/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/240610.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, June 10, 2024, Vol. 25, No. 116 Headlines F R A N C E ALTICE FRANCE: S&P Corrects Senior Secured Notes Rating to 'CCC+' G E R M A N Y ONE HOTELS: Fitch Assigns 'B+' LongTerm IDR, Outlook Stable I R E L A N D CASTLELAKE AVIATION: Fitch Affirms 'BB' IDR, Outlook Stable GRIFFIN GLOBAL: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable PALMER SQUARE 2024-1: Fitch Assigns 'B-sf' Rating on Class F Notes RRE 12 LOAN: S&P Assign Prelim. BB-(sf) Rating on Cl. D-R Notes SEGOVIA EUROPEAN 4-2017: Moody's Affirms B2 Rating on Cl. F Notes TRINITAS EURO III: Fitch Assigns B-(EXP)sf Rating on Cl. F-R Notes I T A L Y FIBER BIDCO: Fitch Rates EUR430MM Secured Notes 'BB-' GOLDEN GOOSE: Fitch Alters Outlook on B+ LongTerm IDR to Positive WEBUILD SPA: Fitch Alters Outlook on 'BB' LongTerm IDR to Positive N E T H E R L A N D S LOPAREX MIDCO: $233.9MM Bank Debt Trades at 16% Discount R U S S I A TBC BANK: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable S P A I N CERVANTES TOPCO: S&P Assigns Preliminary 'B' ICR, Outlook Stable T U R K E Y ISTANBUL: Moody's Affirms 'B3' Issuer & Sr. Unsecured Debt Ratings U N I T E D K I N G D O M BOWIE CONSTRUCTION: Goes Into Administration BOYD INTERNATIONAL: Goes Into Liquidation, Halts Operations L1R HB FINANCE: GBP450MM Bank Debt Trades at 22% Discount MACQUARIE AIRFINANCE: Fitch Hikes IDR to 'BB+', Outlook Stable MORRISON MCCONNELL: Enters Administration, Seeks Buyer POP BRIXTON: Falls Into Administration SALTEES PROPERTIES: Goes Into Administration SPORTIVE HQ: Enters Administration, Halts Trading VAGABOND WINES: Bought Out of Administration by Majestic X X X X X X X X [*] BOND PRICING: For the Week June 3 to June 7, 2024 - - - - - =========== F R A N C E =========== ALTICE FRANCE: S&P Corrects Senior Secured Notes Rating to 'CCC+' ----------------------------------------------------------------- S&P Global Ratings has corrected its rating on France-based Altice France S.A.'s senior secured debt -- specifically, the EUR350 million 11.5% notes due 2027 -- to 'CCC+'. Due to an error, S&P Global Ratings had incorrectly lowered its rating on the EUR350 million 11.5% notes due 2027 to 'CCC'. The issue rating on this instrument is 'CCC+', in-line with its long-term issuer credit rating on Altice France SA and S&P's ratings on its other senior secured notes. S&P has corrected this error. ============= G E R M A N Y ============= ONE HOTELS: Fitch Assigns 'B+' LongTerm IDR, Outlook Stable ----------------------------------------------------------- Fitch Ratings has assigned One Hotels GmbH (Motel One) a final Long-Term Issuer Default Rating (IDR) of 'B+' with a Stable Outlook and senior secured debt rating of 'BB-' with a Recovery Rating of 'RR3'. The assignment of final ratings follows the issuance of EUR500 million senior secured notes and a EUR800 million senior secured term loan B (TLB), with documentation conforming to information previously received. The 'B+' rating reflects Motel One's moderate business scale and diversification balanced by superior profitability and expected positive free cash flow (FCF) generation. It also assumes the company will deleverage over the next three years as post-transaction leverage is high and outside of the range commensurate with a 'B+' rating. This is based on its expectation of smooth execution of Motel One's growth strategy and the continuation of strong performance of the existing asset base. KEY RATING DRIVERS Moderate Scale and Diversification: Fitch assesses Motel One's business profile as in line with the low 'BB' category rating due to its business scale and diversification. It operates primarily under one brand, with some diversification across western Europe, although the main German market accounted for 65% of revenue in 2023. It had 26,470 rooms in 2023, more in line with the 'B' category median but has a superior EBITDAR margin, which translates into EBITDAR of more than EUR400 million, close to the 'BB' category median. Material Business Growth: Pro-forma for the carve-out of its real-estate assets, Fitch estimates that Motel One's revenue grew by a third in 2023, and Fitch-adjusted EBITDA increased to more than EUR230 million. This was driven by a post-pandemic business recovery, pricing power and hotel network expansion. Fitch believes that growth will decelerate from 2024 but remain high versus other western European peers due to new hotel openings and its assumption that Motel One will retain its ability to price rooms above inflation. Furthermore, Fitch expects a positive impact from international travel to Germany, which lagged other markets in 2023, and is likely to benefit from the European football championship competition in 2024. Manageable Strategy Execution Risks: Motel One's strategy relies on the expansion of its hotel portfolio through leasing new properties, which does not require upfront capex, unlike asset-heavy operators that invest in hotel construction. Its rating case assumes an increase in the number of hotels to 117 in 2027 (2023: 94), in line with the company's secured pipeline, which bears limited execution risks as contracts with property owners are already signed. Motel One has a record of new hotels quickly reaching profitability, and the pipeline does not consider any large assets in new markets. Fitch also assumes that hotels will be opened on time as delays have mostly been contained to within three months in the past couple of years. Superior Profitability: Motel One's EBITDAR margin of around 50% is the highest in Fitch's global lodging portfolio, with the exception of Wyndham Hotels & Resorts Inc., for which fully franchised operations lead to EBITDAR margins of around 80%. Motel One's superior profitability in comparison with asset-heavy peers results from its prime locations, standardised rooms and operating efficiencies. Fitch expects high profit margins to translate into positive pre-dividend FCF, despite higher interest payments for the new debt. EBITDA Margin Improvement: Its rating case assumes a gradual EBITDA margin improvement over 2024-2027 due to pricing actions and an increase in the number of fully ramped-up hotels relative to new openings. Fitch also expects margins to benefit from portfolio composition changes towards markets with higher rates and occupancies, such as London and Paris. These strong and mildly growing operating margins are critical to the company's deleveraging trajectory, underpinning the 'B+' IDR. Positive FCF, Self-Funded Growth: The 'B+' IDR reflects Motel One's sustained positive FCF, supported by strong operating margins, and its ability to self-fund its medium-term expansion. This inherent FCF generating capacity balances its limited scale and diversification, and differentiates it from lower-rated sector peers. Deteriorating FCF would signal structural weaknesses of Motel One's operating risk or a more aggressive financial policy, and would put pressure on the rating. No Dividend Commitment: The company intends to operate with EUR100 million-EUR150 million of cash on its balance sheet, with excess cash potentially used for bolt-on M&A, investments in new hotels or dividends. This capital allocation would generally be neutral for the ratings as Fitch considers gross leverage in its analysis, although dividend distributions would affect FCF. Motel One has been paying dividends from internally-generated cash but has no dividend commitment to its shareholders. Its analysis assumes some recurring dividends from 2025, subject to the limitation provisions of the financing documentation, as well as taking into account the measured financial policy of the company's shareholders. Strong Deleveraging Capacity: Motel One's 'B+' rating is conditional on rapid deleveraging over the next three years. Fitch estimates EBITDAR leverage at 6.3x in 2024, which is high for the rating, but Fitch expects the rating headroom to increase substantially over 2025-2026 as EBITDAR growth will lead to organic deleveraging. DERIVATION SUMMARY In terms of number of rooms and business size, Motel One is significantly smaller than higher-rated globally diversified peers such as Accor SA (BBB-/Positive), Hyatt Hotels Corporation (BBB-/Stable), and Wyndham Hotels & Resorts Inc. (BB+/Stable). It also has a weaker financial structure, with higher leverage and more limited financial flexibility. This results in significant rating differential with these peers. Fitch views Minor Hotels Europe & Americas, S.A. (NH Hotel, BB-/Stable) as the closest peer of Motel One, due to its predominantly European operations and similar EBITDAR, despite having more rooms. Motel One is rated one notch lower than NH Hotel, which reflects NH Hotel's lower financial leverage and stronger pre-dividend FCF generation. Motel One is rated two notches above Greek hotel operator Sani/Ikos Group Newco S.C.A. (B-/Stable) due to its larger scale, better diversification, stronger FCF profile and lower leverage. Motel One has the same rating as Dubai-based operator FIVE Holdings (BVI) Limited (B+/Stable), despite being larger, more profitable and better-diversified. This is because Fitch expects stronger deleveraging for FIVE. KEY ASSUMPTIONS - Sales growth CAGR of around 12% for 2024-2027; - Organic growth is supported by a steady improvement in occupancy rates, alongside above-inflation growth in the room daily rate; - EBITDAR margins steadily improving towards 51.6% in 2027 (2023: around 50%), supported by a strong focus on cost management, fast turnaround of new hotels to profitability, and improving occupancy rates at existing sites; - No significant working-capital outflows to 2027; - Capex at 6%-10% of revenue a year, for maintenance of existing sites including redesign and new site openings; and - Annual dividend payments of EUR75 million in 2024 (already paid) followed by assumed payout at 50% of consolidated net income. RECOVERY ANALYSIS Fitch assumse that the company would be reorganised as a going-concern (GC) in bankruptcy rather than liquidated. In its bespoke recovery analysis, Fitch estimates GC EBITDA available to creditors of around EUR180 million. This reflects Fitch's view of a sustainable, post-reorganisation EBITDA level on which it bases the enterprise valuation (EV). Distress would likely arise from an erosion of the brand value, leading to a loss of market share in an inflationary cost environment. At the GC EBITDA, the company will generate reduced operating cash flow that would provide limited room for investments in growth capex. Fitch has applied a 6.0x EV/EBITDA multiple to the GC EBITDA to calculate a post-reorganisation EV. This multiple reflects the company's strong brand and business model concept, prime inner-city locations and high profitability. This is 0.5x higher than International Park Holdings' (Portaventura) given the latter's single-location asset and lower diversification. Motel One's senior secured debt of EUR1.3 billion consists of EUR800 million TLB and EUR500 million notes, which rank equally among themselves and with EUR100 million revolving credit facility (RCF), which Fitch assumes to be fully drawn in a default. Its waterfall analysis generates a ranked recovery for Motel One's senior secured debt in the 'RR3' band, indicating a 'BB-' instrument rating, one notch above the IDR. The waterfall analysis output percentage on current metrics and assumptions is 69%. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: - Successful growth strategy translating into double-digit revenue growth and EBITDAR expansion; - EBITDAR leverage below 5.5x on a sustained basis; - EBITDAR fixed-charge coverage above 1.8x on a sustained basis; and - Consistently positive FCF. Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: - Material slowdown in revenue growth, with the EBITDAR margin staying flat or decreasing; - EBITDAR leverage above 6x on a sustained basis; - EBITDAR fixed-charge coverage below 1.5x on a sustained basis; and - Neutral to negative FCF. LIQUIDITY AND DEBT STRUCTURE Comfortable Liquidity: Pro-forma to the recent transaction, Fitch estimates the group has around EUR130 million cash on the balance sheet, supported by an undrawn RCF of EUR100 million. This liquidity position, combined with the group's highly cash-generative business model, is judged sufficient to support the group's expansion plans and cover financing costs without the need for external funding. The group also has a negative working capital position so typically generates cash as it expands. Fitch restricts EUR20 million of reported cash to account for the minimum cash required for day-to-day operations, and to cover the group's intra-year swings in working capital. ISSUER PROFILE Motel One is a hotel operator with a growing market position within its niche "affordable design" segment in western Europe. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. 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 ----------- ------ -------- ----- One Hotels GmbH LT IDR B+ New Rating B+(EXP) senior secured LT BB- New Rating RR3 BB-(EXP) ============= I R E L A N D ============= CASTLELAKE AVIATION: Fitch Affirms 'BB' IDR, Outlook Stable ----------------------------------------------------------- Fitch Ratings has affirmed the Issuer Default Ratings (IDRs) of Castlelake Aviation Limited (CA) and its wholly owned subsidiaries, Castlelake Aviation Finance DAC (CAF) and Castlelake Aviation One DAC (CAO) at 'BB'. The Rating Outlook is Stable. Fitch has also affirmed the ratings on CAO's senior secured term loan B and CAF's senior secured revolving credit facility at 'BB+' and CAF's senior unsecured note rating at 'BB'. These rating actions are being taken in conjunction with Fitch's global aircraft leasing sector review, covering 10 publicly rated firms. KEY RATING DRIVERS The ratings affirmation reflects CA's young aircraft fleet, target leverage commensurate with the risk profile of the portfolio, and adequate liquidity metrics. In addition, the business profile benefits from its affiliation with Castlelake LP, its external manager, which has an established position as a lessor of midlife and older commercial aircraft. Rating constraints include the prevailing execution risk arising from the issuer's aggressive growth strategy and financial targets. The ratings are also constrained by CA's largely secured funding profile, an evolving but still concentrated fleet portfolio, including a lower proportion of narrowbody aircraft relative to peers, a higher than average exposure to weaker credit airlines, and a limited standalone operating track record. Fitch also notes potential governance and conflict of interest risks associated with CA's externally-managed business model, the limited number of independent board members and ownership by a fixed-life private fund structure. Rating constraints applicable to the aircraft leasing industry more broadly include the monoline nature of the business, vulnerability to exogenous shocks, potential exposure to residual value risk, sensitivity to oil prices, inflation, and unemployment, which negatively impact travel demand. Constraints also include reliance on wholesale funding sources and meaningful competition. CA's fleet increased by 22 aircraft year over year, to 112 aircraft in 1Q24, with a combined net book value (NBV) of approximately $3.3 billion. With a weighted average (WA) age of five years and a WA remaining lease term of 8.6 years at March 31, 2024, the firm's portfolio is relatively young and also benefits from one of the longest WA remaining lease terms amongst Fitch-rated peers. Given the business's growth phase, the portfolio is notably concentrated (two largest combined are approximately 37% of total NBV) and exposed to weaker credit quality airlines. Including expected credit losses for doubtful accounts, CA's impairment ratio was 1.3% in 1Q24 and averaged 1.7% between 2021 and 2023. Profitability is adequate, but somewhat weighed down by CA's aggressive growth strategy and historic focus on sale-leaseback transactions which in the current environment remain strongly contested. Net spreads (lease yields-funding costs) increased to 5.7% in 1Q24 from 4.4% in 2022 as lease yields trended up in a higher interest rate environment and also benefited from improved portfolio seasoning. For 2021 to 2023, net spreads averaged 3.7%, which is commensurate with Fitch's 'bb' benchmark range for earnings and profitability of between 1% to 5% for aircraft lessors with a sector risk operating environment (SROE) score in the 'bbb' category. CA's debt-to-tangible common equity increased to 2.4x at March 31,2024 from 1.9x one year ago, driven mainly by an increase in debt to fund portfolio acquisitions. The company has articulated a leverage target on a net debt to equity basis in the range of 2.5x-3.0x, which translates to approximately 2.7x-3.2x on the basis of Fitch's core leverage benchmark metric of gross debt to tangible equity. Fitch believes CA's leverage target is appropriate in the context of its fleet quality and business profile evolution. Unsecured debt represented around 12% of CA's total debt at March 31, 2024, which is below the peer average. Fitch expects CA will continue to rely on secured borrowings to fund its operations over the short to medium term but may access unsecured markets opportunistically should pricing meet economic return targets. The issuance of any additional unsecured debt would be viewed favorably by Fitch, as it would enhance financial flexibility. As at 1Q24, liquidity was adequate, underpinned by $86.5 million in unrestricted cash and $657 million in undrawn capacity under its revolving credit facility. Coupled with sound operating cash flows, this is deemed sufficient to cover near-term debt maturities of $66 million over the next 12 months and to fund opportunistic portfolio purchases. Fitch's sensitivity analysis for CA incorporated quantitative credit metrics for the company under the agency's base case and adverse case assumptions. These included slower than projected growth, lower aircraft disposal gains when compared to 2023, additional equipment depreciation, and higher interest expenses. Fitch believes CA will have sufficient liquidity headroom to withstand near-term reductions in operating income in both scenarios while maintaining liquidity coverage above Fitch's threshold of 1.0x. Fitch expects sufficient capitalization headroom relative to the 4.0x downgrade trigger under both scenarios. The Stable Rating Outlook reflects Fitch's expectation that CA will manage its balance sheet growth in order to maintain sufficient headroom relative to its leverage target and Fitch's negative rating sensitivities over the Rating Outlook horizon, despite Fitch's expectation for increased macro challenges including higher for longer interest rates and elevated inflation. The Stable Rating Outlook also reflects expectations for the maintenance of impairments at current levels, enhanced earnings stability, and a strong liquidity position, given the lack of material orderbook purchase commitments with aircraft manufacturers. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A weakening of the company's projected long-term cash flow generation and profitability as well as liquidity coverage sustainably falling below 1.0x and/or a sustained increase in leverage above 4x would be viewed negatively; - Macroeconomic and/or geopolitical-driven pressure on airlines, that lead to additional lease restructurings, rejections, lessee defaults, and impairments, which negatively impact the company's cash flow generation, profitability, and liquidity position could also yield negative rating actions. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - CA's ratings could be positively influenced by solid execution with respect to its planned growth targets and long-term strategic financial objectives, including maintenance of leverage within the targeted range. Ratings could also benefit from enhanced scale and an improved portfolio risk profile, characterized by stronger lessee diversification, a lower exposure to weaker quality airlines, an impairment ratio below 1%, and increases in the proportion of Tier 1 aircraft and narrowbody aircraft. - An upgrade would be also conditioned upon achieving a sustained net spread in excess of 5% and unsecured debt approaching or in excess of 35% of total debt, while achieving and maintaining unencumbered assets coverage of unsecured debt in excess of 1.0x. - Any potential upward rating momentum would also be evaluated in the context of potential governance and conflict of interest risks associated with CA's externally managed business model, limited number of independent board members and ownership by a fixed-life private fund structure. DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS The senior secured debt ratings are one-notch above CA's Long-Term IDR and reflect the aircraft collateral backing the obligations, which suggest good recovery prospects. The senior unsecured debt rating is equalized with CAF's Long-Term IDR reflecting expectations for average recovery prospects in a stressed scenario given the availability of unencumbered assets. DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES The senior secured debt ratings are primarily sensitive to changes in CA's IDR and secondarily to the relative recovery prospects of the instruments. The senior unsecured debt rating is primarily sensitive to changes in CAF's Long-Term IDR and secondarily to the relative recovery prospects of the instruments. A decline in unencumbered asset coverage, combined with a material increase in secured debt, could result in the notching of the unsecured debt down from the Long-Term IDR. SUBSIDIARY AND AFFILIATE RATINGS: KEY RATING DRIVERS The Long-Term IDRs assigned to CAF and CAO are equalized with that of CA given they are wholly owned and highly integrated subsidiaries of the company. SUBSIDIARY AND AFFILIATE RATINGS: RATING SENSITIVITIES The Long-Term IDRs assigned to CAF and CAO are primarily sensitive to changes in CA's ratings. ADJUSTMENTS The Standalone Credit Profile (SCP) has been assigned in line with the implied SCP. The Business Profile score has been assigned below the implied score due to the following adjustment reason(s): Business model (negative). The Asset Quality score has been assigned below the implied score due to the following adjustment reason(s): Concentrations; asset performance (negative). The Capitalization & Leverage score has been assigned below the implied score due to the following adjustment reason(s): Historical and future metrics (negative). ESG CONSIDERATIONS CA has an ESG Relevance Score of '4' for Management Strategy due to execution risk associated with the operational implementation of the company's outlined strategy. This has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. CA has an ESG Relevance Score of '4' for Governance Structure due to potential governance and conflict of interest risks associated with CA's externally-managed business model, limited number of independent board members and ownership by a fixed-life private fund structure. 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 Prior ----------- ------ ----- Castlelake Aviation One Designated Activity Company LT IDR BB Affirmed BB senior secured LT BB+ Affirmed BB+ Castlelake Aviation Limited LT IDR BB Affirmed BB Castlelake Aviation Finance Designated Activity Company LT IDR BB Affirmed BB senior unsecured LT BB Affirmed BB senior secured LT BB+ Affirmed BB+ GRIFFIN GLOBAL: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable --------------------------------------------------------------- Fitch Ratings has affirmed the Long-Term Issuer Default Ratings (IDRs) of Griffin Global Asset Management Holdings, Ltd. (Griffin) and its rated subsidiary, GGAM Finance Ltd., at 'BB'. The Rating Outlook is Stable. Fitch has also affirmed GGAM Finance Ltd.'s senior unsecured note rating at 'BB'. These rating actions are being taken in conjunction with Fitch's global aircraft leasing sector review, covering 10 publicly rated firms. KEY RATING DRIVERS The ratings affirmation reflects Griffin's young fleet, one of the longest weighted average (WA) remaining lease terms amongst peers, appropriate targeted leverage, the absence of order book purchase commitments, the lack of near-term debt maturities and solid expected liquidity metrics. The ratings also consider the senior management team's depth, experience, and track record in managing aviation assets and ownership benefits from Bain Capital Credit, LP, one of the largest alternative investment managers, which brings aviation investment expertise and banking relationships to support Griffin's growth. Rating constraints include execution risks associated with the company's ambitious growth targets and accompanying financing objectives, a modest franchise position, a smaller and significantly concentrated portfolio by customer and geography, weaker projected profitability metrics over the next two years and key man risk associated with founder and CEO, Ryan McKenna. Fitch also notes potential governance and conflict of interest risks associated with Griffin's externally managed business model, limited number of independent board members, and ownership by fixed-life funds. Rating constraints applicable to the aircraft leasing industry more broadly include the monoline nature of the business, vulnerability to exogenous shocks, sensitivity to higher oil prices, inflation and unemployment, which negatively impact travel demand, potential exposure to residual value risks, reliance on wholesale funding sources, and meaningful competition. Griffin's contracted fleet, as of March 31, 2024 consisted of 67 aircraft leased to 18 airlines across 13 countries, with a WA age of 1.3 years and a WA remaining lease term of 10 years. This represents a young portfolio with one of the longest remaining lease terms among Fitch-rated aircraft lessors, which should support strong asset quality performance relative to peers over time. The portfolio had net book value of approximately $4.4 billion as of March 31, 2023. Griffin has not taken any asset impairments to date and Fitch considers the company to have one of the higher-quality fleets in the industry, as the vast majority (81.7%) of owned aircraft are tier 1 based on the agency's aircraft classification, which Fitch views to be the most liquid and marketable aircraft in the aviation industry. Fitch notes the company's current widebody exposure of 42% of net book value (NBV) is above-average, but it is mitigated by the high quality of Griffin's portfolio in terms of aircraft types and customers. All of the company's widebodies comprise the new technology A330-900neo, A350-900/-1000 and B787-9/-10 aircraft, as of March 31, 2024. The ability of Griffin to purchase new technology aircraft at attractive prices, along with relatively conservative depreciation policies, should reduce impairment risk over time, which is viewed positively by Fitch. Fitch anticipates the firm's growing scale amid increased competition, focus on new technology aircraft and higher funding costs will have a negative impact on near-term profitability. Fitch expects the company's net spread (lease yields, less funding costs) to be 1.5%-2.5% over the near-term, which is commensurate with Fitch's 'bb' category earnings and profitability benchmark of 1%-5% for aircraft lessors with a sector risk operating environment score in the 'bbb' category. Enhanced earnings consistency would be viewed positively by Fitch. Griffin's leverage was 2.7x at 1Q24, down from 2.9x at FYE 2023 and compares favorably to management's target of net debt-to-tangible equity of 2.75x. Fitch views leverage as appropriate in the context of current customer concentrations counterbalanced by the liquidity of the fleet profile, as 100% of the portfolio is expected to be predominantly Tier 1 aircraft. In 2023, Griffin issued $1.7 billion in aggregate of senior unsecured notes and added a three-year, unsecured revolving credit facility (RCF) provided by a syndicate of 12 banks, which was subsequently upsized to $575 million in committed capacity. This brought unsecured debt to 70.2% of total debt, as of March 31, 2024, demonstrating continued funding profile improvement. Proforma for a further $400 million unsecured issuance concluded in April 2024, unsecured debt accounted for 74.2% at 1Q24. Fitch expects that Griffin will opportunistically seek to access the secured and unsecured debt capital markets to fund its operations, maintaining greater than 70% unsecured debt on a sustained basis. Future unsecured debt issuances would be viewed favorably, as it would increase unencumbered assets and provide enhanced funding flexibility. The company is expected to maintain solid liquidity. Resources included $60 million of unrestricted cash and $642 million of availability under the committed warehouse facility and RCF at 1Q24. In addition, Griffin is expected to generate annualized operating cash flow of $301 million over the next 12 months. Together, this provides 18x liquidity coverage of $57 million of contracted aircraft purchases over the next 12 months, however, liquidity coverage might reduce modestly over the year as purchase opportunities are identified. Fitch believes there is minimal refinancing risk given the lack of debt maturity walls in the near term. Fitch's sensitivity analysis for Griffin incorporated quantitative credit metrics for the company under the agency's base case and adverse case assumptions. These included slower than projected growth, lower aircraft disposal gains, additional equipment depreciation, and higher interest expenses. Fitch believes Griffin will have sufficient liquidity headroom to withstand near-term reductions in operating income in both scenarios while maintaining liquidity coverage above Fitch's threshold of 1.0x. Fitch expects sufficient capitalization headroom relative to the 4.0x downgrade trigger under both scenarios. The Stable Rating Outlook reflects Fitch's expectation that Griffin will manage its balance sheet growth in order to maintain sufficient headroom relative to its targeted leverage range and Fitch's negative rating sensitivities over the Outlook horizon, despite Fitch's expectation for increased macro challenges including higher for longer interest rates and elevated inflation. The Stable Outlook also reflects expectations for the maintenance of a strong liquidity position, given the absence of order book purchase commitments with aircraft manufacturers over the near term. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A weakening of the company's projected long-term cash flow generation, profitability and liquidity coverage falling below 1.0x and/or a sustained increase in leverage above 4.0x. Macroeconomic and/or geopolitical-driven headwinds that pressure airlines and lead to additional lease restructurings, rejections, lessee defaults, and increased losses would also be negative for ratings. Griffin's ownership by fixed-life private funds could also contribute to negative rating action if it leads to elevated capital extractions, or if a forced sale of the company at fund maturity impairs Griffin's financial profile, franchise or long-term strategic direction. Finally, an abrupt departure of Griffin's founder and CEO could have negative rating implications if the departure impaired Griffin's franchise or long-term strategic direction. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Griffin's ratings could be positively impacted by solid execution with respect to planned growth targets and outlined long-term strategic financial objectives, including maintenance of leverage below 2.75x. Ratings could also benefit from enhanced scale and an improved risk profile of the portfolio, as exhibited by greater diversity of airline customers and maintenance of low impairments. An upgrade would also be conditioned upon enhanced earnings consistency, and achieving a sustained net spread above 5%, unsecured debt funding sustained above 35%, while maintaining unencumbered asset coverage of unsecured debt in excess of 1.0x. Any potential upward momentum would also be evaluated in the context of potential long-term strategic uncertainty, given Griffin's ownership by fixed-life private funds, and potential governance and conflicts of interests associated with Griffin's externally managed business model. DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS The senior unsecured debt ratings are equalized with Griffin's Long-Term IDR and reflect expectations for average recovery prospects in a stress scenario given the availability of unencumbered assets. DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES The senior unsecured debt ratings are primarily sensitive to Griffin's IDR and secondarily to the relative recovery prospects of the instruments. A decline in unencumbered asset coverage, combined with a material increase in secured debt, could result in the notching of the unsecured debt down from the IDR. SUBSIDIARY AND AFFILIATE RATINGS: KEY RATING DRIVERS The Long-Term IDR assigned to GGAM Finance Ltd. is equalized with the IDR assigned to Griffin given it is a wholly owned subsidiary of the company. SUBSIDIARY AND AFFILIATE RATINGS: RATING SENSITIVITIES The rating assigned to GGAM Finance Ltd. is primarily sensitive to changes in the IDR assigned to Griffin and is expected to move in tandem. ADJUSTMENTS The Standalone Credit Profile (SCP) has been assigned in line with the implied SCP. The Asset Quality score has been assigned below the implied score due to the following adjustment reason(s): Concentrations; asset performance (negative), Growth (negative). The Capitalization & Leverage score has been assigned below the implied score due to the following reason(s): Historical and future metrics (negative). The Funding, Liquidity & Coverage score has been assigned below the implied score due to the following reason(s): Funding flexibility (negative). ESG CONSIDERATIONS Griffin has an ESG Relevance Score of '4' for Management Strategy due to the execution risk associated with the operational implementation of the company's outlined strategy. This has a negative impact on the credit profile and is relevant to the ratings in conjunction with other factors. Griffin has an ESG Relevance Score of '4' for Governance Structure due to the potential governance and conflict of interests associate with Griffin's externally-managed business model, limited number of independent board members and ownership by a fixed-life private fund structure. This also reflects key man risk related to its founder and CEO, Ryan McKenna, who is leading the growth and strategic direction of the company. 