260622.mbx

260622.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 22, 2026, Vol. 27, No. 123 Headlines D E N M A R K WS AUDIOLOGY: Moody's Rates New Amended Sr. Secured Term Loan 'B3' F R A N C E CONSTELLIUM SE: S&P Affirms 'BB-' ICR & Alters Outlook to Positive LYNXEO HOLDING: Moody's Affirms 'B2' CFR, Outlook Remains Stable I R E L A N D ARBOUR CLO III: S&P Assigns Prelim. B- Rating on F-R-R Notes ARBOUR CLO XVI: Fitch Assigns 'B-sf' Final Rating on Class F Notes CVC CORDATUS XXXI: S&P Affirms B-(sf) Rating on Class F-2 Notes NEUBERGER BERMAN 6: S&P Assigns B-(sf) Rating on Class F Notes I T A L Y RINO MASTROTTO: Fitch Lowers LongTerm IDR to 'B', Outlook Negative L U X E M B O U R G MELLENU HOLDING: Moody's Assigns First Time B2 Corp. Family Rating MONITCHEM HOLDCO 3: S&P Rates New EUR600MM Secured Notes 'B-' N E T H E R L A N D S HOUSE OF HR: S&P Lowers ICR to 'B-' on Prolonged Market Weakness R U S S I A NAVOIYURAN: Fitch Alters Outlook on 'BB' IDR to Positive S W E D E N INTRUM AB: Moody's Upgrades CFR to B3 & Alters Outlook to Stable QUIMPER AB: Fitch Alters Outlook on 'B+' LongTerm IDR to Stable QUIMPER AB: Moody's Affirms 'B1' CFR & Alters Outlook to Negative T U R K E Y ISTANBUL METROPOLITAN: Fitch Affirms 'BB-' IDRs, Outlook Stable MERSIN METROPOLITAN: Fitch Affirms 'BB-' IDRs, Outlook Stable U N I T E D K I N G D O M BIRKENSTOCK HOLDING: Fitch Affirms 'BB+' IDR, Outlook Stable BIRKENSTOCK HOLDING: S&P Affirms BB+ ICR & Alters Outlook to Neg. BROOKING HIRE: Kroll Advisory Appointed as Joint Administrators CD&R FIREFLY: Moody's Rates Amended & Extended Loans 'B2' DRAX GROUP: S&P Affirms 'BB+' ICR & Alters Outlook to Stable ENQUEST PLC: Moody's Puts 'B3' CFR on Review for Upgrade EV METALS: BTG Begbies Appointed as Joint Administrators GRADEWELL PLANT: BTG Begbies Appointed as Joint Administrators HOPS HILL 6: Fitch Assigns 'BB+(EXP)sf' Rating on Class E Notes INNOVARO TECHNOLOGY: BTG Begbies Appointed as Joint Administrators LANDMARK MORTGAGE 3: S&P Affirms 'BB+(sf)' Rating on D Notes MUNIHIRE OPERATED: Kroll Advisory Appointed as Joint Administrators PEARL BRIDGING: S&W Partners Appointed as Joint Administrators PIERPONT BTL 2021-1: S&P Affirms 'BB+(sf)' Rating on E-Dfrd Notes RAY ACQUISITION: Moody's Alters Outlook on 'B2' CFR to Negative - - - - - ============= D E N M A R K ============= WS AUDIOLOGY: Moody's Rates New Amended Sr. Secured Term Loan 'B3' ------------------------------------------------------------------ Moody's Ratings has assigned B3 ratings to the proposed amended and extended senior secured term loan B and the senior secured revolving credit facility (RCF) due in 2032 and 2031, respectively and borrowed by WS Audiology A/S (WSA or the company). WSA's B3 long-term corporate family rating (CFR), the B3-PD probability of default rating (PDR) are unaffected. The positive outlook is also unaffected. The proposed transaction seeks to refinance the existing EUR-denominated Facility B7 (EUR1,900 million) and USD-denominated Facility B9 ($1,074.17 million), to repay outstanding drawings under the existing RCF, and to extend the maturity of all senior secured facilities by three years (RCF maturity from 2028 to 2031, and term loan maturities from 2029 to 2032). The new term loans are also expected to be upsized by up to EUR100 million in aggregate, with the proceeds primarily used to repay RCF drawings and add a marginal amount of cash to balance sheet. Overall, Moody's views the transaction as broadly leverage-neutral, while materially extending the group's debt maturity profile. RATINGS RATIONALE The B3 CFR of WSA reflects the company's prominent position in the global hearing aid market; its operations in a low-cyclical demand industry with steady growth; its strong diversification across geographies, with presence in all continents; its various distribution channels to end users, including retail chains, independent dispensers and public sector bodies; and its diversified brand portfolio, with a wide range of technologies. Concurrently, WSA's rating is constrained by its still-weak credit metrics. The company's leverage, measured as its Moody's-adjusted debt/EBITDA, remains high at 6.4x as of the end of March 2026, but is expected to trend towards 6x over the next 12 months. The rating also incorporates the risks associated with technological advancements, pricing competition, and the risk of debt-funded acquisitions, which could delay leverage reduction. LIQUIDITY WSA's liquidity is good. As of March 31, 2026, it had EUR110 million in cash and EUR250 million available under the EUR350 million revolving credit facility (RCF). Over the next 12-18 months, Moody's forecasts annual FCF generation in the EUR50 million - EUR100 million range, driven by EBITDA growth and lower interest costs. The RCF includes a springing secured net leverage covenant set at 9.17x, tested only when the RCF is drawn above 40%. Moody's estimates sufficient capacity in the covenant in case the RCF is used. STRUCTURAL CONSIDERATIONS The new senior secured term loans and the senior secured RCF are rated B3, in line with the CFR. The B3-PD probability of default rating, in line with the B3 CFR, reflects Moody's 50% family recovery assumption. The instruments share the same security package, rank pari passu and are guaranteed by a group of companies representing at least 80% of the consolidated group's EBITDA. The security package, consisting of shares, bank accounts and intragroup receivables, is considered limited. COVENANTS Moody's have reviewed the marketing draft terms for the new credit facilities. Notable terms include the following: Guarantor coverage will be at least 80% of consolidated EBITDA (determined in accordance with the agreement) and include all wholly-owned group companies representing 5% or more of consolidated EBITDA. Security will be granted over material intercompany receivables of the Parent and each Obligor, shares in each Obligor and companies holding material intellectual property, and material bank accounts, and floating charges where available, other than in Denmark. Unlimited senior secured debt is up to senior secured net leverage ratio of 5.25x, and total debt subject to a fixed charge coverage ratio (FCCR) of 2.00x. Unlimited restricted payments are permitted subject to a net leverage ratio of 5.00x. Repayment of asset sale proceeds is not subject to a leverage test. Adjustments to consolidated EBITDA include anticipated cost savings, expense reductions and synergies reasonably expected to occur within 18 months, capped at 25% of EBITDA. RATIONALE FOR POSITIVE OUTLOOK The positive outlook reflects the improvement Moody's expects in the company's key credit metrics over the next 12 months. This improvement is likely to be driven by cost-improvement initiatives and continued revenue growth (in mid-single-digit percentages), with leverage declining towards 6x, free cash flow (FCF)/debt increasing towards 5% and the interest cover ratio improving towards 2x over the next 12 months. Moody's could change the outlook to stable from positive if the company fails to deliver on its business plan objectives over the next 12 months, including steady margin improvements, leverage reduction, positive FCF and enhanced interest coverage. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade WSA's rating if the company maintains its leading market position and improves its credit metrics, with its Moody's-adjusted debt/EBITDA decreasing to below 6.0x, Moody's-adjusted EBITA/interest expense improving above 2.0x and Moody's-adjusted FCF/debt improving to more than 5%, all on a sustained basis. Downward rating pressure could materialize if WSA experiences a decline in its market position or fails to maintain its Moody's-adjusted debt/EBITDA below 7.0x on a sustained basis; its Moody's-adjusted EBITA/interest does not improve above 1.25x; it generates negative FCF; or it experiences a deterioration in liquidity. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Medical Products and Devices published in October 2025. COMPANY PROFILE WS Audiology A/S (WSA) is among the global leaders in the hearing aid industry and operates in more than 125 countries. The company is privately owned by the Tøpholm and Westermann families, the Lundbeck Foundation, EQT-managed funds and Athos KG, a German healthcare-focused single family office that joined WSA as a minority shareholder in April 2025. As of the last 12 months that ended March 2026, WSA generated EUR2,499 million in revenue and EUR437 million in company-reported EBITDA. =========== F R A N C E =========== CONSTELLIUM SE: S&P Affirms 'BB-' ICR & Alters Outlook to Positive ------------------------------------------------------------------ S&P Global Ratings revised its outlook on aluminum company Constellium SE to positive from stable and affirmed the 'BB-' long-term issuer credit rating. The positive outlook reflects potential rating upside in the coming 12 months as Constellium continues to deliver on its guidance and build headroom under its financial policy. Recently Constellium revised up its guidance for 2026, and affirmed the execution of its "Vision 2028" program. In S&P's view, structural changes in the aluminum market in the U.S. and the resilient demand in the aerospace and packaging sectors are here to stay, leading it to revise up its over-the-cycle EBITDA for Constellium to about $850 million. Although EBITDA remains the main driver for the improvement in the company's credit metrics, the company will use some of its free cash flows to reduce its gross debt as announced during first quarter earnings. Management revised its 2026 guidance upward following a stronger-than-expected start to the year. It now expects segment adjusted EBITDA of $900 million-$940 million, excluding the non-cash impact of metal price lag, and free operating cash flow (FOCF) in excess of $275 million. The improved guidance reflects: -- Continued strength in aerospace demand supported by record aircraft backlogs and rising production rates, -- Favorable market conditions for North American automotive rolled products amid ongoing supply shortages, -- Resilient packaging demand, and -- Continued execution of operational improvement initiatives under the Vision 2028 program. S&P said, "We also believe the North American aluminum market has become structurally more supportive. This is reflected by the current elevated U.S. Midwest Aluminum Premium, constrained supply of automotive rolled products, and favorable scrap spreads supporting earnings resilience. These factors contributed to a record underlying EBITDA of $262 million, this single quarter result is equivalent to close to 50% of the full-year 2024 underlying EBITDA of $569 million. We forecast S&P Global Ratings-adjusted EBITDA of about $850 million in 2026 and exceeding $920 million in 2027." Strong aerospace demand and favorable positioning in higher-value applications support improved earnings visibility. The aerospace and transportation segment remains the main driver of earnings growth. Constellium benefits from longstanding relationships with major aerospace customers, including Airbus, and participates in highly engineered applications that command attractive margins. Management continues to report robust demand across aerospace applications, supported by large commercial aircraft production backlogs and gradually improving supply-chain conditions. S&P expects aerospace volumes to continue increasing over the next several years as aircraft manufacturers gradually raise production rates. The company also benefits from long-term contractual relationships and proprietary products across aerospace, defense, space, and other specialized applications, providing good earnings visibility. In packaging and automotive rolled products, Constellium continues to benefit from a favorable product mix, resilient packaging demand, and ongoing shortages of automotive body sheet in North America. In the automotive segment, while facing competition from lower-cost producers, Constellium benefits from the transition toward fuel efficiency and the potential for growth in the electric vehicle (EV) space via new battery foil projects. Overall, the company's long-term contract structures (five to seven years in automotive) and energy cost hedging provide good visibility on earnings. Additionally, while European automotive markets remain challenged, North American conditions remain supportive and provide a meaningful earnings contribution. S&P said, "We expect Constellium to maintain a disciplined financial policy that balances shareholder returns, growth investments, and continued deleveraging. We forecast S&P Global Ratings-adjusted leverage will decline to approximately 3.0x in 2026 and 2.5x in 2027, supported by stronger earnings and adjusted FOCF generation of approximately $313 million in 2026, compared with $124 million in 2025, with further improvement expected in 2027. In our view, structural improvements in the company's earnings profile have increased its through-cycle EBITDA potential to approximately $850 million, which should be sufficient to maintain leverage within management's stated financial policy range of company-defined leverage of 1.5x-2.5x (which more or less translates to our adjusted leverage of 2.5x-3.5x). Additionally, we expect the company to use a portion of its internally generated cash flow to reduce gross debt, while retaining sufficient financial flexibility to fund strategic growth investments and shareholder distributions. As a result, we believe Constellium has developed greater headroom through the cycle under both its financial policy and our rating sensitivities." The positive outlook reflects the company's ability to leverage the favorable market condition and accelerate the de-risking trajectory of the company's balance sheet. S&P said, "Under our base case, we forecast an adjusted EBITDA of about $900 million in 2026, and over $1 billion in 2027. According to our calculation this would bring the company's adjusted debt to EBITDA close to 3.0x (about 2.0x according to the company's definition). "We would revise the outlook back to stable, if the company's deleveraging momentum stalls or if the credit profile fails to demonstrate a clear path toward the 3.0x leverage threshold over the cycle." For example: -- A change in the company's capital allocation, with higher spending on capex or returns to shareholders, while prolonging the deleveraging journey. -- A sharp reduction in demand from key end markets (aerospace, packaging, industrial) or significant shifts in the U.S. trade/tariff landscape negatively impact shipment volumes and revenue visibility. S&P said, "We see potential for a higher rating as unlikely in the next 12 months. Over time, we could raise the rating by one notch if we believe Constellium can keep adjusted debt to EBITDA below 3.0x over the cycle. According to our calculations, such a scenario could be supported by adjusted EBITDA of about EUR850 million under normalized EBITDA and reported net debt of about EUR1.7 billion. "We could raise the rating over the next 12-18 months if Constellium meets the EBITDA for 2026, and is on track to report EBITDA of about $1 billion, supporting deleveraging with EBITDA positioned close to 2.5x (or better) at this current market conditions, or about 3.0x over the cycle." LYNXEO HOLDING: Moody's Affirms 'B2' CFR, Outlook Remains Stable ---------------------------------------------------------------- Moody's Ratings has affirmed the B2 Corporate Family Rating and the B2-PD probability of default rating of Lynxeo Holding SAS (Lynxeo or the company, formerly known as Financière Volta II SAS). Concurrently, Moody's also affirmed the B2 instrument rating of the EUR320 million senior secured term loan B (TLB) maturing in 2032 and the EUR70 million senior secured revolving credit facility (RCF) maturing in 2031, borrowed by Lynxeo Participations (formerly Financière Volta SAS). The outlook on both entities remains stable. RATINGS RATIONALE 2025 was a year of consolidation for Lynxeo. The rating affirmation takes into account the solid performance the company showed in 2025. Based on proforma data Moody's calculates an EBITA margin of 10.9%, leverage of 4.5x debt/EBITDA, interest cover of 3.0x EBITA / Interest expense and FCF / Debt of 4.2%, Moody's adjusted, credit metrics at the upper under of Moody's expectations for a B2 rating of Lynxeo. The B2 CFR takes comfort from (i) Lynxeo's established market position in selected niches of the industrial cables market, (ii) the mission critical nature of its products which is reflected in long-term customer relationships and which leads to customers stickiness, (iii) limited capital expenditures requirements over the next three years reflecting a well invested asset base, (iv) good diversification in terms of industries and geographies, (v) good revenue visibility from long-term frame contracts with blue chip customers and project business which support revenue planning and (vi) a leverage of 4.5x (Moody's-adjusted, calculated on pro-forma data for 2025), which is relatively moderate for a B2 rated manufacturing company. The positive factors are balanced by (i) high customer concentration with top ten customers accounting for c. 40% of revenue, (ii) a fragmented market landscape, (iii) the lack of track record operating as a standalone business and limited historical data given the recent carveout from Nexans, (iv) free cash flow generation to be constrained by an increase in working capital reflecting Moody's assumption of a mid-single digit average revenue growth over the next three years, and (v) exposure to copper prices, albeit mitigated by contractual pass-through mechanisms and immediate hedging of open positions with a small core copper inventory exposure. OUTLOOK The CFR is strongly positioned within the B2 rating category. The stable outlook balances the established position Lynxeo holds in the specialty cables market against the challenges of operating as a standalone business following the carve-out from Nexans and requirement to build a track record of positive FCF. LIQUIDITY Lynxeo's liquidity is adequate. With EUR40 million starting cash in Q1 2026 and funds from operations of around EUR55-60 million, moderate positive free cash flow generation on an annual basis projected for the period 2026-2027, and EUR48 million availability under its EUR70 million RCF which represents c. 9% of annual revenue, Lynxeo's liquidity sources are sufficient to cover expected liquidity needs over the next 12-18 months. However, in case of EBITDA pressure or higher working capital swings the company will need to tap into its external sources to manage its liquidity. Over the next 12 months Moody's estimates additional EUR22 million of working cash needs and around EUR20 million working capital outflow. The company is expected to remain in compliance with sufficient headroom on its Total Net Leverage Ratio covenant, which is tested at 5.5x until Dec-26, at 5.0x until Dec-27, and at 4.5x following that period. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS An upgrade would be considered in case of successful execution of the post carve-out business plan, which targets further growth of the business via product innovation, customer wins, geographic expansion and capabilities expansion, evidenced by maintaining good liquidity and credit metrics (on a Moody's-adjusted basis) sustainably -- Debt / EBITDA below 4.5x -- FCF / Debt > 5% and -- EBITA / Interest expense > 3.25x Likewise, the rating would come under pressure if the expected further strengthening of the business cannot be achieved as indicated by -- Debt / EBITDA increasing above 5.5x -- EBITA / Interest expense decreasing to below 2.25x or -- FCF / Debt maintained at low single digits Likewise, a weakening liquidity profile or an aggressive financial policy could trigger a negative rating action. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Manufacturing published in September 2025. The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement. COMPANY PROFILE Lynxeo is a fully integrated player in the specialty industrial cables market. The company, which generated EUR696 million standard revenue and reported EUR82.5 million standalone EBITDA for 2024, serves a diversified range of critical infrastructure industries, including rolling stock, railways, shipbuilding, automation, wind turbines, aerospace, medical, solar and nuclear. Lynxeo has a global manufacturing footprint across Europe, South Korea, China, and Morocco, with a nascent presence in the United States. Lynxeo is wholly owned by Latour Capital, a French private equity sponsor focused on transformation and sustainable growth, with a track record of majority investments in industrial SMEs in France and abroad, including several carve-outs. ============= I R E L A N D ============= ARBOUR CLO III: S&P Assigns Prelim. B- Rating on F-R-R Notes ------------------------------------------------------------ S&P Global Ratings assigned its preliminary credit ratings to Arbour CLO III DAC's class X, A-R-R, B-R-R, C-R-R, D-R-R, E-R-R, and F-R-R notes. At closing, the issuer will have unrated subordinated notes outstanding from the existing transaction and will issue additional subordinated notes. The reinvestment period will be approximately 4.6 years, while the noncall period will be 1.5 years after closing. Under the transaction documents, the rated notes will pay quarterly interest unless there is a frequency switch event. Following this, the notes will switch to semiannual payment. The preliminary ratings assigned to the notes reflect S&P' assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which 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 2,674.61 Default rate dispersion 670.50 Weighted-average life (years) 3.89 Obligor diversity measure 135.84 Industry diversity measure 22.71 Regional diversity measure 1.33 Weighted-average life (years) extended to cover the length of the reinvestment period 4.61 Transaction key metrics Total par amount (mil. EUR) 400 Defaulted assets (mil. EUR) 0 Number of performing obligors 176 Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 2.77 Target 'AAA' weighted-average recovery (%) 35.38% Actual weighted-average spread net of floors (%) 3.66 Actual weighted-average coupon (%) 3.09 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 EUR400.00 million target par amount, the actual weighted-average spread of 3.66%, the actual weighted-average coupon of 3.09%, 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-R-R to D-R-R notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO will be in its reinvestment phase starting from the effective date, during which the transaction's credit risk profile could deteriorate, we have capped our preliminary ratings assigned to the notes." The class X, A-R-R, E-R-R, and F-R-R notes can withstand stresses commensurate with the assigned preliminary ratings. S&P said, "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. "In addition to our standard analysis, we have also included the sensitivity of the ratings on the class X to E-R-R notes, based on four hypothetical scenarios. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the above scenario analysis results for the class F-R-R notes." Environmental, social, and governance S&P regards the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with its benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. For this transaction, the documents prohibit assets from being related to certain activities. Accordingly, since the exclusion of assets from these industries does not result in material differences between the transaction and S&P's ESG benchmark for the sector, no specific adjustments have been made in its rating analysis to account for any ESG-related risks or opportunities. Arbour CLO III 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 Oaktree Capital Management (UK) LLP. Ratings Prelim Prelim amount Credit Class rating* (mil. EUR) enhancement (%) Interest rate§ X AAA (sf) 3.000 N/A Three/six-month EURIBOR plus 0.90% A-R-R AAA (sf) 244.000 39.00 Three/six-month EURIBOR plus 1.27% B-R-R AA (sf) 46.000 27.50 Three/six-month EURIBOR plus 1.80% C-R-R A (sf) 24.000 21.50 Three/six-month EURIBOR plus 2.00% D-R-R BBB- (sf) 29.200 14.20 Three/six-month EURIBOR plus 3.00% E-R-R BB- (sf) 18.800 9.50 Three/six-month EURIBOR plus 5.70% F-R-R B- (sf) 12.000 6.50 Three/six-month EURIBOR plus 8.90% Additional sub. notes NR 47.200 N/A N/A Subordinated Notes NR 49.366 N/A N/A *The preliminary ratings assigned to the class X, A-R-R, and B-R-R notes 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. ARBOUR CLO XVI: Fitch Assigns 'B-sf' Final Rating on Class F Notes ------------------------------------------------------------------ Fitch Ratings has assigned Arbour CLO XVI DAC final ratings. Entity/Debt Rating ----------- ------ Arbour CLO XVI DAC A XS3334177741 LT AAAsf New Rating B XS3334177824 LT AAsf New Rating C XS3334178046 LT Asf New Rating D XS3334178129 LT BBB-sf New Rating E XS3334178392 LT BB-sf New Rating F XS3334178475 LT B-sf New Rating M XS3334178558 LT NRsf New Rating Subordinated Notes XS3334178632 LT NRsf New Rating Transaction Summary Arbour CLO XVI DAC is a securitisation of mainly senior secured obligations (at least 90%) with a component of senior unsecured, mezzanine, second-lien loans, first-lien last-out loans and high-yield bonds. Note proceeds were used to fund a portfolio with a target par of EUR400 million. The portfolio is managed by Oaktree Capital Management (UK) LLP. The collateralised loan obligation (CLO) has a 4.6-year reinvestment period and an 8.5-year weighted-average life (WAL) test. KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors to be in the 'B'' category. The Fitch weighted average rating factor (WARF) of the identified portfolio is 23.9. High Recovery Expectations (Positive): At least 90% of the portfolio comprises senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch weighted average recovery rate of the identified portfolio is 65.6%. Diversified Portfolio (Positive): The transaction includes six matrices, all corresponding to a top 10 obligor concentration limit at 20%. Two matrices are effective at closing and correspond to two fixed-rate asset limits of 5% and 12.5%, and an 8.5-year WAL test. The other four matrices can be selected by the manager any time between 12 months and 18 months after closing and correspond to the same two fixed-rate asset limits and 7.5 year and seven- year WAL tests. The transaction includes various concentration limits, including a maximum exposure to the three largest (Fitch-defined) industries in the portfolio at 40%. These covenants ensure that the asset portfolio will not be exposed to excessive concentration. Portfolio Management (Neutral): The transaction has an approximately 4.6-year reinvestment period and includes reinvestment criteria similar to those of other European transactions. Fitch's analysis is based on a stressed-case portfolio with the aim of testing the robustness of the transaction structure against its covenants and portfolio guidelines. Cash Flow Modelling (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 to account for the strict reinvestment conditions envisaged by the transaction after its reinvestment period. These conditions include passing the coverage tests, the Fitch 'CCC' bucket limitation test and a WAL test covenant that gradually steps down, before and after the end of the reinvestment period. Fitch believes these conditions 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 E notes and would lead to downgrades 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 default and portfolio deterioration. The class B notes have a rating cushion of two, the class C and D notes each have a cushion of four notches, while the class E and F notes each have a cushion of five notches, due to the better metrics and shorter life of the identified portfolio than the Fitch-stressed portfolio, The class A notes are at the highest achievable rating and therefore have no rating cushion. 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 up to two notches each for the class A and C notes, three notches each for the class B and D notes, and to 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 mean RDR and a 25% increase in the RRR across all ratings of the Fitch-stressed portfolio would lead to an upgrade of up to five notches each for the rated notes, except for the 'AAAsf' 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 covenant, 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 agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations Fitch does not provide ESG relevance scores for Arbour CLO XVI 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. CVC CORDATUS XXXI: S&P Affirms B-(sf) Rating on Class F-2 Notes --------------------------------------------------------------- S&P Global Ratings assigned its 'AAA (sf)' credit rating to CVC Cordatus Loan Fund XXXI DAC's class A-R notes. At the same time, S&P affirmed its ratings on the existing class B-1-R, B-2-R, C-R, D-R, E-R, F-1-R, and F-2 notes and withdrew its rating on the original class A. At closing, the issuer had unrated subordinated notes outstanding from the existing transaction. The replacement notes are largely subject to the same terms and conditions as the original notes, except that the replacement notes will have a lower spread over EURIBOR. The ratings reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which is bankruptcy remote. -- The transaction's counterparty risks, which are in line with S&P's counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,740.60 Default rate dispersion 614.93 Weighted-average life (years) 4.58 Obligor diversity measure 133.82 Industry diversity measure 20.35 Regional diversity measure 1.18 Transaction key metrics Total par amount (mil. EUR) 440 Defaulted assets (mil. EUR) 0 Number of performing obligors 175 Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 3.68 Target 'AAA' weighted-average recovery (%) 35.15 Actual weighted-average spread net of floors (%) 3.64 Actual weighted-average coupon (%) 4.47 Rating rationale Under the transaction documents, the rated notes will pay quarterly interest unless a frequency switch event occurs. Following this, the notes will switch to semiannual payments. The portfolio's reinvestment period will end on Dec. 15, 2028. The portfolio is well-diversified, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, S&P has conducted its credit and cash flow analysis by applying its criteria for corporate cash flow CDOs. S&P said, "In our cash flow analysis, we used a EUR437.02 million adjusted target par collateral principal amount, derived by adding a EUR16.99 million portion of unused principal proceeds from the aggregate principal balance. This is lower than the target par amount of EUR440.0 million. "We used the portfolio's actual weighted-average spread (3.64%), actual weighted-average coupon (4.47%), and the actual portfolio weighted-average recovery rates for all rated notes. "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 the available credit enhancement for the class B-1-R, B-2-R, C-R, D-R, and E-R notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO is still in its reinvestment phase, during which the transaction's credit risk profile could deteriorate, we capped our assigned ratings on these refinanced notes. "Our credit and cash flow analysis for the class A-R and F-1-R notes indicates that the available credit enhancement could withstand stresses commensurate with the assigned ratings. "The class F-2 notes' current break-even default rate (BDR) cushion is negative at the 'B-' rating level. 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 can sustain a steady-state scenario, in accordance with our criteria." S&P's analysis reflects several factors, including: -- The class F-2 notes' available credit enhancement 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 BDR at the 'B-' rating level is 22.33% versus a portfolio default rate of 14.66% if it was to consider a long-term sustainable default rate of 3.2% for a portfolio with a weighted-average life of 4.58 years. -- Whether the tranche is vulnerable to nonpayment in the near future. -- 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 the available credit enhancement for the class F-2 notes to be commensurate with a '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 the class A-R to F-2 notes. "In addition to our standard analysis, to indicate how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we have also included the sensitivity of the ratings on the class A-R to F-1-R notes based on four hypothetical scenarios. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the above scenario analysis results for the class F-2 notes." Environmental, social, and governance S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. For this transaction, the documents prohibit or limit assets from being related to certain industries. Since the exclusion of assets from these industries does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities." CVC Cordatus Loan Fund XXXI DAC securitizes a portfolio of primarily senior secured leveraged loans and bonds. CVC Credit Partners Investment Management Ltd. manages the transaction. Ratings assigned Replacement Original Notes notes Amount interest interest Credit Class Rating* (mil. EUR) rate§ rate enhancement(%) A-R AAA (sf) 268.40 Three-month Three-month EURIBOR EURIBOR + 1.22% + 1.47% 38.58 Ratings affirmed Amount Class Rating* (mil. EUR) Notes' interest rate§ B-1-R AA (sf) 45.00 Three-month EURIBOR + 1.75% B-2-R AA (sf) 10.00 4.50% C-R A (sf) 24.20 Three-month EURIBOR + 2.10% D-R BBB- (sf) 30.80 Three-month EURIBOR + 3.00% E-R BB- (sf) 17.60 Three-month EURIBOR + 5.55% F-1-R B+ (sf) 5.50 Three-month EURIBOR + 7.45% F-2 B- (sf) 8.80 Three-month EURIBOR + 8.65% *The ratings assigned or affirmed (as applicable) to the class A-R, B-1-R, and B-2-R notes address timely interest and ultimate principal payments. The ratings on the class C-R, D-R, E-R, F-1-R, and F-2 notes address ultimate interest and principal payments. §The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. EURIBOR--Euro Interbank Offered Rate. NEUBERGER BERMAN 6: S&P Assigns B-(sf) Rating on Class F Notes -------------------------------------------------------------- S&P Global Ratings assigned its credit ratings to Neuberger Berman Loan Advisers Euro CLO 6 DAC's class A-R, B-R, C-R, D-R, E-R, and F-R notes. At the same time, S&P withdrew its ratings on the original class A, B-1, B-2, C, D, E, and F notes. At closing, the issuer had unrated subordinated notes outstanding from the existing transaction. On June 15, 2026, Neuberger Berman Loan Advisers Euro CLO 6 refinanced the existing class A, B-1, B-2, C, D, E, and F notes (originally issued in June 2024) through an optional redemption and issued replacement notes of the same notional. To account for the difference in Euro Interbank Offered Rate (EURIBOR) rates at pricing and settlement, the original interest rates on the refinanced notes were adjusted such that the accrued interest amounts remain the same for each class of refinanced notes, and noteholders are paid in full. S&P withdrew its ratings on these classes of notes. The replacement notes are largely subject to the same terms and conditions as the original notes, except that the replacement notes will have a lower spread over EURIBOR than the original notes. The ratings reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises broadly syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The collateral manager's experienced team, which can affect the performance of the rated notes through collateral selection, ongoing portfolio management, and trading. -- The transaction's legal structure, which is bankruptcy remote. -- The transaction's counterparty risks, which are in line with S&P's counterparty rating framework. Portfolio benchmarks S&P Global Ratings' weighted-average rating factor 2,712.41 Default rate dispersion 574.79 Weighted-average life (years) 4.79 Obligor diversity measure 153.96 Industry diversity measure 24.18 Regional diversity measure 1.30 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 2.76 Actual 'AAA' weighted-average recovery (%) 37.21 Actual weighted-average spread (net of floors; %) 3.56 Actual weighted-average coupon (%) 5.48 Rating rationale Under the transaction documents, the rated notes will pay quarterly interest unless a frequency switch event occurs. Following this, the notes will switch to semiannual payments. The portfolio's reinvestment period will end on Jan. 15, 2029. S&P said, "The portfolio is well diversified at closing, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, we conducted our credit and cash flow analysis by applying our criteria for corporate cash flow CDOs. "In our cash flow analysis, we modelled a par amount of EUR298.54 million, which is lower than the target par amount of EUR300.00 million. At closing, the portfolio is below par, the collateral principal amount used in our cash flow analysis is adjusted further down by the presence of negative cash. "We used the portfolio's actual weighted-average spread (3.56%), actual weighted-average coupon (5.48%), and the actual portfolio weighted-average recovery rates for all rated notes. "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 counterparty criteria. "Under our structured finance sovereign risk criteria, we consider that the transaction's exposure to country risk is sufficiently mitigated at the assigned ratings. "The transaction's legal structure and framework is bankruptcy remote, in line with our legal criteria. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B-R to E-R notes could withstand stresses commensurate with higher ratings than those assigned. However, as the CLO is still in its reinvestment phase, during which the transaction's credit risk profile could deteriorate, we capped our assigned ratings on these refinanced notes. "Our credit and cash flow analysis indicates that the available credit enhancement for the class A-R note could withstand stresses commensurate with the assigned ratings." "The class F-R notes' current break-even default rate (BDR) cushion is negative at the 'B-' rating level. 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 can sustain a steady-state scenario, in accordance with our criteria." S&P's analysis reflects several factors, including: -- The class F-R notes' available credit enhancement is in the same range as that of other CLOs we have rated and that have recently been issued in Europe. -- The portfolio's average credit quality, which is similar to other recent CLOs -- S&P said, "Our model generated break-even default rate at the 'B-' rating level is 24.21%, versus a portfolio default rate of 15.33% if we were to consider a long-term sustainable default rate of 3.20% for a portfolio with a weighted-average life of 4.79 years." -- S&P does not believe that there is a one-in-two chance of this note defaulting. -- S&P does not envision this tranche defaulting in the next 12-18 months. S&P said, "Following this analysis, we consider that the available credit enhancement for the class F-R notes is commensurate with a 'B- (sf)' rating. "Considering our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe our ratings are commensurate with the available credit enhancement for the class A-R to F-R notes. "In addition to our standard analysis, to indicate how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we also included the sensitivity of the ratings on the class A-R to E-R notes based on four hypothetical scenarios. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the above scenario analysis results for the class F-R notes." Environmental, social, and governance S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. For this transaction, the documents prohibit or limit assets from being related to certain industries. Since the exclusion of assets from these industries does not result in material differences between the transaction and our ESG benchmark for the sector, no specific adjustments have been made in our rating analysis to account for any ESG-related risks or opportunities." Ratings assigned Replacement Original Notes notes Amount interest interest Credit Class Rating* (mil. EUR) rate§ rate enhancement(%) A-R AAA (sf) 183.00 Three-month Three-month EURIBOR EURIBOR + 1.21% + 1.47% 38.70 B-R AA (sf) 38.10 Three-month Three-month EURIBOR EURIBOR + 1.76% B-1: + 2.10% B-2: 5.75% 25.94 C-R A (sf) 16.80 Three-month Three-month EURIBOR EURIBOR + 1.95% 2.60% 20.31 D-R BBB- (sf) 21.00 Three-month Three-month EURIBOR EURIBOR + 2.80% + 3.75% 13.28 E-R BB- (sf) 13.50 Three-month Three-month EURIBOR EURIBOR + 5.60% + 6.67% 8.75 F-R B- (sf) 8.10 Three-month Three-month EURIBOR EURIBOR + 8.50% + 8.20% 6.04 *The ratings assigned to the class A-R and B-R notes address timely interest and ultimate principal payments. The ratings assigned to the class C-R, D-R, E-R, and F-R notes address ultimate interest and principal payments. §The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. EURIBOR--Euro Interbank Offered Rate. ========= I T A L Y ========= RINO MASTROTTO: Fitch Lowers LongTerm IDR to 'B', Outlook Negative ------------------------------------------------------------------ Fitch Ratings has downgraded Rino Mastrotto Group S.p.A.'s (RMG) Long-Term Issuer Default Rating (IDR) to 'B' from 'B+'. The Outlook is Negative. Fitch has also downgraded its senior secured EUR320 million senior secured notes (SSN) to 'B+' from 'BB-'. Its Recovery Rating remains at 'RR3'. The downgrade reflects a sharp increase in RMG's leverage following weak operating performance in 2025, which alongside increased operating costs, resulted in lower EBITDA margin and limited visibility over its return to historical levels. The Negative Outlook reflects its expectations that Fitch-adjusted EBITDA gross leverage will remain stretched at above 5.5x in 2026-2027, before gradually restoring headroom from 2028. Fitch expects deleveraging to be supported by sales growth as end-market recover - albeit subject to execution risk - and margin to gradually improve on cost savings. The rating is supported by RMG's resilient business model, albeit of moderate scale, and by neutral to positive free cash flow (FCF). Key Rating Drivers Rise in Leverage: Fitch forecasts RMG's EBITDA leverage at 6.3x in 2026 and 5.9x in 2027, versus previous forecasts of 5.4x and 4.9x, respectively. This revised leverage trajectory is no longer consistent with a 'B+' rating and has led to the downgrade. Fitch expects limited headroom, with EBITDA leverage falling below the negative sensitivity of 5.5x only in 2028. The stretched leverage in the next two years reflects its expectations of only gradual growth in EBITDA, driven by low-to mid-single digit revenue growth and only partial recovery of its operating margin. Lower Profitability: RMG underperformed its 2025 forecasts, with EBITDA margin declining to 14.7% (2024: 18.3%). The weaker performance reflects softer demand across all segments due to weak end-market conditions, exacerbated by the phase-out of legacy contracts in the automotive business line. Revenue increase driven by its Prada partnership announced in June 2025 and its positive impact on gross margin were not sufficient to fully offset the pressure on profitability from higher labour and manufacturing costs. Fitch assumes EBITDA margin to remain under pressure at 14.4% in 2026, with only a modest recovery supported by gradual improvement in the sales mix and market recovery, procurement efficiencies and contribution from new contracts in the automotive segment. Fitch expects the margin to gradually recover towards 15.5% by 2028, still below the 17%-18% reported in 2024-2025. Backlog Supports Modest 2026 Growth: Fitch expects a gradual improvement in total sales volumes in 2026, driven by 3% organic growth in the luxury creations segment on the back of a growing order backlog, as well as synergies and new client additions following Prada's 10% acquisition of RMG. Fitch expects 2% revenue growth in the automotive division, driven by multi-year contracts signed in 2025, which will improve revenue visibility. Delays in deliveries to customers or cancellations in the orderbook may pressure sales volumes, reflecting its exposure to cyclical conditions in the auto industry and dependence on original equipment manufacturer (OEM) sell-through. Positive FCF: Fitch projects positive free cash flow (FCF), supported by normalising capex in 2026-2029, following large investments in production facilities in 2023-2025, and by the company's strategy to reduce working capital requirement and a still manageable interest expense burden. Fitch expects FCF margins to be in the low single digits in 2026 before improving towards the mid-single digits by end-2029. This follows a negative 4.8% FCF margin in 2025, driven primarily by weakened profitability, high expansionary capex and working capital absorption related to the Prada acquisition. Weakening FCF generation would put the ratings under pressure. Niche Position, High Client Retention: RMG's rating reflects its established position in the niche luxury and automotive markets, supported by a bespoke offering that underpins strong client retention and longstanding relationships with global premium and luxury fashion houses and automotive OEMs. Loyal customers and 99% retention rate in the luxury segment mitigate customer concentration (top five at 36% of revenue) to result in a low risk of customer loss, Its narrow product range, with about 90% of 2025 EBITDA generated from leather, is partly mitigated by high product customisation and limited client-switching incentives. Material Exposure to Luxury Sector: Premium and luxury