Carseats Dataset Python, Articles M

In its base case, Moody's analyzed the underlying collateral pool as having a performing par (after treating deferring securities as performing if they meet certain criteria) of $260.9 million, defaulted/deferring par of $0 million, a weighted average default probability of 12.33% (implying a WARF of 1527), and a weighted average recovery rate . Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro. 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 24-26 and 30-32). All 1981 static pool members still rated on Jan. 1, 2020, had 40 one-year transitions, while companies first rated on Jan. 1, 2020, had only one. The issuer had also obtained a commitment for $1 billion in debtor-in-possession financing. Sources: StepStone Group, CS HY Index, Barclays US IG, Moody's, Cliffwater, Refinitiv LPC as of December 2022. On the same day, we withdrew the issuer ratings. 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 companies 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. The issuer was unable to raise capital to maintain the regulatory minimum, and subsequently the principal and interest payments to the depositors were suspended. Broadly speaking, the average and median times to default for each rating category are longer when based on the initial rating than when based on subsequent ratings, particularly for speculative-grade ratings. During 2020, the company increased its stake in V.E from 69.2% to 99.8%. On Dec. 7, 2020, S&P Global Ratings raised the issuer credit rating to 'B-' from 'SD' on improved liquidity with constraints from high leverage. S&P reserves the right to disseminate its opinions and analyses. The analysis excludes public information ("pi") ratings and ratings based on the guarantee of another company or government entity. Many of the tables and charts in this study display averages of default rates, transition rates, and Gini ratios. Earlier, on May 13, 2020, we lowered our issuer credit rating and senior unsecured issue-level ratings on Extraction to 'CC' from 'CCC+', reflecting the increased likelihood that the issuer would enter a debt restructuring that we would view as distressed in the near term. Cumulative default rates are one minus the product of the proportion of survivors (nondefaulters). Others are withdrawn because of a lack of cooperation, particularly when a company is experiencing financial difficulties and refuses to provide all the information needed to continue surveillance on the ratings, or at the entity's request. On July 20, 2020, S&P Global Ratings lowered its issuer credit rating to 'D' from 'SD' after the company filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. Fourth quarter earnings releases have provided insight into corporate margin pressures, but labor market commentary signals that some of these headwinds may be abating. 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. to 'SD' from 'CC' following its distressed exchange. On Oct. 15, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC+' from 'SD' because the issuer had enough liquidity to pay the remainder of the bond's maturity. Sector In-Depth . The default rates in table 34 are calculated as not conditional on survival, while those in table 24 are average default rates conditional on survival. No sharing of passwords/user IDs and no simultaneous access via the same password/user ID is permitted. With an increase in the proportion of downgrades during the year, the number of large rating changes (which we define as more than six notches) increased in 2020. In years with lower-than-average default rates, often more than 90% of defaulters were initially rated speculative grade, as reflected in the rating path observed for defaulters in the trailing 12 quarters (see chart 10). For example, 'AA+' rated issuers were still rated 'AA+' one year later 79.3% of the time, and 'AA' rated issuers were still rated 'AA' one year later 80.9% of the time. A mere 0.88% of the approximately $500 billion of U.S. CLOs issued from 1994-2009 that were rated by S&P Global Ratings experienced defaults, and no defaults were recorded among the AAA- and AA-rated tranches rated by Moody's. 7 In fact, default rates among CLOs were not only lower than those of CDOs, but also lower than those of similarly . Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro. The issuer announced that it completed an amend-and-extend transaction for all of its US$100 million senior term loans due in February 2022 and most of its US$300 million junior term loans. On May 19, 2020, S&P Global Ratings lowered the issuer credit rating on Argentine airport operator Aeropuertos Argentina S.A. 2000 to 'SD' from 'CC'. We consider companies reemerging from prior defaults to be separate entities, and their rating histories begin with the post-default rating. In fact, only four sectors had default rates in 2020 that were lower than their long-term averages (aerospace/automotive/capital goods/metal, forest and building products/homebuilders, financial institutions, and insurance) (see chart 2). to 'SD' from 'B-' after the issuer missed the Oct. 31 coupon payment on its senior secured notes due 2023. This act was classified as a general default because the issuer had not paid a substantial amount of its obligations. Difference between last four quarters and weighted average, Largest corporate defaulters by outstanding debt amount, Texas Competitive Electric Holdings Co. LLC. But despite the noticeable increase in defaults in 2020, peak default rates were much lower than during the financial crisis. The trailing-12-month and annual default rates have become standard measures, but default rates measured over shorter time frames give a more immediate picture of credit market conditions. Foreign currency translation unfavorably impacted Moody's revenue by 2%. 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 . On May 27, 2020, we lowered our ratings on the issuer to 'D' from 'SD' after it filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code, and subsequently on June 26, 2020, we withdrew our credit ratings. In 2020, 216 of the 226 defaults, or 96%, were from companies originally rated speculative grade, which is nearly eight percentage points higher than the long-term average of 88.3%. The upgrade rate fell to 2.8% in 2020--the lowest annual rate since 1981. This caused high liquidity constraints for Hertz. On Nov. 25, 2020, S&P Global Ratings withdrew its rating at the issuer's request. When an issuer defaults, we assign that default to all of the static pools to which the issuer belonged. On Oct. 15, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC', with a negative outlook, considering the company's ability to improve its liquidity. Austria, Belgium, British Virgin Islands, Bulgaria, Channel Islands, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Guernsey, Hungary, Iceland, Ireland, Isle of Man, Italy, Jersey, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Moldova Republic of, Monaco, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Switzerland, and the U.K. On May 21, 2020, S&P Global Ratings lowered the issuer credit rating on Colorado-based oil and gas exploration and production company Centennial Resource Development Inc. to 'SD' from 'CC' after the issuer announced the exchange of a portion of its 2026 and 2027 senior secured notes for new second-lien secured notes due 2025 at 50% of par value. Later, on May 2, 2020, the issuer entered into standstill agreement with the lenders of the notes due 2021 and the term loan due 2023, until July 31, 2020. The average number of notches for an upgrade moved to 1.19 in 2020, while downgrades remained at an average of 1.46 notches--the highest rate since 2010 (when the average was 1.52 notches) (see chart 8). Earlier, on April 15, 2020, we lowered our issuer credit rating on CEC to 'CC' from 'CCC' following the company's announcement that it formed a restructuring committee to explore various strategic alternatives, including an out-of-court or in-court restructuring. Although MCS had sufficient liquidity to make the interest payment, S&P Global Ratings believed that the company was unlikely to pay it within the five-day grace period, given its unsustainable capital structure. On Aug. 28, 2020, we withdrew our ratings on the company. For the purposes of this study, a corporate rating may also be withdrawn as a result of mergers and acquisitions. On July 1, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Ohio-based frac sand and industrial minerals producer Covia Holdings Corp. to 'D' from 'CCC+'. For the full year, there were three large downgrades (and two large upgrades), compared with two downgrades in 2019 (see chart 7). This default and rating transition study includes industrials, utilities, financial institutions (banks, brokerages, asset managers, and other financial entities), and insurance companies globally with long-term local currency ratings from S&P Global Ratings. If these default rate forecasts crystalize, the pandemic induced default cycle will be relatively mild comparing with prior recessionary default cycles whose peaks ranged from 9.7% to 13.3%. 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. On Dec. 17, 2020, S&P Global Ratings raised its issuer credit rating to 'CCC+' from 'D', reflecting the company's position post restructuring. The issuer is facing challenges in adapting to the ongoing changes in the department store sector. Of the rated defaulters at the beginning of 2020, none began the year with an investment-grade rating. Yet each of the four pools in which this company was included (1987-1990) would record its 1993 default at the appropriate time horizon. Normally, recessions include, or are followed shortly by, marked increases in corporate defaults. Moody's Investors Service (MIS) First Quarter Revenue Down 20%. On Oct. 28, 2020, S&P Global Ratings lowered its long-term issuer credit rating on the Netherlands-based self-service retail and coffee services company Selecta Group B.V. to 'SD' from 'CC' after the England and Wales High Court sanctioned the scheme of arrangement proposed by pan-European vending machine operator Selecta Group B.V. and backed by the group's creditors. S&P Forecast. Earlier, on Jan. 17, 2020, we withdrew our ratings on the issuer due to insufficient information. 