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                          E U R O P E

          Thursday, January 30, 2020, Vol. 21, No. 22

                           Headlines



A Z E R B A I J A N

AZERBAIJAN STATE OIL: Fitch Affirms BB+ IDR, Outlook Stable


F R A N C E

IM GROUP: Moody's Assigns B2 Corp. Family Rating, Outlook Stable
IM GROWTH: S&P Assigns Preliminary 'B-' ICR, Outlook Stable


G E R M A N Y

[*] GERMANY: Works on Draft Law to Reduce Banking Sector Risks


G R E E C E

GREECE: Fitch Raises LongTerm IDR to BB, Outlook Positive


I R E L A N D

BABSON EURO 2015-1: Moody's Affirms EUR12.4MM Class F Notes at B1


L U X E M B O U R G

GLOBAL BLUE: Moody's Reviews B1 CFR for Upgrade on Far Point Deal
PARK LUXCO 3: Moody's Affirms B1 CFR & Alters Outlook to Negative


N E T H E R L A N D S

SCHOELLER PACKAGING: S&P Affirms 'B' LongTerm ICR, Outlook Stable
TELEFONICA EUROPE: S&P Assigns BB+ Rating on New Hybrid Securities
TRAVIATA BV: Fitch Assigns B+ LongTerm IDR, Outlook Stable


R U S S I A

MECHEL OAO: Decision on Future of Elga Coal Project Due in Q1
SM BANK: Bank of Russia Appoints Provisional Administration


S P A I N

ESMALGLASS-ITACA: Moody's Affirms B2 CFR, Outlook Stable
HIPOCAT 11: S&P Affirms 'D(sf)' Rating on Class B Notes


U N I T E D   K I N G D O M

ADDISON LEE: Reaches Rescue Deal with Banks
G&M SUPPLIES: Enters Into Company Voluntary Arrangement
LOIRE UK: Fitch Lowers Rating on Expected Secured Debt to B+(EXP)
PENTA CLO 7: S&P Assigns Prelim B-(sf) Rating on Class F Notes
RADFORD CHANCELLOR: Enters Insolvency, Ceases Trading

TALKTALK TELECOM: S&P Alters Outlook to Pos. on FibreNation Sale

                           - - - - -


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A Z E R B A I J A N
===================

AZERBAIJAN STATE OIL: Fitch Affirms BB+ IDR, Outlook Stable
-----------------------------------------------------------
Fitch Ratings affirmed State Oil Company of the Azerbaijan
Republic's Long-Term Issuer Default Rating and senior unsecured
rating at 'BB+'. The Outlook is Stable. SOCAR's rating is aligned
with Azerbaijan's rating (BB+/Stable).

SOCAR is Azerbaijan's national oil company and is fully owned by
the state. SOCAR's Standalone Credit Profile corresponds to 'b+',
with high leverage the main rating constraint. The company's IDR is
aligned with that of Azerbaijan in view of their strong ties based
on Fitch's Government-Related Entities Rating Criteria. The
alignment is underpinned by state support provided to the company
in the form of financial guarantees, cash contributions and equity
injections, as well as SOCAR's social functions and its importance
as a state vehicle for the development of oil and gas projects.

KEY RATING DRIVERS

Close Links with the State: SOCAR's rating is aligned with that of
the state given their close ties. Most oil and gas projects in
Azerbaijan operate as concessions, where SOCAR has a minority stake
and where it also represents the state and is involved in marketing
the latter's share of crude oil and gas (profit oil). In addition,
SOCAR has stakes in some other major energy projects promoted by
the state, such as the Southern Gas Corridor (SGC). Furthermore,
the state guarantees 9% of the company's debt and provides equity
injections to cover cash deficits.

Taxes paid by SOCAR accounted for almost 10% of government revenue
in 2018, while income from marketing of the state's share in profit
oil, to be transferred to the State Oil Fund of the Republic of
Azerbaijan (SOFAZ), the national oil fund, accounted for almost 80%
of government revenue (compared with 65% in 2017). The growth
results from stronger international oil prices in 2018.

Social Functions: The rating alignment is also supported by SOCAR's
social role. One of its key functions is production and sale of
fuel at regulated prices to the domestic market, which are enough
to cover the company's operating cash costs but are lower than
international prices. Also, SOCAR employs more than 50,000 people
in Azerbaijan. The company does not pay dividends as such but it
may be required by the state to make cash contributions to the
state budget, government agencies or to directly fund some social
projects.

SCP Constrained at 'b+': SOCAR's high leverage constrains its SCP
at 'b+' although its business profile is stronger and corresponds
to the 'bb' rating category. In 2018, SOCAR's net production
amounted to 256 thousand barrels of oil equivalents per day,
including around 60% of liquids; and its proved reserve life was
comfortable at fifteen years. SOCAR's unit profitability,
calculated as funds from operations (FFO) to upstream production,
was robust at USD23/boe, between integrated oil majors (e.g. Royal
Dutch Shell plc, AA-/Stable, USD38/boe) and Russian oil producers
(e.g. Rosneft Oil Company, USD12/boe).

High Leverage: Fitch expects SOCAR's leverage to remain high over
the rating horizon. In 2018, its FFO adjusted net leverage reduced
to 3.3x from 5.0x in 2016-17 due to higher oil prices and a
significant positive working capital inflow. Fitch assumes that
leverage is likely to revert to its higher level given SOCAR's
continued high capital intensity and Fitch's assumed oil prices.
Fitch projects SOCAR's FFO adjusted net leverage to fluctuate
between 4.0x and 4.5x in 2020-2022. This level is more typical for
companies rated in the 'B' rating category or below.

To a large extent SOCAR's high leverage is the function of its
close links with the state, which exercises significant control
over the company's profitability and balance sheet through
regulation of domestic fuel prices, cash injections, government
distributions and other measures. However, Fitch believes that the
government has the incentive to keep SOCAR adequately funded.

More Emphasis on Historical Performance: Fitch has limited
visibility on possible cash outflows related to SOCAR's large
investments, such as SGC, the Absheron field and its downstream
projects. Fitch consequently puts more emphasis on the company's
historical performance when assessing its credit profile. This
limited visibility is one of the factors constraining the SCP in
the 'b' rating category.

SGC Mostly Completed: The USD40 billion SGC project, which is being
developed in cooperation with BP plc (A/Stable) and other partners,
includes the full-field development of the Shah Deniz 2 gas field
(SD2), the expansion of the South Caucasus Pipeline (SCPX), and the
construction of Trans-Anatolian and Trans Adriatic gas pipelines
(TANAP and TAP) connecting Azerbaijan with Turkey, Italy and some
other countries. The project has largely been completed as SD2,
SCPX and TANAP became operational in 2018 and TAP should come on
stream by end-2020.

STAR Refinery Fully Ramped Up: Construction of STAR Refinery in
Turkey, SOCAR's largest investment abroad, was completed in
December 2018. The refinery ramped up to full capacity in mid-2019.
The USD6.3 billion project was mainly funded by the USD3.3 billion
project finance debt raised in 2015, split into two tranches with
maturities of 18 and 15 years and with a four-year grace period.
Fitch believes that the project, which is not consolidated on
SOCAR's balance sheet, will require no further major cash outflows
and that it will repay debt from operating cash flows as a priority
before starting paying some dividends. Fitch does not expect any
dividends until at least 2022.

Volatility from Trading Business: SOCAR's trading operations add
volatility to the company's performance. In 2018, the company's
traded volumes averaged 2 million barrels of oil per day, of which
around 70% were third-party volumes. Trading business is
capital-intensive and could lead to large working capital
fluctuations. In the long term, its profitability depends on the
effectiveness of risk management techniques. SOCAR's track record
in the business, especially with regards to third-party volumes, is
not yet sufficient to assess these.

DERIVATION SUMMARY

Fitch aligns SOCAR's rating with that of Azerbaijan under Fitch's
GRE Rating Criteria to reflect strong ties between the two
(strength of support score: 30). This approach is underpinned by
SOCAR's participation in all of the largest oil and gas projects in
the country and state support in the form of equity injections and
guarantees. SOCAR's SCP is weaker at 'b+', with high leverage the
main constraint. High leverage is typical for some national oil
companies Fitch rates in other countries, including Petroleos
Mexicanos (BB+/Negative) in Mexico, JSC National Company
KazMunayGas (BBB-/Stable) in Kazakhstan, and Petroleo Brasileiro
S.A. (BB-/Stable) in Brazil.

KEY ASSUMPTIONS

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

  - Brent crude price of USD65/bbl in 2019, USD62.5/bbl in 2020
USD60/bbl in 2021 and USD57.5/bbl in 2022

  - USD/AZN exchange rate: 1.7 over 2019 - 2022

  - Broadly neutral aggregate change in working capital over 2019 -
2022

  - Aggregate capex of AZN14 billion over 2019 - 2022

  - Contributions in associates and joint-ventures of AZN0.8
billion over 2019-2022

  - Continued support from the state over 2019-2022

RATING SENSITIVITIES

SOCAR

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

  - Positive rating action on the sovereign coupled with an
improvement in SOCAR's SCP. An improved SCP would be manifested by
FFO net adjusted leverage consistently below 3.5x (2018: 3.3x) and
increased visibility of the company's spending plans.

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

  - Negative rating action on Azerbaijan

  - Weakening state support

  - Sustained deterioration in SOCAR's credit metrics, FFO net
adjusted leverage exceeding 6.0x over an extended period of time.

Azerbaijan

The main factors that could, individually or collectively, trigger
positive rating action are:

  - Improvement in the macroeconomic policy framework,
strengthening the country's ability to address external shocks and
reducing macro volatility.

  - A significant improvement in public and external balance
sheets.

  - Reduction in dependence on the hydrocarbon sector, for example
due to stronger non-oil GDP growth underpinned by improvements in
governance and the business environment.

The main factors that could, individually or collectively, trigger
negative rating action are:

  - An oil price or other external shock that would have a
significant adverse effect on the economy, public finances or the
external position.

  - Developments in the economic policy framework that undermine
macroeconomic stability.

  - Weakening growth performance and prospects.

LIQUIDITY AND DEBT STRUCTURE

Manageable Liquidity: As of June 30, 2019, SOCAR's liquidity
amounted to AZN7.6 billion against AZN4.2 billion of short-term
debt and current portion of long-term borrowing. Liquidity included
Fitch-defined cash and cash equivalents of AZN6.0 billion as well
as AZN1.5 billion of undrawn committed lines of credit related to
the modernisation work at Heydar Aliyev Oil Refinery. The bulk of
short-term debt was mainly in US dollars and related to SOCAR's
trading arm, Turkish petrochemical subsidiary Petkim, and the
parent company. Liquidity could come under some pressure in view of
the forecast FCF over 2019-2020. However, Fitch expects the state
to cover any liquidity gaps through equity injections.

No Subordination Issue: A significant part of SOCAR's consolidated
debt (around 50%) is at the level of subsidiaries. Subsidiaries'
debt is comfortably below 2.0x of the group's EBITDA after readily
marketable inventory adjustment on SOCAR Trading's debt, and Fitch
would expect the parent company's creditors to benefit from the
state support provided to SOCAR, hence there are no negative rating
implications for unsecured creditors at the group. Consequently
Fitch rates SOCAR's senior unsecured notes at 'BB+'.

SUMMARY OF FINANCIAL ADJUSTMENTS

  - Fitch treats liabilities resulting from the transactions
involving disposal of certain assets to SGC and Goldman Sachs
International (GSI) in the total amount of AZN7 billion as
debt-like obligations at end-2018. This mainly includes the sale of
a 10% interest in the Shah Deniz PSA and in South Caucasus Pipeline
Company to SGC, and a sale of a 13% stake in SOCAR Turkey Enerji
A.S. to GSI.

  - A lease charge of AZN192 million was capitalised using a
multiple of 6x as the company is based in Azerbaijan.

  - AZN151 million of deposits with maturity ranging from six
months to one year were treated as readily available cash.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3. ESG issues are credit-neutral
or have only a minimal credit impact on the entity, either due to
their nature or to the way in which they are being managed by the
entity.




===========
F R A N C E
===========

IM GROUP: Moody's Assigns B2 Corp. Family Rating, Outlook Stable
----------------------------------------------------------------
Moody's Investors Service assigned a first-time B2 corporate family
rating and B1-PD probability of default rating to IM Group SAS, the
ultimate holding company owner of French luxury apparel retailer
Isabel Marant. Concurrently, Moody's has assigned a B2 rating, with
a loss given default assessment of LGD5, to the proposed EUR200
million senior secured notes due 2025, to be issued by IM Group
SAS. The outlook is stable.

The proceeds from the proposed issuance will be used to (1) repay
certain existing bank debt; (2) partly repay shareholders as part
of the group's reorganization, which comprises the merger of
certain holding companies of the group, and (3) pay related
transaction costs.

"Isabel Marant's B2 rating reflects the company's good brand
recognition in the luxury fashion segment, its diversified
distribution channels and geographic presence, its solid and
growing profitability, and our expectations of positive free cash
flow", says Guillaume Leglise, a Moody's Assistant Vice President
and lead analyst for Isabel Marant. "The rating also incorporates
Isabel Marant's small scale, its high exposure to fashion risk,
limited brand portfolio primarily focused on womenswear and its
high initial leverage", adds Mr Leglise.

