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

                          E U R O P E

          Tuesday, September 8, 2020, Vol. 21, No. 180

                           Headlines



F I N L A N D

TEOLLISUUDEN VOIMA: S&P Places 'BB' Ratings on CreditWatch Negative


I R E L A N D

ABBEY INT'L: Moody's Withdraws Ba3 CFR for Business Reasons
ADIENT PLC: S&P Affirms B+ Issuer Credit Rating, Outlook Neg.
BAIN CAPITAL 2018-2: Moody's Confirms B2 Rating on Class F Notes
CARLYLE EURO 2017-2: Moody's Confirms B2 Rating on Class E Notes
OCP EURO 2019-3: Moody's Confirms B2 Rating on Class F Notes

TORO EUROPEAN 3: Fitch Cuts Class E Notes to BB-sf


L U X E M B O U R G

EP BCO: Moody's Affirms Ba3 CFR, Alters Outlook to Negative


M A C E D O N I A

NORTH MACEDONIA: S&P Affirms 'BB-/B' Sovereign Credit Ratings


M O N T E N E G R O

MONTENEGRO: S&P Affirms 'B+/B' Sovereign Credit Ratings


N E T H E R L A N D S

IGNITION TOPCO: S&P Cuts Rating to B- on Expected Weaker Earnings
TRIVIUM PACKAGING: S&P Downgrades LT ICR to 'B', Outlook Stable


R U S S I A

LEXGARANT INSURANCE: S&P Alters Outlook to Pos., Affirms B+ ICR
RUSSNEFT PJSC: Fitch Cuts LT IDR to C After Missing Payment


S W I T Z E R L A N D

GARRETT MOTION: S&P Downgrades ICR to 'B', On Watch Negative
SWISSPORT: Thousands More Job Losses Expected Due to Slump


T U R K E Y

TURK P VE I: Fitch Affirms 'BB-' IFS Rating, Alters Outlook to Neg.
[*] Fitch Alters Outlook on 6 Turkish LRGs to Negative


U K R A I N E

UKRAINE: Fitch Affirms 'B' LT IDR, Outlook Stable


U N I T E D   K I N G D O M

CABOT FINANCIAL: S&P Affirms BB- Issuer Rating, Outlook to Stable
CANTERBURY FINANCE NO. 3: S&P Puts BB+ (sf) Rating on F-Dfrd Notes
CANTERBURY FINANCE: Fitch Gives BBsf Rating to Class X Debt
LONDON CAPITAL: Administrators Sue Thirteen People Over Fraud
MABEL MEZZCO: Moody's Confirms B2 CFR, Outlook Negative

PIZZA EXPRESS: To Close 73 Restaurants Following CVA Approval
RHINO: Two Deloitte Partners Sued for Mishandling Administration
SAGA PLC: Moody's Affirms B1 CFR, Outlook Neg.
THG OPERATIONS: Fitch Places B+ LT IDR on Watch Positive
VIRGIN ATLANTIC: To Cut 1,150 More Jobs After Rescue Plan Okayed


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F I N L A N D
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TEOLLISUUDEN VOIMA: S&P Places 'BB' Ratings on CreditWatch Negative
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S&P Global Ratings placed on CreditWatch negative its 'BB' ratings
on Teollisuuden Voima Oyj (TVO) and its senior unsecured debt.

On Aug. 28, TVO announced further delays of the construction of its
third nuclear power plant, setting regular electricity production
to start in February 2022, instead of March 2021, and compared with
the previously planned December 2019. The project is over 12 years
behind the original plan. The recent postponement suggests that TVO
may not get compensation for overrun costs beyond June 2021, when
the current settlement agreement expires.

The CreditWatch reflects the increased likelihood of a downgrade,
by one or more notches, due to the significant uncertainty
regarding the outcome of the new agreement, which will likely be
announced in coming weeks, alongside the financing plan.

TVO may incur an increased debt burden because of its postponement
of fuel-loading and commercial start-up date at OL3.

This is because of the heightened risk for costs spilling over into
TVO, and considering that TVO may not automatically be compensated
beyond June 2021. S&P also see a risk that TVO might be forced to
partially cover the overrun costs.

This delay may not be the final postponement, given that the
supplier, the Areva-Siemens consortium (ASC), is already 12 years
behind schedule.  According to the Aug. 28, 2020, announcement, TVO
received updates to the re-baseline schedule of the commissioning
of the OL3 European Pressurized Reactor (EPR) plant unit from ASC.
Updates set fuel loading to commence in March 2021, and connection
to the grid later in October, while regular electricity production
will start in February 2022. This results in a delay of between
nine and 11 months from the previously updated schedule, published
December 2019. Although the new schedule specifies dates, Areva's
track record of delays creates uncertainty, in our view.

S&P said, "We believe there is also uncertainty around how TVO
would be compensated for the delay.  Terms stipulated in the
current underlying agreement, the so-called Global Settlement
Agreement (GSA) from 2018 with ASC, capture compensation and
penalties. We understand, however, that the GSA has no effect from
July 1, 2021. We believe that TVO will be compensated for accrued
capitalized interest costs from January 2020 until end-June 2021.
There is currently no agreement regulating any compensation
thereafter, as the compensation/penalty mechanism stipulated in the
2018 GSA covers all TVO's project costs from January 2020 to June
2021. We understand compensation from ASC could reach a maximum of
EUR400 million under the existing GSA contract if plant completion
is not achieved by June 2021. Negotiations for a new GSA are
ongoing, but we see an increased risk that talks could end less
favorably for TVO if the decision is that overrun costs will not be
fully compensated by ASC. If this were to occur, TVO's debt could
increase, setting back deleveraging.

"We expect TVO and ASC to announce a new agreement in the coming
weeks, which they would then sign before year-end.  The updated
terms would settle compensation, penalties, and obligations for the
remaining construction period and the two-year guarantee period. We
also expect Areva to present a plan to meet all its financial
obligations until the end of the guarantee period.

"We acknowledge that the companies in the ACS have joint and
several liability for the contractual obligations until the end of
the guarantee period of OL3, which we believe limits the risk.  
The ASC comprises AREVA GmbH (unrated), AREVA NP SAS (unrated), and
Siemens AG (A+/Negative/--). According to the 2018 GSA, the ASC is
committed to ensure the funding reserved to finalize OL3, as well
as all warranty periods (two years after provisional takeover). A
fund mechanism was established, financed by Areva Companies, to
cover Areva's costs of finalizing OL3. We believe that the joint
liability clause gives TVO solid grounds for negotiation, thereby
limiting the downside risk.

"In our view, there are questions around Areva's financing for the
remaining construction period and the two-year guarantee period.  
We believe Areva will likely depend on asset sales to honor its
financial obligations during this time. In our view, this could
lead to a disagreement with involved parties and result in new
legal procedures, further setbacks, and ultimately that TVO might
not be fully compensated for the delay." The plant contract
stipulates, however, that the ACS has joint and several liability
for the contractual obligations.

Areva's poor project management--alongside technical problems,
COVID-19 disruptions, and commissioning testing--has driven delays.
  This latest delay stems from slowly progressing system testing,
technical problems identified in tests, and the increase in the
amount of maintenance work caused by project delay. Also the lack
of necessary spare parts has taken time. This is despite TVO and
work related to nuclear power plants being excluded from official
COVID-19 restrictions. Longer-than-expected commissioning testing
also contributed to the delay, and that many tests must be repeated
due to the lulls. At this time, there are 30-40 tests outstanding
of about 3,000 needed for approval to start fuel loading. That
said, in our view, the setbacks are largely due to Areva's
inadequate project management. S&P understands that there are no
technical problems outstanding except for resolution of the cracks
in the pressurizer safety valves' spring-loaded pilot control
valves, which is pending the final decision of the Finnish Safety
Authority.

S&P continues to believe that TVO's shareholders are likely to
remain supportive, based on their long-term view, given the
lifetime of the asset exceeds 40 years.  Despite current prices
being unusually lower than historical levels, there is a
significant difference between Nord Pool System spot prices and
Nord Pool spot prices in Finland. Comparing daily spot prices
during 2020, the average price difference between Nord Pool System
spot prices and Finnish price have almost been EUR16/MWh higher in
Finland. S&P believes that this is because of the extreme hydro
conditions in Norway, significantly curbing prices, and at the same
time, material constraints in transmission capacity. TVO's combined
nuclear production costs are about EUR30 per MW hour (/MWh) when
OL3 becomes operational, increasing from approximately EUR20/MWh
currently, reflecting the start of the depreciation of OL3's
capitalized costs and interest. S&P therefore continues to believe
that the current low electricity prices do not affect shareholders
long-term view on TVO-produced electricity and the Mankala model.
However, were the power prices to be persistently under structural
pressure, shareholders support could dwindle. S&P understands that
owners value the stable prices. TVO sells all electricity generated
to its shareholders according to a cost-price principle in which
shareholders are charged incurred costs in proportion with their
ownership and receive electricity as compensation.

The existing shareholder loan facilities total EUR250 million, and
under current conditions, TVO has the option to draw on the
perpetual facilities until end-2020. S&P views the perpetual
shareholder loan facilities as a strong commitment from the
shareholders. Additionally, this provides TVO with a cushion toward
its covenant, equity ratio of minimum 25%, as shareholder loans are
not included in the calculation in accordance to IFRS, as
shareholder loans treated as equity.

The CreditWatch reflects the risk of higher debt, continued
uncertainty on the start of commercial production, and the pending
contractual terms, which emerged following the announced extension
of construction beyond the existing GSA contract that matures in
June 2021. S&P therefore sees a risk that the company might not be
sufficiently and timely compensated for the over-run costs by the
time the project is completed. Until the existing GSA contract
matures, TVO is entitled to full compensation, via penalties also
covering interest costs.

In addition, S&P sees uncertainty on Areva's ability to honor the
upcoming costs and contracted obligations for the trust mechanism,
which needs to cover all liquidity uses for the construction
period, as well as for the following two-year guarantee period.

S&P could therefore lower the rating if:

-- TVO and ASC do not agree on terms for a new GSA in the coming
weeks.

-- Any operational or regulatory issues arise, or any other reason
causing more delay and uncompensated overrun costs.

-- Areva fails to replenish the trust mechanism, present a
detailed financing plan to honor its obligation until the guarantee
period elapses after two years.

-- TVO's owners indicate a change in support, for example, if
shareholder loan facilities are not extended, or if S&P was to
understand that the one or several owners were to exit the
ownership or Mankala model.

S&P could consider a downgrade in the near term, potentially by
more than one notch.

If ASC and TVO reach an agreement that mainly covers TVO overrun
costs, and clearly stipulates that ASC has sufficient funds to meet
its obligations, S&P is likely to affirm the 'BB' rating.
Alternatively, an affirmation could arise from any increased
overrun costs being met by shareholder injections.

S&P aims to resolve the CreditWatch within the next three months,
depending on if ASC and TVO reach a new agreement, filling in for
the current settlement agreement once it expires in June 2021, and
if construction progresses without any additional operational or
regulatory delays.




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ABBEY INT'L: Moody's Withdraws Ba3 CFR for Business Reasons
-----------------------------------------------------------
Moody's Investors Service withdrawn Abbey International Finance
Limited's Ba3 long-term corporate family rating and its B1
long-term local currency and foreign currency issuer ratings. Prior
to the withdrawal the issuer outlook was stable.

RATINGS RATIONALE

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

LIST OF AFFECTED RATINGS

Issuer: Abbey International Finance Limited

Withdrawals:

Long-term Issuer Ratings, Withdrawn, previously rated B1

Long-term Corporate Family Rating, Withdrawn, previously rated Ba3

Outlook Actions:

Outlook, Changed to Rating Withdrawn from Stable

ADIENT PLC: S&P Affirms B+ Issuer Credit Rating, Outlook Neg.
-------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' issuer credit rating on Adient
Inc. and its issue-level ratings the company's debt and removing
them from CreditWatch, where we placed them with negative
implications on March 26, 2020.

Adient experienced a substantial year-over-year falloff in its
fiscal third quarter revenue because of plant shutdowns due to the
COVID-19 pandemic.  As pandemic-related governmental restrictions
were lifted, auto plants have reopened. The company's total revenue
in the third quarter fell 61% year over year. While there were
essentially no sales in April, demand rose in May and June. By the
end of the quarter, sales for Europe, Middle East, and Africa
(EMEA) and the Americas were about three-quarters of pre-COVID 19
levels while its China operations returned to pre-COVID levels.
Customer releases for trucks and SUVs are running extremely strong.
In some instances, production for certain platforms have returned
to pre-COVID levels.

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

-- Health and safety

S&P said, "The negative outlook reflects our view that there is at
least a one-third chance we could lower our rating on Adient over
the next 12 months. This could happen if the fallout from the
pandemic had a prolonged negative effect on demand and operational
performance.

"We could lower our rating on Adient if, for example, the company's
liquidity were to worsen due to the adverse effect of ongoing
negative free operating cash flow. This could occur, for instance,
if COVID-19 restrictions were re-established, consumer confidence
declined significantly, or EBITDA margins were not recovering due
to operational missteps or a lack of commercial discipline.

"We could revise the outlook to stable if the company could realize
steady operational improvement or increase its EBITDA margins,
reflecting a stronger competitive position and consistent program
launch execution. At the same time, we would expect the company to
be able to generate positive free operating cash flow in 2021."


BAIN CAPITAL 2018-2: Moody's Confirms B2 Rating on Class F Notes
----------------------------------------------------------------
Moody's Investors Service ("Moody's") has confirmed the ratings on
the following notes issued by Bain Capital Euro CLO 2018-2
Designated Activity Company:

EUR18,900,000 Class D Senior Secured Deferrable Floating Rate Notes
due 2032, Confirmed at Baa2 (sf); previously on Jun 3, 2020 Baa2
(sf) Placed Under Review for Possible Downgrade

EUR22,900,000 Class E Senior Secured Deferrable Floating Rate Notes
due 2032, Confirmed at Ba2 (sf); previously on Jun 3, 2020 Ba2 (sf)
Placed Under Review for Possible Downgrade

EUR11,600,000 Class F Senior Secured Deferrable Floating Rate Notes
due 2032, 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:

EUR232,500,000 Class A Senior Secured Floating Rate Notes due 2032,
Affirmed Aaa (sf); previously on Nov 15, 2018 Definitive Rating
Assigned Aaa (sf)

EUR13,800,000 Class B-1 Senior Secured Floating Rate Notes due
2032, Affirmed Aa2 (sf); previously on Nov 15, 2018 Definitive
Rating Assigned Aa2 (sf)

EUR20,000,000 Class B-2 Senior Secured Fixed Rate Notes due 2032,
Affirmed Aa2 (sf); previously on Nov 15, 2018 Definitive Rating
Assigned Aa2 (sf)

EUR29,100,000 Class C Senior Secured Deferrable Floating Rate Notes
due 2032, Affirmed A2 (sf); previously on Nov 15, 2018 Definitive
Rating Assigned A2 (sf)

Bain Capital Euro CLO 2018-2 Designated Activity Company, issued in
November 2018, is a collateralised loan obligation (CLO) backed by
a portfolio of predominantly European senior secured loan and
senior secured bonds. The portfolio is managed by Bain Capital
Credit U.S. CLO Manager, LLC. The transaction's reinvestment period
will end in January 2023.

RATINGS RATIONALE

The action concludes the rating review on the Class D, E and F
notes announced on June 03, 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, "Moody's places
ratings on 234 securities from 77 EMEA CLOs on review for possible
downgrade".

Since the coronavirus outbreak widened in March, the decline in
corporate credit has resulted in a significant number of
downgrades, other negative rating actions, or defaults on the
assets collateralising the CLO.

The deterioration in credit quality of the portfolio is reflected
in an increase in Weighted Average Rating Factor (WARF) and in the
proportion of securities from issuers with ratings of Caa1 or
lower. According to the trustee reports dated August 2020 [1], the
WARF was 3369 compared to a value of 2885 as of February 2020 [2],
which is over the covenant level of 2996. Securities with ratings
of Caa1 or lower currently make up approximately 9.1% of the
underlying portfolio according to Trustee calculations [1], whereas
Moody's calculates that securities with default probability ratings
of Caa1 or lower currently make up approximately 20.4% of the
underlying portfolio. In addition, the over-collateralisation (OC)
levels have weakened across the capital structure. According to the
trustee report of August 2020 [1] the Class A/B, Class C, Class D,
Class E and Class F OC ratios are reported at 138.9%, 125.2%,
117.7%, 109.7% and 106.0% compared to February 2020 [2] levels of
141.1%, 127.2%, 119.5%, 111.4% and 107.7% respectively. Moody's
notes that 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), Weighted Average Spread (WAS) and Weighted Average Life
(WAL).

Moody's analysed the CLO's latest portfolio and took into account
the recent trading activities as well as the full set of structural
features of the transaction and concluded that the current ratings
on the Class A, B-1, B-2, C, D, E and F notes continue to reflect
the expected losses of the notes.

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 corporate assets from the collapse
in global 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.

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 371.3 million,
a weighted average default probability of 28.8% (consistent with a
WARF of 3416 over a weighted average life of 6.1 years), a weighted
average recovery rate upon default of 44.8% for a Aaa liability
target rating, a diversity score of 60 and a weighted average
spread of 3.7%.

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.

In consideration of the current high uncertainties around the
global economy and the ultimate performance of the CLO portfolio,
Moody's conducted a number of additional sensitivity analyses
representing a range of outcomes that could diverge, both to the
downside and the upside, from its base case. Some of the additional
scenarios that Moody's considered in its analysis of the
transaction include, among others: additional near-term defaults of
companies facing liquidity pressure, and some improvement in WARF
as the global economy gradually recovers in the second half of the
year and future corporate credit conditions generally stabilize.

