/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/240904.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, September 4, 2024, Vol. 25, No. 178 Headlines I R E L A N D BLACKROCK EUROPEAN VII: Fitch Affirms 'Bsf' Rating on Class F Notes BLUEMOUNTAIN EUR 2016-1: Moody's Ups Rating on Cl. E-R Notes to Ba1 HAYFIN EMERALD I: Fitch Affirms 'B-sf' Rating on Class F-R Notes I T A L Y KIKO MILANO: S&P Assigns 'B+' Long-Term ICR, Outlook Stable N E T H E R L A N D S BE SEMICONDUCTOR: S&P Assigns BB+ Long-Term Rating, Outlook Stable N O R W A Y B2 IMPACT: S&P Rates Proposed Senior Unsecured Notes 'BB-' S E R B I A SERBIA: Moody's Affirms 'Ba2' LT Issuer & Sr. Unsec. Debt Ratings S P A I N SABADELL CONSUMO 3: Moody's Gives (P)B2 Rating to EUR15MM F Notes T U R K E Y PEGASUS HAVA: S&P Rates New USD500MM Senior Unsecured Notes 'B+' U N I T E D K I N G D O M ADLUDIO LIMITED: BDO LLP Named as Joint Administrators B.J. STAINLESS: Path Business Named as Administrators BRAITHWAITE CONSTRUCTION: Leonard Curtis Named as Administrators FOURBAY STRUCTURES: Price Bailey Named as Joint Administrators G J F FABRICATIONS: Grant Thornton Named as Joint Administrators H2GO POWER: KRE Corporate Named as Administrators - - - - - ============= I R E L A N D ============= BLACKROCK EUROPEAN VII: Fitch Affirms 'Bsf' Rating on Class F Notes ------------------------------------------------------------------- Fitch Ratings has upgraded BlackRock European CLO VII DAC's class B notes and affirmed the rest. The Outlooks are Stable. Entity/Debt Rating Prior ----------- ------ ----- BlackRock European CLO VII DAC A-R XS2304369247 LT AAAsf Affirmed AAAsf B-1-R XS2304370096 LT AA+sf Upgrade AAsf B-2-R XS2304370682 LT AA+sf Upgrade AAsf C-1-R XS2304371227 LT A+sf Affirmed A+sf C-2-R XS2304371904 LT A+sf Affirmed A+sf D-R XS2304372548 LT BBB+sf Affirmed BBB+sf E XS1904675110 LT BB+sf Affirmed BB+sf F XS1904675383 LT Bsf Affirmed Bsf Transaction Summary BlackRock European CLO VII DAC is a cash flow collateralised loan obligation (CLO) actively managed by BlackRock Investment Management (UK) Limited. The reinvestment period ended on 15 Jul 2023, but the manager is still able to reinvest, as allowed by reinvestment criteria after the reinvestment period. KEY RATING DRIVERS Asset Performance Better Than Expectation: The transaction is currently 0.8% below par, which is still well within the expected rating case loss rate. The transaction is passing all relevant collateral-quality, portfolio-profile and coverage tests. Exposure to assets with a Fitch-derived rating of 'CCC+' and below was 6.0% against a limit of 7.5%, and exposure to defaults was at EUR2.8 million, according to the latest trustee report dated 2 July 2024. The manager can still reinvest post the reinvestment period yet not all proceeds have been used for reinvestment. As of the July 2024 payment date report, the class A notes have lightly amortised by about EUR12 million. Manageable Refinancing Risk: The transaction has a manageable exposure to assets with near-term maturities, with approximately 7% of the portfolio maturing by June 2026. Comfortable default rate cushions for each class notes can absorb defaults of vulnerable credits and downward migration of near-term maturities. This supports the Stable Outlook. 'B'/'B-' Portfolio: Fitch assesses the average credit quality of the obligors at 'B'/'B-'. The Fitch-calculated weighted average rating factor of the current portfolio is 25.1. High Recovery Expectations: Senior secured obligations comprised 95.3% of the portfolio as calculated by the trustee. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-calculated weighted average recovery rate of the current portfolio is 62.2%. Diversified Portfolio: The portfolio is well-diversified across obligors, countries and industries. The top 10 obligor concentration was 11.5%, and the largest obligor represented 1.7% of the portfolio balance, as reported by the trustee. Exposure to the three-largest industries was 24.9% as reported by the trustee. Fixed-rate assets reported by the trustee were at 9.0% of the portfolio balance. Reinvesting Transaction: As the transaction is passing all relevant tests, the manager can continue to reinvest unscheduled principal proceeds and sale proceeds from credit-impaired and credit-improved obligations even after the transaction exited its reinvestment period in July 2023, subject to compliance with the reinvestment criteria. The cash balance as of 2 July 2024 stood at EUR29 million, after part of the cash was used to amortise the class A notes on the payment date in July 2024. However, given the manager's ability to reinvest, its analysis of upgrade potential is based on a Fitch-stressed portfolio. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Based on the current portfolio, downgrades may occur if the loss expectation is larger than initially assumed, due to unexpectedly high levels of default and portfolio deterioration. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Upgrades may result from stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. The majority of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and/or other nationally recognised statistical rating organisations and/or European securities and markets authority-registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk-presenting entities. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG CONSIDERATION Fitch does not provide ESG relevance scores for the transaction. 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. BLUEMOUNTAIN EUR 2016-1: Moody's Ups Rating on Cl. E-R Notes to Ba1 ------------------------------------------------------------------- Moody's Ratings has upgraded the ratings on the following notes issued by BlueMountain EUR CLO 2016-1 Designated Activity Company: EUR26,400,000 Class C-R Deferrable Mezzanine Floating Rate Notes due 2032, Upgraded to Aaa (sf); previously on Dec 1, 2023 Upgraded to Aa3 (sf) EUR21,800,000 Class D-R Deferrable Mezzanine Floating Rate Notes due 2032, Upgraded to A1 (sf); previously on Dec 1, 2023 Upgraded to A3 (sf) EUR25,000,000 Class E-R Deferrable Junior Floating Rate Notes due 2032, Upgraded to Ba1 (sf); previously on Dec 1, 2023 Affirmed Ba2 (sf) Moody's have also affirmed the ratings on the following notes: EUR235,200,000 (current outstanding amount EUR104,193,297.73) Class A-R Senior Secured Floating Rate Notes due 2032, Affirmed Aaa (sf); previously on Dec 1, 2023 Affirmed Aaa (sf) EUR50,000,000 Class B-R Senior Secured Floating Rate Notes due 2032, Affirmed Aaa (sf); previously on Dec 1, 2023 Upgraded to Aaa (sf) EUR11,200,000 Class F-R Deferrable Junior Floating Rate Notes due 2032, Affirmed B1 (sf); previously on Dec 1, 2023 Affirmed B1 (sf) BlueMountain EUR CLO 2016-1 Designated Activity Company, issued in April 2016, is a collateralised loan obligation (CLO) backed by a portfolio of mostly high-yield senior secured European loans. The portfolio is managed by Sound Point Capital Management, LP. The transaction's reinvestment period ended in April 2022. RATINGS RATIONALE The rating upgrades on the Class C-R, D-R and E-R notes are primarily a result of the deleveraging of the Class A-R notes following amortisation of the underlying portfolio since the last rating action in December 2023. The affirmations on the ratings on the Class A-R, B-R and F-R notes are primarily a result of the expected losses on the notes remaining consistent with their current rating levels, after taking into account the CLO's latest portfolio, its relevant structural features and its actual over-collateralisation ratios. The Class A-R notes have paid down by approximately EUR107.95 million (45.9% of the original balance) in the last 12 months, EUR80.59 million (34.3%) since the last rating action in December 2023 and EUR131.0 million (55.7%) since closing. As a result of the deleveraging, over-collateralisation (OC) has increased across the capital structure. According to the trustee report dated July 2024 [1] the Class A/B, Class C, Class D, Class E and Class F OC ratios are reported at 170.7%, 145.8%, 130.1%, 115.8% and 110.3% compared to November 2023 [2] levels of 147.8%, 132.8%, 122.6%, 112.7% and 108.7%, respectively. The deleveraging and OC improvements primarily resulted from high prepayment rates of leveraged loans in the underlying portfolio. Most of the prepaid proceeds have been applied to amortise the liabilities. All else held equal, such deleveraging is generally a positive credit driver for the CLO's rated liabilities. The key model inputs Moody's use in Moody's analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on Moody's published methodology and could differ from the trustee's reported numbers. In Moody's base case, Moody's used the following assumptions: Performing par and principal proceeds balance: EUR266.58 million Defaulted Securities: EUR0 Diversity Score: 49 Weighted Average Rating Factor (WARF): 3165 Weighted Average Life (WAL): 3.33 years Weighted Average Spread (WAS) (before accounting for Euribor floors): 3.57% Weighted Average Coupon (WAC): 4.32% Weighted Average Recovery Rate (WARR): 43.89% Par haircut in OC tests and interest diversion test: None The default probability derives from the credit quality of the collateral pool and Moody's expectation of the remaining life of the collateral pool. The estimated average recovery rate on future defaults is based primarily on the seniority of the assets in the collateral pool. In each case, historical and market performance and a collateral manager's latitude to trade collateral are also relevant factors. Moody's incorporate these default and recovery characteristics of the collateral pool into Moody's cash flow model analysis, subjecting them to stresses as a function of the target rating of each CLO liability it is analysing. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in May 2024. Counterparty Exposure: The rating action took into consideration the notes' exposure to relevant counterparties, such as account bank, using the methodology "Moody's Approach to Assessing Counterparty Risks in Structured Finance methodology" published in October 2023. Moody's concluded the ratings of the notes are not constrained by these risks. Factors that would lead to an upgrade or downgrade of the ratings: The rated notes' performance is subject to uncertainty. The notes' performance is sensitive to the performance of the underlying portfolio, which in turn depends on economic and credit conditions that may change. The collateral manager's investment decisions and management of the transaction will also affect the notes' performance. Additional uncertainty about performance is due to the following: -- Portfolio amortisation: The main source of uncertainty in this transaction is the pace of amortisation of the underlying portfolio, which can vary significantly depending on market conditions and have a significant impact on the notes' ratings. Amortisation could accelerate as a consequence of high loan prepayment levels or collateral sales by the collateral manager or be delayed by an increase in loan amend-and-extend restructurings. Fast amortisation would usually benefit the ratings of the notes beginning with the notes having the highest prepayment priority. In addition to the quantitative factors that Moody's explicitly modelled, qualitative factors are part of the rating committee's considerations. These qualitative factors include the structural protections in the transaction, its recent performance given the market environment, the legal environment, specific documentation features, the collateral manager's track record and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from Moody's other analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision. HAYFIN EMERALD I: Fitch Affirms 'B-sf' Rating on Class F-R Notes ---------------------------------------------------------------- Fitch Ratings has upgraded Hayfin Emerald CLO I DAC's class B-R and C-R notes and affirmed the others, as detailed below. The Outlook of the class D-R notes has been revised to Positive from Stable. Entity/Debt Rating Prior ----------- ------ ----- Hayfin Emerald CLO I DAC A-R XS2307881206 LT AAAsf Affirmed AAAsf B1-R XS2307881974 LT AA+sf Upgrade AAsf B2-R XS2307882600 LT AA+sf Upgrade AAsf C-R XS2307883244 LT A+sf Upgrade Asf D-R XS2307883913 LT BBBsf Affirmed BBBsf E-R XS2307884564 LT BBsf Affirmed BBsf F-R XS2307884721 LT B-sf Affirmed B-sf Transaction Summary Hayfin Emerald CLO I DAC is a cash flow CLO mostly comprising senior secured obligations. The transaction is actively managed by Hayfin Emerald Management LLP and will exit its reinvestment period in September 2025. KEY RATING DRIVERS Stable Performance: The portfolio's credit quality has remained broadly stable over the last 12 months. Exposure to assets with a Fitch-derived rating of 'CCC+' and below is at 4.5%, versus a limit of 7.5%, according to the latest trustee report dated 17 June 2024. The portfolio currently has EUR7.3 million defaulted assets, less than the EUR8 million reported during its last review in November 2023. The transaction is 1.95% below its target par, but its shorter risk horizon contributes to strong cushions to support the upgrade of the class B-R and C-R notes. Manageable Refinancing Risk: The transaction has manageable refinancing risk with only 7.8% of assets maturing before 2027. This, together with the stable performance, leads to the Outlook revision of the class D-R notes to Positive. 'B'/'B-' Portfolio: Fitch assesses the average credit quality of the obligors at 'B'/'B-'. The Fitch-calculated weighted average rating factor (WARF) of the current portfolio is 24.9. High Recovery Expectations: Senior secured obligations comprise 95.2% of the portfolio. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-calculated weighted average recovery rate (WARR) of the current portfolio is 63.6%. Diversified Portfolio: The portfolio is well-diversified across obligors, countries and industries. The top 10 obligor concentration, as calculated by trustee, is 19.4%, and no obligor represents more than 3.1% of the portfolio balance. Exposure to the three largest Fitch-defined industries is 26.5% as calculated by the trustee. Fixed-rate assets reported by the trustee are 9.9% of the portfolio balance, versus a limit of 10%. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Downgrades may occur if the build-up of the notes' credit enhancement following amortisation does not compensate for a larger loss expectation than initially assumed, due to unexpectedly high levels of defaults and portfolio deterioration. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Upgrades may result from stable portfolio quality and if the notes start amortising, leading to higher credit enhancement across the structure. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. The majority of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and/or other nationally recognised statistical rating organisations and/or European securities and markets authority-registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk-presenting entities. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG CONSIDERATIONS Fitch does not provide ESG relevance scores for this transaction. In cases where Fitch does not provide ESG relevance scores in connection with the credit rating of a transaction, programme, instrument or issuer, Fitch will disclose in the key rating drivers any ESG factor which has a significant impact on the rating on an individual basis. ========= I T A L Y ========= KIKO MILANO: S&P Assigns 'B+' Long-Term ICR, Outlook Stable ----------------------------------------------------------- S&P Global Ratings assigned a 'B+' long-term issuer credit rating to Italian color cosmetics retailer Kiko Milano (Duomo Topco S.r. l), and a 'B+' issue rating, with a '3' recovery rating, to the group's EUR500 million senior secured notes due 2031. Duomo Topco S.r.l, through its financing subsidiary Duomo Bidco SpA, issued EUR500 million senior secured notes and a EUR85 million super senior revolving credit facility (RCF) to support L Catterton's intentions to buy 69% of Italian cosmetic retailer Kiko Milano (Kiko) from the Percassi family for about EUR1.4 billion. L Catterton and the Percassi family will contribute about EUR925 million of common equity. S&P said, "The stable outlook reflects our expectations that Kiko will achieve growth through new store openings while elevating its brand, thereby supporting an S&P Global Ratings-adjusted EBITDA margin sustainably above 25% over 2024-2025. We also consider that expansionary investments will weigh on free operating cash flow after leases, forecast to slide to negative EUR53 million in 2024 before turning positive at about EUR40 million in 2025. "The final issuer credit and issue ratings on the notes are in line with the preliminary ratings we assigned July 1, 2024. The final amount of the issued senior secured notes is in line with the EUR500 million originally proposed. The margin on the notes was 4.125%. There are no material changes to the final debt documentation since our original review, or to our forecasts. "We assume Kiko will maintain a prudent financial policy with S&P Global Ratings-adjusted debt to EBITDA below 5x over 2024-2025. In April 2024, financial sponsor L Catterton announced its intention to acquire Kiko from its founding family Percassi for a total consideration of about EUR1.4 billion (about EUR1.2 billion excluding the rolled-over debt items and the management bonus paid as part of the acquisition price). Pro forma the transaction, L Catterton will own 69% of Kiko's parent company Duomo Topco. The Percassi family will retain 30% and management will hold on to 1%. Duomo Topco, through its financing subsidiary Duomo Bidco, issued about EUR500 million of senior secured floating rate notes. The capital structure implies that S&P adjusted leverage will approach 4.6x by the end of 2024, from 3.6x in 2023. The adjusted debt calculation includes about EUR430 million of lease liabilities in 2024, and we include in the EBITDA roughly EUR94 million of rent expenses for the same year, in line with our methodology. We consider the leverage to be more prudent than that of other financial-sponsor-led leveraged buyouts. This points to L Catterton's intention of keeping financial flexibility in the group to support a strategy based on organic growth, as well as the Percassi family preferred conservative approach. This lead us to assume that the likelihood of leverage increasing beyond 5x is low in the medium term, factoring in that we do not anticipate aggressive shareholder remunerations or that the group will pursue sizable debt-funded acquisitions." Kiko has a solid market position in its core markets in the highly competitive beauty and color cosmetics industry. According to Euromonitor, the color cosmetics industry is expected to grow globally at a CAGR of 4.6% between 2023 and 2028, supported by higher volumes of sales. While the industry remains very fragmented, Kiko benefits from a strong market position in its core markets. It had a no. 1 position in Italy in 2023, with 12.6% of market share, and stood at No. 3 in France, with 9.0% of market share. S&P thinks Kiko could benefit from those positive industry dynamics, thanks to its business model based on directly operated stores (DOS), accounting for more than 80% of sales (5% online), its value for money proposition, its vast assortment, and the quality embedded in its products as the group leverages its made-in-Italy heritage. Since 2019, the company has focused on elevating its image and repositioning its brand as a global beauty brand, driving customers towards its more profitable collections and removing large price discounts. Although the preliminary results of the strategy are positive uncertainty remains around the group's ability to reposition itself in a more premium space without jeopardizing its sales volumes. The group's strategy so far has yielded revenue growth at a CAGR of 6.3% between 2019 and 2023, and reported EBITDA rose at a CAGR of 10% over the same period. That said, Kiko's limited scale and its single-brand focus compared with global competitors makes the group exposed to potential volatility in earnings. We deem the beauty industry is highly competitive, considering that global players such as L'Oréal S.A. (AA/Stable/A-1+) and The Estee Lauder Companies Inc. (A/Negative/A-1) have a more diversified brand and product offering. The risk of new entrants is elevated. The market has witnessed the arrival of numerous new brands, often linked to a celebrity such as Fenty Beauty by Rihanna or Kylie Cosmetics by Kylie Jenner. These brands have enjoyed fast growth, supported by a wide fan base, and they potentially take market shares from existing players. Kiko benefits from a good brand equity, driving above-industry-average EBITDA margins.Kiko's relatively unique positioning, combining a solid value for money proposition with a network of 876 directly operated stores (DOS) in more than 60 countries, supports a high S&P Global Ratings-adjusted EBITDA margin, at about 21.1% in 2023. S&P said, "This is above what we consider the average 10%-16% profitability of specialty retailers. Kiko's appealing positioning and ability to attract consumers in its DOS, rather than relying on third-party distributors, have been instrumental for strengthening its brand and help drives customer loyalty and allow the company to enjoy high gross margin of about 80%. In mature markets, such as Italy (32% of sales in 2023), however, the company's market share suffered from the promotion purge that Kiko started in 2019. We note that in less penetrated geographies where the company already deployed its premiumization strategy, such as the Middle East, Kiko's gross margin is about 10 percentage points higher than that of its mature Western Europe markets, underpinned by higher average basket sizes and prices. We expect the additional revenue from the new stores and the premiumization strategy should continue to improve profitability, despite elevated occupancy, personnel and marketing costs to support the growth, so that adjusted EBITDA margin should increase to about 25.0% in 2024 and 26.3% in 2025." S&P said, "Although we assume high growth capital expenditure (capex) will push Kiko's free operating cash flow (FOCF) after leases into negative territory this year, we expect the trend to reverse in 2025 thanks to revenue and EBITDA expansion. Kiko plans to open 77 DOS in 2024, with the vast majority being already contracted. This should translate into a spike in capex at about EUR73 million, including EUR34 million for the new store openings, on top of the EUR10 million investments that are necessary to complete the IT infrastructure for the company's e-commerce and digital management of operations and about EUR30 million on maintenance capex. Consequently, we forecast that FOCF after leases will drop to negative EUR53 million (negative EUR10 million excluding the EUR43 million management bonus paid in cash as part of the acquisition price), from positive EUR15 million in 2023. Although there is significant cash burn this year, the group should see benefits from its planned openings in underpenetrated geographies, such as Germany, the U.K., and the Middle East. Kiko also plans to increase its global presence in new locations, but the associated risks is mitigated by the company's strategy of testing new markets through franchises, which are a capex-light investments. We expect capex to normalize at about EUR40 million