Because static pools include only entities with active ratings as of the beginning date of a given pool, we exclude companies with withdrawn ratings, as well as those that have defaulted, from subsequent static pools. The rating action followed Covia's announcement that its domestic subsidiaries filed voluntary petitions for restructuring under Chapter 11 of the U.S. Bankruptcy Code. For instance, in table 32, the weighted average first-year default rate for all speculative-grade-rated companies for all 40 pools was 3.71%, meaning that an average of 96.29% survived one year. On Dec. 9, 2020, we raised our issuer credit rating on Revlon to 'CCC-' from 'SD' after it completed its previously announced 5.75% senior notes exchange, which we viewed as a distressed restructuring. (EDGAR Online via COMTEX) -- NETSCOUT SYSTEMS INC false 0001078075 0001078075 2023-02-22 2023-02-22 Sources: High yield spreads, default rate and unemployment assumptions sourced from Moody's Investors Service . Annual speculative-grade default rates increased in all major regions in 2020, relative to 2019. On July 1, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Mexican lodging company Grupo Posadas S.A.B. On Aug. 21, 2020, we withdrew the issuer credit ratings on the company at its request. An S&P Global Ratings issuer credit rating is a forward-looking opinion about an obligor's overall creditworthiness. On Jan. 19, 2020, The Krystal Co. defaulted after the company filed for bankruptcy under Chapter 11 with the Northern District of Georgia. The higher default rates for nonfinancial sectors are not surprising, given their higher concentration of speculative-grade issuers. Credit deterioration was significant in 2020, with a new historical low upgrade rate (2.8%) and one of the highest annual downgrade rates (18.5%). On Dec. 7, 2020, the issuer credit rating on the company was raised to 'CCC+'. S&P's public ratings and analyses are made available on its Web sites, www.standardandpoors.com (free of charge), and www.ratingsdirect.com and www.globalcreditportal.com (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. The company will not make the interest payments within the 30-day grace period. On April 6, 2020, S&P Global Ratings lowered its long-term issuer credit rating on New Zealand-based nonbank financier FE Investments Ltd. to 'D' from 'CCC'. On Oct. 9, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Brazil-based telecom operator Oi S.A. to 'SD' from 'CC' after the issuer announced that the judicial court ratified the amendment to the company's judicial reorganization plan, which was approved by the majority of its creditholders on Sept. 8, 2020. The negative outlook reflects the potential for a lower rating if continued weak operating performance meaningfully pressures the company's liquidity. Half of this amount, US$5.5 million, was waived until the maturity of notes in 2024, while the issuer was still negotiating the payment date for the other half. The issuer was engaged in discussions with creditors for a debt restructuring. This brought the downgrade-to-upgrade ratio to a new high of 6.6. The issuer is exploring other strategic alternatives as liquidity remains constrained. On March 27, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Colorado-based cyber security provider Optiv Inc. to 'SD' from 'CCC+' after the issuer completed a distressed exchange, repurchasing about US$47 million of second-lien debt for about US$23 million. In addition, the company exchanged US$307.5 million of its existing first-lien term loan for a new super-priority second out term loan. On Dec. 8, 2020, we raised our rating on Outerstuff to 'CCC' from 'SD', reflecting its restructured debt and licensing agreements, though it still has high leverage and less than adequate liquidity. Of the 198 companies that defaulted in 2020 that were rated at the start of the year, all but 12 were in the 'B' category or lower, and 57% were in the 'CCC'/'C' category, leading to a one-year global Gini ratio of 86.1%. Sovereign default and recovery rates, 1983-2020 - Excel Data: 15 Sep 2009 . On May 21, 2020, after the settlement of the exchange, we raised the issuer credit rating to 'CCC+' from 'SD'. Performance of project finance bank loans during the pandemic-fueled default cycle in 2020; Key findings for the power, infrastructure, and oil and gas industry sectors . However, defaults from most other sectors increased as well. On Dec. 8, 2020, we raised the rating on the issuer to 'CCC' from 'SD', reflecting our view of reduced refinancing risk. We expect the company will not