/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/241112.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 Tuesday, November 12, 2024, Vol. 25, No. 227 Headlines F R A N C E NOVE SAS: EUR417.9MM Bank Debt Trades at 24% Discount G E R M A N Y GHD VERWALTUNG: EUR360MM Bank Debt Trades at 42% Discount I T A L Y GOLDEN GOOSE: Moody's Raises CFR to B1 & Alters Outlook to Stable N E T H E R L A N D S LOPAREX MIDCO: EUR34.4MM Bank Debt Trades at 28% Discount S P A I N ABANCA CORPORACION: Moody's Hikes Subordinated Debt Rating to Ba1 T U R K E Y MERSIN INTERNATIONAL: S&P Upgrades ICR to 'BB', Outlook Stable TAV AIRPORTS: S&P Affirms 'BB-' ICR & Alters Outlook to Developing U N I T E D K I N G D O M CLARA.NET HOLDINGS: GBP80MM Bank Debt Trades at 27% Discount ELSTREE FUNDING 5: S&P Assigns BB+(sf) Rating on Class X Notes GALVAN LONDON: Kallis & Company Named as Joint Administrators INEOS ENTERPRISES: Moody's Cuts CFR to B1, Outlook Stable NMS REALISATIONS: Leonard Curtis Named as Joint Administrators SCIENCE SOLUTIONS: Dow Schofield Named as Joint Administrators - - - - - =========== F R A N C E =========== NOVE SAS: EUR417.9MM Bank Debt Trades at 24% Discount ----------------------------------------------------- Participations in a syndicated loan under which Nove SAS is a borrower were trading in the secondary market around 75.6 cents-on-the-dollar during the week ended Friday, November 8, 2024, according to Bloomberg's Evaluated Pricing service data. The EUR417.9 million Term loan facility is scheduled to mature on December 31, 2046. The amount is fully drawn and outstanding. The Company's country of domicile is France. ============= G E R M A N Y ============= GHD VERWALTUNG: EUR360MM Bank Debt Trades at 42% Discount --------------------------------------------------------- Participations in a syndicated loan under which GHD Verwaltung Gesundheits GmbH Deutschland is a borrower were trading in the secondary market around 57.7 cents-on-the-dollar during the week ended Friday, November 8, 2024, according to Bloomberg's Evaluated Pricing service data. The EUR360 million Term loan facility is scheduled to mature on August 17, 2026. The amount is fully drawn and outstanding. GHD Verwaltung Gesundheits GmbH Deutschland provides healthcare services. The Company offers rehabilitation, wound care, orthopedics, pediatrics, pain management, and other services. GHD Verwaltung Gesundheits conducts its business in Germany. ========= I T A L Y ========= GOLDEN GOOSE: Moody's Raises CFR to B1 & Alters Outlook to Stable ----------------------------------------------------------------- Moody's Ratings has upgraded Golden Goose S.p.A.'s corporate family rating to B1 from B2, and its probability of default rating to B1-PD from B2-PD. Concurrently, Moody's have upgraded the rating on the company's EUR480 million senior secured notes due in May 2027 to B1 from B2. The outlook has been changed to stable from positive. "The rating action reflects the company's solid financial performance in recent years and Moody's expectation that the company will continue to grow and successfully maintain strong financial metrics", said Fabrizio Marchesi, a Moody's Ratings Vice President and lead analyst for the company. "The company's rating also reflects Moody's expectation that the company will refrain from any material releveraging in the future", added Mr. Marchesi. RATINGS RATIONALE Golden Goose has grown strongly over the past three years since the initial rating was assigned, increasing revenue by 60% on a cumulative basis between December 2021 and June 2024. This growth has been organic, due to significant new store openings as well as like-for-like gains. As a result, the company's Moody's-adjusted EBITDA has risen to EUR195 million, on a last-twelve-month (LTM) basis as of June 2024, up from EUR128 million in 2021. This has led to a significant improvement in financial metrics, with Moody's-adjusted leverage of 3.5x, Moody's-adjusted (EBITDA less capex)/interest of 2.5x and Moody's-adjusted free cash flow (FCF)/debt in the mid-single digits on an LTM basis. Although year-over-year revenue gains have slowed from 30% in 2022 to around 10% in the June 2024 LTM period, Moody's forecast that growth will continue over the next 12-18 months at around 9-10% per year, thanks to ongoing new store openings and mid-single digit like-for-like gains, despite challenging wholesale market conditions. This is likely to drive Moody's-adjusted EBITDA to around EUR205 million in 2024 and EUR225 million in 2025, leading to a further improvement in financial metrics with Moody's-adjusted leverage declining towards 3.0x by December 2025 and the company delivering high-single digit Moody's-adjusted FCF/debt per year. Golden Goose's B1 CFR is also supported by the company's brand recognition in the growing luxury sneaker market, with a somewhat diversified channel mix and geographical footprint; an increasing vertically-integrated business model, which enables better control of the supply chain and mitigates social risks; and good liquidity. Concurrently, the rating is constrained by the company's narrow business focus and small scale; exposure to fashion risk as a single-brand company in the highly competitive luxury sneaker market; execution risks associated with the company's fast-paced retail expansion strategy. ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONSIDERATIONS In terms of financial policy, Moody's acknowledge that the company has not paid any dividends to its owners since the 2020 leverage buyout, despite having achieved significant deleveraging. Instead, Permira, the private equity owner, has favoured investments to support business growth, notably the company's store network expansion and acquisitions of manufacturing suppliers for higher vertical integration. In addition, in 2024 the company announced its intention to IPO, though the process has been postponed. Moody's will assess the potential use of proceeds and corporate governance changes if and when such listing materialises. The current B1 rating and stable outlook assumes that the company will continue to invest cash flow into store expansion and manufacturing capacities, while maintaining good liquidity and a balanced financial policy. The latter includes refraining from any debt-funded shareholder distributions. LIQUIDITY Golden Goose's liquidity is good, supported by a large cash balance of EUR184 million and access to a EUR63.7 million revolving credit facility (RCF) maturing in December 2026, which was fully available as of June 30, 2024. Despite material capital spending on new store openings, Moody's expect the company to generate at least EUR55-65 million of Moody's-adjusted FCF per year from 2024 onwards. There are no significant debt maturities apart from the aforementioned RCF and the company's senior secured notes, which are due in May 2027. The RCF is subject to a net super-senior leverage covenant of 8.35x, which is tested if drawings exceed 40%. STRUCTURAL CONSIDERATIONS The B1 rating on the EUR480 million senior secured notes due 2027 reflects their presence as the largest debt instrument in the capital structure, ranking behind the EUR63.7 million super-senior RCF. The notes are not guaranteed. Both instruments are secured, on a first priority basis, by pledges in the issuer's share capital. However, the notes are contractually subordinated to the RCF with respect to the collateral enforcement proceeds. The company's B1-PD probability of default rating is at the same level as the CFR, reflecting Moody's assumption of a 50% family recovery rate. RATING OUTLOOK The stable outlook reflects Moody's expectations that Golden Goose will continue to grow revenue and EBITDA, driven by controlled retail network as well as positive like-for-like sales, such that its Moody's-adjusted financial metrics continue to improve. The stable outlook also incorporates Moody's assumption that the company will maintain good FCF and a balanced financial policy, including refraining from any debt-funded shareholder distributions as well as refinancing its senior secured notes well-ahead of their scheduled maturity. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Further positive pressure is unlikely over the next 12-18 months but could develop over time if Golden Goose generates sustained revenue growth and EBITDA growth such that it significantly increases its size and scale as well as materially improves its diversification. Positive rating action would also require a clearly articulated and formal financial policy which targets leverage levels that are materially below current levels, as well as a demonstrated track record of delivery of this policy. Moody's could downgrade Golden Goose's ratings if the company's operating performance deteriorates as a result of, for instance, a decline in like-for-like sales or a decrease in profit margins. Moody's could also downgrade the ratings if the company were unable to maintain good liquidity and a healthy cash balance, or its financial policy became more aggressive, such that Moody's-adjusted debt/EBITDA does not remain below 4.0x or Moody's-adjusted FCF generation deteriorates, on a sustained basis. Negative pressure could also develop if the company were to pursue a more aggressive financial policy. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Retail and Apparel published in November 2023. COMPANY PROFILE Headquartered in Venice, Italy, Golden Goose S.p.A. is an Italian apparel company that designs, manufactures and distributes casual footwear, ready-to-wear products and accessories. Golden Goose's main products, representing around 90% of sales, are luxury sneakers. Founded in 2000, the company distributes its products through a retail channel with a network of 191 directly operated stores (DOS) as of December 2023, wholesale customers such as well-known department stores, digital channel with partnerships with online retailers and its own website. In the 12 months to June 30, 2024, the company reported EUR617 million of revenue and EUR211 million of EBITDA (as adjusted by the company, after IFRS 16). Golden Goose is owned by the private equity company Permira, which acquired a majority stake in 2020. ===================== N E T H E R L A N D S ===================== LOPAREX MIDCO: EUR34.4MM Bank Debt Trades at 28% Discount --------------------------------------------------------- Participations in a syndicated loan under which Loparex Midco BV is a borrower were trading in the