/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/250109.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 Thursday, January 9, 2025, Vol. 26, No. 7 Headlines F R A N C E ACTICOR BIOTECH: Commercial Court Orders Mandatory Liquidation KAPLA HOLDING: S&P Rates New EUR350M Notes 'B+', Outlook Stable LA POSTE: S&P Rates New Subordinated Hybrid Notes 'BB+' TEREOS FINANCE: S&P Rates New EUR300MM Senior Unsecured Notes 'BB-' G E R M A N Y DEUTSCHE LUFTHANSA: S&P Rates New Sub. Hybrid Capital Notes 'BB' I R E L A N D PENTA CLO 7: S&P Assigns Prelim B- (sf) Rating to Cl. F-R Notes PROVIDUS CLO XI: S&P Assigns B- (sf) Rating to Class F-2 Notes I T A L Y ENEL SPA: S&P Rates New Subordinated Hybrid Instrument 'BB+' N E T H E R L A N D S HUNTER DOUGLAS: Moody's Rates New Amended 1st Lien Term Loans 'B1' U N I T E D K I N G D O M EVANS TEXTILE: BDO LLP Named as Joint Administrators GROWPURA LIMITED: FRP Advisory Named as Joint Administrators INDO LIGHTING: Begbies Traynor Named as Administrators STEGA UK: Quantuma Advisory Named as Administrators - - - - - =========== F R A N C E =========== ACTICOR BIOTECH: Commercial Court Orders Mandatory Liquidation -------------------------------------------------------------- MarketScreener reports that Acticor Biotech announced on January 6, 2025, that the Paris Commercial Court ordered its compulsory liquidation last January 3, 2025. "Despite our best efforts in recent months, we were unable to secure refinancing within the deadlines set by the court-ordered receivership process," said CEO Dr. Gilles Avenard, the report related. Following the court's decision, Acticor Biotech's shares will remain suspended, and the company will soon file an application with Euronext to have them delisted, according to a brief statement. According to MarketScreener, the company, which had been working to develop a pioneering ("first-in-class") drug for stroke treatment, encountered setbacks after underwhelming clinical trial results last 2024. Across three international trials involving over 600 stroke patients, the drug did not demonstrate significant neurological improvements, except in a sub-group of patients with intracerebral hemorrhage, where it reduced mortality by a factor of three. About Acticor Biotech About Acticor Biotech ACTICOR BIOTECH is a clinical-stage biopharmaceutical company founded in 2013 from the work of INSERM, is developing glenzocimab, a humanized monoclonal antibody fragment (fab) targeting the GPVI platelet receptor for the treatment of cardiovascular emergencies and acute thrombotic diseases. KAPLA HOLDING: S&P Rates New EUR350M Notes 'B+', Outlook Stable --------------------------------------------------------------- S&P Global Ratings assigned its 'B+' issue rating and '3' recovery rating on Kapla Holding S.A.S. (Kiloutou)'s EUR350 million proposed notes. S&P affirmed the 'B+' issue rating and '3' recovery rating on the existing EUR650 million 2030 notes that the group aims to upsize as part of the refinancing. S&P affirmed the 'B+' long-term issuer credit rating on Kiloutou. S&P said, "The stable outlook reflects our expectation that Kiloutou will continue to integrate bolt-on acquisitions, increase revenue and EBITDA, and will continue to exhibit adjusted EBITDA margins higher than 35%. We forecast adjusted debt to EBITDA will be comfortably below 5.0x in 2025-2026. "We expect that Kiloutou's credit metrics will remain stable through 2025-2026, we also expect soft demand in the construction sector. We expect the European construction sector to be marked by negative output growth in 2024 owing to high interest rates and persistent inflation which have weighed on consumer confidence. The sector outlook for 2025 is also subdued. Although Kiloutou generates about 46% of its revenue from the construction market, we expect the group to grow by a slightly higher rate than the underlying market thanks to its leading market position in most of the geographies where it operates. This gives it an edge over local competitors in availability of fleet equipment and client proximity. We expect the group will continue to implement pricing initiatives, increase volume in selected countries, and limited inorganic growth in 2025-2026. This should translate into a topline growth of about 5%-6% per year, respectively. We also expect the group's absolute EBITDA to remain broadly flat in 2025 as EBITDA margins could be pressured slightly to about 37.5% in 2025 as result of a lower contribution from the sale of used equipment (following a good year for second-hand sales in 2024). Thanks to a higher scale and the integration of acquired businesses, we expect margins to recover to more than 38.5% and EBITDA to expand to EUR545 million in 2026. "The group is addressing its upcoming 2026 maturity, and we do not anticipate any further debt issuance in our base case. Kiloutou intends to issue EUR500 million of new debt. First, the group will issue new senior fixed-rate secured notes of EUR350 million or more. The remaining EUR150 million of new debt will be issued via a fully fungible tap on the existing senior secured floating rate notes due in 2030 that will increase to EUR800 million (from the current EUR650 million size). Kiloutou will use the proceeds to repay its EUR460 million senior secured notes due in 2026, to repay existing RCF drawings of about EUR19 million and about EUR14 million of senior term loan facility. After the transaction and net of the related financing fees, the group will have about EUR2 million of additional cash on balance sheet. In our view, the terms and conditions that apply to these proposed notes closely align with the previous notes as they are broadly unchanged. The proposed new notes rank pari passu, while the RCF maintains a super senior position. The