Two Years into COVID-19: Risks to European Structured Credit Transactions

As the Coronavirus Disease (COVID-19) continued its spread in the past two years, all aspects of the economy, including both consumers and businesses, faced substantial pressures. Across Europe, governments and central banks took extraordinary measures to partially mitigate the negative economic effects of this pandemic. In our May 2020 commentary, we highlighted how the pandemic would likely affect some sectors of the economy unevenly and we provided a list of the economic sectors we identified as having the highest perceived sensitivity to the pandemic.

In this commentary, we discuss the pandemic’s uneven effect on certain sectors, including tourism and hospitality. “Two years on, we believe that the risks to many of the most-affected sectors we contemplated in our May 2020 commentary have abated. However, we believe that tourism, leisure, hospitality, and some retail sectors are still vulnerable to the ongoing pandemic.” Said Carlos Silva, Head of European Structured Credit.