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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

          Wednesday, December 4, 2019, Vol. 20, No. 242

                           Headlines



G E R M A N Y

FRESHWORLD HOLDING: S&P Assigns 'B' Long-Term ICR, Outlook Stable
SAFARI BERTEILIGUNGS: Moody's Downgrades CFR to B3, Outlook Neg.


I R E L A N D

ALME LOAN II: Moody's Puts (P)Ba3 Rating to EUR20.6MM Cl. E-R Notes


L U X E M B O U R G

KIWI VFS I: Moody's Upgrades CFR to B1, Outlook Stable
OSTREGION INVESTMENTGESELLSCHAFT: Moody's Ups Sr. Sec. Bonds to B1


S P A I N

CAIXABANK PYMES 11: Moody's Rates EUR318.5MM Series B Notes Caa1


S W I T Z E R L A N D

ILIM TIMBER: Moody's Affirms B2 CFR, Alters Outlook to Negative
SCHMOLZ + BICKENBACH: Shareholders Back Capital Increase


U N I T E D   K I N G D O M

DE LA RUE: Crystal Amber Set to Almost Double Stake in Business
EDDIE STOBART: Former Boss Criticizes DBay-Led Rescue Deal
ELVET MORTGAGES 2019-1: S&P Puts Prelim. BB Rating on F-Dfrd Notes
FERGUSON MARINE: Formally Taken Into Public Ownership
IWH UK: Moody's Affirms B2 CFR; Alters Outlook to Negative

IWH UK: S&P Affirms 'B' Ratings, Outlook Neg.
MOTOR FUEL: S&P Affirms 'B' Issuer Credit Rating, Outlook Negative
SMALL BUSINESS 2019-3: Moody's Rates GBP26.3MM Cl. D Notes Ba3
TED BAKER: Overstates Value of Inventory by Up to GBP25 Million
THE MANOR: Administrators Put Hotel Up for Sale for GBP4.8MM

THG OPERATIONS: Moody's Assigns B1 CFR, Outlook Stable


X X X X X X X X

[*] EUROPE: EU Reaches Deal on Banks' New Bad Loan Recovery Rules

                           - - - - -


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G E R M A N Y
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FRESHWORLD HOLDING: S&P Assigns 'B' Long-Term ICR, Outlook Stable
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S&P Global Ratings assigned its 'B' long-term issuer credit rating
to Freshworld Holding III GmbH, the new parent company, and to
Freshworld Holding IV GmbH, its wholly owned subsidiary. S&P is
also assigning its 'B' issue rating and '3' recovery rating to the
term loan B and RCF.

Funds advised by Apax Partners have acquired a majority stake in
ADCO Group from its existing shareholders, who have retained a
24.9% stake. To finance the transaction, Freshworld Holding IV,
ADCO's new intermediate holding company, issued a EUR475 million
senior secured term loan B. The investors also made a significant
equity contribution, largely taking the form of preference shares
and shareholder loans, both of which S&P treats as equity and
exclude from its leverage and coverage calculations.

ADCO is the leading service provider in the German mobile
sanitation market, where its market share in toilet cabins is more
than 60%. It also benefits from leading positions in several other
European countries, such as Poland. The German market accounts for
about half of ADCO's revenues and its reported EBITDA, highlighting
its limited geographic diversification. The German market is a
mature market characterized by high awareness and high penetration
of mobile sanitary solutions. As a result, it has moderate growth
prospects, but its stability is supported by the strict regulatory
requirements imposed on construction and event site operators.

ADCO Group's rental-based business model requires sizable
investment outlays and we view product differentiation as limited.
Therefore, assuming a certain service level requirement is met,
most competition is based on price. That said, some end-markets,
such as premium events, attribute higher importance to quality. S&P
considers ADCO's cost position superior to that of local
competitors due to ADCO's large scale (for example, it has 147,000
cabins in Germany, compared with 3,000-7,000 for a regional player
in Germany), high route density, and broad geographic coverage.

These are important competitive factors because large customers
prefer to work with one provider across the whole country. In
addition, proximity to the deployment site reduces transportation
and servicing costs, thus providing economies of scale benefits
compared with smaller players. In addition, ADCO has in-house
product development and manufacturing capabilities. These drive
innovation and enhances ADCO's ability to adapt more rapidly to
changing customer preferences. ADCO manufactures around 80% of its
cabins in-house and services and retrofits all its own trucks, none
of which are sold to third parties to preserve the company's
competitive advantage.

Historically, ADCO has pursued an aggressive tuck-in acquisition
strategy, making over 50 acquisitions over the past two decades.
S&P expects the company to continue to make bolt-on acquisitions to
further expand market share, improve route density across Europe,
and continue to add complementary product and service offerings.

In S&P's view, one of the key risks the company faces is that more
than half of its business is tied to the cyclical construction
markets in Germany and its second key market, Poland (over 60% of
2018 revenues). Contracts tend to be project-based, short-term in
nature, and nonrecurring. However, during the last recession, when
construction actively significantly weakened, the company was able
to efficiently manage its cost base. By contrast, its closest rated
peer, U.S.-based mobile sanitary services provider USS, went
through a selective default on its term loan in 2010. As a result,
ADCO's revenues and margins declined only moderately during this
recession.

ADCO's mixed exposure to residential, nonresidential,
infrastructure new build, and renovation projects also helped
mitigate the downturn. Stringent EU regulation means that
construction and event sites have to provide a prescribed level of
sanitary services. Noncompliance carries the risk of fines and the
immediate closure of the construction site. Mobile sanitary
services generally take up only a small amount of the total
construction budget, which S&P views as favorable.

S&P said, "Our assessment of ADCO's financial policy is constrained
by its high leverage after the acquisition by Apax Partners funds.
We project adjusted debt to EBITDA of about 6.0x by the end of
2019. In addition, we view the financial policy of private-equity
owned companies as aggressive, since they often pursue
debt-financed acquisitions or shareholder distributions.

"Free operating cash flow (FOCF) has been negative in the past,
although we acknowledge that over the past few years the company
has invested heavily in its cabins, containers, and trucks. In our
view, the company has some flexibility to reduce capital
expenditure in a weaker economic environment, but doing so could
have a long-term impact on service quality and brand reputation.

"The additional debt servicing cost following the acquisition will
weigh on FOCF. Despite this, we expect that cost rationalization
and operating improvement initiatives will increase margins and
contribute to positive FOCF generation."

The stable outlook indicates that ADCO will likely maintain its
leading market position in the mobile sanitation industry. Total
revenue growth remains robust, at 3%-6%, based on continued demand
in the residential and nonresidential construction end markets,
positive traction in sales initiatives, and ongoing contributions
from bolt-on acquisitions. The adjusted EBITDA margin is forecast
to increase to 27%-28% as a result of cost savings. This will
enable positive, if low, FOCF generation.

S&P said, "We could lower the rating if ADCO underperforms our
forecasts and cannot implement cost efficiencies. We could also
downgrade the company if it experiences a significant drop in
EBITDA margins due to a loss of market share or weakening demand
from a struggling construction industry. This would result in
higher leverage and negative FOCF on a sustained basis.
Additionally, if the group undertook material debt-financed
acquisitions, or cash returns to shareholders, we could also lower
the rating.

"We see limited near-term upside potential for the rating due to
minimal FOCF and relatively high adjusted leverage. However, if the
group experienced stronger-than-expected EBITDA margin growth, such
that our adjusted leverage fell below 5.0x on a sustained basis,
combined with solid and stable positive FOCF, we could consider
raising the rating."

SAFARI BERTEILIGUNGS: Moody's Downgrades CFR to B3, Outlook Neg.
----------------------------------------------------------------
Moody's Investors Service downgraded Safari Beteiligungs GmbH's
corporate family rating to B3 from B2. Concurrently, Moody's has
downgraded Lowen Play's probability of default rating to B3-PD from
B2-PD and the EUR350 million senior secured notes due 2022, issued
by Safari Verwaltungs GmbH, to B3 from B2. The outlook on both
entities has been changed to negative from stable.

"Today's rating action reflects our expectation that Lowen Play's
credit metrics and ability to generate cash will continue to
deteriorate in the next few years beyond our initial assumptions"
says Florent Egonneau, Assistant Vice President and lead analyst
for Lowen Play. We expect that Moody's adjusted EBITDA is likely to
halve by 2022 from a peak of EUR152 million in Q3 2018 on account
of the amended Gaming Ordinance that has lowered the profitability
of machines and the Interstate Treaty that will downsize the arcade
network. We expect this lower EBITDA, in the absence of any
offsetting measures by the company, could increase the company's
leverage materially beyond 5.0x on a sustainable basis." Added Mr
Egonneau.

RATINGS RATIONALE

Lowen Play's operating performance and cash flow generation
materially deteriorated in 2019, driving an increase in Moody's
adjusted leverage to 4.5x in Q2 2019 from 3.2x in Q3 2018. This is
due to the impact that the amended Gaming Ordinance has had on the
gaming machines' appeal to players and therefore the weaker
profitability generated by these machines. In the first six months
of 2019, gross gaming revenue per machine per day
("GGR/machine/day") declined year-on-year by around EUR20, or 18%,
to EUR93, which led to a 30% fall year-on-year in reported EBITDA
to EUR43 million from EUR61 million in the first semester of 2018.
In contrast with past regulations, the company has so far been
unable to mitigate the negative effect from this change in
regulation through the implementation of counter measures. Moody's
understands that the company intends to offset the decline in
profitability with, for example, the introduction of online gaming
not only in Germany and the Netherlands but also in Spain. However,
this will take time and in the absence of an improvement in its
existing land-based business, Moody's expects leverage to reach
5.0x in December 2019 and to exceed this level by mid-2021.

Furthermore, German arcade operators have a transition period in
which to comply with the unlocking card provision, one of the three
main drivers that have caused the lower profitability of Lowen
Play's AWPs. At the moment, the company operates around half of its
machines using this feature and management has commented that these
machines "continue to perform significantly weaker" than the other
half of AWPs. Full compliance with this provision from February
2021 onwards underpins its medium-term assumption in EBITDA.

