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

                          E U R O P E

          Thursday, May 7, 2020, Vol. 21, No. 92

                           Headlines



A R M E N I A

[*] Moody's Takes Action on 3 Armenian Banks on Coronavirus Crisis


B E L A R U S

BELARUSIAN NATIONAL: Fitch Affirms IFS Rating at B, Outlook Stable
BELARUSIAN REPUBLICAN: Fitch Affirms B IFS Rating, Outlook Stable


D E N M A R K

SGLT HOLDING: Fitch Affirms 'B-' LT IDR, Alters Outlook to Neg.


E S T O N I A

BALTIKA AS: Restructuring Advisor Draws Up Reorganization Plan


G E R M A N Y

MOLOGEN AG: Opts to Revoke Admission to Prime Standard


I R E L A N D

EUROMAX VI: Fitch Affirms Then Withdraws Csf Rating on Class C Debt
STRANDHILL RMBS: S&P Assigns Prelim BB (sf) Rating to F-Dfrd Notes


I T A L Y

PATRIMONIO UNO: Fitch Cuts 4 Note Classes to BBsf, On Watch Neg.
SISAL GROUP: S&P Cuts EUR275MM Notes Rating to B on COVID-19 Impact


K A Z A K H S T A N

BANK CENTERCREDIT: Moody's Affirms B2 Ratings, Outlook Now Stable
EURASIAN BANK: Moody's Affirms B2 Deposit Ratings, Outlook Now Neg.
FREEDOM FINANCE: Fitch Affirms Then Withdraws 'B' IFS Rating
STANDARD LIFE: Fitch Affirms IFS Rating at 'B', Outlook Stable


L A T V I A

LATVIJAS KRAJBANKA: High Court Tosses Appeal re KPMG Baltic's Award


L U X E M B O U R G

ADO PROPERTIES: Moody's Gives Ba1 CFR & Alters Outlook to Neg.
AI LADDER: Moody's Affirms B3 CFR, Alters Outlook to Negative
MALLINCKRODT INTERNATIONAL: Bank Debt Trades at 29% Discount


N E T H E R L A N D S

SAMVARDHANA MOTHERSON: S&P Lowers ICR to 'BB' on Weaker Earnings
SCHOELLER PACKAGING: Moody's Cuts CFR to B3, Outlook Negative
SYNCREON GROUP: Bank Debt Trades at 25% Discount


S P A I N

CAIXA PENEDES 1: Fitch Affirms Class C Notes at 'BBsf'
HAYA REAL ESTATE: S&P Alters Outlook to Neg. & Affirms 'B-' ICR


U K R A I N E

DNIPRO CITY: Fitch Affirms 'B' LT IDR, Alters Outlook to Stable
KHARKOV CITY: Fitch Affirms 'B' LT IDR, Alters Outlook to Stable
KYIV CITY: Fitch Affirms 'B' LT IDR, Alters Outlook to Stable
LVIV CITY: Fitch Affirms 'B' LT IDR, Alters Outlook to Stable
ODESA CITY: Fitch Affirms 'B' LT IDR, Alters Outlook to Stable

UKRAINIAN RAILWAY: Fitch Places 'B' LT IDR on Watch Negative


U N I T E D   K I N G D O M

COUNTYROUTE (A130): S&P Cuts Senior Secured Debt Rating to 'B'
EG GROUP: Fitch Cuts LT IDR to 'B-', Outlook Stable
ENGINE GROUP: Bank Debt Trades at 35% Discount
FOOTASYLUM: CMA Blocks JD Sports' Move to Acquire Business
MCLAREN HOLDINGS: Moody's Cuts CFR to Caa2, Outlook Negative

MOTO VENTURES: Fitch Cuts LT IDR to 'B-', Outlook Stable
NEWDAY PARTNERSHIP 2015-1: Fitch Affirms Class F Notes at BB-sf
SCOTT BROTHERS: Coronavirus Pandemic Prompts Administration
TAURUS CMBS 2006-2: Fitch Affirms Dsf Ratings on 3 Debt Classes
WRIGHTS GROUP: Bank of Ireland to Get Just GBP2MM of Money Owed

ZELLIS HOLDINGS: Moody's Affirms Caa1 CFR, Alters Outlook to Neg.
[*] Moody's Reviews 7 Note Ratings from 3 Loan Trusts for Downgrade

                           - - - - -


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A R M E N I A
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[*] Moody's Takes Action on 3 Armenian Banks on Coronavirus Crisis
-------------------------------------------------------------------
Moody's Investors Service took rating actions on three Armenian
banks, namely Ameriabank CJSC, Ardshinbank CJSC and Armeconombank.
Moody's affirmed the Baseline Credit Assessments, Adjusted BCAs and
long-term deposit ratings of all three banks and the long-term debt
rating of one bank. Outlooks on the long-term deposit ratings of
Ameriabank and long-term deposit and debt ratings of Ardshinbank
remain stable, while the outlook on Armeconombank's long-term
deposit ratings was changed to negative from stable.

Moody's also affirmed the three banks' long-term and short-term
local and foreign currency Counterparty Risk Ratings and their
long-term and short-term Counterparty Risk Assessments and
short-term local and foreign currency deposit ratings.

RATINGS RATIONALE

Its rating action reflects the increasingly challenging operating
environment in Armenia, stemming from the coronavirus outbreak,
which will result in additional hardship for a large array of
banks' borrowers. This, in turn, will lead to a weakening of
Armenian banks' solvency metrics, in particular asset quality and
profitability. Moody's expects increasing negative pressure on
standalone financial profiles of all three banks, while Ameriabank
and Ardshinbank deposit ratings benefit from high probability of
government support. At the same time, the rating agency expects
that the affected banks' funding and liquidity profiles will remain
broadly stable.

Since March 2020, Armenia's banking system has been challenged by
the coronavirus outbreak, which has led to unprecedented social
distancing measures taken by the government that will hurt the
domestic economy, in particular a large array of small and
medium-sized enterprises in the segments of passenger transport
industry, tourism, nonfood retail, cafes, restaurants, hotels and
others. Concurrently, individuals employed in the aforementioned
sectors will also face financial difficulties. Larger corporates in
general remain more resilient to the current economic slump;
however, they will also face a reduction in revenues resulting from
weakened consumer demand. These factors will ultimately weigh on
the banks' asset quality and profitability in 2020 and,
potentially, in 2021. In addition, large stocks of foreign-currency
loans in Armenian banking system, which made up 49% of total gross
loans at the end of 2019, pose risks in case the local currency
weakens significantly (although the local-currency has remained
broadly stable since the beginning of the year).

Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. Its rating action reflects the impact on Armenian banks
of the breadth and severity of the shock, and the pressure on
banks' credit profiles it has triggered.

  -- Ameriabank

The affirmation of Ameriabank's Ba3 long-term local currency
deposit rating with a stable outlook reflects Moody's expectation
that increasing pressure on the bank's standalone financial profile
amid worsening operating conditions will be offset by high
probability of government support which would benefit the bank's
local currency deposit rating.

As of January 1, 2020, Ameriabank's loans to SME segment (most
vulnerable to the coronavirus outbreak) accounted for 17.4% of the
bank's total loans. The bank's loans to individuals accounted for
25% of the total loan book,and were almost equally split between
mortgages and higher risk secured and unsecured consumer loans. In
addition, foreign-currency loans comprised 72.5% of gross loans as
of end-2019, which renders overall asset quality vulnerable to a
material currency depreciation. Partly offsetting this is the
bank's pre-provision income at 2.7% of average assets in 2019 which
provides a good buffer for absorbing expected credit losses without
a weakening in the bank's capital.

Ameriabank's Ba3 long-term local currency deposit rating
incorporate the bank's BCA of ba3 and Moody's assessment of a high
probability of government support for the bank, given its large
market shares of around 17% in system-wide assets and deposits as
of end 2019.

  -- Ardshinbank

The affirmation of Ardshinbank's Ba3 long-term local-currency
deposit and foreign-currency senior unsecured debt ratings with a
stable outlook reflects Moody's view that pressure on the bank's
standalone financial profile amid worsening operating conditions
will be offset by a high probability of government support.

Ardshinbank's exposure to companies from sectors most vulnerable to
the coronavirus outbreak, including trade, service, construction,
hospitality and transport amounted to 23% of gross loans at
year-end 2019. In addition, the bank's consumer loans accounted for
29% of gross loans, out of which 55% were higher risk unsecured
consumer lending. Foreign-currency loans comprised 52% of gross
loans as of end-2019 (comparable with the system average of 49%),
which renders asset quality vulnerable to a material local currency
depreciation.

The bank's sound pre-provision income at 3.3% of average total
assets in 2019, underpinned by a healthy net interest margin and
good cost efficiency, provides a good buffer for absorbing expected
credit losses without affecting its capital position.

Ardshinbank's Ba3 long-term local currency deposit and
foreign-currency senior unsecured debt ratings incorporate the
bank's BCA of ba3 and Moody's assessment of a high probability of
government support for the bank, given its large market shares of
around 12% in system-wide assets and deposits as of end 2019.

  -- Armeconombank

The affirmation of Armeconombank's B1 long-term deposit ratings and
the change of the rating outlook to negative from stable reflect
increased downside risks for the bank's standalone financial
profile amid deteriorated operating environment.

Armeconombank's exposure to sectors most vulnerable to the
coronavirus outbreak including SME and unsecured consumer lending
accounted for 27% and 19%, respectively, of its total gross loans
as of January 1, 2020. Furthermore, foreign-currency loans
comprised 46% of gross loans as of end 2019, which renders asset
quality vulnerable to a material local currency depreciation.

In Moody's view, the bank's more modest pre-provision income at
around 2% of average total assets in 2019 means that increased
provisioning charges may not be fully absorbed through the income
statement, raising the risk of losses and capital erosion.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

Upgrades of the three affected banks' ratings are unlikely in the
next 12 to 18 months given the current unfavourable operating
conditions. However, the outlook on the Armeconombank's ratings
could return to stable if the economic disruption is short-lived
and the impact on the bank's credit profile will be less severe
than Moody's currently anticipates. At the same time, the affected
banks' deposit and debt ratings could be downgraded if their
financial fundamentals, notably asset quality, capitalisation and
profitability were to deteriorate materially.

LIST OF AFFECTED RATINGS

Issuer: Ameriabank CJSC

Affirmations:

Adjusted Baseline Credit Assessment, Affirmed ba3

Baseline Credit Assessment, Affirmed ba3

Short-term Counterparty Risk Assessment, Affirmed NP(cr)

Long-term Counterparty Risk Assessment, Affirmed Ba2(cr)

Short-term Counterparty Risk Rating, Affirmed NP

Long-term Counterparty Risk Rating, Affirmed Ba2

Short-term Bank Deposits, Affirmed NP

Long-term Bank Deposits (Foreign Currency), Affirmed B1, Outlook
Remains Stable

Long-term Bank Deposits (Local Currency), Affirmed Ba3, Outlook
Remains Stable

Outlook Actions:

Outlook, Remains Stable

Issuer: Ardshinbank CJSC

Affirmations:

Adjusted Baseline Credit Assessment, Affirmed ba3

Baseline Credit Assessment, Affirmed ba3

Short-term Counterparty Risk Assessment, Affirmed NP(cr)

Log-term Counterparty Risk Assessment, Affirmed Ba2(cr)

Short-term Counterparty Risk Rating, Affirmed NP

Long-term Counterparty Risk Rating, Affirmed Ba2

Short-term Bank Deposits, Affirmed NP

Long-term Bank Deposits (Local Currency) Affirmed Ba3, Outlook
Remains Stable

Long-term Bank Deposits (Foreign Currency), Affirmed B1, Outlook
Remains Stable

Senior Unsecured, Affirmed Ba3, Outlook Remains Stable

Outlook Actions:

Outlook, Remains Stable

Issuer: Armeconombank (Armenian Economy Devt Bank)

Affirmations:

Adjusted Baseline Credit Assessment, Affirmed b1

Baseline Credit Assessment, Affirmed b1

Short-term Counterparty Risk Assessment, Affirmed NP(cr)

Log-term Counterparty Risk Assessment, Affirmed Ba3(cr)

Short-term Counterparty Risk Rating, Affirmed NP

Long-term Counterparty Risk Rating, Affirmed Ba3

Short-term Bank Deposits, Affirmed NP

Long-term Bank Deposits, Affirmed B1, Outlook Changed To Negative
From Stable

Outlook Actions:

Outlook, Changed To Negative From Stable



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B E L A R U S
=============

BELARUSIAN NATIONAL: Fitch Affirms IFS Rating at B, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed Belarusian National Reinsurance
Organisation's Insurer Financial Strength Rating at 'B'. The
Outlook is Stable.

KEY RATING DRIVERS

The rating action is based on Fitch's current assessment of the
impact of the coronavirus pandemic, including its economic impact,
under a set of rating assumptions described below. These
assumptions were used by Fitch to develop pro-forma financial
metrics for Belarus Re that are compared with both rating
guidelines defined in its criteria, and relative to previously
established Rating Sensitivities for Belarus Re.

Fitch's pro-forma analysis indicates the resilience of Belarus Re's
capitalisation, as measured by an unchanged Fitch Prism
Factor-Based Model score compared with its actual 'Very Strong'
score, based on end-2019 IFRS-based balance sheet. This should help
the reinsurer absorb the Fitch-modelled investment losses and a
moderate recession-driven decline in its underwriting
profitability.

In addition to the pro-forma modelling, Fitch also notes that the
pandemic and the related economic recession may substantially
weaken the quality of the portfolio of domestic credit risks
insured by Belarus Re. Those risks are highly concentrated per
debtor and aggregated net retentions per single debtor are fairly
significant relative to Belarus Re's capital. This risk is
partially mitigated by many of the debtors being fully owned by the
state.

Belarus Re's rating and Outlook are aligned with Belarus's
Long-Term Local-Currency Issuer Default Rating. The rating reflects
Belarus Re's 100% state ownership, and exclusive position in the
local reinsurance sector underpinned by legislation, healthy
capitalisation and sustainable earnings generation.

Assumptions for Coronavirus Impact (Rating Case):

Fitch used the following key assumptions, which are designed to
identify areas of vulnerability, in support of the pro-forma rating
analysis discussed above:

  -- Decline in key stock market indices by 35% relative to 1
January 2020.

  -- Increase in two-year cumulative high-yield bond default rate
to 13%, applied to current non-investment grade assets, as well as
12% of 'BBB' assets.

  -- For the non-life and reinsurance sectors, a negative impact on
the industry-level accident year loss ratio from COVID-19-related
claims at 3.5pp, partially offset by a favourable impact from the
motor lines averaging 1.5pp.

RATING SENSITIVITIES

The rating remains sensitive to a material change in Fitch's
rating-case assumptions with respect to the coronavirus pandemic.
Periodic updates to its assumptions are possible given the rapid
pace of changes in government actions in response to the pandemic,
and the pace with which new information is made available on the
medical aspects of the outbreak. An indication of how the rating
would be expected to be impacted under a set of stress-case
assumptions is included at the end of this section to help frame
sensitivities to a severe downside scenario. Factors that could,
individually or collectively, lead to negative rating
action/downgrade: -A material adverse change in Fitch's rating
assumptions with respect to the coronavirus impact. - A one-notch
downgrade of Belarus's Local-Currency Long-Term IDR is likely to
lead to an equivalent change in Belarus Re's IFS Rating. Factors
that could, individually or collectively, lead to positive rating
action/upgrade: -A positive rating action is prefaced by Fitch's
ability to reliably forecast the impact of the coronavirus pandemic
on the financial profiles of both the Belarusian insurance sector
and Belarus Re. - A one-notch upgrade of Belarus's Local-Currency
Long-Term IDR is likely to lead to an equivalent change in Belarus
Re's IFS Rating. Stress Case Sensitivity Analysis -Fitch's stress
case assumes a 60% stock market decline, two-year cumulative
high-yield bond default rate of 22%, an adverse non-life
industry-level loss ratio impact of 7pp for COVID-19 claims that is
partially offset by a favourable 2pp impact for motor, and a
notch-lower sovereign rating. - The implied-rating impact under the
stress case would be an affirmation of Belarus Re's rating.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Financial Institutions
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

ESG CONSIDERATIONS

The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).

BELARUSIAN REPUBLICAN: Fitch Affirms B IFS Rating, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Belarusian Republican Unitary Insurance
Company's Insurer Financial Strength Rating at 'B'. The Outlook is
Stable.

KEY RATING DRIVERS

The rating action is based on Fitch's current assessment of the
impact of the coronavirus pandemic, including its economic impact.
These assumptions were used by Fitch to develop pro-forma financial
metrics for Belgosstrakh that are compared with both rating
guidelines defined in its criteria, and relative to previously
established Rating Sensitivities for Belgosstrakh.

Fitch's pro-forma analysis indicates a meaningful weakening of
Belgosstrakh's Fitch Prism Factor-Based Model (FBM) score compared
with the actual end-2018 IFRS-based balance sheet, and
Belgosstrakh's limited ability to absorb Fitch-modelled investment
losses under its rating-case assumptions.

In addition to the pro-forma modelling, Fitch also notes that the
pandemic and the related economic recession may substantially
weaken the quality of the portfolio of domestic credit risks
insured by Belgosstrakh. Those risks are highly concentrated per
debtor and aggregated net retentions per single debtor are fairly
significant relative to Belgosstrakh's capital. This is partially
mitigated by many of the debtors being fully owned by the state.

Belgosstrakh's rating and Outlook are aligned with Belarus's
Long-Term Local-Currency Issuer Default Rating. The rating reflects
Belgosstrakh's 100% state ownership, strong market position in the
local insurance sector, the presence of guarantees for insurance
liabilities under compulsory lines and the insurer's leading market
position in a number of segments in Belarus.

Assumptions for Coronavirus Impact (Rating Case):

Fitch used the following key assumptions, which are designed to
identify areas of vulnerability, in support of the pro-forma rating
analysis discussed above:

  -- Decline in key stock market indices by 35% relative to January
1, 2020.

  -- Increase in two-year cumulative high-yield bond default rate
to 13%, applied to current non-investment grade assets, as well as
12% of 'BBB' assets.

  -- For the non-life and reinsurance sectors, a negative impact on
the industry-level accident year loss ratio from COVID-19-related
claims at 3.5pp, partially offset by a favourable impact from the
motor lines averaging 1.5pp.

RATING SENSITIVITIES

The rating remains sensitive to a material change in Fitch's
rating-case assumptions with respect to the coronavirus pandemic.
Periodic updates to its assumptions are possible given the rapid
pace of changes in government actions in response to the pandemic,
and the pace with which new information is made available on the
medical aspects of the outbreak.

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

  - A material adverse change in Fitch's rating assumptions with
respect to the coronavirus impact.

  - A one-notch downgrade of Belarus's Local-Currency Long-Term IDR
is likely to lead to an equivalent change in Belgosstrakh's IFS
Rating.

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

  - A positive rating action is prefaced by Fitch's ability to
reliably forecast the impact of the coronavirus pandemic on the
financial profiles of both the Belarusian insurance sector and
Belgosstrakh.

  - A one-notch upgrade of Belarus's Local-Currency Long-Term IDR
is likely to lead to an equivalent change in Belgosstrakh's IFS
Rating.

Stress Case Sensitivity Analysis

  - Fitch's stress case assumes a 60% stock market decline,
two-year cumulative high-yield bond default rate of 22%, an adverse
non-life industry-level loss ratio impact of 7pp for COVID-19
claims that is partially offset by a favourable 2pp impact for
motor, and a notch-lower sovereign rating.

  - The implied-rating impact under the stress case would be an
affirmation of Belgosstrakh's rating.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Financial Institutions
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

ESG CONSIDERATIONS

The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).



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D E N M A R K
=============

SGLT HOLDING: Fitch Affirms 'B-' LT IDR, Alters Outlook to Neg.
---------------------------------------------------------------
Fitch Ratings has revised SGLT Holding I LP's Outlook to Negative
from Stable and affirmed the freight forwarder's Long-Term Issuer
Default Rating at 'B-'. Fitch also affirmed SGL TransGroup
International A/S's, a subsidiary of SGLT, EUR223 million senior
secured notes at 'B-'/'RR4'.

The Negative Outlook reflects its view on the impact of the
COVID-19 pandemic and economic crisis on SGLT's business and
financial performance. With lower expected revenues, earnings and
cash flows, Fitch sees an increase in leverage for 2020, to well
above its negative sensitivity for the rating. Fitch expects
limited growth from M&A this year, as well as execution risk
related to recent acquisitions.

The affirmation of the ratings reflects SGLT's asset-light business
model that enables the group to adapt swiftly to economic swings.
Fitch sees leverage falling back to levels that are commensurate
with a 'B-' rating within the next two years. Fitch views SGLT's
liquidity position over the next three years as manageable based on
end-December 2019 cash balance and available committed credit
facilities.

KEY RATING DRIVERS

Crisis Hit Most Significant in 2020: While Fitch expects SGLT's
performance in 1Q20 to be in line with its previous expectations,
it now expects operations will be affected by the coronavirus
outbreak, most significantly during 2Q20-4Q20. Accordingly, Fitch
assumes a 30% yoy contraction in revenues from April until December
2020. Fitch expects a recovery of operations in 2021 but not to
pre-pandemic levels until 2022.

Asset-light Business Beneficial: SGLT's business model is
asset-light and capex needs are limited, which protect profit
margins and cash flows even with large declines in sales volumes.
The cost structure is flexible with a high share of variable costs
(mainly purchases of freight capacity). Accordingly, Fitch expects
EBITDA to remain positive throughout 2020, albeit 40% below 2018's
and at lower margins than previous years.

Small Scale of Operations: SGLT's positioning as a small company in
the overall price-competitive freight-forwarding market is a rating
constraint. Operating across all modes of transport, SGLT is
specialized in forwarding complex and tailor-made transportation
projects in chosen sectors, including food ingredients and
additives, pharmaceuticals, fashion and retail, and specialty
automotive. SGLT's niche focus reduces direct competition with
larger peers, but the group remains exposed to the highly
competitive nature of the freight-forwarding industry, in its
view.

External Growth to Slow: M&A forms an integral part of SGLT's
growth plan, which Fitch expects to become more challenging
throughout 2020 and beyond and execution risk will increase while
opportunities exist. Earnings and cash flows from M&A will
therefore also remain at a lower level after 2021 under its revised
forecasts. Based on the AUD12.7 million agreed purchase price for
an acquisition carried out in January 2020, Fitch cautiously
assumes a valuation of 6x EBITDA, compared with 4.7x by SGLT,
resulting in lower EBITDA from the acquired company to reflect the
weakened business environment.

Challenging but Manageable Liquidity: Fitch expects negative free
cash flow generation in 2020 based on a forecast drop in earnings
as well as working capital cash outflows despite lower turnover.
Fitch expects SGLT's year-end 2019 unrestricted cash position of
USD33 million could be fully consumed over 2020. Its liquidity is
supported by a USD25 million credit facility (committed until 2022)
and Fitch expects SGLT will generate FCF, from 2021 onwards. SGLT's
liquidity position under its assumptions is challenging but
manageable over the medium-term.

Treatment of Leases: Following the change of Fitch's approach to
leases after the application of IFRS 16, it treats depreciation and
interest on right-of-use assets and liabilities as an operating
cost, and do not include lease-related liabilities in its leverage
metrics calculation. This approach reflects its view that lease
assets and liabilities are non-material and lease/buy is not a core
financial decision for SGLT. This is also underlined by the low
IFRS 16-accounted debt of USD37 million as at end-2019.
Accordingly, it replaces the current funds from operations adjusted
gross leverage with FFO gross leverage for SGLT's sensitivities,
but given the limited impact of the change in treatment of leases,
it keeps the current leverage sensitivities unchanged.

DERIVATION SUMMARY

Fitch sees SGLT's credit metrics as being in line with 'B-' rated
peers'. The credit profile is supported by the diversification of
the group's end-customer portfolio by industry, which helps
mitigate the impact from the pandemic and economic crisis. Fitch
considers SGLT's earnings as less volatile than that of sole
carriers, such as shipping companies, but small size of the company
constrains its debt capacity.

KEY ASSUMPTIONS

  - Revenues in 2002 to drop around 20% yoy before recovering from
2021 to reach USD1,125 million in 2023

  - EBITDA margin to contract to 2.3% in 2020 before recovering
from 2021 to reach 3.8% in 2023

  - Future earnings from the concluded M&A in January 2020
calculated based on an assumed 6x multiple

  - Capex is at EUR 5 million p.a. over 2020-2023

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

Upgrade: The Outlook is Negative and it does not anticipate an
upgrade, however, the following would be seen as supporting an
upgrade in the long-term:

  - Successful implementation of growth strategy, resulting in FFO
gross leverage consistently below 6.5x

  - FFO interest coverage above 2.0x

  - Positive FCF generation

  - EBITDA margin above 3.5%

Outlook Revision: Fitch would consider revising the Outlook to
Stable if the company performs better- than-indicated in the
negative sensitivities below.

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

  - FFO gross leverage consistently above 8.5x

  - FFO interest coverage below 1.0x

  - Negative FCF through the economic cycle

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: At end-2019, SGLT had available USD33 million
of unrestricted cash. This compares with short-term debt of USD13.2
million of outstanding committed and uncommitted working capital
facilities, which are subject to an annual clean-down provision.
Out of the committed USD25 million working capital lines, USD7.8
million was drawn, and out of uncommitted credit facilities of
USD27 million USD5.4 million was utilised. Long-term debt consists
of EUR223 million (USD243 million equivalent as end-2019) bonds due
in 2024.

SUMMARY OF FINANCIAL ADJUSTMENTS

No adjustments for factoring were made due to SGLT's low exposure
to it and limited details available

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

ESG CONSIDERATIONS

The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).



=============
E S T O N I A
=============

BALTIKA AS: Restructuring Advisor Draws Up Reorganization Plan
--------------------------------------------------------------
On March 27, 2020, AS Baltika announced to the public that it
presented reorganization application to Harju Country Court and
court issued decree on March 26th, 2020 approving and initiating
the reorganization.

In light of this, Baltika on April 30 disclosed that restructuring
advisor has, in collaboration with Baltika's Management, compiled
reorganization plan, which aims to overcome temporary payment
difficulties and liquidity problems, that are caused by global
COVID-19 crises and inability to meet obligations from exiting the
production activities.

According to the reorganization plan, major restructuring measures
are finishing the successfully started strategic turnaround with
its goal of cutting fixed costs, applying applicable COVID-19
measures, and engaging additional financing and restructuring
creditor's claims.  Baltika plans to fulfill the reorganization
plan within three years from its approval.

The measures used in the reorganization plan are compliant with
legal and court practices.  They are realistic and reasonable and
will burden creditors only in the extent that is necessary for
reorganization's success.  Reorganization is an alternative to
bankruptcy and Baltika's successful restructuring will enable
Baltika itself, as well as its subsidiaries, to continue business
activities and to preserve numerous jobs in Estonia, Latvia and
Lithuania.

Approval of the reorganization plan assured creditor's claims
fulfillment in the best possible way, which is why reorganization
advisor and Baltika's Management are asking for approval of the
reorganization plan.  For the approval of the reorganization plan,
creditors will cast their votes. After creditors voting, court will
make the final decision on the reorganization plan's approval.

The Baltika Group is an Estonian fashion brandhouse and retailer
that operates Monton, Mosaic, Baltman, Bastion and Ivo Nikkolo
retail concepts.




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

MOLOGEN AG: Opts to Revoke Admission to Prime Standard
------------------------------------------------------
Due to its insolvency, Mologen AG on April 23 disclosed that it
decided to apply for revocation of admission to the sub-segment of
the regulated market with additional obligations (Prime Standard)
with the Frankfurter Wertpapierboerse.  The revocation will not
affect the admission to the regulated market (General Standard) in
other respects.

MOLOGEN AG -- http://www.mologen.com-- is a German
biopharmaceutical Company and a pioneer in the field of
immunotherapy on account of its unique active agents and
technologies.  Alongside a focus on immuno-oncology, MOLOGEN
develops immunotherapies for the treatment of HIV and infectious
diseases.





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

EUROMAX VI: Fitch Affirms Then Withdraws Csf Rating on Class C Debt
-------------------------------------------------------------------
Fitch Ratings has affirmed Euromax VI ABS Limited and withdrawn the
ratings as follows:

Euromax VI ABS Limited      

  - Class B XS0294720171; LT CCCsf; Affirmed

  - Class B XS0294720171; LT WDsf; Withdrawn

  - Class C XS0294720338; LT Csf; Affirmed

  - Class C XS0294720338; LT WDsf; Withdrawn

  - Class D XS0294720841; LT Csf; Affirmed

  - Class D XS0294720841; LT WDsf; Withdrawn

  - Class E XS0294721146; LT Csf; Affirmed

  - Class E XS0294721146; LT WDsf; Withdrawn

TRANSACTION SUMMARY

Euromax VI is a securitisation of mainly European structured
finance securities that closed in 2007.

