/raid1/www/Hosts/bankrupt/TCREUR_Public/240401.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
Monday, April 1, 2024, Vol. 25, No. 66
Headlines
D E N M A R K
SGL GROUP: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
F I N L A N D
REN10 HOLDING: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
F R A N C E
ALTICE FRANCE: Moody's Cuts CFR to Caa2 & Sr. Unsecured Debt to Ca
EUROSCIENCE: Goes Bankrupt Due to Lack of Funding
G E R M A N Y
WIRECARD AG: EY Won't Appeal Penalties Over Audits
I C E L A N D
ARION BANK: Moody's Gives Ba2(hyb) Rating to AT1 Convertible Notes
I R E L A N D
ARES EUROPEAN VII: S&P Affirms 'B- (sf)' Rating on Class E-R Notes
FRESHLY CHOPPED: Wants Court to Appoint Examiner
MADISON PARK XX: Fitch Assigns 'B-(EXP)sf' Rating to Cl. F-R Notes
ROUNDSTONE SECURITIES NO. 2: S&P Assigns BB (sf) Rating to F Notes
SOUND POINT 10: S&P Assigns B- (sf) Rating to Class F Notes
I T A L Y
BANCA SELLA: DBRS Gives BB Subordinated Debt Rating, Trend Stable
MONTE DEI PASCHI: Italy Sells 12.5% Stake for About EUR650 Mil.
RED SEA SPV: Moody's Cuts EUR1656.504MM Cl. A Notes Rating to Ba2
N E T H E R L A N D S
BOELS TOPHOLDING: Fitch Affirms BB- LongTerm IDR, Outlook Positive
BOELS TOPHOLDING: Moody's Affirms 'Ba3' CFR, Alters Outlook to Neg
INTERCEMENT FINANCIAL: Fitch Affirms 'C' LT Sr. Unsec Notes Rating
S P A I N
BOLUDA TOWAGE: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
IM BCC 3: DBRS Hikes Series B Notes Rating to BB(low)
LORCA TELECOM: S&P Ups Rating to 'BB' on Close of Joint Venture
S W E D E N
IGT HOLDING III: Moody's Affirms 'B2' CFR, Alters Outlook to Neg.
INTRUM AB: Fitch Lowers LongTerm IDR to B & Puts on Watch Negative
SAMHALLSBYGGNADSBOLAGET: Fitch Cuts Sr. Unsec. Debt Rating to CCC+
SAMHALLSBYGGNADSBOLAGET: S&P Lowers ICR to 'SD' on Tender Offer
S W I T Z E R L A N D
AVOLTA AG: Moody's Upgrades CFR to Ba2 & Alters Outlook to Stable
T U R K E Y
ANADOLU ANONIM: Fitch Hikes IFS Rating to 'BB-', Outlook Positive
TURK P&I: Fitch Hikes IFS Rating to 'B+', Outlook Positive
U N I T E D K I N G D O M
BCP V MODULAR: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
BEATTIE PASSIVE: Set to Go Into Administration Due to Cash Woes
BIDSTACK: Investors Mull Legal Action Following Acquisition
ENDO INT'L: New York Bankruptcy Court Confirms Chapter 11 Plan
NEWDAY FUNDING 2024-1: DBRS Gives Prov. BB Rating to Class E Notes
SIG PLC: Moody's Affirms 'B1' CFR & Alters Outlook to Negative
STRATTON MORTGAGE 2020-1: S&P Cuts E-Dfrd Notes Rating to 'BB(sf)'
TOGETHER ASSET 2021-CRE1: DBRS Hikes Class E Notes Rating to BB
WHITE ARCHES: Bought Out of Administration by Spinney Motorhomes
X X X X X X X X
[*] BOND PRICING: For the Week March 25 to March 29, 2024
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D E N M A R K
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SGL GROUP: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
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Fitch Ratings has affirmed SGL Group ApS's Long-Term Issuer Default
Rating (IDR) at 'B' with a Stable Outlook and its senior secured
rating at 'B+'/RR3.
The affirmation reflects the company's unchanged strategy, with
debt-fueled inorganic growth leading to gradually increasing
geographical diversification and EBITDA, the resilient performance
expected in 2023 and expected positive free cash flow (FCF)
generation. However, this strategy weighs on the company's EBITDA
leverage, which Fitch expects to hover around 4.6-4.7x in
2023-2026, which is comfortable for the rating, but still high
funding costs should penalise its coverage ratio, resulting in the
Stable Outlook.
KEY RATING DRIVERS
Unchanged Strategy: The debt-fueled inorganic growth is aligned
with its expectations and does not represent a deviation from SGL's
strategy, in its view. The company has a solid record of acquiring
and successfully integrating smaller companies and Fitch expects
this to continue. On top of the acquisitions of close to USD200
million expected for 2024, Fitch assumes further M&A of around
USD100 million per year from 2025, using conservative valuation
multiples.
Resilient Performance in 2023: Fitch expects EBITDA of around
USD185 million in 2023, with a limited year-on-year reduction from
a very strong 2022. Even if cash interests absorb almost half the
company's EBITDA, the limited working capital needs and asset-light
nature of the business should result in positive FCF, better than
its expectations, which conservatively included a sizeable
absorption from working capital.
Slower Deleveraging: Fitch expects EBITDA leverage to remain
broadly flat in 2023-2026 at 4.6-4.7x, slightly higher than its
previous forecasts, as Fitch expects both EBITDA and debt to
increase gradually as a result of external growth. Fitch
conservatively assumes a reduction of like-for-like EBITDA
(excluding acquisitions), due to easing of transportation and
logistical constraints and general macroeconomic uncertainty. This
normalisation will be despite the short-term positive rate
developments related to route disruptions introduced by the attacks
on the Red Sea.
Red Sea Route Disruptions: Fitch does not expect the recent ocean
freight rates spike to be sustainable over the medium term. Despite
the significant disruption introduced by the attacks in the Red
Sea, Fitch believes there is more than sufficient capacity in the
industry to accommodate longer routes, as signaled by some of the
large carriers. Consequently, Fitch is not factoring in a higher
rates scenario in its forecasts, although Fitch acknowledges there
is some upside potential in the short-term due to rate volatility.
Still High Funding Costs: Fitch does not expect the decrease in
interest rates to materially change SGL's funding costs, which
remain a rating constraint. Interest expenses take up a significant
portion of operational cash flow and constrain the company's growth
strategy and cash generation. Fitch forecasts EBITDA interest
coverage to remain around 2.0x, below its negative rating
sensitivity of 2.3x.
Niche Operator: SGL is a small but fast-growing company in the
freight-forwarding market. It operates in all main modes of
transport. It focuses on forwarding complex transportation projects
and non-standardised goods in sectors including aid & relief, food
ingredients and additives, fashion and retail, specialty
automotive, and more recently, sovereign defence, with a focus on
quality of service rather than price. Its strategy reduces direct
competition with larger peers, but SGL remains exposed to the
highly competitive nature of the freight-forwarding sector.
Portfolio Diversification: Together with diversified logistics
solutions (by mode of transport and geography), SGL serves more
than 25,000 customers, with the 10 largest having an average tenure
of around nine years and no client accounting for more than 3% of
gross profit. In addition, SGL provides forwarding services to
non-governmental organisations through its ADP division, which
tends to be less cyclical than commercial segments.
Asset-light Balance Sheet: SGL's business model is asset-light and
capex needs are limited, which protect cash flows in case of large
declines in sales volumes. Its cost structure is rather flexible
with a high share of variable costs (mainly purchases of freight
capacity, which is effectively passed through to customers). Fitch
views freight forwarding as less volatile than shipping with some
margin resilience against economic downturns.
DERIVATION SUMMARY
Fitch sees SGL's credit metrics as in line with 'B' rated peers.
The credit profile is primarily supported by the diversification of
the group's customer portfolios and the good positioning in its
niche segments. Its earnings are less volatile than those of sole
carriers, such as shipping companies, but the group's small size
and the highly competitive nature of the business constrains its
debt capacity, in ts view.
Fitch sees InPost S.A. (BB/Stable) as a broad industry peer and a
niche leader, with good revenue visibility and limited competition
translating into high operating margins. It also has a more
conservative financial structure, which largely explains the
several notch difference.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
- Gross profit increasing towards USD925 million by 2027, mostly
through acquisitions but supported by modest organic growth
- EBITDA gradually rising to almost USD250 million by 2027
- Acquisitions of around USD200 million in 2024, funded through new
debt
- Effective interest rate hovering around 9% over the forecast
horizon
- Modestly negative working capital as the impact from falling
rates is offset by increased volumes
- Capex averaging around USD24 million per year to 2027
- Yearly acquisitions of around USD100 million from 2025 at
enterprise value (EV)/EBITDA multiples around 5-6x
- No dividend distributions or equity injections
RECOVERY ANALYSIS
Fitch's going concern (GC) EBITDA of USD139 million assumes a sharp
downturn in the transportation industry. Fitch then applies a
conservative 25% cut, reflecting the issuer's exposure to the
economic cycle and consequent trading underperformance. This
haircut is proportionately smaller than previously due to a more
normalised freight rate scenario.
Fitch applies a distressed EV/EBITDA multiple of 5x to calculate a
GC EV, which is in line with the median for 'B' companies in the
sector. This results in a GC EV of USD624 million, after deducting
administrative claims.
Considering the presence of super-senior debt including the DKK750
million super senior RCF and USD75 million ABL facility totaling
USD186 million, the waterfall analysis output percentage on current
metrics and assumptions was 53%, which is commensurate with 'RR3',
providing a one-notch uplift to the senior secured FRN rating from
the IDR.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Successful implementation of growth strategy, resulting in EBITDA
leverage consistently below 4.5x
- EBITDA interest coverage consistently above 2.8x
- Consistently positive FCF generation
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- EBITDA leverage consistently above 5.5x
- EBITDA interest coverage consistently below 2.3x
- Negative FCF through the economic cycle
LIQUIDITY AND DEBT STRUCTURE
Comfortable Liquidity: Fitch forecasts liquidity reached around
USD170 million end-2023, further supported by the DKK750 million
revolving credit facility and USD75 million asset backed loan, both
committed until 2027 and currently undrawn. The company has no
financing needs in the medium term, despite negative FCF after
acquisitions under Fitch's rating case. SGL is exposed to
refinancing risk only in 2028 when the floating-rate notes mature.
ISSUER PROFILE
SGL is an asset-light freight forwarder and logistics provider with
a global footprint, particularly active in the Nordics, North
America and APAC.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
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SGL Group ApS LT IDR B Affirmed B
senior secured LT B+ Affirmed RR3 B+
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F I N L A N D
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REN10 HOLDING: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed Ren10 Holding AB's (Renta) Long-Term
Issuer Default (IDR) Rating at 'B+' with a Stable Outlook. Fitch
also affirmed Renta's senior secured debt rating at 'B+' with a
Recovery Rating of 'RR4'.
KEY RATING DRIVERS
Growing Franchise: The Long-Term IDR reflects Renta's small but
growing equipment-rental franchise and solid EBITDA margins. The
rating also considers Renta's high leverage, reliance on
wholesale-market funding, weakening net profitability and its
exposure to the cyclical construction sector.
Limited Economies of Scale: Renta has grown both organically and
via acquisitions since 2016 to reach market shares of 13% in
Finland, 11% in Norway and 8% in Sweden, with a smaller presence in
other markets. However, its size remains modest and it benefits
from only limited economies of scale compared with higher-rated
peers, which constrains its rating.
Construction Decline Pressures Demand: About three-quarters of
Renta's revenue is drawn from infrastructure, renovation and new
construction end-markets, to which the company provides a wide
range of equipment on rental. Fitch believes equipment demand could
shrink in the short term as a result of subdued activity,
particularly in construction.
However, the longer-term trend of customers preferring to lease
rather than buy equipment should support portfolio growth.
Positively, Renta has only moderate exposure to residential
construction markets and has a demonstrated ability of moving
equipment in-between its locations to maximise utilisation.
Modest Client Concentration: Renta's core clientele consists of
often small local companies, reducing revenue concentration. Its
business model is decentralised (other than its centrally
coordinated procurement), with 181 depots across its markets. Renta
usually retains equipment for its useful life, but presently has a
low average fleet age of around four years.
Adequate EBITDA Margins: Renta's EBITDA/revenue was unchanged at
35% in 2023. Revenue was supported by solid utilisation rates and
continued addition of locations, which may yield scale benefits in
the future. Renta expects to achieve significant additional revenue
from companies it acquired in 2023, which together with continued
adaptation to a high inflation environment should support
profitability in the medium term.
Renta Group Oy, Renta's main operating entity, reported an
annualised pre-tax loss to average assets of 2.4% in 2023 (2022:
loss 0.2%) driven by increased financing, depreciation and other
expenses, while revenue has been growing at slower pace. Fitch
believes high interest rates and uncertainty in the Nordic
construction sector, potentially pressuring revenues, could weigh
on profitability in the short term.
Leverage Increased on Portfolio Growth: Renta's gross debt/EBITDA
increased to 5.0x at end-2023 (end-2022: 4.1x), as the company
engaged in new acquisitions and rolled out new locations,
supporting its growth strategy. This has led to a delay of Renta's
communicated deleveraging plan, with its gross debt/EBITDA at
Fitch's stated downgrade sensitivity of 5x. Fitch believes gradual
integration of new and acquired locations will support revenue in
the medium term, bringing leverage back to below 5x.
Stable Funding, Acceptable Liquidity: Renta's term loan B (TLB),
upsized to EUR550 million from EUR200 million, in 1Q24, is its core
funding source, supplemented by a EUR125 million super senior
revolving credit facility (RCF) used for general corporate
purposes. The proceeds from the TLB upsizing, whose maturity was
simultaneously extended to July 2030 from February 2028, were used
to repay Renta's existing senior secured notes and TLB. The
transaction has not immediately led to a debt load increase or an
increase in gross leverage, although the RCF increase moderately
affected the TLB's recovery expectations.
Renta's lease liabilities relate mostly to equipment and facilities
financed with leasing contracts and are thus treated as a form of
debt finance. Fitch regards liquidity as adequate, supported by
predictable operational cash generation coupled with some capex
flexibility. Interest coverage decreased to 3.9x in 2023 (2022:
5.1x) on higher interest expenses and slower revenue growth, but
this is still within Fitch's 'b' category benchmark range.
Prudent Depreciation: Rental assets are susceptible to market-value
movements, which could give rise to valuation impairment.
Profitable asset disposals in 2021-2023 support Renta's
residual-value risk management and equipment-depreciation policy.
However, Renta has only a short record, with modest asset sales in
this period.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A reduction in EBITDA that leads Fitch to expect a meaningful
delay to Renta's anticipated deleveraging; for example, if gross
debt/EBITDA rises above 5x
- A reduction in interest coverage with EBITDA/interest expense
sustained at below 2x
- Insufficient liquidity or access to funding to support the capex
required to maintain an attractive fleet
- Material erosion of earnings, due to fleet-valuation impairments
or losses on the disposal of used equipment
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Material strengthening of franchise, in conjunction with scale
benefits that feed into material profitability
- Gross debt/EBITDA below 3.5x on a sustained basis without
deterioration in other financial metrics and in conjunction with a
materially enlarged franchise
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
Debt Rating Aligned With IDR: The senior secured debt rating is
aligned with Renta's Long-Term IDR, reflecting Fitch's view that
the likelihood of default is materially identical. The debt is
guaranteed by group subsidiaries that account for a substantial
majority of Renta's consolidated assets, net sales and EBITDA. The
'RR4' Recovery Rating reflects average recovery expectations. The
debt under the TLB ranks junior to Renta's super senior revolving
credit facility.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The senior secured debt rating is primarily sensitive to a change
in Renta's Long-Term IDR. Should the company introduce any debt
ranking above rated instruments (or a subordinated tranche below
them), Fitch could notch the debt ratings down (or up) from the
Long-Term IDR, on the basis of weaker (or stronger) recovery
prospects.
ADJUSTMENTS
The 'b+' Standalone Credit Profile (SCP) is in line with the
implied SCP.
The 'bbb' sector risk operating environment score is in line with
the 'bbb' category implied score.
The 'b+' business profile score is below the 'bbb' category implied
score due to the following adjustment reason: business model
(negative).
The 'b+' earnings & profitability score is below the 'a' category
implied score due to the following adjustment reasons: portfolio
risk (negative), revenue diversification (negative).
The 'b' capitalisation & leverage score is above the 'ccc or below'
category implied score due to the following adjustment reason:
historical and future metrics (positive).
The 'b+' funding, liquidity & coverage score is below the 'bb'
category implied score due to the following adjustment reason:
funding flexibility (negative).
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity. Fitch's ESG Relevance Scores are not inputs
in the rating process; they are an observation on the relevance and
materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Ren10 Holding AB LT IDR B+ Affirmed B+
senior secured LT B+ Affirmed RR4 B+
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F R A N C E
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ALTICE FRANCE: Moody's Cuts CFR to Caa2 & Sr. Unsecured Debt to Ca
------------------------------------------------------------------
Moody's Ratings has downgraded to Caa2 from B3 the long-term
corporate family rating, and to Caa2-PD from B3-PD, the probability
of default rating of Altice France Holding S.A. ("Altice France
Holding"), the parent company of French telecom operator Altice
France S.A. ("Altice France"). Concurrently, Moody's has downgraded
to Ca from Caa2 the rating on the senior unsecured instruments
issued by Altice France Holding, and to Caa1 from B2 the ratings on
the backed senior secured and senior secured bank credit facilities
instruments issued by Altice France S.A. (Altice France). The
outlook on both entities remains negative.
The rating action follows the company's announcement of its FY2023
results, when the company guided to a deterioration in operating
performance in 2024, with total revenue declining year-on-year,
while EBITDA will decline in the mid to high single digit due to
the slowdown of construction activity, additional FTTH line rental
cost and no mechanical ability to push inflationary cost impacts to
consumers. The company also said that it targets a decline in
reported net leverage below 4.0x (6.2x at December 2023) which will
require creditor participation in discounted transactions, and
which could include exchange offers or tenders or repurchases.
"The downgrade to Caa2 reflects Moody's expectation that the
company's operating performance and credit metrics will be weaker
than Moody's initially expected, with leverage increasing towards
7.4x in 2024," says Ernesto Bisagno, a Moody's Vice President --
Senior Credit Officer -- and lead analyst for Altice France
Holding.
"As a result, the company's probability of default has materially
increased, given that its capital structure is unsustainable at
current interest rates," adds Mr. Bisagno.
The downgrade reflects the corporate governance considerations
associated with the company's high appetite for leverage that has
led to an unsustainable capital structure, as per Moody's General
Principles for Assessing Environmental, Social and Governance Risk
Methodology for assessing ESG risks.
RATINGS RATIONALE
The rating downgrade reflects the fact that Altice France Holding's
credit metrics will deteriorate further in 2024, following the
expected decline in EBITDA. Based on the company's guidance, Altice
France Holding's Moody's adjusted debt to EBITDA ratio will
increase towards 7.4x in 2024 from 6.8x in 2023.
Given that the competitive market conditions in France continue to
impact earnings, and that cash flow generation remains very weak,
there is little visibility as to any deleveraging trajectory,
particularly when considering that debt maturities will have to be
refinanced at higher rates.
As a result, the company's probability of default has materially
increased, as indicated by the downgrade of the probability of
default rating to Caa2-PD from B3-PD.
The Caa2 rating of Altice France Holding reflects (1) its
unstainable capital structure given the high leverage and its weak
free cash flow, particularly in a high interest rate environment;
(2) the competitive nature of the French market; (3) the complexity
of the group structure and its high appetite for leverage; and (4)
its weak liquidity owing to the large refinancing needs from 2025
onwards.
The rating continues to reflect (1) Altice France Holding's
position as a leading telecom services provider in France; (2) its
large scale; and (3) its integrated business profile.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS
Governance risk considerations are material to the rating action
owing to Altice France Holding's aggressive financial strategy
which has led to an unstainable capital structure. This factor has
resulted in the company's Financial Strategy and Risk Management
score moving to 5 from 4, the governance issuer profile score (IPS)
to G-5 from G-4 and the Credit Impact Score moving to CIS-5 from
CIS-4.
LIQUIDITY
Altice France Holding liquidity is tight, due to the ongoing
negative FCF and the significant amount of debt maturities from
2025 onwards, with around EUR1,050 million of backed senior secured
bonds due in Q1 2025 issued at Altice France S.A. level (EUR710
million outstanding after the recent repurchases) and around EUR500
million equivalent of senior secured bank debt due in Q3 2025
issued by Altice France. Moody's also notes that there has been a
reduction of EUR200 million in the reverse factoring programme with
potential for further repayments because of the deterioration in
the underlying credit quality.
As of December 31, 2023, the company had a cash balance of EUR383
million and access to a EUR1 billion revolving credit facility
(RCF) at Altice France level (c. EUR300 million available) expiring
in 2028 and to a EUR175 million committed RCF at Altice France
Holding expiring in 2026 (fully undrawn).
The RCF at Altice France is subject to a springing (40% drawings)
net senior leverage covenant of 5.25x. The RCF at the holding
company level is subject to a springing (40% drawings) net leverage
covenant of 5.75x. With pro forma net senior leverage (based on
last two quarters annualized EBITDA "L2QA") of 5.2x and total net
leverage of 6.2x in Q4 2023, there is limited headroom under the
RCF at Altice France and no headroom at Altice France Holding.
However, Moody's understands that the company has additional
flexibility to comply with this covenant, given that the
calculation excludes the debt under the credit basket which is
equivalent to almost 1x of leverage.
In addition, the company should receive total proceeds from
disposals of about EUR2.6 billion between Q2 and Q3 2024, including
EUR535 million from the sale of a 70% stake in its datacenter
portfolio, EUR465 million from the sale of its 49% stake in La
Poste Telecom, and EUR1.55 billion from the sale of 100% of Altice
Media.
STRUCTURAL CONSIDERATIONS
The Ca rating of Altice France Holding's senior unsecured notes
reflects the structural subordination of these holding company
notes to bonds and other senior secured bank facilities at Altice
France, which are rated Caa1, one notch above the CFR. This is
because of their senior ranking in the waterfall of liabilities, as
the debt at the operating company level is secured and is closer to
the cash-flow-generating assets.
RATIONALE FOR NEGATIVE OUTLOOK
The negative outlook reflects the limited visibility around the
company's ability to restore earnings growth and reduce leverage,
because of the competitive market conditions.
The negative outlook also takes into account the increased risk of
default given the unsustainable capital structure, and the
potential for distressed debt exchanges, given the company's plan
to reduce its reported net leverage to 4.0x through discounted
transactions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the negative outlook, there is limited upward pressure on the
rating. However, upward pressure could develop if the company
delivers a solid operating performance with sustainable revenue and
EBITDA growth that leads to a more sustainable capital structure.
Altice France Holding rating could be downgraded if the company
fails to refinance its 2025 debt maturities in the coming months;
or if the company pursues a debt restructuring resulting in higher
losses for creditors than those currently assumed in the current
Caa2 rating.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was
Telecommunications Service Providers published in November 2023.
COMPANY PROFILE
Altice France is a leading telecom operator in France. The company
has three business segments: business to consumer (B2C, 64% of
revenue in 2023), business to business (B2B, 34%) and media (2%).
In 2023, the company had 20.5 million mobile subscribers and 6.4
million fixed-line subscribers, of which 4.8 million were
fast-fibre connections. In 2023, Altice France reported revenue and
adjusted EBITDA (as defined by the company) of EUR11.2 billion and
EUR3.9 billion, respectively.
EUROSCIENCE: Goes Bankrupt Due to Lack of Funding
-------------------------------------------------
Science Business reports that EuroScience, the association behind
the European Science Open Forum (ESOF), Europe's largest science
conference, has gone bankrupt after failing to secure funding for
the 2026 event.
According to Science Business, this year's ESOF will go on as
planned in Katowice, Poland, but uncertainty looms over the future
after the European Commission, a co-funder of the conference,
changed the way it allocates money for the biennial event,
prompting other supporters to pull out.
EuroScience was set up in 1997 by a group of 250 scientists and
research professionals from 25 European countries, with the goal of
bringing together people interested in science, technology and the
humanities. The association has actively participated in shaping
science and technology policy in Europe, but it is mainly known for
launching the ESOF conference, with the first event taking place in
Stockholm in 2004.
"Financial troubles [at EuroScience] are not that new," Science
Business quotes Martin Andler, French mathematician and former vice
president of EuroScience, who now runs the Initiative for Science
in Europe, as saying. The problems got more acute after the 2020
conference in Trieste, when the COVID-19 pandemic increased costs.
According to secretary general Matthias Girod, EuroScience has been
trying to improve its model and rebuild its cash reserves, but that
became increasingly difficult, Science Business relates. "The
world after Corona and in the aftermath of the Russian invasion of
Ukraine was not the same. The increased costs of living and
basically everything made it increasingly difficult to finance
EuroScience normal operations, let alone pay back debts," Mr.
Girod, as cited by Science Business, said.
European Science Open Forum (ESOF) is headquartered in Strasbourg,
France.
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G E R M A N Y
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WIRECARD AG: EY Won't Appeal Penalties Over Audits
--------------------------------------------------
Olaf Storbeck at The Financial Times reports that EY has abandoned
an appeal against unprecedented penalties imposed following its
audits of fraudulent payments company Wirecard, as the Big Four
firm seeks to draw a line under years of crisis in Germany.
