/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/201028.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Wednesday, October 28, 2020, Vol. 21, No. 216 Headlines I R E L A N D JUBILEE CLO 2014-XII: Fitch Affirms B-sf Rating on Cl. F-R Notes PALMER SQUARE 2020-2: S&P Assigns Prelim. B- Rating on F Notes TYMON PARK: Fitch Raises Rating on Class E Debt to Bsf I T A L Y SOCIETA CATTOLICA: S&P Upgrades Tier 2 Debt Rating to 'BB+' L U X E M B O U R G INTRALOT CAPITAL: Fitch Hikes Sr. Unsec. Bond Rating to CC N E T H E R L A N D S DOMI 2020-2 BV: S&P Assigns B- Rating on EUR2.6MM Class X1 Notes DOMI BV 2020-2: Moody's Rates EUR11-Mil. Class X1 Notes 'Caa2' S P A I N PROMOTORA DE INFORMACIONES: S&P Cuts ICR to 'CC', Outlook Negative U N I T E D K I N G D O M ARLINGTON AUTOMOTIVE: Ricor Global Acquires Assets of NE Division CABOT FINANCIAL: S&P Withdraws BB- LongTerm Issuer Credit Rating CLARKS: To Discuss Restructuring Deal with Landlords This Week DONCASTERS GROUP: S&P Discontinues 'SD/D' Issuer Credit Rating EDINBURGH WOOLLEN: Gets More Time to Find Buyers, New Investors IBERICA: Operations of Five Outlets to Continue, 135 Jobs Saved INTU PROPERTIES: Sovereign Centros Acquires Intu Metrocentre REVOLUTION BARS: Plans to Close Six Branches, 130 Jobs At Risk - - - - - ============= I R E L A N D ============= JUBILEE CLO 2014-XII: Fitch Affirms B-sf Rating on Cl. F-R Notes ---------------------------------------------------------------- Fitch Ratings has affirmed Jubilee CLO 2014-XII and Jubilee CLO 2016-XVII. The ratings of class E and F notes of both transactions are off Rating Watch Negative (RWN) and assigned a Negative Outlook. RATING ACTIONS Jubilee CLO 2014-XII B.V. Class A-RR XS1672949523; LT AAAsf Affirmed; previously AAAsf Class B-1-RR XS1672950299; LT AAsf Affirmed; previously AAsf Class B-2-RR XS1672950612; LT AAsf Affirmed; previously AAsf Class C-R XS1672951180; LT Asf Affirmed; previously Asf Class D-R XS1672951776; LT BBBsf Affirmed; previously BBBsf Class E-R XS1672952154; LT BB-sf Affirmed; previously BB-sf Class F-R XS1672952667; LT B-sf Affirmed; previously B-sf Jubilee CLO 2016-XVII B.V. Class A-1-R XS1874092684; LT AAAsf Affirmed; previously AAAsf Class A-2-R XS1879631254; LT AAAsf Affirmed; previously AAAsf Class B-1-R XS1874092924; LT AAsf Affirmed; previously AAsf Class B-2-R XS1874093146; LT AAsf Affirmed; previously AAsf Class C-R XS1874093575; LT Asf Affirmed; previously Asf Class D-R XS1874093906; LT BBB-sf Affirmed; previously BBB-sf Class E-R XS1874094201; LT BB-sf Affirmed; previously BB-sf Class F-R XS1874094466; LT B-sf Affirmed; previously B-sf TRANSACTION SUMMARY Both are cash flow CLOs mostly comprising senior secured obligations. Both transactions are in the reinvestment period and the portfolios are actively managed by the asset manager. KEY RATING DRIVERS Coronavirus Baseline Scenario Impact Fitch carried out a sensitivity analysis on the portfolio to envisage the coronavirus baseline scenario. The agency notched down the ratings for all assets with corporate issuers on Negative Outlook regardless of sector. This scenario shows resilience of the current ratings of class A to C notes of both transactions with cushions. This supports the affirmation with a Stable Outlook for these tranches. The removal of the RWN on class E and F in both transactions reflects its expectation of a slowdown in the portfolio's negative rating migration as a result of stabilising portfolio performance, making a category-level downgrade less likely in the short term. The Negative Outlook on class D to F for both transactions reflect the risk of credit deterioration over the longer term, due to the economic fallout from the pandemic. The rating of class E of Jubilee 2016-XVII is one notch higher than its model-implied (MIR), since the moderate shortfall in the current portfolio analysis is largely driven by a rising interest-rate scenario, which is not its base case assumption. The rating of class F in Jubilee 2014-XII is one notch above the MIR whereas the MIR of class F in Jubilee 2016-XVII is below CCC. The deviation from the MIRs is based on the credit enhancement levels, which still provide a safety margin to the notes. 