---

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

                          E U R O P E

          Friday, June 26, 2020, Vol. 21, No. 128

                           Headlines



A Z E R B A I J A N

MUGANBANK OJSC: S&P Lowers ICRs to 'CCC+/C', Outlook Negative


G E R M A N Y

DEUTSCHE LUFTHANSA: Shareholders Support EUR9BB Bailout Package
NOVEM GROUP: Moody's Confirms Ba3 CFR, Outlook Negative
VERTICAL HOLDCO: Fitch Assigns B(EXP) LT IDR, Outlook Stable
VERTICAL TOPCO III: S&P Gives Prelim. 'B-' LT Issuer Credit Rating
WIRECARD AG: Files for Insolvency Following Fraud Discovery

WIRECARD AG: Munich Court Taps Michael Jaffe to Assess Business


I R E L A N D

BLACK DIAMOND 2017-2: Moody's Cuts EUR12MM Class F Notes to B3(sf)
BLACKROCK EUROPEAN III: Moody's Confirms B2 Rating on Cl. F Notes
HARVEST CLO XXIV: Fitch Assigns BB-(EXP) Rating on Cl. E Debt


I T A L Y

BANCA IFIS: Fitch Affirms BB+ LongTerm IDR, Outlook Negative
CENTURION BIDCO: Fitch Assigns B+(EXP) LongTerm IDR, Outlook Stable
ENGINEERING SPA: S&P Assigns Prelim. 'B' Issuer Credit Rating


K A Z A K H S T A N

KCELL JSC: Fitch Raises LongTerm IDR to BB+, Outlook Stable


R U S S I A

GEOPROMINING INVESTMENT: Fitch Affirms B+ LT IDR, Outlook Stable


S P A I N

PROMOTORA DE INFORMACIONES: S&P Cuts ICR to 'CCC+', Outlook Neg.


S W I T Z E R L A N D

GLOBAL BLUE: S&P Lowers LongTerm ICR to 'B', On Watch Negative


T U R K E Y

TURK P&I: Fitch Assigns BB- Insurer Financial Strength Rating


U N I T E D   K I N G D O M

CALON ENERGY: Goes Into Administration, 111 Staff Retained
HEATHROW FINANCE: Moody's Affirms Ba1 CFR, Outlook Negative
LORCA HOLDCO: Fitch Assigns 'B+(EXP)' IDR, Outlook Stable
LORCA HOLDCO: Moody's Assigns B1 CFR Amid Masmovil Ibercom Deal
PANGAEA ABS 2007-1: Fitch Withdraws CCsf Rating on Class D Notes

PUNCH TAVERNS: Fitch Lowers Cl. A3 Notes Rating to B-, Outlook Neg
TATA STEEL: Nears Rescue Deal with UK Government
WELLINGTON PUB: Fitch Lowers Rating on Class A Notes to B


X X X X X X X X

[*] BOOK REVIEW: Mentor X

                           - - - - -


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

MUGANBANK OJSC: S&P Lowers ICRs to 'CCC+/C', Outlook Negative
-------------------------------------------------------------
S&P Global Ratings lowered its long- and short-term issuer credit
ratings on Muganbank OJSC to 'CCC+/C' from 'B-/B' and removed them
from CreditWatch, where they were placed with negative implications
on April 28, 2020. The outlook is negative.

S&P said, "The downgrade reflects our concerns regarding
Muganbank's business model and its sustainability in the current
economic slump. Although deposit outflows have stopped in the past
two months, we believe there is still a high risk that the bank may
breach the regulatory liquidity ratio if they resume. In the worst
case, Muganbank may be unable to honor its obligations in full and
on time.

"We believe that the expected sharp GDP contraction of 6.6% in
Azerbaijan this year will significantly pressure the bank's
franchise and sustainability and test its owner's ability and
willingness to continue providing support. So far in 2020, the
owner has not injected any funds into the bank or publicly
announced his intention to do so. Over the past five years
(2015-2019) Muganbank posted losses or broke-even and was kept
afloat by regular capital injections from its majority
shareholder.

"We expect the bank's liquidity will remain fragile in the next few
months. Liquid assets stood at Azerbaijani manat (AZN) 51 million
as of June 19, 2020, (about 9% of total assets). The bank has
remained in compliance with the quick liquidity regulatory ratio so
far in 2020 (minimum 30%), but with a small margin--averaging 38%
in May-June 2020 and 39.7% as of June 19, 2020. We estimate that
broad liquid assets covered about 20% of total customer deposits as
of June 19, 2020, compared with 44% at year-end 2019. Since the
beginning of 2020, Muganbank has seen outflows of 31% of its total
deposits, which is a more severe shock than the 25% seen in 2016.
Positively, in May–June 2020 corporate and retail deposit
outflows materially reduced compared with the first four months
2020, when withdrawals were related to expectations of manat
devaluation due to the drop in oil prices and panic about the
COVID-19 pandemic. On March 13, 2020, the state extended its full
guarantee of all retail deposits (within interest-rate limits) unil
Dec. 4, 2020, after it was in effect for five years until March
2020. We understand that Muganbank may turn to the Central Bank of
Azerbaijan (CBA) for a short-term liquidity line in case of further
deposits outflows.

"We expect the bank to post losses in 2020-2021 under International
Financial Reporting Standards due to pressure on margins and an
increase in loan-loss provisions related to economic deceleration
and COVID-19 effects. This should negatively affect capitalization
and we expect our risk-adjusted capital adequacy ratio to be
negative in 2020-2021 after reducing to 1.8% at year-end 2019 from
3.4% a year earlier due to an AZN28 million loss. As of May 31,
2020, the bank was in compliance with regulatory capital adequacy
ratios. Its Tier 1 ratio was 13.7% versus the 5% minimum, and total
capital adequacy 15.0% versus the 10% minimum.

"We expect an increase in problem loans due to the economic
contraction and lockdown related to COVID-19, with an increase in
Stage 3 loans to up to 35-40% in 2020-2021 from 27% at year-end
2019.

"The negative outlook reflects our expectations that the bank's
franchise and business model could be unsustainable over the next
12 months without sufficient external support.

"We could downgrade Muganbank over the next 12 months if its
liquidity further deteriorates because of ongoing deposit outflows
that are not fully compensated by support in a timely manner,
either from the bank's shareholder or the CBA as a lender of last
resort."

A positive rating action could follow if the bank accumulates a
sufficient liquidity buffer, addresses it low profitability, and
receives a significant boost to its capitalization, thus ensuring
the sustainability of its franchise over the medium term.




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

DEUTSCHE LUFTHANSA: Shareholders Support EUR9BB Bailout Package
---------------------------------------------------------------
Joe Miller and Laurence Fletcher at The Financial Times report that
Lufthansa's shareholders have voted through a EUR9 billion bailout
package that gives the German government a stake in the group
almost a quarter of a century after it was first privatized.

The deal, which allows Berlin to raise its holding to a blocking
minority in the event of a hostile takeover bid, had been in
jeopardy after the airline's largest investor, billionaire Heinz
Hermann Thiele, indicated that he wanted to reopen negotiations
with Angela Merkel's administration, the FT states.

However, Mr. Thiele, who built a 15.5% position in the airline in
the months following the Covid-19 outbreak and could have
single-handedly blocked the bailout because of the low turnout at
the June 25 extraordinary general meeting, ended up supporting the
package, the FT notes.

Overall, more than 98% of those registered voted to approve the
bailout, the FT relays.

In his opening remarks at the meeting, chief executive Carsten
Spohr defended the size of the deal, which he previously said was
larger than the amount Lufthansa needed to avoid insolvency, the FT
recounts.

According to the FT, Mr. Spohr also said the German carrier, which
had been burning through EUR1 million an hour as most of its planes
remained grounded, had "no alternative for meeting our capital
requirements", and reiterated that Lufthansa will emerge from the
crisis a smaller group, with at least 100 fewer aircraft.

Rival airline Ryanair has vowed to challenge the bailout in court,
the FT relates.


NOVEM GROUP: Moody's Confirms Ba3 CFR, Outlook Negative
-------------------------------------------------------
Moody's Investors Service confirmed the Ba3 corporate family rating
and the Ba3-PD probability of default rating (PDR) of Novem Group
GmbH. Concurrently, Moody's has confirmed the Ba3 instrument rating
of the backed senior secured notes. The outlook on the ratings
changed to negative from ratings under review.

This rating action concludes a review for possible downgrade that
began on March 26, 2020.

"The confirmation of Novem's ratings reflects the expectation that
the company will gradually recover from the materially negative
impact of the global coronavirus outbreak on credit metrics.", said
Matthias Heck, a Moody's Vice President -- Senior Credit Officer
and Lead Analyst for Novem. "Novem's leverage and margins will,
however, remain weak for a Ba3 through the fiscal year ending March
2022 and the negative outlook indicates the risk of a downgrade if
the global auto market does not recover as expected or Novem fails
to continue growing above market whilst sustaining high margins.",
added Mr. Heck.

RATINGS RATIONALE

The confirmation of Novem's Ba3 rating reflects Moody's expectation
that Novem's margins (i) remain high and well above sector average
in a very difficult year 2020 (in terms of Moody's adjusted EBITA),
(ii) will recover and reach the minimum level of 14% expected the
Ba3 in the fiscal year ending March 2022. Due to the negative
impact of the coronavirus outbreak, Moody's expects leverage to
increase towards 5x (debt/EBITDA, Moody's adjusted) in fiscal year
ending March 2021, before gradually de-levering to below 4x by
March 2022. The confirmation also reflects Novem's strong
liquidity, with EUR196 million cash on hand at the end of March
2020.

This expectation of a recovery in margins and leverage is based on
(i) Novem's track record of continued outperformance of its
revenues versus global light vehicle sales, and within this, a
continued outperformance of the premium segment versus the mass
market, (ii) Moody's expected recovery in global light vehicle
sales from the second half of 2020, and (iii) the company's actions
to mitigate the negative impact of the global coronavirus outbreak
predominantly by capex reduction but also by cost reduction and
flexibilization, and (iv) the company's strong free cash flow
generation, absent of shareholder distributions.

Moody's forecasts for the global automotive sector a 20% decline in
unit sales in 2020, with a steep year-over year contraction in the
first three quarters followed a modest rebound in the fourth
quarter. Moody's expects 2021 industry unit sales to rebound and
grow by approximately 11%. However, future demand for vehicles
could be weaker than its current estimates, the already competitive
environment in the auto sector could intensify further, and Novem
could encounter greater headwinds than currently anticipated.

The 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 global automotive industry
is one of the sectors that will be most severely impacted by the
outbreak. Moody's regards the coronavirus outbreak as a social risk
under its ESG framework, given the substantial implications for
public health and safety.

Novem's Ba3 Corporate Family Rating (CFR) reflects as positives:
(a) the company's leading position in the decorative interior trims
market for premium cars, with long-standing relationships to
premium automotive original equipment manufacturers (OEMs), (b)
history of revenue growth in excess of global light vehicle
production while preserving strong profitability, and (c) solid
financial metrics compared to its expectations for a Ba3 rating
with debt/EBITDA (Moody's adjusted) at closing around 3.3x with
prospects of solid free cash flow generation, a conservative
financial policy and good liquidity.

The rating is constrained by Novem's: (a) relatively small size,
with revenues of around EUR0.7 billion in FY2018/19, (b) its
exposure to the cyclicality of the automotive industry environment,
which faces a number of headwinds, and (c) customer concentration
to some large premium OEMs.

RATIONALE FOR THE NEGATIVE OUTLOOK

The negative outlook reflects the negative impact that the global
coronavirus outbreak will have on Novem's operating performance and
credit metrics in fiscal ending March 2021. In this difficult
environment, it will be challenging for the company to restore
metrics back to its expectations for the Ba3 (debt/EBITDA below 4x,
EBITA margins above 14%) through March 2022.

LIQUIDITY

Novem's liquidity is excellent and reflects the company's
consistently positive free cash flow generation and its available
liquidity sources, which comfortably exceed liquidity uses in the
next 12-18 months. Even in this unexpected scenario of a severe
market downturn, Moody's expects the company to be able to weather
adverse working capital swings and service its debts. As per end of
March 2020, the company had cash on balance amounting to around
EUR196 million, including proceeds from the fully drawn EUR75
million super senior revolving credit facility (RCF) due in 2024.
Over the next 12 months, Moody's expects Novem to generate funds
from operations (FFO) of around EUR55 million, which means
liquidity sources will total around EUR250 million over the next 12
months.

Liquidity sources are well in excess of expected uses, comprising
of capex spending (approximately EUR20-25 million), working cash
needs (Moody's estimates 3% of group sales or around EUR20 million)
and a working capital outflow (EUR40 million), while no dividend
payments are expected in the near-term. The group has no
significant debt maturities until 2024.

Novem has a factoring programme in place with a volume of up to
around EUR45 million. As of year-end March 2020, the company had
utilised around EUR27 million. In the current scenario of declining
unit sales and related lower revenues, however, the volume of
factoring could drop materially in 1Q2020/21 and weigh somewhat on
Novem's liquidity. Moreover, with temporary expansion of
inventories, Moody's expects the company's cash balance to fall
towards a still comfortable level of EUR150 million by the end of
June 2020, before improving again.

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

Given the current market situation Moody's does not anticipate any
short-term positive rating pressure for Novem. However, Moody's
would consider a rating upgrade, if (i) EBITA margins (Moody's
adjusted) were sustained in the high teens in percentage terms
through the cycle, (ii) Debt / EBITDA (Moody's adjusted) declined
to below 3.0x sustainably, and (iii) RCF/Net debt sustained above
30%. Moreover, an upgrade would require Novem to (iv) successfully
build new OEM relationships and thus diversify its customer mix.

Moody's would consider a rating downgrade, if (i) EBITA margins
(Moody's adjusted) fell below 14%, (ii) Debt / EBITDA (Moody's
adjusted) increased towards 4.0x, (iii) free cash flows turned
negative, or (iv) the liquidity profile weakened.

LIST OF AFFECTED RATINGS:

Issuer: Novem Group GmbH

Confirmations, Previously Placed on Review for Downgrade:

Corporate Family Rating, Confirmed at Ba3

Probability of Default Rating, Confirmed at Ba3-PD

BACKED Senior Secured Regular Bond/Debenture, Confirmed at Ba3

Outlook Actions:

Outlook, Changed to Negative from Ratings Under Review

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Automotive
Supplier Methodology published in January 2020.

COMPANY PROFILE

Headquartered in Vorbach, Germany, Novem Group GmbH (Novem) is a
specialized supplier of interior trim elements for the premium
automotive industry and is the market leader in its niche market.
The company was founded in 1947 and is owned by Bregal (86%), an
investment business of Swiss COFRA Holding AG, which was
established to consolidate and manage direct investments of the
Brenninkmeijer family and the company's management and other
co-investors (14%). Novem operates 10 production sites across eight
countries in Europe, Americas and Asia. In fiscal year ending March
2020, Novem generated net sales of approximately EUR648 million.


VERTICAL HOLDCO: Fitch Assigns B(EXP) LT IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has assigned Vertical Holdco GmbH a first-time
expected Long-Term Issuer Default Rating (IDR) of 'B(EXP)' with
Stable Outlook.

Fitch has also assigned Vertical Midco GmbH's proposed EUR2.75
billion and Vertical U.S. Newco Inc's proposed EUR3.8 billion
senior secured debt issues expected 'B+(EXP)'/'RR3' and Vertical
Holdco GmbH's proposed EUR1,075 million senior unsecured debt issue
expected 'CCC+(EXP)'/'RR6'.

The proceeds from the debt issues will be used to acquire
thyssenkrupp Elevator by Vertical TopCo III GmbH, the parent
company of all the aforementioned Vertical entities, from
thyssenkrupp AG.

The expected ratings are constrained by thyssenkrupp Elevator's
high leverage post-debt issues and through the medium term and
limited product diversification.

Rating positives include the company's good market position in the
elevator sector, stable and healthy cash flows, strong liquidity
and profitability upside from the cost-efficiency measures to be
undertaken by the new owners.

The ratings are based on the expectation that the final capital
structure at the closing of the debt issues will closely reflect
the presently proposed structure, and that final loan and notes
documentation will not be materially different from the draft
versions provided to Fitch.

KEY RATING DRIVERS

High but Sustainable Leverage: Fitch expects thyssenkrupp Elevator
to be highly leveraged for the rating in the short to medium term,
both on a gross and net basis. At end-2020, Fitch expects gross and
net leverage to be over 10x, well outside the 'B' category
mid-points of 5.5x and 6x under Fitch's Navigator for the sector.
Fitch's expectation of sustainable free cash flow (FCF) of around
EUR200 million - EUR300 million p.a. should provide gradual
deleveraging capacity, but leverage metrics are likely to remain
high over the next four years.

Moderate Earnings Likely to Improve: Fitch views thyssenkrupp
Elevator's EBITDA margin, at 11.6% in 2019, as moderate in relation
to its peer's, with a cost structure weighed down by high operating
costs. Fitch expects a gradual improvement in the cost structure
under the new ownership with profitability steadily rising to a
range of 13%-15%, broadly in line with peers' in the medium term.

Free Cash Flows (FCF) to Remain Stable: Cash flow margins are
consistent with a 'BBB' category diversified industrial company,
albeit weaker than peers'. Its funds from operation (FFO) margin,
which in 2019 was 10%, is expected to decline somewhat due to high
financing costs despite likely cost-structure improvements, while
the FCF margin is expected to remain stable at around 3%-5% in the
medium term, through capex and working-capital discipline.

Strong Long-Term Market Dynamics: Underlying long-term dynamics for
the elevator business are strong with global demand likely to be
favourably affected by factors such as urbanisation, especially in
emerging markets, the need for modernisation of mature assets, and
the related necessity for maintenance services of a growing
installed base.

Modest COVID-19 Effect: Fitch expects COVID-19 to have a delayed,
and probably a more moderate, effect on the elevator sector
relative to other diversified industrials companies. Demand for
maintenance of existing installations is fairly stable and
predictable, with no more than a slight negative effect expected in
the short-term. The new installation segment, driven to a large
degree by new construction activity, may not immediately experience
a downturn, as it is probable that most construction already begun
will be completed.

Lower Demand Mitigated by Diversification: The number of new
building starts over the coming years is likely to decline from
prior years, and therefore demand for new installations will
probably be lower in 2021, depending on the depth of the recession.
thyssenkrupp Elevator's good business diversification as well as a
broad global exposure mean that the company is somewhat resilient
against a material decline in both revenue and earnings in the
medium term.

Good Market Position: thyssenkrupp Elevator is the global number
four player in the elevator industry, with a market share of around
13%. Approximately two-thirds of the global market is dominated by
four companies, including thyssenkrupp Elevator, with the remainder
shared by many smaller players. thyssenkrupp Elevator's position,
scale and broad service network provides the company with an
advantage over many competitors, while its global footprint serves
as a potential benefit in streamlining its cost structure.

Limited Business Profile: thyssenkrupp Elevator's business profile
is constrained by a narrow product range and end-customer exposure,
relative to many other diversified industrials companies. The
company chiefly makes and services elevators and is dependent to
some degree on property construction cycles. Offsetting this is
thyssenkrupp Elevator's strong cycle-proof maintenance business and
the good geographic diversification of this business, which limits
the effect of cyclicality in the property sector.

