/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/190924.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Tuesday, September 24, 2019, Vol. 20, No. 191 Headlines B E L A R U S BELARUSIAN NATIONAL: Fitch Affirms B IFS Rating, Outlook Stable I R E L A N D CLOVERIE PLC 2007-52: Fitch Affirms BB Rating on $100MM Notes CONTEGO CLO VII: Fitch to Rate Class F Debt 'B-(EXP)' ORWELL PARK: Moody's Hikes Rating on EUR12MM Class E Notes to B1 U K R A I N E MHP LUX: Fitch Assigns B+ Rating to $350MM Sr. Unsec. Bond U N I T E D K I N G D O M CHARLES STREET 1: DBRS Confirms BB(high) Rating on Class C Notes DEBENHAMS PLC: Wolverhampton Store to Close Under CVA E-CARAT 10: DBRS Assigns Prov. B Rating on Class G Notes HOMEBASE: Queensway Store to Close on Dec. 20 KIER GROUP: Posts GB245-Mil. Loss Amid Restructuring NEWDAY FUNDING 2019-2: DBRS Assigns Prov. BB Rating on Cl. E Notes NEWDAY FUNDING 2019-2: Fitch Assigns B+ Rating on Class F Notes SABADELL CONSUMO 1: DBRS Gives Prov. B(high) Rating on Cl. D Notes SELECT: Westwood Cross Store to Close Next Month, 12 Jobs Affected THOMAS COOK: First Repatriation Flights Land After Collapse THOMAS COOK: PPF to Assess Funding Levels of Pension Schemes THOMAS COOK: Rescue Talks Fail, Goes Into Compulsory Liquidation - - - - - ============= B E L A R U S ============= BELARUSIAN NATIONAL: Fitch Affirms B IFS Rating, Outlook Stable --------------------------------------------------------------- Fitch Ratings affirmed Belarusian National Reinsurance Organisation's Insurer Financial Strength Rating at 'B'. The Outlook is Stable. KEY RATING DRIVERS The rating reflects Belarus Re's exclusive position in the local reinsurance sector underpinned by legislation, good capitalisation and sustainable earnings generation. These rating drivers are however partially offset by the weak quality of the reinsurer's investment portfolio. The Belarusian state has established strong support for Belarus Re in its legal framework, in its aim to develop a well-functioning reinsurance system. Fitch believes that the government could support Belarus Re over other state-owned companies, because of its small size and systemic importance to the financial sector. Fitch views Belarus Re's business profile as 'Moderate' compared with that of other Belarusian insurers. The reinsurer benefits from its exclusive near-monopoly market position, which it gradually established since 2006 and in full from 2014. However, Belarus Re remains small in scale with somewhat limited diversification in its portfolio. Regulations oblige local primary insurers to reinsure risks exceeding the permitted net retention of 20% of their equity and to offer these obligatory cessions to Belarus Re first. The reinsurer has the right to reject cessions, although Fitch believes such cases are rare in practice as the reinsurer is often involved at the initial stage of the underwriting of large risks. A set of new insurance regulations were issued in May 2019 in Belarus. One of them introduces an opportunity for local primary insurers to cede risks to foreign reinsurers subject to certain conditions. However, Fitch does not expect Belarus Re's credit profile to be affected by these new provisions in the short- to medium-term. Fitch views Belarus Re's investment portfolio as weak. Based on domestic prudential regulations, Belarus Re may only invest in instruments issued by the Belarusian government or government-owned entities. As a result, its sovereign investment concentration risk is rather high, with sovereign-related investments at 137% of equity at end-2018 (133% at end-2017). The diversification of the portfolio by type of instruments and issuer is weak, with fixed-income instruments, including cash and bank deposits, accounting for 82% of the portfolio. The portfolio of equities is highly concentrated with the holding in one state-owned bank accounting for 18% of total investments or 23% of equity. Positively, Belarus Re has reduced its investments in zero-coupon government bonds to BYN35 million at end-6M19 from BYN70 million at end-2018 and plans to sell the remainder in 1H20. Belarus Re is exposed to FX mismatch on its balance sheet. A large portion of Belarus Re's liabilities are denominated in foreign currencies, with 85% of its technical reserves denominated in currencies other than the Belarusian rouble at end-2018. The reinsurer holds a significant excess of foreign currency-denominated assets over foreign currency-denominated liabilities, which provides ample liquidity for large claims, but exposes the reinsurer's equity to potential local currency appreciation. In 2018 Belarus Re's risk-adjusted capital modestly weakened but remained 'Strong' as per Fitch's Prism Factor Based Model (FBM), in line with the 2017 score after the restatement of the reinsurer's 2017 accounts. Sustained profit generation underpinned available capital amid 26% growth of net written premiums in 2018. Belarus Re reported a notable profit of BYN27 million in 2018, in line with 2017's, and significantly stronger than in 2016. Its return on equity amounted to 19% in 2018, modestly weaker than 20% in 2017, after the downwards revaluation of equity due to equity investments. Belarus Re's underwriting result has remained strongly positive, although the combined ratio grew to 79% in 2018, from 58% in 2017 and an average 64% in 2013-2017, with the loss ratio being the main contributor to the deterioration. Limited retained losses in the marine, aviation and transport line as well as a single large loss in the domestic financial risks line put pressure on the loss ratio in 2018. RATING SENSITIVITIES A change in Belarus's Local-Currency Long-Term Issuer Default Rating (IDR) is likely to lead to a corresponding change in the Belarus Re's IFS Rating; this is because the IDR drives its assessment of the reinsurer's asset risk, given the asset concentration in sovereign and sovereign-related instruments. Significant change in the reinsurer's relationship with the government would also likely have a direct impact on Belarus Re's ratings. ============= I R E L A N D ============= CLOVERIE PLC 2007-52: Fitch Affirms BB Rating on $100MM Notes ------------------------------------------------------------- Fitch Ratings affirms the Cloverie PLC 2007-52 USD10,000,000 credit linked notes at 'BBsf'. Fitch has removed the CLNs from Rating Watch Negative and assigned a Stable Outlook. The Stable Outlook on the CLNs reflects the assessment of the transaction's main risk driver, Vale S.A., which is the lowest-rated risk-presenting entity. KEY RATING DRIVERS The rating considers the credit quality of Citigroup Inc., (A/Stable), as the swap counterparty and issuer of the qualified investment. The rating also considers the Issuer Default Rating (IDR) of the reference entity, Vale, which is subject to restructuring as a credit event. Therefore, based on the CLN "Single-and Multi-Name Credit-Linked Notes Rating Criteria," dated April 24, 2019, Fitch has applied a one-notch downward adjustment to Vale's rating to 'BB+'/Outlook Stable from 'BBB-'/Outlook Stable, prior to applying the "two-risk matrix." The Stable Outlook reflects the Outlook on the main risk driver, Vale, which is the lowest-rated risk-presenting entity. RATING SENSITIVITIES The CLNs remains sensitive to the ratings migration of the underlying risk-presenting entities. A downgrade of the weakest link would result in a downgrade to the CLNs according to Fitch's CLN