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. We viewed this transaction as tantamount to a default on the term loan because the company's operations were distressed, making it difficult for it to meet its obligations. Amid the fast and robust economic rebound, the speculative-grade rating bias has rapidly recovered, but the number of upgrades has not yet matched the magnitude of downgrades seen last year. This study--in line with previous default studies--confirms that over the long term (1981-2020), higher ratings are more stable than lower ratings. S&P Global Ratings subsequently withdrew the ratings at the issuer's request. Similarly, the second- and third-year conditional marginal averages--shown in the "Summary statistics" section at the bottom portion of the table--were 3.61% for the first 39 pools (96.39% of those companies that did not default in the first year survived the second year) and 3.23% for the first 38 pools (96.77% of those companies that did not default by the second year survived the third year), respectively. Earlier, on Dec. 30, 2019, S&P Global Ratings lowered its long-term issuer credit rating on Constellis to 'CC' from 'CCC+' after the company entered into a new $110 million priority first-lien term loan. With the region moving to promote disintermediation, this share of speculative-grade issuers could continue to grow. Later, on Sept. 16, 2020, we withdrew the issuer credit ratings on the company at its request. On July 2, 2020, we withdrew our ratings on the issuer after it filed for reorganization under Chapter 11. Each static pool can be interpreted as a buy-and-hold portfolio. On Oct. 28, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Sweden-based passenger flight transportation services company SAS AB to 'SD' from 'CC' after the issuer completed a distressed debt restructuring of its SEK2,250 million senior unsecured bond due 2022 into about 547 million common shares, at SEK1.16 per share. At the end of 2020, speculative-grade issuers once again became the global majority, accounting for 50.3% of rated issuers, from 49.9% at the beginning of the year. On June 26, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Irving, Texas-based CEC Entertainment Inc. to 'D' from 'CC' as the company filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. 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. This relationship between higher ratings and higher ratings stability holds even over longer time horizons (see table 21) and when broken out by region (see table 22). This study limits the reporting of default rates to the 15-year time horizon. This nonpayment was considered a general default, and the company was not expected to be able to pay most of its obligations. Prior studies have shown that fluctuations within default rates and transitions can vary greatly depending on many circumstances specific to particular time frames, industries, and geographic regions. On June 5, 2020, we raised our issuer credit rating on Noble to 'CCC-' from 'SD' as the company's repurchased about $118 million in principal value of its two seller loans due 2022 and 2023 at 85% of par value in a transaction we viewed as a selective default. The downgrade followed the completion of the partial repurchase of senior secured notes. Selective defaults accounted for just over half of all defaults in 2020. According to S&P, at the end of 2020, their 12-month trailing default rates amounted to 6.6% for U.S. speculative-grade. The issuer missed the interest and principal payment on its term loan of outstanding value of US$557 million, which was originally US$600 million. On Nov. 17, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Colorado-based exploration and production company Jonah Energy LLC to 'D' from 'CCC-' after the issuer elected not to make its full US$30 million reserve-based lending facility deficiency payment for September. Excludes downgrades to 'D', shown separately in the default column. We use rating modifiers (plus and minus signs) to calculate upgrade and downgrade percentages, as well as the magnitude of rating changes, throughout this study. For example, in the average one-year global transition matrix in table 33, each cell's weighted standard deviation is calculated from the series of that particular cell in each of the 40 cohorts beginning with the 1981 cohort and ending with the 2020 cohort. *This table compares the net change in ratings from the first to the last day of each year. The company will not make the interest payments within the 30-day grace period. 