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260615.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Monday, June 15, 2026, Vol. 27, No. 118 Headlines A R M E N I A YEREVAN: Fitch Affirms 'BB-' LongTerm IDRs, Outlook Positive F R A N C E SEQUANS COMMUNICATIONS: Norman Brodt Named Chief Financial Officer G E R M A N Y TELE COLUMBUS: S&P Downgrades LT ICR to 'CCC', Outlook Negative I R E L A N D HARVEST CLO XL: Fitch Assigns 'B-sf' Final Rating on Class F Notes HENLEY CLO XVII: S&P Assigns Prelim. B-(sf) Rating on Cl. E Notes PROVIDUS CLO XV: S&P Assigns B-(sf) Rating on Class F Notes I T A L Y CENTURION NEWCO: S&P Affirms 'B-' ICR & Alters Outlook to Stable EVOCA SPA: Fitch Lowers Long-Term IDR to 'B-', Outlook Negative IBLA SRL: DBRS Confirms CCCsf Rating on Class B Bonds POPOLARE BARI 2017: DBRS Confirms Csf Rating on Class B Debt L U X E M B O U R G ARENA LUXEMBOURG: Fitch Assigns 'BB' LongTerm IDR, Outlook Stable R U S S I A [] Fitch Alters 7 Uzbek State Banks' Outlooks to Positive S P A I N MEIF 5 ARENA: S&P Affirms 'BB' LT ICR on Proposed Refinancing PIQUE MIDCO 2: Moody's Affirms B2 CFR & Alters Outlook to Negative T U R K E Y ANKARA METROPOLITAN: Fitch Affirms BB- LongTerm IDRs, Outlook Stabl BALIKESIR METROPOLITAN: Fitch Affirms 'B+' IDRs, Outlook Stable ENPARA BANK: Fitch Assigns 'BB-' LongTerm IDRs, Outlook Stable IZMIR METROPOLITAN: Fitch Affirms BB- LongTerm IDRs, Outlook Stable KONYA METROPOLITAN: Fitch Affirms BB- LongTerm IDRs, Outlook Stable MANISA METROPOLITAN: Fitch Affirms BB- LongTerm IDRs U N I T E D K I N G D O M ADVANCED FIRE: FRP Advisory Appointed as Joint Administrators BOLTON GARDENS: FRP Advisory Appointed as Joint Administrators CASTELL 2025-1 PLC: DBRS Confirms BB(low) Rating on Class F Notes JERROLD FINCO: Fitch Rates GBP300MM 8.5% Second Lien Notes 'BB-' LOWNDES SQUARE: FRP Advisory Appointed as Joint Administrators MAREX GROUP: Fitch Rates USD500MM Sub. Notes 'BB' PEPCO GROUP: Fitch Alters Outlook on 'BB' Long-Term IDR to Positive SIG PLC: S&P Lowers LongTerm ICR to 'B-', Outlook Stable SMOKE & FIRE: CBA Business Appointed as Joint Administrators TOGETHER ASSET 2026-1: DBRS Finalizes (P)BB(low) Rating on X Notes - - - - - ============= A R M E N I A ============= YEREVAN: Fitch Affirms 'BB-' LongTerm IDRs, Outlook Positive ------------------------------------------------------------ Fitch Ratings has affirmed the Armenian City of Yerevan's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BB-' with Positive Outlooks. The affirmation reflects Fitch's view that Yerevan's risk profile and financial profile are mostly unchanged since the last review, leading to its 'bbb-' Standalone Credit Profile (SCP). The city's low debt continues to be offset by a weak institutional framework, including a lack of rule-based budgetary policies. Yerevan's IDRs are not affected by any asymmetric risk or extraordinary support from the central government, but they are capped by Armenia's (BB-/Positive) sovereign ratings. KEY RATING DRIVERS Standalone Credit Profile Yerevan's 'bbb-' SCP reflects a combination of a 'Weaker' risk profile and financial profile at the lower end of 'aaa' category, as well as peer comparison. Risk Profile: 'Weaker' Yerevan's 'Weaker' risk profile is driven by five 'Weaker' key risk factors and one 'Midrange' factor. Revenue Robustness: 'Weaker' Transfers from the central budget remain a major revenue source but have declined steadily to 35% of operating revenue in 2025 from 70% in 2018, with about 80% earmarked for targeted spending or delegated mandates. The rest comprises general-purpose grants to enhance fiscal capacity. Property tax, the city's only own tax, averaged 22% of operating revenue in 2021-2025. Locally collected fees and charges make up most of the remaining operating revenue, with their share rising to more than 35% in 2024-2025 from an average of 16% over the preceding five years. Yerevan's revenue base remains materially exposed to a single 'BB-' rated counterparty through its continued reliance on central government transfers, which, alongside limited own-source revenue diversification, supports the 'Weaker' revenue robustness. Revenue Adjustability: 'Weaker' Institutional arrangements - under which fiscal authority is concentrated at the central government, with a monopoly on setting tax rates or introducing new taxes - limit the city's fiscal flexibility. The property tax base is gradually increasing, following the central government's decision to raise the cadastral value of real estate, which drives overall tax proceeds. Yerevan also collects various fees and charges, part of which the city can adjust. Most of these are already at their maximum, so an increase in revenue would cover less than 50% of the revenue decline Fitch would expect in an economic downturn. Expenditure Sustainability: 'Midrange' Yerevan exercises spending restraint, with spending movements generally tracking revenue changes. The city's responsibilities have remained stable through economic cycles. The largest spending item is public transport (32% of total spending in 2025), followed by preschool and school education (31%). A large portion of spending is financed by transfers from the central budget, which makes the city's budgetary policy dependent on central government decisions. Expenditure Adjustability: 'Weaker' Most spending responsibilities are mandatory and therefore inflexible. This means that the bulk of spending would be difficult to cut in response to a revenue shortfall. A moderate share of capex, averaging 21% of total expenditure in 2021-2025, further constrains spending flexibility. In 2025, capex declined to 12% of total expenditure from 27% in 2024, returning to levels seen in 2019-2022. Low per-capita spending relative to international peers further limits the scope for adjustment. Liabilities and Liquidity Robustness: 'Weaker' Capital markets in Armenia are underdeveloped, and the city has limited debt management experience, having been debt-free until 2020 when it drew down a loan from the European Investment Bank (EIB; AAA/Stable). The loan was extended on favourable terms, with an average interest rate currently at 2.2%. Each tranche carries a 22-year tenor, with principal repaid in equal instalments from the sixth year onward. The national legal framework imposes strict borrowing constraints, prohibiting Yerevan from raising new debt until existing obligations are fully repaid. However, the national legislature is currently considering amendments that could relax these restrictions, potentially allowing the city to take on additional borrowings. Fitch has incorporated this possibility into its rating case. Liabilities and Liquidity Flexibility: 'Weaker' The city's largest source of liquidity is its accumulated cash, which totalled AMD16.4 billion at end-2025. There are no restrictions on the use of liquidity. Yerevan holds its cash in treasury accounts, because deposits with commercial banks are prohibited under the national legal framework. The city could borrow from the national treasury for extra liquidity. The limited forms of liquidity available and counterparty risk cap at 'BB-' result in its 'Weaker' assessment. Financial Profile: 'aaa category' Fitch classifies Yerevan as a type B local and regional government, as it has to cover debt service from cash flow annually. Under Fitch's rating case, the city's debt payback ratio - the primary metric of financial profile assessment for type B - remains strong at under 5x, which corresponds to a 'aaa' assessment. The actual debt service coverage ratio (operating balance-to-debt service, including short-term debt maturities) remains above 4x during most of the rating case, before decreasing to 3.0x by 2030. The fiscal debt burden, which will gradually increase during 2026-2030 from its current near-zero level, remains moderate at below 50%. A strong assessment of all three metrics results in the 'aaa' financial profile. Yerevan completed the final drawdown of its EUR7 million EIB loan in 2025 and has no other direct debt. In calculating adjusted debt, Fitch includes AMD9 billion of government-related entity debt that is likely to crystallise as the city's obligations. Its base case assumes that restrictions on new borrowing remain in place over the rating horizon. The rating case considers the possibility of Yerevan being able to attract new debt from 2027, maintain large capex, and use borrowing to finance the resulting deficit. Other Rating Factors Yerevan's IDRs are not affected by any asymmetric risk or extraordinary support from the central government, but they are capped by Armenia's (BB-/Positive) sovereign ratings due to the city's constrained fiscal autonomy and its high institutional and financial dependence on the central government. Short-Term Ratings Yerevan's Short-Term IDR of 'B' is mapped to its 'BB-' IDR. Peer Analysis Yerevan has no national peers. Its closest regional peers are Astana, Kazakhstan's capital; Almaty, Kazakhstan's largest city; and Tashkent, the capital of Uzbekistan. Other international peers include Turkish local and regional governments: Ankara Metropolitan, Mersin Metropolitan, and Konya Metropolitan. Tashkent and Konya have SCPs in the 'bb' category, reflecting weaker financial profile assessments. Other peers' SCPs are in the 'bbb' category, with notching differences primarily reflecting variations in payback ratios under Fitch's rating case. Most peers' IDRs are capped by their respective sovereign ratings, except for Tashkent, whose SCP is one notch below Uzbekistan's IDR of 'BB'/Positive. Issuer Profile Yerevan is the capital of Armenia and the largest metropolitan area in the country. At end-2024 it had a population of more than 1.1 million. The economy is dominated by the services sector and its wealth metrics are modest compared with international peers. The city's accounts are cash-based, and its budget framework covers a single year. Key Assumptions Risk Profile: 'Weaker' Revenue Robustness: 'Weaker' Revenue Adjustability: 'Weaker' Expenditure Sustainability: 'Midrange' Expenditure Adjustability: 'Weaker' Liabilities and Liquidity Robustness: 'Weaker' Liabilities and Liquidity Flexibility: 'Weaker' Financial Profile: 'aaa' Asymmetric Risk: 'N/A' Support (Budget Loans): 'N/A' Support (Ad Hoc): 'N/A' Rating Cap (LT IDR): 'BB-' Rating Cap (LT LC IDR) 'BB-' Rating Floor: 'N/A' Quantitative assumptions - Issuer Specific Fitch's rating action is driven by the following assumptions for reference metrics under its 2026-2030 rating case: - Payback ratio: maximum 4.2x in 2030 - Actual debt service coverage ratio: minimum 3.0x in 2030 - Fiscal debt burden: consistently below 50% over 2026-2030 Fitch's through-the-cycle rating case incorporates a combination of revenue, cost and financial risk stresses. It is based on 2021-2025 published figures and its expectations for 2026-2030: - Operating revenue up 3.8% year-on-year (yoy) in 2025-2029 driven by economic activity in the city - Opex up 4.7% yoy on average in 2025-2029, driven by inflation - Net capital balance at a negative AMD20.5 billion on average in 2026-2030, large relative to historical averages - Apparent cost of debt on average 4.9% in 2026-2030, driven by policy rates in Armenia Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Negative rating action on Armenia would lead to corresponding action on Yerevan's ratings as the region's IDRs are currently constrained by the sovereign ratings - A downward revision of the SCP below 'bb-', which could be driven by a material deterioration of the city's debt sustainability leading to a payback ratio above 9x on a sustained basis under Fitch's rating case Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - A positive rating action on the sovereign could lead to a corresponding action on Yerevan's IDRs Climate Vulnerability Signals The results of its Climate.VS screener did not indicate an elevated risk for Yerevan. 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. Discussion Note Committee date: 1 June 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 Yerevan's IDRs are capped by Armenia's sovereign IDRs. Entity/Debt Rating Prior ----------- ------ ----- Yerevan City LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- =========== F R A N C E =========== SEQUANS COMMUNICATIONS: Norman Brodt Named Chief Financial Officer ------------------------------------------------------------------ Sequans Communications S.A. announced that Deborah Choate, Chief Financial Officer, will retire from the Company effective June 30, 2026, following a distinguished tenure of 19 years. The Company also announced that Norman Brodt, currently Vice President, Finance, will succeed Ms. Choate as Chief Financial Officer effective upon her retirement. "On behalf of the Board and the entire management team, I would like to thank Deborah for her leadership and significant contributions to Sequans," said Georges Karam, Chief Executive Officer. "During her tenure, she has played a critical role in strengthening our financial position and leading strategic initiatives. We wish her all the best in her retirement." Ms. Choate added, "It has been a privilege to serve as CFO of Sequans. I am proud of what we have accomplished and confident in the Company's future. I look forward to supporting a smooth transition." "Norman is an accomplished finance leader with a deep understanding of our business and operations," added Dr. Karam. "In his current role as VP Finance, he has been instrumental in financial planning, capital allocation and operational improvements. I am confident that he will provide strong financial leadership as we continue to execute our strategy." Mr. Brodt said, "I am honored to take on the role of CFO at Sequans and build on the strong foundation established by Deborah. I look forward to working with the team to drive continued growth and value for our shareholders." Norman Brodt has served as Vice President, Finance since January 2025. In this role, he has been responsible for financial planning & analysis, process improvement and financial reporting. Prior to joining Sequans, he held multiple leadership roles at Alcatel Lucent/Nokia, including CFO of Alcatel-Lucent Shanghai Bell and CFO/COO of Alcatel Radio Frequency Systems. He holds a Master's degree in Business Administration from the University of Bayreuth, Germany. About Sequans Communications Colombes, France-based Sequans Communications S.A. is a fabless semiconductor company that designs, develops, and markets integrated circuits and modules for 4G and 5G cellular IoT devices. Ernst & Young Audit, Sequans' independent registered public accounting firm for the fiscal year ended December 31, 2025, has included an explanatory paragraph in their opinion that accompanies the audited consolidated financial statements as of and for the year ended December 31, 2025, indicating that the Company has suffered recurring losses from operations, has a working capital deficiency, and has stated that substantial doubt exists about the Company's ability to continue as a going concern. As of December 31, 2025, the Company had $243.6 million in total assets, $11.3 million in total non-current liabilities, $104.6 million total current liabilities, and $127.7 million in total equity. ============= G E R M A N Y ============= TELE COLUMBUS: S&P Downgrades LT ICR to 'CCC', Outlook Negative --------------------------------------------------------------- S&P Global Ratings lowered its long-term ratings on German cable-TV provider Tele Columbus AG and its senior secured term loan to 'CCC' from 'CCC+'; the '3' recovery rating on the senior secured term loan is unchanged, indicating its expectations of 50%-70% (rounded estimate: 55%) recovery prospects in the event of a payment default. The negative outlook reflects S&P's view of an increased probability of a default--whether conventional or through a distressed exchange or restructuring--absent favorable developments in the next 12 months. Tele Columbus is engaged in a refinancing process and has appointed Lazard and Freshfields as advisors, with the majority of its secured lenders having entered into a co-operation agreement, and S&P sees an increased likelihood of a distressed exchange or loan modification in the next 12 months, which it could classify as tantamount to a default. The group's capital structure remains unsustainable, driven by an accelerating debt burden that is outpacing revenue growth and is projected to result in S&P Global Ratings-adjusted debt to EBITDA of close to 13.9x in 2026. Tele Columbus announced on May 21, 2026, that it has engaged Lazard and Freshfields for a refinancing process with its lenders, to optimize its balance sheet and funding structure. A qualified majority of secured creditors--representing over 75% of the secured debt--have entered into a co-operation agreement, while Tele Columbus has also launched an amended request to enhance operational flexibility. Discussions with lenders are in the early stages, but S&P Global Ratings views these developments as indicative of a potential debt restructuring, which S&P could classify as a default. S&P said, "We expect liquidity headroom to reduce over the next 12 months. We estimate free operating cash flow after leases to remain negative at EUR50 million-EUR60 million annually over our forecast horizon. We expect prudent capital expenditure (capex) management to continue--with reported 2026 levels almost 40% lower than in 2024--and EUR20 million in anticipated asset sale proceeds. However, we forecast a EUR30 million-EUR40 million cash usage over the year 2026. Given the high operating uncertainties, intra-year working capital volatility, and semi-annual cash interest payments, liquidity may tighten further, potentially reducing the cash balance toward the EUR20 million liquidity covenant in the medium term. "We continue to view the capital structure as unsustainable. The company faces an increasing debt burden, with its outstanding term loan and notes featuring elevated payment-in-kind (PIK) interest that causes debt to increase rapidly and outpace our revenue growth projections. Cost reductions and fewer exceptional costs are expected to improve adjusted debt-to-EBITDA to about 13.9x in 2026, but sustainable deleveraging will likely remain a challenge. Furthermore, the delay in the sale of its ServCo division and the lack of new equity injections make substantial debt reduction unlikely. "Tele Columbus' performance should stabilize in 2026 following weak results in 2025, though significant uncertainty remains, in our view. We expect moderate top-line growth of 1.2% in 2026 as increased internet users offset declining TV subscribers, while adjusted EBITDA margins are forecast to improve toward 30% due to reduced exceptional costs and enhanced operational efficiencies. Reduced capex, lower marketing spend, and asset sales should provide short-term liquidity relief, but we view these unsustainable cost-cutting measures as a strategic trade-off that may undermine the company's competitive position and customer growth in the medium term. "The negative outlook reflects our view of an increased probability of a default--whether conventional or through a distressed exchange or restructuring -- absent favorable developments in the next 12 months. "We could lower our ratings on Tele Columbus if we determine that a default or another debt restructuring transaction is increasingly likely in the next six months. "We could also lower our rating if Tele Columbus announces an agreement with lenders to undertake a restructuring that we classify as distressed and tantamount to a default or if it faced a conventional default. "Although unlikely, we could raise our ratings if Tele Columbus improves its liquidity position and reduces the risk of a distressed debt restructuring." ============= I R E L A N D ============= HARVEST CLO XL: Fitch Assigns 'B-sf' Final Rating on Class F Notes ------------------------------------------------------------------ Fitch Ratings has assigned Harvest CLO XL DAC notes final ratings. Entity/Debt Rating Prior ----------- ------ ----- Harvest CLO XL DAC A XS3353902888 LT AAAsf New Rating AAA(EXP)sf B XS3353903423 LT AAsf New Rating AA(EXP)sf C XS3353902961 LT Asf New Rating A(EXP)sf D XS3353902615 LT BBB-sf New Rating BBB-(EXP)sf E XS3353903779 LT BB-sf New Rating BB-(EXP)sf F XS3353903852 LT B-sf New Rating B-(EXP)sf Subordinated Notes XS3353903266 LT NRsf New Rating NR(EXP)sf Transaction Summary Harvest CLO XL DAC is a securitisation of mainly senior secured obligations (at least 90%) with a component of senior unsecured, mezzanine, second-lien loans and high-yield bonds. Note proceeds were used to fund a portfolio with a target par of EUR400 million. The portfolio is actively managed by Investcorp Credit Management EU Limited. The collateralised loan obligation (CLO) has a 4.75-year reinvestment period, and a 7.75-year weighted average life (WAL) test at closing. KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors in the identified portfolio to be in the 'B' category. The Fitch-calculated weighted average rating factor (WARF) of the identified portfolio is 23.6. High Recovery Expectations (Positive): At least 90% of the portfolio comprises senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-calculated weighted average recovery rate (WARR) of the identified portfolio is 65.7%. Diversified Portfolio (Positive): The transaction has a concentration limit for the 10 largest obligors of 20% and a maximum exposure to the three largest Fitch-defined industries in the portfolio of 40%. These covenants ensure the asset portfolio will not be exposed to excessive concentration. Portfolio Management (Neutral): The transaction has two matrix sets that correspond to a top 10 obligor limit of 20%, and two fixed-rate asset limits of 5% and 10%. The closing matrix set has a WAL test of 7.75 years while the forward matrix set corresponds to a WAL test of seven years. The forward matrix set is applicable 21 months after closing, subject to the aggregate collateral balance (with defaults carried at Fitch collateral value) being at least at the reinvestment target par amount. The transaction has a reinvestment period of about 4.75 years and includes reinvestment criteria similar to those of other European deals. Its analysis is based on a stressed-case portfolio with the aim of testing the robustness of the transaction structure against its covenants and portfolio guidelines. WAL Step-Up Feature (Neutral): The transaction can extend the WAL test by one year on or after the WAL test step-up determination date, which is one year after closing, provided the aggregate collateral balance (with defaulted obligations carried at their Fitch collateral value) is at least equal to the reinvestment target par amount and the transaction passes all its portfolio profile, collateral quality and coverage tests. Cash Flow Modelling (Positive): The WAL used for the transaction's Fitch-stressed portfolio analysis is 12 months less than the WAL test covenant at the issue date. This is to account for strict reinvestment conditions envisaged by the transaction after its reinvestment period. These include passing the coverage tests and the Fitch 'CCC' bucket limitation test, and a WAL test covenant that gradually steps down over time, both before and after the end of the reinvestment period. Fitch believes these conditions would reduce the effective risk horizon of the portfolio during stress periods. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A 25% increase of the mean default rate (RDR) and a 25% decrease of the recovery rate (RRR) across all ratings of the identified portfolio would have no impact on the class A to D notes and would lead to downgrades of one notch for the class E notes and to below 'B-sf' for the class F notes. Downgrades, which are based on the identified portfolio, may occur if the loss expectation is larger than assumed, due to unexpectedly high levels of defaults and portfolio deterioration. The class B and F notes each have a rating cushion of two notches, the class C and D notes each have a rating cushion of three notches, and the class E notes have a cushion of four notches, due to the better metrics and shorter life of the identified portfolio than the Fitch-stressed portfolio. The class A notes do not have any rating cushion as they are already at the highest achievable rating. Should the cushion between the identified portfolio and the Fitch-stressed portfolio be eroded either due to manager trading or negative portfolio credit migration, a 25% increase of the mean RDR and a 25% decrease of the RRR across all ratings of the Fitch-stressed portfolio would lead to downgrades of two notches each for the class A to D notes and below 'B-sf' for the class E and F notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A 25% reduction of the RDR and a 25% increase in the RRR across all ratings of the Fitch-stressed portfolio would lead to upgrades of up to four notches each for the rated notes, except for the 'AAAsf' rated notes. Upgrades during the reinvestment period, which are based on the Fitch-stressed portfolio, may occur on better-than-expected portfolio credit quality and a shorter remaining WAL test, allowing the notes to withstand larger-than- expected losses for the remaining life of the transaction. Upgrades after the end of the reinvestment period may result from stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY The majority of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and/or other Nationally Recognised Statistical Rating Organisations and/or European Securities and Markets Authority- registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk-presenting entities. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the rating agency's analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations Fitch does not provide ESG relevance scores for Harvest CLO XL DAC. In cases where Fitch does not provide ESG relevance scores in connection with the credit rating of a transaction, programme, instrument or issuer, Fitch will disclose any ESG factor that is a key rating driver in the key rating drivers section of the relevant rating action commentary. HENLEY CLO XVII: S&P Assigns Prelim. B-(sf) Rating on Cl. E Notes ----------------------------------------------------------------- S&P Global Ratings assigned its preliminary credit ratings to Henley CLO XVII DAC's class A, B, C, D, E, and F notes and class A loan. At closing, the issuer will also issue EUR35.55 million unrated subordinated notes. The reinvestment period will be approximately 4.5 years, while the noncall period will be 1.5 years after closing. Under the transaction documents, the rated notes and loan will pay quarterly interest unless there is a frequency switch event. Following this, the notes and loan will switch to semiannual payment. The preliminary 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 S&P expects to be bankruptcy remote. -- The transaction's counterparty risks, which S&P expects to be in line with its counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,827.58 Default rate dispersion 431.70 Weighted-average life (years) 5.23 Obligor diversity measure 161.47 Industry diversity measure 26.21 Regional diversity measure 1.35 Transaction key metrics Total par amount (mil. EUR) 500 Defaulted assets (mil. EUR) 0 Number of performing obligors 184 Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 0.00 Target 'AAA' weighted-average recovery (%) 36.54% Actual weighted-average spread net of floors (%) 3.87 Actual weighted-average coupon (%) 6.08 Rationale S&P said, "Our preliminary ratings reflect our assessment of the collateral portfolio's credit quality, which has a weighted-average rating of 'B'. "The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and bonds. Therefore, we conducted our credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. "In our cash flow analysis, we used the EUR500 million target par amount, the covenanted weighted-average spread of 3.65%, the covenanted weighted-average coupon of 5.25%, and the target weighted-average recovery rate. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "At closing, we expect the transaction's documented counterparty replacement and remedy mechanisms to 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 preliminary ratings. "We expect the transaction's legal structure and framework to be bankruptcy remote, in line with our legal criteria. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B, C, D, and E notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO will be in its reinvestment phase starting from the effective date, during which the transaction's credit risk profile could deteriorate, we have capped our preliminary ratings assigned to the notes." The class A notes and class A loan can withstand stresses commensurate with the assigned preliminary ratings. The class F notes' current BDR cushion is negative at the assigned rating. S&P said, "Nevertheless, based on the portfolio's actual characteristics and additional overlaying factors, including our long-term corporate default rates and recent economic outlook, we believe 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 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 26.93% (for a portfolio with a weighted-average life of 5.23 years) versus 16.73% if we were to consider a long-term sustainable default rate of 3.20% for 5.23 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 preliminary 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 A to E notes and class A loan, 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 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 our ESG benchmark for the sector, no specific adjustments have been made in S&P's rating analysis to account for any ESG-related risks or opportunities. Henley CLO 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 will be managed by Napier Park Global Capital LTD. Ratings Prelim Prelim amount Credit Class rating* (mil. EUR) enhancement (%) Interest rate§ A AAA (sf) 206.60 38.00 Three/six-month EURIBOR plus 1.28% A Loan AAA (sf) 103.40 38.00 Three/six-month EURIBOR plus 1.28% B AA (sf) 53.75 27.25 Three/six-month EURIBOR plus 1.85% C A (sf) 30.00 21.25 Three/six-month EURIBOR plus 2.20% D BBB- (sf) 36.25 14.00 Three/six-month EURIBOR plus 3.05% E BB- (sf) 22.50 9.50 Three/six-month EURIBOR plus 5.25% F B- (sf) 15.00 6.50 Three/six-month EURIBOR plus 8.58% Sub Notes NR 35.55 N/A N/A *The preliminary ratings assigned to the class A and B notes and A-Loan address timely interest and ultimate principal payments. S&P's preliminary ratings address ultimate interest and principal payments on the rest of the other 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. PROVIDUS CLO XV: S&P Assigns B-(sf) Rating on Class F Notes ----------------------------------------------------------- S&P Global Ratings assigned credit ratings to Providus CLO XV DAC's A Loan and class A, B, C, D, E, and F notes. At closing, the issuer also issued EUR29.30 million unrated subordinated notes. The reinvestment period will be approximately 4.5 years, while the noncall period will be 1.5 years after closing. Under the transaction documents, the rated notes and loan will pay quarterly interest unless a frequency switch occurs. 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 2,734.76 Default rate dispersion 530.75 Weighted-average life (years) 4.95 Obligor diversity measure 158.14 Industry diversity measure 19.82 Regional diversity measure 1.41 Transaction key metrics Total par amount (mil. EUR) 400 Defaulted assets (mil. EUR) 0 Number of performing obligors 174 Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 1.06 Target 'AAA' weighted-average recovery (%) 36.57% Actual weighted-average spread net of floors (%) 3.44 Actual weighted-average coupon (%) 3.59 Rating rationale S&P said, "Our ratings reflect our assessment of the collateral portfolio's credit quality, which has a weighted-average rating of 'B'. "The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and bonds. Therefore, we conducted our credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. "In our cash flow analysis, we used the EUR400 million target par amount, the covenanted weighted-average spread of 3.37%, and the target weighted-average recovery rates. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "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 E notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO is still in its reinvestment phase starting from the effective date, during which the transaction's credit risk profile could deteriorate, we capped our ratings assigned to the notes." The class A Loan and class A notes can withstand stresses commensurate with the assigned ratings. The class F notes' current break-even default rate cushion is negative at the assigned rating. Nevertheless, based on the portfolio's actual characteristics and additional overlaying factors, including S&P's long-term corporate default rates and recent economic outlook, it 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 23.25% (for a portfolio with a weighted-average life of 4.95 years) versus 15.85% if S&P was to consider a long-term sustainable default rate of 3.2% for 4.95 years. -- Whether the tranche is vulnerable to nonpayment. -- If there is a one-in-two chance of this tranche defaulting. -- If S&P envisions 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. "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 all rated classes of notes and the class A Loan. "In addition to our standard analysis, to indicate how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we have also included the sensitivity of the ratings on the class A to E notes and A Loan, 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 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 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." Providus CLO XV DAC is a European cash flow CLO securitization of a revolving pool, comprising euro-denominated senior secured loans and bonds issued mainly by speculative-grade borrowers. Permira Credit European CLO Manager 2 LLP manages the transaction. Ratings Amount Credit Class Rating* (mil. EUR) enhancement (%) Interest rate§ A AAA (sf) 165.00 38.00 Three/six-month EURIBOR plus 1.31% A Loan AAA (sf) 83.00 38.00 Three/six-month EURIBOR plus 1.31% B AA (sf) 44.00 27.00 Three/six-month EURIBOR plus 1.95% C A (sf) 24.00 21.00 Three/six-month EURIBOR plus 2.30% D BBB- (sf) 28.00 14.00 Three/six-month EURIBOR plus 3.25% E BB- (sf) 18.00 9.50 Three/six-month EURIBOR plus 5.35% F B- (sf) 12.00 6.50 Three/six-month EURIBOR plus 8.71% Sub notes NR 29.30 N/A N/A *The ratings assigned to the A Loan and class A and B notes address timely interest and ultimate principal payments. S&P's ratings address ultimate interest and principal payments on the rest of the other 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. ========= I T A L Y ========= CENTURION NEWCO: S&P Affirms 'B-' ICR & Alters Outlook to Stable ---------------------------------------------------------------- S&P Global Ratings revised its outlook on IT services provider Centurion Newco SpA (Engineering) to stable from negative and affirmed its 'B-' ratings on Engineering and its debt. The stable outlook reflects our expectation that Engineering's debt to EBITDA will reduce to below 8.5x in 2026, underpinned by 3% organic revenue growth and recovering EBITDA margin from lower software development costs and exceptional expenses. S&P expects sustained growth and declining nonrecurring expenses of Centurion Newco SpA (Engineering) will drive deleveraging over the next two years and that generation of free operating cash flow (FOCF) after leases will remain positive but weak. Engineering continues to benefit from a comfortable liquidity position until its next maturities in 2028, supported by sizable cash balances, undrawn revolving credit facility (RCF), and its cash preserving payment-in-kind (PIK) facility. S&P expects Engineering will address the RCF and senior secured notes (SSN) 2028 maturities before May 2027. S&P said, "We revised the outlook to stable to reflect our view that sustained growth and declining nonrecurring expenses will drive deleveraging over the next two years. We expect Engineering to reduce leverage to 8.3x in 2026 and 8.1x in 2027, fueled by continued revenue expansion and improving profitability. Engineering's established customer relationships, a low churn rate of under 2%, and previous strategic investments in proprietary software solutions will support revenue growth of about 2.5%-3.0% over the next two years. Furthermore, we forecast that EBITDA margins will expand gradually to 13.9% by 2027, from 12.3% in 2025, thanks to reduced exceptional costs, productivity gains from prior restructuring, and normalized software development expenses. "The rating remains constrained by expected weak generation of FOCF after leases, although it is currently positive. We anticipate that Engineering's FOCF after leases will break even in 2026 due to a significant nontrade working capital outflow, mostly due to a change in value-added tax (VAT)-related regulation in parts of Italy. This occurs even as the trade working capital cycle normalizes and capital expenditure (capex) declines from the historically high levels seen during the company's software investment focus. We expect nontrade working capital to normalize in 2027, combined with EBITDA growth, which together should drive positive FOCF after leases of approximately EUR46 million, a significant rebound from the EUR4 million we project for 2026. This, along with Engineering's EUR400 million PIK notes' balance at year-end 2025 and associated cash interest savings, should result in FOCF to debt at approximately 3.4% in 2027, although this remains below our 5% threshold for an upgrade. We expect cash payments on the PIK notes could start from 2028, subject to sufficient cash flow generation. "To better reflect Engineering's positioning relative to that of peers with similar business risk profiles in the software and IT services industry, we tightened our FOCF-to-debt trigger for an upgrade to 5%." Engineering continues to benefit from a comfortable liquidity position until its next maturities in 2028, supported by sizable cash balances, an undrawn RCF, and its cash-preserving PIK facility. S&P said, "We expect Engineering's liquidity sources to cover its uses by approximately 2x in 2026, bolstered by a EUR197 million cash position and EUR185 million undrawn under its RCF. Following last year's refinancing of the EUR605 million SSN due in 2026, Engineering now maintains a more favorable debt maturity profile, with no major maturities before the EUR205 million RCF and EUR485 million SSN are due in January and May 2028, respectively. We expect Engineering will address these maturities before May 2027." The stable outlook reflects S&P's expectation that Engineering's debt to EBITDA will reduce to below 8.5x in 2026, underpinned by 3% organic revenue growth and recovering EBITDA margin from lower software development costs and exceptional expenses. S&P could lower the rating if: -- Engineering is unable to address its 2028 maturities in a timely manner; -- S&P believes the company's FOCF after leases will become persistently negative; -- EBITDA to cash interest coverage decreases toward 1x; -- The company faces liquidity pressure; or -- S&P considers the capital structure unsustainable in the long term, ahead of the 2030 maturities of its SSN and PIK notes. This could stem from slower revenue growth, sustained elevated exceptional costs, or changing working capital dynamics. S&P could raise the rating if Engineering increases the EBITDA cash interest coverage ratio above 2x and FOCF to debt above 5%, underpinned by decreasing exceptional costs and material improvement in the company's working capital cycle. An upgrade also hinges on Engineering addressing its 2028 maturity in a timely manner. EVOCA SPA: Fitch Lowers Long-Term IDR to 'B-', Outlook Negative --------------------------------------------------------------- Fitch Ratings has downgraded EVOCA S.p.A.'s Long-Term Issuer Default Rating (IDR) to 'B-' from 'B'. The Outlook is Negative. Fitch has also downgraded Evoca's senior secured rating to 'B-' from 'B', with a Recovery Rating of 'RR4'. The downgrade reflects its revised revenue assumptions for 2026 after revenue fell well below its expectations in 2025. This led to EBITDA leverage exceeding its previous downgrade sensitivity of 5.5x throughout the forecast period. EBITDA leverage reached 8.2x at end-2025 against its prior expectation of 6.8x. Fitch expects leverage has now peaked and the company will steadily deleverage to 6.9x at end-2029. The Negative Outlook reflects the risk of a slower-than-expected recovery in revenue and EBITDA, which could delay deleveraging and lead to a further downgrade. Key Rating Drivers Revenue Decline in 2025: Revenue fell 16% year on year to about EUR352 million in 2025. All three segments declined: coffee by 18%, vending by 19% and aftermarket by 6%. A challenging macro environment and high coffee prices weighed on customer demand. Structural challenges at some vending key accounts may limit near-term recovery. After a weak start to 2026, conditions have improved and stabilised since March, and Fitch expects full-year 2026 revenue to improve by about 4%, although materially below its prior forecast. High Leverage: The revenue declines reduced Fitch-calculated EBITDA to EUR69 million in 2025 from EUR90 million in 2024, driving EBITDA leverage to 8.2x at end-2025, which was materially above its prior rating case. Fitch expects the company to steadily deleverage each year supported by revenue growth and margin improvement. Failure to achieve this would likely affect its ability to refinance its EUR550 million senior secured notes due in April 2029 and lead to a further downgrade. EBITDA Margin Compression: The Fitch-calculated EBITDA margin fell to 18.5% in 2025 from 21.4% in 2024, as lower volumes reduced fixed cost absorption. Project EVO, Evoca's internal transformation and operational excellence programme, partially offset the decline, delivering run-rate savings through procurement, manufacturing optimisation and indirect cost reductions. Company-reported EBITDA margin improved in 1Q26, up 1.2pp year on year, reflecting continued EVO execution. Fitch expects revenue to stabilise with modest growth, supporting only minor margin improvement over 2026-2029 as EVO benefits fully materialise. Gradual FCF Recovery: Free cash flow (FCF) was an outflow of EUR37 million in 2025, driven by lower EBITDA, high interest costs and a Fitch-calculated working capital outflow of EUR27 million reflecting higher inventory and increased use of factoring. Fitch expects neutral FCF in 2026-2027 as working capital normalises, with FCF margin becoming above 1% from 2028 supported by continued EBITDA recovery. Adequate Business Stability: Business risk is high, as most contracts are short term with order book visibility of only four to six weeks, limiting revenue predictability. The 4Q25 revenue drop-off was material and unanticipated, with the deterioration in November and December well beyond what order book data suggested in September 2025. This is partially offset by aftermarket and service revenue, representing about 25% of total 2025 revenue, which saw the lowest decline across segments, demonstrating greater resilience and supporting cash flow generation during downturns. Solid Market Position: Evoca is a leading global manufacturer of professional coffee machines and vending machines in a fragmented market. Well-known brands, including Gaggia Milano, Saeco and Necta, lower total cost of ownership, comprehensive aftermarket services and value-for-money positioning create barriers to entry and support low customer churn. So far, the increased Chinese competition has primarily targeted the premium fresh milk segment, where Evoca has lower exposure, but competition may increase over time. Peer Analysis Evoca has leading market positions in the niche professional coffee machine market, supported by its diversified geographical footprint and good customer diversification. Like Flender International GmbH (B+/Stable) and Ammega Group B.V. (B-/Negative), Evoca's business profile is limited, with a less diversified product range than large industrial peers. However, Evoca's business profile is supported by moderate (26% of revenue, last 12 months to March 2026) exposure to spare parts and service revenue, which is comparable with Flender's and Ahlstrom Oyj (B/Stable), but lower than TK Elevator Holdco GmbH's (B/Rating Watch Positive). Like Ahlstrom and Ammega, the group has a well-diversified customer base. Evoca's financial profile has healthy (around 19%) EBITDA margins, which are higher than some Fitch-rated diversified industrial peers, such as Flender (around 12%), TK Elevator (16%) and Ahlstrom (15%). Evoca's FCF margin was close to 5% in 2023-2024 but declined materially to -10.6% in 2025 due to EBITDA reduction and working capital outflow. Fitch forecasts Evoca's FCF will average about 1% over 2026-2029, which is below Flender's 2.4%, TK Elevator's 2% but in line with Ahlstrom's 1%. Evoca's expected high EBITDA leverage of 7.8x at end-2026 is similar to Ammega's, but above that of higher-rated peers such as TK Elevator, Ahlstrom and Flender with leverage around 6.0x. Fitch’s Key Rating-Case Assumptions - Revenue to increase by 2.7% CAGR over 2026-2029 - EBITDA margin to stay broadly flat in 2026 before improving over 2027-2029 supported by optimisation initiatives and a favourable product mix shift - Capex to average about EUR17 million a year over 2026-2029 - No M&A activity until 2029 - No dividend distributions until 2029 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-', Lower), sector characteristics ('bb', Moderate), market and competitive positioning ('bb-', Moderate), diversification and asset quality ('bb', Higher), company operational characteristics ('bb', Moderate), profitability ('b-', Moderate), financial structure ('ccc-', 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 results in an adjustment of 1 notch(es). The governance assessment of 'some deficiencies' has no impact. The operating environment assessment of 'a' has no impact. The SCP is 'b-'. To derive the Long-Term IDR: Fitch made no adjustments to the SCP, resulting in an IDR of 'B-'. Recovery Analysis - The recovery analysis assumes that Evoca would be considered a going concern (GC) in bankruptcy and reorganised rather than liquidated. This is driven by its leading position in a niche market, long record of sound operating performance, sustainable relationships with customers and historically healthy EBITDA generation. - Fitch estimates the GC value available for creditor claims at about EUR375 million, based on a GC EBITDA of EUR75 million. The GC EBITDA reflects the loss of some of its largest customers, increased competition and the postponed replacement cycle of Evoca's products used by its customers. The assumption also reflects corrective measures taken in the reorganisation to offset the adverse conditions that trigger default. - Fitch assumes a 10% administrative claim. - Fitch uses a 5.0x EBITDA enterprise value (EV) multiple to calculate a post-reorganisation valuation, which is comparable with multiples applied to some diversified industrials peers. This multiple reflects Evoca's limited product diversification, despite geographic and customer diversification supporting its market leadership. - Fitch deducts about EUR14.5 million EV relating to the group's factoring usage. - Fitch estimates the total amount of senior debt for creditor claims at EUR630 million, which includes a EUR80 million super senior secured revolving credit facility (RCF) and EUR550 million senior secured notes. - These assumptions result in a recovery rate for the senior secured notes within a 'RR4' Recovery Rating, supporting a debt rating in line with the IDR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA leverage above 7.0x - EBITDA interest coverage below 2.0x - Neutral to negative FCF margins Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA leverage below 5.5x - EBITDA interest coverage above 2.5x - Positive FCF margins Liquidity and Debt Structure Evoca has sufficient liquidity with readily available cash (net of Fitch-restricted cash of EUR7 million) totalling about EUR40 million at end-December 2025. The undrawn EUR80 million revolving credit facility (RCF) matures in 2028. Expected positive FCF generation provides an additional cushion (EUR8.2 million over 2026-2028) for Evoca's liquidity. At end-December 2025, Evoca's debt mostly comprised the EUR550 million senior secured notes due in 2029. Outside the restricted group, EUR210 million of payment-in-kind notes mature six months after the senior secured notes. Under Fitch's Corporate Rating Criteria, the agency considers this instrument type equity-like. Issuer Profile Evoca is a global leader in professional coffee machines and vending machines for out-of-home consumption. 