[et_pb_section fb_built=”1″ admin_label=”section” _builder_version=”4.16″ custom_padding=”||2px|||” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_row admin_label=”row” _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||” theme_builder_area=”post_content”][et_pb_text admin_label=”Text” _builder_version=”4.27.7″ header_2_font_size=”25px” header_2_line_height=”1.2em” background_size=”initial” background_position=”top_left” background_repeat=”repeat” hover_enabled=”0″ border_color_bottom=”#93642e” global_colors_info=”{}” theme_builder_area=”post_content” text_font_size=”20px” sticky_enabled=”0″]<\/p>\n
More and more companies with weaker credit quality in the investment-grade segment are cutting their dividends to prevent a downgrade into the high-yield segment. However, this shift offers exciting opportunities for active investors. Learn more in this Spotlight!<\/p>\n
[\/et_pb_text][et_pb_text _builder_version=”4.27.0″ _module_preset=”default” header_3_font=”|700|||||||” header_3_font_size=”20px” custom_padding=”||20px||false|false” global_colors_info=”{}” theme_builder_area=”post_content”]A weak growth environment, higher costs, and persistently higher refinancing costs have increased pressure on the companies with the weakest credit quality within the EUR investment-grade universe. Companies\u2014most of which are already struggling with operational problems\u2014run the risk of losing their investment-grade rating in this environment. Every downgrade further exacerbates the situation.<\/span>[\/et_pb_text][et_pb_text _builder_version=”4.27.7″ _module_preset=”default” theme_builder_area=”post_content” text_font=”Celias – medium||||||||” text_font_size=”21px” hover_enabled=”0″ sticky_enabled=”0″]<\/p>\n Dividend Cuts Over Time<\/p>\n [\/et_pb_text][et_pb_image src=”https:\/\/ha-gim.com\/wp-content\/uploads\/2024\/08\/Dividendenkuerzung-im-Zeitverlauf-e1789032821983.png” title_text=”Dividend Cuts Over Time” _builder_version=”4.27.7″ _module_preset=”default” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” align=”center” sticky_enabled=”0″][\/et_pb_image][et_pb_text _builder_version=”4.27.0″ _module_preset=”default” header_3_font=”|700|||||||” header_3_font_size=”20px” custom_padding=”||20px||false|false” global_colors_info=”{}” theme_builder_area=”post_content”]We have been observing for some time now that CFOs of companies with weaker credit quality (BBB or lower) are not sitting idly by, but are in some cases taking drastic measures to defend their company\u2019s credit rating. [\/et_pb_text][et_pb_divider _builder_version=”4.27.7″ _module_preset=”default” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” divider_weight=”2px” sticky_enabled=”0″][\/et_pb_divider][et_pb_text _builder_version=”4.27.7″ _module_preset=”default” header_3_font=”|700|||||||” header_3_font_size=”20px” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” text_font=”Celias – medium||||||||” text_font_size=”21px” sticky_enabled=”0″]<\/p>\n Closing Words<\/p>\n [\/et_pb_text][et_pb_text _builder_version=”4.27.0″ _module_preset=”default” header_3_font=”|700|||||||” header_3_font_size=”20px” custom_padding=”||20px||false|false” global_colors_info=”{}” theme_builder_area=”post_content”]For some companies, dividend cuts may come too late to prevent a downgrade into the high-yield segment. With the right selection, however, the segment within the EUR investment-grade universe rated BBB or lower continues to offer attractive opportunities.[\/et_pb_text][et_pb_text _builder_version=”4.27.0″ _module_preset=”default” text_font_size=”14px” global_colors_info=”{}” theme_builder_area=”post_content”]Source: Bloomberg, percentage of publicly traded companies in the Bloomberg Pan-European Aggregate: Industrial Index with a dividend decline of at least 50% compared to the previous year (analyst estimate). As of March 28, 2024.<\/span>[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.25.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_row _builder_version=”4.25.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_column type=”4_4″ _builder_version=”4.25.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_toggle title=”Risks” open_toggle_background_color=”RGBA(255,255,255,0)” closed_toggle_background_color=”RGBA(255,255,255,0)” icon_color=”#000000″ open_icon_color=”#000000″ _builder_version=”4.25.2″ _module_preset=”default” border_width_all=”0px” border_width_bottom=”1px” border_color_bottom=”#93642e” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n Price losses due to rising yields and\/or increased risk premiums are possible. Even a total loss cannot be ruled out. Past performance is not indicative of future results, nor can future performance be guaranteed.<\/p>\n [\/et_pb_toggle][et_pb_toggle title=”Disclaimer” open_toggle_background_color=”RGBA(255,255,255,0)” closed_toggle_background_color=”RGBA(255,255,255,0)” icon_color=”#000000″ open_icon_color=”#000000″ _builder_version=”4.27.0″ _module_preset=”default” border_width_all=”0px” border_width_bottom=”1px” border_color_bottom=”#93642e” global_colors_info=”{}” theme_builder_area=”post_content”]<\/p>\n This marketing communication, as defined by the Securities Trading Act, is provided solely for informational purposes and should not be construed as personal investment advice, a recommendation, or a solicitation to buy, sell, or hold a financial instrument, or to adopt an investment strategy.