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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

          Friday, December 27, 2019, Vol. 20, No. 259

                           Headlines



F R A N C E

BOURBON CORPORATION: Creditor Banks to Take Over Assets


G E R M A N Y

ADLER PELZER: S&P Alters Outlook to Negative & Affirms 'B+' CCR
EUROMICRON AG: Zech Group Grants EUR5-Mil. Insolvency Loan
SAFARI BETEILIGUNGS: S&P Downgrades ICR to 'CCC', Outlook Negative
VAC INTERMEDIATE: S&P Downgrades Rating to 'B-', Outlook Stable


I R E L A N D

HELIOS NO. 37: S&P Assigns BB- (sf) Rating to Class E Notes
INVESCO EURO III: S&P Assigns B- (sf) Rating to Class F Notes
LIMERICK FC: New Football Group Formed as Liquidation Looms


I T A L Y

ATLANTIA: May Face Bankruptcy if Government Concession Revoked
NEXI SPA: S&P Affirms 'BB-' LT Issuer Credit Rating, Outlook Pos.


K A Z A K H S T A N

GRAIN INSURANCE: S&P Affirms 'B' ICR, Outlook Remains Stable
LONDON-ALMATY INSURANCE: S&P Assigns 'BB-' LT ICR, Outlook Stable


L U X E M B O U R G

KIWI VFS: S&P Ups ICR to 'B+' on Improved Leverage, Outlook Stable
SUMMER (BC) LUX: S&P Assigns 'B' ICR, Outlook Stable


N E T H E R L A N D S

HEMA BV: S&P Downgrades ICR to 'CCC' on Rising Refinancing Risks


N O R W A Y

NAVICO GROUP: S&P Downgrades ICR to 'CCC' on Liquidity Concerns
REC SILICON: Receives NOK150-Mil. Claim from Nordea


R U S S I A

LENINGRAD OBLAST: S&P Affirms BB+' Long-Term ICR, Outlook Stable
MAGNIT PJSC: S&P Affirms 'BB' Issuer Credit Rating, Outlook Stable


S P A I N

UCI 16: S&P Affirms D (sf) Rating on Class E Notes


S W I T Z E R L A N D

UPC HOLDING: S&P Affirms BB- Issuer Credit Rating, Outlook Stable


U N I T E D   K I N G D O M

COVENTRY & RUGBY: S&P Affirms 'BB+' Bond Rating, Outlook Stable
FLEET TOPCO: S&P Assigns 'B+' ICR on Completed Debt Raise
HIBU GROUP: S&P Alters Outlook to Negative & Affirms 'B' ICR
LECTA PAPER: Files Chapter 15 Bankruptcy Petition in New York
MOTION MIDCO: S&P Assigns B+ ICR on Merlin Entertainments Takeover

OWL FINANCE: S&P Assigns CCC+ Issuer Credit Rating, Outlook Stable
TOMLINSON'S DAIRIES: Dairy Farmers May Get Little to No Payout

                           - - - - -


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F R A N C E
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BOURBON CORPORATION: Creditor Banks to Take Over Assets
-------------------------------------------------------
Marc Leras and Tangi Salaun at Reuters report that French marine
services group Bourbon Corporation, which has been in a court
restructuring process after its business was hit by volatile energy
markets, said its assets would be taken over by its creditor
banks.

According to Reuters, Bourbon said the Marseille commercial court
had ruled that Bourbon's assets would be transferred to Societe
Phoceenne de Participations (SPP) from Jan. 2, 2020.

Bourbon -- which employs 8,200 staff of which 1,392 are in France
-- has been hurt by market overcapacity and a fall in spending on
services by upstream oil and gas companies, Reuters discloses.

At a Dec. 10 hearing, the court had rejected all other takeover
bids and selected SPP, Reuters relates.  The banks that own SPP
together hold about 75% of the Bourbon's debt, Reuters notes.

SPP's offer proposes to acquire 100% of the assets of Bourbon
Corporation and to convert into equity capital a total of EUR1.7
billion worth of debt and liabilities, Reuters states.

The company said earlier the operation will lead to its liquidation
and a total loss for its shareholders and bondholders, Reuters
recounts.

Bourbon's banking debts stood at EUR2.4 billion as of the middle of
March, according to Reuters.




=============
G E R M A N Y
=============

ADLER PELZER: S&P Alters Outlook to Negative & Affirms 'B+' CCR
---------------------------------------------------------------
S&P Global Ratings revised its outlook on Adler Pelzer to negative
and affirmed its 'B+' corporate credit rating. S&P also affirmed
its 'B+' issue-level rating on Adler Pelzer's secured bond.

Adler Pelzer reported weaker profitability in 2019 and S&P expects
only small improvements over the next quarters Profitability has
further weakened over the past quarters mostly due to a weaker auto
market and changes in the company's product mix. In the first nine
months ended Sept. 30, 2019, its reported EBITDA margins declined
to 7.4% compared with 9.0% in the prior year. This was mainly due
to a significant 14% revenue decline in China that led to an
under-absorption of fixed costs. S&P said, "Given looming
geopolitical risks, concerns about a slowdown in economic growth,
and other risks that we see for the automotive industry outlook, we
see a risk that Adler group's profitability will fall further and
below the S&P-adjusted EBITDA margin range of 8%-10% that we view
as commensurate with the ratings in 2019 and 2020."

Liquidity could weaken if profitability further declines.   S&P
said, "Although we still consider Adler Pelzer's liquidity
adequate, we believe the company might need to arrange additional
liquidity sources if profitability continued to weaken or should it
fail to renew short-term debt maturities, which largely relate to
bilateral lines that the company is renewing before they come due.
At the end of the third quarter 2019, we project liquidity sources
covered uses by about 1.3x."

The slowdown in the Chinese economy will weigh on Adler Pelzer's
2019 results and we expect further challenges in 2020.  This is
because the company generates about 16% of its revenue in
Asia-Pacific. Light vehicle sales in China dropped by 10.5% in the
first 11 months of 2019, according to the Chinese Association of
Automobile Manufacturers. S&P said, "As a result, we now expect a
full-year market decline in China of 7%-9% for 2019, much more than
the 3% decline we anticipated earlier in the year. Furthermore we
expect only moderate growth in unit sales in 2020 of about 1%-2%
and we see a risk of additional production rationalization, which
could make it more challenging for Adler to grow and increase its
market share in China in 2020, in our view."

Adler Pelzer has positioned itself towards electrification by
developing solutions for electrical vehicles acoustics.  This is
underpinned by orders the company has received related to battery
electric vehicles that are due to launch in the coming quarters
(e.g., for the Daimler EQC and VW eGolf). S&P said, "While we note
the company's efforts to develop innovation products, R&D spending
in relation to sales are merely 3%-4% per year, which is relatively
low compared to other industry players. We attribute this to
comparatively lower technological content of Adler Pelzer's product
portfolio, which could result in lower pricing power."

The negative outlook reflects the one-in-three likelihood of a
one-notch downgrade over the next 12 months if S&P consider sAdler
Pelzer Holding unlikely to maintain EBITDA margins of above 8%.

S&P said, "We could downgrade Adler Pelzer if the group's adjusted
FFO to debt fell below 12%, if adjusted free operating cash flow
(FOCF) was materially weaker than expected, and if its liquidity
position further weakened. This could be the case if Adler Pelzer
failed to execute its order book due to a more severe downturn in
the auto industry, contrary to our expectations, or if
underperformance of the other businesses held by Adler Plastic
constrained the operating results at the group level.

"We could also lower the ratings if entities outside Adler Pelzer's
scope drew significantly on the group's cash balances. Increasing
leverage or declining profitability at these entities would also
weigh on our rating on Adler Pelzer.

"We could revise the outlook back to stable if Adler Pelzer's
operating performance improves, allowing the company to generate
reported FOCF of 2%-5% of sales. In addition, we would revise the
outlook to stable if we expect the Adler Plastic group will
maintain FFO to debt of about 15%-20%, while keeping S&P Global
Ratings' adjusted EBITDA margins at more than 8%."

Adler Pelzer, headquartered in Germany, is a midsize auto supplier
with revenue of about EUR1.4 billion. It specializes in the design,
engineering, and manufacturing of acoustic and thermal components,
serving the majority of original-equipment manufacturers globally.
Adler Pelzer benefits from strong market shares of about 20% in its
niche markets.

S&P said, "We view Adler Pelzer as a core subsidiary of Adler
Plastics, which holds a 72% indirect stake in the company, with the
remainder held by Italian private-equity fund FSI. Adler Pelzer
generates about 95% of Adler Plastic's revenue and most of its
EBITDA (even compensating for some losses at Adler Plastic's other
entities in some years). We think that the ratings on Adler Pelzer
depend on the creditworthiness of the broader Adler Plastic
group."

Although Adler Pelzer's credit quality benefits from the payment
restrictions defined by the documentation for the senior secured
notes, S&P believes that this protection is not sufficient to
entirely delink the ratings from the parent's credit quality.


EUROMICRON AG: Zech Group Grants EUR5-Mil. Insolvency Loan
----------------------------------------------------------
The Zech Group AG on Dec. 20 disclosed that it has granted an
insolvency loan of EUR5 million to euromicron AG.  The loan serves
as necessary securing of the subsidiaries' liquidity in the short
term.  The loan has a term until December 31, 2019, and can be
repaid early at any time.

Early this week, a decision of the preliminary committee of
creditors concerning the sale of all subsidiary companies is
expected.  According to the preliminary assessment of the offers
made thus far, the assets of euromicron probably will not be
sufficient for a complete settlement of the insolvency claims after
the sale of the subsidiary companies.

                       About euromicron AG

euromicron AG -- http://www.euromicron.de-- is a medium-sized
technology group that unites 16 companies from the fields of Smart
Buildings, Smart Industry, Critical Infrastructures and Smart
Services.  Rooted in Germany, euromicron operates internationally
with its around 1,900 employees at 40 locations.  Backed by its
expertise in sensor systems, terminal devices, infrastructures,
platforms, software and services, euromicron is able to offer its
customers end-to-end solutions from a single source.  As a result,
euromicron helps small and medium-sized enterprises, large
companies and public-sector organizations enhance their agility and
efficiency, prevent security risks and develop new business models.
As a German specialist for the Internet of Things (IoT),
euromicron enables its customers to network business and production
processes and successfully achieve digitization.  euromicron AG
generated total sales of EUR318.0 million in fiscal year 2018.


SAFARI BETEILIGUNGS: S&P Downgrades ICR to 'CCC', Outlook Negative
------------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Germany-based Safari Beteiligungs GmbH to 'CCC' from 'B-'.

S&P is increasingly likely to regard the contemplated debt buybacks
as distressed.

While announcing its third-quarter results, Safari communicated
that it may purchase a portion of its notes, which are currently
trading at well below par, in the open market. The company's
subdued performance and high debt leverage amid substantial
regulatory uncertainty, combined with its notes trading at
significantly below par, results in an increasing likelihood that
the proposed transactions may be consistent with a distressed
offer. S&P said, "We lowered our ratings, in line with our 'CCC'
criteria, since we believe Safari may pursue a bond buy back in the
next 12 months that we would regard as a distressed exchange.
Moreover, in our view, the company is vulnerable and dependent on
positive regulatory developments to meet its long-term financial
commitments."

The effects of regulatory measures will continue to weigh on
Safari's performance metrics.

Safari reported a revenue and EBITDA decline of 15% and 31.6%
respectively during the first nine months of 2019 compared with the
same period in 2018, which is in line with S&P's expectations. The
deterioration stemmed from the amended Gaming Ordinance, which has
affected the appeal of gaming machines and substantially reduced
the profitability per machine since November 2018. The company
intends to mitigate this impact by implementing countermeasures. It
is also entering online gaming markets in several countries, but
this will take time. Additionally, on the path to 2021, the group
will need to ensure all machines are compliant with the new
versions, whereas currently only approximately 50% of total
machines are compliant with the rules applicable after January
2021.

In addition, the regulatory uncertainty remains high in Germany.

Under the current Interstate Treaty, only 51% of Loewen Play's
amusement with prize machines are currently eligible for a license
to operate beyond July 2021. It is still uncertain to what extent
local authorities will enforce the current minimum distance
requirements and multi-concession ban. S&P expects that if the
current restrictions are not changed and are strictly enforced,
Safari's leverage would increase further over the next two years.
This would call into question the sustainability of the company's
capital structure and its ability to refinance its notes due in
November 2022. The impact of the two situations described above has
translated into a decline in cash flow generation and S&P Global
Ratings-adjusted leverage, which S&P estimates at nearly 5.0x in
2019 compared with 4.0x in 2018 (both according to IFRS 16).

S&P said, "Lastly, we believe the group may need to hold some
additional cash liquidity to enable it to restructure leased sites
as needed once further clarity is gained on the regulatory
environment. With a maximum of 12 machines per arcade, this may
mean that some sites have larger leased space than is required,
creating a drag on efficiency.

"The negative outlook reflects the increasing likelihood that
Safari could repurchase some of its notes at well below par, which
we would likely see as distressed exchange offers. Moreover, we see
uncertainty about the sustainability of the company's capital
structure in the medium term, unless there are favorable
developments relating to the regulatory environment in Germany and
the company takes measures to counteract the slide in earnings.

"We could lower the ratings if Safari completes the debt repurchase
transactions at well below par value within the next 12 months or
undertakes a broader debt restructuring, in a context of continuing
operating underperformance. This could trigger a downgrade to 'SD'
(selective default).

"We could consider ratings upside if we believed the company would
not likely default, through a distressed exchange offer or a
conventional default, over the subsequent 12 months without an
unforeseen positive development."


