/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/190212.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Tuesday, February 12, 2019, Vol. 20, No. 030 Headlines C R O A T I A AGROKOR DD: Appointment of Boards Begins at New Mirror Companies AGROKOR DD: Sberbank Plans to Sell Stake in Business F I N L A N D AMER SPORTS: S&P Puts Prelim. B+ LT Rating on EUR1.7BB Term Loan F R A N C E NOVASEP HOLDING: S&P Lowers ICR to 'CC', On CreditWatch Negative G E R M A N Y GERRY WEBER: Enters Into Preliminary Insolvency Proceedings G R E E C E ESTIA MORTGAGE 1: Fitch Affirms CCCsf Rating on Class C Tranche I R E L A N D CLOVERIE PLC 2007-52: Fitch Cuts USD10MM Notes Rating to 'BBsf' LUSITANO MORTGAGES NO.4: Fitch Affirms Cl. D Tranche CCCsf Rating I T A L Y INTERNATIONAL DESIGN: S&P Assigns 'B' LT ICR, Outlook Stable K A Z A K H S T A N CENTRAS INSURANCE: A.M. Best Withdraws C+(Marginal) FS Rating L U X E M B O U R G GALAPAGOS HOLDING: Bondholders Tap Moelis as Financial Adviser N E T H E R L A N D S INTERTRUST NV: S&P Assigns 'BB+' Long-Term ICR, Outlook Stable P O L A N D RUCH: Court-Appointed Supervisor Files Restructuring Plan P O R T U G A L ACUINOVA PORTUGAL: Exits Bankruptcy After Shedding EUR142MM Debt U N I T E D K I N G D O M JEWEL UK: S&P Affirms B- Ratings, Revises Outlook Positive ********* ============= C R O A T I A ============= AGROKOR DD: Appointment of Boards Begins at New Mirror Companies ---------------------------------------------------------------- SeeNews reports that Agrokor on Jan. 29 said the procedure of appointing management boards and directors at the new Agrokor mirror companies has started at the Zagreb Commercial Court. The food-to-retail concern said in a statement the appointment of the mirror companies' management boards is one of the steps in the process of preparing the implementation of the creditors' settlement plan, SeeNews relates. The mirror companies' boards and directors will remain mostly the same as in the existing companies of Agrokor, SeeNews states. According to SeeNews, Agrokor said the changes will only be made at several smaller companies where individual board members or directors have announced that they would leave. The registration of the new names of the future Agrokor Group mirror companies has already been completed, according to SeeNews. The new names consist of the old name followed by "plus" -- Konzum plus, Ledo plus, Jamnica plus, Belje plus, etc. The existing parent company, Agrokor d.d., will receive a new name by the end of January without "Agrokor" in it, SeeNews relays. On June 6, the High Commercial Court in Zagreb endorsed the settlement agreement, which envisages the establishment of a new Agrokor concern held by the creditors, in which the largest individual shareholder will be Russia's Sberbank with a 39.2% stake, SeeNews discloses. Agrokor, which employs some 60,000 people in the region, has been undergoing restructuring led by a court-appointed crisis manager under Croatia's special law on companies of systemic importance passed in April 2017 with the aim of shielding the Croatian economy from big corporate bankruptcies, SeeNews recounts. AGROKOR DD: Sberbank Plans to Sell Stake in Business ---------------------------------------------------- SeeNews reports that Russia's Sberbank confirmed on Jan. 25 it plans to sell its stake in Croatia's ailing food-to-retail concern Agrokor as it is a non-core business. "We have always said that Agrokor is a non-core business that we do not intend to own long-term, and that our sole desire is to sell this business. It is simply a question of time, price and the partner," a Sberbank press officer told SeeNews in an email. "I think we will carry out refinancing in March, when we receive our share in the new Agrokor," the press officer, as cited by SeeNews, said, adding that she cannot rule out a scenario where a counterparty refinances the super-senior debt and buys out Sberbank's stake. On June 6, the High Commercial Court in Zagreb endorsed the settlement agreement, which envisages the establishment of a new Agrokor concern held by the creditors, in which the largest individual shareholder will be Russia's Sberbank with a 39.2% stake, SeeNews relates. Agrokor, which employs some 60,000 people in the region, has been undergoing restructuring led by a court-appointed crisis manager under Croatia's special law on companies of systemic importance passed in April 2017 with the aim of shielding the Croatian economy from big corporate bankruptcies, SeeNews discloses. ============= F I N L A N D ============= AMER SPORTS: S&P Puts Prelim. B+ LT Rating on EUR1.7BB Term Loan ---------------------------------------------------------------- S&P Global Ratings is assigning its preliminary 'B+' long-term rating to Amer and to the group's proposed EUR1.7 billion first- lien senior secured term loan due 2026 and EUR315 million revolving credit facility (RCF) due 2025. S&P said, "The final ratings will be subject to our receipt and satisfactory review of all the final transaction documentation. Accordingly, the preliminary ratings should not be construed as evidence of the final ratings. If the terms and conditions of the final documentation depart from what we have already reviewed, or if the financing transaction does not close within what we consider to be a reasonable time frame, we reserve the right to withdraw or revise the ratings. "Our preliminary ratings on Amer follow the announcement on Dec. 7, 2018, that a consortium of investors made a voluntary public cash offer to purchase all the group's issued and oustanding shares for a total consideration of EUR4.6 billion (EUR40 per share)." The consortium will be led by the China-based sporting goods company ANTA, which is expected to hold 57.9% of equity shares, post transaction. Co-investors will be private equity FountainVest (15.8% of total shares post transaction), Anamered Investments Inc. (the investment vehicle of Mr. Chip Wilson, Lululemon Athletica's founder; with 20.7% shares), and global leading provider of internet services Tencent (5.6% shares). The transaction will be funded with an equity contribution of about EUR2.7 billion and EUR3.0 billion of debt. It includes a EUR1.3 billion term loan A issued by the consortium's investment vehicle and Amer's parent Mascot JVCo Ltd. (guaranteed by ANTA), and a EUR1.7 billion term loan B issued by Amer. The rating on Amer incorporates the group's solid position in the sports equipment market (hardgoods) and the growing presence in footwear and apparel segments (softgoods), with a diversfied portfolio of well-known brands including Salomon, Arc'teryx, Wilson, Atomic, Peak Performance, and Suunto. At year-end 2018, the group reported about EUR2.7 billion of sales, well spread globally but mainly focused on mature markets (about 90% of the group's sales) such as the U.S., Canada, Finland, France, Germany, and Japan. The global sportswear market is highly competitive and fragmented, with the top-three players, Nike, Adidas, and VF (through its key brands Vans, The North Face, and Timberland) holding 30% of the global market by retail value in 2018 according to Euromonitor. S&P expects Amer to succesfully compete in the market, leveraging