/raid1/www/Hosts/bankrupt/TCREUR_Public/250317.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
Monday, March 17, 2025, Vol. 26, No. 54
Headlines
F R A N C E
RENAULT SA: S&P Affirms 'BB+' ICR & Alters Outlook to Positive
I R E L A N D
CARLYLE GLOBAL 2016-1: Fitch Affirms Bsf Rating on Class E-R Notes
CONTEGO CLO V: Fitch Assigns 'B-(EXP)sf' Rating on Class F-R Notes
WILLOW PARK: Fitch Affirms 'B+sf' Rating on Class E Notes
I T A L Y
CERVED GROUP: Fitch Lowers LongTerm IDR to 'B-', Outlook Stable
ITALMATCH CHEMICALS: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
M O L D O V A
MOLDOVA: Fitch Affirms 'B+' LT Foreign Currency IDR, Outlook Stable
M O N A C O
VILLA ROMA: March 21 Auction Set for Two Duplex Apartment Units
U K R A I N E
VF UKRAINE: S&P Ups ICR to 'CCC+' on Completed Eurobond Exchange
U N I T E D K I N G D O M
ALLWYN ENTERTAINMENT: S&P Gives BB Rating on EUR450MM Term Loan B
ALSIM SYSTEM: Redman Nichols Named as Administrators
BENCHMARK SECURITY: Path Business Named as Administrators
CASTELL 2023-2: S&P Raises Class F Notes Rating to BB(sf)
CFG INVESTMENTS: S&P Assigns Prelim. B(sf) Rating on Cl. C Notes
EVERGREEN AIR: Path Business Named as Administrators
FALCON SPECIAL: Opus Restructuring Named as Administrators
HEMMELS LIMITED: Leonard Curtis Named as Administrators
LEOSTAR BESPOKE: MHA Named as Administrators
LERNEN BONDCO: S&P Affirms 'B-' ICR & Alters Outlook to Positive
LEVENSEAT LTD: BDO LLP Named as Administrators
NUSTONE PRODUCTS: Bailey Ahmad Named as Administrators
SEPLAT ENERGY: S&P Assigns 'B' Rating on New $650 Million Notes
SURE CHILL: FRP Advisory Named as Administrators
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F R A N C E
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RENAULT SA: S&P Affirms 'BB+' ICR & Alters Outlook to Positive
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S&P Global Ratings revised its outlook on France-based carmaker
Renault S.A. to positive from stable while affirming its 'BB+'
long-term and 'B' short-term ratings.
The positive outlook indicates that S&P could raise its ratings on
Renault in the next six to 12 months if the company secured EBITDA
margins close to 8% with FOCF to sales hovering around 2% and
increasing penetration of its electric cars in Europe.
Renault's renewed model line-up, coupled with continued discipline
on price and costs, should translate into an EBITDA margin of 7%-8%
from 2026 despite the higher share of battery electric vehicles
(BEVs) in its mix. Renault is pursuing its product offensive with
the launch of seven new cars in 2025 across all brands (Renault,
Dacia, Alpine, and Mobilize) and powertrains, after 10 new models
already launched in 2024. In 2024, Renault outperformed the
European market growth (1.7%) by 180 basis points (bps),
consolidating its market share at 10.7% in Europe. In addition,
Dacia Sandero was the best-selling car in Europe across all
channels (271,000 units sold in 2024), and Alpine A290 and R5 won
the 2025 car of the year awards. At the end of December 2024,
Renault's order book stood at about two months, in line with the
company's internal targets and, in January 2025, Renault still
outpaced the European market by about 2.3 percentage points, with
unit sales declining by 0.9%. S&P said, "For 2025, we expect EBITDA
margin to decline to 6.5%-7.5%, mainly as a result of the ramp up
of the electric share in its sales mix. We then expect the recovery
in 2026 to be driven by the full availability of products
progressively launched this year, together with stringent cost
management and an EBIT swing into positive territory at Ampere,
Renault's electric vehicle and software company." As part of the
Renaulution plan, Renault has significantly reduced its production
costs and operates with an average 90% capacity utilization rate,
supporting the improvement in the company's auto EBIT margin to
5.9% in 2024 from 3.3% in 2021. Over the next couple of years,
Renault will continue to lower its breakeven by reducing
manufacturing, logistics, and research and development costs, with
shorter development times, simpler design with less parts, and
partnerships. The new Twingo E-Tech Electric that will be available
in 2026 has been developed in 21 months and contains 30% less parts
than the R5. The company has set an internal target of developing
cars in 16 months, which would place Renault at par with
best-in-class Chinese manufacturers.
The longer timeframe allowed by the EU to achieve the carbon
dioxide emissions reduction targets is positive for Renault, but
not a game changer. With close to 80% of its sales stemming from
Europe, Renault is highly exposed to the Corporate Average Fuel
Economy (CAFE) regulation. On March 5, 2025, the European
Commission unveiled a proposed strategic plan to support the future
of the European automotive industry. One of the levers consists of
giving more time to automakers to reduce the average carbon dioxide
emissions of their EU registered fleet by 15% versus a 2021
baseline. For Renault this translated into increasing the share of
BEVs to close to 20% of its total sales from 9% at the end of 2024.
The relaxation of the carbon dioxide rules removes the risk of
penalties over the next couple of years and somewhat alleviates the
need to push BEV sales through discounts this year if consumer
demand for electric vehicles remains soft. However, neither the
2030 target--a reduction of 50% for vans and 55% for cars compared
with the 2021 baseline--nor the 2035 ban on the sale of all
vehicles with tailpipe emissions are changing.
Renault has a solid balance sheet. At the end of December 2024,
Renault had an S&P Global Ratings-adjusted automotive net cash
position of about EUR3.7 billion (S&P Global Ratings-adjusted debt
includes about EUR2 billion of receivables sold and about EUR838
million of pension liabilities). The net cash position also
includes Nissan shares (in excess of 15%) at a discounted value.
With our forecasts of cumulated FOCF of EUR3 billion-EUR4 billion
over 2025-2026, S&P thinks that Renault will retain ample financial
headroom.
S&P said, "The positive outlook indicates that we could raise our
rating on Renault in the next six to 12 months if the company
secured EBITDA margins close to 8% and FOCF to sales hovering
around 2%, while increasing the penetration of its electric cars.
"We could revise our outlook back to stable if we observed a
weakening of Renault's operating performance, resulting in adjusted
EBITDA margin sustainably in the 6%-7% range and adjusted FOCF to
sales staying in the 0%-2% range. This scenario could materialize
as a result of new entrants in the European electric vehicle (EV)
space, which would lead to an increase in competition.
"We could raise our rating on Renault if it established a durable
and competitive EV position against intensifying competition from
incumbents and new players in the European market, supported by
competitive model launches and the development of a reliable EV
supply chain. We would also expect Renault to achieve an adjusted
EBITDA margin close to 8% and adjusted FOCF of close to 2% of
automotive revenue, in addition to an adjusted net cash position."
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I R E L A N D
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CARLYLE GLOBAL 2016-1: Fitch Affirms Bsf Rating on Class E-R Notes
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Fitch Ratings has upgraded Carlyle Global Market Strategies Euro
CLO 2016-1 DAC 's class A-2-A-R, A-2-B-R, A-2-C-R, B-1-R, B-2-R,
C-R and D-R notes, and affirmed the others, as detailed below.
Entity/Debt Rating Prior
----------- ------ -----
Carlyle Global Market
Strategies Euro
CLO 2016-1 DAC
A-1-R XS1813993091 LT AAAsf Affirmed AAAsf
A-2-A-R XS1813993760 LT AAAsf Upgrade AA+sf
A-2-B-R XS1813994149 LT AAAsf Upgrade AA+sf
A-2-C-R XS1815318867 LT AAAsf Upgrade AA+sf
B-1-R XS1813994578 LT AAAsf Upgrade A+sf
B-2-R XS1815315418 LT AAAsf Upgrade A+sf
C-R XS1813994735 LT AA+sf Upgrade BBB+sf
D-R XS1813994909 LT BBB-sf Upgrade BB+sf
E-R XS1813992366 LT Bsf Affirmed Bsf
Transaction Summary
Carlyle Global Market Strategies Euro CLO 2016-1 DAC is a cash flow
CLO comprising mostly senior secured obligations. The transaction
closed in May 2016 and reset in April 2018. It is actively managed
by CELF Advisors LLP and exited its reinvestment period in November
2022.
KEY RATING DRIVERS
Deleveraging Transaction; Stable Performance: Since Fitch's last
rating action in April 2024, the transaction has deleveraged
significantly, with class A-1-R notes repaying by EUR152.7 million
from prepayments and asset sales. This has notably increased credit
enhancement (CE) across all notes. There is also EUR49.8 million in
the principal cash account, as per the latest trustee report, which
Fitch expects to be used to pay the class A-1-R notes in full on
the next payment date.
Exposure to assets with a Fitch-derived rating of 'CCC+' and below
is 6.0%, below the transaction's 7.5% limit, according to the
trustee. The portfolio has no reported defaulted assets, but Fitch
has considered the impact of Altice France, which has a small
exposure in the portfolio. Altice France's Fitch equivalent rating
was recently lowered to 'CC' subsequent to the latest trustee
report. The transaction is currently 3.6% below par (calculated as
the current par difference over the original target par), largely
unchanged from the last review. Together with the increase in CE,
this supported the upgrade of class B-1-R to D-R notes.
Limited Refinancing Risk: The transaction has manageable near- and
medium-term refinancing risk, in view of the large default-rate
cushions for each class of notes. No portfolio assets mature in
2025, and 7.3% mature in 2026, as calculated by Fitch.
Outlook Divergence: All notes except the class E-R notes show a
sufficient default rate cushion supporting the Stable Outlooks. The
Negative Outlook on the class E-R notes continues to reflect a
limited default rate cushion against credit quality deterioration,
which may not be completely offset by the deleveraging effect given
the notes' junior ranking. However, Fitch does not expect to
downgrade the notes to a lower rating category.
'B'/'B-' Portfolio: Fitch assesses the average credit quality of
the underlying obligors at 'B'/'B-'. The weighted average rating
factor (WARF) of the current portfolio is 27.0 as calculated by
Fitch under its latest criteria.