Germany's audit watchdog Apas last year banned EY from taking on
new listed audit clients for two years and levied a EUR500,000 fine
over alleged flaws in its audits of Wirecard, which collapsed in
June 2020, the FT relates.
According to the FT, EY Germany said on March 26 that, while it
"does not agree with all findings" by Apas, it has decided to
"fully comply with the sanctions" in a move that "will bring a
conclusion to these proceedings". The ban on new clients was on
hold pending the appeal, which EY has withdrawn and so is likely to
take effect immediately, the FT relays, citing a person familiar
with the matter said.
EY and some of its partners still face an array of other legal
cases, which are expected to take years to work their way through
the Germany courts, the FT notes. The auditor faces law suits from
former Wirecard shareholders and the group's administrator seeking
damages over its work for the defunct company, the FT discloses.
Munich prosecutors are also pursuing an investigation against
several EY partners who were in charge of Wirecard audits, after
Apas in 2020 identified potential misconduct in a criminal
complaint, according to the FT.
Even without the ban on new clients, in the four years since
Wirecard crashed into insolvency EY Germany has not won any
blue-chip mandates and has lost several. The two-year ban taking
effect now means that EY would be free to take on clients from late
March 2026, which is just before when many annual shareholder
meetings take place, in which auditors are formally appointed.
Apas, the watchdog, last year concluded that EY violated its
professional duties "during the audits of Wirecard and Wirecard
Bank from 2016 to 2018", the FT recounts. EY had issued a series
of unqualified audits for the disgraced payments group, missing
that half of the revenue and the bulk of the profits did not exist,
according to the FT.
Apas did not publicly disclose the details of EY's alleged
misconduct. People with direct knowledge of the ruling told the FT
that the regulator did not address the question if EY acted with
intent or just with negligence, which will be an important factor
in deciding the firm's criminal and civil liabilities.
=============
I C E L A N D
=============
ARION BANK: Moody's Gives Ba2(hyb) Rating to AT1 Convertible Notes
------------------------------------------------------------------
Moody's Ratings has assigned a Ba2(hyb) rating to Arion Bank hf.'s
USD100 mn perpetual Additional Tier 1 convertible notes that were
issued on February 26, 2020 by the bank.
RATINGS RATIONALE
The Ba2(hyb) rating is positioned three notches below the baa2
Adjusted Baseline Credit Assessment (Adjusted BCA) of Arion, in
line with Moody's standard notching guidance for AT1 securities.
This takes into account the elevated credit risks associated to
this type of subordinated debt class, given the relatively low
cushion available for absorbing losses before the AT1 creditors are
impacted in a resolution scenario.
The principal and any accrued but unpaid distributions on these
capital securities would be written down, partially or in full, if
(1) at any time the core equity tier 1 (CET1) of the bank on a solo
basis or of the Group on a consolidated basis is less than 5.125%
or (2) upon the occurrence of a non-viability event.
In addition, Arion, as a going concern, may choose not to pay the
interest on these securities on a non-cumulative basis. As such,
the interest payments on these capital securities are fully
discretionary. These securities are senior to common shareholders
but junior to all depositors, general creditors, senior debt and
subordinated debt holders.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Moody's could upgrade Arion's AT1 securities rating if the bank's
BCA and subsequently Adjusted BCA are upgraded. Arion's baa2 BCA
could be upgraded if the bank improves further its risk profile by
reducing single name and sector concentrations in combination with
a reduction in the use of market funds while maintaining strong
capitalisation and strong earnings' generation capacity across the
credit cycle.
Conversely, Moody's could downgrade Arion bank's AT1 securities
rating if the bank's BCA is downgraded. Arion's BCA could be
downgraded if the bank's (1) asset quality and risk profile was to
deteriorate, for example as a result of increased exposures to more
volatile sectors and/or increased single name concentrations; (2)
risk profile increases driven by non-credit related risks such as
market risk and FX risk, (3) the bank's recurring profitability
weakens significantly limiting its internal capital generation, (4)
financing conditions were to become more difficult or (5) the
macroeconomic environment deteriorates significantly leading to a
lower Macro Profile.
PRINCIPAL METHODOLOGY
The principal methodology used in this rating was Banks Methodology
published in March 2024.
=============
I R E L A N D
=============
ARES EUROPEAN VII: S&P Affirms 'B- (sf)' Rating on Class E-R Notes
------------------------------------------------------------------
S&P Global Ratings raised its credit ratings on Ares European CLO
VII DAC's class A-2A-R and A-2B-R notes to 'AA+ (sf)' from 'AA
(sf)', class B-R notes to 'AA (sf)' from 'A (sf)', and class C-R
notes to 'A (sf)' from 'BBB (sf)'. S&P also affirmed its 'AAA (sf)'
rating on the class A-1-R-R notes, its 'BB (sf)' rating on the
class D-R notes, and its 'B- (sf)' rating on the class E-R notes.
Ares European CLO VII is a cash flow collateralized loan obligation
(CLO), securitizing a portfolio of primarily senior secured
euro-denominated leveraged loans and bonds issued by European
borrowers. The transaction is managed by Ares European Loan
Management LLP. Its reinvestment period ended in October 2021.
The rating actions follow the application of S&P's relevant
criteria and its credit and cash flow analysis based on the
February 2024 trustee report.
Since the end of the reinvestment period, the class A-1-R-R notes
have amortized to 72% of their initial size. As a result, credit
enhancement has increased for all the rated notes.
S&P's scenario default rates (SDRs) have benefited from a the
portfolio's lower weighted-average life to 2.90 years from 4.44
years and have decreased at each rating level.
According to the February 2024 trustee report, all the notes are
paying current interest and all the coverage tests are passing.
Table 1
Assets key metrics
CURRENT* AS OF CLOSING
Portfolio weighted-average rating B B
'CCC' assets (%) 6.6 1.6
Weighted-average life (years) 2.90 4.44
Obligor diversity measure 104.1 125.2
Industry diversity measure 23.4 22.4
Regional diversity measure 1.2 1.2
Total collateral amount (mil. EUR)§ 374.45 447.54
Defaulted assets (mil. EUR) 7.22 1.67
Number of performing obligors 144 179
'AAA' SDR (%) 53.68 60.77
'AAA' WARR (%) 36.08 37.36
*Based on the portfolio composition as reported by the trustee in
February 2024 and S&P Global Ratings' data as of March 2024.
§Performing assets plus cash and expected recoveries on defaulted
assets.
SDR--Scenario default rate.
WARR--Weighted-average recovery rate.
Table 2
Liabilities key metrics
CURRENT AMOUNT CURRENT CREDIT CREDIT ENHANCEMENT AS OF
CLASS (MIL. EUR) ENHANCEMENT (%) APRIL 2021 REVIEW (%)
A-1-R-R 191.67 48.81 40.79
A-2A-R 52.00 32.26 26.93
A-2B-R 10.00 32.26 26.93
B-R 29.00 24.51 20.45
C-R 20.00 19.17 15.99
D-R 29.00 11.43 9.51
E-R 12.50 8.09 6.71
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)].
Following the application of our relevant criteria, S&P believes
that the class A-2A-R, A-2B-R, B-R, and C-R notes can now withstand
higher rating scenarios.
S&P said, "Our standard cash flow analysis indicates that the
available credit enhancement for the class A-2A-R, A-2B-R, B-R,
C-R, D-R, and E-R notes are commensurate with higher ratings. For
these classes, we considered 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, may therefore prolong the
note repayment profile for the most senior class. We also
considered the level of cushion between our break-even default rate
(BDR) and SDR for these notes at their passing rating levels, as
well as the current macroeconomic conditions and these tranches'
relative seniority. We therefore limited our upgrades to the class
A-2A-R, A-2B-R, B-R, and C-R notes, and affirmed our ratings on the
class D-R and E-R notes.
"Our credit and cash flow analysis indicates that the available
credit enhancement for the class A-1-R-R notes is still
commensurate with a 'AAA (sf)' rating. We therefore affirmed our
rating on this class of notes.
"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."
FRESHLY CHOPPED: Wants Court to Appoint Examiner
------------------------------------------------
Niall Sargent at The Currency reports that the well-known healthy
fast-food chain Freshly Chopped has asked the courts to appoint an
examiner over financial challenges faced by four of its stores.
Just last month, Freshly Chopped Limited entered lighter rescue
proceedings through the Small Companies Administrative Rescue
Process (Scarp), The Currency relates. The process was introduced
in 2021 to provide a simplified restructuring mechanism for small
companies in financial distress.
The four Dublin stores are in Fairview, Liffey Valley, Swords and
Baggot Street, the flagship shop that opened in May 2012 to serve
up salads prepared by staff with its now-signature curved mezzaluna
knives, The Currency discloses.
According to The Currency, several interested parties are now
looking to acquire the company operating them.
MADISON PARK XX: Fitch Assigns 'B-(EXP)sf' Rating to Cl. F-R Notes
------------------------------------------------------------------
Fitch Ratings has assigned Madison Park Euro Funding XX DAC Reset
expected ratings.
The assignment of final ratings is contingent on the receipt of
final documents conforming to information already reviewed.
Entity/Debt Rating
----------- ------
Madison Park Euro
Funding XX DAC
A-R LT AAA(EXP)sf Expected Rating
A-R Loan LT AAA(EXP)sf Expected Rating
B-1-R LT AA(EXP)sf Expected Rating
B-2-R LT AA(EXP)sf Expected Rating
C-R LT A(EXP)sf Expected Rating
D-R LT BBB-(EXP)sf Expected Rating
E-R LT BB-(EXP)sf Expected Rating
F-R LT B-(EXP)sf Expected Rating
TRANSACTION SUMMARY
Madison Park Euro Funding XX DAC is a securitisation of mainly
senior secured loans and secured senior bonds with a component of
senior unsecured, mezzanine, and second-lien loans. The transaction
will have a target par of EUR400 million. The portfolio is actively
managed by Credit Suisse Asset Management Limited. The
collateralised loan obligation (CLO) will have an approximately
4.6-year reinvestment period and an approximately 7.5-year weighted
average life (WAL) test.
KEY RATING DRIVERS
Average Portfolio Credit Quality (Neutral): Fitch assesses the
average credit quality of obligors at 'B'/'B-'. The Fitch-weighted
average rating factor (WARF) of the identified portfolio is 25.1.
High Recovery Expectations (Positive): At least 92.5% of the
portfolio will comprise senior secured obligations. Fitch views the
recovery prospects for these assets as more favourable than for
second-lien, unsecured and mezzanine assets. The Fitch-weighted
average recovery rate (WARR) of the identified portfolio is 61.1%.
Diversified Portfolio (Positive): The transaction will include two
Fitch matrices, which are effective at closing. These correspond to
a top 10 obligor concentration limit at 20%, two fixed-rate asset
limits of 2.5% and 12.5%, respectively, and a 7.5-year WAL. The
transaction will also include various concentration limits,
including the maximum exposure to the three-largest Fitch-defined
industries in the portfolio at 40%. These covenants ensure the
asset portfolio will not be exposed to excessive concentration.
Portfolio Management (Neutral): The transaction will have an
approximately 4.6-year reinvestment period and include reinvestment
criteria similar to those of other European transactions. Fitch's
analysis is based on a stressed-case portfolio with the aim of
testing the robustness of the transaction structure against its
covenants and portfolio guidelines. The transaction can extend the
WAL test by one year to 7.5 years one year after the issue date if
the aggregate collateral balance (defaulted obligations at
Fitch-calculated collateral value) is greater than or equal to the
reinvestment target par balance, and the transaction is passing all
tests.
Cash Flow Modelling (Positive): The WAL used for the transaction's
matrix and Fitch-stressed portfolio analysis is 12 months less than
the WAL covenant. This is to account for the strict reinvestment
conditions envisaged by the transaction after its reinvestment
period. These include, amongst others, passing both the coverage
tests and the Fitch 'CCC' bucket limitation test post reinvestment
as well a WAL covenant that progressively steps down over time,
both before and after the end of the reinvestment period. Fitch
believes these conditions would reduce the effective risk horizon
of the portfolio during the stress period.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
A 25% increase of the mean default rate (RDR) and a 25% decrease of
the recovery rate (RRR) across all ratings of the identified
portfolio would have no impact on the class A-R notes and A-R loan
but would lead to a downgrade of two notches for the class B-1-R,
B-2-R and C-R notes, and of one notch for all other notes.
Downgrades, which are based on the identified portfolio, may occur
if the loss expectation is larger than initially assumed, due to
unexpectedly high levels of default and portfolio deterioration.
Due to the better metrics and shorter life of the identified
portfolio than the Fitch-stressed portfolio, the class B-1-R,
B-2-R, D-R, E-R and F-R notes display a rating cushion of two
notches, while the class C-R notes display a cushion of one notch.
Should the cushion between the identified portfolio and the
Fitch-stressed portfolio be eroded either due to manager trading or
negative portfolio credit migration, a 25% increase of the mean RDR
across all ratings and a 25% decrease of the RRR across all ratings
of the Fitch-stressed portfolio would lead to a downgrade of up to
four notches for the rated notes.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
A 25% reduction of the mean RDR and a 25% increase in the RRR
across all ratings of the Fitch-stressed portfolio would lead to an
upgrade of up to three notches for the rated notes, except for the
'AAAsf' notes.
During the reinvestment period, upgrades, which are based on the
Fitch-stressed portfolio, may occur on better-than-expected
portfolio credit quality and a shorter remaining WAL test, leading
to the ability of the notes to withstand larger-than-expected
losses for the remaining life of the transaction. After the end of
the reinvestment period, upgrades may occur on stable portfolio
credit quality and deleveraging, leading to higher credit
enhancement and excess spread available to cover losses in the
remaining portfolio.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
DATA ADEQUACY
Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset pool
and the transaction. Fitch has not reviewed the results of any
third-party assessment of the asset portfolio information or
conducted a review of origination files as part of its ongoing
monitoring.
The majority of the underlying assets or risk-presenting entities
have ratings or credit opinions from Fitch and/or other nationally
recognised statistical rating organisations and/or European
securities and markets authority-registered rating agencies. Fitch
has relied on the practices of the relevant groups within Fitch
and/or other rating agencies to assess the asset portfolio
information or information on the risk-presenting entities.
Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis according to its applicable rating methodologies
indicates that it is adequately reliable.
ROUNDSTONE SECURITIES NO. 2: S&P Assigns BB (sf) Rating to F Notes
------------------------------------------------------------------
S&P Global Ratings assigned its credit ratings to Roundstone
Securities No. 2 DAC's (Roundstone) class A, B-Dfrd, C-Dfrd,
D-Dfrd, E-Dfrd, and F-Dfrd notes. At closing, Roundstone also
issued unrated class Z, R, X1, and X2 notes.
S&P said, "Our ratings address the timely payment of interest and
the ultimate payment of principal on the class A notes. Our ratings
on the class B-Dfrd, C-Dfrd, D-Dfrd, E-Dfrd, and F-Dfrd notes
address the ultimate payment of interest and principal on these
notes."
Roundstone is a securitization of a pool of first-ranking owner
occupied and buy-to-let mortgage loans, secured on properties in
Ireland originated by the Bank of Scotland. Pepper Finance
Corporation (Ireland) DAC will be the servicer for all of the loans
in the transaction from closing.
The loans in the pool were originated as prime mortgages before the
Central Bank's macroprudential rules came into effect. Of the loans
in the pool, 99.4% pay floating rates of interest and 61.2% are
interest-only or have part and part repayments. Arrears in the
portfolio are increasing, with arrears exceeding three months at
16.8%. Higher repayments due to rising interest rates is one of the
main contributing factors behind this increase, but S&P considered
the arrears trend when assigning the ratings.
The sponsor as retention holder is retaining an economic interest
in the transaction, by acquiring and maintaining vertical interest
of at least 5% of the notes issued subject to U.S. credit risk
retention requirements. The remaining 95% of the pool will be
funded through the proceeds of the mortgage-backed rated notes.
S&P said, "Our ratings reflect our assessment of the transaction's
payment structure, cash flow mechanics, and the results of our cash
flow analysis to assess whether the notes would be repaid under
stress test scenarios. The transaction's structure relies on a
combination of subordination, a liquidity reserve fund, and a
general reserve fund to cover credit losses and income shortfalls.
Taking these factors into account, we consider the credit
enhancement available to the rated notes to be commensurate with
the ratings that we have assigned."
Ratings
CLASS RATING* AMOUNT (MIL. EUR)
A AAA (sf) 1,216.516
B-Dfrd AA+ (sf) 86.544
C-Dfrd AA (sf) 73.480
D-Dfrd A (sf) 61.234
E-Dfrd BBB (sf) 36.740
F-Dfrd BB (sf) 19.594
Z NR 138.797
R NR 50.587
X1 NR 0.100
X2 NR 2.000
*S&P's ratings address timely receipt of interest and ultimate
repayment of principal on the class A notes and the ultimate
payment of interest and principal on the other rated notes.
NR--Not rated.
SOUND POINT 10: S&P Assigns B- (sf) Rating to Class F Notes
-----------------------------------------------------------
S&P Global Ratings assigned its credit ratings to Sound Point Euro
CLO 10 Funding DAC's class A, B, C, D, E, and F notes. At closing,
the issuer also issued unrated subordinated notes.
Under the transaction documents, the rated notes will pay quarterly
interest unless there is a frequency switch event, upon which the
notes will pay semiannually.
This transaction has a two-year non-call period and the portfolio's
reinvestment period will end approximately five years after
closing.
The ratings reflect S&P's assessment of:
-- The diversified collateral pool, which primarily comprises
broadly syndicated speculative-grade senior secured term loans and
bonds that are governed by collateral quality tests.
-- The credit enhancement provided through the subordination of
cash flows, excess spread, and overcollateralization (OC).
-- The collateral manager's experienced team, which can affect the
performance of the rated notes through collateral selection,
ongoing portfolio management, and trading.
-- The transaction's legal structure, which is bankruptcy remote.
-- The transaction's counterparty risks, which are in line with
our counterparty rating framework.
Portfolio benchmarks
CURRENT
S&P Global Ratings' weighted-average rating factor 2,898.44
Default rate dispersion 453.10
Weighted-average life (years) 4.58
Weighted-average life (years) extended
to cover the length of the reinvestment period 5.06
Obligor diversity measure 128.76
Industry diversity measure 20.56
Regional diversity measure 1.30
Transaction key metrics
CURRENT
Total par amount (mil. EUR) 450.00
Identified assets (%) 100
Ramp-up at closing (%) 100
Defaulted assets (mil. EUR) 0
Number of performing obligors 146
Portfolio weighted-average rating
derived from S&P's CDO evaluator B
'CCC' category rated assets (%) 0
'AAA' weighted-average recovery (%) 36.96
Actual Weighted-average spread (%) 4.27
Actual Weighted-average coupon (%) 6.45
Rating rationale
S&P said, "Our ratings reflect our assessment of the collateral
portfolio's credit quality, which has a weighted-average rating of
'B'. The portfolio primarily comprises broadly syndicated
speculative-grade senior secured term loans and senior secured
bonds. Therefore, we conducted our credit and cash flow analysis by
applying our criteria for corporate cash flow CDOs.
"In our cash flow analysis, we modelled the EUR450 million par
amount, the actual weighted-average spread of 4.27%, and the actual
weighted-average recovery rates. We applied various cash flow
stress scenarios, using four different default patterns, in
conjunction with different interest rate stress scenarios for each
liability rating category.
"The transaction's documented counterparty replacement and remedy
mechanisms adequately mitigate its exposure to counterparty risk
under our counterparty 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.
"The transaction's legal structure is bankruptcy remote, in line
with our legal criteria.
"Our credit and cash flow analysis indicate that the available
credit enhancement for the class B to E notes could withstand
stresses commensurate with higher ratings than those we have
assigned. However, as the CLO is still in its reinvestment phase,
during which the transaction's credit risk profile could
deteriorate, we have capped our assigned ratings on these notes.
The class A notes can withstand stresses commensurate with the
assigned rating.
"Following our analysis of the credit, cash flow, counterparty,
operational, and legal risks, we believe that our ratings are
commensurate with the available credit enhancement for the class A,
B, C, D, E, and F notes.
"In addition to our standard analysis, to provide an indication of
how rising pressures among speculative-grade corporates could
affect our ratings on European CLO transactions, we have also
included the sensitivity of the ratings on the class A to E notes,
based on four hypothetical scenarios.
"As our ratings analysis makes additional considerations before
assigning ratings in the 'CCC' category, and we would assign a 'B-'
rating if the criteria for assigning a 'CCC' category rating are
not met, we have not included the above scenario analysis results
for the class F notes."
Ratings
AMOUNT
CLASS RATING* (MIL. EUR) SUB (%) INTEREST RATE§
A AAA (sf) 279.00 38.00 Three/six-month EURIBOR
plus 1.50%
B AA (sf) 47.20 27.51 Three/six-month EURIBOR
plus 2.15%
C A (sf) 27.40 21.42 Three/six-month EURIBOR
plus 2.65%
D BBB- (sf) 31.10 14.51 Three/six-month EURIBOR
plus 4.00%
E BB- (sf) 20.30 10.00 Three/six-month EURIBOR
plus 6.52%
F B- (sf) 15.70 6.51 Three/six-month EURIBOR
plus 8.51%
Sub NR 31.85 N/A N/A
*The ratings assigned to the class A and B notes address timely
interest and ultimate principal payments. The ratings assigned to
the class C, D, E, and F notes address ultimate interest and
principal payments.
§The payment frequency switches to semiannual and the index
switches to six-month EURIBOR when a frequency switch event occurs.
NR--Not rated.
N/A--Not applicable.
=========
I T A L Y
=========
BANCA SELLA: DBRS Gives BB Subordinated Debt Rating, Trend Stable
-----------------------------------------------------------------
DBRS Ratings GmbH assigned credit ratings to Banca Sella Holding
SpA (Sella Group or the Group) Subordinated Debt at BB with a
Stable trend. At the same time, Morningstar DBRS discontinued the
credit ratings on Banca Sella S.p.A. (Sella or the Bank) Mandatory
Pay Subordinated Debt (ISIN: XS1687277555) as these instruments
have been repaid.
KEY CREDIT RATING CONSIDERATIONS
In line with the Bank Obligations Framework set out in Morningstar
DBRS's Global Methodology for Rating Banks and Banking
Organizations (June 2023), Subordinated Debt is rated two notches
below Sella Group's Long-Term Issuer Rating of BBB (low).
CREDIT RATING DRIVERS
Any positive change in the Sella Group's Long-Term Issuer ratings
would have positive implications for the Subordinated Debt rating.
Similarly, any negative change in the Sella Group's Long-Term
Issuer rating would have negative implications for the rating.
Notes: All figures are in EUR unless otherwise noted.
MONTE DEI PASCHI: Italy Sells 12.5% Stake for About EUR650 Mil.
---------------------------------------------------------------
Sonia Sirletti and Sunil Kesur at Bloomberg News report that Italy
sold about 12.5% of Banca Monte dei Paschi di Siena SpA for about
EUR650 million (US$704 million) as part of a state plan to divest
from the bailed-out lender.
The government led by Prime Minister Giorgia Meloni sold 157.5
million shares for EUR4.15 each, with a 2.5% discount on Monte
Paschi's closing price, the Finance Ministry said on March 26 in a
statement, Bloomberg relates. The pricing is 42% higher than the
government's previous placement in November, Bloomberg notes.
RED SEA SPV: Moody's Cuts EUR1656.504MM Cl. A Notes Rating to Ba2
-----------------------------------------------------------------
MOODY'S Ratings has downgraded the rating of Class A notes in RED
SEA SPV S.r.l. The rating action reflects lower than anticipated
cash-flows generated from the recovery process on the
non-performing loans (NPLs).
EUR1656.504M Class A Notes, Downgraded to Ba2 (sf); previously on
Nov 30, 2022 Downgraded to Baa2 (sf)
RATINGS RATIONALE
The rating action is prompted by lower than anticipated cash-flows
generated from the recovery process on the NPLs.
Lower than anticipated cash-flows generated from the recovery
process on the NPLs:
The portfolio is serviced by Prelios Credit Servicing S.p.A.
("PRECS"; unrated). As of September 2023, Cumulative Collection
Ratio stood at 76.51%, based on collections net of legal and
procedural costs, meaning that collections are coming significantly
slower than anticipated in the original Business Plan projections.
This compares against 86.70% at the time of the latest rating
action in November 2022. Through the September 30, 2023 collection
period, eleven collection periods since closing, aggregate
collections net of legal and procedural costs were EUR1,295.31
million versus original business plan expectations of EUR1,706.38
million. The servicer's latest Business Plan expects total amount
of future collections net of expenses and fees to be slightly lower
than the outstanding amount of the Class A Notes. This would not be
sufficient to repay class A considering there are senior expenses,
fees and interest on top of class A notes repayment.
NPV Cumulative Profitability Ratio (the ratio between the Net
Present Value of collections against the expected collections as
per the original business plan, for positions which have been
either collected in full or written off) stood at 102.54% as of
September 2023 compared to 107.38% as of last rating action. Albeit
still good, the ratio is following a declining trend. However, it
only refers to closed positions while the time to process open
positions and the future collections on those remain uncertain.