its consistent value proposition based primarily on performance-focused brands, supporting global leading market positions in some product categories, such as trail shoes with the Salomon brand. At the same time, the group enjoys global leading market share in some sports equipment categories such as baseball (DeMarini and Louisville brands) and tennis (Wilson brand). S&P said, "These factors support the group's premium price positioning and the solid organic compound annual revenue growth of about 5.0%-6.0% over 2013-2017 according to our calculations. We note that this result was achieved despite the group's only limited presence in fast-growing emerging markets such as China (just 5% of total sales at year-end 2018). We anticipate the group will further expand its presence in China, supported by the new majority shareholder ANTA, which ranks No. 3 in terms of sales in the Chinese sportswear market where its two major brands are Anta and Fila (limited to the chinese market)." In particular, Amer's growth in China will be fueled by expansion of the network of mono-brand stores (primarily Salomon and Arc'teryx) in the footwear and apparel segments. In S&P's view, ANTA's support will materialize into improved bargaining power with suppliers, easier access to the retail network, and improved efficiency in logistics. The strategy will result in higher marketing costs and additional costs associated with the new store openings (staff and rental costs), mitigated by an improved sales mix, with higher sales from the more profitable apparel and footwear categories versus hardgoods, as well as premium price positioning in China. The group has posted fairly stable profitability, with an S&P Global Ratings' adjusted EBITDA margin of 9%-11% over 2013-2017. However, profitability is below that of other players in the sportswear industry, such as Nike (16%-17%). The main reason behind the gap resides in Amer's significant exposure to the hardgoods division (60% of total sales at year-end 2018). Despite the premium price positioning of its products, the hardgoods division has a heavier cost structure, reflecting research and development expenses and relatively higher manufacturing costs, since these products are mainly manufactured internally to preserve high quality and performance. In the softgoods segment, the group competes via three major brands -- Salomon, Peak Performance, and Arc'teryx -- covering apparel and footwear product categories. These brands enjoy higher profitability than the group's average, mainly supported by premium price positioning and outsourced production. Amer is primarily active in the wholesale channel (mainly through mass-market retail partners), accounting for about 76% of the group's sales. Third-party e-commerce providers generate 14% of the group's sales. Overall, the direct to consumer (DTC) channel accounts for only 10% of total sales, driven by 364 owned brand retail stores (6% of total sales) and 100 online stores (4% of sales) at year-end 2018. This approach supports a relatively flexible cost structure, but the wholesale model constrains the group's control over the product positioning at the point of sale, in our view. This model also requires strong control over retailers' pricing policies to avoid unauthorized price discounts that could affect the group's brand equity. In the third-party e-commerce channel, Amer recently decided to focus on a few large customers to avoid strong price competition in the channel. One of the pillars of the group's stategy is the acceleration into the DTC channel, including the expansion of digital presence and the owned retail network, mainly in China in the sportswear category (Salomon and Arc'teryx). S&P said, "In our view, the expansion in the DTC channel will reduce the group's business seasonality, since Amer will have stronger control over the range of products offered in stores, making them available throughout the year. We note that sales are concentrated in the second half of the year, reflecting some exposure to winter sports equipment (13% of total sales) only partially offset by the counterseasonality of the ball sports segment. This leads to strong intrayear working capital requirements in the third quarter of the year that Amer typically manages through factoring programs and reverse factoring agreements. We expect the expansion in DTC will affect working capital because of the inventory build-up required to support new store openings and the e-commerce activities. "Our financial risk profile assessment reflects the highly leveraged capital structure post transaction. We project that debt to EBITDA will remain at 8.5x-9.0x over 2019-2020 including our adjustments. Our debt calculation primarily includes the EUR1.7 billion term loan B issued by Amer and the EUR1.3 billion intercompany loan received by Mascot JVCo Ltd., funded with proceeds from the EUR1.3 billion term loan A. Our assessment takes into consideration our view that Amer--through permitted payments--will ultimately service the debt issued at Mascot JVCo level. "Excluding the EUR1.3 billion intercompany loan, we expect adjusted debt to EBITDA will be slightly above 5.0x over 2019- 2020. Our assessment is supported by the group's relatively solid EBITDA interest coverage of about 3.0x-3.5x and annual free operating cash flow (FOCF) above EUR25 million over 2019-2020, including the cash interest payment on the intercompany loan. "The preliminary 'B+' rating stands one notch above our assessment of the stand-alone credit profile, reflecting our view that the group is likely to receive extraordinary support from its majority owner ANTA, should it experience financial stress. Our assessment reflects our view that ANTA has higher creditworthiness than Amer, primarily due to our calculation of lower leverage post transaction. While we acknowledge the absence of formal incentives from ANTA to support Amer (such as cross- default clauses), we believe that Amer is a moderately strategic investment for ANTA, considering the sizable exposure to the investment of about EUR2.8 billion (about EUR1.5 billion equity contribution and a guarantee on EUR1.3 billion term loan A). This leads us to believe that Amer is unlikely to be sold in the near term. "The stable outlook on Amer reflects our view that the group will successfully deliver its strategy to expand its footwear and apparel division, mainly driven by new store openings in China, supporting a fairly stable adjusted EBITDA margin of 12.0%-13.0%. Over the next 12 months, we estimate adjusted debt to EBITDA will remain well above 5.0x (in the range of 8.5x-9.0x) and EBITDA interest coverage slightly higher than 3.0x. "We could lower the rating if Amer's credit metrics weakened such that EBITDA interest coverage deteriorated below 2.5x and FOCF approached zero in the next 12 months. This could result from a material contraction of profitability of more than 200 basis points (bps), in case of higher costs to support the retail- network expansion, or if we were to observe lower footfall at wholesale partners. A negative rating action could also arise if we were to observe a lower commitment from ANTA to support Amer's expansion strategy in China