Bankruptcy rates are expected to keep rising in 2025.
James Gellert, executive chairman of RapidRatings, appears on Asking for a Trend where he predicts a global increase in bankruptcies and restructurings.
“I think we’ll continue to see them increase globally, and we’ll also continue to see restructurings increase,” he says.
He notes that last year saw a 2-to-1 ratio of restructurings to bankruptcies, a sharp increase from the typical 1-to-1 rate. “The fact that more companies are proactively engaging with those who have lent them money is a pretty interesting sign,” Gellert adds.
He attributes this to over a decade of easy borrowing, which masked operational problems. The financial health of private and middle-market companies has worsened, especially with rising costs of capital, labor, and goods. This creates significant stress that could affect supply chains.
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This post was written by Josh Lynch
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