refinancing is leverage neutral, and we expect that Kiloutou's S&P Global Ratings-adjusted leverage will remain slightly below or about 4.0x for 2025 and 2026 with ample rating headroom based on current outlook. In our base case, we forecast a balanced financial policy where we assume no dividend distributions as well as no significant debt funded acquisitions. However, we continue to believe that management remains open to opportunistic acquisitions that could weigh on cash flows and credit metrics as the group aims to diversify away from France and the equipment rental market remains a highly fragmented industry. "Despite noting that the company has a track record of integrating sizeable deals while continuing on a deleveraging trajectory following debt funded acquisitions, we continue to consider the potential for leverage to spike temporarily to more than 4.0x again in our assessment of Kiloutou's financial risk profile as done in the past after the completion of transformative deals. "We anticipate that Kiloutou will reduce investments in new fleet equipment, which should translate into positive FOCF and improved liquidity in 2025-2026. After historically high levels of capital expenditure (capex) devoted to the growth of the fleet size, we expect the group to slightly lower its investments to below 30% of the group's revenue. Lower cash outflows in new equipment, combined with earnings growth should translate into improved free operating cash flow (FOCF) generation that should turn positive in 2025-2026. We forecast about EUR55 million in FOCF in 2025 because of lower maintenance capex after a record year in 2024 related to the phasing out of late deliveries. We anticipate a more normalized level of investment requirements that should translate into a FOCF of about EUR25 million in 2026. We acknowledge that the group's liquidity remains ample, as there are no material upcoming cash outflows until 2028 when the RCF is due. "The stable outlook reflects our expectation that Kiloutou will integrate bolt-on acquisitions, increase revenue and EBITDA, and exhibit adjusted EBITDA margins higher than 35%. We forecast adjusted debt to EBITDA will be comfortably below 5.0x in 2025-2026. "We could lower the ratings if the group's results weakened significantly amid unfavorable market conditions and its liquidity weakened because of significant negative free cash flow generation. Credit metrics--such as adjusted EBITDA margins below 35% and debt to EBITDA exceeding 5.0x for a prolonged period with no prospects of recovery--would put pressure on the ratings. The rating incorporates some leeway for bolt-on M&A transactions, however, sizable acquisitions that led to significant debt buildup, and debt to EBITDA above 5.0x, would likely result in a rating downgrade. "We could raise the ratings if Kiloutou continues to diversify its geographic diversification (thereby reducing its dependence on the French market), increases its scale, and demonstrates better-than-anticipated operating performance, while maintaining adjusted EBITDA margins higher than 35%. In addition, an upgrade would have to be supported by a track record of keeping S&P Global Ratings-adjusted debt to EBITDA comfortably and sustainably below 4.0x, supported by a clear financial policy that targets maintaining such a leverage level." LA POSTE: S&P Rates New Subordinated Hybrid Notes 'BB+' ------------------------------------------------------- S&P Global Ratings assigned its 'BB+' issue rating to the proposed perpetual deeply subordinated hybrid notes to be issued by La Poste (LP; A/Stable/A-1). S&P said, "The transaction's completion and size will be subject to market conditions, but we anticipate a benchmark issuance of about EUR750 million. LP plans to use the proceeds to replace its 2018 perpetual deeply subordinated hybrid callable in October 2025 via a tender offer. Post-transaction, we anticipate hybrids with intermediate equity content could equal 4%-5% of the company's adjusted capitalization. "The 'BB+' rating on the proposed notes is two notches below our assessment of LP's stand-alone credit profile, reflecting the notes' deep subordination and optional interest deferability. Our long-term issuer credit rating on the company reflects our expectation that there is a very high likelihood that it would receive timely and sufficient extraordinary state support if it faced financial distress. However, we do not rate the proposed bonds based on our 'A' issuer credit rating on LP but rather notch down from its 'bbb' group credit profile because we don't consider likely that the French government exceptional support measures extends to the hybrid noteholders. "We classify the proposed notes as having intermediate equity content until their first reset date occurring more than five years after the issue date, because they meet our criteria in terms of their subordination, availability to conserve cash and absorb losses, and optional deferability during this period. "Consequently, in our calculation of LP's credit ratios, we treat 50% of the principal outstanding and accrued interest on the hybrids as equity rather than debt. We also treat 50% of the related payments on these notes as equivalent to a common dividend. We now classify the existing notes as having no equity content with the upcoming refinancing. "Although the proposed notes have no final maturity date, the issuer may redeem them for cash on the first call date (occurring more than five years after the issue date--in this case, April 2031), and on each interest payment date thereafter. The notes may be purchased in the open market but the issuer intends to redeem or repurchase the notes only to the extent that they are replaced with instruments with equivalent equity content. In