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. Often these are issuer-weighted averages. On July 2, 2020, we raised our issuer credit rating on BLY to 'CCC+' from 'SD' as the company completed amending interest payments on its senior secured notes to PIK from cash for 2020. Moody's optimistic scenario entails a strong recovery leading to a default rate forecast of just 2% for the year-end and maintaining around the 2% area for the initial months of 2022. Throughout the 40-year span, only eight companies initially rated 'AAA' have ever defaulted. 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. This transactions increased available liquidity and reduced cash interest for the short term. On Dec. 23, 2020, S&P Global Ratings raised its issuer credit rating to 'CCC+' from 'SD' based on the company's recent operating performance, improved cash flow, and financial transactions, which helped in improving its maturity profile and lowering interest rates. On Nov. 20, 2020, S&P Global Ratings withdrew its ratings on the issuer. On June 18, 2020, we raised the issuer credit rating to 'CCC+' from 'SD' after the debt exchange was completed. Four other sectors' speculative-grade proportions are greater than 70%, and telecommunications reached nearly 68% at the end of 2020. The company was continuing discussions with its debtholders, and we believed these would result in a comprehensive debt restructuring or a bankruptcy filing. This small sample size can, at times, result in historical default rates that seem counterintuitive. All rating changes that took place are reflected in the newly formed 1982 static pool through the ratings on these entities as of 12:00:01 a.m. on Jan. 1, 1982. Date of report (Date of earliest event reported): February 13, 2023. Among all Moody's-rated 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). On July 17, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Noble to 'D' from 'CCC-' as the company skipped the interest payment on its 7.75% senior notes due 2024. 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 33-40). The average amount of debt per defaulter in 2020 was the same as in 2019: $1.6 billion. Subsequently, we withdrew the ratings due to insufficient information. For instance, in the three years ended Dec. 31, 2020, 402 nonfinancial companies defaulted, while only 24 financials did. Australia, Canada, Japan, and New Zealand. Any Passwords/user IDs issued by S&P to users are single user-dedicated and may ONLY be used by the individual to whom they have been assigned. On Sept. 25, 2020, we withdrew our 'D' long-term issuer and issue credit ratings at the issuer's request. 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. At the time of the withdrawal, our 'D' rating reflected the nonpayment of the coupon on the $350 million Eurobond in April 2020 followed by a nonpayment of its mezzanine loan. On April 1, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Texas-based hamburger restaurant chain Steak n Shake Inc. to SD from 'CCC-' after the issuer completed a distressed exchange by retiring a portion of its term loan. The Default & Recovery Database is part of Moody's Analytics broader Default Suite of products. All rating changes that occur in between are ignored. On Aug. 26, 2020, we withdrew the issuer credit ratings on the company at its request. The estimated cross section of recovery rates is plausible, with an average recovery rate of 54% and substantial cross-sectional variation. The leading shareholder, LetterOne, purchased 97.5% of its 300 million 1% notes due in 2021 and 76% of its 300 million 0.875% notes due in 2023. 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 would be nearly the same, producing a Gini ratio of zero. Therefore, each annual default study is self-contained and effectively supersedes all previous versions. The sovereign downgrades of China in 2017, the U.K. in 2016, France in 2012, and the U.S. in 2011 have factored into the downgrades of many higher-rated financial services companies. The number of companies rated in the 'BBB' category has grown by 27% since the beginning of 2008, to roughly 1,847 at the end of 2020. On Oct. 1, 2020, S&P Global Ratings lowered the issuer credit rating to 'CCC-' from 'CCC+' on liquidity concerns, as audience attendance remained weak after reopening and major release dates were delayed. If S&P Global Ratings' corporate ratings only randomly approximated default risk, the Lorenz curve would fall along the diagonal. The share of newly assigned issuer credit ratings that are speculative grade has remained elevated in 2020: 78% of newly assigned issuer credit ratings globally were speculative grade. As a result, certain business units of S&P may have information that is not available to other S&P business units. Includes investment-grade and speculative-grade entities. On Oct. 30, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Netherlands-based general merchandise retailer Hema B.V. to 'SD' from 'CC' after the issuer