secondary market around 71.8 cents-on-the-dollar during the week ended Friday, November 8, 2024, according to Bloomberg's Evaluated Pricing service data. The EUR34.4 million Term loan facility is scheduled to mature on February 1, 2027. The amount is fully drawn and outstanding. Loparex is a provider of release liners. Based in the Netherlands, Loparex Midco B.V. operates as a financial holding company incorporated in 2019. The majority of the Company's end market sales come from graphic arts, tapes, industrial, and medical. Labelstock, hygiene, and composites accounts for a smaller portion of end market sales. ========= S P A I N ========= ABANCA CORPORACION: Moody's Hikes Subordinated Debt Rating to Ba1 ----------------------------------------------------------------- Moody's Ratings has upgraded the long-term deposit and senior unsecured debt ratings of ABANCA Corporacion Bancaria, S.A. (Abanca) to Baa2 from Baa3. The outlook on these ratings remains stable. At the same time, Moody's have upgraded (1) the bank's Baseline Credit Assessment (BCA) and Adjusted BCA to baa3 from ba1; (2) the subordinated debt rating to Ba1 from Ba2; (3) the short-term deposit ratings to P-2 from P-3; and (4) the long-term Counterparty Risk Assessment (CR Assessment) and Counterparty Risk Ratings (CRRs) to A3(cr) and A3 from Baa1(cr) and Baa1 respectively. Moody's have also affirmed the bank's short-term CR Assessment and CRR at P-2(cr) and P-2 respectively. RATINGS RATIONALE -- RATIONALE FOR THE BCA UPGRADE The upgrade of Abanca's BCA to baa3 from ba1 is driven by the significant improvement of the bank's profitability which, coupled with the bank's decision to lower the pay-out ratio to 25% from 40% for the net profit generated in 2023 and 2024, has led to a reinforcement of the bank's capitalization which Moody's expect to continue during the coming months. Abanca's profitability has substantially benefited from the increase in interest rates initiated in late 2022, which has led to a widening of its customer margin by almost 200 bps between Q2 2022 and Q2 2024. Boosted by the increase in net interest income, the bank's return on assets (ROA calculated as net income over tangible assets) grew to 1.1% in 1H2024, which stands among the highest within Spanish peers. Going forward Moody's expect Abanca's profitability to stabilize at more moderate levels of ROA between 0.5% and 0.75% in light of the central bank's ongoing policy easing, however well above its historical levels (average ROA of 0.3% in the 2019-22 period). Margin contraction will be partly compensated by improved business dynamics from a recovery in loan demand, and by stronger operational efficiency from the materialization of synergies stemming from the bank's recent acquisition. The retention of a large part of the net profit generated in 2023 and 2024 has led to a material improvement in the bank's capitalization according to Moody's key capital metric, tangible common equity (TCE)/risk-weighted assets. Although the TCE ratio remains weak, weighed down by a high exposure to deferred tax assets which amounted to 82% of the bank's Common Equity Tier 1 (CET1) capital as of June 2024, the ratio improved substantially to 8.7% from 7.4% during the 12 months ended in June 2024. Moody's expect Abanca's internal capital generation to remain strong during 2H2024, allowing the bank to absorb the capital impact from the integration of Portuguese lender Eurobic in July (which Moody's estimate at around 50 bps) and maintain the TCE ratio above 8% over the outlook period. Moody's view is underpinned by the bank's stated reference level of 13% for the common equity tier 1 (CET1) ratio. Such ratio stood at 12.8% as of the end of 3Q 2024. The rating upgrade is also underpinned by the bank's good asset quality performance, despite pressures stemming from the high cost of living and more elevated debt burden for households and corporates since 2022. Abanca's problem loan ratio was 2.6% as of September 2024 which, excluding the integration of Eurobic in July which has a worse asset quality, has remained broadly stable for several years. -- RATIONALE FOR THE UPGRADE OF THE DEPOSIT AND SENIOR UNSECURED DEBT RATINGS The upgrade of Abanca's long-term deposit and senior unsecured debt ratings to Baa2 from Baa3 reflects: (1) the upgrade of the bank's BCA and Adjusted BCA to baa3 from ba1; (2) the unchanged outcome of Moody's Advanced Loss Given Failure (LGF) analysis which results in a one-notch of uplift for both instruments; and (3) Moody's assessment of low probability of government support, which results in no further uplift. -- RATIONALE FOR THE STABLE OUTLOOK The stable outlook on Abanca's long-term deposit and senior unsecured debt ratings reflects Moody's view that the bank's expected credit performance over the next 12-18 months, which assumes a moderate deterioration in profitability, is already captured in the current ratings. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Abanca's BCA could be upgraded principally as a result of a further material improvement of Moody's-calculated capital ratio. Because the bank's deposit and senior unsecured debt ratings are linked to its BCA, a positive change in its BCA would likely lead to a rating upgrade. The deposit and senior unsecured debt ratings could also be upgraded following a significant increase in the stock of more junior bail-in-able liabilities. Abanca's BCA could be principally downgraded if there were an increase in problem loans significantly above Moody's current expectations, or if the bank engages in further inorganic growth which entails an erosion of its financial position. Abanca's ratings could also be downgraded by changes in the liability structure that indicate a higher loss given failure to be faced by deposits or debt instruments. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Banks Methodology published in March 2024. =========== T U R K E Y =========== MERSIN INTERNATIONAL: S&P Upgrades ICR to 'BB', Outlook Stable -------------------------------------------------------------- S&P Global Ratings raised to 'BB' from 'BB-' its long-term issuer credit rating and issue ratings on Mersin Uluslararasi Liman Isletmeciligi A.S. (Mersin International Port; MIP) and on its senior unsecured debt. The stable outlook mirrors that on the sovereign. It also factors in our expectation that MIP will continue passing our sovereign default stress test. S&P said, "The upgrade of MIP follows our rating action on Turkiye. On Nov. 1, 2024, we raised our unsolicited long-term sovereign credit ratings on Turkiye to 'BB-' from 'B+'. The outlook is stable. At the same time, we affirmed our unsolicited 'B' short-term sovereign credit ratings. Finally, we revised our T&C assessment to 'BB' from 'BB-'. S&P said, "We rate MIP one notch above the 'BB-' long-term foreign currency sovereign rating on Turkiye because MIP passes our hypothetical sovereign default stress test. The test includes both economic stress and potential currency devaluation according to our "Ratings Above The Sovereign--Corporate And Government Ratings: Methodology And Assumptions." Under such a scenario, the company meets our liquidity requirement--namely a ratio of sources to uses above 1x. We believe MIP will pass our stress test on a sustainable basis, thanks to its strong cash flow generation and prudent liability management, with a positive track record of refinancing maturities ahead of the 12-month timeframe. Our assessment of MIP's SACP at 'bbb-' reflects our expectation that the company will maintain solid operating and financial performance, with S&P Global Ratings-adjusted debt to EBITDA of 2.0x-2.5x, coupled with adjusted funds from operations (FFO) to debt of more than 30% on a three-year weighted-average basis. "However, we cap our long-term foreign currency rating on MIP at the level of our 'BB-' T&C assessment on Turkiye. Even though most of MIP's cash position is held in U.S. dollars and kept in offshore accounts--with 60% of revenue collected in U.S. dollars and the remainder in Turkish lira and converted to hard currency--revenue is collected in onshore accounts. This exposes MIP to Turkiye's monetary, financial, and economic policies. These policies could lead to obstacles in repatriating export proceeds and converting them to local currency, restrict MIP's access to foreign currency and stop the port converting local revenues to hard currency, and limit money withdrawal to service foreign senior debt. Furthermore, nearly half of the business comes from import volumes, which are intrinsically linked to the industrialized cities surrounding MIP and reliant on domestic trends and dynamics. "The stable outlook on Mersin reflects that on Turkiye. MIP displays stronger stand-alone credit quality than the sovereign and we expect it to continue passing our hypothetical stress test. However, our ratings on MIP are capped by our 'BB' T&C assessment on Turkiye, where MIP has all its operations and generates all its revenue. "We could revise downward the SACP if FFO to debt deteriorates below 30% and debt to EBITDA rises above 3x over a prolonged period. This could, for instance, occur if Mersin does not follow a sufficiently credit-supportive dividend policy during the 2024-2026 expansionary capital expenditure (capex) period. However, such a deterioration of credit metrics as unlikely in our view and would not in itself lead us to downgrade Mersin. "We could also lower the ratings following a negative rating action on the sovereign. "We will take a positive rating action on MIP if we revise upward our sovereign T&C assessment or revise our outlook on Turkiye to positive, assuming MIP continues to pass our hypothetical sovereign default stress scenarios." TAV AIRPORTS: S&P Affirms 'BB-' ICR & Alters Outlook to Developing ------------------------------------------------------------------ S&P Global Ratings revised the outlook on TAV Havalimanlari Holding A.S. to developing from stable and affirmed its 'BB-' issuer credit rating. S&P also affirmed its 'B+' issue rating on TAV's 8.5% US$400 million senior unsecured notes. S&P said, "The developing outlook reflects that we could lower the rating on TAV if the sizeable upcoming debt maturity is not refinanced by the first quarter 2025. At the same time, if this liquidity risk is resolved, we see upside potential for the ratings if expected deleveraging materializes and the group's liquidity sustains a sovereign stress test. "We see sizable upcoming debt maturities