There are signs of cracks emerging in Europe's credit markets as the economic realities of the novel coronavirus pandemic begin to hit home. Attention is turning from concerns around liquidity, now largely resolved, to solvency as economic data show that many countries are already in deep recession with the chances of any quick recovery receding by the day. "Defaults are already rising, currently standing at around 5%, but projected to go to between 10% and 20%, and the average rating change for corporate credits has already been one notch lower," said Eoin Murray, head of investment, international, at Federated Hermes.
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