VNQ - Bankruptcies On The Rise Following End Of COVID Relief Measures And High-Interest Rates | Benzinga
Corporate bankruptcies have seen a sharp increase in the last year as interest rates rose and following the withdrawal of trillions of dollars worth of COVID-19 support packages.
U.S. court data showed that Chapter 11 filings rose by 30% in the year to September compared to the same period a year ago. This followed a decade of declines in bankruptcies. Back in June, Bank of America noted there had been 236 corporate bankruptcies in the U.S. between January and April — double the previous year’s rate for the same period.
The rise in interest rates, combined with the unwinding of pandemic-era government support programs, have fueled the rise in the insolvency rate, leading to the collapse of so-called zombie companies — highly indebted firms that are no longer able to repay their loans without additional funding.
Industries At Risk
Industries most at risk appear to be in the hospitality and ...