/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/200806.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Thursday, August 6, 2020, Vol. 21, No. 157 Headlines I R E L A N D MALLINCKRODT PHARMA: Mulls Bankruptcy to Resolve Acthar Dispute N E T H E R L A N D S PLT VII FINANCE: S&P Assigns B Long-Term ICR, Outlook Stable STORM 2017-II: Fitch Affirms Class D Notes at BB+sf P O R T U G A L PELICAN MORTGAGES 3: Fitch Affirms Class D Notes at BBsf R U S S I A SAMARA OBLAST: S&P Assigns BB+ Rating to RUB5BB Sr. Unsec. Bond S P A I N ABANCA CORPORACION: S&P Affirms BB+/B ICRs on Bankoa Acquisition TIVOLI WORLD: Enters Administration Following Financial Woes S W E D E N INTRUM AB: Fitch Gives EUR600MM Senior Note Issue Final BB Rating T U R K E Y ODEA BANK: Moody's Affirms Caa1 LT Deposit Ratings, Outlook Neg. U N I T E D K I N G D O M AVON FINANCE: Moody's Gives B3 Rating to Class F Notes CSM BAKERY: Moody's Hikes CFR to Caa2 & Alters Outlook to Stable RIVER ISLAND: Mulls Company Voluntary Arrangement VIRGIN ATLANTIC: May Run Out of Cash if Rescue Deal Not Approved [*] UK Hospitality Calls on Gov't Support Amid Insolvency Risk - - - - - ============= I R E L A N D ============= MALLINCKRODT PHARMA: Mulls Bankruptcy to Resolve Acthar Dispute --------------------------------------------------------------- Katherine Dohery at Bloomberg Quint reports that drugmaker Mallinckrodt Plc may seek bankruptcy protection to resolve a dispute with the government over its blockbuster Acthar drug and claims that it profited from the opioid addiction crisis. The company is working with external advisers, creditors and litigation claimants and is considering "all options to address legal and financial challenges," according to its second-quarter earnings statement on Aug. 4, Bloomberg Quint relates. This could include Chapter 11 bankruptcy for its main business and most subsidiaries, Bloomberg Quint notes. Acthar Gel, Mallinckrodt's best-selling prescription drug, is used to treat autoimmune disorders and rare diseases, Bloomberg Quint discloses. The company has been in a dispute with the Centers for Medicare & Medicaid Services over rebates for the injectable drug, Bloomberg Quint relays. Mallinckrodt listed more than US$5 billion of debt and US$818.3 million of cash on its balance sheet as of June 26, Bloomberg Quint states. It also fully drew down a revolver, Bloomberg Quint notes. The company, as cited by Bloomberg Quint, said it risks violating terms of its debt in the next 12 months. Sales dropped almost 80% to US$166.5 million, hit by a one-time liability charge of US$534 million related to the Acthar dispute. Mallinckrodt Pharmaceuticals is an Irish–tax registered manufacturer of specialty pharmaceuticals, generic drugs and imaging agents. ===================== N E T H E R L A N D S ===================== PLT VII FINANCE: S&P Assigns B Long-Term ICR, Outlook Stable ------------------------------------------------------------ S&P Global Ratings assigned its 'B' long-term issuer credit rating to PLT VII Finance B.V. and its 'B' issue rating to the bonds that PLT VII Finance S.a.r.l. issued in July. This rating action is in line with our preliminary ratings, which S&P assigned on July 7, 2020. There were no material changes to its base case or the financial documentation compared with its original review. The main difference between the preliminary rating analysis and the final one is slightly higher debt issuance than expected. A total of EUR650 million was raised (including EUR400 million of senior secured fixed rate notes and EUR250 million of senior secured floating rate notes) instead of EUR620 million in the preliminary analysis. As a result, leverage should stand at the higher end of the 6.0x-6.2x S&P's provided in our previous publication, but the additional debt does not affect our rating. S&P said, "The stable outlook reflects our expectation that Bite will increase its organic revenue by 4%-5% from 2021, spurred by mobile ARPU and overall subscriber growth, after stagnating or declining slightly in 2020. We also expect Bite's S&P Global Ratings-adjusted EBITDA margin of 28%-29% in 2020 and 2021, adjusted debt to EBITDA of about 6.2x in 2020 and 5.9x-6.0x in 2021, and FOCF to debt of 7.0%-8.0%. "We could lower the rating if Bite's FOCF approached zero, debt to EBITDA increased to 6.5x or above, or funds from operations cash interest coverage declined toward 2.0x. This could be the result of a more aggressive financial policy resulting in higher debt to fund shareholder distributions or large acquisitions. Although unlikely, it could result from Bite's EBITDA declining, due to an unexpected hike in competition in Lithuania and Latvia, and significantly higher capex. "We could raise the rating if debt to EBITDA approached 5.0x and FOCF to debt remained above 7%. This would be the result of a more conservative financial policy, coupled with Bite consolidating its position in mobile while building market share in fixed activities, increasing its revenue and EBITDA margin faster than expected, and maintaining low capex levels." STORM 2017-II: Fitch Affirms Class D Notes at BB+sf --------------------------------------------------- Fitch Ratings has affirmed Storm 2017-II B.V., Storm 2018-I B.V. and Storm 2018-II B.V. Fitch has also removed the class D notes of Storm 2017-II from Rating Watch Negative. The Outlooks are Stable. STORM 2018-II - Class A XS1865824111; LT AAAsf; Affirmed - Class B XS1865824624; LT AAsf; Affirmed - Class C XS1865824897; LT Asf; Affirmed - Class D XS1865825191; LT BBB+sf; Affirmed STORM 2017-II B.V. - Class A XS1628023134; LT AAAsf; Affirmed - Class B XS1628024702; LT AAsf; Affirmed - Class C XS1628024884; LT Asf; Affirmed - Class D XS1628025188; LT BB+sf; Affirmed STORM 2018-I B.V. - Class A XS1729913514; LT AAAsf; Affirmed - Class B XS1729913787; LT AAsf; Affirmed - Class C XS1729914082; LT Asf; Affirmed - Class D XS1729914165; LT BBBsf; Affirmed TRANSACTION SUMMARY The transactions are true-sale securitisations of Dutch residential mortgage loans, originated by Obvion B.V., a wholly owned subsidiary of Cooperatieve Rabobank U.A. (AA-/Negative/F1+). All three transactions are still in their five-year revolving periods. KEY RATING DRIVERS COVID-19 Additional Stress Assumptions Fitch has identified additional stress scenarios to be applied in conjunction with its European RMBS Rating Criteria in response to the coronavirus outbreak. The agency applied these additional stresses for the rating analysis, including the resolution of RWN. Stable Performance All three transactions continue to exhibit sound performance with late-stage arrears remaining low in absolute terms and comparable with Dutch peer transactions. Three-month plus arrears stand at 0.2% of collateral balance for Storm 2017-II, 0.15% for Storm 2018-I and 0.08% for Storm 2018-II. As of end-June, there were no foreclosures in the Storm 2018-II portfolio. For Storm 2018-I and Storm 2017-II, cumulative