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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, October 20, 2020, Vol. 21, No. 210

                           Headlines



F R A N C E

SOLOCAL GROUP: Moody's Hikes CFR to Caa3 on Debt Restructuring
[*] FRANCE: Plans to Raise EUR20BB Loans to Avert Company Failures


G E R M A N Y

WIRECARD AG: KPMG Engaged as Auditor to Suspicious Vehicle


I R E L A N D

BASTILLE EURO 2020-3: Moody's Assigns (P)B3 Rating on Cl. F Notes


L U X E M B O U R G

ENCORE GROUP: Moody's Hikes Sr. Sec. Notes to Ba3, Outlook Stable


M A C E D O N I A

MUNICIPALITY OF SKOPJE: S&P Affirms 'BB-' LT ICR, Outlook Stable


S P A I N

AUTO ABS 2020-1: Fitch Assigns Bsf Rating on Class E Debt


U N I T E D   K I N G D O M

EDINBURGH WOOLLEN: Owner Works on Rescue Proposals
FINASTRA LTD: S&P Affirms 'CCC+' ICR, Outlook Negative
FLYBE: May Restart Operations After Ex-Shareholder Buys Assets
GAMESYS GROUP: Moody's Hikes CFR to Ba3, Outlook Stable
GAMESYS GROUP: S&P Alters Outlook to Positive & Affirms 'B+' ICR

MOUNTUNE: Founder Acquires Business to Secure Future
VUE INTERNATIONAL: Moody's Cuts CFR to Caa2, Outlook Negative

                           - - - - -


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F R A N C E
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SOLOCAL GROUP: Moody's Hikes CFR to Caa3 on Debt Restructuring
--------------------------------------------------------------
Moody's Investors Service upgraded to Caa1 from Caa3 the corporate
family rating and to Caa1-PD from Ca-PD the probability of default
rating (PDR) of SoLocal Group S.A. (SoLocal), a French provider of
local media advertising and digital solutions to the SME sector.
Concurrently, Moody's has upgraded to Caa2 from Ca the rating on
the EUR168 million reinstated senior secured notes due 2025 and has
assigned a Caa2 rating to the new EUR17.7 million senior secured
bond due 2025, both issued by SoLocal Group S.A. The outlook has
changed to stable from negative.

The rating action follows the completion of SoLocal's financial
restructuring plan on October 2, 2020, with the allocation of new
shares to creditors on October 6, 2020 in exchange for part of the
note obligations previously due. The financial restructuring
comprised (1) a rights issue of EUR336 million, of which EUR86
million was subscribed in cash and EUR250 million in the form of a
debt-for-equity swap from existing bondholders; (2) maturity
extensions of the EUR168 million reinstated bonds by three years to
March 2025 and the EUR50 million revolving credit facility (RCF) by
one year to September 2023; (3) a reduction in coupon payments to
Euribor + 7% to be paid half in cash and half PIK in 2021 and in
cash from that point onwards, and flexibility to pay RCF's related
interest expenses in cash or in shares at the option of SoLocal;
(4) issuance of a EUR17.7 million bond with the same terms and
conditions as the reinstated bonds; and (5) EUR16 million state
guaranteed loan from Bpi France.

"Following the debt restructuring plan and the cash injection of
EUR117 million, SoLocal's liquidity has improved substantially.
This would give the company some time to complete the last step of
its transformation plan, including the migration of the remainder
of its customer portfolio to a subscription based and autorenewal
model and the increased focus on customer acquisition," says Victor
Garcia Capdevila, a Moody's Assistant Vice President -- Analyst and
lead analyst for SoLocal.

"However, SoLocal faces downside risks as it will find challenging
to show top line growth due to high churn rates, operational
disruptions related to the coronavirus and a challenging economic
environment in France, and for the SME segment. In the absence of
strong top line growth in 2021 and 2022, the company might face
liquidity pressures again in 2022 or 2023," adds Mr. Garcia.

RATINGS RATIONALE

On October 2, 2020 SoLocal completed the financial debt
restructuring approved by its bondholders and shareholders on July
24, 2020. The debt restructuring has allowed the company to reduce
its financial debt by around 50%, lower its annual interest
payments to EUR20 million from EUR44 million, extend its debt
maturity profile to March 2025 for the senior secured notes and to
September 2023 for the RCF and improve its liquidity by EUR117
million.

The upgrade of SoLocal's ratings reflects its stronger metrics and
liquidity following the debt restructuring, which are positive
considerations from a corporate governance perspective. However,
this is balanced by the company's track record of serial defaults
(in 2014, 2017 and 2020).

The rating also factors in the company's high Moody's-adjusted
gross leverage over the next 12-18 months; the highly fragmented
and competitive nature of the markets where SoLocal operates; high
churn rates and the company's limited leeway in terms of operating
underperformance over the next 12-18 months to avoid liquidity
pressures in 2022-2023.

Over the last three years, the company managed to reduce its cost
base by around 25% leading to an increase in Moody's-adjusted
EBITDA margin to 35% in the last 12 months to June from 22% in
FY2017. At the same time, SoLocal gradually transitioned around 60%
of its customer portfolio to a subscription based autorenewal
business model. This will enhance the company's revenue and
earnings visibility and stability and should allow more time for
sales representatives to focus on the acquisition of new customers
and the upselling and cross selling to existing ones. During that
time, the company also carried out a major modernization of its IT
infrastructure to improve its product offering, reliability, and
efficiency.

However, SoLocal has been very slow in tackling one of the
company's main legacy problems, improving customer satisfaction to
decrease its very high churn rate of around 20%. In 2019, the
company lost around 75,000 customers out of a base of about 417,000
compared with customer acquisitions of only 26,000.

Moody's base case scenario assumes revenue of EUR420 million in
2020 and a flat evolution in 2021 driven by ongoing disruptions
related to the second wave of the coronavirus, high churn rates,
weak macroeconomic environment and only a moderate improvement in
customer acquisition. Moody's-adjusted EBITDA is expected to be in
a range of EUR80 million - EUR90 million as the benefits of a lower
cost base due to the government support programs unwind. Moody's
adjusted EBITDA also includes an estimate of EUR7 million - EUR10
million of other non-operating expenses and a pension expense of
EUR9 million.

The rating agency estimates that Moody's-adjusted leverage will be
at around 4.0x in 2020 and between 5.5x and 6.0x in 2021.

LIQUIDITY

The company's liquidity profile has improved following a cash
injection of EUR117 million from the recently completed financial
restructuring but remains weak and it could come under pressure if
the company fails to deliver material top line growth in 2021 and
early 2022.

Moody's estimates that SoLocal will end up 2020 with a cash balance
of around EUR50 million. Its EUR50 million RCF due September 2023
remains fully drawn. In 2021, the rating agency forecasts a
negative free cash flow generation of EUR30 million. This always
coupled with Moody's assumption of a minimum cash balance of around
EUR20 million needed to run the business means that SoLocal has
very little capacity for operating underperformance over the next
12-18 months.

The notes are subject to two financial covenants, EBITDA to net
interest above 3.0x and net leverage ratio below 3.5x.

STRUCTURAL CONSIDERATIONS

Following the debt restructuring completed in October 2020,
SoLocal's capital structure comprises EUR168 million senior secured
notes due 2025 issued by SoLocal Group S.A.; EUR17.7 million senior
secured notes due 2025 issued by SoLocal Group S.A.; EUR50 million
super senior RCF borrowed at SoLocal Group S.A. and EUR16 million
loan from Bpi France guaranteed by the French government and
borrowed by SoLocal S.A.

The Caa2 rating assigned to the notes is one notch below the Caa1
CFR, reflecting the structural subordination of the liabilities at
the holding company, SoLocal Group S.A., with respect to the
liabilities at the operating company SoLocal S.A., which include
trade payables, pensions, and the Bpi France loan.

