260325.mbx

260325.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 Wednesday, March 25, 2026, Vol. 27, No. 60 Headlines F R A N C E NORIA 2023: Moody's Lowers Rating on EUR16MM Class E Notes to B1 SULO GROUP: Moody's Affirms 'B2' CFR, Alters Outlook to Negative G E R M A N Y VEONET LENSE: Moody's Affirms 'B3' CFR, Outlook Remains Stable I R E L A N D GROSVENOR PLACE 10: S&P Assigns Prelim B-(sf) Rating to Cl. F Notes INVESCO EURO I: Moody's Cuts Rating on EUR12MM Cl. F Notes to Caa1 PALMER SQUARE 2026-1: S&P Assigns B- (sf) Rating to Class F Notes VOYA EURO III: Fitch Assigns 'B-sf' Final Rating to Class F-R Notes I T A L Y EFESTO BIDCO: S&P Alters Outlook to Stable, Affirms 'B-' ICR LOTTOMATICA GROUP: S&P Affirms 'BB' Rating, Alters Outlook to Pos. QUARZO SRL 2026-1: Moody's Assigns (P)Ba1 Rating to Series D Notes N E T H E R L A N D S VODAFONEZIGGO GROUP: S&P Affirms 'B+' LT Ratings, Outlook Now Neg. P O R T U G A L THETIS FINANCE NO. 2: S&P Raises F-Dfrd Notes Rating to 'BB (sf)' R U S S I A INSON JSIC: Fitch Affirms 'B' IFS Rating, Outlook Stable THERMAL POWER: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable S W I T Z E R L A N D CONSOLIDATED ENERGY: S&P Raises ICR to 'B-' on ST Debt Refinancing T U R K E Y [] Fitch Affirms 'BB-' LT IDR on 4 Turkish Banks, Outlook Positive U N I T E D K I N G D O M BREWDOG INT'L: AlixPartners Appointed as Joint Administrators BREWDOG PLC: AlixPartners Appointed as Joint Administrators BREWDOG RETAIL: AlixPartners Appointed as Joint Administrators DRAX GROUP: S&P Alters Outlook to Positive, Affirms 'BB+' LT ICR GLOBAL ACADEMIC: Fitch Lowers Long-Term IDR to 'B+', Outlook Stable LIBERTY GLOBAL: S&P Alters Outlook to Negative, Withdraws 'BB-' ICR PAGAZZI LIGHTING SERVICES: BTG Begbies Tapped as Administrator ZARA UK: S&P Upgrades Long-Term ICR to 'B', Outlook Stable - - - - - =========== F R A N C E =========== NORIA 2023: Moody's Lowers Rating on EUR16MM Class E Notes to B1 ---------------------------------------------------------------- Moody's Ratings has downgraded the ratings of two junior notes in Noria 2023. The rating action reflects worse than expected collateral performance and the decrease of credit enhancement available for the affected notes. Moody's affirmed the ratings of the notes that had sufficient credit enhancement to maintain their current ratings. EUR410M Class A Notes, Affirmed Aaa (sf); previously on Jan 22, 2025 Affirmed Aaa (sf) EUR30M Class B Notes, Affirmed Aa3 (sf); previously on Jan 22, 2025 Downgraded to Aa3 (sf) EUR10M Class C Notes, Affirmed Baa1 (sf); previously on Jan 22, 2025 Downgraded to Baa1 (sf) EUR9M Class D Notes, Affirmed Baa3 (sf); previously on Jan 22, 2025 Downgraded to Baa3 (sf) EUR16M Class E Notes, Downgraded to B1 (sf); previously on Jan 22, 2025 Downgraded to Ba3 (sf) EUR5M Class F Notes, Downgraded to Caa1 (sf); previously on Jan 22, 2025 Downgraded to B3 (sf) RATINGS RATIONALE The rating action is prompted by increased key collateral assumptions, namely the default probability (DP) assumption, due to worse than expected collateral performance, and the decrease of credit enhancement available for the affected notes. Revision of Key Collateral Assumptions As part of the rating action, Moody's reassessed Moody's expected default rate and recovery rate assumptions for the portfolio reflecting the collateral performance to date. The performance of the transaction has continued to deteriorate since the previous rating action in January 2025. While the 90 days plus arrears currently stand at 0.18% of current pool balance indicating a stable trend at a low level over the past year, in contrast the cumulative defaults continued to increased more than expected to 3.46% of original pool balance including replenishments up from 1.96% since December 2024. Moody's have increased the current default probability assumption to 5.26% from 5.0% of the current portfolio balance, which corresponds to a default probability assumption of 5.50% based on original portfolio balance. Moody's have maintained the recovery rate assumption at 30.0% and the portfolio credit enhancement assumption at 14.5%. Decrease in Available Credit Enhancement The increase in defaults combined with limited excess spread available in the transaction contributed to the drawing of the reserve fund which led to the reduction in the level of available credit enhancement. Specifically, the reserve fund amounts to EUR0.98 million as of February 2026 down from EUR5.8 million in December 2024. Despite the worse than expected collateral performance, the notes' principal continues to be redeemed pro rata, with triggers leading to a switch to sequential repayment of the notes upon the Principal Deficiency Ledger of Class G Notes reaching the threshold of 0.75% of the outstanding pool balance or the cumulative defaults reaching their incrementally increasing trigger values, 6.0% as of February 2026. For example, for the Class E Notes affected by the downgrade action, the available credit enhancement reduced to 5.37% as of February 2026 compared to 6.30% as of December 2024. The principal methodology used in these ratings was "Moody's Approach to Rating Consumer Loan-Backed ABS" published in July 2024. Factors that would lead to an upgrade or downgrade of the ratings: Factors or circumstances that could lead to an upgrade of the ratings include (1) performance of the underlying collateral that is better than Moody's expected, (2) an increase in available credit enhancement, and (3) improvements in the credit quality of the transaction counterparties. Factors or circumstances that could lead to a downgrade of the ratings include (1) an increase in sovereign risk, (2) performance of the underlying collateral that is worse than Moody's expected, (3) deterioration in the notes' available credit enhancement and (4) deterioration in the credit quality of the transaction counterparties. SULO GROUP: Moody's Affirms 'B2' CFR, Alters Outlook to Negative ---------------------------------------------------------------- Moody's Ratings affirmed the long-term B2 corporate family rating and the B2-PD probability of default rating of SULO Group SAS (Sulo). Concurrently, Moody's have affirmed the B2 rating to the EUR350 million senior secured term loan B due 2031 (term loan B) and the EUR60 million senior secured revolving credit facility due 2030 (RCF), with SULO SAS, a subsidiary of SULO Group SAS, as the borrower. The outlook on both entities was changed to negative from stable. The rating action reflects -- The weak performance in 2025 when the company materially missed its targets of EUR695 million of revenues (actual: around EUR610 million) and EBITDA pre-IFRS16 of EUR88 million (actual: EUR71 million). -- Moody's considers management's 2026 EBITDA guidance as ambitious as it predicates the return to revenue growth in addition to positive effects from the VCP and restructuring. Execution and downside risks have been reflected in the negative outlook. -- Management guides to 2026 mid-point EBITDA pre-IFRS16 of EUR89.5 million, or around EUR102 million post-IFRS16. Sulo will have to meet its guidance in order to remain compliant with its tightening headroom under its financial net leverage covenant. RATINGS RATIONALE Sulo's B2 CFR takes into account the company's leading positions in select European core markets for waste bins and containers, bailers and compactors; favourable growth prospects supported by higher recycling policy targets; a large and diversified customer base that includes municipalities, waste disposal companies and blue chip retailers; a growing share of recurring service and aftermarket-related revenues; and EBITDA uplift from restructuring measures and the VCP. The B2 CFR also reflects the small size of the business coupled with somewhat geographical and product concentration and the non-recurring nature of sales of bins and containers; the – relative to other manufacturers – low EBITA margin of 8.0%; the competitive public tendering processes of municipalities; Moody's-adjusted pro-forma gross leverage of 5.6x in 2025; expectation of debt-funded growth through bolt-on acquisitions to further consolidate the market and expansion into adjacent activities. The gross debt and modest leverage relative to many B2 rated manufacturers only partially offset the small size and limited visibility on forecasting. LIQUIDITY Sulo's liquidity is adequate. At December 2025 end, Sulo had cash of around EUR39 million and full availability of its EUR60 million RCF and unused overdraft capacity of EUR9.5 million. Moody's expects moderate free cash flow generation of EUR5 million to EUR10 million in 2026 supported by EBITDA improvements and capital spending needs of around EUR22 million. OUTLOOK The negative outlook reflects execution risks of the VCP implementation as well as risks to the anticipated growth. Failure to achieve the 2026 budget may result in tightening covenant headroom. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade the ratings if Sulo improves its business profile, including through geographical and product diversification, and larger scale; delivers sustainably higher profitability with EBITDA margins in the mid-teens (%); maintains gross debt/EBITDA below 3.5x on a sustainable basis; and FCF /debt in the high single digits. Moody's could downgrade the ratings absent EBITDA improvements that support sustainable deleveraging to below 5.0x; or if liquidity deteriorates. All metric references are Moody's-adjusted. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Manufacturing published in September 2025. 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. COMPANY PROFILE Sulo, headquartered in Paris (France), is a leading manufacturer of waste bins and containers, compacting solutions and provider of related services with a prominent presence in Europe. Revenues in 2025 amounted to around EUR610 million. The company's largest markets are France, the Nordics region, the Benelux countries, Germany and Spain as well as Central and Eastern Europe, Mexico, Chile and the Middle East. Funds of Latour Capital own 95% of Sulo, with the remainder held by management. In February 2025, Latour Capital bought out BpiFrance Investissement, who previously held 18% in Sulo. ============= G E R M A N Y ============= VEONET LENSE: Moody's Affirms 'B3' CFR, Outlook Remains Stable -------------------------------------------------------------- Moody's Ratings has affirmed Veonet Lense GmbH's (Veonet or the company) B3 corporate family rating and its B3-PD probability of default rating. Concurrently, Moody's affirmed the B3 ratings of the senior secured bank credit facilities borrowed by Veonet Lense GmbH. The outlook remains stable. RATINGS RATIONALE The rating action reflects Moody's expectations that Veonet will maintain credit metrics broadly consistent with the B3 rating despite a more challenging operating and regulatory environment in 2026, particularly in the UK following lower NHS cataract tariffs expected to take effect from April 2026. The rating is weakly positioned at the current level, with 2026 expected to be a weaker year for earnings. However, Moody's expects management's proactive response to the UK regulatory changes—including early cost-mitigation measures, a pause in greenfield expansion, and tighter capital allocation—to support a gradual recovery in profitability and credit metrics from 2027 onward. While execution risk remains elevated, these actions are expected to materially offset the tariff-related earnings decline, support moderately positive free cash flow generation, and contribute to a reduction in leverage below 8.0x after 2026. Liquidity is expected to remain at least adequate, supported by substantial undrawn committed facilities. Veonet's B3 corporate family rating is supported by its strong market positions in the countries where it operates, as well as its good diversification across multiple regulatory regimes in Europe, which mitigates the impact of adverse developments in any single jurisdiction. The rating also benefits from defensive demand characteristics, underpinned by favorable demographic trends that support volumes, high barriers to entry stemming from regulatory constraints, and relatively high profit margins compared to peers. At the same time, the rating remains constrained by Veonet's elevated leverage, which stood at 8.2x as of December 2025, up from 7.7x in 2024, the risk of debt-funded acquisitions given the company's acquisitive history, the fragmented nature of the markets in which it operates, and execution risks associated with its growth strategy, particularly in a more challenging regulatory environment. LIQUIDITY Veonet's liquidity is adequate, supported by EUR33 million of cash on the balance sheet as of December 2025, access to a EUR150 million senior secured revolving credit facility (RCF), of which EUR129 million was available at year-end, a fully available EUR50 million senior secured capital expenditure facility, and EUR25 million of availability under a second-lien capital expenditure facility. Moody's expects Veonet to generate moderately positive Moody's-adjusted free cash flow in 2026, driven by more cautious capital investment in response to a more challenging UK operating environment. Moody's further expects the company to maintain total liquidity of at least EUR200 million at all times over the next 12–18 months. The group does not intend to make any dividends distribution. STRUCTURAL CONSIDERATION The EUR930 million senior secured term loan B, GBP312 million senior secured term loan B, EUR150 million senior secured RCF and EUR50 million senior secured capital expenditure facility raised by Veonet Lense GmbH are rated B3, in line with the CFR. This reflects their pari passu ranking in the capital structure and the presence of the collateral package which is limited to shares, structural intercompany receivables and material bank accounts. Guarantors represent a minimum of 80% of the group's EBITDA. The company's debt structure also includes second lien debt outstanding (EUR25 million second lien capex and CHF110 million second lien notes). The B3-PD PDR, in line with the CFR, reflects Moody's assumption of a 50% recovery rate as is customary for capital structures with bank debt and a covenant-lite structure. OUTLOOK The stable outlook reflects Moody's expectations that over the next 12-18 months Veonet will gradually improve its credit metrics to the level commensurate with the B3 rating despite ongoing pressure from UK tariffs, supported by the group's cost-mitigation initiatives, geographic diversification, and a more cautious financial policy. The outlook further incorporates Moody's assumptions that leverage will not remain above 8.0x beyond 2026 and that liquidity will remain at least adequate throughout the outlook period. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Veonet's ratings could be upgraded if Moody's-adjusted debt to EBITDA decreases below 6.5x, Moody's-adjusted FCF to debt improves above 5%, and Moody's-adjusted EBITA/interest improves above 2.0x, all on a sustained basis. An upgrade would also be conditional on the company maintaining a financial policy targeted at deleveraging with no shareholder distributions. Downward pressure on the ratings could arise if the regulatory environment becomes more unfavorable, including if UK tariffs for cataract surgeries decline more sharply than currently anticipated or if further adverse regulatory developments occur in the UK or other jurisdictions, and/or the company is not able to deliver on its cost cutting programme leading to a material weakening in the company's profitability. Quantitatively, ratings could be downgraded if Moody's-adjusted debt/EBITDA is sustained above 8.0x, Moody's-adjusted EBITA/interest coverage weakens toward 1.0x, Moody's-adjusted free cash flow turns negative for a prolonged period, or if liquidity deteriorates. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Business and Consumer Services published in February 2026. 