The eligible holders of second-lien notes received 97.5 cents on the dollar of the principal amount, whereas first-lien notes holders received 90 cents on the dollar of the principal amount. On Aug. 14, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Texas-based midstream energy company Martin Midstream Partners L.P. to 'SD' from 'CC' after the issuer announced the completion of the distressed exchange of US$364.5 million senior unsecured notes due in 2021. PDF An Introduction to Collateralized Capital Loan Obligations (CLOs - ICG On June 16, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Wisconsin-based small-engine manufacturer Briggs & Stratton Corp. to 'SD' from 'CCC-' after the issuer didn't make semiannual interest payments and used the grace period. U.S., Bermuda, and the Cayman Islands, Other developed: Of the 226 defaults in 2020, 198 were from companies rated as of the beginning of the year. Sector In-Depth . 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. On May 26, 2020, S&P Global Ratings lowered its issuer credit rating on Oklahoma-based oil and gas exploration and production company Unit Corp. to 'D' from 'CC' after the issuer reorganized under Chapter 11 of the U.S. Bankruptcy Code. 1Great Financial Crisis 2008/2009. 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 1985-1991. 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). Preferred stock is not considered a financial obligation; thus, a missed preferred stock dividend is not normally equated with default. Moody's Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby disclosesthat most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody's Investors Service, Inc. This is not surprising at the three- and 10-year horizons, considering the relative stress of the financial crisis has now passed beyond the 10-year time frame. The regions covered in this study are: U.S. and tax havens: Low demand, weak macroeconomic performance, and the pandemic led to weakening liquidity and performance. A majority of issuers have been rated speculative grade before--the first instance in July 2018--but the ratio has largely hovered around 50% since. On July 1, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Mexican commercial aviation services provider Grupo Aeromexico S.A.B. 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. PDF Sovereign Default and Recovery Rates - Moody's Analytics Earlier, on May 5, 2020 we lowered the issuer credit rating on Avianca to 'CCC-' from 'CCC' and kept the ratings on CreditWatch with negative implications. 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 Jan. 30, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Pinnacle Operating Corp. to 'SD' from 'CCC'. 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. Recovery rate is essential to the estimation of the portfolio's loss and economic capital. There were no downgrades among the eight 'AAA' rated companies in 2020. 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. Earlier, on April 22, 2020, we lowered our issuer credit rating on Revlon to 'CC' from 'CCC-' after the company announced it was pursuing a recapitalization transaction to extend the maturity of its existing 2016 $1.8 billion term loan, term out its unrated $200 million term loan issued in 2019, and enhance its liquidity position. On Dec. 10, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC+' from 'SD' following the company's debt repurchase. A total of 3,098 defaults have been recorded globally since 1981. When comparing default rates across sectors, we note some key differences between the industries. (For details on the Gini methodology, refer to Appendix II.). 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 June 2, 2020, S&P Global Ratings lowered its issuer credit rating on U.K.-based offshore drilling contractor Noble Corp. PLC to 'SD' from 'CCC-'as the company paid off 85% of its two seller loans (unrated) in exchange for a discount to the outstanding balance, effectively repurchasing both loans at about 85% of par value. Historically, nonfinancial defaulters tend to have a much smoother and shorter path to default (see chart 12). S&P Global Ratings then withdrew its issuer credit ratings on the company at its request. It had other coupon payments of US$8 million each in August and October. On Nov. 6, 2020, S&P Global Ratings raised the issuer credit rating to 'CCC' from 'SD' on completion of restructuring. Before 2010, the majority of newly assigned European issuer credit ratings were investment grade, but since then, roughly 73.6% of newly assigned ratings have been speculative grade annually. Sources: S&P Global Ratings Research and S&P Global Market Intelligence's CreditPro. For these counts of large downgrades, we include movements to 'D' (default) along with what we normally report as downgrades (that is, downward movements between active ratings). But over the past three years--now that more than a decade has passed since the financial crisis of 2008-2009--financial services defaulters show a median rating in the 'B' category five years prior to default. This would be considered a default since S&P Global Ratings believes the second-lien noteholders will receive less than they were originally promised. The debt has been converted from cash to PIK at LIBOR+450 for US$125 million while another US$50 million at LIBOR+1000. For example, if an entity was rated 'A' on Jan. 1, 2020, and was 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' that ended the year as 'A'. In Europe, by contrast, the share of speculative-grade ratings remains in the minority. 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. The rating action followed the company's distressed exchange after repaying only a portion of amount outstanding on its 1.5-lien notes. On June 15, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Virginia-based tobacco leaf merchant Pyxus International Inc to 'D' from 'CCC-' after the issuer announced a reorganization process under Chapter 11 of the U.S. Bankruptcy Code with 92% of principal amount of its first-lien notes and 67% of its second-lien notes holders. We use the static pool methodology to avoid certain pitfalls in estimating default rates, such as by ensuring that default rates account for rating migration and allowing for default rates to be calculated across multiperiod time horizons. PFS also announced an agreement to merge with Animal Supply Co. On May 6, 2020, S&P Global Ratings lowered its ratings on the issuer to 'D' from 'SD' upon missed interest payments, following which, on May 14, 2020, the ratings on the issuer were withdrawn. For the transition matrices in tables 21-23 and 33-44, 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. On Sept. 28, 2020, S&P Global Ratings lowered its long-term issuer credit rating on French trade show organizer Cassini SAS to 'D' from 'CCC' after the issuer entered into safeguard procedures because of losses caused by COVID-19-related show cancellations and postponements. Over this same period, as the number of the highest-rated investment-grade companies dwindled, the count of the lowest-rated investment-grade companies surged. PDF The Economic Impact of the American Recovery and Reinvestment Act Multiyear transitions were also calculated for periods of two up to 20 years. Ratings stability decreased in 2020, to 69.2%, largely the result of the downgrade rate of 18.5%, which was the highest since 2009. 