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European Shunning Cheap Debt Gives Potential To Gear Up

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Even after a decade of cheap interest rates, leverage in European companies has never been so low.

The net debt-to-Ebitda ratio of the Stoxx Europe 600 Index is at the lowest since at least 2002, according to Bloomberg data, in contrast to the U.S., where companies started borrowing up in recent years.

As interest rates increase on both sides of the Atlantic, European companies’ low indebtedness makes them more defensive with their low leverage, while there’s also the potential to borrow more for investment.

Source: Bloomberg Pro Terminal


 Trader Georgi Bozhidarov

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