"The U.S. market, is about 20 percent oil and gas related and then if you add the mining and the capital expenditure, that supports both of those industries. It is starting to become a pretty significant part of the market - and that's why people are concerned," Head of European Leveraged Finance at Fitch Ratings, Edward Eyerman told CNBC Tuesday.
Eyerman noted that a major risk is the number of issuers with both dollar denominated debt and euro denominated debt, with contagion from the former into the latter. He added that this could lead to general weakness in the European high-yield space.
"If you have got a tranche in the U.S. that is pricing out because investors are selling high-performing assets in order to avoid recognising losses in oil and gas, the euro tranche will have to price up with the dollar tranche and so the cost of debt rises irrespective of what (ECB President Mario) Draghi can do," Eyerman said.
"I am not saying there is an event coming, but I am saying our liabilities are riskier than what most people appreciate. We don't have any maturities for 3 or 4 years, there is plenty of liquidity on balance sheets, but most borrowers have put themselves in the position that the need the capital markets to be in the same condition as they are today as in 3 or 4 years and that is where the risk has built up," he added.