(Editor's Note: This research roundup features a curated compilation of the key takeaways from our most up-to-date thought leadership. This edition has been updated from the last roundup on June 13, 2025.)
This report does not constitute a rating action.
Key Takeaways
- Turbulence around the Middle East situation is complicating the geopolitical landscape. Key transmission channels include higher oil prices and a weaker macro-outlook. These, and an investor flight to quality, could undo benign credit conditions in Asia-Pacific.
- Facing growing unilateralism and a more geopolitically fractured world feels a toxic brew, especially in Europe. However, with so much in flux on global trade and security the default for governments, businesses, and households has been to hunker down and deal with the day-to-day reality. This has paid dividends as European economic and business performance--and to a lesser extent financial market performance--has proved resilient (so far) to the U.S. trade turmoil and wars in Europe and the Middle East.
- Credit conditions in emerging markets (EMs) have held up better than expected over the last quarter, despite uncertainty about trade policy and its impact on global growth. This is due to tariffs having a smaller impact on growth than many feared and a weaker dollar, which is attracting capital flows to EMs.
- Tariff-related concerns continue to cloud the outlook for North American credit conditions, with the reconciliation bill working its way through Congress adding to uncertainty. U.S. involvement in the Israel-Iran conflict—and the fragility of a ceasefire— heightens the risk that tensions will escalate and disrupt the capital and global energy markets, and economic activity.
In this edition of Instant Insights, our key takeaways from recent articles include the following: our latest regional credit conditions reports covering Asia-Pacific, emerging markets, Europe, and North America, regional economic outlooks covering global, Asia-Pacific, emerging markets, the Eurozone, the U.S., the U.K., and Canada, Asia-Pacific sector roundup, the impact of the Israel-Iran escalation on regional sovereigns, banks, insurers, and corporates, and the credit implications of global aging. We dive into tariff’s credit implications across asset classes, the global tariff tracker update, European chemical sector, convertibles as obligations for unicorns and private credit’s expansion in Asia-Pacific, East Asian wind power producers, Australian retail operators, social bonds, Shades of Green analysis in the power sector, Carbon Capture and Sequestration, banks in Europe and Japan, new rules on gold-backed loans in India, French insurance sector, as well as access to affordable health care services and the impact of reducing drug prices on pharmaceutical’s credit quality in the U.S. We also feature the speculative-grade default rate forecast for global and Asia-Pacific, the global corporate default tally, the resilience of container shipping ratings, real estate monitor, Panama’s credit quality, global covered bond insights, leveraged finance and covered bonds in Europe, project finance CLOs in Asia-Pacific, structured finance chart books for EMEA and the U.S., regulatory scrutiny in private markets, social housing producers and public universities in the U.K., and states’ fiscal budgets, charter schools, and consumer loan ABS 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. Credit Conditions Asia-Pacific Q3 2025: An Unsettling Environment, June 25, 2025
Eunice Tan, Singapore, +65-6530-6418, eunice.tan@spglobal.com
- Unsettling conditions: Turbulence around the Middle East situation is complicating the geopolitical landscape. Key transmission channels include higher oil prices and a weaker macro-outlook. These, and an investor flight to quality, could undo benign credit conditions in Asia-Pacific. Despite significant tariff uncertainty, negative rating actions have been limited due to credit resilience of rated issuers and continuing financing access. However, uncertainty lurks underneath.
- U.S.-China détente continues: Tariffs will hurt Asia-Pacific growth prospects. Higher export costs will eat into margins, and weaker sentiment will limit spending by businesses and households. Nonetheless, following the pause in China-U.S. tariffs, we have reverted our forecasts for Asia-Pacific's GDP growth to 4.1% in 2025 and 2026, from 4.5% in 2024.
- Expanding concentric circles of tensions: The volatile Middle East situation and protracted Russia-Ukraine conflict could renew financial market and currency swings. Shifting U.S. policy and rhetoric on trade and foreign affairs may foreshadow long-term changes in the geopolitical landscape. We see the geopolitical risk trend as worsening.
- Deepening cracks: The confluence of credit headwinds will test credit fundamentals across borrowers, distinguishing winners from losers. In addition, the complications of unprecedented geopolitical conditions and an evolving operating landscape (from climate change and technological advancements) could push some to crack under pressure.
2. Credit Conditions Emerging Markets Q3 2025: Weak Dollar Cushions Turbulence, June 25, 2025
Jose M Perez-Gorozpe, Madrid, +34-914-233-212, jose.perez-gorozpe@spglobal.com
- Credit conditions holding up: Credit conditions in emerging markets (EMs) have held up better than expected over the last quarter, despite uncertainty about trade policy and its impact on global growth. This is due to tariffs having a smaller impact on growth than many feared and a weaker dollar, which is attracting capital flows to EMs.
- Indirect effects of tariffs: In our baseline, we expect credit conditions in EMs to continue to face significant headwinds, especially as the indirect effects of tariffs, namely slower investment and global growth, become more evident.
- Significant downside risks: Along with uncertainty about U.S. trade policy, downside risks to our outlook include the implications of a further escalation of the conflict in Iran, rising long-term government yields, and fiscal challenges across several EMs.
3. Credit Conditions Europe Q3 2025: Credit Rides The Storms, June 25, 2025
Paul Watters, CFA, London, +44-20-7176-3542, paul.watters@spglobal.com
- Overall: Facing growing unilateralism and a more geopolitically fractured world feels a toxic brew, especially in Europe. However, with so much in flux on global trade and security the default for governments, businesses, and households has been to hunker down and deal with the day-to-day reality. This has paid dividends as European economic and business performance--and to a lesser extent financial market performance--has proved resilient (so far) to the U.S. trade turmoil and wars in Europe and the Middle East.
- Risks: The lack of clarity on how and when trade negotiations with the U.S. will be resolved has implications for growth, supply chains, and corporate financial performance and remains a high risk. Beyond that, several other risks to economic growth persist, including geopolitical tensions (remaining high in the Middle East) that could disrupt the oil market, and uncertainties around the implementation of fiscal plans in Europe.
- Ratings: Banks retain a stable outlook based on solid capitalization and good profitability. Within nonfinancial corporates, diverging credit quality performance between investment-grade and speculative-grade issuers is evident, with the greatest vulnerability noted within speculative-grade, tariff-targeted, and energy-intensive sectors.
4. Credit Conditions North America Q3 2025: Still More Clouds Than Clarity, June 25, 2025
David C Tesher, New York, +1-212-438-2618, david.tesher@spglobal.com
- Tariff-related concerns continue to cloud the outlook for North American credit conditions, with the reconciliation bill working its way through Congress adding to uncertainty. U.S. involvement in the Israel-Iran conflict—and the fragility of a ceasefire— heightens the risk that tensions will escalate and disrupt the capital and global energy markets, and economic activity.
- The volatility that swept through financial markets in the first months of the Trump administration could return amid heightened geopolitical strife, the approaching end of U.S. tariff pauses, and the fate of the tax and spending bill.