addition, the notes may be called at any time for tax, rating, and accounting events, or if 75% or more of the notes have been redeemed. We deem those risks as external or remote (such as a change in tax, accounting, or rating). "In addition, LP can call the instrument any time before the first call date at a make-whole premium (the make-whole call). We understand the company does not intend to redeem the instrument during this make-whole period and any such redemption would occur well above par, and do not consider that this clause creates an expectation that the issue will be redeemed in that time. Accordingly, we do not view it as a call feature in our hybrid analysis, even if it is referred to as a make-whole call clause in the documentation. "We understand that the interest on the proposed securities will increase by 25 basis points (bps) five years after the first reset date, then by additional 75 bps at the second step-up 20 years after the first reset date. We view any step-up above 25 bps as presenting an incentive to redeem the instrument and therefore treat the date of the second step-up as the instrument's effective maturity. "In our view, the option to defer payment on the proposed notes is discretionary. This means that the issuer may elect not to pay accrued interest, in whole or in part, on an interest payment date and doing so is not an event of default. LP retains the option to defer interest throughout the life of the notes. However, any deferred interest is cumulative and accruing interest, and will ultimately be settled in cash if, for example, the issuer paid interest on the next interest payment date or declared a dividend. We see this as a negative factor, but this condition remains acceptable under our methodology, given that the issuer can still choose to defer on the next interest payment date after settling a previously deferred amount." The proposed notes (and coupons) would constitute unsecured and deeply subordinated obligations of LP and would rank senior only to the issuer's ordinary shares and preference share. TEREOS FINANCE: S&P Rates New EUR300MM Senior Unsecured Notes 'BB-' ------------------------------------------------------------------- S&P Global Ratings assigned its 'BB-' issue rating to the proposed EUR300 million senior unsecured notes to be issued by Tereos Finance Group I SA and unconditionally guaranteed by Tereos SCA (Tereos; BB-/Positive/--). The proposed notes will mature in 2031 and the group will use the proceeds to mainly repay existing debt on or before their applicable maturity dates. S&P said, "This transaction will improve Tereos' liquidity position and debt maturity profile, although we factor in higher interest costs compared to the instruments that will be repaid. The recovery rating on the proposed notes is '4', reflecting our expectation of fair recovery prospects (30%-50%; rounded estimate: 45%)." Tereos SCA is a France-headquartered marketing cooperative group, of which the shareholders are 12,000 French sugar beet farmers. The group specializes in the processing of sugar beets, sugar cane, and cereals, with 45 industrial sites mostly across France and Brazil. Its main products are white and raw sugar, starch, sweeteners, starch derivatives, alcohol, and ethanol. In fiscal year 2024 (ending March 31), Tereos generated EUR7.1 billion of revenue and S&P Global Ratings-adjusted EBITDA of EUR1.1 billion. As of half-year 2024-2025, ending Sept. 30, 2024, Tereos reported an adjusted EBITDA of EUR506 million, 15% lower than in the same period the previous year, but still a solid performance, given lower selling prices for sugar, starch, and sweeteners in Europe. This is in line with S&P's previous guidance that Tereos' operational performance would decline from a record performance last year, owing to lower sugar market prices and slowing industrial demand for starch products. S&P said, "We forecast Tereos' EBITDA to decline to below EUR900 million in fiscal 2025. This reflects the lower market prices for sugar and stable prices for starch products in Europe that will result in lower margins for both divisions, mitigated by commercial margin optimization. The price of cereals has dropped sharply, which has led to an increase in surface area dedicated to beet cultivation and an oversupply of sugar. Current yield estimates for 2024-2025 in Europe are lower than the average for the previous five years, while reductions in the production are expected in Brazil and India. This could lead to a better balance between supply and demand and therefore sustain pricing in the short term. Fiscal 2025-2026 performance will also depend on the area dedicated to beets. This underpins our forecast of S&P Global Ratings-adjusted debt to EBITDA of about 3.0x in fiscal 2025 and 3.6x-3.9x in fiscal 2026. We also forecast Tereos to achieve a funds from operations-to-debt ratio of about 17%-21% over the same period." Boosted by a substantial seasonal decrease in working capital of EUR282 million, the group generated a robust free operating cash flow of EUR414 million in the last semester (April 1-Sept. 30), comfortably covering dividends of EUR70 million. As per our previous guidance, Tereos is pursuing its debt reduction trajectory, however, the group's leverage is rising amid shrinking EBITDA. ============= G E R M A N Y ============= DEUTSCHE LUFTHANSA: S&P Rates New Sub. Hybrid Capital Notes 'BB' ---------------------------------------------------------------- S&P Global Ratings assigned its 'BB' long-term issue rating to the proposed long-dated, optionally deferrable, and subordinated hybrid capital securities to be issued by German airline Deutsche Lufthansa AG (BBB-/Stable/A-3). The amount remains subject to market conditions. The company plans to use the proceeds for