---

       T R O U B L E D   C O M P A N Y   R E P O R T E R

                          E U R O P E

          Wednesday, June 19, 2024, Vol. 25, No. 123

                           Headlines



F R A N C E

STELLAGROUP: S&P Affirms 'B' LongTerm ICR, Outlook Stable


G E R M A N Y

PRESTIGE BIDCO: S&P Affirms 'B+' ICR on Refinancing, Outlook Stable


I R E L A N D

CVC CORDATUS XXXI: Fitch Assigns 'B-sf' Rating on Class F-2 Notes
TRINITAS EURO III: S&P Assigns B-(sf) Rating on Class F-R Notes


I T A L Y

DOVALUE SPA: S&P Affirms 'BB' LongTerm ICR on Gardant Acquisition


K A Z A K H S T A N

FINCRAFT GROUP: S&P Affirms 'B/B' ICRs Then Withdraws Ratings


N E T H E R L A N D S

DRIVE PARENTCO: S&P Assigns Prelim. BB- (sf) LT ICR, Outlook Stable
E-MAC PROGRAM III: S&P Lowers Class B Notes Rating to 'BB+(sf)'
UPFIELD BV: S&P Assigns 'B' Rating on EUR400MM Sr. Secured Notes


R U S S I A

AVTOGRADBANK JSC: Bank of Russia Revokes Banking License


T U R K E Y

AKBANK TAS: Fitch Hikes Local Currency IDR to 'B+'
TURKIYE GARANTI: Fitch Affirms 'B' LongTerm IDR, Outlook Positive
TURKIYE IS BAKANSI: Fitch Hikes Local Currency IDR to B+


U K R A I N E

[*] UKRAINE: Debt Restructuring Talks End Without Deal


U N I T E D   K I N G D O M

BELLIS FINCO: S&P Assign 'B+' LongTerm ICR, Outlook Stable
BROWSIDE LIMITED: Goes Into Administration
DAVIS ROOFING: Collapses Into Administration
GATHER INTERNATIONAL: Falls Into Administration
LUKE MIDCO: S&P Assigns Prelim. 'B-' ICR on Buyout by Thoma Bravo

SH STRUCTURES: Owed GBP4.5 Million at Time of Administration
SPIRIT FIRES: Assets Put Up for Sale Following Liquidation

                           - - - - -


===========
F R A N C E
===========

STELLAGROUP: S&P Affirms 'B' LongTerm ICR, Outlook Stable
---------------------------------------------------------
S&P Global Ratings affirmed its 'B' long-term issuer credit rating
on France-based closure systems manufacturer Stellagroup and its
'B' issue rating on the company's debt.

The stable outlook reflects S&P's view that Stellagroup's S&P
Global Ratings-adjusted leverage will remain below 6.5x and that
the company will continue generating positive free operating cash
flow (FOCF).

Stellagroup's proposed amendment and extension of its debt will
improve the company's maturity profile and liquidity. Stellagroup
launched the amend-and-extend process with the intention to extend
the maturity of its EUR510 million TLB by 3.5 years to June 2029
and of its RCF to December 2028. S&P understands that most lenders
will roll into the extended facility and that new lenders will
compensate any existing lenders that decide not to roll. As part of
this transaction, Stellagroup also plans to upsize its RCF by EUR20
million, which further increases its liquidity headroom.

S&P said, "Despite a challenging environment, we anticipate an
improvement in the company's performance over 2024-2025, supported
by the integration of Pratic, cross selling efforts, and gross
margin improvements.Overall, we anticipate that the new build
market will remain difficult over the next few months and that the
roller shutter renovation trend in France and Germany will remain
stable, with no significant rebound. That said, we expect an
improvement in the company's EBITDA this year, supported by the
integration of Pratic, which Stellagroup acquired in June 2023. We
understand that Pratic, after 12 months of operations, generated
EUR61 million in sales and approximately EUR19 in EBITDA on a pro
forma basis in 2023, representing a margin of about 31%. Moreover,
we anticipate an acceleration in cross-selling, mostly in the
outdoor business unit, and an extension of product ranges that
results from the addition of Pratic's offering. Stellagroup's gross
margin will also benefit from decreasing raw materials prices, for
example for aluminum and steel."

Stellagroup's leverage and cash flow generation will remain
commensurate with the 'B' rating. Supported by improved EBITDA in
2024, the company's leverage will decline to about 5.0x-5.2x in
2024, from 6.1x in 2023. At the same time, S&P anticipates that the
company's cash flow generation will remain healthy and expect FOCF
of EUR60 million-EUR65 million in 2024. This is supported by a
limited capital intensity, with total capital expenditure (capex)
likely to remain stable at about EUR17 million-EUR18 million. S&P
understands that Stellagroup will continue focusing on inventory
optimization, which will lead to a modest working capital release.

The stable outlook reflects S&P's view that Stellagroup's adjusted
leverage will remain below 6.5x and that the company will continue
generating positive FOCF.

S&P could lower the rating on Stellagroup if:

-- Adjusted debt to EBITDA increased above 6.5x over a prolonged
period, for example because of debt-funded acquisitions;

-- Severe operational issues significantly reduced FOCF;

-- Liquidity pressure emerged; or

-- Stellagroup and its financial sponsor followed a more
aggressive strategy with regard to leverage or shareholder
returns.

S&P is unlikely to upgrade Stellagroup over our 12-month rating
horizon due to its high leverage. Private equity ownership could
increase the possibility of higher leverage or shareholder returns.
Therefore, S&P could raise the rating if:

-- Adjusted debt to EBITDA fell consistently below 5x;

-- Funds from operations (FFO) to debt increased consistently
above 12%; and

-- Stellagroup and its owner showed a commitment to lowering and
maintaining leverage metrics at these levels.




=============
G E R M A N Y
=============

PRESTIGE BIDCO: S&P Affirms 'B+' ICR on Refinancing, Outlook Stable
-------------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' issuer credit rating on
members-only, off-price fashion online platform Prestige Bidco GmbH
and assigned its 'B+' issue rating, with a '3' recovery rating (65%
recovery prospects) to the proposed issuance.

The stable outlook reflects S&P's view that Prestige will restore
headroom under the rating and consistently reduce leverage to the
level commensurate with its financial policy commitment, adjusted
debt to EBITDA of below 4.5x by 2025 while generating considerable
FOCF after leases.

Prestige Bidco, parent of the members-only, off-price fashion
online platform BestSecret, intends to refinance its EUR400 million
floating rate notes (FRN) maturing in July 2027 with EUR550 million
FRN maturing in June 2029. The proceeds, together with accumulated
cash on balance sheet, will repay the existing notes, fund a EUR250
million dividend distribution, and pay transaction-related fees and
expenses.

Prestige's intention to refinance its capital structure will
lengthen its maturity profile and support its liquidity position.
On June 17, 2024, Prestige launched the refinancing of its capital
structure, comprising EUR400 million FRNs maturing in July 2027 and
a EUR110 million revolving credit facility (RCF), also maturing in
2027, through the issuance of EUR550 million FRNs that will mature
in June 2029. This proposed transaction, coupled with EUR113
million of cash on balance sheet, will allow for a EUR250 million
dividend distribution to the sponsor, Permira. Furthermore, about
EUR97 million of cash will likely stay on the balance sheet, pro
forma the transaction, translating to a sound liquidity position.
Although the proposed transaction raises total debt by EUR150
million, S&P anticipates a minimal impact on the annual debt
service payment, based on its expectations of a lower coupon than
when Prestige refinanced its capital structure in 2022 amid a very
turbulent debt capital market environment.

Albeit temporary, the increase in adjusted leverage because of the
partially debt-funded dividend payout reduces the rating headroom
in the short run. At end-2024, S&P Global Ratings-adjusted leverage
should land at about 4.9x leading to limited financial flexibility
in the short run. S&P said, "Nonetheless, we note that this
leverage incorporates a sizable portion of lease liabilities
estimated above EUR200 million in 2024, reflecting a relatively
long contracted period of fixed annual lease payments at about
EUR20 million per year. Robust earnings growth leads us to assume
Prestige will rapidly deleverage, with adjusted debt to EBITDA
sharply declining to 3.8x in 2025 then to 2.9x in 2026. This is a
temporary deviation from the historically prudent financial policy,
and the group will revert to its consistent path commensurate with
its strong commitment to deleveraging by 2025. Additionally, we
estimate that Prestige's EBITDAR coverage ratio will stay at a
still-strong 2.5x in 2024, although its lower than 2.9x in 2023,
exacerbated by the one-off debt issuance costs this year, and
increasing to 3.9x in 2025. We therefore consider that the spike in
adjusted debt to EBITDA in 2024 will not last more than a year,
leaving our assessment of its financial policy at FS-5."

S&P said, "We expect the group to keep expanding quickly over the
next three years thanks to continued internationalization, rapid
growth in the luxury off-price segment, and supportive market
trends. We expect Prestige to reach about EUR2.0 billion of sales
by 2026, from EUR1.2 billion in 2023. Still-strong momentum in
Germany should support top-line growth, but the group's
international division will be the stronger driver with an above
30% growth each year. We expect eastern European countries to drive
a considerable share of the growth, whereas France and Italy will
lag behind due to their more competitive markets. We expect the
international segment and Germany to be at par in 2025,
representing a major milestone in the successful
internationalization of the group. This is positive for the rating,
in our view, since it enables the group to handle the potential
setbacks for its core and rather concentrated customer base as
recently experienced with difficulties in the German market
exhibiting lower customer sentiment than the rest of Europe. In
terms of product range, we expect growth to be strongly supported
by luxury items, which we project to reach 15% of total sales in
2027 from 4% in 2023. In June 2023, Prestige successfully issued a
EUR50 million add-on to finance the purchase inventories of brands
with high appeal, including luxury brands, and the group is
consolidating its relationships with major luxury fashion houses.
We estimate topline growth to reach 16.3% in 2024, then climb
further to 19%-20% in both 2025 and 2026. In our view, this growth
is equally supported by robust market trends for the mid to luxury
online off-price industry and of Prestige's ability to capture
additional market share thanks to its unique business model based
on a close membership circle.

"The completion of the fulfilment center's automation, cost
discipline, and positive cost of goods sold momentum should boost
profitability. We expect the fulfilment center in Poland, which
triples Prestige's inventory capacity, to see completed automation
by the end of 2025 leading to major cost optimizations.
Construction started in late 2022 and it became operational in the
second quarter of last year. We also expect Prestige to further
optimize its cost structure, mainly on staff and overheads. On top
of these efficiencies, the group is currently seeing a sizable
decease as a percentage of sales in the cost of goods sold compared
with prior years. Weak discretionary spending is leaving apparel
companies with high inventory levels and provides off-price
retailers, such as Prestige, with greater bargaining power and
numerous opportunities. This should boost profitability over the
near term, but we expect the trend to reverse by the end of 2025
with cost of goods sold normalizing at higher levels. Compared to
PrestigeBidco GmbH's reported EBITDA, our adjusted figures, over
the past two years and going forward, take into account overhead
costs at the holding level, BestSecret Group SE, amounting to
EUR10.4 million in 2023. We also adjust for capitalize development
costs directed towards the development of the online platform
amounting to EUR10.1 million in 2023. As such, we expect Prestige
to exhibit adjusted EBITDA of EUR172 million in 2024, EUR221
million in 2025, and EUR282 million in 2026, versus EUR134 million
in 2023 leading to an EBITDA margin at 12.1% in 2024 reaching 14.0%
by 2026 from 10.9% in 2023.

"Although facing high expansionary capital expenditure (capex) in
2024 as well as high cash interest expense, we expect Prestige to
generate positive FOCF that will increase considerably
thereafter.The year 2024 will represent the peak of investment in
the new fulfilment center with total capex (including capitalized
development costs) reaching about EUR97 million. The facility is
already in operations, and, by the end of next year, it should be
fully automatized, translating into major cost efficiencies for the
group. We expect capex to be lower but still elevated driven by
further investments in technology and data. Despite being affected
by one-off transaction costs of about EUR13 million in 2024 and an
increase in absolute debt quantum, cash interest expense should
decrease on the back of more favorable short-term rate environment,
coupled with our expectations of lower coupon than the prior
issuance. Overall, we expect FOCF to be positive but minimal at
about EUR16 million in 2024, increasing to EUR66 million in 2025
and EUR115 million in 2026. That said, we note that the group has
supply chain financing and receivables factoring programs
outstanding. We see potential working capital risks should the
providers terminate the contracts, although this is not our central
case.

"Should EBITDA expansion fall short of our expectations and
leverage metrics fail to deliver, we could question the sponsor's
commitment to deleveraging.Our expectations of a steep deleveraging
by 2025 implies a robust growth in absolute EBITDA of about 65%
compared to 2023, leading to adjusted EBITDA reaching EUR223
million in 2025 from EUR134 million in 2023. Although not our
central case, we see some degree of execution risk in the group's
growth strategy, which could jeopardize the initial expansion plan.
We see two potential risks: (i) the growth of the international
segment being mostly driven by eastern European countries, where we
see a higher uncertainty of demand due to increased volatility of
the macroeconomic environment; and (ii) the growth in the off-price
luxury segment, which is a new area of expansion where Prestige has
to build and secure its supplier base. Although not our base case,
if EBITDA expansion falls short of our expectations and either the
FOCF or debt to EBITDA does not meet our projections, the questions
arising around the sponsor's commitment to deleveraging may lead us
to revise the financial policy assessment to FS-6.

"The stable outlook reflects our view that Prestige will be able to
restore headroom under the rating and consistently deleverage,
reaching adjusted debt to EBITDA of below 4.5x, the level
commensurate with its financial policy commitment, by 2025 while
generating considerable FOCF after leases. Prestige will continue
to expand significantly over the next three years, underpinned by
its well-established online business with above-industry average
growth prospects."

Downside scenario

S&P could lower the rating over the next 12 months if Prestige:

-- Failed to deleverage at a pace that that would confirm its
ability to achieve adjusted debt to EBITDA of less than 4.5x by
2025, or

-- Generated weaker FOCF after all lease-related payments than our
current expectations, or

-- Undertook other actions akin to the group adopting a more
aggressive financial policy, such as prioritizing other strategic
objectives extending the period of elevated leverage, or pursuing
sizable debt-financed acquisitions or shareholder distributions.

A negative rating action could follow if the management's growth
strategy faltered, resulting in much lower overall earnings or
depressing cash generation beyond our current expectations. This
could also occur if the company accelerated the pace of capex ahead
of earnings or if availability of funding sources for its working
capital suddenly declined, affecting for example the receivables
factoring or the supplier financing arrangements.