- For now, spreads on corporate debt remain narrow—well off the highs reached in the aftermath of the White House’s April 2 announced tariffs.
Autos
5. China Auto Brief: Increasing Scrutiny Can't Stanch Margin Decay, June 11, 2025
Claire Yuan, Hong Kong, 852-2533-3542, Claire.Yuan@spglobal.com
- The brutal price war in China's auto industry is obliterating profitability.
- This undermines R&D spending and puts supply chains at risk.
- Regulatory intervention offers some respite, but only industry consolidation can restore margins to sustainable levels.
6. CreditWeek: Will Tariffs Total Automakers Credit Quality?, June 6, 2025
Vittoria Ferraris, Milan, + 390272111207, vittoria.ferraris@spglobal.com
- The uncertainty surrounding the unfolding trade conflict complicates strategic responses from auto original equipment manufacturers (OEMs) and their suppliers.
- The outcomes of the start-stop nature of ongoing tariff policies and trade tensions will affect credit quality across the global automotive sector—prompting automakers firstly and suppliers later on to absorb extra costs and putting profit margins and cash flow generation under pressure.
Chemicals
7. European Chemicals Sector Pulse: Financial Resilience Amid Demand Weakness, June 12, 2025
Oliver Kroemker, Frankfurt, 49-693-399-9160, oliver.kroemker@spglobal.com
- Performance among Europe's largest chemicals companies was mixed in the first quarter of 2025. Industrial gas players outperformed the sector, while commodity players continued to see volume and margin pressure.
- However, companies' 2025 guidance remains broadly intact as they lean on cost-cutting, pricing discipline, and regional production to offset sluggish demand.
- While regional production limits the direct effects of U.S. trade tariffs, the indirect effects--including customer caution and reduced visibility on demand--are significant and growing.
- A negative outlook bias is likely to persist in the speculative-grade rating category absent a material improvement in demand fundamentals or a reduction in macroeconomic and geopolitical risks.
Corporates
8. Credit FAQ: Why Convertibles Could Become Obligations For Asia-Pacific Unicorns, June 26, 2025
Shawn Park, Singapore, 65-6216-1047, shawn.park@spglobal.com
- The Convertible Preference Shares (CPS) hybrid fundraising model is increasingly prevalent as more unicorns enter the Asia-Pacific market.
- We usually treat CPS as debt when evaluating a company's finances, since their conversion into shares often depends on market conditions and investor discretion.
- However, we recognize that for unicorns--early-stage, fast-growing companies--CPS can have equity-like qualities. Unlike typical lenders, CPS investors may be more focused on growth than on getting repaid quickly. And because these instruments seldom require immediate cash payments, it's important to consider them alongside the credit rating on a company.
Credit trends and market liquidity
9. Default, Transition, and Recovery: The Asia-Pacific Speculative-Grade Default Rate Could Rise To 2% By March 2026, June 12, 2025
Nick W Kraemer, FRM, New York, + 1 (212) 438 1698, nick.kraemer@spglobal.com
- Strains on financing conditions, economic output, and corporate planning as a result of increased tariff uncertainty could raise the Asia-Pacific (APAC) default rate to 2% through March 2026.
- If the current tariff pauses and levels last, we could see defaults remain low and in line with current levels in our optimistic outcome of zero by next March.
- However, if the final tariff levels swing back to their higher, pre-pause levels, or negotiations fail to reach conclusion, an uptick in uncertainty later this year could lead to our pessimistic projection of a 4.25% default rate through next March.
- Recent legal challenges to many of the Trump administration's tariffs have put an additional layer of uncertainty into the mix, with an even less clear view on possible outcomes than existed previously.
10. Default, Transition, and Recovery: Corporate Defaults In May Reach Highest Level Since October 2020, June 18, 2025
Ekaterina Tolstova, Frankfurt, +49 173 6591385, ekaterina.tolstova@spglobal.com
- Monthly corporate defaults surged to 19 in May 2025. This is more than double the eight reported in April and is the highest monthly count since October 2020.
- The year-to-date total is 53, which remains lower than the 69 in 2024 and close to the five-year average of 54, with all major regions still under last year's levels.
- The number of defaulted issuers due to missed payments rose to eight, up from zero in April, while ten of the 19 were first-time defaulters. The latter primarily came from the media and entertainment, health care, and consumer products sectors, which collectively account for 43% of year-to-date defaults.
- Defaulted debt more than doubled in May to $13.8 billion, the highest since the start of 2025, mainly concentrated in the consumer products, high technology, and telecommunications sectors.
- We expect speculative-grade corporate default rates to reach 4.0% in the U.S. and 3.6% in Europe by March 2026. However, if uncertainty around tariff levels persists, these could reach 5.5% in the U.S. and 5.25% in Europe.
11. Global Tariff Tracker: Rating Actions As Of June 13, June 17, 2025Global Tariff Tracker: Rating Actions As Of June 13, June 17, 2025
Credit Markets Research, New York, 1-212-438-1396, cmr@spglobal.com
- There have been 30 tariff-driven rating actions as of June 13, 2025.
- Rating actions include nine downgrades (two accompanied by a negative outlook), five CreditWatch negative placements, and 16 outlook revisions to negative.
- Actions are primarily concentrated in the consumer products (13) and retail/restaurants (four), automotive (three), and chemicals, packaging and environmental services (two) sectors, with the remainder spread evenly across other sectors. Of the 30 issuers affected, 24 are based in North America, four are from Europe, and two are from Asia Pacific.
12. Default, Transition, and Recovery: Global Speculative-Grade Corporate Default Rate To Rise To 3.75% By March 2026, June 12, 2025
Nick W Kraemer, FRM, New York, + 1 (212) 438 1698, nick.kraemer@spglobal.com
- We expect the global speculative-grade default rate to rise to 3.75% through March 2026, from 3.25% as of this March.
- This projection is based on our various regional default forecasts, which are all being influenced by the unfolding global tariff situation and the resultant risks and uncertainties.
- We believe that regardless of the outcomes of recent pauses, higher tariffs will be a staple of the global trade environment moving forward.
- For now, the main risk to our baseline assumptions is if current pauses ultimately result in noticeably higher tariff levels than are in place currently, which would have a significant direct and indirect impact on many speculative-grade borrowers and their industries.
Cross sector
13. Asia-Pacific Sector Roundup Q3 2025: Tariff Uncertainty To Weigh On Sector Prospects, June 25, 2025
Eunice Tan, Singapore, +65-6530-6418, eunice.tan@spglobal.com
- The lagged impact of tariffs on demand and revenues could hit Asia-Pacific sectors in the second half of 2025, given "front-loading" of exports in the first half.
- A weak dollar would compound stresses by hitting export competitiveness (e.g., for the auto, steel and technology sectors).
- Greater geopolitical dissonances could sour financing conditions, straining some borrowers' liquidity. Governments may increase defense spending and deploy stimulus to support their economies.
- The net rating outlook bias deteriorated to -4% in May 2025 (March 2025: -2%), on more negative outlooks in auto, metals and mining, oil and gas, and technology. Tariffs and dollar weakness could weigh more on these sectors.
