/raid1/www/Hosts/bankrupt/TCREUR_Public/241206.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
Friday, December 6, 2024, Vol. 25, No. 245
Headlines
F R A N C E
EXPLEO GROUP: S&P Alters Outlook to Stable, Affirms 'B-' ICR
I R E L A N D
ADAGIO XI: Fitch Assigns 'B-sf' Final Rating to Class F Notes
CARLYLE EURO 2013-1: Moody's Affirms B3 Rating on EUR10MM E-R Notes
CVC CORDATUS XXVI: Fitch Assigns B-(EXP)sf Rating to Cl. F-R Notes
CVC CORDATUS XXVI: S&P Assigns Prelim B-(sf) Rating to F-R Notes
HARVEST CLO IX: Moody's Hikes Rating on EUR34.3MM E-R Notes to Ba1
OCP EURO 2024-11: Fitch Assigns 'B-sf' Final Rating to Cl. F Notes
OCP EURO 2024-11: S&P Assigns B- (sf) Rating to Class F Notes
WATERSTOWN PARK: Fitch Assigns 'B-(EXP)sf' Rating to Class F Notes
WATERSTOWN PARK: S&P Assigns Prelim B- (sf) Rating to Cl. F Notes
L U X E M B O U R G
MILLICOM INTERNATIONAL: Fitch Affirms 'BB+' IDR, Outlook Stable
N E T H E R L A N D S
LUMILEDS HOLDING: S&P Places 'CCC+' ICR on CreditWatch Negative
P O R T U G A L
MADEIRA: Moody's Affirms Ba1 Issuer Rating, Alters Outlook to Pos.
R U S S I A
UZAGROSUGURTA: Fitch Puts on Watch Neg & Withdraws 'BB-' IFS Rating
S P A I N
LUNA III SARL: Moody's Hikes CFR to Ba3 & Alters Outlook to Stable
MADRID RMBS I: S&P Raises Class E Notes Rating to 'B+ (sf)'
S W E D E N
HEIMSTADEN BOSTAD: Fitch Puts 'BB' Final Rating to EUR500M Hybrid
U K R A I N E
KERNEL HOLDING: S&P Upgrades LT ICR to 'CCC', Outlook Negative
U N I T E D K I N G D O M
ATOM BREWING: Lewis Business Named as Joint Administrators
GALAXY BIDCO: Moody's Gives B2 Rating to New Senior Secured Bonds
KIDSON HOMES: MHA Named as Administrators
TRANSFORM HEALTHCARE: Interpath Ltd Named as Joint Administrators
VACATION FINANCE: Quantuma Advisory Named as Administrators
X X X X X X X X
[*] BOOK REVIEW: Charles F. Kettering: A Biography
- - - - -
===========
F R A N C E
===========
EXPLEO GROUP: S&P Alters Outlook to Stable, Affirms 'B-' ICR
------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from positive and
affirmed its 'B-' long-term issuer credit rating on France-based
engineering and technology service provider Expleo Group and its
subsidiaries, Assystem Technologies and Expleo Services SASU. S&P's
issue-level ratings are unchanged.
S&P said, "The stable outlook reflects our expectation of modest
revenue growth and moderate EBITDA margin improvement supported by
cost reduction efforts in 2025which should help reduce debt to
EBITDA to about 6.8x-7.3x, from our expectation of 7.9x in 2024,
and close to breakeven free operating cash flow (FOCF).
"The outlook revision reflects weakening credit metrics amid a
challenging operating environment. We previously expected Expleo
Group to post revenue growth of 12% in 2024, supported by organic
growth and complemented by new acquisitions. But auto market
conditions in Europe have been weakened by Chinese competition on
electric vehicles, the stagnating economic environment, and
mounting geopolitical uncertainty. These factors combined have
resulted in cost reduction initiatives and weaker demand from
original equipment manufacturers (OEMs). These unfavorable and
uncertain economic conditions have also hit demand from other
sectors, such as financial services, transportation, and
manufacturing clients. This has led to weaker-than-expected
operating performance for Expleo as these clients have cut costs
and reduced their business volumes with the group. We now expect
stagnating revenue growth (just above 1%) in 2024 and EBITDA margin
contraction of about 110 basis points to 8.3% due to increased
bench-time for consultants. Despite cost saving initiatives to
preserve margins, these efforts have not fully offset the negative
impact of reduced volumes on fixed-cost absorption. In addition,
higher-than-expected exceptional costs have impaired profitability.
For 2025, we forecast revenue will increase modestly by 3%-4%, and
margins will recover to about 9%-9.5% as Expleo adjusts its cost
base to lower demand. Nevertheless, the uncertain market outlook
represents a downside risk to our base-case scenario.
"We expect an uptick in leverage and persistently negative FOCF
from earnings contraction in 2024. With lower volumes and higher
cost, we forecast weaker earnings will push up debt to EBITDA to
about 7.9x in 2024 and given the unfavorable operating environment,
we expect that leverage will remain high at about 6.8x-7.3x in
2025. Unlike previous expectations, we project negative FOCF will
persist in 2024 on lower EBITDA generation, elevated working
capital outflows, and high interest costs. This will also result in
weakening funds from operations (FFO) cash interest coverage to
below 1.5x in 2024, recovering to about 1.7x-2.0x in 2025. We now
expect the group FOCF will be close to breakeven in 2025, on EBITDA
recovery and improved control on working capital in a low revenue
growth context. In our view, although our liquidity assessment
remains adequate, any deterioration in FOCF could impair the
group's liquidity position.
"As the group focuses on improving its operating performance in the
coming 12 months, we no longer expect Expleo to pursue new
acquisitions. Although external growth remains part of the group's
medium-term growth strategy, we expect its financial sponsor will
focus on restoring Expleo's organic growth and profitability before
considering new acquisitions. This also led us to revise our base
case to include more modest revenue growth assumptions.
"Expleo's relatively modest size and high client concentration
constrain our rating. As demonstrated with the group's current
operating underperformance, these business risk factors can make
the group vulnerable to deteriorating trading conditions, and lead
to cash flow depletion. Expleo has reported negative FOCF over the
past several years and its ability to generate positive cash flows
could be challenged by continued high interest rates and uncertain
macroeconomic outlook.
"The stable outlook indicates our expectation that Expleo will
adjust to challenging operating conditions in its automotive,
transportation and manufacturing, and financial services
end-markets, resulting in our forecast revenue growth of about
3%-3.5% in 2025 and S&P Global Ratings-adjusted EBITDA margin
improving to 9%-9.4% on cost reduction efforts. This would drive
leverage reduction to about 6.8x-7.3x, from our projection of 7.9x
in 2024, and adjusted FOCF close to breakeven in 2025.
"We could lower the ratings if continued weak trading conditions in
the group's core end markets resulted in reduced volumes, EBITDA
margin pressure, increasing restructuring costs, or working capital
outflows, leading to persistently negative FOCF and tightening
liquidity,
"We could consider an upgrade if a market rebound in Expleo's end
markets, coupled with successful cost cutting initiatives, leads to
sufficient revenue and EBITDA growth, resulting in adjusted debt to
EBITDA below 7.0x on a sustained basis, FFO interest coverage
reverting toward 2.0x, and FOCF turning materially and sustainably
positive."
=============
I R E L A N D
=============
ADAGIO XI: Fitch Assigns 'B-sf' Final Rating to Class F Notes
-------------------------------------------------------------
Fitch Ratings has assigned Adagio XI EUR CLO DAC final ratings as
detailed below.
Entity/Debt Rating
----------- ------
Adagio XI EUR CLO
Designated Activity Company
Class A Loan LT AAAsf New Rating
Class A Notes XS2909701307 LT AAAsf New Rating
Class B-1 XS2909701562 LT AAsf New Rating
Class B-2 XS2909701992 LT AAsf New Rating
Class C XS2909702297 LT Asf New Rating
Class D XS2909702453 LT BBB-sf New Rating
Class E XS2909702610 LT BB-sf New Rating
Class F XS2909702883 LT B-sf New Rating
Subordinated Notes
XS2909703006 LT NRsf New Rating
Transaction Summary
Adagio XI EUR CLO DAC is a securitisation of mainly senior secured
loans (at least 90%) with a component of senior unsecured,
mezzanine, second-lien loans and high-yield bonds. Note proceeds
were used to fund a portfolio with a target par of EUR400 million.
The portfolio is actively managed by AXA Investment Managers US
Inc. The collateralised loan obligation (CLO) has a 4.4-year
reinvestment period and an 8.5-year weighted average life (WAL)
test covenant.
KEY RATING DRIVERS
Average Portfolio Credit Quality (Neutral): Fitch assesses the
average credit quality of obligors at 'B'/ 'B-'. The Fitch weighted
average rating factor of the identified portfolio is 24.9.
High Recovery Expectations (Positive): At least 90% of the
portfolio comprise senior secured obligations. Fitch views the
recovery prospects for these assets as more favourable than for
second-lien, unsecured and mezzanine assets. The Fitch weighted
average recovery rate of the identified portfolio is 62.3%.
Diversified Asset Portfolio (Positive): The transaction includes
six Fitch matrices. Two are effective at closing, corresponding to
an 8.5-year WAL and two are effective 1.5 years after closing,
corresponding to a seven-year WAL with a target par condition at
EUR400 million. Another two are also effective 1.5 years after
closing and corresponding to a seven-year WAL, but with a target
par condition at EUR398 million.
Each matrix set corresponds to two different fixed-rate asset
limits at 5% and 10%. All matrices are based on a top-10 obligor
concentration limit at 20%. The transaction also includes various
concentration limits, including a maximum exposure to the three-
largest Fitch-defined industries in the portfolio at 40%. These
covenants ensure the asset portfolio will not be exposed to
excessive concentration.
Portfolio Management (Neutral): The transaction has a 4.4-year
reinvestment period and includes reinvestment criteria similar to
those of other European transactions. Fitch's analysis is based on
a stressed-case portfolio with the aim of testing the robustness of
the transaction structure against its covenants and portfolio
guidelines.
Cash Flow Modelling (Positive): The WAL used for the transaction's
matrix and Fitch-stressed portfolio analysis is 12 months less than
the WAL test covenant at the issue date. This is to account for the
strict reinvestment conditions envisaged by the transaction after
its reinvestment period. These include, among others, passing both
the coverage tests and the Fitch 'CCC' bucket limitation test as
well the WAL covenant that progressively steps down over time, both
before and after the end of the reinvestment period. Fitch believes
these conditions would reduce the effective risk horizon of the
portfolio during stress periods.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
A 25% increase of the mean default rate (RDR) and a 25% decrease of
the recovery rate (RRR) across all ratings of the identified
portfolio would have no impact on the class A notes and would lead
to downgrades of no more than one notch for the class B, C, D, E
and to below 'B-sf' for the class F notes.
Based on the identified portfolio, downgrades may occur if the loss
expectation is larger than initially assumed, due to unexpectedly
high levels of defaults and portfolio deterioration. Due to the
better metrics and shorter life of the identified portfolio than
the Fitch-stressed portfolio, the class B, C, D, E and F notes have
a cushion of two notches. The class A notes, which are rated at
'AAAsf', have no cushion.
Should the cushion between the identified portfolio and the
Fitch-stressed portfolio be eroded, due to manager trading or
negative portfolio credit migration, a 25% increase of the mean RDR
and a 25% decrease of the RRR across all ratings of the
Fitch-stressed portfolio would lead to downgrades of up to four
notches.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
A 25% reduction of the mean RDR and a 25% increase in the RRR
across all ratings of the Fitch-stressed portfolio would lead to
upgrades of up to three notches, except for the 'AAAsf' notes.
During the reinvestment period, upgrades, based on the
Fitch-stressed portfolio, may occur, except for the 'AAAsf' notes,
on better-than-expected portfolio credit quality and a shorter
remaining WAL test, allowing the notes to withstand
larger-than-expected losses for the remaining life of the
transaction. After the end of the reinvestment period, upgrades may
result from stable portfolio credit quality and deleveraging,
leading to higher credit enhancement and excess spread available to
cover losses in the remaining portfolio.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
DATA ADEQUACY
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 Adagio XI EUR CLO
DAC.
In cases where Fitch does not provide ESG relevance scores in
connection with the credit rating of a transaction, programme,
instrument or issuer, Fitch will disclose any ESG factor that is a
key rating driver in the key rating drivers section of the relevant
rating action commentary.
CARLYLE EURO 2013-1: Moody's Affirms B3 Rating on EUR10MM E-R Notes
-------------------------------------------------------------------
Moody's Ratings has upgraded the ratings on the following notes
issued by Carlyle Euro CLO 2013-1 DAC:
EUR24,000,000 Class B-R Senior Secured Deferrable Floating Rate
Notes due 2030, Upgraded to Aa2 (sf); previously on May 21, 2024
Upgraded to A1 (sf)
EUR23,000,000 Class C-R Senior Secured Deferrable Floating Rate
Notes due 2030, Upgraded to Baa1 (sf); previously on May 21, 2024
Affirmed Baa2 (sf)
Moody's have also affirmed the ratings on the following notes:
EUR236,000,000 (current outstanding amount EUR112,196,910.12)
Class A-1-R Senior Secured Floating Rate Notes due 2030, Affirmed
Aaa (sf); previously on May 21, 2024 Affirmed Aaa (sf)
EUR56,000,000 Class A-2-R Senior Secured Floating Rate Notes due
2030, Affirmed Aaa (sf); previously on May 21, 2024 Upgraded to Aaa
(sf)
EUR20,000,000 Class D-R Senior Secured Deferrable Floating Rate
Notes due 2030, Affirmed Ba2 (sf); previously on May 21, 2024
Affirmed Ba2 (sf)
EUR10,000,000 Class E-R Senior Secured Deferrable Floating Rate
Notes due 2030, Affirmed B3 (sf); previously on May 21, 2024
Affirmed B3 (sf)
Carlyle Euro CLO 2013-1 DAC, issued in June 2013, reset in February
2017 and refinanced in October 2019, is a collateralised loan
obligation (CLO) backed by a portfolio of mostly high-yield senior
secured European loans. The portfolio is managed by CELF Advisors
LLP. The transaction's reinvestment period ended in April 2021.