criteria. CONTEGO CLO VII: Fitch to Rate Class F Debt 'B-(EXP)' ----------------------------------------------------- Fitch Ratings assigned Contego CLO VII DAC expected ratings. Contego CLO VII DAC is a securitisation of mainly senior secured loans (at least 90%) with a component of senior unsecured, mezzanine, and second-lien loans. Note proceeds will beused to fund a portfolio with a target par of EUR450 million. The portfolio will be actively managed by Five Arrows Managers LLP. The CLO has a 4.5-year reinvestment period and an 8.5-year weighted average life. The assignment of final ratings is contingent on the receipt of final documenations conforming to information already received. Contego CLO VII DAC Class A; LT AAA(EXP)sf; Expected Rating Class B-1; LT AA(EXP)sf; Expected Rating Class B-2; LT AA(EXP)sf; Expected Rating Class C; LT A(EXP)sf; Expected Rating Class D; LT BBB-(EXP)sf; Expected Rating Class E; LT BB(EXP)sf; Expected Rating Class F; LT B-(EXP)sf; Expected Rating Sub. Notes; LT NR(EXP)sf; Expected Rating KEY RATING DRIVERS 'B' Portfolio Credit Quality Fitch assesses the average credit quality of obligors to be in the 'B' category. The Fitch weighted average rating factor (WARF) of the identified portfolio is 32.6 while the indicative covenanted maximum Fitch WARF is 33.0. High Recovery Expectations At least 90% of the portfolio will comprise senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch weighted average recovery rate (WARR) of the identified portfolio is 63.6%, while the indicative covenanted minimum Fitch WARR is 63.2%. Diversified Asset Portfolio The transaction will include several Fitch test matrices corresponding to two top 10 obligors concentration limit. The manager can interpolate within and between two matrices. The transaction also includes various concentration limits, including the maximum exposure to the three largest (Fitch-defined) industries in the portfolio at 40%. These covenants ensure that the asset portfolio will not be exposed to excessive concentration. Portfolio Management The transaction has a 4.5-year reinvestment period and includes reinvestment criteria similar to those of other European transactions. Fitch's analysis is based on a stressed-case portfolio with the aim of testing the robustness of the transaction structure against its covenants and portfolio guidelines. Cash Flow Analysis Fitch used a customised proprietary cash flow model to replicate the principal and interest waterfalls and the various structural features of the transaction, and to assess their effectiveness, including the structural protection provided by excess spread diverted through the par value and interest coverage tests. Up to 7.5% of the portfolio can be invested in fixed-rate assets, while fixed-rate liabilities represent 5.1% of the target par. Fitch modelled both 0% and 7.5% fixed-rate buckets and found that the rated notes can withstand the interest rate mismatch associated with each scenario. RATING SENSITIVITIES A 125% default multiplier applied to the portfolio's mean default rate, and with this increase added to all rating default levels, would lead to a downgrade of up to two notches for the rated notes. A 25% reduction in recovery rates would lead to a downgrade of up to four notches for the rated notes. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY The majority of the underlying assets have ratings or credit opinions from Fitch and/or other Nationally Recognised Statistical Rating Organisations and/or European Securities and Markets Authority-registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information. Overall, Fitch's assessment of the asset pool information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ORWELL PARK: Moody's Hikes Rating on EUR12MM Class E Notes to B1 ---------------------------------------------------------------- Moody's Investors Service upgraded the ratings on four Classes of Notes issued by Orwell Park CLO Designated Activity Company: EUR42,000,000 Refinancing Class A-2 Senior Secured Floating Rate Notes due 2029, Upgraded to Aa1 (sf); previously on Aug 18, 2017 Definitive Rating Assigned Aa2 (sf) EUR24,000,000 Refinancing Class B Senior Secured Deferrable Floating Rate Notes due 2029, Upgraded to A1 (sf); previously on Aug 18, 2017 Definitive Rating Assigned A2 (sf) EUR21,500,000 Refinancing Class C Senior Secured Deferrable Floating Rate Notes due 2029, Upgraded to Baa1 (sf); previously on Aug 18, 2017 Definitive Rating Assigned Baa2 (sf) EUR12,000,000 Class E Senior Secured Deferrable Floating Rate Notes due 2029, Upgraded to B1 (sf); previously on Aug 18, 2017 Affirmed B2 (sf) Moody's has also affirmed the ratings on the following notes: EUR243,000,000 Refinancing Class A-1 Senior Secured Floating Rate Notes due 2029, Affirmed Aaa (sf); previously on Aug 18, 2017 Definitive Rating Assigned Aaa (sf) EUR25,000,000 Class D Senior Secured Deferrable Floating Rate Notes due 2029, Affirmed Ba2 (sf); previously on Aug 18, 2017 Affirmed Ba2 (sf) Orwell Park CLO Designated Activity Company, issued in June 2015 is a collateralised loan obligation (CLO) backed broadly by syndicated first lien senior secured corporate loans. The transaction was refinanced in August 2017. The portfolio is managed by Blackstone/GSO Debt Funds Management Europe Limited. The transaction's reinvestment period has ended in July 2019. RATINGS RATIONALE The upgrades of the Notes are primarily a result of the transaction having reached the end of the reinvestment period in July 2019. In light of reinvestment restrictions during the amortisation period, and therefore the limited ability to affect significant changes to the current collateral pool, Moody's analysed the deal assuming a higher likelihood that the collateral pool characteristics would maintain an adequate buffer relative to certain covenant requirements. In particular, Moody's assumed that the deal will benefit from a shorter amortization profile than it had assumed at the last rating action in 2017 when the transaction was refinanced. The key model inputs Moody's uses in its analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on its published methodology and could differ from the trustee's reported numbers. In its base case, Moody's analysed the underlying collateral pool as having a performing par and principal proceeds balance of EUR 400.35 million, a weighted average default probability of 22.0% (consistent with a WARF of 2859 over a WAL of 5.10 years), a weighted average recovery rate upon default of 45.87% for a Aaa liability target rating, a diversity score of 51, a weighted average spread of 3.56% and a weighted average coupon of 4.56%. The default probability derives from the credit quality of the collateral pool and Moody's expectation of the remaining life of the collateral pool. The estimated average recovery rate on future defaults is based primarily on the seniority of the assets in the collateral pool. In each case, historical and market performance and a collateral manager's latitude to trade collateral are also relevant factors. Moody's incorporates these default and recovery characteristics of the collateral pool into its cash flow model analysis, subjecting them to stresses as a function of the target rating of each CLO liability it is analysing. