Covid-19 and the credit cycle: 2020 revisited and 2021 outlook

Edward I Altman

Abstract

This study continues the author’s examination and forecasts as to the impact of Covid-19 on the US credit cycle after one and a half years since the pandemic first began. We explore the enormous build-up of global debt even before the pandemic commenced and the subsequent record debt expansion through mid-2021. New debt peaks, especially for nonfinancial corporate debt, are analyzed as to their potential impact on future default rates and the implications for the US credit markets once again starting a new benign cycle in a continuing low interest rate environment. We ask whether the spectacular success of the US central bank and its monetary policy and secondary-market purchases has also promoted potentially destructive unforeseen consequences for debt rated BBB and below. Large- and small-firm defaults and bankruptcies in both 2020 and 2021 are compared, and our expectations about those firms’ solvency status once the government and central bank supports diminish and are eliminated are examined. Finally, we introduce the concept of global zombie firms and suggest that this growing phenomenon be analyzed more robustly and critically with new criteria and empirical analysis.

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Introduction

1 Introduction

The toxic impact on society of the global health and economic crisis caused by Covid-19 has continued well into 2021. In order to understand the virus’s impact on the credit cycle, it is important to first understand where credit markets were prior to this crisis. We will then be able to evaluate immediate and subsequent events, paving the way for an outlook for 2021 and beyond.

As of December 2019, most developed economies, and certainly the United States, were clearly in a benign credit cycle. Determining whether the corporate credit cycle is benign, or stressed or in a crisis, requires the analysis of five financial factors. Based on our prior research (see Altman 2020), a benign credit cycle exists if all or most of the following hold:

1. (1)

   corporate defaults in risky debt markets (such as the high-yield (HY) bond market) are above the historic average of 3.3%;

2. (2)

   recoveries to investors who own these defaulted securities are above 45%;

3. (3)

   the yield spread that investors require on HY bonds or leveraged loans is below the historic average rate of 5.2%;

4. (4)

   the “distress ratio” (Altman 1990), which measures the percentage of HY bonds selling for more than 10% above the duration-equivalent Treasury bond rate, is below 10%; and

5. (5)

   liquidity in the risky debt market is abundant, particularly the new issuance of B$-$ and CCC rated bonds and loans.

For almost the entire period following the global financial crisis (GFC), from mid-2009 through December 2019, these factors indicated favorable market conditions. The outlook in early 2020 projected a continuation of this unprecedentedly long “risk-on” environment.

Yet at the end of 2019 the global credit markets were extremely vulnerable to a much more stressed cycle period – all that was lacking was a catalyst. Indeed, the amount of nonfinancial corporate debt (NFCD) as a percentage of gross domestic product (GDP), both in the United States and on a global basis, was at a record high level and had been growing dramatically over the past 20 years. Global government debt had also seen similar growth but most policy makers were unconcerned because of low interest rates and default rates. It could be argued, then, that a good deal of the world’s GDP growth in the past 10 years was due to this low interest rate climate and had little to do with productivity gains. Figure 1¹¹ 1 Note the USD29 trillion increase from 2019 to 2020. Sources: chart from The Independent; data for 1997 and 2007 from the Institute of International Finance (IIF), the Bank for International Settlements, the International Monetary Fund and Haver; data for 2017–20 from the IIF’s ’Global debt monitor’ (February 17, 2021). shows, through 2020, total global debt broken down by its four primary factors. In 2020, total global debt increased by a record one-year growth of nearly USD30 trillion, totaling almost USD300 trillion and almost 400% of global GDP. The latter percentage is almost four times larger than in 1997.

Figure 1: Global sectoral indebtedness before and during Covid-19 (in US dollars and as a percentage of GDP).

		Total amount
Year	% of GDP	(USD tn)
1997	215	060
2007	278	162
2017	317	233
2018	319	243
2019	322	253
2020	336	282

Importantly, each time the NFCD/GDP ratio rose to peak levels, a surge in corporate defaults followed within 12 months. For the last three spikes, default rates exceeded 10% per year for one or usually two years (see Figure 2). These default rate spikes always coincided with economic recessions, although default rate increases to above historic average levels often preceded the onset of the recession. So, the formula for the last three credit market crises were debt explosions and a recession leading to the end of benign credit cycles – both conditions were necessary. Those three crises’ catalysts were the leveraged buyout (LBO) mania causing unrealistic asset values in 1990–1; the bursting of the tech bubble and the events of 9/11 (both in the early 2000s); and the mortgage debt and banking industry GFC that began in 2007.