RATINGS RATIONALE
The rating upgrades on the Class B-R and Class C-R notes are
primarily a result of the deleveraging of the senior notes
following amortisation of the underlying portfolio since the last
rating action in May 2024.
The affirmations on the ratings on the Class A-1-R, A-2-R, D-R and
E-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-1-R notes have paid down by approximately EUR49.7
million (21.0%) since the last rating action in May 2024 and
EUR123.8 million (52.4%) since closing. As a result of the
deleveraging, over-collateralisation (OC) has increased across the
capital structure. According to the trustee report dated October
2024 [1] the Class A, Class B, Class C, Class D and Class E OC
ratios are reported at 150.3%, 133.1%, 120.0%, 110.5% and 106.3%
compared to April 2024 [2] levels of 136.5%, 124.7%, 115.1%, 107.9%
and 104.7%, respectively.
Moody's note that the October 2024 and the April 2024 principal
payments of EUR17.8 million and EUR34.9 million respectively, are
not reflected in the reported OC ratios.
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: EUR261,793,273
Defaulted Securities: EUR0
Diversity Score: 39
Weighted Average Rating Factor (WARF): 2980
Weighted Average Life (WAL): 3.30 years
Weighted Average Spread (WAS) (before accounting for Euribor
floors): 3.7%
Weighted Average Coupon (WAC): 3.73%
Weighted Average Recovery Rate (WARR): 44.35%
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.
Moody's note that the November 2024 trustee report was published at
the time Moody's were completing Moody's analysis of the October
2024 data. Key portfolio metrics such as WARF, diversity score,
weighted average spread and life, and OC ratios exhibit little or
no change between these dates.
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" published in October 2024. 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.
-- Long-dated assets: The presence of assets that mature beyond
the CLO's legal maturity date exposes the deal to liquidation risk
on those assets. Moody's assume that, at transaction maturity, the
liquidation value of such an asset will depend on the nature of the
asset as well as the extent to which the asset's maturity lags that
of the liabilities. Liquidation values higher than Moody's
expectations would have a positive impact on the notes' ratings.
In addition to the quantitative factors that Moody's explicitly
modelled, qualitative factors are part of the rating committee's
considerations. These qualitative factors include the structural
protections in the transaction, its recent performance given the
market environment, the legal environment, specific documentation
features, the collateral manager's track record and the potential
for selection bias in the portfolio. All information available to
rating committees, including macroeconomic forecasts, input from
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.
CVC CORDATUS XXVI: Fitch Assigns B-(EXP)sf Rating to Cl. F-R Notes
------------------------------------------------------------------
Fitch Ratings has assigned CVC Cordatus Loan Fund XXVI DAC reset
notes expected ratings.
The assignment of final ratings is contingent on the receipt of
final documents conforming to information already reviewed.
Entity/Debt Rating
----------- ------
CVC Cordatus Loan
Fund XXVI DAC
Class A1-R LT AAA(EXP)sf Expected Rating
Class A2-R LT AAA(EXP)sf Expected Rating
Class B1-R LT AA(EXP)sf Expected Rating
Class B2-R LT AA(EXP)sf Expected Rating
Class C-R LT A(EXP)sf Expected Rating
Class D-R LT BBB-(EXP)sf Expected Rating
Class E-R LT BB-(EXP)sf Expected Rating
Class F-R LT B-(EXP)sf Expected Rating
Transaction Summary
CVC Cordatus Loan Fund XXVI DAC is a securitisation of mainly
senior secured obligations (at least 96%) with a component of
senior unsecured, mezzanine, second lien loans and high-yield
bonds. Note proceeds will be used to redeem the existing notes
(except the subordinated notes) and to fund the existing portfolio
with a target par of EUR500 million.
The portfolio is actively managed by CVC Credit Partners Investment
Management Limited. The collateralised loan obligation (CLO) will
have a 4.5-year reinvestment period and a seven-year weighted
average life (WAL) test at closing, which can be extended one year
after closing, subject to conditions.
KEY RATING DRIVERS
Average Portfolio Credit Quality (Neutral): Fitch assesses the
average credit quality of obligors at 'B'/'B-'. The Fitch-weighted
average rating factor (WARF) of the identified portfolio is 25.1.
High Recovery Expectations (Positive): At least 96% of the
portfolio will comprise senior secured obligations. Fitch views the
recovery prospects for these assets as more favourable than for
second lien, unsecured and mezzanine assets. The Fitch-weighted
average recovery rate (WARR) of the identified portfolio is 58.0%.
Diversified Portfolio (Positive): The transaction will include
various concentration limits in the portfolio, including a
fixed-rate obligation limit at 12.5%, a top 10 obligor
concentration limit at 20% and a maximum exposure to the
three-largest Fitch-defined industries at 40%. These covenants
ensure the asset portfolio will not be exposed to excessive
concentration.
WAL Step-Up Feature (Neutral): From one year after closing, the
transaction can extend the WAL test by one year. The WAL extension
is at the option of the manager, but subject to conditions
including passing the Fitch collateral quality tests and the
aggregate collateral balance with defaulted assets at their
collateral value being equal to or greater than the reinvestment
target par.
Portfolio Management (Neutral): The transaction will have a
4.5-year reinvestment period and include reinvestment criteria
similar to those of other European transactions. Fitch's analysis
is based on a stressed case portfolio with the aim of testing the
robustness of the transaction structure against its covenants and
portfolio guidelines.
Cash Flow Modelling (Positive): The WAL for the transaction's
Fitch-stressed portfolio analysis is 12 months less than the WAL
covenant. This is to account for the strict reinvestment conditions
envisaged by the transaction after its reinvestment period, which
include passing the coverage test and the Fitch 'CCC' bucket
limitation test after reinvestment as well as a WAL covenant that
gradually steps down, before and after the end of the reinvestment
period. Fitch believes these conditions would reduce the effective
risk horizon of the portfolio during stress periods.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
A 25% increase of the mean default rate (RDR) across all ratings
and a 25% decrease of the recovery rate (RRR) across all ratings of
the identified portfolio would have no impact on the class A1-R and
A-2R notes and would lead to a downgrade of one notch for the class
C-R and D-R notes, two notches to the class E-R notes and to below
'B-sf' for the class F-R notes.
Downgrades, which are based on the identified portfolio, may occur
if the loss expectation is larger than initially assumed, due to
unexpectedly high levels of default and portfolio deterioration.
Due to the better metrics and shorter life of the identified
portfolio than the Fitch-stressed portfolio, the class B-R, C-R,
D-R, E-R and F-R notes each display a rating cushion of two
notches.
Should the cushion between the identified portfolio and the
Fitch-stressed portfolio be eroded either due to manager trading or
negative portfolio credit migration, a 25% increase of the mean RDR
across all ratings and a 25% decrease of the RRR across all ratings
of the Fitch-stressed portfolio would lead to a downgrade of up to
three notches for the class A1-R, A2-R, B-R, C-R and D-R notes and
to below 'B-sf' for the class E-R and F-R notes.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
A 25% reduction of the mean RDR across all ratings and a 25%
increase in the RRR across all ratings of the Fitch-stressed
portfolio would lead to an upgrade of up to two notches for the
rated notes, except for the 'AAAsf' notes.
During the reinvestment period, upgrades, which are based on the
Fitch-stressed portfolio, may occur on better-than-expected
portfolio credit quality and a shorter remaining WAL test, allowing
the notes to withstand larger-than-expected losses for the
remaining life of the transaction. After the end of the
reinvestment period, upgrades may result from stable portfolio
credit quality and deleveraging, leading to higher credit
enhancement and excess spread available to cover losses in the
remaining portfolio.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
DATA ADEQUACY
Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset pool
and the transaction. Fitch has not reviewed the results of any
third-party assessment of the asset portfolio information or
conducted a review of origination files as part of its ongoing
monitoring.
The majority of the underlying assets or risk-presenting entities
have ratings or credit opinions from Fitch and/or other nationally
recognised statistical rating organisations and/or European
securities and markets authority-registered rating agencies. Fitch
has relied on the practices of the relevant groups within Fitch
and/or other rating agencies to assess the asset portfolio
information or information on the risk-presenting entities.
Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis according to its applicable rating methodologies
indicates that it is adequately reliable.
ESG Considerations
Fitch does not provide ESG relevance scores for CVC Cordatus Loan
Fund XXVI DAC. In cases where Fitch does not provide ESG relevance
scores in connection with the credit rating of a transaction,
programme, instrument or issuer, Fitch will disclose any ESG factor
that is a key rating driver in the key rating drivers section of
the relevant rating action commentary.
CVC CORDATUS XXVI: S&P Assigns Prelim B-(sf) Rating to F-R Notes
----------------------------------------------------------------
S&P Global Ratings assigned its preliminary credit ratings to CVC
Cordatus Loan Fund XXVI DAC's class A-1-R, A-2-R, B-1-R, B-2-R,
C-R, D-R, E-R, and F-R notes. The subordinated notes remain
outstanding from the original issuance.
This transaction is a reset of the already existing transaction.
The existing classes of notes will be fully redeemed with the
proceeds from the issuance of the replacement notes on the reset
date and the ratings on the original notes will be withdrawn.
The target par amount has increased to EUR500 million from EUR
423.50 million. The additional assets were purchased from a
special-purpose entity (SPE) set up for the purpose of warehousing
such assets.
The preliminary ratings assigned to the reset notes reflect our
assessment of:
-- The diversified collateral pool, which consists primarily of
broadly syndicated speculative-grade senior secured term loans and
bonds that are governed by collateral quality tests.
-- The credit enhancement provided through the subordination of
cash flows, excess spread, and overcollateralization.
-- The collateral manager's experienced team, which can affect the
performance of the rated notes through collateral selection,
ongoing portfolio management, and trading.
-- The transaction's legal structure, which S&P expects to be
bankruptcy remote.
-- The transaction's counterparty risks, which S&P expects to be
in line with our counterparty rating framework.
Portfolio benchmarks
S&P Global Ratings' weighted-average rating factor 2,838.13
Default rate dispersion 488.51
Weighted-average life (years) 4.28
Weighted-average life extended to cover
the length of the reinvestment period (years) 4.50
Obligor diversity measure 153.09
Industry diversity measure 20.91
Regional diversity measure 1.16
Transaction key metrics
Portfolio weighted-average rating
derived from S&P's CDO evaluator B
'CCC' category rated assets (%) 0.59
Identified 'AAA' weighted-average recovery (%) 34.62
Target weighted-average spread (%) 3.99
Target weighted-average coupon (%) 4.34
Liquidity facility
This transaction has a EUR1.5 million liquidity facility, provided
by The Bank of New York Mellon, with a maximum commitment period of
four years and an option to extend for a further 12 months. The
margin on the facility is 1.00% and drawdowns are limited to the
amount of accrued but unpaid interest on collateral debt
obligations. The liquidity facility is repaid using interest
proceeds in a senior position of the waterfall or repaid directly
from the interest account on a business day earlier than the
payment date. For S&P's cash flow analysis, it assumes that the
liquidity facility is fully drawn throughout the five-year period
and that the amount is repaid just before the coverage tests
breach.
Rating rationale
Under the transaction documents, the rated notes pay quarterly
interest unless a frequency switch event occurs. Following this,
the notes will switch to semiannual payments. The portfolio's
reinvestment period will end approximately four and half years
after closing.
S&P said, "At closing, we expect the portfolio to be
well-diversified, primarily comprising broadly syndicated
speculative-grade senior secured term loans and senior secured
bonds. Therefore, we have conducted our credit and cash flow
analysis by applying our criteria for corporate cash flow CDOs.
"In our cash flow analysis, we used the EUR500 million target par
amount, the covenanted weighted-average spread (3.90%), the
covenanted weighted-average coupon (4.30%), and the identified
weighted-average recovery rates calculated in line with our CLO
criteria for all classes of notes. We applied various cash flow
stress scenarios, using four different default patterns, in
conjunction with different interest rate stress scenarios for each
liability rating category.
"Under our structured finance sovereign risk criteria, we consider
that the transaction's exposure to country risk is sufficiently
mitigated at the assigned preliminary ratings."
Until the end of the reinvestment period on July 15, 2029, the
collateral manager may substitute assets in the portfolio for so
long as S&P's CDO Monitor test is maintained or improved in
relation to the initial ratings on the notes. This test looks at
the total amount of losses that the transaction can sustain as
established by the initial cash flows for each rating, and it
compares that with the current portfolio's default potential plus
par losses to date. As a result, until the end of the reinvestment
period, the collateral manager may through trading deteriorate the
transaction's current risk profile, if the initial ratings are
maintained.
S&P said, "At closing, we expect that the transaction's documented
counterparty replacement and remedy mechanisms will adequately
mitigate its exposure to counterparty risk under our current
counterparty criteria.
"We expect the transaction's legal structure and framework to be
bankruptcy remote, in line with our legal criteria.
"Our credit and cash flow analysis indicates that the available
credit enhancement for the class B-1-R to D-R notes could withstand
stresses commensurate with higher rating levels than those we have
assigned. However, as the CLO will be in its reinvestment phase
starting from closing, during which the transaction's credit risk
profile could deteriorate, we have capped our preliminary ratings
assigned to the notes.
"For the class F-R notes, our credit and cash flow analysis
indicates that the available credit enhancement could withstand
stresses commensurate with a lower rating. However, we have applied
our 'CCC' rating criteria, resulting in a preliminary 'B- (sf)'
rating on this class of notes."
The ratings uplift for the class F-R notes reflects several key
factors, including:
-- The class F-R notes' available credit enhancement, which is in
the same range as that of other CLOs S&P has rated and that has
recently been issued in Europe.
-- The portfolio's average credit quality, which is similar to
other recent CLOs.
-- S&P's model generated break-even default rate at the 'B-'
rating level of 22.74% (for a portfolio with a weighted-average
life of 4.5 years), versus if it was to consider a long-term
sustainable default rate of 3.1% for 4.5 years, which would result
in a target default rate of 13.95%.
-- S&P does not believe that there is a one-in-two chance of this
note defaulting.
-- S&P does not envision this tranche defaulting in the next 12-18
months.
-- Following this analysis, S&P considers that the available
credit enhancement for the class F-R notes is commensurate with the
assigned preliminary 'B- (sf)' rating.
