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       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, October 8, 2019, Vol. 20, No. 201

                           Headlines



B E L A R U S

BELARUS: S&P Affirms 'B/B' Sovereign Credit Ratings, Outlook Stable


B O S N I A   A N D   H E R Z E G O V I N A

ZITOPROMET: Bijeljina Court Launches Pre-Bankruptcy Proceedings


F R A N C E

PICARD BONDCO: Fitch Affirms B LT IDR & Alters Outlook to Neg.


I T A L Y

FIRE SPA: Moody's Affirms B3 Corp. Family Rating, Outlook Stable
K-FLEX SPA: Fitch Affirms B+ LongTerm IDR, Outlook Stable
PRO.GEST SPA: S&P Lowers ICR to 'B' on Likely Covenant Breach


S E R B I A

DINERS CLUB: New Tender Launched for Montenegrin Subsidiary


S P A I N

CATALONIA: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable


T U R K E Y

ANTALYA: Fitch Affirms 'BB-' LongTerm IDRs, Outlook Negative


U N I T E D   K I N G D O M

BURY FC: IPA Continues to Investigate Complaint Over CVA
DEBENHAMS PLC: Staines Store to Remain Open Until January 2021
DRIBUILD: Financial Difficulties Prompt Administration
EA PARTNERS I: Fitch Withdraws C Sr. Sec. Ratings on Lack of Info
EG GLOBAL: Fitch Assigns B+(EXP) Rating to EUR1.27BB Sec. Notes

EG GLOBAL: S&P Rates EUR1.2-Bil. Senior Secured Notes 'B'
GREENSANDS UK: Fitch Lowers IDR to CC, Off Rating Watch Negative
PIZZA EXPRESS: Hires Financial Advisers Ahead of Creditor Talks
THOMAS COOK: Warned of GBP10-Bil. Creditor Claims Ahead of Collapse
TOWD POINT 2019: Fitch Assigns B(EXP) Rating on Class E Notes


                           - - - - -


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B E L A R U S
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BELARUS: S&P Affirms 'B/B' Sovereign Credit Ratings, Outlook Stable
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S&P Global Ratings, on Oct. 4, 2019, affirmed its 'B/B' long- and
short-term foreign and local currency sovereign credit ratings on
Belarus. The outlook remains stable.

Outlook

S&P said, "The outlook is stable because we expect that Belarus'
external imbalances will not escalate while its fiscal stance
remains comparatively tight over the next 12 months, and that the
government will retain access to international capital markets and
support from Russia to refinance upcoming public debt redemptions.

"We could consider lowering the ratings if worsening relations with
Russia threatened the government's refinancing plans. We could also
lower the ratings if contingent fiscal risks from the banking or
state-owned enterprise (SOE) sectors were to crystalize on the
sovereign balance sheet at higher levels than we expect.

"We could raise the ratings if we saw improvement in Belarus'
growth prospects, which we currently view as modest compared with
other countries' at a similar level of economic development. This
could be the case, for instance, if the authorities implemented a
credible reform program that enhanced the business environment,
facilitated foreign direct investment (FDI) inflows, and ultimately
fostered the development of a competitive domestic private sector.
We could also raise our ratings if the financial sector's
dollarization reduced further from the current elevated levels.
Upward ratings pressure may also emerge if Belarus agrees a
compensation mechanism for its losses resulting from Russia's tax
maneuver, thereby offsetting risks to economic growth, balance of
payments, and the budgetary position."

Rationale

S&P said, "Our ratings on Belarus remain supported by the financial
assistance it receives from the Russian government, despite
recurring disputes between the two countries. The ratings are also
supported by what we view as improved macroeconomic policymaking in
recent years. We consider that this has helped slow the pace of
public debt accumulation and bring persistently high inflation
under control."

The ratings are constrained by Belarus' low institutional
effectiveness and vulnerable balance-of-payments position, and,
despite recent improvements, the still-limited flexibility and
effectiveness of monetary policy.

Although economic performance has strengthened following the
2015-2016 recession, Belarus' headline growth rates remain below
those of countries at a comparable level of economic development.
Russia's tax maneuver in the oil sector presents downside risks for
Belarus if no bilateral compensation is agreed.

Institutional and Economic Profile: Modest economic growth and
risks from Russia's tax maneuver

-- S&P expects Belarus' economic growth to average a modest 2%
over the medium term.

-- Downside risks to growth remain, particularly if Russia
implements its planned tax maneuver without compensating Belarus
for lost revenue.

-- Domestic institutions remain weak. Power is highly centralized
and there are limited checks and balances between various state
bodies.

S&P said, "Throughout 2019, Belarus' economic growth has been
decelerating and we have revised our full-year forecast down to
1.2% from 2% previously. We estimate that, in real terms, output
has largely recovered to levels exhibited before the 2015-2016
recession, but prospects for further expansion appear uncertain."
According to the country's statistical office, GDP grew by just
1.1% over the first eight months of 2019 year on year. Several
factors have contributed to this economic slowdown.

In April-June 2019 Belarus experienced a disruption of oil flows
from Russia. This was related to the earlier contamination of oil
on the Russian side, following which Belarus seized the supplies
for a period of time in order to limit the damage to its oil
infrastructure. Consequently, the output of oil refineries reduced
by 7% year on year over the first eight months of 2019. Positively,
we understand that supplies have now resumed in full. The
authorities expect higher oil flows in the second half of the year,
so that the total annual supply from Russia should reach 18 million
tons--broadly in line with previous years. For now it remains
unclear if there will be any additional compensation from Russia
and what form it could take beyond supplying the aforementioned
contractually agreed amount.

S&P said, "In our view, weaker growth so far this year is also due
to a broader slowdown in Belarus' key trading partners. We forecast
that Russian growth will slow to 1.3% this year from 2.3% in 2018,
while growth in the EU will be 1.5%, down from 2.1% in 2018. Russia
and the EU account for a combined 70% of Belarus' exports.

"Even though the influence of some of the aforementioned factors is
set to fade in the future, we consider that Belarus' growth outlook
remains weak and below that of countries at a similar level of
economic development. We forecast that, in real terms, growth will
average 2% over the medium term." This is due to:

-- Continued weak economic performance of the Russian economy with
projected growth rates of under 2% through 2022 and meagre growth
in Europe averaging 1.5% over the same time span.

-- Several domestic structural factors that continue to constrain
Belarus' growth potential. The state maintains a pervasive role in
the economy, with the International Monetary Fund estimating that
nearly half of employment and value-added pertains to the public
sector. This underpins the existence of a multitude of inefficient
SOEs, which S&P understands remain loss-making but are difficult to
reform for political reasons. The government has communicated some
reform plans in the sector, including through appointing
independent directors to some of the SOEs and trying to run them on
market terms, but a comprehensive strategy to address these legacy
issues is yet to come.

-- Limited amount of FDI flows, given the perceived risky
operating environment. Although net FDI has consistently exceeded
2% of GDP in recent years, much of it reflects reinvested earnings,
rather than the entrance of new overseas players.

-- Belarus' aging population and weak population growth also limit
growth prospects.

The domestic IT sector remains a bright spot. High frequency
indicators suggest that value-added in information and
communication has continued to grow, and in fact the sector
accounted for more than half of the 1.1% growth observed over the
first eight months of 2019. S&P believes that Belarus' low unit
labor costs, convenient location, and comparatively strong
educational outcomes underpin this trend. Several successful
start-ups have emerged in Belarus in recent years. The sector has
been expanding consistently in recent years, with its share of GDP
rising to 5.5% of GDP last year from 2.5% in 2010. Over the same
time, the sector's positive influence on the country's balance of
payments has also grown; it currently accounts for over 20% of
services exports, up from just 8% in 2010.

At present, S&P sees two main risks to our macroeconomic outlook.
The first one pertains to the cycle of commodity prices, on which
Belarus remains dependent despite recent years' diversification.
Mineral products and chemical industry production account for
almost 50% of exports, directly exposing the sovereign to price
fluctuations. Moreover, many noncommodity export items--such as
agricultural products, machinery and equipment, and transport
vehicles--are sold to the Russian market, where demand remains
sensitive to oil price swings.

The second risk pertains to Belarus' relations with Russia. About
40% of Belarus' government debt is to Russia, and Russia's past
willingness to extend bilateral financing to Belarus has been an
important factor enabling Belarus to meet its financial obligations
on time and in full. Beyond direct financing, Russia has also
indirectly supported Belarus by supplying oil and gas at
below-market prices.

The future of this subsidized supply of hydrocarbons from Russia to
Belarus is currently uncertain. Russia is implementing the
so-called tax maneuver, under which it would effectively replace
the customs duty it places on its oil exports with a tax on
extraction, which would erode some of Belarus' revenue. Previously,
oil from Russia was supplied to Belarus free of the export duty.
Belarus in turn refined the oil and exported it further to Europe,
imposing its own export duty and keeping the proceeds. Under the
tax maneuver, the Russian oil export duty is set to gradually
decline to 0% by 2024 and be replaced by Russian domestic mineral
extraction tax. The maneuver means that--absent compensation from
Russia--by 2024 Belarus will de facto be importing oil at world
market prices.

The authorities estimate that without the compensation and assuming
an average oil price of $60, the negative impact on Belarus'
economy from the tax maneuver will amount to $9 billion (15% of
GDP) over the period to 2024. This includes the cumulative
estimated impact on the budget of $3 billion (5% of GDP) and the
impact on the oil refineries of $6 billion (10% of GDP).

Belarus is currently negotiating with Russia on a possible
mechanism to compensate these losses. However, so far the
visibility on either the time frame or the possible form of
compensation is very limited. It appears that Russia is tying up
the issue of the tax maneuver with a push for further bilateral
integration with Belarus, for example, through an enhanced and more
coordinated regulatory framework and an aligned tax legislation.
Officially, negotiations on the oil and gas agreements can proceed
once the working groups from the two countries finalize the further
integration steps later this year, but it remains unclear whether
this will actually be the case.

In the meantime, relations remain somewhat volatile. For example,
despite the Russian Finance Minister's announcement of a $600
million bilateral credit line to Belarus in April 2019, it has
never been disbursed. Belarus will also not be receiving the
previously anticipated seventh credit tranche from the Eurasian
Fund for Stabilization and Development.

In S&P's current forecast, it assumes that a compensation mechanism
will ultimately be put in place. If that does not happen, Belarus'
economic dynamics will likely be weaker. Under such a scenario,
Belarus' fiscal revenue will come under pressure and a series of
compensatory measures would be needed, including a hike in prices
for domestic consumers. This, in turn, will divert budgetary
resources from other uses, such as investments, as well as
pressuring domestic incomes by inhibiting consumption.

Belarus' institutional effectiveness remains weak; President
Alexander Lukashenko controls the government's branches of power.
Highly centralized power makes policymaking difficult to predict,
and S&P believes there are only limited checks and balances in
place between various state institutions. Belarus is due to hold
presidential elections in 2020, but S&P does not anticipate any
major changes in domestic political arrangements in the aftermath.
That said, S&P believes that broad economic policymaking in Belarus
has continued to improve in recent years.

Flexibility and Performance Profile: A notable improvement in
macroeconomic policy

-- Belarus' fiscal position has strengthened, thanks to a series
of budgetary measures it has undertaken in recent years.

-- The monetary policy framework has also improved, with inflation
falling below 5% in 2018 for the first time in the country's
post-Soviet history.

-- Balance-of-payments vulnerabilities still constrain the
sovereign ratings.

S&P considers that Belarus' fiscal position has improved. Net
general government debt previously increased to over 33% of GDP in
2016 from 15% of GDP in 2013. It has since moderated as the
authorities have put an increasing emphasis on budgetary
performance, including raising the previously subsidized utility
tariffs to cost-recovery levels, limiting the amount of extended
guarantees, and prioritizing investment projects. S&P also notes
that some expenditure is only adjusted if there is extra budgetary
space in a given year. For example, decisions to raise certain
public sector wages are typically taken if revenue surpasses
targets, which de facto acts as an adjustment mechanism.