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 Prior ----------- ------ ----- Griffin Global Asset Management Holdings, Ltd. LT IDR BB Affirmed BB GGAM Finance Ltd. LT IDR BB Affirmed BB senior unsecured LT BB Affirmed BB PALMER SQUARE 2024-1: Fitch Assigns 'B-sf' Rating on Class F Notes ------------------------------------------------------------------ Fitch Ratings has assigned Palmer Square European CLO 2024-1 DAC final ratings. Entity/Debt Rating ----------- ------ Palmer Square European CLO 2024-1 DAC Class A Loan LT AAAsf New Rating Class A Note LT AAAsf New Rating Class B-1 LT AAsf New Rating Class B-2 LT AAsf New Rating Class C LT Asf New Rating Class D LT BBB-sf New Rating Class E LT BB-sf New Rating Class F LT B-sf New Rating Sub notes LT NRsf New Rating TRANSACTION SUMMARY Palmer Square European CLO 2024-1 DAC is a securitisation of mainly senior secured obligations (at least 90%) with a component of senior unsecured, mezzanine, second-lien loans and high-yield bonds. Note proceeds were used to purchase a portfolio with a target par of EUR400 million. The portfolio is actively managed by Palmer Square Europe Capital Management LLC. The CLO has an approximately 4.5-year reinvestment period and a 7.5-year weighted average life (WAL) test. The WAL can step up to the initial 7.5 years subject to conditions one year after closing. KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch places the average credit quality of obligors in the 'B'/'B-' category. The Fitch weighted average rating factor (WARF) of the identified portfolio is 23.78. High Recovery Expectations (Positive): At least 90% of the portfolio comprises 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 of the identified portfolio is 64.35%. Diversified Asset Portfolio (Positive): The transaction will include four Fitch matrices, two effective at closing and two forward matrices with a maximum 7.5-year WAL test and 6.5-year WAL test respectively. They all correspond to a top 10 obligor concentration limit at 20% and fixed-rate asset limits of 7.5% and 12.5%. The transaction also includes various concentration limits, including the maximum exposure to the three largest (Fitch-defined) industries in the portfolio at 40%. These covenants ensure the asset portfolio will not be exposed to excessive concentration. WAL Step-Up Feature (Neutral): One year after closing, following the step-up determination date, the transaction can extend the WAL by one year if the applicable conditions are met on the step-up date, including fulfilling the portfolio-profile, collateral-quality, coverage tests and the adjusted collateral principal amount being no lower than reinvestment target par, with defaulted assets at their collateral value. Portfolio Management (Neutral): The transaction has an approximately 4.5-year reinvestment period and includes reinvestment criteria similar to those of other European transactions. Fitch's analysis is based on a stressed-case portfolio with the aim of testing the robustness of the transaction structure against its covenants and portfolio guidelines. Cash Flow Modelling (Positive): The WAL used for the transaction's stress portfolio analysis is 12 months less than the WAL test. This reduction to the risk horizon accounts for the strict reinvestment conditions envisaged after the reinvestment period. These include passing both the coverage tests, Fitch WARF test and the Fitch 'CCC' bucket limitation, together with a progressively decreasing WAL covenant. In Fitch's opinion, these conditions reduce the effective risk horizon of the portfolio during stress periods. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A 25% increase of the mean default rate (RDR) across all ratings and a 25% decrease of the recovery rate (RRR) across all ratings of the identified portfolio would have no impact on the class A to D notes, and lead to downgrades of up to one notch for the class E notes and to below 'B-sf' for the class F notes. Based on the actual portfolio, downgrades 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, the class C and D notes show a rating cushion of three notches and the class B, E and F notes of two notches. The class A notes display no rating cushion as they are already at the highest rating level. Should the cushion between the identified portfolio and the stress 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 stressed portfolio would lead to downgrades of up to three notches for the class A to D notes and to below 'B-sf' for the class E and F notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A 25% reduction of the mean RDR across all ratings and a 25% increase in the RRR across all ratings of Fitch's Stress portfolio would lead to upgrades of up to three notches, except for the 'AAAsf' rated notes, which cannot be upgraded further. During the reinvestment period, based on Fitch's Stress Portfolio, upgrades 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 in case of stable portfolio credit quality and deleveraging leading to higher credit enhancement and excess spread available to cover for losses on 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 The majority of the underlying assets or risk presenting entities have ratings or credit opinions from Fitch and/or other Nationally Recognized Statistical Rating Organizations 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. ESG CONSIDERATIONS Fitch does not provide ESG relevance scores for Palmer Square European CLO 2024-1 DAC. In cases where Fitch does not provide ESG relevance scores in connection with the credit rating of a transaction, programme, instrument or issuer, Fitch will disclose in the key rating drivers any ESG factor which has a significant impact on the rating on an individual basis. RRE 12 LOAN: S&P Assign Prelim. BB-(sf) Rating on Cl. D-R Notes --------------------------------------------------------------- S&P Global Ratings assigned its preliminary credit ratings to RRE 12 Loan Management DAC's class B-R, C-1-R, C-2-R, and D-R notes. On June 24, 2024, the issuer will refinance the original class B, C-1, C-2, and D notes by issuing replacement notes of the same notional. The replacement notes are largely subject to the same terms and conditions as the original notes, except that the replacement notes will have a lower spread over Euro Interbank Offered Rate than the original notes. 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. -- 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 S&P expects to be bankruptcy remote. -- The transaction's counterparty risks, which S&P expects to be in line with its counterparty rating framework. Portfolio benchmarks CURRENT S&P weighted-average rating factor 2,772.49 Default rate dispersion 517.25 Weighted-average life (years) 4.34 Obligor diversity measure 112.29 Industry diversity measure 19.46 Regional diversity measure 1.26 Transaction key metrics CURRENT Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 0.38 Actual 'AAA' weighted-average recovery (%) 37.09 Actual weighted-average spread (net of floors; %) 3.91 Actual weighted-average coupon (%) 3.31 Rating rationale Under the transaction documents, the rated notes will pay quarterly interest unless a frequency switch event occurs. Following this, the notes will switch to semiannual payments. The portfolio's reinvestment period will end in July 2027. The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior-secured term loans and senior-secured bonds. Therefore, S&P has conducted its credit and cash flow analysis by applying its criteria for corporate cash flow CDOs. S&P said, "In our cash flow analysis, we used a EUR450 million target par collateral principal amount, the portfolio's actual weighted-average spread (3.91%), actual weighted-average coupon (3.31%), and actual weighted-average recovery rates at each rating level. "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. "Elavon Financial Services DAC is the bank account provider and custodian. We expect that the transaction's documented counterparty replacement and remedy mechanisms will adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "Under our structured finance sovereign risk criteria, we consider that the transaction's exposure to country risk is sufficiently mitigated at the assigned preliminary ratings. "At closing, we expect that the transaction's legal structure and framework will be bankruptcy remote, in line with our legal criteria. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B-R, C-1-R, C-2-R, and D-R notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO is still in its reinvestment phase, during which the transaction's credit risk profile could deteriorate, we capped our assigned preliminary ratings on these refinanced notes. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe our preliminary ratings are commensurate with the available credit enhancement for the B-R, C-1-R, C-2-R, and D-R 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 preliminary ratings on the class B-R to D-R notes based on four hypothetical scenarios." The transaction securitizes a portfolio of primarily senior-secured leveraged loans and bonds, and it is managed by Redding Ridge Asset Management (UK) LLP. Environmental, social, and governance S&P said, "We regard the transaction's exposure to environmental, social, and governance (ESG) credit factors as broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental and social credit factors is viewed as below average, while governance credit factors are average." The transaction documents prohibit assets from being related to the following industries: controversial weapons, nuclear weapons, thermal coal, speculative extraction of oil and gas, tobacco/tobacco related products, opioid manufacturing or distribution, hazardous chemicals, pornography or prostitution, non-sustainable palm oil production, tar sands extraction, or speculative transactions of soft commodities. S&P said, "Accordingly, since the exclusion of assets from these industries does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities." Ratings REPLACEMENT ORIGINAL PRELIM. NOTES NOTES PRELIM. AMOUNT INTEREST INTEREST CREDIT CLASS RATING* (MIL. EUR) RATE§ RATE ENHANCEMENT (%) B-R A (sf) 41.85 3mE + 2.20% 3mE + 3.50% 20.46 C-1-R BBB (sf) 25.75 3mE + 3.00% 3mE + 4.23% 14.73 C-2-R BBB (sf) 6.00 3mE + 4.30% 3mE + 4.33% 13.40 D-R BB- (sf) 12.90 3mE + 5.75% 3mE + 7.90% 10.53 Sub. NR 51.15 N/A N/A N/A *The preliminary ratings assigned to the class B-R, C-1-R, C-2-R, and D-R notes address ultimate interest and principal payments. §The payment frequency switches to semiannual and the index switches to 6mE when a frequency switch event occurs. 3mE--Three-month Euro Interbank Offered Rate. NR--Not rated. N/A--Not applicable. SEGOVIA EUROPEAN 4-2017: Moody's Affirms B2 Rating on Cl. F Notes ----------------------------------------------------------------- Moody's Ratings has upgraded the rating on the following notes issued by Segovia European CLO 4-2017 Designated Activity Company: EUR22,250,000 Class C Senior Secured Deferrable Floating Rate Notes due 2031, Upgraded to Aa3 (sf); previously on Sep 7, 2023 Upgraded to A1 (sf) Moody's has also affirmed the ratings on the following notes: EUR193,000,000 (Current outstanding amount EUR136,803,016) Class A Senior Secured Floating Rate Notes due 2031, Affirmed Aaa (sf); previously on Sep 7, 2023 Affirmed Aaa (sf) EUR29,000,000 Class B-1 Senior Secured Floating Rate Notes due 2031, Affirmed Aaa (sf); previously on Sep 7, 2023 Upgraded to Aaa (sf) EUR 12,500,000 Class B-2 Senior Secured Fixed Rate Notes due 2031, Affirmed Aaa (sf); previously on Sep 7, 2023 Upgraded to Aaa (sf) EUR19,100,000 Class D Senior Secured Deferrable Floating Rate Notes due 2031, Affirmed Baa2 (sf); previously on Sep 7, 2023 Affirmed Baa2 (sf) EUR15,500,000 Class E Senior Secured Deferrable Floating Rate Notes due 2031, Affirmed Ba2 (sf); previously on Sep 7, 2023 Affirmed Ba2 (sf) EUR10,100,000 Class F Senior Secured Deferrable Floating Rate Notes due 2031, Affirmed B2 (sf); previously on Sep 7, 2023 Affirmed B2 (sf) Segovia European CLO 4-2017 Designated Activity Company, issued in December 2017, is a collateralised loan obligation (CLO) backed by a portfolio of mostly high-yield senior secured European loans. The portfolio is managed by Segovia Loan Advisors (UK) LLP. The transaction's reinvestment period ended in January 2022. RATINGS RATIONALE The rating upgrade on the Class C notes is primarily a result of the deleveraging of the Class A notes following amortisation of the underlying portfolio since the last review in September 2023. The affirmations on the ratings on the Class A, B-1, B-2, D, E and F notes are primarily a result of the expected losses on the notes remaining consistent with their current ratings after taking into account the CLO's latest portfolio, its relevant structural features and its actual over-collateralization (OC) levels. The Class A notes have paid down by approximately EUR32.03 million (16.6%) since the last review in September 2023. As a result of the deleveraging, over-collateralisation (OC) has increased for tranches A to E. According to the trustee report dated July 2023 [1] the Class A/B, Class C, Class D, Class E and Class F OC ratios are reported at 138.51%, 125.33%, 115.86%, 109.17% and 105.21% compared to May 2024 [2] levels of 144.58%, 128.54%, 117.37%, 109.63% and 105.11%, respectively. The key model inputs Moody's uses in its analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on its published methodology and could differ from the trustee's reported numbers. In its base case, Moody's used the following assumptions: Performing par and principal proceeds balance: EUR249.6m Defaulted Securities: EUR4.4m Diversity Score: 47 Weighted Average Rating Factor (WARF): 2980 Weighted Average Life (WAL): 3.3 years Weighted Average Spread (WAS) (before accounting for Euribor floors): 3.64% Weighted Average Coupon (WAC): 3.58% Weighted Average Recovery Rate (WARR): 44.60% Par haircut in OC tests and interest diversion test: 0% The default probability derives from the credit quality of the collateral pool and Moody's expectation of the remaining life of the collateral pool. The estimated average recovery rate on future defaults is based primarily on the seniority of the assets in the collateral pool. In each case, historical and market performance and a collateral manager's latitude to trade collateral are also relevant factors. Moody's incorporates these default and recovery characteristics of the collateral pool into its cash flow model analysis, subjecting them to stresses as a function of the target rating of each CLO liability it is analysing. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in May 2024. Counterparty Exposure: The rating action took into consideration the notes' exposure to relevant counterparties, such as account bank, using the methodology "Moody's Approach to Assessing Counterparty Risks in Structured Finance methodology" published in October 2023. Moody's concluded the ratings of the notes are not constrained by these risks. Factors that would lead to an upgrade or downgrade of the ratings: The rated notes' performance is subject to uncertainty. The notes' performance is sensitive to the performance of the underlying portfolio, which in turn depends on economic and credit conditions that may change. The collateral manager's investment decisions and management of the transaction will also affect the notes' performance. Additional uncertainty about performance is due to the following: -- Portfolio amortisation: The main source of uncertainty in this transaction is the pace of amortisation of the underlying portfolio, which can vary significantly depending on market conditions and have a significant impact on the notes' ratings. Amortisation could accelerate as a consequence of high loan prepayment levels or collateral sales by or be delayed by an increase in loan amend-and-extend restructurings. Fast amortisation would usually benefit the ratings of the notes beginning with the notes having the highest prepayment priority. -- Recovery of defaulted assets: Market value fluctuations in trustee-reported defaulted assets and those Moody's assumes have defaulted can result in volatility in the deal's over-collateralisation levels. Further, the timing of recoveries and the manager's decision whether to work out or sell defaulted assets can also result in additional uncertainty. Moody's analysed defaulted recoveries assuming the lower of the market price or the recovery rate to account for potential volatility in market prices. Recoveries higher than Moody's expectations would have a positive impact on the notes' ratings. In addition to the quantitative factors that Moody's explicitly modelled, qualitative factors are part of the rating committee's considerations. These qualitative factors include the structural protections in the transaction, its recent performance given the market environment, the legal environment, specific documentation features, the collateral manager's track record and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision. TRINITAS EURO III: Fitch Assigns B-(EXP)sf Rating on Cl. F-R Notes ------------------------------------------------------------------ Fitch Ratings has assigned Trinitas Euro CLO III DAC reset notes expected ratings. The assignment of final ratings is contingent on the receipt of final documents conforming to information already reviewed. Entity/Debt Rating ----------- ------ Trinitas Euro CLO III DAC A-R 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 Trinitas Euro CLO III DAC is a securitisation of mainly senior secured loans and secured senior bonds (at least 90%) with a component of senior unsecured, mezzanine and second-lien loans. Note proceeds will be used to fund a portfolio with a target par of EUR425 million. The portfolio is actively managed by Trinitas Capital Management, LLC. The CLO will have an approximately 4.5-year reinvestment period and an approximately 8.5-year weighted average life test (WAL). KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors within the 'B' category. The Fitch-calculated weighted average rating factor (WARF) of the identified portfolio is 24.0. High Recovery Expectations (Positive): At least 90% of the portfolio will comprise senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-calculated weighted average recovery rate (WARR) of the identified portfolio is 63.4%. Diversified Portfolio (Positive): The transaction will include various concentration limits in the portfolio, including a fixed-rate obligation limit at 10% and a top 10 obligor concentration limit at 20%, and a maximum exposure to the three-largest Fitch-defined industries at 40%. These covenants ensure the asset portfolio will not be exposed to excessive concentration. Portfolio Management (Neutral): The transaction will have a reinvestment period of about 4.5 years and includes reinvestment criteria similar to those of other European transactions. Fitch's analysis is based on a stressed case portfolio with the aim of testing the robustness of the transaction structure against its covenants and portfolio guidelines. Cash Flow Modelling (Positive): The WAL for the transaction's 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, which include passing the coverage tests, the Fitch WARF test and the Fitch 'CCC' bucket limitation test after reinvestment as well as a WAL covenant that progressively steps down, 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 rated notes. Based on the identified portfolio, downgrades 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 F-R notes display a rating cushion of four notches, the class C-R notes a cushion of three notches, and class B-1 R, B-2 R , D-R and E-R notes a cushion of two notches each. 