'CCC' means default is a real possibility and this is not the case for the class F notes. Portfolio Quality Improved; Yet Below Par While the portfolio credit quality has improved as a result of the active portfolio management, in particular, the sale of lowly rated assets, both transactions have lost some par value and are currently below par. All tests including the coverage tests are passing, except the Fitch WARF test and the 'CCC' limit. In the case of Jubilee 2016-XVII, the maximum fixed-rate asset limit is also exceeded. As per Fitch calculation, the portfolio's weighted average rating factor (WARF) is 35.1 and 35.2, respectively, for Jubilee 2014-XII and 2016-XVII, and would increase by around 3bp in its coronavirus sensitivity analysis for both transactions. Assets with a Fitch-derived rating (FDR) on Negative Outlook are at 32% of the portfolio balance for both transactions. Assets with a Fitch derived rating (FDR) of 'CCC' category or below (including unrated assets and excluding assets with Fitch rating of 'D') are respectively 11% and 12% in Jubilee 2014-XII and 2016-XVII. If excluding unrated assets, such exposure will reduce 2%. The portfolio is reasonably diversified with the top 10 obligors and the largest obligor, as well as the industry exposure within the limits per the portfolio profile tests. Semi-annual paying obligations represent 37%-38% of the portfolio balance in both transactions. However, no frequency event has occured due to the high interest coverage ratios. High Recovery Expectations Majority of the portfolios comprise senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch's weighted average recovery rate (WARR) of the current portfolios based on its latest criteria is 62.5% and 62.9% respectively for Jubilee 2014-XII and 2016-XVII. However, based on the documentation, both portfolios would have a higher WARR and therefore the Fitch WARR tests are passing per the investor reports. For its rating analysis, Fitch applies the latest criteria. 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, as well as 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. In addition, Fitch also tests the current portfolio with a coronavirus sensitivity analysis to estimate the resilience of the notes' ratings. The analysis for the portfolio with a coronavirus sensitivity analysis was only based on the stable interest-rate scenario but included all default timing scenarios. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: The transaction features a reinvestment period and the portfolio is actively managed. 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. After the end of the reinvestment period, upgrades may occur in case of better-than-initially expected portfolio credit quality and deal performance, leading to higher credit enhancement for the notes and excess spread available to cover for losses in the remaining portfolio. Factors that could, individually or collectively, lead to negative rating action/downgrade: Downgrades may occur if the build-up of the notes' credit enhancement following amortisation does not compensate for a larger loss expectation than initially assumed due to unexpectedly high levels of default and portfolio deterioration. As the disruptions to supply and demand due to COVID-19 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. PALMER SQUARE 2020-2: S&P Assigns Prelim. B- Rating on F Notes -------------------------------------------------------------- S&P Global Ratings assigned its preliminary credit ratings to Palmer Square European Loan Funding 2020-2 DAC's class A, B, C, D, E, and F notes. At closing, the issuer will also issue unrated subordinated notes. Under the transaction documents, the rated notes will pay quarterly interest unless there is a frequency switch event. Following this, the notes will switch to semiannual payment. The preliminary ratings assigned to the notes reflect S&P's assessment of: -- The diversified collateral pool, which primarily comprises syndicated speculative-grade senior secured term loans and bonds that are governed by collateral quality tests. -- The credit enhancement provided through the subordination of cash flows, excess spread, and overcollateralization. -- The portfolio's static nature, where the CLO manager is only allowed to sell assets and use proceeds to pay down the notes in order of seniority. Portfolio Benchmarks Current S&P weighted-average rating factor 2,496.74 Default rate dispersion 754.54 Weighted-average life (years) 5.20 Obligor diversity measure 107.88 Industry diversity measure 19.32 Regional diversity measure 1.70 Transaction Key Metrics Current No. of assets 118 No. of obligors 116 Portfolio weighted-average rating derived from S&P's CDO evaluator 'B' 'CCC' category rated assets (%) 0.33 'AAA' weighted-average recovery (%) 39.74 S&P said, "Our preliminary ratings reflect our assessment of the preliminary collateral portfolio's credit quality, which has a weighted-average rating of 'B'. We consider that the portfolio will be