In 2018, Belarus recorded a headline general government surplus of
4% of GDP, partially bolstered by favorable oil prices and a
corresponding higher intergovernmental transfer from Russia. High
frequency indicators suggest that a similar surplus has accumulated
over the first seven months of 2019. It has been bolstered by the
strong financial performance of local governments, dividends from
SOEs, and higher-than-planned prices for the oil and potash
fertilizers that Belarus exports. S&P considers that this surplus
will reduce toward the end of the year as revenue growth moderates
and spending picks up, including through an increase in wages.
Nevertheless, S&P projects the headline general government budget
will record a surplus of 1.5% of GDP this year.

S&P said, "Importantly, we consider that headline balances do not
fully reflect the actual fiscal stance in Belarus. This is because
the cost of construction of a new nuclear power plant in the north
of the country has been booked below the line, so that official
statistics on consolidated budgetary performance exclude this
expenditure. The authorities estimate the plant's total cost at $7
billion (12% of 2018 GDP). It is primarily financed by a bilateral
loan from Russia, which can be drawn on up to $10 billion. We still
see risks stemming from the project, given that several EU
countries have announced that they do not intend to buy electricity
generated by the plant because of safety concerns. This could make
it more difficult to service the underlying loan. Because there
have been some delays in construction on the Russian side, we
understand that the two governments could renegotiate the loan
conditions to prolong its maturity.

"Still, even if the plant's construction cost is explicitly
accounted for as expenditure, Belarus' budget has been in surplus
over the last three years. We project headline surpluses of 1.5% of
GDP over the medium term or a roughly balanced budget if the cost
of the nuclear power plant is netted out. Consequently, we expect
the net general government debt to stabilize at around 28% of GDP
over the medium term."

S&P currently sees three main risks to its baseline fiscal
projections:

-- Disagreements between Belarus and Russia on the terms of oil
and gas supplies could hurt Belarus' budget revenue. So far, no
decision has been reached between the two countries on compensating
Belarus for the adverse impact of the tax maneuver. Belarus may
also have to use its budget to compensate the oil-processing
companies for the higher input costs. Moreover, Belarus is due to
start negotiations on the terms of future gas supplies from Russia,
which presents risks if the agreed price is higher than the
existing one.

-- Contingent liability risks could materialize in the banking
system. During 2015 and 2016, the government cleaned up the balance
sheets of several banks by swapping nonperforming loans in the wood
processing and agricultural sectors for central and local
government bonds. In our view, the stability of the domestic
financial system has been on an improving trend, but the system
still remains substantially exposed to various SOEs, which account
for over a third of the total stock of domestic credit. Many of
these entities appear to be in a vulnerable position and could face
difficulties in servicing debt in the event of even a mild economic
shock, which could ultimately lead to fiscal costs.

-- Over 95% of Belarus' government debt is denominated in foreign
currency and is characterized by a comparatively heavy repayment
profile. Somewhat unusually, even more than 80% of domestic debt is
denominated in foreign currency.

In addition to improvements in fiscal policy, we consider that
Belarus' monetary policy flexibility has also improved in recent
years, albeit from previously very low levels. S&P views the
Belarusian ruble as largely floating, though still subject to
occasional interventions in the FX market. Most of the restrictions
on operations with foreign currency, including the mandatory
repatriation of foreign currency earnings, have been relaxed.

The authorities have reduced directed lending via state-controlled
commercial banks. S&P understands that the government plans to
phase directed lending out completely by 2021. The National Bank of
the Republic of Belarus (NBRB, the central bank) has also abandoned
the monetization of fiscal expenditure, which led to hyperinflation
over 2011-2012. Its medium-term goal is to move to full
inflation-targeting. In S&P's view, it has already made important
progress toward this goal. For example, in 2018, inflation fell
below 5% for the first time in Belarus' post-Soviet history,
against the NBRB's target of no more than 5%.

That said, substantial constraints on monetary policy remain. In
S&P's view, the NBRB lacks the operational independence to make key
decisions regarding its policy direction. The weak position of the
banking system, high deposit dollarization (above 50%), and
underdeveloped domestic capital market in local currency also
inhibit the monetary transmission channel. Even domestic public
debt remains predominantly denominated in foreign currencies.

Belarus' balance-of-payments vulnerabilities continue to constrain
the sovereign ratings. Although current account deficits have
moderated over the last four years, averaging about 2% of GDP, the
stock of accumulated external debt remains high at around 65% of
GDP at the end of last year. Moreover, the majority of this debt in
both the public and private sector is characterized by a heavy
repayment profile, and thus remains subject to rollover risks. In
the future, Belarus will remain partially reliant on lending from
Russia to refinance foreign debt coming due, which presents risks
if bilateral relations deteriorate.

S&P positively views that the central bank's FX reserves have
increased throughout 2019, to US$8.9 billion at the beginning of
September (15% of GDP) from US$7.1 billion at the beginning of the
year (12% of GDP). However, throughout this period, the current
account has posted a deficit. Therefore, the FX reserves have
largely grown on the back of foreign borrowing, the upward
revaluation of the central bank's gold holdings, and some foreign
currency purchases from domestic residents. The central bank still
has a number of nongovernment FX-denominated liabilities directly
booked on its balance sheet, and subtracting those, net FX reserves
amount to a more modest US$6 billion (10% of GDP).

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.

The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.

  Ratings List

  Ratings Affirmed
  Belarus

  Sovereign Credit Rating                 B/Stable/B
  Transfer & Convertibility Assessment    B
  Senior Unsecured                        B




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B O S N I A   A N D   H E R Z E G O V I N A
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ZITOPROMET: Bijeljina Court Launches Pre-Bankruptcy Proceedings
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SeeNews reports that the Bijeljina commercial court said it has
launched pre-bankruptcy proceedings at the bakery products and
grain manufacturer and trader Zitopromet.

The court said in a statement posted on the Banja Luka website that
the decision was taken upon a request by Zitopromet's trade unions
submitted with the court in June over payment arrears, SeeNews
relates.

Zitopromet's total debt to workers, suppliers and the state stood
at BAM5.0 million (US$2.8 million/EUR2.6 million) at the end of
May, the statement said, adding that the company's accounts have
been blocked for a long period of time, SeeNews notes.

According to SeeNews, the court will hold a hearing on Nov. 26.

Earlier this year, Zitopromet's owner Slobodan Pavlovic said he was
still hoping to find a buyer for the troubled company, saying three
potential investors -- two form Bosnia and one from the US -- were
interested in the company, SeeNews recounts.

Zitopromet, as cited by SeeNews, said earlier it closed 2018 with a
net loss of BAM2.7 million, and employed 207 workers at the end of
December.

The company is based in Bijeljina in the Serb Republic, which
together with the Federation forms Bosnia and Herzegovina.




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F R A N C E
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PICARD BONDCO: Fitch Affirms B LT IDR & Alters Outlook to Neg.
--------------------------------------------------------------
Fitch Ratings changed Picard Bondco S.A.'s Outlook to Negative from
Stable due to markedly slower deleveraging prospect than expected,
driven by a decline in funds from operations generation capacity.
The Long-Term Issuer Default Rating has been affirmed at 'B'.

Picard has faced mounting competitive pressure from the rapid
growth of some competitors, including organic-food retailers in
France, as well as higher operating costs. Although refinancing
needs are still far ahead, Fitch sees increasing pressure on the
rating if the company is unable to show a deleveraging path and a
robust free cash flow (FCF) generation capacity enabling a smooth
refinancing process.

The IDR is supported by Picard's leading position and strong brand
in the frozen-food market in France and its continued high
profitability ratios, which remain very high compared with peers
even though they are under some pressure. These factors are offset
by a very high leverage, which continues to be a rating
constraint.

Fitch has also affirmed all ratings for debt instruments issued
from Picard Group SAS and Picard Bondco S.A.

KEY RATING DRIVERS

Persistently High Leverage: Picard's high leverage is a key rating
constraint, with FFO adjusted gross leverage reaching a record high
of 9.8x (9.4x net) at financial year ending March 31, 2019 (FY19).
This was higher than its expectations and is in line with the 'CCC'
category. Shareholders Lion Capital and Aryzta AG exploited
Picard's highly cash generative business model with dividend
recapitalisations in December 2017 and May 2018, leading to a
cumulative debt increase of EUR360 million. The group retains some
deleveraging capacity thanks to cash flow generation but the
company has exhausted its headroom under its 'B' rating due to its
high leverage.

Profitability Strong but Under Pressure: Fitch expects Picard's
EBITDA margin to continue declining to 13.2% in FY20 from 13.6% in
FY19 due to a tougher cost environment in France than in previous
years. Fitch then expects EBITDA to trend towards 13.0%, thanks to
improved sales growth and tighter cost controls. Fitch believes
Picard's profit margins, which remain very high for the sector,
will continue to be underpinned by its business model, with revenue
largely generated by own-branded products, and structurally
profitable international expansion.

Less Robust Business Model: Over the past 12 to 18 months, Picard's
business model has been less resilient to adverse market
conditions, despite its leadership in the French niche frozen-food
market, where the company continues to benefit from high brand
awareness. Even though Fitch believes the FY19 like-for-like sales
decline was largely due to one-offs and the company is implementing
several initiatives to support growth, the frozen-food operating
environment is facing quick growth of some competitors, including
organic-food retailers. Coupled with higher costs inflation, this
has led Picard's margins to decline since FY17, although remaining
at very high level compared with the food-retail peers.

Positive Free Cash Flow: Fitch expects Picard will continue to
benefit from a high cash conversion ratio and positive FCF due to
the combination of structural high profitability, limited
working-capital swings and low capex needs. Fitch continues to see
this cash flow generation as a key positive differentiating factor
from retail peers. Fitch expects annual FCF to average 3.7% of
sales over the next fouryears.

Refinancing Risk Is Looming: Picard's refinancing needs are not
imminent (December 2022 for the RCF, November 2023 for the notes),
but the high leverage markedly increases its reliance on strong
operating performance and favourable market conditions to address
its future refinancing needs. The 'B' rating encapsulates continued
high profitability and low interest charges relative to its debt
burden, with an FFO fixed-charge cover expected to be stable at
1.8x over the next fouryears, a level comparable to 'BB'-rated food
retailers. However, in the event of refinancing, the interest
charge burden could increase due to perceived higher credit risk of
the company.

DERIVATION SUMMARY

Picard's rating is constrained by significantly higher leverage
than peers'. Also, it has a weaker business profile than food
retailing peers, such as Ahold Delhaize NV (BBB+/Stable) or
CarrefourSA (BBB/Stable), due to its significantly lower scale and
more limited diversification both from a geographical and
assortment perspective. Despite these weaknesses, Picard partially
compensates them with a strong positioning as a market leader in
the French niche frozen-food retail sector. Thanks to its unique
business model mostly based in own-branded products, Picard also
enjoys profitability levels more comparable with such food
manufacturers as Premier Foods plc (B/Stable), rather than with its
immediate food retailing peers. This differentiating factor implies
superior cash flow generation that supports financial flexibility
and liquidity.

KEY ASSUMPTIONS

  - Revenue growth of 2.7% in FY20 and 1.5% on average from FY21.

  - EBITDA margin declining in FY20 to 13.2% and then trending
towards 13.0%.

  - Capex averaging 3% over the rating horizon compared with 2.6%
for the previous fouryears, due to the new store concept.

  - No dividend payments and no M&A activity, with lower cash
outflows averaging EUR15million a year to holding companies for
operating purposes.

  - Average annual FCF at 3.7% of sales over FY20-FY23.

RECOVERY ASSUMPTIONS

In its recovery analysis, Fitch follows a going-concern approach in
restructuring and believe that it would be reorganised rather than
liquidated. Its calculations reflect Picard's brand value and
well-established, albeit niche, position, in the French frozen-food
market. The going-concern enterprise value (EV) of EUR869 million
is based on a post-distress EBITDA of EUR145 million resulting from
Fitch-adjusted 2019 EBITDA of EUR193 million, discounted by 25%.
Fitch regards this level of post-distress EBITDA to be appropriate
as it would be sufficient to cover a cash debt service cost of
EUR55 million, estimated cash taxes under stressed scenario of
about EUR20 million and a sustainable level of capex of EUR25
million-EUR30 million to maintain the viability of Picard's
business model.

Fitch has applied a distressed EV/EBITDA multiple of 6.0x, which
reflects its niche positioning and less vulnerable business profile
as a retailer generating sales mostly through own-branded products.
Fitch also assumes a fully drawn EUR30 million revolving credit
facility (RCF).