in less than 12 months within the TAV group, particularly at 50% co-controlled flagship airport Antalya. Antalya's estimated EUR2.4 billion-EUR2.5 billion bridge facility due September 2025 is 50% guaranteed by TAV, which co-controls this flagship airport (35.5 million passengers in 2023) together with Fraport AG. This is a sizeable debt amount for the group, which generated EUR539 million S&P Global Ratings-adjusted EBITDA in 2023, including our proportional consolidation of Antalya (about EUR130 million cash proportional EBITDA in 2023). Management has made some tangible steps toward refinancing. Nevertheless, pending closing, we see the refinancing risk as a relevant credit consideration for the group, given the sizeable debt amount, relatively near-term maturity, and still volatile, albeit improving, macroeconomic conditions in Turkey, which could impact refinancing terms. The bridge facility was provided by a diversified pool of multilateral and commercial banks to cofinance the upfront payment of Antalya's new concession (January 2027-December 2051) as well as investments in terminal and air side expansions (EUR750 million). We understand construction is on track (91% was completed as of Sept. 30, 2024) and opening is expected in the first quarter 2025, while traffic is about 5.5% above 2019 levels in the first nine months of this year. In addition to Antalya, another construction bridge facility at fully owned Ankara airport (about EUR213 million as of Sept. 30, 2024) is also due in December 2025 and we anticipate it will be refinanced in the next few months." The sovereign upgrade on Turkiye to 'BB-' signals potential rating upside for TAV's ratings, as long as the group deleverages toward 10% S&P Global Ratings-adjusted FFO to debt and its liquidity buffer, including offshore accounts, is sufficient to sustain a sovereign stress test. The rating on TAV is now at the same level as the sovereign rating on Turkiye. S&P said, "If the Antalya refinancing risk is resolved, we see upside potential for TAV's ratings. For an upgrade to materialize we would require comfort over the group's ability to strengthen S&P Global Ratings-adjusted FFO to debt toward 10% and to withstand a theoretical sovereign stress scenario thanks to offshore cash accounts and a manageable maturity profile. TAV's potential to be rated above the sovereign is also supported by the group's geographically diversified portfolio. This includes Almaty airport in Kazakhstan (sovereign credit rating, BBB-/Stable/A-3) and Tbilisi and Batumi airports in Georgia (sovereign credit rating, BB/Stable/B), whose sovereign ratings are currently higher than that on Turkiye." S&P said, "Extraordinary support from TAV's largest shareholder AdP (46% stake) provides some stability to the rating, although we expect the current liquidity pressures to be temporary and be managed without any formal group support from AdP. We believe TAV is a moderately important subsidiary within the AdP group (A-/Stable), playing an important role in the international strategy of its parent. Historically, it has received flexible shareholder support, particularly for acquisitions, and we believe that being part of AdP group provides some credit benefit to TAV. We reflect this in a one-notch uplift to TAV's revised stand-alone credit profile (SACP), as our T&C assessment on Turkiye is now at 'BB' (and higher than TAV's SACP). We nevertheless expect the current liquidity risk on Antalya--and therefore TAV--to be only temporary and be managed without formal group support at asset level." Rating upside would require visibility over the group's ability to manage investments, including the newly announced capital expenditure (capex) at Almaty, while strengthening S&P Global Ratings-adjusted FFO to debt toward 10%. The group announced an expected EUR150 million-EUR300 million new air side investments at Almaty airport in 2025-2028, pending tariff negotiations. This follows the investments completed on the new terminal (EUR226 million) which entered in operation in June 2024. S&P said, "We still expect free operating cash flows (FOCFs) will return to positive after the large investments executed in 2023-2024 (in addition to Almaty, about EUR1 billion at Antalya and Ankara) and we expect to have more visibility on the new capex at Almaty and any tariff increase that could maintain metrics commensurate with a rating upside. Revenue in the first nine months of 2024 increased by 25% compared to the same period in 2023 on the back of traffic growth and price increases. Traffic continues to perform solidly, at about 7% above 2019 levels at the end of the third quarter 2024 (excluding Zagreb and Medinah which are equity consolidated), despite some slow down in September mainly due to the current geopolitical situation in the Middle East. TAV remains exposed to soft currency risk, primarily through operating costs (34% of the group's operating costs were exposed to Turkish lira fluctuations in 2023). Nevertheless, this risk is partially mitigated through revenue generation, which in 2023 was about 72% either in or indexed to hard currencies." The developing outlook reflects that S&P could lower the ratings on TAV if sizeable upcoming debt maturity at 50% owned Antalya