losses as a proportion of the portfolio balances remain below 5bp. The early-stage arrears (one to two months past due, excluding loans on payment holidays) have also remained fairly stable and are currently below 50bp for all three transactions according to the latest available performance reports (June for the 2018 transactions and May for the 2017 transaction). Moderate Pressure Expected on Performance The Dutch government has put in place measures to protect employees' and self-employed's income that could be affected by the lockdown rules. These measures, combined with the payment holidays granted on a case-by-case basis by banks, will partially mitigate expected asset performance deterioration in the Netherlands. Defaults are expected to rise from levels in recent years, but will remain lower than the peak observed in vintages during the global financial crisis in 2008/2009 and consecutive prolonged recession due to more prudent underwriting criteria (loan-to-value limits, reduced interest-only loans production, etc.) since. Low Payment Holiday Take-up In line with other Storm transactions, the amount of loans on payment holidays was low at 0.5% (Storm 2017-II as of end May), 0.46% (Storm 2018-I as of end June) and 0.55% (Storm 2018-II as of end June). Fitch does not expect this number to increase significantly in the near term. The measure has been in place since March 20 and the maximum term to postpone mortgage payments (interest and principal) is three months. Notes off RWN The removal of Storm 2017-II class D notes from RWN and Stable Outlook reflect its view of sufficient credit enhancement to mitigate the risks associated with the COVID-19 crisis. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - All three deals are currently in their revolving period. In this period Fitch considered a stressed portfolio composition, based on the additional purchase criteria, rather than the actual portfolio characteristics. Factors that would lead to an upgrade of the class B to D notes are an end of the revolving phase, an increase in CE ratios as the transaction deleverages and sufficient CE to fully compensate the credit losses and cash flow stresses commensurate with higher rating scenarios. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Unanticipated increases in the frequency of defaults or decreases in recovery rates could produce larger losses than its base case. - A longer-than-expected coronavirus crisis that weakens macroeconomic fundamentals and the mortgage market in Netherlands beyond Fitch's current base case. - Insufficient CE ratios to compensate the credit losses and cash flow stresses associated with the current ratings scenarios, all else being equal. Coronavirus Downside Scenario Sensitivity: As outlined in "Fitch Ratings Coronavirus Scenarios: Baseline and Downside Cases", Fitch considers a more severe downside coronavirus scenario for sensitivity purposes whereby a more severe and prolonged period of stress is assumed with a halting recovery from 2Q21. Under this scenario, Fitch's analysis uses a 15% weighted average foreclosure frequency increase and a 15% decrease in the weighted average recovery rate. This scenario could lead to downgrades of two to five notches across all classes for all three transactions, most adversely the lower-rated tranches. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. There were no findings that affected the rating analysis. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information nor conducted a review of origination files as part of its ongoing monitoring. Prior to the transactions' closing, Fitch reviewed the results of a third-party assessment conducted on the asset portfolio information and concluded that there were no findings that affected the rating analysis. Prior to the transactions' closing, Fitch conducted a review of a small targeted sample of the originator's origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and the other information provided to the agency about the asset portfolio. Overall and together with the assumptions, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS STORM 2017-II B.V. has an ESG Relevance Score of '4' for Human Rights, Community Relations, Access & Affordability. The transaction's sizeable exposure to accessibility to affordable housing which, in combination with other factors, impacts the rating. Except for the matters discussed, the highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. =============== P O R T U G A L =============== PELICAN MORTGAGES 3: Fitch Affirms Class D Notes at BBsf -------------------------------------------------------- Fitch Ratings has downgraded the class D and E of Sagres, STC S.A. / Pelican Mortgages No.4 Plc and affirmed the class A, B and C notes. It has also affirmed Sagres, STC S.A. / Pelican Mortgages No.3 Plc, Sagres, STC S.A. / Pelican Mortgages No.5 and Sagres, STC S.A. / Pelican Mortgages No.6. All ratings have been removed from Rating Watch Negative, where were placed on April 16, 2020. Sagres, STC S.A. / Pelican Mortgages No.5 - Class A XS0419743033; LT A+sf; Affirmed - Class B XS0419743389; LT A-sf; Affirmed - Class C XS0419743462; LT BBBsf; Affirmed Sagres, STC S.A. / Pelican Mortgages No.3 Plc - Class A XS0293657416; LT BBBsf; Affirmed - Class B XS0293657689; LT BBBsf; Affirmed - Class C XS0293657846; LT BB+sf; Affirmed - Class D XS0293657929; LT BBsf; Affirmed Sagres, STC S.A. / Pelican Mortgages No.6 - Class A PTSSCQOM0006; LT A+sf; Affirmed Sagres, STC S.A. / Pelican Mortgages No.4 Plc - Class A XS0365137990; LT A+sf; Affirmed - Class B XS0365138295; LT A+sf; Affirmed - Class C XS0365138964; LT BBB+sf; Affirmed - Class D XS0365139004; LT B-sf; Downgrade - Class E XS0365139939; LT B-sf; Downgrade TRANSACTION SUMMARY The transactions are cash flow securitisations of Portuguese residential mortgage loans originated by Caixa Economica Montepio Geral, Caixa economica bancaria, S.A. (Montepio; B-/Negative/B). The rating actions follow the annual review of the transactions. KEY RATING DRIVERS COVID-19 Assumptions Drive Rating Actions The downgrade of the class D and E notes of Pelican 4 reflects the higher projected losses following the additional stress scenario for COVID-19. The affirmation of the other class of notes and of Pelican 3, 5 and 6 reflect their resilience to higher projected losses. Credit enhancement ratios are able to compensate for the risks associated with the COVID-19 crisis. The Outlooks on the class C and E notes of Pelican 4 and class B and C notes of Pelican 5 are Negative as they are sensitive to a further increase of payment holidays. The Outlooks on the other classes are Stable. Fitch believes the class D notes of Pelican 4 are more resilient to higher take-up rate of loans in moratoria compared with the class E notes, due to the higher CE. This drives the Stable Outlook on the class D notes. Fitch has identified additional stress scenario analysis to be applied in conjunction with