---

       T R O U B L E D   C O M P A N Y   R E P O R T E R

                          E U R O P E

          Friday, February 14, 2020, Vol. 21, No. 33

                           Headlines



F R A N C E

CMA CGM: S&P Alters Outlook to Negative & Affirms 'B+' LT ICR
ELIOR GROUP: Moody's Alters Outlook on Ba2 CFR to Stable


G R E E C E

LARCO: Greek Lawmakers Approve Restructuring Plan


I R E L A N D

INVESCO EURO IV: S&P Assigns Prelim B-(sf) Rating on Cl. F Notes


I T A L Y

AIR ITALY: Ryanair No Interest in Buying Airline
ALITALIA SPA: 21 People Investigated in Bankruptcy Inquiry


N E T H E R L A N D S

GBT III BV: S&P Cuts ICR to 'B+' on Proposed Debt Recapitalization
SENSATA TECHNOLOGIES: Moody's Affirms Ba2 CFR, Outlook Stable


R U S S I A

EN+ GROUP: Fitch Lowers LongTerm IDR to 'B+', Outlook Stable


S P A I N

INT'L AIRPORT FINANCE: Moody's Lowers Sr. Sec. Rating to B3
[*] Fitch Takes Action on 14 Tranches From 4 Spanish RMBS Deals


T U R K E Y

DOGAN SIRKETLER: Moody's Withdraws B1 CFR for Business Reasons
VOLKSWAGEN DOGUS: Fitch Affirms BB- LongTerm IDR, Outlook Stable


U K R A I N E

AGRICOLE BANK: Fitch Affirms 'B+' LongTerm Foreign Currency IDR
VODAFONE UKRAINE: S&P Assigns 'B' ICR, Outlook Stable


U N I T E D   K I N G D O M

ANTIGUA BIDCO: Moody's Affirms B2 CFR, Outlook Stable
DEBUSSY DTC: S&P Lowers Class A Notes Rating to 'B-(sf)'
DOUBLETREE TREETOPS: Ceases Trading, 80 Jobs Affected
NMC HEALTH: KKR Not Interested in Making Offer for Company
SURF INTERMEDIATE I: Fitch Gives 'B-' IDR & Rates Secured Debt 'B-'



X X X X X X X X

[*] BOOK REVIEW: Bankruptcy and Secured Lending in Cyberspace

                           - - - - -


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

CMA CGM: S&P Alters Outlook to Negative & Affirms 'B+' LT ICR
-------------------------------------------------------------
S&P Global Ratings revised its outlook on CMA CGM S.A. to negative
from stable and affirmed its 'B+' long-term issuer credit rating
and 'B-' issue rating on the company's senior unsecured debt.

CMA CGM's container shipping segment has held up relatively well so
far despite sluggish global demand and trade volumes, while CEVA
Logistics continues to operationally struggle. S&P said, "In our
base case, we assume the shipping segment will generate reported
EBITDA (pre-International Financial Reporting Standards [IFRS] 16)
of $1.3 billion-$1.4 billion in 2019, which is above the $1.16
billion reported in 2018. Two main factors support the group's
better shipping earnings. CMA CGM's transported trade volumes have
increased above the market average, thanks to the contribution from
the fast-expanding intraregional trade segment and strong backhaul
volumes on U.S. lines. The company has also trimmed operating
expenses, which we forecast will be down by about $60 per
twenty-foot equivalent unit (TEU) in 2019 year on year. The
positive EBITDA trend could continue into 2020, but to a lesser
extent than we previously expected, with the shipping segment
achieving reported EBITDA (pre-IFRS 16) of $1.4 billion-$1.5
billion. We factor into our forecast CMA CGM's continued tight rein
on cost control and container liners' pass-through of fuel cost
inflation to customers. This comes as the industry shifts to new
regulation under International Maritime Organization (IMO) 2020
requiring the use of more expensive low-sulfur-compliant fuel oil.
However, our base-case forecast is susceptible to possible downward
revisions amid challenging and difficult to predict trading
conditions linked to global trade disputes and, more recently, the
coronavirus outbreak in China. What's more, the operational
turnaround and financial recovery at CEVA Logistics is taking
longer than we previously expected, which has prompted our further
downward revision of the company's reported EBITDA. We now forecast
EBITDA (pre-IFRS 16) in 2019 to be moderately below the about $192
million in 2018--adjusted for share-based compensation of $32
million, initial public offering (IPO) costs of $19 million, and
$20 million in dividends from the Anji-CEVA joint venture. It could
then potentially improve to about $200 million in 2020, if the
positive effect from the restructured contract portfolio (for
example in Italy) more than offsets depressed air freight volumes
and weak demand from the auto and technology sectors. That said, we
think it unlikely that CEVA Logistics will become a positive
contributor to the group's free operating cash flow (FOCF) in
2020."

CMA CGM might find it difficult to continue its solid operating
cash flow generation into 2020, while liquidity leeway could also
diminish. S&P said, "We anticipate container shipping and logistics
industry conditions could remain difficult over the next 12 months,
potentially adversely affecting the group's profits. This is
because cooling economic growth and trade disputes weigh on global
cargo volumes. Furthermore, the recent coronavirus outbreak in
China has exacerbated these issues, because it is increasingly
disrupting worldwide trade and supply chains. Higher bunker fuel
prices and the inability to fully recover IMO 2020-related bunker
cost inflation pose another risk to CMA CGM's EBITDA generation.
However, we understand that bunker adjustment factors, which were
previously agreed with customers, and spot market cost pass-through
measures have been successfully implemented in recent months. We
also note that bunker prices have recently fallen significantly,
which should provide some relief in times of pressured volumes. We
believe the group continues to face the risk of a potential further
cash drain to avoid financial covenant breaches at CEVA Logistics
amid a difficult trading environment. So far CMA CGM has injected
$200 million in cash into CEVA Logistics for compliance purposes
but more may be required if current conditions drag on its
earnings, which we cannot confidently quantify and forecast in our
liquidity analysis." All or any of these aforementioned threats
materializing would reduce the group's liquidity leeway ahead of
the forthcoming debt maturities.

The demanding debt-maturity profile weighs on CMA CGM's liquidity.
The group faces significant debt maturities in 2020 of about $1.6
billion, including the $405 million revolving credit facility (RCF)
that is likely to be extended, and 2021 of about $1.4 billion. The
largest bullet maturity is in January 2021, when the outstanding
EUR725 million unsecured notes are due, closely followed by an
additional about $220 million of unsecured notes due June 2021. The
outlined debt maturities do not include leases and large
securitization programs of $1.1 billion at the CMA CGM level and
$0.47 billion at Neptune Orient Lines, both due for extension in
second-half 2021. As in previous years, S&P assumes these programs
will be extended on a timely basis.

CMA CGM's $2.1 billion disposal and liquidity enhancement plan is
near completion, but we believe the group's uninterrupted and solid
operating cash flow generation remains key to averting a liquidity
shortfall.   CMA CGM has recently undertaken several measures to
boost its liquidity sources under its close-to-completion treasury
plan aimed at releasing $2.1 billion in cash proceeds. This most
importantly includes a close to $1 billion terminal disposal
transaction, which was signed with China Merchants Port Holdings
Co. and is to be executed in second-quarter 2020, along with
several sale-and-leaseback deals with total cash proceeds of about
$860 million. S&P said, "Furthermore, we understand that CMA CGM is
in advanced discussions with the existing lender group over the
extension of the currently fully drawn $405 million unsecured RCF
maturing in September 2020. We believe that the likelihood is high
that CMA CGM will obtain the extension. Although the group's
proactive and effective treasury management provides a critical
boost to its liquidity profile, we still see little leeway for
liquidity sources to exceed uses in the next 12 months if operating
cash flows do not stabilize at 2019 levels. This is unless the
group is able to refinance the January 2021, EUR725 million
unsecured bond by tapping the capital markets in the meantime,
which we currently view as uncertain."

S&P said, "We estimate credit metrics will stay in line with the
ratings despite multiple headwinds.   Under our base-case forecast,
we think the group will improve its adjusted consolidated EBITDA
(post-IFRS 16) to $3.7 billion-$3.8 billion in 2019 and could
largely stabilize this value in 2020." This would result in
adjusted funds from operations (FFO) to debt of 13%-14% and debt to
EBITDA of 4.5x-5.0x in 2019-2020, which are at the lower end of the
financial profile range consistent with the current rating. This is
an improvement when compared with pro forma adjusted FFO to debt of
about 12% and adjusted debt to EBITDA of 5.0x-5.2x after the CEVA
Logistics acquisition closed in April 2019.

The negative outlook reflects the one-in-three possibility that CMA
CGM's liquidity could become increasingly constrained, resulting in
a downgrade within the next six months. Because S&P assesses CMA
CGM's access to capital markets for refinancing as currently
uncertain, the group's liquidity hinges on its ability to:

-- Deliver on S&P's aforementioned base-case EBITDA and operating
cash flow generation;

-- Complete the outlined disposal and liquidity enhancement plan
in full and on time; and

-- Extend the fully drawn $405 million unsecured RCF at the CMA
CGM level, due September 2020.

S&P said, "We would lower the rating if we believe that CMA CGM's
earnings fall short of our base case and the group fails to
stabilize its cash flow generation. This could be due to an
unexpected drop in freight rates, the group's inability to pass on
IMO 2020-related bunker price inflation to customers or
counterbalance price inflation through a significant unit costs
reduction, or a significant operational setback at CEVA Logistics.
The abovementioned factors would have to be combined with CMA CGM's
inability to tap the capital markets to refinance its forthcoming
bond maturities, in particular the outstanding $725 million
unsecured notes due in January 2021, pointing to a material
liquidity shortfall.

"We would also lower the rating if CMA CGM's credit measures
weakened, such that adjusted FFO to debt drops to below 12%, with
limited prospects for improvement in the short term.

"We could revise the outlook to stable if CMA CGM were to stabilize
its EBITDA and cash flow generation at 2019 levels. This would
ensure sufficient liquidity to tackle its upcoming bullet
maturities, while gaining the necessary cushion, in particular if
capital markets refinancing is inaccessible.

"A stable outlook would also depend on our expectation that the
group will maintain adjusted FFO to debt of more than 12% and
proactively manage its compliance with financial covenants."


ELIOR GROUP: Moody's Alters Outlook on Ba2 CFR to Stable
--------------------------------------------------------
Moody's Investors Service has affirmed the Ba2 corporate family
rating and Ba2-PD probability of default rating of French contract
caterer Elior Group S.A., and changed the outlook to stable from
negative.

"We revised Elior's rating outlook to stable from negative to
reflect the improvement in the company's credit metrics following
the disposal of Areas as well as our expectation that the
stabilisation of operating performance in the last fiscal year
ended September 2019 will be sustained over the next 12-18 months",
says Eric Kang, a Moody's Vice President -- Senior Analyst and lead
analyst for Elior. "Competitive pressure will continue to constrain
any material improvement in organic revenue growth and operating
margins, but we expect Elior's Moody's-adjusted debt/EBITDA to stay
around 3.5x-3.6x and Moody's-adjusted free cash flow/debt to be
around 2.0%-2.5%, which will adequately position Elior's CFR at
Ba2", adds Mr Kang.

RATINGS RATIONALE

The company's Moody's-adjusted debt/EBITDA reduced to 3.6x as of
fiscal year-end September 2019 from 5.1x as of fiscal year-end
2018, mainly driven by the disposal of its concession catering
business Areas (Pax Midco Spain, B1 stable) in July 2019. Most of
the c.EUR1.4 billion cash proceeds were applied to gross debt
reduction. The disposal reduces the company's scale and business
diversification but improves its cash flow generation profile
considering the capital-intensive nature of concession catering.

Moody's expects lower interest payments and capex of around 3% of
revenue (compared to around 4.5% prior to the disposal of Areas) to
support Moody's-adjusted annual free cash flow of around
EUR25-EUR30 million over the next 12-18 months. However, Moody's
expects excess cash to primarily support shareholder returns in
line with the company's objective to return up to EUR350 million to
shareholders over the fiscal years 2020-2021. That said, this will
remain balanced against acquisition opportunities and Moody's
expects that Elior will remain committed to maintaining net
leverage within its mid-term objective of 1.5x-2.0x (as defined by
the company), broadly equivalent to a Moody's-adjusted debt/EBITDA
of 3.3x-3.8x. The reported net leverage was 1.8x at fiscal year-end
2019.

LIQUIDITY

Elior's liquidity is adequate supported by cash on balance sheet of
EUR75 million, as of September 30, 2019, and access to two
revolving credit facilities (RCFs) of EUR450 million and $250
million respectively, both undrawn. The company also operates a
receivable securitisation programme of EUR360 million, with both an
on- and off-balance sheet compartment. As of September 30, 2019,
the receivable securitisation programme was utilized by EUR271
million, of which EUR217 million on an off-balance sheet basis.

Apart from the receivable securitisation programme which expires in
July 2021, the next material debt maturities are the RCFs and the
term loan in May 2023.

Moody's expects the company to maintain ample headroom under its
net leverage maintenance covenant, which is tested semi-annually.
The company's net leverage as defined in the debt indenture was
1.8x at fiscal year-end 2019 compared to a target covenant 4.5x at
half year-end, which reduces to 4.0x at fiscal year-end to reflect
the company's cash flow seasonality.