is not refinanced by the first months of 2025. S&P said, "At the same time, our developing outlook signals that if and when this liquidity risk is lifted, we see a positive potential for TAV's ratings, supported by improved sovereign conditions and the company's deleveraging efforts. "We could lower the ratings on TAV if we have indications that the refinancing may protract beyond the first quarter 2025, absent any formal extraordinary group support provided to TAV from ADP." S&P could revise its outlook to stable if-after the refinancing is completed-we saw some of the following: -- Inability to recover adjusted FFO to debt toward 10% by 2025, due to for example a larger capex plan, not compensated by tariff increase or traffic performance, that could postpone the expected deleveraging path; -- The group's appetite for acquisitions, which could increase leverage beyond S&P's expectations; or -- Inability to maintain sufficient offshore liquidity reserves and cash flow generation, especially from assets in stronger countries than Turkiye, to be rated above the sovereign rating on Turkiye. S&P could take a positive rating action if, following TAV successfully refinancing its sizeable debt maturities, particularly Antalya's bridge facility due September 2025, the group demonstrates the ability to restore FFO to debt toward 10% by 2025 and positive FOCF generation. The rating upside is also contingent on the group's ability to withstand a theoretical sovereign stress scenario thanks to its international diversification, cash flow generation from assets in higher rated countries, cash reserves on offshore accounts, and manageable debt maturity profile. S&P said, "We assess ESG factors as having a neutral consideration on our credit analysis of TAV. Traffic has largely recovered to prepandemic levels and we do not anticipate government policies that could limit traffic growth at operated airports. Even if the sector is negatively exposed to health and safety risks (such as pandemic outbreaks) and geopolitical considerations can affect tourists' travel decisions, we reflect favorable growth outlooks on TAV's portfolio in our forecasts. From a governance perspective, although TAV is based in a high-risk country, our neutral assessment reflects the tangible links and oversight by ADP." =========================== U N I T E D K I N G D O M =========================== CLARA.NET HOLDINGS: GBP80MM Bank Debt Trades at 27% Discount ------------------------------------------------------------ Participations in a syndicated loan under which Clara.Net Holdings Ltd is a borrower were trading in the secondary market around 73.2 cents-on-the-dollar during the week ended Friday, November 8, 2024, according to Bloomberg's Evaluated Pricing service data. The GBP80 million Term loan facility is scheduled to mature on July 10, 2028. The amount is fully drawn and outstanding. Claranet is a medium-sized provider of managed IT services primarily focusing on cloud-related services for small and medium-sized companies and the sub-enterprise customer segment. It also offers cybersecurity, connectivity and workplace solutions. The Company's country of domicile is the United Kingdom. ELSTREE FUNDING 5: S&P Assigns BB+(sf) Rating on Class X Notes -------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Elstree Funding No. 5 PLC's class A to X notes. At closing, Elstree Funding No. 5 also issued unrated RC1 and RC2 residual certificates. S&P's ratings address timely receipt of interest and ultimate repayment of principal on the class A notes, the ultimate payment of principal on the class X notes, and the ultimate payment of interest and principal on all other rated notes. Of the loans in the pool, 47.3% are first-lien buy-to-let (BTL) mortgages, 51.9% are second-lien owner-occupied mortgages, and 0.8% are second-lien BTL mortgage loans. The loans in the pool were originated by West One Secured Loans Ltd. (WOSL), which is a wholly owned subsidiary of Enra Specialist Finance Ltd. (Enra), between 2020 and 2024, with 93.4% originated in 2024. Most of the second-lien owner-occupied pool is considered to be prime, with 97.1% originated under WOSL's "prime plus" or "prime" product ranges and the remainder categorized as "near prime". The near prime loans are categorized by lower credit scores and potentially more adverse credit markers, such as county court judgments, than those under the prime or prime plus ranges. The class A and B-Dfrd notes benefit from liquidity provided by a liquidity reserve fund, and principal can be used to pay senior fees and interest on the rated notes subject to various conditions. Credit enhancement for the rated notes will consist of subordination and a general reserve fund. The transaction incorporates a swap to hedge the mismatch between the notes, which pay a coupon based on the compounded daily Sterling Overnight Index Average, and the portion of loans, which pay fixed-rate interest before reversion. At closing, the issuer used the issuance proceeds to purchase the full beneficial interest in the mortgage loans from the seller. The issuer grants security over all its assets in favor of the security trustee. WOSL services the portfolio. S&P said, "There are no rating constraints in the