Following yesterday’s bankruptcy of Peabody Energy and today’s Chapter 11 filing of XXI Energy, defaults among American junk bonds just topped $14 billion in April, the highest monthly volume in two years according to Fitch calculations, and that is only for the first two weeks.
April’s surge in bankruptcy filings is not unexpected: according to JPM’s default tracker, the number of bankruptcies was on a tear in both the month of March and the first quarter.
In the past month alone seven companies defaulted totaling $16.4bn, including $12.3bn in high-yield bonds and $4.1bn in leveraged loans. This marked the third highest monthly volume since the last default cycle, trailing only April 2014’s $39.5bn (TXU) and December 2014’s $18.3bn (CZR). With two weeks left in the month, April may well surpass March.
This post was published at Zero Hedge on 04/14/2016.