Credit spreads will tighten in 2002 as the benefits of a gradual recovery in credit quality become apparent, European analysts have said.
Géraud Charpin, senior credit strategist at BNP Paribas, said: "We should begin to see the benefits by mid-year. The finances of issuers should stop deteriorating, but will still be weak enough to focus management's attention. This will prevent a rapid return to expansion and ventures into mergers and acquisitions activity, which have, in the past, been a major threat to credit quality."