Under the current Interstate Treaty due to expire at the end of
June 2021, only 51% of Lowen Play's AWPs are currently eligible for
a license and/or have received hardship exemptions for operations
beyond June 2021. This eligibility is subject to unknown regulation
under the new Interstate Treaty. This is an evolving situation and
there is still uncertainty if the regulators and local authorities
will fully enforce the current minimum distance requirements and
multi-concession ban, or not.

The lower number of AWPs combined with the decline in the
profitability of machines will meaningfully impact Lowen Play's
ability to generate free cash flow. Moody's estimates that Lowen
Play will generate less than EUR5 million free cash flow before
expansion capex in 2022. However, Moody's expects that the company
will need to invest in the expansion of its operations to rebuild a
fully compliant network in order to mitigate the effects of
recently imposed regulation.

Finally, Lowen Play will have to refinance the bonds falling due
November 2022 and the timing of new regulation will play an
important role in the company's ability to access capital markets.
If uncertainty continues, or there is no relaxing of minimum
distance requirements and multi-concession ban from the regulators
and local authorities, it could severely hinder Lowen Play's
refinancing plan.

Lowen Play's ratings remain supported by: (1) its leading market
position as the second largest arcade operator, behind Novomatic,
in the fragmented German gaming market with 426 arcade sites
located in Germany's more affluent states; (2) the asset-light
business model allowing for a relative cost flexibility in case of
negative credit events.

LIQUIDITY

Moody's considers Lowen Play's liquidity to be adequate in the next
12-18 months and supported by: (1) no meaningful debt amortizations
until November 2022; (2) cash on balance sheet of EUR68 million as
of June 2019, of which EUR13 million needed for the operation of
gaming machines; and (3) a EUR40 million undrawn RCF as of June
2019. Under the loan documentation, the super senior RCF is subject
to a springing maximum leverage covenant, set at 4.67x, to be
tested when the RCF is drawn by more than 40%. Moody's expects that
the company will maintain sufficient headroom under this covenant
if it is tested in the next 12-18 months.

STRUCTURAL CONSIDERATIONS

Lowen Play's PDR is in line with the CFR, reflecting its assumption
of a 50% family recovery rate as is customary for a capital
structure comprising of bonds and bank debt. The B3 rating on the
2022 senior secured notes is also in line with the CFR. These are
secured by pledges over shares and receivables and guaranteed
operating subsidiaries. The notes rank pari passu with the super
senior RCF because they share substantially similar security and
guarantees, though they are subordinated upon enforcement under the
provisions of the intercreditor agreement. Moody's also notes the
presence of a EUR168 million shareholder loan, which is treated as
equity.

OUTLOOK RATIONALE

The negative outlook reflects the uncertainty around the severity
of future regulation and Lowen Play's arcade network size in the
next few years. It also reflects uncertainty with regards to the
measures and strategies that the company may implement in order to
mitigate the financial effects of more severe regulation. Moody's
expects that the company's leverage, as measured by Moody's
adjusted debt/EBITDA, will remain sustainably above 5.0x in the
next 18-24 months and deteriorate towards 6.0x in 2021. There is a
risk that leverage could deteriorate beyond these levels should
regulators and local authorities take a more severe stance on
gaming arcade operating conditions than Moody's has assumed.

WHAT COULD CHANGE THE RATING UP/DOWN

Positive rating pressure is unlikely in the short term but could
arise if:

  - The company is able to better mitigate the unfavorable changes
in regulation than expected;

  - Moody's-adjusted debt/EBITDA remains sustainably below 5.0x;

  - Moody's-adjusted FCF/debt returns to being sustainably above
5%.

Negative rating pressure could arise if:

  - The adverse effects of regulation is more severe than its
current forecasts including Moody's adjusted gross leverage
increase sustainably above 6.0x and Moody's adjusted free cash flow
turns negative;

  - Liquidity becomes a concern, including if Lowen Play looks like
it may be challenged to access capital markets and refinance debt
falling due in 2022.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Gaming Industry
published in December 2017.

COMPANY PROFILE

Lowen Play is the second largest gaming arcade operator in Germany,
a highly fragmented market, with 426 gaming arcades providing for
8,641 gaming machines known as amusement machines with prizes. The
company has also 8 gaming arcades (c. 900 AWPs) in the Netherlands,
and an online gaming platform in Schleswig-Holstein, the only
federal state in Germany which allows online gaming. For the last
twelve months ended June 2019, Lowen Play reported revenues of
EUR288 million and EBITDA (excluding IFRS 16) of EUR92 million.



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ALME LOAN II: Moody's Puts (P)Ba3 Rating to EUR20.6MM Cl. E-R Notes
-------------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to the notes to be issued by ALME
Loan Funding II D.A.C.:

EUR234,800,000 Class A-R Senior Secured Floating Rate Notes due
2031, Assigned (P)Aaa (sf)

EUR23,800,000 Class B-1-R Senior Secured Floating Rate Notes due
2031, Assigned (P)Aa2 (sf)

EUR14,100,000 Class B-2-R Senior Secured Fixed Rate Notes due 2031,
Assigned (P)Aa2 (sf)

EUR24,400,000 Class C-R Senior Secured Deferrable Floating Rate
Notes 2031, Assigned (P)A2 (sf)

EU23,600,000 Class D-R Senior Secured Deferrable Floating Rate
Notes due 2031, Assigned (P)Baa3 (sf)

EUR20,600,000 Class E-R Senior Secured Deferrable Floating Rate
Notes due 2031, Assigned (P)Ba3 (sf)

Moody's issues provisional ratings in advance of the final sale of
financial instruments, but these ratings only represent Moody's
preliminary credit opinions. Upon a conclusive review of a
transaction and associated documentation, Moody's will endeavour to
assign definitive ratings. A definitive rating (if any) may differ
from a provisional rating.

RATINGS RATIONALE

The rationale for the rating is based on a consideration of the
risks associated with the CLO's portfolio and structure as
described in its methodology.

The Issuer will issue the Class A-R Notes, the Class B-1-R Notes,
the Class B-2-R Notes, the Class C-R Notes, the Class D-R Notes and
the Class E-R Notes in connection with the re-issuance of the
following classes of notes: the Class A-R Notes, the Class B-R
Notes, the Class C-R Notes, the Class D-R Notes, and the Class E-R
Notes, due 2030 previously refinanced on December 20, 2016.

In addition, on July 9, 2014, the Issuer issued EUR 37 million of
participating term certificates and on December 20, 2016 the Issuer
also issued EUR 8 million of additional participating term
certificates. The EUR 45 million of participating term certificates
are not refinanced and will remain outstanding following the
refinancing date.

The Issuer is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured obligations and up to 10%
of the portfolio may consist of senior unsecured obligations,
second-lien loans, mezzanine obligations and high yield bonds. The
portfolio is fully ramped up as of the refinancing date and
comprises predominantly corporate loans to obligors domiciled in
Western Europe.

Apollo Management International LLP will manage the CLO. Apollo
will direct the selection, acquisition and disposition of
collateral on behalf of the Issuer and may engage in trading
activity, including discretionary trading, during the transaction's
1-year reinvestment period. Thereafter, subject to certain
restrictions, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
risk obligations.

The transaction incorporates interest and par coverage tests which,
if triggered, divert interest and principal proceeds to pay down
the notes in order of seniority.

Methodology underlying the rating action:

The principal methodology used in these ratings was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
March 2019.

Factors that would lead to an upgrade or downgrade of the ratings:

The rated notes' performance is subject to uncertainty. The notes'
performance is sensitive to the performance of the underlying
portfolio, which in turn depends on economic and credit conditions
that may change. The collateral manager's investment decisions and
management of the transaction will also affect the notes'
performance.

Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3 of
the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in March 2019.

Moody's used the following base-case modeling assumptions:

Par Amount(1): EUR 374,062,500.00

Defaulted Asset: EUR 0.00

Diversity Score(2): 45

Weighted Average Rating Factor (WARF): 3100

Weighted Average Spread (WAS): 3.40%

Weighted Average Coupon (WAC): 5.00%

Weighted Average Recovery Rate (WARR): 46.00%

Weighted Average Life (WAL): 5.8 years

(1) The covenanted Target Par Amount is EUR 375,000,000.00,
however Moody's has assumed a Target Par Amount of EUR
374,062,500.00 due to the potential inclusion of unhedged assets
into this transaction.

(2) The covenanted base case Diversity Score is 46, however
Moody's has assumed a diversity score of 45 as the transaction
documentation allows for the diversity score to be rounded up to
the nearest whole number whereas usual convention is to round down
to the nearest whole number.

Moody's has addressed the potential exposure to obligors domiciled
in countries with local currency ceiling (LCC) of A1 or below. As
per the portfolio constraints and eligibility criteria, exposures
to countries with LCC of A1 to A3 cannot exceed 10% and obligors
cannot be domiciled in countries with LCC below A3.



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L U X E M B O U R G
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KIWI VFS I: Moody's Upgrades CFR to B1, Outlook Stable
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Moody's Investors Service upgraded Kiwi VFS SUB I S.a r.l.'s
corporate family rating to B1 from B2 and the probability of
default rating to B1-PD from B2-PD. Concurrently, Moody's has also
upgraded the ratings to B1 from B2 for the USD39 million senior
secured revolving credit facility due 2023, for the USD51 million
guaranteed senior secured RCF due 2023, for the GBP341 million
senior secured term loan B1 due 2024, and for the EUR363 million
senior secured term loan B2 due 2024. All the facilities are
borrowed by Kiwi VFS SUB II S.a r.l. and guaranteed by Kiwi VFS SUB
I S.a r.l. The outlook is stable.

RATINGS RATIONALE

The upgrade was prompted by the company's improved credit metrics
in line with Moody's stated upgrade triggers as it delivers on its
growth strategy through consolidation of the 2017/2018
acquisitions, plus strong organic growth from new contracts, higher
visa application volumes, and value-added services. Moody's
adjusted leverage decreased to 4.3x in LTM September 2019 from 5.1x
in PF2018, and retained cash flow (RCF)/net debt increased to 11.7%
from 7.2% in the same period. The company's double-digit organic
growth is expected to continue well into the forecast period
resulting in further deleveraging.

