260505.mbx

260505.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Tuesday, May 5, 2026, Vol. 27, No. 89 Headlines A Z E R B A I J A N KAPITAL BANK: S&P Upgrades ICR to 'BB' on Stronger Profitability F R A N C E EXPLEO GROUP: S&P Places 'B-' ICR on CreditWatch Negative LABORATOIRE EIMER: Fitch Affirms 'B' Long-Term IDR, Outlook Stable I R E L A N D ARAGVI FINANCE: S&P Rates New Senior Secured Notes Rated 'B' ARINI EUROPEAN IX: S&P Assigns B- (sf) Rating to Class F Notes EIRCOM HOLDINGS: Fitch Affirms 'B+' Long-Term IDR, Outlook Stable GROSVENOR PLACE 2022-1: S&P Rates Class F-R-R Notes 'B- (sf)' JUBILEE CLO 2016-XVII: S&P Assigns B- (sf) Rating to Cl. F-R Notes KETTLES PARK: S&P Assigns B- (sf) Rating to Class F Notes I T A L Y EVOCA SPA: S&P Cuts ICR to 'CCC+', Outlook Stable K A Z A K H S T A N BANK RBK: Fitch Assigns 'BB(EXP)' Rating to USD Sr. Unsec. Eurobond N O R W A Y AXACTOR ASA: S&P Places 'B-' Rating on CreditWatch Developing T U R K E Y TURK TELEKOMUNIKASYON: Fitch Alters Outlook on 'BB-' IDR to Stable TURKCELL ILETISIM: Fitch Affirms BB- IDR, Alters Outlook to Stable [] Fitch Alters Outlook on 8 Turkish LRGs' 'BB-' IDRs to Stable U N I T E D K I N G D O M A&K TRAVEL: Fitch Assigns 'BB-' Long-Term IDR, Outlook Stable ALEXANDRITE MONNET: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable BOND UK 3: Fitch Assigns 'B+(EXP)' Long-Term IDR, Outlook Stable EUROSAIL 2006-2BL: Fitch's Outlook on B-sf E1c Note Rating Now Neg. SATUS 2024-1: S&P Affirms 'BB (sf)' Rating on Class E-Dfrd Notes - - - - - =================== A Z E R B A I J A N =================== KAPITAL BANK: S&P Upgrades ICR to 'BB' on Stronger Profitability ---------------------------------------------------------------- S&P Global Ratings raised its long-term issuer credit rating on Kapital Bank OJSC to 'BB' from 'BB-'. S&P also affirmed the short-term issuer credit rating at 'B'. The outlook on the long-term rating is stable. S&P said, "We believe Kapital Bank will continue to improve the profitability of its financial operations through 2026-2027. Adjusted for the performance of its ecosystem, which is loss-making, the bank's return on assets improved to 3.2% in 2025 from 3.0% in 2024. This was supported by an increased net interest margin (S&P Global Ratings-defined; 9.5% versus 9.0%) driven by continued growth in high-yield products by building its consumer and individual entrepreneur loan portfolios. Given the bank's current portfolio composition, we expect margins to further widen in 2026 by about 50 basis points, reflecting full-year performance. We also believe expanding into these segments is manageable given that the quality of Kapital Bank's scoring models is commensurate with those of regional peers, and we do not expect cost of risk to materially exceed 2.0% through the cycle. "While the ecosystem remains loss-making, unit economy is improving. Over the last 12 months, the e-commerce business' operating revenue continued to increase, reflecting better unit economy. We understand the group is optimistic about a further increase in revenue, particularly from 2027. Even though our forecast factors in slower growth of the e-commerce business compared to bank's projections, we nevertheless expect Kapital Bank's consolidated profitability--i.e., including the ecosystem--to improve considerably with return on assets increasing to 3.0% in 2027 from 2.5% observed in 2025, significantly exceeding the market average, which we project at 2%. We also expect a gradual improvement in operating efficiency with the S&P Global Ratings-calculated cost-to-income ratio declining to below 60% in 2028 from 62.3% in 2025. Continuous investment in developing its ecosystem and platforms weighs on the bank's operating efficiency, but we expect these investments to normalize and therefore factor in more disciplined non-interest expense growth over the next two years--at 12.0%-15.0% per year down from 20.7% in 2025 and 49% in 2024. "We understand Kapital Bank's nascent ecosystem already adds to customer loyalty. Kapital Bank's efforts to a develop payment business through PashaPay and a marketplace through BirMarket mirror the successful expansion path of banks in Kazakhstan, Russia, and Uzbekistan. In-house data suggests that Kapital Bank has started benefiting from lower customer acquisition costs, as well as higher customer loyalty, lifetime value, and daily usage. The ecosystem keeps contributing to customer base growth--we understand the number of customers increased to 4.0 million in December 2025 from 3.8 million in December 2024, or about 38% of Azerbaijan population. We believe this better prepares Kapital Bank to protect its market share considering various government initiatives such as increased flexibility for individuals to choose their bank for salary or pension receipts. "We upgraded Kapital Bank due to these differentiating factors. Kapital Bank compares favorably with many peers that have a strong business position and operate in similar risky banking systems, notably in Asia-Pacific and Latin America, in terms of volume, market share, clientele size, and profitability. While we are unlikely to change this assessment in light of the Azerbaijan's market structure, we believe that increasing profitability, gradually expanding its ecosystem, and stronger customer acquisition and loyalty warrant a positive rating adjustment. "The stable outlook reflects our expectation that Kapital Bank will successfully execute its strategy and improve profitability on a consolidated basis over the next 12-18 months while building its retail ecosystem. "We could lower the rating if we see that the bank's growth in uncollateralized lending products puts material pressure on its capitalization or asset quality. We could also take a negative rating action if the ecosystem posts weaker results than we expect or the bank fails to improve profitability to levels that materially exceed the systemwide average. "A positive rating action is remote at this stage. It would require business success of the e-commerce venture along with a significant increase in profitability and client base. An upgrade would also depend on us taking a more favorable view on economic risk in Azerbaijan." =========== F R A N C E =========== EXPLEO GROUP: S&P Places 'B-' ICR on CreditWatch Negative --------------------------------------------------------- S&P Global Ratings placed all ratings on CreditWatch with negative implications, including its 'B-' issuer credit ratings on Expleo Group SAS and its subsidiaries, as well as the issue-level ratings on the group's senior secured debt. The negative CreditWatch indicates the possibility of a downgrade in the next three to six months if Expleo Group fails to achieve the conditions required for the maturity extensions to become effective, if it enters into any other transaction that that S&P considers as tantamount to a default, of if it underperforms its base case, leading to persistently very high leverage and its view that the capital structure is unsustainable. Expleo Group announced an amend-and-extend transaction to address the upcoming maturity of its revolving credit facility (RCF) due in March 2027 and EUR610 million term loan B (TLB), due in September 2027. Lenders agreed to extend the maturities by 2.5 years, subject to the successful execution of noncore asset disposals, with a minimum of EUR70 million proceeds, which are not yet secured, to be used for partial debt repayment by September. In addition, macroeconomic headwinds could continue to create significant volatility in performance, with persistent weakness across some key end markets weighing on revenue growth, despite strong growth from the aerospace and defense sectors. This, in turn, could delay the group's deleveraging from our estimate of 11.5x at year-end 2025. S&P said, "We expect Expleo Group's proposed amend-and-extend transaction will alleviate short-term liquidity pressure and refinancing risk. The debt maturity extension becomes effective only upon completion of the asset sales and partial debt repayment. The proposed amend-and-extend transaction is intended to address Expleo Group's upcoming debt maturities by extending the maturity of its existing senior secured facilities by 2.5 years, including the TLB maturity to March 2030 and the RCF maturity to September 2029. The transaction is conditional on the successful execution of planned noncore asset disposals, with disposal proceeds expected to fund prepayments of EUR70 million under the senior secured facilities (both TLB and RCF on a pro-rata basis) before the end of September 2026. In addition, the terms of the agreement provide that the group should repay a total of EUR165 million of senior secured debt with asset disposal proceeds by Sept. 30, 2027 (including the EUR70 million to be completed in 2026), to support deleveraging. Lenders consenting to the amend-and-extend transaction will receive additional payment-in-kind margin on top of the existing 5% cash interest margin on the TLB, as well as other fees, which we consider as adequate compensation in addition to the par prepayment of substantial senior secured debt amounts by Sept. 30, 2027. While the amend-and-extend transaction provides medium-term relief of refinancing and liquidity risk, its structure entails significant execution risk, because it relies heavily on timely asset sales execution and debt repayment. Mitigating this risk is our understanding that the group has already made significant progress on this asset disposal plan. "We assume the group will complete a series of disposals of noncore assets that, in aggregate, represent approximately 17% of forecast 2026 revenue. This will result in reported revenue decline in the next couple of years. Based on the noncore assets management identified for a potential sale, we understand that Expleo Group would need to divest around six of them to generate sufficient proceeds to meet the envisaged debt repayments of about EUR165 million by September 2027 (including at least EUR70 million proceeds in 2026). These assets contribute roughly 17%-18% of EBITDA, implying a meaningful reduction in the group's scale, scope, and diversification. While the disposals will support deleveraging, they would also somewhat shrink the group's operating footprint. Although we do not expect a significant change in our overall assessment of the group's business risk profile, a narrower and more concentrated business scope could increase volatility in profits and increase the risk that a small deviation from our forecasts could have a large impact on credit metrics. "We believe Expleo Group's operating performance remains vulnerable to difficult trading conditions across some of its end markets. Persistent soft macroeconomic conditions will continue to weigh on the outlook of some of Expleo Group's key end markets, including automotive, which still represents more than 20% of the group's revenue base. Original equipment manufacturers will continue to struggle with Chinese competition, electrification, and the stagnating economic environment that constrains customers' purchasing power. That said, the group expects to generate strong growth in the aerospace and defense sector, as demand for military equipment due to geopolitical tensions globally is driving up investments from these clients. Therefore, after the group recorded approximately 8.5% revenue decline in 2025, we forecast a modest rebound to 1.5%-2.0% like-for-like revenue growth in 2026 (before impact from asset sales) increasing to 2.5%-3.0% in 2027. In addition, we believe EBITDA margins will significantly improve in 2026 as the group reaps the benefits of its "Project Spark" cost efficiency program, which it implemented in 2025, along with improved operating leverage as revenue growth materializes. In addition, Expleo Group has launched a reorganization of its activities into two business units, engineering and technology, which management expects will result in a leaner cost structure and support profitability gains. Taking these factors into account, we anticipate an EBITDA margin rebound to approximately 8.5% in 2026 from our estimate of 5.8% in 2025, further supported by a reduction in restructuring costs. We project further improvements in 2027 with adjusted EBITDA margins increasing to above 9%." Revenue recovery, profitability improvement, and debt repayments with proceeds from the required asset sales will result in deleveraging toward 8.0x in 2026 and 7.1x in 2027. But free operating cash flow (FOCF) after lease payments will remain negative until 2027. S&P said, "We expect Expleo Group to focus on preserving cash and project minimum capital expenditure (capex) at less than 1% of revenue, and strict discipline on working capital. Despite this, pressure on revenue and high cash-outs linked to nonrecurring costs will result in negative FOCF this year. After lease payments, we expect FOCF will turn slightly positive only in 2028. We view positively the improvement in funds from operations cash interest coverage to 1.4x-1.8x in 2026-2027, from our expectation of 0.9x in 2025, supported by decreasing cash interest burden assuming partial debt repayment. Nevertheless, this scenario assumes the materialization of revenue and operating efficiency initiatives, while macroeconomic conditions remain uncertain and could delay the recovery in the group's credit metrics. As evidenced by the group's recent operating underperformance and history of weak or negative FOCF, Expleo Group's vulnerability to adverse trading conditions could derail improvements in credit metrics, notwithstanding management's efforts to preserve profitability and cash generation." The CreditWatch negative placement reflects execution risk around the asset disposals and the possibility of a downgrade in the next three to six months if Expleo Group: -- Fails to execute the required asset disposals and to repay at least EUR70 million of senior secured debt by Sept. 30, 2026, or at latest Dec. 31, 2026, which are a condition to the effective extension of the debt maturities; -- Enters into any other transaction that S&P considers as tantamount to a default; or -- Underperforms S&P's base case, leading to persistently very high leverage and its view that the capital structure is unsustainable. S&P said, "Conversely, we could remove the ratings from CreditWatch and affirm the 'B-' rating if Expleo Group successfully extends its debt maturities, while delivering improved operating performance with EBITDA margin increasing in line with our expectations, resulting in material deleveraging in 2026." LABORATOIRE EIMER: Fitch Affirms 'B' Long-Term IDR, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has affirmed Laboratoire Eimer Selas's (Lab Eimer) Long-Term Issuer Default Rating (IDR) at 'B' with a Stable Outlook. Lab Eimer is the owner of French lab-testing company Biogroup. Fitch has assigned CAB societe d exercice liberal par actions simplifiee's (CAB) proposed new senior secured bond an expected senior secured debt instrument rating at 'B+(EXP)' with a Recovery Rating of 'RR3', and has affirmed the instrument rating of the existing senior secured term loan B at 'B+'/'RR3'. The Outlook reflects its expectation that Biogroup will continue to generate positive free cash flow (FCF) and maintain leverage within its sensitivities, despite probable reimbursement pressure in France from 2027. It considers improved refinancing risk following the proposed transaction, with an extension of senior secured debt maturities to August 2031 and a EUR400 million reduction of existing senior secured debt, combined with the exchange of the EUR250 million senior unsecured notes to senior secured notes maturing in August 2031. The IDR balances aggressive gross leverage with a defensive social infrastructure-like healthcare business model, with well-managed operations despite sector challenges supporting strong margins and resilient FCF generation. Key Rating Drivers Transaction Improves Rating Headroom: The proposed transaction will improve refinancing risk and Biogroup's debt maturity profile, extending senior secured debt maturities from February 2028 to August 2031. Gross leverage will also improve following the planned total debt reduction by EUR400 million using existing cash on balance sheet. However, Fitch estimates FCF to be impacted by a higher cost of debt compared to the legacy financing despite the reduced debt amount. EBITDA Expansion until 4Q26: Fitch believes revenue and margins will expand gradually and sequentially each quarter until 4Q26 thanks to the pricing freeze agreed until end-2026 in France, as volumes grow and lead to margin expansion through operating leverage. This follows the decline in 4Q24 and 1Q25 due to the sharper-than-expected tariff cut in France from September 2024, which Fitch has expected to lower Biogroup's portfolio pricing in France by about 8%. The industry reached a new agreement with the regulator in December 2024 to freeze all reimbursement pricing in 2026 and modestly increase selected reimbursements in 2025 with an anticipated 1.75% average price impact. Reimbursement Risks from 2027: The medical laboratory testing industry remains exposed to the uncertainties of the medium-term regulatory framework, starting in 2027 in France with the new triannual act. The framework may include closer scrutiny of the sector's profitability and growing market power of the top six lab-testing groups in France, leading to more stringent reimbursement terms. Fitch believes Biogroup's well-managed operations have adequate capacity to mitigate inflation and reimbursement pressure by generating further cost savings. High Leverage, Deleveraging Expected: Fitch expects EBITDAR gross leverage to improve towards 7.6x in 2025 compared with over 8x in 2024. EBITDAR gross leverage temporarily exceeded its 7.0x negative sensitivity since 2023 due to margin contraction. Fitch estimates EBITDAR gross leverage to improve to below 7.0x in 2026 aided by the planned EUR400 million total debt reduction. The company has the potential to deleverage further organically, although this will be contingent on its financial policy. Healthy