Surging borrowing costs, vanishing buyers: more pain ahead for European junk bonds

Borrowing costs for junk-rated European companies have nearly tripled in less than a month, and with the market for new debt issuance shuttered, there could be a lot more pain in store for firms needing to raise fresh money to redeem debt.

Now, just halfway through March, the yield is on course for its biggest monthly rise since October 2008, when markets were dealing with the effects of investment bank Lehman Brothers' collapse. There is likely more to come, with Deutsche Bank revising targets for the European high-yield market on Monday to recession levels at a spread of over 1,000 basis points.

Names with significant amounts of debt due for repayment next year include Germany's Thyssenkrupp , Telecom Italia and shipping giant CMA CGM, according to 9fin, a data provider focused on high-yield markets.

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