general corporate purposes, including the repayment in full of its EUR500 million hybrid notes, which were issued in 2015, at their reset date in February 2026. S&P said, "We consider the proposed securities to have intermediate equity content until their first call date because they meet our criteria in terms of subordination, permanence, and deferability at the company's discretion during this period. We treat 50% of the principal amount of hybrid securities that have intermediate equity content as equity, rather than debt, and 50% of the related payments as equivalent to common dividends, rather than interest. "We derive our 'BB' issue rating on the hybrid notes by notching down from our 'BBB-' long-term rating on Lufthansa. The two-notch differential reflects our notching methodology for rating hybrid capital instruments, under which we deduct: "One notch for subordination because our long-term rating on Lufthansa is investment-grade, that is, higher than 'BB+'. The degree of subordination differs between the new subordinated notes and the existing, deeply subordinated, notes. This does not cause us to notch down our rating on the existing notes further; and an additional notch for payment flexibility, because the deferral of interest is optional. "The notching indicates that we see a relatively low likelihood that the issuer will defer interest. Should our view change, we may increase the number of notches we deduct to derive the issue rating on the notes. "Overall, we think the proposed notes' terms and conditions are broadly similar to those of the outstanding notes. "We understand that the company is committed to keeping the subordinated notes as a permanent part of its capital structure and expect its capitalization rate to remain below our 15% threshold; the capitalization rate was below 5% as of Sept. 30, 2024." Key Factors In S&P's Assessment Of The Notes' Permanence S&P said, "The issuer can redeem the proposed notes for cash on any date in the three months immediately before the first reset date (which we understand will be six years after issuance), then annually on every interest payment date. If the notes are called, the issuer intends, but is not obliged, to replace them. In our view, this statement of intent mitigates the issuer's ability to repurchase the notes on the open market without replacement. Although the instrument is long-dated (30 years' maturity), Lufthansa can call it at any time under certain circumstances--that is, for loss of tax deductibility; a requirement to gross-up for withholding tax; loss of rating agency equity assessment; or when less than 25% of the principal amount is outstanding. Furthermore, we see a repurchase as unlikely, due to Lufthansa's commitment to retaining an investment-grade rating and reducing its leverage. "In addition, a clause in the hybrid documentation indicates that Lufthansa can call the instrument at any time by paying a make-whole premium (the make-whole call clause). We understand that the company does not intend to redeem the instrument during the defined make-whole period, nor we do not think that the existence of the clause creates an expectation that Lufthansa will use it. Accordingly, we do not consider the make-whole call clause to be a call feature in our analysis. "We understand that the interest to be paid on the hybrid notes will increase by 25 basis points 11 years after issuance, and by a further 75 basis points 26 years after issuance. We consider the cumulative 100 basis points as a material step-up, which is currently unmitigated by any commitment to replace the respective instruments at that time. This step-up provides an incentive for the issuer to redeem the notes on their first call date. "Consequently, in accordance with our criteria, after their first call date, we will no longer recognize the notes as having intermediate equity content because the remaining period until their economic maturity would be less than 20 years by then." Key Factors In S&P's Assessment Of The Notes' Deferability In S&P's view, the issuer's option to defer payment on the hybrid notes is discretionary. This means that the issuer may elect not to pay accrued interest on an interest payment date because it has no obligation to do so. However, any outstanding deferred interest payment will have to be settled in cash if Lufthansa declares or pays an equity dividend or interest on equally ranking notes or if Lufthansa redeems or repurchases shares or equally ranking notes. In addition, the documentation provides that, in case of deferral, all arrears of interest on the proposed hybrid instrument must be settled five years after the initial decision to defer. This meets the minimum requirements for intermediate equity content under our hybrid criteria. S&P sees deferability as a negative factor, although it remains acceptable under its methodology because, once Lufthansa has settled the deferred amount, it can still choose to defer on the next interest payment date. Key Factors In S&P's Assessment Of The Notes' Subordination The notes and coupons are direct, unsecured, and subordinated obligations of Lufthansa. They rank senior to the company's other outstanding hybrid notes and to its common shares, pari passu among themselves, and junior to all other debt instruments. ============= I R E L A N D ============= PENTA CLO 7: S&P Assigns Prelim B- (sf) Rating to Cl. F-R Notes --------------------------------------------------------------- S&P Global Ratings assigned preliminary credit ratings to Penta CLO 7 DAC's class X-R, A-R, B-R, C-R, D-R, E-R, and F-R reset notes. At closing, the issuer will have unrated subordinated notes outstanding from the existing transaction. This transaction is a reset of the already existing transaction which closed in