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in March 2019. Counterparty Exposure: The rating action took into consideration the Notes' exposure to relevant counterparties, such as account bank and swap providers, using the methodology "Moody's Approach to Assessing Counterparty Risks in Structured Finance" published in January 2019. Moody's concluded the ratings of the Notes are not constrained by these risks. Factors that would lead to an upgrade or downgrade of the ratings: This transaction is subject to a high level of macroeconomic uncertainty, which could negatively affect the ratings on the Notes, in light of uncertainty about credit conditions in the general economy. CLO Notes' performance may also be impacted either positively or negatively by: (1) the manager's investment strategy and behavior; and (2) divergence in the legal interpretation of documentation by different transactional parties because of embedded ambiguities. Additional uncertainty about performance is due to the following: Portfolio amortisation: The main source of uncertainty in this transaction is the pace of amortisation of the underlying portfolio, which can vary significantly depending on market conditions and have a significant impact on the Notes' ratings. Amortisation could accelerate as a consequence of high loan prepayment levels or collateral sales by the collateral manager or be delayed by an increase in loan amend-and-extend restructurings. Fast amortisation would usually benefit the ratings of the Notes beginning with the Notes having the highest prepayment priority. In addition to the quantitative factors that Moody's explicitly modelled, qualitative factors are part of the rating committee's considerations. These qualitative factors include the structural protections in the transaction, its recent performance given the market environment, the legal environment, specific documentation features, the collateral manager's track record and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision. ============= U K R A I N E ============= MHP LUX: Fitch Assigns B+ Rating to $350MM Sr. Unsec. Bond ---------------------------------------------------------- Fitch Ratings assigned MHP Lux S.A.'s new USD350 million bond due in 2029 a final senior unsecured rating of 'B+' with a Recovery Rating of 'RR4' (50%). The final rating is in line with the expected rating that Fitch assigned to the issue on September 10, 2019 and follows the pricing and receipt of the final documentation of the new issue, which conform to the information already received. MHP Lux S.A. is a wholly owned subsidiary of MHP SE. MHP has a Long-Term Foreign-Currency Issuer Default Rating of 'B+' with Stable Outlook, after its upgrade on September 10, 2019. The rating action reflects an upgrade of the Local Currency IDR and the Country Ceiling of Ukraine to 'B' from 'B-' on September 6, 2019. KEY RATING DRIVERS Rating Aligned with Eurobonds: The USD350 million bonds issued in September 2019 are guaranteed on a senior basis by MHP and its major operating subsidiaries. Thus, the bond rating is aligned with the current senior unsecured ratings on the existing Eurobonds issued by parent MHP and MHP Lux S.A. Fitch understands from management and prospectus that proceeds from the new issue will be used to repay most of the company's existing short-term maturities (USD330 million as of end-June 2019), including a USD79 million Eurobond due 2020, along with some longer-term debt. Fitch does not expect the new issue to have a material impact on gross debt and leverage ratios. Average Recoveries for Unsecured Bondholders: The Eurobonds are treated by Fitch as pari passu with MHP's other senior unsecured debt that is raised primarily at operating companies. There are no structural subordination issues, as the Eurobond is covered by suretyships from operating companies that accounted for more than 80% of MHP's LTM EBITDA to June 30, 2019. Strong Business Profile: The ratings benefit from MHP's strong market position as the dominant poultry and processed meat producer in Ukraine, with larger scale, better access to bank financing and greater vertical integration than that of local competitors and other rated peers globally. The company's ability to further expand and diversify export sales is another driver of MHP's business profile. In a stronger operating environment and subject to the removal of execution risks connected to the company's current investment phase and of liquidity risks, these factors could support a rating in the low-to-mid 'BB' rating category as per Fitch's Protein Rating Navigator. Increasing Diversification: The acquisition of Slovenia-based Perutnina Ptuj D.D (PPJ) in 2019 is beneficial to MHP's business profile, with immaterial impact on the financial profile. PPJ has strong market positions in the Balkan region. It is vertically integrated from the production of animal feeds and poultry breeding to poultry and meat processing and enjoys a high share of added-value products (more than 40% of PPJ's sales). Fitch estimates that PPJ will represent around 7% of MHP's EBITDA in 2019, enabling the company to generate around two-thirds of its revenue and EBITDA from export or outside of Ukraine in 2020. Continued Business Expansion: In 2018 MHP launched the expansion of its Vinnytsia poultry complex - Phase 2 project with a total capex of about USD420 million (estimated USD112 million spent in 2018), with a planned increase of poultry output by around 50% by 2022-23 versus 2017 production volume. MHP has a strong track record of delivering greenfield projects and Fitch does not expect material execution risk for the Phase 2 project. Most of increased volumes are planned to be sold for export, which in conjunction with the acquisition of PPJ is expected to boost the share of overseas markets of revenue to around 68% by 2022 from 59% in 2018. FCF Pressured by High Capex: In addition to elevated capex due to the Phase 2 project, MHP is likely to invest into PPJ's business in the medium term. Although no exact investments into the Slovenian business have been confirmed Fitch conservatively assumes an additional USD50 million annual capex in PPJ from 2020-2022. This is likely to lead to negative free cash flow (FCF) generation in 2020 before it recovers to around 5% of revenue by 2022. Continuing FX Mismatch: FX mismatch continues to weigh on MHP's credit profile, with debt of USD1.5 billion at end-June 2019 mainly denominated in U.S. dollars and euros, while domestic operations accounted for 41% of revenue in 2018. Fitch expects a mild reduction in FX risks over the medium term as poultry exports should continue to grow, particularly once the planned extension of production capacity is completed by 2022. At the same time, MHP's FC IDR benefits from a strong hard-currency debt service coverage, which Fitch calculates would improve to 1.5x in 2020 (1.0x in 2019) with the new Eurobond. Tight Headroom under Covenants: Based on its updated rating case projections post 1H19 financial results, Fitch expects MHP to have tight headroom under its Eurobond debt incurrence covenant of 3x net debt-to-EBITDA in 2019-2020 (its estimate is 2.9x). Such risks are mitigated by MHP's flexibility in capex, both for Phase 2 and PPJ, as well as by the ability to manage working capital effectively to protect cash flows and avoid a breach. Moreover, MHP has permitted debt incurrence of up to USD75 million for general needs, of USD10 million for working capital needs and of USD25 million (under the Eurobond due 2020) for new capital lease contracts, which should be sufficient to finance the company's