After a deduction of 10% for administrative charges from the
post-distress EV of EUR869 million, its waterfall analysis
generates high recovery prospects for the super senior RCF issued
by Picard Groupe S.A.S., in the RR1 band, leading to a 'BB'
instrument rating. They also result in above-average recovery
prospects in the 51%-70% range for the senior secured floating-rate
notes, leading to a 'B+' rating. Following the payment waterfall,
the senior notes' recovery rate is in the 0%-10% range, leading to
a 'CCC+' instrument rating.

The waterfall analysis output percentage on current metrics and
assumptions was 60% for the senior secured floating-rate notes,
100% for the super-senior RCF and 0% for the senior notes. The
recovery of the senior secured floating-rate notes decreased from
62%, due mainly to a decline in the assumed going-concern EBITDA.

RATING SENSITIVITIES

Developments that May, Individually or Collectively, Lead to
Positive Rating Action to 'B+'

An upgrade of the IDR is unlikely over the rating horizon, as a
meaningful improvement in Picard's financial ratios is reliant on a
significant improvement in the group's operating performance, which
Fitch does not foresee.

  - FFO adjusted gross leverage below 6.0x (5.5x net of readily
available cash) on a sustained basis.

  - FFO fixed-charge cover above 2.5x (FY19: 1.8x) on a sustained
basis.

Developments that May, Individually or Collectively, Lead to
Positive Rating Action to a Stable Outlook

  - Positive like-for-like revenue growth coupled with FCF margin
stabilising at or above 3.7% of sales.

  - FFO adjusted gross leverage below 8.8x and trending towards
8.5x by end FY23 (8x net of readily available cash, trending
towards 7x by end FY22).

  - FFO fixed-charge cover stable at 1.8x.

Developments that May, Individually or Collectively, Lead to
Negative Rating Action

  - Inability to reduce FFO adjusted gross leverage towards 8.5x
(7.0x net of cash) by end-FY22, resulting in a too high level of
refinancing risk for the rating closer to major debt maturities.

  - Deteriorating competitive position leading to sustained erosion
in like-for-like sales and EBITDA margin, as reflected in FCF
generation below 3.5% of sales.

  - FFO fixed-charge cover below 1.5x.

LIQUIDITY AND DEBT STRUCTURE

Comfortable Liquidity: Picard's liquidity is supported by its
healthy cash flow generation due to the limited working-capital
outflows and low capex. Liquidity is further supported by a EUR30
million RCF maturing in FY23 and few debt repayments until FY24.




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FIRE SPA: Moody's Affirms B3 Corp. Family Rating, Outlook Stable
----------------------------------------------------------------
Moody's Investors Service affirmed Fire S.p.A's B3 corporate family
rating, its B3-PD probability of default rating and its B3 EUR650
million Senior Secured Floating Rate Notes instrument rating. Fire
is the ultimate parent of companies trading under the name
Italmatch. The outlook remains stable.

RATINGS RATIONALE

The affirmation of ratings follows the announcements to raise
additional debt of EUR40 million and inject approximately EUR10
million of equity to fund the acquisition of Water Science
Technologies (WST). WST's activities are complementary to those of
Italmatch as well of those of BWA. Italmatch earlier in 2019
acquired BWA Water Additives. Both WST and Italmatch address the
oil and gas (O&G) and water treatment markets in the US. WST is an
asset- and capex-light business. The consolidation will initially
dilute Italmatch's group EBITDA margin, but only moderately. For
the last twelve months as of June 2019 the pro forma adjusted
EBITDA margin was 11.2%, including quality of earnings adjustments,
but excluding synergies. Management expects synergies of around
EUR3.6 million that Moody's expects to accrue over time and support
the margin uplift of WST towards Italmatch group EBITDA margin
levels in the mid-teens (%). Moody's has taken into account the
acquisition and integration track record of Italmatch.

The acquisition of WST comes at a time when the underlying
(Italmatch standalone) operating profitability has weakened as
evidenced by an accelerated contraction in Q2 2019, customer
de-stocking and utilization of short-term debt in order to fund the
working capital built-up. Although Moody's expects a seasonal
reversion of working capital in H2, other specialty chemical
companies have commented on continued volatile customer order
behavior, including lower badge sizes and longer frequency between
orders. WST increases the exposure to the US fracking industry. The
US fracking industry has been weak since Q4 2018 when the US
onshore rig count started declining by about 14% since mid-November
2018. Pro-forma the acquisition and excluding synergies 2019e
debt/EBITDA leverage would be 7.1x in its base case. With the WST
acquisition Italmatch has exhausted its leverage headroom for the
B3 ratings.

RATIONALE FOR STABLE OUTLOOK

The stable outlook assumes Italmatch to keep EBITDA margins around
15-16% in the next 12-18 months. The stable outlook recognizes the
commitment of shareholders to fund the proposed transaction with an
equity contribution of approximately EUR10.0 million which is also
a prove of ongoing shareholder support.

WHAT COULD CHANGE THE RATINGS UP / DOWN

Moody's could upgrade the ratings if debt/EBITDA were to move to
below 5.5x and if the company returns to consistent positive FCF
generation.

Moody's could downgrade the ratings if Italmatch's leverage
increased to above 7.0x debt/EBITDA. Ratings could also be
downgraded if FCF were to remain sustainably negative and liquidity
deteriorated.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Chemical
Industry published in March 2019.

COMPANY PROFILE

Fire S.p.A is the parent company of operating companies that trade
under the name Italmatch Chemicals, with head offices in Genova,
Italy. Italmatch is a global chemical additives manufacturer, with
leadership in lubricants, water & oil treatments, detergents and
plastics additives. The company operates through four distinct
business divisions: Water & Oil Performance Additives, Lubricant
Performance Additives; Flame Retardants and Plastic Additives and
Performance Products and Personal Care. In 2018 Italmatch had
revenues of EUR422.5 million. Bain Capital Private Equity acquired
Italmatch from Ardian, a private equity fund, in October 2018.


K-FLEX SPA: Fitch Affirms B+ LongTerm IDR, Outlook Stable
---------------------------------------------------------
Fitch Ratings affirmed Italy-based elastomeric insulation producer
L'isolante K-Flex Spa's (K-Flex) Long-Term Issuer Default Rating at
'B+' with a Stable Outlook and senior unsecured rating at
'BB-'/'RR3'.

The affirmation reflects K-Flex's solid business profile,
benefiting from international revenues, diverse end-markets and a
strong market position in a niche market, paired with its prudent
balance sheet management. The rating is mainly constrained by the
company's relatively small scale, limited range of products and
Fitch's expectation that strong operating profitability will be
fully absorbed by elevated investments in the medium term.

KEY RATING DRIVERS

Sound Business Profile Limited by Scale: K-Flex's business profile
is underpinned by a leading market position in a niche market for
elastomeric foam, a diversified geographic footprint, healthy
end-market diversification and a prudent management strategy.
K-Flex maintains a global commercial presence in over 60 countries,
with the largest region (Asia) comprising around 31% of revenue.
The group's international distribution network provides some
barriers to entry in the concentrated elastomeric insulation
market. These factors are offset by K-Flex's relatively small-size
and limited range of products and technologies.

Strong Operating Performance: Fitch expects K-Flex's top line
growth to remain sustainable in the near to medium term as demand
for elastomeric foams will be driven by tighter safety and energy
efficiency regulation. Fitch forecasts EBITDA margins at around 19%
in 2019-2022 driven by a constructive market environment and
earlier cost-savings initiatives. The group has demonstrated a
solid track record in delivering healthy growth, while maintaining
strong EBITDA margins in the high teens.

Weak Cash Conversion: Fitch expects that the company's strong
EBITDA will be fully absorbed by elevated capital expenditures and
investments in working capital. Relatively high capex will be
mainly related to the opening of new factories as well as
improvements in production capacity and relatively high investments
in product developments compared with previous years. The net
working capital position is expected to increase, mainly driven by
a moderate increase in inventories due to the opening of new
factories.

Stable Net Leverage: Fitch expects K-Flex's funds from operations
(FFO) adjusted net leverage to hover around 2.5x-3.0x, broadly in
line with previous years. Fitch expects that new investments will
offset strong operating profitability, limiting potential
deleveraging over the medium term. Fitch assumes that the company's
financial structure will remain commensurate with the rating.

Sustained Organic Growth: K-Flex's continuing top-line growth is
credit-positive, as it improves product diversification, expands
geographic reach and favourably exploits cross-selling
opportunities. Management prioritises organic investments over
acquisitions. Fitch expects this trend to continue in the coming
years, driven by a further expansion of production capacity. Small
acquisitions could be accommodated under the rating given the
group's low leverage (FFO adjusted net leverage at end-2018:
2.9x).

Above-Average Recovery: Fitch expects above-average recoveries for
K-Flex's senior unsecured debt, driven by the group's strong
operating profitability. This results in the senior unsecured
rating of 'BB-'/'RR3'. Its recovery is based on an estimated
post-distress EBITDA of EUR54 million as a minimum required for the
company to continue operating as a going concern. Fitch also
applies a 5.5x distress enterprise value /EBITDA multiple,
consistent with K-Flex's peers, and deduct a 10% administrative
charge. The Recovery Rating is constrained to one-notch of uplift
under its "Country-Specific Treatment of Recovery Ratings"
criteria, reflecting that the company is based in Italy.

DERIVATION SUMMARY

K-Flex's smaller size is more than offset by its broader end-market
diversification, materially higher margins and lower leverage
compared with Officine Maccaferri (B-/Negative) and Praesidiad
(B/Stable). Although the three companies are not direct
competitors, they all operate in niche markets. However, K-Flex's
end-market exposure and geographic diversification is comparable
with higher-rated capital-goods producers. Together with a
conservative balance sheet management and limited earnings
volatility, this positions the company at the high end of the 'B'
category.

KEY ASSUMPTIONS

  - Revenue growth of around 4% annually

  - Stable EBITDA margin at around 19%

  - Operating profitability fully absorbed by elevated capex and
working capital consumption

  - No acquisitions and disposals

  - No dividends

RATING SENSITIVITIES

Developments That May, Individually or Collectively, Lead to
Positive Rating Action

  - Continuous improvement in business risk profile

  - FFO adjusted gross leverage sustainably below 4.0x (2018:
4.4x)
  
  - Sustainably positive free cash flow (FCF)

Developments That May, Individually or Collectively, Lead to
Negative Rating Action

  - FFO adjusted gross leverage sustainably above 5.0x (2018:
4.4x)

  - EBITDA margins declining towards the mid-teens (2018: 19%)

  - Negative FCF through the cycle

LIQUIDITY AND DEBT STRUCTURE

Strong Liquidity: The group's liquidity is underpinned by EUR108
million unrestricted cash (adjusted for EUR10 million of cash
required for working-capital swings) at end-2018 and EUR50 million
in undrawn committed facilities. There are no significant
maturities until 2023 when notably a EUR180 million bond is due.

SUMMARY OF FINANCIAL ADJUSTMENTS

  - Lease-equivalent debt was calculated at EUR52 million using a
multiple of 8x

  - Cash of EUR10 million was treated as restricted cash to reflect
average intra-year net working capital requirement


PRO.GEST SPA: S&P Lowers ICR to 'B' on Likely Covenant Breach
-------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Italian packaging group Pro.Gest SpA to 'B' from 'BB-'. S&P also
lowered its issue rating on Pro.Gest's fixed-rate senior unsecured
notes to 'B' from 'BB-'. At the same time, S&P is keeping the
ratings on CreditWatch with negative implications.

S&P said, "The downgrade follows our discussions with Pro.Gest
following the release of the company's half-year 2019 results,
which showed larger working capital outflows and weaker EBITDA
generation than we expected, resulting in weaker credit metrics.

"We now expect Pro.Gest to generate negative free operating cash
flow (FOCF) of EUR95 million in 2019 and post leverage of 6.0x in
December 2019. We also expect liquidity to remain under pressure as
the company has no access to undrawn committed credit lines, and
experienced a material erosion of available cash in the first six
months of 2019. In addition, Pro.Gest anticipates that it will
breach the covenants under its bilateral loan and mini-bond
agreements in December 2019. The covenant breach would only
crystallize in March or April 2020, when the covenant certificates
are due. Some of the agreements include a grace period. We
understand that Pro.Gest intends to request a covenant waiver from
lenders. We believe that the business is viable and anticipate that
lenders will be supportive of the company's request."