completed a distressed debt restructuring transaction on Oct. 19, 2020. On July 17, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Delaware-based oil and gas exploration and production company Bruin E&P Partners LLC to 'D' from 'CC' after the issuer filed for Chapter 11 bankruptcy. On July 16, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Ohio-based oil and gas exploration and production company Chaparral Energy Inc. to 'D' from 'CCC-' after the issuer elected not to make interest payments of US$13.1 million due on its unsecured notes due 2023. The issuer's financial and operational situation had worsened because of the coronavirus pandemic. On April 12, 2020, Pace Industries Inc. filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. On Dec. 16, 2020, S&P Global Ratings withdrew the issuer credit ratings at the issuer's request. On April 21, 2020, S&P Global Ratings lowered the long-term issuer credit ratings on New Jersey-based advertising agency Engine Holding LLC to 'D' from 'CCC-' after the issuer entered into a forbearance agreement with its lenders on its failure to pay the debt interest and principal payments for the first quarter of 2020. In line with expectations, the Gini coefficients decline over time because longer time horizons allow for greater credit degradation among higher-rated entities. For example, 10 companies rated 'A' at any point in their lifetimes (excluding initial ratings) defaulted within one year of receiving this rating. Historically, nonfinancial defaulters tend to have a much smoother and shorter path to default (see chart 12). The issuer has limited refinancing options owing to the disruptions caused by the coronavirus and the presence of foreign currency-denominated debt, about 40%. Annual speculative-grade default rates increased in all major regions in 2020, relative to 2019. Distribuidora Internacional de Alimentacion S.A. On a year-over-year basis, the number of rated defaults globally was higher in every quarter of 2020 relative to 2019 (see chart 14). On Dec. 2, 2020, S&P Global Ratings lowered its long-term issuer credit rating on France-based car rental service provider company Europcar Mobility Group S.A. to 'SD' from 'CC' after the issuer elected not to pay the interest due on its 2024 and 2026 corporate senior notes prior to the end of the 30-day grace period. The largest defaulter in 2020 was U.S.-based telecommunications provider Frontier Communications Corp., with $22.5 billion outstanding at the time of its default. On June 1, 2020, we lowered the credit ratings to 'D' after the issuer commenced Chapter 11 bankruptcy restructuring, and subsequently on June 25, 2020, the ratings were withdrawn at the issuer's request. At the end of September, the trailing 12-month default rate for U.S. corporate issuers of speculative-grade bonds and loans was 8.5%, according to Moody's Investors Service. The negative outlook reflects our view of the company's unsustainable capital structure and heavy debt service burden, and our belief that Revlon could default on its debt obligations in the upcoming quarters. On Sept. 28, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC+' from 'D' after the issuer emerged from bankruptcy with a new capital structure comprising a priority exit facility due 2023. The links between transition matrices and average cumulative default rates are best illustrated through tables 30-32. And as a general rule, the highest proportions of rating changes for any given rating or rating modifier occur at adjacent ratings and rating modifiers. We consider this exchange as tantamount to default. . Ratings On June 4, 2020, we raised the issuer credit rating to 'CCC-' from 'SD', reflecting our view of the company's still unsustainable capital structure, very high debt service burden, and weak liquidity. We viewed the debt exchange as distressed due to the company's weak operating performance, liquidity constraints, and lack of compensation to existing lenders for the exchange. The issuer was also in talks with its lenders and noteholders for a comprehensive financial restructuring. On Oct. 7, 2020, Tennessee-based casual dining operator Ruby Tuesday Inc. filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code, which S&P Global Ratings considers a default. The company finalized a tender offer to repurchase $213 million of its outstanding $255 million 12% senior secured notes due 2022. 1Great Financial Crisis 2008/2009. On Nov. 18, 2020, S&P Global Ratings withdrew the issuer credit rating at the issuer's request. On June 24, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Salt Lake City-based drilling services provider and manufacturer Boart Longyear Ltd. (BLY) to 'SD' from 'CC'. The transaction was viewed as distressed because lenders got less than they were originally promised. S&P Global Ratings assigned initial ratings to 622 issuers in 2020, down from 650 issuers in 2019 and 875 in 2018. Note: Numbers in parentheses are standard deviations.