A full-scale Middle-East conflict is unlikely but any further escalation of tensions would have significant adverse consequences for commodity markets and inflation, affirming geopolitical developments as a core credit challenge globally.

After a strong January, EUR benchmark covered bond issuance slowed in February and March. Some of the reluctance to issue may have been driven by Germany’s specialised commercial mortgage lenders, given rising tensions in commercial real estate.

Tuesday, April 23rd 2024 - 3:30 PM (CEST)

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

Stalling economic growth in France could herald a more difficult period for French banks. Lacklustre fourth-quarter bank results, which already cast a shadow over otherwise satisfactory full-year performance, look increasingly less like an anomaly.

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.

Japan’s sovereign Outlook was revised to Stable from Negative on 22 March due to higher inflation and its positive effects on debt sustainability. Very high levels of public debt, weak growth and rising ageing-related costs remain constraining factors.

February 2024 Italian NPL collections of EUR 114m were 15% up month-on-month but 18% below the February average of the three previous years.

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 setback for Türkiye’s ruling AKP party in local elections could support a continued restrictive monetary policy stance as persistent high inflation, an important credit weakness, was a key driver of the electoral outcome.