well-diversified on the issue date, primarily comprising broadly syndicated speculative-grade senior secured term loans and senior secured bonds. Therefore, we conducted our credit and cash flow analysis by applying our criteria for corporate cash flow collateralized debt obligations. "In our cash flow analysis, we used the target par amount, the portfolio's weighted-average spread, and the weighted-average recovery rates for all rating levels. We applied various cash flow stress scenarios, using four different default patterns, in conjunction with different interest rate stress scenarios for each liability rating category. "We expect that the transaction's documented counterparty replacement and remedy mechanisms will adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "Following the application of our structured finance sovereign risk criteria, we consider the transaction's exposure to country risk to be limited at the assigned preliminary ratings, as the exposure to individual sovereigns does not exceed the diversification thresholds outlined in our criteria. "At closing, we consider that the transaction's legal structure will be bankruptcy remote, in line with our legal criteria. "In light of the rapidly shifting credit dynamics within CLO portfolios due to continuing rating actions on speculative-grade corporate loan issuers, and in line with paragraph 15 of our global corporate CLO criteria, we have considered a minimum cushion between the break-even default rate (BDR) and the scenario default rate (SDR) of 2%. This was motivated by the fact that the CLO manager will have limited ability to actively manage the portfolio's credit risk and weighted-average cost of debt (WACD) in a downturn scenario. "In our view, the portfolio is granular in nature, and well-diversified across obligors, industries, and asset characteristics when compared to other CLO transactions we have rated recently. This has resulted in lower SDRs and higher weighted-average recovery rates. Consequently, our credit and cash flow analysis indicate that the available credit enhancement for the class C and F notes could withstand stresses commensurate with higher rating levels than those we have assigned. Nevertheless, we have assigned our 'AAA (sf)', 'AA+ (sf)', 'A (sf)', 'BBB- (sf)', 'BB- (sf)', and 'B- (sf)' to the class A, B, C, D, E, and F notes, respectively, due to the portfolio's static nature and the CLO manager's limited ability to effectively manage the WACD. "Following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe that our preliminary ratings are commensurate with the available credit enhancement for the class A, B, C, D, E, and F notes. "In addition to our standard analysis, to provide an indication of how rising pressures among speculative-grade corporates could affect our ratings on European CLO transactions, we have also included the sensitivity of the preliminary ratings on the class A to E notes to five of the 10 hypothetical scenarios we looked at in our recent publication. "As our ratings analysis makes additional considerations before assigning ratings in the 'CCC' category, and we would assign a 'B-' rating if the criteria for assigning a 'CCC' category rating are not met, we have not included the above scenario analysis results for the class F notes." 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." Environmental, social, and governance (ESG) credit factors S&P said, "We regard the exposure to ESG credit factors in the transaction as being broadly in line with our benchmark for the sector. We view the exposure to environmental credit factors as below average, social credit factors as below average, and governance credit factors as average. Accordingly, since there are no material differences from our ESG benchmark for the sector, we have made no specific adjustments in our rating analysis to account for any ESG-related risks or opportunities." Ratings List Class Prelim. rating Prelim. amount Credit enhancement (%) (mil. EUR) A AAA (sf) 197.40 34.20 B AA+ (sf) 27.60 25.00 C A (sf) 19.80 18.40 D BBB- (sf) 19.40 11.93 E BB- (sf) 10.20 8.43 F B- (sf) 4.40 7.07 Sub NR 21.10 N/A NR--Not rated. N/A--Not applicable. TYMON PARK: Fitch Raises Rating on Class E Debt to Bsf ------------------------------------------------------ Fitch Ratings has upgraded six tranches of Tymon Park CLO DAC. RATING ACTIONS Tymon Park CLO DAC Class A-1A-R XS1748399489; LT AAAsf Affirmed; previously AAAsf Class A-1B-R XS1748400162; LT AAAsf Affirmed; previously AAAsf Class A-2A-R XS1748400832; LT AA+sf Upgrade; previously AAsf Class A-2B-R XS1748401301; LT AA+sf Upgrade; previously