
	--Rating--
From/to	AAA	AA+	AA	AA-	A+	A	A-	BBB+	BBB	BBB-	BB+	BB	BB-	B+	B	B-	CCC	D	NR
AAA	87.55	5.20	2.66	0.69	0.20	0.20	0.16	0.00	0.04	0.00	0.04	0.08	0.04	0.00	0.04	0.00	0.04	0.00	3.06
	(10.21)	(9.35)	(4.24)	(1.16)	(0.58)	(0.69)	(0.49)	(0.00)	(0.20)	(0.00)	(0.24)	(0.27)	(0.20)	(0.00)	(0.27)	(0.00)	(0.27)	(0.00)	(2.54)
AA+	1.91	82.55	7.66	3.62	0.57	0.28	0.14	0.00	0.14	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	3.12
	(3.25)	(15.23)	(8.26)	(5.15)	(3.05)	(0.95)	(0.68)	(0.00)	(0.93)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(0.00)	(4.48)
AA	0.43	1.21	82.42	6.91	2.46	1.33	0.34	0.48	0.17	0.10	0.05	0.05	0.02	0.00	0.00	0.02	0.07	0.02	3.91
	(0.52)	(1.55)	(8.25)	(4.43)	(2.23)	(1.49)	(1.07)	(1.04)	(0.41)	(0.40)	(0.22)	(0.18)	(0.12)	(0.00)	(0.00)	(0.11)	(0.24)	(0.17)	(3.08)
AA-	0.02	0.15	3.44	79.06	9.25	2.47	0.53	0.29	0.10	0.07	0.05	0.00	0.00	0.05	0.15	0.00	0.00	0.05	4.33
	(0.17)	(0.42)	(3.30)	(8.99)	(5.72)	(2.94)	(0.96)	(0.64)	(0.33)	(0.28)	(0.28)	(0.00)	(0.00)	(0.23)	(0.52)	(0.00)	(0.00)	(0.20)	(2.69)
A+	0.00	0.13	0.52	3.70	80.73	7.54	2.16	0.69	0.36	0.09	0.06	0.13	0.01	0.06	0.04	0.00	0.00	0.04	3.72
	(0.00)	(0.45)	(0.85)	(2.61)	(7.58)	(3.68)	(1.86)	(0.87)	(0.48)	(0.23)	(0.19)	(0.33)	(0.08)	(0.19)	(0.16)	(0.00)	(0.00)	(0.20)	(2.20)
A	0.05	0.02	0.28	0.39	4.94	79.84	6.03	2.67	0.95	0.29	0.14	0.14	0.09	0.08	0.03	0.00	0.02	0.06	3.97
	(0.17)	(0.09)	(0.56)	(0.55)	(2.03)	(5.46)	(2.69)	(1.99)	(1.06)	(0.45)	(0.25)	(0.33)	(0.36)	(0.28)	(0.14)	(0.00)	(0.09)	(0.15)	(2.31)
A-	0.06	0.01	0.05	0.16	0.41	5.91	79.12	7.11	2.09	0.49	0.11	0.13	0.12	0.12	0.02	0.01	0.05	0.07	3.94
	(0.25)	(0.07)	(0.18)	(0.36)	(0.60)	(3.47)	(7.90)	(3.98)	(1.58)	(0.71)	(0.36)	(0.42)	(0.31)	(0.43)	(0.10)	(0.10)	(0.23)	(0.24)	(2.11)
BBB+	0.00	0.01	0.08	0.06	0.23	0.87	6.55	77.32	7.49	1.66	0.36	0.29	0.13	0.22	0.11	0.04	0.07	0.13	4.39
	(0.00)	(0.07)	(0.24)	(0.21)	(0.52)	(1.15)	(3.38)	(9.04)	(4.02)	(1.75)	(0.64)	(0.71)	(0.27)	(0.59)	(0.35)	(0.16)	(0.20)	(0.29)	(2.67)
BBB	0.01	0.00	0.03	0.03	0.11	0.37	1.09	6.61	78.03	5.56	1.24	0.68	0.30	0.26	0.12	0.05	0.06	0.19	5.26
	(0.08)	(0.00)	(0.11)	(0.14)	(0.27)	(0.79)	(1.18)	(3.28)	(6.65)	(2.66)	(1.15)	(0.96)	(0.56)	(0.52)	(0.44)	(0.19)	(0.16)	(0.33)	(2.40)
BBB-	0.01	0.01	0.01	0.07	0.07	0.13	0.32	1.22	9.05	73.97	4.66	2.25	0.98	0.45	0.19	0.19	0.16	0.24	6.02
	(0.10)	(0.08)	(0.07)	(0.26)	(0.21)	(0.44)	(0.61)	(1.46)	(3.10)	(6.18)	(2.38)	(1.79)	(0.96)	(0.90)	(0.52)	(0.53)	(0.31)	(0.45)	(2.43)
BB+	0.06	0.00	0.00	0.04	0.02	0.13	0.11	0.39	2.07	10.35	67.57	6.55	2.79	1.25	0.65	0.22	0.30	0.37	7.13
	(0.32)	(0.00)	(0.00)	(0.20)	(0.13)	(0.47)	(0.29)	(0.87)	(2.35)	(4.88)	(8.42)	(3.60)	(2.49)	(2.07)	(1.41)	(0.45)	(0.90)	(0.73)	(3.04)
BB	0.00	0.00	0.05	0.02	0.00	0.07	0.08	0.15	0.87	2.24	8.92	66.46	8.04	2.66	1.26	0.47	0.39	0.55	7.77
	(0.00)	(0.00)	(0.24)	(0.10)	(0.00)	(0.31)	(0.28)	(0.48)	(1.48)	(2.55)	(4.83)	(6.45)	(3.47)	(2.14)	(1.78)	(0.73)	(0.80)	(0.75)	(3.47)
BB-	0.00	0.00	0.00	0.01	0.01	0.01	0.08	0.13	0.20	0.37	1.80	9.28	64.25	8.36	3.23	0.97	0.82	0.93	9.54
	(0.00)	(0.00)	(0.00)	(0.11)	(0.09)	(0.09)	(0.34)	(0.30)	(0.50)	(0.71)	(1.71)	(4.40)	(6.57)	(4.67)	(2.05)	(0.97)	(0.89)	(1.34)	(2.84)
B+	0.00	0.01	0.00	0.04	0.00	0.03	0.07	0.04	0.06	0.13	0.21	1.22	7.81	64.54	9.02	2.51	1.76	1.91	10.66
	(0.00)	(0.06)	(0.00)	(0.15)	(0.00)	(0.10)	(0.22)	(0.14)	(0.18)	(0.26)	(0.32)	(1.07)	(3.67)	(5.78)	(4.28)	(1.51)	(1.54)	(2.04)	(2.81)
B	0.00	0.00	0.01	0.01	0.00	0.03	0.04	0.02	0.04	0.02	0.10	0.23	0.98	7.15	62.69	9.84	4.08	2.98	11.78
	(0.00)	(0.00)	(0.09)	(0.07)	(0.00)	(0.20)	(0.37)	(0.09)	(0.28)	(0.10)	(0.32)	(0.58)	(1.11)	(2.92)	(7.04)	(4.81)	(3.34)	(3.98)	(2.86)
B-	0.00	0.00	0.00	0.00	0.02	0.03	0.00	0.06	0.05	0.08	0.08	0.11	0.32	1.68	8.56	58.23	12.16	5.67	12.96
	(0.00)	(0.00)	(0.00)	(0.00)	(0.29)	(0.30)	(0.00)	(0.33)	(0.18)	(0.40)	(0.48)	(0.83)	(0.97)	(2.12)	(4.95)	(8.93)	(5.54)	(6.16)	(4.47)
CCC/C	0.00	0.00	0.00	0.00	0.03	0.00	0.08	0.06	0.06	0.06	0.03	0.14	0.31	0.87	2.63	9.02	44.45	27.91	14.35
	(0.00)	(0.00)	(0.00)	(0.00)	(0.24)	(0.00)	(0.40)	(0.46)	(0.31)	(0.40)	(0.23)	(0.53)	(0.78)	(1.42)	(3.16)	(6.13)	(7.91)	(12.16)	(4.75)
Note: Numbers in parentheses are weighted standard deviations, weighted by the issuer base. NR--Not rated. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

In addition to greater ratings stability, higher-rated issuers also have lower default rates over time. In the U.S., defaults are less frequent among higher-rated entities than they are for lower-rated entities. This relationship remains true over time, as the cumulative average default rates illustrate (see tables 12 and 13 and chart 8, which illustrates the data in the top half of table 12).

Table 12

Comparison of corporate average cumulative default rates (1981-2024) (%)
	--Time horizon (years)--
Rating	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15
U.S.
AAA	0.00	0.04	0.16	0.28	0.40	0.53	0.57	0.65	0.73	0.81	0.85	0.89	0.93	1.01	1.10
AA	0.03	0.07	0.16	0.28	0.39	0.53	0.65	0.76	0.86	0.96	1.05	1.12	1.19	1.26	1.34
A	0.06	0.17	0.30	0.45	0.61	0.79	0.99	1.18	1.37	1.57	1.75	1.92	2.09	2.23	2.39
BBB	0.18	0.48	0.83	1.26	1.73	2.19	2.61	3.01	3.42	3.80	4.18	4.46	4.73	5.04	5.34
BB	0.67	2.11	3.82	5.49	7.01	8.46	9.71	10.88	11.92	12.90	13.71	14.49	15.17	15.71	16.26
B	3.16	7.52	11.43	14.56	17.08	19.14	20.74	22.03	23.16	24.20	25.07	25.76	26.42	27.04	27.63
CCC/C	27.91	38.94	44.92	48.51	51.07	52.27	53.57	54.32	55.07	55.70	56.31	56.79	57.29	57.70	57.70
Investment-grade	0.11	0.28	0.49	0.75	1.02	1.31	1.57	1.83	2.08	2.33	2.57	2.75	2.94	3.12	3.31
Speculative-grade	3.99	7.74	10.98	13.59	15.72	17.49	18.93	20.13	21.20	22.18	23.01	23.71	24.36	24.93	25.46
All rated	1.85	3.61	5.16	6.44	7.52	8.43	9.19	9.84	10.42	10.96	11.43	11.81	12.17	12.50	12.81
Global
AAA	0.00	0.03	0.13	0.23	0.34	0.44	0.49	0.57	0.62	0.67	0.70	0.73	0.75	0.81	0.86
AA	0.02	0.05	0.11	0.19	0.28	0.37	0.45	0.52	0.59	0.65	0.71	0.76	0.81	0.86	0.90
A	0.05	0.11	0.19	0.29	0.39	0.51	0.65	0.78	0.90	1.03	1.14	1.25	1.35	1.45	1.56
BBB	0.14	0.38	0.67	1.01	1.36	1.71	2.00	2.30	2.58	2.86	3.13	3.35	3.56	3.78	4.01
BB	0.56	1.76	3.12	4.48	5.75	6.93	7.94	8.86	9.68	10.44	11.06	11.65	12.17	12.60	13.05
B	2.93	6.93	10.46	13.31	15.60	17.45	18.90	20.06	21.08	22.02	22.82	23.43	24.02	24.57	25.11
CCC/C	26.12	35.92	41.32	44.35	46.53	47.57	48.61	49.29	49.89	50.43	50.85	51.32	51.86	52.26	52.30
Investment-grade	0.08	0.21	0.37	0.57	0.77	0.98	1.17	1.34	1.52	1.69	1.85	1.98	2.11	2.24	2.38
Speculative-grade	3.54	6.78	9.55	11.79	13.64	15.15	16.39	17.41	18.32	19.15	19.85	20.44	20.99	21.47	21.93
All rated	1.50	2.91	4.13	5.15	6.00	6.72	7.31	7.81	8.26	8.67	9.02	9.31	9.58	9.83	10.07
Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Table 13