The probability of default rating of Caa1-PD is in line with the
CFR, reflecting Moody's assumption of a 50% family recovery rate
based on the presence of bonds and bank debt in the capital
structure with financial maintenance covenants.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects the benefits of the debt restructuring
in the form of a lower debt load, an improved liquidity profile,
extended debt maturities and reduced interest costs. It also
reflects Moody's expectation of a reduction in churn rates and an
improvement in customer satisfaction.

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

There is currently limited upward pressure on SoLocal's ratings.
However, the ratings could be upgraded if the company demonstrates
a consistent track record of revenue and earnings growth, positive
free cash flow generation and reduced churn rates.

Downward pressure on the ratings could arise if the company's
liquidity profile deteriorates, revenue growth fails to
materialize, churn rates remain elevated or the capital structure
proves unsustainable.

LIST OF AFFECTED RATINGS

Issuer: SoLocal Group S.A.

Upgrades:

Probability of Default Rating, Upgraded to Caa1-PD from Ca-PD

Corporate Family Rating, Upgraded to Caa1 from Caa3

Senior Secured Regular Bond/Debenture, Upgraded to Caa2 from Ca

Assignment:

Senior Secured Regular Bond/Debenture, Assigned Caa2

Outlook Action:

Outlook, Changed to Stable from Negative

PRINCIPAL METHODOLOGY

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

COMPANY PROFILE

SoLocal, headquartered in Paris (France), is a provider of local
media advertising and digital solutions to the SME sector. Its
product offering is comprised of digital advertising (48% revenue),
digital presence (27%) and websites (25%). It operates mainly in
France, which accounted for 96% of its 2019 revenue. In 2019,
SoLocal reported recurring revenue of EUR584 million and recurring
EBITDA as calculated by management of EUR190 million. SoLocal is
publicly quoted on the Paris stock exchange.


[*] FRANCE: Plans to Raise EUR20BB Loans to Avert Company Failures
------------------------------------------------------------------
Leigh Thomas at Reuters reports that France plans to raise EUR20
billion (US$23 billion) in quasi-equity loans for small firms hit
by the coronavirus crisis by offering investors a state guarantee
against the first EUR2 billion in losses, officials said.

According to Reuters, fearing failures among firms which were
already saddled with record levels of debt before the crisis, the
French government wants the programme up and running by early next
year as it battles the economic impact of the COVID-19 pandemic.

Under plans to be presented to the financial sector on Oct. 19
banks would first lend to small and mid-sized firms and then sell
on 90% of the loans to institutional investors, people familiar
with the proposals told Reuters.

That would limit banks' risk exposure to 10% of the loans, while
also steering funds to viable firms, Reuters states.

Since a public guarantee is involved, EU state aid regulators have
to give the programme their blessing, particularly the interest
rate that would be charged, Reuters says.

The interest rate is unlikely to be less than 3%-5% since the loans
would be junior to other debt on firms' balance sheets, Reuters
relays, citing another source familiar with the discussions.

Starting with more than EUR120 billion in state-guaranteed bank
loans to help firms with their immediate cashflow needs, government
measures to keep them afloat have so-far staved off a wave of
bankruptcies, Reuters discloses.

According to Reuters, research firm Altares said corporate
bankruptcies have fallen to levels not seen since 1989.

However, three out of four bankruptcy cases that went before the
French courts in the third quarter have led to liquidation, which
Altares said could be a prelude to a surge in filings, especially
in the first quarter of 2021, Reuters notes.




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G E R M A N Y
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WIRECARD AG: KPMG Engaged as Auditor to Suspicious Vehicle
----------------------------------------------------------
Olaf Storbeck and Dan McCrum at The Financial Times report that
KPMG, which this year revealed its rival accounting firm EY had
missed a chance to stop Wirecard's fraud, was engaged as the
auditor to a suspicious vehicle that investigators believe may have
been used to siphon off the payments group's funds.

According to the FT, in a special audit into Wirecard, which
precipitated the collapse of the German group, KPMG wrote an
unpublished addendum that criticized EY for failing to follow up
properly on 2016 allegations of accounting fraud.

Among the allegations, made in a letter from an EY employee, was
that "Wirecard senior management" secretly held stakes in a
Mauritius-based fund that sold three Indian companies to Wirecard
for EUR340 million weeks after buying them for a fraction of that
amount, the FT discloses.

Senior Wirecard managers were also accused of artificially
inflating the operating profit of the Indian businesses in an
attempt to push up the acquisition price, which was partly linked
to future profits, the FT relates.

KPMG found that a subsequent EY investigation into the allegations
was "incomplete" and there was evidence "that should have been
investigated conclusively", the FT states.  In the event, the
Wirecard fraud continued for four years, the FT relays.

However, absent from the KPMG report was any acknowledgment that
KPMG had been engaged as auditor on the Mauritius fund, named
Emerging Market Investment Fund 1A, before the accounting firm had
second thoughts, the FT recounts.

The Big Four firm also played an advisory role in the suspect deal
and one of the KPMG partners involved went on to work for the
Mauritius fund, according to documents seen by the FT and several
people familiar with the situation.




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I R E L A N D
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BASTILLE EURO 2020-3: Moody's Assigns (P)B3 Rating on Cl. F Notes
-----------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to the notes to be issued by Bastille
Euro CLO 2020-3 Designated Activity Company:

EUR186,000,000 Class A Senior Secured Floating Rate Notes due 2035,
Assigned (P)Aaa (sf)

EUR11,850,000 Class B-1 Senior Secured Floating Rate Notes due
2035, Assigned (P)Aa2 (sf)

EUR15,150,000 Class B-2 Senior Secured Fixed Rate Notes due 2035,
Assigned (P)Aa2 (sf)

EUR6,800,000 Class F Deferrable Junior Floating Rate Notes due
2035, Assigned (P)B3 (sf)

RATINGS RATIONALE

The rationale for the ratings is based on a consideration of the
risks associated with the CLO's portfolio and structure as
described in our methodology.

The Issuer is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured obligations and up to 10%
of the portfolio may consist of senior unsecured obligations,
second-lien loans, mezzanine obligations and high yield bonds. The
portfolio is expected to be 70% ramped as of the closing date and
to comprise of predominantly corporate loans to obligors domiciled
in Western Europe. The remainder of the portfolio will be acquired
during the 6-month ramp-up period in compliance with the portfolio
guidelines.

CBAM CLO Management Europe, LLC will manage the CLO. It will direct
the selection, acquisition and disposition of collateral on behalf
of the Issuer and may engage in trading activity, including
discretionary trading, during the transaction's 3.75-year
reinvestment period. Thereafter, subject to certain restrictions,
purchases are permitted using principal proceeds from unscheduled
principal payments and proceeds from sales of credit risk
obligations or credit improved obligations.

In addition to the Class A Senior Secured Floating Rate Notes due
2035, Class B-1 Senior Secured Floating Rate Notes due 2035, Class
B-2 Senior Secured Fixed Rate Notes due 2035 and Class F Deferrable
Junior Floating Rate Notes due 2035 rated by Moody's, the Issuer
will issue EUR 31,800,000.00 of Class C Deferrable Mezzanine
Floating Rate Notes due 2035, EUR 13,800,000.00 of Class D
Deferrable Mezzanine Floating Rate Notes due 2035, EUR
14,400,000.00 of Class E Deferrable Junior Floating Rate Notes due
2035 and EUR 21,425,000.00 of Subordinated Notes due 2035 which are
not rated.

The transaction incorporates interest and par coverage tests which,
if triggered, divert interest and principal proceeds to pay down
the notes in order of seniority.

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.

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.

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

The rated notes' performance is subject to uncertainty. The notes'
performance is sensitive to the performance of the underlying
portfolio, which in turn depends on economic and credit conditions
that may change. The collateral manager's investment decisions and
management of the transaction will also affect the notes'
performance.

Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3 of
the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in August 2020.

