251021.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Tuesday, October 21, 2025, Vol. 26, No. 210
Headlines
D E N M A R K
WS AUDIOLOGY: Fitch Assigns 'B' LongTerm IDR, Outlook Stable
F R A N C E
LA FINANCIERE: S&P Affirms 'CCC+' ICR & Alters Outlook to Negative
G E R M A N Y
RETAIL AUTOMOTIVE 2021: DBRS Hikes F Notes Rating to BB(high)
REVOCAR 2023-2: DBRS Confirms BB Rating on Class D Notes
SC GERMANY 2024-2: Fitch Affirms 'BB+sf' Rating on Class E Notes
TTD HOLDING III: Fitch Alters Outlook on 'B' LongTerm IDR to Neg.
G R E E C E
NAVIOS MARITIME: S&P Rates Up to $300MM Unsecured Notes 'BB'
I R E L A N D
CIFC EUROPEAN II: S&P Assigns B-(sf) Rating on Class F-R Notes
CROSS OCEAN VII: S&P Assigns B-(sf) Rating on Class F-R-R Notes
I T A L Y
ARAGORN NPL 2018: DBRS Keeps CCC Rating on Class A Notes
YOUNI ITALY 2024-1: Fitch Alters Outlook on BBsf Rating to Positive
K A Z A K H S T A N
MFO ROBOCASH: Fitch Puts 'B-' LongTerm IDR on Watch Negative
L U X E M B O U R G
CONSTELLATION OIL: Fitch Alters Outlook 'B' IDRs to Positive
N E T H E R L A N D S
CASPER TOPCO: S&P Lowers LongTerm ICR to 'B-', Outlook Stable
R U S S I A
BAKAI BANK: S&P Assigns 'B/B' Issuer Credit Ratings, Outlook Stable
S P A I N
BERING III: S&P Withdraws (P) B- Rating on EUR350MM Secured Bonds
ROVENSA: S&P Assigns 'B-' Rating on New EUR1.03BB Term Loan B
S W E D E N
FLUGO BIDCO: S&P Assigns 'B' LongTerm ICR, Outlook Stable
U N I T E D K I N G D O M
ATLAS FUNDING 2025-2: DBRS Gives Prov. BB Rating on Class E Notes
ATLAS FUNDING 2025-2: Fitch Assigns B+(EXP)sf Rating on Cl. X2 Debt
CD&R AND WSH: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable
DESIGN REALISED: Frost Group Named as Administrators
FYLDE FUNDING 2025-1: DBRS Finalizes BB(low) Rating on X2 Notes
GDC PACKAGING: Leonard Curtis Named as Administrators
GLOBAL ACADEMIC: Moody's Assigns First Time B1 Corp. Family Rating
MERIDIAN FUNDING 2025-1: DBRS Gives (P)BB(high) Rating on 2 Classes
MORTIMER 2025-1: DBRS Assigns Prov. BB(high) Rating on 2 Classes
PINNACLE BIDCO: Moody's Alters Outlook on 'B3' CFR to Positive
RTG REALISATIONS 2025: FRP Advisory Named as Administrators
RTHL REALISATIONS: FRP Advisory Named as Administrators
SUGARDOUGH LIMITED: Quantuma Advisory Named as Administrators
TALKTALK TELECOM: S&P Hikes LT ICR to 'CCC+', Outlook Negative
TOGETHER ASSET 2022-2ND1: S&P Raises Class F Notes Rating to 'BB-'
UNIBLOCK LTD: Opus Restructuring Named as Administrators
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D E N M A R K
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WS AUDIOLOGY: Fitch Assigns 'B' LongTerm IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has assigned WS Audiology A/S (WSA) a Long-Term
Issuer Default Rating (IDR) of 'B' with a Stable Outlook. This
follows a reorganisation of the group structure, under which WSA is
now part of the restricted group and has assumed the debt
previously issued by Auris Luxembourg III S.a.rl.. The new debt
documentation now states WSA as the new borrower of the euro- and
US dollar-denominated facilities and revolving credit facility, and
WSA Audiology US II LLC as a co-borrower under the US dollar
facility.
As a result, Fitch has affirmed the senior secured debt rating at
'B+' with a Recovery Ratings of 'RR3'. Fitch will transfer the
senior secured debt rating to WSA. Fitch will also transfer the
senior secured rating of the US dollar facility to WSA and WSA
Audiology US II LLC.
The new documentation outlines that the previous security will
remain in place and includes WSA as obligor.
Fitch has also affirmed Auris Luxembourg II S.A.'s Long-Term IDR at
'B' and immediately withdrawn it due to the group's
reorganisation.
Key Rating Drivers
For full key rating drivers and sensitivities, see the following
rating action commentary (RAC): Fitch Affirms Auris Luxembourg II
S.A. (WS Audiology) at 'B'; Outlook Stable
Issuer Profile
WSA (formerly Sivantos Group and Widex) is a privately-owned
manufacturer of hearing aids with headquarters in Denmark and
Singapore.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Sector Forecasts Monitor
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
----------- ------ -------- -----
Auris Luxembourg III
S.a.r.l
senior secured LT B+ Affirmed RR3 B+
Auris Luxembourg II S.A. LT IDR B Affirmed B
LT IDR WD Withdrawn
WS Audiology USA II LLC
senior secured LT B+ New Rating RR3
WS Audiology A/S LT IDR B New Rating
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F R A N C E
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LA FINANCIERE: S&P Affirms 'CCC+' ICR & Alters Outlook to Negative
------------------------------------------------------------------
S&P Global Ratings revised its outlook to negative from stable on
La Financiere Atalian SAS. S&P also affirmed its 'CCC+' long-term
issuer credit rating on Atalian and its issue rating on its senior
unsecured debt.
The negative outlook reflects that S&P could lower the rating over
the next 12 months if Atalian's operating performance and cash
flows do not materially improve and liquidity continues to reduce.
La Financiere Atalian SAS' (Atalian's) operating performance was
weaker than expected in the first half of 2025 due to net contract
losses and inflationary pressure. Although we expect operating
performance to gradually improve, we anticipate that these
challenges will persist through the rest of 2025. The company is
also implementing a strategic plan and will incur restructuring
expenses that will weaken its profitability in 2025 before
gradually bearing fruits in 2026 and 2027.
As a result, we expect the Atalian's free operating cash flow
(FOCF) will remain negative at about EUR20 million in 2025, before
turning slightly positive to about EUR3 million in 2026. After
lease payments, we anticipate negative FOCF in both years,
resulting in tightening liquidity.
S&P said, "We lowered our forecast due to continued net contract
losses and inflationary pressures in 2025. In the first half of
2025, Atalian's revenue declined to EUR968.2 million (-3.3% year on
year, and -1.0% on a constant currency basis) mainly because of the
effect from contract losses in 2024 in France and Belgium, the
Netherlands, and Luxembourg (Benelux), despite the company's
commercial efforts and solid organic growth in other geographies.
The reported EBITDA declined to EUR33.5 million (-17.7% year on
year) as the company's indexation and productivity efforts were
offset by lower special works that have higher margins in Benelux,
decline in payroll tax subsidies in the cleaning business in
France, and an investment in the strategic plan to improve the
business. For the full year, we forecast a 2.5% decline in revenue
alongside S&P Global Ratings-adjusted EBITDA of about EUR60
million, down from EUR78.6 million in 2024. We expect positive
revenue growth of about 2.0% in 2026, underpinned by realization of
indexation efforts carried through 2025, and improved service
quality and client retention resulting in net client gains. We
forecast that growth in revenue, lower one-of costs, better pass
through of cost inflation to clients, and operational efficiencies
will drive adjusted EBITDA to improve to about EUR76 million in
2026. However, S&P Global Ratings-adjusted debt to EBITDA will
remain elevated above 20.0x in 2025 and 17.0x in 2026.
"Ongoing cash burn will tighten liquidity. For 2025 and 2026, we
forecast about EUR50 million in interest payments, about EUR8
million-EUR10 million of tax payments and about EUR10 million of
capital expenditure (capex), resulting in negative FOCF of about
EUR20 million in 2025 and mildly positive EUR3 million in 2026.
However, we anticipate FOCF after lease payments will remain
negative EUR53 million in 2025 and negative EUR40 million in 2026.
This will reduce the company's liquidity buffer, although we do not
anticipate any near-term liquidity stress as the company had about
EUR113 million of cash on balance sheet at the end of June 2025.
"The negative outlook reflects that we could lower the rating over
the next 12 months if Atalian's operating performance and cash
flows do not materially improve and liquidity continues to reduce.
"We could lower our ratings if we thought there was an increased
risk of default in the next 12 months. This could occur if the
expected business recovery fails to take hold, leading to continued
significantly negative FOCF and a sharp deterioration in
liquidity.
"We could also downgrade the company if we thought that there was
an increased likelihood of a debt exchange offer, debt
restructuring, or missed any interest payment.
"We could consider revising the outlook to stable if Atalian
outperforms our forecasts and demonstrates a path to sustained
positive FOCF and improving liquidity position."
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G E R M A N Y
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RETAIL AUTOMOTIVE 2021: DBRS Hikes F Notes Rating to BB(high)
-------------------------------------------------------------
DBRS Ratings GmbH took the following credit rating actions on the
notes (the rated notes) issued by Retail Automotive CP Germany 2021
UG (Haftungsbeschrankt) (the Issuer):
-- Class A Notes confirmed at AAA (sf)
-- Class B Notes upgraded to AAA (sf) from AA (high) (sf)
-- Class C Notes upgraded to AA (sf) from AA (low) (sf)
-- Class D Notes upgraded to A (high) (sf) from A (low) (sf)
-- Class E Notes upgraded to A (low) (sf) from BBB (low) (sf)
-- Class F Notes upgraded to BB (high) (sf) from BB (sf)
The credit ratings on the Class A, Class B, and Class C Notes
address the timely payment of scheduled interest and the ultimate
repayment of principal by the legal maturity date. The credit
ratings on the Class D, Class E, and Class F Notes address the
ultimate payment of interest and the ultimate repayment of
principal by the legal maturity date while junior to other
outstanding classes of notes, but the timely payment of interest
when they are the senior-most tranche, in accordance with the
Issuer's default definition in the transaction documents.
CREDIT RATING RATIONALE
The credit rating actions follow an annual review of the
transaction and are based on the following analytical
considerations:
-- Portfolio performance, in terms of delinquencies, defaults, and
losses, as of the September 2025 payment date;
-- Probability of default (PD), loss given default (LGD), and
expected loss assumptions on the remaining receivables; and
-- Current available credit enhancement to the rated notes to
cover the expected losses at their respective credit rating
levels.
The transaction is a securitization backed by a pool of retail auto
loan receivables associated with a portfolio of new and used
vehicle loans granted and serviced by CreditPlus Bank AG
(CreditPlus) to private individual borrowers residing in Germany.
The transaction included a 21-month revolving period, which ended
in July 2023. Since then, the notes have amortized on a pro rata
basis, and will continue to do so until a sequential redemption
event is triggered.
PORTFOLIO PERFORMANCE
As of the September 2025 payment date, loans that were one to two
months and two to three months delinquent represented 0.3% and 0.1%
of the portfolio balance, respectively, while loans more than three
months delinquent represented 0.1%. Gross cumulative defaults
amounted to 1.1% of the aggregate original portfolio balance, up
from 0.8% at last annual review, with cumulative recoveries of
61.8% to date.
PORTFOLIO ASSUMPTIONS AND KEY DRIVERS
Morningstar DBRS conducted a loan-by-loan analysis of the remaining
pool of receivables and updated its base case PD and LGD
assumptions at 1.4% and 39.7%, respectively.
Morningstar DBRS elected mid-range core multiples. The inclusion of
incremental balloon stresses means the Morningstar DBRS-derived
adjusted multiple is higher than the range for the AAA (sf) credit
rating level.
CREDIT ENHANCEMENT
The subordination of the respective junior obligations provides
credit enhancement to the rated notes. As of the September 2025
payment date, credit enhancements to the Class A, Class B, Class C,
Class D, Class E, and Class F Notes remained unchanged since
closing at 10.0%, 6.3%, 5.0%, 4.0%, 3.0%, and 2.0%, respectively.
The credit enhancements will continue to remain stable due to the
pro rata amortization of the notes until a sequential redemption
event is triggered.
The transaction benefits from liquidity support provided by a
liquidity reserve, funded to the required amount of 0.7% of the
outstanding principal amount of the Class A, Class B, and Class C
Notes. The liquidity reserve is available to the Issuer only in a
restricted scenario where the principal collections are not
sufficient to cover the shortfalls in senior costs (servicer fees
and operating expenses), interests on the liquidity reserve itself,
swap payments, and interest on the Class A, Class B, and Class C
Notes. The reserve is currently at its target amount of EUR
2.38mn.
The Bank of New York Mellon - Frankfurt branch (BNYM Frankfurt)
acts as the account bank for the transaction. Based on Morningstar
DBRS' private credit rating on BNYM Frankfurt, the downgrade
provisions outlined in the transaction documents, and other
mitigating factors inherent in the transaction structure,
Morningstar DBRS considers the risk arising from the exposure to
the account bank to be consistent with the credit ratings assigned
to the rated notes, as described in Morningstar DBRS' "Legal and
Derivative Criteria for European Structured Finance Transactions"
methodology.
CreditPlus and Crédit Agricole Consumer Finance (CACF) are the
swap counterparty and swap guarantor, respectively, for this
transaction. Morningstar DBRS' private rating on CACF is consistent
with the first credit rating threshold defined in Morningstar DBRS'
"Legal and Derivative Criteria for European Structured Finance
Transactions" methodology.
Notes: All figures are in euros unless otherwise noted.
REVOCAR 2023-2: DBRS Confirms BB Rating on Class D Notes
--------------------------------------------------------
DBRS Ratings GmbH confirmed its credit ratings on the rated notes
issued by RevoCar 2023-2 UG (haftungsbeschrankt) (the Issuer) as
follows:
-- Class A Notes at AAA (sf)
-- Class B Notes at A (sf)
-- Class C Notes at BBB (sf)
-- Class D Notes at BB (sf)
The credit rating on the Class A Notes addresses the timely payment
of interest and the ultimate payment of principal by the legal
final maturity date in September 2036. The credit ratings on the
Class B, Class C, and Class D Notes address the ultimate payment of
interest (timely when most senior) and principal by the legal final
maturity date.
CREDIT RATING RATIONALE
The confirmations follow an annual review of the transaction and
are based on the following analytical considerations:
-- Portfolio performance, in terms of delinquencies, defaults, and
losses, as of the September 2025 payment date;
-- Updated probability of default (PD), loss given default (LGD),
and expected loss assumptions on the remaining receivables; and
-- Current available credit enhancement to the rated notes to
cover the expected losses at their respective credit rating
levels.
The transaction is a static securitization of German auto loan
receivables originated and serviced by Bank11 für Privatkunden und
Handel GmbH (Bank11) and granted primarily to private clients for
the purchase of both new and used vehicles. The transaction closed
in October 2023 with an initial portfolio balance of EUR 500.0
million.
PORTFOLIO PERFORMANCE
As of the August 2025 cut-off date, loans that were one to two
months and two to three months in arrears represented 0.6% and 0.3%
of the outstanding portfolio balance, respectively, while loans
that were more than three months in arrears represented 1.2%. Gross
cumulative defaults amounted to 0.7% of the aggregate initial
collateral balance, with cumulative recoveries of 30.4% to date.
PORTFOLIO ASSUMPTIONS AND KEY DRIVERS
Morningstar DBRS received updated historical vintage data from the
originator and conducted a loan-by-loan analysis of the remaining
pool of receivables. Morningstar DBRS updated its base case PD and
LGD assumptions to 1.8% and 58.4%, respectively.
CREDIT ENHANCEMENT
The subordination of the respective junior obligations provides
credit enhancement to the rated notes in the transaction.
As of the September 2025 payment date, credit enhancement to the
Class A, Class B, Class C, and Class D Notes slightly increased to
12.6%, 6.1%, 4.3%, and 2.1%, respectively, from 11.8%, 5.2%, 3.4%,
and 1.2%, respectively, as of Morningstar DBRS' initial credit
rating in October 2023. The rated notes amortize on a pro rata
basis and will continue to do so as long as a sequential payment
trigger event is not breached.
The transaction benefits from an amortizing liquidity reserve,
available to cover senior fees and expenses, swap payments, and
interest payments on the Class A Notes only. The reserve has a
target balance equal to 1.2% of the outstanding collateral balance,
subject to a floor of EUR 800,000. As of the September 2025 payment
date, the reserve was at its target balance of EUR 3.4 million.
The transaction also features a commingling reserve, funded by
Bank11 at closing to EUR 5.0 million. The reserve has a target
balance equal to 1.0% of the outstanding collateral balance as long
as the Class D Notes are outstanding. As of the September 2025
payment date, the reserve was at its target balance of EUR 2.8
million.
Citibank Europe plc, German branch acts as the account bank for the
transaction. Based on Morningstar DBRS' Long-Term Issuer Rating on
its ultimate parent, Citibank Europe plc, at AA (low), the
downgrade provisions outlined in the transaction documents, and
structural mitigants inherent in the transaction structure,
Morningstar DBRS considers the risk arising from the exposure to
the account bank to be consistent with the credit ratings assigned
to the notes, as described in Morningstar DBRS' "Legal and
Derivative Criteria for European Structured Finance Transactions"
methodology.
DZ BANK AG Deutsche Zentral-Genossenschaftsbank (DZ Bank) acts as
the swap counterparty. Morningstar DBRS' Long Term Critical
Obligations Rating on DZ Bank at AA is consistent with the First
Rating Threshold as described in Morningstar DBRS' "Legal and
Derivative Criteria for European Structured Finance Transactions"
methodology.
Notes: All figures are in euros unless otherwise noted.
SC GERMANY 2024-2: Fitch Affirms 'BB+sf' Rating on Class E Notes
----------------------------------------------------------------
Fitch Ratings has affirmed SC Germany S.A., Compartment Consumer
2024-2 (SCGC 2024-2).
Entity/Debt Rating Prior
----------- ------ -----
SC Germany S.A.,
Compartment
Consumer 2024-2
A XS2903302201 LT AAAsf Affirmed AAAsf
B XS2903303191 LT AA-sf Affirmed AA-sf
C XS2903303860 LT Asf Affirmed Asf
D XS2903303944 LT BBBsf Affirmed BBBsf
E XS2903304165 LT BB+sf Affirmed BB+sf
F XS2903304322 LT BBBsf Affirmed BBBsf
Transaction Summary
SCGC 2024-2 is a securitisation of unsecured consumer loans
originated by Santander Consumer Bank AG. The six-month revolving
period ended in May 2025. The transaction amortises sequentially
until a pro rata payment trigger occurs, which is when class A
asset-based credit enhancement reaches 23%. Thereafter, the class A
to E notes will pay down pro rata until a performance or another
trigger is breached. The class F notes will be paid sequentially
while also benefiting from a turbo amortisation through excess
spread in the interest priority of payments.
KEY RATING DRIVERS
Stable Asset Performance: The transaction's performance is stable
and broadly in line with its expectations, with slightly higher
than expected cumulative defaults, due to an earlier accumulation
of defaults than Fitch's projections. The overall level of arrears
is on a slight increasing trend. Fitch has applied an unchanged,
remaining-life, base-case default rate and multiple at 'AAA' of
6.5% and 4x, respectively. The recovery base case and haircut are
also unchanged at 15% and 50%, respectively.
Stable, High Excess Spread: SCGC 2024-2's weighted average (WA)
pool yield is around 9%, outweighing aggregate senior costs, net
swap and interest payments and is stable since closing. Performance
since closing shows that the cost/income dynamics result in high
available excess spread, which is beneficial for the transaction.
Structural features like the replacement servicer fee reserve also
support excess spread.
Pro-Rata Length Key to Repayment: In Fitch's cash-flow modelling,
the full repayment of senior notes is dependent on the length of
the pro rata attribution of principal funds. Fitch finds the
three-month rolling average dynamic net loss ratio to be the most
effective trigger to stop the pro rata period in the event of
performance deterioration.
Counterparty Risks Addressed: The deal has a funded liquidity
reserve to bridge payment interruption and reserves for commingling
and set-off risk. The commingling and set-off reserves will be
funded if the seller is downgraded below a rating threshold of
'BBB'. All reserves are adequate to cover their exposures and in
line with its criteria. Rating triggers and remedial actions for
the account bank and swap counterparty are adequately defined and
in line with its criteria.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Asset performance deterioration beyond its expectations in the form
of higher defaults and larger losses due to adverse changes to
macroeconomic conditions, especially rising unemployment in light
of the structural challenges facing the German economy could result
in downgrades. Additionally, prolonged pro rata amortisation, due
to defaults being more back loaded than assumed, might impact the
senior notes' ratings.
