The number of global corporate defaults rose 80% in 2023, S&P Global Ratings Credit Research & Insights said today in a new report, and more credit deterioration is likely in 2024 amid slowing economic growth and high financing costs.

In "Corporate Defaults Jumped 80% In 2023 To 153," we note that our tally of global corporate defaults ended 2023 at 153 following 12 defaults in December. The U.S. alone saw corporate defaults more than double in 2023; our report attributes the high number of U.S. defaults, in part, to the relatively high number of leveraged loan and debt issuers that are rated 'CCC+' or below.

Many firms in that category have been seeing "negative cash flows coupled with elevated leverage, high-interest expenses, and weak liquidity," said Nicole Serino of S&P Global Ratings Credit Research & Insights.

Among sectors, it was the global media and entertainment sector that experienced the most defaults in 2023, with 31. We think consumer-facing sectors will be notable contributors to corporate defaults again in 2024--but because of higher interest rates, we also expect mounting pressure on issuers that have higher debt burdens.