/raid1/www/Hosts/bankrupt/TCREUR_Public/240301.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
Friday, March 1, 2024, Vol. 25, No. 45
Headlines
B E L G I U M
BL CONSUMER 2024: DBRS Gives Prov. BB Rating on 2 Tranches
B O S N I A A N D H E R Z E G O V I N A
RAIFFEISEN BANK: Moody's Affirms 'B1/B3' LongTerm Deposit Ratings
F R A N C E
PROXISERVE: Moody's Affirms B3 CFR, Outlook Remains Stable
I R E L A N D
ADAGIO CLO VIII: Moody's Cuts Rating on EUR10.5MM F Notes to Caa1
AVOCA CLO XI: S&P Affirms 'B-(sf)' Rating on Class F-R Notes
DILOSK RMBS 8: DBRS Finalizes B(High) Rating on Class X Notes
PALMER SQUARE 2024-1: Moody's Assigns (P)Ba3 Rating to Cl. E Notes
I T A L Y
MAIOR SPV: DBRS Cuts Credit Rating to CCC, Trend Negative
N E T H E R L A N D S
PEARLS NETHERLANDS: Moody's Rates $320MM 1st Lien Term Loan 'B2'
N O R W A Y
B2 IMPACT: S&P Upgrades ICR to 'BB-', Outlook Stable
S P A I N
CAIXABANK RMBS 2: DBRS Confirms BB(High) Rating on Class B Notes
PYMES SANTANDER 15: Moody's Affirms Ca Rating on EUR150MM C Notes
S W E D E N
ERICSSON: Moody's Affirms 'Ba1' CFR, Outlook Stable
U N I T E D K I N G D O M
BODY SHOP: To Shut Down 57 Stores, 489 Jobs Affected
CLEMENTS MAY: Goes Into Administration
DURHAM MORTGAGES A: S&P Assigns CCC(sf) Rating on X-Dfrd Notes
FARFETCH LIMITED: Moody's Downgrades CFR to C, Outlook Negative
FOX INDUSTRIAL: Joint Administrators Set to Wind Down Business
MAGGIE AND ROSE: Enters Administration, Owed GBP1.58 Million
RECYCLING LIVES: Has Deficiency of GBP121 Million, Report Shows
RUBIX GROUP 3: Moody's Assigns 'B3' CFR, Outlook Stable
SCAFFTEQ WEST: Falls Into Administration
X X X X X X X X
[*] BOOK REVIEW: The First Junk Bond
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B E L G I U M
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BL CONSUMER 2024: DBRS Gives Prov. BB Rating on 2 Tranches
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DBRS Ratings GmbH assigned provisional credit ratings to the
following classes of notes (collectively, the Rated Notes) to be
issued by BL Consumer Issuance Platform II S.a r.l., acting in
respect of its Compartment BL Consumer Credit 2024 (the Issuer):
-- Class A Notes at AAA (sf)
-- Class B Notes at AA (low) (sf)
-- Class C Notes at A (low) (sf)
-- Class D Notes at BBB (sf)
-- Class E Notes at BB (sf)
-- Class F Notes at B (high) (sf)
-- Class X1 Notes at CCC (sf)
-- Class X2 Notes at CCC (sf)
Morningstar DBRS did not assign a provisional credit rating to the
Class G Notes (together with the Rated Notes, the Notes) also
expected to be issued in this transaction.
The credit ratings of the Class A and Class B Notes address the
timely payment of scheduled interest and the ultimate repayment of
principal by the legal final maturity date. The credit ratings of
the Class C, Class D, Class E, and Class F Notes address the
ultimate payment of scheduled interest while subordinated, then
timely payment of scheduled interest as the most-senior class of
notes outstanding, and the ultimate repayment of principal by the
legal final maturity date. The credit ratings of Class X1 and Class
X2 Notes address the ultimate payment of interest and the ultimate
repayment of principal by the legal final maturity date.
The transaction is a securitization of revolving loans with some
fixed-rate instalment loans granted to individual residents in
Belgium and Luxembourg and serviced by Buy Way Personal Finance
(Buy Way).
CREDIT RATING RATIONALE
Morningstar DBRS' credit ratings are based on the following
analytical considerations:
-- The transaction's structure, including the form and sufficiency
of available credit enhancement to withstand stressed cash flow
assumptions and repay the Issuer's financial obligations according
to the terms under which the Rated Notes are issued.
-- The credit quality and the diversification of the collateral
portfolio, its historical performance and the projected performance
under various stress scenarios.
-- The operational risk review of Buy Way´s capabilities with
regard to originations, underwriting, and servicing;
-- The transaction parties' financial strength with regard to
their respective roles.
-- The expected consistency of the transaction's structure with
Morningstar DBRS "Legal Criteria for European Structured Finance
Transactions" and "Derivative Criteria for European Structured
Finance Transactions" methodologies.
-- The Morningstar DBRS sovereign credit ratings of the Kingdom of
Belgium at AA with a Stable trend and of the Grand Duchy of
Luxembourg at AAA with a Stable trend.
TRANSACTION STRUCTURE
The transaction has a relatively long scheduled revolving period of
36 months with separate interest and principal waterfalls for the
available distribution amount. During this period, additional
receivables may be purchased by the Issuer, provided that the
eligibility criteria and portfolio conditions set out in the
transaction documents are satisfied. The revolving period may end
earlier than scheduled if certain events occur, such as the breach
of performance triggers or servicer or seller termination.
The interest priority of payments incorporates a principal
deficiency ledger (PDL) for each class of Notes (except for the
Class X1 and Class X2 Notes) where available funds may be used to
cure the class-specific PDLs sequentially. The remaining available
funds in the interest waterfalls can be used to redeem the Class X1
Notes immediately after closing in 18 scheduled equal instalments
or more until fully redemption or the end of the revolving period.
The redemption of the Class X2 Notes will only commence after the
full redemption of the Class X1 Notes. After the revolving period,
the Notes will amortize sequentially with the Class X1 and Class X2
Notes senior to the unrated collateralized Class G Notes.
The transaction includes a reserve with a target amount of 1.3% of
the outstanding balance of the Class A, Class B and Class C Notes
that is available to cover any shortfalls in senior expenses,
senior hedging payments (only applicable during the amortization
period after March 2027) and interest payments on the Class A,
Class B and Class C Notes (subject to the most-senior class status
and/or the PDL conditions). There is also a spread account (with
zero balance at closing) to trap excess spread when it falls below
4% to cover the senior expenses, senior hedging payments if
applicable and interest due on the Rated Notes (except for the
Class X2 Notes).
The transaction is expected to have an interest rate cap to
mitigate the interest rate mismatch risk between the collateral and
the Class A Notes. The cap arrangement has a fixed notional amount
during the three-year scheduled revolving period and a
pre-determined schedule during the amortization period following
the first optional redemption date and will terminate until the
Class A Notes are fully repaid or at the latest in February 2032.
TRANSACTION COUNTERPARTIES
Citibank Europe plc, Luxembourg Branch, is the Issuer's account
bank. Morningstar DBRS has an issuer rating of AA (low) on Citibank
Europe plc, which meets the criteria to act in such capacity. The
transaction documents contain downgrade provisions consistent with
Morningstar DBRS' criteria.
Citibank Europe plc is also the interest rate hedge counterparty
for the transaction, which meets the criteria to act in such
capacity. The transaction documents contain downgrade provisions
largely consistent with Morningstar DBRS' criteria.
PORTFOLIO ASSUMPTIONS
The monthly principal payment rates (MPPRs) for the revolving loan
portfolio have been largely stable since 2016 and averaged 9.5%
over the past 12 months. Morningstar DBRS also notes that the
zeroing legislation applicable to Belgian revolving loans
prescribes a minimum payment under which the due balance of a
revolving loan must reach zero after up to 96 months. Based on the
historical data, Morningstar DBRS revised the expected MPPR for the
revolving loans to 8% from 6.5%.
The yield of the revolving loan portfolio has been heavily
influenced by the Belgian usury rate, as Buy Way has historically
set the Belgian revolving loan interest rate at the legal maximum
for both new and existing accounts. Morningstar DBRS notes the
portfolio yield reached 11.4% as of June 2023 after the Belgian
usury rates increased by 2% and 1.5% in December 2022 and June
2023, respectively. There was a further usury rate increase of 1%
in December 2023, which is not yet fully reflected in the reported
portfolio yield. Based on the historical data and the recent
successive usury rate increases, Morningstar DBRS revised the
expected yield for the revolving loans to 12% from 11.6%.
The reported historical charge-off rates for the revolving credit
portfolio were relatively stable until Q2 2021 when charge-off
levels started to increase steadily due to higher costs of living
and inflationary pressures. However, the charge-off rates started
declining beginning January 2023 as a result of tighter
underwriting criteria, reduced inflation and a large one-time
automatic salary indexation applicable to most private firms in
Belgium. Based on the historical data and recent underwriting
trends, Morningstar DBRS maintained the expected charge-off rate
for the revolving loans at 4.4%.
The instalment loans include personal loans and point-of-sale
finance loans and could represent up to 30% of the securitized
receivables. Considering this significant concentration limit,
Morningstar DBRS derived static default assumptions separate from
dynamic asset assumptions used for the revolving loans.
The overall default levels of instalment loans have been worsening
year over year but an improvement is expected to occur as the
online origination of personals loans, which currently account for
most instalment loans, was ceased in June 2022 and Buy Way has
tightened its granting policy since Q4 2022. Based on the
historical performance and origination trends, Morningstar DBRS
maintained the expected lifetime default for the instalment loans
at 7%.
Beginning in 2018, most defaulted loans are sold through a forward
flow agreement, which is the main source of recoveries. Morningstar
DBRS revised the expected recovery rate to 40% from 25%, which is
comparable with French consumer loan portfolios with similar
prescriptive legislations for recovery processes.
Morningstar DBRS' credit ratings on the Rated Notes address the
credit risk associated with the identified financial obligations in
accordance with the relevant transaction documents. The associated
financial obligations for each of the Rated Notes are the related
Interest Amount and the Initial Principal Amount.
Morningstar DBRS' credit ratings on the Rated Notes also addresses
the credit risk associated with the increased rate of interest
applicable to the Rated Notes if the Rated Notes are not redeemed
on the first optional redemption date as defined in and in
accordance with the transaction documents.
Morningstar DBRS' credit ratings do not address non-payment risk
associated with contractual payment obligations contemplated in the
applicable transaction document(s) that are not financial
obligations.
Morningstar DBRS' long-term credit ratings provide opinions on risk
of default. Morningstar DBRS considers risk of default to be the
risk that an issuer will fail to satisfy the financial obligations
in accordance with the terms under which a long-term obligation has
been issued.
Notes: All figures are in euros unless otherwise noted.
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B O S N I A A N D H E R Z E G O V I N A
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RAIFFEISEN BANK: Moody's Affirms 'B1/B3' LongTerm Deposit Ratings
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Moody's Investors Service has affirmed Raiffeisen Bank d.d. Bosna i
Hercegovina (RBBiH)'s B1 local-currency and B3 foreign-currency
long-term bank deposit ratings with a stable outlook. Concurrently,
Moody's affirmed the bank's (P)B1 local-currency and (P)B3
foreign-currency senior unsecured Euro Medium Term Note (EMTN)
programme ratings; the b3 Baseline Credit Assessment (BCA); the b1
Adjusted BCA; the long- and short-term B1/NP local-currency and
long- and short-term B3/NP foreign-currency Counterparty Risk
Ratings (CRR); the long- and short-term B1(cr)/NP(cr) Counterparty
Risk (CR) Assessments; and the NP short-term bank deposit ratings.
RBBiH is a fully-owned subsidiary of Austria's Raiffeisen Bank
International AG (RBI, long-term bank deposits A1 stable/senior
unsecured debt A1 stable, BCA baa3).
RATINGS RATIONALE
-- DEPOSIT RATINGS AFFIRMATION
The affirmation of the B1 long-term local-currency deposit rating
is driven by RBBiH's b3 BCA and Moody's continued assessment of a
high probability of affiliate support from RBI, that results in two
notches of rating uplift from its BCA leading to a b1 Adjusted BCA.