Figure 2: US NFCD/GDP (comparison with four-quarter moving average default rate). Sources: Federal Reserve Economic Data (FRED) (Federal Reserve Bank of St. Louis) and Kroll Bond Rating Agency/Altman HY default rate data.

2 The Covid-19 pandemic’s impact on the credit cycle

Once Covid-19 hit the United States in March 2020, the health and economic climate changed dramatically, moving within a few short weeks from a benign credit cycle to a highly stressed environment. Corporate large-firm defaults escalated, equity prices dropped by over 30% and debt prices at all credit levels went into free fall. Credit spreads spiked from approximately 400 basis points to almost 1100 basis points for HY bonds, with investment-grade (IG) bonds following suit, particularly for those downgraded to junk status. The distress ratio climbed from below 10% to 35% and liquidity dried up almost overnight. Uncharacteristically, the National Bureau of Economic Research (NBER) stated almost immediately that the United States economy was in a recession that had started in February – normally such statements require two consecutive quarters of negative GDP and other indicators.

HY bond default rate forecasts from some market professionals surged from an expected 2020 rate that was below the historic average of 3.3% to double digits (Altman 2020). At the same time, our forecast also increased to 7–8%, based on a three-factor model and our expectation for “fallen-angel” downgrades (Altman 2020). Recovery rates on defaulted bonds plummeted from about an average (45%) level to near 30%, with similar drops in recoveries on defaulted leveraged loans. As noted, yield spreads and the distress ratio spiked. B$-$ and CCC rated companies could no longer access the new issue market, and the entire junk bond market froze.

The Board of Governors of the Federal Reserve Bank (the Fed) reacted with unprecedented speed by lowering interest rates almost immediately, and for the first time promised to purchase newly issued IG bonds and fallen-angel debt in the secondary markets, as well as announcing the more usual quantitative easing (buying government bonds and mortgage debt). As the economy went into a lockdown, the Fed, backed by Congress and the US Treasury, also guaranteed low interest rate loans to small and medium-sized enterprises through a special lending program. This was followed quickly by a Congressional fiscal stimulus package of about USD2 trillion, more than twice what Congress had passed during the GFC. The initial and subsequent Fed support spawned a rapid rebound in the financial markets, which continued even after the US Treasury’s backstopping of Fed actions ended at the end of 2020.

Despite the continuing price volatility and real-economy/unemployment malaise, the new issuance of corporate financial market debt exploded almost immediately (Hotchkiss et al 2020). Unlike the prior 50 years in US credit markets, these large increases in debt occurred during a recession, during the worst pandemic in a century and during an economic crisis. The record level of debt issuance in this period contrasts sharply with the deleveraging typically needed in an economic/credit crisis.

3 The BBB phenomenon

BBB rated debt has grown far more than any other rating class in the last 15 years, totaling about USD4.0 trillion as of the end of 2020, up from USD0.5 trillion in 2005 (S&P Global Ratings 2020). Companies’ preference for this type of financing is likely due to low interest rates, even for the lowest of the IG class, as investors continue to search for yield (Becker and Ivashina 2015; Hotchkiss et al 2021). Few of these BBB bonds were downgraded to junk status, especially before the pandemic, even as leverage levels increased dramatically.

At year end 2019, rating agencies forecast that the next downturn would see fallen angels making up a maximum of 10% of total downgrades over a two- to three-year downturn. In contrast, using $Z$-score credit risk models (both $Z$ and $Z^{\prime \prime }$; see definitions in Altman et al (2019)) and their bond rating equivalents (BREs) showed that as many as 35% of BBB issuers did not “deserve” the lofty IG status, and were closer to BB or B rated companies. This implied that potentially 20% (USD550–600 billion) of BBB bonds could be downgraded if the markets entered a highly stressed mode, increasing the HY bond market by about one-third, to over USD2 trillion. Potentially, this could have led to a “crowding-out” effect on the riskier CCC market, increasing the rate of default by an additional 1%. Hence, Altman’s forecast for the 2020 default rate increased to between 7% and 8%. In fact, by the end of 2020, the annual fallen-angel downgrades reached approximately USD350 billion, with many household corporate names such as Ford, Macy’s, Delta Airlines, Occidental Petroleum, Carnival Cruise Lines, Pemex, Rolls Royce and Marks & Spencer becoming “junk” (see Table 1). Note that every one of the downgrades had received a $Z$-score BRE of below BBB and most had received a Z${}^{\prime \prime }$-score BRE below IG. Thus, a USD600 billion downgrade forecast amount by the end of 2021 has appeared within reach.