Expected impact on the notes' ratings of increased defaults (class
A/B/C/D/E/F):
Increase default rates by 10%:
'AA+sf'/'AA-sf'/'A-sf'/'BBB-sf'/'BB+sf'/'BBB-sf'
Increase default rates by 25%:
'AAsf'/'Asf'/'BBB+sf'/'BBB-sf'/'BBsf'/'BBB-sf'
Increase default rates by 50%:
'A+sf'/'A-sf'/'BBBsf'/'BBsf'/'Bsf'/'BBsf'
Expected impact on the notes' ratings of reduced recoveries (class
A/B/C/D/E/F):
Reduce recovery rates by 10%:
'AAAsf'/'AAsf'/'Asf'/'BBBsf'/'BB+sf'/'BBBsf'
Reduce recovery rates by 25%:
'AA+sf'/'AA-sf'/'Asf'/'BBBsf'/'BB+sf'/'BBBsf'
Reduce recovery rates by 50%:
'AA+sf'/'AA-sf'/'BBB+sf'/'BBB-sf'/'BB+sf'/'BBBsf'
Expected impact on the notes' ratings of increased defaults and
reduced recoveries (class A/B/C/D/E/F):
Increase default rates by 10% and reduce recovery rates by 10%:
'AA+sf'/'AA-sf'/'A-sf'/'BBB-sf'/'BB+sf'/'BBB-sf'
Increase default rates by 25% and reduce recovery rates by 25%:
'AAsf'/'Asf'/'BBB+sf'/'BB+sf'/'BBsf'/'BB+sf'
Increase default rates by 50% and reduce recovery rates by 50%:
'A+sf'/'BBB+sf'/'BB+sf'/'BBsf'/'CCCsf'/'BBsf'
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Better than expected transaction performance, due to improving
borrower affordability with rising wages and falling inflation,
resulting in lower defaults and losses than expected will result in
upgrades.
Expected impact on the notes' ratings of reduced defaults (class
A/B/C/D/E/F):
Reduce default rates by 10%:
'AAAsf'/'AA+sf'/'A+sf'/'BBB+sf'/'BBB-sf'/'BBB+sf'
Reduce default rates by 25%:
'AAAsf'/'AAAsf'/'A+sf'/'Asf'/'BBBsf'/'Asf'
Reduce default rates by 50%:
'AAAsf'/'AAAsf'/'AA+sf'/'AAsf'/'A+sf'/'AA+sf'
Expected impact on the notes' ratings of increased recoveries
(class A/B/C/D/E/F):
Increase recovery rates by 10%:
'AAAsf'/'AAsf'/'Asf'/'BBBsf'/'BB+sf'/'BBBsf'
Increase recovery rates by 25%:
'AAAsf'/'AAsf'/'Asf'/'BBB+sf'/'BBB-sf'/'BBB+sf'
Increase recovery rates by 50%:
'AAAsf'/'AAsf'/'A+sf'/'BBB+sf'/'BBB-sf'/'BBB+sf'
Expected impact on the notes' ratings of reduced defaults and
increased recoveries (class A/B/C/D/E/F):
Reduce default rates by 10% and increase recovery rates by 10%:
'AAAsf'/'AA+sf'/'A+sf'/'BBB+sf'/'BBB-sf'/'BBB+sf'
Reduce default rates by 25% and increase recovery rates by 25%:
'AAAsf'/'AAAsf'/'AAsf'/'Asf'/'BBB+sf'/'Asf'
Reduce default rates by 50% and increase recovery rates by 50%:
'AAAsf'/'AAAsf'/'AA+sf'/'AA+sf'/'AA-sf'/'AA+sf'
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 monitoring.
Prior to the transaction closing, Fitch reviewed the results of a
third-party assessment conducted on the asset portfolio information
and concluded that there were no findings that affected the rating
analysis.
Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for its analysis
according to its applicable rating methodologies indicates that it
is adequately reliable.
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.
TTD HOLDING III: Fitch Alters Outlook on 'B' LongTerm IDR to Neg.
-----------------------------------------------------------------
Fitch Ratings has revised TTD Holding III GmbH's (TTD; also known
as Toi Toi and Dixi) Outlook to Negative from Stable, while
affirming its Long-Term Issuer Default Rating (IDR) at 'B'. Fitch
has also affirmed TTD Holding IV GmbH's EUR1,245 million senior
secured term loans at 'B+' with a 'RR3' Recovery Rating.
The Outlook reflects a continued weak German construction market,
with only modest signs of volume stabilisation in 3Q25, such that
Fitch now expects leverage to be outside the 'B' sensitivities in
2025. The affirmation reflects its expectations of underlying
volume recovery, which combined with enhanced pricing, should
reduce leverage towards 6.5x in 2026 and improve free cash flow
(FCF) with adequate financial flexibility for the 'B' rating. If
achieved, the Outlook could return to Stable.
The IDR is supported by the company's entrenched position in its
home markets, with its strong network density protecting against
new entrants and its expectations of profitability improvements as
route density improves.
Key Rating Drivers
Volume Stabilising, Weaker Pricing: TTD's long term cabin rental
volumes in Germany, a key indicator of underlying performance,
stabilised at about -1.9% year on year in 9M25 and +0.9% year on
year in 3Q25, an improvement from 9M24, where long-term cabin
rentals were down about 11%. However, slower price increases in
2025 compared with 2024 mean revenues will fall by about 3% in
2025, which combined with continued weak route density and
profitability, plus an additional EUR75 million of term loan B
(TLB) signed in 1H25, will increase EBITDA leverage to about 7.2x
end-2025.
Fitch forecasts FCF margins at 1%-2% in 2025 and 2026, supported by
lower capex requirements due to lower long-term cabin rentals, down
from about 3%-4% in 2023 and 2024.
Operating Performance Turnaround in 2026: Fitch expects a rebound
in TTD's revenues of 3%-4% in 2026, following continued volume
stabilisation at 0-2%, supported further by internal sales
measures, enhanced pricing and some bolt-on M&A. FCF margins,
forecast at 3%-4% in 2026-2027, should improve with soft revenue
growth. Volume recovery should be supported by 1.1%-1.2% German GDP
growth in 2026 and 2027, up from 0.3% in 2025, as currently
forecast by Fitch.
Reduced Profitability, Cost Measures: Declining long-term cabin
rental volumes and weaker route-density, combined with wage and
cost growth, affect margins. Fitch forecasts a Fitch-defined EBITDA
margin of about 25% for 2025, below the 28% achieved in 2023. TTD
is managing its cost structure effectively, reducing full-time
employees in administrative roles and overheads and maintaining
tight cost control. Fitch expects profitability to improve, once
volumes and pricing recover, towards 28% in 2027.
Opportunistic M&A to Continue: M&A has been scaled back in 2024 and
1H25. TTD made five bolt-on acquisitions in 1H25, and eight in
2024, compared with 22 in 2023. FCF-funded bolt-on acquisitions
remain a cornerstone of TTD's growth, by building on its scale and
route efficiencies but this should be neutral to the ratings. Fitch
expects opportunistic M&A to continue; however, Fitch assumes a
slightly reduced M&A spend of around EUR15 million of FCF-funded
bolt-on acquisitions in 2025 and another EUR20 million a year
thereafter, supporting revenues and EBITDA. Fitch sees limited
capacity for any material debt-funded M&A or shareholder
distributions at the 'B' IDR.
Sufficient Financial Flexibility: Fitch forecasts EBITDA leverage
at about 7.2x in 2025, before it reduces towards 6.0x in 2027,
while EBITDA interest coverage will remain at 2x-3x through to
2028. TTD has actively amended and extended its EUR1,245 million
aggregate TLB maturities into 2029 and repriced all facilities in
January 2025, supporting financial flexibility. However, any
material operating underperformance in 2026, relative to its latest
forecasts, could result in EBITDA leverage staying above 7.0x,
leading to a negative rating action.
Modest Construction Sector Growth: High construction cost, wage
inflation and high interest rates continue to weigh on the German
construction market, with the biggest impact on residential
building activity. The latter accounts for around 30%-35% of TTD's
net sales. Residential and commercial together represent about 80%
of TTD's construction business and 55% of net sales.
Defensive Route-Based Model: The company's business model is
concentrated on network density, scale and logistics, which protect
its entrenched market position. In Germany, its national market
share is 15 times that of its closest competitor's. TTD can, with
more stops per servicing route, reduce the cost per stop, resulting
in a margin advantage. This creates a major barrier to entry, as it
becomes difficult for a competitor without a comparable presence to
compete effectively in a given area.
Long-standing Brand and Value Proposition: The Toi Toi & Dixi
brands enjoy decades of recognition, which reinforce TTD's
leadership in Germany and numerous other European markets. Its
strength across the value chain also makes it the preferred choice
for customers, given the essential but less competitive nature of
waste management. Aside from premium toilet cabins, TTD also offers
bespoke sanitary containers and ancillary equipment for larger or
longer-term projects, which cannot be provided by regional
companies that compete mainly for smaller projects.
Peer Analysis
Fitch compares TTD with other services peers with strong
competitive positions and high visibility over recurring revenue,
including Node Holdco GmbH (IFCO; B(EXP)/Positive) and Polygon
Group AB (B/Negative), but also ERP-software peer TeamSystem S.p.A
(B/Stable).
IFCO is larger and more diversified than TTD, allowing it a looser
EBITDA leverage sensitivity for the same rating. Polygon and TTD
have similar geographical diversification, but the latter's
construction market is more volatile than the insurance-based
property damage restoration market.
TeamSystem's revenue visibility is stronger than TTD's, but the
latter is more geographically diversified.
Key Assumptions
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Revenue decline of 3.1% in 2025, returning to growth of 3%-5% in
2026-2028
- Fitch-defined EBITDA margin of 25% in 2025, before gradually
rising to 28% in 2027 on improved route density
- Modest working capital outflow at below 1% of sales to 2028
- Capex at EUR55 million-60 million a year in 2025 and 2026, then
increasing with growing production volumes
- Bolt-on M&As of about EUR15 million in 2025, rising to about
EUR20 million a year in 2026-2028, funded by FCF
Recovery Analysis
The recovery analysis assumes that TTD would be considered a going
concern in bankruptcy and that it would be reorganised rather than
liquidated. Fitch has assumed a 10% administrative claim.
The going concern EBITDA of EUR155 million (increased from EUR150
million) reflects a severe economic downturn with could hamper
route density and pricing power. Fitch has used a distressed
enterprise value multiple of 5.5x to calculate a
post-reorganisation valuation. This multiple reflects TTD's
dominant and entrenched market position in its home markets,
stemming from scale and network density, but also its exposure
towards the cyclical construction market.
Fitch deducts administrative claims, local prior-ranking credit
lines, and EUR1,245 million in term loans and an equally ranking
EUR155 million revolving credit facility (RCF) from the liability
waterfall. Fitch assumes that the local lines and the RCF are fully
drawn at default. Based on current metrics and assumptions, the
waterfall analysis generates a ranked recovery in the Recovery
Rating 'RR3' band, indicating a 'B+' instrument rating for the
senior secured TLBs.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A weaker-than-expected recovery in TTD's end-markets or failure
to improve EBITDA margin in line with its expectations
- EBITDA gross leverage above 6.5x on a sustained basis due to
operational underperformance or material debt-funded shareholder
remuneration or acquisitions
- EBITDA interest coverage below 2.0x
- Thin or neutral FCF margins
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Return to volume growth in key markets and successful continued
roll-out of the transformation programme and bolt-on acquisitions
leading to:
- EBITDA gross leverage below 5.0x on a sustained basis
- Improved cash flow metrics with FCF margins in the mid-single
digits
- EBITDA interest coverage above 3.0x
Liquidity and Debt Structure
TTD's liquidity is satisfactory. It had a Fitch-adjusted cash
position of EUR43 million at end-June 2025. Fitch forecasts neutral
to positive FCF in 2025, disregarding a timing mismatch in cash
interest paid across 2024 and 2025, and in 2026, while TTD has
access to an undrawn committed EUR155 million RCF. In its analysis,
Fitch restricts about EUR7 million of cash for working capital
swings.
TTD's aggregate EUR1,245 million TLB matures in September 2029.
Refinancing risk is manageable with extended maturities, improving
FCF and deleveraging towards 6x in 2027, based on Fitch's
forecasts.
Issuer Profile
TTD offers sanitary/toilet cabins, containers and ancillary
products and services to the construction and events industries.
Summary of Financial Adjustments
TTD reports under local GAAP. For global comparability, Fitch
reduces Fitch-defined EBITDA by EUR6 million of Fitch-estimated
finance lease interest and depreciation. Fitch also deducts finance
leases from Fitch-defined debt. This estimate is similar to an 8x
lease multiple, given about EUR48 million of finance lease debt.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Sector Forecasts Monitor
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
----------- ------ -------- -----
TTD Holding III GmbH LT IDR B Affirmed B
TTD Holding IV GmbH
senior secured LT B+ Affirmed RR3 B+
===========
G R E E C E
===========
NAVIOS MARITIME: S&P Rates Up to $300MM Unsecured Notes 'BB'
------------------------------------------------------------
S&P Global Ratings assigned its 'BB' issue-level rating to Navios
Maritime Partners L.P.'s (Navios Partners, BB/Stable/--) proposed
senior unsecured notes of up to $300 million due in 2030. The
recovery rating is '3', indicating its expectation of meaningful
recovery (50%-70%; rounded estimate: 65%) in the event of default.
The recovery rating on the notes is capped at '3', with recovery
prospects of 65%, based on the unsecured nature of the debt.
Navios Partners is a leading shipping company that owns and
operates a fleet of 175 vessels, including 67 dry bulk carriers, 51
containerships, and 57 crude oil and product tankers. It plans to
use proceeds from the notes to refinance part of its secured
floating rate debt. With that, 41 vessels will become unencumbered.
The issue-level and recovery ratings on the proposed notes are
based on preliminary information and subject to their successful
issuance and S&P's satisfactory review of the final documentation.
S&P said, "Supported by solid first-half results and a largely
contracted revenue base for second-half 2025 (ended Dec. 31, 2025),
we think that Navios Partners is on course to meet our 2025 EBITDA
forecast of $770 million-$780 million (compared with $777 million
in 2024). Underpinned by its existing favorable charter agreements
and full-year earnings contribution from six new ships to be
delivered in 2025, and 10 new ships in 2026, the company's adjusted
EBITDA is set to surge further to $850 million-$900 million in
2026. Given its sustained and robust EBITDA-to-cash flow
conversion, we forecast that Navios Partners' operating cash flow
will largely counterbalance the ongoing high capital expenditure
for new ships, which we forecast at $500 million-$550 million in
2025, and $600 million in 2026, and in 2027 when 24 ships (of 26
ships on order) are scheduled to be delivered--compared with $1.0
billion in 2024. This means that adjusted debt, which amounted to
$2.09 billion as of Dec. 31, 2024, might stay largely flat (or
slightly lower) over the 2025-2027 investment period. Boosted by
increasing EBITDA however, we forecast Navios Partners' adjusted
funds from operations to debt will improve and remain at 35%-40% in
2026-2027 from 29% in 2024 and about 31% we expect in 2025. This is
well in line with our rating threshold of at least 25%.
"Our rating on Navios Partners' is further supported by the
diversification of its fleet with exposure to three distinct
shipping segments (dry bulk, container, and oil and oil products)
and across 16 ship classes which helps it to partly mitigate
volatility in any individual segment and adds some stability to
earnings."
Issue Ratings--Recovery Analysis
Key analytical factors
-- S&P's issue rating on Navios Partners' proposed senior
unsecured notes is 'BB'. The '3' recovery rating indicates its
expectation of meaningful recovery (50%-70%; rounded estimate: 65%)
in the event of default. The recovery rating reflects the benefits
from the estimated residual, at-default value of the group's assets
after satisfying the prior-ranking and secured creditors ahead of
the unsecured claims.
-- S&P's '3' recovery rating is supported by a relatively large
pool of unencumbered assets in relation to the existing first-lien
debt. Due to the unsecured nature of the proposed debt instrument,
under its criteria, S&P caps the recovery rating at '3', regardless
of the recovery percentage.
-- S&P said, "In our default scenario, we assume a deterioration
of trading conditions in all Navios Partners' shipping sectors amid
weak general economic prospects, with end customers going into
restructuring or default. We anticipate a significant contraction
of global trade, coinciding with the delivery of new vessels
leading to a severe industry oversupply, which we expect to depress
charter rates and vessel values. We consider that this would impair
Navios Partners' cash flow generation and constrain its ability to
refinance bullet debt, leading to a payment default in or before
2030."
-- S&P said, "We value the company as a going concern, since we
consider that the business would retain more value as an operating
entity and would rather reorganize in a bankruptcy scenario. The
group's scale and size, and exposure to three distinct shipping
segments underpin this view. Individual ships, however, could be
readily sold to other operators to generate liquidity, so we use a
discrete asset valuation to evaluate the recovery prospects
associated with the underlying assets. We adjust those asset values
by applying a dilution rate to take into account the assumed loss
of value through additional depreciation in the period leading up
to the hypothetical default and an expected realization rate in
distressed circumstances."
Simulated default assumptions
-- Year of default: 2030
-- Jurisdiction: U.S.
Simplified waterfall
-- Gross enterprise value at default: About $1,980 million
-- Net enterprise value available to debtors after administrative
costs (10%): $1,782 million
-- Secured debt claims: About $1,081 million[1]
-- Value available to the unsecured notes: $701 million
-- Unsecured debt claims: About $310 million[1]
--Recovery rating: 3
-- Recovery expectation: 50%-70% (rounded estimate 65%)[2]
[1] All debt amounts include six months' prepetition interest.
[2] Rounded down to the nearest 5%.
=============
I R E L A N D
=============
CIFC EUROPEAN II: S&P Assigns B-(sf) Rating on Class F-R Notes
--------------------------------------------------------------
S&P Global Ratings assigned preliminary credit ratings to CIFC
European Funding CLO II DAC's class X-R, A-R, B-R, C-R, D-R, E-R,
and F-R notes. At closing, the issuer will have unrated
subordinated notes outstanding from the existing transaction.
This transaction is a reset of the already existing transaction
that closed in April 2020, that S&P did not rate. The issuance
proceeds of the refinancing debt will be used to redeem the
refinanced debt, and pay fees and expenses incurred in connection
with the reset.
Under the transaction documents, the rated notes will pay quarterly
interest, unless a frequency switch event occurs. Following such an
event, the notes would permanently switch to semiannual payments.
The portfolio's reinvestment period ends 4.46 years after closing;
the non-call period ends 1.5 years after closing.
The preliminary ratings assigned to the reset notes reflect our
assessment of:
-- The diversified collateral pool, which primarily comprises
broadly syndicated speculative-grade senior secured term loans and
bonds that are governed by collateral quality tests.
-- The credit enhancement provided through the subordination of
cash flows, excess spread, and overcollateralization.
-- The experience of the collateral manager's team, which can
affect the performance of the rated notes through collateral
selection, ongoing portfolio management, and trading.
-- The transaction's legal structure, which S&P expects to be
bankruptcy remote.
-- The transaction's counterparty risks, which S&P expects to be
in line with our counterparty rating framework.
Portfolio benchmarks
S&P Global Ratings' weighted-average rating factor 2,900.86
Default rate dispersion 557.73
Weighted-average life (years) 3.56
Weighted-average life extended to cover
the length of the reinvestment period (years) 4.46
Obligor diversity measure 163.33
Industry diversity measure 20.58
Regional diversity measure 1.27
Transaction key metrics
Portfolio weighted-average rating
derived from S&P's CDO evaluator B
'CCC' category rated assets (%) 3.31
Target 'AAA' weighted-average recovery (%) 37.09
Target floating-rate assets (%) 95.47
Target weighted-average coupon (%) 3.75
Target weighted-average spread (net of floors; %) 3.78
S&P said, "We understand that the portfolio will be
well-diversified at closing. Therefore, we have conducted our
credit and cash flow analysis by applying our criteria for
corporate cash flow CDOs.
"In our cash flow analysis, we used the 400 million target par
amount, the targeted weighted-average spread (3.78%), and the
targeted weighted-average coupon (3.75%), as indicated by the
collateral manager. We assumed the targeted weighted-average
recovery rates at all rating levels. We applied various cash flow
stress scenarios, using four different default patterns, in
conjunction with different interest rate stress scenarios, for each
liability rating category.
"Our credit and cash flow analysis shows that the class B-R to
class F-R notes benefit from break-even default rate and scenario
default rate cushions that we would typically consider to be in
line with higher ratings than those assigned. However, as the CLO
is still in its reinvestment phase, during which the transaction's
credit risk profile could deteriorate, we have capped our
preliminary ratings on the notes. The class A-R and F-R notes can
withstand stresses commensurate with the assigned preliminary
ratings."
Until April 15, 2030, when the reinvestment period ends, the
collateral manager may substitute the assets in the portfolio, as
long the CDO Monitor test is maintained or improved in relation to
the initial ratings on the notes. This test looks at the total
amount of losses that the transaction can sustain, as established
by the initial cash flows for each rating, and compares that with
the current portfolio's default potential, plus par losses to date.
As a result, until the end of the reinvestment period, the
collateral manager may, through trading, cause the transaction's
credit risk profile to deteriorate.
S&P said, "Under our structured finance sovereign risk criteria, we
consider that the transaction's exposure to country risk is
sufficiently mitigated at the assigned preliminary ratings.
"At closing, we expect that the transaction's documented
counterparty replacement and remedy mechanisms will adequately
mitigate its exposure to counterparty risk under our current
counterparty criteria.
"We expect the transaction's legal structure and framework to be
bankruptcy remote, in line with our legal criteria.
"Following our analysis of the credit, cash flow, counterparty,
operational, and legal risks, we believe our preliminary ratings
are commensurate with the available credit enhancement for the
class A-R to F-R notes.
"In addition to our standard analysis, to indicate how rising
pressures among speculative-grade corporates could affect our
ratings on European CLO transactions, we also assessed the
sensitivity of our ratings on the class A-R to E-R notes, based on
four hypothetical scenarios.
"As our ratings analysis includes additional considerations to be
incorporated before we would assign ratings in the 'CCC'
category--and we would assign a 'B-' rating if the criteria for
assigning a 'CCC' category rating are not met--we have not included
the above scenario analysis results for the class F-R notes."