RATINGS RATIONALE

The B2 rating reflects the company's balanced distribution channels
and its geographically diversified footprint. Thanks to its
wholesale operations, which represent around 70% of sales
(including e-commerce partners), the company benefits from good
revenue visibility as orders are received prior to production runs,
on average six months ahead of delivery and payments, which reduces
inventory risk.

The rating incorporates IMG's solid profitability, which compares
favourably with that of other rated apparel and fashion retail
companies. IMG's EBITDA margin (as adjusted by Moody's) was around
30% in the 12 months to September 30, 2019, broadly stable over the
past few years. The company's high price tags also give more
pricing flexibility, protecting margins from the adverse effects of
fluctuations in commodity prices.

The B2 CFR is constrained by the company's exposure to high fashion
risk, which can create some volatility in revenues and earnings.
The company's product offering primarily focuses on women's luxury
ready-to-wear clothing and accessories, targeting fashionable and
affluent customers. As such, IMG competes against a number of
companies, including traditional high-end luxury brands and
'affordable luxury' brands.

The rating is also constrained by IMG's limited scale, with
revenues of EUR178 million in the twelve months to September 30,
2019, and its relatively narrow brand focus, with its product
offering largely associated with the name of its founder and main
designer, Ms Isabelle Marant. Moody's believes that the company's
success relies heavily on its founder, and as such, its credit
profile includes some key person risk considerations, as Ms Marant
remains pivotal in the design of collections, and ultimately the
brand recognition of the company. Nevertheless, the company has
strengthened its internal design capabilities over the past few
years, and now benefits from an in-house design and development
team of 50 people.

Furthermore, the B2 rating factors in the company's high leverage
-- defined as debt/EBITDA, after Moody's adjustments principally
for capitalised operating leases, capitalised design costs, and
factoring arrangements -- which the rating agency estimates at 4.9x
in the twelve months to September 30, 2019, including the proposed
transaction. This relatively high leverage is mitigated by the
company's good deleveraging prospects, supported by the planned
retail store rollout strategy. Moody's expects that this expansion
in retail, if successful, may support double digit growth in
EBITDA, allowing leverage to decrease to below 4.5x in the next 18
months.

Moody's believes that the company's fast-paced expansion strategy
carries execution risks. That said, the successful openings in
recent years (22 store openings in 2018/19), coupled with the short
cash payback period (less than 1.5 years on average) help mitigate
the execution risks of this strategy. Also, the strengthening of
omnichannel activities (already representing 23% of sales in 2019),
notably with the recent opening of a Tmall website (a Chinese B2C
retail platform), will also support future earnings and margins.
The company should also benefit from the solid growth prospects of
the luxury apparel market, which Moody's expects to continue to
grow by mid-single digit in the next few years, fueled by growing
demand from younger generation and Chinese consumers.

Moody's expects the company to generate between EUR10 million to
EUR20 million of positive free cash flow per year, thanks to its
high profitability, earnings growth stemming from store openings
and an asset-light business model, derived from the magnitude of
its wholesale operations. Pro forma for the proposed bond
transaction, IMG's liquidity is adequate, underpinned by: (1)
EUR42.5 million of opening cash on balance sheet; (2) Moody's
expectations of positive free cash flow over the next 12-18 months;
and (3) the absence of significant debt maturities until 2025.
While the company has no revolving credit facility in place,
Moody's believes its internal liquidity sources should be
sufficient to withstand seasonal fluctuations in working capital
and capital spending needs in light of its solid operating cash
flow.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS

Overall, Moody's considers social risk to be moderate for the
apparel retail industry. Changes in customer behavior, notably the
shift to online, creates challenges for incumbent retailers.
However, for IMG, this competitive risk is limited because the
company has bolstered its omnichannel capabilities in recent years
and it is already well present online (23% of revenues in 2019).
Digital marketing and social media visibility are also important in
fashion retail, and in line with its current strategy, IMG will
need to continue to invest in technology and digital capabilities
to remain competitive.

As an apparel retailer, the company is also subject to social
factors such as responsible sourcing, product and supply
sustainability, privacy and data protection. The company strives to
adhere to high ethical standards vis-a-vis its suppliers and their
working conditions.

The company is majority owned by Montefiore Investment (50.6%),
which as a private equity sponsor, can have a high tolerance for
leverage. Governance can also be comparatively less transparent
than listed companies. However, Moody's understands that
Montifiore's investment time horizon is longer that the average
private equity firm and Moody's expects that the large ownership of
the founder and main designer (Ms Isabelle Marant, 38.9%), and
other co-founders and managers (10.5%) will support longer-term
sustainable strategies to develop the company.

STRUCTURAL CONSIDERATIONS

The CFR is assigned to IM Group SAS, which is the holding company
and the top entity of the restricted group. The capital structure
consists of the senior secured notes for EUR200 million.. The notes
will benefit, on a first-priority basis, from a security package
including certain share pledges, intercompany receivables and bank
accounts.

The B2 rating assigned to IM Group SAS' senior secured notes is in
line with the CFR. Moody's assessment also factors in significant
limitations on the enforcement of the guarantees and collateral
under French law. The PDR of B1-PD reflects the use of a 35% family
recovery assumption, consistent with a bond capital structure and
no financial covenants.

The bond indenture includes a specified change of control event,
permitting one change of control of the company without triggering
a requirement to offer to repurchase the notes, assuming the
resulting consolidated net leverage is less than 2.8x.

The capital structure also includes subordinated shareholder debt
of EUR174.4 million. This shareholder debt, which is represented by
a convertible bond with a contractual maturity of nine years (due
in 2029), is not included in the rating agency's credit metric
calculations as its terms meet Moody's published criteria for full
equity treatment.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook on the ratings reflects Moody's expectation that
IMG will deliver sales and earnings growth in the next 12-18 months
as it continues to expand its retail network, in a controlled
manner. Moody's expects the company's revenues will also benefit
from good growth prospects in the 'apparel luxury' segment. With
good earnings growth Moody's expects that leverage will decrease to
below 4.5x in the next 18 months and that the company will generate
solid free cash flow.

WHAT COULD CHANGE THE RATING UP/DOWN

Moody's could downgrade the ratings if there is evidence of
pressure on IMG's sales and earnings growth as a result of
difficulties in implementing its international retail expansion or
a decline in operating margins indicating that products are losing
appeal with the company's higher end consumers. Quantitatively, an
adjusted debt/EBITDA ratio rising towards 5.5x could trigger a
downgrade. Also, a deterioration in liquidity owing to negative
free cash flow could put pressure on the rating.

Upward rating pressure is currently constrained by the company's
small scale and single-brand focus in the highly competitive and
fast-moving luxury fashion industry. Moody's could upgrade the
ratings if IMG shows that its new collections are resonating with
core customers while establishing a longer track record of
profitable growth. An upgrade would also require IMG to deliver and
maintain positive free cash flow and improved credit metrics, such
as adjusted debt/EBITDA sustainably below 4.0x and adjusted
EBITA/interest expense above 2.5x.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Apparel
Methodology published in October 2019.

COMPANY PROFILE

Headquartered in Paris, France, IM Group SAS is a holding company,
owner of Isabel Marant, a French luxury apparel company, designing
and distributing women ready-to-wear products (dress, T-shirts,
bags, shoes) and accessories (belts, jewelry). Founded by Ms
Isabelle Marant in 1994, the company products are offered through
two main lines, Isabel Marant (60% of revenues) and "Isabel Marant
Etoile" (40% of revenues). IMG is part of the Federation Francaise
de la Mode and takes part of shows during the Paris Fashion Week
since 1994. The company has also started to diversify into menswear
in late 2018. The company reported EUR178 million of revenue and
EUR54.5 million of EBITDA in the last twelve months ended September
30, 2019.


IM GROWTH: S&P Assigns Preliminary 'B-' ICR, Outlook Stable
-----------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B-' ratings to Isabel
Marant's holding company, IM Growth SAS, and the proposed EUR200
million senior secured notes.

S&P is also assigning a recovery rating of '3' to the proposed
debt, indicating its expectation of recovery in the 50%-70% range
(rounded estimate 60%) in the event of a default.

Isabel Marant's limited size and dependence on a single brand can
result in revenue and profit volatility. Isabel Marant (IM)
operates in the personal luxury industry, which in recent years has
shown positive organic growth in the low- to mid-single-digit
range. However, the industry is dominated by fast-changing trends
and there are no barriers to entry. Positive growth is linked to
the success of each collection, and customers' preferences can
change quickly. The company is expected to have generated about
EUR185 million of revenue in 2019 from sales of ready-to-wear
clothing and accessories through three lines: Isabel Marant (close
to 60% of revenues), Etoile (39%), and Men (Homme, 2%). The company
is smaller than peers and S&P views its reliance on a single brand
as significant.

Expansion in new markets might secure future growth but requires
investments. S&P said, "We recognize IM's successful track record
of expanding its operations over the past few years, establishing
an iconic French brand that has participated in the Paris fashion
week since 1994. Today France represents about 15% of sales and
rest of Europe about 30%. We believe there is still room for growth
in Europe but expansion outside Europe to secure significant future
growth will be challenging. We consider growth plans can be
adapted, but will still require increasing investments in marketing
and other activities." China represents almost 40% of the global
demand for luxury items, and IM generates about 2%-3% of its sales
there.

The narrow addressable market and need to continuously recruit new
customers may restrict revenue growth potential. IM's main
collection is in a relatively high price range, which it has been
able to maintain thanks to supportive customer engagement. However,
S&P estimates that this limits future growth. For this reason, it
views as positive that IM's Etoile line has a lower price point and
attracts a younger and broader audience. This strategy is
reinforced by the company's focus on increasing its online
presence, with two owned e-shops and partnerships with e-tailers,
and its social media presence, thanks to its network of ambassadors
that endorse the brand as part of its efforts to attract a younger
generation of customers.

Expansion of retail store network entails execution risk while
providing opportunities for revenue growth and greater control over
the brand's perception. IM has a strategic focus on increasing the
share of sales from its own network of retail stores, supported by
new stores openings. S&P said, "We think this strategy is an
important step in promoting the brand, particularly in new markets.
It will enhance the company's ability to control its brand equity,
monitor the customer shopping experience, and manage customer
relationships. This strategy will also transform the business and
therefore entails execution risk, mainly related to finding the
right locations to attract customers. We also consider that opening
retail stores where there are partnerships with wholesalers can
result in an increase in retail sales, but at the expense of the
wholesale business. The company's objective is to generate 35%-40%
of revenue from its retail operation (including from its own
website) compared with about 30% in September 2019. Based on the
performance of the company's newly opened stores, the average time
to achieve the targeted sales is 24 months, so we expect revenue
growth from the retail channel will outpace that from the wholesale
channel."

IM's wholesale strategy provides revenue visibility and some
protection against inventory risk. IM presents each collection in
showrooms before the manufacturing and subsequent delivery to
wholesalers and its own retail stores. Wholesale partners place
their orders at the showroom, which, in S&P's view, provides the
company with some visibility on future revenues through this
channel. Typically, 100% of full year wholesale transactions are
booked by July of the same year. Sales to wholesalers are made on
final orders. The company engages with wholesalers on the markdown
calendar to manage items that have not been sold, but, as a general
rule, does not accept returns.

S&P said, "We think the planned investment in marketing is likely
to support revenue growth, but erode margins in the next 12-18
months. To support planned expansion, especially in China and the
U.S., IM intends to increase its total marketing spending to about
8% of sales by 2023 from 5%-7% in 2017-2018, which was lower than
the industry average. We view as positive the company's strategy to
target outdoor marketing to reach the broadest possible audience
and increase overall brand awareness, and we anticipate that the
marketing effort will support revenue growth. However, we believe
the anticipated increase in marketing spending is likely to
slightly depress the company's EBITDA margin in the coming years.

"IM's high debt and equity sponsor ownership limits the appetite
for deleveraging, in our view. Following the anticipated debt
issuance and refinancing, we estimate IM's debt (after our
adjustments) at EUR245 million-EUR250 million. Our adjustments
include our estimate of EUR45 million-EUR50 million of operating
lease commitments. We project our adjusted debt-to-EBITDA ratio for
IM at 5.0x-5.5x and funds from operations (FFO) cash interest
coverage at 2.0x-2.5x. The company is currently owned by the French
private equity firm Montefiore Investment. This represents a
constraint to our rating assessment since we believe that,
typically, equity sponsors' interest in deleveraging is low. They
usually prefer to reinvest cash in business opportunities or return
it to shareholders."

IM's measures to strengthen its design effort and plan to open new
retail stores will likely depress free cash flow over the next
12-18 months. IM has put measures in place to reinforce its design
effort in the coming years to develop all product lines, and
especially support anticipated growth in the menswear and bags
collections. Additionally, the company might have to increase
capital expenditure (capex) to support the ongoing expansion of its
retail store network. S&P said, "We estimate that this will result
in modestly positive free operating cash flow (FOCF) generation
over the next few years. In our base case, we anticipate that the
company will generate FOCF of EUR5 million-EUR10 million over the
next 12-18 months, after slightly negative FOCF generation in
2019."

