The US Under Trump: Q1 Large Enterprise Bankruptcies Hit a 15-Year High for the Same Period

The latest report released by S&P Global Market Intelligence on Thursday showed that the number of bankruptcies among large US companies in Q1 increased significantly, reaching the highest level for the same period since 2010.

According to S&P Global, from January to March, 188 bankruptcy applications were filed by large US companies, a notable increase from 139 in the same period last year, which had already marked a 14-year high.

The 188 bankruptcy filings were also the highest since the same period in 2010, when 254 filings were recorded due to the economic downturn following the global financial crisis.

S&P Global wrote that as a large amount of debt matures, companies now need to refinance at higher interest rates than when they issued the debt, posing ongoing challenges for many firms, especially those with weaker balance sheets.

The report pointed out that for companies with non-investment-grade ratings, financial metrics based on Market Intelligence data indicate that they are grappling with rising debt pressures, and their ability to pay interest with available cash has also become slightly insufficient.

In Q1 of this year, the industrial sector saw the highest number of bankruptcies at 32, followed by non-essential consumer goods companies with 24. These industries together accounted for nearly 30% of the total bankruptcies in Q1.

Meanwhile, the industrial and non-essential consumer goods sectors of the S&P 500 index also fell by 0.53% and 13.97%, respectively, in Q1.

The report showed that among the notable companies filing for bankruptcy in Q1 with liabilities exceeding $1 billion were F21 OpCo LLC, the owner of the Forever 21 clothing chain, EV manufacturer Nikola, and craft retailer Joann.

Other well-known companies entering bankruptcy proceedings included the Hooters restaurant chain and genetic testing company 23andMe.

Of course, although the number of large company bankruptcies in Q1 rose YoY, it remained far below the levels during the financial crisis—peaking at 1,836 in Q1 2009. Since 2020, the highest monthly total of bankruptcy filings was in July 2020, with 74 applications.

However, as the unpopular tariff policies of the Trump administration continue to cause turmoil in financial markets, some industry insiders are now concerned that more companies may face bankruptcy in the face of potential US economic recession risks. Cailian Press previously mentioned that the CDS (credit default swaps) for US high-yield bonds have surged recently, and junk bonds are becoming increasingly precarious.

Boaz Weinstein, founder of Saba Capital Management, recently warned that tariff tensions have accelerated the sell-off of corporate bonds and could trigger a wave of bankruptcies at a faster pace than previous market crises.

"The avalanche has just begun," Weinstein said.