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. COMPANY PROFILE Veonet, headquartered in Munich, is a pan-European ophthalmology platform, operating around 300 clinics as of end 2025 across Germany, the UK (SpaMedica acquired in 2020), the Netherlands (EyeScan acquired in 2019), Switzerland (Vista acquired in 2019), Spain (Miranza acquired in 2022), Portugal and Ireland. The company focuses on outpatient cataract and intravitreal injection (IVI) procedures. Veonet generated EUR932 million of net sales for the 12 months that ended December 2025 pro-forma all closed acquisitions. ============= I R E L A N D ============= GROSVENOR PLACE 10: S&P Assigns Prelim B-(sf) Rating to Cl. F Notes ------------------------------------------------------------------- S&P Global Ratings assigned its preliminary credit ratings to Grosvenor Place CLO 10 DAC's class A, B, C, D, E, and F notes. At closing, the issuer will also issue unrated subordinated notes. Under the transaction documents, the notes will pay quarterly interest unless a frequency switch event occurs, upon which the notes will pay semiannually. This transaction has a two-year noncall period, and the portfolio's reinvestment period will end five years after closing. The preliminary ratings reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading assessed under our operational risk framework. -- The transaction's legal structure, which S&P expects to be bankruptcy remote. -- The transaction's counterparty risks, which S&P expects to be in line with its counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,590.87 Default rate dispersion 630.84 Weighted-average life (years) 4.75 Weighted-average life including reinvestment(years) 5.00 Obligor diversity measure 141.54 Industry diversity measure 23.77 Regional diversity measure 1.24 Transaction key metrics Total par amount (mil. EUR) 400.00 Defaulted assets (mil. EUR) 0 Number of performing obligors 161 Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 0.00 Target 'AAA' weighted-average recovery (%) 36.93 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 primarily comprises broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, we conducted our credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. "In our cash flow analysis, we modelled the EUR400 million par amount, the covenanted weighted-average spread of 3.50%, and the covenanted weighted-average coupon of 4.50%, and the target 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. "Until the end of the reinvestment period on March 27, 2031, the collateral manager may substitute assets in the portfolio as long as our CDO Monitor test is maintained or improved in relation to the initial ratings on the notes. This test looks at the total amount of losses that the transaction can sustain--as established by the initial cash flows for each rating--and compares that with the current portfolio's default potential plus par losses to date. As a result, until the end of the reinvestment period, the collateral manager may through trading deteriorate the transaction's current risk profile, if the initial ratings are maintained. "At closing, we expect the transaction's documented counterparty replacement and remedy mechanisms to adequately mitigate its exposure to counterparty risk under our counterparty criteria. "Following the application of our structured finance sovereign risk criteria, the transaction's exposure to country risk is limited at the assigned preliminary ratings, as the exposure to individual sovereigns does not exceed the diversification thresholds outlined in our criteria. "At closing, we expect the transaction's legal structure 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 the preliminary ratings are commensurate with the available credit enhancement for the class A to F notes. Our credit and cash flow analysis indicates that the available credit enhancement for the class B to E notes could withstand stresses commensurate 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 ratings on these notes. "Our credit and cash flow analysis indicates that the available credit enhancement for the class F notes could withstand stresses commensurate with a lower rating. However, we have applied our 'CCC' rating criteria and assigned a preliminary rating of 'B- (sf)' rating on this class of notes. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe that our preliminary ratings are commensurate with the available credit enhancement for class A to F 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 A to E 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 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, we have not made any specific adjustments in our rating analysis to account for any ESG-related risks or opportunities." Grosvenor Place CLO 10 DAC is a European cash flow CLO securitization of a revolving pool, comprising euro-denominated senior secured and unsecured loans and bonds issued mainly by speculative-grade borrowers. Ratings Prelim. Prelim. Amount Credit Class rating* (mil. EUR) enhancement (%) Interest rate§ A AAA (sf) 248.00 38.00 3mE +1.27% B AA (sf) 44.00 27.00 3mE +1.80% C A (sf) 24.00 21.00 3mE +2.45% D BBB- (sf) 28.00 14.00 3mE +3.30% E BB- (sf) 18.00 9.50 3mE +5.95% F B- (sf) 12.00 6.50 3mE +8.58% Sub NR 31.60 N/A N/A *The preliminary ratings assigned to the class A and B notes address timely interest and ultimate principal payments. The preliminary ratings assigned to the class C, D, E, and F notes address ultimate interest and principal payments. §The payment frequency switches to semiannual and the index switches to six-month Euro Interbank Offered Rate (EURIBOR) when a frequency switch event occurs. NR--Not rated. N/A--Not applicable. 3mE--Three-month Euro Interbank Offered Rate. INVESCO EURO I: Moody's Cuts Rating on EUR12MM Cl. F Notes to Caa1 ------------------------------------------------------------------ Moody's Ratings has downgraded the rating on the following notes issued by Invesco Euro CLO I Designated Activity Company: EUR12,000,000 Class F Senior Secured Deferrable Floating Rate Notes due 2031, Downgraded to Caa1 (sf); previously on Aug 14, 2025 Downgraded to B2 (sf) Moody's have also affirmed the ratings on the following notes: EUR214,400,000 (Current outstanding amount EUR89,378,464) Class A-1-R Senior Secured Floating Rate Notes due 2031, Affirmed Aaa (sf); previously on Aug 14, 2025 Affirmed Aaa (sf) EUR30,000,000 (Current outstanding amount EUR12,506,315) Class A-2-R Senior Secured Fixed Rate Notes due 2031, Affirmed Aaa (sf); previously on Aug 14, 2025 Affirmed Aaa (sf) EUR41,200,000 Class B-R Senior Secured Floating Rate Notes due 2031, Affirmed Aaa (sf); previously on Aug 14, 2025 Affirmed Aaa (sf) EUR26,400,000 Class C-R Senior Secured Deferrable Floating Rate Notes due 2031, Affirmed Aa3 (sf); previously on Aug 14, 2025 Affirmed Aa3 (sf) EUR25,600,000 Class D-R Senior Secured Deferrable Floating Rate Notes due 2031, Affirmed Baa1 (sf); previously on Aug 14, 2025 Affirmed Baa1 (sf) EUR22,400,000 Class E Senior Secured Deferrable Floating Rate Notes due 2031, Affirmed Ba2 (sf); previously on Aug 14, 2025 Affirmed Ba2 (sf) Invesco Euro CLO I Designated Activity Company, issued in December 2018 and refinanced in March 2021, is a collateralised loan obligation (CLO) backed by a portfolio of mostly high-yield senior secured European loans. The portfolio is managed by Invesco European RR L.P. The transaction's reinvestment period ended in January 2023. RATINGS RATIONALE The rating downgrade on the Class F notes is primarily a result of the deterioration in over-collateralisation ratios since the last rating action in August 2025. The affirmations on the ratings on the Classes A-1-R, A-2-R, B-R, C-R, D-R and E notes are primarily a result of the expected losses on the notes remaining consistent with their current rating levels, after taking into account the CLO's latest portfolio, its relevant structural features and its actual over-collateralisation ratios. The over-collateralisation ratios of Class E and Class F notes have deteriorated since the rating action in August 2025. According to the trustee report dated February 2026 [1] the Class E and Class F OC ratios are reported at 107.45% and 101.84% compared to July 2025 [2] levels of 109.64% and 105.38%, respectively. The key model inputs Moody's uses in Moody's analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on Moody's published methodology and could differ from the trustee's reported numbers. In Moody's base case, Moody's used the following assumptions: Performing par and principal proceeds balance: EUR242.6 million Defaulted Securities: EUR3.81 million Diversity Score: 30 Weighted Average Rating Factor (WARF): 3652 Weighted Average Life (WAL): 3.2 years Weighted Average Spread (WAS) (before accounting for Euribor floors): 3.86% Weighted Average Coupon (WAC): 3.41% Weighted Average Recovery Rate (WARR): 43.00% Par haircut in OC tests and interest diversion test: 4.03% The default probability derives from the credit quality of the collateral pool and Moody's expectations of the remaining life of the collateral pool. The estimated average recovery rate on future defaults is based primarily on the seniority of the assets in the collateral pool. In each case, historical and market performance and a collateral manager's latitude to trade collateral are also relevant factors. Moody's incorporates these default and recovery characteristics of the collateral pool into Moody's cash flow model analysis, subjecting them to stresses as a function of the target rating of each CLO liability it is analysing. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Collateralized Loan Obligations" published in October 2025. Counterparty Exposure: The rating action took into consideration the debt's exposure to relevant counterparties, such as account bank and swap provider, using the methodology "Structured Finance Counterparty Risks" published in May 2025. Moody's concluded the ratings of the debt are not constrained by these risks. Factors that would lead to an upgrade or downgrade of the ratings: The rated notes' performance is subject to uncertainty. The notes' performance is sensitive to the performance of the underlying portfolio, which in turn depends on economic and credit conditions that may change. The collateral manager's investment decisions and management of the transaction will also affect the notes' performance. Additional uncertainty about performance is due to the following: -- Portfolio amortisation: The main source of uncertainty in this transaction is the pace of amortisation of the underlying portfolio, which can vary significantly depending on market conditions and have a significant impact on the notes' ratings. Amortisation could accelerate as a consequence of high loan prepayment levels or collateral sales by the collateral manager or be delayed by an increase in loan amend-and-extend restructurings. Fast amortisation would usually benefit the ratings of the notes beginning with the notes having the highest prepayment priority. -- Recovery of defaulted assets: Market value fluctuations in trustee-reported defaulted assets and those Moody's assumes have defaulted can result in volatility in the deal's over-collateralisation levels. Further, the timing of recoveries and the manager's decision whether to work out or sell defaulted assets can also result in additional uncertainty. -- Long-dated assets: The presence of assets that mature beyond the CLO's legal maturity date exposes the deal to liquidation risk on those assets. Moody's assumes that, at transaction maturity, the liquidation value of such an asset will depend on the nature of the asset as well as the extent to which the asset's maturity lags that of the liabilities. Liquidation values higher than Moody's expectations would have a positive impact on the notes' ratings. In addition to the quantitative factors that Moody's explicitly modelled, qualitative factors are part of the rating committee's considerations. These qualitative factors include the structural protections in the transaction, its recent performance given the market environment, the legal environment, specific documentation features, the collateral manager's track record and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from Moody's other analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision. PALMER SQUARE 2026-1: S&P Assigns B- (sf) Rating to Class F Notes ----------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Palmer Square European CLO 2026-1 DAC's class A, B, C, D, E, and F notes. The issuer also issued unrated subordinated notes. Under the transaction documents, the rated notes will pay quarterly interest unless a frequency switch event occurs. Following this, the notes will permanently switch to semiannual payments. The portfolio's reinvestment period will end approximately 4.58 years after closing, while the noncall period will end 1.5 years after closing. The ratings reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which is bankruptcy remote. -- The transaction's counterparty risks, which are in line with S&P's counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,570.96 Default rate dispersion 635.44 Weighted-average life (years) 4.74 Obligor diversity measure 171.85 Industry diversity measure 24.26 Regional diversity measure 1.32 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 0.00 Actual 'AAA' weighted-average recovery (%) 36.19 Actual weighted-average spread (net of floors; %) 3.37 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 senior secured bonds. Therefore, we conducted our credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. "In our cash flow analysis, we used the EUR500 million target par amount, the covenanted weighted-average spread (3.30%), the covenanted weighted-average coupon (2.50%), and the target portfolio weighted-average recovery rates. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "Under our structured finance sovereign risk criteria, 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. "Our credit and cash flow analysis show that the class B, C, D, and E notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO will be in its reinvestment phase starting from the effective date, during which the transaction's credit risk profile could deteriorate, we capped our assigned ratings on these notes." The class A and F notes can withstand stresses commensurate with the assigned ratings. S&P said, "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe our ratings are commensurate with the available credit enhancement for the class A to F notes. "In addition to our standard analysis, to indicate how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we have also included the sensitivity of the ratings on the class A to E notes based on four hypothetical scenarios. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category--and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met--we have not included the above scenario analysis results for the class F notes." Environmental, social, and governance S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector. 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 activities. Accordingly, since the exclusion of assets from these activities 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." Palmer Square European CLO 2026-1 DAC is a European cash flow CLO securitization of a revolving pool, comprising euro-denominated senior secured loans and bonds issued by speculative-grade borrowers. Palmer Square Europe Capital Management LLC manages the transaction. Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate§ A AAA (sf) 310.00 38.00 Three/six-month EURIBOR plus 1.23% B AA (sf) 55.00 27.00 Three/six-month EURIBOR plus 1.65% C A (sf) 30.00 21.00 Three/six-month EURIBOR plus 1.95% D BBB- (sf) 35.00 14.00 Three/six-month EURIBOR plus 2.70% E BB- (sf) 22.50 9.50 Three/six-month EURIBOR plus 4.60% F B- (sf) 15.00 6.50 Three/six-month EURIBOR plus 7.80% Sub. Notes NR 39.30 N/A N/A *The ratings assigned to the class A, and B notes address timely interest and ultimate principal payments. The ratings assigned to the class C, D, E, and F notes address ultimate interest and principal payments. §The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. EURIBOR--Euro Interbank Offered Rate. Sub. notes--Subordinated notes. NR--Not rated. N/A--Not applicable. VOYA EURO III: Fitch Assigns 'B-sf' Final Rating to Class F-R Notes ------------------------------------------------------------------- Fitch Ratings has assigned Voya Euro CLO III DAC's reset notes final ratings, as detailed below. Entity/Debt Rating Prior ----------- ------ ----- Voya Euro CLO III DAC A XS2125178280 LT PIFsf Paid In Full AAAsf A-R XS3249929368 LT AAAsf New Rating B-1 XS2125180930 LT PIFsf Paid In Full AA+sf B-2 XS2125178959 LT PIFsf Paid In Full AA+sf B-R XS3249929525 LT AAsf New Rating C XS2125181151 LT PIFsf Paid In Full A+sf C-R XS3249929954 LT Asf New Rating D XS2125181409 LT PIFsf Paid In Full BBB+sf D-R XS3249930291 LT BBB-sf New Rating E XS2125181664 LT PIFsf Paid In Full BB+sf E-R XS3249930457 LT BB-sf New Rating F XS2125181748 LT PIFsf Paid In Full B+sf F-R XS3249930614 LT B-sf New Rating Transaction Summary Voya Euro CLO III DAC is a securitisation of mainly senior secured obligations (at least 90%) with a component of senior unsecured, mezzanine, second-lien loans, and high-yield bonds. Note proceeds have been used to redeem the existing notes, except the subordinated notes, and to fund a portfolio with a target par of EUR400 million. The portfolio is actively managed by Voya Alternative Asset Management LLC. The transaction has an approximately 4.5-year reinvestment period and an 8.5-year weighted average life (WAL) test. KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors at 'B'/'B-'. The Fitch-weighted average rating factor (WARF) of the identified portfolio is 24.9. High Recovery Expectations (Positive): At least 90% of the portfolio comprises senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-weighted average recovery rate (WARR) of the identified portfolio is 61.5%. Diversified Portfolio (Positive): The transaction includes six Fitch matrices. Two are effective at closing, corresponding to an 8.5-year WAL, two will be effective one year after closing, corresponding to a 7.5-year WAL and another two will be effective 1.5 years after closing, corresponding to a seven-year WAL. Each matrix set corresponds to two different fixed-rate asset limits at 5% and 10%. Switching to the forward matrices is subject to the reinvestment target par condition and a rating agency confirmation. The transaction includes various concentration limits, including a top 10 obligor concentration limit at 20% and a maximum exposure to the three-largest Fitch-defined industries in the portfolio at 40%. These covenants ensure the asset portfolio will not be exposed to excessive concentration. Portfolio Management (Positive): The transaction has a 4.5-year reinvestment period and includes reinvestment criteria similar to those of other European transactions. Fitch's analysis is based on a stressed-case portfolio with the aim of testing the robustness of the transaction structure against its covenants and portfolio guidelines. Cash Flow Modelling (Neutral): The WAL used for the transaction's Fitch-stressed portfolio and matrix analysis is 12 months less than the WAL covenant at the issue date. This is to account for the strict reinvestment conditions envisaged by the transaction after its reinvestment period. These include passing the coverage tests, Fitch WARF and Fitch 'CCC' tests, together with a progressively decreasing WAL covenant. These conditions, in Fitch's opinion, reduce the effective risk horizon of the portfolio during stress periods. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A 25% increase of the mean default rate (RDR) and a 25% decrease of the recovery rate (RRR) across all ratings of the identified portfolio would have no impact on the class A-R to C-R notes, would lead to downgrades of one notch each for the class D-R and E-R notes and to below 'B-sf' for the class F-R notes. Downgrades, which are based on the identified portfolio, may occur if the loss expectation is larger than assumed, due to unexpectedly high levels of default and portfolio deterioration. The class B-R, C-R, D-R, E-R and F-R notes each have a two-notch rating cushion due to the better metrics and shorter life of the identified portfolio than the Fitch-stressed portfolio. The class A-R notes have no rating cushion. Should the cushion between the identified portfolio and the Fitch-stressed portfolio be eroded due to manager trading or negative portfolio credit migration, a 25% increase of the mean RDR and a 25% decrease of the RRR across all ratings of the Fitch-stressed portfolio would lead to downgrades of up to four notches each for the class A-R to D-R notes, and to below 'B-sf' for the class E-R and F-R notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A 25% reduction of the mean RDR and a 25% increase in the RRR across all ratings of the Fitch-stressed portfolio would lead to upgrades of up to three notches each for the rated notes, except for the 'AAAsf' rated notes. Upgrades during the reinvestment period, which are based on the Fitch-stressed portfolio, may result from better-than-expected portfolio credit quality and a shorter remaining WAL test, allowing the notes to withstand larger-than-expected losses for the remaining life of the transaction. Upgrades after the end of the reinvestment period may result from stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. The majority of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and/or other Nationally Recognised Statistical Rating Organisations and/or European Securities and Markets Authority- registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk-presenting entities. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the rating agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations Fitch does not provide ESG relevance scores for Voya Euro CLO III DAC. In cases where Fitch does not provide ESG relevance scores in connection with the credit rating of a transaction, programme, instrument or issuer, Fitch will disclose any ESG factor that is a key rating driver in the key rating drivers section of the relevant rating action commentary. ========= I T A L Y ========= EFESTO BIDCO: S&P Alters Outlook to Stable, Affirms 'B-' ICR ------------------------------------------------------------ S&P Global Ratings revised its outlook to stable from positive and affirmed its 'B-' issuer credit rating on Efesto Bidco SpA and its 'B-' issue rating on the $825 million senior secured fixed-rate notes. The recovery rating on the notes is unchanged at '4', indicating its expectation of average recovery prospects (30%-50% rounded estimate: 45%). S&P's stable outlook reflects its expectations that Efesto Bidco SpA will sustain revenue and EBITDA growth, translating into leverage below 7x in 2026-2027, along with a funds from operations (FFO) cash interest coverage ratio above 2x and at least break-even free operating cash flow (FOCF) generation as result of business growth and improvements in profitability. Forgital continues to experience lower-than-expected volumes in its industrial division, as well as headwinds from negative foreign exchange rates and tariffs impacts that continue to weigh on profitability. In S&P's view, these factors will continue to strain Forgital's operating performance in 2026, leading to slower deleveraging than previously anticipated. On the other hand, Forgital should continue to benefit from strong demand in its aerospace division. Operating efficiency measures should also support pressured profitability through 2026. However, S&P now forecasts S&P Global Ratings-adjusted debt to EBITDA of about 7.0x in 2026, versus our previous forecast of about 5.0x-5.5x. Prolonged volume declines in Forgital's industrial division--coupled with headwinds from adverse exchange rates and tariffs--contributed to our outlook revision. Pressures in Forgital's Industrial division--which generates about 25% of the company's revenue (as of the first nine months of 2025)--translated into lower-than-expected profitability. S&P said, "We now estimate that Forgital's S&P Global Ratings-adjusted EBITDA margins were about 18% in 2025 versus previous expectations of 23.5%, including one-off costs. Weak macroeconomic conditions in Europe, where the majority of Forgital's industrial customers are located, contributed to a lower demand in the more cyclical end markets outside commercial aerospace. In addition, we understand that competitive pressures from low-cost Chinese suppliers have risen for some industrial applications. This because those players aggressively target European markets (after losing market share in the U.S. following changes to U.S. trade policies). We expect market conditions to stabilize in 2026 after bottoming out in 2025, and Forgital's organic growth should stay muted for the industrial division in 2026 although at lower levels than our previous base case." Forgital is mostly active in Europe, however, its revenue base is predominately in U.S. dollars, especially for aerospace sales -which represent the majority of Forgital's turnover (approximately 75%) - reflecting an industry-wide phenomenon. On the other hand, some cost items such as energy and labor are euro-denominated, creating a mismatch and a currency exposure. Based on S&P's assumptions of a weak U.S. dollar and absent any currency hedges, it expects Forgital's profitability to remain depressed by adverse foreign exchange rates in 2026. Finally, S&P's revised base case incorporates higher than expected U.S. tariff impact in 2026. This is because some of Forgital's contracted activities in the U.S. that relate to space contracts and industrial activities, are not exempt by the signed trade deal agreement between the EU and the U.S. Administration. S&P said, "Despite robust topline growth, we now expect Forgital's deleveraging trajectory will be slower than anticipated, with debt to EBITDA remaining elevated at above 6.5x. We now expect S&P Global Ratings-adjusted EBITDA margins to trend toward 20%-22% in 2026-2027, versus our previous expectation of 25%-27%. Lower profitability translates into higher S&P Global Ratings-adjusted leverage of more than 6.5x over the same period. Our adjusted debt reflects mostly Forgital's $825 million senior secured notes issued in 2025, which we assume will remain unchanged in the forecast period. However, given the group's private equity ownership, we cannot rule out potential further incremental debt that could be added for M&A. "Nevertheless, the aerospace end-market should continue to support Forgital's revenue and EBITDA expansion in 2026-2027. We expect Forgital will continue to benefit from its critical role as the sole forged rings manufacturer with integrated capabilities in Europe, especially in its core aerospace division. The company enjoys a leading market share within open die forged components, with presence in attractive and growing commercial programs such as the Trent XWB. Forgital recently expanded its business by winning new contracts on narrowbody engines, such as the LEAP 1A and PW1000GT, where we expect solid growth in 2026 supported by a record backlog. This should translate into group revenue growth of more than 7% in 2026-2027, even with muted growth in the industrial division. We believe that demand for new large aircraft engines should follow higher production rates, as guided by Airbus and Boeing, although we acknowledge there might be potential disruption to flight hours as result of the Middle East war. The group's activities are energy-intensive, but we understand management has proactively hedged most of its energy needs both in 2026-2027 that should defend the group's profitability from energy cost spikes as result of geopolitical tensions. S&P Global Ratings believes there is a high degree of unpredictability around the duration and scale of the Middle East war, and its potential effect on commodity prices, supply chains, economies, and credit conditions. As a result, our baseline forecasts carry a significant amount of uncertainty. As situations evolve, we will gauge the macro and credit materiality of potential shifts and reassess our guidance accordingly. "We expect Forgital to invest in capacity expansion to capture further growth in the aerospace market, with higher capital expenditure (capex) weighing on FOCF generation. We understand Forgital intends to increase its production capacity by investing in its existing facilities to capture business growth. As a result, we assume elevated levels of capex in the forecast period at about 7%-8% of sales. The company's working capital needs will also remain elevated, although management is proactively managing its cash collection as well as production cycles to maximize efficiency and inventory management. As a result, we expect lower cash consumption from working capital than in previous years, when volatile swings impeded the generation of free cash flow. Due to EBITDA expansion, we then expect some generation of free cash flow, although limited in 2026-2027. "Our rating on Forgital is supported by its ample liquidity and long-dated debt maturity profile. In 2025, management upsized the company's super senior (RCF) to EUR125 million. The facility is currently undrawn, and we don't expect it to be used despite liquidity needs in the next 12 months in working capital and capex to sustain the business growth. More importantly, Forgital's senior secured notes do not mature until 2032, and therefore there are no upcoming material debt maturities. "Our stable outlook reflects our expectations that Efesto Bidco SpA will sustain revenue and EBITDA growth translating into leverage below 7x in 2026-2027, along with FFO cash interest coverage ratio above 2x and at least break-even FOCF generation as result of business growth and improvements in profitability. "Although unlikely at this stage, we could downgrade Efesto if its EBITDA margins further deteriorate, leading to a capital structure that we deemed unsustainable, and FFO cash interest coverage dips below 1.5x. This could come from higher one-off costs than anticipated, underperformance across key business lines, or aggressive financial policies. We could also lower our rating if liquidity comes under significant strain. "We could raise our ratings if S&P Global Ratings-adjusted debt to EBITDA trends toward 5.5x and remains below that level thereafter, FFO cash interest coverage remains around or above 2.5x, and the company sustains positive FOCF." LOTTOMATICA GROUP: S&P Affirms 'BB' Rating, Alters Outlook to Pos. ------------------------------------------------------------------ S&P Global Ratings revised its outlook on Lottomatica Group SpA to positive from stable and affirmed its 'BB' ratings on Lottomatica and its debt instruments. The positive outlook reflects the possibility that S&P could raise its ratings on the group over the next 12months if it establishes a track record of recurring solid FOCF resulting in structural improvement in S&P Global Ratings-adjusted FOCF to debt above 15% while retaining S&P Global Ratings-adjusted leverage consistently below 3x. Lottomatica's strengthening position in the profitable Italian online gaming market supports top-line growth and S&P Global Ratings-adjusted EBITDA margin improvement of 37.0%-38.0% in 2026 from about 33% in 2025. The completion of the integration of PWO (formerly SKS365) leads to higher synergies and a marked contraction of nonrecurring integration costs, supporting FOCF after leases of about EUR400 million from 2026 compared with around EUR220 million in 2025, leading to an expected improvement of S&P Global Ratings-adjusted free operating cash flow (FOCF) to debt at around 19% in 2026 from 11% in 2025. The group's announced increase in share buybacks to EUR700 million over 2026-2027 is consistent with its public financial policy of keeping leverage between 2.0x-2.5x and commensurate with S&P Global Ratings-adjusted debt to EBITDA remaining below 3x. The new online concession regime in the Italian gaming market resulted in ongoing market consolidation, leading Lottomatica's online market share to increase to 31.3% at the end of 2025. In 2025, Lottomatica reported EUR2.2 billion revenue, up 12% on a reported basis compared with 2024, primarily driven by the full consolidation of the PWO (formerly known as SKS365) acquisition since May 1st 2024 and the growth of its profitable online franchise, accounting for 42% of the group's revenue in 2025. S&P said, "We acknowledge the ongoing consolidation process in the Italian online gaming market due to the new online concession regime implemented since 2025, which has introduced a required upfront payment of EUR7 million per each concession. This has resulted in a marked decline in market share from tail operators in the online market to 13.6% in 2025 from 15.8% at year-end 2024, with other leading players, such as Lottomatica and Flutter among others, winning shares. We expect this trend to continue in the short term, supporting Lottomatica's top-line growth in the range of 6%-7% in 2026 as the group is expected to regain some market share lost during the integration phase of PWO and to take advantage of higher number of sport matches due to the FIFA World Cup tournament in summer 2026." S&P said, "Following the completion of PWO integration, we expect S&P Global Ratings-adjusted EBITDA margin to improve to 37%-38% because of a material reduction in nonrecurring costs. This is a solid improvement compared with the about 33% posted in 2025, as the group faced elevated integration-related expenses and other non-recurring costs of around EUR89 million, which we expect should significantly reduce from 2026 as the management has indicated the conclusion of PWO integration and the full impact of synergies into the current year. In our base-case, we do not expect other large mergers and acquisitions (M&A) and integration-related activities over 2026-2028 and we forecast only limited one-time costs of EUR10 million-EUR20 million. Our profitability expectation is