In terms of underlying portfolio, the reported Gross Book Value
("GBV") stood at EUR3.15 billion as of September 2023 down from
EUR5.1 billion at closing, and around 57% of the properties (by
value) are concentrated in Lombardia, Toscana and Veneto, while
around 59.7% of properties (by value) have already been sold.
Borrower concentration remains contained with around 4.9% of the
GBV being concentrated on the top 25 obligors. Milano remains the
court with largest share of positions, others are evenly
distributed.
Interest of Class B notes, payable senior to the principal of Class
A notes, if there is no Subordination Event, is capped at 6% and
any excess return to this cap is always subordinated to the
principal of the Class A notes. Moody's notes that Subordination
Event has not occurred despite the underperformance of the
transaction as in this case the trigger level stands at 70%
compared to 90% for most of its peers.
Out of approximately EUR1.89 billion reduction in GBV since
closing, principal payments to Class A have been around EUR1.07
billion.
The advance rate (the ratio between Class A notes balance and the
outstanding GBV of the backing portfolio) stood at 18.68% as of
September 2023, down from 21.47% as of the last rating action.
Under-hedging:
The transaction benefits from an interest rate cap, linked to
six-month EURIBOR, provided by Banco Santander S.A. (Spain)
(A3(cr)/P-2(cr)) and Mediobanca S.p.A. ((Baa2(cr)/P-2(cr)) in equal
parts of the notional. The strike of the cap option increases
during the life of the transactions. In the last IPD the strike
stood at 1.50% and it will increase to 1.75% and then 2% until the
expiring date (April 2029). The notional of the interest rate cap
was initially equal to the outstanding balance of the Class A notes
and then amortizing down with pre-defined amounts.
Given the Class A notes amortized at a slower pace than the
scheduled notional amount set out in the cap agreement, a portion
of the outstanding Class A notes became unhedged for the first time
in the last payment date. However under-hedging is still small
(1.10% of class A outstanding balance).
NPL transactions' cash flows depend on the timing and amount of
collections. Due to the current economic environment, Moody's has
considered additional stresses in its analysis, including a 6 delay
in the recovery timing. Benchmarking and performance considerations
against other Italian NPLs have also been factored in the
analysis.
Moody's has also taken into account the potential cost of the GACS
Guarantee within its cash flow modelling, while any potential
benefit from the guarantee for the senior Noteholders has not been
considered in its analysis.
The principal methodology used in this rating was "Non-Performing
and Re-Performing Loan Securitizations Methodology" published in
July 2022.
Factors that would lead to an upgrade or downgrade of the rating:
Factors or circumstances that could lead to an upgrade of the
rating include: (1) the recovery process of the non-performing
loans producing significantly higher cash-flows in a shorter time
frame than expected; (2) improvements in the credit quality of the
transaction counterparties; and (3) a decrease in sovereign risk.
Factors or circumstances that could lead to a downgrade of the
rating include: (1) significantly lower or slower cash-flows
generated from the recovery process on the non-performing loans due
to either a longer time for the courts to process the foreclosures
and bankruptcies, a change in economic conditions from Moody's
central scenario forecast or idiosyncratic performance factors. For
instance, should economic conditions be worse than forecasted and
the sale of the properties generate less cash-flows for the issuer
or take a longer time to sell the properties, all these factors
could result in a downgrade of the rating; (2) deterioration in the
credit quality of the transaction counterparties; and (3) increase
in sovereign risk.
=====================
N E T H E R L A N D S
=====================
BOELS TOPHOLDING: Fitch Affirms BB- LongTerm IDR, Outlook Positive
------------------------------------------------------------------
Fitch Ratings has affirmed Boels Topholding B.V.'s Long-Term Issuer
Default Rating (IDR) and its long-term senior secured debt rating
at 'BB-'. The Outlook on the IDR is Positive.
KEY RATING DRIVERS
Variable Capex Well-Managed: Boels' Long-Term IDR reflects its
franchise as Europe's second-largest equipment rental company, its
experienced management team and its demonstrated capacity to manage
capex through varying economic conditions such as the pandemic and
the higher interest rate. It also takes into account the
integration of Boels' recently announced acquisition of aerial work
platform (AWP) provider Riwal while maintaining sufficient asset
utilisation across the enlarged fleet to service the associated
debt funding.
Positive Outlook: The Positive Outlook reflects Boels' growing
EBITDA, improvements to leverage since its major acquisition of
Cramo plc in 2020 and the increasing diversification of Boels'
funding following its debut bond issue in 2023. Successful
integration of Riwal, accompanied by a return to deleveraging
following the absorption of the acquisition funding, could lead to
an upgrade.
Recently Announced Acquisition: Like Boels, the soon-to-be acquired
Riwal is Dutch-headquartered, with complementary fleet and relevant
geographic overlap, mainly in Europe. Fitch sees potential for
cross-selling in expanding the offer of Boels' general equipment
via Riwal to regions where Boels has hitherto lacked significant
presence, while also deepening its AWP capacity in countries where
it is already well-represented with general or other specialist
equipment. At the same time Fitch recognises that all acquisitions
carry integration and execution risks, and that a temporary
increase in leverage is likely while funding the transaction.
Equipment Rental Growth Trend: The acquisition comes against the
backdrop of longer-term consolidation within the sector. Boels'
acquisition of Cramo in 2020 created Europe's second-largest
equipment rental business with the opportunity to move equipment
between locations to meet varying demand levels, serve larger
customers and achieve brand recognition. The sector has grown
significantly since the 2008-2009 financial crisis as more
customers choose to rent rather than buy equipment and Fitch
expects this trend to continue notwithstanding some recent pressure
on the European construction industry, for example in Sweden.
Leverage Reduced Post-Cramo: Fitch-calculated gross debt/EBITDA, on
a pre-IFRS16 basis, decreased to around 3.5x at end-2023 from
around 4x on completion of the Cramo acquisition in 2020. Fitch
expects a temporary small increase to fund the Riwal acquisition,
before Boels resumes deleveraging. Earnings retention since 2020
has also helped to restore Boels to a small net tangible equity
position, having for a time been negative on account of
Cramo-related goodwill.
Long Debt Maturity Profile: Boels' debt consists principally of a
term loan maturing in 2027, which funded the Cramo acquisition. In
September 2023 this was reduced by EUR200 million to EUR1.25
billion when the company issued its debut bond, of EUR400 million.
Liquidity benefits from capex being discretionary to a certain
extent in the short term. This enables the company to moderate
spending at a time of reduced cash inflows, although requiring
reinvestment over the longer term.
Limited Asset Impairment: Boels maintains a fairly young fleet.
Average age increased during the pandemic, when capex slowed, but
as of end-2023 had reduced to around 52 months. Depreciation rates
are acceptable in Fitch's view, with limited asset impairment or
loss on disposal.
Private Company, Long Experience: Boels has been able to maintain
liquidity and profitability through fluctuating economic
conditions. Its governance remains less developed than public
companies', but Fitch views the family interest in the long-term
health of the business as credit-positive, with a record of
reinvesting earnings rather than extracting dividends.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Material reduction in EBITDA, whether from lower fleet
utilisation or from rising costs, resulting in gross debt/EBITDA
above 6x
- Reduction in EBITDA interest coverage to 3x on a sustained basis
- Insufficient liquidity or access to funding to support the capex
required to maintain a sufficiently young fleet
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Maintenance of sound asset utilisation rates, enabling further
growth in EBITDA with pre-IFRS16 leverage sustained below 3.5x
- Smooth integration of the Riwal acquisition, while maintaining a
long-dated maturity profile to borrowings
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
Boels' debt is classified as secured, but, in the absence of direct
security over operating assets, Fitch rates it in line with Boels'
Long-Term IDR (as it would an unsecured obligation), indicating
average recovery prospects.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
The debt ratings are primarily sensitive to a change in Boels'
Long-Term IDR. Should Boels introduce any debt secured on operating
assets ranking above rated instruments (or a subordinated tranche
below them), Fitch could notch the debt ratings down (or up) from
the Long-Term IDR, on the basis of weaker (or stronger) recovery
prospects.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity. Fitch's ESG Relevance Scores are not inputs
in the rating process; they are an observation of the materiality
and relevance of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Boels Topholding B.V. LT IDR BB- Affirmed BB-
senior secured LT BB- Affirmed BB-
BOELS TOPHOLDING: Moody's Affirms 'Ba3' CFR, Alters Outlook to Neg
------------------------------------------------------------------
Moody's Ratings has affirmed the Ba3 long-term corporate family
rating and Ba3- PD probability of default rating of Boels
Topholding B.V. Concurrently, Moody's affirmed the company's Ba3
backed senior secured notes, the Ba3 senior secured revolving
credit facility (RCF) and Ba3 senior secured term loan B2 (TLB).
The outlook is changed to negative from stable.
The rating action follows the announcement by Boels of its proposed
acquisition of Riwal, a Netherlands-headquartered specialist aerial
work platforms provider with operations in 14 countries and revenue
of around EUR310 million.
RATINGS RATIONALE
The rating affirmation reflects Boels' operating performance in
2023 which has been good with a 6% increase in both revenue and
EBITDA coming from double digit growth in Central Europe. This
strong growth was offset by foreign currency volatility and
residential construction market downturn in the Nordics. As of
2023, leverage (Moody's adjusted gross debt/EBITDA) was at 3.6x,
EBITDA/interest expense was strong at 5.1x while free cash flow
(FCF) to debt was negative at 12% due to capex investments and
one-off working capital outflow due to timing of capex delivery and
payment.
The acquisition of Riwal will allow Boels to strengthen its
existing market position and enter new markets in terms of
equipment type, end-market customer and geographical reach such as
Spain, France and Croatia, which is in line with Boels' strategy of
becoming the leading equipment rental company in Europe.
Boels announced that it has already put in place a EUR200 million
one-year bridge facility which is expected to be refinanced with
longer-term funding in due course to fund this acquisition. Moody's
considers that the transaction will result in a re-leveraging of
the business from a level that was already high as of the end of
2023 and outside the maximum 3.5x threshold set for the Ba3 rating.
Moody's expects leverage to decline only gradually in 2024 and 2025
as Boels delivers moderate organic EBITDA growth and integrates
Riwal into its operations to generate operational synergies such as
IT systems integration, better pricing power, shared fleet and
better location management. FCF/debt is expected to improve to
breakeven levels by 2024 as the company reduces its fleet
investments.
The rating affirmation also factors in the refinancing of the
bridge facility with longer-term funding in due course and any
delay in accessing the capital markets will put further negative
pressure on the rating.
ESG CONSIDERATIONS
Governance is a key consideration in this rating action as this
debt funded acquisition signals towards a financial policy that
tolerates higher leverage beyond the company's target leverage of
3.0x-3.5x (company reported net debt/EBITDA was already 3.5x as of
end of 2023 before the impact of this acquisition). On the other
hand, Boels' new governance practice to be put in place later this
year which will have at least majority of independent board of
directors is a mitigant to its governance risk.
OUTLOOK
The negative outlook reflects Moody's expectation that leverage
will remain above 3.5x for at least the next 18 to 24 months
following this debt funded acquisition leaving limited headroom for
underperformance. Moody's would consider stabilizing the outlook if
Boels delivers an improvement in earnings such that
Moody's-adjusted leverage returns to or below 3.5x within the next
18 months suggesting a good underlying earnings growth, a
successful integration of Riwal, and significantly lower M&A
activity during this process.
LIQUIDITY
Moody's considers Boels' liquidity to be adequate supported by cash
balance of EUR42 million and undrawn RCF of EUR214.3 million as of
December 31, 2023. Moody's expects that the company will generate
limited but positive FCF in 2024 and 2025. Boels has partially
hedged the interest rate exposure of around 80% of its debt which
Moody's view as prudent. The nearest debt maturity is the EUR200
million bridge facility which matures in one year but Moody's
expects Boels to refinance this shortly with long term funding. The
next maturity is the RCF which matures in 2026.
STRUCTURAL CONSIDERATIONS
The PDR is Ba3-PD, in line with the CFR, reflecting Moody's
assumption of a 50% family recovery rate. The backed senior secured
notes, senior secured RCF and senior secured TLB are all pari passu
and rated Ba3, in line with the CFR.
As part of the documentation, the Senior Facility Agreement ("SFA")
contains a maintenance covenant based on net leverage set at 6.5x.
Moody's expects Boels to maintain ample headroom under this
covenant.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Positive pressure on the rating could occur if: (i)
Moody's-adjusted leverage declines below 2.5x on a sustainable
basis; (ii) liquidity is consistently good, with positive FCF/debt
approaching 10%; and (iii) its business profile continues to
improve through the successful integration of Riwal by increasing
market share, earnings and diversification of end-market exposure.
Negative pressure on the rating could occur if: (i) the company's
operational performance deteriorates; (ii) Moody's-adjusted
leverage remains above 3.5x on a sustained basis, (iii) the
integration of Riwal and subsequent EBITDA margin improvement takes
longer than expected or (iv) FCF is consistently negative such that
liquidity deteriorates.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Equipment and
Transportation Rental published in February 2022.
COMPANY PROFILE
Headquartered in Netherlands, Boels is a leading European provider
of generalist and specialist rental equipment. Boels was founded in
1977 by Pierre Boels Sr. His son Pierre Boels Jr. is its Chief
Executive Officer since 1996 and owns 100% of the company. Boels
generated EUR1.6 billion of revenue and EUR547 million of Moody's
adjusted EBITDA in 2023.
INTERCEMENT FINANCIAL: Fitch Affirms 'C' LT Sr. Unsec Notes Rating
------------------------------------------------------------------
Fitch Ratings has affirmed InterCement Participacoes S.A.
(InterCement) and InterCement Brasil S.A's Long-Term Local and
Foreign Currency Issuer Default Ratings (IDRs) at 'C'. Fitch has
also affirmed the National Long-Term Credit Rating at 'C(bra)', and
the 2024 notes issued by InterCement Financial Operations BV at
'C'/'RR4'.
The ratings reflect InterCement's 'standstill status' while
continuing to negotiate its debt-restructuring plan. The company
has already announced that it has hired a financial advisor to
evaluate strategic alternatives, such as private placement, merger,
or partnership with a strategic player, or even a potential full
divestment. At this time, Fitch has limited visibility of
InterCement`s future performance - given the uncertainties around
the final asset-sale structure and the remaining operating cash
flow basis.
KEY RATING DRIVERS
Standstill Status: InterCement has announced two renewals of its
standstill agreement with local debentures holders since 2Q23, with
the current maturity at May 2024. As of Sep. 30 2023, its local
debentures were USD893 million, out of a total debt of USD1.8
billion, per Fitch's calculations. The debentures have the shares
of Loma Negra C.I.A.S.A (Loma Negra), its 51% owned Argentinean
subsidiary, as collateral. The debentures are due in 2027 but hold
the option to anticipate a maturity to May 2024, before its
unsecured bonds (USD549 million) due July 2024, if the latter is
not refinanced.
Challenge to Complete Refinancing: InterCement has tried to find
alternatives to boost its holding and Brazilian capital structures
over the last few years. It raised USD272 million with an asset
sale (14% total debt) in 2023 (USD232 million during December), and
this is likely be used to prepay debt. As of Sep. 30 2023,
InterCement had USD158 million of cash and USD1 billion as
short-term debt, including USD549 million of the unsecured notes,
USD194 million of local debentures, and USD73 million of senior
notes in Argentina).
Shrinking Portfolio: InterCement completed three non-core asset
sales in different geographies during 2023, closing the year with
operations only in Brazil and Argentina. The company sold its
operations in Egypt, Mozambique and South Africa. The Brazilian and
Argentine operations represented around 35% and 53%, respectively,
of consolidated adjusted EBITDA (USD476 million) in 2022, and the
other three countries contributed 11% (USD52 million).
Despite highly volatile macroeconomic scenarios and
currency-control restrictions in Argentina, InterCement was able to
benefit from Loma Negra's strong operating cash flow generation and
unleveraged capital structure. Loma Negra distributed around USD246
million of dividends during 2022 and 2023. The subsidiary generates
on average around 55% of InterCement's consolidated adjusted EBITDA
but holds only 13% of the net debt.
Unsustainable Capital Structure: On a proforma basis, incorporating
the asset sale of South Africa and Mozambique, InterCement's net
debt to adjusted EBITDA would be approximately 9.1x (excluding Loma
Negra), per Fitch's calculations. On a proportional basis,
excluding the 49% of Loma Negra that InterCement does not own,
leverage stood at 4.8x as of LTM Sep 30 2023, per Fitch`s
calculations. These levels show a deterioration from the past two
years, with an average of 3.9x in 2021 and 4.4x in 2022,
respectively. On consolidated basis, InterCement proforma leverage
was 5.7x in Sep 30 2023, 3.8x in 2022 and 3.0x in 2021.
DERIVATION SUMMARY
InterCement's rating reflects its standstill status, pending
negotiations for a full debt restructuring with creditors.
KEY ASSUMPTIONS
- Brazilian and Argentinian volumes to have declined marginally in
2023.
- Capex levels around USD125 million in 2023.
- Dividends to minorities and preferred shareholders of around
USD65 million in 2023.
KEY RECOVERY RATING ASSUMPTIONS
Going-Concern (GC) Approach
The GC EBITDA estimate reflects Fitch's view of a sustainable
post-reorganization EBITDA, excluding Loma Negra and allowing
InterCement to cover maintenance capex and interest. The enterprise
value (EV)/EBITDA multiple applied is 5.0x, reflecting
InterCement's a mid-cycle multiple, considering its strong market
share in Brazil and Argentina.
Fitch applies a waterfall analysis to the post-default EV based on
the relative claims of the debt in the capital structure. The debt
waterfall assumptions consider the company's proforma total debt.
These assumptions result in a recovery rate for the unsecured bonds
within the 'RR2' range, but due to the soft cap of Brazil at 'RR4',
InterCement's senior unsecured are rated at 'C'/'RR4'.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Proactive steps by the company to bolster its capital structure
significantly, including asset sales, allowing a smooth refinancing
of its capital-market debt without a material reduction in terms.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- An uncured payment default on any material financial obligation
would lead to a downgrade of the IDRs to 'RD'.
The completion of a proposed exchange offer would lead to a
downgrade of the Long-Term IDRs to 'RD'. The IDRs would be
subsequently upgraded to a rating level reflecting the
post-distressed debt exchange (DDE) credit profile.
LIQUIDITY AND DEBT STRUCTURE
High Refinancing Risks: As of Sep. 30 2023, InterCement had USD158
million of cash and USD1 billion as short-term debt, including
USD549 million of unsecured notes, USD194 million of local
debentures and USD73 million of senior notes in Argentina.
Remaining debt maturities includes USD116 million due 4Q24, USD305
million in 2025, USD288 million in 2026 and USD117 million in
2027.
ISSUER PROFILE
InterCement is a large cement producer with 15 million tons of
total consolidated cement sales during 2022 and annual production
capacity of 19 million tons, considering only its currently
operations in Brazil and Argentina.
ESG CONSIDERATIONS
InterCement has an ESG Relevance Score of '4' for Governance
Structure due to limited board independence through ownership by
key shareholder Mover Participacoes S.A. This has a negative impact
on the credit profile and is relevant to the ratings in conjunction
with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
InterCement
Financial
Operations BV
senior
unsecured LT C Affirmed RR4 C
InterCement
Brasil S.A. LT IDR C Affirmed C
LC LT IDR C Affirmed C
Natl LT C(bra)Affirmed C(bra)
InterCement
Participacoes
S.A. LT IDR C Affirmed C
LC LT IDR C Affirmed C
Natl LT C(bra)Affirmed C(bra)
=========
S P A I N
=========
BOLUDA TOWAGE: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has assigned Boluda Towage S.L.'s (Boluda) new
EUR1,100 million senior secured term loan B (TLB) maturing in
January 2030 an expected rating of 'BB(EXP)'. It has also affirmed
Boluda's Long-Term Issuer Default Rating (LT IDR) and existing
EUR890 million TLB maturing in July 2026 at 'BB'. All the Outlooks
are Stable. Fitch expects the new TLB to replace the existing
facility.
The assignment of the final rating is contingent on the receipt of
final documents conforming to information received.
RATING RATIONALE
The ratings reflect Boluda's fairly high leverage, and its
single-bullet debt structure, which entails significant refinancing
risk. It also reflects stable cash flow generation resulting from a
geographically diversified portfolio of operations with a solid
presence in some markets where it is the sole operator (above 75%
of consolidated EBITDA).
The TLB will be used to refinance the existing TLB and to fund a
reorganisation of the group, including the integration of other
towage businesses and some expected acquisitions into the
ringfenced perimeter. Overall, Fitch views the transaction as
credit-neutral due to a broadly unchanged business profile and
gross leverage metrics.
KEY RATING DRIVERS
Diversified and Resilient Volumes
Volume Risk: 'High Midrange'
Boluda will be present in almost 25 countries, operating more than
90 ports and terminals upon transaction closing. Fitch expects
volume performance to be more stable in markets where Boluda is the
sole operator (above 75% of EBITDA) than in markets with
competition. Revenue performance has been solid since 2008, while
demand volatility has been moderate, with a peak-to-trough in
volumes between -9% and -13% for Spain, France and Africa (on a
like-for-like basis). In 2020, during the Covid-19 crisis, volume
fell an overall 6%, as ports remained fairly resilient during this
period.
The main threats to Boluda are implementation of measures to
facilitate competition in markets where it is sole operator, or
further consolidation in the towage services industry, which may
attract large competitors with the financial resources to make the
required investments to operate in bigger ports.
Limited Flexibility on Tariffs
Price Risk: 'Midrange'
Boluda signs global or regional agreements with most of its clients
that include discounts on tariffs to encourage the use of its
services in ports where it faces competition. These agreements
account for about 55% of revenue. The average discount differs by
client and type of contract. This gives Boluda some flexibility, as
it might be able to renegotiate the terms of the contract if the
tariff is significantly reduced, or renegotiate the discount in the
next contract renewal.
Young Fleet, Self-Funded Capex
Infrastructure Development and Renewal: 'Stronger'
Boluda has a well-maintained and modern fleet (average life of 16
years compared with 45-50 years of useful life). Maintenance needs,
timing and capital planning are well-defined, based on its
long-term experience. Capex plan is self-funded, and includes the
acquisition of new fleet. Also, Boluda has shown significant capex
flexibility during downturns.
Refinancing and Interest Rate Risk
Debt Structure: 'Weaker'
Boluda's new TLB is fully exposed to interest-rate risk.
Significant exposure to the refinancing of the bullet structure
further weighs on its assessment. The covenant package is looser
than in a traditional project-finance debt structure. It has no
financial default covenants, and the structure only benefits from a
springing leverage financial covenant for the protection of
revolving credit facility (RCF) lenders.
Boluda has flexibility regarding additional financial indebtedness,
as it could increase leverage more than 1x above net debt/EBITDA as
calculated under the finance documentation at closing, with a
basket of other permitted financial indebtedness.
Financial Profile
Under the updated Fitch Rating Case (FRC), Boluda's gross leverage
increases in 2024 following the transaction, and remains stable at
about 5.0x for 2025-2028, which is consistent with its 'BB' rating.
However, leverage is highly sensitive to moderate stresses of tug
moves and prices.
Fitch expects the group's cash flow post-capex to remain positive
under the FRC. Liquidity position is comfortable for the next three
years, with no bullet maturities until 2030. Also, its RCF has been
increased to EUR110 million from EUR90 million, and its maturity
extended to July 2029.
PEER GROUP
EP BCo S.A. (Euroports; BB-/Negative) has a similar debt structure
to Boluda, which is common for leveraged-finance transactions, with
weak structural features. However, Boluda benefits from better
geographic and cargo diversification, stronger resilience in its
historical volumes, and lower leverage, resulting in the higher
rating.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Gross debt/EBITDA above 5.5x on a sustained basis
- Deterioration in the business profile as a consequence of
decreasing weighted average concession and license life, increased
competition in main markets affecting margin stability, or
decreasing EBITDA generated in markets where Boluda is sole
operator
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Gross debt/EBITDA below 4.5x on a sustained basis
TRANSACTION SUMMARY
The upsized TLB debt will be used to finance three acquisitions,
one already closed (Gibraltar-based Resolve Salvage and Fire Ltd)
and two expected to be closed in the next two-to-three months.
Also, Boluda plans to incorporate three existing group towage
businesses - BT Asia, MedTug and LatamDos - into the rating
perimeter. These additions are expected to increase EBITDA by about
25%, resulting in only a marginal increase in gross debt/EBITDA.
Fitch views the overall transaction as neutral for the rating as
the business risk profile and gross leverage remain comfortably
within their existing rating sensitivities.
CREDIT UPDATE
Boluda's volumes in 2023 increased 5% while average rates rose 3%.
Performance continued to benefit from a favourable traffic mix and
pass-through of some costs onto rates. Revenues and EBITDA
increased about 10%.
Boluda's liquidity position is solid. Given the single bullet
nature of its new TLB it has no refinancing needs until 2030.
It continues to renew successfully licenses and concessions, and
the overall weighted average license and concession life remains
fairly stable.
FINANCIAL ANALYSIS
Its FRC forecasts an increase in volumes in line with the GDP of
the main countries where Boluda operates, and prices to remain at
current levels.
