- Russia, and to a lesser, extent Ukraine is a notable market for many European credits under coverage, but in the vast majority of cases direct exposure to operations and assets in these markets is not material at the group level.
- Fortum and RBI on the Investment Grade side, Renault in the BB space and Oriflame in the B space, stand out as the few names with material exposure. Buzzi, Carlsberg, and Coca-Cola Hellenic also have meaningful exposure, though we expect it to be less of a focus with these names.
- Given limited direct exposure within the European credit markets, we expect second and third order effects (commodity and energy pricing, the impact of sanctions, broader risk appetite, etc) to be more material drivers of spreads and investor attention in the coming weeks.
- In addition to stand-alone sector pieces on banks, insurance and utilities, in this note we highlight direct exposures for the European automotive, building materials, chemicals, consumer, metals, packaging, paper, retail, services and telecom equipment sectors.