High Recovery Expectations: Senior secured obligations comprise
100% of the portfolio. Fitch views the recovery prospects for these
assets as more favourable than for second-lien, unsecured and
mezzanine assets. The Fitch-calculated weighted average recovery
rate of the current portfolio is 61.4%.
Diversified Portfolio: The top-10 obligor concentration test is
currently failing at 21.9%, as reported by the trustee, above the
20% limit. However, the largest obligor represents 2.5% of the
portfolio balance, below the limit of 3.0%. Exposure to the three
largest Fitch-defined industries is 22.0%, as calculated by the
trustee. Fixed-rate assets reported by the trustee were 8.4% of the
portfolio balance, versus a limit of 10%
Transaction Outside Reinvestment Period: The transaction exited its
reinvestment period in November 2022 and the manager can reinvest
unscheduled principal proceeds and sale proceeds from credit-risk
obligations after the reinvestment period, subject to compliance
with the reinvestment criteria. However, the manager is currently
restricted from trading as the transaction is failing another
rating agency's WARF test.
Due to this trading restriction and as the transaction has not
reinvested in a new asset since April 2024, Fitch used the static
rating approach for this review. Its analysis is based on the
current portfolio and stressed by flooring the weighted average
life at four years, and applying a one-notch reduction to all
obligors with a Negative Outlook (floored at CCC), which is 16.5%
of the indicative portfolio.
Deviation from MIR: The class D-R notes are rated two notches lower
than the model-implied rating (MIR). This reflects the slim default
rate cushion at the MIR, and one notch below to protect against
credit quality deterioration.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Based on the current portfolio, downgrades may occur if the loss
expectation is larger than initially assumed, due to unexpectedly
high levels of default and portfolio deterioration.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Upgrades may result from stable portfolio credit quality and
deleveraging, leading to higher CE 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
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 Carlyle Global
Market Strategies Euro CLO 2016-1 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.
CONTEGO CLO V: Fitch Assigns 'B-(EXP)sf' Rating on Class F-R Notes
------------------------------------------------------------------
Fitch Ratings has assigned Contego CLO V 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
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Contego CLO V DAC
A Loan LT AAA(EXP)sf Expected Rating
A-R Notes LT AAA(EXP)sf Expected Rating
B-1-R LT AA(EXP)sf Expected Rating
B-2-R LT AA(EXP)sf Expected Rating
C-R LT A(EXP)sf Expected Rating
D-R LT BBB-(EXP)sf Expected Rating
E-R LT BB-(EXP)sf Expected Rating
F-R LT B-(EXP)sf Expected Rating
Transaction Summary
Contego CLO V DAC 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
have been used to fund a portfolio with a target par of EUR500
million that is actively managed by Five Arrows Managers LLP. The
collateralised loan obligation (CLO) has a 4.5-year reinvestment
period and a 7.5-year weighted average life (WAL) test at closing,
which can be extended by one year at one year after closing.
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 25.7.
High Recovery Expectations (Positive): At least 90% 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 60.0%.
Diversified Portfolio (Positive): The transaction will have a
concentration limit for the 10 largest obligors of 20% and will
also include various concentration limits, such as a maximum
exposure to the three largest Fitch-defined industries in the
portfolio at 40%. These covenants ensure that the asset portfolio
will not be exposed to excessive concentration.
WAL Step-Up Feature (Neutral): The transaction can extend the WAL
by one year, to 7.5 years, on the step-up date, which is one year
after closing. The WAL extension is at the option of the manager,
but is subject to conditions including the collateral quality tests
and the collateral principal balance (with defaulted obligations
treated at Fitch collateral value) being 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 used for the transaction's
Fitch-stressed portfolio and matrices analysis is 12 months less
than the WAL covenant, to account for structural and reinvestment
conditions post-reinvestment period, including the
over-collateralisation tests and Fitch 'CCC' limitation test
post-reinvestment. This ultimately reduces the maximum possible
risk horizon of the portfolio when combined with loan prepayment
expectations.
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 lead to a downgrade of one notch each on the class
B-R to E-R notes, to below 'B-sf' on the class F-R notes, and have
no impact on the class A-R notes.
Based on the identified 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 than
the Fitch-stressed portfolio, the class C-R notes have a one-notch
cushion, the class B-R, D-R, E-R and F-R notes each have a
two-notch cushion, while the class A-R notes have no rating
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 three
notches each for the notes.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
A 25% reduction of the mean RDR and a 25% increase in the RRR
across all ratings of the Fitch-stressed portfolio would lead to
upgrades of up to four notches each, except for the 'AAAsf' rated
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
transaction's remaining life. 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 Contego CLO V 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.
WILLOW PARK: Fitch Affirms 'B+sf' Rating on Class E Notes
---------------------------------------------------------
Fitch Ratings has upgraded Willow Park CLO DAC class B to D notes.
The class C notes are on Positive Outlook, while the rest are on
Stable Outlook.
Entity/Debt Rating Prior
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Willow Park CLO DAC
A-1 XS1699702038 LT AAAsf Affirmed AAAsf
A-2A XS1699702467 LT AAAsf Affirmed AAAsf
A-2B XS1699705056 LT AAAsf Affirmed AAAsf
B XS1699705304 LT AAAsf Upgrade AAsf
C XS1699705643 LT A+sf Upgrade BBB+sf
D XS1699706021 LT BBB+sf Upgrade BB+sf
E XS1699706294 LT B+sf Affirmed B+sf
Transaction Summary
Willow Park CLO DAC is a cash flow CLO comprising mostly senior
secured obligations. The transaction closed in November 2017, is
actively managed by Blackstone Ireland Limited, and exited its
reinvestment period in July 2022.
KEY RATING DRIVERS
Amortising Transaction: The class A-1 notes are 95% paid down since
the transaction closed in November 2017 and a further EUR109.4
million has been repaid since the last review in April 2024. The
class B, C and D notes upgrades reflect increased credit
enhancement (CE) resulting from the repayment of the class A-1
notes, and the strong break-even default-rate cushions maintained
since the last review. Its expectation of continued increases in CE
for the senior notes supports the Positive Outlook on the class C
notes.
Stable Performance: As the transaction is restricted from
reinvesting, the portfolio has become more concentrated. The
transaction is currently 1.6% below par (calculated as the current
par difference over the original target par), with approximately
EUR2.1 million of defaulted assets in the portfolio and,
Fitch-derived rating of 'CCC+' and below is 13.1%, according to the
latest trustee report dated 10 February 2025. However, total par
loss remains below its rating-case assumptions, which supports the
rating actions.
Cash Flow Modelling: The transaction is currently failing Fitch's
'CCC' and another agency's 'CCC' test, which need to be satisfied
for the manager to reinvest. The weighted average life (WAL) test
and weighted average rating factor (WARF) test are also failing,
with the WARF test additionally blocking the manager from
reinvesting. The manager has not made any purchases since April
2024.
Given the transaction is restricted from reinvesting, Fitch's
analysis is based on the current portfolio, which Fitch stressed by
downgrading obligors on Negative Outlook by one notch (with a CCC-
floor). Fitch floors the portfolio's WAL at four years when testing
for upgrades.
'B'/'B-' Portfolio: Fitch assesses the average credit quality of
the transaction's underlying obligors at 'B'/'B-'. The WARF, as
calculated by Fitch under its latest criteria, is 27.3.
High Recovery Expectations: The portfolio comprises senior secured
obligations. Fitch views the recovery prospects for these assets as
more favorable than for second-lien, unsecured and mezzanine
assets. The weighted average recovery rate, as calculated by Fitch,
is 62.3%.
Reduced Portfolio Diversification: The portfolio is diversified
across obligors, countries and industries. The top 10 obligor
concentration is 27.4% and the largest obligor represents 3.7% of
the portfolio balance, as calculated by Fitch. Exposure to the
three largest Fitch-defined industries is 40.1%, up from 31.9%
since the last review as calculated by the trustee.
Deviation from MIRs: The class C notes are three notches below
their model-implied ratings (MIR), while the class E notes' ratings
are one notch below their MIR. The deviation reflects limited
default-rate cushion at their MIRs.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Based on the current portfolio, downgrades may occur if the loss
expectation is larger than initially assumed, due to unexpectedly
high levels of default and portfolio deterioration.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Upgrades may result from stable portfolio credit quality and
deleveraging, leading to higher CE 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 Willow 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.
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I T A L Y
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CERVED GROUP: Fitch Lowers LongTerm IDR to 'B-', Outlook Stable
---------------------------------------------------------------
Fitch Ratings has downgraded Cerved Group S.p.A.'s (Cerved)
Long-Term Issuer Default Rating (IDR) and senior secured instrument
rating to 'B-' from 'B'. Fitch has removed the Rating Watch
Negative (RWN) and revised the Outlook to Stable. The Recovery
Rating on the debt is 'RR4'.
The downgrade reflects continuing high leverage and low interest
coverage through to 2027, which is more in line with a 'B-' rating.
A successful execution of the group's cost cutting plan and a
return to revenue growth may result in the company building rating
headroom in 2027, which is contingent on its key shareholder ION
Group's capital allocation.
The ratings reflect an aggressive financial structure, weak
financial flexibility due to limited revenue growth, high interest
payments, and compressed free cash flow (FCF) generation. This is
balanced by a strong market position in risk-intelligence and by
its expectation that the group's strategy, implemented since 2024,
would result in greater revenue growth and satisfactory liquidity.
Key Rating Drivers
Persistent High Leverage: Cerved's Fitch-calculated EBITDA
leverage, from pre-audited accounts, increased to 7.7x at end-2024
versus 7.6x at end-2023, due to a lack of EBITDA growth. This is
above Cerved's negative sensitivity of 6.5x for the 'B' rating.
Fitch forecasts leverage will remain above this level until at
least 2027, reflecting a credit profile that is more in line with a
'B-' rating.
Low Interest Coverage: EBITDA interest coverage decreased to 1.6x
at end-2024 from 1.9x at end-2022, due to the company's mostly
floating-rate debt. A reduction in base interest rates may provide
some cash flow relief, but financial flexibility has reduced. While
refinancing risks have increased, Cerved's long-dated debt
maturities should allow it time to improve its financial profile
ahead of refinancing, including through limited dividend
distributions.
