More NewsEuropean Corporate Credit Quality to Remain Fragile Over Coming Months

European Corporate Credit Quality to Remain Fragile Over Coming Months

The creditworthiness of European companies and financial institutions is unlikely to recover significantly in 2004, even though the low point for corporate credit quality in the region has passed, according to Standard & Poor’s. Among western European corporates, the distribution of Standard & Poor’s outlook and CreditWatch listings – traditionally a good lead indicator of credit quality – is currently slightly more negative than at the same point in 2002. In November 2003, 27 per cent of the nonfinancial European corporates rated by Standard & Poor’s were assigned a negative outlook or were placed on CreditWatch negative, compared with 7 per cent assigned a positive outlook and 65 per cent assigned a stable outlook. Furthermore, the number of rating downgrades has fallen in 2003 compared with 2002, and is likely to decline again in 2004, but the economic and business environment in Europe at present provides limited scope for rating upgrades in many sectors. ‘Without any real growth in consumption and investment, we see little reason to expect a dramatic upturn in credit quality among European issuers in 2004,’ said Barbara Ridpath, Standard & Poor’s Chief Credit Officer for Europe. ‘Creditworthiness is certainly deteriorating less rapidly than a year ago thanks to remedial actions taken by issuers, but companies are reaching the limits of what they can do internally without help from the economy.’

Related Articles

Infosys Finacle to power Santander UK’s international cash management system

More News Infosys Finacle to power Santander UK’s international cash management system

4w The Global Treasurer
Preparing for GDPR? Here’s four things to consider

More News Preparing for GDPR? Here’s four things to consider

4m Elliott Wiseman
Cash flow in focus for investors

Cash Management Cash flow in focus for investors

5m Conor Deegan
Treasury TV: Karen Pugsley, Domino's Pizza Group

More News Treasury TV: Karen Pugsley, Domino's Pizza Group

5m Victoria Beckett
Treasury TV: Yeng Butler compares US and European MMF reforms

Compliance Treasury TV: Yeng Butler compares US and European MMF reforms

5m Victoria Beckett
Treasury TV: Tim de Knegt, The Port of Rotterdam

10 Minutes With The Treasury Treasury TV: Tim de Knegt, The Port of Rotterdam

6m Victoria Beckett
Banks are selling clients short with short dated cash deposit U-turns

Banking Banks are selling clients short with short dated cash deposit U-turns

6m Victoria Beckett
What does sterling’s Brexit boost mean for UK manufacturers?

More News What does sterling’s Brexit boost mean for UK manufacturers?

6m Tasja Botha