14. Private Credit Penetrates Asia-Pacific Securitization Markets, June 16, 2025
Erin Kitson, Melbourne, 61-3-9631-2166, erin.kitson@spglobal.com
- Private credit's impact on Asia-Pacific securitization is more pronounced in markets with greater issuer diversity.
- Private credit's expansion is providing new sources of funding to securitization issuers in markets such as Australia, enabling greater scale and product variety, in our view.
- Continued growth in private credit and its spillover to Asia-Pacific securitization markets will likely influence new issuance trends, asset types and the risk profiles of underlying loan portfolios.
15. Policy Brief: China Aims To Put Market Back At Center Of Economy, June 9, 2025
Chang Li, Beijing, + 86 10 6569 2705, chang.li@spglobal.com
- In an era of heightened tariffs and economic nationalism, China is talking about free markets.
- Beijing wants to increase market pressures to spur companies toward greater efficiency and innovation.
- Private firms will be given a freer hand, and highly indebted SOEs that don't make the cut may be allowed to fail.
16. Emerging Markets Monthly Highlights: Global Tensions, Local Resilience, June 11, 2025
Elijah Oliveros-Rosen, New York, +1-212-438-2228, elijah.oliveros@spglobal.com
- A weaker U.S. dollar will support disinflation across Emerging Markets (EMs), with the median EM currency up 7% year-to-date. Lower prices for imported goods in local currency, alongside subdued oil prices, will be main drivers of slower inflation in several EMs. This gives EM central banks more space to lower interest rates after years of significant monetary tightening.
- EM-U.S. benchmark spreads narrowed across most emerging markets, as the recent rise in U.S. 10-year government yields did not prompt similar moves in EM counterparts—potentially signaling robust investor appetite toward developing economies. However, a historical analysis shows this is not without precedent.
- Number of risky credits drops amid market slowdown. Following the upward revision of Argentina’s transfer and convertibility assessment, the number of ‘CCC+’ and lower rated issuers in EMs fell to nine from 15. This pool of entities did not issue debt in February-April 2025, indicating the sharp rise in borrowing costs triggered by the tariff-related market turmoil, as well as a manageable maturity schedule.
- EM benchmarks and corporate yields narrowed in May, while the number of defaults accelerated, with three Brazilian issuers defaulting in the month, bringing the EM year-to-date count to four. Market activity rose notably in Saudi Arabia (Aramco) and Colombia (Grupo Nutresa). However, issuance was sluggish in Brazil, Mexico, and Malaysia, and it decreased in Greater China, which posted a 25% decrease from April.
17. White Paper: Credit Implications Of Global Aging: A Complex Interplay, June 23, 2025
Bruce Thomson, New York, 1-2124387419, bruce.thomson@spglobal.com
- Aging populations, like other global megatrends such as increasing digitalization, are gradually reshaping our world, and often in unpredictable ways, as we describe in our White Paper: Assessing How Megatrends May Influence Credit Ratings, published April 18, 2024.
- Global aging, typically stemming from declining birth rates and longer life expectancies, is a measurable trend in most geographies.
- Yet it's difficult to predict the likely credit impacts, how material they may be, and when they might unfold. Some credit impacts have already emerged while others may take several years.
18. Navigating Tariffs' Credit Implications Across Asset Classes, June 17, 2025
Pierre Georges, Paris, 33-14-420-6735, pierre.georges@spglobal.com
- In response to uncertainty from tariffs and trade tensions, S&P Global Ratings developed a framework to analyze potential scenarios, outcomes, and identify areas of credit risk.
- Issuer-specific characteristics, rather than global sector trends, are likely to spur short- to medium-term shifts in creditworthiness that directly result from tariff policies.
- Issuers with complex global supply chains and revenues that depend on discretionary spending could come under pressure earlier than others from direct tariff effects. Entities exposed to U.S.-China trade or that have significant near-term refinancing needs could be most vulnerable to tariff-related impairments.
- The duration and levels of tariffs could result in weaker macroeconomic conditions that eventually weigh on more sectors, to varying degrees. We have identified asset classes that are likely to be first affected in that scenario.
19. CreditWeek: How Could The Israel-Iran Escalation Stress Sovereigns, Banks, And Corporates?, June 19, 2025
Benjamin J Young, Dubai, +971 4 372 7191, benjamin.young@spglobal.com
- Developments in the Israel-Iran conflict have heightened downside risks to sovereign, bank, and corporate credit in the Gulf region.
- The transmission channels that could pressure regional credit include disruption to key transportation routes, fluctuating energy prices and disruptions to energy production, reduced tourism, capital outflows, higher security spending, and weaker consumer and investment confidence.
20. Financial Services Brief: Insurers And Banks In The Middle East Sit Tight As Israel-Iran Conflict Escalates, June 18, 2025
Andreas Lundgren Harell, Stockholm, 46-8-440-5921, andreas.lundgren.harell@spglobal.com
- Insurers and banks are bracing themselves for further conflict as Israel extends its military operations in the region.
- An Israeli government scheme program is in place that will cover the majority of insurance losses related to the conflicts, while Gulf Cooperation Council (GCC) insurers are reliant on their robust capital buffers. Israeli banks benefit from government support provided to the economy that reduce the negative spillover effect on the banking system.
- S&P Global Ratings will monitor the changing risks to insurers and banks, but ratings are not yet affected.
21. Israel-Iran Escalation Stresses Geopolitical Risk Scenarios For Regional Sovereigns And Banks, June 16, 2025
Benjamin J Young, Dubai, 971-4-372-7191, benjamin.young@spglobal.com
- Developments in the Israel-Iran conflict are testing S&P Global Ratings' previous assumptions by increasing downside risk including due to the prospect of further escalation. Thus far, developments suggest attacks and counter attacks are seeking to avoid drawing in third countries, such as the U.S. or Gulf countries.
- The transmission channels that could pressure regional credit include disruption to key transportation routes, fluctuating energy prices, reduced tourism, capital outflows, higher security spending, and weaker consumer and investment confidence.
- Higher oil prices will only benefit the region if production continues, global demand is sustained, and trade routes remain open.
- Gulf Cooperation Council banks display strong balance sheet resilience under our stress test scenarios although a complex, unpredictable, and protracted regional conflict would likely have adverse implications for their creditworthiness.
Economics
22. Economic Outlook Asia-Pacific Q3 2025: Resilience May Vary, June 23, 2025
Louis Kuijs, Hong Kong, +852 9319 7500, louis.kuijs@spglobal.com
- While U.S. tariffs are hitting China's exports, relatively resilient domestic demand should contain the economic slowdown. We expect China's GDP growth to be 4.3% in 2025 and 4.0% in 2026.
- U.S. tariffs, the elevated uncertainty about them, and soft Chinese imports will weigh on Asia-Pacific economies. We expect favorable domestic demand to limit the slowdown in overall GDP growth in 2025, but less so in the more export-oriented economies.
