Deutsche Bank-European Credit Strategy Rising Star Dominance to end-107601104

DeutscheBankCreditStrategyDateResearch15April2024EuropeanCreditEuropeStrategyUnitedKingdomRisingStarDominancetoendThewaveofRisingStarshasnotonlycontinued,ithasacceleratedoverthelast6CemKeltekmonths.Withafewlargecapstructuresjoiningin,wehaveseenanother€32bnofEuropeanCreditStrategistformerHY-bondsjoiningIG-indicesandfurthercompoundingalreadyfavourable+49-69-910-48370technicalsintheHYspace.Butthatshouldbeasgoodasitgets.WhiledwarfedbyRisingStars,FallenAngelvolumeshavealsopicked-up(€11bninthelast6m).SteveCaprioAndthisiswithoutamajorcontributionfromRealEstatebonds,€8.4bnofwhichHeadofEuropeanandUSCreditStrategyremainveryclosetotheHYthreshold.+44-20-754-16176TherushofRisingStarshasalsoreducedthenumberofcandidatesthatweCarloGeatconsiderveryclosetobeingupgradedtojust€13bnandtheyarenowoutnumberedResearchAnalystmorethan2:1byequivalentFallenAngelcandidates(€28bn).Whileanimproving+44-20-754-59511Europeangrowthoutlookshouldhelpcorporatefundamentals,wedoubtthatthiswillbeenoughtoturnthetide.MorethanhalfofimminentFallenAngelcandidatesoriginateinUtilitiesorRealEstate-bothsectorswithmoretoloseinahigherforlongerinterestratesenvironmentthantogaininamildcyclicalupswing.WeexpecttheFallenAngel/RisingStarbalancetoturnfromatailwindintoamoderateheadwindincomingmonths.WithHYnetsupplyalsolikelytograduallypick-up(seehere)peaktechnical...