The ratings were withdrawn with the following reason: no longer
considered by Fitch to be relevant to the agency's coverage.

KEY RATING DRIVERS

Ratings Being Withdrawn: Fitch has withdrawn the ratings as it no
longer considers them relevant to the agency's coverage, due to the
highly distressed nature of the ratings.

Marginally Increased Credit Enhancement: Since Fitch's last
surveillance review a year ago, the class A notes have paid off,
and the class B notes have become the most senior class of notes.
During this period, the class B notes paid down by EUR6.8 million
and credit enhancement for the class increased from 2.8% to 6.9%.

The class C, D and E notes have more negative credit enhancement
than at the last surveillance review and for these tranches,
default appears inevitable.

Slightly Worse Performing Portfolio Credit Quality: The credit
quality of the performing portfolio has deteriorated from 'BB+' in
the last review to 'BB'/'BB-' now. This is due to some assets being
downgraded and others leaving the portfolio due to paydowns.

Structure and Cash Flow Analysis: All the OC tests are failing. The
transaction benefits from excess spread after paying senior
expenses and class B notes' interest. The excess spread has been
used to pay down the class B notes to cure the class A/B OC test.
The class C, D and E notes continue to defer interest.

Highly Correlated Portfolio: The performing portfolio is 100%
concentrated in RMBS. Obligor concentration continues to increase
and there are only nine performing issuers in the transaction, down
from 13 at the previous review.

Low Recovery Expectation: Most of the assets within the portfolio
are subordinated tranches. Consequently, its recovery expectation
for the portfolio is near 0%.

RATING SENSITIVITIES

Not Applicable

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Structured Finance
transactions have a best-case rating upgrade scenario (defined as
the 99th percentile of rating transitions, measured in a positive
direction) of seven notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of seven notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings
are based on historical performance.

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

The majority of the underlying assets have ratings or credit
opinions from Fitch and/or other Nationally Recognised Statistical
Rating Organisations and/or European Securities and Markets
Authority-registered rating agencies. Fitch has relied on the
practices of the relevant groups within Fitch and/or other rating
agencies to assess the asset portfolio information.

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

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS

A description of the transaction's representations, warranties and
enforcement mechanisms that are disclosed in the offering document
and which relate to the underlying asset pool was not prepared for
this transaction. Offering documents for EMEA CLO transactions do
not typically include RW&Es that are available to investors and
that relate to the asset pool underlying the security. Therefore,
Fitch credit reports for EMEA CLO transactions will not typically
include descriptions of RW&Es.

STRANDHILL RMBS: S&P Assigns Prelim BB (sf) Rating to F-Dfrd Notes
------------------------------------------------------------------
S&P Global Ratings has assigned preliminary credit ratings to
Strandhill RMBS DAC's class A to F-Dfrd notes. At closing, the
issuer will also issue unrated class Z and R notes.

Strandhill RMBS is a static RMBS transaction that securitizes a
portfolio of EUR363 million loans secured by a combination of
residential assets, commercial assets, and land, along with about
EUR5.6 million of unsecured loans.

The loans were originated by Agricultural Credit Corporation Loan
Management (ACCLM), originally an Irish state-owned lender to the
agricultural sector, before being acquired by Cooperatieve Rabobank
U.A. in 2002.

Various data limitations were identified within the portfolio. In
particular, limited historical performance data was available in
consideration of the seasoning of the assets, and no original
valuations were provided. In addition, valuation reports for recent
valuation data provided were not available for the audit process.
S&P has considered each of these aspects in our asset analysis, and
believe its assumptions adequately mitigate the absence of this
information.

The transaction features a liquidity and a general reserve fund to
provide liquidity in the transaction. Principal can also be used to
pay senior fees and interest on the most senior class outstanding.

At closing, the issuer used the issuance proceeds to purchase the
beneficial interest in the mortgage loans from the seller. The
issuer grants security over all of its assets in favor of the
security trustee.

There are no rating constraints in the transaction under S&P's
counterparty, operational risk, or structured finance sovereign
risk criteria. S&P considers the issuer to be bankruptcy remote.

COVID-19: S&P said, "Our credit and cash flow analysis and related
assumptions consider the ability of the transaction to withstand
the potential repercussions of the coronavirus outbreak, namely,
higher defaults, longer recovery timing, borrower concentration
risk, and additional liquidity stresses. Considering these factors,
we believe that the available credit enhancement is commensurate
with the preliminary ratings assigned."

  Strandhill RMBS DAC

  Class    Prelim. rating    Prelim. amount (EUR)
  A        AAA (sf)          TBD
  B-Dfrd   AA (sf)           TBD
  C-Dfrd   A+ (sf)           TBD
  D-Dfrd   A- (sf)           TBD
  E-Dfrd   BBB (sf)          TBD
  F-Dfrd   BB (sf)           TBD
  Z        NR                TBD
  R        NR

  NR--Not rated.
  TBD--To be determined




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

PATRIMONIO UNO: Fitch Cuts 4 Note Classes to BBsf, On Watch Neg.
----------------------------------------------------------------
Fitch Ratings has downgraded all classes of Patrimonio Uno CMBS and
placed the class C to F notes on Rating Watch Negative due to
coronavirus-related factors.

Fitch recently downgraded Italy by one notch to 'BBB-'/Stable from
'BBB'. The largest tenant in the portfolio is a public sector
agency (Agenzia del Demanio, ADD) whose creditworthiness is linked
to the sovereign, and so the downgrade acts as a constraint on the
CMBS ratings. The class B notes' rating has been downgraded by one
notch to 'BBB-sf'/Stable from 'BBBsf', because this class (uniquely
in its analysis) should be repaid in full by legal maturity
(December 2021) solely out of contracted income payable by ADD,
whose lease expires in December 2023.

Redeeming the class C to F notes will depend on selling property,
which Fitch expects to be materially more challenging given the
social and market disruption caused by the effects of the
coronavirus and the related containment measures. While Fitch
identifies considerable borrower equity in the property portfolio
(the LTV currently stands at 15.6%), lack of property market
liquidity drives the more severe downgrades of these notes to
'BBsf'/RWN from 'BBBsf', as well as the RWN, which reflects the
risk of further downgrades as the deadline approaches.

Patrimonio Uno CMBS S.r.l.  

  - Class B IT0004070048; LT BBB-sf; Downgrade

  - Class C IT0004070055; LT BBsf; Downgrade

  - Class D IT0004070063; LT BBsf; Downgrade

  - Class E IT0004070071; LT BBsf; Downgrade

  - Class F IT0004078173; LT BBsf; Downgrade

TRANSACTION SUMMARY

Patrimonio Uno is a CMBS transaction secured by a single loan
backed by 28 predominantly office properties throughout Italy, with
a significant concentration in Milan and Rome. ADD, a public entity
fully guaranteed by the Republic of Italy, accounts for more than
87% of rent, rising to 95% when combined with income from other
governmental tenants.

The borrower has had to apply for successive loan extensions, given
only modest success in selling its properties over time. The loan
has finally been extended to December 3, 2020, which is also when
the borrower, an Italian closed ended fund, expires, leaving one
year until legal maturity of the notes. As part of these
renegotiations, a portion (initially 50%) of erstwhile equity
distributions (of excess rent) has instead been applied towards
loan repayment. Since the June 2019 interest payment date, this has
increased to 100%, accelerating the rate of repayment of the loan.
However, there are considerable borrower expenses that are paid in
priority to debt service, notably a contribution to an escrowed
capex account. This limits the cash sweep that it can project
towards loan amortisation. Moreover, the notes are repaying pro
rata, and will only become fully sequential during 2021.

KEY RATING DRIVERS

Coronavirus Causing Economic Shock: Fitch has made assumptions
about the spread of the coronavirus and the economic impact of the
related containment measures. As a base-case scenario, Fitch
assumes a global recession in 2020 driven by sharp economic
contractions in major economies with a rapid increase in
unemployment, with eurozone GDP remaining below-pre virus (4Q19)
levels through the whole of 2021.

Assumptions Updated for Coronavirus Impact: The pandemic
suppression measures in force across Europe are severely curtailing
public life, with immediate consequences for a range of commercial
property. Fitch expects these conditions to present the borrower (a
closed-ended fund required maturing in December 2020) with severe
difficulties selling its properties at acceptable prices, which
raises the risk of loan default. The servicer would then have no
more than one year to tackle the formal liquidation processes that
Fitch expects would arise in respect of the fund in 2021. This lack
of time reduces flexibility, which despite considerable borrower
equity in the properties, is reflected in the affected ratings
being downgraded to below investment grade and placed on RWN while
it monitors for sales progress in the limited time available.

Credit Linkage to the Sovereign: Given it can amortise from
contractual cashflow only, the class B notes' rating is linked to
that of the main tenant, ADD, itself linked to the recently
downgraded Italian sovereign.

RATING SENSITIVITIES

The ratings are capped by the Italian sovereign rating.

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

An upgrade of Italy would likely result in an upgrade of the class
B notes. Sufficient property sales could result the ratings of the
class C to F notes being upgraded to the level of the class B
notes.

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

A downgrade of Italy would result in a downgrade of the class B
notes, and potentially the other notes. A failure to execute any
property sales would result in the class C to F notes defaulting at
legal final maturity.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Structured Finance
transactions have a best-case rating upgrade scenario (defined as
the 99th percentile of rating transitions, measured in a positive
direction) of seven notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of seven notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings
are based on historical performance.

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 pool
and the transaction. 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 monitoring.

Prior to the transaction closing, Fitch reviewed the results of a
third-party assessment conducted on the asset portfolio information
and concluded that there were no findings that affected the rating
analysis.

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.

SISAL GROUP: S&P Cuts EUR275MM Notes Rating to B on COVID-19 Impact
-------------------------------------------------------------------
S&P Global Ratings lowered its ratings on Sisal Group and its
EUR275 million senior secured notes to 'B' from 'B+', and our
rating on the EUR125 million super senior revolving credit facility
(RCF) to 'B+' from 'BB-'. The recovery ratings on the RCF and notes
remain unchanged at '2' (rounded estimate 85%) and '3' (rounded
estimate 55%), respectively.

S&P expects the COVID-19 pandemic to cause a material deterioration
of Sisal's operating performance in 2020.

The spread of COVID-19 has increased markedly in Europe, with Italy
being the first country to implement a lockdown on March 9. Sisal's
retail gaming operations are now temporarily closed and sports
events are suspended globally. Its payment services activity
(SisalPay) is however only partly affected, since tobacconists and
newsagents remain open during the lockdown. S&P said, "These
represents about 65% of SisalPay's network, although we expect
footfall will decline to some extent due to the confinement
measures. We assume all Sisal's gaming sites and 35% of its payment
sites will be closed until June, and operations will resume
progressively through the rest of 2020. In this scenario, we
believe revenues could decline by about 30% in 2020 compared with
2019 and leverage could increase toward 6x in 2020 compared with
our previous expectation of 3.6x. However, we expect Sisal's
operating performance to fully recover by the end of 2020 and
credit metrics to improve to pre-pandemic levels in 2021."

The pandemic will further pressure the group's free operating cash
flow (FOCF) this year.   In September 2019, Sisal was officially
granted the concession to operate Italy's NTNG license for another
nine years. Sisal paid the first installment of EUR111 million in
fourth-quarter 2019 and is due to pay the second equal installment
in June 2020. Sisal had accumulated sufficient liquidity to fund
the offered downpayment, but we think this obligation places
significant pressure on cash flows, currently under pressure from
the impact of COVID-19. S&P said, "We previously highlighted
Sisal's limited rating headroom for any operational setbacks. Sisal
is targeting cost-cutting initiatives and reduction of capital
expenditure (capex) to preserve cash flows during the lockdown.
However, we expect the impact of COVID-19 will strain free cash
flow in 2020. We expect Sisal will report negative FOCF of about
EUR140 million in 2020, after factoring in EUR111 million of NTNG
license payments in June, compared with negative EUR100 million in
our previous base case."

Sisal Gaming's liquidity sources are adequate for now, but risks
remain.   Sisal's restricted group--Sisal Gaming--had around EUR245
million of cash and RCF drawings as of March 31, 2020. S&P said,
"We estimate the current cash burn at about EUR10 million-EUR16
million per month (after mitigating measures) and the group is
currently scheduled to pay the EUR111 million second installment
for the NTNG license in June. We believe liquidity is currently
adequate but think it could come under pressure if conditions erode
Sisal's cash flow more than we currently assume in our base case.
We estimate that Sisal would need a minimum of EUR50 million in
operational liquidity. We understand the group is currently
discussing with regulators the possibility of deferring cash
payment of the second instalment of the NTNG license payment, which
could ease liquidity pressure." The outcome of these negotiations
is a key liquidity factor.

Sisal Pay's liquidity remains adequate.  Sisal Pay has a sound
liquidity position, with around EUR100 million of cash and RCF
drawings as of March 31, 2020. S&P estimates this will sufficiently
cover the next 12 months of liquidity needs. Sisal Group and Sisal
Pay's debt facilities have no financial maintenance covenant and
there are no near-term debt maturities.

Sisal Group's 2020 credit metrics under pressure, prior to forecast
rebound in 2021  S&P said, "We assess Sisal on a consolidated
basis, whereby we consolidate gaming in addition to Sisal's
proportionate ownership share in Sisal Gaming (70%). Consequently,
we expect Sisal to generate revenues of EUR550 million-EUR600
million in 2020 and EUR750 million-EUR800 million in 2021, assuming
a three-month shutdown and gradual recovery in 2020." Such revenues
would translate into adjusted EBITDA of EUR120 million-EUR140
million in 2020 and between EUR190 million and EUR210 million in
2021, resulting in S&P's forecast metrics of:

-- Adjusted leverage at 5.5x-6.2x in 2020 (assuming the RCF is
used to pay for the NTNG license) and 3.4x-3.8x in 2021.

-- Adjusted FOCF to debt of between negative 15% and negative 13%
in 2020 and positive 8%-6% in 2021.

-- Reported FOCF of negative EUR130 million-EUR150 million in 2020
and positive EUR30 million-EUR50 million in 2021.

S&P Global Ratings acknowledges a high degree of uncertainty about
the rate of spread and peak of the coronavirus outbreak.  S&P said,
"Some government authorities estimate the pandemic will peak about
midyear, and we are using this assumption in assessing the economic
and credit implications. We believe the measures adopted to contain
COVID-19 have pushed the global economy into recession. As the
situation evolves, we will update our assumptions and estimates
accordingly."

Environmental, social and governance (ESG) credit factors for this
credit rating change:  

-- Health and safety

The negative outlook reflects uncertainty about the duration of the
COVID-19 pandemic and its potential impact on Sisal's capital
structure, liquidity, financial performance, and position in 2020
and beyond.

S&P could lower the rating if the group's credit metrics weaken
beyond its base case, including one or a combination of the
following factors:

-- Sisal's operating earnings and margins weaken materially, for
example due to a prolonged COVID-19 related shutdown or adverse
regulatory developments that led us to revise down S&P's assessment
of the group's business and earnings stability.

-- Metrics decline significant versus our base case, with adjusted
FOCF to debt staying below 5% or reported FOCF declining
constantly.

-- Liquidity deteriorated materially.

-- S&P saw heightened risk of a specific default event, such as a
distressed exchange or restructuring, a debt purchase below par, or
a covenant breach.

-- Sisal's stake in Sisal Pay reduces, which could lead us to
reassess the group's scope and credit metrics.

-- Financial policy becomes more aggressive, as shown through
sustained weaker credit metrics, debt-funded acquisitions, or
shareholder returns.

S&P said, "We could affirm the rating once we have more certainty
regarding the duration and severity of COVID-19's impact on Sisal's
operating performance, liquidity, and cash flows. An affirmation
would hinge on a full recovery being likely by year-end 2020 and
evidence that the company's efforts to reduce costs, limit the
impact on cash flows, and maintain adequate liquidity are likely to
succeed.

"We could upgrade Sisal if its credit metrics looked set to rebound
to previously anticipated levels, such that S&P Global
Ratings-adjusted debt to EBITDA returns below 4.0x and FOCF
recovered and turned meaningfully positive on a sustainable basis,
after payment of the license renewal fee, while Sisal maintains
adequate liquidity."

Additionally, an upgrade would require clarity on the group's
long-term financial policy and capital structure.




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

BANK CENTERCREDIT: Moody's Affirms B2 Ratings, Outlook Now Stable
-----------------------------------------------------------------
Moody's Investors Service changed the issuer outlook on Bank
CenterCredit and the outlook on its long-term local and
foreign-currency deposit ratings to stable from positive, affirming
the bank's B2 long-term deposit ratings, its caa1 Baseline Credit
Assessment and Adjusted BCA, B1(cr) long-term Counterparty Risk
Assessment (CR Assessment) and B1 long-term local and
foreign-currency Counterparty Risk Ratings. The bank's Caa3 (hyb)
junior subordinated foreign-currency debt rating, its Not Prime
short-term deposit ratings and CRRs and its Not Prime(cr)
short-term CR Assessment were affirmed.

Concurrently, Moody's downgraded BCC's long-term national scale
bank deposit rating to Ba2.kz from Ba1.kz and its long-term
national scale CRR to Baa3.kz from Baa2.kz.

The affirmation of BCC's global scale ratings reflects the balance
between the positive credit implications of the asset quality
review results and subsequent capital replenishment plan, on the
one hand, and the negative impact on the bank from the outbreak of
coronavirus in Kazakhstan, the oil price shock and the tenge
depreciation, on the other hand. Moody's expects these negative
factors to offset the recent and previously anticipated positive
developments in the bank's credit profile in the next 12 to 18
months, which drives the change of outlook on the global scale
ratings to stable from positive and the downgrade of the national
scale ratings.

RATINGS RATIONALE

On February 28, the National Bank of Kazakhstan announced the
results of its asset quality review of the country's 14 largest
banks and the sufficiency of their loan loss reserves. These
results were credit positive for BCC: although the bank was
identified among the four banks whose regulatory Tier 1 capital
ratios as of April 1, 2019 would have been below the minimum
regulatory requirement, if they had created adequate loan loss
reserves as of that date, the AQR results also revealed that BCC
substantially strengthened its loss absorption buffers in the
second half of 2019 and will strengthen them even more. According
to the capital replenishment plan agreed between the bank'
shareholders and the regulator, the shareholders will make an
additional capital injection by June 1, 2020, and the bank is
obliged to create additional loan loss reserves for a total of
KZT26.4 billion by year-end 2024. In addition, over the next five
years, the bank will remain subject to restrictions (for instance,
on bonus payments), prohibited from paying dividends and required
to optimize its administrative expenses.

Furthermore, BCCs' creditors will benefit from the government's
commitment to cover any remaining shortfall at the end of the
five-year period. Not only the guarantee will have an immediate
positive effect on the bank's capital adequacy ratios, but the
NBK's action signals that Kazakhstan's authorities remain committed
to assist BCC's owners in their recapitalization efforts.

However, the credit positive impact of the AQR and capital
replenishment plan on BCC are offset by the outbreak of coronavirus
and oil price shock, which Moody's expects to have a significant
negative impact on Kazakhstan's economy and banking system. BCC's
exposure to these risks is above the peer average, given its
relatively thin capital cushion, which will come under pressure
from the foreign currency assets revaluation effect and credit
losses Moody's forecasts for the year 2020, as well as its
substantial exposure to vulnerable segments. A substantial 25% of
the bank's gross loans are denominated in foreign currencies, 23%
of gross loans are allocated to small & medium enterprises (SMEs)
and loans to individuals for business development, while unsecured
consumer loans account for 15% of gross loans. Loans to small
businesses and unsecured consumer loans will be among those most
affected by the lockdown resulting from the coronavirus outbreak
and the broader economic slowdown, while the government-imposed
grace period will result in retail lenders losing or receiving late
a substantial portion of interest income.

Moody's estimates that the bank's moderate recurring pre-provision
profitability, at 3.0% of average assets in 2019, will not be
sufficient to absorb the expected credit losses in 2020, although
one-off gains booked in Q1 2020 will bring BCC's net income to
approximately zero this year.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONSIDERATIONS

The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines are creating a severe and extensive credit
shock across many sectors, regions and markets. The banks have been
one of the sectors affected by this shock given an expected
deterioration in asset quality, profitability and capital
adequacy.

Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. Its rating action reflects the impact on BCC of the
breadth and severity of the shock, and the pressure on the bank's
credit profile it has triggered.

For BCC, Moody's does not apply any corporate behavior adjustments
as part of its rating action, and does not have any specific
concerns about their corporate governance, which is, nevertheless,
a key credit consideration, as for most banks.

HIGH GOVERNMENT SUPPORT

BCC's affirmed B2 long-term deposit ratings continue to benefit
from: (1) two notches of uplift due to a high probability of
government support, which reflects the bank's significant market
share (5.5% in total banking assets and 5.9% in retail customer
deposits as of March 1, 2020); and (2) the government's willingness
to support the bank, as demonstrated by the National Bank of
Kazakhstan including BCC in its capital recovery programmes in both
2020 and 2017.

STABLE OUTLOOK

The stable outlook on BCC's global scale ratings balances the
positive credit implications of the AQR results and subsequent
capital replenishment plan against the negative impact on the bank
from the outbreak of coronavirus in Kazakhstan, the oil price shock
and tenge depreciation.

NATIONAL SCALE RATINGS

The downgrade of BCC's long-term national scale bank deposit rating
to Ba2.kz from Ba1.kz and its long-term national scale CRR to
Baa3.kz from Baa2.kz is driven by Moody's less positive
expectations with respect to the bank's credit profile over the
next 12-18 months.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

The ratings of BCC are unlikely to be upgraded in 2020, given the
adverse operating environment. However, beyond this year, the
ratings could be upgraded, if in the next 12-18 months the bank
improves its asset quality, strengthens its capital buffer,
restores profitable performance and maintains the stability of its
deposit base.

The ratings of BCC could be downgraded, if in the next 12-18 months
the bank's capital adequacy deteriorates beyond Moody's current
expectations, as a result of negative pressures on asset quality
and profitability. A further significant deposit outflow resulting
in a liquidity shortage could also result in a downgrade to BCC's
ratings.

LIST OF AFFECTED RATINGS

Issuer: Bank CenterCredit

Affirmations:

Long-term Counterparty Risk Ratings, affirmed B1

Short-term Counterparty Risk Ratings, affirmed NP

Long-term Bank Deposits, affirmed B2, outlook changed to Stable
from Positive

Short-term Bank Deposits, affirmed NP

Long-term Counterparty Risk Assessment, affirmed B1(cr)

Short-term Counterparty Risk Assessment, affirmed NP(cr)

Baseline Credit Assessment, affirmed caa1

Adjusted Baseline Credit Assessment, affirmed caa1

Junior Subordinate Regular Bond/Debenture, affirmed Caa3(hyb)

Downgrades:

NSR Long-term Counterparty Risk Rating, downgraded to Baa3.kz from
Baa2.kz

NSR Long-term Bank Deposits, downgraded to Ba2.kz from Ba1.kz

Outlook Action:

Outlook changed to Stable from Positive

EURASIAN BANK: Moody's Affirms B2 Deposit Ratings, Outlook Now Neg.
-------------------------------------------------------------------
Moody's Investors Service has affirmed Eurasian Bank's b3 Baseline
Credit Assessment, Adjusted BCA, the B2 long-term local and foreign
currency deposit ratings and changed the outlooks on the bank's
long-term local and foreign currency deposit ratings to negative
from stable. Moody's has also affirmed the bank's B1/Not Prime
long-term and short-term local and foreign currency Counterparty
Risk Ratings and the bank's B1(cr)/ Not Prime(cr) long-term and
short-term Counterparty Risk Assessments. Concurrently, Moody's has
also downgraded the bank's national scale long-term deposit rating
to Ba2.kz from Ba1.kz and its national scale long-term Counterparty
Risk Rating to Baa3.kz from Baa2.kz.

RATINGS RATIONALE

Its rating action reflects the sharply deteriorated operating
conditions in Kazakhstan, stemming from a period of sharply
decreased export revenues and the coronavirus outbreak, which
directly and indirectly instigates financial hardship for a large
array of borrowers in the Kazakhstan economy. The domestic economy,
in particular small and medium-sized enterprises and individuals
employed in the COVID-affected sectors will face severe financial
difficulties. Larger corporates in general remain more resilient to
the current turmoil, however, they will also face a reduction in
revenues resulting from weakened consumer and investment demand and
will also have to optimize their costs. These factors will
ultimately weigh on Eurasian Bank, given the lender's high business
reliance on the retail segment and performance of consumer loans
(accounted for more than 60% the bank's loan portfolio at year-end
2019).

The National Bank of Kazakhstan's Asset Quality Review of largest
local banks revealed Eurasian bank's weak capital level as of
year-end 2019 that has been recently strengthened to eliminate
regulatory risks. While the recent KZT4 billion injection from the
bank's shareholders and guarantees received from the state fund
will help to offset capital pressures, the bank's capital level
still remains modest (the regulatory Tier 1 ratio was 9.7% as of
March 1, 2020), especially compared to the banking system's
average, where Tier 1 ratio was at 19.8% as of March 1, 2020. Owing
to the sharp turnaround in the operating conditions, Moody's now
expects much weaker asset performance by the bank and reduced
business volumes, translating into weaker pre-provision earnings
and high credit costs in the next 12 to 18 months. These challenges
and remaining high uncertainties in the consumer lending segment
will exert downward pressure on the bank's solvency metrics, that
is now reflected in the negative outlook.

Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. Its rating action reflects the impact on Eurasian bank
of the breadth and severity of the shock, and the pressure on its
credit profile it has triggered.

FACTORS THAT WOULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

Eurasian Bank's long-term ratings' upgrade is unlikely in the next
12 to 18 months given the negative outlook and the unfavorable
operating landscape. However, Moody's might stabilize the outlook
if the bank's resilience to counter the challenges proves to be
stronger, than currently anticipated by the rating agency, or in
case the government to implement measures, helping the banking
sector and Eurasian bank in particular to offset the mounting
challenges.

The bank's deposit ratings could be downgraded if the current
economic turmoil will start eroding the bank's capital, i.e.
increasing solvency risk and the risk that additional capital
injections could be required to offset the mounting challenges.

LIST OF AFFECTED RATINGS

Issuer: Eurasian Bank

Affirmations:

Adjusted Baseline Credit Assessment, Affirmed b3

Baseline Credit Assessment, Affirmed b3

Long-term Counterparty Risk Assessment, Affirmed B1(cr)

Short-term Counterparty Risk Assessment, Affirmed NP(cr)

Long-term Counterparty Risk Rating, Affirmed B1

Short-term Counterparty Risk Rating, Affirmed NP

Short-term Bank Deposits, Affirmed NP

Long-term Bank Deposits, Affirmed B2, Outlook Changed To Negative
From Stable

Downgrades:

NSR Long-term Counterparty Risk Rating, Downgraded to Baa3.kz from
Baa2.kz

NSR Long-term Bank Deposits, Downgraded to Ba2.kz from Ba1.kz

Outlook Actions:

Outlook, Changed To Negative From Stable

FREEDOM FINANCE: Fitch Affirms Then Withdraws 'B' IFS Rating
------------------------------------------------------------
Fitch Ratings has affirmed Kazakhstan-based Joint-Stock Company
Life Insurance Company Freedom Finance Life's Insurer Financial
Strength Rating at 'B' and the National IFS Rating at 'BB(kaz)',
with Stable Outlooks. Fitch has simultaneously withdrawn the
ratings.

The ratings were withdrawn for commercial reasons.

KEY RATING DRIVERS

The rating actions are based on Fitch's current assessment of the
impact of the coronavirus pandemic, including its economic impact.
These assumptions were used by Fitch to develop pro-forma financial
metrics for Freedom Life that are compared with both rating
guidelines defined in its criteria, and relative to previously
established rating sensitivities for Freedom Life.

The affirmation of the ratings reflects the limited impact of the
pandemic on Freedom Life's key operating performance metrics and
investment and liquidity ratios under Fitch's pro-forma analysis.
Its pro-forma analysis factors in heightened pressure on the
insurer's risk-adjusted capital position, as measured by Fitch's
Prism factor-based capital model. However, this risk is offset by
the insurer's strong buffer over required regulatory capital.

KEY ASSUMPTIONS

Assumptions for Coronavirus Impact (Rating Case):

Fitch used the following key assumptions, which are designed to
identify areas of vulnerability, in support of the pro-forma
ratings analysis discussed above:

  -- Decline in key stock market indices by 35% relative to January
1, 2020.

  -- Increase in two-year cumulative high-yield bond default rate
to 13%, applied to current non-investment grade assets, as well as
12% of 'BBB' assets.

  -- For the non-life and reinsurance sectors, a negative impact on
the industry-level accident year loss ratio from COVID-19-related
claims at 3.5pp, partially offset by a favourable impact from the
auto line averaging 1.5pp.

RATING SENSITIVITIES

Not applicable.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Financial Institutions
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

ESG CONSIDERATIONS

The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).