Partial FCF Generation Recovery: Fitch expects FCF generation to
partially recover in 2026, after having been negative in 2023, as
lower interest and tax payments provide some relief. However, FCF
generation will be contingent on revenue growth and effective
working-capital management. Fitch forecasts FCF as a percentage of
sales to remain in the low single digits until 2027, broadly in
line with peers at the 'B-' rating.
Aggressive Financial Policy: While Cerved paid a lower amount of
dividends in 2024, it has in the past announced targeted annual
dividend distributions of up to EUR50 million, which are high
compared with 'B' peers, especially in light of its high leverage
and weak FCF generation. This aligns Cerved's financial profile
with a 'B-' assessment under Fitch's criteria. The group issued
EUR195 million floating-rate notes in 2023 to fund a EUR108 million
dividend and a EUR65 million loan to another ION company, which
Fitch treats as equity distributions.
Volatile Revenue Growth: Cerved's services are key for its clients'
business, in particular banks. However, contracts are flexible and,
in downturns, clients are able to cut back on their subscriptions
to or reduce their scope of services from Cerved. The business has
some cyclicality, as demonstrated by a 6.6% revenue decline in
2020, due to the pandemic, and declines of 1.4% and 3.5% in 2022
and 2023, respectively. Fitch expects moderate growth in 2025 and
2026 to be driven by growth in the risk-intelligence segment.
Strategy Shift: Cerved has invested in its offering to diversify
from competitors offering similar data-based solutions. It expects
further growth in 2025 to be spurred by sales of new products and
by a new commercial approach through a restructured sales team.
This aims to improve Cerved's level of service to its clients and
provide revenue visibility. Fitch is cautious on growth from the
new product suite, particularly solutions consulting, as execution
risk is higher for products where Cerved is less well known and has
yet to establish its market share.
Deleveraging Through Cost Savings: Cerved has earmarked a total of
EUR63 million available remaining cost savings as of 4Q24, after
having achieved EUR58 million. Its forecasts assume a further EUR50
million cost savings by 2027, after factoring in execution risks
and potential delays. Its deleveraging assumptions for 2025-2027
rely heavily on these savings.
Revenue Contraction in 2024: Revenues fell 3.3% in 2024 due to a
reduction in real-estate appraisals, a lack of new non-performing
loan portfolio opportunities, and a few contract renegotiations
with clients. The latter has resulted in better payment terms,
contractual protection and lengths, but at the cost of some revenue
impairment in 2023 and 2024. Fitch does not expect any further
renegotiations to put pressure on revenues as Cerved has
transitioned to new contract terms.
Risk-Intelligence Lead in Italy: Cerved's risk-intelligence
division has a leading position in Italy since the 1970s. Fitch
understands from management that it still maintains a leading
market share, with CRIF as its key competitor. Clients are
corporations and banks, which acquire, among other things, Cerved's
credit data and scoring services. Banks are usually covered by
subscription-based contracts, while corporations are usually billed
as they use Cerved's services.
Peer Analysis
Compared with large information providers such as Thomson Reuters
Corporation (BBB+/Stable) and Informa PLC (BBB/Stable), Cerved has
significantly smaller scale, is less geographically diversified,
and has a more leveraged capital structure.
Cerved is also comparable with LBO and high-yield public and
privately rated issuers covered by Fitch in the business services
sector. Enterprise resource planning (ERP) providers such as
TeamSystem S.p.A. (B/Stable) and digital listings platforms like
Speedster Bidco GmbH (Autoscout 24, B/Stable) have leverage and
margin structures that are stronger than Cerved's. In addition,
Fitch believes that both Teamsystem's and Autoscout24's business
models are more robust, due to low churn in the ERP sector and
greater geographic diversification, respectively.
Cerved has a similar FCF profile to Dedalus SpA (B-/Negative) but
lower leverage. The companies are similar as they have made slow
deleveraging progress and high execution risks around their growth
strategies, which can only be successful with new contract wins or
additional service volumes from up- and cross-selling, while
deleveraging would also require tight cost control.
Key Assumptions
- Low-single-digit revenue growth in 2025-2027
- Fitch-defined EBITDA margin to grow to 46.3% in 2025 from 44.3%
in 2024, due mainly to Cerved's large cost-efficiency plan, and
further to 48.5% by 2027
- Change in working capital neutral to positive in 2025-2027
- Capex at around 8% of revenue a year until 2027
- Dividends of EUR50 million a year in 2025-2027
- No increases in debt
Recovery Analysis
Its recovery analysis assumes that Cerved would remain a
going-concern in distress rather than be liquidated in a default.
Most of its value is derived from its brand, proprietary products
and contents portfolio, and from its knowledge of and established
market position in credit management.
Fitch assumes a 10% charge for administrative claims.
Its analysis assumes a going-concern EBITDA of around EUR165
million. This assumes corrective measures to have been taken in a
restructuring, still positive FCF generation, and an unsustainable
financial structure due to excessive leverage, increasing
refinancing risk.
A restructuring may arise from financial distress related to
increased competition via a broad adoption of disruptive
technologies, and therefore pricing pressures, in credit
information. It may also arise from a broad consolidation of
Cerved's clients, particularly banks, that leads to more
contractual power for them. A drop in the number of managed loans
in Cerved's portfolio, following disposals by owners on the
secondary markets, may also be a factor.
Fitch continues to apply an enterprise value multiple of 5.5x to
the post-restructuring going-concern EBITDA, which is towards the
higher end of its range.
Its waterfall analysis assumes Cerved's EUR80 million super senior
revolving credit facility (RCF) is fully drawn on default, and
Fitch includes its EUR350 million fixed-rate notes and EUR1.25
billion floating-rate notes, both due in 2029. Its analysis
generates a ranked recovery in the 'RR4' band, after deducting 10%
for administrative claims. This indicates an instrument rating for
the senior secured notes of 'B-' and expected recoveries of 46%.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDA leverage above 8.0x with evidence of decreasing liquidity
headroom or heightened refinancing risk
- EBITDA interest coverage below 1.0x
- Continuing operational challenges such as business disruptions,
including rapid decreases of managed loans in credit management, or
material pricing power erosion in business intelligence
- Consistently negative FCF after dividend payments and the RCF
remaining drawn for an extended period
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Substantial evidence of a financial policy that would maintain
EBITDA leverage below 6.5x
- EBITDA interest coverage rising above 2.0x
- Growth of revenues and successful execution of the group's
cost-cutting plan and new product plan as reflected in EBITDA
margin expansion
Liquidity and Debt Structure
Fitch expects Cerved to maintain a fairly constant amount of cash
on its balance sheet of EUR50 million-EUR60 million over 2025-2026,
based on its forecasts of positive FCF from 2025 and subject to
cash distributed for dividends or intercompany loans. In addition,
Cerved has access to an undrawn RCF of EUR80 million.
Issuer Profile
Cerved is an established leader in credit information and
intelligence and credit management in the Italian market. It has a
well-entrenched position in the financial market in Italy with a
customer base of 30,000 corporates, 150 public authorities and
around 95% of Italian banks.
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
Cerved has an ESG Relevance Score of '4' for Governance Structure
due to inter-company loans and related-party transactions among ION
Group companies over which Fitch has limited visibility on its
terms and economic substance. This has a negative impact on the
credit profile and is relevant to the ratings in conjunction with
other factors.
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Cerved Group S.P.A. LT IDR B- Downgrade B
senior secured LT B- Downgrade RR4 B
ITALMATCH CHEMICALS: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed Italmatch Chemicals S.p.A.'s Long-Term
Issuer Default Rating (IDR) at 'B' with a Stable Outlook. It also
affirmed its senior secured rating at 'B'. The Recovery Rating is
'RR4'.
Italmatch's IDR reflects its high leverage and modest scale,
balanced by its diversification and focus on specialty chemicals.
It also incorporates contributions from acquisitions, a good
liquidity, and the absence of refinancing risk until 2028.
The Stable Outlook reflects its view that its leverage metrics will
remain within rating sensitivities for 2025-2028, after EBITDA
gross leverage is estimated to have fallen below 6x in 2024 on
improving volumes, resilient unit margins, and cost savings. Fitch
forecasts EBITDA growth, driven by continued volumes recovery and
innovations, to help deleveraging towards EBITDA gross leverage of
5x by 2027.
Key Rating Drivers
Resilient Business Performance: Fitch estimates Italmatch's EBITDA
grew approximately 26% in 2024 on broadly flat revenue, yielding a
robust Fitch-adjusted EBITDA margin of 18.7%. It's 9M24 performance
has been better than its original expectations and also outpaced
peers', due to Italmatch's specialty focus, product
differentiation, and diversified business model, which supported
its resilient profit margins.
Moderating Leverage: Fitch anticipates leverage metrics to remain
below the negative rating sensitivity of 6.0x to 2027. Fitch
forecasts EBITDA gross leverage at 5.5x in 2025, versus an
estimated 5.9x in 2024, improving from 7.9x in 2023. This is due to
Italmatch's high unit margins, which allowed Fitch-adjusted EBITDA
to exceed EUR128 million in 2024. The company has publicly set a
net leverage target of 4.0x-5.0x. Fitch expects Italmatch to be
able to delay growth projects if necessary to achieve its net debt
target of below 5x EBITDA, in the event of earnings
underperformance.
Improvement Across Segments: Fitch estimates Italmatch's sales
volumes grew around 9% in 2024, supported by the introduction of
new products and a recovery from the customer destocking seen in
2023. The company's core segments delivered a robust performance,
with volumes increasing 8% year-over-year. Italmatch's ongoing
focus on specialty and value-added solutions has sustained
profitability through various cycles.
Manageable Tariff Risks: Fitch views the US tariff threat facing
Italmatch as manageable, given its global presence and primary
target audience of local customers with limited direct exposure to
international trade, but they could be indirectly hit by reduced
trade flows down the value chain or lower GDP growth. While tariffs
might increase raw material costs, Fitch is confident that
Italmatch will be able to pass-through these costs effectively.