CARLYLE EURO 2017-2: Moody's Confirms B2 Rating on Class E Notes
----------------------------------------------------------------
Moody's Investors Service confirmed the ratings on the following
notes issued by Carlyle Euro CLO 2017-2 DAC:

EUR21,000,000 Class C 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

EUR27,000,000 Class D 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

EUR13,000,000 Class E 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:

EUR266,000,000 Class A-1 Senior Secured Floating Rate Notes due
2030, Affirmed Aaa (sf); previously on Aug 3, 2017 Definitive
Rating Assigned Aaa (sf)

EUR40,000,000 Class A-2-A Senior Secured Floating Rate Notes due
2030, Affirmed Aa2 (sf); previously on Aug 3, 2017 Definitive
Rating Assigned Aa2 (sf)

EUR20,000,000 Class A-2-B Senior Secured Floating Rate Notes due
2030, Affirmed Aa2 (sf); previously on Aug 3, 2017 Assigned Aa2
(sf)

EUR31,000,000 Class B Senior Secured Deferrable Floating Rate Notes
due 2030, Affirmed A2 (sf); previously on Aug 3, 2017 Definitive
Rating Assigned A2 (sf)

Carlyle Euro CLO 2017-2 DAC, issued in August 2017, is a
collateralised loan obligation (CLO) backed by a portfolio of
mostly high-yield senior secured European loans. The portfolio is
managed by CELF Advisors LLP. The transaction's reinvestment period
will end in August 2021.

The action concludes the rating review on the Classes C, D and E
notes initiated on June 03, 2020.

RATINGS RATIONALE

The rating confirmations on Classes C, D and E and rating
affirmations on Classes A-1, A-2-A, A-2-B, and B notes are
primarily a result of the expected losses of the notes remaining
consistent with their current ratings despite the risks posed by
credit deterioration and loss of collateral coverage observed in
the underlying CLO portfolio, which have been primarily prompted by
economic shocks stemming from the coronavirus outbreak.

Since the coronavirus outbreak widened in March, the decline in
corporate credit has resulted in a significant number of
downgrades, other negative rating actions, or defaults on the
assets collateralising the CLO.

The deterioration in credit quality of the portfolio is reflected
in an increase in Weighted Average Rating Factor (WARF) and of the
proportion of securities from issuers with ratings of Caa1 or
lower. According to the trustee report dated August 2020, the WARF
was 3427 [1], compared to 2973 [2] in February 2020. Securities
with ratings of Caa1 or lower currently make up approximately 6.3%
[1] of the underlying portfolio, compared to 2.0% [2] in February
2020. In addition, the over-collateralisation (OC) levels have
weakened across the capital structure. According to the trustee
report of August 2020 the Class A, Class B, Class C, Class D and
Class E OC ratios are reported at 133.7% [1], 122.1% [1], 115.3%
[1], 107.6% [1] and 104.3% [1] compared to February 2020 levels of
137.3% [2], 125.4% [2], 118.4% [2], 110.5% [2] and 107.1% [2]
respectively. Moody's notes that 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), Weighted Average Spread (WAS) and
Weighted Average Life (WAL).

Moody's analysed the CLO's latest portfolio and took into account
the recent trading activities as well as the full set of structural
features of the transaction and concluded that the current ratings
on the Class A-1, A-2-A, A-2-B, B, C, D and E notes continue to
reflect the expected losses of the notes.

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 437.0 million,
defaulted par of EUR 8.1 million, a weighted average default
probability of 26.5% (consistent with a WARF of 3526 over a
weighted average life of 4.7 years), a weighted average recovery
rate upon default of 45.24% for a Aaa liability target rating, a
diversity score of 56 and a weighted average spread of 3.81%.

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.

In consideration of the current high uncertainties around the
global economy and the ultimate performance of the CLO portfolio,
Moody's conducted a number of additional sensitivity analyses
representing a range of outcomes that could diverge, both to the
downside and the upside, from its base case. Some of the additional
scenarios that Moody's considered in its analysis of the
transaction include, among others: additional near-term defaults of
companies facing liquidity pressure; additional OC par haircuts to
account for potential future downgrades and defaults resulting in
an increased likelihood of cash flow diversion to senior notes; and
some improvement in WARF as the global economy gradually recovers
in the second half of the year and future corporate credit
conditions generally stabilize.

The coronavirus outbreak, the government measures put in place to
contain it, and the weak global economic outlook continue to
disrupt economies and credit markets across sectors and regions.
Its analysis has considered the effect on the performance of
corporate assets from the current weak global economic activity and
a gradual recovery for the coming months. Although an economic
recovery is underway, it is tenuous and its continuation will be
closely tied to containment of the virus. 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.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
August 2020.

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.

OCP EURO 2019-3: Moody's Confirms B2 Rating on Class F Notes
------------------------------------------------------------
Moody's Investors Service confirmed the ratings on the following
notes issued by OCP Euro CLO 2019-3 Designated Activity Company:

EUR24,400,000 Class D Senior Secured Deferrable Floating Rate Notes
due 2030, Confirmed at Baa3 (sf); previously on Jun 3, 2020 Baa3
(sf) Placed Under Review for Possible Downgrade

EUR23,600,000 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

EUR10,100,000 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:

EUR255,000,000 Class A Senior Secured Floating Rate Notes due 2030,
Affirmed Aaa (sf); previously on May 17, 2019 Definitive Rating
Assigned Aaa (sf)

EUR39,900,000 Class B-1 Senior Secured Floating Rate Notes due
2030, Affirmed Aa2 (sf); previously on May 17, 2019 Definitive
Rating Assigned Aa2 (sf)

EUR15,000,000 Class B-2 Senior Secured Fixed Rate Notes due 2030,
Affirmed Aa2 (sf); previously on May 17, 2019 Definitive Rating
Assigned Aa2 (sf)

EUR25,500,000 Class C Senior Secured Deferrable Floating Rate Notes
due 2030, Affirmed A2 (sf); previously on May 17, 2019 Definitive
Rating Assigned A2 (sf)

OCP Euro CLO 2019-3 Designated Activity Company, issued in May
2019, is a collateralised loan obligation (CLO) backed by a
portfolio of mostly high-yield senior secured European loans. The
portfolio is managed by Onex Credit Partners, LLC. The
transaction's reinvestment period will end in April 2021.

The action concludes the rating review on Classes D, E and F notes
initiated on June 03, 2020 (Moody's places ratings on 234
securities from 77 EMEA CLOs on review for possible downgrade.

RATINGS RATIONALE

Since the coronavirus outbreak widened in March, the decline in
corporate credit has resulted in a significant number of
downgrades, other negative rating actions, or defaults on the
assets collateralising the CLO. The actions reflect the expected
losses of the notes continue to remain consistent with their
current ratings despite the risks posed by credit deterioration and
loss of collateral coverage observed in the underlying CLO
portfolio, which have been primarily prompted by economic shocks
stemming from the coronavirus outbreak. Moody's has taken into
account the CLO's latest portfolio as well as the full set of
structural features of the transaction.

The deterioration in credit quality of the portfolio is reflected
in an increase in Weighted Average Rating Factor (WARF). According
to the trustee report dated August 2020 [1], the WARF was 3104,
compared to value of 2875 in January 2020 [2]. In addition, the
over-collateralisation (OC) levels have weakened across the capital
structure. According to the trustee report of August 2020 [1] the
Class A/B, Class C, Class D, Class E and Class F OC ratios are
reported at 136.8%, 126.4%, 117.8%, 110.5% and 107.7% compared to
January 2020 [2] levels of 137.2%, 126.8%, 118.2%, 110.9% and
108.0% 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 423.8 million
after considering a negative cash exposure of around EUR 5.4
million, a weighted average default probability of 23.8%
(consistent with a WARF of 3094 over a weighted average life of
4.98 years), a weighted average recovery rate upon default of 46.0%
for a Aaa liability target rating, a diversity score of 49 and a
weighted average spread of 3.46%.

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.

In consideration of the current high uncertainties around the
global economy and the ultimate performance of the CLO portfolio,
Moody's conducted a number of additional sensitivity analyses
representing a range of outcomes that could diverge, both to the
downside and the upside, from its base case. Some of the additional
scenarios that Moody's considered in its analysis of the
transaction include, among others: additional near-term defaults of
companies facing liquidity pressure; additional OC par haircuts to
account for potential future downgrades and defaults resulting in
an increased likelihood of cash flow diversion to senior notes; and
some improvement in WARF as the global economy gradually recovers
in the second half of the year and future corporate credit
conditions generally stabilize.

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 corporate assets from the collapse
in global 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.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
August 2020.

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.

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.

TORO EUROPEAN 3: Fitch Cuts Class E Notes to BB-sf
--------------------------------------------------
Fitch has downgraded Toro European CLO 3 DAC's class E notes to
'BB-sf' from 'BBsf' and placed them on Negative Outlook, and
revised the class D notes' Outlook to Negative from Stable, while
all the other classes of notes have been affirmed.

RATING ACTIONS

Toro European CLO 3 DAC

Class A-R XS2066751871; LT AAAsf Affirmed; previously AAAsf

Class B-1-R XS2066752416; LT AAsf Affirmed; previously AAsf

Class B-2 XS1573949911; LT AAsf Affirmed; previously AAsf

Class B-3-R XS2066753737; LT AAsf Affirmed; previously AAsf

Class C-1 XS1573951818; LT Asf Affirmed; previously Asf

Class C-2 XS1575705287; LT Asf Affirmed; previously Asf

Class D XS1573953194; LT BBBsf Affirmed; previously BBBsf

Class E XS1573954085; LT BB-sf Downgrade; previously BBsf

Class F XS1573958235; LT B-sf Affirmed; previously B-sf

TRANSACTION SUMMARY

The transaction is in its reinvestment period and the portfolio is
actively managed by Chenavari Credit Partners LLP.

KEY RATING DRIVERS

Portfolio Performance Deterioration

The downgrade for class E and revision of the Outlook to Negative
from Stable for class D reflect the deterioration of portfolio
performance due to negative migration of the underlying assets in
light of the coronavirus pandemic. The manager has sold several
distressed assets at a discount, which resulted in some par loss in
recent months. The transaction is consequently now 1.5% below
target par after taking into account reported defaults at their
Fitch recovery value.

The Fitch weighted average rating factor (WARF) test was reported
at 35.87 in the transaction's August 17, 2020 trustee report
against a maximum of 34.0. Fitch's updated calculation as of August
29, 2020 shows an increase to 36.0. The Fitch weighted average
recovery rate test was reported as failing. The manager would not
be able to move to another matrix point given limited cushion under
the weighted average spread test and the failure of the Fitch
weighted average recovery rate test.

The 'CCC' category or below assets represented 8.9% of the
portfolio as of August 29, 2020, compared with its 7.5% limit.
Assets with a Fitch-derived rating on Negative Outlook represent
29.7% of the portfolio balance. Defaulted assets represented EUR6.3
million or 1.8% of target par. All other tests, including the
overcollateralisation and interest coverage tests, were reported as
passing.

Coronavirus Baseline Scenario Impact

Fitch carried out a sensitivity analysis on the target portfolio
for its coronavirus baseline scenario. The agency notched down the
ratings for all assets with corporate issuers on Negative Outlook
regardless of sector. They represent 29.7% of the portfolio
balance. This scenario shows sizeable shortfalls for the class
B-1/B-2/B-3, D, E and F notes.

For class B-1/B-2/B-3, the committee agreed to maintain a Stable
Outlook as the shortfall is mostly driven by missed interest
payments, which the manager could address by using unscheduled
principal proceeds or sale proceeds. The Outlook on the class D
notes was revised to Negative, while the Negative Outlook one the
class E and F notes was maintained to reflect the risk of credit
deterioration over the longer term due to the economic fallout from
the pandemic.

'B/B-'Category Portfolio Credit Quality

Fitch assesses the average credit quality of obligors to be in the
'B'/'B-' category. The Fitch WARF calculated by Fitch as of August
29, 2020 of the current portfolio is 36.0. Under the coronavirus
baseline scenario, the Fitch WARF would increase to 40.1.

High Recovery Expectations

Of the portfolio, 92.8% comprises senior secured obligations. Fitch
views the recovery prospects for these assets as more favourable
than for second-lien, unsecured and mezzanine assets. The Fitch
recovery rate is 62.2%.

Portfolio Composition

The portfolios are well diversified across obligors, countries and
industries. The top 10 obligors' concentration is 15% and no
obligor represents more than 2.0% of the portfolio balance.

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. The
transaction was modelled using the current portfolio based on both
the stable and rising interest-rate scenarios and the front-, mid-,
and back-loaded default timing scenarios, as outlined in Fitch's
criteria.

Fitch also tested the current portfolio with a coronavirus
sensitivity analysis to estimate the resilience of the notes'
ratings. The coronavirus sensitivity analysis was only based on the
stable interest-rate scenario including all default timing
scenarios.

Deviation from Model-Implied Ratings

The model-implied rating for the class F notes is 'CCCsf', below
the current rating of 'B-sf'. Fitch decided to deviate from the
model-implied rating because the model-implied rating is only
driven by the back-loaded default timing and rising interest rate
scenario, which is unlikely in Fitch's view given the current
economic environment associated with the pandemic. In addition,
Fitch considers a 'B-sf' rating more appropriate, which, based on
its rating definitions, indicates a material risk of default but
with a limited margin of safety, whereas 'CCCsf' indicates that
default is a real possibility.

RATING SENSITIVITIES

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

At closing, Fitch used a standardised stress portfolio (Fitch's
Stressed Portfolio) that was customised to the portfolio limits as
specified in the transaction documents. Even if the actual
portfolio shows lower defaults and smaller 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.

Upgrades may occur after the end of the reinvestment period on
better-than-expected portfolio credit quality and deal performance,
leading to higher credit enhancement and excess spread available to
cover for losses in the remaining portfolio.

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

Downgrades may occur if the build-up of credit enhancement
following amortisation does not compensate for a larger loss
expectation than initially assumed due to unexpected high levels of
defaults and portfolio deterioration. As the disruptions to supply
and demand due to the effects of the pandemic become apparent for
other sectors, loan ratings in those sectors would also come under
pressure. Fitch will update the sensitivity scenarios in line with
the view of its Leveraged Finance team.

Coronavirus Downside Sensitivity

Fitch has added a sensitivity analysis that contemplates a more
severe and prolonged economic stress caused by a re-emergence of
infections in the major economies, before halting recovery begins
in 2Q21. The downside sensitivity incorporates a single-notch
downgrade to all FDRs in the 'B' rating category and a 0.85
recovery rate multiplier to all other assets in the portfolio. For
typical European CLOs this scenario results in a category rating
change for all ratings.

DATA ADEQUACY

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

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

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

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



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

EP BCO: Moody's Affirms Ba3 CFR, Alters Outlook to Negative
-----------------------------------------------------------
Moody's Investors Service changed the outlook on EP BCo SA's Ba3
corporate family rating (CFR), Ba2 senior secured first lien term
loan rating and B2 senior secured second lien term loan rating to
negative from stable. Moody's also affirmed Euroports' ratings.

RATINGS RATIONALE

The rating action reflects Moody's expectations that more adverse
trading conditions caused by the coronavirus outbreak and execution
risk around the realization of revenue and costs synergies will
constrain Euroports' ability to materially improve its operating
performance and strengthen its financial profile to levels
commensurate with a Ba3 rating over the next 12 to 18 months.

During 2019, the company's operating performance came out slightly
below management expectations although above the previous year,
with a reported EBITDA (adjusted for non-operating items -as
reported by the company) reaching €67 million compared with €60
million in 2018.The performance was however mainly driven by cost
saving initiatives such as the centralization of its headquarter in
Belgium, while at the same time volumes and revenues faced
headwinds due to softer demand in particular for paper and sugar at
terminals in Finland and Belgium.

Those trends continued during H1 2020 as Euroports reported
revenues and EBITDA 8% and 15% below budget at €298 million and
€31 million respectively, although broadly stable compared to H1
2019. The relative resilience of Euroports' operating performance
so far, amid turbulences in global trade-flows caused by the
Covid-19 pandemic, speaks to the company's revenue diversification,
the nature of its contractual agreements - in particular take or
pay contracts -- and continuing efforts to reduce costs.

The company recently announced new organizational and procurement
measures aimed to bring an additional €10 million in annualized
cost savings to the existing €16 million already identified by
the management since the June 2019 acquisition. Those savings are
substantial but also face execution risk.

Moody's also expects the adverse trade environment will continue to
pose a challenge to the company's growth strategy. Euroports built
its strategy on capturing new business opportunities as well as
extracting revenue synergies involving other businesses owned by
the new shareholder Monaco Group Resource, a global trading company
specialized in metals and minerals products. While management
remains focused on achieving those synergies, Moody's sees higher
execution risk building up on the back of the subdued global
macroeconomic outlook and weaknesses currently impacting most of
Euroports markets.

In this context Moody's considers there is a higher likelihood that
the company will fail to deliver significant improvements to its
Funds from Operations (FFO) generation such that the FFO/Debt
credit metric moves above 10% in the foreseeable future, up from
around 8% reported in 2019 on a proforma basis for the June 2019
transaction.

Euroports' current Ba3 CFR continues to positively reflect (i) the
strategic location of Euroports' key terminals which are close to
key trade routes and clients, and well connected with their
respective hinterland, (ii) a high degree of geographic and
industry diversification, through strong terminal presence in
Northern and Southern Europe and in China, (iii) long standing
relationships with a well-diversified group of large industrial
customers and contractual take or pay or volume requirement
features which somewhat offset the volatility of underlying
commodities handled, and (iv) the growth potential derived from
revenue synergies involving the activities of the new majority
shareholder Monaco Resources Group, although they might be delayed
due to the Covid-19 pandemic.

At the same time Euroports' Ba3 CFR is constrained by : (i) the
concentration of Euroports' operating cash flows on the paper and
sugar industries which together represent more than 40% of the
company's reported EBITDA, and exposure to economic cycles,
negative sector trends or adverse weather conditions,
notwithstanding contractual arrangements with key customers, (ii)
high financial leverage evidenced by a Moody's adjusted FFO to Debt
ratio of 8% for 2019 pro forma for the June 2019 transaction; (iii)
a de-leveraging path which will essentially rely on EBITDA growth
in the absence of debt amortizing, and (iv) relatively weak
historical operating performance in the 5 years up to 2018.

Moody's considers Euroports' liquidity profile as adequate. As of
December 31, 2019, Euroports had €50 million in available cash.
The company does not face any material debt maturity until 2026
when the €305 million senior secured first lien term loan is due.
Given Euroports' relatively low maintenance capital expenditure
requirements Moody's anticipates that the company will generate a
broadly neutral to positive free cash flow in the next 12 to 18
months. The company has drawn €18 million under its €45 million
RCF and access to the remaining €27 million is subject to a
springing leverage-based financial covenant with a testing Net
Debt/EBITDA ratio quickly ratcheting down from 7.30x in June 2020
to 5.40x and 4.50x in June 2021 and June 2022 respectively.