Table 1: Fallen-angel $Z$- and $Z^{\prime \prime }$-scores and their BRE (May 2020). [Sources: E. Altman (NYU Salomon Center), Capital IQ (Standard & Poor’s).]

General information				Financial information
			Face			$?$-		${?}^{\mathbf{\prime \prime }}$-
			downgrade		$?$-	score	${?}^{\mathbf{\prime \prime }}$-	score
Issuer name	Ticker	Industry	(USD m)	Date of data	score	BRE	score	BRE
Ford Motor	F	Autos	34 572	Dec 12, 2019	0.91	CC$+$	4.13	B
Occidental Petroleum	OXY	Energy	29 059	Dec 31, 2019	0.80	CC	4.71	B$+$
Western Midstream	WES	Energy	07 820	Dec 31, 2019	0.77	CC	3.95	B
Partners
Continental Resources	CLR	Energy	05 300	Dec 31, 2019	1.54	B$-$	5.73	BBB
Cenovus Energy	CVECN	Energy	04 781	Dec 31, 2019	1.39	CCC$+$	5.18	BB$-$
Delta Air Lines	DAL	Transportation	04 100	Dec 31, 2019	1.30	CCC$+$	3.04	CCC$+$
Macy’s	M	Retail	02 456	Nov 2, 2019	2.05	B$+$	5.63	BB$+$
ZF NA Capital	ZFFNGR	Autos	01 699	Dec 31, 2019	—	—	5.15	BB$-$
Methanex	MXCN	Chemicals	01 550	Dec 31, 2019	1.28	CCC$+$	5.30	BB
Adani Abbot Point Terminal	ADAABB	Transportation	00 500	Mar 31, 2019	—	—	3.87	B$-$
Marks & Spencer	MARSPE	Retail	00 300	Aug 28, 2019	2.36	BB	5.76	BBB
Pemex	PEMEX	Energy	58 621	Dec 31, 2019	—	—	$-$2.93	D
Rockies Express Pipeline	ROCKIE	Energy	02 050	Dec 31, 2019	—	—	5.37	BB$+$
Royal Caribbean Cruises	RCL	Leisure	01 450	Dec 31, 2019	1.81	B$+$	4.25	B
Trinidad Generation	TRNGEN	Utility	00 600	Dec 31, 2019	—	—	5.68	BBB$-$
Growthpoint Properties	GRTSJ	Real estate	00 425	Dec 31, 2019	0.81	CCC	5.02	BB
Hillenbrand	HI	Capital goods	00 375	Dec 31, 2019	1.37	B$-$	4.94	BB
Rolls Royce	RR	Capital goods	06 117	Dec 31, 2019	0.46	CCC$-$	2.67	CCC
Service Properties Trust	SVC	Real estate	05 680	Dec 31, 2019	0.78	CCC	3.99	B

A related question is whether the market was experiencing rating inflation, given the $Z$ and $Z^{\prime \prime }$ scores of many BBBs in 2019. However, similar calculations show that the 35% undeserved proportion has been fairly constant over the last two decades. This phenomenon is therefore more consistent with rating overvaluation when it comes to rating bond issuers as IG or HY.

Similar to the stock and bond market rebounds, the rise in the number and amount of BBB downgrades also halted in the second half of 2020, reflecting an improved economic outlook as lockdowns were lifted, the vaccine outlook improved and Fed actions were absorbed by market participants. Rather than a second wave of IG downgrades by the end of 2020, there have been unprecedented levels of new HY and IG debt. In 2020, there was USD435 billion of new issuance of HY bonds, surpassing the historic record for new issuance by almost USD100 billion, and a near-record USD2 trillion for IG bonds. Despite the pandemic, growth in leveraged loan issuance has also been strong in the second half of 2020. As a result, US nonfinancial debt as a percentage of GDP spiked to almost 57% as of mid-2020, ending the year at 52% (Figure 2). The previous level of this important statistic, even in a low interest rate environment, was 47% at the end of 2019. Although a wave of downgrades of the IG BBB firms has not reemerged in 2021, in the 2020/21 financial year the total of global downgrades is not likely to pass USD350–400 billion, less than initially forecast for the United States alone.