S&P said, "Taking the above factors into account and following our
analysis of the credit, cash flow, counterparty, operational, and
legal risks, we believe that the assigned preliminary ratings are
commensurate with the available credit enhancement for all the
rated classes of notes.
"In addition to our standard analysis, to provide an indication of
how rising pressures among speculative-grade corporates could
affect our preliminary ratings on European CLO transactions, we
have also included the sensitivity of the ratings on the class A-R
to E-R notes based on four hypothetical scenarios.
"As our ratings analysis makes additional considerations before
assigning ratings in the 'CCC' category, and we would assign a 'B-'
rating if the criteria for assigning a 'CCC' category rating are
not met, we have not included the above scenario analysis results
for the class F-R notes."
Environmental, social, and governance
S&P said, "We regard the exposure to environmental, social, and
governance (ESG) credit factors in the transaction as being broadly
in line with our benchmark for the sector. Primarily due to the
diversity of the assets within CLOs, the exposure to environmental
credit factors is viewed as below average, social credit factors
are below average, and governance credit factors are average. For
this transaction, the documents prohibit (and or for some of these
activities revenue limits apply, or they cannot be the primary
business activity) assets from being related to certain activities.
These activities include, but are not limited to: The extraction of
thermal coal, extraction of oil and gas, controversial weapons,
non-certified palm oil production, the production of or trade or
involvement in tobacco or tobacco products, hazardous chemicals and
pesticides, production or trade in endangered wildlife, pornography
or prostitution, and payday lending. Accordingly, since the
exclusion of assets from these industries does not result in
material differences between the transaction and our ESG benchmark
for the sector, no specific adjustments have been made in our
rating analysis to account for any ESG-related risks or
opportunities."
The transaction securitizes a portfolio of primarily senior secured
leveraged loans and bonds and will be managed CVC Credit Partners
Investment Management Ltd.
Ratings list
Prelim. Prelim. amount Indicative Credit
Class rating* (mil. EUR) interest rate(%)§
enhancement(%)
A-1-R AAA (sf) 305.00 Three/six-month EURIBOR + 1.30 39.00
A-2-R AAA (sf) 10.00 Three/six-month EURIBOR + 1.70 37.00
B-1-R AA (sf) 33.45 Three/six-month EURIBOR + 2.05 27.75
B-2-R AA (sf) 12.80 5.00 27.75
C-R A (sf) 30.00 Three/six-month EURIBOR + 2.55 21.75
D-R BBB- (sf) 35.00 Three/six-month EURIBOR + 3.45 14.75
E-R BB- (sf) 26.25 Three/six-month EURIBOR + 6.10 9.50
F-R B- (sf) 15.00 Three/six-month EURIBOR + 9.00 6.50
Subordinated NR 30.00 N/A N/A
*The preliminary ratings assigned to the class A-1-R, A-2-R, B-1-R,
and B-2-R notes address timely interest and ultimate principal
payments. The preliminary ratings assigned to the class C-R, D-R,
E-R, and F-R notes address ultimate interest and principal
payments. §Solely for modeling purposes as the actual spreads may
vary at pricing. The payment frequency switches to semiannual and
the index switches to six-month EURIBOR when a frequency switch
event occurs.
NR--Not rated.
N/A--Not applicable.
EURIBOR--Euro Interbank Offered Rate.
HARVEST CLO IX: Moody's Hikes Rating on EUR34.3MM E-R Notes to Ba1
------------------------------------------------------------------
Moody's Ratings has upgraded the ratings on the following notes
issued by Harvest CLO IX Designated Activity Company:
EUR26,000,000 Class C-R Senior Secured Deferrable Floating Rate
Notes due 2030, Upgraded to Aaa (sf); previously on Mar 11, 2024
Upgraded to Aa2 (sf)
EUR27,500,000 Class D-R Senior Secured Deferrable Floating Rate
Notes due 2030, Upgraded to Aa3 (sf); previously on Mar 11, 2024
Upgraded to A3 (sf)
EUR34,300,000 Class E-R Senior Secured Deferrable Floating Rate
Notes due 2030, Upgraded to Ba1 (sf); previously on Mar 11, 2024
Affirmed Ba2 (sf)
Moody's have also affirmed the ratings on the following notes:
EUR294,500,000 (current outstanding amount EUR80,366,796.80) Class
A-R-R Senior Secured Floating Rate Notes due 2030, Affirmed Aaa
(sf); previously on Mar 11, 2024 Affirmed Aaa (sf)
EUR50,000,000 Class B-1-R Senior Secured Floating Rate Notes due
2030, Affirmed Aaa (sf); previously on Mar 11, 2024 Upgraded to Aaa
(sf)
EUR25,000,000 Class B-2-R-R Senior Secured Fixed Rate Notes due
2030, Affirmed Aaa (sf); previously on Mar 11, 2024 Upgraded to Aaa
(sf)
EUR15,200,000 Class F-R Senior Secured Deferrable Floating Rate
Notes due 2030, Affirmed B3 (sf); previously on Mar 11, 2024
Affirmed B3 (sf)
Harvest CLO IX Designated Activity Company, issued in July 2014,
reset for the first time in August 2017 and refinanced again in
June 2021, is a collateralised loan obligation (CLO) backed by a
portfolio of mostly high-yield senior secured European loans. The
portfolio is managed by Investcorp Credit Management EU Limited.
The transaction's reinvestment period ended in August 2021.
RATINGS RATIONALE
The rating upgrades on the Class C-R, Class D-R and Class E-R notes
are primarily a result of the significant deleveraging of the
senior notes following amortisation of the underlying portfolio
since the last rating action in March 2024.
The affirmations on the ratings on the Class A-R-R, Class B-1-R,
Class B-2-R-R and Class 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-R notes have paid down by approximately EUR177.7
million (60.3%) in the last 12 months, EUR131.4 million (44.6%)
since the last rating action in March 2024 and EUR214.1 million
(72.7%) since the end of the reinvestment period. As a result of
the deleveraging, over-collateralisation (OC) has increased across
the capital structure. According to the trustee report dated
November 2024 [1] the Class A/B, Class C, Class D, Class E and
Class F OC ratios are reported at 155.16%, 138.62%, 124.57%,
110.59% and 105.35% compared to February 2024 [2] levels of
136.43%, 126.55%, 117.55%, 107.97% and 104.21%, respectively.
Moody's note that the November 2024 principal payments are not
reflected in the reported OC ratios.
The deleveraging and OC improvements primarily resulted from high
prepayment rates of leveraged loans in the underlying portfolio.
All 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: EUR275.52m
Defaulted Securities: EUR1.08m
Diversity Score: 43
Weighted Average Rating Factor (WARF): 3047
Weighted Average Life (WAL): 3.08 years
Weighted Average Spread (WAS) (before accounting for Euribor
floors): 3.67%
Weighted Average Coupon (WAC): 4.02%
Weighted Average Recovery Rate (WARR): 44.53%
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" published in October 2024. 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.
-- Recovery of defaulted assets: Market value fluctuations in
trustee-reported defaulted assets and those Moody's assume have
defaulted can result in volatility in the deal's
over-collateralisation levels. Further, the timing of recoveries
and the manager's decision whether to work out or sell defaulted
assets can also result in additional uncertainty. Moody's analysed
defaulted recoveries assuming the lower of the market price or the
recovery rate to account for potential volatility in market prices.
Recoveries higher than Moody's expectations would have a positive
impact on the notes' ratings.
In addition to the quantitative factors that Moody's explicitly
modelled, qualitative factors are part of the rating committee's
considerations. These qualitative factors include the structural
protections in the transaction, its recent performance given the
market environment, the legal environment, specific documentation
features, the collateral manager's track record and the potential
for selection bias in the portfolio. All information available to
rating committees, including macroeconomic forecasts, input from
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.
OCP EURO 2024-11: Fitch Assigns 'B-sf' Final Rating to Cl. F Notes
------------------------------------------------------------------
Fitch Ratings has assigned OCP EURO CLO 2024-11 Designated Activity
Company's final ratings, as detailed below:
Entity/Debt Rating
----------- ------
OCP EURO CLO 2024-11
Designated Activity
Company
A XS2919731161 LT AAAsf New Rating
B-1 XS2919731328 LT AAsf New Rating
B-2 XS2919731674 LT AAsf New Rating
C XS2919731831 LT Asf New Rating
D XS2919732052 LT BBB-sf New Rating
E XS2919732136 LT BB-sf New Rating
F XS2919732482 LT B-sf New Rating
Subordinated Notes
XS2919743505 LT NRsf New Rating
Transaction Summary
OCP EURO CLO 2024-11 Designated Activity Company is a
securitisation of mainly senior secured obligations (at least 90%)
with a component of senior unsecured, mezzanine, second-lien loans
and high-yield bonds. Note proceeds are being used to fund the
portfolio with a target par of EUR600 million.
The portfolio is actively managed by Onex Credit Partners Europe
LLP. The collateralised loan obligation (CLO) has an approximately
five-year reinvestment period and an eight-year weighted average
life (WAL) test covenant.
KEY RATING DRIVERS
Average Portfolio Credit Quality (Neutral): Fitch assesses the
average credit quality of obligors at 'B'/ 'B-'. The Fitch-weighted
average rating factor (WARF) of the identified portfolio is 24.8
High Recovery Expectations (Positive): At least 90% of the
portfolio comprises senior secured obligations. Fitch views the
recovery prospects for these assets as more favourable than for
second-lien, unsecured and mezzanine assets. The Fitch-weighted
average recovery rate of the identified portfolio is 62.2%.
Diversified Asset Portfolio (Positive): The transaction includes
four Fitch test matrices, of which two are effective at closing.
The matrices correspond to a top 10 obligor concentration limit at
20% and fixed-rate obligation limits at 5% and 10%. It has two
forward matrices corresponding to the same top-10 obligors and
fixed-rate limits, which will be effective 12 months after closing,
provided that the collateral principal amount (defaults at
Fitch-calculated collateral value) is at least at the reinvestment
target balance and subject to a confirmation by Fitch.
The transaction also includes various concentration limits,
including a maximum exposure to the three-largest Fitch-defined
industries at 40%. These covenants ensure that the asset portfolio
will not be exposed to excessive concentration.
Portfolio Management (Neutral): The transaction has an
approximately five-year reinvestment period, which is governed by
reinvestment criteria that are similar to those of other European
transactions. Fitch's analysis is based on a stressed-case
portfolio with the aim of testing the robustness of the transaction
structure against its covenants and portfolio guidelines.
WAL Step-Up Feature (Neutral): The transaction can extend the WAL
by one year on the step-up date, which is one year after closing.
The WAL extension is at the option of the manager but subject to
conditions including passing the collateral-quality,
portfolio-profile and coverage tests and the aggregate collateral
balance (defaulted obligations at their Fitch-calculated collateral
value) being at least at the target par.
Cash-flow Modelling (Positive): The WAL Fitch modelled is 12 months
less than the WAL covenant. This is to account for the strict
reinvestment conditions envisaged after the reinvestment period.
These include, among others, passing both the coverage tests and
the Fitch 'CCC' limit post reinvestment as well as a WAL covenant
that progressively steps down over time, both before and after the
end of the reinvestment period. Fitch believes these conditions
would reduce the effective risk horizon of the portfolio during
stress periods.
'CCC' Test: The Fitch 'CCC' test condition can be altered to a
maintain-or-improve basis, but only if the manager switches back to
the closing matrix (subject to satisfying the collateral quality
tests) from the forward matrix, effectively unwinding the benefit
from the one-year reduction in the Fitch-stressed portfolio WAL. If
the manager has not switched to the forward matrix, which includes
satisfying the target par condition, the transaction will not be
able to switch back and move to a Fitch 'CCC' test
maintain-or-improve basis.
Fitch believes strict satisfaction of the Fitch 'CCC' test is more
effective at preventing the manager from reinvesting and extending
the WAL, than maintaining and improving the Fitch 'CCC' test.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
A 25% increase of the mean default rate (RDR) across all ratings
and a 25% decrease of the recovery rate (RRR) across all ratings of
the identified portfolio would have no impact on the class A, C and
E notes, would lead to a downgrade of no more than one notch of the
class B and D notes, and to below 'B-sf' for the class F notes.
Downgrades, which are based on the identified portfolio, may occur
if the loss expectation is larger than initially assumed, due to
unexpectedly high levels of defaults and portfolio deterioration.
Due to the better metrics of the identified portfolio than the
Fitch-stressed portfolio the rated notes display a rating cushion
to a downgrade of up to three notches.
Should the cushion between the identified portfolio and the
Fitch-stressed portfolio erode due to manager trading or negative
portfolio credit migration, a 25% increase of the mean RDR across
all ratings and a 25% decrease of the RRR across all ratings of the
Fitch-stressed portfolio would result in downgrades of four notches
on the class A, B and C notes, three notches to the class D notes,
and to below 'B-sf' for the class E and F notes.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
A 25% reduction of the mean RDR across all ratings and a 25%
increase in the RRR across all ratings of the Fitch-stressed
portfolio would lead to upgrades of no more than five notches for
the rated notes of the transaction, except for the 'AAAsf' notes.
During the reinvestment period, upgrades, based on the
Fitch-stressed portfolio, may occur on better-than-expected
portfolio credit quality and a shorter remaining WAL test, allowing
the notes to withstand larger-than-expected losses for the
remaining life of the transaction. After the end of the
reinvestment period, upgrades may result from stable portfolio
credit quality and deleveraging, leading to higher credit
enhancement and excess spread available to cover losses in the
remaining portfolio.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
DATA ADEQUACY
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 OCP EURO CLO
2024-11 Designated Activity Company.
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 any ESG factor that is a
key rating driver in the key rating drivers section of the relevant
rating action commentary.
OCP EURO 2024-11: S&P Assigns B- (sf) Rating to Class F Notes
-------------------------------------------------------------
S&P Global Ratings assigned credit ratings to OCP Euro CLO 2024-11
DAC's class A to F notes. At closing, the issuer also issued
unrated subordinated notes.
The ratings reflect S&P's assessment of:
-- The diversified collateral pool, which primarily comprises
broadly syndicated speculative-grade senior secured term loans and
bonds that are governed by collateral quality tests.
-- The credit enhancement provided through the subordination of
cash flows, excess spread, and overcollateralization.
