In this edition of Instant Insights, our key takeaways from recent articles include the following: our latest global credit conditions report and global economic outlook, the Asia-Pacific sector roundup, and corporate top trends updates covering Australia, New Zealand, India, Indonesia, and South Korea. We dive into China's Two Sessions, China's auto sector, microfinance in India, banks in Hong Kong and Taiwan, insurers in Kazakhstan and Uzbekistan, Japanese new lease accounting standards, WAEMU sovereigns, the continuation vehicles in private equity, the application of the Shades of Green analytical approach in the real estate sector, and the U.S. local TV broadcasters. We also feature 2024 annual default and rating transition studies on global corporates, and Japanese corporates, public finance and structured finance, Sustainable Finance Spotlight, the real estate monitor, This Month In Credit, a primer on middle-market CLOs, as well as the rise in cryptocurrency as a reserve investment for U.S. states and statewide pension plans, the effects of deep federal spending cuts on local governments and schools, Energy As A Service for not-for-profit health care providers, academic medical centers, and the BSL CLO index in the U.S.

S&P Global Ratings periodically updates this article, which contains an edited compilation of key takeaways from our most up-to-date thought leadership organized by sector, region/country, and publication date (see table 1).

Table 1

Key Takeaways From Our Most Recent Reports

Credit conditions

1. Global Credit Conditions Q2 2025: Puzzling Reshuffling, March 31, 2025

• Towards a new global order: Tariffs imposed or mooted by the U.S. and countermeasures by other countries are moving apace in 2025. This has weakened investor sentiment, consumer confidence, and should weigh on economic growth this year. At the same time, global alliances and multinational institutions are being upended. The fundamental geopolitical changes at play will likely lead to material shifts in capital flows between regions, sectors, and asset classes.
• Credit has remained resilient thus far: Some rating actions--including outlook revisions or CreditWatch placements--have occurred because of tariff-related uncertainties, but for the most part these have been limited. Through mid-March, global rating actions are largely balanced between upgrades and downgrades, and defaults have moderated so far this year, speaking to the larger tailwinds entering 2025 of resilient economic growth and favorable financing conditions.
• Downside risks are building once again: Markets have reacted negatively to the unfolding global trade situation, but the responses have thus far been modest, keeping many equity indices, global benchmark interest rates, and corporate credit spreads on trajectories or within ranges they've occupied since the monetary tightening cycle started three years ago. This could reflect a blind spot by markets anchored in the belief that the tariff situation will improve. But should it worsen, further asset price declines may accelerate, tightening access to funding for issuers.

2. Credit Conditions Asia-Pacific Q2 2025: Squeezed From Both Sides, March 26, 2025

• Benign for now: Supportive financing conditions and domestic consumption are steadying Asia-Pacific credit conditions. China's property sector may be seeing the green shoots of a recovery as home prices stabilize. Export activity remains brisk, but this is likely due to frontloading ahead of more trade tariffs. Direct and indirect effects from trade tensions and policies threaten to unwind the course.
• Global trade showdown: President Trump's trade protectionist policies are escalating credit strains, disrupting supply chains and raising production costs. Retaliations could fan risks of a global trade war. In Asia-Pacific, the smaller, more open trade-centric economies are most vulnerable.
• Double squeeze from China and the U.S.: Higher tariffs and still-soft domestic demand could further drag on China's economy, risking a deflationary spiral. Asia-Pacific economies will also be dealing with the possibility of a U.S. recession and broader knocks to global confidence.
• Volatility and higher costs: Geopolitical tensions, including the strategic competition between China and the U.S., could create supply chain uncertainty and disruptions. A sharp downturn could fuel volatility and crimp financing access. Reciprocal tariffs could spur outflows from Asia-Pacific, leading to weaker currencies and higher borrowing costs.

3. Credit Conditions Emerging Markets Q2 2025: The Tariff Storm, March 26, 2025

• Emerging markets' (EMs') resilient credit conditions are likely to be tested due to increasing trade protectionism in the U.S. The ensuing uncertainty has already impacted market sentiment. We anticipate that investment in key EMs will be subdued until there is greater clarity regarding the effects of protectionism on economic growth, inflation, and interest rates. Some damage has already occurred, and we expect slower economic activity to weigh on credit fundamentals and market sentiment.
• Growing trade protectionism is a major risk for EMs. The announced and anticipated U.S. tariffs may provoke retaliatory measures from targeted countries, potentially leading to a trade war. In the short term, global trade disruptions could dent capital and investment flows, cause a significant economic slowdown, and reignite inflationary pressures. Long-standing U.S. tariffs and corresponding retaliatory actions from other nations may disrupt supply chains and accelerate relocation efforts. The trajectory of interest rates in this scenario is uncertain; while renewed inflationary pressures and a strong dollar could keep rates elevated, a sudden demand shock might necessitate monetary stimulus.
• In our baseline, EM credit conditions will likely weaken over the coming quarters. Tariffs are expected to impair economic growth, investment, and market sentiment, decreasing demand for various goods and services. Financing conditions for EMs may deteriorate; although the interest-rate trajectory is uncertain, volatile market conditions are likely to increase borrowing costs and restrict market access for sectors affected by tariffs and for lower-rated issuers.

4. Credit Conditions Europe Q2 2025: Europe Plots A New Course, March 26, 2025

• Overall: Emerging U.S. unilateralism on security, trade, and finance has left European policymakers scrambling to coordinate a response. Remarkably, a response is in the offing, after the German government broke with the past to approve a €500 billion (11% of GDP) infrastructure fund and introduced plans to ease its fiscally constraining debt brake rule to accelerate military spending. Despite that, and the EU's commitment to finance European defense via the issuance of common European debt, Europe's aspiration to build a robust security deterrence capability will take years, not months-- highlighting the importance of keeping the U.S. onside.
• Risks: Persistent uncertainty, notably around the U.S. administration's trade, foreign policy, and financial market strategies, may be a greater economic risk to confidence than the tariffs themselves. Meanwhile, Vladimir Putin's agreement to a "partial" 30-day ceasefire is, in our view, a pause but far from an end to the three-year conflict with Ukraine.
• Ratings: Credit quality for financial institutions, insurance, and much of the rated corporate universe has strengthened in recent quarters, providing some buffers to protect against the economic costs involved in navigating the uncertain trading environment. For fiscally constrained European NATO members (apart from Germany), the annual security spending increase in national budgets is unlikely to exceed 0.2 to 0.3 percentage points (ppts) of GDP, market conditions allowing.