fashion, which accounted for 56% of RMG's revenue in 2025, is generally more resilient to economic downturns but not completely immune to pronounced and extended macro-economic uncertainty. The strategic switch to the luxury sector has allowed RMG to diversify its exposure away from the more cyclical automotive business, which accounted for 31% of 2025 revenue. Fitch expects the automotive segment to start recovering from 2027-2028 and the luxury segment to return to modest growth from 2027, once the consumer market stabilises. Bolt-on Acquisitions Part of Strategy: RMG has expanded organically, complemented by several smaller M&As, some of which were debt-funded. Fitch expects the company to continue making small add-on acquisitions once its financial metrics recover, of around EUR15 million a year in 2028-2029, aimed at internalising certain production processes. Material debt-funded transformative M&As are not part of its rating case and will be treated as an event risk. Peer Analysis Fitch does not rate direct peers of RMG, which acts as a supplier in consumer products manufacturing rather than a manufacturer of final products. However, Fitch compares it with Flos B&B Italia S.p.A. (B/Negative), which shares certain similar credit factors and is partly exposed to the industries of fashion and interior design. RMG is rated in line with Flos B&B Italia, a larger-scale producer of high-end lighting and furniture with broader product diversification. This is balanced by RMG's comparable EBITDA margins, also positive FCF and lower leverage. Fitch also views RMG's operations as more resilient in economic downturns, supported by its established long-term relationships with key customers. Fitch's Key Rating-Case Assumptions - Low single-digit organic revenue growth in 2026, followed by low-to-mid single-digit annual growth in 2027-2029 - EBITDA at 14.4% of gross revenue (including other income) in 2026, gradually increasing towards 15.5% by 2029 - Capex at average 2.7% of revenue over 2026-2029 - M&A spending of EUR15 million a year in 2028-2029 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-', Moderate), sector characteristics ('bbb-', Lower), market and competitive positioning ('bb-', Moderate), diversification and asset quality ('bb-', Higher), company operational characteristics ('bb', Moderate), profitability ('b+', Lower), financial structure ('b', Higher), and financial flexibility ('bb-', Moderate). The quantitative financial subfactors are based on standard CRT financial period parameters: 20% weight for the historical year 2025, 40% for the forecast year 2026 and 40% for the forecast year 2027. B+ to CC considerations apply in its analysis and result in an adjustment of -1 notch. The governance assessment of 'good' 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 Key Recovery Assumptions The recovery analysis assumed that RMG will be considered a going concern (GC) rather than liquidated in bankruptcy, given its strong market position and long-term relationship with customers. Fitch assumed a 10% administrative claim and EUR34 million of securitisation (drawn amount at end-2025), which Fitch estimates will remain available during restructuring due to the strong credit profile of its clients. The estimated GC EBITDA of EUR57 million, due to the contribution from Prada Group, reflects the level of earnings required for the company to sustain operations as a GC in unfavourable market conditions of shrinking volumes and with an inability to adjust the cost base. Fitch assumed a 5.5x enterprise valuations/EBITDA multiple, reflecting RMG's healthy operating margins, inherently cash-generative operations and attractive medium- to long-term luxury sector fundamentals. This multiple is below Flos B&B Italia's 6.0x, due to the latter's larger scale. Prior ranking operating company debt consists of EUR36 million of commercial credit lines, new debt contributed by the Prada Group and other operating company debt. RMG's senior secured debt consists of a EUR50 million super senior revolving credit facility (RCF) due in 2031 (six months before the SSNs) and EUR320 million SSNs due in 2031. The RCF is prior-ranking and, in accordance with Fitch's rating criteria, is assumed to be fully drawn prior to distress. Its waterfall analysis generates a ranked recovery for the SSNs in the 'RR3' band, indicating a 'B+' rating, one notch above the IDR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA leverage exceeding 5.5x on a sustained basis - EBITDA interest coverage below 2.0x - FCF margin below 2% on a sustained basis Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA leverage below 4.5x on a sustained basis - EBITDA interest coverage above 3.0x - FCF margin sustained in the mid-single digits Liquidity and Debt Structure At end-2025, RMG's Fitch adjusted cash balance was EUR19 million. Liquidity is also supported by access to an EUR50 million RCF, which Fitch expects to remain fully undrawn for 2026-2028. The company also has access to EUR36 million commercial credit lines, which were undrawn at end-2025. Fitch expects liquidity to be also supported by its projection of positive FCF generation. RMG has a concentrated debt structure, with its debut EUR320 million SSNs due in 2031. The EUR50 million RCF matures six months before the notes. It has no major maturities before the SSNs come due. Fitch adjusts RMG's reported cash by EUR25 million Fitch views as required for operational needs and hence not likely to be available for debt service. Issuer Profile RMG is an Italian manufacturer of customised leather and textile intermediate products for luxury fashion houses, automotive and mobility and interior design industries. 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 Rino Mastrotto Group S.p.A. 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 ----------- ------ -------- ----- Rino Mastrotto Group S.p.A. LT IDR B Downgrade B+ senior secured LT B+ Downgrade RR3 BB- =================== L U X E M B O U R G =================== MELLENU HOLDING: Moody's Assigns First Time B2 Corp. Family Rating ------------------------------------------------------------------ Moody's Ratings has assigned a first-time long-term corporate family rating of B2 to Mellenu Holding S.A. (Mellenu Holding). At the same time, Moody's have affirmed the B2 long-term backed senior unsecured debt rating of Mellenu Finance S.A. (Mellenu Finance; formerly named 4Finance, S.A.). The outlook on Mellenu Holding is stable and the outlook on Mellenu Finance remains stable. As part of the rating action, Moody's have also withdrawn the B2 CFR of 4Finance Holding S.A. (4finance Holding) for reorganization reasons. At the time of withdrawal, the outlook on the company was stable. RATINGS RATIONALE -- RATIONALE FOR THE FIRST-TIME RATING ASSIGNMENT AND THE WITHDRAWAL The rating action reflects the announcement that a consortium led by 4finance Holding's chairman Kieran Donnelly has agreed to a management-led buy-out and shareholder restructuring of 4finance Group's core operating subsidiaries. For this purpose, a new holding company, Mellenu Holding, has been established in Luxembourg. The consortium consists of three groups: the company's management, holding approximately 25%; a regulated and registered fund with select current 4finance Group shareholders, holding approximately 35%; and another regulated fund for a group of new investors, with approximately 40%. Both funds are managed by licensed fund managers representing the investors in the respective funds. The transaction will take place in two steps. In the first step, which concluded on May 29, Mellenu Holding, as a sister company to 4finance Holding, acquired 4finance Holding's core online lending teams, assets, liabilities, operating subsidiaries and retail brands. Following the acquisition, the remaining business of 4finance Holding is minimal. In the second step, the consortium will acquire Mellenu Holding via a Luxembourg acquisition company. Mellenu Holding is now the guarantor of the EUR 2028 bonds (ISIN: XS1417876163) issued by Mellenu Finance, with no change to the existing obligations. All other existing guarantees from operating subsidiaries remain in place. Mellenu Holding's CFR of B2 reflects the group's high credit risk as a sub-prime consumer lender, its historically strong underlying profitability and its improved financial flexibility after the sale of its fully owned subsidiary TBI Bank EAD (TBI Bank; Ba2 stable, ba3). Mellenu group assumes significant credit risks by lending to individuals with limited access to more traditional bank lending. The volumes in the subprime lending segment have contracted in recent years because of the exit from some countries as well as some changes to the online lending product mix. The group is currently present in ten countries, and is actively looking for new opportunities in emerging markets as part of its strategic growth plans. The group grew very rapidly since 2014, partly through the acquisition of TBI Financial Services B.V. and its subsidiary TBI Bank in 2016, which was again sold in February 2026. The sale was positive for the group's financial flexibility in the short-term, as it allowed the early repayment of one Euro bond that was maturing in October 2026 and it also provided sufficient resources to repay the other Euro bond that is maturing in May 2028. The group is however looking for investment opportunities in other markets, which may deploy part of the funds obtained from the sale. Moody's therefore expect the group's strategy and other investments to evolve, which will provide more clarity on the group's future cash flows and more broadly its financial flexibility. Mellenu Holding's CFR also considers the group's increased capitalization after the sale of TBI Bank, as well as Moody's assessments that capital ratios will again decrease to more normalized levels as the group continues its strategic growth. The sale of TBI Bank has also exerted upward pressure on the group's profitability, given the online business' focus on the more profitable subprime lending segment. The assigned rating also incorporates Mellenu Holding's environmental, social and governance (ESG) considerations, as per Moody's ESG framework. Moody's assessments of Mellenu Holding's governance risks is high, reflected in a Governance Issuer Profile Score (IPS) of G-4 and supported by (1) its concentrated private ownership and the absence of a supervisory board; (2) the absence of backup credit lines relative to the firm's financing needs that signals a lack of preparedness for stress events or unexpected circumstances; and (3) the complex organizational structure of the group. Mellenu Holding's ESG Credit Impact Score of CIS-4 reflects the material impact on ratings from its high governance risks. In addition, as a sub-prime and near-prime consumer lender, Mellenu Holding faces high exposure to social risks, particularly related to treating customers fairly and product pricing. -- RATIONALE FOR THE AFFIRMATION OF THE BACKED SENIOR UNSECURED DEBT RATING Mellenu Finance's B2 backed senior unsecured debt rating reflects the guarantee from Mellenu Holding, and it is reflective of the priority ranking of senior unsecured creditors in the group's capital structure, based on the application of Moody's Loss Given Default (LGD) framework for Speculative-Grade Companies. -- RATIONALE FOR THE STABLE OUTLOOK The stable outlook on Mellenu Holding and Mellenu Finance reflects Moody's views of the group's strengthened financial position after the sale of TBI Bank. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Mellenu Holding's CFR could be upgraded if the company significantly improves its financial flexibility in a sustained manner, while maintaining strong recurring profitability, adequate capitalization and contained asset quality. An upgrade in Mellenu Holding's CFR would likely result in a corresponding upgrade to Mellenu Finance's backed senior unsecured debt rating. Mellenu Holding's CFR could be downgraded if there are any signs of deterioration in its financial flexibility, for example by a deployment of the proceeds from the sale of TBI Bank in other investments. The CFR could also be downgraded if asset quality was to deteriorate substantially; the group's recurring return on assets was to decline; or its capitalisation would significantly deteriorate. A downgrade in Mellenu Holding's CFR would likely result in a corresponding downgrade to Mellenu Finance's backed senior unsecured debt rating. Mellenu Finance's debt rating could also be downgraded because of adverse changes to their debt capital structure, which would lower the recovery rate for senior unsecured debt classes. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Finance Companies published in July 2024. Mellenu Holding's "Assigned Standalone Assessment" of b2 is set five notches below the "Financial Profile initial score" of baa3 to reflect the risks related to the operating environment for European subprime lenders and other high-cost instalment lenders. MONITCHEM HOLDCO 3: S&P Rates New EUR600MM Secured Notes 'B-' ------------------------------------------------------------- S&P Global Ratings assigned its 'B-' issue rating to the proposed EUR600 million senior secured notes to be issued by Monitchem Holdco 3 S.A, a subsidiary of Germany-based chemical producer Monitchem Holdco 2 S.A. (operating as CABB). The recovery rating is '3', indicating its expectation of meaningful recovery (50%-70%; rounded estimate: 60%) in the event of default. Monitchem intends to issue the proposed EUR600 million senior secured notes with a tenor of five years. The proceeds from the new senior secured notes, together with EUR82 million of existing cash on the balance sheet, will be used to: -- Redeem in full its existing EUR670 million senior secured notes, due in May 2028; -- Fund any applicable redemption premium; and -- Pay about EUR15 million in transaction fees and expenses. This refinancing, executed well ahead of the existing maturity date, will extend the company's debt maturity profile. The transaction will result in a EUR70 million reduction in gross debt and a subsequent reduction in expected cash interest expenses. Consequently, S&P has adjusted its debt to EBITDA projection to about 6.8x by year-end 2026, from our previous expectation of 7.7x by year-end, excluding this transaction. In addition, Monitchem intends to downsize its super senior revolving credit facility (SSRCF) to EUR80 million from EUR110 million. S&P said, "This transaction aligns with our previous expectations; Monitchem had indicated plans to utilize a portion of the equivalent EUR124 million in cash proceeds from the Jayhawk Fine Chemicals disposal in February 2026 to refinance its outstanding debt at a lower gross debt amount. "While the proposed refinancing reduces gross debt levels and improves gross leverage metrics, we anticipate free operating cash flow (FOCF) will remain negative until at least 2028, reflecting ongoing restructuring outflows and elevated capital expenditure (capex).' The proposed notes will rank at the same seniority as all the group's existing and future senior secured debt. Monitchem's first quarter 2026 performance was broadly in line with expectations. Despite an 8.1% year-on-year decline in reported revenue (ex-Jayhawk) to EUR121.9 million, adjusted EBITDA rose by 2.0% to EUR24.9 million, with margins expanding to 20.4% (versus 18.4% in first quarter 2025) due to effective cost controls and lower energy costs. S&P said, "Our 2026-2027 EBITDA expectations remain largely unchanged from our April 2026 base case; we expect Monitchem to generate about EUR99 million S&P Global Ratings-adjusted EBITDA for 2026, amid broadly stable operating performance, and EUR112 million in 2027, following a gradual improvement in operating performance and expected benefits to start kicking off from the closure of the Chemiepark Knapsack site in Hürth, Germany, and continued cost-saving measures." S&P said, "Assuming successful execution of the refinancing and a post-transaction cash balance of EUR26 million, we expect S&P Global Ratings-adjusted debt to EBITDA to decrease to 6.8x in 2026 and gradually decline to 6.7x in 2027 and 5.2x in 2028. "We view current rating headroom as sufficient for the time being. While we expect debt to EBITDA to reduce, the primary constraining factor for Monitchem at the 'B-' level remains the continued negative FOCF expected through 2027, driven by ongoing restructuring, elevated capex and reduced earnings. However, we do not see immediate concerns regarding liquidity, given the benefits of the extended debt maturity profile provided by this refinancing, and the full availability under the new EUR80 million SSRCF. "Furthermore, we note that the new facility includes a springing covenant with a senior secured net leverage threshold of 8.3x, which is only triggered if RCF utilization exceeds 40%. We view covenant headroom as ample, given that senior secured net leverage is expected to be approximately 5.3x post-transaction. While the transaction is leverage-neutral on a net basis, we do not credit any net cash to Monitchem given its sponsor-owned structure." Issue Ratings--Recovery Analysis Key analytical factors -- The proposed senior secured debt is rated 'B-', with the recovery rating at '3'. The recovery rating reflects S&P's expectation of meaningful recovery prospects (50%-70%; rounded estimate: 60%). The rated senior secured debt comprises the proposed EUR600 million senior secured notes due in 2031. -- The capital structure also includes an EUR80 million SSRCF, maturing six months before the senior secured notes, which is unrated at the issuer's request. In the recovery waterfall, this facility ranks behind factoring and securitization claims but ahead of the senior secured debt. -- S&P values the group as a going concern, underpinned by its established position in custom manufacturing and acetyls, long-standing customer relationships, specialized manufacturing capabilities, and diversified end-market exposure. The security package for the senior secured debt primarily comprises share pledges over the borrower and guarantors, security over material structural intercompany receivables, and security over certain bank accounts. It does not include direct liens over operating assets, equipment, inventory, or real estate. Despite the support provided by the security package, the expected recovery on the rated second-lien debt is constrained by the presence of super senior and priority-ranking claims that sit ahead of the notes in the recovery waterfall. In S&P's hypothetical default scenario, it assumes weak macroeconomic conditions in Europe, the Middle East, and Africa, and North America, resulting in a sustained deterioration in operating performance due to lower end-market demand, the loss of key customer contracts, contract renewals on less favorable terms, and operational disruptions reducing production efficiency and increasing manufacturing costs. Simulated default assumptions -- Year of default: 2028 -- Jurisdiction: Germany. Simplified waterfall -- Emergence EBITDA: EUR97 million -- Multiple: 5.5x -- Gross enterprise value: EUR536 million -- Net recovery waterfall value, after 5% administrative expenses: EUR510 million -- Estimated priority claims: EUR55 million -- Estimated super senior debt claims: EUR71 million -- Estimated senior secured notes claims: EUR624 million -- Recovery prospect: 50%-70%; rounded estimate: 60% -- Recovery rating: 3 *All debt amounts include six months of prepetition interest accrued and an assumed 85% draw on revolving credit facilities. ===================== N E T H E R L A N D S ===================== HOUSE OF HR: S&P Lowers ICR to 'B-' on Prolonged Market Weakness ---------------------------------------------------------------- S&P Global Ratings lowered its issuer credit rating on House of HR Group B.V. (HOHR) to 'B-'. S&P also lowered its rating on the group's first-lien debt to 'B-', with the recovery rating remaining at '3', indicating its expectation of meaningful recovery prospects (50%-70%; rounded estimate: 55%) in the event of a default. The stable outlook reflects S&P's expectation of modest revenue growth and EBITDA margin expansion over the next 12 months, leading to EBITDA interest coverage of 1.7x-1.8x, debt to EBITDA close to 7.0x, and adequate liquidity despite continued cash burn. S&P said, "We expect House of HR Group B.V.'s (HOHR's) credit metrics will underperform our expectations for a 'B' rating due to prolonged volume weakness in the staffing industry and uncertain macroeconomic conditions. "We anticipate a slow improvement in credit metrics, with EBITDA interest coverage remaining below 2.0x and negative free operating cash flow (FOCF) after leases in the next two years. "The downgrade reflects our view that recovery in the staffing market will be slow amid an uncertain macroeconomic environment. We forecast revenue growth of 3.3% in 2026, including the full consolidation of Pro Industry acquired in April 2025 (or 1.6% on a like-for-like basis, driven mainly by price increases), followed by 2.9% growth in 2027. We continue to forecast an improvement in profitability due to cost-saving initiatives, lower overheads, and nonrecurrence of several one-off items recorded in the fourth quarter of 2025, leading to an S&P Global Ratings-adjusted EBITDA margin of 9.9% in 2026 and 10.2% in 2027, up from 9.0% in 2025. While the company expects temporary staffing volumes to increase or stabilize this year, the engineering and consulting (E&C) segment will take more time to recover. This will drag both revenue growth and the EBITDA margin since the E&C segment has higher profitability than the specialized talent solutions (STS) segment. Although we note that management is taking cost-reduction measures to mitigate these pressures, we believe the company may incur reorganization and efficiency program costs that will further weigh on the EBITDA margin. We also view the E&C segment as more exposed to AI disruption risk, which could potentially affect revenue and margin growth. "We project HOHR's credit metrics will remain below our expectations for a 'B' rating in the next two years. HOHR's credit metrics have deteriorated in recent years due to challenging market conditions, with leverage peaking at 8.1x in 2025. Given the elevated leverage, we believe the company will focus on deleveraging, and as such we have not incorporated mergers and acquisitions into our forecast. Nevertheless, we project EBITDA interest coverage will remain below 2.0x and FOCF after leases will remain negative in 2026 and 2027, at about EUR25 million and EUR40 million respectively (including deferred tax payments). This is driven by meaningful lease payments of EUR95 million-EUR100 million per year, even as the company works to reduce these payments. "Liquidity will remain adequate over the next 12 months. We believe