articles Ratings /ratings/en/research/articles/250514-default-transition-and-recovery-corporate-defaults-fall-below-long-term-average-13489413 content esgSubNav
In This List
COMMENTS

Default, Transition, and Recovery: Corporate Defaults Fall Below Long-Term Average

COMMENTS

Credit Trends: U.S. Corporate Bond Yields As Of May 7, 2025

COMMENTS

Default, Transition, and Recovery: 2024 Annual U.S. Public Finance Default And Rating Transition Study

COMMENTS

Credit Trends: U.S. Corporate Bond Yields As Of April 30, 2025

COMMENTS

Credit Trends: This Month In Credit: 2025 Data Companion


Default, Transition, and Recovery: Corporate Defaults Fall Below Long-Term Average

image

S&P Global Ratings' 2025 global corporate default tally declined to eight, from nine in March, after the following defaults in April:

  • Canada-based pure-play metallurgical coal company Conuma Resources Ltd.
  • Luxembourg-based telecom provider Eos Finco S.a r.l.
  • Luxembourg-based plastic packaging producer Kleopatra Holdings 2 S.C.A.
  • U.S.-based veterinary practice management company Thrive Pet Healthcare LLC
  • U.S.-based media company The E.W. Scripps Company
  • U.S.-based manufacturer of plastics, fabrics, and chemicals Ascend Performance Materials Operations LLC
  • U.S.-based data analytics provider EagleView Technology Corp.
  • U.S.-based acute care hospitals services operator Community Health Systems Inc.

Defaults Declined Despite Market Volatility

Corporate defaults decreased to eight in April, down from nine in March (see chart 1). Year-to-date defaults reached a two-year low and totaled 34, as of April 30, 2025. This is below the five-year average of 42 and constitutes a decline in year-to-date defaults of 21, compared with 2024 and 2023.

The pace of defaults continues to decrease (see chart 2). This is despite the recent tariff-related market volatility, which has raised concerns about growth and higher default rates.

For now, we maintain our base-case projections for 2025, including speculative-grade corporate default rates of 3.50% in the U.S. and 3.75% in Europe. However, prolonged or increasing tariff uncertainty could raise the rates to 6.00% in the U.S. and 6.25% in Europe by December 2025.

Chart 1

image

Chart 2

image

Three Sectors Accounted For Most Defaults

Two-thirds of defaults in April stemmed from health care, media and entertainment, and CP&ES, with each sector accounting for two defaults. Five of these defaults happened in the U.S. and one in Luxembourg. Unsustainable capital structures, high leverage, and negative cash flow generation constituted the main reasons for these defaults. Media and entertainment, consumer products, and health care accounted for half of year-to-date defaults (see chart 3).

Chart 3

image

Distressed Exchanges Increased To Close To 90%

Distressed exchanges caused seven out of eight defaults in April. Notably, seven of the eight companies that defaulted last month were first-time defaulters. Only U.S.-based Community Health Systems Inc., whose default in April reflected its below-par debt repurchases, had defaulted before. This is the fourth time we lowered the rating on the company to 'SD' (selective default) within three years.

Distressed exchanges remain the main cause of defaults. Year to date, they have accounted for 23 defaults or 68% of the total--the highest share since 2008 (see chart 4). Missed payments caused seven defaults, while bankruptcies accounted for four.

Chart 4

image

Health Care And Media And Entertainment Contributed Most To Defaulted Debt

Monthly defaulted debt reached $5.5 billion in April, similar to the debt volumes in March. This figure represents the lowest defaulted debt volume since January 2024, with 82% originating from the U.S. (see chart 5). Defaulted debt in April was concentrated in four sectors, with health care and media and entertainment leading the way (see chart 6).

Cumulatively, health care has accounted for most defaulted debt since the beginning of the year. The sector total of $7.5 billion includes the addition of $1.64 billion in April from the U.S.-based veterinary practice management company Pathway Vet Alliance LLC, which does business as Thrive Pet Healthcare. The company recently completed a debt-exchange transaction that we view as tantamount to a default.

Chart 5

image

Chart 6

image

Table 1

The global default rate stood at 3.6% in March
Region 12-month trailing speculative-grade default rate (%) Weakest links
U.S. 4.3 151
Emerging markets 0.9 10
Europe 3.8 45
Other developed 2.3 9
Global 3.6 215
Trailing 12-month speculative-grade default rates are for the period from March 31, 2024, to March 31, 2025, except for the U.S. and Europe. For these two regions, they are for the period from April 30, 2024, to April 30, 2025, preliminary, and subject to change. Weakest link data as of March 31, 2025. Other developed includes Australia, Canada, Japan, and New Zealand. Default counts may include confidentially rated issuers. Sources: S&P Global Ratings Credit Research, S&P Global Market Intelligence's CreditPro.

Table 2

The 2025 global corporate default tally stands at 34
Date Parent company Country Subsector To From Reason
Jan. 8, 2025

City Brewing Co. LLC

U.S. Consumer products SD B- Missed payments
Jan. 16, 2025

Blue Ribbon LLC

U.S. Consumer products SD CCC- Distressed exchange
Jan. 16, 2025

JOANN Inc.