- With inflation not a major risk, more focus on growth risks and external factors unlikely to significantly constrain monetary policy easing, we expect Asia-Pacific central banks to continue to cut policy rates.
23. Economic Outlook Canada Q3 2025: U.S. Tariff Uncertainty And Slower Population Growth Weigh On Momentum, June 24, 2025
Satyam Panday, San Francisco, + 1 (212) 438 6009, satyam.panday@spglobal.com
- We forecast Canadian real GDP growth of 1.5% in 2025 and 2026.
- Elevated level of business uncertainty will keep unemployment averaging 7.1% over the next three quarters, before improving to 6.5% by the end of next year.
- We anticipate the Bank of Canada will make two additional quarter-point cuts in the second half of this year as economic fallout from U.S. tariffs becomes evident, taking the overnight rate to 2.25%.
24. Canada Macroeconomic Snapshot: Growth Prospects Held Back By Uncertainty Over U.S. Tariffs, June 11, 2025
Satyam Panday, San Francisco, + 1 (212) 438 6009, satyam.panday@spglobal.com
- Since the U.S. has imposed higher tariffs on most other countries, Canada no longer appears to be at a competitive disadvantage (a position it appeared to be in before April).
- Real GDP grew at a respectable 2.2% annualized rate in the first quarter (driven by inventory accumulation and healthy growth in exports), up from 2.1% in the fourth quarter.
- Nonetheless, with the higher tariff on Canada's auto exports, and with consumers' and businesses' ongoing concerns about future U.S. trade policy, Canada's economy is still set to see below-potential GDP growth in the near term (even though we think it'll likely avoid a recession). Companies will likely keep major investment projects on hold ahead of the USMCA renegotiation.
- The growth in Canadian exports to the U.S. will likely slow, but for a more conventional reason: Prospects for real GDP growth in the U.S. have deteriorated.
- The pace of job gains has slowed significantly this year, with businesses pausing their hiring plans. We think the unemployment rate will stay at roughly 7% through the end of 2025, up from the 6.4% average for 2024.
- The scrapping of the carbon tax will keep a lid on headline inflation, but the underlying core inflation (CPI-mean and CPI-median) has been rising recently, toward 3%.
- We think there will likely be three 25-basis-point rate cuts over the rest of 2025. This would take the policy rate to 2.0% at the end of the year, from 2.75% currently.
25. Economic Outlook Emerging Markets Q3 2025: Tariffs' Direct Impact Is Modest So Far, But Indirect Effect Will Feed Through, June 24, 2025
Elijah Oliveros-Rosen, New York, 1-212-438-2228, elijah.oliveros@spglobal.com
- The direct impact of shifting U.S. trade policy on economic growth in emerging markets (EMs) has so far been modest amid lower-than-feared effective tariff levels.
- However, we expect the indirect impact of tariffs, namely slower global demand and softer investment due to trade policy uncertainty, to become more noticeable in the coming quarters.
- A weaker U.S. dollar will encourage most EM central banks to continue lowering interest rates, partially cushioning the impact of U.S. trade policy uncertainty.
- There are significant downside risks to our growth outlook for EMs, such as the potential for higher oil prices amid the escalation of the conflict in Iran, a weaker-than-expected U.S. economy, more upside pressure on long-term U.S. treasury yields, and challenging fiscal dynamics across several EMs.
26. Economic Outlook Eurozone Q3 2025: Strength From Within, June 24, 2025
Sylvain Broyer, Frankfurt, + 49 693 399 9156, sylvain.broyer@spglobal.com
- We do not expect tariff-related volatility to hamper the ongoing recovery in domestic demand. Public spending on infrastructure and defense should boost growth from 2026.
- We expect core inflation will remain close to the European Central Bank's (ECB's) target. Further rate cuts are unlikely, unless new shocks occur.
- Our forecasts remain contingent on the outcome of trade negotiations. In a severe tariff scenario, we could reduce our eurozone growth forecasts for 2025-2026 by 0.4%, with the ECB potentially resuming rate cuts.
27. Global Economic Outlook Q3 2025: Unpredictable U.S. Policy Clouds Global Growth Prospects, June 25, 2025
Paul F Gruenwald, New York, paul.gruenwald@spglobal.com
- U.S. policy unpredictability, led by tariffs, continues to cloud the global macro picture.
- Activity is generally holding up: consumption remains firm and labor markets remain tight.
- Market volatility has fallen as tariffs have been partially paused, but government bond yields have risen, mainly on debt worries; many central banks continue to gradually ease policy rates.
- Our growth numbers are broadly unchanged from our last quarterly update, although policy unpredictability implies unusually wide confidence bands.
- Risks remains on the downside, with the recent military escalation between Israel and Iran adding to the tariff uncertainty mix.
28. Economic Research: Net-Zero Transition Stutters As Geoeconomic Risks Increase, June 11, 2025
Marion Amiot, London, 44-0-2071760128, marion.amiot@spglobal.com
- Geoeconomic security concerns are reshaping the transition to net-zero emissions. Immediate risks take precedence over long-term sustainability goals, even though global emissions keep rising.
- Weaker climate policy commitments and trade tariffs will slow progress toward net zero, with less public funding available to derisk net-zero technologies and emerging markets. This reduces private sector incentives to invest in clean technologies.
- Asia-Pacific (APAC)--particularly China--and the EU will continue to lead the development and adoption of clean technologies. Yet diverging industrial and trade policies will likely continue to create tensions.
29. Economic Research: Global Aging Trends Are Catching Up To Southeast Asia, June 12, 2025
Vishrut Rana, Singapore, + 65 6216 1008, vishrut.rana@spglobal.com
- Aging trends will hit GDP growth in Southeast Asia and require additional resources to support welfare.
- There will be a greater requirement for resources to address aging; for example, households will increasingly call on governments to provide adequate pensions and health care to the aged.
- Economies in the region will benefit from cheaper capital-- savings rates will rise while individuals save for retirement; economies will also be hit by weakening growth in domestic spending.
30. U.K. Economic Outlook Q3 2025: Trade Agreements Are Not Enough To Lift Growth, June 24, 2025
Marion Amiot, London, 44-0-2071760128, marion.amiot@spglobal.com
- The U.K. economy is weaker than it looks and has shed 280,000 jobs in the past 12 months. Surveys point to subdued demand, especially in manufacturing, and consumers continue to save much more than they have historically.
- The U.K.'s trade agreements with the U.S., EU, and India will do little to boost economic growth in the short term as they are either too narrow, or, in the case of the U.K.-U.S. trade deal, still leave exporters worse off than before.
- The Bank of England (BoE) will continue to take a gradual approach to cutting rates, as volatile economic data continue to point to elevated price pressures even though the labor market is cooling down.
- We expect one rate cut per quarter until February 2026, which should help investment and consumption rebound more quickly.