-- The collateral manager's experienced team, which can affect the
performance of the rated notes through collateral selection,
ongoing portfolio management, and trading.
-- The transaction's legal structure, which is bankruptcy remote.
-- The transaction's counterparty risks, which are in line with
S&P's counterparty rating framework.
Portfolio benchmarks
S&P Global Ratings' weighted-average rating factor 2,768.26
Default rate dispersion 556.51
Weighted-average life (years) 4.75
Weighted-average life (years) extended
to match reinvestment period 5.00
Obligor diversity measure 175.25
Industry diversity measure 22.62
Regional diversity measure 1.26
Transaction key metrics
Portfolio weighted-average rating
derived from S&P's CDO evaluator B
'CCC' category rated assets (%) 0.75
Actual 'AAA' weighted-average recovery (%) 36.39
Actual weighted-average spread (net of floors; %) 4.04
Actual weighted-average coupon (%) 3.34
Under the transaction documents, the rated notes pay quarterly
interest unless a frequency switch event occurs. Following this,
the notes will switch to semiannual payments.
Rationale
S&P said, "The portfolio is well-diversified, primarily comprising
broadly syndicated speculative-grade senior secured term loans and
senior secured bonds. Therefore, we have conducted our credit and
cash flow analysis by applying our criteria for corporate cash flow
CDOs.
"In our cash flow analysis, we used the EUR600 million target par
amount, the covenanted weighted-average spread (4.03%), the
covenanted weighted-average coupon (3.25%), and the actual
weighted-average recovery rates at all rating levels, calculated in
line with our CLO criteria. We applied various cash flow stress
scenarios, using four different default patterns, in conjunction
with different interest rate stress scenarios for each liability
rating category.
"Until the end of the reinvestment period on Dec. 3, 2029, the
collateral manager may substitute assets in the portfolio for so
long as our CDO Monitor test is maintained or improved in relation
to the initial ratings on the notes. This test looks at the total
amount of losses that the transaction can sustain as established by
the initial cash flows for each rating, and it compares that with
the current portfolio's default potential plus par losses to date.
As a result, until the end of the reinvestment period, the
collateral manager may through trading deteriorate the
transaction's current risk profile, if the initial ratings are
maintained.
"Under our structured finance sovereign risk criteria, we consider
that the transaction's exposure to country risk is sufficiently
mitigated at the assigned ratings.
"The transaction's documented counterparty replacement and remedy
mechanisms adequately mitigate its exposure to counterparty risk
under our current counterparty criteria.
"The transaction's legal structure and framework is bankruptcy
remote, in line with our legal criteria.
"Following our analysis of the credit, cash flow, counterparty,
operational, and legal risks, we believe our ratings are
commensurate with the available credit enhancement for the class A
to F notes.
"Our credit and cash flow analysis indicates that the available
credit enhancement for the class B-1 to F notes could withstand
stresses commensurate with higher ratings than those we have
assigned. However, as the CLO is still in its reinvestment phase,
during which the transaction's credit risk profile could
deteriorate, we have capped our ratings assigned to the notes. The
class A notes can withstand stresses commensurate with the assigned
rating.
"In addition to our standard analysis, to provide an indication of
how rising pressures among speculative-grade corporates could
affect our ratings on European CLO transactions, we have also
included the sensitivity of the ratings on the class A to E notes
based on four hypothetical scenarios and applied to the actual
portfolio characteristics at closing.
"As our ratings analysis makes additional considerations before
assigning ratings in the 'CCC' category, and we would assign a 'B-'
rating if the criteria for assigning a 'CCC' category rating are
not met, we have not included the above scenario analysis results
for the class F notes."
Environmental, social, and governance
S&P said, "We regard the exposure to environmental, social, and
governance (ESG) credit factors in the transaction as being broadly
in line with our benchmark for the sector. For this transaction,
the documents prohibit (and or for some of these activities there
are revenue limits or can't be the primary business activity)
assets from being related to certain activities, including, but not
limited to, the following: coal mining and/or coal-based power
generation, trade of illegal drugs or narcotics, including
recreational cannabis, the sale of tobacco products, the production
or distribution of antipersonnel landmines, cluster munitions,
biological and chemical, radiological and nuclear weapons,
non-sustainable palm oil production.
"Accordingly, since the exclusion of assets from these industries
does not result in material differences between the transaction and
our ESG benchmark for the sector, no specific adjustments have been
made in our rating analysis to account for any ESG-related risks or
opportunities."
Ratings
Amount Credit
Class Rating* (mil. EUR) Interest rate§ enhancement (%)
A AAA (sf) 370.20 3mE +1.29% 38.30
B-1 AA (sf) 58.20 3mE +1.90% 26.80
B-2 AA (sf) 10.80 5.00% 26.80
C A (sf) 34.80 3mE +2.20% 21.00
D BBB- (sf) 42.00 3mE +3.15% 14.00
E BB- (sf) 27.00 3mE +5.80% 9.50
F B- (sf) 18.00 3mE +8.31% 6.50
Sub. NR 50.30 N/A N/A
*The ratings assigned to the class A, B-1, and B-2 notes address
timely interest and ultimate principal payments. The ratings
assigned to the class C to F notes address ultimate interest and
principal payments.
§The payment frequency switches to semiannual and the index
switches to six-month EURIBOR when a frequency switch event
occurs.
NR--Not rated.
N/A--Not applicable.
3mE--Three-month Euro Interbank Offered Rate (EURIBOR).
Sub.--Subordinated.
WATERSTOWN PARK: Fitch Assigns 'B-(EXP)sf' Rating to Class F Notes
------------------------------------------------------------------
Fitch Ratings has assigned Waterstown Park CLO DAC expected
ratings.
The assignment of final ratings is contingent on the receipt of
final documents conforming to information already reviewed.
Entity/Debt Rating
----------- ------
Waterstown Park CLO DAC
Class A-1 LT AAA(EXP)sf Expected Rating
Class A-2 LT AAA(EXP)sf Expected Rating
Class B LT AA(EXP)sf Expected Rating
Class C LT A(EXP)sf Expected Rating
Class D LT BBB-(EXP)sf Expected Rating
Class E LT BB-(EXP)sf Expected Rating
Class F LT B-(EXP)sf Expected Rating
Subordinated Notes LT NR(EXP)sf Expected Rating
Transaction Summary
Waterstown Park CLO DAC is a securitisation of mainly senior
secured obligations (at least 96%) with a component of senior
unsecured, mezzanine, second-lien loans and high-yield bonds. The
transaction has a target par of EUR400 million. The portfolio will
be actively managed by Blackstone Ireland Limited. The CLO has an
approximately 4.5-year reinvestment period and a seven-year
weighted average life test (WAL).
KEY RATING DRIVERS
Average Portfolio Credit Quality (Neutral): Fitch places the
average credit quality of obligors at 'B'/'B-'. The Fitch weighted
average rating factor of the identified portfolio is 25.2.
High Recovery Expectations (Positive): At least 96% of the
portfolio will comprise senior secured obligations. Fitch views the
recovery prospects for these assets as more favourable than for
second-lien, unsecured and mezzanine assets. The Fitch weighted
average recovery rate of the identified portfolio is 63%.
Diversified Portfolio (Positive): The transaction will include
various concentration limits, including a maximum exposure to the
three largest Fitch-defined industries in the portfolio at 40%, a
top 10 obligor concentration limit at 20% and a maximum fixed-rate
asset limit of 12.5%. These covenants ensure the asset portfolio
will not be exposed to excessive concentration.
WAL Step-Up Feature (Neutral): The transaction can extend the WAL
by one year on the step-up date, which is one year after closing.
The WAL extension is subject to conditions, including passing the
collateral quality and coverage tests and the adjusted collateral
principal amount is at least equal to the reinvestment target par
balance.
Portfolio Management (Neutral): The transaction will have a
4.5-year reinvestment period and include reinvestment criteria
similar to those of other European transactions. Fitch's analysis
is based on a stressed-case portfolio with the aim of testing the
robustness of the transaction structure against its covenants and
portfolio guidelines.
Cash Flow Modelling (Positive): The WAL for the Fitch-stressed
portfolio analysis is 12 months less than the WAL covenant. This is
to account for the strict reinvestment conditions envisaged by the
transaction after its reinvestment period. These include, among
others, passing both the coverage tests and the Fitch 'CCC' bucket
limitation test post reinvestment as well a WAL covenant that
progressively steps down over time, both before and after the end
of the reinvestment period. Fitch believes these conditions would
reduce the effective risk horizon of the portfolio during stress
periods.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
A 25% increase of the mean default rate (RDR) across all ratings
and a 25% decrease of the recovery rate (RRR) across all ratings of
the identified portfolio would have no impact on the class A-1, A-2
and F notes and would lead to downgrades of one notch for the class
B to E notes.
Based on the actual portfolio, downgrades may occur if the loss
expectation is larger than initially assumed, due to unexpectedly
high levels of default and portfolio deterioration. Due to the
better metrics and shorter life of the identified portfolio, the
class B to E notes display a rating cushion of two notches and the
class F notes of four notches.
Should the cushion between the identified portfolio and the stress
portfolio be eroded either due to manager trading or negative
portfolio credit migration, a 25% increase of the mean RDR across
all ratings and a 25% decrease of the RRR across all ratings of the
stressed portfolio would lead to downgrades of up to four notches
for the notes.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
A 25% reduction of the mean RDR across all ratings and a 25%
increase in the RRR across all ratings of Fitch's stress portfolio
would lead to upgrades of up to three notches for the notes, except
for the 'AAAsf' rated notes, which are at the highest level on
Fitch's scale and cannot be upgraded.
During the reinvestment period, based on Fitch's stress portfolio,
upgrades may occur on better-than-expected portfolio credit quality
and a shorter remaining WAL test, leading to the ability of the
notes to withstand larger than expected losses for the remaining
life of the transaction. After the end of the reinvestment period,
upgrades may occur in case of stable portfolio credit quality and
deleveraging, leading to higher credit enhancement and excess
spread available to cover for losses on the remaining portfolio.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
DATA ADEQUACY
The majority of the underlying assets or risk presenting entities
have ratings or credit opinions from Fitch and/or other Nationally
Recognized Statistical Rating Organizations and/or European
Securities and Markets Authority registered rating agencies. Fitch
has relied on the practices of the relevant groups within Fitch
and/or other rating agencies to assess the asset portfolio
information or information on the risk presenting entities.
Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis according to its applicable rating methodologies
indicates that it is adequately reliable.
ESG Considerations
Fitch does not provide ESG relevance scores for Waterstown Park CLO
DAC.
In cases where Fitch does not provide ESG relevance scores in
connection with the credit rating of a transaction, programme,
instrument or issuer, Fitch will disclose any ESG factor that is a
key rating driver in the key rating drivers section of the relevant
rating action commentary.
WATERSTOWN PARK: S&P Assigns Prelim B- (sf) Rating to Cl. F Notes
-----------------------------------------------------------------
S&P Global Ratings assigned its preliminary credit ratings to
Waterstown Park CLO DAC's class A-1, A-2, B, C, D, E, and F notes.
At closing, the issuer will also issue unrated subordinated notes.
The reinvestment period will be approximately 4.50 years, while the
non-call period will be 1.50 years after closing.
Under the transaction documents, the rated notes will pay quarterly
interest unless there is a frequency switch event. Following this,
the notes will switch to semiannual payment.
The preliminary ratings assigned to the notes reflect S&P's
assessment of:
-- The diversified collateral pool, which primarily comprises
broadly syndicated speculative-grade senior secured term loans and
bonds that are governed by collateral quality tests.
-- The credit enhancement provided through the subordination of
cash flows, excess spread, and overcollateralization.
-- The collateral manager's experienced team, which can affect the
performance of the rated notes through collateral selection,
ongoing portfolio management, and trading.
-- The transaction's legal structure, which S&P expects to be
bankruptcy remote.
-- The transaction's counterparty risks, which S&P expects to be
in line with its counterparty rating framework.
Portfolio benchmarks
S&P Global Ratings weighted-average rating factor 2,851.40
Default rate dispersion 475.16
Weighted-average life (years) 4.16
Weighted-average life (years) extended
to cover the length of the reinvestment period 4.49
Obligor diversity measure 152.52
Industry diversity measure 21.10
Regional diversity measure 1.27
Transaction key metrics
Total par amount (mil. EUR) 400.00
Defaulted assets (mil. EUR) 0.00
Number of performing obligors 175
Portfolio weighted-average rating
derived from S&P's CDO evaluator B
'CCC' category rated assets (%) 1.75
Target 'AAA' weighted-average recovery (%) 37.19
Actual weighted-average spread (net of floors; %) 3.90
Actual weighted-average coupon (%) N/A
N/A--Not applicable.
S&P said, "Our preliminary ratings reflect our assessment of the
collateral portfolio's credit quality, which has a weighted-average
rating of 'B'.
"We expect the portfolio to be well-diversified on the closing
date, primarily comprising broadly syndicated speculative-grade
senior secured term loans and senior secured bonds. Therefore, we
conducted our credit and cash flow analysis by applying our
criteria for corporate cash flow CDOs.
"The transaction will include an amortizing reinvestment target par
amount, which is a predetermined reduction in the value of the
transaction's target par amount unrelated to the principal payments
on the notes. This may allow for the principal proceeds to be
characterized as interest proceeds when the collateral par exceeds
this amount, subject to a limit, and affect the reinvestment
criteria, among others. This feature allows some excess par to be
released to equity during benign times, which may lead to a
reduction in the amount of losses that the transaction can sustain
during an economic downturn. Hence, in our cash flow analysis, we
assumed a starting collateral size of less than target par (i.e.,
the EUR400 million target par minus the EUR7.5 million maximum
reinvestment target par adjustment amount).
"In our cash flow analysis, we also modeled the covenanted
weighted-average spread of 3.68%, the covenanted weighted-average
coupon of 4.00%, and the targeted weighted-average recovery rates
at each rating level. We applied various cash flow stress
scenarios, using four different default patterns, in conjunction
with different interest rate stress scenarios for each liability
rating category.
"At closing, we expect the transaction's documented counterparty
replacement and remedy mechanisms to adequately mitigate its
exposure to counterparty risk under our current counterparty
criteria.