U.S. corporate average cumulative default rates by rating modifier (1981-2024) (%)
	--Time horizon (years)--
Rating	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15
AAA	0.00	0.04	0.16	0.28	0.40	0.53	0.57	0.65	0.73	0.81	0.85	0.89	0.93	1.01	1.10
AA+	0.00	0.07	0.07	0.15	0.23	0.31	0.39	0.47	0.56	0.64	0.74	0.83	0.93	1.03	1.13
AA	0.02	0.05	0.12	0.29	0.47	0.62	0.77	0.90	1.00	1.13	1.23	1.31	1.45	1.53	1.61
AA-	0.05	0.10	0.22	0.30	0.37	0.51	0.61	0.72	0.81	0.89	0.95	1.01	1.01	1.04	1.11
A+	0.04	0.11	0.25	0.44	0.58	0.72	0.87	1.01	1.18	1.37	1.53	1.70	1.90	2.11	2.30
A	0.06	0.17	0.28	0.43	0.59	0.77	0.96	1.14	1.37	1.63	1.84	1.98	2.11	2.21	2.39
A-	0.07	0.24	0.38	0.50	0.65	0.86	1.13	1.36	1.51	1.66	1.83	2.03	2.21	2.35	2.45
BBB+	0.13	0.35	0.61	0.88	1.20	1.54	1.78	2.04	2.38	2.69	2.97	3.15	3.34	3.59	3.88
BBB	0.19	0.49	0.74	1.13	1.52	1.89	2.32	2.71	3.13	3.52	3.91	4.21	4.50	4.67	4.92
BBB-	0.24	0.61	1.19	1.85	2.60	3.30	3.90	4.47	4.93	5.39	5.84	6.23	6.56	7.10	7.51
BB+	0.37	1.08	1.89	2.85	3.77	4.73	5.57	6.19	6.90	7.62	8.18	8.84	9.49	9.96	10.60
BB	0.55	1.60	3.27	4.69	6.14	7.44	8.59	9.66	10.62	11.54	12.48	13.19	13.71	14.07	14.44
BB-	0.93	3.11	5.38	7.63	9.54	11.38	12.93	14.48	15.76	16.91	17.77	18.65	19.47	20.17	20.82
B+	1.91	5.37	8.79	11.81	14.26	16.21	17.99	19.51	20.86	22.08	23.10	23.79	24.55	25.30	26.01
B	2.98	7.06	10.84	13.77	16.24	18.48	19.99	21.08	22.12	23.05	23.74	24.49	25.06	25.52	26.03
B-	5.67	12.21	17.34	21.15	23.99	25.97	27.37	28.50	29.25	30.02	30.91	31.48	32.01	32.53	32.87
CCC/C	27.91	38.94	44.92	48.51	51.07	52.27	53.57	54.32	55.07	55.70	56.31	56.79	57.29	57.70	57.70
Investment-grade	0.11	0.28	0.49	0.75	1.02	1.31	1.57	1.83	2.08	2.33	2.57	2.75	2.94	3.12	3.31
Speculative-grade	3.99	7.74	10.98	13.59	15.72	17.49	18.93	20.13	21.20	22.18	23.01	23.71	24.36	24.93	25.46
All rated	1.85	3.61	5.16	6.44	7.52	8.43	9.19	9.84	10.42	10.96	11.43	11.81	12.17	12.50	12.81
Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

The average number of years between the initial rating and default for the 97 U.S. corporate defaulters in 2024 was 6.5 years, longer than the average 4.9 years in 2023. The defaulter with the longest time to default in 2024 was Lumen Technologies Inc. at 44.0 years, as the initial rating in our database is from Dec. 31, 1980. The U.S.-based telecommunications service provider completed a debt restructuring that it initially announced in November 2023.

Range Parent Inc. had the shortest time to default in 2024, at 35 days. On Dec. 19, 2023, the Itasca, Ill.-based components and control systems manufacturer was downgraded to 'SD' from 'CCC' as a result of a debt restructuring. The default followed a multiyear deterioration in the company's profitability, liquidity, and cash flows driven by weak end-markets and significant operating challenges.

The company was later rated 'CCC-' on Jan. 12, 2024--which constituted a new rating. It defaulted again on Feb. 16, 2024, when it filed for Chapter 11 bankruptcy protection. The 35 days between Jan. 12, 2024, and Feb. 16, 2024, made it last year's shortest default.

Historically, issuers rated in higher rating categories exhibit longer times to default, on average, than issuers in lower rating categories (see chart 9 and tables 14-15). For example, from 1981 to 2024, the time to default from the initial rating for U.S. issuers rated 'B' averaged 5.5 years, while issuers rated 'BB' had an average time to default of 8.0 years.

This relationship is true for every sequential rating category from 'AAA' to 'CCC'/'C'. The relationship also holds when the time to default is measured using post-original issuer credit ratings.

In the 44 years covered in this study (1981 to 2024), seven U.S. issuers initially rated 'AAA' defaulted: Macy's Inc., Ally Financial Inc. (formerly known as GMAC Financial--a subsidiary of General Motors Corp.), Ambac Assurance Corp., Mutual Benefit Life Insurance Co., Executive Life Insurance Co. CA, Motors Liquidation Co. (formerly known as General Motors Corp.), and Eastman Kodak Co. The average time between initial rating and default for these issuers was 19.4 years.

Table 14

Time to default from original rating among corporate defaulters (U.S. versus global) (1981-2024)
Original rating	Defaults	Average years from original rating*	Median years from original rating	Standard deviation of years from original rating
U.S.
AAA	7	19.4	28.0	11.5
AA	30	18.1	20.0	10.5
A	87	15.9	12.9	10.0
BBB	163	10.9	9.4	7.2
BB	468	8.0	5.8	6.6
B	1,467	5.5	4.0	4.6
CCC/C	323	2.1	1.3	2.5
Total	2,545	6.4	4.4	6.3
Global
AAA	8	18.0	18.5	11.4
AA	33	17.2	19.3	10.5
A	102	14.7	11.5	9.9
BBB	239	9.7	7.7	7.1
BB	701	7.3	5.5	6.0
B	1,971	5.2	3.9	4.4
CCC/C	502	2.0	1.2	2.5
Total	3,556	5.9	4.0	5.8
*Or Dec. 31, 1980, whichever is later. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Table 15

Time to default from post-original ratings among corporate defaulters (U.S. versus global) (1981-2024)
Rating path to default	Average years from rating category	Median years from rating category	Standard deviation of years from rating category
U.S.
AAA	27.39	27.7	10.0
AA	16.12	17.3	9.0
A	12.59	11.1	8.7
BBB	9.26	7.7	7.5
BB	7.11	5.2	6.4
B	3.68	2.2	4.3
CCC/C	0.99	0.4	1.8
NR	5.76	3.5	6.3
Total	3.89	1.6	5.5
Global
AAA	27.4	27.7	10.0
AA	14.9	15.8	9.4
A	11.9	10.0	8.7
BBB	8.8	6.9	7.3
BB	6.3	4.4	6.0
B	3.4	2.0	4.1
CCC/C	0.9	0.4	1.7
NR	5.5	3.2	6.1
Total	3.4	1.3	5.1
NR--Not rated. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro.

Gini Ratios And Lorenz Curves

A quantitative analysis of the performance of S&P Global Ratings' corporate issuer credit ratings shows they continue to correlate with the level of default risk across several time horizons.

To measure ratings performance, the cumulative share of defaulters is plotted against the cumulative share of issuers by rating in a Lorenz curve to visually render the accuracy of the rank ordering (see charts 10-12 and Appendix 3). Over the long term, the U.S. weighted average one-year transition to default has a one-year Gini coefficient of 80.72%, a three-year Gini coefficient of 72.25%, a five-year Gini coefficient of 68.83%, and a seven-year Gini coefficient of 66.25% (see table 16). These weighted average Gini ratios are weighted by yearly issuer counts since 1981 (see Appendix 2).

Table 16

Corporate Gini coefficients by region (1981-2024) (%)
	--Time horizon--
Region	One-year	Three-year	Five-year	Seven-year
Global
Weighted average	82.86	75.11	71.72	69.22
Average	85.65	78.73	74.66	71.68
Standard deviation	(5.33)	(4.94)	(5.19)	(5.16)
U.S.
Weighted average	80.72	72.25	68.83	66.25
Average	84.56	76.51	72.20	69.02
Standard deviation	(6.61)	(6.36)	(6.37)	(5.95)
Europe
Weighted average	90.23	84.79	82.52	79.93
Average	91.38	86.98	82.33	77.23
Standard deviation	(4.84)	(5.23)	(5.88)	(9.95)
Note: Numbers in parentheses are standard deviations. Average and standard deviation for Europe calculated for the period 1996-2024. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

As expected, Gini coefficients decline as the time horizon lengthens because longer time horizons increase the likelihood of credit degradation among higher-rated entities. In the one-year U.S. Lorenz curve, for example, speculative-grade issuers accounted for 96.8% of total corporate defaults from 1981 to 2024 but only 44.8% of total issuers during that time (see chart 10). The five-year Lorenz curve shows that speculative-grade issuers accounted for 92.1% of defaulters but just 43.2% of total issuers (see chart 12).

If the rank ordering of ratings had little predictive value, the cumulative share of defaulting corporate entities and the cumulative share of all entities at each rating level would be nearly the same, producing a Gini ratio of zero.

Trends in the one-year Gini ratio emerge during periods of extreme highs and lows in the default cycle. In periods with a high number of defaults, there tends to be greater variation in the distribution of defaults across the ratings spectrum, which reduces the Gini ratio. In other words, when default pressure is high, weak economic conditions increase the likelihood that issuers across the rating spectrum will suffer a rapid deterioration of credit quality.

The one-year Gini ratio for U.S. corporate ratings decreased to 86.2% in 2024 from 89.4% in 2023 (the lowest recorded was 57.6% in 2008).

Appendix 1: Methodology And Definitions

This long-term corporate default and rating transition study uses the CreditPro database of long-term local currency issuer credit ratings. The analysis excludes public information (pi) ratings and ratings based on the guarantee of another company or government entity. We also do not include short-term issuer credit ratings.

S&P Global Ratings does not require all issuers with rated debt to have an issuer credit rating. Therefore, if an issuer has rated debt but not an issuer credit rating, we assign a proxy rating so the CreditPro corporate dataset accurately represents the complete universe of ratings. The local currency senior unsecured rating is the preferred debt rating for the proxy because it is usually consistent with the issuer credit rating. In a small number of cases, we use the subordinated debt rating or the senior secured rating as the proxy.

An S&P Global Ratings issuer credit rating is a forward-looking opinion about an obligor's overall creditworthiness. This opinion focuses on the obligor's capacity and willingness to meet its financial commitments as they come due. It does not apply to any specific financial obligation because it does not take into account the nature and provisions of any single obligation, its standing in bankruptcy or liquidation, statutory preferences, or the legality and enforceability of the obligation.

Counterparty credit ratings, corporate credit ratings, and sovereign credit ratings are all forms of issuer credit ratings. Issuer credit ratings can be either long-term or short-term.

Our ongoing enhancement of the database used to generate this study could lead to outcomes that differ to some degree from those reported in previous studies. However, this poses no continuity problem because each study reports statistics back to Dec. 31, 1980. Therefore, each annual default study is self-contained and effectively supersedes all previous versions.

Issuers included in this study

For the purposes of this study, the U.S. region includes the tax havens Bermuda and the Cayman Islands.

This study analyzes the rating histories of 11,949 corporate issuers in the U.S. that S&P Global Ratings rated as of Dec. 31, 1980, or that were first rated between that date and Dec. 31, 2024. These include industrials, utilities, financial institutions, and insurance companies with long-term local currency ratings. Structured finance vehicles, public-sector issuers, and sovereign issuers are the subjects of separate default and transition studies, and we exclude them from this study.

In this study, the insurance industry includes life insurance, health insurance, property/casualty insurance, reinsurance, bond insurance, mortgage insurance, and title insurance. In addition to these subsectors, this study groups insurance service providers (such as insurance brokers and third-party administrators that are rated according to corporate criteria) with the insurance industry.

To avoid overcounting, we exclude subsidiaries with debt that is fully guaranteed by a parent or with default risk that is considered identical to that of a parent. The latter are issuers with obligations that are not legally guaranteed by a parent but that have operating or financing activities that are so inextricably entwined with those of the parent that it would be impossible to imagine the default of one and not the other.

At times, however, some of these subsidiaries might not yet have been covered by a parent's guarantee, or the relationship that combines the default risk of parent and subsidiary might have come to an end or might not have begun. We included such subsidiaries for the period during which they had distinct and separate risk of default.

Issuers with withdrawn ratings

S&P Global Ratings withdraws ratings when an entity's entire debt is paid off or when the program or programs rated are terminated and the relevant debt extinguished. For the purposes of this study, a corporate rating may also be withdrawn as a result of mergers and acquisitions. Others are withdrawn because of a lack of cooperation, particularly when an issuer is experiencing financial difficulties and refuses to provide all the information needed to continue surveillance on the ratings, or at the entity's request.