Fitch expects additional costs in 2024 to reflect execution risks
related to the acquisitions and the inclusion of other group
companies into the rating perimeter (ie., integration costs,
one-offs or additional operating spending), and thereafter for
personnel costs and other operating spending to rise faster than
inflation, in line with management expectations. Fitch forecasts
EBITDA margin to slightly decrease over 2024-2028, as costs grow
faster than revenues.
Summary of Financial Adjustments
Finance and operating leases are captured as an operating expense,
reducing EBITDA.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Boluda Towage, S.L. LT IDR BB Affirmed BB
Boluda Towage,
S.L./Project
Revenues - Senior
Secured Debt/1 LT
EUR 1.1 bln Term
Loan B LT BB(EXP)Expected Rating
Boluda Towage,
S.L./Project
Revenues - Senior
Secured Debt/1 LT LT
EUR 890 mln
Floating EURIBOR
3.5% Term Loan B
30-Jul-2026 LT BB Affirmed BB
IM BCC 3: DBRS Hikes Series B Notes Rating to BB(low)
-----------------------------------------------------
DBRS Ratings GmbH took the following credit rating actions on the
notes issued by IM BCC Cajamar PYME 3 FT (CJP3):
-- Series A Notes confirmed at AAA (sf)
-- Series B Notes upgraded to BB (low) (sf) from B (low) (sf)
The credit rating on the Series A Notes addresses the timely
payment of interest and the ultimate repayment of principal on or
before the legal final maturity date in June 2057. The credit
rating on the Series B Notes addresses the ultimate payment of
interest and principal on or before the legal final maturity date.
The credit rating actions follow an annual review of the
transaction and are based on the following analytical
considerations:
-- The portfolio performance, in terms of level of delinquencies
and defaults, as of the February 2024 payment date;
-- The one-year base-case probability of default (PD) and default
and recovery rates on the outstanding receivables; and
-- The current available credit enhancement to the notes to cover
the expected losses at their respective credit rating levels.
The transaction is a cash flow securitization collateralized by a
portfolio of secured and unsecured loans originated and serviced by
Cajamar Caja Rural S.C.C. (Cajamar) to small and medium-size
enterprises (SMEs) and self-employed individuals based in Spain.
The transaction closed in April 2021.
PORTFOLIO PERFORMANCE
The portfolio is performing within Morningstar DBRS' expectations.
As of February 2024 payment date, the 90-plus-day delinquency ratio
was 0.99%, stable from 1.03% at the time of the last annual review.
The cumulative defaults stood at 1.1% of the original balance.
PORTFOLIO ASSUMPTIONS AND KEY DRIVERS
Morningstar DBRS conducted a loan-by-loan analysis of the remaining
pool of receivables and updated its default rate and recovery
assumptions on the outstanding portfolio to 39.1% and 30.1%,
respectively, at the AAA (sf) credit rating level, and to 13.5% and
42.6%, respectively, at the BB (low) (sf) credit rating level.
Morningstar DBRS updated its one-year base-case PD to 2.6%, based
on the updated portfolio composition.
CREDIT ENHANCEMENT
The credit enhancement available to the notes has increased as the
transaction deleverage. As of the February 2024 payment date, the
credit enhancement available to the Series A Notes and Series B
Notes increased to 68.4% and 7.9%, respectively, compared with
47.3% and 5.5%, respectively, one year ago.
Credit enhancement is provided by the subordination of the Series B
Notes and the reserve fund. The reserve fund was funded at closing
through a subordinated loan and is available to cover senior fees
and interest and principal on the Series A Notes and, once the
Series A Notes are fully amortized, interest and principal on the
Series B Notes. The reserve fund does not amortize through the life
of the transaction and remains at its target level of EUR 30.0
million.
Interest and principal payments on the Series B Notes are
subordinated to the interest and principal payments on the Series A
Notes.
Banco Santander S.A. (Santander) acts as the account bank for the
transaction. Based on the account bank reference rating of A (high)
on Santander (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 structure, Morningstar DBRS considers
the risk arising from the exposure to the account bank to be
consistent with the ratings assigned to the notes, as described in
Morningstar DBRS' "Legal Criteria for European Structured Finance
Transactions" methodology.
Notes: All figures are in euros unless otherwise noted.
LORCA TELECOM: S&P Ups Rating to 'BB' on Close of Joint Venture
---------------------------------------------------------------
S&P Global Ratings raised its rating on the JV's intermediate
parent Lorca Telecom Bidco S.A.U. (MasMovil) to 'BB' from 'B', as
well as its ratings on the group's senior secured debt to 'BB+'
from 'B', and on its unsecured notes to 'B+' from 'CCC+'.
The stable outlook reflects S&P's expectation that adjusted debt to
EBITDA will decline toward 5x and free operating cash flow (FOCF)
will improve toward 5% over the next 12 months, with sound
deleveraging prospects thereafter supported by a conservative
financial policy.
The merger of Lorca Bidco (MasMovil's) with Orange's Spanish
operations completed on March 26, 2024, after the joint venture
(JV) had received regulatory approval from the European Commission
and local authorities earlier this year.
The merged group is one of the largest telecom operators in Spain,
with high market shares in the customer segment, a sound
business-to-business position, and improved asset ownership.
S&P said, "Our rating on the combined group reflects our view of
the JV's 'bb-' stand-alone credit profile and moderately strategic
status to the Orange group. We consider the JV's credit profile has
improved compared with that of MasMovil on a stand-alone basis,
supported by a stronger competitive position in the challenging
Spanish market, its larger scale and diversity of operations, and
improved asset ownership. At the same time, we believe it is
constrained by high leverage at the transaction's close, at about
5.5x on an S&P Global Ratings-adjusted basis. We also consider the
group faces some execution risks arising from the integration of
two large, complex businesses with broad brand portfolios, as well
as risks arising from the fact that their ability to share
information before closing was restricted by their positions as
competitors.
"Our rating on the combined group also reflects our view that it is
moderately strategic to Orange S.A. (BBB+/Stable/A-2). This is
because we understand Spain is an important market to the French
telecom operator's strategy--it is its biggest geography outside of
France--its position as the largest single shareholder in the JV
(at 50%), and its option to acquire an additional 1% stake in the
group should it pursue an IPO in the future. This would in turn
lead to direct control and the consolidation of the JV's financials
into Orange's group accounts.
"We believe the Spanish telecom market is in flux, adding
uncertainty to its competitive dynamics in the longer term. In the
short term, the consolidation of MasMovil and Orange Spain will
lead to a decline in the competitive pressures the operators faced
from each other over the last few years, characterized by high
churn and pressure on average revenue per user (ARPU). That said,
over the medium term, we believe it will also strengthen Digi, now
fourth-largest operator behind the JV, Telefonica, and Vodafone, as
it will receive the remedies from the merger in the shape of mid-
and high-band spectrum and the option to enter into a national
roaming agreement with the JV in 2026. Vodafone Spain's ongoing
change in ownership could also lead to a pick-up in competition
over the medium term. Vodafone's new management will focus on
reversing the trend of declining customers in its premium brand,
while continuing to expand its value-oriented offering.
"We expect the group will focus on deleveraging through earnings
growth and debt amortization. We estimate the JV's starting
adjusted debt to EBITDA at about 5.5x, reflecting a high debt
burden comprising EUR12 billion in financial debt and lease
liabilities of about EUR3.6 billion (including our adjustment for
master service agreements). That said, we anticipate leverage to
fall to 5.2x by the end of 2024, and toward 4.5x by 2025. The group
is committed to reducing its leverage to below 3.5x over the medium
term, which translates into S&P Global Ratings-adjusted debt to
EBITDA of about 4.0x under our methodology."
Mandatory amortization under the new EUR4.35 billion term loan A
(starting in the second half of 2024), as well as FOCF generation,
will help the group reduce its debt burden over the same period.
S&P forecasts EBITDA growth will also support deleveraging,
especially from 2025, as the group gradually releases opex
synergies of about EUR350 million (out of a total EUR490 million
run-rate, including capex synergies and excluding any commercial
synergies) over the four years from closing.
S&P said, "The JV's advanced stage in the investment cycle should
allow for improving FOCF. We forecast a decline in capital
expenditure (capex) as a percentage of sales to about 15% over the
next two years, down from a high of about 21% in 2021. We believe
this will lead to improving FOCF to debt toward 8%-10% over the
same period. High penetration of fiber-to-the-home infrastructure,
strong spectrum ownership, and the gradual rollout of 5G mobile
connectivity explain the group's declining capex needs, which will
also be aided by the release of about EUR145 million of synergies
over the four years from closing.
"We believe the integration presents execution risks that could
delay the JV's deleveraging.The integration of MasMovil and Orange
Spain's businesses will present a high degree of operational and
financial complexity, given their large size and complex
operational structures. This could lead to increased customer
churn, resulting in lower revenue and a weaker earnings profile
than currently anticipated over the next few years, and delayed
deleveraging. We also note that the combined group will not produce
audited consolidated financial statements until year-end 2024,
which could bring changes to our calculations of the JV's adjusted
credit metrics.
"The stable outlook reflects our expectation that adjusted debt to
EBITDA will decline toward 5x and FOCF will improve toward 5% over
the next 12 months, with sound deleveraging prospects thereafter
supported by a conservative financial policy."
Downside scenario
S&P said, "We could lower our rating on MasMovil if debt to EBITDA
remained materially above 5x on a sustained basis. This could arise
from issues in the execution of the combination of the two
businesses, release of synergies, or due to intense competition,
which could hamper earnings and FOCF. We could also lower our
rating on MasMovil if we considered it as no longer moderately
strategic to the Orange group."
Upside scenario
S&P said, "Although unlikely in the next 12 months, we could raise
our rating on MasMovil if debt to EBITDA fell below 4.5x faster
than currently anticipated. This could result from stronger
operating performance, including strong revenue growth, improving
profitability, and the release of additional synergies, leading to
stronger earnings and higher FOCF than in our forecast.
"We could also raise our ratings on MasMovil if we considered that
extraordinary support from the Orange group is increasingly likely,
leading to a revision of our assessment of MasMovil's status to
Orange."
ESG factors are an overall neutral consideration on our credit
rating analysis of MasMovil.
===========
S W E D E N
===========
IGT HOLDING III: Moody's Affirms 'B2' CFR, Alters Outlook to Neg.
-----------------------------------------------------------------
Moody's Ratings changed IGT Holding III AB's (IFS or the company)
outlook to negative from stable. Concurrently, Moody's has affirmed
IFS' B2 long term corporate family rating and B2-PD profitability
of default rating, as well as the B2 ratings of the backed senior
secured revolving credit facility (RCF), backed senior secured
acquisition loan facility and backed senior secured term loans
issued by IGT Holding IV AB. The outlook on IGT Holding IV AB was
also changed to negative from stable.
RATINGS RATIONALE
The rating action balances IFS' continued weak free cash flow (FCF)
generation on a Moody's-adjusted basis, that has consistently been
below Moody's expectations for its B2 CFR, notwithstanding the
improvements over the past 18 months. The rating agency expects
that IFS' Moody's-adjusted FCF/debt will continue to improve
towards the levels commensurate with the current rating over the
next 12 to 18 months. However, execution risks associated with the
solid growth expectations may continue to delay the improvement of
FCF generation to around 5% of Moody's-adjusted debt in 2025 and
therefore could lead to a downgrade.
According to preliminary financials, IFS' reported revenue
increased 29% to above EUR1 billion and company adjusted EBITDA
increased to EUR331 million during 2023. The company's FCF
generation in 2023 was positive at EUR22 million, or 1.2% of
Moody's-adjusted debt, an improvement from the negative FCF of
around EUR-40 million during 2022, but well below the expectation
for the B2 rating of Moody's-adjusted FCF/debt of above 5%.
Moody's expects IFS' revenue to grow at a double digit cumulative
annual growth rate over the next two years and Moody's-adjusted
EBITDA margin to expand to 30.6% in 2025 from 28.9% in 2023. From a
cash flow perspective, the rating agency expects that the
transition to the subscription model will lead to continued outflow
from net working capital in the coming years, which will in turn
continue to impact FCF generation. The expected continued negative
working capital outflow is primarily a result of the upfront
recognition of the license element on certain contracts (in line
with IFRS), whereas cash is collected throughout the duration of
the contract. Overall, the rating agency forecasts Moody's-adjusted
FCF/debt to improve to around 5% by 2025, the lower end of the
expectations for a B2 rating.
The affirmation of IFS' B2 CFR considers its leading market
positions in defined industry verticals; high renewal rates and
growing recurring revenue; the company's ability to provide more
tailored solutions as a specialised provider; the opportunities for
further continued growth and margin expansion as the proportion of
consulting revenue declines with the continued expansion of its
partner network; and adequate liquidity and low refinancing risk.
Concurrently, and additionally to the weak FCF generation, IFS' B2
CFR is constrained by the company's scale as a medium-sized
provider of operational enterprise application software with a
focus on defined industry verticals; the challenges associated with
competing with larger enterprise software providers, particularly
for large global customers; and the risk that debt-financed
acquisitions or shareholder distributions could increase leverage.
RATING OUTLOOK
The negative rating outlook reflects the execution risks associated
with the expected solid growth and consequent improvement in FCF
generation to levels in line with the expectation for the B2
rating.
LIQUIDITY
IFS has adequate liquidity, supported by cash on balance sheet of
EUR140 million as of December 2023, EUR122 million available
liquidity under its SEK2,350 million RCF due in 2027, and Moody's
expectation of positive FCF generation. The RCF contains a
springing net leverage covenant set at a level of 9.67x, tested
quarterly if the RCF is drawn more than 40% for working capital
purposes. The agency does not currently expect a breach under the
backed senior secured RCF covenant.
STRUCTURAL CONSIDERATIONS
The B2 instrument ratings of IFS are in line with the CFR,
reflecting the pari passu capital structure comprising the EUR520
million guaranteed senior secured term loan B1, the EUR67 million
guaranteed senior secured acquisition facility, the outstanding
$700 million guaranteed senior secured term loan B2 and the EUR539
million guaranteed senior secured term loan B3. Guarantors for the
facilities Moody's rate represent at least 80% of EBITDA, and the
security package comprises shares, bank accounts, intercompany
receivables, and, where possible, a general and floating charge
over assets.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the current disconnect between EBITDA and FCF based metrics,
Moody's believes the FCF metric is key to assessing the fundamental
underlying economics of the business at this time. The outlook
could be stabilised if and when there is a clear view that the
company is able to improve Moody's-adjusted FCF/debt to above 5% by
2025.
Although unlikely at this stage, positive rating pressure could
develop if the company continues to growth its revenue, EBITDA and
FCF generation, such that Moody's-adjusted FCF/debt improves
towards 10%; Moody's-adjusted leverage (R&D capitalised) improves
to below 5.0x; and Moody's-adjusted (EBITDA – capital
expenditures) / interest expense improves towards 3.0x, all on a
sustained basis. Adequate liquidity and financial policy clarity
are also important considerations.
Further negative rating pressure could develop if the company's
revenue, EBITDA growth is weaker than expected such that the rating
agency no longer expects Moody's-adjusted FCF/debt to improve to
above 5% by 2025, Moody's-adjusted leverage (R&D capitalised) does
not improve to well below 6.0x; or Moody's-adjusted (EBITDA –
capital expenditures)/ interest expenses is below 2.0x, all on a
sustained basis; or if liquidity deteriorates.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Software
published in June 2022.
COMPANY PROFILE
IFS is an enterprise software provider with a focus on enterprise
asset management (EAM), field service management (FSM) and
enterprise resource planning (ERP) solutions. The company serves
defined industry verticals, including manufacturing, aerospace and
defence, energy and utilities, service companies and construction.
EQT Partners (EQT) acquired a controlling stake in the company in
2015, which was followed by a full delisting and take-private in
2016. In 2020, EQT sold IFS from its fund VII to its funds VIII and
IX for an enterprise value of more than EUR3.0 billion, and TA
Associates (TA) became a minority shareholder of the company. In
2022, EQT and TA sold a portion of their stake to Hg Capital, who
became the largest minority interest. The transaction was based on
a total valuation of IFS and Workwave of $10 billion and EQT
remained the majority shareholder.
In 2023, IFS generated revenue of EUR1.04 billion and
company-adjusted EBITDA of EUR331 million.
INTRUM AB: Fitch Lowers LongTerm IDR to B & Puts on Watch Negative
------------------------------------------------------------------
Fitch Ratings has downgraded Intrum AB (publ)'s Long-Term Issuer
Default Ratings (IDRs) and senior unsecured debt rating to 'B' from
'BB-' and simultaneously placed them on Rating Watch Negative
(RWN). Fitch has assigned recovery rating 'RR4' to Intrum's senior
unsecured bonds reflecting average recovery prospects.
The rating action reflects Fitch's view that following Intrum's
announcement that it has appointed advisors to "evaluate
improvements of its debt capital structure" the risk of a
distressed debt exchange (DDE) has increased. While Fitch
understands from management that they are assessing a broad range
of changes to its capital structure, including conventional
refinancing of its upcoming maturities in mid-2024 and 2025, the
increased likelihood of a material reduction in the terms of
Intrum's existing outstanding senior unsecured debt is no longer
commensurate with a Long-Term IDR at 'BB-'.
Intrum announced on 14 March 2024 that it has appointed Houlihan
Lokey and Milbank as advisors to "assist in an evaluation of
alternatives to strengthen the company's financial profile through
directly addressing its debt structure". According to Intrum, the
advisors have been asked to explore "refinancing and capital
structure enhancing options to ensure a long-term sustainable debt
structure for Intrum in line with the current business plan".
KEY RATING DRIVERS
Increased Risk of Debt Restructuring: The downgrade reflects its
view that the likelihood of a transaction Fitch would classify as a
DDE has increased. However, Intrum's financial profile, in
particular its cash generation capacity and liability structure,
remains currently sufficiently viable for management to evaluate
transactions that Fitch would not classify as a DDE. This has
prevented Fitch from a sharper downgrade.
While the likelihood of an exchange offer that will result in a
maturity extension of Intrum's existing debt or another material
reduction in terms has increased, Fitch would only classify the
transaction as a DDE if it is conducted to avoid a probable
bankruptcy, similar insolvency or intervention (including
resolution) proceedings or a traditional payment default, which is
currently not its base case.
Watch Negative: The RWN reflects the likelihood of a further
downgrade if Fitch concludes that the risk of a transaction Fitch
would classify as DDE has further increased. Fitch currently
believes that Intrum will find it challenging to access debt
capital markets in the short term to meet its EUR469 million bond
due in July 2024 and other debt of about EUR250 million-equivalent
(or 13% of gross debt). However, Fitch estimates that Intrum's
liquidity buffer (around EUR820 million, including an undrawn
revolving credit facility) and operating cash generation would
cover the 2024 debt maturities.
High Leverage: At end-2023, Intrum's gross debt/adjusted EBITDA
ratio (4.7x) was close to Fitch's threshold for the 'ccc and below'
category of 5x for capitalisation and leverage. Excluding items
classified by management as non-recurring, this ratio increases to
5.3x. In addition, the sale of around 30% of its portfolio to
Cerberus announced in January 2024 has moderately improved Intrum's
liquidity position but also increased its cash flow leverage in the
short term, and delayed reaching its medium-term leverage target
(net leverage of 3.5x or below) to 2026, from 2025.
Weakening Debt Coverage: Intrum is exposed to rise in funding costs
as 31% of its debt is at floating rates, while leverage is high.
Adjusted EBITDA/interest expense has weakened to 3.2x at end-2023,
close to Fitch's threshold of 'b' category of 3x for funding,
liquidity and coverage. Its finance costs/revenues and average cost
of funding increased to 18% and 6%, respectively, in 2023 from 12%
and 4%, respectively, in 2021.
Evolving Franchise: Intrum remains Europe's leading credit
management company with an equivalent of about EUR190 billion (at
notional value) third-party debt at end-2023, and a net book value
of its own portfolio of EUR3.2 billion (prior to sale of around
EUR1 billion, to be finalised in 1H24). However, its increasing
focus on debt servicing away from debt purchasing combined with its
currently constrained access to debt-capital markets could, in its
view, negatively affect its current franchise, which still benefits
from product and geographical diversification.
Under its revised strategy, Intrum intends to reduce its reliance
on debt-funded cash flow generation by reducing average annual
investments in distressed debt portfolios, exiting several smaller
markets and selling a portion of the portfolio, while maintaining
its servicing business.
Sound but Weakening Profitability: Adjusted EBITDA margin remained
sound at 45% in 2023 but has weakened from the previous four-year
average of 52% on rising collection and other costs. Collection
rates remain sound at around 5% of nominal value of third-party
debt and around 40% of book value of its own portfolio. However,
over-performance versus the company's active forecasts has declined
to 102% in 2023 from over 110% in previous years.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
A further increase in the likelihood of a debt restructuring that
Fitch would classify as a DDE would lead to a downgrade, likely to
'CCC' or below. If a DDE materialises, Fitch would then downgrade
the Long-Term IDR to 'C' and upon completion of the transaction to
'RD' (restricted default).
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
If the risk of DDE diminishes, for instance via a conventional
refinancing of the 2024 and 2025 debt maturities, in combination
with improved market confidence, Fitch would remove the Long-Term
IDR and senior unsecured debt rating from RWN with an affirmation.
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
Intrum's senior unsecured debt rating is equalised with the
Long-Term IDR, reflecting Fitch's expectation for average recovery
prospects, given that Intrum's funding is mostly unsecured.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
Intrum's senior unsecured debt rating is primarily sensitive to
changes to the Long-Term IDR.
Changes to its assessment of recovery prospects for senior
unsecured debt in a default (eg a material increase in debt ranking
ahead of the senior unsecured debt) could result in the senior
unsecured debt rating being notched down from the Long-Term IDR.
Close to full utilisation of its super-senior revolving credit
facility could trigger a downgrade of the bond rating by one
notch.
ESG CONSIDERATIONS
Intrum has an ESG Relevance Score of '4' for Financial
Transparency, in view of the significance of internal modelling to
portfolio valuations and associated metrics such as estimated
remaining collections. However, being a feature of the debt
purchasing sector as a whole, this has a moderately negative impact
on Intrum's credit profile and is relevant to the rating in
conjunction with other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Intrum AB (publ) LT IDR B Downgrade BB-
ST IDR B Rating Watch On B
senior unsecured LT B Downgrade RR4 BB-
SAMHALLSBYGGNADSBOLAGET: Fitch Cuts Sr. Unsec. Debt Rating to CCC+
------------------------------------------------------------------
Fitch Ratings has downgraded Swedish property company SBB -
Samhallsbyggnadsbolaget i Norden AB's (SBB) senior unsecured debt
rating to 'CCC+' from 'B'. Its Recovery Rating was revised to 'RR4'
from 'RR2'. Other SBB ratings were unaffected and all ratings
remain on Rating Watch Negative (RWN).
This senior unsecured rating downgrade reflects SBB's shrinking
unencumbered investment property pool, signifying lower recoveries
available to unsecured debtholders. Using figures after
end-December 2023 disclosures and updating these following
yesterday's offer for SEK2.5 billion of unsecured bonds (potential
prepayments) and assuming SBB's Castlelake joint venture (JV)
created encumbered investment property assets, the Recovery Rating
would be 'RR4'. Fitch assumes that some of the Castlelake net
proceeds totaling SEK5.2 billion are being reserved for SBB's June
2024 cash dividend.
Liquidity remains tight. Assuming no cash dividend in June 2024 nor
refinancing of secured debt, Fitch forecasts additional liquidity
will be required in 3Q24.
KEY RATING DRIVERS
Shrinking Unencumbered Investment Property Pool: SBB's unencumbered
investment property asset pool has shrunk considerably in the last
six months as the company has completed a number of disposals, the
largest of which was Nordiqus AB. This shrinking pool of relevant
assets signifies lower recoveries for unsecured creditors in a
liquidation. Updating figures after end-December 2023 disclosures,
Fitch calculates SBB's unsecured debt at about SEK40.6 billion
(end-2023: SEK43.5 billion) against unencumbered investment
properties of SEK29.8 billion (end-2023: SEK31.6 billion).
After also including the Castlelake proceeds and today's tender
offer potentially prepaying SEK2.5 billion on unsecured bonds Fitch
calculates SBB's unsecured debt could be SEK38.2 billion against
unencumbered investment properties of SEK20.5 billion. Fitch
assumes SBB will not prepay tendered hybrids.
Unreceptive Bond Market: SBB does not have capital-market access to
refinance its unsecured bonds. This is due to several factors,
including a bondholder contesting a covenant breach, the merits of
which are contentious and has now proceeded to legal process but
will take time to reach a judgement; creditors' concerns about real
estate values and their effect on SBB's residential and community
service portfolio when monetised as a 'distressed' seller; and
refinance risk. Without improved debt-market access, Fitch expects
SBB to sell assets to meet debt maturities.
New Asset-Backed Transaction: In February 2024, SBB announced a JV
with Castlelake, LP, called SBB Infrastructure AB, backed by about
SEK9.4 billion of its community service assets. Although details of
the transaction are still unclear, Fitch believes it also includes
a loan component. SBB Infrastructure will acquire SEK5.7 billion
worth of community service assets from SBB while an additional
SEK3.7 billion of (Fitch assumes previously unencumbered) assets
will be provided by SBB as collateral for the loan. Until details
are clear (hence the above assumptions) the senior unsecured rating
remains on RWN.