For fiscal year 2019 consolidated financial statements reported at
the level of Euroports' parent company EP PaCo S.A were not
prepared fully in accordance with International Financial Reporting
Standards (IFRS), in particular because they excluded the impact of
IFRS16. While the exclusion was in compliance with lenders
requirements and mandatory reporting obligations it has made recent
historical financial analysis more challenging and is considered by
Moody's as a governance factor. However, Moody's expects that in
the future Euroports' reporting will come fully in line with IFRS
standards.

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

Given the negative outlook a rating upgrade is unlikely in the near
term. The outlook could move to stable should Euroports demonstrate
a material and consistent growth in EBITDA or reduction in debt,
such that FFO to Debt reaches and remains at least at 10% on a
sustainable basis.

Conversely, a downgrade of the assigned ratings could result from
the absence of material improvements in Euroports' operating
performance such that FFO to Debt is likely to remain sustainably
below 10%. A more aggressive stance than expected on financial
policy or a marked deterioration in Euroports liquidity profile
could also exert negative pressure on the ratings.

LIST OF AFFECTED RATINGS

Affirmations:

Issuer: EP BCo SA

Probability of Default Rating, Affirmed Ba3-PD

LT Corporate Family Rating, Affirmed Ba3

Senior Secured First Lien Bank Credit Facility, Affirmed Ba2

Senior Secured Second Lien Bank Credit Facility, Affirmed B2

Outlook Actions:

Issuer: EP BCo SA

Outlook, Changed to Negative from Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Privately
Managed Port Companies published in September 2016.

COMPANY PROFILE

EP BCo SA is the direct shareholder of Euroports Holdings S.a.r.l,
an international port operator whose operations consist of
large-scale ports which are situated in fifteen main terminal areas
in Northern and Southern Europe as well as in China. Through its
terminals the company handles, stores and transports primarily bulk
and breakbulk products for a diverse customer base across seven end
markets: Paper, Sugar, Metals & Steel, Fertilizer & Minerals,
Agribulk, Coal and Fresh and Frozen products. In 2019 EP PaCo SA
the direct shareholder of EP BCo SA reported €66.6 million in
EBITDA (adjusted for non-operating items as reported by the
company) on a pro forma basis.



=================
M A C E D O N I A
=================

NORTH MACEDONIA: S&P Affirms 'BB-/B' Sovereign Credit Ratings
-------------------------------------------------------------
On Sept. 4, 2020, S&P Global Ratings affirmed its 'BB-/B' long- and
short-term foreign and local currency sovereign credit ratings on
the Republic of North Macedonia. The outlook is stable.

Outlook

The stable outlook balances the disruptive effects of the COVID-19
pandemic on North Macedonia's economy and fiscal and external
metrics over the next year, against potential upside from
strengthening institutional arrangements and structural reform
implementation as part of EU accession negotiations, as well as
stronger growth beyond 2020.

Downside scenario

S&P could lower the ratings on North Macedonia if the ultimate
economic and budgetary costs of the pandemic are materially higher
than it currently projects, and erode the available fiscal space,
given the constraints of the exchange-rate regime. Downside
pressure could also build if, rather than stabilizing, net general
government debt continues to grow as a proportion of GDP over the
medium term. The ratings could also come under pressure if domestic
financial-system stability weakens substantially in a hypothetical
scenario of sustained deterioration in asset quality or persistent
deposit conversion to foreign currency.

Upside scenario

S&P could raise its ratings on North Macedonia if timely reform
implementation, for instance as part of EU accession negotiations,
strengthened its institutional arrangements and improved its
economic prospects.

Rationale

S&P said, "The affirmation reflects our view that, despite the
sharp economic contraction in 2020 and related deterioration in
fiscal and external metrics, North Macedonia will weather this
period of heightened uncertainty and will still have some fiscal
policy space to maneuver afterward. Favorable longer-term growth
potential, our expectation that debt will increase but then
stabilize at moderate levels, and access to funding through
official and market sources are factors that support the ratings.
Our ratings on North Macedonia are constrained by our view of its
relatively low income levels; shortcomings in its institutional
settings despite recent improvements; and limited monetary policy
flexibility arising from the fixed exchange-rate regime.

"We expect that the global pandemic will impair North Macedonia's
economic performance. Specifically, we project output will contract
by 6% in real terms in 2020, with all key components exhibiting a
weak dynamic including exports, investments, and domestic
consumption." Notwithstanding our base-case projection that real
economic growth will be around 3.5% in 2021, recovery prospects
remain uncertain.

Institutional and economic profile: Record output drop in 2020
because of the pandemic

-- S&P forecasts that North Macedonia's economy will contract by
6.0% in 2020, followed by a partial recovery of around 3.5% in
2021.

-- S&P's economic forecasts are uncertain due to the still-high
prevalence of the virus in the country and downside risks to North
Macedonia's key trade partners' performance.

-- S&P expects that the SDSM-centered government formed after the
July 2020 general election will maintain the policy direction of
recent years.

COVID-19 is having a significant adverse effect on North Macedonia,
both directly (through the impact of restrictions implemented
earlier and the remaining social distancing measures) and
indirectly (via the foreign trade channel). S&P said, "We expect
world GDP will contract by 3.8% this year. Moreover, we now project
a 7.8% recession in 2020 in the eurozone, where most of North
Macedonia's trade partners are located."

Although global tourism is being heavily affected, its significance
for North Macedonia is relatively limited given that tourism
receipts directly account for only about 5% of total nominal
exports in U.S. dollar terms. More significantly, North Macedonia
belongs to global supply chains, particularly in the auto sector,
in which activity has been subdued. Germany alone is a destination
for almost 50% of North Macedonia's exports. Of total exports to
Germany, around 80% pertains to various auto components. S&P
forecasts the German economy will contract by 6.2% this year.

North Macedonia has also historically relied on worker
remittances--these comprise the bulk of the secondary income
surplus, which averaged close to 17% of GDP over the last five
years. The workers are mostly in Europe and we expect transfers to
fall sharply, by 25% in 2020, as economic conditions in host
countries worsen. Consequently, this will put further downward
pressure on domestic demand.

S&P said, "Aside from its impact via trade partners, we consider
that coronavirus presents direct risks for the domestic economy,
making macroeconomic outcomes difficult to forecast. Following a
relatively mild first wave during March-May, new cases have
increased rapidly since the beginning of June as earlier
restrictions and social distancing measures have been gradually
eased. New cases peaked at the end of July and have since started
to moderate, but numbers still remain elevated and much higher than
during spring. In our view, this presents risks, particularly if
another resurgence of the coronavirus prompts the authorities to
re-introduce some of the restrictions lifted earlier.

"We have slightly lowered our economic forecasts since our last
publication in May and now expect the North Macedonian economy to
contract by 6.0% in 2020 (5.0% previously) followed by a 3.5%
recovery in 2021 (3.8% previously). We think that it will take
North Macedonia until 2022 to restore its 2019 real output value.
Our forecast revision is largely driven by high frequency economic
data, which suggests that--despite improvements in recent
months--many indicators remain in negative territory in
year-on-year terms. In June, for example, industrial production was
still 15% lower year-on-year, while turnover in wholesale and
retail trade was 25% lower. In terms of expenditure, we expect this
year's contraction to be broad-based with exports, investments, and
domestic consumption all falling notably."

North Macedonia held a general election on July 15 and the new
government was approved in a parliamentary vote at the end of
August. The election was originally scheduled for April but was
postponed because of the pandemic. The two main parties--the Social
Democratic Union (SDSM) and the opposition VMRO-DPMNE--gained a
similar vote share with SDSM getting ahead only slightly and
gaining 46 seats as opposed to VMRO's 44. Similar close outcomes
have occurred on multiple previous occasions and often precipitated
a political crisis and a parliamentary gridlock with neither side
being able to easily secure a working majority.

S&P sid, "In our view, prompt government formation should enable a
better focus on managing the fallout from this year's large
economic recession, taking into account that North Macedonia has
effectively been led by a caretaker administration until now. The
two parties comprising the new coalition--SDSM and the ethnic
Albanian Democratic Union for Integration (DUI)--had previously
been in government since May 2017 and, as such, we expect policy
priorities to remain broadly unchanged. Beyond managing the fallout
from the pandemic in 2020, we think the government will focus on
closer integration with the EU, including making progress on
membership negotiations, as well as measures to attract foreign
direct investment and diversify the economy. Overall, we observe
notable improvements in political stability in recent years, with
an orderly precedent of power transfer in 2017 and smooth conduct
of elections in 2020."

In March the country finally got the green light to formally start
EU accession talks, following the resolution of its long-running
name dispute with Greece in 2019. S&P believes that negotiations
could bring upside potential in terms of structural reform
implementation. Nevertheless, this would likely be a gradual
process and it does not expect North Macedonia to become a member
of the EU this decade.

Flexibility and performance profile: Fiscal and balance-of-payments
performances will deteriorate, but policy headroom remains

-- S&P forecasts that the budgetary performance will deteriorate
with net general government debt rising to 51% of GDP in 2020 from
41% in 2019.

-- Balance-of-payments performance will also weaken on a decline
in exports and remittances but the central bank's foreign exchange
(FX) reserves in 2020 are supported by foreign commercial and
multilateral borrowing.

-- S&P expects the peg of the Macedonian denar to the euro to
remain intact.

The government and the National Bank have to date announced several
fiscal and monetary measures to offset the effects of the pandemic
on the domestic economy. These include:

-- Support measures to affected sectors, including transport,
hotels, and restaurants, as well as a subsidy on social security
contributions to maintain employment;

-- Direct support to protect jobs in companies where revenue
dropped by over 30% as a result of the pandemic and measures to
protect the vulnerable in the informal economy; and

-- Several monetary and credit measures, including a reduction in
the key central bank interest rate, widening eligible collateral
for monetary operations purposes, reducing the offered amount of
central bank bills and thus providing extra liquidity, as well as
some forbearance measures and targeted debt payment holidays.

S&P said, "We forecast that, as a result of these initiatives and
the projected decline in economic activity, the general government
deficit will widen to 7.0% of GDP this year from 2.1% last year. We
have not changed this forecast since our previous publication in
May because the high frequency data is largely in line with what we
previously expected: the half-year general government deficit was
3.8% of GDP. Beyond 2020, we have revised our fiscal projections
slightly downward reflecting the elevated uncertainty with respect
to economic growth and the ability of the new government to quickly
consolidate public finances, particularly given its slim majority
in Parliament."

To fund the deficit, the authorities have agreed credit lines from
several international financial institutions. A Rapid Financing
Instrument credit line of EUR176 million from the IMF has been
disbursed, while negotiations have concluded on a EUR160 million
facility from the EU, which will be disbursed in two tranches in
the coming months. Positively, North Macedonia also issued a EUR700
million Eurobond in June. Despite the volatile sentiment and fund
flows toward emerging markets this year, the instrument was 5x
oversubscribed. We estimate that the aforementioned borrowing will
cover North Macedonia's budget deficit and debt repayments for the
rest of this year, while also leaving the country with a 6% of GDP
cash buffer by the end of 2020.

S&P said, "Although we still view North Macedonia's fiscal leverage
as moderate, we believe there will be some permanent erosion of
fiscal space as a result of the pandemic and ensuing recession. We
project that net general government debt will rise to above 50% of
GDP by the end of 2020 compared to 41% at the end of 2019. We also
expect net general government debt to be on average 10% of GDP
higher over the medium term compared to our projections before the
pandemic.

"Similar to our fiscal projections, we expect the current account
deficit to widen this year to about 4.5% of GDP from 2.8% last
year. Although we forecast a pronounced decline in remittances of
25% in U.S. dollar terms, we anticipate that imports will decline
in tandem, limiting the overall effect on the headline external
balance.

"North Macedonia's banking system remains stable but risks have
increased, in our view. Asset quality will likely deteriorate and
there were also some deposit withdrawals and conversions to FX
briefly throughout April. This has since stopped and high frequency
data suggests that at the end of July central bank reserves were
10% higher compared to end-2019, because of foreign borrowing.

"In mid-August the regulator revoked a license from a small
domestic bank, Eurostandard. We understand that this is not
directly related to the pandemic and that the bank had been
vulnerable and undercapitalized beforehand. Its share in total
domestic credit and deposits is small at below 2% and as such we do
not expect any systemic repercussions. The government is not
involved in its resolution and insured deposit payouts will be
funded by the deposit guarantee fund with no budget involvement.

"We expect the pegged denar-euro exchange rate arrangement to
remain in place for the foreseeable future. The absence of
large-scale portfolio flows into North Macedonia somewhat relieves
immediate risks but these remain given the bleak outlook for
remittances and FDI. Our baseline expectation is that there will be
no large-scale resident conversion to FX and therefore the exchange
rate will remain intact. The National Bank of the Republic of North
Macedonia has also recently agreed a EUR400 million repo line with
the ECB, which could be deployed in a downside scenario. None of
this amount has been deployed so far."

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.

The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.

  Ratings List

  Ratings Affirmed

  North Macedonia
   Sovereign Credit Rating                BB-/Stable/B
   Transfer & Convertibility Assessment   BB
   Senior Unsecured                       BB-




===================
M O N T E N E G R O
===================

MONTENEGRO: S&P Affirms 'B+/B' Sovereign Credit Ratings
-------------------------------------------------------
On Sept. 4, 2020, S&P Global Ratings affirmed its long- and
short-term foreign and local currency sovereign credit ratings on
Montenegro at 'B+/B'. The outlook is negative.

Outlook

The negative outlook primarily reflects risks that the COVID-19
pandemic will cause more extensive and permanent economic and
fiscal damage than S&P currently projects.

Downside scenario

S&P said, "We could lower our ratings on Montenegro if the economic
fallout from COVID-19 proves more substantial than we currently
project, resulting in a loss of productive capacity and a weakening
fiscal position. Ratings pressure could also build if, contrary to
our expectations, the government's fiscal consolidation efforts
beyond 2020 prove insufficient to prevent an upward debt
trajectory. We could also lower the ratings if a material
deterioration in asset quality or heightened liquidity constraints
undermine the stability of the country's banking system, but this
is not our baseline scenario."

Upside scenario

S&P could revise the outlook to stable if Montenegro's economic and
fiscal prospects recover in line with our expectations, putting its
fiscal debt trajectory back on a firm downward path.

Rationale

The tourism-dependent Montenegrin economy has been hit by the
COVID-19 pandemic and the containment measures to halt its spread.
S&P said, "With tourist arrivals down 80% through June 2020, and
delayed opening of borders with key tourist source countries Serbia
and Russia, we expect the Montenegrin economy will contract by 8.2%
in 2020. Although we expect it will recover in 2021, with 4.5%
growth, our baseline forecasts are subject to high uncertainty and
downside risks."

S&P said, "Specifically, we see risks that a protracted recovery
from COVID-19 or modest fiscal consolidation efforts from 2021
could materially erode Montenegro's already weak fiscal position.
We note that Montenegro entered this pandemic with an already high
level of net general government debt, which at year-end 2019
amounted to 62% of GDP. We view this debt level as elevated for a
country with no monetary policy flexibility (given the unilateral
euro adoption).

"Our ratings on Montenegro are supported by the government's cash
reserves accumulated during previous pre-funding exercises
alongside established arrangements with IFIs, which should help
meet the public sector's short-term financing requirements."

Institutional and economic profile: Large economic contraction in
2020 due to the pandemic and dependence on tourism

-- S&P expects Montenegro's economy will contract by 8.2% in 2020
as domestic and external demand weakens because of the effects of
the COVID-19 pandemic.

-- Montenegro's tourism-dependent economy is vulnerable to a
potential slow resumption of tourism flows or a second wave of
infections prompting a re-introduction of restrictions.

-- Opposition parties secured strong support in the general
election on Aug. 30, and the incumbent Democratic Party of
Socialists may not be part of the next government.

The COVID-19-induced containment measures and travel restrictions
both within Montenegro and in tourist source markets will have a
significant impact on Montenegro's GDP, fiscal accounts, and
foreign exchange inflows in 2020. With the tourism sector
accounting for about 30% of GDP and 40% of current account
receipts, Montenegro's economy is highly vulnerable to external
developments. Data for May and June suggests tourist arrivals
dropped by 80% through June 2020 compared with the same period last
year, illustrating the magnitude of the slowdown.

S&P said, "We forecast Montenegro's economy will contract by 8.2%
in 2020, with full year output suffering from substantially
diminished service industry-related activity owing to the impact of
social distancing measures and closed borders. We expect a
reduction in remittances will present a drag on consumption and
anticipate that the falloff in recorded economic activity will
similarly hit the unofficial economy's purchasing power, further
dampening activity.

"Even though we project a gradual resumption of economic activity
in second-half 2020 given the lifting of border restrictions and
broader containment measures, risks remain. In particular, the
borders with key tourist source countries Russia and Serbia were
not opened until Aug. 15, meaning this year's tourism season, which
predominantly lasts through the summer, was lost. Serbia and Russia
together account for roughly two-thirds of all tourist arrivals in
Montenegro. We also see risks that a second wave of infections
could prompt re-introduction of travel restrictions, especially
given regional infection rates are picking up. This would further
hinder already uncertain recovery prospects."

In S&P's view, Montenegro has only limited policy headroom to
offset the economic impact of COVID-19. The country has no monetary
flexibility because it has unilaterally adopted the euro, while
fiscal space has been eroding in recent years, partly due to the
ongoing debt-financed construction of a highway to link the coastal
port of Bar with the Serbian border. The cost of the first section
has added about 20% of GDP to debt over the past three years. The
timeframe and financing arrangements for the additional sections of
the highway in the current environment are even more uncertain
given the country's fiscal space has narrowed further this year.

Montenegro held elections on Aug. 30, 2020, following a tense
run-up. The preliminary results suggest a tightly contested ballot
and that the Democratic Party of Socialists, which has stood at the
center of Montenegrin politics over the past three decades, could
struggle to retain office. The elections were held against a
confrontational backdrop influenced by ongoing protests against the
contentious Law of Religious Freedom, which was adopted in late
2019. In S&P's view, the landscape will likely remain fragmented,
particularly as opposition parties, which could form the next
government, hold diverging views on a range of policy priorities.