"Under our structured finance sovereign risk criteria, we expect
the transaction's exposure to country risk to be sufficiently
mitigated at the assigned preliminary ratings.
"We expect the transaction's legal structure and framework to be
bankruptcy remote, in line with our legal criteria.
"At closing, the issuer will purchase approximately 50% of the
portfolio from a secured special-purpose vehicle (SPV) grantor via
participations; we also expect this to comply with our legal
criteria. The transaction documents also require that the issuer
and secured SPV grantor use commercially reasonable efforts to
elevate the participations by transferring to the issuer the legal
and beneficial interests as soon as reasonably practicable
following the closing date.
"Our credit and cash flow analysis indicates that the available
credit enhancement for the class B, C, and D notes could withstand
stresses commensurate with higher preliminary ratings than those
assigned. However, as the CLO will be in its reinvestment phase
starting from the effective date, during which the transaction's
credit risk profile could deteriorate, we have capped our
preliminary ratings assigned to the notes."
The class A-1, A-2, and E notes can withstand stresses commensurate
with the assigned preliminary ratings.
For the class F notes, our credit and cash flow analysis indicate
that the available credit enhancement could withstand stresses
commensurate with a lower preliminary rating.
However, S&P has applied its 'CCC' rating criteria, resulting in a
preliminary 'B- (sf)' rating on this class of notes.
The ratings uplift for the class F notes reflects several key
factors, including:
-- The class F notes' available credit enhancement, which is in
the same range as that of other CLOs S&P has rated and that has
recently been issued in Europe.
-- The preliminary portfolio's average credit quality, which is
similar to other recent CLOs.
-- S&P's model generated break-even default rate at the 'B-'
rating level of 24.71% (for a portfolio with a weighted-average
life of 4.49 years), versus if it was to consider a long-term
sustainable default rate of 3.1% for 4.49 years, which would result
in a target default rate of 13.92%.
-- S&P does not believe that there is a one-in-two chance of this
tranche defaulting.
-- S&P does not envision this tranche defaulting in the next 12-18
months.
-- Following this analysis, S&P considers that the available
credit enhancement for the class F notes is commensurate with the
assigned preliminary 'B- (sf)' rating.
-- Following S&P's analysis of the credit, cash flow,
counterparty, operational, and legal risks, it believes that its
preliminary ratings are commensurate with the available credit
enhancement for the class A-1, A-2, B, C, D, E, and F notes.
S&P said, "In addition to our standard analysis, we have also
included the sensitivity of the ratings on the class A-1 to E
notes, based on four hypothetical scenarios56.
"As our ratings analysis makes additional considerations before
assigning ratings in the 'CCC' category, and we would assign a 'B-'
rating if the criteria for assigning a 'CCC' category rating are
not met, we have not included the above scenario analysis results
for the class F notes."
Environmental, social, and governance
S&P said, "We regard the exposure to environmental, social, and
governance (ESG) credit factors in the transaction as being broadly
in line with our benchmark for the sector. For this transaction,
the documents prohibit assets from being related to the following
industries: controversial weapons, animal welfare, firearms,
thermal coal, oil and gas, palm oil, displacement, projects,
hazardous chemicals, payday lending, tobacco, opioids, pornography
or prostitution, and cannabis.
"Accordingly, since the exclusion of assets from these industries
does not result in material differences between the transaction and
our ESG benchmark for the sector, no specific adjustments have been
made in our rating analysis to account for any ESG-related risks or
opportunities."
Waterstown Park CLO is a European cash flow CLO securitization of a
revolving pool, comprising euro-denominated senior secured loans
and bonds issued mainly by speculative-grade borrowers. Blackstone
Ireland Ltd. will manage the transaction.
Ratings list
Prelim. Prelim. amount Credit Indicative
Class rating* (mil. EUR) enhancement (%) interest rate§
A-1 AAA (sf) 244.00 39.00 Three/six-month EURIBOR
plus 1.28%
A-2 AAA (sf) 4.00 38.00 Three/six-month EURIBOR
plus 1.85%
B AA (sf) 46.00 26.50 Three/six-month EURIBOR
plus 2.05%
C A (sf) 22.00 21.00 Three/six-month EURIBOR
plus 2.50%
D BBB- (sf) 28.00 14.00 Three/six-month EURIBOR
plus 3.50%
E BB- (sf) 18.00 9.50 Three/six-month EURIBOR
plus 6.00%
F B- (sf) 12.00 6.50 Three/six-month EURIBOR
plus 8.60%
Sub notes NR 31.80 N/A N/A
*The preliminary ratings assigned to the class A-1, A-2, and B
notes address timely interest and ultimate principal payments. The
preliminary ratings assigned to the class C, D, E, and F notes
address ultimate interest and principal payments.
§Solely for modeling purposes--the actual spreads may vary at
pricing. The payment frequency switches to semiannual and the index
switches to six-month EURIBOR when a frequency switch event occurs.
EURIBOR--Euro Interbank Offered Rate.
NR--Not rated.
N/A—-Not applicable.
===================
L U X E M B O U R G
===================
MILLICOM INTERNATIONAL: Fitch Affirms 'BB+' IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed Millicom International Cellular, S.A.'s
Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs)
at 'BB+' with a Stable Rating Outlook. In addition, Fitch has
affirmed Millicom's senior unsecured debt at 'BB+'.
Millicom's ratings reflect geographic diversification, strong brand
recognition and network quality, all of which contribute to leading
positions in key markets, a strong subscriber base and solid
operating cash-flow generation. Millicom's ratings are constrained
by the operating environments of its operating subsidiaries that
contribute to significant upstream cash flows.
The Stable Outlook reflects Fitch's expectation that the company
will maintain consolidated net leverage below 3.5x, financial
policy remains intact, and that it will continue to lead in key
markets.
Key Rating Drivers
Weak Operating Environment: Millicom's ratings are constrained by
the challenging operating environments in Latin American countries
where it operates. These environments are characterized by weak
systemic governance, relatively low sovereign ratings, and
vulnerability to economic shocks, leading to more volatile
political, regulatory, and economic conditions.
Strong Market Positions: Millicom maintains a leading market
position, ranking either No. 1 or No. 2 in most of its markets.
Fitch expects Millicom to retain its strong market position,
supported by superior network quality, extensive coverage, and
strong B2B operations. This should allow the company to continue
generating stable cash flows and capitalize on growth opportunities
in underserved mobile data and fixed broadband services.
Improving Free Cash Flow: Fitch forecasts improving FCF generation
over the rating horizon, driven by cost-saving initiatives and
capital expenditures trending below 15% of revenue. Millicom's
strong market position underpins EBITDA margins around 36% and FFO
margins around 25%, aligning with an investment-grade operator.
Fitch expects Millicom to generate over USD600 million in FCF in
2024, attributed to anticipated cost savings from efficiency
initiatives, facilitating continued deleveraging towards the
company's intermediate- and long-term targets.
Gradual Deleveraging: Fitch projects Millicom's consolidated net
debt-to-EBITDA ratio to reach 2.5x by the end of 2024, from 3.1x in
2023, due to improved FCF. Deleveraging will be supported by stable
EBITDA and lower interest costs but may slow with shareholder
distributions resuming in 2025. Lease-adjusted net leverage ratios,
usually around 1x higher than unadjusted ratios, are also likely to
decline. This trend relies on Millicom's financial policy remaining
unchanged despite Iliad Holding S.A.S. ('BB'/Stable)'s higher
ownership stake.
Standalone Rating: Despite the current 40% indirect ownership stake
of Millicom and its consideration as an unrestricted subsidiary by
Iliad Holding S.A.S. Fitch rates Millicom on a standalone basis,
given the high percentage of shares still listed publicly, the
composition of Millicom's board of directors, separate external
funding, independence in treasury operations, and the absence of
guarantees or cross-defaults. Fitch will continue to monitor for
any changes in ownership structure that could affect Millicom's
financial policy or funding structure.
Derivation Summary
Millicom's credit profile is comparable to regional
telecommunications peers in the 'BB' rating category, based on a
solid financial profile and operational scale and diversification,
as well as strong positions in key markets, offset by high
concentration in countries with low sovereign ratings in Latin
America, which tend to have more volatile economic environments.
Millicom has a stronger financial profile than diversified
integrated telecom operators in the region, such as Cable &
Wireless Communications Limited (BB-/Stable), supporting a higher
rating. Millicom's leverage is moderately higher than that of
Empresa de Telecomunicaciones de Bogota, S.A., E.S.P.
(BB+/Negative), but it benefits from a stronger business profile
that has leading market positions in multiple markets.
Millicom also has a stronger financial structure and business
profile than Axtel S.A.B. de C.V. (BB-/Stable), a Mexican
fixed-line operator as well as Colombia Telecomunicaciones S.A.
E.S.P. BIC (ColTel, BB+/Stable), an integrated Colombian telecom
operator.
Compared with investment-grade operators, such as Empresa Nacional
de Telecomunicaciones S.A. (Entel, BBB-/Stable), Millicom has
stronger profitability but a somewhat weaker leverage profile.
Millicom is rated below Entel due in part to its operating
environments and the sources of its dividends, as well as its
weaker leverage profile.
Key Assumptions
Fitch's Key Assumptions Within Its Rating Case for the Issuer
Include
- Slight revenue growth in 2024 due to strong growth in B2C mobile
and B2B revenues, slightly offset by a decline in B2C home; revenue
growth in 2025 expected to be affected by currency devaluation in
Bolivia, with growth returning to positive low-single-digits
thereafter
- EBITDA margins expanding around 300bp in 2024 to approximately
36%, due to the implementation of cost savings improvements and
general stabilization in competitive pressures across Millicom's
key markets;
- EBITDA margins over the medium-to-long-term slightly affected by
higher lease expense following the SBA tower transaction;
- Average capex/sales (including spectrum) of approximately 13% in
2024, trending toward 14%-15% over the medium term;
- Expectation of recurring dividends beginning in 2025, due to
Millicom achieving net leverage targets;
- Holding company debt/upstream cash flows temporarily rising above
sensitivity levels in 2024 due to the focus on local market
deleveraging; levels return to normal in 2025 after continued
strong FCF generation;
- Fitch assumes after-tax proceeds from the SBA tower transaction
will be distributed to shareholders.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Consolidated total adjusted net debt/EBITDA at 3.5x or above and
lease-adjusted net debt/EBITDAR at 4.5x or above;
- (CFO - capex)/debt sustained below 7.5%;
- Holding company debt/upstream cash flows received consistently
above 4.5x;
- A change in financial policy could have negative implications for
Millicom's ratings.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- An improvement in the operating environments of the Millicom
group, particularly in Guatemala.
- Total adjusted net debt/EBITDA of 2.5x or below and
lease-adjusted net debt/EBITDAR of 3.5x or below sustained over the
rating horizon;
- (CFO - capex)/debt sustained above 12.5%;
Liquidity and Debt Structure
Millicom demonstrates a robust liquidity position, with substantial
cash reserves that fully cover its short-term debt. As of Sept. 30,
2024, the consolidated group's readily available cash stood at
USD803 million, comfortably covering its reported short-term debt
obligations of USD243 million. In addition, the company has access
to a USD600 million undrawn revolving credit facility.
Fitch anticipates no liquidity issues for either the operating
companies or the holding company, given the operating companies'
stable cash flow generation and consistent cash transfers to the
holding company. Millicom's solid track record in accessing capital
markets when external financing is needed further underpins its
effective liquidity management.
Issuer Profile
Millicom is a diversified telecom operating in nine Latin American
countries across operating under the Tigo brand. It provides B2C
mobile services, B2C fixed telephony, pay TV and broadband
services, B2B fixed and mobile services, and mobile finance
solution services.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Millicom International
Cellular S.A. LT IDR BB+ Affirmed BB+
LC LT IDR BB+ Affirmed BB+
senior unsecured LT BB+ Affirmed BB+
=====================
N E T H E R L A N D S
=====================
LUMILEDS HOLDING: S&P Places 'CCC+' ICR on CreditWatch Negative
---------------------------------------------------------------
S&P Global Ratings placed its 'CCC+' issuer rating on Lumileds
Holding B.V. and its 'CCC+' issue rating on its exit term loan on
CreditWatch with negative implications.
The CreditWatch negative indicates that S&P could affirm or lower
its ratings on Lumileds by one or more notches depending on whether
the company is able to secure fresh liquidity.
In the first nine months of 2024, Lumileds reported negative free
operating cash flow (FOCF) of $73 million. This was mainly the
result of still-low profitability. In addition, FOCF was depressed
by about $30 million of receivables overdue from First Brands
Group, which has not yet made the final payment for the acquisition
of Lumileds' lamps and accessories business. This level of FOCF,
however, marks an improvement from the cash burn of $176 million in
2023.
S&P said, "Rating downside could be influenced by our view of the
likelihood of a default or a debt restructuring. Given the
company's weak liquidity, the likelihood of a default or a debt
restructuring could increase depending on the additional liquidity
the company is able to secure and our expectations for operating
performance in 2025. Total available liquidity was about $77
million at the end of September 2024, which we do not believe will
fully cover its needs in the following 12 months. We note that the
company's $75 million revolving credit facility has been
terminated. In addition, the company must start to pay cash
interest, with no option for payment-in-kind, on its $300 million
exit loan from January 2025, which would increase cash interest
paid by about $15 million per year.
The LED division's operating performance improved in the first nine
months of 2024. In the nine months to September 2024, Lumileds
reported company-adjusted EBITDA of $9 million, up from negative
$47 million the previous year, for its LED segment. This reflected
a reduction in factory fixed costs through previous headcount
reductions and production footprint realignments, as well as lower
research and development (R&D) spending. Lumileds' long-term
profitability improvements could stem from an improving product mix
and further cost savings. We believe the company's greater
involvement in higher-value-added L2 auto LED products (carriers
and modules including connectors and electronics) could increase
its content per car in the automotive end-market and support its
profitability until the associated platforms ramp up. In addition,
Lumileds aims to increase the contribution of its high-power and
color solutions in general illumination from about 55%-60% of
segment sales in 2023. Although we do not expect these efforts will
materialize any time soon, we believe they could support improving
earnings within the next couple of years.