also supported by the improving revenue mix toward the online channel, which has superior profitability at 55.4% in 2025 as reported by the management, compared with 26.9% for the retail sport franchise and 24.0% for the gaming franchise in the same period. "We expect a more normalized level of capital expenditure (capex) from 2026 supporting Lottomatica's annual FOCF after leases of EUR400 million-EUR420 million. The recent change in the Italian online concession regime required Lottomatica to pay EUR35 million in 2025 for a nine-year extension (until 2034) of the concession on its five brands. It provides a long-term regulatory framework for gaming operators to operate legally, adhering to strict compliance requirements. This also means that the level of annual capex will reduce over the next few years to around EUR190 million-EUR200 million according to our estimates, compared with around EUR230 million in 2025, due to one-off integration investments and upfront payments for the online concessions. The bulk of the capex would be related to the concession capex of its retail network that continues to operate on an annual extension regime. However, there are ongoing discussions around the possibility that the Italian government could introduce a tender to grant new long-term concessions for a large one-time upfront fee. We will assess the credit implications of any changes in the regulatory regime, once implemented. We anticipate Lottomatica's established omnichannel presence, leading position, and financial strength should somewhat mitigate the impact. However, any significant upfront payment might result in a temporary drop in FOCF and spike in leverage. "In our base case we forecast Lottomatica's S&P Global Ratings-adjusted FOCF to debt will improve above 15% from 2026, consistent with a higher rating. However, The company lacks a track record of posting this level of FOCF due to historically higher interest burden and material nonrecurring costs. "The group has a public financial policy of leverage at 2.0x-2.5x which is consistent with an S&P Global Ratings-adjusted debt to EBITDA of below 3.0x. We believe Lottomatica's intention to repurchase shares for a total amount EUR700 million is commensurate with the group's financial policy, given the current headroom under its leverage ratio. In addition, the group conducted a EUR300 million share repurchase in 2025, with EUR173 million recognized as buyback liability to be paid in 2026. We anticipate the group will remain a consolidator in the Italian market and could look for expansion in other geographies. However, our base case does not include significant M&A transactions. If we were to observe the group undertaking debt-funded acquisitions, we would expect it to reduce its share repurchases, consistent with its maximum leverage target of 2.5x. "The positive outlook reflects the possibility that we could raise our ratings on Lottomatica if the company establishes a recurring solid FOCF generation supported by ongoing market share wins in its core Italian business, strengthened position in the highly profitable online channel, and normalized levels of nonrecurring costs and capital expenses. "We could revise the outlook to stable if Lottomatica is not able to demonstrate a sustainable improvement in FOCF due to higher-than-expected capex, or if the company incurred larger-than-expected acquisitions, translating into additional debt and elevated nonrecurring costs. Under this scenario, we would likely observe S&P Global Ratings-adjusted FOCF to debt remaining below 15% or S&P Global Ratings-adjusted leverage increasing above 3x. We believe this could also happen if we were to observe a deviation from the company's current financial policy. "We could raise the rating if the group achieves a structural improvement in S&P Global Ratings-adjusted FOCF to debt above 15% starting in 2026 while S&P Global Ratings-adjusted debt to EBITDA remains below 3.0x, which is consistent with the group's public long-term target of reported net leverage of 2.0x-2.5x." QUARZO SRL 2026-1: Moody's Assigns (P)Ba1 Rating to Series D Notes ------------------------------------------------------------------ Moody's Ratings has assigned the following provisional ratings to Notes to be issued by Quarzo S.r.l., Series 2026-1: EUR [ ]M Series A Asset Backed Floating Rate Notes due September 2043, Assigned (P)Aa2 (sf) EUR [ ]M Series B Asset Backed Floating Rate Notes due September 2043, Assigned (P)A3 (sf) EUR [ ]M Series C Asset Backed Floating Rate Notes due September 2043, Assigned (P)Baa3 (sf) EUR [ ]M Series D Asset Backed Floating Rate Notes due September 2043, Assigned (P)Ba1 (sf) Moody's have not assigned ratings to the subordinated EUR [ ]M Series J Asset Backed Fixed Rate Notes due September 2043 and EUR [ ]M Series R Asset Backed Variable Return Note due September 2043. RATINGS RATIONALE The Notes are backed by a 8-month revolving pool of unsecured consumer loans extended to obligors located in Italy by Compass Banca S.p.A. ("Compass", unrated), a company fully owned by Mediobanca S.p.A. (Baa1/P-2 Bank Deposits; Baa1(cr)/P-2(cr)). Compass is acting as originator and servicer of the loans. This represents the seventeenth issuance out of the Quarzo program. The portfolio consists of approximately EUR950 million of consumer loans as of March 10, 2026 pool cut-off date. The reserve fund will be funded to 1.3% of the Series A, B, C and D Notes' balance at closing and the total credit enhancement for the Series A Notes will be 15.26%. The ratings are primarily based on the credit quality of the portfolio, the structural features of the transaction and its legal integrity. The transaction benefits from various credit strengths such as: (i) a granular portfolio with good geographic diversification; (ii) the fact that all loans are fully amortising without any balloon payments; and (iii) extensive historical performance data with regards to defaults and recoveries provided by the originator. In addition, the transaction contains structural features such as: (i) an amortising liquidity reserve sized at 1.3% of Series A, B, C and D Notes balance; (ii) principal to pay interest mechanism for the Notes; (iii) a daily sweep of collections to the issuer account that partially mitigates the risk of commingling; and (iv) a significant excess spread at closing. Moody's notes that the transaction features some credit weaknesses such as: (i) the fact that the pool is revolving for 8 months, which could lead to an asset quality drift, although this is mitigated to some extent by the portfolio concentration limits; (ii) pro-rata payments on Classes A - J Notes from the end of the revolving period; (iii) the weighted-average asset yield can decrease to 10% during the revolving period, which has been considered in the cash flow modelling of the transaction; (iv) 63% of the pool are personal loans, which historically exhibited higher default rates than other consumer loan products; (v) an unrated servicer; and (vi) an interest rate mismatch as all the loans are fixed-rate, whereas the Notes are floating-rate (except for Classes J and R Notes). Various mitigants have been included in the transaction structure such as a back-up servicer facilitator, which is obliged to appoint a back-up servicer if certain triggers are breached, as well as performance triggers to stop the revolving period if breached. The interest rate mismatch is mitigated by a fixed-to-floating balance guaranteed interest rate swap hedging coupon payments for Classes A to D Notes. Pro-rata payment scheme will cease after the sequential redemption events are triggered. Moody's determined the portfolio lifetime expected defaults of 5.20%, expected recoveries of 20% and portfolio credit enhancement ("PCE") of 16% related to borrower receivables. The expected defaults and recoveries capture Moody's expectations of performance considering the current economic outlook, while the PCE captures the loss Moody's expects the portfolio to suffer in the event of a severe recession scenario. Expected defaults and PCE are parameters used by us to calibrate its lognormal portfolio loss distribution curve and to associate a probability with each potential future loss scenario in the ABSROM cash flow model to rate Consumer ABS. Portfolio expected defaults of 5.20% are lower than the EMEA Consumer Loan ABS average and are based on Moody's assessments of the lifetime expectation for the pool taking into account: (i) historical performance of the loan book of the originator, split by new and used vehicles, personal loans and other special purpose loans; (ii) benchmarking with other similar transactions; and (iii) other qualitative considerations, such as the 8-month revolving period and the related portfolio concentration limits. Portfolio expected recoveries of 20% are in line with the EMEA Consumer Loan ABS average and are based on Moody's assessments of the lifetime expectation for the pool taking into account: (i) historical performance of the loan book of the originator, split by new and used vehicles, personal loans and other special purpose loans; (ii) the unsecured nature of the consumer loans in Italy; and (iii) benchmarking with other similar transactions. PCE of 16% is lower than the EMEA Consumer Loan ABS average and is based on Moody's assessments of the pool which is mainly driven by: (i) evaluation of the underlying portfolio, complemented by the historical performance information as provided by the originator; and (ii) the relative ranking to originator peers in the EMEA Consumer Loan market. The PCE level of 16% results in an implied coefficient of variation ("CoV") of 51.78%. The principal methodology used in these ratings was "Moody's Approach to Rating Consumer Loan-Backed ABS" published in July 2024. Factors that would lead to an upgrade or downgrade of the ratings: Factors that could lead to an upgrade of the ratings include: (i) improvement of Italy´s local currency country ceiling (LCC), or significantly better pool performance than expected. Factors that could lead to a downgrade of the ratings include: (i) an increase in Italian's sovereign risk; (ii) increased counterparty risk leading to potential operational risk of (a) servicing or cash management interruptions and (b) the risk of increased swap linkage due to a downgrade of a swap counterparty ratings; or (iii) performance of the pool being worse than Moody's expectations. ===================== N E T H E R L A N D S ===================== VODAFONEZIGGO GROUP: S&P Affirms 'B+' LT Ratings, Outlook Now Neg. ------------------------------------------------------------------ S&P Global Ratings revised its outlook on VodafoneZiggo Group B.V. to negative from stable and affirmed its 'B+' long-term ratings on the company and secured debt and its 'B-' rating on the unsecured debt. S&P said, "The negative outlook indicates that we could lower the ratings if we no longer believe the company's operating performance will improve in line with expectations for 2027, resulting in adjusted debt to EBITDA staying above 6x and FOCF to debt remaining in low single digits; we would only lower the rating on VodafoneZiggo if the group credit profile (GCP) on the parent company, Liberty Global, were revised to 'b+'. "We now forecast VodafoneZiggo's adjusted EBITDA to weaken further (by about 7%) in 2026, due to elevated investments in commercial activities and network resilience, with adjusted leverage (debt to EBITDA) at about 6.4x, and free operating cash flow (FOCF) reducing to about EUR220 million from about EUR340 million in 2025. "Although we expect adjusted leverage to improve to below 6.0x by 2027 on lower operating expenses under leaner operations and higher revenue on continued organic growth in mobile and business-to-business (B2B), we believe this hinges on the company's ability to maintain its customer base amid increasing competition from fiber and execute on planned asset sales; yet we note net additions on fixed broadband were still negative in fourth-quarter 2025, though improving sequentially last year." VodafoneZiggo's customer retention efforts and front book repricing are expected to lead to a spike in adjusted leverage. S&P now forecasts the company's revenue will decline marginally and adjusted EBITDA will weaken by about 7% in 2026 following about 7% decline in adjusted EBITDA in 2025. This reflects the impact of strategic changes aimed at stabilizing VodafoneZiggo's fixed-line customer base in the Netherlands' highly competitive and promotional telecommunications market, along with increased investment of about EUR100 million--split equally between operating expenditure and capital expenditure (capex)--in commercial initiatives and network reliability. This, alongside the impact of front book repricing, will lead to a decline in the S&P Global Ratings-adjusted EBITDA margin to 42% in 2026, from 45% in 2025, and adjusted leverage increasing to 6.4x in 2026 from 6.1x in 2025, which crosses the 6.0x threshold for our stand-alone credit profile (SACP) on VodafoneZiggo. A capex investment of about EUR50 million in network resilience is unlikely to reoccur in 2027. S&P said, "We think the weaker-than-expected performance in 2026 will likely be temporary, in view of the company's strategic plans, but improvement depends heavily on the company's ability to stabilize its fixed customer base and improve margins. We think the net loss of customers will likely stabilize during 2026 as VodafoneZiggo's prices become more competitive. We note that net additions on fixed broadband were still negative in fourth-quarter 2025, although improving throughout last year. At the same time, the company's continued push for fixed-to-mobile convergence and higher revenue from its sports content should keep revenue steady over the medium term. In addition, the announced upgrade of the network to DOCSIS 4.0 could help VodafoneZiggo offer speeds largely similar to fiber-based offerings by competitors like KPN. Overall, we believe this should support organic low-single-digit revenue growth from 2027. Furthermore, we expect operating expenses to reduce from 2027, helped by cost savings from AI investments. This, along with synergies from Ziggo Group B.V. should result in improvement in the adjusted EBITDA margin to about 44% by 2027. Yet, we consider that material customer losses could continue in the coming quarters or the adjusted EBITDA margin may not improve in line with our expectations. This will result in credit metrics remaining inconsistent with our 'b+' assessment of the company's SACP for a prolonged period. "The company's commitment to deleverage in the medium term supports our rating. We understand that Liberty Global has publicly communicated its plan to spin off to its own shareholder and list in 2027 Ziggo Group B.V., the holding company that consolidates Liberty Global's equity interest in Telenet and VodafoneZiggo. To list the company, Liberty Global announced its intention to reduce company defined leverage at these two subsidiaries to about 4.5x, which translates into about 5x on an S&P Global Ratings-adjusted basis. We understand planned asset sales are expected to support deleveraging, since Liberty Global has announced its intention of selling the tower company and other properties at VodafoneZiggo. We have not modelled these asset sales in our forecast because there is no definitive sale agreement. That said, if these asset sales were to materialize and proceeds were used to reduce debt, we expect a material improvement in leverage and FOCF. As such, these potential asset sales and prospective deleveraging represent potential upside to our base case. "We assess Telenet and VodafoneZiggo as insulated from Liberty Global, with a potential to be rated one-notch higher than the GCP on parent, if their standalone rating is higher than the parent. This assessment is based on the clear separation of financial and operational structures between these entities and Liberty Global. Specifically, funds are not commingled between the operating companies, and there are no cross-default provisions or other linkages between the credit silos, which are effectively ring-fenced from one another. Furthermore, all operating companies function independently, and the absence of a cash pooling mechanism--a consequence of Vodafone's significant minority shareholding--reinforces this separation. A potential spin-off from the group within the next 12-24 months further supports this assessment. "The negative outlook indicates that we could lower the ratings if we no longer expect operating performance to improve materially in 2027, in line with our base case." S&P could lower the ratings if it forecasts adjusted debt to EBITDA to remain higher than 6.0x and FOCF to debt in