AAsf Class B-R XS1748402028; LT A+sf Upgrade; previously Asf Class C-R XS1748402705; LT BBB+sf Upgrade; previously BBBsf Class D-R XS1748403422; LT BB+sf Upgrade; previously BBsf Class E XS1280877611; LT Bsf Upgrade; previously B-sf TRANSACTION SUMMARY Tymon Park CLO DAC is a securitisation of mainly senior secured loans (at least 90%) with a component of senior unsecured, mezzanine and second-lien loans. The portfolio is managed by Blackstone/GSO Debt Funds Management Europe Limited. The transaction exited its reinvestment period in January 2020. KEY RATING DRIVERS Transaction Deleveraging The upgrades reflect the deleveraging of the transaction since it exited its reinvestment period in January 2020. The class A-1-R notes have paid down around EUR27.4 million, bringing credit enhancement up to 42.63% from 39.25%. As of September 15, 2020, the portfolio exhibited a weighted average life (WAL) of 4.31 years against a current WAL test of 4.5 years. In addition, performance has been satisfactory and the transaction is passing all the par value and coverage tests, Fitch collateral quality tests and portfolio profile tests except for the Fitch 'CCC' portfolio profile test. Portfolio Performance Stabilises As of the latest investor report dated September 15, 2020, the transaction was 0.86% above par. As of the same report, the transaction had no defaulted assets. Exposure to assets with a Fitch-derived rating (FDR) of 'CCC+' and below was 10.28%. Assets with a FDR on Negative Outlook were 21.39% of the portfolio balance. 'B'/'B-' Portfolio Credit Quality Fitch assesses the average credit quality of the obligors in the 'B'/'B-' category. The Fitch weighted average rating factor (WARF) of the current portfolio is 35.02 (assuming unrated assets are 'CCC') - below the maximum covenant of 36 and the trustee-reported Fitch WARF of 35.12. After applying its coronavirus stress, the Fitch WARF would increase by 3.06. High Recovery Expectations Senior secured obligations comprise 99% of the portfolio. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. Diversified Portfolio The portfolio is well-diversified across obligors, countries and industries. The top-10 obligors represent 14.41% of the portfolio balance with no obligor accounting for more than 1.82%. Around 45% of the portfolio consists of semi-annual obligations but a frequency switch has not occurred due to the transaction's high interest coverage ratios. 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, as well as 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. In addition, Fitch 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 but included all default timing scenarios. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: A reduction of the mean rating default rate (RDR) at all rating levels by 25% and an increase in the rating recovery rate (RRR) by 25% at all rating levels will result in upgrades of no more than three notches across the structure. Factors that could, individually or collectively, lead to negative rating action/downgrade: An increase of the mean RDR at all rating levels by 25% and a decrease of the RRR by 25% at all rating levels will result in downgrades of two to three notches across the structure, except for the class A-1-R notes whose rating would be unaffected in such a scenario. Downgrades may occur if the build-up of credit enhancement following amortisation does not compensate for a larger loss than initially assumed due to unexpectedly high levels of defaults and portfolio deterioration. As disruptions to supply and demand due to the pandemic become apparent, loan ratings in those vulnerable sectors will also come under pressure. Fitch will update the sensitivity scenarios in line with the view of its leveraged finance team. Coronavirus Baseline Sensitivity Analysis For the sensitivity analysis, Fitch notched down the ratings for all assets with corporate issuers on Negative Outlook regardless of sector. Under this scenario, all classes exhibit healthy cushions at their current ratings. It is Fitch's view that the portfolio's negative rating migration is likely to slow down, following a stabilisation of the portfolio's performance. The Stable Outlooks on the tranches reflect the resilience of their ratings under the coronavirus baseline sensitivity analysis. 