HOHR has ample liquidity to manage its uses over the next 12 months thanks to a cash balance of EUR89 million, EUR199 million availability under its revolving credit facility (RCF) as of March 31, 2026, and no near-term debt maturities. "The stable outlook reflects our expectation of modest revenue growth and EBITDA margin expansion over the next 12 months, leading to EBITDA interest coverage of 1.7x-1.8x, debt to EBITDA close to 7.0x, and adequate liquidity despite continued cash burn." S&P could lower the rating if: -- The group generates persistently negative FOCF after leases that weakens its liquidity position; or -- Operating performance further deteriorates due to continued weak volumes and profitability, with no clear signs of recovery, leading S&P to question the sustainability of its capital structure. S&P could raise the rating if operating performance recovers faster than it expects such that FOCF after leases turns sustainably positive, EBITDA interest coverage reverts to 2.0x, and leverage remains below 7.5x. =========== R U S S I A =========== NAVOIYURAN: Fitch Alters Outlook on 'BB' IDR to Positive -------------------------------------------------------- Fitch Ratings has revised State Enterprise Navoiyuran's (NU) Outlook to Positive from Stable, while affirming its Long-Term Issuer Default Rating (IDR) at 'BB'. Fitch has also affirmed Navoiyuran 's senior unsecured rating at 'BB' with Recovery Rating 'RR4'. The Outlook revision mirrors the sovereign rating action on Uzbekistan on June 3, 2026 (BB/Positive). Navoiyuran's IDR is equalised with the sovereign's under Fitch's Government-Related Entities (GRE) Rating Criteria. Navoiyuran's Standalone Credit Profile (SCP) is 'bb-', reflecting its large presence in global uranium mining sector, low-cost in-situ recovery operations, and strong cash generation. This is offset by limited diversification as a single-commodity producer in a niche market with exposure to uranium price volatility, moderate scale and a weak operating environment in Uzbekistan. Key Rating Drivers Medium-Sized Miner: Navoiyuran was the sixth largest uranium oxide producer globally in 2024, according to World Nuclear Association and representing 8.4% of global uranium supply. In 2025 the company produced 7.0 thousand tonnes uranium oxide (ktU) versus 5.2ktU in 2024. It uses in-situ recovery (ISR), which is more cost-efficient than traditional mining. High reliance on a single commodity exposes the company to volatile uranium prices. Its adjusted EBITDA was USD607 million in 2025 and Fitch expects it to exceed USD800 million in 2026 on supportive uranium prices and high contracted volumes. Fitch expects EBITDA to moderate to USD550 million-600 million to 2029 under its mid-cycle price assumptions. Expanding Reserve Base: Navoiyuran has a reserve life of about 12 years, based on 2P reserves at end-2025 and an average annual production of about 8ktU in the medium term. Ore reserves have materially improved over the past two years: according to the latest JORC report; reserves were at 96.7ktU on 1 January 2026, up from 63.4ktU a year ago and just 19.5 ktU in January 2024. This is because ore reserves were transferred from the state to the company and due to mine development activities. Rising Production: Navoiyuran almost achieved its production target set previously for 2030 (7.1ktU) in 2025, supported by capex doubling year on year to USD552 million in the same year. The company plans to further increase production volumes while Fitch used more conservative forecasts in the rating case, reflecting the typically lower visibility of medium-to-long term sales volumes and an expected moderation in capex intensity. Fitch also expects the company to adjust its capex if prices drop below its price assumptions. Negative FCF: Large capex and continued distribution of 50% of net income as dividend will lead to negative free cash flow (FCF). Fitch expects Navoiyuran's EBITDA gross leverage to increase to 0.9x by 2030 from 0.5x in 2025, remaining at a conservative level, as Fitch anticipates that the company will have to raise additional debt. Low-Cost Position: Navoiyuran's cash costs are among the lowest in the industry due to efficient ISR technology and high self-sufficiency in sulphuric acid required for the ISL process. Sulphuric acid is produced at its own facilities from raw material supplied by JSC Uzbekneftegaz and some sulphuric acid is procured from JSC Almalyk Mining and Metallurgical Complex. The introduction of 100% export duty on sulphur from 1H25 has stabilised domestic prices. It operates three major mining sites - Zafarabad, Uchkuduk, and Nurabad - consisting of several deposits, which supply material to the refining plant that produces uranium oxide. Diversified Offtake; Logistics Risk: Navoiyuran has a diversified uranium revenue base with 2025 sales to Japan, Canada, the US, India, South Korea and commodity traders. It signed a contract with a UAE-based customer in 2025 and Fitch expects new contracts with customers in existing markets. Navoiyuran ships uranium via rail to Saint Petersburg, from which it is exported for further processing. There are no restrictions on uranium export from Russian territory, but sanctions, if introduced, might disrupt shipments. The main alternative is the Trans-Caspian International Transport Route through Azerbaijan and Georgia, which is used for some shipments of Kazatomprom. Ratings Equalised: Navoiyuran's rating is equalised with that of the sovereign, reflecting a GRE score of 30 points out of a maximum 60. Strong Responsibility to Support: Fitch assesses both decision making and oversight and precedents of support as "Strong". Navoiyuran is 100% owned by the state through the Ministry of Economy and Finance of Uzbekistan, which has tight control over the company by monitoring its budget, setting its production targets and development strategy. Despite plans for an IPO in the medium term, Fitch would anticipate the state to maintain a majority ownership. Navoiyuran had not required any support from the government since its inception as a separate entity in 2022, but there are precedents of support to other natural resources GREs. Incentive to Support: Fitch assesses preservation of government policy role as 'Strong'. Fitch considers Navoiyuran to be a strategic GRE, considering its important role in the nuclear production cycle and its political importance to the state. Uranium mining is one of the major economic activities in Uzbekistan. The company is the third-largest tax contributor since 2024. It issued USD300 million notes in June 2025, which underlines its view of the GRE as proxy issuer for the government, supporting its 'Strong' assessment of contagion risk. Peer Analysis Navoiyuran's direct peer is JSC National Atomic Company Kazatomprom (BBB/Stable), which holds a 20% global uranium market share versus Navoiyuran's 8.4% and generates EBITDA above USD1 billion under mid-cycle assumptions. Navoiyuran's EBITDA margin of 56% in 2025 compares favourably with Kazatomprom's approximately 45%. Navoiyuran's AISC (all-in sustaining costs) of USD34/lb is slightly higher than Kazatomprom's of USD29-USD30.5/lb, due to higher subsoil use tax at 16% of uranium revenue, above Kazatomprom.'s 9%. The rate for Kazatomprom will increase further in 2026. Navoiyuran's EBITDA gross leverage of 0.5x compares with Kazatomprom's 0.3x in 2025. Kazatomprom is rated on a standalone basis, reflecting its limited ties with Kazakhstan, while Navoiyuran's IDR is equalised with the sovereign under GRE criteria. Peers in Uzbekistan include copper and gold producer, JSC Almalyk Mining and Metallurgical Complex (Almalyk, SCP: b+), and gold producer, JSC Navoi Mining and Metallurgical Company (NMMC, SCP: bb+). Both are 100% state-owned and larger than Navoiyuran. Almalyk's SCP reflects pressure on FCF from substantial capex for its transformative copper expansion project, resulting in higher leverage than both NMMC and Navoiyuran. NMMC's stronger SCP reflects its larger scale and established gold operations. Fitch's Key Rating-Case Assumptions - Average uranium spot prices of USD77/lb in 2026, USD65/lb in 2027, USD60/lb in 2028 and USD55/lb in 2029 and mid-cycle - CPI in Uzbekistan at about 7% in 2026-2029 - Double-digit growth in production in sales volumes in 2026 and mid-single digit increase in production volumes a year on average over 2027-2029 - EBITDA margins averaging at or above 50% in 2026-2029 - Capex of USD338 million a year on average in 2026-2029 - Half of net profit distributed as dividend - No social contributions in 2026-2029 Corporate Rating Tool Inputs and Scores Fitch scored the issuer as follows, using its Corporate Rating Tool (CRT) to produce the SCP: Business and financial profile factors (assessment, relative importance): management ('bb', Moderate), sector characteristics ('bbb', Lower), market and competitive positioning ('bb', Higher), diversification and asset quality ('bb', Higher), company operational characteristics ('bbb-', Moderate), profitability ('bbb-', Moderate), financial structure ('a+', Lower), and financial flexibility ('bb-', Moderate). The quantitative financial subfactors are based on custom CRT financial period parameters: 10% weight for the historical year 2025, 10% for the forecast year 2026, 30% for the forecast year 2027, 30% for the forecast year 2028 and 20% for the forecast year 2029. The Governance assessment of 'good' has no impact. The Operating Environment assessment of 'b+' results in an adjustment of -1 notch. The SCP is 'bb-'. To derive the Long-Term IDR: Application of Fitch's GRE Rating Criteria results in an equalised approach. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Negative sovereign rating action - EBITDA gross leverage above 1.5x on a sustained basis could be negative for the SCP, but not necessarily for the IDR - Deterioration of the uranium market leading to a material weakness of financial metrics could be negative for the SCP, but not necessarily for the IDR - Unremedied liquidity issues Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Positive rating action on the sovereign - A material improvement in scale, neutral FCF, and EBITDA gross leverage below 1x on a sustained basis and improvement in liquidity, which could be positive for the SCP but not necessarily for the IDR For Rating Sensitivities for Uzbekistan, see ' Fitch Revises Uzbekistan's Outlook to Positive; Affirms at 'BB'', dated 3 June 2026. Liquidity and Debt Structure As of end-2025, Navoiyuran's unrestricted cash amounted to UZS2,708 billion (USD217 million). In July 2025, Navoiyuran issued USD300 million Eurobonds on the LSE, with a coupon of 6.7% and maturing in July 2030. The company used part of the proceeds to refinance existing loans, while keeping the rest as cash balance at end-2025. At end-2025, total debt comprised solely the USD300 million Eurobond. Navoiyuran does not have any upcoming debt maturities, but Fitch expects its FCF to be negative over the next four years, due to large capex and dividend payment, which are likely to lead to new debt. Issuer Profile Navoiyuran is the sixth-largest producer of natural uranium based on World Nuclear Association data. Public Ratings with Credit Linkage to other ratings The company's rating is equalised with the sovereign's. 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 Navoiyuran. ESG Considerations Navoiyuran has an ESG Relevance Score of '4' for Financial Transparency due to limited record of audited financial statements and publication timeliness, which has a negative impact on the credit profile, and is relevant to the rating[s] in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Recovery Prior ----------- ------ -------- ----- State Enterprise Navoiyuran LT IDR BB Affirmed BB senior unsecured LT BB Affirmed RR4 BB =========== S W E D E N =========== INTRUM AB: Moody's Upgrades CFR to B3 & Alters Outlook to Stable ---------------------------------------------------------------- Moody's Ratings has upgraded Intrum AB (publ)'s (Intrum) corporate family rating to B3 from Caa2, Intrum Investments and Financing AB's (Intrum Investment and Financing) backed senior secured ratings related to the Guaranteed Senior Secured Global Notes (2.0 lien notes) to Caa1 from Caa3, and Intrum Investment and Financing's backed senior secured ratings related to the new money bonds (1.5 lien notes) to B2 from B3. Moody's changed the outlook on Intrum and Intrum Investment and Financing to stable, from positive. The rating action follows shareholder approval of a fully-underwritten rights issue, which will further improve Intrum's leverage and interest coverage through debt redemptions; Moody's also believes that the rights issue will support the company's profitability and cash flow, by making additional funds available for portfolio investment and efficiency initiatives. RATINGS RATIONALE The upgrade of Intrum's CFR to B3 from Caa2 reflects Moody's expectations that the fully-underwritten SEK7.5 billion rights issue will further improve the company's leverage by providing funds for SEK5 billion of debt redemptions, and will support profitability and cash flow by making SEK2 billion available for portfolio investments and efficiency initiatives. The upgrade also reflects the company's recent relatively stable operational performance, progress on cost reduction and Moody's expectations that the company will further increase the efficiency of its servicing operations and pay down further debt from operating cash flow. The company's focus on leverage reduction also drove an improvement of Moody's governance issuer profile score to G-4 from G-5, and an improvement of Moody's ESG credit impact score to CIS-4 from CIS-5. This is balanced against still relatively high leverage, pressure on profitability from a declining investment portfolio, and the need to re-finance a significant portion of remaining debts maturing in 2027 (the 1.5 lien notes) and 2028 (the Revolving Credit Facility). The upgrade of Intrum Investment and Financing's backed senior secured ratings related to the Guaranteed Senior Secured Global Notes (2.0 lien notes) to Caa1 from Caa3 reflects the two-notch upgrade of Intrum's CFR and no subordination. The upgrade of Intrum Investment and Financing's backed senior secured ratings related to the new money bonds (1.5 lien notes) to B2 from B3 reflects Intrum's CFR, as well as the declining benefit from the subordination of the larger issuance volume of the 2.0 lien notes due to redemptions. OUTLOOK The stable outlook on Intrum and Intrum Investments and Financing reflects Moody's expectations that the company's operating performance will see only gradual improvement over the next 12-18 months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Intrum's CFR and Intrum Investments and Financing's backed senior secured debt ratings could be upgraded if the company's operating performance shows sustained improvements, as evidenced by stable earnings and cash flow and further improvement in interest coverage and leverage, or if the company makes further progress in improving the sustainability of its financing structure. Further improvements in leverage resulting from the redemption of the 2.0 lien notes would reduce the volume of subordinated debt and are hence less likely to lead to an upgrade of the 1.5 lien notes. Intrum's CFR and Intrum Investments and Financing's backed senior secured debt ratings could be downgraded if the company's operational performance materially weakens and the firm's earnings, cash flow, interest coverage and leverage deteriorate, or if it is unable to redeem or refinance debts well in advance of their maturity. The 1.5 lien new money notes could be downgraded or receive a lower rating uplift over the CFR if there is a substantial reduction in the volume of subordinated debt, specifically the 2.0 lien notes. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Finance Companies published in July 2024. 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. QUIMPER AB: Fitch Alters Outlook on 'B+' LongTerm IDR to Stable --------------------------------------------------------------- Fitch Ratings has revised Quimper AB's (Ahlsell) Outlook to Stable from Negative, while affirming its Long-Term Issuer Default Rating (IDR) at 'B+'. Concurrently, Fitch has affirmed Ahlsell's senior secured debt rating at 'B+'. The Recovery Rating remains 'RR4'. The Outlook revision mainly reflects Fitch's expectation of strong near-term deleveraging, supported by EBITDA growth, driven mainly by inorganic revenue growth and recovering operating margins. Fitch expects the group's near-term profitability to be supported by continued improvement in activity levels across its key end-markets and targeted cost savings. The affirmation reflects expected deleveraging to below its 5x negative sensitivity by end-2027 after a small breach at end-2026. It also considers the group's expected mid-single digit free cash flow (FCF) margin in 2026-2029 and improving EBITDA interest coverage following the completed repricing of its term loan in 1Q26. Key Rating Drivers Temporarily High Leverage: Fitch expects Ahlsell's EBITDA leverage to decrease to about 5.2x by end-2026 and below 5x by end-2027, driven by strong EBITDA growth. The group's temporarily high EBITDA leverage at 6.6x at end-2025 was affected by about a SEK5.5 billion term loan B (TLB) add-on completed mid-2025 to fund equity return (about 1.0x impact) and weak profitability due to subdued activity in the construction market. Strong EBITDA Growth: Fitch expects about a 25% increase in the group's nominal EBITDA in 2026, driven by revenue growth in the low teens, mainly from bolt-on acquisitions, and about a 1pp increase in the EBITDA margin. Fitch forecasts further mid-to-high single-digit EBITDA growth in 2027-2029, driven by organic revenue growth, continued M&A bolt-on acquisitions and a modest increase in operating margins. Higher operating margins in 2026 will be mainly driven by increasing activity, normalised cost inflation and about an expected SEK400 million near-term cost savings mainly related to personnel. Organic revenue growth will be supported by sound demand in renovation, infrastructure and industrial end-markets and limited exposure to the weak new build residential end-market. Improving Interest Coverage: Fitch expects EBITDA interest coverage to increase above 3x in 2026-2029 (2.7x in 2025), after its completed debt repricing reduced the group's TLB margin by 75bp and also because of projected strong EBITDA growth. Fitch anticipates the lower TLB margin to result in annual savings of about SEK0.2 billion. The group's weaker interest coverage in 2024-2025 was affected by subdued EBITDA generation and temporarily high additional net costs related to interest-rate hedging. Solid Cash Flow Generation: Fitch expects FCF margins of 4%-5% in 2026-2029, as strong EBITDA growth is partly offset by a high interest cost burden. Ahlsell has a good record of converting EBITDA into cash flow due to the asset-light nature of the business and its focus on working-capital management. Continued strong cash flow generation has also allowed the group to fund acquisitions with internally generated excess cash. Strong Business Profile: Ahlsell's business profile is solid, supported by its position as the leading Nordic distributor of installation products, tools and supplies to professional customers, and its market-leading position in Sweden. Its products, customers and suppliers are well-diversified, although with significant geographic concentration in Sweden. Products are available through branches, online and unmanned solution channels. The group's efficient logistics system with short delivery lead times in the Nordic region is a competitive advantage. Active M&A Strategy: Fitch expects the group to spend a total of about SEK5.5 billion on bolt-on acquisitions in 2026-2029. Execution risk is mitigated by the group's successful integration record and prudent policy to acquire companies with a clear strategic fit. Nevertheless, the M&A pipeline, deal considerations and post-merger integration remain important rating drivers. Peer Analysis Fitch views Ahlsell's business profile as stronger than that of building materials distributor Winterfell Financing S.a.r.l. (Stark Group; B-/Rating Watch Negative). Both companies benefit from strong market positions, large operational scale, sound product diversification, large exposure to renovation markets, and limited customer and supplier concentration. Stark's broader geographic footprint is more than offset by Ahlsell's stronger market diversification, given its exposure to the infrastructure and industry markets and lower reliance on the cyclical residential market. Stark's business profile is also stronger than that of the smaller Wolseley Group Holdings Limited (B/Stable), mainly due to its larger operational scale and stronger geographic diversification. Ahlsell's financial profile is stronger than those of Stark Group and Wolseley, based on lower expected leverage and stronger profitability, supported by higher EBITDA margins and FCF generation. Fitch’s Key Rating-Case Assumptions - Revenue at SEK57.8 billion in 2026, with low single-digit organic annual growth in 2027-2029 - Net M&A at about SEK1.8 billion in 2026 and SEK1.3 billion annually in 2027-2029, supporting additional revenue growth (margin-neutral) - Broadly stable EBITDA margin at 10%-10.5% in 2026-2029 - Capex at 1%-1.3% in 2026-2029 - Broadly neutral working capital in 2026 and working-capital outflow at 0.3%-0.4% of revenue in 2027-2028 - No shareholder returns, but cash build-up may support distributions in 2028-2029 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 (bbb, Lower), Diversification and Asset Quality (bb+, Moderate), Company Operational Characteristics (bbb-, Moderate), Profitability (b+, Higher), Financial Structure (b, Higher), and Financial Flexibility (bb-, Moderate). - The quantitative financial subfactors are based on standard CRT financial period parameters: 20% weight for the 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 has no impact. - The governance assessment of 'good' has no impact. - The operating environment assessment of 'aa' 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 Ahlsell would be reorganised as a going-concern (GC) in bankruptcy rather than liquidated. Fitch has assumed a 10% administrative claim. Its GC EBITDA estimate of SEK3,250 million is up from SEK3,000 million in the previous calculation, reflecting the structural impact of recent bolt-on acquisitions. The GC EBITDA reflects its view of a sustainable, post-reorganisation EBITDA on which Fitch bases the enterprise valuation. The GC EBITDA reflects intense market competition and a failure to broadly pass on raw-material cost inflation, together with an inability to extract acquisition synergies. Fitch applies a distressed EBITDA multiple of 5.5x to calculate a post-reorganisation enterprise valuation. The multiple reflects Ahlsell's strong brand value in the Nordics, coupled with its leading market position and strong, stable margins. The multiple is in line with that of Nordic building material distributor Stark Group. The debt structure as of 31 March 2026 comprised a senior secured TLB of about SEK30.1 billion and a senior secured revolving credit facility (RCF) of about SEK2.5 billion. These assumptions result in recovery rates for the senior secured TLB and RCF in the 'RR4' range, supporting the debt rating at the same level as the IDR. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - EBITDA gross leverage above 5.0x on a sustained basis, including due to additional equity returns - EBITDA interest coverage below 3.0x on a sustained basis - FCF margins below 2% on a sustained basis, including due to sizeable margin-dilutive acquisitions Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - EBITDA gross leverage below 4.0x on a sustained basis - Maintaining FCF margins above 3% on a sustained basis - EBITDA interest coverage above 4.0x on a sustained basis - Increased geographical diversification outside of Sweden Liquidity and Debt Structure Ahlsell's liquidity at end-March 2026 comprised about SEK2.3 billion of readily available cash (excluding SEK0.3 billion of adjustment by Fitch for intra-year working capital swings) and the group had access to a fully undrawn committed RCF of about SEK2.5 billion maturing in September 2029. It has no major near-term debt maturities, and Fitch expects 4%-5% FCF margins in 2026-2029 to be mostly deployed for continued bolt-on M&A. Its debt of about SEK30.1 billion at end-March 2026 was concentrated on its first-lien TLB with a maturity in 2030. Refinancing risk is manageable due to the lack of large short-term debt maturities and the group's record of stable performance. Issuer Profile Ahlsell is a leading Nordic distributor of installation products in heating and plumbing, electrical and tools and supplies. 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 Ahlsell. 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 ----------- ------ -------- ----- Quimper AB LT IDR B+ Affirmed B+ senior secured LT B+ Affirmed RR4 B+ QUIMPER AB: Moody's Affirms 'B1' CFR & Alters Outlook to Negative ----------------------------------------------------------------- Moody's Ratings has affirmed the B1 corporate family rating and the B1-PD probability of default rating of Quimper AB (Ahlsell or the company). Concurrently, Moody's have affirmed the B1 ratings of the senior secured term loan B (TLB) due March 2030 and the senior secured revolving credit facility (RCF) due September 2029. The outlook has been changed to negative from stable. RATINGS RATIONALE Ahlsell's ratings reflect its leading market positions in Nordic technical distribution, with a diversified product offering across specialized verticals and broad exposure to relatively resilient renovation, infrastructure, and industrial end markets (around 67% of 2025 revenue). Its omnichannel business-to-business (B2B) distribution model and fragmented SME-focused customer base support pricing discipline and limited exposure to project delays. Despite continued organic growth at group level since Q4 2024, revenue growth remained in the low single digits in 2025. Earnings were pressured by cost inflation and material restructuring charges related to the acquisition of Rexel Finland Oy in September 2025, with only limited contributions in the period. As a result, Moody's-adjusted EBITDA decreased to SEK5.4 billion (10.4% margin) in 2025, from SEK5.6 billion (11.1%) in 2024 and SEK 6.0 billion (11.9%) in 2023. Combined with two TLB upsizes totalling EUR858 million over 2024–25, Moody's-adjusted leverage increased to 6.3x (5.6x net) at year-end 2025, well above B1 rating thresholds. Going forward, Moody's expects Ahlsell to deliver both revenue and earnings growth, supported by the turnaround of the Finnish electrical operations and contributions from bolt-ons. Moody's forecasts company-reported EBITDA to recover to SEK6.5 billion in 2026 and SEK7.0 billion in 2027, allowing for gradual deleveraging to 5.4x (4.7x net) and 4.9x (3.8x net), respectively. However, this trajectory carries material execution risk. The pace and magnitude of EBITDA recovery depends on both successful integration of the Finnish electrical operations and improvement in end-market demand. Visibility on the latter remains limited, given subdued construction activity, constrained investment conditions, and the additional uncertainty from the ongoing conflict in the Middle East. Any delay in earnings recovery would result in credit metrics remaining weak for a prolonged period. Governance considerations were among the key drivers of the rating action. The current weak credit metrics reflect an aggressive financial policy, reflecting Ahlsell increasing debt to partially fund SEK 14.2 billion (EUR1.3 billion equivalent) shareholder distributions at times of weak operating conditions with limited visibility on recovery in activity. This weakened the company's position within the rating category and increased reliance on timely execution of the deleveraging plan. RATIONALE OF THE OUTLOOK The negative outlook reflects execution risk around the pace and magnitude of earnings recovery to restore leverage to levels consistent with the current rating by year-end 2027. Moody's could stabilize the outlook if Ahlsell delivers sustained deleveraging through earnings growth and disciplined financial policy, alongside positive free cash flow generation. Conversely, downward pressure could arise if leverage remains elevated or financial policy remains aggressive. LIQUIDITY Ahlsell maintains good liquidity. Cash declined to SEK2.6 billion in March 2026, from SEK3.6 billion in December 2025 and SEK5.8 billion in December 2024, reflecting the net impact from dividend recapitalisation and investments. Moody's expects liquidity to strengthen, supported by a return to positive free cash flow. Moody's forecasts cash EBITDA at SEK6.3 billion in 2026 and SEK6.9 billion in 2027, against annual net interest and tax charges totalling approximately SEK2.7 billion. After modest working capital release and capex at SEK2.2 billion (including lease principal repayments), Moody's expects the company to generate positive free cash flow in the range of SEK1.5–2.0 billion over the next 12-18 months. After annual bolt-on acquisitions of up to SEK625 million, Moody's expects cash balances to recover to around SEK4.3 billion by year-end 2026 and SEK5.8 billion by year-end 2027. Ahlsell has no significant debt maturities before March 2030, when the TLB comes due. Its SEK2.5 billion committed revolving credit facility (RCF) remains fully undrawn. The RCF is subject to a springing net senior secured leverage covenant tested quarterly, only when net drawings exceed 40% of commitments, with a threshold of 9.0x. As of March 2026, this ratio stood at 5.1x, leaving the company with ample covenant capacity. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Positive rating pressure could develop if: -- EBIT margin remains in the high single digits in percentage terms or above; -- Debt/EBITDA declines below 4.0x on a sustained basis; -- Liquidity remains good; and -- The company demonstrates a conservative financial policy, illustrated by no excessive profit distributions to shareholders or larger debt-funded acquisitions Negative rating pressure would arise if: -- EBIT margin declines toward the mid-single-digit range in percentage terms; -- Ahlsell's operating performance weakens, such that its Moody's-adjusted debt/EBITDA rises above 5.25x on a sustained basis; -- EBITA/interest declines sustainably towards 2.0x; and -- Liquidity deteriorates, evidenced by persistent track record of negative free cash flow generation 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. CORPORATE PROFILE Ahlsell is a leading pan-Nordic technical distributor of installation products, tools and supplies, operating a business-to-business (B2B) omnichannel model across heating, ventilation and air conditioning (HVAC) and plumbing, electrical, and tools and supplies categories. In the last 12 months to March 2026, Ahlsell generated around SEK52.8 billion revenues and SEK5.5 billion company-reported EBITDA (post IFRS-16). Since February 2012, Ahlsell has been majority owned by funds affiliated with the private equity firm CVC Capital Partners plc. =========== T U R K E Y =========== ISTANBUL METROPOLITAN: Fitch Affirms 'BB-' IDRs, Outlook Stable --------------------------------------------------------------- Fitch Ratings has affirmed Istanbul Metropolitan Municipality's Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'BB-'. The Outlooks are Stable. The ratings reflect its expectations that the city's operating performance will remain resilient. This is despite persistent inflation driven by higher imported energy prices amid regional geopolitical tensions, further depreciation of the Turkish lira, pressure on opex and an expected increase in debt financing due to investments 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. Istanbul's IDRs are capped by those of the Turkish sovereign (BB-/Stable). KEY RATING DRIVERS Standalone Credit Profile SCP at 'bbb-': Istanbul's SCP results from a 'Weaker' risk profile and a 'aaa' financial profile. The SCP also factors in Istanbul's comparison with its national and international peers in the same rating category. Risk Profile: 'Weaker' Istanbul's 'Weaker' risk profile is driven by four 'Weaker' key risk factors (revenue adjustability, expenditure sustainability, liabilities and liquidity robustness and liabilities and liquidity flexibility) and two 'Midrange' factors (revenue robustness and expenditure sustainability), all unchanged since the last review. The assessment reflects Fitch's view of a high risk that the city'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' Istanbul has a well-diversified and vibrant local economy with GDP per capita about 60% above the national average, leading to a tax revenue base with low volatility and robust tax revenue growth prospects. This makes the city resilient to economic slowdown, which Fitch expects to continue over 2026-2030. Fitch expects tax revenue, which comprises about 78% of its operating revenue, to slightly exceed national nominal GDP CAGR of 21%, and operating revenue to increase to about TRY735.7 billion by 2030 from TRY269 billion in 2025. This will lead to a resilient operating margin of about 33%. Transfers from the central government comprise about 11% of operating revenue, a low share compared with national peers', due to the city's strong socio-economic wealth indicators. Revenue Adjustability: 'Weaker' Istanbul's ability to generate additional revenue is constrained by nationally determined tax rates. At end-2025, nationally set and collected taxes were 76% of Istanbul's total revenue. Local taxes over which Istanbul has control were a low 0.1% of total revenue, implying negligible tax flexibility, which is also constrained by central government limits on rates. This is partly compensated for by fees and charges over which Istanbul has some control and scope for asset sales. These accounted for 11% and 2%, respectively, of its total revenue in 2025. Expenditure Sustainability: 'Weaker' Its assessment reflects a persistently high inflationary operating environment, driven by higher imported energy prices amid regional geopolitical tensions, which will weigh on expenditure control despite Istanbul's moderately cyclical and counter-cyclical responsibilities. Operating revenue CAGR of 69.2% slightly lagged opex CAGR of 70.2% in 2021-2025, leading to still robust operating balances. Slower capex growth supported an improvement in the pre-financing balance to a surplus of 5% of total revenue in 2025, reversing a deficit of 33% in 2024. Fitch expects Istanbul to continue providing substantial subsidies to its loss-making transport company, IETT, as rising costs are unlikely to be fully offset by tariff adjustments. Fitch also expects recently introduced central government cost-cutting measures, together with a projected decline in inflation from 2027, to support Istanbul in regaining greater control over expenditure growth. Expenditure Adjustability: 'Midrange' Istanbul has a low share of inflexible costs versus its international peers, at below 70% of totex, which is in line with other Fitch-rated Turkish metropolitan municipalities. Fitch expects capex to constitute 40% of totex in 2026-2030, of which about 10% is discretionary and can be postponed. Spending flexibility is constrained by Istanbul's weak history of balanced budgets, due mainly to high capex. Its ability to shrink its deficits is limited by current services levels and investment needs driven by rapid urbanisation. Fitch expects pre-financing deficits, averaging about 15.7% of total revenue, versus 9.5% in 2021-2025. Investments are mainly for metro extension and highway bridge construction. Liabilities and Liquidity Robustness: 'Weaker' Nearly 91% of Istanbul's debt is in foreign currencies and unhedged, resulting in significant FX risk, due to large lira volatility. Fitch expects FX volatility to increase Istanbul's debt by TRY21 billion, or roughly 15%, by end-2026. The weighted average life of debt was 3.2 years at end-2025, and most debt was amortising. About 31% of its debt was bonds with a bullet repayment. Almost half of its debt is at fixed interest rates (47%), partly mitigating interest-rate risk. Istanbul is not exposed to material off-balance-sheet risk. Contingent liabilities are mostly borrowings of its water affiliate, ISKI, which is a self-sustaining entity, underpinned by its strong payback ratio of below 1.0x. Liabilities and Liquidity Flexibility: 'Weaker' Istanbul's counterparty risk stems from domestic liquidity providers rated below 'BBB-', limiting its assessment to 'Weaker', like its Turkish peers. Istanbul had TRY25 billion cash at end-2025, up from TRY17.4 billion in 2024, but it remains earmarked for the settlement of payables or spending such as payments to contractors for its metro line investments. However, Istanbul can generate additional liquidity through asset sales and benefits from very good access to international and domestic financial and capital markets. Turkish LRGs do not benefit from treasury lines or cash-pooling, making it challenging to fund unexpected increases in debt liabilities or spending. Financial Profile: 'aaa category' Fitch assesses Istanbul's financial profile assessment in the 'aaa' category. Robust tax revenue growth will drive operating revenue towards TRY735.7 billion, supported by expected real GDP growth of about 4% on average. However, Fitch expects the operating margin to remain under pressure over 2026-2030, averaging 33% due to persistently high inflation, versus an average 40% in 2021-2025. Under Fitch's rating case, Istanbul's operating balance will be about TRY226.1 billion with adjusted debt of TRY794.1 billion in 2030, leading to a robust debt payback ratio (net adjusted debt/operating balance) at 3.5x, in line with a 'aaa' financial profile This is further supported by a robust actual debt service coverage ratio (ADSCR) at 1.6x in 2030. The fiscal debt burden (net adjusted debt/operating revenue) remains slightly above 100%, in line with an 'a' category. Other Rating Factors Istanbul'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 IDR is the only option for a 'BB-' Long-Term IDR. National Ratings Istanbul's 'AAA(tur)' National Long-Term Rating is driven by its Long-Term Local-Currency IDR and based on a peer comparison. Istanbul's National Long-Term Rating reflects its budgetary flexibility benefiting from a valuable asset base, unlike its Turkish peers, which it may use to generate additional liquidity, and from very good access to both domestic and international financial markets. Debt Ratings The long-term ratings on Istanbul's senior unsecured USD305 million 10.75% bond due in April 2027 and USD715 million 10.5% bond due in December 2028 are in line with Istanbul's Long-Term IDR. Peer Analysis All Turkish metropolitan municipalities and international peers, such as Yerevan City (SCP: bbb-) and Tashkent City, exhibit 'Weaker' risk profiles, driven by a volatile economic environment and an evolving institutional framework in which they operate, resulting in high volatility in operational cash flows. Among Turkish LRGs, Istanbul is most comparable with Izmir and Ankara metropolitan municipalities, given similar demographic trends and relatively high GDP per capita. Istanbul's 'bbb-' SCP is in line with that of Mersin Metropolitan Municipality, reflecting broadly similar debt metrics, but remains weaker than Ankara's 'bbb' SCP. Compared with other Turkish LRGs, Istanbul has stronger payback and ADSCR metrics than Izmir Metropolitan Municipality (SCP: bb+). Among international peers, Istanbul's debt metrics are broadly comparable with that of Yerevan. However, Istanbul's ADSCR is projected to weaken to 1.6x by 2030 due to higher borrowing costs, versus Yerevan's, while its payback ratio remains stronger at 3.5x versus Yerevan's 4.2x. Issuer Profile Istanbul is the largest city in Turkiye, with about 15.7 million inhabitants. It has a crucial role in Turkiye's economy, due its strategic location as an international junction of land and sea trade routes, contributing to about 30% of national GDP. Key Assumptions Qualitative Assessments: 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: '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 the 2026-2030 rating case: - Payback ratio: 3.5x - ADSCR: 1.6x - Fiscal debt burden: 107.9% 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 22.3% (69.2% year on year for 2021-2025) due to expected slowing nominal GDP growth of about 21% on average - Tax revenue CAGR of 22.9 (69.8% year on year in 2021-2025) - Current transfers CAGR of 22.5% (66.2% year on year in 2021-2025) - Opex CAGR of 25.3% (70.2% year on year for 2021-2025) due to expected slowing inflation of about 21% on average in 2026-2030 - Negative net capital balance averagingTRY243.5 billion in 2026-2030 - Apparent cost of debt on average 9.6%, slightly below the average cost of debt in 2025, based on declining interest rates. Istanbul will predominantly continue borrowing in foreign currencies - Average US dollar/Turkish lira assumptions based on Fitch's sovereign estimate for 2026 at 51, for 2027 at 59 and for 2028 at 67, with an annual additional depreciation of 10% for 2029-2030 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 Istanbul's SCP resulting from a debt payback of more than 9x on a sustained basis would lead to a downgrade of Istanbul's IDRs. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade of the Turkish sovereign IDRs would lead to an upgrade of Istanbul's IDRs. Climate Vulnerability Signals The results of its Climate.VS screener did not indicate an elevated risk for Istanbul. 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 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 Istanbul's IDRs are capped by the Turkish sovereign ratings. Entity/Debt Rating Prior ----------- ------ ----- Istanbul 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) senior unsecured LT BB- Affirmed BB- MERSIN METROPOLITAN: Fitch Affirms 'BB-' IDRs, Outlook Stable ------------------------------------------------------------- Fitch Ratings has affirmed Mersin 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 Mersin will maintain a robust operating balance, despite persistent inflation driven by higher imported energy prices amid regional geopolitical tensions. The affirmation also takes into account that debt will substantially increase due to investments and lira depreciation. Nevertheless, Fitch expects Mersin's debt metrics to be supported by a robust operating balance and to remain commensurate with a 'bbb-' Standalone Credit Profile (SCP) over the medium term. The IDRs are capped by Turkiye's IDRs (BB-/Stable) and the Stable Outlooks reflect those on the sovereign. KEY RATING DRIVERS Standalone Credit Profile Mersin'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 'Weaker' risk profile reflects two 'Midrange' key rating factors (KRFs) and four 'Weaker' KRFs. The assessment reflects a high risk that Mersin'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' Mersin's tax revenue base is diversified, supported by its trade- and manufacturing-driven local economy. The diversification leads to less volatile tax revenue and buoyant growth prospects. Fitch expects tax revenue growth to only slightly exceed Turkiye's nominal GDP CAGR of 21% for 2026-2030. This is underscored by Mersin's 67.8% tax revenue CAGR in 2021-2025, versus the national nominal GDP CAGR of 65%. Tax revenue should drive operating revenue higher towards TRY60.9 billion in 2030 from TRY22.7 billion in 2025, supporting its operating balance under its rating case. Tax revenue represented about 70% of operating revenue on average in 2021-2025. Revenue Adjustability: 'Weaker' Mersin's ability to generate additional revenue is constrained by nationally determined tax rates. At end-2025, nationally set and collected taxes comprised 69% of total revenue. Local taxes, over which Mersin has tax autonomy, made up a low 0.1% of total revenue, implying negligible tax flexibility, and are constrained by ceilings set by the central government. Tax-setting inflexibility is partly compensated by fees and charges levied on public services over which Mersin has some flexibility and by scope for asset sales. These accounted for 9.9% and 2.6%, respectively, of total revenue in 2025. Expenditure Sustainability: 'Weaker' Fitch expects the persistent high inflationary operating environment to erode expenditure control despite Mersin's moderately cyclical and counter-cyclical responsibilities. Opex growth was broadly aligned with operating revenue growth over 2021-2025, with both rising by about 67%. Fitch expects high inflation, albeit on a declining trend, to continue to drive faster opex growth than operating revenue growth by about 3%. Mersin has a capital-intensive investment programme over the next five years, with an emphasis on its tram and metro line projects. This, alongside high inflation, will further limit Mersin's capacity to control its spending. Fitch expects slower inflation from 2027, and cost-cutting measures introduced by the central government to help it regain some control of expenditure growth. Expenditure Adjustability: 'Midrange' Mersin has a low share of inflexible costs compared with international peers, averaging 70% of totex. This is counterbalanced by a weak record of balanced budgets, due to large swings in capex and moderate affordability for cuts, given modest existing public services and investments. Mersin will invest TRY15.9 billion annually mainly in