short-term operating needs. Strong Financial Profile: Fitch expects funds from operations (FFO) adjusted gross leverage at 3.7x at end-2019 (2018: 3.7x), close to Fitch's positive sensitivity for the upgrade of the LC IDR of 3.5x. Fitch estimates that increasing EBITDA from the new capacity expansion, and PPJ will allow MHP to reduce leverage metrics sustainably below this threshold from 2020. DERIVATION SUMMARY MHP has a strong business and financial profile comparable with the 'BB'-rating category, but its LC IDR is constrained by the operating environment in Ukraine. Currently, the rating is also held down by current leverage and execution risks connected to the company's current investment phase and integration of PPJ. Liquidity risks also weigh on the rating but the planed bond issue should redress those. MHP is smaller in business size and has a weaker ranking on a global scale than international meat processors Tyson Foods Inc. (BBB/Stable), Smithfield Foods Inc. (BBB/Stable), BRF S.A. (BB/Stable) and Pilgrim's Pride Corporation (BB/Stable) in global poultry production. This is balanced by higher profitability than most peers' and lower leverage than that of lower-rated international companies in the meat processing sector. MHP's vertically-integrated business model is similar to Agri Business Holding Miratorg LLC's (B/Stable), but the ratings of the latter are constrained by its higher leverage and weaker corporate governance practices. KEY ASSUMPTIONS - Revenue to grow to USD2.2 billion by 2022 - EBITDA margin at 23.4% in 2019 (pro-forma for PPJ), trending towards 25.8% by 2022 - 6.5% CAGR in chicken meat production volume over 2019-2022, driven by the expansion of the Vinnytsia complex - Average hryvnia/US dollar exchange rate at 28.51 in 2019, 30.22 in 2020, and 32.02 in 2021 - Revenue from export of poultry products to increase towards 68% of total sales in 2021, absorbing the majority of production volume growth - No government grants or VAT discounts - Capex at 9%-13% of sales in 2019-2022 - Cash held offshore equal to 75% of total cash - Dividends of USD80 million a year in 2019-2021 - Acquisition of the non-controlling 9.4% shares of PPJ by end-2019 KEY RECOVERY RATING ASSUMPTIONS The recovery analysis assumes that MHP would be considered a going concern in bankruptcy and that it would be reorganised rather than liquidated. Fitch has assumed a 10% administrative claim. MHP's going concern EBITDA is based on 2018 EBITDA pro-forma for PPJ discounted by 40% to reflect vulnerability to FX risks and the volatility of poultry, grain and sunflower seeds prices, as well as costs of certain raw materials. The going-concern EBITDA estimate reflects Fitch's view of a sustainable, post-reorganisation EBITDA level upon which Fitch bases the valuation of MHP. An enterprise value (EV)/EBITDA multiple of 4x is used to calculate a post-reorganisation valuation and reflects a mid-cycle multiple. The multiple is same as for Kernel Holding S.A., a Ukrainian agricultural commodity trader and processor, and is unchanged relative to its previous review. Fitch does not consider MHP's pre-export financing (PXF) facility as fully drawn in its analysis. Contrary to a revolving credit facility (RCF), there are several drawdown restrictions on the PXF, and the availability window is limited to only part of the year. Senior unsecured Eurobonds and unsecured bank loan creditors are structurally subordinated to secured PXF lenders. The principal waterfall results in a 'RR3' Recovery Rating for senior unsecured Eurobonds, including the USD350 million new bonds. However, the Recovery Rating is capped at 'RR4' due to the Ukrainian jurisdiction where the majority of assets and operations are located. Therefore, the senior unsecured Eurobonds are rated 'B'/'RR4'/50%. RATING SENSITIVITIES Developments That May, Individually or Collectively, Lead to Positive Rating Action For LC IDR: - Improved operating environment in Ukraine, for example, reflected in a higher sovereign LC IDR - Reduction in MHP's dependence on the local economy as measured by some decrease in the share of domestic sales in revenue without impairing profitability materially - In both cases, an upgrade would be subject to maintaining adequate liquidity and FFO adjusted gross leverage sustainably below 3.5x (Navigator median for BB is 4x). For FC IDR: - Upgrade of MHP's LC IDR in conjunction with a hard-currency debt service ratio above 1.5x over the next two years, as calculated in accordance with Fitch's methodology "Rating Non-Financial Corporates Above the Country Ceiling" Developments That May, Individually or Collectively, Lead to Negative Rating Action For LC IDR: - FFO adjusted gross leverage above 4.5x and FFO fixed-charge cover below 2.5x on a sustained basis - Negative FCF margin on a sustained basis - Liquidity ratio below 1.2x on a sustained basis - Downgrade of Ukraine's LC IDR to 'B-' or below if not mitigated by Fitch's application of more than one notch rating uplift for MHP. The latter would be justified by increased share of profits generated outside of Ukraine together with MHP's business and financial profiles remaining strong. For FC IDR: - Hard-currency debt service ratio below 1x over following 12 months - Downgrade of MHP's LC IDR LIQUIDITY AND DEBT STRUCTURE Improved Liquidity: As of October 1, 2019, on a pro-forma basis following the issue of the new USD350 million Eurobonds and use of proceeds in line with its expectations, Fitch expects MHP to materially reduce its short-term debt, including USD60 million of outstanding PXF and USD68 million of M&A facility used to acquire PPJ. This will leave MHP with ample liquidity, including USD100 million of undrawn PXF (for sunflower and soybean oil), to fund its working capital cycle over the next 12 months. =========================== U N I T E D K I N G D O M =========================== CHARLES STREET 1: DBRS Confirms BB(high) Rating on Class C Notes ---------------------------------------------------------------- DBRS Ratings Limited confirmed the ratings of the notes issued by Charles Street Conduit Asset Backed Securitization 1 Limited (the Issuer) as follows: -- Class A Notes confirmed at AA (sf) -- Class B Notes confirmed at BBB (high) (sf) -- Class C Notes confirmed at BB (high) (sf) The ratings of the Class A Notes, Class B Notes and Class C Notes (together, the Notes) address the timely payment of interest and ultimate payment of principal on or before the legal final maturity date. The confirmations follow an annual review of the transaction and are based on the following analytical considerations: -- Portfolio performance, in terms of delinquencies, defaults and losses, as of the July payment date. -- Portfolio default rate (PD), loss given default (LGD) and expected loss assumptions on the receivables. -- Available credit enhancement to the notes to cover the expected losses at their respective rating levels. -- No early termination events have occurred. The Issuer is a warehouse securitization of UK first- and second-lien residential mortgages, which include owner-occupied, buy-to-let and bridging mortgages. The mortgage loans are originated and serviced by various subsidiaries of Together Financial Services Limited (Together) including Blemain Finance Limited, Together Commercial Finance Limited (previously, Lancashire Mortgage Corporation Limited), Harpmanor Limited, Auction Finance Limited, Together Personal Finance Limited (previously