transaction under our counterparty, operational risk, or structured finance sovereign risk criteria. We consider the issuer to be bankruptcy remote. "Our current macroeconomic forecasts and forward-looking view of the U.K. residential mortgage market were considered in our ratings through additional cash flow sensitivities." Class Rating Amount (mil. GBP) A AAA (sf) 216.604 B-Dfrd AA+ (sf) 12.068 C-Dfrd AA- (sf) 10.799 D-Dfrd A (sf) 6.987 E-Dfrd BBB (sf) 5.717 F-Dfrd BB (sf) 1.907 X BB+ (sf) 5.716 RC1 Residual Certificates NR N/A RC2 Residual Certificates NR N/A NR--Not rated. N/A--Not applicable. GALVAN LONDON: Kallis & Company Named as Joint Administrators ------------------------------------------------------------- Galvan London Limited was placed into administration proceedings in the Court of Justice, Court Number: CR-2024-006411, and Andreas Arakapiotis of Kallis & Company was appointed as administrators on October 25, 2024. Galvan London specializes in retail sale of clothing in specialised stores. Its registered office is at 10 Orange Street, Haymarket, London, WC2H 7DQ. The joint administrators can be reached at: Andreas Arakapiotis Kallis & Company Mountview Court 1148 High Road Whetstone, London N20 0RA For further details, contact: Antonis Stylianou Email: antonis@kallis.co.uk Tel No: 020-8446-6699 INEOS ENTERPRISES: Moody's Cuts CFR to B1, Outlook Stable --------------------------------------------------------- Moody's Ratings has downgraded INEOS Enterprises Holdings Limited's corporate family rating to B1 from Ba3. Concomitantly, Moody's have downgraded INEOS Enterprises' probability of default rating to B1-PD from Ba3-PD, and the ratings of its senior secured term loans issued by INEOS ENTERPRISES HOLDINGS II LIMITED and INEOS ENTERPRISES HOLDINGS US FINCO LLC to B1 from Ba3. The outlook on all ratings has changed to stable from negative for all entities. RATINGS RATIONALE The rating action reflects INEOS Enterprises' (IE) continued weak performance during 2024, as well as the expectation of slow earnings recovery throughout 2025 and into 2026. Due to the cyclicality of most of its businesses and the weak global trading environment over the last two years, IE's Moody's-adjusted gross leverage now stands at 8.2x for the last twelve-month (LTM) period ending June 2024, which Moody's expect to reduce towards 5.5x over the next 12-18 months. Of the five IE businesses, only the Composites one has shown earnings resilience, with a stable company-adjusted underlying EBITDA of around EUR185 million, thanks to a portfolio of differentiated and highly customised products. Despite some substantial drop since end 2022 due to sustained weak titanium dioxide demand in the North American market, earnings in the Pigments business remain meaningful. The Composites and Pigments businesses have generated between them nearly all of IE's earnings for the LTM. In the meanwhile, the Solvents and Chemical Intermediates businesses have turned loss-making or break-even from weak demand and imports from cost-advantaged regions, particularly in Europe. The Hygienics business remains loss-making but stable. Although Moody's expect some improvements from their current trough, earnings recovery will be slow, with underlying EBITDA improving to around EUR330 million for 2024 and around EUR395 million for 2025 compared with EUR283 million for the LTM. As a result, interest coverage will also stay weak: Moody's-adjusted (EBITDA-CAPEX)/interest ratio stands at 0.8x for the LTM, and Moody's expect it to improve to 1.1x and 1.3x at end 2024 and end 2025 respectively, through higher earnings and lower capital spending (capex) as the company is reducing its capex to preserve cash. As a result of the weak interest cover, cash generation will be constrained, with Moody's-adjusted free cash flow (FCF), after working capital and capex, broadly neutral. Moody's expect return to shareholders over this period to be nil or marginal. ESG CONSIDERATIONS IE's reported net leverage has been above the company's public "medium-term" net leverage target of 3x through the cycle for a year, standing at 5.8x for the LTM. Return to shareholders include interests paid in relation to a subordinated related party loan that Moody's treat as equity, with payments (including transaction costs) totaling EUR25 million between May 2023 and January 2024 that Moody's see as equivalent to dividends; the company has also repaid EUR333 million of subordinated related party loan principal. The company has paid no actual dividends since 2018. In line with the broader chemicals sector, IE has environmental and social risks related to the production non-recyclable products, energy intensive processes, and the use of hazardous feedstocks. LIQUIDITY IE's liquidity is adequate. As at end June 2024, the company had EUR295 million of cash on balance sheet, EUR155 million available under its EUR250 million trade receivables securitisation facility expiring in January 2027, and about EUR17 million available under INEOS Tyssedal's EUR55 million equivalent revolving working capital facility due March 2027. Moody's expect cumulative FCF over the next 18 months to be broadly neutral. IE's main debt maturities are due in 2030 when EUR1.8 billion equivalent