capital-intensive public transportation in the next five years, keeping capex at about 30% of totex under its rating case. Fitch expects such capex to lead to large budget deficits before financing on average at close to 18% of total revenue for 2026-2030, compared with deficits at 9% over 2021-2025 and a surplus before financing in 2025. Liabilities and Liquidity Robustness: 'Weaker' Significant Turkish lira volatility exposes Mersin to considerable FX risk, as nearly 41% of its total debt is in euros and unhedged. Its debt has a short weighted-average life at two years, increasing refinancing risk. This is mitigated by the fully amortising nature of its bank loans and an actual debt service coverage ratio remaining at least 1.5x under Fitch's rating case. Fitch also expects new foreign-currency loans to extend the average maturity of its existing debt stock. Interest-rate risk is mitigated by most of Mersin's bank loans (54%) being at fixed rates at end-2025. Mersin is not exposed to material off-balance-sheet risk. Contingent liabilities (TRY1.3 billion) are moderate and stem solely from its water affiliate, MESKI, which is self-sustaining. MESKI's borrowing will continue to increase due to its new investments, but Fitch expects the company to service its debt with its own cash flow. In 2025, the company reported a resilient operating balance, leading to a payback ratio at 1.1x. Liabilities and Liquidity Flexibility: 'Weaker' Mersin's counterparty risk stems from domestic liquidity providers rated below 'BBB-', which coupled with the short tenor of its loans, limits its assessment to 'Weaker', as for its Turkish peers. Mersin's available cash at end-2025 was fully restricted for payables settlement. It has a record of good access to national lenders and is improving its relationship with international lenders. Turkish local and regional governments (LRGs) do not benefit from treasury lines or national cash-pooling, making funding unexpected increases in debt liabilities or spending peaks challenging. Financial Profile: 'aaa category' Fitch assesses Mersin's financial profile in the 'aaa' category. Fitch projects operating revenue at TRY60.9 billion by 2030, driven by tax revenue, based on average real GDP growth of about 4% and average inflation of 20%. However, Fitch expects the operating margin to remain under pressure over 2026-2030, averaging around 20% in its rating case due to continued inflationary pressures. Fitch's rating case forecasts Mersin's operating balance at about TRY11.6 billion and direct debt at TRY48.7 billion in 2030 (up from TRY1.3 billion in 2025), leading to a payback ratio (net adjusted debt/operating balance) at 4.2x, in line with a 'aaa' financial profile. Fitch expects Mersin's actual debt service coverage ratio (DSCR) to decline to 1.5x by 2030 but still remain resilient, corresponding to an 'a' category. The fiscal debt burden (net adjusted debt/operating revenue) will remain below 100%, in line with a 'aa' category. Other Rating Factors Mersin'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 IDR is the only option for a 'BB-' Long-Term IDR. National Ratings Mersin's 'AA+(tur)' National Long-Term Rating is mapped to its Long-Term Local-Currency IDR and based on a peer comparison. The Outlook is Stable. Peer Analysis All Turkish metropolitan municipalities and international peers, such as Yerevan City and Almaty City, have 'Weaker' risk profiles, driven by a volatile economic environment and an evolving institutional framework, resulting in high volatility in operational cash flows Mersin's national and international peers all have 'Weaker' risk profiles, and their SCPs vary primarily based on their leverage metrics. Its payback ratio is at the lower end of 'aaa', similar to Konya Metropolitan Municipality (BB-/Stable) and Yerevan City (BB-/Positive) and slightly above that of Istanbul Metropolitan Municipality (BB-/Stable). Mersin's 'bbb-' SCP is in line with Istanbul's and Yerevan City's and below Manisa Metropolitan Municipality's 'bbb'. Issuer Profile Mersin is an important logistics hub with connections to the Middle East and the Black Sea. It has a population of two million, accounting for 2.3% of the national total. Mersin's GDP per capita in 2024 was TRY444,761, 88% 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: '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 the 2026-2030 rating case. - Payback ratio: 4.2x - Actual DSCR: 1.5x - Fiscal debt burden: 79.9% 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 21.9% (67.4% year on year for 2021-2025) due to expected slowing nominal GDP growth of about 21% on average - Tax revenue CAGR of 22.6 (67.8% year on year in 2021-2025) - Current transfers CAGR of 22.5% (67.6% year on year in 2021-2025) - Opex CAGR of 24.7% (66.8% year on year for 2021-2025) due to expected slowing inflation of about 21% on average - Negative net capital balance averaging TRY15.7 billion a year in 2026-2030 - Apparent cost of debt on average 19.6%, below the average cost of debt in 2025, based on the higher share of foreign-currency borrowing - Average US dollar/Turkish lira assumptions based on Fitch's sovereign estimate for 2026 at 51, for 2027 at 59 and for 2028 at 67, with an annual additional depreciation of 10% for 2029-2030 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 Mersin'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 an upgrade of Mersin's IDRs. Climate Vulnerability Signals The results of its Climate.VS screener did not indicate an elevated risk for Mersin. 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: 10 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 Mersin's IDRs are capped by Turkiye's sovereign IDRs. Entity/Debt Rating Prior ----------- ------ ----- Mersin Metropolitan Municipality LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Natl LT AA+(tur) Affirmed AA+(tur) =========================== U N I T E D K I N G D O M =========================== BIRKENSTOCK HOLDING: Fitch Affirms 'BB+' IDR, Outlook Stable ------------------------------------------------------------ Fitch Ratings has affirmed Birkenstock Holding plc's Long-Term Issuer Default Rating (IDR) at 'BB+'. The Outlook is Stable. Fitch has also assigned its upcoming EUR900 million senior unsecured notes an expected rating of 'BB+(EXP)' with a Recovery Rating 'RR4'. The final rating is contingent on the receipt of final documents conforming to information already reviewed. The rating affirmation reflects its expectation that Birkenstock will maintain strong operating performance with robust credit metrics and increasing leverage headroom from FY27 (financial year to September) after the announced debt-funded share buyback in FY26. Birkenstock's rating is supported by healthy operating profitability, strong free cash flow (FCF), and a proven commitment to a conservative financial policy, mitigating its business model concentration risks. Key Rating Drivers Leverage Headroom Temporarily Reduced: Fitch expects EBITDA gross leverage to rise to 2.1x in FY26, slightly above the negative sensitivity, driven by its planned share buyback (SBB) of about EUR470 million, partly funded by the new EUR900 million debt, in addition to the USD250 million SBB announced in May. The leverage rise is also driven by weaker earnings growth due to the US tariffs and FX challenges. Fitch forecasts EBITDA gross leverage to average 1.7x in FY27-FY29 (net: 1.0x), building more comfortable leverage headroom. This leverage is more conservative than the 'BB' mid-point for Fitch-rated consumer products companies, reflecting the company's high product concentration, moderate scale and niche market position. Financial Policy is Key: The rating affirmation reflects its view of the company's commitment to maintaining a conservative leverage profile. Birkenstock has adhered to a clear financial policy of deleveraging and has a commensurate record since its L Catterton acquisition, including a public commitment to reduce net debt/EBITDA (IFRS 16, as calculated by the company) to below 1.0x. Adherence to this conservative financial policy supports the rating at the upper end of the 'BB' category, balancing its business risks. Healthy Profitability Despite Near-Term Challenges: Fitch expects the US tariffs and FX movements to pressure profitability in FY26, reducing EBITDA margin to 28%, before recovering towards 29% by FY28 on growing scale benefits and moderating FX challenges. Fitch views these margins as very strong, commensurate with the upper end of the investment-grade category for the sector, reflecting the company's strong brand, pricing power and high vertical integration. Strong Growth Continues: Fitch forecasts Birkenstock's revenue to grow in the low-teens in FY26, following some improvement from the 9% sales growth reported for 1HFY26, before moderating towards the high single digits over FY27-FY29. Fitch sees potential for higher revenue growth with reduced FX movements and continued strong consumer demand. Growth will also be supported by ongoing manufacturing capacity expansion and the roll out of new stores across key geographies, and disproportionately strong growth in APAC. Birkenstock's actions to mitigate the impact of trade tariffs include stock build-up, strong pricing power and logistic optimisation in the US. Strong Brand; Effective Distribution: The rating reflects Birkenstock's continued rapid revenue growth despite muted consumer sentiment in many of its markets, with the brand maintaining wide appeal and a loyal customer base, particularly in the US and Europe. This is driven by the product's unique and increasingly appreciated qualities of comfort, innovation, and an effective distribution model, with careful allocation of products across markets and channels, including a growing direct-to-consumer online sales channel. Scale, Diversification Constrain Ratings: The ratings are constrained by Birkenstock's narrow product diversification and moderate scale for the sector. The fashion appeal in its product offering, with various designs and colours, increases its vulnerability to consumer preference changes. Most of its sales are driven by its five core models, which are offered in a wide range of variants, with a concentration on sandals and the premium end. However, the share of closed-toe footwear has been gradually increasing, to over 30% of sales in FY25. These operating risk factors are balanced by strong profitability, healthy FCF margins and conservative leverage. Gradual Product Diversification: Birkenstock is diversifying its products with a variety of styles under each model to meet regional appetite, different usage occasions and evolving consumer trends and preferences, plus expansion into lower- and higher-priced items and closed-toe products. Fitch believes diversified geographical growth, the trend towards more casual clothing and increasing consumer health consciousness could be beneficial for Birkenstock's orthopedic offering and help reduce risks related to a narrow product portfolio. Peer Analysis Birkenstock's credit profile is comparable with Levi Strauss & Co.'s (BBB-/Stable). Both have high concentration on one brand. Birkenstock has comparable conservative financial discipline, greater penetration into the direct-to-consumer channel and higher profitability following deleveraging. The one-notch rating differential is due mainly to Levi Strauss's much greater scale and diversification by product. Birkenstock has a more concentrated product portfolio than Spectrum Brands, Inc. (BB/Stable), a well-diversified manufacturer of home and garden, personal care and pet care products. However, Spectrum has much lower profitability, with an EBITDA margin of 9%-10%, leading to Birkenstock's EBITDA being about twice as large as Spectrum's and stronger FCF generation. Fitch also projects leverage to be marginally stronger, compared with its expectations for Spectrum at about 2.0x in 2026-2028. Birkenstock's business profile is weaker than that of Reynolds Consumer Products Inc. (BB+/Stable), a leading company in the U.S. aluminium foil industry, due to Reynolds' greater product diversification. This is offset by Birkenstock's stronger financial profile, characterised by higher profitability, a stronger FCF margin, and lower gross leverage compared with Reynolds' projected EBITDA leverage of 2.5x. Mattel, Inc. (BBB-/Stable) is a leading global toy manufacturer with a stronger business profile than Birkenstock, due to its larger market size and greater diversification, which justify its higher rating. Birkenstock has a higher EBITDA margin and lower leverage metrics but maintains high concentration within its product portfolio. Fitch’s Key Rating-Case Assumptions - Organic growth of 10% in FY26, followed by a CAGR of 8% over FY27-FY29, driven by price and volume growth across all markets - EBITDA margin declining to 28.1% in FY26 due to cost challenges related to tariffs and FX, before gradually improving toward 29% over FY27-FY29 - Change in working capital averaging approximately 2.8% of sales over FY26-FY29 - Capex of about EUR130 million in FY26, followed by normalisation to EUR110 million over FY27-FY29 - SBB at about EUR700 million in FY26, followed by EUR200 million a year to FY29 - No M&A Corporate Rating Tool Inputs and Scores Fitch scored the issuer as follows, using its Corporate Rating Tool (CRT) to produce the Standalone Credit Profile (SCP): Business and financial profile factors (assessment, relative importance): management ('bbb-', Lower), sector characteristics ('bbb-', Moderate), market and competitive positioning ('bb+', Moderate), diversification and asset quality ('bb-', Higher), company operational characteristics ('bbb-', Moderate), profitability ('a-', Lower), financial structure ('a', Moderate), and financial flexibility ('bbb', Moderate). The quantitative financial subfactors are based on custom CRT financial period parameters: 40% weight for the forecast year FY26, 40% for the forecast year FY27 and 20% for the forecast year FY28. The governance assessment of 'good' has no impact. The operating environment assessment of 'aa-' 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 • Unsuccessful implementation of the commercial strategy or weakening brand appeal leading to EBITDA declining below EUR500 million • EBITDA margin falling below 27% and failure to maintain mid-single digit FCF margins • Absorption of resources in connection to growth, or financial policy changes causing gross EBITDA gross leverage to rise above 2.0x or EBITDA net leverage above 1.5x Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Fitch does not envisage an upgrade in the medium term, unless it maintains its successful commercial strategy leading to Fitch-adjusted EBITDA growth towards USD1 billion. This would need to be accompanied by increased financial policy clarity, including on shareholder distributions, supporting consistent FCF margins in the high single digits and EBITDA gross leverage trending towards 1.0x Liquidity and Debt Structure Fitch expects Birkenstock to maintain comfortable liquidity for FY26-FY29. This comprises Fitch-calculated EUR280 million cash on balance sheet at FYE25, strong FCF generation through to FY29 and the availability of EUR100 million from EUR210 million revolving credit facility due in 2029. The new notes will extend Birkenstock's debt maturity profile to 2033, with no debt maturity before February 2029, when the EUR375 million and USD280 million term loan B (USD119 million outstanding as of March 2026) tranches fall due. The mandatory 5% amortisation of the U.S. dollar term loan B is the only scheduled debt repayment over the rating horizon. Issuer Profile Birkenstock is a Germany-based manufacturer of branded casual footwear. 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 Birkenstock. 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 ----------- ------ -------- ----- Birkenstock Holding plc LT IDR BB+ Affirmed BB+ Birkenstock Financing S.a.r.l. senior unsecured LT BB+ Affirmed RR4 BB+ Birkenstock Group B.V. & Co. KG senior unsecured LT BB+(EXP) Expected Rating RR4 BIRKENSTOCK HOLDING: S&P Affirms BB+ ICR & Alters Outlook to Neg. ----------------------------------------------------------------- S&P Global Ratings revised the outlook on its rating on Birkenstock Holding PLC to negative from stable, and affirmed its 'BB+' long-term issuer credit rating. At the same time, S&P assigned its 'BB+' issue rating on the new proposed EUR900 million senior unsecured notes due 2033 issued by Birkenstock Group B.V. & Co. KG with a recovery rating of '3'. The negative outlook reflects Birkenstock's limited rating headroom amid increased leverage pro forma for the transaction due to higher-than-expected discretionary spending in share buyback with adjusted leverage expected to approach 3.0x before deleveraging again toward 2.5x in 2027. Birkenstock Group B.V. & Co. KG (a subsidiary of Birkenstock Holding PLC) plans to issue a new EUR900 million senior unsecured note due 2033 to refinance the existing EUR429 million senior unsecured note (EUR432 million including accrued interests) due 2029 and to fund strategic initiatives including share buybacks (subject to market conditions) and other corporate purposes. In its base case, S&P assumes cash proceeds to be used for share buybacks. This is in addition to the $250 million accelerated share repurchase agreement the company announced in May that is expected to be completed by end-June 2026. In second-quarter of fiscal 2026 (second quarter ended March 31), Birkenstock Holding PLC (Birkenstock) posted robust operating performance with revenue growth of 14% on a constant currency basis supported by all geographies and channels. The unfavorable foreign exchange (FX) impact and tariffs affect the company's EBITDA margin. Birkenstock confirmed its full year guidance of 13%-15% revenue growth in constant currency and company's adjusted EBITDA margin of 30.0%-30.5% (down from 31.8% in previous year). Pro forma for the proposed transaction, S&P expects 2026 S&P Global Ratings-adjusted debt to EBITDA to increase to about 3.0x, up from 2.1x posted in 2025, and to progressively reduce to about 2.5x in 2027 as the company will focus on deleveraging. A higher EBITDA base and good cash flow conversion despite annual capital expenditure (capex) of about EUR120 million and potential recurring share buybacks of $200 million per year mainly underpins the expected deleveraging. S&P said, "The transaction represents a negative deviation in the expected deleveraging trend of the company compared with our previous base-case scenario. As of end of fiscal 2025 (ended Sept. 30, 2025), the company posted S&P Global Ratings-adjusted debt to EBITDA of 2.1x. Under our previous base case, we expected S&P Global Ratings-adjusted leverage to remain broadly flat for fiscal 2026. Accounting for the proposed transaction, we now forecast S&P Global Ratings-adjusted debt to EBITDA 2026 for Birkenstock of about 3.0x. We expect that the company will reduce leverage to about 2.5x in 2027 and between 2.0x-2.5x the following year, under the assumption of about $200 million of potential recurring share buyback per year but without assuming any further cash outflow related to additional share buyback initiatives. We think that Birkenstock's financial policy remains generally supportive despite additional share buybacks to support L Catterton's progressive exit. Although we anticipate the company will focus on deleveraging, we also note that the potential for additional future share buyback could introduce higher uncertainty around the pace of future deleveraging. In line with company's guidance, under our base case we factor about $200 million worth of share repurchase per year. Any additional share buyback could limit the deleveraging of the company and further reduce the already limited rating headroom. We understand that share buyback is intended to facilitate L Catterton's gradual relinquishing of control of the company, while simultaneously increasing the share of free float (about 20.3% as of June 15, 2025) to support liquidity of stock." Birkenstock launched a new EUR900 million senior unsecured note to refinance its existing bond and to fund strategic initiatives including share buybacks and other corporate purposes. The company plans to use transaction cash proceeds to repay its EUR429 million senior unsecured note (EUR432 million including accrued interests) maturing in 2029, while the remaining portion (about EUR471 million) will be utilized for strategic initiatives including share buybacks (subject to market conditions) and other corporate purposes. The new instrument will have a tenure of seven years, maturing in 2033, and will rank pari passu with the rest of the capital structure. A process of security release in relation to the existing term loan Bs (TLBs; both euro and U.S. dollar) and the revolving credit facility (RCF) is intended to be carried out in connection with the bond offering. Pro forma, the transaction brings EUR471 million additional debt to the current capital structure. The company has also recently drawn EUR110 million under the company's EUR225 million RCF due in 2029 (of which EUR15 million has been separated into ancillary facilities) in connection with the recent $250 million accelerated share repurchase announced in May 2026 and expected to be completed by June 30, 2026. S&P said, "We expect total S&P Global Ratings-adjusted debt of about EUR1.96 billion as of end-2026 consisting of EUR375 million euro-denominated TLB, EUR99.8 million euro-equivalent U.S. dollar-denominated TLB, EUR900 million of new senior unsecured notes, about EUR231 million vendor loan, about EUR230 million of lease liabilities, and about EUR310 million tax receivables agreement. We continue to net the accessible cash on the balance sheet (about EUR176 million as of June 1, 2026) in our adjusted debt calculation, and we maintain a positive view on Birkenstock's disciplined approach with deleveraging remaining a key strategic priority for the company." S&P said, "We think that Birkenstock will maintain its underlying operating performance despite an overall challenging market environment. On the operational side, the company continues to demonstrate a robust performance despite macroeconomic and geopolitical challenges. Birkenstock maintains a strong market positioning through its ability to recruit new customers and diversify its product portfolio, while maintaining a loyal existing customer base. During the second quarter of 2026, Birkenstock posted revenue of EUR618 million (up 14% year on year on a constant currency basis) with the Americas (+14%) and Asia Pacific (+30%) as the fastest growing regions. While business-to-business (15% growth at constant currency in the second quarter) remains a key distribution channel to attract young customers specifically, the company continues to invest in the expansion of its direct to customer channel (12% growth at constant currency in the second quarter) targeting the opening of a total of 40 new stores in 2026. For the full year 2026, we now expect reported revenue growth in the range of 9%-10% affected by FX headwinds. We think that the business-to-business (B2B) will continue to outpace direct-to-consumer over the next couple of years, as this remains the key growth strategy for the company. In terms of profitability, we anticipate tariff, channel mix, and FX headwinds will negatively affect the S&P Global Ratings-adjusted EBITDA margin, which we forecast at about 28.5%-29.0% for 2026 (down from 30.8% in 2025), slightly improving in 2027 to about 29.5%-30.0%. We think that the company has multiple levers at its disposal to partially mitigate the anticipated headwinds, including sales price adjustments and a better absorption of fixed costs. The company's plans to increase production capacity are progressing and it has spent about half of its annual capex budget, which we estimate at about EUR120 million for full year 2026 (in line with the company's guidance of EUR110 million-EUR130 million). Notably, the existing Arouca and Görlitz plants are expected to be completed by the end of 2026, while the new brownfield facility in Wittichenau should be ready for production later in 2027. We anticipate these investments will allow for better capacity absorption in Birkenstock's manufacturing facilities, further contributing positively to offset market volatility and protecting the EBITDA margin. We expect annual free operating cash flow (FOCF) to remain strong at about EUR210 million-EUR240 million in 2026, strengthening to about EUR290 million-EUR320 million in 2027." The negative outlook reflects Birkenstock's limited rating headroom amid increased leverage pro forma for the transaction due to higher-than-expected discretionary spending in share buyback with S&P Global Ratings-adjusted leverage expected to approach 3.0x before deleveraging toward 2.5x in 2027. S&P said, "We could take negative rating action on Birkenstock if it could not show a clear deleveraging trend such that adjusted debt to EBITDA approaches 2.5x in 2027 with an expectation to further reduce toward 2.0x over the following year, or if the company generates significantly lower-than-expected annual FOCF. This could happen, for example, if the company undertakes higher than currently anticipated share buyback or if subdued consumer confidence weighed on the company's topline growth and profitability. "We could consider revising the outlook to stable if the company shows steady EBITDA growth resulting in a quicker than expected deleveraging path such that debt to EBITDA decreases close to 2.0x. This would also depend on the company's ability to maintain sizable positive FOCF generation without additional discretionary spending for shareholder remuneration or merger and acquisition activities other than what is currently factored in our base case." BROOKING HIRE: Kroll Advisory Appointed as Joint Administrators --------------------------------------------------------------- Brooking Hire Limited was placed into administration in the High Court of Justice, Court Number CR-2026-004348. Philip Dakin and Benjamin John Wiles, both of Kroll Advisory Ltd, were appointed as Joint Administrators on June 3, 2026. The company engaged in specialised construction activities. Its registered office and principal trading address is Brush House, Star Road, Partridge Green, West Sussex, RH13 8RA. The Joint Administrators can be contacted at: Philip Dakin Benjamin John Wiles Kroll Advisory Ltd The News Building Level 6 3 London Bridge Street London SE1 9SG Further information: Contact: Jodi Sheridan Email: jodi.sheridan@kroll.com Tel: +44 (0) 20 7089 4751 Kroll Advisory Ltd CD&R FIREFLY: Moody's Rates Amended & Extended Loans 'B2' --------------------------------------------------------- Moody's Ratings has assigned B2 instruments ratings to CD&R Firefly 4 Limited's (MFG) proposed new GBP backed senior secured term loan B12 and EUR backed senior secured term loan B13, with a combined face value of up to GBP3,563 million equivalent, the GBP716 million backed senior secured revolving credit facility and the GBP200 million backed senior secured letter of credit facility, all due 2031 and to be borrowed by CD&R Firefly Bidco Plc. All other ratings, including MFG's B2 corporate family rating (CFR), and the stable outlook are unaffected. The new issuance will repay and effectively reprice CD&R Firefly Bidco Plc's existing term loan facilities and upsize the facilities by up to GBP550 million. On completion of the transaction the instrument ratings of the existing term loans will be withdrawn. RATINGS RATIONALE The B2 instrument ratings assigned to MFG's amended and extended senior secured loans due 2031 are in line with the ratings of the company's other senior secured debt facilities. MFG will use the net proceeds from the recapitalisation, together with around GBP100 million of cash on balance sheet, to fund a GBP600 million distribution to holders of preferred shares. The proposed transaction will increase leverage by around 0.8x to 6.2x, as measured by Moody's-adjusted gross Debt/EBITDA ratio, pro forma based on the 12 months ended March 31, 2026. While the transaction increases MFG's leverage to the upper end of the range Moody's considers appropriate for the B2 rating, Moody's expects continued EBITDA growth to support a reduction in leverage to below 6.0x by year-end 2026. MFG has demonstrated a track record of deleveraging, with leverage declining to 5.4x in March 2026 from 5.8x in December 2025 and 6.6x in December 2024, following its peak after the acquisition of Morrisons (Market Holdco 3 Limited)'s petrol filling stations. This improvement was achieved despite a GBP310 million dividend recapitalisation completed in January 2025. The company's performance in the first quarter of 2026 benefited from strong fuel volume growth of 5% post increase in pole prices due to the Middle East conflict, as consumers were seeking lower fuel prices, an effect which is unlikely to repeat. MFG's B2 ratings continue to be supported by its highly resilient and cash-generative business model with a lean cost structure, underpinned by its predominantly company-owned franchise-operated (COFO) model. The company is investing in the expansion of its electric vehicle (EV) charging network and in enhancements to its retail offering, including food-to-go and valeting services. MFG has committed to invest more than GBP400 million in EV charging infrastructure over 10 years, starting from 2021. Despite elevated capital spending, which Moody's expects to be around GBP120 million annually, and higher interest costs as the debt balance continues to grow, Moody's forecasts Moody's-adjusted free cash flow (excluding shareholder distributions) of around GBP100 million in 2026 and 2027. RATING OUTLOOK The stable outlook reflects Moody's expectations that MFG will continue achieving organic revenue and gross profit growth over the next 12-18 months. The outlook also reflects Moody's expectations that the company will maintain a balanced financial policy and any shareholder distributions will not lead to material re-leveraging. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The ratings could be upgraded if MFG's Moody's-adjusted gross Debt/EBITDA sustainably reduces below 5.25x and its Moody's-adjusted (EBITDA–Capex)/Interest expense exceeds 1.75x. An upgrade would also require the company to maintain broadly stable fuel volumes and margins. The ratings could be downgraded if MFG's Moody's-adjusted gross Debt/EBITDA increases above 6.25x; Moody's-adjusted (EBITDA–Capex)/Interest expense decreases below 1.25x; Moody's-adjusted free cash flow turns negative for an extended period or liquidity weakens. The principal methodology used in these ratings was Retail and Apparel published in September 2025. CORPORATE PROFILE Headquartered in St Albans, England, MFG is the largest independent forecourt operator in the UK with 1,219 stations, operating under multiple fuel brands. The company mainly operates petrol filling stations and offers convenience retail stores and food-to-go-services. In 2025, MFG generated GBP7.7 billion of revenue and a company-adjusted EBITDA of GBP705 million. The company has been majority owned by funds managed by private equity firm Clayton Dubilier & Rice, LLC since 2015, with Morrisons (Market Holdco 3 Limited) as minority shareholder. DRAX GROUP: S&P Affirms 'BB+' ICR & Alters Outlook to Stable ------------------------------------------------------------ S&P Global Ratings revised the outlook on both U.K.-based diversified energy business Drax Group Holdings Ltd. (Drax) and Drax Power Ltd. to stable from positive. Despite the limited headroom following the transaction, S&P thinks cash conversion will remain solid over 2026-2028 and metrics will remain above our 30% downside threshold. S&P said, "We also affirmed our 'BB+' long-term issuer credit ratings on Drax Group Holdings Ltd. and Drax Power Ltd. In addition, we affirmed our 'BB+' senior secured issue rating on the debt issued by Drax Finco Ltd., maintained the '3' recovery rating, and changed the recovery percentage to about 55% from about 60% recovery in the event of a default." On June 1, 2026, Drax Group Holdings Ltd. (Drax) announced its acquisition of Bluefield Solar Income Fund (BSIF) for about GBP548 million. The proposed acquisition is valued at about GBP1 billion, as BSIF has about GBP500 million of net debt on the balance sheet, and will be funded through debt. S&P said, "We regard as positive this diversification of Drax's portfolio, as it will lower the group's reliance on subsidised biomass generation while generating highly contracted revenue. However, the additional debt burden will reduce rating headroom, and we expect funds from operations (FFO) to debt will fall to 31% on average over 2026-2028 from 68% in 2025. "The outlook revision and rating affirmation follow Drax's announcement it has agreed to acquire U.K. solar and renewables company BSIF as part of its strategy to diversify earnings and broaden its base of generation assets. The proposed acquisition includes approximately 860 megawatts (MW) of operational and under-construction solar and onshore wind capacity, alongside a 2.9 gigawatt (GW) development pipeline for solar and battery energy storage systems (BESS). Of this pipeline, 1.2 GW of projects are at advanced stages, and we expect they will be completed by end-2029. While we project that credit metric headroom will tighten due to the acquisition, we view the added diversification and BSIF's largely contracted earnings positively." These new assets will complement Drax's existing portfolio of 2.6 GW biomass generation and 2.2 GW flexible generation, comprising operational pumped storge and hydro, as well as one open-cycle gas turbine (OCGT), together with two OCGTs and BESS assets in development. S&P said, "Consequently, we expect biomass to decline from 87% of generation earnings in 2025 to about 25% by 2029. This compares favorably to the earnings mix prior to the acquisition--when we expected Biomass to represent 40% of generation earnings in 2029--and reduces Drax's exposure to potential shifts in government support toward biomass in 2031. Further, the lower marginal costs of onshore wind and solar assets place them higher in the merit order than biomass, contributing to more efficient dispatch economics across the integrated portfolio. We view this as supportive of an improved business risk profile and a relaxation of our upside FFO to debt threshold by 5 percentage points to 40%." S&P said, "We expect revenue from the acquired BSIF portfolio will be underpinned by largely contracted cash flow, increasing the diversification and predictability of Drax's earnings and reducing its reliance on subsidized biomass. BSIF revenue was 92% contracted in 2025 and we expect it to remain above about 70% contracted through 2031. Most of the existing contracted revenue is underpinned by renewable obligation certificates (ROCs) which begin to roll off in 2033 and all expire by 2037, while pipeline solar and BESS are expected to be largely covered through contracts for difference (CfDs) with about 45% of CfDs for the 1.2 GW advanced projects already secured. Combined with Drax's existing contracted capacity, the group's largely contracted acquired earnings also support its business risk profile, in our view. The proposed acquisition will provide immediate earnings scale, with the new assets expected to contribute an additional GBP130 million average EBITDA annually over 2026-2028. Prior to the acquisition, S&P expected earnings from generation to fall significantly in absolute and relative terms in 2027 when the ROCs scheme for Drax Power Station expires and the bridge CfD comes into effect. Nevertheless, the proposed acquisition is dilutive of Drax's credit metrics, with FFO to debt decreasing to 31% over 2026-2028 from 68% in 2025, largely as a result of the purchase. The GBP561 million all-cash acquisition, with consolidation of about GBP500 million of debt, will be financed via debt. S&P said, "As a result, we expect Drax's net debt will rise to a peak of about GBP2 billion in 2026 and remain materially higher than pre-acquisition debt levels for the remainder of our forecast. We expect leverage will average 2.5x debt to EBITDA over 2026-2028, remaining above the group's target of 2x. That said, we consider it positive that the group has paused its share buyback program, supporting credit metrics and demonstrating a commitment to reaching the leverage target. Given the significantly reduced headroom for Drax's credit metrics over our forecast period, at the current rating level the group has limited capacity for further leverage-driven expansion. To support the acquisition, Drax has secured a financing bridge, which demonstrates the company's commitment to our strong liquidity assessment. We expect Drax to refinance this through a public bond issuance in the second half of 2026." S&P said, "The stable outlook reflects our expectation that Drax's weighted-average FFO to debt will be 31% for over 2026-2028. Despite the limited headroom following the BSIF acquisition, we think cash conversion will remain solid over this period and metrics will remain above our 30% downside threshold. The stable outlook also reflects our expectation that Drax will maintain its current financial policy of targeting debt to EBITDA of 2.0x and will trend toward that target by 2029. Our base case does not factor in any new large credit-dilutive acquisitions or any significant proceeds from divestments. "We could lower the ratings if Drax's credit metrics are consistently below FFO to debt of about 30% over the next 24 months. This could result, for instance, from significant underperformance of Drax's generation assets, notably with substantial unplanned outages. It could also result from markedly lower power prices and ROC revenue than we anticipated. However, we consider this scenario as unlikely over the next 12-18 months, given the level of free cash flow and contracted power sales for the group over this period. "We could raise the ratings if Drax consistently achieves FFO to debt above 40% while pivoting and diversifying away from subsidized biomass earnings." ENQUEST PLC: Moody's Puts 'B3' CFR on Review for Upgrade -------------------------------------------------------- Moody's Ratings has placed on review for upgrade the B3 corporate family rating and the B3-PD probability of default rating of EnQuest plc ("EnQuest"). Moody's also placed on review for upgrade the Caa1 instrument rating of the $675 million backed senior unsecured notes issued by the company. Previously, the outlook was positive. On June 10, 2026, EnQuest announced it had agreed to acquire interests in four offshore production sharing contracts in Malaysia from subsidiaries of Petroliam Nasional Berhad (PETRONAS, A2 stable) for a maximum total consideration of $833 million. Management expects closing on December 31, 2026, subject to shareholder approvals and other customary completion conditions. RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The proposed acquisition represents a material, credit-positive expansion for EnQuest, significantly increasing production and reserves while also improving asset diversification. Pro forma production would more than double to over 100 kboepd, with 2P reserves increasing by c.85% and a substantial uplift in contingent resources, supporting a stable production profile over the next few years. At the same time, the assets are low-cost (c.$10/barrel) and drive a meaningful reduction in group unit operating costs, enhancing margins and lowering cash flow breakeven. The transaction would also increase the company's exposure to Malaysia (A3 stable), a core and stable operating region where EnQuest has an established track record, partially mitigating the execution risks typically associated with the integration of a significantly enlarged asset base. EnQuest will fund the acquisition with a combination of cash on balance sheet and drawings under the reserves based lending facility, which is being increased to $700 million through an accordion. As a consequence, at the end of 2025, Moody's estimates that pro forma for the proposed acquisition, Moody's-adjusted gross debt / average daily production declines to below $20,000/boe versus EnQuest's standalone levels of c. $25,000/boe. The review will focus on: (i) the transaction concluding as planned upon receipt of shareholder approvals and other customary completion conditions; and (ii) the impact of the proposed acquisitions on EnQuest's credit profile, taking into account the combined business plan, financial policy, and the company's ability to maintain credit metrics commensurate with a higher rating on a sustained basis. Based on current information, Moody's anticipate that an upgrade of EnQuest's CFR might be limited to two notches at the conclusion of the review. As Moody's have previously stated, the ratings could be upgraded if EnQuest sustainably expands its production and reserves and Moody's-adjusted RCF/debt remains sustainedly above 25%. An upgrade would also require EnQuest to continue generating positive FCF and maintaining good liquidity through the cycle. Conversely, the ratings could be downgraded if EnQuest's production sustainedly declines below 40 kboepd or if RCF/debt falls below 15%, the company adopts a more aggressive financial policy, such as increasing leverage, or if liquidity weakens. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Independent Exploration and Production published in February 2026. The net effect of any adjustments applied to rating factor scores or scorecard outputs under the primary methodology(ies), if any, was not material to the ratings addressed in this announcement. COMPANY PROFILE EnQuest is a UK-based independent energy company operating in the UK North Sea and Southeast Asia. In 2025, the company produced an average of 45.6 kboepd, including the full annual production from Harbour Energy plc's (Baa2, negative) Vietnam business acquired earlier that year. EV METALS: BTG Begbies Appointed as Joint Administrators -------------------------------------------------------- EV Metals Group PLC was placed into administration in the High Court of Justice, Court Number CR-2026-004256. Paul Cooper and Paul Robert Appleton, both of BTG Begbies Traynor (London) LLP, were appointed as Joint Administrators on June 1, 2026. The company specialised in mining of other non-ferrous metal ores. Its registered office is 6th Floor, 99 Gresham Street, EC2V 7NG. Its principal trading address is Ground Floor, 8 St Georges Terrace, Perth, WA 6000, Australia. The Joint Administrators can be contacted at: Paul Cooper Paul Robert Appleton BTG Begbies Traynor (London) LLP Level 33 One Canada Square London E14 5AB Further information: Contact: Edward Gordon Tel: 020 7400 7900 Email: RC-Team@btguk.com BTG Begbies Traynor (London) LLP GRADEWELL PLANT: BTG Begbies Appointed as Joint Administrators -------------------------------------------------------------- Gradewell Plant & Haulage Ltd was placed into administration in the High Court of Justice, Court Number CR-2026-BHM-208. Amie Helen Johnson and Constantinos Pedhiou, both of BTG Begbies Traynor (Central) LLP, were appointed as Joint Administrators on June 3, 2026. The company specialised in rental of plant and machinery. Its registered office is 73 Field Lane, Brentford, Middlesex, TW8 8NA. Its principal trading address is Appspond Lane, St Albans, AL2 3NL. The Joint Administrators can be contacted at: Amie Helen Johnson Constantinos Pedhiou BTG Begbies Traynor (Central) LLP Suite 501, Unit 2 94A Wycliffe Road Northampton NN1 5JF Further information: Contact: Danielle Craven Email: danielle.craven@btguk.com Tel: 020 8370 7250 BTG Begbies Traynor (Central) LLP HOPS HILL 6: Fitch Assigns 'BB+(EXP)sf' Rating on Class E Notes --------------------------------------------------------------- Fitch Ratings has assigned Hops Hill No.6 plc expected ratings. The assignment of final ratings is contingent on the receipt of final documents conforming to information already reviewed. Entity/Debt Rating ----------- ------ Hops Hill No.6 plc A LT AAA(EXP)sf Expected Rating B LT AA+(EXP)sf Expected Rating C LT A+(EXP)sf Expected Rating D LT BBB+(EXP)sf Expected Rating E LT BB+(EXP)sf Expected Rating Transaction Summary Hops Hill No.6 plc will be a securitisation of buy-to-let (BTL) mortgages originated in England and Wales by Keystone Property Finance Limited (Keystone). The transaction will include a pre-funding period between the closing date and the first interest payment date (IPD) and will allow for product switches of up to 5% of the post pre-funding pool balance (expected to be about GBP20 million), until the first optional redemption date. Keystone also acts as servicer. KEY RATING DRIVERS Newly Originated Assets: The loans in the mortgage pool were originated entirely in 2025 (36%) and 2026 (64%). The pool has a weighted average (WA) original/current loan-to-value (OLTV/CLTV) of 72.9% and a Fitch-calculated WA interest coverage ratio (ICR) of 89.7%, leading to a WA sustainable LTV (sLTV) of 83.7%. The WA LTVs and ICR are in line with peer transactions rated by Fitch. Keystone's target market consists of professional landlords and limited companies with large portfolios. The borrower concentration, while comparable with peer transactions rated by Fitch, is at the upper end of that range. Pre-Funding Mechanism: The transaction documentation permits the inclusion of additional mortgage loans by the first IPD to be purchased with the proceeds of the over-issuance at closing (pre-funding). The transaction will have a four-month pre-funding period between the closing date and the first IPD during which proceeds remaining after the notes' issuance can be used to purchase additional loans up to 20% of the deal size. Principal collections during this period can also be used to purchase new loans. The additional loans must meet additional mortgage loan conditions to be included. Fitch believes the conditions required for the inclusion of additional mortgage loans largely mitigate the risk of negative portfolio migration. Furthermore, the current portfolio is already close to most of the limits outlined in these conditions. Therefore Fitch applied no further stress. Alternative Prepayment Rates: The mortgage pool will be made up almost exclusively of fixed-rate loans, which are subject to a steep roll-off in the fourth and fifth years of the transaction's life. Fitch therefore applied an alternative high prepayment stress tracking the fixed-rate reversion profile of the pool. The prepayment rate applied is floored at 10% during periods of no reversion and capped at a maximum of 40% a year during reversionary peaks. Fixed Hedging Schedule: The pool will consist of fixed-rate loans that will be hedged through an interest rate swap. The swap will be based on a pre-defined schedule (including the pre-funded loans), rather than on the balance of fixed-rate loans in the pool. If loans prepay or default, the issuer may be be over-hedged. The excess hedging is beneficial to the issuer in rising interest-rate scenarios and detrimental in decreasing interest-rate scenarios. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The transaction's performance may be affected by changes in market conditions and the economic environment. Weakening economic performance is strongly correlated to increasing levels of delinquencies and defaults that could reduce the credit enhancement available to the notes. In addition, unexpected declines in recoveries could result in lower net proceeds, which may make some notes susceptible to negative rating action, depending on the extent of the decline in recoveries. Fitch conducts sensitivity analyses by stressing a transaction's base-case foreclosure frequency (FF) and recovery rate (RR) assumptions. Fitch found that a 15% increase in the WAFF and a 15% decrease in the WARR indicated model-implied downgrades of one notch each to the class B and C notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade Stable to improved asset performance driven by stable delinquencies and defaults would lead to increasing credit enhancement and, potentially, upgrades. Fitch tested an additional rating sensitivity scenario by applying a decrease in the WAFF of 15% and an increase in the WARR of 15%. This would lead to a model-implied upgrade of one notch to the class B notes, and up to three notches each to the class D and E notes. The class A and C notes are at their highest achievable ratings and cannot be upgraded. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch reviewed the results of a third-party assessment conducted on the asset portfolio information, and concluded that there were no findings that affected the rating analysis. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ESG Considerations 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. INNOVARO TECHNOLOGY: BTG Begbies Appointed as Joint Administrators ------------------------------------------------------------------ Innovaro Technology Ltd, previously known as Annabelle Wolf Ltd, was placed into administration in the High Court of Justice, Court Number CR-2026-004328. Wayne MacPherson and Jamie Taylor, both of BTG Begbies Traynor (Central) LLP, were appointed as Joint Administrators on June 3, 2026. The company specialised in the wholesale of other office machinery and equipment. Its registered office and principal trading address is 57–61 Mortimer Street, London, W1W 8HS. The Joint Administrators can be contacted at: Wayne MacPherson Jamie Taylor BTG Begbies Traynor (Central) LLP 1066 London Road Leigh-on-Sea Essex SS9 3NA Further information: Contact: Yanish Gopee Email: Yanish.Gopee@btguk.com Tel: 01702 467255 BTG Begbies Traynor (Central) LLP LANDMARK MORTGAGE 3: S&P Affirms 'BB+(sf)' Rating on D Notes ------------------------------------------------------------ S&P Global Ratings raised its credit ratings on Landmark Mortgage Securities No.3 PLC's class B notes to 'AA+ (sf)' from 'AA (sf)' and C notes to 'A+ (sf)' from 'A (sf)'. At the same time, S&P affirmed its 'AAA (sf)' and 'BB+ (sf)' ratings on the class A and D notes, respectively. S&P also removed from CreditWatch negative its ratings on the class B, C, and D notes. S&P said, "The rating actions follow our May 5, 2026, placement of our ratings on the class B to D notes on CreditWatch negative due to the implementation of updates to our U.K. sector and industry variables under our global RMBS criteria. They also reflect our full analysis of the most recent transaction information and the transaction's current structural features." This transaction closed in 2007 and consisted primarily of interest-only loans, resulting in a gradual decrease in the pool factor to 20.2% by January 2026. Arrears have dropped from a peak of 24.4% in April 2025 to 19.8%. Cumulative losses total 6.3%. S&P said, "After applying our updated sector and industry variables, the overall effect on our credit analysis was a decrease in the weighted-average foreclosure frequency (WAFF) at all rating levels." The decrease was largely due to lower anchor default probabilities, lower loan-to-value (LTV) adjustments, a smaller originator adjustment, decreased arrears adjustment, and a lower loan purpose adjustment. These reductions were significantly offset by increases in the seasoning and self-certified adjustments. S&P said, "Our weighted-average loss severities (WALS) have increased at all rating levels since our previous review, largely due to 50% credit being applied to the U.K. House Price Index for all loans in the portfolio, which has increased the current LTV ratio. We removed the 15% valuation haircut applied in our previous review." Credit analysis results Rating level WAFF (%) WALS (%) Credit coverage (%) AAA 44.70 29.93 13.38 AA 37.04 24.63 9.12 A 32.86 16.02 5.26 BBB 28.83 11.64 3.36 BB 24.58 8.62 2.12 B 23.57 6.05 1.43 WAFF--Weighted-average foreclosure frequency. WALS--Weighted-average loss severity. The reserve fund stands at 97% of its required level, triggering a breach of one of the payment thresholds. This also prevents pro rata amortization of the notes until the fund reaches the necessary amount. Since the transaction amortizes sequentially, the available credit enhancement for each rated class of notes is gradually increasing. The liquidity facility is sized at 10% of the outstanding notes' balance. S&P said, "We affirmed our 'AAA (sf)' rating on the class A notes because our credit and cash flow results indicate their available credit enhancement remains commensurate with the rating. "Under our credit and cash flow analysis, the available credit enhancement for the class B and C notes are commensurate with higher ratings than those currently assigned. We therefore raised our ratings on these classes of notes. "Although the class D notes passed cash flow stresses at higher rating levels than that assigned, we affirmed the rating to reflect their available credit enhancement and relative position in the capital structure. Our rating also reflects the high arrears, considering the sensitivity to an increase in arrears from geopolitical risks leading to further cost of living increases, and the tail-end risk stemming from the significant concentration of interest-only loans maturing in 2032. We also removed from CreditWatch negative our ratings on the class B, C, and D notes. "Counterparty risk does not constrain the ratings as we consider the transaction to be in line with our counterparty criteria." Macroeconomic forecasts and forward-looking analysis S&P said, "We expect U.K. inflation to remain above the Bank of England's 2% target in 2026, and we forecast a 2.6% year-on-year change in house prices in the fourth quarter of 2026. Given our current macroeconomic forecasts and forward-looking view of the U.K. residential mortgage market, we performed additional sensitivities relating to higher default levels due to increased arrears and extended recovery timings. The sensitivity analysis results indicate a deterioration consistent with our credit stability considerations in our rating definitions." Landmark Mortgage Securities No.3 PLC is an RMBS securitization of mortgage loans secured on U.K. properties, of which 52% are buy-to-let. The loans were originated by Unity Homeloans Ltd, Infinity Mortgages Ltd, and Amber Homeloans Ltd. between 2005 and 2007. MUNIHIRE OPERATED: Kroll Advisory Appointed as Joint Administrators ------------------------------------------------------------------- Munihire Operated Limited was placed into administration in the High Court of Justice, Court Number CR-2026-004309. Philip Dakin and Benjamin John Wiles, both of Kroll Advisory Ltd, were appointed as Joint Administrators on June 3, 2026. The company enaged in specialised construction activities. Its registered office and principal trading address is Brush House, Star Road, Partridge Green, West Sussex, RH13 8RA. The Joint Administrators can be contacted at: Philip Dakin Benjamin John Wiles Kroll Advisory Ltd The News Building Level 6 3 London Bridge Street London SE1 9SG Further information: Contact: Jodi Sheridan Email: jodi.sheridan@kroll.com Tel: +44 (0) 20 7089 4751 Kroll Advisory Ltd PEARL BRIDGING: S&W Partners Appointed as Joint Administrators -------------------------------------------------------------- Pearl Bridging Limited was placed into administration in the High Court of Justice, Court Number CR-2026-003079. Clare Lloyd and Henry Anthony Shinners, both of S&W Partners LLP, were appointed as Joint Administrators on June 3, 2026. The company specialised in financial intermediation. Its registered office is c/o BTG Begbies Traynor, 31st Floor, 40 Bank Street, Canary Wharf, E14 5NR. Its principal trading address is 2nd Floor, 314 Regents Park Road, Finchley, London, N3 2JX. The Joint Administrators can be contacted at: Clare Lloyd Henry Anthony Shinners S&W Partners LLP c/o Restructuring 45 Gresham Street London EC2V 7BG Further information: Contact: Natalya Ageyeva Tel: 020 4617 5500 S&W Partners LLP PIERPONT BTL 2021-1: S&P Affirms 'BB+(sf)' Rating on E-Dfrd Notes ----------------------------------------------------------------- S&P Global Ratings raised its credit ratings on Pierpont BTL 2021-1 PLC's class B-Dfrd notes to 'AA+ (sf)' from 'AA (sf)', C-Dfrd notes to 'AA (sf)' from 'A (sf)', and D-Dfrd notes to 'A (sf)' from 'BBB (sf)'. At the same time, S&P affirmed its 'AAA (sf)' rating on the class A notes and 'BB+ (sf)' rating on the class E-Dfrd notes. S&P removed its ratings on the class D-Dfrd and E-Dfrd notes from CreditWatch positive. S&P said, "The rating actions follow the placement of 119 U.K. RMBS ratings on CreditWatch due to the implementation of updates to our U.K. sector and industry variables under our global RMBS criteria. They also reflect our full analysis of the most recent transaction information and the transaction's current structural features. "The performance of the loans in the collateral pool has remained stable since our previous review. Based on our calculation methodology, 30+ days arrears decreased to 1.47% in February 2026 compared to 2.98% in August 2025. Cumulative losses remain nil. The transaction's sequential priority of payments and the notes' amortization have increased the available credit enhancement for the class A, B-Dfrd, C-Dfrd, and D-Dfrd notes, with the pool factor falling to 46.5% in February 2026. Since closing, credit enhancement for these notes increased to 32.6%, 14.1%, 5.9%, and 1.3% from 15.2%, 6.6%, 2.8%, and 0.6%, respectively. "The prepayment rate decreased to 17.1% in February 2026 from 44.57% in August 2025. Given the high proportion of fixed-to-float loans in the pool (92.4% in February 2026), with reset dates concentrated in Q2 and Q3 2026, we performed a sensitivity analysis reflecting increased prepayments. "After applying our updated sector and industry variables, the overall effect in our credit analysis resulted in a decrease in the weighted-average foreclosure frequency (WAFF) at all rating levels. The decline is largely due to lower anchor default probabilities, reduced loan-to-value (LTV) adjustments, and a lower payment shock adjustment as well as improvements in arrears. "Our weighted-average loss severities (WALS) have decreased at the 'AAA' to 'BBB' rating levels primarily driven by our lower overvaluation assessment for London and the southeast. At the 'BB' to 'B' rating levels, the WALS have increased slightly due to an increase in our loss severity floors." Credit analysis results Rating level WAFF (%) WALS (%) Credit coverage (%) AAA 17.35 33.50 5.81 AA 11.75 28.05 3.30 A 8.88 18.51 1.64 BBB 6.16 13.38 0.82 BB 3.28 9.85 0.32 B 2.60 6.68 0.17 WAFF--Weighted-average foreclosure frequency. WALS--Weighted-average loss severity. S&P said, "The liquidity reserve fund is at its target level. Excess spread is 1.19% based on our calculation, which considers stressed servicing fees. "We affirmed our 'AAA (sf)' rating on the class A notes because our credit and cash flow results indicate their available credit enhancement remains commensurate with the current rating. "Although the class B-Dfrd, C-Dfrd, and D-Dfrd notes passed cash flow stresses at higher rating levels than those assigned, we considered the deferrable nature of the notes, the upcoming peak in interest revision dates, the transaction's limited excess spread, and the notes' relative levels of subordination. We therefore limited our upgrades of these classes of notes and removed our rating on the class D-Dfrd notes from CreditWatch positive. "We affirmed and removed from CreditWatch positive our rating on the class E-Dfrd notes. Our rating reflects the notes' relative position in the capital structure, and the increased exposure to tail-end risk. We concluded that the level of soft enhancement in the transaction (excess spread) is sufficient to support the current rating. "Counterparty risk does not constrain the ratings as we consider the transaction to be in line with our counterparty criteria." Macroeconomic forecasts and forward-looking analysis S&P said, "We expect U.K. inflation to remain above the Bank of England's 2% target in 2026, and we forecast a 2.6% year-on-year change in house prices in Q4 2026. Given our current macroeconomic forecasts and forward-looking view of the U.K. residential mortgage market, we performed additional sensitivities relating to higher default levels due to increased arrears and extended recovery timings. The sensitivity analysis results indicate a deterioration consistent with our credit stability considerations in our rating definitions." Pierpont BTL 2021-1 PLC is a RMBS securitization of BTL mortgage loans secured over properties in the U.K. and originated by LendInvest. RAY ACQUISITION: Moody's Alters Outlook on 'B2' CFR to Negative --------------------------------------------------------------- Moody's Ratings has affirmed Ray Acquisition Limited's (Sunrise, or the company) B2 corporate family rating and its B2-PD probability of default rating. At the same time, Moody's have affirmed the B2 ratings on the EUR550 million backed senior secured notes due July 2031 and the EUR300 million backed senior secured floating rate notes due July 2031, both issued by Ray Financing LLC, a special purpose vehicle and a direct subsidiary of Ray Acquisition Limited. The outlook was changed to negative from stable for all entities. RATINGS RATIONALE The rating action reflects Sunrise's operating underperformance relative to Moody's expectations, which has resulted in a material deterioration in credit metrics. As of the 12 months ended March 2026, Moody's-adjusted gross debt/EBITDA stood at approximately 8.4x, materially above the 6.5x downgrade threshold previously set for the rating, while free cash flow has weakened, reflecting lower earnings, high non-recurring costs and elevated capital spending linked to the group's ongoing footprint optimisation programme. Sunrise has experienced a slowdown in demand driven by a combination of cyclical, policy-related and structural factors. From a cyclical standpoint, the post-COVID five-year replacement cycle is running below trend, as demand was pulled forward during the pandemic when public payors and institutions accelerated equipment renewals. As a result, end-user replacement volumes remain below historical levels, weighing on order intake across both Complex Rehab and Standard Rehab categories. Compounding this cyclical softness, policy-related uncertainty in the US did weigh on approvals through the Department of Veterans Affairs (VA) channel, which accounts for approximately 20% of Sunrise's Americas revenue and where prescriptions are subject to federal approval processes. Whilst this uncertainty did slow VA approval timelines and procurement decisions for some part of 2025, delaying the conversion of pipeline into revenue and reducing near-term visibility for the North American business, VA revenues have improved so far in 2026. In parallel, more structural headwinds are emerging in Europe, where public reimbursement schemes in several core geographies are increasingly favouring the refurbishment and re-issuance of existing mobility equipment over the procurement of new devices, as a cost-containment and sustainability measure. This structurally reduces new-unit demand in mature, high-margin markets and is expected to persist over the medium term. Against this softer demand backdrop, tariff exposure nonetheless remains contained, as the group is largely protected by the Nairobi Protocol for disabled-use products. Moody's expects modest EBITDA growth in 2026 and Moody's-adjusted gross leverage to decline toward 7.5x, driven by savings initiatives launched in prior quarters. Moody's also expects free cash flow to turn positive in 2026, as the majority of project-based capital expenditure including the Tijuana and Fresno footprint optimisation projects, is now behind the company, with related costs expected to be finalised by mid-2026. Although cash-intensive in the short term, these projects are expected to materially improve Sunrise's cost base and operating processes from 2027 onwards. Despite these challenges, the B2 rating continues to be supported by (i) Sunrise's leading global market positions in Complex Rehab (around 79% of FY2025 revenue); (ii) high barriers to entry stemming from regulatory requirements, established distribution relationships and technological know-how; (iii) favourable long-term demand fundamentals driven by an ageing population and rising prevalence of chronic disease; and (iv) a supportive sponsor in Platinum Equity, which has confirmed capital support for larger M&A. LIQUIDITY Sunrise's liquidity is adequate, supported by EUR18.4 million of cash on balance sheet as of end-March 2026 and access to a EUR150 million revolving credit facility (RCF), of which EUR117 million was available (EUR33 million drawn as of end March 2026, with EUR9 million carved out for ancillary facility). Moody's expects free cash flow to be positive in 2026 as the majority of project-based capital expenditure, apart from ERP and technology rollout, is now behind the company and the benefits of the savings initiatives materialize. Long-dated maturities in 2031 provide flexibility, and the RCF is subject to a springing senior secured net leverage covenant tested when drawings exceed 50% of commitments, under which Moody's expects Sunrise to maintain consistent compliance. STRUCTURAL CONSIDERATIONS The B2 rating of the EUR850 million senior secured notes (SSN) is in line with the CFR, reflecting the fact that this instrument represents most of the company's financial debt. However, the notes are subordinated to the EUR150 million super senior RCF. The SSN and super senior RCF share the same security package and guarantees, with the RCF benefiting from a priority claim on enforcement proceeds. The security package comprises pledges over the shares of the borrower and guarantors as well as bank accounts and intragroup receivables. Moody's considers the security package to be weak, consistent with Moody's approach for shares-only pledges. RATIONALE FOR NEGATIVE OUTLOOK The negative outlook reflects the deterioration in Sunrise's credit metrics and the risk that the company may fail to reduce Moody's-adjusted gross leverage toward 6.5x over the next 12-18 months, amid uncertainty around organic revenue growth, persistent market headwinds in key geographies, and execution risk on cost-saving initiatives. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the negative outlook, upward rating pressure is unlikely in the near term. However, positive pressure on the rating could materialize over time if Sunrise persists in effectively executing its strategy of featuring a superior product portfolio, fueled by innovation, while successfully executing its efficiency measures. In addition, Moody's could upgrade the rating if Sunrise's Moody's-adjusted gross debt/EBITDA decreases and remains below 5.0x; its Moody's-adjusted FCF/debt increases to and remains in mid-to-high single digits (in percentage terms); and its EBITDA/interest expenses ratio increases towards 3.0x, all on a sustained basis. Moody's could downgrade Sunrise's rating if the company's Moody's-adjusted gross debt/EBITDA remains above 6.5x on a sustained basis; its Moody's-adjusted EBITDA/interest expenses remains below 2.0x for a prolonged period; or its FCF does not recover to positive territory in 2026. Negative pressure on the rating could also materialise if liquidity weakens; reimbursements reduce significantly in one of its key markets; or the company embarks on sizeable debt-financed acquisitions or distributes significant amounts of cash to shareholders. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Medical Products and Devices published in October 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 Ray Acquisition Limited (Sunrise) is a global leading provider of premium mobility products, including manual and powered wheelchairs, mobility scooters and other mobility aids. The group has a global footprint with manufacturing and distribution operations across Europe, EMEA, North America and Asia Pacific, and sells its products in more than 100 countries, primarily through a B2B model to dealers, government agencies and public institutions. For the 12 months that ended March 31, 2026, Sunrise reported revenue of EUR719 million and company-adjusted EBITDA of EUR151 million excluding the proforma effect of the 2025 acquisitions. Sunrise has been owned by Platinum since 2024. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2026. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. * * * End of Transmission * * *