Pro.Gest successfully stemmed its working capital outflows in the
third quarter of 2019, notably via a reduction in waste-paper
purchases. S&P said, "However, if there is no material improvement
in market conditions, we expect FOCF generation to remain minimal
or negative in 2020. The company could generate cash from inventory
sales or from the disposal of nonstrategic assets (EUR50 million).
However, we still see risks to liquidity, notably if the EUR47.5
million anti-trust fine ends up being due in its entirety in May
2020. We understand that the company is seeking approval to pay
this fine in instalments over 30 months."

The negative CreditWatch placement reflects a one-in-two likelihood
that S&P could lower the issuer credit rating on Pro.Gest further.
S&P expects to update the CreditWatch status in the coming months,
as it receives further clarifications from the company on:

-- The progress of its negotiations with lenders to waive the
covenant breach it anticipates in December 2019;

-- Its liquidity position, notably on the timing and final amount
of the anti-trust fine, which S&P's estimate at EUR47.5 million;
and

-- Its asset disposal plans.

S&P said, "We could lower the rating if Pro.Gest's lenders do not
waive the anticipated breach of the leverage covenants under its
bilateral loan and mini-bond agreements in December 2019. We could
also lower the rating if Pro.Gest's liquidity deteriorated further;
for instance, if the entire EUR47.5 million fine is due in May
2020, or if working capital needs continue to increase.

"We could remove the rating from CreditWatch and consider raising
it if Pro.Gest's lenders waive the anticipated breach of the
leverage covenants under its bilateral loan and mini-bond
agreements in December 2019. We could also remove the rating from
CreditWatch and consider raising it if we see a material
improvement in the company's liquidity position."




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DINERS CLUB: New Tender Launched for Montenegrin Subsidiary
-----------------------------------------------------------
SeeNews reports that Serbia's Bankruptcy Supervision Agency has
launched a new tender for the Montenegrin subsidiary of insolvent
charge card company Diners Club International Belgrade.

The Bankruptcy Supervision Agency said in a notice the estimated
value of Diners Club International Montenegro stands at EUR341,497
(US$374,200), SeeNews relates.

According to SeeNews, a deposit of EUR68,299 is required to
participate in the auction, while the deadline for the submission
of bids is Nov. 11.

The Bankruptcy Supervision Agency launched a tender for the
acquisition of the Montenegrin subsidiary of Diners Club
International Belgrade in March but attracted no bids until the
expiry of the deadline on April 16, SeeNews discloses.

The Serbian commercial court declared Diners Club International
insolvent in June 2017, SeeNews recounts.




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CATALONIA: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable
-----------------------------------------------------------
Fitch Ratings affirmed the Autonomous Community of Catalonia's
Long-Term Foreign- and Local-Currency Issuer Default Ratings at
'BB' with Stable Outlooks.

The affirmation is based on a 'Midrange' assessment of the risk
profile and a moderate 'bbb' debt sustainability assessment.

Catalonia is a Spanish autonomous community, whose main
responsibilities cover health, education and social spending. The
regional government operates under a tax-sharing system, and its
revenue is composed of taxes, including those that over which it
has tax-setting power, and transfers from the central government.

Fitch introduced an investment grade rating floor for Spanish
regions at 'BBB-' in February 2013, mainly based on fiscal and
financial discipline shared with the national government as well as
the availability of financial mechanisms from the national
governments, such as FLA, to refund debt coming to maturity. Fitch
decided in November 2015 to suspend the rating floor for Catalonia
amid lack of cooperative relationship between the regional and
central governments. With upcoming national elections on November
10 and a ruling on the Catalan independence leaders' trial,
tensions may flare up again, hence the floor remains suspended.
However, any change or reassessment of the likelihood (ability and
willingness) of central government support to Catalonia could lead
to an IDR uplift.

Catalonia is located in the north-east of Spain. The region covers
6.3% of Spanish land, and housed 7.58 million inhabitants in 2018,
representing approximately 16.3% of the country's population and
19.1% of national GDP. Catalonia's economy is diversified by
geography and industry, with family businesses and SMEs prevalent.
The region's development is somewhat ahead of the rest of Spain,
but GDP has recently been growing more slowly than nationally at
3.25% versus 3.60%. The unemployment rate at 11.8% is lower than
nationally (14.4%). In 2017 Catalonia's regional GDP per inhabitant
was 101% of the EU28 average.

KEY RATING DRIVERS

Revenue Robustness Assessed as Midrange

Catalonia's revenues are mostly made up of taxes and transfers from
the central government. Most taxes are collected by the central
government and transferred to the autonomous communities on a
preliminary basis, with a final settlement two years later. This is
often the cause of some volatility in growth such as the 8% spike
in 2017.

Around 90% of revenue, represented by personal income tax (PIT),
VAT, special and wealth related taxes, is correlated with GDP,
which at EUR231 billion in 2018, or 101% above the EU 2017 per
capita average, underpins revenue predictability. Fitch expects
revenue growth of nearly 5% per year, well above nominal GDP growth
(3.4%) in 2019-2023. This will be mainly due to continuing recovery
in employment, which increased to 3.2 million affiliates in 2019, a
12% rise compared with 2013.

Revenue Adjustability Assessed as Midrange

The region has tax-setting powers on certain taxes, with PIT the
most significant (38% of revenues), with no cap on the rates from
the state. The region has also used these tax-setting powers to
shape fiscal benefits, and the base of the PIT calculation and its
corresponding tax rates. According to Fitch's calculations,
removing these fiscal benefits would allow the region to cover 80%
of the highest drop in revenues since 2011 (before that date a
reduction in revenues was related to the international financial
crisis; and so considered unusual fiscal performance behaviour),
qualifying the Region for a midrange assessment.

However, Fitch deems an increase of this size (4.7% of operating
revenue) would be highly politically sensitive. Additionally, there
is an equalisation fund that estimates the distribution of
resources in relation to equality metrics, All the autonomous
communities contribute to this equalisation fund and resources are
then distributed according to the region's relative position in
terms of equality metrics. In accordance with its above-average
socio economic position, Catalonia is a net contributor to this
fund.

Expenditure Sustainability Assessed as Midrange

Catalonia has demonstrated moderate control of expenditure,
underpinned by the relatively high weight of inflexible expenses
such as healthcare and education, which account for about 60% of
total spending excluding debt repayment. However, the
cyclically-sensitive social and unemployment expenditure, which
account for about 10% of total spending, add some volatility, as in
2015-2016 when operating spending grew by 12%.

Fitch does not expect major change in management policy should
early elections be called by the regional government. Conversely,
Fitch expects expenditure growth to be slightly below revenue
growth, somewhat constrained by the fiscal targets (deficit at 0.4%
of regional GDP). Fitch expects the operating margin to improve to
5.8% before 2023 from 2.4% in 2018 under its rating case scenario,
which features an accumulated economic slowdown of 1.6% from 2020
to 2023, or a reduction from 3.4% to 3% nominal average GDP growth
to test the resilience of debt metrics to the economic cycle.

Expenditure Adjustability Assessed as Midrange

Control of expenditure has improved since the introduction of the
Budget Stability Law, which sets targets of maximum spending growth
(at 2.4% for 2018) along with deficit objectives. Subsequently,
deficits have been progressively reduced although Catalonia failed
to comply with these targets prior to 2018.

The region has limited flexibility in workforce management (nearly
30% of total spending excluding debt repayment) in terms of both
number and salaries of civil servants. The share of committed
expenditure is close to 85% and the region has limited
affordability of reductions as the level of existing services is
below the national average.

Liability and Liquidity Robustness Assessed as Midrange

Catalonia is subject to the solid national framework for debt and
liquidity management with prudential borrowing limits such as a
debt objective at 22.4% of GDP for 2020. Additionally, the region
has a conservative debt structure, with a low proportion of
short-term debt at about 2%, almost all debt euro-denominated
(99.6%), low maturity concentration and an average cost of debt at
1.13% in 2018. However, refinancing risk is not negligible as
Catalonia's average life of debt is relatively short at 4.19 years
and debt service of EUR9.7 billion in 2019 is far from being
covered by the operating balance (0.1x). The region has limited
off-balance sheet risks, consisting mainly of debt and guarantees
to companies such as the railway or general infrastructure, and the
finance institute.

Liability and Liquidity Framework (Flexibility) assessed as
Midrange

Fitch considers Catalonia cash (about EUR1.5 billion) to be
restricted for the payment of the payables in excess of
receivables. Cash is also far from covering debt maturities in
2019/2020, even if Fitch considers the region's credit lines of
about EUR400 million, with Spanish banks such as BBVA and Caixabank
highlighting reliance on market or government funding.

In fact the state support mechanisms for regions' debt refinancing
have also been provided to Catalonia since 2012 at advantageous
financial conditions, mitigating liquidity risk and reducing the
likelihood of default.

Debt Sustainability Assessment: 'bbb'

According to its rating case scenario, Fitch expects the economic
liability burden (net adjusted debt (+a pro-rata share of central
government debt/regional GDP), the primary metric of debt
sustainability, will remain in the band of 90%-95% until 2023,
leading to an 'a' debt sustainability assessment.

Fitch however lowers this to 'bbb' due to weak secondary metrics,
ranging from the payback ratio (net direct risk to operating
balance), which will improve but remain above 25 years, to the
fiscal debt burden and debt service coverage, at over 200% and
below 1x, respectively.

DERIVATION SUMMARY

Fitch assesses the Standalone Credit Profile (SCP) at the 'bb'
category, reflecting a combination of a Midrange risk profile, and
'bbb' debt sustainability assessment. The notch-specific 'bb' SCP
balances the moderate economic liability burden with the weak
payback ratio and actual debt service coverage as well as the peer
analysis such as State of Bremen or State of Kerala. As a result,
Catalonia's IDR is 'BB'.

Catalonia's Short-Term IDR is 'B' as the correspondent Short-Term
IDR for the Long-Term IDR.

KEY ASSUMPTIONS

Fitch's key assumptions within its rating case for the issuer
include:

  - Nominal growth of operating revenue at an average
    of 5.1% yoy for the next five years

  - Nominal growth of operating expenditure at an average
    of 4.6% yoy for the next five years

  - Nominal growth of capital expenditure to grow 2.5% on
    a yearly basis.

  - Cost of debt to gradually grow to 1.5% from 1.2%

RATING SENSITIVITIES

Positive rating action could come from an improvement of the
payback ratio below 13x and the actual debt service coverage above
1.2x.

Negative rating action could come from a deterioration of the
economic liability ratio above 100%.




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ANTALYA: Fitch Affirms 'BB-' LongTerm IDRs, Outlook Negative
------------------------------------------------------------
Fitch Ratings affirmed the Metropolitan Municipality Antalya's
Long-Term Foreign- and Local-Currency Issuer Default Ratings at
'BB- ' and removed them from Rating Watch Negative. The Outlooks on
the IDRs are Negative, reflecting that on the sovereign, as
Antalya's ratings are capped by the Turkish sovereign ratings
(BB-/Negative).

Fitch placed Antalya on RWN on August 20, 2018 as a result of the
sharp depreciation of the Turkish lira against the euro of 33.8%
yoy at end-2018 and its adverse effects on Antalya's debt
sustainability. This could have triggered the negative sensitivity
for a downgrade due to the city's large unhedged foreign currency
debt and weaker debt coverage capacity compared with other large
Turkish peers with a large share of unhedged foreign debt.

With about 2.4 million inhabitants, Antalya is the fifth largest
city in Turkey and the seventh-largest GDP contributor per capita,
accounting for an average 3% of national GDP. On the national
development index, the city is fifth among 81 Turkish cities and
acts as a tourism hub, capturing on average 30% of tourist arrivals
nationwide (end-July 2019: 31%). Antalya has a fairly diversified
and buoyant local economy, but it is heavily skewed to services
sector (60% of local GDP), the cyclical nature of which makes the
city less resilient to the adverse shocks compared with its
national peers.

Fitch does not expect notable changes to the city's socio-economic
profile. According to budgetary regulation Antalya can borrow on
the financial and capital markets. Its budget accounts are
presented on a modified accrual basis, while according to law
budgets are prepared for actual and two consecutive years and
approved for the actual year. Since 2014 the city has had
metropolitan status.