Disciplined M&A Strategy: Italmatch acquired Alcolina in 2024,
despite its net leverage being above its target of 4x-5x, due to
adequate valuation and synergies with its existing business. Fitch
believes that Italmatch will remain opportunistic but disciplined,
considering small bolt-on acquisitions, as it has numerous internal
growth projects and potential greenfield or brownfield investments.
Fitch has incorporated some bolt-on acquisitions in its forecasts,
which will contribute about EUR15 million in additional EBITDA by
2027, bringing its total EBITDA to EUR149 million.
Sustainability Growth Prospects: Italmatch is in a strong position
to leverage sustainability trends. Its offerings in water solutions
contribute to advancements in reverse osmosis water desalination,
which helps combat water scarcity, and supports geothermal energy
and precious metal recovery. Additionally, it has developed
specialised flame retardants for photovoltaic applications and
lubricant additives for use in wind turbine gear oil applications.
Diversified Specialty Company: Italmatch's differentiated product
offering underpins its long-term relationships with a variety of
large key customers, averaging between 15 and 20 years, allowing
EBITDA margin to remain consistently above 14%. It benefits from
deep knowledge of phosphorus chemistries to address different
end-markets, such as industrial water treatment and desalination,
geothermal and mining, plastics or lubricants manufacturing, oil
drilling, and personal care ingredients. Its industrial footprint
is spread across Europe, North America and Asia with flexible
plants capable of producing various product ranges.
High Barriers to Entry: The products Italmatch offers are niche and
have few competitors. Fitch sees high barriers to entry in its
niche markets, as the company specialises in products with
differentiated or bespoke properties, or those that are key in the
manufacturing process of a final product. Italmatch works alongside
many of its customers to develop bespoke products to meet
customers' specifications, creating a longstanding relationship
with them.
Peer Analysis
Italmatch is considerably smaller, less diversified, and has lower
profit margins and greater cash flow volatility than the pure
specialty chemical manufacturer Nouryon Holding B.V. (B+/Stable).
While Italmatch is dedicated to specialty chemicals with steady
demand, it has less exposure to high-growth sectors than Nouryon.
Italmatch's leverage is also higher than Nouryon's.
Italmatch is significantly smaller, less diversified with a similar
end-market exposure to, and has lower leverage than Envalior
Finance GmbH (B/Negative). Italmatch is more focused on specialty
chemicals, which translates into lower cash flow volatility, and
its EBITDA gross leverage is projected to be lower in 2025-2027.
Nobian Holding 2 B.V. (B/Stable) is a commodity producer with
larger scale, higher margins, and lower leverage than Italmatch.
However, Nobian has weaker geographic and end-market
diversification and is more susceptible to price fluctuations in
commodities like caustic soda and European energy.
Key Assumptions
Fitch's Key Assumptions Within its Rating Case for the Issuer
Volumes to grow 3% in 2025, 2.3% in 2026, and 2% in 2027, down from
8.4% in 2024
Average selling price remaining broadly stable to 2027, after
declining 9% in 2024
EBITDA margin recovering to 17%-18% in 2024-2027, from 15% in 2023,
as volume growth and steady unit margins offset fixed-cost
inflation
Capex at 5%-6% of sales in 2024-2027, inclusive of growth projects
No dividends
Bolt-on acquisitions of EUR10 million-EUR20 million a year in
2025-2027
Recovery Analysis
The recovery analysis assumes that Italmatch would be reorganised
as a going-concern (GC) in bankruptcy rather than liquidated.
Its GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganisation EBITDA level on which Fitch bases the
enterprise valuation (EV). The GC EBITDA of EUR100 million reflects
a weak macro environment negatively affecting volumes in key
cyclical end-markets, a competitive environment driving prices
lower, and moderate corrective actions.
Fitch uses a multiple of 5x to estimate a GC EV for Italmatch
because of its focus on specialty chemicals that translates into
moderate volume and margin volatility. It also captures the
company's diversified business profile and modest scale.
Fitch assumes that its non-recourse factoring would be replaced by
super senior debt in the event of financial distress, which is
deducted from the value available for creditor claims distribution.
Fitch further assumes Italmatch's revolving credit facility (RCF)
to be fully drawn and to rank super senior, along with debt at
Italmatch's unrestricted operating entities.
After deducting 10% for administrative claims, Fitch's analysis
resulted in a waterfall-generated recovery computation (WGRC) for
the senior secured instruments in the 'RR4' band, indicating a 'B'
instrument rating. The WGRC output percentage on current metrics
and assumptions is 42%.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- EBITDA gross leverage above 6x on a sustained basis
- EBITDA interest coverage below 1.5x on a sustained basis
- Weakening pricing power negatively affecting margins at times of
raw material cost inflation
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- EBITDA gross leverage below 4x on a sustained basis
- EBITDA interest coverage above 3x on a sustained basis
- A material increase in scale through entry in new markets or
expansion of market share
Liquidity and Debt Structure
Italmatch had EUR129 million in cash at end-September 2024 with its
EUR107 million RCF undrawn. This provides comfortable flexibility
for growth projects or acquisitions, given that the majority of its
debt is due in 2028 with no mandatory amortisation. The RCF expires
in October 2027.
Issuer Profile
Italmatch is a producer of specialty chemicals used in various
applications such as water treatment, lubricants or flame
retardants, and is majority-owned by Bain Capital since 2018.
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 Recovery Prior
----------- ------ -------- -----
Italmatch Chemicals
S.p.A. LT IDR B Affirmed B
senior secured LT B Affirmed RR4 B
=============
M O L D O V A
=============
MOLDOVA: Fitch Affirms 'B+' LT Foreign Currency IDR, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed Moldova's Long-Term Foreign-Currency
Issuer Default Rating (IDR) at 'B+' with a Stable Outlook.
Key Rating Drivers
Credit Fundamentals: Moldova's 'B+' rating reflects commitment to
policies that have preserved macroeconomic and financial stability
through a series of potentially destabilising shocks, low
government debt with a manageable debt repayment profile,
availability of external financial support, and higher GDP per
capita than peers. These factors are balanced by the high exposure
of the small Moldovan economy to geopolitical risks due to the war
in neighbouring Ukraine, a frozen conflict, and potentially
destabilising foreign interference in domestic politics, as well as
a structurally large current account deficit (CAD) and high net
external debt.
Elevated Geopolitical Risks: Moldova is highly exposed to fallout
from the Ukraine war due to its geographic proximity, Russia's
interference in domestic politics and military presence in
Transnistria, and the risk that domestic political developments
could disrupt the ongoing foreign policy reorientation towards the
West. In 2024, President Maia Sandu won a second term in office,
and the country narrowly approved a referendum to enshrine the goal
of joining the EU in its constitution. Parliamentary elections are
scheduled to take place by July 2025 and the risk of interference
from external actors is high.
High CADs: Fitch estimates that Moldova's CAD widened to 16% of GDP
in 2024 due to weak export performance, lower remittances and
growth in imports. Fitch forecasts the CAD will remain high at
13.9% of GDP in 2025, due to a weak recovery in Europe and higher
electricity imports. As Moldova's CADs are only partially covered
by low foreign direct investment (FDI) inflows, Fitch projects that
net external debt, estimated at 29.7% of GDP at end-2024, will
remain on an upward path.
Adequate External Liquidity Buffers: Gross international reserves
reached USD5.5 billion at end-2024. Official financing availability
will maintain reserve coverage at 5.2 months of current external
payments in 2025-2026, above the projected 'B' median of 4.2.
Moldova's external liquidity ratio (liquid external assets over
short-term external liabilities), forecast at 175% in 2025, is
stronger than peers.
Record of Strong External Support: Moldova's pro-European
government has benefited from continued financial and technical
support since 2021. Moldova is in the screening phase prior to
beginning the process of EU accession negotiations, and the EU has
offered significant financial support (EUR250 million) to help
Moldova manage the energy price shock and bring forward the
benefits of economic integration through a three-year EUR1.9
billion Growth Facility. In December, Moldova completed the sixth
review under its December 2021 40-month IMF Extended Credit
Facility/Extended Fund Facility and the second review under the
December 2023 Resilience and Sustainability Facility.
Higher Budget Deficits: Fitch estimates that Moldova's general
government deficit narrowed to 3.9% of GDP in 2024 due to strong
revenue growth and lower-than-budgeted spending, including lower
capital spending execution. Although details are not yet available,
the implementation of the EU's Growth Facility, including
government investment projects, could lead to temporary higher
deficits averaging 4.8% of GDP in 2025-2026.
Moderate Government Debt: General government debt, estimated at
38.5% of GDP at end-2024, is lower than the projected 'B' median of
50%, but will approach 43% by 2026, based on its projections. Close
to 63% of government debt is foreign-currency denominated, but this
exposure is to official creditors and mostly on concessional terms.
The sovereign does not have external commercial debt. Interest
costs are relatively low at 1.4% of GDP or 4.1% of government
revenues (below the 12.9% 'B' median).
Energy Shock: Moldova has faced a third energy shock since 2021, as
the supply of Russian gas to Transnistria was interrupted,
impacting the country's electricity supply. Improved external
buffers, availability of external financing and alternative energy
imports, helped Moldova avoid significant disruptions beyond higher
electricity prices. Greater connectivity with European electricity
markets, increased domestic production (including renewables) and
energy efficiency measures will reduce exposure to Russian-related
energy sources.
Inflation Spike: Inflation accelerated to 9% yoy in January due to
adjustments to gas, electricity and heating tariffs combined with
higher prices for certain food products (due to drought conditions
in 2024). Although EU funding to subsidise energy bills and limited
domestic demand price pressures can moderate the impact of
electricity price increases, Fitch projects annual inflation to
average 9.5% in 2025, up from 4.7% in 2024 and above the projected
5% 'B' median. Inflation risks stem from second round effects from
higher energy prices.
Prudent, Consistent Policy Mix: Moldova's macroeconomic policy mix,
including a credible commitment to inflation targeting and exchange
rate flexibility, has supported its capacity to navigate external
shocks. The National Bank of Moldova (NBM) hiked its policy rate by
290bp to 6.5% in January-February in response to the energy price
shock. The NBM's monetary policy will likely balance preventing the
risk of second-round effects while avoiding an excessive tightening
of domestic financing conditions.