STANDARD LIFE: Fitch Affirms IFS Rating at 'B', Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed Kazakhstan-based Joint-Stock Company
Life Insurance Company Standard Life's Insurer Financial Strength
Rating at 'B' and the National IFS Rating at 'BBB-(kaz)'. The
Outlooks are Stable.

KEY RATING DRIVERS

The rating actions are based on Fitch's current assessment of the
impact of the coronavirus pandemic, including its economic impact.
These assumptions were used by Fitch to develop pro-forma financial
metrics for Standard Life that are compared with both rating
guidelines defined in its criteria, and relative to previously
established rating sensitivities for Standard Life.

The affirmation of the ratings reflects Standard Life's expected
resilience, in Fitch's view, to the economic implications of the
coronavirus pandemic. The insurer's financial performance metrics
and investment and liquidity ratios under Fitch's pro-forma
analysis remain commensurate with ratings.

Fitch's pro-forma analysis highlights the downside risk to Standard
Life's risk-adjusted capital position, as measured by Fitch's Prism
factor-based capital model, but this is offset by the insurer's
regulatory solvency, which Fitch expects to be resilient.

KEY ASSUMPTIONS

Assumptions for Coronavirus Impact (Rating Case):

Fitch used the following key assumptions, which are designed to
identify areas of vulnerability, in support of the pro-forma
ratings analysis discussed above:

  -- Decline in key stock market indices by 35% relative to January
1, 2020.

  -- Increase in two-year cumulative high-yield bond default rate
to 13%, applied to current non-investment grade assets, as well as
12% of 'BBB' assets.

  -- For the non-life and reinsurance sectors, a negative impact on
the industry-level accident year loss ratio from COVID-19-related
claims at 3.5pp, partially offset by a favourable impact from the
auto line averaging 1.5pp.

RATING SENSITIVITIES

The ratings remain sensitive to a material change in Fitch's
rating-case assumptions with respect to the coronavirus pandemic.
Periodic updates to its assumptions are possible given the rapid
pace of changes in government actions in response to the pandemic,
and the pace with which new information is made available on the
medical aspects of the outbreak.

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

  -- A material adverse change in Fitch's rating assumptions with
respect to the coronavirus impact.

  -- Significant capital depletion, a breach of prudential
regulatory metrics, or other form of significant regulatory
non-compliance.

  -- A significant weakening in financial performance, as reflected
in a baseline net loss on a sustained basis.

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

  -- A positive rating action is prefaced by Fitch's ability to
reliably forecast the impact of the coronavirus pandemic on the
financial profiles of both the Kazakh life insurance sector and
Standard Life.

  -- An improvement in business diversification and a reduced
mismatch between the company's assets and liabilities provided that
Standard Life adheres to sound underwriting practices and maintains
the credit quality of its investment portfolio.

Stress Case Sensitivity Analysis

  -- Fitch's stress case assumes a 60% stock market decline,
two-year cumulative high-yield bond default rate of 22%, high-yield
bond spreads widening by 600bp, more prolonged declines in
government rates, heightened pressure on capital-market access, a
coronavirus infection rate of 15% and mortality rate of 0.75%, an
adverse non-life industry-level loss ratio impact of 7pp for
COVID-19 claims and a notch-lower sovereign rating.

  -- The implied-rating impact under the stress case would be a
downgrade of the IFS Rating of no more than one notch.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Financial Institutions
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

ESG CONSIDERATIONS

The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).



===========
L A T V I A
===========

LATVIJAS KRAJBANKA: High Court Tosses Appeal re KPMG Baltic's Award
-------------------------------------------------------------------
The Baltic Times reports that the Department of Civil Cases of the
Supreme Court has turned down an appeal against the Riga Regional
Court's ruling ordering the former management board of the now
defunct Latvijas Krajbanka to pay EUR15,366,981 million to the
bank's insolvency administrator KPMG Baltics, the Supreme Court's
representative Rasma Zvejniece told LETA.

Therefore, the Riga Regional Court's ruling has come into effect,
The Baltic Times notes.

The appeal had been filed by the former Latvijas Krajbanka board
members and their representatives, The Baltic Times discloses.

According to The Baltic Times, examining the arguments set forth in
the appeal, the Supreme Court senators agreed that there were no
obvious grounds to consider that the Riga Regional Court's judgment
was incorrect and that the case was essential for ensuring uniform
legal practice.  As a result, there are no grounds for the Supreme
Court to accept the appeal, The Baltic Times states.

In June 2017, the Riga City Vidzeme District Court awarded KPMG
Baltics EUR15 million compensations from the defendants who had
reportedly extended loans to companies registered in the Seychelles
and Cyprus without sufficient economic grounds, The Baltic Times
recounts.

The ruling of the court of first instance was appealed to Riga
Regional Court which upheld the district court's ruling, The Baltic
Times relays.

On November 21, 2011, the Latvian financial watchdog, the Finance
and Capital Market Commission (FCMC) ordered Latvijas Krajbanka to
suspend all financial services, The Baltic Times discloses.  The
decision was made due to a shortage of assets discovered at the
bank, and a criminal investigation was started, according to The
Baltic Times.

Riga Regional Court declared Latvijas Krajbanka insolvent on
December 23, 2011, The Baltic Times relates.  On May 8, 2012, at
the request of KPMG Baltics auditing firm, which had been appointed
the insolvency administrator of Latvijas Krajbanka, the court
ordered a bankruptcy procedure for the bank.  Latvijas Krajbanka's
banking license was annulled on May 10, 2012, The Baltic Times
discloses.




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

ADO PROPERTIES: Moody's Gives Ba1 CFR & Alters Outlook to Neg.
--------------------------------------------------------------
Moody's Investors Service has assigned a new corporate family
rating of Ba1 to ADO Properties S.A. Concurrently, the senior
unsecured rating of ADO was downgraded to Ba1 from Baa3. The
short-term Issuer rating was downgraded to Not Prime. The outlook
was changed to negative from rating under review.

Moody's has withdrawn ADO's issuer rating of Baa3 following its
downgrade to Ba1, as per the rating agency's practice for
corporates with non-investment-grade ratings.

"The downgrade of ADO's ratings reflect the weaker credit profile
following the acquisition of ADLER Real Estate AG, which resulted
in higher leverage" says Oliver Schmitt, a Vice President and
Senior Credit Officer at Moody's. "The further downside risk to
leverage, and execution risks on the realisation of synergies,
expected sales, and the intended capital raise, as well as an
unclear situation around the intended purchase of Consus Real
Estate AG, contribute to the negative outlook of the ratings"

RATINGS RATIONALE

ADO's rating is supported by its size and scale, and increasing
diversification in Germany with a gross asset value around EUR8.6
billion and above 75,000 rental units. Berlin remains a geographic
focus with 50% of assets by value. The company benefits from the
stable German residential property market, which continues to
attract rental demand that is less dependent on GDP, very good,
especially secured funding conditions and investor appetite.

ADO's rating downgrade follows the acquisition of ADLER Real Estate
AG,which caused leverage and leverage appetite to increase
substantially. ADO's new financial policy is a net loan to value
below 50%, up from 40% net LTV before the transaction. Moody's
estimates Moody's -adjusted debt to gross assets above 57% as of
December 2019. The company intends to achieve its leverage target
through a combination of property sales and a rights issue. Moody's
expects debt/total assets to remain above 50% pro-forma for
property sales and an announced rights issue. Net debt/EBITDA will
be in the range of 21-26x, highly sensitive to timing and quantity
of sales and the rights issue, as well as EBITDA margin
development. Net debt/EBITDA and coverage, which will be in the
range of 1.9-2.5x are substantially weaker compared to residential
real estate companies rated investment grade.

The company expects operating synergies of up to EUR20 million from
the effective reduction in operating expenses, corporate overhead
cost and platform savings. Moody's believes some operational
synergies are achievable. At the same time, even considering some
synergies, the company continues to achieve a very low EBITDA
margin compared to peers, even after adjusting for
transaction-based cost in 2019. The company also expected financial
synergies through reduced cost of debt. It does assume a moderate
rise in average interest cost on the back of the repayment of the
bridge facility, and uncertainties around pricing especially for
unsecured debt at the time of refinancing.

ADO has sufficient liquidity for the next 12 months, but the
company's debt maturity profile is short-dated compared to peers.
The company has limited refinancing needs in 2020, but Moody's
estimates refinancing needs above EUR1bn in 2021 as well as some
CAPEX needs stemming from the portfolio and Adler's development
pipeline. The company had above EUR600m of cash at hand at year end
2019 as well as an EUR200 million undrawn revolving credit
facility. The company will likely receive cash proceeds from
already notarised sales, and an announced equity raise in Q3, but
Moody's expects those to repay the bridge facility maturing in 2022
(including extension options). Moody's does not expect the bridge
facility to be ultimately available for further drawings outside
the potential refinancings on Consus level in case the transaction
was to ultimately proceed. The company reported a weighted average
debt maturity profile below 3.8 years as of December 2019, which is
the lowest among the German residential peers, albeit some are
funding largely on a secured basis. Moody's expects the company to
substantially term out debt and refinance maturing debt, especially
the bond maturing in December 2021, well ahead of the maturity
date.

The acquisition of Adler and several incidents on both ADO and
Adler side raised concerns around governance and the willingness to
take creditor-friendly decisions in the past. Moody's thinks the
company's partially new management, and its new board structure
that is in progress of forming, needs to prove the ability to
execute its business plan and show prudent financial and business
discipline especially in period of weakening access to debt and
equity. Moody's recognizes that excluding the acquisition of
Consus, the new shareholder structure of ADO is widely diversified,
and the new board structure aims to facilitate a majority of
directors deemed to be independent.

Moody's understands that an exercise of the option to acquire
Consus is unlikely at this point. Hence, it did not consider the
credit implications of a full acquisition in ratings at this point.
While purchasing a 22% stake in Consus in December 2019, ADO has
also secured an option to acquire a further 51% of the shares in
Consus on an all share basis. It considers a full acquisition as
negative as it will likely further increase leverage, create
additional financing needs, and substantially increase development
exposure for a number of years, based on its understanding of
Consus committed while mainly pre-sold pipeline.

RATIONALE FOR THE OUTLOOK

The negative outlook reflects uncertainty around the prospects to
execute on the company's business plan, including the success of
the integration of the two entities, timing and success of the
announced EUR500m equity raise, as well as a lack of clarity around
the future strategy on the acquisition of Consus. The outlook also
addresses risks around reducing debt to assets below 55%, and a
material reduction in net debt to EBITDA below 20x.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

WHAT COULD CHANGE RATINGS UP

  - The company builds a track record of executing on the business
integration, including its new governance structure, property
sales, equity raise, and an improved profitability

  - The company terms out its debt maturity profile and addresses
refinancing needs well in advance

  - The company reduces its Moody's-adjusted gross debt to total
asset ratio to well below 55% and Moody's-adjusted net debt/EBITDA
towards the mid-teens on a sustained basis

  - Fixed charge cover increases above 2.5x

WHAT COULD CHANGE RATINGS DOWN

  - Failure to reduce debt/assets to 55%, but the tolerance for
leverage at the current rating would be lower if net debt/EBITDA
remains above 20x

  - Fixed charge cover sustains below 2x

  - The company fails to address refinancing needs well in advance
of its maturities

  - A full acquisition of Consus may also lead to a downgrade,
given the substantial increased in development risk, refinancing
needs, and anticipated weakening of financial metrics

  - A failure to maintain ADO's majority class of debt unsecured
may lead to a downgrade of the senior unsecured debt instruments

LIST OF AFFECTED RATINGS

Issuer: ADO Properties S.A.

Assignments:

LT Corporate Family Rating, Assigned Ba1

Probability of Default Rating, Assigned Ba1-PD

Downgrades:

Senior Unsecured Regular Bond/Debenture, Downgraded to Ba1 from
Baa3

ST Issuer Rating, Dongraded to NP from P-3

Withdrawals:

LT Issuer Rating, previously rated Baa3

Outlook Actions:

Outlook, Changed To Negative From Rating Under Review

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in September 2018.

AI LADDER: Moody's Affirms B3 CFR, Alters Outlook to Negative
-------------------------------------------------------------
Moody's Investors Service affirmed the B3 corporate family rating
and the B3-PD probability of default rating of AI Ladder
(Luxembourg) Subco S.a r.l (Laird). Concurrently, Moody's affirmed
the B2 ratings on the company's first lien senior secured term loan
B and its $133 million revolving credit facility. The outlook on
all ratings has been changed to negative from stable.

RATINGS RATIONALE

The rapid and widening spread of the coronavirus outbreak,
deteriorating global economic outlook, falling oil prices, and
asset price declines are creating a severe and extensive credit
shock across many sectors, regions and markets. The combined credit
effects of these developments are unprecedented. The manufacturing
industry has been one of the sectors most significantly affected by
the shock given its sensitivity to consumer demand and sentiment.
More specifically, the weaknesses in Laird's credit profile,
including its exposure to vehicles, telecom, and other technology
driven end markets have left it vulnerable to shifts in market
sentiment in these unprecedented operating conditions and Laird
remains vulnerable to the outbreak continuing to spread. Moody's
regards the coronavirus outbreak as a social risk under its ESG
framework, given the substantial implications for public health and
safety. Its action reflects the impact on Laird of the breadth and
severity of the shock, and the broad deterioration in credit
quality it has triggered.

The rating action was triggered by Moody's expectation that Laird
-- given its weak positioning in the B3 category throughout FY 2019
-- might be challenged to improve credit metrics back to the
requirements for the B3 rating category in the next 12 -- 18
months. A severe contraction of operating performance without
sufficient offsetting measures resulting in a negative free cash
flow generation could result in a negative rating action over the
next months.

The B3 CFR is primarily supported by (1) Laird's strong market
positions, with technical capabilities that are highly ranked by
its customers; (2) a well-diversified geographic footprint; (3) a
track record of organic growth; and (4) medium-to-high entry
barriers protecting the business.

At the same time, the CFR is constrained by (1) a high adjusted
leverage of 7.8x debt/EBITDA for 2019; (2) potential volatility in
EBITA margin, as seen during 2014-18, although acquisitions and
disposals have changed the group's profitability profile; (3)
historically high R&D spending to maintain technology leadership;
and (4) negative free cash flow generation in 2018 and 2019 and the
expectation of further cash outflow in 2020 because of the
deteriorating economic environment.

The company is controlled by funds managed by Advent International,
which, as is often the case in private equity sponsored deals, have
a higher tolerance for leverage and governance is comparatively
less transparent. In that respect Moody's has experienced that the
provisioning of information has not always been timely.

LIQUIDITY

Moody's views Laird's liquidity to be adequate. The company's
reported cash balance as of December 2019 was $58 million. In its
liquidity risk assessment, Moody's expects liquidity sources for
the next 12 months, including cash flow from operations and $103
million availability under the $133 million revolving credit
facility, to exceed $150 million and cover liquidity needs
including capital spending of around $20 million, potential working
capital needs because of seasonality, as well as $16 million of
working cash required to run the business, and contractual debt
amortizations of $7.5 million. However, given the projected limited
free cash flow generation ability in its base scenario (Moody´s
estimate), Laird will likely be reliant on external credit
facilities to serve seasonal swings in its operational liquidity
needs in some quarters.

STRUCTURAL CONSIDERATIONS

The B2 rating (LGD3) of the issuer´s $750 million ($400 million
outstanding) equivalent first-lien senior secured term loan
facility (Facility B) and to the $133 million equivalent revolving
credit facility is one notch above the CFR and reflects the debt
buffer provided by the subordinated $144 million equivalent
second-lien facility. The credit facilities benefit from a
guarantor package, including upstream guarantees from operating
subsidiaries that represent at least 80% of group EBITDA. The
instruments are secured by a security package that includes shares,
bank accounts, intercompany receivables, floating charges in the UK
and customary all-asset security in the US, with priority given to
the first-lien term loan facility against the second-lien
facility.

OUTLOOK

The negative outlook mirrors the challenge for Laird to sustainably
strengthen profitability and thus to manage leverage below 6.5x
debt / EBITDA. Over the next 3-6 months Moody's will closely
monitor the further development in particular with regard to order
intake and potential cancellations of orders, potential
restructuring needs, the ability to generate positive free cash
flows, liquidity position and the company's ability to reduce
leverage.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

Downgrade pressure could be exerted on the rating in the event of
continued weak operating performance leading to Moody's-adjusted
EBITA margin falling below 5%, debt/EBITDA exceeding 6.5x for an
extended period of time or negative free cash flow generation.
Likewise, a negative rating action would be considered in case the
liquidity position deteriorates.

Albeit currently unlikely an upgrade would require financial
leverage, as measured by Moody's-adjusted debt/EBITDA, sustainably
moving towards 5.5x, with EBITA margin in the high single-digits in
percentage terms on a sustained basis and Moody's-adjusted free
cash flow/debt improving sustainably to the mid-single digits in
percentage terms.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Manufacturing
Methodology published in March 2020.

PROFILE

AI Ladder (Luxembourg) Subco S.a r.l. operating under the trade
name Laird (Laird) is a global engineering technology company which
generated revenue of $661 million in 2019. Following the
acquisition by Advent International the organisation has been
re-structured into three businesses which are run autonomously by
their respective management boards: (1) performance materials,
which accounted for three-quarters of pro forma group revenue, has
the number one market position in customized components that
protect smart devices from electromagnetic interferences and heat;
(2) connectivity, which represented less than one-fifth of pro
forma revenue, provides wireless opportunities for customers to
connect electronics with security and confidence through antennas,
wireless modules and IoT (internet of things) platforms; and (3)
thermal systems, which represented about one-tenth of the business
in terms of revenue, with commercial applications in active thermal
management.

MALLINCKRODT INTERNATIONAL: Bank Debt Trades at 29% Discount
------------------------------------------------------------
Participations in a syndicated loan under which Mallinckrodt
International Finance SA is a borrower were trading in the
secondary market around 71 cents-on-the-dollar during the week
ended Fri., May 1, 2020, according to Bloomberg's Evaluated Pricing
service data.

The $1.9 billion facility is a term loan.  The loan is scheduled to
mature on September 24, 2024.   About $1.5 billion of the loan
remains outstanding.

The Company's country of domicile is Luxembourg.




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

SAMVARDHANA MOTHERSON: S&P Lowers ICR to 'BB' on Weaker Earnings
----------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit and issue
ratings on Samvardhana Motherson Automotive Systems Group B.V.
(SMRP) and its unsecured debt to 'BB' from 'BB+'.

S&P said, "We expect SMRP's earnings and cash flows will drop in
2020 due to the COVID-19 pandemic.   Because of the COVID-19
pandemic and resulting economic pressure, we now project that 2020
auto sales will decline by 20%-25% in the U.S., 15%-20% in Europe
and 8%-10% in China. We expect production rates to decline in a
similar pattern. SMRP derives about 80% of its sales from Europe
and the North American Free Trade Agreement countries. We therefore
believe that SMRP's earnings and cash flow will decline
significantly in fiscal 2021 despite the company's countermeasures
to reduce expenses. For instance, we forecast a drop in sales of
about 15% and an S&P Global Ratings-adjusted EBITDA margin of 4%-5%
(versus 6.0%-6.5% expected in fiscal 2020).

"Our rating on SMRP reflects our assessment of MSSL's
creditworthiness.   MSSL owns 51% of SMRP and Samvardhana Motherson
International Ltd. holds the remaining 49%. We classify SMRP as a
core entity of MSSL since we believe that SMRP is unlikely to be
sold, has a long-term commitment from MSSL, constitutes a material
proportion of the consolidated group (70% of sales and 60% of
EBITDA), and uses the brand name. The rating on SMRP is equal to
our 'bb' group credit profile, which is one notch higher than our
stand-alone credit profile assessment.

"We assume that MSSL's FFO to debt will not recover to above 30% by
fiscal 2021 due to effects from the COVID-19 pandemic.   This
compares with an already-weak level of about 28% expected for
fiscal 2020. In fiscal 2020, the group's credit metrics were
particularly affected by the weak business environment for the auto
sector and loss-making operations at greenfield plants in the U.S.
and Hungary. We estimate losses from the greenfield plants at
EUR100 million-EUR200 million in fiscal 2020. Nevertheless, we
expect the group to maintain FFO to debt of 20%-30% in the next 12
months, even assuming a weaker-than-expected recovery in global
auto production volumes in second-half 2020. Among the mitigating
factors, we assume lower losses from the group's greenfield
operations thanks to efficiency measures.

"We continue to assess SMRP's liquidity as adequate; assuming
continuing support from MSSL.  As of March 31, 2020, SMRP held cash
balances of EUR412 million and had access to EUR458 million under
its revolving credit facility (RCF) due June 2021. The company has
limited debt repayments before its $400 million senior secured
notes mature in Dec. 2021. The RCF documentation includes two
maintenance covenants requiring a net leverage ratio of 3.5x and an
interest coverage ratio of 3.0x. As of Dec. 31, 2019, the net
leverage ratio was 2.44x. We assume that SMRP's headroom under this
covenant will tighten over the coming quarters due to the weaker
earnings anticipated during the COVID-19 pandemic. Nevertheless, we
expect that MSSL would support SMRP's liquidity needs or cure any
breach in covenants through additional shareholder loans if
needed."

Environmental, social, and governance (ESG) factors relevant to the
rating action:

-- Health and safety

S&P said, "The stable outlook reflects our expectations that the
group will maintain FFO to debt of 20%-30% over the next 12 months,
even assuming slower-than-expected recovery in second-half 2020. We
expect capital spending and inorganic growth investments to remain
prudent over this period, such that FOCF to debt will be maintained
above 10%.

"We could lower our rating on the group if FFO to debt were to fall
below 20% sustainably.

"This could happen if the group's operating performance is
materially weaker than our expectations, or it undertakes
significant debt-funded capital spending or acquisitions. In a less
likely scenario, we could also lower our rating if the proposed
corporate reorganization leads to an increase in leverage above our
threshold.

"We could upgrade the group if it improves its financial position,
such that FFO to debt increases materially above 30% on a
sustainable basis, and it commits to a more conservative financial
policy. This scenario hinges on the absence of any significant
debt-funded acquisitions and sustained improvement in operating
performance."


SCHOELLER PACKAGING: Moody's Cuts CFR to B3, Outlook Negative
-------------------------------------------------------------
Moody's Investors Service has downgraded to B3 from B2 the
corporate family rating and to B3-PD from B2-PD the probability of
default rating of the Dutch Returnable Transit Packaging
manufacturer Schoeller Packaging B.V. Concurrently, Moody's has
downgraded the rating on its EUR250 million senior secured notes
due in 2024 issued by Schoeller to B3 from B2. The outlook on the
ratings is negative.

"We have downgraded Schoeller's ratings to reflect a weaker than
expected 2019 operating performance and the likely contraction in
the company's earnings in 2020 due to the coronavirus outbreak and
the resulting further deterioration in its credit metrics and
liquidity over the next 12 months with limited visibility over a
potential recovery, "says Donatella Maso, a Moody's Vice President
- Senior Analyst and lead analyst for Schoeller.

RATINGS RATIONALE

Its rating action reflects Moody's view that Schoeller will face
challenging operating conditions across Europe and the US, where
the company generates almost all of its revenues. Moody's forecasts
a deep recession in these regions in 2020 that will diminish demand
for Schoeller's products, particularly in more vulnerable
end-markets such as auto and industrial manufacturing, with an
effect on its earnings, cash flow generation and credit metrics.
The purchase of Schoeller's products is typically seen as a capital
investment, and is therefore subject to deferral by its customers
during periods of a severe downturn. Moreover, in Moody's view
there is low visibility on demand recovery which will ultimately
depend on the evolution of the macroeconomic conditions once the
lockdowns and social distancing measures are lifted.

However, Moody's recognizes that Schoeller is present in certain
end-markets such as food retail and pooling services, amongst
other, which could benefit from the current situation and, that
management is actively seeking ways to protect the company's
earnings and preserve cash by avoiding unnecessary costs and
delaying certain non-essential investments. Moreover, Moody's also
understands that YTD trading is above prior year.

Schoeller's operating performance in 2019 was weaker than budget
and Moody's expectations both at revenue and EBITDA level largely
due to a shortfall in new product sales. In addition, Schoeller's
debt increased significantly following the bond refinancing
occurred last October and the raise of additional bank debt. As a
result, the company's financial leverage, measured as debt to
EBITDA as adjusted by Moody's, rose to 6.1x in 2019 (including bank
overdrafts) compared to a maximum of 5.0x allowed by the previous
B2 rating. Moody's expects Schoeller's leverage will further
deteriorate in 2020 and will remain elevated also in 2021. Free
cash flow generation in 2019 continued to be negative, primarily
from higher investments in new products and ongoing lease
repayments. In addition, although Moody's expects free cash flow to
improve, due to lower interest expense and deferral of certain
expenses, this will remain negative in 2020-2021. Failure to return
free cash flow generation into positive territories might put
pressure on the sustainability of the company's capital structure
in the medium term.

The B3 rating is also constrained by (1) the relatively small size
of the company relatively to other rated packaging manufacturers;
(2) the highly competitive industry in the context of the
commoditised nature of the company's products resulting in pricing
pressure; (3) some concentration with its largest client; and (4)
the required investments in new products and customised moulds in
order to support future growth.

Conversely, the B3 rating is positively supported by (1)
Schoeller's leading market position in the Returnable Transit
Packaging (RTP) sector in Europe with an estimated 20% share; (2)
its innovation capabilities enabling the company to benefit from
the continuous positive trends in the sector; and (3) a degree of
geographic and end-market diversity.

ENVIRONMENTAL, SOCIAL & GOVERNANCE CONSIDERATIONS

Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. The weaknesses in Schoeller's credit profile, including
its exposure to cyclical end markets and multiple affected
countries have left it vulnerable to shifts in market sentiment in
these unprecedented operating conditions and the company remains
vulnerable to the outbreak continuing to spread. Its action
reflects the impact on Schoeller of the breadth and severity of the
shock, and the broad deterioration in credit quality it has
triggered.

In terms of corporate governance, Schoeller is controlled by the
private equity firm Brookfield Business Partners L.P., which in
common with other financial sponsors typically has tolerance for
relatively high leverage in the companies it controls. However,
more positively, Brookfield has demonstrated to support the
business by providing a EUR65 million facility which the company
has partly utilized to fund growth investments.

LIQUIDITY

Moody's views Schoeller's liquidity profile as currently adequate.
It is underpinned by (1) approximately EUR41 million cash on
balance sheet at the end of 2019; (2) EUR25 million availability
under its EUR30 million super senior revolving credit facility
(RCF) due 2024, albeit expected to be fully drawn by the end of Q1
2020; and (3) several factoring arrangements, which are to be
renewed in order to manage intra-year fluctuations in receivables.
The company also benefits from a EUR65 million committed stand-by
facility in the form a subordinated shareholders' loan provided by
Brookfield, currently drawn for EUR7.6 million and treated as
equity under Moody's hybrid methodology. These sources are deemed
sufficient to cover the company's near term needs because certain
costs and other non-essential investments could be deferred and
there is no debt amortization until 2024, when the RCF is due.
Prolonged negative free cash flow would, however, put pressure on
the company's liquidity.

The super senior RCF has a springing covenant (maximum net drawn
super senior leverage of 1.0x), which is tested when the RCF is
drawn by more than 40%. Moody's expects the company to continue to
comply with this covenant.

STRUCTURAL CONSIDERATIONS

Using Moody's Loss Given Default methodology, the B3-PDR is aligned
to the B3 CFR. This is based on a 50% recovery rate at family
level, as is typical for transactions including both bonds and bank
debt. The B3 rating on the notes reflects the fact that they
represent the majority of the debt in the capital structure and the
size of the RCF is not sufficiently large to allow any notching.
Both the notes and the super senior RCF share the same security and
guarantees but the notes rank junior to the RCF upon enforcement
under the provisions of the intercreditor agreement. Security
includes pledges over shares, bank accounts, receivables, and
certain UK assets. Material subsidiaries which guarantee the notes
represent c. 83% of the group EBITDA or c.81% total assets.

RATIONALE FOR NEGATIVE OUTLOOK

The negative outlook reflects the current uncertainty on
Schoeller's ability to improve its credit metrics and restore its
free cash flow generation during 2021. This is because of the low
visibility into the company's operating performance over the next
12-18 months while it may temporarilyexceed the 6.5x leverage
threshold for the B3 rating category in 2020.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

Given the negative outlook, an upgrade is unlikely in the near
term. The outlook could be changed to stable if the company's
performance shows signs of recovery, in line with improving trading
conditions. In the medium term, upward pressure on the ratings
could develop if Schoeller's credit metrics were to improve as a
result of a stronger-than-expected operational performance, leading
to Moody's adjusted debt/EBITDA trending towards 5.0x, and to
sustained positive free cash flow (as defined by Moody's).

