The harsh downturn in several end markets has resulted in overcapacity in key industrial commodity markets, causing base metal prices to break materially lower. We note where bankruptcy is most probable.
With economies around the world on the brink of recession, or already in one, any professional monitoring financial risk needs to establish proper oversight now before commercial bankruptcies wreak greater havoc upon their portfolio.
Even with government intervention, trade credit insurance is waning at the exact time when it is needed most. The longer the coronavirus persists, the more bankruptcies will ensue and the harder it will likely become to acquire trade insurance.
The coronavirus has unleashed the global debt crisis that CreditRiskMonitor has been predicting. Credit professionals need to take action to ensure that they aren’t unduly impacted by delayed payments and bad debt write-offs.
In a recent webinar with leading credit experts, CreditRiskMonitor CEO Jerry Flum noted that a world built on nonfinancial corporate debt is susceptible to mass bankruptcy in the wake of the COVID-19 pandemic.
Today, bond rating agencies are downgrading corporate credit at a faster pace than any point in the last decade. The coronavirus has sapped product and services demand and disrupted global supply chains.
CreditRiskMonitor warned of the increased bankruptcy risk at newspaper owner McClatchy Company for more than a year before their Chapter 11 filing in February 2020. Yet McClatchy Company is not an isolated case and risk professionals should be monitoring other news provider outlets closely.