per year from 2025. This, alongside revenue and EBITDA expansion from the new additions to the network and premiumization, should support FOCF generation of about EUR40 million in 2025 and EUR58 million in 2026. "Consumers' beauty routines and the low business seasonality stabilize earnings. In our view, makeup's perishable nature and the needs to be frequently replaced mean these products are recurring purchases, unlike apparel or consumer electronics. As a result, cosmetics benefit from a low seasonality. Kiko's revenue are evenly spread over the year, with temporary spikes linked to end-of season sales and Christmas gifting season. Consequently, the working capital of the group is relative stable and should mitigate FOCF and earnings volatility. We understand that the company intends to stop its reverse factoring program and has already reduced it substantially in the first half of 2024. The shortened payment period of payables will cause a temporary spike in working capital that the company will manage by drawing on its RCF, which is incorporated in our expectations of leverage at about 4.6x by year-end." A diversified geographic sales footprint, served by a local supply chain helps Kiko withstand macroeconomic volatility and geopolitical tensions. Kiko has operations in more than 60 countries, with some concentration in Italy (32% of revenue in 2023), France (24%), Spain (16%). Its other European countries and the Middle East account for 11% and 15%, respectively, of 2023 revenue. The geographic diversification of revenue is a positive, in S&P's view, since it helps smoothen the volatility of macroeconomic conditions and consumers preferences in different locations. Moreover, Kiko relies on a short supply chain, thanks to its geographical proximity with key suppliers. About 60% of the global supply of makeup is produced in the Lombardy region, where Kiko is headquartered. The upstream section of the makeup supply chain is relatively fragmented, with many small companies serving the global base of cosmetic brands. The relative importance of Kiko for its suppliers guarantees high purchasing power for the group, driving profitability and ensuring vast assortment. The longstanding relationship and the geographical proximity with suppliers also allow for co-development the products, where the suppliers bear the R&D costs and retain patent on the formulas. Finally, S&P notes some degree of supply concentration as about 65% of the products are supplied from top three suppliers. Kiko's biggest supplier is Intercos, one of the world's leading cosmetics and beauty products manufacturers, a listed company with L Catterton now having 13% of the share capital, ensuring good relationship between the two groups. S&P said, "Single brand exposure and lack of product diversification constrain the group's creditworthiness, in our view. The group commercializes the entire portfolio of products under its flagship "KIKO Milano" brand. We think this creates risk of missteps in executing the strategy, especially if the repositioning of the brand does not fit consumers' perception or the brand image is damaged by product recalls or marketing campaigns going sideways. Furthermore, Kiko derives more than 80% of revenue from color cosmetics, of which face cosmetics comprise 67%. Its global peers have a more diversified assortment covering other categories of the beauty industry, such as skincare or body and haircare. Although Kiko is present in the skincare category, it represented only 10% of sales in 2023. Given the low weight in Kiko's product mix, we think that Kiko could be missing opportunities on some prominent trends in the beauty industry, such as the usage of biological cosmetics or greater interest in skincare. "The stable outlook reflects our expectations that Kiko will be able to smoothly execute its revenue growth strategy, enabling EBITDA margin expansion to about 25% sustainably over 2024-2025. This should translate into an adjusted debt to EBITDA well below 5x and positive FOCF after lease payments of about EUR40 million in 2025 from negative EUR53 million in 2024, as we expect retail network expansion to moderate in 2025. "We could lower our rating over the next 12-18 months if adjusted debt to markedly exceeded 5x or its FOCF after lease payments materially reduced below our current base case on a permanent basis." This could happen if an unfavorable macroenvironment translated into weaker earnings or if Kiko's marketing investments failed to strengthen its brand as anticipated, leading to a smaller market share and deteriorated profitability materially below 25%. S&P said, "Although an upgrade is remote over the next 12 months, we could raise the rating if Kiko outperforms our current base case, and we were to observe Kiko increasing the size of its operations beyond its existing core markets, while further improving its profitability materially above 25% on a durable basis. Under this scenario FOCF would materially exceed our forecasts, ensuring greater financial flexibility to support Kiko's growth ambition. Also, a positive rating action could stem from leverage reducing well below 4x with a clear commitment from its owners to maintain it at this level, and our expectation that the majority private equity owner will relinquish its control over the medium term." ESG factors are an overall net neutral consideration in our credit analysis of Kiko. S&P considers the beauty industry to be somewhat subject to environmental concerns, including waste impact of plastic bottles and cosmetics packaging. These risks could translate into changing regulations and consumer preferences in the medium term. However, for now, consumers are responding positively to Kiko's value proposition, and the regulatory landscape is not yet very stringent that it would force the group to source more ecological products. This underpins our view that environmental issues remain a neutral consideration. Risks that cosmetics ingredients could be harmful for the for consumers' health represent a major social concern. Thanks to Kiko's established relationship with suppliers and prompt anticipation of requirements imposed by the Cosmetics Products Regulation, along with additional EU and national legislation, manufacturing practices ensure alignment with these requirements. As such, social factors remain a neutral consideration in S&P's rating analysis. Governance factors are a moderately negative consideration, as is the case for most rated entities owned by private-equity sponsors. S&P said, "We think Kiko's aggressive financial risk profile points to corporate decision-making that prioritizes the interests of the controlling owners. This also reflects generally finite holdings periods and focus on maximizing shareholder returns. That said, we view positively the additional control brough by the founding family remaining an important minority shareholder in the group with 30% stake." ===================== N E T H E R L A N D S ===================== BE SEMICONDUCTOR: S&P Assigns BB+ Long-Term Rating, Outlook Stable ------------------------------------------------------------------ S&P Global Ratings assigned its 'BB+' long-term ratings to Dutch semiconductor assembly provider BE Semiconductor Industries N.V. (Besi) and its notes, with a recovery rating of '3', reflecting its estimate of about 65% recovery in the event of a payment default. S&P said, "The stable outlook reflects our expectation that in 2024-2026, Besi will maintain a conservative balance sheet, including a reported net cash position, with top-line growth of 10%-50% annually and an EBITDA margin of at least 40% over the cycle, which we expect will lead to FOCF of at least EUR200 million per year. "The ratings are in line with our preliminary ratings, which we assigned on July 8, 2024. There were no material changes to the financial documentation