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       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

          Wednesday, December 16, 2020, Vol. 21, No. 251

                           Headlines



F I N L A N D

STOCKMANN: Administrator Files Restructuring Proposal in Helsinki


G E R M A N Y

WIRECARD: EY Team Warned in 2018 of Fraud "Red-Flag Indicators"
[*] GERMANY: Coalition Agrees to Extend Company Insolvency Waiver


N E T H E R L A N D S

EDML 2018-2 B.V.: DBRS Confirms BB(high) Rating on Class E Notes


S P A I N

PYMES SANTANDER 15: DBRS Confirms C Rating on Series C Notes


U N I T E D   K I N G D O M

JECKERSON: C&S Steps in to Guarantee Production, Distribution
LLOYD SHOE: Files for Administration, Seeks Buyer for Business

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F I N L A N D
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STOCKMANN: Administrator Files Restructuring Proposal in Helsinki
-----------------------------------------------------------------
Anne Kauranen at Reuters reports that struggling Finnish retailer
Stockmann plans to sell and lease back its flagship department
store properties located in Helsinki, Tallinn and Riga in order to
save itself from bankruptcy, it said on Dec. 14.

In April, Stockmann filed for corporate restructuring, a form of
administration in which a court appointee is charged with
restructuring the company to avoid bankruptcy, Reuters relates.

Known for its upmarket department stores, Stockmann has struggled
in recent years in the face of a consumer shift to online shopping,
prompting cost cuts and divestments but eventually it was the
coronavirus that led it to restructuring, Reuters discloses.

According to Reuters, on Dec. 14, the administrator of Stockmann's
restructuring proceedings filed with the Helsinki district court
his proposal for the group's debtors.

"The programme is supported by the company's largest creditors, the
committee of creditors and the largest shareholders (representing
45.3% of shares and 62.6% of votes) as well as the company's Board
of Directors and management," Reuters quotes Stockmann as saying in
a statement.

It said in addition to Stockmann continuing its department store
operations with the sale and lease-back arrangement, the plan is
that its profitable fashion chain Lindex will stay under the
ownership of the Stockmann Group, Reuters notes.

According to Reuters, the company said "In accordance with the
draft restructuring programme the company has EUR433.5 million in
secured restructuring debt, EUR195.7 million in unsecured
restructuring debt and EUR108.1 million in hybrid bond debt,
totalling EUR736.9 million (US$894.8 million)."

Stockmann said the restructuring programme stretches over eight
years and altogether 20% of unsecured debts will be cut while
reserving the creditors the opportunity to convert this 20% share
of the restructuring debt into the company's series B shares before
any cuts are made, Reuters relays.




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G E R M A N Y
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WIRECARD: EY Team Warned in 2018 of Fraud "Red-Flag Indicators"
---------------------------------------------------------------
Olaf Storbeck at The Financial Times reports that an Ernst and
Young anti-fraud team warned in 2018 that "red-flag indicators" at
Wirecard pointed to potential accounting manipulation and required
further investigation, according to documents seen by the FT.

Just weeks later, the separate EY team in charge of Wirecard's
annual audit decided against investigating the matter further and
subsequently issued an unqualified audit, the FT relates.

Wirecard, a once high-flying German payments group, this summer
collapsed into insolvency in one of Europe's biggest postwar
accounting frauds, the FT recounts.

According to the FT, the dissenting views within EY raise new
questions about the firm's decade-long work as Wirecard's auditor.

Munich prosecutors are already investigating three current and
former EY partners after Germany's audit watchdog said they may
have acted criminally by knowingly issuing a "factually incorrect"
audit opinion in 2017 and 2018, the FT notes.

Among other issues, the audit watchdog suspects that EY audit
partners in 2018 failed to properly take into account the findings
of a forensic audit into alleged accounting manipulation, the FT
states.  In that probe, which started in 2016 and was code-named
"Project Ring", an EY anti-fraud team investigated fraud
allegations raised by a whistleblower in India, the FT relays.