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 rating-category change for all ratings. USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY The majority of the underlying assets 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. ========= I T A L Y ========= SOCIETA CATTOLICA: S&P Upgrades Tier 2 Debt Rating to 'BB+' ----------------------------------------------------------- S&P Global Ratings said that it revised its outlook on Societa Cattolica di Assicurazione (Cattolica) to stable from negative. At the same time, S&P Global Ratings affirmed its 'BBB' long-term issuer credit rating on Cattolica, and raised its issue rating on the insurer's Tier 2 notes to 'BB+' from 'BB'. The outlook revision follows that on Italy. S&P said, "We believe Cattolica benefits from the improved credit risk associated with Italian sovereign bonds. As of June 30, 2020, the insurer had invested about EUR13 billion in Italian government securities, corresponding to the 52.3% of its total investments and to 5.5x its consolidated shareholders' equity. Because of its material investment exposure to Italian assets, we cap our rating on Cattolica at the long-term sovereign credit ratings on Italy. "Cattolica's stand-alone credit profile (SACP)--our opinion of its creditworthiness before accounting for sovereign risk--is unchanged at 'bbb+', one notch higher than the ratings. Although the capital increases strengthen Cattolica's financial risk profile to satisfactory, we still believe a 'bbb+' SACP well reflects the insurer's intrinsic creditworthiness, especially given heightened market and economic uncertainty. "The regulator approved Cattolica's change of legal status in that of a joint-stock company, and holders of only the 11.64% of shares exercised their right of withdrawal. We understand, therefore, that Italian insurer Generali has completed its EUR300 million committed capital increase in Cattolica this month. Thereafter, Cattolica will have a month to offer the withdrawn shares at EUR5.47 each to existing shareholders, in an attempt to reduce the EUR111 million disbursement linked to the share repurchase. Subsequently, the insurer will proceed with the additional EUR200 million capital increase with option rights for all shareholders, which we expect will conclude in January 2021. "The capital increase significantly reduces the likelihood that Cattolica could defer the coupon payment on its two Tier 2 rated instruments, so we are applying the usual double notching for rating junior subordinated debt issue, reflecting their subordination and interest deferral features, and upgrading the hybrids to 'BB+' from 'BB'. "This action on the hybrids reverses the downgrade on June 10, when we widened the notching following the sharp decline in Solvency II ratio, due to lower risk-free rates, wider spreads on Italian government bonds, and a decrease in the volatility adjustment. Since then, the favorable Italian spread dynamics have brought the SII ratio back to 154% as of August, and we expect the capital increases to materially strengthen it further, building a buffer to cope with potential market volatility. "We expect Cattolica's operating performance to remain resilient in 2020 despite COVID-19, because the company has confirmed its pre-pandemic guidance. Despite the drop in gross written premiums following strict lockdown measures in Italy from March-May, we believe that the sound technical performance in the property and casualty business lines, especially in motor, will enable the company to reach net income of above EUR100 million this year (including minority interests and excluding goodwill impairments)." The stable outlook mirrors that on Italy. -- S&P could upgrade the rating on Cattolica over the next 12-24 months following an upgrade of Italy. -- S&P could lower the ratings on the insurer over the next 12-24 months if it lower its long-term rating on Italy. =================== L U X E M B O U R G =================== INTRALOT CAPITAL: Fitch Hikes Sr. Unsec. Bond Rating to CC ---------------------------------------------------------- Fitch Ratings has affirmed Greek gaming group Intralot S.A.'s (Intralot) Long Term Issuer Default Rating (IDR) at 'CC'. It has also upgraded the senior unsecured rating on the bonds issued by Intralot Capital Luxembourg S.A., and guaranteed by Intralot's key subsidiaries, to 'CC'/'RR4' from 'C'/'RR5'. The upgrade of the senior unsecured rating reflects a lower amount of Intralot's priority debt following the expiry of the company's USD40 million US revolving credit facility (RCF). This in turn leads to higher recoveries noteholders based on the current capital structure. The 'CC' IDR reflects heightened debt restructuring risk due to current negotiations between Intralot and its bondholders regarding the upcoming EUR250 million bond maturity in September 2021. Fitch would view a debt restructuring as a Default or