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Asset performance across EMEA structured finance (SF) is expected to deteriorate in 2023. Borrowers will face increased pressure as a result of real-wages shocks, driven by inflationary pressures and increasing interest rates. Asset and property values in some sectors are expected to decline due to decreasing demand, with rising costs and labour market stresses also affecting consumer spending and increasing pressure on households and businesses. CMBS asset performance will be affected by a tightening of financial conditions across the different commercial property markets and a weakening of occupational demand drivers. Industrial properties and offices are most at risk, although ratings should be largely shielded from the deteriorating asset performance. RMBS assets will be affected by lower demand and slowing home price growth or even falling prices. Fixed-interest rates and government support measures should partially shield some borrowers from cost-of-living pressures, but higher arrears are expected. The deteriorating asset performance will be worse in floating-rate markets and in UK loans refinancing in 2023. Leverage loans CLO defaults will increase in 2023, relative to 2022, driven by “amend and extend” (A&E) restructurings. ���������ֳ� expects SMEs to be more affected than corporates as they are less able to pass on higher input costs to borrowers, with few corporates needing to refinance CLO-held term loans in 2023.