31. Economic Outlook U.S. Q3 2025: Policy Uncertainty Limits Growth, June 24, 2025
Satyam Panday, San Francisco, + 1 (212) 438 6009, satyam.panday@spglobal.com
- S&P Global Ratings Economics forecasts below-potential U.S. real GDP growth of 1.7% in 2025 and 1.6% in 2026 as growth is restrained by slower population growth, tariffs, and the federal government’s cost-cutting initiatives.
- We expect weaker growth in the near-term to soften the labor market further in the next 12 months, with the unemployment rate rising to 4.6% by the first half of next year before gradually returning to its long-run average of 4.1% by mid-2027.
- We believe tariffs will settle below their April peak in the coming months but still materially higher than 2024. We therefore anticipate core consumer price inflation of 3.0%-3.5% by the end of the year.
- We expect the fed funds rate will be 3.75%-4.00% by end-2025 and will reach its nominal neutral of 3.00%-3.25% by end-2026.
Environmental, social, and governance
32. Sustainability Insights: Social Project Analysis: A Key Component Of Our SPOs And A Tool For Sustainable Development, June 25, 2025
Erin Boeke Burke, New York, 1-212-438-1515, Erin.Boeke-Burke@spglobal.com
- Social projects are important, particularly for developing regions, governments, and supranationals; for us to consider social- or sustainability-labeled bond issuance aligned with sustainable finance principles in our SPOs, the proceeds must directly aim to address or mitigate a specific social challenge or provide clear social benefits.
- There are four key components of our analysis of social projects: 1) identifying a material social issue; 2) defining the target population; 3) understanding the intended social outcomes; and 4) establishing whether each social project's implementation includes sufficient social risk management.
- We assess these components holistically because there may be significant overlap between them, and the relative materiality of a component may vary, depending on the proposed project and its context.
33. Sustainability Insights: Behind The Shades: Power Generation, Transmission, And Distribution, June 23, 2025
Rafael Heim, Frankfurt, 49-1755-8125-58, rafael.heim@spglobal.com
- Dark green is the shade we most frequently assign to clean or low-carbon power generation projects, due to the prevalence of solar photovoltaic (PV), wind, and hydropower in sustainable financing frameworks; transmission and distribution projects typically receive a shade of green, but the specific shade depends on the share of low-carbon electricity transmitted.
- Investments in nuclear power generation are typically Medium green, due to such projects' low lifecycle greenhouse gas emissions and land use; yet, nuclear value chains entail significant environmental risks, most notably from uranium mining and the long-term disposal of radioactive waste -.
- Financing of bioenergy can receive shades ranging across the Shades of Green spectrum (green to red) depending primarily on the climate and nature risks of the associated feedstock.
- Power generation projects that rely on fossil fuels such as coal, crude oil, and unabated natural gas typically receive a shade of Red or Orange, respectively. In rare cases, some natural gas projects may receive a shade of Light green if they feature robust decarbonization measures (such as carbon capture), substantially mitigate the risk of locking in emissions, and contain safeguards against emissions lock-in.
34. Carbon Capture and Sequestration (CCS) — Navigating Uncertainty and Viability, June 19, 2025
Carolyn Seto, Boston, carolyn.seto@spglobal.com
- Despite being a mature and scalable technology, CCS remains at early stages of deployment due to the nascent markets for carbon and decarbonized products in which these capital-intensive and long-lived projects are expected to operate.
- Financing these capital-intensive projects is often a significant undertaking for companies and investors alike. Government support can incentivize CCS projects and help to reduce the capital at risk.
- Key provisions of the US Inflation Reduction Act incentivized clean energy efforts, including CCS, although uncertainty about possible changes to those provisions is a potential hurdle.
- Nevertheless, the role of CCS in global decarbonization has broadened significantly, and CCS is making steady progress. It has the potential to significantly contribute to meeting global emissions goals.
35. Sustainability Insights: Spain's And Italy's Water Networks Are Thirsty For Investment, June 11, 2025
Alejandro Rodriguez Anglada, Madrid, + 34 91 788 7233, alejandro.rodriguez.anglada@spglobal.com
- Low water availability and intense consumption are causing water stress in Spain and Italy, particularly in the south of the countries.
- The water infrastructure is aging in both Spain and Italy, with leaks leading to substantial water losses, especially in areas with the highest water stress.
- Solutions will require investment in infrastructure that could put pressure on local and regional governments' (LRGs') budgets, increase their debt, and eventually weaken their creditworthiness.
- On the other hand, a failure to address water scarcity might weigh on LRGs' economic growth prospects and erode their tax bases.
36. Sustainability Insights: U.S. Health Care Access And Affordability: A Chronic Issue With Heightened Concerns For Credit, June 17, 2025
David P Peknay, New York, 1-212-438-7852, david.peknay@spglobal.com
- Complex economic realities and the structure of the U.S. health care system mean that the interests of maintaining credit quality may be at odds with health care access and affordability.
- The direction of health policy under the federal administration with focus on Medicaid payments and work requirements has heightened potential repercussions for our credit ratings on health care service providers and for patient access to affordable health care.
- With the expectation of ongoing headwinds from the sector and current federal policy, for-profit and not-for-profit health care providers may need to continue to make difficult decisions to manage financial viability, but that may further impair access.
37. Sustainability Insights: Reducing U.S. Drug Prices Will Likely Pressure Pharmaceuticals’ Credit Quality, June 17, 2025
Tulip Lim, New York, 1-212-438-4061, tulip.lim@spglobal.com
- Two Trump administration executive orders on reducing drug prices could be incrementally negative for our ratings on pharmaceutical companies; we do not factor most favored nation status into our ratings or forecasts; it could be highly negative for credit quality in the branded pharmaceutical industry.
- Directives to increase competition in the generics sector, those related to the Inflation Reduction Act, and reforms to the pharmacy benefit manager sector could all also affect creditworthiness to varying degrees.
- While not factored into our base case for ratings, President Trump has also discussed tariffs on pharmaceuticals, which could also put pressure on margins and potentially affect affordability and access.
Financial institutions
38. Scenario Analysis: Most China Banks Can Weather Tariff Strains, June 11, 2025
Ming Tan, CFA, Singapore, 65-6216-1095, ming.tan@spglobal.com
- The creditworthiness of our rated China banks remains resilient to the formation of higher nonperforming assets (NPA) in our stress scenario.
- The government's injection plan will help the megabanks increase their loss buffer and maintain our current assessment of their capitalization.
- We see greater pressure on regional banks based in coastal provinces; most of our rated banks have a diverse portfolio across the country, which is a stabilizing factor.
39. Stress Test Highlights European Banks' Resilience To Potential Trade Escalations, June 24, 2025
Nicolas Charnay, Paris, 33623748591, nicolas.charnay@spglobal.com
- Our stress test revealed that European banks are well placed to absorb potentially higher credit losses due to rising trade tensions, with only a handful of banks potentially seeing a material effect.
- European banks' asset quality has remained resilient so far, with several macro-financial shocks only causing sporadic deterioration in asset quality.
- In our base case, we expect asset quality metrics will remain broadly stable over 2025-2026 due to a combination of cyclical and structural factors.