or in case of a lack of financial support during a period of financial stress. "We could raise the rating if Amer improved its profitability by more than 150 bps compared with our base case at the end of 2019, while keeping high working capital control, enabling annual FOCF to remain sustainably above EUR50 million. This would likely result from an improved sales mix toward the most profitable footwear and apparel division and earlier-than-expected cost savings generated by operations in China. In this case, we would likely observe a stronger deleveraging path toward 5.0x on a fully adjusted basis. Although we consider it unlikely in the next 12 months, we could raise the rating if we believed that Amer's strategic importance for ANTA group had increased." Amer is a global sporting goods group competing in the footwear and apparel market (softgoods accounting for about 40% of sales at year-end 2018) and in the sports equipment market (hardgoods; 60% of sales). It covers a wide range of sports such as winter sports equipment, fitness, tennis, American football, running, hiking, and diving. The group has a diversified portfolio of brands including Salomon (32% of sales in 2017), Wilson (22%), Precor (14%), Arc'teryx (13%), Atomic (6%), Suunto (5%), and others (8%). Amer has a diversified geographic footprint in terms of revenues, with Europe, Middle East, and Africa accounting for 43% of total sales at year-end 2018, Americas (mainly U.S. and Canada) 42% of sales, and Asia-Pacific 15%. =========== F R A N C E =========== NOVASEP HOLDING: S&P Lowers ICR to 'CC', On CreditWatch Negative ---------------------------------------------------------------- Novasep Holding S.A.S. (the group) has launched a consent solicitation offer to its noteholders and warrant holders, asking for a three-year maturity extension. S&P Global Ratings is lowering to 'CC' from 'CCC' our long-term issuer credit rating on Novasep and our issue rating on its EUR181.7 million outstanding notes. S&P is placing the 'CC' issuer credit rating on CreditWatch with negative implications. S&P said, "The downgrade reflects our view that Novasep's offer to its noteholders and warrant holders is distressed, since investors will receive less than promised on the original securities. The three-year maturity extension represents a significant amendment to the original promise of repayment on May 31, 2019. The offer also includes an amendment to terms and conditions to allow dividend payments, which will enable Novasep to pay a consent fee to noteholders. The consent fee will be for EUR1.8 million -- a total of 1% of the outstanding notes' principal. Novasep will allocate this amount to each noteholder pro rata the principal amount held. Another amendment will allow the group to increase its permitted liens incurred for ordinary course of business for an amount not exceeding EUR65 million -- an increase from EUR10 million previously. "We understand that the required majority of noteholders, who are also shareholders, has committed to the offer, and that the extension should therefore be approved on Feb. 19, 2019. The maturity extension will allow the group to avoid entering into French safeguarding procedures, as it would not otherwise be able to meet the May 2019 maturity. However, we do not believe that the entire pool of debt investors will receive what Novasep promised when it originated the notes. We therefore consider the offer as distressed. "However, we understand that the group continues to function and that the proposed capital restructuring will not compromise its operations, nor its payments to suppliers. Novasep continues to invest in the expansion of its biopharmaceutical segment through the opening of two lines enjoying Good Manufacturer Practice standards. This investment is a response to the expected increase in the use of viral vector and gene therapy technologies. The group expects these lines will produce their first batches in the first half of 2019. The lines are located at Seneffe in Belgium, where the group is also planning to open SeneFill--a "fill and finish" production line -- in the coming months. This will enhance the group's product mix and should enable the group to expand further. S&P forecasts that these operations will be further complemented by the recently announced commercialization of a pilot chromatography line -- used in the downstream processes of monoclonal antibodies -- that Novasep has recently sold to the Indian biotech company Enzene Biosciences. In addition, the group has a track record of complying with regulatory standards in the pharmaceutical industry, as demonstrated by its fifth successful Food and Drug Administration inspection in 2018. S&P believes the group continues to operate in various niche and complex technological platforms -- viral vectors, antibody drug conjugates, and monoclonal antibodies -- which are used in fast-growing therapeutic areas of the biopharma industry. S&P said, "The CreditWatch placement reflects our expectation that we will lower our issuer credit rating on Novasep to 'SD' once the group has received consent to extend the maturity from the majority of the noteholders at the next meeting, which we expect will take place on Feb. 19 2019. At the same time, we would expect to lower our issue rating on the group's EUR182 million outstanding notes to 'D'." ============= G E R M A N Y ============= GERRY WEBER: Enters Into Preliminary Insolvency Proceedings ----------------------------------------------------------- GERRY WEBER International AG on Jan. 25 applied for the court order of preliminary insolvency proceedings under self- administration according to Sec. 270 a InsO at the responsible local court Bielefeld, aiming at successfully restructuring the company through the ongoing restructuring program. The application was approved by the local court Bielefeld. The preliminary insolvency exclusively applies to the mother company GERRY WEBER International AG with about 580 employees; all subsidiaries including HALLHUBER are excluded from the proceedings. Within the scope of the preliminary self- administration, business operations of GERRY WEBER International AG are continued entirely at normal course. According to the current status, the continued financing of operations is safeguarded until the year 2020. The Managing Board remains in office with all powers and responsibilities, ensuring operations. For support, the Managing Board consults the insolvency law experienced and in the fashion industry very well-versed self- administrator and reorganization expert Christian Gerloff, Gerloff Liebler Rechtsanwaelte. In the function of a General Representative, he will coordinate in particular with regard to procedural and insolvency law issues. The local court has appointed lawyer Stefan Meyer -- s.meyer@pluta.net -- PLUTA Rechtsanwalts GmbH, a restructuring expert with experience in both the industry and insolvency law as provisional trustee (Sachwalter). Gerry Weber International AG is a fashion manufacturer and retailer based in Halle, North Rhine-Westphalia, Germany. =========== G R E E C E =========== ESTIA MORTGAGE 1: Fitch Affirms CCCsf Rating on Class C Tranche --------------------------------------------------------------- Fitch Ratings has upgraded seven tranches of three Greek RMBS transactions originated by Piraeus Bank S.A. (Piraeus, CCC/C/ccc), removed six tranches from Rating Watch Positive (RWP) and affirmed two tranches, as follows: Estia Mortgage Finance Plc (Estia I) Class A (XS0220978737): upgraded to 'BBB-sf' from 'BB-sf'; off RWP; Outlook Stable Class B (XS0220978901): upgraded to 'BBsf' from 'BB-sf'; off RWP; Outlook Positive Class C (XS0220979115): affirmed at 'CCCsf'; RE revised to 80% from 100% Estia Mortgage Finance II Plc (Estia II): Class A (XS0311458052): upgraded to 'BB+sf' from 'BB-sf'; off RWP; Outlook Positive Class B (XS0311459969): affirmed at 'CCCsf; RE revised to 100% from 80% Class C (XS0311460892): upgraded to 'CCCsf' from 'CCsf'; RE revised to 20% from 0% Kion Mortgage Finance Plc (Kion) Class A (XS0275896933): upgraded to 'BBB-sf' from 'BB-sf; off RWP; Outlook Stable Class B (XS0275897311): upgraded to 'BBB-sf' from 'BB-sf; off RWP; Outlook Stable Class C (XS0275897741): upgraded to 'BBB-sf' from 'BB-sf; off RWP; Outlook Stable KEY RATING DRIVERS Sovereign Upgrade The upgrades and removals from RWP follow the upgrade of Greece's Issuer Default Rating (IDR) to 'BB-' and the revision of its Country Ceiling to 'BBB-' from 'BB-'. The ratings of all three transactions are capped at 'BBB-sf'. The Stable Outlooks on the notes rated at the cap are aligned with that on the sovereign rating. Stable Asset Performance Asset performance has remained overall stable since the last surveillance review in February 2018, and Fitch expects this trend to continue. As at the cut-off dates of the pools, loans with over three monthly payments missed as calculated by Fitch stood at 3.5%, 7.3% and 0.4% for Estia I, Estia II and Kion, respectively. Fitch observed similar levels of arrears in the same category in last year's surveillance. Increasing Credit Enhancement The transactions continue to amortise sequentially as their non- amortising cash reserves are at target levels, resulting in increasing credit support. RATING SENSITIVITIES Further changes to the Greek sovereign IDR, Country Ceiling or structured finance rating cap may result in corresponding changes on the tranches rated at the cap. Continued stable asset performance and increasing credit enhancement could lead to upgrades of the senior tranche of Estia II and the mezzanine tranche of Estia I. Asset deterioration beyond Fitch's expectations could lead to negative rating action. USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. There were no findings that affected the rating analysis. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. Fitch did not undertake a review of the information provided about the underlying asset pools ahead of the transactions' initial closing. The subsequent performance of the transactions over the years is consistent with the agency's expectations given the operating environment and Fitch is therefore satisfied that the asset pool information relied upon for its initial rating analysis was adequately reliable. Overall, 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. ============= I R E L A N D ============= CLOVERIE PLC 2007-52: Fitch Cuts USD10MM Notes Rating to 'BBsf' --------------------------------------------------------------- Fitch Ratings has downgraded Cloverie PLC 2007-52 as follows: -- USD10,000,000 credit-linked notes to 'BBsf' from 'BBB-sf'; placed on Rating Watch Negative. KEY RATING DRIVERS The rating action follows Fitch's downgrade and placement on Rating Watch Negative of the reference entity, Vale S.A., to 'BBB-' on Rating Watch Negative. Fitch monitors the performance of the underlying risk-presenting entities and adjusts the rating accordingly through application of its credit-linked note criteria, "Single-and Multi-Name Credit-Linked Notes Rating Criteria," dated July 19, 2018. The rating considers the credit quality of Vale's current Issuer Default Rating (IDR) of 'BBB-'/Rating Watch Negative as the reference entity and of Citigroup Inc., ('A+'/Outlook Stable) as the swap counterparty and issuer of the qualified investment. The downgrade and Rating Watch reflect action taken on the primary risk driver, Vale, which is the lowest-rated risk presenting entity. RATING SENSITIVITIES The credit-linked note remains sensitive to the ratings migration of the underlying risk-presenting entities. A downgrade of the weakest link would result in a downgrade to the credit linked notes according to Fitch's CLN criteria 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. LUSITANO MORTGAGES NO.4: Fitch Affirms Cl. D Tranche CCCsf Rating ----------------------------------------------------------------- Fitch Ratings has upgraded four tranches of Lusitano Mortgages 4 to 6 series and affirmed the others, as follows: Lusitano Mortgages No.4 plc: Class A (XS0230694233); affirmed at 'BBsf'; Outlook Stable Class B (XS0230694589); affirmed at 'BBsf'; Outlook Stable Class C (XS0230695552); affirmed at 'BBsf'; Outlook Stable Class D (XS0230696360); affirmed at 'CCCsf'; Recovery Estimate 90% Lusitano Mortgages No.5 plc: Class A (XS0268642161); affirmed at 'BBsf'; Outlook Stable Class B (XS0268642831); upgraded to 'BBsf' from 'BB-sf'; Outlook Stable Class C (XS0268643649); affirmed at 'CCCsf'; Recovery Estimate 90% Class D (XS0268644886); affirmed at 'CCsf'; Recovery Estimate 0% Lusitano Mortgages No.6 Limited: Class A (XS0312981649); upgraded to 'Asf' from 'A-sf'; Outlook Stable Class B (XS0312982290); upgraded to 'BBB-sf' from 'BB+sf'; Outlook Stable Class C (XS0312982530); upgraded to 'Bsf' from 'B-sf'; Outlook Stable Class D (XS0312982704); affirmed at 'CCCsf'; Recovery Estimate 90% Class E (XS0312983009); affirmed at 'CCsf'; Recovery Estimate 0% The three Lusitano transactions compromise loans originated and serviced by Novo Banco, S.A., formerly Banco Espirito Santo, S.A. KEY RATING DRIVERS Continuing Stable Asset Performance The transactions have continued to show a stabilising trend in asset performance reflected by decreasing 90+ dpd arrears and lower new defaults mainly driven by low interest rates, the continued recovery in the Portuguese economy and high seasoning. Portfolio amortisation has led to increased credit enhancement (CE) for the rated notes of all transactions since its last review. The increase in CE was more pronounced and is expected to continue for the senior notes of Lusitano 5 and 6 due to sequential amortisation, whereas for Lusitano 4 CE ratios will remain broadly stable as the transaction has recently switched to pro-rata amortisation. Payment Interruption Risk Considerations For Lusitano 4 and 5, Fitch views payment interruption risk in the event of servicer disruption as insufficiently mitigated, and the maximum achievable rating of the notes remains capped at 'BBsf'. This assessment reflects the excess spread volatility of the transactions, which results into uncertainty regarding the balance of their cash reserves as they are at a junior position in the waterfall. For Lusitano 6, Fitch views payment interruption risk as sufficiently mitigated via a liquidity facility. Extended Loans Lusitano 4 and 6 include a small number of loans that have been extended beyond the