Moody's used the following base-case modeling assumptions:

Par Amount: EUR 300,000,000

Diversity Score: 44*

Weighted Average Rating Factor (WARF): 2760

Weighted Average Spread (WAS): 3.60%

Weighted Average Coupon (WAC): 4.0%

Weighted Average Recovery Rate (WARR): 46.84%

Weighted Average Life (WAL): 7.5 years

*The covenanted base case diversity score is 45, however Moody's
has assumed a diversity score of 44 as the deal documentation
allows for the diversity score to be rounded up to the nearest
whole number whereas usual convention is to round down to the
nearest whole number

Moody's has addressed the potential exposure to obligors domiciled
in countries with local currency ceiling (LCC) of A1 or below. As
per the portfolio constraints and eligibility criteria, exposures
to countries with LCC of A1 to A3 cannot exceed 10% and obligors
cannot be domiciled in countries with LCC below A3.




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L U X E M B O U R G
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ENCORE GROUP: Moody's Hikes Sr. Sec. Notes to Ba3, Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service upgraded the guaranteed senior secured
debt ratings of the notes issued by the funding entities of Encore
Capital Group, Inc.'s operating subsidiaries Cabot Financial
(Luxembourg) S.A and Cabot Financial (Luxembourg) II S.A, to Ba3
from B1. The outlooks have been changed to stable from ratings
under review. This rating action concludes the review initiated on
September 1, 2020.

In the same rating action, Moody's withdrew the B1 corporate family
rating ("CFR") of Cabot Financial Ltd. At the time of withdrawal,
the outlook was stable.

RATINGS RATIONALE

The rating action follows Encore Capital Group, Inc.'s announcement
that it completed the implementation of its new global structure,
which combines the previously legally separate funding structures
of its US and EMEA operating subsidiaries [1]. As part of the
transaction, the terms of the notes issued by the funding entities
Cabot Financial (Luxembourg) S.A and Cabot Financial (Luxembourg)
II S.A, have been amended to add Encore and its material
subsidiaries as guarantors and have Encore become the parent of the
restricted group.

The Ba3 ratings of the guaranteed senior secured notes issued by
Cabot Financial (Luxembourg) S.A and Cabot Financial (Luxembourg)
II S.A are based on the Ba2 CFR of Encore and reflect the
application of Moody's Loss Given Default for Speculative-Grade
Companies methodology, published in December 2015, and the
priorities of claims and asset coverage in Encore's liability
structure after the consummation of the transaction.

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

The senior secured debt ratings could be upgraded because of 1) an
upgrade of Encore's CFR or 2) changes to the liability structure
that would decrease the amount of debt considered senior to the
notes or increase the amount of debt considered junior to the
notes.

The senior secured debt ratings could be downgraded because of 1) a
downgrade of Encore's CFR or 2) changes to the liability structure
that would increase the amount of debt considered senior to the
notes.

LIST OF AFFECTED RATINGS

Issuer: Cabot Financial Ltd

Withdrawal:

Long-term Corporate Family Rating, previously rated B1

Outlook Action:

Outlook changed to Rating Withdrawn from Stable

Issuer: Cabot Financial (Luxembourg) S.A

Upgrade:

Backed Senior Secured Regular Bond/Debenture, upgraded to Ba3 from
B1

Outlook Actions:

Outlook changed to Stable from Rating under Review

Issuer: Cabot Financial (Luxembourg) II S.A

Upgrade:

Backed Senior Secured Regular Bond/Debenture, upgraded to Ba3 from
B1

Outlook Actions:

Outlook changed to Stable from Rating under Review

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.




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M A C E D O N I A
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MUNICIPALITY OF SKOPJE: S&P Affirms 'BB-' LT ICR, Outlook Stable
----------------------------------------------------------------
S&P Global Ratings, on Oct. 16, 2020, affirmed its 'BB-' long-term
issuer credit rating on the Municipality of Skopje, the capital of
North Macedonia. The outlook is stable.

Outlook

The stable outlook reflects S&P's expectation that Skopje will
manage its temporary budgetary performance deterioration and return
to a stable debt-reduction path once the pandemic abates.

Downside scenario

S&P could lower its rating on Skopje within the next 12 months if
it lowered its long-term rating on North Macedonia (BB-/Stable/B),
or if Skopje's liquidity or budgetary performance weakens
materially. In addition to the risks associated with a more
prolonged economic impact from the pandemic, relaxed control over
operating expenditure and increased capital investments could
result in weaker budgetary performance that pushes up deficits
after capital accounts structurally to high levels.

Upside scenario

S&P said, "Any ratings upside is contingent on us raising our
rating on North Macedonia. Given a higher sovereign rating, we
could raise our rating on Skopje if the central government steps in
to provide additional support to the city's finances, including its
related companies, and if management strengthens its long-term
planning and budgeting, resulting in sustained improvement in its
budgetary performance and a reduction in debt."

Rationale

Skopje entered 2020 with a strong fiscal position of high operating
surpluses and low debt (below 20% of operating revenue). S&P said,
"Due to the pandemic, we anticipate tax revenue losses and
additional expenditure will lead to deficits after capital accounts
of 15.2% of total revenue in 2020, and direct debt of 24% of
operating revenue by 2021. Municipal companies' additional planned
debt issuance would push up expected tax-supported debt to close to
40% of consolidated revenue, and we expect it will start declining
gradually from 2022. We also expect that Skopje will partly finance
its deficits by depleting previously accumulated high cash reserves
over our forecast horizon through 2022. Uncertainties about
medium-term investment spending could further deplete the
municipality's cash levels. Our rating on Skopje remains
constrained by the volatile and unbalanced institutional framework
under which the municipality operates in North Macedonia."

Skopje's performance remains supported by its status as economic
center of the country, despite the pandemic-induced recession
S&P said, "Although we expect a sharp contraction in North
Macedonia's real GDP of 6.0% in 2020, we believe Skopje's economic
fundamentals will remain solid, given its status as the country's
financial and administrative center. In an international
comparison, however, Skopje's population has relatively low income
and wealth levels. We project national GDP per capita will average
$6,300 over 2020-2023. The city hosts well-diversified production
facilities of export-oriented foreign companies, as well as
national headquarters of domestic companies. We expect the local
economy will gradually recover in line with the national economy,
achieving average real GDP growth of about 3.3% over 2021-2023.
This is based on our assumption that the pandemic will subside in
2021, allowing the economy to recover. With steady growth in
2021-2023, we expect Skopje's budgetary performance will return to
a healthy position, with contained deficits after investment
expenditure."

The predictability of North Macedonia's institutional setup is
affected by the central government's fiscal policy. Plans for
further decentralization continue with a focus on policing and tax
collection. Effective implementation remains uncertain and S&P
understands that discussions were paused in light of the pandemic.
Skopje receives funds for services provided through earmarked
transfers from the central government's budget. During the
pandemic, the central government did not distribute extraordinary
support to the local tier, as seen among some international peers.
Similar to other local governments in the region, Skopje has very
limited autonomy to divert received funds to other uses.

S&P considers financial management a key weakness for the rating.
The municipality lacks tested medium-term financial planning for
the core budget and its enterprises, and outcomes on annual budgets
very often diverge materially from the budget. Although management
has taken some steps toward more realistic planning, execution both
for capital revenue and capital expenditure (capex) continue to be
unpredictable. For example, in 2019, capital revenue was more than
double the budgeted amount. S&P understands capex overestimation,
to some extent, reflects considerations outside of Skopje
administration's direct control, such as delays owing to lengthy
public procurement procedures. The city produces multiyear
forecasts, but the achieved figures continue to vary considerably
from forecasts. That said, the city government has a relatively
tight grip on operating expenditure, and regularly reevaluates its
investment program. Moreover, it arranges funding for capital
projects in advance from multilateral financial institutions, both
directly and via the state treasury. Skopje's accounts are audited
by an independent government body accountable to parliament.

Local elections are scheduled for 2021, but following the smooth
transition following the prior electoral change and stability in
the management team, S&P anticipates continuity post-election. In
the final year of the current mandate, S&P expects some investment
projects to be pushed toward finalization.