ESG CONSIDERATIONS

The main ESG considerations incorporated in the rating of Elior
relate to social risks, which Moody's typically views as moderate
for business and consumer services companies. Elior's social
exposure includes change in consumer habits, which could impact
volumes of meals served, and reputational risk, which may arise
from poor food or service quality.

As to governance considerations, the company's board has a majority
of independent directors (60% of directors) and sufficient gender
diversity (50% of directors are women), in line with the
recommendation of the AFEP-MEDEF code.

In 2019, the company put in place a new Corporate Social
Responsibility (CSR) governance which includes the creation of a
Group CSR Committee chaired by its CEO.

RATING OUTLOOK

The stable outlook reflects Moody's expectation of modest organic
revenue growth and stable margins over the next 12-18 months, and
that the company will comply with its medium-term net leverage
target of 1.5x-2.0x, broadly equivalent to a Moody's-adjusted
debt/EBITDA of 3.3x-3.8x.

FACTORS THAT COULD LEAD TO AN UPGRADE/DOWNGRADE

The rating could be upgraded if a visible improvement in operating
performance sustainably leads to (1) Moody's-adjusted EBITA margin
of above 6%, (2) Moody's-adjusted debt/EBITDA decreasing towards
3.0x, and (3) solid liquidity including Moody's-adjusted free cash
flow/debt above 5%. An upgrade would also require the company to
demonstrate a conservative financial policy with regards to
leverage, shareholder remuneration and debt-financed acquisitions.

The rating could be downgraded if negative organic revenue growth,
weaker margin, or a change in financial policy sustainably leads to
(1) Moody's-adjusted debt/EBITDA increasing above 4.0x, or (2)
weaker Moody's-adjusted free cash flow and liquidity.

PRINCIPAL METHODOLOGY

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

COMPANY PROFILE

Headquartered in France, Elior is a global player in contract
catering and support services. In the fiscal year ended September
2019, the company generated revenues of EUR4.9 billion.




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

LARCO: Greek Lawmakers Approve Restructuring Plan
-------------------------------------------------
Angeliki Koutantou at Reuters reports that Greek lawmakers approved
a restructuring plan for Larco late on Feb. 12 which Greece called
a last attempt to save Europe's biggest nickel producer.

The European Commission said in November it was taking Greece to
the European Court of Justice (ECJ) over its failure to recover
EUR135.8 million (US$147.63 million) of illegal state aid to Larco
which is struggling under heavy debt, Reuters recounts.

According to Reuters, Larco, which is 55% owned by the state, is
floundering under half a billion euros in debt owed to suppliers,
contractors, banks and pension funds, including EUR350 million in
arrears to power utility Public Power Corp..

The Greek parliament on Feb. 12 cleared an amendment which
stipulates the appointment of an administrator in March to
liquidate Larco, cut wage costs by an average 25% and push ahead
with a fast-track tender to sell a smelting plant and some of its
mines, Reuters relates.

If the administrator fails to sell 75% of Larco assets within 12
months from appointment, Larco will have to file an application for
bankruptcy, Reuters says, citing the new legislation.

Industry sources have said private equity fund Global Special
Opportunities Ltd (GSOL) might be interested in Larco, which
employs about 1,000 people in Greece, Reuters notes.




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

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

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

Similar to Invesco Euro CLO III which closed in December 2019, the
transaction's eligibility criteria will restrict the manager from
the purchase of an ESG excluded obligation. These obligations are
where the obligor's primary business activity relates to tobacco
product production, controversial weapons development or
production, thermal coal extraction, fossil fuels from
unconventional sources, or other fracking activities.

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

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

Key differences from the Invesco Euro CLO III transaction include
(amongst others):

-- A larger fixed-rate bucket of 10% from 5%.

-- Issuance of the class X notes which are repaid from interest
proceeds.

-- The class F par coverage test will apply from the end of the
reinvestment period rather than for the transaction's life.

-- The removal of the class F redemption feature. This is where an
amount equal to the lesser of EUR500,000 and 20% of remaining
interest proceeds that would otherwise have been distributed to
subordinated noteholders, is used to redeem the class F notes pro
rata (following the cure of the class F par coverage test in
accordance with the note payment sequence starting from the class
A noteholders and the reinvestment overcollateralization test).

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

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

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

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

-- The transaction's legal structure, which we expect to be
bankruptcy remote.
-- The transaction's counterparty risks, which S&P expects to be
in line with its counterparty rating framework.

  Portfolio Benchmarks
                                                     Current
  S&P weighted-average rating factor                 2,656.29
  Default rate dispersion                            542.37
  Weighted-average life (years)                      5.45
  Obligor diversity measure                          91.11
  Industry diversity measure                         17.16
  Regional diversity measure                         1.39

  Transaction Key Metrics
                                                     Current
  Total par amount (mil. EUR)                        400
  Defaulted assets (mil. EUR)                        0
  Number of performing obligors                      106
  Portfolio weighted-average rating derived
     from S&P's CDO evaluator                        'B'
  'CCC' category rated assets (%)                    0
  Covenanted 'AAA' weighted-average recovery (%)     36.50
  Covenanted weighted-average spread (%)             3.70
  Covenanted weighted-average coupon (%)             4.50

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

"In our cash flow analysis, we used the EUR400 million par amount,
the covenanted weighted-average spread of 3.70%, the covenanted
weighted-average coupon of 4.50%, and the covenanted
weighted-average recovery rates for all rating levels. We applied
various cash flow stress scenarios, using four different default
patterns, in conjunction with different interest rate stress
scenarios for each liability rating category. Our cash flow
analysis also considers scenarios where the underlying pool
comprises 100% of floating-rate assets (i.e., the fixed-rate bucket
is 0%) and where the fixed-rate bucket is fully utilized (in this
case 10%).

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

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

"At closing, we consider that the transaction's legal structure
will be bankruptcy remote, in line with our legal criteria.

"Our credit and cash flow analysis indicates that the available
credit enhancement for the class B to F notes could withstand
stresses commensurate with higher rating levels than those we have
assigned. However, as the CLO is still in its reinvestment phase,
during which the transaction's credit risk profile could
deteriorate, we have capped our assigned ratings on the notes.

"In our view, the portfolio is granular in nature, and
well-diversified across obligors, industries, and asset
characteristics when compared to other CLO transactions we have
rated recently. As such, we have not applied any additional
scenario and sensitivity analysis when assigning ratings on any
classes of notes in this transaction.

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

  Ratings List

  Invesco Euro CLO IV DAC
  
  Class  Prelim.   Prelim. amount  Sub (%)  Interest rate[1]
         rating      (mil. EUR)
  X      AAA (sf)    1.75          N/A      Three/six-month
                                              EURIBOR plus 0.40%
  A      AAA (sf)    244.00        39.00    Three/six-month
                                              EURIBOR plus 0.93%
  B-1    AA (sf)     32.00         27.25    Three/six-month
                                              EURIBOR plus 1.70%
  B-2    AA (sf)     15.00         27.25    1.95%
  C      A (sf)      27.00         20.50    Three/six-month
                                              EURIBOR plus 2.25%
  D      BBB (sf)    24.00         14.50    Three/six-month
                                              EURIBOR plus 3.10%
  E      BB- (sf)    21.00         9.25     Three/six-month
                                              EURIBOR plus 5.35%
  F      B- (sf)     9.50          6.88     Three/six-month
                                              EURIBOR plus 7.43%
  Sub    NR          36.00         N/A      N/A

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

EURIBOR--Euro Interbank Offered Rate.
NR--Not rated.
N/A--Not applicable.




=========
I T A L Y
=========

AIR ITALY: Ryanair No Interest in Buying Airline
------------------------------------------------
Elisa Anzolin at Reuters reports that Ryanair's chief commercial
officer on Feb. 13 denied any interest in buying Air Italy after
press reports linking his group to the loss-making airline, which
was put into liquidation by its owners earlier this week.

According to Reuters, Air Italy's owners Qatar Airways and regional
carrier Alisarda blamed "persistent and structural market problems"
for the decision to pull the plug on Feb. 11.

Asked about Italian press reports that Ryanair was preparing an
offer, chief commercial officer David O'Brien said his group was
not interested and had not been approached, Reuters relates.

Mr. O'Brien added that Ryanair did not see "any value" in Air Italy
and that its only interesting slots would be those at Milan's
Linate airport, but these would be too expensive, Reuters
discloses.

State-owned Qatar airlines said on Feb. 11 it was ready to invest
further in Air Italy, but under current rules foreign investors
cannot own more than 49% of a European airline, Reuters notes.


ALITALIA SPA: 21 People Investigated in Bankruptcy Inquiry
----------------------------------------------------------
Domenico Lusi at Reuters reports that the head of Italy's biggest
bank UniCredit and the deputy chairman of No. 2 lender Intesa
Sanpaolo are among 21 people investigated by state prosecutors in
an inquiry into the bankruptcy of flagship carrier Alitalia, a
document sent to the people and their lawyers showed.

The document, seen by Reuters, said the investigation relates to
the period between Jan. 1, 2015 and May 2, 2017 when the
loss-making carrier asked to be put under special administration
for the second time in less than a decade.

UniCredit boss Jean Pierre Mustier and Intesa Sanpaolo's Paolo
Colombo sat on Alitalia's board during that time, Reuters
discloses.  The other people that were investigated by prosecutors
in the town of Civitavecchia near Rome, include former Alitalia
executives and other board members, Reuters notes.

According to Reuters, the document said prosecutors had looked into
whether those investigated had committed bankruptcy fraud by
approving financial statements that did not reflect the company's
real state of health.

                        About Alitalia

With headquarters in Fiumicino, Rome, Italy, Alitalia is the flag
carrier of Italy.  It's main hub is Leonardo da Vinci-Fiumicino
Airport, Rome.  The company has a workforce of 12,000+. It reported
EUR2,915 million in revenues in 2017.

Alitalia and its subsidiary, Alitalia Cityliner S.p.A., are in
Extraordinary Administation (EA), by virtue of decrees of the
Ministry of Economic Development on May 2 and May 17, 2017,
respectively.  The companies were subsequently declared insolvent
on May 11 and May 26, 2017 respectively.  

Luigi Gubitosi, Prof. Enrico Laghi and Prof. Stefano Paleari were
appointed as Extraordinary Commissioners of the Companies in
Extraordinary Administration.

The Italian government ruled out nationalizing Alitalia in 2017 and
since then, the airline has been put up for sale.  To this
development, Delta Airlines, Easyjet and Italian railway company
Ferrovie dello Stato Italiane have expressed interest in acquiring
the airline in 2018.  Since then, Easyjet has withdrawn its offer.




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

GBT III BV: S&P Cuts ICR to 'B+' on Proposed Debt Recapitalization
------------------------------------------------------------------
S&P Global Ratings lowered its rating on GBT III B.V. (trading as
American Express Global Business Travel, or GBT) to 'B+' from 'BB'
and assigned its 'B+' issuer credit rating to GBT JerseyCo Ltd. S&P
also assigned its 'B+' issue rating to the $1,370 million senior
secured first-lien credit facility and withdrew its rating on the
existing $250 million term loan B. The recovery rating on the
proposed debt is 3 (60% rounded recovery).

S&P is lowering the ratings because of the more-aggressive
financial policy, combined with our expectation that DCFs will be
limited.

GBT is willing to take on a significant increase in debt to fund
acquisitions and dividends as a part of this transaction. It plans
to use the proceeds of the proposed term loan to repay its existing
debt and pay a $480 million dividend. It would then use the delayed
draw term loan to either fund potential acquisitions or pay
additional dividends.

S&P said, "We expect the company to pay out the majority of its
free cash flows as dividends and to buy back stocks relating to its
legacy management incentive plan over the next four years. This
would likely limit the cash flow available for debt repayment and
increase the importance of DCF generation. We expect DCF to debt to
remain modest at around 4% over the next two years. Our adjusted
debt to EBITDA for year-end 2020 is forecast to increase to about
3.6x (inclusive of pensions, operating lease and capitalized
development adjustments); this exceeds the 3x downgrade threshold
for the previous rating level. We assume that the company will use
its delayed draw facility to pursue acquisitions, but these metrics
are unlikely to change materially if it were to pay a dividend
instead."

GBT can also choose to increase its financial leverage further--net
debt to EBITDA could rise to 3.5x (equivalent to adjusted debt to
EBITDA of about 4.3x-4.7x and DCF to debt of below 2%). Its
previous leverage target was gross debt to EBITDA below 1x.

The company expects to change its financial policy after an equity
recapitalization of its joint-venture ownership structure in
December 2019. American Express is expected to retain its 50%
ownership stake. Meanwhile, the Certares-led investor group, which
holds the other 50%, will now likely include The Carlyle Group and
GIC as well as previous members Qatar Investment Authority, certain
funds managed by BlackRock, and Teacher Retirement System of Texas,
among others.

GBT's scale and global presence helps it attract large clients and
negotiate good terms with suppliers.

GBT's 2019 revenue, including its recently announced and proposed
acquisitions, is estimated at about $2.4 billion, making it the
biggest travel management company (TMC) globally. It is materially
larger than its closest peer, Carlson Travel Inc. GBT enjoys a
solid brand, good relationships with suppliers (including airlines,
hotels, and ground transportation providers), broad geographical
diversification, and sustainably high customer retention rates of
about 96%.