legal final maturity (LFM) of the notes. This is a result of maturity extensions that Novo Banco was obliged to grant as a result of Portuguese consumer legislation. Loans maturing after the LFM of the notes could lead to small shortfalls on all rated notes if the transactions amortise pro- rata until maturity and these loans will not be repurchased by the servicer. This is considered a risk factor for Lusitano 4, which recently switched to pro-rata amortisation, and is consistent with the notes' non-investment grade ratings. Given the significantly worse performance and currently sequential amortisation, it is considered a remote risk for Lusitano 5 and 6. RATING SENSITIVITIES A worsening of the Portuguese macroeconomic environment, especially employment conditions, or an abrupt shift in interest rates could jeopardise the underlying borrowers' affordability. This could have negative rating implications, especially for junior tranches that are less protected by structural CE. If the transactions benefit from stronger than expected recoveries on defaulted assets, the ratings could be upgraded. The notes' ratings may be downgraded if there is an increase in the magnitude of mortgage cash flows scheduled to be received beyond the notes' LFM dates if performance allows pro-rata amortisation. USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO RULE 17G-10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. There were no findings that affected the rating analysis. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. Fitch did not undertake a review of the information provided about the underlying asset pools ahead of the transactions' initial closing. The subsequent performance of the transactions over the years is consistent with the agency's expectations given the operating environment and Fitch is therefore satisfied that the asset pool information relied upon for its initial rating analysis was adequately reliable. Overall, 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. ========= I T A L Y ========= INTERNATIONAL DESIGN: S&P Assigns 'B' LT ICR, Outlook Stable ------------------------------------------------------------ Private equity groups Investindustrial and The Carlyle Group have created International Design Group SpA (IDG), consolidating Flos, Louis Poulsen, and B&B Italia, three leading companies in the high-end design market. S&P Global Ratings assigned its 'B' long-term issuer credit rating to International Design Group SpA (IDG), an Italy-based group operating in the high-end design market. The outlook is stable. S&P said, "At the same time, we assigned our 'B' issue rating to the EUR720 million senior secured notes (EUR400 million fixed rate notes and EUR320 million floating rate notes) maturing in 2025. The recovery rating on the notes is '3', indicating our expectations of meaningful recovery prospects (50%-90%; rounded estimate: 55%) in the event of payment default." IDG has been created by private equity groups Investindustrial and The Carlyle Group, consolidating Flos, an Italian lighting producer, Louis Poulsen, a Danish lighting producer, and B&B Italia, an Italian furniture producer. Investindustrial and Carlyle jointly own a 90%-95% stake in the group, while IDG's senior management owns the remaining 5%-10%. Investindustrial acquired Flos and B&B Italia in 2014 and 2015 respectively and, leveraging their managerial capabilities, the two companies reported solid revenue growth over 2015-2017 (about a 10% compound annual growth rate [CAGR]) and stable profitability of about 20% for B&B Italia and about 25% for Flos. Recently, Investindustrial acquired Denmark-based Louis Poulsen. The creation of IDG follows Carlyle's entry into the investment. Caryle and Investindustrial have a combined stake of 90%-95% (equally split) in IDG's equity, supporting the group's expansion over the following years, both organically and with selective acquisitions. This transaction is part of the consolidation trend S&P has been observing in the high-end design market over the past few years. The market is still characterized by several small independent companies, which are desirable targets for industrial or financial investors aiming to invest in iconic brands with strong heritage in order to foster international growth and improve financial strength. The high-end design market is very fragmented, and S&P considers it to be subject to discretionary consumer spending in both channels operated by the group. In the business-to-customer (B2C) channel (about 73% of sales), demand stems from real GDP growth and development in the housing market. The demand in B2C is also subject to the risk that homeowners could defer purchases in an economic downturn. In the business-to-business (B2B) channel (about 27% of sales), demand for luxury furniture products is linked to remodeling projects at commercial properties. While S&P acknowledges the shorter replacement cycle in this segment than with B2C, demand could be affected by the decision to defer remodeling activities. Positively, the group enjoys a diversified end-customer base, operating in multiple industries from hospitality to luxury retail. Key customers in the B2B channel are Apple, Bentley, Rolex, United Airlines, Bulgari Hotels, and public administrations (mainly at Louis Poulsen). The group's product offerings are mainly high-end lighting solutions, accounting for 60% of total sales, while the remaining 40% are generated from the high-end furniture market (about 28% in the living and bedroom segment and the remaining in the kitchen and other furniture segments). S&P evaluates positively the group's omnichannel distribution strategy, as it enables the group to reach a diversified customer base through its wholesale partners (66% of sales), owned retail network (7% of sales), and contracts with commercial clients (27% of sales). The direct online channel is still very marginal, with about 1% of the sales, but the development of this channel is part of the group's strategy. IDG has a premium-price positioning, reflecting positive brand awareness and a high level of design, guaranteed by a product portfolio comprising iconic and new products. S&P understands that Flos, B&B Italia, and Louis Poulsen have maintained longstanding relationships with famous designers and architects over time and that several products in their portfolio have a long lifetime. The ability to maintain a strong brand awareness through iconic products while introducing successful new ones represents a key competitive advantage, and helps attract and retain new designers. In fact, despite the popularity of iconic products, the group's success relies on its ability to remain very contemporary, leveraging its research and development capabilities and introducing new products to accommodate new market trends in technology and new materials, for example. The group's sales increased by about 10% CAGR over 2015-2017, posting EUR535 million in revenues and EBITDA of EUR122 million in the 12 months ending June 30, 2018. This was supported by organic and external growth via selective acquisitions to diversify its product offerings and geographic footprint. The IDG has a global presence, with no single