5. Credit Conditions North America Q2 2025: Uncertainty Prevails, March 26, 2025

• Overall: Amplified policy uncertainty, and accompanying near-term market volatility, pose a risk to an environment of favorable credit conditions for North American borrowers.
• Ratings: Ratings momentum has been positive, with upgrades outpacing downgrades in the first quarter, and the region's net outlook bias narrowing further. We expect the U.S. trailing-12-month speculative-grade corporate default rate to fall to 3.5% by December.
• Risks: Higher tariffs threaten to reignite inflation and weigh on credit quality for entities exposed to imports and international markets. Borrowing costs could remain high amid increased investor risk aversion, and businesses and consumers could pull back further, leading to sharper-than-expected economic downturns in the region.

Autos

6. China's Car Sector: A Shakeout Looms, April 1, 2025

• Beijing's push to create a giant state-owned automotive firm could jumpstart a long-awaited consolidation of China's oversupplied auto industry.
• The resulting entity, which will rank as one of the world's largest carmakers, will leverage expanded resources to improve its competitiveness in electric vehicles.
• Before the industry completes its restructuring, which we expect to play out over 2027-2030, competition will remain fierce, weighing on carmakers' volumes, margins and cash flows.

7. Credit FAQ: Japan's Auto Sector Faces Tariff Tribulations, March 21, 2025

• Tariffs will inevitably apply pressure on the profitability of Japan's auto sector.
• The tariff hike is likely to have a major impact on the creditworthiness of Honda and Nissan.
• We believe U.S. tariffs will be a negative factor for the Japanese automakers and suppliers. These include tariffs on auto exports from Mexico and Canada, along with those from Japan.

Corporates

8. Corporate Top Trends Update | Asia-Pacific Corporates 2025: Who Can Take The Tariff Hit?, March 20, 2025

• Export-focused Asia-Pacific will be stung by rising U.S. tariffs, with slowing regional or global growth posing the main risk.
• While 84% of firms in the region are rated investment grade, and can absorb much of the turbulence, net rating actions are starting to skew negatively.
• Rated firms with more export exposure are most at risk. By country, Japan and Korea stand out; by sector, autos, machinery, metals and chemicals do.

9. Corporate Top Trends Update | Australia and New Zealand: Indirect Exposure Threatens A Delicate Recovery, March 26, 2025

• Australia and New Zealand have limited exports to the U.S., but indirect tariff effects could hit their large export sector.
• Weak Chinese demand pose risks for miners; a regional slowdown could hit ports and airports and derail the consumer and real estate recovery.
• Stabilizing office values will support REIT deleveraging; capex flexibility and bank liquidity will help infrastructure firms.

10. Corporate Top Trends Update | China: Can Stimulus Offset Slow Growth And New Tariffs?, March 24, 2025

• China has the largest U.S. trade surplus in Asia-Pacific. Its U.S. exposure has been falling, but indirect effects can hit its large export sector.
• The tariffs' impact will unfold amid tepid growth. This will weigh on China's industrial, power, transport, property, and consumer sectors.
• Government initiatives will support renewable power, transition fuels (gas), industrial metals, and metro rail, while housing sales will stabilize.

11. Industry Credit Outlook: Tariffs cloud corporate earnings, March 20, 2025

• The Q4 earnings season concluded against the backdrop of intense tariff-related anxiety. Uncertainty around the timing, scope, and duration of U.S. tariffs and retaliatory measures from other countries makes it difficult for companies to assess potential impacts. Against this backdrop, earnings calls comments represent a broad, if imperfect, survey of corporate sentiment regarding tariff-related risks.
• We have assessed comments from 533 rated companies globally with total revenues exceeding $10 trillion.
• Corporate guidance largely does not reflect tariff impacts, so worst case outcomes will cause substantial earnings revisions. Companies appear broadly sanguine and believe price increases, supply chain localization, and inventory movement will soften the blow.
• This round of tariff conflict is best understood as a third wave of supply chain volatility following U.S. tariff measures in 2018 and the COVID-19 pandemic. Many companies, particularly in the U.S., have localized supply chains and lowered exposure to China.
• The greatest risks are likely in sectors with deep supply chain integration across North America, such as autos and aerospace. Some raw material exposures are large enough as to make tariffs difficult to avoid without exemptions.
• The near universal intent to pass through higher tariffs via prices means either inflation will result or, if the pricing environment is more resistant, corporate profit margins will begin to feel pressured.

12. Corporate Results Roundup Q4 2024: Growth accelerates and sentiment improves, March 19, 2025

• Accelerating growth for sales and profits is the standout feature of the Q4 results season. Measured at an annual rate, revenues for companies rated by S&P Global Ratings globally that report quarterly are up 1.7% based on current results, and EBITDA expanded 3.8%, implying expanding profit margins. The surprise ratio for revenues versus market consensus has turned up sharply and is at its highest since Q3 '23. Earnings call transcript sentiment is the most positive it's been for the 5-year results period we are tracking, led by an upturn in sentiment in North America.
• The global results season for rated corporates is largely complete. For companies that report quarterly, 79% of results are in, 81% for investment-grade (IG), and 76% of speculative-grade (SG). 95% of North American companies have reported versus 73% in Europe and 60% in Asia-Pacific.
• Technology and semiconductor firms are again having the biggest positive impact on EBITDA growth (e.g. NVIDIA, Amazon, Alphabet, Microsoft, Meta, SK Hynix, Samsung), and autos and oil and gas companies the most negative (e.g. Stellantis, BP, Petrobras, Volkswagen). Annual EBITDA sector growth rates are strongest for technology and media, and weakest for autos, oil and gas, and metals and mining. The relative absence of technology continues to be a drag on Europe and Latin America's performance relative to North America and Asia-Pacific.
• Favorable margin trends are most apparent in the media, technology, and health care sectors. Negative pressure is strongest in oil and gas, autos, and metals and mining.
• Earnings calls are being followed closely for guidance as to the likely impact of U.S. tariffs. For the most part, the impact of tariffs is not yet featured in companies' earnings guidance. Companies expect mitigation through supply chains, localizing production, and raising prices but uncertainties around duration and reciprocal tariffs abound.
• Interest-rate pressure appears to be easing rapidly. Cash interest payments are up 8.1% on an annual basis, down from 13.6% in Q3 and 24% this time last year. Cash-to-total assets has been edging up for 2 quarters now. Easing interest rate pressure and recovering EBITDA have allowed interest coverage to edge higher after a prolonged decline.