Definition of default

An obligor rated 'SD' (selective default) or 'D' (default) is in default on one or more of its financial obligations, including rated and unrated financial obligations but excluding hybrid instruments classified as regulatory capital or in nonpayment according to terms. An obligor is considered in default unless S&P Global Ratings believes that such payments will be made within five business days of the due date in the absence of a stated grace period, or within the earlier of the stated grace period or 30 calendar days.

A 'D' rating is assigned when S&P Global Ratings believes that the default will be a general default and that the obligor will fail to pay all or substantially all of its obligations as they come due. An 'SD' rating is assigned when S&P Global Ratings believes the obligor has selectively defaulted on a specific issue or class of obligations but will continue to meet its payment obligations on other issues or classes of obligations in a timely manner. S&P Global Ratings lowers its rating on an obligor to 'D' or 'SD' if the obligor is conducting a distressed exchange offer.

'R' (regulatory intervention) indicates that an obligor is under regulatory supervision owing to its financial condition. This does not necessarily indicate a default event, but during the period of regulatory supervision, the regulators may have the power to favor one class of obligations over others or pay some obligations and not others. Preferred stock is not considered a financial obligation; thus, a missed preferred stock dividend is not normally equated with default. On July 5, 2019, we removed 'R' from all rating scales.

We deem 'D', 'SD', and 'R' issuer credit ratings to be defaults for the purposes of this study. A default is assumed to take place on the earliest of:

• The date S&P Global Ratings revised the rating(s) to 'D', 'SD', or 'R';
• The date a debt payment was missed;
• The date a distressed exchange offer was announced; or
• The date the debtor filed for, or was forced into, bankruptcy.

When an issuer defaults, it is not uncommon for S&P Global Ratings to subsequently withdraw the 'D' rating. For the purposes of this study, if an issuer defaults, we end its rating history at 'D'.

If any defaulting entity reemerges from bankruptcy--or otherwise restructures its defaulted debt instruments, thereby reestablishing regular, timely payment of all its debts--we reenter this issuer into the database as a new entity. Its rating history after the default event is included in all calculations as entirely separate from its experience leading up to its earlier default.

Many practitioners use statistics from this default study to estimate the "probability of default" and "probability of rating transition." It is important to note that S&P Global Ratings' credit ratings do not imply a specific probability of default.

Calculations

Static pool methodology.  We conduct our default studies on the basis of groupings called static pools. For the purposes of this study, we form static pools by grouping issuers (for example, by rating category) at the beginning of each year, quarter, or month that the database covers. Each static pool is followed from that point forward. All issuers included in the study are assigned to one or more static pools. When an issuer defaults, we assign that default to all of the static pools to which the issuer belonged.

S&P Global Ratings uses the static pool methodology to avoid certain pitfalls in estimating default rates. For example, this methodology ensures that default rates account for rating migration and allows them to be calculated across multiperiod time horizons.

Some methods for calculating default and rating transition rates might charge defaults against only the initial rating on the issuer, ignoring more recent rating changes that supply more current information. Other methods may calculate default rates using only the most recent year's default and rating data, which may yield comparatively low default rates during periods of high rating activity because they ignore prior years' default activity.

The pools are static in the sense that their membership remains constant over time. Each static pool can be interpreted as a buy-and-hold portfolio. Because errors, if any, are corrected by every new update and because the criteria for inclusion or exclusion of issuers in the default study are subject to minor revisions as time goes by, it is not possible to compare static pools across different studies. Therefore, every update revises results to the same starting date of Dec. 31, 1980, to avoid continuity problems.

Entities that have had ratings withdrawn--that is, revised to not rated (NR)--are surveilled with the aim of capturing a potential default. Because static pools only include entities with active ratings as of the beginning date of a given pool, we exclude issuers with withdrawn ratings, as well as those that have defaulted, from subsequent static pools. If the rating on an entity is withdrawn after the start date of a particular static pool and the issuer subsequently defaults, we will include it in that static pool as a default and categorize it in the rating category of which it was a member at that time.

For instance, the 1981 static pool consists of all issuers rated as of 12:00 a.m. on Jan. 1, 1981. Adding those issuers first rated in 1981 to the surviving members of the 1981 static pool forms the 1982 static pool. All rating changes that took place are reflected in the newly formed 1982 static pool through the ratings on these entities as of 12:00 a.m. on Jan. 1, 1982.

We used the same method to form static pools for 1983 through 2024. From Jan. 1, 1981, to Dec. 31, 2024, a total of 12,881 first-time-rated organizations were added to form new static pools, while we excluded 2,545 defaulting issuers and 7,303 issuers with last ratings of NR.

Consider the following example: An issuer is originally rated 'BB' in mid-1986 and is downgraded to 'B' in 1988. This is followed by a rating withdrawal in 1990 and a default in 1993. We would include this hypothetical issuer in the 1987 and 1988 pools with the 'BB' rating, which was the rating at the beginning of those years. Likewise, it would be included in the 1989 and 1990 pools with the 'B' rating. It would not be part of the 1986 pool because it was not rated as of the first day of that year, and it would not be included in any pool after the last day of 1990 because the rating had been withdrawn by then. Yet each of the four pools in which this issuer was included (1987-1990) would record its 1993 default at the appropriate time horizon.

Default rate calculation.  We calculated annual default rates for each static pool, first in units and later as percentages with respect to the number of issuers in each rating category. We combined these percentages to obtain cumulative default rates for the 44 years the study covers.

Issuer-weighted default rates.  All default rates that appear in this study are based on the number of issuers rather than the dollar amounts affected by defaults or rating changes. Although dollar amounts provide information about the portion of the market that is affected by defaults or rating changes, issuer-weighted averages are more useful measures of the performance of ratings.

Average cumulative default rate calculation.  The cumulative default rates in this study average the experience of all static pools by first calculating marginal default rates for each possible time horizon and for each static pool, weight-averaging the marginal default rates conditional on survival (survivors being nondefaulters) and accumulating the average conditional marginal default rates (see tables 5, 13-14, and 20-22). We calculated conditional default rates by dividing the number of issuers in a static pool that default at a specific time horizon by the number of issuers that survived (did not default) to that point in time.

Weights are based on the number of issuers in each static pool. Cumulative default rates are one minus the product of the proportion of survivors (nondefaulters).

For instance, in table 21, the weighted average first-year default rate for all speculative-grade-rated issuers in the U.S. for all 44 pools was 3.99%, meaning an average of 96.01% survived one year. Similarly, the second- and third-year conditional marginal averages--shown in the summary statistics at the bottom of the table--were 3.91% for the first 43 pools (96.09% of issuers that did not default in the first year survived the second year) and 3.51% for the first 42 pools (96.49% of issuers that did not default by the second year survived the third year), respectively.

Multiplying 96.01% by 96.09% results in a 92.26% survival rate to the end of the second year, which is a two-year average cumulative default rate of 7.74%. Multiplying 92.26% by 96.49% results in an 89.02% survival rate to the end of the third year, which is a three-year average cumulative default rate of 10.98%.

Transition analysis

Transition rates compare issuer credit ratings at the beginning of a period with the ratings at the end of the period. To compute one-year rating transition rates by rating category, we compared the rating on each entity at the end of a particular year with the rating at the beginning of the same year. An issuer that remained rated for more than one year was counted as many times as the number of years it was rated.

For instance, an issuer continually rated from the middle of 1984 to the middle of 1991 would appear in the seven consecutive one-year transition matrices from 1985 to 1991. If the rating on the issuer was withdrawn in the middle of 1991, it would be included in the column representing transitions to NR in the 1991 transition matrix. Similarly, if it defaulted in the middle of 1991, it would be included in the column representing transitions to 'D' in the 1991 one-year transition matrix.

All 1981 static pool members still rated on Jan. 1, 2024, had 44 one-year transitions, while issuers first rated on Jan. 1, 2024, had only one. Each one-year transition matrix displays all rating movements between letter categories from the beginning of the year through year-end. For each rating listed in the matrix's leftmost column, there are nine ratios listed in the rows, corresponding to the ratings from 'AAA' to 'D', plus an entry for NR (see table 25).

The only ratings considered in these calculations are those on entities at the beginning of each static pool and those at the end. All rating changes that occur in between are ignored. For example, if an entity was rated 'A' on Jan. 1, 2024, and downgraded to 'BBB' in the middle of the year and then upgraded to 'A' later in the year (with no other subsequent rating changes), this entity would be included only in the percentage of issuers that began the year as 'A' and ended the year as 'A'.

This also applies to transition matrices that span longer time horizons. If an issuer defaults or the rating is withdrawn in the middle of the year, then we would consider it to be rated 'D' or not rated as of Dec. 31 of that particular year.

Multiyear transitions

To calculate multiyear transition matrices, we compared the ratings at the beginning of the multiyear period with the ratings at the end. For example, three-year transition matrices were the result of comparing ratings at the beginning of the years 1981-2022 with the ratings at the end of the years 1983-2024. Otherwise, the methodology was identical to that used for single-year transitions.

We calculated average transition matrices on the basis of the multiyear matrices just described. These average matrices are a true summary, the ratios of which represent the historical incidence of the ratings listed in the first column changing to the ones listed in the top row over the course of the multiyear period (see tables 25-27). Transition matrices that present averages over multiple time horizons are also calculated as issuer-weighted averages.

Rating modifiers

We use rating modifiers (plus and minus signs) to calculate the upgrade and downgrade percentages, as well as the magnitude of rating changes, throughout this study. However, some transition tables may use full rating categories for practical reasons. In other words, the use of a rating category suggests that transitions to, for example, 'AA' from 'AA-' or to 'BBB+' from 'BBB-' are not considered to be rating changes because the rating remained within the rating category.

Comparing transition rates with default rates

Rating transition rates may be compared with the marginal and cumulative default rates described in the previous sections. For example, the one-year default rate column of table 13 is equivalent to column 'D' of the average one-year transition matrix in table 8 and the cumulative average in the summary statistics of the year one column in table 19.

However, the three-year default rate column in table 13 is not the same as column 'D' of the average three-year transition matrix in table 9. This difference results from the different methods of calculating default rates. The default rates in table 9 are calculated as not conditional on survival, while those in table 13 are average default rates, conditional on survival. The three-year default rates in table 13 are calculated in the same way as those in the cumulative average section for the year three column in table 20. The three-year default rates in the 'D' column of table 9 are equivalent to adding up all the defaults behind the year three column's annual default rates in table 19, divided by the sum of all the issuers in table 19 for the years 1981-2022.

The links between transition matrices and average cumulative default rates are best illustrated through tables 20-22. The default rates in the columns of these tables, associated with each static pool year, are calculated in the same way as they would be for individual years' one-year transition matrices. Tables 20-22 are broken out by the broadest rating classifications (all rated, investment-grade, and speculative-grade, respectively). These tables can also be constructed for each rating category.

As an example, the year two column in table 20 shows the two-year default rates (conditional on survival) for each static pool. These are calculated in the same way as the default column in table 7, though table 7 shows the one-year default rates exclusively.

In the summary section at the bottom of tables 20-22, the first row shows the issuer-weighted averages of the marginal default rates. These marginal averages are then used to calculate the cumulative average default rates in the row directly beneath them, as explained in the average cumulative default rate section above. These default rates are the same that appear in table 13 and are average cumulative default rates conditional on survival.

Standard deviations

Many of the tables and charts in this study display averages of default rates, transition rates, and Gini ratios. Often these are issuer-weighted averages. Prior studies have shown that fluctuations in default rates and transitions can vary greatly depending on many circumstances specific to particular time frames, industries, and geographic regions. As a supplement to many of the averages and time series presented in this study, standard deviations are also shown to provide a gauge of the dispersion of data behind these averages.

For the transition matrices in tables 7-11 and 24-27, the standard deviation for each cell in a given matrix is a weighted standard deviation, calculated using the data from each of the underlying cohort years that contribute to the averages, weighted by that cohort year's issuer base for each rating level.

For example, in the average one-year global transition matrix in table 8, each cell's weighted standard deviation is calculated from the series of that particular cell in each of the 44 cohorts beginning with the 1981 cohort and ending with the 2024 cohort. The squared difference between each cohort's transition rate and the weighted average--which is the data point in each cell--is multiplied by each cohort's weight. These weights are based on each cohort's rating level's contribution to the 44-year total issuer base for each rating level. We then divide this by the ratio of the total number of nonzero weights minus one and the total number of nonzero weights.

