IN THE first eight months of 2026 Romania’s builders produced 11.6% more than a year earlier. Manufacturing produced 4.8% less. Retailers sold 5.1% less by volume. The fall in retail began in August 2025, the month value-added tax went up; the link is one of timing, not a proven cause.

Bankruptcies are rising. Eurostat’s index of bankruptcy declarations was 7% higher in the first half than in the first half of 2025: 19% higher in construction and 13% in transport. Meanwhile the share of active companies already in insolvency, judicial reorganisation or bankruptcy reached 0.73% in October 2026, from 0.58% in July 2025.

The 2025 accounts, published by the Ministry of Finance on October 14th, show an economy that grew only slightly faster than inflation. Across the same 836,360 companies, turnover rose by 7.5% against consumer-price inflation of 6.8%. Net income rose by 5.5%, slower than prices. Debt rose by 10.6%, faster than sales.

From public data alone, we built a credit rating on the agencies’ usual scale, from AAA to D. The model learns from one year’s accounts which companies enter insolvency in the following 12 months, according to their status at the trade register. Its grades line up with the default rates observed: 0.06% for A, 0.20% for BBB, 0.82% for BB, 3.4% for B.

The typical Romanian company is BBB, the lowest investment grade. Average risk, though, falls in BB, the first step below, because the riskiest companies pull the average up. Lines of business differ less than one might expect: from an average probability of default of 0.18% in accounting and legal services to 1.04% in electrical equipment. Companies within a line of business differ far more. A rating by sector is a first impression; the borrower’s own accounts still make the credit decision.

For a BB borrower, risk adds 0.5–1 percentage point to the rate.

For a lender, a BB borrower adds 0.2–0.4 points of expected loss and 0.2–0.6 points of capital cost to the rate: 0.5–1 point in all, depending on the collateral and on how capital is calculated. Funding and the lender’s own costs remain the bulk of the price. The down payment matters more: for the asset alone to cover the debt at repossession, a car needs about 28% down and a tractor unit over 40%.

Construction output climbed almost every month, from 130 in January to 174 in August (2021 = 100). Builders’ confidence improved too, from −11.4 to −9.3. Yet construction bankruptcies rose by 19% in the first half. More output and more failures in one sector could be explained, for instance, by work concentrated in large firms ahead of the EU recovery-fund deadline of August 2026, leaving small ones without orders. Public data do not let us test that explanation.

Transport has the highest churn. The index of new registrations reached 164 in the first half, 42% above its 2024 level. Transport bankruptcies reached 100.8 in the second quarter, the second-highest reading since 2024. Companies open and close at a pace no other line of business matches.

New registrations appear to have risen by 31% on the first half of 2025. That is a base effect: the first half of 2025 was the weakest in years. Against 2024, the 2026 level is 3% lower, and 20% lower in trade.

The economic sentiment indicator stayed between 91 and 94 all year, below its long-run average of 100, with no month of recovery. Retail confidence improved clearly from July, from −8.2 to +4.6 in October. Industry and services slipped to −3.7 and −3.8. Consumers remain gloomy, at around −33.

The European Union is moving the same way, more sharply. Its bankruptcy index reached 196 in the second quarter, the highest since 2019. In transport the EU index stands at more than 2.5 times its 2021 level. Romania’s reading of 52 cannot be compared with it directly: the first quarter of 2021 saw an unusual spike, 208.7, which lifts the base.

Default here means that a company enters insolvency, judicial reorganisation or bankruptcy, according to the status codes published by the National Trade Register Office. It does not mean a payment more than 90 days late, the definition banks use. On the banks’ definition there would be more defaults.

The model learns from one year’s accounts which companies enter proceedings in the 12 months after filing. Training uses the 2023 accounts and register status between July 7th 2024 and July 2nd 2025: 630,539 active companies, of which 2,777 entered proceedings. The test uses a year the model had not seen: the 2024 accounts and the insolvencies between July 2nd 2025 and July 8th 2026, 3,898 companies out of 669,920. The current rating uses a model trained on both years.

The model uses 16 indicators from the accounts and the register: working capital, reserves, pre-tax result and equity relative to assets, leverage, liquidity, net margin, negative equity, losses, size, headcount and the company’s age. It is a gradient-boosting model, which also captures non-linear relationships between indicators. The rating is the average of eight such models trained on the same data, because a single model moves part of its grades from one run to the next.

On the test year the model separates companies that enter insolvency from the rest with an AUC of 0.84. The Altman score for emerging markets, adapted to the same indicators, reaches 0.70. On a different target, any exit from the market (a company that stops filing), the Altman score separates nothing, with an AUC of 0.50. Small consultancies close often, but rarely through insolvency.

