Daily Update — May 27, 2026
Austria’s Disaster Fund; Data Center ABS Ratings; and Private Credit Comparisons
Today is Wednesday, May 27, 2026, and here’s your curated selection of Essential Intelligence on global markets from S&P Global. Subscribe to be notified of each new Daily Update.
Energy Expansion
Sustainability Insights: When Nature Sends The Bill: Austria’s Disaster Fund Shields States From Rising Costs
The floods triggered by Storm Boris in 2024 were Austria's most damaging weather event in at least two decades and highlighted the growing financial toll of climate hazards. Assessing how physical climate hazards affect Austrian states’ creditworthiness requires an understanding of climate risk exposure and the fiscal responsibilities across levels of government for disaster-related costs. S&P Global Ratings’ analysis reveals a complex interplay among federal support, state-level cofinancing and preventative investment. Beyond immediate relief costs, frequent and intensifying climate events could disrupt economic activity, erode tax bases, and require sustained increases in spending on adaptation and resilience.
Our research provides directional insight into evolving fiscal exposure to physical climate hazards, which are influenced by natural variability and human-caused warming. While S&P Global Ratings’ analysis is not intended to provide a precise forecast or drive rating actions, it supports a forward-looking assessment of fiscal vulnerabilities and helps to identify structural pressures that could become credit-relevant over time.
Artificial Intelligence
Global Data Center ABS Ratings Are Holding Steady
The global data center sector is experiencing unprecedented demand and growth, driven by rising data usage, cloud migration and AI adoption. AI has significantly increased the need for data center infrastructure and power, particularly for training large language models and for the expected widespread adoption of AI inference. Global data center construction is projected to reach approximately $280 billion in 2026 and $330 billion in 2027, according to 451 Research from S&P Global Energy Horizons.
S&P Global Ratings has rated approximately $24 billion of data center asset-backed securities (ABS) notes across 17 master trusts globally as of the first quarter of 2026, up from about $12 billion at the end of 2023. These ABS transactions are backed by real property interests in data centers, which benefit from lease income and liquidation proceeds upon sale of the property. The primary tenants are often hyperscalers that have signed multi-megawatt leases. While these tenants traditionally have strong balance sheets, their aggressive capital expenditure is starting to erode their free cash flow, slightly elevating their risk profiles.
Private Markets
European And North American Private Credit And Middle-Market Comparison Q1 2026
The creation of European middle-market collateralized loan obligations (CLOs) remains in its infancy, with only four vehicles priced and one being marketed in May. The European private debt borrower pool of about 236 is dwarfed by the US-based universe of more than 3,800 borrowers. For estimates performed in the first quarter of 2026, European private debt borrowers had a median EBITDA of about $35 million, compared with $37 million in North America. Direct lending in the US is trending toward larger borrowers with an EBITDA of $100 million or higher, while the sub-$30 million segment remains the largest cohort. There is less movement in Europe, with sub-€30 million borrowers still accounting for roughly half of the portfolio. First-quarter score actions were balanced in both regions, with 65 estimates raised and 63 lowered in North America, while six were lowered and four were raised in Europe.
Sector exposure is more diversified in the US than in Europe, partly reflecting the larger portfolio and market maturity in the US. Services-based industries, including financial services, are more prevalent in Europe, while the US has greater exposure to industrials, consumer and cyclical end markets. In the first quarter, the software sector represented a higher share of obligor counts in Europe, at 21%, than in North America, at 16%. While European software borrowers are more leveraged on average, they maintain a higher share of positive free operating cash flow: 61% in Europe versus 53% in North America.
In case you missed it
- Canada’s largest banks face a more complex macro backdrop heading into fiscal second-quarter 2026 earnings than they did just three months ago.
- Corporate Japan's new normal is adapting to structural change. Factors specific to Japan, including a stagnating domestic market and growing emphasis on shareholder value, are pushing a transformation.
- US farmers are anticipating near-term commitments from China to import US agricultural commodities, such as soybeans and beef, following months of slower bilateral trade, according to US-based market participants.
Upcoming events
- Stiffening Headwinds To Test The Resilience Of Asian Automakers | May 28 (Webinar)
- AI for IR: Practical Applications Today, Strategic Value Tomorrow | June 2 (Webinar)
- Navigating the 2026 Trade Landscape: Credit Risk, Market Volatility, and the Power of Data-Driven Insight | June 3 (Webinar)
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