DERIVATION SUMMARY

thyssenkrupp Elevator's present profitability margins and cash
flows are somewhat lower than that of direct peers such as OTIS,
Schindler or KONE, who benefit from a more streamlined cost
structure, as well as other high-yield diversified industrials
issuers such as AI Alpine AT BidCo GmbH (B/Stable) or CeramTec
BondCo GmbH (B/Negative), companies which, like thyssenkrupp
Elevator, specialise in a fairly narrow range of products.

thyssenkrupp Elevator's leverage, both gross and net, will also be
weaker than most similarly rated peers' and the sectors for the
rating over the medium term, despite Fitch's expectations of
material de-leveraging.

thyssenkrupp Elevator exhibits a superior business profile to
companies such as AI Alpine and CeramTec, with much greater scale
and global diversification as well as a stronger market position
and less vulnerability to economic cycles and shocks.

KEY ASSUMPTIONS

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

  - Revenue to decline 1% in FY20 (financial year to September) and
3% in FY21 due to a slowdown in commercial building construction
stemming from COVID-19. New installations to slow down while
maintenance and modernisation services will be broadly stable. A
recovery is expected in FY22 and FY23

  - EBITDA margin to improve following cost-cutting measures and
optimisation of production and non-production processes

  - Capex around 2% of revenue until FY23

  - No M&A or dividend payments until FY23

  - Some working capital outflows in 2020 and 2021 as new advance
payments are below the level of usage of existing advances;
thereafter a broadly neutral working capital cash flow profile

RECOVERY ANALYSIS CONSIDERATIONS

Fitch's recovery analysis follows the bespoke analysis for issuers
in the 'B+' and below range with a going-concern valuation yielding
higher realisable values in a distress scenario than liquidation.
This reflects the globally concentrated market of elevator
manufacturers, where the top four companies have almost a 70% total
market share. thyssenkrupp Elevators holds the number four
position, has a robust business profile with sustainable cash flow
generation capacity, defensible market position and products
strongly positioned on the global market.

For the going-concern analysis enterprise value (EV) calculation,
Fitch discounts the company's FY19 EBITDA of EUR922 million by 20%.
The resulting post-distress EBITDA of around EUR740 million would
result in marginally but persistently negative FCF, effectively
representing a post-distress cash flow proxy for the business to
remain a going concern. In this scenario thyssenkrupp Elevator
depletes internal cash reserves due to less favorable contractual
terms with customers, which Fitch assumes could help the company in
rebuilding the order book post-restructuring.

Fitch applies a 6x distressed EV/EBITDA multiple, broadly in line
with the average 5.6x distressed EV/EBITDA multiples across 'B'
rated peer group in the broad industrial and manufacturing sector.
This leads to a total estimated EV of around EUR4,420 million. A
leading market position, high recurring revenue base and
international manufacturing and distribution diversification
justify this approach.

After deducting 10% for administrative claims and considering
priority of enforcement for the total senior secured debt of
EUR7,350 million and senior unsecured debt of EUR1,700 million in
total, Fitch rates the company's debt instruments as follows:

  - 'B+(EXP)' with a Recovery Rating of 'RR3' for senior secured
loans and notes totaling EUR 6,550 million issued by Vertical Midco
GmbH and Vertical U.S. Newco Inc., representing a one notch uplift
from the IDR.

  - 'CCC+' with a Recovery Rating of 'RR6' for senior unsecured
notes EUR1,075 million issued by Vertical Holdco GmbH.

RATING SENSITIVITIES

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

  - Gross leverage under 6x

  - FFO margin above 8%

  - FFO interest cover above 4x

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

  - Gross leverage above 8x beyond 2022

  - FFO margin under 6%

  - FCF margin under 2%
  
  - FFO interest cover under 2x

LIQUIDITY AND DEBT STRUCTURE

Comfortable Liquidity. At FYE19 thyssenkrupp Elevator had EUR233
million of cash, adjusted by Fitch for intra-year operating needs
of around 1% of revenue. Under thyssenkrupp AG's ownership,
thyssenkrupp Elevator regularly generates excess cash that feeds
the global cash pooling of thyssenkrupp AG, but is also utilised by
thyssenkrupp Elevator for its operating needs. Post-sale,
thyssenkrupp Elevator will have a revolving credit line (RCF) and a
guarantee line of EUR2 billion in total, of which the RCF in the
expected amount of EUR1 billion will entirely serve as an
additional source of liquidity.

Fitch expects thyssenkrupp Elevator's positive cash flow profile to
be sustainable. Fitch forecasts an average FCF margin of 3.7% over
the next four years, stemming from low working capital needs
resulting from favourable contractual conditions regarding
prepayments and a light capex business model. Dividend payments and
acquisitions have not been factored into its assumptions as per
management and sponsors' guidance.

Before the closing of the debt issue, thyssenkrupp Elevator will
settle all amounts outstanding under thyssenkrupp AG's cash pooling
structure. However, Fitch does not expect any outflow of cash as
the receivables related to the cash pool more than offset the
balance of liabilities. Upon the funding completion, Fitch expects
thyssenkrupp Elevator to have EUR100 million of cash, and the debt
structure will have a long-term debt maturity schedule, with no
significant repayment over the next six to seven years. The company
will then be exposed to a largely bullet risk of repayment.

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).


VERTICAL TOPCO III: S&P Gives Prelim. 'B-' LT Issuer Credit Rating
------------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B-' long-term issuer
rating to Germany-based Vertical Topco III GmbH, its preliminary
'B' rating and '2' recovery rating to the senior secured debt, and
its preliminary 'CCC' issue rating and '6' recovery rating to the
senior unsecured debt.

The carve-out and acquisition of tk elevator has resulted in a
highly leveraged capital structure, but S&P expects deleveraging
over the next two years.

Thyssenkrupp sold the majority of its elevator business to a
private-equity lead consortium (Advent, Cinven, ADIA, RAG, and GIC)
for more than EUR17 billion. The consortium is about to raise a
total of EUR6.55 billion equivalent in senior secured term loan A,
senior secured term loan B, and senior secured notes, as well as
EUR1.7 billion senior unsecured notes as part of the transaction.
S&P also notes the presence in the group structure of EUR2 billion
equivalent denominated PIK notes held by third-party investors
(which S&P views as debt-like).

After the transaction closes, S&P Global Ratings-adjusted pro forma
leverage for 2020 is an estimated 11.7x including the EUR2 billion
equivalent denominated PIK notes, and about 9.5x excluding them.

This makes tk elevator the most highly leveraged new issuer of the
Europe, Middle East, and Africa capital goods that S&P rates.
However, we forecast that the company will reduce leverage to
8.5x-8.9x (about 11x including the PIK notes) in FY2021 and further
to about 7.5x (about 10x including the PIK notes) by FY2022. The
base-case EBITDA (S&P Global Ratings adjusted) for 2020 is about
EUR950 million, 2021 more than EUR1 billion, and 2022 about EUR1.2
billion. The group's fiscal year-end is Sept. 30.

tk elevator offers a full range of elevator systems for low-to-high
rise buildings, escalators, walkways, and related services.

Therefore, S&P believes the company benefits from ongoing
urbanization, higher penetration rate in residential buildings, and
increasing revenue in its service business from its growing
installed base. Over the next two years starting from FY2021, S&P
estimates revenues to increase 3.0%-3.5% per year, only slightly
affected by the recession. S&P expects a gradual increase in
profitability over the same period, driven by higher volumes,
streamlining of the product portfolio, cost measures, higher
retention, and increasing labor efficiency in service operations.
However, the recession, especially due to its impact on customer
segments such as airports and shopping malls, is likely to lead to
higher price sensitivityy and soften the group's growth and margin
improvement over the next two years.

S&P estimates the EBITDA margin will improve by more than 200 bps
to 14% in FY2022 from about 12% in FY2020.

The group's reported EBITDA margins are below those of its global
peers, at approximately 12% compared with that of peers of 14%-17%
and it has a somewhat smaller scale compared with that of other
global elevator manufacturers. The expected catch-up in
profitability to about 14% by FY2022, due to the reasons described
above, is the main factor in forecast deleveraging. S&P expects the
group to generate positive free operating cash flow, but do not net
any cash held in our credit ratio calculations due to financial
sponsor ownership of the group.

tk elevator will be able to defend its market position.

The company is the no. 4 global elevator and escalator producer
after Otis, KONE, and Schindler. Otis is the largest manufacturer,
with an estimated global market share of about 20% in 2019, with tk
elevator at about 13% and other players at 17%-18%. The elevator
market globally is mature and, except for Japan, is dominated by
these four players. S&P said, "We expect no material changes in
market share over the medium term. Regionally, tk elevator is best
positioned in North America, where its position is close to the
market leader Otis. With a high service share in the North American
market, we view that the region is the most important in terms of
profit generation. We view positively the group's technological
capabilities, underlined by the development of the MAX predictive
maintenance solution and the MULTI elevator system." The completion
of MULTI is beyond the outlook horizon, but is likely to strengthen
the group's market position in high-rise buildings and revenue
growth from FY2023 onward.

Resilient aftermarket business is supported by an increasing
installed base, high renewal rates, and safety regulation.

Elevators and escalators are sold with service contracts with
significantly higher margins than on equipment. In high-rise
building, shopping centers, airports, and other buildings,
elevators and escalators are very highly used assets where uptime
is crucial. In addition, the assets fall under local safety
regulations requiring regular maintenance and service checks,
making the service revenue sticky. Therefore, the service network
is an important asset for all global players. Contract renewal
rates in the business are high (above 90%), and the service aspect
forms an effective barrier to entry to any potential market
entrants. S&P expects that the group will further develop its
service operation and efficiency by reducing callback times,
reducing churn rates, and raising contribution from digital sales.
S&P said, "We estimate that the group's aftermarket business is
accounting for more than 50% of sales and 65% of gross profit,
providing earnings and cash flow visibility.

"We expect low cash flow volatility and a limited impact from
COVID-19 on operating performance in FY2020 and FY2021.

"We understand that so far, the group's service operations remained
resilient and have only been temporarily affected by COVID-19. The
group has seen only limited disruption in its supply chain or
production, but there are delays on the construction side due to
regional shutdowns. We estimate that, over the medium term, some of
the group's clients, in particularairports and shopping malls that
are severely hit by the pandemic, are likely to become more price
sensitive and new projects planned before the crisis will be
delayed.Nevertheless, we view positively the group's significant
scale and scope, general high diversification in terms of
geographies and customers, and low capital expenditure (capex)
needs, which positively contributes to group's cash flow stability
in the uncertain economic environment."

EUR2 billion in unfunded facilities for cash and guarantees, no
material intra-year working capital swings, and positive free cash
flow support the liquidity profile.

At the transaction's close there will be EUR100 million cash held
on balance sheet. The liquidity profile is supported by low working
capital swings, long dated maturity profile, and EUR2 billion
revolving credit and guarantee facilities, with sufficient headroom
and free operating cash flow thanks to the high share of
aftermarket business. We believe this provides the group with
sufficient financial flexibility given the uncertain economy.

S&P said, "The positive outlook reflects our expectation that tk
elevator will improve its operating performance over the next 12
-18 months after the closing, despite the impact of COVID-19. We
expect revenue to increase by more than 3% a year and EBITDA margin
to expand to about 14% by FY2022. With that, we expect a gradual
deleveraging to 8.5x to 8.9x by FY2021 and about 7.5x by FY2022
(excluding the PIK notes), positive free operating cash flow, and
funds from operations (FFO) cash interest coverage ratio of about
2.0x in both years. A prerequisite for a positive rating action
would be supportive financial policy to maintain a lower leverage.

"We could raise the rating if the group sustainably reduces
leverage, namely to about 7.5x (excluding the PIK notes) supported
by further EBITDA margin expansion, positive free operating cash
flow, and FFO to cash interest coverage of about 2.0x.

"We could revise the outlook to stable if the group would show less
resilience to COVID-19 related economic downturn than we expect or
the group does not increasing its revenue or EBITDA margins as
expected, resulting in debt to EBITDA (excluding PIK notes) of more
than 7.5x or an FFO cash interest ratio of less than 2x by FY2022.
This could occur through higher-than-expected costs base after the
carve-out is complete or increasing pricing pressure during the
recession.

S&P could also lower the rating or revise the outlook to stable
if:

-- The group cannot not increase profitability and absolute EBITDA
as projected

-- It cannot generate sustainable positive free operating cash
flow

-- FFO to cash interest coverage falls below 1.5x

-- Liquidity deteriorates

-- Carve-out or restructuring costs are higher than expected

-- The group undertakes debt-financed acquisitions


WIRECARD AG: Files for Insolvency Following Fraud Discovery
-----------------------------------------------------------
Dan McCrum, Olaf Storbeck, Stefania Palma and John Reed at The
Financial Times report that Wirecard filed for insolvency after the
once high-flying payments group revealed a multiyear fraud that led
to the arrest of its former chief executive.

In a remarkable collapse of a company once regarded as a European
tech champion, Wirecard said in a statement on June 25 that it
faced "impending insolvency and over-indebtedness", the FT
relates.

The first failure of a member of Germany's prestigious Dax index is
expected to inflict big losses on creditors and reputational damage
on regulators led by BaFin and Wirecard's longstanding auditors EY,
the FT notes.

According to the FT, EY on June 25 said there were "clear
indications that this was an elaborate and sophisticated fraud,
involving multiple parties around the world in different
institutions, with a deliberate aim of deception", adding that
"even the most robust and extended audit procedures may not uncover
a collusive fraud".

Wirecard's admission a week ago that EUR1.9 billion of cash was
missing was the catalyst for the company's unravelling, the FT
recounts.  Founder and former chief executive Markus Braun was
arrested on June 22 on suspicion of false accounting and market
manipulation before being released on bail, the FT relays.

As the price of Wirecard's shares and bonds plunged in recent days,
the company has been locked in urgent negotiations with banks owed
EUR2 billion, the FT notes.  The company has a further EUR1.4
billion of debt issued in September last year, the FT states.

Restructuring specialists from Houlihan Lokey, appointed by
Wirecard last week, have pored over the company's books to work out
if the group had a path to survival, the FT relates.

However, the genuine parts of its business turned out to be too
small to sustain the cost base and debt of a company that spent the
past 18 months fighting whistleblower allegations of accounting
fraud, the FT discloses.

Wirecard, as cited by the FT, said the insolvency filing only
affects the group's holding company, which employs 200 of the
group's 5,700 staff.  The payment groups' operating business are
continuing, Wirecard said, but added it was "currently evaluating
whether insolvency applications have to be filed for subsidiaries",
according to the FT.


WIRECARD AG: Munich Court Taps Michael Jaffe to Assess Business
---------------------------------------------------------------
Alexander Huebner and Joern Poltz at Reuters report that a Munich
court on June 25 commissioned an urgent assessment about Wirecard
from insolvency law expert Michael Jaffe, putting him in the frame
to be appointed administrator of the collapsed German payments
company.

The Munich court also confirmed Wirecard filed for insolvency on
June 25 shortly after 1500 GMT, as announced earlier by the
company, Reuters relates.




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

BLACK DIAMOND 2017-2: Moody's Cuts EUR12MM Class F Notes to B3(sf)
------------------------------------------------------------------
Moody's Investors Service downgraded the ratings on the following
notes issued by Black Diamond CLO 2017-2 Designated Activity
Company:

EUR30,900,000 Class C Senior Secured Deferrable Floating Rate Notes
due 2032, Downgraded to A3 (sf); previously on Dec 20, 2017
Definitive Rating Assigned A2 (sf)

EUR23,000,000 Class D Senior Secured Deferrable Floating Rate Notes
due 2032, Downgraded to Baa3 (sf); previously on Apr 20, 2020 Baa2
(sf) Placed Under Review for Possible Downgrade

EUR18,000,000 Class E Senior Secured Deferrable Floating Rate Notes
due 2032, Downgraded to Ba3 (sf); previously on Apr 20, 2020 Ba2
(sf) Placed Under Review for Possible Downgrade

EUR12,100,000 Class F Senior Secured Deferrable Floating Rate Notes
due 2032, Downgraded to B3 (sf); previously on Apr 20, 2020 B2 (sf)
Placed Under Review for Possible Downgrade

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

EUR142,000,000 Class A-1 Senior Secured Floating Rate Notes due
2032, Affirmed Aaa (sf); previously on Dec 20, 2017 Definitive
Rating Assigned Aaa (sf)

USD55,800,000 Class A-2 Senior Secured Floating Rate Notes due
2032, Affirmed Aaa (sf); previously on Dec 20, 2017 Definitive
Rating Assigned Aaa (sf)

EUR30,000,000 Class A-3 Senior Secured Fixed Rate Notes due 2032,
Affirmed Aaa (sf); previously on Dec 20, 2017 Definitive Rating
Assigned Aaa (sf)

USD15,000,000 Class A-4 Senior Secured Fixed Rate Notes due 2032,
Affirmed Aaa (sf); previously on Dec 20, 2017 Definitive Rating
Assigned Aaa (sf)

EUR56,000,000 Class B Senior Secured Floating Rate Notes due 2032,
Affirmed Aa2 (sf); previously on Dec 20, 2017 Definitive Rating
Assigned Aa2 (sf)

Black Diamond CLO 2017-2, issued in December 2017, is a
multi-currency collateralized loan obligation (CLO) backed by a
portfolio of mostly high-yield senior secured European and US
loans. The portfolio is managed by Black Diamond CLO 2017-2
Adviser, L.L.C. The transaction's reinvestment period will end in
January 2022.

RATINGS RATIONALE

The action concludes the rating review on the Class D, E and F
notes announced on April 20, 2020 as a result of the deterioration
of the credit quality and/or the reduction of the par amount of the
portfolio following from the coronavirus outbreak.

Stemming from the coronavirus outbreak, the credit quality of the
portfolio has deteriorated as reflected in an increase in Weighted
Average Rating Factor (WARF). WARF worsened by 16.5% to 3563 in May
2020 [1] from 3058 in November 2019 [2] and is now significantly
above the reported covenant of 3228. In addition, the
over-collateralisation (OC) levels have weakened across the capital
structure. According to the trustee report of May 2020 [1] the
Class A/B, Class C, Class D, Class E and Class F OC ratios are
reported at 135.61%, 122.68%, 114.55%, 108.91% and 105.41% compared
to November 2019 [2] levels of 137.72%, 124.55%, 116.28%, 110.53%,
and 106.97% respectively. In addition to the WARF test, the
Weighted Average Spread (WAS) Test is also failing, with a reported
WAS of 4.17% in May 2020 [1] against a covenant of 4.25%.

None of the OC tests are currently in breach and the transaction
remains in compliance with the following collateral quality tests:
Diversity Score, Weighted Average Recovery Rate (WARR) and Weighted
Average Life (WAL).

Moody's notes the WARF has worsened by a further 194 points since
April 2020, when Classes D, E and F notes were placed on review for
possible downgrade. As a result of all of the foregoing, the credit
quality of the Class C notes, which were previously not placed on
review, have also been impacted.