compared with our original review and the company's operating performance has been in line with our previous forecast. "The stable outlook reflects our expectation that Besi will maintain a conservative balance sheet, including a reported net cash position. In addition, we project revenue to increase over the coming two years with EBITDA margins of at least 40% over the cycle, which we expect will lead to minimum annual FOCF of EUR200 million." Downside scenario S&P said, "We could lower our rating if Besi were to reduce its cash holdings or raise material amounts of debt to finance large shareholder distributions or acquisitions, with adjusted leverage staying higher than 2.0x. We could also lower the rating in case operational setbacks caused the EBITDA margin to fall below 30% or FOCF below EUR100 million on an ongoing basis." Upside scenario Although currently unlikely in the next 12 months, S&P could raise the rating in the future if the company increases its scale, as shown for example by broader product or segment diversification, while maintaining its conservative financial policy and protecting its strong liquidity position. =========== N O R W A Y =========== B2 IMPACT: S&P Rates Proposed Senior Unsecured Notes 'BB-' ---------------------------------------------------------- S&P Global Ratings has assigned its 'BB-' long-term issue rating to the proposed senior unsecured notes to be issued by Norwegian debt collector B2 Impact ASA (BB-/Stable/--). S&P also assigned a recovery rating of '4' to the issue, indicating its expectation of average recovery (30%-50%, rounded average 40%). B2 proposes to issue EUR200 million senior unsecured notes and to use the proceeds to prepay existing notes (B2H06), which represent B2's most expensive interest-bearing debt. However, B2H06 currently has EUR300 million outstanding, which leaves EUR100 million to be covered outside the proposed issuance. For this, the company intends to use its excess cash position and its recently renegotiated revolving credit facility (RCF), which now offers a more attractive interest rate and can be used to repay outstanding market debt. The early call of B2H06 implies that B2 will do so at a premium of 103.96 per note, resulting in a cash outflow of roughly EUR11.9 million. S&P said, "Given that the transaction is mainly to improve the interest burden, B2's overall leverage position will not change materially and remains in line with our expected ratios for 2024-2025. Positively, the transaction will result in an improved maturity schedule. Finally, given that the transaction's purpose is mainly liability refinancing, our recovery rating for B2's senior unsecured debt remains unchanged at '4' (40%)." =========== S E R B I A =========== SERBIA: Moody's Affirms 'Ba2' LT Issuer & Sr. Unsec. Debt Ratings ----------------------------------------------------------------- Moody's Ratings has changed the outlook on the Government of Serbia to positive from stable and has affirmed the Government of Serbia's Ba2 long-term issuer and senior unsecured debt ratings. Moody's decision to change the outlook to positive reflects prospects of a further sustained improvement of Serbia's economic and fiscal strength, with the possibility of GDP growth and fiscal performance exceeding Moody's expectations. Moreover, Serbia's credit profile is supported by diminishing fiscal risks from the State-Owned Enterprises (SOEs) energy sector and continuing progress on structural reforms under the country's IMF programme. The affirmation of Serbia's Ba2 ratings reflects moderate economic, fiscal, and institutional strength balanced by the sovereign's susceptibility to event risk, the latter driven by geopolitical risks. Serbia's local and foreign-currency ceilings remain unchanged at Baa1 and Baa2, respectively. The four-notch gap between the local currency ceiling and the sovereign rating reflects predictable institutions and government actions, a moderate government footprint in the economy and financial system, moderate political risk and low external imbalances. The one-notch gap between the foreign currency and local currency ceiling reflects moderate policy effectiveness and external indebtedness. RATINGS RATIONALE RATIONALE FOR CHANGING THE OUTLOOK TO POSITIVE FROM STABLE UPSIDE RISKS TO MEDIUM-TERM GROWTH PROSPECTS AND INCREASING RESILIENCE SUPPORTED BY STRUCTURAL REFORM PROGRESS The first driver of the positive outlook reflects solid medium term economic prospects, with the possibility that the growth performance will exceed Moody's expectations, driven by the acceleration in investment and supported by further structural reform progress. After expanding by 2.5% in 2023, Moody's project real GDP growth to accelerate to 3.8% in 2024 and 4.2% in 2025, mainly driven by stronger domestic demand, supported by lower inflation, favorable labour market dynamics and a pick-up in investment, while Moody's expect a negative contribution by net exports. That said, the authorities' development plan could support growth beyond Moody's expectations, if focused on productive investment to address infrastructure gaps. The government is focusing on the implementation of the "Leap into the Future—Serbia EXPO 2027" development plan, which is expected to increase public investment spending over the period 2024-2027. The plan envisages an investment plan of EUR17.8 billion over the coming years, equivalent to about 23% of estimated 2024 GDP. The programme aims to raise public investment to about 7.5% of GDP by 2027 from 7% in 2023 with a significant portion allocated to transportation infrastructure. Investment will also be supported by the New Growth Plan for the Western Balkans announced by the European Commission in 2023 covering the period 2024-2027, with an initial allocation of EUR1.6 billion (about 2% of GDP) to Serbia and the final allocation depending on progress on EU-related reforms. The strong performance under the current Stand-by Arrangement (SBA) with the IMF has helped Serbia to preserve macroeconomic stability, anchor fiscal policy, and support liquidity amid the implications from the Russia-Ukraine war. Risks related to the energy sector and to the spillovers of the Russia-Ukraine war have receded since the SBA was agreed in 2022. Reforms to address structural issues in the energy sector are progressing, along with efforts to diversify energy sources and import routes and to increase gas storage capacity. Additional measures undertaken under the IMF programme would also gradually improve public investment management to prioritize project quality while energy transformation could improve the sector's security over the long term, increasing the resilience of Serbia to future shocks. POTENTIAL FURTHER STRENGTHENING OF PUBLIC FINANCES DUE TO PRUDENT FISCAL MANAGEMENT The second driver of the positive outlook reflects the prospect of enduring improvement of Serbia's fiscal strength, reflecting declining general government debt to GDP and diminishing fiscal risks posed by the energy SOEs due to the reforms undertaken under the IMF programme. Public finances have progressively strengthened, with moderate fiscal deficits and declining public debt-to-GDP ratio, supported by a track record of fiscal prudence. In 2023, the general government deficit stood at a slightly better than planned 2.2% of GDP, mainly reflecting broad-based revenue overperformance, and lower-than-planned expenditure despite some ad-hoc spending measures tied to the electoral cycle. Moody's project the fiscal deficit to remain at 2.2% of GDP in 2024 and reach 2.5% of GDP in 2025, before gradually declining. These projections are in line with the authorities' draft Fiscal Strategy for 2025-2027 that foresees a postponement of the new fiscal deficit rule to accommodate higher investment under the development plan. The fiscal deficit rule – that envisages a