low single digits in 2027. This could occur if the company's operating performance fails to improve due, for example, to: -- Weaker-than-expected customer trends in 2026, including if the expected improvement in fixed-line subscriber performance does not materialize. -- Ongoing depressed margins due to sustained pressure on average revenue per user or a larger-than-expected cost base. S&P said, "For us to lower the rating on VodafoneZiggo, the credit profile of parent Liberty Global Ltd. would need to deteriorate sufficiently for us to revise our GCP downward. "We could revise the outlook to stable if adjusted leverage improves to lower than 6.0x and FOCF to debt improves beyond low single digits. This could materialize if VodafoneZiggo improves its operating performance, including stabilization of the subscriber base and improved margins in line with our forecasts. "Additionally, we could also revise the outlook to stable if the company achieves material deleveraging, such as through asset sales." =============== P O R T U G A L =============== THETIS FINANCE NO. 2: S&P Raises F-Dfrd Notes Rating to 'BB (sf)' ----------------------------------------------------------------- S&P Global Ratings raised its credit ratings on Ares Lusitani - STC, S.A. (Thetis Finance No. 2)'s class A notes to 'AAA (sf)' from 'AA+ (sf)', class B notes to 'AA (sf)' from 'AA- (sf)', class C notes to 'AA- (sf)' from 'A (sf)', class D-Dfrd notes to 'A (sf)' from 'BBB (sf)', class E-Dfrd notes to 'BBB (sf)' from 'B (sf)', and class F-Dfrd notes to 'BB (sf)' from 'B- (sf)'. S&P said, "While our ratings on the class A to C notes address the timely payment of interest and the ultimate payment of principal, our ratings on the class D-Dfrd to F-Dfrd notes address the ultimate payment of interest (even when the tranche is the most senior) and the ultimate repayment of principal by the legal maturity date. In this transaction, there is no mechanism to accrue interest on deferred interest. "The rating actions follow our review of the transaction's performance and the application of our criteria. They reflect our assessment of the payment structure according to the transaction documents. "We analyzed the transaction's credit risk under our global auto ABS criteria. Loans more than 30 days in arrears continue to remain low, at 0.80%. We consider Ares Lusitani's cumulative gross losses to be below our previous assumptions. Consequently, we lowered our base-case gross loss assumption to 6.00% from 11.52%. We then recalculated our base-case gross loss assumption to reflect defaults to date and the portfolio's current size, resulting in an 8.5% base-case gross loss on the loans' current outstanding balance. Our multiples, base-case recovery rate, and recovery rate haircuts remain unchanged." Table 1 Haircuts above the base case Rating Haircut (%) AAA 42.00 AA 32.00 A 24.00 BBB 19.00 BB 14.00 B 9.00 The transaction closed in July 2021 and had an initial three-year revolving phase, which ended in July 2024. Following the revolving period, the transaction entered an initial sequential amortization period, which ended when the rated notes' credit enhancement reached 1.2 times the level of credit enhancement at closing in February 2025. The transaction is currently amortizing pro rata, provided that the sequential redemption events--primarily driven by the cumulative gross loss ratios--do not take place. Consequently, the available credit enhancement has remained stable for all the rated notes since February 2025, considering subordination and the cash reserve. As of the January 2026 payment date, the pool balance has decreased to EUR504 million from EUR840 million at closing, bringing the current pool factor (the outstanding collateral balance excluding defaults as a proportion of the original collateral balance) to approximately 60%. The liquidity reserve is at its target level of EUR2.60 million, according to our December 2025 investor report. Table 2 Credit assumptions Current Previous review review (March 2025) Gross loss base case (%) 6.00 11.52 Gross loss base case to the current balance (%) 8.54 12.89 Recovery base case (%) 40.00 40.00 Gross loss multiple ('AAA') 4.75 4.75 Gross loss multiple ('AA') 3.75 3.75 Gross loss multiple ('AA-') 3.42 3.42 Gross loss multiple ('A') 2.75 2.75 Gross loss multiple ('BBB') 1.88 1.88 Gross loss multiple ('BB') 1.63 1.63 Stressed recovery rate ('AAA') (%) 23.20 23.20 Stressed recovery rate ('AA') (%) 27.20 27.20 Stressed recovery rate ('AA-') (%) 28.28 28.28 Stressed recovery rate ('A') (%) 30.40 30.40 Stressed recovery rate ('BBB') (%) 32.40 32.40 Stressed recovery rate ('BB') (%) 34.40 34.40 S&P said, "Our operational and legal analyses are unchanged since closing. We consider that the transaction documents adequately mitigate exposure to counterparty risk from Credit Agricole Corporate and Investment Bank S.A., as the issuer's general account bank provider; from Citibank Europe PLC, as the payment account bank provider; and from Credit Agricole Consumer Finance S.A., as the liquidity facility provider, up to an 'AAA' rating level, respectively; and from Credit Agricole Consumer Finance S.A., as swap counterparty, up to an 'AA' rating level, based on our revised counterparty criteria. "Our cash flow analysis indicates that the available credit enhancement for class A to F-Dfrd notes is sufficient to withstand the credit and cash flow stresses that we apply at higher rating levels than those currently assigned. The improved cash flow results reflect the pool's strong and stable credit quality, which resulted in a decrease in our gross default base case. We therefore raised our ratings on all classes of notes. "Although the rated notes have a counterparty cap at 'AA (sf)', we have run additional sensitivity tests to assess the impact of removing the swap on the ratings. The class A notes are able to pass our stresses at the 'AAA' rating level without giving credit to the swap. Consequently, given its high level of credit enhancement, at 48%, we raised our ratings on this class of notes to 'AAA (sf)' from 'AA+ (sf)'. "We consider the transaction's resilience in case of additional stresses to some key variables, in particular defaults and recoveries. "In our view, the borrowers' ability to pay their auto loans is highly correlated with macroeconomic conditions, particularly unemployment and, to a lesser extent, consumer price inflation and interest rates. Our current unemployment rate forecast for Portugal is 2.2% for 2026 and 1.8% for 2027, and our inflation forecast is 2.1% in 2026 and 2.0% in 2027. "We therefore ran additional scenarios with increased gross defaults by up to 30% and reduced expected recoveries by up to 30%. The results of this sensitivity analysis indicate a deterioration of no more than six notches on the notes, which is in line with the credit stability considerations in our rating definitions." =========== R U S S I A =========== INSON JSIC: Fitch Affirms 'B' IFS Rating, Outlook Stable -------------------------------------------------------- Fitch Ratings has affirmed Uzbekistan-based INSON JSIC's Insurer Financial Strength (IFS) Rating at 'B'. The Outlook is Stable. The rating mainly reflects INSON's limited operating scale, weak capitalisation and modest financial performance. Key Rating Drivers Small Uzbek Insurer: Fitch's assessment of INSON's company profile reflects the entity's moderate competitive position in Uzbekistan. This is supported by an adequate franchise and reasonable diversification but is constrained by a small market share (9M25: 2.7% by net premiums) and low operating efficiency. INSON's business risk profile is dampened by its evolving strategy, which assumes aggressive expansion and hence could lead to risk accumulation. INSON's large exposure to potentially volatile financial risk insurance is credit-negative, although this is decreasing. Weak Capitalisation: Fitch assesses INSON's capital position as 'Weak' under its Global Prism model for end-2024. Based on regulatory accounts, Fitch estimates the end-2025 Prism score to have remained 'Weak', despite new equity injections. Its assessment is constrained by low internal capital generation and large IT infrastructure investments recognised as intangible assets, which Fitch deducts from capital. The regulatory solvency margin was a low 108% at end-2025. INSON will likely rely on capital injections to meet increasing statutory minimum requirements, although Fitch expects shareholders to support the company. Modest Profitability: IFRS-based return on equity (ROE) was a weak 1% in 2024 (2023: 3%). INSON's underwriting result was negatively affected by high acquisition and administrative expenses, while its positive earnings were driven by investment income. Fitch estimates ROE was a higher 6% in 2025, based on statutory accounts, but this is greatly influenced by a one-off lumpy recovery income booked upfront. Over time, higher insurance sales through online channels, supported by ongoing IT investments, could boost profitability, although this remains to be proven. High Asset Risk: Fitch considers INSON's investment and asset risk to be high. The risk stems from sizeable recourse/subrogation receivables (equal to about 50% of equity at end-2025), which were recognised in 2025 and may not be fully recoverable. Positively, risky assets, mainly comprising investments in affiliates, fell to a manageable 11% of equity at end-2025 (2024: 24%). The bulk of the investment portfolio is liquidity held with local banks, rated in the 'B' or 'BB' categories. Limited Use of Reinsurance: INSON makes limited use of reinsurance, as indicated by a high net/gross premium ratio. The reinsurers panel is reasonably diversified and equally split between local insurance companies and large, highly rated international reinsurers. INSON is exposed to significant catastrophe risk, in line with local peers. The company lacks sufficient catastrophe coverage. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Significant erosion of the capital position on a sustained basis Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Significant improvement in the company profile assessment, shown by larger operating scale, better diversification and a lower business risk profile - Improvement in the capital position, alongside better asset quality of the investment portfolio ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- INSON JSIC LT IFS B Affirmed B THERMAL POWER: Fitch Affirms 'BB' Long-Term IDR, Outlook Stable --------------------------------------------------------------- Fitch Ratings has affirmed Uzbekistan-based electricity generation company Thermal Power Plants Joint Stock Company's (TPP) Long-Term Issuer Default Rating (IDR) at 'BB' with a Stable Outlook. TPP's rating is equalised with its parent's, Uzbekistan (BB/Stable), under Fitch's Government-Related Entities (GRE) Rating Criteria, reflecting that almost all of TPP's debt is secured by government guarantees or provided by the state. TPP's Standalone Credit Profile (SCP) remains weak at 'ccc' due to low cash flow visibility driven by short-term tariffs, a weakened competitive position and high leverage. Positively, the SCP reflects TPP's still large market share compared with other market participants and Fitch-expected positive free cash flow (FCF) due to capex moderation. Key Rating Drivers Rating Equalised with Uzbekistan: About 97% of TPP's debt at end-1H25 (95% at end-2024) was secured by state guarantees or provided by the state via the Ministry of Finance, which on-lends funds from international financial institutions to the company, or by Uzbekistan's Fund for Reconstruction and Development. The remaining debt is with a large state-controlled bank and two commercial banks. Under the GRE criteria, the government guaranteeing more than 75% of debt leads to equalisation of the ratings. Talimarjan Transaction Complete: In May 2025, TPP completed the sale of an 80% stake in a newly created company, which owned 900MW gas-fired power plant at Talimarjan TPP, to UAE investors. The asset transfer value includes the cash payment and the UAE investors' obligation to service the loans used to build the transferred assets until their final maturity. These loans will remain consolidated at TPP. Talimarjan Transaction Weighs on Leverage: TPP's debt doubled to UZS30.6 trillion (USD2.4 billion) at end-1H25 from end-2024 due to the re-consolidation of the Talimarjan power plant's debt. A part of the increase was due to loans associated with the sold assets, and will be serviced by the non-consolidated project company. The other part is debt used to finance the construction of 1.1GW new capacity at Talimarjan plant, and will be serviced by TPP. New Capacities Improve Cash Flow: Fitch expects the commissioning of 1.1GW of new efficient capacity at Talimarjan power plant in 2Q26 to improve TPP's cash flow generation. TPP expects the new units' EBITDA margin to be 40%-45%, significantly higher than that of the whole group. New capacities are unrelated to the sale of existing power units of Talimarjan power plant to UAE investors. High Asset Concentration: Fitch forecasts that two power plants, Talimarjan and Turakurgan, will generate about 80% of TPP's EBITDA over 2026-2028. The high asset concentration weighs on TPP's business profile assessment. 'ccc' SCP: The SCP reflects its expectations that funds from operations leverage will remain above its positive sensitivity of 7.5x over 2026-2028. It also accounts for an opaque regulatory framework and short-term tariffs, concentrated asset base and uncertainty over the company's strategy. Positive FCF, Weak Visibility: Fitch forecasts TPP's FCF will become moderately positive over 2026-2028 on the back of increased EBITDA following new assets commissioning and moderation of capex. Nevertheless, cash flow visibility is low. Regulatory Decisions Drive Financials: All of TPP's revenue and about 70%-80% of costs are regulated, underlining the influence of regulatory decisions on tariffs on its financials. Regulated costs include the purchase of gas and fuel oil from other state-owned enterprises. Almost all regulated electricity revenue comes from a single state-owned buyer, Uzenergosotish JSC. Electricity tariffs for the majority of TPP power plants rose 7% from May 2025. TPP expects further tariff increase in 2026. 'Very Strong' Responsibility to Support: Under its GRE criteria, Fitch assesses decision-making and oversight, and precedents of support as 'Very Strong'. The Uzbek government owns 100% of TPP's shares, approves the company's strategy and capex and sets its tariffs. TPP is also listed among the strategically important and systemic enterprises in Uzbekistan. The government directly provides or guarantees almost all of the company's debt and provides liquidity support through the extension of loan repayments or budget loans. Other forms of support include equity injections and dividend exemptions. 'Strong' Preservation of Government Policy: A default by TPP may temporarily endanger the continued provision of services, including electricity and heat production, due to its social function, still large market share of about 20% and a large workforce. Contagion risk is 'Not Strong Enough' as, despite large outstanding debt (USD2.4 billion at end-1H25), most of it is incurred with or on-lent by the state. TPP is not present in the eurobond market. Peer Analysis The ratings of Uzbekistan-based electricity distribution and sales company Regional Electrical Power Networks JSC (REPN, BB/Stable; SCP: ccc) and Uzbekhydroenergo JSC (BB/Stable; SCP: b+) are also equalised with the sovereign's. Similar to TPP, nearly all of REPN's debt is provided by the state or secured by government guarantees. For Uzbekhydroenergo, the share of guaranteed debt is gradually decreasing, approaching 75% by 2026-2027. The ratings of GREs JSC Almalyk Mining and Metallurgical Complex (BB/Stable; SCP: b+) and JSC Uzbekneftegaz (BB/Stable; SCP: b) are also equalised with Uzbekistan's, due to strong government links. Among international peers, Kazakhstan Electricity Grid Operating Company's (/Stable; SCP: bbb-) IDR is notched up once from its SCP for strong links with Kazakhstan (BBB/Stable). TPP's links with the state are similar to those of JSC Samruk-Energy (BB+/Stable; SCP: b+). Samruk-Energy's rating reflects a 'top-down minus two' notch approach from Kazakhstan. Samruk-Energy's links with the state strengthened after Kazakhstan committed to providing guarantees for Samruk-Energy's debt to fund gasification projects, leading to an average 60% share of guaranteed debt over 2025-2028. On a standalone basis, TPP has a weaker business profile than Samruk-Energy and Limited Liability Partnership Kazakhstan Utility Systems (BB-/Negative) as Kazakh peers benefit from better cash collections and higher revenue visibility. Fitch’s Key Rating-Case Assumptions - Principal and interest on debt related to the sold assets at Talimarjan are serviced by UAE investors - Electricity tariff growth close to inflation over 2026-2028 - Uzbekistan soum gradually depreciating to about USZ13,100 per US dollar by end-2028 from about 12,000 at end-2025 - Capex on average at about UZS1.1 trillion (USD86 million) a year over 2026-2028 - No dividends Corporate Rating Tool Inputs and Scores Fitch scored the issuer as follows, using its Corporate Rating Tool (CRT) to produce the Standalone Credit Profile (SCP): - Business and financial profile factors (assessment, relative importance): Management (b+, Lower), Sector Characteristics (b+, Moderate), Market and Competitive Positioning (bb+, Lower), Diversification and Asset Quality (b+, Moderate), Company Operational Characteristics (b, Higher), Profitability (b+, Moderate), Financial Structure (ccc-, Higher), and Financial Flexibility (ccc, Moderate). - The quantitative financial subfactors are based on custom CRT financial period parameters: 40% weight for the forecast year 2025, 30% for the forecast year 2026, 20% for the forecast year 2027 and 10% for the forecast year 2028. - B+ to CC considerations apply in its analysis and result in no adjustment. - The Governance assessment of 'Some Deficiencies' results in no adjustment. - The Operating Environment assessment of 'b' results in no adjustment. - The SCP is 'ccc'. To derive the IDR: - Application of Fitch's GRE Rating Criteria results in a(n) equalized - single factor approach. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - A sovereign downgrade - State-guaranteed debt falling below 75% of total debt, assuming unchanged SCP and government links Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - A sovereign upgrade - Stronger cash collections, better visibility on strategy, a more transparent and predictable operating and regulatory framework (including implementation of multi-year tariffs), together with a stronger financial profile (funds from operations gross leverage below 7.5x on a sustained basis) could be positive for the SCP Liquidity and Debt Structure Fitch expects the government will continue to support TPP's liquidity by providing budget loans, guaranteeing its debt or negotiating credit lines. At 1H25, TPP had UZS0.7trillion (USD52 million) of cash and equivalents against short-term debt of UZS5.1 trillion (about USD400 million). In 2H25, TPP received cash compensation for Talimarjan assets. Fitch expects moderately positive FCF from 2026 due to capex moderation. At end-1H25, about 86% of TPP's debt was provided by the state through direct loans from the Ministry of Finance, on-lending funds from Japanese International Cooperation Agency and European Bank for Reconstruction and Development to the company, or through Uzbekistan's Fund for Reconstruction and Development. Another 11% was from state-owned banks under state guarantees. At end-1H25, almost all debt was in foreign currencies, including US dollars, euros and Japanese yen, versus all revenue in soum, with no FX hedging in place. Issuer Profile TPP is a 100% state-owned company, whose principal activity is generation of electricity and heat in Uzbekistan, predominantly at its gas-fired power units. Public Ratings with Credit Linkage to other ratings TPP's IDR is linked to Uzbekistan's rating. 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. Climate Vulnerability Signals The Climate.VS for TPP is 59 for 2035. TPP derives almost all revenue from electricity generation at power plants fired by gas and fuel oil, which have high carbon dioxide emissions. The key transition risks arise from potential future changes in regulation for carbon emissions in Uzbekistan, as well as potential tightening of financing terms for sectors with high carbon footprints. These risks do not have a material influence on the rating, as there is no market for carbon emissions in Uzbekistan. Over 75% of the country's electric installed capacity uses carbon-intensive technologies, mainly natural gas. However, the government actively develops generation from renewable sources. TPP plans to reduce carbon exposure mostly by investing in modern combined cycle gas turbine units. ESG Considerations TPP has an ESG Relevance Score of '4' for Financial Transparency due to due to delays in the publication of IFRS accounts compared with international best practice, 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 Prior ----------- ------ ----- Thermal Power Plants Joint Stock Company LT IDR BB Affirmed BB ===================== S W I T Z E R L A N D ===================== CONSOLIDATED ENERGY: S&P Raises ICR to 'B-' on ST Debt Refinancing ------------------------------------------------------------------ S&P Global Ratings removed the issuer credit and issue ratings on methanol and ammonia producer Consolidated Energy Ltd. (CEL) from CreditWatch positive, where they'd been placed on Feb. 18, 2026, and raised them to 'B-' from 'CCC+'. The stable outlook reflects S&P's expectation that the company will navigate industry and economic challenges with no significant debt maturities until 2028, though it remains dependent on favorable operating and economic conditions. On March 4, 2026, CEL secured a $330 million add-on to its existing $712 million term loan B due 2030 and fully repaid its 6.5% senior unsecured notes due 2026. This transaction also freed up approximately $97 million in committed credit lines, bringing total available funds to $140 million, further improving liquidity. The refinancing of CEL's 6.5% senior unsecured notes due 2026 and its revolving credit facility improved the company's liquidity position and thus its credit profile. On March 4, 2026, CEL raised $330 million through an amendment to its term loan B (TLB) due in 2030. The amended TLB maintained largely the same terms as the original, with a slightly higher interest rate of SOFR plus 4.75% (compared to the original SOFR plus 4.5%). The proceeds from the TLB amendment improved CEL's liquidity position, extending its debt maturity profile to 2028. The execution of this transaction signals increased investor confidence in CEL, supported by continued backing from its parent company, Proman Holding AG. Proman, during the first quarter of 2026, repaid an upstream parent loan from CEL using a combination of cash and in-kind contributions, including equity stakes in Caribbean Nitrogen Co. Ltd. (CNC) and N2000 Unlimited--30.3% and 27.2%, respectively--held through Process Energy (Trinidad) Ltd. S&P said, "We forecast debt to EBITDA will remain slightly above 5.0x and FFO to debt below 12.0% for at least the next two years, but less volatility in leverage metrics could accelerate an upside scenario. Our revised 2026 forecast anticipates that the company will continue to navigate complex industry and economic conditions. Incorporating additional EBITDA and debt-free cash flow from CNC and N2000, we project EBITDA margins of 20%-22%. We expect adjusted debt to EBITDA of 5.2x, a funds from operations (FFO) to debt ratio of 6.4%, and EBITDA interest coverage of 1.6x in 2026. Our current financial risk profile reflects a negative adjustment due to recent volatility in leverage metrics. We would need to see consistent leverage metrics, even under continued pressured industry and/or economic conditions, to remove this adjustment (Therefore, absent an adjustment for volatility, we would require debt-to-EBITDA ratios below 5.0x and interest coverage ratios above 2.0x). "Our updated projections also consider sociopolitical conflicts, which introduce uncertainty, particularly in Oman. However, we believe the company's hedging strategies and fixed-price contracts for natural gas supply in the U.S. and Oman provide a degree of protection against global supply-chain disruptions. Additionally, reduced methanol production globally could lead to higher reference prices. Global methanol prices have increased by 30%-60% since the start of the conflict, which we anticipate will improve the company's results for the first quarter. We will continue to monitor for any future, permanent implications of prolonged conflicts on CEL. "We raised the ratings on the secured and unsecured debt to the same 'B-' level as the issuer credit rating on the company. However, a shift in debt composition could lead to subordination of the unsecured debt. Our current proforma debt priority ratio (secured debt plus debt at subsidiaries) is 47% with most recent financial information as of Sept. 30, 2025, slightly below our 50% subordination threshold. We may lower issue-level ratings and subordinate the unsecured debt if CEL increases its proportion of secured debt. "Our stable outlook reflects CEL's manageable debt maturity profile, with no significant maturities expected until 2028. However, the outlook also considers the company's continued high leverage (commensurate with the current rating), which we expect to persist for the next 12 months until we see a sustained track record of consistent production rates and stable prices leading to improved EBITDA generation. Specifically, we anticipate debt to EBITDA remaining above 5.0x, FFO to debt below 12%, and EBITDA interest coverage below 2.0x for 2026. "We could lower our ratings on the company within the next 12 months if its liquidity position deteriorates significantly. This could occur if economic or operating conditions worsen beyond our current expectations, leading to declines in operating cash flow and indicating diminished financial strength and an increased risk of default. Additionally, constrained access to natural gas feedstock or unplanned operational outages that result in reduced capacity utilization could weaken liquidity by impacting profitability. Finally, we would also view increased short-term debt maturities as a reflection of weaker liquidity." S&P could raise the ratings if CEL improves its credit risk in the next 12 to 18 months, for example, if: -- It deleverages, and we perceive that its capital structure is sustainable, with adjusted debt to EBITDA ratios below 4.0x, FFO to debt above 20%, and EBITDA interest coverage ratios above 3.0x, while maintaining a volatility adjustment; -- The company maintains adequate liquidity; and -- The company operates at constant production rates, reducing operating risks, while maintaining financial discipline. =========== T U R K E Y =========== [] Fitch Affirms 'BB-' LT IDR on 4 Turkish Banks, Outlook Positive ------------------------------------------------------------------ Fitch Ratings has affirmed four Turkish bank-owned non-bank financial institutions (NBFIs) at 'BB-' Long-Term Issuer Default Ratings. The Outlooks are Positive. The privately-owned bank subsidiaries are Is Finansal Kiralama Anonim Sirketi (Is Leasing), Yapi Kredi Faktoring A.S. (Yapi Faktoring), Yapi Kredi Finansal Kiralama A.O. (Yapi Kredi Leasing) and Yapi Kredi Yatirim Menkul Degerler A.S. (Yapi Kredi Yatirim). Key Rating Drivers Support-Driven Ratings: The NBFIs' Long-Term IDRs and Shareholder Support Ratings (SSRs) are equalised with those of their parents, reflecting Fitch's view that they are core and highly integrated subsidiaries of the respective banks. The Positive Outlooks on the IDRs mirror those on the respective parents. Fitch does not assess the subsidiaries' intrinsic strength as all companies are highly integrated into their respective parents and their franchise relies heavily on their parents'. Highly Integrated Subsidiaries: The ratings of the NBFI subsidiaries reflect their close integration with their parents, reputational risks of their defaults for the broader groups and ultimate full (for Yapi subsidiaries) or majority (for Is Leasing) ownership by their respective parents. The subsidiaries offer core products and services (leasing, factoring and investment services) in the domestic Turkish market. High Support Propensity: The cost of support would be limited as the subsidiaries are small compared with their parents and their total assets do not exceed 3% of group assets. This, together with other support factors, means Fitch believes the parents' propensity to support remains very high. However, the ability to support is limited by the respective parents' creditworthiness as reflected in their ratings. Stable National Ratings: The NBFIs' 'AA-(tur)' National Ratings are equalised with their respective parents' and their Stable Outlooks reflect its view that their creditworthiness relative to other Turkish issuers' will remain broadly unchanged. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The subsidiaries' Long-Term Foreign- and Local-Currency IDRs and National Ratings are sensitive to a downgrade of their respective parent's IDRs and/or National Ratings. A revision of parents' Outlooks to Stable or Negative would be reflected in the subsidiaries' Outlooks. The ratings could be notched down from their respective parents' ratings on a material deterioration in the parents' propensity or ability to support, for example if the subsidiaries become materially larger relative to the respective parent banks' assets. The ratings could also be notched down from their respective parents' if the subsidiaries' strategic importance is materially reduced through, for example, weaker operational and management integration, reduced ownership or a prolonged period of underperformance. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade of the respective parents' ratings would be reflected in their subsidiaries' Long-Term Foreign- and Local-Currency IDRs and National Ratings. Public Ratings with Credit Linkage to other ratings The entities' ratings are linked to their respective parent banks' ratings. ESG Considerations All four NBFIs have an ESG Relevance Score of '4' for Management Strategy, in line with their respective parents' Management and Strategy ESG Relevance Score. The score reflects increased regulatory intervention in the Turkish banking sector, which hinders the operational execution of the parent's management strategy, constrains management's ability to determine strategy and price risk, and creates an additional operational burden for the respective parent banks. This has a negative impact on the relevant credit profiles 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 ----------- ------ ----- Is Finansal Kiralama Anonim Sirketi LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Natl LT AA-(tur) Affirmed AA-(tur) Shareholder Support bb- Affirmed bb- Yapi Kredi Finansal Kiralama A.O. LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Natl LT AA-(tur) Affirmed AA-(tur) Shareholder Support bb- Affirmed bb- Yapi Kredi Faktoring A.S. LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Natl LT AA-(tur) Affirmed AA-(tur) Shareholder Support bb- Affirmed bb- Yapi Kredi Yatirim Menkul Degerler A.S. LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Natl LT AA-(tur) Affirmed AA-(tur) Shareholder Support bb- Affirmed bb- =========================== U N I T E D K I N G D O M =========================== BREWDOG INT'L: AlixPartners Appointed as Joint Administrators ------------------------------------------------------------- Brewdog International Limited was placed into administration in the Court of Session, No P257, and Clare Kennedy (IP No. 20590), Ian Partridge (IP No. 24890) and Ben Browne (IP No. 14190) of AlixPartners Services UK LLP were appointed as joint administrators on March 2, 2026. Brewdog International engages in activities of extraterritorial organisations and bodies. The company's registered office and principal trading address is at Brewdog, Balmacassie Commercial Park, Ellon, United Kingdom, AB41 8BX. The Joint Administrators can be reached at: Clare Kennedy (IP No. 20590) Ian Partridge (IP No. 24890) Ben Browne (IP No. 14190) AlixPartners Services UK LLP 6 New Street Square London, EC4A 3BF For further details, contact: The Joint Administrators Email: BrewDog@AlixPartners.com Alternative contact: Chris Robb BREWDOG PLC: AlixPartners Appointed as Joint Administrators ----------------------------------------------------------- Brewdog PLC was placed into administration in the Court of Session, No. P253, and Clare Kennedy, Ian Partridge and Ben Browne (IP Nos 20590 and 24890 and 14190) of AlixPartners Services UK LLP were appointed as joint administrators on March 2, 2026. Brewdog PLC manufactures beer. The company's registered office and principal trading address is at Brewdog, Balmacassie Commercial Park, Ellon, United Kingdom, AB41 8BX. The Joint Administrators can be reached at: Clare Kennedy (IP No. 20590) Ian Partridge (IP No. 24890) Ben Browne (IP No. 14190) AlixPartners Services UK LLP 6 New Street Square London, EC4A 