Upside scenario

S&P said, "We see rating upside as unlikely over the next 12
months, given low headroom under the rating pro forma the
transaction and already substantial expansion in earnings
incorporated in our base case for Prestige to restore its
compliance with its stated financial policy. However, we could
consider an upgrade if Prestige demonstrated its financial policy
commitment and reduced leverage faster than we currently
anticipate. Furthermore, an upgrade would depend on the group
expanding its scale of operations by increasing its revenue and
profitability margin much quicker than we currently anticipate,
while generating strong FOCF. An upgrade would also depend on a
clear and consistent commitment from the owners to maintain its
financial policy and adequate liquidity.

"Governance factors are a moderately negative consideration in our
credit rating analysis of Prestige, as is the case for most rated
entities owned by private-equity sponsors. We think the company's
aggressive 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."




=============
I R E L A N D
=============

CVC CORDATUS XXXI: Fitch Assigns 'B-sf' Rating on Class F-2 Notes
-----------------------------------------------------------------
Fitch Ratings has assigned CVC Cordatus Loan Fund XXXI DAC final
ratings.

   Entity/Debt             Rating             Prior
   -----------             ------             -----
CVC Cordatus Loan
Fund XXXI DAC

   A XS2801951117      LT AAAsf  New Rating   AAA(EXP)sf

   B-1 XS2801951380    LT AAsf   New Rating   AA(EXP)sf

   B-2 XS2801952602    LT AAsf   New Rating   AA(EXP)sf

   C XS2801951547      LT Asf    New Rating   A(EXP)sf

   D XS2801951976      LT BBB-sf New Rating   BBB-(EXP)sf

   E XS2801952867      LT BB-sf  New Rating   BB-(EXP)sf

   F-1 XS2801952198    LT B+sf   New Rating   B+(EXP)sf

   F-2 XS2801952941    LT B-sf   New Rating   B-(EXP)sf

   Subordinated Notes
   XS2801952511        LT NRsf   New Rating   NR(EXP)sf

TRANSACTION SUMMARY

The CVC Cordatus Loan Fund XXXI Designated Activity Company (DAC)
is a securitisation of mainly (at least 96%) senior secured
obligations with a component of senior unsecured, mezzanine, second
lien loans and high-yield bonds. Note proceeds are used to purchase
a portfolio with a target par of EUR440 million.

The portfolio is actively managed by CVC Credit Partners Investment
Management Limited (CVC) and the collateralised loan obligation
(CLO) has about a 4.5-year reinvestment period and a seven-year
weighted-average life (WAL) test at closing, which can be extended
one year after closing, subject to conditions.

KEY RATING DRIVERS

Average Portfolio Credit Quality (Neutral): Fitch assesses the
average credit quality of obligors at 'B'. The Fitch
weighted-average rating factor (WARF) of the identified portfolio
is 24.4.

High Recovery Expectations (Positive): At least 96% 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 (WARR) of the identified portfolio
is 61.4%.

Diversified Portfolio (Positive): The transaction includes various
concentration limits in the portfolio, including a maximum
fixed-rate obligation limit at 12.5%, 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 is not be exposed to excessive
concentration.

Portfolio Management (Neutral): The transaction has two Fitch test
matrices at closing that correspond to a top 10 obligor
concentration at 20%, a WAL of 7 years and two fixed-rate asset
limits at 5% and 12.5% respectively. The transaction has a 4.5-year
reinvestment period and includes reinvestment criteria similar to
those of other European transactions. Fitch's analysis is based on
a stressed case portfolio with the aim of testing the robustness of
the transaction structure against its covenants and portfolio
guidelines.

WAL Step-Up Feature (Neutral): One year after closing, and
following the step-up determination date, the transaction can
extend the WAL by one year. The WAL extension is at the option of
the manager, but is subject to conditions, including passing the
collateral-quality tests, and if the aggregate collateral balance
(defaulted obligations at the lower of the market value and Fitch
recovery rate) is at least at the reinvestment target par amount.

Cash Flow Modelling (Positive): The WAL for the transaction's
stress portfolio and matrices 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 class A notes; and result in
a downgrade of no more than one notch on the class B, C, D and E
notes; a downgrade of no more than two notches on the F-1 notes;
and a downgrade below ´B-sf' for the class F-2 notes.

Downgrades, which are based on the current portfolio, may occur if
the loss expectation is larger than initially assumed, due to
unexpectedly high levels of defaults and portfolio deterioration.
Due to the better metrics than the Fitch-stressed portfolio, the
rated notes display a rating cushion to a downgrade of up to three
notches higher than the cushion on the Fitch-stressed portfolio.

Should the cushion between the current and the Fitch-stressed
portfolio erode due to manager trading in the post-reinvestment
period 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 result in a downgrade of up to
four notches for the class B notes; a downgrade of three notches
for the class A notes; a downgrade of two notches for the class C
and D notes; and a downgrade to below 'B-sf' for the class E, F-1
and F-2 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 portfolios would lead to
upgrades of up to three notches for the rated notes, except for the
'AAAsf' rated notes which cannot be upgraded further.

During the reinvestment period, based on 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
occur in case of stable portfolio credit quality and deleveraging,
leading to higher credit enhancement and excess spread available to
cover 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 CVC Cordatus Loan
Fund XXXI 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.


TRINITAS EURO III: S&P Assigns B-(sf) Rating on Class F-R Notes
---------------------------------------------------------------
S&P Global Ratings assigned credit ratings to Trinitas Euro CLO III
DAC's class A-R to F-R European cash flow CLO notes. At closing,
the issuer had unrated subordinated notes outstanding from the
existing transaction and issued additional subordinated notes.

The transaction is a reset of the already existing transaction
which closed in November 2022. The issuance proceeds of the
refinancing debt were used to redeem the refinanced debt (the
original transaction's class A, B-1, B-2, C, D, E, and F notes for
which S&P withdrew its ratings at the same time).

Under the transaction documents, the rated notes pay quarterly
interest unless a frequency switch event occurs. Following this,
the notes will switch to semiannual payments.

The transaction has a 1.5-year non-call period and the portfolio's
reinvestment period will end approximately 4.6 years after
closing.

The ratings reflect S&P's assessment of:

-- The diversified collateral pool, which primarily comprises
broadly syndicated speculative-grade senior-secured term loans and
bonds that are governed by collateral quality tests.

-- The credit enhancement provided through the subordination of
cash flows, excess spread, and overcollateralization.

-- The collateral manager's experienced team, which can affect the
performance of the rated notes through collateral selection,
ongoing portfolio management, and trading.

-- The transaction's legal structure, which is bankruptcy remote.

-- The transaction's counterparty risks, which are in line with
S&P's counterparty rating framework.

  Portfolio benchmarks
                                                        CURRENT

  S&P weighted-average rating factor                   2,696.67

  Default rate dispersion                                581.56

  Weighted-average life (years)                            4.40

  Weighted-average life (years) extended
  to cover the length of the reinvestment period           4.58

  Obligor diversity measure                              140.45

  Industry diversity measure                              22.50

  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 (%)                          0.43

  Actual target 'AAA' weighted-average recovery (%)       37.35

  Actual target weighted-average spread (net of floors; %) 4.00

  Actual target weighted-average coupon (%)                4.54


At closing, 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 the EUR425 million
target par amount, the covenanted weighted-average spread (4.00%),
the covenanted weighted-average coupon (4.54%), and the covenanted
weighted-average recovery rates at all rating levels. 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.

"Until the end of the reinvestment period on Jan. 14, 2029, the
collateral manager may substitute assets in the portfolio for so
long as our CDO Monitor test is maintained or improved in relation
to the initial ratings on the notes. This test looks at the total
amount of losses that the transaction can sustain as established by
the initial cash flows for each rating, and it compares that with
the current portfolio's default potential plus par losses to date.
As a result, until the end of the reinvestment period, the
collateral manager may through trading deteriorate the
transaction's current risk profile, as long as the initial ratings
are maintained.

"Under our structured finance sovereign risk criteria, we consider
that the transaction's exposure to country risk is sufficiently
mitigated at the assigned ratings.

"The transaction's documented counterparty replacement and remedy
mechanisms adequately mitigate its exposure to counterparty risk
under our current counterparty criteria.

"The transaction's legal structure and framework are bankruptcy
remote, in line with our legal criteria.

"Following our analysis of the credit, cash flow, counterparty,
operational, and legal risks, we believe the assigned ratings are
commensurate with the available credit enhancement for the class
A-R, B-1-R, B-2-R, C-R, D-R, E-R, and F-R notes.

"Our credit and cash flow analysis indicates that the available
credit enhancement for the class B-1-R to F-R notes could withstand
stresses commensurate with higher ratings than those we have
assigned. However, as the CLO will be in its reinvestment phase
starting from closing, during which the transaction's credit risk
profile could deteriorate, we have capped our ratings assigned to
the notes.

"In addition to our standard analysis, we have also included the
sensitivity of the ratings on the class A-R to E-R notes based on
four hypothetical scenarios.

"As our ratings analysis makes additional considerations before
assigning ratings in the 'CCC' category, and we would assign a 'B-'
rating if the criteria for assigning a 'CCC' category rating are
not met, we have not included the above scenario analysis results
for the class F-R notes."

The transaction securitizes a portfolio of primarily senior-secured
leveraged loans and bonds, and is managed by Trinitas Capital
Management LLC.

Environmental, social, and governance

S&P said, "We regard the exposure to environmental, social, and
governance (ESG) credit factors in the transaction as being broadly
in line with our benchmark for the sector. Primarily due to the
diversity of the assets within CLOs, the exposure to environmental
credit factors is viewed as below average, social credit factors
are below average, and governance credit factors are average. For
this transaction, the documents prohibit assets from being related
to certain activities, including but not limited to, the following:
weapons of mass destruction, illegal drugs or narcotics, opioids,
pornographic or prostitution, child or forced labor, payday
lending, electrical utility limitations, oil and gas, tobacco,
civilian firearms, hazardous chemicals, private prisons, soft
commodities limitations, and trading coal limitations. 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
                       AMOUNT                      CREDIT
  CLASS    RATING*   (MIL. EUR)   INTEREST RATE§  ENHANCEMENT (%)

  A-R      AAA (sf)    263.50        3mE +1.46%     38.00

  B-1-R    AA (sf)      40.20        3mE +2.00%     27.25

  B-2-R    AA (sf)       5.50        5.75%          27.25

  C-R      A (sf)       24.40        3mE +2.55%     21.51

  D-R      BBB- (sf)    30.80        3mE +3.50%     14.26

  E-R      BB- (sf)     18.10        3mE +6.12%     10.00

  F-R      B- (sf)      12.70        3mE +8.25%      7.01

  Subordinated†  NR     41.76        N/A              N/A

*The ratings assigned to the class A-R, B-1-R, and B-2-R notes
address timely interest and ultimate principal payments. The
ratings assigned to the class C-R, D-R, E-R, and F-R notes address
ultimate interest and principal payments.
§The payment frequency switches to semiannual and the index
switches to six-month Euro Interbank Offered Rate when a frequency
switch event occurs.
NR--Not rated.
N/A--Not applicable.
3mE--Three-month Euro Interbank Offered Rate.
†At closing, the issuer had unrated subordinated notes
outstanding from the existing transaction and issued additional
subordinated notes.




=========
I T A L Y
=========

DOVALUE SPA: S&P Affirms 'BB' LongTerm ICR on Gardant Acquisition
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' long-term issuer credit rating
on debt servicer doValue SpA and its 'BB' issue rating on the
existing senior secured debt. The recovery rating on the debt has
been revised up to '3' from '4' because the amortization built into
the new capital structure is likely to support recovery in the
event of a default.

The stable outlook indicates that S&P expects successful
integration of Gardant to enable doValue to reduce leverage to
below 3x by year-end 2025, while also increasing funds from
operations (FFO) to debt to above 20% and generating strong free
operating cash flow (FOCF) of more than EUR70 million a year.

doValue SpA has announced that it will acquire Italian debt
servicer Gardant for EUR230 million. The transaction will make it
the largest debt servicer in Italy and is expected to not only
boost profitability but also accelerate doValue's diversification
away from the nonperforming loan (NPL) market.

Acquiring Gardant will reinforce doValue's position as a leading
debt servicer in Southern Europe and support its strategic plan.
Because NPL volumes have been declining, doValue aims to diversify
its servicing activities away from this type of loan. The
acquisition will enable the company to increase its exposure to the
servicing of a different type of underperforming loan, those
defined as unlikely-to-pay (UTP), while reducing its exposure to
NPL servicing. Acquiring Gardant will also increase doValue's
scale, given that its revenue in 2024 is estimated at about EUR135
million and its reported EBITDA at EUR50 million, and it has more
than EUR20 billion of assets under management (AUM). The combined
entity would be the largest debt servicer in Italy.

The Gardant acquisition would also be margin-accretive for doValue.
Gardant reported EBITDA margins of 37% in 2023; doValue reported
EBITDA margins of 33%. S&P said, "We attribute Gardant's higher
margins, in part, to its revenue mix--it generates about 40% of its
revenue from services not linked to nonperforming loans (NPLs). In
addition, because the debt it services defaulted more recently than
the debt doValue services, collection rates are typically higher.
We see as positive Gardant's significant exposure to the
more-dynamic UTP market, given that NPL volume growth in Southern
Europe is expected to decline in the coming years."

Gardant has signed joint-venture agreements with two Italian
banks--Banco BPM and BPER. After the acquisition, doValue would
gain significant benefits from these agreements, each of which
brings in EUR8 billion-EUR10 billion of NPL inflows over the life
of the agreement. The Banco BPM deal is due to mature in 2029. The
BPER deal is longer-lasting, and will mature until 2034. It also
includes guaranteed minimum volumes and inflows of UTP loans,
making it uniquely valuable.

The transaction involves issuing sufficient debt and equity to both
finance the acquisition and address upcoming refinancing needs. S&P
said, "We expect it to close in the fourth quarter of 2024, thus
reducing leverage from 2025. The company will issue a term loan of
up to EUR450 million, underwritten by a pool of banks, that matures
in five years. In addition, it will issue an additional EUR70
million three-year revolving credit facility. The current
shareholders will also subscribe to a EUR150 million equity
injection. Upon closing, doValue will use the proceeds to pay
EUR230 million for Gardant and will also repay its EUR264 million
notes maturing in August 2025. After the transaction closes,
doValue will have around EUR170 million of cash on its balance
sheet and EUR140 million of undrawn lines, including EUR40 million
of existing revolving credit facilities (RCFs). In 2025, we expect
the combined entity to generate about EUR65 million in cash flow,
which will be available for debt repayment. This will allow doValue
to comfortably repay its EUR296 million notes due July 2026."

