Europe’s real estate companies grapple with negative credit outlook; German banks look resilient despite CRE risks; bond market access is a differentiator for property companies; systemic risks are still high in European housing

Multiple bankruptcies in Germany’s automotive parts sector since mid-2023 are less a sign of a sector-wide crisis than the impact of a cyclical downturn and tight credit conditions on suppliers with financial and commercial weaknesses.

The methodology is now final following a call-for-comments period and will apply to all issuer and debt ratings of corporates in the sector. The application of the updated methodology will not trigger any rating changes.

The methodology is now final following a call-for-comments period and will apply to all issuer and debt ratings of European real estate corporates. The methodology might have a limited negative impact on outstanding ratings of one issuer.

Thursday, April 11th 2024 - 3:30 PM (CEST)

The proposed update clarifies and further refines Scope’s analytical approach. The methodology as proposed will not have an impact on outstanding ratings.

Bayer AG’s caution over a possibly far-reaching restructuring of its pharmaceutical and crop-science activities is frustrating shareholders but is understandable given the high stakes involved in restoring the company’s investment case.

Europe’s integrated electricity utilities and power generators can look forward to reinforced credit profiles this year, although the change is less pronounced than it was at the beginning of 2023.

Investor appetite for ESG corporate bonds cooled in 2023 and issuance from European utilities and real estate companies, historically the market’s two main sector contributors, declined sharply. We expect a moderate pick-up of in overall volumes in 2024.

The credit outlook for the European telecommunications services sector is stable. Corporate profitability remains robust despite low revenue growth. Steady mobile-related capital expenditure contrasts with higher fixed-line spending on fibre networks.