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 Evoca. 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 ----------- ------ -------- ----- EVOCA S.p.A. LT IDR B- Downgrade B senior secured LT B- Downgrade RR4 B IBLA SRL: DBRS Confirms CCCsf Rating on Class B Bonds ----------------------------------------------------- DBRS Ratings GmbH (Morningstar DBRS) took the following credit rating actions on the bonds issued by Ibla S.r.l. (the Issuer): -- Class A upgraded to A (high) (sf) from A (low) (sf) -- Class B confirmed at CCC (sf) The trend on the Class A notes remains Stable, while the trend on the Class B notes remains Negative. The transaction represents the issuance of the Class A, Class B, and Class J notes (collectively, the Notes). Morningstar DBRS does not rate the Class J notes. At issuance, the Notes were backed by a EUR 348.6 million portfolio by gross book value consisting of a mixed pool of Italian nonperforming residential, commercial, and unsecured loans originated by Banca Agricola Popolare di Ragusa S.C.p.A. Phoenix Asset Management S.p.A. is the current special servicer (appointed in June 2025). doNext S.p.A. acts as the master servicer, while Banca Finint S.p.A. (formerly Securitisation Services S.p.A.) operates as the backup servicer. CREDIT RATING RATIONALE The credit rating actions follow Morningstar DBRS' review of the transaction and are based on the following analytical considerations: -- Transaction performance: An assessment of portfolio recoveries as of March 2026 focusing on (1) a comparison between actual collections and the Special Servicer's initial business plan forecast, (2) the collection performance observed over recent months, and (3) a comparison between the current performance and Morningstar DBRS' expectations. -- Updated business plan: The Special Servicer's updated business plan as of December 2025, received in February 2026, and the comparison with the initial collection expectations. -- Portfolio characteristics: Loan pool composition as of March 2026 and the evolution of its core features since issuance. -- Transaction liquidating structure: A fully sequential amortisation of the Notes (i.e., the Class B notes will begin to amortise following the full repayment of the Class A notes, and the Class J notes will amortise following the repayment of the Class B notes). Additionally, interest payments on the Class B notes become subordinated to principal payments on the Class A notes if the cumulative collection ratio (CCR) or present value cumulative profitability ratio (PV ratio) is lower than 85%. The CCR trigger has been breached since the April 2021 interest payment date (IPD). The actual figures for the CCR and PV ratio were 66.0% and 124.5%, respectively, as of the April 2026 IPD, according to the Special Servicer. -- Liquidity support: The transaction benefits from an amortising cash reserve providing liquidity to the structure and covering potential interest shortfalls on the Class A notes and senior fees. The cash reserve target amount is equal to 7.5% of the Class A notes' principal outstanding balance, and the recovery expenses' cash reserve target amounts to EUR 400,000, both fully funded. TRANSACTION AND PERFORMANCE According to the latest investor report from April 2026, the outstanding principal amounts of the Notes were EUR 8.4 million for the Class A notes, EUR 9.0 million for the Class B notes, and EUR 3.5 million for the Class J notes. As of April 2026, the balance of the Class A notes had amortised by 90.2% since issuance, and the current aggregated transaction balance was EUR 20.9 million. As of March 2026, the transaction was performing below the Special Servicer's business plan expectations. Cumulative gross collections amounted to EUR 110.6 million, compared with EUR 166.3 million estimated under the Special Servicer's initial business plan for the same period, representing an underperformance of EUR 55.6 million (-33.5%). On a net basis, after deducting legal and procedural costs and servicing fees, cumulative collections totalled EUR 92.0 million, compared with EUR 140.8 million expected under the initial business plan. At issuance, Morningstar DBRS estimated cumulative gross collections of EUR 62.5 million for the same period at the BBB (low) (sf) stress scenario. Therefore, as of March 2026, actual cumulative gross collections had exceeded this stressed assumption. Pursuant to the requirements set out in the receivable servicing agreement, in February 2026, the Special Servicer delivered an updated portfolio business plan. The updated portfolio business plan, combined with the actual cumulative gross collections of EUR 107.8 million as of December 2025, resulted in a total of EUR 138.7 million, which is 16.8% lower than the EUR 166.8 million estimated in the initial business plan. Excluding actual collections as of March 2026, the Special Servicer's expected future collections from April 2026 amount to EUR 30.1 million. The updated Morningstar DBRS A (high) (sf) credit rating stress scenario assumes a 29.5% haircut to the Special Servicer's updated business plan, considering future expected collections. Considering the substantial redemption of the Class A notes and the increased subordination, Morningstar DBRS upgraded the credit rating on the Class A Notes to A (high) (sf) from A (low) (sf). Morningstar DBRS considers unlikely that the Class B notes' obligations will be fully met at maturity. Interest on the Class B notes continues to accumulate until the Class A notes are fully redeemed. As of April 2026, EUR 5.0 million of unpaid interest had accrued on the Class B notes. In addition, the reduction of the Special Servicer's total expected collections leaves a lower cushion for the full payment of the Class B notes' principal and interest. The transaction's final maturity date is April 30, 2037. Morningstar DBRS' credit ratings on the applicable classes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. Where applicable, a description of these financial obligations can be found in the transactions' respective press releases at issuance. Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued. Notes: All figures are in euros unless otherwise noted. POPOLARE BARI 2017: DBRS Confirms Csf Rating on Class B Debt ------------------------------------------------------------ DBRS Ratings GmbH (Morningstar DBRS) confirmed its credit ratings on the bonds issued by Popolare Bari NPLS 2017 S.r.l. (the Issuer) as follows: -- Class A confirmed at CC (sf) -- Class B confirmed at C (sf) The transaction represents the issuance of Class A, Class B, and Class J notes (collectively, the Notes). Morningstar DBRS does not rate the Class J notes. At issuance, the Notes were backed by an Italian nonperforming loan portfolio originated by Banca Popolare di Bari S.c.p.A. and Cassa di Risparmio di Orvieto S.p.A. The total gross book value (GBV) of the portfolio as of March 2017 (the cut-off date) was EUR 319.8 million. The pool of receivables comprised secured and unsecured loans, representing 56.1% and 43.9% of the GBV, respectively, with exposure mostly to corporate borrowers and small and medium-size enterprises. The properties in the collateral mainly include residential and industrial properties, accounting for 41.2% and 15.9% of the total property value, respectively. Prelios Credit Servicing S.p.A. (Prelios or the Servicer) services the receivables while Banca Finint S.p.A. (formerly Securitisation Services S.p.A.) operates as the backup servicer. CREDIT RATING RATIONALE The credit rating confirmations follow Morningstar DBRS' review of the transaction and are based on the following analytical considerations: -- Transaction performance: An assessment of portfolio recoveries as of March 2026 focusing on (1) a comparison between actual collections and the Servicer's initial business plan forecast, (2) the collection performance observed over recent months, and (3) a comparison between the current performance and Morningstar DBRS' expectations. -- Updated business plan: The Servicer's updated business plan as of December 2025, received in April 2026, and the comparison with the initial collection expectations. -- Transaction liquidating structure: The order of priority, which entails a fully sequential amortisation of the Notes (i.e., the Class B notes will begin to amortise following the full repayment of the Class A notes, and the Class J notes will amortise following the repayment of the Class B notes). Additionally, interest payments on the Class B notes become subordinated to principal payments on the Class A notes if the net present value cumulative profitability ratio (NPV ratio) is lower than 90%. The interest subordination event occurred in October 2021 and had been cured on the October 2022 interest payment date (IPD). The trigger has been breached again since the October 2023 IPD. The actual figures for the cumulative net collection ratio and NPV ratio were at 46.3% and 82.9% as of the April 2026 IPD, respectively, according to the Servicer. -- Liquidity support: The transaction benefits from an amortising cash reserve providing liquidity to the structure and covering potential interest shortfall on the Class A notes and senior fees. The cash reserve target amount is equal to 4.0% of the Class A notes' principal outstanding balance, and the recovery expenses cash reserve target amounts to EUR 100,000. The cash reserve as of the April 2026 IPD was fully funded and equal to EUR 2.1 million. The recovery expenses cash reserve was fully funded. TRANSACTION AND PERFORMANCE According to the latest investor report from April 2026, the outstanding principal amounts on the Class A, Class B, and Class J notes were EUR 51.7 million, EUR 10.1 million, and EUR 13.5 million, respectively. As of April 2026, the balance on the Class A notes had amortised by 36.1% since issuance, and the current aggregated transaction balance was EUR 75.3 million. As of March 2026, the transaction was performing below the Servicer's business plan expectations. The actual cumulative gross collections equalled EUR 57.1 million, whereas the Servicer's initial business plan estimated cumulative gross collections of EUR 120.4 million for the same period. Therefore, as of March 2026, the transaction was underperforming by EUR 63.3 million (52.6%) compared with the initial business plan expectations. At issuance, Morningstar DBRS estimated cumulative gross collections for the same period of EUR 97.6 million at the BBB (low) (sf) stressed scenario and EUR 108.9 million at the B (low) (sf) stressed scenario. Therefore, as of March 2026, the transaction was performing below Morningstar DBRS' initial BBB (low) (sf) and B (low) (sf) scenarios. Pursuant to the requirements set out in the receivable servicing agreement, in April 2026, the Servicer delivered an updated portfolio business plan. The updated portfolio business plan, combined with the actual cumulative gross collections of EUR 56.1 million as of December 2025, resulted in a total of EUR 71.1 million. This is 40.9% lower than the total gross disposition proceeds of EUR 120.4 million estimated in the initial business plan. Excluding actual collections as of March 2026, the Servicer's expected future collections from April 2026 onwards amount to EUR 14.9 million, which is substantially less than the current outstanding balance of the Class A notes. In Morningstar DBRS' CCC (sf) (or below) scenarios, the Servicer's updated forecast was adjusted only in terms of actual collections to the date and timing of future expected collections. Considering the material gap between the future expected collections and the current balance on the Class A notes, the full repayment of the Class A principal is very unlikely, but considering the transaction structure, a payment default on the Notes would likely occur only in a few years. Given the characteristics of the Class B notes, as defined in the transaction documents, Morningstar DBRS notes that a default would most likely be recognised only at the maturity or early termination of the transaction. The transaction's final maturity date is 30 October 2037. Morningstar DBRS' credit ratings on the applicable classes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. Where applicable, a description of these financial obligations can be found in the transactions' respective press releases at issuance. Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued. Notes: All figures are in euros unless otherwise noted. =================== L U X E M B O U R G =================== ARENA LUXEMBOURG: Fitch Assigns 'BB' LongTerm IDR, Outlook Stable ----------------------------------------------------------------- Fitch Ratings has assigned Arena Luxembourg Investments S.a.r.l (Empark) a Long-Term Issuer Default Rating (IDR) of 'BB' with a Stable Outlook. It has also assigned its existing senior secured notes a 'BB+' rating and its planned EUR540 million senior secured notes an expected rating of 'BB+(EXP). The Recovery Ratings are 'RR2'. The assignment of the final rating is subject to the receipt of final terms conforming to its expectations. The assigned ratings reflect infrastructure like business characteristics of Empark, with long-term concessions as well as regulatory and contractual protections providing solid earnings visibility. It also reflects Empark's track record of growth through greenfield, brownfield and acquisitions of parking facilities. On the other hand, Empark's size is limited overall with full focus on Iberia and a levered capital structure with EBITDA leverage of 7.1x at 2025, which does not leave headroom at 'BB'. The Stable Outlook reflects its assumption of shareholder returns and discretionary growth. Key Rating Drivers Strong Market Position: Empark is the largest on-street car parking operator and second largest off-street car park operator in Iberia with over 300,000 parking spaces. It operates through a combination of on- and off-street concessions, services contracts and freehold and private contract car parks. Its unique market position is further supported by fairly low but growing car ownership and limited electric charging infrastructure ibeyond car parks in Iberia. Long-term Assets Provide Visibility: Empark's business strength is underpinned by long-term concessions, primarily for off-street car parks (about 93% of EBITDA), with an average remaining concession life of 29 years. These concessions have high contractual protection through tariff indexation structures, locational advantages providing barriers to entry for competitors and some protection against changes in circumstances that could adversely affect earnings capacity. A small portion of the off-street car parks is freehold. On-street car parks represent about 7% of EBITDA, with shorter concessions of four to seven years and possible extensions. These include contracts with a fixed remuneration and also a smaller proportion of demand risk contracts. High Profitability and Cash Generation: Empark has an efficient business structure enabling it to generate close to 50% in EBITDA margins, with employee salaries and external services such as rents on concessions and maintenance being the key costs. Maintenance capex requirements are intrinsically low, at less than 5% of revenue, despite the asset-intensive nature of the business, supporting strong cash flow generation capability. Upside from Product Innovation: Empark has been a leader in use of digital technologies to take a retail-orientation approach, increase operational efficiencies, gain customers and roll out B2B products, such as contracts with logistics operators to generate add-on revenue. It also focuses on vertically integrating these innovations such as through ownership of payment channels for EV charging. Overall revenue from such initiatives is still low at less than 5% of sales, but the direction of urban mobility and decarbonisation imply meaningful upside for Empark. Focus on Growth: Empark continues to focus on growing its parking spaces portfolio through greenfield, brownfield and acquisitions. The company invested a total expansionary spend of about EUR315 million during 2022-2025. This is significantly more than the run-off rate and contributed to the material EBITDA growth reported between 2022 (EUR77 million) and 2025 (EUR114 million). Shareholder Returns to Continue: Empark has also been returning cash to its shareholders (Macquarie Asset Management), totaling EUR114 million over the last four years, through repayments on a shareholder loan, which Fitch has classified as equity based on its terms. Fitch expects the payments to shareholders to continue and have assumed EUR40 million annual outflow in its forecasts. Leveraged Capital Structure: Empark has a leveraged capital structure with EBITDA gross leverage of 7.1x at end-2025. Fitch forecasts moderate deleveraging from 2027; however, the pace of deleveraging will mainly depend on the growth investments implemented by the company. Its rating case expects free cash flow (FCF) after acquisitions to remain moderately negative in 2026-2028 and deleveraging to be driven by continued EBITDA growth to about EUR165 million in 2028. Senior Secured Debt: The company's debt consists of senior secured notes totaling EUR775 million (due in 2028 and 2030) and much smaller amount of mortgage debt and leases. The senior secured notes ratings are one notch above the IDR based on Fitch's Recovery Ratings criteria for 'BB' issuer ratings. Fitch assigns the same expected rating of 'BB+(EXP)' also to the upcoming senior secured bond, whose issuance would reduce refinancing risk by extending Empark's maturity profile, although at market conditions driven materially higher coupon than 1.875% for the existing EUR475 million notes due 2028. Peer Analysis Fitch compares Empark with concession-based businesses within the utilities and infrastructure sectors. Empark is much smaller in size and geographical diversification than Abertis Infraestructuras, S.A. (BBB/Stable) while its leverage is about 1.5x higher. Consequently, Empark's 'BB' IDR is three notches below that of Abertis. ASTM S.p.A. (BBB-/Stable), with operations in Italy and Brazil, is also much larger than Empark but with comparable geographical diversification and its leverage is about 1x lower, leading to a two-notch higher rating than Empark. Similarly, Empark has higher leverage than Spanish and French water utilities, such as FCC Aqualia S.A. (BBB-/Stable) and Holding d'Infrastructures des Métiers de l'Environnement's (BB+/ Negative), which drives the rating difference. Difference in debt capacity is fairly limited and in favour of the water companies. Fitch's Key Rating-Case Assumptions - Limited haircut to management revenue forecasts, resulting in an average 8.5% revenue growth a year during 2026 - 2028 - EBITDA margin to improve to 53.3% in 2026 and further to about 55% in 2028, driven by operating leverage benefits from growth, acquisitions and product mix effect - Average growth capex of about EUR100 million a year - Shareholder loan classified as equity and historical repayments on shareholder loan assumed as dividends - Returns to shareholders (classified as dividends) to be funded by debt and at EUR40 million a year 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+', Moderate), market and competitive positioning ('bbb', Moderate), diversification and asset quality ('bb-', Higher), company operational characteristics ('bbb+', Moderate), profitability ('aa', Lower), financial structure ('b-', Moderate), and financial flexibility ('bb+', Moderate). The quantitative financial subfactors are based on custom CRT financial period parameters: 20% weight for the forecast year 2026, 40% for the forecast year 2027 and 40% for the forecast year 2028. The governance assessment of 'good' has no impact. The operating environment assessment of 'a+' has no impact. The SCP is 'bb'. To derive the Long-Term IDR: Fitch made no adjustments to the SCP, resulting in an IDR of 'BB'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA gross leverage consistently above 7.0x - Increased focus on shareholder returns leading to higher leverage or reduced funding flexibility for profitable growth opportunities - Deteriorating operating performance, loss of major concessions or a weaker regulatory or contractual framework - EBITDA interest cover consistently below 3.0x Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA gross leverage sustainably below 6.0x - EBITDA interest cover over 4.0x Liquidity and Debt Structure Empark had EUR29 million of readily available cash (excluding restricted cash) at end 2025 (about EUR31 million at 1Q26) and EUR93 million undrawn and available under a EUR125 million revolving credit facility due 2029. Fitch forecasts negative FCF of EUR50 million in 2026, after considering planned growth but excluding dividends (or returns on shareholder loan). Fitch have assumed EUR40 million dividends a year, which leads to FCF absorption (after growth capex) of EUR90 million in 2026. Empark plans to issue EUR540 million of senior secured notes in June 2026 to refinance EUR475 million of senior secured notes due 2028, which should provide about EUR60 million of cash available for the company. Issuer Profile Empark is a leading European parking services company, headquartered in Spain, operating in 150 cities mainly in Spain and Portugal. Date of Relevant Committee June 4, 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 ----------- ------ -------- Arena Luxembourg Investments S.a r.l. LT IDR BB New Rating Arena Luxembourg Finance S.a.r.l. senior secured LT BB+ New Rating RR2 senior secured LT BB+(EXP) Expected Rating RR2 =========== R U S S I A =========== [] Fitch Alters 7 Uzbek State Banks' Outlooks to Positive --------------------------------------------------------- Fitch Ratings has revised seven Uzbekistan-based state-owned banks' Outlooks to Positive from Stable, while affirming their Long-Term (LT) Foreign- and Local-Currency Issuer Default Ratings (IDRs) and Government Support Ratings (GSRs). Six of the banks -- JSC National Bank for Foreign Economic Activity of the Republic of Uzbekistan (NBU), Joint-Stock Commercial Bank Agrobank (Agro), Joint Stock Commercial Xalq Bank of the Republic of Uzbekistan (Xalq), Joint-Stock Commercial Bank Business Development Bank (BDB), Joint-Stock Commercial Aloqabank, (Aloqa), and Microcreditbank (MCB) -- are affirmed at LT IDR 'BB' and GSR 'bb'. JSCB Turonbank's (Turon) LT IDRs and GSR are affirmed at 'BB-' and 'bb-'. The banks' Viability Ratings are unaffected by this rating action. The revision of the banks' Outlooks is driven by the revision of the Outlook on the sovereign rating of the Republic of Uzbekistan on June 3, 2026 (see " Fitch Revises Uzbekistan's Outlook to Positive; Affirms at 'BB'",) and reflects Fitch's view of an improved ability of the Uzbek authorities to provide support to domestic state-owned banks. Key Rating Drivers The 'BB' LT IDRs of NBU, Agro, Xalq, BDB, Aloqa, and MCB are equalised with the sovereign ratings of Uzbekistan, reflecting Fitch's view of a moderate probability of government support, as captured by their 'bb' GSRs. The Positive Outlooks on the banks' IDRs mirror that on the sovereign. Its assessment of support considers the banks' majority state ownership, solid record of state capital and funding support, important policy roles as key lenders to strategic industries (NBU, Agro) and prioritised social programmes (Xalq, BDB, Aloqa, and MCB), high systemic importance (NBU), and the low cost of support relative to the sovereign's international reserves. Turon's one-notch difference with the sovereign rating reflects its limited systemic and strategic importance for the government, given the bank's small size, absence of a clearly defined policy role, and lower volumes of equity support compared with policy banks. Fitch continues to factor in government support for Aloqa and Turon despite the government's plans to sell their controlling stakes to foreign strategic investors by end-2030. Fitch does not expect these banks to be privatised until larger banks are successfully sold, which Fitch does not expect to happen until 2027 at the earliest (see "Uzbekistan Bank Privatization Supported by More Focused Program" dated 11 November 2025). A successful sale of these banks will also require a large-scale pre-sale business model transformation, which Fitch forecasts will take at least several years. Aloqa's adoption of a new policy role in 2025 makes its sale prospects even less probable, and Fitch believes the bank's privatisation plans could ultimately be cancelled. In Fitch's view, state support should be available to Aloqa and Turon as long as they remain majority state-owned. The Short-Term (ST) IDRs have been affirmed at 'B', which is the only possible option for LT IDRs in the 'BB' rating category. Fitch rates senior unsecured notes of NBU, Agro, and Aloqa in line with their LT IDRs, as the default risk of these obligations is the same as that of the banks, according to Fitch's rating definitions. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The GSRs and LT IDRs of NBU, Agro, Xalq, BDB, Aloqa, MCB, and Turon would be downgraded if Uzbekistan's sovereign ratings are downgraded. Their ratings could also be downgraded if Fitch takes the view that the Uzbek authorities' ability or propensity to support the banks has weakened, for example due to a weakening of their policy roles, significant delays in capital support or insufficient support to address their asset-quality risks. Fitch could also downgrade the ratings of Aloqa and Turon if the government decides to accelerate their privatisation efforts, resulting in weaker links with the sovereign. The banks' ST IDRs are sensitive to a multi-notch downgrade of their respective LT IDRs. The senior unsecured LT debt ratings of NBU, Agro, and Aloqa would be downgraded, following a similar action on their respective LT IDRs. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The GSRs and LT IDRs of NBU, Agro, Xalq, BDB, Aloqa, MCB, and Turon would be upgraded following a similar action on the sovereign ratings of Uzbekistan, provided the sovereign's propensity to support the banks remains strong. For MCB, an upgrade would also require continued sufficient provisioning of state capital support to decisively clean up the bank's remaining legacy asset-quality risks. The senior unsecured LT debt ratings of NBU, Agro, and Aloqa would be upgraded if their respective LT IDRs are upgraded. Public Ratings with Credit Linkage to other ratings The GSRs and LT IDRs of NBU, Agro, Xalq, BDB, Aloqa, MCB, and Turon are directly linked to Uzbekistan's sovereign ratings. ESG Considerations NBU, Agro, Xalq, BDB, Aloqa, MCB and Turon have ESG Relevance Scores of '4' for Governance Structure as Uzbekistan's authorities are highly involved in the banks at board level and in their business and strategy development, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. Agro has an ESG Relevance Score of '3' for Exposure to Environmental Impacts and Exposure to Social Impacts, representing a deviation from the sector guidance of '2' for comparable banks, given its focus on subsidised lending to the agricultural sector. This has only a minimal credit impact on the entity and minimal relevance for the ratings. Xalq and MCB have ESG Relevance Scores of '3' for Human Rights, Community Relations, Access & Affordability (a deviation from the sector guidance of '2' for comparable banks), given their focus on social lending to lower-income citizens to decrease poverty and promote entrepreneurship. This has only a minimal credit impact on the entities and minimal relevance for the ratings. 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 ----------- ------ ----- Joint-Stock Commercial Aloqabank LT IDR BB Affirmed BB ST IDR B Affirmed B LC LT IDR BB Affirmed BB LC ST IDR B Affirmed B Gov't Support bb Affirmed bb senior unsecured LT BB Affirmed BB Joint-Stock Commercial Bank Business Development Bank LT IDR BB Affirmed BB ST IDR B Affirmed B LC LT IDR BB Affirmed BB LC ST IDR B Affirmed B Gov't Support bb Affirmed bb Microcreditbank LT IDR BB Affirmed BB ST IDR B Affirmed B LC LT IDR BB Affirmed BB LC ST IDR B Affirmed B Gov't Support bb Affirmed bb JSC National Bank for Foreign Economic Activity of the Republic of Uzbekistan LT IDR BB Affirmed BB ST IDR B Affirmed B LC LT IDR BB Affirmed BB LC ST IDR B Affirmed B Gov't Support bb Affirmed bb senior unsecured LT BB Affirmed BB JSCB Turonbank LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Gov't Support bb- Affirmed bb- Joint Stock Commercial Xalq Bank of the Republic of Uzbekistan LT IDR BB Affirmed BB ST IDR B Affirmed B LC LT IDR BB Affirmed BB LC ST IDR B Affirmed B Gov't Support bb Affirmed bb Joint-Stock Commercial Bank Agrobank LT IDR BB Affirmed BB ST IDR B Affirmed B LC LT IDR BB Affirmed BB LC ST IDR B Affirmed B Gov't Support bb Affirmed bb senior unsecured LT BB Affirmed BB ========= S P A I N ========= MEIF 5 ARENA: S&P Affirms 'BB' LT ICR on Proposed Refinancing ------------------------------------------------------------- S&P Global Ratings affirmed its 'BB' long-term issuer credit rating on MEIF 5 Arena Holdings S.A.. At the same time, S&P assigned its 'BB' issue rating and '4' recovery rating to the proposed new notes that will be issued by Arena Luxembourg Finance S.a.r.l., at the same level of existing EUR300 million notes due in 2030. S&P said, "The stable outlook reflects our view that MEIF 5 will continue delivering on its strategy to expand its footprint in the Iberian Peninsula, while sustaining FFO to debt close to 10% in 2028. We expect shareholder remuneration will remain flexible and dependent on business conditions, amid a very ambitious growth plan over the next three years. "The 'BB' issue rating on the proposed EUR540 million senior secured notes indicates our favorable view of the early refinancing of the EUR475 million notes due in 2028. With the refinancing, there are no material debt maturities until 2030. "We expect FFO to debt will be close to 10% in 2028, which is commensurate with the rating, even if the expansionary capex will weigh on cash flow in 2026 and 2027. We currently expect EUR270 million of growth capex from 2026-2028, compared with our previous expectation of EUR130 million. As a mitigant to the high spending, we expect the issuer will maintain a disciplined and selective approach to pursue value-accretive investment opportunities. In fact, most of the capex is discretionary and subject to postponement if required. The shareholder remains supportive and no distributions are expected to be paid in 2026. We also understand future distributions are flexible, which supports the affirmation. "We expect top-line growth will be supported by acquisitions, commercial campaigns, and digitalization. We estimate revenue will rise 5.5% in 2026 and 12% per year in each of 2027 and 2028. The important increases in 2027 and 2028 are the result of greenfield investments coming operational (including the refurbishment of Colon car park in Madrid) as well as growth as the company spends heavily. The company has a positive track record of expanding its footprint throughout the Iberian Peninsula. In 2024, for example, it undertook EUR124 million of capex, and EBITDA grew EUR16 million in 2025. Still, given Empark's ambitious growth plan, there are execution risks. Less EBITDA growth than what we assume in our base-case scenario over 2026-2028 could lead to increased pressure on credit metrics, given very limited headroom. We see top-line growth will be reinforced by commercial campaigns, strategic partnerships, electric vehicle chargers offerings, and increasing digital users. These all contribute to a strong brand awareness and strong value proposition to users, with, for example, digital users coming more often to the parking establishments and staying longer. "The stable outlook reflects our view that MEIF 5 will continue delivering on its strategy to gradually expand its footprint in the Iberian Peninsula, while sustaining FFO to debt close to 10% in 2028. We expect shareholder remuneration via shareholder loan interest and principal repayments will remain flexible and dependent on business conditions amid a very ambitious growth plan over the next three years." S&P could lower its rating if company's FFO to debt declines below 9% sustainably over the forecast horizon. This could occur because of one or a combination of the following: -- MEIF 5 fails to achieve EBITDA growth from the acquisitions we include in our base-case scenario; -- Financial policy becomes more aggressive, possibly from further debt-funded acquisitions or shareholder returns; or -- The company performs below our expectations, if volumes increase less than we anticipate or costs increase more than S&P assumes. S&P could raise its rating if the company's FFO to debt stays above 12%. This could occur if: -- MEIF 5 surpass the expected EBITDA growth from the acquisitions we include in S&P's base-case scenario; -- The company performs above S&P's expectations in terms of revenue growth or cost efficiencies; and -- It does not undertake additional debt-funded shareholder returns or acquisitions before improving its credit metrics. PIQUE MIDCO 2: Moody's Affirms B2 CFR & Alters Outlook to Negative ------------------------------------------------------------------ Moody's Ratings has affirmed Pique Midco 2 S.a r.l.'s (Palex or the company) B2 corporate family rating and B2-PD probability of default rating. At the same time, Moody's also affirmed the B2 ratings of PALEX HEALTHCARE GROUP, S.L.'s senior secured term loan Bs, and senior secured revolving credit facility. The outlook on both entities has been changed to negative from stable. RATINGS RATIONALE The outlook change to negative reflects the risk that Palex may not improve its credit metrics to levels commensurate with the B2 rating over the next 12–18 months. This reflects execution risks around integration, continued reliance on debt-funded acquisitions, and downside risks to free cash flow generation, particularly in light of the weaker-than-expected operating performance in early 2026 relative to budget. In 2025, adjusted credit metrics were at the lower end of, or outside, the B2 guidance. Adjusted gross debt to EBITDA ratio was at 6.0x and adjusted EBITDA to interest expense ratio of 2.4x. These ratios are presented on a pro forma basis, incorporating the acquisitions completed in 2025 and assuming a full 12 months of EBITDA contribution from these acquisitions. These ratios are weak relative to Moody's initial expectations at the time of the rating assignment and highlight the limited financial flexibility within the current rating category. The continued acquisitions make the evaluation on a consolidated and organic basis less transparent due to the integration of new entities, restructuring or exceptional costs, and potential differences between pro-forma and audited accounts. Looking ahead to 2026, Moody's expects some improvement in adjusted credit metrics, driven by the full-year contribution of prior acquisitions and organic growth. Moody's understands that the group has undertaken significant investments in its commercial organization, which are expected to support stronger organic growth and market share gains from 2026. In 2026, Moody's forecasts adjusted gross debt to EBITDA of 5.9x, which remains elevated for the B2 rating. However, Moody's also considers leverage on a net debt basis, which would be lower at around 5.3x and provides somewhat greater comfort. At the same time, adjusted EBITDA to interest expense ratio of 2.7x and adjusted free cash flow to debt ratio of 3.5% would be broadly commensurate with B2 rating guidance. Moody's notes downside risks to these forecasts, particularly with respect to free cash flow generation, in light of the weaker-than-expected operating performance in Q1 relative to budget. Finally, the company's strategy to pursue further debt-funded acquisitions at current acquisition valuations could weaken or delay deleveraging. Over the past three years Palex increased scale and geographic diversification, reducing reliance on historically Iberian markets. It has materially scaled its platform through acquisitions, requiring time to fully integrate operations and realize synergies. Acquisition funding has also been mixed, with larger transactions financed through a combination of debt and equity, while smaller add-ons have been predominantly debt-funded. In Moody's views, the management's successful track record of executing and integrating over 25 mergers and acquisitions transactions in recent years provides a degree of reassurance. More generally, Palex's B2 ratings remain supported by the company's leading position in the fragmented market for the distribution of medical products and devices in Europe, particularly in Spain (Government of Spain, A3 stable), Benelux and France (Government of France, Aa3 negative); its well-established relationships with medical product manufacturers and end users; positive industry trends supporting demand and market growth; and its good profitability. Conversely, the ratings are constrained by the leveraged financial profile, with 2025 pro forma adjusted gross debt to EBITDA ratio of 6.0x and adjusted EBITDA to interest expense ratio of 2.4x. Moody's also considers leverage on a net debt basis, which would be lower at around 5.3x and provides somewhat greater comfort; its rapid expansion through multiple acquisitions, which adds a degree of analytical complexity because of differences between pro-forma and audited accounts; and intense competitive dynamics, where sustained product innovation remains key to maintaining market positioning. LIQUIDITY Palex's liquidity is adequate. As of March 31, 2026, the company had cash of EUR116 million in addition to the undrawn EUR145 million senior secured revolving credit facility. The company has long-dated maturities with all debt maturing in 2030 and 2031. STRUCTURAL CONSIDERATIONS The senior secured term loan Bs and EUR145 million senior secured revolving credit facility are rated B2, in line with the B2 corporate family rating, reflecting their pari passu ranking and the absence of any significant liabilities ranking ahead or behind them. RATING OUTLOOK The negative outlook reflects the risk that Palex may not improve its adjusted credit metrics to levels commensurate with the B2 rating over the next 12–18 months, given execution risks around integration, continued reliance on debt-funded acquisitions, and downside risks to free cash flow generation. The outlook could be stabilised if the company demonstrates sustained improvement in operating performance and free cash flow, leading to deleveraging towards B2 guidance. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Positive pressure could build up if Palex continues to uphold its leading market position, grow its size and expand its geographical footprint; Moody's-adjusted gross debt to EBITDA ratio remains below 4.5x; Moody's-adjusted EBITA to interest expense ratio exceeds 2.5x; Moody's-adjusted free cash flow to debt ratio exceeds 10% – all on a sustained basis. Downward rating pressure can materialise if Palex does not successfully execute its business plan, improve free cash flow generation and credit metrics such that Moody's-adjusted free cash flow to debt ratio fails to improve to around 5%; Moody's-adjusted gross debt to EBITDA ratio exceeds 5.5x; Moody's-adjusted EBITA to interest expense ratio remains below 1.5x – all on a sustained basis. A negative pressure on the ratings could also manifest if Palex experiences a decline in its market share, leading to lower operating margins; liquidity deteriorates; or in the event of large debt-financed acquisitions or distributions to shareholders. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Distribution and Supply Chain Services published in November 2025. The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement. COMPANY PROFILE Headquartered in Barcelona, Palex is a leading distributor of medical equipment solutions. It provides marketing, sales and logistics of high value-added medical equipment to a fragmented customer base of public and private hospitals and laboratories across Europe. In 2023, Apax Partners and Fremman Capital agreed to jointly acquire co-controlling stakes in Palex. Equity stakes are split equally between Apax Partners and Fremman Capital (45% each), with management retaining a 10% stake. =========== T U R K E Y =========== ANKARA METROPOLITAN: Fitch Affirms BB- LongTerm IDRs, Outlook Stabl ------------------------------------------------------------------- Fitch Ratings has affirmed Ankara Metropolitan Municipality's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BB-' with Stable Outlooks. The affirmation reflects Fitch's unchanged view that Ankara will maintain a robust operating balance despite high inflation, although capex-driven debt will substantially increase under Fitch's rating case. Its debt metrics will remain commensurate with its peers with a 'bbb' Standalone Credit Profile (SCP) over the medium term. Ankara's IDRs are capped by the Turkish sovereign's 'BB-' IDRs and the Stable Outlooks reflect that on the sovereign. KEY RATING DRIVERS Standalone Credit Profile Ankara's 'bbb' SCP results from a 'Weaker' risk profile and a 'aaa' financial profile. The SCP also factors in comparison with its national and international peers in the same rating category. Risk Profile: 'Weaker' The assessment reflects three 'Midrange' key risk factors (KRF) and three 'Weaker' factors. It also reflects a high risk that Ankara's ability to cover debt service with its operating balance may weaken unexpectedly over 2026-2030, due to lower revenue, higher expenditure, or an unexpected rise in liabilities or debt-service requirements. Revenue Robustness: 'Midrange' Ankara's local economy is well-diversified and broad, resulting in stable tax revenue and robust growth prospects that are at least in line with national GDP growth. In 2021-2025, Ankara recorded tax revenue nominal CAGR of 67%, slightly above the national 65%. In 2025, tax revenue totalled TRY68.5 billion and comprised about 77% of operating revenue. Fitch expects growth in tax revenue to slightly exceed anticipated national nominal GDP CAGR of 21% in 2026-2030, and to reach TRY198.7 billion by 2030. This is supported by GDP per capita that is 40% above the national average and strong interim tax revenue growth in 2026. Revenue Adjustability: 'Weaker' The central government sets most tax rates, limiting Turkish metropolitan municipalities' ability to generate additional tax revenue. At end-2025, nationally set and collected taxes were 72% of total revenue; local taxes over which Ankara had autonomy, comprised only 0.1% and are constrained by ceilings set by the central government. This inflexibility is partly compensated by fees and charges levied on public services over which Ankara has some control (about 10% of 2025 revenue) and, to a lesser extent, by scope for asset sales (about 5%). Expenditure Sustainability: 'Weaker' Fitch expects expenditure to outpace revenue in 2026-2030, with the operating margin falling to 20% by 2030 from 23% in 2025. Persistently high inflation will erode spending control, despite Ankara's moderately cyclical-to-countercyclical responsibilities. Opex CAGR was 87% in 2021-2025, exceeding operating revenue growth of 69%. This pressure was partly offset by slower capex growth, which supported an improvement in the pre-financing balance to a surplus of 4% of total revenue in 2025, from a deficit of 14.5% in 2024. Fitch expects Ankara to continue providing large subsidies to its transportation company, also due to higher imported energy prices amid regional geopolitical tensions, and social support to households. Fitch expects a sustained decline in inflation from 2027 which, alongside the government's cost-cutting measures, should help contain expenditure growth. Expenditure Adjustability: 'Midrange' Ankara has a lower share of inflexible costs than its international peers, at less than 70% of totex, which is in line with its national peers'. This spending flexibility is offset by its moderate ability to reduce capex due to only adequate existing services and low investments. Fitch expects Ankara to post deficits before financing, averaging 8% of revenue, driven by high investment needs and demographic growth. Fitch expects annual investments to average TRY52.4 billion, equivalent to about 25% of totex, to be directed towards metro extension, urban transformation projects, and basic infrastructure, including road construction and urban landscaping. Liabilities and Liquidity Robustness: 'Midrange' Ankara is exposed to moderate FX risk due to lira volatility, with nearly 19% of its total debt in euros and unhedged (2024: 0%). Fitch expects this exposure to increase further in the near term as disbursements continue under its Dikimevi-Mamak metro line project. This risk is offset by its sound operating balance, which Fitch expects to cover debt service by at least 2.0x until 2030. The weighted-average life of its total debt is moderate at 2.5 years, while interest-rate risk is limited, with 79% of debt at fixed rates. Ankara's contingent liabilities are moderate and include borrowings of its water affiliate, ASKI, which can service its own debt, underpinned by its strong payback at about 0.1x in 2025. Contingent liabilities totalled TRY1.7 million at end-2025. EGO's total debt of TRY1.8 billion is reclassified as 'other Fitch-classified debt', as the loan is guaranteed by the metropolitan municipality and serviced from Ankara's operating cash flow. Liabilities and Liquidity Flexibility: 'Weaker' Ankara's counterparty risk stems from domestic liquidity providers rated below 'BBB-'. This, coupled with the short tenor of loans, limits its assessment to 'Weaker', similar to its Turkish peers. As the country's political hub, Ankara has good terms with local and international banks. At end-2025, Ankara's cash balance was TRY7.6 billion (unrestricted), up from TRY828 million in 2024 and covering 1.4x its annual debt servicing. Turkish LRGs do not benefit from treasury lines or national cash pooling, making it challenging to fund unexpected increases in liabilities or spending peaks. Financial Profile: 'aaa category' Fitch assesses Ankara's financial profile at 'aaa'. Tax revenue will drive operating revenue growth towards TRY245.5 billion, supported by expected real nominal GDP growth of 4% and average inflation of 20%. However, Fitch expects the operating margin to remain under pressure in 2026-2030, averaging 20% (2021-2025: 31%) due to persistently high inflation. Fitch's rating case for 2026-2030 projects Ankara's operating balance at about TRY49.3 billion, with direct debt totalling TRY91.9 billion in 2030, leading to a debt payback (net adjusted debt/operating balance) well below 5x, the threshold of a 'aaa' financial profile. Fitch's rating case projects that the actual debt service coverage ratio (DSCR) will deteriorate to 2.1x in 2030, from 4.5x in 2025, corresponding to a 'aa' financial profile. The fiscal debt burden (net adjusted debt/operating revenue) is low at below 50% in 2030, corresponding to a 'aaa' financial profile. Other Rating Factors Ankara's Long-Term IDRs are capped by the sovereign's. Its assessment does not consider extraordinary support from upper government tiers or asymmetric risk. 