FCF Sustains Rating: The rating reflects that Biogroup has maintained healthy FCF in recent years despite the sharp decline of Covid-19 test revenue, margin contraction and higher variable interest rates, partly mitigating higher leverage. FCF margin contracted to mid-single digits in 2024 from high-single digits in 2023. Fitch expects FCF margin to remain in the mid-single digits over 2025-2028. Biogroup's fixed charge coverage has fluctuated around 2.0x since 2023 and Fitch estimates that it will remain at a similar level in 2026 and 2027. Financial Policy to Drive IDR: Biogroup's predictable financial policy and funding mix have previously supported its highly acquisitive growth strategy. Fitch assumes FCF will be fully reinvested in the purchase of the stakes of biologist minority shareholders and bolt-on M&A, with mid-scale acquisitions funded with a mix of own cash and new debt. Fitch assumes that potential larger M&A over EUR500 million would include equity co-funding. Fitch continuously monitors and assess Biogroup's financial policy and capital-allocation priorities, including changes in its tolerance for higher financial risks. Defensive Business Model: Biogroup's business model is defensive with stable, non-cyclical revenues and high and resilient operating margins. The company benefits from scale-driven operating efficiencies and proven M&A execution and integration, in addition to high barriers to entry as it operates in a highly regulated market. Acquisitions in other geographies reduce the impact of adverse regulatory changes in any single country. Peer Analysis Biogroup's 'B' IDR is in line with that of its direct peers Inovie Group (B/Negative) and Ephios Subco 3 S.a.r.l (Synlab, B/Stable), both of which are also European routine medical lab-testing groups. The industry benefits from a defensive, non-cyclical business model with stable demand, given the infrastructure-like nature of lab-testing services. Biogroup and its direct peers' profitability, cash generation and leverage benefitted significantly from Covid-19 related activity in 2020 to end-2022, before it normalised at much lower levels in 2023, causing margins to reverse below pre-pandemic levels. Biogroup's high and stable operating and cash flow margins are among the highest in its peer group, which Fitch largely attributes to the particularities of the French and Belgian regulatory regimes and the company's exposure to the private lab-testing market. Biogroup's expected profitability is higher than Synlab's and similar to or slightly higher than of French peers. However, its FCF generation is affected by dividends paid to minority shareholders, who are biologists in the underlying operating companies. The lab-testing market in Europe has attracted significant private equity investment, leading to highly leveraged financial profiles. Biogroup is materially smaller and geographically concentrated, more exposed to the routine lab-testing market and has much higher leverage than investment-grade global medical diagnostic peers such as Eurofins Scientific S.E. (BBB-/Stable) and Quest Diagnostics Inc. (BBB+/Stable). Fitch’s Key Rating-Case Assumptions - Revenue to grow yoy by 4.1% in 2026, 2% in 2027 and 2028, supported mainly by organic growth - EBITDA margin to improve slightly in in 2026 and remain broadly stable over 2027-2029 - Dividends to non-controlling interests of average EUR20 million over the forecast period - Small net working-capital outflows over 2026-2028 - Capex on average at 4.0% of sales in 2026 and thereafter - Purchase of minority stakes of biologist shareholders derived from the exercise of put options at EUR50 million a year - No common dividend payments Recovery Analysis Fitch follows a going-concern (GC) approach instead of balance-sheet liquidation given the quality of Biogroup's network and strong national market position. Expected GC EBITDA is at roughly a 25% discount to projected 2026 EBITDA, reflecting a post-restructuring EBITDA after dividends paid to minority shareholders at operating company level. Distressed enterprise value/EBITDA multiple is 6.0x, which reflects Biogroup's strong market position, and product and geographic diversification. Structurally higher-ranking debt of around EUR139 million at operating companies to rank on enforcement ahead of its revolving credit facility (RCF), term loan B and senior secured notes. According to the announced refinancing terms, the senior secured term loan B and senior secured notes together at around EUR2.75 billion and its RCF of EUR280 million, which Fitch assumes to be fully drawn upon distress, rank equally among themselves after higher-ranking debt. The senior unsecured bond ranks third in priority. After deducting 10% for administrative claims from the estimated post-restructuring enterprise value, its principal analysis generates a ranked recovery in the 'RR3' band for the senior secured debt, leading to a 'B+' senior secured instrument rating (unchanged). Fitch estimates the senior unsecured notes, before the planned exchange of senior unsecured notes into senior secured notes, to generate a ranked recovery in the 'RR6' band, leading to a 'CCC+' senior unsecured instrument rating. Upon completion of the notes exchange Fitch will withdraw, the senior unsecured debt rating. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Flat to negative like-for-like sales growth and declining EBITDA margins due to competitive pressures or adverse regulatory changes - EBITDAR gross leverage above 7.0x on a sustained basis - FCF margin falling to low single digits on a sustained basis - EBITDAR fixed charge coverage below 1.5x on a sustained basis Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - A larger scale, increased product/geographical diversification, full realisation of contractual savings and synergies associated with acquisitions or voluntary prepayment of debt from excess cash flow - EBITDAR gross leverage below 5.5x on a sustained basis - Mid-to-high single-digit FCF margins on a sustained basis - EBITDAR fixed charge coverage trending above 2.0x on a sustained basis Liquidity and Debt Structure Fitch views Lab Eimer's liquidity as comfortable. This is based on a high freely available cash balance of EUR531 million (excluding EUR100 million that Fitch treats as not readily available for debt service and before the potential repayment of debt) at end-December 2025. The company also has a committed RCF of EUR271 million maturing in August 2027 (EUR280 million to be extended by 3.5 years to February 2031), which was fully undrawn. The company has no material debt maturities until February 2028 (to be extended to August 2031). Fitch forecasts adequate liquidity for 2026-2028 based on resilient positive FCF generation and its forecasts of annual M&A activity (including purchases of minority stakes from biologists) averaging EUR50 million a year, which could be funded by FCF generation and the RCF. Issuer Profile Biogroup is one of Europe's largest providers of routine diagnostic tests in the private lab-testing market, with leading shares in France, Belgium and Luxembourg, and a growing presence in Iberia. Summary of Financial Adjustments Fitch has computed Biogroup's Fitch-defined lease liabilities by multiplying Fitch-defined lease cost by 5.5x, in line with peer multiples used for the laboratory testing sector. 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 Laboratoire Eimer Selas. ESG Considerations Fitch does not provide ESG relevance scores for Biogroup. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- Laboratoire Eimer Selas LT IDR B Affirmed B senior unsecured LT CCC+ Affirmed RR6 CCC+ CAB societe d exercice liberal par actions simplifiee senior secured LT B+(EXP)Expected Rating RR3 senior secured LT B+ Affirmed RR3 B+ ============= I R E L A N D ============= ARAGVI FINANCE: S&P Rates New Senior Secured Notes Rated 'B' ------------------------------------------------------------ S&P Global Ratings assigned its 'B' long-term issue-level rating on the proposed senior secured notes to be issued by Aragvi Finance International DAC, the wholly owned financing subsidiary of Aragvi Holding International Ltd. (Aragvi, also Trans-Oil Group; B/Stable/--). The rating is in line with the long-term issuer credit rating on Aragvi and supported by the relatively lower amount of prior ranking debt in the capital structure, comprising short-term and long-term bank borrowings. Aragvi intends to use the net proceeds to partially refinance (through a concurrent tender offer) its existing $650 million senior secured notes due November 2029, repay a portion of its working capital-linked short-term bank borrowings, and pay transaction fees. S&P said, "We view the transaction as positive, as it extends the debt maturity profile in the capital structure, while moderately improving liquidity position. We forecast tight headroom under our key ratio for the rating, EBITDA interest coverage, which is only slightly above our downside rating trigger of less than 2.0x at 2.1x in the next 12-18 months. The transaction comes on the back of the group's first-half fiscal 2026 (ending June 30) results, which point to a weaker-than-expected trend with a trailing 12-month S&P Global Ratings-adjusted net debt to EBITDA (after readily marketable inventories) of 4.7x with cash funds from operations (FFO) to debt of about 8.7%. The weaker EBITDA margin of 9.1% (12 months trailing) reflecting excess capacity in the crushing and refining division following the commission of a new rapeseed processing facility in Moldova mainly drives the trend. "We also note the impact on adjusted debt of the Frial port terminal facility's acquisition in Romania. For fiscal 2026, we forecast our adjusted debt leverage of 3.2x-3.3x and FFO to debt at about 13%, broadly stable year-on-year levels. We expect adjusted EBITDA margin improvement toward 9.4%-9.5% for the full year, supported by more a favorable margin-wise crop mix and improving capacity utilization. That said, we forecast continued negative free operating cash flow (FOCF) after working capital, capital expenditure, and cash interest paid of about $60 million-$70 million given increased volumes and ongoing capital investments. "We continue to monitor the group's ability to cover its financing costs (bank and bond debt), which we forecast at about $105 million-$120 million in the next 12-18 months with EBITDA interest coverage being our key metric. We are also monitoring the group's ability to emerge as FOCF positive eventually. Prolonged weakness in either metric could put pressure on our ratings." ARINI EUROPEAN IX: S&P Assigns B- (sf) Rating to Class F Notes -------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Arini European CLO IX DAC's class A loan and class A, B, C, D, E, and F notes. At closing, the issuer also issued unrated subordinated notes. This is a European cash flow CLO transaction, securitizing a pool of primarily syndicated senior secured loans or bonds. The portfolio's reinvestment period will end approximately 4.50 years after closing. Under the transaction documents, the rated notes will pay quarterly interest unless a frequency switch event occurs. Following this, the notes will switch to semiannual payments. The ratings assigned to the notes reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows and excess spread. -- 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 2,644.74 Default rate dispersion 568.25 Weighted-average life (years) 5.07 Obligor diversity measure 172.82 Industry diversity measure 27.23 Regional diversity measure 1.36 Transaction key metrics Total par amount (mil. EUR) 500 Defaulted assets (mil. EUR) 0 Number of performing obligors 196 Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 0.20 Target 'AAA' weighted-average recovery (%) 36.40 Target weighted-average spread (net of floors; % 3.51 Target weighted-average coupon (%) 4.49 Rating rationale The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, S&P conducted its credit and cash flow analysis by applying its criteria for corporate cash flow CDOs. S&P said, "In our cash flow analysis, we modeled the EUR500 million target par amount, the covenanted weighted-average spread of 3.45%, the covenanted weighted-average coupon of 4.00%, and the target weighted-average recovery rate 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. "Under our structured finance sovereign risk criteria, we consider the transaction's exposure to country risk is sufficiently limited at the assigned ratings, as the exposure to individual sovereigns does not exceed the diversification thresholds outlined in our criteria. "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 is bankruptcy remote, in line with our legal criteria. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe our ratings are commensurate with the available credit enhancement for the class A to F notes. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B to E notes is commensurate with higher ratings than those assigned. However, as the CLO will have a reinvestment period, during which the transaction's credit risk profile could deteriorate, we capped our ratings on these notes. "For the class F notes, our credit and cash flow analysis indicates that the available credit enhancement could withstand stresses commensurate with a lower rating. However, we applied our 'CCC' rating criteria, resulting in a 'B- (sf)' rating on this class of notes." The ratings uplift for the class F notes reflects several key factors, including: -- The class F notes' available credit enhancement, which is in the same range as that of other CLOs we have rated and that have recently been issued in Europe. -- The portfolio's average credit quality, which is similar to other recent CLOs. -- S&P said, "Our model generated break-even default rate at the 'B-' rating level of 23.07% (for a portfolio with a weighted-average life of 5.07 years), versus if we were to consider a long-term sustainable default rate of 3.2% for 5.07 years, which would result in a target default rate of 16.22%." -- S&P does not believe that there is a one-in-two chance of this note defaulting. -- S&P does not envision this tranche defaulting in the next 12-18 months. S&P said, "Following this analysis, we consider that the available credit enhancement for the class F notes is commensurate with the assigned 'B- (sf)' rating. "In addition to our standard analysis, to indicate how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we also included the sensitivity of the ratings on the class 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 or limit assets from being related to certain industries. Since the exclusion of assets from these industries does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities." Arini European CLO IX DAC is a European cash flow CLO securitization of a revolving pool, comprising euro-denominated senior secured loans and bonds issued mainly by speculative-grade borrowers. Arini Capital Management US LLC is the collateral manager. Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate§ A AAA (sf) 207.00 38.00 Three/six-month EURIBOR plus 1.30% A loan AAA (sf) 103.00 38.00 Three/six-month EURIBOR plus 1.30% B AA (sf) 55.00 27.00 Three/six-month EURIBOR plus 2.00% C A (sf) 30.00 21.00 Three/six-month EURIBOR plus 2.50% D BBB- (sf) 35.00 14.00 Three/six-month EURIBOR plus 3.45% E BB- (sf) 22.50 9.50 Three/six-month EURIBOR plus 6.20% F B- (sf) 15.00 6.50 Three/six-month EURIBOR plus 8.79% Sub NR 36.20 N/A N/A *The ratings assigned to the class A loan and 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. EIRCOM HOLDINGS: Fitch Affirms 'B+' Long-Term IDR, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has affirmed eircom Holdings (Ireland) Limited's (eir) Long-Term Issuer Default Rating (IDR) at 'B+' with a Stable Outlook. Fitch has also affirmed the senior secured ratings of eir's subsidiaries, Eircom Finco S.a r. l. and eircom Finance Designated Activity Company, at 'BB-' with a Recovery Rating of 'RR3'. The ratings reflect eir's market-leading position as Ireland's incumbent fixed-line operator, with a fully converged product offering and the largest fibre-to-the-home (FttH) network in the country. Eir continues to execute well in retail fixed and mobile, despite a more competitive market environment. However, wholesale remains under pressure from fibre overbuild. There is limited leverage headroom for the rating, due to peak network investment and competitive pressure on the wholesale segment. Fitch expects greater deleveraging capacity only when the fibre roll-out is completed. However, leverage headroom is likely to remain limited, as lower capital intensity is offset by increased shareholder distributions and dividends paid minorities. Key Rating Drivers Limited Leverage Headroom: Fitch forecasts consolidated Fitch-defined EBITDA net leverage at 5.3x in 2026, providing limited headroom relative to its loosened 5.5x downgrade sensitivity. Leverage should remain steady at about 5.3x in the medium term, as improved FCF following completion of the FttH rollout is likely to be offset by higher shareholder distributions and minority dividends paid by FNI. Fitch expects cash flow from operations (CFO) less capex/debt to be well within the sensitivities, gradually improving towards the higher threshold by 2029. Fitch has loosened the EBITDA net leverage sensitivities to 4.7x-5.5x to reflect eir's high fixed and mobile market share, strong incumbent fixed market position, and expanding fibre network coverage across Ireland. Minority Dividends to Pressure Leverage: Fitch expects FNI to pay dividends to minority shareholders in the range of EUR30 million-EUR45 million annually in 2026-2029. These payments affect Fitch-defined leverage metrics, as they are deducted from EBITDA in Fitch's calculation. Higher-than-expected minority distributions could pressure leverage metrics and further narrow rating headroom, unless offset by stronger-than-expected EBITDA growth. Leading Fibre Network: eir remains Ireland's largest fixed network operator, passing 1.5 million premises with FttH in 2025, or about 80% of its 1.9 million