Environmental, social, and governance
S&P said, "We regard the exposure to environmental, social, and
governance (ESG) credit factors in the transaction as being broadly
in line with our benchmark for the sector. Primarily due to the
diversity of the assets within CLOs, the exposure to environmental
credit factors is viewed as below average, social credit factors
are below average, and governance credit factors are average. For
this transaction, the documents prohibit assets from being related
to certain industries. Accordingly, since the exclusion of assets
from these industries does not result in material differences
between the transaction and our ESG benchmark for the sector, no
specific adjustments have been made in our rating analysis to
account for any ESG-related risks or opportunities."
Preliminary ratings
Prelim. Prelim. amount Credit Indicative
Class rating* (mil. EUR) enhancement (%) interest rate§
X-R AAA (sf) 2.20 N/A Three /six-month EURIBOR
plus 0.88%
A-R AAA (sf) 248.00 38.00 Three /six-month EURIBOR
plus 1.30%
B-R AA (sf) 44.00 27.00 Three/six-month EURIBOR
plus 1.85%
C-R A (sf) 22.00 21.50 Three/six-month EURIBOR
plus 2.10%
D-R BBB- (sf) 28.00 14.50 Three/six-month EURIBOR
plus 3.00%
E-R BB- (sf) 20.00 9.50 Three/six-month EURIBOR
plus 5.85%
F-R B- (sf) 12.00 6.50 Three/six-month EURIBOR
plus 8.64%
Sub. NR 37.70 N/A N/A
*The preliminary ratings assigned to the class X-R, A-R, and B-R
notes address timely interest and ultimate principal payments. The
preliminary ratings assigned to the class C-R, D-R, E-R, and F-R
notes address ultimate interest and principal payments. §Solely
for modeling purposes as the actual spreads may vary at pricing.
The payment frequency permanently switches to semiannual and the
index switches to six-month EURIBOR when a frequency switch event
occurs.
EURIBOR – Euro Interbank Offered Rate.
NR--Not rated.
N/A--Not applicable.
Sub.--Subordinated.
CROSS OCEAN VII: S&P Assigns B-(sf) Rating on Class F-R-R Notes
---------------------------------------------------------------
S&P Global Ratings assigned credit ratings to Cross Ocean
Bosphorous VII DAC's class X, A-R-R, B-R-R, C-R-R, D-R-R, E-R-R,
and F-R-R European cash flow CLO notes. At closing, the issuer had
unrated subordinated notes outstanding from the existing
transaction and issued additional subordinated notes.
This transaction is a reset of the already existing transaction,
that S&P did not rate. The existing classes of notes were
refinanced with the proceeds from the issuance of the replacement
notes on the reset date.
The reinvestment period will be approximately 4.5 years, while the
noncall period will be 1.5 years after closing.
Under the transaction documents, the rated notes will pay quarterly
interest unless there is a frequency switch event. Following this,
the notes will switch to semi-annual payment.
The ratings assigned reflect S&P's assessment of:
-- The diversified collateral pool, which primarily comprises
broadly syndicated speculative-grade senior secured term loans and
bonds that are governed by collateral quality tests.
-- The credit enhancement provided through the subordination of
cash flows, excess spread, and overcollateralization.
-- The collateral manager's experienced team, which can affect the
performance of the rated notes through collateral selection,
ongoing portfolio management, and trading.
-- The transaction's legal structure, which is bankruptcy remote.
-- The transaction's counterparty risks, which is in line with
S&P's counterparty rating framework.
Portfolio benchmarks
S&P Global Ratings' weighted-average rating factor 2,814.86
Default rate dispersion 531.61
Weighted-average life (years) 4.53
Obligor diversity measure 135.84
Industry diversity measure 25.14
Regional diversity measure 1.19
Transaction key metrics
Portfolio weighted-average rating
derived from S&P's CDO evaluator B
'CCC' category rated assets (%) 2.00
Target 'AAA' weighted-average recovery (%) 36.92
Target weighted-average spread (net of floors; %) 4.03
Target weighted-average coupon 5.11
Rating rationale
S&P said, "Our ratings reflect our assessment of the collateral
portfolio's credit quality, which has a weighted-average rating of
'B'. The portfolio is well diversified, primarily comprising
broadly syndicated speculative-grade senior secured term loans and
bonds. Therefore, we conducted our credit and cash flow analysis by
applying our criteria for corporate cash flow CDOs.
"In our cash flow analysis, we used the EUR500 million target par
amount, the target weighted-average spread (4.03%), the target
weighted-average coupon (5.11%), the target weighted-average
recovery rate. We applied various cash flow stress scenarios, using
four different default patterns, in conjunction with different
interest rate stress scenarios for each liability rating category.
"Until the end of the reinvestment period in April 2030, the
collateral manager may substitute assets in the portfolio for so
long as our CDO Monitor test is maintained or improved in relation
to the initial ratings on the notes. This test looks at the total
amount of losses that the transaction can sustain as established by
the initial cash flows for each rating, and it compares that with
the current portfolio's default potential plus par losses to date.
"Under our structured finance sovereign risk criteria, the
transaction's exposure to country risk is sufficiently mitigated at
the assigned ratings.
"The transaction's documented counterparty replacement and remedy
mechanisms adequately mitigate its exposure to counterparty risk
under our current counterparty criteria.
"The transaction's legal structure and framework is bankruptcy
remote, in line with our legal criteria.
"Following our analysis of the credit, cash flow, counterparty,
operational, and legal risks, we believe our ratings are
commensurate with the available credit enhancement for the class
A-R-R to F-R-R notes.
"Our credit and cash flow analysis indicates that the available
credit enhancement for the class B-R-R to F-R-R notes could
withstand stresses commensurate with higher ratings than those we
have assigned. However, as the CLO is still in its reinvestment
phase, during which the transaction's credit risk profile could
deteriorate, we have capped our ratings assigned to these notes.
"In addition to our standard analysis, to provide an indication of
how rising pressures among speculative-grade corporates could
affect our ratings on European CLO transactions, we have also
included the sensitivity of the ratings on the class X to E-R-R
notes based on four hypothetical scenarios.
"As our ratings analysis makes additional considerations before
assigning ratings in the 'CCC' category, and we would assign a 'B-'
rating if the criteria for assigning a 'CCC' category rating are
not met, we have not included the above scenario analysis results
for the class F-R-R notes."
Environmental, social, and governance
S&P said, "We regard the exposure to environmental, social, and
governance (ESG) credit factors in the transaction as being broadly
in line with our benchmark for the sector. Primarily due to the
diversity of the assets within CLOs, the exposure to environmental
credit factors is viewed as below average, social credit factors
are below average, and governance credit factors are average. For
this transaction, the documents prohibit or limit assets from being
related to certain industries. Since the exclusion of assets from
these industries does not result in material differences between
the transaction and our ESG benchmark for the sector, no specific
adjustments have been made in our rating analysis to account for
any ESG-related risks or opportunities."
Ratings
Amount Credit
Class Rating* (mil. EUR) enhancement (%) Interest rate§
X AAA (sf) 6.50 N/A Three/six-month EURIBOR
plus 0.85%
A-R-R AAA (sf) 310.00 38.00 Three/six-month EURIBOR
plus 1.35%
B-R-R AA (sf) 55.00 27.00 Three/six-month EURIBOR
plus 1.90%
C-R-R A (sf) 30.00 21.00 Three/six-month EURIBOR
plus 2.40%
D-R-R BBB- (sf) 35.00 14.00 Three/six-month EURIBOR
plus 3.30%
E-R-R BB- (sf) 22.50 9.50 Three/six-month EURIBOR
plus 5.90%
F-R-R B- (sf) 15.00 6.50 Three/six-month EURIBOR
plus 8.64%
Sub. Notes NR 44.25 N/A N/A
*The ratings assigned to the class X, A-R-R, and B-R-R notes
address timely interest and ultimate principal payments. The
ratings assigned to the class C-R-R, D-R-R, E-R-R, and F-R-R notes
address ultimate interest and principal payments.
§The payment frequency switches to semiannual and the index
switches to six-month EURIBOR when a frequency switch event occurs.
EURIBOR--Euro Interbank Offered Rate.
NR--Not rated.
N/A--Not applicable.
=========
I T A L Y
=========
ARAGORN NPL 2018: DBRS Keeps CCC Rating on Class A Notes
--------------------------------------------------------
DBRS Ratings GmbH maintained the Under Review with Negative
Implications status on the Class A and Class B notes issued by
Aragorn NPL 2018 S.r.l. (the Issuer). The credit ratings on the
Class A and Class B notes are CCC (sf) and CC (sf), respectively.
The transaction represents the issuance of Class A, Class B, and
Class J notes (collectively, the Notes) backed by a mixed pool of
Italian nonperforming secured and unsecured loans originated by
Credito Valtellinese SpA and Credito Siciliano S.p.A. The credit
rating assigned to the Class A notes addresses the timely payment
of interest and the ultimate repayment of principal. The credit
rating assigned to the Class B notes addresses the ultimate payment
of both interest and principal. Morningstar DBRS does not rate the
Class J notes.
The loan pool's gross book value (GBV) was approximately EUR 1.7
billion as of the 31 December 2017 cut-off date. The nonperforming
loan portfolio consists of secured commercial and residential
loans, representing 82.0% of the total GBV, and unsecured loans,
representing 18.0% of the total GBV. The borrowers are mostly
Italian small and medium-size enterprises, representing 90.2% of
the total GBV. Of the total GBV, 68% is concentrated in 364
borrowers, out of a total of 4,161 borrowers. The top 50 borrowers
made up 26.8% of the pool GBV at the cut-off date.
The receivables are now serviced by Fire S.p.A. (the Special
Servicer); each of the previous special servicers (Special Gardant
S.p.A. and Cerved Credit Management S.p.A.) were replaced in July
2024. doNext S.p.A. acts as the master servicer whilst Cerved
Master Services S.p.A. operates as the backup servicer.
CREDIT RATING RATIONALE
The credit rating actions follow Morningstar DBRS' review of the
transaction and are based on the following analytical
considerations:
-- Transaction performance: An assessment of portfolio recoveries
as of June 2025 focusing on (1) a comparison between actual
collections and the initial business plan forecast, (2) the
collection performance observed over recent months, and (3) a
comparison between the current performance and Morningstar DBRS'
expectations.
-- Portfolio characteristics: Loan pool composition as of June
2025 and the evolution of its core features since issuance.
-- Transaction liquidating structure: The order of priority, which
entails a fully sequential amortization of the Notes (i.e., the
Class B notes will begin to amortize following the full repayment
of the Class A notes, and the Class J notes will amortize following
the repayment of the Class B notes). Additionally, interest
payments on the Class B notes become subordinated to principal
payments on the Class A notes if the cumulative collection ratio
(CCR) or present value cumulative profitability ratio (PV CPR) is
lower than 100% prior to and including July 31, 2019, or lower than
90% from January 31, 2020 onwards. The CCR trigger was breached on
the first interest payment date (IPD) and subsequently cured in
January 2020, but it has been breached again since the July 2020
IPD. The actual figures for the CCR and PV CPR were 62.9% and
100.7% as of the July 2025 IPD, respectively, according to the
Special Servicer.
-- Liquidity support: The transaction benefits from an amortizing
cash reserve providing liquidity to the structure and covering
potential interest shortfall on the Class A notes and senior fees.
The cash reserve target amount is equal to 5.0% of the Class A
notes' principal outstanding balance and the recovery expense cash
reserve target amounts to EUR 250,000, both fully funded.
TRANSACTION AND PERFORMANCE
According to the latest investor report from July 2025, the
outstanding principal amounts on the Class A, Class B, and Class J
notes were EUR 246.9 million, EUR 66.8 million, and EUR 10.0
million, respectively. As of July 2025, the balance on the Class A
notes had amortized by 51.5% since issuance and the current
aggregated transaction balance was EUR 323.8 million.
As of June 2025, the transaction was underperforming the initial
business plan expectations. The actual cumulative gross collections
equaled EUR 389.2 million whereas the initial business plan
estimated cumulative gross collections of EUR 622.6 million for the
same period. Therefore, as of June 2025, the transaction was
underperforming by EUR 233.4 million (-37.5%) compared with the
initial business plan expectations.
At issuance, Morningstar DBRS estimated cumulative gross
collections for the same period of EUR 499.1 million at the BBB
(low) (sf) stressed scenario and EUR 608.6 million at the CCC (sf)
scenario. Therefore, as of June 2025, the transaction was
performing below Morningstar DBRS' initial stressed expectations in
the BBB (low) (sf) scenario and the CCC (sf) scenario.
Pursuant to the requirements set out in the master amendment
agreement signed on May 28, 2024, the Special Servicer is required
to provide an updated business plan on a yearly basis, starting in
2025, upon approval by the Committee of the Noteholders. An updated
portfolio business plan for the current year has not been delivered
to Morningstar DBRS, as it has not received approval yet.
Considering the deterioration in the transaction's performance as
of June 2025 and the lower-than-expected amortization speed, a
decrease in future cash flow projections could cause Morningstar
DBRS to downgrade the credit ratings on the Class A notes and Class
B notes.
The final maturity date of the transaction is in July 2038.
Notes: All figures are in euros unless otherwise noted.
YOUNI ITALY 2024-1: Fitch Alters Outlook on BBsf Rating to Positive
-------------------------------------------------------------------
Fitch Ratings has upgraded 72 Italian structured finance (SF)
tranches and revised the Outlook for another 44 tranches to
Positive from Stable following its recent upgrade of Italy's
sovereign ratings.
Entity/Debt Rating Prior
----------- ------ -----
Florence SPV S.r.l.
Class A IT0005424723 LT AA+sf Upgrade AAsf
Asset-Backed European
Securitisation
Transaction Twenty-Five
S.r.l. (A-Best 25)
A IT0005621880 LT AA+sf Upgrade AAsf
B IT0005621898 LT A+sf Affirmed A+sf
C IT0005621906 LT A-sf Affirmed A-sf
Fulvia SPV S.r.l.
A1 IT0005657553 LT AA+sf Upgrade AAsf
A2 IT0005657785 LT AA+sf Upgrade AAsf
B IT0005657793 LT AA-sf Affirmed AA-sf
C IT0005657801 LT A-sf Affirmed A-sf
D IT0005657819 LT BBBsf Affirmed BBBsf
Sunrise SPV 93 S.r.l.
- Series 2021-2
Class B notes IT0005460339 LT AA+sf Upgrade AAsf
Class C notes IT0005460354 LT AA+sf Upgrade AAsf
Class D notes IT0005460362 LT AA+sf Upgrade AAsf
Class E notes IT0005460370 LT A+sf Affirmed A+sf
Golden Bar (Securitisation)
S.r.l. - Series 2023-2
Class A notes IT0005561276 LT AA+sf Upgrade AAsf
Class B notes IT0005561284 LT Asf Affirmed Asf
Class C notes IT0005561292 LT BBBsf Affirmed BBBsf
Alba 15 SPV S.r.l.
Class A IT0005647810 LT AA+sf Upgrade AAsf
Class B IT0005647828 LT AA-sf Affirmed AA-sf
Autoflorence 3 S.r.l.
Class A notes IT0005545709 LT AA+sf Upgrade AAsf
Marzio Finance S.r.l. –
Series 13-2023
Class A IT0005572075 LT AA+sf Upgrade AAsf
Youni Italy 2025-1 S.r.l.
Class A IT0005641060 LT AA+sf Upgrade AAsf
Class B IT0005641078 LT A-sf Affirmed A-sf
Class C IT0005641086 LT BBB-sf Affirmed BBB-sf
Siena Mortgages 07-5 S.P.A
Class A IT0004304223 LT AA+sf Upgrade AAsf
Class B IT0004304231 LT AA+sf Upgrade AAsf
Coppedè SPV S.r.l.
Class A IT0005516247 LT AA+sf Upgrade AAsf
Crediper Consumer S.r.l.
Class A IT0005353831 LT AA+sf Upgrade AAsf
Siena PMI 2016 S.r.l. –
Series 2
D IT0005372989 LT AA+sf Upgrade AAsf
Asset-Backed European
Securitisation
Transaction Twenty-Four
S.r.l. (A-Best 24)
A IT0005607079 LT AA+sf Upgrade AAsf
Pontormo RMBS S.r.l.
A2-2017 IT0005315228 LT AA+sf Upgrade AAsf
A2-2019 IT0005391245 LT AA+sf Upgrade AAsf
Asset-Backed European
Securitisation
Transaction Twenty-Two
S.r.l. (A-Best 22)
A IT0005567802 LT AA+sf Upgrade AAsf
B IT0005567810 LT AA+sf Upgrade AAsf
C IT0005567828 LT A+sf Affirmed A+sf
D IT0005567836 LT A-sf Affirmed A-sf
E IT0005567844 LT BBB+sf Affirmed BBB+sf
Sunrise SPV 50 S.r.l. –
Series 2023-2
Class A1 notes IT0005559833 LT AA+sf Upgrade AAsf
Class A2 notes IT0005559841 LT AA+sf Upgrade AAsf
Class B notes IT0005559858 LT AA+sf Upgrade AAsf
Class C notes IT0005559866 LT A+sf Affirmed A+sf
Class E notes IT0005559890 LT BBB+sf Affirmed BBB+sf
Golden Bar (Securitisation)
S.r.l. - Series 2025-1
A1 IT0005652158 LT AA+sf Upgrade AAsf
A2 IT0005652166 LT AA+sf Upgrade AAsf
C IT0005652182 LT A-sf Affirmed A-sf
Brignole CO 2024 S.r.l.
Class A IT0005598351 LT AA+sf Upgrade AAsf
Koromo Italy S.r.l.
Class A notes IT0005532939 LT AA+sf Upgrade AAsf
Sunrise SPV 20 S.r.l. –
Series 2022-2
Class A IT0005508038 LT AA+sf Upgrade AAsf
Class B IT0005508046 LT AA+sf Upgrade AAsf
Class C IT0005508053 LT AA+sf Upgrade AAsf
Class D IT0005508061 LT AA-sf Affirmed AA-sf
Sunrise SPV 95 S.r.l. –
Series 2024-1
A1 IT0005585895 LT AA+sf Upgrade AAsf
A2 IT0005585903 LT AA+sf Upgrade AAsf
B IT0005585911 LT A+sf Affirmed A+sf
C IT0005585929 LT A-sf Affirmed A-sf
E IT0005585945 LT BBBsf Affirmed BBBsf
Sunrise SPV 92 S.r.l. –
Series 2021-1
Class B IT0005440117 LT AA+sf Upgrade AAsf
Class C IT0005440125 LT AA+sf Upgrade AAsf
Class D IT0005440133 LT AA+sf Upgrade AAsf
Class E IT0005440141 LT AA+sf Upgrade AAsf
Red & Black Auto Italy S.r.l.
Class A notes IT0005609570 LT AA+sf Upgrade AAsf
Class B notes IT0005609588 LT AA+sf Upgrade AAsf
Class C notes IT0005609596 LT Asf Affirmed Asf
Class D notes IT0005609604 LT BBBsf Affirmed BBBsf
Auto ABS Italian Stella Loans
S.r.l. (Series 2023-1)
Class A notes IT0005565798 LT AA+sf Upgrade AAsf
Class C notes IT0005565814 LT BBB+sf Affirmed BBB+sf
Golden Bar (Securitisation)
S.r.l. - Series 2024-1
Class A IT0005611378 LT AA+sf Upgrade AAsf
Class B IT0005611386 LT AA-sf Affirmed AA-sf
Sunrise SPV 94 S.r.l. –
Series 2022-1
Class A notes IT0005490765 LT AA+sf Upgrade AAsf
Class B notes IT0005490773 LT AA+sf Upgrade AAsf
Class C notes IT0005490781 LT AA+sf Upgrade AAsf
Class D notes IT0005490799 LT AA+sf Upgrade AAsf
Class E notes IT0005490807 LT AA-sf Affirmed AA-sf
Sunrise SPV Z70 S.r.l. –
Series 2024-2
A1 IT0005609638 LT AA+sf Upgrade AAsf
A2 IT0005609646 LT AA+sf Upgrade AAsf
C IT0005609661 LT BBB+sf Affirmed BBB+sf
D IT0005609679 LT BBBsf Affirmed BBBsf
Auto ABS Italian Stella Loans
S.r.l. (Series 2025-1)
A1 IT0005650467 LT AA+sf Upgrade AAsf
A2 IT0005650475 LT AA+sf Upgrade AAsf
B IT0005650483 LT AA+sf Upgrade AAsf
Auto ABS Italian Stella Loans
S.r.l. (Series 2024-2)
Class A Notes IT0005619694 LT AA+sf Upgrade AAsf
Class B Notes IT0005619710 LT AA+sf Upgrade AAsf
Class C Notes IT0005619819 LT A+sf Affirmed A+sf
Class D Notes IT0005619827 LT BBB+sf Affirmed BBB+sf
Brignole CQ 2024 S.r.l.
Class A IT0005612319 LT AA+sf Upgrade AAsf
Class B IT0005612327 LT Asf Affirmed Asf
Class D IT0005612343 LT BBB-sf Affirmed BBB-sf
Sunrise SPV 96 S.r.l. –
Series 2025-1
Class A1 IT0005638025 LT AA+sf Upgrade AAsf
Class A2 IT0005638033 LT AA+sf Upgrade AAsf
Class B IT0005638041 LT A+sf Affirmed A+sf
Class D IT0005638066 LT BBBsf Affirmed BBBsf
Autoflorence 2 S.r.l.