March 2020. The issuance proceeds of the refinancing debt will be used to redeem the refinanced debt (the original transaction's class A, B-1, B-2, C, D, E, and F notes), and pay fees and expenses incurred in connection with the reset. Under the transaction documents, the rated notes will pay quarterly interest unless a frequency switch event occurs. Following this, the notes will permanently switch to semiannual payments. The portfolio's reinvestment period will end 4.54 years after closing, while the non-call period will end 1.50 years after closing. The preliminary ratings reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which S&P expects to be bankruptcy remote. -- The transaction's counterparty risks, which S&P expects to be in line with its counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,796.11 Default rate dispersion 532.52 Weighted-average life (years) 3.89 Weighted-average life including reinvestment (years) 4.54 Obligor diversity measure 143.75 Industry diversity measure 20.20 Regional diversity measure 1.17 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 2.36 Target 'AAA' weighted-average recovery (%) 36.18 Target floating-rate assets (%) 96.02 Target weighted-average coupon (%) 4.95 Target weighted-average spread (net of floors; %) 3.83 S&P said, "We understand that at closing the portfolio will 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 EUR450 million target par amount, the covenanted weighted-average spread (3.70%), and the covenanted weighted-average coupon (4.50%) as indicated by the collateral manager. We have assumed the targeted weighted-average recovery rates at all rating levels. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "Our credit and cash flow analysis shows that the class B-R to D-R notes benefit from break-even default rate and scenario default rate cushions that we would typically consider to be in line with higher ratings than those assigned. However, as the CLO is still in its reinvestment phase, during which the transaction's credit risk profile could deteriorate, we have capped our preliminary ratings on the notes. The class X-R, A-R, E-R and F-R notes can withstand stresses commensurate with the assigned preliminary ratings. "Until the end of the reinvestment period on July 25, 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 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 preliminary ratings. "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. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe our preliminary ratings are commensurate with the available credit enhancement for the class X-R to F-R notes. "In addition to our standard analysis, to indicate how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we also included the sensitivity of the ratings on the class X 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 assets from being related to the following industries: controversial weapons; nuclear weapon programs; illegal drugs or narcotics; thermal coal; tobacco production; pornography; payday lending; prostitution; gambling and gaming companies; food ("soft") commodities and agricultural or marine commodities; oil and gas from unconventional sources*; opioids*; palm oil; tar and oil sands*; and illegal logging. *When company revenues are above a threshold. Accordingly, since the exclusion of assets from these industries and areas does not result in material differences between the transaction and S&P's 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 list Prelim. Prelim. Balance Credit Class rating* (mil. EUR) enhancement (%) Interest rate§ X-R AAA (sf) 4.00 N/A Three-month EURIBOR plus 0.98% A-R AAA (sf) 279.00 38.00 Three-month EURIBOR plus 1.30% B-R AA (sf) 48.40 27.24 Three-month EURIBOR plus 2.05% C-R A (sf) 27.00 21.24 Three-month EURIBOR plus 2.45% D-R BBB- (sf) 31.50 14.24 Three-month EURIBOR plus 3.30% E-R BB- (sf) 21.10 9.56 Three-month EURIBOR plus 5.75% F-R B- (sf) 13.50 6.56 Three-month EURIBOR plus 8.43% Sub. NR 47.20 N/A N/A *The preliminary ratings assigned to the class X-R, A-R, and B-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. §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. Sub.--Subordinated. PROVIDUS CLO XI: S&P Assigns B- (sf) Rating to Class F-2 Notes -------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Providus CLO XI DAC's class A-loan and class A, B, C, D, E, F-1, and F-2 notes. At closing, the issuer also issued unrated subordinated notes. The reinvestment period will be approximately 4.3 years, while the non-call period will be 1.5 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 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 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 2,850.21 Default rate dispersion 530.08 Weighted-average life (years) 4.66 Weighted-average life (years) extended to cover the length of the reinvestment period 4.66 Obligor diversity measure 137.17 Industry diversity measure 15.30 Regional diversity measure 1.44 Transaction key metrics Total par amount (mil. EUR) 400.00 Defaulted assets (mil. EUR) 0.00 Number of performing obligors 152 Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 2.13 Actual 'AAA' weighted-average recovery (%) 36.77 Actual weighted-average spread (%) 3.92 Actual weighted-average coupon (%) 4.12 S&P said, "Our ratings reflect our assessment of the collateral portfolio's credit quality, which has a weighted-average rating of 'B'. We consider that the portfolio is well-diversified, 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. "In our cash flow analysis, we used the EUR400 million target par amount, we have modeled the covenanted weighted-average spread of 3.80%, the covenanted weighted-average coupon of 4.10%, and the actual target weighted-average recovery rates as indicated by the collateral manager. 