Europe oil firms, UK retailers may see 2017 restructuring

Bloomberg

Oil companies and UK retailers are the sectors most likely to come under financial stress in Europe this year, even as central bank stimulus keeps borrowing costs near historic lows, according to S&P Global Ratings and Fitch Ratings.
With the European Central Bank committing to an asset-purchase program until at least December, leveraged companies can refinance their debt cheaply and avoid restructuring. In this environment, the default rate for non-financial companies in Europe will not rise past 2 percent, both ratings firms said in interviews. “With short term rates so low, the ability of companies to service their debt remains good,” said Paul Watters, head of corporate credit research at S&P Global in London. “Default rates will remain low over the next year. That doesn’t mean that there aren’t sectors showing greatest stress or vulnerability.”