VFS' rating is supported by (1) the company's leading position with
a 54% share in the growing visa application services outsourcing
market; (2) the company's deleveraging profile as described; (3)
the company's broad and diversified geographic presence in 147
countries which provides for a degree of competitive advantage
because government and missions are seeking global contracts; (4)
favourable industry fundamentals for (airline passenger) outbound
travel as well as visa outsourcing trends supporting volume growth;
and (5) positive free cash flow generation driven partly by
structurally negative working capital.

The B1 CFR is constrained by (1) the company's high customer
concentration; (2) the short-term volatility in the demand for visa
applications due to currency movements and macro-economic
conditions but also to medium-term threats such as visa
digitisation trends (although the company has to date benefitted
from its market-leading e-visa solution); (3) the high fixed costs
which could increase leverage in a downturn; (4) its exposure to
foreign-exchange movements owing to the mismatch between the
reporting currency (e.g. CHF) and the main operating currencies
(e.g. GBP, USD and Euro) albeit adequately managed at a
transactional level, and; (5) the risks of dividend payment,
recapitalization and/or material debt funded acquisition.

ESG CONSIDERATIONS

The governance risks Moody's considers in the company's credit
profile include a moderately aggressive financial policy
characterized by debt-financed acquisitions and private-equity
ownership.

LIQUIDITY

Moody's considers VFS's liquidity position to be good for its
near-term needs. This is supported by (1) cash on balance sheet of
CHF120 million; (2) the full availability under its USD39 million
RCF; (3) continued positive cash flow generation despite capital
expenditures of approximately CHF50 million per annum and deferred
consideration outflows; and (4) no debt amortisation until 2024.
The RCF has one springing financial covenant (total net leverage
ratio), set with large headroom at 8.85x, to be tested on a
quarterly basis when drawn more than 35%.

STRUCTURAL CONSIDERATIONS

Using Moody's Loss Given Default for Speculative-Grade Companies
methodology, the B1-PD Probability of Default Rating (PDR) is in
line with the CFR. This is based on a 50% recovery rate, as is
typical for transactions including only 1st lien bank debt with no
financial maintenance covenants. The term loans, the RCF, and
guarantee facility all rank pari-passu and are rated in line with
the CFR. All debt facilities are secured by pledges over shares,
bank accounts and receivables, and guaranteed by material
subsidiaries representing at least 80% of the consolidated EBITDA
and gross assets.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects Moody's view that VFS will continue to
steadily grow organically and delever further. The stable outlook
also assumes that the company will be able to renew all existing
contracts upon expiry, and will not embark on any material
debt-financed acquisitions or shareholder distributions.

WHAT COULD CHANGE THE RATING UP/DOWN

Upward pressure on the ratings could materialise if VFS continues
to improve its scale and overall business profile and deliver
strong organic growth while maintaining its profit margins and
positive free cash flow generation. The ratings could be upgraded
if Moody's-adjusted debt/EBITDA falls below 3.5x, with Retained
Cash flow/Net Debt maintained above 20% on a sustained basis. No
expectation of a potential re-leveraging through a dividend
recapitalization or material debt funded acquisition would likely
be a requirement of any upgrade.

Conversely, downward ratings pressure would occur if the company
performance weakens as a result of a significant deterioration of
the trading environment, the loss of a material VFS customer, a
more aggressive financial policy, or weakening liquidity.
Quantitatively, a downgrade could be considered if the
Moody's-adjusted debt/EBITDA ratio increases sustainably towards
5.0x.

LIST OF AFFECTED RATINGS

Upgrades:

Issuer: Kiwi VFS SUB I S.a r.l.

LT Corporate Family Rating, Upgraded to B1 from B2

Probability of Default Rating, Upgraded to B1-PD from B2-PD

Issuer: Kiwi VFS SUB II S.a r.l.

Backed Senior Secured Bank Credit Facility, Upgraded to B1 from B2

Outlook Actions:

Issuer: Kiwi VFS SUB I S.a r.l.

Outlook, Changed To Stable From Positive

Issuer: Kiwi VFS SUB II S.a r.l.

Outlook, Changed To Stable From Positive

METHODOLOGY

The principal methodology used in these ratings was Business and
Consumer Service Industry published in October 2016.

PROFILE

Established in 2001, VFS Global is the world's largest outsourcing
specialist for governments and diplomatic missions worldwide. The
company is primarily engaged in the processing of visa and passport
applications, and as of December 2018, operates in 147 countries
through 2,997 application centres, serving 62 client governments.
VSF employs over 9,500 people and handled approximately 25.3
million of applications in 2018.

OSTREGION INVESTMENTGESELLSCHAFT: Moody's Ups Sr. Sec. Bonds to B1
------------------------------------------------------------------
Moody's Investors Service upgraded the ratings of the EUR425
million senior secured bonds and the EUR350 million senior secured
European Investment Bank loan raised by Ostregion
Investmentgesellschaft Nr.1 S.A. to B1 from B3. The outlook remains
stable.

In 2007, Bonaventura StraBenerrichtungs-GmbH entered into a 32 year
concession agreement with the local traffic authority
Autobahnen-Und Schnellstraßen-Finanzierungs-AG (Aa1 stable) to
plan, develop, construct and operate a concession route comprising
four motorway sections with a total length of 52 kilometers (km) to
the north of Vienna, Austria. To finance the construction works,
the Issuer entered into the EIB Loan and issued the Bonds and then
on-lent the proceeds to ProjectCo. Construction was completed in
January 2010.

RATINGS RATIONALE

The ratings upgrade is driven by an improvement in the project's
financial metrics supported by shadow toll revenues that have been
consistently outperforming the updated (2011) base-case scenario
and Moody's expectation that this positive traffic trend will
continue in future.

More specifically, the rating action reflects the improvement in
the project's shadow toll revenues driven by the sustained positive
performance of heavy vehicle traffic (HVs). In particular, HVs
traffic increased, on average, by 5% in the period 2016-18, which
in line with the project's banding mechanism, resulted in higher
shadow toll revenues payable to the Issuer under the concession
agreement with Asfinag.

Whilst actual traffic volumes on the concession continue to be
below original base-case projections (2005), traffic performance
has exhibited a consistently improving trend in recent years, with
total (light and heavy) traffic being around 15% above the updated
2011 base-case traffic scenario at the end of October 2019. Moody's
believes the project will continue to outperform the 2011 traffic
projections, on the back of the strong local macroeconomic
environment and the opening of various network extensions adjacent
to the project road.

This is further evidenced by the agency's expectations of a
projected average annual debt service coverage ratio (ADSCR) above
1.10x, underpinned by the relatively steady project operating costs
and a forecast that light vehicle traffic will achieve the Band 3
threshold in the mid-2020s, thus resulting in additional shadow
toll revenues and increased resilience in case of potential traffic
downsides.

The B1 ratings continue to reflect (1) the Project's exposure to
weak shadow toll revenues compared to financial close; (2)
ProjectCo's high leverage, with relatively low ADSCR, and an
expectation that this ratio will at times breach the 1.05x default
level; and (3) that the substantial mark to market (currently
EUR297 million) on ProjectCo's super senior interest rate swap may
limit recovery for senior creditors.

The ratings also reflects (1) the long-term concession agreement
that ProjectCo has entered into with the highly rated Asfinag to
plan, develop, construct and operate the concession route and (2)
the fact that approximately 65% of ProjectCo's revenues are derived
from availability-based payments, which are not exposed to traffic
risk.

The Bonds and the EIB Loan benefit from financial guarantees of
scheduled principal and interest under insurance policies that
Ambac Assurance UK Ltd (Ambac UK, unrated) issued. As Moody's does
not maintain a rating on Ambac UK, ProjectCo's ratings do not
factor in any benefit from the guarantees.

As the project is in lockup and no payments to mezzanine
debtholders or distributions to shareholders are expected until
around 2031, ProjectCo is expected to continue to build up a
sizeable cash balance (operating cash account totalled EUR19.2
million as of June 2019), which would provide additional liquidity
to support senior debt service, should this be required.

The outlook on the rating is stable, reflecting its expectation
that (1) actual traffic volumes and shadow toll revenues will
continue to outperform the 2011 traffic projections; (2)
ProjectCo's ADSCR will continue to strengthen, remaining broadly
above the 1.05x default level over the life of the concession; (3)
the controlling creditors (EIB and Ambac) will continue to waive
any possible defaults and will not take any action that could
result in the termination of the concession agreement.

WHAT COULD CHANGE THE RATING UP/DOWN

Upward rating pressure may arise if (1) shadow toll revenues were
to materially improve so that the project's forecast minimum ADSCR
will be sustainably above 1.05x over the life of the concession or
(2) debt service costs revert to base-case levels.

Conversely, Moody's could downgrade the ratings if (1) the Issuer
exhibits a weak liquidity profile, such that it needs to draw from
its reserves or (2) shadow toll revenues are weaker than the
updated projections, or costs are higher, leading to actual and
projected ADSCRs close to 1.00x on a continuous basis.

LIST OF AFFECTED RATINGS

Issuer: Ostregion Investmentgesellschaft Nr.1 S.A.

Upgrades:

Underlying Senior Secured Regular Bond/Debenture, Upgraded to B1
from B3

Underlying Senior Secured Bank Credit Facility, Upgraded to B1 from
B3

Backed Senior Secured Regular Bond/Debenture, Upgraded to B1 from
B3

Backed Senior Secured Bank Credit Facility, Upgraded to B1 from B3

Outlook Actions:

Outlook, Remains Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Privately
Managed Toll Roads published in October 2017.



=========
S P A I N
=========

CAIXABANK PYMES 11: Moody's Rates EUR318.5MM Series B Notes Caa1
----------------------------------------------------------------
Moody's Investors Service assigned the following definitive ratings
to the debts issued by CAIXABANK PYMES 11, FONDO DE TITULIZACION:

EUR2,131.5M Series A Notes due April 2052, Definitive Rating
Assigned Aa2 (sf)

EUR318.5M Series B Notes due April 2052, Definitive Rating Assigned
Caa1 (sf)

The transaction is a static cash securitisation of loans and
draw-downs under credit lines granted by CaixaBank, S.A. (Long Term
Deposit Rating: A3 /Short Term Deposit Rating: P-2, Long Term
Counterparty Risk Assessment: A3(cr) /Short Term Counterparty Risk
Assessment: P-2(cr)) to mainly small and medium-sized enterprises
(SMEs) and self-employed individuals located in Spain.