country accounting for more than 15% of sales (Italy represents 15%). The Americas and the fast-growing Asia Pacific region account for 17% and 14% of sales respectively, and rest of the world accounts for 5%. The rest of Europe generates 49% of total sales, where IDG has relatively strong exposure to solid economies like Germany and the Nordics. IDG's pro forma reported EBITDA margin was in the range of 21%- 22% in 2017, mainly thanks an EBITDA margin of about 25% for Flos. B&B Italia reported profitability close to 20%, while Louis Poulsen's was about 19% at year-end 2017, supported by significant improvements over the past few years in manufacturing efficiency and price adjustments, and a strategic switch to the more profitable B2C segment. S&P notes that IDG's EBITDA margin is higher than the broad durable goods market average, and it compares well with other rated luxury players in different segments. It is supported by the group's premium price positioning, its flexible cost structure (approximately 61% of variable costs), and its asset- light business model. In fact, distribution relies mainly on wholesales partners (66% of total sales) and production is mainly outsourced to third-party suppliers. The group adopts a "make-to- order" approach (63% of sales), limiting significant working capital requirements. S&P said, "We anticipate that the combination of Flos, Louis Poulsen, and B&B Italia under the same group will generate revenues synergies (i.e. retail optimization, new multi-brand directly operated store openings, and direct e-commerce) and cost optimization from shared functions. We expect limited overlapping of Flos and Louis Poulsen, reflecting their distinctive brand identities based on different design philosophies, a slightly different geographic focus, and Louis Poulsen's relatively greater focus on the B2B segment. "Our business risk profile assessment also incorporates execution risks associated with the successful integration of the three entities, including the deployment of a new joint direct e- commerce platform, implementation of a centralized wholesale database, and of new multi-brand store openings. "Our financial risk profile assessment reflects IDG's financial sponsor ownership, and our forecast that the group will post adjusted debt to EBITDA of 6.0x-6.5x on average over 2019-2020. Our debt calculation includes EUR720 million of senior secured notes, a limited amount of pension liabilities (EUR6 million-EUR7 million) and EUR65 million-EUR70 million of operating leases liability. Our base case assumes, as indicated by IDG, that the cash injected by the group's shareholder is common equity, with no shareholder loan or other noncommon equity instruments in or above the restricted group." The financial risk profile is supported by adjusted EBITDA interest coverage of about 2.5x over 2019-2020, and by our forecast of free operating cash flow (FOCF) of at least EUR25 million from 2019. S&P said, "We believe that part of the cash generation could be used to finance some bolt-on acquisitions, since the group intends to expand its geographic footprint and product offering. "The stable outlook on IDG reflects our view that the group will successfully combine Flos, B&B Italia, and Louis Poulsen without incurring significant exceptional costs. We expect IGD will maintain a reported EBITDA margin of 20.0%-20.5% in 2019, supported by premium price positioning and solid relationships with architects, although this is offset by some integration costs. We assume that FOCF will be over EUR25 million in 2019, supported by IDG's asset-light business model. "We project IDG will maintain S&P Global Ratings-adjusted debt to EBITDA of 6.0x-6.5x in 2019 and EBITDA interest coverage at about 2.5x over 2019-2020. "We could lower the rating if FOCF weakens and approaches zero, and if EBITDA interest coverage falls to 2.0x or less. In our view, this could happen if an economic downturn reduces demand for high-end design products, or if the company experiences significant disruption caused by the consolidation of Flos, B&B Italia, and Louis Poulsen. "A negative rating action could also occur if the group makes large debt-funded acquisitions that materially increase leverage. We could also downgrade the group if we observe deterioration in the group's liquidity position. "We could upgrade IDG if its credit metrics improve and adjusted debt to EBITDA remains consistently below 5x and there is a clear commitment from the private equity group owners to maintain the leverage below this level." =================== K A Z A K H S T A N =================== CENTRAS INSURANCE: A.M. Best Withdraws C+(Marginal) FS Rating ------------------------------------------------------------- AM Best has affirmed the Financial Strength Rating of C+ (Marginal) and the Long-Term Issuer Credit Rating of "b-" of JSC Insurance Company Centras Insurance (Centras) (Kazakhstan). The outlook of these Credit Ratings (ratings) remains stable. Concurrently, AM Best has withdrawn the ratings as the company has requested to no longer participate in AM Best's interactive rating process. The ratings reflect Centras' balance sheet strength, which AM Best categorizes as adequate, as well as its marginal operating performance, very limited business profile and weak enterprise risk management. Centras' balance sheet strength is underpinned by risk-adjusted capitalization, as measured by Best Capital Adequacy Ratio (BCAR), at the strong level at year-end 2018. However, risk- adjusted capitalization is volatile and it deteriorated during the year due to an increase in the company's underwriting risk. AM Best expects prospective BCAR scores to remain strong; however, they are dependent on the company's ability to support increased capital requirements through retention of earnings. The company's weak financial flexibility and its elevated investment risk profile, due to the high financial system risk in Kazakhstan, negatively affect the balance sheet strength assessment. Centras' performance has been volatile, with return on equity ranging between -22.7% and 39.7% over the 2013-2017 periods. Technical performance is weak, as demonstrated by a five-year weighted average combined ratio of 111.2% (2013-2017). According to preliminary GAAP financials, the company's underwriting result deteriorated in 2018, as demonstrated by a combined ratio of 115.2% (2017: 101.9%), principally due to an increase in expenses. The company generated net profit of KZT 1.1 billion for the year (2017: KZT 288 million), supported by material income from foreign exchange gains. Centras has a good competitive position in the relatively small and fragmented Kazakh non-life market. However, the company's relatively small size and limited diversification, as well as the challenging operating environment in Kazakhstan, make sustaining this position difficult. Based on regulatory returns as of 1 January 2019, Centras ranked fifth out of 23 non-life insurers, with gross written premium (GWP) of KZT 11.4 billion (approximately USD 34.5 million), translating into a 5% market share. In 2018, the company posted material growth in net written premium, partly due to the acquisition of parts of the insurance