Negative pressure on the ratings could arise if Schoeller's
operating performance deteriorates materially; Moody's adjusted
debt/EBITDA remains sustainably above 6.5x; free cash flow
continues to be significantly negative; or its liquidity further
weakens.

LIST OF AFFECTED RATINGS:

Downgrades:

Issuer: Schoeller Packaging BV

LT Corporate Family Rating, Downgraded to B3 from B2

Probability of Default Rating, Downgraded to B3-PD from B2-PD

Backed Senior secured Regular Bond/Debenture, Downgraded to B3 from
B2

Outlook Actions:

Issuer: Schoeller Packaging BV

Outlook, Remains Negative

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Packaging
Manufacturers: Metal, Glass, and Plastic Containers published in
May 2018.

COMPANY PROFILE

Headquartered in the Netherlands, Schoeller is a returnable transit
plastic packaging manufacturer operating primarily in Europe and
the US, employing approximately 2,000 people. In 2019, the company
generated revenue of EUR536 million and EBITDA of EUR64 million as
adjusted by Moody's.

The company is the result of the August 2013 legal integration
between the Schoeller Arca Systems Group and the Linpac Allibert
Group, the returnable transport packaging business of Linpac Group.
Since May 2018, Schoeller is 70% owned by the private equity
Brookfield Business Partners L.P. and 30% by the Schoeller
Industries B.V., a family-owned business with a broad focus on
packaging, transport and logistics systems.

SYNCREON GROUP: Bank Debt Trades at 25% Discount
------------------------------------------------
Participations in a syndicated loan under which Syncreon Group BV
is a borrower were trading in the secondary market around 75
cents-on-the-dollar during the week ended Fri., May 1, 2020,
according to Bloomberg's Evaluated Pricing service data.

The $125.5 million facility is a term loan.  The loan is scheduled
to mature on October 1, 2024.   About $125.2 million of the loan
remains outstanding.

The Company's country of domicile is Netherlands.




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

CAIXA PENEDES 1: Fitch Affirms Class C Notes at 'BBsf'
------------------------------------------------------
Fitch Ratings has affirmed three tranches of Sol-Lion, FTA RMBS
transaction and affirmed two tranches of Caixa Penedes 1, FTA
(Penedes). Additionally, Fitch has maintained Penedes' class A
notes on Rating Watch Negative.

SOL-LION, FTA  
    
  - Class A ES0317104000; LT AA+sf; Affirmed

  - Class B ES0317104018; LT AA-sf; Affirmed

  - Class C ES0317104026; LT A+sf; Affirmed

Caixa Penedes 1 TDA, FTA      

  - Class A ES0313252001; LT A+sf; Rating Watch Maintained

  - Class B ES0313252019; LT BBBsf; Affirmed

  - Class C ES0313252027; LT BBsf; Affirmed

TRANSACTION SUMMARY

The transactions comprise residential mortgages serviced by ING
Direct, which is the Spanish branch of ING Bank N.V (AA-/Negative)
for Sol-Lion, and Banco de Sabadell S.A. (BBB/Negative) for
Penedes.

KEY RATING DRIVERS

Penedes RWN Linked to Mandatory Leases in Catalonia

The maintained RWN on Penedes' class A notes reflects the possible
adverse effects of the Catalonian Decree Law 17/2019 that allows
some defaulted borrowers to remain in their homes as tenants for as
long as 14 years and paying a low monthly rent. Around 98% of
Penedes' current portfolio balance is exposed to the region of
Catalonia. Fitch expects to resolve the RWN within the next 10
months, with a likely rating impact that could range between an
affirmation to a multi-notch downgrade.

To address the regional concentration risk, Fitch applies higher
rating multiples within its credit analysis to the base foreclosure
frequency assumption to the portion of the portfolio that exceeds
2.5x the population within this region, in line with Fitch´s
European RMBS rating criteria.

Stable Credit Enhancement

For both transactions, Fitch expects structural CE to remain stable
or gradually increase over the short to medium term, considering
the prevailing pro-rata amortisation of the notes and the reserve
fund levels that are at or close to their respective floors. CE
ratios will increase faster once amortisation of the notes switches
back to fully sequential, when the outstanding portfolio balance
represents less than 10% (currently between 19% and 32% for Penedes
and Sol-Lion, respectively) of the initial balance or sooner if
performance triggers are breached.

Resilient to COVID-19 Stresses

Fitch views both transactions as resilient to the higher projected
losses linked to the coronavirus and containment measures under the
agency's baseline expectation, as CE ratios are able to mitigate
the additional risks. Moreover, liquidity protection is sufficient
to mitigate the effects of payment holidays if offered to
vulnerable borrowers. The sensitivity of the ratings to scenarios
more severe than currently expected is provided in Rating
Sensitivities below.

As of the latest reporting dates, the balance of loans in arrears
by more than three months (excluding defaults) remained below 1%
relative to current portfolio balances for both transactions, and
the balance of gross cumulative defaults stood at 3.5% (Penedes)
and 0.7% (Sol-Lion) relative to the initial portfolio balances.
Fitch's analysis of Sol-Lion included a performance adjustment
factor of 100% driven by the possible repurchase activity of the
originator on defaulted loans observed last year.

Penedes Partly Unhedged

Penedes is exposed to an open interest rate risk especially in a
rising interest rate scenario, because the notes pay a floating
coupon rate linked to three-month Euribor, but around 32% of the
underlying mortgages pay a fixed interest rate. The rest of the
portfolio pays a floating rate mainly linked to 12-month Euribor
and there is a hedging arrangement that mitigates basis risk. Fitch
views current and projected CE ratios on the notes sufficient to
withstand the cash flow stress associated with this unhedged
portion of the collateral, as reflected in the affirmations.

Sol-Lion Equity Release Loans

Around 29% of Sol-Lion's portfolio was granted for the purpose of
equity release. In line with Fitch´s European RMBS rating
criteria, a FF adjustment of 150% has been applied to these loans
because they are considered riskier than traditional home
acquisition loans.

ESG Considerations - Governance

Caixa Penedes has an Environmental, Social and Governance Relevance
Score of 4 for Transaction & Collateral Structure due to loan
modifications after transaction closing that introduced interest
rate risk, which has a negative impact on the credit profile, and
is relevant to the rating in combination with other factors.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

  - CE ratios increase as the transactions deleverage, able to
fully compensate the credit losses and cash flow stresses
commensurate with higher rating scenarios, all else being equal.

  - For Penedes, the introduction of an interest rate hedging
agreement that mitigates the open interest rate risk as liabilities
pay a floating coupon rate linked to three-month Euribor, but
around 32% of the underlying mortgages pay a fixed interest rate.

  - For Sol-Lion, a smaller relative share of equity release loans
within the portfolio balance as these carry a larger FF expectation
in Fitch's analysis.

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

  - Penedes' class A notes could be downgraded if a large number of
mandatory leases were extended by the SPV for the longest possible
period of 14 years permitted by law, as this would imply a weaker
cash flow position for the SPV with reduced cash collections and
larger expenses linked to property maintenance costs.

  - A longer-than-expected coronavirus crisis that deteriorates
macroeconomic fundamentals and the mortgage market in Spain beyond
Fitch's current base case. To approximate this scenario, Fitch
conducted a rating sensitivity by increasing default rates by 30%
and haircutting recovery expectations by 15%, which would imply a
downgrade of between one and two rating categories for most of the
notes.

  - Transaction liquidity positions weaken due to large take-ups on
mortgage payment moratoriums and new defaults as a consequence of
the coronavirus crisis.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Structured Finance
transactions have a best-case rating upgrade scenario (defined as
the 99th percentile of rating transitions, measured in a positive
direction) of seven notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of seven notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings
are based on historical performance.

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. For Sol-Lion, because loan-by-loan
portfolio data sourced from the European Data Warehouse did not
fully reconciled with the portfolio data as of the closing date
with respect to loan purpose, Fitch has assumed the initial share
of the portfolio linked to equity release loans of 29% to remain
applicable. For Penedes, 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.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

For Sol-Lion, because loan-by-loan portfolio data sourced from the
European Data Warehouse did not fully reconciled with the portfolio
data as of the closing date with respect to loan purpose, Fitch has
assumed the initial share of the portfolio linked to equity release
loans of 29% to remain applicable. For Penedes, there were no
findings that affected the rating analysis.

ESG CONSIDERATIONS

Caixa Penedes has an Environmental, Social and Governance Relevance
Score of 4 for Transaction & Collateral Structure due to loan
modifications after transaction closing that introduced interest
rate risk, which has a negative impact on the credit profile, and
is relevant to the rating in combination with other factors. Except
for the matters discussed, the highest level of ESG credit
relevance, if present, is a score of 3 - ESG issues are credit
neutral or have only a minimal credit impact on the entity(ies),
either due to their nature or the way in which they are being
managed by the entity(ies).

HAYA REAL ESTATE: S&P Alters Outlook to Neg. & Affirms 'B-' ICR
---------------------------------------------------------------
S&P Global Ratings revised its outlook on Spanish real estate debt
and asset servicer Haya Real Estate S.A.U. (Haya) to negative from
stable. S&P affirmed its 'B-' long-term issuer credit rating on
Haya, as well as its 'B-' issue rating on the senior secured notes
issued by Haya Finance 2017 S.A.

S&P said, "We expect the measures to contain the COVID-19 pandemic
and their impact on the Spanish economy and property market to
significantly weaken Haya Real Estate S.A.U.'s (Haya's) performance
over the next two years.  In March 2020, the Spanish government put
in place measures to contain the spread of COVID-19, which have
severely curtailed short-term economic activity in the country. As
a result, property transactions have largely ceased, impinging on
businesses such as real estate debt and asset servicer Haya. We
expect the measures to trigger a recession in Spain, which we think
will cause a significant decline in Haya's revenue and EBITDA in
2020, as lower levels of real estate activity result in lower
volume fees for the business. While we forecast a material uptick
in real estate activity in 2021, we do not expect the business to
regain the lost ground. This is partly due to our expectation of a
weaker property market, and partly to lower management fees as a
result of the group's new contract with SAREB and the natural
reduction in assets under management (AUM) as the portfolios it
services unwind. (The SAREB contract terms are more weighted toward
volume fees than before.)

"Given the ongoing nature of the pandemic, our forecasts
incorporate a considerable degree of uncertainty. However, we
consider a fall in S&P Global Ratings-adjusted EBITDA of over 40%
in 2020, followed by a rebound of around 30% in 2021, to be
possible. We would still expect the business to generate free
operating cash flow at these levels of EBITDA, but the cash balance
is likely to be materially lower than we previously expected
leading up to the maturity of the senior secured notes in November
2022. This could heighten refinancing risk."

That said, market dislocation could present servicers such as Haya
with opportunities to win further portfolios to service over the
medium term if the COVID-19 pandemic is followed by a prolonged
economic downturn in which a material number of real estate loans
become distressed.

S&P said, "We expect Haya to have limited headroom under its
financial covenant in 2020, heightening the risk of a breach if
lower real estate activity levels persist.  This is the result of
the weaker performance we anticipate. In the nearer term, the
decline we forecast in Haya's revenue and EBITDA is likely to
result in leverage exceeding the covenant level on its super senior
revolving credit facility (RCF) over the next 12-18 months."

Haya's RCF is subject to a springing net leverage covenant of
5.25x, tested when 40% of the facility is drawn. As of March 31,
2020, the group had drawn down the facility in full to bolster its
liquidity position in anticipation of a significant decline in
short-term real estate activity due to the social-distancing
measures imposed by the Spanish government. S&P expects the group
to have sufficient liquidity to prepay its RCF drawings back below
40%, thereby avoiding covenant tests, thanks to its material
balance-sheet cash, low capital intensity, and flexible cost base.
However, the group's repayment capacity could diminish if the low
levels of real estate activity persist, or if the rebound is weaker
than we expect, thereby heightening the risk of a covenant breach.

Although there are remedies available to Haya to prevent or address
a covenant breach, should one occur and be enforced, the group
would have insufficient liquidity to cover its short-term
requirements, and we would likely lower the ratings further. S&P's
outlook on the ratings is therefore negative to reflect the risk
that if the low levels of real estate activity persist beyond our
base case, the group's liquidity position could weaken.

Environmental, social, and governance (ESG) factors relevant to the
rating action:

-- Health and safety.

The negative outlook indicates that S&P sees heightened pressure on
the ratings as a result of deterioration in the macroeconomic
environment in Spain over the next 12 months.

S&P could lower the ratings if the social-distancing requirements
persist for longer than we expect, such that it anticipates
significantly lower transaction volumes and/or weaker property
prices over the next 12 months, and consequently:

-- S&P no longer expects the group to have sufficient liquidity to
prepay its RCF below the covenant test condition while leverage
remains above the covenant level; and

-- A weaker recovery in 2021 or a material deterioration in the
group's cash position lead us to consider heightened risk around
the refinancing of the group's senior secured notes due 2022.

S&P could revise the outlook to stable if it saw a strong recovery
in real estate activity in the short term, such that:

-- Leverage returned comfortably below the covenant level; and

-- S&P expected significant free operating cash generation.




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

DNIPRO CITY: Fitch Affirms 'B' LT IDR, Alters Outlook to Stable
---------------------------------------------------------------
Fitch Ratings has revised the Outlook on the Ukrainian City of
Dnipro's Long-Term Foreign- and Local-Currency Issuer Default
Ratings to Stable from Positive and affirmed the IDRs at 'B'.

The revision of Outlook follows the rating action on Ukraine as
Fitch continue to view Dniprо's ratings as being constrained by
that of the sovereign.

CRA3 DEVIATION

Under EU credit rating agency regulation, the publication of local
and regional government reviews is subject to restrictions and must
take place according to a published schedule, except where it is
necessary for CRAs to deviate from this in order to comply with
their legal obligations. Fitch interprets this provision as
allowing us to publish a rating review in situations where there is
a material change in the creditworthiness of the issuer that Fitch
believes makes it inappropriate for us to wait until the next
scheduled review date to update the rating or Outlook/Watch status.
The next scheduled review date for Fitch's rating on the City of
Dnipro is June 5, 2020, but Fitch believes that developments in the
country warrant such a deviation from the calendar.

KEY RATING DRIVERS

While Ukrainian local and regional governments' most recently
available data may not have indicated performance impairment,
material changes in revenue and cost profiles are occurring across
the sector and likely to worsen in the coming weeks and months as
economic activity suffers and government restrictions are
maintained or broadened. Fitch's ratings are forward-looking in
nature, and Fitch will monitor developments in the sector for their
severity and duration, and incorporate revised base- and
rating-case qualitative and quantitative inputs based on
performance expectations and assessment of key risks.

HIGH

Sovereign Cap

Dnipro's IDRs are capped by those of Ukraine (B/Stable). Fitch have
lowered its assessment of the city's Standalone Credit Profile to
'b+' from 'bb-', which remains higher than the sovereign IDR.

LOW

Risk Profile: 'Vulnerable'

Fitch continues to assess Dnipro's risk profile as 'Vulnerable'
reflecting its unchanged 'Weaker' assessment of the six key risk
factors in combination with sovereign rating at 'B'.

Debt sustainability: 'aa' category

The assessment is derived from a combination of a sound payback
ratio, which according to Fitch's rating case, will remain in line
with a 'aaa' assessment, moderate fiscal debt burden, and a weaker
actual debt service coverage ratio (ADSCR) at the 'aa' level.

Fitch classifies Dnipro as a type B LRG, as it covers debt service
from cash flow on an annual basis. Fitch's rating case scenario
incorporates a negative shock from the coronavirus pandemic on the
city's economy and fiscal accounts. Under Fitch's new rating case
scenario, the debt payback ratio (net adjusted debt-to-operating
balance) - the primary metric of debt sustainability assessment for
type B LRGs - will deteriorate from the current zero level, but
remain below 5x during 2020-2024. However, the short maturity of
debt leads to a weaker ADSCR, which falls into the 'aa' category
under Fitch's rating case. Fitch assumes that tightened conditions
on the capital market caused by coronavirus pandemic could further
pressurise the ADSCR, which leads us to override the total
assessment of debt sustainability to 'aa' category.

DERIVATION SUMMARY

Dnipro's 'b+' SCP reflects a combination of a 'Vulnerable' risk
profile and a 'aa' debt sustainability assessment. The SCP also
factors in national peer comparison. The IDRs are not affected by
any asymmetric risk or extraordinary support from the central
government, but it remains capped by the Ukrainian sovereign IDRs
at 'B'.

KEY ASSUMPTIONS

Qualitative assumptions and assessments and their respective change
since the last review on December 6, 2019 and weight in the rating
decision:

Risk Profile: Vulnerable, unchanged with Low weight

Revenue Robustness: Weaker, unchanged with Low weight

Revenue Adjustability: Weaker, unchanged with Low weight

Expenditure Sustainability: Weaker, unchanged with Low weight

Expenditure Adjustability: Weaker, unchanged with Low weight

Liabilities and Liquidity Robustness: Weaker, unchanged with Low
weight

Liabilities and Liquidity Flexibility: Weaker, unchanged with Low
weight

Debt sustainability: 'aa' category, weakening with Low weight

Support: n/a

Asymmetric Risk: n/a

Sovereign Cap: Yes, weakening with High weight

Quantitative assumptions - issuer specific

Fitch's rating case scenario is a "through-the-cycle" scenario,
which incorporates a combination of revenue, cost and financial
risk stresses. It is based on the 2015-2019 figures and 2020-2024
projected ratios. The key assumptions for the scenario include

  - yoy 0.8% increase in operating revenue on average in 2020-2024,
including 3.6% in tax revenue, a one-off 47% reduction in transfers
in 2020 and average 5.3% yoy transfers growth in 2021-2024;

  - yoy 2.0% increase in operating spending on average in
2020-2024, including, a one-off 50% reduction in transfers in 2020
and average 5.3% yoy transfers growth in 2021-2024;

  - net capital balance of negative UAH3,630 million on average in
2020-2024;

  - 10% cost of debt and three-year maturity for new debt

Quantitative assumptions - sovereign related (note that no weights
are included as none of these assumptions was material to the
rating action)

Figures as per Fitch's sovereign estimate for 2019 and forecast for
2020 and 2021, respectively:

  - GDP per capita (US dollar, market exchange rate): 3,658, 3,459,
3,423

  - Real GDP growth (%): 3.2, -6.5, 3,5

  - Consumer prices (annual average % change): 7.9 ,5.3, 5.9

  - General government balance (% of GDP): -2.0, -7.1, -3.4

  - General government debt (% of GDP): 44.4, 57.1, 57.4

  - Current account balance plus net FDI (% of GDP): 0.7, -1.4,
-0.7

  - Net external debt (% of GDP): -9.5, -8.4, -7.9

  - IMF Development Classification: EM

  - CDS Market Implied Rating: n/a

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

  - Negative rating action on the Ukraine sovereign ratings would
lead to negative action on Dnipro's ratings;

  - A lowering of the SCP below 'b' driven by a material
deterioration in the issuer's debt metrics, particularly payback
sustainably above 5x according to Fitch's rating case.

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

  - Dnipro's IDRs are currently constrained by the sovereign
ratings. Therefore, positive rating action on the sovereign could
lead to positive rating action on Dnipro's IDR.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Public Finance issuers have a
best-case rating upgrade scenario (defined as the 99th percentile
of rating transitions, measured in a positive direction) of three
notches over a three-year rating horizon; and a worst-case rating
downgrade scenario (defined as the 99th percentile of rating
transitions, measured in a negative direction) of three notches
over three years. The complete span of best- and worst-case
scenario credit ratings for all rating categories ranges from 'AAA'
to 'D'. Best- and worst-case scenario credit ratings are based on
historical performance.

SOURCES OF INFORMATION

Committee date: April 29, 2020

There was an appropriate quorum at the committee and the members
confirmed that they were free from recusal. It was agreed that the
data was sufficiently robust relative to its materiality. During
the committee no material issues were raised that were not in the
original committee package. The main rating factors under the
relevant criteria were discussed by the committee members. The
rating decision as discussed in this rating action commentary
reflects the committee discussion.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

ESG CONSIDERATIONS

The city has an ESG Relevance Score of '4' for 'Political Stability
and Rights' due to its exposure to impact of political pressure or
instability on operations and tendency toward unpredictable policy
shifts which, in combination with other factors, impacts the
rating.

KHARKOV CITY: Fitch Affirms 'B' LT IDR, Alters Outlook to Stable
----------------------------------------------------------------
Fitch Ratings has revised the Outlook on the City of Kharkov's
Long-Term Foreign- and Local-Currency Issuer Default Ratings to
Stable from Positive and affirmed the IDR at 'B'.

The revision of the Outlook follows that on Ukraine as Fitch
continue to view Kharkov's ratings as constrained by that of the
sovereign.

Kharkov is the second-largest city in Ukraine in terms of
population, which is close to 1.5 million. The city has diversified
urban economy, supported by a large number of companies across
various sectors. The most important sectors are machine building
and food industry. Financial planning, debt projections and
investment planning are based on a three-year cycle, while the
budget is subject to regular amendments amid instability in
political and geopolitical field and ongoing changes in Ukraine
budgetary system.

CRA3 DEVIATION

Under EU credit rating agency regulation, the publication of LRG
reviews is subject to restrictions and must take place according to
a published schedule, except where it is necessary for CRAs to
deviate from this in order to comply with their legal obligations.
Fitch interprets this provision as allowing us to publish a rating
review in situations where there is a material change in the
creditworthiness of the issuer that Fitch believes makes it
inappropriate for us to wait until the next scheduled review date
to update the rating or Outlook/Watch status. The next scheduled
review date for Fitch's rating on the City of Kharkov is June 5,
2020, but Fitch believes that developments in the country warrant
such a deviation from the calendar.

KEY RATING DRIVERS

While Ukrainian local and regional governments' most recently
available data may not have indicated performance impairment,
material changes in revenue and cost profiles are occurring across
the sector and likely to worsen in the coming weeks and months as
economic activity suffers and government restrictions are
maintained or broadened. Fitch's ratings are forward-looking in
nature, and Fitch will monitor developments in the sector for their
severity and duration, and incorporate revised base- and
rating-case qualitative and quantitative inputs based on
performance expectations and assessment of key risks.

HIGH

Sovereign Cap

Kharkov's IDRs are capped by those of Ukraine (B/Stable). Fitch
have lowered its assessment of the city's Standalone Credit Profile
to 'b+' from 'bb-', which remains higher than the sovereign IDR.

LOW

Risk Profile: Vulnerable

Fitch continues to assess Kharkov's risk profile as Vulnerable,
reflecting an unchanged Weaker assessment of the six key risk
factors in combination with sovereign rating at 'B'.

Revenue Robustness: Weaker

The city's revenue framework continues to evolve alongside changes
to tax and budgetary regulation. Kharkov is one of the most
economically developed cities in the national context, although
this significantly lags international peers. Its tax base is
exposed to a weak economic environment and negative trends in the
local economy caused by the coronavirus pandemic, which together
with inter-governmental transfers from the financially weak
sovereign, drives its Weaker assessment of the city's revenue
robustness. The city's main revenue source is taxes (66% of total
revenue in 2019), followed by transfers from the central budget
(30%). Due to its higher than Ukrainian average fiscal capacity,
Kharkov is also among a few Ukrainian cities that transfer part of
their revenue to the state budget for equalisation purposes.

Revenue Adjustability: Weaker

Fitch views Kharkov's ability to generate additional revenue in
response to economic downturns as limited. The city has formal
tax-setting authority over several local taxes and fees that
accounted for almost 25% of city's total revenue in 2019 with two
taxes the largest contributors - a group of property taxes and
single tax on SMEs. However, the affordability of additional
taxation in response to economic downturn is low, as it is
constrained by both legally set ceilings and high social-political
sensitivity to tax increases.

Expenditure Sustainability: Weaker

The city's expenditure framework is fragile, leading to its Weaker
assessment of its sustainability. Due to the evolving budgetary
system in Ukraine, further reallocation of responsibilities between
government tiers is very likely as was the case with the recent
transfer of certain social benefits. Part of the particular
spending items within the most important sectors like education,
healthcare, social policy have been transferred to the local level
without a simultaneous transfer of funding sources. Fitch assumes
that this problem of unfunded mandates is unlikely to be resolved
in the near future, which seriously limits the city's expenditure
sustainability.

Expenditure Adjustability: Weaker

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Ukrainian cities have a rigid spending
structure, which is due to the nature of responsibilities mandated
to them. Fitch estimates the proportion of Kharkov's spending with
low flexibility at least at 70% of the total in 2019. Despite the
fact that the proportion of capex was at sizeable 20%-25% of the
total in 2016-2019, Fitch does not count this as a factor of
additional flexibility amid the high needs for infrastructure
modernisation and development. Worsened economic conditions could
force the city to re-channel part of the funds aimed at development
to socially-oriented spending.

Liabilities and Liquidity Robustness: Weaker

Ukraine's framework for debt and liquidity management is weak. The
national debt capital market is underdeveloped, which is
exacerbated by Ukraine's unfavourable credit history: the 2015
sovereign default impaired Ukrainian LRGs' access to debt capital
markets. Consequently, like the majority of national peers, Kharkov
did not borrow from the market and remained debt-free in 2015-2018
In 2H19 it issued a UAH500 million domestic bond with maturity in
2022. The proceeds from the bond are to be used for the city's
infrastructure needs.

Liabilities and Liquidity Flexibility: Weaker

Kharkov's available liquidity is restricted to the city's own cash
reserves, which are low (end-2019: UAH0.4 billion). The city has no
undrawn committed credit lines. Potential liquidity providers are
local banks (B category), justifying its Weak assessment of the
liquidity profile. There are no emergency bail-out mechanisms from
the national government due to the sovereign's fragile fiscal
capacity and weak public finances, which are dependent on IMF
funding for the smooth repayment of its external debt.

Debt sustainability: 'aa' category

The assessment is derived from a combination of a sound payback
ratio, which according to Fitch's rating case, will remain in line
with a 'aaa' assessment, moderate fiscal debt burden, and a weaker
actual debt service coverage ratio at the 'aa' level.

Fitch classifies Kharkov as a type B LRG, as it covers debt service
from cash flow on an annual basis. Fitch's rating case scenario
incorporates a negative shock from the coronavirus pandemic on the
city's economy and fiscal accounts. Under Fitch's new rating-case
scenario, the debt payback ratio (net adjusted debt-to-operating
balance) - the primary metric of debt sustainability assessment for
type B LRGs - will deteriorate from the current zero level, but
remain below 5x during 2020-2024. However, the short maturity of
the debt leads to a weaker ADSCR, which falls into the 'aa'
category under Fitch's rating case. Fitch assumes that tightened
conditions on the capital market caused by coronavirus pandemic
could further pressurise the ADSCR, which lead us to overriding
total assessment of debt sustainability to 'aa' category.

ESG Consideration

The city has an ESG Relevance Score of '4' for 'Political Stability
and Rights' due to its exposure to impact of political pressure or
instability on operations and tendency toward unpredictable policy
shifts which, in combination with other factors, impacts the
rating.

DERIVATION SUMMARY

Kharkov's 'b+' SCP reflects a combination of a Vulnerable risk
profile and a 'aa' debt sustainability assessment. The SCP also
factors in national peer comparison. The IDRs are not affected by
any asymmetric risk or extraordinary support from the central
government, but it remains capped by the Ukrainian sovereign IDRs
at 'B'.

KEY ASSUMPTIONS

Qualitative assumptions and assessments and their respective change
since the last review on 13 March 2020 and weight in the rating
decision:

Risk Profile: Vulnerable, unchanged with Low weight

Revenue Robustness: Weaker, unchanged with Low weight

Revenue Adjustability: Weaker, unchanged with Low weight

Expenditure Sustainability: Weaker, unchanged with Low weight

Expenditure Adjustability: Weaker, unchanged with Low weight

Liabilities and Liquidity Robustness: Weaker, unchanged with Low
weight

Liabilities and Liquidity Flexibility: Weaker, unchanged with Low
weight

Debt sustainability: 'aa' category, weakening with Low weight

Support: n/a

Asymmetric Risk: n/a

Sovereign Cap: Yes, weakening with High weight

Quantitative assumptions - issuer specific

Fitch's rating case scenario is a "through-the-cycle" scenario,
which incorporates a combination of revenue, cost and financial
risk stresses. It is based on the 2015-2019 figures and 2020-2024
projected ratios. The key assumptions for the scenario include

  - yoy 1.0% increase in operating revenue on average in 2020-2024,
including 4.6% in tax revenue, a one-off 50% reduction in transfers
in 2020 and average 5.3% yoy transfers growth in 2021-2024;

  - yoy 2.2% increase in operating spending on average in
2020-2024, including, a one-off 44% reduction in transfers in 2020
and average 5.3% yoy transfers growth in 2021-2024;

  - net capital balance of negative UAH4,000 million on average in
2020-2024;

  - 8.9% cost of debt and three-year maturity for new debt

Quantitative assumptions - sovereign related (note that no weights
are included as none of these assumptions was material to the
rating action)

Figures as per Fitch's sovereign estimate for 2019 and forecast for
2020 and 2021, respectively:

  - GDP per capita (US dollar, market exchange rate): 3,658, 3,459,
3,423

  - Real GDP growth (%): 3.2, -6.5, 3,5

  - Consumer prices (annual average % change): 7.9 ,5.3, 5.9

  - General government balance (% of GDP): -2.0,-7.1, -3.4

  - General government debt (% of GDP): 44.4, 57.1, 57.4

  - Current account balance plus net FDI (% of GDP): 0.7, -1.4,
-0.7

  - Net external debt (% of GDP): -9.5, -8.4, -7.9

  - IMF Development Classification: EM

  - CDS Market Implied Rating: n/a

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

  - Negative rating action on Ukraine's sovereign ratings would
lead to respective negative action on Kharkov's ratings;

  - A lowering of the SCP below 'b' driven by a material
deterioration in the issuer's debt metrics, particularly payback
sustainably above 5x according to Fitch's rating case.

