Ivy Poon of the Infrastructure Finance team discusses how fiscal support will help offset the rise in leverage for infrastructure issuers resulting from increased capital spending on transportation, renewable energy and other projects. Also, Celina Vansetti-Hutchins of the Banking team explains what the rapid drop in Brazilian interest rates this year means for credit conditions for the country’s banks.
COVID-19 has impacted asset performance broadly to varying degrees across sectors and regions, but the majority of structured finance ratings have remained stable. Structured finance securities at the lower end of the rating scale, and in industries greatly impacted by the downturn, have been most affected during the period from March 1 through September 30, 2020.
Gaming, lodging and restaurants have all taken big earning hits as the coronavirus pandemic persists, but cruise lines will take the longest to recover. We expect defaults across hospitality sectors will rise sharply, peaking in May 2021.