13. Corporate Top Trends Update | India: Firms Protected By Growth, Funding, Credit Strength, April 1, 2025

• India's low U.S. exposure reduces tariff risks, but indirect effects, such as trade redirection to the country, could hit the steel and chemicals sectors.
• Firms are protected by robust growth and strengthened credit quality; most will fund onshore given better access to deepening liquidity onshore.
• About 30% of our outlooks on rated firms are positive while 20% are negative, driven largely by the positive sovereign outlook and the recent negative actions on the Adani group entities.

14. Corporate Top Trends Update | Indonesia: Funding At Home Eases Risks From Abroad, April 1, 2025

• Low U.S. exports limit direct risks, but indirect effects may hit Indonesia's large export sector and raise dumping risks for steel and chemical sectors.
• Risks from subdued revenue and profit growth and elevated investments to be moderated by lower refinancing needs and healthy funding conditions.
• Government policies will support the housing market and reshape the credit dynamics of the country's SOEs.

15. Credit FAQ: Japan’s New Lease Accounting Standards Will Not Shake Ratings, March 27, 2025

• New Japanese lease accounting standards come into effect in April 2027. All lease transactions are to be reported on balance sheets, under the new standards. This aligns Japanese standards with IFRS 16.
• In S&P Global Ratings' view, the new standards will make comparisons of the financial profiles of Japanese and non-Japanese companies easier. The new standards will apply to 22 of the 70 or so Japanese corporations we rate.
• We believe the impact of the new standards on our ratings will be limited. Our rating analysis already incorporates lease transactions in the same way the new standards will. Specifically, we have considered leases to be a form of financing and categorize them as on-balance sheet debt.

16. Corporate Top Trends Update | Japan: Risks Ahead From Tariffs And Global Slowdown, March 25, 2025

• Tariffs would hit the operating outlook of Japanese exporters; makers of autos would be hit the hardest, followed by machinery.
• Economic slowdown in the U.S. and China may hit demand and weigh on firms' profitability; the Bank of Japan's rate hike will be manageable for most.
• Aggressive spending for growth, large acquisitions, and return to shareholders may impair the credit quality of some companies we rate.

17. Corporate Top Trends Update | South Korea: Export-Focused Economy To Face Trade Strains, March 27, 2025

• Korea's large and growing trade surplus may attract U.S. tariffs, which would hit makers of autos, industrial machinery, and semiconductors.
• Weaker U.S. support for EVs may slow sales further and pressure Korean firms in EV value chains, especially firms with aggressive U.S. investments.
• 13% of our outlooks on Korean firms are negative, none is positive. Steel firms face China supply, petrochemicals face overcapacity, both under weak demand. High-tech chips can pass-on tariff costs, helped by AI needs.

18. What Looming Tariffs Could Mean For U.S. Corporates, Feb. 28, 2025

• Higher tariffs are a top concern for many U.S. corporate borrowers we rate, and would likely result in rising input prices at a time when companies are grappling with already-elevated costs and a more difficult passthrough environment.
• The prospect of tariff-fueled inflation is throwing a wrench into the Federal Reserve's monetary-policy easing, and any related economic disruption could dampen market sentiment; against this backdrop, the cost of debt service and/or refinancing may be overly burdensome for some borrowers.
• Amid tariff uncertainties, key U.S. sectors to watch include autos, metals and mining, tech, oil and gas, capital goods, chemicals, consumer products and retail, pharma and health care, and utilities and power.

Credit trends and market liquidity

19. CreditWeek: What Are The Risks To Emerging Markets’ Sound Credit Performance?, March 20, 2025

• Our analysis shows emerging markets in Asia may be hit hardest by reciprocal tariffs.
• Indirect effects heighten the downside risk to EM credit quality.
• On the bright side, the maturity wall for EM risky credits looks manageable, peaking in 2027 at $3.6 billion—mostly in Latin America, and with the telecom sector having the highest concentration of debt coming due. And corporate spreads have been relatively stable contributing to solid--although decelerating--bond issuance (mainly unrated).

20. This Month In Credit: Positive Momentum Amid Market Volatility, March 27, 2025

• Rating activity continued its positive trend despite market volatility. Upgrades (39) outnumbered downgrades (28) for the second consecutive month.
• Weakest links dropped by 10 in February--reaching the lowest level since October 2022. The number of defaults as the reason for removals from the weakest links list remains limited, accounting for less than 30% in February.
• Despite February recording the first fallen angels of the year, rising stars continued to outnumber fallen angels. However, potential rising stars declined, for the second month in a row, to 19.
• The default count eased in February to seven, driven by a decline in the U.S. Meanwhile, monthly defaults in Europe outnumbered the U.S. for the first time since September 2022.

21. Default, Transition, and Recovery: 2024 Annual Global Corporate Default And Rating Transition Study, March 27, 2025

• The number of global corporate defaults ticked lower in 2024, to 145 from 153 in 2023. Nearly 60% of the defaults in 2024 were distressed exchanges.
• The consumer/service sector led the global default tally for a fourth straight year, accounting for nearly 25% of defaults last year.
• Of the defaulters in 2024 that were rated at the start of the year, all but one (a confidentially rated issuer) were speculative grade, and 91.7% were rated 'CCC+' or below prior to default.
• Even though defaults were elevated, credit quality broadly improved last year. More issuers were upgraded (9.6%) than downgraded (5.8%), while the one-year global Gini ratio (a measure of ratings performance) dipped marginally by 0.8 percentage points from the previous year, to 89.4%.

22. Default, Transition, and Recovery: 2024 Annual Global Sovereign Default And Rating Transition Study, March 24, 2025

• Sovereign defaults totaled three in 2024, down from nine in 2023. Local currency defaults outnumbered foreign currency defaults for the second consecutive year.
• Overall credit quality improved in 2024, particularly for speculative-grade sovereigns. Upgrades rose by seven to 22--the highest since 2007--and downgrades remained constant at 10.
• The number of sovereigns rated 'CCC+' and below was seven as of December 2024, one less than in 2023.
• Geopolitical risks and high debt levels will be the main sources of credit quality pressure for sovereigns in 2025.

23. Default, Transition, and Recovery: 2024 Annual Japanese Corporate And Public Finance Default And Rating Transition Study, March 28, 2025

• There were no defaults among Japanese corporate and public finance issuer credit ratings in 2024--the ninth consecutive year without a default.
• Of the entities covered by this study, 23 have defaulted since Jan. 1, 1981, and among those with active ratings one year prior to default, all were rated speculative grade, except for two in 2009.
• Entities rated investment grade were far more likely to maintain the same ratings over comparable time periods than speculative-grade entities.
• The Gini ratio, an indicator of rank-ordering accuracy, shows that ratings on Japanese entities remain effective measures of relative default risk.