The rating does not benefit from government support uplift given
that the bank's Adjusted BCA is already above Bosnia and
Herzegovina (BiH)'s B3 long-term issuer rating.
Moody's affiliate support assessment is based on RBI's 100% stake
in RBBiH, the parent's ongoing operational support and oversight,
and the subsidiary's use of the Raiffeisen logo and name. RBBiH is
also a strategic fit to RBI's Western Balkans presence given its
established franchise as one of BiH's largest banks.
The bank's B3 long-term foreign-currency bank deposit rating was
also affirmed and remains constrained by the B3 foreign-currency
country ceiling.
-- BCA AFFIRMATION
The affirmation of RBBiH's b3 standalone BCA reflects its robust
capital buffers, granular deposit base and adequate liquidity, but
also the high asset risks stemming from a challenging operating
environment, indirect linkages to BiH's sovereign credit risk and
the lack of a lender of last resort that complicates liquidity
management in a crisis.
RBBiH's high capital levels remain a credit strength, and coupled
with high loan loss coverage provide capacity to absorb sizeable
losses. The bank's adjusted tangible common equity
(TCE)-to-risk-weighted assets ratio was 21.1% and its
TCE-to-tangible assets ratio was 12.0% as of the end of 2022, which
Moody's expects will remain broadly stable.
The bank is mainly funded by granular retail deposits, with low
reliance of more confidence-sensitive market funding, while liquid
assets made up 37% of tangible banking assets at the end of 2022.
The bulk of these liquid assets were cash and money market
placements. The bank is, however, required to raise additional
funding, in order to meet its minimum requirement for own funds and
eligible liabilities (MREL).
RBBiH faces high asset risks from a challenging operating
environment, which is captured in the Very Weak macro profile for
BiH. Further, although RBBiH's exposure to domestic government
securities and public sector entities is low, the bank operates
exclusively within BiH and is therefore exposed to sovereign event
risk at the B3-rating level.
Asset quality has been improving, whereby nonperforming loans were
2.7% of total loans as of the end of 2023, from 3.4% a year
earlier. Moody's problem loans ratio (defined as IFRS 9 Stage 3
loans and the purchased or originated credit impaired loans that
are nonperforming to gross loans) was 5.2% at end-2022 (end-2021:
8.0%). RBBiH's underwriting standards are also broadly conservative
and its borrower concentration levels are moderate. An economic
downturn in BiH or the country's large European trading partners
will, however, drive new problem loan formation.
The bank's profitability has benefited from higher interest rates
and credit growth. According to RBI disclosures, net income rose to
around 2.3% of tangible assets in 2023, from 2.0% in 2022.
-- STABLE OUTLOOK
The stable outlook on RBBiH's long-term deposit ratings reflects
Moody's expectation that the bank's financial performance will
remain broadly stable and its capital significantly above
regulatory requirements, despite operating environment pressures.
The outlook is also aligned with the stable outlook on the
sovereign rating.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
RBBiH's b3 BCA is at the same level as the sovereign rating, and
its local-currency ratings are at the level of the local-currency
country ceiling, hence an upgrade is unlikely in the absence of
sovereign rating upgrade and a lifting of the local-currency
country ceiling.
Similarly, the bank's foreign-currency ratings are constrained by
the foreign-currency country ceiling, hence these ratings could be
upgraded if the foreign-currency country ceiling is raised.
RBBiH's ratings could be downgraded if its BCA or the sovereign
rating is downgraded; or if the country's ceilings are lowered.
The bank's BCA could be downgraded if its core capital buffers
decline significantly, problem loans increase whilst coverage
declines, or if profitability is sustainably lowered. A significant
deterioration in the bank's funding profile or liquidity may also
put pressure on the BCA.
Significantly reduced willingness by RBI to provide support to
RBBiH could also result in a ratings downgrade.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Banks
Methodology published in July 2021.
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F R A N C E
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PROXISERVE: Moody's Affirms B3 CFR, Outlook Remains Stable
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Moody's Investors Service has affirmed Financiere Groupe
Proxiserve's (Proxiserve or "the company") B3 corporate family
rating, B3-PD probability of default rating and the B3 ratings on
its EUR335 million senior secured term loan due March 2026 and its
EUR60 million senior secured revolving credit facility (RCF) due
September 2025. The outlook remains stable.
"The rating affirmation reflects the company's solid performance in
2023 and Moody's expectation that it will progressively increase
its profitability and free cash flow over the next 12 to 18
months," says Sarah Nicolini, a Moody's Vice President - Senior
Analyst and lead analyst for Proxiserve.
"However, the rating also reflects that the company needs to
address upcoming debt maturities in 2025 and 2026, which will
likely be refinanced at higher rates, putting pressure on free cash
flow generation and interest coverage metrics," adds Ms. Nicolini.
RATINGS RATIONALE
The affirmation of the company's B3 CFR with a stable outlook
reflects the company's good operating performance in 2023 and
Moody's expectation that Proxiserve will continue to improve its
profitability and its Moody's adjusted free cash flow (FCF) over
the next 12 to 18 months.
Sustained growth in the sub-metering business, which generates 61%
of the group's EBITDA, helped to mitigate some underperformance in
the maintenance business, owing to inflationary pressures. This
solid performance was also supported by the partial spin-off of the
loss-making EVCS business, which was completed in December 2023,
with Proxiserve retaining a 39.3% ownership in the Zeborne and
Energy Dynamics businesses. Following this partial spin-off,
Proxiserve will deconsolidate these loss-making businesses, which
have drained the group's cash flow generation since 2020.
Moody's expects that the company will achieve a pro-forma (for the
EVCS spin-off) EBITDA of EUR73 million in 2023, growing from EUR59
million in 2022, bringing Moody's adjusted leverage down from 6.3x
in 2022 to a pro-forma 5.1x in 2023, a strong level for the B3
rating category. The rating agency forecasts that Proxiserve's
Moody's adjusted EBITA margin will improve to around 11% in the
next 12-18 months, from a pro-forma 9.6% in 2023, supported by the
sub-metering business and costs optimization in maintenance, while
its Moody's adjusted FCF generation will be slightly positive.
While Moody's expects that the company's profitability and cash
flow generation will improve over the next 12 to 18 months, the
rating affirmation reflects that Proxiserve will have to refinance
the senior secured term loan maturing in March 2026 and the senior
secured revolving credit facility maturing in September 2025, most
likely at higher interest rates. Moody's estimates that a
refinancing at current high rates will lead to very limited free
cash flow generation and a weakening in the interest coverage
metrics.
The B3 CFR reflects Proxiserve's (1) leading market positions in
the main markets for heat and water sub-metering, and multi-service
maintenance for business-to-business (B2B) customers, (2) the
supportive market fundamentals, particularly the continued rollout
of heat sub-metering in France, (3) the good revenue visibility and
stability because of the non-discretionary nature of demand for
energy services, long-term contracts with customers and a
supportive regulatory environment, and (4) the solid entry
barriers, with high customer loyalty and significant investment
requirements to replicate the business model.
The B3 rating is constrained by (1) the weak FCF because of high
capital spending to support revenue growth in the sub-metering
division, coupled with shareholder returns, (2) the lack of
diversification outside France, and (3) the refinancing risk of the
debt maturities in 2025 and 2026, which will likely be refinanced
at higher rates, putting pressure on the company's FCF and interest
coverage metrics.
LIQUIDITY
Despite a relatively small cash balance of around EUR3 million in
December 2023, Proxiserve's adequate liquidity is supported by the
expectation that it will generate positive Moody's adjusted FCF of
around EUR 11 million in 2024 and around EUR5 million in 2025 and
by its access to a EUR60 million committed RCF, expiring in
September 2025, of which EUR29 million were available as of
December 2023.
During 2023, Proxiserve sold the remaining energy certificates for
EUR6.6 million and did not pay any dividends to shareholders,
allowing the company to contain the cash outflows, despite the
contributions to sustain the EVCS business.
The company also has access to a EUR45 million factoring line which
can be terminated by both parties at any time, with a 3 months
notice period. Any utilization of such factoring line above EUR20
million is subject to senior lender consent. As of December 2023,
drawings of this factoring line amounted to EUR10 million.
While liquidity is currently adequate, the company will have to
address in the coming months the maturity of the EUR60 million RCF
in September 2025 and the EUR335 million term loan maturity in
March 2026.
STRUCTURAL CONSIDERATIONS
The term loan and the RCF are rated B3, in line with the CFR, to
reflect their pari passu ranking and the upstream guarantees from
operating companies that account for at least 80% of consolidated
EBITDA. The term loan and the RCF benefit from first-ranking
transaction security over shares, bank accounts and intragroup
receivables of material subsidiaries. Moody's typically views debt
with this type of security package as akin to unsecured debt.
RATIONALE FOR THE STABLE OUTLOOK
The stable outlook incorporates Moody's expectation that the
company will continue to improve its profitability and cash flow
generation over the next 12 to 18 months. It also assumes that the
company will address the refinancing of its debt maturities on a
timely manner and at least 12 months ahead of the due date.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The rating could be upgraded in case FCF generation turns
materially positive, with Moody's adjusted FCF/debt trending
towards low-single-digit percentages. An upgrade would also require
Moody's adjusted EBITA/interest to trend sustainably towards 2x and
liquidity to remain adequate. Any positive rating action would also
require Moody's adjusted debt/EBITDA to remain well below 6x on a
sustainable basis.
The rating could be downgraded in case Proxiserve's operating
performance deteriorates, its Moody's adjusted FCF generation turns
negative on a sustainable basis, its Moody's adjusted
EBITA/interest ratio falls below 1.25x, or its liquidity weakens
and the company does not address its refinancing needs in a timely
manner.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
COMPANY PROFILE
Proxiserve is a French company that specializes in a wide range of
services related to energy and water management for residential,
commercial, and industrial properties. After the deconsolidation of
EVCS business, Proxiserve's operations encompass four activities:
sub-metering, maintenance (including Onefield telecom services in
Belgium), collective heating and Edenkia. Maintenance is the
largest contributor to revenue, but sub-metering is the largest
contributor to EBITDA. The company is owned by Vauban
Infrastructure Partners and reported EUR563 million of revenues and
EUR73 million of EBITDA in 2023.
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ADAGIO CLO VIII: Moody's Cuts Rating on EUR10.5MM F Notes to Caa1
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Moody's Investors Service has taken a variety of rating actions on
the following notes issued by Adagio CLO VIII Designated Activity
Company:
EUR25,000,000 Class B-1 Senior Secured Floating Rate Notes due
2032, Upgraded to Aa1 (sf); previously on Nov 8, 2019 Definitive
Rating Assigned Aa2 (sf)
EUR10,000,000 Class B-2 Senior Secured Fixed Rate Notes due 2032,
Upgraded to Aa1 (sf); previously on Nov 8, 2019 Definitive Rating
Assigned Aa2 (sf)
EUR24,500,000 Class C Deferrable Mezzanine Floating Rate Notes due
2032, Upgraded to A1 (sf); previously on Nov 8, 2019 Definitive
Rating Assigned A2 (sf)
EUR10,500,000 Class F Deferrable Junior Floating Rate Notes due
2032, Downgraded to Caa1 (sf); previously on Nov 8, 2019 Definitive
Rating Assigned B3 (sf)
Moody's has also affirmed the ratings on the following notes:
EUR217,000,000 Class A Senior Secured Floating Rate Notes due
2032, Affirmed Aaa (sf); previously on Nov 8, 2019 Definitive
Rating Assigned Aaa (sf)
EUR22,750,000 Class D Deferrable Mezzanine Floating Rate Notes due
2032, Affirmed Baa3 (sf); previously on Nov 8, 2019 Definitive
Rating Assigned Baa3 (sf)
EUR17,500,000 Class E Deferrable Junior Floating Rate Notes due
2032, Affirmed Ba2 (sf); previously on Nov 8, 2019 Definitive
Rating Assigned Ba2 (sf)
Adagio CLO VIII Designated Activity Company, issued in November
2019, is a collateralised loan obligation (CLO) backed by a
portfolio of mostly high-yield senior secured European loans. The
portfolio is managed by AXA Investment Managers US Inc. The
transaction's reinvestment period will end in April 2024.