be able to pay most of its obligations as they come due, unless a major debt restructuring it is working on allows it to extend major debt maturities, including the $350 million Eurobond repayment due in September 2021. As one measure of ratings performance, the cumulative share of defaulters was plotted against the cumulative share of issuers by rating in a Lorenz curve to visually render the accuracy of its rank ordering (for definitions and methodology, refer to Appendix II). On Oct. 14, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Argentina-based Banco Hipotecario S.A. to 'SD' from 'CC' after the issuer announced that 46.7% of the bondholders of its outstanding US$279.8 million series 29 notes due on Nov. 30, 2020, accepted the exchange offer originally launched in early September. Earlier, on March 17, 2020, we lowered the long-term issuer credit rating to 'CCC+' from 'B' after the issuer's refinancing prospects were difficult and capital structure was unsustainable. For the Gini ratios in tables 2, 27, and 28, the standard deviations are derived from the time series of Gini ratios for all of their constituent annual cohorts. In both cases, the standard deviation of the times to default generally shrinks progressively as the rating gets lower. On May 27, 2020, S&P Global Ratings lowered its issuer credit rating on Chile-based Latam Airlines Group S.A. to 'D' from 'CCC-' after the issuer volunteered a reorganization process under Chapter 11 of the Bankruptcy Code in the U.S. We consider that the debt restructuring under Chapter 11 constitutes a default. On Dec. 22, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Pennsylvania-based high-availability infrastructure and disaster recovery services provider Sungard AS New Holdings LLC to 'SD' from 'B-'. All speculative-grade categories had higher default rates in 2020 than their long-term averages, though in the cases of the 'BB' and 'B' categories, these increases were relatively small. The issuer also amended the terms of its first- and second-lien credit agreements to extend the maturity of revolving credit and temporary allow itself to make partial PIK interest payments. The 2021 corporate default tally of 72 is the lowest since 2014--down nearly 70% from the previous year's total . On April 6, 2020, we raised the issuer rating to 'CCC-' from 'SD' to reflect the risk of a conventional default or restructuring, which was likely in the following six months. The issuer was going through debt restructuring for a wider capital improvement, but was adversely affected by falling oil prices and the coronavirus pandemic. Reduced EBITDA amid the pandemic and oil price crisis in early 2020 stressed the operating performance of the issuer. On May 26, 2020, we raised the issuer credit rating on Equinox to 'CCC' from 'SD'. An improving picture in 2017 . In 2020, speculative-grade rating categories had higher default rates than in 2019, with an increase in the 'BB' category to 0.93% from 0.00%, 'B' category to 3.5% from 1.5%, and 'CCC'/'C' category to 47.5% from 29.8% (see table 3). On Aug. 7, 2020, we lowered the issuer credit ratings to 'D' from 'SD' following GFamsa's bankruptcy filing in both Mexico and the U.S. On Dec. 12, 2020, we withdrew the issuer credit ratings on the company at its request. On April 16, 2020, S&P Global Ratings lowered the issuer credit ratings on Cyprus-based real estate market investor O1 Properties Ltd. to 'D' from 'CC' after the issuer missed a coupon payment on US$350 million Eurobonds. moody's probability of default table 2021mary calderon quintanilla 27 februari, 2023 / i list of funerals at luton crematorium / av / i list of funerals at luton crematorium / av On Oct. 7, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Massachusetts-based foodservice equipment and supplies distributes TMK Hawk Parent Corp. to 'SD' from 'CCC' after the issuer completed a recapitalization transaction and issued a new US$120 million super-priority first out term loan, which was provided by a majority of its first-lien lenders. Because of the extremely small size of the 'AAA' rating category, the downgrade of even one issuer will have a large effect on this segment's stability rate. *This table compares the net change in ratings from the first to the last day of each year. We believed conditions for GNC were deteriorating substantially due to the coronavirus pandemic, the anticipated macroeconomic downturn, and the limited access to capital markets. On May 8, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Bermuda-based diamond miner Petra Diamonds Ltd. to 'D' from 