S&P said, "The stable outlook reflects our expectation that IM will
generate adjusted EBITDA margin of 25%-26% in the next 12 months
and maintain adjusted debt to EBITDA of 5.0x-5.5x and FFO cash
interest coverage of 2.0x-2.5x. We expect the increase in marketing
spending will erode the company's EBITDA margin in the coming years
but support revenue growth. We also expect the company will
generate positive FOCF of EUR5 million-EUR10 million over the next
12-18 months.

"We could consider a negative rating action if the growth plan is
not executed, resulting in weaker profitability than we currently
expect in our base case and negative FOCF on a sustained basis,
such that liquidity comes under pressure. This would also result in
a higher leverage ratio than we anticipate, with FFO cash interest
coverage falling below 2.0x. This will most likely materialize if
the company's investment in marketing and capex does not translate
into revenue growth, due for example, to material setbacks in the
opening of new stores or decline of the brand's appeal, which we
believe will result in an unsustainable capital structure and
increased refinancing risk.

"We could consider an upgrade if IM's EBITDA base expands beyond
our base case and the company generates significantly positive FOCF
on a sustained basis. This would most likely result from seamless
execution of the retail growth strategy and successful
international expansion that translates into uninterrupted revenue
growth and greater geographic diversification.

"To consider a positive rating action, we would need to witness an
improvement in credit metrics, such that FFO cash interest coverage
sustainably exceeds 3.0x and FOCF generation remains healthy."




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

[*] GERMANY: Works on Draft Law to Reduce Banking Sector Risks
--------------------------------------------------------------
Christian Kraemer at Reuters reports that Germany is working on a
draft law on reducing risks in the banking sector which foresees
the participation of creditors and shareholders in the event of a
bankruptcy, the finance ministry said on Tuesday, Jan. 28.

According to Reuters, the finance ministry said the draft law
provides for big banks to put aside 8% of their balance sheet total
as a buffer during a crisis.

Large banks will also have to put their refinancing on a more
long-term basis, the ministry said, adding that smaller banks will
be relieved of their disclosure requirements and also of the new
liquidity requirements, Reuters relates.




===========
G R E E C E
===========

GREECE: Fitch Raises LongTerm IDR to BB, Outlook Positive
---------------------------------------------------------
Fitch Ratings upgraded Greece's Long-Term Foreign-Currency Issuer
Default Rating to 'BB' from 'BB-'with a Positive Outlook.

KEY RATING DRIVERS

The upgrade of Greece's IDR reflects the following key rating
drivers and their relative weights:

High

General government debt sustainability continues to improve,
underpinned by a stable political backdrop, sustained GDP growth
and a continuing track record of fiscal outperformance against
targets. The Positive Outlook reflects improved prospects for
political stability and policy implementation following the July
parliamentary election and greater confidence that general
government debt will fall at a steady pace.

The Greek government, led by Kyriakos Mitsotakis, has made swift
progress in reducing tax rates on labour and capital and starting
to address banking sector asset quality issues. It is also making
efforts to provide new impetus to the privatisation programme. In
its view, these developments underpin Greece's macroeconomic
outlook and enhance confidence that the relationship with EU
creditors will remain constructive. For now its estimate for trend
GDP growth is unchanged at 1.2% but tangible progress in the
government's policy agenda (aimed at improving the business climate
and attracting private investment) could underpin an improvement in
medium-term GDP growth.

Fitch has greater confidence that the fiscal stance will remain
prudent. Fitch expects Greece's general government primary surplus
to have reached 4% of GDP in 2019, above the 3.5% target. This is
the fourth consecutive year in which Greece has outperformed
targets agreed with EU creditors. Fitch expects the primary surplus
to decline to 3.5% and 2.5% of GDP in 2020 and 2021. The government
intends to renegotiate the fiscal target from 2021 onwards as part
of an agreed process with the EU institutions that would take
account of the fiscal and growth outturns, and implementation of
reforms. A reduction of the target by 1pp of GDP could provide
substantial stimulus to the economy.

General government debt is set to decline steadily from the peak of
181.2% of GDP in 2018 to 161% by 2021. Although the stock of
general government debt will remain high over a prolonged period,
there are mitigating factors that support debt sustainability. The
concessional nature of Greece's public debt means that debt
servicing costs are low; 94% of general government debt is at fixed
interest rates, which implies low sensitivity to interest-rate
shocks, and the average maturity of Greek debt (21 years) is among
the longest across all Fitch-rated sovereigns. Interest payments to
revenue at 6.2% are well below the current 'BB' and 'BBB' medians
(7.8 and 7.1%, respectively). The nominal effective interest rate
on Greece's general government debt stock is well below that of
most eurozone peers. Moreover, Greece further consolidated its
presence in international capital markets in 2019 and this enhances
its fiscal financing flexibility.

The more stable political backdrop and evidence of swifter policy
implementation are likely to result in further improvements in both
the "political stability" and "government effectiveness" percent
ranks, which are part of the composite World Bank Governance
Indicator (WBGI). An improvement in governance is important within
the context of Fitch's sovereign rating assessment. Structural
features carry the heaviest weight in Fitch's Sovereign Rating
Criteria and, within these, governance indicators carry the
heaviest weight in its Sovereign Rating Model.

Fitch has revised the Country Ceiling to 'BBB+' from 'BBB-'. It is
now four notches above the Long-Term Foreign Currency IDR, up from
three previously. The revision follows the full lifting of capital
controls in September 2019. However, it remains below the maximum
possible six-notch uplift for eurozone member states, owing to the
weakness of the banking sector and the very recent history of
capital controls.

Medium

The Greek economic recovery gathered pace in 2019, with GDP growth
increasing to 2.2% from 1.9% in 2018 against the backdrop of a
weakening external environment. The export sector proved
particularly resilient. Consumer and business confidence indicators
are at multi-year highs while capital controls were fully lifted in
September 2019. Fitch expects real GDP growth of 2.5% in 2020 and
2021. Pent-up investment demand, a declining unemployment rate,
rising disposable income and a gradual reduction in the large
budget primary surpluses are set to support domestic demand.

The outlook for medium-term GDP growth depends on the recovery of
gross fixed investment, which remains 62% below its 2008 level and
is the lowest among all EU member states (relative to GDP). The
underlying investment trend remains weak. Gross fixed capital
formation grew by 2%yoy in 1Q-3Q19. The European Commission
estimates medium-term potential growth to be in a wide range of
0.6%-2.0% while the IMF's estimate is 0.9%. In its medium-term debt
dynamics calculation, Fitch uses the assumption of real GDP growth
gradually slowing to 1.2% by 2027.

Asset quality in the banking sector continues to improve. Greek
banks are reducing their high stock of non-performing loans (NPL)
mainly driven by asset sales, although on an aggregate basis NPLs
still represented a very high 42.1% of the sector's gross loans at
end-September 2019. Fitch expects banks to accelerate the pace of
reduction in 2020 by using the recently approved "Hercules" Asset
Protection Scheme, which provides a state guarantee of up to EUR12
billion on senior tranches. However, banks' asset-quality clean-up
plans, which aim to reduce non-performing exposure ratios in two to
four years to single digits remain sensitive to Greece's operating
environment and investors' appetite for distressed assets, as well
as the effectiveness of the legal framework.

Greece's 'BB' IDRs also reflect the following key rating drivers:

Greece has high income per capita levels, which far exceed 'BB' and
'BBB' medians. The profile of Greece's general government debt
stock is exceptionally favourable and fiscal performance over the
last four years has been strong relative to 'BB' category peers.
Governance indicators are also significantly stronger than in most
sub-investment-grade peers. These strengths are set against weak
medium-term growth potential, an extremely high level of
non-performing loans in the banking sector and high stocks of
general government debt and net external debt.

Greece's cash reserves are high at EUR26.8 billion (14.5% of GDP)
and have remained undrawn since the end of the programme in August
2018. The cash buffer covers Greece's gross financing requirement
well beyond 2021, providing a significant backstop against
refinancing risk. Yields on Greek bonds have decreased markedly:
the 10-year yield was 1.4% in early 2020, down from 4.3% a year
earlier. Greece has completed the early repayment of the most
expensive part (EUR2.7 billion) of the outstanding IMF loan.

The 2020 budget includes a package of growth-friendly measures
(0.6% of GDP) aimed at reducing tax rates and increasing social
benefits for families. The fiscal adjustment since 2015 has been
remarkable but has relied heavily on tax revenue and
under-execution of capital spending. In Fitch's view, the 2020
budget constitutes a first step towards rebalancing the fiscal
policy mix. The broad shift from taxes on labour and capital
towards less distortionary taxes (e.g. property tax) has the
potential to support private investment and employment. The cuts to
personal income tax target the lowest income households and should
therefore have a higher multiplier effect on GDP growth.

The improvement in the sovereign and banks' funding conditions
paved the way for the complete lifting of capital controls in
September 2019. Banks' funding and liquidity profiles continue to
improve, helped by deposit inflows and better access to market
financing, supported by a return of depositor and investor
confidence. Liquidity buffers are still fairly low but increasing.
Banks' capital ratios are above minimum requirements but
capitalisation remains highly vulnerable to asset quality shocks
given high capital encumbrance from unresolved problem assets. The
recovery in real estate prices supports collateral values and
investor appetite for Greek distressed assets.

External finances are a rating weakness. The stock of net external
debt (123% of GDP) and the net international investment position
(-134% of GDP) are significantly worse than the 'BB' medians (19%
and -25% of GDP). Risks are mitigated by the large share of
liabilities owed to official creditors but the large stock exposes
the country to swings in market sentiment. The current account
balance has improved significantly (-2.5% in 2019 from -14.5% of
GDP in 2008) but remains negative due to the large import content
of Greek exports. Improved external competitiveness, a solid
increase in tourist arrivals and the composition of goods' exports
(that tend to be less sensitive to cyclical moves in external
demand) have underpinned exports' growth in 2019 (9.5% in 3Q19).

SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO)

Fitch's proprietary SRM assigns Greece a score equivalent to a
rating of 'BBB-' on the Long-Term Foreign Currency IDR scale.

Fitch's sovereign rating committee adjusted the output from the SRM
to arrive at the final LT FC IDR by applying its QO, relative to
peers, as follows:

  - External finances: -1 notch, to reflect Greece's high net
external debt which is not captured in the SRM. Greece's current
account balance remains negative and the net international
investment position at -134% of GDP is markedly weaker than the
current BB median (-25% of GDP).

  - Structural Features: -1 notch, to reflect weaknesses in the
banking sector, including a very high level of NPLs, which
represent a contingent liability for the sovereign. The
government's stable parliamentary majority and the constructive
relationship with EU creditors reduce risks of financial market
instability.

Fitch's SRM is the agency's proprietary multiple regression rating
model that employs 18 variables based on three-year centred
averages, including one year of forecasts, to produce a score
equivalent to a LT FC IDR. Fitch's QO is a forward-looking
qualitative framework designed to allow for adjustment to the SRM
output to assign the final rating, reflecting factors within its
criteria that are not fully quantifiable and/or not fully reflected
in the SRM.

RATING SENSITIVITIES

Developments that could, individually or collectively, result in
positive rating action include:

  - Sustained track record of reduction in general government
indebtedness and greater confidence that the economic recovery will
be maintained over time.

  - Consistent track record of prudent economic and fiscal policy
underpinned by an orderly working relationship with official sector
creditors and a stable political environment.

  - Lower risks of crystallisation of banking sector risks on the
sovereign balance sheet.

Developments that could, individually or collectively, result in
negative rating action include:

  - A loosening of fiscal policy that undermines confidence in
general government debt sustainability.

  - Adverse developments in the banking sector increasing risks to
the real economy and the public finances.

  - Re-emergence of sustained large current account deficits,
further weakening the net external position.

KEY ASSUMPTIONS

Fitch assumes that the Greek government and the European creditors
will agree a reduction in the primary surplus target from 2021
onwards. More broadly, Fitch assumes that the Greek government will
maintain a constructive relationship with its creditors. This
reduces risk of confrontations that in the past have generated
financial instability.

In its debt dynamics calculation, Fitch assumes no drawdown of the
large cash buffer. Use of the cash buffer could result in a more
marked reduction in the stock of general government debt relative
to its baseline.

ESG CONSIDERATIONS

Greece has an ESG Relevance Score of 5 for Political Stability and
Rights as World Bank Governance Indicators have the highest weight
in Fitch's SRM and is therefore highly relevant to the rating and a
key rating driver with a high weight.

Greece has an ESG Relevance Score of 5 for Rule of Law,
Institutional and Regulatory Quality and Control of Corruption as
World Bank Governance Indicators have the highest weight in the SRM
and are therefore highly relevant to the rating and a key rating
driver with a high weight.

Greece has an ESG Relevance Score of 4 for Human Rights and
Political Freedoms as World Bank Governance Indicators have the
highest weight in the SRM and are relevant to the rating and are a
rating driver.

Greece has an ESG Relevance Score of 4 for Creditor rights as
willingness to service and repay debt is relevant to the rating and
is a rating driver for Greece, as highlighted by the fairly recent
restructuring of public debt in 2012.