RATINGS RATIONALE

The ratings of the Notes are primarily based on the analysis of the
credit quality of the underlying portfolio, the structural
integrity of the transaction, the roles of external counterparties
and the protection provided by credit enhancement.

In Moody's view, the strong credit positive features of this deal
include, among others: (i) performance of CaixaBank originated
transactions have been better than the average observed in the
Spanish market; (ii) granular and diversified pool across industry
sectors; (iii) around 9% of the debtors are corporate; (iv)
refinanced and restructured assets have been excluded from the pool
and (v) 13% subordination under Series A Notes. However, the
transaction also presents challenging features, such as: (i)
significant exposure to the construction and building sector at
around 22% of the pool volume, which includes a 11.5% exposure to
real estate developers, in terms of Moody's industry
classification; (ii) strong linkage to CaixaBank as it holds
several roles in the transaction (originator, servicer and accounts
bank) and (iii) no interest rate hedge mechanism being in place.

  - Key collateral assumptions:

Mean default rate: Moody's assumed a mean default rate of 9.5% over
a weighted average life of 3.8 years (equivalent to a Ba3 proxy
rating as per Moody's Idealized Default Rates). This assumption is
based on: (1) the available historical vintage data, (2) the
performance of the previous transactions originated by CaixaBank
and (3) the characteristics of the loan-by-loan portfolio
information. Moody's also took into account the current economic
environment and its potential impact on the portfolio's future
performance, as well as industry outlooks or past observed
cyclicality of sector-specific delinquency and default rates.

Default rate volatility: Moody's assumed a coefficient of variation
(i.e. the ratio of standard deviation over the mean default rate)
of 47.6%, as a result of the analysis of the portfolio
concentrations in terms of single obligors and industry sectors.

Recovery rate: Moody's assumed a stochastic recovery rate with a
42% mean, primarily based on the characteristics of the
collateral-specific loan-by-loan portfolio information,
complemented by the available historical vintage data.

Portfolio credit enhancement: the aforementioned assumptions
correspond to a portfolio credit enhancement of 20%, that take into
account the current local currency country risk ceiling (LCC) for
Spain of Aa1.

As of October 2019, the audited provisional portfolio was composed
of 36,146 contracts amounting to EUR 2,533 million. The top
industry sector in the pool, in terms of Moody's industry
classification, is the Construction and Building sector (22.4%).
The top borrower group represents 0.63% of the portfolio and the
effective number of obligors is over 1,000. The assets were
originated mainly between 2018 and 2019 and have a weighted average
seasoning of 1.18 years and a weighted average remaining term of
6.75 years. The interest rate is floating for 55.67% of the pool
while the remaining part of the pool bears a fixed interest rate.
The weighted average interest rate of the pool is 1.96%.
Geographically, the pool is concentrated mostly in the regions of
Catalonia (27%) and Madrid (12%). At closing, assets in arrears up
to 30 days will not exceed 5% of the pool balance, while assets in
arrears between 30 and 90 days will be limited to up to 1% of the
pool balance and assets in arrears for more than 90 days will be
excluded from the final pool.

Around 23% of the portfolio is secured by mortgages over different
types of properties.

  - Key transaction structure features:

Reserve fund: The transaction benefits from a EUR 115.15 million
reserve fund, equivalent to 4.70% of the balance of the Series A
and Series B Notes at closing. The reserve fund provides both
credit and liquidity protection to the Notes.

  - Counterparty risk analysis:

CaixaBank will act as servicer of the loans for the Issuer, while
CaixaBank Titulizacion S.G.F.T., S.A.U. (NR) will be the management
company (Gestora) of the transaction.

All of the payments under the assets in the securitised pool are
paid into the collection account at CaixaBank. There is a daily
sweep of the funds held in the collection account into the Issuer
account. The Issuer account is held at CaixaBank with a transfer
requirement if the rating of the account bank falls below Ba2.

  - Principal Methodology:

The principal methodology used in these ratings was "Moody's Global
Approach to Rating SME Balance Sheet Securitizations" published in
July 2019.

  - Factors that would lead to an upgrade or downgrade of the
ratings:

The Notes' ratings are sensitive to the performance of the
underlying portfolio, which in turn depends on economic and credit
conditions that may change. The evolution of the associated
counterparties risk, the level of credit enhancement and Spain's
country risk could also impact the Notes' ratings.



=====================
S W I T Z E R L A N D
=====================

ILIM TIMBER: Moody's Affirms B2 CFR, Alters Outlook to Negative
---------------------------------------------------------------
Moody's Investors Service changed Ilim Timber Continental S.A.'s
outlook to negative from positive. At the same time, Moody's
affirmed the B2 corporate family rating and the B2-PD probability
of default rating.

RATINGS RATIONALE

The rating action reflects Moody's expectation that Ilim Timber's
operating performance and credit metrics will deteriorate in 2019
amid the cyclical downturn in the global timber industry. Although
the market conditions are likely to stabilise or improve slightly
over the next 12 months, which should support the company's credit
quality, its rating will be weakly positioned in the B2 category,
with no room for further deterioration in its credit metrics or
liquidity beyond Moody's expectation.

Subdued demand growth for new houses in the US, sluggish economic
growth in Europe amid the Brexit uncertainty, and cautious business
sentiment in China caused by the trade tensions with the US
resulted in a drop in timber prices in key regions in 2019.
Therefore, the company's revenue is likely to decrease to EUR530
million in 2019 from EUR566 million in 2018, and EBITDA is to
decline almost by half to EUR37 million-EUR39 million in 2019 from
a record high of EUR72 million a year earlier. First signs of
improvement in the timber industry in the second half of 2019
suggest more benign market conditions in 2020, which should support
the company's earnings.

Moody's expects Ilim Timber's leverage, measured as
Moody's-adjusted debt/EBITDA, to increase above 5.0x in 2019 from
2.9x in 2018 due to the fall in EBITDA, before improving to below
4.5x in 2020, thanks to some rebound in profits and the continuing
debt reduction. The company decreased its debt to EUR209 million as
of June 30, 2019 from EUR287 million as of year-end 2017. Ilim
Timber's positive free cash flow, supported by moderate working
capital needs and low maintenance capital spending, should be
sufficient to cover its debt maturities of EUR24 million in 2020
and EUR21million a year in 2021-22, before a balloon repayment of
around EUR140 million in 2023.

However, if the difficult market conditions continue for longer or
the company's operating performance deteriorates for its own
reasons, its credit metrics may remain outside the ranges
commensurate with the B2 category for a longer period, which would
exert a downward pressure on its rating. In addition, weaker credit
metrics, than Moody's currently expects, would translate into a
breach of financial covenants under Ilim Timber's syndicated loan.

Ilim Timber's credit quality factors in (1) the company's
geographic diversification of assets, with two mills in Germany and
the other two in Eastern Siberia, Russia; (2) the proximity of the
company's production assets to reliable and accessible raw material
supply and an established distribution infrastructure; (3) a
diversified customer base; (4) the well-invested modern saw mills
in Germany that require low-maintenance capital spending; (5) the
improving financial discipline and focus on debt reduction; and (6)
the company's healthy liquidity, although financial covenant
compliance will be tight through 2020.

The rating also takes into account (1) Ilim Timber's low product
portfolio diversification because around 74% of the company's sales
are represented by sawn timber, a market characterised by
seasonality and volatility in terms of volumes and prices; (2) its
fairly small size on a global scale, reflected in its revenue of
EUR543 million for the 12 months ended June 30, 2019; (3) somewhat
volatile spreads between cost of logs and sawn timber prices,
resulting in volatile profitability; and (4) its partial exposure
to an emerging market's (Russia) operating environment.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONSIDERATIONS

Ilim Timber's rating incorporates corporate governance
considerations, in particular its highly concentrated ownership,
which creates the risk of rapid changes in the company's strategy
and development plans, revisions in its financial policy and an
increase in shareholder payouts or related-party transactions that
could be detrimental to the company's credit strength. This risk is
partially mitigated by covenants and dividend payment rules under
the syndicated debt facility signed in November 2018. Ilim Timber's
track record over the last three years also demonstrates adherence
to prudent financial policies and consistent strategy.

RATIONALE FOR THE NEGATIVE OUTLOOK

The negative outlook reflects Ilim Timber's weak positioning within
the B2 rating category given the deterioration in its credit
metrics on the back of weak market conditions, as well as
uncertainty over the pace and timing of credit metrics' recovery
during the next 12-18 months. The outlook on the rating also
incorporates the risk of covenants' breaches during this period.

WHAT COULD CHANGE THE RATING UP / DOWN

Given the negative rating outlook, an upgrade of Ilim Timber's
rating is unlikely over the next 12-18 months. Moody's could change
the outlook to stable if the company was to reduce its
Moody's-adjusted debt/EBITDA below 4.5x on a sustainable basis,
market conditions were to stabilise and start to improve, and the
risk of covenants breaches subsides.

Moody's could upgrade the rating if the company was to (1) improve
its Moody's-adjusted debt/EBITDA below 3.75x and EBITDA interest
coverage above 3.5x on a sustainable basis, (2) maintain strong
liquidity, and (3) pursue a conservative financial policy and
generate positive post-dividend FCF on a sustainable basis.

Moody's could downgrade Ilim Timber's rating if its (1)
Moody's-adjusted debt/EBITDA was to rise above 4.5x on a sustained
basis; (2) operating performance, cash generation or market
position were to weaken materially; or (3) liquidity was to
deteriorate.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Paper and
Forest Products Industry published in October 2018.

Switzerland-domiciled Ilim Timber is one of the largest softwood
sawn timber producers in Europe. The company operates two
facilities in Germany and two in Russia, with a total annual
production capacity of 2.6 million cubic meters of sawn timber and
0.2 million cubic meters of plywood. For the 12 months ended June
30, 2019, Ilim Timber reported a revenue of EUR543 million, of
which 74% was derived from sawn timber, 15% from by-products and
11% from plywood segment, and Moody's-adjusted EBITDA of EUR58
million. The company generates 68% of its revenue from operations
in Germany and 32% from its mills in Russia. Ilim Timber is
controlled by the Russian businessmen, Boris and Mikhail
Zingarevich.

