Yahoo Finance reporters looked at ratings data from Moody's Investors Services to project companies in serious danger of going under this year. Moody's has predicted that the default rate on corporate bonds will triple this year against 2008 (and be 15 times higher than 2007), and if that is true, we are sure to see many many bankruptcies. The Yahoo list is full of familiar names, with several in fields that have been hardest hit by the slowdown in consumer spending (Chrysler, Six Flags, clothing retailer Loehmann's).
But there are other common threads. Most of these firms have limited cash for a rainy day, and a lot of debt, with large interest payments due over the next year. In ordinary times, it might not be so hard to refinance loans, or get new ones, to help keep the cash flowing. But in an acute credit crunch it's a different story, and at companies where sales are down and going lower, skittish lenders may refuse to grant any more credit. It's a terrible time to be cash-poor.
Check out the full list here.
Posted
02-10-2009 7:41 AM
by
Graham Griffith