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. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "Following the application of our structured finance sovereign risk criteria, we consider the transaction's exposure to country risk to be limited at the assigned ratings, as the exposure to individual sovereigns does not exceed the diversification thresholds outlined in our criteria. "The transaction's legal structure and framework is bankruptcy remote, in line with our legal criteria. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B, C, D, E, and F-1 notes could withstand stresses commensurate with higher ratings than those we have assigned. However, as the CLO is still in its reinvestment phase starting from the effective date, during which the transaction's credit risk profile could deteriorate, we have capped our ratings assigned to the notes. "The class A-loan and class A and F-2 notes can withstand stresses commensurate with the assigned ratings. In our view, the portfolio is granular in nature, and well-diversified across obligors, industries, and asset characteristics when compared with other CLO transactions we have rated recently. As such, we have not applied any additional scenario and sensitivity analysis when assigning our ratings to any classes of notes in this transaction. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe that our ratings are commensurate with the available credit enhancement for the class A-loan and class A, B, C, D, E, F-1, and F-2 notes. "In addition to our standard analysis, we have also included the sensitivity of the ratings on the class A to E notes, based on four hypothetical scenarios." Providus CLO XI DAC 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. Permira European CLO Manager LLP manages the transaction. Environmental, social, and governance S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average." For this transaction, the documents prohibit assets from being related to the following industries: biological and chemical weapons, anti-personnel land mines, cluster munitions, mass destruction weapons, depleted uranium, nuclear weapons, blinding laser weapons, weapons using non-detectable fragments, radiological weapons, white phosphorus weapons, incendiary weapons, tobacco production, electrical utility where carbon intensity is greater than 100gCO2/kWh, physical or land-based casinos, betting establishments, and online gambling platforms. Accordingly, since the exclusion of assets from these industries does not result in material differences between the transaction and S&P's 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 list Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate§ A AAA (sf) 163.00 38.00 Three/six-month EURIBOR plus 1.29% A-loan AAA (sf) 85.00 38.00 Three/six-month EURIBOR plus 1.29% B AA (sf) 46.00 26.50 Three/six-month EURIBOR plus 2.00% C A (sf) 22.00 21.00 Three/six-month EURIBOR plus 2.45% D BBB- (sf) 28.00 14.00 Three/six-month EURIBOR plus 3.20% E BB- (sf) 18.00 9.50 Three/six-month EURIBOR plus 5.75% F-1 B- (sf) 6.00 8.00 Three/six-month EURIBOR plus 7.59% F-2 B- (sf) 6.00 6.50 Three/six-month EURIBOR plus 8.70% Sub NR 32.60 N/A N/A *S&P's ratings address timely interest and ultimate principal on the class A-loan and class A and B notes and ultimate interest and ultimate principal on the class C to F-2 notes. §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. ========= I T A L Y ========= ENEL SPA: S&P Rates New Subordinated Hybrid Instrument 'BB+' ------------------------------------------------------------ S&P Global Ratings assigned its 'BB+' long-term issue rating to the proposed undated, optionally deferrable, and subordinated hybrid capital instrument to be issued by Italy-based multiutility Enel SpA (BBB/Stable/A-2). The transaction remains subject to market conditions. S&P expects Enel's issuance to be a dual tranche of benchmark size and anticipate that, overall, the amount of outstanding hybrids with intermediate equity content will increase. S&P said, "We consider the proposed instrument will have intermediate equity content until the first reset date, which we understand will fall no earlier than five years and three months from issuance. During this period, the instrument meet our criteria in terms of their ability to absorb losses or conserve cash if needed." S&P derives its 'BB+' issue rating on the proposed instrument by notching down from its 'BBB' issuer credit rating on Enel. As per its methodology, the two-notch differential reflects: -- A one-notch deduction for subordination because the rating on Enel is above 'BBB-'. -- An additional one-notch deduction to reflect payment flexibility, given the deferral of interest is optional. S&P said, "The number of downward notches reflects our view that Enel is relatively unlikely to defer interest. Should our view change, we may deduct additional notches to derive the issue rating. Furthermore, to capture our view of the intermediate equity content of the proposed instrument, we treat 50% of the related payments as a fixed charge and 50% as equivalent to a common dividend, in line with our hybrid capital criteria. The 50% treatment of principal and accrued interest also applies to our adjustment of debt." Enel can redeem the instrument for cash at any time in the three months immediately before the first reset date, and thereafter on every interest payment date. The company has underscored its willingness to maintain or replace the instrument, despite the loss of the preferential treatment. This statement of intent reduces the likelihood that the issuer will repurchase the notes on the open market. S&P also does not believe that the presence of a make-whole clause creates an expectation that the proposed instrument