The surge in energy prices and constrained access to key commodities will hurt issuers in the autos, transportation and power sectors. Financial market volatility also amplifies risks for governments and companies that depend on foreign-currency commercial funding and have high near-term refinancing needs.

Ten Moody’s-rated issuers defaulted in February, including eight Ukrainian banks, with more defaults in the region likely as the Russia-Ukraine military conflict continues. We also expect more defaults of Chinese property developers as funding access in the sector remains constrained.

Higher prices for energy, food and other necessities amid the Russia-Ukraine crisis, as well as heightened financial market volatility, will weigh on consumer spending and sentiment in the coming months in Europe and the US. Continued price growth will likely test the ability of companies to pass on rising costs to consumers. 

Amid increased cyberattack risk, Marie Fischer-Sabatie and Matt Cahill discuss differences in cyber risk preparedness among hospitals, pharmaceutical companies and medical device manufacturers. Then Farah Zakir does the same for business and consumer service companies, and Jonathan Reid (who has since left Moody’s) for companies in the chemicals and other basic commodities sectors.