'CCC+' following the issuer's announcement to enter into a grace period of 30 days for interest payment on it US$650 million debt. Australia, Canada, Japan, and New Zealand. Multiyear transitions. We treated this as distressed because the issuer did not meet its contractual obligation to pay principal and interest in a timely manner, and did not adequately compensate lenders for agreeing to temporarily waive their rights. The issuer was also planning for a comprehensive debt restructuring involving debt-for-equity swaps. On Dec. 9, 2020, we raised the issuer credit rating to 'CCC+' from 'SD' following the distressed conversion of term loans to PIK toggle. Moody's Economy.com January 21, 2009 The new president and Congress are working to implement a large fiscal stimulus plan to mitigate the severe economic downturn. Both segments were facing a decline in demand, made worse by the looming recession and coronavirus pandemic. Meaningfully lower yoy default rates in 2021 are expected for the energy and retail industries, which produced a significant volume of defaults over the prior five years. On April 12, 2020, Pace Industries Inc. filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. Multiplying 92.81% by 96.77% results in a 89.82% survival rate to the end of the third year, which results in a three-year average cumulative default rate of 10.18%. The procedure for calculating the Gini coefficients is illustrated in chart 31: 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. On May 12, 2020, S&P Global Ratings lowered the issuer credit rating on Texas-based oil and gas exploration and production company Fieldwood Energy LLC to 'D' from 'CCC' after the issuer failed to make the interest payments on its first- and second-lien term loans. The issuer, doing business as Elara Caring, completed the exchange of its US$195 million second-lien debt for US$186 million new junior 1.5-lien debt. Our data on defaulted corporate issuers globally shows that defaults among speculative-grade entities tend to be clustered in the third year after the initial rating, particularly in the 'B' rating category (see chart 9). On April 16, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Plano, Texas-based department store operator J.C. Penney Co. Inc. to 'D' from 'CCC' after the company announced it would not make an interest payment. Furthermore, weak liquidity supports our view of O1 Properties' general default. The downgrade reflected our belief that continued low crude oil prices, the weak outlook for offshore drilling services, and the distressed level at which Valaris' debt is trading made it likely the company would not make the interest payments within the grace period. The group issued a US$450 million senior secured term loan and US$111 million senior secured term loan due in May 2024 and refinanced the US$111 million additional RCF that was maturing in December 2020. 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. On Feb. 12, 2020, S&P Global Ratings lowered its long-term issuer credit rating on RentPath LLC to 'D' after the issuer defaulted and filed for Chapter 11 bankruptcy. The issuer's operation was suffering from weak crude oil prices and depressed demand. A key consideration when analyzing transition matrices that present averages computed over multiple static pools is that the standard deviations associated with each transition point in the matrix are large relative to the averages (outside of stability rates). According to S&P, at the end of 2020, their 12-month trailing default rates amounted to 6.6% for U.S. speculative-grade. Despite this increase, the default total in 2020 was still lower than the peak of 235 in 2009. ( 2007 ), we approximate the issuers' industry distress if the median stock returns of the firms in the same industry are less than -30%. Earlier, in 2004, S&P Global Ratings withdrew its ratings on the company. In the one-year global Lorenz curve, for example, 96.6% of defaults occurred in the speculative-grade category, while these ratings constituted only 39.9% of all corporate ratings (see chart 26). 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. On May 15, 2020, S&P Global Ratings lowered its issuer credit rating on Colorado-based oil and gas exploration and production company Extraction Oil & Gas Inc. to 'D' from 'CC' after the issuer missed the interest payment on its 7.375% senior notes due 2024. We utilize the Lorenz curve, a graphical representation of the proportionality of a distribution, as one measure of ratings performance, and we summarize this via the Gini coefficient. A total of 3,098 defaults have been recorded globally since 1981. 