Default, Transition, and Recovery: 2017 Annual Sovereign Default Study And Rating Transitions

In 2017, there were six defaults among the sovereign obligors that S&P Global Ratings rates. This is the highest number of sovereign defaults in a single year, though there were only five defaulting sovereigns, as El Salvador defaulted twice. The other defaulters were Belize, Congo-Brazzaville, Mozambique, and Venezuela. All but El Salvador had also defaulted in previous years. Last year's total was four more sovereign defaults than in 2016, and 2017 was the sixth consecutive year with at least one. Including the defaults, we lowered 22 sovereign ratings and raised 13 in 2017. Rating actions in 2017 were less numerous and had a more positive bias than in 2016, with significantly more upgrades and fewer downgrades. The resulting ratio of

...May 8, 2018 In 2017, there were six defaults among the sovereign obligors that S&P Global Ratings rates. This is the highest number of sovereign defaults in a single year, though there were only five defaulting sovereigns, as El Salvador defaulted twice. The other defaulters were Belize, Congo-Brazzaville, Mozambique, and Venezuela. All but El Salvador had also defaulted in previous years. Last year's total was four more sovereign defaults than in 2016, and 2017 was the sixth consecutive year with at least one. Including the defaults, we lowered 22 sovereign ratings and raised 13 in 2017. Rating actions in 2017 were less numerous and had a more positive bias than in 2016, with significantly more upgrades and fewer downgrades. The resulting ratio of downgrades to upgrades was lower in 2017 than in 2016, but downgrades still outnumbered upgrades. Rating-action triggers were unusually varied in 2017. Defaults were the most common reason for downgrades, but six other factors were also cited...

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