In S&P's view, its scale and global reach enables GBT to win
contracts with large clients that have global offices. It also
allows it to extract better fees, commissions, content, and terms
from suppliers and supplier revenues could represent a higher
proportion of the group's overall revenues in the future. GBT's
revenues from clients have come under pressure as the volume of
transactions processed online has increased. Such transactions
incur lower costs. Although this segment of the travel industry has
faced disruption risks since the launch of online travel agencies
(OTAs), the TMC model remains relevant. Business customers still
require a higher level of service, including access to a variety of
content and flexibility, help establishing and enforcing their
clients' travel policies, out-of-hours customer service, and
account payments.

The business travel industry is sensitive to global economic
conditions and other disruptions.

Like other travel companies, GBT is exposed to both its clients'
propensity to travel and changes in the average transaction price
arising from macroeconomic conditions. In an economic downturn, S&P
would expect transaction volumes to shrink as businesses tighten
their travel budgets. The industry is also exposed to event risks
arising from terrorism and other geopolitical risks, extreme
weather, natural disasters, and other exogenous shocks that may
restrict travel.

The current outbreak of coronavirus, which started in China, is a
timely reminder of such event risks. Several global corporations
have advised their employees against travelling to China for any
business meetings. Given that only a small percentage of GBT's
client air travel bookings involve China (including trips
originating outside China), S&P expects the direct impact of the
coronavirus outbreak to be limited. However, prolonged weakness in
the Chinese economy could disrupt GDP growth expectations in other
parts in the world, including North America and Europe, where GBT
generates most of its revenue.

GBT has a track record of integrating material acquisitions, as
demonstrated by the cost synergies achieved from the Hogg Robinson
Group (HRG) acquisition

GBT is on track to exceed its cost synergies plan for HRG, with
realized cost synergies of $45 million in 2019 through supplier
optimization efforts and effectively managing the back office
costs. These synergies helped the group's adjusted EBITDA margins
to improve to about 18% in 2019, compared with 15.5% in 2018. S&P
considers its plan to achieve similar synergies from its future
acquisitions to be similarly ambitious.

S&P said, "The stable outlook indicates that we expect GBT to
exhibit stable operating performance. We forecast that its supplier
revenue will continue to grow, providing a base for meaningful
dividend payouts, despite the likely impact of the coronavirus
outbreak on global business travel trends. The stable outlook also
incorporates our view that, in line with GBT's stated financial
policy, it will maintain credit metrics commensurate with the
current rating, including DCF to debt of about 3%-4% and S&P Global
Ratings-adjusted leverage below 4.5x.

"We could lower the rating if the group's credit metrics were to
materially deteriorate, including our adjusted leverage rising
above 4.5x or DCF to debt falling below 2% on a sustained basis.
Such a scenario could arise if GBT carried out material
debt-financed acquisitions or if shareholder distributions exceeded
our current forecast. Additionally, we could lower the rating if
there were a material disruption in the business travel segment,
loss of clients, external event risks, or exceptional costs
exceeding our current expectation.

"We consider an upgrade to be somewhat unlikely over the next 12
months due to GBT's meaningful dividend policy and its role in the
consolidation of the business TMC sector through debt-funded,
bolt-on acquisitions. However, we could consider a positive rating
action if GBT exhibits strong operating performance and a track
record of maintaining DCF to debt above 5%."


SENSATA TECHNOLOGIES: Moody's Affirms Ba2 CFR, Outlook Stable
-------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Sensata
Technologies B.V. and its wholly owned subsdiaries, including the
Ba2 corporate family rating, the Ba3 senior unsecured and Baa3
secured ratings, and assigned a stable outlook at Sensata
Technologies, Inc. Moody's also upgraded the Speculative Grade
Liquidity Rating to SGL-1 from SGL-2. The ratings outlook is
stable.

In addition, Moody's has corrected the issuer on the $450 million
senior notes due 2030 to Sensata Technologies, Inc. from Sensata
Technologies B.V. Due to an internal administrative error, the
notes previously reflected Sensata Technologies B.V. as the
issuer.

RATINGS RATIONALE

Sensata's ratings consider its solid competitive position in the
specialized and fragmented sensors and controls market,
long-standing customer base, exposure as a supplier to automotive
OEMs, and track record of strong margins and relatively moderate
financial leverage.

About 58.8% of Sensata's 2019 revenue was from the automotive
industry, where production is expected to decline into 2020.
Nevertheless, Moody's expects Sensata's free cash flow (cash from
operations less capex less dividends) will exceed $400 million in
2020 producing a relatively strong ratio of free cash flow to debt
of about 13%. Sensata's EBITA margin has been consistently over
20%, and Moody's expects a similar level into 2020 along with
debt-to-EBITDA below 4x (after Moody's standard adjustments).
Moody's anticipates Sensata will maintain a prudent strategy around
leverage and liquidity which, combined with its market position and
control over operating costs, will enable Sensata to manage the
cyclicality in the auto sector and Sensata's other end markets.

Sensata's SGL-1 Speculative Grade Liquidity Rating reflects very
good liquidity characterized by the expectation of strong free cash
flow and manageable debt maturities, cash of around $700 million
and ample revolver availability.

Environmental, social, and governance considerations have been
factored into the ratings. Environmentally, Sensata is not at
significant risk of any environmental investigations or
settlements. Sensata's products offer environmentally friendly
solutions to its customers. Sensata's social risk is relatively
minimal with less than 1% of the workforce covered by collective
bargaining agreements and generally positive relations with its
employees.

Governance is solid with Sensata is in the midst of a planned CEO
transition, as Sensata's President is being elevated to the CEO
position. The President & CEO-elect, Mr. Jeffrey Cote, held a
number of executive positions within Sensata. The sitting CEO, Ms.
Martha Sullivan, will remain on the Board of Directors.

The stable outlook reflects Moody's expectation that topline
pressure from challenging end market conditions will persist for
the foreseeable future, but that the company will continue to
mitigate some of the impact by quickly realigning internal costs
with external demand, ultimately maintaining healthy margins and
cash flow generation. The stable outlook also considers the
company's successful track record of integrating meaningful
acquisitions and deleveraging following acquisitions, although
Moody's does not anticipate a large, transformative acquisition in
the near-term.

The ratings could be upgraded if debt-to-EBITDA is sustained below
3.5 times, free cash flow-to-debt increases to above 15%, and EBITA
margins are maintained in excess of 20%. Alternatively, the ratings
could be downgraded if Moody's expects debt-to-EBITDA will be
sustained over 4.25 times, free cash flow-to-debt falls to under
10%, EBITDA-to-interest falls below 4.5 times, liquidity weakens,
or the company institutes a more aggressive financial policy
focusing on excessive shareholder returns.

The following rating actions were taken:

Affirmations:

Issuer: Sensata Technologies B.V.

  Corporate Family Rating, Affirmed Ba2

  Probability of Default Rating, Affirmed Ba2-PD

  Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD4,
  from LGD5)

Issuer: Sensata Technologies UK Financing Co. plc

  Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD4,
  from LGD5)

Issuer: Sensata Technologies, Inc.

  Senior Secured Bank Credit Facility, Affirmed Baa3 (LGD2)

  Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD4,
  from LGD5)

Upgrades:

Issuer: Sensata Technologies B.V.

  Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2

Outlook Actions:

Issuer: Sensata Technologies B.V.

  Outlook, Remains Stable

Issuer: Sensata Technologies UK Financing Co. plc

  Outlook, Remains Stable

Issuer: Sensata Technologies, Inc.

  Outlook, Assigned Stable

The principal methodology used in these ratings was Global
Manufacturing Companies published in June 2017.

Sensata Technologies B.V., Sensata Technologies UK Financing Co.
plc and Sensata Technologies, Inc., are indirect wholly-owned
subsidiaries of Sensata Technologies Holding plc, which is a global
manufacturer of sensors and controls products for the automotive,
industrial, HVAC, and aerospace markets. The company's products
include sensors measuring pressure/force/speed, thermal and
magnetic-hydraulic circuit breakers, and switches. Revenues for the
year ended December 31, 2019 were approximately $3.45 billion.




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

EN+ GROUP: Fitch Lowers LongTerm IDR to 'B+', Outlook Stable
------------------------------------------------------------
Fitch Ratings has downgraded Russia-based EN+ Group IPJSC's
Long-Term Foreign and Local Currency Issuer Default Ratings to 'B+'
from 'BB-'. The Outlook is Stable.

The downgrade follows the approval by the Board of Directors of the
acquisition of a 21.37% stake in EN+ from VTB Group for USD1.58
billion by one of EN+'s subsidiaries. The company expects the deal
to be debt-funded and to be completed on 12 February 2020. Fitch
forecasts EN+'s funds from operations net adjusted leverage (excl.
dividends from 56.88%-owned United Company RUSAL Plc (UC Rusal;
BB-/Negative)) to deteriorate to above 5x, which will be
commensurate with a 'B+' rating.

EN+'s IDR reflects its view of the company's power segment after
deconsolidating UC Rusal. It reflects weaker credit metrics than
Russian generation peers' and customer concentration (about half of
EN+'s electricity production is sold to UC Rusal at a 3.5% discount
to wholesale power prices). These are partially offset by EN+'s
market position as one of the largest power generation companies in
Russia (8% of country's installed capacity), its low-cost
hydro-generating facilities enhancing group profitability compared
with thermal generators, and vertical integration.

KEY RATING DRIVERS

Shares Acquisition from VTB: EN+ expects to fund the acquisition
with a new loan for up to RUB110 billion from Sberbank. This,
coupled with announced plans to resume dividends from 2019, will
weaken FFO adjusted net leverage (excl. dividends from UC Rusal) to
above 5x (3.3x in 2018) over 2020-2022.

Deconsolidated Approach: The rating scope covers EN+
deconsolidating UC Rusal's financials, but including dividends from
UC Rusal, which Fitch views as pass-through cash flow. This is
because UC Rusal is a listed company owned by a number of strategic
investors in addition to a free float and one that is run
relatively independently. There is no centralised treasury at the
EN+ level, operating companies raise debt independently and there
are no cross-guarantees within the group involving UC Rusal.
However, about one third of EN+'s debt (deconsolidating UC Rusal)
at end- 2019 includes cross default provisions to other EN+
entities (including UC Rusal) which could constraint EN+'s rating.

No Dividends from UC Rusal Expected: Fitch adjusts its credit
metrics by excluding dividends from UC Rusal as it forms part of
EN+'s dividend outflow to its shareholders. While Fitch believes
the dividend policy could be adjusted in case of financial
distress, the general dividends framework implies that dividends
from UC Rusal will not contribute to EN+'s debt repayment capacity.
Its forecasts include zero dividends from UC Rusal in 2019-2020 and
on average about USD180 million annually over 2021-2022.

CHP Modernisation Programme: During 2019 EN+'s units totaling 1.1GW
were selected at modernisation capacity supply agreement auctions
and the government's commission in May-September 2019. Units'
modernisation should be completed by 2025, with the project's
internal rate of return (IRR) at around 14%. Current capex foresees
capital expenses related to CHP modernisation of about RUB14
billion over 2019-2025. The next wave of government's commission
will take place in 2020 with capacities to be delivered in 2026.
The selection by the government will cover 4GW annually in
2020-2025 throughout Russia, which are to be allocated among
auction participants.

Strong Market Position: EN+ is a vertically integrated company
operating in two business segments including aluminium production
through UC Rusal and power generation and distribution primarily
through an indirect 100% power subsidiary JSC Eurosibenergo. The
latter is one of the largest Russian power generation companies
with 7% of total electricity generated in 2018. It operates 22
power stations with a total installed capacity of 19.6GW, which
should moderate the risk of cash flow disruptions from unexpected
outages. It operates across the entire power value chain, including
coal mining, power generation, and transmission and distribution
networks, but with over 85% of EBITDA from hydro power generation
in 9M19.

Hydro Generation Enhances Profitability: EN+'s business profile
benefits from a significant share of hydro-generating facilities,
which account for about 80% of total installed capacity and power
segment EBITDA (excluding UC Rusal dividends). This enhances EN+'s
profitability and operational profile due to the absence of fuel
costs and priority of dispatch. Fitch expects EBITDA margin to
remain broadly stable on average at 34% over 2019-2022 (36% in
2018).

DERIVATION SUMMARY

EN+'s deconsolidated business profile is similar to that of PJSC
RusHydro (BBB-/Stable; standalone credit profile of bb+) as both
companies generate hydro power and benefit from high profitability.
However, EN+ operates on a smaller scale (based on total installed
capacity) and has a much more concentrated customer base. EN+ has
weaker credit metrics and liquidity profile than most of rated
Russian peers, including RusHydro, The Second Generating Company of
Wholesale Power Market (OGK-2, BBB-/Stable, SCP of bb+), Public
Joint Stock Company Territorial Generating Company No. 1 (TGC-1,
BBB/Stable, SCP of bbb-).

KEY ASSUMPTIONS

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

  - Russian GDP growth on average 2% p.a. and CPI on average 4%
p.a. over 2019-2022

  - Average USD/RUB exchange rate of 66.7 over 2019-2022

  - Electricity generation volumes to increase slightly below GDP
growth over 2019-2022

  - Capex on average atUSD250 million annually over 2019-2022

  - No dividends from UC Rusal over 2019-2020 and on average about
USD180 million annually over 2021-2022

  - EN+'s dividends from power segment (excluding Rusal) to
shareholders at zero in 2019 and at about USD250 million annually
over 2020-2022

  - USD1.58 billion debt-funded acquisition of 21.37% stake in EN+
from VTB Capital

RATING SENSITIVITIES

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

  - Strengthening of EN+'s financial profile and disciplined
financial policy resulting in FFO adjusted net leverage below 4.5x
(excluding dividends from UC Rusal) and FFO interest coverage
(excl. dividends from UC Rusal) above 2.5x on a sustained basis.