S&P said, "The CreditWatch negative indicates that we could lower
our rating on Lumileds by one or more notches depending on the
liquidity the company is able to secure, and our view of the
likelihood of a default or a distressed exchange. We could affirm
the rating if the company is able to secure sufficient liquidity
for more than the next 12 months without undergoing a distressed
exchange or similar event that we consider a default under our
criteria."
===============
P O R T U G A L
===============
MADEIRA: Moody's Affirms Ba1 Issuer Rating, Alters Outlook to Pos.
------------------------------------------------------------------
Moody's Ratings has changed the outlook on the Autonomous Region of
Madeira to positive from stable, while affirming the long-term
issuer rating of Ba1. The region's Baseline Credit Assessment (BCA)
was also upgraded by one notch to b1 from b2.
The change in Madeira's outlook to positive from stable reflects
the increasing likelihood that strong operating outcomes which
Madeira has recorded recently will be sustained over the next three
years. Should these projections materialize, it would reinforce
Moody's confidence in the long-lasting improvement of the region's
financial fundamentals.
The one-notch upgrade to the BCA of the region is driven by the
material decline in the debt burden and Moody's forecast of
continued economic growth. The affirmation of the Ba1 issuer rating
reflects the region's still high, despite the improvement, debt
levels which remain above those of its international peers.
Furthermore, Moody's anticipate that the region's structural fiscal
challenges will continue in the coming years. These include limited
spending flexibility in its principal responsibilities, such as
education, social services, and healthcare, which leave Madeira's
budget more exposed to impacts from negative shocks than other
regions with higher spending flexibility.
RATINGS RATIONALE
RATIONALE FOR THE OUTLOOK CHANGE
Moody's revision of Madeira's outlook to positive from stable is
based on the increased likelihood that Madeira could record
stronger than previously anticipated operating outcomes over the
next three years. Higher-than-expected tax revenue collection,
following the favorable fiscal outcomes of 2023, should boost the
region's revenue and support its fiscal consolidation efforts.
Portugal's positive economic growth should lead to increased tax
revenue collection and greater state transfers to the region of
Madeira. Moody's forecast is for Portugal to record nominal GDP
growth of 4.1% for 2024 and 4.4% for 2025. Tourism, accounting for
a significant portion of the region's GDP, is also demonstrating
sustained strength, further contributing to the region's revenues,
particularly through increased Value Added Tax (VAT) collection.
This could, in turn, assist Madeira in maintaining positive
operating balances and in reducing its debt burden. However, the
region's ability to control its expenditure growth remains
challenging due to its rigid expenditures, mainly in the healthcare
sector, which are likely to continue exerting pressure on its
budget.
Moody's also view the robust support currently provided to the
region by the Government of Portugal (A3 stable), through
guarantees or loans, when necessary, positively. Moody's believe
that this support will continue, as evidenced by the provision of
explicit guarantees on Madeira's loans and bond issuances in recent
years. This will continue to enhance the region's debt
affordability by facilitating access to lower interest rates.
Finally, Madeira will benefit from EUR706 million of Next
Generation EU funds until 2026, leading to a positive impact on the
local economy.
RATIONALE FOR THE BCA UPGRADE AND ISSUER RATING AFFIRMATION
Moody's decision to upgrade Madeira's standalone credit profile, or
BCA, to b1 from b2, primarily reflects the material significant
improvement in the region's debt burden and expectations this trend
will not be reversed over the next 3-4 years. Madeira's net direct
and indirect debt is forecasted to have declined to around 269% of
operating revenue at fiscal year-end 2024, down from the most
recent peak of 432% in 2020.
This improvement was primarily attributed to growth in revenues,
particularly corporate income tax, and strong operating outcomes
which limited financing needs. In 2023, Madeira reported a
financing budgetary surplus, the first since 2008, of approximately
6% of its operating revenue. Additionally, in the same year, it
recorded its highest primary operating margin across the last
decade.
The affirmation of Madeira's Ba1 rating is primarily driven by the
fact that, while improving, the region's debt burden will remain
high, projected to be above 250% until 2026. The region's debt to
GDP ratio is expected to stay significantly higher than that of
international peers with similar responsibilities. In addition, the
region continues to face fiscal challenges, especially in managing
costs in key areas such as education, social protection, and
healthcare, where spending flexibility is limited. These are
structural costs that account for half of the region's total
budget.
Madeira's rating of Ba1 reflects a BCA of b1 and Moody's assumption
of a high likelihood of extraordinary support from the Portuguese
government, as corroborated by the central government's track
record in offering financial support to the region through loans
and guarantees since 2011.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS
Madeira's ESG considerations have a limited impact on the current
rating, with potential for greater negative impact over time. Its
Credit Impact Score of (CIS-3), mainly reflects moderate exposure
to environmental, social and governance risks.
Madeira has moderate credit exposure to environmental risks (E-3).
The main environmental risk comes from rain-induced flash floods,
which can produce destructive water currents, as well as rapid
flooding of low-lying areas after intense rainfalls. Madeira's
natural capital is one of its most positive assets with about two
thirds of the island's area protected.
Madeira has moderate credit exposure to social risks (S-3). This
score is mainly driven by labour market challenges with relatively
high youth unemployment and a relatively low share of the
population with tertiary education. Other social aspects include
the increasing ageing population, which will affect social and
healthcare expenditure, for which the region is responsible for and
typically represents a high portion of expenses.
Madeira has moderate credit exposure to governance risks (G-3)
that, in the context of the sector, positions them below average.
While the region has recorded an improvement in the debt burden, it
remains high, which highlights ongoing difficulties faced by
management. The region's rigid budget due to its key
responsibilities for education, healthcare, and social services,
has a moderately negative impact on the region's policy
effectiveness. On the other hand, Moody's positively note that the
national government's guarantees on the region's loans and bond
issuances improve Madeira's debt affordability by allowing for
access to lower interest rates. The region provides transparent and
timely financial reports.
The specific economic indicators, as required by EU regulation, are
not available for this entity. The following national economic
indicators are relevant to the sovereign rating, which was used as
an input to this credit rating action.
Sovereign Issuer: Portugal, Government of
GDP per capita (PPP basis, US$): 47,226 (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): 1.9% (2023)
Gen. Gov. Financial Balance/GDP: 1.2% (2023) (also known as Fiscal
Balance)
Current Account Balance/GDP: 0.5% (2023) (also known as External
Balance)
External debt/GDP: 151.9% (2023)
Economic resiliency: a1
Default history: No default events (on bonds or loans) have been
recorded since 1983.
SUMMARY OF MINUTES FROM RATING COMMITTEE
On November 26, 2024, a rating committee was called to discuss the
rating of the Madeira, Autonomous Region of. The main points raised
during the discussion were: The issuer's economic fundamentals,
including its economic strength, have materially increased. The
issuer's fiscal or financial strength, including its debt profile,
has materially increased.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Madeira's rating could be upgraded if evidence emerges that Madeira
is able to maintain positive operating margins and generate
financing surpluses, as well as effectively reducing the region's
debt burden in the short-term. Continued economic growth, further
supporting a sustained strengthening of Madeira's revenue
generation potential and therefore provide increased mitigation
against the rigid expense structure, could also lead to upward
rating pressure.
Given the positive outlook a downgrade of the region is unlikely.
However, a deterioration in the region's fiscal situation,
reflected in a return to negative operating balances and an
increase in debt levels could exert downward pressure on its
rating. In addition, any indication of a weakening ability of the
central government to support the region would also exert pressure
on the rating of Madeira.
The principal methodology used in these ratings was Regional and
Local Governments published in May 2024.
===========
R U S S I A
===========
UZAGROSUGURTA: Fitch Puts on Watch Neg & Withdraws 'BB-' IFS Rating
-------------------------------------------------------------------
Fitch Ratings has placed Uzbekistan-based Uzagrosugurta Joint-Stock
Company's 'BB-' Insurer Financial Strength (IFS) rating on Rating
Watch Negative (RWN). Fitch has simultaneously withdrawn the
rating.
The RWN reflects weakened transparency and Fitch's consequent
uncertainty over Uzagrosugurta's financial position and the
probability of government support. Fitch has not received financial
information in a timely manner and therefore is unable to conduct a
robust analysis on the credit profile of the insurer.
Fitch has chosen to withdraw the rating due to the insufficient
information. Accordingly, Fitch will no longer provide ratings or
analytical coverage for Uzagrosugurta.
Key Rating Drivers
The key rating drivers are not applicable as ratings have been
withdrawn.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Not applicable as the ratings have been withdrawn.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Not applicable as the ratings have been withdrawn.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Uzagrosugurta
Joint-Stock Company LT IFS BB- Rating Watch On BB-
LT IFS WD Withdrawn
=========
S P A I N
=========
LUNA III SARL: Moody's Hikes CFR to Ba3 & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Ratings has upgraded the long-term corporate family rating
of Luna III S.a.r.l. ("Luna III"), the holding company of Urbaser
S.A.U. ("Urbaser"), to Ba3 from B1 and the probability of default
rating to Ba3-PD from B1-PD. Concurrently, Moody's have upgraded to
Ba3 from B1 the ratings of the senior secured 1st lien term loan
due 2028 and the senior secured 1st lien revolving credit facility
due 2027. The outlook has been changed to stable from positive.
RATINGS RATIONALE
The upgrade to Ba3 reflects Urbaser's strong track record of
operating performance in recent years, which has allowed for a
significant deleveraging essentially driven by organic growth. The
company has demonstrated ongoing EBITDA growth in an environment
that has seen a high degree of inflationary pressure. In that
regard, Moody's note that Urbaser benefits from a high degree of
revenue visibility, which is essentially supported by the company's
long term contracts characteristics under which concession fees
provide an important hedge against cost volatility.
For the nine months to September 2024, Urbaser reported flat
revenues of EUR1.9 billion as strong growth in its Industrial
Solutions segment was fully offset by declining revenues from Waste
treatment. The company's profitability nonetheless continued to
increase with Urbaser's normalized EBITDA margin increasing to 23%,
up from 22% in the prior period. On the back of EBITDA growth and
reduction of debt following the disposal of its UK subsidiary
earlier this year, Moody's estimate Luna III's leverage – defined
as Moody's adjusted debt/EBITDA – to be around 4.3x for the
twelve months to September 2024.
Urbaser has over the past two to three years streamlined its
business profile and has exited certain geographic markets,
although its presence in Argentina continues to add a degree of
volatility to its EBITDA, as evidenced by the EUR51 million
hyperinflation charge that the company incurred in 2023. Moody's
note, however, that the exit out of the UK and the Nordics has
contributed to a higher geographical concentration in its home
market in Spain. As a consequence, Urbaser is now somewhat more
exposed to the evolution of the macroeconomic environment in
Iberia.
Urbaser's Ba3 CFR continues to reflect (1) its solid track record
and expertise in waste management, combined with significant
diversification across waste management activities; (2) some
geographical diversification; (3) a good degree of visibility into
cash flow generation supported by a significant number of
concessions under management; and (4) the supportive regulatory and
industry trends in the countries where it operates.
At the same time, credit quality remains constrained by (1) its
still high financial leverage; (2) some exposure to contract
renewal risk, particularly in the waste collection business; and
(3) the company's exposure to cyclical waste volumes and changing
macroeconomic conditions in the waste treatment business.
LIQUIDITY
Moody's expect liquidity to remain good over the next 12-18 months.
As at the end of September 2024, the company had EUR164 million of
cash. Further liquidity cushion is provided by access to a EUR400
million undrawn revolving credit facility ("RCF"). Drawings under
the RCF and commercial paper have been fully reimbursed with
proceeds stemming from the disposal of the company's UK
subsidiary.
STRUCTURAL CONSIDERATIONS
The senior secured facilities – including the EUR1.25 billion
term loan – are rated Ba3, in line with Luna III's Ba3 CFR. This
reflects the upstream guarantees and share pledges from material
subsidiaries of the group. In particular, the facilities are
guaranteed by subsidiaries representing at least 80% of the group's
consolidated EBITDA.
RATIONALE FOR STABLE OUTLOOK
The stable outlook reflects Moody's expectation that Urbaser will
continue to grow its EBITDA in 2025 allowing for its leverage to
remain sustainably below 4.5x. The stable outlook is solidly
positioned and accommodates some financial flexibility for bolt-on
acquisitions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Upward pressure could develop should Luna III continue to grow its
EBITDA so that its leverage moves well below 4x on a sustainable
basis. Upward pressure would also require further track record of
financial policies commensurate with a higher rating level.
Conversely, downward pressure could develop should Luna III's
leverage rise above 4.5x for a prolonged period of time.
The principal methodology used in these ratings was Environmental
Services and Waste Management published in August 2024.
COMPANY PROFILE
Luna III is the holding company of Urbaser, one of the largest
waste management companies in Spain. Urbaser is active in the
collection, treatment and recycling of solid urban waste. The group
is also responsible for the provision of industrial treatment and
other ancillary services. In 2023, Urbaser reported revenues of
EUR2.5 billion.
MADRID RMBS I: S&P Raises Class E Notes Rating to 'B+ (sf)'
-----------------------------------------------------------
S&P Global Ratings raised its credit ratings on Madrid RMBS I,
Fondo de Titulizacion de Activos' class C notes to 'AA+ (sf)' from
'AA (sf)', class D notes to 'A (sf)' from 'BB+ (sf)', and class E
notes to 'B+ (sf)' from 'CCC- (sf)'. At the same time, S&P affirmed
its 'AAA (sf)' rating on the class A2 notes and its 'AA+ (sf)'
rating on the class B notes. S&P also raised its ratings on Madrid
RMBS II, Fondo de Titulizacion de Activos' class C notes to 'AA+
(sf)' from 'AA (sf)', class D notes to 'A (sf)' from 'BB+ (sf)',
and class E notes to 'B+ (sf)' from 'CCC- (sf)'. At the same time,
S&P affirmed its 'AAA (sf)' rating on the class A3 notes and its
'AA+ (sf)' rating on the class B notes.
The rating actions reflect its full analysis of the most recent
information that S&P has received and the transactions' current
structural features.
S&P said, "After applying our global RMBS criteria, the overall
effect is a marginal increase in our expected losses due to a
marginal increase of our weighted-average loss severity (WALS)
assumptions, driven by higher market value declines. Nevertheless,
the overall credit enhancement continues to increase, which drives
the upgrades."