RATINGS RATIONALE
The upgrades on the ratings on the Class B-1, Class B-2, Class C
are primarily a result of the benefit of the shorter period of time
remaining before the end of the reinvestment period in April 2024.
The downgrade to the rating on the Class F notes is due to par loss
linked to defaults and trading, leading to the deterioration in the
Class F over-collateralisation ratio. According to the trustee
report dated June 2023 [1], the Class A/B, Class C, Class D, Class
E and Class F OC ratios are reported at 137.48%, 125.30%, 115.78%,
109.38% and 105.87% compared to January 2024 [2] levels of 136.07%,
124.01%, 114.58%, 108.25% and 104.78%, respectively.
The affirmations on the ratings on the Class A, Class D and Class E
notes are primarily a result of the expected losses on the notes
remaining consistent with their current rating levels, after taking
into account the CLO's latest portfolio, its relevant structural
features and its actual over-collateralisation ratios.
In light of reinvestment restrictions during the amortisation
period, and therefore the limited ability to effect 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.
Key model inputs:
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 used the following assumptions:
Performing par and principal proceeds balance: EUR340.2m
Defaulted Securities: EUR5.9m
Diversity Score: 61
Weighted Average Rating Factor (WARF): 2864
Weighted Average Life (WAL): 4.23 years
Weighted Average Spread (WAS) (before accounting for Euribor
floors): 3.99%
Weighted Average Coupon (WAC): 3.86%
Weighted Average Recovery Rate (WARR): 43.91%
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
December 2021.
Counterparty Exposure:
The rating action took into consideration the notes' exposure to
relevant counterparties, such as account bank, using the
methodology "Moody's Approach to Assessing Counterparty Risks in
Structured Finance methodology" published in October 2023. 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:
The rated notes' performance is subject to uncertainty. The notes'
performance is sensitive to the performance of the underlying
portfolio, which in turn depends on economic and credit conditions
that may change. The collateral manager's investment decisions and
management of the transaction will also affect the notes'
performance.
Additional uncertainty about performance is due to the following:
-- Portfolio amortisation: Once reaching the end of the
reinvestment period in April 2024, 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.
-- Weighted average life: The notes' ratings are sensitive to the
weighted average life assumption of the portfolio, which could
lengthen as a result of the manager's decision to reinvest in new
issue loans or other loans with longer maturities, or participate
in amend-to-extend offerings.
-- Recovery of defaulted assets: Market value fluctuations in
trustee-reported defaulted assets and those Moody's assumes have
defaulted can result in volatility in the deal's
over-collateralisation levels. Further, the timing of recoveries
and the manager's decision whether to work out or sell defaulted
assets can also result in additional uncertainty.
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.
AVOCA CLO XI: S&P Affirms 'B-(sf)' Rating on Class F-R Notes
------------------------------------------------------------
S&P Global Ratings raised its credit ratings on Avoca CLO XI DAC's
class B-1R-R, B-2R, and B-3R notes to 'AAA (sf)' from 'AA+ (sf)'.
At the same time, S&P raised to 'AA+ (sf)' from 'AA- (sf)' its
ratings on the class C-1R and C-2R notes, to 'A+ (sf)' from 'A-
(sf)' its rating on the class D-R notes, and to 'BB+ (sf)' from 'BB
(sf)' its rating on the class E-R notes. S&P affirmed its 'AAA
(sf)' rating on the class A-R-R notes, and its 'B- (sf)' rating on
the class F-R notes.
The rating actions follow the application of our global corporate
CLO criteria and our credit and cash flow analysis of the
transaction based on the December 2023 trustee report.
S&P's ratings address timely payment of interest and ultimate
payment of principal on the class A-R-R, B-1R-R, B-2R, and B-3R
notes and ultimate payment of interest and principal on the class
C-1R, C-2R, D-R, E-R, and F-R notes.
Since S&P reviewed the transaction in 2022:
-- The portfolio's weighted-average rating is unchanged at 'B'.
-- The portfolio has become less diversified since the CLO began
its amortization phase (the number of performing obligors has
decreased to 139 from 184).
-- The portfolio's weighted-average life has decreased to 3.334
years from 3.87 years.
-- The percentage of 'CCC' rated assets has increased to 5.04%
from 3.19%, mainly due to increased pool concentration.
Despite a more concentrated portfolio and a slight deterioration in
credit quality, the scenario default rates (SDRs) have decreased
for all rating scenarios, mainly due to the reduction in the
portfolio's weighted-average life to 3.334 years from 3.87 years.
Portfolio benchmarks
CURRENT PREVIOUS
SPWARF 2,767.82 2,758.71
Default rate dispersion (%) 710.89 647.03
Weighted-average life (years) 3.334 3.87
Obligor diversity measure 90.89 119.76
Industry diversity measure 20.305 19.62
Regional diversity measure 1.297 1.34
SPWARF—S&P Global Ratings weighted-average rating factor.
On the cash flow side:
-- The transaction's reinvestment period ended in June 2021. The
class A-R-R notes have deleveraged by EUR198.94 million since
then.
-- No class of notes is deferring interest.
-- All coverage tests are passing as of the December 2023 trustee
report.
Transaction key metrics
CURRENT PREVIOUS
Total collateral amount (mil. EUR)* 299.66 461.49
Defaulted assets (mil. EUR) 1.00 0.00
Number of performing obligors 139 184
Portfolio weighted-average rating B B
'CCC' assets (%) 5.04 3.19
'AAA' SDR (%) 56.29 57.37
'AAA' WARR (%) 36.93 37.26
*Performing assets plus cash and expected recoveries on defaulted
assets.
SDR--scenario default rate.
WARR--Weighted-average recovery rate.
Credit enhancement
(BASED ON THE
DECEMBER 2023
CURRENT TRUSTEE REPORT)
CLASS AMOUNT (EUR) CURRENT (%) PREVIOUS (%)
A-R-R 101,061,977 66.27 43.33
B-1R-R 20,000,000 46.25 30.33
B-2R 27,000,000 46.25 30.33
B-3R 13,000,000 46.25 30.33
C-1R 21,000,000 34.24 22.53
C-2R 15,000,000 34.24 22.53
D-R 23,000,000 26.56 17.54
E-R 27,500,000 17.39 11.58
F-R 15,800,000 12.11 8.16
Sub N/A N/A N/A
Credit enhancement = [Performing balance + cash balance + recovery
on defaulted obligations (if any) – tranche balance (including
tranche balance of all senior tranches)]/ [Performing balance +
cash balance + recovery on defaulted obligations (if any)].
N/A--Not applicable.
S&P said, "In our view, the portfolio is diversified across
obligors, industries, and asset characteristics. Nevertheless, due
to the CLO amortizing, it has become more concentrated since our
previous analysis. The aggregate exposure to the top 10 obligors is
now 21.30%. Hence, we have performed an additional scenario
analysis by applying adjustments for spread and recovery
compression. At the same time, almost 25% of the assets pay
semiannually. The CLO has a smoothing account that helps to
mitigate any frequency timing mismatch risks.
"Based on the improved SDRs and continued deleveraging of the
senior notes--which has increased available credit enhancement--we
raised our ratings on the class B-1R-R, B-2R, B-3R, C-1R, C-2R, D-R
and E-R notes, as the available credit enhancement is now
commensurate with higher levels of stress.
"At the same time, we affirmed our ratings on the class A-R-R and
F-R notes.
"The cash flow analysis indicated higher ratings than those
currently assigned for the class C-1R, C-2R, D-R, E-R, and F-R
notes (without the abovementioned additional sensitivity analysis).
However, we have considered that the manager may still reinvest
unscheduled redemption proceeds and sale proceeds from
credit-impaired and credit-improved assets. Such reinvestments (as
opposed to repayment of the liabilities), which we could see in the
latest trustee report, may prolong the repayment profile for the
most senior class of notes. We also considered the portion of
senior notes outstanding, the current macroeconomic environment,
and these classes' seniority. Considering all of these factors, we
raised our ratings on the class B-1R-R, B-2R, B-3R, and E-R notes
by one notch and the class C-1R, C-2R, and D-R notes by two
notches."
"Counterparty, operational, and legal risks are adequately
mitigated in line with our criteria.
"Following the application of our structured finance sovereign risk
criteria, we consider the transaction's exposure to country risk to
be limited at the assigned ratings, as the exposure to individual
sovereigns does not exceed the diversification thresholds outlined
in our criteria."
DILOSK RMBS 8: DBRS Finalizes B(High) Rating on Class X Notes
-------------------------------------------------------------
DBRS Ratings GmbH finalized the provisional credit ratings on the
residential mortgage-backed notes issued by Dilosk RMBS No. 8 (STS)
DAC (the Issuer) as follows:
-- Class A notes at AAA (sf)
-- Class B notes at AA (high) (sf)
-- Class C notes at A (high) (sf)
-- Class D notes at A (low) (sf)
-- Class E notes at BBB (high) (sf)
-- Class F notes at BBB (high) (sf)
-- Class X notes at B (high) (sf)
The final credit ratings assigned to the Class B, Class D, Class E,
Class F, and Class X notes differ from the provisional credit
ratings of AA (sf), BBB (high) (sf), BB (high), B (low), and CCC
(sf), respectively, because of the tighter spreads and step-up
margins on Classes A through F in the final structure. For Class F
the difference from provisional to final ratings is more pronounced
as for the other Classes of notes due to its small size and hence
being even more sensitive to significant margin reductions.
The credit rating on the Class A notes addresses the timely payment
of interest and ultimate payment of principal. The credit rating on
the Class B notes addresses the timely payment once most senior and
the ultimate payment of principal on or before the legal final
maturity date. The credit ratings on Classes C, D, E, F, and X
notes address the ultimate payment of interest and principal on or
before the legal final maturity date. Morningstar DBRS does not
rate the Class Z notes expected to be issued in this transaction.
CREDIT RATING RATIONALE
The Issuer is a bankruptcy-remote, special-purpose vehicle
incorporated in the Republic of Ireland (Ireland). The Issuer has
used the proceeds of the notes to fund the purchase of prime and
performing Irish owner-occupied (OO) mortgage loans secured over
properties located in Ireland. The mortgage loans included in the
portfolio were originated by Dilosk DAC (Dilosk; the originator,
seller, and servicer) between 2017 and 2024 and includes 23% of
loans that were previously securitized under Dilosk RMBS No. 4 DAC,
which has been called prior to closing of Dilosk RMBS No. 8 (STS)
DAC.
This is the eighth securitization from Dilosk, following Dilosk
RMBS No. 7, which closed in August 2023. The mortgage portfolio
consists of EUR 411 million of first-lien mortgage loans
collateralized by OO residential properties in Ireland. The
mortgage loans are all current on their payments with a portion of
0.1% of the portfolio being one month in arrears. The
weighted-average (WA) seasoning of the portfolio is two years.
The mortgage loans will be serviced by BCMGlobal ASI Limited
(BCMGlobal), trading as BCMGlobal, in its role as delegated
servicer. Morningstar DBRS reviewed both the originator and
servicer via an email update in February 2023. Underwriting
guidelines are in accordance with market practices observed in
Ireland and are subject to the Central Bank of Ireland's
macroprudential mortgage regulations, which specify restrictions on
certain lending criteria.
Liquidity in the transaction is provided by the non-amortizing
general reserve fund (GRF), which the Issuer can use to pay senior
costs and interest on the rated notes but also to clear principal
deficiency ledger (PDL) balances. Liquidity for the Class A notes
is further supported by a liquidity reserve fund (LRF), fully
funded at closing and then amortizing in line with the referred
class of notes. The notes' terms and conditions allow interest
payments, other than on the Class A notes and on the Class B notes
when they are the most senior notes outstanding, to be deferred if
the available funds are insufficient.
The notes were sized off the end of December 2023 collateral
balance whereas the portfolio securitized relates to the end of
January 2024. The amortization experienced between December 2023
and January 2024 will be retained from the note proceeds at closing
and will be used to amortize the Class A notes on the first IPD.
Morningstar DBRS based its credit ratings on a review of the
following analytical considerations:
-- The transaction's capital structure, including the form and
sufficiency of available credit enhancement;
-- The credit quality of the mortgage portfolio and the ability of
the servicer to perform collection and resolution activities.