The transaction will have a positive impact on credit metrics. S&P
said, "We expect the additional EBITDA brought by Gardant, combined
with the equity injection, to cause S&P Global Ratings
adjusted-leverage to decline to 2.8x by year-end 2025, from 3.7x at
year-end 2023 (predicted leverage for 2024 is 3.9x, pro forma the
transaction). This reduction in leverage will also be supported by
the 15% a year amortization of the term loan. Cash interest paid
will increase to EUR47 million in 2025 because of the higher debt
amount. In addition, the term loan pays a variable rate that is
higher than the fixed rates paid on the notes (5% for the 2025
maturities and 3.375% for the 2026 maturities). Despite this, we
forecast that FFO to debt will recover to 20.5% in 2025, from 18%
in 2023 and a predicted 15.5% in 2024. Given Gardant's asset-light
business model--it has not purchased any debt--we anticipate that
FOCF generation will remain strong in the coming years, and will be
EUR71 million in 2025."

S&P said, "We expect the company to maintain a financial policy
that supports the current 'BB' rating after the transaction.
Fortress Investment Group LLC is predicted to own a 23% stake in
the company after the transaction closes, while Elliott Advisors
(UK) Ltd. would own 17% and Bain Capital Credit Member LLC 11%.
Even though this would bring total ownership by financial sponsors
to 51%, we do not expect them to take joint control of the company
following the transaction. Given that we understand that there is
no written or oral agreement between the sponsors to align on key
decisions for the company, each of them is likely to follow its own
strategic agenda. Under our criteria, we do not consider that this
situation amounts to joint control by financial sponsors. We
therefore expect the company to follow a relatively prudent
financial policy in the coming years that supports the 'BB' rating.
However, higher-than-expected dividends distributions could reduce
rating headroom. The debt servicing market in Southern Europe
continues to consolidate, making further acquisitions possible in
the future. However, we do not anticipate that the company would
increase its S&P Global Ratings-adjusted leverage above 4x to
finance acquisition. We also view as positive the equity
contribution that forms part of the current transaction.

"The stable outlook reflects our expectation that the successful
integration of Gardant will enable doValue to reduce leverage to
below 3x by year-end 2025, while also increasing FFO to debt to
above 20% and generating strong FOCF of more than EUR70 million a
year.

"We could lower the rating if adjusted leverage climbs above 4x on
a sustained basis. We could also lower the rating if FFO to debt
did not recover to about 20% and free cash flow to debt fell below
10% for a prolonged period."

This could happen if:

-- Gross book value declines significantly due to contract losses
or if the company is unable to win new tenders;

-- doValue adopts a more-aggressive financial policy and
undertakes debt-funded acquisitions; or

-- doValue encounters issues in integrating Gardant, leading to
higher-than-expected one-off costs.

S&P said, "If we considered that financial sponsors and main
shareholders Fortress, Bain Capital, and Elliott were acting
together, we could lower the rating. If they acted in concert, they
would have effective control of the company and we would need to
evaluate its financial policy under their control.

"We see an upgrade as unlikely in the near term. We could raise the
rating if doValue reduces leverage, such that it sustains adjusted
debt to EBITDA of 2x-3x and FFO to debt of 30%-45%. This could
occur if the company maintained a relatively stable gross book
value, or at least partly offset any decline in the gross book
value by winning new contracts, and at the same time, it continued
to achieve stable EBITDA margins of over 30%."

An upgrade would also depend on doValue committing to maintaining
company-reported debt to EBITDA below 2x, and funding any
acquisitions primarily using internally generated cash flows.

ESG factors have no material influence on our credit rating
analysis of doValue. S&P said, "We assess management and governance
as neutral. Despite holding more than 50% of voting rights on a
combined basis, we understand that financial sponsors Fortress,
Elliott, and Bain Capital do not act together and will maintain
their own strategic goals. We therefore do not consider that they
jointly control doValue and that their shareholding is detrimental
to the interests of the company's other stakeholders, and to its
credit quality."




===================
K A Z A K H S T A N
===================

FINCRAFT GROUP: S&P Affirms 'B/B' ICRs Then Withdraws Ratings
-------------------------------------------------------------
S&P Global Ratings revised its outlook on Kazakhstan-based Fincraft
Group LLP to negative from stable and affirmed its 'B' long-term
ICR and 'B' short-term ICR on Fincraft. At the same time, S&P
affirmed its 'kzBB+' Kazakhstan national scale rating. S&P withdrew
all ICRs at the company's request.

S&P said, "Contrary to our expectations, Fincraft has not improved
its stressed leverage over the past 12 months. The company has not
brought new assets to its balance sheet, nor has it reduced its
debt to about Kazakhstani tenge (KZT) 35 billion by mid-2024, as it
planned one year ago. We estimate that its stressed leverage was
about 1.3x as of June 1, 2024, which considers about KZT250 billion
of assets (with haircuts) and KZT62 billion of debt. Compared with
KZT190 billion assets and KZT57 billion debt as of mid-2023, we
also expected that Fincraft would reduce debt to about KZT37
billion by mid-2024. Therefore, we revised down our assessment of
its stressed leverage to moderate from adequate.

"Our current base case assumes that stressed leverage is unlikely
to improve to an adequate level over the next 12 months. Although
we assume that Fincraft may bring some new investments on balance
sheet, we remain mindful of its track record of delays in divesting
assets and its mixed record of bringing assets on balance sheet. It
is possible that stressed leverage could improve more than we
forecast, however this metric is more sensitive to a reduction of
debt than to increasing balance sheet assets."

Fincraft's liquidity is moderate. In April 2024, Fincraft bought
back its KZT25 billion bond due 2026 with the proceeds from a new
five-year bank loan. Fincraft's current debt therefore includes two
long-dated bank loans for about KZT45 billion, a $36 million bond
maturing in December 2025, and a KZT2 billion bond maturing in
2029. S&P expects that Fincraft's liquidity ratio will remain in
the range of 0.5x-1.0x over the next 12 months, even without
short-term debt maturities. To repay debt, Fincraft remains
structurally reliant on asset sales and balance-sheet cash because
its investments generate limited cash flow.

With weaker stressed leverage and slightly improved liquidity,
Fincraft's stand-alone credit profile (SACP) remains unchanged at
'b'. The SACP includes a positive comparative rating adjustment to
reflect the relative strength of its overall creditworthiness
compared to peers. In S&P's view, Fincraft also has more
flexibility to improve its stressed leverage than is currently
assumed in our base case--particularly if its divestment and
acquisition plans come to fruition.

S&P said, "The negative outlook reflects our view that a further
substantial delay in Fincraft's divestment and acquisition plans
could undermine its resilience to stress and weaken its ability to
repay the 2025 bond maturity.

"We could lower the long-term rating on Fincraft over the next 12
months if its liquidity proves to be weaker than expected or
stressed leverage deteriorates.

"We could revise the outlook to stable if Fincraft delivers on its
divestment plans, repays some debt, and brings additional assets on
its balance sheet (resulting in improved stressed leverage). A
revision to stable also relies on us having high confidence that it
would be able to repay or refinance its debt due December 2025."




=====================
N E T H E R L A N D S
=====================

DRIVE PARENTCO: S&P Assigns Prelim. BB- (sf) LT ICR, Outlook Stable
-------------------------------------------------------------------
S&P Global Ratings assigned its 'B' long-term issuer credit rating
to Drive Parentco B.V. and its 'B' issue rating to Drive Bidco's
EUR325 million term loan B (TLB), due in 2031, with a '3' recovery
rating, indicating its estimate of 60% recovery in a default
scenario.

The stable outlook reflects that S&P expects Nexeye to continue
displaying organic growth with a favorable price/product mix and
achieving S&P Global Ratings-adjusted EBITDA margin of about 25.0%
in 2024, improving thereafter, and free operating cash flow (FOCF)
after leases above EUR25 million from 2024.

In April 2024, private equity firm Kohlberg Kravis Roberts (KKR)
agreed to acquire Nexeye Holding B.V., a Netherlands-based
optometric care provider and retailer and hearing aids retailer
that reported EUR385.8 million of revenue and EUR96 million of S&P
Global Ratings-adjusted EBITDA in fiscal 2023 (ended Jan. 31,
2024).

The transaction is due to close before June 30, 2024, with the new
capital structure including a EUR325 million term loan B (TLB) to
be raised by Drive Bidco B.V., a fully controlled subsidiary of
Nexeye's group parent, Drive Parentco B.V., as well as a EUR70
million committed revolving credit facility (RCF) undrawn at
closing.

Nexeye displays diverse market positioning in both the value and
value-for-money formats through its Hans Anders and Eyes+More
banners, resulting in a complementary product offering enabling a
wider customer base. Nexeye's two distinctive brands, Hans Anders
and Eyes+More, display unique pricing and positioning strategies.
Hans Anders, which operates in the Netherlands and in Belgium,
offers high-quality products and services at lower price points
than competition and relies on a build-your-own model, enabling
customers to self-select their product features, maximizing their
choices. Hans Anders offers a higher-quality service and balanced
product mix between branded products and private labels, attracting
customers seeking quality and value. Unlike Hans Anders, Eyes+More
is positioned in the value-for-money segment with a transparent and
differentiated pricing model. Eyes+More focuses on low- and
all-inclusive bundle prices at a much lower price point up to 60%
below market average, attracting more price-sensitive customers.
S&P said, "In our view, this strategic positioning should enable
Nexeye to continue growing its earnings base even in the event of
weaker consumer demand. We also note that Nexeye operates in
countries having limited public reimbursement frameworks for
eyeglasses, so we believe the low-price value proposition enables
Nexeye to differentiate itself from competitors. Additionally, we
believe that Nexeye's product portfolio with complementary products
such as contact lenses, non-prescription sunglasses, insurance
(Bril Garant Plan; BGP), and hearing aid devices enables the group
to target more customers and grow its revenue base." Additionally,
it operates 34 Direkt Optik locations, a local specialist format
active only in Sweden.

Nexeye's planned expansion of its Eyes+More network in Germany and
shift toward a more favorable price/product mix will enable further
expansion of its organic revenue base. S&P said, "We anticipate
that Nexeye will be able to generate revenue growth of 6.8% in
fiscal 2024 and 6.5% in fiscal 2025. The increasing revenue base
will be mainly supported by the expansion of Eyes+More in Germany,
where we anticipate 10-15 openings per year. This owes to
Eyes+More's positioning in the value-for-money segment, which
targets a wide customer base, and the expected increasing
penetration in Germany, supported by the continued development of
the banner. Ramp-up and maturation of recently opened Eyes+More
stores in Germany that will experience volume increase will
translate into higher revenue contribution and support the revenue
base. We also believe that Nexeye's marketing investment will
enable the group to increase its brand awareness in Germany and
engage new customers, contributing to volume increase.
Additionally, we assume that Nexeye's strategic shift toward
higher-margin products will enhance revenue thanks to a higher
revenue per store. Indeed, the company is currently focusing on
high-value-added optical equipment with more complex technical
features such as multi-focal lenses, improving coating finishes, or
margin accretive services such as BGP insurance and hearing aid
devices that should bolster revenue per site and support overall
top-line growth."

Nexeye's omni-channel and customer relationship management (CRM)
capabilities ensures a strong on-line and in-store presence, which
helps engage new or existing customers and support in-store
traffic. Thanks to its omni-channel positioning, Nexeye simplified
the customer journey by offering an on-line and in-store presence.
The company implemented digital tools to capture growing customer
demand by inputting on-line customer interfaces with advanced
booking and appointment management. These enable efficient staff
management and improved customer service once the customer is in
the store. Given that most customers still prefer an in-store
experience, this interaction with the client from on-line to
in-store also enables Nexeye to compete directly with on-line
retailers that cannot offer in-store experiences. Additionally, the
company displays a single CRM customer intelligence tool with a
database of more than 6 million clients. With this database, the
company has the ability not only to monitor repurchasing rates from
clients, but also to remind the client when it is time to change
glasses. This activation system enabled Nexeye to improve its
repurchasing rates, translating into higher volumes and revenue
over the last fiscal year. S&P believes that Nexeye will have the
ability to grow its customer database and continue driving the
repurchasing rate, translating into a recurring level of revenue in
all its stores.

S&P said, "We believe that Nexeye's store network expansion in the
optical segment and efficient management of its high fixed-costs
base will support profit margin expansion. We assume Nexeye's
profitability will gradually improve to 25.0%-25.5% over the next
12-18 months compared with about 24.9% in fiscal 2023. In our view,
this gradual improvement will stem from the ramp-up of new
Eyes+More stores and the maturation of the existing Eyes+More
stores, as well as operating leverage. Indeed, Nexeye's business
model relies on a fixed operating cost base, meaning that the
company will incur significant cost to drive its operations, but
the incremental revenue contribution will also enable increased
margins over the medium term. We believe that strong expansion of
Eyes+More in Germany will require additional fixed costs at
inception, such as personnel expenses and housing expenses, or
flexible costs like marketing expenses to promote the brand and
increase brand awareness in Germany." However, a new Eyes+More
store usually has a return on investment (ROI) of two years and
takes seven years to fully mature.

Nexeye's modest scale of operations and high geographic
concentration in three European countries expose the company to
competition and constrain our view of the business risk. With
revenue of about EUR386 million in fiscal 2023, Nexeye's scale of
operations is smaller than other rated peers', such as Afflelou or
Iris Holdco (Rodenstock). Nexeye operates mainly in three European
countries: the Netherlands (46% of revenue); Belgium (23% of
revenue); and Germany (27% of revenue). This significantly exposes
the company to competition. Remaining revenue is generated in
Sweden (3% of revenue) and Austria (1% of revenue). Indeed, Nexeye
operates in a fragmented market with several participants, both
optical chains and independents, which display higher market shares
or site counts. However, large chains such as Nexeye have gained
market share over the last several years, thanks to a full
omni-channel customer journey, coupled with a larger and better
system and CRM tools to engage a wider customer base. S&P said, "We
believe that Nexeye's positioning within the value segment, with
its clear differentiated pricing model versus independents or
larger chains, should enable it to further penetrate the market. We
also believe that the market could be prone to further
consolidation, given that independents' market share is decreasing,
and independents might have difficulties ensuring the continuity of
operations."

