special-reports Ratings /ratings/en/research-insights/special-reports/resurfacing-credit-headwinds content esgSubNav

Confronting Credit Headwinds

In the near term, we expect credit pressures to intensify—with a world order that's increasingly fragmented and fragile.

What We're Watching: Key Themes 2023

S&P Global Ratings believes 2023 will begin as a journey through intensifying credit pressures, leading to (if all goes well) more stable financing conditions by year-end.

This Week In Credit

Debt Ceiling Conclusion Inches Closer

A U.S. debt ceiling deal may finally be within reach, but the closer we get to June 5 without a formal announcement, the more uneasy markets will become. U.S jobs numbers (Friday) are the key release this week for an economy that remains resilient, raising questions regarding the future path for interest rates. Markets now seem unsure about another hike but are more certain that rates will stay higher for longer, which will affect financing costs. The impact of higher rates was one of the primary reasons we recently raised our default forecast for U.S leveraged loans to 2.5% by March 2024 from 1.42% in April 2023.




Global Banking Risk Monitor

We are monitoring the credit implications of the ongoing developments within the global banking sector and other potential macro and credit ramifications.

This Month In Credit

Growing Divide

Downgrades continued to outnumber upgrades for issuers rated 'B' and below in April, even as upgrades rebounded (especially at higher rating levels).

Weakest links reached a two-year high of 316 in April as the pool of companies at the greatest risk of default grows.

Over the past year, the health care and high technology sectors have had the largest increase in weakest links, a notable downward shift in performance since the height of the COVID-19 pandemic.

High leverage increasingly was cited as a factor in the negative outlook and CreditWatch revisions in April.


C-Suite Credit Insights

Receive the latest pulse on the top credit stories in our weekly newsletter, tailored for C-suite executives by our global research team.

Real Estate Risk

Scenario Analysis: European Office CMBS Withstands Vacancy Stress

European and U.K. office occupational demand has been dwindling as hybrid and working from home becomes the new way of work. Office values are also feeling the pressure from rising interest and cap rates.

To assess the impact on European and U.K. CMBS transactions backed by office assets, we performed a scenario analysis, which shows that 'AAA' and 'AA' rated tranches can withstand increasing vacancy rates with little risk of downgrade, while lower-rated tranches are more vulnerable to higher vacancy stresses.

Scenario analysis outcomes vary among transactions. While some CMBS ratings would not change, others might experience a multiple-notch downgrade.


Credit Market Research

S&P Global Ratings Credit Markets Research is used by the world’s financial markets when they need data driven insights and analysis. Whether to help evaluate strategic portfolio positions, develop investment ideas, or identify potential gaps and opportunities, we provide top-down information on global credit trends, macroeconomic conditions, and sector-specific developments that impact global capital markets.

Private Debt


Ruth Yang, Global Head of Thought Leadership at S&P Global Ratings, joins the Seek & Prosper Interview Series to discuss the reasons for the expansion of private debt markets over the last 10 years, the future of private debt as interests rates creep upward, and the importance of direct lending for a healthy economy.

Credit Conditions

Our regional and global Credit Conditions Committees—and the research publications we produce—provide financial market participants around the world with an essential resource for identifying and understanding prevailing and potential credit risks.

Capital Markets

Watch: Capital Markets View — Q1 2023

In this edition of Capital Markets View, S&P Global Ratings Head of Thought Leadership Ruth Yang and EMEA Head of Private Equity, Loan, & CLO Business Development Chris Porter discuss the levels of loan issuance, the volatility of the secondary market, potential downgrades, the maturity wall looming (again), and our default predictions.



Emerging Markets

Emerging market economies are set to experience changing credit circumstances as geopolitical risks flare, inflation increases, interest rates rise, and financing conditions tighten.

Ratings Performance Insights

Ratings Performance Insights: Q1 2023

Our recurring Ratings Performance Insights—consisting of this quarter-in-review data dashboard and our forthcoming Global Credit Markets Update—provides our view on ratings conditions and credit trends to watch.

In the first quarter of 2023, credit conditions continued to erode, although at a slower pace than during fourth-quarter 2022. However, downside risks are rising, and a sharp increase in negative bias across most regions tells us more downgrades and defaults are to come.


Sovereigns Spotlight

Our sovereign ratings reflect our analysis of institutional and governance effectiveness, economic structure and growth prospects, external finances, and fiscal and monetary flexibility.

The Ratings View

In this week's summary of ratings views: Tighter headroom for some 'BBB' issuers prompted a recent spike in fallen angels. Property in China is set for another soft year. A scenario analysis suggests European office CMBS can withstand vacancy stress. We have updated and expanded our Corporate Results Roundup for Q1 2023.