Morningstar DBRS estimated stress-level probability of default
(PD), loss given default (LGD), and expected losses (EL) on the
mortgage portfolio. Morningstar DBRS used the PD, LGD, and EL as
inputs into the cash flow engine. Morningstar DBRS analyzed the
mortgage portfolio in accordance with its "European RMBS Insight:
Irish Addendum" methodology;
-- The transaction's ability to withstand stressed cash flow
assumptions and repay the Class A, Class B, Class C, Class D, Class
E, Class F, and Class X notes according to the terms of the
transaction documents;
-- The structural mitigants in place to avoid potential payment
disruptions caused by operational risk, such as a downgrade, and
replacement language in the transaction documents;
-- The sovereign credit rating of AA (low) with a Stable trend on
the Republic of Ireland as of the date of this press release; and
-- The expected consistency of the transaction's legal structure
with Morningstar DBRS' "Legal Criteria for European Structured
Finance Transactions" methodology and the presence of legal
opinions that are expected to address the assignment of the assets
to the Issuer.
Morningstar DBRS' credit ratings on the rated notes address the
credit risk associated with the identified financial obligations in
accordance with the relevant transaction documents. The associated
financial obligations for each of the rated notes are the related
Interest Payment Amounts and the related Class Balances.
Morningstar DBRS' credit ratings on the rated notes also address
the credit risk associated with the increased rate of interest
applicable to each of the rated notes if the rated notes are not
redeemed on the Optional Redemption Date (as defined in and) in
accordance with the applicable transaction documents.
Morningstar DBRS' credit ratings do not address nonpayment risk
associated with contractual payment obligations contemplated in the
applicable transaction documents that are not financial
obligations.
Morningstar DBRS' long-term credit ratings provide opinions on risk
of default. Morningstar DBRS considers risk of default to be the
risk that an Issuer will fail to satisfy the financial obligations
in accordance with the terms under which a long-term obligation has
been issued.
Notes: All figures are in euros unless otherwise noted.
PALMER SQUARE 2024-1: Moody's Assigns (P)Ba3 Rating to Cl. E Notes
------------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes to be issued by Palmer
Square European Loan Funding 2024-1 Designated Activity Company
(the "Issuer"):
EUR306,000,000 Class A Senior Secured Floating Rate Notes due
2033, Assigned (P)Aaa (sf)
EUR45,000,000 Class B Senior Secured Floating Rate Notes due 2033,
Assigned (P)Aa1 (sf)
EUR25,000,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2033, Assigned (P)A2 (sf)
EUR20,900,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2033, Assigned (P)Baa3 (sf)
EUR21,000,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2033, Assigned (P)Ba3 (sf)
RATINGS RATIONALE
The rationale for the rating is based on a consideration of the
risks associated with the CLO's portfolio and structure as
described in Moody's methodology.
The Issuer is a static CLO. The issued notes will be collateralized
primarily by broadly syndicated senior secured corporate loans. We
expect the portfolio to be 100% ramped as of the closing date.
Palmer Square Europe Capital Management LLC may sell assets on
behalf of the Issuer during the life of the transaction.
Reinvestment is not permitted and all sales and principal proceeds
received will be used to amortize the notes in sequential order.
In addition to the five classes of notes rated by Moody's, the
Issuer will issue EUR36,700,000 of Subordinated Notes which are not
rated.
The transaction incorporates interest and par coverage tests which,
if triggered, divert interest and principal proceeds to pay down
the notes in order of seniority.
Methodology underlying the rating action:
The principal methodology used in these ratings was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
December 2021.
Factors that would lead to an upgrade or downgrade of the ratings:
The rated notes' performance is subject to uncertainty. The notes'
performance is sensitive to the performance of the underlying
portfolio, which in turn depends on economic and credit conditions
that may change. The collateral manager's investment decisions and
management of the transaction will also affect the notes'
performance.
Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3 of
the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in December 2021.
Moody's used the following base-case modeling assumptions(*):
Par Amount: EUR450,000,000
Diversity Score: 65
Weighted Average Rating Factor (WARF): 2778
Weighted Average Spread (WAS): 4.04% (actual spread vector of the
portfolio)
Weighted Average Coupon (WAC): 3.53% (actual spread vector of the
portfolio)
Weighted Average Recovery Rate (WARR): 44.61%
Weighted Average Life (WAL): 4.3 years (actual amortization vector
of the portfolio)
(*) Moody's base case assumptions are based on a provisional
portfolio (including unidentified assets) provided by the manager.
=========
I T A L Y
=========
MAIOR SPV: DBRS Cuts Credit Rating to CCC, Trend Negative
---------------------------------------------------------
DBRS Ratings GmbH downgraded its credit rating on the Class A notes
issued by Maior SPV S.r.l. (the Issuer) to CCC (sf) from CCC (high)
(sf) and maintained the Negative trend on the credit rating.
The transaction represents the issuance of Class A, Class B, and
Class J notes (collectively, the notes). The credit rating on the
Class A notes addresses the timely payment of interest and the
ultimate payment of principal. Morningstar DBRS does not rate the
Class B or J notes.
At issuance, the notes were backed by a EUR 2.75 billion portfolio
by gross book value (GBV) consisting of secured and unsecured
Italian nonperforming loans originated by Unione di Banche Italiane
S.p.A. and IW Bank S.p.A.
The majority of loans in the portfolio defaulted between 2013 and
2017 and are in various stages of resolution. As of the cut-off
date, approximately 47% of the pool by GBV was secured. According
to the latest information provided by the servicer in December
2023, 38.4% of the pool by GBV was secured. At closing, the loan
pool mainly comprised corporate borrowers (approximately 83% by
GBV), which accounted for approximately 85.8% of the GBV as of
December 2023.
The receivables are serviced by Prelios Credit Servicing S.p.A.
(Prelios or the servicer) while Banca Finint S.p.A. (formerly
Securitization Services S.p.A.) operates as the backup servicer.
CREDIT RATING RATIONALE
The downgrade follows a review of the transaction and is based on
the following analytical considerations:
-- Transaction performance: An assessment of portfolio recoveries
as of December 2023, focusing on (1) a comparison between actual
collections and the servicer's initial business plan forecast; (2)
the collection performance observed over recent months; and (3) a
comparison between the current performance and Morningstar DBRS'
expectations.
-- Updated business plan: The servicer's updated business plan as
of June 2023, received in January 2024, and the comparison with the
initial collection expectations.
-- Portfolio characteristics: The loan pool composition as of
December 2023 and the evolution of its core features since
issuance.
-- Transaction liquidating structure: The order of priority
entails a fully sequential amortization of the notes (i.e., the
Class B notes will begin to amortize following the full repayment
of the Class A notes and the Class J notes will amortize following
the repayment of the Class B notes). Additionally, interest
payments on the Class B notes become subordinated to principal
payments on the Class A notes if the cumulative collection ratio or
present value cumulative profitability ratio is lower than 90%.
These triggers have been breached since the January 2022 interest
payment date (IPD), with the actual figures at 57.4% and 100.6% as
of the January 2024 IPD, respectively, according to the servicer.
-- Liquidity support: The transaction benefits from an amortizing
cash reserve providing liquidity to the structure and covering
potential interest shortfall on the Class A notes and senior fees.
The cash reserve target amount is equal to 4.0% of the Class A
notes principal outstanding and is currently fully funded.
According to the latest investor report from January 2024, the
outstanding principal amounts of the Class A, Class B, and Class J
notes were EUR 261.5 million, EUR 60.0 million, and EUR 26.9
million, respectively. As of the January 2024 payment date, the
balance of the Class A notes had amortized by 58.4% since issuance
and the current aggregated transaction balance was EUR 348.4
million.
As of December 2023, the transaction was performing below the
servicer's business plan expectations. The actual cumulative gross
collections equaled EUR 519.2 million, whereas the servicer's
initial business plan estimated cumulative gross collections of EUR
868.4 million for the same period. Therefore, as of December 2023,
the transaction was underperforming by EUR 349.2 million (-40.2%)
compared with the initial business plan expectations.
At issuance, Morningstar DBRS estimated cumulative gross
collections for the same period of EUR 500.9 million at the BBB
(low) (sf) stressed scenario. Therefore, as of December 2023, the
transaction was performing below Morningstar DBRS' initial stressed
scenarios.
Pursuant to the requirements set out in the receivable servicing
agreement, in January 2024, the servicer delivered an updated
portfolio business plan. The updated portfolio business plan
combined with the actual cumulative gross collections of EUR 485.9
million as of June 2023 resulted in a total of EUR 777.1 million,
which is 22.8% lower than the total gross disposition proceeds of
EUR 1,007.2 million estimated in the initial business plan and is
expected to be realized over a longer period of time.
Excluding the actual collections, the servicer's expected future
collections from January 2024 amount to EUR 257.8 million.
Considering the senior costs, interest, and fees due on the notes,
the full repayment of Class A principal is increasingly unlikely,
but considering the transaction structure, a payment default on the
Notes would likely occur only a few years from now.
The final maturity date of the transaction is in July 2040.
Morningstar DBRS' credit rating on the Class A notes addresses the
credit risk associated with the identified financial obligations in
accordance with the relevant transaction documents. The associated
financial obligations are the related Interest Payment Amounts and
the note's Class Balance.
Morningstar DBRS' credit rating does not address nonpayment risk
associated with contractual payment obligations contemplated in the
applicable transaction document(s) that are not financial
obligations.
Morningstar DBRS' long-term credit ratings provide opinions on risk
of default. Morningstar DBRS considers risk of default to be the
risk that an issuer will fail to satisfy the financial obligations
in accordance with the terms under which a long-term obligation has
been issued.
Notes: All figures are in euros unless otherwise noted.
=====================
N E T H E R L A N D S
=====================
PEARLS NETHERLANDS: Moody's Rates $320MM 1st Lien Term Loan 'B2'
----------------------------------------------------------------
Moody's Investors Service downgraded the senior secured 1st lien
bank credit facilities of Pearls (Netherlands) BidCo B.V. (Caldic)
to B2 from B1 and assigned a B2 rating to the $320 million
equivalent senior secured 1st lien term loan B2. The outlook is
negative.
The company announced that it raised $320 million equivalent of
senior secured debt to fund mainly the repayment of the (unrated)
second-lien facilities.
RATINGS RATIONALE
The rating action reflects that first lien lenders will no longer
benefit from a meaningful loss absorption cushion, which had
previously supported a one notch difference between the Caldic's
CFR and the senior secured bank credit facilities, after the
expected repayment of the second-lien facilities.
With the transaction, the company will achieve interest savings,
which will support free cash flow.
Caldic's weak credit metrics, including expected pro-forma gross
leverage (including full year impact of acquisitions) of around 9x
in 2023; exposure to cyclical industrial end markets; risk of
debt-funded acquisitions; and some integration risk related to the
merger of different operations constrain its B2 corporate family
rating (CFR).
The rating positively reflects Caldic's leadership positions in the
global specialty chemicals and life science ingredients markets;
capacity for free cash flow (FCF) because of its capital
spending-light business model; diversified customer and product
base; and good liquidity profile.
LIQUIDITY
Caldic has good liquidity. As of the end of December 2023, the
company reported EUR213 million (adjusted for factoring collateral)
of cash on balance sheet. The company has also access to a EUR155
million Revolving Credit Facility (RCF). In combination with
forecasted funds from operations, these funds are sufficient to
cover capital spending, working capital swings and day-to-day cash
needs. Most of its debt does not mature until 2029 (RCF matures in
2028). Caldic also has access to non-recourse factoring lines to
manage working capital swings.
STRUCTURAL CONSIDERATIONS
The B2 instrument ratings on the senior secured term loan B and the
senior secured RCF reflect their dominant position in the capital
structure. The senior secured facilities benefit from guarantors
representing at least 80% of EBITDA in certain jurisdictions. The
security package includes share pledge over certain entities as
well as pledges over certain bank accounts and certain intercompany
receivables. The security package also includes other assets in the
United States, subject to customary limitations and exceptions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Positive pressure could arise if the company builds a track record
of reducing its Moody's-adjusted total debt/EBITDA sustainably
below 5x; continues to generate meaningful positive free cash flow
(FCF), while also maintaining an adequate liquidity profile;
Moody's-adjusted EBITA/interest expense is around 2.5x;
demonstrates a disciplined approach concerning inorganic growth
opportunities.