S&P said, "That said, we believe Montenegro's institutional setting
benefits from the country's status as an EU candidate. Reforms
implemented as part of the accession negotiations have the
potential to strengthen the country's policy frameworks and align
Montenegro with the EU's Acquis Communautaire. So far, the three
main opposition blocs have reiterated their commitment to
Montenegro's EU path following the election.

"We consider Montenegro's plan for EU accession in 2025 as overly
optimistic. This is because we believe both domestic developments
and Euroscepticism among the existing member states could hamper
the process, since--under EU rules--member states will ultimately
have to unanimously approve Montenegro's membership bid."

Flexibility and performance profile: Montenegro's unilateral euro
adoption and limited fiscal space constrain the country's ability
to absorb shocks

-- S&P expects the fiscal deficit will reach 9% of GDP in 2020.
Financing arrangements with IFIs mitigate short-term refinancing
risks.

-- The banking sector will likely face challenges from a ramp-up
in nonperforming loans (NPLs).

S&P forecasts that Montenegro's general government deficit will
reach 9% of GDP in 2020, with pressure predominantly coming from a
reduction in fiscal revenue. The government has deployed three
fiscal support packages aimed at helping households and the private
sector survive COVID-induced liquidity pressure in 2020. The
measures include the securing of 70% of wages for all registered
employees in sectors that had to close due to the pandemic-related
lockdown. Further measures include a commitment to pay 50% of the
gross minimum wage to workers in companies whose work is at risk
due to the lockdown and to people that have to stay home and take
care of children under 11, or who otherwise have been subject to
quarantine measures.

S&P said, "In line with our budgetary forecasts, Montenegro's
financing needs for 2020 are set to markedly increase. We expect
these will be catered for via contracted financing from the IFIs,
together with drawdowns of the government's existing cash reserves.
In July 2020, the IMF approved Montenegro's request for balance of
payments support under a EUR74 million ($83.7 million) Rapid
Financing Instrument, which we expect will underpin additional
credit lines from IFIs. These will add to arrangements already in
place, including a syndicated loan backed by a World Bank
policy-based guarantee, together with a EUR60 million loan from the
EU under its macro-financial assistance program.

The government's previous proactive debt management--including
buyback arrangements and prefunding initiatives--mitigate imminent
financing risks. We estimate that government cash reserves and
accounts in the central bank and with commercial banks amounted to
13% GDP as of end-July. This, for instance, compares with a roughly
9% of GDP external public debt repayment for 2021. Given the
projected fiscal deficits on top of that, we expect Montenegro will
need to secure more financing. S&P anticipates that Montenegro will
retain commercial bond market access, and in second-half 2020 will
pre-fund an upcoming EUR300 million Eurobond redemption in March
2021.

S&P now forecasts Montenegro's net general government debt will
reach 77% of GDP in 2020, up from 62% in 2019, adding further
pressure to its already constrained fiscal position. High public
and private leverage poses a larger risk to economic stability for
small sovereigns with constrained monetary flexibility and
concentrated economies such as Montenegro. Montenegro's external
debt is primarily owed to foreign creditors, with only a limited
amount of domestic securities issuance. About 40% of government
external debt is to official lenders under generally favorable
conditions. The debt-redemption profile remains rather uneven,
however, which is a function of the size of the economy.
Authorities issue benchmark-size instruments that are comparatively
large as a percentage of GDP, meaning repayments are high for those
years with Eurobond maturities. The next Eurobond redemption is due
in March 2021.

Montenegro also remains vulnerable to balance-of-payment risks,
with a large net external liability position and persistent current
account deficits. Historically, the economy has relied
substantially on net inflows of foreign direct investment (FDI)
into tourism and associated real estate. S&P said, "We observe that
FDI flows showed resilience in first-half 2020, and supported the
continuation of ongoing investments, in particular within the
utility sector. For the full year we anticipate that FDI will come
in notably lower compared with historical levels, reflecting
lessened flows into the tourist industry. As FDI partially dries
up, we expect the current account deficit will narrow. As
investments and consumption reduce, we forecast that Montenegro's
current account deficit will largely mirror the government's fiscal
deficit, reaching close to 10% of GDP in 2020 compared with 15% in
2019 when FDI was higher."

S&P said, "In our base-case scenario, we expect the FDI tap will
once again open in 2021, supporting the resumption of several
ongoing hospitality projects. We expect FDI will average 10% of GDP
annually in 2021-2023, broadly in line with historical trends,
fueling rising imports and widening the country's current account
deficit again toward 15% of GDP."

As a response to COVID-19, the Central Bank of Montenegro extended
a 90-day loan payment moratorium to borrowers affected by liquidity
issues from the containment measures. Montenegro's unilateral
adoption of the euro, however, prevents its central bank from
setting interest rates and controlling the money supply, and
restricts its ability to act as a lender of last resort. Although
the central bank has some options to provide liquidity support to
domestic banks, in S&P's view, its inability to create additional
liquidity in a stress scenario effectively prevents it from
fulfilling the function of lender of last resort.

Positively, Montenegro's banking system has entered this crisis in
a relatively strong position, with solid capital levels, NPLs at a
low 5%, and ample liquidity. The system is dominated by
subsidiaries of foreign banking groups, and is largely funded by
domestic deposits. S&P sid, "We have so far observed no notable
deposit flight, and in our base-case scenario we expect this
situation will remain stable. Risks to the stability of
Montenegro's banking system have increased and we anticipate an
increase in the level of NPLs as households and corporates are
affected by the economic fallout of the pandemic." The rise in NPLs
is likely to be felt with a lag as fiscal support and loan
moratoria are phased out. Fundamentally, given the central bank's
limited possibilities to stabilize the banking system, it remains
vulnerable to stress should NPLs rise sharply or liquidity dry up.

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.

The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.

  Ratings List

  Ratings Affirmed

  Montenegro
   Sovereign Credit Rating                B+/Negative/B
   Transfer & Convertibility Assessment   AAA
   Senior Unsecured                       B+




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

IGNITION TOPCO: S&P Cuts Rating to B- on Expected Weaker Earnings
-----------------------------------------------------------------
S&P Global Ratings lowered its rating to 'B-' from 'B' on IGM
Resins' (IGM) parent, Ignition Topco BV.

IGM's market demand and earnings have plummeted due to lower
pricing and the extraordinary impact of the coronavirus pandemic on
economic activity.   S&P said, "For the full 2020, we expect a
decline in EBITDA of more than 20% to EUR40 million-EUR45 million,
followed by a swift recovery in 2021. Still, the company will not
reach pre-crisis EBITDA level until 2022, according to our base
case. This is slower than our earlier expectation of a full
recovery by end-2021, due to COVID-19 effects on demand lasting
longer than previously expected." Uncertainty remains high about
the pace of rebound in the general economy. In the first half of
2020, IGM's revenues and adjusted EBITDA declined by about 10% and
more than 35%, respectively, from last year. This reflects about
12% lower average prices for PI, in line with expectation, as
prices were extraordinary high in the first half of last year due
to temporary supply disruption in the market. In response to
intensified price competition from the second half 2019, IGM has
reduced the prices of certain PI products and regained market
shares in the first quarter of 2020. However, in the second quarter
across most products, volumes dropped markedly due to the
extraordinary COVID-19-related setbacks on market demand. Despite
various measures taken to cut operating expenses, lower production
volumes and under-absorbed costs dropped adjusted EBITDA margin
nearly 850 bps to 18.5%.

S&P said, "We expect IGM's leverage to substantially weaken this
year, followed by a slower-than-previously-anticipated recovery in
2021.   We expect IGM's adjusted debt to EBITDA to surpass 8.0x
this year from 6.1x in 2019. IGM has drawn down EUR19 million of
its EUR50 million revolving credit facility (RCF) to provide a
liquidity buffer. The RCF is likely to remain drawn through
year-end. Driven by a rebound in sales volumes, we expect IGM's
leverage to improve toward 6.5x by end-2021. However, the
deleveraging will be slower than our previous expectation of below
6.0x by next year and remain weaker than the 5x-6x range we view as
commensurate with our 'B' rating."

FOCF is likely to turn negative this year due to lower EBITDA and
high capital expenditure (capex) to expand production capacity in
China.   Despite flagging market demand and earnings in a
recessionary environment, IGM has pursued its investment plan for
the Anqing green-field plant in China. This will help the company
increase capacity for high-value PI production, for which the
company expects to see demand pick up again soon. However, FOCF
will turn negative, mainly driven by about EUR22 million relates to
growth capex for Anqing, pushing total capex to nearly EUR28
million. S&P expects that IGM will generate positive FOCF again
from 2021, as sales volumes and earnings recover and capex
normalizes around EUR15 million-EUR20 million. However, the
magnitude of FOCF is also subject to uncertainty, such as
higher-than-scheduled growth capex for additional workshops and
higher working capital requirement if sales increase again.

The rating is supported by adequately diversified end-markets and
good growth potential.  Nearly 50% of IGM's business is in the
graphic arts, with a significant part of that dedicated to food and
pharmaceutical packaging, which should be less vulnerable to an
economic downturn. However, the remaining business is more exposed
to a recession, including industrial coatings (mainly wood coatings
used for flooring, furniture, doors, and panels) and electronics
and adhesives, where S&P expects lower demand and sales volumes for
IGM in 2020. S&P expects a rebound from 2021, given IGM's leading
global position in the high-growth, niche market of ultraviolet
(UV) curing materials; its implemented price reductions to regain
market shares; and its expansion project in China to accommodate
strong demand for high-value PI products.

S&P Global Ratings acknowledges a high degree of uncertainty about
the evolution of the coronavirus pandemic.   The consensus among
health experts is that the pandemic may now be at, or near, its
peak in some regions but will remain a threat until a vaccine or
effective treatment is widely available, which may not occur until
the second half of 2021. S&P said, "We are using this assumption in
assessing the economic and credit implications associated with the
pandemic. As the situation evolves, we will update our assumptions
and estimates accordingly."

S&P said, "The stable outlook reflects our expectation of gradual
recovery in IGM's EBITDA and FOCF turning positive in the next 12
months. We also expect IGM to maintain at least adequate
liquidity.

"We could lower the rating if IGM's liquidity weakened
significantly due to persistently negative FOCF. This could occur
because of an extended deterioration of IGM's EBITDA due to a
prolonged severe downturn across its main markets, a loss of key
customers due to price competition, and high investments in
capacity expansion plans at the same time.

"We could raise the rating if we observe a swift recovery in IGM's
performance and sustainably positive FOCF, with leverage improving
to below 6x adjusted gross debt to EBITDA. An upgrade would require
IGM to maintain at least adequate liquidity and sufficient headroom
under the springing covenant on its RCF. We would also expect IGM's
financial policy, especially on shareholder distributions,
acquisitions, and capex, to be supportive of a higher rating."


TRIVIUM PACKAGING: S&P Downgrades LT ICR to 'B', Outlook Stable
---------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit ratings on
Netherlands-Based Trivium Packaging B.V. (Trivium) and Trivium
Packaging Finance B.V. to 'B' from 'B+'.

S&P said, "In 2020, we expect Trivium's revenues to remain in line
with those in 2019, at about $2.6 billion.  The flat revenue growth
we expect for 2020 reflects lower average selling prices and lower
aerosol sales, but higher demand for food packaging." The decline
in average selling prices reflects the pass-through of lower raw
material prices, as the majority of Trivium's contracts include
pass-through provisions. The lockdowns and social distancing
measures due to the COVID-19 pandemic reduced the demand for
personal care products (including aerosol cans) in the first half
of 2020.

S&P said, "We expect S&P Global Ratings-adjusted leverage of 10x by
December 2020.  In 2020, Trivium's EBITDA will be undermined by
high restructuring costs linked to the company's transformation
after last year's business combination, somewhat lower production
efficiencies due to a slight decline in volumes, and lower sales of
high-margin aerosol products. We expect debt to remain broadly
stable, but the 15% decline in EBITDA will increase leverage to
about 10.1x from 8.6x in 2019. Although we forecast that
extraordinary costs will remain high in 2021 as Trivium continues
its business optimization and restructuring, we expect leverage to
decrease to about 9x by year-end 2021. This will mainly reflect
EBITDA improvements as the impact of the pandemic subsides and
Trivium improves its operational performance through its
transformation plan.

"We anticipate positive free operating cash flow (FOCF) for 2020.
This is supported by the resilient performance of the food segment
and Trivium's tighter grip on capital expenditure (capex). That
said, FOCF will be modest, at about $18 million, due to high
extraordinary costs linked to restructuring activities and lower
demand for aerosols. For 2021, we estimate that FOCF will improve
to about $50 million, due to EBITDA growth and lower capex of $100
million-$110 million compared to $130 million in 2020."

S&P Global Ratings acknowledges a high degree of uncertainty about
the evolution of the coronavirus pandemic. The consensus among
health experts is that the pandemic may now be at, or near, its
peak in some regions, but will remain a threat until a vaccine or
effective treatment is widely available, which may not occur until
the second half of 2021. S&P said, "We are using this assumption in
assessing the economic and credit implications associated with the
pandemic. As the situation evolves, we will update our assumptions
and estimates accordingly."

The stable outlook indicates S&P's expectation of FOCF remaining
positive during the next 12 months and leverage decreasing to about
9x in 2021.

S&P would consider lowering its rating on Trivium if FOCF was
negative on a sustained basis.

S&P believes an upgrade is unlikely in the near term due to
Trivium's high leverage. However, it could raise its rating on
Trivium if:

-- Adjusted debt to EBITDA declined toward 7x on a sustained
basis; and

-- Shareholders committed to maintaining leverage at that level.




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

LEXGARANT INSURANCE: S&P Alters Outlook to Pos., Affirms B+ ICR
---------------------------------------------------------------
S&P Global Ratings revised to positive from stable its outlook on
Russian insurer Lexgarant Insurance Co. Ltd. At the same time, S&P
affirmed its 'B+' long-term insurer financial strength and issuer
credit ratings on the Russian insurer.

S&P said, "Contrary to our previous expectations, Lexgarant's
aviation insurance portfolio did not experience a significant
reduction in 2020 thanks to its geographic diversification; focus
on cargo aviation, which was not grounded due to pandemic; as well
as some government-owned small companies that remained operational
during the COVID-19-related lockdowns. While Lexgarant's premium
volumes will come under pressure this year, we believe the company
will remain profitable and well prepared to resume premium growth
in 2021-2022." Furthermore, a decline in travelers insurance is
notable, but it is compensated by migrants' medical insurance--a
line that proved to be resilient in 2020.

S&P notes that Lexgarant's performance has continued to withstand
the economic and financial shocks of the coronavirus outbreak, as
well as to the impacts of decreased oil prices and capital market
volatility. Lexgarant maintains its niche position in global
aviation insurance, using its superior reinsurance protection and
benefits from gradual Russian ruble depreciation, as its
investments are current accounts in euros and U.S. dollars.

Lexgarant continues to enjoy an extremely strong risk-adjusted
capital adequacy, according to our model, sustained by prudent
underwriting, low net risk retention, and a liquid investment
portfolio. However, S&P notes the company has a small capital base,
of about $15 million. Its volume of insurance portfolio is
similarly modest, and fixed costs are relatively high. Moreover,
Lexgarant's core business, aviation insurance, is characterized by
low frequency, but high-severity, claims.

In S&P's view, Lexgarant's small capitalization and aviation focus
exposes it to large claims in gross terms, but net risk retention
is conservative. Lexgarant cedes more than 50% of its total
premiums to a high-quality reinsurance panel, which provides
substantial capacity. Although this allows the company to compete
on the aviation insurance market with markedly larger and stronger
players, it makes the company dependent on the availability of
reinsurance protection.

Lexgarant benefits from having a liquid investment portfolio,
comprising mostly cash and cash equivalents in current accounts
with Russian subsidiaries of foreign banks, and largely placed in
foreign currency. S&P notes that Lexgarant posted material foreign
exchange gains for first-quarter 2020 due to Russian ruble
depreciation, and we expect these gains to form significant portion
of 2020 full year profits.

S&P said, "The positive outlook reflects our view that the insurer
will endure COVID-19 fallout. We believe that Lexgarant will
maintain its niche in the aviation insurance, as well as its
superior reinsurance protection--its significant competitive
advantage. While we expect Lexgarant's technical results may be
volatile in 2020-2021, we believe Lexgarant will stay profitable
and that its capitalization will continue to support the rating.

"We see a positive rating action as possible in the next 6-12
months if the company continues to retain sound capital and
liquidity levels, while sustaining operating performance at the
current levels. The upgrade would also hinge on Lexgarant's ability
to retain its established niche on the international aviation
market, and reinsurance protection to be in place.

"We would consider revising the outlook to stable in the next 6-12
months if Lexgarant's operating performance deteriorates
significantly. We could consider a negative rating action if
Lexgarant's financial risk position materially worsens, due to, for
example, unexpected substantial losses or weakening liquidity, or
if we believe Lexgarant cannot maintain its aviation reinsurance
protection, which we currently view as a rating strength."


RUSSNEFT PJSC: Fitch Cuts LT IDR to C After Missing Payment
-----------------------------------------------------------
Fitch has downgraded PJSC RussNeft's Long-Term Foreign-Currency
Issuer Default Rating (IDR) to 'C' from 'CCC+'.

As disclosed in RussNeft's 1H20 IFRS statement, RussNeft has missed
two principal payments for the total amount of USD46 million due in
March and June 2020 under its USD1,172 million loan originally
provided by the VTB bank. In March 2020, the loan was transferred
to CQUR Bank LLC (domiciled in Qatar and where VTB has a minority
stake), which became RussNeft's largest creditor. RussNeft says
that the creditor is not taking steps to accelerate the loan, to
recover the collateral or initiate bankruptcy proceedings, and that
the company continues to make interest payments while trying to
re-negotiate the loan agreement. Fitch believes that the parties
are effectively in standstill while negotiations continue, even
though RussNeft has provided to Fitch no waivers or other documents
issued by the bank.