KEY RATING DRIVERS

Revenue Robustness Assessed as Weaker

The Weaker assessment results from the expected adverse effects of
the negative operating environment on Antalya's tax revenue growth
prospects, which Fitch expects to remain subdued. The city benefits
from a buoyant and dynamic tax revenue base, but the large share of
tourism sector within the local economy could adversely affect its
tax revenue base in times of a negative operating environment, due
to its cyclical nature.

Defined by Law, Antalya's tax revenue income is the main source of
the city's income. The bulk of the city's operating revenue comes
from the nationally collected and allocated tax revenues
attributable to the city's local performance, which constitute
almost 60% (2017: 56%) of its operating revenue, and have
demonstrated a stable performance. This is followed by current
transfers received, comprising tax revenue allocation by the
central government according to population and area criterion,
which makes up 22.1% of operating revenue.

There is a track record of growth of operating revenue being
slightly above the national real GDP growth rate, underpinned by
sound GDP per capita, 139% higher than the Turkey's median.
However, the robustness of the economic resilience should be viewed
against the sub-investment grade sovereign rating.

Revenue Adjustability Assessed as Weaker

The Weaker assessment reflects the unitary administrative structure
of the Turkish government, acting as the rate-setting authority,
significantly limiting Turkish local and regional governments'
(LRG) fiscal autonomy and revenue adjustability. LRGs have very
limited rate-setting power over local taxes such as property tax,
natural gas and electricity consumption tax, advertisement and
promotion, fire insurance and entertainment tax, and their main tax
revenue income is heavily dependent on the shared tax revenues from
the central government. Local tax revenue generation is low and
accounted for a low of 1.5% of Antalya's operating revenue at
end-2018.

Similar to other Turkish LRGs Antalya has mainly higher discretion
power on non-tax revenues such as charges, rental income and fees
levied for public services such as car parking, private bus lines,
and museum entrance fees. In 2018, 16.2% of operating revenue was
generated by non-tax revenue.

Expenditure Sustainability Assessed as Midrange

The Midrange assessment reflects a track record of fairly robust
control of opex. After becoming a metropolitan municipality in
2014, there was significant opex volatility due to the initial
adjustments of new responsibilities assigned by law 6360. Since
2017, control has improved, as evidenced by robust operating
margins by international comparison of on average close to 33%,
which Fitch expects to continue over the forecast period.

By law Turkish metros have a strong investment profile, with
spending mainly concentrated in investments such as the provision
of large and essential infrastructure investments. These are fairly
anti cyclical in nature, and would not inflate spending in a period
of economic downturn. Accordingly, the main drivers of the total
spending are capex (53% of total spending) followed by purchase of
goods and services (22.3% of total expenditure) and staff costs
(17.9% of total expenditure) at end 2018.

Compared with international peers, Turkish metropolitan
municipalities are not in charge of resource-absorbing spending
areas, such as healthcare and education.

Expenditure Adjustability Assessed as Midrange

The Midrange assessment reflects the lower rigidity of expenditure
by international comparison, with expected staff costs less than
20% of total spending and capex consistently above 40% of total
expenditure. This increases the leeway to cut or postpone spending,
and Fitch factors in about 10% leeway in the spending structure.

Although the city is mandated by law to undertake large
infrastructure investments, it has the capability to contain
non-mandatory investments and smooth out its investment tenure
profile. This means it can adjust its capex investments to economic
cycles in the aftermath of local elections. The city reduced its
capital expenditure for 2019, in line with its plans to reduce
expenditure. Fitch also believes that city will slow down its capex
investments over the forecast period, mainly concentrating on
mandatory items, with the remaining share of capex at an average
40% in 2019-2023.

Liabilities and Liquidity Robustness Assessed as Weaker

The Weaker assessment reflects the structural features of the
national debt and liquidity regulation, which would lead to
material risk exposures for Turkish LRGs' budgets in general.

There are prudent debt control mechanisms in place, such as annual
debt revenue limits and approval from an upper tier government for
LRGs external borrowings, which Fitch views as credit-positive.
However, Fitch believes that national debt regulation has resulted
in material risks such as unhedged FX risk, interest rate risk, to
which large Turkish metros are exposed to, making a significant
dent in their budgets in market volatility. Although the use of
hedging is not prohibited by law, the lack of available
counterparties impedes the use of these instruments. This reflects
the structural weakness of capital markets in Turkey in general
that are less deep and liquid.

In comparison with other national peers, Antalya is significantly
exposed to unhedged FX risk, as 27% of its total debt consisted of
unhedged foreign debt (euro loans) at end-2018, which led to a
passive increase in Antalya's debt stock of TRY 246 million or
12.7% as a result of the lira's depreciation by 33.8% against the
euro at end 2018 The share of foreign currency denominated loans
has declined due to the increased share of the domestic borrowing.
Nevertheless, Fitch expects the share of foreign debt in the total
debt portfolio to increase to on average 40% over the forecast
period..

The debt stock is amortising and has a moderately lengthy weighted
average maturity of seven years, while below 10% of its debt only
matures within one year, mitigating refinancing pressure. Debt
consists solely of bank loans, with the majority at variable rates,
exposing the city to interest rate risk. The city's contingent
liabilities are largely limited to the financial debt of its waste
water and water distribution affiliate, ASAT, which is self-
financing.

Liabilities and Liquidity Flexibility Assessed as Weaker

Antalya's liquidity is restricted to its own cash reserves. The
year-end cash coverage of debt servicing costs has been weak and
declined to below 1x from the five-year average of 1.5x, mainly due
to significant offloading of capex. In addition, there is no
emergency bail out mechanisms or Treasury facilities in place to
overcome any financial squeeze. The city has good access to
financial markets but creditors have a counterparty risk assessment
below 'BBB-'.

DERIVATION SUMMARY

Debt Sustainability Assessment: 'aa'

Fitch assesses Antalya's standalone credit profile (SCP) at 'bb',
which reflects a combination of its Weaker profile assessment of
the city's risk profile and 'aa' assessment of debt sustainability.
The SCP also factors in a comparison of Antalya with its peers.
Fitch did not identify any asymmetric risk or extraordinary support
from the central government that could affect the IDR beyond SCP
assessment. However, Antalya's Long-Term Foreign Currency IDR is
capped by Turkey's Long-Term Foreign-Currency IDR.

The 'aa' assessment of debt sustainability is derived from a
combination of robust payback ratio (net adjusted debt/operating
balance), which is in line with a 'aaa' assessment, a fiscal debt
burden (net adjusted debt to operating revenue) corresponding to a
'bbb' assessment, and a sound actual debt service coverage ratio
(operating balance-to-debt service, including short-term debt
maturities) assessed at 'aa'.

Like other Turkish LRGs Antalya is classified by Fitch as a type B
LRG, under which the city covers debt service from its cash flow on
an annual basis. According to Fitch's rating case, the payback
ratio, which is the primary metric of debt sustainability
assessment for type B LRGs, will remain below five years in
2019-2023. For the secondary metrics, Fitch's rating case projects
that the fiscal debt burden will increase to 135-161%, during most
of the forecast period while the actual DSCR will remain above 2x
on average in 2019-2023.

KEY ASSUMPTIONS

Fitch's key assumptions within its base case for the issuer
include:

  - Annual growth rate of operating revenue on average 14.7% yoy;
    on average 0.5pp over the nominal national GDP growth rate

  - Annual growth rate of operating expenditure 13% yoy on average

  - Proportion of capex to be at around 40% of total expenditure

  - Following sovereign's forecast on EUR/TRY exchange rate,
    amount of debt and proportion of foreign debt interest
    expenses to increase by 7.1% and 3.4% in 2019 and 2020,
    respectively

Fitch's rating case envisages the following stress compared with
base case:

  - Annual growth rate of operating revenue to be 1.5pp lower
    than base case scenario

  - Annual growth rate of operating expenditure 1pp above the
    base case

  - Capex to account for on average around 40% of total spending

  - EUR/TRY year-end forecasts for 2019-2020 are taken by the
    sovereign. For 2021-2023 Fitch applied a prudent approach
    and discounted a 15% yoy depreciation following the
    historical average close to 15% yoy depreciation.

RATING SENSITIVITIES

A downgrade of the sovereign or sharp deterioration of the net
payback ratio beyond five years coupled with sharp increase in
fiscal burden would lead to a reassessment of the debt
sustainability and could lead to a downgrade.

According to Fitch's rating case, an upgrade would be possible if
the sovereign was upgraded, provided that the city maintains its
debt sustainability ratio sustainably below five years.




===========================
U N I T E D   K I N G D O M
===========================

BURY FC: IPA Continues to Investigate Complaint Over CVA
--------------------------------------------------------
SamfordCrimson News reports that the Insolvency Practitioners
Association are continuing to investigate a complaint about the
Company Voluntary Agreement set up by Steve Dale to save Bury
Football Club.

Mr. Dale bought the financially-beleaguered club from Stewart Day
for GBP1 in December 2018, SamfordCrimson News recounts.  He saw a
proposed takeover by C&N Sporting Risk fall through in August,
which was followed by Bury's expulsion from the EFL, SamfordCrimson
News discloses.

Mr. Dale failed to clear the club's debts, and players and staff
went unpaid, with the club served a winding-up petition by HMRC
before agreeing a company voluntary arrangement, SamfordCrimson
News relates.

Bury Football Club is an English association football club based in
Bury, Greater Manchester, England.


DEBENHAMS PLC: Staines Store to Remain Open Until January 2021
--------------------------------------------------------------
SurreyLive reports that Debenhams in Staines will remain open until
at least January 2021, according to the town's business forum.

According to SurreyLive, the High Street department store looked
set to close as early as spring 2020 following a ruling that the
Debenhams rescue deal with landlords to cut rents and close 50
stores was legal.

This allowed the chain to press ahead with plans for a Company
Voluntary Arrangement (CVA) to close its least profitable stores in
2020, which in an announcement made in April included stores in
Staines and Walton, SurreyLive states.

When contacted for comment by SurreyLive on Sept. 20, a spokesman
for Debenhams confirmed the restructuring was continuing as
initially planned, SurreyLive notes.

However, the Staines department store will now continue trading
until 2021 after the decision was put on hold "saving hundreds of
jobs" in the town, SurreyLive discloses.


DRIBUILD: Financial Difficulties Prompt Administration
------------------------------------------------------
Business Sale reports that Dribuild, an acclaimed construction
company operating in southwest England, has collapsed into
administration following a string of financial difficulties.

Dribuild, headquartered in Hawkfield Way, Bristol, was forced to
call in professional advisory firm Begbies Traynor to handle the
administration process, with partners Neil Vinnicombe --
neil.vinnicombe@begbies-traynor.com -- and Simon Haskew --
simon.haskew@begbies-traynor.com -- appointed as joint
administrators, Business Sale relates.

According to Business Sale, financial pressures mounted as
subcontractors failed to get paid on time, forcing the GBP40
million-business into administration.

Nine county court judgements are still outstanding for the company,
and some members of staff have been retained to assist with the
administration period, Business Sale discloses.



EA PARTNERS I: Fitch Withdraws C Sr. Sec. Ratings on Lack of Info
-----------------------------------------------------------------
Fitch Ratings withdrawn EA Partners I B.V.'s and EA Partners II
B.V.'s senior secured ratings of 'C'/'RR4' as EAP I and EAP II have
defaulted on coupon payments. Following the bankruptcies of some
participating obligors (Air Berlin plc, Alitalia and Jet Airways
India Ltd [only participating for EAP I]), Fitch does not have
sufficient information to maintain the ratings. Accordingly, Fitch
will no longer provide ratings or analytical coverage for EAP I and
EAP II.

Fitch has withdrawn the ratings due to insufficient information.

KEY RATING DRIVERS

Not applicable.

RATING SENSITIVITIES

Rating Sensitivities do not apply as the ratings have been
withdrawn.


EG GLOBAL: Fitch Assigns B+(EXP) Rating to EUR1.27BB Sec. Notes
---------------------------------------------------------------
Fitch Ratings assigned EG Global Finance PLC's EUR1.27
billion-equivalent senior secured notes an expected issue rating of
'B+(EXP)' with a Recovery Rating of 'RR3'.

EG Global Finance PLC is an issuance vehicle for the restricted
group EG Group Limited (EG; B/Stable). The new senior secured notes
will rank pari passu with all existing senior secured debt within
the group.