=============
I R E L A N D
=============

BABSON EURO 2015-1: Moody's Affirms EUR12.4MM Class F Notes at B1
-----------------------------------------------------------------
Moody's Investors Service upgraded the ratings on the following
notes issued by Babson Euro CLO 2015-1 B.V:

EUR32,600,000 Class B-1R Senior Secured Floating Rate Notes due
2029, Upgraded to Aa1 (sf); previously on Oct 25, 2017 Definitive
Rating Assigned Aa2 (sf)

EUR10,600,000 Class B-2R Senior Secured Fixed Rate Notes due 2029,
Upgraded to Aa1 (sf); previously on Oct 25, 2017 Definitive Rating
Assigned Aa2 (sf)

EUR22,000,000 Class CR Senior Secured Deferrable Floating Rate
Notes due 2029, Upgraded to Aa3 (sf); previously on Oct 25, 2017
Definitive Rating Assigned A2 (sf)

EUR21,600,000 Class DR Senior Secured Deferrable Floating Rate
Notes due 2029, Upgraded to A3 (sf); previously on Oct 25, 2017
Definitive Rating Assigned Baa2 (sf)

Moody's has also affirmed the ratings on the following notes:

EUR206,700,000 Class A-1R Senior Secured Floating Rate Notes due
2029, Affirmed Aaa (sf); previously on Oct 25, 2017 Definitive
Rating Assigned Aaa (sf)

EUR5,300,000 Class A-2R Senior Secured Fixed Rate Notes due 2029,
Affirmed Aaa (sf); previously on Oct 25, 2017 Definitive Rating
Assigned Aaa (sf)

EUR26,400,000 Class A-3 Senior Secured Fixed/Floating Rate Notes
due 2029, Affirmed Aaa (sf); previously on Oct 25, 2017 Affirmed
Aaa (sf)

EUR31,200,000 Class E Senior Secured Deferrable Floating Rate Notes
due 2029, Affirmed Ba2 (sf); previously on Oct 25, 2017 Affirmed
Ba2 (sf)

EUR12,400,000 Class F Senior Secured Deferrable Floating Rate Notes
due 2029, Affirmed B1 (sf); previously on Oct 25, 2017 Upgraded to
B1 (sf)

Babson Euro CLO 2015-1 B.V., issued in September 2015, is a
collateralised loan obligation (CLO) backed by a portfolio of
mostly high-yield senior secured European loans. The portfolio is
managed by Barings (U.K.) Limited. The transaction's reinvestment
period ended in October 2019.

RATINGS RATIONALE

The rating actions on the notes are primarily a result of the
benefit of the transaction having reached the end of the
reinvestment period in October 2019.

In light of reinvestment restrictions during the amortisation
period, and therefore the limited ability to effect significant
changes to the current collateral pool, Moody's analysed the deal
assuming a higher likelihood that the collateral pool
characteristics would maintain an adequate buffer relative to
certain covenant requirements.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base case,
Moody's analysed the underlying collateral pool as having a
performing par and principal proceeds balance of EUR 405.5 million,
defaulted par of EUR 3.25 million, a weighted average default
probability of 23.5% (consistent with a WARF of 3101), a weighted
average recovery rate upon default of 44.0% for a Aaa liability
target rating, a diversity score of 56 and a weighted average
spread of 3.92%.

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate on future
defaults is based primarily on the seniority of the assets in the
collateral pool. In each case, historical and market performance
and a collateral manager's latitude to trade collateral are also
relevant factors. Moody's incorporates these default and recovery
characteristics of the collateral pool into its cash flow model
analysis, subjecting them to stresses as a function of the target
rating of each CLO liability it is analysing.

Moody's notes that the December 2019 trustee report was published
at the time it was completing its analysis of the November 2019
data. Key portfolio metrics such as WARF, diversity score, weighted
average spread and life, and OC ratios exhibit little or no change
between these dates.

Methodology Underlying the Rating Action:

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

Counterparty Exposure:

The rating action took into consideration the notes' exposure to
relevant counterparties, such as account bank, using the
methodology "Moody's Approach to Assessing Counterparty Risks in
Structured Finance" published in November 2019. Moody's concluded
the ratings of the notes are not constrained by these risks.

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

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the note,
in light of uncertainty about credit conditions in the general
economy. CLO notes' performance may also be impacted either
positively or negatively by 1) the manager's investment strategy
and behaviour and 2) divergence in the legal interpretation of CDO
documentation by different transactional parties because of
embedded ambiguities.

Additional uncertainty about performance is due to the following:

  -- Portfolio amortisation: The main source of uncertainty in this
transaction is the pace of amortisation of the underlying
portfolio, which can vary significantly depending on market
conditions and have a significant impact on the notes' ratings.
Amortisation could accelerate as a consequence of high loan
prepayment levels or collateral sales by the collateral manager or
be delayed by an increase in loan amend-and-extend restructurings.
Fast amortisation would usually benefit the ratings of the notes
beginning with the notes having the highest prepayment priority.

  -- Recovery of defaulted assets: Market value fluctuations in
trustee-reported defaulted assets and those Moody's assumes have
defaulted can result in volatility in the deal's
over-collateralisation levels. Further, the timing of recoveries
and the manager's decision whether to work out or sell defaulted
assets can also result in additional uncertainty. Moody's analysed
defaulted recoveries assuming the lower of the market price or the
recovery rate to account for potential volatility in market prices.
Recoveries higher than Moody's expectations would have a positive
impact on the notes' ratings.

In addition to the quantitative factors that Moody's explicitly
modelled, qualitative factors are part of the rating committee's
considerations. These qualitative factors include the structural
protections in the transaction, its recent performance given the
market environment, the legal environment, specific documentation
features, the collateral manager's track record and the potential
for selection bias in the portfolio. All information available to
rating committees, including macroeconomic forecasts, input from
other Moody's analytical groups, market factors, and judgments
regarding the nature and severity of credit stress on the
transactions, can influence the final rating decision.




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

GLOBAL BLUE: Moody's Reviews B1 CFR for Upgrade on Far Point Deal
-----------------------------------------------------------------
Moody's Investors Service placed the ratings of Global Blue Finance
S.a r.l., the indirect holding company of Global Blue Acquisition
B.V., on review for upgrade, including Global Blue's B1 corporate
family rating and the B1 senior secured instrument ratings issued
at Global Blue Acquisition B.V., a fully-owned and guaranteed
subsidiary of Global Blue, as well as Global Blue's probability of
default rating of B1-PD.

This rating action follows Global Blue's announcement that it will
be listed on the NYSE through a merger with Far Point Acquisition
Corporation, a special purpose acquisition company co-sponsored by
the institutional asset manager Third Point LLC.

Upon successful closing of the merger as outlined, including a
refinancing that results in full repayment of all existing debt,
Moody's expects to upgrade the ratings by up to one notch.

RATINGS RATIONALE

The review for upgrade is triggered by Global Blue's listing
announcement and Moody's expectation that the company will continue
its trajectory of profitable growth without increasing leverage and
while maintaining ample liquidity. Global Blue's performance has
been consistently strong with an average of 4% revenue growth and
10% EBITDA growth over the past five years, with November YTD
growth of 8% on revenue and 10% on EBITDA, as reported by the
company. The company's positive results are underpinned by its
leading market position in the VAT refund segment, as well as
overall positive travel and luxury retail growth trends. Moody's
expects these underlying drivers are likely to continue absent
exogenous shocks.

The merger with Far Point will see Global Blue's current owners,
Silver Lake Partners and Partners Group, reduce their combined
stake in the company to 42% and receive close to EUR900 million in
proceeds, assuming no redemptions by current Far Point shareholders
under the transaction. The transaction is valued at EUR2.3 billion
and will include a EUR630 million term loan to refinance the
existing debt of the same amount. Post-transaction, Global Blue
will also have access to a EUR100 million revolving credit facility
which is expected to be undrawn at closing.

In addition to Far Point with 39% of the shares, Global Blue's new
shareholders will include Third Point with a 5% shareholding, Ant
Financial Services Group, a member of the Alibaba group and
operator of Alipay with 7%, and other investors also at 7%,
assuming no redemptions by current Far Point shareholders under the
transaction.

The listing will have some benefits from the governance
perspective, which is an important factor that Moody's assesses as
part of its credit analysis. Trading on the NYSE and reporting to
the SEC will increase Global Blue's transparency for investors
while retaining senior management that has successfully grown the
business. Given the transaction assumes EUR600 million net debt at
closing, this implies a marginal impact on net leverage of 0.4x
versus Global Blue's November figure. At the same time, the key
shareholders will continue to be hedge funds and private equity
firms with some degree of risk appetite, although the ownership of
the private equity shareholders will likely reduce over time. Also,
Global Blue announced an expected capital return (dividend or share
buyback) equal to EUR40 million for the financial year ending March
31, 2021, with a policy aimed at increasing the absolute amount
over time, subject to meeting the net leverage guidance of net debt
/ Adjusted EBITDA of less than 2.5x.

Global Blue is expected to continue enjoying good liquidity
following the listing with a material cash balance and an undrawn
EUR100 million revolving credit facility which the company may
utilize to address its seasonal working capital swings.

STRUCTURAL CONSIDERATIONS

Moody's rates the EUR630 million senior secured Term Loan B and the
EUR80 million revolving credit facility issued by Global Blue
Acquisition B.V., a subsidiary of Global Blue Finance S.a r.l.,
(which is the indirect holding company of the operating
subsidiaries and the entity to which the CFR is assigned), at B1 in
line with the CFR. Following the listing, the existing debt is
expected to be refinanced.

WHAT WOULD CHANGE THE RATING UP/DOWN

Moody's would expect to upgrade the ratings of Global Blue upon the
closing of the transaction as outlined.

Global Blue Finance S.a r.l., which is domiciled in Luxembourg, is
a holding company of the Global Blue group. The group is a leading
provider of VAT and Goods and Service Tax (GST) refunds to
travelers, as well as added-value payment solutions, such as
currency conversion services. For FY2019 (ended March 31, 2019),
the company reported revenue and EBITDA (as adjusted by the
company) of approximately EUR409 million and EUR170 million,
respectively.

PRINCIPAL METHODOLOGY

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


PARK LUXCO 3: Moody's Affirms B1 CFR & Alters Outlook to Negative
-----------------------------------------------------------------
Moody's Investors Service affirmed the B1 corporate family rating
and B1-PD probability of default rating of Park LuxCo 3 S.C.A., a
holding company of the German parking operator Apcoa. Concurrently,
Moody's affirmed the B1 ratings on the EUR420 million senior
secured term loan B due 2024 which will be increased to EUR514
million upon completion of the transaction as well as the EUR35
million revolving credit facility due 2023 both issued by APCOA
Parking Holdings GmbH. The outlook on all entities was changed to
negative from stable.

Net proceeds from the term loan add-on will be used to fund a EUR90
million distribution to shareholders.

RATINGS RATIONALE

"T[he] rating action reflects the risk that Apcoa's credit metrics
may remain sustainably outside the parameters set by Moody's to
maintain the B1 CFR, notably its Moody's-adjusted debt/EBITDA
excluding operating leases which will increase to 6.4x from 5.4x as
a result of the dividend recapitalization and pro forma the
acquisitions completed to date", says Eric Kang, Moody's lead
analyst for Apcoa. "New business wins and like-for-like EBITDA
growth could support deleveraging to a Moody's-adjusted debt/EBITDA
of below 6.0x over the next 12-18 months, a level more commensurate
with the current B1 rating, but this entails execution risk and
there is a risk that further debt-funded small bolt-on acquisitions
will hinder the pace of deleveraging", adds Mr Kang.

That said, Moody's recognizes the company's strong operating track
record with respect to new business wins, retention rates, volume
and pricing improvements on existing contracts, and cost
efficiencies. This led to an increase of the company's adjusted
EBITDA to around EUR84 million in 2019 from EUR62 million in 2016.

Apcoa's rating also reflects its (1) leading market position in the
European parking operator market with a well-diversified contract
portfolio, (2) revenue and earnings visibility, coupled with strong
retention rates, and (3) significant proportion of revenue
generated from lease contracts with moderate exposure to volume
risks.

However, the rating is constrained by (1) high leverage, (2)
contract renewal risks in a fragmented and competitive market,
although the amount of contracts up for renewal will decrease in
2020-2021, (3) medium- to long-term organic growth prospects
subject to technological disruptors, and (4) sizeable capital
spending requirements, although to a much lesser extent than
concession operators.

ESG CONSIDERATIONS

Environmental risk for the broad business and consumer services
industry is low. However, in the longer term (10+ years), the
parking industry potentially faces challenges from the emergence of
autonomous vehicles, coupled with an overall decline in private car
ownership, both resulting in a reduction in overall car volumes on
the street.

Social risk for the broad business and consumer services industry
is moderate. The company's continued investments in its digital
infrastructure will support its customer value proposition over
time but this will also result in an increased need to adequately
protect customer data because failings in that regard could lead to
breach of regulations and/or loss of customer trust.

Governance risk mainly relate to the company's private-equity
ownership, which tends to create some uncertainty around a
company's future financial policy. Often in private
equity-sponsored deals, owners tend to have higher tolerance for
leverage, a greater propensity to favour shareholders over
creditors, as well as a greater appetite for mergers and
acquisitions to maximise growth and their return on their
investments.