24. Default, Transition, and Recovery: 2024 Annual Japanese Structured Finance Default And Rating Transition Study, March 28, 2025

• In 2024, there were no rating actions (upgrades, downgrades, or defaults) among Japanese structured finance securities rated by S&P Global Ratings Japan or S&P Global SF Japan.
• For S&P Global Ratings Japan, the residential mortgage-backed securities (RMBS) sector accounted for 99.2% of the ratings outstanding at the start of 2024, while single-name synthetics accounted for the remaining 0.8%.
• For S&P Global SF Japan, RMBS accounted for 87.3% of the ratings outstanding at the start of 2024, while the asset-backed securities sector accounted for 7.3% and single-name synthetics accounted for 5.3%.

Cross sector

25. Asia-Pacific Sector Roundup Q2 2025: Trade Complications Could Disturb Still Waters, March 27, 2025

• A complicated trade and macro landscape: Asia-Pacific sectors could face a complicated credit landscape amid higher trade tensions. Higher trade barriers may disrupt supply chains and slow growth. Auto, metals, pharma and technology face a direct hit from U.S. tariffs. Fears of a sharper global downturn could hit demand and confidence, squeezing the region's downstream and consumer discretionary sectors (e.g., consumer goods, gaming, and retail).
• Pressure on revenues and financing conditions: A hit to demand could erode corporate revenues, which narrows credit headroom. Banks could face lower asset quality and thereby tighten lending appetite. If risk-off sentiment intensifies, lenders may demand higher risk premia. This may upend the region's accommodative financing conditions as markets turn more volatile. Defaults may rise.
• Skewed outlook bias distribution: The net rating outlook bias improved to negative 2% as of March 2025 (Nov. 2024: negative 4%), following downgrades on New Zealand public finance issuers. The negative bias is largest for chemicals, building materials, retail, transportation cyclical, and real estate.

26. Credit FAQ: China's Two Sessions: No Surprises In Push To Unlock Growth, March 27, 2025

• The watchword for China's policymakers in 2025 is continuity. As Beijing aims for "about 5%" GDP growth by 2025, the government is focusing on boosting consumption, improving investment effectiveness, and increasing domestic demand. At the same time, it aims to foster new productive forces and stabilize the property market. We aren't surprised.
• S&P Global Ratings sees strong policy continuity into 2025, with no U-turns. The Chinese government continues to carefully calibrate its stimulus measures to leave room for other major obstacles, including U.S. tariff threats, and a potential U.S. recession.

27. Credit Cycle Indicator Q2 2025: Macro Headwinds Could Hinder Credit Recovery, March 20, 2025

• Our global credit cycle indicator (CCI) continues to signal a credit recovery this year. However, geopolitical and trade tensions, and growth concerns, amid increasing policy uncertainties, could stall or derail the upturn.
• The corporate sector, thanks to supportive market conditions, has shown stronger upward credit momentum. Households continue to grapple with squeezed purchasing power and subdued sentiment.
• The divergence across regions and geographies remains, suggesting different credit trajectories.

28. Vietnam On Fast Track, Watch Out For Tariff Bumps, Say Panelists, March 18, 2025

• For Vietnam to become Asia's fastest-growing economy, a lot must go its way. That includes more infrastructure spending, cheaper and more accessible funding, and de-escalating trade tensions, according to a recent S&P Global Ratings conference in Hanoi.
• We expect Vietnam's economic growth to be among the fastest in the world in 2025. But global trade tensions will make it hard to reach the country's 8% real GDP growth target, in our view.
• Vietnam also requires significant additional domestic and foreign capital for infrastructure development. And banking reforms are crucial to mitigate credit risks.

Cyber

29. Cyber Risk Insights: Cyber Catastrophe Bonds Offer Greater Scope For Risk Mitigation, March 17, 2025

• Cyber insurance demand is rising--prompting the potential for greater growth in the cyber insurance-linked securities (ILS) market.
• Several issues may constrain growth, including the lack of standardization in policy terms, limited investor education, and the lack of clarity surrounding the underlying drivers of risk.
• Evaluating the creditworthiness of cyber ILS requires a multifaceted approach, including a focus on regulatory risk, policy terms and conditions, and modeling requirements.

Decentralized finance

30. Cryptocurrency Is Growing Within U.S. State Reserves And Statewide Pension Plans, March 27, 2025

• U.S. states and statewide pension plans are increasingly considering cryptocurrencies (crypto), particularly bitcoin, as a reserve investment.
• So far, 17 states either allow or have introduced legislation to allow crypto as a reserve asset and 16 are proceeding toward including crypto investments in their statewide pension trusts.
• The recent creation of crypto exchange-traded funds (ETFs) and the rapidly evolving regulatory landscape may have increased interest in crypto as an investment by helping address some associated risks.

Economics

31. Economic Research: Asia-Pacific Economies Likely To Be Hit By U.S. Trade Tariffs, March 26, 2025

• Our screening exercise shows that several Asia-Pacific economies could face higher U.S. tariffs under the U.S. administration's new Fair and Reciprocal Plan that targets bilateral trade surpluses, tariff differentials and other "imbalances."
• The large degree of discretion embedded in the plan makes it hard to predict the outcome. But the criteria indicate Vietnam, Taiwan, India, Japan, South Korea, and Thailand may be on the radar for U.S. trade actions.
• If imposed, tariff hikes could hit hardest for Vietnam, Taiwan, Thailand, and South Korea, based on their economic exposures to the U.S.

32. Economic Outlook Asia-Pacific Q2 2025: U.S. Tariffs Will Squeeze, Not Choke, Growth, March 26, 2025

• While U.S. tariff hikes will hit China's economy, offsetting factors keep our 2025 growth forecast unchanged at 4.1%.
• Better growth at the end of 2024 will lift China's 2025 GDP gains; this year's growth target and fiscal stimulus are more ambitious than we had expected.
• While U.S.-led trade friction will weigh on the ex-China Asia-Pacific economies, we expect domestic demand momentum to mostly remain solid, generally leading to only modest downward revisions to GDP forecasts.
• Still, as the growth outlook softens and inflation is likely to stay moderate, central bankers will increasingly be willing to risk some currency depreciation and cut policy rates.