deficit of 1.5% of GDP – was expected to become effective in 2025 under the revamped fiscal framework. Despite the postponement of the deficit rule, Moody's expect public debt-to-GDP to remain on a downward trajectory over the medium term, supported by solid nominal growth, assuming the pension indexation mechanism and the public wage rule (limiting the share of salaries to 10% of GDP) of the fiscal framework remain in place. General government debt has declined in recent years, reaching 52.3% of GDP in 2023 from 57.8% of GDP in 2020. Moody's project general government debt to further decline slightly to 51.7% in 2025, and likely approach 50% of GDP in 2027. Stronger than expected fiscal performance due to further progress on fiscal structural reforms, including public sector wage reform and tax administration reform, as well as the continuation of the fight against tax evasion supporting revenue collection poses an additional upside risk to fiscal strength. Fiscal risks arising from the energy sector have decreased. Under the IMF programme, the authorities are implementing measures and reforms to address the challenges of the energy sector, including tariff hikes and the reform of SOEs aimed at improving their governance, efficiency, and financial viability. Energy SOEs financial position has improved, reducing the risk of budgetary support to the SOE sector. RATIONALE FOR THE AFFIRMATION OF THE Ba2 RATINGS The affirmation of Serbia's ratings reflects a track record of macroeconomic stability and solid economic growth, supported by a relatively dynamic manufacturing sector as well as a favourable investment climate and educated labor force that help attract large and diversified FDI inflows. Serbia's institutional strength has benefited from the gradual strengthening of its laws and regulation under the country's EU accession process and significant structural reform progress under successive IMF programmes, although weaknesses in the rule of law and control of corruption continue to weigh on Moody's assessment. The rating also reflects Serbia's moderate government debt burden against risks from the large share denominated in foreign currency and still-present contingent liability risks. The rating also reflects a track record of fiscal consolidation that affords space to absorb shocks, supported by a recently revamped fiscal framework. Susceptibility to event risk is driven by significant geopolitical risks due to a fragile relationship with Kosovo, as well as Serbia's non-alignment with EU foreign policy which both risk hampering the EU accession process. So far geopolitical considerations have not weakened foreign investment, but Serbia's non-alignment with EU foreign policy could discourage FDI if the conflict between Russia and Ukraine were to escalate further. The challenging geopolitical context is balanced against Serbia's stable domestic political landscape. The latter has been conducive to policy continuity, despite frequent elections. At the same time government liquidity, banking sector risk and external vulnerability risk remain contained. Financing risks have declined and remain low as the authorities have build-up a significant cash buffer. As of end July, cash reserves stood at about 8.5% of GDP, up from 5.5% of GDP at the end of 2023 in the context of large international issuances over the past two years. The authorities also intend to continue to treat the funds made available under the IMF programme as precautionary. The banking sector is adequately capitalized and liquid, with sound asset quality although euroization still represents a risk, despite a declining euroization in recent years. External imbalances remain low given the moderate current-account deficit is fully covered by net foreign direct investment (FDI) and robust foreign exchange reserves that reached an all-time high at USD 24.8 billion at year-end 2023 (excluding gold and SDRs), up by USD 6.5 billion from end-2022. Moody's project that the current-account deficit will widen to 4.2% of GDP in 2024 from 2.6% of GDP in 2023, but it will remain below historical level and fully covered by FDI inflows while foreign exchange reserves will remain elevated. ENVIRONMENTAL, SOCIAL, GOVERNANCE CONSIDERATIONS Serbia's ESG Credit Impact Score is CIS-3, reflecting moderate exposure to environmental and social risks. Moderate governance strength, along with a track record of fiscal prudence that has afforded fiscal space to absorb shocks, bring some resilience to E and S risks. Serbia's E-3 environmental issuer profile score mainly reflects its moderate exposure to physical climate risk. Given significant dependence on agriculture, similar to other Balkan countries, Serbia is exposed to the risk of temporary supply shocks stemming from adverse weather shocks, including drought, which adds to the volatility in GDP growth. Risks stemming from water management, natural capital depletion as well as from waste and pollution are mostly low. Serbia's S-3 social issuer profile score reflects moderate exposure to social risks, and it is mainly related to demographics and labour market dynamics. Relatively high rates of youth unemployment and limited job opportunities have contributed to emigration, accelerating ageing, as emigrants tend to be younger and more educated. Labour participation among women is also low compared to the EU. Most of other social risk categories – such as education and health and safety – also pose a risk, albeit contained and less prominent than what typically observed in emerging markets. Serbia's governance profile score is equivalent to G-2, supported by the gradual strengthening of its laws and regulation under the country's EU accession process and significant structural reform progress under successive IMF programmes, although weaknesses in the rule of law and control of corruption continue to weigh on the assessment. GDP per capita (PPP basis, US$): 26,305 (2023) (also known as Per Capita Income) Real GDP growth (% change): 2.5% (2023) (also known as GDP Growth) Inflation Rate (CPI, % change Dec/Dec): 7.6% (2023) Gen. Gov. Financial Balance/GDP: -2.2% (2023) (also known as Fiscal Balance) Current Account Balance/GDP: -2.6% (2023) (also known as External Balance) External debt/GDP: 66.8% (2023) Economic resiliency: baa3 Default history: At least one default event (on bonds and/or loans) has been recorded since 1983. On August 27, 2024, a rating committee was called to discuss the rating of the Serbia, Government of. The main points raised during the discussion were: The issuer's economic fundamentals, including its economic strength, have not materially changed. The issuer's institutions and governance strength, have not materially changed. The issuer's fiscal or financial strength, including its debt profile, has materially increased. The issuer's susceptibility to event risks has not materially changed. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Serbia's Ba2 ratings could be upgraded if the improvements in the country's fiscal metrics were sustained and fiscal risks remained contained, supported by further progress on structural reforms under the IMF programme. This would be credit positive particularly if accompanied by evidence that these debt dynamics are unlikely to be reversed thanks to adherence to the fiscal framework. A prudent and transparent implementation of the public investment programme would also be credit positive, underpinned by reforms to strengthen institutions – in particular, in the areas of rule of law and control of corruption – and by progress on the EU reform agenda. The latter could result in additional funding coming from the new EU growth plan for the region. The positive outlook signals that the rating is unlikely to be downgraded in the near term. That said, the outlook could be changed to stable and eventually negative pressures on the rating would arise if the fiscal metrics were to deteriorate significantly due to a less prudent fiscal stance, materialization of contingent liabilities, or significant exchange rate depreciation. The emergence of external imbalances, due for example to a significant decline in FDI leading to less stable source of current-account financing, would also be credit negative. In addition, Serbia's ratings would come under pressure were susceptibility to event risk to rise significantly due to an increase in geopolitical risk materially impacting economic and fiscal strength and EU accession prospects. The principal methodology used in these ratings was Sovereigns published in November 2022. ========= S P A I N ========= SABADELL CONSUMO 3: Moody's Gives (P)B2 Rating to EUR15MM F Notes ----------------------------------------------------------------- Moody's Ratings has assigned the following provisional ratings to Notes to be issued by SABADELL CONSUMO 3, FONDO DE TITULIZACION: EUR641.3M Class A Asset-Backed Floating Rate Notes due October 2035 Assigned (P)Aa1 (sf) EUR15.0M Class B Asset-Backed Floating Rate Notes due October 2035, Assigned (P)A2 (sf) EUR30.2M Class C Asset-Backed Floating Rate Notes due October 2035, Assigned (P)Baa1 (sf) EUR35.0M Class D Asset-Backed Floating Rate Notes due October 2035, Assigned (P)Baa3 (sf) EUR13.5M Class E Asset-Backed Floating Rate Notes due October 2035, Assigned (P)Ba3 (sf) EUR15.0M Class F Asset-Backed Floating Rate Notes due October 2035, Assigned (P)B2 (sf) Moody's have not assigned any rating to the EUR9.2M Class G Subordinated Floating Rate Notes due October 2035. Maximum achievable rating is Aa1 (sf) for structured finance transactions in Spain, driven by the corresponding local currency country ceiling of the country. RATINGS RATIONALE The transaction is a static cash securitisation of Spanish unsecured consumer loans originated by Banco de Sabadell, S.A. (Baa1/P-2; A3(cr)/P-2(cr)). The portfolio consists of consumer loans used for several purposes, such car acquisition, property improvement and other undefined or general purposes. Banco de Sabadell, S.A. also acts as servicer and collection account bank of the transaction. The underlying assets consist of consumer loans with fixed rates and a total outstanding balance of approximately EUR1,099 million. As of June 24, 2024, the provisional portfolio has 117,627 loans with a weighted average interest of 7.7%. The portfolio is highly granular with the largest and 20 largest borrowers representing 0.01% and 0.15% of the pool, respectively. The portfolio also benefits from a good geographic diversification and weighted average seasoning of 10.6 months. The provisional portfolio, as of its pool cut-off date, does not have any loans more than 30 days in arrears. The final portfolio will be selected at random from the provisional portfolio to match the final Notes issuance amount. At closing, none of the loans will be in arrears for more than 15 days. The transaction benefits from credit strengths such as the granularity of the portfolio, the excess spread-trapping mechanism through 3 months artificial write off mechanism, the high average interest rate of 7.7% and the financial strength and securitisation experience of the originator. Moreover, Moody's note that the transaction features some credit weaknesses such as a complex structure including interest deferral triggers for junior Notes, pro-rata payments on all asset-backed Notes from the first payment date and the linkage to Banco de Sabadell, S.A. Various mitigants have been put in place in the transaction structure such as sequential redemption triggers to stop the pro-rata amortization. Commingling risk is mitigated by the transfer of collections to the issuer account within two days and the high rating of the servicer. Hedging: all the loans are fixed-rate loans, whereas the Notes are floating-rate liabilities. As a result, the issuer is subjected to a fixed-floating interest-rate mismatch. To mitigate the fixed-floating rate mismatch, the issuer has entered into a swap agreement with BNP Paribas. Under the swap agreement, (i) the issuer pays a fixed rate of [ ]%, (ii) the swap counterparty pays 1M Euribor, (iii) the notional as of any date will be the Outstanding Balance of Non-Doubtful Receivables. Moody's analysis focused, amongst other factors, on: (i) an evaluation of the underlying portfolio of consumer loans and the eligibility criteria; (ii) historical performance provided on Banco de Sabadell, S.A.'s total book and past consumer loan ABS transactions; (iii) the credit enhancement provided by subordination, excess spread and the reserve fund; (iv) the liquidity support available in the transaction by way of principal to pay interest; and (v) the overall legal and structural integrity of the transaction. MAIN MODEL ASSUMPTIONS Moody's determined a portfolio lifetime expected mean default rate of 4.75%, expected recoveries of 20.0% and a portfolio credit enhancement ("PCE") of 16.0%. The expected defaults and recoveries capture Moody's expectations of performance considering the current economic outlook, while the PCE captures the loss Moody's expect the portfolio to suffer in the event of a severe recession scenario. Expected defaults and PCE are parameters used by us to calibrate its lognormal portfolio loss distribution curve and to associate a probability with each potential future loss scenario in its ABSROM cash flow model to rate consumer ABS transactions. The portfolio expected mean default rate of 4.75% is in line with recent Spanish consumer loan transaction average and is based on Moody's assessment of the lifetime expectation for the pool taking into account: (i) historical performance of the loan book of the originator, (ii) good performance track record on recent Banco de Sabadell, S.A. rated ABS consumer deal, (iii) benchmark transactions, and (iv) other qualitative considerations. Portfolio expected recoveries of 20% are higher than recent Spanish consumer loan average and are based on Moody's assessment of the lifetime expectation for the pool taking into account: (i) good historical performance of the loan book of the originator, (ii) good recoveries observed in previous rated ABS consumer deal from Banco de Sabadell, S.A., (ii) benchmark transactions, and (iii) other qualitative considerations such as quality of data provided. The PCE of 16.0% is lower than other Spanish consumer loan peers and is based on Moody's assessment of the pool taking into account the relative ranking to originator peers in the Spanish consumer loan market. The PCE of 16.0% results in an implied coefficient of variation ("CoV") of 50.5%. The principal methodology used in these ratings was "Moody's Approach to Rating Consumer Loan-Backed ABS" published in July 2024. Factors that would lead to an upgrade or downgrade of the ratings: Factors or circumstances that could lead to an upgrade of the ratings of the Notes would be (1) better than expected performance of the underlying collateral; or (2) a lowering of Spain's sovereign risk leading to the removal of the local currency ceiling cap. Factors or circumstances that could lead to a downgrade of the ratings would be (1) worse than expected performance of the underlying collateral; (2) deterioration in the credit quality of Banco de Sabadell, S.A.; or (3) an increase in Spain's sovereign risk. =========== T U R K E Y =========== PEGASUS HAVA: S&P Rates New USD500MM Senior Unsecured Notes 'B+' ---------------------------------------------------------------- S&P Global Ratings assigned its 'B+' issue rating to Pegasus Hava Tasimaciligi A.S. (Pegasus Airlines)'s proposed offering of $500 million (about EUR453 million) of senior unsecured notes maturing in 2031. Pegasus Airlines, a Turkiye-based low-cost carrier, intends to use the proceeds from the issuance to refinance its