portfolios of two competitors, as well as increased premium retention of property and third-party liability business. Centras' net underwriting portfolio remains focused on compulsory motor third-party liability; however, concentration in this line reduced in 2018. =================== L U X E M B O U R G =================== GALAPAGOS HOLDING: Bondholders Tap Moelis as Financial Adviser -------------------------------------------------------------- Luca Casiraghi and Antonio Vanuzzo at Bloomberg News report that private-equity firm Triton Partners may be headed for a showdown with Galapagos Holding SA bondholders, who are appointing advisers in case the German industrial equipment maker breaches conditions on its debt. A group of investors who own secured bonds issued in 2014 by Galapagos, has hired Moelis & Co. as a financial adviser, a possible first step ahead of negotiations to restructure debt, Bloomberg relays, citing people familiar with the appointment. Law firm Akin Gump Strauss Hauer & Feld may also be picked as a legal adviser, said the people, who asked not to be identified because the information isn't public, according to Bloomberg. Galapagos, one of Triton's biggest acquisitions, has seen flagging operating performance across its businesses, Bloomberg relates. The private equity owner is seeking to sell one unprofitable unit, which makes cooling equipment used in power plants and is feeling the impact of a global switch to renewables, Bloomberg states. Arndt Muthreich, a managing director at Stifel Nicolaus, said its largest division, which produces heat exchangers for a range of industries, including energy, has proved vulnerable to volatile oil prices, Bloomberg notes. Felix Fischer, an analyst at Lucror Analytics, said an operational reorganization of the business, which was carved out of German conglomerate GEA Group AG in 2014, has also proved an expensive distraction for management, Bloomberg relates. "Galapagos' junior bondholders are getting nervous as senior bondholders organized hiring Moelis," Bloomberg quotes Menelaos Tzagkournis, an analyst at brokerage Imperial Capital International, as saying. "An asset sale is in the cards and depending on how that unfolds a full blown restructuring may become necessary." Galapagos needs annual earnings before interest, tax, depreciation and amortization of at least EUR80 million (US$91 million) to comply with conditions governing its loans, Bloomberg states. Extra cash provided by Triton has headed off any danger of a covenant breach throughout 2018, Bloomberg relays. The investor injected EUR22 million in April in return for a waiver of covenants from lenders and swapped assets with another company in its portfolio to boost the firm's balance sheet in August, Bloomberg recounts. Whether that support will continue this year remains unclear and Galapagos bond prices suggest investors are worried, Bloomberg discloses. The people said Triton and Galapagos have held discussions with advisers but haven't yet appointed anyone, Bloomberg notes. Galapagos Holding S.A. is a holding company operating through its subsidiary Galapagos S.A. that manufactures and sells heat exchangers for industrial applications. It caters to power, climate and environment, oil and gas, food and beverages, chemicals, and marine industries. The company is based in Luxembourg City, Luxembourg. ===================== N E T H E R L A N D S ===================== INTERTRUST NV: S&P Assigns 'BB+' Long-Term ICR, Outlook Stable -------------------------------------------------------------- S&P Global Ratings is assigning its 'BB+' long-term issuer credit ratings to Intertrust N.V. and Intertrust Group B.V., and its 'BB+' long-term issue and '3' recovery ratings to the group's EUR500 million senior notes. The 'BB+' rating is supported by Intertrust's leading position as a provider of corporate, fund, capital market, and private wealth administrative services, its industry-leading S&P Global Ratings- adjusted EBITDA margins (about 42% in 2018), and pro forma adjusted debt to EBITDA of about 3.6x at the end of 2018. The rating is constrained by Intertrust's relatively small scale, limited business diversification, and its exposure to shifts in the regulatory and tax landscape that it relies on to bring value to its customers. Intertrust generates most of its revenue from providing formation, domiciliation, and ongoing maintenance services for corporate, fund, and capital market entities. A smaller part of its business serves high-net-worth individuals and family offices. Intertrust's services are high-value-add to its customers because the complexities of the global regulatory and tax landscape make certain jurisdictions more attractive than others when forming a corporate entity or fund. Of Intertrust's revenues, 80% are generated from the maintenance services that it provides throughout the life of each entity, which lasts seven to 10 years, on average. Intertrust generates about 23% of its revenues in the Netherlands, which has a top-five position in the Global Competitiveness Index, a measure of the relative attractiveness of each country's investment climate. The rest its revenues are primarily generated in Luxembourg, the Americas, and Jersey, which are also attractive investment climates for certain purposes of formation. S&P said, "Intertrust serves more than half of the top-50 companies in the Fortune 500 and, with revenues of EUR496 million in the 12 months ended Dec. 30, 2018, is the largest company we rate in the industry, followed by Vistra Group Holdings S.A. That said, the market is relatively small and mature, and we expect it will experience growth in line with global GDP. Although Intertrust serves an array of corporate entities, funds, and family offices, giving it solid customer diversity, we do not view the segments as highly uncorrelated. Therefore, we view the scope of the business as relatively narrow." A significant differentiator between Intertrust and its rated peers are its industry-leading EBITDA margins, which were 42% in 2018, down from 43% in 2017. S&P said, "We anticipate that Intertrust will maintain high EBITDA margins, given its scale relative to competitors, which enables it to provide services at a lower cost, especially in its larger markets. However, we believe margin compression could continue into 2019 due to lower growth in its highest-margin region, the Netherlands, where the government is taking steps to avoid becoming a haven for tax avoidance." A July 2018 Organization for Economic Co-operation and Development report cited the Netherlands' desire to avoid a "reputation issue linked to aggressive tax planning." Although the efforts are still ongoing, the uncertainty could make the Netherlands a less-attractive domicile for investment. Although Intertrust's scale and global presence position the company to adapt to these shifts, the developments highlight how Intertrust's operating performance is exposed to changes in government policy and regulations. S&P's view of Intertrust's financial profile includes adjusted debt of approximately EUR750 million at the end of 2018 (adjusting for cash and operating leases). This includes EUR500 million in seven-year senior