Moody's however concluded that the expected losses on remaining
rated notes remain consistent with their current ratings.
Consequently, Moody's has affirmed the ratings of Classes A-1, A-2,
A-3, A-4 and B.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base case,
Moody's analysed the underlying collateral pool as having a
performing par and principal proceeds balance of EUR 317.5m and USD
85.7m, defaulted par of EUR 1.5m and USD 7.4m, a weighted average
default probability of 28.1 % (consistent with a WARF of 3353 over
a weighted average life of 6.06 years) for the EUR pool and a
weighted average default probability of 35.8% (consistent with a
WARF of 4708 over a weighted average life of 4.99 years) for the
USD pool, a weighted average recovery rate upon default of 46.17%
for a Aaa liability target rating, a diversity score of 57 and a
weighted average spread of 3.69%. The USD-denominated liabilities
are naturally hedged by the USD assets.

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

Its analysis has considered the effect of the coronavirus outbreak
on the global 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.

The contraction in economic activity in the second quarter will be
severe and the overall recovery in the second half of the year will
be gradual. However, there are significant downside risks to its
forecasts in the event that the pandemic is not contained and
lockdowns have to be reinstated. As a result, the degree of
uncertainty around its forecasts is unusually high. Moody's regards
the coronavirus outbreak as a social risk under its ESG framework,
given the substantial implications for public health and safety.

Methodology Underlying the Rating Action:

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

Counterparty Exposure:

The rating action took into consideration the notes' exposure to
relevant counterparties, such as account bank, using the
methodology "Moody's Approach to Assessing Counterparty Risks in
Structured Finance" published in June 2020. Moody's concluded the
ratings of the notes are not constrained by these risks.

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

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the note,
in light of uncertainty about credit conditions in the general
economy. In particular, the length and severity of the economic and
credit shock precipitated by the global coronavirus pandemic will
have a significant impact on the performance of the securities. CLO
notes' performance may also be impacted either positively or
negatively by: (1) the manager's investment strategy and behaviour;
and (2) divergence in the legal interpretation of CDO documentation
by different transactional parties because of embedded
ambiguities.

Additional uncertainty about performance is due to the following:

  -- Weighted average life: The notes' ratings are sensitive to the
weighted average life assumption of the portfolio, which could
lengthen as a result of the manager's decision to reinvest in new
issue loans or other loans with longer maturities, or participate
in amend-to-extend offerings. The effect on the ratings of
extending the portfolio's weighted average life can be positive or
negative depending on the notes' seniority.

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

  -- Foreign currency exposure: The deal has significant exposure
to non-EUR denominated assets. Volatility in foreign exchange rates
will have a direct impact on interest and principal proceeds
available to the transaction, which can affect the expected loss of
rated tranches.

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


BLACKROCK EUROPEAN III: Moody's Confirms B2 Rating on Cl. F Notes
-----------------------------------------------------------------
Moody's Investors Service confirmed the ratings on the following
notes issued by BlackRock European CLO III Designated Activity
Company:

EUR21,000,000 Class D Senior Secured Deferrable Floating Rate Notes
due 2030, Confirmed at Baa2 (sf); previously on Jun 3, 2020 Baa2
(sf) Placed Under Review for Possible Downgrade

EUR21,000,000 Class E Senior Secured Deferrable Floating Rate Notes
due 2030, Confirmed at Ba2 (sf); previously on Jun 3, 2020 Ba2 (sf)
Placed Under Review for Possible Downgrade

EUR11,500,000 Class F Senior Secured Deferrable Floating Rate Notes
due 2030, Confirmed at B2 (sf); previously on Jun 3, 2020 B2 (sf)
Placed Under Review for Possible Downgrade

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

EUR233,000,000 Class A Senior Secured Floating Rate Notes due 2030,
Affirmed Aaa (sf); previously on Jun 16, 2017 Assigned Aaa (sf)

EUR52,000,000 Class B Senior Secured Floating Rate Notes due 2030,
Affirmed Aa2 (sf); previously on Jun 16, 2017 Assigned Aa2 (sf)

EUR32,500,000 Class C Senior Secured Deferrable Floating Rate Notes
due 2030, Affirmed A2 (sf); previously on Jun 16, 2017 Assigned A2
(sf)

BlackRock European CLO III Designated Activity Company, issued in
June 2017, is a collateralised loan obligation (CLO) backed by a
portfolio of mostly high-yield senior secured European loans. The
portfolio is managed by Blackrock Investment Management (UK)
Limited. The transactions reinvestment period will end in April
2021.

RATINGS RATIONALE

The action concludes the rating review on the Classes D, E and F
notes initiated on June 3, 2020 as a result of the deterioration of
the credit quality and/or the reduction of the par amount of the
portfolio following from the coronavirus outbreak.

Stemming from the coronavirus outbreak, the credit quality of the
portfolio has deteriorated as reflected in the increase in Weighted
Average Rating Factor (WARF) and of the proportion of securities
from issuers with ratings of Caa1 or lower. WARF worsened by about
12.1% to 3282 from 2929 in January 2020 and is now above the
reported covenant of 2865. Securities with default probability
ratings of Caa1 or lower have increased to 4.9% from 2.7% in
January 2020 triggering the application of an
over-collateralisation (OC) haircut to the computation of the OC
tests. Consequently, the OC levels have weakened across the capital
structure. According to the trustee report dated May 2020 [1] the
Class A/B, Class C, Class D, Class E and Class F OC ratios are
reported at 140.1%, 125.8%, 117.9%, 111.1% and 107.6% compared to
January 2020 [2] at 141.4%, 126.9%, 119%, 112.1%, and 108.6%
respectively.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers. In its base case,
Moody's analysed the underlying collateral pool as having a
performing par and principal proceeds balance of EUR 399.6m ,
defaulted par of EUR 2m, a weighted average default probability of
25.71 % (consistent with a WARF of 3316 over a weighted average
life of 5.04 years), a weighted average recovery rate upon default
of 44.78% for a Aaa liability target rating, a diversity score of
59 and a weighted average spread of 3.65%.

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

Its analysis has considered the effect of the coronavirus outbreak
on the global 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.

The contraction in economic activity in the second quarter will be
severe and the overall recovery in the second half of the year will
be gradual. However, there are significant downside risks to its
forecasts in the event that the pandemic is not contained and
lockdowns have to be reinstated. As a result, the degree of
uncertainty around its forecasts is unusually high. Moody's regards
the coronavirus outbreak as a social risk under its ESG framework,
given the substantial implications for public health and safety.

Methodology Underlying the Rating Action:

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

Counterparty Exposure:

The rating action took into consideration the notes' exposure to
relevant counterparties, such as account bank, using the
methodology "Moody's Approach to Assessing Counterparty Risks in
Structured Finance" published in June 2020. Moody's concluded the
ratings of the notes are not constrained by these risks.

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

This transaction is 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. In particular, the length and severity of the
economic and credit shock precipitated by the global coronavirus
pandemic will have a significant impact on the performance of the
securities. CLO notes' performance may also be impacted either
positively or negatively: by (1) the manager's investment strategy
and behaviour; and (2) divergence in the legal interpretation of
CDO documentation by different transactional parties because of
embedded ambiguities.

Additional uncertainty about performance is due to the following:

  -- Weighted average life: The notes' ratings are sensitive to the
weighted average life assumption of the portfolio, which could
lengthen as a result of the manager's decision to reinvest in new
issue loans or other loans with longer maturities, or participate
in amend-to-extend offerings. The effect on the ratings of
extending the portfolio's weighted average life can be positive or
negative depending on the notes' seniority.

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

  -- Other collateral quality metrics: Because the deal can
reinvest, the manager can erode the collateral quality metrics'
buffers against the covenant levels.

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


HARVEST CLO XXIV: Fitch Assigns BB-(EXP) Rating on Cl. E Debt
-------------------------------------------------------------
Fitch Ratings has assigned Harvest CLO XXIV DAC expected ratings.

RATING ACTIONS

Harvest CLO XXIV DAC

Class A;   LT AAA(EXP)sf;  Expected Rating

Class B-1; LT AA(EXP)sf;   Expected Rating

Class B-2; LT AA(EXP)sf;   Expected Rating

Class C;   LT A(EXP)sf;    Expected Rating

Class D;   LT BBB-(EXP)sf; Expected Rating

Class E;   LT BB-(EXP)sf;  Expected Rating

TRANSACTION SUMMARY

Harvest CLO XXIV DAC is a securitisation of mainly senior secured
obligations (at least 95%) with a component of senior unsecured,
mezzanine, second-lien loans and high-yield bonds. Note proceeds
will be used to fund a portfolio with a target par of EUR250
million. The portfolio is actively managed by Investcorp Credit
Management EU Limited. The collateralised loan obligation (CLO) has
a three-year reinvestment period and a seven-year weighted average
life (WAL).

KEY RATING DRIVERS

'B' Portfolio Credit Quality: Fitch assesses the average credit
quality of obligors to be in the 'B' category. The Fitch weighted
average rating factor (WARF) of the identified portfolio is 32.77.

High Recovery Expectations: At least 95% of the portfolio will
comprise senior secured obligations. Fitch views the recovery
prospects for these assets as more favourable than for second-lien,
unsecured and mezzanine assets. The Fitch weighted average recovery
rate (WARR) of the identified portfolio is 64.39%.

Diversified Asset Portfolio: The transaction includes several Fitch
test matrices corresponding to the two top 10 obligors'
concentration limits. The manager can interpolate within and
between four matrices. The transaction also includes various
concentration limits, including the maximum exposure to the three
largest (Fitch-defined) industries in the portfolio at 40%. These
covenants ensure that the asset portfolio will not be exposed to
excessive concentration.

Portfolio Management: The transaction has a three-year reinvestment
period and includes reinvestment criteria similar to those of other
European transactions. Fitch's analysis is based on a stressed-case
portfolio with the aim of testing the robustness of the transaction
structure against its covenants and portfolio guidelines.

Cash Flow Analysis: Fitch used a customised proprietary cash flow
model to replicate the principal and interest waterfalls and the
various structural features of the transaction, and to assess their
effectiveness, including the structural protection provided by
excess spread diverted through the par value and interest coverage
tests.

RATING SENSITIVITIES

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

A 25% default multiplier applied to the portfolio's mean default
rate, and with this subtracted from all rating default levels, and
a 25% increase of the recovery rate at all rating recovery levels,
would lead to an upgrade of up to five notches.

The transaction features a reinvestment period and the portfolio is
actively managed. At closing, Fitch uses a standardised stress
portfolio (Fitch's Stressed Portfolio) that is customised to the
specific portfolio limits for the transaction as specified in the
transaction documents. Even if the actual portfolio shows lower
defaults and losses (at all rating levels) than Fitch's Stressed
Portfolio assumed at closing, an upgrade of the notes during the
reinvestment period is unlikely, as the portfolio credit quality
may still deteriorate, not only through natural credit migration,
but also through reinvestments.

After the end of the reinvestment period, upgrades may occur in
case of a better than initially expected portfolio credit quality
and deal performance, leading to higher credit enhancement for the
notes and excess spread available to cover for losses on the
remaining portfolio.

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

A 125% default multiplier applied to the portfolio's mean default
rate, and with the increase added to all rating default levels, and
a 25% decrease of the recovery rate at all rating recovery levels,
would lead to a downgrade of up to four notches for the rated
notes.

Downgrades may occur if the build-up of credit enhancement for the
notes following amortisation does not compensate for a higher loss
expectation than initially assumed due to an unexpectedly high
level of default and portfolio deterioration. As the disruptions to
supply and demand due to the COVID-19 disruption become apparent
for other vulnerable sectors, loan ratings in those sectors would
also come under pressure. Fitch will update the sensitivity
scenarios in line with the view of Fitch's Leveraged Finance team.

Coronavirus Baseline Scenario Impact: Fitch carried out a
sensitivity analysis on the target portfolio to envisage the
coronavirus baseline scenario. The agency notched down the ratings
for all assets with corporate issuers on Negative Outlook
regardless of sector. This scenario shows the resilience of the
assigned ratings, with substantial cushion across rating
scenarios.

Fitch also considered the possibility that the stress portfolio,
determined by the transaction's covenants, would further
deteriorate due to the impact of coronavirus mitigation measures.
Fitch believes this circumstance is adequately addressed by the
inclusion of the downwards notching by a single subcategory of all
collateral obligations on Negative Outlook for the purposes of
determining compliance to Fitch WARF at the effective date.




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

BANCA IFIS: Fitch Affirms BB+ LongTerm IDR, Outlook Negative
------------------------------------------------------------
Fitch Ratings has affirmed Banca IFIS's Long-Term Issuer Default
Rating at 'BB+' and Viability Rating at 'bb+'. All ratings have
been removed from Rating Watch Negative. The Outlook on the
Long-Term IDR is Negative.

The affirmation of the ratings primarily reflects its expectation
that IFIS will maintain sufficient capital buffers despite expected
deterioration of asset quality and profitability in the current
economic downturn. Fitch also expects funding to remain stable,
helped by the bank's good deposit franchise.

The Negative Outlook reflects its view that risks remain tilted to
the downside, especially if the recession proves deeper or the
recovery is weaker than its baseline economic scenario, challenging
IFIS's franchise to generate profits and increasing execution risks
to the bank's strategic and commercial initiatives.

KEY RATING DRIVERS

IDRS, VR AND SENIOR UNSECURED DEBT

The ratings of IFIS are underpinned by its adequate capitalisation
and buffers over minimum Supervisory Review and Evaluation Process
(SREP) requirement. IFIS benefits from a specialised business model
with an established franchise as purchaser of domestic unsecured
retail impaired loans, which Fitch expects to remain an important
and profitable business. It also has moderate franchises in key
business segments such as factoring, leasing and structured finance
solutions to domestic SMEs. These latter businesses are
particularly vulnerable to Italy's economic fallout from the
coronavirus crisis. As a result, Fitch expects asset quality and
earnings pressures to intensify.

Under Fitch's forecasts, Italy's GDP is likely to contract 9.5% in
2020 before seeing a partial recovery of 4.2% in 2021. However,
risks to this baseline forecast are tilted to the downside, as it
assumes that coronavirus can be contained in 2H20, leading to a
fairly strong economic rebound in 2021. However, the strength of
the recovery beyond 2021 is highly uncertain, given the underlying
weaknesses of the economy and Italy's poor performance following
the global financial crisis, with only around half of the lost
output regained by 2012.

IFIS's CET1 ratio of 14.6% at end-March 2020 compares well with
other domestic second-tier banks' and had reasonably good buffers
over the minimum requirements, providing some downside protection
against the impact of the economic downturn. IFIS enters the
downturn with a CET1 capital encumbrance from unreserved impaired
loans of about 30%, which remained stable since 2016 and compares
well with most domestic peers. Capitalisation remains nonetheless
at risk from large Italian sovereign bond holdings, which at
end-March 2020 increased to about 120% of CET1 capital from 33% at
end-2018. Fitch expects encumbrance from unreserved impaired loans
to increase as asset quality weakens.

Its assessment of asset quality acknowledges that IFIS's
non-traditional activity as NPL (non-performing loan) investor
implies a high stock of impaired loans, but also that credit risk
arising from purchased NPLs remains manageable despite its
expectation of widespread borrower deterioration in Italy. This
view is underpinned by the bank's conservative pricing of these
loans and history of good recoveries. Fitch believes that IFIS,
leveraging on its well-established expertise in the impaired loan
business, will capitalise on opportunities from increasing impaired
loan disposals in the banking industry.

When excluding purchased impaired loans, IFIS's impaired loans
ratio falls to 8.5% at end-March 2020 from nearly 26%, which is
slightly above domestic average at about 8%. Given IFIS's
significant exposure to the SME segment and higher vulnerability to
the economic fallout, Fitch expects impaired loans to increase
despite the presence of government support measures as ultimately
some borrowers will exit the crisis in a weaker financial position.
The short-term nature of IFIS's lending business, together with
industry diversification, could also mitigate asset-quality
pressures. The extent of the increase will also depend on the
duration of the crisis. The impaired loan coverage, at above 50%,
is adequate given IFIS's expertise in managing impaired loans
through the bank's well-established and sophisticated internal
workout.

IFIS's operating profitability has been gradually declining since
2017, mainly because of decreasing contribution of Interbanca's
assets to net interest income in the form of purchase price
allocation (PPA) and lower contribution of income from the
securities portfolio. Fitch expects new NPL business to continue to
contribute significantly to the bank's revenue (on average 60% in
the past three years). However, Fitch expects earnings pressure
from further PPA reduction, tighter operating margins due to stiff
competition in its traditional activities and higher loan
impairment charges. Some relief could come from lower cost of
funding, due to cheaper ECB facilities, and increased revenues
generated from a larger government securities portfolio, which
Fitch expects to remain in place in the medium term.

Customer deposits are generally stable and gathered through its
online savings accounts. The bank has been increasing access to the
wholesale markets through unsecured senior (preferred) debt
issuance, although funding diversification remains limited.
Liquidity is sound as a significant proportion of its assets is
short-term.

The Short-Term IDR of 'B' maps to, and the senior unsecured debt
rating of 'BB+' is aligned with, the bank's Long-Term IDR.

SUPPORT RATING AND SUPPORT RATING FLOOR

The Support Rating of '5' and Support Rating Floor of 'No Floor'
reflect Fitch's view that, although external support is possible,
it cannot be relied upon. Senior creditors can no longer expect to
receive full extraordinary support from the sovereign in the event
that the bank becomes non-viable.

The EU's Bank Recovery and Resolution Directive and the Single
Resolution Mechanism for eurozone banks provide a framework for the
resolution of banks that requires senior creditors to participate
in losses, if necessary, instead of or ahead of a bank receiving
sovereign support.

SUBORDINATED DEBT

The subordinated debt of IFIS is notched down twice from its VR for
loss severity to reflect poor recovery prospects. No notching is
applied for incremental non-performance risk because write-down of
the notes will only occur once the point of non-viability is
reached and there is no coupon flexibility before non-viability.

DEPOSIT RATINGS

IFIS's long-term deposit rating has been removed from RWN and
upgraded to 'BBB-', one notch above the Long-Term IDR, since
despite not having a MREL requirement, the bank plans to operate
with combined buffers of senior and Tier 2 debt at above 10% of its
risk-weighted assets (RWAs). This is based on its expectations that
it will successfully implement its funding plan. At end-March 2020,
IFIS had senior and Tier 2 debt outstanding equal to nearly 16% of
RWAs. Its 'F3' short-term deposit rating maps to its 'BBB-'
long-term deposit rating.

RATING SENSITIVITIES

IDRS, VR AND SENIOR UNSECURED DEBT

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

The Outlook could be revised to Stable if the bank stabilises its
profitability, reversing its downtrend since 2017, while
maintaining good control over new loan originations and adequate
capitalisation.

While rating upside is currently limited, IFIS's ratings could be
upgraded on a stronger and more stable operating environment
positively impacting the bank's operating profitability, asset
quality and capitalisation.

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

IFIS's IDRs, VR and senior unsecured debt ratings are sensitive to
the depth and duration of the economic crisis caused by the
pandemic and its impact on the bank's financial profile. If an
economic recovery in Italy is delayed, resulting in an extended
period of damage to the bank's asset quality, earnings and
ultimately capital, which would be difficult to restore in a
reasonably short time frame, the ratings could be downgraded.