Cheshire Mortgage Corporation Limited) and Bridging Finance Limited. Each subsidiary is also responsible for the servicing of the respective mortgage loans. Until the Initial Maturity Date falling in September 2022, the Issuer may use principal receipts or available facility commitment amounts to purchase new loan receivables. Each purchased loan needs to meet the eligibility criteria and adhere to the portfolio covenants, all of which have been met to date. The transaction was amended on July 12, 2019 where a swap was implemented to hedge the interest rate risk arising from the fixed-rate loans in the portfolio. The portfolio covenant for fixed-rate loans was also amended, where the maximum permitted fixed-rate loans was increased to 50.0% from 15.0%. At the time of the amendment, DBRS determined that the hedging arrangement had no impact on the ratings of the notes. PORTFOLIO PERFORMANCE As of the July 2019 payment date, loans that were two- to three-months in arrears represented 0.8% of the outstanding portfolio balance, down from 1.1% in July 2018. The 90+ delinquency ratio was 0.5%, stable since July 2018. The cumulative default ratio was 3.7%. PORTFOLIO ASSUMPTIONS DBRS conducted a loan-level analysis of the receivables based on the worst-case portfolio composition. DBRS assumes a base case PD and LGD of 8.1% and 29.1%, respectively. The assumptions continue to be based on the worst-case portfolio composition. CREDIT ENHANCEMENT Subordination to the notes increases with changes in the advance rate or decreases to a floor determined by the Advance Rate Caps. The Class A, Class B and Class C Notes benefit from a minimum subordination of 17.5%, 12.5% and 10.0%, respectively. A Co-Mingling Reserve is in place to cover shortfalls in senior fees, swap payments and Class A interest. The target amount is 1.5% of the outstanding balance of the notes and is replenished through principal collections prior to the Initial Maturity Date. It is currently funded to its target balance of GBP 16.4 million. Lloyds Bank plc acts as the account bank for the transaction. Based on the account bank reference rating of Lloyds Bank plc at AA, which is one notch below the DBRS Long-Term Critical Obligations Rating of AA (high), the downgrade provisions outlined in the transaction documents and other mitigating factors inherent in the transaction structure, DBRS considers the risk arising from the exposure to the account bank to be consistent with the rating assigned to the Class A Notes, as described in DBRS's "Legal Criteria for European Structured Finance Transactions" methodology. HSBC Bank plc acts as the swap counterparty for the transaction. DBRS's private rating of HSBC Bank plc is above the First Rating Threshold as described in DBRS's "Derivative Criteria for European Structured Finance Transactions" methodology. Notes: All figures are in British pound sterling unless otherwise noted. DEBENHAMS PLC: Wolverhampton Store to Close Under CVA ----------------------------------------------------- Richard Guttridge at The Express and Star reports that hopes of Debenhams plc staying open in Wolverhampton look to have been dealt a fatal blow after the high street giant was given the green light to press ahead with its plan to axe 22 stores. The retailer has overcome a challenge to its restructuring program following a ruling at the High Court allowing it to go forward with a company voluntary arrangement (CVA) to shut its least profitable stores, The Express and Star recounts. They include the flagship Mander Centre anchor store, which opened just two years ago as the centrepiece of the newly-refurbished shopping centre, The Express and Star notes. It is on course to close its doors in the new year, barring a last-minute change of heart, The Express and Star states. Discussions were held over the summer about the possibility of Debenhams moving to a smaller unit but hopes of a deal appear to be fading, The Express and Star relays. According to The Express and Star, a Debenhams branch in Birmingham is also among the 22 earmarked for closure. A total of 1,200 jobs are set to go as a result of the restructure, The Express and Star relays. E-CARAT 10: DBRS Assigns Prov. B Rating on Class G Notes -------------------------------------------------------- DBRS Ratings Limited assigned provisional ratings to the following classes of notes (together, the Rated Notes) to be issued by E-CARAT 10 (the Issuer): -- Class A Notes at AAA (sf) -- Class B Notes at AA (sf) -- Class C Notes at AA (low) (sf) -- Class D Notes at A (sf) -- Class E Notes at BBB (low) (sf) -- Class F Notes at BB (sf) -- Class G Notes at B (high) (sf) The Class H Notes are not rated by DBRS. The ratings will be finalized upon receipt of an execution version of the governing transaction documents. To the extent that the documents and information provided to DBRS as of this date differ from the executed version of the governing transaction documents, DBRS may assign different final ratings to the notes. The Rated Notes are backed by a pool of retail auto loan receivables associated with a portfolio of loans related to new and used vehicles originated by Opel Bank GmbH (Opel Bank, the Seller and Servicer) and granted to German borrowers. The transaction includes a one-year revolving period where new receivables may be purchased by the Issuer subject to specific eligibility criteria and portfolio concentration limits. The structure differs from previous E-CARAT transactions originated by Opel Bank in Germany in various ways including the incorporation of a mixed pro rata/(potential sequential) amortization mechanism during the normal redemption period. The Issuer has been established by France Titrization (the Management Company) and BNP Paribas Securities Services (the Custodian) in accordance with the applicable provisions of the French Monetary and Financial Code and the Issuer Regulations. The ratings address timely payment of scheduled interest and ultimate repayment of principal by the legal final maturity date for the Class A Notes. The ratings address ultimate payment (then timely as most senior class) of interest and ultimate repayment of principal by the legal final maturity date for the Class C, Class D, Class E, Class F Notes and Class G Notes. The ratings are based on the following considerations: -- The transaction capital structure, including form and sufficiency of available credit enhancement; -- Credit enhancement levels are sufficient to support DBRS-projected expected cumulative net losses and residual value losses under various stress scenarios; -- The ability of the transaction to withstand stressed cash flow assumptions and repay investors according to the terms under which they have invested; -- Opel Bank's capabilities with regard to originations, underwriting, servicing and its financial strength; -- DBRS conducted an operational risk review of Opel Bank's premises in Russelsheim, Germany and deems it to be an acceptable servicer; -- The transaction parties' financial strength with regard to their respective roles; -- The credit quality of the collateral and historical and projected performance of the Seller's portfolio. -- The sovereign rating of Germany, currently rated AAA with a Stable trend by DBRS; and -- The expected consistency of the transaction's legal structure with DBRS's "Legal Criteria for European Structured Finance Transactions" methodology and the presence of legal opinions that are