Growth Recovery Weakens: A series of energy and geopolitical shocks
have negatively affected GDP growth in recent years. Drought
conditions and weak external demand led to a 1.9% contraction in
3Q24 after growth averaging 2.4% in 1H24. Fitch estimates that
growth was 0.1% in 2024 and 2025 growth, forecast at 1.7%, will be
weighed down by higher inflation, and a weaker-than-expected
recovery in the EU, including Romania (37% of exports). However,
energy support measures (facilitated with EU's emergency funding)
and the expected initial disbursements of the EU's Growth Facility
could support a domestic demand pick up in 2H25.
ESG - Governance: Moldova has an ESG Relevance Score (RS) of '5'
for both Political Stability and Rights and for the Rule of Law,
Institutional and Regulatory Quality and Control of Corruption.
These scores reflect the high weight that the World Bank Governance
Indicators (WBGI) have in its proprietary Sovereign Rating Model.
Moldova has a medium WBGI ranking at the 45th percentile reflecting
a recent track record of peaceful political transitions, a moderate
level of rights for participation in the political process,
moderate institutional capacity, established rule of law and
improving but still high level of corruption.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Structural: Adverse external and/or domestic political
developments that create risks for macroeconomic and financial
stability or the availability of external official financing.
- External Finances: A sharp decline in international reserves, for
example, due to sustained widening of the CAD or the emergence of
external financing constraints.
- Public Finances: Permanent widening of fiscal deficits that lead
to a rapid increase in government debt over the medium term.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Structural: A significant and sustained reduction in geopolitical
risks.
- External: A reduction in external vulnerabilities, for example
due to a sustained reduction in the CAD, especially if accompanied
by greater FDI inflows.
- Macro: Stronger GDP growth prospects while preserving
macroeconomic stability, for example, as a result reforms that lead
to higher investment and improved institutional strength.
Sovereign Rating Model (SRM) and Qualitative Overlay (QO)
Fitch's proprietary SRM assigns Moldova a score equivalent to a
rating of 'BB-' on the Long-Term Foreign-Currency (LT FC) IDR
scale.
Fitch's sovereign rating committee adjusted the output from the SRM
score to arrive at the final LT FC IDR by applying its QO, relative
to SRM data and output, as follows:
- Structural: -1 notch, to reflect heightened geopolitical risks,
as Moldova is exposed to the spillover of the war in neighbouring
Ukraine, hosts a frozen conflict with a breakaway territory and is
vulnerable to Russian interference in domestic politics.
Fitch's SRM is the agency's proprietary multiple regression rating
model that employs 18 variables based on three-year centred
averages, including one year of forecasts, to produce a score
equivalent to a LT FC IDR. Fitch's QO is a forward-looking
qualitative framework designed to allow for adjustment to the SRM
output to assign the final rating, reflecting factors within its
criteria that are not fully quantifiable and/or not fully reflected
in the SRM.
Country Ceiling
The Country Ceiling for Moldova is 'B+', in line with the LT FC
IDR. This reflects no material constraints and incentives, relative
to the IDR, against capital or exchange controls being imposed that
would prevent or significantly impede the private sector from
converting local currency into foreign currency and transferring
the proceeds to non-resident creditors to service debt payments.
Fitch's Country Ceiling Model produced a starting point uplift of
'0' notches above the IDR. Fitch's rating committee did not apply a
qualitative adjustment to the model result.
ESG Considerations
Moldova has an ESG Relevance Score of '5' for Political Stability
and Rights as World Bank Governance Indicators have the highest
weight in Fitch's SRM and are therefore highly relevant to the
rating and a key rating driver with a high weight. As Moldova has a
percentile rank below 50 for the respective Governance Indicator,
this has a negative impact on the credit profile.
Moldova has an ESG Relevance Score of '5' for Rule of Law,
Institutional & Regulatory Quality and Control of Corruption as
World Bank Governance Indicators have the highest weight in Fitch's
SRM and are therefore highly relevant to the rating and are a key
rating driver with a high weight. As Moldova has a percentile rank
below 50 for the respective Governance Indicators, this has a
negative impact on the credit profile.
Moldova has an ESG Relevance Score of '4+' for Human Rights and
Political Freedoms as the Voice and Accountability pillar of the
World Bank Governance Indicators is relevant to the rating and a
rating driver. As Moldova has a percentile rank above 50 for the
respective Governance Indicator, this has a positive impact on the
credit profile.
Moldova has an ESG Relevance Score of '4' for Creditor Rights as
willingness to service and repay debt is relevant to the rating and
is a rating driver for Moldova, as for all sovereigns. As Moldova
has a fairly recent restructuring of public debt in year 2006, this
has a negative impact on the credit profile
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
----------- ------ -----
Moldova LT IDR B+ Affirmed B+
ST IDR B Affirmed B
LC LT IDR B+ Affirmed B+
LC ST IDR B Affirmed B
Country Ceiling B+ Affirmed B+
===========
M O N A C O
===========
VILLA ROMA: March 21 Auction Set for Two Duplex Apartment Units
---------------------------------------------------------------
99 AVOCATS Law Firm will auction a foreclosed property on March 21
at 9:00 am. at the Court of First Instance, Palais de Justice, Rue
Colonel Bellando de Castro in Monaco.
The following units in the Villa de Rome apartment block at 11
Boulevard de Suisse in Monaco will be put up for sale:
-- Unit 178, a duplex apartment on the 5th and 6th floors, and
-- Unit 179, a duplex apartment on the 5th and 6th floors
The two units have been combined to form a single property.
A description of the property in its current state follows:
On the fifth floor: two entrance halls, living room, kitchen, linen
room, two bedrooms, two bathrooms, two separate toilets, pantry,
study, two hallways, terrace, four balconies.
On the sixth floor: four bedrooms, a gym, four bathrooms, separate
toilet, sauna, walk-in-wardrobe, two hallways, four loggias and two
planters.
The two levels are served by two internal staircases.
The sale is sought at the request of public limited company UBS
(Monaco) S.A., whose registered office is located at 2 Avenue de
Grande Bretagne (MONACO), acting through Alejandro Velez, managing
director, against the private non-trading company Societe Civile
Immobiliere VILLA ROMA, whose registered office is located at 11
Boulevard de Suisse (MONACO), represented by its current manager.
The property shall be sold by public auction in a single lot to the
highest and final bidder at the starting price of EUR43,500,000.
In addition to the charges and conditions set out in the
specifications, and in particular the legal costs, the amount of
which shall be made public before the auction opens.
Participation in the auction shall only be authorized after a
deposit has been made at the Court Registry Office of a sum
corresponding to 20% of the auction price the day before the
auction hearing via a bank check drawn on an institution
established in the Principality of Monaco i.e. in the sum of
EUR8,700,000.
The bids shall be received in accordance with Sections 612 to 620
of the Civil Procedure Code plus the charges and conditions set out
in the specifications file.
In accordance with Article 603 of the Monegasque Civil Procedure
Code, it is hereby declared that all those on whose behalf a legal
mortgage may be registered must request such registration before
the auction is recorded.
For further information, please contact:
Maitre Thomas Giaccardi, Attorney at Law
16 rue du Gabian
98000 Monaco
Telephone: 00 377 97 70 40 70
Or consult the specifications at the Court Registry Office - Palais
de Justice rue Colonel Bellando de Castro, Monaco.
=============
U K R A I N E
=============
VF UKRAINE: S&P Ups ICR to 'CCC+' on Completed Eurobond Exchange
----------------------------------------------------------------
S&P Global Ratings upgraded Ukrainian telecom operator VF Ukraine
to 'CCC+'. S&P also assigned a 'CCC+' issue rating on the $300
million new Eurobond due in 2027.
The negative outlook reflects the downgrade risk if S&P thinks VF
Ukraine might restructure its debt in a way we could consider as
tantamount to a default.
VF Ukraine repaid $99.9 million of its $400 million Eurobond due in
February 2025 and exchanged the remaining portion at par for new
9.625% notes due in 2027.
S&P said, "While we consider the debt exchange as distressed due to
the maturity and capital control restrictions on Ukraine, we do not
consider it a selective default case since we deem bondholder
compensation to be adequate. On Feb. 11, 2025, VF Ukraine repaid
$99.9 million of its $400 million Eurobond due in February 2025 and
exchanged the remaining $300 million for new senior unsecured notes
at par, maturing in February 2027, with a fixed interest rate of
9.625% (up from 6.2%). Together with the cash coupon uplift,
noteholders received a 2% cash consent fee and a put option,
allowing them to redeem their notes if the NBU eases its capital
control restrictions. This would enable VF Ukraine to repay the
notes using funds held in Ukraine. This further supports our view
that bondholders will receive adequate compensation and improved
conditions compared to the original agreement, despite the two-year
extension.
"Our 'b+' SACP assessment on VF Ukraine is supported by resilient
operations despite the ongoing Russia-Ukraine war, as well as
adequate liquidity in the next 12 months (post transaction). VF
Ukraine's revenues were up by 13% for the first nine months of 2024
because its mobile customer base increased by 5% to 15.8 million,
while average revenue per mobile customer was up by 9% to Ukrainian
hryvnia (UAH) 122.4 due to higher mobile service use. The company's
EBITDA margin decreased to a still very high level of 53% from 57%
due to higher personnel and electricity expenses. VF Ukraine's
resilient operations support our expectation that S&P Global
Ratings-adjusted leverage will remain stable at 1.5x-1.6x in
2024-2025 because the $100 million Eurobond redemption will offset
the $49.5 million shareholder loan issuance and lower margin. We
estimate adjusted free operating cash flow (FOCF) will increase to
about UAH6 billion in 2024-2025, from UAH5 billion in 2023 since
capital expenditures (capex) to sales decreased to 19% for the
first nine months of 2024 from 24% a year ago. That said, we
acknowledge capex may fluctuate depending on the level of
war-related repairs. This will underpin FOCF to debt rising to
28%-33% in 2024-2025, from 25% in 2023. We expect cash sources to
exceed cash uses by approximately 1.2x in the 12 months starting
Jan.15, 2025, even if the put option to repay the $300 million
Eurobond due in 2027 is exercised. We also note since December
2024, the NBU has eased its capital control restrictions, allowing
VF Ukraine to service the coupons of the Eurobond due in 2027
without needing one-off approval from the regulator. We therefore
assess VF Ukraine's SACP--before any sovereign or T&C
considerations--as 'b+'.