SUPPORT RATING AND SUPPORT RATING FLOOR

An upgrade of the Support Rating and upward revision of the Support
Rating Floor of IFIS would be contingent on a positive change in
the sovereign's propensity to support the bank. In Fitch's view,
this is highly unlikely, although not impossible.

SUBORDINATED DEBT

The subordinated debt's rating is primarily sensitive to changes in
the VR, from which it is notched. The rating is also sensitive to a
change in the notes' notching, which could arise if Fitch changes
its assessment of their non-performance relative to the risk
captured in the VR.

DEPOSIT RATINGS

The deposit ratings are primarily sensitive to changes in the
bank's Long-Term IDR. The deposit ratings are also sensitive to a
reduction in the size of the senior unsecured and junior debt
buffers below 10% of RWAs with no prospects to restore this in the
short term or a change in the bank's funding strategy to operate
with buffers below 10% of RWAs.

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).


CENTURION BIDCO: Fitch Assigns B+(EXP) LongTerm IDR, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has assigned Centurion Bidco S.p.A. a first-time
expected Long-Term Issuer Default Rating of 'B+(EXP)' with a Stable
Outlook. Additionally, Fitch has assigned the senior secured notes
issued by Centurion an expected rating of 'BB-(EXP)'/'RR3'.

Centurion is an entity incorporated by PE funds advised by Bain
Capital and NB Renaissance Partners to complete the acquisition of
Engineering - Ingegneria Informatica S.p.A. (EII). EII is a leading
Italian software developer and provider of IT services, with a
top-tier market position in the country's IT application space and
a distinctive presence in sectors such as financial services,
healthcare and public administration.

The assignment of final ratings is contingent on the completion of
the acquisition of Centurion by the PE funds, the issue of the
rated SSN, and the receipt of final documents conforming to
information already received.

KEY RATING DRIVERS

Strong Position in Italy: EII ranks among the top-three players in
Italy in implementation and management of software applications,
with a market share of around 10%. Its scale and reputation have
helped EII generate above-GDP growth over the last 20 years, driven
by organic and inorganic investments. Fitch believes that EII will
be able to capitalise on expected growth in digital investments in
the country, which still lags the rest of western Europe. However,
the local market remains competitive.

Short Term Impact on Revenues: Its contract base has been resilient
due to the frequent renewal of outsourcing contracts, despite most
services being offered without a subscription model. Total and
organic revenues have consistently grown, with minor dips in 2009,
due to a disposal, and 2012. Fitch expects organic revenue to be
broadly stable in 2020, of which 85% is due to a backlog of orders.
Fitch projects 2% sales growth in 2021 due to the coronavirus
impact on certain sectors such as public administration and
industrials. Fitch factors in acquisitions of EUR60 million per
year for 2022-2023, at an average 6x enterprise value (EV)/EBITDA,
feeding into overall revenue CAGR of 5.8% for 2020-2023.

Constrained Margins: A significant portion of EII's revenue is
driven by IT projects run on a consultancy basis, resulting in
lower EBITDA margin than pure-play software peers. Personnel costs
make up about 60% of the cost base, while another 25% is for
outsourced technical support services. The latter provides scope
for cutbacks when revenue dips. Fitch expects EBITDA margins of 12%
for 2020, growing towards 13% in 2021, partially benefitting from
efficiency initiatives implemented by management.

Limited Deleveraging Capacity: Fitch forecasts high funds from
operations (FFO) gross leverage at 4.8x at end-2020 and to peak at
5.1x at end-2021, due to expected slowdown of organic revenues and
an increase in gross debt to fund acquisitions. EBITDA growth will
be key to deleveraging to 4.6x in 2023. Together with FFO interest
coverage of around 4.0x, Fitch assesses EII's leverage profile as
commensurate with a 'B+' rating. This recognises the full equity
features of the EUR216 million payment-in-kind (PIK) toggle notes
issued by TopCo Centurion Newco SpA, which do not have any
cross-default provision affecting the senior secured notes.

Positive Free Cash Flow: The business model is characterised by low
capital intensity, by R&D costs that are mainly expensed, but also
by significant working capital swings. Its contracts mean a
proportion of revenues are deferred until cash is collected, while
relevant investments in client receivables are required to secure
contracts. Fitch does not adjust for deferred revenues in EBITDA,
although they are reflected in FFO and accounted for in FCF.
Overall, Fitch expects FCF margins to average around 3% in
2020-2023.

Diversification by Sector: EII's revenues are almost entirely
exposed to the Italian market, but are diversified among sectors
including financial services, public authorities and healthcare.
Around 45% comes from internally developed software solutions that,
in most cases, play a critical role in customer's workflow, while
the remainder includes customising third-party products and
operations management. Over 50% of services involve
digital-enabling technologies such as cloud services, AI and
cybersecurity, while the balance involves more traditional
operations. Contracts are mostly signed on a single-project basis,
with upfront payments but with an increasing share from two to
five-year service contracts.

Cloud-Led Market Growth: Fitch expects cloud services to be a
significant source of growth and disruptive to the software and
technology services industry. Fitch expects EII to leverage on both
its significant domestic market share and its relationships with
cloud incumbents to capitalise on the digital transition of IT
services in Italy. However, Fitch sees technology transition risks
associated with around 45% of EII's revenue base that still comes
from traditional services, which may see diminishing profitability
if they do not transition to digital platforms as planned by
management.

Recurring Revenues Critical: Fitch sees potential improvements in
EII's business profile as strongly linked to the growth of the
group's recurring revenue base and to an increase in
business-critical services for clients. A better mix towards
proprietary software solutions and a development of the revenue
base toward a subscription model would provide a more resilient
revenue stream. These developments would also transition the
business away from the current contract-led model that requires
high working capital investments.

DERIVATION SUMMARY

EII is well-positioned in the Italian IT software and services
markets due to its diversified client base and to its longstanding
capabilities as an innovative proprietary solutions developer and
third-party systems integrator. Its capabilities translate into a
top-tier market share in the country and a stable contract base.
Its project-led business model generates a lower-than-sector
average EBITDA margin, although it results in a stable FCF profile.
Its rating reflects technological know-how and leading market
position in Italy, a contract-base revenue model and high
leverage.

Its Fitch-rated peers include ERP software-as-a-service provider
Teamsystem Holdings SpA (B/Stable) and the web-hosting software
company Particle Luxembourg S.A R.L. (WebPros, B/Stable). EII
generates higher revenue, lower capex requirements and lower
leverage than Teamsystem, but the latter's business model has a
subscription base driving a predominant share of predictable and
recurring revenues that convert into healthy FCF. As a result,
Fitch aligns EII's leverage downgrade sensitivity with Teamsystems'
leverage upgrade sensitivity.

More general comparisons can be made with payment processing
providers such as Nexi S.p.A. (BB/RWN) and Nets Topco Lux 3 Sarl
(Nets, B+/Stable). The competitive position of Nets and Nexi are
stronger than EII's, with material barriers to entry and high
revenue predictability. As a result, Nets' 'B+' rating is
compatible with significantly higher leverage.

KEY ASSUMPTIONS

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

  - Organic revenue broadly stable in 2020

  - Revenue growth of 3% in 2021, followed by around 10% per year
in 2022 and 2023, driven by organic and M&A-led expansion

  - EBITDA margin stable around 13% from 2021 onwards after a
slight drop to 12% in 2020

  - Working capital outflow of EUR20 million in 2020, increasing to
EUR33 million in 2023 in line with revenue growth

  - Capex at around 2% of revenue per year until 2023

  - Acquisitions of EUR24 million in 2021 and EUR60 million from
2022 onwards

KEY RECOVERY RATING ASSUMPTIONS

The recovery analysis assumes that EII would be considered a going
concern (GC) in bankruptcy, and that it would be reorganised rather
than liquidated, given the inherent value behind its contract
portfolio, its incumbent software licenses and strong client
relationships. Fitch has assumed a 10% administrative claim.

Fitch assesses the group's going concern EBITDA at about EUR115
million. Fitch estimates that at this level of EBITDA, after the
undertaking of corrective measures, EII would generate zero to
slightly positive FCF.

Financial distress, leading to a restructuring, may be driven by
EII falling technologically behind its competitors, losing its
clients' business-critical projects, or by a deep recession causing
widespread cuts to non-critical outsourcing. Given its elevated
leverage, a restructuring would primarily be triggered by an
increase in leverage in a financial distress, leading to
unsustainable debt multiples and placing its EV under pressure and
squeezing its equity.

An EV multiple of 5.5x EBITDA is applied to the GC EBITDA to
calculate a post-reorganisation EV. This is in line with multiples
used for other software-focused ratings in the 'B' category.

Its recovery analysis includes EUR650 million SSNs after assuming a
fully-drawn super senior revolving credit facility (RCF) of EUR160
million. Fitch also takes into account around EUR10.5 million of
bilateral facilities at unrestricted subsidiaries. The debt
waterfall analysis results in expected recoveries of 60% for the
senior secured debt, resulting in a 'RR3' Recovery Rating and a
'BB-' instrument rating. Based on its criteria, the instrument
recovery ratings are capped at 'RR3' in Italy.

RATING SENSITIVITIES

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

  - FFO gross leverage below 4.5x

  - FFO interest coverage above 4.0x

  - Increase of subscription-based recurring sales in the revenue
mix

  - Improved cash generation, including deferred revenues and
client receivables, leading to increasing FCF

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

  - FFO gross leverage above 6.0x due to low profit growth or
debt-funded acquisitions

  - FFO interest coverage below 2.5x

  - Deterioration in quality of revenues towards a less recurring,
contract-led revenue model

  - Worsening FCF margin below 2% through-the-cycle with increase
in cash outflows from working capital and higher capex
requirements

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).


ENGINEERING SPA: S&P Assigns Prelim. 'B' Issuer Credit Rating
-------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B' issuer credit
rating to Engineering SpA (Centurion Bidco SpA) and its preliminary
'B' issue rating to the proposed senior secured notes.

S&P expects Engineering's adjusted debt to EBITDA to peak at about
8.1x in 2020 and improve toward 6.3x by 2022.

Bain Capital and NB Renaissance Partners, in partnership with
management, agreed to buy Engineering SpA from its current
shareholders for a total cash consideration of around EUR1.7
billion, including transaction fees, expenses and refinancing of
existing debt. The transaction will be financed by a combination of
debt and equity as follows:

-- Senior secured fixed- and floating-rate notes of EUR640
million,

-- PIK notes of EUR216 million, and

-- A cash equity injection of EUR676 million.

S&P anticipates that adjusted leverage should improve toward 6.8x
in 2021 and 6.3x by 2022 under our conservative base case, owing to
ongoing absolute EBITDA and FOCF growth from supportive industry
demand, strengthening revenue mix with more value-added projects,
and improved operating leverage, thanks to the development of
Engineering's nearshore resources in Serbia.

S&P anticipates that Engineering will slightly improve its
profitability in 2020 despite some pressure from COVID-19 related
disruptions, and will accelerate its EBITDA growth in 2021.  IT
services has been relatively under-penetrated in Italy compared
with Western and Northern European countries such as the U.K.,
France, Spain, and Germany. Coupled with an ongoing trend of
digital transformation across all businesses, this has helped
Engineering to expand by about 10%, on average, per year since 2003
(6% organic growth over the same period).

That said, S&P believes the second half of 2020 could be hit by the
COVID-19-related economic crisis. This is despite Engineering's
good trading from January to May (revenue growth of 1.8% and EBITDA
of 15.1% from the corresponding period in 2019), and resilience,
with limited disruption to its ability to deliver to clients during
the lockdown. S&P said, "We expect a 10% contraction in Italy's GDP
in 2020 due to COVID-19-related economic measures. Although not as
severe as the hospitality or tourism industry, we think the IT
services market could be hit by economic contraction in 2020. This
is because this sector tends to track economic growth and cycles.
As a result, traditional services could face pricing pressure while
big transformation projects--which usually have long sales
cycles--could be delayed by a few quarters. We therefore expect
Engineering's revenues to decline by 2.9% in 2020, with EBITDA and
adjusted FOCF remaining at 2019 levels, but preventing the company
from significantly reducing leverage before 2022." In 2020, growth
in the healthcare and finance segments (which accounted for 40% of
EBITDA) will mitigate an expected decline in manufacturing, retail
and transportation, energy and utilities, and the telco and media
industry, which together account for around 40% of Engineering's
EBITDA.

S&P said, "From 2021, we expect Italian GDP growth to bounce back
to 6%-7%. As such, we anticipate that industry demand, the trend of
digital transformation of businesses, and Engineering's solid
positioning and strong technical capabilities to support robust 6%
growth from 2021. We expect EBITDA to increase by about 22% in 2021
and 11% in 2022, from below 3% in 2020, with profitability
improving beyond 13% of revenues."

Engineering is the largest local IT player in Italy with solid No.
1 or close No. 2 positions across key industry verticals.
Engineering is the largest local IT player in Italy with a 10%
market share in application implementation and solid No. 1 or close
No. 2 positions across key industry verticals. It has consistently
increased its market shares thanks to its successful positioning in
Italy (mostly targeting midsize companies and a few Italian large
caps), while benefiting from Italy's cultural and language
barriers.

Engineering's leading positon in the Italian market is further
supported by its vertical offering of proprietary software
solutions -- accounting for about 45% of revenues in 2019 -- which
are supported by its solid R&D and technology capabilities. This
has resulted in entrenched relationships with its customers
(average relationship of at least 10 years with a high retention
rate) leading to a sticky business model, solid organic growth
since 2003 (6% over 2003-2019, compound annual growth rate), and
sound free cash flow generation. Engineering has achieved this
while generally fighting off competition from global IT services
players.

Engineering is the No. 1 player for application implementation with
10% market share in Italy in 2019 (in terms of revenue, competing
with Accenture, which also has a 10% market share) and No. 4
challenger for application management with 7% market share.
Engineering is either No. 1 or No. 2 across all key verticals, in
particular, energy and utilities with a 23% market share in 2019,
followed by Accenture (14%), and public administration,
municipalities, and healthcare with 15% market share. In finance,
Engineering has about 8% market share, just after Accenture (10%).
Furthermore, Engineering has solid end-market diversity as no
vertical accounts for more 22% of revenues.

Engineering's moderate capital expenditure (capex; excluding
capitalized R&D of about 1.0% of revenues) and high share of
revenues generated from digital enabling technologies and
proprietary solutions support solid annual FOCF generation (after
leases). S&P expects FOCF of around EUR50 million in 2020 and 2021,
in line with 2019.

At the same time, these strengths are partially balanced by
Engineering's limited geographical diversification, with 86% of
revenues generated in Italy; moderate customer concentration (top
10 accounts for 34% of 2019 revenues); relatively small scale and
moderate profitability (below peer average); and very little
operating leverage (59% of costs are fixed; nearshore activity
represented about 1% of full-time employees, in Serbia).
Furthermore, Engineering operates in a highly fragmented IT
services market where it competes against larger,
better-capitalized global IT services players, such as Accenture
and IBM.

S&P said, "The stable outlook reflects our expectation that
Engineering will not be materially hit by the current pandemic and
the subsequent recession. It also takes into account that leverage
-- after peaking at around 8.0x in 2020 -- will likely drop
thereafter, driven by EBITDA growth in 2021, underpinned by
supportive market trends and Engineering's solid positioning and
superior technical capabilities. Furthermore, we expect the company
to maintain its solid cash flow conversion by maintaining FOCF to
debt at least above 5%.

"We could lower the rating if EBITDA growth is lower than we
expect, leading to adjusted leverage rising to well above 9.0x. We
could also lower the rating if FOCF to debt weakens significantly
toward 0%. In our view, this could result from weaker-than-expected
operating performance, either due to slower economic recovery in
2021 or increasing competition from larger peers bringing down
pricing.

"We could raise the rating by one notch if Engineering is resilient
through 2021, sustainably reducing adjusted leverage below 7.0x
while strengthening FOCF to debt above 7%."




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

KCELL JSC: Fitch Raises LongTerm IDR to BB+, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has upgraded Kcell JSC's Long-Term Issuer Default
Rating (IDR) to 'BB+' from 'BB'. The Outlook is Stable.

The upgrade follows a similar rating action on its parent
Kazakhtelecom JSC to 'BBB-', as Kcell's rating is driven by an
overall strong linkage to the latter. The single-notch rating
differential between Kcell and Kazakhtelecom reflects Kcell's
standalone status of a public company with significant minority
shareholding and the parent's commitment to running Kcell as a
separate entity.

Kcell is the market-leading mobile-only operator in Kazakhstan and
heavily relies on its parent for the provision of its backbone and
mobile network infrastructure. Its Standalone Credit Profile (SCP)
is 'bb'. Fitch expects its leverage to remain moderate and to not
exceed 2.5x on a funds from operations (FFO) net basis.

KEY RATING DRIVERS

Strong Parental Linkage: Fitch assesses the overall
parent-subsidiary linkage between Kcell and its parent
Kazakhtelecom as strong, with the parent being the stronger entity.
Kcell is rated using a top-down approach, one notch below
Kazakhtelecom's consolidated credit profile.

Kazakhtelecom is the national incumbent telecoms operator, with
strong market positions in fixed-line/broadband, pay-TV and also
mobile with more than 60% of the mobile market through its
subsidiaries.

Weak Legal Ties: Fitch views the legal ties between Kcell and
Kazakhtelecom as weak given the lack of parental guarantees on a
significant amount of the former's debt. Kcell is likely to remain
Kazakhtelecom's material subsidiary, with some cross-default
provisions in place. Any intercompany loans to the parent would
need approval from Kcell's independent directors only, which limits
the parent's ability to tap cash flows of its subsidiary. This is
because one of the regulatory conditions for Kazakhtelecom's
acquisition of Kcell was the former's commitment to run the latter
as a separate subsidiary, with its own board, management and
strategy.

Strong Operating Ties: Operating ties between Kcell and its parent
are strong. Kcell lacks ubiquitous backbone network coverage across
Kazakhstan, and relies heavily on Kazakhtelecom for this
connectivity. Fitch expects this relationship to continue, and also
expect Kcell to more actively share mobile infrastructure with its
mobile sister companies, increasing operating ties with the
Kazakhtelecom group. However, management commonality is likely to
remain low, and Fitch expects Kcell to maintain its independent
treasury functions.

Strong Strategic Ties: Fitch views strategic ties between Kcell and
its parent as strong. Control over Kcell allows Kazakhtelecom to
have leading market positions in the Kazakh mobile market, with
Kcell servicing about 32% of the country's mobile subscribers at
end-2019. Active infrastructure and potentially spectrum sharing
across the Kazakhtelecom group may allow for more efficient and
faster network upgrades and roll-out, including 5G.

'bb' SCP: Kcell's 'bb' SCP reflects the company's leading mobile
market positions, but also heavy dependence on infrastructure
sharing, smaller size versus higher-rated mobile-only peers',
market share pressures, and projected moderate leverage of no more
than 2.5x on a FFO net basis.

Impact of Market Consolidation: The mobile market consolidation at
end-2018 helped to stabilise a competitive environment in
Kazakhstan, with a stronger emphasis on quality rather than price.
All Kazakh mobile operators reported revenue growth and improving
average revenue per user (ARPU) in 2019, reversing a long-lasting
downtrend. Overall, the Kazakh telecoms market grew 9.8% yoy in
2019, by official estimates, signalling brighter growth prospects
over the medium-term.