target. This is out of its total 2.2 million lines in its high-speed network, including digital subscriber lines (DSL). The roll-out progress supports eir's position in retail broadband and provides a scale advantage over alternative networks, especially outside the main urban overbuild areas. Increased Competition in Fixed: Market competition has increased, as SIRO has largely completed its 700,000 FttH roll-out plan, while Virgin Media Ireland Limited (VMI, B+/Stable) continues to expand its network. VMI has passed approximately 70% of its 1 million homes target with fibre and expects to largely complete the investment in 2026. Fitch expects the competition to stabilise once all operators complete the fibre upgrades. Wholesale Challenges: Structural pressure in wholesale broadband saw eir's wholesale base decline by 24,000 subscriptions, or 5.1%, in 2025. Rising network overbuild and competition as other networks expand their fibre footprints were reflected in eir's wholesale subscriber losses from Vodafone Ireland's customer migration to SIRO. This was partly offset by eir's retail fibre base expansion of 1%, as fibre penetration of its broadband base reached 95%. Fitch expects wholesale losses to moderate as competing builds near completion, although eir's regulated status limits its pricing response timing and gives greater flexibility to competitors. Retail Resilience: Retail performance remains resilient, despite stiffer competition. Commercial momentum has recovered from the Storm Éowyn cyclone disruption in 1Q25, with stronger retail broadband net additions in 2H25 and solid mobile postpaid growth. eir benefits from solid convergence, a strong fixed base, Ireland's largest 5G network and its SIM-only proposition through GoMo, its flanker brand, which surpassed 400,000 customers. Fixed and mobile markets show rational pricing, with annual CPI-linked rises supporting revenue stability. Steady EBITDA Margin: Fitch expects the EBITDA margin to stabilise at about 43.5% in 2026, reflecting incremental commercial investments, including EUR8 million of additional handset subsidies to drive 5G adoption, offset by cost discipline. The margin narrowed to 43.4% in 2025, from 44.2% in 2024, on wholesale losses. Fitch forecasts a gradual improvement to about 44% by 2029, as the competitive market environment steadies, fibre take-up increases and network maintenance costs decline, partially offset by lower-margin retail wins on NBI's network. Offnet Customers on NBI: eir has signed a wholesale agreement with NBI, whose state-subsidised rural broadband programme covers 350,000-400,000 premises and is nearing completion in 2026. eir's DSL customers within NBI's coverage area will migrate to NBI's network when switching to fibre, but eir will retain the commercial relationship, supporting eir's revenue and market share. However, this revenue carries lower margins, which will partially offset the positive margin impact from fibre penetration on eir's own network. Improving FCF Generation: Fitch expects lower capex to boost eir's pre-dividend FCF margin to 9.4% in 2026, after a decline to 3.4% in 2025 (2024: 7.2%) with a peak in fibre roll-out capex of ERU283 million. The margin should reach 13.6% by 2029, as capex falls by about EUR100 million compared with 2025 on FttH rollout completion and mobile network upgrades. Improved FCF will boost deleveraging capacity, but Fitch expects dividends to drive a neutral FCF margin of -0.3% to 0.9% in 2028-2029, keeping leverage flat. Peer Analysis eir's ratings reflect its position as Ireland's leading fixed-line operator. Compared to European telecom incumbent peers, Royal KPN N.V (BBB/Stable) and BT Group plc (BBB/Stable), eir has higher leverage, smaller scale, a largely domestic focus and a lack of leadership in the mobile segment. It has a similar EBITDA margin, but its pre-dividend FCF margin has historically been lower due to higher capex as a share of revenue. eir is more tightly rated than 'BB-' European telecom peers, like Telenet Group Holding N.V (BB-/Negative), and 'B+' peers, like VMI. This reflects the 49% stake sale in its fixed-line network - FNI - competitive pressure in the retail and wholesale markets, smaller scale and structural revenue declines from legacy voice. The 2022 FNI sale to InfraVia Capital Partners has weakened eir's operating profile compared with fully integrated telecom operator peers, leading to tighter EBITDA net leverage thresholds for its rating. This is because FNI is a critical local-access network infrastructure that provides stable cash flow. Fitch’s Key Rating-Case Assumptions - Revenue decline of 0.5% in 2026, increasing by 0.6% and 0.8% in 2027 and 2028, respectively - Fitch-defined EBITDA margin of 43.3% in 2026, gradually rising to 43.7% by 2028 - Working-capital cash outflow at 0.4% of revenue every year between 2026 and 2028 - Capex (excluding spectrum) at 17.4% ofrevenue in 2026 and 17.1% in 2027, decreasing to 15.1% by 2028 - Dividend payments between EUR150 million-170 million a year in 2025-2028 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 (bbb, Lower), Sector Characteristics (bbb, Lower), Market and Competitive Positioning (bb, Higher), Diversification and Asset Quality (bbb-, Moderate), Company Operational Characteristics (bb+, Moderate), Profitability (bb+, Lower), Financial Structure (b, Higher), and Financial Flexibility (b+, Moderate). - The quantitative financial subfactors are based on standard CRT financial period parameters: 20% weight for the latest historical year 2025, 40% for the forecast year 2026 and 40% for the forecast year 2027. - 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 SCP is 'b+'. Recovery Analysis Key Recovery Rating Assumptions The recovery analysis assumes eir would be a going concern in a bankruptcy and be reorganised rather than liquidated - 10% administrative claim - Post-reorganisation EBITDA of EUR285 million, which excludes EBITDA from FNI - Distressed enterprise value at 4.5x EBITDA - Total amount of senior debt claims of EUR2.2 billion, including full drawings on an available RCF of EUR50 million The Recovery Ratings for senior secured debt at the holding company assume the sale of the 50.01% equity stake in FNI for EUR350 million. The calculated recovery implies a one-notch uplift to the ratings from the IDR, leading to a senior secured debt rating of 'BB-'/'RR3'. This is consistent with the current senior secured debt rating. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Fitch-defined EBITDA net leverage above 5.5x for a sustained period, Fitch will also be guided by calculations of these metrics on a proportionate consolidation basis - CFO less capex/total debt remaining below 3% for a sustained period, driven by lower EBITDA or higher capex - Deterioration in the regulatory or competitive environment that weakens operating trends Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - A strengthened operating profile and competitive capability, demonstrated by stable fixed broadband market share with increasing fibre penetration and a return to steady underlying revenue and EBITDA - Fitch-defined EBITDA net leverage at or below 4.7x on a sustained basis. Fitch will also be guided by calculations of these metrics on a proportionate consolidation basis - CFO less capex/total debt consistently above 6% Liquidity and Debt Structure eir had EUR154 million in cash and equivalents at end-2025. Its liquidity position was further supported by a EUR50 million revolving credit facility (RCF) and, at the FNI level, a EUR35 million RCF and EUR200 million capex facility of which EUR87 million was drawn. Fitch expects FCF generation to turn positive in 2028 and further support liquidity. eir has a long-dated maturity profile, with EUR1.2 billion of debt falling due in 2029, EUR850 million in 2031 and EUR985 million in 2032. Issuer Profile eir is the incumbent telecom operator in Ireland, its sole market. It is the third-largest mobile operator, but the leading fixed-line operator and is rolling out its FttH network across Ireland. 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 eir. 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 ----------- ------ -------- ----- Eircom Finco S.a r. l. senior secured LT BB- Affirmed RR3 BB- eircom Holdings (Ireland) Limited LT IDR B+ Affirmed B+ eircom Finance Designated Activity Company senior secured LT BB- Affirmed RR3 BB- GROSVENOR PLACE 2022-1: S&P Rates Class F-R-R Notes 'B- (sf)' ------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Grosvenor Place CLO 2022-1 DAC's class X-R-R, A-R-R, B-R-R, C-R-R, D-R-R, E-R-R, and F-R-R reset notes. At closing, the issuer had unrated subordinated notes outstanding from the existing transaction and also issued an additional EUR252.55 million subordinated notes. Subject to an extraordinary resolution from the existing subordinated noteholders, both the existing and the new subordinated notes will be subject to an exchange for EUR34.55 million of new subordinated notes. This transaction is a reset of the already existing transaction that closed in November 2022 and then refinanced in May 2024 (see "Related Research"). The issuance proceeds of the refinancing notes were used to redeem the refinanced debt (the original transaction's class A-R, B-R, C-R, D-R, E-R, and F-R notes, for which we withdrew our ratings at the same time), and pay fees and expenses incurred in connection with the reset. The portfolio's reinvestment period will end on Oct. 30, 2030. Under the transaction documents, the rated notes will pay quarterly interest unless a frequency switch event occurs. Following this, the notes will switch to semiannual payments. The ratings assigned to the reset notes reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated debt 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 our counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,747.06 Default rate dispersion 565.11 Weighted-average life (years) 4.50 Weighted-average life (years) including reinvestment 4.50 Obligor diversity measure 128.83 Industry diversity measure 23.84 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 2.36 Actual fixed rate assets (%) 0.50 Portfolio target par amount (mil. EUR) 400 Actual 'AAA' weighted-average recovery (%) 36.24 Actual weighted-average spread 3.62 Actual weighted-average coupon 3.19 Rating rationale S&P said, "The portfolio is well-diversified at closing, primarily comprising broadly syndicated speculative-grade senior secured term loans and bonds. Therefore, we conducted our credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. "In our cash flow analysis, we used the EUR400 million target par amount, the actual weighted-average spread (3.62%), covenanted weighted-average coupon (4.75%), and the target weighted-average recovery rate at each rating level. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "Under our structured finance sovereign risk criteria, the transaction's exposure to country risk is sufficiently mitigated at the assigned ratings. "The transaction's legal structure and framework is bankruptcy remote, in line with our legal criteria. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B-R-R to E-R-R notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO will be in its reinvestment phase until Oct. 30, 2030, during which the transaction's credit risk profile could deteriorate, we capped our assigned ratings on these notes. "For the class X-R-R and A-R-R notes, our credit and cash flow analysis indicates that the available credit enhancement could withstand stresses commensurate with the assigned rating. "For the class F-R-R notes, our credit and cash flow analysis indicates that the available credit enhancement could withstand stresses commensurate with a lower rating. However, we have applied our 'CCC' rating criteria, resulting in a 'B- (sf)' rating on this class of notes." The ratings uplift for the class F-R-R notes reflects several key factors, including: -- The class F-R-R notes' available credit enhancement, which is in the same range as that of other CLOs we have rated and that have recently been issued in Europe. -- The portfolio's average credit quality, which is similar to other recent CLOs. -- S&P said, "Our model generated break-even default rate at the 'B-' rating level of 24.33% (for a portfolio with a weighted-average life of 4.50 years), versus if we were to consider a long-term sustainable default rate of 3.2% for 4.50 years, which would result in a target default rate of 14.40%." -- S&P does not believe that there is a one-in-two chance of this note defaulting. -- S&P does not envision this tranche defaulting in the next 12-18 months. S&P said, "Following this analysis, we consider that the available credit enhancement for the class F-R-R notes is commensurate with the assigned 'B- (sf)' rating. "In addition to our standard analysis, to indicate how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we also included the sensitivity of the ratings on the class X-R-R to E-R-R notes based on four hypothetical scenarios. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the above scenario analysis results for the class F-R-R notes." Environmental, social, and governance S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector (see "ESG Industry Report Card: Collateralized Loan Obligations," March 31, 2021). Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. For this transaction, the documents prohibit or limit assets from being related to certain industries. Since the exclusion of assets from these industries does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities." Grosvenor Place CLO 2022-1 DAC is a European cash flow CLO securitization of a revolving pool, comprising euro-denominated senior secured loans and bonds issued mainly by speculative-grade borrowers. CQS (UK) LLP is the collateral manager. Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate§ X-R-R AAA (sf) 1.50 N/A Three/six-month EURIBOR plus 1.000% A-R-R AAA (sf) 244.00 39.00 Three/six-month EURIBOR plus 1.395% B-R-R AA (sf) 43.60 28.10 Three/six-month EURIBOR plus 2.200% C-R-R A (sf) 25.40 21.75 Three/six-month EURIBOR plus 2.750% D-R-R BBB- (sf) 28.00 14.75 Three/six-month EURIBOR plus 4.000% E-R-R BB- (sf) 17.20 10.45 Three/six-month EURIBOR plus 6.510% F-R-R B- (sf) 14.60 6.80 Three/six-month EURIBOR plus 8.100% Sub. notes NR 34.55 N/A N/A *The ratings assigned to the class X-R-R, A-R-R, and B-R-R notes address timely interest and ultimate principal payments. The ratings assigned to the class C-R-R, D-R-R, E-R-R, and F-R-R notes address ultimate interest and principal payments. §The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. EURIBOR--Euro Interbank Offered Rate. Sub. notes--Subordinated notes. NR--Not rated. N/A--Not applicable. JUBILEE CLO 2016-XVII: S&P Assigns B- (sf) Rating to Cl. F-R Notes ------------------------------------------------------------------ S&P Global Ratings assigned its credit ratings to Jubilee CLO 2016-XVII DAC's class A loan and class X, A-R, B-1-R, B-2-R, C-R, D-R, E-R, and F-R notes. At closing, the issuer has unrated subordinated notes outstanding from the existing transaction and has issued additional subordinated notes. Subject to an extraordinary resolution from the existing subordinated noteholders, both the existing and the additional subordinated notes are to be exchanged for EUR41.49 million of subordinated notes. The reinvestment period will be approximately 4.4 years, while the noncall period will be 1.5 years after closing. Under the transaction documents, the rated notes and loan will pay quarterly interest unless there is a frequency switch event. Following this, the notes and loan will switch to semiannual payments. The ratings assigned to the notes and loan 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 and loan 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 2,771.23 Default rate dispersion 583.69 Weighted-average life (years) 4.28 Obligor diversity measure 139.05 Industry diversity measure 21.88 Regional diversity measure 1.20 Weighted-average life (years) extended to cover the length of the reinvestment period 4.44 Transaction key metrics Total par amount (mil. EUR) 375 Defaulted assets (mil. EUR) 0 Number of performing obligors 168 Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 2.53 Target 'AAA' weighted-average recovery (%) 35.75 Actual weighted-average spread net of floors (%) 3.64 Actual weighted-average coupon (%) 2.87 Rationale S&P's ratings reflect our assessment of the collateral portfolio's credit quality, which has a weighted-average rating of 'B'. The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and bonds. Therefore, S&P conducted its credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. S&P said, "In our cash flow analysis, we used the EUR375.00 million target par amount, the covenanted weighted-average spread of 3.62%, the target weighted-average coupon of 2.87%, and the covenanted weighted-average recovery rate at all 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. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "Under our structured finance sovereign risk criteria, the transaction's exposure to country risk is sufficiently mitigated at the assigned ratings. "The transaction's legal structure and framework is bankruptcy remote, in line with our legal criteria (see "Asset Isolation And Special-Purpose Entity Methodology,” May 29, 2025). "Our credit and cash flow analysis indicates that the available credit enhancement for the class B-1-R to D-R notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO will be in its reinvestment phase starting from the effective date, during which the transaction's credit risk profile could deteriorate, we have capped our ratings assigned to the notes." The class A Loan, class X, A-R, and E-R notes can withstand stresses commensurate with the assigned ratings. The class F-R notes' current BDR cushion is negative at the assigned rating. Nevertheless, based on the portfolio's actual characteristics and additional overlaying factors, including its long-term corporate default rates and recent economic outlook, S&P believes this class is able to sustain a steady-state scenario, in accordance with our criteria. S&P's analysis further reflects several factors, including: -- The class F-R notes' available credit enhancement, which is in the same range as that of other CLOs we have rated and that have recently been issued in Europe. -- S&P's model-generated portfolio default risk, which is at the 'B-' rating level at 22.10% (for a portfolio with a weighted-average life of 4.44 years) versus 14.22% if it was to consider a long-term sustainable default rate of 3.2% for 4.44 years. -- Whether the tranche is vulnerable to nonpayment in the near future. -- If there is a one-in-two chance for this note to default. -- If S&P envisions this tranche to default in the next 12-18 months. S&P said, "Following this analysis, we consider that the available credit enhancement for the class F notes is commensurate with the assigned 'B- (sf)' rating. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe that our ratings are commensurate with the available credit enhancement for all rated classes of notes and loan. "In addition to our standard analysis, we have also included the sensitivity of the ratings on the class X to E-R notes, based on four hypothetical scenarios. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the above scenario analysis results for the class F-R notes." Environmental, social, and governance S&P regards the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with its 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 industries does not result in material differences between the transaction and S&P's ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities. Jubilee CLO 2016-XVII DAC is a European cash flow CLO securitization of a revolving pool, comprising euro-denominated senior secured loans and bonds issued mainly by speculative-grade borrowers. The transaction is managed by BSP CLO Management L.L.C. Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate§ X AAA (sf) 4.00 N/A Three/six-month EURIBOR plus 1.00% A-R AAA (sf) 202.50 38.00 Three/six-month EURIBOR plus 1.35% A Loan AAA (sf) 30.00 38.00 Three/six-month EURIBOR plus 1.35% B-1-R AA (sf) 34.60 27.71 Three/six-month EURIBOR plus 2.10% B-2-R AA (sf) 4.00 27.71 5.10% C-R A (sf) 22.60 21.68 Three/six-month EURIBOR plus 2.85% D-R BBB- (sf) 26.60 14.59 Three/six-month EURIBOR plus 3.90% E-R BB- (sf) 16.50 10.19 Three/six-month EURIBOR plus 6.70% F-R B- (sf) 13.00 6.72 Three/six-month EURIBOR plus 8.90% Z NR 1.80 N/A N/A Sub notes NR 41.49 N/A N/A *The ratings assigned to the class A Loan, and class X, A-R, B-1-R, and B-2-R notes address timely interest and ultimate principal payments. S&P's ratings address ultimate interest and principal payments on the remaining rated notes. The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. EURIBOR--Euro Interbank Offered Rate. NR--Not rated. N/A--Not applicable. KETTLES PARK: S&P Assigns B- (sf) Rating to Class F Notes --------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Kettles Park CLO DAC's class A, B, C, D, E, and F notes. At closing, the issuer also issued EUR30.77 million unrated subordinated notes. The reinvestment period will be approximately 4.8 years, while the noncall period will be 1.8 years after closing. Under the transaction documents, the rated notes will pay quarterly interest unless there is a frequency switch event. Following this, the notes will switch to semiannual payment. The ratings assigned to the notes reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which is bankruptcy remote. -- The transaction's counterparty risks, which are in line with S&P's counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,716.66 Default rate dispersion 492.94 Weighted-average life (years) 4.86 Obligor diversity measure 134.96 Industry diversity measure 23.94 Regional diversity measure 1.40 Country concentration in sovereigns rated below 'AA-' (%) 26.41 Transaction key metrics Total par amount (mil. EUR) 400 Defaulted assets (mil. EUR) 0 Number of performing obligors 165 Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 0.00 Target 'AAA' weighted-average recovery (%) 35.98 Target weighted-average spread net of floors (%) 3.47 Covenanted weighted-average coupon (%) 4.50 Rationale S&P said, "Our ratings reflect our assessment of the collateral portfolio's credit quality, which has a weighted-average rating of 'B'. "The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and bonds. Therefore, we conducted our credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. "The transaction includes an amortizing reinvestment target par amount, which is a predetermined reduction in the value of the transaction's target par amount, unrelated to the principal payments on the notes. This may allow for the principal proceeds to be characterized as interest proceeds when the collateral par exceeds this amount, subject to a limit, and affect the reinvestment criteria, among others. This feature allows some excess par to be released to equity during benign times, which may lead to a reduction in the amount of losses that the transaction can sustain during an economic downturn. In our cash flow analysis, we therefore assumed a starting collateral size of EUR397.0 million (i.e., the EUR400.0 million target par minus the maximum reinvestment target par adjustment amount of EUR3.0 million). "In our cash flow analysis, we modelled both the EUR400.0 million target par amount and the EUR397.0 million reduced par amount, the actual weighted-average spread of 3.47%, the covenanted weighted-average coupon of 4.50%, and the actual weighted-average recovery rate . We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "The transaction's documented counterparty replacement and remedy mechanisms adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "Under our structured finance sovereign risk criteria, the transaction's exposure to country risk is sufficiently mitigated at the assigned ratings. "The transaction's legal structure and framework is bankruptcy remote, in line with our legal criteria. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B to D 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 have capped our ratings assigned to these notes." The class A and E notes can withstand stresses commensurate with the assigned ratings. The class F notes' current break-even default cushion is negative at the assigned rating. Nevertheless, based on the portfolio's actual characteristics and additional overlaying factors, including our long-term corporate default rates and recent economic outlook, S&P believes this class is able to sustain a steady-state scenario, in accordance with its criteria. S&P's analysis further reflects several factors, including: -- The class F notes' available credit enhancement, which is in the same range as that of other CLOs S&P has rated and that has recently been issued in Europe. -- S&P's model-generated portfolio default risk, which is at the 'B-' rating level at 23.93% (for a portfolio with a weighted-average life of 4.86 years) versus 15.55% if it was to consider a long-term sustainable default rate of 3.2% for 4.86 years. -- Whether the tranche is vulnerable to nonpayment in the near future. -- If there is a one-in-two chance for this note to default. -- If S&P envisions this tranche to default in the next 12-18 months. S&P said, "Following this analysis, we consider that the available credit enhancement for the class F notes is commensurate with the assigned 'B- (sf)' rating. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe that our ratings are commensurate with the available credit enhancement for all rated classes of notes. "In addition to our standard analysis, we have also included the sensitivity of the ratings on the class A to E notes, based on four hypothetical scenarios. "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 transaction's exposure to environmental, social, and governance (ESG) credit factors as broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental and social credit factors is viewed as below average, while governance credit factors are average. For this transaction, the documents prohibit or limit certain 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." Kettles Park CLO DAC is a European cash flow CLO securitization of a revolving pool, comprising mainly euro-denominated leveraged loans and bonds. The transaction is a broadly syndicated CLO managed by Blackstone Ireland Ltd. Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate§ A AAA (sf) 248.00 38.00 Three/six-month EURIBOR plus 1.23% B AA (sf) 42.00 27.50 Three/six month EURIBOR plus 2.00% C A (sf) 24.00 21.50 Three/six month EURIBOR plus 2.25% D BBB- (sf) 29.00 14.25 Three/six month EURIBOR plus 3.55% E BB- (sf) 17.50 9.88 Three/six month EURIBOR plus 6.35% F B- (sf) 11.50 7.00 Three/six month EURIBOR plus 8.80% Sub notes NR 30.77 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. NR--Not rated. N/A--Not applicable. ========= I T A L Y ========= EVOCA SPA: S&P Cuts ICR to 'CCC+', Outlook Stable ------------------------------------------------- S&P Global Ratings lowered to 'CCC+' from 'B-' its long-term issuer credit rating on Italian professional coffee machines producer Evoca SpA and its issue rating on the EUR550 million senior secured notes due in 2029. The recovery rating on the notes is unchanged at '3', indicating recovery prospects of about 50%-70% (rounded estimate 50%) in the event of default. S&P also lowered the issue rating on the EUR80 million super senior RCF due 2028 from 'B+' to 'B'. The recovery rating on the RCF is unchanged at '1', indicating recovery prospects of about 90%-100% (rounded estimate 95%) in the event of default. The stable outlook indicates that we expect Evoca SpA to maintain sufficient liquidity to fund its operations over the next 12 months, supported by its lack of significant near-term debt maturities. In our base case, we assume that operating performance will remain subdued this year, resulting in negative cash flow generation, and progressively improve from 2027, as market conditions normalize and the company continues to deliver under its cost-saving initiatives. Evoca reported a higher-than-expected deterioration in its operating performance for fiscal year 2025 (ended Dec. 31, 2025). Reported revenue declined by about 16% year-on-year, while S&P Global Ratings-adjusted EBITDA margin declined by about 250 basis points to 17.6%. This translated into negative annual free operating cash flow (FOCF) generation after leases and a significant spike in our adjusted leverage to over 15x, from about 11x in 2024. S&P said, "Under our revised base case, we forecast that our adjusted debt to EBITDA will remain above 15x during 2026, and that annual FOCF generation after leases will remain negative by EUR5 million-EUR15 million. "Evoca posted worse-than-anticipated 2025 results compared with our base case, resulting in further deterioration of its credit metrics. Total reported revenue reached EUR352.2 million, down 16.2% year on year. The professional coffee segment (approximately 45% of 2025 revenue) declined by about 19%, reflecting reduced order volumes as the coffee machines replacement cycle slowed. The segment was also affected by macroeconomic and geopolitical instability, which depressed capital expenditure (capex) by clients. The vending segment (30%) contracted by about 20% due to a temporary slowdown in expansion activities of some key accounts. Price initiatives were only marginally able to offset this, increasing by 1%. The aftermarket segment (including spares, accessories, and services) declined by 6.2%. S&P Global Ratings-adjusted EBITDA of about EUR62 million in 2025 was below our original base-case expectations of about EUR70 million, and lower than fiscal 2024 (about EUR84 million), translating into a 240 basis point year-on-year drop in our adjusted EBITDA margin. The contraction in profitability was mainly driven by the subdued trading environment but partially compensated by cost savings under Project EVO, Evoca's cost-savings program. Our adjusted EBITDA calculation includes about EUR7 million-EUR8 million of capitalized development costs and about EUR10 million-EUR15 million restructuring and other one-off costs that we consider operating in nature. The contraction in our adjusted EBITDA caused adjusted debt to EBITDA to spike materially, to about 16.0x in 2025. In addition, the company posted negative FOCF of about EUR20 million in 2025, materially weaker than anticipated under our previous base case (flat to slightly positive) due to significant swings in working capital related to stockpiling as the company carried on with its production footprint optimization. Overall underperformance reflects a generally weak macroeconomic situation and consumer confidence. "We expect Evoca's operating performance will remain volatile this year as the company keeps navigating a challenging operating environment. Under our revised base case we estimate a negative revenue growth of about 5%-7% in 2026 as uncertain market conditions could keep prompting customers to postpone capex and new product orders. In 2027 and thereafter, we expect sales growth to gradually improve by about 1%-3%, supported by the gradual recovery in volumes from the rollout of Evoca's new product portfolio. Sales will also benefit from a gradual increase in exposure to direct distribution, which currently accounts for less than 5% of sales. We expect S&P Global Ratings-adjusted EBITDA to remain broadly flat in absolute terms this year. However, our adjusted EBITDA margin should improve to 18.5%-19.5% on continued savings under the EVO transformation program, particularly in production footprint rationalization, procurement, and personnel and administrative expenses as the company continues its organizational optimization. We anticipate restructuring and EVO-related special costs to remain elevated this year because the company is in the process of completing the initiatives. In 2027 and thereafter, we expect lower EVO-related costs to result in gradual EBITDA margin upside. Despite the weak operating environment, the company continues to invest in product innovation to support longer-term growth, while also expanding its direct-to-customer distribution channel. We forecast capex of about EUR15 million-EUR20 million per year. "We believe that Evoca has an unsustainable capital structure, although there is no short-term pressure on liquidity. Our adjusted debt metric includes EUR550 million of senior secured notes, in addition to payment-in-kind (PIK) notes (including accrued interest) of about EUR420 million as of end-2025. In addition, it includes about EUR20 million of lease obligations and limited pension liabilities of EUR5 million-EUR10 million per year. We consider the capital structure unsustainable in the long term, given the high level of debt compared with the company's cash flow generation. This, coupled with lower profitability versus historical levels and interest accrual under the PIK notes, does not allow Evoca a clear path to reducing its leverage. For 2026, we expect our adjusted leverage to remain elevated at above 15.0x. At the same time, we do not anticipate that it will face a credit or payment crisis in the near term. As of Dec. 31, 2025, Evoca had a fully available undrawn EUR80 million super senior revolving credit facility (RCF), and available cash on the balance sheet of EUR45 million. It refinanced its senior secured floating-rate notes in April 2024, with a five-year maturity, and has extended the maturities of its RCF and PIK notes to 2028 and 2029, respectively, thereby alleviating short-term refinancing risk. The stable outlook indicates that we expect Evoca to maintain sufficient liquidity to fund its operations over the next 12 months, supported by its lack of significant near-term debt maturities. In our base case, we assume that operating performance will remain subdued this year, resulting in negative cash flow generation, and progressively improve from 2027, as market conditions could normalize and the company continues to deliver under its cost-saving initiatives. "We could lower the rating within the next 12 months if Evoca's liquidity position weakens further due to weaker-than-expected FOCF or higher working capital volatility, with FFO cash interest coverage below 1.0x and no prospect of improvements. We could also lower our rating if we see over the next 12 months heightened risk of default, including debt exchange offers or similar restructurings that we consider to be distressed exchanges. "We could raise the rating on Evoca if it generates positive FOCF (after leases) on a sustained basis and consistently reduces its leverage, supported by revenue growth, a significant improvement in EBITDA margins, and stronger FFO interest coverage." =================== K A Z A K H S T A N =================== BANK RBK: Fitch Assigns 'BB(EXP)' Rating to USD Sr. Unsec. Eurobond ------------------------------------------------------------------- Fitch Ratings has assigned Bank RBK JSC's (RBK) upcoming issue of US dollar-denominated senior unsecured Eurobonds an expected rating of 'BB(EXP)'. The issue size and tenor are yet to be determined. The assignment of the final rating is contingent on the completion of the issue and receipt of documents conforming to the information previously received. Key Rating Drivers The expected rating is in line with RBK's Long-Term Foreign-Currency Issuer Default Rating (IDR) of 'BB'. The Eurobonds will represent direct, general, senior unsecured obligations, and rank pari passu with all other unsubordinated, unsecured obligations of RBK. RBK's 'BB' Long-Term IDRs are driven by its intrinsic creditworthiness, as captured by its 'bb' Viability Rating. The latter incorporates the bank's reasonable asset quality, strong profitability, plus adequate capitalisation and liquidity. These are counterbalanced by a moderate domestic franchise, high single-name loan and deposit concentrations, and rapid lending growth. For more details on RBK's ratings and credit profile, see 'Fitch Rates Kazakhstan's Bank RBK 'BB'; Outlook Stable', dated 9 April 2026. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A negative rating action on the IDR will result in a similar rating action on the debt rating. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A positive rating action on the IDR will result in a similar rating action on the debt rating. 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 ----------- ------ Bank RBK JSC senior unsecured LT BB(EXP) Expected Rating =========== N O R W A Y =========== AXACTOR ASA: S&P Places 'B-' Rating on CreditWatch Developing ------------------------------------------------------------- S&P Global placed its 'B-' rating on Norway-based distressed debt collector Axactor ASA (Axactor) on CreditWatch with developing implications. S&P expects to resolve the CreditWatch placement within the next 90 days after it gains more visibility on the overall transaction and reevaluate the impact. On April 30, 2026, Axactor announced its plan to undergo a transformational transaction that intends to improve its capital structure and operating profile. The transaction considers an equity private placement of EUR200 million, mainly subscribed by Geveran Trading Co. Ltd. (Geveran) and Fortress Investment Group (Fortress), a partial portfolio sale for EUR100 million to the same shareholders at a 38% discount, a new co-investment scheme with Fortress, and a review of its back book that could result in potential negative revaluations. While the transaction would support or could improve the company's creditworthiness, S&P sees some downside risks arising from the as yet unknown outcome of the back book review and execution risks until the transaction is approved by shareholders. Finally, after considering the fresh equity that will come from the transformational transaction, S&P raised its rating on its senior unsecured debt to 'B' from 'B-' following an improvement in its recovery ratings to '2' (80%) from '3' (60%). S&P said, "We placed our 'B-' rating on Axactor on CreditWatch with developing implications following the announcement of its plan to undergo a transformational transaction in the second quarter. The main rationale behind this intended transformational transaction is that Axactor intends to improve its capital structure and operating profile. This includes an enhanced underwriting structure and increased financial flexibility to accelerate investment volumes and strengthen the sustainability of the business going forward. We expect that most of the proceeds generated by the transaction will be used for debt repayment and solve Axactor's increasing refinancing risk." The key pillar of the transaction is a new equity private placement for EUR200 million mainly subscribed by its main shareholder, Geveran, and Fortress. Geveran will pledge 26% of the total amount, while Fortress will contribute 51%. A remaining portion will be allocated to other minority shareholders and present the opportunity to avoid dilution as much as possible. The deal also includes a potential additional placement of up to EUR20 million, available solely to existing investors after the transaction is complete. Alongside the fresh capital contribution, Fortress will become Axactor's key partner going forward as the two companies announced a co-investment partnership that will allow Axactor to accelerate its investments in new loan portfolios. S&P said, "We have more recently observed this type of deal across the distressed debt purchaser (DDP) industry as it allows companies with highly levered balance sheets to continue to invest with a more asset-light approach. However, contrary to the rest of the industry, Axactor will continue to consolidate the whole book as the partnership deal incorporates a participation rate of 70% (65% for deals above EUR300 million). We consider that the majority of Axactor's new investments will likely be made through a new special purpose vehicle and run through a new joint investment committee alongside Fortress. The partnership deal will initially be valid for the next five years, and Axactor will retain the servicing income for the whole portfolio." The transaction incorporates the partial sale of a carved-out portfolio that will generate roughly EUR100 million of proceeds for Axactor. The company will retain 50.1% ownership and will continue to consolidate the whole portfolio on its books. Axactor will generate third-party collections revenue from servicing the portfolio. Geveran and Fortress will equally own the remaining portion. The price of the transaction incorporates a steep discount of approximately 38% of its recorded book value, indicating that the total portfolio that was carved out is about EUR330 million. This corresponds to roughly one third of Axactor's total portfolio as of December 2025. The final pillar of the transformation will include a revision of Axactor's whole back book to ensure that recovery expectations are in line with its current estimated recovery collection curve. In the past, the company already adjusted its estimated recovery collection curve to reflect negative revaluations stemming from lower-than-expected collections, raising doubts on the whole recovery expectations as collections dropped again below 90% during the first quarter of 2026. The company shared the results of an exercise that applied Fortress' pricing assumptions to the whole back book, resulting in a negative adjustment of up to EUR350 million, including the carved-out portfolio sold. The magnitude of this adjustment would represent roughly a 33% write off to Axactor's whole portfolio, nearly 10.0x last year's earnings or close to 92% of reported equity as of year-end 2025. The company expects to have the final results of the revision by the end of the second quarter of 2026. Leverage will improve during 2026 following the transaction but will gradually increase thereafter. During the past couple of years, Axactor has been hindered by its elevated leverage metrics and high interest expenses. Furthermore, its capital constraints limited its investment capacity in new deals, jeopardizing its future revenue. S&P said, "We expect Axactor to use most of the proceeds generated by this transaction to repay the outstanding portion of ACR03 and ACR04 (roughly EUR260 million) and pay down a portion of its drawn revolving credit facility (RCF) to increase its financial flexibility. This will result in its debt to S&P Global Ratings-adjusted EBITDA improving to approximately 3.0x from 4.7x. We do not expect this level to be sustainable going forward however, as Axactor's revised financial targets following the transformational deal indicate an increased appetite for loan portfolio investments in the near to medium term, mainly funded by incremental debt. That said, we expect this to come at an improved funding cost. The company is targeting investment levels between EUR200 million-EUR400 million per year. This will gradually increase leverage to historical levels above 5.0x within the next two years. "We think that the transformational transaction has more positive notes, but questions remain regarding the potential impact of the portfolio revaluation exercise. The new partnership and support from Fortress will help Axactor strengthen its underwriting standards and enhance its investment capacity. This should help the company to regain its market position within the European DDP segment. The deal also brings fresh cash that Axactor will use to deleverage its financial profile. However, there is a possibility that the transaction falls through, which would leave the company in a precarious situation with limited investment capacity and increasing refinancing with low levels of liquidity. Finally, the outcome of the revaluation exercise remains to be seen as the impact it could have on the company could be extreme and jeopardize its business sustainability going forward. "We raised our ratings on Axactor's senior unsecured debt on increased recovery prospects. With the cash coming from the private placement and the portfolio sale earmarked for debt repayment, we are revising our recovery prospects for Axactor's senior unsecured rated debt to 80% from 60%. We revised up our recovery rating to '2' from '3' and raised our issue ratings on the notes to 'B' from 'B-'. This incorporates our base-case scenario for potential portfolio revaluations following the transaction. "Our CreditWatch placement reflects our view that we could either raise or lower the rating within the next 90 days. This will depend on the completion of its transformational transaction, including the settlement of its announced private placement, portfolio sale, and the results of its portfolio review exercise. We expect to resolve the CreditWatch placement once the transaction closes and the revaluation impact becomes clearer. "We could lower the rating to the 'CCC' category if difficulties arise during the execution of Axactor's transformational transaction that impedes the closing of either the private placement or the portfolio sale coupled with substantial negative revaluations close to the company's disclosed amount of up to EUR350 million while keeping investment appetite in line with target amounts. This would put the company in a worse position than it is today and potentially compromise its business stability in the medium to long term. "We could raise the rating on Axactor to 'B' if the results from the portfolio review exercise are materially better than expected and revaluations remain low. This would translate into higher income levels and could result in Axactor being in a better position to fully take advantage of its new co-investment agreement with Fortress and grow its loan portfolio at an accelerated pace without the need of substantially increasing debt. An upgrade would also hinge on Axactor maintaining careful liquidity management as its portfolio grows." =========== T U R K E Y =========== TURK TELEKOMUNIKASYON: Fitch Alters Outlook on 'BB-' IDR to Stable ------------------------------------------------------------------ Fitch Ratings has revised Turk Telekomunikasyon A.S.'s (TT) Outlook on its Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Positive and affirmed all ratings as detailed below. The rating action follows the revision of the Outlook on Turkiye's Long-Term IDRs to Stable from Positive on 10 April 2026 (see 'Fitch Revises Turkiye's Outlook to Stable; Affirms at 'BB-'). TT's high exposure to the Turkish economy means its LTFC IDR is influenced by the Turkish Country Ceiling, which remains at 'BB-'. The revision of the Outlook reflects the likely correlation of future rating actions with changes to the sovereign rating, if the Country Ceiling moves in line with the sovereign IDR. Key Rating Drivers For key ratings drivers and ESG considerations for TT, see the Rating Action Commentary (RAC) 'Fitch Affirms Turk Telekom at 'BB-'; Outlook Stable ' dated 4 August 2025. Peer Analysis See the RAC referenced above. Fitch’s Key Rating-Case Assumptions See the RAC referenced above. 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 (bbb, Lower), Sector Characteristics (bbb, Lower), Market and Competitive Positioning (bbb+, Higher), Diversification and Asset Quality (bb+, Moderate), Company Operational Characteristics (bb+, Moderate), Profitability (bbb+, Lower), Financial Structure (bb, Moderate), and Financial Flexibility (bb, Higher). - The quantitative financial subfactors are based on custom CRT financial period parameters: 20% weight for the forecast year 2025, 40% for the forecast year 2026 and 40% for the forecast year 2027. - The Governance assessment of 'Good' results in no adjustment. - The Operating Environment assessment of 'bb-' results in an adjustment of -1 notch. - The SCP is 'bb'. To derive the IDR: - Application of Fitch's Parent Subsidiary Linkage Rating Criteria results in a consolidated profile+1 approach. - Application of Fitch's Government Related Entities Rating Criteria results in a standalone approach. - Country Ceiling considerations apply and result in an adjustment of -1 notch. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA net leverage above 3.2x on a sustained basis - Material deterioration in pre-dividend free cash flow margin, or in the regulatory or operating environments - Negative action on Turkiye's Country Ceiling or Long-Term Local Currency IDR, which could lead to a corresponding action on TT's Long-Term Foreign- or Local-Currency IDRs - Increased FX mismatch between TT's net debt and cash flows especially if combined with excessive reliance on short-term funding, without adequate liquidity over the next 12-18 months - Removal of covenants in debt documentation may lead to a change in parent/subsidiary linkage assessment, which could result in the IDRs being capped by the sovereign IDRs Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Positive rating action on Turkiye would lead to a corresponding action on TT, provided that TT's SCP is at the same level as, or higher than, the sovereign rating, and the links between the government and TT remain unchanged - Decreased currency mismatch between TT's net debt and cash flows or more effective hedging may lead to a positive action on the SCP, but not necessarily for the IDR Liquidity and Debt Structure See the RAC referenced above. Issuer Profile TT is an incumbent fixed-line operator in Turkiye, with a range of mobile, broadband, data, TV and fixed-voice services. It is controlled by the Turkish government with an effective control of 85%. Public Ratings with Credit Linkage to other ratings TT's ratings are linked to the sovereign ratings of Turkiye, in particular its Long-Term Foreign-Currency IDR, which is capped by Turkiye's Country Ceiling. 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 TT. 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 ----------- ------ -------- ----- Turk Telekomunikasyon A.S. LT IDR BB- Affirmed BB- LC LT IDR BB Affirmed BB Natl LT AAA(tur)Affirmed AAA(tur) senior unsecured LT BB- Affirmed RR4 BB- TT Varlik Kiralama A.S. senior unsecured LT BB- Affirmed RR4 BB- TURKCELL ILETISIM: Fitch Affirms BB- IDR, Alters Outlook to Stable ------------------------------------------------------------------ Fitch Ratings has revised the Outlook on Turkcell Iletisim Hizmetleri A.S.'s (Tcell) Long-Term Foreign-Currency Issuer Default Ratings (IDRs) to Stable from Positive and affirmed all ratings as detailed below. The rating action follows the revision of the Outlook on Turkiye's LTFC IDR to Stable from Positive on 10 April 2026 (see 'Fitch Revises Turkiye's Outlook to Stable; Affirms at 'BB-''). Fitch continues to assess Tcell's Standalone Credit Profile (SCP) at 'bb'. Tcell's high exposure to the Turkish economy means its LTFC IDR is influenced by the Turkish Country Ceiling, which remains at 'BB-'. The revision of the Outlook reflects the likely correlation of future rating actions with changes to the sovereign rating, if the Country Ceiling moves in line with the sovereign IDR. Key Rating Drivers For key ratings drivers and ESG considerations for Tcell, see the Rating Action Commentary (RAC) "Fitch Affirms Turkcell at 'BB-'; Stable Outlook" dated 15 December 2025. Peer Analysis See the RAC referenced above. Fitch’s Key Rating-Case Assumptions See the RAC referenced above. 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 (bbb, Lower), Sector Characteristics (bbb, Lower), Market and Competitive Positioning (bbb+, Higher), Diversification and Asset Quality (bb+, Moderate), Company Operational Characteristics (bb+, Moderate), Profitability (bbb, Moderate), Financial Structure (bbb-, Lower), and Financial Flexibility (bb, Higher). - The quantitative financial subfactors are based on custom CRT financial period parameters: 20% weight for the forecast year 2025, 40% for the forecast year 2026 and 40% for the forecast year 2027. - The Governance assessment of 'Good' results in no adjustment. - The Operating Environment assessment of 'bb-' results in an adjustment of -1 notch(es). - The SCP is 'bb'. To derive the IDR: - Application of Fitch's Parent Subsidiary Linkage Rating Criteria results in a(n) consolidated profile+1 approach. - Application of Fitch's Government Related Entities Rating Criteria results in a(n) standalone approach. - Country Ceiling considerations apply and result in an adjustment of -1 notch. Recovery Analysis See the RAC referenced above. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA net leverage above 3.2x on a sustained basis - Material deterioration in pre-dividend FCF margins or in the regulatory or operating environments - Sustained increase in FX mismatch between net debt and cash flows - A downward revision of Turkiye's Country Ceiling - Excessive reliance on short-term funding, without adequate liquidity over the next 12-18 months Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - An upward revision of Turkiye's Country Ceiling, assuming no change in Tcell's underlying credit quality Liquidity and Debt Structure See the RAC referenced above. Issuer Profile Tcell is the leading mobile network operator in Turkiye, with leading market shares in mobile, along with fibre broadband and IPTV providing a converged product. Public Ratings with Credit Linkage to other ratings Tcell's ratings are linked to the sovereign ratings of Turkiye, in particular its LTFC IDR, which is capped by Turkiye's Country Ceiling. 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 Tcell. 