SCHMOLZ + BICKENBACH: Shareholders Back Capital Increase
--------------------------------------------------------
Leonard Kehnscherper and Fabian Graber at Bloomberg News report
that Schmolz + Bickenbach AG's shareholders voted in favor of a
capital increase to keep the company afloat after the two largest
investors ended weeks of feuding over the proposal.

According to Bloomberg, almost 80% of shareholders attending an
extraordinary meeting near the Swiss city of Lucerne approved the
share sale plan of at least CHF325 million (US$326 million),
removing a key hurdle towards rescuing the company from
insolvency.

Liwet, an investment holding company linked to Russian billionaire
Viktor Vekselberg, will own as much as 25% of the Swiss steelmaker
after the capital increase, while Martin Haefner--currently the
company's second largest shareholder--will increase his stake to up
to 37.5%, they said at the meeting, Bloomberg relates.

The plan still needs to win the approval of regulators, Bloomberg
notes.

Last week, the Swiss Takeover Board said it wouldn't waive the need
for a mandatory offer on all of the company's shares as requested
by Mr. Haefner, Bloomberg recounts.

The company appealed to Finma, a separate regulator, and a final
decision will be made by Dec. 9, Bloomberg discloses.

According to Bloomberg, industry lobby group Swissmem warned that
the ruling has increased chances the company will go bankrupt, and
the risk of jeopardizing 800 jobs in Switzerland and about 10,000
globally.

Schmolz's shares and bond prices fell this year amid weakening
demand from carmakers, Bloomberg relays.  Schmolz's Chairman Jens
Alder told investors at the meeting the company will be in
"critical" condition and in need of a tough restructuring even if
the capital increase goes through, Bloomberg notes.

According to Bloomberg, a so-called change of control clause in the
company's EUR350 million (US$388 million) of bonds would be
triggered if Mr. Haefner succeeded in raising his stake to more
than 33.3%, allowing bondholders to redeem their principal from the
company.

Mr. Haefner, as cited by Bloomberg, said at the meeting he would
offer bridge financing to the company in case of early bond
repayment.




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

DE LA RUE: Crystal Amber Set to Almost Double Stake in Business
---------------------------------------------------------------
Daniel Thomas and Cat Rutter Pooley at The Financial Times report
that activist investor Crystal Amber is set to almost double its
stake in De La Rue just days after the struggling British banknote
maker warned that there was "significant doubt" over its future.

UK-based Crystal Amber quietly has amassed a stake of nearly 14% in
De La Rue, according to a person familiar with the situation, a
sharp increase from its previously disclosed position at 7% of the
company's stock, the FT relates.

In what will be taken as a sign of confidence in the group, the
move will put Crystal Amber alongside US investment group Brandes
as the biggest shareholder in the company, the FT states.

Shares in De La Rue, which prints British banknotes, crashed to an
all-time low of GBP1.33 last week after the company warned that
there was "material uncertainty" over its future as it swung to a
GBP12 million loss, the FT recounts.

After losing the contract to print the UK's post-Brexit passports
last year, the company warned on profits twice this year before
last week's announcement, the FT relays.  Falling earnings and
rising debt have stretched the company's balance sheet, the FT
says.  That has left it close to the limits allowed under its loan
facilities, which, if breached, could force the company to repay
the debt, the FT notes.

Crystal Amber has held discussions with the company's new
management over the past week, according to the person, who said
that the team so far had been met with approval for a "common
sense" approach to fixing the problems facing the company, the FT
discloses.


EDDIE STOBART: Former Boss Criticizes DBay-Led Rescue Deal
----------------------------------------------------------
Oliver Gill at The Telegraph reports that former Eddie Stobart boss
Andrew Tinkler has launched a stinging attack on the troubled
trucking company's biggest investor, calling it a "hypocrite" and
blaming it for a strategy that has taken the firm to the brink.

Mr. Tinkler hit out at a rescue deal led by Isle of Man-based
investor DBay Advisors, backed by Eddie Stobart's board, which is
due to be put to a shareholder vote on Friday, Dec. 6, The
Telegraph relates.

Late last week, the company warned it would run out of cash if
investors snubbed the DBay approach, The Telegraph recounts.
Shares have been suspended since August, when the firm uncovered a
major error in its accounts, The Telegraph notes.

Mr. Tinkler has lodged a rival offer though investment vehicle TVFB
and provided further details on Dec. 2, The Telegraph discloses.



ELVET MORTGAGES 2019-1: S&P Puts Prelim. BB Rating on F-Dfrd Notes
------------------------------------------------------------------
S&P Global Ratings assigned preliminary credit ratings to Elvet
Mortgages 2019-1 PLC's class A, B-Dfrd, C-Dfrd, D-Dfrd, E-Dfrd, and
F-Dfrd notes. At closing, Elvet Mortgages 2019-1 will also issue
unrated class Z notes, VRR notes, and certificates.

Elvet Mortgages 2019-1 is a U.K. pool of residential loan mortgages
(first-ranking and owner-occupied in England, Wales, and Scotland)
originated by Atom Bank PLC. Atom Bank is a regulated online bank
with no physical branches, based in Durham, U.K., and established
in April 2014. In December 2016, it launched its residential
mortgage platform. Since then, the growth rate of its mortgage book
has been significant (reaching around GBP2.2 billion as of June
2019). All loans are originated through brokers, and interest-only
loans are not allowed.

Atom Bank will service the portfolio but will delegate late-stage
arrears. However, Atom Bank will decide whether to repossess
properties.

At closing, the issuer will purchase the beneficial interest in an
initial portfolio of U.K. residential mortgages from the sellers,
using the proceeds from the issuance of the rated and unrated
notes.

The issuer is an English special-purpose entity, which S&P assumes
to be bankruptcy remote for its credit analysis.

The notes will pay interest quarterly on the interest payment dates
in February, May, August, and November, beginning in February 2020.
The rated notes pay interest equal to compounded Sterling Overnight
Index Average (SONIA) plus a class-specific margin with a further
step-up in margin following the optional call date in November
2024. All of the notes reach legal final maturity in November
2061.

S&P said, "We derived the stressed interest rate curves for the
compounded SONIA by subtracting a spread of 0.25% from our stressed
three-month British pound sterling (GBP) London Interbank Offered
Rate (LIBOR) curves. There has been a close relationship between
backward-looking compounded SONIA and forward-looking LIBOR
determined for the same period. However, since SONIA does not
include the various risk premiums reflected in LIBOR, the former
has generally been lower. The spread adjustment applied to our GBP
LIBOR curves reflects the lower SONIA rates historically observed.

"We expect to assign credit ratings on the closing date subject to
a satisfactory review of the transaction documents and legal
opinions."

  Preliminary Ratings Assigned

  Class   Prelim. rating*   Amount (GBP)
  A        AAA (sf)         TBD
  B-Dfrd   AA (sf)          TBD
  C-Dfrd   A (sf)           TBD
  D-Dfrd   BBB (sf)         TBD
  E-Dfrd   BBB- (sf)        TBD
  F-Dfrd   BB (sf)          TBD
  Z        NR               TBD
  VRR note NR               N/A
  Certs    NR               N/A

*S&P Global Ratings' ratings address timely receipt of interest and
ultimate repayment of principal for the class A notes, and the
ultimate payment of interest and principal on the other rated
notes.

N/A--Not applicable
NR--Not rated
TBD--To be determined


FERGUSON MARINE: Formally Taken Into Public Ownership
-----------------------------------------------------
BBC News reports that the Scottish government has announced the
Ferguson Marine shipyard has been formally taken into public
ownership.

The move came after administrators agreed final terms for the
transaction with Scottish ministers, BBC relates.

In the autumn, administrators from Deloitte concluded public
ownership was in the best interests of the creditors, despite
receiving three commercial bids, BBC discloses.

The Port Glasgow yard will now be known as Ferguson Marine (Port
Glasgow) Ltd., BBC states.

About 300 people currently work there, BBC notes.

Ferguson went into administration following a dispute with
Caledonian Maritime Assets Ltd--which buys and leases CalMac ships
on behalf of the Scottish government--over the construction of two
ferries under a GBP97 million fixed price contract, BBC recounts.

At the time of the administration being announced, Deloitte
described the contract as being "materially behind schedule and
over budget", BBC relays.

It remains unclear when the ferries will eventually enter service,
BBC notes.

In August, the Scottish government began operating the yard under a
management agreement with the administrators, BBC recounts.

About GBP50 million of taxpayer loans to Ferguson Marine were
written off, BBC discloses.

Almost all of the GBP97 million bill for the ships has already been
paid to Ferguson Marine, and the Scottish government has kept
paying the shipyard's running costs, including its wage bill,
following administration, BBC states.

Jim McColl, the industrialist who saved the shipyard from
administration in 2014, said before the company was put into the
hands of administrators in the summer, that the final cost of the
two ships was likely to be double the contract price, BBC relates.

According to BBC, he blamed this on multiple changes being required
by the client for the innovative design features required for
hybrid-powered ships, running on diesel and on liquefied natural
gas.


IWH UK: Moody's Affirms B2 CFR; Alters Outlook to Negative
----------------------------------------------------------
Moody's Investors Service affirmed all the ratings of London-based
women's health company IWH UK Finco Limited, comprising the B2
corporate family rating, the B2-PD probability of default rating
and B2 instrument ratings on the existing senior secured facilities
borrowed by IWH UK Midco Limited. At the same time, Moody's has
changed the outlook on all ratings to negative from stable.

The outlook change was driven by:

  -- Significant free cash flow (FCF) burn in 2018-19, well in
excess of Moody's expectations

  -- The resulting inability to fund drug license acquisitions
through cash

  -- Execution risk and working capital outflows attached to drug
license acquisitions

RATINGS RATIONALE

RATIONALE FOR NEGATIVE OUTLOOK

"Today's outlook change to negative primarily reflects Theramex's
significant free cash flow consumption since the closing of the LBO
in January 2018, which was well in excess of our expectations
because of higher than anticipated carve-out costs" says Frederic
Duranson, a Moody's Assistant Vice President and lead analyst for
Theramex. "Although we expect that Theramex will generate free cash
flow in 2020, its liquidity position is substantially weaker than
we had anticipated at the time of the LBO by CVC and debt funding
to finance the acquisition of drug licenses will slow down its
gross deleveraging" Mr Duranson adds.