Tighter Integration with Kazakhtelecom: Closer integration with
Kazakhtelecom may help achieve additional synergies, both on
revenue and costs/capex, and expedite entry into new market niches.
Kcell is going to explore tighter product integration with its
parent and offer fixed-mobile bundles, particularly in the B2B
segment. Expansion into new markets such as financial services,
cloud and big-data-enabled services may be facilitated by a
potentially larger addressable customer base of both companies
leading to scale benefits. Fitch expects future 5G development
costs to be broadly shared across the Kazakhtelecom group.

Coronavirus Stress Manageable: Fitch believes Kcell is likely to
see a fairly mild negative impact from the coronavirus pandemic.
The impact from lower roaming by foreign visitors is
insignificant.

Moderate Leverage: Fitch expects Kcell's leverage to remain
moderate, at below 2.5x on an FFO net basis (it was 0.9x at
end-2019). Its dividend policy of paying between 50% and 100% of
free cash flow (defined by Kcell as a sum of operating and
investing cash flows) helps align shareholder distributions with
the company's financial performance. Fitch expects deleveraging
flexibility to be supported by modest revenue growth and improving
profitability but also positive cash flow generation.

Projected Decline in FCF: Fitch projects FCF to decline but remain
positive. Kcell is likely to increase capex in 2020-2022 after a
period of low investments (cash capex was at 10.6% of revenues on
average in 2018-2019) and run negative net cash outflows from
working capital changes, driven by a continuing rise in handset
equipment sales.

DERIVATION SUMMARY

Kcell's operating profile is similar to that of Russian mobile
peers PJSC Mobile TeleSystems (MTS; BB+/Stable) and PJSC MegaFon
(BB+/Stable), but the Russian operators benefit from significantly
larger scale, greater presence in the fixed-line/broadband segment
(on a standalone basis), a largely proprietary backbone/mobile
infrastructure and an extensive 4G roll-out. Leverage is typically
moderate across the peer group, with Kcell's leverage being at the
lower end.

KEY ASSUMPTIONS

Fitch's key assumptions within the rating case for Kcell include:

  - Mid single-digit revenue growth in 2020, easing to low
single-digits by 2023

  - Modestly improving EBITDA margin to 36% in 2020

  - Negative working capital cash outflows of above KZT3 billion
per annum until 2023

  - Capex at 15%-17% of revenues in 2020-2021, easing to 13% until
2023

  - Rising dividends in line with the company's dividend policy and
improving cash flow generation

RATING SENSITIVITIES

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

  - An upgrade of Kazakhtelecom, provided parent-subsidiary linkage
remains strong

  - Stronger linkage to Kazakhtelecom, including through
shareholder funding or guarantees provided by Kazakhtelecom on a
significant amount of Kcell's debt

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

  - A downgrade of Kazakhtelecom provided parent-subsidiary linkage
remains strong

  - Weaker linkage to Kazakhtelecom including from higher leverage
sustainably above 3.3x on an FFO net basis without a clear path for
deleveraging and no commitment by the parent to provide financial
support

LIQUIDITY AND DEBT STRUCTURE

Comfortable Liquidity: Fitch views Kcell's liquidity as
comfortable, with KZT11.2 billion cash at end-March 2020, supported
by a KZT42 billion credit line available for draw down till
end-2021 and maturity of up to end-2025. Kcell utilised KZT15
billion of the credit line in April 2020 to pre-fund its above
KZT20 billion bond redemption in early 2021.

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).




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

GEOPROMINING INVESTMENT: Fitch Affirms B+ LT IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed gold producer GeoProMining Investment
Limited's (GeoProMining) Long-Term Issuer Default Rating (IDR) at
'B+' with a Stable Outlook.

The rating of GeoProMining reflects its small scale of operations;
its medium-to high-cost position; and concentration of activities
in Russia and Armenia. The rating also reflects the group's
technological expertise in operating the Albion technology,
resulting in improved gold recovery; satisfactory product
diversification; and a long mine life of 15-18 years.

The Stable Outlook reflects its forecast of relatively stable
credit metrics over 2020-2023 (with temporary leverage increase in
2021) and its view that the company's rating is constrained by its
scale of operations. Fitch incorporates in its forecasts the
successful implementation of the group's expansionary strategy at
the Verkhne-Menkeche mine from 2022.

KEY RATING DRIVERS

Small Scale but Satisfactory Diversification: GeoProMining's small
operations generated EBITDA of USD154 million and 172,000 oz of
gold output in 2019. This compares with Nord Gold SE (BB/Stable,
1,041,000 oz) or PJSC Polyus (BB/Stable; 2,841,000 oz). Despite
satisfactory product diversification, the scale of its operations
constrains the rating at 'B+'. GeoProMining has an important role
in the global antimony market, controlling up to 10% of global
antimony resources and with high-quality reserves. The antimony
segment shows comfortable profit margins of 40%-60% due to the high
grade of the mine's reserves and the presence of gold as a
by-product.

Albion Technology Improves Productivity: The implementation of the
Albion technology, which combines ultrafine grinding and oxidative
leaching under atmospheric pressure, has more than doubled gold
recovery rates since 2014. The technology is used at the Ararat
gold recovery plant for processing gold from the Zod mine in
Armenia, which covers most of GeoProMining's gold production and
about 65% of its revenue. The group has acquired significant
technology expertise, and is the first gold miner globally to
utilise this processing technique.

Competitive Gold Cost Position: The group's main asset, GPM Gold,
which includes the Zod gold mine, sits between the second and the
third quartile of the gold cash cost curve. This position is
supported by high-grade reserves at its GPM Gold site (3.4 grams a
tonne), largely above industry averages. At end-2019, GPM Gold's
total cash cost amounted to USD595/oz, versus USD712/oz for Nord
Gold and USD786/oz for Petropavlovsk plc (B-/Positive).

Medium-High Cost Position: GeoProMining does not provide a cash
cost breakdown per metal for its other assets. EBITDA margin at the
Agarak mill (copper-molybdenum mine) in Armenia was 24% in 2019,
versus 45% at the Sakha segment in Russia, which includes Sarylakh
and Sentachan (gold-antimony mines), and 61% at Verkhne-Menkeche
(sale of ore in 2019). Fitch views the group's overall cash cost
position as second to third quartile. The mines' long life, with 18
years at GPM Gold and approximately 15 years at Sarylakh-Surma and
Sentachan plus operational advances derived from the Albion
technology bolster the group's operational profile.

Consistent Organic Growth: The development and rehabilitation of
GeoProMining's assets has largely driven growth. Fitch expects
management to keep focusing on asset optimisation and development.
In particular, the group is increasing production capacity at its
Ararat (GPM Gold site) and Agarak concentrating mills in Armenia,
and launched a new concentrating mill near its Sentachan site in
Russia in 4Q19. These projects should increase throughput and
improve logistics, but with only a moderate impact on cash flow
generation.

New Metal to Increase Diversification and Scale: From 2021, the
group will start producing silver (currently a by-product at GPM
Gold), lead and zinc from its Verkhne-Menkeche site, after
completion of a processing facility. Fitch expects production from
this mine to significantly scale up total output and improve
product diversification, adding around USD60 million revenue by
2022, based on Fitch's price assumptions.

Financial Profile Commensurate with Rating: Fitch expects the
group's revenue to remain between USD320 million and USD340 million
in 2020-2021 and to increase above USD400 million in 2022 after
Verkhne-Menkeche production ramps up. Fitch expects funds from
operations (FFO) gross leverage to increase to about 3.5x in 2021
from around 2.5x in 2020, and decrease to 3x and below from 2022 on
capex moderation and when Verkhne-Menkeche production ramps up,
which supports 'B+' rating.

DERIVATION SUMMARY

GeoProMining's operating profile is situated in between
Petropavlovsk's and Nord Gold's. While it is smaller than its
peers, its execution risk is lower and its financial structure and
liquidity are strong compared with 'B' rated peers'. Its cost
position and reserve life are comparable to Nord Gold's.
GeoProMining's small scale and dependence on a single mine
constrain the rating to the 'B' category.

KEY ASSUMPTIONS

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

  - Based on Fitch mid-cycle commodity price assumptions for gold,
copper and zinc EBITDA margin above 40% in 2020 and to average 33%
until 2023

  - Production in line with management

  - Capex of USD60 million in 2020 and USD50 million in 2021

Key Assumptions for Recovery Analysis

  - The recovery analysis assumes that GPM would be considered a
going concern in bankruptcy and that the company would be
reorganised rather than liquidated.

  - The going-concern EBITDA is 30% below 2019 EBITDA to reflect
the industry's mid-cycle conditions and the company's small scale.

  - An EV/EBITDA multiple of 4x is based on the multiple used for
other mining companies and incorporates GPM's weaker operational
profile.

  - Its waterfall includes senior unsecured debt totalling USD390
million, in the form of the USD300 million bond and USD90 million
prepayment facility, which Fitch assumes will be fully drawn under
the distressed scenario. USD9.3 million shareholder loan is
subordinated to the senior unsecured debt.

  - After deduction of 10% for administrative claims and taking
into account Fitch's Country-Specific Treatment of Recovery Ratings
Criteria, its waterfall analysis generated a ranked recovery in the
RR4 band, indicating a 'B+' rating for the USD300 million bond. The
waterfall analysis output percentage on current metrics and
assumptions was 50%.

RATING SENSITIVITIES

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

  - Significant improvement in scale while maintaining solid credit
metrics

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

  - FFO gross leverage sustained above 3.5x

  - Commencement of material dividend payments and/or more
ambitious than expected capex leading to the inability to sustain
positive free cash flow (FCF)

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: As of end-2019 GeoProMining's cash position
stood at USD34.3 million against zero debt maturities until 2024
when a USD300 million bond matures. It also has an undrawn USD90
million prepayment facility maturing end-2021.

Fitch also expects the company to continue generating positive FCF
of USD10 million per year in 2020-2021, until the launch of
Verkhne-Menkeche in 2022, when Fitch expects positive FCF to
significantly increase.

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).




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

PROMOTORA DE INFORMACIONES: S&P Cuts ICR to 'CCC+', Outlook Neg.
----------------------------------------------------------------
S&P Global Ratings lowered its rating on Spain-based education and
media group Promotora De Informaciones S.A. (Prisa) to 'CCC+' from
'B-'. At the same time, S&P removed the rating from CreditWatch
negative, where it had placed it on March 25, 2020.

Prisa's revenue is set to decline by 10%-15% in 2020 from 2019
levels.

The deterioration stems from the drop in advertising and
circulation revenue, driven by structural decline and
COVID-19-related repercussions. Furthermore, S&P expects a weaker
performance of the educational business in 2020 due to potentially
tighter government budgets, softer demand, and anticipated negative
currency translation effects exacerbated by the COVID-19 fallout in
the group's Latin American operations, notably Brazil, where
Prisa's main business, Santillana, operates. In addition, the
failed disposal of Prisa's entire stake in the underperforming
broadcasting business Media Capital in Portugal will heighten
pressure. First-quarter 2020 cash flow generation was already
weaker than the same period last year, with Prisa reporting neutral
FOCF after lease payments.

S&P said, "Consequently, in our base case, we expect Prisa will
report negative FOCF in 2020, and despite an anticipated recovery
of operations, that it may remain negative in 2021.  We forecast
that Prisa will generate lower-than-previously-expected FOCF in
2020, an estimated outflow of EUR35 million-EUR45 million. This
projection incorporates our view of deteriorated earnings, combined
with expected working capital outflows, capital expenditure
(capex), and interest payments on the company's loans rising by an
estimated EUR5 million-EUR7 million versus the previous year. In
April 2020, a margin step-up of 50 basis points (bps) kicked in
because Prisa did not achieve a debt reduction of EUR275 million as
required in the debt documentation, and another 50 bps interest
margin increase will follow in 2021. We anticipate some recovery of
Prisa's operations from 2021, mainly driven by the educational
business and radio advertising. That said, despite some improvement
in operating performance, reported FOCF is likely to be negative by
EUR15 million-EUR25 million in 2021, as per our base-case
expectations.

"We view Prisa's capital structure as very highly leveraged,
raising questions about the company's ability to service, or
refinance, its debt in due time.  Our expectations of a pronounced
earnings deterioration and elevated debt of EUR1.2 billion will
translate into an S&P Global Ratings-adjusted leverage materially
above 10.0x in 2020, from 9.6x in 2019, and versus our March 2020
expectation of 8.4x-8.9x. Despite some reduction in 2021 by way of
some recovery in earnings, we think that leverage will remain very
high over the next two years. This, plus our anticipation of
negative FOCF, leads us to believe it will be challenging for Prisa
to service or refinance this debt over the medium term."

Refinancing risk is mounting as the company approaches its debt
maturities in November 2022.  Prisa's high debt levels will mature
in slightly more than two years. S&P said, "Given the company's
anticipated weak credit metrics and tough conditions in credit
markets, spurred by the COVID-19 outbreak, we think there is a risk
that Prisa may not be able to meet these debt maturities on time,
and that it might prove difficult for Prisa to refinance its
current capital structure, resulting in constrained liquidity. In
addition, we envisage that Prisa may refinance at less favorable
terms, which would hinder further its FOCF."

Prisa's liquidity position has somewhat stabilized due to the
covenant waiver it obtained from lenders in April 2020.   The
company's cash position of about EUR265 million as of March 31,
2020, should reduce the risk of a short-term liquidity shortfall.
Furthermore, thanks to the waivers from its lenders, the company is
not required to comply with leverage covenant and debt service
cover ratio until end-March 2021, while the minimum liquidity test
was loosened. That said, liquidity remains less than adequate, in
S&P's view, reflecting the company's limited ability to sustain
low-probability, high-impact events without refinancing its debt
and its relatively weaker standing in credit markets.

Risk of a currency mismatch between earnings and debt continues to
constrain the rating.   S&P said, "We expect funds from operations
(FFO) cash interest coverage to be in the 1.0x-1.5x range in 2020
versus 2.2x in 2019, reflecting weaker earnings and increased
interest expenses. Combined with our forecast that euro-denominated
earnings generated in Spain only roughly cover interest payments,
we continue to foresee a risk of a currency mismatch between
earnings, primarily generated in local currencies in Latin America,
and debt."

S&P said, "The negative outlook reflects our expectation that
Prisa's FOCF will likely be very weak over the medium term,
constraining the group's ability to service its EUR1.2 billion
gross debt. We also see increasing refinancing risk since Prisa's
debt matures primarily in November 2022." Meanwhile, the company
faces challenging trading conditions and a weak macroeconomic
environment in Spain and Latin America.

S&P could downgrade Prisa in the next six to 12 months if it saw
heightening risk of a near-term payment crisis or default. This
could happen if:

-- Operating performance weakened more than S&P currently expects,
particularly in its educational operations, such that its liquidity
deteriorated.

-- There was an increased risk that the group would be unable to
service interest payments on its debt.

-- The company failed to address its maturing debt in the near
future and to refinance its capital structure well in advance of
its maturity.

-- There were an increasing probability of a debt restructuring,
distressed exchange offer, or debt buyback that S&P would view as
distressed and tantamount to a default.

Although less likely, S&P could revise the outlook to stable if it
no longer believed the company would struggle to service or
refinance its debt. This could be the case if Prisa resolved its
refinancing in the near term, underpinned by a substantial
outperformance, leading to higher earnings and material positive
FOCF and the group deleveraged towards at least 7.0x on a
sustainable basis, and achieved an adequate liquidity.




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

GLOBAL BLUE: S&P Lowers LongTerm ICR to 'B', On Watch Negative
--------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
VAT refund processor for international shoppers Global Blue
Acquisition B.V. and its issue rating on its senior secured term
loans to 'B' from 'B+'. At the same time, S&P placed the ratings on
CreditWatch with negative implications.

Slow recovery prospects for international travel in general will
likely to lead to Global Blue reporting weaker credit metrics over
the next two years than S&P previously anticipated.

Global Blue is highly dependent on international travel for revenue
generation. S&P said, "We now expect a slow recovery in
international travel from the COVID-19 pandemic, in line with our
assumptions for airlines, and assume a more gradual return to 2019
travel volumes. Our base case assumes that a gradual and loosely
coordinated opening of external borders will lag the opening of
internal borders. As a result, we expect a slower recovery in
international travel than in domestic travel."

S&P said, "We assume a 60%-70% revenue decline for Global Blue in
the financial year (FY) ending March 31, 2021, versus a 30%-35%
decline previously. In addition, our assumption of a slower
recovery in international travel in FY2022, with revenue remaining
20%-30% lower than in FY2020, would lead to Global Blue reporting
higher leverage than we previously anticipated of about 5x-6x in
FY2022 on adjusted basis. That said, we recognize that the
long-term impacts of COVID-19 cannot be accurately and reasonably
quantified at this time and the above may meaningfully change.

Structural cost reductions to partly mitigate the impact of the
COVID-19 pandemic support the ratings.

S&P said, "We understand that Global Blue is in the process of
structurally reducing its costs across its major business functions
in response to COVID-19 headwinds. These cost savings will benefit
its profitability on a more permanent basis. We expect that the
structural cost reductions, together with government support
schemes during the peak of the pandemic, will help contain Global
Blue's potential cash burn. As a result, we expect only marginally
negative free cash flow in FY2021, with a return to positive free
cash flow in FY2022."

Global Blue's committed refinancing is conditional on the merger
transaction closing, which itself is conditional on majority
approval for the merger by FPAC shareholders. On May 7, 2020, the
FPAC Board of Directors recommended that FPAC shareholders vote
against the previously announced merger with Global Blue Group AG.
Nevertheless, the merger transaction can still close if approved by
a majority of FPAC's shareholders, regardless of the FPAC's Board's
recommendation.

25% of shareholders have unconditionally and irrevocably agreed to
vote in support of the transaction. Global Blue's current
controlling shareholder, private-equity fund Silver Lake, recently
acquired a 12% stake in FPAC and we understand it will vote in
favor of the merger. Therefore, further support from only about 13%
of shareholders is required for the merger to be approved.

S&P said, "The shareholder vote is expected within the next two
months. We also note that, under the terms of the merger, temporary
disruptions such as pandemics and travel restrictions do not
provide a basis for terminating the merger agreement. We understand
that if the merger does not go ahead FPAC will likely need to be
liquidated.

"Nevertheless, we still see a risk that if the merger is not
approved, this will lead to the cancellation of Global Blue's
planned concurrent refinancing of its term loans, which is
conditional on the merger closing. If the refinancing does not go
ahead, Global Blue will continue to be subject to quarterly testing
of its existing maintenance covenants, with a risk of a covenant
breach over the next two-to-three quarters absent a waiver,
amendment, equity cure from its existing shareholders, or another
capital increase. We understand that in such a scenario, existing
shareholders of Global Blue are incentivized to provide an equity
cure for the covenant, which could prevent a covenant breach."

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

-- Health and safety.

CreditWatch

S&P said, "The CreditWatch placement reflects our view of the risk
that Global Blue could breach its existing maintenance covenant in
September 2020 if the merger with FPAC is unsuccessful, absent any
support in the form of an equity cure from the financial sponsor, a
capital increase, a covenant waiver from the lenders, or an
amendment to the financing facility.