LIQUIDITY

Apcoa's liquidity is adequate reflecting Moody's expectation of
positive free cash flow in the next 12-18 months, cash balances of
around EUR52 million as of December 2019, and access to an undrawn
EUR35 million revolving credit facility. The nearest debt maturity
is the revolving credit facility which expires in March 2023.

Moody's also expects the company to maintain sufficient covenant
headroom under its net leverage covenant tested quarterly (new
target of 8.0x with no step-down compared to a reported pro forma
net leverage of 4.8x as of December 2019).

STRUCTURAL CONSIDERATIONS

The term loan B and the RCF are rated B1, in line with the CFR,
reflecting their pari passu ranking and the fact that there is no
other debt instrument in the capital structure.

Park LuxCo 3 S.C.A. is the top entity of the restricted group of
the senior secured credit facilities issued by its direct
subsidiary APCOA Parking Holdings GmbH. Park LuxCo 3 S.C.A. is not
a guarantor under the senior facilities agreement but provides
stand-alone downstream guarantee as well as a pledge on the shares
of APCOA Parking Holdings GmbH it owns. Furthermore, missed
payments or an insolvency of Park LuxCo 3 S.C.A. could also trigger
an event of default under the senior facilities agreement.

RATING OUTLOOK

The negative outlook reflects Apcoa's weaker credit metrics upon
completion of the dividend recapitalization. Moody's will consider
stabilizing the outlook if the company's credit metrics revert back
to levels more commensurate for the B1 CFR over the next 12-18
months and the company demonstrates a commitment to sustainably
maintain credit metrics within those parameters.

FACTORS THAT COULD LEAD TO AN UPGRADE/DOWNGRADE

Downward pressure on the ratings could arise if (1) the
Moody's-adjusted debt/EBITDA sustainably remains above 3.5x (above
6.0x excluding operating leases) or (2) free cash flow generation
or liquidity were to worsen. Any material debt-funded acquisition
or further shareholder friendly action could put downward pressure
on the ratings.

Upward rating pressure could arise over time if (1) the
Moody's-adjusted debt/EBITDA sustainably reduces towards 3.0x
(below 5.0x excluding operating leases) and (2) the company
maintains a solid liquidity profile with the Moody's-adjusted free
cash flow/debt improving to above 1.5% (above 5% excluding
operating leases).

PRINCIPAL METHODOLOGY

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

COMPANY PROFILE

Apcoa is a leading European parking operator, managing
approximately 1.6 million car parking spaces across approximately
9,000 sites in 13 countries. It generated revenues of EUR716
million in 2019.



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

SCHOELLER PACKAGING: S&P Affirms 'B' LongTerm ICR, Outlook Stable
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S&P Global Ratings affirmed its 'B' long-term issuer credit rating
on Schoeller Packaging B.V. S&P also affirmed its 'B' issue ratings
on its senior secured notes.

S&P said, "Schoeller's credit metrics will remain in line with our
rating. We expect Schoeller Packaging B.V. to generate EUR537
million in revenues in 2019 and S&P Global Ratings-adjusted EBITDA
of EUR62 million. In contrast to our previous expectation, we now
forecast that free operating cash flow (FOCF) will be negative. The
negative FOCF reflects higher working capital outflows than we
expected and higher capital expenditure (capex), in addition to
more challenging market conditions.

"We expect EBITDA margins and FOCF to improve in 2020. We expect
EBITDA to improve in 2020, as Schoeller incurs lower extraordinary
costs. The years 2017 and 2018 were characterized by high
exceptional costs linked to a change in ownership, litigation
costs, and settlement payments. In 2020, we forecast that EBITDA
will benefit from the new products launched in 2019 and cost-saving
initiatives.

"In 2020, we expect a slight improvement in FOCF, supported by
EBITDA growth and a tighter grip on working capital and capex. We
also expect FOCF to benefit from the lower interest burden
Schoeller has achieved in the recent refinancing. That said, we
continue to believe that Schoeller's small scale makes its cash
flow generation vulnerable to unforeseen costs.

"We treat the shareholder loan from Brookfield Business Partners
L.P. as equity. We have assessed the EUR65 million loan extended by
Brookfield. We believe that this loan complies with our criteria
for non-common equity treatment. Consequently, from now on, our
debt calculation excludes any drawings (currently EUR7.6 million)
under this facility.

"The stable outlook reflects our expectation that Schoeller's
leverage will improve to around 5.3x over the next 12 months, and
that FOCF generation will turn positive, albeit minimal, in 2020.

"We could lower the ratings if FOCF remains negative on a sustained
basis and adjusted debt to EBITDA increases above 7.0x. We could
also lower the rating if we expected weaker liquidity or if funds
from operations (FFO) cash interest coverage fell below 1.5x. The
ratings could also come under pressure if we expected that
management's actions and financial policy, including the planned
program to invest in new products, would not translate into steady
EBITDA growth or would take longer than we expected to
materialize.

"We could raise the ratings if the company showed a
higher-than-expected improvement in profitability, leading to
stronger credit metrics in line with what we view as commensurate
with an aggressive financial risk profile over a sustained period.
Specifically, this would include adjusted FFO to debt of more than
15% and debt to EBITDA of less than 4.5x, on a sustained basis,
supported by the group's owners committing to a financial policy
commensurate with these metrics."


TELEFONICA EUROPE: S&P Assigns BB+ Rating on New Hybrid Securities
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S&P Global Ratings assigned its 'BB+' long-term issue rating to the
proposed hybrid securities to be issued by Telefonica Europe B.V.
(BBB/Stable/--), the Dutch finance subsidiary of Spain-based
telecommunications group Telefonica S.A. (BBB/Stable/A-2), which
will guarantee the proposed securities.

Telefonica plans to use the securities' proceeds to replace
existing hybrid capital instruments, primarily the GBP600 million
hybrid with a first call date in November 2020, of which GBP171.5
million is outstanding, and the EUR625 million hybrid with a first
call date in September 2021, of which about EUR293 million is
outstanding. The company plans to repurchase these instruments by
way of a tender offer. S&P said, "We understand that Telefonica
does not intend to permanently increase its stock of hybrids and
wishes to maintain the size of its hybrid portfolio at the current
level, after completion of the replacement and liability management
transaction. We calculate outstanding hybrids to S&P Global
Ratings-adjusted capitalization at 13%-14% for 2019-2021, including
the proposed issuance and replacement." This is below the 15% limit
on hybrid capitalization that, if exceeded, would lead us to
subject the group's financial policies to further scrutiny.

S&P said, "We will assess as having minimal equity content a share
of other existing hybrids  equivalent to proceeds from the proposed
new hybrid (including the remaining portions of the GBP600 million
hybrid with a first call date in November 2020 and the EUR625
million hybrid with a first call date in September 2021). This is
because we expect the company to keep the overall hybrid portfolio
constant.

"We classify the proposed hybrid as having intermediate equity
content until the first reset date because it meets our criteria in
terms of subordination, permanence, and optional deferability
during this period. Consequently, when we calculate Telefonica
S.A.'s adjusted credit ratios, we will treat 50% of the principal
outstanding under the proposed hybrids as equity rather than debt,
and 50% of the related payments on these securities as equivalent
to a common dividend."

The two-notch difference between S&P's 'BB+' issue rating on the
proposed hybrid securities and its 'BBB' issuer credit rating (ICR)
on Telefonica S.A. signifies that it has made the following
downward adjustments from the ICR:

-- One notch for the proposed securities' subordination, because
S&P's long-term ICR on Telefonica S.A. is investment grade; and

-- An additional notch for payment flexibility due to the optional
deferability of interest.

The notching of the proposed securities points to our view that
there is a relatively low likelihood that Telefonica Europe will
defer interest payments. Should our view change, we may
significantly increase the number of downward notches that we apply
to the issue rating. We may lower the issue rating before we lower
the ICR.

KEY FACTORS IN S&P'S ASSESSMENT OF THE SECURITIES' PERMANENCE

Although the proposed securities are perpetual, Telefonica Europe
can redeem them between the first call date (which falls at least
seven years from issuance) and the first reset date, and every year
thereafter. In such cases, the group intends to replace the
proposed instruments, although it is not obliged to do so. In S&P's
view, this statement of intent and the group's track record
mitigates the likelihood that it will repurchase the securities
without replacement.

The coupon to be paid on the proposed securities equals the sum of
the applicable swap rate plus a margin, with the applicable swap
rate resetting every seven years from the first reset date. The
margin to be paid on the proposed securities will increase by 25
basis points (bps) not earlier than 10 years after the issue date,
and by a further 75 bps 20 years after the first reset date. S&P
views the cumulative 100 bps as a moderate step up, providing
Telefonica Europe with an incentive to redeem the instruments after
about 27 years.

Consequently, S&P will no longer recognize the proposed securities
as having intermediate equity content after the first reset date.
This is because the remaining period until its economic maturity
would, by then, be less than 20 years.

KEY FACTORS IN S&P'S ASSESSMENT OF THE SECURITIES' SUBORDINATION

The proposed securities will be deeply subordinated obligations of
Telefonica Europe, and will have the same seniority as the hybrids
issued in 2013, 2014, 2016, 2017, 2018, and 2019. As such, they
will be subordinated to senior debt instruments, and are only
senior to common and preferred shares. S&P understands that the
group does not intend to issue any such preferred shares.

KEY FACTORS IN S&P'S ASSESSMENT OF THE SECURITIES' DEFERABILITY

S&P said, "In our view, Telefonica Europe's option to defer payment
of interest on the proposed securities is discretionary and it may
therefore choose not to pay accrued interest on an interest payment
date. However, if an equity dividend or interest on equal-ranking
securities is paid, or if common shares or equal-ranking securities
are repurchased, any outstanding deferred interest payment would
have to be settled in cash.

"That said, this condition remains acceptable under our rating
methodology because once the issuer has settled the deferred
amount, it can choose to defer payment on the next interest payment
date."

The issuer retains the option to defer coupons throughout the
securities' life, although Telefonica intends to not defer coupons
for more than five years. The deferred interest on the proposed
securities is cash cumulative and compounding.


TRAVIATA BV: Fitch Assigns B+ LongTerm IDR, Outlook Stable
----------------------------------------------------------
Fitch Ratings assigned Traviata B.V. a final Long-Term Issuer
Default Rating of 'B' with Stable Outlook and senior secured rating
of 'B+'/'RR3'.

KEY RATING DRIVERS

Traviata B.V.

Structural Subordination: Distributions from Axel Springer SE (AS;
AS opco) are Traviata's sole source of earnings and cash flow to
support its debt interest costs. Fitch views Traviata's cash flow
stream as having minimal or no diversity and its obligations as
structurally subordinated to the operating needs at AS opco and any
future operating subsidiary level borrowings. Fitch notes that
distributions could decline and pressure debt service at Traviata
if cash flow or profitability at AS opco is impaired. Some
mitigation is provided by the existence of the revolving credit
facility.

Deleveraging Unlikely: AS opco's standalone net leverage forecast
for 2020 is 3.8x. Fitch expects moderate deleveraging at the opco
level by 2023. Overlaying Traviata's debt with AS opco's debt on a
proportional consolidation basis implies a significantly more
leveraged entity than AS opco, with proportionate holdco net
leverage of 6.8x in 2020 declining to 6.4x in 2022.

Limited Control of Dividends: Fitch believes that AS opco's
strategy and financial policy will not change materially following
the change in shareholding structure. Fitch views the introduction
of a minority investor as being neutral for AS opco's credit
profile. Dividends are paid based on available free cash flow (FCF)
each year and will be subject to the joint voting rights of the
principal shareholders. Potential cash flow or dividend weakness is
mitigated by an undrawn RCF providing liquidity broadly equal to
2.8 years' interest payments.

Instrument Rating, Recovery: For credits with an IDR in the 'B'
category, Fitch performs a bespoke recovery analysis reflecting a
distressed scenario to assign its instrument ratings. In this case,
Fitch has assumed that AS opco would be treated as a going concern
in a distress scenario in which growth stalled, cost savings failed
to materialise, and/or a change in the market and competitive
landscape led to lost market share.

For this exercise, Fitch considered a distressed EBITDA for the
opco to be EUR503 million and applied an EV/EBITDA multiple of 6x
to reflect the company's weaker position, profitability, and growth
prospects in distress. After claims of 10% and opco debt were
subtracted, the remaining value of EUR1,208 million was adjusted
for KKR's 44.3% ownership stake. That value of EUR535 million is
directly available to recover the debt at the holdco (Traviata
B.V.) of EUR850 million, which includes the Term Loan B of EUR725
million and the fully drawn RCF of EUR125 million.

The calculation yields a recovery percentage of 63%, falling within
the 'RR3' band (51%-70% recovery). Fitch's methodology allows for a
one-notch uplift of the instruments to 'B+' from Traviata's 'B'
IDR.