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. Short-Term Ratings The 'B' Short-Term IDRs are the only option for Ankara's 'BB-' Long-Term IDRs. National Ratings Ankara's 'AAA(tur)' National Rating is mapped to its Long-Term Local-Currency IDR and is based on peer comparison. The Outlook is Stable. Peer Analysis The SCP is at the mid-point of the 'bbb' category, supported by a strong payback ratio at 1.8x in the 'aaa' category and an actual DSCR at 2.1x in the 'aa' category, based on a comparison with its peers in the same rating category. Ankara also has a robust payback ratio similar to international peers, such as the City of Almaty (Kazakhstan), the State of Parana (Brazil) and Yerevan City (Armenia). Its SCP is in line with that of Parana and Manisa Metropolitan Municipality and below that of Almaty, based on its weaker coverage. Issuer Profile Ankara is Turkiye's capital and second-largest city by number of inhabitants, with 6.9% of the national population. Its GDP per capita accounts for 140% of the national average. Key Assumptions Qualitative Assumptions: Risk Profile: 'Weaker' Revenue Robustness: 'Midrange' Revenue Adjustability: 'Weaker' Expenditure Sustainability: 'Weaker' Expenditure Adjustability: 'Midrange' Liabilities and Liquidity Robustness: 'Midrange' Liabilities and Liquidity Flexibility: 'Weaker' Financial Profile: 'aaa' Asymmetric Risk: 'N/A' Support (Budget Loans): 'N/A' Support (Ad Hoc): 'N/A' Rating Cap (LT IDR): 'BB-' Rating Cap (LT LC IDR) 'BB-' Rating Floor: 'N/A' Quantitative assumptions - Issuer Specific Fitch's rating action is driven by the following assumptions for reference metrics under its 2026-2030 rating case: - Payback ratio: 1.8x - Actual DSCR: 2.1x - Fiscal debt burden: 36.7% Fitch's through-the-cycle rating case incorporates a combination of revenue, cost and financial risk stresses. It is based on 2021-2025 published figures and its expectations for 2026-2030: - Operating revenues CAGR of 22.4% (68.6% year on year for 2021-2025) due to expected slowing nominal GDP growth of about 21% on average - Tax revenue CAGR of 23.8% (67.4% year on year in 2021-2025) - Current transfers CAGR of 22.5% (66.1% year on year in 2021-2025) - Opex CAGR of 23.4% (87.4% year on year for 2021-2025) due to expected slowing inflation of about 20% on average in - Negative net capital balance totalling TRY48 billion on average - Apparent cost of debt on average 19.5%, below the average cost of debt in 2025, and based on the expected decline in policy rates and increased share of foreign-currency loans - Average US dollar/Turkish lira assumptions based on Fitch's sovereign estimate for 2026 at 49.5 and for 2027 at 55, with an annual additional depreciation of 10% for 2028-2030 Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A downgrade of the Turkish sovereign IDRs or a downward revision of Ankara's SCP resulting from debt payback of more than 9x on a sustained basis would lead to a downgrade of the IDRs. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade of the Turkish sovereign IDRs would lead to a similar rating action on Ankara's IDRs. Climate Vulnerability Signals The results of its Climate.VS screener did not indicate an elevated risk for Ankara. 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. Discussion Note Committee date: 03 June 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 Ankara's IDRs are capped by the Turkish sovereign. Entity/Debt Rating Prior ----------- ------ ----- Ankara Metropolitan Municipality LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- Natl LT AAA(tur) Affirmed AAA(tur) BALIKESIR METROPOLITAN: Fitch Affirms 'B+' IDRs, Outlook Stable --------------------------------------------------------------- Fitch Ratings has affirmed Balikesir Metropolitan Municipality's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'B+' with Stable Outlooks. The affirmation reflects Fitch's expectation that Balikesir's operating performance will remain resilient despite persistently high inflation in 2026, which Fitch expects to ease gradually over 2027-2030. It also factors in high staff costs, driven by past above-inflation wage adjustments and workforce expansion, which will likely continue to pressure opex. Fitch expects an increase in debt financing, mainly to support capex under its rating case. Nevertheless, Fitch expects its debt metrics and operating performance to remain commensurate with its 'b+' Standalone Credit Profile (SCP) and similarly rated peers over 2026-2030. KEY RATING DRIVERS Standalone Credit Profile Balikesir's 'b+' SCP results from a 'Weaker' risk profile and a 'bbb' financial profile. The SCP also factors in comparison with its national and international peers in the same rating category. Risk Profile: 'Weaker' The assessment reflects Fitch's view of a high risk that Balikesir's ability to cover debt service with its operating balance may weaken unexpectedly over 2026-2030, due to lower revenue, higher expenditure, or an unexpected rise in liabilities or debt service requirements. Revenue Robustness: 'Midrange' The assessment reflects Balikesir's dynamic and fairly diversified tax base, supported by an agriculture-based industrial local economy that has shown resilience to volatility. Its tax revenue growth prospects for 2026-2030 are slightly above national nominal GDP growth, supporting operating performance, alongside cost-consolidation measures. Tax revenue CAGR was 71.1% in 2021-2025, exceeding the national nominal GDP CAGR of 65%. Taxes averaged 70% of operating revenue for the last five years. Tax revenue growth should drive operating revenue towards TRY31 billion by 2030 (2025: TRY11.5 billion) under Fitch's rating case. Revenue Adjustability: 'Weaker' Balikesir's ability to generate additional revenue is constrained by nationally determined tax rates. At end-2025, nationally set and collected taxes comprised 68.3% of total revenue. Local taxes, over which Balikesir has tax autonomy, made up a low 0.2% of total revenue, indicating negligible tax flexibility due to ceilings set by the central government. This is partly offset by financial equalisation transfers received by metropolitan municipalities. These transfers contribute 22.1% of Balikesir's total revenue, and remain significant for Turkish mid-sized metropolitan municipalities, which are net recipients due to their lower GDP per capita than national levels. Expenditure Sustainability: 'Weaker' Fitch expects inflation to remain high in 2026 before easing gradually over 2027-2030, due mainly to higher imported energy prices linked to regional geopolitical tensions, which will continue to pressure expenditure despite Balikesir's moderately cyclical to countercyclical spending profile. In 2021-2025, operating revenue growth lagged opex growth, weakening the operating balance and increasing margin volatility, due to frontloaded capex and workforce expansion during the 2024 election cycle. Fitch expects opex growth to remain broadly aligned with revenue growth, supported by robust tax revenue prospects and cost-consolidation efforts, although still constrained by high inflation. Tighter staff cost control should also support expenditure management. This should reduce margin volatility and keep operating margins about 13% in 2026-2030, with central government cost-cutting measures providing additional support. Expenditure Adjustability: 'Midrange' Inflexible costs account for less than 70% of Balikesir's totex, lower than those of international peers and in line with national peers. Spending flexibility is constrained by the recent record of unbalanced budgets, due to ambitious capex during the past election cycle. Persistently high inflation is likely to further limit opex flexibility in the near term, although this should gradually improve from 2027. Fitch forecasts capex to remain at 14% of totex under the rating case, which is low compared with its Turkish peers. Nevertheless, the city should retain some ability to scale back capex to support budget consolidation, as its programme avoids capital-intensive projects. Liabilities and Liquidity Robustness: 'Weaker' Balikesir has no unhedged FX risk, as its entire debt portfolio is denominated in Turkish lira. In addition, 73% of its bank loans carry fixed interest rates, limiting interest-rate risk. Its debt, however, has short weighted average life, at two years, with nearly 29% of its total debt maturing in 2026, resulting in refinancing risk. This is compounded by a coverage ratio below 1.0x. These risks are partly mitigated by the amortising structure of its bank loans and some additional budgetary flexibility from expected capital revenue generation over the medium term. Balikesir is exposed to moderately high off-balance sheet risk relative to national peers, as municipally owned BASKI and the Balikesir Public Transportation Company (BTT) have been loss-making. Fitch therefore classifies their outstanding financial debt of TRY2.25 billion as 'other Fitch-classified debt', as it could become a direct obligation of the metropolitan municipality. Obligations of its majority-owned companies, mainly owed to the Social Security Administration, add pressure to liquidity as they are deducted monthly from nationally allocated tax revenue and offset against payables owed to the companies. Liabilities and Liquidity Flexibility: 'Weaker' Counterparty risk arising from Balikesir's domestic liquidity providers, which are rated below 'BBB-', together with the short tenor of its loans, constrains its assessment to 'Weaker', in line with other national peers. Balikesir has good access to domestic lenders, although access to international funding remains limited. Its domestic funding base includes both state-owned and commercial banks. At end-2025, the municipality's year-end cash was fully restricted for the settlement of payables. Turkish LRGs do not benefit from treasury facilities or national cash-pooling arrangements, which limits their ability to absorb unexpected increases in debt service or spending peaks. Financial Profile: 'bbb category' The 'bbb' financial profile assessment is derived from a payback ratio (net adjusted debt-to-operating balance), which its rating case expects to reach 10.1x in 2030, in line with an 'a' assessment. This is offset by a weaker actual debt service coverage ratio (ADSCR) below 1.0x, corresponding to a 'b' assessment and a fiscal burden remaining below 150%. For the secondary metrics, Fitch's rating case projects that ADSCR will continue to be weak averaging 0.3x in 2027-2030, due to the short maturity of its local currency loans, high interest rates and new deficit-financing debt. The fiscal debt burden will deteriorate to 116.6% in 2030 from 60.3% in 2025, corresponding to a 'bbb' assessment and will add pressure to the financial profile. Balikesir's interim budgetary results indicate an improvement in operating performance, with an operating balance of TRY1.1 billion and an operating margin of 21.7% in 4M26. However, the municipality still posted a deficit before financing equal to 6% of total revenue over the same period. Fitch expects Balikesir's fiscal consolidation efforts over 2026-2030 to be constrained by persistent inflation with the deficit before financing averaging about 22% and pressure to maintain capex at no less than 14% of totex, which is low compared with the national average of about 30%. Other Rating Factors Balikesir's IDRs are not capped by the Turkish sovereign's IDRs, and no other rating factors affect the ratings. Short-Term Ratings Balikesir's 'B' Short-Term IDRs are the only option for its 'B+' Long-Term IDRs. National Ratings Balikesir's 'A+(tur)' National Rating is mapped to its Long-Term Local-Currency IDR of 'B+' and is based on peer comparison. Balikesir's rating reflects lower operating margins than other Turkish metropolitan municipalities', a much higher payback ratio (net adjusted debt to-operating balance) and an expected decrease in capex because of budgetary consolidation measures. Peer Analysis Balikesir's 'Weaker' risk profile aligns with those of its national and international peers. Its financial profile, though at the upper end of a 'bbb' assessment, reflects weaker debt metrics than those peers. This underlines its volatile budgetary performance being influenced by the election cycle rather than structural factors. Leverage has increased sharply due to ambitious capex and higher staff costs from salary adjustments above inflation, as well as workforce expansion in municipal companies. Its payback ratio will be 10.1x in 2030, close to the upper end of the 'a' category, but this is offset by its 'bbb' financial profile, reflecting weaker actual debt service coverage ratio (ADSCR) of below 1x, corresponding to a 'b' category. This is similar to its closest national peer Konya, whose ADSCR averages below 1.0x. However, Konya's payback ratio at 4.4x is at the lower end of a 'aaa' financial profile. Generally, Turkish local and regional governments (LRGs) have a weaker ADSCR than their international peers due to shorter Turkish lira debt maturities and high domestic interest rates. Issuer Profile Balikesir is a mid-sized metropolitan municipality with 1.3 million residents, or nearly 1.5% of the national population. Its GDP per capita of TRY459,714 represents 91% of the national average and contributes 1.3% to the national GDP. Balikesir was the 16th largest city by GDP contribution in 2024. The local economy is fairly diversified, led by agriculture-based industry (33%), followed by services (29%), public administration, education, health, and social work (15%), agriculture (12%), and real estate (11%). Key Assumptions Qualitative assumptions: Risk Profile: 'Weaker' Revenue Robustness: 'Midrange' Revenue Adjustability: 'Weaker' Expenditure Sustainability: 'Weaker' Expenditure Adjustability: 'Midrange' Liabilities and Liquidity Robustness: 'Weaker' Liabilities and Liquidity Flexibility: 'Weaker' Financial Profile: 'bbb' Asymmetric Risk: 'N/A' Support (Budget Loans): 'N/A' Support (Ad Hoc): 'N/A' Rating Cap (LT IDR): 'N/A' Rating Cap (LT LC IDR) 'N/A' Rating Floor: 'N/A' Quantitative assumptions - Issuer Specific Fitch's rating action is driven by the following assumptions for reference metrics under its 2026-2030 rating case: - Payback ratio: 10.1x - Actual DSCR: 0.2x - Fiscal debt burden: 116.6% Fitch's through-the-cycle rating case incorporates a combination of revenue, cost and financial risk stresses. It is based on 2021-2025 published figures and its expectations for 2026-2030: - Operating revenue CAGR of 21.9% (68.6% year on year for 2021-2025) due to expected slowing nominal GDP growth of about 21% on average - Tax revenue CAGR of 21.9% (71.1% year on year in 2021-2025) - Current transfer CAGR of 22.5% (66.6% year on year in 2021-2025) - Opex CAGR of 24.3% (74.8% year on year for 2021-2025) due to expected slowing inflation of about 20% on average and cost consolidation efforts - Negative net capital balance totalling TRY3.2 billion on average - Apparent cost of debt on average 35.9%, above the average cost of debt in 2025, based on solely local-currency borrowing at high interest rates Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A payback ratio above 15x on a sustained basis in its rating case could lead to a downgrade of Balikesir's IDRs. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A payback ratio below 9x and an ADSCR above 1x on a sustained basis in its rating case could lead to an upgrade of Balikesir's IDRs. Climate Vulnerability Signals The results of its Climate.VS screener did not indicate an elevated risk for Balikesir. 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. Summary of Financial Adjustments BASKI's (Balikesir's Water & Sewerage Affiliate) and BTT's outstanding financial debt is classified as other Fitch-classified debt as both the affiliate and the public company are loss-making. Discussion Note Committee date: 3 June 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. Entity/Debt Rating Prior ----------- ------ ----- Balikesir Metropolitan Municipality LT IDR B+ Affirmed B+ ST IDR B Affirmed B LC LT IDR B+ Affirmed B+ LC ST IDR B Affirmed B Natl LT A+(tur) Affirmed A+(tur) ENPARA BANK: Fitch Assigns 'BB-' LongTerm IDRs, Outlook Stable -------------------------------------------------------------- Fitch Ratings has assigned Enpara Bank A.S Long-Term (LT) Foreign- and Local-Currency Issuer Default Ratings (IDRs) of 'BB-' with Stable Outlooks, and a Shareholder Support Rating (SSR) of 'bb-'. Fitch has also assigned Enpara a National Long-Term Rating of 'AA(tur)' with Stable Outlook. Fitch has not assigned a Viability Rating to Enpara given its short record of operations as a standalone entity. Key Rating Drivers Support-Driven, Country Risks: Enpara's IDRs and National Rating are driven by potential shareholder support, as reflected in its SSR of 'bb-'. The SSR and LT Foreign-Currency IDR is constrained by Turkiye's Country Ceiling of 'BB-', while its LT Local-Currency IDR also considers Turkish country risks. The Stable Outlooks mirror that on the sovereign. The Short-Term IDRs of 'B' are the only option mapping to the Long-Term IDRs in the 'BB' category. Shareholder Support: The SSR reflects potential support from Enpara's 99.9% parent, Qatar National Bank (Q.P.S.C.) (QNB; A+/Rating Watch Negative). The support assessment considers the bank's role in QNB's digital banking growth strategy and its limited size relative to the group. Increased Operating Environment Challenges: Fitch considers macro-financial stability risks and external financing pressures to have risen following the emergence of the Iran conflict. This has dampened the normalisation trend and the strengthening record of Turkiye's monetary policy. A prolonged conflict would likely pose greater challenges to banks' financial and risk profiles through higher-for-longer lira interest rates and inflation. Spin-Off; Short Standalone Operating Record: Enpara began operations in 2012 as an online banking platform under QNB Bank A.S. (BB-/Stable), from which it was spun off in 3Q25. Enpara's standalone business model remains under development, and its market shares were negligible at end-1Q26, at less than 1% of sector loans, assets and deposits. Granular Retail Lending Portfolio: The bank's operations are predominantly focused on mass-market retail banking (91% of total loans at end-2025) and payment systems, with a limited amount of corporate loans (9%) obtained through the spin-off. Borrower concentrations are limited. Growth remains contingent on regulatory measures but is likely to be at the higher end of the sector, given the bank's growth stage. Weaker-Than-Sector Asset Quality: Enpara's non-performing loan (NPL) ratio at 6.7% at end-1Q26 (end-2025: 6.2%), was well above the sector average of 2.7% at end-1Q26, reflecting the bank's unsecured retail focus, and higher risk appetite. Loan loss allowances fully covered impaired loans at end-1Q26 at 107% (end-2025: 109%). Fitch expects impaired loans to rise, amid sector-wide asset quality deterioration, due to higher-for-longer lira interest rates and slowing economic growth. Profitability Metrics to Normalise: The bank's operating profit was a high 8.0% of risk-weighted assets (RWAs) in 1Q26 (2025: 5.9%) as higher loan yields more than offset higher loan impairment charges and higher deposit costs. Fee income is supportive, while trading losses, driven by still high swap costs, continued to erode profits. Fitch expects profitability to decline as the bank's performance normalises after spin-off, monetary easing is delayed due to Iran war-related disruption and inflationary pressure on operating expenses remains high. Capitalisation Pressured by Growth: Enpara's common equity Tier 1 (CET1) ratio was 14.3% at end-1Q26, down from 15.2% at end-2025 (net of forbearance) reflecting RWAs growth, but also the bank's low foreign-currency lending and therefore lower forbearance impact compared with the sector. Fitch expects ordinary capital support from QNB to be available to the bank, if needed. Granular Deposit Base: The bank is funded mainly by granular retail deposits, with total deposits accounting for 92% of total funding at end-1Q26; almost 70% of deposit base was covered by deposit insurance. Wholesale funding was a limited 8%, consisting almost entirely of short-term repos. This supported a high total liquidity coverage ratio of 296%. Fitch also expects ordinary liquidity support from QNB to be available, if needed. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A downgrade of the Long-Term IDRs would follow a downgrade of Enpara's SSR. A downgrade of the sovereign ratings and Country Ceiling would lead to a downgrade of Enpara's SSR. The SSR is also sensitive to Fitch's view of QNB's ability and propensity to provide support. The bank's Short-Term IDRs are sensitive to multi-notch downgrades of its LT IDRs. A downgrade of the bank's National Rating would result from a weakening of its creditworthiness relative to other Turkish issuers'. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade of Turkiye's Long-Term IDRs and Country Ceiling would likely lead to similar action on Enpara's SSR and Long-Term IDRs. The bank's Short-Term IDRs are sensitive to multi-notch upgrades of its LT IDRs. The National Rating could be upgraded if Enpara's creditworthiness strengthens relative to that of other Turkish issuers. Date of Relevant Committee 22-May-2026 Public Ratings with Credit Linkage to other ratings Enpara's ratings are linked to QNB's. ESG Considerations The bank has an ESG Relevance Score for Management Strategy of '4', reflecting an increased regulatory burden on all Turkish banks. Management's ability across the sector to determine their own strategy and price risk is constrained by increased regulatory interventions and also by the operational challenges of implementing regulations at the bank level. This has a moderately negative impact on the credit profile and is relevant to the rating in combination with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating ----------- ------ Enpara Bank A.S. LT IDR BB- New Rating ST IDR B New Rating LC LT IDR BB- New Rating LC ST IDR B New Rating Natl LT AA(tur) New Rating Shareholder Support bb- New Rating IZMIR METROPOLITAN: Fitch Affirms BB- LongTerm IDRs, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has affirmed Izmir Metropolitan Municipality's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BB-' with Stable Outlooks. Fitch has also downgraded Izmir's National Rating to 'AA+(tur)' from 'AAA(tur)' based on peer comparison. The Outlook is Stable. The affirmation reflects its unchanged view that Izmir will maintain a robust operating balance despite high inflation, although capex-driven debt will increase under the rating case. The rating also reflects its Standalone Credit Profile (SCP), which Fitch has revised to 'bb+' from 'bbb-', and a cap at Turkiye's sovereign ratings (BB-/Stable). The SCP revision reflects Izmir's weakening financial profile. This is driven by sustained pressure on opex, due to above-inflation adjustments under collective labour agreements and increased hiring, primarily within municipal companies. The settlement of overdue payables related to social security contributions for municipal company staff added further pressure, leading to increased local currency borrowing in 2025 and weakening actual debt service coverage (ADSCR) below 1.0x. Fitch expects the municipality to exercise spending control over the medium term, with opex growth broadly in line with operating revenue growth. This is reflected in a projected payback ratio of 4.9x in 2030 (2025:2.8x), and DSCR weakening below 1.0x in 2030 (2025: 0.9x). Fitch has revised Izmir's financial profile to the upper end of the 'aa' category from the 'aaa' category, which results in the revision of the SCP to 'bb+'. KEY RATING DRIVERS Standalone Credit Profile Izmir's 'bb+' SCP results from a 'Weaker' risk profile and a 'aa' financial profile. The SCP also factors in comparison with its national and international peers in the same rating category. Risk Profile: 'Weaker' The assessment reflects a high risk that Izmir's ability to cover debt service with its operating balance may weaken unexpectedly over 2026-2030, due to lower revenue, higher expenditure, or an unexpected rise in liabilities or debt-service requirements. Revenue Robustness: 'Midrange' Izmir has a well-diversified, buoyant local economy. GDP per capita is 16% above the national average, leading to a stable tax revenue base and robust tax revenue growth prospects, making it resilient to economic slowdown. Fitch expects tax revenue growth to be at least in line with the national nominal GDP CAGR of 21% over 2026-2030. Taxes represent about 78% of operating revenue and their growth should drive operating revenue towards TRY172.2 billion by 2030 (2025: TRY61.6 billion) under Fitch's rating case. Revenue Adjustability: 'Weaker' Izmir's ability to generate additional revenue is constrained by nationally determined tax rates. At end-2025, nationally set and collected taxes comprised 74% of its total revenue. Local taxes over which Izmir has control were a low 0.1% of total revenue, implying negligible tax flexibility, which is also constrained by central government limits. This is partly compensated for by fees and charges levied on public services over which Izmir has some flexibility and by scope for asset sales. These accounted for 6.9% and 4.8%, respectively, of total revenue in 2025. Expenditure Sustainability: 'Weaker' Izmir's moderately cyclical to countercyclical spending responsibilities help it adapt to local economic cycles. High inflation caused opex growth (CAGR: 72.6%) to outpace operating revenue growth (CAGR: 58.4%) in 2021-2025, although slower capex growth kept totex growth broadly aligned with revenue growth. Fitch expects control over opex to remain limited. This reflects persistently high inflation, higher imported energy prices amid regional geopolitical tensions, and continued large subsidies to its loss-making transport company, ESHOT, as fare increases fail to fully offset rising costs. Its rating case expects capex, which is focused on metro line extension, to average 26% of totex and to further limit cost control amid high inflation. Fitch expects inflation to slow from 2027 which, alongside central government cost-cutting measures and the settlement of overdue payables, supported by recent repayment flexibility of up to 72 months, to help Izmir regain better control over expenditure growth. Expenditure Adjustability: 'Midrange' Izmir has a lower share of inflexible costs than its international peers, at less than 70% of totex, which is in line with its national peers. This is offset by Izmir's weak record of balanced budgets due to large swings in capex in pre-election periods and its limited ability to cut costs, given low existing investment levels. Fitch expects Izmir to continue to post large deficits before financing, averaging 19% of revenue, due to high investment needs and inflationary pressures on opex. Fitch expects the municipality to spend an average TRY40 billion annually on investments for the next five years, focused on the Ucyol-Buca metro line construction, followed by regular transportation infrastructure (construction and maintenance of tunnels, intersections and roads), and renovation of social and cultural facilities. Liabilities and Liquidity Robustness: 'Weaker' Izmir faces significant FX risk, as nearly 63% of its debt is in euros. The average life of its debt at 2.8 years and fully amortising bank loans mitigate annual debt-servicing pressure. Most of its loans are at fixed interest rates (63%), resulting in moderately low interest-rate risk. Refinancing pressure is further mitigated by Izmir's operating balance covering on average 1x its annual debt service. The municipality is not exposed to material off-balance sheet risks. Contingent liabilities mostly comprise debt at its water affiliate, IZSU, which is self-funded, underpinned by a robust payback ratio at 0.5x. Liabilities and Liquidity Flexibility: 'Weaker' The counterparty risk - domestic liquidity providers are rated below 'BBB-' - and short tenor loans limit its assessment to 'Weaker', similar to its national peers. Izmir had TRY1,620 million cash at end-2025, up from TRY1,479 million in 2024, but it remains restricted as it is earmarked for the settlement of payables. However, Izmir has good access to international financial markets. Turkish local and regional governments (LRGs) do not benefit from treasury lines or cash-pooling, making it challenging for them to fund unexpected increases in debt liabilities or spending. Financial Profile: 'aa category' Fitch has revised Izmir's financial profile assessment to 'aa' from 'aaa', reflecting a payback ratio (net adjusted debt-to-operating balance) at the weaker end of the 'aaa' range, combined with DSCR below 1.0x under the revised rating case. Fitch's rating case forecasts buoyant tax revenue growth to drive operating revenue to TRY172.2 billion, supported by real nominal GDP growth of 4% and average inflation of 20%. Fitch expects the operating margin to remain under pressure over 2026-2030, averaging 21.5%, due to persistently high inflation, down from an average of 38% in 2021-2025. Fitch projects Izmir's operating balance at about TRY37 billion against direct debt of TRY182.4 billion in 2030, resulting in a debt payback ratio of 4.9x. For secondary metrics, Fitch forecasts that the ADSCR will remain stable at just below 1.0x in 2030 (2025: 0.9x), corresponding to a 'b' assessment, and the fiscal debt burden (net adjusted debt-to-operating revenue) to remain slightly above 100%, corresponding to an 'a' assessment. The weaker ADSCR offsets the debt payback ratio, resulting in an overall financial profile of 'aa'. Other Rating Factors Izmir's Long-Term IDRs are capped by the Turkish sovereign. In its assessment Fitch does not apply extraordinary support from upper government tiers or asymmetric risk. 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. Short-Term Ratings The 'B' Short-Term IDR is the only option for a 'BB-' Long-Term IDR. National Ratings Izmir's 'AA+(tur)' National Rating is mapped to its Long-Term Local-Currency IDR and based on peer comparison. Peer Analysis Izmir's national and international peers all have 'Weaker' risk profiles, with varying SCPs according to their leverage metrics. Izmir's SCP factors in comparison with national and international peers in the same rating category. Like most other Turkish LRGs, Izmir's payback ratio remains robust in the 'aaa' category. Its payback ratio is at the lower end of the 'aaa' category, like Mersin Metropolitan Municipality (BB-/Stable), Konya Metropolitan Municipality (BB-/Stable) and Yerevan City (BB-/Positive). Izmir's debt service coverage is weaker than those of Mersin and Yerevan, at below 1.0x, which supports a SCP of 'bb+', in line with that of Konya. Issuer Profile Izmir is the third-largest city in Turkiye with 5.2% of the national population. It has a well-diversified and buoyant local economy dominated by the services sector (46%), followed by industry (47%) and agriculture (7%). Key Assumptions Qualitative Assumptions: Risk Profile: 'Weaker' Revenue Robustness: 'Midrange' Revenue Adjustability: 'Weaker' Expenditure Sustainability: 'Weaker' Expenditure Adjustability: 'Midrange' Liabilities and Liquidity Robustness: 'Weaker' Liabilities and Liquidity Flexibility: 'Weaker' Financial Profile: 'aa' Asymmetric Risk: 'N/A' Support (Budget Loans): 'N/A' Support (Ad Hoc): 'N/A' Rating Cap (LT IDR): 'BB-' Rating Cap (LT LC IDR) 'BB-' Rating Floor: 'N/A' Quantitative assumptions - Issuer Specific Fitch's rating action is driven by the following assumptions for reference metrics under its 2026-2030 rating case: - Payback ratio: 4.9x - ADSCR: 1.0x - Fiscal debt burden: 106% Fitch's through-the-cycle rating case incorporates a combination of revenue, cost and financial risk stresses. It is based on 2021-2025 published figures and its expectations for 2026-2030: - Operating revenue CAGR of 22.8% (58.4% year on year for 2021-2025) due to expected slowing nominal GDP growth of about 21% on average - Tax revenue CAGR of 23.2% (60.3% year on year in 2021-2025) - Current transfers CAGR of 22.5% (67.6% year on year in 2021-2025) - Opex CAGR of 22.6% (72.6% year on year for 2021-2025) due to expected slowing inflation of about 20% on average - Negative net capital balance totaling TRY39.1 billion on average - Apparent cost of debt on average 13.8%, below the average cost of debt in 2025, based on a higher share of foreign-currency borrowing - Average US dollar/Turkish lira assumptions based on Fitch's sovereign estimate for 2026 at 49.5 and 2027 at 55, with an annual additional depreciation of 10% for 2028-2030 Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A downgrade of Turkiye's sovereign IDRs or a downward revision of Izmir's SCP resulting from a debt payback of more than 9x on a sustained basis would lead to a downgrade of Izmir's IDRs. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade of the Turkish sovereign IDRs would lead to a similar action on Izmir's IDRs. Climate Vulnerability Signals The results of its Climate.VS screener did not indicate an elevated risk for Izmir. 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. Discussion Note Committee date: 03 June 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 Izmir's IDRs are capped by the Turkish sovereign. Entity/Debt Rating Prior ----------- ------ ----- 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 Natl LT AA+(tur) Downgrade AAA(tur) KONYA METROPOLITAN: Fitch Affirms BB- LongTerm IDRs, Outlook Stable ------------------------------------------------------------------- Fitch Ratings has affirmed Konya Metropolitan Municipality's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BB-' with Stable Outlooks. The affirmation reflects its view that Konya will maintain a robust operating balance. This is despite persistently high inflation in 2026, driven by higher imported energy prices amid regional geopolitical tensions, which will weigh on opex. The affirmation also takes into account further depreciation of the Turkish lira, and an expected increase in debt to support investments under Fitch's rating case. Nevertheless, Fitch expects Konya's debt metrics to remain in line with peers with a 'bb+' Standalone Credit Profile (SCP) over the medium term. Konya's IDRs are capped by the Turkish sovereign's 'BB-' IDRs and the Stable Outlooks reflect that on the sovereign. KEY RATING DRIVERS Standalone Credit Profile Konya's 'bb+' SCP results from a 'Weaker' risk profile and a 'aa' financial profile. The SCP also factors in comparison with its national and international peers in the same rating category. Risk Profile: 'Weaker' Konya's risk profile reflects four 'Weaker' key risk factors (KRFs) and two 'Midrange' KRFs. This reflects a high risk that Konya's ability to cover debt service with its operating balance may weaken unexpectedly over 2026-2030 due to lower revenue, higher expenditure or an unexpected rise in liabilities or debt-service requirements. Revenue Robustness: 'Midrange' Fitch expects Konya's dynamic and well-diversified economy to support low volatility in its tax revenue base. Taxes, which account for about two-thirds of operating revenue, should help operating revenue grow above the expected national nominal GDP CAGR of 21%, reaching TRY69.9 billion in 2030, from TRY24.7 billion in 2025. The development of a new organised industrial zone should attract businesses and investment, supporting employment, economic growth and tax generation. This is reflected in above-average tax revenue growth of about 55% in 2025 and supported by a low unemployment rate of 6.8%, below the national average of 8.3%. Revenue Adjustability: 'Weaker' Nationally determined tax rates constrain Konya's ability to generate additional revenue. At end-2025, nationally collected tax revenue, over which Konya has no tax-setting power, comprised 65.4% of operating revenue, or 54.8% of total revenue. Local taxes, for which the municipality has rate-setting power, are a negligible 0.1% of total revenue. The lack of tax rate flexibility is compensated by the scope for asset sales and financial-equalisation transfers to metropolitan municipalities. These accounted for 19.4% and 15.8% of Konya's total revenue, respectively, in 2025. Fitch expects Konya's capital revenue to decline to 10% of total revenue over 2026-2030 from a five-year average of about 25%, as the city has completed a substantial share of land development. However, this is still well above that of national peers, creating additional budgetary flexibility. Expenditure Sustainability: 'Weaker' A persistently high-inflation environment could weaken Konya's expenditure control, despite its moderately cyclical and counter-cyclical responsibilities. Following the government's fiscal austerity measures, Konya has limited above-inflation salary increases to keep opex growth below operating revenue growth, after two years of weak cost control. Fitch expects Konya to maintain high capex at about 28% of totex, mainly for industrial land development, roads, social and cultural facilities, a planned 70MW solar power plant, a traffic control centre and rolling stock purchases. Fitch also expects slower inflation from 2027 to help Konya restore its capacity to control expenditure growth. Expenditure Adjustability: 'Midrange' Konya's inflexible costs are below 70% of totex, lower than those of international peers and in line with national peers. The municipality retains some spending flexibility, as it can cut or defer investment infrastructure, supported by its fairly well-developed socio-economic infrastructure. However, this flexibility is to some extent constrained by a weak record of balanced budgets, driven by large capex swings in pre-election periods. Fitch expects spending flexibility to gradually improve as inflation slows. Liabilities and Liquidity Robustness: 'Weaker' Konya is exposed to moderately low FX risk, with nearly 15% of total debt in euros and unhedged, although Fitch expects this share to rise to about 60% under the rating case due to new foreign-currency borrowing to fund capex. Interest-rate risk is moderately low, as 68% of bank loans were at fixed rates at end-2025. However, the short-weighted average life of debt of 1.5 years creates high refinancing risk, with nearly 52% maturing in 2025. This is partly mitigated by the amortising structure of bank loans and additional budget flexibility from expected capital revenue generation over the medium term. Contingent liabilities are limited to the borrowings of water affiliate KOSKI, a self-sustaining entity supported by a strong payback ratio of 1.3x in 2025. Liabilities and Liquidity Flexibility: 'Weaker' The counterparty risk associated with Konya's domestic liquidity providers rated below 'BBB-' and the short tenor of loans limit its assessment of liabilities and liquidity flexibility to 'Weaker', similar to other Turkish local and regional governments (LRGs). Konya has good access to national lenders but has less access to international lenders. Turkish LRGs do not benefit from treasury lines or national cash-pooling, making it challenging to fund unexpected increases in debt liabilities or spending peaks. Financial Profile: 'aa category' Fitch assesses Konya's financial profile in the 'aa' category. Fitch's rating case projects Konya's operating balance to increase to about TRY11.7 billion in 2030, from TRY5.1 billion in 2025, with direct debt at TRY51.8 billion (2025: TRY10.1 billion). This will result in a payback ratio (Fitch-defined net-adjusted debt/operating balance) remaining below 5x, in line with a 'aaa' financial profile. For secondary metrics, Fitch's rating case projects that the actual debt service coverage ratio (DSCR) will slightly improve on average to 0.9x in 2026-2030, from 0.6x in 2025, corresponding to a 'b' assessment. The fiscal debt burden will remain low, below 100%, corresponding to a 'aa' assessment. The weaker actual DSCR offsets the debt payback ratio, resulting in an overall financial profile of 'aa'. Other Rating Factors Konya's IDRs are capped by the Turkish sovereign IDRs. Its assessment does not consider extraordinary support from upper government tiers or asymmetric risk. 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. Short-Term Ratings The 'B' Short-Term IDRs are the only option mapping to the 'BB-' Long-Term IDRs. National Ratings Konya's 'AA+(tur)' National Long-Term Rating is mapped to its Long-Term Local-Currency IDR of 'BB-' and reflects its 'bb+' SCP. Peer Analysis All Turkish metropolitan municipalities and international peers, such as Armenia's Yerevan City and Uzbekistan's Tashkent City, have 'Weaker' risk profiles driven by a volatile economic environment and evolving institutional framework, resulting in high volatility in operational cash flows. Among Turkish LRGs, Konya is most comparable with Manisa Metropolitan Municipality and Mersin Metropolitan Municipality in demographic trends and GDP per capita. Mersin has a 'bbb-' SCP, supported by a similarly strong payback ratio at 'aaa', but benefits from a stronger actual DSCR compared with Konya, at above 1.5x. Like most other Turkish LRGs, Konya's payback ratio remains strong at 'aaa'. However, its actual DSCR is weaker, at below 1.0x, like that of Balikesir Metropolitan Municipality (SCP: b+). Among international peers, Konya's debt metrics are broadly comparable with those of Yerevan City, which has a 'bbb-' SCP, but Konya's coverage ratio is weaker than Yerevan City's, which supports a 'bb+' SCP. Issuer Profile Konya has a population of about 2.3 million people, accounting for 2.7% of Turkiye's national population. It has a diverse local economy. Its GDP per capita is TRY388,841, representing 77% of the national average and contributes 2.1% of the national GDP. Key Assumptions Qualitative Assumptions: Risk Profile: 'Weaker' Revenue Robustness: 'Midrange' Revenue Adjustability: 'Weaker' Expenditure Sustainability: 'Weaker' Expenditure Adjustability: 'Midrange' Liabilities and Liquidity Robustness: 'Weaker' Liabilities and Liquidity Flexibility: 'Weaker' Financial Profile: 'aa' Asymmetric Risk: 'N/A' Support (Budget Loans): 'N/A' Support (Ad Hoc): 'N/A' Rating Cap (LT IDR): 'BB-' Rating Cap (LT LC IDR) 'BB-' Rating Floor: 'N/A' Quantitative assumptions - Issuer Specific Fitch's rating action is driven by the following assumptions for reference metrics under its 2026-2030 rating case: - Payback ratio: 4.4x - Actual DSCR: 0.9x - Fiscal debt burden: 74.1% Fitch's through-the-cycle rating case incorporates a combination of revenue, cost and financial risk stresses. It is based on 2021-2025 published figures and its expectations for 2026-2030: - Operating revenue CAGR of 23.1% (67.5% year on year for 2021-2025) due to expected slowing nominal GDP growth of about 21% on average - Tax revenue CAGR of 23.8% (68.7% year on year in 2021-2025) - Current transfer CAGR of 22.5% (67% year on year in 2021-2025) - Opex CAGR of 24.3% (78.4% year on year for 2021-2025) due to expected slowing inflation of about 20% on average - Negative net capital balance totalling TRY12.1 billion on average - Apparent cost of debt on average 22.4%, above the average cost of debt in 2025, based on a higher share of local- currency borrowing - Average US dollar/Turkish lira assumptions based on Fitch's sovereign estimate for 2026 at 49.5 and for 2027 at 55, with an annual additional depreciation of 10% for 2028-2030 Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A downgrade of the Turkish sovereign's IDRs, or a downward revision of Konya's SCP, resulting from a debt payback ratio above 9x on a sustained basis, would lead to a downgrade of Konya's IDRs. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade of the Turkish sovereign's IDRs would lead to an upgrade of Konya's IDRs. Climate Vulnerability Signals The results of its Climate.VS screener did not indicate an elevated risk for Konya. 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. Discussion Note Committee date: 3 June 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 Konya's IDRs are capped by the Turkish sovereign. Entity/Debt Rating Prior ----------- ------ ----- Konya Metropolitan Municipality LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- Natl LT AA+(tur) Affirmed AA+(tur) MANISA METROPOLITAN: Fitch Affirms BB- LongTerm IDRs ---------------------------------------------------- Fitch Ratings has affirmed Manisa Metropolitan Municipality's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BB-' with Stable Outlooks. The affirmation reflects its unchanged view that Manisa will maintain a robust operating balance despite high inflation, although capex-driven debt will increase under the rating case. Its debt metrics will remain commensurate with its peers with a 'bbb' Standalone Credit Profile (SCP) over the medium term. Manisa's IDRs are capped by the Turkish sovereign's 'BB-' IDRs and the Stable Outlooks reflect that on the sovereign. KEY RATING DRIVERS Standalone Credit Profile Manisa's 'bbb' SCP results from a 'Weaker' risk profile and a 'aaa' financial profile. The SCP also factors in comparison with its national and international peers in the same rating category. Risk Profile: 'Weaker' The assessment reflects a high risk that Manisa's ability to cover debt service with its operating balance may weaken unexpectedly over 2026-2030, due to lower revenue, higher expenditure, or an unexpected rise in liabilities or debt-service requirements. Revenue Robustness: 'Midrange' Manisa benefits from a dynamic tax base, supported by a diversified and industrialised local economy, resulting in a tax revenue structure with low volatility and sound growth prospects. Fitch projects tax revenue growth to slightly exceed anticipated national nominal GDP CAGR of 21% over 2026-2030. The municipality's tax revenue CAGR of 65% in 2021-2025 was in line with the national nominal GDP CAGR. Taxes represent about 67% of operating revenue and their growth should drive operating revenue towards TRY35 billion by 2030 (2025: TRY12.7 billion) under Fitch's rating case. Revenue Adjustability: 'Weaker' Manisa's ability to generate additional revenue is constrained by nationally determined tax rates. At end-2025, nationally set and collected taxes comprised 64% of its total revenue. Local taxes, over which Manisa has tax autonomy, made up a low 0.2% of revenue, implying negligible tax flexibility, and are further constrained by ceilings set by the central government. Tax-setting inflexibility is partly compensated by fees and charges levied on public services over which Manisa has some flexibility and by its scope for asset sales. These accounted for 7.6% and 0.8%, respectively, of Manisa's revenue in 2025. Expenditure Sustainability: 'Weaker' Moderately cyclical to countercyclical spending responsibilities allow Manisa to adapt spending to local economic cycles. Manisa managed to report surpluses before financing over the past five years, despite opex (CAGR 75%) rising faster than operating revenue (CAGR: 63%). However, Fitch expects persistently high inflation to limit Manisa's control over totex, with opex growth outpacing operating revenue growth by about 3.5% in its rating case. However, cost-cutting measures by the central government and expected decline in inflation from 2027 should help Manisa regain control of expenditure growth. Expenditure Adjustability: 'Midrange' Manisa has a low share of inflexible costs, averaging 60% of its totex, compared with 70%-90% for international peers. Stronger spending flexibility is supported by Manisa's record of balanced budgets as demonstrated by consistent surpluses before financing in the past five years. Fitch expects Manisa to spend an average TRY10.2 billion annually on investments for the next five years or about 35% of totex, focused on basic infrastructure investments, mainly road construction and maintenance, bus terminals and the construction of cultural and social facilities. However, spending flexibility is limited by modest current services and investments, and high inflation, which constrain its ability to reduce investment outlays. Liabilities and Liquidity Robustness: 'Midrange' Fitch has revised the assessment to 'Midrange' from 'Weaker'. Manisa's leverage is among the lowest of Fitch-rated Turkish local and regional governments (LRGs). Manisa remains exposed to unhedged FX and interest-rate risk through its euro-denominated floating-rate loan, which accounts for 60% of total debt. However, Fitch views these risks as manageable considering its low indebtedness and net cash position at end-2025. The weighted average debt maturity is short at 1.7 years, exposing the city to refinancing risk. However, this is offset by a strong operating balance, which Fitch expects to cover debt service by at least 2.0x until 2030. Manisa is not exposed to material off-balance sheet risk. At end-2025, its contingent liabilities consisted of debt at its water and sewage affiliate, MASKI (TRY0.6 billion), which Fitch views as a self-funded utility. This assessment is supported by a debt service coverage ratio (DSCR) of 1.3x in 2025. Liabilities and Liquidity Flexibility: 'Weaker' Manisa's counterparty risk associated with domestic liquidity providers (below BBB-) and the short tenor of its loans limit its assessment to 'Weaker', similar to other Turkish LRGs. Manisa's unrestricted cash reserves, net of receivables minus payables, were TRY328 million at end-2025 (2024: TRY657 million). Turkish LRGs do not benefit from treasury lines or national cash-pooling, making it challenging to fund unexpected increases in liabilities or spending peaks. Financial Profile: 'aaa category' Fitch assesses Manisa's financial profile at 'aaa'. Tax revenue will drive growth of operating revenue towards TRY35 billion, supported by expected real nominal GDP growth of 4% and average inflation of 20%. Fitch's rating case for 2026-2030 projects Manisa's operating balance at about TRY9.4 billion and direct debt of TRY18.1 billion in 2030, leading to a strong debt payback ratio (net adjusted debt/operating balance) at 1.9x. This is well below 5x, the upper threshold of a 'aaa' financial profile. Its forecast of a solid actual DSCR of 2.1x in 2030 (2025: 35.6x), corresponding to a 'aa' financial profile, provides further support. This is despite an expected fall in the operating margin to an average 29% in 2026-2030 from 45% in 2021-2025. The fiscal debt burden (net adjusted debt/operating revenue) increases to slightly above 50% in 2030, corresponding to a 'aa' financial profile. Other Rating Factors Manisa's Long-Term IDRs are capped by the sovereign IDRs. Its assessment does not consider extraordinary support from upper government tiers or asymmetric risk. 