S&P said, "We forecast Nexeye will generate strong FOCF after
leases of about EUR25 million in fiscal 2024, improving to above
EUR30 million-EUR35 million starting in 2025, thanks to its capital
expenditure (capex)-light business model and efficient working
capital management. We expect capex to increase at about EUR20
million both fiscal 2024 and fiscal 2025 (versus EUR8.9 million in
fiscal 2023), reflecting Nexeye's growth capex plan that comprises
enterprise resource planning (ERP) investments, site relocations,
and new Eyes+More store openings in Germany that will fuel future
growth. Our forecast also factors in annual working capital inflows
of EUR3 million-EUR4 million in fiscal 2024 and fiscal 2025,
reflecting efficient inventory management and prepayment or payment
on delivery by customers. We expect that FOCF will further improve
in 2025 to about EUR30 million-EUR35 million, mostly due to higher
absolute EBITDA.

"We anticipate Nexeye's leverage will be relatively modest and
fixed-charge coverage ratio relatively low under the new ownership,
with adjusted debt to EBITDA at about 4.5x and a fixed-charge
coverage ratio of 1.7x in fiscal 2024 before both improve
thereafter. Following the transaction, we forecast that Nexeye's
S&P Global Ratings-adjusted debt to EBITDA will be about 4.5x in
fiscal 2024 and about 4.3x in 2025. This reflects our expectation
of top-line growth of about 6.5%-7.0% in 2024 and 6.0%-6.5% in 2025
and expansion of the EBITDA margin toward 25.5-26.0% on the back of
increased store numbers, ramp-up of recently opened stores, and
shift toward higher-margin products. Our adjusted debt figure
includes the EUR325 million TLB, limited amount of pension costs,
and our estimate of about EUR143 million of lease liabilities in
fiscal 2024. We expect that the EUR70 million RCF will be fully
undrawn at the transaction's close and during our forecast period.
Given the private equity ownership by KKR, we believe that Nexeye's
appetite for deleveraging is low, and we assume that self-generated
cash flow and its RCF line will fund external development
opportunities, rather than debt reduction. Therefore, we do not
deduct cash balances from our calculation of adjusted debt.
Additionally, given the nature of Nexeye's operating activities
with leases and high operating leverage, we also include the
fixed-charge ratio in our rating analysis. We expect the
fixed-charge coverage ratio to be about 1.7x in fiscal 2024 and
improve to 1.9x in fiscal 2025, reflecting higher EBITDA
generation.

"The stable outlook reflects our view that Nexeye will continue to
display strong organic growth, thanks to a favorable price-product
mix translating into higher EBITDA generation, despite high
operational leverage. In our base-case scenario, we forecast that
volumes will be supported by new store openings and their gradual
ramp-up, as well as increasing market share gains, thanks to an
increasing customer base.

"We project adjusted EBITDA margins after International Financial
Reporting Standard (IFRS) 16 of 25.0%-25.5% in the next 12-18
months, with adjusted debt to EBITDA comfortably below 5.0x over
the same period. We also forecast that Nexeye will generate
positive FOCF after leases close to EUR25 million in 2024 and
maintain a fixed-charge coverage ratio around 2x."

Downside scenario

S&P could lower its rating over the next 12 months if Nexeye is
unable to successfully achieve the ramp-up of its new stores and
sustain the level of average prices per store, hampering
profitability and thus raising leverage. This could translate
into:

-- Revenue growth and profitability materially deviating from
S&P's forecast in the event of debt-funded acquisition or
shareholder-friendly dividend distribution, such that the debt to
EBITDA exceeds 5x on a sustainable basis.

-- Minimal FOCF cushion resulting in limited ability to self-fund
growth.

-- EBITDA coverage decreasing toward 1.5x.

Upside scenario

S&P said, "We could raise our rating on Nexeye if we observe a
supportive fixed-charge coverage ratio above 2x and strong
generation of positive FOCF after leases. An upgrade would also
hinge on the company's ability to build a track record of applying
a prudent financial policy.

"Governance factors are a moderately negative consideration in our
credit rating analysis of Nexeye, because of controlling ownership.
We view financial sponsor-owned companies with aggressive or highly
leveraged financial risk profiles as demonstrating corporate
decision-making that prioritizes the interests of the controlling
owners. This also reflects the generally finite holding periods and
a focus on maximizing shareholder returns.

"We view social factors as an overall neutral consideration in our
analysis. Nexeye's primary offering, eyeglasses, benefit from
favorable demographics with a growing, ageing population and the
increasing prevalence of myopia, changing social and economic
lifestyles with increased usage in digital devices, and rising
disposable incomes. Additionally, vision correction is a necessity
reflecting the non-discretionary nature of the group's offerings.
Due to loss, wear, and tear of glasses and changes in vision,
Nexeye moreover benefits from a steady repurchasing cycle with
recurring revenue.

"We view environmental factors as a neutral consideration in our
analysis. Nexeye is actively working to enhance and oversee ESG
practices throughout its supply chain. It aims to diminish waste
and CO2 emissions across its shops, warehouses, and offices.
Notably, Nexeye has developed a key performance indicator framework
roadmap to support sustainability reporting. The company aims to
achieve full compliance with the Corporate Sustainability Reporting
Directive by the end of fiscal year 2026."


E-MAC PROGRAM III: S&P Lowers Class B Notes Rating to 'BB+(sf)'
---------------------------------------------------------------
S&P Global Ratings lowered to 'BB+ (sf)' from 'BBB- (sf)' and to
'B- (sf)' from 'B (sf)' its ratings on E-MAC Program III B.V.
Compartment NL 2008-II's class B and C notes, respectively. At the
same time, S&P affirmed its 'A+ (sf)' and 'CCC (sf)' ratings on the
class A2 and D notes, respectively.

Senior fees in the transaction have been increasing year-on-year,
leading to higher drawings on the liquidity facility. S&P has not
received any clarity on the reason for the rising fees and whether
this trend is likely to continue, and S&P therefore applied
additional stresses to reflect the current level of fees in its
analysis. The notes remain especially vulnerable to higher fees,
given the potential further draws on the liquidity facility and
reduction in excess spread in the future.

Furthermore, the pool factor has continued to reduce, to 14% in
April 2024 from 16% in April 2023. Lower pool granularity increases
the transaction's tail risk. Total loan level arrears for the same
period have increased to 9.7% from 3.7%.

S&P said, "Our ratings on the class B and C notes cannot withstand
the abovementioned additional stresses. We therefore lowered to
'BB+ (sf)' from 'BBB- (sf)' and to 'B- (sf)' from 'B (sf)' our
ratings on the class B and C notes, respectively.

"Given the sensitivity of the class C and class D notes to stresses
at our 'B' rating level, we applied our 'CCC' criteria, to assess
if either a rating in the 'B–' or 'CCC' category would be
appropriate. We performed a qualitative assessment of the key
variables, along with simulating a steady-state scenario in our
cash flow analysis. The class C notes can pass such a scenario,
however the class D notes do not.

"We do not consider the class C notes' repayment to be dependent
upon favorable business, financial, and economic conditions, and
therefore lowered the rating on the notes to 'B- (sf)'. We view the
class D notes' repayment to be dependent upon favorable business,
financial, and economic conditions, and affirmed our 'CCC (sf)'
rating.

"Our credit and cash flow analysis indicates that the available
credit enhancement for the class A2 notes can support a higher
rating than currently assigned. Although the rating is robust to
our stressed fee assumptions, we affirmed our 'A+ (sf)' rating,
considering the lack of clarity around the increased transaction
fees, the resultant liquidity facility drawings, and the continued
reduction in pool granularity."

The swap counterparty in the transaction is NatWest Markets PLC.
Based on the combination of the replacement commitment and the
collateral posting framework, the maximum potential rating
supported by the swap counterparty in this transaction is 'AA-'.
All other rating-dependent counterparties do not constrain our
ratings on the notes.

E-MAC Program III Compartment NL 2008-2 is a Dutch RMBS transaction
backed by Dutch residential mortgages originated by CMIS Nederland
(previously GMAC-RFC Nederland).


UPFIELD BV: S&P Assigns 'B' Rating on EUR400MM Sr. Secured Notes
----------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue rating to the long-term
EUR400 million senior secured notes to be issued by Upfield BV,
financial subsidiary to Upfield Group, a global producer of
plant-based spreads, butter, cheese, and creams. The recovery
rating on the proposed notes is '3', reflecting its expectation of
meaningful recovery prospects (50%-70%; rounded estimate: 50%). The
large amount of senior secured debt in the capital structure
constraining the recovery rating.

The senior notes will rank pari-passu with all existing senior
secured debt bank loans and rank above the senior unsecured notes.
Cash proceeds from the new notes will be used solely for
refinancing purposes, namely to partly repay the EUR677 million and
US$487 million unsecured senior notes.

This refinancing transaction follows a series of other similar
refinancing transactions in 2023 and 2024, which have improved
Upfield's debt maturity profile, with the largest maturities now
due in January 2028. After the transaction closes, S&P estimates
slightly more than EUR700 million of stub senior debt will remain
in the capital structure out of EUR5.7 billion gross debt
outstanding.

S&P said, "Our rating on Sigma Holdco B.V., the parent of Upfield,
is supported by our forecast that the group will generate a large
EUR180 million-EUR240 million base of free operating cash flow
annually in 2024 and 2025, thanks to good cash conversion, despite
the burden of high interest expenses. We also continue to see the
group deleveraging over 2024 and 2025 such that S&P Global
Ratings-adjusted debt to EBITDA improves gradually to around 7.0x
in 2024 (from 7.4x in 2023) and to 6.5x-7.0x in 2025.

"For 2024 and 2025, we assume revenue will very gradually improve
versus 2023, thanks to rising volumes from new categories (plant
butter, cheese, and creams) and emerging markets. This should
offset pressures on sales prices and weak consumption trends in
core categories, notably Europe, a large region for the group. We
see Upfield benefiting from higher profitability with adjusted
EBITDA margin rising near 25% in 2024-2025 versus 24% in 2023. This
is on the back of easing raw materials, energy, and restructuring
costs that should more than offset higher salesforce and marketing
expenses to support the business expansion."




===========
R U S S I A
===========

AVTOGRADBANK JSC: Bank of Russia Revokes Banking License
--------------------------------------------------------
The Bank of Russia, by its Order No. OD-947, dated June 17, 2024,
revoked the banking licence of Joint Stock Company Avtogradbank, or
JSC Avtogradbank (Registration No. 1455, Republic of Tatarstan,
Naberezhnye Chelny). The credit institution ranked 218th by assets
in the Russian banking system.

The Bank of Russia made this decision in accordance with Clauses 6
and 6.1 of Part 1 of Article 20 of the Federal Law "On Banks and
Banking Activities", based on the facts that JSC Avtogradbank:

   -- violated federal banking laws and Bank of Russia regulations,
due to which the regulator repeatedly applied supervisory measures
against it over the last 12 months, including restrictions on a
number of banking operations; and

   -- failed to comply with the laws on anti-money laundering and
countering the financing of terrorism (AML/CFT).

For an extended period of time, JSC Avtogradbank's operations were
marked by an inefficient business model, reduction and
deterioration of its assets, which, along with significant
incentive payments to the top management of the bank, resulted in
regular losses and a shrinkage of equity. Moreover, compliance with
capital adequacy requirements was often ensured technically through
various schemes.

The bank serviced the clients involved in large suspicious
transactions aimed at funnelling money into the shadow economy.
Furthermore, the credit institution committed numerous AML/CFT
violations detected by the Bank of Russia both in the course of its
remote supervision and as a result of its inspection.

The Bank of Russia will submit information about the bank's
transactions suggesting a criminal offence to the law enforcement
agencies.

By its Order No. OD-948, dated June 17, 2024, the Bank of Russia
appointed the State Corporation Deposit Insurance Agency (DIA) as a
provisional administration to manage JSC Avtogradbank. The
provisional administration will exercise its functions until a
receiver or a liquidator is appointed. In accordance with federal
laws, the powers of the credit institution's executive bodies were
suspended.

Information for depositors: JSC Avtogradbank is a participant in
the deposit insurance system; therefore, its depositors5 will be
compensated for their deposits in the amount of 100% of the balance
of funds, but no more than a total of ₽1.4 million per depositor
(including interest accrued), taking into account the conditions
stipulated by Chapter 2.1 of the Federal Law ‘On the Insurance of
Deposits with Russian Banks'.

Deposits are to be repaid by the DIA. Depositors may obtain
detailed information regarding the repayment procedure 24/7 at the
DIA's hotline (8 800 200-08-05) and on its website
(https://www.asv.org.ru/) in the Deposit Insurance/Insured Events
section.




===========
T U R K E Y
===========

AKBANK TAS: Fitch Hikes Local Currency IDR to 'B+'
--------------------------------------------------
Fitch Ratings have upgraded Akbank T.A.S.'s Viability Rating (VR)
to 'b+' from 'b' and Long-Term Local-Currency (LTLC) Issuer Default
Rating (IDR) to 'B+' from 'B'. Both have been removed from Rating
Watch Positive (RWP). Fitch has also affirmed its Long-Term
Foreign-Currency (LTFC) IDR at 'B'. The Outlooks on the IDRs are
Positive.

The VR upgrade to the level of Turkiye's 'B+' sovereign rating and
its removal from RWP reflect the impact of policy normalisation and
improvements in the Turkish operating environment - including a
reduction in macro-economic and financial stability risks and
external financing pressures on Akbank's standalone credit
profile.

Fitch has also upgraded Akbank's National Rating to 'AA-(tur)' from
'A+(tur)'. This reflects a strengthening in its LC creditworthiness
relative to other Turkish issuers', following the upgrade of the
bank's LTLC IDR. The Stable Outlook reflects its view of Akbank's
stable LC creditworthiness relative to other Turkish issuers'.

KEY RATING DRIVERS

VR-Driven, Government Intervention Risk: Akbank LTFC IDR is driven
by its VR but capped at 'B', one notch below Turkiye's rating. This
reflects Fitch's view that the likelihood of government
intervention that would impede the bank from servicing its FC
obligations remains higher than that of a sovereign default. The
bank's 'B+' LTLC IDR reflects lower government intervention risk in
LC. The Positive Outlooks on the IDRs mirror those on the
sovereign, but also the improvement in the operating environment.

