Default, Transition, and Recovery: 2020 Annual Sovereign Default And Rating Transition Study

The spread of COVID-19 and the collapse of oil prices created challenging credit conditions for sovereigns rated by S&P Global Ratings in 2020. The number of sovereign defaults climbed to a high of seven, while downgrades rose to their highest tally since 2011 and outnumbered upgrades by a ratio of 10 to 1. With the global economy falling into a sudden recession in the first half of 2020, sovereigns that entered the year with weaker ratings were most exposed. All of the defaults were from sovereigns rated 'B' or lower, and most downgrades were of speculative-grade sovereigns (rated 'BB+' or lower) from the emerging and frontier markets. In 2021, sovereign ratings may continue to face pressure amid expected massive fiscal

...- Sovereign defaults reached a record high of seven in 2020 as COVID-19 and falling oil prices hurt global credit quality; all the defaulters began the year rated 'B' or lower. - Sovereign downgrades rose to 26, and most were of speculative-grade issuers from the emerging and frontier markets. - Despite the unprecedented economic, social, and financial market turmoil in 2020, sovereign credit ratings showed solid performance with a one-year Gini ratio of 91.5%, near the long-term average. - By the end of 2020, the number of sovereigns rated at the lowest rating levels, '###+' and below, had risen to seven, suggesting defaults could remain elevated in coming years. The spread of COVID-19 and the collapse of oil prices created challenging credit conditions for sovereigns rated by S&P Global Ratings in 2020. The number of sovereign defaults climbed to a high of seven, while downgrades rose to their highest tally since 2011 and outnumbered upgrades by a ratio of 10 to 1. With the global economy...

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