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

  - Deterioration of the financial profile (eg FFO adjusted net
leverage above 5.5x (excluding dividends from UC Rusal) and FFO
interest coverage below 2x on a sustained basis) due to, among
other things, aggressive capex or dividends distribution and much
lower-than-expected electricity prices.

  - A multi-notch negative rating action on UC Rusal may constrain
EN+'s rating due to the cross-default provision in some of EN+
subsidiaries loans to EN+ entities.

  - Weak liquidity, with liquidity ratio consistently below 1x.

  - Deterioration of the regulatory and operational environment in
Russia.

LIQUIDITY AND DEBT STRUCTURE

Manageable Liquidity: Fitch assesses EN+'s liquidity at end-9M19 as
manageable. At end-3Q19 it had cash of USD418 million, unused
credit facilities available at end-2019 (without commitment fees
and maturity of over one year) of about RUB50 billion (USD783
million), mainly from state-owned banks, and Fitch-estimated
largely neutral free cash flow (FCF, after capex and dividends)
over the next 12 months. This compares with maturities of USD889
million over 4Q19-2020. The company expects to partially refinance
its upcoming maturities.

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.

EN+ has an ESG Relevance Score of 5 for Governance Structure, 4 for
Management strategy and 4 for Group Structure. These are revised on
the back of debt-funded acquisition of its own shares, which has
negative impact on EN+'s financial profile and led or contributed
to the downgrade.




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

INT'L AIRPORT FINANCE: Moody's Lowers Sr. Sec. Rating to B3
-----------------------------------------------------------
Moody's Investors Service downgraded the Senior Secured rating of
International Airport Finance, S.A. to B3 from B2 and changed the
outlook to stable from negative.

This follows Moody's rating action in which the agency downgraded
the Government of Ecuador's ratings to Caa1 and changed the rating
outlook to stable.

Downgrades:

Issuer: International Airport Finance, S.A.

Senior Secured Regular Bond/Debenture, Downgraded to B3 from B2

Outlook Actions:

Issuer: International Airport Finance, S.A.

Outlook, Changed To Stable From Negative

RATINGS RATIONALE

The B3 rating of Quiport, one-notch above the Government of
Ecuador's rating of Caa1, reflects certain characteristics that
continue to shield the asset from its direct exposure to Ecuador:
substantial international revenues, strong stand-alone credit
quality, and access to international financing.

Its rating is also supported by the project finance features,
including a 12-month Debt Service Reserve Account held offshore,
O&M and Capex reserves, dividend distribution and additional
indebtedness, and a collateral package.

In 2019, according to preliminary information, total departing
traffic decreased approximately 3.2%. Nonetheless, total revenue
increased 1.3% (preliminary information) which result in financial
metrics in line with expectations. Moody's estimates that Cash
interest coverage ("CIC", cash flow available for debt service /
interest) was close to 3.2x and Funds from operations to debt of
approximately 13.9%.

Notwithstanding, the downgrade to B3 recognizes that Quiport has
various linkages with the Government of the Ecuador. These include
the reliance on contracts with the government under which the
airport operates and the tariffs setting process that are
determined by the Municipality of Quito.

The stable outlook mirrors the outlook on the ratings of Ecuador
and the expectation that Quiport's passenger volumes and financial
performance will remain strong relative to the assigned rating.

WHAT COULD CHANGE THE RATING UP/DOWN

The rating could be upgraded if Ecuador's rating is upgraded and
Quiport continues to record cash interest coverage ratios and
FFO/Debt above 2.5x, and 14%, respectively, on a projected basis.

Downward pressure on the rating could develop due to sustained
decreases in passenger traffic and cash flow generation, material
capital expenditure overruns, or weaker financial metrics on a
sustained basis with cash interest coverage ratio consistently
below 1.75x or its FFO/Debt ratio was consistently below 8%.
Further deterioration of the rating of the Ecuador, could also lead
to downward pressure on the rating.

Quiport is owned indirectly by CCR S.A. (Ba2/Aa1.br, stable)
(46.5%), which is a Brazilian-based infrastructure company focused
on airport, toll roads and mass transit infrastructure projects
with a portfolio of international airports, including Belo
Horizonte, Curaçao and San Jose; Odinsa (unrated) (46.5%), which
is part of Grupo Argos and has a diverse portfolio of
transportation concessions, including the International Airport of
Bogota; and HASDC (unrated) (7%), a US-based international airport
development and management company affiliated with the Houston
airports system.

The principal methodology used in this rating was Privately Managed
Airports and Related Issuers published in September 2017.


[*] Fitch Takes Action on 14 Tranches From 4 Spanish RMBS Deals
---------------------------------------------------------------
Fitch Ratings has upgraded one tranche and affirmed 13 tranches of
four Spanish RMBS transactions under the Bancaja RMBS programme.
The Outlooks are Stable.

Bancaja 8, FTA
   
  - Class A ES0312887005; LT AAAsf Affirmed
   
  - Class B ES0312887013;  LT AAsf Affirmed

  - Class C ES0312887021;  LT A+sf Affirmed
  
  - Class D ES0312887039;  LT BBsf Affirmed

Bancaja 9, FTA
   
  - Series A2 ES0312888011; LT A+sf Affirmed
  
  - Series B ES0312888029; LT A+sf Affirmed
  
  - Series C ES0312888037; LT BBB+sf Affirmed

  - Series D ES0312888045; LT B+sf Affirmed

  - Series E ES0312888052; LT CCsf Affirmed

Bancaja 7, FTA
   
  - Class A2 ES0312886015; LT AAAsf Affirmed
  
  - Class B ES0312886023;  LT A+sf Affirmed

  - Class C ES0312886031;  LT Asf Affirmed
  
  - Class D ES0312886049;  LT BBB-sf Upgrade

Bancaja 13, FTA
   
  - Class A ES0312847009;   LT A+sf Affirmed

TRANSACTION SUMMARY

The transactions comprise residential mortgages serviced by Bankia
S.A. (BBB/F2/Stable).

KEY RATING DRIVERS

Rising or Stable Credit Enhancement

Current and projected levels of credit enhancement of the notes are
sufficient to mitigate the credit and cash flow stresses under
their respective rating scenarios, as reflected by Fitch's upgrade
and affirmations. While Fitch expects Bancaja 8, Bancaja 9 and
Bancaja 13 CE ratios to continue increasing in the short-term due
to continuing sequential amortisation, CE ratios could decline for
most tranches if the pro-rata amortisation mechanism is activated
with the application of a reverse sequential amortisation of the
notes until targets for outstanding notes as a share of the total
notes' balance are met. For example, Bancaja 8 class A notes
current CE of 42.5% could fall to around the 11.7% CE floor if
pro-rata amortisation is triggered.

With regard to Bancaja 7, CE ratios are expected to remain stable
over the short-to medium-term due to the prevailing pro-rata
amortisation, which will switch to sequential when the outstanding
portfolio balance over initial portfolio balance represents less
than 10% (currently at 11.9%).

High Seasoning/Stable Asset Performance

The rating actions reflect Fitch's expectation of stable credit
trends given the significant seasoning of the securitised
portfolios of more than 12 years, the prevailing low interest-rate
environment and a benign Spanish macroeconomic outlook. Three-month
plus arrears (excluding defaults) as a percentage of the current
pool balance remains between 0.6% (Bancaja 7) and 1.3% (Bancaja 13)
as of the latest reporting date, while cumulative gross defaults
relative to portfolio initial balances range between 1.4% (Bancaja
7) and 9.3% (Bancaja 13).

Counterparty Rating Caps

Fitch views Bancaja 9 as being exposed payment interruption risk in
the event of servicer disruption as the available liquidity sources
(reserve funds) are considered insufficient to cover senior fees,
net swap payments and senior notes' interest during a minimum of
three months period needed to implement alternative servicing
arrangements. The notes' maximum achievable ratings are
commensurate with the 'Asf' category, in line with Fitch's
Structured Finance and Covered Bonds Counterparty Rating Criteria.

Bancaja 13 class A notes' rating is capped at 'A+sf' as the account
bank minimum eligibility ratings contractually defined at 'BBB+'
and 'F2' are insufficient to support 'AAsf' or 'AAAsf' ratings in
accordance with Fitch's Structured Finance and Covered Bonds
Counterparty Rating Criteria.

Geographical Concentration and Loan Origination Risks

The securitised portfolios are exposed to geographical
concentration mainly in the region of Valencia. In line with
Fitch's European RMBS rating criteria, higher rating multiples are
applied to the base foreclosure frequency assumption to the portion
of the portfolio that exceeds 2.5x the population within this
region. Additionally, around 50% of these portfolios is linked to
loans originated via brokers, which are considered higher-risk than
branch-originated loans, and are subject to a foreclosure frequency
adjustment factor of 150%.

RATING SENSITIVITIES

A worsening of the Spanish macroeconomic environment, especially
employment conditions or an abrupt shift of interest rates, could
jeopardise the underlying borrowers' affordability. This could have
negative rating implications, especially for junior tranches that
are less protected by structural CE.

CRITERIA VARIATION

Shortened Back-loaded Default Distribution

For Bancaja 7, Fitch has shortened the back-loaded default
distribution timing to 172 months from 180 months to align it with
the remaining time to maturity of the last maturing loan in the
portfolio. This constitutes a variation from its European RMBS
Rating Criteria. The model-implied rating impact of this variation
cannot be assessed as cash flows cannot be modelled without this
adjustment.

Recovery Rate Haircut

For Bancaja 9, Fitch has applied a 15% haircut to the ResiGlobal
model-estimated recovery rates across all rating scenarios
considering the materially lower transaction recoveries on
cumulative defaults observed to date (around 61%) versus
un-adjusted model expectations. This constitutes a variation from
its European RMBS Rating Criteria with a maximum model-implied
rating impact of 3 notches.

USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10

Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.

DATA ADEQUACY

Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset
pools and the transactions. There were no findings that affected
the rating analysis.

Fitch has not reviewed the results of any third-party assessment of
the asset portfolio information or conducted a review of
origination files as part of its ongoing monitoring. Fitch did not
undertake a review of the information provided about the underlying
asset pools ahead of the transactions' initial closing.

The subsequent performance of the transactions over the years is
consistent with the agency's expectations given the operating
environment and Fitch is therefore satisfied that the asset pool
information relied upon for its initial rating analysis was
adequately reliable.

Overall, Fitch's assessment of the information relied upon for the
agency's rating analysis according to its applicable rating
methodologies indicates that it is adequately reliable.




===========
T U R K E Y
===========

DOGAN SIRKETLER: Moody's Withdraws B1 CFR for Business Reasons
--------------------------------------------------------------
Moody's Investors Service has withdrawn Dogan Sirketler Grubu
Holding A.S.'s B1 corporate family rating and negative outlook.

RATINGS RATIONALE

Moody's has decided to withdraw the rating for its own business
reasons.

PRINCIPAL METHODOLOGY

The principal methodology used in this rating was Investment
Holding Companies and Conglomerates published in July 2018.

COMPANY PROFILE

Dogan Holding is an investment holding company that owns majority
stakes in companies operating within the energy, petroleum
distribution, automotive retail, internet and entertainment,
financial services, real estate, and industry & other sectors. The
company is listed on the Turkish stock exchange and is 64.1% owned
by the Dogan family. For the nine months ended September 30, 2019,
the group reported consolidated revenue of TL9.8 billion ($1.6
billion) and reported EBITDA of TL560 million ($93 million).


VOLKSWAGEN DOGUS: Fitch Affirms BB- LongTerm IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed Volkswagen Dogus Finansman A.S.'s and
VDF Faktoring A.S.'s Long-Term Issuer Default Ratings at 'BB-'. The
Outlooks are Stable.

Volkswagen Dogus Finansman A.S.

  - LT IDR BB- Affirmed

  - ST IDR B Affirmed

  - Natl LTAAA(tur) Affirmed

  - Support 3 Affirmed
  
VDF Faktoring A.S.

  - LT IDR BB- Affirmed

  - ST IDR B Affirmed

  - Natl LT AAA(tur) Affirmed

  - Support3 Affirmed  

KEY RATING DRIVERS

IDRS, SUPPORT RATINGS AND NATIONAL RATINGS

The ratings of VDF and VDFF are driven by support from their
controlling shareholder - Volkswagen Financial Services AG (VWFS)
and ultimately from Volkswagen AG (VW, BBB+/Stable). Despite
Turkey's worsened economic environment both companies maintain
their strategic importance for VW group, given their role in
facilitating the group's sales in Turkey. Both VDF and VDFF
somewhat rely on the group's funding, sourcing 17% and 35%
respectively of their total funding from VW.

VDF's and VDFF's Long-Term IDRs are capped by Turkey's Country
Ceiling of 'BB-'. The Country Ceiling captures transfer and
convertibility risks and limits the extent to which support from
VWFS or VW can be factored into VDF's and VDFF's Long-Term
Foreign-Currency IDRs.

VDF is one of the Turkey's market leaders among both banks and
non-bank financial institutions in auto financing volumes with
around a 13% domestic market share at end-2019, focusing almost
exclusively on VW brands and operating through more than 160 sale
points across Turkey. VDF's penetration into VW's sales locally was
32% in 2019. VDF finances retail customers (individuals and SMEs)
and fleet management companies.