For the Gini ratios in table 16, the standard deviations are derived from the time series of Gini ratios for all of their constituent annual cohorts. As an example, the standard deviation applied to the seven-year weighted average U.S. Gini ratio in table 16 (5.95) was calculated from the time series of all available seven-year Gini ratios by cohort. In this case, these are the seven-year Gini ratios from the 1981 cohort through the 2018 seven-year cohort. We calculated standard deviations for Gini ratios in this study as the standard deviations of a sample, and not those of a population.

Time sample

This study limits the reporting of default rates to the 15-year time horizon. However, the data was gathered for 44 years, and all calculations are based on the rating experience of that period. In addition, average default statistics become less reliable at longer time horizons as the sample size becomes smaller and the cyclical nature of default rates has a bigger effect on averages.

Appendix 2: Additional Tables

Table 17

U.S. corporate default rates by rating category (%)
	AAA	AA	A	BBB	BB	B	CCC/C
1981	0.00	0.00	0.00	0.00	0.00	2.33	0.00
1982	0.00	0.00	0.22	0.35	4.29	3.18	21.43
1983	0.00	0.00	0.00	0.34	1.18	4.70	6.67
1984	0.00	0.00	0.00	0.69	1.18	3.49	25.00
1985	0.00	0.00	0.00	0.00	1.54	6.57	15.38
1986	0.00	0.00	0.18	0.34	0.90	8.87	23.08
1987	0.00	0.00	0.00	0.00	0.39	3.15	12.28
1988	0.00	0.00	0.00	0.00	1.07	3.71	20.37
1989	0.00	0.00	0.00	0.62	0.73	3.43	31.37
1990	0.00	0.00	0.00	0.59	3.23	8.66	31.82
1991	0.00	0.00	0.00	0.56	1.68	13.73	32.76
1992	0.00	0.00	0.00	0.00	0.00	7.17	31.37
1993	0.00	0.00	0.00	0.00	0.72	2.26	14.29
1994	0.00	0.00	0.00	0.00	0.30	3.15	17.39
1995	0.00	0.00	0.00	0.20	1.09	4.52	30.43
1996	0.00	0.00	0.00	0.00	0.25	3.07	8.70
1997	0.00	0.00	0.00	0.16	0.23	3.84	8.33
1998	0.00	0.00	0.00	0.14	0.43	3.61	42.86
1999	0.00	0.32	0.27	0.28	0.97	6.73	37.50
2000	0.00	0.00	0.42	0.42	1.70	8.47	42.19
2001	0.00	0.00	0.29	0.53	2.54	11.77	50.62
2002	0.00	0.00	0.00	1.30	2.48	6.23	34.62
2003	0.00	0.00	0.00	0.00	0.92	4.10	36.11
2004	0.00	0.00	0.17	0.00	0.55	1.60	20.48
2005	0.00	0.00	0.00	0.13	0.37	2.36	11.11
2006	0.00	0.00	0.00	0.00	0.36	0.66	16.22
2007	0.00	0.00	0.00	0.00	0.36	0.12	16.90
2008	0.00	0.96	0.75	0.73	1.14	4.04	31.43
2009	0.00	0.00	0.19	0.58	0.87	11.14	50.35
2010	0.00	0.00	0.00	0.00	0.00	1.24	23.23
2011	0.00	0.00	0.00	0.14	0.00	1.77	17.24
2012	0.00	0.00	0.00	0.00	0.00	1.13	30.85
2013	0.00	0.00	0.00	0.00	0.00	0.90	29.41
2014	0.00	0.00	0.00	0.00	0.00	0.55	26.25
2015	0.00	0.00	0.00	0.00	0.18	2.43	30.99
2016	0.00	0.00	0.00	0.00	0.56	3.76	41.96
2017	0.00	0.00	0.00	0.00	0.18	1.14	27.89
2018	0.00	0.00	0.00	0.00	0.00	0.54	29.37
2019	0.00	0.00	0.00	0.27	0.00	1.34	32.09
2020	0.00	0.00	0.00	0.00	1.28	3.61	48.70
2021	0.00	0.00	0.00	0.00	0.00	0.45	8.76
2022	0.00	0.00	0.00	0.00	0.19	0.74	12.79
2023	0.00	0.00	0.00	0.27	0.00	1.29	34.55
2024	0.00	0.00	0.00	0.00	0.19	2.32	29.30
Average	0.00	0.03	0.06	0.20	0.77	3.86	26.01
Median	0.00	0.00	0.00	0.00	0.41	3.17	28.60
Standard deviation	0.00	0.15	0.15	0.29	0.93	3.24	12.23
Minimum	0.00	0.00	0.00	0.00	0.00	0.12	0.00
Maximum	0.00	0.96	0.75	1.30	4.29	13.73	50.62
Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Table 18

Summary of one-year U.S. corporate rating transitions
		--Investment-grade rating distribution at year-end--					--Speculative-grade rating distribution at year-end--
Year	Jan. 1 inv. grade	Inv. grade (%)	Spec. grade* (%)	Defaulted§ (%)	Rating withdrawn (%)	Jan. 1 spec. grade	Inv. grade† (%)	Spec. grade (%)	Defaulted (%)	Rating withdrawn (%)
1981	1,002	97.31	1.40	0.00	1.30	316	4.75	89.87	0.63	4.75
1982	1,029	93.49	3.01	0.19	3.30	334	2.69	80.24	4.49	12.57
1983	1,041	93.95	2.21	0.10	3.75	333	3.30	83.18	3.00	10.51
1984	1,089	95.22	2.30	0.18	2.30	358	4.47	87.43	3.35	4.75
1985	1,118	92.84	3.67	0.00	3.49	406	3.94	85.96	4.43	5.67
1986	1,246	89.97	3.77	0.16	6.10	516	3.29	81.98	5.81	8.91
1987	1,243	90.02	3.38	0.00	6.60	663	3.77	79.03	2.87	14.33
1988	1,231	91.39	3.01	0.00	5.61	739	3.25	79.97	3.92	12.86
1989	1,242	92.91	2.98	0.16	3.95	734	5.31	75.20	4.36	15.12
1990	1,260	94.05	2.38	0.16	3.41	681	3.23	75.33	7.93	13.51
1991	1,247	95.75	2.00	0.16	2.09	580	3.10	78.10	10.69	8.10
1992	1,325	96.30	1.28	0.00	2.42	512	6.45	78.32	6.25	8.98
1993	1,423	91.85	1.83	0.00	6.32	542	4.80	77.49	2.40	15.31
1994	1,437	95.69	0.84	0.00	3.48	678	4.13	85.55	2.21	8.11
1995	1,524	94.62	1.38	0.07	3.94	765	3.53	84.84	3.66	7.97
1996	1,590	93.84	0.82	0.00	5.35	808	4.95	80.45	1.86	12.75
1997	1,695	92.80	0.94	0.06	6.19	873	4.35	81.33	2.18	12.14
1998	1,839	91.08	1.47	0.05	7.40	1,044	3.54	83.91	3.26	9.29
1999	1,867	90.89	1.93	0.27	6.91	1,255	1.43	82.15	5.34	11.08
2000	1,843	90.34	2.33	0.33	7.00	1,300	1.92	83.15	7.38	7.54
2001	1,803	91.18	2.55	0.33	5.93	1,263	1.58	79.02	10.53	8.87
2002	1,770	88.47	4.52	0.56	6.44	1,133	1.32	83.50	7.24	7.94
2003	1,644	91.73	2.74	0.00	5.54	1,162	1.38	83.48	5.59	9.55
2004	1,584	93.12	1.64	0.06	5.18	1,190	2.02	84.37	2.44	11.18
2005	1,553	93.95	2.25	0.06	3.73	1,289	1.94	83.55	2.02	12.49
2006	1,530	93.33	1.90	0.00	4.77	1,386	1.73	85.14	1.37	11.76
2007	1,526	91.61	2.88	0.00	5.50	1,474	1.63	83.85	1.02	13.50
2008	1,480	91.35	2.36	0.74	5.54	1,537	1.89	84.19	4.29	9.63
2009	1,450	90.69	3.66	0.34	5.31	1,409	0.92	78.50	11.78	8.80
2010	1,377	96.01	0.80	0.00	3.20	1,300	1.62	86.46	3.46	8.46
2011	1,383	94.94	1.30	0.07	3.69	1,395	1.22	85.88	2.15	10.75
2012	1,390	95.97	0.86	0.00	3.17	1,471	1.50	86.88	2.65	8.97
2013	1,392	96.70	0.72	0.00	2.59	1,556	2.06	84.83	2.19	10.93
2014	1,424	97.05	0.91	0.00	2.04	1,680	1.01	86.73	1.61	10.65
2015	1,471	95.04	0.95	0.00	4.01	1,822	1.10	84.58	2.85	11.47
2016	1,469	92.99	1.77	0.00	5.24	1,770	1.53	82.71	5.20	10.56
2017	1,431	94.97	0.98	0.00	4.05	1,747	0.86	83.74	3.09	12.31
2018	1,413	95.90	0.85	0.00	3.26	1,779	0.96	84.77	2.42	11.86
2019	1,410	95.53	0.92	0.14	3.40	1,893	0.53	85.95	3.12	10.41
2020	1,391	94.46	2.59	0.00	2.95	1,863	0.32	84.43	6.66	8.59
2021	1,368	95.69	0.80	0.00	3.51	1,881	1.49	81.71	1.54	15.26
2022	1,380	96.09	0.72	0.00	3.19	1,922	1.30	85.69	1.66	11.34
2023	1,380	96.30	1.16	0.14	2.39	1,786	1.12	85.55	4.48	8.85
2024	1,375	96.95	0.80	0.00	2.25	1,678	1.01	83.73	5.13	10.13
Weighted average		93.59	1.89	0.11	4.42		1.90	83.48	3.99	10.63
Median		93.95	1.80	0.00	3.84		1.90	83.74	3.30	10.54
Standard deviation		2.28	1.01	0.16	1.58		1.50	3.26	2.60	2.55
Minimum		88.47	0.72	0.00	1.30		0.32	75.20	0.63	4.75
Maximum		97.31	4.52	0.74	7.40		6.45	89.87	11.78	15.31
*Fallen angels that survived to Jan. 1 of the year after they were downgraded. §Investment-grade defaulters. †Rising stars. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Table 19