Project Ring was commissioned by Wirecard's management board and
was conducted by EY Forensic & Integrity Services, an arm of the
Big Four firm that specializes in white-collar crime, the FT
discloses.

New documents seen by the FT show that in the months to March 2018
EY's anti-fraud team repeatedly pointed out problematic
"observations" it had made during the inquiry.

For instance, EY had discovered that one-off items such as proceeds
from the sale of internet domains and IT infrastructure were added
to operating profits with no clear justification, the FT says.  It
also found that interest income was added to a gauge of operating
profit that explicitly excludes interest, according to the FT.

The investigation discovered two copies of an invoice by an Indian
Wirecard subsidiary that were issued on the same day for the same
transaction, but were on letterheads showing two different
corporate logos for the firm and stated different sums, the FT
relates.

EY's anti-fraud team said that these "red-flag indicators  . 
.  . could potentially sustain" the allegation that profits were
inflated and should be investigated further, the FT notes.  In a
"status memorandum" issued in late March 2018, it recommended
"comprehensive additional investigation steps" into the matter, the
FT recounts.

According to the FT, the fraud team pointed out that most of the
forensic audit was still at an early stage and it had so far relied
only on "open-source background research" without yet using
"further forensic investigation procedures, e.g., interviews and
email review".

Less than three weeks after EY's fraud team summarized these issues
in a 63-page status slide deck that was shared with Wirecard's
board, EY's audit team came to a different view about "Project
Ring", documents seen by the FT show.

In an internal note, the auditors asserted that "nothing has come
to our attention that causes us to believe that any of the items
raised in the whistleblower letter are of such substance that
further extended procedures are required", according to a document
seen by the FT.

EY's audit team subsequently issued an unqualified audit for
Wirecard's 2017 financial report, stating that "Project Ring" had
been "concluded" without delivering "any evidence indicative of
flawed accounting or other violations of law", the FT discloses.

In fact, "Project Ring" had been terminated by Wirecard's
second-in-command Jan Marsalek days after he received the "status
memorandum" from EY's anti-fraud team -- a fact that was not
mentioned in EY's audit opinion, the FT states.

Documents seen by the FT show that EY's audit team was briefed
about "Project Ring" on an ongoing basis and was aware about the
"red-flag indicators".


[*] GERMANY: Coalition Agrees to Extend Company Insolvency Waiver
-----------------------------------------------------------------
Holger Hansen at Reuters reports that the parties in Germany's
ruling coalition have agreed to extend a freeze on insolvency rules
put in place to avoid a wave of corporate bankruptcies due to the
coronavirus crisis, officials said on Dec. 14.

In March, the government offered respite to companies that find
themselves in financial trouble due to the pandemic by allowing
them to delay filing for bankruptcy until the end of September,
Reuters recounts.

The coalition parties later agreed to extend the insolvency waiver
until the end of this year for indebted but still solvent
companies, Reuters relates.  However, the freeze on the obligation
to file for insolvency was not extended for insolvent firms,
Reuters notes.

According to Reuters, coalition lawmakers said in light of a second
wave of COVID-19 infections and a stricter lockdown to bring the
pandemic under control, lawmakers from Chancellor Angela Merkel's
conservatives and the centre-left Social Democrats agreed to extend
the insolvency moratorium by one month until the end of January.

SPD lawmaker Johannes Fechner said the Bundestag lower house of
parliament is expected to pass the law on Thursday, Dec. 17,
Reuters discloses.

He said the insolvency waiver could be extended further until the
end of February in the event of technical problems with paying out
emergency state aid, Reuters relays.




