Growing Challenges for US Companies
Rating agencies are increasingly downgrading US firms, primarily due to rising interest costs and shrinking revenues. The tariff policy of the Trump administration has further favored this trend, leading to a more critical assessment of highly indebted US corporations.
Examples of Recent Downgrades
A recent example is the downgrade of Coronado Global Resources Inc. by Moody’s from Caa1 to Caa2, due to a high risk of default within the next 6 to 18 months. CPI Card Group Inc. also experienced a downgrade of its senior secured bonds from B2 to B3, reflecting challenges such as high debt and market risks, despite improved liquidity.
Global Impact on the European Market
These downgrades also have repercussions for the European market. The credit downgrade of the US itself led to a global reassessment of risks, affecting European investors and companies. The International Monetary Fund subsequently lowered its growth forecasts for the US, negatively impacting global economic growth – with tangible effects in Europe.
In summary, rating agencies are judging highly indebted US companies more critically in light of rising financing costs and economic uncertainties, which affects not just the US market but also has significant repercussions for European markets.