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 and a 25% decrease of the RRR across all ratings of the Fitch-stressed portfolio would lead to downgrades 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 upgrades of up to three notches for the rated notes, except for the 'AAAsf' rated notes. During the reinvestment period, based on the Fitch-stressed portfolio, upgrades may occur on better-than-expected portfolio credit quality and a shorter remaining WAL test, allowing the notes to withstand larger-than-expected losses for the remaining life of the transaction. After the end of the reinvestment period, upgrades may result from 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. ESG CONSIDERATIONS Fitch does not provide ESG relevance scores for Trinitas Euro CLO III DAC. In cases where Fitch does not provide ESG relevance scores in connection with the credit rating of a transaction, programme, instrument or issuer, Fitch will disclose in the key rating drivers any ESG factor which has a significant impact on the rating on an individual basis. ========= I T A L Y ========= FIBER BIDCO: Fitch Rates EUR430MM Secured Notes 'BB-' ----------------------------------------------------- Fitch Ratings has assigned Fiber Bidco S.p.A.'s (Fedrigoni) EUR430 million senior secured notes a final instrument rating of 'BB-' with a Recovery Rating of 'RR3'. This follows the completion of its partial refinancing, with final terms being in line with its prior expectations. Concurrently, Fitch has affirmed Fedrigoni's Long-Term Issuer Default Rating (IDR) at 'B+' with a Stable Outlook. Fedriogoni's 'B+' IDR balances the group's high leverage, which limits rating headroom, with a solid business profile and sound profitability. The Stable Outlook mainly reflects expected improvements to operating profitability, which will support its leverage profile and interest coverage in the medium term. KEY RATING DRIVERS DERIVATION SUMMARY Fedrigoni is a specialty paper and packaging producer, which is smaller in scale than Fitch-rated peers such as Stora Enso Oyj (BBB-/Stable) and Smurfit Kappa Group plc (BBB-/RWP). Fitch views Fedrigoni's business profile as modestly stronger than that of recycled paperboard producer, Reno de Medici S.p.A. (RDM; B+/Stable), due mainly to stronger product and geographic diversification. Fitch views Fedrigoni's financial profile as weaker than RDM's due to its higher expected leverage and weaker coverage. Both companies have sound profitability with expected positive free cash flow (FCF) generation and moderate operating profitability. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer: -Revenue of around EUR2.0 billion in 2024. Organic revenue to grow by mid-single digits annually in 2025-2027 - Net M&A spend of around EUR350 million in 2024-2025, and EUR100 million annually in 2026-2027 (no guidance from the group) - Fitch-defined EBITDA margin of 13.5% in 2024 (including about 1pp adverse impact of its sale and leaseback transaction), before gradually increasing to 14.3% by 2027 - Working-capital inflow of about 1% of revenue in 2024 and about 0.5% working-capital outflow in 2025-2027 - Capex at 3.5% of revenue in 2024-2027 - Proportionate consolidation (Fitch's adjustment) of Tageos, reflecting Fedrigoni's long-term strategic interest in the company - No dividends to 2027 RECOVERY ANALYSIS The recovery analysis assumes that Fedrigoni would be considered a going-concern (GC) in bankruptcy, and that it would be reorganised rather than liquidated, given its strong market position and customer relationships. Fitch has assumed a 10% administrative claim. The group's GC EBITDA estimate of EUR220 million reflects Fitch's view of a sustainable, post-reorganisation EBITDA level on which Fitch bases the group's enterprise valuation (EV). The GC EBITDA reflects intense market competition resulting in subdued operating profitability. Fitch used a 5.5x EBITDA multiple, reflecting the group's strong position in growing premium niche markets, established customer relationships and a well-developed own distribution network. Its multiple is in line with those of RDM, Titan Holding II B.V. and Ardagh Group S.A. The debt structure comprises its EUR665 million floating-rate notes, new EUR430 million fixed-rate notes, a EUR180 million revolving credit facility (RCF assumed fully drawn), about EUR320 million factoring (mostly non-recourse), around EUR72 million other debt (including modest debt at Tageos on proportionate consolidation), an EUR75 million unsecured government loan (assumed EUR15 million repayment) and EUR300 million payment-in kind (PIK) toggle notes. Its waterfall analysis generates a ranked recovery for senior secured noteholders in the 'RR3' category, leading to a final 'BB-' rating for the senior secured notes. The waterfall-generated recovery computation output percentage is 60%. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade: - EBITDA gross leverage below 4.5x on a sustained basis - FCF margins above 3% on a sustained basis Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: - EBITDA gross leverage above 6.0x on a sustained basis - EBITDA interest coverage below 2.0x on a sustained basis - Inability to generate positive FCF on a sustained basis - Problems with integration of acquisitions or increased debt funding LIQUIDITY AND DEBT STRUCTURE Sufficient Liquidity: Fitch estimates Fedrigoni's liquidity post-refinancing mainly consisted of about EUR0.2 billion of readily available cash and with access to an undrawn upsized about EUR180 million RCF due 2027. Fitch expects positive FCF generation over the next four years. The partial refinancing has improved the group's liquidity profile by extending its debt maturity profile and reducing the average cost of financing. No Material Maturities Near Term: The group has no significant short-term debt maturities (apart from an overdraft and non-recourse factoring) as the debt structure is dominated by long-dated senior secured notes and the government loan. The group has repaid its existing about EUR365 million fixed-rate notes due 2027 with the proceeds of the new EUR430 million fixed-rate notes due 2031. The group's about EUR665 million floating-rate notes are due in 2030 and its EUR300 million PIK notes are due in 2029. ISSUER PROFILE Fedrigoni is an Italian leading producer of specialty paper and self-adhesive labels operating in over 130 countries. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG CONSIDERATIONS Fiber Bidco has an ESG Relevance Score of '4[+]' for Exposure to Social Impacts due to consumer preference shift to more sustainable packaging solutions such as paper packaging, which has a positive 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 ----------- ------ -------- ----- Fiber Bidco S.p.A. LT IDR B+ Affirmed B+ senior secured LT BB- New Rating RR3 BB-(EXP) senior secured LT BB- Affirmed RR3 BB- GOLDEN GOOSE: Fitch Alters Outlook on B+ LongTerm IDR to Positive ----------------------------------------------------------------- Fitch Ratings has revised the Outlook on Golden Goose S.p.A.'s B+ Long-Term Issuer Default Rating (IDR) to Positive from Stable and affirmed the IDR at 'B+' and senior secured rating at 'BB-' with a Recovery Rating of 'RR3'. The revision of Outlook reflects the potential for Golden Goose's credit profile to improve as a result of the intention to list the company and apply the new equity raised to reduce gross debt together with part of its cash balances, and refinance remaining debt. Management also stated it plans to pursue further de-leveraging. The company is continuing to successfully deliver its business plan and post-IPO should display good pre-dividend free cash flow (FCF) and strong EBITDAR fixed charge cover. Fitch believes that over the next18-24 months, the company's small size and niche position, which currently constrain its rating, could be balanced by more conservative credit metrics and reaching mildly larger scale along with continuously improving EBITDA and FCF margins. Subject to continuing strong trading performance, Fitch could upgrade the IDR by one notch, once the new capital structure following the planned IPO is completed, leading to lower leverage and stronger interest cover, as well as continued de-leveraging resulting from the group's dividend policy. KEY RATING DRIVERS Outlook Reflects Prospective Deleveraging: Golden Goose intends to utilise around EUR100 million proceeds from the IPO, together with some of its EUR132 million cash as of end-2023, to reduce gross debt to EUR310 million (from EUR480 million). It has also confirmed it subsequently intends to further de-leverage. Fitch estimates that the announced debt reduction could lead to gross lease adjusted leverage strongly improving to around 3.0x (from 4.1x in 2023), a level consistent with its 'bbb' medians. Other Conditions for Upgrade: Golden Goose's planned IPO launch, accompanied by a subsequent conservative policy of debt reduction and continued successful trading, could support an upgrade of its IDR despite the company's still small size. Under its revised sensitivities, Fitch could upgrade the IDR to 'BB-', subject to leverage dropping sustainably below 3.0x and EBITDAR fixed charge cover increasing above 3.0x. It would also need to demonstrate clear attributes of a niche but superior-profitability business model, offsetting scale limitations. These attributes include EBITDAR margin growing to at least 35%, translating into high single-digit FCF margins, continued successful execution of the business plan with maintenance of a balanced mix of sales by channel and geography and declining reliance on core models, as its annual EBITDA is approaching EUR300 million over the medium term. Improving Credit Metrics: The company's conservative financial policy announced in March 2024 targeting IFRS 16-defined net debt/adjusted EBITDA of 1.0x-1.5 (according to management this was 2.4x at end-December 2023) in 2024-2029, provides scope for further deleveraging post IPO. The high end of the company's target net leverage band corresponds to a 2.4x Fitch lease-adjusted net debt/EBITDAR, which Fitch projects would be reached in 2025 in the absence of dividend payments. Combined with the prospective debt refinancing, this could lead to savings on interest payments and potentially increase the already strong EBITDAR fixed-charge coverage towards 3.5x (2.4x in 2023). Niche Market Position: Golden Goose remains a small company, with EUR157 million 2023 Fitch-adjusted EBITDA and a niche market position in the luxury sneakers category. This is despite increasing control of its supply chain following the internalisation of part of production in 2023. Its share of the personal luxury goods market is negligible. Nonetheless, Fitch believes it is well established in the luxury sneakers category and has scope to continue expanding faster than the market. Golden Goose has good sales channel and geographic diversification. However, the company's luxury profile and niche focus constrain prospects for substantially scaling up, as this could compromise its brand positioning, which is reliant on the concept of scarcity, craftmanship and limited models. Single Product Focus: Golden Goose's diversification is limited by heavy reliance on the luxury sneaker category and the core sneaker model that accounts for about 40% of the company's total sales. High single-product and price-point concentration is unlikely to reduce in the short term. This is somewhat mitigated by its sneakers not being overly reliant on a particular fashion trend, season, generation or gender and by a strategy that includes diversifying into apparel and other product categories. This was recently confirmed by the introduction of adjacent products within the clothing and accessories categories. Successful Business Plan Execution: The company's 2021-2023 performance was supported by a cautious but steady roll out of an average 20 new stores a year. Combined with the active shift of growth volumes from wholesale to the more profitable online channel since 2021, this allowed sales and profits to double. The EBITDAR margin only mildly reduced to 33.4% (2019-2020 average 36%) in 2023. Even in 2020, performance was resilient, with 1% revenue growth, despite forced store closures. Casualisation Trends Support Demand: Golden Goose has benefited from an acceleration in casualisation and digitalisation trends since 2020 as consumers prioritise comfort in their clothing choices. Fitch expects these trends to persist over the rating horizon to 2027, supporting sales growth. Customers appreciate the combination of high comfort, quality and manufacturing, as well as the affordable luxury pricing and casual characteristics of Golden Goose's products. The company has successfully increased customer loyalty and repeat purchases. Retail and Digital Channel Expansion: Fitch projects that store openings and rising online penetration will lead to further sustained revenue growth over 2024-2027 with a 7%-8% CAGR. Fitch views execution risks from Golden Goose's plan to open more than 80 stores by end-2027 to increase its presence in Asia, Americas and Europe as manageable. This is because store formats are small, not in the highest cost locations, and new openings will mostly be in countries where the company's brand is already appreciated. Online growth will be supported by adequate existing infrastructure, mitigating execution risks from rapid growth. DERIVATION SUMMARY Golden Goose shares traits with consumer goods and non-food retail companies, as it sells products under its own brand through directly operated retail stores, wholesalers, department stores and online. Fitch uses its Non-Food Retail Navigator to assess Golden Goose's rating as the company's strategy is predominantly based on the expansion of its leasehold store network. Fitch therefore considers lease-adjusted credit metrics for Golden Goose. However, Fitch also compares Golden Goose with companies in the consumer goods sector. The company is rated two notches below its closest peer, Birkenstock Financing S.a.r.l. (BB/Stable), which also operates in the shoe sector. It has similar profitability and is concentrated on one product. Unlike Golden Goose, Birkenstock is not developing its own retail store network and therefore Fitch does not adjust its leverage for leases. The two-notch rating differential reflects Birkenstock's 3x larger scale and a product offering that thanks to a lower price point and a unique orthopaedic construction, has historically been less subject to fashion risk, as well as lower FY23 leverage of 2.7x pro-for Birkenstock's IPO of October 2023 and its expectation of strong FCF generation of EUR200-280 million from FY24. Golden Goose's credit profile is weaker than that of Levi Strauss & Co. (BB+/Stable), which also has high concentration on a single brand, but is much larger in scale and more diversified by product and geography. Fitch expects Levi Strauss to maintain lease-adjusted leverage below 3.5x, which will be approximately 0.5x higher than Golden Goose's post-IPO level. Golden Goose is smaller and has greater concentration risks than Italian furniture producer -Flos B&B Italia S.p.A. (IDG; B/Stable), but