U.S. Retail/restaurants D CCC Bankruptcy
Jan. 16, 2025

Packers Holdings LLC

U.S. Consumer products SD CCC- Distressed exchange
Jan. 17, 2025

Aimbridge Acquisition Co. Inc.

U.S. Media and entertainment D CCC Missed payments
Jan. 17, 2025

Trinseo PLC

Ireland Chemicals, packaging, and environmental services SD CC Distressed exchange
Jan. 23, 2025

Physician Partners LLC

U.S. Health care SD CCC+ Distressed exchange
Jan. 28, 2025

Intrum AB (publ)

Sweden Finance companies SD CC Missed payments
Jan. 29, 2025

Azul S.A.

Brazil Transportation SD CC Distressed exchange
Jan. 31, 2025

MultiPlan Inc.

U.S. Health care SD CC Distressed exchange
Feb. 4, 2025

Selecta Group B.V.

Netherlands Consumer products SD CCC- Missed payments
Feb. 20, 2025

Altisource Portfolio Solutions S.A.

Luxembourg Finance companies SD CC Distressed exchange
Feb. 20, 2025

Hurtigruten Newco AS

Norway Media and entertainment D CC Distressed exchange
Feb. 21, 2025

Confluence Technologies, Inc.

U.S. Media and entertainment SD CCC+ Distressed exchange
Feb. 21, 2025

Stitch Acquisition Corp.

U.S. Consumer products SD CCC Distressed exchange
Feb. 24, 2025

OT Merger Corp.

U.S. Capital goods SD CCC+ Distressed exchange
Feb. 25, 2025

Thames Water Utilities Ltd.

U.K. Utilities D CC Distressed exchange
March 3, 2025

Bright Bidco B.V.

Netherlands Automotive SD CCC+ Missed payments
March 3, 2025

Poseidon Investment Intermediate L.P.

U.S. Chemicals, packaging, and environmental services SD CCC Distressed exchange
March 7, 2025

Alvogen Pharma US Inc.

U.S. Health care SD CCC+ Distressed exchange
March 10, 2025

Astra Acquisition Corp.

U.S. High technology SD CCC Missed payments
March 11, 2025

Runner Buyer Inc.

U.S. Retail/restaurants D CCC Missed payments
March 12, 2025

Mitel Networks (International) Ltd.

U.K. High technology D CCC Bankruptcy
March 14, 2025

EmployBridge Holding Co.

U.S. Media and entertainment SD CC Distressed exchange
March 21, 2025

Mountain Province Diamonds Inc.

Canada Metals, mining, and steel SD CCC Distressed exchange
March 31, 2025

HoA Restaurant Group LLC

U.S. Retail/restaurants D NR Bankruptcy
April 3, 2025

Pathway Vet Alliance LLC

U.S. Health care SD CCC+ Distressed exchange
April 11, 2025

E.W. Scripps Co. (The)

U.S. Media and entertainment SD CC Distressed exchange
April 15, 2025

Conuma Resources Ltd.

Canada Metals, mining, and steel SD CCC+ Distressed exchange
April 22, 2025

Ascend Performance Materials Operations LLC

U.S. Chemicals, packaging, and environmental services D CCC+ Bankruptcy
April 25, 2025

EagleView Technology Corp.

U.S. Media and entertainment SD CCC Distressed exchange
April 28, 2025

Eos Finco S.a r.l.

Luxembourg Consumer products SD CCC+ Distressed exchange
April 29, 2025

Kleopatra Holdings 2 S.C.A.

Luxembourg Chemicals, packaging, and environmental services SD CC Distressed exchange
April 30, 2025

Community Health Systems Inc.

U.S. Health care SD CCC+ Distressed exchange
Data as of April 30, 2025. NR--Not rated. SD--Selective default. Sources: S&P Global Ratings Credit Research & Insights, S&P Global Market Intelligence's CreditPro®.

Related Research

Default Studies

More analyses and statistics are available in our annual default studies, published on RatingsDirect.

Corporate (financial and non-financial)
Structured finance
Public finance
Sovereign and international public finance

This report does not constitute a rating action.

Credit Market Research:Ekaterina Tolstova, Frankfurt +49 173 6591385;
ekaterina.tolstova@spglobal.com
Nicole Serino, New York + 1 (212) 438 1396;
nicole.serino@spglobal.com
Research Contributor:Vaishali Singh, CRISIL Global Analytical Center, an S&P affiliate, Mumbai

No content (including ratings, credit-related analyses and data, valuations, model, software, or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced, or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees, or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness, or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED, OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.

Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P’s opinions, analyses, and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment, and experience of the user, its management, employees, advisors, and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.

To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw, or suspend such acknowledgement at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal, or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.

S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain nonpublic information received in connection with each analytical process.

S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, www.spglobal.com/ratings (free of charge), and www.ratingsdirect.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at www.spglobal.com/usratingsfees.