Monitoring the credit effects of the outbreak
Introducing the six key themes shaping credit markets in 2020
Implications for fixed income markets and credit ratings
Forward-looking insights into the global credit conditions and trends for 2020
Insights into leveraged loans and high yield bonds
The French government’s measures to ensure a more moderate rate of spending growth than in the past are insufficient to achieve a sustainably lower public debt ratio. France’s fiscal metrics therefore remain broadly aligned with an Aa2 rating, rather than a higher rating.
The operating profitability of Renault S.A.’s core automotive segment is likely to weaken further in 2020 after eroding sharply over the last two years amid declining sales volumes, rising R&D expenses and higher raw material costs. Renault’s weakening operating performance prompted us to downgrade the company’s long-term ratings to Ba1 from Baa3 on 18 February. The outlook is stable.
Global investment banks are deploying their tremendous financial resources to fend off fresh competition from fintech companies. The banks’ responses to our survey show they are alert to the threat of new entrants disintermediating their revenue streams, are enhancing their technology platforms, and have the scale, talent and capital to compete in an increasingly digital marketplace.
In our new report, The State of the Mexican Consumer, we discuss how households in Mexico are unlikely to ramp up spending this year amid low credit availability. Also, consumer confidence in future economic conditions is declining, while employment growth remains sluggish.
Slower economic growth in China increases the risk of zero growth or even a contraction in general budgetary revenue for regional and local governments in 2020. However, the impact will vary across regions, and those that are currently most affected by the virus outbreak have stronger financial profiles.
Credit conditions in Asia will likely weaken this year in tandem with a slowdown in growth momentum, continued trade policy uncertainty and simmering political disputes. The outbreak of the coronavirus globally has further dented growth prospects.
China-US trade relations remain strained despite the recent phase-one trade agreement, with potential long-lasting ramifications for China’s high- and mid-end technology sectors.
Julie Ng and Hemal Shah from the Structured Finance team discuss the extent of US debtors’ exposure in European CLOs. They outline how the presence of US obligors increases geographical diversification and improves credit quality of European CLOs.
Colin Ellis and Madhavi Bokil of the Credit Strategy & Research team discuss some of the forces that are dragging down interest rates globally and the policy challenges that the persistent low rate environment pose for major central banks.
US ports will manage coronavirus disruption barring widespread outbreak
HSBC's successful restructuring of underperforming businesses would be credit positive
Singapore's budget stimulus addresses shocks and structural challenges, while maintaining fiscal discipline