The new notes will part finance EG's USD2.19 billion acquisition of
Cumberland Farms, Inc. (Cumberland), a portfolio of 563 petrol fuel
stations (PFS)/ convenience stores. This acquisition increases EG's
US footprint, making the group the fifth-largest US independent
convenience store operator.

The assignment of the final rating is subject to the receipt of
final documentation being in line with the information already
received.

KEY RATING DRIVERS

Acquisition Increases US Footprint: The acquisition by EG of
Cumberland increases its US and global footprint and allow it to
become the fifth-largest independent convenience store operator
across the country. It will also further enhance its presence
across the north eastern states of America and Florida and
complements its existing Kroger portfolio of sites, which is
situated further west.

Acquisition to Boost EBITDA: Fitch considers EG's geographical
diversification and increase in scale as critical, given the
group's flat-to-declining fuel volumes, broadly fixed fuel margins
and growing alternative fuel usage. Fitch believes EG will follow a
similar convenience/FTG-driven strategy in Australia and the US.
Fitch expects the Cumberland purchase to add around USD170 million
of EBITDA to EG in 2020. EG aims to integrate the new sites and
achieve synergies of around USD150 million, which together with
improved fuel supply contracts and cost savings such as optimised
staff deployment, could increase group EBITDA to around EUR1.4
billion based on the group's expectations.

Leading Global PFS Operator: EG's IDR of 'B' reflects the group's
position in western Europe and the US as a leading petrol fuel
station (PFS) and convenience retail/food-to-go (FTG) operator,
following the acquisition of Esso petrol stations in Germany and
Italy and the Kroger Co. and Minit Mart US acquisitions in 2018.
These acquisitions, together with the purchase of Woolworths
Australia's (WA) 540 PFS in Australia and 563 Cumberland PFS in
2019, will push fuel sales volumes to around 24 billion litres a
year. Fitch expects EG to benefit from a stronger negotiating
position on fuel contracts with oil majors in 2019 and beyond.

Changing, Sustainable Business Model: EG has evolved from a small,
entrepreneurial group into a major global fuel and retail operator
in less than three years, with over 5,500 PFS. The industry is
concentrated and undergoing further consolidation in most of EG's
mature market geographies (Italy, Germany, the UK and France) as a
result of a decline in global fuel volumes of around 1% a year. The
group has remained highly acquisitive in 2018 and 2019, as the PFS
sector consolidates, while developing its convenience and FTG
formats in Europe, the US and Australia markets with the greatest
growth potential.

Challenging Yet Achievable Execution Risks: EG's enlarged scale and
market reach gained over a relatively short time period spell
inherently high execution risks to achieve a sustainable business
model across regions. A strong acquisitive strategy has required
changes and upgrades to the management's staffing and control
functions across the wider group. This is mitigated by EG's good
record of integrating acquisitions given management's history of
growing the business, integrating acquisitions swiftly and
efficiently, identifying significant margin improvements and
cost-saving opportunities from the incorporation of the group's
targets.

Growing Convenience, FTG Segments: EG's strategy is to develop the
convenience retail and FTG offering on its sites to capture
above-average growth in the sector as "time-short" consumers
increasingly want to shop more frequently and more easily or closer
to home or the office. It also enables the group to offset
stagnation in both fuel volumes and gross profits from fuel sales.

High Leverage: Fitch estimates that the mainly debt-funded
Cumberland and Australian acquisitions should result in higher
leverage (pro-forma funds from operations (FFO) lease adjusted
gross leverage at around 7.5x and fixed-charge cover between 2.3x
and 2.6x). With nearly EUR120 million of cost savings achieved in
2018 and further cost savings identified at WA and Cumberland, the
group should be able to improve its tight rating headroom, should
the acquisition of Cumberland incur additional costs and reduce
cash flows for de-leveraging. This is reflected in the Stable
Rating Outlook.

Positive FCF: Fitch expects de-leveraging to be moderate in the
next three years, and that FCF should remain positive, despite
convenience/FTG development capex and high interest payments,
including new currency hedging costs. Fitch expects the group to
continue generating positive FCF from 2019 (around 1.5%-1.8% of
sales), but EG is still slightly vulnerable to adverse events, such
as a downturn in consumer spending in Europe and the US or a sharp
rise in fuel costs, as it might not be able to pass on the full
increase to customers in a timely manner.

Capex Fuels Diversification and Margins: Fitch projects that once
the WA and Cumberland acquisition are completed, EG's FCF is likely
to be slightly constrained by maintenance and growth capex
equivalent to 2% of consolidated revenues. Capex will fund the
opening of new sites, the conversion of the most promising stations
from company-owned and dealer-operated (CODO) to company-owned
and-operated (COCO) and support the roll-out of EG's convenience
retail/FTG strategy, as well as increase the group's
weighted-average operating margins. Fitch expects that the US and
WA acquisitions will lead to a material increase in development
capex but with an accretive impact on the group's profit margins.

DERIVATION SUMMARY

EG's IDR of 'B' reflects the leading market position of the group
as an independent petrol station operator in Europe and the US,
positive FCF and diversification towards the more profitable
non-fuel retailing and FTG segments. However, with the two US and
Australian acquisitions predominantly debt-funded, the group's
FFO-annualised adjusted leverage is likely to remain above its
negative downgrade sensitivity of 7.5x into 2020. FFO fixed-charge
cover is likely to remain close to 2.5x and FCF generation
capabilities are expected to be broadly intact.

A majority of EG's business is broadly comparable to other peers
that Fitch covers in its food/non-food retail rating and credit
opinions portfolios, although the COCO operating model should
provide more flexibility and profitability for EG. With around 300
highway sites, EG can also be compared with motorway services group
Moto Ventures Limited (B/Stable) and, to a lesser extent, with
emerging markets oil products storage/distributors/PFS vertically
integrated operators such as Puma Energy Holdings Pte Limited
(BB-/Stable) and Vivo Energy Plc (BB+/Stable).

Moto displays slightly lower leverage than EG and benefits from an
infrastructure-like business profile. It also operates in a
regulated market with high barriers to entry that Fitch believes
are more defensive than that of EG. In contrast, EG is more
geographically diversified with exposure to both the US and
Australian markets and a strong market share in seven western
European countries, against only one in Moto's case.

KEY ASSUMPTIONS

European business assumptions:

  - Slight decline in fuel volumes, with stable gross margins

  - Convenience retail sales to grow 2%-3% a year, including
    new sites roll-out with stable gross margins of 32%-36%,
    depending on the country

  - Like-for-like FTG sales to increase 1% on top of new sites
    roll-out with stable gross margins above 60%

  - Stable overall EBITDA margin around 4%-5% of sales based
    on current fuel prices

WA assumptions:

  - AUD5 billion revenue; with fuel margins of AUD8.8 cents a
    litre; acquisition entirely debt-funded

Cumberland assumptions:

  - USD4 billion revenue; with fuel margins of USD6.3 cents
    per litre; acquisition 65% debt-funded

Fitch's assumptions also include:

  - US and Australian acquisitions to date in 2019

  - EUR250 million additional cash spent on acquisitions a
    year in 2020 and 2021, at 10x EBITDA multiple and cash-funded

  - Total capex to remain at 2% of sales, facilitating both
    maintenance and conversion of CODO sites

  - No dividends

  - 1.13 EUR/GBP, 1.23 EUR/USD exchange rates

KEY RECOVERY ASSUMPTIONS

According to its bespoke recovery analysis, higher recoveries would
be realised by preserving the business model using a going-concern
approach reflecting EG's structurally cash generative business.
This is despite EG's reasonable asset backing as the value from
EG's sites would not be sufficient against the recovered value of a
going-concern scenario.

Fitch has applied a discount of 25% to the Fitch-estimated EBITDA
for FY20 inclusive of annualised earnings from all acquisitions
made to date and already actioned synergies to derive a
Fitch-forecasted EBITDA of EUR1.3 billion. This is discounted by
25% to arrive at a post-restructuring EBITDA of EUR975 million.
Fitch estimates that such discount would lead to the group becoming
FCF-neutral, while paying its cash interest, distressed corporate
tax and maintenance capex.

In a distressed scenario, Fitch believes that a 5.5x enterprise
value(EV)/EBITDA multiple reflects a conservative view of the
weighted average value of EG's portfolio. By comparison, Moto's
7.5x distressed multiple reflects the regulated nature of the
market, the high quality of the group's highway sites, and an
infrastructure-like cash-flow generation profile.

In line with its criteria, Fitch assumes EG's revolving credit
facility (RCF) and letter of credit (LC) facility to be fully drawn
and takes 10% off the EV to account for administrative claims.

Its waterfall analysis generates a ranked recovery for the planned
senior secured tranche in the 'RR3' band, indicating a 'B+(EXP)'
instrument rating. The waterfall analysis output percentage on
current metrics and assumptions was 55%, in line with its current
ratings (B+) and Recovery Ratings (RR3) for the existing senior
secured debt tranches.

RATING SENSITIVITIES

Developments That May, Individually or Collectively, Lead to
Positive Rating Action

  - Evidence of success in the roll-out strategy of convenience
    retail and FTG sites in Germany and Italy, leading to EBITDA
    margin rising sustainably above 5%

  - Successful integration of US operations over the next 18
months

  - FFO fixed-charge cover above 2.5x on a sustained basis

  - Sustainable EBITDA growth leading to FCF generation above 3% of
sales

  - FFO lease-adjusted gross leverage below 5.5x through the
cycle,
    due to additional profit from new convenience retail/FTG
outlets
    and/or rising fuel operating profits

Developments That May, Individually or Collectively, Lead to
Negative Rating Action

  - Meaningful delays in the integration plan, leading to
    stagnating profit margins

  - FCF generation trending towards neutral

  - FFO lease-adjusted gross leverage sustainably above 7.5x

  - FFO fixed-charge cover below 2x on a sustained basis

  - Significant decline in fuel volumes and convenience retail
    sales and/or margins leading to the EBITDA margin falling
    below 3% based on current fuel prices

LIQUIDITY AND DEBT STRUCTURE

Satisfactory Liquidity: At the close of the Cumberland acquisition,
Fitch expects EG to have around EUR200m million of cash on balance
sheet to fund the next two to three years of development capex
related to new site openings, COCO conversions and convenience
retail/FTG diversification. EG's liquidity should also benefit from
three RCFs (GBP250 million, USD150 million and USD47.3 million) and
a EUR385 million loan facility.


EG GLOBAL: S&P Rates EUR1.2-Bil. Senior Secured Notes 'B'
---------------------------------------------------------
S&P Global Ratings said that it has assigned its 'B' issue rating
and '3' recovery rating to EG Group's newly proposed EUR1,267
million equivalent senior secured dual-currency notes. The notes
rank pari passu to all other senior secured debt outstanding and
will be issued by EG Global Finance PLC, which also issued the
existing senior secured notes.

The group parent, EG Group Ltd. (B/Stable/--), will use the funds
raised to refinance the recently announced Cumberland Farms
acquisition. The issuance therefore has no further effect on our
view of EG Group's credit metrics beyond the level we already
anticipated.

Including the proposed issue, the capital structure will comprise
about EUR7.9 billion senior secured debt in the form of notes and
term loans, rated 'B'. The recovery rating on all senior secured
debt is '3', indicating meaningful recovery in the event of a
default (50%-70%; rounded estimate: 65%). The capital structure
also includes about EUR260 million in second-lien debt outstanding,
rated 'CCC+'. The recovery rating on this debt is '6', indicating
its expectations of negligible recovery in the event of a default
(0%-10%; rounded estimate: 0%).


GREENSANDS UK: Fitch Lowers IDR to CC, Off Rating Watch Negative
----------------------------------------------------------------
Fitch Ratings downgraded Greensands UK Limited's Long-Term Issuer
Default Rating and senior secured rating to 'CC' from 'B-' and
removed them from Rating Watch Negative. Fitch has also revised the
Outlook on Southern Water Services Limited's senior secured class A
to Negative from Stable and affirmed the rating at 'BBB+'.