Axel Springer SE

Digitally-led Media Portfolio: Management has transformed AS from
its roots in print news into a well-positioned portfolio of
digitally-led media businesses with 84% of 2018 adjusted EBITDA
from digital. The heart of the portfolio is Classified Media, a
high-margin online business generating 61% of 2018 adjusted EBITDA.
The News Media division, which accounts for a further 28% of
adjusted EBITDA, is a diverse group of news businesses including
leading German newspapers, Bild and Die Welt.

Management understands the need to digitise these businesses, with
39% of news revenue deriving from digital. Further diversification
is provided through Marketing Media, mainly its online comparison
business.

Strong Position in Classified: The Classified Media business has
been built both organically and through a series of acquisitions.
Its core focus is in the online recruitment and real estate sectors
with market-leading positions in Germany, France, the UK and
Belgium. Where it is not the market leader it is the number two
company.

In Fitch's view, strong market leadership is a key operational
strength with strong client retention and consistent revenue per
advertiser (ARPA) trends. Market leadership, which AS has in most
of its markets, helps sustain disproportionately high ARPA relative
to the rest of the market. Markets are often characterised as
oligopolies with profitability concentrated among the top two
providers. In 2018, 79% of AS Classified's income was generated by
market-leading companies.

Classified Outlook: Digital classified advertising is a fairly new
business sector that has rapidly grown as the internet has evolved
and has displaced traditional print-based advertising. This has
hastened the decline of some print-based media, including regional
newspapers in some countries. AS exited/sold its German regional
business in 2013 for EUR920 million. Fitch regards management's
decision to concentrate on digital at an early stage to have been
perceptive.

Online classified markets have grown strongly, while retaining
further room to grow, both as the sector continues to displace
print and through economically-driven expansion. Fitch expects key
performance indicators in AS's markets, such as ARPA, to maintain
solid growth trends.

Recessionary Downside Untested: Online classified businesses are
high margin, with market-leading businesses exhibiting strong
renewal rates, positive ARPA trends and solid growth in
benign/positive economic conditions. The degree to which the
business model/sector would respond to a major economic shock is to
some extent untested, given that the sector was far younger in the
last downturn in 2009. AS's classified business showed weakness at
that time but still generated profits.

In Fitch's view, the current size of the business, its market
leadership and high margin profile are likely to support
profitability in the case of a major downturn. Volume weakness
driven by a slowdown in recruitment and real-estate
turnover/transactions would be inevitable, leading to revenue
pressure and margin contraction. Nevertheless, Fitch considers the
business is likely to show greater resilience than some other forms
of advertising, for example, display or banner advertising. A major
slowdown across Europe would have an impact on FCF but would need
to be severe before forecast dividends became vulnerable.

Print News in Secular Decline: News media face secular shifts,
including audience fragmentation as younger people access news
through social media and digital news outlets, ageing readerships
contract and the attendant immediacy of digitally accessed news
content. Unlike the decline of regional news/magazines, Fitch
believes these factors represent more protracted challenges.
Meanwhile, newspaper circulation and readership in Germany remains
high. AS's national business has managed circulation decline well
and the news division is soundly profitable. Changing consumption
habits are inevitable. Management's focus on digital is the right
one.

Restructuring in News: Management intends to transition the news
division to an all-digital environment, recognising the established
trends across the industry. On a divisional level, news is solidly
profitable while the national titles are subject to top-line
pressure. Fitch believes that continued restructuring of this
business is likely. Average employees within news accounted for 43%
of the group total and was the largest divisional headcount in
2018. Editorial staff can be expected to be more highly paid. Fitch
will therefore continue to assume a level of restructuring charge
above the funds from operations (FFO) line.

Leverage and FCF: AS Opco has managed FFO net leverage historically
at between 2.5x and 3.5x. KKR and management have advised neither
expect a material change to this policy. Looking through a spike in
2019 caused by the completion then sale and leaseback of its new
Berlin headquarters, its base case assumes gradual deleveraging and
that FFO net leverage will remain between 3.5x and 4.0x until 2022,
a level consistent with its credit view on AS Opco.

Given the structure of the holdco funding, an ability to generate
planned dividends (and thereby service holdco debt) is important.
AS is highly cash generative, producing a pre-dividend FCF margin
(adjusted for Berlin capex) of 11% and absolute FCF of EUR333
million in 2018 and an average EUR278 million between 2015 and
2018.

DERIVATION SUMMARY

Traviata's 'B' IDR has been derived by notching against AS opco's
private rating based on factors including income stream quality,
dividend diversification, proportionate holdco leverage, liquidity,
and dividend control and stability.

KEY ASSUMPTIONS

  - Revenue growth of -3.1% in the year ending December 2019
(FY19), and between zero and +2% a year thereafter.

  - EBITDA margins of 20.3% in FY19 (20.0% IFRS16 reported basis)
declining to 18.2% in FY20 before improving to 21.6% in FY23. This
is supported by a continued shift in revenue mix towards classified
media.

  - Restructuring and other one-off expenses of EUR140 million and
EUR53 million, respectively, are anticipated between FY19 and FY21.
EUR18 million a year is treated as recurring and included in
EBITDA, and the remainder is excluded from EBITDA.

  - Netted one-off cash charges of EUR269 million are excluded from
FFO between FY19 and FY21, relating to non-recurring restructuring
charges, long-term incentive plan payments, consulting costs and
non-recurring dividends to non-controlling interests.

  - Maintenance capex capital intensity assumed at 5.65% (including
capitalised development costs). EUR156 million additional capex in
FY19 and FY20 relates to the new Berlin headquarters, front loaded
with EUR110 million in FY19.

  - Acquisitions net of disposals of EUR475 million in FY19
followed by EUR100 million a year from FY21.

  - Dividends of EUR227 million paid in FY19 followed by EUR125
million a year thereafter.

  - Debt drawdowns of EUR615 million in FY19 in support of
acquisitions and a temporary peak in capex.

  - Settlement of new Berlin headquarters in FY20 with proceeds of
EUR395 million, net of tax, coinciding with a EUR240 million debt
repayment and a moderate increase in long-term rentals by EUR4
million.

  - Fitch has assumed no post-tender offer squeeze out of remaining
public minorities.

Holdco Debt Recovery Assumptions

  - Post-restructuring EBITDA EUR503 million.

  - Stressed EV multiple of 6x.

  - 10% administration claims deducted before applying recovery
value to Traviata holdco debt.

  - Value recovered by shareholders in Axel Springer SE of EUR1,208
million.

  - Value adjusted for Traviata's 44.3% ownership stake in Axel
Springer SE is EUR535 million.

  - Traviata's drawn debt of EUR850 million, which includes the
Term Loan B of EUR725 million and the fully drawn RCF of EUR125
million.

RATING SENSITIVITIES

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

  - A sustained decline in net proportional AS holdco leverage
below 6.0x.

  - FFO-adjusted net leverage below 3.5x on a sustained basis may
be positive for its view of AS opco.

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

  - A sustained increase in net proportional AS holdco leverage
above 7.5x.

  - AS holdco dividend interest coverage of less than 1.1x and/or
drawdown on the holdco RCF to fund interest costs.

  - Depending on financing (debt versus equity) a squeeze-out of
post-tender AS public minorities, to the extent this was to
materially weaken the proposed capital structure.

  - AS opco FFO adjusted net leverage above 4.5x on a sustained
basis; net debt/CFO less capex above 5.5x on a sustained basis,
excluding the Berlin headquarters capex; and/or an expected erosion
of competitive position would be viewed as negative for its view of
AS opco.

LIQUIDITY AND DEBT STRUCTURE

Traviata's liquidity is satisfactory, supported by the EUR125
million RCF to make annual interest payments of about EUR37
million, stepping up to EUR44 million in 2022 in its base case. A
springing net proportionate leverage covenant is set at 8.75x once
the RCF is drawn above 40%.

AS's liquidity is strong, supported by EUR282 million cash and
equivalents as well as access to EUR1,500 million in RCFs with
maturities greater than one year. It had drawn EUR453 million as at
FYE18.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Axel Springer SE's internal rating is used to derive the Traviata
B.V. rating via investment holding company criteria. This is
disclosed in the rating derivation. The level of the Axel Springer
rating is not disclosed, as it is a private rating. This is in line
with RPM requirements.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or to the way in which they are being
managed by the entity.




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R U S S I A
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MECHEL OAO: Decision on Future of Elga Coal Project Due in Q1
-------------------------------------------------------------
Anastasia Lyrchikova, Gleb Stolyarov, and Tatiana Voronova at
Reuters report that a decision on the future of the Elga coal
project, one of the world's largest coking coal deposits, is likely
in the first quarter of 2020, the regional governor said in an
interview.

Expansion of the mine, first developed by Russian steel and coal
producer Mechel, has stalled in recent years as the project in the
remote Yakutia region of Russia's Far East demands significant
investment to reach its annual operating capacity of 30 million
tonnes, Reuters relates.

According to Reuters, Mechel, controlled by businessman Igor
Zyuzin, has been weighing its options regarding Elga, its biggest
growth asset, for some time as it continues talks with creditors
over restructuring US$6 billion in loans.

It sold a 49% stake in the mine in 2016 to one of its main
creditors, Gazprombank, as part of a debt restructuring process,
Reuters recounts.

Aysen Nikolaev, head of Russia's Yakutia region, said in an
interview, he has held regular meetings with both Mr. Zyuzin and
Elga's prospective buyers to discuss the mine's future ownership as
a ramp-up would require significant investment that Mechel's
current financial position is unlikely to allow, Reuters
discloses.

Analysts at BCS Global Markets said selling its stake in Elga could
allow Mechel to reduce its debt burden by 12%, but would constrain
its future development options and cash generating ability, Reuters
notes.

Mechel's debt at the end of the third quarter of 2019 stood at
RUR408 billion, Reuters relays.


SM BANK: Bank of Russia Appoints Provisional Administration
-----------------------------------------------------------
The Bank of Russia has decided to implement a number of measures
aimed at improving the financial stability of Sevastopol-based JSC
SM BANK (hereinafter, the Bank).

On January 29, 2020, acting in line with Article 189.49 of Federal
Law No. 127-FZ, dated October 26, 2002, "On Insolvency
(Bankruptcy)", the Bank of Russia Banking Supervision Committee
approved the plan for the State Corporation Deposit Insurance
Agency (hereinafter, the Agency) to participate in bankruptcy
prevention measures for the Bank.

In order to sustain the Bank's activity and improve its financial
stability, the Bank of Russia and the Agency will invite RNCB Bank
(PJSC) to act as an investor.

By its Order No. OD-138, dated January 29, 2020, and in compliance
with Article 189.26 of Federal Law No. 127-FZ, dated October 26,
2002, "On Insolvency (Bankruptcy)", the Bank of Russia appointed a
provisional administration represented by the Agency to manage JSC
SM BANK.

No moratorium on payments under the claims of the Bank's creditors
is imposed.  The Bank continues to operate in a business-as-usual
manner, meeting its obligations and conducting further
transactions.




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S P A I N
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ESMALGLASS-ITACA: Moody's Affirms B2 CFR, Outlook Stable
--------------------------------------------------------
Moody's Investors Service affirmed the ratings of Spain-based
frits, glazes and ceramic colors producer Esmalglass-Itaca-Fritta
following the announcement that E-I-F signed a definitive agreement
with Ferro Corporation (Ba3 negative) to acquire most of its tile
coatings business. The affirmation includes the B2 corporate family
rating the B2-PD probability of default rating of LSFX Flavum
Holdco S.L.U., the intermediate holding company of E-I-F.
Concurrently Moody's has affirmed the B2 instrument rating on the
EUR375 million senior secured term loan B and the EUR95 million
senior secured revolving credit facility, raised by LSFX Flavum
Bidco S.A.U., a direct subsidiary of the group. At the same time
Moody's has assigned a B2 instrument rating to the EUR300 million
extension on the senior secured term loan B. The outlook on all
ratings remains stable.

RATINGS RATIONALE

The affirmation reflects the improved scale and market position of
E-I-F following the transaction, the significant equity commitment
of E-I-F's private equity sponsor Lone Star and the management as
well as the potential for synergies. Material execution and
integration risks as well as high restructuring and integration
costs are counterbalancing the positive effects of the acquisition
at this point in time. A stable macroeconomic environment in
E-I-F's key markets combined with a successful integration of the
acquisition could support a reduction of financial leverage and
could result in positive rating pressure over the medium term.

The purchase price of $460 million, with the potential for an
additional $32 million in cash based on the performance of the
business pre-closing, will be financed by a EUR300 million
extension of the existing term loan to a total of EUR675 million.
The remainder will be covered by Lone Star's and the management's
equity injection. Furthermore, the existing EUR60 million senior
secured revolving credit facility will be extended by EUR35
million.

The proposed acquisition of Ferro's tile coatings business will
approximately double E-I-F's revenue to more than EUR900 million
(Moody's estimates for pro-forma 2019e). The deal will especially
strengthen E-I-F's Frits & Glazes business, which contributes more
than 70% to the acquired revenues. The deal includes the
acquisition of 15 production facilities with a partial regional
overlap and hence provides significant cost cutting opportunities.
Further synergies should arise from the optimization of
administrative structures, economies of scale in supply and the
consolidation of distribution activities. Moody's expects further
benefits from lifting the profitability of the acquired activities
towards E-I-F's levels.