VAC INTERMEDIATE: S&P Downgrades Rating to 'B-', Outlook Stable
---------------------------------------------------------------
S&P Global Ratings lowered its ratings on magnetic alloy and
component manufacturer VAC Intermediate Holdings BV (VAC)and its
senior secured term loan to 'B-' from 'B'.

Low operating margins and high restructuring costs have weakened
credit metrics.   Economic conditions have worsened in recent
months, and we expect the global trade to remain weak in 2020. This
has affected VAC's sales volumes in 2019 and translated into
weakening operating and financial performance during the first nine
months of 2019 compared with previous year. Sales decreased 12% to
EUR275 million (versus EUR313 million in September 2018) and EBIT
to--negative EUR0.5 million (versus EUR14 million in 2018). S&P has
therefore revised downward its EBITDA and FOCF forecasts for
2019-2020. Assuming no further significant setbacks compared with
2018, S&P forecasts VAC will report S&P Global Ratings-adjusted
EBITDA (including restructuring costs) of about EUR20 million-EUR25
million in 2019, a significant drop from the around EUR40 million
recorded in 2018. This will translate into an S&P Global
Ratings-adjusted EBITDA margin of 6.5%--significantly below
industry average, in our view. S&P forecasts the group's 2020
EBITDA will be in line with this year, due to weak performance and
continuous significant restructuring costs in the first two
quarters 2020.

Debt metrics have also suffered.  S&P expects the group's 2019 FOCF
will be a negative EUR10 million, against EUR28 million in 2018.
This translates in higher leverage than previously anticipated,
with S&P Global Ratings-adjusted debt to EBITDA expected at 16x at
the end of 2019 (including pensions).

S&P said, "We forecast negative FOCF in 2019 and at a neutral level
in 2020.  We expect the company's free cash flow will remain weak
in 2019, given the working capital build-up and substantial
restructuring costs. Nevertheless, VAC plans to reduce the latter
to less than EUR20 million in 2020 from an expected EUR26 million
in 2019. We assume management's restructuring measures will reduce
the fixed-cost base by weaving more automation and IT into the
processes. The group targets to reach SG&A costs around EUR30
million and an EBITDA margin (without restructuring costs) at 20%.
We note that neutral free cash flow for 2020 also depends on a
release of working capital (we assume a EUR10 million outflow in
2019 and breakeven level FOCF in 2020 given the group's expected
restructuring costs).

"Pensions are a significant part of S&P Global Ratings-adjusted
debt. Our assessment of VAC's financial risk profile as highly
leveraged reflects the company's debt amount, incorporating
relative sizable pensions--about 48% of the adjusted debt, which
amounts to around EUR377 million--and our view of the financial
policy risks associated with its continued ownership by Apollo. S&P
Global Ratings-adjusted debt includes mainly about EUR196 million
first-lien term loan maturing in 2025 and about EUR178 million of
pensions. Remainder comprises group's operating lease obligations.
We expect the group's revolving credit facility of EUR28 million,
maturing in 2023, to remain undrawn at the end of 2019.

"The stable outlook reflects our expectation that VAC's adjusted
debt-to-EBITDA ratio will improve after the completion of the
restructuring program, and that both revenue and EBITDA will
increase modestly in 2020. We forecast VAC's FFO interest coverage
will recover to 1.5x but remain below 2.5x over the next two years,
while FOCF will be breakeven in 2020. Our outlook also incorporates
that VAC's next term debt maturities are in March 2025, which gives
the group enough time to complete its restructuring program and
increase profitability.

"We would lower our rating on VAC if weaker-than-expected market
demand or operational issues prolonged negative free cash flow
generation. We would also lower the ratings if the group's
restructuring program does not significantly improve profitability
in the short term, which is fundamental for positive free cash flow
generation, improvement of credit metrics, and capital structure
becoming sustainable again. Furthermore, ratings downside would
materialize, if the group's liquidity becomes constrained or if the
FFO interest coverage ratio falls below 1.5x."

Given the company's debt levels and ownership by a financial
sponsor, it is unlikely that we would consider an upgrade in the
next 12 months. In the longer term, we could raise our ratings on
VAC if management improves profitability and commits to a financial
policy that keeps the company's leverage below 6x and its FFO
interest coverage above 2.5x with positive free cash flow
generation.





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I R E L A N D
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HELIOS NO. 37: S&P Assigns BB- (sf) Rating to Class E Notes
-----------------------------------------------------------
S&P Global Ratings assigned ratings to Helios (European Loan
Conduit No. 37) DAC's class RFN, A, B, C, D, and E notes.

The transaction is backed by a single GBP350 million loan, which
Morgan Stanley Principal Funding Inc. (Morgan Stanley) originated
to facilitate the refinancing of 49 limited service hotel
properties in the U.K. by London and Regional. More specifically,
there are 47 Holiday Inn Express hotels, a Hampton by Hilton hotel,
and a Park Inn hotel.

The issuer will create a GBP18.3 million (representing
approximately 5% of the senior loan and the RFN notes) vertical
risk retention loan interest (VRR loan) in favor of Morgan Stanley
to satisfy EU and U.S. risk retention requirements. The VRR loan
will sit pari passu with and will be paid pro rata to the
securitized senior loan. It will also partially fund the liquidity
reserve.

The market value of the portfolio of hotels is GBP561.1 million
(including an escrowed capital expenditure contribution of GBP14.2
million), which equates to a loan-to-value (LTV) ratio of 62.4%.
The five-year loan will have scheduled amortization. The five-year
loan amortizes by about 3.75% over the term and includes cash trap
and default covenants.

S&P said, "Our ratings address the issuer's ability to meet timely
interest payments and of principal repayment no later than the
legal final maturity in May 2030. Our ratings on the notes reflect
our assessment of the underlying loan's credit, cash flow, and
legal characteristics, and an analysis of the transaction's
counterparty and operational risks."

  Ratings List

  Class    Rating     Amount (mil. GBP)
  RFN      AAA (sf)   15.5
  A        AAA (sf)   139.7
  B        AA (sf)    42.1
  C        A (sf)     42.7
  D        BBB- (sf)  53.1
  E        BB- (sf)   54.9
  X        NR         0.1

  NR--Not rated.


INVESCO EURO III: S&P Assigns B- (sf) Rating to Class F Notes
-------------------------------------------------------------
S&P Global Ratings assigned its credit ratings to Invesco Euro CLO
III DAC's class A, B-1, B-2, C, D, E, and F notes. At closing, the
issuer also issued unrated subordinated notes.

Under the transaction documents, the rated notes pay quarterly
interest unless there is a frequency switch event. Following this,
the notes will switch to semi-annual payment.

The class F notes include a redemption feature under which an
amount equal to 20.0% of any remaining interest proceeds will be
used to redeem the class F notes on a pro rata basis. This amount
is capped at EUR500,000 on the first payment date and the payments
are made under the interest waterfall, after payments of all unpaid
trustee fees and expenses but prior to payments to the subordinated
notes.

The portfolio's reinvestment period will end approximately four and
a half years after closing, and the portfolio's maximum average
maturity date will be eight and a half years after closing.

The ratings assigned to the notes reflect S&P's assessment of:

-- The diversified collateral pool, which consists primarily of
broadly syndicated speculative-grade senior secured term loans and
bonds that are governed by collateral quality tests.

-- The credit enhancement provided through the subordination of
cash flows, excess spread, and overcollateralization.

-- The collateral manager's experienced team, which can affect the
performance of the rated notes through collateral selection,
ongoing portfolio management, and trading.

  Portfolio Benchmarks
                                                    Current
  S&P weighted-average rating factor                  2,528
  Default rate dispersion                               600
  Weighted-average life (years)                        5.56
  Obligor diversity measure                           87.09
  Industry diversity measure                          15.72
  Regional diversity measure                           1.39

  Transaction Key Metrics
                                                    Current
  Total par amount (mil. EUR)                           400
  Defaulted assets (mil. EUR)                             0
  Number of performing obligors                         114
  Portfolio weighted-average rating derived
    from S&P's CDO evaluator                            'B'
  'CCC' category rated assets (%)                         0
  Covenanted 'AAA' weighted-average recovery (%)      37.09
  Covenanted weighted-average spread (%)               3.70
  Covenanted weighted-average coupon (%)               4.50

S&P said, "Our ratings reflect our assessment of the collateral
portfolio's credit quality at closing, which has a weighted-average
rating of 'B'. We consider that the portfolio will be
well-diversified on the effective date, primarily comprising
broadly syndicated speculative-grade senior secured term loans and
senior secured bonds. Therefore, we conducted our credit and cash
flow analysis by applying our criteria for corporate cash flow
collateralized debt obligations.

"In our cash flow analysis, we used the EUR400 million par amount,
the covenanted weighted-average spread of 3.70%, the covenanted
weighted-average coupon of 4.50%, and the covenanted
weighted-average recovery rates for all rating levels. We applied
various cash flow stress scenarios, using four different default
patterns, in conjunction with different interest rate stress
scenarios for each liability rating category.

"We consider that the transaction's documented counterparty
replacement and remedy mechanisms adequately mitigate its exposure
to counterparty risk under our current counterparty criteria

"Following the application of our structured finance sovereign risk
criteria, we consider the transaction's exposure to country risk to
be limited at the assigned ratings, as the exposure to individual
sovereigns does not exceed the diversification thresholds outlined
in our criteria.

"We consider that the transaction's legal structure is bankruptcy
remote, in line with our legal criteria.

"Our credit and cash flow analysis indicates that the available
credit enhancement for the class B to F notes could withstand
stresses commensurate with higher rating levels than those we have
assigned. However, as the CLO is in its reinvestment phase, during
which the transaction's credit risk profile could deteriorate, we
have capped our assigned ratings on the notes. In our view the
portfolio is granular in nature, and well-diversified across
obligors, industries, and asset characteristics when compared to
other CLO transactions we have rated recently. As such, we have not
applied any additional scenario and sensitivity analysis when
assigning ratings on any classes of notes in this transaction.

"Following our analysis of the credit, cash flow, counterparty,
operational, and legal risks, we believe that our ratings are
commensurate with the available credit enhancement for the class A,
B-1, B-2, C, D, E, and F notes."

Invesco Euro CLO III is a European cash flow CLO securitization of
a revolving pool, comprising euro-denominated senior secured loans
and bonds issued mainly by sub-investment grade borrowers. Invesco
European RR L.P. manages the transaction.

  Ratings List
  Class   Rating    Amount    Subordination (%) Interest rate*
                   (mil. EUR)
  A       AAA (sf)  244.000   39.00     Three/six-month EURIBOR
                                         plus 0.92%
  B-1     AA (sf)   38.500    27.50     Three/six-month EURIBOR
                                         plus 1.75%
  B-2     AA (sf)   7.500     27.50     2.20%
  C       A (sf)    26.000    21.00     Three/six-month EURIBOR   

                                         plus 2.60%
  D       BBB (sf)  24.000    15.00     Three/six-month EURIBOR
                                         plus 4.00%
  E       BB- (sf)  20.800    9.80      Three/six-month EURIBOR
                                         plus 6.53%
  F       B- (sf)   12.000    6.80      Three/six-month EURIBOR
                                         plus 8.07%
Subordinated   NR   36.275    N/A       N/A

*The payment frequency switches to semiannual and the index
switches to six-month EURIBOR when a frequency switch event occurs.


EURIBOR--Euro Interbank Offered Rate.

NR--Not rated.

N/A--Not applicable.


LIMERICK FC: New Football Group Formed as Liquidation Looms
-----------------------------------------------------------
Neil O'Riordan at The Irish Sun reports that a new group has been
formed with a view to restoring League of Ireland football to
Limerick.

According to The Irish Sun, Limerick FC is set to be wound up after
a period of examinership failed to produce a rescue plan for the
debt-ridden club.

However, a statement issued on Dec. 23 revealed that a new club to
represent the city in all national leagues bar a men's senior team
could be in place for 2020, The Irish Sun relates.

With ongoing meetings with the FAI described as positive, Limerick
United hope to field sides in the male under-13, under-15, under-17
and under-19 leagues in 2020 as well as in the women's national and
under-17 leagues, The Irish Sun discloses.

In a statement, Limerick United, as cited by The Irish Sun, said it
was working to establish a sustainable professional club with a
view to returning a male senior team to the League of Ireland in
2021.





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I T A L Y
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ATLANTIA: May Face Bankruptcy if Government Concession Revoked
--------------------------------------------------------------
Stefano Bernabei at Reuters reports that a source close to
Atlantia's motorway unit warned on Dec. 23 the company would go
bankrupt if the government revoked its concession without
compensation following the deadly collapse of a bridge last year.

According to Reuters, the source said that the company, Autostrade
per l'Italia (ASPI), would be unable to pay back EUR10.8 billion
(US$12 billion) in debt if it were stripped of its motorway
concession without receiving any indemnity.

The source said that should ASPI default on its debt, this would in
turn hit the ability of Atlantia, which owns 88% of ASPI, to repay
EUR5.3 billion of its own debt, Reuters relates.

Atlantia, which is controlled by the Benetton family, ASPI and
another subsidiary have been under intense scrutiny following the
August 2018 collapse of a motorway bridge in Genoa, which killed 43
people, Reuters notes.



NEXI SPA: S&P Affirms 'BB-' LT Issuer Credit Rating, Outlook Pos.
-----------------------------------------------------------------
S&P Global Ratings said that it affirmed its 'BB-' long-term issuer
credit rating on Italian payment services company Nexi SpA. The
outlook remains positive.

S&P said, "At the same time, we affirmed our 'BB-' issue rating on
Nexi's senior unsecured notes. The recovery rating on the senior
unsecured notes is unchanged at '3', indicating our expectation of
meaningful recovery prospects of 50%-90% (rounded estimate: 55%) in
the event of a default.