"We could lower the ratings on Global Blue if the majority of the
FPAC shareholders vote against the merger over the next two months
and we do not see material progress regarding the prevention of a
covenant breach. Although it is not our base case, if we see a
material risk of a covenant breach this could result in a
multiple-notch downgrade."

S&P could remove the ratings from CreditWatch and affirm them if:

-- The merger is successful, and the new covenant test is
scheduled for September 2021.

-- Global Blue obtains a covenant waiver for the coming few
quarters; or

-- Existing shareholders contractually commit to an equity cure in
the case of a covenant breach.

S&P said, "We assess Global Blue's liquidity as adequate, primarily
reflecting the group's significant cash. We expect liquidity
sources to cover uses by more than 1.5x over the next 12 months.
Our liquidity assessment also reflects the group's fairly
concentrated banking relationships, lack of traded debt, and tight
covenant headroom in subsequent quarters."

S&P estimates that Global Blue's principal liquidity sources for
the 12 months from April 30, 2020, are:

-- EUR343 million of available cash; and

S&P estimates Global Blue's principal liquidity uses for the same
period as:

-- Negative funds from operations of about EUR15 million-EUR20
million;

-- Capital expenditure of about EUR30 million; and

-- Neutral net working capital and about EUR40 million-EUR50
million of seasonal, intra-year working capital requirements, as
Global Blue usually pays customers before it receives VAT refunds.

The existing term loans mature in December 2022, but the pending
refinancing agreement--which is conditional on the successful
merger with FPAC--would extend the maturity date to 2025 and lower
the interest bill by about EUR9 million. S&P sees a potential
medium-term refinancing risk if the merger with FPAC is
unsuccessful and if Global Blue's performance does not materially
improve in line with its expectations.

Under its existing term loans, Global Blue has a maintenance
covenant specifying net debt to EBITDA of 6.5x. The pending
refinancing agreement, conditional on the merger, would include a
maintenance covenant, but testing would only begin in September
2021.

S&P said, "If the merger does not go ahead, we think it is likely
that Global Blue will breach its existing covenant by December 2020
at the latest, absent an equity cure from the sponsors, another
capital raise, or a covenant wavier from the lenders. However, if
the merger with FPAC and associated refinancing is successful, we
forecast compliance with the covenant in September 2021."




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

TURK P&I: Fitch Assigns BB- Insurer Financial Strength Rating
-------------------------------------------------------------
Fitch Ratings has assigned Turk P & I Sigorta A.S. a 'BB-' Insurer
Financial Strength Rating. The Rating Outlook is Stable.

KEY RATING DRIVERS

The ratings incorporate Fitch's current assessment of the impact of
the COVID-19 pandemic, including that on the company's business
environment, asset risks, capitalisation and earnings prospects.
The Stable Outlook reflects its view that the company's credit
fundamentals will remain resilient despite some negative pressures
from the pandemic.

The IFS Rating reflects Turk P&I's weak business profile compared
with other Turkish insurers', investment risks that are skewed
towards the Turkish banking sector. It also factors in a strong
liquidity profile, strong but potentially volatile earnings, and
adequate capitalisation. Fitch rates Turk P&I based on its own
standalone credit profile, but also take into consideration its
ownership structure, equally divided between public and private
interests, and strategic role in the Turkish economy, which Fitch
views positively.

Fitch ranks Turk P&I's business profile as 'moderate' compared with
other Turkish insurers', despite its small size, limited history
and less established business lines. This is because Fitch believes
its ownership and its strategic role in Turkey are positive for its
business profile. Given the 'moderate' ranking, Fitch scores Turk
P&I's business profile at 'b' under its scoring guidelines. Turk
P&I was established in 2014 by the state as a marine insurance
specialist and Turkey's first local protection and indemnity (P&I)
insurance provider. The company also underwrites hull and machinery
(H&M) insurance, which accounted for over half of its premiums in
2019.

Turk P&I's investments are concentrated in deposits in a single
state-owned bank. Investment risks could be heightened by
deterioration in the credit quality of Turkish banks amid the
pandemic. Liquidity is strong for the rating, since all its
investments are in bank deposits.

Turk P&I has delivered very strong earnings in the past three
years, which Fitch views as a rating strength. However, premium
levels and profitability are closely tied to global and local trade
conditions, which have been affected by the pandemic. Moreover, its
earnings have been reliant on rapid growth and foreign-exchange
(FX) and investment gains, implying potential earnings volatility.

Capitalisation supports the rating, with a score of 'Strong' under
Fitch's Prism factor-based model and a regulatory solvency ratio
comfortably above 100% at end-2019. Fitch expects the pandemic to
put pressure on organic capital generation. FX risk is manageable,
as foreign-currency (FC) assets exceed FC liabilities.

Fitch regards Turk P&I's reinsurance protection programme as
adequate, with strong credit quality of reinsurers and coverage for
both P&I and H&M risks, and Fitch believes the company's retained
catastrophe exposure is manageable. Its limited history on the
performance of its reinsurance coverage somewhat constrains its
assessment of reinsurance and risk mitigation.

The National IFS Rating of 'A+(tur)' with a Stable Outlook, largely
reflects Turk P&I's regulatory solvency level being in line with
that of higher-rated peers on the National scale, and very strong
but potentially volatile earnings. However, the rating is
constrained by the company's weak business profile versus other
Turkish insurers.

RATING SENSITIVITIES

The ratings remain sensitive to a material change in Fitch's
rating-case assumptions with respect to the COVID-19 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 positive
rating action/upgrade on the IFS Rating:

  -- A material positive change in Fitch's rating assumptions with
respect to the COVID-19 impact.

  -- Material improvements in the Turkish economy or the company's
investment quality, as reflected in an upgrade of Turkey's
Local-Currency Issuer Default Rating (IDR).

  -- Sustained profitable growth while its regulatory solvency
ratio remains comfortably above 100%.

Factors that could, individually or collectively, lead to negative
rating action/downgrade on the IFS Rating:

  -- A material adverse change in Fitch's rating assumptions with
respect to the COVID-19 impact.

  -- Material deteriorations in the Turkish economy or the
company's investment quality, as reflected in a downgrade of
Turkey's Local-Currency IDR.

  -- Deterioration in the company's business risk profile, due to
for example further deterioration in the maritime trade
environment.

Factors that could, individually or collectively, lead to positive
rating action/upgrade on the National IFS Rating:

  -- Seasoning of Turk P&I's business model over time, through
sustained profitable growth while its regulatory solvency ratio
remains comfortably above 100%. An upgrade is unlikely in the near
term given the company's current business profile.

Factors that could, individually or collectively, lead to negative
rating action/downgrade on the National IFS Rating:

  -- Deterioration in the company's business profile, due to for
example inability to meet its growth targets and maintain return on
equity above inflation levels.

  -- Regulatory solvency ratio below 100% for a sustained period.

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).




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

CALON ENERGY: Goes Into Administration, 111 Staff Retained
----------------------------------------------------------
Business Sale reports that Calon Energy Limited (CEL), the holding
company of independent power producer Calon Energy Group, has
entered administration.

CEL has appointed Jim Tucker and David Pike from KPMG's
restructuring division as joint administrators, Business Sale
relates.

The group employs around 111 staff, all of whom will remain
employed and paid as normal, and has also secured permission for a
new Combined Cycle Gas Turbine at Willington Development Site in
Derbyshire, Business Sale notes.  CEL's operating companies are not
in insolvency processes and will continue to trade under their
respective directors and management, Business Sale states.

For the year ending March 31 2019, CEL reported turnover of
GBP323.4 million, down from GBP373.2 million in 2018, and an
operating loss of GBP135 million, compared to losses of GBP48
million the year prior, Business Sale discloses.

The company's total assets less current liabilities stood at
GBP226.6 million, down from GBP415.1 million a year earlier,
according to Business Sale.

Calon Energy Group operates a 2.3 GW Combined Cycle Gas Turbine
across three sites: the Sutton Bridge Power Station in Sutton
Bridge, Lincolnshire, and two sites in Wales, the Severn Power
Station in Newport and Baglan Bay Power Station in Port Talbot.


HEATHROW FINANCE: Moody's Affirms Ba1 CFR, Outlook Negative
-----------------------------------------------------------
Moody's Investors Service affirmed Heathrow Finance plc's Ba1
Corporate Family Rating, its Ba2-PD Probability of Default Rating
and the Ba3 senior secured debt rating. The outlook on the ratings
remains negative. HF, through its shares in Heathrow (SP) Limited
(HSP), owns London Heathrow Airport (LHR).

RATINGS RATIONALE

The rating affirmation reflects that, notwithstanding the
significant detrimental impact on cash flows associated with the
decline in traffic due to the coronavirus outbreak, HF, through its
ownership of LHR, remains a key infrastructure provider, with
potential for a strong recovery once the outbreak and its effects
have been contained. In this context, the affirmation of HF's
ratings recognises the company's good liquidity profile and Moody's
expectation that, notwithstanding the breadth and severity of the
coronavirus outbreak and the consequent shock on passenger numbers
at LHR, the company will also implement measures aimed at
supporting and restoring its financial profile, with key financial
metrics anticipated to return to levels more commensurate with
current ratings over the next two to three years. The negative
outlook, however, reflects the downside risks to HF's credit
profile linked to the consequences of the coronavirus outbreak and
the significant uncertainties around traffic recovery prospects.

The rapid spread of the coronavirus outbreak, severe global
economic shock, low oil prices, and asset price volatility are
creating a severe and extensive credit shock across many sectors,
regions and markets. The combined credit effects of these
developments are unprecedented. The airport sector has been one of
the most significantly affected by the shock, given its sensitivity
to consumer demand and sentiment. HF remains exposed to the
reduction in passenger volumes as a result of the coronavirus
epidemic, which has left it vulnerable to shifts in market
sentiment in these unprecedented operating conditions, while HF is
also exposed 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.

Moody's expects the lifting of travel restrictions linked to the
coronavirus outbreak to result in the resumption of flight activity
over Q3 and Q4 of 2020, but traffic will remain severely depressed,
with domestic travel recovering earlier and a slower return for
international and long-haul flights. In this context, Moody's
currently assumes that the decline in passenger traffic at LHR will
be in the range of 60%-65% in the financial year ending December
2020, while passenger levels are unlikely to reach 2019 levels
until 2023 at the earliest. There are, however, risks of more
challenging downside scenarios, while recovery trends remain highly
uncertain because (1) LHR exhibits a material exposure to long haul
traffic (more than half of total), as well as business and premium
leisure travel, (2) travel restrictions in some form may continue
for some time even if the spread of the virus seems contained in
some areas; (3) the deteriorating global economic outlook would
likely slow the recovery in traffic and consumer spending, even if
travel restrictions are eased; and (4) the coronavirus outbreak is
also weakening the credit profile of airlines, which have been
drastically cutting capacity.

More generally, HF's Ba1 CFR continues to reflect (1) its ownership
of LHR, which is one of the world's most important hub airports and
the largest European airport, (2) its long established framework of
economic regulation, (3) the historically resilient traffic
characteristics of LHR, (4) the capacity constraints the airport
faced prior to the traffic declines linked to the coronavirus
outbreak, (5) the current period of lower capital expenditure
levels, (6) an expectation that the HF group will maintain high
leverage, and (7) the features of the HSP secured debt financing
structure, which puts certain constraints around management
activity, together with the protective features of the HF debt,
which effectively limit HF's activities to its investment in HSP.
HF's Ba3 senior secured rating reflects the structural
subordination of the HF debt in the HF group structure versus the
debt at HSP.

LIQUIDITY AND DEBT COVENANTS

The HF group as a whole exhibit a good liquidity position, allowing
for flexibility to cover its expenditure in the context of the
significant deterioration in cash flows associated with the
experienced contraction in traffic levels. Moody's understands
that, as of the end of June 2020, the HF group expects to have
approximately GBP2.6 billion of cash on balance sheet (of which
GBP442 million at the level of HF). Within the group, HSP and HF
also maintain liquidity arising from delayed drawdowns under
previously issued debt (GBP80 million and GBP50 million,
respectively). More specifically, HF's significant liquidity
availability would enable the company to support its debt service
requirements (approximately GBP100 million per annum) even in
absence of dividends upstreamed from HSP, which would normally
represent the company's exclusive source of cash flow. HF's next
debt maturity is in 2024. The HF group is also implementing
initiatives aimed at reducing, where possible, its cost base and
investment spend, with the objective of supporting its liquidity
and financial profile in the short term. The HF group expects to
have sufficient liquidity to meet all its obligations until at
least June 2021 under the extreme stress test scenario of no
revenue, or well into 2022 under its own base case traffic
forecast, which envisage a traffic contraction of 64% in 2020, with
passenger levels in 2021 expected to remain around 22% below 2019.

Given the magnitude of the reduction in earnings associated with
traffic declines, HF is expected to trigger default financial
covenants included in its debt documentation, namely group Net
Debt/RAB of 92.5% (both at the December 2020 and December 2021
calculation date) and Interest Cover Ratio of 1.0x (at the December
2020 calculation date). In addition, the group's debt documentation
includes covenants at the level of HSP. Given the contraction in
cash flows, HSP's Interest Cover Ratio is expected to trigger
lock-up levels at the December 2020 calculation date, which means
that the company will not be permitted to upstream cash to HF. In
the context of the trigger of default financial covenants, HF has
formally launched a consent solicitation process to obtain a waiver
for the Interest Cover Ratio covenant and to increase the HF Net
Debt/RAB threshold to 95% in 2020 and 93.5% in 2021. In addition,
as part of the process, HF is proposing a prohibition on dividend
payments for the duration of the waiver period or, if later, until
Net Debt/RAB reaches the level of 87.5% or below. Moody's expects
the solicitation process to conclude successfully, but the negative
rating outlook also reflects the residual risk that creditors'
approval may not be forthcoming.

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

In light of the current negative outlook, upward rating pressure on
HF's ratings is unlikely in the near future. The outlook could be
stabilised if, following the lifting of border and travel
restrictions and a return to normal traffic performance, the
company's financial profile and key credit metrics sustainably
return to levels commensurate with the current rating, while
continuing to maintain a good liquidity profile, coupled with the
successful finalisation of the waiver process aimed at resolving
default covenant breaches.

Downward pressure on HF's ratings could develop if (1) it were to
exhibit a financial profile permanently below the levels considered
commensurate with the current rating, leading to a reduced headroom
under its Net Debt/RAB covenant of 92.5% or an Adjusted Interest
Cover Ratio consistently lower than 1.0x; (2) the group's liquidity
profile deteriorates; (3) there was an increased risk of extended
covenant breaches; or (4) it appeared likely that the coronavirus
outbreak had a more severe or sustained detrimental impact on
traffic levels.

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

The only asset of HF is its shares in HSP, a holding company which
in turns owns the company that owns LHR, Europe's busiest airport
in terms of total passengers. HF is indirectly owned by Heathrow
Airport Holdings Limited (HAH). HAH is ultimately owned 25% by
Ferrovial S.A. (a Spanish infrastructure & construction company),
20% by Qatar Holding LLC (a sovereign wealth fund), 12.62% by
Caisse de depot et placement du Quebec (a pension fund), 11.2% by
the Government of Singapore Investment Corporation (a sovereign
wealth fund), 11.18% by Alinda Capital Partners (an infrastructure
fund), 10% by China Investment Corporation (a sovereign wealth
fund) and 10% by the University Superannuation Scheme (a pension
scheme).


LORCA HOLDCO: Fitch Assigns 'B+(EXP)' IDR, Outlook Stable
---------------------------------------------------------
Fitch Ratings has assigned Lorca Holdco Limited an expected
Long-Term Issuer Default Rating (IDR) of 'B+(EXP)' with a Stable
Outlook. Fitch has assigned an instrument rating of
'BB(EXP)'/RR2/73% to the underwritten EUR1.5 billion secured term
loan B financing to be made available to Lorca Finco PLC/Lorca
Telecom Bidco S.A.

An incremental pari passu financing of EUR1.5 billion expected to
launch once the bid has received regulatory clearance and
shareholder approval is expected to be rated in line with Lorca's
Term Loan B, subject to review of documentation confirming its pari
passu nature. The expected ratings are therefore based on an
assumed capital structure encompassing secured EUR3.0 billion drawn
debt/EUR500 million RCF.

Fitch has placed Masmovil Ibercom S.A.'s (MM) IDR of 'BB-' on
Rating Watch Negative (RWN) following the launch of Lorca's funding
proposals in relation to the private equity-backed bid for MM. The
Lorca Telecom Bidco S.A.U. consortium, consisting of funds managed
by Providence, Cinven and KKR has made a EUR22.5/share offer for
MM, valuing the Spanish telecom at EUR5.5 billion.

Fitch has affirmed the existing EUR1,450 million term loan B issued
by MasMovil Holdphone S.A.U. at 'BB'/RR2 on the basis the
committed/underwritten bid fully provides for refinancing MM's
existing debt. A change of control in existing documentation offers
lenders the opportunity to demand prepayment

MM's ratings take into account the company's established challenger
position as Spain's fourth-largest mobile network operator by
subscribers and its extensive fibre to the premises (FTTP)
footprint, which is second only to Telefonica SA (BBB/Stable). The
company has a strong growth profile, both in key performance
indicators and financial metrics. MM consistently acquires the
majority of net customer additions in fixed broadband and postpaid
mobile accesses. In 2019 it reported growth in service revenue and
adjusted EBITDA (company defined) of 24% and 42%, respectively. Its
share of residential mobile and fixed broadband subscribers was 18%
and 10%, respectively, at end-2019.

MM's funds from operations (FFO) net leverage was 4.0x at end-2019.
Under the proposed LBO structure, FFO net leverage is expected to
be 4.5x in 2021 compared with a downgrade threshold at 'BB-' of
4.3x. While forecast cash generation is expected to improve sharply
as the business passes peak capex in 2021, forecast leverage
resulting from the LBO would be more consistent with a 'B+' rating;
as reflected in the RWN on MM and Lorca's 'B+(EXP)' IDR.

KEY RATING DRIVERS

Solid Operating Profile: MM has constructed the country's
second-largest fibre to the home (FTTH) network in a country with
Europe's most advanced levels of fibre build. It has done this by
combining traditional build capex with a series of partnership
agreements encompassing shared ownership (or network swaps), hybrid
indefeasible rights of use (long-term fibre leases)/bitstream
access and creating joint ventures with infrastructure funds.

It has taken a similar approach in mobile, combining owned capex
with a series of national roaming agreements, and achieved
market-leading scale and network quality in both fixed and mobile.
Key operating performance indicators and financial results have
been strong and consistent with growth targets. In other
circumstances, the business profile and cash flow visibility
provide scope for a higher rating, subject to the capital
structure.

Orange Network Agreement: In October 2019, MM announced a
significant expansion of its network sharing arrangements with
Orange S.A. (BBB+/Stable). The agreement covers all envisaged
future 5G mobile needs, with its national roaming agreement
extended to 2028 (with the option to extend to 2033). The expansion
of its FTTH agreement effectively converts bitstream access
covering 5.2 million business units to a hybrid fibre
co-investment/bitstream access model, including the option to
acquire the business units under an indefeasible right of use in
2030.