The pandemic will increase spending and hurt balances after capital
accounts, but Skopje will remain in an operating surplus
Similar to other local and regional governments, S&P expects
Skopje's tax base will worsen significantly in 2020 and moderately
recover in 2021, on the back on an economic recovery. Half-year
results show a very low collection of municipal and property taxes
as well as nontax items, while transfers from the central
government, accounting for 45% of operating revenue, are in line
with standard year-on-year growth expectations. Additional
subsidies to municipal companies will also increase local
government spending. For example, the transportation company
already received 95% of its budgeted amount by midyear and might
require additional support in the second half of 2020. Therefore,
S&P projects the municipality's operating surplus will decline to
9.9% of revenue in 2020 and average 12.0% over 2021-2023 compared
with 20.4% in 2019. S&P anticipates management will implement
measures to strengthen revenue collection and adequately control
expenditure, which could prevent further deterioration over the
medium term.

S&P believes capex will remain at its historical average in 2020,
but will return to higher levels because of the city's large
infrastructure gap from 2021. According to management, investment
projects were not delayed materially due to the pandemic. The
project pipeline is dense and involves investments mainly in roads,
bridges, and public transportation. Capital revenue is likely to
remain volatile and be significantly lower than budgeted in 2020.
Half-year 2020 figures indicate no real estate sales. Overall, this
leads S&P to forecast deficits after capital accounts of close to
5% of revenue over 2021-2022, after a peak deficit of 15% in 2020.

S&P said, "In our view, Skopje's budgetary performance continues to
be volatile due to its exposure to the real estate market,
especially construction taxes and land sales. The city derives
about 30% of its revenue from real estate-related development, both
directly and indirectly.

"We believe Skopje has limited revenue and expenditure flexibility.
A high proportion of revenue depends on central government
decisions, such as setting the base or range for most local tax
rates, as well as the distribution coefficients for central
government transfers. We continue to believe that scaling down
capital spending might be challenging, given the city's
infrastructure gap."

The large deficits after capital in 2020 are likely to lead to a
reduction in Skopje's accumulated liquidity reserves and increase
debt. A contracted loan facility will be drawn upon until year-end
2021, partially covering deficits and investment needs. Skopje will
nevertheless continue to conform with the central government
borrowing limits. Post-pandemic, we continue to believe that the
city will resume its deleveraging plan, supported by improvements
in operating performance. S&P forecasts tax-supported debt will
peak at just below 40% of consolidated operating revenue, including
additional borrowing by the municipal companies, before declining
again in 2022.

S&P also views Skopje's exposure to its municipal companies as a
key credit weakness. Several municipal companies have investment
needs and large payables that ultimately dependent on the city's
support. Additional contingent liabilities may come from the
municipality's plans to foster infrastructure development through
public-private partnerships.

Skopje's debt service coverage ratio remains high, with cash
holdings--adjusted for the deficit after capital
accounts--substantially exceeding 200% of debt service falling due
over the coming 12 months. Nonetheless, S&P believes this ratio is
volatile and will decrease to finance part of pandemic-related tax
shortfalls and related expenditure, as well as upcoming investment
projects. S&P anticipates a gradual weakening of the municipality's
strong liquidity to adequate levels by year-end 2023. Skopje holds
its cash in several accounts at the state treasury. These positive
factors are balanced by the city's limited access to external
liquidity, owing to North Macedonia's relatively underdeveloped
local banking system and capital markets for municipal debt.

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

  Skopje (Municipality of)
   Issuer Credit Rating    BB-/Stable/--




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

AUTO ABS 2020-1: Fitch Assigns Bsf Rating on Class E Debt
---------------------------------------------------------
Fitch Ratings has assigned Auto ABS Spanish Loans 2020-1, FT final
ratings.

RATING ACTIONS

Auto ABS Spanish Loans 2020-1, FT

Class A ES0305506000; LT AA-sf New Rating; previously at AA-(EXP)sf


Class B ES0305506018; LT Asf New Rating; previously at A(EXP)sf

Class C ES0305506026; LT BBBsf New Rating; previously at BBB(EXP)sf


Class D ES0305506034; LT BBsf New Rating; previously at BB(EXP)sf

Class E ES0305506042; LT Bsf New Rating; previously at B(EXP)sf

Class F ES0305506059; LT NRsf New Rating; previously at NR(EXP)sf

TRANSACTION SUMMARY

The transaction is a revolving securitisation of a portfolio of
amortising and balloon auto loans originated in Spain by PSA
Financial Services Spain, E.F.C., S.A. (PSA). PSA is the Spanish
captive financial entity of the French car maker Peugeot S.A.
(BBB-/Stable). PSA is a 50/50 joint venture of Banque PSA Finance
S.A. and Santander Consumer Finance, S.A. (A-/Negative/F2).

KEY RATING DRIVERS

Residual Value Risk: Of the portfolio balance, 35% is linked to
balloon loans granted to individuals for the purchase of new cars,
for which borrowers have the option to deliver the vehicle to
discharge the final balloon instalment (i.e. residual value, RV).
Fitch assumed RV exposure of 80% of the total balloon loan balance
at the end of the revolving period.

In Fitch's analysis, RV loss has been calibrated assuming car sale
proceeds of 85% of the final balloon instalments in a base case
scenario, and Fitch has applied median haircuts to derive rating
stresses. RV losses of 8.0% of the total portfolio balance are
applied under the 'AA-sf' rating scenario.

Resilient to Coronavirus Stresses: Fitch views the rated notes as
sufficiently protected by credit enhancement (CE) and excess spread
to absorb additional projected losses driven by the coronavirus
pandemic and related containment measures, which are producing an
economic recession and increased unemployment in Spain.

The more volatile portfolio performance outlook is captured within
the asset assumptions. Fitch assumed a blended (i.e. new car loans,
used car loans and balloon loans) base-case lifetime default and
recovery rates on the portfolio of 4.0% and 51.7%, respectively,
which are stressed with a default multiple of 3.5x and a recovery
haircut of 39.2% under a 'AA-sf' rating scenario.

Revolving and Pro-Rata Amortisation: The portfolio will be
revolving until December 2021 as new eligible receivables can be
purchased monthly by the SPV. After the revolving period, the class
A to E notes will be repaid pro rata until a subordination event
occurs, such as a cumulative balance of defaults greater than the
defined triggers.

Fitch views these triggers as sufficiently robust to prevent pro
rata amortisation from continuing upon early signs of performance
deterioration. Fitch believes the tail risk posed by the pro rata
pay-down is also mitigated by the mandatory switch to sequential
amortisation when the outstanding collateral balance falls below
10% of the initial balance.

Counterparty Eligibility Limits Ratings: The maximum achievable
rating of this transaction is 'AA+sf' as per Fitch's counterparty
rating criteria. This is due to the account bank minimum
eligibility rating thresholds of 'A-' or 'F1', which are
insufficient to support an 'AAAsf' rating.

Liquidity Protection Mitigates Servicing Disruption: Fitch views
servicing continuity risk as mitigated by liquidity provided in the
form of a dedicated cash reserve, which covers senior costs and
interest on the class A to E notes for more than three months,
providing sufficient time to resume collections by a replacement
servicer. No back-up servicer was appointed at closing.

RATING SENSITIVITIES

Developments that may, individually or collectively, lead to
positive rating action:

  - CE ratios increasing as the transaction deleverages, able to
fully compensate the credit losses and cash flow stresses
commensurate with higher rating scenarios.

Developments that may, individually or collectively, lead to
negative rating action:

  - Long-term asset performance deterioration such as increased
delinquencies or reduced portfolio yield, which could be driven by
changes in portfolio characteristics, macroeconomic conditions,
business practices or the legislative landscape;

  - A longer-than-expected coronavirus crisis that deteriorates
macroeconomic fundamentals and the auto market in Spain beyond
Fitch's base case; and

  - A downgrade of Spain's Long-Term Issuer Default Rating, which
could decrease the maximum achievable rating for Spanish structured
finance transactions.