Class A IT0005456949 LT AA+sf Upgrade AAsf
Class B IT0005456956 LT A+sf Affirmed A+sf
Koromo Italy S.r.l. - 2025-1
Class A-2025-1 Asset
Backed Floating Rate Notes
IT0005630741 LT AA+sf Upgrade AAsf
Auto ABS Italian Stella Loans
S.r.l. (Series 2024-1)
Class A Notes IT0005597452 LT AA+sf Upgrade AAsf
Class B Notes IT0005597460 LT AA+sf Upgrade AAsf
Class C Notes IT0005597478 LT Asf Affirmed Asf
Class D Notes IT0005597486 LT BBB+sf Affirmed BBB+sf
Sunrise SPV 40 S.r.l. –
Series 2023-1
Class A IT0005538985 LT AA+sf Upgrade AAsf
Class B IT0005538993 LT AA+sf Upgrade AAsf
Class C IT0005539009 LT A+sf Affirmed A+sf
Class D IT0005539017 LT A-sf Affirmed A-sf
Class E IT0005539025 LT BBB+sf Affirmed BBB+sf
Golden Bar (Securitisation)
S.r.l. - Series 2021-1
Class A IT0005459224 LT AA+sf Upgrade AAsf
Class B IT0005459232 LT AA+sf Upgrade AAsf
Leone Arancio RMBS S.r.l.
Class A1 IT0005559478 LT AA+sf Upgrade AAsf
Class A2 IT0005559486 LT AA+sf Upgrade AAsf
Red & Black Auto Italy S.r.l.
- Compartment 2
Class A1 IT0005560252 LT AA+sf Upgrade AAsf
Class C IT0005560286 LT A-sf Affirmed A-sf
Class E IT0005560302 LT BB+sf Affirmed BB+sf
Valsabbina RMBS SPV S.r.l.
Class A1 IT0005521353 LT AA+sf Upgrade AAsf
Class A2 IT0005521361 LT AA+sf Upgrade AAsf
Youni Italy 2024-1 S.r.l.
A IT0005593352 LT AA+sf Upgrade AAsf
C IT0005593378 LT BBB-sf Affirmed BBB-sf
D IT0005593386 LT BBsf Affirmed BBsf
Sunrise SPV Z90 S.r.l. –
Series 2020-1
Class A IT0005412546 LT AA+sf Upgrade AAsf
Class B IT0005412553 LT AA+sf Upgrade AAsf
KEY RATING DRIVERS
'AA+sf' Maximum Achievable Rating: The upgrades on 72 tranches
follow Fitch's recent upgrade of Italy's Long-Term Foreign- and
Local-Currency Issuer Default Rating (IDR) to 'BBB+' from 'BBB',
with Stable Outlook (see 'Fitch Upgrades Italy to 'BBB+'; Outlook
Stable' dated 19 September 2025). Fitch maintains a six-notch
differential between the sovereign IDRs and the highest achievable
SF ratings. Therefore, the Italian sovereign upgrade implies a
maximum achievable rating for SF transactions in Italy of
'AA+sf'/Stable.
The Positive Outlook on 44 mezzanine and junior tranches reflect a
potential upgrade by at least one notch due to the recalibration of
its assumptions for intermediate rating levels (from 'Bsf' to
'AAsf') following the new maximum achievable SF rating, under
Fitch's Structured Finance and Covered Bonds Country Risk Rating
Criteria. Fitch will assess the rating impact for these notes at
the relevant review dates, considering the transaction performance,
reliance on excess spread, sensitivity to pro-rata length and
whether counterparty provisions are compatible with higher
ratings.
Updated Asset Assumptions: Following the recent upgrade of the
Italian sovereign rating, Fitch has recalibrated default multiples
and recovery rate haircuts due to the higher cap for Italian SF
transactions to 'AA+sf', as further described in Fitch's Structured
Finance and Covered Bonds Country Risk Rating Criteria.,
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
A downgrade of the Italian sovereign Long-Term IDRs could decrease
the maximum achievable rating for Italian SF transactions.
Deterioration in asset performance beyond Fitch's expectations
could also trigger negative rating action on the notes.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
An upgrade of the Italian sovereign Long-Term IDRs could increase
the maximum achievable rating for Italian SF transactions.
Increases in credit enhancement ratios e as the transactions
deleverage to fully compensate the credit losses and cash-flow
stresses that are commensurate with higher ratings, all else being
equal, would also lead to upgrades.
CRITERIA VARIATION
Leone Arancio RMBS S.r.l.
Fitch has decreased the foreclosure frequency adjustment for
broker-originated loans to 1.2x from 1.5x under its European RMBS
Rating Criteria. The variation is substantiated by (i) the loans
having outperformed the wider Italian residential mortgage market
in arrears and defaults; and (ii) the role of brokers in
identifying potential customers, based on ING Italy guidelines and
policies, and in collection of documentations needed for ING
Italy's underwriting.
Based on the Fitch-stressed portfolio, the variation has had no
impact on the class A notes.
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
Alba 15 SPV S.r.l., Asset-Backed European Securitisation
Transaction Twenty-Five S.r.l., Asset-Backed European
Securitisation Transaction Twenty-Four S.r.l., Asset-Backed
European Securitisation Transaction Twenty-Two S.r.l., Auto ABS
Italian Stella Loans S.r.l. (Series 2023-1), Auto ABS Italian
Stella Loans S.r.l. (Series 2024-1), Auto ABS Italian Stella Loans
S.r.l. (Series 2024-2), Auto ABS Italian Stella Loans S.r.l.
(Series 2025-1), Autoflorence 2 S.r.l., Autoflorence 3 S.r.l.,
Brignole CO 2024 S.r.l., Brignole CQ 2024 S.r.l., Coppedè SPV
S.r.l., Crediper Consumer S.r.l., Florence SPV S.r.l., Fulvia SPV
S.r.l., Golden Bar (Securitisation) S.r.l. - Series 2021-1, Golden
Bar (Securitisation) S.r.l. - Series 2023-2, Golden Bar
(Securitisation) S.r.l. - Series 2024-1, Golden Bar
(Securitisation) S.r.l. - Series 2025-1, Koromo Italy S.r.l.,
Koromo Italy S.r.l. - 2025-1, Leone Arancio RMBS S.r.l., Marzio
Finance S.r.l. - Series 13-2023, Pontormo RMBS S.r.l., Red & Black
Auto Italy S.r.l., Red & Black Auto Italy S.r.l. - Compartment 2,
Siena Mortgages 07-5 S.P.A, Siena PMI 2016 S.r.l. - Series 2,
Sunrise SPV 20 S.r.l. - Series 2022-2, Sunrise SPV 40 S.r.l. -
Series 2023-1, Sunrise SPV 50 S.r.l. - Series 2023-2, Sunrise SPV
92 S.r.l. - Series 2021-1, Sunrise SPV 93 S.r.l. - Series 2021-2,
Sunrise SPV 94 S.r.l. - Series 2022-1, Sunrise SPV 95 S.r.l. -
Series 2024-1, Sunrise SPV 96 S.r.l. - Series 2025-1, Sunrise SPV
Z70 S.r.l. - Series 2024-2, Sunrise SPV Z90 S.r.l. - Series 2020-1,
Valsabbina RMBS SPV S.r.l., Youni Italy 2024-1 S.r.l., Youni Italy
2025-1 S.r.l.
Fitch has not conducted any checks on the consistency and
plausibility of the information it has received about the
performance of the asset pools and the transactions. 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.
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.
===================
K A Z A K H S T A N
===================
MFO ROBOCASH: Fitch Puts 'B-' LongTerm IDR on Watch Negative
------------------------------------------------------------
Fitch Ratings has placed LLP MFO Robocash.kz 'B-' Long-Term Issuer
Default Rating (IDR) on Rating Watch Negative (RWN). Fitch has also
placed Robocash's 'B' Short-Term IDR and 'B+(kaz)' National
Long-Term Rating on RWN.
The rating actions follow the decision of Kazakhstan's regulators
to temporarily withhold Robocash's licence for microfinance
activity for two months.
Key Rating Drivers
Regulatory Scrutiny Pressures Business: The RWN reflects negative
implications on Robocash's credit profile from the local
regulator's decision to temporarily withhold the company's licence,
especially if it is not restored by the end of the November.
Robocash is prohibited from granting new loans but is allowed to
service its existing loan portfolio, which partly offsets the
negative effect of the licence suspension on its business and
revenue generation.
Fitch does not expect the suspension to greatly impair Robocash's
franchise, unless prolonged, which would have a material negative
impact on the company's credit profile and would threaten its
viability.
Management informed us that the Agency of the Republic of
Kazakhstan for Regulation and Development of Financial Market
decided to temporarily suspend Robocash's licence due to
deficiencies in underwriting standards related to loans granted to
already highly indebted borrowers, which breached regulatory
policies.
Near-Term Liquidity Risks Manageable: The impact of the suspension
to be manageable at Robocash's rating level due to its short tenor
and highly cash-generative business model as well as its low
leverage. At end-1H25, the company had available liquidity of
KZT4.6 billion, amounting to 1.5x of its third-party liabilities.
Scheduled debt repayments in 4Q25 and 1H26 were a manageable KZT650
million, and the suspension of new loans will further support its
short-term cash accumulation. As a result, with no material
dividend upstream or cash extraction by other means, Robocash's
liquidity position is adequate.
Regulatory Tightening Threatens Profitability: Robocash's
profitability has historically been strong, but it had to change
its revenue structure following regulatory tightening of the
lending rate caps in mid-2024. Agency fees, relating to insurance
contacts, were 73% of revenue in 1H25, largely replacing interest
income. Fitch expects that another tightening, introduced by the
regulator in September 2025 capping fee yield will further affect
the company's profitability.
ESG - Customer Welfare and Governance: Robocash's ratings are
constrained by legal and governance risks stemming from the licence
suspension, as well as heightened scrutiny in the payday lending
sector. Interest rate caps were revised in 2024 to protect
customers and improve transparency, putting more pressure on the
company's business profile.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Robocash's ratings will likely be downgraded if the suspension of
its licence is prolonged beyond early December 2025, as it would
likely impair the franchise and weaken the company's liquidity
profile. A revoking of the licence could result in a multi-notch
downgrade, depending on the probable wind-down.
Robocash's ratings are likely to be downgraded if, upon restoration
of the licence, the company fails to maintain its franchise and the
viability of its business model, for example, due to the inability
to remain structurally profitable as a result of regulatory lending
caps or other regulatory constraints.
Any signs of liquidity shortage or a material increase in leverage
due to third-party borrowing, cash upstream or compromising capital
quality, for example, through bulky investments in assets with
unclear valuation (including to related parties), would also result
in a downgrade.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Proven viability of the business model following the expected
reinstatement of its licence in early December would result in
Fitch removing the ratings from RWN and affirming the Long-Term IDR
at 'B-'. Big uncertainty over Robocash's ability to preserve
adequate profitability over the Outlook horizon may result in
affirming the ratings with a Negative Outlook.
Rating upside is limited over the medium term; however, sustained
diversification into lower-risk, conventional financial products,
while maintaining healthy profitability and limited leverage
coupled with strengthening of corporate governance could support
positive rating action over the long term.
ADJUSTMENTS
The business profile score of 'b-' is below the 'bb' category
implied score due to the following adjustment reason: business
model (negative).
The earnings and profitability score of 'b' is below the 'bbb'
category implied score due to the following adjustment reason:
portfolio risk (negative).
The capitalisation and leverage score of 'b' is below the 'bbb'
category implied score due to the following adjustment reason: risk
profile and business model (negative).
The funding, liquidity and coverage score of 'b-' is below the 'bb'
category implied score due to the following adjustment reason:
business model or funding market convention (negative).
ESG Considerations
LLP MFO Robocash.kz has an ESG Relevance Score of '5' for Customer
Welfare - Fair Messaging, Privacy and Data Security due to material
risks stemming from regulatory pressure on payday lenders in
Kazakhstan, which has a negative impact on the credit profile, and
is highly relevant to the rating, resulting in a lower rating
outcome.
Fitch revised LLP MFO Robocash.kz's ESG Relevance Score for
Governance Structure to '5', from '4', to reflect business and
legal risks stemming from the suspension of the microfinance
license as well as rudimentary governance standards. This has a
negative impact on the credit profile, and is highly relevant to
the ratings, resulting in a lower rating outcome.
LLP MFO Robocash.kz has an ESG Relevance Score of '4' for Exposure
to Social Impacts to reflect a business model focused on extending
credit at high rates, which could give rise to potential consumer
and market disapproval, as well as attract regulatory changes. This
has a negative impact on the credit profile, and is relevant to the
ratings in conjunction with other factors.
LLP MFO Robocash.kz has an ESG Relevance Score of '4' for Group
Structure due to contagion risks, stemming from operational
integration with the wider group. 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 Prior
----------- ------ -----
LLP MFO Robocash.kz LT IDR B- Rating Watch On B-
ST IDR B Rating Watch On B
LC LT IDR B- Rating Watch On B-
LC ST IDR B Rating Watch On B
Natl LT B+(kaz) Rating Watch On B+(kaz)
===================
L U X E M B O U R G
===================
CONSTELLATION OIL: Fitch Alters Outlook 'B' IDRs to Positive
------------------------------------------------------------
Fitch Ratings has affirmed Constellation Oil Services Holding
S.A.'s (Constellation) Issuer Default Ratings (IDRs) at 'B'. Fitch
has also affirmed Constellation's 2029 senior secured notes at 'B'
with a Recovery Rating of 'RR4'. The Rating Outlook has been
revised to Positive from Stable.
The Positive Outlook reflects Constellation's ongoing progress in
ramping up new contracts at higher day rates, supporting earlier
deleveraging and a shift to positive FCF in 2025, at the same time
uncertainties are looming in the global oil market. The ratings
also capture Constellation's limited business scale within the
highly competitive, capital-intensive offshore drilling services
segment and its exposure to contract renewals.
Fitch's analysis incorporates elevated concentration risk given the
company's significant revenue reliance on Petroleo Brasileiro S.A.
(Petrobras; BB/Stable). Offsetting factors include robust demand
for Constellation's services, an adequate backlog of approximately
USD2 billion, high barriers to entry, and a longstanding
relationship with its main client.
Key Rating Drivers
Limited Global Scale: Constellation's fleet and operating footprint
are at the lower end relative to leading global peers with larger
fleets and broader service portfolios, increasing exposure to
heightened competitive intensity. Nonetheless, Constellation is
Brazil's largest drilling rig operator, with about 23% market share
and 45 years of operating history, focused on mid-, deep-, and
ultra-deepwater basins. For context, Fitch typically positions
oilfield service companies with roughly USD500 million in revenue
and USD250 million in EBITDA in the 'B' category, while those with
approximately double that scale are more consistent with the 'BB'
category.
Client and Geographic Concentration: Constellation is fully
concentrated in Brazil and 80% in Petrobras, which makes the credit
more vulnerable to potential changes in the local market and the
client's dominant position. These risks are mitigated by longer
contract tenors averaging 900 to 1,000 days versus a 300 to 400-day
global average, which smooths pricing and supports downcycle
resilience, albeit with a lag to rising day rates. Constellation's
geographic concentration in Brazil is mitigated by its longstanding
tenure and highly efficient operations within a booming market.
Exposure to Petrobras's Capex: Constellation's contract structures
are capital expenditure (capex) based rather than operational
expenditures (opex) based. This results in greater exposure to
short-term commodity fluctuations compared to those dependent on
client production — i.e., linked to the lifting costs. Fitch
views this risk as mitigated by resilient contract clauses,
including higher day rates and lower competition due to high
barriers to entry.
Moderate Re-Contracting Risk: Oil service providers face
re-contracting risks that vary ultimately based on commodity price
fluctuations. This risk is moderate due to the scarcity of vessels,
which is reflected in rising day rates. Out of the USD2 billion in
contracts secured in June 2025, Constellation expects to consume
USD350 million in 2H25, USD776 million in 2026, and USD496 million
in 2027, and USD331 million in 2028-2029. Fitch estimates effective
utilization to reach 83% in 2025, up to 87% in 2026 due to contract
mobilizations. Day rates are projected to average USD252,000 in
2025 and USD315,000 in 2026, based on the latest bids and signed
contracts.
Positive FCF: Fitch expects Constellation to generate positive FCF
over the next three years, improving its profitability. EBITDA is
forecast at about USD190 million in 2025, still weighed by legacy
day rates and mobilization downtime, rising to roughly USD380
million in 2026 on higher utilization and repriced contracts.
EBITDA is projected to convert into CFO of about USD180 million in
2025 and USD310 million in 2026. Average annual capex is estimated
at around USD130 million over the period, creating capacity for
dividend initiation from 2026.
Adequate Leverage: Fitch projects net leverage of 2.4x in 2025,
declining to below 1.0x by 2027, which should enhance balance sheet
flexibility over the medium term. Leverage has materially improved
from 4.9x in 2023, driven by EBITDA ramp-up, debt-to-equity
conversion, and a private placement. As of the 12 months ended
prior to June 2025, Fitch measured net leverage at 2.2x.
Peer Analysis
Constellation's ratings are a notch below Seadrill Limited
(B+/Stable) and Valaris Limited (B+/Stable). Seadrill benefits from
a low leverage, a strong liquidity profile and leading position in
ultra-deepwater services, as well as its strong contract coverage.
Meanwhile Valaris' ratings reflect the company's continued
execution on favorable, long-term contracts, a growing backlog,
positive FCF, a sub-2.0x leverage profile and strong liquidity.
Constellation's credit profile is stronger than that of Oceanica
Engenharia e Consultoria S.A. (B-/Rating Watch Negative) and Nabors
Industries, Ltd. (B-/Negative). Oceanica re-tapped the market and
eased short-term liquidity pressures, but it still needs more
consistent uptime to improve credit metrics. Nabors' rating is
pressured by the Parker Wellbore acquisition and softening U.S.
drilling conditions since early 2024, requiring partial refinancing
of upcoming maturities through the capital markets.
Key Assumptions
- Brent oil price of USD70 per barrel (bbl) in 2025, USD65/bbl in
2026 and 2027, and USD60/bbl thereafter;
- Number of vessels: seven owned and two third-party agreements in
2025 and 2026;
- Average utilization rate of 92% in 2025 and 92% in 2026;
- Average efficiency rate of 91% in 2025 and 93% in 2026;
- Average day rates of USD252,000 in 2025 and USD315,000 in 2026;
- Average annual capex of USD130 million in 2025 and 2026;
- Dividend payments as of 2026.
Recovery Analysis
The recovery analysis assumes Constellation would be reorganized as
a going concern (GC) in bankruptcy rather than liquidated. Fitch
assumes a 10% administrative claim.
GC Approach
Constellation's GC EBITDA estimate reflects Fitch's view of a
sustainable, post-reorganization EBITDA level upon which Fitch
bases the enterprise value.
The GC EBITDA assumption of USD200 million represents a point
between a distress-level EBITDA observed in 2022 and a more
midcycle level EBITDA. Fitch's stress case assumes Brent oil prices
are USD60/bbl in 2024, USD35/bbl in 2025, USD45/bbl in 2026 and
USD48/bbl for the long term. These prices could lead to a marked
difference in the company's cash flow generation given the impact a
period of prolonged oil prices could have on day rates and rig
utilization.
The GC EBITDA assumption reflects a loss of contracts and lower
margins than the near-term forecast as exploration and production
companies cut costs. An enterprise value multiple of 5.5x EBITDA is
applied to the GC EBITDA to calculate a post-reorganization
enterprise value.
The choice of this multiple considered the following factors:
- The historical bankruptcy case study exit multiples for peer
energy oilfield service companies have a wide range with a median
of 6.1x;
- The oil field service subsector ranges from 2.2x to 42.5x due to
the more volatile nature of EBITDA swings in a downturn;
Liquidation Approach
The liquidation estimate reflects Fitch's view of the value of
balance sheet assets that can be realized through sale or
liquidation processes during a bankruptcy or insolvency proceeding
and distributed to creditors. Fitch assigns standard discounts to
the liquidation value of the company's cash, accounts receivable,
inventory and net property, plant and equipment (PP&E). Despite the
material write-down on the company's PP&E, Fitch is still using a
20% liquidation value for the company's June 2025 book value given
the high uncertainty of assets valuations during a downturn.
The allocation of value in the liability waterfall results in a
recovery corresponding to 'RR1' for the senior secured notes of
USD650 million. However, given that the assets are concentrated in
Brazil (Group D, as per Fitch's criteria), the recovery is capped
at RR4.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Midcycle net leverage greater than 4.0x on a recurring basis;
- EBITDA margins below 25% on a recurring basis;
- EBITDA interest coverage below 3.0x;
- Perception of failure in renewing contracts and/or material
reduction in day rates;
- Inability to refinance upcoming maturities;
- Negative FCF generation.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Midcycle net leverage below 3.0x on a recurring basis;
- EBITDA margins above 35% sustainably;
- Maintenance of adequate liquidity.
Liquidity and Debt Structure
Fitch expects Constellation to maintain a strong liquidity position
over the next three years after the successful bond issuance in
September 2024. As of October 2026, the company will face annual
amortizations of USD75 million, followed by a balloon payment of
USD425 million in October 2029. This indicates that the cash
position of USD204 million, registered in June 2025, was enough to
cover debt maturities over the next three to four years. Total debt
of USD650 million, considering net derivatives, was comprised
exclusively of the 2029 senior secured notes.
Issuer Profile
Constellation is the largest provider of offshore drilling rigs
services in Brazil with seven of its own offshore rigs and two
managed third-party rigs, all of which are floaters. The company
mainly works for Petrobras.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Sector Forecasts Monitor
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
Constellation Oil Services Holding S.A. has an ESG Relevance Score
of '4' for Waste & Hazardous Materials Management; Ecological
Impacts due to the risk that a possible offshore oil spill may
affect the drilling company, which 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
----------- ------ -------- -----
Constellation Oil
Services Holding S.A. LT IDR B Affirmed B
LC LT IDR B Affirmed B
senior secured LT B Affirmed RR4 B
=====================
N E T H E R L A N D S
=====================
CASPER TOPCO: S&P Lowers LongTerm ICR to 'B-', Outlook Stable
-------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Casper Topco, B&B Hotels' parent company, to 'B-' from 'B'. S&P
also lowered its issue rating on the group's EUR1.65 billion
first-lien term loan B (TLB) to 'B-' from 'B'.
