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Corporate default rates

Valuation/credit · 1981 to 2026 · S&P, Moody's and Fitch · 6 sources · data as of 1 Aug 2026

A default is what happens when a company that borrowed money doesn't pay it back on the terms it agreed. The default rate is just how often that happened across a group of borrowers in a year. People treat it as a temperature reading for the whole economy, which is fair enough, and then they quote a single number as if there were only one.

There isn't. That's most of what this page is about. You'll find the annual series, the four big peaks going back to 1981, the long run average of 2.93%, and where the current cycle sits. But the part I'd actually read first is the section on composition. Distressed exchanges, where a company talks its lenders into accepting less rather than filing for bankruptcy, were 59.3% of global defaults in 2024. Moody's put the US high yield rate at 5.8% including them and 2.1% excluding them in June 2025. Same market, same month, two numbers you could honestly print.

So the headline default rate today is measuring something quite different from what it measured a decade ago, and most commentary hasn't caught up. Six sources sit at the bottom of this page, from S&P, Moody's and Fitch, each with its own date. Where the agencies contradict each other, or contradict themselves, I've said so in the notes rather than picking the tidier number.