On December 31, 2021, the credit quality of S Co deteriorated significantly due to poor market conditions but S Co did not default on the interest payment. The probability of default during the next 12 months to December 31, 2022 was 5% and the probability of default during the remaining lifetime to December 31, 2024 was 25%. Apply discounting at 7%.

(a) What stage of impairment loss would describe the state of S Company bonds during 2021?