will be redeemed before its effective maturity without replacement. Although the proposed instrument is perpetual, it can be called at any time for events we regard as external or remote (change in tax, rating event, or accounting event). S&P said, "We understand that, for both tranches, the interest will increase by 25 basis points (bps) five years after the first reset date, then by an additional 75 bps at the second step-up 20 years after the first reset date. We view any step-up above 25 bps as presenting an economic incentive to redeem the instrument, and therefore treat the date of the second step-up as the instrument's effective maturity, for both tranches." Key factors in S&P's assessment of the instrument's deferability. S&P said, "In our view, Enel's option to defer payment on the proposed instrument is discretionary. This means that the issuer may elect not to pay accrued interest on an interest payment date because doing so is not an event of default. However, any deferred interest payment will have to be settled in cash if Enel declares or pays a dividend on shares or interest on equally ranking instrument, and if the issuer redeems or repurchases shares or equally ranking instruments. Nevertheless, this condition remains acceptable under our methodology because, once the issuer has settled the deferred amount, it can still choose to defer on the next interest payment date." Key factors in S&P's assessment of the instrument's subordination. The proposed instrument (and coupons) are intended to constitute Enel's direct, unsecured, and subordinated obligations, ranking senior to their common shares. ===================== N E T H E R L A N D S ===================== HUNTER DOUGLAS: Moody's Rates New Amended 1st Lien Term Loans 'B1' ------------------------------------------------------------------ Moody's Ratings assigned a B1 rating to Hunter Douglas Holding B.V. (Hunter Douglas) proposed amended and extended senior secured first lien term loans due 2032, consisting of a $3,313 million senior secured first lien term loan and a EUR904 million senior secured first lien term loan. All other ratings are unchanged, including the company's B1 Corporate Family Rating and B1-PD Probability of Default Rating. The outlook remains stable. The proposed transaction will refinance the company's existing $3,413 million outstanding amount first lien term loan due 2029 (rated B1) and EUR1,000 million outstanding amount first lien term loan due 2029 (rated B1). Hunter Douglas anticipates to use $200 million of balance sheet cash to reduce the outstanding amounts by $100 million each. Moody's will withdraw the B1 ratings on the existing senior secured first lien term loans once the refinancing transaction closes and these obligations are no longer outstanding. The refinancing transaction is credit positive because it will extend Hunter Douglas's maturity profile and will improve its financial leverage. Nevertheless, the company's debt/EBITDA (all ratios are Moody's-adjusted unless otherwise stated) leverage remains high at 5.6x as of the last 12 months (LTM) September 2024 period pro forma for the transaction, but down from 6.0x as of September prior to the transaction. The anticipated $200 million debt reduction will lower the company's cash balance. Still, the pro forma cash balance remains healthy at $783 million as of September 30, 2024. Hunter Douglas' very good liquidity supported by its healthy cash balance provides the financial flexibility to continue to navigate the challenging demand environment and fund growth investments. RATINGS RATIONALE Hunter Douglas' B1 CFR broadly reflects the company's leading market position and good brand recognition in the global window coverings industry. The company benefits from good channel diversification, and good geographic reach with a strong presence in the US and Europe. Hunter Douglas' large revenue base of around $4.5 billion and good EBITDA margin supports good free cash flow generation that Moody's project will exceed $250 million over the next 12 months. The EBITDA margin nevertheless lags industry peers given its decentralized business operations that is in part due to multiple acquisitions and the company will continue to focus on streamlining costs to improve margins. Hunter Douglas' very good liquidity is supported by its healthy unrestricted cash balance of $783 million pro forma for the proposed refinancing and an undrawn $800 million revolver as of September 30, 2024. The sizable liquidity provides financial flexibility to sustain investment and debt service amid a challenging operating environment and supports the ratings. Hunter Douglas' credit profile also reflects its narrow product focus and exposure to cyclical downturns given the discretionary nature of its products with demand largely driven by the cyclical residential repair and remodel market. Moody's anticipate some of the elevated consumer spending on home products including window coverings to shift toward other spending due to the slower pace of home sales and consumer selectivity after absorbing high inflation. The company's financial leverage is high with debt/EBITDA at around 5.6x for the last 12 months (LTM) ending September 30, 2024 pro forma for the proposed refinancing. Leverage is below 5.0x net of cash. Growth investments including acquisitions funded with excess cash could expand the earnings base and lower financial leverage. Hunter Douglas is exposed to foreign currency volatility given its meaningful revenue outside the US. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's expectation that Hunter Douglas' revenue and profitability will remain relatively flat over the next 12-18 months, supporting free cash flow in excess of $250 million and very good liquidity. The ratings could be upgraded if the company reports stable or growing organic revenue performance along with EBITDA margin expansion, such that debt/EBITDA is sustained below 4.5x and free cash flow/debt is maintained in a mid to high single digit percentage. A ratings upgrade would also require the company to execute the cost savings strategy without impairing the company's culture of innovation or good operating execution, maintain at least good liquidity, and exhibit balanced financial policies that support credit metrics at the above levels. The ratings could be downgraded if the company's earnings or free cash flow deteriorate because of factors such as volume declines, pricing pressure, cost increases or operational disruptions, the EBITDA margin meaningfully contracts, or debt/EBITDA is sustained above 5.5x. Ratings could also be downgraded if liquidity deteriorates, or the company completes a sizable debt-financed acquisition or shareholder distribution. Hunter Douglas is the world's leading manufacturer of custom window coverings and a major manufacturer of architectural products. The company markets and sells its products globally in more than 100 countries via direct to consumer channel, a dealer network, and retailers. The company's reported revenue for the last twelve months period ending September 30, 2024 of $4.5 billion. Following the February 2022 $7.1 billion buyout transaction, 3G Capital owns 75% of the company, with the Sonnenberg family holding a 25% ownership stake. The principal methodology used in these ratings was Consumer Durables published in September 2021. =========================== U N I T E D K I N G D O M =========================== EVANS TEXTILE: BDO LLP Named as Joint Administrators ---------------------------------------------------- Evans Textile (Sales) Limited was placed into administration proceedings in the High Court of Justice, Business and Property Courts in Manchester, Court Number: 2024-MAN-001668, and Kerry Bailey and Mark Thornton of BDO LLP, were appointed as joint administrators on Dec. 24, 2024. Evans Textile is a manufacturer of soft furnishings. Its registered office is at Helmet Street, Off Fairfield Street, Manchester, M1 2NT to be changed to C/O BDO LLP, 5 Temple Square, Temple Street, Liverpool, L2 5RH. The joint administrators can be reached at: Kerry Bailey BDO LLP Eden Building Irwell Street Salford, M3 5EN --and-- Mark Thornton BDO LLP Central Square 29 Wellington Street Leeds, LS1 4DL Further Details Contact: Abby Lalor Tel No: +44 (0)151 237 2526 Email: BRCMTNorthandScotland@bdo.co.uk GROWPURA LIMITED: FRP Advisory Named as Joint Administrators ------------------------------------------------------------ Growpura Limited was placed into administration proceedings in the High Court of Justice Business and Property Courts in Leeds, Insolvency & Companies List (ChD), Court Number:CR-2024-LDS-001145, and Kelly Burton and Joseph Fox of FRP Advisory Trading Limited, were appointed as joint administrators on Dec. 20, 2024. Growpura Limited offers vertical hydroponics technology that enables food and ingredients to grow in a more sustainable and wholesome way. Its registered office is at Chandler House, 7 Ferry Road, Office Park, Riversway, Preston PR2 2YH to be changed to c/o Wilson Field Limited, The Manor House, 260 Ecclesall Road South, Sheffield S11 9PS. Its principal trading address is at Unit 3 Marston Business Park, Lower Hazeldines, Marston Moretaine, Bedford, MK43 0XT. The joint administrators can be reached at: Kelly Burton Joseph Fox FRP Advisory Trading Limited The Manor House, 260 Ecclesall Road South Sheffield, S11 9PS For further details, contact: Joint Administrator Tel: 01142 356780 Alternative contact: Charlotte Bilby Email: cp.sheffield@frpadvisory.com INDO LIGHTING: Begbies Traynor Named as Administrators ------------------------------------------------------ Indo Lighting Limited was placed into administration proceedings in the High Court of Justice Business and Property Courts of England and Wales, Insolvency & Companies List (ChD), Court Number: CR-2024-007507, and Gavin Savage and John Walters of Begbies Traynor (Central) LLP, were appointed as administrators on Dec. 20, 2024. Indo Lighting is a manufacturer of electric lighting equipment. Its registered office is at Unit 18, Chancerygate Business Centre, Manor House Avenue, Southampton, SO15 0AE. The administrators can be reached at: Gavin Savage John Walters Begbies Traynor (Central) LLP 26 Stroudley Road, Brighton East Sussex BN1 4BH For further information, contact: Eleanor Freeman Begbies Traynor (Central) LLP E-mail: eleanor.freeman@btguk.com Tel No: 01273 322970 STEGA UK: Quantuma Advisory Named as Administrators --------------------------------------------------- Stega UK Limited was placed into administration proceedings in the High Court of Justice Business and Property Courts of England and Wales, Court Number: CR-2024-007890, and Simon Campbell and Andrew Watling of Quantuma Advisory Limited, were appointed as administrators on Dec. 24, 2024. Stega UK offers information technology services. Its registered office is at 60 Gracechurch Street, London, EC3V 0HR and it is in the process of being changed to C/o Quantuma Advisory Limited, Office D, Beresford House, Town Quay, Southampton SO14 2AQ. Its principal trading address is at 19 Berkeley Street, London, W1J 8ED. The administrators can be reached at: Simon Campbell Andrew Watling Quantuma Advisory Limited Office D, Beresford House Town Quay, Southampton, SO14 2AQ Further Details Contact: Stuart Ransley Tel No: 02380 336 464 Email: stuart.ransley@quantuma.com ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2025. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. 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