2026 Euro Special Sits: Some Are More Equal
Helen Rodriguez - Head of European Special Situations, CreditSights
13 January 2026
- How process arbitrage and restructuring plan weaknesses are reshaping creditor outcomes in European markets.
- Which creditor types now dominate European restructurings and what separates winners from losers today.
- What activist strategies and new money economics mean for traditional bondholders in distressed situations.
- How chemicals and automotive defaults signal deeper structural risks beyond typical cyclical downturns.
- Where CDS disputes and covenant battles could permanently alter European distressed investing playbooks going forward.
Executive Summary
Geopolitical risks reshape European credit markets amid unprecedented government interventions. Credit indices fail to capture emerging left-field risks.
Moreover, process arbitrage will define restructuring outcomes throughout the year. Heavyweight investors dominate while creditor hierarchies become increasingly unequal.
Government confrontations with creditors could reshape European special situations landscape. Emergency equity injections disappear as creditors pursue alternative value strategies.
Chemicals join automotive suppliers facing heightened distress amid structural challenges. Healthcare providers remain exposed to fiscal pressures across European markets.
Therefore, early exits grow critical given complex restructuring dynamics. Major situations will test investor strategies in coming months.
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