"The affirmation reflects our view that Nexi's announced
debt-financed acquisition of the merchant book from Intesa Sanpaolo
SpA (Intesa) for EUR1 billion does not materially change Nexi's
financial risk profile, nor will it have a significant bearing on
Nexi's already dominant position in the Italian payment market.

"We acknowledge that the acquisition involves a large amount of
additional debt, which will add to total debt of EUR1.8 billion
outstanding as of end-September 2019. That said, our revised
forecasts consider the strengthening of Nexi's profitability
metrics in the first nine months of 2019. In addition, we expect
the business that Nexi is acquiring to generate about EUR95 million
of additional EBITDA in 2020, representing roughly 20% of the
EBITDA we forecasted for Nexi in 2019 before the acquisition.

"As a result, we anticipate that Nexi's weighted-average
debt-to-EBITDA ratio will be around 4.7x in 2019-2021. We also
estimate that the funds from operations (FFO)-to-debt ratio will
fall into the 15%-16% range in 2019-2021.

"In calculating Nexi's debt metrics, we still do not deduct cash
from total debt, as we typically do when financial sponsors hold
more than 40% of a company's shares. We are not changing this
approach yet, following Intesa's announcement that it will use part
of the proceeds from the acquisition to buy 9.9% of Nexi's shares
from the private equity owners. This is because we understand that
the private equity sponsors' ownership will remain just above 50%
after the acquisition.

"We do not consider this acquisition as a material deviation from
Nexi's public commitment of lowering its financial leverage over
the next couple of years. We view the acquisition as opportunistic
and note that Nexi already provides processing services to the
merchant book it will buy from Intesa. Consequently, we do not
expect the acquisition to carry execution risks, and believe that
Nexi will be able to easily integrate the merchant book in its
operations.

"We also understand that Intesa will provide marketing and
distribution services on the underlying book until 2044, under a
25-year partnership with Nexi. We take positive note of the fact
that the contracts regulating the issuing and ATM management
services that Nexi provides to Intesa will be extended to have the
same maturity.

"We understand that the new debt will have the same seniority as
the outstanding EUR825 million senior unsecured notes we rate. As
such, we have maintained the recovery rating at '3', indicating our
expectation of meaningful recovery prospects of 50%-90% (rounded
estimate: 55%) in the event of a default.

"The positive outlook reflects the possibility that we could raise
the ratings on Nexi over the next 12 months if we have evidence
that it will demonstrate a conservative financial policy, and will
therefore comfortably maintain a debt-to-EBITDA ratio within the
4x-5x range and an FFO-to-debt ratio above 12%, by our
calculations.

"Conversely, we could revise the outlook to stable if, in our view,
Nexi does not demonstrate a reduced tolerance for debt over the
next 12 months. This might be the case if we anticipated that
Nexi's financial risk profile would deteriorate meaningfully
following another debt-financed acquisition, resulting in our
forecasts of debt to EBITDA and FFO to debt moving closer to 5x and
12%, respectively."




===================
K A Z A K H S T A N
===================

GRAIN INSURANCE: S&P Affirms 'B' ICR, Outlook Remains Stable
-------------------------------------------------------------
S&P Global Ratings affirmed its 'B' insurer financial strength and
issuer credit ratings on Kazakhstan-based Grain Insurance Co. The
outlook is stable.

S&P also affirmed its 'kzBBB-' Kazakhstan national scale rating on
Grain Insurance.

S&P said, "We consider that Grain Insurance's ample capital and
liquidity buffers will sufficiently protect the company against
potential underwriting volatility. This volatility, in our view,
may come from the company's evolving strategy and a recently
introduced crop insurance law that may lead to tighter competition
on the market. Furthermore, the company changed its management team
in the third-quarter 2019 that now involves specialists with
experience in different insurance segments, including crop
insurance and obligatory motor third-party liability (OMTPL)
segments that the company plans to focus on. However, we anticipate
that the company will face challenges next year while developing
business in the highly competitive local market."

Premiums from crop insurance contributed on average more than 70%
of Grain Insurance's overall premiums in 2014-2018. The company
accumulated considerable expertise in this segment, unlike other
local insurers, and therefore became a dominant player in this
market. Since the beginning of 2019, crop insurance regulation has
been changing, provoking a contraction of market premiums by 80%
over the first 10 months of 2019 compared with the same period last
year. The company substituted the drop in crop insurance premiums
with premiums from OMTPL insurance.

Grain Insurance's new strategy involves writing crop insurance next
year, alongside OMTPL insurance and other lines to diversify its
insurance portfolio. S&P expects more players will enter the crop
insurance segment on the back of the revised regulation, and this
will likely increase competitive pressure for Grain Insurance.
However, S&P believes that the company's crop insurance business
will be supported by premiums received from companies related to
its shareholder, which owns several large grain production farms in
Kazakhstan and the company's expertise in crop insurance segment.

S&P siad, "We note that the increasing regulations on the use of
advanced digital technologies both in crop insurance and OMTPL
segments may require Grain Insurance to invest further in
infrastructure. In our view, this, combined with constraints from
the intense competitive pressure on the market, may hinder the
company's technical performance, notably expense ratios, in 2020.

"Under the new regulation, crop insurance for farmers becomes
voluntary versus mandatory previously. However, we expect that the
demand for crop insurance will remain healthy, because the
insurance will be required for farmers who request government
support and those seeking bank loans. Simultaneously, insurance
prices will increase materially, as will claim payments. In
addition, insurance procedures will become more digitalized,
including online sales and the use of satellite imaging in the
claim settlement process.

"We believe that the company's material capital buffers will
adequately protect it from potential pressure on technical
profitability. As of Nov. 1, 2019, the company's solvency ratio was
3.29x the regulatory minimum. The company demonstrated significant
capital redundancy at the 'AAA' level under our capital model at
end-2018, and we expect this will continue next year. We note,
however, that the absolute size of the company's capital is small
in an international comparison. This makes the company more
vulnerable to the risk of earnings volatility than larger peers. On
Nov. 1, 2019, the company's total adjusted capital equaled
Kazaksthani tenge (KZT) 4.4 billion (approximately $11.8 million).

"We consider Grain Insurance's weighted-average credit quality of
its investments at our 'BB' level as of Nov. 1, 2019. However, we
positively view the company' plans to diversify its investment
portfolio in 2020. The company is considering reallocating some of
its investments from local banks with relatively low credit quality
to investment-grade local sovereign bonds. In our view, this could
benefit the average credit quality of the investment portfolio
while potentially resulting in higher investment returns as well.

"The stable outlook on Grain Insurance reflects our view that the
company's capitalization won't decline materially even if the
company's technical profitability comes under pressure in the next
12 months. We expect that the company's expenses may increase due
to needed investments to adapt to the updated regulations in
Kazakhstan's crop insurance segment and to build its capabilities
to compete within the OMTPL segment, where competition is intense
on the local market.

"We could lower the ratings on Grain Insurance over the next 12
months if the company experienced further churn in the management
team that jeopardized its strategy implementation, or if it
suffered sizable losses next year while creating a new business
model under the new regulation."

A positive rating action is remote at this stage, given the intense
competition, lack of reinsurance protection, and high exposure to
non-investment grade assets.


LONDON-ALMATY INSURANCE: S&P Assigns 'BB-' LT ICR, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' long-term issuer credit and
financial strength ratings and 'kzA-' national scale rating to
London Almaty Insurance Co. JSC (LA). The outlook is stable on the
global scale ratings.

The ratings are based on S&P's view of LA's competitive standing in
Kazakhstan's corporate insurance market, which is supported by
solid capital adequacy and sufficient reinsurance protection,
supporting its proposition for corporate clients. The ratings are
constrained by the small absolute size of the company, based on
gross premiums written (GPW) and capital, and its limited track
record of positive operating performance maintained in 2018-2019.

With about Kazakhstani tenge (KZT) 9 billion ($23 million) in GPW
expected for 2019, LA will maintain its position among the top-10
largest players in the Kazakhstani P/C insurance market. The
company's current market share, based on GPW, is 2.9% as of Nov. 1,
2019, and S&P expects it to hover close to 2%-3% in the next two
years. In terms of portfolio split, LA focuses on large Kazakhstani
corporate clients, which represent about 70% of its portfolio,
mostly via open tenders.

Established in 1997 as a joint venture, LA has a relatively long
history of operations in Kazakhstan. The current shareholding
structure was established in 2015 when it was sold by BTA Bank to
the holding company--Dostyk leasing. S&P said, "We understand that
Dostyk leasing and ultimately LA is controlled by three Kazakh
businessmen: Temirhan Suleimenov (50%), Erlan Baimuratov (25%), and
Aidarkhan Sarsembaev (25%). We see limited related party
transactions between other business that are owned by the
shareholders (like food production and agriculture) and LA.
Therefore, we expect that LA's business will primarily come from
the open market."

LA's operating performance has been volatile since the new
management team joined in 2015. However, the company managed to
stabilize the combined ratio (loss and expense) at 91.7% in 2018
and about 93% in the first 10 months of 2019 from relatively high
levels of above 100% in 2015-2017. This was primarily due to cost
optimization steps taken by the company. S&P expects that LA will
sustain this performance, with a return on equity of 12%-15% and
annual net income close to KZT1 billion in the next three years.

Capital was redundant at the 'AAA' level as of Jan. 1, 2019, under
our capital model, and it expects this level to be maintained in
the next three years. The company's capital is small in absolute
terms (about $19 million at Sept. 30, 2019) making it vulnerable to
large losses. However, S&P notes that LA has sufficient reinsurance
cover in place. Furthermore, its financial risk profile benefits
from a high regulatory solvency ratio (4.29x on Jan. 1, 2019,
compared with the minimum required level of 1x) and it expects it
to stay above 3x in the next three years.

LA invests in a mix of fixed-income instruments and bank deposits.
S&P notes that the average quality of the investment portfolio
improved to 'BBB-' from 'BB' as of Oct. 1, 2019. S&P believes this
improvement is sustainable, stemming from the reallocation of
investments from lower-rated bank deposits to investment-grade
sovereign or quasi-sovereign fixed income instruments.

S&P said, "We note that LA's has exposure to foreign exchange risk,
like many other Kazakhstani insurers. The overall foreign exchange
position accounts for the majority of total investments, most of
which are in U.S. dollars.

"The stable outlook reflects our expectation that, over the next 12
months, LA will continue expanding rapidly while sustaining
positive underwriting performance and further improving the quality
of its investment portfolio.

S&P could lower ratings in the next 12 months if it sees:

-- LA's competitive position is undermined due to underwriting or
investment losses and earnings volatility.

-- A significant and sustained deterioration in the company's
capital base.

-- A significant and sustained asset-quality deterioration.

S&P views a positive rating action as remote in the next 12 months,
unless the company significantly builds up capital in absolute
terms, while simultaneously improving its competitive standing.




===================
L U X E M B O U R G
===================

KIWI VFS: S&P Ups ICR to 'B+' on Improved Leverage, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating to 'B+' from 'B'
on Luxembourg-based visa application processing company Kiwi VFS
(VFS).

Strong organic growth supports deleveraging on a sustained basis.

The upgrade reflects a sustained improvement in leverage due to a
material increase in EBITDA in 2019. EBITDA growth has brought
leverage to 4.6x in 2019 from 8.0x in 2017, despite debt-funded
acquisitions of more than Swiss franc (CHF) 100 million in 2018.
S&P expects S&P Global Ratings-adjusted leverage of 4x by year-end
2019 driven by increasing EBITDA.

VFS has capitalized on favorable trends in the global travel
market, especially in the emerging markets where VFS has a leading
market share. Furthermore, deleveraging is supported by disciplined
a financial policy. S&P believes that private equity sponsor, EQT,
is unlikely to pursue debt-funded dividends or acquisitions of
material scale in the near term.

Material FOCF generation reflects an improvement in EBITDA.

S&P said, "We expect VFS to generate material positive FOCF of
CHF80 million-CHF100 million in the next 12 months as a result of
better EBITDA. S&P Global Ratings-adjusted EBITDA has increased to
CHF220 million in 2019 from CHF140 million in 2018 (pre-IFRS). This
is supported by an increase in visa applications, growth in
high-margin value-added service business, and the full-year
contribution from acquisitions in 2018.

"The stable outlook reflects our expectation that VFS' adjusted
leverage will remain below 5x, and the company will continue to
generate material positive FOCF.

"We could lower the rating if we no longer believe that adjusted
leverage will remain below 5x. This could result from any dividend
distribution or a material debt-financed acquisition that would
derail the deleveraging that we forecast. Additionally, we could
downgrade the company if it fails to generate material positive
FOCF.

"We view upside to the ratings as unlikely in the near term. We
could, however, consider a higher rating if there is evidence of a
more conservative financial policy in addition to deleveraging
through EBITDA growth. This could occur as a result of debt
repayments or a public commitment from EQT to maintain lower
leverage."


SUMMER (BC) LUX: S&P Assigns 'B' ICR, Outlook Stable
----------------------------------------------------
S&P Global Ratings assigned its 'B' long-term issuer credit rating
to Kantar's parent company, Summer (BC) Lux Consolidator S.C.A.

At the same time, S&P is assigning its 'B' issue rating and '3'
recovery rating to the company's the senior secured term loan
facilities and senior secured notes; and its 'CCC+' issue rating
and '6' recovery rating to the company's senior unsecured notes.

Private equity firm Bain Capital completed the acquisition of a 60%
stake in Kantar from WPP on Dec. 5, 2019.