"Our rating on VF Ukraine is capped by our 'CCC+' T&C assessment on
Ukraine. We rate VF Ukraine above our sovereign foreign currency
rating on Ukraine because the company and its ultimate parent,
Neqsol Holding, pass our sovereign default stress test. This is
because the majority of VF Ukraine's cash balances is held in hard
currencies. The rating on VF Ukraine is not affected by our view
that it is a highly strategic subsidiary of Neqsol Holding.
However, we cap our issuer credit rating on VF Ukraine to our
'CCC+' T&C assessment on Ukraine. This reflects that under existing
capital controls imposed by the NBU, VF Ukraine still requires
special authorization to repay the $300 million Eurobond principal
using cash held in Ukraine." Sovereign and T&C considerations
remain the overarching risk to VF Ukraine's credit quality.
S&P Global Ratings notes a high degree of uncertainty about the
extent, outcome, and consequences of the Russia-Ukraine war.
Regardless of how long military hostilities continue, related risks
are likely to persist for some time. S&P will update its
assumptions and estimates as the situation develops.
S&P said, "The negative outlook reflects the downgrade risk if we
think VF Ukraine might restructure its debt in a way we consider as
tantamount to a default.
"We could lower the rating if we see an increased risk that VF
Ukraine will restructure its debt in a way we consider as
tantamount to a default. We also could also lower the rating if we
lowered our T&C assessment on Ukraine.
"We could revise the outlook to stable if we gain clarity on VF
Ukraine's ability to address the Eurobond maturing in February 2027
without resorting to debt restructuring that we would consider as
tantamount to a default."
===========================
U N I T E D K I N G D O M
===========================
ALLWYN ENTERTAINMENT: S&P Gives BB Rating on EUR450MM Term Loan B
-----------------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue rating and '3' recovery
rating to the proposed EUR450 million term loan B (TLB) to be
issued by Allwyn Entertainment Financing (UK) PLC, the U.K.
financing subsidiary of Allwyn International AG. In addition,
Allwyn plans to issue a $100 million add-on to its existing $548
million TLB through its U.S. financing subsidiary Allwyn
Entertainment Financing (US) LLC. The '3' recovery rating on both
instruments indicates its expectation of meaningful recovery
prospects (50%-70%; rounded estimate: 55%) in the event of a
default.
Allwyn will use the proceeds from the proposed issuances to redeem
about EUR450 million of Allwyn's syndicated bank loans, including
EUR42 million outstanding revolving credit facility (RCF) drawings,
and retain cash on the balance sheet for general corporate
purposes. The proposed transaction is therefore broadly neutral in
terms of leverage.
S&P said, "Our 'BB' long-term issuer credit rating and negative
outlook on Allwyn and its subsidiaries, as well as the issue
ratings on the existing debt, are unchanged. The negative outlook
continues to reflect our expectation that Allwyn's adjusted debt to
EBITDA will increase toward 4.5x in 2024, funds from operations to
debt will decline toward 13%-15%, and free operating cash flow to
debt will be 5%-7% during the same period. Allwyn's operational
standing is currently challenged by the expiration of the
LottoItalia license in 2025. Although our base-case assumption is
that Allwyn will continue to operate the license together with IGT,
we believe that the process is likely to be competitive and could
result in less favorable renewal terms in a large cash outflow. The
deterioration in credit metrics could continue in 2025 due to
higher operational costs and the recent mergers and acquisitions
activity, if Allwyn does not restore leverage in line with its
financial policy target of consolidate net debt to EBITDA below
2.5x (translating into about 4.5x in our adjusted terms) by
year-end 2025."
Issue Ratings--Recovery Analysis
Key analytical factors
-- S&P said, "We rate Allwyn's existing EUR665 million senior
notes due 2030, the $700 million senior notes due 2029, the EUR500
million senior notes due 2027, the $548 million TLB due 2031 and
its proposed $100 million add-on and the EUR450 million TLB due
2032 'BB'. The '3' recovery rating on these instruments reflects
our expectation of meaningful recovery (50%-70%; rounded estimate:
55%) in a default scenario."
-- S&P's recovery rating considers approximately EUR1.2 billion of
unrated bank term loans that also sit at the holdco level and are
pari passu with the rated notes and TLBs. These include a EUR300
million RCF; about EUR393 million of term loans and about EUR835
million in accordion facilities.
-- The nature of our assumed hypothetical default scenario is a
critical assumption in the recovery calculation. S&P's default
scenario for the holdco assumes stress at one or more subsidiaries,
resulting in a material reduction in dividends upstreamed to the
holdco, although not necessarily the simultaneous default of all
the operating companies. This could occur, for example, as a result
of the hypothetical loss of a material license contract, or severe
operational disruption at one or more operating entities.
-- S&P uses an EBITDA multiple valuation for all of Allwyn's
majority-owned operating entities and a heavily discounted cash
dividend inflow from LottoItalia to derive a hypothetical gross
distressed enterprise value of EUR4.4 billion (EUR4.2 billion after
administrative expenses).
-- Subsequently, S&P deducts priority debt claims and derive the
implied equity value of each operating entity. Applying Allwyn's
equity ownership of OPAP and Casinos Austria AG (CASAG) leads to an
estimated value distributable to the secured claims at the holdco
level of about EUR2.3 billion.
-- S&P said, "As part of our hypothetical default scenario, we
assume that the LottoItalia license, which expires in 2025, is
renewed, and that no additional debt is raised on the path to
default at subsidiaries that are not 100% owned by Allwyn. As such,
implicit in our assumptions and approach is that there is residual
equity value available after structurally senior subsidiary debt
claims on the parent, Allwyn."
-- Recovery prospects are sensitive to assumptions about the
nature of how the group would ultimately default (the hypothetical
default scenario); which entities experience what level of stress;
the realized value of the operating companies; and any increase in
debt at Allwyn or the subsidiaries on the path to default.
Simulated default assumptions
-- Year of default: 2030
-- Jurisdiction: U.K. and Czech Republic
Simplified waterfall
-- Net enterprise value after administrative costs (5%): EUR4.2
billion
-- Obligor/non-obligor split: 34%/66%
-- Estimated priority debt claims (consolidated debt of OPAP and
CASAG): EUR682 million
-- Net residual value distributed to priority claims (including
minority interest): EUR1.6 billion
-- Estimated senior secured debt claims: EUR4.2 billion
-- Estimated value available for secured claims: EUR2.5 billion
--Recovery expectations: 50%-70% (rounded estimate: 55%)
All debt amounts include six months of prepetition interest. The
RCF is assumed 85% drawn at default.
ALSIM SYSTEM: Redman Nichols Named as Administrators
----------------------------------------------------
Alsim System Building Limited was placed into administration
proceedings in the High Court of Justice, Business and Property
Courts in Leeds, Insolvency and Companies List, Court Number:
CR-2025-LDS000227, and John William Butler and Andrew James Nichols
of Redman Nichols Butler were appointed as administrators on March
5, 2025.
Alsim System is a manufacturer of other fabricated metal products.
Its registered office is at The Chapel, Bridge Street, Driffield,
YO25 6DA
Its principal trading address is at stockholm Road, Hull, HU7 0XW
The joint administrators can be reached at:
John William Butler
Andrew James Nichols
Redman Nichols Butler
The Chapel, Bridge Street
Driffield, YO25 6DA
For further details contact:
Stephanie Coulter
Tel No: 01377 257788
BENCHMARK SECURITY: Path Business Named as Administrators
---------------------------------------------------------
Benchmark Security Solutions Ltd was placed into administration
proceedings in the High Court of Justice, Business and Property
Courts in Manchester, Court Number CR2025001357, and Gareth Howarth
of Path Business Recovery Limited was appointed as administrators
on March 5, 2025.
Benchmark Security specialized in Security.
Its registered office and principal trading address is at Roeacre
House Roeacre Business Park, Fir Street, Heywood, OL10 1NW
The joint administrators can be reached at:
Gareth Howarth
Path Business Recovery Limited
2nd Floor, 9 Portland Street
Manchester, M1 3BE
Tel No: 0161 413 0999
For further details, contact:
Joel Furmidge
Path Business Recovery Limited
2nd Floor, 9 Portland Street
Manchester, M1 3BE
Tel No: 0161 413 0999
Email: joel.furmidge@pathbr.co.uk
CASTELL 2023-2: S&P Raises Class F Notes Rating to BB(sf)
---------------------------------------------------------
S&P Global Ratings raised to 'AA+ (sf)' from 'AA (sf)', to 'AA-
(sf)' from 'A (sf)', to 'BBB+ (sf)' from 'BBB (sf)', to 'BBB- (sf)'
from 'BB (sf)', and to BB (sf)' from 'B+ (sf)' its credit ratings
on Castell 2023-2 PLC's class B-Dfrd, C-Dfrd, D-Dfrd, E-Dfrd, and
F-Dfrd notes, respectively. At the same time, S&P affirmed its 'AAA
(sf)' ratings on the class A1 and A2 notes.
The upgrades reflect that while arrears performance has marginally
deteriorated since closing, credit enhancement for the class B-Dfrd
to F-Dfrd notes has increased due to prepayments and the
transaction's sequential amortization. Loan-level arrears stand at
3.4%, up from 2.1% at closing. Arrears of greater than or equal to
90 days currently stand at 1.8%, up from 0.99% at closing.
The one-month annualized constant prepayment rate has risen to
22.7%, and, on average, has been in line with our U.K. prime index
over the last six months. Prepayments have increased credit
enhancement for the class A to F-Dfrd notes, offsetting the
increased arrears.
The liquidity reserve fund remains at its target, and all losses
have been cleared via excess spread.
Overall, since closing, S&P's weighted-average foreclosure
frequency assumptions have increased slightly at all rating levels
due to the higher loan-level arrears.
On the other hand, the slightly lower current loan-to-value ratio
led to a slight reduction in our weighted-average loss severity
assumptions.
