LONDON, Sept 26 (Reuters) – Rising interest rates in Europe will put pressure on the credit ratings of companies and banks in the region, S&P Global warned on Tuesday.
“The credit quality trend is turning negative for corporates, particularly for speculative grade issuers, as funding conditions tighten,” the rating agency writes in a new report.
“Real estate remains one of the most exposed sectors. For European banks, the deterioration of asset quality will begin, while credit losses are only expected to normalize,” adds S&P.
According to the agency, defaults on European junk bonds will gradually increase, to 3.75% by June 2024, from 3.4% in August. (Marc Jones report, French version Claude Chendjou, edited by Blandine Hénault)
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