RussNeft's liquidity is weak, particularly in the current oil price
environment. Fitch projects RussNeft to generate negative free cash
flow (FCF) in 2020-2021, and its leverage is high. RussNeft's
ability to attract external funding is constrained by the loan
agreement with its major creditor.

RussNeft's business profile, however, remains solid. The company's
production (about 140,000 barrels per day, excluding
non-consolidated assets in Azerbaijan) and reserves are
commensurate with the 'BB' rating category.

KEY RATING DRIVERS

Missed Payments: In its view, RussNeft's missed payments under the
CQUR Bank loan reflect its weak liquidity position and constrained
access to alternative funding sources. The management says that
RussNeft is re-negotiating the loan agreement, which could include
pushing out maturities, and that it continues to pay interest,
while the bank is not attempting to accelerate the loan, initiate
bankruptcy proceedings or recover the collateral. Hence, Fitch
assumes that RussNeft and the bank are effectively in standstill,
even though there is no formal agreement. This situation is in line
with the 'C' rating.

As a COVID-19 support measure, RussNeft was granted by the
government an immunity against potential creditor claims, which,
however, expires in September 2020.

High Leverage: Fitch projects RussNeft's funds from operations
(FFO) net leverage (adjusted for long-term prepayments, guarantees
and preferred stock) to peak at 15x in 2020 before moderating to
about 8x in 2021 and 6x-7x in 2022-2023. This is high by industry
standards. RussNeft's leverage, excluding Fitch's adjustments for
preferred stock and guarantees, but including prepayments, is lower
at 10x in 2020 and 5x on average over 2021-2023, but still point to
a high debt load.

Prepayments Deals: Glencore, RussNeft's second-largest shareholder
(31% of the common stock), has been supporting RussNeft through
long-term prepayments for future oil supplies. In 2019, it also
attracted a long-term prepayment from VTB (used to fund a
transaction with an affiliated company) and a short-term prepayment
from a private trader (used for general corporate purposes). Fitch
estimates RussNeft's total prepayment balance at end-2019 amounted
to about RUB39 billion, up from RUB28 billion at end-2018. Fitch
views prepayments as effectively a debt-like instrument.

Concentrated Ownership: RussNeft's shareholding structure is
concentrated, with Mikhail Gutseriev and his family controlling 47%
of ordinary shares. RussNeft and other businesses controlled by Mr
Gutseriev are consolidated under the umbrella of the Safmar group,
which does not prepare public accounts. Moreover, most of Mr
Gutseriev's investments are not public companies and it is not
possible to assess the financial position of the group.

Transactions with Affiliated Parties: In 2019, RussNeft entered
into several transactions with affiliated companies, including a
guarantee for a EUR267 million loan to fund Mr Gutseriev's stake
purchase in PJSC Kuzbass Fuel Company, and a short-term loan
granted to an affiliated company for about EUR200 million (funded
by the long-term prepayment from VTB). RussNeft expects the latter
loan will be repaid in 3Q20, which is not considered in its rating
case. These recent transactions signal weak corporate governance
practices and high exposure to key man risk.

Preferred Shares: In 2019, VTB purchased one-third of RussNeft's
preferred shares previously owned by Mr Gutseriev's family and
subsequently transferred to Rost Bank. The bank became part of the
rescued and nationalised B&N Bank, now owned by the Central Bank of
Russia (CBR). The CBR later transferred the shares to Trust Bank.
In 2019, VTB purchased a third of the shares from Trust, while
RussNeft guaranteed to purchase back the shares from VTB for RUB21
billion in 2026, which Fitch adds to RussNeft's adjusted debt.

RussNeft has also committed to increase its preferred dividend
payments from USD16 million-40 million to a minimum USD60 million,
and has provided a guarantee to VTB with regard to the minimum
dividends payable to the bank.

Preferred Shares Treated as Debt: Fitch continues to allocate the
preferred stock as 100% debt, according to Fitch's Corporate
Hybrids Treatment and Notching Criteria. Even though the shares are
non-cumulative, a decision not to pay preferred dividends would
trigger the guarantee issued in favour of VTB and could, in its
view, result in adverse reputational consequences for the company's
main shareholder.

Production to Stabilise: Fitch assumes RussNeft's production to
fall in 2020 in line with Russia's OPEC+ obligations and to
gradually recover in 2021-2022. RussNeft's oil production and
reserves are commensurate with the 'BB' rating category. However,
the company has higher production costs than Russian peers' and
higher susceptibility to potential changes in taxation (eg
reduction in tax incentives).

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

RussNeft has an ESG Relevance Score of '5' for Group Structure
factor (eg complexity, transparency and related-party transactions)
due to material transactions with affiliated companies, including a
loan and guarantees, which have been provided despite the company's
already limited liquidity and have resulted in materially higher
adjusted leverage. This has a negative impact on the credit
profile, and is highly relevant to the rating, contributing to the
downgrade to 'CCC+' in March 2020.

RussNeft has an ESG Relevance Score of '4' for Governance Structure
(eg board independence and effectiveness; ownership concentration).
Fitch believes that the recent affiliated company transactions
point to weak corporate governance practices and exposure to the
key man risk, which has a negative impact on the credit profile,
and is relevant to the rating in conjunction with other factors.

DERIVATION SUMMARY

RussNeft's downgrade to 'C' reflects it two missed principal
payments under a loan originally provided by VTB. RussNeft's
leverage is high, and its liquidity is weak and is negatively
affected by low oil prices. The company's production (about 140kb/d
in 2019) and proved reserves (about 1 billion barrels) are,
however, in line with the 'BB' rating category.

KEY ASSUMPTIONS

  - Brent oil price: USD35/bbl in 2020, USD45/bbl in 2021,
USD53/bbl in 2022 and USD55/bbl in 2023

  - Exchange rate (USD/RUB): 70 in 2020, 69 in 2021, 68 in 2022 and
67 in 2023

  - Upstream production falling by 9% in 2020 and gradually
recovering in 2021-2022

  - Capex averaging RUB16 billion in 2020-2023

  - Annual preferred dividends of USD60 million

  - No dividends paid to ordinary shareholders

RATING SENSITIVITIES

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

  -  Successful restructuring, which would not qualify as a
distressed debt exchange under Fitch's criteria

  - Repayment of the missed principal payments

  - Availability of new sources of liquidity sufficient to fund
business requirements at least in the short term

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

  - Restructuring, which would qualify as a distressed debt
exchange under Fitch's criteria

  - Lack of progress in restructuring and a breakdown of
negotiations, potentially evidenced as RussNeft suspending interest
payments

LIQUIDITY AND DEBT STRUCTURE

Weak Liquidity: RussNeft's liquidity position has deteriorated due
to lower oil prices and higher projected dividends on preferred
shares. Its leverage is high, and access to external funding is
constrained by an agreement with the main creditor. RussNeft's
agreement with tax authorities to pay a portion of its taxes due in
2020 (about USD115 million) in instalments over a period of 11
months is positive for its immediate liquidity, but does not
fundamentally improve its liquidity position.

Fitch expects that in 2020-2021 RussNeft will generate negative
FCF. Fitch assesses the company is having a substantial liquidity
gap, given its low cash balance and lack of unutilised committed
credit lines.

SUMMARY OF FINANCIAL ADJUSTMENTS

  - Fitch treats preferred shares of RussNeft as debt. The value of
shares was RUB27 billion at end-2019

  - Fitch treats prepayments for oil deliveries from Glencore and
other traders as debt (RUB39 billion at end-2019)

  - Fitch adds certain guarantees issued by RussNeft to its
financial debt (RUB40 billion at end-2019)

  - Fitch reduced RussNeft's EBITDA by RUB619 million to deduct
right-of-use assets depreciation and lease-related interest expense
in 2019. At the same time, its lease liabilities were removed from
debt

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

PJSC RussNeft: Group Structure: '5', Governance Structure: '4'

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).



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

GARRETT MOTION: S&P Downgrades ICR to 'B', On Watch Negative
------------------------------------------------------------
S&P Global Ratings lowered its issuer credit ratings and secured
debt ratings on Switzerland-based turbocharger maker Garrett Motion
Inc. to 'B' from 'BB-' and its unsecured debt ratings to 'CCC+'
from 'B'. At the same time, S&P placedd all ratings on CreditWatch
negative.

The announcement of a possible balance sheet restructuring is
unexpected after successful covenant renegotiation and slightly
better-than-expected second-quarter 2020 results. S&P said, "After
Garrett renegotiated a two-year relief period to accommodate spikes
in the tested leverage covenant ratio, suspended indemnity payments
to Honeywell, and posted an acceptable second-quarter performance
in terms of revenue and free operating cash flow (FOCF) loss, we
thought Garrett had so far weathered the unprecedented shock of
auto production standstill caused by the pandemic. This led us to
affirm the rating with a negative outlook in July 2020 despite the
company's high leverage and the uncertain recovery of FOCF, which
are largely volume dependent. The group's announcement of its
intentions to explore alternatives for balance sheet restructuring
was therefore unexpected. The recent share performance indicates a
rights issue as an unlikely scenario in our view, leaving options
on the table that could be detrimental to debtholders. This leads
us to downgrade all ratings by two notches and place them on
CreditWatch with negative implications, pending more clarity on the
group's intentions."

S&P said, "The main risk to our base-case scenario is our
assumption for turbocharger penetration and market share. Our base
case for Garrett Motion is driven by assumptions on global
turbocharger penetration rates and market shares. We do not see the
immediate need to amend this base case, which assumes a very
gradual rise of turbocharger penetration globally, consistent with
tightening environmental regulation globally, combined with
Garrett's market share remaining stable at about one-third. In
light of the quickly concentrating industry following the
acquisition of Delphi by Garrett's main competitor, U.S.-based
Borgwarner, we do not expect to observe market share erosion
imminently, although we recognize it could affect Garrett's
competitive position in the longer term, in particular if auto
original equipment manufacturers (OEMs) started to question
Garrett's financial reliability. We understand this is the
underlying rationale of the potential balance sheet restructuring,
which cast doubts on the company's long-term business risk
profile.

"We plan to resolve the CreditWatch once we have more clarity about
management's intentions. We could lower the ratings further if we
were convinced that a debt restructuring that we would view as a
default under our criteria was likely. We think this would be
linked to a scenario of further weakened FOCF prospects, which
would reduce deleveraging potential.

"We could affirm the ratings if we think debt restructuring is
unlikely, the company continues to achieve our base-case
expectations, and we conclude that the group's long-term business
prospects are likely to remain largely unchanged."


SWISSPORT: Thousands More Job Losses Expected Due to Slump
----------------------------------------------------------
Peter Campbell at The Financial Times reports that Swissport warned
on Aug. 31 of thousands more job losses at the world's largest
baggage-handling business, as it forecast a pandemic-fuelled slump
in the global travel industry to last until 2024.

Peter Waller, group finance boss, made the warning as the company
was forced to restructure because of the coronavirus crisis, which
involves a EUR1.9 billion debt-for-equity swap and lenders taking
control from struggling Chinese owner HNA, the FT relates.

The group had 65,000 staff worldwide across 47 countries before the
crisis, but has already reduced headcount by 15,000, including
shedding half its UK staff, the FT discloses.

But the company expected to lose several thousand more of the
35,000 employees who were currently on government support schemes
across the world, Mr. Waller told the FT.

While the company hopes "a large proportion" will return, "we will
have to right-size some of our operations, we might need less
labour", he said.

Swissport's deal announced on Aug. 31 will involve leading
creditors, including SVP Global and Apollo Global Management,
taking three-quarters of the company through a debt-for-equity
swap, as well as providing a EUR500 million loan, the FT states.

A group of seven creditors will own 75% of the equity, with other
senior secured lenders holding the remainder, the FT notes.




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

TURK P VE I: Fitch Affirms 'BB-' IFS Rating, Alters Outlook to Neg.
-------------------------------------------------------------------
Fitch Ratings has revised Turk P ve I Sigorta A.S.'s (Turk P&I)
Outlook Rating to Negative from Stable and affirmed the company's
Insurer Financial Strength (IFS) Rating at 'BB-'.

KEY RATING DRIVERS

The revision of the Outlook on Turk P&I's IFS Rating follows
Fitch's similar rating action on Turkey's Long-Term Local-Currency
Issuer Default Rating (IDR) Outlook on August 21, 2020. The rating
action reflects Turk P&I's substantial exposure to the Turkish
operating environment and the deposits held in Turkish banks on its
balance sheet.

Turk P&I's ratings reflect the company's weak business profile
compared with other Turkish insurers', and investment risks that
are skewed towards the Turkish banking sector. The rating also
reflects Turk P&I's strong liquidity profile, strong but
potentially volatile earnings, and adequate capitalisation. Fitch
expects the company to remain fairly resilient to coronavirus
pandemic-related pressures.

Fitch ranks Turk P&I's business profile as 'moderate' compared with
other Turkish insurers', despite the company's small size, limited
history and less established business lines. This is because Fitch
believes its ownership structure, equally divided between public
and private interests, and its strategic role in Turkey, are
positive for its business profile. However, Fitch believes the
Negative Outlook on Turkey's rating adds pressure to the company's
operating environment.

Turk P&I's investments are concentrated in deposits in a single
state-owned bank, and therefore the company's investment risks are
heightened by the Negative Outlook on Turkey, which weighs on the
asset quality of the country's banking sector.

Turk P&I delivered a strong financial performance during 1H20, with
strong growth despite some pandemic-induced pressure. Fitch expects
capitalisation to remain supportive of the rating at end-2020,
supported by a capital increase of TRY 11.5million in April 2020.

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

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

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

  -- Material deterioration in the Turkish economy or the company's
investment quality, as reflected in a downgrade of Turkey's
Long-Term 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 on/upgrade of 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 a revision of the Outlook on
Turkey's Local-Currency IDR to Stable.

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

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

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

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

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

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

ESG CONSIDERATIONS

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

[*] Fitch Alters Outlook on 6 Turkish LRGs to Negative
------------------------------------------------------
Fitch Ratings has revised the Outlook on six Turkish local and
regional governments to Negative from Stable. The affected LRGs are
the Metropolitan Municipality of Istanbul (Istanbul), Metropolitan
Municipality of Izmir (Izmir), Metropolitan Municipality of Bursa
(Bursa), Antalya Metropolitan Municipality (Antalya), Manisa
Metropolitan Municipality (Manisa) and Mersin Metropolitan
Municipality (Mersin).

Under EU credit rating agency (CRA) regulation, the publication of
sovereign (including by CRA definition regional or local
authorities of a state) reviews is subject to restrictions and must
take place according to a published schedule, except where it is
necessary for CRAs to deviate from this in order to comply with
their legal obligations.

Fitch interprets this provision as allowing us to publish a rating
review in situations where there is a material change in the
creditworthiness of the issuers that Fitch believes makes it
inappropriate for us to wait until the next scheduled review dates
in 2020 in order to update the ratings or Outlook/Watch status. In
this case the deviation was caused by the revision of the Outlook
on Turkey's IDRs on August 21, 2020.

KEY RATING DRIVERS

Revision of the Outlook on the IDRs of the six Turkish LRGs to
Negative follows that on the IDRs of the Turkish sovereign on
August 21, 2020, as the ratings of Istanbul, Izmir, Bursa, Antalya,
Manisa and Mersin are constrained by the sovereign ratings. Fitch's
ratings are forward-looking in nature, and Fitch will monitor
developments in the public sector for coronavirus pandemic severity
and duration, and incorporate revised base- and rating-case
qualitative and quantitative inputs based on performance
expectations and assessment of key risks. The next CRA3 review for
the 6 LRGs is scheduled for December 18, 2020.

The derivation of the Standalone Credit Profiles (SCP) and
accordingly the rating derivation of the Long- and Short-Term
Foreign-Currency IDRs are unaffected by the rating action, leading
to their IDR affirmation. Accordingly, Istanbul's SCP remains at
'bbb-', Izmir's SCP at 'bbb', Bursa's SCP at 'bb', Antalya's SCP at
'bb', Manisa's SCP at' bb+', and Mersin's SCP at 'bb', which result
in their IDRs being constrained by the sovereign's IDRs.

KEY ASSUMPTIONS

Qualitative assumptions and assessments and their respective weight
in the rating decision:

Risk Profile for Istanbul: Low Midrange/low weight

Revenue Robustness: Midrange/low weight

Revenue Adjustability: Weaker/low weight

Expenditure Sustainability: Midrange/low weight

Expenditure Adjustability: Midrange/low weight

Liabilities and Liquidity Robustness: Weaker/low weight

Liabilities and Liquidity Flexibility: Midrange/low weight

Debt sustainability: 'aa' category

Support: N/A

Asymmetric Risk: N/A

Sovereign Cap: Negative/ high weight

Risk Profile for Izmir: Weaker/low weight

Revenue Robustness: Midrange/low weight

Revenue Adjustability: Weaker/low weight Expenditure

Sustainability: Midrange/low w eight

Expenditure Adjustability: Midrange/low weight

Liabilities and Liquidity Robustness: Weaker/low weight

Liabilities and Liquidity Flexibility: Weaker/low weight

Debt sustainability: 'aaa' category, low weight

Support: N/A

Asymmetric Risk: N/A

Sovereign Cap: Negative/ high weight

Risk Profile for Mersin: Weaker/low weight

Revenue Robustness: Weaker/low weight

Revenue Adjustability: Weaker/low weight

Expenditure Sustainability: Midrange/low weight

Expenditure Adjustability: Midrange/low weight

Liabilities and Liquidity Robustness: Weaker/low weight

Liabilities and Liquidity Flexibility: Weaker/low weight

Debt sustainability: 'aa' category, low weight

Support: N/A

Asymmetric Risk: N/A

Sovereign Cap: Negative/ high weight

Risk Profiles for Bursa, Manisa and Antalya: Weaker/low weight

Revenue Robustness: Weaker/low weight

Revenue Adjustability: Weaker/low weight

Expenditure Sustainability: Midrange/low weight

Expenditure Adjustability: Midrange/low weight

Liabilities and Liquidity Robustness: Weaker/low weight

Liabilities and Liquidity Flexibility: Weaker/low weight

Debt sustainability: 'aa' category, low weight

Support: N/A

Asymmetric Risk: N/A

Sovereign Cap: Negative/ high weight

Quantitative assumptions - issuer-specific

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

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

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

  - GDP per capita (US dollar, market exchange rate): 9,042; 7,956

  - Real GDP growth (%): 0.9; -3.9

  - Consumer prices (annual average % change): 15.5; 11.6

  - General government balance (% of GDP) -3.2; -6.5

  - General government debt (% of GDP) 32.8; 39.5

  - Current account balance plus net FDI (% of GDP): 1.9; -2.6

  - Net external debt (% of GDP): 27.9; 33.8

  - IMF Development Classification: EM (emerging market)

  - CDS Market-Implied Rating: 'B+'

RATING SENSITIVITIES

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

  - An upgrade of Turkey's IDRs would lead to an upgrade of the
issuers' respective IDRs

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

  - A downgrade of Turkey's IDRs would lead to a downgrade of the
issuers' respective IDRs

ESG CONSIDERATIONS

Antalya Metropolitan Municipality: Public Safety and Security: 4
due to geopolitical risks, which might have an adverse effect on
the local economy being heavily reliant on the tourism sector.

