Default, Transition, and Recovery: 2023 Annual European Corporate Default And Rating Transition Study

S&P Global Ratings' European corporate default tally nearly doubled to 30 in 2023 from 17 in 2022 as inflation and higher interest rates weighed on some issuers' earnings and cash flow. The tally includes the defaults of companies from both financial and nonfinancial sectors (see chart 1). Financing conditions were more challenging for lower-rated issuers: All European corporate defaulters with active ratings at the start of the year were speculative-grade issuers (rated 'BB+' or lower), with over two-thirds rated 'CCC+' or lower. Consequently, the speculative-grade default rate climbed to 3.5% in 2023, its highest since 2020, from 2.2% the year before. Of the 30 total European corporate defaults in 2023, 27 were from companies assigned active ratings at the start

...- The corporate default tally in Europe increased to 30 in 2023 from 17 in 2022. - All defaulters with active ratings at the start of the year (27) were assigned speculative-grade ratings, with 22 in the '###'/'##' category. - Despite upgrades outnumbering downgrades in 2023, the proportion of issuers rated 'B-' or lower remained historically high as of Dec. 31, indicating some credit risk persisting into 2024....

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