Risks are easing in terms of a significant improvement in the
Central Bank of Turkiye's (CBT) FX reserves and access to external
financing, due to the continuation of the June 2023 policy shift
and reduced uncertainty after the March 2024 local elections.
Nevertheless, the sustainability of these improvements remains
contingent on continued confidence in the effectiveness and
durability of the policy rebalancing process.

VR Above LTFC IDR: Akbank's 'b+' VR, one notch above the 'b'
operating environment score for Turkish banks, is underpinned by
its significant FC liquidity and capital buffer, resilient
financial metrics and solid domestic franchise. The one-notch
difference between the VR and the LTFC IDR reflects that transfer,
convertibility and intervention risks are captured in the bank's
LTFC IDR but not its VR, under Fitch's Bank Rating Criteria.

Significant FC Liquidity Buffer: Akbank is largely deposit-funded
(end-1Q24: 78% of non-equity funding) which includes a fairly high
share of low-cost demand deposits (32%) reflecting the bank's
established deposit franchise. Deposit dollarisation (38% of
customer deposits) remains high while a further 15% of FX-protected
deposits also create risks. However, FC liquidity risks are
mitigated by ample FC liquidity. Akbank is also exposed to
refinancing risk from its high FC wholesale funding (end-1Q24: 19%
of non-equity funding), but this is mitigated by its solid access
to international markets and a reasonably diversified maturity
profile.

Available FC liquidity (USD9.3 billion) fully covered maturing FC
debt (excluding repo) over the next 12 months (USD3.9 billion
including bank deposits) at end-1Q24 and a moderate proportion of
FX deposits. Reliance on FX swaps with the CBT has reduced and is
partially offset by FX swaps with foreign counterparties. FC
liquidity could come under pressure from a prolonged loss of market
access or sector-wide deposit instability.

Capitalisation Stronger Than Peers': Akbank's common equity Tier 1
(CET1) ratio fell to 15.0% at end-1Q24 (net of forbearance: 13.4%;
end-2023: 17.8%), largely reflecting credit growth and tightened
forbearance on FC risk-weighted assets (RWAs), but remained higher
than peers'. Fitch expects Akbank's CET1 ratio to remain around 15%
in 2024.

The total capital ratio was stronger at 17.3% (net of forbearance),
supported by FC Tier 2 and additional Tier 1 (AT1) debt, providing
a partial hedge against lira depreciation. Akbank issued USD600
million AT1 notes in March, which added 126bp to total capital
adequacy ratio (CAR) at end-1Q24. Capitalisation is supported by
high pre-impairment operating profit (end-1Q24: 7% of gross loans,
annualised), full total reserve coverage of non-performing loans
(NPLs) and limited free provisions (8bp of RWA), but is sensitive
to the macro outlook, lira depreciation and asset-quality
weakening.

Improving but Challenging Operating Environment: The bank's
operations are concentrated in the improving but volatile Turkish
operating environment. The normalisation of the monetary policy has
reduced near-term macro-financial stability risks and external
financing pressures. Banks remain exposed to high inflation,
further lira depreciation, slowing economic growth, and multiple
macro-prudential regulations, despite recent simplification
efforts.

Solid Domestic Franchise: Akbank is a domestic systemically
important bank (end-1Q24: 8% of sector total assets) servicing
large local and multinational companies, mid-sized companies and
SMEs, and is also an important bank in the retail segment. Its
established franchise, underpinned by its strong brand recognition
and customer base, supports its business-generation prospects and
earnings.

Asset Quality to Weaken: Akbank's impaired (Stage 3) loans ratio
improved slightly to 2.1% at end-1Q24 (end-2023: 2.2%), reflecting
loan growth and good collections despite an increase in new NPL
inflows. Stage 2 loans/gross loans was lower than the sector
average (1Q24: 6% of loans; 17% average reserves coverage). Fitch
forecasts Akbank's impaired loans ratio to increase slightly to
2.5% in 2024, driven mainly by unsecured retail lending in an
environment of higher interest rates and weaker GDP growth.

Rising Rates Pressure NIM: Akbank's operating profit decreased to
4.6% of RWAs in 1Q24 from 7.6% in 2023, largely reflecting tighter
net interest margins resulting from rising rates. Fitch expects
Akbank's operating profit to be around 5% of RWAs in 2024 as
funding costs weigh on net interest margin, loan growth slows and
the cost of risk rises while fee income continues to be
supportive.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

Akbank's Long-Term IDRs are sensitive to a sovereign downgrade and
an increase of government intervention risk in the banking sector.
As the bank's ratings are driven by its VR, they are also sensitive
to a weakening in its VR.

Akbank's VR is primarily sensitive to a sovereign downgrade. Fitch
would also downgrade Akbank's VR on a material erosion in the
bank's capital and FC liquidity.

The bank's Short-Term IDRs are sensitive to changes in their
respective Long-Term IDRs.

The National Rating is sensitive to negative changes in Akbank's
LTLC IDR and its creditworthiness relative to other Turkish
issuers'.

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

An upgrade in Turkiye's Long-Term IDRs could lead to similar
actions on Akbank's VR and Long-Term IDRs. A reduction, in its
view, of government intervention risk in the banking sector could
also lead to an upgrade of the bank's LTFC IDR.

The Short-Term IDRs are sensitive to multi-notch upgrades of the
Long-Term IDRs.

The National Rating is sensitive to positive changes in Akbank's
LTLC IDR and its creditworthiness relative to other Turkish
issuers'.

OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS

Akbank's senior debt ratings are aligned with its IDRs, in line
with Fitch's Bank Rating Criteria, reflecting average recovery
prospects in a default.

Akbank's Tier 2 debt is notched down twice from its 'b+' VR anchor
rating for loss severity, in line with Fitch's Bank Rating Criteria
baseline approach, reflecting its expectation of poor recoveries in
a default.

The AT1 notes are rated three notches below Akbank's VR, comprising
two notches for loss severity given the notes' deep subordination,
and one notch for incremental non-performance risk given their full
discretionary, non-cumulative coupons. In accordance with the Bank
Rating Criteria, Fitch has applied three notches from Akbank's VR,
instead of the baseline four notches, as Akbank's VR is below the
'BB-' threshold.

Akbank's Government Support Rating (GSR) of 'no support' (ns),
notwithstanding its systemic importance, reflects its view that
support from the Turkish authorities in FC cannot be relied on
given the sovereign's weak financial flexibility.

OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES

Akbank's senior unsecured debt ratings are primarily sensitive to
changes in its IDRs.

Akbank's subordinated debt rating is primarily sensitive to a
change in its VR anchor rating. It is also sensitive to a revision
in Fitch's assessment of loss severity in case of non-performance.

Akbank's junior subordinated debt rating is primarily sensitive to
a change in its VR anchor rating. The notes' rating is also
sensitive to an unfavourable revision in Fitch's assessment of
incremental non-performance risk.

The GSR could be upgraded if Fitch views the government's ability
to support the bank in FC has strengthened.

VR ADJUSTMENTS

The operating-environment score of 'b' for Turkish banks is below
the 'bb' category implied score due to the following adjustment
reasons: the sovereign rating (negative) and macro-economic
volatility (negative), which reflects heightened market volatility,
high dollarisation and high risk of FX movements in Turkiye.

The business profile score of 'b+' for Akbank is below the implied
'bb' category implied score, due to the following adjustment
reason: business model (negative). This reflects the bank's
business model concentration on the high-risk Turkish market.

The earnings and profitability score of 'b+' is below the implied
'bb' category implied score, due to the following adjustment
reason: historical and future metrics (negative).

ESG CONSIDERATIONS

Akbank has an ESG Relevance Score for Management Strategy of '4',
reflecting a high regulatory burden on most Turkish banks.
Management ability across the sector to determine their own
strategy is constrained by regulatory interventions and also by the
operational challenges of implementing regulations at the bank
level. This has a moderately negative impact on banks' credit
profiles and is relevant to banks' ratings in combination 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
   -----------                   ------        --------   -----
AKBANK T.A.S.   LT IDR             B  Affirmed            B
                ST IDR             B  Affirmed            B
                LC LT IDR          B+ Upgrade             B
                LC ST IDR          B  Affirmed            B
                Natl LT       AA-(tur)Upgrade             A+(tur)

                Viability          b+ Upgrade             b
                Government Support ns Affirmed            ns

   senior
   unsecured    LT                 B  Affirmed   RR4      B

   subordinated LT                 B- Upgrade    RR6      CCC+

   subordinated LT               CCC+ Upgrade             CCC

   senior
   unsecured    ST                 B  Affirmed            B


TURKIYE GARANTI: Fitch Affirms 'B' LongTerm IDR, Outlook Positive
-----------------------------------------------------------------
Fitch Ratings has affirmed Turkiye Garanti Bankasi A.S.'s (Garanti
BBVA) Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR)
at 'B' and Long-Term Local Currency (LTLC) IDR at 'B+'. The
Outlooks on the IDRs are Positive. At the same time, Fitch has
upgraded Garanti BBVA's Viability Rating (VR) to 'b+' from 'b' and
removed it from Rating Watch Positive (RWP).

The VR upgrade to the level of Turkiye's 'B+' sovereign rating and
its removal from RWP reflect the impact of policy normalisation and
improvements in the Turkish operating environment - including a
reduction in macro-economic and financial stability risks and
external financing pressures on Garanti BBVA's standalone credit
profile.

KEY RATING DRIVERS

Intervention Risk Caps Support: Garanti BBVA's LTFC and LTLC IDRs
are driven by its Shareholder Support Rating (SSR) and underpinned
by its VR. The LTFC IDR is capped at one notch below Turkiye's, due
to government intervention risk, despite a high support propensity
from Banco Bilbao Vizcaya Argentaria, S.A. (BBVA; BBB+/Stable). The
bank's 'B+' LTLC IDR reflects a lower risk of government
intervention in LC. The Positive Outlooks on the IDRs mirror those
on the sovereign, but also the improvement in the operating
environment.

Risks are easing, for example in terms of a significant improvement
in the Central Bank of the Republic of Turkiye's foreign-exchange
(FX) reserve position and access to external financing, due to the
continuation of the June 2023 policy shift and reduced uncertainty
after the March 2024 local elections. Nevertheless, the
sustainability of these improvements remains contingent on
continued confidence in the effectiveness and durability of the
policy rebalancing process.

VR Above LTFC IDR: Garanti BBVA's 'b+' VR, one notch above the 'b'
operating environment score for Turkish banks, is underpinned by
its significant FC liquidity and capital buffer, resilient
financial metrics and solid domestic franchise. The one-notch
difference between the VR and the LTFC IDR reflects that transfer,
convertibility and intervention risks are captured in the bank's
LTFC IDR but not its VR, under Fitch's Bank Rating Criteria.

Shareholder Support: The SSR considers potential support from BBVA,
its 86% owner, primarily reflecting Garanti BBVA's strategic
importance to, and integration with, BBVA. Government intervention
risk caps the SSR at one notch below the sovereign rating,
reflecting Fitch's view that the likelihood of government
intervention in the banking system that might impede Garanti BBVA's
ability to service its FC obligations is higher than that of a
sovereign default.

Significant FC Liquidity Buffer: Garanti BBVA is largely customer
deposit-funded (end-1Q24: 87% of non-equity funding), which
includes a high share of demand deposits (end-1Q24: 43%),
reflecting an established deposit franchise. Significant deposit
dollarisation (43% of customer deposits) and FX- protected deposits
(20%) create risks to FC liquidity, but is mitigated by healthy FC
liquidity. The bank is exposed to refinancing risks from its
moderate share of FC wholesale funding (12% of non-equity funding),
but it has a solid record of access to international markets.

Available FC liquidity at end-1Q24 covered short-term FC external
debt and a moderate proportion of FX deposits. FC liquidity could
also come under pressure from a prolonged loss of market access or
sector-wide deposit instability.

Capitalisation Better than Sector's: Garanti BBVA's common equity
Tier 1 (CET1) ratio of 13.7% at end-1Q24 (12.7% net of forbearance)
was higher than the sector's 13.2%. The decrease in the ratio from
16.8% at end-2023 (14.5% net of forbearance) reflected dividend
payment, an increase in operational risk-weighted assets (RWAs) and
tightened forbearance. Fitch expects the ratio to be around 15% at
end-2024. Capitalisation is supported by solid pre-impairment
operating profit (1Q24: 10% of average loans, annualised) and full
total reserves coverage of impaired loans, but is sensitive to the
macro outlook, lira depreciation and asset-quality weakening.

Profitability to Moderate: Garanti BBVA's operating profit
decreased to a still high 6.1% of RWAs in 1Q24 (2023: 7.5%),
reflecting tighter net interest margins (NIM), despite strong
non-interest income. Fitch expects profitability to moderate due to
high lira funding cost pressure on NIM, slower loan growth and
higher cost of risk, with operating profit falling to around 5% of
RWAs in 2024.

Asset Quality to Weaken: Garanti BBVA's impaired loans (Stage 3)
ratio improved to 1.9% at end-1Q24 (end-2023: 2.1%), reflecting
slower loan growth (3M24: 13.6%; 2023: 59.5%), collections,
non-performing loan (NPL) sales and write-offs, despite an increase
in new NPL inflows. Its Stage 2 loans ratio was 9.6% at end-1Q23
(21% average reserves coverage). Fitch expects Garanti BBVA's
impaired loans ratio to increase moderately but to remain below 3%
at end-2024, driven mainly by unsecured retail lending.

Solid Domestic Franchise: Garanti BBVA is a domestic systemically
important bank and the fifth-largest bank in terms of total assets
at about 8% of sector assets (unconsolidated basis) at end-2023.
The bank has an entrenched domestic banking franchise across all
customer segments, which underpins its solid business generation
prospects and consistent earnings performance.

Improving but Challenging Operating Environment: The bank's
operations are concentrated in the improving but volatile Turkish
operating environment. The normalisation of the monetary policy has
reduced near-term macro-financial stability risks and external
financing pressures. Banks remain exposed to high inflation,
potential further lira depreciation, slowing economic growth, and
multiple macro-prudential regulations, despite recent
simplification efforts.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

A downgrade of Turkiye's sovereign ratings or an increase, in its
view, of government intervention risk would lead to a downgrade of
the bank's SSR and Long-Term IDRs, although this is not its base
case. The SSR is also sensitive to Fitch's view of the
shareholders' ability and propensity to provide support.

Garanti BBVA's VR is primarily sensitive to a sovereign downgrade.
Fitch would also downgrade the bank's VR on a material erosion in
its capital and FC liquidity buffers.

The bank's Short-Term IDRs are sensitive to downgrades in their
respective Long-Term IDRs.