Restricted Default under its Criteria. Should this occur, post-restructuring Fitch would assign a rating to reflect the new capital structure in place, and the growth prospects that such a new structure would allow Intralot to pursue. Although liquidity is being eroded, Fitch views it sufficient for Intralot to continue operating over the next few months until a new capital structure is implemented. KEY RATING DRIVERS Capital Structure Restructuring Inevitable: Fitch expects Intralot to see a debt restructuring to refinance its EUR250 million September 2021 senior secured bond, and highly likely also its EUR474 million senior unsecured bond due in 2024 given cross-acceleration provisions. The terms of the 2021 bond prevent a refinancing for the full amount on a secured basis. Fitch estimates that Intralot's funds from operations (FFO) adjusted gross leverage will remain high at above 10x by September 2021 when the EUR250 million bond is due implying an unsustainable capital structure that will require a long-term resolution. Average Recoveries for Bondholders: The non-renewal of the USD40 million senior secured RCF has improved recovery prospects for senior unsecured notes, leading to an instrument rating upgrade to 'CC'/RR4 from 'C'/RR5 as per Fitch Corporates Notching and Recovery Ratings Criteria. Based on the current capital structure, Fitch estimates that bondholders would be subordinated to EUR26 million of priority debt. In case a large amount of senior secured debt is introduced as part of the debt restructuring, this would diminish the recovery prospects for senior unsecured note holders. High Pandemic Exposure: Intralot's revenues fell 25% yoy in 1H20 - pro-forma for Bulgaria and Inteltek contracts discontinuation - as the pandemic led to closures of gaming halls and cancellations of sports events. Fitch forecasts that Intralot will generate negative free cash flow (FCF) of over EUR70 million in 2020 despite cost-cutting and some capex reductions. This will erode Intralot's liquidity, which comprised EUR119 million unrestricted cash (as per Fitch's definition) at end-2019, although leaving sufficient cash to operate until the next bond maturity in September 2021. Growing US Exposure: Intralot's US subsidiary has become the largest EBITDA contributor due to a contraction in Intralot's contract portfolio. The relative resilience of the US operations during the first wave of the pandemic compared with other countries further increased Intralot's reliance on the US, which generated nearly 90% of 1H20 Intralot-defined EBITDA. In its view, Intralot Inc. could generate around EUR45million-EUR50 million annualised EBITDA over the next three years, more than half of total EBITDA. However, Fitch believes that fierce competition from larger gaming operators would constrain Intralot's expansion in the growing US market. Shrinking Contract Portfolio: Intralot's contract portfolio has materially shrunk over the last two years due to asset disposals (Poland, Azerbaijan), contract loss (Morocco, Turkey) or legal issues (Bulgaria). Fitch sees renewal risk for its Bilyoner contract in Turkey (4% of Intralot's proportionate EBITDA), which is renewed every few months. The renewal of the contract in Malta in 2022 (14.9% of 2019 proportionate EBITDA) could entail higher capex in line with prior years, which cannot be accommodated under the current capital structure. In its view, Intralot lacks scale relative to larger competitors such as IGT or Scientific Games to sustain its contract portfolio. Favourable Underlying Industry Trends: The gradual liberalisation of gaming markets, notably in the US, governments' keenness on finding ways to raise tax proceeds and digitalisation of lotteries should provide growth opportunities for Intralot. It should be able to leverage on its track record and technical reputation and benefit from a limited number of reputable suppliers in the industry, allowing it to expand into new countries. However, the lack of access to funding has constrained it to move toward an asset-light strategy, reducing opportunities to regain scale. DERIVATION SUMMARY Intralot's current financial profile is not comparable with that of other gaming companies such as Flutter Entertainment plc (BBB-/Negative), GVC Holdings Plc (BB/Negative), Sazka Group a.s. (BB-/Negative). Intralot is similar in business-profile characteristics to Inspired Entertainment, Inc. (CCC+), but has higher refinancing risk, and debt restructuring seems inevitable, which is consistent with a 'CC' rating. Intralot has smaller size and lower profitability than gaming operator