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, either
due to their nature or the way in which they are being managed by
the entity.

RATING ACTIONS

Mersin Metropolitan Municipality

LT IDR; BB- Affirmed; previously BB-

ST IDR; B Affirmed; previously B

LC LT IDR; BB- Affirmed; previously BB-

LC ST IDR; B Affirmed; previously B

Natl LT; AA-(tur) Affirmed; previously AA-(tur)

Izmir Metropolitan Municipality

LT IDR; BB- Affirmed; previously BB-

LC LT IDR; BB- Affirmed; previously BB-

Natl LT; AAA(tur) Affirmed; previously AAA(tur)

Manisa Metropolitan Municipality

LT IDR; BB- Affirmed; previously BB-

LC LT IDR; BB- Affirmed; previously BB-

Natl LT; AA(tur) Affirmed; previously AA(tur)

Istanbul Metropolitan Municipality

LT IDR; BB- Affirmed; previously BB-

ST IDR; B Affirmed; previously B

LC LT IDR; BB- Affirmed; previously BB-

Natl LT; AAA(tur) Affirmed; previously AAA(tur)

Bursa Metropolitan Municipality

LT IDR; BB- Affirmed; previously BB-

LC LT IDR; BB- Affirmed; previously BB-

Natl LT; AA-(tur) Affirmed; previously AA-(tur)

Antalya Metropolitan Municipality

LT IDR; BB- Affirmed; previously BB-

ST IDR; B Affirmed; previously B

LC LT IDR; BB- Affirmed; previously BB-

LC ST IDR; B Affirmed; previously B

Natl LT; AA-(tur) Affirmed; previously AA-(tur)



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

UKRAINE: Fitch Affirms 'B' LT IDR, Outlook Stable
-------------------------------------------------
Fitch Ratings has affirmed Ukraine's Long-Term Foreign-Currency
(LTFC) Issuer Default Rating (IDR) at 'B' with a Stable Outlook.

KEY RATING DRIVERS

The ratings of Ukraine reflect its credible macroeconomic policy
framework that had lowered inflation and narrowed fiscal deficits
prior to the coronavirus shock, and a record of multilateral
support. These strengths are set against low external liquidity
relative to high financing needs associated with large sovereign
debt repayments, a vulnerable, albeit improving, banking sector,
and weak governance indicators. The coronavirus shock has at least
temporarily reversed Ukraine's improvements made in recent years in
terms of a declining debt burden, normalisation of growth prospects
after the 2014-2015 geopolitical and economic crises, and reduced
growth volatility.

Ukraine's new IMF programme has been designed to reduce financing
constraints and support a recovery in international reserves.
Ukraine received the first transche (USD2.1 billion) under a USD5
billion 18-month stand-by arrangement (SBA) for budget support in
June. The sovereign also issued a USD2 billion Eurobond in July.
Easing of external-financing constraints allowed the sovereign to
buy back external bonds maturing in 2021-2022 and to repurchase
close to 10% of its outstanding GDP warrants.

Fitch estimates that Ukraine has met close to 68% of its 2020
fiscal financing needs of USD23.5 billion (USD14.2 billion in
amortisations including debt prepayments). Fitch expects one
additional disbursement from the IMF SBA (USD0.7 billion) and the
first tranche of a new EUR1.2 billion loan in 2020. Available
domestic liquidity and government cash holdings provide room to
accommodate remaining financing requirements, which in turn are
dependent on the pace of expenditure implementation. Domestic
banks, most notably state-owned, have increased exposure to
government debt, as foreign investors have reduced their share of
domestic government bonds by about USD1.5 billion since February to
16% (not including National Bank of Ukraine, NBU, holdings).

International reserves rose to USD29 billion at the beginning of
September, due to central bank FX purchases (net USD1.2 billion YTD
in 2020) and external financing. Fitch expects international
reserves to finish 2020 at USD27.4 billion or 4.5 months of current
external payments (CXP), slightly above the projected 4.1 months
for the 'B' median. In its forecast for a gradual return of the
current account deficit and continued access to external financing,
reserve coverage will average 3.8 months of CXP in 2021-2022.
External liquidity, measured by the country's liquid external
assets-to-liquid external liabilities, will rise to 112% for 2021,
close to the 118% forecast for the 'B' median.

External financing needs have declined compared with previous years
(35% of international reserves) in spite of large debt repayments,
reflecting higher international reserves and a projected current
account surplus (2.5% of GDP) in 2020, due to fairly resilient
exports and remittances, sharp decline in imports and improved data
availability on reinvested earnings by foreign investors. External
financing needs will rise in 2021-2022 with the return to a current
account deficit (reaching 3.5% of GDP by 2022). External sovereign
amortisations (government plus NBU) will decline from USD6 billion
in 2020 but will remain large averaging USD4.3 billion in 2021-2022
(bond repayments of USD2 billion and USD1 billion, respectively).

Fitch considers that continued engagement with the IMF is key for
Ukraine to maintain access to external financing. However, the IMF
SBA implementation risks are significant given Ukraine's poor
record from previous programmes and potential judicial rulings and
legislative initiatives that lead to reform reversals. In Fitch's
view, unexpected and frequent cabinet changes early in the year,
especially those related to key economic positions such as the
Minister of Finance, and political pressure on NBU, leading to the
governor's resignation in July, create policy uncertainty. In
addition to eroding hard-earned policy credibility, reduced central
bank independence could lead to reversal in the improvements in
macroeconomic and financial-sector stability, constrain access to
external financing and increase Ukraine's vulnerability to shocks.

Inflationary pressures remain subdued (2.4% yoy in July; core 3%),
but inflation is expected to approach the 5% NBU target by end-2020
due to higher energy and food prices as well as recovering domestic
demand. Fitch expects inflation to average 5.3% in 2021 and 5.7% in
2022, above the forecast 4.4% and 4.8% 'B' medians. The NBU cut
policy rates to a record low 6% in June (750bp in 1H20) in response
to the pandemic, but further easing could be constrained, in
Fitch's view, by rising inflationary pressures and the proposal of
a significant minimum wage increase in 2021.

Fitch maintains its April forecast that the economy will contract
6.5% in 2020. The economy reportedly contracted 11.4% in 2Q20.
Improving retail sales, industrial production and construction
reflect reviving consumption and investment, while faster
expenditure implementation in 2H20 and lower interest rates will
support recovery. Fitch expects growth to reach 3.8% and 3.5%,
respectively, in 2021 and 2022, in line with its medium-term
forecasts for Ukraine. However, downside risks to its forecasts
remain, given uncertainty around the extent and duration of the
coronavirus outbreak, and the duration or re-introduction of
restrictions, especially given the reported uptick in coronavirus
cases in Ukraine.

Fitch forecasts the general government deficit to reach 6.5% of GDP
in 2020, below the projected 7.7% under the IMF SBA and 7.3% 'B'
median. Large dividend payments from state-owned companies (1.8% of
GDP), and recovering tax collection (except for import-related
taxes) have supported government revenues, while expenditure growth
remains moderate YTD and concentrated in social transfers and
health spending. Fitch forecasts fiscal consolidation to proceed at
a gradual pace, with the general government deficit shrinking to
5.4% of GDP in 2021 and 4.2% in 2022. Although the government has
indicated they intend to pursue expenditure initiatives to support
growth such as the proposed minimum wage increase (up to 30% in
2021), the actual pace of fiscal consolidation will depend on
continued engagement with the IMF and available financing.

General government debt will increase to 57.4% of GDP (65.1%
including guarantees) and 60% by 2022, from 44.4% (50.4% with
guarantees) in 2019 and close to the forecast 65.3% 'B' median.
Fitch forecasts that Ukraine general government debt will stabilise
at around 60% in 2022-2023 and decline gradually thereafter with
the return of primary surpluses. Risks to the debt dynamics stem
from a weaker exchange rate (64% foreign currency-denominated
debt), lower-than-expected growth or failure to narrow the fiscal
deficit.

Improved supervision and capitalisation levels and NBU's liquidity
support have reduced risks to financial stability. Although NPLs
have declined slightly to a still high 48% (96.8% covered by
provisions) in July, the weaker macroeconomic outlook will likely
lead to asset-quality deterioration, thus increasing the risk of
additional fiscal costs in capitalisation requirements for
state-owned banks (59% of total system assets). The government has
approved the strategy to reduce NPLs through write-offs, which
could support progress in reducing the NPL overhang. Deposit- (41%)
and loan- (41%) dollarisation remains high and some of the recent
progress could be reversed in the short term.

The government under President Zelensky remains popular but its
political position has weakened somewhat, especially in the Rada,
as resistance to reform from vested interests and oligarchs has not
only delayed and weakened reform legislation, but also now
threatens to undermine approved reforms such as the strengthened
bank resolution framework and the anti-corruption agenda.

In Fitch's view, President Zelensky remains committed to achieving
a resolution to the conflict with Russia. Although both countries
have engaged in prisoner exchanges and ceasefire agreements, Fitch
does not anticipate a near-term resolution to the Russian-Ukrainian
conflict.

ESG - Governance: Ukraine has an ESG Relevance Score (RS) of 5 for
both Political Stability and Rights and for the Rule of Law,
Institutional and Regulatory Quality and Control of Corruption, as
is the case for all sovereigns. These scores reflect the high
weight that the World Bank Governance Indicators (WBGI) have in its
proprietary Sovereign Rating Model (SRM). Ukraine has a low WBGI
ranking at 29%, reflecting the conflict with Russia in the east of
Ukraine, weak institutional capacity, uneven application of the
rule of law and a high level of corruption.

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

Fitch's proprietary SRM assigns Ukraine a score equivalent to a
rating of 'B' on the LTFC IDR scale.

Fitch's sovereign rating committee did not adjust the output from
the SRM to arrive at the final LTFC IDR.

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

RATING SENSITIVITIES

The main factors that could, individually or collectively, lead to
positive rating action/upgrade are:

  -  Public Finances: General government debt/GDP returning to a
firm downward path over the medium term, for example due to
post-coronavirus fiscal consolidation

  - External Finances: Reduction in external financial
vulnerabilities, for example due to a sustained increase in
international reserves, strengthened external balance sheet and
greater financing flexibility.

  - Macro and Structural: Increased confidence that progress in
reforms will lead to improvement in governance standards and higher
growth prospects while preserving improvements in macroeconomic
stability.

The main factors that could, individually or collectively, lead to
negative rating action/downgrade:

  - Macro and External Finances: Increased external financing
pressures, sharp decline in international reserves or increased
macroeconomic instability, for example stemming from extended
delays in the disbursements from the IMF programme due to
deterioration in the consistency of the policy mix and/or reform
reversals.

  - Public Finances: Persistent increase in general government
debt, for example due to a more pronounced and longer period of
fiscal loosening, economic contraction or currency depreciation.

  - Structural: Political/geopolitical shocks that weaken
macroeconomic stability, growth prospects and Ukraine's fiscal and
external position.

KEY ASSUMPTIONS

Fitch does not expect resolution of the conflict in eastern Ukraine
or escalation of the conflict to the point of compromising overall
macroeconomic performance.

Fitch assumes that the debt dispute with Russia will not impair
Ukraine's ability to access external financing and to meet external
debt service commitments.

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

Ukraine has an ESG Relevance Score of 5 for Political Stability and
Rights as WBGI have the highest weight in Fitch's SRM and are
highly relevant to the rating and a key rating driver with a high
weight. A major escalation of the conflict in the east of Ukraine
represents a risk.

Ukraine has an ESG Relevance Score of 5 for Rule of Law,
Institutional & Regulatory Quality and Control of Corruption as
WBGI have the highest weight in Fitch's SRM and in the case of
Ukraine weaken the business environment and investment prospects;
this is highly relevant to the rating and a key rating driver with
high weight.

Ukraine has an ESG Relevance Score of 4 for Human Rights and
Political Freedoms as the Voice and Accountability pillar of the
WBGI is relevant to the rating and a rating driver.

Ukraine has an ESG Relevance Score of 4 for Creditor Rights as
willingness to service and repay debt is relevant to the rating and
is a rating driver for Ukraine, as for all sovereigns.

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 to the way in which they are being
managed by the entity.



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

CABOT FINANCIAL: S&P Affirms BB- Issuer Rating, Outlook to Stable
-----------------------------------------------------------------
S&P Global Ratings revised the outlook on Cabot Financial Ltd. to
stable from negative and affirmed its long-term issuer and issue
ratings at 'BB-'. The '3' recovery rating on the issue ratings is
unchanged, indicating recovery prospects of approximately 65% in
the event of a default.

The outlook revision on Cabot Financial Ltd. follows Encore Capital
Group's announcement that it initiated a process aimed at combining
the balance sheets of its two primary operating units, Midland
Credit Management (MCM) in the U.S. and Cabot Credit Management in
the U.K. S&P said, "We see the consolidated group as benefitting
from enhanced global diversification, including a leading market
position in the U.S., and better credit metrics relative to Cabot
on a stand-alone basis. As a result, we now see Cabot as better
positioned to absorb any major negative impact stemming from the
COVID-19 macroeconomic shock."

S&P said, "We estimate that Encore's consolidated debt to EBITDA
could fall between 2x and 3x in 2020 and 2021 (5x-6x without
considering the add-back for principal amortization), while its
EBITDA interest coverage could move between 7x and 8x in 2021
(around 3x without considering the add-back for principal
amortization). These estimates support stronger consolidated credit
metrics than what we expected for Cabot on a stand-alone basis for
the same periods.

"We believe that Encore has performed well in the year-to-date
period and is likely to continue to perform well in the second half
of 2020 and in 2021. Alongside the transaction announcement, Encore
provided an updated view on its global collection activity, which
further supports our view."

Specifically, Encore's global cash collections were at 100% of the
company's estimated remaining collections (ERC) forecast for the
period based on pre-COVID-19 forecasts, with the U.S. showing
outperformance, the U.K. showing modest underperformance (94% of
the company's ERC forecast) and other European exposures (which
comprise very modest amounts of ERC) showing more material
underperformance (67% of the company's ERC forecast).

Together with the transaction, Encore launched a consent
solicitation to amend the terms of the existing Cabot-issued senior
secured notes, for Encore and its main subsidiaries to become
guarantors of the same, and for Encore to become the parent of the
new restricted group. Although still ongoing, S&P assumes that the
consent solicitation--which only requires a majority of Cabot
noteholders to consent--is likely to be successful, thus leading to
several capital structure changes at both Cabot and the Encore
group level. In particular, these include:

-- The pay down of the existing Cabot $203 million revolver;

-- Entry into an amended $1.05 billion multicurrency super senior
secured revolver that will support both MCM and Cabot; and

-- Entry into a $300 million stretch super senior secured facility
at Encore Capital Group. S&P assumes that the group will likely pay
down the stretch facility in the near term, using the proceeds from
new secured financing, which it expects will rank pari passu with
the existing Cabot GBP513 million 2023 and EUR400 million 2024
senior secured notes.

S&P said, "We calculate that the consolidated group will have
approximately $470 million of liquidity post-transaction, composed
of excess revolver capacity and cash on hand. We also see Encore as
very cash generative, although historically it has reinvested a
significant portion of its cash flow back into receivables
purchases. These two factors underpin the liquidity of the
consolidated group. Further, pro forma for the transaction, the
consolidated company will have relatively modest maturities and
amortization requirements over the next several years. The company
does not pay a dividend, choosing instead to reinvest its earnings,
which should help lead to tangible equity growth over the next few
years.

"As a result of this transaction, we are assigning a core strategic
status to Cabot and its funding vehicles. This reflects the
proposed security and guarantee changes as part of the funding
structure consolidation. Under the new structure, the consolidated
company's secured debt will be secured by one global pool of assets
and Cabot's debt obligations will be guaranteed by Encore and all
its material subsidiaries and vice versa. Our core status also
reflects Cabot's strategic importance to Encore from a business
perspective and Encore's 100% ownership of Cabot.

"The stable outlook reflects our view that Cabot will continue to
play a key role within the Encore group, as we expect the U.K. and
European markets to remain an important pillar of the group's
consolidated strategy. In addition, we expect the group's business
to remain resilient, despite the challenging economic conditions,
and for the company to be able to maintain leverage and interest
coverage (both unadjusted for principal amortization) of 5x-6x and
close to 3x, respectively, in 2021. It also reflects our
expectation for the group to begin to build greater positive
tangible equity off of a low base.

"We could lower our rating on Cabot if our view of its position
within the Encore group falters. We could also lower our rating on
Cabot if consolidated interest coverage falls below 2x (without the
add-back for principal amortization) on a sustained basis or if we
believe regulatory or competitive dynamics have shifted such that
we view the consolidated company as more weakly positioned from a
business perspective.

"We could raise our ratings on Cabot over the next 12 months if we
believe consolidated debt to EBITDA (without the add-back for
principal amortization) will fall below 5x and interest coverage
will rise above 3x on a sustained basis. An upgrade would also be
contingent upon the consolidated company maintaining its current
competitive standing and regulatory risks remaining relatively low,
in our view."

As a result of the transaction, all covenant performance will be
measured against the restricted group, consisting of all
subsidiaries of Encore. S&P believes the group will maintain solid
cushion on all of its covenants in 2020 and 2021.