WPP will retain a 40% minority stake in Kantar, while Bain will
control the company, have the majority on the board of directors,
and drive its financial policy. On the same date, WPP announced it
had delivered entities representing approximately 90% of Kantar's
EBITDA to the new holding structure that will be jointly owned by
Summer (BC) Lux Consolidator S.C.A. (owned by Bain) and entities of
WPP. WPP plans to deliver the remaining entities to Bain Capital by
the end of July 2020.

In October 2019, Kantar and its subsidiaries arranged the financing
of the acquisition including:

-- $230 million senior secured term loan A due in 2024;
-- $350 million senior secured term loan B due in 2026;
-- EUR725 million senior secured term loan B due in 2026;
-- EUR1.0 billion senior secured notes due in 2026;
-- EUR475 million senior unsecured notes due in 2027;
-- A $400 million revolving credit facility (RCF; not rated) is
fully undrawn.

The remaining $915 million of the total consideration was financed
with common equity from WPP and Bain and a shareholder loan from
Bain.

Kantar enjoys a strong market position as the world's third-largest
global data, research, consulting, and analytics company, as well
as a diverse geographic base, business mix, and client base.

Ownership of a broad set of high-quality first-party data creates
barriers to entry for new competitors. At the same time, Kantar
operates in an industry facing structural challenges from reducing
spending on advertising and data research by its largest clients.
There is also increasing demand for more data-driven, real-time
analytics and integrated solutions that requires investment in new
technology. Tough competition from smaller data analytics providers
and technology companies is causing pricing pressure. In this
context, Kantar's profitability is below average compared with that
of peers in the media industry.

S&P believes there are significant uncertainties around the timing
of achieving the group's turnaround and expected cost efficiencies,
and the subsequent reduction in the group's debt-to-EBITDA.

S&P said, "The capital structure is highly leveraged and we expect
an aggressive financial policy from the new private equity owner.
We forecast that, in the two years after the transaction closes
(2020-2021), Kantar's weighted average adjusted debt to EBITDA will
exceed 6.5x, which we view as high compared with that of peers in
the media industry. For 2020, we forecast adjusted debt to EBITDA
will be about 7.0x, reflecting the costs relating to the business'
transformation and restructuring that will weigh on S&P Global
Ratings-adjusted EBITDA. From 2021, we expect leverage could fall
toward 6.0x-6.5x as the company achieves positive organic revenue
growth and planned transformation initiatives. We factor in our
analysis the transaction's transformational nature and the
complexity of carving out and setting up Kantar's operations as a
separate business. We also note the magnitude of the restructuring
that it has undergone in 2018-2019 and will continue implementing
in 2020-2022.

"We view Kantar's business position as weaker than that of WPP and
other advertising agencies that we rate, due to the company's
smaller size, scale, and diversity of its operations, although we
think that emerging markets accounting for 35% of revenue provide
growth potential."

Kantar has lower profitability than the global advertising agency
groups and Nielsen Holdings, the world's largest data and market
research company that benefits from a dominant market position in
media audience measurement in the U.S. However, outside the U.S.,
Kantar has market-leading positions in several countries in Western
Europe and emerging markets, including China, India, and Brazil. It
also has better geographic and business mix diversity than Nielsen.
S&P said, "In our view, Kantar's ownership of large sets of
high-quality first-party data that is protected and compliant with
privacy regulations provides barriers to entry and a competitive
advantage. Recurring subscription-based revenue, mainly in the
Media and Worldpanel businesses, supports our assessment of the
business."

Restructuring is on track, and in the first half of 2019, the
business performed in line with budget, which should allow the
company to stabilize organic revenue growth and gradually improve
the underlying EBITDA generation.

In 2015-2018, Kantar experienced low-to-negative organic revenue
growth due to structural challenges in the global data, research,
and analytics industry. In particular, its Insights business, which
accounts for about 40% of EBITDA, was challenged by some larger
clients, primarily the consumer-packaged goods-producing companies,
reducing spending on advertising and data, research, and analytics
products. Kantar's management started addressing these challenges
in 2018 by launching a business transformation that was part of
WPP's companywide strategic review. It includes optimizing the
business perimeter and workforce, hiring tech-oriented talent, and
investing in new product offerings that are better targeted at
clients' needs for real-time analytics and integrated data
solutions.

Bain Capital plans to implement further transformation
initiatives.

These will mainly relate to optimizing Kantar's workforce,
enhancing automation, investing in new IT systems, and reducing
direct and other costs. Overall, the new owner plans to achieve
$210 million in run-rate synergies (including about $38 million
already on track to be delivered from the ongoing management
actions) with about $240 million associated costs in 2020-2022. In
our view, these measures should allow the company to restore S&P
Global Ratings-adjusted EBITDA margins to about 15% in 2021 and
beyond.

S&P said, "Although we view the transformation initiatives as
largely attainable, they could take longer than planned to
implement, temporarily disrupt the business operations, and require
additional spending.

"However, in the 2019-2020 transitional years, adjusted EBITDA
margin will remain subdued, at 13%-14%. This is because we include
all restructuring costs in our calculation of adjusted EBITDA, but
don't give full benefit for the transformation initiatives that the
management plans to achieve.

"The stable outlook reflects our expectation that, in 2019-2020,
Kantar's restructuring and business transformation will allow it to
stabilize organic revenue growth and gradually improve underlying
profitability, despite continued challenging conditions in the
data, research, and analytics market. At the same time, the
restructuring costs associated with the planned transformation
initiatives will weigh on S&P Global Ratings-adjusted EBITDA and
leverage metrics in 2020. We assumes that, in 2020-2021, the
group's S&P Global Ratings-adjusted average debt-to-EBITDA will be
6.5x-6.7x and free operating cash flow (FOCF)-to-debt will be about
4.5%.

"We could raise the rating if Kantar's operating performance
stabilized; and the group improved profitability by achieving the
planned transformation initiatives, such that adjusted leverage
reduced to comfortably less than 6.5x, and maintained sustainable
FOCF to debt above 5%.

"In our view, Kantar has comfortable headroom under the 'B' rating
and a downgrade is unlikely over the next 12 months. We could lower
the rating if the company's operating performance was substantially
weaker than we forecast due to a structural decline in its key
markets and a weakening EBITDA margin. The group being unable to
generate positive FOCF would also put pressure on the rating."




=====================
N E T H E R L A N D S
=====================

HEMA BV: S&P Downgrades ICR to 'CCC' on Rising Refinancing Risks
----------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit and issue
ratings on Dutch retailer Hema B.V. and its senior secured notes to
'CCC' from 'B-', its ratings on the super senior secured revolving
credit facility (RCF) to 'B-' from 'B+', and its ratings on the
senior unsecured notes to 'CC' from 'CCC'.

S&P sees increasing refinancing risk and the possibility of a
distressed restructuring, due to still-weak cash generation under
the current capital structure and bond trading.

Hema is in a transformative phase to establish a more asset-light
business model. The company is fighting elevated levels of leverage
and reported still somewhat negative FOCF during the first nine
month of fiscal 2019/2020 (ending Feb. 2. 2020). In S&P's view, the
strategic initiatives planned, including the newly announced
partnership with the Dutch food retailer Jumbo and the earlier
announced partnerships with Franprix and Walmart, will not result
in material improvements in earnings and FOCF generation in due
course. Since the RCF will mature in two years and the PIK
instrument in mid-year 2020, S&P sees increasing refinancing
risks.

During an analyst call, management announced that the EUR50 million
outstanding PIK notes, including accrued interest as of Nov. 3.
2019, will be redeemed next year.

S&P said, "We previously expected a full repayment already this
year through contributions from the shareholder. In light of that
and the recent trading of bonds well below par, we believe that
there is an economic incentive to refinance the capital structure,
or at least parts of it, at below par, or to repurchase bonds in
the open market, which we may see as distressed. Although we are
not aware of such plans from management or the shareholder, we see
increasing risks for a distressed exchange over the next 12 months.
This is given our expectation of still somewhat negative FOCF next
year amid challenging market conditions in the Western European
nonfood retail markets, with generally decreasing footfall in
shops, resulting in an unsustainable capital structure, in our
view."

There are improvements in the underlying business, but strategic
initiatives planned with little track record bear execution risk.

S&P said, "We note that the company has reported increasing
earnings, with reported EBITDA pre International Financial
Reporting Standards (IFRS) 16 increasing to EUR65 million in the
first nine months of the year, compared with EUR61 million in
fiscal 2018/2019. This is in line with our earlier expectations and
was supported by strong autumn trading and contributions from
Hema's online business. At the same time, FOCF after lease-related
payments was still somewhat negative, which we also expect for the
full fiscal year and next year. Hema plans to achieve earnings
growth by increasing wholesale sales through partnerships with
other retailers, online platforms, and franchisees. However, the
company has little track record under this new strategy, and we
expect a certain amount of execution risk associated with it. We
acknowledge the potential growth through the wholesale cooperation
with large retailers, such as Franprix, Jumbo, and Walmart, if the
roll-out of Hema-branded products proves successful and expands as
management anticipates. Hema's brand recognition is high in the
Netherlands and neighboring countries in Western Europe, but brand
acceptance in North America is unproven and adds to execution risk
for a larger roll-out there. Moreover, further exploration of this
growth potential and the increasing share of online sales could
result in additional costs to build logistical capabilities that
could weigh on margins and cash flows, in our view.

"Currently elevated leverage levels are expected to moderate, while
the expected negative effect on metrics from IFRS16 does not weaken
our view of the company's underlying creditworthiness.

"We estimate that Hema will achieve 7.0-7.5x debt to EBITDA in
fiscal 2019 (or 7.5x-8.0x after adjusting for the implementation of
IFRS16). Although the new accounting standard will result in about
EUR930 million in additional lease liabilities, compared with only
EUR774 million in our previous adjustment for operating leases for
fiscal 2018, this has no effect on Hema's underlying
creditworthiness. In light of this, we regard EBITDAR coverage
(calculated as adjusted EBITDA divided by cash interest plus rents)
as a better indication, since it is less affected by the accounting
change. Our expected EBITDAR coverage of 1.25x-1.30x in fiscal 2019
is low compared with companies that we rate at the same highly
leveraged financial risk assessment. We note that this constitutes
a moderate improvement compared with the credit metrics for fiscal
2018 (ending Jan. 31, 2019), with S&P Global Ratings-adjusted debt
to EBITDA of over 8.0x, EBITDAR interest plus rent coverage of
1.2x, and materially negative reported FOCF." The latter was driven
by extraordinary working capital outflows, one-off costs, and
adverse weather conditions in second- and third-quarter 2018.

The outlook is negative because Hema's currently elevated levels of
financial leverage and negative FOCF generation in a challenging
European retail trading environment will make it difficult to
refinance upcoming maturities in the capital structure. The company
has yet to address the refinancing of the PIK instrument maturing
in June 2020, and S&P sees an increasing likelihood of a distressed
exchange offer.

S&P said, "We could lower the ratings in the next 12 months if we
viewed Hema as unlikely to refinance its maturing PIK instrument in
accordance with indentures before maturity, or if it were to launch
a restructuring transaction we considered distressed. This could
include a voluntary tender offer or buying back portions of its
bonds in the open market at below par.

"Over the next six-to-12 months, we could revise the outlook to
stable if we saw a distressed restructuring as becoming unlikely,
which would hinge on a timely repayment of the maturing PIK
instrument according to indentures." Any further upside would also
require a timely and orderly resolution of the refinancing risk of
the rest of capital structure maturing 2022-2023, including
sustainable improvements in operating performance and cash
generation.




===========
N O R W A Y
===========

NAVICO GROUP: S&P Downgrades ICR to 'CCC' on Liquidity Concerns
---------------------------------------------------------------
S&P Global Ratings lowered to 'CCC' from 'CCC+' its long-term
issuer credit rating on Norwegian marine electronics producer
Navico Group AS and its issue rating on its first-lien term loan.

Navico's liquidity deteriorated further after it had a
higher-than-expected cash burn.

S&P said, "We forecast that Navico's liquidity sources over uses
will be less than 0.6x in the next 12 months, compared with our
previous forecast of less than 1x. FOCF is more negative, at EUR15
million in 2019 and 2020 in our current forecast than the negative
EUR3 million we previously forecast for 2020. Given that Navico's
revolving credit facility (RCF) is almost fully drawn and its cash
balance stood at EUR6.6 million at the end of September 2019, we
think Navico could default in 2020, unless it receives additional
liquidity or materially cuts its planned capital expenditure
(capex). We understand that Navico is currently in discussion with
lenders for additional funding to somewhat ease the liquidity
pressure."

Top line is still under pressure.

S&P said, "Navico is a small player in the fragmented commercial
marine market. It faces fierce competition and we now expect
revenue to decline by 6%-7% in 2019, compared with our previous
estimate of a 1% decline. Navico had planned to launch new products
in December 2019 and the first half of 2020; we do not anticipate
that this will enable it to reverse its revenue decline until at
least 2021. Navico has initiated several cost reduction initiatives
to reduce its operating expenses and capex until 2021. However,
given that it expects to rely on new products to return to growth
and its capex is mainly capitalized research and development (R&D)
spending, we do not expect it to achieve a material reduction. As a
result, we forecast S&P Global Ratings-adjusted EBITDA in 2019 of
EUR11 million and around EUR15 million in 2020 (this is after
deducting capitalized R&D) and negative FOCF until 2021."

The negative outlook indicates that Navico's liquidity and revenue
will remain under pressure for the next few quarters.

S&P said, "Although Navico has no significant debt maturity before
2023, we could lower the rating if it fails to secure additional
liquidity by the beginning of 2020. We could also lower the rating
if its operating performance weakens further, so that revenue and
margin decline is more pronounced, or if the company further delays
its new product launch, or the new products are not as well
received in the market as expected.

