Distressed Debt Soars By 29%, Or $66 Billion, In One Week Amid Surge In Bankruptcies

The cascade of defaulted regional US banks is blowing out the circulating inventory of distressed debt which expanded by about $65.9 billion last week as US insolvency courts saw six new, large bankruptcy filings, according to data compiled by Bloomberg.

The heap of dollar-denominated corporate bonds and loans in the Americas trading at distressed levels rose to $295.4 billion in the week ended Friday, a 28.7% increase from $229.5 billion a week earlier, Bloomberg-compiled data show.

Last week’s bankruptcy filings include the Chapter 11 petitions of sports broadcaster Diamond Sports Group as well as SVB Financial Group, the former parent company of Silicon Valley Bank.

In total, there were 48 large bankruptcy filings – those related to at least $50 million of liabilities – this year through March 20. That’s the highest since 2009, which saw 88 large cases through March 20, per Bloomberg-compiled data.