After a decade of debt-fueled growth, rising rates, macroeconomic volatility and activist pressures have left many European issuers scrambling to assuage investors’ concerns.

Since the Global Financial Crisis, growth in the European real estate sector has been largely fueled by debt. While property yields since 2010 have fallen across much of Europe, real estate companies recognized that low interest rates could have a positive impact on their equity returns as long as borrowing costs remained below the net rental income level of a portfolio. By 2021, the weighted average coupon for the sector...

Under pressure to do more on climate, the central bank’s new ESG framework for corporate bonds could be applied to its sovereign debt holdings.

The European Central Bank has committed to encouraging corporate issuers to invest in the climate transition. However, additional monetary support may be needed for sovereign issuers to do the same. With the recently announced Transmission Protection instrument—designed to prevent fragmentation of sovereign spreads during the transition to tighter monetary policy—the ECB could add a similar framework to shift the reinvestment of its nearly ...