benefits from lower expected leverage., IDG has made several acquisitions that constrain its deleveraging trajectory. Golden Goose is rated in line with THG PLC (B+/Negative), which operates in the beauty and well-being consumer market. THG is bigger than Golden Goose in sales, and is not exposed to fashion risk and product concentration but its profitability was affected in 2022 by demand, supply chain and input cost headwinds and its FCF generation remains negative. Unlike Golden Goose, THG has based its strategy on bolt-on M&A, raising resources from the equity market. However, Golden Goose's successful execution has enabled it to deleverage to more conservative levels than THG's approximately 5.5x total debt-to-EBITDA. KEY ASSUMPTIONS Fitch's Key Assumptions within Its Rating Case for the Issuer: - Retail revenue CAGR of around 6.7% over 2024-2027, driven by about 20 new store openings a year and direct online sales. - Strong EBITDAR margin (EBITDA before operating leases) of 34% to 2025. - Working capital outflows of around EUR22 million in 2024 before reducing to low single digits over the rating horizon. - Capex at around 7.5% of revenue per year to 2027. - No dividends. - Acquisition spending of EUR7 million in 2024 and then about EUR4 million each year. RECOVERY ANALYSIS The recovery analysis assumes that Golden Goose would be reorganised as a going-concern in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Golden Goose's going-concern EBITDA assumption is EUR70 million. The going-concern EBITDA estimate reflects Fitch's view of a sustainable, post-reorganisation EBITDA upon which Fitch bases the enterprise valuation. It is based on average EBITDA for 2021-2024 under its stress assumption of the company's main product losing consumer appeal and new stores substantially underperforming existing stores. An enterprise value multiple of 5.5x EBITDA is applied to the going-concern EBITDA to calculate a post-reorganisation enterprise value. The multiple of 5.5x reflects the company's strong growth prospects relative to peers as well as its small size. The company's EUR75 million revolving credit facility (RCF) is assumed to be fully drawn upon default, and is considered as super senior, ranking ahead of the senior secured notes (SSN). Reverse factoring (EUR11.9 million outstanding at end-2023, Fitch's adjustment to financial debt of EUR2.6 million in accordance with the corporate rating criteria) is treated as unsecured debt, ranking after the senior secured creditor claims. Its waterfall analysis generates a ranked recovery for the SSN in the 'RR3' band, indicating a 'BB-' rating. The waterfall analysis output percentage on current metrics and assumptions is 57%. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Continued successful execution of the business plan with maintenance of a balanced composition of sales by channel (between retail, wholesale and online) and geography (EMEA, Americas and Asia) and declining reliance on core models, as well as annual EBITDA approaching EUR300 million over the medium term - EBITDAR margin of around 35%, translating into high single-digit FCF margins - The completion of an IPO with the allocation of proceeds and the formulation of a financial policy consistent with maintaining EBITDAR leverage below 3.0x and an EBITDAR fixed charge cover ratio above 3.0x on a sustained basis Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Material slowdown in revenue growth driven by diminishing product appeal to consumers, reflected in weak like-for-like performance of existing stores or inability of new stores to reach targeted sales - FCF margin below 5% due to weakening of EBITDAR margin or higher-than-expected investments in working capital and capex - EBITDAR leverage growing above 5.0x LIQUIDITY AND DEBT STRUCTURE Comfortable Liquidity: At end-2023, Golden Goose had comfortable liquidity given EUR132 million cash and EUR63.8 million available under its committed RCF. Refinancing risk is limited as the SSN will be due only in 2027, by wen Fitch would expect the company to have steadily deleveraged and accumulated cash on its balance sheet. ISSUER PROFILE Golden Goose is a fast-growing luxury footwear brand. It has operations in Europe, US and Asia through a network of directly operated stores, wholesalers and online. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. 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 ----------- ------ -------- ----- Golden Goose S.p.A. LT IDR B+ Affirmed B+ senior secured LT BB- Affirmed RR3 BB- WEBUILD SPA: Fitch Alters Outlook on 'BB' LongTerm IDR to Positive ------------------------------------------------------------------ Fitch Ratings has revised the Outlook on Webuild S.p.A.'s Long-Term Issuer Default Ratings (IDR) to Positive from Stable and affirmed the IDR at 'BB'. The revision of the Outlook reflects its expectation of further improvement in Webuild's Fitch-defined EBITDA gross leverage metrics to below 2.5x in 2025. This will be mainly driven by strong nominal EBITDA growth and an assumed gross debt reduction of about EUR200 million-EUR250 million. The group's revenue growth and operating margins are mainly supported by robust activity. Fitch expects that deleveraging will be strongly dependent on its ability to sustain EBITDA margin improvement. The rating reflects Webuild's consistent sound net leverage and solid business profile, which Fitch deems in line with an investment-grade engineering and construction (E&C) company. The rating remains limited by the company's moderate gross leverage and volatile working capital requirement. KEY RATING DRIVERS Declining Gross Leverage: Fitch expects EBITDA gross leverage to decrease to around 2.6x in 2024 and 2.3x in 2025, from about 3.4x in 2023. This will be mainly driven by expected strong EBITDA growth supported by robust activity combined with the group's gross debt reduction target of EUR200 million-EUR250 million by 2025. Sound Net Leverage: Fitch expects EBITDA net leverage in 2024-2027 to remain adequate at about 0.7x-1.0x. Fitch assumes that the group's high level of Fitch-defined readily available cash of about EUR2.8 billion at end-2023 is temporary and expect that excess liquidity will be mainly deployed on increased capex and working capital requirements in 2024. Webuild targets maintaining the company-defined net cash position in 2024. Temporary Cash Consumption: Fitch expects temporary negative FCF of about EUR1.1 billion for 2024, following high cash inflows of about EUR1.3 billion in 2023. The temporary cash consumption will be driven by high growth-related capex and a high working capital requirement. The latter will be mainly driven by the partial reversal of the high inflows of advance payments in previous years and the timing of forecast cash inflows related to claim collections and payments to subcontractors. Fitch expects normalised working capital requirements from 2025 and assume modest negative FCF in 2025 and neutral to positive FCF in 2026-2027. Strong Revenue Visibility: Webuild's improved revenue visibility is supported by its robust current order book and healthy pipeline of opportunities. At end-2023, the group's construction order book reached about EUR54.9 billion from EUR44.0 billion at end-2022. As at April 2024, the group recorded around EUR5.5 billion of new orders. The company is well positioned to continue benefiting from increasing government investment in infrastructure across core markets including Central and Northern Europe, Australia, the US and the Middle East. Improved Business Profile: The company has improved its business profile over the last two years, mainly due to improved revenue visibility, significant increase in scale of operations and stronger market position, especially in Italy where it is the largest E&C infrastructure construction company with a record of high project win rates. The group's investment-grade business profile is underpinned by leading market positions in niche markets, a robust order backlog and sound geographical diversification. These strengths are partly offset by significant (but declining) project concentration and working-capital requirements. High Exposure to Developed Markets: Fitch views the high share of new projects in lower-risk countries, especially in the US and Australia, as positive for the credit profile. This is partly offset by fairly high current share of contracts in Italy, reflecting geographic concentration risk. However, Fitch expects increasing exposure to other developed markets in 2024-2027, including Central and Northern Europe, Australia, the US and the Middle East. The overall domestic market exposure remains broadly in line with most Fitch-rated E&C investment-grade peers. DERIVATION SUMMARY Fitch views Webuild's business profile as broadly in line with Kier Group Plc S.p.A. (Kier: BB+/Stable). Webuild's larger scale of operations and better geographic diversification is offset by Kier's less volatile working capital requirement. Webuild's business profile is weaker than Ferrovial SE's (Ferrovial: BBB/Stable) due to lower exposure to mature concessions and more volatile working capital requirement. Webuild has a limited presence in concessions. Its strategy focuses on large, complex, value-added infrastructure projects with high engineering content. The group has an established strong domestic market position across its different business segments, coupled with healthy revenue visibility and good contract risk management in line with other investment-grade E&C players. Webuild's financial profile is somewhat weaker than that of Kier and Ferrovial mainly due to more volatile FCF through-the-cycle and somewhat higher net leverage KEY ASSUMPTIONS - Revenue of about EUR10.5 billion in 2024 and then growth of around 5%-8% in 2025-27. - EBITDA margins to improve to 8.1% in 2024 and then stay at 8.3% between 2025-2027. - Working capital outflow of around EUR0.9 billion in 2024 and inflows from 2025-2027. - Capex at 6.8%-7.5% of revenue during 2024-2025 and stabilising at 4-4.5% in 2026-2027. - Annual dividend of around EUR74 million-EUR80 million during 2024-2027. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA leverage below 2.5x on a sustained basis - EBITDA net leverage below 1.5x on a sustained basis - Ability to generate positive three-year average FCF - Reduced concentration of 10 largest contracts to below 40% of the order book Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA leverage above 3.5x on a sustained basis - EBITDA net leverage above 2.5x on a sustained basis - Inability to generate at least neutral FCF on a sustained basis - Weak performance on major contracts with a material impact on profitability - Increasing share of high-risk countries LIQUIDITY AND DEBT STRUCTURE Sufficient Liquidity: At end-2023, Webuild's liquidity was supported by about EUR2.8 billion readily available cash (excluding around EUR0.3 billion considered not readily available by Fitch mainly restricted cash for working capital purposes) and access to EUR920 million undrawn revolving credit facilities. This is sufficient to cover expected negative FCF of about EUR1.1 billion in 2024 and upcoming maturities of about EUR0.7 billion in 2024 and EUR0.6 billion in 2025 Debt Structure: At end-2023, Webuild's debt structure consisted mainly of five euro-denominated senior unsecured bonds with a total nominal amount of about EUR1.9 billion, with maturities between 2024 and 2028. Other debt of about EUR0.5 billion mainly includes corporate loans, short- and medium-term construction debt at local subsidiaries as well as modest long-term concession debt ISSUER PROFILE Webuild is an Italian engineering and construction group with operations spread across the geographies. It is mainly focused on complex infrastructure civil projects with strong leadership in the water segment. MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Macro and Sector Forecasts data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. 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 ----------- ------ ----- Webuild S.p.A. LT IDR BB Affirmed BB senior unsecured LT BB Affirmed BB ===================== N E T H E R L A N D S ===================== LOPAREX MIDCO: $233.9MM Bank Debt Trades at 16% Discount -------------------------------------------------------- Participations in a syndicated loan under which Loparex Midco BV is a borrower were trading in the secondary market around 84.3 cents-on-the-dollar during the week ended Friday, June 7, 2024, according to Bloomberg's Evaluated Pricing service data. The $233.9 million Term loan facility is scheduled to mature on February 1, 2027. The amount is fully drawn and outstanding. Loparex is a provider of release liners. Based in the Netherlands, Loparex Midco B.V. operates as a financial holding company incorporated in 2019. The majority of the Company's end market sales come from graphic arts, tapes, industrial, and medical. Labelstock, hygiene, and composites accounts for a smaller portion of end market sales. =========== R U S S I A =========== TBC BANK: Fitch Assigns 'BB-' LongTerm IDR, Outlook Stable ---------------------------------------------------------- Fitch Ratings has assigned Uzbekistan-based Joint Stock Commercial Bank "TBC BANK" (TBCU) Long-Term Issuer Default Ratings (IDRs) of 'BB-' with Stable Outlooks and a Viability Rating (VR) of 'b'. KEY RATING DRIVERS TBCU's Long-Term IDRs, as captured by the Shareholder Support Rating (SSR) of 'bb-', reflect potential ultimate support from Georgia-based TBC BANK JSC (TBC, BB/Stable), which is the core bank within TBC BANK Group PLC, TBCU's controlling shareholder. In its view, any potential extraordinary support would ultimately be sourced from TBC. TBCU's 'b' VR reflects its reasonable risk profile and asset quality and good capitalisation. It also considers the bank's still developing and untested business model and a limited record of profitable operations. Shareholder Support Considerations: The SSR is one notch below TBC's Long-Term IDR, reflecting TBCU's moderate role within the broader TBC group and considerable management independence. The bank contributed 9% of the group's total revenue and 5% of net profit in 2023, although Fitch expects it to increase further in the medium term. State-Dominated Economy, Structural Weaknesses: Uzbekistan's economy remains heavily dominated by the state, despite recent market reforms and privatisation plans, resulting in weak governance and generally poor financial transparency. Additional risks stem from high dollarisation and concentrations of the banking sector and its reliance on state funding and external debt. Small Digital Bank, Retail Focus: TBCU was established in 2020 as a digital bank to focus solely on retail operations, predominantly unsecured cash lending (95% of gross loans at end-1Q24). It is controlled by TBC Bank Group PLC, with EBRD and IFC holding minority stakes. While TBCU currently makes up only about 1% of sector assets and loans, it has established a stronger position in the retail segment (2.8% at end-1Q24), which Fitch expects the bank to gradually improve further. Fast Loan Growth, Prudent Underwriting: Since its operations began, TBCU has been growing its loan book rapidly (2023: 148%). Fitch expects this above-sector growth to continue into 2024-2025 as the bank continues to expand its business in the higher-risk unsecured retail segment. However, Fitch assesses TBCU's underwriting standards as reasonably conservative for the domestic market as the bank issues granular loans denominated in local currency. Low Reported Impairments, High Reserves: Impaired loans ratio equalled a limited 2.2% at end-2023, where Fitch forecasts it will remain in 2024-2025 due to write-offs and expected high lending growth. Problem exposures were fully provisioned for, which further reduces asset-quality risks. Breakeven Achieved, Performance to Improve: TBCU was loss-making during the first three years of its operations due to high operating costs related to establishing its business operations. In 2023, the bank reported its first annual net profit, with a return on average equity of 7%. High margins and economies of scale should boost TBCU's profitability in 2024-2025, although it will remain moderate in its base case due to still substantial operating expenses. Capital Injections from Shareholders: The bank has relied on annual capital contributions from its shareholders to support its lending growth and comply with prudential requirements. While Fitch expects TBCU to receive additional large-scale capital injections in 2024-2025, its Fitch Core Capital (FCC) ratio will moderate to 13%-14% during this period from 15% at end-2023 in its base case. Deposit-Funded, Increasing Wholesale Debt: TBCU is largely funded by granular, albeit pricey, retail deposits (86% of end-2023 total liabilities). However, the bank has recently started to attract wholesale debt, including from the parent group, and Fitch expects the share of external borrowings to increase in the medium term. The bank's liquidity position is modest, with total liquid assets covering around a quarter of customer deposits at end-2023. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade TBCU's SSR and Long-Term IDRs would be downgraded following a downgrade of TBC's IDRs. A downgrade could also take place if Fitch takes the view that TBCU's role for the group has weakened, leading to a wider notching between the two banks' ratings. A lower Country Ceiling (currently at 'BB-') would also result in a downgrade of the ratings. However, Fitch currently views none of these scenarios as likely. The VR could be downgraded from sharply lower capitalisation, with the FCC ratio dropping below 10%. This could be, for example, due to a material weakening of asset quality resulting in losses, or due to rapid lending growth not offset by timely capital injections from the shareholders. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade of TBCU's SSR and Long-Term IDRs would require both an upgrade of TBC's ratings and an upward revision in Uzbekistan's Country Ceiling. Fitch could also upgrade TBCU's IDRs and equalise them with those of TBC in case Fitch assesses that the former's role for the group has strengthened, leading to a higher support propensity. However, it is not currently expected by Fitch and would also require a higher Country Ceiling. Upgrade prospects for the bank's VR are currently limited and would require a material improvement of the bank's still narrow franchise coupled with an extended record of high profitability and capitalisation. DATE OF RELEVANT COMMITTEE 24 May 2024 PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS TBCU's Long-Term IDRs reflect potential ultimate support from TBC. 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 ----------- ------ Joint Stock Commercial Bank "TBC BANK" LT IDR BB- New Rating ST IDR B New Rating LC LT IDR BB- New Rating LC ST IDR B New Rating Viability b New Rating Shareholder Support bb- New Rating ========= S P A I N ========= CERVANTES TOPCO: S&P Assigns Preliminary 'B' ICR, Outlook Stable ---------------------------------------------------------------- S&P Global Ratings assigned its 'B' preliminary issuer credit rating to Spain-based holding company Cervantes Topco S.L.U. and its preliminary 'B' issue rating on the EUR675 million TLB with a recovery rating of 3 (recovery prospect between 50%-70%: rounded at 60%). S&P said, "The stable outlook reflects our expectation that Europa Education will demonstrate sound operating performance supported by the positive enrolment trend and stable EBITDA margin such that leverage will improve below 6.0x by the end of 2025. We expect cash flow generation to strengthen in the medium term with FOCF to debt turning positive in 2025." n April 2024, EQT announced its intention to acquire a 64% stake in Europa Education Group via Cervantes Topco S.L.U. The current shareholder, Permira, will maintain a minority stake of 35% in the company. The transaction will be financed with a new EUR675 million term loan B (TLB) maturing in June 2031, and has an equity stake of EUR1.7 billion. EQT is in the process of acquiring a 64% stake in Europa Education from Permira in a buyout transaction. In April 2024, EQT announced its intention to acquire a 64% stake in Europa Education via the holding company Cervantes Topco S.L.U. The current shareholder, Permira, will maintain a minority 35% share in the company. The transaction will be financed with a new EUR675 million TLB maturing in June 2031, and has an equity stake of EUR1.7 billion. The capital structure will also include a EUR85 million revolving credit facility (RCF) maturing six months ahead of the loan. Compared with the current capital structure of Europa Education, this transaction represents a EUR50 million upsize in total debt quantum, which was standing at EUR625 million, recently upsized from EUR480 million as of end-2023 through two consecutive dividend recapitalizations. Pro forma for the transaction, S&P expects leverage to increase to 6.5x in 2024 compared to 5.6x in 2023. Nonetheless, it expects the group to deleverage quickly on earnings growth in the medium term and stand at about 5.2x in 2025. Europa Education's robust positioning in the Iberian Peninsula, diversification in degrees offered, and formats of delivery (constrained by limited scale and geographic diversification) support the rating. S&P said, "We base our view of Europa Education's key business strengths on its well-established position and sound brand recognition as a tier two private higher education operator in Spain and Portugal. It is the largest operator in Spain with about 7% of market share and the third largest in Portugal with about 10% of market share in a highly fragmented market. We anticipate that Europa Education will increase its market shares as the group expands its offering in the country over the next two years, notably with the recent openings of campuses in Alicante and Madrid and the construction of a sizable campus in Malaga. Europa Education offers a vast diversity of degrees for undergraduate and postgraduates in four distinct knowledge areas: Health sciences, social science, STEAM (science, technology, Engineering, Art and Math), and Sport Sciences. The group also provides a well-balanced format of delivery with face-to-face programs, online programs, and hybrid programs. Nonetheless, our rating is constrained by Europa Education's limited scale with EUR434 million of revenue and about EUR100 million of S&P Global Ratings-adjusted EBITDA in 2023. The group's geographic footprint is heavily tilted toward Spain, representing 87% of total revenue as of 2023. The high share of international students, about 35%, somewhat counterbalance this limited geographic diversification with international students coming from the EU, the U.S., and Latin America." The private higher education sector in Iberia exhibits supportive features for Europa Education but the regulatory landscape could present a challenge. The private higher education sector has shown resilience through the cycle and is expected to expand on the back of structural long-term trends, such as the shift from public to private education; the increasing demand for master's degrees considering delayed employment and life-long learning; internationalization; and the demand for online offerings. The higher education market in Spain benefits from high barriers to entry due to regulation, quality of education, and brand recognition, as well as the need for sizable investments, which benefits Europa Education considering its well invested campuses. Europa Education's positioning in the overall supportive environment leads us to expect the group to capture a high share of industry growth. Although highly unlikely, the regulatory landscape could evolve and present a challenge to Europa Education. Higher education is a key area of concern for governments and often as a sector faces regulatory changes. Considering the current volatile political landscape at the regional level in Spain, changes to the regulatory landscape could occur and, in some way, disrupt Europa Education's operations. S&P does not expect a sizable effect from regulatory changes, but it remains an area of risk and high scrutiny for the rating. Europa Education's sizable investments in 2023 will fuel growth above 15% for the next three years. The group recently finalized a large investment program, which materialized with the opening of a new campus in Alicante and the extension of the historical campus in Madrid, as well as the extensions in the Canary Islands and Valencia, which justifies a considerable increase in capex in 2023. S&P said, "The group added more than 10,500 students in these facilities, mostly in undergraduate programs, which we expect to fuel the above 15% growth of the group for the next three years and beyond. Additionally, the group is finalizing the authorization process to open a new university in Malaga, where demand is strong, but where no private university licenses have been granted by the local government over the past 20 years. The campus in Malaga will have a capacity of 6,000 students. The group is expecting to present a similar offering compared with its historical campus. We expect Malaga to only start contributing meaningfully to the group's revenue in 2027. Capex related to the construction of the university will be recorded mostly in 2024. We expect that Europa Education's total student base will reach about 54,200 by the end of the 2024-2025 academic year and revenue to increase to about 19% in 2024 and 2025. This is similar to the growth recorded in 2023, reaching EUR407 million in 2024 and EUR485 million in 2025 from EUR344 million in 2023. The group's service delivery mix continues to change with an increasing share of lower-fee digital offerings, although this will be mostly offset by increasing tuition fees in general due to a higher value proposition. We expect the S&P Global Ratings-adjusted EBITDA margin to increase in 2024 to 30.6% and further to 31.6% in 2025 from 28.7% in 2023." The group exhibits a good degree of earnings visibility, a robust margin profile, and a high cash conversion rate on a recurring basis. Europa Education displays a good degree of earning visibility with a sizable captive audience thanks to its focus on undergraduate programs with four- to six-year tenures that account for more than half of total enrollment and 70% of revenues. The group has 100% visibility of 2024 earnings, 99% visibility for 2025 earnings, and 91% for 2026 earnings, assuming existing enrollment numbers. That said, in the overall education industry, Europa Education average tenure and thus earnings visibility is lower compared to K-12 operators with average tenure between eight and nine years. Although expanding at a fast pace, Europa Education has not compromised on its profitability with the S&P Global Ratings-adjusted EBITDA margin remaining stable in 2022 and 2023 at about 29%. We forecast S&P Global Ratings-adjusted EBITDA margin will reach 30.6% in 2024 and 31.6% in 2025 on the back of the ramping up of recently opened campuses. On the back of limited working capital variations and maintenance capex, Europa Education is exhibiting a high level of cash conversion. S&P forecasts FOCF after leases will, nonetheless, be depressed over the medium term due to the sizable growth capex program that is aimed at increasing student capacity considerably. S&P said, "FOCF after leases will turn significantly negative in 2024 due to one-off items (high transaction costs and expansionary capex), but we expect it will recover by 2025. We forecast FOCF after leases will deteriorate to negative EUR67 million in 2024 compared to positive EUR16 million in 2023. This is due to high interest expenses, elevated transactions costs, and increased capex to about EUR87 million in 2024. Capex will return to more normalized levels in 2025 at EUR50 million similar to EUR50 million in 2023, as the group expands its activities with the construction of new facilities. We forecast FOCF after leases to recover and turn positive to about EUR27 million in 2025, on earnings growth, absent transaction costs, and lower capex. "The final ratings will depend on our receipt and satisfactory review of all final documentation and final terms of the transaction. The preliminary ratings should therefore not be construed as evidence of final ratings. If we do not receive final documentation within a reasonable time, or if the final documentation and final terms of the transaction depart from the materials and terms reviewed, we reserve the right to withdraw or revise the ratings. Potential changes include, but are not limited to, utilization of the proceeds, maturity, size and conditions of the facilities, financial and other covenants, security, and ranking within the capital structure. "Our stable outlook reflects our belief that Europa Education will manage to quickly deleverage to below 6.0x by the end of 2025 on the back of robust enrollment and sales growth with a resilient EBITDA margin fueled by the recent opening of additional facilities, mostly in the high margin undergraduate programs. Although pressured by investments and increased debt service in 2024, we expect FOCF after leases to turn positive in 2025." S&P could lower the rating on Europa Education over the next 12 months if: -- FOCF after leases turns negative on a sustained basis, weakening the group's liquidity position and straining its capital structure. This could occur, for example, as a result of weaker-than-expected operating performance and/or higher capex than originally anticipated; -- S&P Global Ratings-adjusted debt to EBITDA rises above 7x; and -- A more aggressive financial policy, including material debt-funded mergers and acquisition (M&A), significant capex, or dividends above our thresholds. S&P said, "We see rating upside as remote over the next 12 months, given that the rating is constrained by Europa Education's highly leveraged capital structure and financial-sponsor ownership. We could take a positive rating action if the company demonstrated a track record leverage declined materially and remained sustainably below 5x, supported by a commitment by the financial sponsor to maintain leverage below 5.0x at all times. Ratings upside would depend on Europa Education's strong operating performance and substantial EBITDA growth with margins remaining above 30%; increasing market share; improving business diversification; generation of sustainably robust and meaningful FOCF; and no significant debt-funded M&A or exceptional shareholder distributions. "Governance factors are a moderately negative consideration, as is the case for most rated entities owned by private-equity sponsors. We think the company's highly leveraged financial risk profile points to corporate decision-making that prioritizes the interests of the controlling owners. This also reflects generally finite holding periods and a focus on maximizing shareholder returns." =========== T U R K E Y =========== ISTANBUL: Moody's Affirms 'B3' Issuer & Sr. Unsecured Debt Ratings ------------------------------------------------------------------ Moody's Ratings has affirmed the B3 long-term issuer and senior unsecured debt ratings and maintained the positive outlook of the Metropolitan Municipality of Istanbul. At the same time, Moody's has affirmed Istanbul's Baseline Credit Assessment (BCA) of b3. RATINGS RATIONALE RATIONALE FOR THE RATINGS AFFIRMATION The rating action occurs in conjunction with the publication on May 28, 2024 of Moody's rating methodology for Regional and Local Governments. Moody's reassessment of the factors driving extraordinary support as part of the methodology update results in a more favorable evaluation of the Legal Framework / Policy factor for Istanbul, based on the central government's more balanced policy stance. As a result, Moody's assessment of extraordinary support for the Metropolitan Municipality of Istanbul is now "strong" from "moderate" previously. At the same time, under the "Strategic Role" factor of extraordinary support, Moody's confirmed its assessment of Istanbul's strategic importance recognizing its economic size. Given Istanbul's BCA is already on par with the sovereign rating (Government of Turkiye, B3 positive), the change in extraordinary support does not have any impact on Istanbul's B3 rating. In Moody's view, Turkiye's central government's policy stance towards metropolitan municipalities (MMs) has shifted from being moderately negative to a more balanced position over the last several years. The government introduced several changes to the institutional framework governing MMs, which clarified the scope of their responsibilities and empowered them with greater financial resources. In particular, the legislative amendments over the last several years bolstered MMs' revenues through a higher retention of income tax receipts as well as enhanced the predictability of the tax revenue scheme. Given its wealthy economy and efficient governance practices, the City of Istanbul is poised to benefit more from the changes made to the legislative framework than smaller municipalities. The affirmation of the b3 BCA and the B3 ratings for Istanbul reflects the city's capacity to maintain consistently robust operating performance and its adequate liquidity, against a backdrop of high inflation, tight financial conditions and currency stress. It also reflects Moody's assessment of the city's moderately strong governance reflected in the qualitative "baa" score assigned in the BCA scorecard. In 2024 and 2025, the municipality's primary operating balance (POB) to operating revenue will remain very strong, around 40%, according to Moody's forecasts thanks to strong tax revenue growth and high revenue generation capacity. At the same time Istanbul displays relatively high debt, which is very sensitive to local currency depreciation risks, with 94% of municipality's debt stock denominated in foreign currency at year-end 2023. Partially mitigating the pressures associated with FX fluctuations is Istanbul's sound liquidity position, representing 12% of operating revenue in 2023, which fully covers the foreign-currency debt repayments falling due over the next 12 months. In addition, Istanbul's asset base offers a further cushion in case of further shocks. According to the preliminary results for 2023, Moody's estimates Istanbul's net direct and indirect debt levels to be at around 112% of operating revenue, an increase from 105% in 2022 as a result of a new 5-year senior unsecured USD715 million bond issued in November 2023. Under the current exchange rates and most recent borrowing plan, the city's debt levels will decline to 97% of projected operating revenue in 2024. As the most developed city in the country, Istanbul contributes about 30% of Turkiye's GDP. The city's affluent and diversified economy consistently outperforms the national average, with a high value added service-based economy and GDP per capita that is around 160% the national average. The prospects of decreased systemic pressure, reflected in the outlook change to positive from stable at the sovereign level earlier this year, may improve the operating environment for Istanbul through positive effects on the municipality's tax base. The Metropolitan Municipality of Istanbul displays moderately strong governance and management practices as reflected in the "baa" score assigned. The city has a long track record of prudent budgetary management, contributing to its robust operating and financial performance. The city regularly discloses its financial statements further underpinning transparency and accountability. The B3 ratings of Istanbul incorporates a BCA of b3 and a strong extraordinary support assumption from the Government of Turkiye. RATIONALE FOR THE POSITIVE OUTLOOK The positive outlook mirrors the positive outlook on the sovereign rating. The improved prospects for sustainably lower inflation and reduced external vulnerability for the Government of Turkiye could have favorable implications for the Metropolitan Municipality of Istanbul. The eventual decline in inflation expected to start later in 2024 reduces the risk of unexpected increases in the cost of goods and services, improving budget management and planning. Moreover, the reduced external vulnerability could lead to a more stable and predictable external funding for the municipality. ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS Istanbul's CIS-3 indicates that ESG considerations have a moderate impact on the current credit rating with potential for greater negative impact over time. Istanbul's exposure to environmental risks (E-4) stems from physical climate risks, primarily due to heat stress and water scarcity. Rapid urbanization and population growth in Istanbul has increased the demand for water, while climate change has affected the supply by altering precipitation patterns and reducing snowfall, which feeds the cities' reservoirs. With rising global temperatures, Istanbul has been experiencing more frequent and intense heatwaves. Istanbul's exposure to social risks (S-3) is moderate and primarily mirrors demographic pressures. Despite its generally favorable demographic profile, the city faces issues such as youth unemployment and a mismatch between the skills of the labor force and employer needs. The rapid population growth and recent expansion of the cities' boundaries have strained service provision, resulting in standards that fall short of those in most OECD countries. The (G-3) score assigned to Istanbul is largely influenced by its riskier attitude toward debt management due to very high exposure to foreign currency risk. Despite this the city is transparent and punctual when publishing the financial reports. Additionally, it has proven ability to manage complex projects and provide services within the expanded municipality's boundaries, serving population of more than 15 million. The specific economic indicators, as required by EU regulation, are not available for this entity. The following national economic indicators are relevant to the sovereign rating, which was used as an input to this credit rating action. Sovereign Issuer: Turkiye, Government of GDP per capita (PPP basis, US$): 42,062 (2023) (also known as Per Capita Income) Real GDP growth (% change): 4.5% (2023) (also known as GDP Growth) Inflation Rate (CPI, % change Dec/Dec): 64.8% (2023) Gen. Gov. Financial Balance/GDP: -6.3% (2023) (also known as Fiscal Balance) Current Account Balance/GDP: -4.1% (2023) (also known as External Balance) External debt/GDP: 45.1% (2023) Economic resiliency: ba1 Default history: At least one default event (on bonds and/or loans) has been recorded since 1983. On May 31, 2024, a rating committee was called to discuss the rating of the Istanbul, Metropolitan Municipality of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have not materially changed. The issuer's institutions and governance strength, have not materially changed. The issuer's governance and/or management, have not materially changed. The issuer's fiscal or financial strength, including its debt profile, has not materially changed. Reassessment of the factors driving extraordinary support as part of the methodology update for rating regional and local governments resulting in a more favorable evaluation of the Legal Framework / Policy factor. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade of Istanbul's ratings would require a similar change of the sovereign rating, provided its operating and financial performances remain consistently sound over time. A downgrade of Turkiye's sovereign rating would lead to a downgrade of Istanbul's ratings given the close institutional, financial and operational linkages with the central government. Downward ratings pressure may also arise from a sustained growth in debt and debt servicing costs, triggered by further currency depreciation. More limited access to funding sources would also trigger a negative rating action. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Regional and Local Governments published in May 2024. =========================== U N I T E D K I N G D O M =========================== BOWIE CONSTRUCTION: Goes Into Administration -------------------------------------------- Business Sale reports that Bowie Construction Limited, a groundworks specialist based in Linton, fell into administration last week after filing an NOI at the beginning of April. Frank Wessely and Jo Leach of Quantuma were appointed as joint administrators, Business Sale relates. The company, which had been working on several ongoing projects at the time of its collapse, reportedly fell into administration as a result of cashflow issues arising from a major contract that was not paying, Business Sale discloses. According to Business Sale, in its accounts for the year to December 30, 2022, the firm reported turnover of GBP14.6 million, up from GBP11.5 million a year earlier, but saw its losses more than double to nearly GBP1 million. This was attributed to cost inflation of fixed price jobs that had been agreed prior to the COVID-19 pandemic, Business Sale states. BOYD INTERNATIONAL: Goes Into Liquidation, Halts Operations ----------------------------------------------------------- Business Sale reports that Boyd International Limited, a machinery supply company based in Arradoul, Buckie, has gone into liquidation. Michael Reid, a partner in MHA's Aberdeen office, has been appointed as liquidator of the company, which has ceased trading with the loss of seven jobs, Business Sale relates. Founded in 1997 and incorporated in 1999, the company operated from a 11,000 sq ft warehouse, surrounded by a 13,000 sq ft yard. This property is currently being marketed for sale by FG Burnett, Aberdeen, Business Sale states. The company's stock is set to be disposed of by Thainstone Specialist Auction, Inverurie, Business Sale notes. According to Business Sale, MHA Partner Michael Reid said that the COVID-19 pandemic had been "unkind to the company because much of its trade was to and from businesses in England and abroad and travel was severely restricted." He continued: "The company had effectively ceased trading prior to my appointment on May 7 but there were seven employees, all of whom have been made redundant as part of the process. Assistance will be obtained from the Redundancy Payments Office to process all former employee claims." "It is too early to state whether a dividend will be paid to unsecured creditors because, for example, assets require to be sold. Steps are being taken to write to all known creditors, however, I would encourage any potential creditors to contact me at their earliest convenience." In the company's most recent accounts at Companies House, for the year to October 31 2021, its fixed assets were valued at GBP440,112 and current assets at close to GBP1.4 million, Business Sale relays. Its net assets at the time stood at GBP370,721, Business Sale discloses. L1R HB FINANCE: GBP450MM Bank Debt Trades at 22% Discount --------------------------------------------------------- Participations in a syndicated loan under which L1R HB Finance Ltd is a borrower were trading in the secondary market around 77.6 cents-on-the-dollar during the week ended Friday, June 7, 2024, according to Bloomberg's Evaluated Pricing service data. The GBP450 million Term loan facility is scheduled to mature on August 31, 2024. The amount is fully drawn and outstanding. L1R HB Finance Limited retails food supplements. The Company is domiciled in Jersey. MACQUARIE AIRFINANCE: Fitch Hikes IDR to 'BB+', Outlook Stable -------------------------------------------------------------- Fitch Ratings has upgraded the Long-Term Issuer Default Ratings (IDRs) of Macquarie AirFinance Holdings Limited (MAHL) and its rated subsidiaries, Macquarie Aircraft Leasing Inc. (MAL) and Macquarie Aerospace Finance UK Limited (MAFU), to 'BB+' from 'BB'. The Rating Outlook is Stable. Fitch has also upgraded MAHL's senior unsecured debt to 'BB+' from 'BB'. These rating actions are being taken in conjunction with Fitch's global aircraft leasing sector review, covering 10 publicly rated firms. For more information on the sector review, please see "Fitch Ratings Completes Aircraft Lessor Peer Review, Sector Outlook Remains Neutral," available at www.fitchratings.com. KEY RATING DRIVERS The ratings upgrade reflects MAHL's improved franchise and scale with the closing of the ALAFCO Aviation Lease and Finance Company K.S.C.P. (ALAFCO) portfolio acquisition expected for early June 2024. In 1Q24, MAHL agreed to upsize its commitment to purchase an additional 23 predominately new technology aircraft from ALAFCO, with an average age of approximately five years, for $1.1 billion. This is incremental to the existing agreement to purchase a portfolio of 53 aircraft and an orderbook of 20 Boeing B737 MAX aircraft for approximately $2.2 billion. These transactions are expected to accelerate the transition of the company's fleet to newer technology aircraft, which would reduce the weighted average (WA) age, improve portfolio liquidity, and extend the WA remaining lease term, which would reduce remarketing risks. The issuance of $2 billion of senior unsecured notes since Fitch's initial rating also supports the current upgrade, which demonstrates continued funding profile improvement. Unsecured debt represented 54% of total debt as of Dec. 31, 2023, proforma for 2024 issuance, up from 28% a year ago. MAHL expects to maintain a funding mix of secured debt to total assets below 30% long term, which Fitch believes is more consistent with the funding profile of higher rated peers. MAHL's ratings continued to reflect its position as a global, full-service aircraft operating lease platform, portfolio focus on relatively liquid, narrowbody aircraft, appropriate current and targeted leverage, lack of near-term debt maturities, and solid liquidity metrics. The ratings also consider the long-term equity holders, MAHL's affiliation with Macquarie Group Limited (A/Stable), its management team's depth, experience, and track record in managing aircraft assets. Rating constraints include a weaker earnings profile, elevated exposure to older aircraft (albeit declining), a focus on the sale-leaseback market, which is highly competitive, and shorter (albeit improving following the ALAFCO transaction) average remaining lease terms relative to higher rated peers. Fitch also notes potential governance risks relative to larger, public peers, including lack of independent board members and partial ownership by pension funds. Rating constraints applicable to the aircraft leasing industry more broadly include the monoline nature of the business, vulnerability to exogenous shocks, potential exposure to residual value risk, sensitivity to oil prices, inflation and unemployment, which negatively impact travel demand. Constraints also include a reliance on wholesale funding sources and meaningful competition. Fitch views MAHL's asset quality as modestly weaker than peers, given the older, current technology portfolio, with a WA age of 11.3 years at YE23. The ALAFCO transaction should increase diversification and scale, reduce the WA age and improve portfolio liquidity. The expected reduction in age to 9.0 years, which is in line with management's target of below 10 years, would be more in line with rated peers. As at Dec 31, 2023, the company's WA remaining lease term was 4.2 years, which increases remarketing risk. Proforma for the ALAFCO transaction, the lease maturity profile lengthens to 5.8 years, which Fitch views positively. The company took no impairment charges in the nine months ended Dec. 31, 2023 (9M24). The impairment rate of 0% in 9M24 compared favorably to the four-year average of 1.6% from FY20-FY23. Given increased lease and trading activity seen in the market, Fitch does not expect material ongoing impairment charges on MAHL's core narrowbody fleet over the near term. MAHL's results reflected higher finance costs due to increased borrowing costs incurred on new debt facilities. The company reported a pre-tax loss on average assets of 1.4% in 9M24, compared to an average loss of 1.0% from FY20-FY23. MAHL's annualized net spreads (lease yield-funding costs) were 4.1% in 9M24, below the four-year average of 9.5%. MAHL is expected to benefit from revenue expansion, given planned lease growth, enhanced scale, and a reduction in provision expenses in line with the aviation recovery. This is partially offset by increased financing costs as the company issues more expensive senior unsecured debt. Fitch expects the operating expense ratio to reduce due to improved economies of scale, while the net margin will remain in the 4.1%-4.5% range over the Outlook horizon. Fitch would view the enhanced earnings stability as a positive. Leverage on a gross debt to tangible equity basis was 2.4x at Dec. 31, 2023. With the $600 million capital investment by the company's shareholders, alongside the $2.3 billion portfolio acquisition facility for the ALAFCO transaction, leverage is expected to remain below management's long-term target of 3.0x. Fitch believes this is appropriate given MAHL's portfolio liquidity profile as 67.5% of the portfolio (75% proforma) is considered tier 1, which is relatively consistent with peers. As of Dec. 31, 2023, unsecured debt increased to 54% of total debt proforma for the completion of a $1 billion senior unsecured debt issuance (comprised of two $500 million, five- and seven-year tranches) and paydown of existing secured debt outstanding. This compares with 28% in 2022 and is consistent with Fitch's 'bb' category funding, liquidity, and coverage benchmark range of 25%-75% for balance sheet intensive leasing companies with a sector risk operating environment (SROE) score in the 'bbb' category. Fitch views MAHL's ability to access the unsecured markets at economic terms to increase the pool of unencumbered assets and further improve funding flexibility favorably. Liquidity was supported by $362.9 million of cash on hand, and $430 million of undrawn committed capacity under its revolving credit facility as of Dec. 31, 2023. Fitch projects operating cash flows of approximately $198 million, over the next 12 months, although this could vary depending on portfolio expansion, aircraft sales and collections. Together, liquidity sources provided 1.9x coverage of purchase obligations of $772.5 million over the next 12 months as of Dec. 31, 2023, which is above the peer average. Fitch expects liquidity coverage ratios for MAHL will remain at or above 1.5x over time. Fitch's sensitivity analysis for MAHL incorporated quantitative credit metrics for the company under the agency's base case and adverse case assumptions. These included slower than projected growth, lower aircraft disposal gains, additional equipment depreciation, and higher interest expenses. Fitch believes MAHL will have sufficient liquidity headroom to withstand near-term reductions in operating income in both scenarios while maintaining liquidity coverage above Fitch's threshold of 1.0x. Fitch expects sufficient capitalization headroom relative to the 4.0x downgrade trigger under both scenarios. The Stable Rating Outlook reflects Fitch's expectation that MAHL will manage its balance sheet growth in order to maintain sufficient headroom relative to its leverage target and Fitch's negative rating sensitivities over the Rating Outlook horizon. This is despite Fitch's expectation for increased macro challenges, including higher for longer interest rates and elevated inflation. The Stable Rating Outlook also reflects expectations for the maintenance of impairments below 1%, enhanced earnings stability, and a solid liquidity position, given the lack of material orderbook purchase commitments with aircraft manufacturers. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A weakening of the company's long-term cash flow generation, profitability, and liquidity position, and/or a sustained increase in leverage above 4.0x would be viewed negatively; - Macroeconomic and/or geopolitical-driven headwinds that pressure airlines and lead to additional lease restructurings, rejections, lessee defaults, and increased losses would be also be negative for the ratings. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - MAHL's ratings could be, over time, positively influenced by solid execution with respect to planned growth targets and outlined long-term strategic financial objectives, including maintenance of leverage below 3.0x and achieving a sustained pre-tax return on average assets above 1.5%; - Ratings could also benefit from reduced exposure to weaker airlines, maintenance of an impairment ratio below 1%, and increases in the proportion of tier 1 aircraft while maintaining its new technology, narrowbody focus; - An upgrade would also be contingent upon further lengthening of the WA lease profile and a reduction in the WA age of the fleet more in line with investment-grade peers, and unsecured debt sustained above 50% of total debt through the cycle, while achieving and maintaining unencumbered assets coverage of unsecured debt in excess of 1.0x. DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS The equalization of the unsecured debt ratings with MAHL's Long-Term IDR reflects the improved unsecured funding mix, as well as the availability of sufficient unencumbered assets, which provide support to unsecured creditors and suggest average recovery prospects in a stressed scenario. DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES The senior unsecured debt ratings are primarily sensitive to changes in MAHL's Long-Term IDR and secondarily to the relative recovery prospects of the instruments. A decline in unencumbered asset coverage, combined with a material increase in secured debt, could result in the notching of the unsecured debt down from the Long-Term IDR. SUBSIDIARY AND AFFILIATE RATINGS: KEY RATING DRIVERS The Long-Term IDRs assigned to MAL and MAFU are equalized with that of MAHL given that they are wholly owned subsidiaries of the company. SUBSIDIARY AND AFFILIATE RATINGS: RATING SENSITIVITIES The ratings assigned to MAL and MAFU are primarily sensitive to changes in MAHL's Long-Term IDR and are expected to move in tandem. ADJUSTMENTS - The Standalone Credit Profile (SCP) has been assigned in line with the implied SCP. - The Business Profile score has been assigned below the implied score due to the following adjustment reason: Market position (negative). - The Asset Quality score has been assigned below the implied score due to the following adjustment reason: Concentrations; asset performance (negative). - The Earnings & Profitability score has been assigned below the implied score due to the following adjustment reason: Earnings stability (negative). - The Capitalization & Leverage score has been assigned below the implied score due to the following adjustment reason: Risk profile and business model (negative). - The Funding, Liquidity & Coverage score has been assigned below the implied score due to the following adjustment reason: Funding flexibility (negative). 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 ----------- ------ ----- Macquarie AirFinance Holdings Limited LT IDR BB+ Upgrade BB senior unsecured LT BB+ Upgrade BB Macquarie Aircraft Leasing Inc. LT IDR BB+ Upgrade BB Macquarie Aerospace Finance UK Limited LT IDR BB+ Upgrade BB MORRISON MCCONNELL: Enters Administration, Seeks Buyer ------------------------------------------------------ Sam Metcalf at TheBusinessDesk.com reports that BK Plus has been revealed as the administrator for stricken Derbyshire supplier of menswear. The move follows on from TheBusinessDesk.com exclusively revealing that Riddings-based Morrison McConnell were set to appoint administrators. Richard Tonks and Kim Richards of BK Plus have named as administrators for the company, which has been a prominent supplier of menswear, including the Viyella heritage brand, to independent shops across the UK and Europe, TheBusinessDesk.com relates. According to TheBusinessDesk.com, a statement from BK Plus said: "In response to evolving retail trends and the increasing shift towards online purchasing, Morrison McConnell Limited made significant investments in new websites. However, the company has faced considerable challenges due to Brexit, with import duties on EU sales and increased freight and container costs leading many customers, both wholesale and direct-to-consumer, to seek alternatives." The administrators are continuing to trade the company while actively seeking a buyer, following initial marketing efforts in early May, TheBusinessDesk.com discloses. Currently, Morrison McConnell employs four members of staff, following two redundancies made immediately after the appointment of the administrators, TheBusinessDesk.com notes. POP BRIXTON: Falls Into Administration -------------------------------------- Brixton Buzz reports that after nearly 10 years of never making a profit, Pop Brixton entered into administration. Quantuma, a firm specialising in helping companies "overcome operational and financial challenges", has been appointed as the administrators, Brixton Buzz relates. Pop Brixton's registered office address has now been transferred from Brixton to Quantuma's offices in Brighton, Brixton Buzz notes. It will be Quantuma's job to see if they can save Pop Brixton from going into liquidation or whether it can find a way to keep Pop Brixton running, Brixton Buzz states. The writing had been on the wall for some time. For many years, Pop Brixton had been bankrolled by The Collective property empire. After the Collective collapsed a series of other investors have tried and failed to make Pop Brixton a going concern, Brixton Buzz recounts. According to Brixton Buzz, Pop Brixton had still not filed its annual accounts when it entered administration, with the accounts being over eight months late-never a good sign. Then Pop Brixton mysteriously changed its name at Companies House this April to "PBX (2015) Limited". In addition, last November, a finance company placed a charge against Pop Brixton, Brixton Buzz notes. SALTEES PROPERTIES: Goes Into Administration -------------------------------------------- Business Sale reports that Saltees Properties Limited, a property development and construction firm formerly trading as Mizen Properties Limited, fell into administration last month, with Glyn Mummery and Emma Priest of FRP Advisory appointed as joint administrators. According to Business Sale, in the company's most recent accounts at Companies House, for the year to December 31, 2021, it reported turnover of GBP23.1 million, down from GBP27.3 million a year earlier, while its post-tax losses widened from GBP570,000 to nearly GBP4.7 million. The company said it had been impacted by Brexit and COVID-19, which "resulted in a subdued property sales market", as well as building price inflation, supply chain disruption and disputes on social housing contracts, Business Sale relates. At the time, its fixed assets were valued at close to GBP541,000 and current assets at GBP5.3 million. Its net assets, meanwhile, amounted to GBP3.7 million, Business Sale discloses. SPORTIVE HQ: Enters Administration, Halts Trading ------------------------------------------------- Adwitiya Pal at Road.cc reports that British sportive and cycling event organiser Sportive HQ has announced that it has entered administration and ceased trading from Thursday, June 6, with all upcoming events organised by the company now cancelled. Sportive HQ was formed by Matthew Porter in 2016, with its team consisting of staff who had been organising cycling events for the past 18 years. The company has also worked with local charities and cycling clubs, raising over GBP50,000. According to Road.cc, in an email sent on June 6 to riders who had signed up for its events, Sportive HQ said that all sportive are now "cancelled as of this date", as "there are currently no assets or funds within the business to continue". Mr. Porter, as cited by Road.cc,: "I am so sorry that this has happened, I have been fighting for the past 3 years since the pandemic to keep everything afloat but have failed and run out of personal funds to keep things going." As of now, it is unsure that whether cyclists who signed up with Sportive HQ for the upcoming events will be receiving a refund or not, Road.cc notes. VAGABOND WINES: Bought Out of Administration by Majestic -------------------------------------------------------- Business Sale reports that administrators from Quantuma have completed the sale of tap-and-pour wine bar chain Vagabond Wines' two sites within Gatwick Airport. Vagabond Wines Limited, which operated across London, the Southeast and Birmingham, fell into administration in March 2024, with Andrew Andronikou and Brian Burke of Quantuma appointed as joint administrators, Business Sale relates. The joint administrators traded the business while negotiating a rescue deal and, in April 2024, completed a sale of the bulk of the firm's sites to wine retailer Majestic, Business Sale discloses. The deal rescued nine of the company's 12 sites, which continued to trade under the Vagabond brand, Business Sale notes. The company's underperfoming site at Canary Wharf was the only outlet to close as a result of the administration and the two remaining sites, both located within Gatwick Airport, have now been acquired by Airport Retail Enterprises (ARE), in a deal that saves more than 120 jobs, Business Sale recounts. According to Business Sale, joint administrator and Quantuma Advisory Managing Director Andrew Andronikou commented: "I am delighted to have achieved such great outcomes, which all told means the preservation of in excess of 300 jobs." Vagabond was founded in 2010 as a single wine shop in Fulham, West London, with the company's success seeing it expand into an established chain over the following decade. In addition to its tap and pour self-service model, the company also became known for hosting events such as cheese and wine masterclasses and corporate occasions. This success led to it seeking to invest in diversifying away from its core operations, Business Sale relays. However, the closure of a key expansion site led to the company absorbing significant losses, which had a direct impact on trading levels. This resulted in a deterioration of its cash flow position and, ultimately, the appointment of administrators, Business Sale states. =============== X X X X X X X X =============== [*] BOND PRICING: For the Week June 3 to June 7, 2024 ----------------------------------------------------- Issuer Coupon Maturity Currency Price ------ ------ -------- -------- ----- Codere Finance 2 Luxembour 13.62511/30/2027 USD 1.000 Codere Finance 2 Luxembour 11.000 9/30/2026 EUR 34.86 Solocal Group 10.940 3/15/2025 EUR 20.51 Kvalitena AB publ 10.067 4/2/2024 SEK 45.00 Codere Finance 2 Luxembour 12.75011/30/2027 EUR 1.000 UkrLandFarming PLC 10.875 3/26/2018 USD 4.195 Sidetur Finance BV 10.000 4/20/2016 USD 0.378 Tinkoff Bank JSC Via TCS F 11.002 USD 42.85 Altice France Holding SA 10.500 5/15/2027 USD 37.26 Teksid Aluminum Luxembourg 12.375 7/15/2011 EUR 0.619 Immigon Portfolioabbau AG 10.258 EUR 9.750 Goldman Sachs Internationa 16.288 3/17/2027 USD 26.54 Marginalen Bank Bankaktieb 12.996 SEK 45.00 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EUR 27.75 Raiffeisen Schweiz Genosse 20.000 9/25/2024 CHF 41.23 Raiffeisen Schweiz Genosse 20.000 9/25/2024 CHF 27.76 UniCredit Bank GmbH 18.00012/31/2024 EUR 28.87 Leonteq Securities AG/Guer 27.600 6/26/2024 CHF 28.49 Leonteq Securities AG/Guer 21.600 6/26/2024 CHF 6.790 UniCredit Bank GmbH 14.100 6/28/2024 EUR 48.34 Landesbank Baden-Wuerttemb 14.500 6/28/2024 EUR 44.89 Societe Generale SA 20.00012/18/2025 USD 20.67 Vontobel Financial Product 21.500 6/28/2024 EUR 38.06 UniCredit Bank GmbH 15.600 6/28/2024 EUR 46.38 Vontobel Financial Product 16.500 6/28/2024 EUR 42.74 Vontobel Financial Product 15.000 6/28/2024 EUR 44.65 Vontobel Financial Product 18.000 6/28/2024 EUR 41.02 Vontobel Financial Product 23.000 6/28/2024 EUR 36.75 Vontobel Financial Product 13.500 6/28/2024 EUR 46.76 Vontobel Financial Product 14.000 6/28/2024 EUR 46.61 Vontobel Financial Product 12.500 6/28/2024 EUR 46.45 Societe Generale SA 14.000 8/8/2024 USD 38.80 Vontobel Financial Product 16.500 6/28/2024 EUR 44.34 Vontobel Financial Product 14.500 6/28/2024 EUR 47.04 Vontobel Financial Product 19.500 6/28/2024 EUR 42.02 Vontobel Financial Product 11.000 6/28/2024 EUR 39.78 Basler Kantonalbank 17.000 7/19/2024 CHF 45.58 Armenian Economy Developme 11.000 10/3/2025 AMD 0.000 Landesbank Baden-Wuerttemb 11.000 6/28/2024 EUR 25.40 Societe Generale SA 27.30010/20/2025 USD 8.800 Societe Generale SA 18.000 10/3/2024 USD 19.20 Societe Generale SA 18.000 10/3/2024 USD 18.80 Societe Generale SA 20.000 10/3/2024 USD 32.00 Societe Generale SA 20.00011/28/2025 USD 4.500 Societe Generale SA 18.000 5/31/2024 USD 28.70 Societe Generale SA 21.00012/26/2025 USD 28.87 EFG International Finance 11.12012/27/2024 EUR 31.32 UniCredit Bank GmbH 10.500 9/23/2024 EUR 30.22 Finca Uco Cjsc 13.00011/16/2024 AMD 0.000 UBS AG/London 16.500 7/22/2024 CHF 19.88 UBS AG/London 21.600 8/2/2027 SEK 35.12 Finca Uco Cjsc 12.500 6/21/2024 AMD 0.000 Bank Vontobel AG 12.000 6/10/2024 CHF 42.50 EFG International Finance 10.300 8/23/2024 USD 24.09 Credit Suisse AG/London 11.200 8/26/2024 USD 39.30 Societe Generale SA 10.010 8/29/2024 USD 47.40 Societe Generale SA 11.750 9/18/2024 USD 48.70 Credit Suisse AG/London 20.00011/29/2024 USD 16.77 UniCredit Bank GmbH 10.300 9/27/2024 EUR 30.68 KPNQwest NV 10.000 3/15/2012 EUR 0.797 Ist Saiberian Petroleum OO 14.00012/28/2024 RUB 15.95 Ukraine Government Bond 11.000 2/16/2037 UAH 29.23 Privatbank CJSC Via UK SPV 10.875 2/28/2018 USD 5.267 UkrLandFarming PLC 10.875 3/26/2018 USD 4.195 Lehman Brothers Treasury C 14.900 9/15/2008 EUR 0.100 Ukraine Government Bond 11.580 2/2/2028 UAH 49.38 Ukraine Government Bond 11.110 3/29/2028 UAH 47.66 Lehman Brothers Treasury C 15.000 3/30/2011 EUR 0.100 Lehman Brothers Treasury C 13.50011/28/2008 USD 0.100 Ukraine Government Bond 11.570 3/1/2028 UAH 48.94 Bulgaria Steel Finance BV 12.000 5/4/2013 EUR 0.216 Sidetur Finance BV 10.000 4/20/2016 USD 0.378 Lehman Brothers Treasury C 10.500 8/9/2010 EUR 0.100 Lehman Brothers Treasury C 10.000 3/27/2009 USD 0.100 Lehman Brothers Treasury C 11.000 6/29/2009 EUR 0.100 Lehman Brothers Treasury C 11.00012/19/2011 USD 0.100 Deutsche Bank AG/London 12.780 3/16/2028 TRY 48.20 Bulgaria Steel Finance BV 12.000 5/4/2013 EUR 0.216 Bilt Paper BV 10.360 USD 0.650 Virgolino de Oliveira Fina 10.875 1/13/2020 USD 36.00 Tonon Luxembourg SA 12.500 5/14/2024 USD 0.010 Virgolino de Oliveira Fina 10.875 1/13/2020 USD 36.00 Tonon Luxembourg SA 12.500 5/14/2024 USD 0.010 Phosphorus Holdco PLC 10.000 4/1/2019 GBP 0.234 Ukraine Government Bond 11.000 4/24/2037 UAH 31.93 BLT Finance BV 12.000 2/10/2015 USD 10.50 Lehman Brothers Treasury C 12.000 7/13/2037 JPY 0.100 Lehman Brothers Treasury C 10.000 6/11/2038 JPY 0.100 Virgolino de Oliveira Fina 11.750 2/9/2022 USD 0.635 Ukraine Government Bond 11.000 3/24/2037 UAH 29.31 Ukraine Government Bond 11.000 4/8/2037 UAH 29.36 Ukraine Government Bond 11.000 4/23/2037 UAH 29.41 Ukraine Government Bond 10.36011/10/2027 UAH 48.61 Codere Finance 2 Luxembour 12.75011/30/2027 EUR 1.000 PA Resources AB 13.500 3/3/2016 SEK 0.124 Phosphorus Holdco PLC 10.000 4/1/2019 GBP 0.234 Tailwind Energy Chinook Lt 12.500 9/27/2019 USD 1.500 Ukraine Government Bond 11.000 4/1/2037 UAH 29.34 Lehman Brothers Treasury C 18.250 10/2/2008 USD 0.100 Ukraine Government Bond 12.500 4/27/2029 UAH 45.94 Ukraine Government Bond 12.50010/12/2029 UAH 44.44 Lehman Brothers Treasury C 13.000 7/25/2012 EUR 0.100 Petromena ASA 10.85011/19/2018 USD 0.622 Ukraine Government Bond 10.710 4/26/2028 UAH 46.51 Credit Agricole Corporate 10.20012/13/2027 TRY 49.51 Lehman Brothers Treasury C 16.800 8/21/2009 USD 0.100 Lehman Brothers Treasury C 13.15010/30/2008 USD 0.100 Lehman Brothers Treasury C 13.00012/14/2012 USD 0.100 Lehman Brothers Treasury C 11.750 3/1/2010 EUR 0.100 Lehman Brothers Treasury C 14.90011/16/2010 EUR 0.100 Lehman Brothers Treasury C 16.000 10/8/2008 CHF 0.100 Lehman Brothers Treasury C 11.00012/20/2017 AUD 0.100 Lehman Brothers Treasury C 11.00012/20/2017 AUD 0.100 Lehman Brothers Treasury C 11.000 2/16/2009 CHF 0.100 Lehman Brothers Treasury C 13.000 2/16/2009 CHF 0.100 Lehman Brothers Treasury C 10.00010/23/2008 USD 0.100 Lehman Brothers Treasury C 10.00010/22/2008 USD 0.100 Lehman Brothers Treasury C 10.600 4/22/2014 MXN 0.100 Lehman Brothers Treasury C 10.000 2/16/2009 CHF 0.100 Lehman Brothers Treasury C 16.000 11/9/2008 USD 0.100 Lehman Brothers Treasury C 17.000 6/2/2009 USD 0.100 Lehman Brothers Treasury C 16.00012/26/2008 USD 0.100 Lehman Brothers Treasury C 13.432 1/8/2009 ILS 0.100 Lehman Brothers Treasury C 10.44211/22/2008 CHF 0.100 Lehman Brothers Treasury C 16.00010/28/2008 USD 0.100 Lehman Brothers Treasury C 16.200 5/14/2009 USD 0.100 Lehman Brothers Treasury C 10.000 5/22/2009 USD 0.100 Lehman Brothers Treasury C 13.500 6/2/2009 USD 0.100 Lehman Brothers Treasury C 23.300 9/16/2008 USD 0.100 Lehman Brothers Treasury C 10.000 6/17/2009 USD 0.100 Lehman Brothers Treasury C 11.000 7/4/2011 CHF 0.100 Lehman Brothers Treasury C 12.000 7/4/2011 EUR 0.100 Lehman Brothers Treasury C 14.10011/12/2008 USD 0.100 Lehman Brothers Treasury C 15.000 6/4/2009 CHF 0.100 Lehman Brothers Treasury C 12.400 6/12/2009 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 publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. * * * End of Transmission * * *