3BF For further details, contact: The Joint Administrators Email: BrewDog@AlixPartners.com Alternative contact: Chris Robb BREWDOG RETAIL: AlixPartners Appointed as Joint Administrators -------------------------------------------------------------- Brewdog Retail Limited, was placed into administration in the Court of Session, No. P252 of 2026, and Clare Kennedy, Ian Partridge and Ben Browne (IP Nos 20590 and 24890 and 14190) of AlixPartners Services UK LLP were appointed as joint administrators on March 2, 2026. Brewdog Retail operates public houses and bars. The company's registered office and principal trading address is at Brewdog, Balmacassie Commercial Park, Ellon, United Kingdom, AB41 8BX. The Joint Administrators can be reached at: Clare Kennedy (IP No. 20590) Ian Partridge (IP No. 24890) Ben Browne (IP No. 14190) AlixPartners Services UK LLP 6 New Street Square London, EC4A 3BF For further details, contact: The Joint Administrators Email: brewdog@alixpartners.com Alternative contact: Chris Robb DRAX GROUP: S&P Alters Outlook to Positive, Affirms 'BB+' LT ICR ---------------------------------------------------------------- S&P Global Ratings revised the outlook to positive from stable and affirmed on its 'BB+' long-term issuer credit rating on Drax Group Holdings Ltd. and Drax Power Ltd. S&P also affirmed the 'BB+' senior secured issue rating on the debt issued by Drax Finco Ltd. and maintained the '3' recovery rating, indicating its view of about 60% recovery in the event of a default. S&P said, "The positive outlook reflects our greater medium-term visibility on Drax's strategy to diversify earnings away from subsidized biomass generation and our expectation that the company will continue to generate strong free cash flows on the back of contracted generation, with adjusted FFO to debt expected to remain above 45% over 2026-2027. "Drax is pivoting from a reliance on subsidized power earnings from biomass generation to more flexible generation, which could improve our view of its business risk profile over the coming years, if successfully executed. "Strong positive cash flow generation mostly stemming from contracted capacity will underpin credit metrics in 2026-2029, with adjusted funds from operations (FFO) to debt averaging about 55%, despite the expected EBITDA reduction on the back of lower subsidies. We expect Drax to maintain its commitment to a 2.0x debt to EBITDA target. "We believe Drax has started to execute a medium-term strategic pivot away from a reliance on subsidized power earnings, which we think could improve our view of its business risk profile if successfully implemented. We see a diversification of earnings from 2025, with biomass generation contributing about 80% of EBITDA in 2025 to about 30% of EBITDA in 2029." This transition will be aided by an increasing contribution from the pumped storage and hydro operations (0.6 gigawatts [GW] operational), the commissioning of open-cycle gas turbines (OCGTs) from 2026 (0.9 GW under development), and to a lesser extent earnings contributions from battery energy storage solutions (BESS) (0.7 GW under development) in 2027 and thereafter. Considering growing demand for system flexibility due to the increasing role of intermittent renewable generation within the U.K.'s energy mix, there will be a requirement of 74-87GW of dispatchable generation and 30GW of storage by 2030, according to the U.K. government's Clean Power 2030 Action Plan. Pellet production reached a record of 4.2 million tons in 2025, contributing GBP129 million (14%) to the group's 2025 EBITDA. Overall there was a reduction in production costs compared with the previous year, thanks to operational efficiencies and cost management. That said, EBITDA was lower than in 2024 (GBP143 million) because pellet production in the U.S. was mostly focused on own-use requirements for biomass generation. The own-use pellets cost is calculated on a cost-plus transfer pricing basis, which ultimately lowers the earnings from the pellet production segment, but it benefits biomass generation. This results in a net benefit for the group. S&P expects pellet production to increasingly represent a larger share of EBITDA (around 20% of EBITDA by 2029) as earnings from biomass generation decline. This will also reduce the link between financial performance and commodity price shifts linked to generation. Flexible generation will support free cash flow generation and will diversify earnings sources. Drax currently has three 15-year capacity market agreements for pumped storage (2027-2042), hydro (2028-2043), and OCGTs (2026-2039), with a total value of GBP531 million. Commissioning of the OCGTs has been rescheduled due to delays by the supplier of the grid connections, with no penalties being incurred by Drax. Commissioning has started on Hirwaun, and is nearly complete, while the other two are expected to start this year. In terms of BESS, the company was active in acquiring assets and signing tolling agreements during 2025. The BESS assets are two-hour duration across three sites across the England/Scotland transmission line, and a 260 megawatt (MW) capacity. The first site is expected to be operational in 2027. The two tolling agreements signed for 10 years in January 2026 and 15 years in February 2026 for two- and four-hour duration BESS, for a total capacity of 450MW, are targeted to have a commercial operation date in 2028. Drax's BESS strategy (acquisitions and 10-15 year tolling agreements) limits development and construction risk. Strong cash flow generation, mostly contracted, will underpin credit metrics in 2026-2029, backed by the contract for difference (CfD) and the ability to capture attractive peak power prices through ancillary services payments. High baseload prices between 2022 and 2023, coupled with the company's two-year hedging strategy, benefitted free cash flow generation, which in turn accelerated deleveraging, with FFO to debt reaching a record high 72% in 2025. S&P projects FFO to debt to average about 55% between 2026-2029, with contracted power sales continuing to support earnings at least until the first quarter of 2027. As of February 2026, 10.9 terawatt hours (TWh) are already contracted at an average price of GBP77.8 per megawatt hour (/MWh) for 2026, together with the 2.1 TWh of CfD volumes at a strike price of about GBP142/MWh (this is 84% of the output sold in 2025). The group has about GBP1.0 billion of contracted forward power sales until the first quarter of 2027 on its renewable obligation certificates (ROC), pumped storage, and hydro generation assets. S&P said, "We think that the extension of the CfD until 2031, signed in November 2025, will support earnings from biomass generation through and beyond the expiry of the ROC regime in 2027. That said, we still expect adjusted EBITDA to decline from GBP947 million in 2025 to an average of GBP500 million-GBP600 million in 2028-2029." The CfD will apply to all four units of Drax Power Station at a strike price of GBP110/MWh (2012 prices). The CfD will also apply a cap at 6 TWh, with flexible operation to support high and low demand periods, resulting in a roughly 30% load factor for all units. Earnings from the generation segment will significantly fall in absolute terms across our forecast period, as the ROCs scheme expires in 2027 and the bridge CfD comes into effect in April of the same year. However, S&P expects margins from this segment to improve, as hydro and OCGTs will become more important within the generation earnings with stronger margins than biomass generation. S&P said, "We expect Drax to maintain a commitment to 2.0x debt to EBITDA target, while generating strong free cashflows. The company's capital allocation policy has focused so far on balance sheet strength, investments in its core business and to maintain up to 2.0x debt to EBITDA leverage target. This resulted in free operating cash flow (FOCF) averaging GBP500 million in 2023-2025. We expect the company to continue generating strong FOCF averaging over GBP350 million a year in 2026-2029. Yet, we note Drax's aggressive dividend policy, with dividends expected to about GBP100 million per year over 2026-2028. Additionally, Drax plans to execute about GBP100 million-GBP150 million of share buybacks per year." The positive outlook reflects the possibility of an upgrade if Drax successfully diversifies its earnings away from subsidized biomass generation in the next 24 months, which would improve our assessment of its business risk profile. Drax's FFO to debt would also need to be sustainably above 45%. S&P said, "Our base case does not factor in any large credit-dilutive acquisitions (nor does it factor in any significant proceeds from divestments) because we expect Drax will adhere to its current financial policy of debt to EBITDA of about 2.0x." S&P said, "In addition, our current base case does not incorporate any long-term plans to develop a data center at Drax Power Station or the potential implementation of Drax's U.K. or U.S. bioenergy carbon capture and storage (BECCS) projects, given the uncertainty around these projects, including timelines, costs, and business models, particularly for BECCS. "We could revise the outlook to stable if we consider the group diverges from the current diversification strategy or from the current financial policy of debt to EBITDA of 2.0x, for instance, through large debt-funded acquisitions or a significantly higher capex program than anticipated, absent the implementation of any mitigating factors. "We could also revise the outlook to stable if we consider that, while implementing the diversification strategy, Drax will not be able to sustainably maintain credit metrics that we see commensurate with our expectations for a 'BBB-' rating beyond 2027, this being 45% FFO to debt." This could result, for instance: -- Significant underperformance of Drax's generation assets, notably with substantial unplanned outages; -- Markedly lower power prices than we anticipated; -- Further delays in the commissioning of the OCGTs; -- Acquisition and tolling agreements for BESS assets not going through; or -- Although remote at this stage, a retroactive change in biomass subsidies for Drax's biomass CfD and ROC units. S&P said, "We would upgrade Drax if the company successfully diversifies its earnings away from subsidized biomass generation in the next 24 months, which would improve our assessment of its business risk profile. This would come together with continuously strong FOCF generation, which should maintain adjusted FFO to debt above 45% beyond-2027." GLOBAL ACADEMIC: Fitch Lowers Long-Term IDR to 'B+', Outlook Stable ------------------------------------------------------------------- Fitch Ratings has downgraded Global Academic Holdings Ltd (GAHL) Long-Term Issuer Default Rating (IDR) to 'B+' from 'BB-' with a Stable Outlook. Fitch has also downgraded GAH Finco Limited's EUR375 million and GBP110 million term loans senior secured rating to 'BB' from 'BB+', with a Recovery Rating of 'RR2'. The IDR downgrade follows regulatory changes in Canada and expected softness in the Canadian market, which Fitch believes will cause increasing leverage alongside moderate execution risks, as GAHL may need to intensify its business development in other countries while facing more restrictive regulations in Canada. Fitch projects financial leverage to rise above 5.0x in FY27 (financial year ending May), before reducing to below 5.0x thereafter. Fitch views the current metrics as more commensurate with a 'B+' rating. The Stable Outlook reflects its expectation of GAHL's continued operations with steadily growing profitability outside Canada, while sustaining positive free cash flow (FCF) generation. Key Rating Drivers Adverse Regulatory Change in Canada: Immigration policy changes have created challenges for private universities in Canada and GAHL's Canadian campuses. The current environment is more restrictive for international student recruitment through visa caps and Provincial Attestation Letters. Fitch expects this change to affect the sector outlook in Canada in the medium term, including GAHL. Fitch has revised its expectations on the development of the Canadian education market, and expect GAHL's revenue and EBITDA contributions to decline in the medium term. Declining Group Profitability: Fitch expects profitability to decline at group level, affected by its revision of the operating assumptions for the Canadian market. Fitch expects the group's EBITDA margin to decline below 20% over the rating horizon, remaining close to 17%-18% in FY27-FY29. EBITDA dilution in the Canadian market is partially offset by increasing EBITDA in other campuses. Fitch estimates group EBITDA will be driven by LCCA, ULaw and Indian campuses from FY27, while GAHL gradually ramps up its operations in Germany. Increasing Leverage: Fitch expects leverage to rise above 5.0x in FY27 following the revision of its assumptions for Canada, outside its current rating sensitivities, before reducing to below 5.0x from FY28. Fitch considers this leverage profile better aligned with a 'B+' rating level, but it is also predicated on the group's continued ability to generate sustained positive FCF. Execution Key; Moderate Risks: Fitch expects moderate execution risks as GAHL may need to intensify its asset development on other campuses outside Canada, mainly in the UK (LCCA and Ulaw) and India, while possibly increasing student intake in Germany. Fitch expects the shift in focus to require management's time, and investments in the ramping-up of other campuses. Scale-Up in Other Universities: The scale‑up of universities outside Canada may also take longer than anticipated, potentially causing delays in revenue and EBITDA generation. Increasing volumes within a short time in existing campus infrastructure could also dilute the student experience and teaching standards. Still, the management has a good record in developing new campuses in different geographies; therefore, based on its rating case assumptions, Fitch views the execution risk as moderate overall. Sustained Positive FCF: Its previous forecast anticipated a high single-digit FCF margin. Fitch now expects the FCF margin to remain positive at mid single digits in FY27-FY29, underpinned by continued positive FCF generation and the company's negative working capital profile, which is typical for the education industry. Fitch projects FCF generation of about GBP110 million in FY27-FY29. Reduced or volatile FCF generation may signal higher execution risks in the business model, which may lead to further negative rating action. Geographic Diversification: GAHL's geographically diverse portfolio spans different countries covering the UK, India and Germany providing revenue diversification that reduces concentration risk in any single regulatory jurisdiction. GAHL benefits from the uncorrelated performance of its portfolio institutions. Recent changes in the regulatory landscape in Canada illustrate the value of the diversification. Fitch expects GAHL to shift its focus on growth to campuses outside Canada, while managing the challenges it faces in the Canadian market. Peer Analysis GAHL has greater breadth than the K-12 schools of Lernen Bidco Limited (B/Stable). However, it offers shorter courses, typically of three to four years (longer for part time), whereas retention is higher for primary and secondary schools. GAHL has smaller revenue and weaker margins than Lernen, but Fitch expects it to operate with lower leverage. GAHL also has weaker margins than Arden Bidco Limited (B/Stable). However, it is geographically more diversified and bigger by revenue, and Fitch expects it to operate with a similar leverage profile. Fitch’s Key Rating-Case Assumptions - Revenue growth in the low double digits in FY27-28 and FY28-FY29 driven by growing student intake in divisions such as Germany, India, ULaw and London College of Contemporary Arts, alongside single-digit annual fee increases; revenue growth to stabilise, thereafter, as enrolment of new students slows - Group EBITDA margins remaining above 16% in FY26-FY28 and improving to about 18% by FY28-FY29 - Working-capital inflows of 3.5% of revenue - Annual capex on average at about 6.5% of revenue - M&A of about GBP50 million in FY28 and FY29 (subject to leverage headroom) Corporate Rating Tool Inputs and Scores Fitch scored the issuer as follows, using its Corporate Rating Tool to produce the Standalone Credit Profile: - Business and financial profile factors (assessment, relative importance): Management (bb, Moderate), Sector Characteristics (b, Higher), Market and Competitive Positioning (b+, Moderate), Diversification and Asset Quality (bb, Moderate), Company Operational Characteristics (bb, Moderate), Profitability (bbb+, Lower), Financial Structure (b, Higher), and Financial Flexibility (b+, Moderate). - The quantitative financial subfactors are based on custom Corporate Rating Tool financial period parameters: 40% weight for the forecast year FY27, 40% for the forecast year FY28 and 20% for the forecast year FY29. - Assessments of the quantitative financial subfactors also include bespoke calculations. - 'B+' to 'CC' considerations apply in its analysis and result in no adjustment. - The Governance assessment of 'Good' results in no adjustment. - The Operating Environment assessment of 'a+' results in no adjustment. - The Standalone Credit Profile is 'b+'. Recovery Analysis Its recovery analysis assumes that GAHL would be reorganised as a going concern (GC) in bankruptcy rather than liquidated as the value of the business lies in the strength of its institutions and recruiting operating platforms, and due to its asset-light operations. The Fitch-estimated GC value is GBP413 million. Its GC EBITDA estimate of GBP75 million represents a level at which the group would generate sufficient earnings to remain a GC following hypothetical distress. An enterprise value/EBITDA multiple of 5.5x remains in line with peers' and reflects the business portfolio diversification, positive cash-generation capabilities and attractive brands. Its waterfall analysis generated, after deducting 10% for administrative claims, a ranked recovery in the 'RR2' band, indicating a 'BB' senior secured rating for term loan B, which ranks equally with GAHL's GBP50 million revolving credit facility and which Fitch assumes will be fully drawn at distress, in accordance with Fitch's criteria. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Adverse regulatory changes, weakening reputation or weak business strategy execution leading to EBITDA reduction or EBITDA margin falling below 15% - Gross debt/EBITDAR above 5.0x on a sustained basis - EBITDAR fixed-charge coverage below 2.0x on a sustained basis - FCF margin falling to low-single digits - (CFO - capex)/debt deteriorating towards the low single digits Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Robust operating performance and execution supporting continued growth in scale and sustainable EBITDA expansion - Lease-adjusted gross debt/EBITDAR below 3.5x on a sustained basis - EBITDAR fixed-charge coverage above 3.0x on a sustained basis - (CFO - capex)/debt remaining in the high single digits Liquidity and Debt Structure GAHL has comfortable liquidity, which includes GBP95 million of cash on balance sheet as of March 2026. Liquidity is also supported by a GBP50 million revolving credit facility, of which GBP16 million is drawn, with a 6.5-year tenor. The recently issued term loan B, split between EUR375 million term and GBP110 million, has a seven-year tenor maturing in 2032. Issuer Profile GAHL is a global, for-profit, privately owned, under- and post-graduate university and higher education group. Summary of Financial Adjustments - Fitch views leases as a core financing decision for GAHL under its property-based services, unlike other service providers and therefore use lease-adjusted metrics in assessing its financial risk profile. - The company's long-dated real estate leases mean Fitch calculates lease liabilities by capitalising lease cost proxy, calculated as the sum of its annual cash lease, at an 8x multiple. This is similar to the implied lease multiple used for other education peers. - Fitch has classified GBP20 million of cash as restricted. 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. Climate Vulnerability Signals The results of its Climate.VS screener did not indicate an elevated risk for Global Academic Holdings Ltd. 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 ----------- ------ -------- ----- GAH Finco Limited senior secured LT BB Downgrade RR2 BB+ Global Academic Holdings Ltd LT IDR B+ Downgrade BB- LIBERTY GLOBAL: S&P Alters Outlook to Negative, Withdraws 'BB-' ICR ------------------------------------------------------------------- S&P Global Ratings revised its outlook on Liberty Global Ltd. to negative from stable; it subsequently withdrew S&P's 'BB-' rating at the company's request; there is no debt at this level. Before the withdrawal, the negative outlook reflected the risk of the opcos' operating performance not improving in 2027 or planned asset sales not materializing, resulting in Liberty Global's adjusted debt to EBITDA remaining higher than 5.5x and free operating cash flow (FOCF) to debt below 3% for a prolonged period. Upon closing of VodafoneZiggo's acquisition, Liberty Global Ltd. will consolidate a company with higher leverage, leading to an increase in Liberty Global's adjusted debt to EBITDA to more than 5.5x in 2026, pro forma the acquisition. Furthermore, the near-term free cash flow guidance for the operating subsidiaries (opcos) is weaker than expected, mainly due to the opcos' weaker adjusted EBITDA or higher capital expenditure (capex) amid intense competition, which is driving the need to invest in commercial momentum and network upgrades. S&P said, "We understand Liberty Global is planning asset sales at both VodafoneZiggo and Telenet that will significantly improve its credit metrics, but these are subject to execution risks, so we don't incorporate them into our current base case. "We revised our rating outlook on Liberty Global to negative due to anticipated increases in leverage and weakening free cash flow generation. The proposed acquisition and consolidation of VodafoneZiggo was funded by EUR1 billion in cash and a 10% equity stake. We expect this will raise Liberty Global's adjusted leverage to about 5.5x in 2026; we also forecast that VodafoneZiggo's adjusted debt to EBITDA will exceed 6.0x in 2026. Simultaneously, weaker-than-expected earnings forecasts for operating companies VodafoneZiggo and VMED O2, along with high capex, will significantly reduce free cash flow, leading to FOCF to debt lower than 3.0% in 2026. Although we anticipate some improvement in FOCF in 2027, risks to our base case could materialize if VodafoneZiggo's and VMED O2's customer bases continue to decline amid ongoing intense competition. "Commitment to deleverage in the medium term supported the rating. We understand that Liberty Global intends to spin-off and list the holding company, Ziggo Group B.V., which consolidates Liberty Global's equity interest in Telenet and VodafoneZiggo. To facilitate this transaction, Liberty Global announced its intention to reduce company-defined leverage at these subsidiaries to about 4.5x, which would roughly translate into about 5.0x on S&P Global Ratings-adjusted basis. Asset sales and organic EBITDA growth from 2027 are likely to support planned deleveraging. Liberty Global has already announced that Wyre, its fixed-line network company in Belgium, is under a strategic review and, in the short-to-medium term, Telenet has a commitment to sell a significant stake in Wyre. Part of the proceeds from this sale are earmarked to be used to reduce debt at Telenet with an aim of bringing company-defined leverage down to 4.5x (about 5.0x on an S&P Global Ratings adjusted basis). Similarly, Liberty Global has alluded to possible sales of its tower company and other properties at VodafoneZiggo to support its deleveraging. We have not modelled these asset sales in our base-case forecasts because there is no definitive sale agreement. That said, if these asset sales were to materialize and proceeds were used for deleveraging, we can expect a material improvement in leverage and FOCF that will likely lead to an outlook revision to stable. As such, these potential asset sales and prospective deleveraging remain a possible upside to our base case." PAGAZZI LIGHTING SERVICES: BTG Begbies Tapped as Administrator -------------------------------------------------------------- Pagazzi Lighting (Services) Limited, Company Number: SC405630, was placed into administration and George Lafferty (IP No. 9584) of BTG Begbies Traynor (Central) LLP was appointed as administrator on February 27, 2026. Pagazzi Lighting is a lighting & furniture retailer. The company's registered office and principal trading address is at Unit 10, Block 8, Spiersbridge Terrace, Glasgow, G46 8JH. The Administrator can be reached at: George Lafferty (IP No. 9584) BTG Begbies Traynor (Central) LLP 2 Bothwell Street Glasgow, G2 6LU For further details, contact: The Administrators Tel: 0141 222 2230 Email: glasgow@btguk.com Alternative contact: Stanley Smith Tel: 01412222230 E-mail stanley.smith@btguk.com ZARA UK: S&P Upgrades Long-Term ICR to 'B', Outlook Stable ---------------------------------------------------------- S&P Global Ratings raised its long-term issuer credit rating on Zara UK Topco Ltd., parent of Flamingo Group International, to 'B' from 'B-'. S&P also raised its issue ratings on the EUR15 million revolving credit facility (RCF) due 2027 and EUR236 million term loan B (TLB) due 2028 to 'B' from 'B-'. The '3' recovery rating is unchanged, indicating meaningful recovery prospects of 50%-70% (rounded estimate: 65%). The stable outlook indicates S&P's view that Flamingo will sustain solid positive FOCF and adjusted leverage of 3.0x-3.5x over the next 12 months, while continuing to execute its strategic growth and business transformation plan. Zara UK Topco Ltd. has proved resilient amid a difficult operating environment, posting preliminary 2025 results that are broadly aligned with--or slightly better than--our previous base case. Flamingo's S&P Global Ratings-adjusted debt to EBITDA is estimated at 3.3x-3.5x in 2025 (3.4x in 2024), free operating cash flow (FOCF) is expected to be above GBP10 million, and funds from operations (FFO) cash interest coverage comfortably above 2x. S&P said, "For 2026, we forecast adjusted debt to EBITDA of 3.0x-3.5x and positive FOCF around GBP15 million. FFO cash interest is also expected to remain above 3.0x. We anticipate Flamingo's business strategy, solid sales growth, and productivity measures to support earnings growth and continued positive FOCF generation." The upgrade reflects Flamingo's ability to sustain positive FOCF supported by profitable growth, despite a still challenging operating environment. S&P said, "We estimate FOCF of above GBP10 million in 2025 and forecast an increase to about GBP15 million in 2026. In 2025, FOCF was supported by lower gross capital expenditure (capex) due to some delays to expansion projects, despite moderate working capital needs due to timing differences in payments and receipt collections. We anticipate an increase in capex--related to replanting, efficiency, and expansion projects in 2026--to about GBP25 million will boost Flamingo's capabilities and support the business transformation plan. We expect the group will continue to show a good return on capex and to expand and strengthen its infrastructure capabilities." S&P said, "In 2025, sales growth of 6.9% was mostly driven by pricing with volume growth and product mix improvement in the flowers business in the U.K., driven by new tenders. We forecast sales growth of 4%-5% in 2026, underpinned by the flowers business in the U.K. and expected volume rebound at Afriflora, with an increasing contribution from volume and mix. We estimate S&P Global Ratings-adjusted EBITDA increase to about GBP70 million in 2025 (from GBP64 million in 2024), with a broadly stable margin of 10.7% (10.5% in 2024), due to sales expansion, improved productivity, overhead savings in the U.K. flowers business and foreign exchange gains due to the devaluation of the Ethiopian birr. We forecast broadly stable EBITDA of about GBP70 million in 2026. Despite good topline growth, further operational efficiencies, and positive contribution from foreign exchange (FX) movements, this will likely be offset by further restructuring and productivity implementation costs, the loss of a contract with a third party produce supplier, and some exceptional one-off costs." At the same time, Flamingo continues to face significant inflationary pressures, while weathering volatility and intense competition in an increasingly consolidated industry. S&P Global Ratings-adjusted debt to EBITDA should remain within 3.0x-3.5x in the next 12 months. This is supported by stable profitability and debt levels projected for 2026. S&P said, "We estimate adjusted leverage of 3.3x-3.5x in 2025. Our adjusted debt metric comprises the EUR236 million term loan B (TLB) due 2028, GBP20 million-GBP25 million lease liabilities, and small pension liabilities. We consider the potential for small bolt-on acquisitions as the group might further consolidate its footprint by increasing and growing sourcing capacity to help build a larger, more integrated and efficient player. We understand the financial sponsor, Sun Capital Partners, will continue supporting Flamingo and its strategic growth plan, prioritizing continual positive cashflow generation and with no intention of releveraging the capital structure." Good management execution of Flamingo's strategic vision remains a key driver of business growth. Over the past two years, Flamingo has focused on strategically defining and refocusing its three key divisions (and the smaller Bigot Seasonals segment)--Flamingo Flowers (mixed bouquets, including premium bouquets), Afriflora (roses business mostly priced at the lower end), and Flamingo Produce (of which some of the produce is third party sourced)--including growth priorities and implementing efficiencies and cost savings measures across the group. The successful implementation of this strategy has been key to driving sales growth, earnings, and cashflow generation. Management continues to make good progress with its business transformation plan. Measures are implemented across functions, from improving farms' yields, increasing farm-direct bouquet capacity, and strengthening supply chain resilience to redesigning and differentiating the product offering to deliver higher customer value. The resizing of the U.K. operations has now been completed, resulting in moderate cost savings, with some capex planned for existing facilities. S&P said, "We expect management to continue building on the strategy and deliver further efficiencies and operating model simplification over the next few years, resulting in a more efficient cost structure and improved sales and earnings growth. This, while still facing tough market conditions, will be challenging but achievable, in our view. Flamingo is inherently exposed to weather and political risks as the vertically integrated farms are in Ethiopia and Kenya, although we note the group's efforts to diversify sourcing. At the same time, the Middle East conflict and geopolitical uncertainty could cause material cost inflation, namely on aviation fuel, although the group has hedging on fuel and FX throughout 2026." The stable outlook reflects our expectation that Flamingo's operational performance will remain resilient thanks to solid topline growth and earnings generation. S&P said, "We anticipate performance to be supported by the implementation of Flamingo's business transformation strategy, despite inflationary pressures and geopolitical uncertainty. In our base case, we forecast that the group will continue to generate positive FOCF and debt to EBITDA of about 3.0x-3.5x in the next 12 months. We also expect FFO cash interest coverage to remain comfortably above 2x." S&P said, "We could lower the rating in the next 12 months if FOCF generation turns sustainably negative. This could happen if operating performance deteriorates, with Flamingo unable to sufficiently manage potential working capital volatility, or capex is significantly larger than anticipated. In addition, we would likely see the group not being able to offset adverse impacts from external operating challenges and extract expected efficiencies and cost savings from its business transformation strategy. In this case, we would likely see an inability to grow sales and maintain or improve profitability levels. As such, FFO cash interest coverage would also likely fall to or below 2x. "We could raise the rating if the group substantially increased the scale of its operations, enabling economies of scale, with greater diversification among its customer base and geographical markets, while successfully navigating inflationary pressures and geopolitical uncertainty." Additionally, the upgrade would be contingent on Flamingo and the private-equity owner committing to maintaining current leverage levels with FFO cash interest coverage comfortably above 3x, along with Flamingo significantly raising its FOCF. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2026. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. 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