Bankruptcy Risk

The risk that a company will be unable to meet its debt obligations. Often referred to as "default" or "insolvency risk".


This is a risk that both equity- and bondholders take when deciding to invest in a company. Aside from looking at overall profitability, analyzing a company's debt obligations and ability to repay, agencies like Moody's and Standard & Poor's attempt to determine this risk by giving bond ratings.



An Overview Of Corporate Bankruptcy - As soon as you invest in a company, you face this risk. Find out what it means.

What are the differences between chapter 7 and chapter 11 bankruptcy?

Corporate Bonds: An Introduction To Credit Risk - Corporate bonds offer higher yields, but it's important to evaluate the extra risk involved before you buy.

What Is A Corporate Credit Rating? - For investors considering buying debt securities, a credit rating is an essential tool.

Z Marks The End - Investors need to know how to detect signs of looming bankruptcy. The Z-score can help.
Related Terms

Absolute Priority

Bankruptcy

Chapter 11

Chapter 7

Debt Overhang

Default

Prepackaged Bankruptcy

Ratings Service

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