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Corporate America’s Cash Burn Problem Is Getting Worse

  • Number of high-yield companies with negative Ebitda has surged
  • Cheap financing has allowed many to avoid bankruptcy
The New Salt Lake City International Airport Opens
Photographer: George Frey/Bloomberg

A growing number of junk-rated corporations including Delta Air Lines Inc. and Royal Caribbean Cruises Ltd. are losing money even before they pay interest and other necessary expenses like taxes.

They’re covering those costs with cash they still have and with more borrowing in the bond and loan markets, where investors are willing to bet that companies will recover relatively fast after Covid-19 vaccines arrive.