Monterrey.- Vice Media led a group of 7 major companies that filed for bankruptcy in the US in a recent 48-hour period, Business Insider reported.
This situation, he added, exposed how exposed highly indebted companies are as a result of the increases in the interest rate of the US Federal Reserve.
With it has come a credit crunch that is spreading rapidly, crippling companies with large debts.
In 2017, Vice had a $6 billion valuation, a high-profile documentary series on HBO, and its web traffic skyrocketed in large part thanks to a certain polarizing President who had just taken office, but last Monday, loaded With liabilities of a billion, he filed for bankruptcy.
Six other large companies, including KKR-backed medical staffing firm Envision Healthcare, threw in the towel in the aforementioned 48-hour period, the busiest period for bankruptcies since 2008, according to Bloomberg data on companies with at least 50 Millions of dollars in liabilities.
A bankruptcy filing is not necessarily a death sentence for a business, as it gives companies the chance to restructure their debt and come out with a healthier balance sheet.
Still, a spike in bankruptcy filings clearly demonstrates increased economic stress.
Moody’s expects corporate defaults with speculative-grade debt to rise to 4.9 percent by March 2024, up from 2.9 percent at the end of the first quarter of 2023.
S&P Global’s reading isn’t much more promising, seeing the default rate for companies rated “junk” hit 4 percent by the end of the year, more than double the 1.7 percent at the end of 2023.
Retailers from Bed Bath & Beyond to David’s Bridal have filed for bankruptcy in recent weeks.