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N E T H E R L A N D S
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EDML 2018-2 B.V.: DBRS Confirms BB(high) Rating on Class E Notes
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DBRS Ratings GmbH confirmed the ratings of the notes issued by EDML
2018-2 B.V. (the Issuer) as follows:

-- Class A at AAA (sf)
-- Class B at AA (sf)
-- Class C at A (sf)
-- Class D at BBB (sf)
-- Class E at BB (high) (sf)

The rating assigned to the Class A notes addresses the timely
payment of interest and the ultimate payment of principal by the
legal maturity date in January 2057. The ratings assigned to the
Class B, Class C, Class D, and Class E notes address the ultimate
payment of interest and principal by the legal maturity date, while
they remain junior but the timely payment of interest when they are
the senior-most tranche.

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.

-- Portfolio default rate (PD), loss given default (LGD), and
expected loss assumptions on the remaining receivables.

-- Current available credit enhancement to the notes to cover the
expected losses at their respective rating levels.

-- Current economic environment and an assessment of sustainable
performance, as a result of the Coronavirus Disease (COVID-19)
pandemic.

The Issuer is a bankruptcy-remote special-purpose vehicle (SPV)
incorporated in the Netherlands. The notes proceeds were used to
fund the purchase of Dutch residential mortgage loans originated by
Elan Woninghypotheken B.V. (Elan) and secured over residential
properties located in the Netherlands. Elan started originating
Dutch residential mortgage loans in June 2015 under the umbrella
license of Quion. The portfolio consists of Dutch residential
mortgage loans without a National Hypotheek Garantie (NHG),
originated under the Hypotrust mortgage label through a mortgage
product designed with unique underwriting criteria (Elan
mortgage).

PORTFOLIO PERFORMANCE

As of the October 2020 payment date, transaction delinquencies
remained low: loans that were one to two months and two to three
months delinquent represented 0.17% and 0.19% of the portfolio
balance, respectively, while there were no reported loans more than
three months delinquent. There have been no defaults reported to
date either.

PORTFOLIO ASSUMPTIONS AND KEY DRIVERS

DBRS Morningstar conducted a loan-by-loan analysis of the remaining
pool of receivables and has updated its base case PD and LGD
assumptions to 3.0% and 21.8%, respectively.

CREDIT ENHANCEMENT

The subordination tranches and the cash reserve provide credit
enhancement to the rated notes. As of the October 2020 payment
date, credit enhancement to the Class A, Class B, Class C, Class D,
and Class E notes was 10.1%, 7.6%, 5.4%, 3.7%, and 2.6% up from
9.4%, 7.1%, 5.0%, 3.5%, and 2.4%, respectively, one year ago.

The transaction benefits from a reserve fund that is available to
support the Class A to Class E notes. The reserve fund was funded
at closing at 0.35% of the initial balance of the Class A to F
notes. The reserve fund can be used to pay senior costs and
interest on the rated notes and does not amortize.

Additionally, liquidity for the Class A and the Class B notes is
further supported by the drawings under the cash advance facility
agreement provided by ING Bank N.V. Once the Class A and the Class
B notes are redeemed in full, the cash advance facility will no
longer be available.

BNG Bank N.V. acts as the account bank for the transaction. Based
on the DBRS Morningstar private rating of BNG Bank N.V., the
downgrade provisions outlined in the transaction documents, and
other mitigating factors inherent in the transaction structure,
DBRS Morningstar 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 Morningstar's "Legal Criteria
for European Structured Finance Transactions" methodology.

ING Bank N.V. acts as the swap counterparty for the transaction.
DBRS Morningstar's public rating of ING Bank N.V. at AA (low) is
above the First Rating Threshold as described in DBRS Morningstar's
"Derivative Criteria for European Structured Finance Transactions"
methodology.

DBRS Morningstar analyzed the transaction structure in Intex
DealMaker.

The Coronavirus Disease (COVID-19) and the resulting isolation
measures have caused an economic contraction, leading to sharp
increases in unemployment rates and income reductions for many
borrowers. DBRS Morningstar anticipates that delinquencies may
continue to increase in the coming months for many RMBS
transactions, some meaningfully. The ratings are based on
additional analysis and adjustments to expected performance as a
result of the global efforts to contain the spread of the
coronavirus.