The stable outlook reflects S&P's view that B&B Hotels will
continue capitalizing on its sound business position and
expansionary strategy, maintaining an adequate liquidity position
over the next 12 months despite the current challenges in its key
markets and the delayed ramp up of recent openings.
B&B Hotels' operating performance was weaker than expected in the
first eight months of 2025, owing to challenging market conditions
and a delayed ramp-up of 2024 openings. The group reported revenue
of EUR1.01 billion compared with the EUR1.09 billion previously
projected by management. Company-reported EBITDA stood at EUR176
million versus the EUR203 million expected. The underperformance
primarily reflected lower-than-expected occupancy rates in key
markets, particularly France and Germany. Occupancy in France was
1% below budget, though unchanged year on year, despite the uplift
in 2024 from the Olympic Games. Similarly, Germany's occupancy was
4% below budget and down 4% compared with 2024, when the group
benefited from the UEFA Euro 2024 championship. This was driven by
soft macroeconomic trends and persisting weakness in the economy
and budget segments, where the group operates exclusively. The
group also faced a delayed ramp-up of its 125 hotel openings in
2024, due to the time required to perform the renovation and
implement the management mandate model.
Additionally, while the group previously raised prices to offset
inflationary pressure on costs, softer demand in the industry has
now limited its ability to increase prices further. As a result,
average daily rates over the first eight months of 2025 were 3%
below budget and 1% lower than 2024. That said, S&P notes that B&B
Hotels continues to demonstrate stronger pricing power than most of
its peers.
S&P said, "While we expect market softness to continue, we have
revised down our base-case assumptions and now expect that
full-year revenue in 2025 will increase by about 9.4%, versus 18.3%
in our previous forecast (following the dividend recapitalization
in October 2024), to EUR1.55 billion. We expect 2026 revenue to
grow by 11% on the back of the continued ramp-up of new hotels
opened in 2024 and some recovery in sector demand.
"We believe that the delayed ramp-up of new hotels and pricing
limitations will constrain margin improvement, despite management's
mitigation measures and continued focus on cost control. Therefore,
we now forecast S&P Global Ratings-adjusted EBITDA of about EUR610
million compared with the EUR700 million expected previously. This
translates into an S&P Global Ratings-adjusted EBITDA margin of
39.3% compared with 38.3% in 2024.
"We now expect S&P Global Ratings-adjusted debt to EBITDA to remain
elevated for longer. The group has a highly leveraged balance
sheet, and we estimate that about EUR4.1 billion of S&P Global
Ratings-adjusted debt will be outstanding by year-end 2025. This
comprises EUR2.5 billion of lease liabilities and about EUR1.65
billion of financial debt, following the EUR549 million dividend
recapitalization in October in 2024 that left the group with
limited financial flexibility to allow for underperformance. As a
result, we now forecast S&P Global Ratings-adjusted leverage will
reach about 6.8x in 2025 compared with 6.2x in our previous
expectations (from October 2024), before decreasing toward 6.5x in
2026, versus 5.5x previously expected. Therefore, we believe that
the credit metrics will exceed the rating threshold for longer.
"We expect B&B's FOCF after leases deficit will persist over
2025-2026. The group has revised its new openings target for 2025
from 100 hotels to 50-60, reflecting a more cautious expansion plan
considering current market conditions. Nevertheless, total capital
expenditure (capex) remains elevated at about EUR210 million in
2025, including about EUR75 million for the finalization and
renovation of 2024 hotel openings. Additionally, the group has a
highly leveraged capital structure, resulting in a cash interest
burden of about EUR110 million per year. This, coupled with limited
improvement in profitability, will result in a material decline in
FOCF after lease payments to about negative EUR85 million in 2025
and negative EUR55 million in 2026, compared with negative EUR81
million in 2024 (including EUR42 million of hotels acquisitions
under a share deal). This is a deviation from our previous
expectation that the company would be able to finance growth
investment with cash flow generation.
"That said, we expect the group's liquidity will remain adequate
over the next 12 months. As of Aug. 31, 2025, the group had EUR64
million of cash on the balance sheet and EUR210 million available
under its EUR235 million revolving credit facility (RCF) maturing
in September 2030 (since EUR25 million was drawn and should be
fully repaid by the end of the year). While current liquidity
provides a sufficient buffer to cover short-term needs, we believe
continued operating underperformance and cash outflows could weaken
B&B Hotels' liquidity position in the medium term.
"The stable outlook reflects our view that B&B Hotels will continue
capitalizing on its strong business position and expansionary
strategy, maintaining adequate liquidity position over the next 12
months, despite the challenges in its key markets and the delayed
ramp-up of recent openings. In our base case, we now forecast FOCF
after leases of negative EUR85 million in 2025 and leverage to
increase toward 6.8x."
S&P could lower the ratings over the next 12 months if:
-- FOCF after leases remains negative for a prolonged period,
weakening the group's liquidity position and putting additional
strain on its capital structure. This could occur, for example, as
a result of weaker operating performance than expected; or
-- Adjusted leverage increases to levels that in S&P's view would
make the group vulnerable to adverse macroeconomic conditions or
make the capital structure unsustainable.
S&P could raise the ratings if the group improves its operating
performance, such that:
-- S&P Global Ratings-adjusted debt to EBITDA decreases and
remains comfortably below 6.5x as a result of an improved earnings
base.
-- Consistently positive and growing FOCF after leases supports
ample liquidity headroom.
===========
R U S S I A
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BAKAI BANK: S&P Assigns 'B/B' Issuer Credit Ratings, Outlook Stable
-------------------------------------------------------------------
S&P Global Ratings assigned its 'B' long-term and 'B' short-term
issuer credit ratings to Kyrgyzstan-based Bakai Bank OJSC. The
outlook is stable.
The stable outlook on Bakai Bank reflects S&P's view that the bank
will maintain stable asset quality indicators, as well as
sufficient liquidity and capital buffers over the next 12-18
months.
Bakai Bank is one of the largest privately owned banks in
Kyrgyzstan. With assets of Kyrgyzstani som (KGS) 107.3 billion
(about $1.23 billion) under local generally accepted accounting
principles (GAAP) as of Aug. 31, 2025, Bakai Bank ranks fourth
among Kyrgyzstani banks, with market share of about 9.2% in loans
and 11.4% in deposits. The bank's business is reasonably
diversified between local corporates, small and midsize enterprises
(SMEs), and retail customers. While the share of corporate loans
has declined to about 25% over 2024 from about 45% at year-end 2023
on the back of strong expansion in other segments, the bank aims to
focus more on corporate clients, offering product bundles for SMEs
and fast, tailored solutions to larger entities.
The bank's profitability has been boosted by new opportunities
since the start of the Russia-Ukraine war in 2022. Bakai Bank had
adequate profitability before 2022, with a return on average assets
(ROAA) of 1.45%. However, like many of its regional peers, the bank
has benefited from the development of the regional financial
landscape since 2022, and its profitability has increased
significantly, with ROAA peaking at 14% in 2022, and stabilizing at
about 5% in 2023-2024. Much of this increase was driven by currency
conversion income--first because of access to banknotes that were
in high demand and later because of the redirection of client flows
to Bakai Bank. These revenues accounted for about 80% of Bakai
Bank's operational revenue over 2022-2024, one of the highest
levels among rated banks in emerging markets. These revenues can be
volatile and vulnerable to changes in settlement patterns in the
region. In addition, this business requires significant investment
in compliance and anti-money laundering controls.
S&P said, "Bakai Bank is adequately capitalized, in our view. This
reflects our projections that the risk-adjusted capital (RAC) ratio
will decline to 7.3%-7.8% over the next 12-18 months from 8.4% at
year-end 2024 because of rapid loan growth and declining
profitability. We expect the bank will continue to rapidly expand
its loan book, with growth rates over 50% in 2025, gradually
declining to 30% by 2027. We also expect profitability to decline
gradually over the forecast period as a result of significant
investments in digital services. We understand that Bakai Bank will
retain profits, and we therefore do not incorporate any dividends
in our projections.
"We expect asset quality indicators to remain stable, although they
are yet to be tested in a less supportive environment. We believe
that the bank's rapid loan growth represents a risk factor, given
the changing structure of exposures, particularly in the SME
segment. It also somewhat masks the bank's credit quality; its
non-performing assets ratio (Stage 3 loans plus repossessed
collateral) improved in 2024 to 7.5% from 10.4% in 2023. We expect
this ratio to be further diluted in the near term, bottoming out at
about 5%-6% over 2026-2027 before gradually increasing from 2027
due to a slowdown in credit growth and slower economic growth.
"We note Bakai Bank has a higher-than-average share of deposits
from nonresidents, which negatively affects our view of the bank's
funding profile. Nonresidents from countries that are not members
of the Organization for Economic Cooperation and Development (OECD)
comprised about 40% of the deposit base at year-end 2024, compared
with about 9% for the sector as whole. Overall, the majority of
customer deposits (63% at year-end 2024) are on call or very short
term. This share of nonresident deposits somewhat inflates the
bank's strong stable funding ratio, which was 189% at year-end
2024. While nonresident deposits can be volatile, Bakai Bank has
been prudent in managing its liquidity, maintaining sufficient
reserves to cover outflows. The bank's liquid assets--mostly
placements with nonresident banks and the National Bank of the
Kyrgyz Republic (NBKR)--covered about 70%-80% of short-term
customer deposits at year-end 2024, which we view as credit
positive.
"The stable outlook on Bakai Bank reflects our view that the bank
will maintain stable asset quality indicators, sufficient
liquidity, and capital buffers to maintain its creditworthiness
over the next 12-18 months.
"We could lower the ratings on Bakai Bank if its rapid credit
growth led to a sharp deterioration in asset quality. We could also
take a negative rating action if nonfinancial risks unexpectedly
materialized, for example if the bank faced material sanctions or
regulatory intervention, which is not our base-case assumption. A
more aggressive approach to liquidity management, particularly with
respect to nonresident deposits, may also result in a negative
rating action.
"While a positive rating action appears remote over the next 12-18
months, it could materialize if the bank's earnings mix improves
sufficiently, with reduced reliance on currency conversion
operations while it further strengthens its domestic franchise.
Alternatively, we may raise the rating if loan book growth
moderates and we believe the portfolio has matured sufficiently."
=========
S P A I N
=========
BERING III: S&P Withdraws (P) B- Rating on EUR350MM Secured Bonds
-----------------------------------------------------------------
S&P Global Ratings withdrew its preliminary 'B-' issue-level and
'3' recovery ratings on Bering III's (Iberconsa) proposed EUR350
million senior secured bond. This follows Iberconsa's announcement
that it had cancelled the bond issuance due to unfavorable market
conditions, and that it would look for alternative funding in the
coming months.
S&P said, "Our 'B-' issuer credit rating and stable outlook on
Iberconsa and our 'B-' issue rating on its term loan B (TLB) are
unaffected. The '3' recovery rating on the TLB is also unaffected
and continues to indicate our expectation of meaningful recovery
(50%-70%; rounded estimate: 55%) in the event of a payment
default.
"We understand the cancellation of the debt offering was an
opportunistic decision, driven by unsatisfactory market conditions.
The proposed transaction was intended to refinance Iberconsa's
existing debt and extend maturities. Iberconsa's EUR279 million TLB
and EUR30 million balance under its revolving credit facility
mature in May and December 2027. We continue to believe the company
will have adequate liquidity over the next 12 months and we expect
it will refinance its capital structure by mid-2026. If this
doesn't happen, for example due to continued volatility in the
capital markets, our view of Iberconsa's liquidity could
deteriorate, potentially leading us to lower the rating."
ROVENSA: S&P Assigns 'B-' Rating on New EUR1.03BB Term Loan B
-------------------------------------------------------------
S&P Global Ratings assigned its 'B-' issue rating to Rovensa's
proposed EUR1.03 billion term loan B (TLB) due September 2030. The
TLB is issued by Rovensa's holding company, Root Bidco S.a.r.l., to
refinance the existing term loans of EUR520 million and EUR508
million, both due 2027.
After the transaction, the capital structure will mostly include
the senior secured TLB and a senior secured revolving credit
facility (RCF) of up to EUR165 million, which was drawn for EUR73
million as of end-June 2025. The group also has about EUR18 million
of operating-lease liabilities and EUR32 million of other debt
related to existing local facilities.
S&P said, "While we view the refinancing as leverage neutral, the
transaction extends the company's maturity profile of both the TLB
and the RCF by three years. We project that Rovensa's adjusted
gross debt to EBITDA will stand at an elevated 8.0x-9.0x for fiscal
2025 (ended June 30, 2025), down from 11.5x in fiscal 2024, before
improving to 7.0x-8.0x in fiscal 2026 driven by higher EBITDA
driven by ongoing cost control and modest market recovery. Our
leverage calculations factor in about EUR145 million-EUR155 million
of S&P Global Ratings-adjusted EBITDA projected for fiscal 2025 and
EUR160 million-EUR170 million for 2026. We forecast negative free
operating cash flow (FOCF) of EUR20 million-EUR30 million in fiscal
2025, primarily on adverse foreign exchange (FX) movements, but
project a gradual return to positive FOCF from 2026.
"Negative FOCF and EBITDA that is slightly below our previous
expectations have materially reduced the available rating headroom
and financial flexibility. Nevertheless, we consider favorably the
recovering conditions in the agrochemical markets, which we expect
will boost Rovensa's performance during 2026. Furthermore, we
positively acknowledge the company's strategic initiatives centered
on deleveraging, returning to positive FOCF, and maintaining
adequate liquidity."
Issue Ratings--Recovery Analysis
Key analytical factors
-- S&P has updated its recovery analysis in the context of the
company's proposed amendment and extension of its credit
facilities.
-- S&P rates Rovensa's proposed EUR1,028 million senior secured
TLB due September 2030 'B-', with a '3' recovery rating, reflecting
its expectations of meaningful recovery (50%-70%; rounded estimate:
55%) in the event of a default.
-- The TLB and the RCF of EUR165 million (not rated), for which
the maturity is being extended to March 29, 2030, rank pari passu
and are guaranteed by domestic and foreign subsidiaries based in
Spain, Portugal, France, and Brazil.
-- In S&P's hypothetical default scenario, it assumes increased
competition among suppliers of agrochemicals, coupled with a
significant drop in end-market demand for specialty crop nutrition
and protection, which would result in substantially weaker
performance.
-- S&P values Rovensa as a going concern, given its leading
position in key markets and diversified product offering.
Simulated default assumptions
-- Year of default: 2027
-- Jurisdiction: Spain/Portugal
Simplified waterfall
-- Emergence EBITDA: EUR160 million
-- Multiple: 5.5x
-- Gross recovery value: EUR881 million
-- Net recovery value for waterfall after 5% administrative
expense: EUR837 million
-- Priority claims: EUR109 million
-- Senior secured debt claims: EUR1.27 billion
--Recovery expectations: 50%-70% (rounded estimate: 55%)
--Recovery rating: 3
All debt amounts include six months of prepetition interest and 85%
assumed draw on the RCF.
===========
S W E D E N
===========
FLUGO BIDCO: S&P Assigns 'B' LongTerm ICR, Outlook Stable
---------------------------------------------------------
S&P Global Ratings assigned its 'B' long-term issuer credit rating
to Swedish online travel agency (OTA) Flugo Bidco AB (Etraveli) and
its 'B' issue-level rating to its EUR965 million term loan B (TLB),
with a '3' recovery rating (55% recovery prospects).
S&P said, "The stable outlook reflects our expectation that
Etraveli's orders and revenue will grow 15%-18% in 2025-2026, on
the back of the partnership with Booking.com and resilient travel
demand. We also expect its EBITDA margin to stabilize at 19%-20%
and FOCF after leases to remain structurally positive."
Etraveli operates in the highly fragmented and competitive flight
OTA market. The group mainly operates through its three brands,
Mytrip, Gotogate, and Flight Network, and through its platform
partnership agreement with Booking.com. The flight OTA market,
apart from being inherently sensitive to the different
macroeconomic cycles, is characterized by intense competition among
players and high fragmentation, especially in Europe, where
Etraveli generates about two thirds of its revenue. Furthermore,
the flight segment of OTAs generally offers lower margins vis a vis
nonflight segments like hotels. Differentiation between the
different flight OTAs is challenging and is mostly based on the
prices offered and to a lesser extent, on the ease of the user
booking experience. Consequently, Etraveli, like other flight OTAs,
is dependent to some extent on customer traffic through metasearch
engines like Kayak or Skyscanner to generate revenues, and it is
important for the group's different OTA brands and Booking.com to
be highly placed in customer flight search results. It is also
important to highlight the low barriers of this market to new
entrants and the risk this poses to incumbents in a highly
fragmented and competitive environment, though we acknowledge the
flight segment is more complex to operate and few additional
entrants have come into the market recently. Finally, S&P notes
that the growing adoption of AI platforms like ChatGPT among users
for trip planning could represent a substitution threat to existing
OTAs.
Etraveli's strategic partnership with Booking.com supports its
business. The group has also been the flight reservation platform
for Booking.com since 2019 when Booking.com started offering
airline tickets on its platform, this relationship has recently
been extended to 2033. This partnership has materially contributed
to Etraveli's growth and geographical diversification away from the
Nordics to become a more prominent player globally present in 75
countries since 2019. From 2019 to 2024, the group increased the
number of orders to 25 million from 8 million, with revenue
increasing to EUR715 million from EUR297 million in the same
period. Although there are concentration risks associated with this
partnership, as Booking.com's flight order activity represented a
significant amount of Etraveli's revenues in 2024, S&P thinks that
this partnership will be the group's main growth driver in the
medium to long term.
Etraveli's flight distribution agreements with Ryanair lessen the
group's exposure to reputational risk. Etraveli signed an agreement
in 2024 with Ryanair and Booking.com followed suit earlier in 2025,
in which they are allowed to distribute the airline's flights in
their platforms. Ryanair maintains that flights not sold on its
website should only be sold by distributors such as OTAs with the
airlines consent. Given the airline's relevance in the European
market, it is important for OTAs to maintain a good relationship
with Ryanair as to reduce exposure to potential revenue loss and
legal disputes. This could cause the OTA's reputation and therefore
of the OTA's operating performance to deteriorate, which is a risk
that some OTAs who have not signed an agreement with Ryanair, like
eDreams, face.
S&P said, "Etraveli demonstrated sound growth over the past few
years, and we expect it will continue over the medium term. We
forecast revenue to increase about 18% to EUR845 million in 2025
from EUR715 million in 2024. Fueling this growth is our expectation
of continued growth in travel demand in 2025, although at a slower
pace than in 2024. We believe this will translate into an increased
number of orders, which we expect to be above 30 million for the
year, with support from Etraveli's partnership agreement with
Booking.com. As travel remains resilient in 2026, we expect revenue
to grow 15% toward EUR970 million. In terms of profitability, we
forecast the group's S&P Global Ratings-adjusted EBITDA margin to
remain relatively stable at about 19%-20% for 2025 and 2026, with
S&P Global Ratings-adjusted EBITDA at about EUR165 million in 2025
and EUR188 million in 2026, compared with EUR136 million 2024.
"Etraveli's high leverage allows for minimal rating headroom. The
group closed 2024 with S&P Global Ratings-adjusted debt to EBITDA
of 5.2x, and we expect this figure to increase to about 5.9x in
2025 due to the company's EUR240 million increase in its TLB in
September 2025 to fund a dividend distribution. This is the third
dividend recapitalization transaction Etraveli has executed in 24
months, which has resulted in the group's TLB increasing to EUR965
million from EUR270 million during this period, limiting Etraveli's
headroom within the 'B' rating category. However, absent any
further dividend recapitalization transactions, as the group
continues to grow, we expect adjusted leverage to decrease back to
5.2x in 2026.
"Nevertheless, the group benefits from a strong cash flow
generation profile. Etraveli's asset-light business model results
in relatively low capital expenditure (capex) needs, in combination
with the business' sound profitability. This allows the group to
absorb yearly working capital outflows, which we expect to be about
EUR5 million-EUR10 million in 2025 and 2026 and high yearly cash
interest payments on its debt, at about EUR50 million-EUR55 million
for the same period, while generating significant FOCF. We expect
Etraveli will significantly increase its FOCF after leases to about
EUR68 million in 2025 and toward EUR100 million in 2026, from EUR58
million in 2024, driven by earnings growth.
"The aggressive financial policy of Etraveli's shareholder
constrains our view of the group's financial profile. In our view,
Etraveli's repeated increases in financial debt to fund
distributions to shareholders over the last 24 months prove CVC's
aggressive financial policy. Although, we have not incorporated any
additional debt-funded shareholder distributions in our base case,
we believe the financial sponsor's appetite for releveraging in the
medium term will remain high, in line with other private
equity-owned rated companies, and this could affect Etraveli's
deleveraging profile.
"The stable outlook reflects our expectation that Etraveli's orders
and revenue will grow 15%-18% in 2025-2026, on the back of its
partnership with Booking.com and resilient travel demand. We also
expect EBITDA margin to stabilize at 19%-20%, and FOCF after leases
to remain structurally positive."