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 ----------- ------ -------- ----- Turkcell Iletisim Hizmetleri A.S LT IDR BB- Affirmed BB- Natl LT AAA(tur) Affirmed AAA(tur) senior unsecured LT BB- Affirmed RR4 BB- [] Fitch Alters Outlook on 8 Turkish LRGs' 'BB-' IDRs to Stable --------------------------------------------------------------- Fitch Ratings has revised the Outlooks on the Metropolitan Municipalities of Ankara, Antalya, Bursa, Istanbul, Izmir, Konya, Manisa and Mersin's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) to Stable from Positive and affirmed the IDRs at 'BB-'. Under applicable credit rating agency (CRA) regulations, the publication of local and regional government (LRG) reviews is subject to restrictions and must take place according to a published schedule, except where it is necessary for CRAs to deviate from the schedule in order to comply with the CRAs' obligation to issue credit ratings based on all available and relevant information and disclose credit ratings in a timely manner. Fitch interprets this provision as allowing us to publish a rating review in situations where there is a material change in the creditworthiness of the issuer that Fitch believes makes it inappropriate for us to wait until the next scheduled review date to update the rating or Outlook/ Watch status. The next scheduled review date for Ankara, Izmir, Konya and Manisa is 05 June 2026 and for Antalya, Bursa, Istanbul and Mersin 12 June 2026. Fitch believes the recent revision of Turkiye's Outlook warrants such a deviation from the calendar and its rationale for this is set out in the first part (High weight factors) of the Key Rating Drivers section below. Key Rating Drivers HIGH Sovereign Cap The revision of the Outlooks on the eight Turkish LRGs reflects the revision of the sovereign's Outlook to Stable from Positive on 10 April 2026 (see 'Fitch Revises Turkiye's Outlook to Stable; Affirms at 'BB-''), as the LRGs' ratings are capped by the sovereign ratings. Under Fitch's International LRG Criteria, Turkish LRGs cannot be rated above the sovereign due to high fiscal interdependence between the central government and Turkish subnationals. LOW Other key rating drivers and Standalone Credit Profiles (SCPs) are unchanged. For individual key rating drivers see the latest published rating action commentary on each issuer. Derivation Summary The unchanged SCPs of the eight Turkish LRGs range from 'bb+' to 'bbb'. They reflect the combination of their 'Weaker' risk profiles and financial profiles assessed in the 'aa' category for Konya, and in the 'aaa' category for the seven other LRGs. The IDRs and Outlooks mirror that on the sovereign. This reflects SCPs of 'bbb' for Ankara and Manisa, 'bbb-'for Antalya, Bursa, Istanbul, Izmir and Mersin, and 'bb+' for Konya. In its assessment Fitch does not apply extraordinary support from the upper-tier government or asymmetric risk. The IDRs are not affected by any other rating factors but are capped by the Turkish sovereign IDRs. Key Assumptions Ankara Risk Profile: Weaker, Unchanged with Low weight Revenue Robustness: Midrange, Unchanged with Low weight Revenue Adjustability: Weaker, Unchanged with Low weight Expenditure Sustainability: Weaker, Unchanged with Low weight Expenditure Adjustability: Midrange, Unchanged with Low weight Liabilities and Liquidity Robustness: Midrange, Unchanged with Low weight Liabilities and Liquidity Flexibility: Weaker, Unchanged with Low weight Financial Profile: aaa, Unchanged with Low weight Asymmetric Risks (Notches): N/A, Unchanged with Low weight Budget Loans (Notches): N/A, Unchanged with Low weight Ad-Hoc Support (Notches): N/A, Unchanged with Low weight Sovereign Cap (LT IDR): 'BB-', Deteriorated with High weight Sovereign Cap (LT LC IDR) 'BB-', Deteriorated with High weight Sovereign Floor: N/A, Unchanged with Low weight Antalya, Bursa, Istanbul, Izmir, Manisa and Mersin Risk Profile: Weaker, Unchanged with Low weight Revenue Robustness: Midrange, Unchanged with Low weight Revenue Adjustability: Weaker, Unchanged with Low weight Expenditure Sustainability: Weaker, Unchanged with Low weight Expenditure Adjustability: Midrange, Unchanged with Low weight Liabilities and Liquidity Robustness: Weaker, Unchanged with Low weight Liabilities and Liquidity Flexibility: Weaker, Unchanged with Low weight Financial Profile: aaa, Unchanged with Low weight Asymmetric Risks (Notches): N/A, Unchanged with Low weight Budget Loans (Notches): N/A, Unchanged with Low weight Ad-Hoc Support (Notches): N/A, Unchanged with Low weight Sovereign Cap (LT IDR): 'BB-', Deteriorated with High weight Sovereign Cap (LT LC IDR) 'BB-', Deteriorated with High weight Sovereign Floor: N/A, Unchanged with Low weight Konya Risk Profile: Weaker, Unchanged with Low weight Revenue Robustness: Midrange, Unchanged with Low weight Revenue Adjustability: Weaker, Unchanged with Low weight Expenditure Sustainability: Weaker, Unchanged with Low weight Expenditure Adjustability: Midrange, Unchanged with Low weight Liabilities and Liquidity Robustness: Weaker, Unchanged with Low weight Liabilities and Liquidity Flexibility: Weaker, Unchanged with Low weight Financial Profile: aa, Unchanged with Low weight Asymmetric Risks (Notches): N/A, Unchanged with Low weight Budget Loans (Notches): N/A, Unchanged with Low weight Ad-Hoc Support (Notches): N/A, Unchanged with Low weight Sovereign Cap (LT IDR): 'BB-', Deteriorated with High weight Sovereign Cap (LT LC IDR) 'BB-', Deteriorated with High weight Sovereign Floor: N/A, Unchanged with Low weight Quantitative assumptions - issuer-specific For quantitative assumptions see the latest published rating action commentary for each entity. No weights and changes since the last review are included as none of these assumptions was material to the rating action. Quantitative assumptions - Sovereign Related Figures as per Fitch's sovereign actual for 2024 and forecast for 2027, respectively (no weights and changes since the last review are included as none of these assumptions was material to the rating action). - GDP per capita (US dollar, market exchange rate): 15,430; 20,626 - Real GDP growth (%): 3.3; 4.2 - Consumer prices (annual average % change): 60.0; 23.8 - General government balance (% of GDP): -4.6; -4.0 - General government debt (% of GDP): 23.6; 25.8 - Current account balance plus net FDI (% of GDP): -0.6; -2.6 - Net external debt (% of GDP): 12.0; 15.7 - IMF Development Classification: EM (emerging market) - CDS Market-Implied Rating: 'BB-' RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A downgrade of the Turkish sovereign IDRs or downward revision of the issuers' SCP resulting from a debt payback of more than 9x on a sustained basis would lead to downgrades of the issuers' IDRs. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade of the Turkish sovereign IDRs would lead to upgrades of the issuers' IDRs, provided that they maintain their debt payback ratios below 5x under Fitch's rating case. Sources of Information DISCUSSION NOTE Committee date: 23 April 2026 There was an appropriate quorum at the committee and the members confirmed that they were free from recusal. It was agreed that the data was sufficiently robust relative to its materiality. During the committee no material issues were raised that were not in the original committee package. The main rating factors under the relevant criteria were discussed by the committee members. The rating decision as discussed in this rating action commentary reflects the committee discussion. Public Ratings with Credit Linkage to other ratings The Turkish LRGs' IDRs are capped by the Turkish sovereign IDRs. Climate Vulnerability Signals The results of its Climate.VS screener did not indicate an elevated risk for eight issuers. 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 ----------- ------ ----- Ankara Metropolitan Municipality LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- Mersin Metropolitan Municipality LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Izmir Metropolitan Municipality LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Konya Metropolitan Municipality LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- Manisa Metropolitan Municipality LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Istanbul Metropolitan Municipality LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- senior unsecured LT BB- Affirmed BB- Bursa Metropolitan Municipality LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Antalya Metropolitan Municipality LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B =========================== U N I T E D K I N G D O M =========================== A&K TRAVEL: Fitch Assigns 'BB-' Long-Term IDR, Outlook Stable ------------------------------------------------------------- Fitch Ratings has assigned a first-time 'BB-' Long-Term Issuer Default Rating (IDR) to A&K Travel Group Holdings Ltd (A&K). Additionally, Fitch has assigned a 'BB-' rating with a Recovery Rating of 'RR4' to A&K's senior unsecured revolver and proposed senior unsecured notes. The Rating Outlook is Stable. The rating reflects A&K's strong brand awareness, competitive position in the luxury tour and luxury ocean cruise sectors, expected free cash flow (FCF) generation, and adequate liquidity. These are somewhat offset by the company's smaller scale, the competitive environment in the luxury tour and cruise sectors, economic uncertainty and exposure to fuel price volatility. The Stable Outlook reflects Fitch's expectation that EBITDA leverage will decline as product acceptance continues to ramp up and exposure to the luxury end of the market reduces the risk from lower leisure spend during weaker economic periods. Key Rating Drivers Niche Position in Luxury Travel: A&K is a relatively small participant in the global travel industry but benefits from strong brand recognition within the luxury segment. Although the luxury travel market is competitive, customer decision-making is driven primarily by service quality, brand reputation, and differentiated experiences rather than price sensitivity. Demand in this segment has historically demonstrated lower correlation to broader economic volatility. A&K Journeys has a long operating history and has expanded its product offerings over time, resulting in a diversified portfolio of destinations and experiences. Crystal Cruises represents the relaunch of a well-known luxury cruise brand following an assignment for the benefit of creditors of its prior owner. While the luxury cruise segment is experiencing strong growth, it remains highly competitive, with several competitors supported by large, well-capitalized cruise operators. Proposed Financing Supports Liquidity: A&K intends to refinance its existing capital structure through the issuance of $700 million in senior unsecured notes. Proceeds will be used to refinance existing bank debt and to fund upcoming new-build installment payments. In addition, the company plans to enter into a $75 million, four-year revolving credit facility to replace its existing revolver. Fitch expects the proposed transaction to enhance liquidity and extend the company's maturity profile, providing sufficient runway to support ongoing operations and debt service obligations. Crystal Cruise Drives Growth: A&K currently operates two Crystal Cruises ships acquired in 2022, which it refurbished and reintroduced into service in 2023. Bookings and occupancy levels are improving, driven by the earlier release of itineraries, enhancements to base-loading strategies, expanded trade outreach which increased active advisor participation, and optimization of digital and web-based marketing campaigns. Higher occupancy levels are expected to generate scale efficiencies, supporting margin expansion over time. Looking ahead, A&K plans to introduce three new cruise ships in 2028, 2031, and 2034, which will serve as the primary drivers of long-term growth. The staggered delivery schedule should allow the company to add capacity in a disciplined manner without materially diluting utilization across the existing fleet. Growth Drives Leverage Improvement: As calculated by Fitch, EBITDAR leverage was 4.2x in 2025 and is projected to decline below 4.0x through 2027, driven by earnings growth across both the Cruise and Journeys segments. Leverage will increase in 2028 upon delivery of a newbuild ship but is expected to revert to below 4.0x from increased earnings from the new ship and loan amortization. Capital expenditure is expected to remain manageable, reflecting the asset‑light nature of the Journeys business. Export credit agency will fund approximately 80% of the construction costs for the first two Crystal Cruises new-build vessels. Fitch does not expect any shareholder distributions or material acquisitions over the forecast period, although modest tuck‑in acquisitions within the Journeys segment remain a possibility. Highly Visible Revenue: Tour and cruise operators generally benefit from high levels of advance bookings, providing strong revenue visibility, while cancellation rates are typically immaterial. The Journeys segment generated approximately 74% of its 2025 bookings by March 2025. For fiscal 2026, bookings through March 2026 are tracking 10% higher than the comparable period in the prior year. Within the Cruise segment, Crystal's cumulative revenue for 2026 is tracking approximately 42% higher than in 2025 for the same period, driven by higher occupancy levels and increased per diem rates. Bookings for 2027 are also trending positively, running approximately 25% higher than 2026 bookings at a comparable point in the prior year. Advance bookings further support liquidity by generating positive working capital that can fund operations and service debt. Favorable Demographic Customer Profile: A&K's core customer demographic consists primarily of individuals age 55 and older, predominantly based in the United States. The 55+ population is expected to grow by approximately 13% between 2020 and 2030, and it controls an estimated 74% of total household wealth. Consumer preferences are also shifting to experiential spending, with customers increasingly prioritizing travel and wellness over traditional luxury goods. Consistent with this trend, a study by McKinsey & Company indicates that approximately 80% of high-net-worth individuals expect to reallocate a portion of their spending toward experiential luxury and wellness offerings. Peer Analysis A&K does not have a direct pure‑play peer that participates across both the tour and cruise segments. Expedia (BBB/Stable) operates primarily as an online travel platform focused on flexible, short‑lead‑time bookings, which contrasts with A&K's model of curated, guided experiences emphasizing personalization and service. Large cruise operators such as Royal Caribbean (BBB/Stable) and Carnival Corporation (BBB‑/Stable) benefit from substantially greater fleet capacity, broader diversification, and scale‑driven operating efficiencies. In contrast, Crystal benefits from its niche positioning within the luxury cruise segment, which exhibits strong underlying demand and competes primarily on service quality and amenities rather than price. The Travel Corporation (BB‑/Stable) operates within a niche market of escorted tours, primarily in Europe, targeting a similar 55+ demographic in the United States and Australia, and also maintains a small luxury river cruise business. Customer demographics, business scale, and leverage profiles are broadly comparable to those of A&K, making it a closer peer across certain dimensions. TUI AG (BB/Stable) is a large, fully integrated tour operator with strong brand recognition, particularly in Europe. While TUI benefits from greater scale, diversification, and financial flexibility, including broader access to capital markets, its business model differs materially from A&K's luxury‑focused positioning. Fitch’s Key Rating-Case Assumptions - Total revenue increases 23% driven by a 36% increase in revenues at Crystal Cruise. The Crystal increase reflects bookings in place for 2026, increasing brand awareness, and the earlier release of itineraries that are in line with the industry. - EBITDA margins are expected to increase from 10.5% in 2025 to 12.8% in 2026 and 17.1% in 2027. The increase is driven by the efficiencies of scale as the rise in cruise occupancy flows through the fixed-cost base. - Customer deposits are forecasted to increase from Crystal bookings. This results in positive working capital of $50 million-$90 million over the forecast. - Maintenance capex is $50 million-$60 million for both Journeys and Crystal over the forecast. New vessel payments are approximately $100 million in 2026 and 2027 and $770 million in 2028. - No shareholder distributions or acquisitions and divestitures. 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 (bbb-, Lower), Sector Characteristics (bb+, Moderate), Market and Competitive Positioning (bbb, Moderate), Diversification and Asset Quality (bb+, Moderate), Company Operational Characteristics (bb, Moderate), Profitability (b, Moderate), Financial Structure (bb-, Higher), and Financial Flexibility (bb, Moderate). - The quantitative financial subfactors are based on standard CRT financial period parameters: 20% weight for the latest historical year 2025, 40% for the forecast year 2026 and 40% for the forecast year 2027. - The Governance assessment of 'Good' results in no adjustment. - The Operating Environment assessment of 'a+' results in no adjustment. - The SCP is 'bb-'. To derive the IDR: No adjustments were made to the SCP, resulting in an IDR of 'BB-'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA leverage exceeding 4.5x; - A change in financial policy that results in increased capital allocations to shareholders and/or acquisitions that pressure leverage sensitivities; - Interest coverage consistently at or below 2.5x. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Meeting organic growth targets while maintaining EBITDA leverage below 3.5x; - EBITDA margins consistently exceed 18%, benefiting from scale and cost containment measures; - Increased scale and geographic and product diversification. Liquidity and Debt Structure A&K held cash of $90.2 million as of Dec. 31, 2025, which excludes $27.8 million of restricted cash. There was no availability on the $100 million revolver. Pro forma for the proposed transaction, the new $75 million revolver is expected to be undrawn with no bond maturities until 2033. Fitch does not anticipate any borrowings on the revolver other than for sporadic short-term working capital needs. A portion of the bond offering proceeds will be used to fund vessel payments including $95.4 million due on July 31, 2026, and $104.6 million due on Aug. 31, 2027. A&K will take delivery of its first ship in 2028 and has entered into an export credit agreement to fund 80% of the total purchase price. Annual loan amortization is expected to be $66 million following delivery of the ship. Issuer Profile A&K Travel Group Holdings Ltd. (A&K) is global luxury travel company founded in 1962. The company's two principal segments are Journeys (ready-to-book and tailor-made private and group experiences) and Ocean Cruises. Date of Relevant Committee 15-Apr-2026 MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS Fitch's latest quarterly Global Corporates Sector Forecasts Monitor data file which aggregates key data points used in its credit analysis. Fitch's macroeconomic forecasts, commodity price assumptions, default rate forecasts, sector key performance indicators and sector-level forecasts are among the data items included. ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery ----------- ------ -------- A&K Travel Group Holdings Ltd. LT IDR BB- New Rating senior unsecured LT BB- New Rating RR4 ALEXANDRITE MONNET: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has affirmed Alexandrite Monnet UK Holdco plc's Long-Term Issuer Default Rating (IDR) at 'B+' with a Stable Outlook, and senior secured rating at 'BB-' with a Recovery Rating of 'RR3'. Fitch has also assigned Alexandrite Monnet's new EUR475 million secured bond an expected rating of 'BB-(EXP)'/RR3. The final instrument rating is contingent on the planned bond being issued based on terms and conditions conforming to information already received. Alexandrite Monnet wholly owns Befimmo Group SA FIIS, which, at end-December 2025, had a EUR2.9 billion portfolio of high-quality Brussels offices, with solid occupancy, on long-dated, CPI-indexed, leases. The affirmations include the effect of the announced EUR475 million holdco bond (prepaying its existing EUR400 million bond), which increases leverage, but makes interest savings from a coupon lower than the existing 10.5%. The holdco bond relies upon dividends from Befimmo to fund the debt service. Key Rating Drivers Key Rating Drivers for Befimmo Solid Brussels-Focussed Property Portfolio: Reflecting the dynamics of its core Brussels central business district (CBD) market (73% of the portfolio), Befimmo group's end-2025 quality portfolio continues to show solid credentials, including 95.5% occupancy, a 9.1-year average lease length to earliest break (WALB), valued on a 5.6% gross initial yield, with reversionary potential to market rents. The portfolio benefits from CPI indexation, together with cash rents flowing from the recently completed ZIN office and hotel. Passing rent in 2026 will increase as the completed Pacheco office comes on stream, followed by PLXL, and LOOM in 2029. Belgian Régie des Bâtiments: The Belgian Buildings Agency (about 50% of Befimmo's leases) procures office space from landlords such as Befimmo for various government departments. It signs long-dated leases (it can move departments according to changing requirements) and has overviewed ongoing consolidation of state entities' office workforces, while promoting efficient, modern and green buildings. This provides a core backbone of rental income for the Befimmo group. Phased Pre-let Development Programme: After the completion of ZIN's office, residential and hotel (117,000 sq m), Pacheco (12,450 sq m), PLXL (14,300 sq m) and LOOM (24,000 sq m) are mainly pre-let to public-sector entities on long-term leases. Befimmo's 2026 financial profile will benefit from cash rents from Pacheco coming on stream and from lower initial losses from the ZIN hotel operations since its opening in May 2025. Fitch expects Befimmo to undertake further developments, including extensive refurbishments of offices within its existing portfolio (like LOOM), in a supportive letting market. Silversquare Co-Working Activities: The group's accounts consolidate Silversquare's 12 co-working centres across different price points (its larger cost-base inflating the group's revenue and costs), while generating a small EBITDA loss. This keeps Befimmo's management attuned to the requirements of modern flexible office tenants and attracts new tenants to Befimmo's conventional office space. Silversquare is also a beneficial tenant within the Befimmo portfolio. Financial Headroom: Indexation increased Befimmo's cash rents by 2.8% in 2025; other main movements were the ZIN office and residential rents coming on stream, and a EUR2.5 million lease surrender premium. In 2026, cash rents from Pacheco will come on stream. Group figures include contributions from the initially loss-making ZIN hotel and Silversquare. Fitch expects Befimmo-level interest cover at 1.8x in 2026 (2025: 1.6x), with net debt/EBITDA falling to 12.2x-11.0x in 2027-2028 and Fitch-calculated loan-to-value (LTV; excluding development properties) of about 50%. Fitch assesses Befimmo's creditworthiness at 'bb' under its Parent and Subsidiary Linkage (PSL) Rating Criteria. Key Rating Drivers for Alexandrite Monnet Incremental HoldCo Debt: Existing debt is a EUR400 million bond with a 10.5% coupon maturing in 2029. The planned bond will replace this with a EUR475 million secured bond maturing in 2031. Of the bond's net proceeds, there will be a EUR45.9 million shareholder return to Brookfield. PSL Assessment 'Porous': Brookfield controls multiple aspects of Befimmo and Alexandrite Monnet, which, together with the various secured, covenanted funding at Befimmo, shape the linkages between the two. Under the PSL Rating Criteria, Fitch assesses legal ring-fencing as a strong 'porous', and access and control as 'porous'. This results in Befimmo's 'bb' creditworthiness, up to +2 notches above the synthetic consolidated profile of the group at 'B+', which is also the same as Alexandrite Monnet's unchanged IDR. Subordinated to Befimmo's Secured Debt: Alexandrite Monnet indirectly owns Befimmo's shares and receives dividends from this asset-holding group to pay the coupons on its existing EUR400 million (and prospective EUR475 million) secured bond, which is structurally subordinated to the secured debt of Befimmo's property subsidiaries. Consolidated Financial Profile: The planned bond increases Alexandrite Monnet's net debt/EBITDA by 0.7x (2026: 17.9x, 2027: 16.2x), Fitch-calculated consolidated net LTV by 3% to about 68% (pro forma end-2026), while the prospective lower coupon improves consolidated interest cover to 1.2x in 2026 and 1.3x in 2027 (2025: 1.0x). Alexandrite Monnet's standalone interest cover is 1.4x in 2026 (2027: 2.1x). The bond has tightened the financial profile, but Fitch expects cash passing rent to flow in the next two years from completed, pre-let developments, remunerating already incurred debt. The group's financial policy is a maximum company-calculated 60% LTV, whereas the company expects the pro forma to be 63%. Alexandrite Monnet Debt Service: Alexandrite Monnet's debt service relies on Befimmo's dividends, with an interruption unlikely due to sufficient covenant headroom in the latter's secured financings, which have LTV, debt yield or interest coverage ratios. As a Belgian REIT (FIIS status), Befimmo is expected to pay out to Alexandrite Monnet at least 80% of its eligible profits. Letter of Credit Mechanism: There is also liquidity under a letter of credit (LOC)-backed mechanism for Alexandrite Monnet's interest payment shortfalls. Fitch views the six-month LOC interest expense reserve mechanism, supported by Brookfield, as an accretive initial six-month liquidity to cover interest payments on the senior secured bond, should dividends from Befimmo be interrupted. If the LOC is drawn, Brookfield may be required to renew its commitment to, or top-up, any shortfall in the six-month LOC. Peer Analysis Befimmo's asset quality is higher than that of its European office peers, and its cash flow has greater visibility on rents given the long 9.1-year WALB. Within Brookfield-owned Alexandrite Lake Lux Holdings S.à r.l. (IDR: B+/Negative), alstria office S.à r.l has a EUR4.1 billion portfolio concentrated in Germany's top office markets (Hamburg, Düsseldorf and Frankfurt), while Apollo-owned DEMIRE Deutsche Mittelstand Real Estate AG (CCC+) has a EUR0.8 billion secondary office-weighted portfolio located in non-CBD areas. alstria offers mid-market rents in or near CBD locations, where demand is stronger than for DEMIRE's non-CBD affordable office space. alstria's investment proposition is to re-invest in its office portfolio to optimise prospective rents relative to the additional capex incurred. Consequently, it has 22% vacancy at end-2025, with few pre-lets in place, whereas Befimmo's development programme is measured and predominantly pre-let, with group portfolio occupancy above 95%. Lower-leveraged Sirius Real Estate Limited (BBB/Stable) invests in secondary German offices located close to key German cities. Sirius's approach to acquiring higher-yielding assets with moderate capex needs is standardised and has a record of improving cash flow and lease tenors. Fitch’s Key Rating-Case Assumptions - In 2026, 2.1% like-for-like rental growth from indexation, of about 1.8% a year, thereafter - Fitch uses part-year rental contributions from development completions (Pacheco's cash rents come on-stream in 2026; PLXL's mainly in 2027) - Using euro-denominated policy rates of 2% derived from Fitch's Global Economic Outlook, and a lower coupon than the existing 10.5% for the planned EUR475 million holdco bond - Remaining PLXL and LOOM development spend is funded from procured external third-party debt - Befimmo's external dividend to Alexandrite Monnet is modelled as interest expense in this consolidated profile - EUR45.9 million shareholder return to Brookfield from bond proceeds 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 (bbb-, Moderate), Access to Capital (bbb-, Moderate), Liability Profile (b+, Moderate), Property Portfolio (bbb+, Moderate), Rental Income Risk Profile (a, Lower), Profitability (bbb, Moderate), Financial Structure (b-, Higher), and Financial Flexibility (bb-, Higher). - Assessments of the quantitative financial subfactors 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 SCP is 'b+'. To derive the IDR: - Application of Fitch's PSL Rating Criteria results in a consolidated approach. Recovery Analysis Its recovery analysis assumes Befimmo would be liquidated rather than restructured as a going concern in a default. Fitch uses the EUR2.9 billion of investment property assets as at end-December 2025, to which it applies a standard 20% discount, with a standard 10% deduction made for administrative claims. The resultant amount deducts Befimmo's secured debt of EUR1,497 million. The siloed secured financings at the company do not cross-default; so one portfolio grouping can be monetised without forcing the same for the whole portfolio. Individual assets can be sold. Fitch has replaced the existing EUR400 million Alexandrite Monnet bond with the planned EUR475 million tap issuance. Fitch's principal waterfall analysis generates a high ranked recovery for the EUR475 million secured, second-lien debt. At Alexandrite Monnet's 'B+' IDR, its senior secured rating is capped at 'RR3'. RATING SENSITIVITIES Factors That Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Using the PSL criteria, Alexandrite Monnet's IDR is the same as the consolidated profile. - Deterioration of Befimmo Group SA FIIS's operational and financial profile - Alexandrite Monnet's consolidated net debt/EBITDA above 18x - Alexandrite Monnet's consolidated LTV above 65% - Alexandrite Monnet's standalone interest coverage below 1.2x (Befimmo group EBITDA less interest expense/Alexandrite Monnet interest expense, taking into account senior secured funding potentially triggering cash lockups) Factors That Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Material improvement in the consolidated profile including Befimmo Group SA FIIS's operational and financial profile - Alexandrite Monnet's consolidated net debt/EBITDA below 15x - Alexandrite Monnet's consolidated LTV below 55% - Alexandrite Monnet's standalone interest coverage above 1.4x - The capped 'RR3' Recovery Rating, informing the senior secured rating, is unlikely to be revised up Liquidity and Debt Structure Alexandrite Monnet's readily available cash was EUR35 million at end-2025. PLXL and LOOM project development loans have been arranged for drawdown to cover planned capex in 2026 and 2027. Alexandrite has no revolving credit facility or short-term debt. In 1H26, the planned EUR475 million holdco five-year bond will prepay the existing high-coupon EUR400 million bond scheduled to mature in 2029. All of Befimmo's EUR1,497 million debt at end-2025 is secured, while its subsidiaries' pledged portfolios are in separate groupings of companies, with no cross-default; their assets are not cross-collateralised. The nearest-term Befimmo debt refinancing will be the PLXL development financing (probably when the completed asset is sold or rent-producing asset's debt refinanced) and a refinancing of the existing Fedimmo portfolio due December 2027, which Fitch expects Befimmo to proactively manage. At end-2025, virtually all interest rate hedging and protection is short-term and matures in 3Q26. Unlike the Brookfield-owned alstria office S.à.r.l. which is not servicing its midco debt, as a FIIS (REIT equivalent) Befimmo has upstreamed dividends to Alexandrite Monnet to make its debt service payments. Fitch forecasts its dividend capacity ratio (Befimmo EBITDA less its interest expense versus Alexandrite Monnet debt service) as a minimum 1.4x in 2026, rising, thereafter, to above 2x (2025: 1.1x). 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 Alexandrite Monnet UK HoldCo Plc 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 ----------- ------ -------- ----- Alexandrite Monnet UK HoldCo Plc LT IDR B+ Affirmed B+ senior secured LT BB-(EXP) Expected Rating RR3 senior secured LT BB- Affirmed RR3 BB- BOND UK 3: Fitch Assigns 'B+(EXP)' Long-Term IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has assigned Bond UK MidCo 3 Ltd (Bond; also known as BASF Coatings) an expected Long-Term Issuer Default Rating (IDR) of 'B+(EXP)'. The Outlook is Stable. Fitch also has also assigned an expected senior secured rating of 'BB-(EXP)' to the contemplated senior secured loans. The Recovery Rating is 'RR3'. Bond's rating is supported by its strong market position, differentiated products and positive free cash flow, despite high exposure to the cyclical automotive sector and aggressive initial leverage. Fitch's rating case assumes management will deliver planned cost savings and synergies broadly as expected, supporting deleveraging to about 5.6x from about 6.5x pro forma EBITDA gross leverage between end-2026 and end-2029. Fitch expects material free cash flow (FCF) generation after 2027, which could support further deleveraging if used for voluntary debt reduction beyond the rating case. Final ratings are contingent upon closing of the transaction and receipt of final documentation in line with that reviewed by Fitch. Key Rating Drivers Global Market Leader: Bond is a global leader in automotive coating and pre-coating surface treatment, along with PPG Industries, Inc. (BBB+/Stable) and Axalta Coatings Systems Ltd. Its position is particularly strong with auto original equipment manufacturers (OEM), reflecting its established role in their supply chain, reliability, and differentiated offering. The industry is concentrated around five large producers, highlighting the importance of scale and a global footprint to ensure customer proximity. Switching costs are high due to deep R&D collaboration, on-site integration with OEM body shops, and multi-year supplier qualification cycle. Bond also has a top-three position in the refinish segment. Large Auto Exposure: Bond is exposed to the cyclicality of global automotive production levels, as it generates about 55% of its revenues directly with OEMs. This is mitigated by different market dynamics in the refinish and non-OEM surface treatment segments, strong customer diversification, and a globally diversified footprint. In addition, more than 35% of Bond's OEM coatings sales are in the fast-growing APAC region. Coatings are critical for cars but represent a small fraction of production costs, and are therefore less exposed to margin pressure than traditional auto part suppliers. As a result, Bond's EBTIDA margin is resilient, in the mid-teens. Manageable Execution Risk: The transaction has high initial leverage at about 6.5x EBITDA gross leverage at end-2026, but the sponsor identified clear means of profitability improvement by running the business with lower fixed costs than previously under BASF SE (A/Stable), and through identified synergies that can be quickly implemented. The sponsor has relevant experience as it realised the carve out of Axalta from Dupont in 2013. Fitch conservatively assumes lower synergies than the sponsor in its forecasts, but view the targets as consistent with precedent carve-out transactions from large industrial groups. EBITDA Growth, FCF Supports Deleveraging: Fitch forecasts Bond's Fitch-adjusted EBITDA will grow to about EUR0.8 billion in 2029, from about EUR0.6 billion in 2025 under BASF cost structure. This will drive EBITDA gross leverage to 5.6x. Bond's ability to generate positive cash flow is supported by mid-teen EBITDA margins and low-mid-single-digit capex. Fitch projects low-single-digit FCF margins in 2026 and 2027, rising to about 5% after 2027 as carve-out costs conclude. Fitch has not assumed dividends as Fitch understands that the sponsor is prioritising leverage reduction over shareholder distributions. Limited Geopolitical and Tariff Exposure: Bond has no material direct exposure to the Middle East conflict and manageable tariff exposure as production is predominantly local for local. Middle East sales are in the low-single-digit percentage range. Domestic operations, low energy intensity and diversified sourcing limit cost pressure. Fitch estimates a low-double-digit million impact in 2025 from tariff policies, after management's mitigating actions. Peer Analysis Compared to other high-yield chemical producers in EMEA, Bond has above average market position, scale and geographical diversification, and less exposure to energy and commodity prices. However, its