4 Defaults and bankruptcies in 2020 and outlook in 2021

While US large-firm defaults in 2020 did not reach the levels forecasted in the spring of 2020, default rates on HY bonds and leveraged loans did spike to 6.7% and 5.7%, respectively. These statistics are based on a compilation of a dozen forecasting institutions (see Table 2). The 2020 default rate was almost triple the rate in 2019 and double the historic average annual rate, but short of the double-digit rates seen in prior credit crises.

The same 12 forecasters have estimated HY bond and leveraged loan default rates for 2021, first as of January 1, 2021 and then six months later, as of June 30. The consensus estimate as of June 30 was 3.5% for HY bonds and 3.1% for leveraged loans, down from 5.2% and 5.1% as of the start of 2021. The revisions are consistent with an economy that is growing robustly and with market liquidity continuing to support most companies, regardless of their risk. As such, defaults could fall far below historic averages for the entire year of 2021. We estimate for 2021 a 1.5% default rate (as of mid-2021, and based on three methodologies: mortality rates, yield spreads and distress ratios, with the latter two based on regression analysis); some other forecasters, eg, Fitch and Moody’s, similarly forecast the default rate for 2021 at 1.0% and 1.8%, respectively.

Table 2: Forecasted 2021 HY bond and leveraged loan default rate (as of June 30, 2021). [${}^{†}$Rate as of September 2021. ${}^{*}$Forecast as of April 30, 2021. Sources: data compiled by the author from various forecasting services, including the major rating agencies, Fitch (E. Rosenthal), Moody’s (Sharon Ou), Kroll Bond Rating Agency (KBRA) (V. Hesser and H. Mamaysky) and Standard & Poor’s (S&P) (N. Kramer) and several investment banks including Bank of America (O. Melentyev), Deutsche Bank (J. Reid), Goldman Sachs (V. Balasubramanian) and Morgan Stanley (V. Tirupattur), among others.]

		2021 forecasted
	2020	default rate
	Default rate	Base rate	Base rate
	(USD/issuer)	(January 1)	(June 30)
E. Altman (NYU Salomon Center)	6.2 (USD)	4.60	1.50 (0.8%)${}^{†}$
Fitch	5.2 (USD)	3.50	1.00
Leveraged loans	4.5 (USD)	4.50	1.50
KBRA	5.0 (USD)	6.20	3.90
Moody’s	8.4 (iss.)	6.00	1.80
Leveraged loans	7.1 (iss.)	—	2.90
S&P	6.3 (iss.)	9.0${}^{†}$	4.00
Leveraged loans (S&P/LSTA)	4.5 (iss.)	6.5${}^{†}$	3.50
Bloomberg/Barclays	3.6 (iss.)	5.50	2.0${}^{*}$
Leveraged loans	—	—	1.5${}^{*}$
Bank of America	9.5 (iss.)	4.30	3.0${}^{*}$
Credit Suisse	7.0 (iss.)	4.00	2.5${}^{*}$
Leveraged loans	—	—	2.0${}^{*}$
Deutsche Bank	7.0 (iss.)	5.20	4.0${}^{*}$
Goldman Sachs	8.0 (iss.)	4.00	3.7${}^{*}$
JP Morgan	6.2 (USD)	3.50	3.5${}^{*}$
Leveraged loans	4.0 (USD)	3.50	3.5${}^{*}$
Morgan Stanley	7.9 (iss.)	6.00	4.5${}^{*}$
Leveraged loans	7.0 (iss.)	6.00	4.5${}^{*}$
Consensus average
HY bonds	6.7	5.2	2.9
Leveraged loans	5.7	5.1	2.8

Despite default rates not reaching record levels in 2020, large-firm bankruptcies did. A total of 180 firms with liabilities greater than USD100 million and 60 firms with liabilities greater than USD1 billion filed for Chapter 11 bankruptcy protection, far exceeding the previous records in 2009 (see Table 3). Surprisingly, bankruptcies for small and medium-sized firms were considerably lower than in 2019, as government stimuli, loan forbearance and loan forgiveness supported debtors (see Wang et al (2020), and the discussion of “zombie firms” below). The number of fallen angels, which increased dramatically after the first few months of the pandemic, dropped considerably in the second half of 2020.