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

An upgrade of Turkiye's Long-Term IDRs would likely lead to an
upgrade of Garanti BBVA's SSR and Long-Term IDRs, and this could
also lead to a similar action on its VR. A reduction, in its view,
of government intervention risk in the banking sector could also
lead to an upgrade of the SSR and LTFC IDR to the level of
Turkiye's LTFC IDR.

The Short-Term IDRs are sensitive to multi-notch upgrades of the
Long-Term IDRs.

OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS

Garanti BBVA's senior unsecured debt rating is aligned with its
LTFC IDR. The Recovery Rating of the notes is 'RR4', reflecting
average recovery prospects in a default.

Garanti BBVA's subordinated notes are rated one notch below its
LTFC IDR of 'B'. The notching for the subordinated notes' rating
includes one notch for loss severity and zero notches for
non-performance risk relative to the LTFC IDR anchor rating. The
one notch for loss severity reflects Fitch's view of below-average
recovery prospects for the notes in a non- viability event. The one
notch, rather than the baseline two notches, reflects its view that
shareholder support (as reflected in the bank's LTFC IDR) could
help to mitigate losses, and incorporates the 'B' cap on the bank's
LTFC IDR due to its view of government intervention risk.

The LTFC IDR is the anchor rating for the notes as Fitch believes
that potential extraordinary shareholder support is likely to flow
through to the bank's subordinated noteholders. The Recovery Rating
of the notes is 'RR5', reflecting below-average recovery prospects
in a default.

OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES

The bank's senior unsecured debt ratings are sensitive to changes
in the bank's IDRs.

Garanti BBVA's subordinated debt rating is primarily sensitive to a
change in the LTFC IDR anchor rating. It is also sensitive to a
revision in Fitch's assessment of loss severity and non-performance
risk.

The National Rating is sensitive to changes in Garanti BBVA's LTLC
IDR and its creditworthiness relative to other Turkish issuers'.

VR ADJUSTMENTS

The operating-environment score of 'b' for Turkish banks is below
the 'bb' category implied score due to the following adjustment
reasons: the sovereign rating (negative) and macro-economic
volatility (negative), which reflects heightened market volatility,
high dollarisation and high risk of FX movements in Turkiye.

The business profile score of 'b' for Garanti BBVA is below the
implied 'bb' category implied score, due to the following
adjustment reason: business model (negative). This reflects the
bank's business model concentration on the high-risk Turkish
market.

The earnings & profitability score of 'b+' is below the implied
'bb' category implied score, due to the following adjustment
reason: historical and future metrics (negative).

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Garanti BBVA's ratings are linked to BBVA's.

ESG CONSIDERATIONS

Garanti BBVA has an ESG Relevance Score for Management Strategy of
'4', reflecting a high regulatory burden on most Turkish banks.
Management's ability across the sector to determine their own
strategy is constrained by regulatory interventions and also by the
operational challenges of implementing regulations at the bank
level. This has a moderately negative impact on banks' credit
profiles and is relevant to banks' ratings in combination 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
   -----------                    ------      --------   -----
Turkiye Garanti
Bankasi A.S.    LT IDR              B  Affirmed          B
                ST IDR              B  Affirmed          B
                LC LT IDR           B+ Affirmed          B+
                LC ST IDR           B  Affirmed          B
                Natl LT         AA(tur)Affirmed          AA(tur)
                Viability           b+ Upgrade           b
                Shareholder Support b  Affirmed          b

   senior
   unsecured    LT                  B  Affirmed   RR4    B

   subordinated LT                  B- Affirmed   RR5    B-

   senior
   unsecured    ST                  B  Affirmed          B

TURKIYE IS BAKANSI: Fitch Hikes Local Currency IDR to B+
--------------------------------------------------------
Fitch Ratings has upgraded Turkiye Is Bankasi A.S.'s (Isbank)
Long-Term Local-Currency (LTLC) Issuer Default Rating (IDR) to 'B+'
from 'B' and its Viability Rating (VR) to 'b+' from 'b'. Both have
been removed from Rating Watch Positive (RWP). Fitch has also
affirmed the bank's LT Foreign-Currency (FC) IDR at 'B'. The
Outlooks on the IDRs are Positive.

The VR and LTLC upgrade to the level of Turkiye's 'B+' sovereign
rating, and their removal from RWP, reflects the impact of policy
normalisation and improvements in the Turkish operating environment
- including a reduction in macro-economic and financial stability
risks and external financing pressures on Isbank's standalone
credit profile.

Fitch has also upgraded Isbank's National Rating to 'AA-(tur)' from
'A+(tur)'. This reflects a strengthening in its LC creditworthiness
relative to other Turkish issuers', following the upgrade of the
bank's LTLC IDR. The Stable Outlook reflects its view of Isbank's
stable LC creditworthiness at its current level relative to other
Turkish issuers'.

KEY RATING DRIVERS

VR-Driven, Government Intervention Risks: Isbank's LTFC IDR is
driven by its VR but is capped at 'B', one notch below Turkiye's
rating. This reflects Fitch's view that the likelihood of
government intervention that would impede the bank from servicing
its FC obligations remains higher than that of a sovereign default.
The bank's 'B+' LTLC IDR reflects lower government intervention
risk in LC. The Positive Outlooks on the IDRs mirror those on the
sovereign, but also the improvement in the operating environment.

Risks are easing, for example in terms of a significantly improved
Central Bank of Republic of Turkiye's (CBRT) foreign-exchange (FX)
reserve position and access to external financing, due to the
continuation of the June 2023 policy shift and reduced uncertainty
after the March 2024 local elections. Nevertheless the
sustainability of these improvement remains contingent on continued
confidence in the effectiveness and durability of the policy
rebalancing process.

VR Above LTFC IDR: Isbank's 'b+' VR, one notch above the 'b'
operating environment score for Turkish banks, is underpinned by
its significant FC liquidity and capital buffers, resilient
financial metrics and solid domestic franchise. The one-notch
difference between the VR and the LTFC IDR reflects that transfer,
convertibility and intervention risks are captured in the bank's
LTFC IDR but not its VR, under Fitch's Bank Rating Criteria.

Significant FC Liquidity Buffer: Isbank is largely deposit-funded
(end-1Q24: 71% of total non-equity funding), which includes a high
share of low-cost demand deposits (44%), reflecting a
well-established deposit franchise. Deposit dollarisation (55% of
customer deposits) remains high, while a further 15% of
FX-protected deposits also create risks. However, FC liquidity risk
is mitigated by ample FC liquidity. Isbank is also exposed to
refinancing risks given high FC wholesale funding (end-1Q24: 21% of
non-equity funding), but it has a solid record of access to
international markets and a reasonably diversified maturity
profile.

Available FC liquidity fully covered maturing FC debt over the next
12 months at end-1Q24 and a moderate proportion of FX deposits.
Reliance on FX swaps with the CBRT has reduced and is partially
offset by FX swaps with foreign counterparties. FC liquidity could
come under pressure from a prolonged loss of market access or
sector-wide deposit instability.

Adequate Capitalisation: Isbank's common equity Tier 1 (CET1) ratio
declined to 13.5% at end-1Q24 (net of forbearance: 11.7%) from
16.2% at end-2023, reflecting tightening forbearance, growth in
operational risk-weighted assets (RWAs) and dividend distribution.
Total capital was 17.3% (net of forbearance 15.3%), supported by FC
subordinated Tier 2 debt, providing a partial hedge against lira
depreciation.

Capitalisation is supported by high pre-impairment operating profit
(end-1Q24: 6% of gross loans, annualised), full total reserve
coverage of non-performing loans (NPLs) and free provisions (0.3%
of RWAs), but is sensitive to the macro outlook, lira depreciation
and asset-quality weakening.

Improving but Challenging Operating Environment: The bank's
operations are concentrated in the improving but volatile Turkish
operating environment. The normalisation of the monetary policy has
reduced both near-term macro-financial stability risks and external
financing pressures. Banks remain exposed to high inflation,
potential further lira depreciation, slowing economic growth, and
multiple macro-prudential regulations, despite recent
simplification efforts.

Asset Quality to Weaken: Isbank's Stage 3 loans ratio improved to
2.0% at end-1Q24 (end-2023: 2.3%), reflecting strong collections,
write-offs and high nominal loan growth (3M24: 13%). Total reserve
coverage of impaired loans rose to 158% (end-2023: 155%). Fitch
forecasts Isbank's impaired loans ratio to increase slightly to
around 3% in 2024, due mainly to unsecured retail lending in an
environment of higher interest rates and weaker GDP growth.

Rising Rates Pressure NIM: Isbank's operating profit fell to a
still-robust 3.8% of RWAs in 1Q24 (2023: 6.1%), largely reflecting
tighter net interest margins (NIM), which shrank 71bp due to higher
funding costs and negative trading gains as a result of rising swap
costs. Fitch expects the bank's operating profit to remain below 4%
of RWAs in 2024 as funding costs weigh on NIM, loan growth slows
and the cost of risk rises, while fee income will remain
supportive.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

Isbank's LT IDRs are sensitive to a sovereign downgrade and an
increase, in Fitch's view, of government intervention risk in the
banking sector. As the bank's ratings are driven by its VR, they
are also sensitive to a downgrade of the VR.

The bank's VR is primarily sensitive to a sovereign downgrade.
Fitch would also downgrade Isbank's VR on a material erosion in the
bank's capital and FC liquidity buffer.

The bank's Short-Term IDRs are sensitive to changes in their
respective Long-Term IDRs.

The National Rating is sensitive to negative changes in Isbank's
LTLC IDR and its creditworthiness relative to other Turkish
issuers'.

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

An upgrade in Turkiye's LT IDRs could lead to similar actions on
Isbank's VR and LT IDRs. A reduction in its view of government
intervention risk in the banking sector could also lead to an
upgrade of the bank's LTFC IDR to the level of the Turkish
sovereign rating.

The Short-Term IDRs are sensitive to multi-notch upgrades of the
Long-Term IDRs.

The National Rating is sensitive to positive changes in Isbank's
LTLC IDR and its creditworthiness relative to other Turkish
issuers'.

OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS

Isbank's senior debt ratings are aligned with its IDRs, in line
with Fitch's Bank Rating Criteria, reflecting average recovery
prospects in a default.

Isbank's Tier 2 debt is notched down twice from its 'b+' VR anchor
rating, in line with Fitch's Bank Rating Criteria baseline
approach, reflecting loss severity and poor recoveries in a
default.

Isbank's Government Support Rating (GSR) of 'no support' (ns),
notwithstanding its systemic importance, reflects its view that
support from the Turkish authorities in FC cannot be relied on
given the sovereign's weak financial flexibility.

OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES

Isbank's senior unsecured debt rating is sensitive to changes in
its IDR.

The subordinated notes' rating is primarily sensitive to a change
in its anchor rating. It is also sensitive to a revision in Fitch's
assessment of loss severity and non-performance.

The GSR could be upgraded if Fitch views the government's ability
to support the bank in FC has strengthened.

VR ADJUSTMENTS

The operating-environment score of 'b' for Turkish banks is below
the 'bb' category implied score due to the following adjustment
reasons: the sovereign rating (negative) and macro-economic
volatility (negative), which reflects heightened market volatility,
high dollarisation and high risk of FX movements in Turkiye.

The business profile score of 'b+' for Isbank is below the implied
'bb' category implied score, due to the following adjustment
reason: business model (negative). This reflects the bank's
business model concentration on the high-risk Turkish market.

ESG CONSIDERATIONS

Isbank has an ESG Relevance Score for Management Strategy of '4',
reflecting the high regulatory burden on most Turkish banks.
Management ability across the sector to determine their own
strategy is constrained by regulatory intervention and also by the
operational challenges of implementing regulations at the bank
level. This has a moderately negative impact on banks' credit
profiles and is relevant to banks' ratings in combination 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
   -----------                   ------       --------   -----
Turkiye Is
Bankasi A.S.    LT IDR             B  Affirmed           B
                ST IDR             B  Affirmed           B
                LC LT IDR          B+ Upgrade            B
                LC ST IDR          B  Affirmed           B
                Natl LT       AA-(tur)Upgrade            A+(tur)
                Viability          b+ Upgrade            b
                Government Support ns Affirmed           ns

   senior
   unsecured    LT                 B  Affirmed   RR4     B

   subordinated LT                 B- Upgrade    RR6     CCC+

   senior
   unsecured    ST                 B  Affirmed           B



=============
U K R A I N E
=============

[*] UKRAINE: Debt Restructuring Talks End Without Deal
------------------------------------------------------
Daryna Krasnolutska and Jorgelina do Rosario at Bloomberg News
report that Ukraine's first formal talks on restructuring more than
US$20 billion worth of international bonds ended without a deal as
creditors pushed back against Kyiv's proposal for debt relief.

According to Bloomberg, with repayments set to resume this summer,
Ukraine is asking debt holders to accept bigger losses that would
allow it to finance its defense efforts against Russia and prepare
financial resources for reconstruction when the war ends.  It's
also pushing bondholders to fit their offer within the debt-burden
threshold set by the International Monetary Fund, Bloomberg notes.

"As we approach the deadline, we must urge our bondholders to
continue productive and good-faith negotiations, with more
substantial debt relief to be reflected in their proposals in line
with the IMF parameters and Ukraine's current macro-financial
situation," Bloomberg quotes Finance Minister Serhiy Marchenko as
saying in a statement on June 17.

A clearer picture of the IMF's economic growth and debt estimates
will emerge after its executive board approves a preliminary
agreement reached in late May with Kyiv. A board vote is informally
scheduled for June 28, Bloomberg relays, citing people familiar
with the situation who asked not to be identified as the date
hasn't been finalized.

The talks between Ukraine and a group of bondholders began two
weeks ago with private creditors signing non-disclosure agreements
to allow for the sharing of sensitive non-public information,
Bloomberg recounts.  Bondholders haven't received any payments from
Ukraine since 2022, when they agreed to a two-year moratorium after
Russia invaded, Bloomberg states.  The standstill expires on Aug.
1, Bloomberg notes.

According to Bloomberg, in a separate statement, the ad-hoc
creditors' group said they're committed to finding a deal, although
they considered the haircut proposed by the government to be
"significantly in excess of market expectation, which is consistent
with a 20% haircut."

Kyiv, as cited by Bloomberg, said that it will continue discussions
"with a view to making further progress and reaching an agreement
in principle at the earliest opportunity."

In the talks, Ukraine proposed exchanging its outstanding bonds for
a series of new bonds with maturities up to 2040 and interest
payments starting at 1% for the first 18 months, then progressively
increasing to 6%, Bloomberg discloses.