For the last twelve months (LTM) ended September 2019, Moody's
estimates that Theramex consumed approximately EUR42 million free
cash flow (FCF) owing to significant cash exceptional items of
EUR44 million related to the carve-out process from Teva
Pharmaceutical Industries Limited (Ba2 negative, 'Teva') which took
place over that period and high working capital consumption of
EUR30 million, which also contained some exceptional items.
Carve-out costs principally included (1) costs associated with
creating a standalone organisation at Theramex, including all the
main central functions as well as supply chain and technical
support functions to meet quality and regulatory requirements, and
(2) service agreement fees payable to Teva for the performance of
some of the above functions during the transition period. The
transfer of marketing authorisations from Teva to Theramex has
resulted in one-off working capital outflows via a material
increase in the trade receivables balance because Theramex
standalone has moved to commercial customer payment terms which are
less favourable than under the transitional agreement with Teva. In
addition, the company has elected to maintain a higher level of
inventory in order to mitigate potential supply shortages, with an
adverse impact on working capital.

For 2018-19, the rating agency projects that the cumulative FCF
burn will reach around EUR30 million. This represents a material
underperformance versus Moody's initial forecasts at LBO of
positive FCF within the first 18 months of the deal. For the full
year 2019 specifically, Moody's projects negative FCF in the region
of EUR20 million, which will mark an improvement versus the LTM Q3
2019 as cash exceptional costs reduce in Q4 2019. Despite further
cash carve-out costs in 2020, which were not part of Moody's
original expectations because they are partly related to recent
licence acquisitions, Theramex will generate positive FCF in 2020.

Moody's-adjusted gross debt/EBITDA for Theramex will rise to 6.0x
for the full year 2019 ('reported leverage'), following the EUR50
million additional term loan closed in September and the new EUR50
million add-on. Incorporating the expected 12 months' contribution
to EBITDA of the acquired drugs, Moody's adjusted leverage would
stand at 5.1x ('pro forma leverage'), broadly in line with the
forecast at LBO.

Theramex's liquidity profile remains adequate and is supported by
(1) around EUR12 million of cash on balance sheet as of the end of
September 2019, pro forma for recent and proposed drug license
acquisitions and their financing, and (2) full availability under
the company's EUR55 million revolving credit facility (RCF).
However, total liquidity sources are lower than the rating agency's
original expectation by about EUR25 million, net of EUR15 million
debt injections other than for drug licence acquisition financing.
This has taken acquisition firepower away from the group which had
to rely on debt and shareholder funding so far. As such, further
delays in cash generation will reduce Theramex's ability to
deleverage.

Social risks that Moody's considers in Theramex's credit profile
principally include product safety and manufacturing compliance
issues as well as security of supply, particularly for active
pharmaceutical ingredients, which has somewhat constrained group
revenues since the LBO.

Governance risks that Moody's considers in Theramex's credit
profile include the ongoing use of debt to fund in-market drug
acquisitions and the company's access to qualified staff and
resulting costs to cope with further product acquisitions and
transitions of products from vendors.

RATIONALE FOR RATINGS AFFIRMATION

Moody's has affirmed all B2 ratings of Theramex because its credit
profile is supported by (1) high gross margins and profitability
versus generics, (2) a business profile that is less exposed to
typical pharmaceutical risks such as patent expiries and pipeline
setbacks, (3) the defensive nature of its product portfolio, in
which a substantial portion of revenue is out-of-pocket and
therefore provides brand equity-related barriers to entry, (4) its
well-balanced geographic footprint, and (5) the anticipated
improvement in cash generation.

WHAT COULD CHANGE THE RATINGS UP/DOWN

The group's outlook could be stabilised should Theramex (1) record
organic revenue and EBITDA growth, and (2) generate substantially
positive FCF on a sustained basis whilst maintaining an adequate
liquidity profile, and (3) fund drug licence acquisitions primarily
through cash, and (4) reduce adjusted leverage sustainably to
around 5.0x.

Conversely, Theramex's ratings could be downgraded if (1) the group
incurred higher costs than expected following its transition to a
standalone entity, or (2) its free cash flow remained negative in
2020 or its liquidity position deteriorated, or (3) its Moody's
adjusted leverage remained materially above 5.0x.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Pharmaceutical
Industry published in June 2017.

CORPORATE PROFILE

Headquartered in London, UK, Theramex is primarily a sales and
marketing organisation focused on women's health. The majority of
its portfolio is made up of the international women's health drug
assets acquired from Teva Pharmaceutical Industries Ltd (Ba2
negative) by private equity firm CVC Capital Partners in January
2018. Theramex is fully asset-light because it does not have any
manufacturing operations or R&D of a significant scale.

IWH UK: S&P Affirms 'B' Ratings, Outlook Neg.
---------------------------------------------
S&P Global Ratings affirmed its 'B' ratings on Women's health care
company IWH UK Finco Ltd. (Theramex).

Complimentary nature of the acquisition reduces integration risk.

In S&P's view, the acquisition carries relatively low integration
risks because Theramex already owns the rights to market the
product, in Italy, Spain, and Central and Eastern Europe (CEE). It
is acquiring the remaining marketing authorizations in 40 markets,
of which Germany, Brazil, and Russia are the largest. As Theramex
is already present in these countries, it should be able to
integrate the product into its distribution and marketing platform
relatively smoothly, and could generate some supply chain
synergies.

The acquisition will increase leverage, thus reducing its scope to
underperform against its base-case scenario

To finance the transaction, Theramex is adding EUR50 million to its
existing EUR420 million term loan B. Although the transaction is
fully debt-financed, its adjusted leverage will remain about 6.0x
in 2019, reducing to 5.5x-6.0x in 2020. Under S&P's base case, it
assumes its adjusted EBITDA will reach at least EUR85 million in
2020. Adjusted leverage comfortably within 5x to 6x over the next
12-18 months is commensurate with the current rating.

Certain sections of the business, for example, the menopause
franchise, underperformed in 2019.

This mainly occurred because of supply issues. Theramex will have
to execute on its commercial strategy to meet its planned
profitability and cash flow generation targets. In S&P's view, the
trading environment is still highly competitive. If the company is
to maintain growth momentum, it is crucial that is suffers no
further setbacks in getting its products to the market.

Theramex's generation of free operating cash flow (FOCF) is still
subject to execution risks that could delay the deleveraging path
built into S&P's base-case scenario.

The company is still completing the process of separating from
Teva. Its main focus is the transfer and in-house management of
supply and distribution channels, where the separation process
caused supply issues that have affected the availability of
products and working capital outflows.

The company's cash flow in 2019 will be negative and distorted by
one-off costs.

These include about EUR30 million-EUR40 million of transitional
service agreement charges and set up costs; and about EUR30 million
of working capital outflow. However, the underlying costs and
working capital appear to be under control. S&P said, "We project
only modest working capital outflows of about EUR6 million in 2020.
We also assume that in 2020 and beyond, the company will be able to
generate FOCF of at least EUR40 million per year. Although we
understand that the company expects to continue to supplement
organic growth with bolt-on acquisitions, under our current base
case, it has leeway only for transactions financed from internally
generated cash flows."

S&P said, "Our negative outlook on Theramex indicates that we could
downgrade the company within the next 12 months if it fails to
generate sufficient EBITDA and FOCF to enable it to reduce its
adjusted leverage to below 6x by 2020.

"We would lower the ratings if we see evidence that the company is
unlikely to generate sufficient EBITDA in 2019 and 2020 to reduce
its leverage to below 6x over the next 12 months." This could occur
if Theramex suffers operational issues, such as difficulties in
launching, promoting, and supplying products to the market that
would drive its top line, while maintaining strict cost control.

In addition, larger-than-expected working capital outflows caused
by a build-up of inventories or unfavorable payment and receivable
terms could lead to diminishing FOCF generation. This would also
put pressure on the ratings.

S&P would consider revising the outlook to stable if it saw a clear
indication that leverage will be comfortably below 6x by the end of
2020, while FOCF remains close to EUR40 million per year.

This would be conditional on Theramex's ability to deliver solid
organic revenue growth, capitalizing on the premium positioning of
its products, and the sales, marketing, and supply infrastructure
it put in place during 2019. Including a contribution from the
assets acquired in 2019, adjusted EBITDA is estimated to reach at
least EUR85 million in 2020. S&P also assumes that after Theramex
absorbs the one-off separation costs in 2019, it will be able to
generate FOCF of at least EUR40 million per year from 2020. This
will enable it to build up a reserve to support future growth.

MOTOR FUEL: S&P Affirms 'B' Issuer Credit Rating, Outlook Negative
------------------------------------------------------------------
S&P Global Ratings affirmed its 'B' long-term issuer credit rating
on the parent company, CDR Firefly 4 Ltd. (Motor Fuel Group).

S&P said, "We are assigning our 'B' issue rating with a '3'
recovery rating to the company's proposed senior secured term loan
B2 incremental loan, and affirming the ratings on the existing term
loan B2 facility. We are also assigning our 'CCC+' issue rating
with a '6' recovery rating to the company's proposed second-lien
incremental loan, and affirming the ratings on the existing
second-lien facility."

Although the proposed transaction is credit-neutral, it leaves MFG
with limited financial headroom.

S&P said, "The proposed dividend recapitalization will not
materially change our assessment of MFG. The transaction would
cause the company's adjusted debt to EBITDA to increase to 7.0x in
2019 from 6.2x in a no-dividend recapitalization scenario. However,
this is still consistent with the current rating level, and it
reflects our expectation that the company will return cash to its
shareholders under its financial sponsor ownership. We note that
increased borrowings have eroded the financial headroom generated
through strong operating performance over the past few quarters,
constraining the company's financial flexibility. In addition,
since we expect earnings expansion to be relatively modest in
absolute terms, we think any leverage reduction will be slow." As a
result, debt to EBITDA should remain broadly stable over the next
two years.