Table 3: 2020 US large-firm bankruptcy filings. [Sources: E. Altman (NYU Salomon Center) and KBRA, using data from New Generation Research, Boston.]

	Threshold
	USD100 m	USD1 bn
Number of Chapter 11s $>$ threshold	180	060
Chapter 11 ranking (1989–2020)	1st	1st
Next highest year (2009)	153	049
Historic yearly average (1989–2019)	078	017
Historic yearly median (1989–2019)	066	020

While nearly all forecasters of 2021 default and bankruptcy rates expect they will decrease from 2020 levels, and macroeconomic forecasts suggest continued economic expansion in the second half of the year, it is less clear whether defaults will return to normal levels, especially for individuals and small and medium-sized firms. The US government’s support of the economy, via a large, USD1.9 trillion stimulus package in early 2021, was designed to continue support for individuals and small and medium-sized firms, but further stimuli (other than to finance infrastructure) is unlikely. Thus, bankruptcies may see a new wave going into 2022, especially for smaller enterprises, as companies’ zombie status becomes clearer.

For the first six months of 2021, 46 firms with liabilities greater than USD100 million filed for Chapter 11 bankruptcy. Much of this activity reflects continued stress for larger firms in certain industries, including energy, retail and commercial real estate. Extrapolating for the entire year, the resulting total would be about half that of 2020. Similar decreases occurred for mega-bankruptcies of more than USD1 billion in liabilities, with 12 for the first half of the year (extrapolating to 24, this is slightly above the historic annual average of 20). Surprisingly, extremely few bankruptcies were filed in the first half of 2021 for firms with less than USD50 million in liabilities. This unusual dichotomy between large and small bankruptcies can be attributed to government support of small and medium-sized firms and to bank forbearance or “too small to bother” policies for bank balance sheets.

5 Zombie firms

An emerging global issue is the controversy over the number and consequences of “zombie firms”. The phenomenon of firms being kept artificially alive by regulators, banks, investors and policy makers has been increasing in the United States and other countries, arguably for two decades. This assertion is based on our empirical observation of “walking dead” firms and brings in to question their measurement and consequences. Several academic papers – reviewed in the “Global zombies” working paper from Altman et al (2021) – as well as the Bank for International Settlements and other institutions have sounded an alarm about zombie growth and the resulting misallocation of resources when governments and financial institutions keep entities out of court-supervised insolvency proceedings and delay ultimate liquidation. The main argument in support of these bailouts is that they can preserve jobs and hopefully give the debtor time to restructure or simply improve its revenues and profits once the period of economic stress and/or the pandemic subsides. The opposite point of view, advocated by those who follow the Schumpeterian theory of Darwinian economic destruction, is that the global economy would be better off letting failing companies perish and creditor recoveries be reinvested in more productive enterprises. A further important concern is that zombie firms contribute to global disinflation, a problem painfully evident from Japan in the 1990s and more recently in many European countries. This view argues that zombie firms attempt to survive by lowering prices on their goods and services only to be met by lower prices from their stronger and more resilient competitors, providing a destructive cycle of deflation and lower aggregate growth.

Few researchers would deny that artificial support of failing companies (eg, specific regulations where investors in small and medium-sized firm receive lower tax rates or special tax benefits to invest in struggling companies) drives zombie firms. This phenomenon has become apparent during the Covid-19 period on a global scale. Some countries, for example, in Europe, prohibited bankruptcy filings and/or provided moratoriums on interest payments for 2020 and into 2021 (see Figure 3 for a remarkable drop in bankruptcies and insolvencies in the United Kingdom during the Covid-19 period). A potential result, when these prohibitions end, is a spike in nonperforming loans on creditor balance sheets, which may or may not require government subsidies or bailouts for banks and other lenders.

Figure 3: Mind the zombies. Negative adverse selection has severely affected the benefits of the United Kingdom’s insolvency support schemes. UK insolvencies are down 35% since the beginning of the pandemic. This is because the weakest companies are the ones that benefited most from the support schemes. However, most of them will continue not to have a sustainable business and will eventually default. These are known as zombie companies.Source: UK Insolvency Service Official Statistics, November 2020.