Static pool cumulative corporate default rates among all U.S. rated issuers (1981-2024) (%)
		-- Time horizon (years) --
Year	Issuers	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15
1981	1,318	0.15	1.44	2.20	3.03	3.72	5.16	5.61	6.45	7.06	8.19	9.94	10.39	10.93	11.00	11.23
1982	1,363	1.25	1.98	2.86	3.60	5.06	5.43	6.24	6.75	7.92	9.83	10.34	10.93	11.01	11.23	11.23
1983	1,374	0.80	1.67	2.55	4.29	4.73	5.82	6.33	7.50	9.61	10.19	10.77	10.84	11.06	11.06	11.14
1984	1,447	0.97	2.07	4.08	4.56	5.67	6.43	7.67	9.47	10.09	10.71	10.78	10.99	10.99	11.13	11.13
1985	1,524	1.18	3.28	3.87	5.31	6.23	7.61	9.58	10.17	10.70	10.76	11.09	11.09	11.22	11.22	11.55
1986	1,762	1.82	2.44	3.80	4.71	6.19	8.17	8.85	9.42	9.59	9.88	9.99	10.22	10.33	10.56	10.95
1987	1,906	1.00	2.52	4.04	5.98	8.66	9.81	10.60	10.81	11.18	11.33	11.54	11.65	11.91	12.38	13.48
1988	1,970	1.47	3.20	5.48	8.73	9.90	10.71	10.91	11.42	11.57	11.88	12.08	12.39	13.10	14.06	15.13
1989	1,976	1.72	4.50	8.20	9.46	10.32	10.63	11.08	11.23	11.54	11.94	12.25	12.90	13.92	14.93	15.44
1990	1,941	2.89	6.44	7.99	8.86	9.17	9.69	9.79	10.20	10.72	11.13	11.95	12.98	14.12	14.68	14.84
1991	1,827	3.50	5.20	5.80	6.13	6.73	6.84	7.22	7.72	8.16	8.92	10.07	11.33	11.88	12.10	12.26
1992	1,837	1.74	2.34	2.67	3.32	3.48	3.86	4.35	4.74	5.55	6.64	7.89	8.38	8.60	8.76	8.93
1993	1,965	0.66	1.17	2.19	2.44	2.90	3.41	3.87	4.78	6.06	7.38	7.89	8.09	8.30	8.55	8.70
1994	2,115	0.71	2.03	2.51	3.07	3.59	4.49	5.72	7.23	8.56	9.13	9.41	9.60	9.88	10.02	10.73
1995	2,289	1.27	1.83	2.45	3.10	4.06	5.33	7.34	8.78	9.44	9.74	10.00	10.27	10.40	11.05	12.15
1996	2,398	0.63	1.33	2.25	3.50	4.84	6.80	8.38	9.13	9.47	9.72	9.97	10.13	10.84	11.93	12.09
1997	2,568	0.78	1.95	3.39	5.22	7.52	9.31	10.24	10.59	10.86	11.21	11.41	12.23	13.36	13.47	13.63
1998	2,883	1.21	3.30	5.97	8.91	10.86	12.11	12.70	13.11	13.53	13.74	14.57	15.82	15.96	16.13	16.30
1999	3,122	2.31	5.48	9.26	11.92	13.45	14.16	14.64	15.09	15.31	16.37	17.87	18.13	18.32	18.55	18.67
2000	3,143	3.25	7.51	10.31	12.19	13.14	13.78	14.25	14.51	15.72	17.59	17.85	18.10	18.33	18.55	18.61
2001	3,066	4.53	7.70	9.98	10.99	11.71	12.20	12.46	13.67	15.69	15.95	16.21	16.47	16.76	16.83	17.06
2002	2,903	3.17	5.61	6.75	7.41	7.89	8.16	9.58	11.92	12.19	12.47	12.75	13.06	13.12	13.33	13.71
2003	2,806	2.32	3.46	4.17	4.74	5.02	6.52	9.23	9.59	9.87	10.26	10.62	10.73	10.94	11.33	11.69
2004	2,774	1.08	1.91	2.52	2.88	4.54	7.57	8.04	8.44	8.83	9.16	9.30	9.52	9.95	10.31	10.49
2005	2,842	0.95	1.62	2.11	4.12	7.67	8.34	8.83	9.25	9.61	9.82	10.17	10.63	10.98	11.15	11.51
2006	2,916	0.65	1.20	3.60	7.65	8.54	9.22	9.81	10.22	10.43	10.87	11.42	11.76	11.97	12.31	12.86
2007	3,000	0.50	3.10	7.77	8.97	9.63	10.37	10.87	11.17	11.70	12.30	12.67	12.83	13.20	13.83	13.83
2008	3,017	2.55	7.86	9.35	10.01	10.84	11.30	11.67	12.26	12.86	13.26	13.56	13.89	14.65	14.68	14.95
2009	2,859	5.98	7.66	8.39	9.30	9.76	10.14	10.77	11.47	11.89	12.21	12.52	13.33	13.36	13.61	13.82
2010	2,677	1.68	2.76	3.88	4.41	4.93	5.57	6.57	7.13	7.47	7.92	8.93	8.97	9.19	9.38	9.64
2011	2,778	1.12	2.48	3.20	3.78	4.61	5.87	6.52	6.88	7.31	8.35	8.46	8.68	8.89	9.25
2012	2,861	1.36	2.38	2.94	3.88	5.35	6.12	6.64	7.13	8.28	8.39	8.60	8.88	9.30
2013	2,948	1.15	1.87	3.22	5.02	5.94	6.51	7.02	8.31	8.41	8.72	8.99	9.46
2014	3,104	0.87	2.32	4.54	5.80	6.60	7.28	8.80	8.89	9.18	9.57	10.12
2015	3,293	1.58	4.16	5.50	6.35	7.23	9.14	9.35	9.69	10.05	10.63
2016	3,239	2.84	4.26	5.28	6.14	8.37	8.68	9.05	9.48	10.13
2017	3,178	1.70	2.93	4.15	6.86	7.33	7.80	8.31	9.00
2018	3,192	1.35	2.82	5.92	6.52	7.08	7.86	8.62
2019	3,303	1.85	5.33	5.96	6.57	7.72	8.72
2020	3,254	3.81	4.55	5.26	6.61	7.71
2021	3,249	0.89	1.75	3.54	4.89
2022	3,302	0.97	3.21	5.06
2023	3,166	2.59	4.80
2024	3,053	2.82
Summary statistics
Marginal average		1.85	1.80	1.60	1.36	1.15	0.99	0.83	0.71	0.65	0.61	0.52	0.44	0.41	0.37	0.36
Cumulative average		1.85	3.61	5.16	6.44	7.52	8.43	9.19	9.84	10.42	10.96	11.43	11.81	12.17	12.50	12.81
Standard deviation		1.18	1.91	2.35	2.60	2.67	2.58	2.49	2.44	2.44	2.45	2.48	2.57	2.62	2.63	2.59
Median		1.36	2.82	4.12	5.80	7.15	7.86	8.84	9.47	9.96	10.26	10.70	10.99	11.14	11.93	12.20
Minimum		0.15	1.17	2.11	2.44	2.90	3.41	3.87	4.74	5.55	6.64	7.89	8.09	8.30	8.55	8.70
Maximum		5.98	7.86	10.31	12.19	13.45	14.16	14.64	15.09	15.72	17.59	17.87	18.13	18.33	18.55	18.67
Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Table 20

Static pool cumulative corporate default rates among U.S. investment-grade rated issuers (1981-2024) (%)
		-- Time horizon (years) --
Year	Issuers	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15
1981	1,002	0.00	0.40	0.40	0.50	0.70	1.10	1.40	2.20	2.40	3.19	4.29	4.49	4.69	4.69	4.89
1982	1,029	0.19	0.29	0.39	0.58	1.07	1.36	2.14	2.33	3.21	4.37	4.66	4.96	4.96	5.15	5.15
1983	1,041	0.10	0.38	0.48	0.96	1.15	1.63	1.73	2.59	3.75	4.13	4.42	4.42	4.61	4.61	4.61
1984	1,089	0.18	0.28	0.64	0.83	1.19	1.38	2.11	3.12	3.49	3.76	3.76	3.95	3.95	4.04	4.04
1985	1,118	0.00	0.18	0.27	0.81	0.98	1.79	2.86	3.22	3.49	3.49	3.76	3.76	3.94	3.94	4.11
1986	1,246	0.16	0.16	0.56	0.72	1.28	2.25	2.65	2.81	2.81	3.05	3.05	3.21	3.29	3.37	3.69
1987	1,243	0.00	0.16	0.40	0.88	1.85	2.41	2.57	2.57	2.74	2.74	2.90	2.98	3.06	3.22	4.10
1988	1,231	0.00	0.24	0.41	1.06	1.62	1.79	1.79	1.95	1.95	2.11	2.11	2.19	2.36	3.09	3.98
1989	1,242	0.16	0.32	0.64	1.29	1.45	1.45	1.61	1.61	1.61	1.61	1.77	1.93	2.82	3.54	3.95
1990	1,260	0.16	0.40	0.87	1.11	1.11	1.27	1.27	1.27	1.35	1.67	2.06	2.86	3.49	3.89	3.97
1991	1,247	0.16	0.32	0.48	0.48	0.64	0.64	0.64	0.72	1.12	1.52	2.41	3.05	3.37	3.45	3.53
1992	1,325	0.00	0.08	0.08	0.23	0.23	0.23	0.30	0.60	0.91	1.58	2.11	2.42	2.49	2.64	2.87
1993	1,423	0.00	0.00	0.14	0.14	0.21	0.42	0.77	1.19	1.97	2.67	2.95	2.95	3.09	3.23	3.30
1994	1,437	0.00	0.14	0.14	0.28	0.35	0.84	1.18	1.95	2.57	2.92	2.99	3.06	3.20	3.27	3.76
1995	1,524	0.07	0.07	0.13	0.20	0.79	1.12	1.97	2.56	2.89	2.95	3.02	3.15	3.22	3.74	4.20
1996	1,590	0.00	0.06	0.06	0.57	1.01	1.89	2.39	2.70	2.77	2.83	2.96	2.96	3.52	4.09	4.15
1997	1,695	0.06	0.12	0.53	1.00	1.71	2.30	2.65	2.71	2.77	2.95	2.95	3.54	4.07	4.13	4.31
1998	1,839	0.05	0.49	1.03	1.69	2.39	2.83	2.99	3.15	3.26	3.26	3.92	4.62	4.73	4.95	5.17
1999	1,867	0.27	0.75	1.29	1.87	2.36	2.46	2.62	2.79	2.79	3.54	4.45	4.55	4.77	5.03	5.09
2000	1,843	0.33	0.81	1.25	1.79	1.84	2.06	2.22	2.22	3.09	4.07	4.18	4.45	4.67	4.72	4.77
2001	1,803	0.33	0.89	1.33	1.50	1.72	1.89	1.89	2.66	3.77	3.83	4.10	4.38	4.49	4.49	4.60
2002	1,770	0.56	0.96	1.13	1.30	1.36	1.36	2.15	3.16	3.22	3.45	3.73	3.84	3.84	3.95	4.07
2003	1,644	0.00	0.18	0.36	0.43	0.43	1.22	2.31	2.37	2.55	2.68	2.80	2.80	2.92	3.04	3.16
2004	1,584	0.06	0.19	0.25	0.25	1.07	2.08	2.21	2.40	2.53	2.65	2.65	2.78	2.90	2.97	3.03
2005	1,553	0.06	0.13	0.13	1.09	2.06	2.25	2.45	2.58	2.70	2.70	2.83	2.96	2.96	3.03	3.16
2006	1,530	0.00	0.00	0.98	1.63	1.83	2.03	2.09	2.22	2.22	2.29	2.42	2.42	2.42	2.48	2.61
2007	1,526	0.00	0.85	1.51	1.77	1.97	2.03	2.16	2.16	2.16	2.29	2.29	2.29	2.36	2.56	2.56
2008	1,480	0.74	1.22	1.42	1.69	1.76	1.82	1.82	1.82	1.96	1.96	2.03	2.09	2.23	2.23	2.36
2009	1,450	0.34	0.48	0.69	0.76	0.76	0.76	0.76	0.90	0.90	0.97	1.03	1.17	1.17	1.31	1.45
2010	1,377	0.00	0.07	0.15	0.15	0.15	0.15	0.29	0.29	0.44	0.58	0.65	0.65	0.80	0.94	1.16
2011	1,383	0.07	0.14	0.14	0.14	0.14	0.36	0.36	0.51	0.65	0.80	0.80	0.94	1.08	1.37
2012	1,390	0.00	0.00	0.00	0.00	0.22	0.22	0.36	0.50	0.65	0.65	0.79	0.94	1.15
2013	1,392	0.00	0.00	0.00	0.14	0.14	0.29	0.43	0.65	0.65	0.86	1.01	1.22
2014	1,424	0.00	0.00	0.14	0.14	0.28	0.42	0.70	0.70	0.91	1.05	1.26
2015	1,471	0.00	0.00	0.00	0.14	0.27	0.54	0.61	0.75	0.88	1.02
2016	1,469	0.00	0.00	0.14	0.27	0.61	0.68	0.82	0.95	1.09
2017	1,431	0.00	0.00	0.14	0.35	0.42	0.56	0.70	0.84
2018	1,413	0.00	0.14	0.21	0.28	0.42	0.57	0.71
2019	1,410	0.14	0.21	0.28	0.35	0.50	0.64
2020	1,391	0.00	0.00	0.07	0.22	0.36
2021	1,368	0.00	0.00	0.15	0.22
2022	1,380	0.00	0.14	0.22
2023	1,380	0.14	0.22
2024	1,375	0.00
Summary statistics
Marginal average		0.11	0.17	0.21	0.26	0.28	0.28	0.27	0.26	0.26	0.26	0.24	0.19	0.19	0.19	0.20
Cumulative average		0.11	0.28	0.49	0.75	1.02	1.31	1.57	1.83	2.08	2.33	2.57	2.75	2.94	3.12	3.31
Standard deviation		0.16	0.30	0.44	0.57	0.68	0.76	0.85	0.92	1.01	1.09	1.15	1.17	1.15	1.08	1.01
Median		0.00	0.16	0.32	0.57	1.00	1.36	1.81	2.20	2.46	2.68	2.86	2.96	3.21	3.45	3.97
Minimum		0.00	0.00	0.00	0.00	0.14	0.15	0.29	0.29	0.44	0.58	0.65	0.65	0.80	0.94	1.16
Maximum		0.74	1.22	1.51	1.87	2.39	2.83	2.99	3.22	3.77	4.37	4.66	4.96	4.96	5.15	5.17
Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Table 21

