More than half of a sample of European companies bought by private equity sponsors over the past couple of years are trailing their earnings forecasts and debt ratio targets, raising the prospect these companies may breach their debt covenants and default, according to new research.

A report from rating agency Standard & Poor’s found 53% of companies are behind on their forecasts for earnings before interest, tax, depreciation and amortisation while 50% had more debt on their balance sheet than planned.