US corporate bankruptcies tick up in October; annual filings near 15-year high

The number of large US corporate bankruptcies increased slightly in October from the prior month after filings slowed in September.

Large monthly bankruptcy filings ticked up to 68 in October from a revised total of 66 in September , according to S&P Global Market Intelligence data. The data includes companies with public debt that have assets or liabilities of at least $2 million and private companies with assets or liabilities of at least $10 million at the time of filing.

Filings for September were revised up from an original tally of 59. September's filings declined from 76 in August, which was the highest monthly total since at least 2020. Bankruptcy filings totaled 655 through the end of October and are on pace to reach a 15-year high this year, as they already near the full-year total of 687 recorded in 2024.

Evolving credit risk

High-profile bankruptcy filings from First Brands Group LLC and Tricolor Holdings LLC in September pressured banks with exposure to the companies and initially clouded bank performance outlook, as analysts worried whether underlying risks and fraud were beginning to bubble in credit markets. In discussing the bankruptcies during an Oct. 14 earnings call, JPMorgan Chase & Co.. Chairman & CEO James Dimon warned that "when you see one cockroach, there are probably more, and so everyone should be forewarned."

However, concerns subsided throughout October as analysts determined that the impact from these bankruptcies may ultimately be limited.

"I view those few incidents as idiosyncratic but expect more of these 'isolated incidents' to occur, potentially in other sectors like software, which has increased leverage in that market while capital flows to AI capex," Clayton Triick, head of portfolio management of public strategies at Angel Oak Capital Advisors, told Market Intelligence.

– Download the charts in Excel format. – Check out the monthly Retail Market series for retail-specific bankruptcy data.

Spreads in the high-yield credit default swap market spiked in October. They eased by the end of the month but have not retraced to recent lows. The spread for the CDX North American High Yield index closed at 328.61 basis points at the end of October, declining from a recent peak of 343.44 bps in mid-October but remaining elevated above a recent low of 302.55 bps in September.

The CDX North American High Yield index references credit default swap pricing for a basket of debt issued by speculative-grade companies with credit ratings below BBB-. Credit default swaps are traded as insurance on bonds against the event of a default by the bond's issuer. Spreads for these contracts represent a pricing risk premium measuring the difference in their yields in relation to the yields on their underlying bonds, with narrower spreads signaling low risk and high demand.

Notable filings

Office Properties Income Trust was the only company in October to enter the bankruptcy process with more than $1 billion in liabilities at the time of filing.

The real estate investment trust entered into a restructuring support agreement with an ad hoc group of certain holders of its senior secured notes due September 2029 to facilitate the restructure of its debt and balance sheet.

Office Properties Income Trust's stock had one of the largest increases in short interest among REITs in August and had the largest increase in short interest specifically among office REITs, according to Market Intelligence data.

Sector breakdown

Bankruptcies were concentrated in the industrial and consumer discretionary sectors in October and through the first ten months of the year, among companies with sector designations.

There were at least five bankruptcies in October among large companies in the industrial sector, bringing the total for the year to 98. This was followed by the consumer discretionary sector with four filings in October and 80 filings year-to-date.

Of the 655 companies that filed for bankruptcy for the year through October, 345 had a primary sector designated by Market Intelligence data. There were 223 combined filings from companies in the industrials, consumer discretionary and healthcare sectors.

This Data Dispatch is updated regularly. The previous edition was published Oct. 9.

Bankruptcy figures include public companies or private companies with public debt with a minimum of $2 million in assets or liabilities at the time of filing, in addition to private companies with at least $10 million in assets or liabilities. S&P Global Market Intelligence may remove companies from this list if it discovers that their total assets and liabilities do not meet the threshold requirement for inclusion.

This report may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this report were not prepared by S&P Global Ratings