<\/p>\n The opinions and statements contained in this document reflect the current assessment as of the date of publication. The information provided does not constitute a complete analysis of all material facts relating to a country, region, or market.<\/p>\n Any statements regarding market developments, returns, price gains, or other capital appreciation, as well as risk metrics, are merely forecasts for which we assume no liability. In particular, past performance, simulations, or forecasts are not a reliable indicator of future performance. Asset values may rise or fall. [\/et_pb_toggle][\/et_pb_column][\/et_pb_row][\/et_pb_section]<\/p>\n","protected":false},"excerpt":{"rendered":" More and more companies with weaker credit quality in the investment-grade segment are cutting their dividends to prevent a downgrade into the high-yield segment. However, this shift offers exciting opportunities for active investors. Learn more in this Spotlight!<\/p>\n","protected":false},"author":1,"featured_media":3090,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_seopress_titles_title":"","_seopress_titles_desc":"","_seopress_robots_index":"","_seopress_robots_follow":"","_seopress_robots_imageindex":"","_seopress_robots_snippet":"","_seopress_robots_primary_cat":"none","_seopress_robots_breadcrumbs":"","_seopress_robots_freeze_modified_date":"","_seopress_robots_custom_modified_date":"","_seopress_robots_canonical":"","_seopress_social_fb_title":"","_seopress_social_fb_desc":"","_seopress_social_fb_img":"","_seopress_social_fb_img_attachment_id":0,"_seopress_social_fb_img_width":0,"_seopress_social_fb_img_height":0,"_seopress_social_twitter_title":"","_seopress_social_twitter_desc":"","_seopress_social_twitter_img":"","_seopress_social_twitter_img_attachment_id":0,"_seopress_social_twitter_img_width":0,"_seopress_social_twitter_img_height":0,"_seopress_redirections_value":"","_seopress_redirections_enabled":"","_seopress_redirections_enabled_regex":"","_seopress_redirections_logged_status":"both","_seopress_redirections_param":"","_seopress_redirections_type":301,"_seopress_analysis_target_kw":"","_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[39,34],"tags":[],"class_list":["post-8361","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-high-yield","category-specialist-article"],"_links":{"self":[{"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/posts\/8361","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/comments?post=8361"}],"version-history":[{"count":2,"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/posts\/8361\/revisions"}],"predecessor-version":[{"id":8363,"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/posts\/8361\/revisions\/8363"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/media\/3090"}],"wp:attachment":[{"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/media?parent=8361"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/categories?post=8361"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ha-gim.com\/en\/wp-json\/wp\/v2\/tags?post=8361"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
In addition to significant dividend cuts, divestitures of business units or capital increases have been announced or already implemented with the clear intention of strengthening the company\u2019s balance sheet.
As early as 2023, companies with lower credit ratings in the EUR investment-grade universe implemented substantial dividend cuts (at least 50% compared to the previous year). Specifically, 7% of companies rated BBB or lower cut their dividends. This represents nearly a doubling compared to the previous year. Based on analyst expectations and corporate announcements, further substantial dividend cuts are expected to follow in 2024.<\/p>\n
All information has been carefully compiled, in some cases based on information from third parties. Individual pieces of information may, in particular due to the passage of time, changes in the law, or current market developments, prove to be no longer accurate\u2014or no longer fully accurate\u2014even at short notice, and may change at any time without prior notice.
Therefore, no warranty is provided as to the accuracy, completeness, or timeliness of any information. The information is based on our assessment of the current legal and tax situation. To the extent that tax or legal matters are addressed, the recipient should discuss these with their tax advisor or attorney.
Investments in financial instruments involve both opportunities and risks. HAGIM\u2019s policy on handling conflicts of interest is published online at www.ha-gim.com\/rechtliche-hinweiserechtliche-hinweise.
The information contained herein is intended solely for professional clients or eligible counterparties. This information document is not intended for U.S. citizens or persons permanently residing in the United States, nor may it be distributed in the United States.<\/p>\n