Selective default

An S&P Global Ratings issuer designation, abbreviated SD, for default on specified obligations while the issuer continues to meet others under the agency’s criteria. It can arise in a distressed exchange; it is distinct from the rating of an individual debt issue.

Selective default in practice

Hypothetical: a borrower misses contractual payments due on one debt issue while continuing to pay other obligations on time. S&P may assign an SD issuer rating under its criteria. The share of principal affected does not mechanically determine the rating, and timely payment is not the accounting classification of a current liability.

Reference

Rating-provider overview: S&P Global Ratings: Understanding Credit Ratings.

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