European Morning Credit: Today in European Credit

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European Morning Credit: Today in European Credit

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European Morning Credit

Today in European Credit

Strategy 18 June 2026

Taking Position: Large longs on iTraxx Main have been built over the past week. Risk- Credit

on momentum is building on the back of positive newsflow on the geopolitical risk front, Europe

pushing European credit spreads to outperform those of the dollar market. While iTraxx European Credit Rsch Grp

Main 5y trades just shy of CDX IG spreads, there is less compression upside from here. BofASE (France)

As a result, we think that 10y Main offers a strong risk-reward to own risk here. See: A See Team Page for List of Analysts

long-term view (IA)

Software

Engineering (ENGIM): The company announced the potential sale of Alfahealth SpA Exhibit 1: Just published

(Italian Healthcare) and Gruppo Industries eXcellence (digital solutions) to Accenture. Recent publications from European Credit

These two assets represent around 18% of consolidated FY25 revenue and 25% of FY25 Research

EBITDA. Financial terms are not disclosed but sources close to the transaction indicated

Taking Position

that it could be EUR800mn. This would imply a high EV/EBITDA multiple of nearly 11x A long-term view

based on FY25 EBITDA. The two businesses are high margin and high growth so the Ioannis Angelakis

long-term impact on engineering’s business profile could really depend on the cash

proceeds and amount of deleveraging the company is able to achieve on the back of the UK Water Utilities

A fireside chat with S&Ptransaction. Engineering has reported net debt of EUR1.2bn as of 1q26. The transaction

Prithvi Vetsa

improves credit metrics - potentially reducing to a maximum of 2.5x from 5.0x as of

1Q26. The transaction also improves the LTV (%) for the bonds.