US corporate bankruptcy filings gained more momentum in February, underpinned by a flurry of filings in the healthcare sector.
S&P Global Market Intelligence recorded 50 new bankruptcy filings in February, up from a revised 35 in January. The increase came amid cooling expectations for lower interest rates as inflation remains above the Federal Reserve's 2% target, challenging the ability of US companies to service their debts.
Year-to-date corporate bankruptcies totaled 85, down from the previous year's number of filings by the end of February but above comparable 2021 and 2022 totals.
Notable filings
Medical genetics company Invitae Corp., which had been listed on the New York Stock Exchange until a week before its announcement, filed for bankruptcy Feb. 13. In a statement, the company said it had worked to better its cash position over the past 18 months but still needed to pursue a sale to lower its debt.
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Hornblower Holdings LLC — which operates cruises, land-based excursions and ferry services across 114 countries and 125 US cities — sought bankruptcy protection Feb. 21 with plans to reduce its debt by $720 million. Among several announced strategic changes, including Strategic Value Partners LLC becoming a majority owner, the company will target a sale of its overnight cruising business, which it said had "not rebounded from the pandemic."
Four companies with more than $1 billion in liabilities — consumer discretionary companies Byjus Alpha Inc. and Hornblower Holdings, and healthcare companies Cano Health Inc. and Invitae — filed for bankruptcy in February. The number of filings was on par with May 2023, which registered the most such filings last year.
Sector, state breakdown
Healthcare shot to the top of the list of sectors with the most bankruptcies with 12 in February, followed by seven filings in the consumer discretionary sector and six among industrials companies. By sector, consumer discretionary and healthcare stocks were the two most-shorted by mid-February.
Geographically, California and Texas combined accounted for nearly half of the month's filings at 13 and nine, respectively. Five of the month's 12 healthcare company bankruptcies originated in California.
New York and Florida each recorded three filings over the month, while all remaining states saw fewer than two.
This Data Dispatch is updated regularly. The last edition was published Feb. 7.
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.