of senior secured term loans mature. The senior secured term loans have a net total leverage covenant for which Moody's expect IE to remain in compliance at all times. STRUCTURAL CONSIDERATIONS IE's capital structure consists mostly of term loans issued by INEOS ENTERPRISES HOLDINGS II LIMITED, with EUR1,000 million of principal, and INEOS ENTERPRISES HOLDINGS US FINCO LLC, denominated in USD with EUR800 million equivalent of principal. The loans are rated B1, in line with the corporate family rating reflecting that they comprise the largest proportion of the capital structure. The term loans are senior secured obligations of the borrowers and benefit, to the extent legally possible, from the first-ranking guarantees from all material subsidiaries representing at least 85% of the restricted group's consolidated EBITDA and assets. RATING OUTLOOK The stable outlook reflects Moody's expectation that INEOS Enterprises' earnings will recover, albeit slowly, over the next 12-18 months, leading to a reduction in leverage, while its free cash flow, as defined by Moody's, will be broadly neutral, resulting in its liquidity remaining adequate. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Positive rating pressure could develop if on a sustained and Moody's-adjusted basis: -- gross debt/EBITDA is below 4.5x though the cycle; -- (EBITDA-CAPEX)/interest is above 2x through the cycle; and -- free cash flow/debt is in the high single-digits percentages. Negative rating pressure could develop if on a sustained and Moody's-adjusted basis: -- gross debt/EBITDA remains above 5.5x for an extended period; -- (EBITDA-CAPEX)/interest remains below 1x for an extended period; or -- free cash flow is substantially negative. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Chemicals published in October 2023. COMPANY PROFILE Headquartered in the UK, INEOS Enterprises Holding Limited (IE) is a global manufacturer of chemicals including titanium dioxide pigments, potassium hydroxide, sulfur dioxide, polyvinyl chloride (PVC) compounds, epoxy vinyl ester resin, gelcoat, unsaturated polyester resin, oxygenated solvents, and other intermediates. The company's products constitute inputs for products in a broad range of end-markets such as paints, coatings, construction, automotive, packaging, and medical devices. IE runs 30 manufacturing sites, of which 27 are fully-owned, across the Europe, North America, Asia, and South America which account respectively for 51%, 44%, 4% in Asia, and 1% of the company's total production capacity as of end December 2023. IE operates through five distinct businesses: 1) Pigments, 2) Composites, 3) Solvents, 4) Intermediates, and 5) Hygienics. For the last twelve-month (LTM) period ended June 2024, IE reported EUR2.4 billion of revenue and EUR283 million of company-adjusted underlying EBITDA. NMS REALISATIONS: Leonard Curtis Named as Joint Administrators -------------------------------------------------------------- NMS Realisations Limited was placed in administration proceedings in the High Court of Justice Business and Property Courts in Manchester, Insolvency & Companies List (ChD), Court Number: CR-2024-MAN-001388, and Mike Dillon and Rochelle Schofield of Leonard Curtis were appointed as administrators on Oct. 29, 2024. NMS Realisations specializes in cleaning and caretaking solutions. Its registered office and principal trading address is at Annex Ground Floor, 8 Garden Lane, Chester, Cheshire, CH1 4EN. The joint administrators can be reached at: Mike Dillon Rochelle Schofield Leonard Curtis Riverside House Irwell Street Manchester, M3 5EN For further information, contact: The Joint Administrators Email: recovery@leonardcurtis.co.uk Tel No: 0161 831 9999 Alternative contact: Helen Hales SCIENCE SOLUTIONS: Dow Schofield Named as Joint Administrators -------------------------------------------------------------- Science Solutions Recruitment Limited was placed in administration proceedings in the High Court of Justice Business and Property Courts in Manchester, Company and Insolvency List, Court Number: CR-2024-MAN-001331, and Lisa Marie Moxon and Christopher Benjamin Barrett of Dow Schofield Watts Business Recovery LLP were appointed as administrators on Oct. 24, 2024. Science Solutions trades as Stem Solutions. Science Solutions is a company that specializes in finding scientific professionals for businesses, providing both permanent and temporary/contract staffing options across various scientific fields, essentially acting as a dedicated recruitment agency for the science industry. Its registered office is at 7400 Daresbury Park, Daresbury, Warrington, WA4 4BS (formerly) Mynshull House, 78 Churchgate, Stockport, Cheshire, SK1 1YJ. Its principal trading address is at Suite C Chadwick House, Birchwood Business Park, Warrington, WA3 6AE. The joint administrators can be reached at: Lisa Marie Moxo Christopher Benjamin Barrett Dow Schofield Watts Business Recovery LLP 7400 Daresbury Park, Daresbury Warrington, WA4 4BS For further details, contact: The Joint Administrators Tel No: 01928 378014 Alternative contact: Laura Hewitt Email: laura@dswrecovery.com ********* 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. 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