In the last week - Commercial Real Estate Stress
- New York Community Bank (USA) - Aozora Bank (Japan) - and now: *Deutsche Pfandbriefbank, under pressure in Europe, more real estate cracks, banking concern, etc" Source: Bloomberg, Lawrence McDonald
Evergrande, which has now been ordered to liquidate, has an astonishing $300 billion in liabilities.
That places it near the very top of the all-time list of corporate bankruptcies. A lot of Evergrande's liabilities are down payments that Chinese homebuyers made on apartments that remain unbuilt. But even just looking at the bonds and loans outstanding, the amount is greater than $80 billion. Source: TME, Axios
The bull market in bankruptcies...
Source: TME, TS Lombard
Bankruptcy filings have recently reached levels on par with the 2008 Great Recession and the 2020 COVID-19 pandemic
This indicator often suggests that the economy isn't performing well, and has historically always been followed by massive stock market crashes. Source: whalewire
Birmingham City Council 2030 bonds yield roughly 2ppts more than UK govt securities as Britain’s second-biggest city in financial dire straits
Source: HolgerZ, Axios Visuals
The UK's second-largest city is bankrupt
Unable to balance its budget as required by law, Birmingham placed itself under the protection of "section 114" on Tuesday. This means that only essential expenditure is covered. The news had all the more resonance because the city council has a million people under its umbrella - the largest local authority in the country, since London is divided into boroughs. And because this failure has raised fears of a domino effect on other struggling English cities.
China’s heavily indebted property developer Evergrande group on Thursday filed for Chapter 15 bankruptcy protection in a U.S. court
In a filing to the Manhattan bankruptcy court, the firm sought recognition of restructuring talks under way in Hong Kong, the Cayman Islands and the British Virgin Islands. The world’s most indebted property developer defaulted in 2021 and announced an offshore debt restructuring program in March. Trading of Evergrande shares have been suspended since March 2022. The Chapter 15 bankruptcy protection allows a U.S. bankruptcy court to intervene in cross-border insolvency case involving foreign companies that are undergoing restructuring from creditors. It aims to protect the debtors’ assets and facilitate the rescue of businesses that are in financial trouble. Tianji Holdings, an affiliate of Evergrande, and its subsidiary Scenery Journey, also filed for Chapter 15 protection in a Manhattan bankruptcy court, according to the filing. Source: CNBC, FluentInFinance
The US saw a total of 340 bankruptcies in the first 6 months of 2023.
This is more than the first half of 2020 when the US went into a full lockdown. It’s the highest number of first half bankruptcies since 2010. Businesses are feeling the pain of higher interest rates. Source: The Kobeissi Letter