its European RMBS Rating Criteria in response to the developments related to the coronavirus pandemic, in accordance with its Global Structured Finance Rating Criteria. Fitch will apply this additional stress scenario analysis to its existing and new rating analysis, including to the resolution of any notes on RWN until further notice. To capture the possible build-up of arrears in Pelican 3, 4 and 5 in the coming months due to the COVID-19 crisis, Fitch has performed an arrears adjustment sensitivity, which consists of increasing the rating default rate by 5%. No arrears adjustment was performed for Pelican 6 as it already shows notably higher delinquencies compared with the other transactions and high CE to support the ratings. Furthermore, Fitch has made additional adjustments for payment holidays from 15% to 30%, depending on the current level of payment holidays within the transactions. Ratings Capped The ratings of the senior notes of Pelican 4 and Pelican 5 are capped at 'A+sf'. Fitch has tested whether payment interruption risk is mitigated and determined that the amortising cash reserve fund is adequate up to the 'Asf' rating category. The cash reserve is equal to 3% of the aggregate outstanding notes balance (EUR15.1 million for Pelican 4 and EUR15.0 million for Pelican 5) and can also be drawn to cover asset losses. For Pelican 3 Fitch considers the cash reserve as a limited mitigant for payment interruption risk and adequate for the notes' 'BBBsf' rating. The cash reserve fund is at its floor of EUR3.2 million. The agency does not give credit to the liquidity facility provided by NatWest Markets Plc (A+/Negative/F1) because the documented counterparty provisions are not consistent with Fitch's counterparty criteria. Pelican 6's rating is capped at 'A+sf'. The documented counterparty provisions for the account bank (Citibank, N.A., A+/Negative/F1) envisage minimum ratings of 'BBB+' and 'F2' which support note ratings up to the 'Asf' rating category. Steady Performance for Pelican 3, 4 and 5 Over the last 12 months, the asset performance has remained stable for all transactions, supported by high seasoning (from 13 to 8 years), portfolio deleveraging and sufficient CE. The cumulative gross default ratio for Pelican 6 is higher than for the other transactions (which are below 2%) but is almost unchanged compared with last year (6.1% versus 5.9% one year ago). During the intensification of the coronavirus pandemic, the originator has granted payment holidays under the Portuguese government scheme (both for principal and interests) that may last up to March 2021; at June 2020 they represented around 10% of the outstanding portfolio for Pelican 3, around 15% for Pelican 4 and Pelican 5 and around 25% for Pelican 6, compared with a market average of around 20% in Portugal. Governance Factors - Elevated ESG Scores Sagres, STC S.A. / Pelican Mortgages No.3 Plc has an ESG Relevance Score of 5 for Transaction Parties & Operational Risk due to the absence of remedy actions as per contractual terms following counterparty eligibility breaches, which has a negative impact on the credit profile, and is highly relevant to the rating, resulting in a change to the rating of three notches. Sagres, STC S.A. / Pelican Mortgages No.3 Plc, Sagres, STC S.A. / Pelican Mortgages No.4 Plc and Sagres, STC S.A. / Pelican Mortgages No.5 have an ESG Relevance Score of 5 for Transaction & Collateral Structure due to payment interruption risk, which has a negative impact on the credit profile, and is highly relevant to the rating, resulting in a change to the rating. Sagres, STC S.A. / Pelican Mortgages No.6 has an ESG Relevance Score of 5 for Transaction Parties & Operational Risk due to modification of counterparty eligibility triggers after transaction closing, which has a negative impact on the credit profile, and is highly relevant to the rating, resulting in a change to the rating of two notches. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: Change in the replacement triggers for the account bank would lead to a higher rating for the senior notes of Pelican 6 Mitigation of payment interruption risk would allow upgrades of the senior notes of Pelican 3, 4 and 5 Build-up of CE sufficient to compensate higher expected losses Factors that could, individually or collectively, lead to negative rating action/downgrade: Liquidity positions of the senior notes weakening due to large take ups of mortgage payment moratoria and new defaults as a consequence of the coronavirus crisis Drawings on the cash reserve accounts (due to defaults greater than expected) will reduce the available payment interruption mitigants and may lead to downgrades of the notes. A longer-than-expected coronavirus crisis that erodes macroeconomic fundamentals and the mortgage market in Portugal beyond Fitch's expectations. CE failing to fully compensate for credit losses and cash flow stresses associated with the current ratings scenarios, all else being equal. As outlined in "Fitch Ratings Coronavirus Scenarios: Baseline and Downside Cases", Fitch considers a more severe downside coronavirus scenario for sensitivity purposes whereby a more severe and prolonged period of stress is assumed with a halting recovery from 2Q21. Under this scenario, Fitch assumed a 15% increase in weighted average foreclosure frequency and a 15% decrease in weighted average recovery rate. The results indicate an adverse rating impact of up to four notches for Pelican 3, 4 and 5, and no impact for Pelican 6. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. There were no findings that affected the rating analysis. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. For Pelican 3, 4 and 5 Fitch did not undertake a review of the information provided about the underlying asset pools ahead of the transactions' initial closing. The subsequent performance of the transactions over the years is consistent with the agency's expectations given the operating environment and Fitch is therefore satisfied that the asset pool information relied upon for its initial rating analysis was adequately reliable. For Pelican 6 prior to the transaction closing, Fitch reviewed the results of a third-party assessment conducted on the asset portfolio information and concluded that there were no findings that affected the rating analysis. For Pelican 6 prior to the transaction closing, Fitch conducted a review of a small targeted sample of Montepio's origination files and found the information contained in the reviewed files to be adequately consistent with the originator's policies and practices and the other information provided to the agency about the asset portfolio. Overall, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS Sagres, STC S.A. / Pelican Mortgages No.3 Plc: Transaction & Collateral Structure: 5, Transaction Parties & Operational Risk: 5 Sagres, STC S.A. / Pelican Mortgages No.4 Plc: Transaction & Collateral Structure: 5 Sagres, STC S.A. / Pelican