European credit markets are far from immune to global trade headwinds, as indicated by recent declines in primary market issuance and secondary market pricing. Speculative bond issuance was muted, exacerbated by fund outflows, whilst loan issuance was more active, driven partially by increased collateralized loan obligation (CLO) formation and continued corporate refinancing and M&A activity and early 2025 expectations for a decrease in funding costs. Widening credit spreads and rising yields, along with a pickup in volatility amid continued market uncertainty, may dampen leveraged loan supply and put additional pressure on lower-rated borrowers due to rising borrowing costs and a more selective investor base. S&P Global Ratings' analysis of the impact of the U.S. administration's 25% tariffs on the eurozone rated universe suggests they will have limited or very limited direct effects on issuers, as in many cases there are mitigating factors.