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The Ranks of Corporate Zombies Are Growing: Credit Weekly
Yahoo Finance· 2025-11-01 18:00
Core Insights - The number of "zombie companies" in the US has reached its highest level since early 2022, with nearly 100 companies classified as such in October due to insufficient earnings to cover interest expenses [2][3] Group 1: Economic Context - Companies that accumulated significant debt during the pandemic at low interest rates are now facing challenges from tariffs and increased funding costs [2][3] - The likelihood of relief from high tariffs and interest rates is diminishing, as recent trade deals have solidified these costs and the Federal Reserve may not continue to lower rates [3] Group 2: Sector-Specific Challenges - The health care and biotech sectors have seen many companies fall into zombie status due to rising costs and decreasing federal subsidies [5] - Companies with exposure to tariffs have also been added to the list of zombie companies, indicating broader economic pressures [5] Group 3: Notable Companies - Lionsgate Studios Corp., known for popular film franchises, is among the US corporate zombies, highlighting distress in the entertainment sector [6] - Tronox Holdings Plc has experienced a decline in bond prices, indicating potential financial distress after refinancing efforts [6] - Altice USA's CSC Holdings has seen its bonds quoted below 80 cents, suggesting a need for strategic or financial maneuvers to address upcoming maturity challenges [7]