The Castlelake transaction underscores SBB's difficulty in
assessing the unsecured debt market for liquidity. As SBB enters
into this type of transactions, the unencumbered investment
property pool will continue to shrink until, ultimately, protection
from the group's secured debt/consolidated total assets covenant is
triggered (2023:18% versus covenanted 45%).
Ongoing Disposal Plans: SBB continues to undertake asset disposals
but execution risk remains high. In its 2023 results, SBB again
announced plans to sell its residential portfolio, thus raising
capital from an external equity contribution in 2024 (including an
IPO or strategic partnership). Proceeds would be used to reduce
leverage and repay debt. Income-producing assets are available to
sell, at a price. The Fitch-calculated loan-to-value (gross
debt/investment property assets) at end-2023 was 84%.
DERIVATION SUMMARY
The lower-yielding nature of SBB's residential rental portfolio and
longer lease length than peers' (from both community service assets
and given the average tenure of residential assets), plus its
portfolio mix, allow SBB more leverage headroom and lower interest
cover than that of both commercial property-orientated Swedish
peers and EMEA commercial property peers.
Fitch views SBB's real estate portfolio as stable, due to the
strength of Swedish residential properties with regulated
below-open market rents and the stable government-entity tenant
base with longer-term leases of community service properties. This
is tempered by the regional location of some assets within SBB's
portfolio. Its portfolio fundamentals are less sensitive to
economic cycles than commercial office property companies that are
reliant on open market conditions with multiple participants
affecting market fundamentals.
See its previous rating action commentaries for peer analysis
justifying the investment-grade quality of SBB's property portfolio
before Fitch downgraded its ratings for heightened refinancing
risk.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
- Disposals of primarily community service properties during 2023
amounting to SEK6 billion
- Moderate 2.5%-4% rental growth in 2023-2026, driven by CPI
indexation and moderate inflation
- Around SEK1 billion in residential and community service
refurbishment capex per year until its forecast horizon of 2027,
with a net 4%-6% income return on spend
- No acquisitions during 2024 - 2027
- Building-rights profits and disposal proceeds amounting to SEK0.8
billion-SEK1 billion per year in cash flow for the next four years
RECOVERY ANALYSIS
Its recovery analysis assumes that SBB would be liquidated rather
than restructured as a going concern in a default.
Recoveries are based on the end-December 2023 independent valuation
of the investment property portfolio. Fitch has deducted disclosed
encumbered assets to arrive at a total of around SEK29.8 billion of
unencumbered investment property assets. Fitch applies a standard
20% discount to these values. Fitch assumes no cash is available
for recoveries.
After deducting a standard 10% for administrative claims, in the
debt hierarchy Fitch deducted the recent SEK2.4 billion SBB
Residential Property AB preference shares, which rank ahead of
SBB's unsecured creditors. Therefore the total amount of assets
Fitch assumes available to unsecured creditors is around SEK19.1
billion. Fitch has updated outstanding debt after recent
financings, such as use of cash to repay remaining (untendered)
1Q24 maturing bonds.
Fitch's principal waterfall analysis generates a ranked recovery
for senior unsecured debt of 'RR4' (a waterfall generated recovery
computation output percentage of 47%) based on current metrics and
assumptions. The 'RR4' indicates a 'CCC+' unsecured debt instrument
rating.
Updating this for the Castlelake transaction and today's tender
offer assumptions, the total amount of assets available to
unsecured creditors after Fitch's standard 20% discount is around
SEK16.4 billion relative to unsecured debt of SEK38.2 billion.
Fitch's principal waterfall analysis generates a ranked recovery
for senior unsecured debt of 'RR4' (32%). The 'RR4' indicates a
'CCC+' unsecured debt instrument rating.
Given the structural subordination of SBB's hybrids, Fitch
estimates a ranked recovery of 'RR6' with 0% expected recoveries.
The 'RR6' band indicates a 'CCC-' instrument rating, two notches
below SBB's IDR.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
- Evidence that refinancing risk has eased, including improved
capital-market receptivity to SBB
- Successful disposal proceeds used to prepay 2025 and 2026 debt
maturities, and increasing liquidity
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- Lack of progress in refinancing secured bank funding
- Actions pointing to a widespread potential renegotiation of debt
terms and conditions, including any material reduction in lenders'
terms sought to avoid a default
- Further shrinking of the unencumbered investment property
portfolio relative to unsecured debt would lead to a further
downgrade of the senior unsecured rating
LIQUIDITY AND DEBT STRUCTURE
Tight Liquidity: SBB's available liquidity at end-2023 was SEK4.1
billion of cash. The previous SEK3.5 billion of available revolving
credit facilities are not available for drawdown. Post-3Q23 SBB
received Nordiqus disposal proceeds totaling SEK8 billion. The
November 2023 tender offer prepaid SEK4.7 billion of its 1Q24 debt
obligations while the remaining SEK1.8 billion was paid in January
2024.
Together with other disposal receipts and outflows, Fitch
calculates a potential liquidity shortfall during 3Q24, assuming
that banks do not roll over their secured facilities, and the 2022
postponed dividend is not paid in cash. This shortfall could be
post-3Q24 if banks roll over their secured exposures. SBB is
therefore reliant on further disposal proceeds to refinance debt
including 1Q25 scheduled bond maturities of SEK5.3 billion.
After including Fitch's Castlelake assumptions, today's tender
offer potentially prepaying SEK2.5 billion of near-term unsecured
bonds, the payment of June 2024 cash dividend payment (and hybrid
deferred interest), and assuming secured financings are not
refinanced, a liquidity shortfall is still likely in 3Q24 ahead of
its remaining untendered bonds in 1Q25.
ESG CONSIDERATIONS
SBB has an ESG Relevance Score of '4' for Governance Structure to
reflect previous key person risk (the previous CEO) and continuing
different voting rights among shareholders affording greater voting
rights to the key person.
SBB has an ESG Relevance Score '4' for Financial Transparency,
reflecting an ongoing investigation by the Swedish authorities into
application of accounting standards and disclosures.
Both these considerations have a negative impact on the credit
profile, and are relevant to the ratings in conjunction with other
factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
SBB –
Samhallsbyggnadsbolaget
i Norden AB
senior unsecured LT CCC+ Downgrade RR4 B
SBB Treasury Oyj
senior unsecured LT CCC+ Downgrade RR4 B
SAMHALLSBYGGNADSBOLAGET: S&P Lowers ICR to 'SD' on Tender Offer
---------------------------------------------------------------
S&P Global Ratings lowered to 'SD' (selective default) from 'CCC+'
its long-term issuer credit ratings on Swedish real estate company
Samhallsbyggnadsbolaget i Norden AB (publ) (SBB), and to 'D'
(default) from 'CCC+' its issue rating on the affected senior
unsecured debt. S&P also lowered to 'CCC' from 'CCC+' its ratings
on the senior unsecured notes due in 2025 and 2026, which are not
part of the tender acceptance allocation. In addition, S&P lowered
its issue ratings on the three euro-denominated subordinated bonds
to 'D' from 'C'.
On March 24, 2024, SBB announced the results of its tender offer.
It has allocated about EUR163 million in cash to the repurchase of
three euro-denominated hybrid subordinated notes and its senior
unsecured bonds due in 2027, 2028, and 2029 at prices well below
par. The nominal amount repurchased is EUR408 million.
S&P said, "Following the settlement of the transaction, we expect
to raise our ratings on SBB and the affected senior unsecured debt
to 'CCC'. We see heightened risk that the company could address its
debt by implementing another tender we would view as distressed,
within the next 12 months.
"The lenders that accepted SBB's tender offer will receive less
than they were originally promised and therefore we view the
transaction as a distressed restructuring, tantamount to a default,
under our criteria. SBB is repurchasing outstanding debt with a
nominal value of EUR408 million at such deep discounts that its
expected cash outflow is only EUR162.7 million. The affected debt
comprises its 2027, 2028, and 2029 senior unsecured notes and part
of three subordinated hybrid bonds, which have first optional call
dates in January 2025, December 2025, and October 2026. We
understand that the average price was about 60% to par and we
assume that the discount on the hybrid notes was deeper on the
senior notes. Therefore, we lowered to 'D' our issue ratings on the
2027, 2028, and 2029 senior notes and on the euro-denominated
hybrid notes.
"We lowered our ratings on the 2025 and 2026 notes that were not
subject to the tender offer to 'CCC' from 'CCC+'. Although we do
not consider these issuances to be defaulted, the potential for a
default on these instruments has risen. Even after the discounted
tenders on the other bonds, SBB's liquidity will be weak and it has
sizable short-term debt maturities. We expect to raise our ratings
on the 2025 and 2026 notes back to 'CCC' after the tender
transaction has been settled.
"SBB faces significant debt maturities, totaling about SEK10
billion, over 2024 and 2025. It also has limited access to capital
markets, in our view. As a result, we anticipate that SBB's capital
structure will remain unsustainable over the longer term until the
company can demonstrate an improved liquidity position and sustain
a stable capital structure. We consider asset sales to be SBB's
most likely means of reducing its leverage and managing the
maturity wall, although it could also seek access to diversified
funding sources. SBB has attracted some funding by selling equity
stakes in several of its asset portfolios, for example, the recent
Brookfield and Castlelake transaction. However, we see executing
such transactions as difficult and, in the current circumstances,
they carry a high degree of uncertainty.
"Although we lowered our ratings on SBB's subordinated hybrid bonds
to 'D', we still view them as having intermediate equity content.
We understand that SBB accepted about EUR234 million of tender
amounts from hybrid investors, spread across the three subordinated
notes, which each have a nominal value of EUR500 million. We assume
that the discount was deeper compared with the senior notes,
indicating a significant loss for its hybrid investors compared
with the original amount promises--and well above the loss accepted
by holders of the senior unsecured debt. Therefore, we still view
SBB's hybrids as loss-absorbing instruments with equity content up
to 15% of the capitalization rate (17% as of Dec. 31, 2023).
"Once the tender is settled, we will likely rate the subordinated
bonds at 'C', indicating that we see a high likelihood that the
company will defer payment of the coupon again within the next 12
months. In particular, we see deferral as likely after the second
quarter of 2024, when SBB is expected to pay its common dividend of
SEK2.1 billion. The remaining hybrids still have a sufficiently
long residual time to their effective maturity dates that we
consider them eligible for intermediate equity content. We consider
hybrids rated in the 'B' category or below to have intermediate
equity content if there are at least 10 years before their
effective maturity date."
The company has disposed of a large amount of assets over the past
12 months and its near-term operational strategy remains highly
uncertain. The value of the property portfolio owned by SBB
declined to about SEK73 billion at year-end 2023 from SEK135
billion at year-end 2022, due to its decentralized operational
strategy and because it has been selling assets to secure liquidity
and funding needs. S&P said, "We understand that SBB plans further
significant asset sales throughout 2024, which could depress the
company's business strength further and reduce rental cash flows.
Given the lack of clarity regarding the company's mature portfolio
and operations, we revised our business risk profile down to fair
from satisfactory."
=====================
S W I T Z E R L A N D
=====================
AVOLTA AG: Moody's Upgrades CFR to Ba2 & Alters Outlook to Stable
-----------------------------------------------------------------
Moody's Ratings has upgraded global travel retail leader Avolta
AG's corporate family rating to Ba2 from Ba3 and its probability of
default rating to Ba2-PD from Ba3-PD. Concurrently, Moody's has
upgraded to Ba2 from Ba3 financing subsidiary Dufry One B.V.'s
backed senior unsecured ratings. The outlook has been changed to
stable from positive for both entities.
The rating actions reflect:
-- Strong performance in 2023 and solid trading environment
continuing in 2024
-- The credit-enhancing and deleveraging acquisition of Autogrill
completed in 2023
-- A balanced financial policy, including a target of further
deleveraging
RATINGS RATIONALE
Avolta continued to grow strongly in 2023, recording organic
revenue growth of 22%. Moody's-adjusted EBITDA increased to around
CHF2.5 billion in 2023 from CHF1.6 billion a year earlier. Of this
increase, the rating agency estimates that around CHF230 million
was organic. It implies some modest like-for-like Moody's-adjusted
EBITDA margin erosion because of higher variable lease expenses and
Autogrill integration costs as well as minimum annual guarantee
(MAG) relief in 2022 not repeating in 2023. Nevertheless, these
results were ahead of Moody's expectations as travel demand
continued to recover during the year despite the weak economic
growth and high inflation. The company was also successful in
passing on higher product prices and labour costs to customers.
Moody's expects organic revenue growth to reach at least 5% in 2024
and 2025, reflecting Avolta's regional mix geared toward EMEA and
the Americas, for which traffic growth will be lower than the 9%
global air traffic growth forecast for 2024. Avolta plans to
realise an incremental CHF55 million of cost synergies from the
Autogrill acquisition in 2024 and additional cost efficiencies in
the normal course of business which Moody's expects will lead to
some margin improvements in the near-term.
The upgrades also reflect the conservative funding structure for
the Autogrill acquisition. While the all-share purchase of
Edizione's 50.3% stake in February 2023 was already captured in
Moody's 2023 upgrade of Avolta's CFR to Ba3, the company funded the
remainder of the purchase consideration without incurring new gross
debt. In fact, Avolta's financial gross debt excluding lease
obligations declined by over CHF200 million in 2023 while the
acquisition of Autogrill added Moody's-adjusted EBITDA of over
CHF600 million. More broadly, the Autogrill acquisition was
credit-enhancing, reflecting the increase in scale, product and
channel diversification as well as providing greater clout
vis-a-vis concession partners.
New concession awards reflect Avolta's competitiveness in tender
processes. A good illustration is the new 12-year concessions in
Spain for which the company has increased its space by 30% as well
as its product assortment. As a result, Avolta expects the Spanish
concessions to be profitable going forward whereas they have been
less profitable historically.
The new concessions, because of their long duration and MAG
contributed to pushing Avolta's lease liabilities up to CHF7.8
billion at the end of 2023. This compares to CHF3 billion a year
earlier (around CHF4.6 billion including Autogrill). As a result,
Moody's-adjusted gross debt/EBITDA was 4.6x in 2023 versus around
4.0x on a pro forma basis in 2022. The rating agency regards the
current leverage level as a temporary spike and forecasts that
Moody's-adjusted leverage will decline to below 4x by the end of
2024 and further in 2025 on the back of EBITDA growth and
amortisation of its long-dated lease liabilities.
More generally, the Ba2 CFR reflects Avolta's (i) leading position
in travel retail and food and beverage, with broad geographic and
product diversification, (ii) the long-term growth in air passenger
traffic which supports demand, (iii) historically stable
profitability and positive free cash flow generation, expected to
continue, and (iv) a balanced financial policy, including a
management-defined net leverage target of 1.5x-2.0x (2.6x at the
end of 2023).
Conversely, the CFR incorporates the following credit constraints:
(i) Avolta's dependence on air passenger traffic and exposure to
macroeconomic downturns and geopolitical tensions or health
concerns, (ii) the risk of non-renewal of concession contracts,
(iii) large labour expenses, whose increases the company may not be
able to pass on to consumers at all times, and (iv) exposure to
volatility of currencies from emerging markets.
LIQUIDITY
Moody's views Avolta's liquidity as good. It reflects the company's
unrestricted cash balance of CHF591 million at the end of 2023 and
its large EUR2.75 billion senior unsecured revolving credit
facility (RCF), of which CHF1.9 billion was available at December
2023. The RCF matures in December 2027 and Moody's expects Avolta
to maintain ample headroom under its net leverage and interest
cover covenants. Although it has sufficient liquidity to do so,
Dufry will need to address the maturity of its EUR800 million bond
due in October 2024.
STRUCTURAL CONSIDERATIONS
Avolta's capital structure consists of a mix of bonds and bank
debt. All the facilities are unsecured, rank pari passu and benefit
from guarantees from the material holding companies within the
group. As a result, all Ba2 instrument ratings are in line with the
Ba2 CFR.
RATIONALE FOR THE STABLE OUTLOOK
The stable outlook reflects Moody's expectation of ongoing organic
revenue and EBITDA growth, underpinned by steadily increasing air
passenger traffic globally. Further, the stable outlook assumes
deleveraging to below 4.0x Moody's-adjusted debt/EBITDA in the
short-term and materially positive FCF generation (after lease
repayments and all dividend distributions).
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade Avolta's ratings if (i) Avolta successfully
renews its concession contracts on an ongoing basis, maintains
organic revenue growth and at least a stable Moody's-EBITDA margin,
and (ii) Moody's-adjusted gross debt/EBITDA sustainably declines
toward 3.0x, and (iii) Avolta generates positive free cash flow
(FCF, after interest and dividends) and retained cash flow/net debt
is sustainably above 20%, (iv) while maintaining good liquidity and
addressing its debt maturities in a timely manner.
Conversely, downward pressure on Avolta's ratings could materialise
if revenue and EBITDA reduce on an organic basis, or (ii)
Moody's-adjusted leverage remains above 4x on a sustainable basis,
or (iii) FCF becomes negative and retained cash flow/net debt
reduces sustainably below 15%, liquidity weakens, or refinancing
risk increases, or (iv) Avolta adopts a more aggressive financial
policy, including debt-funded acquisitions or higher shareholder
distributions jeopardising positive cash generation.
The principal methodology used in these ratings was Retail and
Apparel published in November 2023.
COMPANY PROFILE
Headquartered in Basel, Switzerland, Avolta is the leading global
travel retailer. The company is present in 73 countries and
operates over 5,100 outlets, mostly in airports (350 locations,
around 80% of sales). Avolta had revenue of CHF12.8 billion in 2023
and is listed on the Swiss Stock Exchange with a market
capitalisation of CHF5.25 billion as of March 25, 2023.
===========
T U R K E Y
===========
ANADOLU ANONIM: Fitch Hikes IFS Rating to 'BB-', Outlook Positive
-----------------------------------------------------------------
Fitch Ratings has upgraded Anadolu Anonim Turk Sigorta Sirketi's
(Anadolu Sigorta) Insurer Financial Strength (IFS) Rating to 'BB-'
from 'B+'. The Outlook is Positive.
The upgrade follows a recent similar action on Turkiye's sovereign
ratings. The sovereign rating and its Outlook affect its assessment
of the industry profile and operating environment (IPOE) where the
insurer operates, Anadolu Sigorta's company profile and the credit
quality of its investment portfolio. The Positive Outlook reflects
that on Turkiye's sovereign rating.
The rating also reflects Anadolu Sigorta's 'Most Favourable'
business profile in Turkiye relative to other insurers', high asset
risk driven by its substantial exposure to Turkish assets, as well
as adequate capitalisation and profitability.
KEY RATING DRIVERS
Leading Turkish Insurer: Anadolu Sigorta's 'Most Favourable'
business profile, among Turkish insurers, is supported by the
company's very strong position in the country's highly competitive
insurance sector. Anadolu Sigorta was the third-largest non-life
insurer in Turkiye at end-2023, with a market share of about 10%.
Fitch expects the strong business profile to support the resilience
of Anadolu Sigorta's credit profile against the challenges posed by
the Turkish economy. Following the sovereign upgrade and the upward
revision of the IPOE, the company profile score improved to 'bbb-'
from 'bb+'.
Improved Investment and Asset Risk: Anadolu Sigorta is highly
exposed to domestic assets. Its investment portfolio largely
comprised deposits in Turkish banks and Turkish government bonds at
end-2023. The company's credit quality is therefore highly
correlated with that of Turkish banks and the sovereign. Although
assets risk remains its main rating weakness, following the
sovereign upgrade investment risk has improved due to higher
average investment credit quality and a lower risky assets ratio.
Improved Earnings: Anadolu Sigorta reported strong earnings at
end-2023 with net income of TRY5.9 billion (2022: TRY1.1 billion),
equivalent to a Fitch-calculated net income return on equity of 55%
(2022: 22%). The main driver of the improved earnings was increased
investment income as interest rates increased significantly in 2H23
and again increased to 45% in January 2024. Fitch expects this to
continue to provide support to Anadolu Sigorta's profitability in
2024.
Anadolu Sigorta's underwriting profitability is under pressure from
a very challenging operating environment. Its reported combined
ratio slightly improved to 119% in 2023 (2022: 132%) despite the
poor motor third-party (MTPL) performance, as other lines improved
their performance due to higher tariffs implemented in 2022 and
2023. However, it remains unprofitable.
Capitalisation Supportive of Rating: Fitch expects capitalisation
to remain supportive of the rating and estimate it to have slightly
improved in 2023 due to higher retained earnings and equity. Its
net leverage and net written premium/equity improved in 2023 to
4.6x and 2.2x, respectively, (2022: 5.7x and 2.7x). Anadolu
Sigorta's regulatory solvency ratio was comfortably above 100% at
end-2023.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A downgrade of Turkiye's Long-Term Local-Currency Issuer Default
Rating (IDR) or major Turkish banks' ratings, leading to a material
deterioration in the company's investment quality
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- An upgrade of Turkiye's Long-Term Local-Currency IDR or major
Turkish banks' ratings leading to a material improvement in the
company's investment credit quality
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Anadolu Anonim Turk
Sigorta Sirketi LT IFS BB- Upgrade B+
TURK P&I: Fitch Hikes IFS Rating to 'B+', Outlook Positive
----------------------------------------------------------
Fitch Ratings has upgraded Turk P ve I Sigorta A.S.'s (Turk P&I)
Insurer Financial Strength (IFS) Rating to 'B+' from 'B'. The
Outlook is Positive.
The upgrade follows a recent similar action of Turkiye's sovereign
ratings and Country Ceiling. The sovereign ratings and Outlook are
a factor in its assessment of the insurer's industry profile and
operating environment, company profile and investment risks. The
Positive Outlook reflects that on the sovereign rating.
The IFS Rating reflects Turk P&I's 'Moderate' company profile
compared with other Turkish insurers', investment risks skewed
towards the Turkish banking sector, and exposure to the Turkish
economy, in line with the rest of the market. The rating also
reflects Turk P&I's strong earnings and weakened capitalisation.
Given that the majority of Turk P&I's liabilities are in foreign
currencies, its IFS Rating is capped by Turkiye's 'B+' Country
Ceiling to account for transfer and convertibility risk.
KEY RATING DRIVERS
Country Ceiling Caps Rating: Turk P&I's IFS Rating is capped at
Turkiye's Country Ceiling of 'B+' because the company predominantly
settles its liabilities in foreign currencies. This results in
transfer and convertibility risk that the Turkish government may
place restrictions on the ability of Turk P&I to obtain foreign
currencies.
Turkish Marine Specialist: Fitch assesses Turk P&I based on the
insurer's Standalone Credit Profile, but also considers its
ownership structure, which is equally divided between public and
private interests. Fitch believes the company's ownership and its
strategic role in the Turkish economy are supportive of its credit
profile. Turk P&I, Turkiye's first protection and indemnity (P&I)
insurance provider, also underwrites hull and machinery (H&M)
insurance, which accounted for around 70% of net premiums in 2023.
'Moderate' Business Profile Turk P&I's 'Moderate' business profile,
despite its small size, limited history and less established
business lines, is underpinned by increasing international
diversification, in addition to its ownership and strategic role in
Turkiye. Turk P&I's business volumes grew strongly in 2023,
supported by local laws as well as strong development of its
international business.
Weakened Capitalisation: Turk P&I's regulatory solvency ratio
weakened to 65% at end-2023 from 90% at end-2022. This was driven
by large claims due to storms in Marmara and Black Sea regions,
which significantly reduced current year profit and equity, as well
as a strong increase in net premiums. Turk P&I implemented a
planned increase in paid-in capital in 2H23 and expects to receive
a further capital injection from shareholders in 1H24, which would
restore the regulatory solvency ratio to over 100%.
High Exposure to Banking System: Turk P&I's balance sheet comprises
deposits in Turkish banks, with some concentration on a single
state-owned bank as well as bonds issued by the government and
domestic banks. This indicates a high exposure to the banking
sector in Turkiye, in line with the rest of the Turkish insurance
market.
Large Claim Erodes Strong Earnings: Turk P&I's earnings have been
strong over the past five years and Fitch views its financial
performance and earnings as a rating strength. However, in 2H23
earnings were reduced by large claims as a result of storms in
Marmara and Black Sea regions.
For 2023, Turk P&I reported a net income of TRY62 million (2022:
TRY42 million), equivalent to a net income return on equity of 37%
(2022: 35%). Its profitability was highly influenced by higher
investment income due to sharply higher interest rates in 2H23 and
foreign-exchange (FX) gains. Turk P&I receives most of its premium
income and pays most of its claims in foreign currencies.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
- A downgrade of Turkiye's Country Ceiling
- Business-risk profile deterioration due to, for example, a sharp
deterioration in the maritime trade environment
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
- An upgrade of Turkiye's Country Ceiling
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Turk P ve I Sigorta A.S. LT IFS B+ Upgrade B
===========================
U N I T E D K I N G D O M
===========================
BCP V MODULAR: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed BCP V Modular Services Holdings III
Limited's (Modulaire) Long-Term Issuer Default Rating (IDR) at 'B'
with a Stable Outlook.
Fitch has also affirmed the senior secured debt ratings of BCP V
Modular Services Finance II PLC (BCP Finance II) and Modulaire
Group Holdings Limited (MGHL) at 'B+'/RR3 and the senior unsecured
debt rating of BCP V Modular Services Finance PLC's (BCP Finance)
at 'CCC+'/RR6.