"We could revise the outlook to stable if Navico's liquidity
coverage ratio improves to about 1x and the operating performance
shows more stable revenue and EBITDA, driven by stronger uptake of
new product releases."


REC SILICON: Receives NOK150-Mil. Claim from Nordea
---------------------------------------------------
Stephen Treloar at Bloomberg News reports that REC Silicon received
a claim of NOK150 million from Nordea under the indemnification
loan.

According to the Bloomberg, the company says relevant bankruptcy
estates haven't yet been concluded and the amount of loss suffered
by Nordea as a result of the bankruptcy may therefore not be
calculated at this time.

Nordea's current claim is based on an assumption that its loss will
exceed said amount when the estates are concluded, Bloomberg
relays, citing the claim letter from Nordea.

REC will consider the claim and its basis, and revert with further
information when it has reached its conclusions, Bloomberg
discloses.

REC Silicon is a Norway-based polysilicon and silicon gas supplier.



===========
R U S S I A
===========

LENINGRAD OBLAST: S&P Affirms BB+' Long-Term ICR, Outlook Stable
----------------------------------------------------------------
On Dec. 20, 2019, S&P Global Ratings affirmed its 'BB+' long-term
issuer credit rating on Leningrad Oblast. The outlook is stable.

Outlook

The outlook on Leningrad Oblast is stable because S&P expects that
the region will maintain strong liquidity and very low debt, thanks
to high operating balances and the use of cash to cover deficits
through 2021.

Downside scenario

S&P could lower the rating if the oblast's budgetary performance
and liquidity weakened as a result of a pronounced reduction in tax
revenue or a looser spending policy at the regional level.

Upside scenario

S&P could raise the rating if stronger revenue and expenditure
management enabled the oblast to structurally post strong budgetary
performance, while keeping its very favorable liquidity position.

Rationale

Leningrad Oblast's high cash reserves and very low--and
decreasing--debt underpin the rating. The region demonstrates solid
budgetary indicators, supported by management's prudent financial
approach. At the same time, S&P's assessment is constrained by
Russia's volatile and unbalanced institutional framework, which
limits the predictability of planning at the regional level.

Prudent management practices in a centralized system

Like other Russian local and regional governments (LRGs), Leningrad
Oblast operates in a volatile and unpredictable institutional
setting with frequent changes to tax mechanisms affecting regions.
The oblast's budgetary performance is greatly affected by the
federal government's decisions regarding key revenue sources and
expenditure responsibilities, which constrain the predictability of
its financial policy.

S&P said, "We believe that Leningrad Oblast benefits from an
experienced financial team, which is able to balance its accounts
in case of a revenue shortfall by implementing tight expenditure
measures. Management is committed to keeping budgetary performance
under control and we believe that the pressure from the
presidential decrees of May 2018 will result in only modest
deficits. At the same time, similar to most Russian LRGs, Leningrad
Oblast lacks reliable long-term financial planning and, in our
view, its management of government-related entities (GREs) remains
weaker than that of international peers.

"We believe that Russia's low wealth level (with a national GDP per
capita at US$11,440 in 2019) and limited growth prospects put
pressure on the oblast's economy. Therefore, we project that the
region's economy will expand at the same rate as the
sovereign--about 1.6% annually on average--over the next three
years. We project its gross regional product per capita will remain
low and reach US$9,500 by 2022." At the same time, Leningrad Oblast
enjoys a favorable geographic location, surrounding the City of St.
Petersburg and on transit routes to the EU. Its economy is
relatively diversified and benefits from a continuing inflow of
investment into transport and energy infrastructure, as well as
into the manufacturing sector.

Solid operating surpluses will persist, and the debt burden will
remain very low

S&P said, "We believe that Leningrad Oblast will balance its budget
efficiently, with sound operating surpluses and modest overall
deficits in the coming three years. We expect that operating
margins will slightly weaken in 2019-2021, following lower revenue
growth from a high base and a moderate uptick in social expenditure
before the governor elections scheduled for 2020. Tax revenue is
likely to remain volatile, owing to the linkage of the oblast's key
revenue source--corporate profit tax--with the cyclical oil
industry. At the same time, we believe that other revenue sources,
such as property tax and personal income tax, will support the
region's revenue. In addition, the oblast will benefit from federal
transfers for the realization of national projects, which
contribute about 10% of the oblast's revenue. We anticipate that
extension of the capital program, following presidential decrees,
will likely lead to modest deficits after capital accounts of about
1%-2% of total revenue in 2019-2021.

"We believe the region will rely on cash to finance its projected
deficits and refrain from commercial borrowing in the medium term.
The region's direct debt is minor and mainly consists of
restructured budget loans with a tiny share of maturing bonds.
Apart from direct debt, we include in our total debt calculation
the debt of non-self-supporting GREs, together with guaranteed
liabilities of the region's owned companies. The expected new
guarantee that the oblast will provide in 2020 to its housing
corporation won't lead to a material debt increase. We believe that
the oblast will maintain very low debt, at less than 5% of
consolidated operating revenue through year-end 2021.

"We do not expect significant contingent liabilities arising from
GREs, thanks to the region's low involvement in the local economy.
We estimate support to GREs will not exceed 2% of total revenue,
and we believe that the municipal sector is relatively healthy
financially. As a result, we don't expect any significant
extraordinary support to be required from the budget to prop up
GREs and municipalities in the coming years.

"In our view, modest deficits and a solid cash cushion will allow
Leningrad Oblast to comfortably cover its annual debt service needs
over the next 12 months, despite the projected partial depletion of
reserves. The region enjoys a smooth repayment schedule, with
evenly spread minor maturities. We believe that accumulated cash
buffers will enable the region to withstand potential pressures
from the implementation of national projects and act as a buffer in
the event of limited market access. We believe the domestic capital
market displays some weaknesses, which we reflect in the banking
sector's placement in BIRCA group 8.

  Ratings List

  Ratings Affirmed
  Leningrad Oblast

   Issuer Credit Rating    BB+/Stable/--


MAGNIT PJSC: S&P Affirms 'BB' Issuer Credit Rating, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings affirmed its 'BB' long-term issuer credit rating
on Russian food retailer Magnit PJSC.

The rating affirmation reflects S&P's view that Magnit's operating
performance and profitability will recover in 2020.

S&P said, "Although we expect Magnit's profitability will decline
in 2019, we think the group will be able to recover its earnings
from 2020 and start increasing its reported EBITDA in absolute
terms. This is because we expect some recovery in the gross margin
in the absence of the sale of old inventory in 2020. Magnit sold
the majority of it in Q3 2019 and it has now a relatively
manageable level of remaining inventory that it will gradually
reduce. We also understand that Magnit has insured its property, so
the group will receive reimbursements for any damages. Therefore,
losses such as those that the group incurred following a fire at
one of its distribution centers in 2019 are unlikely to repeat. The
absence of these one-off impacts, combined with Magnit's efforts
regarding operating efficiency and cost control, will support the
recovery of the EBITDA margin to about 7.0% in 2020, albeit not to
7.5% as we expected in our January 2019 base case. The current
rating incorporates our expectation that Magnit's operations will
remain cash generative and we expect the group to generate
positive, albeit lower than previously anticipated, free operating
cash flow (FOCF) in 2019-2021.

"Rating headroom has declined due to the anticipated increase in
S&P Global Ratings-adjusted leverage and weakening of cash flow
metrics in 2019-2021 versus our January 2019 base case.

"The reduction of headroom under the current rating reflects our
expectation that adjusted debt to EBITDA will increase to 3.3x-3.5x
in 2019 from 3.0x in 2018. This is higher than the 2.7x-2.9x we
forecasted in our January 2019 base case. In addition to the lower
EBITDA base, we also expect Magnit's financial debt will increase
because its FOCF will be not enough to cover its dividend payments
in the forecast period and the group will take on some additional
debt. We calculate that adjusted funds from operations to debt will
decline to 22%-24% in 2019-2021 on lower earnings and higher debt
expectations.This is lower than the 25.7% reported in 2018 and the
24%-26% we expected in our January 2019 base case. We note that
there is almost no room for further underperformance because any
further deterioration of earnings generation in 2020-2021--although
not in our base case--would cause FFO to debt to decline to 20%,
our threshold for a downgrade."

Transformation of the group is ongoing with some downside risks
related to execution.

Magnit continues to restructure and transform its business to
position it for sustainable growth and regain market share. S&P
said, "Although not in our base case, we cannot completely rule out
execution risks of the transformation process. This would put
pressure on the rating on Magnit. In 2019, the group slowed down
its store openings and accelerated redesigns of existing stores to
2,300 for the full year, up from management's previous guidance of
2,000. This will require sizable capex and suppress cash flows in
the short term. That said, we think that refurbishments will
improve the performance of the existing base, making it more
attractive for customers. As of end of Q3 2019, refurbished and new
stores represented 67% of all Magnit's convenience stores, the
group's largest format by the number of stores and sales. Over the
past 12 months, Magnit's like-for-like (LFL) sales growth has
fluctuated, turning negative in Q3 2019--stemming from sales
cannibalization following the sale of inventory--after three
quarters of positive performance. That said, we think Magnit's
efforts to drive up an average ticket price--providing an appealing
product offering that addresses customers' needs of affordability
and quality across all formats--as well as increased footfall
thanks to the renovations, will support LFL sales growth and market
share."

Magnit will continue to operate in a competitive food retail market
limiting significant upside in profitability margins.

Competition in the Russian food retail market has remained stiff.
This has included further growth of hard discounters such as
Svetofor, niche players such as Vkusvill, and federal chains.
Magnit's main competitor, X5 Retail (BB/Stable/--) posted stronger
revenue growth of about 14% in Q1 2019-Q3 2019 (versus the same
period in 2018) despite decelerated openings. This revenue growth
reflected the sound performance of X5 Retail's existing store base,
with positive LFL sales growth during 2019. S&P said, "Therefore,
we think Magnit will continue to invest in prices in order to
remain competitive in the market. Our updated profitability
expectation reflects that the group will reinvest a part of the
gross margin gains into prices, given the competitive pressure in
the market."

Magnit's creditworthiness benefits from its strong position in the
Russian food retail market, large scale, and format diversity.

S&P said, "Our rating on Magnit reflects its market position as
Russia's second-largest retailer in terms of revenue and the
country's largest network of discount grocery stores, supermarkets,
and cosmetics shops. Despite anticipated decline in earnings in
2019, we note that Magnit's profitability--as measured by EBITDA
margins--remains higher than that of most food retailers in EMEA.
The margins benefit from the group's large scale of operations in
Russia and resulting bargaining power with suppliers, above-average
share of private labels in its product mix for the Russian market
(about 8% for Magnit), own production, and sound share of directly
imported products in the cost base.

"The stable outlook reflects our view that Magnit will keep its
strong position in the Russian grocery market amid soft demand and
a highly competitive trading environment. We expect Magnit to
restore its profitability in 2020 due to continued execution of the
group's strategic initiatives, which should improve its LFL sales
growth, recover the gross margin, and improve operating efficiency.
This should in turn restore reported EBITDA margins to close to
7.0% in 2020 from an expected 6.5% in 2019. The stable outlook also
incorporates our view of FFO to debt of 22%-24% and positive
reported FOCF (after all lease payments) and our expectation of
adequate liquidity.

"We would consider a negative rating action in the next 12 months
if weak execution of management's strategic initiatives and
continuing challenging trading conditions resulted in meaningful
deterioration of Magnit's operating performance, credit metrics, or
liquidity. In such a scenario, management would be unable to turn
around performance of its stores such that reported EBITDA stays
below 7%. In the absence of tangible financial policy measures to
reduce debt under such conditions, adjusted FFO to debt would
likely approach 20% and already weak discretionary cash flow to
debt would further erode. A negative rating action could also
result from deterioration of Magnit's liquidity stemming from the
group's inability to access its bank facilities, proactively
refinance short-term debt maturities, or implement a prudent
financial policy balancing cash generation with capex investments
and dividends.

"We think ratings upside is remote over the next 12 months because
our base case already incorporates an improvement in profitability
margins and cash flows generation. We expect investments in new
openings, redesign of stores, and strategic projects will absorb
most of Magnit's cash flow from operations. However, we could
consider a positive rating action if, on the back of economic
recovery in Russia, Magnit achieved strong LFL sales growth,
leading to improvement in its profitability, in turn causing the
group's adjusted FFO-to-debt ratio to strengthen above 30%. An
upgrade would hinge on Magnit moderating its capital spending and
shareholder payments, while also posting sustainable and positive
discretionary cash flow. The company would also need to sustain its
adequate liquidity through advanced refinancing of its upcoming
debt maturities, while demonstrating a track record of prudent
financial policy."




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

UCI 16: S&P Affirms D (sf) Rating on Class E Notes
--------------------------------------------------
S&P Global Ratings took various credit rating actions on Fondo de
Titulizacion de Activos UCI 16's and Fondo de Titulizacion de
Activos UCI 17's classes of notes.

S&P said, "The rating actions follow the application of our
relevant criteria and our full analysis of the most recent
transaction information that we have received, and they reflect the
transactions' current structural features. We have also corrected
how we assess the bridge loans present in the pools, which, due to
an error, were not correctly taken into account in our June 2018
analyses. Our corrected view of the credit quality of the assets
does not have an impact on the rating actions. The main rating
drivers are the increase in credit enhancement, the sensitivity of
the defaulted loans to different recovery scenarios, and our
reassessment of commingling risk in these transactions.

"The counterparty risk in these transactions is related to the
guaranteed investment contract (GIC) account, which is provided by
Banco Santander S.A. (A/Stable/A-1) in both transactions. The
replacement language in these transactions' GIC account agreements
is in line with our current counterparty criteria. UCI 17 also has
a basis swap provided by BNP Paribas. The remedial actions for this
swap are in line with our counterparty criteria collateral adequate
assessment and therefore, the maximum potential rating UCI 17's
notes can achieve is 'AA+ (sf)'.

