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Corporate defaults are at their highest level in years, and it’s poised to get even worse. Here are the 5 biggest players who went broke in March.

A man walks in front of a United States Bankruptcy Court sign in New York City.A man walks in front of a United States Bankruptcy Court sign in New York City.

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  • In March, 15 companies rated by Moody’s defaulted on their debt, bringing up the first quarter total to 33.
  • That’s the highest level since the last quarter of 2020, when 47 companies defaulted on their debt.
  • The ratings giant expects junk bond defaults could rise to 4.9% by March 2024.
Corporate default rates are at the highest level in years, according to a bankruptcy report released on April 14 by ratings agency Moody’s.

Widespread tech layoffs, rising interest rates, a war in Europe, and a looming recession all weighed on companies’ performances in the first quarter of 2023.

In the first quarter of the year, 33 companies rated by Moody’s were unable to pay their debts. That’s the highest number since the last quarter of 2020, when 47 companies defaulted on their debt, the agency said in the report.

Here’s the month by month breakdown from Moody’s:

  • January: six companies
  • February: 12 companies
  • March: 15 companies

Each of those companies either filed for Chapter 11 protection, went under receivership, missed payments, or conducted a “distressed exchange” — an event wherein creditors accept haircuts out of fear that troubled debtors will not be able to fulfill their commitments.

That’s not all of the bad news.

The ratings giant expects junk bond defaults could rise to 4.9% by March 2024, thanks to higher interest rates and slower economic growth. That percentage stood at 2.9% at the end of March and the 4.1% as a long-term average.

S&P Global, another ratings agency, said in a February 16 report that default rates for American junk corporates alone could touch 4% by December 2023, up from 1.7% in December 2022 — meaning 73 junk-rated companies could default, per S&P.

In other words, things can get much worse.

And worrying signs are already beginning to show: First Republic Bank collapsed in early May, making it the third regional bank after Silicon Valley Bank and Signature Bank to be taken over by federal regulators following a banking crisis this year.

Read further for a chronological look at five major players that defaulted on their debts in March, the most recent month for which the data has been compiled. This list has been curated to highlight the biggest companies — by impact — that went broke and were unable to honor their debt obligations.

Silicon Valley Bank was closed down by regulators on March 10 after a traditional bank run.Silicon Valley Bank failureSilicon Valley Bank was closed down by regulators on March 10 after a traditional bank run.

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Company name: Silicon Valley Bank 

Headquarters in: Santa Clara, California

Default amount: $3.3 billion

Assets before default: $209 billion as of December 31

After days of turmoil and a traditional bank run, the California Department of Financial Protection and Innovation shut Silicon Valley Bank down on March 10.

As part of the closure, the Federal Deposit Insurance Corporation, or FDIC, took control of SVB. Subsequently, on March 27, North Carolina-based First-Citizens Bank & Trust Company agreed to buy $72 billion of Silicon Valley Bridge Bank assets at a discount of $16.5 billion.

The most striking thing about the collapse of Silicon Valley Bank — which employed 8,528 people at end of 2022 — was the speed at which it happened.

Just days before it became what is now the third-largest bank failure in US history, SVB CEO Greg Becker was at an investor conference answering questions about what he does to relax.

But over the 48 hours preceding the bank’s winding up announcement, shares of the company cratered by 87%, as fears of a bank run escalated after a botched capital call and a rush of depositors withdrawing their funds.

Loyalty Ventures Inc. filed for Chapter 11 protection on March 10.Airline cabinLoyalty Ventures Inc. filed sought Chapter 11 protection on March 10.

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Company name: Loyalty Ventures Inc.

Headquarters: Dallas, Texas

Default amount: $636 million

Assets at time of default: Listed $10 million in bankruptcy filing

March 10 proved to be a catastrophic day for not only SVB but also consumer rewards program operator Loyalty Ventures Inc — which filed for Chapter 11 bankruptcy protection on the same day.

The Moody’s report shows Loyalty Ventures defaulted on loans of just under $640 million in the first quarter of 2023.

Loyalty Ventures had been struggling with multiple problems including a loss of customers, dwindling revenues, and operational challenges that hit the travel sector due to the COVID-19 pandemic, per Bloomberg.

The company’s bankruptcy protection allows it to restructure its debt while continuing to operate, Bloomberg reported. Loyalty Ventures employed 1,400 people per a 2022 proxy report.