expected to address the true sale of the assets to the Issuer. The transaction was analyzed in Intex DealMaker. Notes: All figures are in Euros unless otherwise noted. HOMEBASE: Queensway Store to Close on Dec. 20 --------------------------------------------- Henry Woodsford at The Weston, Worle & Somerset Mercy reports that Homebase, in Queensway, will shut its doors on Dec. 20. In August last year, Homebase announced it would be closing 42 of its stores nationwide after creditors voted in favor of a company voluntary arrangement, The Weston, Worle & Somerset Mercy relates. Signs are displayed outside the store informing customers of its closure, with discount sales on offer, The Weston, Worle & Somerset Mercy discloses. According to The Weston, Worle & Somerset Mercy, a Homebase spokesman said: "The affected team members have been informed and have entered into a consultation period." About Homebase Homebase -- http://www.homebase.co.uk/-- is a British home improvement retailer and garden centre with stores across the United Kingdom and Republic of Ireland. Homebase operates over 170 stores in the United Kingdom at December 2018 and another 11 in Ireland. The company moved its headquarters within Milton Keynes in December 2016, from premises previously shared with former sister company Argos. Founded by Sainsbury's and GB-Inno-BM in 1979, the company was owned by Home Retail Group from October 2006, until it was sold to the Australian conglomerate Wesfarmers in February 2016. Wesfarmers' management ended in financial disaster, and in 2018, the company was sold to Hilco Capital for GBP1. The sale to Hilco Capital completed on June 11, 2018, rebranded stores reverted to the Homebase brand soon after. On August 14, 2018, Hilco announced that it would close 42 stores and cut 1,500 jobs through a company voluntary arrangement, which was passed following a vote on August 31, 2018. KIER GROUP: Posts GB245-Mil. Loss Amid Restructuring ---------------------------------------------------- Philip Georgiadis and Gill Plimmer at The Financial Times report that Kier plunged to a GBP245 million loss as the government contractor pushed ahead with an expensive restructuring as questions lingered over its financial health. The group, which is working on Facebook's King's Cross headquarters and the HS2 railway, said it had "experienced a difficult year" after it launched a GBP250 million rights issue in December 2018 to strengthen its balance sheet. It announced the departure of chairman Philip Cox, who oversaw the appointment of the group's new management team and is leaving after just over two years. The pre-tax loss for the 12 months to June compared with a profit of GBP106 million the year before. Chief executive Andrew Davies, who joined in March, launched a turnround plan this year that will result in 1,200 job losses, the suspension of the dividend for two years and the sale of its housebuilding division. The company has been trying to regain the trust of the City after it launched an emergency cash call, revealed an accounting error and issued a surprise profit warning that cost former chief executive Haydn Mursell his job. Revenue for the year slipped to GBP4.12 billion from GBP4.24 billion and Kier said it did not expect an increase in its next financial year, as the broader market environment including Brexit may lead to delays in decision-making by clients. Kier ran into trouble after ramping up debt through acquisitions including Mouchel, May Gurney and McNicholas. The loss included charges of GBP341 million, including GBP39 million of payments to cover redundancies and GBP18 million paid to advisers for its restructuring as well as a GBP43 million hit from the Broadmoor hospital contract. NEWDAY FUNDING 2019-2: DBRS Assigns Prov. BB Rating on Cl. E Notes ------------------------------------------------------------------ DBRS Ratings Limited assigned provisional ratings to the Class A, Class B, Class C, Class D, Class E and Class F Notes (collectively, the Notes) to be issued by NewDay Funding 2019-2 plc (the issuer) as follows: -- AAA (sf) to the Class A Notes -- AA (high) (sf) to the Class B Notes -- A (sf) to the Class C Notes -- BBB (low) (sf) to the Class D Notes -- BB (sf) to the Class E Notes -- B (high) (sf) to the Class F Notes The ratings of the Notes address the timely payment of interest and ultimate repayment of principal by the legal maturity date. The ratings will be finalized upon receipt of an execution version of the governing transaction documents. To the extent that the documents and information provided to DBRS as of this date differ from the executed version of the governing transaction documents, DBRS may assign different final ratings to the Notes. The ratings are based on the considerations listed below: -- The transaction capital structure including the form and sufficiency of available credit enhancement. -- Credit enhancement levels are sufficient to support DBRS's expected charge-off, payment and yield rates under various stress scenarios. -- The ability of the transaction to withstand stressed cash flow assumptions and repay the Notes. -- NewDay Ltd (the seller) and its delegates' capabilities with respect to originations, underwriting, servicing, data processing and cash management. -- An operational risk review of the seller, which is deemed by DBRS to be an acceptable servicer. -- The transaction parties' financial strength with regard to their respective roles. -- The credit quality of the collateral and diversification of the collateral and historical and projected performance of the seller's portfolio. -- The sovereign rating of the United Kingdom, currently rated AAA by DBRS. -- The general consistency of the transaction's legal structure with DBRS's "Legal Criteria for European Structured Finance Transactions" methodology, the presence of legal opinions that are expected to address the true sale of the assets to the issuer and non-consolidation of the issuer with the seller or transferor. -- The expected consistency of the balance-guaranteed, cross-currency interest rate swap with DBRS's "Derivative Criteria for European Structured Finance Transactions" methodology. The transaction cash flow structure was analyzed in DBRS's proprietary tool. The Notes (except the Class A Notes) are indexed to Compounded Daily SONIA rates. To address the risk of negative SONIA rates, DBRS further stressed the downward interest rates, considering the historical differences between LIBOR and SONIA (typically trading below LIBOR). Notes: All figures are in British pound sterling or U.S. dollars unless otherwise noted. NEWDAY FUNDING 2019-2: Fitch Assigns B+ Rating on Class F Notes --------------------------------------------------------------- Fitch Ratings assigned NewDay Funding's Series 2019-2 notes final ratings as follows: Series 2019-2 A: 'AAAsf'; Outlook Stable Series 2019-2 B: 'AAsf'; Outlook Stable Series 2019-2 C: 'Asf'; Outlook Stable Series 2019-2 D: 'BBBsf'; Outlook Stable Series 2019-2 E: 'BBsf'; Outlook Stable Series 2019-2 F: 'B+sf'; Outlook Stable Fitch has simultaneously affirmed Series 2019-1, Series 2018-2, Series 2018-1, Series 2017-1, Series 2015-2, Series VFN-F1 V1 and Series VFN-F1 V2. The notes are issued by NewDay Funding 2019-2 plc and are collateralised by a pool of non-prime UK credit card receivables. KEY RATING DRIVERS Non-Prime Asset Pool Due to the non-prime nature of the underlying assets and non-reward credit card