The downgrade of Greensands' IDR reflects its expectation that it
may no longer receive operating cash inflows. This is because of
the limited ability of the intermediate holding company
structurally positioned between Southern Water Services Limited
(SWS) and Greensands, Greensands Finance Limited, to upstream
dividends or interest on subordinated intercompany debt in the
medium to long term. Greensands' only source of cash flows is
distributions from the MidCo. The downgrade of the senior secured
debt rating to 'CC' reflects the downgrade of the IDR and zero
notching for recovery (RR4, 46%).

The revision of the Outlook on SWSF's secured debt reflects its
expectation of a borderline financial profile for the rating in the
next price control (AMP7), taking into account the large regulatory
fine announced in June 2019 as well as adverse draft price
determinations. The Negative Outlook also incorporates significant
downside risks related to final price determinations, including
receiving totex allowances insufficient for delivering on
performance commitments and further weighted average cost of
capital reduction, which would put excessive pressure on the credit
profile. Fitch expects to review the Outlook once the final
determinations are published, assuming there is no Competition
Market Authority appeal.

SWSF is the debt-raising vehicle of SWS, the regulated monopoly
provider of water and wastewater services for parts of Sussex,
Kent, Hampshire and the Isle of Wight. Greensands is a holding
company of SWS.

KEY RATING DRIVERS

Weak Expected Credit Profile: According to its updated forecast,
SWS's adjusted net debt to regulatory capital value (RCV) is
expected to be around 76.8% by FYE25, which is at the negative
rating sensitivity of 77%. Fitch also expects average cash-based
and nominal post-maintenance interest cover ratios (PMICRs) at 1.3x
and 1.5x in the next price control, AMP7, respectively, at or below
the negative guidance of 1.3x and 1.6x. The forecast PMICRs are
negatively affected by the recently announced regulatory penalty as
well as the reduction in the allowed WACC outlined in the draft
determinations. At the same time they include the benefit of a
contemplated swap restructuring transaction.

Limited Cash Inflow to Greensands: Fitch expects Greensands to have
very limited access to any cash payments from the MidCo, which is
its only source of cash flow. As a result, Greensands could
struggle to service its debt, which could lead to a payment default
or a debt restructuring event in the medium term. Most of the
company's debt has an option to accrue interest in kind without
causing an event of default for 18 months, therefore liquidity
failure could be expected beyond this point.

At March 31, 2019, Greensands had GBP700 million of senior secured
debt, including a GBP250 million 8.5% fixed rate bond and GBP450
million of bank debt. The company repaid the bond in April 2019,
replacing it with bank facilities. Greensands raised GBP250 million
of new borrowing during FY19 and injected into SWS.

Challenging Draft Determinations: In its draft price determinations
Ofwat announced a 21bp reduction in the WACC, reflecting falling
interest rates. The updated WACC stands at 3.19% (CPIH terms),
including retail margins. The regulator warned that WACC could be
reduced by further 37bp. At the same time, Ofwat's view on
wholesale efficient total costs (totex) remained largely unchanged
from its initial assessment of business plans while performance
targets became stricter. For SWS it means that the regulator allows
flat base costs in AMP7 versus AMP6 in 17/18 prices, but requires
to reduce leakage by 15%, per capita consumption by 7%, water
supply interruptions by 51%, internal sewer flooding incidents by
33% and pollution incidents by 41% towards 2025.

Material Totex Gap Remains: The company's response to draft
determinations indicates a material cost gap of GBP262 million (in
2017/2018 prices). Since the submission of its business plan in
September 2018, SWS reduced its AMP7 totex plan by GBP0.5 billion,
stating that a lower level of spending could be achieved via higher
implied efficiencies and lower scope of investments. The company's
final acceptable level of totex is GBP3.5 billion versus GBP3.2
billion proposed by the regulator (excluding pension deficit
recovery). SWS states that a shift in cost allowances beyond the
acceptable level would put undue pressure on the business plan
execution.

Reduced Financial Flexibility: In nominal terms, the proposed
regulatory fine and revised WACC will reduce SWS's AMP7 revenues by
around GBP138 million and GBP60 million, respectively. This will
reduce AMP7's wholesale EBITDA by 8%. On top of this, Fitch
incorporates service incentive mechanism (SIM) penalties of GBP43
million carried over from AMP6 and assumes incremental
performance-related penalties in AMP7 of GBP17 million. Its
assumption for AMP7 performance-related penalties could increase
substantially if final price determinations propose no or limited
change to the totex allowances versus draft determinations. In this
case, Fitch would assume that SWS would try to avoid overrunning on
totex and as a result would fail to achieve some of the performance
commitments leading to penalties. A further downward revision of
WACC would also be strongly credit negative.

Further Penalty Possible: There is an ongoing investigation by the
Environmental Agency, with a possibility of a further fine. This is
because unpermitted and premature spills of wastewater from the
treatment works were released into the environment as a result of
the operational and reporting failures. The penalty relates to
SWS's failings to manage, operate and report performance of its
wastewater treatment works dating back to 2010-2017.

No Benefit From PAYG Variance: In the draft determinations for SWS,
Ofwat assumed that accounting opex would be GBP178 million
(nominal) lower than the company's pay-as-you-go (PAYG) totex
allowance in AMP7. Consequently, the regulator arrived at higher
EBITDA and operating cash flow than if it had assumed a consistent
PAYG ratio for both revenue and costs. Fitch previously commented
that it would adjust for these differences in PAYG rates, hence the
PMICRs Fitch calculated, assume regulatory PAYG for both revenue
and opex purposes.

Swap Restructuring Does Not Improve Credit Profile: To mitigate the
financial impact of the regulatory fine, SWS is contemplating a
swap restructuring transaction, which is fundamentally a way to
borrow through swaps. The company expects to receive around GBP170
million of upfront payments that will be used to reduce cash
interest and debt at SWS. Fitch includes these additional cash
inflows in its model, but at the same time adjusts the net debt, so
the net impact on the adjusted gearing is neutral. Fitch estimates
the overall benefit of these transactions to be marginal.

Corporate Restructuring Completed: During FY19, SWS completed its
financing plan to improve resilience ahead of AMP7. This plan
included early repayment of GBP400 million of SWS's class B debt,
funded by GBP452 million of incremental debt raised at the MidCo,
borrowing an additional GBP250 million at Greensands and injecting
it in SWS to reduce class A debt part-fund swap re-couponing. As a
result of these transactions, SWS's net adjusted gearing reduced to
69.8% at FYE19 from 80.1% in FY18. Class A creditors signed the
deed of covenant to ensure no further class B debt issuance hence
the effective senior debt limitation at SWS is aligned with the
class A debt covenant of 75% net debt to RCV.

Expected AMP6 Performance: SWS expects to achieve around GBP64.6
million or 2% totex outperformance in AMP6. The company also
estimates total SIM penalties of GBP36.4 million and net outcome
delivery incentive (ODI) rewards of GBP1.9 million in 12/13 prices.
Retail performance resulted in net losses, although it improved
over FY18 and FY19 mainly due to proactive bad debt management. SWS
plans to further improve its retail performance to achieve cost to
serve aligned with the allowance in AMP7. Overall, in AMP6 SWS
expects to achieve return on regulated equity of 5.3% (actual
capital structure), slightly below the base allowed return of 5.6%.
Fitch expects the company's gearing at 70.8% by FYE20 and average
adjusted cash PMICR of 1.3x in AMP6.

Nominal PMICR Rating Sensitivity: Fitch will be monitoring nominal
PMICRs alongside the cash flow-based ones to complement its
assessment of the companies' financial profiles and cost of debt
performance. For SWS Fitch has set negative nominal PMICR
sensitivities at 1.6x for senior secured debt.

Material Derivative Liability: SWS has a portfolio of index-linked
swaps with a notional amount of GBP1,317 million and a negative
marked-to-market value of GBP1,382 million at March 31, 2019,
including GBP148 million of accumulated accretion. Although Fitch
does not adjust the gearing ratio for these contingent liabilities
unless the swaps crystallise, Fitch factors them into its overall
rating assessment as they could substantially increase the
company's senior debt and/or reduce debt recoveries in case of
insolvency. Most of the swaps have five-year accretion pay-down
provisions, leading to Fitch adding half of the annual accretion
charge to the interest for the purpose of calculating cash-based
PMICR.

DERIVATION SUMMARY

SWS is one the regulated monopoly providers of water and wastewater
services in England and Wales. SWS's debt financing benefits from
structural enhancements, including trigger mechanisms (such as
dividend lock-up provisions tied to financial, positive and
negative covenants) and debt service reserve liquidity. The
company's lower ratings compared with peers with covenanted
structures, such as Anglian Water (Anglian Water Services Financing
Plc's class A and B notes rated A/BBB+/Negative), reflect weaker
credit metrics and financial and regulatory performance under SWS's
current capital structure.

Greensands is a holding company of SWS. The higher rating of peers
such as Osprey Acquisitions Limited (BB/Negative) and Kelda Finance
(No.2) Limited (BB/Negative) reflects their lower gearing, higher
dividend cover capacity and stronger regulatory performance of the
underlying operating companies.

No Country Ceiling constraints affect the rating. Parent/Subsidiary
Linkage is applicable but given the regulatory, structural and
contractual ring-fenced structure of the group it does not impact
the ratings

KEY ASSUMPTIONS

Fitch's Key Assumptions Within Its Rating Case for the Issuer

  - Long-term RPI at 3%, long-term CPIH at 2%

  - Allowed wholesale WACC of 3.08% (CPIH terms)/2.08% (RPI
    terms)

  - 50% of the RCV is RPI-linked and another 50% plus capital
    additions is CPIH-linked, starting from FY21

  - Allowed totex of GBP3.5 billion in nominal terms (net of
    grants and contributions)

  - No out/(under)performance on totex is assumed

  - Proposed regulatory fine for misreporting wastewater
    performance of GBP138 million evenly reduces allowed revenue
    in FY21-FY25 (nominal); a potential regulatory fine from
    the Environmental Agency;

  - AMP6's cumulative SIM penalty reduces AMP7's cash flows by
    GBP43.3 million in total; Retail EBITDA of approximately
    negative GBP1 million per year, based on the improved cost
    to serve, but also reflecting AMP6's SIM performance

  - ODI penalties related to water quality measure of GBP16.5
    million in total assumed for AMP7

  - Weighted average PAYG rate of 41.6% over AMP7; same rate
    assumed for regulatory and accounting purposes, there is  
    no financeability benefit from regulatory PAYG above the
    accounting rate

  - Run-off rate as per draft determinations at 5.4% on average

  - Long-term RPI at 3%, CPIH at 2%

  - Non-appointed EBITDA of c. GBP2.5m per year

  - Operating company annual pension deficit recovery payments
    on average GBP8.7 million above the allowance in FY21-FY25

  - Operating company receives GBP170 million of additional
    funding from the newly contemplated swap restructuring,
    which is used for de-gearing SWS and reducing cash debt
    service in AMP7; Fitch adds these to adjusted net debt

  - Dividends paid by SWS in FY21-FY25 are assumed to be
    GBP125 million

  - No external dividends are paid

  - Cost of new class A debt of 3.7% (nominal), around 30% of
    newly raised class A debt is RPI-linked;

  - SWS nominal cost of debt goes down from 5.7% in FY20 to
    5.1% in FY25; cash cost of debt reduces from 3.1% to 2.8%

  - HoldCo nominal cost of debt goes up from 5.7% to 6.1%

  - Zero corporate tax payments and allowance

KEY RECOVERY RATING ASSUMPTIONS:

  - Greensands' recovery analysis is driven by liquidation value,
    with an assumption of 10% of liquidation value administrative
    claim. The 10% administrative claim takes into account that
    SWS's large out-of-money interest rate swaps portfolio may
    reduce the equity value at default;

  - Liquidation value is assumed to be 100% of RCV, reflecting
    enterprise value reduction in the UK water sector;

  - A default of Greensands to be caused by a payment default
    due to lack of operating cash flow. Fitch assumes Midco and
    SWS to keep operating as usual, but MidCo to be unable to
    make cash distributions or payments related to subordinated
    debt from HoldCo;

  - SWS and MidCo gearing is assumed at 74.8% and 7.5% on a
    standalone basis, respectively;

  - Forecast holdco gearing of 15.6% net debt to RCV, plus a
    full draw-down of the holdco GBP40 million liquidity
    facility (SWS's and Midco's liquidity facilities remain
    undrawn); and

  - After deduction of 10% for administrative claims, its
    waterfall analysis generated a ranked recovery in the
    RR4 band, indicating a 'CC' instrument rating. The
    waterfall analysis output percentage on current
    metrics and assumptions was 46%."

