The U.S. is “leading the world in defaults” at 122 so far this year, with S&P Global data showing that the majority are occurring in the consumer products, oil & gas, retail and restaurant sectors. This according to a recent article in Institutional Investor.

“The pace of defaults in the pandemic is faster than during the global financial crisis of 2008,” according to S&P analyst Sudeep Kesh, who added that the firm estimates a trailing 12-month default rate of 6.3 percent compared to a historic average of about 4 percent. By comparison, Europe has seen 30 defaults this year.

Kesh noted, “The credit environment was very, very vulnerable to some kind of economic shock” prior to the pandemic because companies were aggressively increasing their debt levels as interest rates remained low.

The U.S. consumer products sector is the hardest hit, reportedly accounting for 81 percent of global defaults versus about half at the end of 2019. Within that sector, the pandemic has had an uneven impact on companies, with “food and household products and personal care benefiting from stay-at-home orders…while food service, durables, luxury and apparel have been hurt by social distancing policies.”

According to Kesh, defaults have been driven by missed interest and principal payments “as companies’ revenue dried up.”