For this transaction, DBRS Morningstar increased the expected
default rates for self-employed borrowers, assumed a moderate
decline in residential property prices, and conducted additional
sensitivity analysis to determine that the transactions benefit
from sufficient liquidity support to withstand high levels of
payment holidays in the portfolio. As of the October 2020 payment
date, no loans have been granted a temporary payment postponement.

Notes: All figures are in Euros unless otherwise noted.




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S P A I N
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PYMES SANTANDER 15: DBRS Confirms C Rating on Series C Notes
------------------------------------------------------------
DBRS Ratings GmbH confirmed its ratings of the notes issued by FT
PYMES Santander 15 (the Issuer), as follows:

-- Series A Notes at A (high) (sf)
-- Series B Notes at CCC (low) (sf)
-- Series C Notes at C (sf)

The rating of the Series A Notes addresses the timely payment of
interest and the ultimate payment of principal on or before the
legal maturity date in April 2051. The ratings of the Series B and
Series C Notes address the ultimate payment of interest and
principal on or before the legal maturity date.

The rating 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 October 2020 payment date.

-- Base case probability of default (PD) and updated default and
recovery rates on the remaining receivables.

-- Current available credit enhancement to the Series A and Series
B Notes to cover the expected losses assumed at their respective
rating levels.

-- No early amortization events have occurred so far.

-- Current economic environment and an assessment of sustainable
performance, as a result of the Coronavirus Disease (COVID-19)
pandemic.

The Series C Notes were issued to fund the cash reserve and are in
a first-loss position supported only by available excess spread.
Given the characteristics of the Series C Notes, as defined in the
transaction documents, the default would most likely be recognized
at maturity or following an early termination of the transaction.

The transaction is a cash flow securitization collateralized by a
portfolio of secured and unsecured term loans and credit lines
originated by Banco Santander, S.A. (Santander), Banesto, and Banif
(prior to their integration into Santander) to corporate, small and
medium-size enterprises, and self-employed individuals based in
Spain.

The transaction includes a 24-month revolving period, scheduled to
end in December 2021. During the revolving period, the Issuer may
acquire new loans and credit lines if they satisfy the eligibility
criteria. To account for possible adverse changes in portfolio
composition during the revolving period, DBRS Morningstar
considered the limitations established in the eligibility criteria
to create a worst-case portfolio that was used for the credit
analysis.

PORTFOLIO PERFORMANCE

As of the October 2020 payment date, loans two to three months in
arrears represented 0.8% of the outstanding portfolio balance and
the 90+ delinquency ratio was 0.9%, both up from 0.0% at
transaction closing. Cumulative default ratio increased to 0.03% in
the same period.

PORTFOLIO ASSUMPTIONS AND KEY DRIVERS

DBRS Morningstar maintained its one-year base case PD assumption of
2.25%. DBRS Morningstar conducted a loan-by-loan analysis of the
outstanding balance of the revolving pool of receivables but kept
its base case PD and recovery assumptions unchanged based on the
worst-case portfolio composition.

CREDIT ENHANCEMENT

The Series A Notes benefit from 25.0% of credit enhancement
provided by the subordination of the Series B Notes and the reserve
fund. The Series B Notes benefit from 5.0% of credit enhancement
provided by the reserve fund. The reserve fund was funded through
the issuance of the Series C Notes and is available to cover senior
fees and interest and principal on the Series A and Series B Notes.
The reserve fund can amortize after two years from transaction
closing if certain conditions related to the performance of the
portfolio and deleveraging of the transaction are met, to a floor
of EUR 75.0 million.

Santander acts as the account bank for the transaction. Based on
the account bank's reference rating of A (high), which is one notch
below the DBRS Morningstar Long Term Critical Obligations Rating
(COR) of Santander of AA (low), the downgrade provisions outlined
in the transaction documents, and structural mitigants, DBRS
Morningstar considers the risk arising from the exposure to
Santander to be consistent with the rating assigned to the Series A
Notes, as described in DBRS Morningstar's "Legal Criteria for
European Structured Finance Transactions" methodology.

