What We’re Reading This Week [January 18, 2021]

The New York Times reports that the National Rifle Association (“NRA”) filed for chapter 11 bankruptcy protection in the United States Bankruptcy Court in Dallas with plans to reincorporate in Texas. The New York attorney general’s office has been conducting an investigation into corruption at the NRA and has been seeking to dissolve the group. The NRA has indicated that its filing is designed to avoid New York’s jurisdiction. [N.Y. Times; Jan 15, 2021]

Fortune reports that the boost in U.S. spending and borrowing designed to combat the ravages of the pandemic has resulted in the U.S. debt reaching levels that rival Italy’s. The percentage of U.S. borrowing to GDP reached 134% in 2020, which is a jump from under 109% in 2019. The new stimulus package and other promised aid may add another $3 trillion to the deficit, which would raise the debt-to-GDP ratio to around 150% in 2021, a figure close to Italy’s 152%. [Fortune; Jan. 14, 2021]

According to Bloomberg’s U.S. bankruptcy tracker, there have been four large bankruptcy filings so far in 2021, a relative slowdown from six filings during the corresponding period of 2020. The total amount of traded distressed bonds and loans also shrank to about $146 billion as of Jan. 8, 2021, significantly less than the $935 billion peak in March, 2020. [Bloomberg; Jan. 12, 2021]

The Wall Street Journal discusses how commercial landlords are reluctantly granting rent concessions and other relief to retail tenants in light of the rise in retail vacancies. Landlords that cannot quickly replace tenants have little leverage in lease negotiations, as they are worried that further tenant departures could trigger more severe financial consequences under their debt documents. [WSJ; Jan. 11, 2021]