KEY RATING DRIVERS
Growing Franchise; High Leverage: Modulaire's Long-Term IDR
reflects its significant franchise within European modular leasing,
where it has achieved increasing penetration for its value-added
products and services (VAPS; such as furnishings and system
installations) alongside sound utilisation rates for its core
assets. However, the IDR is constrained by the company's high
leverage.
Leading Position; Niche Sector: Fitch views Modulaire's franchise
in the European modular leasing sector as well established, and
VAPS (62% penetration in 9M23) as offering improved pricing power
relative to the more homogenous modular market. Around 30% of
revenues is from the construction industry, but potential
volatility of demand is mitigated by diversification into other
markets such as healthcare and education, which are less
susceptible to economic swings
High Leverage: Gross cash flow management leverage (as measured by
gross debt/adjusted EBITDA ratio excluding the IFRS 16 impact; on a
run rate last 12 months (LTM) basis) was 6.9x as of end-September
2023. Fitch expects leverage to remain elevated in the short term
but note medium-term deleveraging potential as cost efficiencies
are realised and capex levels moderate through 2024-2025.
Sound EBITDA: Modulaire benefits from good revenue visibility via
effective contract length (on average 21 months actual lease
duration including out of term leasing), stable utilisation
patterns and extended lead times for delivery and installation
(typically three to four months).
The company recorded a pre-tax loss in 9M23, but its EBITDA margin
(excluding IFRS 16 impact; on a run rate management LTM basis) was
adequate at around 29% as of end-September 2023, assisted by
increasing VAPS penetration despite lower volumes, Mobile Mini
contributions, and diversification to non-construction related
offerings. Capex requirements benefit from some discretion in the
event of reduced demand, as demonstrated in 2H23.
Important Infrastructure Provider: Utilisation rates have
historically been sound (at around 85%) and continue to be
supported by the critical nature of the modular offering (often
serving as a critical infrastructure component) as well as a high
disincentive for temporary withdrawal, given the associated costs
and logistical relocation requirements.
Adequate Liquidity: Modulaire's principal sources of liquidity are
existing cash, cash generated from operations and borrowings under
notes and facilities. As of 30 September 2023, the group had total
liquidity of EUR327 million consisting of EUR117 million of cash
and EUR210 million of drawings available under the revolving credit
facility. Modulaire faces no significant near-term debt maturities,
with the nearest maturity of the senior secured debt coming due in
2028.
Debt Funding Largely Hedged: As of end-3Q23, 91% of the senior
secured notes and Term Loan B, which in aggregate comprise the
majority of Modulaire's borrowings, were fixed or hedged until 1Q25
(around 50% are hedged until 3Q26). Interest coverage has
historically been weak, on account of the high debt level, and
remained modest at 2x-2.5x as of 3Q23.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Sustained cash flow leverage (gross debt/ EBITDA ratio excluding
IFRS 16) in excess of 7x, whether because of weakened cash-flow
generation or increased debt;
- A reduction in the interest cover ratio towards 1x, unless for
specific short-term reasons;
- Deteriorating pre-tax profitability, e.g. from declining asset
utilisation metrics or rental margins, thereby undermining debt
service and limiting capital accumulation;
- Evidence of increased risk appetite, e.g. from weakening of the
corporate governance framework, dilution of risk control protocols
or prioritisation of upstreaming earnings over longer-term
deleveraging.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- A sustained reduction in gross cash flow leverage (gross
debt/EBITDA ratio excluding IFRS 16) towards 5x, or a demonstrated
improvement in the interest cover ratio towards 4x;
- Significantly enhanced franchise or business model
diversification, within the broader modular space sector
DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS
SENIOR SECURED AND UNSECURED DEBT - BCP FINANCE, BCP FINANCE II AND
MGHL
Fitch estimates recoveries for senior secured debtholders to stand
at around 60%, resulting in a long-term rating of 'B+'/'RR3', one
notch above Modulaire's Long-Term IDR.
In view of the group's volume of higher-ranking senior secured
debt, estimated recoveries for BCP Finance's senior unsecured debt
are zero, resulting in a rating two notches below Modulaire's
Long-Term IDR, at 'CCC+'/RR6.
DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES
BCP FINANCE II and MGHL - SENIOR SECURED DEBT
- The ratings of the senior secured debt issued by BCP Finance II
and MGHL are primarily sensitive to a change in Modulaire's
Long-Term IDR, from which they are notched.
- Changes leading to a material reassessment of recovery prospects,
for example movements in equipment valuation, could trigger a
change in the notching either up or down.
- A shift in the balance of Modulaire's total debt between senior
secured and senior unsecured sources, could also trigger a change
in the notching either up or down.
BCP FINANCE - SENIOR UNSECURED DEBT
- The rating of the senior unsecured debt issued by BCP Finance is
primarily sensitive to a change in Modulaire's Long-Term IDR, from
which it is notched.
- Changes leading to a material positive reassessment of recovery
prospects, for example movements in equipment valuation, or a
decline in the proportion of Modulaire's total debt drawn from
higher-ranking senior secured sources, could reduce the notching
between Modulaire's IDR and BCP Finance's unsecured deb
ADJUSTMENTS
The Standalone Credit Profile has been assigned below the implied
Standalone Credit Profile due to the following adjustment
reason(s): weakest link - capitalisation & Leverage (negative).
The business profile score has been assigned below the implied
score due to the following adjustment reason(s): business model
(negative).
The earnings & profitability score has been assigned below the
implied score due to the following adjustment reason(s): revenue
diversification (negative), risk-adjusted profitability
(negative).
The capitalisation & leverage score has been assigned above the
implied score due to the following adjustment reason(s): risk
profile and business model (positive).
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
BCP V Modular Services
Finance II PLC
senior secured LT B+ Affirmed RR3 B+
Modulaire Group
Holdings Limited
senior secured LT B+ Affirmed RR3 B+
BCP V Modular Services
Holdings III Limited LT IDR B Affirmed B
BCP V Modular Services
Finance PLC
senior unsecured LT CCC+ Affirmed RR6 CCC+
BEATTIE PASSIVE: Set to Go Into Administration Due to Cash Woes
---------------------------------------------------------------
Charlotte Banks at Construction News reports that Beattie Passive,
which created the UK's first Passivhaus-certified build system, is
set for administration after running into cashflow problems.
Work has stopped at the firm's 10,800 square metre factory after
parent company Beattie Passive Group Ltd and four related companies
filed notices of intention to appoint an administrator on March 22,
Construction News relates.
Beattie Passive's Norwich manufacturing facility, which employed
nearly 50 people, had the capacity to build 200 homes per year and
store up to 50 modules on site. The firm announced that staff
would receive full pay, Construction News states.
According to Construction News, in a statement, the company said it
had been hit by a cashflow gap as a result of delays to its biggest
housebuilding projects, despite a forward order book worth GBP4.5
million. It also pointed to issues with the planning system and
wider macroeconomic conditions, Construction News notes.
The company and its advisers are exploring further fundraising
options, Construction News discloses.
BIDSTACK: Investors Mull Legal Action Following Acquisition
-----------------------------------------------------------
Ben Lucas at City A.M. reports that angry investors in Aim-listed
Bidstack are preparing regulatory complaints and plotting legal
action after the company's top brass bought the firm out of
administration.
Bidstack, which sells in-game advertising to video game companies,
announced on March 22 that it was going into administration.
Shortly after, chief executive James Draper, who previously owned
around three per cent of the company, announced in a LinkedIn post
that executives had purchased the firm as part of a pre-pack
administration deal, City A.M. relates.
"The acquisition is a pivotal moment for the next phase of growth
for the business. Our technology is at the forefront of sports
technology and I couldn't be more excited," City A.M. quotes Mr.
Draper as saying. "I am proud that we are able to reward our
ambitious and industry pioneering team and have them as
shareholders alongside myself."
According to City A.M., Bidstack said in a notice to the stock
market earlier in March that as many as 200 companies had been
prospected by Alvarez & Marsal as part of efforts to save the
firm.
However, the failure to find an investor and move to place the
company into administration has left shareholders millions of
pounds out-of-pocket and prompted threats of legal action from
investors, City A.M. discloses.
Nick Hargrave, an investor in Bidstack, who last year coordinated
an effort to oust two board members, told City A.M. it was
"difficult to believe" there was no interest from over 200 buyers
when "the management are expressing their pride in the acquisition
stating the company's 'enormous potential'".
"The directors have refused to provide updates to investors on
positive business progress, actively block shareholders on social
media and delete comments that they don't like," Mr. Hargrave
alleged.
"They have not attempted to fulfil their fiduciary duty to promote
the success of the company as a public entity, but have been
organised and ruthless in trying to maintain the company's
reputation now that they own it," he claimed.
Mr. Hargrave, as cited by City A.M., said he was now working with
other investors on filing regulatory complaints as well as
consulting about taking legal action against the firm. Efforts to
take legal action are at an early stage, he explained.
Investors also fired a series of questions to Draper and chief
strategy officer Lisa Hau yesterday over the rate of cash burn at
the company after the firm received a EUR3 million settlement from
a legal dispute with Azeroin in December, City A.M. recounts.
The two firms had been locked in a dispute since January last year
over what Bidstack said were unpaid sums, City A.M. notes.
ENDO INT'L: New York Bankruptcy Court Confirms Chapter 11 Plan
--------------------------------------------------------------
Endo International plc (OTC: ENDPQ) on March 19 disclosed that the
United States Bankruptcy Court for the Southern District of New
York has confirmed its Chapter 11 plan of reorganization (the
"Plan"), clearing the path for the Company to successfully complete
its financial restructuring. Under the Plan, substantially all of
the Company's assets are being sold to a new entity, Endo, Inc.,
over 95% of which is owned by holders of the Company's first lien
debt. The transaction is expected to close as early as late April
2024 upon receiving final regulatory approvals and satisfying
customary closing conditions.
Blaise Coleman, Endo's President and Chief Executive Officer, said,
"We look forward to emerging as Endo, Inc., a stronger company
poised for sustained growth. We are grateful for the collaboration
and support from our many stakeholders throughout this process. I
also want to express my gratitude to the entire Endo team for their
continued focus on delivering quality, life-enhancing therapies,
and serving our customers and patients throughout this process."
The terms of the Plan and the sale of substantially all of the
Company's assets to Endo, Inc. will result in a significant
reduction in outstanding indebtedness compared to the Company's
current capital structure and resolve substantially all of the
Company's prior litigation overhang.
Additional resources for customers, suppliers and health care
providers are available at EndoTomorrow.com. More information about
the Company's financial restructuring is available at
https://restructuring.ra.kroll.com/endo; by calling the Supplier
Hotline at (877) 542-1878 (toll-free) or +1 (929) 284-1688
(international); or by emailing EndoInquiries@ra.kroll.com.
About Endo International
Endo International plc (OTC: ENDPQ) is a generics and branded
pharmaceutical company. It develops, manufactures, and sells
branded and generic products to customers in a wide range of
medical fields, including endocrinology, orthopedics, urology,
oncology, neurology, and other specialty areas. On the Web:
http://www.endo.com/
On Aug. 16, 2022, Endo International and certain of its
subsidiaries initiated voluntary prearranged Chapter 11 proceedings
(Bankr. S.D.N.Y. Lead Case No. 22-22549).
On May 25, 2023, Operand Pharmaceuticals Holdco II Limited and
Operand Pharmaceuticals Holdco III Limited each filed a voluntary
Chapter 11 petition also in the U.S. Bankruptcy Court for the
Southern District of New York. On May 31, 2023, Operand
Pharmaceuticals II Limited and Operand Pharmaceuticals III Limited
each filed a voluntary Chapter 11 petition also in the Southern
District of New York.
The Company's cases are jointly administered before the Honorable
James L. Garrity, Jr.
Endo initiated the financial restructuring process after reaching
an agreement with a group of its senior debtholders on a
transaction that would substantially reduce outstanding debt,
address remaining opioid and other litigation-related claims, and
best position Endo for the future. This would allow the Company to
advance its ongoing business transformation from a strengthened
financial position to create compelling value for its stakeholders
over the long term.
Endo's India-based entities are not part of the Chapter 11
proceedings. The Company has filed recognition proceedings in
Canada and expects to file similar proceedings in the United
Kingdom and Australia.
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom, LLP as
legal counsel; PJT Partners, LP as investment banker; and Alvarez &
Marsal North America, LLC as financial advisor. Kroll Restructuring
Administration, LLC, is the claims agent and administrative
advisor. A Web site dedicated to the restructuring is at
http://www.endotomorrow.com/
Roger Frankel, the legal representative for future claimants in the
Chapter 11 cases, tapped Frankel Wyron LLP and Young Conaway
Stargatt & Taylor, LLP, as legal counsels, and Ducera Partners,
LLC, as investment banker.
NEWDAY FUNDING 2024-1: DBRS Gives Prov. BB Rating to Class E Notes
------------------------------------------------------------------
DBRS Ratings Limited assigned provisional credit ratings to the
notes (collectively, the Notes) to be issued by NewDay Funding
Master Issuer plc (the Issuer) as follows:
-- Series 2024-1, Class A Notes at AAA (sf)
-- Series 2024-1, Class B Notes at AA (sf)
-- Series 2024-1, Class C Notes at A (sf)
-- Series 2024-1, Class D Notes at BBB (sf)
-- Series 2024-1, Class E Notes at BB (sf)
-- Series 2024-1, Class F Notes at B (high) (sf)
The credit ratings address the timely payment of scheduled interest
and the ultimate repayment of principal by the relevant legal final
maturity dates.
The 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 Notes are issued.
-- The credit quality of NewDay Ltd.'s portfolio, the
characteristics of the collateral, its historical performance and
Morningstar DBRS' expectation of charge-offs, monthly principal
payment rate (MPPR), and yield rates under various stress
scenarios.
-- NewDay Ltd.'s capabilities with respect to origination,
underwriting, servicing, and its position in the market and
financial strength.
-- An operational risk review of NewDay Cards Ltd., which is
deemed an acceptable servicer.
-- The transaction parties' financial strength regarding their
respective roles.
-- The consistency of the transaction's legal structure with
Morningstar DBRS' methodology "Legal Criteria for European
Structured Finance Transactions".
-- The sovereign rating on United Kingdom of Great Britain and
Northern Ireland, currently rated AA with a Stable trend by
Morningstar DBRS.
TRANSACTION STRUCTURE
The Notes are backed by a portfolio of near-prime credit cards
granted to individuals domiciled in the UK by NewDay and are issued
out of NewDay Funding Master Issuer plc as part of the NewDay
Funding-related master issuance structure under the same
requirements regarding servicing, amortization events, priority of
distributions, and eligible investments.
The transaction includes a scheduled revolving period. During this
period, additional receivables may be purchased and transferred to
the securitized pool, provided that the eligibility criteria 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 termination. The
servicer may extend the scheduled revolving period by up to 12
months. If the Notes are not fully redeemed at the end of the
respective scheduled revolving periods, the transaction enters into
a rapid amortization.
The transaction also includes a series-specific liquidity reserve
to cover shortfalls in senior expenses, senior swap payments (if
applicable) and interest on the Class A, Class B, Class C and Class
D Notes and would amortize to the target amount, subject to a floor
of GBP 250,000.
As the Notes are denominated in GBP with floating-rate coupons
based on the daily compounded Sterling Overnight Index Average
(Sonia), there is an interest rate mismatch between the fixed-rate
collateral and the Sonia coupon rates. The potential risk is to a
certain degree mitigated by excess spread and NewDay's ability to
increase the credit card annual percentage rates. The A (sf) rated
Class C Notes benefit from higher subordination than the other A
(low) (sf) rated notes issued separately out of the NewDay Funding
related master issuance programme. This approach is consistent with
the issuance of the Series 2023-1 and with Morningstar DBRS'
criteria in respect of the rating stability of a master issuance
structure.
COUNTERPARTIES
HSBC Bank plc is the account bank for the transaction. Based on
Morningstar DBRS' private rating on HSBC Bank plc and the downgrade
provisions outlined in the transaction documents, Morningstar DBRS
considers the risk arising from the exposure to the account bank to
be commensurate with the credit ratings assigned.
PORTFOLIO ASSUMPTIONS
Recent total payment rates including the interest collections
declined slightly with a total payment rate of 14.9% in January
2024 following a record high of 15.7% in May 2023 but continue to
remain above historical levels. While the recent levels do not
appear to be susceptible to the current inflationary pressures and
interest rates, Morningstar DBRS elected to maintain the expected
MPPR at 8% after removing the interest collections.
The portfolio yield was largely stable over the reported period
until March 2020, the initial outbreak of the COVID-19 pandemic.
The most recent performance in January 2024 showed a total yield of
33%, up from the record low of 26% in May 2020 as a result of the
consistent repricing of credit card rates by NewDay following the
Bank of England base rate increases since mid-2022. After
consideration of the observed trends and the removal of
spend-related fees, Morningstar DBRS maintained the expected yield
at 27%.
The reported historical annualized charge-off rates were high but
stable at around 16% until June 2020. The most recent performance
in January 2024 showed a charge-off rate of 11.5% after reaching a
record high of 17.6% in April 2020. Based on the analysis of
historical charge-off rates, delinquencies and consideration of the
current macroeconomic environment, Morningstar DBRS maintained the
expected charge-off rate at 18%.
Morningstar DBRS' credit ratings on the 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 Notes are the related
Interest Payment Amounts and the Class Balances.
Morningstar DBRS' credit ratings on the Notes also addresses the
credit risk associated with the increased rate of interest
applicable to the Notes if the Notes are not redeemed on the
initial scheduled 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 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 British pound sterling unless otherwise
noted.
SIG PLC: Moody's Affirms 'B1' CFR & Alters Outlook to Negative
--------------------------------------------------------------
Moody's Ratings has affirmed the B1 long-term corporate family
rating and B1-PD probability of default rating of SIG plc, a
UK-based building materials specialist distribution company.
Concurrently, Moody's has affirmed the B2 instrument rating on
SIG's EUR300 million backed senior secured notes due 2026. The
outlook changed to negative from stable.
RATINGS RATIONALE
The rating action reflects:
-- Significant deterioration of SIG's key credit ratios in 2023,
including Moody's adjusted debt / EBITDA to 5.4x from 4x in 2022
and Moody's adjusted EBITA / interest to 1.1x from 2.6x, driven by
a combination of lower earnings and higher interest component of
leases;
-- Limited recovery prospects across the company's main markets in
2024 as levels of new construction and refurbishment activity
remain subdued
-- Good liquidity, supported by sizeable cash balance and undrawn
RCF. In 2023 it achieved neutral free cash flow despite lower
earnings.
SIG reported slightly negative -2% like-for-like sales growth in
2023, including -4% in the second half of the year, which reflected
weakening industry conditions in the UK and Europe. More
positively, the company's topline was more resilient compared with
some of the rated peers, which reported mid-single to low
double-digits decline in the Q3 and Q4 of 2023. The company's
Moody's adjusted operating profit margin decreased to 1.4% in 2023
from 2.8% a year before, reflecting lower volumes (approximately 7%
decrease), operating cost inflation and approximately GBP8 million
of restructuring costs on redundancy and branch closure.
Moody's expects lower construction and refurbishment activity in
2024 in SIG's main markets, including France, the UK, Germany and
Benelux in particular in the first half of the year. This will
limit potential recovery of the company's earnings in 2024 which
will however be supported by cost saving initiatives (approximately
GBP10 million as estimated by the management). More positively,
Moody's expects construction activity to gradually pick up from the
second half of 2024 and in particular in 2025.
SIG's B1 CFR is supported by the company's (1) leading position as
a specialist building materials distribution company with a focus
on the relatively resilient roofing and insulation segments, good
geographic diversification and significant exposure to the more
stable renovation market; (2) conservative financial policies and
good liquidity; (3) relatively flexible cost base and the inherent
countercyclical nature of working capital.
Less positively, the CFR also factors in (1) the fragmented and
highly competitive European building materials distribution market;
(2) inherently low profitability in the industry, which limits free
cash flow generation; (3) deteriorating economic outlook and
reducing construction and renovation activity in Europe.
The ratings are also based on the Moody's expectation that SIG will
adhere to its conservative and publicly stated financial policies,
including a target pre-IFRS 16 net leverage of 1.5x and dividend
coverage of 2-3 times. In addition, the rating agency expects that
SIG will maintain a significant cash balance. The company's GBP132
million cash (at December 31, 2023) represents a solid proportion
of the company's EUR300 million notes and GBP20 million pension
liabilities. However, Moody's expects cash balance to decrease
somewhat in 2024 due to the negative free cash flow of
approximately GBP20 million as the company will need to invest to
working capital when market activity starts to pick-up.
LIQUIDITY
The company's liquidity is good with GBP132 million of cash on the
balance sheet as of December 2023. In addition, SIG's liquidity
benefits from a fully undrawn GBP90 million revolving credit
facility (RCF) due May 2026. The RCF is subject to a 4.75x net
leverage springing covenant that is tested when the RCF is over 40%
drawn at a quarter end reporting date. The company also utilises
approximately GBP40 million under a factoring facility in one of
its French businesses to speed up the collection of the
receivables.
STRUCTURAL CONSIDERATIONS
The company's EUR300 million backed senior secured notes are rated
B2, one notch below the CFR. Although the backed senior secured
notes and the upsized GBP90 million super senior RCF share the same
security package and guarantor coverage, the notes rank junior to
the RCF upon enforcement over the collateral. The size of RCF and
trade payable balances is relatively large compared with the notes,
which results in notching. Security comprises share pledges and a
floating charge over assets in the UK, and guarantees are provided
from material companies representing at least 95% of revenue, 94%
of gross assets and 91% of EBITDA.
ESG CONSIDERATIONS
Private equity firm Clayton Dubilier & Rice (CD&R), which owns 29%
of SIG's shares, has two non-executive directors in the Board.
Moody's expects CD&R, similar to other private equity firms, to
have relatively higher appetite for shareholder-friendly actions,
although the rating agency expects that SIG will adhere to its
publicly stated financial policies.
RATING OUTLOOK
The negative outlook reflects SIG's weak credit ratios for the
current rating and risks of slower than expected recovery in the
second half of 2024 and 2025. It also reflects Moody's
expectations that SIG's profit margin will start to recover in 2024
and that the company's liquidity will remain good.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade the company's rating if: (1) Moody's-adjusted
gross debt/EBITDA decreases below 4.0x on a sustained basis; (2)
FCF / debt grows towards high single digit figures; (3) EBITA /
Interest increases above 2.5x; and (4) the company builds track
record of operating with a conservative financial policy.
Downward pressure could materialise if (1) Moody's-adjusted
debt/EBITDA is sustained above 5x; (2) EBITA / interest does not
recover significantly from the current levels (3) FCF is
sustainably negative; (4) liquidity profile deteriorates; or (5)
the company pursues debt-funded acquisitions or shareholder
distributions, which result in weakening of the company's credit
metrics.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Distribution
and Supply Chain Services published in February 2023.
PROFILE
Based in Sheffield, England, SIG plc is a European building
materials distributor specialist. The company operates in the UK,
France, Germany, Poland, the Benelux and Ireland and is focussed on
roofing products and insulation. With about 440 branches across
Europe, SIG generated GBP2.8 billion revenue in 2023, reporting
GBP132 million of EBITDA for the period. The company is listed on
the London Stock Exchange with current market capitalisation of
GBP349 million as at March 22, 2024. Private equity firm CD&R owns
29% of the shares.
STRATTON MORTGAGE 2020-1: S&P Cuts E-Dfrd Notes Rating to 'BB(sf)'
------------------------------------------------------------------
S&P Global Ratings lowered its credit ratings on Stratton Mortgage
Funding 2020-1 PLC's class E-Dfrd notes to 'BB (sf)' from 'BBB-
(sf)' and F-Dfrd notes to 'CCC (sf)' from 'BB (sf)'. At the same
time, S&P affirmed its 'AAA (sf)' rating on the class A notes, 'AA+
(sf)' rating on the class B-Dfrd notes, 'AA- (sf)' rating on the
class C-Dfrd notes, and 'A- (sf)' rating on the class D-Dfrd
notes.
The rating actions reflect increased arrears in the transaction,
given its exposure to the cost of living crisis over 2023.
S&P said, "Since closing, our weighted-average foreclosure
frequency (WAFF) assumptions have increased at all rating levels to
'B' from 'AAA'. Arrears have increased significantly since our last
review. This has resulted in higher WAFF at all rating levels.
"House price appreciation since closing, lower jumbo loans
concentration in the pool, and the lower market value decline
applied, have also led to a reduction in our weighted-average loss
severity assumptions."
Credit analysis results
RATING LEVEL WAFF (%) WALS (%) CREDIT COVERAGE (%)
AAA 50.50 35.67 18.01
AA 44.69 27.87 12.45
A 41.23 15.98 6.59
BBB 37.77 9.71 3.67
BB 33.86 6.36 2.15
B 32.97 4.11 1.35
S&P said, "Loan-level arrears in the transaction have increased
since our last review, reflecting current macroeconomic conditions.
Loan-level arrears currently stand at 26.3%. Total arrears are
above our U.K. nonconforming pre-2014 index, while prepayments are
below it. Cumulative losses currently stand at GBP375,809.
