The COVID-19 Credit Crisis

The fall of car rental giant Hertz Global Holdings, Inc. proves the point that the health of an entire supply chain, from raw material harvesting to finished products, is critical to understand relative to assessing bankruptcy risk potential.

In the COVID-19 age, institutional investors and CLO managers have reined in their appetite for incremental leveraged loan issuance. Corporate borrowers, as consequence, are bearing the brunt of this fallout.

In a pandemic period when major public company bankruptcies are hitting hard daily, reliance on payment performance and/or financial statement analysis provides a whole new slew of dangers.

Part of CreditRiskMonitor's Mid-Year Review series, we focus on the volatile state of casual dining establishments and how the FRISK® score is helping credit and procurement managers stay ahead of bankruptcy risk.

Part of CreditRiskMonitor's Mid-Year Review series, we focus on the volatile state of casual dining establishments and how the PAYCE® score is helping credit and procurement managers stay ahead of bankruptcy risk.

Unless there is a rapid economic recovery, more retailers are going to go the way of J. C. Penney, Pier 1 Imports, Neiman Marcus and J.Crew. That is: bankruptcy.

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.

It’s just not working out: the coronavirus pandemic is forcing the hand of financially weak American fitness operations to pursue bankruptcy, with many involving permanent location closures.

Thomas Cook and Virgin Australia, two massive airliners, have filed bankruptcy. Could American Airlines be next?

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.

The longer the coronavirus persists, the harder it will be for health services operators to avoid bankruptcy, quite similar to what recently transpired with Quorum Health Corporation.

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.

The FRISK® score downgraded retailers and restaurants in February and March following the market sell-off stemming from coronavirus.

CreditRiskMonitor anticipates tighter access to credit in the years ahead and an escalation in bankruptcy filings – if we’re not heading for a recession, it may be a depression.

The coronavirus has reduced air travel across key channels worldwide. Equity markets are souring on airliners, especially those that already carry excessive debt and are strapped for cash.

As the coronavirus (COVID-19) sends shockwaves through the stock market and the world at large, it has also greatly upped the financial risk potential for automotive, technology, healthcare, chemicals, and many other industries.