Mortgages No.5: Transaction & Collateral Structure: 5 Sagres, STC S.A. / Pelican Mortgages No.6: Transaction Parties & Operational Risk: 5 Except for the matters discussed, the highest level of ESG credit relevance, if present, is a score of 3 - ESG issues are credit neutral or have only a minimal credit impact on the entity(ies), either due to their nature or the way in which they are being managed by the entity(ies). =========== R U S S I A =========== SAMARA OBLAST: S&P Assigns BB+ Rating to RUB5BB Sr. Unsec. Bond --------------------------------------------------------------- S&P Global Ratings said that it had assigned its 'BB+' long-term global scale issue rating to Russian region Samara Oblast's proposed Russian ruble (RUB) 5 billion (about $70 million), six-year senior unsecured bond. S&P understands that Samara Oblast (BB+/Stable/--) plans to issue the bond Aug. 11, 2020. The bond will have 24 quarterly fixed-rate coupons and an amortizing repayment schedule. The coupon rate will be disclosed at issuance. According to the redemption schedule, 30% of the bond is to be repaid in November 2022, 30% in November 2024, 20% in November 2025, and 20% in August 2026. ========= S P A I N ========= ABANCA CORPORACION: S&P Affirms BB+/B ICRs on Bankoa Acquisition ---------------------------------------------------------------- S&P Global Ratings affirmed its 'BB+/B' long- and short-term issuer credit ratings on Spain-based Abanca Corporacion Bancaria S.A. The outlook remains negative. The affirmation follows Abanca's announcement of a preliminary agreement to acquire Spain-based Bankoa S.A. from Credit Agricole S.A. (A+/Negative/A-1). The transaction is subject to the usual regulatory approvals. The price is undisclosed but we expect it to be below Bankoa's book value, and the effect on Abanca's capitalization to be more manageable than its previously announced acquisition of Portugal-based Eurobic, which ultimately did not. S&P said, "Based on the information currently available, we expect that the acquisition would slightly erode Abanca's capitalization, but this would be manageable at the current rating level. We estimate a 30-35 basis point (bps) hit to Abanca's risk-adjusted capital (RAC) ratio. Therefore, and given the cancelled Eurobic acquisition, we now see the bank's RAC ratio standing at about 7.9% by year-end 2021. This compares with our previous expectation, including Eurobic, of 7.2% and 8.6% at year-end 2019. Although at 7.9% Abanca would still have some room to absorb a harsher economic shock, higher credit losses than we currently envisage (we expect cost or risk of at least 70 bps in 2020, declining to about 50 bps in 2021) would erode bottom line profitability and ultimately capitalization. Based on this, and considering current macroeconomic uncertainties, we think that Abanca's RAC ratio might not remain sustainably above 7% over the next 12-18 months. "Although not included in our forecast due to market uncertainty, management still has some room to fill its additional Tier 1 (AT1) regulatory bucket through market issuance to support capital strengthening." A EUR300 million issuance would add about 60 bps to our RAC ratio for Abanca. Primarily present in the wealthy Basque Country region, Bankoa's risk profile appears to be relatively sound and its business seems to fit well with Abanca's strategic focus of expanding its small and midsize enterprise lending franchise and asset management business. S&P considers that Bankoa's well-entrenched branch network will contribute to Abanca's expansion in the region and significantly enhance its off-balance sheet volumes. In particular, the acquisition will increase its loan book by about 4.6% but assets under management by about 10.8%. Moreover, the transaction is another step forward in Abanca's inorganic growth strategy and will contribute to its geographic and business-mix diversification. S&P said, "The negative outlook on Abanca indicates the possibility of a downgrade in the next 12-18 months if we anticipate that its capitalization could deteriorate more than expected on the back of heightened economic risks in Spain, or if the bank's performance proved weaker than we envisage, given that it does not have a strong earnings base to cushion potentially higher credit losses. "We could lower our ratings if economic and operating conditions in Spain deteriorated more severely, or the rebound took longer, than expected, leading to a sharper hit to Abanca's capital position. Specifically, heightened economic risk in Spain could result in a negative 90 bps impact on our RAC calculation for Abanca, implying that the ratio would no longer be sustainably above 7%. "We could revise the outlook to stable if the economic shock does not meaningfully affect Abanca and we observe the bank returning to a path of capital strengthening. At the same time, the bank would need to demonstrate its ability to enhance its efficiency and underlying profitability to levels closer to those of its higher-rated peers." TIVOLI WORLD: Enters Administration Following Financial Woes ------------------------------------------------------------ John Smith at EuroWeekly reports that Tivoli World amusement park, in Benalmadena which was opened in 1972, has been troubled with financial problems for some time and has now been placed into Administration. According to EuroWeekly, administrators have been called in to run the park which was owned by the International Company of Park and Attractions SA (Cipasa). Research will now be undertaken to decide whether the business has a viable future or whether it should be liquidated and creditors satisfied with whatever funds are available, EuroWeekly discloses. There have been ongoing court battles over ownership of the grounds on which Tivoli is sited, but this should not affect the work of the Administrator who is quoted as saying that the main creditors appear to be the Treasury and Social Security who may be owed as much as much as EUR10 million according to Spanish press reports, EuroWeekly notes. =========== S W E D E N =========== INTRUM AB: Fitch Gives EUR600MM Senior Note Issue Final BB Rating ----------------------------------------------------------------- Fitch Ratings has assigned Intrum AB's EUR600 million 4.875% five-year senior note issue (ISINs: XS2211136168, XS2211137059) a final rating of 'BB'. The final rating is in line with the expected rating Fitch assigned to Intrum's initially planned EUR500 million issue on July 23, 2020. KEY RATING DRIVERS The rating is aligned with Intrum's 'BB' Long-Term Issuer Default Rating, as the notes represent unconditional and unsecured obligations of the company. It also reflects Fitch's expectation of average recovery prospects, given that Intrum's funding is largely unsecured. Intrum's Long-Term IDR reflects its high leverage, a characteristic of the debt-purchasing sector and driven in its own case by the debt taken on as part of its 2017 combination