Negative pressure on the ratings could arise with evidence of the
company's inability to generate sustained positive FCF;
deterioration of the liquidity profile; Moody's-adjusted total
debt/EBITDA remains above 6x; EBITA/interest expense deteriorated
below 1.75x on a sustainable basis.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in February 2023.
COMPANY DESCRIPTION
Headquartered in the Netherlands, Caldic is one of the world's
leading specialty chemicals and life science ingredients
distributors. In 2022, Advent acquired Caldic, and combined the
activities of Caldic and the Latin America-based chemicals
distributor GTM, which has been owned by Advent since 2014. In
early 2023, the company merged with the Asian-Pacific distributor
Connell. Caldic is owned by the private equity firm Advent (largest
shareholder), the family-owned company Wilbur-Ellis (previous owner
of Connell) and the management team.
===========
N O R W A Y
===========
B2 IMPACT: S&P Upgrades ICR to 'BB-', Outlook Stable
----------------------------------------------------
S&P Global Ratings raised to 'BB-' from 'B+' its long-term ratings
on B2 and its senior unsecured notes on Norwegian debt collector B2
Impact ASA (B2). The recovery rating on the notes is unchanged at
'4', indicating its expectation of average recovery (30%-50%,
rounded average 40%) in the event of a payment default.
The stable outlook indicates that S&P expects B2 to maintain sound
collection levels and stable cash-adjusted EBITDA levels.
A steady competitive position, solid investment performance, and
reduced refinancing risk have improved B2's credit quality. The
solid performance that B2 had both in its secured and unsecured
portfolio through 2023 resulted in higher-than-expected revenue.
The company managed to increase revenue by 15%, excluding income
from joint ventures. The company's conservative pricing policy
partly explains this surge in income as B2 managed to sell its
largest secured claim, a hotel in Croatia, above the value it had
initially registered the asset for. The increase in the company's
top line also resulted in cash-adjusted EBITDA levels 22% higher
than the previous year. S&P said, "Even if we expect that
recoveries from its secured portfolio will continue, we forecast
they will be lower than this year's, given the recovery volume
obtained with the sale of the Croatian hotel."
S&P said, "We consider that B2 will focus its growth efforts on its
unsecured portfolio for the next 12 months as it takes advantage of
the current market dynamics within the distressed debt purchaser
(DDP) industry and B2's present light balance sheet. The latter,
coupled with lower refinancing risk after prepaying its May 2024
maturity for EUR200 million, leaves the company in a better
financial position to increase its investment volumes with higher
internal rates of return (IRR) compared with many of its peers with
higher leverage.
"We expect leverage ratios to remain moderate. Following a year
with increased cash-adjusted EBITDA levels and conservative debt
volumes, B2 benefits from leverage ratios that compare favorably
with those of its industry peers. As of December 2023, the
company's adjusted leverage ratio stood at 2.3x, and we think it
will stay moderate, with debt-to-cash-adjusted EBITDA levels
between 2.5x and 2.7x (unadjusted leverage 7.5x-7.7x), despite a
likely increase in investments."
Liquidity will remain sound, mainly supported by B2's funds from
operations (FFO). Improved collections in 2023 also bolstered B2's
liquidity position, increasing its cash and equivalents by nearly
20% year on year. For the refinancing of the May 2024 maturity, B2
only issued EUR100 million to the market, and it prepaid the
remaining EUR100 million using cash and the revolving credit
facility (RCF) in equal amounts. S&P expects the company to
proactively extend its RCF maturing in 2024 and note absence of
other maturities in 2024-2025.
S&P said, "The stable outlook reflects our view that, for the next
12 months, B2 will maintain sound collection levels that will
translate into stable cash-adjusted EBITDA levels with margins
around 60%. We also consider that the company will maintain its
competitive position within the European debt collection market and
continue proactive liquidity management.
"We could lower the rating on B2 if the company is overly
aggressive in its growth plans and exceeds our leverage
expectations for the next 12 months. While less likely, this could
also happen if B2's collections deteriorate materially due to
weaker macroenvironment or if the company recognizes any
substantial negative revaluation within its portfolio affecting its
cash-adjusted EBITDA levels.
"Over the medium term, we could raise the rating on B2 if its
competitive position materially improved and it established itself
as one of the top distressed debt collectors within the European
market or in case of material reduction in leverage."
Company Description
Founded in 2011 and domiciled in Norway, B2 has quickly become a
well-established pan-European debt purchaser. It has expanded
through a combination of organic growth and bolt-on acquisitions of
local collection platforms. B2 owns unsecured and, to a lesser
extent, secured claims in 21 countries across Europe with a book
value of about Norwegian krone (NOK)11.5 billion, on which it
expects to collect NOK22.5 billion (about EUR2 billion, including
joint ventures) as of Dec. 31, 2023.
S&P's Base-Case Scenario
Assumptions
-- Estimate eurozone GDP growth of 0.6% for 2023, then forecast to
rise slightly to 0.8% in 2024. Collection and nonperforming loan
acquisitions are expected to pick up across the debt-purchasing
industry in 2024.
-- B2 to increase its investment appetite to take advantage of
current market dynamics.
-- B2's 2024 revenue to remain at similar levels as the past few
years, compensating for the Croatian hotel income by increasing its
unsecured collections, followed by a 5% increase in 2025.
-- Cash EBITDA margins to remain broadly stable at 60%-62% in
2024-2025, slightly below its three-year average of 63%.
-- NOK3 billion budgeted for new investments, as the company
intensifies its investment particularly in unsecured loans.
Key metrics
S&P said, "We assess B2's liquidity as adequate, since we estimate
sources will exceed uses by more than 1.2x in 2024. We note that
apart from the RCF and the bond maturing in May 2024, that's
already prefinanced, the company doesn't have maturities in
2024-2025. We expect the company to proactively extend or refinance
its RCF maturing in 2024."
Principal liquidity sources over the 12 months started Jan. 1,
2024, include:
-- Cash balance of about NOK1.2 billion, including the
unrestricted cash balance and short-term deposits.
-- The undrawn portion of the RCF and bridge facility of NOK1.8
billion.
-- Cash FFO of about NOK3.2 billion.
-- The issuance of NOK1,1140 million (EUR100 million).
Principal liquidity uses for the same period include:
-- Some minor working capital and maintenance capital expenditure
outflows.
-- Debt maturities (in May 2024) of about NOK2 billion.
-- Portfolio investments of NOK2 billion-NOK3 billion, which are
subject to market conditions and investment opportunities.
-- Shareholder remuneration of about NOK165 million.
Covenants
B2 is subject to maintenance covenants under its bond and RCF
documentation, under which we expect the company will maintain
ample headroom.
RCF covenants:
-- Net interest coverage ratio: Greater than 4.0x (4.4x as of
December 2023 pro-forma adjusted).
-- Leverage ratio: Less than 4.0x (1.9x as of December 2023
pro-forma adjusted).
-- Equity ratio: Greater than 25.0% (32.6% as December 2023).
-- Secured loan-to-value ratio: Less than 65% (43% as of
second-quarter 2023 per the restricted group that excludes the
PIMCO loan and relevant secured assets).
-- Total loan-to-value ratio: Less than 75% (66.2% as of December
2023).
Bond covenants:
-- Net interest coverage ratio: Greater than 4.0x (4.4x as of
December 2023).
-- Leverage ratio: Less than 4.0x (1.9x as of December 2023).
-- Secured loan-to-value ratio: Less than 65% (43% as of
second-quarter 2023 per the restricted group that excludes the
PIMCO loan and relevant secured assets).
-- The issue rating on B2's EUR300 million senior unsecured bonds
due in 2026 is 'BB-'. The recovery rating is '4', indicating S&P's
expectation of meaningful recovery (30%-50%; rounded estimate: 40%)
in an event of default.
-- S&P's recovery estimate is somewhat constrained by the
structural subordination of debt instruments to the NOK610 million
(EUR53 million) senior RCF.
-- In S&P's default scenario, it contemplates a default during the
second half of 2028, reflecting a significant decline in cash flow
because of lost clients, difficult collection conditions, or
greater competitive pressures, leading to the mispricing of
portfolio purchases.
-- S&P uses a discrete asset-valuation approach, in line with
other debt purchasers with revenue concentrated on own-debt
collections.
-- S&P considers the multi-currency senior secured RCF, with a
current volume of EUR610 million. It assumes 85% of the facility
will be drawn.
-- S&P takes the company's portfolio as of year-end 2023, assume
70% of the undrawn RCF balance is used for portfolio purchases, and
apply a 25% haircut to the total expected book value as an estimate
of resale value in a liquidation.
-- In addition, S&P considers the volume of real estate owned
(REO) and apply a more conservative 45% haircut. This reflects some
potential revaluations of these real estate assets.
Simulated default assumptions
-- Year of default: 2028
-- EBITDA multiple: 5x
-- EBITDA value at emergence: NOK156 million
-- Jurisdiction: Norway
-- Gross enterprise value (EV) at default: NOK739.6 million
-- Admin. costs: 5%
-- Net EV after admin. costs: about NOK702.6 million
-- Super-senior RCF debt claims: about NOK537.9 million
-- Collateral value available to senior unsecured creditors:
NOK164.7 million
-- Senior unsecured debt claims: NOK421.5 million
--Recovery expectations: 30%-50% (rounded estimate: 40%)
Note: All debt amounts include six months of prepetition interest.
=========
S P A I N
=========
CAIXABANK RMBS 2: DBRS Confirms BB(High) Rating on Class B Notes
----------------------------------------------------------------
DBRS Ratings GmbH confirmed the credit ratings on the notes issued
by two CaixaBank RMBS transactions as follows:
CaixaBank RMBS 1, FT (CB1)
-- Class A Notes at AA (sf)
-- Class B Notes at A (low) (sf)
CaixaBank RMBS 2, FT (CB2)
-- Class A Notes at AA (sf)
-- Class B Notes at BB (high) (sf)
The credit ratings on the Class A Notes address the timely payment
of interest and the ultimate repayment of principal on or before
the legal final maturity date of each transaction. The credit
ratings on the Class B Notes address the ultimate payment of
interest and principal on or before the legal final maturity date
of each transaction.
The credit rating actions follow an annual review of the
transactions and are based on the following analytical
considerations:
-- Portfolio performance, in terms of delinquencies, defaults, and
losses, as of the December 2023 and January 2024 payment dates for
CB1 and CB2, respectively.
-- Portfolio default rate (PD), loss given default (LGD), and
expected loss assumptions on the outstanding collateral pools; and
-- The current available credit enhancement to the rated notes to
cover the expected losses assumed at their respective credit rating
levels.
CB1 and CB2 are securitizations of first-lien residential mortgage
loans and first-lien multicredito (drawn credit lines) mortgages on
properties in Spain originated and serviced by CaixaBank, S.A.
(CaixaBank), that closed in February 2016 and March 2017,
respectively.
PORTFOLIO PERFORMANCE
CB1: As of December 2023, loans more than 90 days in arrears
slightly increased to 1.6% from 1.4% of the outstanding performing
portfolio collateral balance at the time of the last annual review.
The cumulative default ratio was at 1.6% of the original portfolio
balance (versus 1.4% in December 2022).
CB2: As of January 2024, loans more than 90 days in arrears trended
up to 2.1% from 1.7% of the outstanding performing portfolio
collateral balance. The cumulative default ratio was at 1.5% of the
original portfolio balance (versus 1.4% in January 2023).
PORTFOLIO ASUMPTIONS AND KEY DRIVERS
Morningstar DBRS conducted a loan-by-loan analysis on the remaining
receivables, considering updated multicredito balances, and updated
its base case PD and LGD assumptions to 1.7% and 9.5% (from 2.4%
and 10.6%), respectively, for CB1, and to 1.7% and 8.6% (from 2.1%
and 9.0%), respectively, for CB2.
CREDIT ENHANCEMENT
CB1: As of the December 2023 payment date, credit enhancement to
the Class A Notes was 26.6%, up from 23.3% one year ago. The Class
A Notes benefits from a reserve fund that provides liquidity
support and credit support to the Class A Notes. After two years
from closing, the reserve fund may amortize over the life of the
transaction subject to certain amortization triggers. The reserve
fund is currently at levels of EUR 556.7 million, slightly below
its target level of EUR 568.0 million, which is the minimum of 8.0%
of the outstanding balance of the rated notes and 4.0% of their
initial balance, subject to a floor of 2.0% of that initial
balance.