LIQUIDITY

E-I-F's short-term liquidity is good. As of November 2019 the
group's internal cash sources amounted to around EUR58 million of
cash on balance sheet and further cash will be accumulated until
closing. Together with the undrawn EUR95 million RCF and Moody's
expected Funds from Operations of approximately EUR70m in 2020,
these funds will cover all expected cash needs in the next 12-18
months.

OUTLOOK

The stable outlook reflects Moody's expectation that E-I-F will
successfully execute the proposed acquisition. Moreover, Moody's
expects the group to adhere to a thoughtful and prudent financial
policy, as shown by the ongoing decrease in its Moody's adjusted
leverage since Lone Star Fund X acquired the business in July 2017.
As a result, the stable outlook reflects the expectation that
E-I-F's debt/EBITDA (Moody's adjusted) will improve towards 5.0x
within the next 12-18 months (6.6x as of year-end 2018 for E-I-F on
a stand-alone basis; Moody's estimated pro forma leverage of the
combined entities at year-end 2019 was at 5.5x). A smooth
integration process and the realization of the targeted synergies
would support positive pressure on the ratings over the medium
term.

WHAT COULD CHANGE THE RATINGS UP/DOWN

The ratings could be upgraded if E-I-F's capital structure improves
post acquisition, evidenced by (i) a Moody's adjusted leverage of
sustainably below 5x, (ii) Moody's adjusted EBITDA margin of well
above 15%, (iii) positive Moody's adjusted free cash flow (FCF)
generation and mid-single-digit FCF/Debt ratios as well as ongoing
good liquidity.

Downward pressure on the rating would build, if (i) E-I-F's post
acquisition leverage was sustainably above 6x Moody's-adjusted
debt/EBITDA; (2) profitability weakened with Moody's-adjusted
EBITDA margins falling sustainably well below 15%, (3) negative FCF
generation and/or liquidity were to weaken.

PRINCIPAL METHODOLOGY

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

COMPANY PROFILE

Headquartered Villarreal, Spain, the Esmalglass-Itaca-Fritta Group
is global manufacturer of intermediate products for the global
ceramic tile industry. The group's offering comprises a full range
of products, which determine the key properties of floor and wall
tiles including surface colors, glazing products and body coloring
materials. As of LTM to November 2019, the group reported sales of
around EUR447 million and EBITDA of about EUR86 million.


HIPOCAT 11: S&P Affirms 'D(sf)' Rating on Class B Notes
-------------------------------------------------------
S&P Global Ratings raised to 'BBB+ (sf)' from 'BB (sf)' its credit
ratings on Hipocat 11, Fondo de Titulizacion de Activos' class A2
and A3 notes. At the same time, S&P affirmed its 'D (sf)' ratings
on the class B, C, and D notes.

S&P said, "The rating actions follow the application of our
relevant criteria. They also reflect our full analysis of the most
recent transaction information that we have received, and the
transaction's current structural features."

The servicer, Banco Bilbao Vizcaya Argentaria S.A. (BBVA;
A-/Negative/A-2), has a standardized, integrated, and centralized
servicing platform. BBVA has been the servicer of this pool of
loans since September 2016. The trustee confirmed that the
transaction's performance has improved in the last three years due
to BBVA's active servicing policies, as well as the improved
general macroeconomic conditions, namely the unemployment rate
decrease.

In the second quarter of 2019, BBVA sold Hipocat 11's foreclosed
loans, which resulted in EUR14 million of extraordinary available
funds on the July interest payment date.

S&P said, "Our ratings on the class A2 and A3 notes are linked to
our long-term issuer credit rating (ICR) on the servicer because in
our cash flow analysis we exclude the application of a commingling
loss at rating levels at and below the ICR on the servicer (i.e.
'A-').

"After applying our European residential loans criteria to this
transaction, the overall effect on our credit analysis results is a
decrease in the required credit coverage at all ratings compared
with our previous review, mainly driven by the decreased arrears,
as well as the decreased current loan-to-value ratio due to the
pool's amortization. The increase in the 'AAA' repossession market
value decline partially offset these positive factors."

  WAFF And WALS Levels

  Rating level   WAFF (%)   WALS (%)
  AAA            26.81      44.65
  AA             18.29      38.76
  A              13.78      29.95
  BBB            10.21      24.95
  BB             6.69       21.43
  B              3.97       18.18

  WAFF--Weighted-average foreclosure frequency.
  WALS--Weighted-average loss severity.

Available credit enhancement has increased since S&P's previous
review as the amortization deficit--i.e., the difference between
accrued and paid principal--has decreased to EUR71.06 million in
January 2020 from EUR96.66 million in October 2018. The reserve
fund has been fully depleted since July 2009 as it was used to
provision for loans in foreclosure and in arrears over 18 months.

S&P said, "Following the application of our criteria, we have
determined that our assigned ratings in this transaction should be
the lower of (i) the rating as capped by our sovereign risk
criteria, (ii) the rating as capped by our counterparty criteria,
or (iii) the rating that the class of notes can attain under our
European residential loans criteria.

"Our analysis indicates that the available credit enhancement for
the class A2 and A3 notes is commensurate with higher ratings than
those currently assigned. However, in reviewing our ratings on
these classes of notes, in addition to applying our credit and cash
flow analysis, which considered various recovery assumptions for
the defaulted assets, we have considered the extraordinary nature
of the 2009 sale of the foreclosed loans, which increased the
credit enhancement available to the notes, as well as the credit
enhancement to the senior notes in this transaction compared to the
peer Hipocat deals. We have therefore raised to 'BBB+ (sf)' from
'BB (sf)' our ratings on the class A2 and A3 notes. Our ratings on
these classes of notes are not capped by our sovereign risk
criteria."

The class B and C notes continue to experience ongoing interest
shortfalls because of interest deferral trigger breaches and lack
of excess spread in the transaction. The class D notes, which is
non-asset backed, also has interest shortfalls due to the lack of
excess spread. S&P said, "Our ratings in Hipocat 11 address the
timely payment of interest and ultimate principal during the
transaction's life. We have therefore affirmed our 'D (sf)' ratings
on the class B, C, and D notes."

Hipocat 11 is a Spanish RMBS transaction that closed in March 2007
and securitizes first-ranking mortgage credits. Catalunya Banc,
which was formerly named Caixa Catalunya and is now part of BBVA,
originated the pool. The pool comprises credits secured over
owner-occupied properties, mainly in Catalonia.




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

ADDISON LEE: Reaches Rescue Deal with Banks
-------------------------------------------
Oliver Gill at The Telegraph reports that Addison Lee's banks have
struck a deal to take control of Europe's biggest minicab firm.

According to The Telegraph, sources said lenders have agreed to
inject GBP45 million of new cash into the debt-laden business.

The rescue wipes out the investment of owner US private equity fund
Carlyle, which bought Addison Lee for GBP300 million in 2013, The
Telegraph notes.

It is understood terms were thrashed out in meetings that took
place overnight, The Telegraph states.  It comes just days after
The Sunday Telegraph revealed Addison Lee was on the brink of a
lender-led rescue.

A group of eight banks -- which are understood to include the likes
of Barclays, HSBC and RBS -- have also agreed to refinance GBP100
million of loans, giving Addison Lee seven years before they need
to be repaid, The Telegraph discloses.


G&M SUPPLIES: Enters Into Company Voluntary Arrangement
-------------------------------------------------------
Clare Nicholls at Catering Insight reports that Carlisle-based
dealer G&M Supplies has entered into a Company Voluntary Agreement
(CVA) to allow it to continue to trade.

According to Catering Insight, following a members' meeting for the
distributor, a notice recently posted on the Companies House
website detailed that: "On Wednesday, January 8, 2020, a proposal
for a CVA was considered and accepted without modifications by
creditors, which incorporated the appointment of Hugh Jesseman of
Antony Batty & Company as supervisor."

The insolvency practitioner will now work out an arrangement
covering the amount of debt the dealer can pay, as well as a
payment schedule, Catering Insight discloses.

More than 75% of creditors had to approve the CVA for the proposal
to be accepted and in the end, 84.43% voted for it to take place,
Catering Insight states.

The distributor's current debts total GBP288,602.31, therefore the
creditors accepting the proposal represented GBP243,675.79 of this
sum, Catering Insight notes.  The 15.57%/GBP44,926.52 voting
against the CVA was HM Revenue & Customs, Catering Insight says.


LOIRE UK: Fitch Lowers Rating on Expected Secured Debt to B+(EXP)
-----------------------------------------------------------------
Fitch Ratings downgraded UK-based global life science tools and
services provider Loire UK Midco 3 Limited's expected senior
secured debt instrument rating to 'B+(EXP)'/'RR4'/49% from
'BB-(EXP)'/ 'RR3'/52%. Fitch has affirmed the group's expected
Long-Term IDR at 'B+(EXP)' with a Stable Outlook.

The downgrade reflects the adverse impact on recovery prospects
from an GBP40 million add-on to its term loan B currently in
syndication, increasing total senior secured debt to GBP1,082
million under the group's revised capital structure. The additional
incremental debt proceeds will be used to reduce the sponsor's
initial equity contribution.

The assignment of the final ratings is subject to the completion of
LGC Group's proposed recapitalisation on terms materially
conforming to the information already shared with Fitch.

The 'B+(EXP)' IDR reflects a defensive business risk profile
balanced with high leverage and a modest scale. The rating is
underpinned by structural organic growth prospects for the
life-science and healthcare industries, high barriers-to-entry, as
well as strong profitability and free cash flow (FCF) generation.
The IDR, however, is constrained by the still modest size of LGC
Group, its significant financial leverage as well as its assumption
that LGC Group will continue to be an active consolidator in the
fragmented global life sciences tools markets, which is likely to
prevent material deleveraging over its four year rating horizon to
March 2024.

The Stable Outlook reflects its expectation of steady underlying
operations, driven by sustainably organic revenue growth
underpinning the launch of new product lines, acquired revenues and
cash flow-based deleveraging.

KEY RATING DRIVERS

Defensive Business Risk Profile: Its rating recognises LGC Group's
strong position in the structurally growing routine and specialist
life-science and health care-testing markets, which are
characterised by long-standing and embedded customer relationships.
Fitch views these strong and diverse customer relationships, the
critical contribution of LGC Group products to its client workflow,
and the group's focus on and reputation for quality as significant
barriers to entry that underpin its robust business model.

Strong Profitable Growth and FCF: The strong traits of LGC Group's
business profile have translated into sector-leading organic
revenue growth of close to 10%, stemming from both positive volume
and price effects. Its rating case forecasts EBITDA margins
trending towards 33.5%, which will translate into a FCF margin
towards 15% by 2023, despite high capex assumed at around 6.5% of
sales for growth and product quality.

Leverage and Size a Constraint: Despite its growth LGC Group
remains small, particularly relative to US sector peers. Fitch
estimates funds from operations (FFO) adjusted gross leverage of
7.9x in 2020, which in isolation would point towards a lower rating
in the 'B' rating category. Its high financial leverage is,
however, mitigated by the defensive business profile and
satisfactory FCF generation. Its projected improvement in FCF
margins towards 15% by 2023 provides some financial flexibility for
the group's acquisition growth strategy. Its rating case assumes
FFO adjusted gross leverage to fall below 6.0x by 2023 (ie 5.7x),
which anchors its Stable Outlook.

Moderate Execution Risks: Fitch believes that LGC Group will
continue its acquisitive strategy as this is central to value
creation, particularly from the sponsors' perspective. Its view of
moderate execution risks reflects the broad scope of potential
acquisitions, and subsequent integration, and reflects LGC Group's
positive record as a consolidator in the fragmented industry.

Positive Sector Fundamentals: LGC Group is firmly positioned to
capture favourable growth in life-science, healthcare, and
measurement sciences, driven by rising volumes and innovation, and
supported by stricter regulatory requirements on testing in a
growing number of applications. LGC Group has exhibited a long-term
sticky customer base, as reflected in recurring revenue of around
95% and is supported by its reputation for premium quality and
strong scientific credentials. High barriers to entry in core niche
markets, due to regulatory approvals, and the critical
non-discretionary nature of its products contribute to visibility
over customer retention and revenue.

DERIVATION SUMMARY

Fitch rates LGC Group using its medical products navigator
framework. Its rating is constrained by the group's modest size and
high financial leverage, particularly relative to that of larger US
peers in the life sciences and diagnostics sectors. These US peers
are generally rated within the 'BBB' rating category, including
Bio-Rad Laboratories Inc. (BBB/Stable), Thermo Fisher Scientific
Inc. (BBB/ Stable), PerkinElmer Inc. (BBB/Negative) and Agilent
Technologies Inc. (BBB+/Stable). In its peer analysis, LGC Group
demonstrates a similar EBITDAR margin in the high 20% range to some
of the larger peers with similar FCF generation, reflecting its
strong business model rooted in niche positions that are
underpinned by scientific excellence. In addition, LGC Group
demonstrates still good organic growth, supplemented by
consolidation opportunities in the fragmented global life-sciences
tools market.