Static pool cumulative corporate default rates among U.S. speculative-grade rated issuers (1981-2024) (%)
		-- Time horizon (years) --
Year	Issuers	1	2	3	4	5	6	7	8	9	10	11	12	13	14	15
1981	316	0.63	4.75	7.91	11.08	13.29	18.04	18.99	19.94	21.84	24.05	27.85	29.11	30.70	31.01	31.33
1982	334	4.49	7.19	10.48	12.87	17.37	17.96	18.86	20.36	22.46	26.65	27.84	29.34	29.64	29.94	29.94
1983	333	3.00	5.71	9.01	14.71	15.92	18.92	20.72	22.82	27.93	29.13	30.63	30.93	31.23	31.23	31.53
1984	358	3.35	7.54	14.53	15.92	19.27	21.79	24.58	28.77	30.17	31.84	32.12	32.40	32.40	32.68	32.68
1985	406	4.43	11.82	13.79	17.73	20.69	23.65	28.08	29.31	30.54	30.79	31.28	31.28	31.28	31.28	32.02
1986	516	5.81	7.95	11.63	14.34	18.02	22.48	23.84	25.39	25.97	26.36	26.74	27.13	27.33	27.91	28.49
1987	663	2.87	6.94	10.86	15.54	21.42	23.68	25.64	26.24	27.00	27.45	27.75	27.90	28.51	29.56	31.07
1988	739	3.92	8.12	13.94	21.52	23.68	25.58	26.12	27.20	27.60	28.15	28.69	29.36	30.99	32.34	33.69
1989	734	4.36	11.58	20.98	23.30	25.34	26.16	27.11	27.52	28.34	29.43	29.97	31.47	32.70	34.20	34.88
1990	681	7.93	17.62	21.15	23.20	24.08	25.26	25.55	26.73	28.05	28.63	30.25	31.72	33.77	34.65	34.95
1991	580	10.69	15.69	17.24	18.28	19.83	20.17	21.38	22.76	23.28	24.83	26.55	29.14	30.17	30.69	31.03
1992	512	6.25	8.20	9.38	11.33	11.91	13.28	14.84	15.43	17.58	19.73	22.85	23.83	24.41	24.61	24.61
1993	542	2.40	4.24	7.56	8.49	9.96	11.25	11.99	14.21	16.79	19.74	20.85	21.59	21.96	22.51	22.88
1994	678	2.21	6.05	7.52	9.00	10.47	12.24	15.34	18.44	21.24	22.27	23.01	23.45	24.04	24.34	25.52
1995	765	3.66	5.36	7.06	8.89	10.59	13.73	18.04	21.18	22.48	23.27	23.92	24.44	24.71	25.62	27.97
1996	808	1.86	3.84	6.56	9.28	12.38	16.46	20.17	21.78	22.65	23.27	23.76	24.26	25.25	27.35	27.72
1997	873	2.18	5.50	8.93	13.40	18.79	22.91	24.97	25.89	26.58	27.26	27.84	29.10	31.39	31.62	31.73
1998	1,044	3.26	8.24	14.66	21.65	25.77	28.45	29.79	30.65	31.61	32.18	33.33	35.54	35.73	35.82	35.92
1999	1,255	5.34	12.51	21.12	26.85	29.96	31.55	32.51	33.39	33.94	35.46	37.85	38.33	38.49	38.65	38.88
2000	1,300	7.38	17.00	23.15	26.92	29.15	30.38	31.31	31.92	33.62	36.77	37.23	37.46	37.69	38.15	38.23
2001	1,263	10.53	17.42	22.33	24.54	25.97	26.92	27.55	29.37	32.70	33.25	33.49	33.73	34.28	34.44	34.84
2002	1,133	7.24	12.89	15.53	16.95	18.09	18.80	21.18	25.60	26.21	26.57	26.83	27.45	27.63	27.98	28.77
2003	1,162	5.59	8.09	9.55	10.84	11.53	14.03	19.02	19.79	20.22	21.00	21.69	21.94	22.29	23.06	23.75
2004	1,190	2.44	4.20	5.55	6.39	9.16	14.87	15.80	16.47	17.23	17.82	18.15	18.49	19.33	20.08	20.42
2005	1,289	2.02	3.41	4.50	7.76	14.43	15.67	16.52	17.30	17.92	18.39	19.01	19.86	20.64	20.95	21.57
2006	1,386	1.37	2.53	6.49	14.29	15.95	17.17	18.33	19.05	19.48	20.35	21.36	22.08	22.51	23.16	24.17
2007	1,474	1.02	5.43	14.25	16.42	17.57	19.00	19.88	20.49	21.57	22.66	23.41	23.74	24.42	25.51	25.51
2008	1,537	4.29	14.25	16.98	18.02	19.58	20.43	21.15	22.32	23.36	24.14	24.66	25.24	26.61	26.68	27.07
2009	1,409	11.78	15.05	16.32	18.10	19.02	19.80	21.08	22.36	23.21	23.78	24.34	25.83	25.90	26.26	26.54
2010	1,300	3.46	5.62	7.85	8.92	10.00	11.31	13.23	14.38	14.92	15.69	17.69	17.77	18.08	18.31	18.62
2011	1,395	2.15	4.80	6.24	7.38	9.03	11.33	12.62	13.19	13.91	15.84	16.06	16.34	16.63	17.06
2012	1,471	2.65	4.62	5.71	7.55	10.20	11.69	12.58	13.39	15.50	15.70	15.98	16.38	17.00
2013	1,556	2.19	3.53	6.11	9.38	11.12	12.08	12.92	15.17	15.36	15.75	16.13	16.84
2014	1,680	1.61	4.29	8.27	10.60	11.96	13.10	15.65	15.83	16.19	16.79	17.62
2015	1,822	2.85	7.52	9.93	11.36	12.84	16.08	16.41	16.90	17.45	18.39
2016	1,770	5.20	7.80	9.55	11.02	14.80	15.31	15.88	16.55	17.63
2017	1,747	3.09	5.32	7.44	12.19	12.99	13.74	14.54	15.68
2018	1,779	2.42	4.95	10.46	11.47	12.37	13.66	14.90
2019	1,893	3.12	9.14	10.20	11.20	13.10	14.74
2020	1,863	6.66	7.94	9.13	11.38	13.20
2021	1,881	1.54	3.03	6.01	8.29
2022	1,922	1.66	5.41	8.53
2023	1,786	4.48	8.34
2024	1,678	5.13
Summary statistics
Marginal average		3.99	3.91	3.51	2.93	2.47	2.10	1.74	1.48	1.33	1.24	1.07	0.91	0.86	0.75	0.71
Cumulative average		3.99	7.74	10.98	13.59	15.72	17.49	18.93	20.13	21.20	22.18	23.01	23.71	24.36	24.93	25.46
Standard deviation		2.60	4.17	5.11	5.61	5.76	5.69	5.65	5.71	5.80	5.88	5.94	5.99	5.87	5.60	5.21
Median		3.30	7.19	9.55	12.19	15.36	17.96	19.45	21.18	22.57	24.05	25.61	27.13	27.48	27.98	29.36
Minimum		0.63	2.53	4.50	6.39	9.03	11.25	11.99	13.19	13.91	15.69	15.98	16.34	16.63	17.06	18.62
Maximum		11.78	17.62	23.15	26.92	29.96	31.55	32.51	33.39	33.94	36.77	37.85	38.33	38.49	38.65	38.88
Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Table 22

Initial-to-last transition rates by rating modifier for U.S. nonfinancials (1981-2024) (%)
From/to	Issuers	AAA	AA+	AA	AA-	A+	A	A-	BBB+	BBB	BBB-	BB+	BB	BB-	B+	B	B-	CCC/C	D	NR
AAA	91	1.10	0.00	0.00	3.30	3.30	3.30	2.20	2.20	0.00	1.10	0.00	0.00	0.00	0.00	0.00	0.00	0.00	3.30	80.22
AA+	27	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	3.70	0.00	0.00	0.00	0.00	0.00	0.00	3.70	0.00	7.41	85.19
AA	195	0.51	0.51	0.00	2.05	3.08	3.59	7.18	7.18	3.08	0.51	1.54	0.00	0.00	0.00	0.00	0.00	0.00	4.62	66.15
AA-	95	0.00	0.00	0.00	4.21	1.05	5.26	2.11	9.47	8.42	2.11	1.05	1.05	0.00	0.00	0.00	1.05	0.00	2.11	62.11
A+	179	0.00	0.00	0.00	1.68	6.70	2.23	7.26	6.70	2.79	0.56	0.56	1.12	0.00	1.12	0.00	0.00	0.00	6.70	62.57
A	483	0.00	0.21	0.21	0.00	0.41	3.73	4.76	5.80	6.00	2.48	0.21	0.62	0.41	0.21	0.41	0.83	0.00	7.45	66.25
A-	216	0.00	0.00	0.00	0.00	0.46	2.78	8.33	9.72	4.63	2.31	1.85	1.85	0.00	0.46	0.00	0.00	0.00	8.33	59.26
BBB+	239	0.00	0.00	0.00	0.00	1.26	2.09	5.02	15.90	8.37	0.84	1.26	0.84	0.00	0.00	0.00	0.84	0.00	9.62	53.97
BBB	507	0.00	0.00	0.00	0.20	0.00	0.59	4.34	7.10	11.24	2.76	1.38	1.38	0.99	0.39	0.00	0.00	0.00	11.24	58.38
BBB-	432	0.00	0.00	0.00	0.00	0.23	0.69	2.78	4.17	8.80	7.18	0.69	1.39	1.39	0.69	0.46	0.23	0.69	10.88	59.72
BB+	281	0.00	0.00	0.00	0.36	0.00	0.71	0.71	2.49	3.20	4.98	10.32	4.27	1.42	0.71	0.36	0.36	1.07	11.74	57.30
BB	543	0.00	0.00	0.00	0.00	0.18	0.18	0.00	1.47	1.84	1.66	4.60	6.63	3.31	1.47	1.10	0.55	0.18	17.68	59.12
BB-	1,088	0.00	0.00	0.00	0.00	0.00	0.18	0.28	0.46	0.83	1.56	2.30	2.85	5.79	2.02	2.02	1.01	0.37	27.39	52.94
B+	1,988	0.00	0.00	0.00	0.05	0.00	0.05	0.15	0.15	0.45	0.45	0.75	0.91	2.06	4.28	0.96	1.11	0.40	29.12	59.10
B	2,458	0.00	0.00	0.04	0.00	0.00	0.00	0.08	0.04	0.16	0.04	0.41	0.53	1.42	1.87	8.95	4.56	1.83	22.62	57.45
B-	1,079	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.09	0.37	0.09	0.37	0.37	0.65	1.20	2.97	15.57	3.34	26.41	48.56
CCC/C	632	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.47	0.00	0.16	0.16	0.47	0.32	0.47	1.27	1.74	12.03	48.73	34.18
NR--Not rated. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Table 23