40. G-SIB Monitor 2025: Powering Through, May 27, 2025
Nicolas Charnay, Paris, +33623748591, nicolas.charnay@spglobal.com
- We expect rated global systemically important banks (G-SIBs) will remain resilient and continue to record solid profits in 2025, despite a weaker economic outlook. Business diversification and scale will help G-SIBs navigate tougher credit conditions.
- Our outlooks on all G-SIB ratings are stable. In 2024, we upgraded two G-SIBs and downgraded one. Our ratings on G-SIBs’ operating companies range from ‘A-’ to ‘AA-’.
- Ongoing tariff uncertainty may trigger several macro-financial shocks, which could affect global financial institutions’ risk profiles. We expect the most direct effects on G-SIBs include lower M&A volumes--which, in the case of banks with capital markets operations, can be offset by an increase in trading volumes--higher proactive credit provisioning, and lower lending growth.
- In our base case, we expect G-SIBs’ profitability will decline but remain solid. We do not expect a meaningful deterioration in credit quality and believe most G-SIBs could absorb significantly higher losses. G-SIBs will continue to focus on their strategic priorities, namely building scale within their home region, diversifying revenues toward non-banking products, and boosting their efficiency via technological upgrades.
- Potential regulatory changes to improve competitiveness and simplify rules would not weigh on ratings, as long as key guardrails remain in place. Over the long term, however, regulatory fragmentation could increase costs and business model complexity for those G-SIBs that are most internationally active.
- The fast growth of private credit has spurred many banks to take strategic action to service or partner with key players in that space. Beyond the business opportunity, increasing interdependencies also raise contagion risks. G-SIBs’ risk management will be central in this regard.
41. India's New Rules On Gold-Backed Loans May Reshape The Competitive Landscape, June 19, 2025
Shinoy Varghese, Singapore, 65-6597-6247, shinoy.varghese1@spglobal.com
- India's new rules to be implemented by next April will likely lead to business-model adjustments in the booming gold-backed loan niche.
- Credit appraisals based on analysis of borrowers' cash flows will necessitate large upfront costs for finance companies.
- We also think lenders will have more latitude to offer shorter-tenor loans for gold-backed consumption loans, allowing smaller borrowers to unlock more value from their pledged gold assets.
- Operational agility and service excellence will remain the key differentiator between lenders.
42. Japan's Megabanks Building For New Growth, June 16, 2025
Chizuru Tateno, Tokyo, 81-3-4572-6220, chizuru.tateno@spglobal.com
- Japan's megabank groups will continue expanding their stable earnings through solid business bases in favorable market conditions.
- They are likely to maintain sound asset portfolios by replacing their securities portfolio and making forward-looking loss provisions.
- Risk factors include earnings erosion and losses due to deteriorating conditions, and negative impacts resulting from excessive focus on shareholder value.
43. U.S. Large Banks Q1 2025 Update: Stable Performance Persists Despite Economic Headwinds, May 30, 2025
Devi Aurora, New York, + 1 (212) 438 3055, devi.aurora@spglobal.com
- GSIBs' earnings rose in first-quarter 2025 from both fourth-quarter 2024 and first-quarter 2024, aided by strong noninterest income and modestly higher net interest income (NII), even as higher noninterest expense and a higher provision for credit losses weighed on results.
- We think the trajectory of GSIBs' NIMs could diverge depending on how well they manage their asset sensitivity, as well as the extent of earning asset growth.
- Delinquent loans and nonperforming loans fell in the first quarter from both fourth-quarter 2024 and first-quarter 2024. But net charge-offs rose modestly from both of those periods. Nonperforming and delinquent loans remain below pre-pandemic levels, though charge-offs have inched higher.
- GSIBs together are the largest CRE lenders by dollar volume, but CRE loans account for a relatively small percentage of their overall portfolios. Large banks' broadly diversified loan portfolios and balance sheet improvements in the last year have reduced risk. CRE risks have eased somewhat amid stabilizing valuations, modest economic growth, and lower interest rates following the Fed’s 2024 rate cuts.
Infrastructure
44. East Asia Wind Power Producers Confront Steep Execution Hurdles, June 16, 2025
Daye Park, Hong Kong, + 852 2533 3581, daye.park@spglobal.com
- East Asian wind power will likely quadruple in capacity by 2030, with mainland China accounting for three-quarters of the expansion.
- While industries are pushing ahead aggressively in the segment, they will need to manage significant execution risks, including complex permitting and licensing processes, grid capacity constraints and immature local supply chains.
- Bank financing will likely continue to be the primary funding source for offshore wind projects, with debt dominating offshore wind financing at a 70:30 debt-to-equity mix; we assume bond issuance will become more prominent as the sector matures in East Asia.
45. North America Investor-Owned Regulated Utilities How Credit Stories Have Evolved, June 12, 2025
Gabe Grosberg, New York, + 1 (212) 438 6043, gabe.grosberg@spglobal.com
- The 20 largest North America investor-owned utility holding companies account for about 70% of the industry’s funds from operation, debt, and capital spending.
- Over the past five years the ratings for the 20 largest utility holding companies were considerably less volatile than the industry average.
- However, the ratings distribution for the 20 largest utilities remains generally consistent with the broader industry.
- Currently about 75% of the 20 largest utility holding companies are operating with minimal financial cushion or funds from operations to debt that is less than 100 basis points from their downgrade threshold. This compares negatively to the industry average, which is closer to 50%.
- Looking forward, ratings pressure could increase for the top 20 utility holding companies, reflecting the considerably higher percentage of negative outlooks compared to the industry average.
Insurance
46. French Insurance Sector Overview 2025: Profitability resilience and growth despite challenges, June 20, 2025
Taos Fudji, Milan, + 390272111276, taos.fudji@spglobal.com
- France’s life insurance industry has adapted well to increasing interest rates, with insurers drawing on surplus reserves to offer competitive credited rates, while unit-linked products are expected to remain at about 40% of total savings gross written premiums (GWP) over the next two years.
- In Property & Casualty (P&C), despite profitability pressures on some segments, the total net combined ratio is expected to stabilize in 2025 and 2026 at about the 2024 level of 99%.
- Over 2025-2026, we expect GWP growth in life insurance to decline to 5% per year, while P&C GWP is likely to grow at above the inflation rate to compensate for the rise in claims costs, including from natural catastrophes.
Leveraged finance
47. Market Insights Sector Intelligence | Leveraged Finance: European Summary Report, June 23, 2025
Tia Zhang, London, +44-796-667-9379, tia.zhang2@spglobal.com
- S&P Global Ratings now forecasts the European speculative-grade corporate default rate will fall to 3.6% by March 2026, down from the 12-month trailing default rate of 4.1% as of end March 2025. This decline is supported by easing interest rates; declining eurozone inflation, which is benefitting from a stronger euro and pound; and limited direct impact from recent U.S. tariffs, compared to other trading partners. Near term maturity risk is modest. Actual defaults rose to six in May (up from two in April), but year-to-date totals remain below 2024 levels (at 16 versus 19).