The rating scale is the agencies’. The thresholds between grades are the geometric means of the long-run one-year default rates S&P publishes for adjacent grades. A company’s probability of default becomes a letter as follows: below 0.01% AAA, up to 0.03% AA, up to 0.09% A, up to 0.30% BBB, up to 1.4% BB, up to 9.2% B, above that CCC/C. Companies already in proceedings are graded D.

The model slightly underestimates: it predicted 0.47% and 0.58% was observed. The gap fits the 2026 wave of insolvencies, which a model trained on the previous year could not see. The order of the grades holds from AA to CCC/C, which is what matters for a credit decision.

BB is the first grade below investment grade. The borrower pays its debts today but is sensitive to a fall in sales or a rise in rates. Its one-year probability of default is 0.82% in our data. Over a five-year contract, at the same annual rate, that compounds to about 4%. In practice it is more, because some BB companies slip to B during the contract.

Expected loss per year is the probability of default times the loss given default (LGD). Unsecured, the reference LGD in bank regulation is 45%. In leasing the financed asset reduces the loss: with a reasonable down payment, LGD falls to 25% or less.

The risk of a BB borrower therefore raises the rate by 0.5–0.8 points at a bank with internal models, and by 0.7–1 point under the standardised approach used by non-bank lenders and many banks. The difference shows between grades: from BB to B expected loss rises almost fourfold, from 0.21% to 0.80% a year at an LGD of 25%. Required capital rises from 3.0% to 4.4% of the exposure.

Default is not late payment

We measure entry into proceedings at the trade register. A bank also counts payments more than 90 days late, so its default rates are higher.

Insolvency is not the only way out

Small companies close mostly by being struck off, not through insolvency. In the tenth with the lowest turnover there are almost ten strike-offs for every insolvency; in the tenth with the highest, one strike-off for almost three insolvencies (2024 accounts, register status in July 2026). That is why AA is made up almost entirely of micro-companies with at most one employee. A good grade means a low risk of insolvency, not a strong company.

The largest companies are missing

The 102 companies that report under IFRS, with RON 133bn of turnover, are published in a separate Ministry of Finance file and are not rated. They include OMV Petrom, Rompetrol Rafinare, Hidroelectrica and Romgaz.

Register snapshots

A company’s status can only be joined to the register file of the same snapshot: registration numbers moved to a new format, and a join across months loses tens of thousands of companies. A tax ID can carry several registrations, for instance after a move to another county; a company counts as struck off only if all its registrations are struck off.

Two classifications

The 2025 accounts mix the old and new activity codes. Companies founded in 2025 have no 2024 code and appear only in the totals.

The 2025 set is a first release

Late filings will appear in updates. The 2025 totals are computed only on companies present in both years.

The S&P rates

They are quoted from secondary sources as a reference for the scale; the primary S&P study could not be read directly. The model’s calibration is checked against rates observed in Romania, not against S&P’s.

Pricing assumptions

Funding spread, operating cost, margin, depreciation curves and the timing of defaults are stated assumptions. Reference rates are observed; probabilities of default are estimated by the model and checked against observed defaults.

Sources. Ministry of Finance: Ministry of Finance, annual financial statements 2023, 2024 (June 2026 update) and 2025, data.gov.ro, 2026-10-14, confirmed, https://data.gov.ro/dataset/situatii_financiare_2025. Trade Register: National Trade Register Office, registered companies, snapshots of 2024-07-07, 2025-07-02, 2026-07-08 and 2026-10-19, data.gov.ro, 2026-10-20, confirmed, https://data.gov.ro/organization/onrc. Eurostat: sts_rb_q, sts_copr_m, sts_trtu_m, ei_bssi_m_r2, irt_st_m, prc_hicp_aind, 2026-11-02, confirmed, https://ec.europa.eu/eurostat/databrowser/view/sts_rb_q/default/table. Statistics Institute: National Institute of Statistics, Tempo Online, IND104P and INT101O, 2026-10-13, confirmed, http://statistici.insse.ro:8077/tempo-online/. S&P: S&P Global Ratings, Annual Global Corporate Default and Rating Transition Study, one-year averages quoted from secondary sources, 2025-03-27, secondary, https://www.spglobal.com/ratings/en/research/articles/220413-default-transition-and-recovery-2021-annual-global-corporate-default-and-rating-transition-study-12336975. Innovia: Rating model, calibration, pricing and down payment: own calculation, 2026-11-02, estimated, https://innoviasystems.io