What We’re Reading This Week

As Texas recovers from its winter energy crisis, hard hit consumers and retail power providers may be facing potential bankruptcies caused by the extreme price fluctuations experienced during the cold. The New York Times describes the plight faced by consumers who may face energy bills in the thousands. And retail power companies that supplied power

The Wall Street Journal reports that high demand for corporate debt has allowed even the riskiest of companies to refinance their debt at interest rates that have typically been reserved for only the safest types of debt. Since the beginning of the year through February 10, over $13 billion of new debt has been issued,

Bloomberg reports that at least seven new-issue CLOs are currently marketing, with January new-issue volume at nearly $9 billion.  The rise in sales comes as risk premiums for new transactions have tightened to pre-pandemic levels, prompting managers to market new deals at favorable terms and refinance and reset existing bonds at cheaper costs.  [Bloomberg; Feb.

The Wall Street Journal analyzes the challenges and prospects of Gamestop Corp., AMC Entertainment Holdings Inc., Bed Bath & Beyond Inc., Nokia Corp., and Blackberry Ltd. In recent weeks, investors have bid up the share prices of these companies, as hedge funds and short sellers have bet against them. [WSJ; Jan. 31, 2021]

The New

CNBC reports that slow rollout of the vaccines and more contagious strains of Covid-19 may threaten investor outlook that have been buoyed by optimism about a swift economic recovery.  A possible K-shaped recovery may see companies of certain type and size start to recover while leaving out low-income families, and companies in the airline, restaurant,

The New York Times reports that the National Rifle Association (“NRA”) filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court in Dallas with plans to reincorporate in Texas. The New York attorney general’s office has been conducting an investigation into corruption at the NRA and has been seeking to dissolve the group.

Bloomberg confirms that 2020 was the biggest year for large commercial bankruptcies since the Great Recession in 2009.  Led by the energy, retail, and consumer services sectors, 224 companies with liabilities exceeding $50 million filed Chapter 7 and 11 cases, far exceeding the number of large filings each year in the preceding decade. Bloomberg also

As reported in Yahoo Finance, the first trading day of 2021 was off to a rocky start in the U.S.  Despite progress on COVID vaccine distribution, markets reacted to the discovery of a highly transmissible strain of COVID in the US, which comes with a greater risk of lockdowns, along with uncertainty surrounding the

Reporting from S&P Global shows that from January 1, 2020 through December 13, 2020, there were 610 commercial bankruptcy filings by public and private entities with at least $2 million in reported assets or liabilities at the time of the bankruptcy filing. Entities in the consumer discretionary, industrial, energy, and healthcare industries made up over

The Wall Street Journal reports on the growth of dividend recapitalization transactions during the COVID-19 pandemic by private equity controlled companies. That growth stands in contrast to prior economic downturns. [WSJ; Dec 17, 2020]

Reporting from Yahoo Finance addresses the growing control that investment firms and hedge funds exert over commercial restructuring efforts as a