CB2: As of the January 2024 payment date, credit enhancement to the
Class A Notes was 24.4%, up from 22.3% last year. The Class A Notes
benefit from a reserve fund that provides liquidity support and
credit support to the Class A Notes. After two years from closing,
the reserve fund may amortize over the life of the transaction
subject to the certain amortization triggers. The reserve fund is
currently at its target level of EUR 92.4 million, which is the
minimum of 6.0% of the current outstanding balance of the rated
notes and 4.75% of their initial balance.
The only available subordination for the Class B Notes is the
reserve fund, which currently covers principal and interest
payments on the Class A Notes only. However, upon payment in full
of the Class A Notes, the reserve fund will also become available
for the Class B Notes in each transaction.
CaixaBank acts as the account bank for both transactions. Based on
the account bank reference rating of A (high) (sf) on CaixaBank,
which is one notch below its Morningstar DBRS Long-Term Critical
Obligations Rating of AA (low), the downgrade provisions outlined
in the transaction documents, and other mitigating factors inherent
in the transaction structures, Morningstar DBRS considers the risk
arising from the exposure to the account bank to be consistent with
the credit ratings assigned to the notes, as described in
Morningstar DBRS' "Legal Criteria for European Structured Finance
Transactions" methodology.
Morningstar DBRS' credit ratings on the rated notes address the
credit risk associated with the identified financial obligations in
accordance with the relevant transaction documents.
Morningstar DBRS' credit ratings do not address nonpayment risk
associated with contractual payment obligations contemplated in the
applicable transaction documents that are not financial
obligations.
Morningstar DBRS' long-term credit ratings provide opinions on risk
of default. Morningstar DBRS considers risk of default to be the
risk that an issuer will fail to satisfy the financial obligations
in accordance with the terms under which a long-term obligation has
been issued.
Notes: All figures are in euros unless otherwise noted.
PYMES SANTANDER 15: Moody's Affirms Ca Rating on EUR150MM C Notes
-----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of Serie B notes
issued by FONDO DE TITULIZACION PYMES SANTANDER 15. The rating
action reflects the increased credit enhancement level for the
affected note.
EUR600M Serie B Notes, Upgraded to Baa3 (sf); previously on Aug
25, 2023 Upgraded to Ba2 (sf)
Moody's affirmed the ratings of the notes that had sufficient
credit enhancement to maintain their current ratings.
EUR2400M Serie A Notes, Affirmed Aa1 (sf); previously on Aug 25,
2023 Affirmed Aa1 (sf)
EUR150M Serie C Notes, Affirmed Ca (sf); previously on Aug 25,
2023 Affirmed Ca (sf)
FONDO DE TITULIZACION PYMES SANTANDER 15 is a cash securitisations
of standard loans and credit lines granted by Banco Santander S.A.
(Spain) ("Santander", LT Deposit Rating: A2 / ST Deposit Rating:
P-1) to small and medium-sized enterprises ("SMEs") and
self-employed individuals located in Spain.
Maximum achievable rating is Aa1 (sf) for structured finance
transactions in Spain, driven by the corresponding local currency
country ceiling of the country.
RATINGS RATIONALE
The rating action is prompted by an increase in credit enhancement
for the affected tranche.
Revision of Key Collateral Assumption:
As part of the rating action, Moody's reassessed its default
probability and recovery rate assumptions for the portfolio
reflecting the collateral performance to date.
The performance of the transaction has continued to be stable since
last rating action in August 2023. Total delinquencies have
increased in the past year, with 90 days plus arrears currently
standing at 0.56% of current pool balance. Cumulative defaults
currently stand at 1.35% of original pool balance up from 0.79% a
year earlier.
For FONDO DE TITULIZACION PYMES SANTANDER 15, the current default
probability is 10% of the current portfolio balance and the
assumption for the stochastic recovery rate is 35%. Moody's has
decreased the CoV to 41.6% from 48.5%, which, combined with the
revised key collateral assumptions, corresponds to a portfolio
credit enhancement of 23%.
Moody's increased the default probability assumption to 10% from 9%
in FONDO DE TITULIZACION PYMES SANTANDER 15 to reflect the
portfolio composition based on updated loan-by-loan information,
taking into consideration the current industry concentration among
other credit risk factors.
Increase in Available Credit Enhancement
Sequential amortization led to the increase in the credit
enhancement available in this transaction.
For instance, the credit enhancement for Class B increased to 16.4%
from 12.3% since the last rating action.
Counterparty Exposure:
The rating actions took into consideration the notes' exposure to
relevant counterparties, such as servicer or account bank.
Methodology Underlying the Rating Action:
The principal methodology used in these ratings was "SME
Asset-Backed Securitizations methodology" published in December
2023.
Factors that would lead to an upgrade or downgrade of the ratings:
Factors or circumstances that could lead to an upgrade of the
ratings include (1) performance of the underlying collateral that
is better than Moody's expected, (2) an increase in available
credit enhancement and (3) improvements in the credit quality of
the transaction counterparties and (4) a decrease in sovereign
risk.
Factors or circumstances that could lead to a downgrade of the
ratings include (1) an increase in sovereign risk, (2) performance
of the underlying collateral that is worse than Moody's expected,
(3) deterioration in the notes' available credit enhancement and
(4) deterioration in the credit quality of the transaction
counterparties.
===========
S W E D E N
===========
ERICSSON: Moody's Affirms 'Ba1' CFR, Outlook Stable
---------------------------------------------------
Moody's Investors Service has affirmed the Ba1 long-term corporate
family rating, the Ba1-PD probability of default rating and the Ba1
senior unsecured long-term debt ratings of Telefonaktiebolaget LM
Ericsson (Ericsson), a leading global provider of
telecommunications equipment and related services to mobile and
fixed network operators. The outlook remains stable.
"The rating affirmation takes into account Ericsson's large scale
and leading position in the global wireless equipment market," says
Ernesto Bisagno, a Moody's Vice President - Senior Credit Officer
and lead analyst for Ericsson.
"Despite the weakened credit metrics owing to a decline in profits
in 2023, the stable outlook reflects Moody's expectation that
operating performance will strengthen in 2024, thanks to stronger
contribution from mobile networks and lower restructuring costs,"
adds Mr Bisagno.
RATINGS RATIONALE
Moody's expects Ericsson's operating performance to improve over
2024-25 driven by a recovery in the North America radio access
network (RAN), after the significant drop in 2023, and the
contribution from the new $14 billion contract with AT&T Inc.
(AT&T, Baa2 stable). However, this will be partially offset by a
decline in the Indian RAN market, given the normalization of the 5G
investment cycle in the country. Ericsson's profits will also
benefit from the cost efficiency programme and the material decline
in restructuring costs, partially offset by higher wages.
As a result, the rating agency expects Ericsson's Moody's adjusted
operating profit margin to recover towards 8% by 2024 from 4.8% in
2023. Free cash flow after shareholder distributions will improve,
although that will also depend on the evolution of working capital,
given the higher volumes linked to the AT&T contract. Moody's
forecasts that Ericsson's adjusted debt to EBITDA should decline
below 2.5x in 2024.
Ericsson's rating reflects its significant scale and relevance as
the number two wireless telecommunications equipment manufacturer
globally; strong geographical diversification, with sales well
spread across all major regions; and strong liquidity and track
record of support from its main shareholders.
The rating is constrained by the cyclicality of the telecom
equipment industry; the company's exposure to intense competition
and technology cycles; its high investment needs and R&D costs; the
decline in 2022-23 profit; and the weakened macroeconomic outlook.
LIQUIDITY
The company's liquidity is strong, reflecting its cash and cash
equivalents balance of SEK35.2 billion as of December 2023, in
addition to SEK9.6 billion of short-term fixed-income investments
and SEK9.9 billion in long-term investments; a $2.0 billion
revolving credit facility (fully undrawn as of December 2023)
maturing in September 2028, and a $1 billion revolving credit
facility due May 2025 plus 1 year extension at lenders discretion
($600 million undrawn at December 2023), both with no financial
covenants or significant adverse change conditions for drawdowns.
Free cash flow was negative in 2023 (-10 billion SEK) owing to a
combination of lower profits and increased working capital needs
but Moody's expects FCF to turn positive over 2024-25 supported by
profit recovery.
Maturities over the next 12-18 months include the EUR500 million
bond due in March 2024 and the EUR300 million euro equivalent EIB
loan due in July 2024.
RATIONALE FOR STABLE OUTLOOK
While the rating is initially weakly positioned given the weak
credit metrics in 2023, the stable outlook on the rating reflects
Moody's expectation that Ericsson's operating performance and key
credit ratios will strengthen in 2024, thanks to stronger
contribution from mobile networks and lower restructuring costs.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Upward pressure on the rating in the next 12-18 months is unlikely
given the weakened credit metrics. However, over time it could
develop if Ericsson executes its strategy successfully while it
maintains a sustainably robust competitive position and
technological leadership. Quantitatively, an upgrade would require
its Moody's-adjusted operating margin to increase towards 15%,
strong FCF after shareholder distributions, a sustained solid
liquidity profile and a strong balance sheet with a net cash
position (on a Moody's-adjusted basis).
Downward rating pressure could develop if there is a prolonged
deterioration in operating performance or the company takes on
large debt-financed acquisitions, such that its Moody's-adjusted
operating margin drops below 8%, its Moody's-adjusted debt/EBITDA
increases above 2.5x on a sustained basis with its Moody's-adjusted
cash balance dropping significantly; or FCF turns negative and
liquidity deteriorates.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Diversified
Technology published in February 2022.
COMPANY PROFILE
With net sales of SEK263 billion and Moody's-adjusted EBITDA of
SEK23.4 billion at December 2023, Telefonaktiebolaget LM Ericsson
(Ericsson) is a leading provider of telecommunications equipment
and related services to telecom operators globally. Its equipment
is used in more than 180 countries, and around 50% of the world's
5G traffic, outside mainland China, is carried over Ericsson Radio
Networks.
===========================
U N I T E D K I N G D O M
===========================
BODY SHOP: To Shut Down 57 Stores, 489 Jobs Affected
----------------------------------------------------
Hannah Boland and Riya Makwana at The Telegraph report that The
Body Shop is planning to shut 75 stores and cut almost 500 jobs
after the business collapsed into administration.
Shops slated for closure include The Body Shop's site on Regent
Street, London, which comes after the administrators axed its
flagship store on Oxford Street last week, The Telegraph states.
FRP, which is handling The Body Shop's administration, said they
would close dozens of stores over the next four to six weeks,
having already shuttered seven sites earlier this month, The
Telegraph relates.
According to The Telegraph, administrators previously said they
planned to retain more than half of the 198 locations, although had
not given a precise figure.
In its latest update, FRP said a total of 82 shops will be closed,
meaning 489 workers will be made redundant in the coming weeks, The
Telegraph notes.
Many locations affected are in towns and city centres, including
High Wycombe, Wolverhampton and Bolton, The Telegraph discloses.
It comes weeks after the UK chain was put into administration by
its owner Aurelius, which had acquired the retailer just three
months earlier, The Telegraph recounts.
It has struggled in recent years amid growing competition from
rivals including Lush and Rituals, The Telegraph relays.
FRP's announcement for the planned job losses follows reports in
The Telegraph earlier this month that revealed the taxpayer is
poised to foot The Body Shop's multimillion-pound redundancy bill.
Aurelius, which emerged as The Body Shop's top creditor before its
insolvency, was found not to be responsible for redundancy
payments, according to The Telegraph.
The closure of stores is expected to deal a blow to landlords
across the country, which include Network Rail, Landsec and Nuveen
Real Estate, one of the largest investment managers in the world,
The Telegraph discloses.
Alan Spencer, head of UK retail at Savills, said in February that
landlords were going to "have to take some pain in this process".
CLEMENTS MAY: Goes Into Administration
--------------------------------------
Business Sale reports that Clement May Limited, a London-based IT
recruitment consultancy, fell into administration earlier this
month, with Philip Stephenson and Oliver Haunch of Grant Thornton
appointed as joint administrators.