S&P could lower the rating if performance deteriorates materially,
on the back of macroeconomic pressure or increased competition, or
if credit metrics weaken due to additional shareholder's
remuneration, resulting in:
-- Negative FOCF after leases; or
-- Adjusted debt to EBITDA increasing above 6.0x.
S&P could raise the rating if Etraveli outperforms its base case,
resulting in:
-- FOCF after leases above EUR50 million per year on a sustainable
basis; and
-- Adjusted leverage falling well below 5.0x, with a clear and
credible commitment from the sponsor that the business would not be
releveraged above that level.
===========================
U N I T E D K I N G D O M
===========================
ATLAS FUNDING 2025-2: DBRS Gives Prov. BB Rating on Class E Notes
-----------------------------------------------------------------
DBRS Ratings Limited assigned provisional credit ratings to the
bonds (the Notes) to be issued by Atlas Funding 2025-2 PLC (the
Issuer) as follows:
-- Class A Notes at (P) AAA (sf)
-- Class B Notes at (P) AA (sf)
-- Class C Notes at (P) A (high) (sf)
-- Class D Notes at (P) BBB (high) (sf)
-- Class E Notes at (P) BB (sf)
-- Class X1 Notes at (P) BB (high) (sf)
-- Class X2 Notes at (P) BB (low) (sf)
The provisional credit rating on the Class A Notes addresses the
timely payment of interest and the ultimate repayment of principal
on or before the final maturity date in July 2067. The provisional
credit ratings on the Class B Notes, Class C Notes, Class D Notes,
and Class E Notes address the timely payment of interest once they
are the senior-most class of Notes outstanding and until then the
ultimate payment of interest and the ultimate repayment of
principal on or before the final maturity date. The provisional
credit ratings on the Class X1 Notes and Class X2 Notes address the
ultimate payment of interest and principal on or before the legal
final maturity date.
CREDIT RATING RATIONALE
The transaction represents the issuance of residential
mortgage-backed securities (RMBS) backed by first-lien, buy-to-let
(BTL) mortgage loans granted by Lendco Limited (Lendco; the Seller
or the Originator) in the UK.
The Issuer is a bankruptcy-remote special-purpose vehicle (SPV)
incorporated in the UK. Lendco is a UK specialist property finance
lender that has been offering loans to customers in England and
Wales since 2018. Lendco's BTL business targets professional
portfolio landlords, often real estate companies, or SPVs, which it
acquires through the broker marketplace.
This is Lendco's sixth securitization with the inaugural
transaction, Atlas Funding 2021-1, closing in January 2021, then
followed by Atlas Funding 2022-1 in May 2022, Atlas Funding 2023-1
in May 2023, Atlas Funding 2024-1 in May 2024, and Atlas Funding
2025-1 in April 2025.
Liquidity in the transaction is provided by the combination of a
liquidity facility (LF) available from closing and a liquidity
reserve fund (LRF) that will be funded through excess spread. The
LF shall cover senior costs and expenses, senior swap payments, and
interest shortfalls on the Class A Notes only whereas the LRF shall
cover the same items plus interest shortfalls on the Class B Notes.
In addition, principal borrowing is also envisaged under the
transaction documentation and can be used to cover senior costs and
expenses as well as interest shortfalls on the most senior
outstanding class of Notes but subject to some conditions for the
Class B to Class E Notes.
Interest shortfalls on the Class B to E Notes, as long as they are
not the most senior class outstanding, shall be deferred and not be
recorded as an event of default until the final maturity date or
such earlier date on which the Notes are fully redeemed.
The transaction also features two fixed-to-floating interest rate
swaps, given the presence of a large portion of fixed-rate loans
(with a compulsory reversion to floating in the future), while the
liabilities shall pay a coupon linked to Sonia.
Morningstar DBRS based its credit ratings on a review of the
following analytical considerations:
-- The transaction's capital structure, including the form and
sufficiency of available credit enhancement;
-- The credit quality of the mortgage portfolio and the ability of
the servicer to perform collection and resolution activities.
Morningstar DBRS estimated stress-level probability of default
(PD), loss given default (LGD), and expected losses (EL) on the
mortgage portfolio. Morningstar DBRS used the PD, LGD, and EL as
inputs into the cash flow engine. Morningstar DBRS analyzed the
mortgage portfolio in accordance with its "European RMBS Insight
Methodology";
-- The transaction's ability to withstand stressed cash flow
assumptions and repay the Loan Notes and the Class A, Class B,
Class C and Class D Notes according to the terms of the transaction
documents;
-- The structural mitigants in place to avoid potential payment
disruptions caused by operational risk, such as a downgrade, and
replacement language in the transaction documents;
-- Morningstar DBRS' sovereign credit rating on the United Kingdom
of Great Britain and Northern Ireland of AA with a Stable trend as
of the date of this press release; and
-- The expected consistency of the transaction's legal structure
with Morningstar DBRS' "Legal and Derivative Criteria for European
Structured Finance Transactions" methodology and the presence of
legal opinions that are expected to address the assignment of the
assets to the Issuer.
Notes: All figures are in British pound sterling unless otherwise
noted.
ATLAS FUNDING 2025-2: Fitch Assigns B+(EXP)sf Rating on Cl. X2 Debt
-------------------------------------------------------------------
Fitch Ratings has assigned Atlas Funding 2025-2 PLC (Atlas 2025-2)
expected ratings. The final ratings are contingent on the receipt
of final documents conforming to information reviewed.
Entity/Debt Rating
----------- ------
Atlas 2025-2 PLC
A LT AAA(EXP)sf Expected Rating
B LT AA-(EXP)sf Expected Rating
C LT A(EXP)sf Expected Rating
D LT BBB(EXP)sf Expected Rating
E LT BB-(EXP)sf Expected Rating
X1 LT BB+(EXP)sf Expected Rating
X2 LT B+(EXP)sf Expected Rating
Transaction Summary
Atlas 2025-2 is a securitisation of buy to-let (BTL) mortgages
originated in England and Wales by Lendco Limited. This will be the
sixth securitisation in the Atlas shelf and the first to be rated
by Fitch. The transaction will include pre-funded notes to purchase
additional mortgage loans, up to 20.8% of the closing pool balance,
to be included by the first interest payment date (IPD).
Lendco Mortgage Servicing Limited, part of the Lendco group, will
be the servicer for the loans in the asset pool
KEY RATING DRIVERS
Prime BTL: The pool is newly originated, with 97.9% (by current
balance (CBAL)) of the closing pool originated in 2025. The
weighted average (WA) original loan-to-value (OLTV) is 71.8% and
the Fitch-calculated WA interest coverage ratio (ICR) 94.2%, which
is in line with BTL RMBS transactions rated by Fitch. Lendco is a
specialist BTL lender, which has a lending policy largely aligned
with specialist BTL peers in LTVs, ICRs, valuations, adverse credit
and pricing. Lendco's limits for adverse credit are similar to
those at peers, although the closing pool to be securitised is
absent of any adverse credit markers, like the previous transaction
Atlas Funding 2025-1 PLC.
Borrower Concentration: Lendco's target market is professional
landlords and limited companies with large portfolios. The company
has a higher tolerance for borrower concentration in this subsector
than peers when comparing the pool's borrower concentrations
against peer transactions. Lendco has no limits on the number of
properties owned by one landlord but limits the amount of lending
per asset and borrower.
To account for the borrower concentration in the portfolio, Fitch
has applied a transaction adjustment (TA) of 1.1x to the WA
foreclosure frequency (FF) assumptions. In addition, as part of its
rating determination Fitch took account of borrower concentration
and sensitivities to lower recovery rates when assigning the
expected ratings, which resulted in the class D rating being one
notch below its model-implied ratings.
Pre-Funding and Product Switches: The deal documentation permits
the inclusion of additional mortgage loans by the first IPD, to be
purchased with the proceeds of the over-issued notes at close
(pre-funding). These notes have been over-issued by 20.9% of the
closing pool balance. The additional loans must meet the additional
mortgage loan conditions and asset tests to be included in the
pool.
The transaction will also allow for the retention of product
switches up to 12.5% of the closing pool balance plus the
additional mortgage loans purchased by the first IPD. To be
retained these loans must meet the product switch conditions and
asset tests outlined in the transaction documentation. This
includes a requirement for the WA post-swap margin on the assets
(fixed and floating) to be no less than 2.1% over three-month
SONIA. Fitch considers the conditions and tests to largely mitigate
the risk of negative portfolio migration or material margin
compression.
Fixed Interest Rate-Hedging Schedule Vector: The closing pool will
consist of 94.8% (by CBAL) of fixed-rate loans that will be hedged
through a series of interest rate swaps. A swap notional and margin
will be re-calculated at each IPD, according to a pre-defined
vector, to account for the fixed-rate roll-off of the closing pool,
the inclusion of pre-funded loans (up to 20.9% of the closing pool
balance) and product switches (up to 12.5% of the closing pool
balance plus the additional mortgage loans purchased by the first
IPD).
Over-hedging could arise due to defaults or prepayments reducing
the performing asset balance by more than the reduction in swap
notional assumed. Over-hedging results in additional available
revenue funds in a rising interest-rate environment but reduced
available revenue funds in a decreasing interest-rate scenario.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The transaction's performance may be affected by changes in market
conditions and the economic environment. Weakening economic
performance is strongly correlated to increasing levels of
delinquencies and defaults that could reduce the credit enhancement
available to the notes. In addition, unexpected declines in
recoveries could result in lower net proceeds, which may make
certain notes susceptible to negative rating action, depending on
the extent of the decline in recoveries.
Fitch found that a 15% WAFF increase and a 15% WA recovery rate
decrease would result in downgrades of up to three notches for the
class D notes and one notch each for the class B and C notes.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Stable to improved asset performance driven by stable delinquencies
and defaults would lead to rising credit enhancement and,
potentially, upgrades. Fitch found that a lowering of the WAFF by
15% and an increase in the WA recovery rate of 15% would lead to
upgrades of one notch each for the class C and X2 notes, two
notches for the class B notes, and up to three notches for the
class X1 note. The class A notes are already rated at the maximum
'AAAsf'.
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 reviewed the results of a third-party assessment conducted on
the asset portfolio information and concluded that there were no
findings that affected the rating analysis.
Fitch conducted a review of a small, targeted sample of the
originator's valuation files and found the information contained in
the reviewed files to be adequately consistent with the
originator's policies and practices and the other information
provided to the agency about the asset portfolio.
Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for its analysis
according to its applicable rating methodologies indicates that it
is adequately reliable.
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.
CD&R AND WSH: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings assigned its 'B' rating to U.K.-based Catering
provider CD&R and WSH Limited, and its financing subsidiary and
borrower of the term loan B (TLB), WSH Services Holding Ltd.
Additionally, S&P assigned its 'B' issue rating and '3' recovery
rating (rounded estimate: 55%) to the company's senior secured
debt, including the RCF and TLB.
The stable outlook reflects our view that WSH will deliver 4%-9%
organic growth and stable adjusted EBITDA margins, resulting in
adjusted debt to EBITDA below 5x, while generating positive free
operating cash flow (FOCF) in 2026 and thereafter.
CD&R and WSH is seeking to raise a new fungible EUR400 million term
loan B (TLB; GBP348 million equivalent) and GBP91 million HoldCo
payment-in-kind (PIK) debt maturing in 2032.
Proceeds will be utilized to fund dividends of GBP281 million and
partially repay GBP239 million under the existing GBP589 million
TLB, alongside a repricing of the existing pound sterling tranche.
At the same time, the company is also planning to raise a new
upsized revolving credit facility (RCF) of GBP120 million, and an
acquisition and capex facility (ACF) of GBP80 million.
WSH is raising EUR400 million of TLB and GBP91 million PIK debt to
fund dividends and partially repay the existing sterling tranche.
Proforma for the transaction, we expect S&P Global Ratings-adjusted
debt of about 6.9x as of year-end 2025. Thereafter, it expects
leverage to improve toward 6.2x by the end of 2026 driven by an
improvement in EBITDA. S&P notes preference shares are also present
in the capital structure, which it treats as equity and exclude
from its leverage and coverage calculations.
S&P said, "WSH reported strong performance in the first half of
2025, and we expect this momentum to continue into 2025. The
company demonstrated a 16% improvement in EBITDA in the first half
of 2025, building on about a 12% improvement in fiscal 2024, thanks
to robust developments in the business and industry segments (about
46% of sales) along with strong growth in public space and retail
segments. We expect revenue to continue to grow in 2025, driven by
continuation of the corporate catering boom from the
back-to-the-office trend and higher retail demand due to growth in
travel. Further contribution in growth in fiscal 2025 will come
from the Genuine Dining acquisition (closed in the third quarter of
2024). S&P Global Ratings-adjusted EBITDA margins have also
improved by 40 basis points (bps) to 7.9% in 2024, which we expect
to further improve to 8.1%, driven by strong top-line growth, but
partly offset by the impact of higher input costs in an
inflationary environment and lower contribution from private
schools which are facing pricing pressures.
"While FOCF generation is likely to be temporarily disrupted in
fiscal 2025, we believe that the underlying cash generation of the
business remains strong. We expect FOCF turnaround in 2026, along
with a strengthening of credit metrics. We forecast negative FOCF
of about GBP12 million, affected by elevated working capital
outflows of about GBP45 million, resulting from inclusion of an
additional payroll week as the company aligned its trading year end
with the calendar year end. However, we expect FOCF to turn
positive at about GBP35 million in 2026 supported by normalization
of working capital requirements. Despite a repricing in October
2024 and the proposed repricing of the pound sterling tranche, we
expect cash interest to be higher due to the expiry of favorable
hedges and incremental debt. However, funds from operations (FFO)
cash interest coverage is expected to improve to 2.3x by year-end
2026, on the back of improved EBITDA.
"Despite our expectation of gradual deleveraging, rating upside is
constrained by the company's financial policy and high leverage. We
forecast S&P Global Ratings-adjusted debt to EBITDA will improve to
6.5x in 2026, from 6.9x in 2025. The rating remains constrained by
the ownership by CD&R, which we treat as a financial sponsor. It
has demonstrated a financial policy with high leverage tolerance,
which could result in higher leverage in the event of strategic
debt-funded mergers and acquisitions, or dividends. WSH would need
to demonstrate a track record of leverage below 5x and a commitment
from its owners that it will operate with a less aggressive
financial policy before we see such levels as sustainable.
"The fair business risk profile reflects our assessment of WSH's
strong market position in the U.K. contract catering market and
relatively good end-market diversity. With a strong share of the
U.K. market and retention rates of about 95%, we consider its local
market position to be strong, in a highly fragmented market. In
addition, the company's business is relatively diversified by
industry segment. It can also rely on a varied contract portfolio
and limited customer concentration risk, together with low capital
expenditure (capex) requirements, given the asset-light nature of
the business.
"WSH's business risk profile is constrained by its relatively small
size, limited geographical diversification, and the fragmented
nature of the U.K. outsourced catering market, characterized by
intense competition among food service providers. WSH has
relatively smaller scale compared with global peers like Compass
(A-/Stable/A-1) and Sodexo (BBB+/Stable/A-2). There is limited
geographic diversity with about 80% of sales from the U.K.
Nevertheless, the company has diversified into Europe with recent
acquisition of Meyers, Musiam Paris, and MRS, among others. We also
consider barriers to entry in the contract catering market to be
relatively low, compared with the wider rated business services
industry, although we acknowledge that heightened regulations on
health and safety, food standards, and data handling have raised
the barriers to compete in recent years, along with food cost
inflation that favors larger players with centralized procurement
functions.
"The stable outlook reflects our view that WSH will continue to
deliver 4%-9% organic growth and stable adjusted EBITDA margins,
resulting in adjusted debt to EBITDA reducing toward 6x, while
generating positive FOCF in 2026 and beyond."
S&P could lower the rating on WSH if:
-- It generates weak or negative FOCF on a sustained basis;
-- S&P no longer expects FFO cash interest coverage of about 2x;
or
-- S&P Global Ratings-adjusted leverage rises above 7.5x, which
could happen if WSH adopts a more aggressive financial policy
through shareholder returns or material debt-funded acquisitions
that increase leverage beyond our current projections.
S&P could raise the rating if the company's shareholders commit to
a less-aggressive financial policy, and it expects debt to EBITDA
to fall materially and sustainably below 5x, while the company
maintains solid FOCF generation.
DESIGN REALISED: Frost Group Named as Administrators
----------------------------------------------------
Design Realised (Kent) Limited was placed into administration
proceedings in the High Court of Justice Business and Property
Courts of England and Wales, Insolvency and Companies List (ChD),
No CR-2025-006658 of 2025, and Jeremy Charles Frost and Stephen
Patrick Jens Wadsted of Frost Group Limited were appointed as
administrators on Oct. 10, 2025.
Design Realised (Kent) engaged in construction of residential homes
and other building work.
Its registered office is at Clockwise Bromley, Old Town Hall, 30
Tweedy Road, Bromley, BR1 3FE
Its principal trading address is at Unit 4a Underriver, Sevenoaks,
TN15 0RX
The joint administrators can be reached at:
Jeremy Charles Frost
Stephen Patrick Jens Wadsted
Opus Restructuring LLP
Frost Group Limited
c/o Frost Group Ltd
Clockwise Bromley, Old Town Hall
30 Tweedy Road,
Bromley, BR1 3FE
For further details, please contact
Laura South
Tel No: 0345 260 0101
Email: laura.south@frostgroup.co.uk
FYLDE FUNDING 2025-1: DBRS Finalizes BB(low) Rating on X2 Notes
---------------------------------------------------------------
DBRS Ratings Limited finalized its provisional credit ratings on
the residential mortgage-backed notes to be issued by Fylde Funding
2025-1 PLC (the Issuer) as follows:
-- Class A Notes at AAA (sf)
-- Class B Notes at AA (high) (sf)
-- Class C Notes at A (high) (sf)
-- Class D Notes at BBB (high) (sf)
-- Class E Notes at BB (high) (sf)
-- Class F Notes at BB (high) (sf)
-- Class X1 Notes at BB (high) (sf)
-- Class X2 Notes at BB (low) (sf)
The credit rating on the Class A Notes addresses the timely payment
of interest and the ultimate repayment of principal on or before
the final maturity date in July 2057. The credit ratings on the
Class B, Class C, Class D, Class E and Class F Notes address the
timely payment of interest once they are the senior-most class of
notes outstanding, otherwise the ultimate payment of interest, and
the ultimate repayment of principal on or before the final maturity
date. The p credit ratings on the Class X1 and Class X2 Notes
address the ultimate payment of interest and principal. Morningstar
DBRS did not rate the Class Z Notes also issued in this
transaction.
CREDIT RATING RATIONALE
The issuance comprises UK residential mortgage-backed securities
(RMBS) backed by second-lien mortgage loans originated by Tandem
Home Loans Limited (the Originator), a subsidiary of Tandem Bank
Limited (Tandem).
The Issuer is a bankruptcy-remote special-purpose vehicle
incorporated in the UK. The notes to be issued funded the purchase
of UK second-lien mortgage loans originated by Tandem. The
Originator, a company of the Tandem group, also acts as the
Servicer of the portfolio.
Tandem is a UK provider of second-charge mortgages, home
improvement loans, and motor finance. Tandem was established in
2014 as a digital challenger bank in the UK and subsequently
acquired Harrods Bank in 2018 and Allium Lending Group in 2020.
Tandem merged with Oplo (established in 2009) in 2022 to form a
green digital bank.
This is the second securitization from Tandem following Fylde
Funding 2024-1 PLC that closed in October 2024. The mortgage
portfolio as of August 2025 consisted of GBP 209.6 million of
second-lien mortgage loans collateralized by a large majority of
owner-occupied properties (96.4%) and buy-to-let properties (3.6%)
in the UK. The pool has a short seasoning of eight months,
comprising mostly mortgages originated in the past 12 months, which
account for 71% of the portfolio, and yields a current
weighted-average coupon of 8.02%.
Liquidity in the transaction is provided by a liquidity reserve
fund, which will cover senior costs and expenses as well as
interest shortfalls for the Class A and Class B Notes. In addition,
principal borrowing is also envisaged under the transaction
documentation and can be used to cover senior costs and expenses,
including swap payments, as well as interest shortfalls of Classes
A to F. However, Class B notes are subject to the principal
deficiency ledger (PDL) condition, which states that if the Class B
Notes are not the most senior outstanding, in case of a PDL debit
of more than 10% of the Class B PDL balance, principal funds will
not be available to cover Class B interest. For the Class C to
Class F Notes, principal draws will only be available when they are
the most senior class outstanding.
The transaction also features a fixed-to-floating interest rate
swap, given the presence of fixed-rate loans (which would revert to
a floating rate in the future), while the liabilities will pay a
coupon linked to Sonia. The swap counterparty appointed as of
closing is Banco Santander SA; Citibank, N.A., London Branch has
been appointed as the Issuer Account Bank; and National Westminster
Bank Plc acts as the Collection Account Bank.
Morningstar DBRS based its credit ratings on a review of the
following analytical considerations:
-- The transaction's capital structure, including the form and
sufficiency of available credit enhancement.
-- The credit quality of the mortgage portfolio and the ability of
the Servicer to perform collection and resolution activities.
Morningstar DBRS estimated stress-level probability of default
(PD), loss given default (LGD), and expected losses (EL) on the
mortgage portfolio. Morningstar DBRS used the PD, LGD, and EL as
inputs into the cash flow engine. Morningstar DBRS analyzed the
mortgage portfolio in accordance with its "European RMBS Insight
Methodology".
-- The transaction's ability to withstand stressed cash flow
assumptions and repay the Class A, Class B, Class C, Class D, Class
E, Class F, Class X1, and Class X2 Notes according to the terms of
the transaction documents.