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. On July 2, 2020, we raised the issuer credit rating to 'B-' from 'D' after RGIS completed its debt restructuring and eliminated over US$ 230 million of debt, which, in turn, improved leverage. On May 15, 2020, S&P Global Ratings lowered the issuer credit rating on Texas-based oilfield products and services provider Forum Energy Technologies Inc. to 'SD' from 'CC'. PGS was also in talks with lenders to secure a new capital structure. Because errors, if any, are corrected by every new update and because the criteria for inclusion or exclusion of companies in the default study are subject to minor revisions as time goes by, it is not possible to compare static pools across different studies. It is expected to reduce debt by US$500 million. In 2021, we rated over $6 trillion of issuance and served more than 1,100 issuers who accessed the markets for the first time. On April 17, 2020, we raised the issuer credit ratings to 'CCC-' after the issuer was able to shift a huge portion of debt maturing in the second quarter of 2020 to the next quarter. S&P Global Ratings had previously withdrawn its ratings on Techniplas. The syndicated creditors will now acquire 49% of the capital of the operating business. Source: Moody's Investors Service, "Moody's Corporate Default & Recovery Rates Study 2019" Senior Secured Loans Equity Unsecured Debt (ie, high yield bonds) Subordinated Bonds Senior Unsecured Bonds Loans 28.0% 47.0% 80.0% Recovery Rate 100% 80% 60% 40% 20% 0% 1 Source: S&P Global Market Intelligence, Wells Fargo, March 31, 2020 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 & Poors Financial Services LLC or its affiliates (collectively, S&P). A missed or delayed disbursement of a contractually-obligated interest or principal payment (excluding missed payments cured within a contractually allowed grace period), as defined in credit agreements and indentures; 2. Bond price data for firms at default are obtained from Moody's Investor Services, and are supplemented with information from Standard & Poor's and Merrill 5 A similar point is made in Pykhtin (2003). With its highly developed financing markets, the U.S. also has a considerably higher share of speculative-grade companies than other regions--it accounted for 52.6% of speculative-grade companies globally at the beginning of 2020. The 50.3% at the end of 2020 does represent an all-time high, albeit by a margin of only 0.1%. On Sept. 15, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Spain-based food products retailer Distribuidora Internacional de Alimentacion S.A. to 'SD' from 'CC' after the issuer completed a distressed exchange. 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. In nearly all instances, the financial services sector's longer-term default rates were lower in 2020 than long-term averages. Many default studies, including this one, also look at transition rates, which gauge the degree to which ratings change--either up or down--over a particular period. This reflects our forward-looking opinion post the reduction in outstanding gross debt by approximately $127 million. But despite the noticeable increase in defaults in 2020, peak default rates were much lower than during the financial crisis. A default is assumed to take place on the earliest of: When an issuer defaults, it is not uncommon for S&P Global Ratings to subsequently withdraw the 'D' rating. Note: Numbers in parentheses are weighted standard deviations, weighted by the issuer base. On July 29, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC' following the issuer's completion of the distressed exchange. On May 27, 2020, we withdrew the ratings on the issuer. Once again, the default rate in the 'AAA' rating category was zero, consistent with historical trends. This difference results from the different methods of calculating default rates. On Nov. 17, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC' from 'SD', reflecting our assessment of the company's credit risk following the debt repurchases. The company exchanged $315 million of its existing unsecured notes for new 9% convertible secured notes due 2025, which we considered less than the original promise and tantamount to default. On April 2, 2020, S&P Global Ratings lowered its long-term issuer credit rating on U.K.-based oilfield services company KCA DEUTAG Alpha Ltd. to 'SD' from 'CCC+' after the issuer announced it would use the grace period for interest payments.
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