Borrowing is getting costlier again across Europe. For most companies, that is an inconvenience. For those already drowning in debt, it can be a matter of survival.
Some of the names feeling the pinch are surprisingly well-known. Think of the company behind Legoland and Madame Tussauds, the owner of Lipton tea, one of the continent's largest residential property managers, and the telecom empire built by billionaire Patrick Drahi. Then there is Aston Martin, maker of James Bond's iconic cars.
Many of these firms loaded up on cheap debt when interest rates hovered near zero. Now, with the European Central Bank reversing its easing cycle, they are stuck with credit ratings in the CCC range—just a few notches above default—and a wall of maturities approaching.
The ECB's reversal and the squeeze on weak credit
After cutting rates through 2025, the ECB has changed course. It raised its deposit rate in June—the first hike in nearly three years—as geopolitical tensions, including the conflict involving Iran, pushed energy prices and inflation higher. A second increase followed this month, bringing the rate to 2.5%. The US Federal Reserve has also lifted its rate to a range of 3.75% to 4%.
For a healthy company, a small rate rise is barely noticeable. For a struggling one, it can mean the difference between securing a new loan and being shut out of the market. "Higher for longer is a slow squeeze for low-quality credit," Torsten Slok, chief economist at Apollo Global Management, wrote in a note. He added that rate rises work "with a lag and unevenly"—their impact takes time to materialise and hits some borrowers harder than others.
The pain often takes years to surface because companies don't refinance all their debt at once. But every maturity is a test. According to S&P Global Ratings, European collateralised loan obligations (CLOs) held €5.3 billion of loans to CCC-rated companies maturing in 2028 as of end-June, up sharply from €3.5 billion at the end of 2025. Six of the ten largest CCC borrowers identified by S&P face debt maturities in 2027 or 2028.
Europe's most troubled borrowers
Here is where the pressure is greatest, based on S&P's July analysis of the ten largest CCC-rated borrowers in European CLO portfolios.
10. Colisée
France's Colisée, which operates nursing and elderly-care homes across several countries, shows what happens when a debt burden becomes too heavy. A Paris court approved its restructuring plan in April, with lenders swapping part of their loans for equity and pushing most remaining debt out to 2031. S&P treated the deal as a default, then upgraded the company to CCC+. Its senior debt was yielding only around 5% in July—the pain has already been taken.
9. Stow Group
Belgium's Stow Group makes warehouse storage systems and automated logistics equipment—think racks and shelving for Amazon-style fulfilment centres. Blackstone is the majority shareholder. S&P rates it CCC+ with a stable outlook, and European CLOs held €364 million of its loans. Its next maturity is in September 2028, with senior debt yielding around 9%.
8. Merlin Entertainments
Merlin owns some of Europe's best-known attractions, including Legoland parks, Madame Tussauds, Sea Life aquariums, and the London Eye. Controlled by KIRKBI, the Lego family's investment vehicle, alongside Blackstone and CPP Investments, it had €583 million of loans in European CLOs. In July, its senior debt yielded 12–13%. But investors have since calmed: in early September, Merlin secured new financing to address 2027 maturities, and its 4.5% euro bond due November 2027 jumped from around 95 cents to 98 cents on the euro, implying a yield of roughly 6–7%. The market is saying Merlin remains highly indebted, but its immediate refinancing risk has eased.
7. Solera
US-based Solera provides software for the motor industry—car insurers use it to estimate accident damage, repair shops to manage claims, and vehicle businesses to access data platforms. Its loans are widely held by European funds. Vista Equity Partners owns the company. S&P rates it CCC+, with European CLOs holding around €515 million of its debt. Its next major maturity is in March 2028, and its senior debt yielded roughly 11–14% in July.
6. AD Education
AD Education runs private colleges and specialist schools, particularly in design, communication, and digital skills. The French group, majority-owned by Ardian, has operational problems: S&P downgraded it to CCC+ in May as profitability weakened. European CLOs held €343 million of its loans. Its debt doesn't mature until May 2031, but its senior debt was yielding about 15% in July.
5. Pharmanovia
British-based Pharmanovia sells established and specialist medicines globally. Triton Partners is the majority owner. S&P cut the company to CCC+ in January, calling its capital structure unsustainable. European CLOs held €485 million of its loans. Its nearest maturity is in August 2029, but investors are not relaxed: its senior debt was yielding around 17% in July.
4. Lipton Teas and Infusions
The owner of Lipton tea, based in the Netherlands, has been struggling under a heavy debt load. European CLOs held significant exposure, and its senior debt yields have been in double digits. The company's challenges reflect broader issues in the consumer goods sector, where input costs and changing consumer habits bite.
The list goes on, with other names like Aston Martin and Patrick Drahi's Altice also hovering near the bottom of the credit spectrum. For these companies, the path forward is narrow: they must either refinance at punitive rates, restructure, or hope that central banks blink first.
As the Bank of England holds rates and the ECB continues its tightening, the message is clear: the era of cheap money is over, and Europe's weakest borrowers are feeling the chill.