-- The structural mitigants in place to avoid potential payment
disruptions caused by operational risk, such as a downgrade, and
replacement language in the transaction documents.
-- The sovereign credit rating of AA with a Stable trend on the
United Kingdom of Great Britain and Northern Ireland as of the date
of this press release.
-- The expected consistency of the transaction's legal structure
with Morningstar DBRS' "Legal and Derivative Criteria for European
Structured Finance Transactions" methodology and the presence of
legal opinions that are expected to address the assignment of the
assets to the Issuer.
Notes: All figures are in British pound sterling unless otherwise
noted.
GDC PACKAGING: Leonard Curtis Named as Administrators
-----------------------------------------------------
GDC Packaging Group Ltd was placed into administration proceedings
in the High Court of Justice Business and Property Courts of
England and Wales, Insolvency & Companies List (ChD), Court Number:
CR-2025-006865, and Iain David Nairn and Sean Williams of Leonard
Curtis were appointed as administrators on Oct. 3, 2025.
Pickles&Co Ltd., trading as UK Food Packers, engaged in business
support service activities.
Its registered office is at Unit 13, Kingsway House, Kingsway, Team
Valley Trading Estate, Gateshead NE11 0HW
Its principal trading address is at Unit 3 Spectrum Business Park,
Seaham, County Durham, SR7 7PP
The joint administrators can be reached at:
Iain David Nairn
Sean Williams
Leonard Curtis
Unit 13, Kingsway House
Kingsway Team Valley Trading Estate
Gateshead, NE11 0HW
For further details, contact:
Tel: 0191 933 1560
Email: recovery@leonardcurtis.co.uk
Alternative contact:
Ryan Butler
GLOBAL ACADEMIC: Moody's Assigns First Time B1 Corp. Family Rating
------------------------------------------------------------------
Moody's Ratings has assigned first-time ratings to Global Academic
Holdings Ltd (GAHL or the company), including a B1 long-term
corporate family rating and a B1-PD probability of default rating.
Moody's have also assigned B1 ratings to the EUR385 million and
GBP100 million backed senior secured first-lien term loans B (TLB)
due 2032 and GBP50 million backed senior secured first-lien
revolving credit facility (RCF) due 2032 to be issued by the
company's subsidiary GAH Finco Ltd. The outlook on both entities is
stable. Moody's have also withdrawn the B1 CFR and B1-PD PDR of
Global University Systems Holding B.V. (GUS), the parent company of
GAHL. At the time of the withdrawal, the outlook for GUS was
stable.
The rating action reflects the proposed reorganisation of entities
within GUS. The new debt issuance will refinance the GUS debt
facilities (issued under Markermeer Finance B.V.) within a smaller
perimeter of businesses, focused on the most established and
profitable entities within the GUS group. The transaction follows
the agreed sale of a 50% stake in Arden University (Arden BidCo
Limited – B2, stable) in August.
On completion of the transaction and completion of the Arden
University transaction, all rated debt issued by Markermeer Finance
B.V., a subsidiary of GUS, will be repaid and the instrument
ratings of these debts will be withdrawn.
The rating action reflects the company's:
-- Moderate leverage of 3.5x Moody's-adjusted debt / EBITDA as at
May 2025, pro forma for the transaction, alongside strong cash
generation
-- The strong operating track record of entities within the GAHL
perimeter, high earnings visibility and growing demand for private
university education globally
-- Exposure to regulatory changes, in particular in relation to
visa requirements for overseas students in Canada, a territory
representing over 50% of company EBITDA
RATINGS RATIONALE
The B1 long-term CFR reflects the company's: (1) strong track
record of growth for entities within the GAHL perimeter; (2)
growing demand for private higher education globally; (3)
relatively high earnings visibility supported by existing and new
enrolments and applications, covering around 85% of forecast
revenues for fiscal 2026 (ending May 2026); (4) relatively high
barriers to entry through regulation, access to real estate and
brand reputation; and (5) moderate financial leverage of 3.5x on a
Moody's-adjusted basis as at May 2025, pro forma for the
transaction.
The ratings also reflect: (1) relatively high concentration, with
one institution in Canada generating over 50%, and the top four
institutions over 90% of company-adjusted EBITDA in fiscal 2025;
(2) adverse changes in visa regulations for international students
in Canada leading to a 35% fall in enrolments in fiscal 2025, with
uncertainty over future levels; (3) risks of other adverse
regulatory changes, or in relation to profit extraction from
institutions in India; (4) recent rapid growth in some institutions
which may not be sustained or impact quality standards; and (5)
governance risk related to the concentration of power around the
founder.
GAHL and GUS have good track records of growth and of identifying
and exploiting opportunities where there is increasing demand for
courses or in specific geographies. Moody's notes however that
GAHL, in its new perimeter, represents a smaller group than GUS as
a whole, and excludes the rapidly growing Arden University. As a
result there is currently a high degree of concentration by
institution and also by subject. University Canada West (UCW)
represents around 56% of company-adjusted pro forma EBITDA for
fiscal 2025 and the top four institutions represent over 90%.
Given the revenue concentration GAHL is vulnerable to regulatory or
trading pressure at individual institutions and in particular has
been affected by adverse changes to visa and other rules for
international students in Canada which represent almost all UCW's
student intake. There have been very limited enrolments at UCW
since January 2025, and a recovery relies on allocations of visa
letters to UCW, the pace of conversion of these to new enrolments,
the degree of visa letter refusals, and more broadly on government
immigration policies. However the company is well placed to obtain
increased visa allocations compared to prior year given the
unexpectedly steep drop in international students in 2025, the
reallocation of visa letters from public institutions which do not
take up their allocations, and growth in University of Niagara
Falls supported by local regeneration plans. The company will also
expand its Ontario Institute of Health and Innovation, which
primarily targets domestic students.
A key proof point will be the allocation of visa letters to
institutions in Canada in October 2025 and January 2026, which will
reduce uncertainties over trading recovery in the region. Despite
forecasting a fall in revenues and EBITDA in Canada in fiscal 2026,
Moody's expects this to be offset by strong growth in the rest of
the group. As a result Moody's expects modest growth in EBITDA in
fiscal 2026, increasing thereafter, with good earnings visibility
through student enrolments and the existing student cohort. Moody's
also expects the company to gradually improve its revenue diversity
with the growth across institutions.
A comprehensive review of all credit ratings for the respective
issuer(s) has been conducted during a rating committee.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE
As a provider of private higher education the company has limited
exposure to environmental risk. Social risks relate to the
importance of the group's academic reputation which is a key factor
for its institutions' success and its continued need to attract and
retain highly skilled personnel. This is balanced by favourable
exposure to societal trends such as the increasing demand for
quality education.
GAHL's ratings factor in certain governance considerations such as
its ownership structure with the founder having significant
control, creating a degree of key man risk. The company's six
member board includes three non-executive directors. In addition
there is strong governance at institutional level which is also
underpinned by regulatory frameworks. Moody's governance assessment
also considers the group's financial policy which targets modest
leverage and is focused on organic growth projects rather than
significant debt-funded M&A.
OUTLOOK
The stable outlook reflects Moody's expectations that GAHL's
enrolment levels in Canada will recover gradually through fiscal
2026 and 2027, with sufficient organic growth outside of Canada to
deliver revenue and EBITDA growth on a group basis. It also assumes
that solid cash flow generation will be achieved with
Moody's-adjusted free cash flow/ debt at least in the high single
digit percentages. The outlook also assumes that the company will
follow a balanced financial policy and any acquisitions will not
lead to material re-leveraging from current levels.
LIQUIDITY
GAHL has good liquidity. At May 2025 the company held cash of GBP57
million. A further GBP10 million liquidity will be generated from
the transaction, and the company will have access to a GBP50
million senior secured first-lien revolving credit facility
expected to be undrawn at closing. The RCF is subject to a
springing covenant test set at a senior secured net leverage ratio
of 5x, applicable when drawn by at least 35%, under which Moody's
expects substantial headroom. Working capital is seasonal with a
cash low point in May and peak around August when the highest level
of advance fees are collected at the start of the academic year.
STRUCTURAL CONSIDERATIONS
The backed senior secured first-lien TLB and backed senior secured
first-lien RCF are rated B1, in line with the CFR. There are no
shareholder loans entering the restricted group.
COVENANTS
Moody's have reviewed the marketing draft terms for the new credit
facilities. Notable terms include the following:
Guarantor coverage will be at least 80% of consolidated EBITDA
(determined in accordance with the agreement) and include all
companies representing 5% or more of consolidated EBITDA. Regulated
entities and entities incorporated in India are not required to
provide guarantees and security. Security will be granted over key
shares, bank accounts, intra-group receivable, floating security
where available, and identified real estate.
Unlimited pari passu debt is permitted up to a senior secured
leverage ratio of 3.0x (which may be incurred as an incremental
facility), and unlimited unsecured debt is permitted subject to a
2.0x fixed charge coverage ratio. Uncapped restricted payments are
permitted if total leverage is 1.50x or lower.
Adjustments to consolidated EBITDA include the full run rate of
cost savings and synergies, capped at 15% per cost-saving or
synergy (and reported on where over 7.5%) and believed to be
realisable within 12 months.
The proposed terms, and the final terms may be materially
different.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Upward pressure on the rating could occur if GAHL increases its
revenue diversity, achieves good student enrolment growth across
regions, successfully negotiating regulatory challenges and
translating into higher revenues; and Moody's-adjusted Debt/EBITDA
sustainably declines below 3.0x; and Moody's-adjusted Free Cash
Flow/Debt consistently exceeds 10%; and liquidity remains solid.
Downward pressure on the rating could develop if GAHL's
Moody's-adjusted Debt/EBITDA increases above 4.5x; or
Moody's-adjusted EBITA/Interest decreases below 2.5x; or
Moody's-adjusted Free Cash Flow/Debt is not maintained in the high
single digit percentages; or liquidity weakens.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
The net effect of any adjustments applied to rating factor scores
or scorecard outputs under the primary methodology(ies), if any,
was not material to the ratings addressed in this announcement.
CORPORATE PROFILE
Global Academic Holdings Ltd is a private higher education provider
offering accredited academic under- and postgraduate degrees,
vocational and professional qualifications both on campus and
online. The company operates 11 institutions focused mainly in
Canada, the UK, Germany and India, enrolling approximately 70,000
students. During the financial year ended May 31, 2025, businesses
within the GAHL perimeter generated GBP663 million of revenue and a
company-adjusted EBITDA of GBP176 million. The company is a
subsidiary of Global University Systems Holding B.V. which is
ultimately controlled by its founder and majority shareholder Aaron
Etingen.
MERIDIAN FUNDING 2025-1: DBRS Gives (P)BB(high) Rating on 2 Classes
-------------------------------------------------------------------
DBRS Ratings Limited assigned provisional credit ratings to the
certificates to be issued by Meridian Funding 2025-1 PLC (the
Issuer) as follows:
-- Class A certificates at (P) AAA (sf)
-- Class B certificates at (P) AA (low) (sf)
-- Class C certificates at (P) A (sf)
-- Class D certificates at (P) BBB (high) (sf)
-- Class E certificates at (P) BB (high) (sf)
-- Class X certificates at (P) BB (high) (sf)
The provisional credit rating on the Class A certificates addresses
the timely payment of profit and the ultimate repayment of
principal on or before the final maturity date in February 2068.
The provisional credit ratings on the Class B, Class C, Class D,
Class E, and Class X certificates address the timely payment of
profit once they are the most senior class of notes outstanding
and, until then, the ultimate payment of profit and the ultimate
repayment of principal on or before the final maturity date.
CREDIT RATING RATIONALE
The transaction represents the issuance of UK residential
mortgage-backed securities (RMBS) backed by Sharia-compliant home
purchase plans (HPPs), which are an Islamic finance alternative to
traditional mortgage loans, and originated by StrideUp Homes
Limited (StrideUp or the Originator). The Issuer is a
bankruptcy-remote special-purpose vehicle incorporated in the UK.
StrideUp will act as the servicer of the portfolio while servicing
will be delegated to Intrum Mortgages UK Finance Limited as
delegated servicer. This is the first securitization from
StrideUp.
The transaction includes a prefunding mechanism where the seller
has the option to sell StrideUp-originated HPPs to the Issuer
subject to certain conditions to prevent a material deterioration
in credit quality. The acquisition of these assets will occur
before the fourth distribution date using the proceeds standing to
the credit of the prefunding reserves. Any funds that are not
applied to purchase additional HPPs will, (1) if standing to the
credit of the prefunding principal reserve ledger, be applied pro
rata to pay down the Class A to Class F certificates; or (2) if
standing to the credit of the prefunding revenue reserve ledger,
flow through the revenue priority of payments.
The Issuer is expected to issue six tranches of collateralized
securities (the Class A, Class B, Class C, Class D, Class E, and
Class F certificates) to finance the purchase of the portfolio and
the prefunding principal reserve ledger at closing. Additionally,
the Issuer is expected to issue one class of noncollateralized
certificates (the Class X certificates).
The transaction is structured to initially provide 7.75% of credit
enhancement to the Class A certificates, which includes
subordination of the Class B to the Class F certificates.
Liquidity in the transaction is provided by a liquidity reserve
fund (LRF) that is sized at 1.50% of the Class A and Class B
certificates' outstanding balance. The LRF covers shortfalls on
senior costs and expenses, swap payments, and profit on the Class A
and Class B certificates. Any liquidity reserve excess amount will
be applied as available principal receipts, and the reserve will be
released in full once the Class B certificates are fully repaid. In
addition, principal borrowing is also envisaged under the
transaction documentation and can be used to cover shortfalls on
senior costs and expenses, including swap payments, as well as
profit on Classes A to E, subject to being the most senior class of
notes outstanding.
The transaction features a fixed-to-floating profit rate swap,
given that the majority of the pool is composed of fixed profit
rate HPPs with a compulsory reversion to floating in the future.
The certificates will pay a coupon linked to the daily compounded
Sterling Overnight Index Average. BNP Paribas SA (BNPP) will be
appointed as the swap counterparty at closing. Based on Morningstar
DBRS' credit ratings on BNPP, the downgrade provisions outlined in
the documents, and the transaction structural mitigants,
Morningstar DBRS considers the risk arising from the exposure to
the swap counterparty to be consistent with the credit ratings
assigned to the rated certificates as described in Morningstar
DBRS' "Legal and Derivative Criteria for European Structured
Finance Transactions".
Standard Chartered Bank will act as the Issuer account bank and
will hold the Issuer's transaction account, the LRF, and the swap
collateral account. HSBC Bank plc (HSBC) will be appointed as the
collection account. Morningstar DBRS privately rates HSBC. The
entities meet the eligible credit ratings in structured finance
transactions and are consistent with the credit ratings assigned to
the rated certificates as described in Morningstar DBRS' "Legal and
Derivative Criteria for European Structured Finance Transactions"
methodology.
Morningstar DBRS based its credit ratings on a review of the
following analytical considerations:
-- The transaction's capital structure, including the form and
sufficiency of available credit enhancement;
-- The HPP portfolio's credit quality and the servicer's ability
to perform collection and resolution activities. Morningstar DBRS
estimated stress-level probability of default (PD), loss given
default (LGD), and expected losses (EL) on the HPP portfolio.
Morningstar DBRS used the PD, LGD, and EL as inputs into the cash
flow engine and analyzed the HPP portfolio in accordance with its
"European RMBS Insight Methodology";
-- The transaction's ability to withstand stressed cash flow
assumptions and repay the Class A, Class B, Class C, Class D, Class
E, and Class X certificates according to the terms of the
transaction documents;
-- The structural mitigants in place to avoid potential payment
disruptions caused by operational risk, such as a downgrade, and
replacement language in the transaction documents;
-- Morningstar DBRS' sovereign credit rating on the United Kingdom
of Great Britain and Northern Ireland of AA with a Stable trend as
of the date of this press release; and
-- The expected consistency of the transaction's legal structure
with Morningstar DBRS' "Legal and Derivative Criteria for European
Structured Finance Transactions" methodology and the presence of
legal opinions that are expected to address the assignment of the
assets to the Issuer.
Notes: All figures are in British pound sterling unless otherwise
noted.
MORTIMER 2025-1: DBRS Assigns Prov. BB(high) Rating on 2 Classes
----------------------------------------------------------------
DBRS Ratings Limited assigned provisional credit ratings to the
residential mortgage-backed notes to be issued by Mortimer 2025-1
PLC (the Issuer) as follows:
-- Class A Notes at (P) AAA (sf)
-- Class B Notes at (P) AA (high) (sf)
-- Class C Notes at (P) A (high) (sf)
-- Class D Notes at (P) A (low) (sf)
-- Class E Notes at (P) BB (high) (sf)
-- Class X Notes at (P) BB (high) (sf)
The provisional credit rating on the Class A Notes addresses the
timely payment of interest and the ultimate repayment of principal
on or before the final maturity date in September 2070. The
provisional credit ratings on the Class B, Class C, Class D, Class
E, and Class X Notes address the timely payment of interest once
they are the most senior class of notes outstanding and, until
then, the ultimate payment of interest and the ultimate repayment
of principal on or before the final maturity date.
CREDIT RATING RATIONALE
The transaction represents the issuance of UK residential
mortgage-backed securities (RMBS) backed by first-lien residential
assets. The Issuer is a bankruptcy-remote special-purpose vehicle
incorporated in England and Wales. The notes to be issued will fund
the purchase of buy-to-let (BTL) mortgage loans originated and
serviced by LendInvest BTL Limited (LIBTL) and owner-occupied (OO)
loans originated and serviced by LendInvest Loans Limited (LLL).
All primary and special servicing of loans originated by LendInvest
is outsourced to Pepper (UK) Limited, which was sold to J.C.
Flowers & Co. in February 2025. Law Debenture Corporate Services
Limited will be appointed as the backup servicer facilitator for
the transaction.
This is the seventh securitization from the Mortimer series, and
the first rated by Morningstar DBRS. The mortgage portfolio as of
30 September 2025 consisted of GBP 271 million in first-lien
mortgage loans secured by BTL and OO properties in the UK,
excluding the prefunded pool.
The transaction includes a prefunding mechanism where the BTL
seller has the option to sell LIBTL-originated mortgage loans to
the Issuer subject to certain conditions to prevent a material
deterioration in credit quality. The acquisition of these assets
will occur before the first interest payment date (IPD) using the
proceeds standing to the credit of the prefunding reserves. Any
funds that are not applied to purchase additional loans will, (1)
if standing to the credit of the prefunding principal reserve
ledger, be applied pro rata to pay down the Class A to Class E
Notes; or (2) if standing to the credit of the prefunding revenue
reserve ledger, flow through the revenue priority of payments.
The Issuer is expected to issue five tranches of collateralized
mortgage-backed securities (the Class A, Class B, Class C, Class D,
and Class E Notes) to finance the purchase of the portfolio,
liquidity reserve fund (LRF), and the prefunding principal reserve
ledger at closing. Additionally, the Issuer is expected to issue
one class of noncollateralized notes, the Class X Notes, of which
the Issuer will retain GBP 250,000 of the proceeds and release them
into the revenue waterfall on the first IPD.
The transaction is structured to initially provide 10.6% of credit
enhancement to the Class A Notes, which includes subordination of
the Class B to the Class E Notes. The Class E Notes are
undercollateralized because part of the Class E Notes' proceeds are
used to fund the LRF to its target at closing, the Class E Notes do
not benefit from the subordination of a junior class of notes, and
the transaction does not feature a general reserve providing credit
protection to the notes.
Liquidity in the transaction is provided by an LRF that is sized at
1.25% of the Class A and Class B Notes' initial balance until the
first optional redemption date in September 2029, and 1.25% of the
Class A and Class B Notes' outstanding balance thereafter. The LRF
covers senior costs and expenses, swap payments, and interest
shortfalls for the Class A and Class B Notes. Any liquidity reserve
excess amount will be applied as available principal receipts, and
the reserve will be released in full once the Class B Notes are
fully repaid. In addition, principal borrowing is also envisaged
under the transaction documentation and can be used to cover senior
costs and expenses, including swap payments, as well as interest
shortfalls of Classes A to E, subject to being the most senior
class of notes outstanding.
The transaction features a fixed-to-floating interest rate swap,
given that the majority of the pool is composed of fixed-rate loans
with a compulsory reversion to floating in the future. The
liabilities will pay a coupon linked to the daily compounded
Sterling Overnight Index Average. Lloyds Bank Corporate Markets plc
(LBCM) will be appointed as the swap counterparty at closing. Based
on Morningstar DBRS' private credit ratings on LBCM, the downgrade
provisions outlined in the documents, and the transaction
structural mitigants, Morningstar DBRS considers the risk arising
from the exposure to the swap counterparty to be consistent with
the credit ratings assigned to the rated notes as described in
Morningstar DBRS' "Legal and Derivative Criteria for European
Structured Finance Transactions" methodology.
Citibank N.A./London Branch (Citibank London) will act as the
Issuer account bank and will hold the Issuer's transaction account,
the LRF, and the swap collateral account. Barclays Bank PLC
(Barclays) will be appointed as the collection account bank for the
BTL loans, and HSBC Bank plc (HSBC) for the OO loans. Morningstar
DBRS privately rates Citibank London and HSBC and has a Long Term
Critical Obligations Rating of AA (low) and a Long-Term Issuer
Rating of "A" on Barclays, both with Positive trends. All three
entities meet the eligible credit ratings in structured finance
transactions and are consistent with the credit ratings assigned to
the rated notes as described in Morningstar DBRS' "Legal and
Derivative Criteria for European Structured Finance Transactions"
methodology.
