European Credit Stress Builds Beneath Calm Markets

European high-yield spreads remain near multi-year lows, but rising corporate distress suggests that underlying credit fundamentals are deteriorating beneath the surface. 

• Corporate distress reached a four-year high of 9.2% in 2025, with 1,411 businesses across EMEA classified as distressed, up 18.4% over three years. 
• Weak earnings, trade disruption, supply-chain pressures and higher borrowing costs are affecting a broad range of sectors, particularly automotive, chemicals, manufacturing and retail. 
• The gap between tight headline spreads and deteriorating fundamentals is creating a growing pool of potential stressed and distressed opportunities for credit investors. 

Explore the full report for the companies, sectors and restructuring opportunities emerging beneath the headline market.