Codere (CCC(EXP)), which is currently in the middle of a debt restructuring process. The two-notch difference is driven by its expectations of Intralot's upcoming debt restructuring. KEY ASSUMPTIONS Fitch's Key Assumptions Within Its Rating Case for the Issuer - Revenue to fall around 50% in 2020 due to the impact of the coronavirus pandemic and shutdown of Bulgarian operations. Fitch forecasts revenues trending towards EUR390 million-EUR400 million by 2022. - Taxes claimed by the Bulgarian authorities are not paid. Operations in Bulgaria do not resume. - EBITDA margin in 2020 contracting to around 12%, before recovering towards 17%-18% by 2022. - Capex of around EUR40 million-EUR50 million per year up to 2023. - No material M&A activity and no common dividends for the next four years. Key Recovery Rating Assumptions In its bespoke going-concern recovery analysis Fitch considered an estimated post-restructuring EBITDA available to creditors of around EUR55 million, which would allow Intralot to continue operating as a going concern. Fitch applied a distressed enterprise value (EV)/ EBITDA multiple of 5x to Intralot's wholly-owned operations. Fitch also estimates approximately EUR10 million of additional value stemming from associates. The USD40 million RCF previously provided to Intralot Inc. has not been renewed, reducing the amount of priority debt. After deducting 10% for administrative claims, its principal waterfall analysis generated a ranked recovery in the 'RR4' band, indicating a 'CC' instrument rating. The waterfall analysis output percentage on current metrics and assumptions is 32%, in the low-end of the 'RR4' band, versus 26% or 'RR5' previously, leading to a one notch upgrade of the senior unsecured rating. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: - Reducing immediate refinancing risk from a successful refinancing of the EUR250 million bond due September 2021, coupled with liquidity sufficient to support operations over the next 12 months; - Sustained improvement in operating performance, for example through winning new contracts or improving performance of existing ones, combined with efficient cost-cutting measures, leading to growing EBITDA and FFO, hence allowing for deleveraging; and - FFO fixed charge cover sustainably above 1.2x. Factors that could, individually or collectively, lead to negative rating action/downgrade: - Public announcement that a default or default-like process has begun or is imminent, such as a debt restructuring plan; and - Lack of sufficient operational liquidity cushion. LIQUIDITY AND DEBT STRUCTURE Eroding Liquidity: Intralot's current liquidity profile continues to benefit from completion of its asset disposal programme in 2019 for around EUR100 million. Intralot has used around EUR30 million cash during 1H20 to pay interest charges of EUR23 million; the latter exceeded Fitch-defined EBITDA of EUR21 million. As of June 30, 2020, Fitch estimates that Intralot had around EUR95 million-EUR100 million readily available cash (excluding EUR30 million restricted cash for working capital, and around EUR10 million cash located in partnerships and not fully owned subsidiaries). This cash position included a EUR18 million secured and fully drawn overdraft, the repayment of which can be requested at any time. Fitch expects liquidity to tighten over the next few months due to negative FCF, although prudent cash management reduces the pace of liquidity utilisation until bond refinancing in September 2021. Intralot has no committed credit lines, even at operating companies, since the USD40 million RCF granted to the US subsidiary expired in August 2020. CRITERIA VARIATION Intralot's financial access in its Corporate Rating Criteria does not envisage financial market development (FMD) scores below 'b'. Greece, where Intralot is headquartered, has an FMD score of 'ccc'. As an issuer with average access to its local market and limited access to international funding, the Financial Access score matches the FMD of Greece. given its heavy reliance on the local financial market and inability to access international markets. Consequently, the issuer's Operating Environment is limited to 'b+' compared with 'bb+' previously. 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 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. ===================== N E T H E R L A N D S ===================== DOMI 2020-2 BV: S&P Assigns B- Rating on EUR2.6MM Class X1 Notes ---------------------------------------------------------------- S&P Global Ratings assigned credit ratings to Domi 2020-2 B.V.'s class A, and B-Dfrd to E-Dfrd and X1-Dfrd interest deferrable notes. Domi 2020-2 is a static RMBS transaction that securitizes a portfolio of EUR258.7 million (EUR272.3 million including the 5% held by the risk retention holder) buy-to-let (BTL) mortgage loans secured on properties in the Netherlands. The loans in the pool were originated by Domivest B.V. between 2018 and 2020. 