63 U.S. Corporate Bankruptcies In June Set Up 2025 For Highest Pace Since 2010

US corporate bankruptcy filings remained elevated in June with 63 new cases, contributing to a total of 371 for the first half of 2025, the highest H1 count since 2010. This surge reflects worsening corporate liquidity, elevated debt levels, the Federal Reserve's sustained high interest rates, and strained consumer spending. Five companies with over $1 billion in liabilities filed in June, including Wolfspeed and Sunnova, with Industrial and Consumer Discretionary sectors dominating the filings, underscoring persistent economic headwinds.

Analysis

The pace of US corporate bankruptcies in the first half of 2025 has reached its highest level since 2010, with 371 filings recorded by S&P Global Market Intelligence. This signals a significant deterioration in corporate health, driven by a confluence of macroeconomic pressures including worsening liquidity, elevated debt levels, and the Federal Reserve's commitment to maintaining high benchmark interest rates. The strain is further compounded by weakening consumer spending amid a cooling job market and persistent inflation. The distress is particularly concentrated in the Consumer Discretionary and Industrial sectors, which together accounted for 107 filings year-to-date. Notable filings in June, such as Wolfspeed (WOLF) and Sunnova (NOVAQ), illustrate distinct paths within distress. Wolfspeed's filing is part of a pre-negotiated restructuring to reduce its debt by $4.6 billion, suggesting a strategic deleveraging event with a clear path to emergence. In contrast, Sunnova's bankruptcy, driven by rising interest rates and adverse legislative changes for the solar industry, involves asset sales and points to more fundamental business model challenges.

Key Decisions for Investors

• Investors should heighten scrutiny on leveraged companies within the Consumer Discretionary and Industrial sectors, as these areas show concentrated and persistent signs of distress.
• The contrast between Wolfspeed's strategic restructuring and Sunnova's distress highlights the importance of differentiating between pre-packaged bankruptcies, which can be value-unlocking events, and those forced by fundamental business model failures.
• The filings of Sunnova and Mosaic signal significant headwinds for the residential solar industry due to high interest rates and the removal of tax credits, warranting a cautious stance on the sector.
• Given the broad-based increase in bankruptcies, which is a leading indicator of economic stress, it may be prudent to increase portfolio allocation towards companies with strong balance sheets and low debt-to-equity ratios.