The government also offered investors a so-called state contingency
instrument that could begin payments only after 2027, Bloomberg
relates.  Payments on that instrument would be related to Ukraine's
tax revenue targets set by the International Monetary Fund,
according to Bloomberg.

"Both options have been designed to deliver holders cash flows
during the IMF program period and provide for a nominal haircut
ranging between 25 and 60% depending on the country's recovery over
the IMF program period," the statement added.

Both the IMF and the country's bilateral creditors, which include
the US and the Paris Club, signed off on Ukraine's proposals,
according to the government's statement, Bloomberg notes.
Ukraine's group of official creditors has already extended a debt
repayment standstill to 2027, Bloomberg recounts.

Ukraine, Bloomberg says, also proposed removing a so-called cross
default clause between its international bonds and its GDP warrants
maturing in 2041, whose payments are linked to economic growth.  A
cross-default clause means default on one instrument carries over
to others.  According to Bloomberg, the government said that GDP
warrants "need to be taken into account in the design of any
restructuring solution."

The latest proposal offered by Ukraine didn't include a
restructuring of debt from state-owned companies, unlike in 2022,
when payments on those bonds were also frozen, Bloomberg
discloses.

The creditor group offered a 7.75% cash coupon for 40% of the
country's outstanding bonds, with two issuances maturing in 2030
and 2036, while proposed a step up coupon starting at 0.5% via
three issuances for another 40% of the debt, Bloomberg states.
Bondholders offered a recovery instrument for the remaining,
according to Bloomberg.

Ukraine said earlier this year that it aimed to complete its debt
restructuring with private creditors no later than mid-2024,
Bloomberg relates.  The government said that its proposals were
compatible with the parameters of its US$15.6 billion IMF program,
including debt-to-growth ratios and gross financing needs,
Bloomberg notes.




===========================
U N I T E D   K I N G D O M
===========================

BELLIS FINCO: S&P Assign 'B+' LongTerm ICR, Outlook Stable
----------------------------------------------------------
S&P Global Ratings assigned its 'B+' long-term issuer credit rating
to Bellis Finco PLC and its 'B+' issue and '3' recovery ratings to
the company's senior secured term loan B (TLB) and senior secured
notes (SSNs); the '3' recovery rating reflects its estimate of 65%
recovery in the event of a payment default. S&P also assigned a
'B-' issue rating with a recovery rating of '6' to the group's
senior unsecured notes, which were not party to the refinancing.

S&P said, "The stable outlook reflects our expectation that the
group will successfully integrate the EG UKI business and will
continue to advance its strategic plans and deliver growth in its
core segments, resulting in revenues above GBP28 billion in 2024
and EBITDA margins close to 5%; we also expect sizable free
operating cash flow (FOCF) after leases and S&P Global
Ratings-adjusted leverage to 7.5x in 2024 (6.3x excluding
payment-in-kind [PIK] instruments) and commitment to a financial
policy and governance standards commensurate with its targeted
deleveraging path."

Bellis Finco PLC, parent company of U.K.-based food retailer, ASDA
Group, has refinanced its capital structure by issuing a GBP1,100
million-euro-equivalent (EUR1,285 million) senior secured term loan
B (TLB) maturing in 2031, and GBP1,750 million of senior secured
notes (SSNs) maturing in 2030, through its subsidiary Bellis
Acquisition PLC; the group has also extended its existing Term Loan
A and revolving credit facility (RCF) to 2028.

ASDA benefits from a strong presence in the highly competitive U.K.
food retail market with about 13% market share and revenues above
GBP25 billion in 2023. ASDA is the third-largest supermarket in the
U.K. with 13% market share according to Kantar, behind Tesco (28%
market share) and Sainsbury's (15% market share). The group
benefits from a broad footprint across the U.K. with a historical
stronghold in the North of England and Wales while it attracts a
wide range of customers, focused mainly on value. S&P notes that
the recent acquisitions of the petrol filling stations (PFS) and
convenience stores from Co-operative Group in 2022 and from EG
Group (EG UKI) in 2023 strengthen the group's presence in the South
of England and its format diversity by adding convenience stores
and food-to-go locations to its historical portfolio of
large-format stores.

S&P said, "We forecast that ASDA will expand its earnings base and
profitability as it builds on the product and offering
diversification and expands its strategic initiatives.The recent
acquisitions of PFS and foodservice operations will allow the group
to continue to expand into the convenience sector, the highest
growing sub-sector within the food retailing industry. We expect
that sales of fuel and non-food (comprising clothing and general
merchandise, mostly sold under own label, George), will account in
2024 for about 20% and 11% of sales, respectively. This would
support ASDA if it were to face headwinds in food retailing, thanks
to increasing diversification, higher margin non-food products, and
cross-selling activities. In line with the industry, the group
benefited from an increase in online sales in 2020-2021 and has
maintained online sales above GBP3 billion since, becoming the
second-largest supermarket in this space (after Tesco) and
benefiting from an omnichannel strategy. We also acknowledge the
strong penetration of its Rewards program (50% of its sales),
though still below some of its competitors (Tesco has an 83%
penetration of its ClubCard), and the fact that 54% of total sales
are of its own brand, evidencing a strong brand and attractiveness
to U.K. shoppers."

However, the business risk profile is constrained by concentration
in the U.K. and exposure to supply chain disruption risk. The
group's operations are concentrated in a single country, exposing
it to macroeconomic and regulatory headwinds from limited
geographic diversification. The U.K. food retail market is highly
competitive, with Tesco remaining the market leader, German
discounters, Aldi and Lidl, having a cumulative share of 18%, and
the online segment represented by Ocado Retail and online offering
of all major grocers. Though the group lost significant market
share over the past decade (with 17% market share in 2014 down to
13.1% as of May 12, 2024, according to Kantar), the group has
managed to stabilize market share at around 13%-14% since the
acquisition from Walmart in 2021. The group's margins have been
constrained over recent years by the investment in IT and systems
(Project Future) as well as investment in prices and the effect of
inflation on the cost base (particularly related to wages). These
factors brought S&P Global Ratings-adjusted EBITDA margin to around
4% in 2022 and 2023. S&P said, "We expect margins to recover toward
5% in line with our 5%-10% average range for the industry, with
total adjusted EBITDA up to GBP1.6 billion, thanks to a higher
margin contribution from EG UKI from 2024 and the wind down of
Project Future. We note that the new systems integration could
bring some execution risk, especially regarding stock management.
Higher presence in the fuel business exposes the group to
additional risks. We expect that the fuel sector will continue to
see slow but steady volume decline as a result of new regulation on
fossil fuels and electric vehicles, as well as volatility in oil
prices." This comes in addition to exposure to a risk of supply
chain disruptions on both its food and non-food business and
related stress on working capital. The group partially offsets this
risk by vertical integration through its International Procurement
and Logistics (IPL) division, from which it sources 11% of the cost
of goods sold, excluding fuel.

The recent refinancing reduces near-term refinancing risk, but
significantly higher interest will mute the effect on cash flow
generation from EBITDA expansion. The group has refinanced and
extended the maturity of its senior secured debt instruments and
now has no significant debt repayments due in 2025 or 2026.
Following the transaction, the group's average debt maturity is
more than five years away. The closest maturity is the GBP31
million stub of term loan A, the GBP302 million stub of the 2026
senior secured notes, and GBP500 million senior unsecured notes
maturing in February 2027. S&P said, "We view the proactive
management of refinancing risk as an indication of appropriate risk
management. However, we note that, in the current high interest
rate environment, the group has refinanced its capital structure at
a much higher cost, with average all-in margins closer to 8%-9%
versus the existing cost of close to 4%; we expect this to affect
overall FOCF generation."

Higher profits and positive working capital dynamics will translate
into healthy FOCF after leases, despite higher capital expenditure
(capex) and interest expenses. In 2023, ASDA generated GBP390
million of FOCF after leases. S&P said, "We anticipate FOCF after
leases will remain around GBP200 million in 2024 and 2025 as it
benefits from the increasing EBITDA margin as well as positive
working capital dynamics resulting from economies of scale in
procurement and more efficient working capital management as the
systems upgrade rolls out, as visible in its first-quarter results.
However, this positive trend will be partially offset by higher
cash interest expense (at around GBP500 million including lease
interest expense in 2024 and GBP530 million in 2025, from GBP370
million in 2023) and capex up to GBP500 million in 2024 and GBP600
million in 2025. We expect the group to continue to benefit from a
sufficient liquidity cushion to absorb its working capital swings
during the year (around GBP400 million) and any potential
headwinds."

The group has a highly leveraged capital structure, with increasing
debt after the EG UKI acquisition.The group ended 2023 with S&P
Global Ratings-adjusted leverage close to 10.2x, inflated by the
recent acquisition of EG UKI and the GBP1.7 billion of additional
debt, albeit reflecting only two months contribution of EG UKI (pro
forma leverage for 2023 including full-year EBITDA contribution of
EG UKI would be close to 9.0x). S&P said, "We expect leverage to
fall toward 7.5x in 2024 (6.3x excluding PIK instruments) as the
group benefits from a full year of contribution from the
acquisitions. By 2025, we forecast a further leverage decline, to
close to 6.5x (5.4x excluding PIK instruments) as EBITDA continues
to rise. Our adjusted debt metrics for 2024 include financial debt
of close to GBP4.8 billion (including the GBP400 million ground
rent liabilities, leases of GBP3.9 billion (including the GBP646
million resulting from sale and lease back in 2023), and
approximately GBP1.6 billion of the PIK instruments including the
senior equity provided by Walmart, which we understand will become
repayable in 2028. Given that we deem the company to be owned by a
financial sponsor, we do not deduct cash in our adjusted debt
metrics and therefore total debt of GBP10.35 billion corresponds to
gross debt."

While the large real estate portfolio and high share of freehold
ownership provide financial flexibility to the group, the features
in debt documentation and aggressive financial policy track record
may constrain sustainable improvement in the credit profile.The
group has around GBP8.5 billion of real estate assets (including
GBP756 million linked to the Ground Rent transaction), based in the
U.K., on freehold (more than 75%) and long leasehold including the
acquired assets from EG Group. S&P said, "We understand that the
proposed debt documentation provides for a security package that
comprises floating charges over a large proportion of the real
estate assets held at the borrowing entity and guarantors,
providing a relatively strong security package. Also, subject to
the documentation baskets allowing potential transactions, large
freehold real estate should provide the group with the financial
flexibility to monetize some of its portfolio via sales and
leasebacks of noncore assets, as it had done in order to raise
funds for the EG acquisition through the sale and lease-back and
ground rent transactions. While such flexibility could be used to
accelerate investments in business, bolster liquidity, or pay down
debt, we note a risk of using such proceeds for shareholder
remuneration."

S&P said, "We do not expect any major changes in management and
governance following TDR Capital's acquisition of a majority stake
in the group.On June 10, 2024, the group announced that TDR Capital
has reached an agreement to acquire the 22.5% stake held by Zuber
Issa. This will change the ownership structure, with TDR Capital
owning 67.5% of the group, while the rest is split between Mohsin
Issa (22.5%), who will remain the CEO until the group finds a
replacement, and Walmart (10%). The transaction is expected to
close in the coming months and, subsequently, Zuber Issa will exit
the board of directors. We do not foresee any additional changes to
the current management or the board of directors and we expect
continuity regarding the group's financial policy and governance
framework.

"Our stable outlook reflects our expectation that over the next 12
months ASDA will focus on its strategic initiatives, generate
revenue growth, and return its adjusted EBITDA margins to about 5%.
The rating is also predicated on expectations of strong FOCF after
lease payments of approximately GBP200 million and deleveraging,
with S&P Global Ratings-adjusted leverage of 7.5x (6.3x excluding
PIK instruments) in 2024 and 6.5x (5.4x excluding PIK instruments)
in 2025, from 10.2x in 2023. We expect the group to adhere to its
commitment of prioritizing deleveraging, leading to S&P Global
Ratings-adjusted leverage (excluding PIK instruments) of less than
6.0x while maintaining robust governance and largely unchanged
ownership of its core real estate portfolio."

Downside scenario

S&P could lower its ratings on ASDA if the group was unable to
effectively meet continued competitive pressures or potential
setbacks in the execution of its strategic initiatives, resulting
in underperformance compared with its base case.

Specifically, S&P could take a negative rating action in the next
12 months if the group failed to achieve and sustain improvement in
its credit measures, for example, if:

-- S&P Global Ratings-adjusted EBITDA margins remained below 5%;

-- S&P Global Ratings-adjusted leverage was above 7.5x (6.0x
excluding PIK instruments);

-- FOCF after lease payments was substantially lower than our base
case; or

-- The group pursued a more aggressive financial policy than
expected, and undertook material sale and leaseback transactions,
or raised additional debt for shareholder returns or debt-funded
acquisitions.

Upside scenario

S&P said, "We consider an upgrade as remote at this stage, due to
the financial sponsor ownership of the group, the track record of a
highly leveraged capital structure, and the improvement in credit
metrics already incorporated into our base case. However, we could
consider a positive rating action if the group materially
outperformed our base case, reducing S&P Global Ratings-adjusted
leverage below 5.0x, while maintaining strong FOCF, and publicly
committing to a more conservative financial policy. Any upgrade
would depend on consistently robust governance practices and
maintaining largely freehold ownership of the core real estate
portfolio.

"Governance factors are a moderately negative consideration for our
analysis. The group has a complex ownership structure with a number
of entities above the restricted group domiciled in Jersey,
reducing transparency regarding potential liabilities. The group
has recently announced that TDR Capital will become the majority
shareholder with a 67.5% stake after acquiring the shares of Zuber
Issa, who will consequently exit the group's board. We also note
that there is a high reliance on 22.5% owner Mohsin Issa, who has a
seat on the board and has played a key role in the day-to-day
management of the group since the acquisition in 2021 and will
continue to do so until a new CEO is appointed. We understand the
board is currently looking for an experienced CEO, to allow Mr.
Issa to take a step back and, in our view, increase the
independence of the executive team. The group recently changed its
auditors, with EY resigning in July 2023, because of the additional
complexity of the group's operations following the EG acquisition.
The group appointed KPMG for its 2023 audit.

"Environmental factors are a negative consideration in our
analysis, given the group's fuel operations representing close to
20% of the overall revenue. ASDA's exposure to environmental
factors is in line with that of its peers in the fuel station,
retail, and restaurant sectors. The group is exposed to transition
risk as consumers switch to electric vehicles, resulting in
declining fuel volumes. We acknowledge the group continues to
explore options for further roll out of electric vehicle charging
infrastructure to counteract this risk.