- Chemicals, packaging, and environmental services lead the weakest links (‘B-‘ and below issuers with negative outlooks or on CreditWatch negative), with a default rate of 8x that of the broader speculative-grade population. The petrochemical sector appears likely to remain in a cyclical trough this year as weakness in key markets (housing and auto) and slower growth in key regions leads to weighs on demand. Vulnerabilities are exacerbated by uncertainties around the trade outlook and U.S. tariffs, which are likely to have a direct impact on most European chemical producers.
- We assigned preliminary ratings to Ares European Direct Lending CLO 1 S.a.r.l., a sterlingdenominated middle market collateralized loan obligation (CLO). Notably, about 77% of its portfolio includes payment-in-kind (PIK)-toggle features and approximately 14% of the assets were using the PIK toggle. The weighted average spread (WAS) of the CLO transaction falls from 6.15% to 5.25% when assuming the minimum cash margin payable by the underlying assets.
Private markets
48. Private Capital Funds: Global Regulatory Push Could Catch Problems Before They Happen, June 15, 2025
Gavin J Gunning, Melbourne, 61-3-9631-2092, gavin.gunning@spglobal.com
- Fast growth in relatively opaque private capital markets has raised regulatory concerns over risks and investor protection.
- Better transparency, oversight, and reporting could strengthen confidence in these markets and head off potential problems.
- We believe some regulators will seek to balance the need for more oversight against the detriment of high regulatory burden.
Public finance
49. U.K. Social Housing Providers: Extra Development Grants Won't Improve Financial Headroom, June 26, 2025
Tim Chow, CFA, London, +44 2071760684, tim.chow@spglobal.com
- The U.K. government has committed to facilitate U.K. social housing providers in the delivery of additional new homes by providing more capital grants.
- At the same time, social housing providers are still under pressure to increase spending on improving the quality of existing homes.
- A push to increase investments in both new and existing homes would put pressure on about half of the ratings in our portfolio, even after additional development grants.
- However, a potential agreement on rent convergence and a grant rate that covers a higher share of the capital spending on new homes could reduce the burden of higher investments.
50. Under Pressure: How Enrolments Might Strain U.K. Public Universities' Credit Quality, June 19, 2025
Abril A Canizares, London, + 44 20 7176 0161, abril.canizares@spglobal.com
- We expect that the U.K. higher education sector's financial headroom will tighten primarily because of weaker demand from international students.
- In our view, a further marked decrease in enrolments compared with current forecasts could result in a weaker credit quality for almost half of the U.K. not-for-profit universities in our portfolio.
- While the average creditworthiness of the portfolio would remain at the current 'A' level, we would see credit quality spreading toward lower levels of the 'A' category and the 'BBB' category.
- We think that universities with lower rankings will likely experience more adverse effects. This reflects the increased competition for both domestic and international students.
51. As The Fiscal 2026 Budget Deadline Looms, More U.S. States Than Usual Still Await Budget Enactment, June 24, 2025
Andrew J Stafford, New York, + 212-438-1937, andrew.stafford1@spglobal.com
- Sixteen U.S. states have yet to enact their fiscal 2026 budgets; one state has additional time to complete negotiations.
- Most U.S. states require their budgets to be structurally balanced at the start of the fiscal year; to achieve this, some budget negotiations could extend past the fiscal year-end.
- With more modest revenue projections than in recent years, prioritization could lead to a protracted budgeting process.
- Seven state budgets are currently with the governor for approval: California, Connecticut, Florida, Louisiana, Missouri, New Hampshire, and Rhode Island.
52. U.S. Charter Schools Sector Fiscal 2024 Medians: Per-Pupil Funding And Enrollment Growth Soften Loss Of Federal Stimulus, June 23, 2025
Sadie Mazzola, New York, +1 2124387434, sadie.mazzola@spglobal.com
- U.S. charter schools' median financial metrics remained healthy in fiscal 2024, with modest operating margin compression as expenses remained high and schools had less available Elementary and Secondary School Emergency Relief (ESSER) funding.
- Median state-derived revenue per student increased 11% in fiscal 2024, the largest annual growth rate in more than a decade for charter schools rated by S&P Global Ratings.
- Median enrollment continued to increase in fall 2023 (fiscal 2024), but growth was slower than last year's increase, partly due to nationwide declines in school-aged population growth and heightened competition.
Real estate
53. Real Estate Monitor: Slower Growth And Cost Pressure Could Drive Higher Negative Rating Bias, June 17, 2025
Ana Lai, CFA, New York, 1-212-438-6895, ana.lai@spglobal.com
- The housing market is cooling, and we expect demand to remain soft, particularly for first-time buyers and markets with higher supply. High incentives will pressure margins.
- Higher costs from rising tariffs and softer demand will also pressure profitability for building materials issuers, particularly those more exposed to discretionary products.
- Operating performance for REITs remains resilient, as leasing momentum improves and asset values stabilize. However, speculative-grade companies still face refinancing risk given elevated financing costs, and property-level financing for weaker assets remains challenging.
- CRE services companies continued to benefit from a steady recovery in transaction activity with support from improved financing conditions, while stabilizing CRE conditions are driving increased originations for mortgage REITs.
Retail
54. Credit FAQ: Retail Reset: How Australian Operators Are Adapting To A Tougher Landscape, June 25, 2025
Puchen Wang, Melbourne, 61-3-9631-2099, puchen.wang@spglobal.com
- Regulatory scrutiny, cost-of-living pressures, weakened reputations. Conditions have been tough for Australia's big retailers in the past year.
- In response, they've ramped up promotions in a bid to attract and retain frugal consumers.
- S&P Global Ratings sees risks and opportunities in this approach.
Sovereigns
55. Sovereign Debt Liability Management And Distressed Exchanges, June 11, 2025
Giulia Filocca, Dubai, 971-5-673-5067, giulia.filocca@spglobal.com
- As global debt levels rise, sovereign debt liability management operations will become more frequent.
- Operations include buybacks, foreign and local currency debt exchanges, and debt-for-nature swaps, all of which generally aim to reduce debt and debt-servicing costs, mitigate refinancing risks, and smooth maturity profiles.
- S&P Global Ratings assesses different sovereign commercial debt operations on a case-by-case basis. We consider various factors such as the rating level, time to maturity, pricing dynamics, and alternative financing options when determining whether a liability management exercise may be distressed or not.
56. CreditWeek: How Will The Second-Order Effects Of Tariffs Affect Sovereigns?, May 23, 2025
Riccardo Bellesia, Milan, +39 272111229, riccardo.bellesia@spglobal.com
- S&P Global Ratings expects most sovereigns to endure the initial effects of tariffs, but the U.S.'s announced import duties will not affect all sovereigns equally.
- Those with solid external buffers, diversified economies, and limited merchandise exposure to the U.S. will likely be able to withstand immediate adverse credit implications. The secondary effects on most open, manufacturing-oriented economies—combined with lowered growth prospects and heightened uncertainty—could pose risks to countries entering this period of stress with weak fiscal and external positions.