VDFF provides financing to small- to medium-sized companies -
primarily Turkish dealers of VW brands. Thus its customer base is
limited to around 100 dealers and a small number of large fleet
management companies. VDFF's receivables book is short-term at
around 30 days and subject to high seasonality with peaks at around
year-end.

VDF and VDFF are each 51%-owned by VW (via VWFS) and 49% by Dogus
Holding. Dogus is a large Turkish conglomerate and a sole importer
of VW vehicles in Turkey. VW exercises operational control, but
Dogus has significant involvement in running the companies,
including appointing three out of seven representatives on the
respective supervisory boards.

Dogus has been loss-making since 2015, and is known for
renegotiating its debt with local banks. Fitch expects no material
contagion risk for VDF and VDFF and therefore no adverse
implication for the ratings, as the companies are run independently
without relying on Dogus for funding or business origination and
are associated to market participants predominantly with the VW
group.

VDF operates with very high leverage, at 27x debt/ tangible equity
at end-2019. Its statutory accounts leverage, or equity-to-assets,
was 5% at end-2019. Fitch would expect VDF's leverage to
deteriorate further in 2020, should the company resume portfolio
expansion or record further losses. Fitch, however, expects the
statutory ratio to remain within the regulatory leverage limit of
3%, which it views as quite loose. In Fitch's view, material
deferred tax assets and intangibles amounting to 35% of end-2019
equity weigh on VDF's solvency metrics.

VDFF's debt-to-tangible equity ratio was lower at 1.2x at end-2019,
largely a function of a downsized balance sheet and full retention
of high profits from previous periods. Statutory leverage
(equity-to- assets of 42% at end-2019 was comfortably above the
regulatory requirement of 3%).

VDF's net interest margin (NIM) narrowed further to around 0.9% in
2019 on interest expense increase. Management expects to keep NIM
at around 1% in 2020. As a result of Turkey's currency crisis
followed by falling car sales, liquidity squeeze and rise in lira
funding cost, operating profit was not sufficient to cover elevated
impairment costs in both 2018 and 2019. Hence the company reported
negative returns in both financial years but management expects to
break even in 2020. However, combined profitability before taxation
of the broader VDF Group, which includes VDF and VDF Servis,
remained positive at around TRY9 million in 2019.

VDFF was able to avoid negative returns, but reported significant
impairment losses, related to a delinquent single large exposure,
at around 75% of pre-impairment income. Fitch expects VDFF's
pre-impairment performance to normalise in 2020, subject to
asset-quality stabilising. The factoring book is lumpy so potential
credit risk could erase the net return.

VDF reported deteriorating asset quality in 2019, as non-performing
loans (NPLs) peaked at 11.5% at end-2Q19, before easing to 6.6% at
end-2019 (IFRS: 6.1% at end-2019). It expects NPLs to remain
elevated in 2020 (not accounting for any potential NPL
write-off/sales).

VDFF's NPLs spiked to a high 47% at end-2019 due to one sizable
receivable and because factoring book shrunk 62% during the year.
Management expects to work-out this exposure in 2020 but Fitch
foresees continuing pressure on asset quality as counterparty risk
remains high.

VDF and VDFF rely on bilateral borrowings, but have adequate
diversification by fund providers within this segment. VDF also
uses the securitisation market at around 7% of total funding.

VDF and VDFF reduced their cash buffer in 2019, but the companies'
business model does not assume large unexpected cash outflows and
therefore does not require for a vast liquidity cushion.
Additionally, Fitch expects the companies would benefit from
parental support in case of liquidity stress.

VDF's and VDFF's 'AAA(tur)' National Long-Term Rating reflects
Fitch's view that due to its assessment of the available
institutional support from VWFS and VW, the companies are among the
strongest credits in Turkey. The Stable Outlook reflects Fitch's
view that it does not expect changes to their creditworthiness
relative to other Turkish issuers.

RATING SENSITIVITIES

IDRS, SUPPORT RATINGS AND NATIONAL RATINGS

VDF's and VDFF's Long-Term IDRs are likely to move in tandem with
Turkey's Country Ceiling, which is currently in line with Turkey's
sovereign IDR with a Stable Outlook.

Diminished support from VW, for example, as a result of dilution of
ownership in the companies, a loss of operational control or
diminishing of importance of the Turkish market could trigger a
downgrade.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

VDF's and VDFF's ratings are driven by support from VWFS and
ultimately from VW.



=============
U K R A I N E
=============

AGRICOLE BANK: Fitch Affirms 'B+' LongTerm Foreign Currency IDR
---------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Foreign-Currency Issuer
Default Ratings of PJSC Credit Agricole Bank, ProCredit Bank
(Ukraine) and PRAVEX-BANK JSC at 'B' and Long-Term Local-Currency
IDRs at 'B+'. The Outlooks are Positive, in line with that on the
Ukraine sovereign. Fitch has also affirmed Ukrainian JSC
Alfa-Bank's Long-Term Foreign- and Local-Currency IDRs at 'B-' with
Stable Outlook and upgraded its Viability Rating to 'b-' from
'ccc'. Simultaneously, Fitch has affirmed the VRs of CAB and PCBU
at 'b' and of Pravex at 'b-' and removed the VRs from Rating Watch
Positive.

KEY RATING DRIVERS

IDRS, NATIONAL RATINGS, DEBT RATINGS AND SUPPORT RATINGS

CAB, PCBU and Pravex's Long-Term Foreign-Currency IDRs of 'B' and
Support Ratings of '4' reflect the limited extent to which
institutional support from their foreign shareholders can be
factored into the ratings, as captured by Ukraine's Country Ceiling
of 'B'. The Country Ceiling reflects Fitch's view of transfer and
convertibility risks in Ukraine.

The 'B+' Long-Term Local-Currency IDRs of CAB, PCBU and Pravex, one
notch above their Long-Term Foreign-Currency IDRs and the sovereign
rating, take into account the slightly lower potential impact of
Ukrainian country risks on the issuers' ability to service senior
unsecured obligations in the local currency, hryvnia, than in
foreign currency.

CAB is fully owned by Credit Agricole S.A. (A+/Stable). PCBU is
fully owned by Germany's ProCredit Holding AG & Co. KGaA
(BBB/Stable). Pravex is fully owned by Intesa Sanpaolo S.p.A.
(BBB/Negative).

ABU's Long-Term Local- and Foreign-Currency IDRs are driven by the
bank's 'b-' VR and are underpinned by Fitch's view of potential
support from its controlling shareholder, ABH Holdings S.A and the
wider group, which is reflected in ABU's Support Rating of '5'. ABH
Holdings S.A. is part of Alfa Group's financial business and is the
owner of several other banking subsidiaries, mostly in the CIS,
including Russia-based OJSC Alfa-Bank (BB+/Positive).

The 'AAA(ukr)' National Ratings of CAB and PCBU are driven by
potential shareholder support and reflect the banks' status as two
of the highest rated local issuers. The 'AA+(ukr)' and 'BBB+(ukr)'
National Ratings of Pravex and ABU, respectively, reflect their
unchanged creditworthiness relative to peers.

ABU's senior unsecured debt ratings of 'B-' and 'BBB+(ukr)' are
aligned with its Long-Term Local-Currency IDR and National
Long-Term Rating, respectively. The Recovery Rating of 'RR4'
reflects Fitch's view of average recovery prospects on the
instrument in the event of the issuer's default.

VRS

Fitch placed the four banks' VRs, together with those of other
rated Ukrainian banks, on RWP in September 2019 following the
upgrade of the sovereign rating. Following the peer review, it has
upgraded ABU's VR and affirmed the VRs of the other three banks.

The upgrade of ABU's VR reflects its improved financial profile. At
the same time, the VR remains constrained by still significant
capital encumbrance due to its unreserved impaired exposures. Fitch
also considers potential risks from ABU's recent merger with its
distressed and deeply loss-making sister bank, Ukrsotsbank (UB),
which may have a more detrimental impact on its financial profile
than Fitch's consolidated estimates and base case assumptions
suggest.

The affirmation of the VRs of CAB, PCBU and Pravex reflect the
limited changes in the banks' credit profiles since the last
review. Fitch believes it is no longer appropriate to assign CAB
and PCBU VRs above the sovereign rating given observed asset
quality volatility, while Pravex's VR is constrained by its very
small size and weaknesses in its business model.

ABU

The absolute volume of impaired exposures (Stage 3 and purchased or
originated credit-impaired loans) on a combined basis (ABU and UB)
materially reduced to an estimated UAH28 billion at end-3Q19 from
UAH41 billion at end-2018 due to loan write-offs, sales and some
recoveries. (Combined numbers and ratios for ABU and UB at end-3Q19
are Fitch estimates based on line-by-line combinations of balance
sheet and income statement data and exclusion of inter-company
transactions). At the same time, the share of impaired exposures
remained an elevated 46% of total gross loans at end-3Q19. The
majority (almost 75%) of impaired loans were inherited from UB's
distressed loan book. Coverage of impaired exposures by total loan
loss allowances (LLAs) was only a moderate 80% at end-3Q19,
reflecting reliance on collateral.

Fitch estimates that the two banks' combined FCC ratio at end-3Q19
was a moderate 13%, up from 11% at end-2018, supported by somewhat
improved profitability and lack of growth. Capitalisation continues
to be pressured by sizeable impaired loans, which net of total LLAs
amounted to 0.8x FCC at end-3Q19, down from 1.1x at end-2018 and
1.9x at end-2017, based on combined accounts of the two banks.

ABU's standalone performance improved in 9M19, due to higher
revenues from retail business and a reduced cost of risk, resulting
in a 34% return on average equity (ROAE). However, the deeply
loss-making UB meant that the combined bottom line result
translated into a ROAE of only 7%. At the same time, Fitch believes
that incremental risks for ABU's performance could be high because
of potential provisioning requirements against unreserved impaired
exposures.

ABU's funding and liquidity benefits from a relatively granular
deposit base (97% of end-3Q19 combined liabilities), lack of
third-party wholesale debt funding and strong liquidity position.
Highly liquid assets (cash, unencumbered securities, placements
with investment grade banks and the National Bank of Ukraine, NBU,
net of mandatory reserves) covered a reasonable 31% of total
deposits at end-3Q19.

CAB and PCBU

The 'b' VRs of CAB and PCBU capture their strong credit profiles in
the local context, healthy performance through the cycle, low share
of impaired exposures and sound capitalisation. At the same time,
the ratings remain constrained by the potential volatility of the
high-risk Ukrainian operating environment.

At end-3Q19, the shares of impaired loans amounted to 5% and 4% at
CAB and PCBU, respectively. During the recent crisis, the two banks
experienced some asset quality volatility, but successfully managed
to clean up their balance sheets thanks to strong loss absorption
capacity and shareholder support (PCBU). Coverage of impaired
exposures by total LLAs was 100% at CAB and a more moderate 64% at
PCBU at 9M19, reflecting reliance on collateral.

CAB and PCBU reported strong bottom line results in 9M19
(annualised ROAE of 40% and 22%, respectively), underpinned by
solid margins, strong commission income (CAB) and good operating
efficiency. Both banks remained profitable through the cycle and
Fitch expects low cost of risk and renewed lending growth to help
CAB and PCBU maintain ROAE around current levels.

Capitalisation is supported by strong performance and capital
injections from the shareholder (PCBU). At end-3Q19, the FCC ratio
was a healthy 16% and 20% at CAB and PCBU, respectively. Fitch's
view of the banks' capital positions as sound is further
underpinned by limited incremental provisioning risks, reasonable
growth plans and moderate dividend pay-outs (CAB).

Both banks' funding profiles benefit from stability of deposits,
healthy liquidity positions and lack of third-party wholesale
borrowings (CAB). Highly liquid assets, net of wholesale repayments
within the next 12 months, covered a reasonable 23% of deposits at
both banks.

Pravex

Pravex's 'b-' VR balances its very small size and weak business
model, as captured by the bank's negative pre-impairment
profitability over the last seven years, against its solid asset
quality and capitalisation metrics due to the recent balance sheet
clean-up and equity injections from the parent. The bank's business
model is still evolving as Pravex has recently shifted its focus
from second-tier borrowers towards large Ukrainian and
multinational companies along with affluent retail clients.

Pravex's impaired loans were equal to 0.5% of gross loans at
end-3Q19, fully covered by LLAs. Concentration of the loan book was
high as the majority of loans were written-off in 2015-2017, while
loan growth in 2018 and 9M19 was driven by a few large exposures.

Profitability remains weak. The operating profit/RWAs ratio was a
negative 5.4% in 9M19 (annualised), pressured by the contraction of
the business and therefore elevated operating expenses relative to
gross revenues (121%). Annualised ROAE was also a negative 3.4%. If
adjusted for non-recurring incomes from sales of repossessed
property, ROAE would have been a weaker negative 5%.

Fitch estimates that the bank's FCC/regulatory RWAs ratio was a
very strong 106% at end-3Q19, benefiting from the zero
risk-weighting of sovereign debt securities (43% of assets). If
these were 100% risk-weighted, the FCC ratio would have still been
robust at 47%.

The bank's liquidity was in large surplus at end-3Q19 given the
liquid assets at 1.1x deposits. While potentially helped by
Pravex's association with its Italian parent, the bank's liquidity
might become tighter as it will likely gradually be absorbed by
loan growth.

