After nine defaults in March, global corporate defaults totaled 26 in the first quarter of 2025, down from 37 in the same period last year and below the five-year average of 29, according to S&P Global Ratings.

“Europe and the U.S. contributed significantly to the decrease in global default rates. In the 12 months through March 2025, defaults in each of the two regions declined by 27%,” Ekaterina Tolstova. Credit Analyst at S&P Global Ratings, said.

The volume of defaulted debt fell to $5.5 billion in March from $8.9 billion in February, marking the lowest monthly total since January 2023.

Market volatility and increased investor risk aversion, driven by rising trade tensions, are among the most immediate risks to credit conditions. While baseline default projections remain unchanged, S&P Global Ratings noted that defaults could move closer to its downside scenario if elevated tariffs persist.

“Our current downside scenario includes default rates of 6.00% in the U.S. and 6.25% in Europe by December 2025, compared with our baseline forecasts of 3.50% and 3.75%, respectively,” Tolstova said.