The quick integration of the MRH business and the gradual expansion
of retail operations will contribute to improving profitability.

Over the past few quarters, MFG has made significant progress in
integrating MRH's operations into its network. The company is now
on track to reach GBP244 million reported EBITDA at the end of
2019, with its EBITDA margin improving to 5.7% from 4.6% in 2018.
This includes about GBP22 million of contracted synergies, mostly
arising from a rapid renegotiation of the company's fuel and retail
supply contracts, as well as a reduction in its headcount. S&P
said, "We think the company will maintain a stable level of
earnings in 2020 and 2021, with reported EBITDA reaching about
GBP250 million-GBP260 million. This reflects the balance between an
expected downward trend in revenue growth--mostly caused by a
decline in the demand for petrol--and a gradual shift to more
profitable retail activities. As a result, we expect the company's
reported EBTIDA margin to increase to 6.1% in 2021."

Strong cash generation will support the liquidity position.

S&P said, "We expect reported free operating cash flow (FOCF) to be
exceptionally high in 2019, reaching GBP165 million thanks to a
synergy-driven GBP70 million working capital release. We expect MFG
will then maintain positive cash generation, with stable FOCF of
about GBP65 million-GBP70 million per year in 2020 and 2021. This
will lead to a gradual accumulation of cash, which will support the
adequate liquidity position. However, we do not expect MFG to
direct these resources toward the repayment of the outstanding
debt. Rather, we think MFG will use part of the cash buffer to fund
small bolt-on acquisitions over the medium term, consistent with
the company's strategy."

The negative outlook reflects MFG's high debt burden at the closing
of the dividend recapitalization and the modest leverage reduction
prospects, with adjusted debt to EBITDA decreasing to 6.7x in 2021
from 7.2x at the transaction's closing. This leaves minimal
headroom under the current rating to withstand any unexpected
operating weakness--including a shortfall in fuel margins or
volumes--or setbacks in expanding the retail activities. In
addition, although S&P thinks integration risks related to the MRH
transaction are now diminished, execution will be key for the
company to deliver the remaining synergies.

S&P said, "We could lower the rating if MFG's adjusted debt to
EBITDA remains persistently higher than 7.0x over 2020 and 2021, or
if reported FOCF and liquidity weaken. This could arise if MFG
experiences unexpected setbacks in the final stages of integration,
or if earnings shortfall, arising from an oil price shock, harms
fuel volumes and margins. This could also happen if the company
undertakes further debt-funded opportunistic acquisitions or
shareholder remunerations.

"We could revise the outlook to stable over the next 12 months if
the company reduces adjusted debt to EBITDA sustainably below 7.0x
on the back of strong reported FOCF. This could arise if the
company soundly completes the integration of MRH and makes no
further large debt-funded acquisitions, or if it allocates some of
its internally generated cash to the repayment of the outstanding
debt."


SMALL BUSINESS 2019-3: Moody's Rates GBP26.3MM Cl. D Notes Ba3
--------------------------------------------------------------
Moody's Investors Service assigned the following definitive ratings
to four classes of notes issued by Small Business Origination Loan
Trust 2019-3 DAC:

GBP165.0M Class A Floating Rate Asset-Backed Notes due October
2028, Definitive Rating Assigned Aa3 (sf)

GBP7.5M Class B Floating Rate Asset-Backed Notes due October 2028,
Definitive Rating Assigned A3 (sf)

GBP22.5M Class C Floating Rate Asset-Backed Notes due October 2028,
Definitive Rating Assigned Baa3 (sf)

GBP26.3M Class D Floating Rate Asset-Backed Notes due October 2028,
Definitive Rating Assigned Ba3 (sf)

Moody's has not assigned ratings to GBP 16.25M Class E Floating
Rate Asset-Backed Notes, GBP 12.5M Class X Floating Rate
Asset-Backed Notes and GBP 12.5M Class Z Variable Rate Asset-Backed
Notes which are also issued by the Issuer.

SBOLT 2019-3 is a securitization backed by a static pool of small
business loans originated through Funding Circle Ltd's online
lending platform. The loans were granted to individual
entrepreneurs and small and medium-sized enterprises domiciled in
UK. Funding Circle will act as the Servicer and Collection Agent on
the loans and both Funding Circle and Glencar Investments XI DAC
will be the retention holders.

RATINGS RATIONALE

The ratings of the notes are primarily based on the analysis of the
credit quality of the underlying portfolio, the structural
integrity of the transaction, the roles of external counterparties
and the protection provided by credit enhancement.

In Moody's view, the strong credit positive features of this deal
include, among others:

(i) a static portfolio with a short weighted average life of around
2 years;

(ii) certain portfolio characteristics, such as:

(a) high granularity with low single obligor concentrations (for
example, the top individual obligor and top 10 obligor exposures
are 0.2% and 2.1% respectively) and an effective number above
1,400;

(b) the loans' monthly amortisation; and

(c) the high yield of the loan portfolio, with a weighted average
interest rate of 9.8%.

(iii) the transaction's structural features, which include:

(a) a cash reserve funded at closing at 1.75% of the initial
portfolio balance, ramping to 2.75% of the initial portfolio
balance before amortising in line with the rated Notes; and

(b) a non-amortising liquidity reserve sized and funded at 0.25% of
the initial portfolio balance;

(c) an interest rate cap with a strike of 2% that provides
protection against increases on SONIA due on the rated Floating
Rate Asset-Backed Notes.

(iv) no set-off risk, as obligors do not have deposits or
derivative contracts with Funding Circle.

However, the transaction has several challenging features, such
as:

(i) the rapid growth of origination volumes during the 9-year
operating history of the Originator and Servicer, without any
experience of a significant economic downturn;

(ii) low seasoning of the loan portfolio, with a weighted average
seasoning of around 2 months; and

(iii) moderately high industry concentrations as around 38% of the
obligors belong to the top two sectors, namely Services: Business
(21%) and Construction & Building (17%) and the high exposure to
individual entrepreneurs and micro-SMEs (around 55% of the
portfolio); and

(iv) the loans are only collateralized by a personal guarantee, and
recoveries on defaulted loans often rely on the realization of this
personal guarantee via cashflows from subsequent business started
by the guarantor.

  - Key collateral assumptions:

Mean default rate: Moody's assumed a mean default rate of 11.75%
over a weighted average life of 2.1 years (equivalent to a B2 proxy
rating as per Moody's Idealized Default Rates). This assumption is
based on:

(i) the available historical vintage data;

(ii) the performance of the previous transactions backed by loans
originated by Funding Circle; and

(iii) the characteristics of the loan-by-loan portfolio
information.

Moody's took also into account the current economic environment and
its potential impact on the portfolio's future performance, as well
as industry outlooks or past observed cyclicality of
sector-specific delinquency and default rates.

Default rate volatility: Moody's assumed a coefficient of variation
(i.e. the ratio of standard deviation over the mean default rate
explained) of 48.0%, as a result of the analysis of the portfolio
concentrations in terms of single obligors and industry sectors.

Recovery rate: Moody's assumed a 25% stochastic mean recovery rate,
primarily based on the characteristics of the collateral-specific
loan-by-loan portfolio information, complemented by the available
historical vintage data.

Portfolio credit enhancement: the aforementioned assumptions
correspond to a portfolio credit enhancement of 44.5%.

As of September 30, 2019, the upsized loan portfolio of
approximately GBP 250.01 million was comprised of 2,973 loans to
2,970 borrowers. All loans accrue interest on a fixed rate basis.
The average remaining loan balance stood at GBP 84,093, with a
weighted average fixed rate of 9.84%, a weighted average remaining
term of 50.4 months and a weighted average seasoning of 2.4 months.
Geographically, the pool is concentrated mostly in the South East
(26.9%) and London (18.4%). Generally, the loans were taken out by
borrowers to fund the expansion or growth of their business and
each loan benefits from a personal guarantee from (typically) the
owner(s) of the business. Any loan more than 5 days in arrears or
defaulted as of the loan portfolio cut-off date will be excluded
from the final pool.

  - Key transaction structure features :

Cash Reserve Fund: The transaction benefits from a cash reserve
fund funded at closing at 1.75% of the initial portfolio balance,
ramping to 2.75% of the initial portfolio balance before amortising
in line with the rated Notes. The reserve fund provides both credit
and liquidity protection to the rated Notes.

Liquidity Reserve Fund: The transaction benefits from a separate,
non-amortising liquidity reserve fund sized and funded at 0.25% of
the initial portfolio balance. When required, funds can be drawn to
provide liquidity protection to the most senior rated Notes, then
outstanding.

Counterparty risk analysis :

Funding Circle acts as Servicer of the loans and Collection Agent
for the Issuer. Link Financial Outsourcing Limited (NR) will act as
a warm Back-Up Servicer and Collection Agent.

All of the payments on the loans in the securitised loan portfolio
are paid into a Collection Account held at Barclays Bank PLC (A2 /
P-1). The Issuer will be the beneficiary of a declaration of trust
on the Collection Account. There is a daily sweep of the funds held
in the Collection Account into the Issuer Account, which is held
with Citibank, N.A., London Branch (Aa3 / P-1), with a transfer
requirement if the rating of the account bank falls below A2 /
P-1.

The transaction will benefit from an interest rate cap agreement
with NatWest Markets plc (A3(cr) / P-2(cr)) which is designed to
limit the interest rate mismatch between the fixed-rate assets and
the floating-rate liabilities.

  - Principal Methodology:

The principal methodology used in these ratings was "Moody's Global
Approach to Rating SME Balance Sheet Securitizations" published in
July 2019.

  - Factors that would lead to an upgrade or downgrade of the
ratings:

The notes' ratings are sensitive to the performance of the
underlying portfolio, which in turn depends on economic and credit
conditions that may change. The evolution of the associated
counterparties risk, the level of credit enhancement (including the
amount of excess spread) and the United Kingdom's country risk
could also impact the notes' ratings.

TED BAKER: Overstates Value of Inventory by Up to GBP25 Million
---------------------------------------------------------------
Jonathan Eley and Myles McCormick at The Financial Times report
that Ted Baker on Dec. 2 warned that it had overstated the value of
its inventory by up to GBP25 million, in the latest blow to the
fashion retailer.