33. Economic Outlook Canada Q2 2025: Trade Tensions Disrupt Growth Improvement, March 26, 2025

• We expect Canada's real GDP growth of 1.7% in 2025 (annual average basis), which masks a sizeable deceleration in the quarterly growth profile as the year progresses. On a fourth-quarter over fourth-quarter basis, the Canadian economy is poised to expand by 1.3% in 2025 (compared with our previous forecast of 1.8%) after expanding by 2.6% in 2024.
• The lack of visibility over U.S. trade policy is likely to delay investment decisions, with negative implications for GDP and employment in Canada. We previously expected much slower immigration and labor force growth to contribute to a decline in the unemployment rate in the second half of this year, but with hiring now likely to be weaker than we previously assumed, our new forecast is that the unemployment rate will average between 6.6% and 7.0% throughout 2025.
• We anticipate the Bank of Canada will remain on course to steadily cut rates until they reach 2.00% by the end of 2025. Concerns about risks to the rising unemployment rate are likely to outweigh temporary cost-push inflationary pressures.
• The key risk for Canada's economy hasn't changed since our last forecast update. A 25% broad-based tariff on Canadian goods from the Trump administration for the rest of the year will bring the economy closer to a recession.

34. Economic Outlook Emerging Markets Q2 2025: Trade Policy Unknowns Dampen Investment, March 25, 2025

• Lack of visibility over U.S. trade policy is likely to delay investment decisions, with negative implications for GDP in most emerging markets (EMs) this year.
• The direct impact of tariffs will be modest in most major EMs outside of Asia and Mexico.
• However, if tariffs lead to slower growth in the U.S., other major advanced economies, and China, the knock-on effects in EMs could be substantial.
• As we learn more about the specifics of U.S. trade policy, we will also better understand its impact on EMs, but we believe the risks to our growth outlook are mostly to the downside.

35. Economic Outlook Eurozone Q2 2025: A World In Limbo, March 25, 2025

• We revised our eurozone GDP growth forecast for 2025 downward to 0.9%, from 1.2% previously, due to uncertainty and U.S. tariffs. However, we expect a substantial recovery from 2026, thanks to fiscal stimulus measures in Germany and the EU. For 2026, we now forecast GDP growth of 1.4%.
• The European Central Bank (ECB) could deliver its final rate cut of the year by June, when interest rates might decline to 2.25%. We expect rate hikes as early as the second half of 2026 because fiscal stimulus programs will push growth beyond its potential.
• The economic outlook is uncertain, which is why we have included alternative scenarios for the outcome of U.S. tariffs in this publication. In a severe tariff scenario, GDP growth in the eurozone could be limited to 0.5% in 2025 and 1.2% in 2026, with the ECB cutting interest rates more than once this year and raising them later than we currently expect.
• Trade uncertainty, potential failure to execute fiscal plans, and spillovers from the U.S. economy currently dominate the balance of risks. However, positive factors could tip the balance if the positive effects from fiscal stimulus programs exceed expectations or confidence improves rapidly.

36. Global Economic Outlook Q2 2025: Spike In U.S. Policy Uncertainty Dampens Growth Prospects, March 27, 2025

• Heightened U.S. policy uncertainty, mainly related to tariffs, is dominating the global macro narrative.
• Soft data such as confidence and sentiment have plunged, and U.S. market valuations have retreated. Activity and the hard data have held up so far, but all eyes are on U.S. consumption and employment.
• Our GDP growth forecasts have fallen since our previous round. This is driven by U.S. tariff effects and spillovers from a steeper decline in U.S. sequential growth. European growth is lower this year but will improve from 2026 on higher defense and infrastructure spending. China's outlook is stable.
• The risks to our baseline are firmly on the downside. We are watching the effects on demand from protracted U.S. policy uncertainty. Should these materialize, the result would be a material slowdown in growth.

37. U.K. Economic Outlook Q2 2025: Recovery In Consumption Slows As Inflationary Pressure Returns, March 25, 2025

• We have revised our expectation for U.K. economic growth down this year to 0.8% from 1.5% on the back of inflationary pressures, uncertainty over external demand, and tighter monetary policy.
• Weak export growth is set to continue as companies have seen higher input costs and a stronger currency erode their price competitiveness. The impact of tariffs on other economies is not yet clear.
• We expect the Bank of England to cut rates to 4% by the end of the third quarter, one rate cut less than in our last forecast, as it monitors the second-round effects of new inflationary pressures.
• Things are looking up for 2026, with regional growth picking up, rates cut by another 50bp, and inflation edging back to 2.5%.

38. Economic Outlook U.S. Q2 2025: Losing Steam Amid Shifting Policies, March 25, 2025

• The Trump administration's shifting policy mix is altering the economic outlook, with our assumptions reflected in a likely downshift in GDP growth to a 1.6% quarterly average in 2025. The balance of risks to our growth forecast is tilted to the downside.
• In turn, we forecast the unemployment rate will drift higher and peak at 4.6% by midyear 2026, with the public sector likely limiting payroll expansion, in contrast to significant contributions to jobs growth in the past two years.
• We project inflation will remain closer to 3.0% in 2025 as tariffs increase prices along the domestic supply chain and for end consumers.
• As a result, we expect one 25-basis-point federal funds rate cut for 2025, ending the year at 4.00%-4.25%.

39. U.S. Business Cycle Barometer: Increasing Likelihood Of A Slowdown, March 14, 2025

• There's an increasing risk that supply-side shocks from tariffs, decelerating immigration growth trends, and curbs on the federal government workforce will create a lasting negative feedback loop that weakens aggregate demand.
• Consumer sentiment and equity market sentiment have soured since February, and the manufacturing sector--which had seen early signs of a cyclical rebound--took a step back.
• The evolution of the hard data, by itself, points to low risk of a U.S. recession this year. However, given the rising risk of persistent supply shocks and negative sentiment, our subjective assessment is that there's a 25% probability of a U.S. recession starting in the next 12 months--about twice the unconditional recession probability in post-World War II history (13%).

Environmental, social, and governance

40. Sustainability Insights | Behind The Shades: Real Estate, March 31, 2025

• We typically assign a Light green shade to real estate with green building certifications or energy performance criteria that, in our view, imply the building is energy efficient.
• Due to high embodied emissions associated with construction, Dark green has so far been assigned only to renovation projects that improve energy performance and reduce emissions from materials. Medium green is assigned to construction projects that demonstrate progress in reducing such emissions, alongside considerations for energy and physical climate risks.
• Most real estate activities not covered by green financing frameworks would typically be assessed as Yellow or Orange. Such buildings show relatively high energy use, potential for fossil fuel heating, and/or their construction is emission intensive.
• Due to the wide variation in taxonomies and certifications, and the lack of standardized, regionally comparable data in the real estate sector, our analysis of the local context is essential to our Shades of Green assessment.