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

  - Kharkov's IDRs are currently constrained by the sovereign
ratings. Therefore, positive rating action on the sovereign could
lead to positive rating action on Kharkov's IDR.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Public Finance issuers have a
best-case rating upgrade scenario (defined as the 99th percentile
of rating transitions, measured in a positive direction) of three
notches over a three-year rating horizon; and a worst-case rating
downgrade scenario (defined as the 99th percentile of rating
transitions, measured in a negative direction) of three notches
over three years. The complete span of best- and worst-case
scenario credit ratings for all rating categories ranges from 'AAA'
to 'D'. Best- and worst-case scenario credit ratings are based on
historical performance.

LIQUIDITY AND DEBT STRUCTURE

Kharkov's net adjusted debt was at low UAH123 million in 2019 as
the only form of debt was a UAH500 million domestic bond issued in
2H19 with maturity in 2022. In 1Q20 the city issued another UAH250
million tranche of the domestic bond. Fitch's rating case expects
the city's net adjusted debt to increase to more than UAH7 billion,
which still does not pressurise its debt metrics. In its scenario
Fitch included the bulk of municipal companies' debt into the
city's adjusted debt as Fitch assumes it could crystallize as
Kharkov's direct obligations under the unfavorable economic
conditions.

The debt of municipal companies amounted to around UAH1.6 billion
at the beginning of 2019 (the latest available data), which
corresponded to 11% of operating revenue. Part of the municipal
companies' debt is from local banks and part is borrowed in foreign
currency from international financial institutions, which creates
FX risk. The city guaranteed the debt of Kharkov water supply
company (UAH90 million as of the beginning of 2019).

Kharkov's other obligations are UAH360.9 million of interest-free
treasury loans contracted prior to 2014. As these loans were
granted to the city to finance mandates delegated by the central
government and will be written off by the state in the future,
Fitch does not include these treasury loans in its calculation of
city's adjusted debt.

SOURCES OF INFORMATION

COMMITTEE MINUTE SUMMARY

Committee date: April 29, 2020

There was an appropriate quorum at the committee and the members
confirmed that they were free from recusal. It was agreed that the
data was sufficiently robust relative to its materiality. During
the committee no material issues were raised that were not in the
original committee package. The main rating factors under the
relevant criteria were discussed by the committee members. The
rating decision as discussed in this rating action commentary
reflects the committee discussion.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

ESG CONSIDERATIONS

The city has an ESG Relevance Score of '4' for 'Political Stability
and Rights' due to its exposure to impact of political pressure or
instability on operations and tendency toward unpredictable policy
shifts, which in combination with other factors, impacts the
rating.

KYIV CITY: Fitch Affirms 'B' LT IDR, Alters Outlook to Stable
-------------------------------------------------------------
Fitch Ratings has revised the Outlook on Ukrainian City of Kyiv's
Long-Term Foreign-Currency Issuer Default Rating to Stable from
Positive and affirmed the IDR at 'B'.

The revision of the City of Kyiv's Outlook follows Fitch's recent
similar action on Ukraine's Outlook on April 24, 2020.

Kyiv benefits from its status as Ukraine's capital and remains the
largest and wealthiest city in the country, with a population
approaching three million inhabitants and gross city product
accounting for about 23% of the country's GDP. According to
budgetary regulation, Kyiv has the right to borrow on the domestic
market and externally. Budget accounts are presented on a cash
basis while the law on budget is approved for one year.

CRA3 DEVIATION

Under EU credit rating agency regulation, the publication of LRG
reviews is subject to restrictions and must take place according to
a published schedule, except where it is necessary for CRAs to
deviate from this in order to comply with their legal obligations.
Fitch interprets this provision as allowing us to publish a rating
review in situations where there is a material change in the
creditworthiness of the issuer that Fitch believes makes it
inappropriate for us to wait until the next scheduled review date
to update the rating or Outlook/Watch status. The next scheduled
review date for Fitch's rating on the City of Kyiv is June 5, 2020,
but Fitch believes that developments in the country warrant such a
deviation from the calendar.

KEY RATING DRIVERS

While Ukrainian local and regional governments' most recently
available data may not have indicated performance impairment,
material changes in revenue and cost profiles are occurring across
the sector and likely to worsen in the coming weeks and months as
economic activity suffers and government restrictions are
maintained or broadened. Fitch's ratings are forward-looking in
nature, and Fitch will monitor developments in the sector for their
severity and duration, and incorporate revised base- and
rating-case qualitative and quantitative inputs based on
performance expectations and assessment of key risks.

HIGH

Kyiv's IDRs are capped by those of Ukraine (B/Stable). Fitch have
revised down its assessment of the city's Standalone Credit Profile
to 'b+' from 'bb-', which remains higher than the sovereign IDR.

LOW

Risk Profile: 'Vulnerable'

Fitch continues to assess Kyiv's risk profile as 'Vulnerable',
reflecting an unchanged 'Weaker' assessment of all six key risk
factors in combination with the 'B' sovereign rating.

Revenue Robustness: 'Weaker'

The evolving nature of the national fiscal framework, dependence on
a weak counterparty (the Ukrainian state) for a material portion of
the city's revenue and weak revenue growth prospects drive the
'Weaker' assessment of revenue robustness. The city's wealth
metrics are above the national average, but lags behind
international peers. Its main revenue source is taxes (71% of total
revenue in 2019), whose growth prospects are limited due to a weak
economy and disruptions caused by the coronavirus pandemic.
Inter-governmental transfers from the Ukraine's central government
have been declining over the last three years, albeit still at a
material share of 22% of revenue.

Revenue Adjustability: 'Weaker'

Fitch views Kyiv's ability to generate additional revenue in
response to possible economic downturns as limited. The city has
formal tax-setting authority over several local taxes and fees that
accounted for 22% of its total revenue in 2019 with property tax
and single tax on SMEs being the largest contributors. However,
affordability of additional taxation in response to economic
downturns is constrained by both legally set tax ceilings and high
social-political sensitivity to tax increases.

Expenditure Sustainability: 'Weaker'

The city's expenditure framework is fragile, leading to its
'Weaker' assessment of its sustainability. The dynamics of spending
during the last five years have been influenced by high, albeit
slowing, inflation and reallocation of spending responsibilities.
Currently, the city's main spending responsibilities are linked to
social items of non- or moderately counter-cyclical nature such as
education and healthcare and social protection (about 60% of total
expenditure). Another 30% is related to the local economy and
infrastructure development. Owing to the overall evolving budgetary
system in Ukraine further reallocation of responsibilities between
government tiers is very likely, in Fitch's view, while the risk of
unfunded mandates transfer is growing amid the economic downturn.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers'. Operating expenditure is almost equally
distributed among staff costs (23% of operating spending in 2019),
social subsidies and transfers (22%) and purchase of goods and
services (22%). In total, Fitch estimated share of inflexible
expenditure at about 70% of spending.

The city's capex programme (30% of total spending in 2019) may
offer some leeway in the short term as worsened economic conditions
could force the city to re-channel part of the funds aimed at
development to socially-oriented spending. Over the longer term,
pressure on capex persists as the city's infrastructure needs
remain high due to significantly under-funded infrastructure for a
prolonged period.

Liabilities and Liquidity Robustness: 'Weaker'

Kyiv operates under a weak national debt and liquidity management
framework due to an under-developed Ukraine capital market and the
sovereign's unfavorable credit history of that had impaired
Ukrainian LRGs' access to debt capital markets for several years.
As of mid-2019, the city's outstanding direct debt was fully US
dollar-denominated, exposing the city to unhedged FX risk.
Off-balance-sheet liabilities also carry FX risk. Fitch included
the municipal companies' debt, which is guaranteed by the city, in
Kyiv's adjusted debt (see Liquidity and Debt Structure section).

Liabilities and Liquidity Flexibility: 'Weaker'

Available liquidity is restricted to the city's own cash reserves,
which totaled UAH2.77 billion as of January 1, 2020. The city has
no undrawn committed credit lines in place. Local banks, which are
potential liquidity providers, are 'B' category counterparties,
which justify its weak assessment of liquidity. There are no
emergency bail-out mechanisms from the national government due to
weak public finances, which leaves Ukraine dependent on IMF funding
for a smooth repayment of its external debt.

Debt sustainability: 'aa' category

Fitch classifies Kyiv as a type B LRG, as it covers debt service
from cash flow on an annual basis. Fitch's rating-case scenario
incorporates a negative shock from the pandemic on the city's
economy and fiscal accounts. Under the rating-case the debt payback
ratio (net adjusted debt-to-operating balance) - the primary metric
of debt sustainability assessment for type B LRGs - will
deteriorate from the currently close-to-zero level, but remain far
below 5x during 2020-2024, which remains in line with a 'aaa'
assessment. However, its short debt maturity leads to weaker
secondary metrics - actual debt service coverage ratio (ADSCR) -
which Fitch expects to deteriorate to below 2x in 2024, in line
with a 'a' assessment under Fitch's rating case. Fitch assumes that
tightened conditions on the capital market caused by the pandemic
could put further pressure on ADSCR, leading us to a final 'aa'
assessment of debt sustainability.

ESG Influence

Kyiv has an ESG Relevance Score of '4' for 'Political Stability and
Rights' due to its exposure to impact of political pressure or
instability on operations and tendency toward unpredictable policy
shifts which, in combination with other factors, impacts the
rating.

DERIVATION SUMMARY

Kyiv's 'b+' SCP reflects a combination of a 'Vulnerable' risk
profile and a 'aa' debt sustainability assessment. The SCP also
factors in national peer comparison. The IDRs are not affected by
any asymmetric risk or extraordinary support from the central
government, but it remains capped by the Ukrainian sovereign IDRs
at 'B'.

KEY ASSUMPTIONS

Qualitative assumptions and assessments and their respective change
since the last review on 13 March 2019 and weight in the rating
decision:

Risk Profile: Vulnerable, unchanged with Low weight

Revenue Robustness: Weaker, unchanged with Low weight

Revenue Adjustability: Weaker, unchanged with Low weight

Expenditure Sustainability: Weaker, unchanged with Low weight

Expenditure Adjustability: Weaker, unchanged with Low weight

Liabilities and Liquidity Robustness: Weaker, unchanged with Low
weight

Liabilities and Liquidity Flexibility: Weaker, unchanged with Low
weight

Debt sustainability: 'aa' category, weakening with Low weight

Support: n/a

Asymmetric Risk: n/a

Sovereign Cap: Yes, weakening with High weight

Quantitative assumptions - issuer-specific

Fitch's rating case is a "through-the-cycle" scenario, which
incorporates a combination of revenue, cost and financial risk
stresses. It is based on 2015-2019 figures and 2020-2024 projected
ratios. The key assumptions for the scenario include

  - 1.8% yoy increase in operating revenue on average in 2020-2024,
including 4.5% in tax revenue, a one-off 46% reduction in transfers
in 2020 and average 5.6% yoy transfers growth in 2021-2024;

  - 4.1% yoy increase in operating spending on average in
2020-2024, including a one-off 21% reduction in transfers in 2020
and average 5.6% yoy transfers growth in 2021-2024;

  - Net capital balance of a negative UAH17.9 billion on average in
2020-2024; and

  - 8.2% cost of debt and 2-year weighted average maturity for new
debt.

Quantitative assumptions - sovereign-related (note that no weights
are included as none of these assumptions were material to the
rating action)

Figures as per Fitch's sovereign estimate for 2019 and forecast for
2020 and 2021, respectively:

  - GDP per capita (US dollar, market exchange rate): 3,658, 3,459,
3,423

  - Real GDP growth (%): 3.2, -6.5, 3,5

  - Consumer prices (annual average % change): 7.9 ,5.3, 5.9

  - General government balance (% of GDP): -2, -7.1, -3.4

  - General government debt (% of GDP): 44.4, 57.1, 57.4

  - Current account balance plus net FDI (% of GDP): 0.7, -1.4,
-0.7

  - Net external debt (% of GDP): -9.5, -8.4, -7.9

  - IMF Development Classification: EM

  - CDS Market Implied Rating: n/a

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

  - Negative rating action on the sovereign ratings of Ukraine;
and

  - A downward assessment of the SCP below 'b', driven by material
deterioration in debt metrics, particularly a debt payback
sustainably above 5x under Fitch's rating case.

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

  - Kyiv's IDRs are currently constrained by the sovereign ratings.
Therefore, positive rating action on the sovereign ratings could
lead to a corresponding action on the city's IDR.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Public Finance issuers have a
best-case rating upgrade scenario (defined as the 99th percentile
of rating transitions, measured in a positive direction) of three
notches over a three-year rating horizon; and a worst-case rating
downgrade scenario (defined as the 99th percentile of rating
transitions, measured in a negative direction) of three notches
over three years. The complete span of best- and worst-case
scenario credit ratings for all rating categories ranges from 'AAA'
to 'D'. Best- and worst-case scenario credit ratings are based on
historical performance.

LIQUIDITY AND DEBT STRUCTURE

Kyiv's market debt is primarily a USD115.1 million Eurobond, in the
form of local participation notes issued by PBR Kyiv Finance PLC in
September 2018. The Eurobond bears a 7.5% semi-annual coupon and is
due in in four equal bi-annual instalments in 2021 and 2022.

The city also has USD175.5 million obligations to Ukraine's
Ministry of Finance. This is a result of an exchange of Kyiv's
Eurobonds into Ukraine sovereign debt in December 2015. According
to the terms of the debt exchange, Kyiv makes bi-annual payments to
compensate for the coupon payment related to the Eurobond. The
outstanding principal is to be repaid in 2020. Fitch treats this
debt as an inter-governmental loan.

Kyiv's other obligations are UAH3.7 billion of interest-free
treasury loans contracted prior to 2014. As these loans were
granted to the city to finance mandates delegated by the central
government and will be written off by the state in the future Fitch
does not include these treasury loans in its calculation of city's
adjusted debt and treats them as contingent risk.

In addition, Kyiv remains exposed to contingent risk stemming from
public-sector companies. The city had outstanding guarantees
totaling about EUR17.8 million as of April 1, 2020 to support
projects in public transportation, infrastructure and
energy-saving. The guaranteed loans are euro-denominated and relate
to two city-owned companies, Kyivpastrans and Kyivmetropoliten. The
guarantees expire in 2021 and the city currently provides funding
to the companies to service these liabilities, so Fitch includes
them into the city's adjusted debt.

COMMITTEE MINUTE SUMMARY

Committee date: April 29, 2020

There was an appropriate quorum at the committee and the members
confirmed that they were free from recusal. It was agreed that the
data was sufficiently robust relative to its materiality. During
the committee no material issues were raised that were not in the
original committee package. The main rating factors under the
relevant criteria were discussed by the committee members. The
rating decision as discussed in this rating action commentary
reflects the committee discussion.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

ESG CONSIDERATIONS

Kyiv has an ESG Relevance Score of '4' for 'Political Stability and
Rights'.

Except for the matters discussed, the highest level of ESG credit
relevance, if present, is a score of 3. This means ESG issues are
credit-neutral or have only a minimal credit impact on the
entity(ies), either due to their nature or to the way in which they
are being managed by the entity(ies).

LVIV CITY: Fitch Affirms 'B' LT IDR, Alters Outlook to Stable
-------------------------------------------------------------
Fitch Ratings has revised the Ukrainian City of Lviv's Outlook to
Stable from Positive while affirming the city's Long-Term Foreign-
and Local-Currency Issuer Default Ratings at 'B'.

The revision of Outlook follows that of Ukraine as Lviv's ratings
remain constrained by that of the sovereign.

Lviv is a capital city in Lviv Region located in the west of
Ukraine. The population of the city is about 700,000 or 30% of the
region's population. The city's economy is diversified across
manufacturing and services. Financial planning, debt projections
and investment planning are based on a three-year cycle while
budget is subject to regular amendments amid instability in
Ukraine's political system and ongoing changes to the national
budgetary system.

CRA3 DEVIATION

Under EU credit rating agency regulation, the publication of LRG
reviews is subject to restrictions and must take place according to
a published schedule, except where it is necessary for CRAs to
deviate from this in order to comply with their legal obligations.
Fitch interprets this provision as allowing us to publish a rating
review in situations where there is a material change in the
creditworthiness of the issuer that Fitch believes makes it
inappropriate for us to wait until the next scheduled review date
to update the rating or Outlook/Watch status. The next scheduled
review date for Fitch's rating on the City of Lviv is June 5, 2020,
but Fitch believes that developments in the country warrant such a
deviation from the calendar.

While Ukrainian local and regional governments' most recently
available data may not have indicated performance impairment,
material changes in revenue and cost profiles are occurring across
the sector and likely to worsen in the coming weeks and months as
economic activity suffers and government restrictions are
maintained or broadened. Fitch's ratings are forward-looking in
nature, and Fitch will monitor developments in the sector for their
severity and duration, and incorporate revised base- and
rating-case qualitative and quantitative inputs based on
performance expectations and assessment of key risks.

KEY RATING DRIVERS

HIGH

Lviv's IDRs are capped by those of Ukraine (B/Stable). Fitch have
revised down its assessment of the city's Standalone Credit Profile
to 'b+' from 'bb-', which remains higher than the sovereign IDR.

LOW

Risk Profile: 'Vulnerable'

Fitch's assessment of Lviv's risk profile is unchanged at
'Vulnerable', reflecting its unchanged 'Weaker' assessment of all
six key risk factors in combination with the 'B' sovereign rating.

Revenue Robustness: 'Weaker'

The evolving nature of the national fiscal framework, dependence on
a weak counterparty (Ukrainian state) for a material portion of the
city's revenue and weak revenue growth prospects drive its 'Weaker'
assessment of revenue robustness. The city's wealth metrics are
moderately above the national average, but materially lag
international peers.

Operating revenue is mostly made up of taxes, notably personal
income tax (2019: 50% of operating revenue), as well as property
tax (8%) and single tax on SMEs (16%), whose growth prospects are
limited by a weak economy and disruptions caused by the coronavirus
pandemic. Inter-governmental transfers from Ukraine's central
government have been declining over the last two years, with
further declines expected in 2020 following reduced
responsibilities in social and healthcare to 18% of operating
revenue in 2020 (from 28% in 2019).

Revenue Adjustability: 'Weaker'

Lviv's ability to generate additional revenue in response to
possible economic downturns is limited. The city has formal
tax-setting authority over several local taxes and fees that
accounted for almost 25% of its total revenue in 2019 with property
tax and single tax on SMEs being the largest contributors. However,
affordability of additional taxation in response to economic
downturns is constrained by both legally set tax ceilings and high
social-political sensitivity to tax increases.

Expenditure Sustainability: 'Weaker'

The city's expenditure framework is fragile, leading to its
'Weaker' assessment of its sustainability. The dynamics of spending
during the last five years have been influenced by high, albeit
slowing, inflation and reallocation of spending responsibilities.
Currently, the city is largely responsible for education and
healthcare (38% of total spending in 2019), which are both of
non-cyclical nature. Owing to the overall evolving budgetary system
in Ukraine further reallocation of responsibilities between
government tiers is very likely, in Fitch's view, while the risk of
unfunded mandates transfer is growing amid the economic downturn.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs (44% of operating expenditure in 2019) and social subsidy
transfers (24%). In total, Fitch estimated the share of inflexible
expenditure at about 70% of spending.

The city's capex programme (almost 30% of total spending in 2019)
offers some leeway in the short- term as worsened economic
conditions could force the city to re-channel part of the funds
aimed at development to socially-oriented spending. Over the
longer-term, pressure on capex persists as the city's
infrastructure needs remain high due to significantly under-funded
infrastructure for a prolonged period.

Liabilities and Liquidity Robustness: 'Weaker'

Lviv operates under a weak national debt and liquidity management
framework due to an under-developed Ukraine capital market and the
sovereign's unfavorable credit history. As with a majority of its
national peers, Lviv did not borrow from the market and remained
debt-free in 2015-2017. It resumed borrowing in 2018 with the issue
of fixed-rate three-year bonds of UAH440 million and in 2019 an
additional UAH300 million of bonds. The city's direct debt amounted
to just below 10% of operating revenue at end-2019. Lviv operates
in a high, but lower, interest-rate environment following cuts to
the reference rate to 8% in April 2020 from 13.5% at end-2019.

Fitch includes the guaranteed incurred debt of municipal companies
into "other Fitch-classified debt" and thus in Lviv's adjusted debt
calculation. This is because many of those companies have been
posting losses in recent years and the city provides them with
capital injections, including amounts equal to the guaranteed debt
coming due in a given year. Lviv supports investments in the city's
infrastructure through its municipal companies, which benefit from
non-returnable grants and loans from international institutions
such as EBRD and EBI. The companies' debt carries FX risk and tends
to grow with the implementation of investment projects as well as
due to the expected depreciation of the hryvnia by 25% yoy in
2020.

The total value of guarantees issued by the city exceeded UAH5
billion in 2019, but the actual debt contracted by municipal
companies was lower, at UAH1.2 billion (ie. 13% of the city's
operating revenue). Under Fitch's rating case Fitch expects the
latter to rise to UAH2 billion in 2020 and UAH3.5 billion in 2024,
albeit subject to the pace of project implementation.

Liabilities and Liquidity Flexibility: 'Weaker'

Lviv's available liquidity is limited to the city's own cash
reserves, which are low (end-2019: UAH230 million). The city has no
undrawn committed credit lines in place but has reasonable access
to loans from local banks ('b'-rated counterparties) that justifies
its 'Weaker' assessment of the liquidity profile. There are no
emergency bail-out mechanisms from the national government due to
the sovereign's fragile fiscal capacity and weak public finances,
which are dependent on IMF funding for the smooth repayment of its
external debt.

Debt sustainability: 'aa' category

Fitch classifies Lviv as a type B LRG, as it covers debt service
from cash flow on an annual basis. Fitch's rating-case scenario
incorporates a negative shock from the pandemic on the city's
economy and fiscal accounts. Under Fitch's new rating case the debt
payback ratio (net adjusted debt-to-operating balance) - the
primary metric of debt sustainability assessment for type B LRGs -
will deteriorate to about 3.6x in 2024 from current 0.7x, but
remaining in line with a 'aaa' assessment.

However, short debt maturity, together with tightened conditions on
the capital market caused by the pandemic, could put further
pressure on actual debt service coverage ratio (ADSCR), which Fitch
estimates to fall to 1.9x in the rating case, equal to an 'a'
assessment. This, plus a fiscal debt burden (net adjusted
debt-to-operating revenue) that Fitch expects to gradually increase
toward 64% in 2024, results in an overall 'aa' debt
sustainability.

Lviv's net adjusted debt was at a low UAH1.7 billion at end-2019,
comprising UAH740 million direct debt and UAH1.2 billion guaranteed
incurred debt of municipal companies. The latter would materialise
as Lviv's direct obligations under unfavorable economic conditions.
In its rating case, net adjusted debt is expected to increase
toward UAH6.4 billion, which would lead to deterioration of the
fiscal debt burden towards 64% by end-2024 from 18% in 2019. Growth
is driven by a weaker operating balance due to prudent assumptions
in tax revenue- and operating expenditure-growth, while the city's
and municipal companies' investment programmes are expected to be
maintained.

ESG Influence:

Lviv has an ESG Relevance Score of '4' for 'Political Stability and
Rights' due to its exposure to the impact of political pressure or
instability on operations and tendency toward unpredictable policy
shifts which, in combination with other factors, impacts the
rating.

DERIVATION SUMMARY

Lviv's 'b+' SCP reflects a combination of a 'Vulnerable' risk
profile and an 'aa' debt sustainability assessment. The SCP also
factors in national peer comparison. The IDRs are not affected by
any asymmetric risk or extraordinary support from the central
government, but it remains capped by the Ukrainian sovereign IDRs
at 'B'.

KEY ASSUMPTIONS

Qualitative assumptions and assessments and their respective change
since the last review (December 13, 2019) and weight in the rating
decision:

Risk Profile: Vulnerable, unchanged with Low weight

Revenue Robustness: Weaker, unchanged with Low weight

Revenue Adjustability: Weaker, unchanged with Low weight

Expenditure Sustainability: Weaker, unchanged with Low weight

Expenditure Adjustability: Weaker, unchanged with Low weight

Liabilities and Liquidity Robustness: Weaker, unchanged with Low
weight

Liabilities and Liquidity Flexibility: Weaker, unchanged with Low
weight

Debt sustainability: 'aa' category, weakening with Low weight

Support: n/a

Asymmetric Risk: n/a

Sovereign Cap: Yes, weakening with High weight

Quantitative assumptions - issuer-specific

Fitch's rating case is a 'through-the-cycle' scenario, which
incorporates a combination of revenue, cost and financial risk
stresses. It is based on 2015-2019 figures and 2020-2024 projected
ratios. The key assumptions for the scenario include:

  - 0.6% yoy increase in operating revenue on average in 2020-2024,
including 4.2% in tax revenue, a one-off 47% reduction in current
transfers in 2020 and average 5.3% yoy transfers growth in
2021-2024;

  - 2.3% yoy increase in operating spending on average in
2020-2024, including a one-off 35% reduction in current transfers
in 2020 and average 6.3% yoy transfers growth in 2021-2024;

  - Net capital balance of a negative UAH1,955 million on average
in 2020-2024;

  - 10% cost of debt and 3-year weighted average maturity for new
domestic debt

Quantitative assumptions - sovereign-related (note that no weights
are included as none of these assumptions were material to the
rating action)

Figures as per Fitch's sovereign actual for 2019 and forecast for
2020-2021, respectively:

  - GDP per capita (US dollar, market exchange rate): 3,658, 3,459,
3,423

  - Real GDP growth (%): 3.2, -6.5, 3.5

  - Consumer prices (annual average % change): 7.9, 5.3, 5.9

  - General government balance (% of GDP): -2, -7.1, -3.4

  - General government debt (% of GDP): 44.4, 57.1, 57.4

  - Current account balance plus net FDI (% of GDP): 0.7, -1.4,
-0.7

  - Net external debt (% of GDP): -9.5, -8.4, -7.9

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

  - Lviv's IDRs are currently constrained by the sovereign ratings.
Therefore, positive rating action on the sovereign could lead to a
corresponding action on the city's IDRs.

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

  - Negative rating action on the sovereign would lead to a
corresponding action on the city's ratings;

  - A multiple-notch downward revision of the SCP below 'b', driven
by material deterioration in debt metrics, particularly a debt
payback sustainably above 5x under Fitch's rating case.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Public Finance issuers have a
best-case rating upgrade scenario (defined as the 99th percentile
of rating transitions, measured in a positive direction) of three
notches over a three-year rating horizon; and a worst-case rating
downgrade scenario (defined as the 99th percentile of rating
transitions, measured in a negative direction) of three notches
over three years. The complete span of best- and worst-case
scenario credit ratings for all rating categories ranges from 'AAA'
to 'D'. Best- and worst-case scenario credit ratings are based on
historical performance.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

ESG CONSIDERATIONS

Lviv has an ESG Relevance Score of 4 for Political Stability and
Rights. Except for the matters discussed, the highest level of ESG
credit relevance, if present, is a score of 3. This means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity(ies), either due to their nature or to the way in which
they are being managed by the entity(ies).

ODESA CITY: Fitch Affirms 'B' LT IDR, Alters Outlook to Stable
--------------------------------------------------------------
Fitch Ratings has revised the Outlook on the Ukrainian City of
Odesa's Long-Term Foreign- and Local-Currency Issuer Default
Ratings to Stable from Positive and affirmed the ratings at 'B'.

The revision of the Outlook follows that on Ukraine as Fitch
continues to view Odesa's ratings as being constrained by that of
the sovereign. The city's standalone credit profile has been
revised down to 'b+' from 'bb-' as consequence of the worsening
debt ratios under the new rating scenario taking into account the
impact of COVID-19 on Odesa's local economy.

Odesa is the third-largest city in Ukraine (one million
inhabitants) and has its key port in the Black Sea. The city is an
important administrative, industrial, educational and cultural
centre. Its economy is diversified across services and
manufacturing. Fitch estimates the Ukrainian economy grew by 2.9%
in 2019, supporting the city's economic prospects and tax revenue
growth. However, the wealth indicators of Ukraine and Odesa are
weak by international comparison, with a national GDP per capita
well below the EU average.

