Monthly corporate defaults surged to 19 in May 2025, more than double the eight reported in April and the highest monthly count since October 2020, according to S&P Global's RatingsDirect Corporate Defaults report.

The year-to-date total is 53, which remains lower than the 69 in 2024 and close to the five-year average of 54, with all major regions still lower than last year's levels.

"The number of defaulted issuers due to missed payments rose to eight, up from zero in April, while ten of the 19 were first-time defaulters," S&P Global Ratings credit analyst Ekaterina Tolstova said. The latter primarily came from the media and entertainment, health care and consumer products sectors, which collectively account for 43% of year-to-date defaults.

"The May spike broke the pattern of lower defaults earlier in the year, showing the vulnerability of lower-rated borrowers amid market volatility and an uncertain economic landscape," Tolstova added.

"We expect speculative-grade corporate default rates to reach 4% in the U.S. and 3.6% in Europe by March 2026. However, if uncertainty around tariff levels persists, these could reach 5.5% in the U.S. and 5.25% in Europe," she said.