This section provides insight into the model-implied sensitivities
the transaction faces when one assumption is modified, while
holding others equal. The modelling process uses the modification
of these variables to reflect asset performance in upside and
downside environments. The results below should only be considered
as one potential outcome, as the transaction is exposed to multiple
dynamic risk factors. It should not be used as an indicator of
possible future performance.

Sensitivity to Increased Defaults:

Original ratings (class A/B/C/D/E): 'AA-sf' / 'Asf' / 'BBBsf' /
'BBsf' / 'Bsf'

Increase defaults by 10%: 'AA-sf' / 'Asf' / 'BBBsf' / 'BBsf' /
'Bsf'

Increase defaults by 25%: 'AA-sf' / 'Asf' / 'BBBsf' / 'BBsf' /
'Bsf'

Increase defaults by 50%: 'A+sf' / 'A-sf' / 'BBB-sf' / 'BBsf' /
'Bsf'

Sensitivity to Reduced Recoveries:

Original ratings (class A/B/C/D/E): 'AA-sf' / 'Asf' / 'BBBsf' /
'BBsf' / 'Bsf'

Reduce recoveries by 10%: 'AA-sf' / 'Asf' / 'BBBsf' / 'BBsf' /
'Bsf'

Reduce recoveries by 25: 'AA-sf' / 'Asf' / 'BBB sf' / 'BB- sf' / 'B
sf'

Reduce recoveries by 50%: 'AA-sf' / 'Asf' / 'BBB- sf' / 'B+ sf' /
'B- sf'

Sensitivity to Reduced Net Sale Proceeds:

Original ratings (class A/B/C/D/E): 'AA-sf' / 'Asf' / 'BBB sf' /
'BB sf' / 'B sf'

Reduce net sale proceeds by 10%: 'AA-sf' / 'Asf' / 'BBB sf' / 'BB-
sf' / 'B sf'

Reduce net sale proceeds by 25: 'A+sf' / 'BBB+sf' / 'BB+ sf' / 'B+
sf' / 'B- sf'

Reduce net sale proceeds by 50%: 'A-sf' / 'BBB-sf' / 'BB- sf' / 'B-
sf' / 'NRsf'

Sensitivity to Multiple Factors:

Original ratings (class A/B/C/D/E): 'AA-sf'/'Asf'/'BBB sf'/'BB sf'
/'B sf'

Increase defaults and reduce recoveries by 10% each: 'AA-sf' /
'Asf' / 'BBB sf' / 'BB sf' / 'B sf'

Increase defaults and reduce recoveries by 25% each: 'A+sf' /
'A-sf' / 'BBB- sf' / 'BB- sf' / 'B- sf'

Increase defaults and reduce recoveries by 50% each: 'Asf' /
'BBBsf' / 'BB+ sf' / 'B sf' / 'NR sf'

Coronavirus Downside Scenario Sensitivity

Fitch has assessed a coronavirus downside sensitivity that
contemplates a more severe and prolonged economic stress caused by
a re-emergence of infections in the major economies, before a slow
recovery begins in 2Q21. To approximate this scenario, the blended
default rate assumption has been increased by 15% and recoveries
decreased by 15% respectively. Under this downside scenario, the
notes' ratings would be 'AA-sf'/'Asf'/'BBB sf'/'BB sf' /'B sf'.

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

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

DATA ADEQUACY

Fitch 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.

Fitch conducted a review of a small targeted sample of PSA
Financial Services Spain, E.F.C., S.A.'s origination files and
found the information contained in the reviewed files to be
adequately consistent with the originator's policies and practices
and the other information provided to the agency about the asset
portfolio.

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

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF
RATING

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

REPRESENTATIONS, WARRANTIES AND ENFORCEMENT MECHANISMS

A description of the transaction's representations, warranties and
enforcement mechanisms (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'.
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

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




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

EDINBURGH WOOLLEN: Owner Works on Rescue Proposals
--------------------------------------------------
Christopher Williams at The Sunday Telegraph reports that the
knitwear mogul Philip Day is making frantic efforts to salvage his
retail empire from a total collapse that threatens to exile him
from the high street.

According to The Sunday Telegraph, the owner of Edinburgh Woollen
Mill Group (EWM) has only days to convince administrators not to
seize control, with 21,000 jobs in 1,100 stores at risk.

Mr. Day, who founded the company nearly two decades ago and built
it up via acquisitions of brands including Ponden Home, Peacocks
and Jaeger, is working on complicated rescue proposals at his home
in Switzerland, The Sunday Telegraph discloses.

However, with grim prospects for parts of the business, thousands
of job losses are expected as soon as this week, The Sunday
Telegraph states.

The self-made Cumbrian has concluded that banks will not lend to
EWM in its current state, The Sunday Telegraph notes.  Credit
insurers have withdrawn cover, meaning it is effectively unable to
trade, The Sunday Telegraph says.

According to The Sunday Telegraph, Mr. Day was due to present his
rescue ideas in a last-ditch conference call on Oct. 18 with the
insolvency specialists FRP Advisory, before a court hearing on Oct.
22 at the latest.

The firm is due to put EWM into administration if it is not
convinced creditors will end up better off if the deadline is
extended, The Sunday Telegraph states.

According to The Sunday Telegraph, sources close to Mr. Day
admitted parts of the business will face liquidation having been
"blown to bits" in the pandemic.

The Edinburgh Woollen Mill itself is viewed as especially
vulnerable, The Sunday Telegraph says.  The chain, which employs
7,000, is heavily dependent on deserted tourist spots and older
customers who do not shop online despite the pandemic, The Sunday
Telegraph notes.

According to The Sunday Telegraph, Mr. Day is exploring whether
stores could be mothballed until shoppers return, but such a move
would be difficult, requiring the help of landlords.

Sources close to Mr. Day, as cited by The Sunday Telegraph, said he
may seek to retain the Edinburgh Woollen Mill brand via a
potentially controversial "pre-pack" administration that would mean
the closure of all the stores and heavy losses for creditors.

Other EWM brands such as Austin Reed and Viyella may face a similar
fate, The Sunday Telegraph states.

Mr. Day is meanwhile attempting to secure outside investment to
save his stronger businesses, The Sunday Telegraph relays.  He is
in talks for Davidson Kempner, a US fund that invests in distressed
companies, to take a stake in Peacocks, which has 550 stores and
specializes in cheap clothes, The Sunday Telegraph discloses.

Jaeger, which is run by Mr. Day's daughter, is up for sale and has
attracted competing bids but may survive only as a brand rather
than a retailer, according to The Sunday Telegraph.

However, for the talks to continue, FRP must be convinced there is
a realistic prospect of deals that would mean suppliers, landlords
and other creditors get paid, The Sunday Telegraph notes.

It is possible that individual retailers within EWM could be
granted a stay of execution for 10 more days, while others are
forced under, The Sunday Telegraph states.  Alternatively FRP could
agree to extend the whole process or call time on the whole thing,
The Sunday Telegraph relates.

Mr. Day is the biggest creditor to EWM, The Sunday Telegraph
notes.


FINASTRA LTD: S&P Affirms 'CCC+' ICR, Outlook Negative
------------------------------------------------------
S&P Global Ratings affirmed its 'CCC+' long-term issuer credit
rating on financial services software provider Finastra Ltd.

The negative outlook reflects the potential for a downgrade if
Finastra's operating performance and cash generation is
significantly weaker than expected in FY2021, or the RCF maturing
in June 2022 is not refinanced over the next nine months.

Finastra's near-term liquidity has improved following its
outperformance of our cash flow forecasts for Q4 FY2020 and Q1
FY2021.

Finastra's unexpectedly strong cash generation in Q4 FY2020 was
mainly due to a large working capital inflow of $89 million on a
statutory basis, or $65 million on a management-adjusted basis.
This nullified the unexpectedly weak cash generation in the
previous quarter. Finastra's cash burn was also somewhat lower than
S&P had expected in Q1 FY2021, its cyclically weakest quarter.
Finastra's statutory working capital outflow was about $52 million,
which was less than half of the statutory outflow in Q1 FY2020.

