Rising Distress in Germany Signals a Lot More Struggles Ahead
- About 15% of German companies are troubled, A&M says
- Exposure to US commercial real estate is an additional worry
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Credit investors are betting that Germany’s struggles are more than a temporary blip.
Economic stagnation, real estate woes and the highest company distress rate in Europe have left bondholders demanding higher corporate spreads from German firms than they are for the wider euro area. That’s a trend that’s been widening since Russia invaded Ukraine, which sent power prices for the country’s energy-intensive manufacturers soaring.