The agreement increases MM's owned fibre network to 14.2 million
homes passed by 2020 and the company expects to achieve opex
savings of EUR30 million by 2020 and full run-rate savings of EUR40
million from 2021. Incremental capex of EUR180 million will be
spread over four years.

Lyca Acquisition: MM announced the acquisition of Lycamobile Espana
in March 2020. The virtual mobile network operator (MVNO) has 1.5
million subscribers and posted revenue of EUR132 million, EBITDA of
EUR45 million in 2019 and a margin of 34%. MM is paying EUR361
million for the high-margin MVNO and expects to generate synergies
of EUR30 million. Fitch views the transaction as a sound investment
and one that immediately increases its mobile base to 9.6 million
subscribers from 8.0 million, based on 1Q20 mobile subscribers,
pro-forma for the deal. Synergies will mainly come from moving
Lyca's customers on to the MM network and in Fitch's view are
deliverable.

2021 Leverage, Free Cash Flow Profile: Assuming the bid goes ahead,
Fitch expects Lorca to have FFO net leverage of 4.5x by 2021,
falling to 3.9x by 2022. With the company continuing to invest
relatively high levels of capex through to 2021 the business is
expected to turn Fitch-defined free cash flow (FCF) positive in
2022. Forecast metrics for 2021 combining heightened leverage and
the absence of FCF, are consistent with a 'B+' rating.

Deleveraging capacity will benefit from Lyca synergies, along with
efficiencies from the various partnership agreements. Upward rating
pressure whether an upgrade or Outlook revision, may be expected,
subject to 2022 planned performance remaining on track as 2021
progresses.

Established Market Challenger: Fitch views MM as an established
challenger operator in the Spanish telecoms market, which has built
scale through a series of acquisitions and consistent organic
growth. MM is in a good position to offer fixed and mobile
convergent services through a flexible network strategy. At
end-2019, the company had eight million mobile subscribers and an
18% share of the residential mobile market.

Fitch estimates that MM's share of mobile service revenue was 10%
at end-2019. In fixed broadband, its 1.5 million users represent a
10% share, a figure that is growing as MM consistently acquires the
majority of market net additions.

Competitive but Rational Market: The Spanish telecoms market is
competitive but rational. MM is the challenger to the three leading
companies, Telefonica, Orange and Vodafone Group Plc (BBB/Stable),
all of which have similar subscriber market shares. MM's tariff
structures do not materially undercut the competition. Fitch views
MM's commercial strategy as being more similar to that of Poland's
PLAY (P4 Sp. z o.o.) than the disruptive behaviour seen previously
in France and more recently Italy. In this respect, Fitch views
Spain's competitive environment as more similar to the UK's in
terms of intensity.

Network Strategy: MM takes a hybrid approach to network and service
coverage, combining a significant amount of its own network build
and access to other mobile networks, with regulated wholesale and
commercial agreements, and network-sharing in fixed. Its mobile
network covers 98.5% of the population (fully upgraded to 4G) while
mobile national roaming agreements with two of the other three
mobile network operators provide full coverage.

Its fixed operations provide ultra-high-speed broadband access to
23.4 million homes (of which 13.4 million at end-2019 were on its
owned network compared with 6.1 million at end-2018). The company
aims to expand its network to gain access to all of the country's
28 million premises with FTTP by 2024. These plans have been
significantly upgraded in the past year.

Fitch views the regulatory environment around fibre investment as
positive with regulated access to Telefonica's network and ducts at
attractive rates, along with the promotion of co-investment and
network sharing. MM has taken advantage of these dynamics with a
hybrid strategy, which aims to provide access in different regions
via the most efficient cost structure available. It has gained
significant subscriber momentum in broadband taking almost all the
market net additions in 2018, based on data from the Spanish
telecoms regulator.

Lorca Debt Recoveries: Fitch has adopted a going concern approach
with respect to expected recovery ratings in relation to the Lorca
financing package. Fitch assumes a post-distress EBITDA of EUR565
million leading to a post-distress enterprise value of around
EUR2.5 billion, based on a distressed EV multiple of 5x and
administrative charge of 10%. A capital structure that assumes
EUR3.0 billion of term debt and that the EUR500 million RCF is
fully drawn results in recoveries of 73%, a recovery rating of RR2
and instrument rating of 'BB(EXP)'.

DERIVATION SUMMARY

In operational terms, MM is comparable, albeit at an earlier stage
in its business life cycle, with a peer group that includes Swiss
operator Sunrise Communications Holdings S.A. (BBB-/Stable), and
Fitch-rated European cable operators, which are largely grouped
around the 'BB-'/'B+' level. MM has similar revenue scale to most
in the peer group but slightly lower EBITDA margins and higher
investment needs given the investment in connecting fibre
subscribers. It has far higher growth potential than most in the
peer group for whom markets are largely saturated. Fitch expects
MM's challenger business model in a market that continues to offer
growth in penetration and subscribers to lead to strong FCF
generation and good deleveraging capacity.

KEY ASSUMPTIONS

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

  - Revenue growth of 7.5% in 2020 and 12% in 2021

  - Adjusted EBITDA margin (pre-IFRS 16) to improve to 28.8% in
2020 and 34.9% in 2021 driven by acquisition synergy and cost
savings from new wholesale agreements

  - Negative working capital of EUR174-EUR183 million in 2020-2022
reflecting the payment installments to fibre co-investments with
other operators

  - Capex/sales ratio to remain high at 34% and 22% in 2020 and
2021, respectively, before decreasing to the mid-teens when fibre
network investment has been largely completed

Key Recovery Rating Assumptions for Lorca Holdco Limited

  - Fitch uses a going-concern approach in its recovery analysis,
assuming that the company would be considered a going-concern in
the event of a bankruptcy

  - A 10% administrative claim

  - Post-restructuring going-concern EBITDA estimated at EUR565
million, 20% below its 2021 forecast EBITDA, reflecting distress
caused by failure of subscriber gains

  - Fitch uses an enterprise value (EV) multiple of 5.0x to
calculate a post-restructuring valuation

  - Recovery prospects are 73% for the EUR 3 billion senior secured
debt at Lorca Finco PLC. Ranking pari passu to the senior secured
debt, Fitch assumes a fully drawn RCF of EUR500million.

RATING SENSITIVITIES

Sensitivities for Masmovil Ibercom S.A.'s 'BB-' IDR

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

  - FFO net leverage below 3.8x on a consistent basis.

  - CFO less capex as of gross debt consistently at or above 7.5%.

  - Sustained improvement in competitive position in the convergent
Spanish telecoms market as measured by subscriber market share of
fixed -line retail customers and revenue market share in mobile.

  - Positive post-dividend FCF, together with positive revenue and
EBITDA growth.

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

  - FFO net leverage above 4.3x on a consistent basis.

  - CFO less capex as of gross debt consistently at or below 4%.

  - Sustained deterioration in competitive position in the form of
significant underperformance in its targeted subscriber market
share of fixed-line retail customers and revenue market share in
mobile.

  - Sustained neutral or negative FCF margin.

Sensitivities for Lorca Holdco Limited's 'B+ (EXP)' IDR

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

  - FFO net leverage below 4.3x on a consistent basis

  - CFO less capex as a percentage of gross debt consistently at or
above 4%

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

  - FFO net leverage above 5.3x on a consistent basis

  - CFO less capex as of a percentage of gross debt consistently at
or below 1%

LIQUIDITY AND DEBT STRUCTURE

Comfortable Liquidity: At end-March 2020, MM had a cash balance of
EUR195 million. Assuming the LBO bid goes ahead, Lorca's liquidity
will be supported by EUR500 million RCF fully undrawn in the new
capital structure. Additionally, Fitch expects the business to be
cash generative from 2022. The Lorca secured term loan has
long-dated maturity and due in 2027.


LORCA HOLDCO: Moody's Assigns B1 CFR Amid Masmovil Ibercom Deal
---------------------------------------------------------------
Moody's Investors Service assigned a B1 Corporate Family Rating and
a B1-PD Probability of Default Rating to Lorca Holdco Limited.
Following the proposed takeover offer of Masmovil Ibercom S.A. by a
consortium of private equity funds, Lorca will become the ultimate
parent of Masmovil and the new top company within the Masmovil
restricted group that will issue consolidated financial statements
going forward. Moody's expects the debt component of the leveraged
buyout transaction to be funded with a combination of EUR3 billion
worth of new debt.

Moody's has also assigned a B1 rating to the EUR1,500 million
senior secured Term Loan B due in 2027 and the EUR500 million
senior secured revolving credit facility due in 2027 raised by
Lorca Finco PLC (an intermediate subsidiary fully owned by Lorca).

The outlook on all ratings is stable.

Concurrently, Moody's has withdrawn the B1 CFR and B1-PD PDR of
Masmovil Ibercom S.A. The B1 ratings on the existing EUR1,450
million Senior Secured Term Loan B, EUR100 million Senior Secured
Revolving Credit Facility and EUR150 million Senior Secured
facilities issued by Masmovil Holdphone S.A.U. remain unchanged, as
they will be redeemed, upon closing of the acquisition, with
proceeds from the new debt issuance. Moody's expects to withdraw
the ratings on the existing debt instruments upon repayment.

"The B1 rating reflects Masmovil's new private equity ownership and
more aggressive capital structure, which will lead to an increase
in leverage to 5.6x in 2020 from 4.4x in 2019. However, we expect
that the company's credit metrics will improve from 2021 onwards,
driven by sustained revenue growth, significant margin improvement
linked to the recently signed network related contracts, and higher
cash flow generation, keeping the ratios well within the guidance
range for the B1 category," says Carlos Winzer, a Moody's Senior
Vice President, and lead analyst for Masmovil.

RATINGS RATIONALE

The B1 CFR reflects: (1) the strategic rationale of the recently
announced network related transactions, which increase capex
efficiencies reducing cash investments, and enhance the scale and
competitive position of Masmovil; (2) Masmovil's track record of
revenue growth; (3) the quality of the company's management and the
successful execution of its challenger strategy in Spain since its
establishment in 2006; (4) its objective to grow its fixed telecom
business, while maintaining strong growth in mobile, partially
underpinned by its fibre-to-the-home (FTTH) co-investment and
wholesale agreements; (5) its smart non-disruptive price strategy,
which takes advantage of an increasingly polarized market (low-end
price-sensitive and premium customers); and (6) its efficient cost
structure supported by network related contracts that allow
Masmovil to benefit from owner-economics and achieve EBITDA margins
approaching 30% in 2020.

The credit profile is constrained by: (1) the relatively high
Moody's adjusted gross leverage at transaction closing of 5.6x; (2)
Moody's expectation of negative free cash flow generation through
2021; (3) the increasingly competitive operating environment in
Spain, which raises some uncertainties in relation to the revenue
growth beyond 2021; (4) its position as the fourth-largest company
in the Spanish telecom market and its moderate scale; (5)
significant reliance on wholesale agreements resulting from the
hybrid (owned, co-shared and access to third-party infrastructure)
network business model, which also increases the complexity of the
analysis of Masmovil's operating and financial profile; (6) the
lack of rich TV content in its offering; (7) exposure to the three
bigger Spanish operators striving to defend market shares; and (8)
event risk given its acquisitive track record, with a history of
material debt-financed M&A.

Moody's expects Masmovil to grow its revenue at low double digits
in 2020 and 2021 followed by high single digit growth in 2022,
supported by strong subscriber growth, growing convergence and
increased fiber coverage. This is in line with the company's recent
track record and is remarkable in the Spanish telecom sector.

Revenue growth and an increasingly efficient operating cost
structure, supported by the new network related deals and
Lycamobile's acquisition, are expected to boost EBITDA.

Furthermore, Moody's expects adjusted EBITDA margin improvements
from 25.5% in 2019 to over 30% in 2020 and higher in 2021. The
recent agreement reached with Telefonica is expected to contribute
to EBITDA improvement over time. This together with the recent
infrastructure related agreements with Orange and the acquisition
of MVNO Lycamobile Spain, are remarkable achievements which
strongly position the company in the trajectory to achieve positive
free cash flow generation in 2022.

While Moody's expects Masmovil's free cash flow will remain
negative in 2020 and 2021, owing to high capital spending in
investments supporting its plan to reach over 28 million FTTH homes
by 2022, investments will then reduce from 2021 onwards, supporting
deleveraging.

Moody's forecasts an adjusted gross leverage in 2021, the first
year after completion of all the new network related contracts, of
4.4x, down from 5.6x in 2020 (proforma for Lycamobile's
acquisition).

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONSIDERATIONS

From a corporate governance perspective, Moody's has factored into
its assessment the change in financial policy following the private
equity sponsored takeover bid, which will result in a substantial
increase in the amount of debt on Masmovil's balance sheet. As is
often the case in highly levered, private equity sponsored deals,
owners have a high tolerance for leverage/risk and governance is
comparatively less transparent than for publicly listed companies.

LIQUIDITY

Masmovil's liquidity is adequate, supported by an estimated cash
balance of EUR195 million as of March 2020 and a new EUR500 million
revolving credit facility due 2027 which will remain undrawn. The
RCF has a springing leverage covenant at 8.0x, tested when drawings
exceed 40%. Following the repayment of the existing debt, and the
issuance of the new TLB, the company will not have any debt
maturities until 2027.

STRUCTURAL CONSIDERATIONS

Masmovil's Probability of Default Rating of B1-PD is in line with
the CFR, reflecting the use of a family recovery rate of 50%. The
B1 rating on the new TLB and the revolving credit facility are in
line with the B1 CFR, given that these represent the vast majority
of financial debt in the new capital structure. All the debt ranks
pari passu and benefits from the same security package, which
mainly consists of share pledges.

RATIONALE FOR STABLE OUTLOOK

Due to the high starting leverage post transaction, Masmovil's B1
rating is initially weakly positioned in the category, with limited
headroom for deviation relative to Moody's expectations.

The stable outlook on the ratings reflects Moody's expectation that
the company will de-lever towards 4.4x by 2021, driven by EBITDA
growth and that EBITDA margins (Moody's adjusted) will improve
towards 35% over the next two years.

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

Upward rating pressure could be exerted over time if the company
delivers on its business plan with an improved operating
performance while it demonstrates a conservative financial policy
driving sustained deleveraging, such that its Moody's-adjusted
gross debt/EBITDA falls sustainably below 3.75x and its free cash
flow/debt ratio significantly improves.

Downward rating pressure could emerge if: (1) Masmovil's operating
performance deteriorates leading to weaker credit metrics, such as
Moody's-adjusted gross debt/EBITDA sustainably above 4.75x; (2) the
company conducts large debt-funded M&A or shareholder
distributions; or (3) liquidity deteriorates significantly.

LIST OF AFFECTED RATINGS:

Assignments:

Issuer: Lorca Finco PLC

Gtd. Senior Secured 1st Lien Term Loan B Assigned B1 (LGD3)

Gtd. Senior Secured 1st Lien Revolving Credit Facility, Assigned B1
(LGD3)

Issuer: Lorca Holdco Limited

Probability of Default Rating, Assigned B1-PD

Corporate Family Rating, Assigned B1

Outlook Actions:

Issuer: Lorca Finco PLC

Outlook, Assigned Stable

Issuer: Lorca Holdco Limited

Outlook, Assigned Stable

Withdrawals:

Issuer: Masmovil Ibercom, S.A.

Probability of Default Rating, Withdrawn, previously rated B1-PD

Corporate Family Rating, Withdrawn, previously rated B1

Outlook Actions:

Issuer: Masmovil Ibercom, S.A.

Outlook, Changed to Rating Withdrawn from Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was
Telecommunications Service Providers published in January 2017.


PANGAEA ABS 2007-1: Fitch Withdraws CCsf Rating on Class D Notes
----------------------------------------------------------------
Fitch Ratings has upgraded Pangaea ABS 2007-1 BV's class D notes,
affirmed the class E and F and withdrawn the ratings, as follows:

RATING ACTIONS

Pangaea ABS 2007-1 B.V.

Class D XS0287268642; LT CCsf Upgrade;   previously Csf

Class D XS0287268642; LT WDsf Withdrawn; previously Csf

Class E XS0287271604; LT Csf Affirmed;   previously Csf

Class E XS0287271604; LT WDsf Withdrawn; previously Csf

Class F XS0287272164; LT Csf Affirmed;   previously Csf

Class F XS0287272164; LT WDsf Withdrawn; previously Csf

TRANSACTION SUMMARY

Pangaea ABS 2007-1 BV 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 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.

Increased Credit Enhancement

Since Fitch's last surveillance review on July 31, 2019, the class
C notes have paid off, and the class D notes have become the most
senior class of notes. During this period, the class D notes paid
down by EUR715,105 and credit enhancement for the class increased
to 13.3% from 2.1%.

The class E and F notes have similar negative credit enhancement of
as 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'/'BB-' in the last review to 'BB-' as of June 23, 2020.
This is due to some assets being downgraded and being paid down.

Structure and Cash Flow Analysis

All the OC tests are failing. The transaction benefits from excess
spread after paying senior expenses and class D notes' interest.
The excess spread has been used to pay down the class C notes to
cure the class C OC test. The class D, E and F 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 13
performing issuers in the transaction, down from 15 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


PUNCH TAVERNS: Fitch Lowers Cl. A3 Notes Rating to B-, Outlook Neg
------------------------------------------------------------------
Fitch Ratings has downgraded Punch Taverns Finance B Limited's
(Punch B) class A3, class A6 and class A7 notes by one notch to
'B-' and removed them from Rating Watch Negative (RWN). The Outlook
is Negative.

The transaction is a securitization of tenanted pubs in the UK,
owned by Punch Taverns Limited

RATING RATIONALE

The rating action reflects its expectation that Punch B's credit
profile, coverage and leverage ratios will continue to be
negatively impacted by a severe demand shock related to the
coronavirus pandemic. Fitch expects financial commitments to be met
during 2020 but the bullet repayments of the class A notes are
vulnerable to deterioration in the business, financial and economic
environment.

The Negative Outlook reflects reduced visibility on the refinancing
of the class A3 notes in light of significant uncertainty around
the impact of lockdown and social-distancing measures that are
severely damaging to the UK pub sector.

Under Fitch's revised rating case, projected leverage has increased
significantly on assumed severe near-term cash flow stresses.
Liquidity, which includes a liquidity facility, remains comfortable
throughout 2020, and Punch B has some financial flexibility to
partially offset a potential short-term revenue shortfall. Fitch
currently assumes Punch B to progressively recover from the demand
shock by 2022, but if the severity and duration of the outbreak is
worse than expected, Fitch will revise the rating case will
accordingly.

KEY RATING DRIVERS

Coronavirus Affecting Demand

The pandemic has resulted in an unprecedented and ongoing impact on
pub businesses as government lockdown and social-distancing
measures continue to prevent people from visiting pubs. Revenues
may fall to zero while these measures remain in place. The
potential extent of the near-term stresses is unprecedented. During
early March, many pubs were experiencing significant declines in
revenues as people were starting to voluntarily limit their own
movement. The impact on revenue intensified during the month as the
UK government ordered all pubs to close and a full countrywide
lockdown.