Finastra's working capital profile over the past two quarters
partly benefited from management action to lengthen payables terms
(but still within industry standard), an improvement in receivables
collections despite challenging economic conditions, and its
progression to a more mature phase of its transition to a
subscription-based model.

As a result, Finastra's net available cash and undrawn portion of
the RCF stands at $228 million, which is significantly higher than
we had previously expected. This means Finastra is highly unlikely
to face any near-term liquidity shortage.

However, Finastra will need to refinance its RCF to ensure adequate
liquidity over the next 24 months.

S&P said, "The $400 million RCF matures in June 2022. While our
base case expectation is that Finastra will refinance the RCF in
the next six to eight months, it will nonetheless test the strength
of Finastra's banking relationships and credit standing. Finastra's
drawing on the RCF is $314 million as of Oct. 14, 2020, and hence
we see it as an essential liquidity source over the medium term.

"We forecast Finastra will continue to report weak credit metrics
in FY2021, slightly worse than we had previously expected.

"We now project Finastra will only generate about breakeven S&P
Global Ratings-adjusted free operating cash flow (FOCF) in FY2021
(negative after lease payments). In addition, we project a high
adjusted debt to EBITDA of about 10.5x excluding PECs--or about 13x
total leverage--and low EBITDA cash interest coverage of about
1.6x. Our adjusted EBITDA includes profit and loss (P&L)
nonrecurring costs and expenses capitalized development costs. Our
adjusted FOCF is after cash nonrecurring costs and before lease
depreciation.

"These credit metrics are somewhat weaker than our previous base.
This is partly due to our new expectation of about 1.5% adjusted
revenue decline, which reflects about 10% services revenue decline
owing to COVID-19's significant impact on implementations,
continued noncore revenue decline, and only modest 0.5%-1% growth
in software revenue. In addition, we understand that substantial
cost savings of over $70 million across people, travel and
entertainment, and marketing will likely be partly offset by
additional spending on cloud infrastructure and cybersecurity,
which will also recur and grow slightly in FY2022. Cash
nonrecurring costs and capital expenditure (capex) in FY2021 are
also assumed to be higher than we previously expected."

Finastra's EBITDA and FOCF generation is on a positive trajectory.

Finastra generated positive FOCF on a trailing 12-month basis (Q2
FY2020-Q1 FY2021), supported by strong EBITDA growth in Q1 of over
20% and working capital improvement. S&P also assumes in its base
case that Finastra will generate positive FOCF in the second half
of FY2021 and in the full-year FY2022, thanks to continued
significant underlying EBITDA growth, lower nonrecurring costs, and
working capital improvement.

The negative outlook reflects the potential for a downgrade if
Finastra's liquidity deteriorates sharply and a potential debt
restructuring becomes a more likely scenario.

Downside scenario

S&P could lower the rating if Finastra's operating performance and
cash generation is significantly weaker than expected in FY2021, or
the RCF maturing in June 2022 is not refinanced well ahead of its
maturity. This would significantly weaken liquidity and increase
the risk of a debt restructuring.

Upside scenario

S&P could revise the outlook to stable if Finastra remains on track
toward transitioning to sustainably positive FOCF, and successfully
refinances its RCF.


FLYBE: May Restart Operations After Ex-Shareholder Buys Assets
--------------------------------------------------------------
BBC News reports that collapsed regional airline Flybe could
restart operations as soon as next year, after a former shareholder
stepped in to buy its remaining assets.

According to BBC, the airline plans to "start off smaller than
before", its new owner Thyme Opco said, without giving further
details.

Before its collapse in March, Flybe carried eight million
passengers a year and ran 40% of regional UK flights, BBC notes.

However, there are questions over whether the airline still has a
valid operating license, BBC states.

And the BBC understands that if the deal is approved by regulators
then Flybe will be significantly smaller than it was before.

Flybe was a central carrier for many of the UK's smaller airports,
operating 80% or more flights from Southampton, Exeter and Belfast
City airports, BBC discloses.

When it collapsed, it employed about 2,200 people, many in the
Exeter area, BBC relays.

But while other carriers have stepped in to replace some routes,
many flights it operated have not been saved, creating concern for
those in the areas affected, BBC notes.

After it went into administration in March, Flybe owned no
aircraft, BBC discloses.  Its new owners have principally agreed to
purchase the airline's brand and web address, BBC recounts.

According to BBC, the big question mark surrounding this deal is
whether Flybe's airline operating licence is still valid.

Regulators at the Civil Aviation Authority (CAA) initially revoked
the airline's license when the company went into administration,
BBC notes.

The CAA now needs to make a judgement call on the license and there
might need to be a legal hearing, BBC says.

Flybe was a vital provider of air links to more remote parts of the
UK, operating around 2,300 flights a week from 43 different local
hubs.


GAMESYS GROUP: Moody's Hikes CFR to Ba3, Outlook Stable
-------------------------------------------------------
Moody's Investors Service upgraded Gamesys Group plc's corporate
family rating (CFR) to Ba3 from B1. The probability of default
rating (PDR) was upgraded to Ba3-PD from B1-PD. Concurrently,
Moody's has also upgraded to Ba3 from B1 the instrument ratings on
the senior secured GBP550 million equivalent senior secured term
loan B due 2024 (GBP510 million outstanding) and GBP13.5 million
senior secured multi-currency revolving credit facility (RCF) due
2023 borrowed by the company and Luxembourg Investment Company 192
S.a r.l. The outlook is stable.

RATINGS RATIONALE

Moody's decision to upgrade Gamesys' rating reflects the
improvement in the company's credit profile over the past two
years, and the agency's expectation that the metrics will continue
to improve over the next 18 months. The key drivers behind the
improved credit profile include (1) the increased profile and scale
of the business due to the JPJ Group plc/Gamesys merger in addition
to sustained organic growth at double digits; (2) the expectation
of continued revenue and earnings growth over at the next 12-18
months supported by strong market dynamics in particular the
migration of retail gambling to online, and; (3) the adoption of a
conservative net leverage target range of 1x to 2.0x.

The Ba3 rating of Gamesys also reflects (1) its leading position as
the largest online bingo operator in the UK; (2) the operational
control Gamesys has compared with competitors who may face cost
increases or disruption in maintaining the sites when relying on
third parties for platform technology; (3) an established operating
track record in managing its brands and gaming entities and in
delivering growth; and; (4) the relatively high EBITDA to free cash
flow conversion due to the low capital intensity of its operations.
Going forward some of the cash generated will be used to distribute
dividends and/or repay debt. Moody's also notes the company's
historic deleveraging profile and relatively conservative financial
policy.

The Ba3 rating of Gamesys also reflects (1) its product and
geographic concentration in the UK and in online bingo, mitigated
by the larger scale and diversity of the group since the
Gamesys/Gamesys Group merger in 2019; (2) its ongoing exposure to
regulatory changes and tax increases in UK, Sweden and Germany,
which impacts revenue and EBITDA, and; (3) the highly competitive
nature of the online gaming industry.

Liquidity analysis

Moody's consider Gamesys' liquidity to be good for its near-term
requirements. This is supported by (1) it estimates of over GBP150
million on balance sheet at September 30, 2020; (2) full
availability under its GBP13.5 million senior secured RCF; and (3)
expectation for significant positive free cash flow in the next
12-18 months. These sources are more than sufficient to cover capex
and potential dividends from 2021. The RCF has a springing maximum
leverage covenant to be tested when the RCF is drawn by more than
35% set with large headroom.

Outlook

The stable outlook reflects Moody's expectation that Gamesys will
continue to grow and use its strong free cash flow to maintain its
leverage target of 1x-2x. The stable outlook also assumes there
will not be adverse regulatory changes and the company will not
embark on material debt funded acquisitions.