CRA3 DEVIATION

Under EU credit rating agency regulation, the publication of LRG
reviews is subject to restrictions and must take place according to
a published schedule, except where it is necessary for CRAs to
deviate from this in order to comply with their legal obligations.
Fitch interprets this provision as allowing us to publish a rating
review in situations where there is a material change in the
creditworthiness of the issuer that Fitch believes makes it
inappropriate for us to wait until the next scheduled review date
to update the rating or Outlook/Watch status. The next scheduled
review date for Fitch's rating on the City of Odesa is June 5,
2020, but Fitch believes that developments in the country warrant
such a deviation from the calendar.

While Ukrainian local and regional governments' most recently
available data may not have indicated performance impairment,
material changes in revenue and cost profiles are occurring across
the sector and likely to worsen in the coming weeks and months as
economic activity suffers and government restrictions are
maintained or broadened. Fitch's ratings are forward-looking in
nature, and Fitch will monitor developments in the sector for their
severity and duration, and incorporate revised base- and
rating-case qualitative and quantitative inputs based on
performance expectations and assessment of key risks.

KEY RATING DRIVERS

HIGH

Sovereign Cap

Odesa's SCP is 'b+', which leads to the city's IDRs being
constrained by the sovereign IDRs. In Fitch's view, the city's
ratings will remain capped by that of the sovereign over the medium
term.

LOW

Risk Profile: 'Vulnerable'

Fitch's assessment of Odesa's risk profile as 'Vulnerable' remains
unchanged, reflecting the unchanged 'Weaker' assessment of the six
key risk factors in combination with the 'B' sovereign rating.

Revenue Robustness: 'Weaker'

The evolving nature of the national fiscal framework, dependence on
a weak counterparty for a material portion of the city's revenue
and weak revenue growth prospects drive the 'Weaker' assessment for
the revenue robustness. The city's wealth metrics are moderately
above the national average, which significantly lags international
peers. Operating revenue is mostly made up of taxes, such as
personal income tax (2019: 38% of total revenue), as well as
property tax (8%) and single tax on SMEs (10%), for which growth
prospects are limited due to the weak economic environment and
negative trends in the local economy caused by the coronavirus
pandemic. Intergovernmental transfers from Ukraine's central
government have been declining over the last years, with a further
decline in 2020 following the amended responsibilities in the
social and healthcare sectors, to 21% of operating revenue in 2020
(29% in 2019).

Revenue Adjustability: 'Weaker'

Odesa's ability to generate additional revenue in response to
possible economic downturns is limited. The city has formal
tax-setting authority over several local taxes and fees that
accounted for almost 24% of the city's total revenue in 2019 with
property tax and single tax on SMEs the largest contributors.
However, the affordability of additional taxation in response to
the economic downturn is low as it is constrained by legally set
ceilings and high social-political sensitivity to tax increases.

Expenditure Sustainability: 'Weaker'

The city's expenditure framework is fragile, leading to its
'Weaker' assessment of its sustainability. The spending dynamic
during the last five years has been influenced by high, albeit
lowering, inflation and reallocation of spending responsibilities.
Currently, the city is largely responsible for education and
healthcare (36% of total spending in 2019), both of which are of
non-cyclical nature. Owing to the overall evolving budgetary system
in Ukraine, further reallocation of responsibilities between
government tiers is very likely, in Fitch's view, while the risk of
unfunded mandates transfer is growing in the context of the
economic downturn.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs (35% of operating expenditure in 2019) and current transfers
made (26%). In total, Fitch estimates the share of inflexible
expenditure is about 70% of spending. The city's capital
expenditure programme (almost 27% of total spending in 2019) can
offer some leeway in the short term as worsened economic conditions
could force the city to re-channel part of the funds aimed at
development of socially-oriented spending. Over the longer term,
pressure on capex will persist as the city's infrastructure needs
remain high due to significant infrastructure underfinancing over a
prolonged period of time.

Liabilities and Liquidity Robustness: 'Weaker'

Odesa operates under a weak national debt and liquidity management
framework due to the underdeveloped Ukraine capital market and
unfavorable credit history of the sovereign. Like the majority of
its national peers, Odesa did not borrow from the market and
remained debt-free in 2015-2016. The city operates in a high
interest-rate environment although it has lowered following cuts to
the reference rate to 8% in April 2020 from 13.5% at end-2019.

The city resumed borrowing in 2017 and entered into medium-term
loans with local banks and a loan with the Nordic Environment
Finance Corporation. Odesa's debt portfolio (2019: UAH1.9 billion)
is solely in local currency and has fixed interest rates. Debt
repayments are smooth (quarterly or semi-annual), reducing
refinancing risk. Final debt maturity is in 2024.

Odessa supports investments made through the municipal companies,
taking advantage of the loans from the international institutions
such as EBRD/World Bank. The loans, granted in euros and US dollars
are guaranteed by the city. In 2019, the value of these guarantees
totalled UAH843 million and may rise further if the city's
transportation company starts to construct the 'North-South' tram
route. Fitch has decided to include the guaranteed debt of the
city's companies into "Other Fitch-classified debt" and thus in net
adjusted debt of the city as Odessa supports the repayment of debt
(including FX risk) through its budget (capital injections to
companies).

Liabilities and Liquidity Flexibility: 'Weaker'

Like other Ukrainian cities, Odesa's available liquidity is
restricted to the city's own cash reserves and the loans provided
by local banks ('b' rated counterparties), which justifies a
'Weaker' assessment for the liquidity profile. There are no
emergency bail-out mechanisms from the national government due to
the sovereign's fragile capacity and therefore weak public finance
position, which is dependent on IMF funding for the smooth
repayment of its external debt.

Odesa's available liquidity is limited to the city's own cash
reserves (end-2019: UAH233 million). At year-end the city had no
undrawn committed credit lines in place but it has reasonable
access to loans from local banks ('b' rated counterparties) that
justifies its 'Weaker' assessment of the liquidity profile. There
are no emergency bail-out mechanisms from the national government
due to the sovereign's fragile fiscal capacity and weak public
finances, which are dependent on IMF funding for the smooth
repayment of its external debt.

Debt sustainability: 'aa' category

Fitch classifies Odesa as a type B LRG, as it covers debt service
from cash flow on an annual basis. Under Fitch's new rating-case
scenario, the debt payback ratio (net adjusted debt-to-operating
balance) will deteriorate from current 1.1x to about 3.8x in 2024,
remaining in line with 'aaa' assessment. However, short maturity of
debt will lead to weaker actual debt service coverage ratio, which
together with tightened conditions on the capital market caused by
the coronavirus pandemic could further pressurise the ratio, which
may fall to 1.2x in the rating case ('bbb' category). This led us
to override the total assessment of debt sustainability to the 'aa'
category, which is also supported by the fiscal debt burden
gradually growing to above 60% in 2024 ('aa' category).

DERIVATION SUMMARY

Odesa's 'b+' SCP reflects a combination of a 'Vulnerable' risk
profile and a 'aa' debt sustainability assessment. The SCP also
factors in national peer comparison. The city's IDRs are not
affected by any asymmetric risk or extraordinary support from the
central government, but it remains capped by the Ukrainian
sovereign IDRs at 'B'.

KEY ASSUMPTIONS

Qualitative assumptions and assessments and their respective change
since the last review on December 13, 2019 and weight in the rating
decision:

Risk Profile: Vulnerable, unchanged with low weight

Revenue Robustness: Weaker, unchanged with low weight

Revenue Adjustability: Weaker, unchanged with low weight

Expenditure Sustainability: Weaker, unchanged with low weight

Expenditure Adjustability: Weaker, unchanged with low weight

Liabilities and Liquidity Robustness: Weaker, unchanged with low
weight

Liabilities and Liquidity Flexibility: Weaker, unchanged with low
weight

Debt sustainability: 'aa' category, weakening with low weight

Support: n/a

Asymmetric Risk: n/a

Sovereign Cap: Yes, weakening with high weight

Quantitative assumptions - issuer specific

Fitch's rating case scenario is a 'through-the-cycle' scenario,
which incorporates a combination of revenue, cost and financial
risk stresses. It is based on the 2015-2019 figures and 2020-2024
projected ratios. The key assumptions for the scenario include:

  - yoy 1.7% increase in operating revenue on average in 2020-2024,
including 4.5% in tax revenue, a one-off 40% reduction in transfers
in 2020 and average 5.6% yoy transfers growth in 2021-2024;

  - yoy 2.9% increase in operating spending on average in
2020-2024, including, a one-off 40% reduction in transfers in 2020
and average 5.6% yoy transfers growth in 2021-2024;

  - net capital balance of negative UAH2,220 million on average in
2020-2024;

  - 11% cost of debt and 4-year maturity for new debt

Quantitative assumptions - sovereign related (note that no weights
are included as none of these assumptions was material to the
rating action)

Figures as per Fitch's sovereign actual for 2019 and forecast for
2020 and 2021, respectively:

GDP per capita (US dollar, market exchange rate): 3,658; 3,459;
3,423

Real GDP growth (%): 3.2; -6.5; 3.5

Consumer prices (annual average % change): 7.9; 5.3; 5.9

General government balance (% of GDP): -2.0; -7.1; -3.4

General government debt (% of GDP): 44.4; 57.1; 57.4

Current account balance plus net FDI (% of GDP): 0.7; -1.4; -0.7

Net external debt (% of GDP): -9.5; -8.4; -7.9

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

  - Odesa's IDRs are currently constrained by the sovereign
ratings. Therefore, positive rating action on the sovereign ratings
could lead to positive rating action on the city's IDR.

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

  - Negative rating action on the sovereign ratings would lead to
negative action on the city's ratings;

  - A lowering of the SCP below 'b', driven by a material
deterioration in the issuer's debt metrics, particularly payback
sustainably above 5x according to Fitch's rating case.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Public Finance issuers have a
best-case rating upgrade scenario (defined as the 99th percentile
of rating transitions, measured in a positive direction) of three
notches over a three-year rating horizon; and a worst-case rating
downgrade scenario (defined as the 99th percentile of rating
transitions, measured in a negative direction) of three notches
over three years. The complete span of best- and worst-case
scenario credit ratings for all rating categories ranges from 'AAA'
to 'D'. Best- and worst-case scenario credit ratings are based on
historical performance.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

ESG CONSIDERATIONS

The city has an ESG Relevance Score of '4' for 'Political Stability
and Rights' due to its exposure to impact of political pressure or
instability on operations and tendency toward unpredictable policy
shifts which, in combination with other factors, impacts the
rating.

COMMITTEE MINUTE SUMMARY

Committee date: April 29, 2020

There was an appropriate quorum at the committee and the members
confirmed that they were free from recusal. It was agreed that the
data was sufficiently robust relative to its materiality. During
the committee no material issues were raised that were not in the
original committee package. The main rating factors under the
relevant criteria were discussed by the committee members. The
rating decision as discussed in this rating action commentary
reflects the committee discussion.

UKRAINIAN RAILWAY: Fitch Places 'B' LT IDR on Watch Negative
------------------------------------------------------------
Fitch Ratings has placed JSC Ukrainian Railway's 'B' Long-Term
Issuer Default Rating on Rating Watch Negative.

The rating action follows the revision of the Outlook on Ukraine's
IDRs and reflects its view of UR's tightened immediate liquidity
position not fully offsetting debt servicing in 2020, underpinned
by the negative impact of the coronavirus pandemic on the nation's
economy.

UR is Ukraine's integrated railway group with core operations in
domestic freight segment.

While UR's most recently available data may not have indicated
performance impairment, material changes in revenue and cost
profiles are occurring across the sector and likely to worsen in
the coming months as economic activity suffers and government
restrictions are maintained or broadened. Fitch's ratings are
forward-looking in nature, and Fitch will monitor developments in
the sector for their severity and duration, and incorporate revised
base- and rating-case qualitative and quantitative inputs based on
performance expectations and assessment of key risks.

KEY RATING DRIVERS

The RWN reflects the company's worsened liquidity position, which
Fitch assesses as weaker. The company's access to domestic
liquidity sources could further deteriorate due to mounting
negative effects related to the coronavirus pandemic. UR's 2020
debt amortisation schedule includes repayments of up to UAH9,000.6
million by end-2020, which materially pressures its already
weakened liquidity position. As of end-April 2020, UR's liquidity
coverage ratio (available undrawn lines of credit and unrestricted
cash/scheduled repayments) was less than 1x.

The rating action also follows the revision of the Outlook on the
sovereign IDR, underpinned by re-assessed macro-projection, as the
company's ratings remain capped by that of Ukraine, unchanged since
its last review on 12 September 2019. Fitch forecasts Ukrainian GDP
to contract by 6.5% in 2020, compared with previously projected
3.2% growth in 2019, reflecting the coronavirus pandemic shock to
the global economy, containment measures and a weaker currency.

While the economy's recovery is projected in 2021 with growth of up
to 3.5%, there are material downside risks to its forecasts, given
the uncertainty around the extent and duration of the coronavirus
outbreak. Accordingly, UR's main revenue driver (the freight
segment) will be negatively affected, which Fitch factors into its
rating case scenario.

Government-Related Entity

UR's score of 27.5 under GRE Criteria is unchanged and stems from a
very strong assessment of the legal status, ownership and support
due to state full ownership and control. The score also reflects
moderate assessments for support track record expectations and
socio-political implications of default, along with strong
assessment for financial implications of default.

Standalone Rating Assessment

Fitch maintains UR's Standalone Credit Profile (SCP)at 'b'
factoring in the company's weaker assessment for revenue
defensibility and financial profile combined with a midrange
assessment for operating risk.

Financial Profile: Weaker

UR's financial profile remains exposed to commodity market and
foreign-exchange risks, along with the geo-political risks
associated with bilateral relations with Russia. UR is moderately
exposed to domestic competition in passenger transportation, while
its financial profile is supported by sizeable operations in
freight segment, where company benefits from its monopolistic
position.

The primary metric was historically sound with net
debt/Fitch-calculated EBITDA in 2019 assessed at 1.3x (2018: 2x).
Its rating case, stressed to test resilience of the primary metric
against worst case scenario, envisages material deterioration in
net debt/EBITDA in 2020 to 11.4x before improving to 10x at
end-2024. This worst-case scenario assumes substantial stress on
both operating revenue and operating expenditure underpinned by
disruptions from the coronavirus pandemic.

DERIVATION SUMMARY

Fitch rates UR based on its assessment of the company's SCP at 'b',
which combined with an assessment under GRE criteria resulting in a
score of 27.5 warrants equalisation with the Ukraine sovereign
IDR.

DEBT RATINGS

The ratings of senior debt instruments are aligned with UR's Long-
and Short-Term IDRs, including the senior unsecured debt of its
special financial vehicle companies - Shortline Plc. and Rail
Capital Markets Plc. The latter reflects Fitch's view that SPVs'
debt constitutes direct, unconditional senior unsecured obligations
of UR and ranks pari passu with all of its other present and future
unsecured and unsubordinated obligations.

KEY ASSUMPTIONS

Fitch's rating case is a "through-the-cycle" scenario, which
incorporates a combination of revenue, cost and financial risk
stresses. It is based on 2015-2019 figures and 2020-2024 projected
ratios. Its key assumptions for the ratings case are:

  - Operating revenue decline of 12.5% in 2020, with an expected
average increase of 8.2% in 2021-2024;

  - Operating expenditures growth is expected to be on average 6.8%
in 2020-2024;

  - UAH/USD exchange rate of 27.3 in 2020 and an average of 30.1 in
2021-2024.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

  - A resolution of the RWN would result from an improved liquidity
position, sufficient to service debt payments coming due in the
next 12 months.

  - An upgrade of Ukraine's sovereign rating provided there is no
deterioration in the company's SCP and scoring under GRE criteria.

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

  - A downgrade of Ukraine's sovereign rating.

  - Dilution of linkage with the sovereign resulting in the ratings
being further notched down from the sovereign.

  - Downward reassessment of the company's SCP, resulting from
declined liquidity and deterioration of financial profile with net
debt/EBITDA sustainably above 12x as per its rating case.

The debt rating is likely to move in tandem with UR's anchor IDR.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Public Finance issuers have a
best-case rating upgrade scenario (defined as the 99th percentile
of rating transitions, measured in a positive direction) of three
notches over a three-year rating horizon; and a worst-case rating
downgrade scenario (defined as the 99th percentile of rating
transitions, measured in a negative direction) of three notches
over three years. The complete span of best- and worst-case
scenario credit ratings for all rating categories ranges from 'AAA'
to 'D'. Best- and worst-case scenario credit ratings are based on
historical performance.

LIQUIDITY AND DEBT STRUCTURE

UR's immediate liquidity position is insufficient to offset
expected repayments of maturing debt in 2020. The company's
available immediate liquidity (at end-April 2020) is UAH5,743
million.

UR's total debt on its at end-2019 stabilised at UAH32,648.5
million (2018: UAH32,005.3 million). The company's 2019 debt is on
55.8% made up of Eurobonds; it is mostly in foreign currency, with
91.2% of the debt stock composed of FX-denominated instruments
(2018: 92.1%). UR's exposure to FX risk is material, as the
company's revenue stream is mostly in domestic currency.

CRITERIA VARIATION

A GRE criteria variation was applied to signal liquidity pressure
by overriding the floor that stems from the interplay of GRE
support score at 27.5 and SCP level not more than three notches
away from government's IDR.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

UR's IDRs are directly linked to Ukraine's IDRs.

Shortline Plc
  
  - Senior unsecured; LT B; Rating Watch On

Rail Capital Markets Plc  

  - Senior unsecured; LT B; Rating Watch On

JSC Ukrainian Railway

  - LT IDR B; Rating Watch On

  - ST IDR B; Rating Watch On

  - LC LT IDR B; Rating Watch On

  - Natl LT AA(ukr); Rating Watch On



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

COUNTYROUTE (A130): S&P Cuts Senior Secured Debt Rating to 'B'
--------------------------------------------------------------
S&P Global Ratings lowered its issue rating on the senior secured
debt of U.K. road operator CountyRoute (A130) PLC (ProjectCo) to
'B' from 'B+' and its issue rating on the junior debt by one notch
to 'CCC+' from 'B-'.

S&P is also revising its recovery rating on the senior debt
downward to '1' from '1+', indicating its expectation of 90%
recovery in the event of a default, and its recovery rating on the
junior debt downward to '6' from '1', indicating its expectation of
negligible recovery in the event of a default.

U.K.-based special-purpose vehicle CountyRoute (A130) PLC
(ProjectCo or CountyRoute) used the proceeds of the senior and
junior debt it issued in 2004 to refinance the original project
debt and re-profile its debt-service schedule. ProjectCo operates
under a 30-year design, build, finance, and operate concession
granted by Essex County Council (the council) in 1999 for the
15-kilometer A130 bypass that runs from Chelmsford to Basildon in
southeast England. Construction was completed in 2003.

Project revenues comprise the receipt of shadow toll payments based
on both road usage and availability. The split of these payments is
approximately 55% for road usage and 45% for availability, thereby
exposing the project to traffic risk.

Measures that governments have introduced to combat the COVID-19
pandemic are severely restricting people's movement and leading to
material traffic declines on most European road concessions.

In March 2020, the number of light vehicles on the A130 was down by
about 20% compared to March 2019, and the number of heavy vehicles
was down by 15%. S&P said, "In our base case, we assume that
lockdown policies will remain in effect across Europe for at least
two months in total, severely affecting traffic-exposed roads,
especially those relying materially on light vehicles. We forecast
that the fall in heavy vehicle traffic will be less severe, since
the movement of goods and a basic level of economic activity
continue. Even after the pandemic is contained, social-distancing
policies may continue to a certain degree. Furthermore, we now
expect a recession in the U.K. in 2020. As such, in our view,
traffic may remain subdued for at least 12 months from the date the
restrictions were first implemented."

CountyRoute's revenue to April 2021 is unaffected by variations in
traffic, but we forecast that revenue in later periods will
shrink.

Provisional payments for the current concession year are based on
projected traffic volumes in 2019-2020. The comparison between
actual and projected traffic volumes in April 2021 will give rise
to a balancing payment that S&P assumes CountyRoute will need to
make to the council under its base case.

S&P said, "We have therefore downgraded the senior debt by one
notch to 'B' from 'B+' on account of CountyRoute's increased
reliance on its reserve accounts to meet its senior debt service on
time and in full.

"Under our base case, ProjectCo will be unable to generate
sufficient operating cash flows to cover periodic payments, and we
assume that its senior annual debt service coverage ratio (ADSCR)
will be below 1.0x in September 2020, September 2021, and March
2022. During these periods, we assume that the project will service
its senior debt with the liquidity reserves available to it.
ProjectCo has retained excess cash available after senior debt
service following a breach of the contractual provisions, including
events of default. Despite this, the controlling creditors have so
far not accelerated the senior debt and have instead instructed
ProjectCo to retain cash in a mandatory prepayment reserve account
(MPRA) for the sole purpose of providing additional liquidity to
service the senior debt.

"We have also downgraded the junior debt by one notch to 'CCC+'
from 'B-' as the cash available at maturity to repay this debt in
full will depend on the operational and economic environment over
the next few years.

"CountyRoute has been deferring both interest and principal
payments on the junior debt since 2016, and we expect this to
continue until maturity. Repayment at maturity will comprise the
outstanding principal and the interest accrued on both the deferred
interest and principal. Repayment will rely on the release of cash
from senior-ranking reserves following the repayment of the senior
debt on March 31, 2026. Under our base-case and downside scenarios,
these cash reserves available at maturity are lower than we
previously forecast."

The 'CCC+' issue rating on the junior debt is based on an exception
from "Hybrid Capital: Methodology And Assumptions," published on
July 1, 2019. S&P said, "Under these criteria, the deferral of
principal repayment, even in an instrument that allows such
deferral, constitutes a default unless we expect repayment of the
deferred amounts and accrued interest within a year. In the case of
CountyRoute, we believe that principal deferral beyond 12 months
should not, in itself, be considered as a default. This is because
we still expect that the delayed payments, including the accrued
interest, will be repaid in full on the maturity date. In addition,
this is a junior tranche that was designed to act as a cushion for
the senior debt."

S&P said, "The downward revision of the recovery rating on the
junior debt to '6' from '1' reflects the revision of our recovery
rating on the senior debt to '1' from '1+'. We now expect 90%
rather than 100% recovery on the senior debt in the event of a
default, therefore negligible (0%) recovery prospects on the junior
debt."

The negative outlook reflects the risk that revenues and
cash-funded reserves could decline further if traffic volumes are
worse than S&P expects.

Although ProjectCo is not exposed to seasonal traffic and leisure
travel, it is exposed to light vehicles (85% of average traffic),
commuters, and competition from alternative routes. Therefore, the
decline and recovery in traffic will depend on the duration of the
COVID-19 containment measures and the shape of the economic
recovery. We anticipate that in 2020, the U.K. economy will
contract by 6.5%, which might have a negative impact on heavy
vehicle traffic.

Environmental, social, and governance (ESG) factors relevant to the
rating action:

-- Health and safety.

S&P Global Ratings acknowledges a high degree of uncertainty about
the rate of spread and peak of the coronavirus outbreak. S&P said,
"Some government authorities estimate the pandemic will peak about
midyear, and we are using this assumption in assessing the economic
and credit implications. We believe the measures adopted to contain
COVID-19 have pushed the global economy into recession. As the
situation evolves, we will update our assumptions and estimates
accordingly."

Senior debt

S&P said, "The negative outlook reflects our view that the
project's revenues and liquidity reserves may erode further if we
expect traffic to decline more severely, the recovery to be
lengthier, or the macroeconomic conditions to be worse than we
anticipate.

"We could also take a negative action if, in our view, John Laing's
credit quality could deteriorate. Additionally, we could lower the
issue rating if we see an increased risk of the controlling senior
creditor accelerating the repayment of the senior debt. A lack of
exhaustive information evidencing the controlling creditor's
decision to waive the debt's early repayment could suggest an
increased risk of acceleration.

"We could revise the outlook to stable should traffic volumes
normalize following the relaxation of social-distancing measures
and should the project's financial profile improve. This could
happen, for example, if traffic volumes recover more quickly than
we expect, or if the council grants some form of relief for the
traffic decline in 2020. The financial profile could also improve
if major maintenance (lifecycle) expenditure falls significantly
following a re-profiling of the lifecycle budget."

Junior debt

The negative outlook reflects an increased risk that the release of
cash into the reserve accounts may not be sufficient to repay the
junior debt in full at maturity, including the interest on all the
deferred payments. This could occur, for example, if traffic
volumes are noticeably lower than S&P's base-case expectations, and
if ProjectCo uses the reserve accounts more than it anticipates to
support the senior debt service over the remaining life of the
debt.

S&P could revise the outlook to stable if it expects the project to
have access to a solid and stable liquidity base at the time it
needs to service the junior debt.


EG GROUP: Fitch Cuts LT IDR to 'B-', Outlook Stable
---------------------------------------------------
Fitch Ratings has downgraded EG Group Limited's Long-Term Issuer
Default Rating to 'B-' from 'B'. The Outlook is Stable. Fitch has
also downgraded EG's senior secured rating to 'B' from 'B+',
second-lien rating to 'CCC' from 'CCC+', and EG Global Finance's
senior secured rating to 'B' from 'B+'.

The downgrade of the IDR is driven by slower than anticipated
deleveraging to a level consistent with 'B' rating, amid the impact
of the coronavirus outbreak, following a period of successive
mainly debt-funded acquisitions. The Stable Outlook is supported by
its view of sufficient liquidity over the next 12-18 months to
withstand a slower recovery post lockdown.

The rating incorporates the group's position as a leading global
petrol filling station (PFS)/ convenience store/food-to-go operator
with operations in Western Europe, US and Australia, which aside
from the aggressive capital structure and financial discipline
considerations, would lead to a higher rating.

KEY RATING DRIVERS

Significant Coronavirus Impact: Fitch expects a significant revenue
and volume impact during the lockdown period, with around a 50%
drop in fuel volumes (relative to 2019's pro-forma figures), a 20%
fall in retail revenues and a 100% decline in FTG business during
the three months (2Q) lockdown period as per Fitch's base case
scenario. EG has temporarily closed most of its FTG sites in Europe
and North America since the beginning of the respective lockdowns.

Fitch forecasts a gradual recovery from July onwards, with overall
fuel volumes around 25% below pro-forma figures, and overall retail
and FTG revenues, 10% and 35% lower, respectively, for 2020. Fuel
volumes in 2021 are expected to be 5% below FY19 pro-forma
indicative of the recovery in GDP for each jurisdiction.

Organic Deleveraging Disrupted: Funds from operations adjusted
gross leverage is set to remain above levels consistent with a 'B'
rating due to coronavirus disruption, at 8.6x for 2021, from 12.0x
in 2019. This compares with its prior forecast of 6.8x for 2021 and
a negative downgrade trigger of 7.5x. The pandemic exacerbates
already elevated leverage metrics following a period of successive
mainly debt-funded acquisitions, with organic deleveraging hindered
by the drop in fuel volumes and retail revenues on a pro-forma
basis, as well as delaying realisation of margin synergies central
to EG's ability to deliver.

Deleveraging beyond 2021 is contingent on achieving planned
synergies and pausing M&A. Its base case scenario sees the
cumulative impact of the COVID-19 disruption on operations
generating a capital requirement in 2021 or 2022 if the group
decides to resume any meaningful acquisition activity.

Refinancing Risk Remains High: Fitch considers refinancing risk as
having increased in light of the large revolving credit facility
draw in 4Q19 and the current disruption to operations that is
sustaining elevated leverage. However, any refinancing needs should
be manageable as only the group's RCF matures in 2022. The
prospects for deleveraging capabilities and future financial
discipline will dictate longer-term refinancing risks ahead of
major debt maturities scheduled in 2025.

Sufficient Liquidity: Under a scenario of three-month lockdowns, EG
has sufficient flexibility to navigate the crisis due to its
liquidity position (EUR425 million cash on balance sheet and about
EUR100 million of available facilities as at 16 April 2020) and the
ability to reduce or delay near-term cash outflows during 2020.
Payroll has been flexed through the ability to furlough staff and
varying labour hours to reflect the level of demand at particular
sites, with government payroll support provided in some
jurisdictions, and tax deferrals.

Discretionary capex has been tapered, contributing to a total
EUR200 million capex for the year under its base case. Fitch also
expects EG to continue leveraging its scale and long-term
relationships with suppliers to secure extended payment terms
during 2Q.

Leading Global PFS Operator: The rating remains fundamentally
supported by the group's position in western Europe and the US as a
leading PFS and convenience retail/ FTG operator, following the
acquisition of Esso petrol stations in Germany and Italy and the
Kroger Co. and Minit Mart US acquisitions in 2018. Together with
the purchase of Woolworths Australia's 540 PFS in Australia and 567
Cumberland PFS in 2019, these acquisitions will push fuel sales
volumes to around 23 billion litres a year on pro-forma basis,
realised in 2022 under its base case. Increased purchasing scale,
positions EG to benefit from a stronger negotiating position on
fuel contracts with oil majors.