RATING SENSITIVITIES

SWS:

Developments That May, Individually or Collectively, Lead to
Positive Rating Action (revision of Outlook to Stable

  - Positive rating action is unlikely in the near term given
    the financial profile pressure. Fitch could revise the Outlook
    to Stable if there is a material improvement in the financial
    package offered at final determinations compared with draft
    determinations. In the longer term, Fitch could consider
    positive rating action if the management's transformational
    programme results in substantially improved regulatory and  
    financial performance.

Developments That May, Individually or Collectively, Lead to
Negative Rating Action (downgrade)

  - Fitch-adjusted net debt/RAV above 77%, cash-based PMICR below
    1.3x and nominal PMICR below 1.6x on a sustained basis due
    to, for example:

  - An unfavourable outcome of final price determinations for
AMP7,
    with no material improvement versus the draft determinations

  - Inability to improve retail performance to at least
    profit-neutral level in AMP7

  - A sustained decline in operational or regulatory performance
    resulting in large totex underperformance or ODI penalties

  - Significant regulatory fine from the Environmental Agency

Greensands:

Developments That May, Individually or Collectively, Lead to
Positive Rating Action

  - More cash flow available to Greensands either due to an
    equity injection in group entities or as a result of MidCo  
    being able to make cash distributions

Developments That May, Individually or Collectively, Lead to
Negative Rating Action

  - No measures are implemented to mitigate the impact of MidCo
    being unable to make meaningful cash distributions to
    Greensands

  - Payment default leading to a distressed exchange

LIQUIDITY AND DEBT STRUCTURE

SWS:

As of end-March 2019, SWS had unrestricted cash of GBP370.7 million
and a GBP160 million undrawn (of GBP330 million) revolving credit
facility that matures in March 2024 (with an optional tenor
extension). A GBP300 million class A bond was repaid in April 2019
out of the closing cash balance as at March 31, 2019. This
liquidity position is sufficient to cover maturities, opex and
capex requirements as well as dividends to the Midco company for at
least the next 12 months.

In addition, debt service reserve liquidity of GBP142 million and
operating and maintenance reserve liquidity of GBP45 million is in
place in accordance with the group's secured and covenanted
financing documentation. However, this back-up liquidity is only
available for addressing liquidity needs during financial
distress.

Greensands:

Greensands relies on MidCo dividends for debt service. As of
end-March 2019, the company held unrestricted cash and cash
equivalents of GBP3.2million. It raised GBP250 million new
borrowings in FY19 which was invested into SWS. It has a GBP40
million committed, undrawn revolving credit facility, which matures
in November 2023. Additionally, most of the company's debt has an
option to accrue interest in kind without causing an event of
default for 18 months.

Compared with the company's expected finance charge of around GBP39
million in FY20, the existing facilities could help Greensands
service its debt in the horizon of the next 18 months. However, due
to the expected lack of cash flow from the MidCo, Fitch assesses
liquidity as weak.

SUMMARY OF FINANCIAL ADJUSTMENTS

Net debt is adjusted for part of pension deficit not recovered
through allowed regulated revenues

Net debt includes accretion on index-linked swaps

50% of accretion charge on index-linked swaps added to cash
interest for the purpose of PMICR calculation (GBP21.8 million in
FY19)


PIZZA EXPRESS: Hires Financial Advisers Ahead of Creditor Talks
---------------------------------------------------------------
Jane Bradley at The Scotsman reports that fears are mounting over
the future of popular restaurant chain Pizza Express after it
emerged it has hired financial advisers ahead of talks with its
creditors.

According to The Scotsman, it is believed the company, which
launched 54 years ago and which was acquired by Chinese private
equity firm Hony Captial in 2014, has around GBP655 million of debt
-- equivalent to GBP1.6 million per restaurant.

It is believed to have appointed financial adviser Houlihan Lokey
Inc. to prepare for debt talks with its creditors, The Scotsman
discloses.

The company's 2018 accounts it reported net debt of GBP1.1 billion,
with interest charges of GBP93.1 million, resulting in a pre-tax
loss of GBP55 million, The Scotsman notes.  The accounts showed
that a higher UK wage bill and property costs weighed on
profitability amid a testing year for the casual dining sector, The
Scotsman states.

Tim Symes, head of restructuring and insolvency at law firm DMH
Stallard, as cited by The Scotsman, said: "Pizza Express may just
be the latest high street name to be at risk of succumbing to the
pincer movement of high rents and changing consumer habits that has
already seen off so many high street staples of late.

"Even restaurants cannot escape the on-line revolution, due to the
rising dominance of the delivery apps and the vast choice, and
therefore competition, they offer."

He added: "It has been reported that is Pizza Express is set to
hire advisers to help them negotiate with their creditors.  I
expect they will start by talking to their landlords to invite them
to reduce their rents on premises, an invitation which may be hard
to resist if the alternative is a potentially vacant unit.  Unless
they can get enough suitable deals informally with landlords and
other creditors, then a Company Voluntary Arrangement, most
recently used by Jamie's Italian, Prezzo and Byron Burger, may well
be on the cards."

Pizza Express, which opened its first outlet in Wardour Street in
London's Soho, now has more than 600 restaurants globally,
including around 20 in Scotland.  It also sells more than 35
million pizzas in UK supermarkets every year.


THOMAS COOK: Warned of GBP10-Bil. Creditor Claims Ahead of Collapse
-------------------------------------------------------------------
Oliver Gill at The Daily Telegraph reports that Thomas Cook bosses
were warned ahead of its collapse that creditor claims could top
GBP10 billion, as a complex network of off-balance-sheet guarantees
unwound.

A confidential report, prepared just days before the 178-year-old
company's failure and seen by The Daily Telegraph, lays bare how an
insolvency would wreak havoc across the travel sector, leaving huge
debts owed to hoteliers, intermediaries and other suppliers.

According to The Daily Telegraph, many suppliers could expect to
recoup just 3.4p in every pound owed to them.  Bondholders, whose
debts totalled more than GBP1 billion, may only -- recover 2.3p,
The Daily Telegraph discloses.

                    About Thomas Cook Group

Thomas Cook Group Plc is the ultimate holding company of direct and
indirect subsidiaries, which operate the Thomas Cook leisure travel
business around the world.  TCG was formed in 2007 following the
merger between Thomas Cook AG and MyTravel Group plc.
Headquartered in London, the Group's key markets are the UK,
Germany and Northern Europe.  The Group serves 22 million customers
each year.

The Group operates from 16 countries, with a combined fleet of over
100 aircraft through five entities holding air operator
certificates in the UK, Germany, Denmark and Spain.  The Group has
2,800 owned and franchised retail outlets (including 555 shops in
the UK) and operates 199 own-brand hotels across the world.

As of Dec. 31, 2018, the Group had 21,263 employees, including
9,000 in the U.S.

The travel agent originally proposed a restructuring.  It was
scheduled to ask creditors Sept. 27, 2019, for approval of a scheme
of arrangement that involves (a) substantially deleveraging the
Group by converting GBP1.67 billion of RCF and Notes debt currently
outstanding into new shares (15%) and a subordinated PIK note (at
least GBP81 million) to be issued by the recapitalized Group in
proportions still to be agreed; and (b) the transfer of at least a
75% interest in the Group Tour Operator and an interest of up to
25% in the Group Airline to Chinese investor Fosun Tourism Group.

Representatives of the company filed a Chapter 15 petition in New
York on Sept. 16, 2019, to seek U.S. recognition of the UK
proceedings as foreign main proceeding.  The Chapter 15 case is In
re Thomas Cook Group Plc (Bankr. S.D.N.Y. Case No. 19-12984).
Latham & Watkins, LLP is the counsel.

But after last-ditch rescue talks failed, on Sept. 23, 2019, Thomas
Cook UK Plc and associated UK entities announced that they have
entered Compulsory Liquidation and are now under the control of the
Official receiver.  The UK business has ceased trading with
immediate effect and all future flights and holidays are cancelled.
All holidays and flights provided by Thomas Cook Airlines have
been cancelled and are no longer operating.  All Thomas Cook's
retail shops have also closed.  Restructuring specialist
AlixPartners was appointed to manage the process, subject to the
approval of the court.

Separate from the parent company, Thomas Cook's Indian, Chinese,
German and Nordic subsidiaries will continue to trade as normal.


TOWD POINT 2019: Fitch Assigns B(EXP) Rating on Class E Notes
-------------------------------------------------------------
Fitch Ratings assigned Towd Point Mortgage Funding 2019 - Auburn 13
PLC's notes expected ratings, as follows:

Class A1 - 'AAA(EXP)sf'; Stable

Class A2 - 'AAA(EXP)sf'; Stable

Class B - 'AA(EXP)sf'; Stable

Class C - 'A(EXP)sf'; Stable

Class D - 'BB+(EXP)sf'; Stable

Class E - 'B(EXP)sf'; Stable

Class Z - 'NR(EXP)sf'

Class XA - 'NR(EXP)sf'

The assignment of final ratings is contingent on the receipt of
final documents confirming to information already received.

This transaction will be a securitisation of buy-to-let (BTL) and
owner-occupied (OO) residential mortgage assets originated by
Capital Home Loans (CHL) and secured against properties in England,
Wales, Scotland and Northern Ireland. The pool contains 94.8% BTL
loans and 5.2% OO non-conforming loans, which are modelled as
separate sub-pools.

The assets have been securitised in previous Auburn Securities plc
transactions: 62.5% of the assets to be securitised currently
reside in the Towd Point Mortgage Funding 2016 - Auburn 10 (Auburn
10) transaction. Auburn 10 will be called ahead of this transaction
closing and the loans sold to Towd Point Mortgage Funding 2019
Auburn 13 plc by CHL (seller).

The remaining portion currently resides in Auburn Warehouse
Borrower 4 Limited and will be purchased by CERH GR 2 Sub B.V.
(seller) prior to the sale of the loans to Towd Point Mortgage
Funding 2019 Auburn 13 plc; this pool contains five loans
originated by Permanent TSB.

The sellers will be Cerberus European Residential Holdings (CERH)
GR 2 Sub B.V., and CHL. CHL will be the legal title holder.

KEY RATING DRIVERS

Seasoned Loans

The portfolio will consist of 13-year seasoned loans originated by
CHL, of which 94.8% (by current balance). When setting the
originator adjustment for the portfolio Fitch took into account
factors including the historical performance of the Auburn 10
transaction and the short remaining term of the loans. This
resulted in an originator adjustment of 1.0x.

The OO loans (5.2% of the pool) contain a high proportion of
self-certified, interest-only and restructured loan arrangements as
well as 4.5% of the borrowers currently being in arrears by more
than 0.1 payments. Therefore Fitch applied its non-conforming
assumptions to this sub-pool.

Interest Deferrals

The class A, B and C notes have individual dedicated liquidity
reserves that mitigate the risk of interest deferrals. The class D
and E notes do not benefit from liquidity support and are expected
to be subject to interest deferrals until they become the most
senior notes. The ratings of the class D and E notes are therefore
constrained at 'BB+(EXP)sf'.

Low Margins, Favourable Affordability

Of the loans, 99.3% track the Bank of England base rate (BBR), the
weighted average (WA) margin of these loans is relatively low at
1.4%. This results in a relatively high interest coverage ratio
(ICR) of 129.7% for the BTL pool and a low debt to income ratio of
20.9% for the OO pool. This implies higher affordability for
borrowers and therefore lower foreclosure frequency assumptions.

Un-Hedged Basis Risk

As the notes pay daily compounded SONIA the transaction will be
exposed to basis risk between BBR and SONIA. Fitch stressed the
transaction cash flows for basis risk, in line with its criteria.
Combined with the low asset margins, this resulted in limited
excess spread in Fitch's cash flow analysis.

RATING SENSITIVITIES

Material increases in the frequency of defaults and loss severity
on defaulted receivables producing losses greater than Fitch's base
case expectations may result in negative rating action on the
notes. Fitch's analysis revealed that a 30% increase in the WA
foreclosure frequency, along with a 30% decrease in the WA recovery
rate, would imply a downgrade of the class A1 and A2 notes to
'AA-'sf from 'AAA'sf.



                           *********


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,
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