with the Lindorff group, and subsequent corporate activity. It also takes into account Intrum's market-leading franchise in the European debt-purchasing and credit-management sector, where the group benefits both from diversification across 25 countries and from its high proportion of fee-based servicing revenue, which complements more balance sheet-intensive investment activities. The Negative Outlook on Intrum's IDR reflects the medium-term risk stemming from the COVID-19 pandemic, as Fitch sees potential rating pressure arising from any sustained associated slowdown in debt-collection activities. This could adversely impact earnings generation, the value of on-balance sheet portfolio investments, and ultimately Intrum's ability to achieve deleveraging. The proceeds of the new senior notes, including the additional EUR100 million above the initial plan, are being used to refinance other euro-denominated notes due in 2022. Therefore, Fitch does not expect the transaction to impact Intrum's leverage ratios, but views positively the maturity extension. In Intrum's recently reported 1H20 results leverage under the group's core internal net debt-to-rolling 12-month cash EBITDA measure fell slightly to 4.4x from 4.5x at end-1Q20. Fitch assesses leverage primarily by gross debt-to-adjusted EBITDA (including adjustments for portfolio amortisation). When calculated on the basis of annualised interim earnings (after adding back Intrum's 1Q20 portfolio revaluation as an exceptional item), this ratio also fell at end-1H20 to around 5.0x, from 5.2x at end-1Q20. Fitch assigns Intrum an ESG score of '4' in relation to financial transparency, in view of the significance of internal modelling to portfolio valuations and associated metrics such as estimated remaining collections. However, this is a feature of the debt-purchasing sector as a whole, and not specific to Intrum. RATING SENSITIVITIES The senior notes' rating is primarily sensitive to changes in Intrum's Long-Term IDR. Factors that could, individually or collectively, lead to negative rating action/downgrade: - A sustained reduction in earnings generation, particularly if giving rise to a weakening in key debt service ratios and other financial efficiency metrics; - Failure to demonstrate progress towards management's net debt-to-last 12 months cash EBITDA target of 2.5x-3.5x, whether resulting from lack of EBITDA growth or increased appetite for debt, such as to cause doubt over its likely achievement by 2022; - A weakening in asset quality, as reflected in acquired debt portfolios significantly underperforming anticipated returns or repeated material write-downs in their value; or - An adverse operational event or significant disruption in business activities undermining Fitch's view of franchise strength and business-model resilience. Changes to Fitch's assessment of recovery prospects for senior unsecured debt in a default (e.g. introduction to Intrum's debt structure of a materially larger revolving credit facility, ranking ahead of senior unsecured debt) could also result in the unsecured debt rating being notched down from the IDR. Factors that could, individually or collectively, lead to positive rating action/upgrade: - Given the Negative Outlook, rating upside for the Long-Term IDR is limited over the short term. However, over the medium term, a revision of the Outlook to Stable could materialise on the back of sustained earnings and cashflow resilience amid the current challenging environment. ESG CONSIDERATIONS Intrum has an ESG Relevance Score of '4' for Financial Transparency. Except for the matters discussed, the highest level of ESG credit relevance, if present, is a score of 3. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity(ies), either due to their nature or to the way in which they are being managed by the entity(ies). BEST/WORST CASE RATING SCENARIO International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. =========== T U R K E Y =========== ODEA BANK: Moody's Affirms Caa1 LT Deposit Ratings, Outlook Neg. ---------------------------------------------------------------- Moody's Investors Service affirmed Odea Bank A.S.'s Caa1 long-term deposit ratings and caa1 standalone Baseline Credit Assessment. The outlook on the long-term deposit ratings remains negative. The affirmation follows the withdrawal the ratings of Odeabank's Lebanese parent, Bank Audi S.A.L. The affirmation of Odeabank's standalone BCA and its deposit ratings reflects Moody's view that the Turkish subsidiary's financial profile remains consistent with its caa1 BCA and is unaffected by the withdrawal of the parent's ratings. Bank Audi is Odeabank's controlling shareholder with a 76% stake. RATINGS RATIONALE The affirmation of Odeabank's deposit ratings and BCA reflects Moody's view that its financial profile remains consistent with its existing caa1 BCA. Odeabank's standalone BCA of caa1 remains driven by a weak solvency profile in a very weak operating environment, partly offset by good liquidity. In particular, problem loans (12.5% of gross loans at end-March 2020) were high and Stage 2 (significantly deteriorated) loans (33% of loans at the same date) the highest amongst Turkish banks rated by Moody's and likely to increase this year and next, given Moody's expectations of a coronavirus-related recession in Turkey. Capitalisation was modest (Tier 1 ratio of 12% at end-March 2020) relative to the bank's high asset risk. Moody's also views the bank's profitability (0.4% annualised return on assets in Q1 2020) as low and likely to decline, driven by higher loan loss provisions., According to Moody's, these challenges continue to be only partly mitigated by moderate dependence on wholesale funding (15% of assets at end-March 2020), which is amply covered by good liquidity (32% of assets at the same date). Moody's considers that a degree of correlation exists between Odeabank and its parent, as pronounced credit or reputational issues at Bank Audi could negatively affect confidence in Odeabank, particularly considering the Turkish subsidiary's focus on corporate, commercial and SME clients (95% of performing loans at end-2019), which are typically more confidence sensitive than retail clients. This correlation was already incorporated into the positive BCA differential of three notches between the subsidiary and its parent at the time of the parent's rating withdrawal, at which time Bank Audi's BCA was ca. Risks associated with Bank Audi are however mitigated by 1) the independence of the bank's franchise and financial performance in Turkey and 2) regulatory ring-fencing by the Turkish authorities, which limits the downside risk that Bank Audi could take steps to upstream capital and/or liquidity without prior regulatory approval. As such, Odeabank's financial profile remains largely independent from that of Bank Audi. RATING OUTLOOK Odeabank's long-term deposit ratings continue to have a negative outlook, in line with the negative outlook on the sovereign rating, reflecting the risk of a further increase in the probability of capital controls and restrictions on access to foreign currency. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS There is limited upside on Odeabank's ratings, as indicated by the current negative outlook. However, Moody's could stabilise the outlook following an improvement in the operating environment, which could reduce the bank's stock of problem loans and improve profitability. Conversely, Moody's could downgrade the ratings in the event that further deterioration in Turkey's operating environment led to weakening of Odeabank's financial fundamentals, including profitability and asset quality. A material declines in capital ratios, including in the event of significant dividends to the parent, could also place negative pressure on the ratings. LIST OF AFFECTED RATINGS Issuer: Odea Bank A.S. Affirmations: Long-term Counterparty Risk Ratings, affirmed B3 NSR Long-term Counterparty Risk Rating, affirmed Baa1.tr Short-term Counterparty Risk Ratings, affirmed NP NSR Short-term Counterparty Risk Rating, affirmed TR-2 Long-term Bank Deposits, affirmed Caa1, outlook remains Negative NSR Long-term Bank Deposits, affirmed Ba1.tr Short-term Bank Deposits, affirmed NP NSR Short-term Bank Deposits, affirmed TR-4 Long-term Counterparty Risk Assessment, affirmed B3(cr) Short-term Counterparty Risk Assessment, affirmed NP(cr) Baseline Credit Assessment, affirmed caa1 Adjusted Baseline Credit Assessment, affirmed caa1 Subordinate Regular Bond/Debenture, affirmed Caa3(hyb) Outlook Action: Outlook remains Negative PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Banks Methodology published in November 2019. =========================== U N I T E D K I N G D O M =========================== AVON FINANCE: Moody's Gives B3 Rating to Class F Notes ------------------------------------------------------ Moody's Investors Service has assigned definitive credit ratings to the following Classes of Notes issued by Avon Finance No. 1 plc: GBP735.7M Class A Mortgage Backed Floating Rate Notes due November 2049, Assigned Aaa (sf) GBP70.5M Class B Mortgage Backed Floating Rate Notes due November 2049, Assigned Aa1 (sf) GBP30.0M Class C Mortgage Backed Floating Rate Notes due November 2049, Assigned A2 (sf) GBP18.6M Class D Mortgage Backed Floating Rate Notes due November 2049, Assigned Baa2 (sf) GBP23.3M Class E Mortgage Backed Floating Rate Notes due November 2049, Assigned Ba2 (sf) GBP25.2M Class F Mortgage Backed Floating Rate Notes due November 2049, Assigned B3 (sf) Moody's has not assigned ratings to the GBP28.6M Class R Notes due November 2049, to the Principal Residual Certificates, the Revenue Residual Certificates or the Class X Certificate. The portfolio backing this transaction consists of UK Non-Conforming residential mortgage loans which were previously securitised in the transaction Warwick Finance Residential Mortgages Number Two plc, which was called on 22 June 2020. The portfolio pool balance of approximately GBP953 million, as of the 16 June 2020 portfolio reference date, consists of 8,809 loans. Secured by first ranking mortgages on properties located in the UK, of which 73.3% are owner occupied and 26.7% are buy-to-let. RATINGS RATIONALE The ratings take into account the credit quality of the underlying mortgage loan pool, from which Moody's determined the MILAN Credit Enhancement and the portfolio expected loss, as well as the transaction structure and legal considerations. The expected portfolio loss of 4.25% and the MILAN required CE of 19.0% serve as input parameters for Moody's cash flow model and tranching model. The expected loss is 4.25%, which is in line with other recent UK non-conforming transactions and takes into account: (i) the proportion of the portfolio having some adverse credit (8.9%); (ii) the relatively high proportion of self-certified (68.6%), Buy-To-Let (26.7%) and interest-only loans (82.3%); (iii) the weighted average current LTV of 72.2%; (iv) the relatively high proportion of loans in arrears in the portfolio (13.7%); (v) the current macroeconomic environment and its view of the future macroeconomic environment in the UK taking into account the impact of Covid-19 outbreak as well as Brexit; (vi) 16.8% exposure to Covid-19 related payment holidays as of 16 June 2020 and (vii) benchmarking with similar transactions in the UK non-conforming sector. MILAN CE for this pool is 19.0%, which is in line with other recent UK non-conforming transactions and takes into account: (i) the current LTV of 72.2%; (ii) borrowers with adverse credit history (8.9%); (iii) the relatively high proportion of loans in arrears in the portfolio (13.7%); (iv) the relatively high proportion of self-certified (68.6%), Buy-To-Let (26.7%) and interest-only loans (82.3%); and (v) benchmarking with similar transactions in the UK non-conforming sector. The rapid spread of the coronavirus outbreak, the government measures put in place to contain it and the deteriorating global economic outlook, have created a severe and extensive credit shock across sectors, regions and markets. Its analysis has considered the effect on the performance of consumer assets from the collapse in the UK economic activity in the second quarter and a gradual recovery in the second half of the year. However, that outcome depends on whether governments can reopen their economies while also safeguarding public health and avoiding a further surge in infections. 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. At closing, a non-amortising General Reserve Fund will be fully funded to 3% of the closing pool, i.e. GBP28.6 million, and will be replenished to 3% with revenue receipts to the extent available. If the General Reserve Fund balance at any interest payment date falls below 2.0%, the build-up of an additional Liquidity Reserve will be triggered. The Liquidity Reserve Fund will be sized following a target balance schedule of outstanding Class A and B Notes, and will cover shortfalls on senior expenses, interest shortfall on the Class A at any time, shortfall on the X certificates payment, and interest shortfall on the Class B if its PDL is below 10%. The Liquidity Reserve Fund will be funded by diversion of principal proceeds until fully funded. Once fully funded, it will be topped-up using the revenue waterfall. The target balance schedule is defined as follow: Nov-2020: 2.25% of outstanding Class A-B; Feb-2021: 1.85% of outstanding Class A-B; May-2021: 1.65% of outstanding Class A-B; Aug-2021: 1.55% of outstanding Class A-B; Nov-2021 onwards: 1.50% of outstanding Class A-B. The LRF amortization proceeds will flow through the principal waterfall. Operational Risk Analysis: Western Mortgage Services Limited (not rated) acts as a servicer. To mitigate servicing disruption risk, there is a servicer facilitator, CSC Capital Markets UK Limited (not rated), and an independent cash manager, U.S. Bank Global Corporate Trust Limited (not rated; a subsidiary of U.S. Bancorp (A1)). To ensure payment continuity over the transaction's lifetime, the transaction documents incorporate estimation language whereby the cash manager can use the three most recent servicer reports to determine the cash allocation in case no servicer report is available. The transaction also benefits from principal to pay interest for the Class A Notes and for Classes B to F Notes, subject to certain conditions being met. Interest Rate Risk Analysis: 100% of the portfolio pay a floating rate of interest. As is the case in many UK RMBS transactions the basis risk mismatch between the floating rate on the underlying loans and the floating rate on the Notes is unhedged. Moody's has applied a stress to account for the basis risk in its portfolio yield calculation. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was "Moody's Approach to Rating RMBS Using the MILAN Framework" published in May 2020. The analysis undertaken by Moody's at the initial assignment of ratings for RMBS securities may focus on aspects that become less relevant or typically remain unchanged during the surveillance stage. Please see "Moody's Approach to Rating RMBS Using the MILAN Framework" for further information on Moody's analysis at the initial rating assignment and the on-going surveillance in RMBS. Factors that would lead to an upgrade or downgrade of the ratings: Factors that may cause an upgrade of the ratings of the Notes include significantly better than expected performance of the pool together with an increase in credit enhancement of Notes. Factors that would lead to a downgrade of the ratings include: (i) increased counterparty risk leading to potential operational risk of servicing or cash management interruptions; and (ii) economic conditions being worse than forecast resulting in higher arrears and losses. CSM BAKERY: Moody's Hikes CFR to Caa2 & Alters Outlook to Stable ---------------------------------------------------------------- Moody's Investors Service has upgraded ratings of CSM Bakery Solutions Limited, including the Corporate Family Rating to Caa2 from Caa3, and the Probability of Default rating to Caa2-PD from Ca-PD. Moody's also has assigned ratings to CSM Bakery Solutions LLC's amended and extended secured credit facilities, including a Caa1 rating to its $448 million first lien term loan and a Caa3 rating to its $210 million second lien-term loan. Finally, Moody's revised the outlook to stable from negative. The rating upgrades reflect the recent successful completion of a recapitalization, including debt maturity extensions up to 18 months along with a EUR50 million cash equity contribution from the sponsor. The transaction reduced financial leverage and enhanced liquidity through repayment of revolver borrowings, adding cash to the balance sheet and extending maturities. This has provided the company a modest window to reduce financial leverage through an operational turnaround or other possible actions such as asset sales. Moody's cautions that financial leverage will remain high and liquidity could deteriorate over time as the extended maturities draw closer. Additionally, the company's ability to generate positive free cash flow will be challenged over the next year by significantly higher financing costs associated with the refinancing and business disruptions and slowdowns caused by the coronavirus pandemic. Cash interest expense could potentially decrease modestly if the company elects to pay a higher interest rate on the second lien term loan along with 90% pay-in-kind interest. However, debt accretion on the second-lien term loan through the PIK feature would likely exceed free cash flow, resulting in higher total debt. As a result, Moody's-adjusted debt/EBITDA likely will remain above 10x over the next year. In addition, because the tenor of the maturity extensions was relatively short, significant refinancing risk remains. Thus, while Moody's anticipates gradual improvement in operating performance as the business environment recovers, the credit benefit will partly be offset by nearing debt maturities, the closest of which is that of the company's $100 million ABL liquidity facility in October 2021. Moody's has taken the following rating actions: Upgrades: Parent Guarantor: CSM Bakery Solutions Limited Corporate Family Rating, Upgraded to Caa2 from Caa3 Probability of Default Rating, Upgraded to Caa2-PD from Ca-PD Assignments: Issuer: CSM Bakery Solutions LLC $448 million GTD Senior Secured First Lien Term Loan due January 4, 2022, Assigned Caa1 (LGD3) $210 million GTD Senior Secured Second Lien Term Loan due February 4, 2022, Assigned Caa3 (LGD4) Outlook Actions: Parent Guarantor: CSM Bakery Solutions Limited Outlook, Changed to Stable from Negative Issuer: CSM Bakery Solutions LLC Outlook, Changed to Stable from Negative In June 2020, CSM extended maturities of its secured credit facilities. The $448 million first lien term loan maturity date was extended by eighteen months to January 4, 2022; and the $210 million second lien term loan maturity date was extended by six months to February 4, 2022. The pricing was increased on each facility to LIBOR+ 6.25% and LIBOR+10%, respectively. The maturity date of the ABL revolver credit (not rated by Moody's) was extended by 15 months to October 2021; the size of the facility was reduced slightly to $100 million. Pricing on the ABL was unchanged. Under certain conditions, the company has the option to pay the second-lien loan interest in cash at an interest rate of LIBOR+ 7.75% or pay a higher interest rate 1% in cash plus LIBOR+9% payment-in-kind. As part of the transaction, sponsor firm Rhone Capital contributed EUR50 million cash equity to the company to support its liquidity and to fund transaction costs. Moody's is taking no action on the Ca rating assigned to the second lien term loan that was to mature in July 2021. That rating will be withdrawn since it was replaced by the extended second lien term loan. In addition, shortly after its action Moody's will move the CFR and PDR from CSM Bakery Solutions Limited to CSM Bakery Solutions LLC, which is the borrower under the amended and extended term loans. RATINGS RATIONALE CSM's Caa2 CFR reflects its high financial leverage, low profit margin, improved but only adequate liquidity and poor future earnings visibility due partly to the coronavirus pandemic. These negative factors are balanced against supportive fundamentals of CSM's business, including its leading positions in the North American and European premium bakery categories including icings, glazes, cakes, cookies, and pastry ingredients. The rating also reflects relatively aggressive financial policies under private equity ownership. CSM is controlled and supported by sponsor firm Rhone Capital. The rapid spread of the coronavirus outbreak, deteriorating global economic outlook, low oil prices, and high asset price volatility are creating an unprecedented credit shock across a range of sectors and regions. Foodservice and other out-of-home sales, including sales through traditional bakery channels, have been negatively affected by the coronavirus pandemic. CSM's exposure to these channels is about 13% of global sales, which will be reflected in weaker earnings over the next several quarters. Moody's regards the coronavirus outbreak as a social risk under its ESG framework, given the substantial implications for public health and safety. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS The stable outlook reflects Moody's expectation that CSM will generate positive cash flow over the next year, maintain at least $40 million of undrawn capacity under the $100 million ABL revolver, and remain comfortably in compliance with financial covenants throughout the remaining tenor of the credit facilities. Ratings could be downgraded if operating performance does not improve, or liquidity or recovery estimates deteriorate. Ratings could be upgraded if operating performance improves such that the company is able to sustainably generate positive free cash flow, reduce leverage meaningfully, and proactively refinance the ABL and extended term loans. The principal methodology used in these ratings was Consumer Packaged Goods Methodology published in February 2020. CSM Bakery Solutions Limited is headquartered in Cardiff, United Kingdom. The company is managed out of its US operations located in Tucker, Georgia (USA). CSM produces and distributes bakery ingredients and products for artisan and industrial bakeries, and for in-store and out-of-home markets, mainly in Western Europe and North America. The company supplies bakery products finished or semi-finished. Annual sales are approximately EUR1.6 billion. The company is owned and controlled by investment funds associated with private equity firm Rhone Capital. RIVER ISLAND: Mulls Company Voluntary Arrangement ------------------------------------------------- Andrea Byrne at FashionUnited reports that River Island is reportedly the most recent retailer to potentially undertake a company voluntary arrangement (CVA) or other form of administration due to the effects of the Covid-19 pandemic. The fashion company is considering the move in an attempt to close or cut rents on some of its 300 stores, FashionUnited relays, citing Retail Week. According to FashionUnited, River Island executives are reportedly concerned about going through with the process due to the retailer's stable financial situation. In early July, it was reported that River Island was planning to axe around 250 head office roles as part of cost-cutting measures, FashionUnited recounts. VIRGIN ATLANTIC: May Run Out of Cash if Rescue Deal Not Approved ---------------------------------------------------------------- BBC News reports that Sir Richard Branson's Virgin Atlantic could run out of cash next month if creditors do not approve a GBP1.2 billion rescue deal, a UK court has heard. According to BBC, Virgin's lawyers said the airline is "fundamentally sound" but a restructuring and fresh injection of money is critical to securing its future. The plans need approval from creditors under a court-sanctioned process, BBC notes. As part of that process, Virgin Atlantic is also seeking protection under chapter 15 of the US bankruptcy code, BBC states. That enables a foreign debtor to shield assets in the country, BBC says. Like other airlines, Virgin Atlantic's finances have been hit hard by the collapse in air travel due to the pandemic, BBC relays. Last month, the company agreed a rescue deal worth GBP1.2 billion (US$1.6 billion) to secure its future beyond the coronavirus crisis, BBC recounts. The court in London heard that the airline's cash flow would drop to "critical levels" by the middle of next month and it would "run out of money altogether" by the week beginning Sept. 28, BBC notes. According to BBC, David Allison QC, for Virgin Atlantic, told Mr. Justice Trower in written submissions that the group had "a fundamentally sound business model which was not in any problems at all before the Covid-19 pandemic". "Passenger demand has plummeted to a level that would, until recently, have been unthinkable," BBC quotes Mr. Allison as saying. "As a result of the Covid-19 pandemic, the group is now undergoing a liquidity crisis." Mr. Allison, as cited by BBC, said that without a "solvent recapitalization", including an injection of new money, Virgin Atlantic's directors would have "no choice" but to place the company into administration in mid-September 2020 in order to wind down the business and sell any assets, where possible. He said the restructuring needed to be sanctioned by early September, BBC discloses. Mr. Justice Trower gave the go-ahead for a meeting of creditors on Aug. 25, BBC notes. [*] UK Hospitality Calls on Gov't Support Amid Insolvency Risk -------------------------------------------------------------- Adam Coghlan at Eater reports that trade body UK Hospitality has issued new calls for the government to provide "decisive support" to restaurants, pubs, and bars after a new survey found that over 75 percent of hospitality businesses in the U.K. risk being unable to pay their bills within 12 months, as a result of the COVID-19 pandemic. According to Eater, the survey, carried out by UK Hospitality in partnership with data analysts CGA, found that as many as 20% of businesses are at "significant risk" of insolvency or "expect" insolvency within the next year. More than half of businesses believe there is a "slight risk", while fewer than 25% of those surveyed were found to be facing no risk, Eater notes. The findings are drawn from the responses of 128 businesses with a combined total of nearly 12,000 outlets, Eater states. Based on the results, UK Hospitality has renewed its plea for further intervention from the government, otherwise, it says, "many businesses will face ruin, with hundreds of thousands of jobs at risk", Eater notes. Eater understands that UK Hospitality will outline a new proposal to the government later this week, with specific suggestions on how the government may finally intervene on rent--still chief among the issues faced by businesses attempting to recover from the pandemic. It is thought it will build on suggestions issued in June, according to Eater. Before that, UK Hospitality chief executive Kate Nicholls, as cited by Eater, said that the government must do four things: extend the business rates holiday (beyond next March); extend the VAT cut (which is due to expire in January); introduce employment support for businesses still unable to reopen (meaning some form of furlough scheme extension or sector-specific adaptation); and provide what she referred to as "financial support on rent." If the government doesn't act, "we are going to see businesses fail and jobs lost just as the economy begins to reopen." ********* 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 * * *