RATING SENSITIVITIES

IDRs, NATIONAL RATINGS, SUPPORT RATINGS AND SENIOR DEBT

The IDRs of CAB, PCBU and Pravex could be upgraded if Ukraine's
sovereign ratings are upgraded and the Country Ceiling is revised
upwards. Fitch would revise the Outlooks to Stable if the Outlook
on the sovereign rating is revised back to Stable.

An upgrade of ABU's IDRs, National Rating and senior debt ratings
would require either a strengthening of the support track record
for the bank (not currently its base case scenario), or improvement
of the bank's standalone profile, as captured by ABU's VR.

VRS

The banks' VRs could come under pressure in case of renewed asset
quality deterioration, leading to weaker performance and capital
positions without support being provided by shareholders.

An upgrade of ABU's and Pravex's VRs would require a material
reduction of impaired exposures (ABU) and improvement in core
profitability metrics. The VRs of CAB and PCBU could be upgraded in
case of a further improvement of the operating environment and a
reduction of sovereign and macroeconomic risks.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

The IDRs of CAB, PCBU and Pravex and Support Ratings of all four
banks are driven by institutional support from their shareholders.

ESG CONSIDERATIONS

ABU has an ESG credit relevance score of '4' for Group Structure
due to its recent merger with its sister bank which had a weaker
financial profile. This had a negative impact on the credit
profile, and is relevant to the ratings in conjunctions with other
factors.

CAB's, PCBU's and Pravex's highest ESG credit relevance score is
'3'. This means that ESG issues are credit-neutral or have only a
minimal credit impact on these banks, either due to their nature or
to the way in which the issues are being managed by these
entities.

PJSC Credit Agricole Bank

  - LT IDR Affirmed at B

  - ST IDR Affirmed at B

  - LC LT IDR Affirmed at B+

  - LC ST IDR Affirmed at B

  - Natl LT Affirmed at AAA(ukr)

  - Viability Affirmed at b

  - Support Affirmed at 4
  
ProCredit Bank (Ukraine)

  - LT IDR Affirmed at B

  - ST IDR Affirmed at B

  - LC LT IDR Affirmed at B+

  - LC ST IDR Affirmed at B

  - Natl LT Affirmed at AAA(ukr)

  - Viability Affirmed at b

  - Support Affirmed at 4

JSC Alfa-Bank

  - LT IDR Affirmed at B-

  - ST IDR Affirmed at B

  - LC LT IDR Affirmed at B-

  - Natl LT Affirmed at BBB+(ukr)

  - Viability Upgraded to ccc

  - Support Affirmed at 5

  - senior unsecured Affirmed at B-

  - Natl LT Affirmed at BBB+(ukr)

PRAVEX-BANK JSC

  - LT IDR Affirmed at B

  - ST IDR Affirmed at B

  - LC LT IDR Affirmed at B+

  - Natl LT Affirmed at AA+(ukr)

  - Viability  Affirmed at b-

  - Support Affirmed at 4


VODAFONE UKRAINE: S&P Assigns 'B' ICR, Outlook Stable
-----------------------------------------------------
S&P Global Ratings is assigning its 'B' issuer credit rating to
Vodafone Ukraine PRJSC (VF Ukraine) and its 'B' issue rating to the
loan participation note (LPN) issued by VF Ukraine's financing
vehicle, VFU Funding PLC.

VF Ukraine is the No. 2 mobile operator in the three-player
Ukrainian market. It has a large customer base of about 20 million,
more than 600 stores, the largest retail network in Ukraine, and
telecom networks on par with the competition. Its market share is
37.3% by subscriber and revenue, behind Kyivstar, a subsidiary of
Veon, which is the market leader with 50%. Its market share is
comfortably above that of Lifecell, a subsidiary of Turkcell
(13%).

The company has been investing in its retail network to transition
its distribution model to a fully owned retail network, from
partner owned. By the end of September 2019, the number of leased
or fully owned retail stores had increased to 247, from 63 a year
earlier. VF Ukraine's third-generation (3G) network covers 86% of
the population; its 4G network covers 66%. This is comparable with
the market leader. These factors, combined with the well-recognized
Vodafone brand, should help VF Ukraine to maintain its market
position.

Average revenue per user (ARPU) growth is improving VF Ukraine's
growth prospects. S&P's forecast suggests that the total number of
mobile subscribers will remain flat overall, but rising ARPU should
enable total market revenue to increase by more than 10%. Average
mobile ARPU in the third quarter of 2019 was $2.77, one of the
lowest levels in the world.

Increasing mobile penetration should also support revenue. Mobile
broadband penetration in Ukraine is low, at about 50%, and
4G-enabled smart phone penetration is only about 40%. Monetization
of 3G and 4G data service, driven by increasing smartphone
penetration and mobile data consumption, should help ARPU increase.
Furthermore, S&P expects that as economic conditions in Ukraine
improve--household income grew by more than 10% in 2019--we could
see modest price increases, given the concentrated market
structure.

High profitability should translate into strong free cash flow
conversion, despite high capital expenditure (capex).

VF Ukraine's adjusted EBITDA margins average about 50%. Margins
dipped to 47% in 2019, because of the company's investment in the
retail network. This is still higher than many other rated telecom
operators in Europe; in the Commonwealth of Independent States
region, adjusted EBITDA margins are generally 30%-40%. Despite high
capex (excluding spectrum costs) of above 22% of revenue, these
margins have enabled VF Ukraine to achieve solid free cash flow
generation and conversion. S&P expects free cash flow conversion
(free cash flow excluding spectrum/revenue) of about 10% in 2019,
increasing to 20% by 2021.

VF Ukraine is exposed to regulatory risk and high country risk in
Ukraine. Ukraine is exposed to macroeconomic risk, such as
structural weakness in financial institutions, institutional risk,
and geopolitical tensions with Russia.

Although S&P is mindful that relations between Ukraine and Russia
have recently improved, these conflicts have directly hindered VF
Ukraine's operations because it is one of the mobile companies
operating in the occupied regions (Temporarily Occupied Territory
of Donetsk and Luhansk regions). These regions represent 5%-10% of
VF Ukraine's revenue. Not only is it seeing a steady decline in
subscribers in the occupied regions, but VF Ukraine's ability to
launch 3G and 4G services is also restricted, preventing the
company from monetizing data in these regions. The result has been
to depress VF Ukraine's ARPU--it has the lowest ARPU among the
three domestic players because it has a sizable presence in the
occupied regions.

The Ukrainian mobile market is exposed to certain regulatory risk,
such as passportization (Requirement of mandatory registration is
not enshrined in Ukraine and S&P expects it will be implemented in
coming year). Although mobile subscription does not currently
require an official identity document, S&P understands a regulatory
change could require customers to provide proof of identification
when registering a subscriber identity module (SIM) card. If
implemented, this regulatory change could result in a loss of
subscribers for VF Ukraine.

VF Ukraine has a relatively modest scale of operations, and a
narrow product profile. Its group revenue was Ukrainian hryvnia
(UAH) 12.8 billion ($460 million) as of the financial year ending
Dec. 31, 2018 (FY2018). This is much smaller than most telecom
operators. Furthermore, VF Ukraine is a mobile-only
operator--unlike its main competitor, Kyivstar, which also has
fixed operations. That said, Ukraine's fixed broadband market is
fragmented. Kyivstar's share of the fixed market is 9% and the No.
1 player only has a 15% market share. The fixed market has grown by
more than 10% in the past few years and we expect it to grow at
similar levels in future as penetration rises from its current low
level of 64%. In Western Europe, penetration is typically close to
90%.

The company issued $500 million in LPNs to refinance its existing
bridge loan facility. We anticipate that the issuance will mean
adjusted debt to EBITDA of 2.0x-2.5x and FOCF to debt of about 10%
in 2020. On Dec. 3, 2019, MTS concluded the sale of VF Ukraine to
Azerbaijan-based NEQSOL Holding for a total consideration of $678
million. NEQSOL financed the acquisition using equity combined with
a bridge loan facility of $464 million. VF Ukraine intends to
refinance this facility using proceeds from the LPN issuance. An
issuance of $500 million will cause adjusted debt to EBITDA to
spike at about 2.5x in 2020, before coming down to 2.0x-2.5x in
2021. The company is committed to reducing leverage. Its target is
for debt to operating income before depreciation and amortization
to be below 1.5x, which translates into S&P Global Ratings-adjusted
debt to EBITDA below 2.0x. This should support a decline in our
adjusted leverage in 2021.

VF Ukraine's capital structure is exposed to potential currency
risk on its debt because the LPN is U.S. dollar denominated, but
the company generates nearly all of its revenue in hryvnia. It
holds about 35% of its cash in hard currencies, which partly
mitigates the foreign exposure risk on the capital structure. In
addition, S&P's base case already factors in modest annual
depreciation of the hryvnia against the U.S. dollar.

VF Ukraine's 4G coverage by population is broadly comparable with
its competitors', but only reached about 66% of the population as
of October 2019. The company plans to invest in widening its 4G
network so that it reaches about 90% by 2022. S&P estimates capex
will remain high, at more than 23% of sales in 2020. As such, S&P
expects FOCF to debt to be about 10% in 2020 before increasing to
above 15% in 2021.

S&P said, "We assess VF Ukraine as a highly strategic subsidiary of
NEQSOL Holding. NEQSOL Holding is the ultimate parent of VF Ukraine
and directly and indirectly owns a 100% stake in the company. It is
a diversified Azerbaijan-based company that operates in the
telecommunications, energy, and construction businesses. NEQSOL
Holding's stand-alone credit profile is stronger than that of VF
Ukraine because of its larger scale of operations, more-diversified
product profile, and stronger credit ratios. However, its exposure
to Ukraine, where it now generates 45% of EBITDA, constrains its
creditworthiness. Its group credit profile is 'b+'.

"We view VF Ukraine as a highly strategic part of the group because
it contributes about 45% of group EBITDA. As such, we consider
NEQSOL Holding would not likely sell VF Ukraine in the short to
medium term. NEQSOL Holding demonstrated its commitment to VF
Ukraine in December 2019, when it injected $214 million of equity
into the subsidiary to finance the acquisition. However, NEQSOL
Holding lacks a track-record of providing support to the companies
it owns, which we regard as a negative. Despite this, we still
consider VF Ukraine important to the group's future strategy and
expect the rest of the group to support it.

"Our rating on VF Ukraine is capped by our 'B' transfer and
convertibility (T&C) assessment on Ukraine.Our T&C assessment on
Ukraine reflects our view of the likelihood that the Ukrainian
government would restrict access to foreign exchange liquidity for
Ukrainian companies. As VF Ukraine is a non-export company and all
of its revenue comes from Ukraine, we cap our foreign currency
rating on it at 'B'.

"Our stable outlook indicates that we expect solid revenue growth,
supported by price increases on the back of data monetization and
gradually expanding adjusted EBITDA margins above 50% in 2020-2021
to lead to adjusted debt to EBITDA below 3x and FOCF to debt at
about 10%."

S&P could lower the rating if it lowered its sovereign rating or
its T&C assessment on Ukraine.

S&P could raise the rating if it raises its T&C assessment on
Ukraine.




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

ANTIGUA BIDCO: Moody's Affirms B2 CFR, Outlook Stable
-----------------------------------------------------
Moody's Investors Service has affirmed the B2 corporate family
rating, B2-PD probability of default rating and B2 instrument
ratings of Antigua Bidco Limited, the UK-based off-patent branded
drugs provider. The rating action was prompted by the company's
announcement that it was seeking to raise a EUR260 million senior
secured first lien fungible add-on term loan B and would receive
approximately EUR138 million in equity from its shareholders to
fund the acquisition of a portfolio of cardiovascular drugs from
AstraZeneca PLC (A3 stable) and a women's health drug from another
large pharma vendor. The outlook on all ratings remains stable.

RATINGS RATIONALE

"The acquisitions of Zagreb and Nemo will increase Atnahs' size and
scale and will generally be positive for business profile
diversification, whilst the debt and equity funding mix will help
maintain forward-looking credit metrics in line with the
requirements for a B2 rating" says Frederic Duranson, a Moody's
Assistant Vice President and lead analyst for Atnahs. "However,
there is no scope for underperformance given the operational risks
associated with the transfer of portfolios and the uncertainty
around the cost structure once the business exits the transitional
services agreements it has with large pharma vendors" Mr Duranson
adds.

Atnahs' credit profile is supported by its improved geographic and
product diversification, which remains good compared to the group's
size. Pro forma for Zagreb and Nemo, top three products will
represent less than 40% of revenues. The group's geographic
footprint will remain balanced with the largest single country (now
Italy, instead of its domestic market of the UK) representing just
over 10% of revenues. This helps mitigate any adverse developments
in a single country in relation to competition, regulation or
supply. However, Moody's does not consider that the addition of the
new cardiovascular therapeutic area improves the business profile
because it will become the group's largest and will offer
relatively fewer synergy opportunities with the rest of the
portfolio than existing therapeutic areas.

The company retains its dependence on third parties for
manufacturing and distribution, with continued concentration pro
forma for the new acquisitions. In the fiscal year 2019, ended 31
March 2019 ('fiscal 2019'), Roche Holding AG (Aa3 positive)
represented half of cost of goods sold (COGS) and Moody's estimates
that AstraZeneca will represent around 30% (pro forma) in fiscal
2020, before any potential technical transfers which would reduce
the supplier concentration.