"Following the application of our criteria, we have determined that
our assigned ratings on the classes of notes should be the lower of
(i) the rating as capped by our sovereign risk criteria; (ii) the
rating as capped by our counterparty criteria; and (iii) the rating
that the class of notes can attain under our European residential
loans criteria.

The UCI pools comprise mortgage loans granted to individuals solely
for the acquisition of residential properties. The pools include
bridge loans (currently 5.5% of the UCI 16 pool and 9% of the UCI
17 pool). Bridge loans are loans granted to individuals who, when
purchasing a new home, have yet to sell their previous one. Both
properties back the bridge loan. Due to an error in S&P's 2018
review, it did not take into account certain aspects of these loans
in its credit analysis, and as a result, its weighted-average
foreclosure frequency (WAFF) and weighted-average loss severity
(WALS) figures were impacted.

  UCI 16

  WAFF And WALS Analysis
  Rating level    WAFF (%)   WALS (%)
  AAA             40.03      42.21
  AA              31.19      36.11
  A               24.68      27.09
  BBB             18.76      22.25
  BB              14.26      19.00
  B               10.63      16.15

The class A2, B, C, and D notes' credit enhancement is 21.7%,
9.49%, 2.46%, and 0.93%, respectively. The class E notes were
issued at closing to fund the reserve fund. The reserve fund
started to be replenished on the December 2018 payment date after
being fully depleted since 2010, and is at 88% of its reinterpreted
required level. On the June 2019 payment date, following the fund
managers' reinterpretation of the reserve fund amortization
conditions, the reserve fund started amortizing to its required
level at 2.2% of the outstanding notes' balance, with a floor of
0.8% of the original balance, given the level of arrears over 90
days.

S&P said, "Our credit and cash flow results indicate that our
ratings on the class A2 and B notes could withstand our stresses at
higher rating levels than those currently assigned. However, our
ratings are constrained by these classes' sensitivity to the level
of potential incoming recoveries and the reserve fund's recent
replenishment. We have therefore raised to 'BBB+ (sf)' from 'BBB
(sf)' our rating on the class A2 notes and affirmed at 'B (sf)' our
rating on the class B notes. We expect to see more stable credit
enhancement in the future."

"Credit enhancement has increased for the class C and D notes (to
2.46% and 0.93%, respectively). Liquidity has also improved since
our last review, however the reserve fund is not at its required
level. These classes of notes are failing our cash flow 'B'
stresses due to both interest shortfalls and principal failures. We
consider these two classes of notes to still be vulnerable to
nonpayment and to be dependent upon favorable business, financial,
or economic conditions to meet their financial commitments. We have
therefore raised to 'CCC+ (sf)' and 'CCC (sf)' our ratings on the
class C and D notes. At the same time, we have affirmed our 'D
(sf)' rating on the class E notes, as this class of notes continues
to default."

  UCI 17

  WAFF And WALS Analysis
  Rating level   WAFF (%)   WALS (%)
  AAA            36.58      42.21
  AA             29.00      36.11
  A              23.37      27.09
  BBB            17.99      22.25
  BB             14.16      19.00
  B              10.95      16.15

The class A2, B, and C notes' credit enhancement is 15.3%, 1.35%,
and -4.01%, respectively. The reserve fund has been fully depleted
since 2010.

S&P said, "Our credit and cash flow results indicate that our
rating on the class A2 notes could withstand our stresses at higher
rating levels than the level currently assigned. However, our
rating is constrained by this tranche's sensitivity to the level of
potential incoming recoveries. We have therefore raised to 'BBB
(sf)' from 'BB+ (sf)' our rating on this class of notes.

"The 1.35% available credit enhancement for the class B notes
compares negatively with our expected loss of 2.06% at the 'B'
rating category. In addition, the reserve fund has been fully
depleted since 2010. In our view, this means the payment of this
class of notes is dependent upon favorable business, financial, or
economic conditions and is commensurate with our currently assigned
rating. We have therefore affirmed our 'CCC (sf)' rating on this
class of notes.

Due to its reversible interest deferral trigger being breached, the
class C notes have been defaulting since 2010 until the March 2019
payment date when, due to incoming recoveries, all interest amounts
due under this class of notes were paid and since then, timely
interest has been paid. Given that it is difficult to predict
recoveries given the historical performance and level of defaults
the securitized portfolio has experienced, interest payments may
depend on excess spread. S&P said, "Consequently, we have affirmed
our 'D (sf)' rating on the class C notes. We expect to see more
stability on interest payments before upgrading this tranche. We
have also affirmed our 'D (sf)' rating on the class D notes, as
this class of notes continues to default."

UCI 16 and 17 are Spanish RMBS transactions that closed in October
2006 and May 2007, respectively. These transactions securitize
portfolios of residential mortgage loans, which Union de Creditos
Inmobiliarios, Establecimiento Financiero de Credito originated and
services.

  Ratings List

  UCI 16, Fondo de Titulizacion de Activos

  Class   Rating to   Rating from
  A2      BBB+ (sf)   BBB (sf)
  B       B (sf)      B (sf)
  C       CCC+ (sf)   CCC (sf)
  D       CCC (sf)    CCC- (sf)
  E       D (sf)      D (sf)

  UCI 17, Fondo de Titulizacion de Activos

  A2      BBB (sf)    BB+ (sf)
  B       CCC (sf)    CCC (sf)
  C       D (sf)      D (sf)
  D       D (sf)      D (sf)




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

UPC HOLDING: S&P Affirms BB- Issuer Credit Rating, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'BB-' issuer credit rating on UPC
Holding B.V., its 'BB' rating on its senior secured debt, and its
'B' rating on its unsecured debt.

The end of the merger discussions with Sunrise eliminates
short-term upside to the rating.

On Dec. 16, 2019, Liberty Global announced that it had terminated
discussions regarding the merger of UPC Switzerland and Sunrise
Communications. The UPC CreditWatch placement had incorporated
upside associated with a prospective improvement in credit quality.
The acquisition by Sunrise would have brought UPC into a group with
a much more conservative balance sheet position.

Recent sale attempt suggests that UPC's strategic importance to the
group has reduced.

S&P said, "In our view, although UPC will continue to play a
strategic role while it is owned by Liberty Global, it is no longer
a core group entity. By contrast, we see sister company Virgin
Media, for example, as core to the group's long-term strategy and
as highly unlikely to be sold. That said, the group will continue
to run and support UPC and therefore we still view UPC as a
strategically important subsidiary. As a result, we assume that
Liberty Global will support UPC in reducing its debt, as it did in
2019 after the sale of assets to Vodafone."

Sale of assets to Vodafone increased UPC's concentration in
Switzerland, but it still benefits from a solid position in the
Swiss market and early signs of stabilization look positive.

S&P said, "Our view of UPC's scale and geographic diversity has
been somewhat weakened by its sale of assets in Central and Eastern
European markets. This followed an earlier sale of UPC Austria. We
now expect the group to generate over 70% of its revenue in
Switzerland. Nevertheless, our view of UPC's business risk is
supported by its solid market position in Switzerland, where it
offers superior Gigabit speed broadband across about two-thirds of
the country, and has a competitive content proposition that
includes premium sport.

"Despite fierce competition in the Swiss market, especially for
premium convergent offers, we expect UPC Switzerland to see a
gradual recovery as it upsells broadband, stabilizes its video base
with the horizon set top box, and increases its share of mobile
customers through its more cost-efficient mobile virtual network
operator (MVNO) agreement with Swisscom.

"Stand-alone credit quality is unchanged as we expect potential
remaining revenue pressures to be more than offset by debt
reduction.

"Adjusted leverage is forecast to be about 5x in 2019 and to
decline further in 2020. Reported OCF (an internal measure roughly
equivalent to EBITDA before related party fees) is forecast to
decline by 4% to 5% during 2019 because of pressure in Switzerland.
In our base case for 2020 it will decline by 1%-3%. That said, this
is more than offset by the recent repayment of credit facilities;
we assume that vendor financing facilities will continue to
contract, in line with the company's strategy, following recent
asset sales.

"The stable outlook indicates that we expect adjusted leverage of
5x or below could be maintained if the Swiss operations gradually
stabilize and debt is reduced."

S&P could lower its rating on UPC as a result of a combination of
the following factors:

-- Continued customer losses in Switzerland reduce the OCF margin
below 50%;

-- Debt to EBITDA is sustainably above 5x;

-- Free operating cash flow is lower than EUR100 million in 2020;
and

-- Although unlikely at this stage, given S&P's stable outlook on
Liberty Global, it could also lower the rating following a
downgrade of Liberty Global.

S&P sees limited rating upside as long as UPC is controlled by
Liberty Global. S&P could revise the SACP up if UPC reduces its
leverage toward 4x and generates free cash flow to debt of more
than 8%. This would likely occur because of lower related
party-fees, recovery of OCF in Switzerland, and further debt
reduction through shareholder loans.




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

COVENTRY & RUGBY: S&P Affirms 'BB+' Bond Rating, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings affirmed its 'BB+' S&P Underlying Rating (SPUR)
on the GBP407.2 million bonds issued by Coventry & Rugby Hospital
Co. PLC (CRH). At the same time, S&P revised its recovery rating on
the bonds upward to '2' from '3' to reflect higher liquidity
following the formalization of the RUR.

Coventry & Rugby Hospital Co. PLC (CRH or ProjectCo) is a
special-purpose company wholly owned by Innisfree PFI Continuation
Fund LP, which issued GBP407.2 million senior secured bonds to
finance the design, construction, equipping, and maintenance of a
number of health care facilities at Walsgrave, near Coventry in
central England under a 40-year private finance initiative (PFI)
agreement with University Hospitals Coventry and Warwickshire
National Health Service Trust and Coventry Teaching Primary Care
Trust. The latter's obligation has since been transferred to the
Coventry and Warwickshire Partnership Trust. The trusts' liability
is several, rather than joint.

The facilities include a 1,212-bed acute hospital, a 130-bed mental
health unit, and a clinical sciences building. Construction works
were undertaken by Skanska Coventry JV (SCJV)--an unincorporated
joint venture between Skanska Construction Ltd. and Skanska
Rashleigh Weatherfoil--and were certified complete on April 7,
2008.

The hard facilities maintenance (FM) services were previously
provided by Skanska Facilities Services from Dec. 1, 2011, but are
now being provided by Vinci Facilities Ltd. (Vinci). They include
planned and reactive maintenance, general estates management,
lifecycle obligations, and IT infrastructure management.

ISS Mediclean (ISS) is providing soft FM services, which include
cleaning, catering, laundry, portering, transport, waste
management, car parking, domestic services, telecoms, and
switchboard operations.

GE Medical Ltd. (GE) is responsible for supplying and maintaining
the medical equipment.

Strengths

-- The senior debt is subject to an unconditional and irrevocable
guarantee from Assured Guaranty Europe PLC.

-- An availability-based payment mechanism underpins stable and
predictable cash flows.

-- The project's operational history has been relatively stable,
with a low level of performance or unavailability deductions.

-- The project holds a significant cash balance of GBP65.3 million
as of June 30, 2019, in addition to closing operating cash of
GBP1.038 million.

Weaknesses

-- ProjectCo retains major maintenance (lifecycle) risk for the
buildings. While GE assumes the lifecycle risk of medical equipment
in terms of cost overruns, CRH, which holds the medical equipment
major maintenance reserve account (MRA), could be exposed to the
timing of the medical equipment lifecycle.

-- The cost of medical equipment lifecycle is significant, thereby
causing potentially significant peaks in its lifecycle reserving.

-- The headroom for any underperformance under the current rating
is tight, with a minimum annual debt service coverage ratio (DSCR)
of 1.06x under our base case.

The affirmation follows the formalization in the project's
financial documentation of the additional RUR reserving mechanism.
CRH informally agreed the RUR with the controlling creditors in
2014, and it has been in place since then. The purpose of the RUR
is to trap excess cash for the maintenance of medical equipment
services before reserving the cash in the medical equipment
services MRA. Under an amendment to the collateral deed dated July
18, 2019, the RUR became part of the buildings MRA.

In most hospital PFIs, the provision of medical equipment services
is either excluded or ring-fenced from all other services, and the
maintenance cost is not covered by the unitary charge. In contrast,
in this project, medical equipment services are part of the
services the project provides. While the risk of lifecycle cost
overruns is assumed by GE, CRH could be exposed to the timing of
the lifecycle expenditure. This is because CRH reserves--in the
equipment MRA--amounts that it passes to GE for the lifecycle
expenditure. As CRH funds the equipment MRA from the unitary
charge, which is flat in real terms, changes in the timing of
medical equipment lifecycle replacement can result in lifecycle
reserving that differs from the original forecast, and material
variations between the actual and forecast cash flows.

The RUR traps free cash flows available to shareholders once all
contractual payments, including debt service, are made. When the
forecast medical equipment services MRA contributions are higher,
the RUR releases cash trapped earlier for it to be used to fund the
medical equipment services MRA.

S&P said, "As the RUR is operational in nature and contracted, we
include releases from it in our calculation of cash available for
debt service. In our base-case scenario, we now expect a minimum
DSCR over the life of the project of 1.06x and an average of 1.12x,
compared to 0.70x and 1.10x, respectively, without the contracted
reserve. As a result, our preliminary operations phase stand-alone
credit profile (SACP) has strengthened to 'bb' from 'b+'. However,
we no longer make a rating adjustment for a high average senior
debt coverage ratio in view of the now relatively flat DSCR
profile.