Under its revised Fitch rating case (FRC), Fitch assumes
significant revenue declines to reflect the lockdown impact, with
the government planning to start re-opening pubs from July 4, 2020.
This means pubs will have been fully closed for around 3.5 months.
Fitch then assumes gradual recovery during the remainder of 2020
and for 2021. This results in an annual decline of around 60% in
2020. Revenue will then progressively normalise and reach 2019
levels only by 2022.

Defensive Measures

In its revised rating case, Fitch expects tenanted pubs to have
some cost flexibility at the pub level. Fitch also assumes some
reduction in maintenance capex as it can be reduced to minimum
covenanted levels, and in reality, it may be possible to reduce
capex further as any shortfall versus covenant could be made up
later in the year as pubs start to re-open.

Credit Metrics - Impacted but Recovery from 2021

Under the updated FRC, the projected minimum of average and median
synthetic FCF (free cash flow) DSCR (debt service coverage ratio)
remainss unchanged at 0.8x for the class A notes. However, Fitch
forecast net debt-to-EBITDA to significantly increase to over 20x
at the beginning of 2021 due to the severe demand shock. After the
2020 shock, Punch B's metrics will progressively recover, with
leverage easing to 5.7x by end-2022. This reflects its current view
that demand within the pub sector will return to normal in the
medium to long term. Fitch is closely monitoring developments in
the sector as Punch B's operating environment has substantially
worsened and Fitch will revise the FRC if the severity and duration
of coronavirus is worse than expected.

Liquidity

Punch B had around GBP63 million of cash available as of end-May
2020. In addition, it benefits from a GBP57 million liquidity
facility that is sufficient to cover 18 months of debt service.
However, the liquidity facility covers only interest payments and
scheduled principal but excludes final bullet maturities.

Refinancing Risk - Visibility Decreases

The next bullet maturity is the GBP90.2 million class A3 notes in
September 2021. Under its revised FRC, operating cash flow and cash
accumulated within the structure would be insufficient to cover the
full amount of bullet repayment for the class A3 notes. Therefore,
a portion of the debt related to the class A3 notes will need to be
refinanced or would rely on cash from external support.

Sensitivity Case

Fitch has also run a more severe sensitivity case that builds on
the rating case, and assumes the crisis worsens materially from its
current levels with a longer demand shock versus the revised rating
case, resulting in significant revenue reductions of around 70%
during 2020 and progressive recovery only by 2025. Mitigation
measures are unchanged compared with the FRC. The sensitivity shows
that under this scenario leverage will peak at close to 40x at the
beginning of 2021.

RATING SENSITIVITIES

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

Fitch does not anticipate an upgrade, as reflected in the Negative
Outlook. A quicker-than-assumed recovery from the COVID-19 shock,
supporting a sustained recovery in credit metrics to pre-crisis
levels and increased visibility on refinancing prospects for the
class A notes would allow us to revise the Outlook to Stable.

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

Failure to refinance maturing debt tranches well in advance.

A slower-than-assumed recovery from the COVID-19 shock resulting in
a sustained deterioration of projected coverage and leverage
metrics for the class A notes.

TRANSACTION SUMMARY

As of March 2020, the transaction consisted of 1,160 pubs (1,035
pubs in the core estate and 125 in the non-core).

Key Rating Drivers - Summary Assessments

Industry Profile - Midrange

Sub KRDs: Operating Environment - Weaker; Barriers to Entry -
Midrange; Sustainability - Midrange

Company Profile - Midrange

Sub-KRDs: Financial Performance - Weaker; Company Operations -
Midrange; Transparency -Weaker; Dependence on Operator - Midrange;
Asset Quality - Weaker

Debt Structure: Midrange

Sub-KRDs: Debt Profile: Weaker; Security Package: Stronger;
Structural Features: Midrange

The outbreak of coronavirus and related government containment
measures worldwide create an uncertain global environment for the
pub sector. While Punch B's most recently available performance
data may not have indicated impairment, material changes in revenue
and cost profile are occurring across the pub sector and will
continue to evolve as economic activity and government restrictions
respond to the ongoing pandemic. Fitch's ratings are
forward-looking in nature, and Fitch will monitor developments in
the sector for the pandemic's severity and duration, and
incorporate revised base- and rating-case qualitative and
quantitative inputs based on expectations for future performance
and assessment of key risks.

CREDIT UPDATE

Consent Solicitation - Covenant Calculation Amendment

In May 2020, Punch B received approval from class A noteholders for
amendments to the issuer-borrower facility agreement. The amendment
implemented a different application of EBITDA in covenant
calculations during the period of COVID-19 closure, and the eight
weeks following reopening of the pubs. During that period for each
pub that is closed the covenant will look to the EBITDA from the
prior year rather than the closed period. The amendment also allows
Punch B to accommodate rent deferrals or reductions for tenants who
are struggling to pay their rent on time during the lockdown. In
its view, the amendment effectively represents a waiver of a
potential technical breach of the securitisation financial
covenant.

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).


TATA STEEL: Nears Rescue Deal with UK Government
------------------------------------------------
Jim Pickard and Michael Pooler at The Financial Times report that a
rescue deal for Britain's largest steelmaker is set to be agreed
with the government within days, helping preserve about 8,000 jobs
in an industry that had been struggling even before the coronavirus
crisis.

The impending state loan worth hundreds of millions of pounds for
Tata Steel's UK operations -- which include its sprawling complex
at Port Talbot in south Wales -- is due to be the first major
transaction under the government's "Project Birch", the FT states.

Chancellor Rishi Sunak authorized the project during the pandemic
as a means of rescuing strategically important companies through
bespoke funding arrangements, the FT notes.

Tata has been seeking a state loan worth GBP500 million, according
to Stephen Kinnock, Labour MP for Aberavon, where the Port Talbot
complex is located, the FT relates.

According to the FT, government officials have discussed a
mechanism under which some of the debt due to be provided to Tata
in the rescue deal could be converted into equity under certain
circumstances.

But the government is not keen to take stakes in companies under
Project Birch, and Mr. Sunak's allies have said previously the
preferred option would be to provide loans to businesses that
ensured taxpayers were at the top of the hierarchy of creditors,
the FT notes.

Several Whitehall and industry figures said Tata had submitted its
loan application to the government and the two sides were closing
in on an agreement -- with growing confidence that it would be
finalized within a week, the FT relates.

The UK operations of Tata Steel have struggled to generate a profit
for years, the FT discloses.  In its last published results, for
the year to March 2019, the British business recorded an operating
loss before one-off items of GBP157 million, according to the FT.
This followed a loss of GBP48 million in the previous year, the FT
states.


WELLINGTON PUB: Fitch Lowers Rating on Class A Notes to B
---------------------------------------------------------
Fitch Ratings has downgraded Wellington Pub Company Plc's
(Wellington) class A notes to 'B' from 'B+' and affirmed the class
B notes at 'B-', and removed them from Rating Watch Negative (RWN).
The Outlooks are Negative.

Wellington is a securitisation of rental income from 720
free-of-tie pubs (as of end December 2019).

RATING RATIONALE

The downgrade of the class A notes reflects its expectation that
Wellington's cash generation and free cash flow (FCF) debt service
coverage metrics (DSCR) will continue to be affected by a severe
demand shock caused by the coronavirus pandemic. While the coverage
metrics of the class B notes are also impacted under its revised
forecast, Fitch still views the credit quality of the B notes as
commensurate with a 'B-' rating with Negative Outlook.

The Negative Outlooks indicates the still uncertain operating
environment in the UK pub sector, after the unprecedented lockdown,
which has lasted for several months to contain the coronavirus.
This has severely affected the UK economy, reducing consumer
confidence and is likely to negatively impact consumer
discretionary spending. Fitch expects these factors to ultimately
affect the ability of Wellington's tenants to pay rent.

Wellington's liquidity, which includes liquidity reserves, is
sufficient to cover debt service throughout 2020 and Wellington has
some financial flexibility to partially offset a potential
short-term revenue shortfall. However, liquidity will become tight
in 2021 under the revised Fitch rating case (FRC).

Under the revised FRC, Wellington's projected DSCR ratios are
driven by significant near-term cash flow stresses. Fitch currently
assumes Wellington to progressively recover from the demand shock
by 2022, but if the severity and duration of the outbreak extends
further, Fitch will revise the rating case accordingly.

KEY RATING DRIVERS

Coronavirus Affecting Demand

The pandemic has resulted in an unprecedented and ongoing impact on
pub businesses as government lockdown and social-distancing
measures continue prevent people from visiting pubs. Revenues may
fall to zero while these measures remain in place. The potential
extent of the near-term stresses is unprecedented. During early
March, many pubs were experiencing significant declines in revenues
as people were starting to voluntarily limit their own movement.
The impact on revenue intensified during the month as the UK
government ordered all pubs to close and a full countrywide
lockdown.

Under the revised FRC, Fitch assumes significant revenue declines
to reflect the lockdown impact, with the government currently
planning to start re-opening pubs after July 4, 2020. This means
pubs will have been fully closed for around 3.5 months. Fitch then
assumes gradual recovery during the remainder of 2020 and in 2021.
This results in an annual decline of around 60% in 2020. Revenue
will then progressively normalise and reach 2019 levels only by
2022.

Defensive Measures

Wellington has some flexibility to partially offset the impact of
the significant revenue shortfall. In its revised FRC, Fitch
expects tenanted pubs to have some cost flexibility at the pub
level. Fitch also assumes some reduction in both maintenance and
development capex and costs, in addition to overhead costs.

Credit Metrics - Impacted but Recovery from 2021

Under the revised FRC projected metrics (minimum of both the
average and median FCF DSCRs until legal maturity) decline to 1.1x
for the class A notes and 0.9x for the class B notes due to the
demand shock.

After the 2020 shock, Wellington's metrics will progressively
recover by 2022. This reflects its current view that demand within
the pub sector will return to normal in the medium to long term.
Fitch is closely monitoring developments in the sector as
Wellington's operating environment has substantially worsened and
Fitch will revise the FRC if the severity and duration of
coronavirus is worse than expected.

Weak Liquidity in 2021

Wellington had GBP16 million of cash (including liquidity cash
reserves) and GBP3.3 million of tenant deposits available as of
end-May 2020. Its GBP6 million liquidity cash reserve covers around
four months of debt service. While the liquidity position is
sufficient to cover debt service throughout 2020, Fitch expects it
to become tight in 2021 under its revised rating case.

Sensitivity Case

Fitch has also run a more severe sensitivity case that builds on
the rating case and assumes the crisis worsens materially from
current levels with a longer demand shock versus the revised rating
case, resulting in revenue reductions of around 70% during 2020 and
a progressive recovery only by 2025. Mitigation measures remain
unchanged compared with the FRC. The sensitivity shows the
projected minimum average and median FCF DSCRs drop to 0.8x for the
class A notes and to 0.7x for the class B notes.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to positive
rating action/upgrade: Fitch does not anticipate an upgrade, as
reflected in the Negative Outlook. However, a quicker-than-assumed
recovery from the COVID-19 shock, supporting a sustained recovery
in projected FCF DSCR to above 1.2x and 1.1x for the class A and B
notes, respectively, may result in the Outlook being revised to
Stable. Factors that could, individually or collectively, lead to
negative rating action/downgrade: - A slower-than-assumed recovery
from COVID-19 shock resulting in sustained deterioration of
projected coverage metrics. - Further FCF and liquidity
deterioration beyond FRC assumptions as a result of an increase in
arrears, pub vacancies or foreclosure rates and
slower-than-expected deleveraging increasing the level of credit
risk. If the combined portion of Wellington's or its affiliates'
holdings in the transaction's senior notes exceeds 75% (currently
60%), Fitch will withdraw the ratings as the majority noteholder
will be able to amend the terms of the notes at its own
discretion.

TRANSACTION SUMMARY

Wellington's pubs are mainly located in residential areas across
the UK, with a strong presence in the south east and London.

Key Rating Drivers - Summary Assessments

Industry Profile - Midrange

Sub KRDs: Operating Environment - Weaker; Barriers to Entry -
Midrange; Sustainability - Midrange

Company Profile - Weaker

Sub-KRDs: Financial Performance - Weaker; Company Operations -
Weaker; Transparency - Weaker; Dependence on Operator - Stronger;
Asset Quality - Weaker

Debt Structure - Weaker (class A, B)

Sub-KRDs: Debt Profile - class A: Stronger, class B: Midrange;
Security Package - class A: Stronger, class B: Midrange; Structural
Features - class A: Weaker, class B: Weaker

The outbreak of coronavirus and related government containment
measures worldwide create an uncertain global environment for the
pub sector. While Wellington's most recently available performance
data may not have indicated impairment, material changes in revenue
and cost profile are occurring across the pub sector and will
continue to evolve as economic activity and government restrictions
respond to the ongoing pandemic. Fitch's ratings are
forward-looking in nature, and Fitch will monitor developments in
the sector for the pandemic's severity and duration, and
incorporate revised base- and rating-case qualitative and
quantitative inputs based on expectations for future performance
and assessment of key risks.

CREDIT UPDATE

Further Deferral in Maintenance Capex Expected

Wellington relies almost entirely on the tenants to maintain the
property. In Fitch's view, the closure of the pubs limits
publicans' ability to spend on necessary maintenance and could lead
to further deferral in maintenance capex. This may further impact
the quality of Wellington's estate and potential disposal proceeds.
Scope for recouping capex through higher rents may be limited as
well.

Arrears to Increase

The level of tenant arrears has been stable over the last few years
but Fitch expects to them to increase considerably as long as the
measures to contain the spread of COVID-19 remain in place and the
trading is challenging.

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).




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

[*] BOOK REVIEW: Mentor X
-------------------------
The Life-Changing Power of Extraordinary Mentors
Author: Stephanie Wickouski
Publisher: Beard Books
Hard cover: 156 pages
ISBN: 978-1-58798-700-7
List Price: $24.75

Order this Book: https://is.gd/EIPwnq

Long-time bankruptcy lawyer Stephanie Wickouski at Bryan Cave
impressively tackles a soft problem of modern professionals in an
era of hard data and scientific intervention in her third published
book entitled Mentor X. In an age where employee productivity is
measured by artificial intelligence and resumes are prescreened by
computers, Stephanie Wickouski adds spirit and humanity to the
professional journey.

The title is disarmingly deceptive and book browsers could be
excused for assuming this work is just another in a long line of
homogeneous efforts on mentorship. Don't be fooled; Mentor X is
practical, articulate and lively. Most refreshingly, the book
acknowledges the most important element of human development: our
intuition.

Mrs. Wickouski starts by describing what a mentor is and
distinguishes that role from a teacher, coach, role model, buddy or
boss. Younger professionals may be skeptical of the need for a
mentor, but Mrs. Wickouski deftly disabuses that notion by relating
how a mentor may do nothing less than change the course of a
protege's life. Newbies to this genre need little convincing
afterwards.

One of the book's worthiest contributions is a definition of mentor
that will surprise most readers. Mentors are not teachers, the
latter of which impart practical knowledge. Instead, according to
Mrs. Wickouski, her mentors "showed me secrets that I could learn
nowhere else. They showed me how doors are opened. They showed me
how to be an agent of change and advance innovative and
controversial ideas." What ambitious professional doesn't want more
of that in their life?

The practicality of the book continues as Mrs. Wickouski outlines
the qualities to look for in a mentor and classifies the various
types of mentors, including bold mentors, charismatic mentors, cold
and distant mentors, dissolute mentors, personally bonded mentors,
younger mentors, and unexpected mentors. Mentor X includes charts
and workbooks which aid the reader in getting the most out of a
mentor relationship. In a later chapter, Mrs. Wickouski provides an
enormously helpful suggestion about adopting a mentor: keep an open
mind. Often, mentors will come in packages that differ from our
expectations. They may be outside of our profession, younger, less
educated, etc . . . but the world works in mysterious ways and Mrs.
Wickouski encourages readers to think about mentors broadly.  In
this modern era of heightened workplace ethics, Mrs. Wickouski
articulates the dark side of mentors. She warns about "dementors"
and "tormentors" -- false mentors providing dubious and sometimes
self-destructive advice, and those who abuse a mentor relationship
to further self-interested, malign ends, respectively. She
describes other mentor dysfunctions, namely boundary-crossing,
rivalry, corruption, and a few others. When a mentor manifests such
behaviors, Mrs. Wickouski counsels it's time to end the
relationship.

Mrs. Wickouski tells readers how to discern when the mentor
relationship is changing and when it is effectively over. Those
changes can be precipitated by romantic boundaries crossed,
emergence of rivalrous sentiment, or encouragement of unethical
behavior or corruption. Mrs. Wickouski aptly notes that once
insidious energies emerge, the mentorship is effectively over.
At this point, certain readers may say to themselves, "Okay, I've
got it. Now I can move on." Or, "My workplace has a formal
mentorship program. I don't need this book anymore." Or even,
"Can't modern technology handle my mentor needs, a Tinder of
mentorship, so to speak?"

Mrs. Wickouski refutes that notion. She analyzes how many mentoring
programs miss the mark. In one of the best passages in the book,
Mrs. Wickouski writes, "Assigning or brokering mentors negates the
most critical components of a true mentor–protege relationship:
the individual process of self-awareness which leads a person to
recognize another individual who will give the advice singularly
needed. That very process is undermined by having a mentor assigned
or by going to a mentoring party." She does not just criticize; she
offers a solution with three valuable tips for choosing the right
mentor and five qualities to ascertain a true mentor in the
unlimited sea of possibilities.

Next, Mrs. Wickouski distinguishes between good advice and bad
advice. She punctuates that discussion with many relevant and
relatable examples that are easy to read and colorfully enjoyable.
This section includes interviews with proteges who have had
successful mentorships. The punchline: in the best mentorships, the
parties harmoniously share personal beliefs and values. Also
important, the protege draws inspiration and motivation from the
mentor. The book winds down as usefully as it started: Mrs.
Wickouski interviews proteges, asking them what they would have
done differently with their mentors if they could turn back the
clock. A common thread seems to be that the proteges would have
gone deeper with their mentors -- they would have asked more
questions, spent more time, delved into their mentors' thinking in
greater depth.

The book wraps up lightly by sharing useful and practical
suggestions for maintenance of the mentor relationship. She answers
questions such as, "Do I invite my mentor to my wedding?" and "Who
pays for lunch?"

Mentor X is an enjoyable read and a useful book for any
professional in any industry at, frankly, any point in time.
Advanced individuals will learn much from the other side, i.e., how
to be more effective mentors. Mrs. Wickouski does a wonderful job
of encouraging use of that all knowing aspect of human existence
which never fails us: proper use of our intuition.

                         About The Author

Stephanie Wickouski is widely regarded as an innovator and
strategic advisor. A nationally recognized lawyer, she has been
named as one of the 12 Outstanding Restructuring Lawyers in the US
by Turnarounds & Workouts and as one of US News' Best Lawyers in
America. She is the author of two other books: Indenture Trustee
Bankruptcy Powers & Duties, an essential guide to the legal role of
the bond trustee, and Bankruptcy Crimes, an authoritative resource
on bankruptcy fraud. She also writes the Corporate Restructuring
blog.



                           *********


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

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

Copyright 2020.  All rights reserved.  ISSN 1529-2754.

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

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

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


                * * * End of Transmission * * *