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

Upward pressure on the ratings is constrained by the relatively
small scale and limited business profile and geographic scope of
the company, however if the company grows its scale and achieves a
more diversified profile, an upgrade on the ratings could arise
over time if (1) Moody's-adjusted leverage falls well below 2x
(including earn-outs) on a sustainable basis; (2) free cash flow to
debt trends towards 25%; and (3) the company maintains good
liquidity.

Negative pressure on the ratings could develop if the company
performance weakens or is negatively impacted by a changing
regulatory and fiscal regime or the demand for online gaming
materially declines. Quantitatively, Moody's would consider
downgrading Gamesys's ratings if (1) Moody's-adjusted leverage
remains sustainably above 3x; 2) free cash flow to debt falls below
10%; or (3) liquidity concerns arise.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Gaming
Methodology published in October 2020.

CORPORATE PROFILE

Gamesys is an online gaming company that provides bingo, casino,
and other games to a global consumer base, with a focus on UK
online bingo. Gamesys holds gambling licenses in the UK, Spain,
Malta, Gibraltar, and Sweden. In 2019 the company generated PF
revenue of GBP565 million. Gamesys has been listed on the London
Stock Exchange since January 2017, with a market capitalization of
approximately GBP1.42 billion as of October 15, 2020.


GAMESYS GROUP: S&P Alters Outlook to Positive & Affirms 'B+' ICR
----------------------------------------------------------------
S&P Global Ratings revised the outlook on U.K.-Based Gamesys Group
PLC to positive from stable and affirmed the 'B+' long-term issuer
credit rating. At the same time, S&P affirmed the 'B+' issue rating
on the group's debt facilities, with a recovery rating of '3'
(rounded recovery estimate: 65%).

S&P said, "The positive outlook reflects that we could raise the
rating in the next 12 months if, in addition to sustaining the
run-rate EBITDA of close to GBP200 million, Gamesys' credit metrics
improved such that adjusted leverage reduced sustainably below 3.0x
and FOCF to debt comfortably above 15%, with sufficient headroom to
absorb the effects of potential regulatory changes.

"We forecast Gamesys' adjusted credit metrics will improve in the
next 12 months as its online operations continue to expand and
generate meaningful free cash flow amid measures to curb the
COVID-19 outbreak."

Being a pure online operator, Gamesys performed strongly through
the first half of 2020 as it reported average active player growth
of 14% to 640,000, and pro forma revenue growth of 27%. Gamesys'
product diversity is limited to mainly casino and bingo games.
However, these segments witnessed the most growth during the
initial period of COVID-19-related lockdowns as the cancellation of
sporting events and closure of retail stores caused players to seek
alternatives. S&P notes that Gamesys maintained its strong
performance after lockdown measures were lifted. The group
continues to lower the risk profile of its U.K. player portfolio,
with its VIP players declining to 20% of its player base, and
average monthly revenue per customer declining to GBP59.

Gamesys generated company reported FOCF of about GBP98 million in
the first six months of 2020 and employed GBP40 million of this to
repay debt, moving toward its publicly stated financial net
leverage target of 1x-2x (which translates into S&P Global
Ratings-adjusted leverage of 2.0x-3.0x). S&P calculates that
Gamesys' adjusted leverage improved to 3.7x and FOCF to debt to 17%
for the 12 months ended June 30, 2020, compared with about 5.1x and
6%, respectively, in 2019.

Confident of achieving its financial leverage target by 2020,
Gamesys announced its initial interim dividend in August 2020.
Although the cash cost of the dividend remains relatively modest at
around GBP13 million, it contrasts starkly with peers--such as GVC,
Playtech, Flutter, and William Hill--whose liquidity preserving
measures included cancelling dividends due to the uncertainty
arising from the COVID-19 pandemic.

S&P's assessment of Gamesys' business profile includes our
assessment of sustainability of operations and exposure to
regulatory headwinds and concentration risk.   The U.K. represents
about 58% of Gamesys' revenue and Japan accounts for 25%. The
market expects the U.K. government could launch a review of the
Gambling Act 2005 in the coming months, beginning with a
consultation and review period. Part of the communicated focus of
such a review will be to enhance protections for vulnerable and
underage players from gambling harm, and to implement sufficient
safeguards to assess income affordability. However, exactly when
the review will be finalized or implemented is unclear, as is the
scope of terms or the extent of the financial effect of such a
review. Information to date, such as the U.K. House of Lords
report, makes various recommendations particularly aimed at further
regulating online gaming activities. As a pure online gaming
company with material exposure to the U.K., the final review could
have significant implications to Gamesys.

S&P said, "Our outlook revision to positive incorporates our
preliminary assumption that the Gambling Act 2005 review will not
result in Gamesys' results materially deteriorating from the
current forecast EBITDA base of about GBP170 million-GBP185
million. We also assume that the group will maintain or even
improve performance in 2021. Gamesys has expanded impressively
Japan over the past few years (including about 92% revenue growth
in first-half 2020) representing approximately 25% of the group's
revenues." However, online gambling remains unregulated in Japan.
To date, there is limited evidence of enforcement actions in Japan.
However, operating in Japan exposes Gamesys to the risk of material
earnings drop if there were a spike in gaming taxation or
enforcement actions.

Gamesys' brand licensing strategy will continue to attract
recreational customers.   Licensing well-known brands such as
Virgin Games, Heart Bingo, and Monopoly Casino help Gamesys to
attract recreational customers, build network effects, and increase
operational leverage by owning technology platforms. These brands
generate about 37% of Gamesys' group revenue. While licensing
contracts tend to be medium term, the risk of contract renewal
arises only periodically. The licensing agreement with Heart Bingo
(10% of group revenue) comes up for renewal in 2021 and we
understand that Gamesys will seek to renew this contract. Except
for the brand name and domain, Gamesys would continue to own the
underlying customer database and the user experience if the
arrangement were to end.

S&P said, "The positive outlook reflects that we could raise the
rating in the next 12 months if, in addition to sustaining run rate
EBITDA approaching GBP200 million, Gamesys demonstrated improved
credit metrics, such that adjusted leverage reduced sustainably
below 3.0x and FOCF to debt comfortably above 15%, with sufficient
headroom to absorb the effects of any regulatory changes."

S&P would consider raising the rating within the next 12 months if
there were sufficient track record of the following:

-- Adjusted leverage declining below 3.0x and FOCF of debt above
15%, in line with the group's stated financial policy to sustain
metrics within these bands over time;

-- No adverse effect, compared with S&P's base case, arising from
any regulatory changes including the review of the Gambling Act
2005 in the U.K.; and

-- Continued penetration of Gamesys' subscriber base, reducing the
scale of exposure to its VIP clients and reducing geographic
concentration.

S&P could revise the outlook to stable if:

-- Leverage continues to remain above 3.0x, or if in S&P's view,
company-adjusted leverage is unlikely to remain within the range;

-- Regulatory changes were to materially weaken the group's
current level of profitability, cash flow generation, or S&P's view
of the sustainability and strength of business operations; and

-- The group undertakes debt-financed acquisition or shareholder
returns, placing pressure on S&P's forecast base-case credit
metrics.


MOUNTUNE: Founder Acquires Business to Secure Future
----------------------------------------------------
Business Sale reports that Essex-based Mountune, a firm
specializing in tuning packages for Ford and Volkswagen cars, has
been acquired by its founder David Mountain in partnership with
several other investors.

Mr. Mountain resigned as a company director in July 2020, with the
company announcing in August that it was seeking a buyer or
investment partner, Business Sale recounts.  It hired KPMG to help
it in its search for a buyer or investor to help "recapitalize the
business and unlock management's growth aspirations", Business Sale
discloses.

It is thought that the company ran into difficulties after the
success of its road car tuning business began to impact the
earning-power of the more lucrative side of Mountune's business:
supplying parts and engines for race cars, Business Sale relates.
This was then exacerbated by the impact of COVID-19, which put
racing around the world on hold, Business Sale notes.

According to Business Sale, the investment by Mountain and the team
of investors has been said to safeguard "a large number of jobs" at
Mountune's Essex facility and raised "the required capital to both
protect the brand and secure its future".