DBRS Morningstar analyzed the transaction structure in its
proprietary Excel-based cashflow engine.

The Coronavirus Disease (COVID-19) and the resulting isolation
measures have caused an economic contraction, leading to sharp
increases in unemployment rates and income reductions for many
borrowers. DBRS Morningstar anticipates that payment holidays and
delinquencies may continue to increase in the coming months for
many SME transactions, some meaningfully. The ratings are based on
additional analysis and, where appropriate, adjustments to expected
performance as a result of the global efforts to contain the spread
of the coronavirus.

Notes: All figures are in Euros unless otherwise noted.




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U N I T E D   K I N G D O M
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JECKERSON: C&S Steps in to Guarantee Production, Distribution
-------------------------------------------------------------
Liz Warren at Sourcing Journal reports that garment manufacturer
C&S is coming to the rescue for an Italian fashion brand in
crisis.

According to Sourcing Journal, Italian jeanswear and sportswear
label Jeckerson recently filed for a Company Voluntary Agreement
(CVA) to settle its debt after a turbulent year amid the
coronavirus pandemic, when licensee and longtime partner C&S
stepped in to guarantee production and distribution.

The partnership between insolvent Jeckerson and C&S is a bright
spot during a year that revealed strained relationships between
brands and manufacturers, Sourcing Journal notes.  As Jeckerson's
official licensee in Italy and Europe, the company has been
manufacturing for the brand since it launched in 1995.

The company ensures that "nothing will be changing for Jeckerson,"
and confirms continuity of the brand's current and upcoming
collections, Sourcing Journal discloses.

Jeckerson is one of many fashion brands experiencing significant
challenges this year, Sourcing Journal states.


LLOYD SHOE: Files for Administration, Seeks Buyer for Business
--------------------------------------------------------------
Business Sale reports that East London-based Lloyd Shoe Company, an
Arcadia Group supplier, has filed for administration.

The business has become among the first suppliers to be impacted by
Arcadia Group's collapse, but continues to trade as normal while a
buyer is sought, Business Sale notes.

Lloyd Shoe was founded in 1986 and employs 243 staff.  The company
operates over 800 footwear concessions for both men and women in
the UK, Ireland, Germany, the USA and the Netherlands.  Many of its
concessions are in stores belonging to the Arcadia Group.

According to Business Sale, in a statement, the company said:
"Lloyd Shoe operates footwear concessions for stores within the
Arcadia group of brands and the business is working closely with
the administrators of Arcadia to support their trading strategy
whilst they seek a buyer(s).  The business continues to trade as
normal."

In its most recent financial statement, to the year ending August
31 2019, Lloyd Shoe described Arcadia Group as its "significant
customer" writing that it was reliant on the group, the position of
its brands in the market place and the success of Arcadia's CVA
turnaround, Business Sale discloses.

In the report, the company said that the retailing environment
"continues to be very challenging", with the ongoing Brexit process
in particular creating uncertainty in the retail sector, Business
Sale relates.  The company reported turnover of GBP35.9 million for
the year, down from GBP41.8 million the previous year, while gross
profit fell from GBP3.5 million in 2018 to GBP2.8 million, Business
Sale states.

The company reported an operating loss of GBP1.3 million, up from a
GBP1 million operating loss in 2018, and total losses for the year
of GBP1.2 million, compared to a GBP785,917 loss the year prior,
Business Sale notes.

Athe time, Lloyd Shoe Company's fixed assets were valued at
GBP120,895, with current assets of slightly over £8 million and
net assets coming to over GBP2 million, Business Sale says.  The
company owed GBP6.1 million to creditors within one year, according
to Business Sale.



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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-
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Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante,
Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman,
Editors.

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