The group's new maintenance covenants will include:

-- A loan-to-value (LTV) ratio (essentially net debt to 84-month
ERC) of less than 75%: approximately 46% pro forma for the
transaction).

-- SSRCF ratio (essentially net super senior debt to 84-month ERC)
of less than 27.5%.

-- Fixed-charge ratio (essentially EBITDA with principal
amortization to fixed charges) expected to be close to 8x at
closing.

-- S&P's simulated scenario assumes a payment default in 2024,
arising from operational issues that lead to financial pressures.

-- S&P said, "We assume that in a default scenario, creditors
would seek to liquidate the firm's assets to achieve a recovery.
Given this, we assume a substantial amount of the company's value
in a default comes from the group's consolidated receivables
portfolio, which we have valued using a discrete asset valuation
approach."

-- S&P also assumes that a relatively small amount of value is
recoverable form the firm's servicing business, which it has valued
using an EBITDA multiple approach.

-- S&P assumes the consent solicitation is successful and the
company's post-transaction capital structure is put in place as
proposed, including new secured financing that is pari passu with
the existing Cabot-issued senior secured notes.

-- Under the discrete asset valuation approach, S&P adjusts the
current consolidated balance sheet receivables balance for future
assumed purchases and then apply a 25% haircut to the resulting
balance.

-- S&P also stresses an estimated EBITDA derived from the firm's
servicing business and then apply a 5x multiple to value that
business.

-- S&P backs out the amount of collateral securing Cabot's
securitization facility as of June 30 before doing our waterfall
analysis, given it does not view this collateral as available for
super senior or senior secured debtholders.

-- S&P assumes the company has drawn substantial amounts on its
revolver at default but uses a portion of these incremental draws
(versus what will be outstanding post-transaction) to finance
additional receivable purchases.

-- Discrete asset valuation of receivables portfolio (excluding
securitization collateral): $2.1 billion

-- Recoverable value from servicing business: $64 million

-- Total combined recoverable value after 5% administrative costs:
$2.1 billion

-- Super senior secured debt (including existing Encore senior
secured notes and the new global revolver) at default: $1.04
billion

-- Remaining value available to senior secured noteholders: $1.0
billion

-- Senior secured debt at default (including the existing
Cabot-issued senior secured notes and the assumed new secured
financing): $1.4 billion

  --Resulting recovery: 50%-70% (rounded estimate: 65%)

*All debt amounts include six months of prepetition interest.


CANTERBURY FINANCE NO. 3: S&P Puts BB+ (sf) Rating on F-Dfrd Notes
------------------------------------------------------------------
S&P Global Ratings has assigned credit ratings to Canterbury
Finance No. 3 PLC's class A1 and A2 notes and class B-Dfrd to
X-Dfrd interest deferrable notes.

Canterbury Finance No. 3 is a static RMBS transaction that
securitizes a portfolio of BTL mortgage loans secured on properties
in the U.K. OneSavings Bank PLC originated the loans in the pool.

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

The transaction will feature a general reserve fund and a liquidity
reserve fund to provide liquidity in the transaction.

Credit enhancement for the rated notes comprises subordination from
the closing date, the general reserve fund, and
overcollateralization following the step-up date, which will result
from the release of the excess amount from the revenue priority of
payments to the principal priority of payments. Also, after the
step-up date, any excess funds released from the liquidity reserve
will be part of the principal priority of payments.

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

  Ratings List

  Class      Rating*    Class size (% of collateral)
  A1         AAA (sf)     57.50
  A2         AAA (sf)     24.50
  B-Dfrd     AA+ (sf)      5.00
  C-Dfrd     A+ (sf)       4.50
  D-Dfrd     A- (sf)       2.50
  E-Dfrd     BBB+ (sf)     2.50
  F-Dfrd     BB+ (sf)      3.50
  X-Dfrd     BB+ (sf)      4.00
  Residual   NR

  *NR--Not rated.


CANTERBURY FINANCE: Fitch Gives BBsf Rating to Class X Debt
-----------------------------------------------------------
Fitch Ratings has assigned final ratings to Canterbury Finance No.3
PLC.

RATING ACTIONS

Canterbury Finance No.3 PLC

Class A1 XS2198900875; LT AAAsf New Rating; previously  

Class A2 XS2198900958; LT AAAsf New Rating; previously  

Class B XS2198901170; LT AA-sf New Rating; previously  

Class C XS2198901253; LT Asf New Rating; previously  

Class D XS2198901337; LT BBBsf New Rating; previously  

Class E XS2198901501; LT BBsf New Rating; previously  

Class F XS2198901840; LT B+sf New Rating; previously  

Class X XS2198901923; LT BBsf New Rating; previously  

TRANSACTION SUMMARY

Canterbury Finance No.3 PLC is a static securitisation of
buy-to-let (BTL) mortgages originated by OneSavings Bank PLC (OSB),
trading under its Kent Reliance brand, in England and Wales. The
loans are serviced by OSB via its UK-based staff and offshore team.
This transaction is OSB's third securitisation of its Kent Reliance
originations.

KEY RATING DRIVERS

Positive Selection: The pool consists of UK BTL mortgage loans
advanced to borrowers with no adverse credit history. This is more
stringent than the adverse credit history generally accepted by
OSB. All loans have full rental income certification, a full
property valuation and are underwritten by a robust lending policy.
The pool contains Kent Reliance's post-2017 origination.

Specialist Products:  The pool includes a high proportion of OSB's
"specialist" BTL products (68.4%). About 18.8% of the pool contains
loans secured against house in multiple occupation (HMO)
properties, which may also include first-time landlords. OSB's BTL
book performance has also been weaker than peers. Although there
are elements of positive selection, Fitch believes the performance
of the wider book may be indicative of future transaction
performance.

The combination of these factors has resulted in Fitch applying an
originator adjustment of 1.2x.

Coronavirus-related Alternative Assumptions: Fitch expects a
generalised weakening in borrowers' ability to keep up with
mortgage payments due to the economic impact of the coronavirus
pandemic and related containment measures. As a result, Fitch
applied coronavirus assumptions to the mortgage portfolios.

The combined application of revised 'Bsf' representative pool
weighted average foreclosure frequency (WAFF), revised rating
multiples and arrears adjustment resulted in a multiple to the
current FF assumptions of about 1.26x at 'Bsf' and 1.01x at
'AAAsf'. The updated assumptions are more modest for higher rating
levels as the corresponding rating assumptions are already meant to
withstand more severe shocks.

Fitch also applied a payment holiday stress for the first six
months of projected collections, assuming 10% of interest
collections will be lost and related principal receipts delayed.
This reflects the current payment holiday percentage data provided
by the servicer plus a small margin of safety. At end-July 2020 is
6.25% of the loans in the pool were on a payment holiday.

Class X Note Sensitivities: Prior to the optional redemption date,
all excess spread will be used to make payments of interest and
principal on the class X notes. The model-implied rating of the
excess spread notes is highly sensitive to cash flow modelling
assumptions, especially prepayment rates and asset yield profile.

Fitch conducted additional analysis to test the resilience of the
notes' ratings against coronavirus-related disruptions to the UK
economy. This resulted in Fitch assigning a rating one notch below
the model-implied rating in its cash flow analysis.

Borrower Affordability: The majority of the pool contains loans
advanced with an initial fixed period reverting to OSB's BTL
standard variable rate (SVR). OSB's SVR is currently 6.18%, higher
than peers', which typically average around 4.79%. Fitch's interest
coverage ratio (ICR) calculation assesses the post-reversion
interest payments using a stressed interest rate based on OSB's
SVR. This pool has a WA ICR of 82.5% which is lower than many
Fitch-rated BTL transactions due to OSB's higher SVR.

RATING SENSITIVITIES

Downgrade Rating Sensitivity to Coronavirus-Related Stresses

Due to the coronavirus pandemic, the broader global economy remains
under stress, with surging unemployment and pressure on businesses
stemming from social-distancing guidelines. Recent government
measures related to the coronavirus pandemic allow for mortgage
payment holidays of up to six months. Fitch acknowledges the
uncertainty of the path of coronavirus-related containment measures
and has therefore considered more severe economic scenarios.

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 the WAFF
and a 15% decrease in the WA recovery rate (RR). The results
indicate a maximum of three-notch impact on the notes.

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

The transaction's performance may be affected by adverse changes in
market conditions and economic environment. Weakening asset
performance is strongly correlated to increasing levels of
delinquencies and defaults that could reduce credit enhancement
(CE) available to the notes.

In addition, unanticipated declines in recoveries could result in
lower net proceeds, which may make certain notes susceptible to
negative rating action depending on the extent of the decline in
recoveries. Fitch conducts sensitivity analyses by stressing both a
transaction's base-case FF and RR assumptions. As a result, ratings
would deviate from the current ratings by up to five notches.

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

Stable to improved asset performance driven by stable delinquencies
and defaults would lead to increasing CE and potentially upgrades.
Fitch tested an additional rating sensitivity scenario by applying
a decrease in the WAFF of 15% and an increase in the WARR of 15%,
implying up to one-category upgrades of the junior notes.

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

Prior to 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.

At the time of the Canterbury Finance No.2 PLC transaction, Fitch
reviewed a small targeted sample of OSB'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. The loans in this portfolio were originated under the
same lending policies and procedures as those in Canterbury Finance
No.2 PLC.

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

The information was used in the analysis:

  - Loan-by-loan data provided by OSB on May 31, 2020.

  - Performance data provided by OSB on February 14, 2020.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

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

REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS

A description of the transaction's representations, warranties and
enforcement mechanisms (RW&Es) that are disclosed in the offering
document and which relate to the underlying asset pool is available
by clicking the link to the Appendix. The appendix also contains a
comparison of these RW&Es to those Fitch considers typical for the
asset class as detailed in the Special Report titled
'Representations, Warranties and Enforcement Mechanisms in Global
Structured Finance Transactions'.

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).

LONDON CAPITAL: Administrators Sue Thirteen People Over Fraud
-------------------------------------------------------------
Tabby Kinder at The Financial Times reports that thirteen people
including a former UK energy minister are being sued for GBP178
million in connection with an alleged fraud at London Capital &
Finance, where investors' cash is said to have been used to buy
horses, a helicopter and lifetime memberships to Annabel's, the
Mayfair private members' club.

According to the FT, the administrators of LCF, which went bankrupt
in February 2019, have told individuals linked to the collapsed
investment firm that they are the defendants in a lawsuit that will
claim LCF's purpose was to defraud bondholders.

Administrators at Smith & Williamson are trying to recover money
for the 11,600 investors who invested GBP237 million in LCF before
it failed in one of the UK's largest alleged frauds against retail
investors, the FT relates.

The administrators have claimed that LCF's directors induced
thousands of retail investors to buy bonds in the group by
purporting to invest in a series of companies and property deals,
the FT notes.  Instead, the administrators have claimed, nearly 60%
of all of the investors' cash--about GBP136 million--was channelled
to its executives either directly or via loans to companies they
controlled or were connected to, the FT states.

The investment company went bust in early 2019 after the Financial
Conduct Authority froze its bank accounts and said its marketing of
unregulated mini-bonds promising returns of up to 8% was
misleading, the FT recounts.

Administrators at Smith & Williamson said that bondholders would
get back just a quarter of the money they invested, the FT
discloses.

According to the FT, the new lawsuit brought by the administrators
alleges that 10 of the 13 individual defendants "misappropriated"
bondholders' money.  Five of the 13 individual defendants are
accused of failing to take sufficient steps to discover the alleged
fraud in their role as directors of LCF-linked companies, the FT
states.


MABEL MEZZCO: Moody's Confirms B2 CFR, Outlook Negative
-------------------------------------------------------
Moody's Investors Service confirmed the B2 corporate family rating
(CFR) and B2-PD probability of default rating (PDR) of Mabel Mezzco
Limited (Wagamama or the company). Concurrently, the rating agency
has confirmed the B2 rating of the GBP225 million backed senior
secured notes issued by the company's subsidiary Wagamama Finance
plc. The outlook has been changed to negative from ratings under
review.

The rating action concludes the review for downgrade initiated on
March 31, 2020.

RATINGS RATIONALE

Moody's expects that Wagamama's revenues, and in turn
profitability, can gradually return towards pre crisis levels in
the months ahead after the reopening of most of its estate
following the UK government's decision in early July to lift the
mandatory closure of all pubs and restaurants in England imposed on
March 20 as part of its efforts to control the spread of the
Coronavirus.

The company's position as the key growth brand of its publicly
listed parent, The Restaurant Group plc (TRG), is credit positive.
Since the start of the crisis TRG has taken a number of actions to
ensure that its key operating subsidiaries maintained adequate
liquidity, including raising fresh equity and obtaining additional
flexibility in banking facilities. TRG stated early in the closure
period that cash burn at the group level was limited to only around
GBP3 million per four-week period.

Prior to the Covid-19 crisis Wagamama had a multi-year track record
of outperforming the like-for-like revenue growth of peers, and
generating increased profits. The company also had a growing
delivery and collections business, which Moody's expects to have
performed strongly during the period that restaurants were forced
to stay closed.

Moody's believes the strength of the brand pre-crisis positions
Wagamama well to sustain the recovery seen across the industry
since restaurants have been allowed to re-open, which was boosted
in August by the government's Eat Out to Help Out scheme. While
that support scheme has now ended, other government support
measures will continue to apply for several months. These include
the business rates holiday until March 2021, a lower VAT rate until
January, and the staff furlough scheme which is currently due to
run until October. In addition, Wagamama has taken steps to manage
its cost base during these challenging times by cutting
discretionary capital spending, rationalising head office expenses,
and engaging with suppliers and landlords.

Notwithstanding the strength of Wagamama relative to peers the
prospects for the UK restaurant industry in the months ahead remain
highly uncertain because of the continuing possibility of a rise in
Covid infection rates. Consumer confidence in eating out could yet
take a hit in these circumstances, local lockdowns could become
widespread, and ultimately the risk of a second nationwide closure
of the hospitality sector cannot at this stage be ruled out.

LIQUIDITY

Moody's believes that the company's actions and access to
government support schemes will have limited cash burn during its
forced closure period. In addition to the actions taken by the
company's parent to sustain group level liquidity the rating agency
notes that Wagamama's super senior revolving credit facility (RCF)
lender agreed to increase that facility to GBP35 million from GBP20
million. At the end of March, Wagamama had drawings of GBP18.6
million under the RCF and GBP24.9 million cash on its balance
sheet.

Now that Wagamama has been able to open restaurants that it expects
to make a positive contribution to cash flow Moody's expects the
company will maintain adequate liquidity in the months ahead.
However, the rating agency believes the company will ideally want
to address the looming December 2021 and June 2022 maturities of
the RCF and senior secured notes respectively as soon as practical
during 2021.

ENVIRONMENTAL, SOCIAL & GOVERNANCE CONSIDERATIONS

Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety. In terms of governance the rating agency positively
recognises that TRG has a publicly communicated goal of reducing
its consolidated debt and leverage levels, which were -- before the
coronavirus crisis -- already modest relative to quoted peers.

RATIONALE FOR NEGATIVE OUTLOOK

The negative outlook reflects risks that profitability and credit
metrics during the next six to nine months may not recover towards
pre crisis levels at a pace that will facilitate a full refinancing
of the company's debt within that timeframe.

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

Upward pressure in the short to medium term is unlikely and it is
Moody's belief that TRG will most likely look to refinance the
senior secured notes of Wagamama Finance plc with debt that can be
supported by all of its operating subsidiaries.

Conversely, downward pressure on the rating could arise if trading
conditions and performance do not continue to gradually improve in
the months ahead, which would have negative implications for the
company's liquidity and the ability of it, or TRG, to successfully
refinance its debt in a timely and cost-effective manner.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Restaurant
Industry published in January 2018.

COMPANY PROFILE

Wagamama is the UK's only company of scale offering pan-Asian
cuisine in the branded restaurant industry. As of March 2020, it
operated 151 sites in the UK, as well as more than 50 international
sites through a franchise model and six sites in the US, operated
under a joint venture.

In the twelve months ended March 29, 2020 the company reported
EBITDA of GBP59 million. TRG acquired Wagamama in December 2018 in
a transaction valuing the business at GBP559 million.

PIZZA EXPRESS: To Close 73 Restaurants Following CVA Approval
-------------------------------------------------------------
Hannah Uttley and Ben Gartside at The Telegraph report that Pizza
Express will shut 73 restaurants, putting 1,100 jobs at risk after
landlords backed a restructuring bid to rescue the struggling
chain.

According to The Telegraph, the firm will close poorly performing
outlets following the approval of a company voluntary arrangement
(CVA) deal by 89% of creditors in a vote on Sept. 7.  This included
63% of landlords, above the 50% approval threshold needed, The
Telegraph notes.

As well as allowing Pizza Express to close 73 of its 449 UK sites,
the deal also means that its rental bills will be paid every month
rather than quarterly, The Telegraph states.

Pizza Express has said the coronavirus crisis caused serious
disruption to sales as lockdown shut its restaurants and then left
the public too fearful to return in previous numbers, forcing
bosses to take emergency action to protect the company's future,
The Telegraph relates.

The 55-year-old chain's Chinese owner Hony Capital has now put the
majority of the business up for sale, with plans to retain
ownership of its mainland China division, The Telegraph discloses.

Pizza Express, as cited by The Telegraph, said the CVA will secure
9,000 jobs in the UK, with roles affected by the closures being
moved to other sites where possible.  Pizza Express has reopened
355 UK restaurants since lockdown restrictions were eased in July,
and more than 30 further sites are scheduled to start up again in
coming weeks, The Telegraph relays.

Matthew Padian, of insolvency firm Stevens and Bolton, said that
the CVA has bought Pizza Express more time, The Telegraph notes.

According to The Telegraph, Mr. Padian said: "Passing the vote
through before the moratorium on landlord forfeiture action expires
at the end of this month will be a relief.

"However, a CVA is by no means a complete remedy for financial
difficulties.  Pizza Express isn't out of the woods yet.

"In the short term, there's the risk that a disgruntled CVA
creditor may challenge the CVA, either on the grounds of unfair
prejudice or material irregularity.  That said, if the company has
done its homework, the likelihood of any such challenge may be
small and any which is made will likely be disposed of in the
ordinary course."