The acquisitions present a similar financial profile to Atnahs'
existing business, therefore the group will retain its high margins
between 45% and 50% on a Moody's-adjusted basis, whilst its
asset-light business model will continue to result in solid cash
conversion translating into free cash flow (after interest and
before acquisitions, 'FCF') of at least GBP40 million in the next
twelve months. Having said that, Moody's forecasts declining
margins because of the likely increase in the cost base following
the exit from the various transitional services agreements (TSAs)
because of (1) additional fixed costs needed to integrate the new
portfolios, (2) less favourable distribution terms post-transfer,
and (3) uncertainty around the level of achievable manufacturing
and packaging savings. In addition, Moody's expects that working
capital will be somewhat volatile owing to additional inventory and
receivables build-up ahead of marketing authorisation transfers,
whose timing varies.

In the nine months to December 2019, Atnahs has performed in line
with expectations at the revenue, EBITDA and cash flow level and
Moody's estimates that adjusted gross debt/EBITDA at the end of
December stood at 5.1x versus 4.9x as of the end of March 2019, pro
forma for the LBO by Triton. The equity component in the
acquisitions' funding mix supports the financial profile and pro
forma Moody's adjusted leverage at the end of fiscal 2020 will be
around 4.3x (including the new debt and a full 12 month's EBITDA
contribution from all acquisitions). However, the rating agency
forecasts that Atnahs will continue to face declining sales and
EBITDA on an organic basis such that adjusted leverage will rise
again to above 5.0x but will remain below 5.5x in the next 12 to 18
months (without any further acquisitions). Zagreb and Nemo have
recorded lower regression rates historically compared with Atnahs,
largely because they have been off-patent for longer. Such profiles
come at higher valuations and Moody's continues to believe that the
average multiples paid by Atnahs will rise compared with the
group's previous transactions because the company will continue to
be acquisitive, whilst competition for assets will be sustained.

Social risks are material to Atnahs' credit profile and principally
revolve around responsible production, including potential product
safety and manufacturing compliance issues with ensuing potential
litigation, mitigated by the age and simplicity of the molecules
that Atnahs deals with, as well as its good track record in this
respect. A social and governance issue that Moody's considers in
Atnahs' credit profile is the company's access to qualified staff
and resulting costs to cope with the new as well as further product
acquisitions and transitions of products from vendors.

In terms of governance, the rating agency incorporates risks around
(1) the adequacy of business controls as the group doubles its size
by revenue and EBITDA, and (2) the possibility that drug
acquisitions are made using debt at a leverage-increasing multiple,
the equity contribution for the recent acquisitions
notwithstanding.

Moody's assessment also takes into account the group's short track
record in the context of the pharma industry's cycle and for the
current portfolio of marketed drugs, some of which are still in
transition from the vendor.

Moody's views Atnahs' liquidity profile as adequate. The rating
agency expects that the group will have at least GBP20 million cash
on balance sheet at the end of fiscal 2020. The liquidity profile
benefits from solid free cash flow generation of around GBP40
million forecast in fiscal 2021 (after interest and before
acquisitions) and access to an upsized senior secured first lien
revolving credit facility (RCF) from the current EUR75 million (due
2026), which will remain undrawn at closing.

The B2 ratings on the term loan B and RCF are in line with the CFR,
reflecting the fact that they are the only financial instruments in
the capital structure.

RATING OUTLOOK

The stable outlook reflects Moody's expectation that the group will
manage its capital structure and acquisition policy in the context
of an organic decline in EBITDA such that Moody's adjusted gross
debt/EBITDA will be in the region of 5.0x. The stable outlook also
factors in at least GBP70 million free cash flow (after
exceptionals and interest) per annum, adequate liquidity and no
debt-funded acquisitions or shareholder distributions.

WHAT COULD CHANGE THE RATING UP/DOWN

Atnahs' ratings remain weakly positioned so upward pressure is
unlikely, however it could build up if the group (1) diversifies
its business model further, particularly by further increasing its
portfolio of brands and TSA partners, and (2) builds a longer and
successful track record as an acquirer and marketer of off-patent
drugs, and (3) reduces Moody's adjusted leverage to below 4.5x
sustainably, and (4) maintains cash flow from operations/debt above
15%.

Conversely, Atnahs' ratings could experience downward pressure if
(1) there are any delays in transferring marketing authorisations
or material supply chain issues, or (2) the group's organic EBITDA
declines at a materially faster rate than reported historically,
including as a result of higher costs post-TSA exits, or (3)
Moody's adjusted leverage rises towards 5.5x on a sustainable
basis, or (4) FCF generation weakens or the liquidity position
deteriorates. Moody's would also consider a negative rating action
if Atnahs were to execute another sizeable portfolio acquisition in
the next 12 to 18 months, unless substantially funded other than
from debt.

PRINCIPAL METHODOLOGY

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

CORPORATE PROFILE

Atnahs, headquartered in Basildon, UK, is a global sales and
marketing organisation focused on off-patent, branded and
prescription drugs, which outsources production to contract
manufacturing organisations and uses distribution partners in an
asset-light business model. The group is currently active in four
main therapeutic areas: women's health and endocrinology, neurology
and pain relief, oncology and oncology support and
gastroenterology. Atnahs currently markets 17 brands and around
1,000 stock keeping units across more than 130 countries.

The company was set up in 2013 by the Patel family following the
sale of predecessor company Amdipharm. Atnahs has grown through the
acquisition of drug licences historically. In the last 12 months to
December 2019, the company reported revenue of GBP124 million and
EBITDA of GBP60 million (before exceptional items).

In June 2019, financial sponsor Triton agreed to acquire a majority
stake in the business, in which the Patel family remains a
significant minority shareholder.


DEBUSSY DTC: S&P Lowers Class A Notes Rating to 'B-(sf)'
--------------------------------------------------------
S&P Global Ratings lowered its credit rating on Debussy DTC PLC's
class A notes to 'B- (sf)' from 'BB- (sf)'.

Rating rationale

The downgrade follows our review of the progress of the former Toys
"R" Us property portfolio's sale, which began in February 2018,
following the transfer of the loan into special servicing. S&P
believes that the protracted sales process--along with the
diversion of some disposal proceeds to pay for capital and
operating expenditures, note interest, and issuer expenses--has
worsened the notes' credit metrics.

Transaction overview

The transaction is backed by a fixed-rate interest-only loan and
was initially secured by 31 commercial properties located across
the U.K. The loan matures in July 2020. The properties were let to
Toys "R" Us Ltd. on 30-year leases.

Most of the assets were standalone detached stores built for Toys
"R" Us. They ranged in size from 24,785 sq. ft. to 49,771 sq. ft.,
and the average store size is 40,130 sq. ft. Most of the stores
were developed in the 1980s and early 1990s, and a number are
located in retail parks.

Following the insolvency of Toys "R" Us in February 2018, the loan
was transferred into special servicing with Solutus. Under Solutus,
there was a purchase option exercised, which allowed the sale of
assets from Toys "R" Us, the borrower, to Bollingway Properties, an
affiliate of Solutus. Subsequently, the special servicing was
transferred to CBRE in August 2018, and CBRE submitted a claim to
the High Court disputing the validity of the purchase option and
standstill, among other claims. In April 2019, there was a
settlement of litigation, which required the borrower (Bollingway
Properties) to achieve certain target sales and lettings by
specific dates with a right for the borrower to cure any failure to
meet those targets.

As of the July 2019 interest payment date (IPD), the target sales
and letting were not met, and the borrower did not remedy this
breach. As a result, CBRE has taken control of the portfolio.

Sales to date

Between February 2018 and January 2020, 16 properties have sold for
total gross sale proceeds of GBP100.7 million at a premium of 12.5%
above the reported 2018 market value. However, the whole loan has
only paid down by GBP55 million due to disposal proceeds being
diverted to pay note interest, issuer expenses, and capital and
operating expenditures.

For the remaining 15 properties, two leases have completed for a
projected annual rental income of GBP959,390 after the rent free
period expires. According to the January 2020 servicer report,
there are a number of acceptable offers for additional sales and
lettings. However, many are subject to conditional contracts with
no guarantee that the conditions (e.g. a change of planning
consent) will be met and that the timing of such conditions will be
satisfied.

Credit evaluation

S&P said, "For the remaining portfolio, we have calculated the S&P
Global Ratings net cash flow (NCF) based on 2018 market rent
figures, which assumes subdivisions for many of the stores. We used
a 12% vacancy factor in line with reported market vacancy levels
for similar retail assets. We applied a weighted average
capitalization (cap) rate of 8.5% against this S&P Global Ratings
NCF and deducted one year rent free, 15% letting cost, and 5%
purchase costs, to arrive at our S&P Global Ratings value."

Loan and collateral summary (as of January 2020):

-- Securitized debt balance: GBP208.2 million
-- Whole loan-to-value (LTV) ratio: 117.3%
-- Projected rental income: GBP959,390
-- Market value: GBP177.5 million

S&P Global Ratings' key assumptions:

-- S&P Global Ratings' gross rent fully let: GBP14.3 million
-- S&P Global Ratings' vacancy: 12.0%
-- S&P Global Ratings' expenses: 5.0%
-- S&P Global Ratings' NCF: GBP11.9 million
-- S&P Global Ratings' value: GBP120.0 million
-- Cap rate: 8.5%
-- Haircut-to-market value: 32.4%
-- S&P Global Ratings' LTV ratio (before recovery rate
adjustments): 173.5%

Other analytical considerations

Since January 2018, the assets have not generated cash flow. The
class A notes' interest and additional senior class C payment,
along with issuer expenses, have been paid by the reserve amounts
since January 2018. On day one, reserve amounts totaled GBP22.3
million, which have now all been used, so they have since been
topped up by a portion of the funds received from the disposal
account. As of the January 2020 IPD, the current reserve balance
totaled GBP12.5 million, and the disposal account totaled GBP13.6
million.

The disposal account is being used to fund capital and operating
expenditures and to pay for value-added tax (VAT) charged on sales.
To date, GBP9.0 million has been spent, with another GBP8.0 million
being budgeted to pay for value enhancements such as subdivision
works. Additionally, GBP6.1 million is being reserved for VAT.

As a result, S&P has given credit for the reserves and the amounts
in the disposal account, but it then deducted for budgeted capital
expenditures, VAT amounts, and one additional year of note interest
and senior costs. Therefore, the total amount deducted from our
recoveries is GBP1.7 million.

Rating actions

S&P's rating in this transaction addresses the timely payment of
interest, payable semiannually, and the payment of principal no
later than the legal final maturity date in July 2025.

The sales process to date remains protracted. Some of this is
attributed to the challenging environment for retail tenants. This
has meant the properties have had to be subdivided, which requires
the consent of councils. Another factor affecting the sale process
of the portfolio is the claim that was filed with the High Court
disputing the validity of the purchase option and standstill, among
other claims. Although there was ultimately a disposal deed to
facilitate the disposals of assets and a settlement in April 2019,
this likely slowed down the process and caused an increase in
issuer expenses and interest payable.

S&P said, "Having considered the above factors, we have lowered our
rating on the class A notes to 'B- (sf)' from 'BB- (sf)'. We
applied our European CMBS criteria including our credit and cash
flow analysis. In our analysis, the class A notes did not pass our
'B' rating level stresses, because the S&P Global Ratings LTV ratio
on the class A notes is 107.7%.

"Therefore we applied our 'CCC' criteria to assess if either a
rating in the 'B-' or 'CCC' category would be appropriate.
According to our 'CCC' criteria, for structured finance issues,
expected collateral performance and the level of credit enhancement
are the primary factors in our assessment of the degree of
financial stress and likelihood of default. We performed a
qualitative assessment of the key variables, together with an
analysis of performance and market data, and we do not consider
repayment of this class of notes to be dependent upon favorable
business, financial, and economic conditions. In particular, based
on the 2018 market valuation, the market LTV ratio for class A is
72.8%, and there would not be principal losses on this class."


DOUBLETREE TREETOPS: Ceases Trading, 80 Jobs Affected
-----------------------------------------------------
BBC News reports that dozens of employees have been made redundant
with the closure of an Aberdeen hotel.

According to BBC, The Doubletree Treetops Hotel, on Springfield
Road, was expected to shut on Thursday, Feb. 13.

Staff were told on Feb. 10 that the company that owns the hotel had
ceased trading, and on Feb. 12 guests were told there was no food
or drinks available, BBC relates.

Between 75 and 80 employees are understood to have been made
redundant, BBC discloses.



NMC HEALTH: KKR Not Interested in Making Offer for Company
----------------------------------------------------------
Kaye Wiggins and Daniel Thomas at The Financial Times report that
US private equity group KKR made a swift and strongly worded
retreat after the embattled FTSE 100 hospital operator NMC Health
said the buyout group was in the early stages of considering a bid
for it.

According to the FT, KKR published a statement on Feb. 11 saying it
"has not made a proposal nor discussed with NMC the terms of any
possible offer" and "does not intend to make an offer" for the
company.

NMC's announcement about KKR's interest was made alongside a
separate statement that it had asked its founder BR Shetty and
another top shareholder, Khalifa al-Muhairi, to step back from the
board as the size of their stakes in the company may have been
incorrectly reported, the FT relates.

While the buyout group did not deny having held early-stage talks
with NMC, the wording of its response suggested it was clearly
distancing itself from the company, which is now being probed by UK
regulators in the wake of the announcement on the reporting of its
shareholdings, the FT notes.

NMC has lost about two-thirds of its value since a report by
short-seller Muddy Waters in December raised questioned over its
finances and management, the FT discloses.