According to the FT, the struggling clothing group, which is
launching an independent review into the accounting problem, said
any adjustments were not related to this financial year.

The group has lost three-quarters of its value in the past year,
the FT notes.

Liberum, the retailer's broker, said disclosure of the
overstatement seemed to be part of "early-stage work" by new
finance director Rachel Osborne, the FT relates.

The overstatement is a setback for KPMG, the accounting firm that
has audited Ted Baker since 2001, the FT states.  The Big Four
auditor is already facing questions after Halfords, another FTSE
250 retailer audited by the group, restated historic inventory
numbers, according to the FT.

KPMG, which declined to comment, was reprimanded by the Financial
Reporting Council in 2018 over a conflict of interest relating to
Ted Baker, the FT relays.

The retailer has floundered since allegations of inappropriate
behavior towards staff by Ray Kelvin, Ted Baker's founder, were
first revealed, the FT recounts.  In October, it issued its third
profit warning of the year, reporting it had been suffering from
"brutal" trading following problems ranging from civil unrest in
Hong Kong to adverse weather in North America, the FT discloses.

According to the FT, Gavin Pearson, a forensic accountant at
Quantuma, said it was unclear whether the overstatement was due to
inflated estimates of inventory value or failure to account for the
number of items held.

The review into the overstatement will be carried out by law firm
Freshfields Bruckhaus Deringer and independent accountants, who
will report their findings to a board subcommittee chaired by
Sharon Baylay, the FT states.

Ted Baker, the FT says, is scheduled to provide an update on recent
trading on Dec. 11, although analysts noted that over the Black
Friday weekend it was discounting heavily--offering 30% off
everything in-store and online.


THE MANOR: Administrators Put Hotel Up for Sale for GBP4.8MM
------------------------------------------------------------
Business Sale reports that The Manor, a 32-bedroom hotel near
Bicester, Oxfordshire, has been put up for sale on behalf of its
administrators.

According to Business Sale, Colliers International are selling the
hotel at a reduced price of GBP4.8 million on behalf of
administrators Moorfields Advisory, who are continuing to run the
hotel fully.

The grade II listed hotel is set in 12 acres of land in
Weston-on-the-Green, it has extensive public areas and
meeting/banqueting spaces and features including the remains of a
moat, a Minstrels' Gallery and a Tudor fireplace.

"The Manor Hotel occupies an excellent location, being close to a
number of key tourist and business centres," Business Sale quotes
Colliers International hotels director Peter Brunt as saying.
"Silverstone Racetrack and Bicester retail village are within easy
reach, Blenheim Palace is just seven miles away and just ten miles
south is the historic city of Oxford.  Taken together, the area
attracts millions of visitors all year round."

Mr. Brunt added: "There are few buildings from this period that
trade as hotels, and this is a rare opportunity for new owners to
take on this magnificent building and fulfil its full potential."

THG OPERATIONS: Moody's Assigns B1 CFR, Outlook Stable
------------------------------------------------------
Moody's Investors Service assigned a B1 corporate family rating and
a B1-PD probability of default rating to THG Operations Holdings
Limited. Concurrently, the rating agency has assigned a B1 rating
to the proposed senior secured facilities comprising a GBP510
million equivalent Term Loan B and GBP150 million Revolving Credit
Facility. The outlook is stable.

RATINGS RATIONALE

THGO's B1 CFR reflects the company's (a) strong organic revenue
growth and stable margins; (b) successful integration and growth
trajectory of numerous acquisitions; (c) strong positions in the
online beauty and wellness retail segments, which are benefiting
from favourable demand trends and should be relatively resilient in
an economic downturn, notwithstanding the fundamentally
discretionary nature of spending in this area; and (d) the
potential for continued strong growth in the external customer base
of the company's technology platform, Ingenuity, further leveraging
investments made to support the core online retail businesses.

Importantly, the CFR assumes that, as has been the case over the
last few years, any acquisitions over the rating horizon would be
(1) relatively modest in size; (2) complementary to one of the
three core divisions: Beauty, Wellness, and Ingenuity; (3) EBITDA
and cashflow accretive from an early stage; and (4) funded
predominantly from existing cash resources and/or additional equity
raises.

In addition, and less positively, the CFR also recognises (a) the
company's relatively modest size; (b) the operational complexities
involved in running a multitude of trading businesses most of which
have a wide geographic reach; (c) the need to continue to focus not
just on maximising customer retention but on winning new customers;
and (d) a leveraged capital structure, with relatively high capital
spending limiting free cash flow and interest coverage.

Moody's estimates that THGO's pro-forma opening leverage, as
measured by the ratio of Moody's-adjusted gross debt to adjusted
EBITDA is more than 6.5x. However, in light of expected continued
strong revenue growth and stable margins, the rating agency expects
the company to deleverage rapidly during 2020, such that
Moody's-adjusted gross leverage will be below 5.5x, a level
commensurate with the B1 CFR. In calculating opening leverage
Moody's has not factored in the pro-forma benefits of the Myprotein
rebrand and the full year contribution from 2018 acquisitions and
new contracts is taken into account, whereas if these components
were included gross leverage would already be 6.0x.

In addition, Moody's highlights that for calculation of pro-forma
credit metrics it has used its own estimate for the likely impact
of the adoption of IFRS 16 on the company's debt obligations after
factoring in the long leases signed, on an arm's length basis, with
companies in the ringfenced 'Propco' sub-group of THGO's ultimate
parent, The Hut Group Limited (THGL). In this regard the rating
agency has assumed GBP142 million of debt in respect of leases,
which adds close to one and a half turns of leverage to the
company's funded debt of GBP546 million (which comprises primarily
the GBP510 million Term Loan B and a loan in respect of the Polish
Warehouse). Conversely, the company's net leverage ratio is around
one turn lower than the gross ratio. Moody's expects that the
company would use surplus cash resources for EBITDA accretive
acquisitions rather than returning to the debt markets over the
rating horizon.

THGL has a rather diverse shareholder base for a private company.
Moody's believe that the various shareholders share a common desire
and belief that they can benefit from the entrepreneurial culture
embedded by THGL's founders, and there has been multiple examples
of the executive team being supported with fresh equity to fund
acquisitions. There is a wide non-executive board structure in
place and the rating agency understands that the executive team has
an active and dynamic dialogue with shareholders. Moody's also
acknowledges that in contrast to companies owned and controlled by
private equity firms the executive team do not have the planning
constraint of working towards a targeted exit timeline. The team
has a history of successfully creating liquidity opportunities for
individual shareholders if and when required. Moody's expects the
company to remain disciplined in pursuing bolt-on acquisitions on
the basis discussed earlier in this publication. However, all this
said, Moody's is at this stage unable to have certainty about
future financial policy or indeed that relationships with and
between all shareholders will remain harmonious.

LIQUIDITY

Pro-forma for the refinancing Moody's expects THGO's liquidity
position to be good, comprising an opening cash balance of more
than GBP100 million, as well as access to a revolving credit
facility (RCF) of GBP150 million which is expected to be undrawn at
closing. Moody's believes these resources provide ample flexibility
for the company to cope with seasonal variances in working capital,
the company's modest maintenance capital spending requirements, and
to fund expansionary capital spending, and bolt on acquisitions.

The company enjoys the typical negative working capital dynamic of
retailers, whereby payments from customers are received at the time
of the order but payments to suppliers are paid later. This dynamic
is particularly favourable for companies in a strong growth phase,
like THGO.

STRUCTURAL CONSIDERATIONS

The B1 rating of the new Term Loan B and RCF reflects their
pari-passu ranking as secured debt and the absence of material
other financial liabilities. In accordance with Moody's Loss Given
Default Methodology a 50% recovery rate assumption has been used.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects Moody's expectations that the company
will deleverage materially over the next 12-18 months as it
benefits from the full year contributions of the 2018 acquisitions
and the Myprotein rebrand, as well as ongoing revenue growth and
operational efficiencies.

WHAT COULD CHANGE THE RATING UP/DOWN

In light of the high opening leverage an upgrade is unlikely in the
next 12-18 months but in due course could be considered if
following an increase in its scale, the company's Moody's-adjusted
leverage was expected to be sustained below 4.5x, free cash flow is
materially positive, and the company maintains a track record of a
prudent financial policies.

Conversely, a downgrade would likely result from the company's
failure to generate growth in profitability such that its
Moody's-adjusted leverage does not reduce below 5.5x over the
course of 2020. Financial policies contrary to the rating agency's
expectations, such as using additional debt to fund future
acquisitions, would also likely result in negative rating action.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Retail Industry
published in May 2018.

CORPORATE PROFILE

THGO is the holding company of the newly established operational
sub-group of THGL, which has decided to ringfence its property
assets into a separate 'Propco' sub-group. The company is
headquartered in Manchester, England and has a diverse range of
e-commerce focused activities, and certain associated manufacturing
facilities. Its largest brands lookfantastic.com and myprotein.com
operate in the beauty and wellness retail segments respectively. In
2018 THGL reported revenues and EBITDA of GBP916 million and GBP68
million respectively.



===============
X X X X X X X X
===============

[*] EUROPE: EU Reaches Deal on Banks' New Bad Loan Recovery Rules
-----------------------------------------------------------------
Francesco Guarascio at Reuters reports that European Union
governments reached a deal on Nov. 27 on new rules to facilitate
banks' recovery of assets from borrowers who default, an EU
statement said.

According to Reuters, the new rules, which need to be backed by the
European Parliament, would introduce a mechanism to favor
out-of-court procedures on foreclosures, speeding up banks'
recovery of collateral used by borrowers to obtain loans when they
fall behind on their repayment schedule.

The EU's stock of non-performing loans is at its lowest since the
financial crisis but remains high in some countries, including
Greece, Cyprus, Portugal and Italy, tying up capital and making it
more difficult for banks to lend to firms and households, Reuters
notes.

The mechanism, envisaged only for business loans and not consumer
loans, is expected to reduce the losses banks incur when lenders
offload non-performing loans, Reuters discloses.  It would,
however, increase the burden on borrowers, Reuters states.

The rules would apply to new loans and would have to be agreed
between a bank and a borrower upfront, normally when the loan is
granted, Reuters relates.



                           *********


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-
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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.

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