RHINO: Two Deloitte Partners Sued for Mishandling Administration
----------------------------------------------------------------
Rachel Millard at The Telegraph reports that two Deloitte partners
face a GBP19 million High Court claim by a business owner who
alleges they mishandled his company's administration due to their
"close relationship" with Barclays.

According to The Telegraph, Jason Schofield, who owned and ran
storage business Rhino Enterprises, says Matthew David Smith and
Clare Boardman failed to pursue a mis-selling claim against the
bank after it appointed them as administrators in 2013.

He is to proceed with his claim after a judge said the
administrators were not protected from litigation under a release
clause connected to a company voluntary arrangement (CVA)
restructuring of the business, The Telegraph relates.

Paving the way for him to sue the partners, Judge Simon Barker QC,
as cited by The Telegraph, said at the High Court on Sept. 4 he
agreed with Mr. Schofield's lawyer that the use of a CVA in such a
way risked being "improper" and could have far-reaching
consequences.

Rhino banked with Barclays from 2007, but in 2013 accused it of
interest rate swap mis-selling, disputed by Barclays, The Telegraph
discloses.  Later that year, Barclays appointed Smith and Boardman
as administrators after asking for repayments of GBP20.9 million,
The Telegraph recounts.

Mr. Schofield accuses the pair of wrongly accepting Barclays was
entitled to the money, and selling company properties to pay back
Barclays, The Telegraph relates.  He says they should not have
accepted the appointment and then acted in breach of duty because
their "close relationship with Barclays disabled them from
exercising sufficient independence", The Telegraph notes.

According to The Telegraph, Mr. Schofield says in court papers he
proceeded with his claim against Barclays for matters including
swap mis-selling and it was settled confidentially in 2015.

The administrators plan to defend the proceedings by arguing they
"acted independently and took appropriate independent legal
advice," The Telegraph relays, citing papers filed by Mr.
Schofield.


SAGA PLC: Moody's Affirms B1 CFR, Outlook Neg.
----------------------------------------------
Moody's Investors Service affirmed Saga Plc's corporate family
rating (CFR) and backed senior unsecured debt ratings at B1, and
the probability of default rating at B1-PD. The outlook remains
negative.

The rating action follows Saga's announcement on September 1, 2020
of its plans to raise up to GBP150 million in additional equity
capital to strengthen its balance sheet and improve liquidity. The
group expects to launch the proposed equity raise on or around 10
September 2020, with its finalisation subject to regulatory and
shareholder approval.

RATINGS RATIONALE

The ratings have been affirmed at B1 to reflect the improved
balance sheet strength and moderately lower leverage that is
expected upon finalisation of the proposed equity capital raise.
The expected improved balance sheet position will allow Saga to
withstand a more prolonged travel suspension, alleviating immediate
pressure on the group's compliance with lender covenants, and
supporting liquidity. Nevertheless, Moody's expects Saga's
profitability and debt leverage to remain under pressure until the
group is able to sustainably resume its cruise and travel
operations.

The negative outlook therefore reflects the still significant
uncertainty around the timeline for resuming travel and cruise
operations, which is largely dependent on the evolution of the
virus and the UK Government's ongoing response. Notwithstanding the
positive impact of the proposed capital raise, a prolonged
suspension of cruise and travel operations would cause the group's
compliance with the amended lender covenants to come under pressure
as the covenant levels become more restrictive over time, and also
contribute to the group's ability to repay or refinance upcoming
debt maturities becoming increasingly stretched the longer the
suspension continues.

However, as evidenced by the proposed capital raise, these concerns
are somewhat alleviated by Saga's strong franchise, as demonstrated
by ongoing customer demand for its products and services, and good
underlying profitability of its insurance division, which should
incentivize lenders' and investors' ongoing support for the group.

Saga's ratings are supported by the group's well established and
highly trusted affinity brand, diversified business profile that
includes insurance broking and underwriting, travel and cruise
operations catering to the over 50's in the United Kingdom,
historically solid underlying EBITDA and net profit margin, which
Moody's expects to remain healthy with regards to the insurance
operations but to be significantly reduced at the group level over
the next two years due to the coronavirus-related disruption to its
travel and cruise businesses. These strengths are offset by the
deterioration in Saga's profitability and debt leverage as a result
of the ongoing suspension of its travel and cruise operations.
While net debt leverage excluding the secured ship debt will
improve meaningfully as a result of the proposed capital raise,
Moody's expects total leverage, including the secured ship debt, to
remain elevated until travel and cruise operations fully resume.

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

Moody's says the following factors would likely lead to a downgrade
of Saga's ratings: (i) shareholders' rejecting the proposed equity
raise absent a credible alternative plan to raise equity capital,
(ii) indications that suspension of the group's cruise and tour
operations will extend meaningfully into the second half of 2021 or
of the group being likely to breach its debt covenants, (iii)
indications that Debt-to-EBITDA leverage (Moody's calculation,
including ship debt) will remain above 6x beyond fiscal year-end
2022, (iv) deterioration in profitability of Saga's insurance
operations.

Given the negative outlook, there is limited likelihood of an
upgrade to Saga's ratings at this stage, however the rating could
be stabilized in the event of Saga being able to resume tour and
cruise operations on a sustainable basis during 2021, or the group
taking additional steps to improve its financial flexibility.
Moody's added that a faster than expected return to profitability
of its travel and cruise operations would result in upward pressure
on the rating.

The principal methodology used in these ratings was Insurance
Brokers and Service Companies published in June 2018.

THG OPERATIONS: Fitch Places B+ LT IDR on Watch Positive
--------------------------------------------------------
Fitch Ratings has placed THG Operations Holding Limited's (THG)
Long-Term Issuer Default Rating (IDR) of 'B+' and the senior
secured instrument rating of 'BB-' on Rating Watch Positive (RWP).

The RWP follows the announcement of THG's intention to list on the
London Stock Exchange. The equity offering will include newly
issued shares with an expected value around GBP920 million. Fitch
understands that some of these proceeds will fund earmarked (and/or
future) acquisitions enhancing the already strong organic
deleveraging capability.

There is no formulated financial policy in place yet, but the IPO
provides the opportunity to establish leverage metrics more
commensurate with the 'BB' category. THG may also consider a
resizing or refinancing of the current senior facilities, providing
further financial flexibility with enhanced interest cover, and
diversified sources of funding.

Fitch will resolve the RWP upon the outcome of the IPO, and further
articulation from THG regarding its acquisition strategy and
financial policy. This will determine the IDR trajectory after the
IPO. At this stage Fitch would expect either an affirmation at 'B+'
(probably on a Positive Outlook) or an upgrade of one notch to
'BB-'.

KEY RATING DRIVERS

Opportunity to Accelerate Deleveraging: The IPO proceeds could fund
value accretive acquisitions without incurring further debt,
complementing the high organic growth of the current portfolio of
products and services in the near term. Funds from operations (FFO)
leverage could move below 4.5x and FFO interest cover above 4.0x by
2021 under its initial estimates. This would exceed its current
sensitivities for an upgrade. IPO proceeds could be used to
accelerate deleveraging through the resizing of the current senior
secured facilities; however, details on the future financial policy
are still unknown.

THG's high sales growth and stable margins had led to a strong
ability to deleverage organically from around 7.0x in 2019 on an
FFO leverage basis, considered high for the current 'B+' IDR, to
4.5x by 2023.

Strong Growth in 1H20 to Continue: THG's business model has
captured consumers transitioning to online channels, a process that
has markedly accelerated in lockdown, and benefited from supportive
global demand trends for beauty and wellbeing products. Revenues
relative to 1H19 have increased 36%, and Fitch expects revenue
year-on-year growth in 2020 to remain strong given seasonality of
sales in 4Q.

EBITDA to Improve: Profitability in 1H20 has been subject to
significant exceptional items, reflected in various EBITDA
add-backs. Some were charitable donations during the UK's lockdown,
but a large portion related to elevated air-freight charges
incurred in a period of low global air traffic.

A permanent increase in the cost of air freight could challenge
THG's margins in the near term as its websites seek to serve a
global audience; for example, 38% of THG nutrition revenues were
generated in Asia-Pacific in 2019. However, Fitch expects greater
operating leverage to compensate for potentially still high
logistics costs, leading to a broadly stable EBITDA margin in
2021.

Increased M&A Expected: M&A is not a prerequisite for future
growth, although Fitch expects management will look to continue to
add new brands to its portfolio. The IPO proceeds will provide
scope for transformative M&A activity if the right opportunities
arise; nevertheless, Fitch expects the acquisitive strategy to
remain focused on add-ons to enhance the business model around
existing capabilities, rather than transform it, resulting in
manageable integration risks.

Established Business Model: THG's established position in the
beauty (Lookfantastic.com) and wellbeing (Myprotein) consumer
markets supports its view of a robust business model, underpinned
by moderate geographic diversification and increasing penetration
of markets outside the UK and Europe.

The group's end-to-end supply chain reaches a global online
audience via the "Ingenuity" platform, which is available to third
parties, including global FMCG groups providing tailored
direct-to-consumer (D2C) solutions, with high levels of customer
retention indicating THG's strong in-house capabilities. This is a
key point of difference as the pandemic has shifted retailers'
focus to the digital side of their businesses.

Retail Enabled by Technology: THG's in-house "Ingenuity" platform
and owned infrastructure represent a high barrier to new entrants,
only matched partly by Amazon.com, Inc. However, THG operates in
higher-end segments, where brands are careful to curate their
image, and in how they reach consumers, compared with Amazon's
"mass" positioning.

DERIVATION SUMMARY

Fitch rates THG according to its global rating navigator framework
for consumer product companies. Fitch recognises THG's retailing
and business service offerings, but the group's business model is
underpinned by an end-to-end supply chain that aligns its business
model most closely with Fitch's consumer framework.

THG's 'B+'/RWP rating compares well with direct (via
representatives) beauty sellers Oriflame Investment Holding Plc
(B/Stable) and Avon Products, Inc. (B+/Stable). Both Oriflame and
Avon's larger scale and envisaged positive free cash flow (FCF) are
balanced against THG's greater diversification of revenue streams
and online D2C channel, which is a direct challenge to
representative-led beauty seller business models.

THG's business model is better placed to capture the continuing
transition of consumers to online channels providing a stronger
ability deleverage, especially relative to Oriflame.

The one-notch difference between THG and Sunshine Luxembourg VII
SARL (B/Negative) - the vehicle used by EQT to acquire Nestle's
Skin Health Division - captures the delay in deleveraging away from
the high opening leverage (post carve-out) despite its
significantly larger product offering and scale relative to THG.
THG is rated higher than Anastasia Intermediate Holdings, LLC
(Anastasia Beverly Hills, CCC), which now sells its products on
THG's main beauty product website (Lookfantastic.com). Ongoing
deterioration in ABH's operating trends is embedded within the
'CCC' rating, reflecting an unsustainable capital structure in
Fitch's opinion.

Non-food retailer The Very Group (B-/Stable) is rated is two
notches lower than THG due to its geographical concentration on the
UK market and the diluting effect of its Littlewoods operation
relative to its Very Brand, which experienced strong growth 1H20
due to its purely online operations complemented by solid in-house
consumer finance offering. THG's high levels of organic growth also
provide a stronger ability to deleverage.

THG's IDR at the same level as Ocado Group's PLC (B+/Stable)
despite stronger financial metrics, and given Ocado's accelerated
transition from a pure UK online food retailer to an international
technology and business services provider with a significant
portion of long-term contracted earnings, adding further scale and
diversification.

Both ratings also take into consideration that revenue growth will
be underpinned by the increasing preference of consumers to shop
online, there is greater exposure to the online retail channel,
including greater inventory risk, at THG. However, Ocado's rating
is heavily influenced by risks associated with the timely delivery
of technology to the company's retail partners wishing to develop
their online segment. This requires significant up-front capex,
which can delay profit breakeven to 2023.

KEY ASSUMPTIONS

  - High organic growth from the group's existing product portfolio
supplemented by acquired revenues, with a CAGR of around 25% for
2019-2023.

  - Fitch-adjusted EBITDA margin improving towards 8.5% by 2022
(7.4% in 2018).

  - Working capital outflow equivalent to about 2% sales reflecting
the ongoing growth in the business.

  - Capex at around 6.5% of annual sales.

  - Annual bolt-on, conservative, M&A spending (2021 onwards) of
GBP150 million a year. Fitch assumes purchased enterprise value
(EV)/EBITDA multiples of 10x with zero EBITDA recognised in the
year of acquisition, and then EBITDA evenly phased in over the
subsequent two years.

KEY RECOVERY RATINGS ASSUMPTIONS

  - The recovery analysis assumes that THG would be restructured as
a going concern rather than liquidated in a default.

  - THG's post-reorganisation, going-concern EBITDA reflects
Fitch's view of a sustainable EBITDA of GBP82.8 million, which is
about 35% below the 2020 Fitch forecast EBITDA of GBP127 million.
Fitch's high degree of visibility on near-term growth means Fitch
would increase the EBITDA discount as the group's business scale
grows to maintain the same post-restructuring EBITDA - this
excludes the impact from any EBITDA-accretive future acquisitions.
The stress on EBITDA would most likely result from operational
issues probably perpetuated by lower growth and weaker margins than
envisaged in the beauty and wellbeing divisions.

  - Fitch applies a distressed EV/EBITDA multiple of 5.5x to
calculate a going-concern EV, reflecting THG's established position
in both beauty and wellbeing D2C channels, underpinned by
internally developed intellectual property.

  - The multi-currency revolving credit facility (RCF) of GBP170
million equivalent (assumed fully drawn in a default) ranks pari
passu with the senior secured term loan totalling EUR600 million
(or GBP535 million equivalent), based on the payment waterfall.

  - The warehouse loan relating to the Polish distribution and
production facility (GBP35 million) that Fitch previously assumed
ranking senior to the claims of senior secured facilities in the
event of distress, was fully repaid on June 30, 2020 and therefore
is no longer part of the debt waterfall, based on the payment
waterfall.

Fitch's waterfall analysis, after deducting 10% for administrative
claims, generates a ranked recovery for the senior secured loans in
the 'RR3' band, indicating a 'BB-' instrument rating, one notch
above the IDR (one notch relative to the IDR to be maintained even
if the IDR is upgraded to 'BB' category). The waterfall analysis
output percentage on current metrics and assumptions is 58%,
slightly up from 57% reflecting the repayment of the Polish
warehouse facility.

RATING SENSITIVITIES

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

Greater business scale, diversity and maturity of the Ingenuity
platform across other brands and retail segments as reflected in
continuing double-digit sales growth and/or EBITDA margin
(Fitch-defined) sustainably above 10% reflecting solid organic
growth capabilities and successful integration of bolt-on
acquisitions

  - FFO gross leverage sustainably below 4.5x combined with FFO
interest coverage above 4.0x

  - Enhanced financial flexibility demonstrated by FCF margin
sustainably above 2%

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

  - More aggressive financial policy or operating underperformance
leading to a lack of deleveraging towards FFO gross leverage of
5.5x by 2021

  - FFO interest coverage below 2.0x for two consecutive years -
Increased competition and/or delay to or failure in conducting
bolt-on acquisition of brands leading to EBITDA margin
(Fitch-defined) sustainably below 7.5%

  - FCF margin consistently neutral to negative (below -2%) and
reliance on material amounts of the RCF beyond 2020

Factors that could, individually or collectively, lead to
affirmation (Stable Outlook):

  - IPO not proceeding according to plan, or evidence of less
aggressive financial policy (post-IPO) leading to FFO gross
leverage trending below 5.5x by 2021

  - FFO Interest coverage above 2.5x - Dynamic sales progression,
stable cost base and/or ability to conduct bolt-on acquisitions of
brands leading to EBITDA margin (Fitch-defined) remaining
sustainably above 8%

  - FCF margin trending towards break-even

ESG Considerations

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

LIQUIDITY AND DEBT STRUCTURE

Comfortable Liquidity: Fitch expects THG to continue operating with
cash on balance sheet equivalent to at least at 1.0x EBITDA at all
times during 2020. This, along with access to its upsized RCF of
GBP170 million, provides comfortable liquidity given the lack of
debt repayments over at least the next three years, and limited
cash flow seasonality during the year. In its liquidity
calculations Fitch strips out GBP25 million from available cash
reflecting intra-year working-capital swings.

Fitch assumes that M&A would continue to be externally funded
through a mix of equity (if the IPO proceeds according to plan)
and, potentially less likely, by way of incremental debt, given the
expected thin generation of FCF (in absolute terms).

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.

VIRGIN ATLANTIC: To Cut 1,150 More Jobs After Rescue Plan Okayed
----------------------------------------------------------------
BBC News reports that Virgin Atlantic is to cut 1,150 more jobs
after completing a GBP1.2 billion rescue plan that will secure its
future for at least 18 months.

The airline had already cut more than 3,500 jobs out of the 10,000
employees it had at the beginning of the year, BBC notes.

The airline said it had to cut costs in order to survive, BBC
relates.

"Until travel returns in greater numbers, survival is predicated on
reducing costs further and continuing to preserve cash," BBC quotes
the airline as saying. "The outlook for transatlantic flying, which
is core to Virgin Atlantic's business, remains uncertain with US-UK
travel curtailed."

According to BBC, it said the past six months had been "the most
challenging in Virgin Atlantic's history", and that "regrettably
the airline must go further one last time with changes at scale, to
ensure it emerges from this crisis".

The carrier added that a 45-day consultation period would begin on
Sept. 4 with unions, BBC discloses.

According to BBC, to try to cut down on crew redundancies, it said
it would introduce a voluntary, company-financed furlough scheme
for 600 crew members when the government-backed scheme ends in
October.

Virgin, BBC says, finds itself more exposed than many of its
rivals, because it relies heavily on transatlantic traffic--and
restrictions on travel to the US remain in force.

The company is hoping its GBP1.2 billion rescue plan will enable it
to ride out the storm, BBC notes.  But to succeed, it still needs
to turn itself into a much smaller business than it was just a few
months ago, BBC says.

Virgin gained approval for its rescue plan from UK and US courts
last week, BBC recounts.

The GBP1.2 billion deal involves GBP400 million in new cash, half
of which will come from its main shareholder, Sir Richard Branson's
Virgin Group, BBC states.



                           *********


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-
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Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante,
Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman,
Editors.

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

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