41. Sustainable Finance Spotlight: Climate Transition Assessments and Second Party Opinions, March 25, 2025

• Since we published our Shades of Green-integrated analytical approach for Second Party Opinions (SPOs) in 2023, we produced 227 SPOs by year-end 2024; among them, 38 were sustainability-linked SPOs. We also have more than 535 SPOs under the previous approach.
• Green SPOs still dominate the financing frameworks we reviewed, in line with sustainable debt issuance volumes.
• We have published five Climate Transition Assessments (CTAs), leveraging our Shades of Green approach, since we launched this sustainability product in July 2024.

Financial institutions

42. Nonbank Financial Institutions' Profitability Will Be Tested In 2025, March 20, 2025

• We expect our ratings on nonbank financial institutions to remain relatively stable in 2025, though highly uncertain credit conditions will test profitability.
• Higher tariffs might worsen already high, sticky inflation and slow--or reverse--the descent in policy interest rates, potentially causing uncertainty around fincos' growth opportunities, straining asset quality, and raising funding costs.
• The consistency of funding through the cycle is essential to the industry's ratings stability, given most funding is from wholesale sources.

43. Hong Kong Banks Have Defenses Against Commercial Real Estate Strains, March 27, 2025

• Hong Kong banks' profits and asset quality face further pressure from their exposures to commercial real estate (CRE).
• Banks, particularly the larger players, should be able to manage the strains and maintain resilient credit profiles. This is due to their diversified loan portfolio, adequate collateral, and reasonable underwriting standards.
• Small and midsize banks are likely to experience greater strain due to their higher exposure to CRE investment loans and, potentially, to smaller and leveraged developers and investors.

44. Indian Microfinance Will Benefit From A Rain Check On Growth Plans, March 26, 2025

• Tightening regulations and stricter underwriting standards in Indian microfinance will rein in growth plans for sector lenders and defuse risk buildup.
• However, these same trends will weigh on asset quality in fiscal 2026 given many clients rely on new loans to repay old ones.
• Funding stress could lead to shake-outs in this volatile, but sometimes highly profitable, lending niche.

45. Banking Brief: High Capital Levels A Double-Edged Sword For Singapore Banks, March 19, 2025

• Singapore banks are likely to cut back on their oversized capital buffers. Any adjustments will be based on loan growth and opportunities.
• The boost to capital ratios following Basel reforms in July 2024 is healthy but very high levels could indicate a bank is not effectively using capital for growth and expansion. The banks have set in motion short to mid-term plans to manage this.

46. Taiwan Banks Could Withstand A Potential Property Downturn, April 1, 2025

• We expect Taiwan banks will rein in home-mortgage lending after last year's bump on the introduction of a government-led preferential housing loan program.
• Banks have manageable exposure to property-related lending and adequate reserve in the event of a market downturn.
• The sector would avoid a major hit capital and earnings even if property-related NPLs rose materially under our stress scenarios.

Insurance

47. Credit FAQ: How We Use IFRS 17 Accounting Metrics In Our Analysis Of Insurers And Re-Insurers, March 18, 2025

• The transition to International Financial Reporting Standards (IFRS) 17 on Jan. 1, 2023, was a significant milestone for many of the insurance entities rated by S&P Global Ratings.
• However, as expected, there were no material effects on their credit quality. In a few cases, our analysis was aided by additional transparency around insurance reserve redundancies and future profits from the provision of the contractual service margin (CSM) and risk adjustment (RA), especially where there had been a lack of transparency under IFRS 4.
• We also note that the first full year of results under IFRS 17 brought a variety of approaches under the principles-based standard, and varying levels of prudence and aggressiveness in accounting.

48. Credit FAQ: What A Hypothetical Russia-Ukraine Ceasefire Would Mean For Insurers In Kazakhstan And Uzbekistan, March 27, 2025

• Diplomatic efforts to reach a ceasefire agreement between Russia and Ukraine are ongoing. A potential ceasefire could have positive and negative long-term effects on insurers in the region.
• S&P Global Ratings notes a high degree of uncertainty about the extent, outcome, and consequences of the Russia-Ukraine military conflict. The exact scope and/or timing of the possible ceasefire or any other solution to the conflict are difficult to estimate at this point.

49. Taiwan Life Insurance Sector: Operating Surplus To Remain Volatile in 2025, March 25, 2025

• An insurer's operating surplus constitutes four parts according to their source: interest surplus, mortality surplus, loading surplus and other surplus.
• Interest surpluses remain volatile and are the key driver behind profitability.
• The sector faces a shrinking mortality buffer to absorb market volatility amid rising morbidity loss experience risk.
• Loss experience for medical insurance shows a significant worsening trend compared with other health insurance products.
• New business inflow from products with inherent tools (e.g., claim payment limit, non-guaranteed renewal, adjustable premium rate) for the insurer to mitigate future unfavorable experience could help to dilute loss experience and decelerate the shrinking trend for mortality surplus.

Leveraged finance

50. Market Insights: Sector Intelligence | Leveraged Finance: European Summary Report, March 24, 2025

• The European default rate began to decline in early 2025, with year-to-date defaults falling to four from eight in the same period last year. However, the default rate remains historically elevated due to increased distressed exchanges and debt restructurings. February 2025 marked the first month since September 2022 in which European monthly defaults surpassed those in the U.S. by both number and total defaulted debt.
• As of Jan.31, 2025, the number of 'B-' rated credits reverted to pre-pandemic levels, while the number of European credits rated 'CCC+' and below decreased to 45 but remains elevated, representing about 8.2% of speculative-grade issuers. Average European speculative-grade recovery rates decreased slightly to 58% in the fourth quarter of 2024, as a result of predominantly first-lien-only structures for new issuance.
• Speculative-grade debt maturing in 2025 declined by 40%; it now represents only 18% of the total for the year and remains below one-third of nonfinancial maturities through 2027. This is because of supportive financing conditions in 2024, enabling leveraged finance borrowers to effectively address near-term maturities. Telecommunications is the sector with the most speculative-grade debt maturing through 2029, at $155.6 billion.

Media and telecom

51. Gauging The Business Risks Of Local U.S. TV Broadcasters (2025 Update), March 27, 2025

• The two primary contributors of local TV broadcasters' revenue will modestly decline over the next few years.
• Despite secular pressures facing local TV broadcasters, our ratings outlook for the sector is largely stable following several negative rating actions in 2024.
• Companies with higher ratings have significantly stronger leverage and cash flow profiles.
• Local TV broadcasters with greater household reach, a higher percentage of retransmission revenue, and higher-ranked stations and duopolies have better competitive positions and operating efficiencies.