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'. On Nov. 19, 2020, we lowered our issuer credit rating to 'SD' from 'CC 'as the company completed its previously announced 5.75% senior notes exchange. It shows the ratio of actual rank-ordering performance to theoretically perfect rank ordering. Earlier, on April 1, 2020, we lowered our issuer credit rating on Gavilan to 'CCC-' from 'CCC+' after the issuer drew the full amount on the US$200 million reserve-based lending facility, which was up for redetermination in April 2020. 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). Therefore, if an issuer has rated debt but not an issuer credit rating, we assign a proxy rating so that the CreditPro corporate dataset accurately represents the complete universe of ratings. 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. We did not expect the company to make the interest payments due June 30 and anticipated that it could complete a comprehensive debt restructuring with its debtholders prior to Sept. 30, 2020, which is when its latest forbearance agreement would expire and its next interest payments come due. Transition rates compare issuer credit ratings at the beginning of a period with ratings at the end of the period. expect solid corporate bond issuance and low defaults. We combined these percentages to obtain cumulative default rates for the 40 years the study covers (see tables 24-26 and 30-32). 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 May 25, 2020, S&P Global Ratings lowered the issuer credit rating on U.K.-based foreign-exchange service provider Travelex Holdings Ltd. to 'D' from 'CCC' after the issuer failed to make the interest payments on its senior secured notes. The company instructed the trustee to give a notice of optional redemption to redeem the remaining balance on Dec. 14, 2020. Default, Transition, and Recovery: 2019 Annual Global Corporate Default In the seven-year Lorenz curve, speculative-grade issuers constituted 88.3% of defaulters and only 36.7% of the entire sample (see chart 29). Defaults increased in many sectors in 2020, though the consumer services and energy and natural resources sectors once again led the global default tally, together accounting for almost 54% of the total. The study Default, Transition, and Recovery: 2019 Annual Global Corporate Default And Rating Transition Study April 29, 2020 Key Takeaways - The global speculative-grade corporate default rate rose to 2.5% in 2019 from 2.1% at the end of 2018, while the number of corporate defaults globally rose to 118, the first triple-digit total since 2016. 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. In this case, these are the seven-year Gini ratios from the 1981 cohort through the 2014 seven-year cohort. The issuer is exploring other strategic alternatives as liquidity remains constrained. Default rate will rise this year, Moody's says | CFO Dive The syndicated creditors will now acquire 49% of the capital of the operating business. S&P assumes no obligation to update the Content following publication in any form or format. 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. On June 25, 2020, S&P Global Ratings lowered its long-term issuer credit rating on Houston-based exploration and production (E&P) company W&T Offshore Inc. to 'SD' from 'CCC+' following the company's announcement that it repurchased about $72.5 million of its second-lien notes due 2023, about 10% of its total year-end 2019 long-term debt, for roughly $23.9 million, or an average 33% of par value. On Nov. 20, 2020, S&P Global Ratings withdrew its ratings on the issuer. On April 20, 2020, we raised the rating to 'CCC+' on account of liquidity the company maintained. The default rates that we refer to as weighted averages in this study use the number of issuers at the beginning of each year as the basis for each year's weight. Measured on a dollar volume basis, Moody's global speculative-grade bond default rate ended 2009 at 15.6%, up from 5.9% at the end of 2008. Of the 10 that were initially investment grade, the average time to default--the time between first rating and date of default--was 21.8 years, with an associated standard deviation of 14.1 years. For additional details on the 2020 defaulters, see Appendix III. Of the rated defaulters at the beginning of 2020, none began the year with an investment-grade rating. On Aug. 17, 2020, S&P Global Ratings withdrew its ratings on the issuer. We then divide this by the ratio of the total number of nonzero weights minus one and the total number of nonzero weights. On Oct. 2, 2020, S&P Global Ratings raised its issuer credit rating to 'CCC+' from 'SD'. The company had a $135 million interest payment due in mid-July and a $208 million debt maturity in August 2020, and its bonds traded at less than $0.10 on the dollar. Earlier, on June 10, 2020, we lowered our issuer credit rating on Serta Simmons to 'CC' from 'CCC-' following the company's announcement that it entered into a transaction support agreement with a majority of its first- and second-lien term loan lenders to recapitalize the company. On Jan. 8, 2021, S&P Global Ratings withdrew its issuer credit rating. To reprint, translate, or use the data or information other than as provided herein, contact S&P Global Ratings, Client Services, 55 Water Street, New York, NY 10041; (1) 212-438-7280 or by e-mail to: research_request@spglobal.com. (EDGAR Online via COMTEX) -- NETSCOUT SYSTEMS INC false 0001078075 0001078075 2023-02-22 2023-02-22 The group entered into a forbearance agreement with its bondholders, such that they will not take any enforcement action with respect to the nonpayment of interest payments on the 2026 notes that were due on Oct. 30, 2020, or on the 2024 notes that were due on Nov. 16, 2020.