products, NewDay Funding's charge-off rate is higher and its payment rate is lower than other rated UK credit card trusts that are backed by prime credit card receivables that may feature reward schemes. Fitch assumes a steady state charge-off rate of 18%, with a stress on the lower end of the spectrum (3.5x for AAAsf), considering the high absolute level of the steady state assumption and lower historical volatility in charge-offs. Fitch applied a steady state payment rate assumption of 10%, with a median level of stress (45% at AAAsf). Pool Dominated by Open Book The portfolio primarily consists of an open book (93% of the portfolio as of end-June 2019) and a closed book, which have displayed different historical performance trends. The overall pool performance has migrated towards the open book as the closed book amortises, which has been incorporated into Fitch's steady-state asset assumptions. Variable Funding Notes Add Flexibility In addition to Series VFN-F1 providing the funding flexibility that is typical and necessary for credit card trusts, the structure employs a separate originator VFN, purchased and held by NewDay Funding Transferor Ltd. It provides credit enhancement to the rated notes, adds protection against dilution by way of a separate functional transferor interest, and meets the EU and US risk retention requirements. Key Counterparty Reliance Mitigated The NewDay Group acts in several capacities through its various entities, most prominently as originator, servicer and cash manager to the securitisation. In most other UK trusts, these roles are fulfilled by large institutions with strong credit profiles. The degree of reliance is mitigated in this transaction by the transferability of operations, agreements with established card service providers, a back-up cash management agreement and a series-specific liquidity reserve. Stable/Negative Asset Performance Outlook Fitch has a Stable/Negative asset performance outlook for the UK unsecured consumer ABS sector. This outlook reflects the risks that a no-deal Brexit poses to asset performance and rising consumer debt levels compromising the ability of UK households to respond to external shocks. However, Fitch maintains its stable ratings outlook for the sector, as performance remains benign and that any potential deterioration should remain fully consistent with Fitch's steady-state assumptions for UK credit card trusts. RATING SENSITIVITIES Rating sensitivity to increased charge-off rate Increase base case by 25% / 50% / 75% Series 2019-2 A: 'AAsf' / 'AA-sf' / 'A+sf' Series 2019-2 B: 'A+sf' / 'Asf' / 'BBB+sf' Series 2019-2 C: 'BBB+sf' / 'BBBsf' / 'BBB-sf' Series 2019-2 D: 'BB+sf' / 'BBsf' / 'BB-sf' Series 2019-2 E: 'B+sf' / 'Bsf' / NA Series 2019-2 F: NA / NA / NA Rating sensitivity to reduced monthly payment rate (MPR) Reduce base case by 15% / 25% / 35% Series 2019-2 A: 'AAsf' / 'AA-sf' / 'Asf' Series 2019-2 B: 'A+sf' / 'Asf' / 'A-sf' Series 2019-2 C: 'BBB+sf' / 'BBBsf' / 'BBB-sf' Series 2019-2 D: 'BBB-sf' / 'BB+sf' / 'BBsf' Series 2019-2 E: 'BB-sf' / 'B+sf' / 'B+sf' Series 2019-2 F: 'Bsf' / 'Bsf' / 'Bsf' Rating sensitivity to reduced purchase rate (ie aggregate new purchases divided by aggregate principal repayments in a given month) Reduce base case by 50% / 75% / 100% Series 2019-2 D: 'BBB-sf' / 'BBB-sf' / 'BBB-sf' Series 2019-2 E: 'BB-sf' / 'BB-sf' / 'B+sf' Series 2019-2 F: 'B+sf' / 'Bsf' / 'Bsf' No rating sensitivities are shown for classes A to C, as Fitch is already assuming a 100% purchase rate stress in these rating scenarios Rating sensitivity to increased charge-off rate and reduced MPR Increase base case charge-offs by 25% and reduce MPR by 15% Increase base case charge-offs by 50% and reduce MPR by 25% Increase base case charge-offs by 75% and reduce MPR by 35% Series 2019-2 A: 'A+sf' / 'A-sf' / 'BBB-sf' Series 2019-2 B: 'A-sf' / 'BBBsf' / 'BB+sf' Series 2019-2 C: 'BBBsf' / 'BB+sf' / 'BB-sf' Series 2019-2 D: 'BBsf' / 'B+sf' / NA Series 2019-2 E: 'Bsf' / NA / NA Series 2019-2 F: NA / NA / NA USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10 Fitch was provided with Form ABS Due Diligence-15E (Form 15E) as prepared by Deloitte LLP. The third-party due diligence described in Form 15E focused on observing and comparing specific loan level data contained in a sample of credit card receivables. Fitch considered this information in its analysis and it did not have an effect on Fitch's analysis or conclusions. DATA ADEQUACY Fitch reviewed the results of a third-party assessment conducted on the asset portfolio information, and concluded that there were no findings that affected the rating analysis. Fitch conducted a review of a small targeted sample of the originator's origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and the other information provided to the agency about the asset portfolio. Overall and together with the assumptions referred, Fitch's assessment of the asset pool information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. SABADELL CONSUMO 1: DBRS Gives Prov. B(high) Rating on Cl. D Notes ------------------------------------------------------------------ DBRS Ratings Limited assigned provisional ratings to the Class A, Class B, Class C and Class D Notes (the Rated Notes) to be issued by Sabadell Consumo 1 Fondo de Titulización (the Issuer), as follows: -- AA (low) (sf) to the Class A Notes -- A (sf) to the Class B Notes -- BBB (sf) to the Class C Notes -- B (high) (sf) to the Class D Notes The Class E, Class F and Class Z Notes are not rated by DBRS. The rating assigned to the Class A Notes addresses the timely payment of interest and ultimate repayment of principal by the final maturity date. The ratings assigned to the Class B, Class C and Class D Notes address the ultimate payment of interest and repayment of principal by the final maturity date. The ratings will be finalized upon receipt of an execution version of the governing transaction documents. To the extent that the documents and information provided to DBRS as of this date differ from the executed version of the governing transaction documents, DBRS may assign different final ratings to the Rated Notes. The ratings are based on the following considerations: -- The transaction's capital structure including available credit enhancement in the form of subordination, liquidity support and excess spread. -- Sufficient credit enhancement levels to support DBRS's expected defaults and recoveries under various stress scenarios. -- The ability of the transaction to withstand stressed cash flow assumptions and repay the Rated Notes. -- The capabilities of Banco de Sabadell S.A. with respect to originations, underwriting, servicing and financial strength. -- The operational risk review of the seller, which is deemed by DBRS to be an acceptable servicer. -- The transaction parties' financial strength regarding their respective roles. -- The credit quality and concentration of the collateral and historical and projected performance of the seller's portfolio. -- The sovereign rating of the Kingdom of Spain, currently rated "A" with a Stable trend by DBRS. -- The expected consistency of legal structure with DBRS's "Legal Criteria for European Structured Finance Transactions" methodology and the presence of legal opinions that are expected to address the true sale of the assets to the Issuer. The transaction cash flow structure was analyzed in Intex DealMaker. Notes: All figures are in Euros unless otherwise