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The 9fin European distressed team has a long list of 2026 resolutions: 36 names on our watchlist which we aim to follow closely this year. But even beyond this, we expect more distressed situations to emerge.

Geopolitical events will remain central, with all eyes on the developments following the US capture of President Nicolas Maduro of Venezuela, which has the world’s largest oil reserves. Challenges that surfaced in 2025 will persist this year — but with increasingly creative solutions. “The main trend is just continued uncertainty, mainly political but with impacts on the economics,” Michael Fiddy, co-leader of global restructuring, bankruptcy and insolvency at Mayer Brown told 9fin. “I think that leads to cautious behaviours in the marketplace.”

Europe's expected default rate will reach 3.25% through September 2026, according to Ekaterina Tolstova, credit analyst at S&P Global. That compares to 3.6% as of end-November 2025, she pointed out.

Some problems remain well-known, with tariffs and interest rates at the top of the list. “There is potential for geopolitical and trade tensions that could lead to a disruption of supply chains and can impact certain sectors," Tolstova said.

Refinancing remains an issue. European issuers rated CCC+ and below will need to refinance around €43bn–€45bn of debt annually in 2026 and 2027, according to S&P estimates — more than the quantum of B- debt that must be refinanced.

"We consider that there is little scope for additional interest rate cuts in the foreseeable few months, and this might impact the lower rated issuers because refinancing is still at a higher cost compared to previous periods," Tolstova said. “Most of these issuers were refinancing in 2020-2021 and at that point of time the interest rates were much lower.”

In this outlook, we'll walk you through the names that struggled last year and are expected to remain troubled this year — as well as those that will start to falter.

We'll also forecast the main restructuring trends after an intense 2025 (For a full recap, don’t miss our European Distressed Year in Review 2025). “What I expect to see is much more of a 'mix and match' approach in terms of restructuring solutions, which can be a good thing,” said Olga Galazoula, global head of restructuring and special situations at Ashurst.

Expect some déjà vu. “We’re seeing a wave of repeat situations. Particularly on the private credit side, where we did some kind of more benign forms of restructuring, covenant or more modest equity injections,” Galazoula said,”[issuers] are now returning for deeper restructurings.”