This article presents transition matrices and default rate analysis for listed US non-financial firms rated by RapidRatings between 1/1/2001 and 12/31/2025. We present 1 and 3-year perspectives and the default rates associated with each risk category within each time window.
The universe for the analysis includes all listed non-financial firms that have qualified for the Russell 3000 index at any time during the 25-year period. This includes 7,201 entities, 813 of which defaulted during the period, and for which we issued more than 330,000 ratings over time. ‘Default’ is defined as bankruptcy filing or formal insolvency proceedings (filings under Chapter 7-liquidation or Chapter 11-reorganization, of the U.S. Bankruptcy Code, or cross-border case recognized under Chapter 15).
Default Rates and Rating Transition Matrix
Within this section, RapidRatings employs a static pool methodology commonly used in credit rating analysis. This methodology establishes pools of rated entities as of the start of each calendar year where the start and end rating for that calendar year (or subsequent calendar years for a 3-year view) is included in the analysis.
Tables 1 to 4 present transition rates and default rates by rating category (20-point bands). Table 5 presents default rates each year by rating deciles (10-point bands).