existing $375 million (EUR359 million equivalent outstanding) 9.25% senior unsecured notes due April 2026, and for general corporate purposes. The proposed transaction improves Pegasus Airlines' liquidity profile by increasing the duration of its debt and adding cash to the balance sheet. Pegasus' profit margins remain superior to its European peers and S&P understands that strong demand and pricing has continued over the crucial summer period. Issue Ratings--Subordination Risk Analysis Capital structure On June 30, 2024, Pegasus Airlines' debt structure comprised about EUR3.2 billion in finance leases, about $354 million in unsecured notes, and about EUR335 million in other unsecured bank borrowings. The proposed $500 million (about EUR453 million) issuance of unsecured notes is expected to increase gross debt and add about EUR100 million of cash to the balance sheet once the existing notes are fully repaid. S&P's 'B+' issue rating on Pegasus Airlines' proposed $500 million and remaining senior unsecured notes is in line with its long-term issuer credit rating on the company since no significant elements of subordination risk are present in the capital structure, excluding all leases as per our methodology. Pegasus Airlines' capital structure does not include any secured debt. Analytical conclusions S&P does not estimate recovery prospects due to its uncertainty about the overall creditor friendliness of Turkiye as a jurisdiction, where most of Pegasus Airlines' assets, including its aircraft, are based. =========================== U N I T E D K I N G D O M =========================== ADLUDIO LIMITED: BDO LLP Named as Joint Administrators ------------------------------------------------------ Adludio Limited was placed into administration proceedings in the High Court of Justice, Business and Property Courts of England and Wales, Insolvency and Companies Court (ChD), Court Number: CR-2024-005006, and William Matthew Tait and Simon Girling of BDO LLP were appointed as joint administrators on Aug. 23, 2024. Adludio Limited offers information technology services. Adludio Limited's registered office is at Building 423 - Sky View (Ro) Argosy Road, Castle Donington, East Midlands Airport, Derby, DE74 2SA to be changed to c/o BDO LLP, 5 Temple Square, Temple Street, Liverpool, L2 5RH. Its principal trading address is at 239 Old Street, London, EC1V 9EY. The joint administrators can be reached at: William Matthew Tait BDO LLP 55 Baker Street, London W1U 7EU -- and -- Simon Girling BDO LLP Bridgewater House, Counterslip Bristol, BS1 6BX For further details, contact: Ellie McGovern E-mail: BRCMTLondonandSouthEast@bdo.co.uk Tel No: 0151 305 5874 B.J. STAINLESS: Path Business Named as Administrators ----------------------------------------------------- B.J. Stainless Fabrications Limited was placed into administration proceedings in the High Court of Justice Business, Court Number: CR-2024-MAN-0010, and Gareth Howarth of Path Business Recovery Limited was appointed as administrator on Aug. 14, 2024. B.J. Stainless manufactures fabricated metal products. B.J. Stainless' registered office address and principal trading address is at B6 & B7 Parkside Lane, Astra Park, Leeds, LS11 5SZ. The administrator can be reached at: Gareth Howarth Path Business Recovery Limited 2nd Floor, 9 Portland Street Manchester, M1 3BE Telephone: 0161 413 0999 For further information, contact: Phillip Lawrence Path Business Recovery Limited 2nd Floor, 9 Portland Street Manchester, M1 3BE Tel No: 0161 413 0999 E-mail: phil.lawrence@pathbr.co.uk BRAITHWAITE CONSTRUCTION: Leonard Curtis Named as Administrators ---------------------------------------------------------------- Braithwaite Construction Group Ltd was placed into administration proceedings in the High Court of Justice, Business and Property Courts of England and Wales, Court Number: CR-2024-005005, and Dane O'Hara and Alex Cadwallader of Leonard Curtis were appointed as administrators on Aug. 23, 2024. Braithwaite Construction focuses on development of building projects and other specialized construction activities. Braithwaite Construction's registered office address is at 198 Edge Lane, Botanic Estate, Liverpool, L7 9LH. The administrators can be reached at: Dane O'Hara Alex Cadwallader Leonard Curtis 5th Floor, Grove House 248a Marylebone Road London, NW1 6BB For further details, contact Joint Administrators E-mail: recovery@leonardcurtis.co.uk Tel No: 020 7535 7000 Alternative contact: Toby Gibbons FOURBAY STRUCTURES: Price Bailey Named as Joint Administrators -------------------------------------------------------------- Fourbay Structures Limited was placed into administration proceedings in In the Royal Courts of Justice, No 004874 of 2024, and Stuart David Morton and Matthew Robert Howard of Price Bailey LLP were appointed as joint administrators on Aug. 15, 2024. Fourbay Structures manufactures fabricated metal products. Fourbay Structures' registered office and principal trading address is at Unit 3 Barford Industrial Estate, Watton Road, Barford, Norwich, NR9 4BG. The joint administrators can be reached at: Stuart David Morton Matthew Robert Howard Price Bailey LLP Anglia House, 6 Central Avenue St Andrews Business Park, Thorpe St Andrew Norwich, NR7 0HR Tel. No: 01603 709330 For further information, contact: Graeme Douglas Price Bailey LLP Anglia House, 6 Central Avenue St Andrews Business Park, Thorpe St Andrew Norwich, NR7 0HR E-mail: Graeme.Douglas@pricebailey.co.uk Tel No: 01603 709330 G J F FABRICATIONS: Grant Thornton Named as Joint Administrators ---------------------------------------------------------------- G J F Fabrications Limited was placed into administration proceedings in the High Court Of Justice, Insolvency & Companies List, No: 000506 of 2024, and Jon L Roden, Rob A Parker and Helen Dale of Grant Thornton UK were appointed as joint administrators on Aug. 20, 2024. Based in the West Midlands, G J F Fabrications has over 25 years of experience of manufacturing a comprehensive range of skips, containers and recycling banks for a number of sectors including construction, waste management and recycling. G J F Fabrications registered office address is at c/o Grant Thornton UK LLP, 11th Floor, Landmark St Peter's Square, 1 Oxford Street, Manchester, M1 4PB. Its principal trading address is at The Chase Link, Lichfield Road, Brownhills, Walsall, WE8 6LA. The joint administrators can be reached at: Jon L Roden Rob A Parker Grant Thornton UK LLP 17th Floor, 103 Colmore Row Birmingham, B3 3AG Tel No: 0121 212 4000 -- and -- Helen Dale Grant Thornton UK LLP Centre City Tower, 7 Hill Street Birmingham, B5 4UU Tel No: 0121 697 6000 For further information, contact: CMU Support Grant Thornton UK LLP 17th Floor, 103 Colmore Row Birmingham, B3 3AG Tel No: 0161 953 6906 E-mail: cmusupport@uk.gt.com H2GO POWER: KRE Corporate Named as Administrators ------------------------------------------------- H2GO Power Ltd was placed into administration proceedings in the Royal Court of Justice, Court Number: CR-2024-004999, and David Taylor and Paul Ellison of KRE Corporate Recovery Limited were appointed as administrators on Aug. 23, 2024. H2GO Power is in the business of research and experimental development on natural sciences and engineering. H2GO Power's registered address is at C/o KRE Corporate Recovery Limited, Unit 8, The Aquarium, 1-7 King Street, Reading, RG1 2AN. Its principal trading address is at Imperial White City Incubator Translation & I-Hub, 84 Wood Lane, White City, London, W12 0BZ. The administrators can be reached at: David Taylor Paul Ellison KRE Corporate Recovery Limited Unit 8, The Aquarium 1-7 King Street, Reading RG1 2AN For further details, contact: Joint Administrators E-mail: info@krecr.co.uk Tel No: 01189 479090 Alternative contact: Alison Young ********* 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 * * *