Madrid RMBS I and Madrid RMBS II are Spanish RMBS transactions that
securitize first-ranking mortgage loans. Bankia originated the
pools, which comprise loans granted to borrowers mainly located in
Madrid.
Table 1
Madrid RMBS I credit analysis results
WAFF (%) WALS (%)
AAA 29.51 17.59
AA 20.03 13.35
A 15.35 6.99
BBB 10.42 4.33
BB 5.42 3.06
B 4.21 2.23
WAFF--Weighted-average foreclosure frequency.
WALS--Weighted-average loss severity.
Table 2
Madrid RMBS II credit analysis results
WAFF (%) WALS (%)
AAA 27.60 17.52
AA 18.73 13.24
A 14.44 6.98
BBB 9.88 4.46
BB 5.29 3.18
B 4.19 2.33
WAFF--Weighted-average foreclosure frequency.
WALS--Weighted-average loss severity.
Madrid RMBS I
Credit enhancement for all classes of notes has increased since
S&P's previous full review, due to the collateral amortization.
S&P said, "The notes are repaying sequentially as one of the
conditions for the pro rata amortization is not met. The reserve
fund is only at 4.12% of the outstanding balance notes compared
with 11.90% of target, building up after being fully depleted from
March 2013 to April 2019. The build-up is due to the transaction's
recent good performance, given improved macroeconomic conditions
(relative to the 2008 crisis) and Caixabank's enhanced servicing
policies. Before that, the transaction did not perform well, with
high arrears and defaults that resulted in reserve fund draws
during the financial and sovereign crisis in Spain.
"Following the application of our criteria, we have determined that
our ratings on the classes of notes in this transaction should be
the lower of (i) the rating as capped by our structured finance
sovereign risk criteria, (ii) the rating as capped by our
counterparty criteria, or (iii) the rating that the class of notes
can attain under our global RMBS criteria.
"Our operational, counterparty risk, sovereign risk, and legal risk
analyses remain unchanged since our previous review. Therefore, the
ratings assigned are not capped by any of these criteria.
"Loan-level arrears currently stand at 1.51%. The transaction has a
high number of loans that defaulted during the financial crisis,
and several of these still need to be worked out. Due to the
uncertainty on when these recoveries might be realized and to test
the ability of the outstanding notes to being repaid without the
benefit of such recoveries, we have tested the transaction's
sensitivity to various recovery scenarios including no credit given
to recoveries on already defaulted assets."
The outstanding balance of defaulted credit rights (net of
recoveries), represents 6.83% of the closing pool balance. The
interest deferral triggers have not been breached for any of the
classes.
S&P said, "We have affirmed our 'AAA (sf)' rating on the class A2
notes and 'AA+ (sf)' rating on the class B notes based on the
strong cash flow model results, which encompass sensitivity to
increased defaults in the current macroeconomic environment, and a
decline in recovery rates on already defaulted assets. The ratings
on these classes of notes reflect their overall credit enhancement
and position in the waterfall.
"Under our cash flow analysis, the class C, D, and E notes could
withstand stresses at a higher rating than the currently assigned
ratings. However, the ratings on these classes of notes also
reflect their overall credit enhancement and position in the
waterfall, potential exposure to increased defaults, their reliance
on recovery inflows from outstanding defaulted assets, and the
reserve fund's level, which although increasing on recent interest
payment dates (IPDs), remains limited and significantly below the
target amount."
Madrid RMBS II
Credit enhancement for all classes of notes has increased since our
previous full review, due to the deleveraging and the reserve
fund's partial replenishment at 4.49% of the current balance.
Loan-level arrears currently stand at 2.17%. The transaction has a
high number of loans that defaulted during the financial crisis,
and several of these still need to be worked out. Due to the
uncertainty on when these recoveries might be realized and to test
the ability of the outstanding notes to being repaid without the
benefit of such recoveries, S&P has tested the transaction's
sensitivity to various recovery scenarios including no credit given
to recoveries on already defaulted assets.
The outstanding balance of defaulted credit rights (net of
recoveries), represents 7.09% of the closing pool balance. The
interest deferral trigger was breached for the class E notes and
interest was not paid as the reserve fund was depleted to cover
defaulted assets.
Since 2019, the reserve fund started to replenish and the class E
notes paid all due interest since 2013. Since then, the notes have
been paying timely interest on every IPD.
S&P said, "We have affirmed our 'AAA (sf)' rating on the class A3
notes and 'AA+ (sf)' rating on the class B notes based on the
strong cash flow model results, which encompass sensitivity to
increased defaults in the current macroeconomic environment, and a
decline in recovery rates on already defaulted assets. The ratings
on these classes of notes reflect their overall credit enhancement
and position in the waterfall.
S&P raised its ratings on the class C and D notes to below their
passing cash flow levels. The ratings reflect their overall credit
enhancement and position in the waterfall, deteriorating
macroeconomic conditions, potential exposure to increased defaults,
and the reserve fund's level at 4.49% of the current balance.
The class E notes started missing timely interest payments in 2009
as their performance deteriorated drastically. In 2019, the notes
paid all due and unpaid interest. This class of notes ranks senior
to the reserve fund and benefits from any cash sitting within the
reserve fund. Under S&P's cash flow analysis, the class E notes
could now withstand stresses at a higher rating than the currently
assigned rating. However, the rating on this class of notes also
reflects their overall credit enhancement and position in the
waterfall, potential exposure to increased defaults, their reliance
on recovery inflows from outstanding defaulted assets, and the
current reserve fund level.
Macroeconomic forecasts and forward-looking analysis
S&P said, "We consider a transaction's resilience in case of
additional stresses to some key variables, in particular defaults
and loss severity, to determine our forward-looking view.
"In our view, the ability of the borrowers to repay their mortgage
loans will be highly correlated to macroeconomic conditions,
particularly the unemployment rate, consumer price inflation, and
interest rates. We expect unemployment in Spain to remain stable,
and we anticipate inflation decreasing to 3.0% in 2024, down from
the peak of 8.3% in 2022.
"Furthermore, a decline in house prices typically affects the level
of realized recoveries. For Spain in 2024 and 2025, we expect an
increase to 4% in 2024 and 3% in 2025 in year-over-year changes in
nominal house prices.
"We therefore ran additional scenarios with increased defaults up
to 30%. The results of the above sensitivity analysis indicate a
deterioration that is in line with the credit stability
considerations in our rating definitions for both transactions."
===========
S W E D E N
===========
HEIMSTADEN BOSTAD: Fitch Puts 'BB' Final Rating to EUR500M Hybrid
-----------------------------------------------------------------
Fitch Ratings has assigned Heimstaden Bostad AB's EUR500 million
perpetual capital securities a final rating of 'BB' following the
receipt of final documentation. The hybrid qualifies for 50% equity
credit and ranks equally with existing hybrid instruments.
The proceeds from the hybrid issue are being used to partly
refinance Heimstaden Bostad's existing EUR800 million hybrid bond
callable in November 2024. Of this existing hybrid's nominal
amount, EUR589 million remains outstanding and EUR211 million is
held by Heimstaden Bostad. This part of the hybrid, held on its own
books, is cancelled as part of this transaction.
Key Rating Drivers
SECURITIES
Use of Proceeds: Following the hybrid issue, Heimstaden Bostad is
making a tender offer for the outstanding EUR589 million hybrid
bond at par value using EUR500 million in proceeds and EUR89
million of its cash-on-hand (plus transaction costs). This implies
a net reduction of outstanding hybrids.
No Permanence Impact: The transaction does not change Fitch's view
on the permanence of remaining hybrids. Heimstaden Bostad's
management states it remains committed to retaining hybrids as part
of its capital structure.
Fixed-to-Reset Coupon: The hybrids have a fixed 6.25% coupon until
4 March 2030 before resetting (every five years) to a five-year
euro swap rate plus initial margin and any step-up. If the hybrid
is not called ahead of its first step-up date, 4 March 2035, the
initial margin will increase by 25bp and by a cumulative total
100bp at its second step-up date, 4 March 2050.
Hybrid Notched Off IDR: The perpetual hybrid securities are rated
two notches below Heimstaden Bostad AB's Long-Term Issuer Default
Rating (IDR) of 'BBB-'. This reflects the hybrid's deeply
subordinated status, ranking behind senior creditors and senior
only to equity (ordinary and preference shares), with coupon
payments deferrable at the discretion of the issuer and no formal
maturity date. It also reflects the hybrid's greater loss severity
and higher risk of non-performance than senior obligations.
Equity Treatment: Under Fitch's hybrid criteria, the securities
qualify for 50% equity credit due to deep subordination, a
remaining effective maturity of at least five years, full
discretion to defer coupons for at least five years and limited
events of default. Equity credit is limited to 50%, given the
cumulative interest coupon, a feature that is more debt-like in
nature.
Effective Maturity Date: Although the hybrid securities are
perpetual, Fitch deems their effective maturity to be 20 years
after the first reset date, on 4 March 2050, in accordance with the
agency's Corporate Hybrids Treatment and Notching Criteria. From
this date, the issuer will no longer be subject to replacement
language, which discloses the intent to redeem the instrument with
the proceeds from similar instrument or equity. The instrument's
equity credit would change to 0% five years before the effective
maturity date (ie 15 years after the respective reset date). The
coupon step-up remains within Fitch's aggregate threshold rate of
100bp.
ISSUER
Bond Market More Receptive: The hybrid issue follows Heimstaden
Bostad's senior unsecured bond issuance of EUR500 million in
October 2024, and SEK1.2 billion and SEK1.3 billion in August and
September 2024, respectively. These completed issuance indicate an
increasingly receptive bond market.
Derivation Summary
Heimstaden Bostad's portfolio of residential-for-rent assets of
EUR28.6 billion and 161,553 units at end-2023 is materially larger
than those of residential peer UK-based Annington Limited (IDR:
BBB/Negative Outlook; EUR8.9 billion; about 38,000 units) and
Grainger plc (IDR: BBB-/Stable; EUR4.6 billion; 9,692 units). It is
also larger than SCI LAMARTINE (BBB+/Stable) EUR2.1 billion
Paris-focused French residential portfolio and D.V.I. Deutsche
Vermogens- und Immobilienverwaltungs GmbH (BBB-/Stable; EUR3.1
billion Berlin-focused German portfolio. The portfolio of Vonovia
SE (IDR: BBB+/Stable) is larger at close to EUR80 billion in
value.
The geographical diversification of Heimstaden Bostad's portfolio,
which balances out its city-specific developments such as Berlin's
rent regulation, stands out as a material benefit to its ratings
compared with peers'.
The net initial yields (NIYs) on residential-for-rent are lower
than commercial real estate, and reflect their lower risk profile
including stable rents, high occupancy, demand outstripping supply,
and the different interest rates across the countries. Fitch
acknowledges the higher debt capacity of the above
residential-for-rent companies compared with the more volatile
commercial real estate (office, retail, industrial) companies and
adjusts all their rated companies' net debt/recurring
rental-derived EBITDA thresholds for their NIYs and the quality of
each entity's portfolio.
Heimstaden Bostad's net debt/EBITDA leverage of 21.4x in 2023 is
higher than higher-rated Vonovia (end-2023: 18.8x) and Lamartine
(forecast at 16x at end-2024) and also lower-rated DVI
(residential-based measure; end-2023: 16.2x). During this high
interest-rate period, all four have slowed or stopped expansionary
capex and acquisitions to focus capital on deleveraging.
Key Assumptions
Fitch's Key Assumptions within Its Rating Case for the Issuer
- Like-for-like rental growth of 5.2% in 2024, reflecting phased
inflationary catch-ups, followed by 4.4% in 2025, 3.9% in 2026 and
3.5% in 2027
- Privatisation programme asset sales of about SEK7.7 billion in
2024 and SEK11.5 billion in 2025
- No additional equity during the forecast period
- No dividend payments in 2024 and 2025. Dividend payments to
resume in 2026
- No additional acquisitions during 2024 -2027 other than about
SEK3.5 billion for funded projects or forward purchases
- Average cost of debt includes future years' policy rates from
Fitch's Global Economic Outlook, and the benefit of Heimstaden
Bostad's derivatives book, resulting in a Fitch-calculated average
cost of debt (including hybrids and 2025's coupon step-ups) of 3.3%
in 2024, 3.5% in 2025 and 3.3% in 2026 and 2027
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Net debt/EBITDA above 24x
- EBITDA net interest cover remaining below 1.4x
- Unencumbered investment property assets/unsecured debt below
2.0x
- Changes to the governance structure that loosen the ring-fencing
around Heimstaden Bostad
- A 12-month liquidity score approaching 1.0x
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Successful progress with the privatisation (disposal) programme
- During this period of Heimstaden Bostad's constrained access to
capital, a liquidity score of above 1.25x for the first 12 months,
and a liquidity score of above 1.0x for the subsequent 12 months
- Net debt/EBITDA below 22x
- EBITDA net interest cover above 1.4x
Liquidity and Debt Structure
Heimstaden Bostad's cash position of SEK14.4 billion at end-3Q24 is
supplemented by undrawn revolving credit facilities (RCFs) of about
SEK16.3 billion (available for the next 12 months), which
comfortably cover about SEK22.8 billion scheduled debt maturities
within the next 12 months.
In October 2024, Heimstaden Bostad accessed the Eurobond market and
raised an additional SEK5.8billion equivalent (EUR500 million) with
a five-year term at a 3.875% fixed coupon. Together with SEK bonds
issued during 3Q24, this brings the total bond issuance in 2H24 to
SEK8.2 billion, demonstrating improved receptiveness of the bond
market. The SEK bonds issued have two- and three-year maturities at
floating STIBOR plus 240bp and 200bp, respectively.
In August 2024, Heimstaden Bostad also signed a EUR725 million loan
secured on part of its Dutch portfolio. The sustainability-linked
credit facility matures in 2031 and replaced an existing bank loan
maturing in 2026, bringing in net proceeds of EUR200 million.
Issuer Profile
Heimstaden Bostad is a pan-European residential-for-rent real
estate company. It is owned by Heimstaden AB, together with other
long-term Nordic institutional investors.