"The group is also vulnerable to social risk with regard to wages,
labor relations, and employee safety, through its retail network.
This has been visible over recent months when the group has faced
labor force strikes following complaints regarding hours, pay, and
culture within the group. We note that it is a small proportion of
the workforce, and that management are in continued conversations
with the unions to reach a solution. A group of ASDA's store
employees have brought equal pay claims relating to pay differences
compared with colleagues at the group's distribution centers. In
the event the group is unsuccessful in its legal defense, and
depending on the number of successful claims, the potential
liabilities could be material. The group has entered into an
agreement with the former parent of the group, Walmart, with
respect to these claims up to an undisclosed amount. We note that
similar claims have been made by employees of competitors such as
Tesco, and no resolution is in sight. Therefore, social factors
remain a neutral consideration for our analysis at this stage."


BROWSIDE LIMITED: Goes Into Administration
------------------------------------------
Business Sale reports that Browside Limited, a Liverpool-based
property development firm, fell into administration in early June,
with Situl Raithatha of Springfields Advisory appointed as
administrator.

The company was a special purpose vehicle delivering a 70-apartment
development in Liverpool, which stalled earlier this year.

According to Business Sale, in the company's accounts for the year
to March 31, 2022, its current assets were valued at GBP7.4
million, but debts left it with net liabilities totalling
GBP832,081.


DAVIS ROOFING: Collapses Into Administration
--------------------------------------------
Business Sale reports that Davis Roofing Limited, a roofing company
based in Bristol, fell into administration earlier this month, with
Jonathan Dunn and Matthew Whitchurch of FRP Advisory appointed as
joint administrators.

In the company's accounts for the year to March 31 2023, its fixed
assets were valued at GBP89,308, down from GBP225,148 a year
earlier, while current assets were valued at GBP680,197, Business
Sale discloses.  At the time, its net assets amounted to
GBP212,611, Business Sale notes.


GATHER INTERNATIONAL: Falls Into Administration
-----------------------------------------------
Business Sale reports that Gather International Limited, an
investment management app, fell into administration at the end of
last month, with Christopher Andersen of AABRS appointed as
administrator.

According to Business Sale, in the company's accounts for the year
to February 28 2023, its fixed assets were valued at just under
GBP2.1 million and current assets at GBP1.6 million, with net
assets amounting to nearly GBP825,000.


LUKE MIDCO: S&P Assigns Prelim. 'B-' ICR on Buyout by Thoma Bravo
-----------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B-' ratings to
Darktrace's new parent, Luke Midco II Ltd. and the proposed senior
secured first-lien term loan and revolving credit facility (RCF),
which rank pari passu. The preliminary '3' recovery rating reflects
its estimate of about 65% recovery prospects in the event of a
payment default.

S&P said, "At the same time, we assigned our preliminary 'CCC'
issue rating and preliminary '6' recovery rating to the second-lien
term loan, reflecting our expectation of zero recovery prospects in
the event of a default."

U.S.-based private equity firm Thoma Bravo is acquiring U.K.-based
AI-powered cyber security provider Darktrace PLC for about $5.2
billion and is planning to fund the transaction via a new $1,685
million senior secured first-lien term loan and $460 million
second-lien term loan, alongside an equity-like contribution.

Darktrace is a market leader in the niche cybersecurity subsegment
of network detect and response (NDR) and S&P expects the company
will continue to report strong growth and increasing margins in the
next few years.

S&P said, "Our stable outlook reflects our view that Darktrace
would continue to show strong earnings growth, leading to adjusted
debt to EBITDA of about 9x in fiscal year 2025 and FOCF to debt
lower than 5% for the next two years.

"The preliminary 'B-' rating reflects our expectation of
Darktrace's strong revenue and earnings growth prospects and
healthy margins, offset by relatively weak free cash flow and high
leverage.The company benefits from a specialized AI-powered
cybersecurity solution that represents a solid value proposition
for customers and targets the expanding NDR subsegment within the
larger cybersecurity market. At the same time, Darktrace has
smaller size and scale than some cybersecurity peers, which limits
our view on the business. We estimate that, following the
transaction, Darktrace's S&P Global Ratings-adjusted leverage will
be very high and reduce only gradually toward 8x-9x in 2025, with
FOCF to debt remaining lower than 5%.

"Darktrace's specialized AI-led product proposition, strong growth
prospects, and leading position in the niche NDR market support our
rating. Darktrace has a specialized product proposition based on AI
and machine-learning technology for providing a range of
cybersecurity products. We see continued strong growth in revenue
over the coming few years, owing to robust demand for Darktrace's
solutions and overall strong growth for the cybersecurity markets.
Darktrace has platform-based cybersecurity solutions with a core
focus area within the network security market. In a typical
enterprise, networks would be protected by a firewall solution
offered by many cybersecurity peers. Darktrace's solutions do not
act as a firewall but instead track network activity and respond to
and isolate cyber attacks that manage to get through the firewall.
Darktrace is the leader in this niche NDR subsegment of the network
security market. The company uses AI-powered solutions and machine
learning to identify a pattern for every network, device, and user
within an enterprise. By developing a benchmark "normal", the AI
system is then able to detect potential threats as they emerge and
respond in real time. Hence the product is different to typical
cybersecurity solutions that are tailored to identify and block
known attacks. Darktrace's AI-driven platform is effective at
spotting and isolating novel attacks or other types of zero-day
attacks that manage to get through the firewall defenses. We expect
the NDR market to expand faster than the overall cybersecurity
market over the next few years due to increasing threat from novel
and zero-day cyber attacks, amplified by the rise of generative
AI-powered cyber threats."

Cross-selling is expected to be a driver of prospective revenue
growth. Leveraging on its AI-powered solutions, Darktrace has the
ability to effectively cross-sell to other end verticals like
email, cloud, and end point security, wherein it could act as a
defense and response solution for related new threats. Darktrace
launched similar products for cloud security in late 2023, which
has the potential to further drive cross-selling and revenue. In
fact, about 45% of Darktrace's customers use its solutions for more
than three points of entry (like email, end point, network, and
cloud). S&P believes there are further untapped cross-selling
opportunities to increase revenue, which is one of the keys factors
supporting strong future growth.

High recurring revenue and long-term contracts lead to enhanced
revenue visibility, which supports the rating. Similar to its
cybersecurity peers, Darktrace benefits from high revenue
visibility, with 99% of its solutions being subscription based.
Revenue visibility is also supported by long contract durations of
about three years. The company's contracted order backlog typically
covers more than a year's worth of revenue, which enhances revenue
predictability for the near term. Darktrace, like its cybersecurity
peers, has higher recurring revenue than other peers in the larger
software sector due to the mission-critical nature of their product
offering. Annual revenue attrition is relatively low at about 7%,
which demonstrates the value of Darktrace's product proposition and
the stability of its business model, which S&P views favorably.

Relatively low research and development (R&D) spending is offset by
higher expenditure on sales and marketing, which results in
profitability that is average compared with that of cybersecurity
peers. S&P said, "We forecast our adjusted EBITDA margins for
Darktrace at about 27% for fiscal year 2024, which we view as
average for enterprise cybersecurity companies. The company has a
relatively efficient R&D cost relative to peers'. Its AI-powered
solution is not trained on external data of known threats, which
reduces the cost of maintenance compared to peers whose products
are constantly trained on external data of known threats and
attacks. This is offset by company's relatively high sales and
marketing spending relative to peers, even though such spending was
a key driver of above-average growth over the past few years. We
see prospects for profitability margins to improve and surpass the
peer average of about 25%." This reflects the company's continued
revenue growth and our expectation that it will save about $40
million in costs after its acquisition and delisting.

Darktrace's proposed capital structure is highly leveraged and high
interest will keep FOCF suppressed over the next few years. S&P
said, "We estimate S&P Global Ratings-adjusted debt to EBITDA at
7x-10x and FOCF to debt below 5% for the next two years, which in
our view are the key constraints to the rating. Darktrace's
acquisition by Thoma Bravo will be funded with a combination of
debt, equity-like instruments, and cash on the balance sheet.
Darktrace intends to raise $2.145 billion of debt as first- and
second-lien term loans, which would lead to S&P Global
Ratings-adjusted leverage of 8x-9x in fiscal year 2025. We expect
continued robust growth of earnings will lead to deleveraging to
about 7.5x in fiscal year 2026, although the capital structure will
remain highly leveraged. In our view, Darktrace's strong earnings
growth prospects and deleveraging capacity over the medium term
will be constrained by the financial sponsor's aggressive financial
policy and demonstrated appetite for high debt leverage. Moreover,
a high interest burden will depress FOCF. We forecast cash interest
expense at about $170 million in fiscal year 2025, leading to FOCF
lower than $40 million that year. However, a steady decline in
interest payments thereafter, due to expected rate cuts, could
support FOCF of about $80 million in fiscal year 2026. Despite the
robust earnings growth and declining interest expense, we expect
FOCF to debt to remain below 5% over the forecast period.
Furthermore, we expect EBITDA interest coverage of 1.5x-1.8x for
fiscal years 2025 and 2026, which we view as commensurate with the
'B-' rating."

Limited scale in a highly fragmented cybersecurity market and lack
of a track record of operating at scale constrain the rating. The
enterprise cybersecurity market is highly fragmented. Darktrace
faces competition from large IT services companies (like Microsoft
and IBM), sizable legacy end point security providers (like Gen
Digital and McAfee), and many newer rivals (like Crowdstrike).
Darktrace's core market, NDR, represents a small portion of the
global cybersecurity market. S&P said, "Furthermore, we estimate
Darktrace's revenue at about $670 million in fiscal year 2024,
which is much lower than that of larger rated cybersecurity peers
like Proofpoint, Crowdstrike, McAfee, and Gen Digital. At the
company's smaller scale, potential earnings underperformance could
have material impact on our adjusted credit measures. Darktrace
generates a large portion of its revenue from small and midsize
enterprises (SMEs). We believe SMEs are more exposed to economic
cycles and more likely to cut costs or experience bankruptcy in a
recessionary environment, which adds potential volatility to
Darktrace's earnings. In addition, Darktrace has a limited track
record of operating profitably at scale, which introduces
uncertainty to the assumptions of strong earnings and margin growth
in our base case." The company's S&P Global Ratings adjusted-EBITDA
margins only stabilized at about 20% in the last two years.

S&P said, "The final ratings depend on our receipt and satisfactory
review of all final transaction documentation. Accordingly, the
preliminary ratings should not be construed as evidence of final
ratings. If S&P Global Ratings does not receive final documentation
within a reasonable time frame, or if final documentation departs
from materials reviewed, we reserve the right to withdraw or revise
our ratings. Potential changes include, but are not limited to, use
of the loan proceeds, the maturity, size and conditions of the
loans, financial and other covenants, and ranking of the
facilities.

"The stable outlook indicates our view that Darktrace's continued
strong organic growth, with revenue increasing by 15%-17% and S&P
Global Ratings-adjusted EBITDA margins improving to 30%-32%, will
translate into positive FOCF and gradual deleveraging. This should
enable the company to reduce adjusted debt to EBITDA during fiscal
year 2025 to about 9x but FOCF to debt is expected to remain lower
than 5%.

"We could lower the rating if Darktrace were to experience a
material slowdown in revenue and EBITDA growth, leading FOCF to
approach breakeven with no prospects for improvement. In such a
situation, liquidity could also weaken, which would lead us to view
the capital structure as unsustainable. This could happen if
competition intensified or an economic recession caused elevated
customer losses and worsening margins.

"We could raise the rating if Darktrace successfully executes on
its growth plan while expanding margins in line with our
expectations, leading its S&P Global Ratings-adjusted debt to
EBITDA to reduce to less than 7.5x and FOCF to debt to increase
beyond 5% on a sustainable basis.

"Governance factors are a moderately negative consideration in our
credit rating analysis of Darktrace. Our assessment of the
company's financial risk profile as highly leveraged reflects
corporate decision-making that prioritizes the interests of the
controlling owners, which is the case for most rated entities owned
by private-equity sponsors. Our assessment also reflects sponsors'
generally finite holding periods and focus on maximizing
shareholder returns."


SH STRUCTURES: Owed GBP4.5 Million at Time of Administration
------------------------------------------------------------
Grant Prior at Construction Enquirer reports that North
Yorkshire-based steelwork specialist SH Structures fell into
administration owing GBP4.5 million to suppliers and
subcontractors.

The scale of the firm's debts has been revealed in an update posted
at Companies House.

According to Construction Enquirer, SH Structures also owed HMRC
GBP370,000 and its employees nearly GBP1 million.

The firm went into administration in April when all of its 67 staff
were made redundant, Construction Enquirer relates.

It had been in business since 1992 working as a structural
steelwork contractor specialising in the design, fabrication and
installation of complex structures.

SH Structures worked across the whole UK on projects up to GBP5
million in value and saw its turnover peak at GBP10 million in
2023.

The administrators blamed its demise on cash-flow issues, problems
with ongoing contracts and workloads dropping-off, Construction
Enquirer discloses.


SPIRIT FIRES: Assets Put Up for Sale Following Liquidation
----------------------------------------------------------
Business Sale reports that the assets of a Newton Aycliffe-based
gas fire manufacturer are being sold via auction after the firm
ceased trading and appointed liquidators.

Spirit Fires Limited, which traded as CVO Gas Fires, produced
wholesale gas fires.

Established in 1999, the family run company's products included
gas, bioethanol and outdoor fires. While the company was
well-established in the industry, with its products featuring on
Channel 4's Grand Designs, it collapsed following a period of
challenging trading.

Mark Ranson and Emma Mifsud of Opus LLP were appointed as joint
liquidators of the business, while asset advisory firm Walker
Singleton has been engaged to manage an auction of the company's
assets, Business Sale relates.

Walker Singleton is inviting bids on stock and operational
equipment including new and boxed fires, production equipment and
support assets from its Newton Aycliffe premises, Business Sale
discloses. According to Business Sale, interested parties can bid
for products via an online auction, which closes at 12:00 p.m. on
Tuesday, June 18.

In the company's most recent accounts, for the year ending
March 31, 2023, its fixed assets were valued at slightly over
GBP15,000 and current assets at GBP907,660, Business Sale states.
At the time, its net assets amounted to GBP482,589, Business Sale
notes.



                           *********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante,
Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman,
Editors.

Copyright 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 * * *