noted. SELECT: Westwood Cross Store to Close Next Month, 12 Jobs Affected ------------------------------------------------------------------ Kathy Bailes at The Isle of Thanet News reports that the Select clothing store at Westwood Cross will close next month with the loss of 12 jobs. Staff have received compulsory redundancy notices and been informed that the store is due to shut on a yet to be decided date in October, The Isle of Thanet News discloses. The Select business is currently operating under a Company Voluntary Arrangement (CVA) approved in June, The Isle of Thanet News notes. High street fashion chain Genus UK Ltd, trading as Select, previously fell into administration on May 9, The Isle of Thanet News recounts. Following this, joint administrators, Andrew Andronikou, Brian Burke and Carl Jackson of business advisory firm Quantuma, filed CVA proposals in the High Court of Justice, The Isle of Thanet News relates. The approval secured the current employment of Select's 1,800 staff and preserved the operation of its 169 stores, centralized head office and warehouse facilities, The Isle of Thanet News states. However, it has now emerged that The Works has been granted the lease for the unit, reportedly at a higher rental rate, according to The Isle of Thanet News. THOMAS COOK: First Repatriation Flights Land After Collapse ----------------------------------------------------------- The Scotsman reports that the first flights have landed in the UK's largest peacetime repatriation after travel giant Thomas Cook collapsed, bringing the first 15,000 travellers home. According to The Scotsman, some 150,000 tourists are being brought home over the next two weeks in a Civil Aviation Authority (CAA) flight program costing GBP100 million. The first rescue flight touched down at Gatwick from Split, Croatia, shortly before midday yesterday, Sept. 23, and around 15,000 passengers were expected to travel on 61 flights, The Scotsman relates. Forty-five aircraft from as far away as Malaysia have been chartered to operate approximately 1,000 flights from 53 airports in 18 countries over the next two weeks, The Scotsman discloses. Holidaymakers already abroad are being flown home at no extra cost as close as possible to their original return time and date, The Scotsman states. All future Thomas Cook bookings have been cancelled, affecting around one million people, The Scotsman notes. According to The Scotsman, Richard Moriarty, chief executive of the CAA, said the Government had asked his organization to launch "the UK's largest ever peacetime repatriation". The GBP100 million bill will be met by the Government and the Atol scheme, which provides protection to customers on package holidays when travel firms collapse, although passengers who made flight-only bookings with Thomas Cook are also being brought home at no extra charge, The Scotsman states. Thomas Cook package holiday customers will also see the cost of their accommodation covered by Atol, The Scotsman notes. Those who have not yet started their package holiday will be given a refund, while those on flight-only bookings are advised to seek reimbursement from their credit or debit card provider, or make a claim through their travel insurer, The Scotsman says. THOMAS COOK: PPF to Assess Funding Levels of Pension Schemes ------------------------------------------------------------ Carolyn Cohn at Reuters reports that Britain's Pension Protection Fund (PPF) said on Sept. 23 it would assess the funding levels of Thomas Cook's retirement schemes, following the collapse of the world's oldest travel firm. PPF is an industry-funded scheme set up to protect the pensions of employees in failing companies. "We await notification that the associated schemes have entered PPF assessment," a spokeswoman, as cited by Reuters, said in an emailed statement, adding PPF would protect the pensions of people on Thomas Cook's defined benefit, or final salary, schemes. After the assessment, which typically lasts about 18-24 months, the pensions could enter the PPF or the risk could be taken over by an insurer, Reuters states. According to Reuters, a spokesman for the Thomas Cook pension trustees said Thomas Cook pension schemes have in aggregate a surplus of GBP100 million (US$124 million) above levels needed to secure PPF benefits. THOMAS COOK: Rescue Talks Fail, Goes Into Compulsory Liquidation ---------------------------------------------------------------- Alice Hancock, Daniel Thomas and George Parker at The Financial Times report that the collapse of Thomas Cook spread chaos through the international travel industry on Sept. 23 as the failure of the 178-year-old travel company left hundreds of thousands of travellers stranded and sent business partners reeling. According to the FT, Thomas Cook's board said on Sept. 23 that the failure of rescue talks between banks, shareholders and the UK government meant "it had no choice but to take steps to enter into compulsory liquidation with immediate effect". The collapse of the travel company leaves 21,000 jobs at risk and 150,000 UK holidaymakers stranded abroad, reliant on an effort by the government's Civil Aviation Authority to put together the biggest emergency repatriation in peacetime, the FT discloses. The collapse is a huge blow to Chinese conglomerate Fosun, Thomas Cook's biggest shareholder, which had proposed to contribute GBP450 million to a rescue package, the FT notes. The group, as cited by the FT, said in a statement that it was "disappointed" and that "its position remained unchanged throughout the process, but unfortunately other factors have changed". According to the FT, Andrea Leadsom, Britain's business secretary, will launch an investigation into the company's demise, including the role of management, who were on Sept. 23 criticized for taking large salaries while overseeing the decline of the group under Peter Fankhauser, Thomas Cook's chief executive. The restructuring specialist AlixPartners was appointed to manage the process, subject to the approval of the court, the FT relays. Thomas Cook said that it expected AlixPartners to work with the CAA to arrange the repatriation of its customers, the FT notes. Transport secretary Grant Shapps said the government had been asked for between GBP150 million and GBP250 million but added that the bailout money would only have kept Thomas Cook afloat for a short period if it had been agreed. He blamed the shift of business from the high street to online for the demise of Thomas Cook, according to the FT. Mr. Fankhauser, as cited by the FT, said in a statement that the company had worked "exhaustively" to salvage a GBP1.1 billion rescue deal. The company had a last attempt to secure a rescue deal in a drawn-out day of negotiations at Latham & Watkins, the law firm, on Sept. 22, the FT recounts. According to the FT, Thomas Cook's lenders said they were unable to extend any further financial support after backing the company over the past year which saw "outflows of about GBP1 billion", and were "disappointed" the rescue did not materialize. Thomas Cook's collapse comes eight months after it announced it intended to sell its profitable airline as a means of shoring up its tour operator business, the FT states. However, in May it revealed a GBP1.2 billion net debt pile, the FT notes. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2019. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. * * * End of Transmission * * *