Search
 
News

European Companies Are in Distress

“If this trajectory continues, we would expect to see increased pressure on liquidity and further tightening across the credit markets.”

By Lucca de Paoli | June 20, 2022 at 12:15 PM

Corporate distress in Europe’s biggest markets is near a two-year high as inflation and higher interest rates squeeze indebted firms. Companies in Germany, the U.K., France, Spain, and Italy are the most distressed since August 2020, according to the Weil European Distress Index. The study aggregates data from more than 3,750 listed European firms.

“If this upward trajectory continues, we would expect to see increased pressure on liquidity and further tightening across the credit markets, with some businesses struggling to access finance and ultimately facing defaults,” said Neil Devaney, a partner and co-head of Weil, Gotshal & Manges’s London restructuring practice. “The economic outlook has become significantly more challenging.”

Businesses in Europe are struggling with rampant inflation, with firms forced to pay more for everything from fuel to labor. The resulting tightening of monetary policy by the Bank of England and the European Central Bank (ECB) is also making it more expensive for companies to refinance.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?

NOT FOR REPRINT

© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

 

Recommended Stories

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2023 ALM Global, LLC. All Rights Reserved.