As part of the Chapter 11 proceedings, Canada’s Bank of Montreal agreed to acquire the Canadian arm of Loyalty Ventures’ rewards program Air Miles for an undisclosed amount, the company said in a filing. Bloomberg Law pegged the sale transaction value at $160 million.

Loyalty Venture had $1.98 billion in liabilities and total assets of $1.59 billion at the end of the third quarter of 2022, according to the most recent company financials. Total revenue for the quarter was $162 million, down 4% year-on-year.

It listed assets of $10 million in its bankruptcy petition.

The crypto-friendly Signature Bank was shut down by regulators on March 13.A woman leaves a branch of Signature Bank in New York, Monday, March 13, 2023.A woman leaves a branch of Signature Bank in New York, Monday, March 13, 2023.

Seth Wenig/Associated Press

Company name: Signature Bank, New York

Headquarters in: New York, New York

Default amount: $575 million

Assets before default: $110 billion as of December 31

As events rapidly unfolded at Silicon Valley Bank, spooked customers at crypto-friendly Signature Bank withdrew more than $10 billion in deposits.

The panic snowballed into a bank run, which ultimately toppled the New York-based bank and became what is today the fourth-largest bank failure in US history.

Before its failure, Signature Bank — which employed over 2,250 people, per its 2022 annual report — had assets of over $110 billion as of December 31.

The bank spiraled so quickly that even board members were shocked. “We had no indication of problems until we got a deposit run late Friday, which was purely contagion from SVB,” former US Rep. Barney Frank, a board member of the bank, told CNBC in March.

The FDIC — which took over the bank after its collapse — agreed to sell all of Signature Bank’s deposits and loans to Flagstar Bank, a subsidiary of New York Community Bancorp.

Diamond Sports Group, the largest broadcaster of local sports in the US, filed for Chapter 11 bankruptcy on March 14 after missing interest payments.In this photo illustration, Diamond Sports Group LLC logo is seen on a smartphone screenIn this photo illustration, Diamond Sports Group LLC logo is seen on a smartphone screen. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)

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Company name: Diamond Sports Group

Headquarters of Sinclair Broadcast Group: Hunt Valley, Maryland

Default amount: $8.7 billion

Assets before default: Parent Sinclaire Group listed assets of $6.7 billion at the end of 2022

Diamond Sports Group, the largest owner of regional sports networks in the US, defaulted on over $8.7 billion of bonds and loans — the largest default by amount in March, according to the Moody’s report.

The regional sports broadcasting company is an unconsolidated and independently run subsidiary of Sinclair Broadcast Group Inc. On March 14, it filed for Chapter 11 protection in the US Bankruptcy Court for the Southern District of Texas and is currently trying to negotiate a restructuring agreement with its lenders.

The mountain of debt results from Sinclair’s 2019 acquisition of a portfolio of networks from Disney for $10.6 billion.

Diamond Sports listed assets and liabilities between $1 billion and $10 billion for its sports brands in the Chapter 11 petition, per Reuters.

Diamond Sports’ lower-than-expected revenue cannot, under its existing debt load, “support the payments the company must make to professional sports teams and leagues for broadcast rights,” Moody’s said in the report.

The company owns the right to 42 teams across the Major League Baseball, the National Hockey League, and the National Basketball Association via its Bally brand, per ESPN

Travelport conducted a distressed exchange on March 30, which constitutes a default event, per Moody’s.People wait in line to check in for a flight at Heathrow Airport, Londontravel commerce platform Travelport conducted a distressed exchange on March 30.

Shutterstock/1000 Words

Company name: Travelport (Toro Private Holdings II Limited)

Headquarters in: Langley, United Kingdom

Default amount: Around $2 billion

Founded in 2001, UK-based travel commerce platform Travelport is majority owned by private equity investors Siris Capital and Elliott Private Equity. According to a 2022 gender pay gap report, the company employed nearly 3,000 people.

Travelport — which lists its debt under Toro Private Holdings II Limited — became the second-largest non-financial corporate defaulter in March, after it conducted a distressed exchange of $2 billion in debt obligations.

In an April 4 report, Moody’s said it tagged the company for default after two events: The two private equity owners pumped in $200 million into Travelport as equity, and Travelport conducted a debt exchange on outstanding loans of over $2 billion on March 30.

Travelport, which is privately held and does not disclose its financials publicly, reported net revenues of $1.3 billion in 2022, per Moody’s.

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