Metals and mining

52. China Commodities Watch: Gold Rush Will Strengthen Miners, March 18, 2025

• We expect the rated Chinese gold companies to deliver robust operating performance over the next two years. Strong gold prices and higher output will boost revenue and earnings.
• Healthy operating cash flow will increase financial buffers. S&P Global Ratings estimates miners can withstand a 20% fall in gold prices from our base case without breaching downside triggers, according to our scenario tests.
• Miners need organic and inorganic growth to achieve their expansion plans. This requires sizable capital investments. We expect them to exercise financial discipline and time these targets flexibly based on market conditions.

53. Steel And Aluminum Tariffs Boost Prices For U.S. Metal Producers, Costs For Manufacturers, March 14, 2025

• Steel tariffs in the U.S. should support the credit quality of American producers with higher domestic prices, volume gains at the expense of imports, and stronger profitability.
• Aluminum tariffs boost the profitability of the four smelters operating in the U.S., with only modest credit benefit to any corporates because of modest prospects for more domestic output.
• Steel prices in the U.S. are up 25%, and the U.S. Midwest aluminum premium hit an all-time high before tariffs were implemented, so profitability downstream already depends on higher prices for fabricated products.
• Comparative advantage matters: The U.S. has large resources of iron, coal, scrap, and spare capacity to make more steel profitably. But aluminum smelters in the U.S. have been closing for decades, requiring cheap electricity and years of capital investment to displace imports.
• Imports accounted for 22% of U.S. steel consumption in 2024 and 88% of aluminum.

Private markets

54. Private Equity Draws On Continuation Funds To Tackle Liquidity Drought, March 31, 2025

• Private equity is turning to continuation vehicles to unlock liquidity for mature funds amid slow exits.
• Estimates suggest the volume of continuation fund deals comfortably surpassed $50 billion in 2024.
• We expect private equity will continue ramping up its use of continuation funds to support liquidity by using debt to establish and manage these funds. This will increase long-term leverage and financial risk in the sector.

Public finance

55. Credit FAQ: Can China's Local Governments Still Afford To Support Their SOEs?, March 24, 2025

• Debt has been rising for China's local governments as well as for many of the state-owned entities (SOEs) they control.
• These double burdens have changed the dynamics for the likelihood of SOEs receiving extraordinary government support.
• S&P Global Ratings expects a gradual shift toward more differentiation will continue, with the smaller and uncompetitive commercially driven SOEs likely to see diminishing support over time.

56. Hong Kong's Property-Linked GREs Aim For Growth: A Comparative Analysis Of The City's Government Related Entities, March 24, 2025

• We believe property related-income will continue to be essential to a set of Hong Kong public and government-related entities (GREs) and their ability to carry out essential public services.
• The government has strong influence over these entities through its majority ownership, controlling both the boards and the business planning of the entities.
• Even as the entities' property-related income weakens amid a property downturn in the city, these companies still have to manage sizable capital expenditure (capex) and new investments; many will turn to external funding.
• We believe the Hong Kong government (AA+/Stable/A-1+) will provide timely support in the case of financial stress; the degree of support will likely vary, depending on the importance of each entity to the government.
• Among these peers, the Urban Renewal Authority and MTR Corp. Ltd. would almost certainly receive extraordinary support from the government in a stress scenario; accordingly, we equalize the ratings and outlooks on the entities with those of the government.

57. U.S. Brief: Energy As A Service Is Off-Balance-Sheet, But On-Credit For Not-For-Profit Health Care Providers, March 31, 2025

• U.S. not-for-profit health care providers are more frequently entering into energy asset concession or lease arrangements as a means of catching up on deferred infrastructure spending while preserving balance-sheet flexibility.
• While not-for-profit health care providers are increasingly embracing Energy as a Service (EaaS) to protect their balance sheets, we believe the arrangements could carry credit risks.
• S&P Global Ratings has maintained a consistent analytical approach to off-balance-sheet obligations when assessing credit risk. In our view, the provider's unconditional pledge to make annual payments, as well as the corresponding liability, are factors capable of diminishing credit quality.

58. CreditWeek: How Could Deep Federal Spending Cuts Affect U.S. Local Governments And Schools?, March 27, 2025

• Sudden changes to—or uncertainty about—the path of federal policy could cause credit instability for some U.S. local governments.
• More specifically, President Trump's plan to eliminate the Department of Education clouds the outlook for federal funding of public K-12 school districts.

59. Academic Medical Centers And The Intersection Of U.S. Not-For-Profit Higher Education And Acute Health Care, March 25, 2025

• The U.S. not-for-profit health care and higher education sectors overlap and intersect, in particular, in many academic medical centers (AMCs).
• AMCs tend to be rated higher than hospitals and health systems without academic partners due to their essentiality, high demand, and generally more ample financial resources, often with some benefits of higher education partnership and diversification.
• While operating pressures are easing for many hospitals, the pace of recovery is uneven and AMCs and related higher education institutions are similarly affected by this variability.
• AMCs' exposure to regulatory and legislative adjustments could increase their risk in the next couple of years, with both universities and acute health care providers facing uncertainty around evolving federal policies.

60. U.S. Public K-12 Schools Credit Quality Is Not Currently At Risk From Proposed Changes To Department Of Education, March 24, 2025

• S&P Global Ratings does not expect President Trump's recent executive order that would eliminate the U.S. Department of Education (DOE) to result in widespread credit deterioration or downgrades, but some kindergarten to 12th-grade (K-12) education providers may experience operating pressure.
• Public K-12 schools currently receive the majority of their annual revenues from state and local funds.
• All 50 states operate their own departments of education and, therefore, determine how school operations are funded. Should federal funding to K-12 schools decrease, we expect that each state will determine its response to the shifts.
• It's uncertain how the details of Trump's executive order will unfold and what that would mean for federal funding to local education agencies. If there are significant federal aid cuts or delays, liquidity--particularly for those schools or districts more dependent on federal dollars--would become increasingly important.

