Fallen angels loom over Europe

摘要

Analysts expect billions of euros of investment-grade corporate bonds to come crashing down to junk, and while the market is better prepared than ever to smooth the transition, there is still scope for some nasty shocks. Fears over a fresh wave of fallen angels -companies that lose their investment-grade status - have already gripped the US market, with CreditSights recently warning that as much as US$74bn of energy bonds could drop to high-yield. (See "Fallen angels next big worry", IFR 2117 p23.) But while the European capital markets have poured less money into the oil and gas sector, there are still plenty of businesses under pressure from sinking commodities prices or badly timed bets on emerging markets.