LGC Group's defensive business risk attributes and smaller scale
are offset by higher leverage versus the above peers, which places
the group's rating in the 'B' category. Its financial risk profile
is more comparable with European healthcare leveraged finance
issuers such as Synlab Unsecured Bondco PLC (B/Stable) and Curium
Bidco S.a.r.l (B+/Stable). All three issuers share a defensive
business risk profile and deploy financial leverage to accelerate
growth in a consolidating European market.

KEY ASSUMPTIONS

Fitch's Key Assumptions within its Rating Case for the Issuer:

  - Revenue growth at 13% CAGR for 2019-2024, driven by organic and
acquired revenues. Organic growth at 10% CAGR for the same period,
in line with historical trends.

  - EBITDA margin to increase 370bp to 33.5% by 2024, driven by
gross margin improvement, greater cost efficiency and
earnings-accretive bolt-on acquisitions.

  - Working capital to remain stable at 2% of sales p.a. up to
2024.

  - Capex on average 6.5% of sales p.a., of which maintenance capex
is to remain stable at 1.5% of sales p.a. up to 2024, in line with
historical trend. Acquisition capex assumed at GBP240 million in
2021 with bolt-on acquisitions of GBP60 million p.a. after 2021.

Recovery assumptions:

Fitch estimates under its bespoke recovery analysis that a
going-concern approach will lead to higher recoveries for creditors
relative to liquidation, given the group's long-term proven robust
business model, long-term relationship with customers and
suppliers, and existing barriers to entry in the market. Its
going-concern value is estimated at around GBP662 million, assuming
a post-reorganisation EBITDA of about GBP113 million after applying
a 25% discount to its expected EBITDA for 2020 with a distressed
enterprise value (EV)/EBITDA multiple of 6.5x, reflecting its
premium market position and sound reputation.

Fitch assumes LGC Group's multi-currency revolving credit facility
(RCF) would be fully drawn in a restructuring scenario, ranking
pari passu with the rest of the senior secured debt.

Its principal waterfall analysis generates a ranked recovery for
senior secured creditors in the 'RR4' band once including the
upsized TLB under the revised capital structure, indicating a 'B+'
instrument rating, which is in line with the IDR. This results in a
single-notch downgrade relative to the previous expected senior
secured instrument rating of 'BB-(EXP)'/ 'RR3', reflecting the
impact from the additional pari passu debt.

The waterfall analysis output percentage based on current metrics
and assumptions is 49%.

RATING SENSITIVITIES

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

  - FFO adjusted gross leverage below 5x on sustained basis.

  - FFO fixed charge coverage above 3x on sustained basis.

  - Superior EBITDA margins remaining above 30% and successful
integration of accretive M&A.

  - Greater global scale and higher diversification without
adversely impacting brand reputation.

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

  - FFO adjusted gross leverage above 7x on sustained basis from
2021.

  - FFO fixed charge cover below 2.5x.

  - Lower organic growth due to market deterioration or
reputational issues resulting in market-share loss.

  - EBITDA margins trending towards 25%.

  - Aggressive M&A hampering profitability, deleveraging and
liquidity profile.

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: LGC Group has a comfortable liquidity profile
under its rating case based on GBP35 million cash post-financing
and its capacity for building up cash on balance sheet to GBP100
million over the next four years after assuming moderate M&A
activity. It has a fully available revolving credit facility of
GBP265 million for general corporate purposes, which Fitch assumes
undrawn under its rating case projections.

FFO fixed charge cover under its rating case projections is
expected at 2.4x in 2020, trending towards 3.1x by 2022 and 3.9x by
2024. Its liquidity buffer remains healthy for ongoing business
operations, including intra-year working capital swings of around
GBP20 million.

SUMMARY OF FINANCIAL ADJUSTMENTS

Fitch restricts GBP13 million of cash as not being available for
debt service due to ongoing operating needs.

Fitch adjusts operating leases by applying an 8x capitalisation
multiple to annual rents.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or to the way in which they are being
managed by the entity.

PENTA CLO 7: S&P Assigns Prelim B-(sf) Rating on Class F Notes
--------------------------------------------------------------
S&P Global Ratings assigned preliminary credit ratings to Penta CLO
7 DAC's class A, B-1, B-2, C, D, E, and F notes. At closing, the
issuer also issued EUR39.30 million of unrated subordinated notes.

On the closing date, the issuer will own approximately 70% of the
target effective date portfolio. We consider that the target
portfolio will be well-diversified, primarily comprising broadly
syndicated speculative-grade senior secured term loans. Therefore,
we have conducted our credit and cash flow analysis by applying our
criteria for corporate cash flow collateralized debt obligations.

  Portfolio Benchmarks
                                                      Current
  S&P Global Ratings weighted-average rating factor   2,670
  Default rate dispersion                             475
  Weighted-average life (years)                       5.60
  Obligor diversity measure                           107
  Industry diversity measure                          21
  Regional diversity measure                          1.2
  Weighted-average rating                             'B'
  'CCC' category rated assets (%)                     0
  'AAA' weighted-average recovery rate                36.40
  Floating-rate assets (%)                            100
  Weighted-average spread (net of floors; %)          3.74

S&P said, "In our cash flow analysis, we used the EUR400 million
target par amount, the covenanted weighted-average spread (3.59%),
the reference weighted-average coupon (4.50%), and the minimum
weighted-average recovery rates as indicated by the collateral
manager. 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.

"Our credit and cash flow analysis shows that the class B-1, B-2,
C, D, E, and F notes benefit from break-even default rate and
scenario default rate cushions that we would typically consider to
be in line with higher ratings than those assigned. However, as the
CLO is still in its reinvestment phase, during which the
transaction's credit risk profile could deteriorate, we have capped
our preliminary ratings on the notes.

"Elavon Financial Services DAC is the bank account provider and
custodian. At closing, we expect its documented replacement
provisions to be in line with our counterparty criteria for
liabilities rated up to 'AAA'.

"The issuer can purchase up to 20% of non-euro assets, subject to
entering into asset-specific swaps. The downgrade provisions of the
swap counterparty or counterparties are in line with our
counterparty criteria for liabilities rated up to 'AAA'.

"At closing, we expect the issuer to be bankruptcy remote, in
accordance with our legal criteria.

"The CLO is managed by Partners Group (UK) Management Ltd. Under
our "Global Framework For Assessing Operational Risk In Structured
Finance Transactions," published on Oct. 9, 2014, the maximum
potential rating on the liabilities is 'AAA'.

"Following our analysis of the credit, cash flow, counterparty,
operational, and legal risks, we believe our preliminary ratings
are commensurate with the available credit enhancement for each
class of notes."

  Ratings List

  Class      Prelim. rating   Amount (mil. EUR)
  A          AAA (sf)         248.00
  B-1        AA (sf)          25.80
  B-2        AA (sf)          15.00
  C          A (sf)           25.20
  D          BBB- (sf)        26.80
  E          BB- (sf)         22.40
  F          B- (sf)          8.80
  Sub notes  NR               39.30

  NR--Not rated.


RADFORD CHANCELLOR: Enters Insolvency, Ceases Trading
-----------------------------------------------------
Clare Nicholls at Catering Insight reports that catering
consultancy firm Radford Chancellor Ltd. ceased trading on
Thursday, January 16, and entered insolvency the following day.

However, founder and MD Radford Chancellor is hoping to stave off
liquidation so that as many creditors as possible can receive as
high a dividend as achievable, Catering Insight discloses.

He told Catering Insight: "As we all know, trading conditions were
not easy during the later months of 2019.  We had to end a
loss-making contract with an overseas company which meant
considerable staff and debt restructuring.

"We very much hoped to recover and keep trading with a smaller
set-up.  But soon after this, another overseas company cancelled a
contract without any notice.  Subsequently they have withheld
payment of monies due to us."

Mr. Chancellor went on to explain: "In addition, like many others,
we experienced a slowdown in business in November and December,
largely thanks to the delays and uncertainty over Brexit.  Our cash
flow has not been helped by some of our clients delaying payment as
they, too, faced cash flow problems.

"It became clear that Radford Chancellor Ltd, in its present form,
could no longer continue trading.  So there was no alternative but
to close the company completely."


TALKTALK TELECOM: S&P Alters Outlook to Pos. on FibreNation Sale
----------------------------------------------------------------
S&P Global Ratings revised the outlook on TalkTalk Telecom Group
PLC to positive from stable and affirmed its 'BB-' long-term issuer
credit rating.

The FibreNation sale will reduce TalkTalk's leverage and improve
its cash generation. The GBP200 million cash proceeds from the
sale, nearly all of which will be used to repay debt, will reduce
TalkTalk's S&P Global Ratings-adjusted debt to EBITDA by about
0.6x–0.7x, to about 3.5x–3.6x in FY2020 (ending March 31,
2020), compared with 4.2x in FY2019. We also note that
FibreNation's projected capex is GBP22 million in FY2020 and its
operating expenditure (opex) is about GBP3 million-GBP4 million. We
have therefore updated our forecast for TalkTalk's annual capex
from FY2021 onward to about GBP100 million-GBP110 million from
GBP120 million-GBP130 million previously. We have slightly
increased our forecast for TalkTalk's EBITDA, supporting adjusted
FOCF of about GBP100 million-GBP120 million in FY2021 and leverage
reduction.

"The FibreNation sale does not materially affect our assessment of
TalkTalk's business. FibreNation's existing full fibre to the
premises (FTTP) network is small compared to its total base
(covering only about 49,000 premises), and its future targeted
footprint of 3 million premises was not intended to be fully owned
and financed by TalkTalk. We note that TalkTalk retains access to
this network through a long-term wholesale agreement with
CityFibre, which also allows TalkTalk the flexibility to partner
with other network providers.

"Given TalkTalk's positioning and focus on the value-for-money
market segment, we also think there will be fairly limited demand
for FTTP among its customer base over the medium term. Therefore,
flexible wholesale access makes more sense for its business model
than expensive investments. While there is upside to owning an FTTP
network in terms of potential long-term profitability--it precludes
the need to pay wholesale access fees for network use--it also
comes with a considerable drag on free cash flows from substantial
capex requirements for building out the network."

TalkTalk's fair business profile still benefits from its
comprehensive unbundled network (with 96% household coverage),
although it relies on other ISPs for connections within exchanges,
to cabinets, and to premises, in a relatively favorable regulatory
framework. TalkTalk also still benefits somewhat from its position
as the U.K.'s leading value-for-money carrier, with relatively
limited competition from premium players such as BT, Sky, and
Virgin Media.

TalkTalk will achieve further deleveraging and significant cash
flow improvement in FY2021, provided that it stabilizes its revenue
base and significantly lowers its exceptional costs. S&P said,
"After the 2.5%-3.0% revenue decline we expect in FY2020, our base
case assumes recovery to about 1.0% growth in FY2021. This is
premised on an improvement in TalkTalk's average revenue per user
(ARPU). We expect this to be driven by further increases in
TalkTalk's fibre to the cabinet (FTTC) penetration, as well as a
slowdown in the number of legacy customers re-contracting to a
fixed low price plan (FLPP). We also think that TalkTalk could gain
some subscribers from players such as BT and Virgin Media because
of the new regulation on end-of-promotional-period notifications
from February 2020. This could further increase the pricing gap
between offers to new customers from TalkTalk compared with these
players. Nonetheless, we anticipate that in the maturing U.K.
broadband market BT and Virgin Media will increase their focus on
customer retention--limiting market share upside for TalkTalk."

S&P said, "Amid a return to modest revenue growth and further cost
savings, we anticipate that TalkTalk will further reduce its
adjusted leverage toward 3x in FY2021. We also anticipate TalkTalk
moving from negative adjusted FOCF of GBP5 million-GBP20 million in
FY2020 to positive adjusted FOCF of GBP100 million-GBP120 million
in FY2021, corresponding to about 10%-12% of TalkTalk's adjusted
debt. Reported FOCF after lease repayments is expected to go from
about negative GBP55 million-GBP70 million in FY2020 to positive
GBP60 million-GBP70 million in FY2021."

Aside from opex and capex savings from the sale of FibreNation,
TalkTalk's FOCF improvement reflects a significant reduction in
exceptional cash flows to GBP5 million-GBP10 million in FY2021 from
about GBP55 million in FY2020, which was mainly related to its
headquarters moving to Salford. It also reflects a reduction in
TalkTalk's working capital outflow to about GBP20 million, from
about GBP80 million in FY2020, which was driven by a change in
TalkTalk's distribution model and the timing of payment reversals.

S&P said, "The positive outlook reflects the potential for an
upgrade over the next 12 months if TalkTalk stabilizes its revenue
base and significantly lowers its exceptional costs, in line with
our base case.

"We could raise the rating if TalkTalk reduces its S&P Global
Ratings-adjusted debt to EBITDA toward 3x and improves its adjusted
FOCF to debt above 10% in FY2021. This would lead us to improve our
assessment of TalkTalk's financial risk profile.

"We expect this would be driven by revenue stabilization, supported
by ARPU improvement from increased fibre uptake and some subscriber
gains, further EBITDA margin improvement, and a significant
reduction in exceptional costs.

"We could revise the outlook to stable if the anticipated
significant improvement in TalkTalk's FOCF does not materialize in
FY2021, for example due to continued revenue decline and
still-elevated exceptional costs."



                           *********


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 2020.  All rights reserved.  ISSN 1529-2754.

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