The acquisition means that Mountune is an independent, UK-owned
entity, having been previously connected to several US businesses,
Business Sale states.


VUE INTERNATIONAL: Moody's Cuts CFR to Caa2, Outlook Negative
-------------------------------------------------------------
Moody's Investors Service downgraded Vue International Bidco plc's
(VUE) corporate family rating to Caa2 from B3 and probability of
default rating to Caa2-PD from B3-PD. Concurrently, Moody's has
downgraded to Caa1 from B2 the instrument rating on the EUR634
million senior secured EUR-denominated term loan B1 due 2026 and
the GBP65 million senior secured revolving credit facility due
2025, both issued by VUE. The outlook on the ratings is negative.

RATINGS RATIONALE

"The rating action reflects the prospects of a meaningful delay in
the recovery in global cinema attendance, resulting among others
from the postponement of the release of blockbuster movies,
including the latest James Bond 'No Time To Die' delayed to April
2021 from November 2020, while there remains uncertainty on the
release of the movie slate due in the first half of 2021", says
Gunjan Dixit, Moody's Vice President -- Senior Credit Officer and
lead analyst for VUE. The prolonged subdued attendance will result
for VUE in a slower-than-expected de-leveraging and will weaken the
company's liquidity position which the rating agency forecasts to
be sufficient to cover cash burn for the next two quarters from
September 2020 assuming no meaningful pick up in attendance during
the period. Without a significant recovery thereafter, VUE would
need to explore additional funding options.

The meaningful delay in the recovery in global cinema attendance
has resulted in a significant proportion of cinemas across Europe
temporarily closing or operating on weekend-only hours, including
in the UK, VUE's largest market. Crown UK Holdco Limited
(Cineworld, Caa3 negative) announced it would temporarily shut its
127 cinema sites across the UK from 8th October 2020 and Odeon
(part of AMC Entertainment Holdings, Inc., AMC, Caa3 negative)
announced that a quarter of its 120 sites would operate at weekends
only. While VUE is still weighing its options in the UK around ways
it can leave theatres open, the reduced attendance and lack of
strong movie slate in Q4 2020, will cause Vue's leverage and free
cash flow to deteriorate meaningfully. VUE closed all its cinemas,
except for Taiwan, in the 3-week period from February 23 to March
17, 2020 due to the global outbreak of coronavirus. VUE started to
gradually reopen its cinemas from the end of May 2020 and by
September 3, 2020 all sites had reopened.

Moody's now believes that global cinema attendance will remain more
pressured in Q4 2020 and in early 2021 than it had previously
forecasted. This is because the list of blockbusters that have had
their premieres postponed to at least mid-2021 continues to grow
and includes Fast & Furious 9, The Walt Disney Company's (Disney,
A2 stable) Black Widow and The Eternals, and Jurassic World:
Dominion. Cinema attendance will also remain constrained due to the
social distancing measures that will stay in place until a vaccine
for preventing coronavirus is found and becomes widely available.

VUE's rated peers - AMC, Cineworld, and Cinemark USA, Inc.
(Cinemark, B3 negative) - generate a significant portion of their
revenue from the U.S. VUE's presence across European markets partly
offsets its exposure to the Hollywood film slate. Indeed, VUE
generated 54% of revenues from Europe excluding the UK and Ireland
in fiscal year ending November 30, (FY) 2019 where it is currently
seeing significant success and high admissions volumes from local
titles. The UK, where VUE operates 87 cinemas, is likely to be more
challenged.

Moody's now expects that VUE's revenue will drop by more than 50%
in FY 2020. The rating agency projects that the group's EBITDA
generation and cash flows will remain negative for the next two
quarters from September 2020. The cinemas (even if they remain open
in the UK) will operate at reduced capacity and potentially face
higher costs as government furlough schemes phase out, and cinemas
ensure the implementation of enhanced sanitary measures. In this
regard, Moody's does take note of the company's continuous efforts
to manage and reduce its cost base (particularly its negotiations
with landlords across regions for deferrals and discounts for
property rentals). Nonetheless, Moody's estimates that VUE's
adjusted EBITDA (after IFRS-16 implementation) will be minimal in
FY2020. As per Moody's revised forecasts, the company will end up
burning more cash than it previously anticipated.

While Moody's expects a gradual recovery in 2021, revenues will
likely remain well below 2019 levels in Moody's estimates. The
prospects of a slower recovery combined with very high leverage and
tough operating conditions as well as the structural challenges
facing the cinema industry, could continue to pose meaningful
challenges for VUE once the impact of coronavirus is phased off. In
Moody's view, the slower-than-expected recovery raises the risk of
a debt restructuring as the capital structure becomes
unsustainable.

VUE's liquidity will weaken significantly over the next two
quarters from September 2020 due to the projected cash burn. At the
end of May 2020 (latest data available), VUE had an unrestricted
cash balance of GBP101 million excluding drawings of GBP20 million
from the GBP50 million cash draw availability under its GBP65
million-equivalent senior secured multicurrency revolving credit
facility (RCF) maturing in 2025. On 24th September 2020, VUE
announced that it obtained a unanimous waiver on the springing
covenant of its RCF as lenders have agreed to waive the net
leverage covenant test for the next four testing dates up to and
including the end of August 2021 and the company will need to only
comply with a minimum liquidity test. VUE does not have any debt
maturities until 2025, when the RCF falls due.

Moody's does not currently factor in the CineStar acquisition
transaction in its analysis. In March 2020, VUE obtained
conditional clearance from the German authorities for the
acquisition of CineStar that was announced in October 2018. To
satisfy the conditions, VUE is required to sell six cinema sites in
Germany. The deadline to sell the sites has now been extended to
13th November 2020. If the transaction goes ahead, it will likely
further increase the group's leverage. Although at this stage,
Moody's sees the likelihood of this transaction completing as low.

The senior secured facilities and the RCF (both secured mainly on
share pledges and guaranteed by subsidiaries accounting for 80% of
group consolidated EBITDA) rank pari passu amongst themselves and
are rated Caa1, one notch higher than the group's CFR. This is
essentially due to the cushion provided by the GBP165 million of
PIK second lien facility which ranks behind the senior secured
facilities. Moody's has also given full equity credit to the
intercompany loan provided by VUE's holding company considering its
deep subordination in the capital structure. The maturity of the
intercompany loan, in December 2033, is beyond that of the senior
secured credit facilities and second lien facility.

ESG CONSIDERATIONS

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.
Moody's analysis has considered the effect on the performance of
VUE from the current weak economic activity in Europe 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 Moody's forecasts is unusually high. Cinema operators fall
amongst the industry sectors most significantly affected by the
shock triggered by the temporary closures of or low attendance at
their sites.

RATIONALE FOR THE NEGATIVE OUTLOOK

The negative outlook on the ratings reflects Moody's expectations
that VUE's leverage will spike materially in FY 2020 while the
company's liquidity position will deteriorate significantly over
the next couple of months raising the risk of a debt
restructuring.

Stabilization of the outlook would require the company to
proactively arrange additional funding to ensure adequate liquidity
buffer for the coming 12 months.

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

Upward pressure is unlikely over the coming 12-18 months. Over time
it may arise if (1) VUE's operating profitability improves
steadily, (2) its Moody's adjusted gross leverage improves
significantly driven by EBITDA growth or debt reduction and (2) VUE
improves its liquidity position and returns to at least flat FCF.

Downward pressure may arise should there be (1) a
larger-than-expected drain on the company's liquidity position over
the coming months; (2) evidence of lower potential recoveries for
lenders in any potential debt restructuring.

PRINCIPAL METHODOLOGY

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

COMPANY PROFILE

VUE is a leading international cinema operator, managing respected
brands in major European markets. For the 12 months ended November
30, 2019, prior to the coronavirus outbreak, the company generated
revenue of GBP854 million and reported EBITDA (constant currency,
perimeter) of GBP140 million. VUE is owned by OMERS (37.1%), AIMCo
(37.1%) and management.



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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,
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Editors.

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