SURF INTERMEDIATE I: Fitch Gives 'B-' IDR & Rates Secured Debt 'B-'
-------------------------------------------------------------------
Fitch Ratings has assigned Surf Intermediate I Limited a final
Long-Term Issuer Default Rating of 'B-'/Stable and its first-lien
secured facilities a final rating of 'B-'/'RR4'/49%. The
instruments' rating has changed from 'B(EXP)'/'RR3'/53% following
the upsizing of the company's term loan B by USD100 million to
USD1,530 million. The company also downsized its second-lien loan
by the same amount so that the total amount of debt remains
unaffected.

The change in the debt composition, as well as lower-than-initially
expected coupons, will have a moderately positive impact on cash
flows and leverage due to lower interest expenses, but the leverage
profile is expected to remain consistent with an IDR of 'B-'.

Fitch believes the private equity ownership of Sophos could limit
deleveraging as its equity owners seek to optimise return on
equity. Fitch forecasts gross leverage to remain over 7x and funds
from operations adjusted gross leverage to decline to below 7x by
financial year to March 2023 through organic growth and cost
efficiency improvements. Sophos' operating and leverage profiles
are consistent with the 'B-' IDR. Fitch's ratings are supported by
Sophos' strong position in end-point and network security solutions
for the small-to-medium-sized businesses and mid-market market
segments.

KEY RATING DRIVERS

First-lien Upsizing Weakens Recoveries: The upsizing of the
first-lien senior secured loan has led to recovery prospects
declining below 51%, which is the threshold between 'RR3' and 'RR4'
Recovery Ratings as per Fitch's criteria. 'RR4' implies no uplift
for the instrument's rating to IDR. Sophos' first-priority debt
consists of USD125 million senior secured revolving credit facility
and an equivalent of USD1.53 billion first-lien senior TLB
comprising USD1,197 billion and EUR300 million tranches. The
underlying Fitch assumptions on post-restructuring EBITDA and an
enterprise value (EV) multiple for the recovery analysis remain
unchanged. Surf Holdings S.A.R.L. and Surf Holdings, LLC are
co-borrowers for the RCF and term loans.

High Leverage: Fitch forecasts Sophos' FFO adjusted gross leverage
at 11x at end-FY20, after its acquisition by ThomaBravo is
completed, and for it to rapidly decline to 8.5x in FY21 and 7.4x
in FY22, on organic EBITDA expansion and likely cost optimisation.
Its leverage profile has improved compared with its expected rating
case as the new composition of debt and lower-than-expected coupons
will result in lower interest expense. Sophos should retain strong
FCF generation after the acquisition despite a sharp increase in
debt service costs. Fitch expects Sophos to spend a substantial
part of excess cash on debt reduction, which will aid
deleveraging.

Deleveraging May Slow: The pace of deleveraging may slow over the
longer term as shareholder remuneration becomes a greater priority.
Fitch believes that the large equity contribution (USD2.2 billion)
to finance the acquisition indicates the private equity sponsor's
confidence in Sophos' business model.

Cost Efficiency Drives Margins: Fitch expects Sophos to deliver
EBITDA margin improvement within the next two years. Its forecast
envisages EBITDA margin increasing to 24% in FY23 from 17% in FY20,
which will be more consistent with the industry average and with
other software companies in Thoma Bravo's investment portfolio.
Fitch has seen strong execution on cost savings by other
Fitch-rated companies acquired by Thoma Bravo and believe that
execution risks with Sophos are moderate. It expects that one-off
costs related to operating expenses optimisation will be comparable
in size with its expectation for potential cost synergies in year
one.

Different EBITDA Definition: Fitch's definition of EBITDA differs
from that of Sophos. It does not include deferred revenue
adjustments, which contributed around 30% to the company's defined
EBITDA in FY19. However, the positive cash flow impact from
deferred revenues is included in the calculation of FFO and is
reflected in FFO adjusted leverage. Fitch's key metrics and key
financials are calculated on a pre-IFRS16 basis.

Sustainable Industry Growth: Fitch forecasts the global cyber
security market's CAGR at 10% over the next five years. The
continuing digitalisation of various industries, expansion of IT
applications and the protection of data and IT networks against
threats support the growth of the cyber security market. Market
studies suggest growing recognition of the importance of cyber
security by companies of all sizes. While the addressable overall
IT security market has been growing, the share of legacy security
software contribution developed by legacy vendors has been
declining with small niche solution providers taking a larger
combined share.

Fragmented Industry: The cyber security industry remains fragmented
with a large number of vendors focusing on different products,
which often results in several different vendors being used by a
single company. The market is going through a consolidation phase
with a large number of deals happening every year. New technologies
are continually being developed and deployed to address an
ever-evolving threat landscape, resulting in frequent new
entrants.

Strong Market Positions: Sophos has leading positions in its key
market segments of endpoint security and network security as
evidenced by high scores of market research firms and customer
ratings for its products. It is perceived as a leader in most of
the rankings, which positively affects customers' decisions when
choosing a cyber

security vendor. This results in strong customer growth and high
revenue retention rates exceeding 100% in the last four years for
Sophos and demonstrates its ability to retain subscribers and
upsell additional products.

Focus on SMB and mid-market: Sophos focuses on the SMB and
mid-market segments, which Fitch believes is a differentiating
factor from some of its peers, many of which target larger
companies. The current sustainable trend on simplification, cloud
solutions, integrated security solutions and managed services
allows customers to notably reduce IT costs and effectively
outsource cyber security issues to a third party. This trend is of
particular importance for SMB and mid-market segments where
companies may not be able to employ IT staff dedicated to cyber

security. Sophos is firmly-exposed to these trends with its
innovative cloud-enabled next-generation products utilising the
latest technologies such as AI and machine-learning.

Diversification Reduces Concentration Risk: Sophos has a highly
diversified SMB and mid-market end-customer base exceeding 400,000
as of the end1H FY20 across a wide range of industries. The
diversification across customers, countries and industries
effectively minimises customer concentration risks and reduces
revenue volatility through economic cycles.

DERIVATION SUMMARY

The ratings of Sophos are supported by its strong position in the
cyber security market for the SMB and mid-market segments. Fitch
expects this to be maintained as an increasing share of the
company's revenue comes from next-generation products and managed
services. Sophos benefits from a large and diversified end-customer
base, high end-customer retention rates and a substantial share of
subscription-based revenues. Sophos' operating profile compares
well with that of other Fitch-rated cyber security companies, in
particular Barracuda Networks, Inc. (B/Stable) and Imperva Inc.
(B/Stable). Compared with its peers, Sophos has higher leverage.
Strong cash flow generation allows it to comfortably operate with
elevated leverage over the next two years, with healthy
deleveraging capacity from EBITDA growth. Larger cyber security
companies such as Symantec (BB+/Negative) and Citrix (BBB/Stable)
benefit from larger scale and have notably lower leverage.

KEY ASSUMPTIONS

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

  - Revenue growth in mid-single digits over the next four years;

  - Fitch-defined EBITDA margin at 17% in FY20, improving to 24% by
FY23;

  - Deferred revenue included above FFO at around USD60
million-USD70 million per year up to FY24;

  - Capex at around USD20 million per year in FY20-FY23;

  - Annual working capital outflow between USD10 million and USD12
million up toFY24;

  - Voluntary debt prepayments between USD50 million and USD120
million in FY21-FY24, allowing the company to maintain a cash
balance of around USD100 million;

  - Around USD40 million of one-off costs related to likely cost
efficiency in FY21;

  - No M&A, besides earn-outs and retention payments up to FY24;
and

  - USD55 million of one-off tax payment in FY23.

KEY RECOVERY RATING ASSUMPTIONS

The recovery analysis assumes that Sophos would be reorganised as a
going-concern (GC) in bankruptcy rather than liquidated.

  - Fitch estimates that the post-restructuring EBITDA would be
around USD140 million. Fitch would expect a default to come from
either an inability to extract synergies (leading to sustained high
leverage and negative cash flow), or a secular decline or a drop in
revenue and EBITDA following a reputational damage or intense
competitive pressure. The USD140 million GC EBITDA is 22% lower
than an expected Fitch-defined pro-forma FY21 EBITDA of EUR179
million (which factors in continued market growth and some likely
cost reductions).

  - An EV multiple of 6.5x EBITDA is applied to the GC EBITDA to
calculate a post-reorganisation EV. The multiple is higher than the
median TMT EV multiple, but is in line with other similar software
companies that exhibit strong free cash flow characteristics. The
post-restructuring EBITDA accounts for Sophos' scale, its customer
and geographical diversification as well as the company's exposure
to secular growth in cyber security market. The historical
bankruptcy case study exit multiples for peer companies ranged from
2.6x to 10.8x, with a median of 5.3x. However, software companies
demonstrated higher multiples (5.5x-10.8x). In the current
transaction to acquire Sophos, Thoma Bravo is valuing the company
at approximately 15x pro-forma adjusted cash EBITDA or 23x reported
FY19 EBITDA. Fitch believes that the high acquisition multiple also
supports its recovery multiple assumption.

  - 10% of administrative claims have been taken off the EV to
account for bankruptcy and associated costs and the RCF is assumed
to be fully drawn, as per Fitch's criteria.

RATING SENSITIVITIES

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

  - Fitch's expectation of FFO adjusted gross leverage below 7.0x
on a sustained basis;

  - Mid- to high-single digit FCF margins; and

  - FFO fixed-charge coverage sustainably above 2.0x.

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

  - A weakening market position as evidenced by slowing revenue
growth or increasing customer churn;

  - Fitch's expectation of FFO adjusted gross leverage above 9.0x
on a sustained basis;

  - Low single-digit FCF margin delaying deleveraging; and

  - FFO fixed-charge coverage sustainably below 1.5x.

LIQUIDITY AND DEBT STRUCTURE

Strong Liquidity: Following the acquisition completion, Fitch
expects liquidity to remain strong over the next four years,
supported by positive FCF generation, a prudent approach to the
amount of cash on the balance sheet and a USD125 million RCF. The
next large debt maturity is in 2027.

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.




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

[*] BOOK REVIEW: Bankruptcy and Secured Lending in Cyberspace
-------------------------------------------------------------
Author: Warren E. Agin
Publisher: Bowne Publishing Co.
List price: $225.00
Review by Gail Owens Hoelscher

Red Hat Inc. finds itself with a high of 151 5/8 and low of 20 over
the last 12 months! Microstrategy Inc. has roller-coasted from a
high of 333 to a low of 7 over the same period! Just when the IPO
boom is imploding and high-technology companies are running out of
cash, Warren Agin comes out with a guide to the legal issues of the
cyberage.

The word "cyberspace" did not appear in the Merriam-Webster
Dictionary until 1986, defined as "the on-line world of computer
networks." The word "Internet" showed up that year as well, as "an
electronic communications network that connects computer networks
and organizational computer facilities around the world."

Cyberspace has been leading a kaleidoscopic parade ever since, with
the legal profession striding smartly in rhythm. There is no
definition for the word "cyberassets" in the current
Merriam-Webster. Fortunately, Bankruptcy and Secured Lending in
Cyberspace tells us what cyberassets are and lays out in meticulous
detail how to address them, not only for troubled technology
companies, but for all companies with websites and domain names.
Cyberassets are primarily websites and domain names, but also
include technology contracts and licenses. There are four types of
assets embodied in a website: content, hardware, the Internet
connection, and software. The website's content is its fundamental
asset and may include databases, text, pictures, and video and
sound clips. The value of a website depends largely on the traffic
it generates.

A domain name provides the mechanism to reach the information
provided by a company on its website, or find the products or
services the company is selling over the Internet. Examples are
Amazon.com, bankrupt.com, and "swiggartagin.com." Determining the
value of a domain name is comparable to valuing trademark rights.
Domain names can come at a high price! Compaq Computer Corp. paid
Alta Vista Technology Inc. more than $3 million for "Altavista.com"
when it developed its AltaVista search engine.

The subject matter covered in this book falls into three groups:
the Internet's effect on the practice of bankruptcy law; the ways
substantive bankruptcy law handles the impact of cyberspace on
basic concepts and procedures; and issues related to cyberassets as
secured lending collateral.

The book includes point-by-point treatment of the effect of
cyberassets on venue and jurisdiction in bankruptcy proceedings;
electronic filing and access to official records and pleadings in
bankruptcy cases; using the Internet for communications and
noticing in bankruptcy cases; administration of bankruptcy estates
with cyberassets; selling bankruptcy estate assets over the
Internet; trading in bankruptcy claims over the Internet; and
technology contracts and licenses under the bankruptcy codes. The
chapters on secured lending detail technology escrow agreements for
cyberassets; obtaining and perfecting security interests for
cyberassets; enforcing rights against collateral for cyberassets;
and bankruptcy concerns for the secured lender with regard to
cyberassets.

The book concludes with chapters on Y2K and bankruptcy; revisions
in the Uniform Commercial Code in the electronic age; and a
compendium of bankruptcy and secured lending resources on the
Internet. The appendix consists of a comprehensive set of forms for
cyberspace-related bankruptcy issues and cyberasset lending
transactions. The forms include bankruptcy orders authorizing a
domain name sale; forms for electronic filing of documents;
bankruptcy motions related to domain names; and security agreements
for Web sites.

Bankruptcy and Secured Lending in Cyberspace is a well-written,
succinct, and comprehensive reference for lending against
cyberassets and treating cyberassets in bankruptcy cases.



                           *********


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.

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

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

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


                * * * End of Transmission * * *