Changing, Sustainable Business Model: EG has evolved from a small,
entrepreneurial group into a major global fuel, retail and FTG
operator in less than three years, with over 6,000 sites. The
industry is concentrated and undergoing further consolidation in
most of EG's mature market geographies (Italy, Germany, the UK and
France) as a result of a decline in global fuel volumes of around
1% a year. The group remained highly acquisitive in 2018 and 2019,
as the PFS sector consolidates, while developing its convenience
and FTG formats in Europe, the US and Australia - the markets with
the greatest growth potential.

Challenging Execution Risks Mitigated: EG's enlarged scale and
market reach gained over a relatively short period indicate
inherently high execution risks to achieving a robust business
model. Although a strong acquisitive strategy has required changes
and upgrades to management's staffing and control functions across
the wider group, which are well underway, high leverage means that
the current rating does not support further significant debt-funded
acquisitions until there is clear evidence of achievement of
cost-saving targets from the most recent acquisitions. However,
this is mitigated by EG's record of integrating previous
acquisitions, identifying margin improvements and cost-saving
opportunities on a lower scale.

DERIVATION SUMMARY

EG's 'B-' IDR reflects the group's leading market position as an
independent petrol station operator in Europe and the US, with
diversification towards the more profitable non-fuel retailing and
FTG segments. However, the impact of the COVID-19 disruption will
impair the organic deleveraging capability, after two predominantly
debt-funded US and Australian acquisitions in 2019. It is likely
the group's annualised FFO-adjusted gross leverage will remain
above 8.5x into 2021, FFO fixed-charge cover below 2.0x, and free
cash flow generation relatively muted.

The majority of EG's business is broadly comparable with other
peers that Fitch covers in its food/non-food retail rating and
credit opinions portfolios, although the company owned company
operated operating model should provide more flexibility and
profitability for EG.

With around 300 highway sites, EG can also be compared with
motorway services group Moto Ventures Limited (B-/Stable), and to a
lesser extent with emerging markets oil products
storage/distributors/PFS vertically integrated operators such as
Puma Energy Holdings Pte Limited (BB-/Stable) and Vivo Energy Plc
(BB+/Stable). Moto displays slightly higher leverage than EG,
although it benefits from an infrastructure-like business profile
as it operates in a regulated market with high barriers to entry
that Fitch believes are more defensive than that of EG. In
contrast, EG is more geographically diversified with exposure to
both the US and Australian markets and a strong market share in
seven western European countries, against only one in Moto's case

KEY ASSUMPTIONS

Fuel volumes and retail revenues to recover towards 95% of the
group's pro-forma position at 2019, by 2021;

EBITDA margin stabilising in 2020 at 3.7%, and improving towards
4.5% in 2021;

Discretionary capex tapered culminating in a total EUR200 million
in 2020, rising to EUR500 million in 2021 to compensate for 2020's
lower spend and regulatory requirements relating to some projects;

Cumulative working capital cash outflow of about EUR100 million in
2020, normalising by 2021;

No M&A envisaged in 2020, with the cumulative impact of COVID-19 on
operations generating a capital requirement in 2021 to fund a
meaningful level of acquisitions for the group.

No dividends

KEY RECOVERY RATING ASSUMPTIONS

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

Fitch has applied a discount of 25% to Fitch-estimated EBITDA
including annualised earnings of all 2019 acquisitions and the
realisation of a reasonable amount of planned synergies associated
with recent acquisitions resulting in around EUR1,300 million of
starting EBITDA, to derive a post-restructuring EBITDA of around
EUR975 million. Fitch estimates that such a discount would lead to
the group becoming FCF-neutral, with an unsustainable capital
structure.

In a distressed scenario, Fitch believes that a 5.5x multiple
reflects a conservative view of the weighted average value of EG's
portfolio. By comparison, Moto's 7.5x distressed multiple reflects
the regulated nature of the market, the high quality and strategic
importance of the company's highway sites and infrastructure-like
cash-flow profile.

As per its criteria, Fitch assumes EG's RCF and local-currency debt
facilities to be fully drawn and takes 10% off the enterprise value
to account for administrative claims.

Its waterfall analysis generated a ranked recovery for the senior
secured facilities, in the 'RR3' band, indicating a 'B' instrument
rating, a one notch downgrade in line with IDR. The waterfall
analysis output percentage on current metrics and assumptions
remains unchanged at 55%.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

A recovery post COVID-19 disruption that organically increases
EBITDA to around EUR1.2 billion in tandem with a commitment to a
financial policy, which together bring FFO lease-adjusted gross
leverage to 7.5x or below on a sustained basis;

FFO fixed-charge cover of 2x or higher on a sustained basis;

Progress towards RCF refinancing or extension to help support
available liquidity.

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

Weak post COVID-19 disruption recovery with EBITDA still below EUR1
billion by 2021;

FFO lease-adjusted gross leverage increasing to above 9x in 2021 on
a sustained basis;

FFO fixed-charge cover sustainably below 1.5x, along with
deteriorating liquidity amid a prolonged coronavirus lockdown well
into 3Q20 across its territories.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.

LIQUIDITY AND DEBT STRUCTURE

Satisfactory Liquidity: In 4Q19, EG drew down extensively on its
multi-currency RCFs: EUR360 million of the EUR450 million total
available, due to lower cash generation related to a squeeze on
fuel margins in the fourth quarter. Nevertheless, during the
COVID-19 disruption, EG has secured an incremental RCF of around
EUR50 million and has an undrawn overdraft facility of EUR50
million. Beyond securing further liquidity, EG is able pull more
levers via cutting opex, non-essential capex and leveraging their
scale to improve working capital. EG has a sufficient liquidity
position (EUR425 million cash on balance sheet and about EUR100
million of available facilities as at 16 April, 2020) to navigate
the pandemic crisis, with only EUR50 million maturities in 2020.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

ESG CONSIDERATIONS

The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).

ENGINE GROUP: Bank Debt Trades at 35% Discount
----------------------------------------------
Participations in a syndicated loan under which Engine Group
Ltd/The is a borrower were trading in the secondary market around
66 cents-on-the-dollar during the week ended Fri., May 1, 2020,
according to Bloomberg's Evaluated Pricing service data.

The $174 million facility is a term loan.  The loan is scheduled to
mature on September 15, 2022.   About $152.3 million of the loan
remains outstanding.

The Company's country of domicile is Britain.


FOOTASYLUM: CMA Blocks JD Sports' Move to Acquire Business
----------------------------------------------------------
Elias Jahshan at Retail Gazette reports that the UK's peak
competition watchdog authority has blocked JD Sports' move to buy
rival Footasylum for GBP90 million, 14 months after the takeover
deal was first agreed.

According to Retail Gazette, following an in-depth Phase II
investigation, the CMA concluded that the takeover would lead to "a
substantial lessening of competition".

It said shoppers would be left with "fewer discounts or receiving
lower quality customer service", Retail Gazette relates.

In reaching this final decision, the CMA, as cited by Retail
Gazette, said it analysed a wide range of evidence looking at how
closely JD Sports and Footasylum firms compete as well as
competition from other retailers, and the constraint from suppliers
like Nike and Adidas.

The CMA said evidence included more than 2000 of the companies' own
internal strategy and decision-making documents, which showed that
JD Sports and Footasylum monitor each other's activity closely,
Retail Gazette notes.

The competition authority also determined that Footasylum store
openings negatively impacted footwear and clothing sales at nearby
JD Sports stores, Retail Gazette relays.

As a result, the CMA said its independent inquiry groups decided
that the only way to address the competition concerns was for JD
Sports to sell Footasylum in full -- to an approved buyer, Retail
Gazette notes.

JD Sports hit back at the CMA's final report, saying that it
"materially fails to take proper account of the dynamic and rapidly
evolving competitive landscape" in which the retailers operate,
Retail Gazette recounts.

With direct competitors such as Sports Direct elevating its
propositions to compete even more closely with JD Sports, alongside
the marked acceleration in Adidas and Nike's direct-to-consumer
growth strategies, JD Sport, as cited by Retail Gazette, said the
CMA "failed to properly understand" these trends and "completely
dismissed" any evidence which goes against their "prejudged and
erroneous interpretation" of the sportswear retail sector.

According to Retail Gazette, JD Sports also suggested that
Footasylum's "weakened financial position" in the wake of the
coronavirus pandemic may mean it would not be enough to attract a
buyer as per the CMA's instructions, and warned it could exit the
market completely.

This downward trend is especially pertinent for Footasylum, which
was in a weakened financial position at the time of the
acquisition, is heavily dependent on sales from its physical store
estate, and which, without JD's financial backing, may well have
been forced to exit the market, joining the long list of retail
casualties we've already seen during the current crisis, Retail
Gazette says.


MCLAREN HOLDINGS: Moody's Cuts CFR to Caa2, Outlook Negative
------------------------------------------------------------
Moody's Investors Service has downgraded the corporate family
rating of McLaren Holdings Limited to Caa2 from B3 and the
probability of default rating of the company to Caa2-PD from B3-PD.
Concurrently, Moody's has downgraded the instrument ratings on the
senior secured notes issued at McLaren Finance PLC to Caa3 from B3.
The outlook is negative.

RATINGS RATIONALE

The downgrade reflects the rapidly eroding liquidity profile of the
company with GBP155 million of total liquidity as of 20 April 2020
according to the company [1]. The company now expects a severe
liquidity crunch in the next months and is exploring its options in
this regard including working capital funding and covenant waivers.
Moody's believes that additional funding is required and the
outcome of the company's efforts to obtain funding as well as the
outcome of discussions with lenders highly uncertain.

McLaren planned a volume reset in the first quarter of 2020 to
ensure the right supply and demand balance. This together with the
coronavirus outbreak and related financial impact have caused the
liquidity profile to erode. While the liquidity profile as of 20
April 2020 is only slightly below the level at year end 2019, this
implies that an amount similar to the GBP300 million received from
shareholders in March 2020 has already left the business. The
company also largely drew the revolving credit facility and a
covenant breach in the second quarter appears likely.

McLaren is impacted by the coronavirus outbreak and related
economic developments in several ways. With dealerships largely
closed in many key regions currently, sales are weak in a quarter
that otherwise would have been an important sales quarter. In
addition, the company's production is currently shut down while
longer lead times for suppliers mean the company is facing
significant working capital outflows, possibly exacerbated by the
lack of receivables to use for trade finance. A reduction in prize
money related to the 2020 Formula One season is also likely.

The downgrade of the instrument ratings to Caa3 additionally
reflects the subordination to the large and now likely fully
required revolving credit facility and large required cash outflow
to suppliers in the current environment. It also reflects the
possibly increasing use of working capital funding as one of the
options considered by the company.

The negative outlook reflects the high degree of uncertainty
regarding the company's liquidity position and financial
performance outlook for 2020 and beyond.

Environmental considerations are relevant for auto manufacturer as
tightening of emissions standards and regulations across most major
markets restrict the ability to reduce certain investments.
However, Moody's also notes that McLaren as a smaller, luxury and
high-end focused producer is not exposed to the same severity to
these environmental risks as larger mass manufacturers, for example
regarding regulation. Sector specific social considerations are
also important, for example changing consumer trends can affect
demand. Moody's also regards the coronavirus outbreak as a social
risk under its ESG framework, given the substantial implications
for public health and safety. Governance factors considered also
include a tolerance for high leverage and debt-funded expansion.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

The rating could be further downgraded if the company is unable to
secure sufficient funding to bridge its current liquidity shortfall
in the coming weeks. A more extended shutdown of production and
dealerships could also lead to a downgrade. Conversely, the outlook
could be stabilized if liquidity substantially improves and
performance, both in revenue and EBITDA terms as well as cash
flows, return to more normalized levels (including Formula One). An
upgrade would require Moody's-adjusted debt/EBITDA to fall towards
7.0x, a sufficient liquidity profile and at least breakeven free
cash flow (after, capital expenditures and interest).

PRINCIPAL METHODOLOGY

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

McLaren Holdings Limited is a holding company whose subsidiaries
collectively form the McLaren Group, a UK-based manufacturer of
luxury cars and an active participant in high-performance racing
primarily Formula One. Additionally, the group leverages its
technologies to industrial customers through its McLaren Applied
segment.

MOTO VENTURES: Fitch Cuts LT IDR to 'B-', Outlook Stable
--------------------------------------------------------
Fitch Ratings has downgraded Moto Ventures Limited's Long-Term
Issuer Default Rating to 'B-' from 'B'. The Outlook is Stable.
Fitch has also downgraded Moto's GBP150 million second-lien debt
rating to 'CCC+'/RR5/23%, from 'B+'/RR3/51%.

The downgrade is driven by slower deleveraging to a level
consistent with a 'B' rating than Fitch had anticipated, amid the
severe impact from the coronavirus pandemic, a period of
expansionary capex and a historically generous shareholder
remuneration policy, which resulted in tight rating headroom. The
rating remains supported by a stable business model with steady
earnings and operating cash flow.

The Stable Outlook is supported by its view of sufficient liquidity
over the next 12-18 months to withstand a slower recovery post
lockdown. Refinancing risk has increased, as reflected in the
downgrade, but key debt maturities are still 23 to 28 months away.

The downgrade of the second-lien rating is driven by its
expectation of an additional GBP83 million in senior debt,
following its expectation of additional capex-line drawdown in
2020, and a new senior debt facility to boost liquidity, leading to
lower recoveries for second-lien creditors in the event of default.
A permanent reduction in senior debt could, however, support or
lead to an upgrade of the second-lien debt rating.

KEY RATING DRIVERS

Revenue Down on Coronavirus Pandemic: Fitch expects significantly
lower revenue and volume due to the pandemic-related lockdown in
the UK, with around a 68% drop in fuel volume, a 75% fall in retail
revenue and a 100% decline in the food-to-go business during the
three-month lockdown period to June 2020 under its base-case
scenario. Moto has cut services at its motorway-service area since
the start of the lockdown, keeping open only its fuel operations,
including forecourt shops, its retail (WH Smith) and most of its
food retail stores (M&S).

Fitch forecasts a gradual recovery from July, with 2020 revenue
down by around 28% from 2019, although the recovery of the
higher-margin catering segment is likely to be marginally slower
due to its more discretionary nature. Growth in 2021, which Fitch
expects to be 7% down from 2019, would be affected by a slow GDP
recovery.

Slower Deleveraging amid Pandemic: FFO adjusted gross leverage,
which Fitch forecasts at 8.1x in 2021, exceeds the level that is
consistent with a 'B' rating due to the pandemic-related
disruption. This compares with its prior forecast of 6.9x for 2021
and 6.6x for 2022 with a downgrade sensitivity of above 7.5x. The
pandemic has exacerbated the already-elevated leverage metrics due
to a period of expansionary capex and favourable shareholder
remuneration.

Refinancing risk has also increased, with debt maturities between
March and October 2022. A robust business model, cash generation
and debt repayment capability support refinancing, albeit at a
potentially higher cost. Fitch expects a senior debt covenant
breach will be waived for 2020; Fitch assumes no dividend payments
and some debt prepayment of GBP41 million from excess cash flow in
2021 due to lock up covenants.

Sufficient Liquidity: Moto has sufficient flexibility to weather a
three-month lockdown due to its satisfactory liquidity position,
with GBP39 million in cash at end-2019, GBP10 million in revolving
credit facility and a recently signed new GBP50 million senior
facility. It also has the ability to lower cash outflows.
Mitigating actions, amounting to around GBP12 million a month,
include UK government support to cover 80% of furloughed staff
wages, a 12-month business-rates holiday and a reduction in
variable costs.

Its cash flow forecast includes continued expansionary capex. Moto
retains sufficient liquidity in a downside scenario where activity
levels recover by 50% only in 4Q20, with a cash balance of around
GBP20 million at the end of 2020.

Stable Operation: Moto's rating remains anchored around its stable
business model, particularly its exposure to less-discretionary
motorway retail, although the segment remains linked to GDP and
traffic volume. The company has the largest national network of
motorway service areas, a favourable regulatory environment and
well-managed franchise portfolio. The stable operating risk profile
is evidenced by a history of steadily improving EBITDA and margins
and its expectations of Moto's Fitch-defined EBITDA margin rising
to 14.2% by 2022 (14.6% previously), from 13.1% in 2018, supported
by the medium-term asset-development plan around existing and new
sites.

Low, Steady Sales Growth: Fitch expects non-fuel 2021 revenue to
remain around 5% below 2019 levels, with single-digit growth
thereafter. The better revenue mix and continued effort to improve
productivity are contributing to steady profitability. Moto's gross
margin should strengthen from its investment in catering amenities,
which it operates under retail franchises, such as Greggs, Burger
King and WH Smith. Fitch thinks the gross-margin improvement should
be achievable due to better labour scheduling, despite rising wage
inflation in the UK.

Fuel Volume Fall: Fitch expects 2021 fuel volume to be 10% below
the level in 2019, with low-single-digit growth thereafter. Fitch
believes Moto will be able to marginally increase its margin per
litre and should preserve its fuel gross margin, which comprises
26% of total gross profit. The margin was maintained in 2019 due to
a higher margin per litre, despite fuel volume falling by around 5%
from better vehicle fuel efficiency, hybridisation, careful
consumer spending and Brexit-related uncertainty.

Quasi-Infrastructure Asset: Moto's business model is characterised
by its stable operating cash flow generation and low underlying
capital maintenance needs, which support the group's credit
profile. Meanwhile, capital expenditure will be covered by
drawdowns from the capex facility, which its projects could be
almost fully drawn by March 2022 when the facility matures.

DERIVATION SUMMARY

Moto's downgrade reflects its elevated leverage, which will remain
above its sensitivity in 2021; Fitch forecasts leverage of above 8x
on a FFO gross basis in 2021 after the pandemic pressure and just
ahead of the March 2022 maturity of Moto's first-lien debt. The
Stable Outlook reflects satisfactory liquidity to withstand a more
pronounced pandemic impact than Fitch presently anticipates. It
also encompasses Moto's infrastructure-like business profile and
operations in a regulated market with high entry barriers and
limited competitive pressure. Fitch expects Moto's performance to
be more resilient through the cycle once social-distancing measures
are relaxed, reflecting the less-discretionary nature of motorway
customers. Most of these features are also present in Autobahn Tank
& Rast GmbH, Germany's largest MSA operator.

Fitch expects Tank & Rast's revenue to be less affected by the
pandemic, with an expected 15% fall in 2020, versus 28% for Moto.
Tank & Rast follows a landlord-tenant model whereby it subleases it
sites in exchange for monthly fixed and variable-lease payments,
with most operating costs passed on to tenants. This provides high
revenue and profit visibility. Capex intensity is low, translating
into healthy free cash flow generation. This compares with Moto's
owner/operator business model, which provides high flexibility to
manage and control all commercial activity at its sites, but leads
to lower profit margins and weaker FCF than at Tank & Rast.

Revenue at petrol-station operator, EG Group Limited (B/Stable), is
likely to fall by less than at Moto. EG Group has better
geographical diversification than Moto's concentration in the UK,
lowering its exposure to lockdown periods due to the pandemic. EG
Group is also keeping its retail operation open, while Moto has
closed its catering and amusement services. Both companies rely on
non-fuel operations to improve margins and their financial profiles
have similarly high leverage. Moto is positioned at more strategic
and protected motorway locations, but its rating is constrained by
its smaller scale and concentrated UK-only footprint. Both groups
have pursued aggressive financial policies that influence their
ratings; for Moto, this was reflected in regular dividend
distributions, which are allowed by the lock-up mechanism in its
debt documentation and are partly covered by FCF. Meanwhile, EG
Group has followed an aggressive debt-funded M&A strategy that
relies on synergy realisation to ensure long-term deleveraging.

KEY ASSUMPTIONS

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

  - Revenue decline of 28% in 2020, assuming a three-month lockdown
followed by a partial and slow recovery in activity. Fitch expects
non-fuel revenue to reach 95% of 2019's level in 2021 and 100% in
2022;

  - Fuel volume to decline by 25% in 2020, with bunker fuel volume
holding up better. Fitch expects volume to increase to 90% of
2019's level in 2021;

  - EBITDA recovering to 2019's level by 2022 only; Fitch expects a
further increase post-2022, driven by capital investment;

  - Capex reduced by around GBP25 million across 2020-22, including
continued expansionary capex supported by drawdowns under the capex
facility;

  - Prepayment of GBP41 million of senior debt in 2021, matching
excess cash flow under the lock-up covenants;

  - No shareholder distributions in 2020 or 2021, as Fitch expects
the lock-up test will be in breach

Recovery Assumptions:

According to its bespoke recovery analysis, higher recoveries would
be realised using a going-concern approach, despite Moto's strong
asset backing. Better recovery expectations by preserving the
business model, as opposed to liquidating its balance sheet,
reflect Moto's structurally cash-generative business and
well-managed franchise portfolio. Fitch has assumed a 10%
administrative claim.

Fitch assumes a GBP93 million going-concern EBITDA, implying an 18%
discount (unchanged from its previous analysis) to FY19 EBITDA
increased by the expected EBITDA accretion from new sites operating
by 2022. This compares with a post-distress EBITDA estimate of
around GBP87 million in its previous analysis. Fitch maintains the
7.5x EV/EBITDA multiple in distress given the infrastructure-like,
regulated nature of Moto's business.

The second lien notes rank behind a sizeable amount of GBP593
million of first-lien bank debt - this includes a GBP450 million
term loan B, recently secured additional senior debt of GBP50
million as well as Moto's GBP10 million RCF (both assumed fully
drawn upon default) and around GBP83 million assumed drawn under
its capex facility over 2020 (versus GBP56 million drawn by FYE19).
Its waterfall analysis generated a ranked recovery in the 'RR5'
band, indicating a 'CCC+' instrument rating for the GBP150 million
second-lien notes. The waterfall analysis output percentage on
current assumptions stands at 23%, down from the previous 51%.

The output percentage and hence recovery rating on the second-lien
debt is sensitive to even small movements in the assumptions
related to underlying going-concern EBITDA estimate and changes in
first-lien drawn debt.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:

  - Full recovery of non-fuel gross profit margin and sales level
after the pandemic, together with the additional positive
contribution from new sites, driving EBITDA towards GBP110 million

  - Decline in FFO adjusted leverage to 7.5x or below on a
sustained basis

  - FFO fixed charge cover of 2x or higher on a sustained basis

  - Progress towards debt refinancing or maturities extension

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:

  - Prolonged lockdown and shop closure beyond June 2020 or
continued social-distancing measures hampering the prospect of an
activity rebound in 2021

  - FFO adjusted leverage increasing to above 9x for a sustained
period

  - FFO fixed charge cover weakening to below 1.5x for a sustained
period, along with a deteriorating liquidity buffer amid a
prolonged pandemic-related lockdown

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.

LIQUIDITY AND DEBT STRUCTURE

Satisfactory Liquidity: Fitch views Moto's liquidity as
satisfactory following the signing of a new GBP50 million senior
facility. This allows the company to fund the liquidity shortfall
it expects towards the end of the lockdown period and provides a
satisfactory buffer should the recovery take longer than Fitch
expects. Fitch believes the company can rebuild its cash position
quickly once activity resumes, as a breach of its lock-up covenant
restricts it from making dividend distributions. The company had a
reported cash balance of GBP39 million at end-2019, of which Fitch
estimates GBP5 million was restricted, with no scheduled maturities
in 2020.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

ESG CONSIDERATIONS

The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).

NEWDAY PARTNERSHIP 2015-1: Fitch Affirms Class F Notes at BB-sf
---------------------------------------------------------------
Fitch Ratings has affirmed NewDay Partnership Funding's Series
2015-1, Series 2017-1, Series VFN-P1 V1 and V2 notes. Fitch has
revised the Outlooks on notes rated below the investment grade to
Negative from Stable. The Negative Outlook reflects that ratings
could be negatively affected in the event of a severe and prolonged
economic stress caused by the coronavirus pandemic that materially
affects the trust's long-term performance. Notes that have
investment-grade ratings have Stable Outlooks.

NewDay Partnership Funding      

  - Series 2015-1; Class A XS1134518155; LT AAAsf; Affirmed

  - Series 2015-1; Class B XS1134518668; LT AAsf; Affirmed

  - Series 2015-1; Class C XS1134519393; LT Asf; Affirmed

  - Series 2015-1; Class D XS1134523239; LT BBB+sf; Affirmed

  - Series 2015-1; Class E XS1134528626; LT BBB-sf; Affirmed

  - Series 2015-1; Class F XS1134535597; LT BB-sf; Affirmed

  - Series 2017-1; Class A XS1674677767; LT AAAsf; Affirmed

  - Series 2017-1; Class B XS1674678492; LT AAsf; Affirmed

  - Series 2017-1; Class C XS1674678575; LT A-sf; Affirmed

  - Series 2017-1; Class D XS1674678732; LT BBBsf; Affirmed

  - Series 2017-1; Class E XS1674678815; LT BBsf; Affirmed

  - Series 2017-1; Class F XS1674678906; LT B+sf; Affirmed

  - Series VFN-P1 V1; Class A; LT BBBsf; Affirmed

  - Series VFN-P1 V1; Class E; LT BBsf; Affirmed

  - Series VFN-P1 V1; Class F; LT Bsf; Affirmed

  - Series VFN-P1 V2; Class A; LT AAAsf; Affirmed

  - Series VFN-P1 V2; Class B; LT AAsf; Affirmed

  - Series VFN-P1 V2; Class C; LT A-sf; Affirmed

  - Series VFN-P1 V2; Class D LT BBBsf; Affirmed

  - Series VFN-P1 V2; Class E LT BBsf; Affirmed

  - Series VFN-P1 V2; Class F; LT Bsf; Affirmed

TRANSACTION SUMMARY

The notes are collateralised by a pool of UK co-branded credit
card, store card and instalment loan receivables originated by
NewDay Ltd. The receivables arise under a number of retail
agreements, including with Debenhams, the Arcadia Group, House of
Fraser and Laura Ashley. NewDay is one of the largest specialist
credit card companies in the UK, where it is also active in the
non-prime credit card market. However, the latter receivables,
primarily originated under NewDay's own brands, do not form part of
this securitization. The master trust programme has a linked note
issuance structure.

KEY RATING DRIVERS

Co-Branded Card Portfolio

The pool primarily consists of co-branded credit card receivables
(85% by balance at end-March 2020), and store card receivables
(15%). The co-branded credit cards are general purpose not limited
to the stores of a specific retailer, and use payment systems such
as MasterCard or Visa. In contrast, store cards operate exclusively
within the retailer's network.

Receivables related to the retailer agreement with Debenhams
accounted for 68% of the pool by balance at end-March 2020. The
rest includes Arcadia Group (15%), House of Fraser (8%) and Laura
Ashley (7%). Receivables originated under new retail agreements may
also be added to the trust during the life of the transaction.
Adding receivables linked to a new retailer is subject to rating
confirmation.

In Fitch's opinion, the customer demographic of a given retailer
will be the key performance driver of the related receivables.
Clearly outlined and implemented credit guidelines, combined with a
state-of-the-art scoring model, minimise this risk, but in Fitch's
view the risk of credit quality migration cannot be entirely
eliminated. Furthermore, fully levelling the performance between
retailers is unlikely to be in the commercial interests of the
originator. Therefore, Fitch derived its steady-state assumptions
on the basis of a changing retailer mix.

The transaction faces the risk of retailer concentration in
addition to a changing portfolio composition. Independently of
cardholders' credit characteristics, card utility and therefore
receivables performance is substantially linked to the continued
use of the card. This applies more to store cards than credit
cards. Fitch has considered this when setting the portfolio's
stress assumptions.

COVID-19 Related Stresses

Fitch assesses the impact of the COVID-19 pandemic under a baseline
scenario and a downside scenario, with steady-state assumptions
based on a forward-looking expectation covering the next five years
and the transaction's amortization phase.

Under the baseline scenario, the economic recession and increased
unemployment would impair borrowers' capacity to make payments, but
Fitch does not expect the stress weighing on the trust's
performance to be long term. Fitch keeps asset assumptions for the
trust unchanged. The portfolio's charge-off rate (4.5% at end-March
2020) has remained well below Fitch's 8% steady state assumption
due to the most recent years' benign economic conditions, which
provides space for potential deterioration before reaching the
long-term steady state level.

The portfolio's charge-off rate is likely to increase and could
exceed the steady-state level due to the coronavirus pandemic, but
Fitch's analytical approach aims to look through short-term
performance fluctuations: changes to steady-state assumptions would
only be considered if trust performance were expected to re-set to
materially different levels more permanently. Similarly, Fitch
expects the trust's monthly payment rate to fall and the yield is
also likely to decline in the short run, also taking into account
the potential impact from payment holidays, but they could revert
afterward. Fitch expects a significant temporary reduction in card
utilization as a result of the COVID-19 containment measures.