Morningstar DBRS based its credit ratings on a review of the
following analytical considerations:
-- The transaction's capital structure, including the form and
sufficiency of available credit enhancement;
-- The mortgage portfolio's credit quality and the servicer's
ability to perform collection and resolution activities.
Morningstar DBRS estimated stress-level probability of default
(PD), loss given default (LGD), and expected losses (EL) on the
mortgage portfolio. Morningstar DBRS used the PD, LGD, and EL as
inputs into the cash flow engine and analyzed the mortgage
portfolio in accordance with its "European RMBS Insight
Methodology";
-- The transaction's ability to withstand stressed cash flow
assumptions and repay the Class A, Class B, Class C, Class D, Class
E, and Class X Notes according to the terms of the transaction
documents;
-- The structural mitigants in place to avoid potential payment
disruptions caused by operational risk, such as a downgrade, and
replacement language in the transaction documents;
-- Morningstar DBRS' sovereign credit rating on the United Kingdom
of Great Britain and Northern Ireland of AA with a Stable trend as
of the date of this press release; and
-- The expected consistency of the transaction's legal structure
with Morningstar DBRS' "Legal and Derivative Criteria for European
Structured Finance Transactions" methodology and the presence of
legal opinions that are expected to address the assignment of the
assets to the Issuer.
Notes: All figures are in British pound sterling unless otherwise
noted.
PINNACLE BIDCO: Moody's Alters Outlook on 'B3' CFR to Positive
--------------------------------------------------------------
Moody's Ratings has affirmed the B3 long-term corporate family
rating, B3 backed senior secured ratings, Ba3 senior secured bank
credit facility rating and a B3-PD probability of default rating of
Pinnacle Bidco plc (PureGym or the company), a leading budget gym
operator. The outlook was changed to positive from stable.
RATINGS RATIONALE
The ratings affirmation and revised outlook reflect significant
deleveraging over the past year and Moody's expectations of
sustained strong operating performance, which should further
enhance credit metrics over the next 18 months. This improvement is
anticipated due to earnings growth driven by the maturation of
recently opened sites, ongoing recovery in the member base at
mature clubs, and strict cost control.
Moody's expects leverage, as measured by Moody's-adjusted gross
debt/EBITDA ratio, to reach approximately 5x by the end of 2025 and
remain below 5x in subsequent years, down from 6.5x in December
2024. Moody's anticipates the interest cover, measured as
Moody's-adjusted EBITA/interest ratio, to reach 1.1x by the end of
2025 and improve towards 1.5x by the end of 2027. Cash consumption
will remain substantial as PureGym invests in growth capital
spending, which Moody's expects to average just over GBP100 million
annually in 2026 and 2027. Moody's forecasts Moody's-adjusted free
cash flow to be negative at about GBP150 million in 2025, negative
GBP50 million in 2026, and broadly neutral in 2027.
ESG CONSIDERATIONS
Issuer's governance risk is largely stemming from company's
concentrated ownership with a single controlling shareholder which
also controls the board.
RATIONALE FOR THE POSITIVE OUTLOOK
The positive outlook reflects Moody's expectations that the company
will sustain strong operating performance and maintain solid
liquidity, which will drive earnings growth and improve credit
metrics over the next 18 months. The outlook could return to stable
if the company fails to improve its credit metrics.
LIQUIDITY
PureGym's liquidity remains adequate, with GBP303.5 million in
available funds. This includes GBP94 million in cash on the balance
sheet as of June 30, 2025 and full access to a GBP175.5 million
super senior revolving credit facility (SSRCF). In addition,
PureGym has GBP34 million remaining from Kohlberg Kravis Roberts &
Co. Partners LLP (KKR) GBP300 million equity investment, which can
be pushed down from the Pinnacle Topco Limited level to Pinnacle
Bidco plc.
The SSRCF includes a leverage covenant that is tested if the
facility is drawn by more than 40%, or GBP70.2 million.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's may consider upgrading the ratings if the company achieves
all of the following:
-- Continues robust organic revenue and EBITDA growth
-- Sustains cash generation, and maintains good liquidity
-- Improves its Moody's adjusted EBITA/Interest ratio towards
1.5x
-- Maintains its Moody's adjusted Debt/EBITDA ratio sustainably
below 6x
Moody's might downgrade PureGym's ratings if any of the following
occur:
-- Liquidity deteriorates
-- Moody's adjusted Debt/EBITDA ratio remains above 7.5x
-- Moody's adjusted EBITA/interest ratio stays below 1x
-- There is a material and sustained decline in the number of
members or in membership yield
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
The net effect of any adjustments applied to rating factor scores
or scorecard outputs under the primary methodology(ies), if any,
was not material to the ratings addressed in this announcement.
PROFILE
Founded in 2008 and headquartered in Leeds, Pinnacle Bidco plc,
known as PureGym, ranks as the second-largest health and fitness
club operator in Europe by membership, focusing on the low-cost
segment. As of June 2025, the group boasted 2.4 million members
across 670 owned gyms located in the UK, Denmark, Switzerland, and
the US, alongside 23 franchised clubs in the Middle East. The group
generated GBP676 million in revenue for the 12 months ending June
2025. Private equity firm Leonard Green & Partners, L.P. (LGP) and
its management own the company. Since early 2022, KKR has held
convertible preferred equity shares in PureGym. Upon conversion to
22% of equity at exit, LGP would possess a 64%-67% stake, while
management would hold 11%-14%.
RTG REALISATIONS 2025: FRP Advisory Named as Administrators
-----------------------------------------------------------
RTG Realisations 2025 Limited was placed into administration
proceedings in the High Court of Justice Business and Property
Courts in the High Court of Justice Business and Property Courts in
Manchester, Insolvency and Companies List (ChD), Court Number:
CR-2025-MAN-001365, and Martyn Rickels and Anthony Collier of FRP
Advisory Trading Limited, were appointed as administrators on Sept.
30, 2025.
RTG Realisations 2025, trading as Russell Taylor Group Limited, fka
Russell Taylor Group Limited specialized in activities of
employment placement agencies.
Its registered office is at Burton Manor, The Village, Burton,
Cheshire, CH64 5SJ to be changed to C/O FRP Advisory Trading
Limited, 4th Floor Abbey House, Booth Street, Manchester, M2 4AB
Its principal trading address is at Burton Manor, The Village,
Burton, Cheshire, CH64 5SJ
The joint administrators can be reached at:
Martyn Rickels
Anthony Collier
FRP Advisory Trading Limited
4th Floor, Abbey House, Booth Street
Manchester, M2 4AB
For further details, contact:
The Joint Administrators
Tel No: 0161 833 3344
Alternative contact:
Ben Smith
Email: cp.manchester@frpadvisory.com
RTHL REALISATIONS: FRP Advisory Named as Administrators
-------------------------------------------------------
RTHL Realisations Ltd was placed into administration proceedings in
the High Court of Justice Business and Property Courts in
Manchester, Insolvency & Companies List (ChD) Court Number:
CR-2025-001366, and Martyn Rickels and Anthony Collier of FRP
Advisory Trading Limited were appointed as administrators on Sept.
30, 2025.
RTHL Realisations traded as Russell Taylor Holdings Limited. RTHL
engaged in activities of head offices.
Its registered office is at Burton Manor, The Village, Burton,
Cheshire, CH64 5SJ (to be changed to FRP Advisory Trading Limited,
4th Floor Abbey House, Booth Street, Manchester, M2 4AB)
Its principal trading address: Burton Manor, The Village, Burton,
Cheshire, CH64 5SJ
The joint administrators can be reached at:
Martyn Rickels
Anthony Collier
FRP Advisory Trading Limited
4th Floor, Abbey House
Booth Street
Manchester M2 4AB
For further information, contact:
The Joint Administrators
Tel No: 0161 833 3344
Alternative contact:
Ben Smith
Email: cp.manchester@frpadvisory.com
SUGARDOUGH LIMITED: Quantuma Advisory Named as Administrators
-------------------------------------------------------------
Sugardough Limited was placed into administration proceedings in
the High Court of Justice Business and Property Courts of England
and Wales, Court Number: CR-2025-006887, and Sean Bucknall and Marc
Norman of Quantuma Advisory Limited were appointed as
administrators on Oct. 3, 2025.
Sugardough Limited engaged in the retail sale of bread, cakes,
flour confectionery and sugar confectionery in specialised stores.
Its registered office is at 47 Shirley Street, Hove, BN3 3WH and it
is in the process of being changed to 3rd Floor, 37 Frederick
Place, Brighton, BN1 4EA
Its principal trading address is at 5 Victoria Terrace, Hove, BN3
2WB
The joint administrators can be reached at:
Sean Bucknall
Marc Norman
Quantuma Advisory Limited
3rd Floor, 37 Frederick Place
Brighton, Sussex, BN1 4EA
For further details, contact:
Joel Daly
Tel No: 01273 322413
Email: joel.daly@quantuma.com
TALKTALK TELECOM: S&P Hikes LT ICR to 'CCC+', Outlook Negative
--------------------------------------------------------------
S&P Global Ratings raised its long-term issuer credit rating on
TalkTalk Telecom Group Ltd. (TalkTalk) to 'CCC+' from 'D'
(default).
S&P said, "We also assigned our 'CCC+' issue rating and '3'
recovery rating to TalkTalk's GBP620 million senior secured
first-lien first-out notes and GBP75 million senior secured
first-lien first-out facility; and our 'CCC-' issue rating and '6'
recovery rating to the GBP236 million senior secured second-lien
first-out facility. We also raised our issue rating to 'CCC-' from
'D', with a recovery rating of '6' on the remaining second-lien
debt.
"The negative outlook reflects our view that continued revenue
pressures and cash flow challenges increase the risk that TalkTalk
will struggle to refinance its debt maturing in February and March
2028, absent an asset sale, increasing the risk it would engage in
a distressed exchange or an event we view as tantamount to a
default. Still, we believe the company has sufficient liquidity to
meet its operating obligations, supported by the absence of cash
interest payments and no debt maturities over the next 12 months."
TalkTalk has completed a debt restructuring that improved its
liquidity position and its debt maturity profile.
The new capital structure is unsustainable due to very high
financial leverage, fully paid-in-kind (PIK) interest, and
challenging market conditions, making TalkTalk dependent upon
favorable business, financial, and economic conditions to meet its
financial commitments. S&P believes at least a partial sale of the
business will be necessary for the company to reduce debt
substantially and make its capital structure sustainable.
The debt restructuring has improved the company's liquidity
position and maturity profile, but S&P expects limited headroom
over the next 12-24 months. The company has completed a debt
restructuring and exchanged its first-lien instruments into new
first-lien first-out instruments with extended maturities and fully
PIK interest; new funding by shareholders into a new 1.5-lien
facility; and part of its second-lien instruments into new
second-lien first-out instruments. Some remaining second-lien
instruments also remain in the capital structure. The new capital
structure includes:
-- First-lien first-out senior secured debt maturing in February
2028 totaling GBP694 million, including about GBP620 million notes
carrying PIK-for-life interest of 8.25% and a GBP75 million term
loan carrying SONIA plus 4%.
-- A GBP120 million 1.5-lien new money facility maturing in
February 2028, carrying SONIA plus 7.5% PIK-for-life interest. This
instrument ranks below the first-lien first-out debt and above the
second-lien debt.
-- A GBP236 million second-lien first-out facility, maturing in
March 2028, carrying SONIA plus 7.5% PIK-for-life interest.
-- Remaining second-lien debt maturing in March 2028, including
GBP313 million notes carrying PIK-for-life interest of 11.75% and a
GBP57 million facility carrying SONIA plus 7.5%.
The debt restructuring has improved TalkTalk's liquidity profile
through extended maturities and shareholder funding, as well as
improved free cash flow thanks to the PIK-for-life interest until
the debt matures in February and March 2028. The company's
liquidity position will also benefit from in-flight cost savings,
which S&P expects will be completed by the end of fiscal 2027, and
lower capital expenditure (capex) needs of about GBP80 million on
average over fiscal years 2026 to 2028 (ending Feb. 28). However,
the credit metrics remain pressured by negative free cash flow
after leases expected until the end of fiscal 2028, driven by weak
operating performance and significant working capital needs,
including a GBP100 million outflow in fiscal 2026. The absence of a
revolving credit facility (RCF) and substantial intrayear working
capital volatility further constrain liquidity over the next 24
months.
A very high debt burden and accruing PIK interest make TalkTalk's
capital structure unsustainable. The company's leverage increased
to about 13x following the restructuring in fiscal 2025. S&P
expects leverage will remain at this level in fiscals 2026 and
2027, as the new shareholder funding facility and accruing PIK
interest on the full capital structure increase the group's debt,
offsetting EBITDA improvements from cost savings. The reliance on
PIK interest further highlights the unsustainability of the capital
structure and the company's inability to service cash interest. S&P
said, "In our view, TalkTalk would have to sell at least part of
the business to pay down debt and return to a capital structure
that is sustainable for the business. While we understand the
company is actively pursuing such options, the timing and execution
remain uncertain."
S&P said, "We continue to expect challenging business prospects for
TalkTalk in the competitive U.K. market impacting revenue and cash
flow. We expect an 8% revenue decline in fiscal 2026 and 6% in
fiscal 2027, reflecting continued customer losses, mainly in the
consumer segment, and slower ethernet growth, only marginally
offset by gradual improvements in average revenue per user (ARPU),
new product launches, and continued fiber penetration. The U.K.
telecom market is highly competitive, with stronger players able to
lower prices to fight aggressive promotions by alternative
networks, putting additional pressure on weaker value-focused
providers such as TalkTalk. This could disrupt TalkTalk's strategy
to increase ARPU by focusing on higher-value customers. We
understand the company's cost-savings program is on track and will
complete in fiscal 2027, resulting in an improved operating cost
base and lower exceptional costs related to the group's split into
two divisions and copper exit costs. This will support S&P Global
Ratings-adjusted EBITDA margin growth toward 21% in fiscal 2027.
However, according to our estimates, this will be insufficient to
fully cover capex, working capital needs, and lease repayments,
despite cash interest being supported by the application of PIK
interest to all debt instruments.
"The negative outlook reflects our view that continued revenue
pressures and cash flow challenges increase the risk that TalkTalk
will struggle to refinance its debt maturing in February and March
2028, absent an asset sale, increasing the risk it will engage in a
distressed exchange or an event we view as tantamount to a default.
Still, we believe the company has sufficient liquidity to meet its
operating obligations, supported by the absence of cash interest
payments and no debt maturities over the next 12 months.
"We could lower our rating on TalkTalk if we believed chances of a
default or another debt restructuring increased in the next 12
months as the company gets closer to its new maturities. This could
happen if we saw no significant progress of an asset sale or if
operating underperformance led to a liquidity shortfall.
"We are unlikely to raise our rating on TalkTalk in the next year
due its very high debt burden and substantial PIK interest that we
expect to accrue. Beyond then, we could raise the rating if the
company's capital structure became more sustainable, likely as a
result of asset sales, and supported by lower debt levels and
substantially stronger operating performance with sustainable
revenue and earnings growth, and positive cash flow after lease
payments."
TOGETHER ASSET 2022-2ND1: S&P Raises Class F Notes Rating to 'BB-'
------------------------------------------------------------------
S&P Global Ratings raised to 'AA- (sf)' from 'A (sf)', to 'BBB+
(sf)' from 'BBB- (sf)', and to 'BB- (sf)' from 'B- (sf)' its credit
ratings on Together Asset Backed Securitisation 2022-2ND1 PLC's
class D-Dfrd, E-Dfrd, and F-Dfrd notes, respectively. At the same
time, S&P affirmed its 'AAA (sf)' rating on the class A notes, 'AA+
(sf)' rating on the class B-Dfrd notes, and 'AA (sf)' rating on the
class C-Dfrd notes.
The upgrades reflect an increase in credit enhancement for the
class D-Dfrd, E-Dfrd, and F-Dfrd notes, driven by the transaction's
sequential amortization and prepayments. This increase offsets the
deterioration in arrears performance since closing in May 2022. The
pool factor currently stands at 43%, based on the July 2025 pool
cut.
Loan-level arrears stand at 13.48%, up from 0.70% at closing.
Arrears of greater than or equal to 90 days are 6.47%, up from
0.00% at closing. Total arrears exceed our U.K. nonconforming index
for post-2014 originations, where total arrears stand at 12.8%.
Arrears of greater than or equal to 90 days are lower than our
index, which stood at 9.08%. This is reflected in our originator
adjustment, which S&P reduced since closing, as projected arrears
have now materialized, while arrears have risen in percentage terms
partially due to prepayments. The average constant prepayment rate
since closing is 20.6%. Total arrears amounts are now lower than
October 2024 levels.
Since closing, the weighted-average foreclosure frequency has
increased at all rating levels, reflecting the higher arrears.
There has been a reduction in the weighted-average loss severity at
all rating levels, due to a decrease in the weighted-average
current loan-to-value (LTV) ratio since closing. The lower current
LTV ratios are due to an increase in house prices. At the same
time, there has been a reduction in S&P's overvaluation assumptions
based on our observations of the U.K. market.
The required credit coverage has increased at all rating levels
since closing.
Portfolio WAFF and WALS
Base foreclosure
frequency component
Rating Credit for an archetypical U.K.
level WAFF (%) WALS (%) coverage (%) mortgage loan pool (%)
AAA 35.90 77.60 27.86 12.00
AA 27.80 67.95 18.89 8.00
A 23.52 46.26 10.88 6.00
BBB 19.24 31.37 6.04 4.00
BB 14.96 20.25 3.03 2.00
B 13.89 11.30 1.57 1.50
WAFF--Weighted-average foreclosure frequency.
WALS--Weighted-average loss severity.
Prepayments have significantly increased credit enhancement for the
asset-backed notes, which has more than offset the increase in
arrears since closing. At the same time, there has been a reduction
in our standard variable rate (SVR) haircuts, supported by
historical data which shows that the historical SVR setting policy
has been stable for a prolonged period of time. S&P said, "As a
result, our cash flow analysis indicated that the class D-Dfrd,
E-Dfrd, and F-Dfrd notes could withstand stresses at higher ratings
than those previously assigned. We therefore raised our ratings on
these notes."
The available credit enhancement on the class A notes is
commensurate with the rating assigned. S&P therefore affirmed its
'AAA (sf)' rating.
S&P said, "The rating on the class B-Dfrd notes is below the rating
indicated by our cash flow analysis. Our rating on this tranche
addresses the payment of ultimate interest and principal, and
interest can therefore 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 affirmed our 'AA+ (sf)' rating.
"The rating on the class C-Dfrd notes is below the rating indicated
by our cash flow analysis. Our rating on this tranche reflects the
relative amount of credit enhancement on these notes compared to
the note ranking immediately senior, and the relative position of
the notes in the capital structure. We therefore affirmed our 'AA
(sf)' rating.
"While we have raised our rating on the class D-Dfrd notes to 'AA-
(sf)' from 'A (sf)', the rating on this tranche is below the rating
indicated by our cash flow analysis. Our rating on these notes
reflects the relative amount of credit enhancement on these notes
compared to the note ranking immediately senior, and the relative
position of the notes in the capital structure.
"While we have raised our rating on the class F-Dfrd notes to 'BB-
(sf)' from 'B- (sf)', our rating on this tranche is below the
rating indicated by our cash flow analysis. The assigned rating
reflects the relative position of the notes in the capital
structure, the limited increase in the available credit enhancement
relative to more senior notes, and the notes' heightened
sensitivity to increases in arrears (in percentage terms) should
prepayments continue, even if arrears amounts remain unchanged.
"There are no caps on the ratings from our operational risk, legal
risk, and counterparty risk analysis."
Macroeconomic forecasts and forward-looking analysis
S&P expects U.K. inflation to remain above the Bank of England's 2%
target in 2025 and forecast a 3.9% year-on-year increase in house
prices in the fourth quarter of 2025.
The majority of the pool (86%) is paying a floating rate of
interest and so has been affected by interest rates significantly
above historical lows.
S&P said, "Given our current macroeconomic forecasts and
forward-looking view of the U.K. residential mortgage market, we
have performed additional sensitivities relating to higher levels
of defaults due to increased arrears. We have also performed
additional sensitivities with extended recovery timings due to the
delays we have observed in repossession owing to court backlogs in
the U.K.
"We therefore ran eight scenarios with increased defaults and
higher loss severities of up to 30%. The sensitivity analysis
results indicate a deterioration that is in line with the credit
stability considerations in our rating definitions."
Together Asset Backed Securitisation 2022-2ND1 PLC is backed by a
pool of second-lien mortgage loans, both owner-occupied and
buy-to-let, secured on residential properties in the U.K.
UNIBLOCK LTD: Opus Restructuring Named as Administrators
--------------------------------------------------------
Uniblock Ltd was placed into administration proceedings in the High
Court of Justice, Court Number: CR-2025-000107, and Jack Callow and
Garet David Wilson of Opus Restructuring LLP were appointed as
administrators on Sept. 30, 2025.
Uniblock Ltd specialized in construction installation.
Its registered office is at 1 Engine House, Marshall Yard,
Gainsborough, DN21 2NA
Its principal trading address is at Unit 5-7, Dunlop Way Queensway
Industrial Estate, Scunthorpe, DN16 3RN
The joint administrators can be reached at:
Jack Callow
Colin David Wilson
Opus Restructuring LLP
1 Radian Court
Knowlhill, Milton Keynes
Buckinghamshire MK5 8PJ
For further details, please contact:
Sakshi Mehta
Email: sakshi.mehta@opusllp.com
Tel No: 0117-428-8705
*********
S U B S C R I P T I O N I N F O R M A T I O N
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Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante,
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Editors.
Copyright 2025. All rights reserved. ISSN 1529-2754.
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