There were 11 defaults in September, which brought the global corporate default total to 118 this year, nearly twice as much as the 2022 total, and marginally above its 5-year average of 101, said S&P Global Ratings in a report published today, "Distressed Exchanges Drive 2023 Global Corporate Defaults To 118."

"Distressed exchange defaults are continuing to appeal to some distressed issuers that view out-of-court restructuring more favorably than other options like traditional bankruptcy," noted Nicole Serino of S&P Global Ratings Credit Market Research.

With six additions in September, the total count of distressed exchanges increased to 52 so far in 2023, making it the highest year-to-date count of distressed exchanges since 2009.

Although down month over month, U.S. and European defaults have both increased and can be attributed to persistent core inflation, a drawn-out period of high rates, and slower growth. S&P Global Ratings expects both the U.S. and European trailing-12-month speculative-grade corporate default rates to increase to 4.5% and 3.75% as of June 2023 from current levels of 3.7% and 3.3%, respectively.

This report does not constitute a rating action.

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