exposure to a single cyclical sector is relatively high. Bond is less diversified by end market and has a less differentiated product offering than Nouryon Limited (B+/Stable), reflected in lower profitability margins. Nouryon benefits from leading positions in niche, non-industrial markets and broader diversification. Its leverage of around 6.5x is broadly comparable with Bond's and has historically constrained its rating. Fortis 333, Inc. (Alta, B+/Stable) is one of the closest peers. Both are market leaders in concentrated markets, with products embedded in customer processes, creating high switching costs and barriers to entry. Each also benefits from an asset-light model, strong margins and free cash flow generation. Alta is smaller than Bond and less diversified geographically. Their leverage profiles are similarly high, with both expected to remain above 5x. Envalior Finance GmbH (B/Negative), like Bond, is among the top three globally in its markets and has long-standing customer relationships. Envalior also has high exposure to the automotive sector, but a higher share in non-auto markets such as electronic and electrical products. Envalior is more exposed to volatility in energy and commodity prices. Both companies have high EBITDA leverage at or above 6-7x in the short term. Italmatch Chemicals S.p.A (B/Stable) is smaller than Bond and operates in niche markets, but has greater end-market diversification. Italmatch's leverage is modestly lower, at around 6.5x in 2025. Fitch’s Key Rating-Case Assumptions - The transaction to close in 2Q26 and is funded by EUR4.5 billion in drawn debt - Revenues growing on average 3% a year between 2026-2029 - EBITDA margin averaging 18% throughout 2026-2029 - Capex intensity averaging 5% a year - No dividends or M&A 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 (bb, Moderate), Sector Characteristics (bb+, Moderate), Market and Competitive Positioning (bbb-, Moderate), Diversification and Asset Quality (bb-, Higher), Company Operational Characteristics (bb+, Lower), Profitability (a-, Lower), Financial Structure (b-, Higher), and Financial Flexibility (b+, Moderate). - The quantitative financial subfactors are based on custom CRT financial period parameters: 25% weight for the forecast year 2026, 25% for the forecast year 2027, 25% for the forecast year 2028 and 25% for the forecast year 2029. - 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 SCP is 'b+'. Recovery Analysis The recovery analysis assumes that Bond would be reorganised as a going-concern (GC) in bankruptcy rather than liquidated. The GC EBITDA of EUR580 million (net of lease charges) reflects a weak market environment with low demand from the auto sector followed by a modest recovery. Fitch uses a multiple of 5.5x to estimate a GC EV for Bond because of its leadership position, global platform and differentiated product offering translating to long customer relationships and strong FCF generation. Fitch assumes the company's revolving credit facility to be fully drawn and to rank pari passu with the senior secured debt. Its analysis, after deducting 10% for administrative claims, resulted in a waterfall-generated recovery computation for the senior secured instruments in the 'RR3' band, indicating a 'BB-(EXP)' instrument rating. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade: - EBITDA gross leverage above 6x on a sustained basis - EBITDA interest coverage below 2.5x on a sustained basis - EBITDA margin below 15% on a sustained basis - Neutral to negative FCF Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA gross leverage below 4.0x on a sustained basis - EBITDA interest coverage above 3.5x on a sustained basis - Commitment to sustained deleveraging and gross debt reduction Liquidity and Debt Structure Fitch expects Bond to maintain comfortable liquidity assuming an undrawn EUR750 million revolving credit facility, and considering its expectations of positive FCF. Fitch understands that Bond does not use factoring. The sponsors plan to overfund the transaction to support liquidity in 2026-2027 while carve out and restructuring costs are incurred. The contemplated debt structure totalling EUR4.5 billion euro-equivalent will be spread across euro, US dollar, and renminbi-denominated instruments, and a combination of senior secured term loans B and other senior secured indebtedness to mature in seven years, with very limited amortisation. The revolving credit facility is intended to mature in five years. The senior secured term loans B, other senior secured debt, and revolving credit facility will rank pari passu among themselves and share the same collateral. They will be guaranteed by entities representing less than 50% of Bond's revenues, and structurally subordinated to debt at non-guarantor entities. Issuer Profile Bond is a global leader in automotive coatings and pre-coating surface treatment, to be acquired by The Carlyle Group and Qatar Investment Authority, with BASF SE remaining a minority shareholder. Date of Relevant Committee 16-Apr-2026 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 Bond. 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 ----------- ------ -------- Bond German BidCo 1 GmbH senior secured LT BB-(EXP) Expected Rating RR3 Bond US Bidco 1 Inc. senior secured LT BB-(EXP) Expected Rating RR3 Bond German BidCo 2 GmbH senior secured LT BB-(EXP) Expected Rating RR3 Bond US Bidco 2 Inc. senior secured LT BB-(EXP) Expected Rating RR3 Bond US Bidco 3 Inc. secured LT BB-(EXP) Expected Rating RR3 Bond UK MidCo 3 Ltd LT IDR B+(EXP)Expected Rating EUROSAIL 2006-2BL: Fitch's Outlook on B-sf E1c Note Rating Now Neg. ------------------------------------------------------------------- Fitch Ratings has taken multiple rating actions on Eurosail UK RMBS series, including revising the Outlooks on ES06-2's class E notes to Negative from Stable, ES06-2's class D notes to Positive from Stable and on ES07-1's class C notes to Stable from Negative. Entity/Debt Rating Prior ----------- ------ ----- Eurosail 2006-2BL PLC Class C1a 298805AK8 LT AAAsf Affirmed AAAsf Class C1c 298805AM4 LT AAAsf Affirmed AAAsf Class D1a 298805AN2 LT AAsf Affirmed AAsf Class D1c 298805AQ5 LT AAsf Affirmed AAsf Class E1c XS0266258317 LT B-sf Affirmed B-sf Class F1c XS0266260560 LT CCCsf Affirmed CCCsf Eurosail Prime-UK 2007-A PLC Class A1 XS0328494157 LT AAAsf Affirmed AAAsf Class A2 (restructured) XS1074651628 LT AAAsf Affirmed AAAsf Class B (restructured) XS1074654481 LT B-sf Affirmed B-sf Class C (restructured) XS1074654648 LT CCCsf Affirmed CCCsf Class M (restructured) XS1074652782 LT B-sf Affirmed B-sf Eurosail-UK 2007-1 NC Plc Class B1a 298800AL7 LT AAAsf Affirmed AAAsf Class B1c 298800AN3 LT AAAsf Affirmed AAAsf Class C1a 298800AP8 LT AA+sf Affirmed AA+sf Class D1a 298800AS2 LT BB+sf Affirmed BB+sf Class D1c 298800AU7 LT BB+sf Affirmed BB+sf Class E1c XS0284956330 LT B-sf Affirmed B-sf Eurosail-UK 2007-5 NP Plc Class A1a 29881FAA7 LT B-sf Affirmed B-sf Class A1c 29881FAC3 LT B-sf Affirmed B-sf Class B1c 29881FAF6 LT CCCsf Affirmed CCCsf Class C1c 29881FAJ8 LT CCCsf Affirmed CCCsf Class D1c 29881FAM1 LT CCsf Affirmed CCsf Eurosail 2006-4NP Plc Class B1a 29880JAG7 LT AAAsf Affirmed AAAsf Class C1a 29880JAK8 LT AAAsf Affirmed AAAsf Class C1c 29880JAM4 LT AAAsf Affirmed AAAsf Class D1a 29880JAN2 LT AA-sf Affirmed AA-sf Class D1c 29880JAQ5 LT AA-sf Affirmed AA-sf Class E1c 027421601 LT CCCsf Affirmed CCCsf Transaction Summary The transactions comprise non-conforming and buy-to-let UK mortgage loans originated by Southern Pacific Mortgage Limited (formerly a wholly owned subsidiary of Lehman Brothers) and Alliance & Leicester. KEY RATING DRIVERS BTL Recovery Rate Cap: The non-conforming sector has reported losses that exceed those implied by the indexed property values in the underlying pools. Fitch has therefore applied borrower-level recovery rate (RR) caps to the buy-to-let (BTL) loans in these transactions, in line with those applied to non-conforming loans: 85% at 'Bsf' and 65% at 'AAAsf'. Transaction Adjustment: Fitch has applied its non-conforming assumptions to these transactions. For ES06-2, ES06-4, ES07-1 and ES07-5, Fitch has applied an owner-occupied transaction adjustment of 1.0x and a BTL transaction adjustment of 1.5x to FF. This reflects the historical performance of loans more than three months in arrears, which has been consistently weaker than Fitch's non-conforming index. The performance of ES07-1 and ES06-2 is materially weaker than the index. For ES07-Prime, Fitch has applied an owner-occupied transaction adjustment of 0.5x and a BTL transaction adjustment of 1.0x to FF. The transaction's historical performance of loans more than three months in arrears has been materially better than Fitch's non-conforming index, outperforming by more than 60.7% over the past five years - exceeding the criteria-defined threshold of 25%. Arrears Stabilisation: The proportion of new loans entering arrears has generally stabilised across the transactions since the last review. Arrears above one month have decreased for all transactions except ES07-5, which saw a 1.4% increase. The proportion of loans more than three months in arrears has also increased since the last review. This is driven in part by the continued prepayment of performing collateral, causing the late-stage arrears ratio to rise. Defaulted Loans: Fitch's analysis assumes that loans more than 12 months in arrears are defaulted loans for the purpose of its asset and cash flow modelling. For ES06-2 and ES06-4, the proportion of loans more than 12 months in arrears has risen by 2.5%, while for ES07-5 the increase was 1.8%. This upward trajectory in defaulted loans, alongside the shrinking pool balances, is a key driver of the increasing modelled loss severity for the more junior tranches. Robust Credit Enhancement: Credit enhancement (CE) has increased for all tranches since the last review, with the most pronounced increases for the senior notes. This reflects the continued sequential amortisation of the structures and their non-amortising reserve funds. Trigger breaches have prevented the reserve funds from amoritsing and at current low pool factors (the proportion of the original loan balance still outstanding), they represent a significant and growing proportion of total CE. This provides protection against modelled losses for ES06-2 class D notes and continued CE build-up could lead to convergence with more senior tranches to a higher rating. Fitch expects CE to increase further as the transactions pay down, alongside continued sequential amortisation. Current CE levels are sufficient to withstand very high stresses for the most senior notes. However, the benefit to mezzanine and junior tranches is more limited, particularly given the increasing proportion of late-stage arrears and the tail risks outlined below. Reversal to Pro-Rata Possible: ES07-Prime may revert to pro-rata amortisation in the short term; however, Fitch expects sequential amortisation to resume and persist over the longer term, supported by a 10% switchback — the current note balance has fallen to 11.5%. For ES07-5, a reversion to pro-rata amortisation remains possible, as the relevant 90-day-plus delinquency trigger is reversible. Decreasing Senior Fees: All transactions have incurred high senior fees in recent years, due primarily to LIBOR transition-related costs. However, Fitch has observed a declining trend in senior fees over the past 12 months relative to prior periods. For ES06-4 and ES07-5, additional fees arose from the replacement of transaction counterparties and fixed fees remain higher for these transactions. Fitch anticipates that fees will continue to normalise in line with long-term averages. However, should high fees persist, Fitch could revise its fixed fee assumptions in the transaction analysis, which would disproportionately affect the junior notes. Tail Risks: The transactions carry a large proportion of owner-occupied interest-only (IO) loans, representing a material back-loaded risk within the portfolios. IO loans account for between 77.4% and 87.2% of the pools, with loan counts ranging from 204 to 1,050. The maturities are concentrated between 2026 and 2031, meaning the proportion of loans past maturity is expected to increase materially in the short term. This, alongside the performance volatility of increasingly concentrated pools, limits the upgrade potential for mezzanine and junior tranches. Negative Outlook: The IO maturity risk is the primary basis for the Negative Outlooks on the class E notes of ES06-2 and the class M and B notes for ES07-Prime. ES07-Prime has the highest IO proportion and the fewest loans remaining in the pool. The Negative Outlooks on the class B and M notes in this transaction reflect the heightened performance volatility expected as the pool becomes increasingly concentrated and IO loans approach or pass their maturity dates. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The transactions' performance may be affected by adverse changes in market conditions and the economic environment. Weakening economic performance is strongly correlated to increasing levels of delinquencies and defaults and could reduce the CE available to the notes. Fitch found that a 15% increase in the weighted average FF (WAFF) and a 15% decrease in the weighted average recovery rate (WARR) could lead to downgrades of three notches each for ES06-2's class D notes and ES07-1's class C and class D notes and two notches for ES06-4 class D notes. There is no impact on other notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Stable to improved asset performance driven by stable delinquencies and defaults would lead to increasing CE and, potentially, upgrades. Fitch found that a decrease in the WAFF of 15% and an increase in the WARR of 15% would lead to upgrades of one notch for ES07-1's class C notes, two notches each for ES06-2's class D notes, ES07-Prime's class B notes, and ES07-5's class A notes; three notches each for ES06-4's class D notes, ES07-Prime's class M notes, and ES07-1's class D notes; and five notches for ES07-1's class E notes. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. Fitch did not undertake a review of the information provided about the underlying asset pools ahead of the transaction's initial closing. The subsequent performance of the transactions over the years is consistent with the agency's expectations given the operating environment and Fitch is therefore satisfied that the asset pool information relied upon for its initial rating analysis was adequately reliable. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations Each transaction has an ESG Relevance Score of '4' for Customer Welfare - Fair Messaging, Privacy & Data Security due to a material concentration of IO loans, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Each transaction has an ESG Relevance Score of '4' for Human Rights, Community Relations, Access & Affordability due to mortgage pools with limited affordability checks and self-certified income, 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. SATUS 2024-1: S&P Affirms 'BB (sf)' Rating on Class E-Dfrd Notes ---------------------------------------------------------------- S&P Global Ratings raised its credit ratings on Satus 2024-1 PLC's class B notes to 'AAA (sf)' from 'AA (sf)', class C-Dfrd notes to 'A+ (sf)' from 'A (sf)', and class D-Dfrd notes to 'A- (sf)' from 'BBB (sf)'. At the same time, S&P affirmed its 'AAA (sf)' and 'BB (sf)' ratings on the class A and E-Dfrd notes, respectively. The rating actions follow S&P's review of the transaction's underlying assets and structural features, and the application of our criteria. The transaction closed in April 2024 and, as of the March 2026 servicer report, the pool factor had declined to 34.5%, with cumulative losses increasing to 10.3%. S&P said, "We increased our base case hostile termination loss assumption to 14.0% from 13.5% (previously increased from 12.0% in April 2025). The voluntary termination base case assumption remains unchanged at 2.0%. We also increased our recovery rate base case assumption to 65% from 60%, reflecting recent performance and market trends. Finally, we increased our residual value stress by 0.9% at the 'AAA' level to reflect expected maturity concentrations. We maintained our loss multiples and recovery haircuts." As of the March 2026 servicer report, the available credit enhancement for the class A, B, C-Dfrd, and D-Dfrd notes had increased to 74.0%, 42.1%, 16.0%, and 7.3%, respectively, compared with 26.4%, 15.6%, 6.7%, and 3.7% at closing. The class E-Dfrd notes have no available credit enhancement. S&P said, "We performed our cash flow analysis to test the impact of increased hostile termination and recovery rate assumptions, coupled with the deleveraging of the portfolio and resultant increase in credit enhancement. Our analysis indicates that the available credit enhancement, reserve fund, and excess spread for the class A and E-Dfrd notes are sufficient to withstand the credit and cash flow stresses applied at the 'AAA' and 'BB' rating levels, respectively. We therefore affirmed our ratings on these classes of notes. We expect the class A notes to fully redeem within four months. "Our upgrades of the class B, C-Dfrd, and D-Dfrd notes reflect their increased credit enhancement, which enables them to withstand higher stresses than at their current rating levels." As of March 31, 2026, the originator has identified transaction accounts--with a combined outstanding balance of £34,000--that are eligible under the Financial Conduct Authority's redress scheme for mis-sold car finance loans. The associated costs will be borne by the originator and are not expected to affect the transaction's cash flows. Sovereign, counterparty, and operational risks do not constrain the ratings. Legal risks continue to be adequately mitigated, in S&P's view. Satus 2024-1 PLC securitizes a portfolio of auto loan receivables originated by Startline Motor Finance Ltd. ********* 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. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. * * * End of Transmission * * *