57. Credit FAQ: Sustained GDP Growth And Effective Fiscal Policy Are Key To Panama's Credit Quality, June 12, 2025
Karla Gonzalez, Mexico City, 52-55-5081-4479, Karla.Gonzalez@spglobal.com
- Panamanian President Jose Raul Mulino's administration introduced in October 2024 a reform to the Social Fiscal Responsibility Law to gradually reduce the country's fiscal deficit and stabilize public finances.
- The government's ability to reach its fiscal targets will depend largely on the rate of economic growth.
- But events in recent years, including the closure of the large copper mine Minera Panama in 2023, have raised doubt about whether Panama can sustain its historically high GDP growth, which has well exceeded that of other sovereigns at the same level of economic development.
Structured finance
58. Credit FAQ: How We Would Rate A Project Finance CLO In Asia-Pacific, June 12, 2025
Yalan Tao, Hong Kong, 852-2532-8033, yalan.tao@spglobal.com
- Project finance collateralized loan obligations, or PF CLOs, are becoming an increasingly favored asset class in Asia-Pacific.
- And S&P Global Ratings expects the growth momentum to continue, given the solid financing needs of infrastructure sectors.
- The motivation of high-profile repeat sponsors to develop these instruments is an additional driver.
59. EMEA Structured Finance Chart Book: June 2025, June 19, 2025
Andrew South, London, + 44 20 7176 3712, andrew.south@spglobal.com
- Securitization regulation. In early December 2024, the European Commission (EC) closed its comprehensive consultation on reforms to the EU regulatory framework for securitizations. On June 17, the EC published its proposed changes. Based on an initial reading, the EC appears serious about significantly simplifying the rules on investor due diligence and issuer disclosures, which could expand both buy- and supply-side participation.
- Issuance. Investor-placed securitization issuance in May 2025 was €16.0 billion--down 22% on May 2024. The RMBS sector saw a significant decline, but issuance across the remaining sectors was on a par with the previous year. Year-to-date securitization issuance of €61.4 billion is down 6% on 2024.
- Rating actions. In May 2025, we raised our ratings on 32 European securitization tranches across a wide variety of asset classes. There were 11 downgrades in the CLO, CMBS, Dutch RMBS, and Italian RMBS sectors.
60. Covered Bonds Brief: Bank And Sovereign Rating Actions Have Mixed Implications, June 12, 2025
Casper R Andersen, Frankfurt, 49-69-33-999-208, casper.andersen@spglobal.com
- European covered bond issuance could slow down if improved banking performance leads to tighter spreads on unsecured funding.
- Any future sovereign rating actions--positive and negative--could also have implications for covered bond ratings and issuance.
61. Global Covered Bond Insights Q3 2025: Long-Dated Issuances On The Rise, June 23, 2025
Adriano Rossi, Milan, +39-02-7211-1251, adriano.rossi@spglobal.com
- Year-to-date issuance volume recovered since April, at 13% lower than the 2024 equivalent period.
- Consistent with 2024, benchmark European covered bond issuances are dominated by medium-term issuances. Long-dated issuances have increased but are still below the 10-year average.
- The period to submit comments on the proposed update to the methodology for rating covered bonds ended on May 23, 2025.
62. U.S. Structured Finance Chart Book: June 2025, June 18, 2025
James Manzi, Washington, + 1 (202) 383 2028, james.manzi@spglobal.com
- ABCP outstanding increased to $333 billion in the U.S. and $152 billion in Europe in March 2025.
- Pooled ground lease securitizations are a novel approach involving a familiar asset (groundleased properties), where the cash flow collateral would be the ground leases themselves, and not loans secured by liens on ground-leased properties.
- The global collateralized loan obligation (CLO) market covers the U.S. and Europe, and, as of April 2025, it totals a bit more than $1.33 trillion in size, according to BofA Global Research.
63. Assessing The Evolving Third-Party Loan Origination Legal Risks For U.S. Consumer Loan ABS, June 17, 2025
Ronald G Burt, New York, + 1 (212) 438 4011, ronald.burt@spglobal.com
- Consumer loan originators using third-party partner bank loan origination models may introduce "valid when made" and "true lender" legal risks.
- In 2020, federal agencies finalized rules supporting "valid when made" doctrine, but state-by-state "true lender" challenges continue to be observed.
- "True lender" litigation has been mostly targeted at origination platforms engaged in lending practices that are inconsistent with state consumer protection statutes.
- Legislative oversight has resulted in more regulatory scrutiny, but the use of third-party lending arrangements has continued to grow.
- In this article, we clarify our approach to assessing the legal and regulatory risks associated with third-party lending arrangements, highlighting questions we generally have about the presence of compliance and monitoring strategies or specific transaction features that may help mitigate these risks.
Technology
64. Tariff Disruption In Asia Tech: Vietnam And India Are Key Markets To Watch Outside Of China, June 10, 2025
Clifford Waits Kurz, CFA, Hong Kong, 852-2533-3534, clifford.kurz@spglobal.com
- Smartphones and PCs are the most exposed to U.S. tariff risk among tech companies that produce in Asia.
- This is because these segments rely heavily on tariff-vulnerable markets to produce; and the U.S. market makes up a third of global PC shipments for some Asia producers.
- We think companies can pass on at least some of the cost to end-buyers. Many have also diversified their supply chains in recent years, which also acts as a shield.
Transportation
65. CreditWeek: What’s Behind The Resilience Of Our Container Shipping Ratings Amid Trade And Tariff Disruptions?, June 12, 2025
Izabela Listowska, Frankfurt, + 49 693 399 9127, izabela.listowska@spglobal.com
- Ratings on container shipping companies may show resiliency despite trade tensions continuing to disrupt global freight, trade patterns, and supply chains.
- S&P Global Ratings anticipates that the container liners and containership tonnage providers we rate will sustain credit metrics within our rating thresholds, even in the face of heightened volatility.
- Our rated container liners are becoming increasingly agile at adapting to erratic shifts within the volatile shipping industry, which is evident in their capacity management strategies and ability to realign networks to often unpredictable swings in market demands.
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The Ratings View:
We published the latest "The Ratings View", which spotlights key developments and asset class trends on a weekly basis, on June 25.
This Week In Credit:
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 June 23.
| Primary Contact: | Yucheng Zheng, New York 1-212-438-4436; yucheng.zheng@spglobal.com |
| Secondary Contacts: | David C Tesher, New York 212-438-2618; david.tesher@spglobal.com |
| Joe M Maguire, New York 1-212-438-7507; joe.maguire@spglobal.com | |
| Eunice Tan, Singapore 65-6530-6418; eunice.tan@spglobal.com | |
| Jose M Perez-Gorozpe, Madrid 34-914233212; jose.perez-gorozpe@spglobal.com | |
| Paul Watters, CFA, London 44-20-7176-3542; paul.watters@spglobal.com | |
| Research Contributor: | Sourabh G Kulkarni, CRISIL Global Analytical Center, an S&P Global Ratings affiliate, Pune ; |
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