notes and the following five-year senior unsecured bank facilities: -- $200 million (EUR171 million equivalent) term loan; -- GBP100 million (EUR112 million equivalent) term loan; and -- EUR150 million revolving credit facility (RCF) that was undrawn at the end of 2018. The ratings are in line with the preliminary ratings S&P assigned on Nov. 5, 2018. S&P said, "The stable outlook reflects our expectation that global economic growth and the increasing complexity of the global regulatory and tax landscape will support Intertrust's growth. Despite slower growth in its higher-margin markets, we expect Intertrust will maintain strong EBITDA margins of at least 35% through 2019 and adjusted debt to EBITDA below 4x. "We could lower the rating if Intertrust's profitability is eroded by the slower growth in its higher-margin regions or operational missteps, such that EBITDA margins decline below 35%. We might also lower the rating if the company adopts a more aggressive financial policy, such that adjusted debt to EBITDA rises above 4x for a prolonged period. "An upgrade is unlikely within the next year, but we could raise the rating in the longer term if the company deleverages to below 3x on a sustained basis and demonstrates that it is committed to a prudent financial policy, while sustaining industry leading margins." =========== P O L A N D =========== RUCH: Court-Appointed Supervisor Files Restructuring Plan --------------------------------------------------------- Maciej Martewicz at Bloomberg News reports that court-appointed supervisor Zimmerman Filipiak Restrukturyzacja filed a restructuring plan that splits Ruch into retail and logistics unit with a purpose of selling them. According to Bloomberg, Ruch creditors will be paid back by money raised from selling the units. Alior agrees to the haircut, Zimmerman says, without giving the level of debt reduction, Bloomberg relates. Ruch is a distributor of printed press based in Poland. =============== P O R T U G A L =============== ACUINOVA PORTUGAL: Exits Bankruptcy After Shedding EUR142MM Debt ----------------------------------- ---------------------------- Undercurrent News, citing La Voz de Galicia, reports that a major Portuguese turbot farm formerly linked to Spanish seafood giant Grupo Nueva Pescanova has emerged from bankruptcy after shedding much of its debt. The facility formerly known as Acuinova Portugal, which posted a loss of EUR17.4 million (US$20 million) in 2014, is now owned by the firm Ondas e Versos, which is in turn owned by the investment fund Oxy Capital, Undercurrent News discloses. According to Undercurrent News, the newspaper said a bankruptcy process in Portugal allowed the farm to shed some EUR142 million in debt. The newspaper reported that Oxy Capital said despite the insolvency proceedings, Ondas e Versos "has managed to keep the company in regular operation, supplying the market with a high quality product", Undercurrent News relates. =========================== U N I T E D K I N G D O M =========================== JEWEL UK: S&P Affirms B- Ratings, Revises Outlook Positive ---------------------------------------------------------- S&P Global Ratings is revising the outlook on Watches of Switzerland's holding company, Jewel UK Midco Ltd., to positive from stable and affirming the 'B-' ratings on the company and its existing debt instruments. The outlook revision reflects the Watches of Switzerland (WoS) group's positive trading momentum, as well as the progress made in integrating its new U.S. operations. In S&P's opinion, these have meaningfully reduced the execution risks stemming from the group's ambitious expansion plans. In a brief trading update covering November and December 2018, the group reported 6.7% like-for-like (LFL) sales growth (excluding e-commerce), and 8.4% growth in online sales. These results compare favorably with those of other U.K. retailers over the same period, many of whom continue to report earnings declines amid challenging trading conditions. S&P said, "We continue to believe the group's U.S. expansion plans pose material execution risks, particularly given the ambitious growth expectations and the near-term cash investment needed for new stores and inventories. As such, we still expect the group to consume cash in the financial year ending March 31, 2019 (FY2019), limiting any near-term improvement in the group's credit metrics. That said, in our view, this execution risk is tempered by the group's successful integration and robust performance of its U.S. operations in the financial year to date. "We also believe strategic initiatives to reduce the group's physical presence by closing or selling unprofitable stores -- along with strategic reviews of underperforming (predominantly fashion and classic watch) segments -- should support the group's medium-term performance. That said, we also expect this to lead to greater concentration of earnings in the luxury watches category, which we continue to view as highly discretionary. "The positive outlook reflects our expectation that the WoS group will continue to increase its earnings through the successful integration of its new U.S. operations, combined with robust LFL growth in the U.K. As such, we expect the group's S&P Global Ratings-adjusted debt to EBITDA to approach 5.5x by the end of FY2019. That said, execution risk relating to the group's ambitious growth plan remains elevated, in our view. We expect these expansion plans to consume a material amount of cash over the next 12 months, limiting further near-term improvements in the group's credit metrics. "We could raise the ratings on Jewel UK Midco in the next 12-18 months if the group successfully reduces leverage such that S&P Global Ratings-adjusted debt to EBITDA falls consistently below 5.5x, along with an improvement in EBITDAR coverage (defined as earnings before interest, taxes, depreciation, amortization, and rent costs) to sustainably above 1.5x. Notably, in such a scenario, we would also expect reported free operating cash flow (FOCF) generation to turn neutral as growth in the group's U.S. earnings offsets investments in working capital and capital expenditure (capex). From this improvement in cash flows, we would expect S&P Global Ratings-adjusted discretionary cash flow (DCF) to debt to approach 5%. "We would expect such an improvement to follow continued earnings growth on the back of robust performance in the U.K. -- its core domestic market -- and the successful integration and growth of its U.S. businesses. "We could revise the outlook back to stable if WoS fails to improve its cash flows or to reduce leverage in line with our base case. This could occur if the company were to face operating setbacks -- including in earnings growth expectations or integration costs for its U.S. businesses -- or weakening U.K. earnings. This could lead to persistently negative cash flows and weaker credit metrics than we currently anticipate." ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than US$3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/booksto order any title today. ********* 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 2019. 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 * * *