US corporate bankruptcies set to hit 15-year high amid credit jitters, S&P data shows

(Reuters) -Large U.S. corporate bankruptcies are on pace to hit their highest level in 15 years, S&P Global data showed on Thursday, underscoring mounting stress across corporate America at a sensitive time for public market investors. Total bankruptcy filings reached 655 this year through October, compared with 687 for all of 2024. October alone accounted for 68 filings, following 76 in August — the highest monthly count since at least 2020. While the full impact of U.S. President Donald Trump's shifting tariff policies remains uncertain, businesses are already feeling the strain from rising input costs. That is further squeezing lower-income consumers who continue to grapple with sticky inflation and a faltering labor market. The industrials sector leads insolvency claims this year with 98 filings, reflecting its exposure to potential supply-chain disruptions from the tariffs. That was followed by consumer discretionary companies with 80 bankruptcies so far this year. A wave of recent credit concerns has put the multi-trillion-dollar global credit market under the spotlight, with risks extending to several high-profile financial institutions, including major Wall Street banks and regional lenders. Auto parts maker First Brands filed for bankruptcy protection in September after disclosing liabilities exceeding $10 billion, marking the collapse of a company whose rapidly deteriorating finances had shocked debt investors. Subprime lender and dealership Tricolor also filed for Chapter 7 bankruptcy in September, causing Wall Street heavyweight JPMorgan Chase to charge off $170 million — a move CEO Jamie Dimon described as "not our finest moment". The S&P report also showed that bankruptcy filings across the U.S. have risen every year since 2022, when decades-high inflation forced the Federal Reserve to raise interest rates. (Reporting by Ateev Bhandari in Bengaluru; Editing by Shilpi Majumdar)

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