In revising the Outlooks on non-investment-grade ratings to
Negative, Fitch acknowledges the increased risk of a more prolonged
period of below-trend economic activity. Re-emergence of infections
would prompt extensions or renewal of lockdown measures. The trust
could be more sensitive to this than high street banks' credit card
portfolios due to its exposure to partner retailers, which are
"non-essential" establishments. Fitch expects the trust to
experience volatile performance even after containment measures are
lifted as the COVID-19 impact is weighing on already struggling UK
high street retailers.

Under a downside scenario, which envisions a longer-lasting wealth
shock with wage declines and job losses, the trust's performance
could be materially affected. Fitch expects notes rated below
investment grade to be more affected by revisions of asset
assumptions.

A struggling retailer need not lead to a material increase in
charge-offs of related receivables as long as the servicer remains
attuned to the risk that some cardholders may believe repayment is
not required when a retailer is in difficulties. However, the trust
could still be exposed to changing borrower behaviour with reduced
payment rates as the co-branded cards could become a lower payment
priority due to less ongoing utility.

Key Counterparties Unrated

The NewDay Group acts in several capacities through its various
entities, most prominently as originator, servicer and cash manager
to the securitisation. In most other UK trusts, these roles are
fulfilled by large institutions with strong credit profiles. The
degree of reliance is mitigated in this transaction by the
transferability of operations, agreements with established card
service providers, a back-up cash management agreement and a
series-specific liquidity reserve.

Liquidity Risk Mitigated

On April 9, 2020, the Financial Conduct Authority confirmed its
rules on a temporary payment freeze for up to three months for
credit cards. Lengthy payment holidays could expose credit card ABS
to liquidity risk. However, Fitch views the liquidity risk as
sufficiently mitigated for this transaction. Historical performance
data shows the availability of excess spread, which will provide
protection against a substantial take-up of payment holidays.

Principal collections can also be used to cover senior fees and
interest payments if they are not sufficiently covered by the
finance charge collections. In addition, the transaction has funded
liquidity reserves, which could cover current interest payments for
the class A to D notes and senior expenses for more than six
months.

Negative Asset Performance Outlook

Fitch has a negative asset performance outlook for the UK consumer
ABS sector. This outlook reflects the economic impact from the
coronavirus pandemic, and the heightened uncertainty and urgency
about Brexit negotiations.

Steady State:

Annualized Charge-Offs - 8.00%;

Monthly Payment Rate - 20.00%;

Annualized Yield - 22.00%;

Base Purchase Rate - 100.00%.

Rating Level Stresses (for
'AAAsf'/'AAsf'/'Asf'/'BBBsf'/'BBsf'/'Bsf', respectively):

Charge-Offs (increase) - 5.00x/4.00x/3.25x/2.50x/1.75x/1.25x;

Payment Rate (% decrease) -
55.00%/50.00%/45.00%/40.00%/30.00%/20.00%;

Yield (% decrease) - 35.00%/30.00%/25.00%/20.00%/17.50%/15.00%;

Purchase Rate (% decrease) -
100.00%/85.00%/75.00%/65.00%/55.00%/45.00%.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

Long-term asset performance deterioration, such as increased
charge-offs, reduced MPR or reduced portfolio yield, which could be
driven by changes in portfolio characteristics, macroeconomic
conditions, business practices, credit policy or legislative
landscape, would contribute to negative revisions of Fitch's asset
assumptions that could negatively affect the notes' ratings.

Fitch conducted rating sensitivity analysis on the closing date of
each series of notes, which provides insight into the model-implied
sensitivities the transaction faces when one assumption is modified
while holding others equal. It shows rating sensitivities to
increased charge-off rate, reduced monthly payment rate and reduced
purchase rate.

Coronavirus Downside Scenario Sensitivity: Fitch has added a
coronavirus downside sensitivity analysis that contemplates a more
severe and prolonged economic stress caused by a re-emergence of
infections in the major economies. This scenario would lead to a
higher risk of downgrade of the notes across all rating levels.

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

Long-term asset performance improvement such as decreased
charge-offs, increased monthly payment rate or increased portfolio
yield driven by a sustainable positive change of the underlying
asset quality would contribute to positive revisions of Fitch's
asset assumptions, which could positively affect the notes'
ratings.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Structured Finance
transactions have a best-case rating upgrade scenario (defined as
the 99th percentile of rating transitions, measured in a positive
direction) of seven notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of seven notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings
are based on historical performance.

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 pool
and the transaction. 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.

Prior to the transaction closing, Fitch reviewed the results of a
third-party assessment conducted on the asset portfolio information
and concluded that there were no findings that affected the rating
analysis.

Prior to the transaction closing, Fitch conducted a review of a
small targeted sample of the originator's origination files and
found the information contained in the reviewed files to be
adequately consistent with the originator's policies and practices
and the other information provided to the agency about the asset
portfolio.

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

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

ESG CONSIDERATIONS

The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).

SCOTT BROTHERS: Coronavirus Pandemic Prompts Administration
-----------------------------------------------------------
Business Sale reports that Cheshire-based wholesaler Scott Brothers
Limited (SBL) has gone into administration after its business was
significantly impacted by the coronavirus pandemic.

Patrick Lannagan -- patrick.lannagan@mazars.co.uk -- and Conrad
Pearson -- conrad.pearson@mazars.co.uk -- of Mazars LLP were
appointed as joint administrators, Business Sale relates.

According to Business Sale, Mr. Lannagan said: "SBL's business has
been significantly impacted by the Covid-19 pandemic and
unfortunately it has been necessary to make 15 redundancies, from
an original staff of 21.

"Trading continues at present in a limited form and we are seeking
buyers for the business and assets."

For the year ending September 30 2018, the company held fixed
assets of GBP17,916, up from GBP10,000 in 2017, and current assets
of GBP1.25 million, slightly down from GBP1.33 million the year
prior, Business Sale discloses.

Scott Brothers Limited supplies household storage products such as
vacuum storage bags, air coolers and dehumidifiers.


TAURUS CMBS 2006-2: Fitch Affirms Dsf Ratings on 3 Debt Classes
----------------------------------------------------------------
Fitch Ratings has affirmed Taurus CMBS (UK) 2006-2 P.L.C.as
follows:

Taurus CMBS (UK) 2006-2 P.L.C.      

  - Class A XS0271522103; LT BBsf; Affirmed

  - Class B XS0271523259; LT Dsf; Affirmed

  - Class C XS0271523846; LT Dsf; Affirmed

  - Class D XS0271524653; LT Dsf; Affirmed

TRANSACTION SUMMARY

Of the eight loans originally securitised in 2006, only one loan
remains (Mapeley STEPS), secured in favour of the issuer by an
encumbered freehold and leasehold portfolio of UK offices occupied
by HM Revenue and Customs. In exchange for a payment of GBP220
million made in 2001, HMRC handed over ownership and management of
most of its freehold estate to the Mapeley group. By becoming
HMRC's landlord and agreeing to provide services and assume certain
costs and liabilities (including significant rental liabilities
owed in relation to other leased space) over a 20-year services
contract, Mapeley is earning fee income from HMRC.

The securitised loan (now in cash sweep mode) is serviced from the
spread (if positive) between the two legs of the contract as well
as any net disposal income from vacated space. There is no
visibility on interest coverage, which varies quarter by quarter,
and while it did not refinance the loan at its expected maturity,
Mapeley has nevertheless met debt service since origination
(including by disposing of vacated assets).

In its analysis, Fitch gives no credit either to a positive
earnings contractual spread or to sales proceeds, but instead
anchor the analysis in its loan rating framework, which assesses
Mapeley's incentive to perform based on its equity interest in
terminal property value, which it can realise in 2021 by taking
vacant possession of the freehold and long leasehold offices. A
potential effect of the coronavirus outbreak is reduction in demand
for core office space, given greater acceptance of remote working
as well as pressure on occupational costs. Fitch accounts for this
in its analysis by raising its base structural vacancy assumptions,
which reduces credit to Mapeley's primary economic interest in the
overall transaction.

In assessing borrower incentives, Fitch notes a small measure of
risk stemming from the loan progressively transitioning from a
mainly fixed-rate basis to a mainly unhedged floating-rate basis.
In the event interest rates rise suddenly, rendering contingency
amounts escrowed by the borrower potentially insufficient for it to
buy a cap, the borrower's unhedged floating rate liabilities will
rise, which Fitch assumes in its loan rating in line with Fitch's
interest rate criteria. Rising interest rates would also increase
the issuer's carry costs if the loan defaults (the floating rate
notes mature in 2024).

Recently, Mapeley and HMRC executed a settlement deed, resulting in
a GBP56 million bank bond being posted by Mapeley to indemnify HMRC
for various outgoings and liabilities on residual leasehold
properties before the expiry of the contract. This estimated amount
is a liability of the borrower and as such, Fitch accounts for this
liability as well in its loan rating analysis.

KEY RATING DRIVERS

The affirmation is driven by the balance of risks for the Mapeley
STEPS loan. On the one hand, since the last rating action, the loan
has been repaid by GBP27.1 million (from a mix of cash sweep,
disposal proceeds and funds previously withheld in the deposit
account). Following the disposal of eight assets in the last six
months, the freehold collateral comprises 47 properties
(predominantly offices). On the other hand, Fitch expects
medium-term reduction in office demand from the COVID-19 pandemic
containment measures.

Coronavirus Causing Economic Shock: Fitch has made assumptions
about the spread of the coronavirus and the economic impact of the
related containment measures. As a base-case scenario, Fitch
assumes a global recession in 2020 driven by sharp economic
contractions in major economies with a rapid increase in
unemployment, with eurozone GDP remaining below-pre virus (4Q19)
levels through the whole of 2021.

As a downside scenario, Fitch considers a more severe and prolonged
period of stress with a slow recovery beginning in 2Q21. In this
scenario, Fitch assumes all units would suffer permanent falls in
estimated rental value of 10% (in addition to the rental value
decline rating assumptions).

Settlement Deed Erodes Equity: In order for Mapeley to assume full
control of the properties after April 2021, the sponsor has to
indemnify HMRC for various outgoings and liabilities on residual
leasehold properties before the expiry of the contract. The
indemnification has been provided in the form of a bond with a
maximum face amount of GBP56 million. This squeezes the equity left
in the portfolio which in theory reduces Mapeley's incentive to
honour the services contract for its short remaining term. However,
Fitch expects this erosion in credit quality to be reversed in 2021
when reliance on Mapeley to uphold its contractual commitments will
expire, which consequently supports affirmation.

To assess Mapeley's incentives to meet debt service until 2021,
liabilities consisting of fixed and stressed floating interest
payments (accounting for interest on interest), the GBP56 million
liability and the loan balance have been added together and
compared with the stressed vacant possession value of the portfolio
in the relevant rating scenario. Fitch has looked to the
sufficiency of future equity, as well as the sufficiency of
liquidity, the tail period and credit enhancement, in affirming the
notes' ratings.

Assumptions Updated for Coronavirus Impact: A prolonged lockdown is
creating laboratory conditions to test the efficacy of remote
working, while also triggering a sharp economic shock that is
likely to impose cost pressures on most businesses. Fitch believes
these twin forces will accelerate the expansion of remote working
practices across the UK, particularly in large centralised office
hubs such as London and other large cities in which collateral
offices are located. As a result, Fitch has floored its base
structural vacancy assumption for all UK office markets at 6%, and
7% in those more centralised locations.

Testing for possible prolongation of containment measures beyond
the base case, Fitch has run a sensitivity to a further 10% decline
in ERV. Fitch assumes all the liabilities will either roll off or
be subordinated to mortgage security if the services contract is
honoured through until expiry in approximately 12 months. These
offsets the near-term downside risk presented by this sensitivity
and drives the Stable Outlook on the notes.

RATING SENSITIVITIES

Current ratings: BBsf/Dsf/Dsf/Dsf

The change in model output that would apply with 0.8x cap rates is
as follows:

BBBsf/Dsf/Dsf/Dsf

The change in model output that would apply with 1.25x rental value
declines is as follows:

BBsf/Dsf/Dsf/Dsf

Coronavirus Downside Scenario Sensitivity

Fitch has added a Coronavirus Sensitivity Analysis that
contemplates a more severe and prolonged economic stress caused by
a re-emergence of infections in the major economies, before a slow
recovery begins in 2Q21. Under this severe scenario, Fitch reduces
the ERV by 10%, with the following change in model output:

B+sf/Dsf/Dsf/Dsf

Factors that could, individually or collectively, lead to positive
rating action/upgrade:

The lifting of social distancing measures could lead to positive
rating action.

Factors that could, individually or collectively, lead to negative
rating action/downgrade:

A prolonged period of social distancing could have a more material
impact on office demand, by hastening remote working and deterring
large rental commitments in the market, which may lead to negative
rating action.

If Mapeley fails to perform its contractual obligations to HMRC, it
could lead to a dispute that may prompt negative rating action.

KEY PROPERTY ASSUMPTIONS (all by market value)

'Bsf' WA cap rate: 6.7%

'Bsf' WA structural vacancy: 27.3%

'Bsf' WA rental value decline: 5.0%

'BBsf' WA cap rate: 7.2%

'BBsf' WA structural vacancy: 31.2%

'BBsf' WA rental value decline: 9.4%

'BBBsf' WA cap rate: 7.8%

'BBBsf' WA structural vacancy: 35.1%

'BBBsf' WA rental value decline: 14.5%

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Structured Finance
transactions have a best-case rating upgrade scenario (defined as
the 99th percentile of rating transitions, measured in a positive
direction) of seven notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of seven notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings
are based on historical performance.

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 were
material to this 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 pool ahead of the transaction's 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.

SOURCES OF INFORMATION

  - Servicer reporting provided by Link Asset Services as of
February 2020

  - Cash manager reports provided by US Bank as of April 2020

  - Valuation report provided by Link Asset Services (conducted by
CBRE) as of February 2020

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

The principal sources of information used in the analysis are
described in the Applicable Criteria.

ESG CONSIDERATIONS

The highest level of ESG credit relevance, if present, is a score
of 3. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).

WRIGHTS GROUP: Bank of Ireland to Get Just GBP2MM of Money Owed
---------------------------------------------------------------
Margaret Canning at Belfast Telegraph reports that Bank of Ireland
will receive just GBP2 million out of GBP38 million it was owed by
Wrights Group following the administration of the bus giant.

Bank of Ireland was the manufacturer's biggest creditor before the
Ballymena business went bust in September last year with the loss
of 1,200 jobs, Belfast Telegraph notes.

However, a new report filed at Companies House by administrators
Deloitte said that the bank will not be paid in full, and will
receive just GBP2 million from the administration process, Belfast
Telegraph discloses.

But economic development agency Invest NI, which lent the company
GBP2.5 million while it was in financial difficulties and trying to
find a buyer, will be repaid, Belfast Telegraph states.

Both Invest NI and Bank of Ireland -- classed as secured creditors
-- have each been repaid GBP1.5 million in the form of a
distribution, with the bank receiving a further GBP531,300 in
funded debtor amounts, according to Belfast Telegraph.  And
preferential creditors are also to be paid in full, Belfast
Telegraph says.  The administrators, as cited by Belfast Telegraph,
said they had been contacted by 616 preferential creditors who are
owed a total of GBP691,000.

Deloitte are appointed administrators of Wrights Group and related
companies Wrightbus, Wright En-Drive Limited, Wright Composites
Ltd, and Metallix Ltd.

While the Wrights name is back in the bus business after most of
its assets were sold to Bamford Bus Company (BBCL), the
administration process for sorting out debts of the old companies
goes on, Belfast Telegraph notes.  Unsecured creditors of the
firms, many of which are small suppliers, are not likely to receive
more than GBP688,000 between them, or 3% of the total sum of
GBP20.6 million that they are owed, according to Belfast
Telegraph.

The administrators' statement reveals that BBCL has now paid
deferred consideration of GBP3 million for the sale of some
finished buses, Belfast Telegraph relays.


ZELLIS HOLDINGS: Moody's Affirms Caa1 CFR, Alters Outlook to Neg.
-----------------------------------------------------------------
Moody's Investors Service has affirmed Zellis Holdings Limited's
Caa1 corporate family rating and Caa1-PD probability of default
rating, as well as the Caa1 ratings on the senior secured bank
credit facilities. Outlook on all ratings has changed to negative
from stable.

"The change in outlook to negative from stable reflects its
expectation of a deteriorating operating performance over the next
12 months which will lead to continued negative free cash flow
(FCF) generation and leverage increasing towards unsustainable
levels." says Luigi Bucci, Moody's lead analyst for Zellis.

"In spite of Zellis' high degree of recurring revenues, the
coronavirus outbreak adds further execution risk to the company's
turnaround strategy. Uncertainties largely derive from Zellis'
exposure to UK's small and mid-sized businesses (SMBs)." adds Mr.
Bucci.

RATINGS RATIONALE

Zellis' Caa1 CFR reflects: (1) expected deterioration in operating
performance, largely driven by the coronavirus outbreak; (2)
continued negative free cash flow generation, although improving as
the impact of carve-out exceptional costs phase out; (3)
Moody's-adjusted leverage of around 9x-10x with no expectation of
deleveraging over the next 12 months; (4) low product
diversification and high geographical concentration in the UK
market; and, (5) weak liquidity.

Counterbalancing these weaknesses are: (1) its leading position in
the niche market for payroll and HR software and services in the
UK; (2) high switching costs for the company's product offering
leading to good retention rates; (3) high degree of recurring
revenues and large exposure to SaaS; and, (4) recent track-record
of financial support from Bain Capital.

The change in outlook reflects the weakening in Zellis' performance
over fiscal 2020 and 2021 against Moody's previous expectations of
(1) continued revenue growth, (2) Moody's-adjusted debt/EBITDA
below 8x, and (3) FCF breakeven by fiscal 2020. Pressures on EBITDA
as a consequence of top-line weakness and increased cost base
together with continued exceptional cash outflows are the main
factors behind the underperformance.

Moody's anticipates Zellis' revenue to be broadly flat in fiscal
2020 and decline by around 5% in fiscal 2021. This compares to a
1.6% revenue increase noted over the first nine months of fiscal
2020 as revenue declines in the Mid-Market segment, driven by
Legacy Products pressures, partially offset the strong contribution
from the SMB unit Moorepay and Benefex. Revenue declines over
fiscal 2021 are expected to be largely driven by (1) higher churn
rates in Moorepay as SMB customers will be likely subject to higher
default risk as a consequence of the coronavirus pandemic; (2)
continued decline in the Legacy Products unit, only partially
upsold to Strategic; and, (3) a material slow-down in new business
and in the fast-growing unit Benefex. The rating agency anticipates
the impact on Mid-Market's Strategic Product to be more limited.
However, downside risk remains as around 10% of overall Zellis
mid-market revenue derives from customers highly exposed to the
coronavirus pandemic. Moody's regards the coronavirus outbreak as a
social risk under its ESG framework, given the substantial
implications for public health and safety.

Moody's notes that Zellis' business model provides downside
protection against additional underperformance on a revenue level.
This is largely supported by Zellis' (1) high switching costs with
customers unlikely to their change HR software in a period of
sustained uncertainty; and, (2) high predictability of revenues,
based on recurring income from contracts with a typical tenor of
five years.

In the short term, Moody's anticipates Zellis to address top-line
pressures impact on EBITDA and cash-flows through a reduction in
its cost base together with reliance on the UK government
initiatives to support businesses in the current economic climate
such as furlough schemes or VAT deferral. These initiatives will
not, however, fully offset the revenue decrease impact on EBITDA
and cash-flows.

The rating agency forecasts Moody's-adjusted FCF (excluding pension
contributions) to remain negative over the next 12 months and stand
at around minus GBP15 million and minus GBP10 million in fiscal
2020 and fiscal 2021, respectively (LTM January 2020: minus GBP34
million). The relative improvement in FCF over fiscal 2021 will be
driven by a material reduction in exceptional costs, largely
related to Zellis' carve-out and transformation program. However, a
certain degree of downside risk persists on these estimates as
customers may request to defer or extend payment terms affecting
working capital movements.

Moody's-adjusted debt/EBITDA is expected to stand at around 9x-10x
(after the capitalization of software development costs) over
fiscal 2020 and 2021 with no deleveraging expected over the short
to medium term (LTM January 2020: 9.0x). Such levels coupled with
the absence of revenue growth and negative free cash flow
generation are considered as unsustainable in the medium term by
the rating agency. In terms of interest coverage, Moody's expects
Moody's-adjusted EBITDA-Capex/Interest of around 1x in fiscal 2020
and 2021.

ENVORONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS

Moody's perceives the coronavirus outbreak as a social risk given
the substantial implications for public health and safety. In terms
of governance, after the carve-out of Zellis from NGA Human
Resources in 2017 Bain Capital is the key shareholder in the
company. Bain has actively supported Zellis over the course of
fiscal 2020 through the injection of GBP20 million into the
business to offset liquidity pressures deriving from higher than
expected exceptional costs related to the carve-out and business
transformation. The rating agency perceives the track record of
support from the financial sponsor as credit positive. However, the
current rating assessment does not factor in recurrence of parental
support in the future. Moody's also notes a number of key
management changes over 2018-2019.

LIQUIDITY

Moody's views Zellis' liquidity as weak, based on the company's
expected negative FCF generation over the next 12 months, available
cash resources and drawn revolving credit facility of GBP6 million
and GBP40 million (GBP6 million undrawn), respectively, as of
January 2020. Internal sources and cash flow generation through
fiscal 2021 are expected to be sufficient to cover cash
requirements over the year. However, liquidity may be pressurized
towards the end of fiscal 2021 in presence of underperformance
against Moody's current expectations.

The RCF, due 2023, is subject to a springing senior secured first
lien net leverage covenant of 9.05x when more than 35% of the
facility is drawn. Moody's anticipates Zellis to draw fully on its
RCF and to remain in compliance with the covenant, although
headroom will become tighter over time.

STRUCTURAL CONSIDERATIONS

The senior secured first lien bank credit facilities, comprising
the term loan B and RCF, are rated Caa1, in line with the CFR,
reflecting the small relative size of the second lien facility
ranking behind. GBP25 million worth of pension claims benefit from
a security ranking pari passu with the senior secured first lien
facilities.

RATIONALE FOR NEGATIVE OUTLOOK

The negative outlook is driven by the uncertain timing and
trajectory of recovery of Zellis' credit metrics together with
substantial concerns around the liquidity profile of the company in
the medium term. FCF is expected to remain negative over the next
12 months with Moody's-adjusted leverage remaining at 9-10x over
the same time-frame, a level which Moody's perceives to be
unsustainable in the medium term.

FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS

Upward rating pressure could materialize should Zellis: (1) put in
place additional sources of liquidity, in particular if these were
not accretive to debt and interest; (2) return to positive FCF
generation (after interest and exceptional items) on a trailing 12
months' basis; and, (3) reduce Moody's adjusted gross debt/EBITDA
(after the capitalization of software development costs)
sustainably towards 7.0x.

Conversely, Zellis' ratings could be downgraded if: (1) no actions
were taken to address the lack of liquidity sources, (2) the pace
of cash burn did not reduce in the coming quarters, including as a
result of EBITDA decline or because of exceptional items, and, (3)
chances of a default increased.

PRINCIPAL METHODOLOGY

The principal methodology used in this these ratings was Software
Industry published in August 2018.

LIST OF AFFECTED RATINGS

Affirmations:

Issuer: Zellis Holdings Limited

LT Corporate Family Rating, Affirmed Caa1

Probability of Default Rating, Affirmed Caa1-PD

Senior Secured Bank Credit Facility, Affirmed Caa1

Outlook Actions:

Issuer: Zellis Holdings Limited

Outlook, Changed To Negative From Stable

COMPANY PROFILE

Based in Hemel Hempstead, England, Zellis is a provider of payroll
and HR software, as well as outsourcing services underpinned by its
proprietary software, to private and public sector clients in the
UK and Ireland. In the twelve months ended January 13, 2020, the
group had GBP148 million of revenue and GBP46 million of
company-adjusted EBITDA. Zellis is owned by financial investor Bain
Capital.

[*] Moody's Reviews 7 Note Ratings from 3 Loan Trusts for Downgrade
-------------------------------------------------------------------
Moody's Investors Service has placed on review for possible
downgrade the ratings of seven Classes of Notes in Small Business
Origination Loan Trust 2019-1 DAC, Small Business Origination Loan
Trust 2019-2 DAC and in Small Business Origination Loan Trust
2019-3 DAC. The notes are backed by loans granted to small- and
medium- sized enterprises, originated by marketplace lender Funding
Circle Ltd. The rating action reflects the uncertainty around the
possible deterioration of the underlying portfolios due to the
current macroeconomic environment.

Issuer: Small Business Origination Loan Trust 2019-1 DAC

GBP 5.4M (current outstanding balance of GBP 3.24M) Class B Notes,
A2 (sf) Placed Under Review for Possible Downgrade; previously on
Feb 5, 2020 Upgraded to A2 (sf)

GBP 12.61M (current outstanding balance of GBP 7.57M) Class C
Notes, Baa2 (sf) Placed Under Review for Possible Downgrade;
previously on Feb 5, 2020 Affirmed Baa2 (sf)

GBP 18.92M (current outstanding balance of GBP 11.36M) Class D
Notes, Ba3 (sf) Placed Under Review for Possible Downgrade;
previously on Feb 5, 2020 Affirmed Ba3 (sf)

Issuer: Small Business Origination Loan Trust 2019-2 DAC

GBP 19.72M (current outstanding balance of GBP 13.53M) Class C
Notes, Baa3 (sf) Placed Under Review for Possible Downgrade;
previously on Jul 17, 2019 Definitive Rating Assigned Baa3 (sf)

GBP 22.04M (current outstanding balance of GBP 15.12M) Class D
Notes, Ba3 (sf) Placed Under Review for Possible Downgrade;
previously on Jul 17, 2019 Definitive Rating Assigned Ba3 (sf)

Issuer: Small Business Origination Loan Trust 2019-3 DAC

GBP 22.50M (current outstanding balance of GBP 18.87M) Class C
Notes, Baa3 (sf) Placed Under Review for Possible Downgrade;
previously on Nov 27, 2019 Definitive Rating Assigned Baa3 (sf)

GBP 26.25M (current outstanding balance of GBP 22.02M) Class D
Notes, Ba3 (sf) Placed Under Review for Possible Downgrade;
previously on Nov 27, 2019 Definitive Rating Assigned Ba3 (sf)

RATINGS RATIONALE

The rating action is primarily the result of the uncertainty around
the possible deterioration of each transaction's respective
portfolio due to the current macroeconomic environment. SMEs are
more susceptible to weaker economic conditions associated with the
slowdown in economic activity due to the coronavirus outbreak.

In its analysis, Moody's considered up to a 30% increase in its
cumulative gross default rates on the underlying portfolios to
evaluate the resiliency of the ratings amid the uncertainty
surrounding the portfolios' performance. The affected notes are
junior notes that have lower credit enhancement available to
protect them, making them more vulnerable to any increase in
defaults relative to the senior notes in the transactions, which
have greater credit protections. The potential increase in expected
defaults reflects the increased uncertainty in macroeconomic
conditions, a key driver for SME credit performance. In estimating
the higher defaults, Moody's considered the overall economic
systemic risk to all SMEs as well as exposure of the portfolios to
sectors classified as 'High exposure' and 'Moderate exposure' in
its CFG EMEA Corporates Heatmap. These sectors include Services:
Business, Construction & Building, and Retail.

As of March 31, 2020, cumulative defaults as a percentage of
original pool balance for the SBOLT 2019-1, SBOLT 2019-2 and SBOLT
2019-3 transactions stood at 5.8%, 3.5% and 0.6%, respectively.
Total delinquencies as a percentage of the current pool balance for
the SBOLT 2019-1, SBOLT 2019-2 and SBOLT 2019-3 transactions stood
at 5.8%, 4.2% and 3.0%, respectively. Given the current
macroeconomic environment it is expected that there will be an
uptake in early and total delinquencies in the short term.

During the review period, Moody's will evaluate effects of ongoing
and projected macroeconomic conditions, as well as the impact of
various parties including the UK government and the servicer,
Funding Circle, on the performance of underlying portfolios to
update its cumulative gross default rate and decide on the final
rating action on the notes. Rating actions on the notes, due to the
revised default projections, will reflect individual transaction
considerations.

Its analysis has considered the increased uncertainty relating to
the effect of the coronavirus outbreak on the UK economy as well as
the effects that the announced government measures put in place to
contain the virus, will have on the performance of corporate assets
and small businesses. Moody's regards the coronavirus outbreak as a
social risk under its ESG framework, given the substantial
implications for public health and safety. It is a global health
shock, which makes it extremely difficult to provide an economic
assessment. The degree of uncertainty around its forecasts is
unusually high.

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

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

These transactions are subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
Notes, in light of uncertainty about credit conditions in the
general economy.


                           *********


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

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