"We continue to consider the project to be resilient under our
downside scenario and forecast that it would have sufficient
available liquidity through its operational reserves to support
debt service. As of June 30, 2019, the project had GBP66.3 million
in cash, including cash in the operating account, the debt service
reserve account (DSRA), the buildings and equipment MRAs, a
change-in-law reserve, and GBP15.53 million in the RUR.
Furthermore, in accordance with the recent amendment to the
collateral deed, CRH is required to hold a minimum operating
account balance of GBP1 million at any time. According to the
accounts agreement, cash sitting in the operating reserve accounts
can be used to service debt together with the DSRA, if needed. We
apply a one-notch uplift to the preliminary operations phase SACP
to reflect the robust downside performance."

The project has been operating since 2008 and enjoys stable
performance. The construction contractor, SCJV, is completing works
related to latent defects at its own cost. S&P expects these works
to be completed by the end of March 2020, other than those in the
accident and emergency department, and in the center for
reproductive medicine, where access is difficult and may not be
granted by 2025. Replacement of the water pipes was completed in
July 2019, with two minor leaks remaining. Vinci, the hard FM
services provider, will fix any ongoing leaks as part of its
reactive maintenance obligation.

In general, Vinci's delivery of the hard FM services has been very
good. It has delivered services satisfactorily, with no service
failure points or deductions, except for some recent minor failures
in theater validation, that is, checking that the sterilization and
cleanliness of the operating theaters meet the required standards.
The NHS trusts are also satisfied with the soft FM services
provided by ISS. The relationship between CRH and the trusts who
pay CRH's unitary payment--University Hospitals Coventry and
Warwickshire National Health Service Trust and Coventry and
Warwickshire Partnership Trust--is good.

S&P said, "We consider both trusts as material and irreplaceable
counterparties. They are the project's sole source of revenues, and
their liabilities are several. In accordance with our counterparty
criteria, we have assigned a counterparty dependency assessment to
the trusts' PFI obligations. Given the likelihood of extraordinary
support from the U.K. government if the trusts require financial
assistance to meet their PFI obligations, the trusts' credit
quality does not constrain the SPUR on the project.

"The stable outlook on the SPUR reflects our expectation of
continued good working relationships between the parties, resulting
in the project's ongoing stable performance, with adequate
provision of FM services by ISS and Vinci. We expect that SCJV will
rectify the outstanding construction defects within the timeframes
agreed with the respective trusts.

"While the minimum DSCR of 1.06x that we forecast under our
base-case scenario is low compared to that of peers, in our view,
the projects holds sufficient cash reserves that would be
sufficient to service debt during periods when the cash flow from
operations may not be sufficient for this purpose."

The stable outlook on the long-term rating reflects that on Assured
Guaranty Europe.

S&P said, "We could lower the rating by at least one notch if we
forecast lower credit metrics, or we believe that CRH cannot meet
debt service throughout the life of the project with operational
cash flows, supported by the contractually required operating
liquidity. Lower forecast credit metrics could result from, for
example, increased costs or reduced income that CRH did not pass to
the subcontractors or the shareholders did not assume. Downward
pressure could also arise if the relationships between the project
participants deteriorate materially, resulting in a significant
rise in service failure points or the issuance of warning notices
by the trusts, thereby increasing the risk of project default.

"We could take a positive rating action on the SPUR if the
project's financial profile improved materially, with the minimum
DSCR under our base case strengthening above 1.10x. This could
occur, for example, through the realization of significant cost
savings that would not have a negative bearing on either service
provision or the condition of the estate, or through the
implementation of variations that would result in additional
revenue."

FLEET TOPCO: S&P Assigns 'B+' ICR on Completed Debt Raise
---------------------------------------------------------
S&P Global Ratings assigned its 'B+' long-term issuer credit rating
to Fleet Topco Ltd. and its 'B+' issue rating to the first-lien
senior secured U.S. term loan facility issued by Fleet Bidco Ltd.
and Fleet US Bidco Inc.

S&P said, "Our rating on Fleet Topco Ltd. (Argus, or the group)
reflects its market position as the second-largest price-reporting
agency (PRA) globally, coupled with favorable operating dynamics,
including a mostly subscription-based earnings profile with high
retention rates, earnings visibility, and embedded products.

"Despite the relatively small scale of the group's operations and
narrow product diversification compared with similarly rated peers,
we view Argus' core pricing data products as mission critical for
its customers. Argus' products are only a small fraction of overall
customer costs, and we see there few alternatives because global
coverage is somewhat concentrated in the two largest global
players, Argus and Platts (a division of S&P Global)." Argus has
about a 16% market share by its own account, behind the incumbent
number one, Platts, which has an about 52% market share. Argus is
approximately twice the size of the next-largest competitor, and
has exhibited one of the fastest growth rates in the industry. Key
smaller competitors with which Argus competes include OPIS, a
division of IHS Markit; and ICIS, a division of RELX PLC.

S&P said, "Additionally, the rating incorporates the group's
financial leverage under the control of financial sponsor General
Atlantic (GA), somewhat tempered by its financial policy, which we
assess as less aggressive than other sponsor-owned leveraged
peers.

"We forecast that Argus will maintain leverage sustainably below
5.0x, which is further supported by the group's chairman and CEO
Mr. Adrian Binks, who has long maintained a core ownership position
and who we understand has contributed to a financial policy with a
leverage tolerance ceiling of about 5.0x. Under our base case, we
forecast adjusted leverage will fall to around 5.0x in our first
forecast year (fiscal year ending June 30, 2020) and will further
reduce thereafter toward a company-stated medium-term target of
3.5x net leverage (equivalent to about 4.1x using current S&P
Global Ratings adjustments)."

The nature of the group's products result in a typically sticky
customer base and reasonable earnings visibility.

In fiscal year 2018, Argus had a 96% retention rate for existing
customers. Some factors that contribute to customer churn include
customer mergers and customers exiting the industry. Additionally,
at the beginning of financial year 2019, over 43% of 2020 budgeted
revenue had already been billed to customers as deferred revenue.
This dynamic of billing customers upfront for future services
creates a model whereby Argus typically experiences working capital
inflows annually. As a global provider of price reporting products,
the group already has a substantial customer base, which has
historically proven to be stable. As such, organic growth tends to
be driven by increased usage and the proliferation of products to
existing customers, as well as new customer acquisitions. From
2016-2018, Argus lost no net customers from its current top 150
customer relationships. Of the group's top 25 customers, 95% have
been customers for over 20 years. The top 20 customers account for
about 28% of average annual value.

From a growth perspective, Argus has largely focused on its
existing core business of providing price assessment-related
products.

The group then builds on this through its conferences and events
and analytics and consulting offerings. Some other data service
providers, which we have included in our peer assessments,
sometimes pursue expansion opportunities into new bolt-on business
lines that can be cross-sold to an existing customer base. Argus'
strategy to date has been to continue to expand its existing core
operations, particularly through creating and monetizing further
indices and benchmark products when opportunities arise, as well as
moving into adjacent end commodity markets as they grow and mature,
such as soft commodities (fertilizers, etc.). Benchmark and indices
products are large drivers of value for Argus. The ability to
achieve and create benchmarks in part enhances network effects,
thus creating the potential for long-term earnings power and
monetization to Argus, and increases barriers to switching.

S&P said, "We do see some risk that adverse changes in customer
relationship management or methodology changes could weaken
adoption of Argus' products.

"The cost of PRA products is not a primary determinant of their
use, with the average cost often a very small fraction of an
overall commodity physical trade or shipment. Our understanding is
that the key to usage depends more on customer relationships, first
mover advantage, and proliferation of the product in a network,
particularly in the case of participants using and referencing an
index or benchmark, and participants' satisfaction with the
methodology and quality of pricing assessments.

"We believe increased capex may be required because the group may
need to increase investment in further digitalization, automation,
and the technological capabilities of its products.

'Argus is a capital-light business. In fiscal year 2018,
depreciation was less than GBP3 million; however, capital
expenditure (capex) climbed to around GBP8 million due to some
internal strategic projects. We have included up to about GBP4
million in capex in our base-case forecasts. In this regard, we
view the group's larger competitor as having greater capacity to
ramp up spending and more heavily invest in new technologies, given
its much larger scale and balance sheet. That said, the business
has inherent operating leverage whereby new price assessments and
building new benchmarks/indices, for example, can typically be
achieved at marginal additional cost. Lastly, we currently do not
make any capitalized development cost adjustment given the
immaterial size of the costs as well as the fact they predominately
represent internal use investments. If these costs materially
increase, we could reassess this treatment.

"We view the scale of the group as a limiting factor in our
assessment of business strength.

"Although the group is the global No.2 provider in its chosen
market, group EBITDA is less than GBP100 million, and based on
management accounts revenue in 2019 was just over GBP200 million.
Additionally, we view product diversification and scope as narrow
compared with similarly rated peers, although the group does have
good geographic diversity. The group's adjusted EBITDA margins,
which we forecast will remain well above 30%, as well as high cash
flow conversion, are key supports for our assessment of business
strength. Our rating incorporates continued revenue growth above
10% such that scale of operations over the next 12-24 months is
forecast to grow closer to GBP100 million in EBITDA.

"We view the alignment of interest resulting from Mr. Binks'
ownership in Argus as a credit positive for the group.

"However, we also believe that Mr. Binks' long association and
leadership of Argus may result in some key man risk to the group.
Mr. Binks has led Argus and guided its growth strategy over a long
period, and in our opinion has likely established long-term client
and regulator relationships in the industry. Notwithstanding this,
we believe mitigating factors include Mr. Binks' current ongoing
commitment to continue leading the group for the near future, as
well as a deeper pool of management talent established over the
past 24 months, including the appointment of a chief operating
officer and additional senior divisional leadership talent. Mr.
Binks previously stepped down as CEO and assumed a chairperson role
in July 2015; however, he was reinstated as CEO in early 2017 after
the buyout by GA.

"We have assessed both shareholder instruments in the capital
structure as meeting our requirements for equity treatment."

Argus has two shareholder instruments in its capital structure
including preference shares (various classes) and loan notes
(including pay-in-kind [PIK] notes and discretionary PIK notes).
Argus currently treats both instruments as debt in its financial
accounts. Key conditions we considered in S&P's treatment of the
instruments as equity-like include no evidence of contractual
payment requirements, a stapling requirement to transfer, the
instruments are not held by a third party, the instruments are
subordinated to senior credit facilities, they have no security or
guarantees, and they cannot trigger an event of default or
accelerate in the case of a default. The loan notes are 100% held
by entities affiliated with GA, while the primary class of
preference shares (B class) are held by Mr. Binks, with remaining
classes held by other management. S&P could reassess its treatment
of these instruments if any of the existing material terms were
amended, as well as if they were transferred or sold to third
parties.

S&P said, "The stable outlook reflects our base-case forecast that
Argus will deleverage to about 5.0x adjusted leverage in fiscal
year 2020 from our estimate of 5.6x pro forma 2019 leverage at
close, and will then continue a deleveraging path thereafter into
fiscal year 2021. Our stable outlook also incorporates our view of
a financial policy commitment commensurate with sustaining leverage
below 5x. We factor in growing organic earnings and maintaining
adjusted EBITDA margins well above 30%. In our outlook, we do not
factor any material acquisitions, potential minority sale or exit,
or material shareholder distributions and recapitalizations, which
may prevent reducing leverage and could lead to a reassessment of
financial policy.

"We could lower the rating if in the next 12 months the group's
adjusted leverage underperformed our base-case forecast of about
5.0x or lower adjusted leverage by fiscal year-end 2020. We could
also downgrade Argus if we assessed that its financial policy had
turned more aggressive such that its deleveraging path and
commitment to maintain leverage below 5.0x failed to materialize.
Additionally, we could downgrade it if organic earnings or free
cash flow failed to reach our base-case forecasts or adjusted
margins deteriorated to around 30%. Finally, we could downgrade the
rating if adjusted free operating cash flow (FOCF) to debt fell
toward 5%.

"We view the likelihood of an upgrade in the next 12 months as
remote, given that we already incorporate a financial policy
consistent with deleveraging into the current rating.
Notwithstanding this, we could consider an upgrade if the group
deleveraged below 4x and committed to remaining below this level in
conjunction with a materially improved business strength, evidenced
by materially increased scale, market position, and significant
free cash flows."


HIBU GROUP: S&P Alters Outlook to Negative & Affirms 'B' ICR
------------------------------------------------------------
S&P Global Ratings revised its outlooks on Hibu Group Ltd. and Hibu
Midco Ltd. to negative and affirmed its 'B' long-term issuer credit
ratings on the entities.

In a separate rating action, S&P assigned its 'CCC+' issuer credit
rating to Owl Finance Ltd., the parent company of the Yell U.K.
business and of the issuers of its secured debt.

S&P is withdrawing its ratings on Hibu Group Ltd. and Hibu Midco
Ltd.

S&P said, "The outlook revision to negative on digital-marketing
services and digital directory publisher Hibu reflects our
expectation that Hibu's revenue and EBITDA will decrease more
substantially in FY2020 than we had previously expected due to
continued decline in its Yell subsidiary's U.K. business. We have
lowered our forecast of the U.K. business' contribution to Hibu's
operating performance and profitability, and now expect the group's
adjusted debt to EBITDA will approach 3.0x, above our previous
guidance of 2.5x for the current rating.

"Our rating on Hibu reflected our analysis of the whole group
including the U.K. (Yell Ltd.) and U.S. (Hibu Inc.) business
operations. However, due to the continued operating challenges that
the U.K. business (Yell) is facing, we have revised our view of
Yell's strategic status within the Hibu group and we no longer
assume it will necessarily receive extraordinary financial support
if needed.

"Following the withdrawal of our rating on Hibu, we continue rating
Owl Finance Ltd. (CCC+/Stable/--) as a separate entity."