According to Business Sale, in the company's most recent accounts,
for the year ending December 31, 2022, it stated that it had
continued to be impacted by the COVID-19 pandemic during 2022, but
had also experienced a post-pandemic bounce in demand for permanent
hires.
Despite this, the ongoing impact of COVID lead to the company's
turnover falling to GBP13.2 million, from GBP17.6 million a year
earlier, while post-tax profits fell from close to GBP152,000 to
just under GBP108,000, Business Sale discloses. At the time, the
company's total equity stood at GBP1.36 million, Business Sale
notes.
DURHAM MORTGAGES A: S&P Assigns CCC(sf) Rating on X-Dfrd Notes
--------------------------------------------------------------
S&P Global Ratings assigned credit ratings to Durham Mortgages A
PLC's class A, B-Dfrd, C-Dfrd, D-Dfrd, E-Dfrd, F-Dfrd, and X-Dfrd
notes. Durham Mortgages A also issued unrated class Z and R notes,
and unrated X and Y certificates.
The transaction is a second refinancing of the Durham Mortgages A
PLC transaction, which closed in May 2018 (the original
transaction) and was refinanced in February 2021.
S&P said, "We have based our credit analysis on the pool, which
totals GBP1.25 billion. The pool comprises first-lien U.K.
residential mortgage loans that Bradford & Bingley PLC and Mortgage
Express PLC originated. The loans are secured on properties in
England, Wales, Scotland, and Northern Ireland and were originated
between 1994 and 2009. Topaz Finance Ltd. services the underlying
loans in the securitized portfolio. Topaz Finance is a subsidiary
of Computershare Mortgage Services Ltd. We reviewed Topaz Finance's
servicing and default management processes and are satisfied that
it is capable of performing its functions in the transaction."
Over 99% of the loans in the portfolio are more than 10 years
seasoned.
S&P considers the collateral to be nonconforming based on the
prevalence of loans to self-certified borrowers and borrowers with
adverse credit history, such as prior county court judgments, an
individual voluntary arrangement, or a bankruptcy order.
Of the pool, 12.9% of the mortgage loans by current balance are
currently in arrears greater than (or equal to) one month. There is
high exposure to interest-only loans in the pool at 87.9%.
S&P's rating on the class A notes addresses the timely payment of
interest and the ultimate payment of principal. Its ratings on the
class B-Dfrd to F-Dfrd notes and X-Dfrd notes reflect the ultimate
payment of interest and principal. Its ratings definitions are in
line with the notes' terms and conditions.
The timely payment of interest on the class A notes is supported by
the principal borrowing mechanism, the general reserve, and the
liquidity reserve.
The reserve fund comprises a general reserve fund and liquidity
reserve fund (LRF). The LRF covers the senior fees, class A
interest, and X -certificate payments. The LRF is initially funded
at 1% of the class A notes' closing balance and amortizes in line
with the class A notes. The general reserve fund is non-amortizing
and is funded initially at 1.25% of the closing portfolio balance.
When the class B-Dfrd to F-Dfrd notes become the most senior class,
S&P's ratings address the ultimate repayment of principal and
timely payment of interest. For the most senior class of notes, a
deferral of interest would constitute an event of default under the
terms and conditions of the notes.
There is no swap counterparty to hedge the mismatch between the
interest rate paid under the mortgage loans and the interest rate
paid under the notes.
There are no rating constraints in the transaction under S&P's
counterparty, operational risk, or structured finance sovereign
risk criteria. It considers the issuer to be bankruptcy remote.
S&P said, "Our credit and cash flow analysis and related
assumptions consider the transaction's ability to withstand the
potential repercussions of the cost of living crisis, namely higher
defaults and longer recovery timing. As the situation evolves, we
will update our assumptions and estimates accordingly."
Ratings
CLASS RATING CLASS SIZE (%)
A AAA (sf) 83.70
B-Dfrd AA (sf) 4.35
C-Dfrd A+ (sf) 3.70
D-Dfrd BBB+ (sf) 3.10
E-Dfrd BB (sf) 2.10
F-Dfrd B (sf) 0.90
Z NR 2.15
R§ NR 2.09
X-Dfrd§ CCC (sf) 0.70
X cert† NR N/A
Y cert NR N/A
*S&P's rating on the class A notes addresses the timely payment of
interest and the ultimate payment of principal. S&P's ratings on
the class B-Dfrd to F-Dfrd notes and X-Dfrd notes reflect the
ultimate payment of interest and principal.
§ The class R and X-Dfrd notes are not collateralized by the pool
assets.
†The X certificates pay a fixed rate on the loans' outstanding
balance.
N/A--Not applicable.
NR--Not rated.
SONIA--Sterling Overnight Index Average.
FARFETCH LIMITED: Moody's Downgrades CFR to C, Outlook Negative
---------------------------------------------------------------
Moody's Investors Service has downgraded to C from Caa2 the long
term Corporate Family Rating of Farfetch Limited (Farfetch or the
company). Moody's also downgraded the company's probability of
default rating to C-PD from Caa2-PD and downgraded to Caa2 from B3
the rating of the $600 million senior secured first lien term loan
borrowed by the company's former indirect subsidiary, Farfetch US
Holdings, Inc (Farfetch US). The outlook is negative for both
issuers, and previously all ratings were on review for downgrade.
The rating action concludes the review for downgrade which was
initiated on December 12, 2023.
RATINGS RATIONALE
The rating action follows the widely reported liquidity issues of
the business in the final weeks of 2023 which has ultimately
resulted in a change of ownership of Farfetch's subsidiaries and
the expectation that the company will default on its payment
obligations in respect of its convertible notes. Governance
considerations were a key driver of the rating action.
The new owner of the underlying Farfetch business is Surpique LP
(Surpique), a company owned by Coupang Inc and funds managed and/or
advised by Greenoaks Capital Partners LLC. In December 2023, with
the support of existing lenders, Surpique committed to provide
Farfetch's direct subsidiary Farfetch Holdings plc (FFH plc) and
certain of FFH plc's subsidiaries, including Farfetch US, with
access to a $500 million first lien senior secured delayed draw
bridging facility.
At the end of January 2024 outstanding drawings under the bridge
were converted to equity in connection with Surpique consummating
the purchase of FFH plc's business and assets through an
English-law pre-pack administration process. Moody's understands
that at that time Surpique had invested a total of $300 million
into the Farfetch business and committed a further $200 million to
the extent required for working capital and general corporate needs
over the course of 2024.
As a result of the sale of the undelying Fartech business to
Surpique, Farfetch Limited has no assets and has told holders of
its ordinary shares and convertible loan notes that they are not
likely to recover any of their outstanding investments in the
company's expected liquidation. The CFR of C and the negative
outlook factors in this information and reflects Moody's view that
a default in respect of the convertible notes is highly likely.
The Caa2 rating of the senior secured first lien term loan borrowed
by Farfetch US factors in (a) Moody's understanding that Surpique
LP's subsidiary Surpique Acquisition Limited has replaced FFH plc
as a guarantor under the credit agreement; and (b) the rating
agency's view that Surpique's ultimate owners consider the Farfetch
business to be an important strategic asset and that they see scope
for it to grow revenues and profitability in the years ahead.
However, less positively the Caa2 instrument rating reflects the
current lack of transparency about both the extent of the trading
challenges that led to Farfetch cancelling its Q3 2023 earnings
call last November, and the company's strategy and prospects under
new ownership and management. As such, Moody's considers credit
risks remain elevated and the sustainability of the company's new
capital structure to be uncertain.
ESG CONSIDERATIONS
Moody's has revised the governance issuer profile score to G-5 from
G-4 and the credit impact score to CIS-5 from CIS-4. The G-5 score
reflects risk factors related to financial strategy and risk
management. The CIS-5 indicates that the rating is lower than it
would have been if ESG risk exposures did not exist and that the
negative impact is more pronounced than for issuers scored CIS-4.
OUTLOOK
The negative outlook reflects the heightened risk of default.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Under new ownership the rating of the term loan could be upgraded
if Moody's considers the potential for a substantial improvement in
the operating performance of the business relative to the historic
level and that its liquidity is good.
Conversely, a downgrade of the rating of the term loan could be
triggered by sustained weakness in operating performance or in the
liquidity of the business.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
CORPORATE PROFILE
The London headquartered Farfetch group is a global platform for
the luxury fashion industry, operating the Farfetch Marketplace
which connects consumers around the world with over 1,400 brands,
boutiques and department stores. The group's additional businesses
include Browns and Stadium Goods, which offer luxury products to
consumers, New Guards Group, a platform for the development of
global fashion brands, and Farfetch Platform Solutions, which
services enterprise clients with e-commerce and technology
capabilities. In the 12 months to June 2023 it generated revenues
of $2.35 billion.
FOX INDUSTRIAL: Joint Administrators Set to Wind Down Business
--------------------------------------------------------------
Business Sale reports that Fox Industrial Services Limited, a
construction firm based in the West Midlands, is set to be wound
down after falling into administration.
The Redditch-based business had been operating for more than 20
years, but succumbed to financial challenges that it had faced in
recent times, Business Sale notes.
The company had been impacted by COVID-19-related delays that
affected key contracts, with the firm's problems exacerbated
further by subsequent inflationary pressures, Business Sale
relates.
FRP Advisory's Ben Jones and Rajnesh Mittal were ultimately
appointed as administrators on Feb. 20, Business Sale discloses.
According to Business Sale, prior to their appointment, the
company's workforce departed the business and the joint
administrators will now begin work undertaking an "orderly wind
down of the business and maximise the return to its creditors".
In the company's accounts for the year ending March 31, 2023, its
total assets were valued at approximately GBP1.5 million, Business
Sale states. However, in excess of GBP1.6 million was owed to
creditors at the time, with net liabilities amounting to slightly
over GBP228,000, Business Sale relays.
Fox Industrial Services was part of the wider Fox Construction
Group, which will continue trading as normal following the
administration.
MAGGIE AND ROSE: Enters Administration, Owed GBP1.58 Million
------------------------------------------------------------
Business Sale reports that Maggie and Rose Limited, a London-based
company operating two clubhouses and indoor play areas for
families, fell into administration after being issued with a
winding-up petition earlier this month.
Oliver Haunch and Kevin Coates of Grant Thornton were appointed as
joint administrators, Business Sale relates.
According to the firm's accounts for the year to August 31, 2021,
its fixed assets were valued at GBP3.07 million and current assets
at just shy of GBP1.5 million, Business Sale discloses. However,
at the time, the company's total liabilities amounted to GBP1.58
million, Business Sale notes.
RECYCLING LIVES: Has Deficiency of GBP121 Million, Report Shows
---------------------------------------------------------------
Joshua Doherty at letsrecycle.com reports that the administrators
appointed at Recycling Lives Ltd last month have recorded a
"deficiency" of GBP121 million at the company.
This is the difference between what is owed, largely to unsecured
creditors, and the money available after the sale of assets and
paying secured creditors.
According to letsrecycle.com, it appears secured creditors, owed
GBP52 million, will get some money back from the sale of assets
though this now looks extremely unlikely for the remaining owed
parties. The assets of Recycling Lives were sold to Global Ardour
Recycling soon after going into administration, letsrecycle.com
notes.
Assets listed in the report as "estimated to realise" include
"investments" which will contribute GBP21.7 million to debts,
GBP10.9 million for freehold property and GBP1.6 million for plant
and machinery, letsrecycle.com discloses.
The report lists a potential GBP802,000 available after the sale of
assets and payment to secured creditors, letsrecycle.com states.
Preferential creditors are owed GBP2.8 million while unsecured
creditors are owed GBP102.3 million, letsrecycle.com relays. With
a floating charge of GBP19 million applied, the company has a
"deficiency" of GBP121.3 million, according to letsrecycle.com.
Assets
While estimates provided by Recycling Lives suggested that GBP18
million would be available from the sale of assets and paying
secured creditors, the "estimated to realise" value of these assets
was only GBP802,000, letsrecycle.com relates.
The main difference here was the difference in the "book value" of
"investments".
Recycling Lives has estimated this at GBP46.5 million, but the
"estimated to realise" value was GBP21.7 million, letsrecycle.com
notes.
