<\/p>\n
Two-thirds of leveraged debt exposed to negative fallout.<\/p>\n
Companies that account for a large share of European leveraged debt will be negatively affected by rising tariffs, which will intensify ratings pressure for some, says Fitch Ratings.<\/p>\n
In a new report, the rating agency said that higher tariffs on U.S. imports from European countries will have a combination of direct sector impacts, along with the negative effects of an overall deterioration in economic growth \u2014 although it is not forecasting a recession for most of Europe.<\/p>\n
\u201cIn our view, the tariffs will have a high effect on the chemical, automotive and technology hardware sectors,\u201d it said \u2014 representing about 13% of leveraged debt as of the first quarter.\u00a0<\/span><\/p>\n Additionally, tariffs will have a \u201cmedium effect on a larger group of sectors,\u201d Fitch said \u2014 including the business services, industrials and healthcare sectors, which account for over 50% of leveraged debt.<\/p>\n These negative effects will, in turn translate into increased financial pressure on corporate balance sheets, and some companies could also see their credit ratings negatively affected.<\/p>\n \u201cHigh exposure to tariffs in the low-rated debt categories may indicate significant potential economic consequences,\u201d the report said.<\/p>\n About one quarter of the exposed issuers had no leverage headroom at the end of 2024, Fitch noted.\u00a0<\/span><\/p>\n \u201cTariffs will cut revenue and profitability growth for many issuers, particularly affecting corporates with low leverage headroom and increasing pressure on the ratings,\u201d it said.<\/p>\n Against this backdrop, Fitch has increased its 2025 default rate forecast for high-yield bonds to a range of 5% to 5.5%, up from its previous forecast of 3.5%-4%; and, its\u2019 default rate forecast for leveraged loans was increased to 2.5%-3% from 2%-2.5%.<\/p>\n <\/p>","protected":false},"excerpt":{"rendered":" Two-thirds of leveraged debt exposed to negative fallout. Companies that account for a large share of European leveraged debt will be negatively affected by rising tariffs, which will intensify ratings pressure for some, says Fitch Ratings. In a new report, the rating agency said that higher tariffs on U.S. imports from European countries will have […]<\/p>\n","protected":false},"author":1,"featured_media":4099,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4098","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bez-rubriki"],"featured_image_src":{"landsacpe":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2025\/05\/Money-euro-77-1085x445.jpg",1085,445,true],"list":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2025\/05\/Money-euro-77-463x348.jpg",463,348,true],"medium":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2025\/05\/Money-euro-77-300x200.jpg",300,200,true],"full":["https:\/\/relinvestmentsgroup.com\/wp-content\/uploads\/2025\/05\/Money-euro-77.jpg",1085,723,false]},"_links":{"self":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/4098","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/comments?post=4098"}],"version-history":[{"count":1,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/4098\/revisions"}],"predecessor-version":[{"id":4100,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/posts\/4098\/revisions\/4100"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/media\/4099"}],"wp:attachment":[{"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/media?parent=4098"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/categories?post=4098"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/relinvestmentsgroup.com\/en\/wp-json\/wp\/v2\/tags?post=4098"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}