LECTA PAPER: Files Chapter 15 Bankruptcy Petition in New York
-------------------------------------------------------------
Tom Corrigan at Dow Jones reports that Lecta Paper UK Ltd., a
subsidiary of one of Europe's largest paper makers filed for
bankruptcy in the U.S. to help it implement a restructuring deal
with creditors owed more than EUR700 million (US$775.4 million).

The English unit of Lecta SA filed for chapter 15 protection in
bankruptcy court in New York Dec. 19, after missing an interest
payment due last month, Dow Jones relates.

Judge Michael Wiles of the U.S. Bankruptcy Court in New York will
oversee the case, Dow Jones discloses.  The judge will hear any
creditor objections and decide whether the terms of the company's
restructuring plan, a so-called scheme of arrangement in England
and Wales, can be enforced in the U.S., Dow Jones states.

According to Dow Jones, the scheme, which court papers show has
gained support from a majority of creditors, calls for creditors to
swap their existing debt for new debt and for ownership of the
restructured company.  Lecta, Dow Jones says, is scheduled to meet
with creditors on Jan. 23 to seek formal approval of the scheme,
Dow Jones.

Lecta, which is incorporated in Luxembourg, has been in the
business of paper production and distribution for 300 years, Dow
Jones relays, citing court papers.  It is carrying a total of about
EUR714 million in debt, including EUR600 million in senior secured
bonds co-issued by Lecta and its English subsidiary in 2016,
according to Dow Jones.

The business has been in decline in recent years as demand for
print media has dropped, Dow Jones recounts.

"Paper production in Europe has steadily declined over the last
decade, and most major producers have closed production facilities
and wound back operations in certain sectors," Dow Jones quotes
Andrea Minguzzi, Lecta's executive chairman and legal
representative in the U.S., as saying.

MOTION MIDCO: S&P Assigns B+ ICR on Merlin Entertainments Takeover
------------------------------------------------------------------
S&P Global Ratings assigned its 'B+' long-term issuer credit rating
to Motion Midco Ltd., the entity set up to acquire Merlin
Entertainments PLC (Merlin). At the same time, S&P affirmed its
'B+' long-term issuer credit rating on Merlin. The outlook on both
entities is negative.

S&P said, "We assigned a 'B+' issue rating and '3' recovery rating
to the company's senior secured term loan facilities; and a 'B-'
issue rating and '6' recovery rating to its senior notes. The final
ratings are in line with the preliminary ratings on Motion Midco
Ltd. assigned on Oct. 8, 2019.

"Our ratings on Motion Midco follows the completion of the
acquisition of Merlin by the consortium comprising Blackstone,
KIRKBI, and CPPIB." Going forward, the financial accounts will be
consolidated at Motion Midco.

The transaction was funded through GBP3.3 billion of debt
(including a GBP2.5 billion-equivalent multi-tranched seven-year
senior secured term loan B; GBP635 million-equivalent euro and U.S.
dollar-denominated senior notes; $172.5 million of delayed drawdown
term facility. The rest of the funding comprises preference shares,
common equity, and a shareholder loan). As a result, S&P
anticipates Merlin's adjusted debt to EBITDA will increase to about
12.5x (7.6x excluding the preference shares and shareholder loan)
from nearly 4.0x in 2018.

Merlin's position as the second-largest operator of visitor
attractions (by visitor numbers in 2018), plus its licensing and
co-operating agreement (LCA) with Lego, solid profitability, and
revenue diversification in terms of its geography and attractions
portfolio, continue to support our assessment of the company's
business risk.

Merlin's offering is very diverse in terms of attraction types,
brands, and target customers. Indoor attractions (38% of revenues)
help compensate for the intrinsic seasonality of theme parks, which
generate most of their revenue between the months of March and
October in Europe. Over the years, Merlin has developed strong,
globally recognized visitor attraction brands that include iconic
names such as Madame Tussauds, The Dungeons, and Sea Life, which
enable it to target different client categories, ranging from
pre-school to young adults.

S&P said, "In our opinion, the visitor attractions industry is
exposed to seasonality, health and safety risks, and the high level
of competition in the leisure space for consumers' discretionary
time and income. A long cyclical macroeconomic slowdown or
recession represents a risk, as admission fees form about 56% of
the group's revenue.

"Despite the forecast decline in margins, we consider Merlin's
profitability to be above average within the leisure sector (33%
adjusted EBITDA margin in 2019-2020). In our view, this is
supported by the strength of its brands--especially the Legoland
parks, which have the highest margin--and by high barriers to entry
because theme parks have substantial capital expenditure (capex)
needs.

"We do not expect any material divergence in the group's strategy
under the new owners. Blackstone and KIRKBI have previously jointly
held this investment, and therefore have a track record of seeing
the business grow successfully. Under the new shareholder agreement
between the equity investors, we understand that the LCA with Lego
has been updated to facilitate closer coordination." The new owners
plan to increase capex in the Legoland resorts (which bring in
about 37% of the group's revenue) to about 10% of revenue from 8%
for the next two years. However, the shareholder agreement also
flags the possibility that the equity sponsors could require Merlin
to sell or dispose of the resort theme park segment, two years from
the completion of the acquisition.

S&P expects Merlin's revenue and EBITDA growth in 2020-2021 to be
fueled by:

-- The new Legoland park opening in New York,

-- The addition of attractions and accommodations in existing
Legoland and resort theme parks,

-- Recovery in London midway attractions, and

-- The strategic shift to family experience in the resort theme
parks.

S&P said, "We anticipate that the company will incur significant
capex during 2020, leading to negative free operating cash flow
(FOCF) generation. However, the group is prefunding its capex needs
through its $172.5 million delayed drawdown facility.

"We assess Motion Midco as a financial sponsored entity. However,
we acknowledge that KIRKBI has restated its intention to remain a
long-term strategic shareholder in Merlin--this acquisition
increases its stake to 50%, from around 30%.

Through this transaction, KIRKBI underwrote direct participation in
the term loan B and senior notes to a material extent. However,
such participation is disfranchised (that is, excluded from voting
in any key lender meeting issues). Although this equity sponsor's
participation in the debt indicates a strong commitment to the
investment, it could also present unforeseen obstacles to other
lenders if Motion Midco were in a distressed situation. Therefore,
we consider the preference shares and shareholder loans of GBP2.6
billion at Motion JVco Ltd. (parent company of Motion Midco Ltd.)
as debt in S&P's analysis. However, these preference shares are
deeply subordinated, unsecured, accrue payment-in-kind (PIK)
interest, and mature at least 30 days after other debts in the
group are repaid.

S&P said, "We consider the group's starting leverage of 12.5x (7.6x
excluding preference shares and shareholder loan) to be a stretch
for this rating level. However, our ratings are supported by the
group's strong operating track record, a clear deleveraging road
map, the equity sponsors' commitment to reduce leverage over the
next three years, and the involvement of KIRKBI as a strategic
long-term shareholder. We do not expect any debt-financed
acquisitions or dividend recapitalizations in the next two to three
years, as publicly stated in the company's shareholder agreement.

"In our base case, we anticipate that the company will
progressively reduce leverage as EBITDA increases, so that leverage
approaches 7.0x by year-end 2020. That said, we believe it will
remain highly leveraged for the forecast period."

The negative outlook indicates that the very high leverage at the
close of this transaction leaves Motion Midco with no headroom for
operating underperformance over the next 12 months. The negative
outlook also incorporates the risk that any delay in the launch of
Legoland New York could affect the group's plans to reduce
leverage.

S&P said, "We could consider lowering our rating on Merlin if its
adjusted debt to EBITDA is not reduced toward 12x (7x excluding
preference shares and shareholder loans) by 2020 or the group's
operating performance weakened, so that adjusted EBITDA margins
were below 32%-33%. We could also lower the rating if the group
were to incur additional indebtedness to fund acquisitions, capex,
or shareholder returns.

"We could revise the outlook back to stable over the next 12 months
if the company can reduce its leverage toward 12x (7x excluding
preference shares and shareholder loans), and continue to register
strong organic growth while reporting adjusted EBITDA margins above
33%. The outlook revision will also depend on our assessment of the
group's willingness to adhere to its publicly stated commitment to
reduce leverage."


OWL FINANCE: S&P Assigns CCC+ Issuer Credit Rating, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings assigned its 'CCC+' issuer credit rating to Owl
Finance Ltd. S&P also lowered its issue rating on the senior
secured notes, issued by Yell Bondco PLC, to 'CCC+' from 'B', and
its issue rating on the super senior revolving credit facility
(RCF), issued by Yell Ltd., to 'B' from 'BB-'.

S&P's rating on U.K.-based digital-marketing services and digital
directory publisher Owl Finance Ltd. reflects its view that its
capital structure is unsustainable in the long term.

S&P said, "This is due to the operating challenges that the group
is facing in the highly competitive and fragmented digital
marketing industry in the U.K. and high leverage that we forecast.
In the financial year ending March 31, 2020 (FY2020), we expect the
group's revenue and EBITDA will decrease and its adjusted debt to
EBITDA will exceed 6.5x due to tough competition, continued
customer losses, and additional investment in its business. As a
result, we think the high amount of debt--in excess of GBP210
million, versus limited free operating cash flow that we forecast
at GBP5 million-GBP10 million per year over the next two
years--leaves the company vulnerable and dependent upon favorable
business, financial, and economic conditions to meet its financial
commitments in the future."

S&P assumes no extraordinary financial support from its ultimate
parent, Hibu.

S&P said, "In our view, Hibu--the owner of Owl Finance Ltd. and the
U.S. digital marketing and directories business Hibu Inc.--has
stronger credit quality than Owl Finance on a stand-alone basis due
to the stronger EBITDA and cash flow generation of its U.S.
business. Hibu has full control of both Owl Finance and Hibu Inc.,
and we understand it does not plan to dispose of either of the
businesses in the near term. However, given the continued operating
challenges that Owl Finance is facing and the lack of formal
commitment from Hibu to provide financial support to Owl Finance,
we assume no extraordinary financial support from Hibu."

Owl Finance's financing subsidiaries issue senior secured notes and
super senior RCF. In line with the debt documentation, the notes
and RCF only have recourse to the U.K. business in the restricted
group. Equally, only the U.K. subsidiaries provide guarantees to
this debt.

In FY2020, Owl Finance's business completed transition to digital
after it delivered the final Yellow Pages print directory in
January 2019.

It now focuses solely on digital marketing services for small and
midsize enterprises (SMEs), a very fragmented and competitive
market. Despite its strong market position, Owl Finance continues
to experience substantial customer churn and net customer decline,
modestly declining average revenue per customer, and declining
average monthly visits to Yell.com. This is due to tough
competition from new market entrants and the loss of advertising
customers who used to order digital services together with print
products that the group has phased out. S&P said, "The group is
investing in its salesforce and customer acquisition and we expect
ongoing transformation efforts, new product offerings, and
strategic partnerships with large online players such as Apple
should allow Owl Finance to stabilize operating performance in the
medium term. However, we now expect business turnaround to take
longer than we previously expected. In the second quarter of
FY2020, Owl Finance reported an 11.6% decline in its year-to-date
revenue and 25.7% decline in EBITDA, which was above our previous
expectations. We forecast the group will generate limited positive
free operating cash flow (FOCF) in FY2020-FY2021, which will allow
it to only slowly reduce its leverage from currently elevated
levels."

S&P said, "The stable outlook on Owl Finance Ltd. reflects our view
that it will gradually stabilize its operating performance over the
next 12 months by achieving flat organic revenue growth in its
digital marketing operations and somewhat containing the decline in
digital directories revenue. Our base case assumes that the group's
adjusted EBITDA margin will improve to more than 20% and adjusted
leverage will reduce to less than 6.0x in FY2021, although we think
the group's capital structure will be unsustainable in the long
term. The outlook also assumes the group will maintain adequate
liquidity and adjusted EBITDA cash interest cover above 1.5x.

"We could lower the rating if we saw an increasing probability of a
default--such as a debt restructuring, bond buyback, or exchange
offer--occurring within the next 12 months. We understand the group
is not currently taking any tangible steps in this direction, but
we would likely see such events as distressed and tantamount to a
default. We could also lower the rating if the group's liquidity
deteriorated due to continuing operating weaknesses, with reducing
EBITDA and cash flows coming from customer losses.

"We view an upgrade as remote over the next 12 months. It would
require a sustainable improvement in the group's organic revenue
and EBITDA generation that would allow it to generate meaningful
positive FOCF and reduce debt."


TOMLINSON'S DAIRIES: Dairy Farmers May Get Little to No Payout
--------------------------------------------------------------
Andrew Meredith at Farmers Weekly reports that dairy farmers who
were not paid for six weeks' worth of milk by collapsed processor
Tomlinson's Dairies will receive little to no cash from the firm's
administrators.

Farmers, who number among the unsecured creditors, are set to
receive 0-3p for each GBP1 owed, Farmers Weekly, relays citing
documents filed with Companies House.

Money arising from the disposal of assets will first go towards
employees' unpaid wages (preferential creditors) and outstanding
bank loans (secured creditors), Farmers Weekly notes.

HSBC is owed GBP15.6 million and Finance Wales Investments, an arm
of the Development Bank of Wales, is due GBP1.8 million, Farmers
Weekly discloses.

According to Farmers Weekly, administrators Michael Denny and Peter
Dickens of PricewaterhouseCoopers said: "Based on the information
currently available we anticipate that secured creditors will not
be repaid in full.

"Sufficient funds will be available to pay the preferential
creditors in full and there will only be a prescribed part dividend
to unsecured creditors."



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S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante,
Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman,
Editors.

Copyright 2019.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Europe subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 215-945-7000.


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