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. Short-Term Ratings The 'B' Short-Term IDRs are the only option for the 'BB-' Long-Term IDRs. National Ratings Manisa's 'AAA(tur)' National Rating is mapped to its Long-Term Local-Currency IDR and based on peer comparison. The Outlook is Stable. Peer Analysis Manisa 's 'bbb' SCP factors in Ankara's comparison with national and international peers in the same rating category. Ankara's IDRs are not affected by any other rating factors but are capped by the Turkish sovereign IDRs. Manisa's national peers all have 'Weaker' risk profiles, with varying SCPs according to their leverage ratios. The SCP is in the middle of the 'bbb' category, supported by a strong payback ratio at 1.9x in the 'aaa' category and an actual DSCR at 2.1x in the 'aa' category. Manisa's strong payback ratio is similar to those of international peers, such as the City of Almaty (Kazakhstan), and the State of Parana (Brazil). Its SCP is in line with Parana's (BB/Stable), Ankara Metropolitan Municipality's (BB-/Stable) and above that of Mersin Metropolitan Municipality (BB-/Stable) and Bursa Metropolitan Municipality (BB-/Stable), reflecting its stronger debt metrics. Issuer Profile Manisa has a population of nearly 1.5 million, 1.7% of the national total. It is the second-largest industrial and trade hub in the Aegean. It had a GDP per capita of TRY454,705 in 2024, with a buoyant local economy dominated by the industrial sector (43%), followed by services (41%) and agriculture (16%). Key Assumptions Qualitative assumptions: Risk Profile: 'Weaker' Revenue Robustness: 'Midrange' Revenue Adjustability: 'Weaker' Expenditure Sustainability: 'Weaker' Expenditure Adjustability: 'Midrange' Liabilities and Liquidity Robustness: 'Midrange' Liabilities and Liquidity Flexibility: 'Weaker' Financial Profile: 'aaa' Asymmetric Risk: 'N/A' Support (Budget Loans): 'N/A' Support (Ad Hoc): 'N/A' Rating Cap (LT IDR): 'BB-' Rating Cap (LT LC IDR) 'BB-' Rating Floor: 'N/A' Quantitative assumptions - Issuer Specific Fitch's rating action is driven by the following assumptions for reference metrics under its 2026-2030 rating case: - Payback ratio: 1.9x - Actual DSCR: 2.1x - Fiscal debt burden: 51.4% Fitch's through-the-cycle rating case incorporates a combination of revenue, cost and financial risk stresses. It is based on 2021-2025 published figures and its expectations for 2026-2030: - Operating revenue CAGR of 22.4% (62.6% year on year for 2021-2025) due to slowing nominal GDP growth of about 21% on average - Tax revenue CAGR of 22.7% (64.9% year on year in 2021-2025) - Current transfers CAGR of 22.5% (66.6% year on year in 2021-2025) - Opex CAGR of 25.9% (75.1% year on year for 2021-2025) due to expected slowing inflation of about 20% on average - Negative net capital balance totaling TRY10 billion on average - Apparent cost of debt on average 16.9%, above the average cost of debt in 2025, based on a higher share of local- currency borrowing - Average US dollar/Turkish lira assumptions based on Fitch's sovereign estimate for 2026 at 49.5 and for 2027 at 55, with an annual additional depreciation of 10% for 2028-2030 Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A downgrade of Turkiye's sovereign IDRs or a downward revision of Manisa's SCP resulting from a debt payback of more than 9x on a sustained basis would lead to a downgrade of the IDRs. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade of Turkiye's sovereign IDRs would lead to a similar rating action on Manisa's IDRs. Climate Vulnerability Signals The results of its Climate.VS screener did not indicate an elevated risk for Manisa. 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. Discussion Note Committee date: 03 June 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 Manisa's IDRs are capped by the Turkish sovereign. Entity/Debt Rating Prior ----------- ------ ----- 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 Natl LT AAA(tur) Affirmed AAA(tur) =========================== U N I T E D K I N G D O M =========================== ADVANCED FIRE: FRP Advisory Appointed as Joint Administrators ------------------------------------------------------------- Advanced Fire & Security Services Limited was placed into administration in the High Court of Justice, Business and Property Courts of England and Wales, Insolvency & Companies List (ChD), Court Number CR-2026-LDS-000513. Kelly Burton and Joseph Fox, both of FRP Advisory Trading Limited, were appointed as Joint Administrators on May 27, 2026. The company is into fire & security services. Its registered office and principal trading address is 18 Acorn Industrial Park, Crayford Road, Crayford, DA1 4AL. Its registered office is to be changed to FRP Advisory Trading Limited, The Manor House, 260 Ecclesall Road South, Sheffield, S11 9PS). The Joint Administrators can be contacted at: Kelly Burton Joseph Fox FRP Advisory Trading Limited The Manor House 260 Ecclesall Road South Sheffield S11 9PS For further information, contact: Francesca Allott Tel: 0114 235 6780 Email: cp.sheffield@frpadvisory.com FRP Advisory Trading Limited BOLTON GARDENS: FRP Advisory Appointed as Joint Administrators -------------------------------------------------------------- Bolton Gardens (EG) Limited was placed into administration in the High Court of Justice, Business and Property Courts of England and Wales, Insolvency & Companies List (ChD), Court Number CR-2026-003881. David Hudson, Geoffrey Paul Rowley, and Simon Baggs, all of FRP Advisory Trading Limited, were appointed as Joint Administrators on May 27, 2026. The company engaged in the letting and operating of own or leased real estate. Its registered office and principal trading address is 134 Buckingham Palace Road, London, SW1W 9SA (to be changed to 2nd Floor, Abbey House, 32 Booth Street, Manchester, M2 4AB). The Joint Administrators can be contacted at: David Hudson Geoffrey Paul Rowley Simon Baggs FRP Advisory Trading Limited 110 Cannon Street London EC4N 6EU For further information, contact: Jason Sparrow Tel: 0161 833 3344 Email: cp.manchester@frpadvisory.com FRP Advisory Trading Limited CASTELL 2025-1 PLC: DBRS Confirms BB(low) Rating on Class F Notes ----------------------------------------------------------------- DBRS Ratings Limited (Morningstar DBRS) took the credit rating actions on the notes issued by Castell 2025-1 PLC (the Issuer) as follows: -- Class A Notes confirmed at AAA (sf) -- Class B Notes confirmed at AA (sf) -- Class C Notes confirmed at A (sf) -- Class D Notes confirmed at BBB (sf) -- Class E Notes confirmed at BB (sf) -- Class F Notes confirmed at BB (low) (sf) -- Class X1 Notes upgraded to AA (sf) from BB (high) (sf) CREDIT RATING RATIONALE The credit rating actions follow an annual review of the transaction and are based on the following analytical considerations: -- Portfolio performance, in terms of delinquencies, defaults, and losses as of 31 March 2026 (corresponding to the April 2026 payment date); -- Portfolio default rate (PD), loss given default (LGD), and expected loss assumptions on the remaining receivables; and -- Current available credit enhancement (CE) to the notes to cover the expected losses at their respective credit rating levels as of the April 2026 payment date. The transaction is securitisation of second-lien mortgage loans backed by owner-occupied properties and originated by UK Mortgage Lending Limited (UKML, formerly Optimum Credit Limited). UKML is a specialist UK second charge mortgage lender based in Cardiff, which has offered finance to homeowners in England, Wales and Scotland since its launch in November 2013. Pepper UK Limited is the primary and special servicer of the portfolio. PORTFOLIO PERFORMANCE As of March 31, 2026, loans two to three months in arrears and loans more than three months in arrears represented 0.6% and 1.3% of the outstanding portfolio balance, respectively, up from 0.3% and 0.3%, respectively, at closing. Cumulative losses were 0.0%. PORTFOLIO ASSUMPTIONS AND KEY DRIVERS Morningstar DBRS conducted a loan-by-loan analysis of the remaining pool of receivables and updated its base-case PD and LGD assumptions at the B (sf) credit rating level to 5.3% and 46.7%, respectively, compared to 4.4% and 49.7%, respectively, at closing. The increase in PD reflects the performance deterioration since closing as well as the switch of fixed rate loans to a floating rate, while the decrease in LGD follows the update of the "European RMBS Insight Methodology" and European RMBS Insight Model on January 29, 2026. Changes to the methodology/model include a revised home price approach and revised loss given default floor levels. CREDIT ENHANCEMENT As of the April 2026 payment date, CE levels to the Class A to F Notes had increased since closing, as follows: -- CE to Class A Notes at 30.3%, up from 24.6%; -- CE to Class B Notes at 20.0%, up from 16.3%; -- CE to Class C Notes at 14.7%, up from 11.9%; -- CE to Class D Notes at 9.4%, up from 7.7%; -- CE to Class E Notes at 5.0%, up from 4.1%; and -- CE to Class F Notes at 3.7%, up from 3.0%. CE to the Class A to F Notes is provided by the subordination of the respective junior notes. The Class X1 Notes do not benefit from hard credit enhancement and are redeemed through available excess spread. The upgrade on the Class X1 Notes is driven by its deleverage since closing; as of the April 2026 payment date, Class X1 Notes' outstanding balance represents 35.5% of its initial balance. The transaction benefits from a liquidity reserve fund (LRF), which covers senior fees, swap payments, and interest on the Class A and Class B Notes. The LRF is currently at its target level of approximately GBP 2.7 million, equal to 1.0% of the outstanding Class A and Class B Notes' balances before payments. Citibank N.A., London Branch (Citibank London) acts as the account bank for the transaction. Based on the Morningstar DBRS private credit rating on Citibank London, the downgrade provisions outlined in the transaction documents, and other mitigating factors inherent in the transaction structure, Morningstar DBRS considers the risk arising from the exposure to the account bank to be consistent with the credit rating assigned to the Class A Notes, as described in Morningstar DBRS' "Legal and Derivative Criteria for European and Asia-Pacific Structured Finance Transactions" methodology. Lloyds Bank Corporate Markets PLC (Lloyds) acts as the swap counterparty for the transaction. Morningstar DBRS' private credit rating on Lloyds is above the first credit rating threshold as described in Morningstar DBRS' "Legal and Derivative Criteria for European and Asia-Pacific Structured Finance Transactions" methodology. Morningstar DBRS' credit ratings on the applicable classes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. Where applicable, a description of these financial obligations can be found in the transaction's respective press releases at issuance. Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued. Notes: All figures are in British pound sterling unless otherwise noted. JERROLD FINCO: Fitch Rates GBP300MM 8.5% Second Lien Notes 'BB-' ---------------------------------------------------------------- Fitch Ratings has assigned Jerrold Finco Plc's (Finco) GBP300 million issues of 8.5% second-lien secured notes due 2032 (ISINs: XS3310369601, XS3309691999) a final rating of 'BB-'. Finco is a finance subsidiary of the UK mortgage provider Together Financial Services Limited (BB/Stable). The final rating is in line with the expected rating Fitch assigned to the notes on 21 April 2026 (see "Fitch Rates Together's Proposed Second-Lien Secured Notes 'BB-(EXP)'). Key Rating Drivers Guaranteed by Together; Second-Lien Collateral: The second-lien secured notes are guaranteed by Together and by all material operating subsidiaries other than those supporting its securitisation structures. Together's Long-Term Issuer Default Rating (IDR) therefore acts as an anchor for the rating of the second-lien secured notes. Notched Down from Long-Term IDR: Together's funding structure includes a total GBP950 million of higher-ranking senior secured notes due 2030 and 2031, each also issued by Finco and rated 'BB', an undrawn GBP142.5 million revolving credit facility and GBP6.4 billion of securitisation facilities at end-March 2026 (3QFY26). Fitch notches the second-lien secured notes down once from Together's IDR and from the rating of the existing 2030 and 2031 senior secured notes, in view of their junior security position, which negatively affects Fitch's view of their recovery prospects compared with the rated senior secured notes. No Underlying Leverage Impact: Together has used the proceeds of the second-lien senior secured notes to repay its GBP380 million 6.75% senior payment-in kind (PIK) toggle notes (rated B+) issued by Together's indirect parent, Bracken Midco1 Plc (Midco1). Fitch had taken Midco1's debt into account when assessing Together's leverage, as Midco1 was reliant on Together to service its obligations. Positioning the replacement debt within Together itself means this is no longer necessary. The redemption of the PIK toggle notes entailed upstreaming a dividend from Together, reducing its reported equity by GBP313.4 million. Combined with the repayment of subordinated shareholder debt, to GBP41.5 million of which Fitch had assigned equity credit, this leads to an increase in Fitch-calculated pro forma debt/tangible equity ratio to 8.0x from the reported 5.9x at end-March 2026. However, given the simultaneous removal of the debt at the Bracken Midco1 level, Fitch does not regard this as affecting the group's underlying leverage, as reflected in the group's leverage sensitivity. Niche Segments; Low LTVs: Together's Long-Term IDR reflects its long-established franchise in UK specialised secured lending, supported by its conservative loan-to-value (LTV) approach and increasingly diversified funding profile. These strengths are balanced by inherent risks in non-standard lending, increased leverage from pre-2024 periods and reliance on confidence-sensitive wholesale funding, albeit with recently improved maturity and liquidity profiles. Improved Performance: Together's pre-tax profit grew by 11% year-on-year to GBP165 million in 9MFY26, increasing annualised pre-tax income/average assets to 2.6% from 2.4% in FY25. Together's impaired loans ratio, defined as IFRS 9 stage 3 loans to gross loans, reduced to 9.9% at end-3QFY26 from 11.0% at FYE25. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The senior unsecured notes' rating is principally sensitive to changes in Together's Long-Term IDR, which could in turn be driven by the following: - Higher-than-expected pressure on collections or customer appetite for Together's products - A reduction in the value of collateral relative to loan exposures - Weakened profitability with a pre-tax profit/average total assets ratio approaching 1% - An increase in Fitch-calculated consolidated leverage to above 10x, or a reduction in the coverage of Together's senior secured debt by available assets to close to 80% (currently around 70% pro forma for the transaction) - A significant depletion of Together's immediately accessible liquidity buffer, for example, through reduced funding access or a need for Together to inject cash or eligible assets into its securitisation vehicles to avoid covenant breaches driven by weakening asset quality - Material decrease in recovery expectations could also lead Fitch to widen the notching between Together's IDR and the second-lien secured notes' rating Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - The second-lien secured notes' rating could be upgraded on improved recovery expectations - Continued franchise growth and diversification, if achieved without deterioration in profitability or leverage, could also lead to an upgrade of the IDR 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 ----------- ------ ----- Jerrold Finco Plc Senior Secured 2nd Lien LT BB- New Rating BB-(EXP) LOWNDES SQUARE: FRP Advisory Appointed as Joint Administrators -------------------------------------------------------------- Lowndes Square (HW) Limited was placed into administration in the High Court of Justice, Court Number CR-2026-003897. David Hudson, Geoffrey Paul Rowley, and Simon Baggs, all of FRP Advisory Trading Limited, were appointed as Joint Administrators on May 27, 2026. The company specialized in buying and selling of own real estate and letting and operating of own or leased real estate. Its registered office is 134 Buckingham Palace Road, London, SW1W 9SA (to be changed to c/o FRP Advisory Trading Limited (Aberdeen Office), 110 Cannon Street, London, EC4N 6EU). Its principal trading address is 134 Buckingham Palace Road, London, SW1W 9SA. The Joint Administrators can be contacted at: David Hudson Geoffrey Paul Rowley Simon Baggs FRP Advisory Trading Limited 110 Cannon Street London EC4N 6EU Further information: Tel: 0330 055 5455 Tel: 0330 055 5482 Email: cp.aberdeen@frpadvisory.com Contact: Courtney Cormack FRP Advisory Trading Limited MAREX GROUP: Fitch Rates USD500MM Sub. Notes 'BB' ------------------------------------------------- Fitch Ratings has assigned Marex Group Plc's (BBB-/Positive) USD500 million perpetual subordinated resettable fixed-rate notes (ISIN: XS3388192935) a final rating of 'BB'. The final rating is in line with the expected rating assigned on 1 June 2026 (see 'Fitch Rates Marex's Subordinated Hybrid Perpetual Notes 'BB(EXP)'). Marex's other issuer and debt ratings are unaffected by this rating action. Key Rating Drivers Notching From IDR: The hybrid notes are rated two notches below Marex's Long-Term Issuer Default Rating (IDR) of 'BBB-', reflecting their status as deeply subordinated perpetual obligations and Fitch's expectation of poor recoveries. The notes, to which Fitch has assigned 50% equity credit, will rank junior to all senior obligations of Marex and senior only to the company's ordinary and preferred share capital. Pari Passu with Existing AT1: The hybrid notes will rank pari passu with Marex's outstanding USD100 million 13.25% fixed-rate reset perpetual subordinated contingent convertible notes (AT1 securities). The AT1 securities are perpetual, have no fixed maturity, and feature fully discretionary, non-cumulative interest payments. The AT1 securities are also subject to equity conversion if the group's regulatory capitalisation falls below a certain threshold. Use of Proceeds: Proceeds of the issue are being used for general corporate purposes, which may include the funding of acquisitions and repurchase of any or all the outstanding AT1 securities. Optional Interest Deferral: The hybrid notes permit optional interest deferral at Marex's discretion. Deferred interest will accumulate, remain payable in cash, and itself accrue interest. Any decision to defer interest will not constitute an event of default. 50% Equity Credit: Fitch has assigned 50% equity credit to the hybrid issue under its Corporate Hybrids Treatment and Notching Criteria, reflecting the cumulative and compounding nature of the interest deferral feature. Fitch views cumulative hybrids, under which deferred coupons accrue interest and must be paid at a later date, as less equity-like than non-cumulative hybrids that allow coupons to be forgone permanently. Call Date Not Effective Maturity: Fitch does not view the first call date, six years after issue, as an effective maturity date. This is because it is not accompanied by a coupon step-up until 2052, when a 1% step-up is expected to apply. Under Fitch's Corporate Hybrids Treatment and Notching Criteria, a call date is generally considered an effective maturity date only if it is paired with a sufficiently strong economic incentive to redeem with a step-up of more than 1%. No Material Impact on Leverage: The assignment of 50% equity credit means Fitch does not expect the hybrid issue to result in any material deterioration in Marex's leverage metrics. Limited Circumstances for Early Redemption: The hybrid notes are redeemable only in limited circumstances, including certain tax events, accounting events or changes in the rating agency treatment of hybrid securities, which Fitch does not regard as resulting in an effective maturity. Marex may also elect to redeem the notes early if its planned re-domiciliation to Bermuda does not materialise. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The hybrid notes' rating could be downgraded if Marex's Long-Term IDR was downgraded (for sensitivities on Marex's IDR see " Fitch Affirms Marex at 'BBB-'; Outlook Positive" dated 27 April 2026. Adverse changes to Fitch's assessment of going-concern loss absorption or recovery prospects for hybrid debt in a default, such as the introduction of features resulting in easily triggered going-concern loss absorption or a permanent write-down of the principal in wind-down, could also result in a widening of the notching for the hybrid notes' rating to more than two notches below Marex's Long-Term IDR. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The hybrid notes' rating could be upgraded if Marex's Long-Term IDR was upgraded. Date of Relevant Committee 15 May 2026 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 ----------- ------ ----- Marex Group Plc junior subordinated LT BB New Rating BB(EXP) PEPCO GROUP: Fitch Alters Outlook on 'BB' Long-Term IDR to Positive ------------------------------------------------------------------- Fitch Ratings has revised the Outlook on Pepco Group N.V's Long-Term Issuer Default Rating (IDR) to Positive from Stable and affirmed the IDR at 'BB'. The Positive Outlook reflects its expectation that Pepco will continue to generate healthy free cash flow (FCF) and retain conservative credit metrics, based on its reformulated financial policy, which provides more clarity regarding the remuneration of shareholder IBEX and the company's path to value creation. Progress in simplifying the product portfolio and operations have strengthened profitability and growth potential. Fitch sees scope for an upgrade if management demonstrates that execution risks remain controlled and balance sheet management conservative, despite a steady openings and new market entries in a competitive, crowded trading environment and a more generous shareholder remuneration policy. The IDR reflects scale and leading market positions in central and eastern Europe (CEE) with a value-oriented positioning aligned with favourable demand dynamics, and geographic diversification. Key Rating Drivers Product and Portfolio Rationalisation Positive: Under new management, Pepco has divested (or agreed to divest) the two loss-making units Poundland and Dealz, removing their profit diluting effect and reducing exposure to the lower profit fast moving consumer goods (FMCG) category, which previously represented about a third of its revenues but affected profit margin. It has also exited the loss-making Eastern German market, rationalised part of its store portfolio in Poland by relocating about 100 stores and rationalised its Spanish stores that were offering FMCG products. This process has reduced product diversification but Fitch views it as supportive of a stronger business profile and margin trajectory, having sharpened focus on the core Pepco clothing and general merchandise format. The EBITDAR margin rose to a strong 19.4% in FY25 (financial year ending September; FY22-FY24: 14% on average) and Fitch expects this to be sustainable, growing towards 21% by FY28. Strong FCF Generation: Capex should remain limited at around EUR150 million-EUR200 million a year, despite the intense pace of store openings, thanks to the limited cost of store fittings, average small size of surfaces occupied (500 square metres) and lease-based management of properties with flexible rents. The dividend payout ratio increased to 25% in FY25 from 20% in FY24, and the board intends to progressively raise it toward 40% of underlying profit after tax. Fitch projects annual FCF will increase to EUR200 million, led by earnings expansion, leaving sufficient resources to further remunerate shareholders while maintaining conservative credit metrics. Adequate Leverage; Weak Coverage: The announced expansion of shareholder distributions clarifies how shareholders will be remunerated and provides visibility around EBITDAR net leverage and fixed charge cover metrics, which Fitch expects to stabilise at 2.0x and towards 2.5x, respectively, across the rating horizon. Fitch considers these overall appropriate for the rating, given Pepco's updated financial policy and execution risks in its expansion strategy in a highly competitive operating environment. The leverage calculation includes IFRS16 reported liabilities, capitalised using a weighted average multiple of 3.2x. Shareholder Returns Increased: Pepco's enhanced shareholder return policy is likely to limit improvement in net leverage. It plans to use internal cash and a modest increase in gross debt to fund an additional one-time pro-rata tender buyback of up to EUR400 million in FY26, bringing total buyback in the year to EUR550 million. From FY27, Pepco plans to return all prior-year excess levered FCF to shareholders after strategic investment, subject to maintaining conservative leverage and liquidity, through a mix of regular dividends, further share buybacks and special dividends. Aggressive Growth in Competitive Market: Pepco expanded aggressively over 2022-2024 and still plans to open 1,200 more stores by 2030. Discount store formats have been experiencing rapid growth in Europe, benefiting from trading down by consumers and growth of immigrant population. These retailers compete to occupy space in retail parks, periphery neighbourhoods and malls in a race to grow with market entries that may lead to negative cash flow due to insufficient critical mass, large investments for store openings and aggressive promotional price strategies. Pepco's failure in recent expansion into Germany highlights the risks from weak site selection and uneven rollout. Expansion Focuses on Western Europe: Pepco is accelerating store expansion in Spain, Portugal and Italy, supported by attractive returns on investment and better store economics after the FMCG exit. Expansion in Western Europe offers a meaningful medium-term growth opportunity, but Fitch views execution risks as higher than in Pepco's core CEE markets due to the higher cost of labour and the still less established profile of the company in these markets, despite a significant increase in brand awareness in Spain and Italy. Ring-fencing from Owner: Fitch rates Pepco on a standalone basis and do not anticipate adverse impact from its majority owner IBEX. IBEX has reduced ownership over past years in conjunction with a recovery in Pepco's share price. Pepco group does not guarantee or provide security to creditors lending above Pepco. There is no cross-default between the entities. The governance framework regulating the relationship between Pepco and entities above it ensures transactions in the best interests of Pepco and at arm's length. The new borrowing documentation removed covenant limitations to dividend distributions, but Fitch expects sufficient cash flow for the updated financial policy. Peer Analysis Pepco is smaller than European discounter Action, similar to B&M European Value Retail S.A. and larger than Netherlands-based Hema. Discounters are growing strongly and have good profit margins. Compared with Fitch-rated non-food retail peers, Pepco is smaller (by revenue) than Ceconomy AG (BB/Rating Watch Positive), the largest electronics retailer in Europe, FNAC Darty SA (BB+/Stable), and Kingfisher plc (BBB/Stable), the largest DIY group in the UK and Poland. These three have more established business profiles and although they have suffered from the contraction of discretionary spending in Europe, they have benefited from measures introduced to react to the more difficult trading environment. Pepco has noticeably stronger growth and profit margins than all of these peers, with profitability expected to improve even further following the planned exit from FMCG. Fitch projects Pepco will have marginally higher EBITDAR net leverage (1.8x in FY25) than Kingfisher plc (1.6x) and Ceconomy (1.5x), following the anticipated increase in gross debt. Pepco's forecast EBITDAR fixed-charge cover, of just under 2.5x, remains superior to both FNAC and Ceconomy, but still weak for the rating. Fitch’s Key Rating-Case Assumptions - Dealz divested at end-FY26, with the brand contributing revenue of just over EUR300 million and Fitch-calculated EBITDAR of zero in the 12 months prior to disposal - Annual Pepco revenue growth of 6.1-7.6% from FY26-FY29, driven by average like-for-like (LFL) revenue growth across all regions of 2.8-3.2% and annual store network growth of 6.1-6.6% - EBITDAR margin to increase to about 20.4% in FY26 from 19.0% in FY25, driven primarily by the growth of the gross margin, followed by further improvement of the margin in FY27 stemming from the divestment Dealz - Working capital outflow of around EUR50 million in FY26, decreasing to about EUR20 million by FY29 - Further utilisation of the supply chain finance facility (by EUR30-50 million a year), with half of it treated as debt - Annual capex of EUR150-180 million, peaking in FY26 - Dividends of just over EUR50 million in FY26, increasing to 40% of profit after tax thereafter - FY26 share buybacks of EUR550 million, with FCF generated in the following years used for further buybacks - Further debt issuance of just under EUR200 million in 4QFY26 at terms comparable with the instruments raised in October and November 2025 - Lease liabilities continuing to be capitalised in debt with a 3.2x multiple Corporate Rating Tool Inputs and Scores Fitch scored the issuer as follows, using its CRT to produce the SCP: - Business and financial profile factors (assessment, relative importance): Management (bb, Moderate), Sector Characteristics (bbb-, Moderate), Market and Competitive Positioning (bb+, Higher), Diversification and Asset Quality (bb, Moderate), Company Operational Characteristics (bbb-, Lower), Profitability (bbb, Moderate), Financial Structure (a-, Lower), and Financial Flexibility (bb-, Higher). - 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 Standalone Credit Profile is 'bb'. To derive the Long-Term IDR: Fitch made no adjustments to the SCP, resulting in an IDR of 'BB'. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - LFL sales decline, loss of market share, unsuccessful expansion or inability to manage cost inflation, leading to weaker profitability, and reduced deleveraging capacity - EBITDAR net leverage above 3.0x on a sustained basis - EBITDAR fixed-charge coverage below 2.0x on a sustained basis - Persistently negative or low visibility of FCF due to underperformance, continued accelerated expansion without yielding returns, or large shareholder distributions leading to shrinking liquidity headroom Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Successful execution of strategy in sustaining LFL sales growth and managing cost inflation while protecting profitability, leading to rising EBITDAR towards EUR1 billion - Positive FCF, after growth capex and dividends - EBITDAR net leverage below 2.0x on a sustained basis combined with a maintained prudent financial policy - (CFO less capex)/debt sustainably in the high teens - EBITDAR fixed charge coverage trending towards 2.5x on a sustained basis Liquidity and Debt Structure At end-March 2026, Pepco had comfortable available liquidity, comprising reported cash on balance sheet of around EUR464 million, with a EUR300 million undrawn committed revolving credit facility. The nearest maturity is November 2028. Issuer Profile Pepco is a clothing and general merchandise discounter operating across Europe, with around 4,300 stores in 19 countries. Its largest market is Poland. 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 Pepco. 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. SIG PLC: S&P Lowers LongTerm ICR to 'B-', Outlook Stable -------------------------------------------------------- S&P Global Ratings lowered its long-term issuer credit and issue ratings on SIG PLC to 'B-' from 'B'. The '3' recovery rating on SIG's senior secured debt remains unchanged, reflecting its expectation of a meaningful recovery (estimated at approximately 50%) in the event of a default. S&P said, "The stable outlook reflects our view that although we expect SIG to generate negative FOCF after lease payments, we expect the S&P Global Ratings-adjusted debt to EBITDA to remain at about 6.0x due the modest EBITDA growth forecast mostly offsetting the increase in debt over our forecast period." S&P said, "We anticipate that subdued demand and pricing pressures within the European building materials sector will persist in 2026. "We forecast that the U.K.-based building materials distributor SIG PLC will achieve adjusted EBITDA of about GBP104 million-GBP108 million in 2026 and GBP112 million-GBP116 million in 2027--lower than our previous forecast of GBP125 million-GBP130 million in 2026. In combination with significant annual lease obligations and capital expenditures (capex), we expect this will result in a negative free operating cash flow (FOCF) after lease payments in both years. "We downgraded SIG to a 'B-' driven by our expectation that the company will generate negative FOCF after lease payments in 2026 and 2027. This anticipated deficit stems from a combination of subdued EBITDA, capex of GBP18 million-GBP22 million, and approximately GBP70 million in annual lease obligations. Although the company achieved moderately positive FOCF after lease payments in 2025, this was primarily due to sizable working capital inflow of GBP26.3 million which we do not expect to be an ongoing feature. Consequently, while the company's year-end 2025 cash balance of approximately GBP81 million and a GBP90 million revolving credit facility (RCF) should provide sufficient liquidity to manage the 2026 deficit, we think that persistent cash burn could eventually strain financial flexibility. Under our base case, achieving sustainably positive FOCF after lease payments would require adjusted EBITDA to recover to at least GBP140 million-GBP150 million, a target that remains highly dependent on external market drivers and a significant turnaround of underperforming branches, which we currently view unlikely. "Due to a protracted cyclical low in the European building materials sector, we expect SIG's operating performance to remain under pressure in the near term. The business navigated a tough trading environment in 2025, where revenue remained largely flat at GBP2,591 million, representing a marginal 0.8% year-over-year decline. This underperformance was evident as SIG's adjusted EBITDA of GBP104.2 million fell short of our expectations of GBP113.4 million, reflecting continued price pressure and a number of branch closures. This contraction continued into first-quarter 2026, with like-for-like sales declining by 5% and overall revenue down 3%. These headwinds were exacerbated by unseasonably poor weather in early 2026 and geopolitical instability regarding the conflict in Iran, which introduces significant uncertainty into energy prices and broader European demand dynamics. Although we anticipate modest revenue growth of 1.5%-2% in 2026 and 2%-3% in 2027, top line evolution will remain dependent on broader economic factors, largely outside of the company's control. "Despite these top-line challenges, SIG has demonstrated an ability to protect profitability through aggressive internal cost-efficiency and restructuring initiatives. In 2025, the company achieved a 50 basis point improvement in its adjusted EBITDA margin, rising to 4.0% from 3.5% in 2024, primarily driven by the realization of approximately GBP39 million in operating cost savings through headcount reductions and enhanced procurement discipline. We forecast adjusted EBITDA to reach about GBP104 million-GBP108 million in 2026 and about GBP112 million-GBP116 million in 2027, supported by the continued execution of the "Vision 2030" strategy, announced in January 2026, and the benefits of recent branch closures. The company's "Vision 2030" announced in January aims to improve SIG's operating performance through further cost cutting and efficiency programs as well as improved procurement. The company will also continue investing in local market outperformance, and aim to simplify and optimize the current portfolio to leverage on the most attractive markets. The ability to translate "Vision 2030" and internal efficiencies into meaningful bottom-line growth will be tested by the necessity of maintaining competitive pricing in a tough operating environment and the potential for volatile oil and gas prices to drive near-term increases in input costs. "We anticipate that SIG's leverage will remain elevated as a significant portion of operating earnings is absorbed by mandatory lease payments and capex. We forecast the adjusted debt-to-EBITDA ratio will remain about 6.0x from 6.2x in 2025, based on EBITDA growth driven primarily by the benefits of branch restructuring and cost efficiencies. While we expect leverage to eventually stabilize, the immediate credit outlook is dominated by the need to manage the cash balance, which we expect to decline from GBP81 million at year-end 2025 to approximately GBP67.5 million by March 2026. "The stable outlook reflects our view that although we expect SIG to generate negative FOCF after lease payments we expect the adjusted debt to EBITDA to remain at about 6.0x due the modest EBITDA growth forecast, mostly offsetting the increase in debt over our forecast period. "We could downgrade SIG if we think that the forecast EBITDA growth will no longer be realized and that the capital structure of SIG is unsustainable. We could also lower the rating on SIG if we think that liquidity will become a concern for the company." S&P could raise the ratings on SIG PLC if: -- S&P forecasts that the company's FOCF after lease payments will become sustainably positive. This could occur if margins improve through further cost-cutting measures combined with a recovery in the building construction industry; and -- Adjusted debt to EBITDA remains below 6.5x on a sustainable basis; and -- Liquidity position is maintained along with the adequate covenant headroom. SMOKE & FIRE: CBA Business Appointed as Joint Administrators ------------------------------------------------------------ Smoke & Fire Curtains Limited was placed into administration in the High Court of Justice, Business and Property Court in Manchester, Company and Insolvency List, Court Number CR-MAN-000764. Steven Glanvill and Neil Charles Money, both of CBA Business Solutions Limited, were appointed as Joint Administrators on May 29, 2026. Smoke & Fire Curtains specialized in the design, manufacture, installation, and servicing of bespoke, certified fire and smoke barrier systems for domestic, commercial, and industrial properties. The company's registered office is T03 Afltd The Atkins Building, Lower Bond Street, Hinckley, LE10 1QU. The Joint Administrators can be contacted at: Steven Glanvill Neil Charles Money CBA Business Solutions Limited 126 New Walk Leicester LE1 7JA For further information, contact: Steven Glanvill Tel: 0116 262 6804 Email: steven.glanvill@cba-insolvency.co.uk CBA Business Solutions Limited TOGETHER ASSET 2026-1: DBRS Finalizes (P)BB(low) Rating on X Notes ------------------------------------------------------------------ DBRS Ratings Limited (Morningstar DBRS) finalised provisional credit ratings to the bonds issued by Together Asset Backed Securitisation 2026-1 CRE-6 PLC (the Issuer) as follows: -- Loan Notes at AAA (sf) -- Class A Notes at AAA (sf) -- Class B Notes at AA (high) (sf) -- Class C Notes at A (high) (sf) -- Class X Notes at BB (low) (sf) Morningstar DBRS does not rate the Class Z Notes or the residual certificates also issued in this transaction. CREDIT RATING RATIONALE The transaction represents the issuance of mortgage-backed securities backed by small-balance commercial assets originated by Together Commercial Finance Limited (TCFL), which is part of Together Financial Group (Together), a UK specialist provider of property finance. TCFL services the portfolio, while BCMGlobal Mortgage Services Limited acts as the standby servicer. This is the sixth public securitisation backed by small-balance commercial assets from Together. The initial mortgage portfolio consists of GBP 541.9 million of first- and second-lien mortgage loans secured by owner-occupied (OO) (fully or partially) or non-OO commercial, mixed-use, and residential properties in the UK. The portfolio contains fixed-rate loans with a compulsory reversion to a floating rate in the future (73.8%), with the remaining 26.2% paying a floating rate linked to the Together Commercial Managed Rate). To hedge the interest rate mismatch arising from the fixed-rate mortgage loans and the liabilities that pay a coupon linked to Sterling Overnight Index Average, the Issuer entered into two fixed-to-floating interest rate swaps. The swap providers appointed at closing are HSBC Bank plc and NatWest Markets Plc. Furthermore, Citibank N.A., London Branch act as the Issuer Account Bank, and National Westminster Bank Plc is appointed as the Collection Account Bank. A liquidity facility (LF) is available from closing to cover shortfalls on senior expenses and interest payments on the Class A Notes, the Loans Notes and, when most senior, the Class B Notes. The LF target is equal to 1.7% of the Class A Notes and Loan Notes balance at closing and then amortises at the higher of 1.7% of the outstanding Class A Notes and Loan Notes and 1% of the outstanding Class B Notes. The target will be zero after the Class B Notes have redeemed in full. After the step-up date, a liquidity reserve fund (LRF) will be funded via both the principal and revenue waterfalls. However, most of the funding is likely to come out of principal receipts since the funding of the LRF is more senior in the principal waterfall than it is in the revenue waterfall. Once the LRF starts to build up, the LF will start to decrease so that the sum of the LF and LRF will always be at target (i.e., the higher of 1.7% of the outstanding Class A Notes and 1% of the outstanding Class B Notes). The LRF will not be part of the available revenue funds in its entirety; however, it will be available to cover senior fees including the servicing fees, the swap payments, as well as the interest payments on the Class A Notes and, when most senior, the Class B Notes. Principal borrowing is also envisaged under the transaction documentation and can be used to cover for interest shortfalls on the senior-most class of notes outstanding, in priority to the LF and LRF draws. Morningstar DBRS based its credit ratings on a review of the following analytical considerations: -- The transaction's capital structure, including the form and sufficiency of available credit enhancement; -- The credit quality of the mortgage portfolio and the servicer's ability to perform collection and resolution activities. Morningstar DBRS estimated stress-level probability of default (PD), loss given default (LGD), and expected losses (EL) on the mortgage portfolio. Morningstar DBRS used the PD, LGD, and EL as inputs into the cash flow engine. Morningstar DBRS analysed the mortgage portfolio in accordance with its "European RMBS Insight Methodology"; -- The transaction's ability to withstand stressed cash flow assumptions and repay the Loan Notes and the Class A, Class B, Class C, and Class X Notes according to the terms of the transaction documents; -- The structural mitigants in place to avoid potential payment disruptions caused by operational risk, such as a downgrade, and replacement language in the transaction documents; -- Morningstar DBRS' sovereign credit rating on the United Kingdom of Great Britain and Northern Ireland of AA with a Stable trend as of the date of this press release; and -- The expected consistency of the transaction's legal structure with Morningstar DBRS' "Legal and Derivative Criteria for European and Asia-Pacific Structured Finance Transactions" methodology and the presence of legal opinions that are expected to address the assignment of the assets to the Issuer. Morningstar DBRS' credit ratings on the rated notes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations are the related interest amounts and the related class balances. Morningstar DBRS' credit ratings on the Loan Notes, the Class A Notes, the Class B Notes, and the Class C Notes also address the credit risk associated with the increased rate of interest applicable to the respective notes if these are not redeemed on the Optional Redemption Date (as defined in and) in accordance with the applicable transaction documents. Morningstar DBRS' credit ratings do not address nonpayment risk associated with contractual payment obligations contemplated in the applicable transaction documents that are not financial obligations. Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued. Notes: All figures are in British pound sterling unless otherwise noted. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2026. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. 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