If Europe were to experience a sovereign default, the effects on corporate credit instruments would be limited, according to Challenger-backed boutique credit fund manager Bentham Asset Management.

"The sovereign debt stuff is a curious thing; I don't think that is a corporate credit event," Bentham Asset Management managing director Richard Quin said.

"There is a low-probability event that it could be a serious restructure."

Quin said a worst-case scenario was already reflected in market prices.

"The market is already pricing in a significant restructure. Greece is trading at 800 [basis points] and over; that is pricing at a pretty severe restructure."

Although prices in the sovereign bond market reflected distressed situations, the market for corporate credit had been gradually improving, he said.

"Over the last two quarters you have seen more ratings upgrades than downgrades in the non-investment-grade corporate area," he said.

"You actually do have some real de-leveraging going on and you had some growth in profits.

"You have seen the opposite as to what you have seen in the sovereigns situations where you have seen balance sheets deteriorate."

The pressure on governments could see a period of lower growth, but that was more likely to affect equities than corporate bonds, he said.

"When you have stress on sovereigns and you see people decreasing their stimulus, it leads to lower growth. Lower growth is not necessarily as bad for credit as it is for equities," he said.