"Our credit and cash flow results indicate that the available
credit enhancement for the class A to D-Dfrd notes continues to be
commensurate with the assigned ratings. We therefore affirmed our
ratings on these notes.
"The downgrades reflect the increase of required credit coverage at
all rating levels since closing. At the same time, prepayments have
significantly increased credit enhancement for the asset-backed
notes. As a result, our cash flow analysis indicates that the class
E-Dfrd and F-Dfrd notes can only withstand stresses at lower
ratings than those previously assigned. We therefore lowered our
ratings on the notes.
"Additionally, the class F-Dfrd notes face shortfalls under our
standard cash flow analysis at the 'B' rating level. Under a steady
state scenario based on observed prepayments with actual fees and
no setoff stress, the notes fail to pass our 'B' cash flow
stresses. We therefore lowered the rating on the class F-Dfrd notes
to 'CCC (sf)', given that they do rely on favorable economic and
financial conditions to service their debt obligations and remain
current."
The ratings on the class E-Dfrd and F-Dfrd notes are below the
levels indicated by S&P's standard cash flow analysis. These notes
do not benefit from the liquidity reserve fund, which will be
released to the principal waterfall once the class A to D-Dfrd
notes have fully redeemed. The reserve fund continues to amortize
in line with the required amount--2.0% of the class A, B, C-Dfrd,
and D-Dfrd notes' outstanding balances. The assigned ratings
reflect the lack of liquidity and sensitivities related to higher
default levels due to macroeconomic factors, such as cost of living
pressures on borrowers.
The interest amounts on the class E-Dfrd and F-Dfrd notes also
remain unpaid, considering the notes do not benefit from the
liquidity reserve fund.
S&P said, "The rating on the class B-Dfrd notes is below the level
indicated by our cash flow analysis. Our rating on these notes
reflects payment of ultimate interest and principal, and interest
is deferrable when they are not the most senior class outstanding.
We do not believe the presence of interest deferral mechanisms is
consistent with the definition of a 'AAA' rating. The pool contains
loans to borrowers with self-certified incomes, a prior bankruptcy,
and prior county court judgments. There is also a high exposure to
interest-only loans. We consider that such borrowers may be
adversely affected under the current macroeconomic conditions, and
so the assigned ratings reflect sensitivities related to higher
levels of defaults due to macroeconomic factors such as cost of
living pressures on borrowers."
Macroeconomic forecasts and forward-looking analysis
The current U.K. macroeconomic outlook remains uncertain and has
recently been subject to significant changes within short
timeframes. In addition to increased energy costs and the overall
cost of living, rate rise expectations remain fluid against a
backdrop of a stagnating macroeconomic environment. The ratings
assigned reflect this market uncertainty and our overall analysis
considers the implications of a further deterioration in credit
conditions.
S&P considers the borrowers in the transaction to be nonconforming
and, as such, will generally be prone to inflationary pressures.
Of the borrowers in this transaction, 100% are paying a floating
rate of interest. As a result, in the short to medium term,
borrowers are not protected from rate rises, and will also be
affected by cost of living pressures.
S&P said, "In our view, the ability of the borrowers to repay their
mortgage loans will be highly correlated to macroeconomic
conditions. Our current forecast for U.K. policy interest rates is
4.5% and our unemployment forecasts for 2024 and 2025 are 4.6% and
4.3%, respectively. We therefore expect a short-term increase in
arrears, leading to higher unpaid interest amounts for the class
E-Dfrd and F-Dfrd notes.
"Given our current macroeconomic forecasts and forward-looking view
of the U.K. residential mortgage market, we have performed
additional sensitivities related to higher levels of defaults due
to increased arrears and house price declines. The assigned ratings
reflect the results of these sensitivities."
The transaction is backed mainly by first-ranking nonconforming
owner-occupied and BTL mortgage loans in the U.K. The assets were
previously securitized in Alba 2015-1 PLC (70.02%) and Alba 2006-1
PLC (29.98%).
TOGETHER ASSET 2021-CRE1: DBRS Hikes Class E Notes Rating to BB
---------------------------------------------------------------
DBRS Ratings Limited took the following credit rating actions on
the notes issued by Together Asset Backed Securitization 2021-CRE1
Plc (TABS 2021-CRE1), Together Asset Backed Securitization
2021-CRE2 Plc (TABS 2021-CRE2), and Together Asset Backed
Securitization 2022-CRE1 Plc (TABS 2022-CRE1) as follows:
TABS 2021-CRE1:
-- Class A Notes confirmed at AAA (sf)
-- Class B Notes upgraded to AA (high) (sf) from AA (sf)
-- Class C Notes upgraded to AA (sf) from A (sf)
-- Class D Notes upgraded to A (low) (sf) from BBB (high) (sf)
-- Class E Notes upgraded to BB (sf) from BB (low) (sf)
The credit rating on the Class A Notes addresses the timely payment
of interest and ultimate payment of principal on or before the
legal final maturity date. The credit ratings on the Class B, Class
C, Class D, and Class E notes address the timely payment of
interest while the senior-most class outstanding and the ultimate
payment of interest and principal on or before the legal final
maturity date.
TABS 2021-CRE2:
-- Class A Loan Note confirmed at AAA (sf)
-- Class B Notes upgraded to AA (sf) from AA (low) (sf)
-- Class C Notes upgraded to AA (low) (sf) from A (low) (sf)
-- Class D Notes confirmed at BBB (low) (sf)
-- Class E Notes confirmed at B (sf)
The credit rating on the Class A Loan Note addresses the timely
payment of interest and the ultimate repayment of principal on or
before the legal final maturity date. The credit ratings on the
Class B, Class C, Class D, and Class E notes address the timely
payment of interest while the senior-most class outstanding and the
ultimate repayment of principal on or before the legal final
maturity date.
TABS 2022-CRE1:
-- Loan Note confirmed at AA (sf)
-- Class B confirmed at A (sf)
-- Class C confirmed at BBB (sf)
-- Class D confirmed at BB (sf)
The credit rating on the Loan Note addresses the timely payment of
interest and the ultimate repayment of principal on or before the
legal final maturity date. The credit ratings on the Class B, Class
C, and Class D notes address the timely payment of interest while
the senior-most class outstanding and the ultimate repayment of
principal on or before the legal final maturity date.
The credit rating actions on all transactions are based on the
following analytical considerations:
-- Portfolio performance, in terms of delinquencies, defaults, and
losses, as of the latest payment date (February 2024 for TABS
2021-CRE1 and TABS 2021-CRE2, and January 2024 for TABS
2022-CRE1);
-- Portfolio default rate (PD), loss given default (LGD), and
expected loss assumptions on the remaining receivables; and
-- Current available credit enhancement (CE) to the notes to cover
the expected losses at their respective credit rating levels.
The transactions are securitizations of first- and second-lien
mortgage loans, both owner-occupied and non-owner-occupied, backed
by commercial, mixed-use, and residential properties located in the
United Kingdom. The mortgages are originated and serviced by
Together Commercial Finance Limited (TCFL). In TABS 2022-CRE1, the
mortgages are also originated and serviced by Harpmanor Limited
(Harpmanor), which is part of the Together Group. Morningstar DBRS
considered Harpmanor's underwriting and servicing practices to be
in line with TCFL's, allowing a comparison with TABS 2021-CRE1 and
TABS 2021-CRE2 and similar analysis for the transaction.
BCM Global Mortgage Services Limited (formerly Link Mortgages
Services Limited) acts as the standby servicer for all
transactions.
The loans in the portfolios are also subject to cross-default and
cross-collateralization, and include borrowers with prior county
court judgments and a high concentration of self-employed
borrowers.
The Class A Loan Note in TABS 2021-CRE2 and the Loan Note in TABS
2022-CRE1 are not listed and were instead purchased by the
respective noteholders via a loan note agreement. Similar to the
other classes of notes, the Class A Loan Noteholder/Loan Noteholder
is entitled to receive payments of interest and principal in line
with the priority of payments.
The first call dates are the February 2025, February 2026, and
October 2026 payment dates for TABS 2021-CRE1, TABS 2021-CRE2, and
TABS 2022-CRE1, respectively, and coincide with a step-up in the
coupons. The legal final maturity dates are the January 2055,
August 2052, and April 2054 payment dates, respectively.
PORTFOLIO PERFORMANCE
For TABS 2021-CRE1, two- to three-month delinquencies and 90+-day
delinquencies were 0.7% and 0.9% of the outstanding portfolio
balance as of the latest payment date, respectively, up from 0.8%
and 0.4%, respectively, since the last annual review.
For TABS 2021-CRE2, two- to three-month delinquencies and 90+-day
delinquencies were 2.0% and 1.4% of the outstanding portfolio
balance as of the latest payment date, respectively, compared with
0.0% and 1.1%, respectively, at the last annual review.
For TABS 2022-CRE1, two to three-month delinquencies and 90+-day
delinquencies were 1.5% and 2.1% of the outstanding portfolio
balance as of the latest payment date, respectively, compared with
0.6% and 0.0%, respectively, at the last annual review.
As of the latest payment date, there were no cumulative
repossessions and cumulative principal losses were zero for all
transactions. The outstanding balance of loans in Law of Property
Act (LPA) receivership represented 1.4%, 2.4%, and 3.5% of the
outstanding portfolio balance in TABS 2021-CRE1, TABS 2021-CRE2,
and TABS 2022-CRE1, respectively. So far the LPA process has not
led to any repossessions, with agreements being reached with the
relevant borrowers to enable them to repay their loans.
PORTFOLIO ASSUMPTIONS AND KEY DRIVERS
Morningstar DBRS conducted a loan-by-loan analysis of the remaining
pool of receivables in all transactions.
For TABS 2021-CRE1, Morningstar DBRS updated its base case PD and
LGD assumptions at the B (sf) credit rating level to 12.0% and
7.7%, respectively, from 10.1% and 10.3% at the last annual review,
respectively.
For TABS 2021-CRE2, Morningstar DBRS updated its base case PD and
LGD assumptions at the B (sf) credit rating level to 12.6% and
12.0%, respectively, from 10.9% and 14.5% at the last annual
review, respectively.
For TABS 2022-CRE1, Morningstar DBRS updated its base case PD and
LGD assumptions to 14.3% and 10.5%, respectively, from 10.0% and
13.1%, at the last annual review, respectively.
In all transactions, the increase in the PD assumptions is driven
by the increase in delinquencies and portion of loans in the LPA
process, while the decrease in the LGD assumptions follows the
decrease in loan-to-value along with the portfolio amortization.
CREDIT ENHANCEMENT
As of the latest payment date, the CE evolved since the last credit
rating action as follows:
TABS 2021-CRE1
-- CE to the Class A Notes increased to 35.6% from 28.9%
-- CE to the Class B Notes increased to 26.5% from 21.5%
-- CE to the Class C Notes increased to 19.4% from 15.8%
-- CE to the Class D Notes increased to 13.0% from 10.5%
-- CE to the Class E Notes increased to 7.0% from 5.6%
TABS 2021-CRE2
-- CE to the Class A Loan Note increased to 35.1% from 28.3%
-- CE to the Class B Notes increased to 26.1% from 21.1%
-- CE to the Class C Notes increased to 19.1% from 15.4%
-- CE to the Class D Notes increased to 12.8% from 10.3%
-- CE to the Class E Notes increased to 6.9% from 5.5%
TABS 2022-CRE1
-- CE to the Loan Note increased to 18.1% from 15.0%
-- CE to Class B increased to 12.2% from 10.0%
-- CE to Class C increased to 7.6% from 6.1%
-- CE to Class D increased to 5.0% from 3.9%
The substantial increase in the CE since the last annual review
drives the upgrades of the credit ratings in TABS 2021-CRE1 and
TABS 2021-CRE2, while the limited CE increase along with the
increase in the loss assumptions in TABS 2022-CRE1 led to a
confirmation of the credit ratings at their current levels.
The CE to the notes consists of the subordination of the respective
junior notes as well as the general reserve fund (GRF) for TABS
2021-CRE1 and TABS 2021-CRE2. The GRF for each is available to
cover senior fees and interest on the Class A/Class A Loan Note to
the Class E Notes and principal losses via the principal deficiency
ledgers (PDLs) on the Class A/Class A Loan Note to Class Z notes.
As of the February 2024 payment date, both GRFs were at their
target level, equal to 2% of the portfolio outstanding balance at
closing minus the liquidity reserve.
As of the latest payment date, all PDLs were clear in all
transactions.
The Class A Notes/Class A Loan Note/Loan Note benefit from a
dedicated liquidity reserve, which covers the payment of senior
fees and interest shortfalls on this class of notes/loan note. The
liquidity reserve is amortizing with a target amount set at 1.5% of
the Class A Notes/Class A Loan Note outstanding balance and floored
at 1% of the Class A Notes/Class A Loan Note balance at closing in
TABS 2021-CRE1 and TABS 2021-CRE2. The liquidity reserve is
amortizing with a target amount set at 1.5% of the portfolio
outstanding balance in TABS 2022-CRE1. Any excess amounts become
part of the available revenue receipts. As of the latest payment
date, the liquidity reserve was at its target balance in all
transactions.
Elavon Financial Services DAC, UK Branch (Elavon UK) acts as the
account bank for all transactions. Based on Morningstar DBRS'
private credit rating on Elavon UK, 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 Class A
Notes/Class A Loan Note/Loan Note in the transactions, as described
in Morningstar DBRS' "Legal Criteria for European Structured
Finance Transactions" methodology.
Notes: All figures are in British pound sterling unless otherwise
noted.
WHITE ARCHES: Bought Out of Administration by Spinney Motorhomes
----------------------------------------------------------------
Business Sale reports that administrators have completed the sale
of a caravan and motorhome retailer following its collapse on March
28.
Ryan Grant and Chris Pole of Interpath Advisory were appointed as
joint administrators to White Arches Caravans and operating
subsidiary P.N. Sharpe Limited on March 28, Business Sale relates.
The company, which traded from sites in Rushden and Wellingborough,
is a retailer of new and used caravans and motorhomes, with both
companies forming part of the Robinsons Caravans group.
Over the past year, the group's cash flow has suffered due to
several macroeconomic factors, especially the cost-of-living
crisis, which has led to customers having less disposable income,
Business Sale discloses. As a result, the group saw a decrease in
both the volume of caravan sales, as well as the average purchase
price, Business Sale states. In addition, the company had faced an
increase in costs, including financing costs, amid high interest
rates, Business Sale notes.
The group's directors sought to undertake a review of the business'
investment, refinance and sale options, but ultimately decided to
appoint administrators, Business Sale relays. According to Business
Sale, upon their appointment, the joint administrators immediately
completed a sale of the business and assets to a newco owned by
Spinney Motorhomes and Caravans, in a deal that secures all 55 jobs
at the business.
===============
X X X X X X X X
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[*] BOND PRICING: For the Week March 25 to March 29, 2024
---------------------------------------------------------
Issuer Coupon Maturity Currency Price
------ ------ -------- -------- -----
Codere Finance 2 Lu 11.000 9/30/2026 EUR 23.000
Codere Finance 2 Luxe 11.000 9/30/2026 EUR 30.000
Codere Finance 2 Luxe 12.750 11/30/2027 EUR 2.000
Kvalitena AB publ 10.067 4/2/2024 SEK 33.750
Solocal Group 10.940 3/15/2025 EUR 18.506
R-Logitech Finance SA 10.250 9/26/2027 EUR 15.406
Caybon Holding AB 10.566 3/3/2025 SEK 46.349
YA Holding AB 12.758 12/17/2024 SEK 15.025
Codere Finance 2 Luxe 13.625 11/30/2027 USD 2.001
Ilija Batljan Invest 10.768 SEK 3.281
IOG Plc 13.428 9/20/2024 EUR 10.000
UkrLandFarming PLC 10.875 3/26/2018 USD 4.101
Tinkoff Bank JSC Via 11.002 USD 43.002
Turkiye Government Bo 10.400 10/13/2032 TRY 53.000
Codere Finance 2 Luxe 13.625 11/30/2027 USD 2.001
Solocal Group 10.940 3/15/2025 EUR 8.433
Bakkegruppen AS 11.700 2/3/2025 NOK 46.468
Oscar Properties Hold 11.317 7/5/2024 SEK 3.332
Privatbank CJSC Via U 10.250 1/23/2018 USD 3.436
Bilt Paper BV 10.360 USD 1.491
Immigon Portfolioabba 10.258 EUR 9.812
Bourbon Corp SA 11.652 EUR 1.377
Codere Finance 2 Luxe 11.000 9/30/2026 EUR 30.000
Plusplus Capital Fina 11.000 7/29/2026 EUR 10.563
Offentliga Hus I Nord 10.924 SEK 44.027
Avangardco Investment 10.000 10/29/2018 USD 0.108
Saderea DAC 12.500 11/30/2026 USD 44.000
Virgolino de Oliveira 10.500 1/28/2018 USD 0.010
Sidetur Finance BV 10.000 4/20/2016 USD 0.223
Virgolino de Oliveira 11.750 2/9/2022 USD 0.685
Virgolino de Oliveira 10.500 1/28/2018 USD 0.010
Privatbank CJSC Via U 10.875 2/28/2018 USD 3.954
Marginalen Bank Banka 13.068 SEK 45.000
Transcapitalbank JSC 10.000 USD 1.450
Goldman Sachs Interna 16.288 3/17/2027 USD 25.620
Bulgaria Steel Financ 12.000 5/4/2013 EUR 0.216
Privatbank CJSC Via U 11.000 2/9/2021 USD 1.000
Tonon Luxembourg SA 12.500 5/14/2024 USD 0.010
Phosphorus Holdco PLC 10.000 4/1/2019 GBP 0.375
Codere Finance 2 Luxe 12.750 11/30/2027 EUR 2.000
Societe Generale SA 16.000 8/1/2024 USD 30.600
KPNQwest NV 10.000 3/15/2012 EUR 0.894
NTRP Via Interpipe Lt 10.250 8/2/2017 USD 1.003
Societe Generale SA 15.000 8/30/2024 USD 18.300
Societe Generale SA 16.000 7/3/2024 USD 28.500
Societe Generale SA 15.360 11/8/2024 USD 24.400
Societe Generale SA 16.000 8/1/2024 USD 13.800
Leonteq Securities AG 12.490 7/10/2024 USD 35.270
Societe Generale SA 16.000 8/30/2024 USD 27.500
Societe Generale SA 15.000 10/31/2024 USD 49.800
UBS AG/London 13.750 7/1/2024 CHF 33.700
Societe Generale SA 15.000 8/1/2024 USD 18.700
Societe Generale SA 21.000 12/26/2025 USD 28.800
Virgolino de Oliveira 10.875 1/13/2020 USD 36.000
Turkiye Ihracat Kredi 12.540 9/14/2028 TRY 48.488
Societe Generale SA 11.000 7/14/2026 USD 13.800
Credit Suisse AG/Lond 20.000 11/29/2024 USD 16.140
Virgolino de Oliveira 11.750 2/9/2022 USD 0.685
Zurcher Kantonalbank 24.673 6/28/2024 CHF 44.870
Evocabank CJSC 11.000 9/28/2024 AMD 10.000
Banco Espirito Santo 10.000 12/6/2021 EUR 0.063
Societe Generale SA 23.510 6/23/2026 USD 7.600
Nordea Bank Abp 10.170 1/20/2029 SEK 51.940
Tailwind Energy Chino 12.500 9/27/2019 USD 1.500
Societe Generale SA 16.000 7/3/2024 USD 21.800
Zurcher Kantonalbank 22.000 8/6/2024 USD 48.100
Russian Railways JSC 8.690 2/28/2040 RUB 50.000
Lehman Brothers Treas 10.000 6/11/2038 JPY 0.100
Lehman Brothers Treas 11.750 3/1/2010 EUR 0.100
Bilt Paper BV 10.360 USD 1.491
Leonteq Securities AG 12.000 4/23/2024 CHF 49.480
Leonteq Securities AG 25.000 5/2/2024 CHF 27.660
Virgolino de Oliveira 10.875 1/13/2020 USD 36.000
UBS AG/London 18.750 5/31/2024 CHF 32.250
Evocabank CJSC 11.000 9/27/2025 AMD 9.500
Bank Vontobel AG 18.000 6/28/2024 CHF 36.500
ACBA Bank OJSC 11.500 3/1/2026 AMD 0.000