61. U.S. States Brace For Potential Medicaid Funding Gaps, March 20, 2025

• Federal Medicaid policy and funding uncertainty looms and threatens to disrupt fiscal progress and complicate U.S. states' financial forecasting in the fiscal 2026 budget cycle.
• Possible federal actions as part of the budget reconciliation process could shift as much as $880 billion of Medicaid and the Children's Health Insurance Program (CHIP) costs to states over the next 10 years, costs that we believe would be difficult for any state to absorb without material changes in spending or program eligibility.
• Medicaid is the largest expenditure (inclusive of state and federal funding) in states' budgets. Although the magnitude and implementation period of potential federal changes are critical to states' ability to make budget adjustments, we believe states generally possess good autonomy to implement changes to their Medicaid programs, which could help them manage a shift in expenditures.
• For some states, decisions to change Medicaid benefits are more than just financial considerations: they could affect political, social, or broader economic outcomes.

62. Swirling Economic Winds Keep Mineral-Producing U.S. States On Their Toes, March 19, 2025

• In recent years, active financial management and budgetary discipline conditioned by previous oil and gas price swings have preserved, and in some cases strengthened, mineral-producing U.S. states' overall credit quality.
• Nevertheless, potential policy shifts or miscues could test management teams' ability to adapt should broader economic conditions weaken in tandem with an energy sector slowdown.
• With economic growth trends normalizing, steady and stable is the sentiment from most mineral-producing states in our survey for 2025, though some states are expected to lag their peers by 2026.
• U.S. mining sector employment remains below levels from a decade ago despite a healthy uptick in mining activities following the pandemic-induced shock, but we don't expect meaningful gains in the near term based on short-term production forecasts and current sector productivity.

63. U.S. Public Finance Credit Ratings Are Typically Resilient To A Federal Government Shutdown, March 18, 2025

• The last government shutdown occurred in late 2018 and early 2019. Since then, bipartisan agreements have been struck, in many instances at the last minute, to fund the government.
• When a shutdown occurs, the most immediate exposure for U.S. public finance issuers is principal and interest payments on debt issued by state or regional agencies that is secured by federal revenue.
• Although a longer shutdown could introduce budgetary pressure as funding and reimbursement delays flow down to public finance entities, even the last shutdown did not result in negative credit events.

Real estate

64. Real Estate Monitor: Tariffs And Market Volatility Add Pressure To Real Estate Sector, March 26, 2025

• Higher tariffs and recent market volatility will have a negative economic effect on the U.S. real estate sector.
• We expect the implementation of tariffs will constrain the building materials and homebuilding sectors more than it will the real estate services, finance company, and operator sectors given their exposure to key construction products subject to tariffs such as lumber, steel, aluminum, and gypsum, as well as finished products such as cabinets and appliances.
• Higher costs will likely contribute to margin pressure for homebuilders and building materials companies as the ability to pass through cost increases could be limited by weaker consumer sentiment and elevated interest rates.

Sovereigns

65. WAEMU Sovereigns Can Weather Mounting Global Geopolitical And Trade Risks, March 31, 2025

• Rising global geopolitical tensions and tariffs, uncertainties regarding U.S. policies on the African Growth Opportunity Act (AGOA) and USAID, challenges related to security, climate-related events, as well as volatile commodity prices, imply increasing financial and economic risks to countries on the African continent.
• However, sovereigns in the West African Economic and Monetary Union (WAEMU) seem to be less directly exposed to these risks than peers. Moreover, their foreign currency reserves, low inflation, as well as relatively diversified economies and benefits of WAEMU membership, represent an adequate buffer in our view.
• Therefore, we still expect that, on average, WAEMU sovereigns will outperform their peers through 2027, with Senegal the only one in the monetary union for which our rating outlook is negative, due to idiosyncratic reasons.

Structured finance

66. EMEA Structured Finance Chart Book: March 2025, March 21, 2025

• Private credit investment vehicles are diversifying beyond direct lending to include securitizations, fund finance facilities, and real assets, such as infrastructure and commercial real estate.
• Israel's new securitization law will support the development of the Israeli RMBS market, and we expect to see further transactions in due course.
• The global structured finance default rate more than doubled to 2.7% in 2024 from 1.3% in 2023 as stresses in the U.S. RMBS and European CMBS sectors took their toll.

67. CLO Spotlight: Good Things Come In Small Packages: A Short Primer On Middle Market CLOs, March 27, 2025

• Middle market CLOs have been a fast-growing part of the U.S. CLO market, with issuance of new transactions breaking records in three of the past four years.
• There are some key differences between broadly syndicated loan CLOs and middle market CLOs, including issuer motivation, collateral characteristics and transaction structures, among others.
• This article outlines these differences, as well as themes we hear during our discussions with investors, issuers and other market participants, and what we see in middle-market CLO indenture provisions.

68. Norwegian And Finnish Covered Bond Market Insights 2025, March 21, 2025

• Easing interest rates will support Finnish and Norwegian households' sound debt servicing capacity. In both markets, we project house prices to recover this year.
• In Norway, we expect amendments to lending regulations to support the housing market and house price growth.
• In Finland, we do not expect challenges faced by real estate funds to spill into the covered bonds but it may delay house price recovery.
• In our view, healthy rating buffers in most covered bond programs will continue to support rating performance.

69. SF Credit Brief: CLO Insights 2025 U.S. BSL Index: U.S. CLO 2.0 Tranche Defaults And Recoveries; ‘CCC’ Buckets Edge Upward While Average Loan Price Declines, March 28, 2025

• Upgrades and downgrades on leveraged loan issuers have been relatively balanced in recent months, but a handful of U.S. broadly syndicated loan (BSL) collateralized loan obligation (CLO) obligors--several of them widely held--have seen their ratings lowered into the 'CCC' category.
• Many BSL CLOs have experienced an uptick in 'CCC' buckets, and our CLO index has experienced an increase to 6.2% on average, a level not seen since May 2024.
• Currently, about 22% of CLOs in our BSL CLO index have breached the 7.5% 'CCC' threshold. Additionally, several issuers have also recently experienced a downgrade to 'CC', 'SD', or 'D', causing CLO default exposures to rise to a recent high as well.

70. U.S. Structured Finance Chart Book: March 2025, March 21, 2025

• Private credit investment vehicles are diversifying beyond direct lending investments to include securitizations, fund finance facilities, and real assets, such as infrastructure and commercial real estate (CRE).
• As privatization of the government-sponsored entities (GSEs) has resurfaced as a potential policy objective, we are monitoring the effect it could have on credit risk transfer (CRT) ratings.
• Early-stage mortgage delinquency rates have increased from their lows in 2021, and the role of collectors will be critical for servicers as these delinquencies rise.

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We published the latest "The Ratings View", which spotlights key developments and asset class trends on a weekly basis, on March 27.

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We published the latest "This Week In Credit", our data-driven research snapshot that provides forward-looking, actionable insights on weekly market-moving credit trends, on March 31.