Table 1
Portfolio WAFF and WALS
Base foreclosure
frequency component for
Rating Credit an archetypical U.K.
Level WAFF (%) WALS (%) coverage (%) mortgage loan pool (%)
AAA 24.24 85.39 20.70 12.00
AA 16.92 79.48 13.45 8.00
A 13.21 66.14 8.74 6.00
BBB 9.49 55.83 5.30 4.00
BB 5.75 47.20 2.71 2.00
B 4.82 38.98 1.88 1.50
WAFF--Weighted-average foreclosure frequency.
WALS--Weighted-average loss severity.
S&P said, "We affirmed our 'AAA (sf)' ratings on the class A1 and
A2 notes. Our credit and cash flow results indicate that the
available credit enhancement continues to be commensurate with the
assigned rating.
"The rating on the class B-Dfrd notes is below the rating indicated
by our cash flow analysis. Our rating on these notes addresses
payment of ultimate interest and principal, and interest can defer
on these notes when they are not the most senior class outstanding.
The presence of interest deferral mechanisms is, in our view,
inconsistent with the definition of a 'AAA' rating. We therefore
limited our upgrade to a 'AA+ (sf)' rating.
S&P said, "Our ratings on the class C-Dfrd, D-Dfrd, E-Dfrd, and
F-Dfrd notes are in line with our sensitivity runs considering
higher defaults. The ratings reflect the negative arrears trend
since closing and these notes' position in the capital structure.
We raised our ratings on the class C-Dfrd, D-Dfrd, E-Dfrd, and
F-Dfrd notes."
Macroeconomic forecasts and forward-looking analysis
S&P said, "We expect U.K. inflation to remain above the Bank of
England's 2% target in 2025, even though inflation has been moving
back toward the target quicker than expected. The year-on-year
change in house prices in the fourth quarter of 2024 in the U.K.
was 3.5%. Although high inflation is overall credit negative for
all borrowers, inevitably some borrowers will be more negatively
affected than others, and to the extent inflationary pressures
materialize more quickly or more severely than currently expected,
risks may emerge.
"Given our current macroeconomic forecasts and forward-looking view
of the U.K. residential mortgage market, we have performed
sensitivities related to higher levels of defaults due to increased
arrears and extended recovery timing due to observed delays to
repossession owning to court backlogs in the U.K. and the
repossession grace period announced by the U.K. government under
the Mortgage Charter. The notes remained robust to these
sensitivities."
The transaction is backed by a pool of second-lien owner-occupied
mortgage loans secured on properties in England, Scotland, and
Wales.
CFG INVESTMENTS: S&P Assigns Prelim. B(sf) Rating on Cl. C Notes
----------------------------------------------------------------
S&P Global Ratings assigned its preliminary ratings to CFG
Investments Ltd.'s series 2025-1 notes.
The note issuance is an ABS transaction backed by unsecured
personal loan receivables originated in five jurisdictions: Aruba
(BBB/Positive/A-2), Curacao (BBB-/Stable/A-3), Bonaire (not rated),
Panama (BBB-/Stable/A-3), and Sint Maarten (not rated).
The preliminary ratings are based on information as of March 12,
2025. Subsequent information may result in the assignment of final
ratings that differ from the preliminary ratings.
The preliminary ratings reflect:
-- The availability of approximately 30.7%, 22.2%, and 13.5% hard
credit enhancement to the class A, B, and C notes, respectively, in
the form of subordination, overcollateralization, and a reserve
account. Additionally, the deal will benefit by approximately 20.0%
excess spread. These credit support levels are, in S&P's view,
sufficient to withstand stresses commensurate with the preliminary
ratings on the notes, based on its stressed cash flow scenarios.
-- S&P's expectation of timely interest and principal payments by
the legal final maturity dates under stressed cash flow modeling
scenarios appropriate to the assigned preliminary ratings.
-- The collateral characteristics of the securitized pool, which
includes loans from five different jurisdictions: Aruba, Curacao,
Bonaire, Panama, and Sint Maarten. The transaction has a 25-month
revolving period during which the loan composition can change. As
such, S&P considered the worst-case pool allowed by the
transaction's concentration limits.
-- The transaction's payment structure and mechanisms, which
incorporate performance-based triggers, which are linked to a
monthly cumulative net loss percentage defined in the transaction
documents that lead to revolving period termination events, and
early amortization triggers that are linked to a servicer default,
among others.
-- The transaction's legal structure, which includes a Cayman
Islands special-purpose vehicle issuing the notes and
special-purpose entities in each jurisdiction (called borrowers) to
which the respective sellers has transferred the portfolio of loans
(the beneficial interests).
-- CFG Holdings Ltd.'s track record in originating and servicing
consumer loan products across all jurisdictions, its established
management, and our assessment of the operational risks associated
with CFG's decentralized business model across certain
jurisdictions.
-- The transaction's exposure to the counterparty risk of the bank
account providers (which have credit quality consistent with the
preliminary ratings) in each relevant jurisdiction, the
transaction's commingling risk (which S&P believes is mitigated by
the two-day transfer of funds), and the existence of a reserve
account.
Preliminary Ratings Assigned
CFG Investments Ltd. (Series 2025-1)
Class A, $180.7 million: BBB- (sf)
Class B, $21.8 million: BB (sf)
Class C, $22.5 million: B (sf)
Class R, $0.0 million: NR
Class RR, $11.0 million: NR
NR--Not rated.
EVERGREEN AIR: Path Business Named as Administrators
----------------------------------------------------
Evergreen Air Conditioning Services Ltd was placed into
administration proceedings in the High Court of Justice, Business
and Property Courts in Manchester, Court Number CR2025MAN000330,
and Gareth Howarth of Path Business Recovery Limited was appointed
as administrators on March 5, 2025.
Its registered office and principal trading address is at Unit 7a
Radford Crescent, Billericay, CM12 0DU
The joint administrators can be reached at:
Gareth Howarth
Path Business Recovery Limited
2nd Floor, 9 Portland Street
Manchester, M1 3BE
Tel No: 0161 413 0999
For further details, contact:
Joel Furmidge
Path Business Recovery Limited
2nd Floor, 9 Portland Street
Manchester, M1 3BE
Tel No: 0161 413 0999
Email: joel.furmidge@pathbr.co.uk
FALCON SPECIAL: Opus Restructuring Named as Administrators
----------------------------------------------------------
Falcon Special Projects Ltd was placed into administration
proceedings in the High Court of Justice, Court Number:
CR-2025-000211, and Frank Ofonagoro and Gary N Lee of Opus
Restructuring LLP were appointed as administrators on March 3,
2025.
Falcon Special is a manufacturer of other fabricated metal
products.
Its registered office is at Opus Restructuring LLP, 1 Radian Court,
Knowlhill, Milton Keynes MK5 8PJ
Its principal trading address is at 6 The Furrows, St Ives,
Cambridgeshire, PE27 5WG
The joint administrators can be reached at:
Frank Ofonagoro
Gary N Lee
Opus Restructuring LLP
2nd Floor, 3 Hardman Square
Spinningfields
Manchester M3 3EB
For further details, contact:
Mark Percival
Email: mark.percival@opusllp.com
HEMMELS LIMITED: Leonard Curtis Named as Administrators
-------------------------------------------------------
Hemmels Limited was placed into administration proceedings in the
High Court of Justice Business and Property Courts of England and
Wales Court Number: CR-2025-001289, and Andrew Knowles and Andrew
Poxon of Leonard Curtis, were appointed as administrators on March
6, 2025.
Hemmels Limited engaged in the restoration and maintenance of
premium motor vechicles.
Its registered office is at Permanent House, 1 Dundas Street,
Huddersfield, HD1 2EX
Its principal trading address is at Freemans Parc, Penarth Road,
Cardiff, CF11 8TU
The joint administrators can be reached at:
Andrew Knowles
Andrew Poxon
Leonard Curtis
Riverside House
Irwell Street
Manchester, M3 5EN
For further details, contact:
The Joint Administrators
Tel: 0161 831 9999
Email: recovery@leonardcurtis.co.uk
Alternative contact: Sidhra Qadoos
LEOSTAR BESPOKE: MHA Named as Administrators
--------------------------------------------
Leostar Bespoke Promotions Limited was placed into administration
proceedings in the High Court of Justice, Court Number:
CR-2025-1566, and Georgina Marie Eason and James Alexander Snowdon
of MHA were appointed as administrators on March 7, 2025.
Leostar Bespoke was engaged in printing.
Its registered office and principal trading is at Unit C1
Brickhouse Lane, South Godstone, Godstone, RH9 8JW.
The joint administrators can be reached at:
James Alexander Snowdon
Georgina Marie Eason
MHA
6th Floor, 2 London Wall Place
London, EC2Y 5AU
For further details, contact:
Daniel Cowie
Tel No: 0204 546 6045
Email: Daniel.Cowie@mha.co.uk
LERNEN BONDCO: S&P Affirms 'B-' ICR & Alters Outlook to Positive
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Lernen Bondco PLC
(Cognita) from stable to positive and affirmed its 'B-' long-term
issuer credit ratings on Lernen Bondco PLC and Lernen Bidco Ltd.,
S&P also affirmed the 'B-' issue ratings on the senior secured
debt.
S&P said, "The positive outlook reflects our view that the group
reports revenue growth of 10% to GBP1.1 billion and S&P Global
Ratings-adjusted EBITDA margin of 26%-27% in fiscal 2025. We
anticipate normalized FOCF after leases to be break even in fiscal
2025 and turn positive in fiscal 2026 and leverage to drop below
7.0x absent of further debt-funded mergers and acquisitions (M&A).
We also expect the group to maintain an adequate liquidity over the
next 12-18 months."
In fiscal 2024, Cognita reported strong growth like-for-like as
well as successfully integrating acquired schools, driving revenue
growth and margin improvement. Revenue increased by 18.3% during
the 12-months to Aug. 31, 2024 (fiscal 2024) above GBP1 billion
supported by strong capacity increases especially in the Middle
East and improving utilization rates (up to 81.6% compared with
80.3% in fiscal 2023). In fiscal 2024, Cognita acquired 67.2%
shareholding in Dasman Bilingual School in Kuwait for GBP100
million, Four-Forest Group in Switzerland for GBP16 million, and Al
Ain English Speaking School in the United Arab Emirates for GBP75
million. The group has also successfully passed on fee increases to
parents. S&P Global Ratings-adjusted EBITDA margin also improved to
25.2% (from 23.0% in fiscal 2023) because of the higher margin of
newly acquired schools as well as cost efficiency measures.
