Fitch issues recovery warning for second lien

Fitch Ratings has warned investors of weak recovery prospects for European second lien, as increasingly leveraged companies face a more challenging economic environment. It expects the default rate to increase over the next 12-18 months, and cautions buyers to focus on recovery prospects when considering new investments.

"Although we have not yet recorded a default on a European Fitch-rated second-lien transaction, during H1 2006 the issuer default ratings of two second-lien issuers were rated at

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