Swissquote Bank SA 25.390 5/30/2024 CHF 36.430
Armenian Economy Deve 11.000 10/3/2025 AMD 9.900
Tonon Luxembourg SA 12.500 5/14/2024 USD 0.010
Ukraine Government Bo 11.000 3/24/2037 UAH 26.205
Petromena ASA 10.850 11/19/2018 USD 0.622
Finca Uco Cjsc 12.000 2/10/2025 AMD 0.000
Societe Generale SA 13.010 11/14/2024 USD 27.000
Finca Uco Cjsc 12.500 6/21/2024 AMD 0.000
Leonteq Securities AG 14.000 4/30/2024 CHF 12.820
Societe Generale SA 15.110 10/31/2024 USD 28.000
Finca Uco Cjsc 13.000 5/30/2025 AMD 0.000
Finca Uco Cjsc 13.000 11/16/2024 AMD 0.000
Russian Railways JSC 8.690 2/28/2040 RUB 50.000
Inecobank CJSC 10.000 4/28/2025 AMD 10.285
Societe Generale SA 20.000 11/28/2025 USD 6.667
Swissquote Bank SA 23.990 7/3/2024 CHF 43.280
Raiffeisen Schweiz Ge 20.000 7/24/2024 CHF 49.220
Leonteq Securities AG 24.000 6/19/2024 CHF 41.210
Ukraine Government Bo 12.500 4/27/2029 UAH 40.773
Credit Agricole Corpo 10.200 12/13/2027 TRY 44.420
Phosphorus Holdco PLC 10.000 4/1/2019 GBP 0.375
Privatbank CJSC Via U 10.875 2/28/2018 USD 3.954
UkrLandFarming PLC 10.875 3/26/2018 USD 4.101
Raiffeisen Switzerlan 20.000 5/8/2024 EUR 47.685
Ukraine Government Bo 10.570 5/10/2027 UAH 46.853
Bulgaria Steel Financ 12.000 5/4/2013 EUR 0.216
Lehman Brothers Treas 16.000 10/28/2008 USD 0.100
Credit Suisse AG/Lond 29.000 3/28/2024 USD 17.898
Leonteq Securities AG 26.000 7/31/2024 CHF 40.590
Leonteq Securities AG 24.000 4/11/2024 CHF 30.030
Swissquote Bank SA 20.120 6/20/2024 CHF 13.370
Raiffeisen Schweiz Ge 15.500 4/11/2024 CHF 31.860
Ukraine Government Bo 11.000 4/24/2037 UAH 28.667
Ukraine Government Bo 10.360 11/10/2027 UAH 43.040
Lehman Brothers Treas 10.442 11/22/2008 CHF 0.100
BLT Finance BV 12.000 2/10/2015 USD 10.500
PA Resources AB 13.500 3/3/2016 SEK 0.124
Societe Generale SA 15.840 8/30/2024 USD 14.300
Converse Bank 10.500 5/22/2024 AMD 10.317
UBS AG/London 19.000 7/12/2024 CHF 43.450
Bank Vontobel AG 25.000 7/22/2024 USD 33.400
Ukraine Government Bo 11.000 2/16/2037 UAH 26.237
ObedinenieAgroElita O 13.750 5/22/2024 RUB 19.640
Raiffeisen Switzerlan 10.500 7/11/2024 USD 23.750
JP Morgan Structured 15.500 11/4/2024 USD 30.480
Leonteq Securities AG 20.000 8/7/2024 CHF 19.810
DZ Bank AG Deutsche Z 16.000 6/28/2024 EUR 36.820
UniCredit Bank GmbH 19.300 12/31/2024 EUR 41.780
Leonteq Securities AG 30.000 8/7/2024 CHF 35.550
UniCredit Bank GmbH 18.200 6/28/2024 EUR 36.300
UniCredit Bank GmbH 19.500 6/28/2024 EUR 35.200
UniCredit Bank GmbH 18.500 12/31/2024 EUR 42.400
Raiffeisen Schweiz Ge 20.000 8/7/2024 CHF 34.940
Leonteq Securities AG 28.000 9/5/2024 CHF 45.900
HSBC Trinkaus & Burkh 17.000 6/28/2024 EUR 37.430
Leonteq Securities AG 14.000 7/3/2024 CHF 16.240
UniCredit Bank GmbH 13.900 11/22/2024 EUR 44.950
UniCredit Bank GmbH 14.300 8/23/2024 EUR 40.720
HSBC Trinkaus & Burkh 17.600 9/27/2024 EUR 36.080
HSBC Trinkaus & Burkh 15.100 12/30/2024 EUR 39.590
UniCredit Bank GmbH 10.700 2/3/2025 EUR 24.510
HSBC Trinkaus & Burkh 12.500 12/30/2024 EUR 41.920
HSBC Trinkaus & Burkh 10.800 12/30/2024 EUR 44.220
UniCredit Bank GmbH 10.700 2/17/2025 EUR 24.790
BNP Paribas SA 10.000 7/26/2027 USD 10.350
Leonteq Securities AG 24.000 7/3/2024 CHF 38.410
HSBC Trinkaus & Burkh 18.300 9/27/2024 EUR 43.540
Sintekom TH OOO 13.000 1/23/2025 RUB 16.900
Swissquote Bank SA 27.700 9/4/2024 CHF 51.020
UBS AG/London 10.000 5/14/2024 USD 9.975
HSBC Trinkaus & Burkh 15.500 6/27/2025 EUR 40.110
EFG International Fin 10.300 8/23/2024 USD 31.670
Societe Generale SA 16.000 7/3/2024 USD 24.400
Landesbank Baden-Wuer 11.000 6/28/2024 EUR 30.460
Corner Banca SA 13.000 4/3/2024 CHF 35.200
UBS AG/London 13.000 9/30/2024 CHF 20.340
Nordea Bank Abp 10.000 7/20/2027 SEK 51.250
Bank Vontobel AG 13.500 1/8/2025 CHF 27.000
UBS AG/London 16.500 7/22/2024 CHF 19.340
UBS AG/London 21.600 8/2/2027 SEK 50.120
UniCredit Bank GmbH 14.500 11/22/2024 EUR 42.040
UniCredit Bank GmbH 13.800 2/28/2025 EUR 45.300
UniCredit Bank GmbH 14.700 8/23/2024 EUR 37.580
UniCredit Bank GmbH 14.500 2/28/2025 EUR 44.490
UniCredit Bank GmbH 10.300 9/27/2024 EUR 31.370
UniCredit Bank GmbH 19.400 6/28/2024 EUR 32.700
UniCredit Bank GmbH 13.800 9/27/2024 EUR 38.480
UniCredit Bank GmbH 18.000 9/27/2024 EUR 35.500
Leonteq Securities AG 24.000 1/13/2025 CHF 36.950
UniCredit Bank GmbH 13.700 9/27/2024 EUR 41.770
UniCredit Bank GmbH 14.800 9/27/2024 EUR 40.560
UniCredit Bank GmbH 14.800 9/27/2024 EUR 37.540
UniCredit Bank GmbH 15.800 9/27/2024 EUR 36.720
UniCredit Bank GmbH 16.900 9/27/2024 EUR 36.060
UniCredit Bank GmbH 19.100 9/27/2024 EUR 35.030
UniCredit Bank GmbH 20.000 12/31/2024 EUR 39.260
Leonteq Securities AG 21.000 8/14/2024 CHF 38.750
Nordea Bank Abp 10.100 7/20/2028 SEK 53.330
Bank Vontobel AG 20.500 11/4/2024 CHF 44.400
Leonteq Securities AG 22.000 8/14/2024 CHF 44.520
Bank Vontobel AG 12.000 9/30/2024 EUR 21.900
UBS AG/London 14.250 8/19/2024 CHF 28.960
UBS AG/London 18.000 4/8/2024 CHF 38.550
UniCredit Bank GmbH 10.500 9/23/2024 EUR 31.190
Fast Credit Capital U 11.500 7/13/2024 AMD 0.000
Armenian Economy Deve 10.500 5/4/2025 AMD 0.000
UniCredit Bank GmbH 16.550 8/18/2025 USD 32.600
Leonteq Securities AG 25.000 3/27/2024 CHF 23.950
Leonteq Securities AG 18.000 3/27/2024 CHF 28.020
Zurcher Kantonalbank 15.000 4/18/2024 CHF 46.150
BNP Paribas Emissions 16.000 6/27/2024 EUR 48.240
BNP Paribas Emissions 13.000 6/27/2024 EUR 49.060
Vontobel Financial Pr 24.750 6/28/2024 EUR 31.080
Bank Vontobel AG 18.000 7/19/2024 CHF 37.600
Leonteq Securities AG 27.000 7/24/2024 CHF 17.830
Raiffeisen Switzerlan 20.000 6/19/2024 CHF 33.290
Leonteq Securities AG 19.000 6/10/2024 CHF 31.110
Leonteq Securities AG 15.000 4/30/2024 CHF 43.750
Leonteq Securities AG 24.000 3/27/2024 CHF 24.000
ACBA Bank OJSC 11.000 12/1/2025 AMD 10.022
Leonteq Securities AG 23.000 3/27/2024 CHF 23.480
Swissquote Bank SA 25.080 6/12/2024 CHF 34.870
Raiffeisen Switzerlan 16.000 6/12/2024 CHF 26.560
Vontobel Financial Pr 19.500 6/28/2024 EUR 49.030
Raiffeisen Switzerlan 18.000 6/12/2024 CHF 34.320
Raiffeisen Schweiz Ge 20.000 6/12/2024 CHF 35.330
Zurcher Kantonalbank 13.000 6/7/2024 CHF 43.910
Zurcher Kantonalbank 17.500 6/7/2024 CHF 46.520
Bank Vontobel AG 21.000 6/10/2024 CHF 32.700
Basler Kantonalbank 18.000 6/17/2024 CHF 31.390
HSBC Trinkaus & Burkh 17.300 9/27/2024 EUR 38.400
HSBC Trinkaus & Burkh 13.400 12/30/2024 EUR 43.350
Leonteq Securities AG 22.000 4/3/2024 CHF 28.280
Corner Banca SA 24.000 4/3/2024 CHF 25.940
Zurcher Kantonalbank 21.000 5/17/2024 CHF 45.740
Vontobel Financial Pr 21.000 6/28/2024 EUR 46.620
Vontobel Financial Pr 18.000 6/28/2024 EUR 48.660
Swissquote Bank SA 26.980 6/5/2024 CHF 33.140
Leonteq Securities AG 27.000 5/30/2024 CHF 13.890
Leonteq Securities AG 28.000 5/30/2024 CHF 36.130
Bank Vontobel AG 24.000 3/25/2024 CHF 22.500
Bank Vontobel AG 20.750 6/24/2024 CHF 74.900
Leonteq Securities AG 15.000 4/3/2024 CHF 12.980
Leonteq Securities AG 24.000 4/3/2024 CHF 21.630
Leonteq Securities AG 21.000 6/5/2024 CHF 35.320
Raiffeisen Schweiz Ge 19.500 6/6/2024 CHF 36.200
Zurcher Kantonalbank 18.000 3/28/2024 CHF 46.460
Zurcher Kantonalbank 24.250 3/28/2024 USD 36.910
Raiffeisen Schweiz Ge 20.000 4/3/2024 CHF 24.970
Raiffeisen Schweiz Ge 18.000 4/3/2024 CHF 35.190
UniCredit Bank GmbH 13.200 6/28/2024 EUR 47.910
UniCredit Bank GmbH 18.000 6/28/2024 EUR 43.440
UniCredit Bank GmbH 19.800 6/28/2024 EUR 39.810
Raiffeisen Switzerlan 19.000 3/27/2024 CHF 31.370
UBS AG/London 21.250 4/2/2024 CHF 20.320
Ameriabank CJSC 10.000 2/20/2025 AMD 9.340
Bank Vontobel AG 23.000 6/4/2024 CHF 34.800
Leonteq Securities AG 18.000 9/11/2024 CHF 22.760
Raiffeisen Schweiz Ge 20.000 9/11/2024 CHF 40.540
Zurcher Kantonalbank 15.000 7/12/2024 CHF 49.360
UBS AG/London 19.500 7/19/2024 CHF 40.500
Zurcher Kantonalbank 12.000 4/26/2024 EUR 49.130
UBS AG/London 18.750 4/26/2024 CHF 24.880
Raiffeisen Schweiz Ge 18.400 5/2/2024 CHF 26.630
Bank Vontobel AG 10.500 7/29/2024 EUR 48.200
Bank Vontobel AG 23.500 4/29/2024 CHF 26.600
UBS AG/London 12.000 11/4/2024 EUR 50.300
Basler Kantonalbank 26.000 5/8/2024 CHF 30.830
Bank Vontobel AG 22.000 7/1/2024 CHF 40.600
Basler Kantonalbank 24.000 7/5/2024 CHF 42.030
Erste Group Bank AG 14.500 8/2/2024 EUR 51.550
UBS AG/London 14.250 7/12/2024 EUR 16.000
Leonteq Securities AG 20.000 8/28/2024 CHF 20.720
UniCredit Bank GmbH 14.700 11/22/2024 EUR 43.740
UniCredit Bank GmbH 17.800 6/28/2024 EUR 31.200
UniCredit Bank GmbH 19.200 6/28/2024 EUR 30.540
UniCredit Bank GmbH 19.700 12/31/2024 EUR 37.370
Leonteq Securities AG 24.000 5/17/2024 CHF 54.000
EFG International Fin 15.000 7/12/2024 CHF 46.670
Nordea Bank Abp 10.910 7/20/2029 SEK 52.540
Leonteq Securities AG 24.000 5/22/2024 CHF 36.880
Leonteq Securities AG 24.000 6/5/2024 CHF 36.230
Leonteq Securities AG 21.000 5/22/2024 USD 26.550
Vontobel Financial Pr 16.500 6/28/2024 EUR 45.500
Basler Kantonalbank 17.000 7/19/2024 CHF 40.570
Leonteq Securities AG 26.000 5/22/2024 CHF 29.630
National Mortgage Co 12.000 3/30/2026 AMD 0.000
Leonteq Securities AG 28.000 6/5/2024 CHF 32.760
Leonteq Securities AG 22.000 4/17/2024 CHF 28.750
Leonteq Securities AG 26.000 4/17/2024 CHF 27.150
Swissquote Bank SA 21.550 4/17/2024 CHF 36.700
Leonteq Securities AG 24.000 7/17/2024 CHF 34.170
Leonteq Securities AG 20.000 5/2/2024 CHF 25.750
Vontobel Financial Pr 10.750 6/28/2024 EUR 47.600
Raiffeisen Switzerlan 17.500 5/30/2024 CHF 37.640
Raiffeisen Switzerlan 16.000 5/22/2024 CHF 25.670
Raiffeisen Switzerlan 20.000 5/22/2024 CHF 35.770
UniCredit Bank GmbH 13.400 9/27/2024 EUR 43.570
UBS AG/London 25.000 7/12/2024 CHF 40.850
Bank Julius Baer & Co 13.600 6/17/2024 CHF 49.400
Bank Julius Baer & Co 15.300 6/17/2024 EUR 49.450
Raiffeisen Schweiz Ge 16.000 4/18/2024 CHF 35.700
Vontobel Financial Pr 14.500 6/28/2024 EUR 47.910
Vontobel Financial Pr 12.000 6/28/2024 EUR 50.350
Vontobel Financial Pr 19.500 6/28/2024 EUR 43.880
Vontobel Financial Pr 11.000 6/28/2024 EUR 39.540
DZ Bank AG Deutsche Z 16.900 6/28/2024 EUR 47.680
Ist Saiberian Petrole 14.000 12/28/2024 RUB 9.930
UniCredit Bank GmbH 14.300 6/28/2024 EUR 50.420
Bank Vontobel AG 10.000 9/2/2024 EUR 48.700
Bank Vontobel AG 22.000 5/31/2024 CHF 21.800
Leonteq Securities AG 19.000 6/3/2024 CHF 49.680
Raiffeisen Switzerlan 10.800 6/5/2024 EUR 50.410
Bank Julius Baer & Co 12.720 2/17/2025 CHF 39.100
UBS AG/London 10.000 3/23/2026 USD 27.530
Leonteq Securities AG 25.000 9/5/2024 EUR 45.730
Swissquote Bank SA 29.000 6/4/2024 CHF 40.390
Leonteq Securities AG 24.000 9/4/2024 CHF 44.860
UniCredit Bank GmbH 19.100 12/31/2024 EUR 39.550
Leonteq Securities AG 22.000 9/18/2024 CHF 52.580
UniCredit Bank GmbH 17.000 6/28/2024 EUR 27.910
UniCredit Bank GmbH 19.500 6/28/2024 EUR 26.990
DZ Bank AG Deutsche Z 23.200 6/28/2024 EUR 47.040
Leonteq Securities AG 30.000 5/8/2024 CHF 29.770
Swissquote Bank SA 16.380 7/31/2024 CHF 16.490
Basler Kantonalbank 18.000 6/21/2024 CHF 35.220
UniCredit Bank GmbH 18.800 12/31/2024 EUR 37.530
Bank Vontobel AG 20.000 6/26/2024 CHF 31.900
Bank Vontobel AG 13.000 6/26/2024 CHF 11.700
UniCredit Bank GmbH 18.000 12/31/2024 EUR 34.670
Raiffeisen Schweiz Ge 20.000 9/25/2024 CHF 30.070
UniCredit Bank GmbH 15.800 6/28/2024 EUR 28.470
UniCredit Bank GmbH 18.200 6/28/2024 EUR 27.410
DZ Bank AG Deutsche Z 10.300 4/26/2024 EUR 44.900
UBS AG/London 18.750 4/15/2024 CHF 22.360
UniCredit Bank GmbH 17.200 12/31/2024 EUR 34.800
UniCredit Bank GmbH 18.800 12/31/2024 EUR 34.590
UniCredit Bank GmbH 19.600 12/31/2024 EUR 34.550
UniCredit Bank GmbH 15.000 8/23/2024 EUR 39.270
Vontobel Financial Pr 18.000 9/27/2024 EUR 29.960
Zurcher Kantonalbank 15.000 4/3/2024 CHF 45.100
Swissquote Bank SA 22.120 4/11/2024 CHF 33.490
Swissquote Bank SA 21.060 4/11/2024 CHF 13.490
Swissquote Bank SA 27.050 7/31/2024 CHF 45.090
Raiffeisen Switzerlan 20.000 5/10/2024 CHF 37.310
Leonteq Securities AG 24.000 8/14/2024 CHF 41.500
Basler Kantonalbank 22.000 9/6/2024 CHF 41.600
HSBC Trinkaus & Burkh 18.750 9/27/2024 EUR 32.760
UBS AG/London 16.000 4/19/2024 CHF 31.250
HSBC Trinkaus & Burkh 11.250 6/27/2025 EUR 42.770
HSBC Trinkaus & Burkh 15.000 6/28/2024 EUR 33.900
HSBC Trinkaus & Burkh 20.250 6/28/2024 EUR 28.790
HSBC Trinkaus & Burkh 17.500 12/30/2024 EUR 36.320
Leonteq Securities AG 26.000 7/3/2024 CHF 41.290
Swissquote Bank SA 24.040 9/11/2024 CHF 42.730
Leonteq Securities AG 22.000 9/11/2024 CHF 41.150
Leonteq Securities AG 20.000 7/3/2024 CHF 18.340
Leonteq Securities AG 20.000 7/3/2024 CHF 41.610
Societe Generale SA 15.000 9/29/2025 USD 11.300
Bank Vontobel AG 10.000 8/19/2024 CHF 13.900
Bank Vontobel AG 19.000 4/9/2024 CHF 16.200
HSBC Trinkaus & Burkh 19.000 6/28/2024 EUR 31.310
HSBC Trinkaus & Burkh 11.000 6/28/2024 EUR 39.570
Leonteq Securities AG 28.000 8/21/2024 CHF 41.310
Landesbank Baden-Wuer 15.000 8/23/2024 EUR 39.110
Leonteq Securities AG 22.000 8/7/2024 CHF 38.650
Leonteq Securities AG 24.000 8/21/2024 CHF 42.770
Raiffeisen Switzerlan 12.300 8/21/2024 CHF 17.500
DZ Bank AG Deutsche Z 11.800 9/27/2024 EUR 49.630
Vontobel Financial Pr 13.500 6/28/2024 EUR 49.210
Vontobel Financial Pr 16.000 6/28/2024 EUR 46.730
Leonteq Securities AG 23.000 5/15/2024 CHF 41.360
Vontobel Financial Pr 19.000 6/28/2024 EUR 44.860
Basler Kantonalbank 21.000 7/5/2024 CHF 41.430
Corner Banca SA 23.000 8/21/2024 CHF 44.590
Leonteq Securities AG 24.000 7/10/2024 CHF 43.540
Citigroup Global Mark 14.650 7/22/2024 HKD 36.775
Raiffeisen Switzerlan 20.000 7/10/2024 CHF 40.740
Raiffeisen Schweiz Ge 20.000 8/28/2024 CHF 23.170
Swissquote Bank SA 26.120 7/10/2024 CHF 44.260
Swissquote Bank SA 23.200 8/28/2024 CHF 44.600
Leonteq Securities AG 22.000 8/28/2024 CHF 45.840
Vontobel Financial Pr 11.000 6/28/2024 EUR 45.880
Vontobel Financial Pr 14.000 6/28/2024 EUR 46.620
UniCredit Bank GmbH 19.300 12/31/2024 EUR 40.700
Leonteq Securities AG 27.600 6/26/2024 CHF 32.020
Leonteq Securities AG 21.600 6/26/2024 CHF 14.890
Vontobel Financial Pr 12.500 6/28/2024 EUR 46.250
Leonteq Securities AG 21.000 7/17/2024 CHF 45.860
Raiffeisen Switzerlan 20.000 6/26/2024 CHF 34.640
UniCredit Bank GmbH 19.500 12/31/2024 EUR 44.310
Swissquote Bank SA 26.040 7/17/2024 CHF 45.580
Leonteq Securities AG 23.000 6/26/2024 CHF 32.760
Leonteq Securities AG 20.000 9/26/2024 USD 33.130
Bank Vontobel AG 15.500 11/18/2024 CHF 41.000
Corner Banca SA 18.500 9/23/2024 CHF 18.410
UniCredit Bank GmbH 19.800 6/28/2024 EUR 33.990
Swissquote Bank SA 21.320 7/17/2024 CHF 46.000
BNP Paribas Issuance 19.000 9/18/2026 EUR 0.820
BNP Paribas Issuance 20.000 9/18/2026 EUR 31.500
Leonteq Securities AG 23.000 12/27/2024 CHF 36.930
EFG International Fin 11.120 12/27/2024 EUR 30.070
UniCredit Bank GmbH 11.900 6/28/2024 EUR 49.510
UniCredit Bank GmbH 18.900 6/28/2024 EUR 41.510
Bank Vontobel AG 25.500 4/3/2024 CHF 25.700
Bank Vontobel AG 19.000 4/3/2024 CHF 34.700
Leonteq Securities AG 24.000 7/10/2024 CHF 38.470
Leonteq Securities AG 26.000 7/10/2024 CHF 39.580
UBS AG/London 13.500 8/15/2024 CHF 47.150
DZ Bank AG Deutsche Z 11.200 6/28/2024 EUR 43.320
Bank Vontobel AG 12.000 6/10/2024 CHF 42.600
Citigroup Global Mark 25.530 2/18/2025 EUR 2.320
Bank Vontobel AG 20.000 4/15/2024 CHF 28.800
Leonteq Securities AG 11.000 5/13/2024 CHF 39.540
Leonteq Securities AG 27.500 5/2/2024 CHF 28.160
Bank Vontobel AG 10.000 5/28/2024 CHF 10.800
Leonteq Securities AG 28.000 5/2/2024 CHF 31.320
Societe Generale Effe 13.250 4/26/2024 EUR 45.350
Leonteq Securities AG 19.000 5/24/2024 CHF 12.790
UBS AG/London 11.250 9/16/2024 EUR 49.700
UniCredit Bank GmbH 13.500 6/28/2024 EUR 51.940
Bank Vontobel AG 11.000 9/10/2024 EUR 50.800
HSBC Trinkaus & Burkh 14.800 12/30/2024 EUR 42.030
Leonteq Securities AG 23.400 6/19/2024 CHF 33.810
Zurcher Kantonalbank 16.000 6/14/2024 CHF 43.720
Zurcher Kantonalbank 17.300 4/19/2024 USD 47.690
UBS AG/London 18.500 6/14/2024 CHF 31.000
Leonteq Securities AG 23.000 7/24/2024 CHF 42.440
Zurcher Kantonalbank 17.400 4/19/2024 USD 43.380
Zurcher Kantonalbank 16.700 4/19/2024 CHF 47.320
UBS AG/London 15.750 10/21/2024 CHF 43.500
Leonteq Securities AG 15.000 7/24/2024 CHF 16.480
Raiffeisen Schweiz Ge 16.000 7/24/2024 CHF 45.970
DZ Bank AG Deutsche Z 24.300 6/28/2024 EUR 44.580
Leonteq Securities AG 20.000 6/19/2024 CHF 32.440
Leonteq Securities AG 30.000 4/24/2024 CHF 23.720
Leonteq Securities AG 15.000 9/12/2024 USD 22.820
Zurcher Kantonalbank 18.000 4/17/2024 CHF 25.390
Basler Kantonalbank 16.000 6/14/2024 CHF 25.890
EFG International Fin 24.000 6/14/2024 CHF 36.080
Leonteq Securities AG 28.000 4/11/2024 CHF 22.910
UBS AG/London 14.500 10/14/2024 CHF 41.300
Leonteq Securities AG 20.000 4/24/2024 CHF 37.360
Leonteq Securities AG 16.000 6/20/2024 CHF 27.210
UniCredit Bank GmbH 19.700 6/28/2024 EUR 38.130
UniCredit Bank GmbH 18.600 12/31/2024 EUR 45.100
Ukraine Government Bo 12.500 10/12/2029 UAH 39.473
Ukraine Government Bo 11.000 4/20/2037 UAH 25.825
Ukraine Government Bo 11.000 4/1/2037 UAH 26.160
Ukraine Government Bo 11.000 4/8/2037 UAH 26.123
Ukraine Government Bo 10.710 4/26/2028 UAH 41.160
Ukraine Government Bo 11.000 4/23/2037 UAH 26.049
Ukraine Government Bo 11.110 3/29/2028 UAH 42.358
Ukraine Government Bo 11.570 3/1/2028 UAH 43.593
Ukraine Government Bo 11.580 2/2/2028 UAH 43.949
Teksid Aluminum Luxem 12.375 7/15/2011 EUR 0.619
Lehman Brothers Treas 13.500 11/28/2008 USD 0.100
Credit Agricole Corpo 10.500 2/16/2027 TRY 47.891
Lehman Brothers Treas 14.900 9/15/2008 EUR 0.100
Deutsche Bank AG/Lond 12.780 3/16/2028 TRY 44.142
Lehman Brothers Treas 10.000 3/27/2009 USD 0.100
Lehman Brothers Treas 10.500 8/9/2010 EUR 0.100
Lehman Brothers Treas 11.000 6/29/2009 EUR 0.100
Credit Agricole Corpo 10.200 8/6/2026 TRY 50.470
Deutsche Bank AG/Lond 14.900 5/30/2028 TRY 47.484
Credit Agricole Corpo 11.190 3/12/2027 TRY 48.784
Sidetur Finance BV 10.000 4/20/2016 USD 0.223
Credit Agricole Corpo 10.320 7/22/2026 TRY 50.877
Credit Agricole Corpo 11.640 3/24/2027 TRY 49.448
Lehman Brothers Treas 11.000 12/19/2011 USD 0.100
Lehman Brothers Treas 15.000 3/30/2011 EUR 0.100
Lehman Brothers Treas 12.000 7/13/2037 JPY 0.100
Lehman Brothers Treas 11.000 12/20/2017 AUD 0.100
Lehman Brothers Treas 11.000 12/20/2017 AUD 0.100
Lehman Brothers Treas 11.000 12/20/2017 AUD 0.100
Lehman Brothers Treas 13.000 7/25/2012 EUR 0.100
Lehman Brothers Treas 23.300 9/16/2008 USD 0.100
Lehman Brothers Treas 11.000 7/4/2011 CHF 0.100
Lehman Brothers Treas 18.250 10/2/2008 USD 0.100
Lehman Brothers Treas 16.000 11/9/2008 USD 0.100
Lehman Brothers Treas 10.600 4/22/2014 MXN 0.100
Lehman Brothers Treas 13.500 6/2/2009 USD 0.100
Lehman Brothers Treas 16.200 5/14/2009 USD 0.100
Lehman Brothers Treas 15.000 6/4/2009 CHF 0.100
Lehman Brothers Treas 17.000 6/2/2009 USD 0.100
Lehman Brothers Treas 10.000 5/22/2009 USD 0.100
Lehman Brothers Treas 10.000 10/23/2008 USD 0.100
Lehman Brothers Treas 10.000 10/22/2008 USD 0.100
Lehman Brothers Treas 14.900 11/16/2010 EUR 0.100
Lehman Brothers Treas 16.000 10/8/2008 CHF 0.100
Lehman Brothers Treas 13.000 2/16/2009 CHF 0.100
Lehman Brothers Treas 11.000 2/16/2009 CHF 0.100
Lehman Brothers Treas 10.000 2/16/2009 CHF 0.100
Lehman Brothers Treas 13.150 10/30/2008 USD 0.100
Lehman Brothers Treas 13.000 12/14/2012 USD 0.100
Lehman Brothers Treas 11.250 12/31/2008 USD 0.100
Lehman Brothers Treas 14.100 11/12/2008 USD 0.100
Lehman Brothers Treas 16.800 8/21/2009 USD 0.100
Lehman Brothers Treas 12.400 6/12/2009 USD 0.100
Lehman Brothers Treas 11.000 7/4/2011 USD 0.100
Lehman Brothers Treas 10.000 6/17/2009 USD 0.100
Lehman Brothers Treas 13.432 1/8/2009 ILS 0.100
Lehman Brothers Treas 12.000 7/4/2011 EUR 0.100
Lehman Brothers Treas 16.000 12/26/2008 USD 0.100
*********
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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contact Peter Chapman at 215-945-7000.
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