S&P said, "We expect the group to benefit from the contribution of
new schools driving revenue growth to 10% in fiscal 2025. During
the first quarter of fiscal 2025, the group acquired a 65% stake in
Doukas School in Athens, Greece for GBP15 million and we expect the
acquisitive trend to continue in fiscal 2025 in line with previous
years leading to an overall M&A spend of close to GBP235 million
(including around GBP100 million related to deferred consideration
from previous acquisitions). We anticipate that this would drive
revenues to GBP1.1 billion in fiscal 2025 and up to GBP1.2 billion
in fiscal 2026 with S&P Global Ratings-adjusted EBITDA margins
improving to about 26.6% in fiscal 2025 and 27.4% in fiscal 2026,
as the newly acquired schools generate higher operating margins."
The group is pursuing high capex leading to negative FOCF after
leases. In addition to acquisitions, the group is pursuing an
expansionary strategy through green and brown field projects, such
a new site in Hong Kong, which leads to capex remaining elevated in
fiscal 2025 to the tune of GBP135 million and GBP108 million in
fiscal 2026. This, together with lower working capital inflows in
relation to U.K. payments, will lead to negative FOCF after leases
in fiscal 2025, rapidly improving toward GBP50 million in fiscal
2026 as we expect the group to tone down capex by focusing on a
more asset-light growth strategy.
The group is exposed to the removal of the value-added tax (VAT)
exemption for private schools in the U.K., but the effect remains
limited in the short to medium term. Cognita has 40 schools in the
U.K. (out of 106 worldwide), representing about 8% of EBITDA and
decreasing as the group continues to geographically diversify. S&P
said, "We do not expect any major effect on the ratings in the
short term from this regulatory change, but the group has noted
some softening in their U.K. new enrolments. We note that, overall,
the sector is exposed to changes in regulation and increasing
geographical diversification reduced the risk of changes in any one
single country. In addition, this change has affected working
capital movements as parents made significant pre-payments towards
the end of fiscal 2024 ahead of the regulatory change. This led to
an exceptional working capital inflow of around GBP30 million in
fiscal 2024 that will be reversed in fiscal 2025. If we were to
eliminate this effect, FOCF after leases would be close to
breakeven in both fiscal 2024 and 2025."
S&P said, "The additional debt issuances over the last two years
have delayed the deleveraging trajectory but we expect S&P Global
Ratings-adjusted leverage to be below 7.0x in fiscal 2026. The
group's S&P Global Ratings-adjusted debt will have increased by
GBP360 million to GBP2.34 billion by the end of fiscal 2025 because
of the add-ons into the existing term loans with the most recent
being a $450 million term loan B (TLB) issued in October 2024. This
latest increase in debt came together with a GBP150 million equity
injection from shareholders. The additional funding supports the
group's growth strategy by acquisitions (including deferred
considerations from previous years), and high capex. As a result,
and despite the improvement in EBITDA, we expect the group to
finish fiscal 2025 with leverage close to 7.8x and dropping to 6.8x
in fiscal 2026."
The group has a proactive hedging strategy as well as the ability
to draw on the revolving credit facility (RCF) in multiple
currencies, limiting the foreign exchange risk on its debt. The
group has approximately GBP1,062 million-equivalent
euro-denominated and about GBP350 million of U.S.-dollar
denominated first-lien debt. The group's EBITDA generation in euros
remains limited at about 8% of the group's total (approximately
GBP20 million to GBP25 million-equivalent). However, it has
interest payments in that currency above GBP40 million-equivalent
annually, which could expose the group to foreign exchange risk in
case of hedging strategy failing to fully mitigate an elevated
currency volatility. Nevertheless, the group and its shareholders
proactively manage its foreign exchange exposure and have entered
currency swaps when required. Cognita also has full availability
under the RCF, which it can draw in euros to cover interest
payments if needed. Therefore, S&P assesses the capital structure
as neutral.
S&P said, "The positive outlook reflects our view that the group
will continue to report like-for-like growth despite some
regulatory pressures in the U.K., and to successfully integrate the
newly acquired schools. We expect this to translate to revenue
above GBP1.1 billion and improving S&P Global Ratings-adjusted
EBITDA margins to about 26%-27% in fiscal 2025. Excluding the
working capital effect from the U.K. payment, we anticipate FOCF
after leases to be break even in fiscal 2025 and turn positive in
fiscal 2026 despite the elevated capex while leverage organically
decreases below 7.0x, absent of further debt-funded M&A. We also
expect the company to maintain an adequate liquidity over the next
12-18 months.
"We could review the outlook to stable if the company failed to
improve cash flow generation or did not demonstrate a path to
deleverage below the current level, in line with our base case."
S&P could take a positive rating action if the group performed in
line with its base case, together with a commitment from the
company to support these metrics, such as:
-- FOCF after leases turns sustainably positive; and
-- S&P Global Ratings-adjusted debt to EBITDA below 7.0x.
An upgrade would also hinge on the group maintaining an adequate
liquidity at all times and a supportive financial policy.
LEVENSEAT LTD: BDO LLP Named as Administrators
----------------------------------------------
Levenseat Ltd was placed into administration proceedings in the
Court of Session, No P219 of 2025, and James Stephen and Mark
Thornton of BDO LLP were appointed as administrators on March 4,
2025.
Levenseat Ltd is engaged in environmental & waste services.
Its registered office is at Levenseat, By Forth, Lanark, ML11 8EP
to be changed to c/o BDO LLP, at 2 Atlantic Square, 31 York Street,
Glasgow, G2 8NJ
Its principal trading address is at Levenseat, By Forth, Lanark,
ML11 8EP
The joint administrators can be reached at:
James Stephen
BDO LLP
2 Atlantic Square
31 York Street
Glasgow, G2 8NJ
-- and --
Mark Thornton
BDO LLP
Central Square
29 Wellington Street
Leeds, LS1
For further details, contact:
The Joint Administrators
Email: BRCMTNorthandScotland@bdo.co.uk
Telephone: 0151 237 2526
Alternative contact: Abby Lalor
NUSTONE PRODUCTS: Bailey Ahmad Named as Administrators
------------------------------------------------------
Nustone Products Ltd was placed into administration proceedings in
the High Court of Justice Business and Property Courts of England
and Wales, Court Number: CR-2025-001515 of 2025, and Nick Cusack
and Tommaso Waqar Ahmad of Bailey Ahmad Ltd were appointed as
administrators on March 6, 2025.
Nustone Products, fka Stone It Limited, have agents involved in the
sale of timber and building materials.
Its registered office and principal trading address is at Kettering
Road, Islip, England, NN14 3JW.
The joint administrators can be reached at:
Nick Cusack
Tommaso Waqar Ahmad
Bailey Ahmad Ltd
T/A BABR, Sussex Innovation Centre
Science Park Square
Brighton East Sussex, BN1 9SB
For further details, contact:
Sarah Ellis
Tel No: 020 8662 6070
SEPLAT ENERGY: S&P Assigns 'B' Rating on New $650 Million Notes
---------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue rating to the proposed
$650 million notes to be issued by Seplat Energy PLC (B/Stable/--).
Bond proceeds will refinance the existing $650 million notes
maturing in 2026.
S&P's ratings on the company, including its 'B' long-term issuer
credit rating, are unchanged.
Issue Ratings - Subordination Risk Analysis
Capital structure
Pro forma the transaction, Seplat's capital structure will consist
mainly of the following:
-- Senior unsecured notes totaling $650 million;
-- A $350 million senior secured revolving credit facility (RCF;
fully drawn currently, but we understand that the company intends
to repay it soon with unrestricted cash on the balance sheet,
operating cash flow, and potentially some bond proceeds) maturing
in December 2026;
-- A $300 million advanced payment facility issued at a subsidiary
level (Seplat Energy Offshore Ltd.);
-- A $110 million senior secured reserve-based lending (RBL)
facility (fully drawn) issued by Westport Oil & Gas, a fully owned
subsidiary of Eland Oil & Gas PLC and maturing in March 2026; and
-- A $50 million junior RBL facility also issued by Westport Oil &
Gas and maturing in March 2027 (both facilities have already
started to amortize).
The new notes and secured RCF are issued at the listed company
level and guaranteed by the main operating subsidiaries. The RBL is
secured against Eland's main producing asset and is nonrecourse to
Seplat. S&P said, "However, we think Seplat's shares in Eland
provide it with a moral imperative to support the RBL, despite not
being contractually obligated to do so. We also think the RCF and
RBL will rank above the notes in right of repayment since both are
secured."
Analytical conclusions
S&P's 'B' issue rating assigned on Seplat's $650 million senior
unsecured notes is in line with the issuer credit rating, based on
its expectation that the priority debt ratio will be below 50%.
SURE CHILL: FRP Advisory Named as Administrators
------------------------------------------------
The Sure Chill Company Limited was placed into administration
proceedings in the High Court of Justice, Court Number:
CR-2025-001228, and Richard Bloomfield and Philip David Reynolds of
FRP Advisory Trading Limited were appointed as administrators on
March 7, 2025.
The Sure Chill Company offers cooling services for food, beverages,
retail, energy, and home appliances sectors.
Its registered office is at Unit S05-S06 Forgeside Close, Cardiff,
CF24 5FA to be changed to Dencora Court, 2 Meridian Way, Norwich,
Norfolk, NR7 0TA
Its principal trading address is at Unit N05-N06 Forgeside Close,
Cardiff, CF24 5FA
The joint administrators can be reached at:
Richard Bloomfield
Philip David Reynolds
FRP Advisory Trading Limited
Dencora Court, 2 Meridian Way
Norwich, NR7 0TA
For further details, contact:
The Joint Administrators
Tel No: 01603 703 173
Alternative contact:
Jordan Fawcett
Email: cp.norwich@frpadvisory.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-
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Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante,
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Editors.
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