How to measure the number of zombie companies is less obvious. Most “zombie watchers” identify these firms as those that cannot cover their debt-interest costs or principal repayments with profits or cashflows, ie, firms for which the ratio of earnings (or cashflows) to interest is less than $1.0$ for two to three years. The results of several studies cited in Altman (2020) show that these numbers have been steadily increasing in many countries over the last two decades, even in the United States. Indeed, by this criterion, some countries have over 20% of listed companies with coverage trends less than 1.0. Further, these estimates do not include the vast majority of private, nonlisted companies. These findings are coincident with concerns over the increase in nonfinancial corporate debt, even in a low interest rate environment (see discussion above).

While a coverage ratio of less than $1.0$ is a useful starting point for identifying zombie firms, Altman et al (2021) add a second, more stringent, filter. In that paper we select listed firms that, in addition to having a three-year moving average coverage ratio of less than $1.0$, also fail a prominent bankruptcy prediction assessment over the prior three years. Specifically, we use the $Z$- and $Z^{\prime \prime }$-score models for the ailing companies to assess their bankruptcy prediction levels. Our results show that in many countries, the percentage of zombie firms by this two-step definition are, on average, 8–10% of listed companies – less than half of what the coverage ratio test shows. Future research will address the nonlisted population in our analysis as well. Although lower than prior published estimates for the incidence of zombie firms, these levels are still concerning.

6 Conclusion

Most economists and policy makers feel that the worst of the economic impact of Covid-19 in the United States is over, and the economic environment is now in a high-growth stage. The recovery will not, however, be uniform across countries and within economies, especially with large differences in vaccination rates and ongoing Covid-19 cases. However, companies and governments still face excessive debt levels, a product of at least two decades of reliance on leverage to grow the global economic system. The aftereffects of government and creditor support, once both bank and nonbank support are discontinued, are of further concern. These concerns will be lessened to the extent that companies can reduce leverage when cashflows are sufficient to do so. The record high levels of equity prices, as of June 2021, would support such behavior.

Declaration of interest

The author reports no conflicts of interest. The author alone is responsible for the content and writing of the paper.

Acknowledgements

The author thanks the numerous participants of scholarly and practitioner conferences who gave valuable comments on earlier presentations, and The Journal of Credit Risk for permitting him to use materials first discussed in Altman (2020). The author also thanks Duke Law School’s Financial Research Center for their original motivation for the author’s providing a 2021 blog post on the topics in this paper.²² 2 URL: https://bit.ly/3r3UCAb.

References

• Altman, E. (1990). Investing in distress securities. Report, Foothill Group, Los Angeles, CA.
• Altman, E. (2020). Covid-19 and the credit cycle. The Journal of Credit Risk 16(2), 67–94 (https://doi.org/10.21314/JCR.2020.262).
• Altman, E., Hotchkiss, E., and Wang, W. (2019). Corporate Financial Distress, Restructuring, and Bankruptcy, 4th edn. Wiley (https://doi.org/10.1002/9781119541929).
• Altman, E., Dai, R., and Wang, W. (2021). Global zombies. Working Paper, Queen’s University and Salomon Center, Stern School of Business, New York University.
• Becker, B., and Ivashina, V. (2015). Reaching for yield in the bond market. Journal of Finance 70(5) 1863–1902 (https://doi.org/10.1111/jofi.12199).
• Hotchkiss, E., Nini, G., and Smith, D. (2020). Corporate capital raising during the Covid crisis. Working Paper, Social Science Research Network (https://doi.org/10.2139/ssrn.3723001).
• Hotchkiss, E., Sun, H., Wang, L., and Zhao, Y. (2021). Credit supply and the real effects of capital raising: evidence from upsized corporate bond offerings. Working Paper, Boston College, Chestnut Hill, MA.
• S&P Global Ratings (2020). Global corporate debt market: state of play in 2020. Article, June 25, Ratings Direct. URL: https://bit.ly/3dTQTNM.
• Wang, J., Yang, J., Iverson, B., and Kluender, R. (2020). Bankruptcy and the Covid-19 crisis. Working Paper, University of Illinois (https://doi.org/10.2139/ssrn.3690398).

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• Keywords
• Bankruptcy
• Credit ratings
• Debt
• Macroeconomics
• Original research
• Credit cycle
• Covid