Initial-to-last transition rates by rating modifier for U.S. financials (1981-2024) (%)
From/to	Issuers	AAA	AA+	AA	AA-	A+	A	A-	BBB+	BBB	BBB-	BB+	BB	BB-	B+	B	B-	CCC/C	D	NR
AAA	153	0.00	16.34	9.80	5.23	7.84	3.92	2.61	1.31	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	2.61	50.33
AA+	46	0.00	2.17	4.35	0.00	17.39	10.87	2.17	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	2.17	60.87
AA	162	0.00	1.23	2.47	5.56	4.32	5.56	3.70	1.23	0.62	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	6.79	68.52
AA-	130	0.00	0.77	0.00	10.00	7.69	3.85	4.62	3.08	0.77	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	3.85	65.38
A+	198	0.00	0.00	0.00	3.03	17.68	5.56	3.54	1.52	1.01	0.51	0.00	0.00	0.00	0.00	0.00	0.00	0.00	2.02	65.15
A	242	0.00	0.41	1.24	0.41	9.09	11.16	7.44	3.31	1.65	0.83	0.00	0.41	0.41	0.00	0.00	0.00	0.00	3.72	59.92
A-	208	0.00	0.00	0.48	0.48	6.73	6.73	16.35	5.29	3.37	1.44	0.00	0.00	0.00	0.00	0.00	0.00	0.00	3.85	55.29
BBB+	168	0.00	0.00	0.00	0.00	1.19	1.79	6.55	14.88	4.76	0.60	1.19	0.60	0.00	0.00	0.00	0.00	0.00	4.76	63.69
BBB	208	0.00	0.00	0.00	0.00	0.48	0.96	4.81	2.88	16.83	4.33	0.48	0.00	0.00	0.00	0.48	0.00	0.00	5.77	62.98
BBB-	215	0.00	0.00	0.00	0.47	0.00	0.47	0.47	5.12	5.58	18.60	2.33	1.40	0.47	0.00	0.00	0.00	0.00	7.44	57.67
BB+	84	0.00	0.00	0.00	0.00	0.00	0.00	0.00	3.57	5.95	3.57	19.05	0.00	1.19	2.38	0.00	0.00	0.00	13.10	51.19
BB	94	0.00	0.00	0.00	0.00	0.00	1.06	0.00	1.06	2.13	1.06	3.19	11.70	5.32	0.00	0.00	0.00	0.00	13.83	60.64
BB-	106	0.00	0.00	0.00	0.00	0.00	0.00	0.00	1.89	1.89	0.94	0.00	7.55	13.21	5.66	0.00	1.89	0.00	16.04	50.94
B+	121	0.00	0.00	0.00	0.83	0.00	0.00	0.83	0.83	2.48	0.83	0.00	1.65	1.65	9.09	4.13	2.48	0.83	14.88	59.50
B	129	0.00	0.00	0.00	0.78	0.00	0.00	0.78	0.78	0.00	0.78	0.00	0.00	0.78	2.33	17.05	3.88	0.78	18.60	53.49
B-	48	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	2.08	0.00	0.00	6.25	20.83	4.17	10.42	56.25
CCC/C	36	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	5.56	0.00	0.00	0.00	0.00	0.00	0.00	5.56	41.67	47.22
NR--Not rated. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Table 24

Average multiyear U.S. region corporate transition matrices--all financials (1981-2024) (%)
From/to	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
One year
AAA	88.25	8.80	0.31	0.06	0.13	0.06	0.06	0.00	2.33
	(13.31)	(12.52)	(1.34)	(0.34)	(0.56)	(0.35)	(0.35)	(0.00)	(2.52)
AA	0.49	88.19	6.98	0.36	0.04	0.04	0.06	0.06	3.79
	(0.70)	(7.54)	(6.16)	(0.78)	(0.15)	(0.14)	(0.24)	(0.22)	(2.18)
A	0.04	2.03	89.96	3.27	0.23	0.09	0.02	0.10	4.26
	(0.19)	(1.91)	(5.17)	(2.92)	(0.58)	(0.26)	(0.08)	(0.29)	(2.67)
BBB	0.02	0.24	3.81	86.12	2.39	0.51	0.18	0.30	6.43
	(0.12)	(0.61)	(2.44)	(6.02)	(2.59)	(1.21)	(0.38)	(0.69)	(2.62)
BB	0.00	0.20	0.34	6.92	75.32	5.35	1.13	0.83	9.91
	(0.00)	(0.66)	(0.92)	(6.04)	(10.08)	(4.32)	(2.34)	(1.51)	(5.18)
B	0.00	0.06	0.17	0.46	5.52	76.77	4.01	2.56	10.45
	(0.00)	(0.42)	(0.94)	(1.31)	(5.22)	(10.71)	(4.60)	(4.24)	(5.98)
CCC/C	0.00	0.00	0.00	0.00	2.27	12.73	39.09	28.18	17.73
	(0.00)	(0.00)	(0.00)	(0.00)	(5.81)	(14.22)	(21.91)	(24.81)	(16.33)
Three year
AAA	68.01	21.94	1.38	0.38	0.19	0.13	0.19	0.25	7.54
	(21.03)	(20.90)	(2.49)	(1.49)	(0.64)	(0.50)	(0.58)	(0.78)	(4.89)
AA	1.05	69.54	16.24	1.56	0.18	0.25	0.04	0.25	10.89
	(1.20)	(13.38)	(9.23)	(2.03)	(0.42)	(0.61)	(0.16)	(0.55)	(4.73)
A	0.10	4.74	74.07	6.65	0.88	0.25	0.15	0.51	12.66
	(0.24)	(3.62)	(10.08)	(3.27)	(1.37)	(0.64)	(0.31)	(0.71)	(5.88)
BBB	0.05	0.77	9.04	66.12	3.42	1.08	0.38	1.40	17.73
	(0.21)	(1.26)	(4.21)	(9.95)	(2.50)	(1.43)	(0.78)	(1.69)	(4.88)
BB	0.00	0.27	1.27	14.50	44.93	8.02	1.49	3.88	25.65
	(0.00)	(0.79)	(2.13)	(8.46)	(15.09)	(4.62)	(2.60)	(5.36)	(8.63)
B	0.00	0.00	0.57	2.21	10.94	47.82	3.16	8.73	26.57
	(0.00)	(0.00)	(1.49)	(3.73)	(7.14)	(13.40)	(3.34)	(10.07)	(9.11)
CCC/C	0.00	0.00	0.48	0.96	1.91	15.79	9.57	38.76	32.54
	(0.00)	(0.00)	(4.93)	(3.93)	(5.55)	(19.47)	(14.14)	(24.60)	(21.49)
10 year
AAA	26.78	38.53	7.17	1.70	0.13	0.44	0.13	1.07	24.07
	(18.82)	(23.14)	(6.06)	(3.44)	(0.42)	(0.92)	(0.46)	(1.27)	(7.00)
AA	1.21	34.49	27.30	3.62	0.46	0.46	0.05	1.53	30.89
	(1.46)	(13.36)	(8.48)	(2.13)	(0.63)	(0.73)	(0.15)	(1.78)	(6.04)
A	0.25	6.66	44.50	9.42	1.43	0.38	0.20	2.13	35.03
	(0.50)	(3.09)	(10.25)	(2.92)	(1.25)	(0.50)	(0.37)	(1.57)	(6.84)
BBB	0.12	1.77	11.23	33.20	2.44	1.21	0.26	4.91	44.87
	(0.33)	(2.68)	(2.19)	(9.69)	(1.21)	(1.00)	(0.46)	(2.88)	(6.55)
BB	0.15	0.22	3.23	16.96	10.50	4.99	0.22	12.26	51.47
	(0.58)	(0.68)	(3.84)	(6.35)	(6.41)	(3.72)	(1.03)	(10.30)	(9.22)
B	0.00	0.00	1.97	7.66	8.18	12.01	0.41	21.22	48.55
	(0.00)	(0.00)	(3.70)	(7.24)	(5.21)	(7.10)	(2.11)	(11.88)	(11.36)
CCC/C	0.00	0.00	0.57	1.15	7.47	1.15	0.00	41.95	47.70
	(0.00)	(0.00)	(5.41)	(3.95)	(13.55)	(3.56)	(0.00)	(21.13)	(23.31)
Note: Numbers in parentheses are weighted standard deviations, weighted by the issuer base. NR--Not rated. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Table 25

Average multiyear U.S. region corporate transition matrices--insurance (1981-2024) (%)
From/to	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
One year
AAA	89.30	8.70	0.26	0.00	0.09	0.09	0.09	0.00	1.48
	(12.65)	(11.99)	(1.59)	(0.00)	(0.39)	(0.53)	(0.53)	(0.00)	(2.41)
AA	0.62	88.73	6.52	0.34	0.06	0.06	0.08	0.06	3.54
	(1.21)	(7.45)	(5.60)	(0.88)	(0.22)	(0.19)	(0.60)	(0.21)	(2.58)
A	0.02	2.18	90.86	2.60	0.21	0.09	0.02	0.12	3.92
	(0.10)	(2.55)	(5.51)	(2.65)	(0.59)	(0.33)	(0.09)	(0.29)	(2.50)
BBB	0.00	0.20	4.61	85.71	2.45	0.41	0.33	0.20	6.08
	(0.00)	(0.89)	(3.75)	(7.02)	(3.20)	(1.36)	(0.88)	(0.85)	(3.73)
BB	0.00	0.15	0.46	10.32	72.42	4.01	1.39	0.92	10.32
	(0.00)	(1.19)	(2.00)	(11.71)	(13.41)	(5.38)	(3.75)	(2.63)	(7.83)
B	0.00	0.14	0.28	0.42	5.10	79.75	2.12	1.13	11.05
	(0.00)	(1.09)	(2.44)	(2.36)	(8.28)	(11.52)	(4.12)	(4.29)	(7.33)
CCC/C	0.00	0.00	0.00	0.00	3.17	12.70	36.51	30.16	17.46
	(0.00)	(0.00)	(0.00)	(0.00)	(12.43)	(25.21)	(32.64)	(31.52)	(25.63)
Three year
AAA	69.83	22.17	1.48	0.09	0.17	0.17	0.26	0.35	5.48
	(19.01)	(18.54)	(2.34)	(0.53)	(0.66)	(0.74)	(0.82)	(1.05)	(5.99)
AA	1.41	70.99	15.18	1.56	0.24	0.29	0.06	0.26	10.00
	(2.38)	(12.59)	(7.85)	(1.99)	(0.63)	(0.83)	(0.24)	(0.59)	(4.83)
A	0.06	5.11	76.44	4.98	0.79	0.17	0.17	0.54	11.74
	(0.17)	(5.08)	(11.42)	(3.45)	(1.50)	(0.78)	(0.38)	(1.05)	(5.45)
BBB	0.00	0.75	10.54	66.86	3.25	0.97	0.48	1.23	15.94
	(0.00)	(1.87)	(4.99)	(11.74)	(3.76)	(1.27)	(1.33)	(2.31)	(5.44)
BB	0.00	0.16	2.24	19.52	42.08	5.44	1.44	3.20	25.92
	(0.00)	(1.21)	(4.85)	(14.26)	(16.97)	(5.57)	(4.15)	(5.29)	(12.08)
B	0.00	0.00	1.40	2.65	9.19	51.09	1.25	4.05	30.37
	(0.00)	(0.00)	(4.77)	(7.60)	(10.81)	(14.10)	(2.38)	(8.21)	(14.97)
CCC/C	0.00	0.00	1.61	3.23	1.61	17.74	11.29	40.32	24.19
	(0.00)	(0.00)	(12.86)	(12.54)	(9.02)	(29.74)	(17.52)	(33.68)	(29.76)
10 year
AAA	29.30	36.96	8.87	1.57	0.17	0.61	0.17	1.48	20.87
	(18.74)	(17.12)	(6.78)	(2.86)	(0.59)	(1.37)	(0.67)	(1.63)	(10.14)
AA	1.50	37.61	25.55	3.94	0.70	0.70	0.07	1.74	28.20
	(2.15)	(13.46)	(7.45)	(2.99)	(0.98)	(1.01)	(0.20)	(1.77)	(6.85)
A	0.22	7.36	48.48	6.64	1.38	0.37	0.35	2.15	33.05
	(1.29)	(5.59)	(13.10)	(2.82)	(1.97)	(0.54)	(0.60)	(1.94)	(7.60)
BBB	0.00	1.91	15.44	37.33	1.97	0.78	0.18	3.88	38.52
	(0.00)	(4.56)	(5.46)	(6.65)	(2.55)	(0.68)	(0.75)	(5.58)	(3.71)
BB	0.00	0.57	5.68	19.32	11.17	4.17	0.00	12.69	46.40
	(0.00)	(1.85)	(7.87)	(9.46)	(8.74)	(4.15)	(0.00)	(15.39)	(15.59)
B	0.00	0.00	4.92	14.15	6.77	13.54	0.62	11.69	48.31
	(0.00)	(0.00)	(11.29)	(15.70)	(11.51)	(10.09)	(4.83)	(11.10)	(18.60)
CCC/C	0.00	0.00	1.67	0.00	11.67	0.00	0.00	43.33	43.33
	(0.00)	(0.00)	(13.09)	(0.00)	(23.55)	(0.00)	(0.00)	(33.18)	(33.18)
Note: Numbers in parentheses are weighted standard deviations, weighted by the issuer base. NR--Not rated. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Table 26