The book value for plant and machinery was also GBP15 million, but
the "estimated to realise" value was only GBP1.6 million,
letsrecycle.com discloses.
Debts
The report also includes a list of unsecured creditors owed money
by Recycling Lives.
This includes GBP2.4 million owed to Aon UK, GBP213,000 owed to
Urbaser and dozens of others including relatively small amounts
owed to councils and other waste companies, letsrecycle.com
states.
The majority of the owed money however is to other companies
formerly in the Recycling Lives group, with TH FRAG bidco owed
GBP26 million and Recycling Lives Centre owed GBP10 million,
according to letsrecycle.com.
Administration
As first revealed by letsrecycle.com, Recycling Lives announced
last month that it was placing parts of the business into
administration.
The sale, following a strategic review in 2023, is thought to have
been brought on due to macro-economic factors as well as a fire at
the company's Preston site in March 2023, letsrecycle.com notes.
RUBIX GROUP 3: Moody's Assigns 'B3' CFR, Outlook Stable
-------------------------------------------------------
Moody's Investors Service has withdrawn the B3 corporate family
rating and B3-PD probability of default rating of Rubix Limited and
assigned a B3 CFR and B3-PD PDR with a stable outlook to Rubix
Group Midco 3 Limited (Rubix). Concurrently, the rating agency has
affirmed all the B3 ratings on Rubix Group Finco Limited's (Finco)
senior secured first lien term loan B1 and its senior secured first
lien revolving credit facility (RCF) both due 2026. The outlook for
Finco remains stable and concurrently, the outlook for Rubix
Limited has been withdrawn from stable.
The rating actions reflect:
-- The repayment of Rubix Limited's EUR340 million preferred
shares and the fact that Rubix Group Midco 3 Limited is the top
entity in the restricted group
-- Good execution and track record of improved credit ratios since
the LBO, including deleveraging and positive free cash flow
-- Difficult macroeconomic environment, with subdued European
industrial production expected in 2024
-- The recent placement of a sizeable EUR310 million PIK facility
(due 2029) outside the restricted group that creates structural
complexity
RATINGS RATIONALE
Rubix's B3 CFR continues to reflect the company's: (1) position as
a market leader in the fragmented European industrial parts
distribution market, with a broad range of products and services,
(2) diverse end-markets and focus on the more resilient
maintenance, repair and overhaul segment as well as non-cyclical
sectors, (3) improved margins and cash generation, thanks to
ongoing saving initiatives to reduce fixed costs and working
capital and (4) adequate liquidity, although with a degree of
seasonality and reliance on short term facilities.
On the flipside, the CFR also reflects: (1) the exposure to mature
markets in Western Europe with modest long term organic growth
prospects, (2) exposure to some cyclical sectors including
automotive and construction and degree of correlation to industrial
activity, (3) the high leverage resulting from debt-funded
acquisitions and off-balance sheet factoring, and (4) the presence
of a large PIK facility outside the restricted group (not included
in Moody's-adjusted credit ratios), creating structural complexity,
as well as potential cash leakage and refinancing risk.
Rubix's execution has been good since the LBO, characterised by
organic growth every year except 2020 (because of the pandemic),
deleveraging, and positive free cash flow (FCF) in the past two
years. Moody's believes that the company has benefitted from net
positive effects from supply chain pressures and inflation. Revenue
growth softened to around 3% in 2023 but was boosted by price
increases and represented a good performance in the context of
declining industrial production in the past two years in Rubix's
main markets. Moody's expects very modest organic revenue growth of
1% in 2024 as inflation decelerates, followed by a volume-driven
rebound in growth to 3% to 4% from 2025.
Moody's estimates that the company's gross debt/EBITDA on a
Moody's-adjusted basis was around 6.3x at the end of 2023 from
around 7.4x a year earlier. However, these amounts exclude around
EUR375 million non-recourse factoring drawings. Rubix has a
material deleveraging opportunity through cost savings in the next
12 to 18 months. As a result, the rating agency forecasts that
Rubix will increase its Moody's-adjusted EBITDA to above EUR330
million (from around EUR290 million in 2023) and reduce leverage to
around 5.5x in 2024. The key short-term lever is a reduction in
fixed costs, including EUR25 million of employee-related expenses.
In addition, the company has launched several initiatives to
increase its gross margin, through pricing, procurement and mix
improvements.
Moody's expects higher profit to translate into an increase in FCF
generation to around EUR50 million in 2024 and higher in 2025. The
company's cash generation also stands to benefit from capex savings
and any decrease in EURIBOR rates given its interest is fully
unhedged. Rubix has scaled back acquisition activity in 2023 but
added EUR35 million to its term loan B in September 2023. Should it
resume M&A, Moody's expects that Rubix will be able to fund a
larger portion through cash and cash generation than it has done
historically but the company has a track record of debt additions.
LIQUIDITY
The company's liquidity is adequate, totaling EUR313 million at
December 31, 2023 and comprising cash of EUR172 million, EUR140
million of undrawn RCF and EUR6 million undrawn facilities.
Liquidity is required to support Rubix's relatively large seasonal
working capital swings as well as for acquisitions and further
synergy and cost-saving projects. The RCF, maturing in March 2026,
is subject to a net senior leverage test under which Moody's expect
substantial headroom. The company also partly relies on short-term
local facilities, of which EUR98m was drawn in December 2023.
Whilst there is a track record of facility renewals, liquidity
could reduce in the event of significant underperformance.
STRUCTURAL CONSIDERATIONS
The B3 ratings on the EUR1,470 million senior secured first lien
term loan maturing in September 2026 and EUR140 million pari passu
ranking RCF are in line with the CFR. The ratings reflect the fact
that these first lien facilities are the main financial instruments
in Rubix's restricted group.
In addition, Moody's qualitatively takes into consideration a
EUR310 million PIK facility above the restricted group. It is
credit negative given its large size (around 1x Moody's-adjusted
EBITDA) and insofar as it creates structural complexity, as well as
potential cash leakage and refinancing risk.
RATING OUTLOOK
The stable outlook reflects expectations that the company will
reduce Moody's-adjusted leverage below 5.5x over the next 12 months
with improving gross and EBITDA margins while maintaining at least
stable revenue on an organic basis. It also reflects Moody's
assumption that the company will generate adjusted free cash
flow/debt at least in the mid to high single digit percentages. In
addition, the outlook assumes that (1) the company will maintain
adequate liquidity, and (2) no debt-financed acquisitions or
distributions that result in a material increase in leverage will
occur.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if:
-- Moody's-adjusted debt/EBITDA reduces sustainably well below
5.0x, before the inclusion of non-recourse factoring
-- Moody's-adjusted EBITA/interest above 2.5x on a sustained
basis
-- Moody's-adjusted free cash flow/debt well in excess of 5%
-- A more conservative financial policy, which limits the extent
of re-leveraging from debt-financed acquisitions as well as no cash
leakage from the restricted group
-- Positive organic revenue growth and improved margins on a
sustained basis
-- Adequate liquidity
The ratings could be downgraded if:
-- Moody's-adjusted debt/EBITDA increases above 6.5x, before the
inclusion of non-recourse factoring; or
-- Free cash flow turns negative on a sustained basis; or
-- Moody's adjusted EBITA/Interest sustainably reduces to below
1.5x; or
-- A sustained deterioration in operating performance, resulting
in a decline in organic revenue or margins; or
-- Liquidity concerns arise
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in February 2023.
COMPANY PROFILE
Rubix, headquartered in London, is a leading European distributor
of industrial maintenance, repair and overhaul MRO products and
related services. The company is owned by funds advised by Advent
International. In 2023, Rubix generated net sales of around EUR3.2
billion and company-adjusted EBITDA of around EUR320 million.
SCAFFTEQ WEST: Falls Into Administration
----------------------------------------
Business Sale reports that Scaffteq West Limited, the Bristol-based
subsidiary of Saferise Scaffolding Group and sister company of BCM
Scaffolding Services, also fell into administration on Feb. 16,
with FRP Advisory's David Hudson and Matthew Whitchurch appointed
as joint administrators.
As with BCM Scaffolding Services, Scaffteq's collapse was
attributed to the withdrawal of the company's finance provider,
Business Sale notes.
In its accounts for the year to September 30, 2022, its fixed
assets were valued at close to GBP4 million and current assets at
around GBP2.7 million, with net assets amounting to slightly over
GBP2 million, Business Sale discloses.
===============
X X X X X X X X
===============
[*] BOOK REVIEW: The First Junk Bond
------------------------------------
Author: Harlan D. Platt
Publisher: Beard Books
Softcover: 236 pages
List Price: $34.95
http://www.beardbooks.com/beardbooks/the_first_junk_bond.html
Only one in ten failed businesses is equal to the task of
reorganizing itself and satisfying its prior debts in some
fashion.
This engrossing book follows the extraordinary journey of Texas
International, Inc. (known by its New York Stock Exchange stock
symbol, TEI), through its corporate growth and decline, debt
exchange offers, and corporate renaissance as Phoenix Resource
Companies, Inc. As Harlan Platt puts it, TEI "flourished for a
brief luminous moment but then crashed to earth and was consumed."
TEI's story features attention-grabbing characters, petroleum
exploration innovations, financial innovations, and lots of risk
taking.
The First Junk Bond was originally published in 1994 and received
solidly favorable reviews. The then-managing director of High Yield
Securities Research and Economics for Merrill Lynch said that the
book "is a richly detailed case study. Platt integrates corporate
history, industry fundamentals, financial analysis and bankruptcy
law on a scale that has rarely, if ever, been attempted." A retired
U.S. Bankruptcy Court judge noted, "[i]t should appeal as
supplementary reading to students in both business schools and law
schools. Even those who practice.in the areas of business law,
accounting and investments can obtain a greater understanding and
perspective of their professional expertise."
"TEI's saga is noteworthy because of the company's resilience and
ingenuity in coping with the changing environment of the 1980s, its
execution of innovative corporate strategies that were widely
imitated and its extraordinary trading history," says the author.
TEI issued the first junk bond. In 1986 it achieved the largest
percentage gain on the NYSE, and in 1987 suffered the largest
percentage loss. It issued one of the first bonds secured by a
physical commodity and then later issued one of the first PIK
(payment in kind) bonds. It was one of the first vulture investors,
to be targeted by vulture investors later on. Its president was
involved in an insider trading scandal. It innovated strip
financing. It engaged in several workouts to sell off operations
and raise cash to reduce debt. It completed three exchange offers
that converted debt in to equity.
In 1977, TEI, primarily an oil production outfit, had had a
reprieve from bankruptcy through Michael Milken's first ever junk
bond. The fresh capital had allowed TEI to acquire a controlling
interest of Phoenix Resources Company, a part of King Resources
Company. TEI purchased creditors' claims against King that were
subsequently converted into stock under the terms of King's
reorganization plan. Only two years later, cash deficiencies forced
Phoenix to sell off its non-energy businesses. Vulture investors
tried to buy up outstanding TEI stock. TEI sold off its own
non-energy businesses, and focused on oil and gas exploration. An
enormous oil discovery in Egypt made the future look grand. The
value of TEI stock soared. Somehow, however, less than two years
later, TEI was in bankruptcy. What a ride!
All told, the book has 63 tables and 32 figures on all aspects of
TEI's rise, fall, and renaissance. Businesspeople will find
especially absorbing the details of how the company's bankruptcy
filing affected various stakeholders, the bankruptcy negotiation
process, and the alternative post-bankruptcy financial structures
that were considered. Those interested in the oil and gas industry
will find the book a primer on the subject, with an appendix
devoted to exploration and drilling, and another on oil and gas
accounting.
Dr. Harlan D. Platt is a professor of Finance at D'Amore-McKim
School of Business at Northeastern University. He is a member of
the Board of Directors of Millennium Chemicals Inc. and is on the
advisory board of the Millennium Liquidating Trust. He served as
the Associate Editor-Finance for the Journal of Business Research.
He received a Ph.D. from the University of Michigan, and holds a
B.A. degree from Northwestern University.
This book may be ordered by calling 888-563-4573 or by visiting
www.beardbooks.com or through your favorite Internet or local
bookseller.
*********
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 2024. All rights reserved. ISSN 1529-2754.
This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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