Date of Relevant Committee
20-Mar-2024
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Prior
----------- ------ -----
Heimstaden Bostad AB
Subordinated LT BB New Rating BB(EXP)
=============
U K R A I N E
=============
KERNEL HOLDING: S&P Upgrades LT ICR to 'CCC', Outlook Negative
--------------------------------------------------------------
S&P Global Ratings raised its long-term issuer credit rating on
Ukrainian grain exporter Kernel Holding to 'CCC' from 'CC' and on
its senior notes to 'CCC' from 'CC'.
The negative outlook indicates that S&P sees elevated risks that
Kernel could default on some or all of its debt instruments over
the next 12 months.
S&P said, "We view positively that Kernel repaid its 2024 bonds in
full and on time. On Oct. 17, 2024, Kernel successfully repaid its
$300 million senior secured notes thanks to its sizable cash
balances and relaxed regulation by Ukraine's central bank. We view
this as credit positive because it demonstrates Kernel's
willingness to honor its financial obligations to its creditors. We
also note that the group had capacity to repay this large debt
maturity thanks to over $800 million of cash balances available on
June 30, 2024, because the group generated over $300 million of
FOCF in fiscal 2024 thanks to good business performance. In
addition, the group benefited from the supportive measures of the
Ukraine Central Bank which since July 2024 has authorized Ukrainian
issuers to service Eurobond coupons and has allowed agricultural
exporters like Kernel to have up to 120 days (versus 90 days
previously) to repatriate cash from abroad into Ukraine. We believe
these measures enhance Kernel's financial flexibility and cash
management and should continue to do so.
"Kernel's fiscal 2024 cash flows and credit metrics were slightly
better than our base-case scenario. For the fiscal year ended June
30, 2024, Kernel generated adjusted EBITDA $593 million (versus
estimated $450 million-$500 million) and FOCF of $326 million
(versus estimated $250 million-$300 million). In comparison with
last year, credit metrics improved in line with adjusted debt
levels, most notably EBITDA interest coverage at 5.2x (versus 4.2x
last year), while adjusted debt to EBITDA decreased slightly to
1.8x (versus 2.2x). Overall, the group's operating performance
rebounded significantly from the second quarter of fiscal 2024
(October 2023) when the Black Sea export maritime route reopened
for Ukrainian exporters. The good harvest in the summer of 2023 in
Ukraine enabled Kernel to sharply increase its oilseed processing
and export volumes. However, revenue and profitability
"For 2025 we project cash flow and credit metrics to be overall
stable but we see risk of high volatility around our base-case due
to the very challenging operating environment in Ukraine. In our
base case for fiscal 2025, we assume the group will be able to
continue exporting most of its volumes through the Black Sea,
Ukraine's main gateway for agriculture exports and a key support of
the country's export businesses. We note the group can and has in
the past used alternative export routes such as barges on the
Danube river or trucks, but these are more costly and restrict
volumes exports.
"We forecast S&P Global Ratings-adjusted EBITDA of $450
million-$500 million and FOCF of $300 million-$350 million for
fiscal 2025. This assumes continued solid demand in international
markets (Asia, Europe, the Middle East) for Kernel's agricultural
products. Given the poor harvest in Ukraine in the summer of 2024,
we see the group's volumes declining but revenue and EBITDA
generation should benefit from higher market prices of products
like sunflower oil. We see the group continuing to bear operating
cost inflation coming from wages, logistical, and energy costs.
FOCF should benefit from lower interest costs following debt
repayments, and stable capex.
"We believe the group is likely to default, absent a positive
development in the operating environment, which we currently do not
foresee. The war between Ukraine and Russia limits our visibility
on Kernel's cash flows, because of the risk that the Black Sea
corridor, the most profitable export route, will close again. We
note that in fiscal 2022 adjusted EBITDA dropped more than 50% and
adjusted leverage rose to 9x from 2x. We thus see continued high
refinancing risks, with $600 million of gross debt outstanding on
June 30, 2024 (proforma the recent bond repayment, excluding
leases), while Kernel has no access to public capital markets and
is relies on internal cash generation and a limited number of banks
and financial institutions to fund its working capital-intensive
business and its capex.
"The negative outlook indicates our view of elevated risks that
Kernel's business operations could again be heavily disrupted if
the Black Sea corridor is closed for vessels, and if its ability to
service its financial obligations on time and in full weakens
within the next 12 months.
"We could lower the ratings if we see that Kernel is likely to
pursue a debt-restructuring transaction that we view as distressed,
or if it defaults on interest or principal payments on any debt
instrument.
"We could take a positive rating action, such as a revision of the
outlook to stable or even an upgrade, if we have higher visibility
on Kernel's ability to service and meet its financial obligations
beyond the next 12 months. This would most likely come from a
reduction in geopolitical tensions in Ukraine, which would notably
lower risks that the Black Sea corridor would be closed again."
===========================
U N I T E D K I N G D O M
===========================
ATOM BREWING: Lewis Business Named as Joint Administrators
----------------------------------------------------------
Atom Brewing Co Limited was placed into administration proceedings
in the High Court of Justice, Business & Property Courts in
Manchester, Insolvency & Companies List (CHD), Court Number:
CR-2024-MAN-001542, and Matthew Russell and Gareth James Lewis of
Lewis Business Recovery & Insolvency, were appointed as
administrators on Nov. 27, 2024.
Atom Brewing is a manufacturer and wholesaler of beer.
Its registered office and principal trading address is at Unit 4,
Food & Drink Park, Malmo Road Sutton Fields Ind Estate (West),
Hull, HU7 0YF.
The joint administrators can be reached at:
Matthew Russell
Gareth James Lewis
Lewis Business Recovery & Insolvency
Suite E10, Joseph's Well
Westgate, Leeds
LS3 1AB
For further details, contact:
Liam Ryde
Email: liam@lewisbri.co.uk
Tel No: 0113 245 9444
GALAXY BIDCO: Moody's Gives B2 Rating to New Senior Secured Bonds
-----------------------------------------------------------------
Moody's Ratings has assigned a B2 rating to the backed senior
secured bonds to be issued by Galaxy Bidco Limited (Galaxy Bidco),
a subsidiary of Galaxy Finco Limited (Galaxy Finco). Galaxy Finco
is an intermediate holding company of Domestic & General
Acquisitions Holdings Limited (D&G or the group). The rating is
based on the expectation that there will be no material difference
between current and final documentation in relation to the bond.
RATINGS RATIONALE
The B2 rating on the backed senior secured bonds is at the same
level as Galaxy Finco's corporate family rating (CFR), which
reflects the expected debt structure of the group after the
issuance, where all financial debts will rank pari passu.
The bonds are being issued to part refinance the outstanding debt
of Galaxy Bidco and Galaxy Finco as well as drawings on the group's
super senior revolving credit facility (RCF). The bond issuance
follows Galaxy Bidco's issuance of the backed Term Loan B in
November. The RCF will concurrently be refinanced with a new 4.5
year senior secured facility, ranking pari passu with other senior
secured creditors. As a result, the level of obligations ranking
senior to financial debt, namely trade payables and lease
obligations in operating subsidiaries, will be low going forward.
The group expects new senior secured issuances including the bonds
to total GBP800 million, which will maintain leverage around
current levels, and have a term of 5 years which will remove near
term refinancing risk. Moody's expect finance costs to increase as
a result of the transaction, however Moody's estimate that
profitability will remain supportive of the group's current CFR.
Galaxy Finco's B2 CFR reflects the group's strong market position
in the UK, providing extended warranties for domestic appliances,
growing franchise in Europe and the US, strong revenue visibility
driven by good retention rates and new business growth and a solid
track record of stable EBITDA growth through the economic cycle.
Offsetting these factors are execution risk in achieving profitable
growth and cash generation in the US business, high leverage and
low or negative free cash flow as the group invests in growth and
technology.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The following factors could lead to an upgrade of the ratings: (i)
gross debt-to-EBITDA leverage (Moody's calculation) remaining below
6x on a sustainable basis; (ii) US operations contributing positive
EBITDA and sustained positive free cash flow generation.
Conversely, the following factors could lead to a downgrade of the
ratings: (i) not being able to realise growth and profitability
targets from US expansion; (ii) weaker financial flexibility,
evidenced by leverage remaining above 7x for a prolonged period;
and (iii) meaningful deterioration in D&G's free cash flows and
liquidity, beyond its current business plan expectations.
PRINCIPAL METHODOLOGY
The principal methodology used in this rating was Insurance Brokers
and Service Companies published in February 2024.
KIDSON HOMES: MHA Named as Administrators
-----------------------------------------
Kidson Homes Ltd was placed into administration proceedings in the
High Court of Justice, Court Number: CR-2024-007147, and James
Alexander Snowdon and Georgina Marie Eason of MHA were appointed as
administrators on Nov. 22, 2024.
Newspaper House specializes in the development of building
projects.
Its registered office is at Marston House, 5 Elmdon Lane, Marston
Green, Solihull, B37 7DL.
The administrators can be reached at:
Georgina Marie Eason
James Alexander Snowdon
MHA
6th Floor, 2 London Wall Place
London, EC2Y 5AU
For further details, contact:
Tom Harrison
Email: Tom.Harrison@mha.co.uk
Tel No: 0207 429 4100
TRANSFORM HEALTHCARE: Interpath Ltd Named as Joint Administrators
-----------------------------------------------------------------
Transform Healthcare Limited, trading as Transforming Lives,
Electiva, Identite, was placed into administration proceedings in
the High Court of Justice Business and Property Courts in Leeds
Insolvency and Companies List (ChD), No CR-2024-LDS-001168, and
Howard Smith and Richard John Harrison of Interpath Advisory,
Interpath Ltd, were appointed as joint administrators on Nov. 27,
2024.
Transform Healthcare fka Transform Healthcare Holdings Limited
specializes in human healthcare activities.
Its registered office and principal trading address is at 132
Manchester Road, Rochdale, Greater Manchester, OL11 4JQ.
The joint administrators can be reached at:
Howard Smith
Interpath Advisory
Interpath Ltd
4th Floor, Tailors Corner
Thirsk Row, Leeds
LS1 4DP
-- amd --
Richard John Harrison
Interpath Advisory
Interpath Ltd
10th Floor, One Marsden Street
Manchester, M2 1HW
For further details, contact:
Fay Dugmore
Tel No: 0203 989 2779
VACATION FINANCE: Quantuma Advisory Named as Administrators
-----------------------------------------------------------
Vacation Finance Limited was placed into administration proceedings
in the High Court of Justice Business and Property Courts of
England and Wales, Court Number: CR-2024-006826, and Dina Devalia
and Frank Wessely of Quantuma Advisory Limited, were appointed as
administrators on Nov. 20, 2024.
Vacation Finance, trading as VFL Finance Solutions, specialized in
credit granting.
Its registered office is at 7 Christie Way, Christie Fields,
Manchester, M21 7QY (in the process of being changed to 2nd Floor
Arcadia House, 15 Forlease Road, Maidenhead, SL6 1RX). Its
principal trading address is at 7 Christie Way, Christie Fields,
Manchester, M21 7QY.
The administrators can be reached at:
Dina Devalia
Frank Wessely
Quantuma Advisory Limited
7th Floor, 20 St Andrew Street
London, EC4A 3AG
Further details, contact:
Anish Halai
Email: Anish.Halai@quantuma.com
Tel No: 01628 478100
===============
X X X X X X X X
===============
[*] BOOK REVIEW: Charles F. Kettering: A Biography
--------------------------------------------------
Author: Thomas Alvin Boyd
Publisher: Beard Books
Softcover: 280 pages
List Price: $34.95
Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1587981335/internetbankrupt
Charles Kettering was born on a farm in northern Ohio in 1876. He
once said, "I am enthusiastic about being an American because I
came from the hills in Ohio. I was a hillbilly. I didn't know at
that time that I was an underprivileged person because I had to
drive the cows through the frosty grass and stand in a nice warm
spot where a cow had lain to warm my (bare) feet. I thought that
was wonderful. I walked three miles to the high school in a little
village and I thought that was wonderful, too. I thought of all
that as opportunity. I didn't know you had to have money. I
didn't know you had to have all these luxuries that we want
everybody to have today."
Charles Kettering is the embodiment of the American success story.
He was a farmer, schoolteacher, mechanic, engineer, scientist,
inventor and social philosopher. He faced adversity in the form of
poor eyesight that plagued him all his life. He was forced to drop
out of college twice due to his vision before completing his
electrical engineering degree.
Kettering went on to become a leading researcher for the U.S.
automotive industry. His company, Dayton Engineering Laboratories,
Delco, was eventually sold to General Motors and became the
foundation for the General Motors Research Corporation of which
Kettering became vice president in 1920. He is best remembered for
his invention of the all-electric starting, ignition and lighting
system for automobiles, which replaced the crank. It first
appeared as standard equipment on the 1912 Cadillac.
Kettering held more than 300 patents ranging from a portable
lighting system, Freon, and a World War I "aerial torpedo," to a
device for the treatment of venereal disease and an incubator for
premature infants. He conceived the ideas of Duco paint and ethyl
gasoline, pursued the development of diesel engines and solar
energy, and was a pioneer in the application of magnetism to
medical diagnostic techniques.
This book shows the wisdom and common sense of Kettering's approach
to engineering and life. It received favorable reviews when was
first published in 1957. The New York Times called it an
"old-fashioned narrative biography, written in clean, straight-line
prose-no nuances, no overtones, .but with enough of Kettering's
philosophy and aphorisms, his tang and humor, to convey his
personality." The New York Herald Tribune Book Review said,
"(t)his lively book is particularly successful in its reflection of
Kettering's restless, searching mind and tough persistence."
Kettering once showed a passing tramp the "fun" of digging holes
properly and gave him a job. The man, then promoted to foreman,
later told Kettering, "(i)f only years ago someone had taught me
how much fun it is to work, when a fellow tries to do good work, I
would never have become the bum I was." Kettering once advised,"
whenever a new idea is laid on the table it is pushed at once into
the wastebasket. (i)f your idea is right, get to that wastebasket
before the janitor. Dig your idea out and lay it back on the
table. Do that again and again and again. And after you have
persisted for three or four years, people will say 'Why, it does
begin to look as through there is something to that after all.'"
Charles Kettering died on November 24, 1958.
Thomas Alvin Boyd was a chemical engineer and a member of Charles
Kettering's research staff for more than 30 years.
*********
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 * * *