Average multiyear U.S. region corporate transition matrices--financial institutions (1981-2024) (%)
From/To	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
One year
AAA	85.49	9.07	0.45	0.23	0.23	0.00	0.00	0.00	4.54
	(22.49)	(19.85)	(1.81)	(2.15)	(2.15)	(0.00)	(0.00)	(0.00)	(6.84)
AA	0.22	87.15	7.90	0.39	0.00	0.00	0.00	0.06	4.28
	(0.74)	(10.22)	(8.69)	(1.06)	(0.00)	(0.00)	(0.00)	(0.29)	(3.61)
A	0.07	1.83	88.75	4.19	0.25	0.09	0.02	0.07	4.72
	(0.33)	(2.44)	(7.13)	(4.99)	(0.91)	(0.27)	(0.14)	(0.47)	(4.11)
BBB	0.03	0.26	3.30	86.39	2.36	0.58	0.08	0.37	6.65
	(0.17)	(0.77)	(2.96)	(6.97)	(3.26)	(1.65)	(0.41)	(1.00)	(3.00)
BB	0.00	0.22	0.29	5.33	76.67	5.98	1.01	0.79	9.72
	(0.00)	(0.85)	(1.17)	(5.66)	(11.18)	(5.92)	(2.23)	(1.95)	(6.16)
B	0.00	0.00	0.10	0.49	5.81	74.70	5.31	3.54	10.04
	(0.00)	(0.00)	(0.91)	(1.61)	(6.23)	(13.33)	(6.08)	(5.97)	(8.03)
CCC/C	0.00	0.00	0.00	0.00	1.91	12.74	40.13	27.39	17.83
	(0.00)	(0.00)	(0.00)	(0.00)	(6.06)	(17.30)	(25.41)	(25.20)	(21.16)
Three year
AAA	63.27	21.32	1.13	1.13	0.23	0.00	0.00	0.00	12.93
	(32.56)	(29.21)	(4.03)	(4.07)	(1.32)	(0.00)	(0.00)	(0.00)	(9.27)
AA	0.35	66.71	18.32	1.56	0.06	0.17	0.00	0.23	12.62
	(0.81)	(17.85)	(12.98)	(2.84)	(0.38)	(0.62)	(0.00)	(0.61)	(8.06)
A	0.17	4.24	70.96	8.82	0.99	0.36	0.12	0.48	13.86
	(0.43)	(4.22)	(11.18)	(5.92)	(1.92)	(0.81)	(0.35)	(1.02)	(8.02)
BBB	0.08	0.79	8.08	65.66	3.54	1.15	0.31	1.52	18.88
	(0.33)	(1.51)	(5.27)	(10.95)	(3.13)	(2.22)	(0.93)	(2.47)	(5.84)
BB	0.00	0.32	0.79	12.00	46.34	9.30	1.51	4.21	25.52
	(0.00)	(1.14)	(1.89)	(8.54)	(17.43)	(6.53)	(3.32)	(6.88)	(10.61)
B	0.00	0.00	0.00	1.92	12.14	45.58	4.47	11.93	23.96
	(0.00)	(0.00)	(0.00)	(3.37)	(9.33)	(16.40)	(4.85)	(13.00)	(10.32)
CCC/C	0.00	0.00	0.00	0.00	2.04	14.97	8.84	38.10	36.05
	(0.00)	(0.00)	(0.00)	(0.00)	(6.25)	(19.65)	(18.17)	(24.89)	(22.98)
10 year
AAA	20.18	42.63	2.72	2.04	0.00	0.00	0.00	0.00	32.43
	(23.22)	(38.26)	(7.47)	(5.82)	(0.00)	(0.00)	(0.00)	(0.00)	(19.98)
AA	0.67	28.50	30.64	3.00	0.00	0.00	0.00	1.13	36.05
	(1.26)	(15.74)	(12.80)	(3.31)	(0.00)	(0.00)	(0.00)	(2.69)	(10.85)
A	0.28	5.88	40.00	12.56	1.48	0.39	0.03	2.12	37.27
	(0.49)	(3.94)	(8.06)	(7.68)	(2.03)	(0.73)	(0.15)	(2.07)	(8.05)
BBB	0.19	1.68	8.54	30.56	2.74	1.49	0.30	5.56	48.93
	(0.47)	(2.44)	(3.56)	(11.78)	(1.68)	(1.55)	(0.64)	(3.19)	(8.67)
BB	0.24	0.00	1.68	15.47	10.07	5.52	0.36	11.99	54.68
	(0.82)	(0.00)	(2.75)	(8.05)	(8.73)	(4.83)	(1.67)	(11.73)	(14.53)
B	0.00	0.00	0.47	4.37	8.89	11.23	0.31	26.05	48.67
	(0.00)	(0.00)	(1.92)	(5.80)	(7.56)	(8.79)	(1.04)	(15.36)	(13.17)
CCC/C	0.00	0.00	0.00	1.75	5.26	1.75	0.00	41.23	50.00
	(0.00)	(0.00)	(0.00)	(6.10)	(10.94)	(5.70)	(0.00)	(18.63)	(20.99)
Note: Numbers in parentheses are weighted standard deviations, weighted by the issuer base. NR--Not rated. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Table 27

Average multiyear U.S. region corporate transition matrices--nonfinancials (1981-2024) (%)
From/to	AAA	AA	A	BBB	BB	B	CCC/C	D	NR
One year
AAA	86.29	8.09	1.01	0.00	0.22	0.00	0.00	0.00	4.38
	(9.32)	(8.73)	(2.06)	(0.00)	(0.66)	(0.00)	(0.00)	(0.00)	(5.69)
AA	0.46	86.98	7.33	0.76	0.11	0.16	0.00	0.00	4.20
	(0.66)	(6.96)	(4.72)	(1.17)	(0.32)	(0.42)	(0.00)	(0.00)	(3.29)
A	0.04	1.19	88.15	6.38	0.39	0.15	0.03	0.03	3.63
	(0.11)	(1.39)	(4.76)	(2.96)	(0.60)	(0.43)	(0.13)	(0.10)	(1.98)
BBB	0.01	0.06	3.03	87.66	3.70	0.53	0.07	0.15	4.81
	(0.04)	(0.14)	(2.12)	(5.13)	(1.91)	(0.83)	(0.14)	(0.31)	(2.06)
BB	0.02	0.02	0.13	4.28	78.73	7.53	0.48	0.65	8.17
	(0.08)	(0.10)	(0.27)	(2.15)	(5.59)	(4.20)	(0.47)	(0.88)	(2.73)
B	0.00	0.02	0.07	0.14	4.07	75.78	5.03	3.20	11.69
	(0.00)	(0.09)	(0.22)	(0.22)	(1.95)	(3.98)	(2.90)	(3.09)	(2.59)
CCC/C	0.00	0.00	0.12	0.18	0.36	12.51	44.80	27.90	14.13
	(0.00)	(0.00)	(0.50)	(0.72)	(0.87)	(8.03)	(7.91)	(12.38)	(4.79)
Three year
AAA	65.24	17.27	4.29	0.45	0.56	0.11	0.00	0.00	12.08
	(12.63)	(12.10)	(3.78)	(1.78)	(1.17)	(0.43)	(0.00)	(0.00)	(9.31)
AA	1.00	66.47	17.18	2.69	0.63	0.37	0.02	0.05	11.60
	(0.95)	(12.01)	(7.24)	(2.36)	(0.80)	(0.70)	(0.10)	(0.13)	(6.11)
A	0.07	2.83	69.63	14.40	1.56	0.62	0.06	0.17	10.65
	(0.13)	(2.89)	(7.78)	(4.05)	(1.31)	(0.94)	(0.15)	(0.28)	(3.56)
BBB	0.02	0.17	7.41	69.09	7.29	1.96	0.20	0.66	13.21
	(0.07)	(0.31)	(3.94)	(10.03)	(2.78)	(1.66)	(0.29)	(0.74)	(4.50)
BB	0.01	0.05	0.46	9.63	49.76	13.31	1.22	3.87	21.70
	(0.07)	(0.16)	(0.72)	(3.90)	(8.77)	(4.03)	(0.82)	(3.44)	(4.53)
B	0.00	0.03	0.18	0.53	8.33	43.44	5.59	11.69	30.19
	(0.05)	(0.12)	(0.46)	(0.74)	(3.19)	(5.52)	(2.34)	(6.91)	(5.14)
CCC/C	0.00	0.00	0.10	0.51	1.35	13.88	10.90	45.11	28.14
	(0.00)	(0.00)	(0.40)	(1.16)	(1.88)	(6.69)	(6.29)	(13.40)	(8.41)
10 year
AAA	27.78	26.06	9.64	3.56	0.34	0.00	0.00	0.34	32.26
	(8.37)	(9.89)	(3.98)	(4.00)	(0.91)	(0.00)	(0.00)	(0.70)	(14.80)
AA	1.41	24.99	28.66	9.45	1.60	0.51	0.02	0.49	32.86
	(0.99)	(10.18)	(4.21)	(4.21)	(1.33)	(0.64)	(0.12)	(0.61)	(6.35)
A	0.07	3.38	37.29	22.25	3.46	1.34	0.14	1.45	30.62
	(0.14)	(2.79)	(7.78)	(4.65)	(1.23)	(0.96)	(0.25)	(1.01)	(4.85)
BBB	0.01	0.34	11.09	39.37	7.79	2.73	0.15	3.88	34.64
	(0.05)	(0.31)	(4.56)	(9.44)	(1.65)	(1.65)	(0.23)	(2.23)	(7.01)
BB	0.00	0.09	1.38	11.17	18.19	9.35	0.88	14.46	44.48
	(0.00)	(0.17)	(1.02)	(3.09)	(5.78)	(3.08)	(0.52)	(6.08)	(3.89)
B	0.00	0.03	0.24	1.78	6.42	9.99	1.09	26.75	53.70
	(0.00)	(0.07)	(0.58)	(1.46)	(1.73)	(2.93)	(0.57)	(8.18)	(6.63)
CCC/C	0.00	0.00	0.11	0.64	2.41	2.84	0.32	56.82	36.86
	(0.00)	(0.00)	(0.40)	(1.05)	(2.50)	(2.21)	(0.70)	(10.63)	(8.99)
Note: Numbers in parentheses are weighted standard deviations, weighted by the issuer base. NR--Not rated. Sources: S&P Global Ratings Credit Research & Insights and S&P Global Market Intelligence’s CreditPro®.

Appendix 3: Gini Methodology

To measure relative ratings performance, we utilize the Lorenz curve as a graphical representation of the proportionality of a distribution, and we summarize this via the Gini coefficient. For this study, the Lorenz curve is plotted with the x-axis showing the cumulative share of issuers, arranged by rating, while the y-axis represents the cumulative share of defaulters, also arranged by rating. On both axes of the Lorenz curve, the observations are ordered from the low end of the ratings scale ('CCC'/'C') to the high end ('AAA').

As an example, if 'CCC'/'C' rated entities made up 10% of the total population of issuers at the start of the time frame examined (x-axis) and 50% of the defaulters (y-axis), then the coordinate (10, 50) would be the first point on the curve. If S&P Global Ratings' corporate ratings only randomly approximated default risk, the Lorenz curve would fall along the diagonal. Its Gini coefficient--which is a summary statistic of the Lorenz curve--would thus be zero. If corporate ratings were perfectly rank ordered so that all defaults occurred only among the lowest-rated entities, the curve would capture all of the area above the diagonal on the graph (the ideal curve), and its Gini coefficient would be 1 (see chart 14).

The procedure for calculating the Gini coefficients is illustrated in chart 14: Area B is bounded by the random curve and the Lorenz curve, while area A is bounded by the Lorenz curve and the ideal curve. The Gini coefficient is defined as area B divided by the total of area A plus area B. In other words, the Gini coefficient captures the extent to which actual ratings accuracy diverges from the random scenario and aspires to the ideal scenario.

Appendix 4: Defaults In Profile

In 2024, there were 97 issuer defaults (including five confidential defaults) on $211.7 billion of debt.

One issuer defaulted three times (AMC Entertainment Holdings Inc), and three issuers defaulted twice (Digital Media Solutions Inc., KNS Holdco LLC, and Lumen Technologies Inc).

Related Research

2024 Annual Global Corporate Default And Rating Transition Study, March 27, 2025

Credit Research & Insights:	Brenden J Kugle, Englewood + 1 (303) 721 4619; brenden.kugle@spglobal.com
	Nick W Kraemer, FRM, New York + 1 (212) 438 1698; nick.kraemer@spglobal.com
Research Contributor:	Suresh Kasa, CRISIL Global Analytical Center, an S&P affiliate, Mumbai