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. S&P considered the collateral performance to be strong as evidenced by the low level of loans in arrears in the securitized pool. That said, the originator has a limited track record of nearly three years of mortgage lending. The transaction features a one-month prefunding period over which the mortgages originated in September (approximately EUR20 million) will be sold to the issuer once they have made their first instalment. Credit enhancement for the rated notes consists of subordination from the closing date. The transaction features a general reserve fund to provide liquidity. There were no rating constraints in the transaction under S&P's counterparty, operational risk, or structured finance sovereign risk criteria. It considered the issuer to be bankruptcy remote. Ratings List Class Rating* Class amount (EUR mil.) A AAA (sf) 227.6 B-Dfrd AA+ (sf) 13.6 C-Dfrd AA (sf) 6.5 D-Dfrd A+ (sf) 3.9 E-Dfrd BBB- (sf) 3.9 F-Dfrd NR 3.2 X1-Dfrd B- (sf) 11.6 X2-Dfrd NR 2.6 Z NR N/A *S&P's ratings address timely receipt of interest and ultimate repayment of principal on the class A notes, and the ultimate payment of interest and principal on the other rated notes. NR--Not rated. N/A-Not available. DOMI BV 2020-2: Moody's Rates EUR11-Mil. Class X1 Notes 'Caa2' -------------------------------------------------------------- Moody's Investors Service assigned definitive ratings to Notes issued by Domi 2020-2 B.V.: EUR227,624,000 Class A Mortgage Backed Notes due November 2052, Definitive Rating Assigned Aaa (sf) EUR13,580,000 Class B Mortgage Backed Notes due November 2052, Definitive Rating Assigned Aa2 (sf) EUR6,467,000 Class C Mortgage Backed Notes due November 2052, Definitive Rating Assigned A1 (sf) EUR3,880,000 Class D Mortgage Backed Notes due November 2052, Definitive Rating Assigned Baa2 (sf) EUR3,880,000 Class E Mortgage Backed Notes due November 2052, Definitive Rating Assigned Ba1 (sf) EUR11,640,000 Class X1 Notes due November 2052, Assigned Caa2 (sf) Moody's has not assigned any ratings to the EUR 3,233,000 Class F Mortgage Backed Notes due November 2052, the EUR 2,587,000 Class X2 Notes due November 2052 and the Class Z Notes due November 2052. RATINGS RATIONALE The Notes are backed by a static pool of Dutch buy-to-let ("BTL") mortgage loans originated by Domivest B.V. This represents the third issuance of this originator. The portfolio of assets amounts to EUR 258.7 million as of September 30, 2020. On the closing date part of the proceeds of the note's issuance was deposited in a separate account, and will be used prior to the first note payment date to finance the purchase by the issuer of additional loans. The additional pool consists of loans originated in September 2020. Moody's analysis of this transaction is based on the portfolio including the additional pool. The Reserve Fund is funded at 0.75% of the Notes balance of Class A at closing with a target of 1.5% of Class A Notes balance until the step-up date. The total credit enhancement for the Class A Notes at closing will be 12.0% in addition to excess spread and the credit support provided by the reserve fund. The ratings are primarily based on the credit quality of the portfolio, the structural features of the transaction and its legal integrity. According to Moody's, the transaction benefits from various credit strengths such as a static portfolio and an amortising reserve fund sized on aggregate at closing at 0.75% of Class A Notes' principal amount. However, Moody's notes that the transaction features some credit weaknesses such as a small and unregulated originator also acting as master servicer and the focus on a small and niche market, the Dutch BTL sector. Domivest B.V. with its current size and set-up acting as master servicer of the securitised portfolio would not have the capacity to service the portfolio on its own. However, the day-to-day servicing of the portfolio is outsourced to Stater Nederland B.V. ("Stater", NR) as delegate servicer and HypoCasso B.V. (NR, 100% owned by Stater) as delegate special servicer. Stater and HypoCasso B.V. are obliged to continue servicing the portfolio after a master servicer termination event. The risk of servicing disruption is further mitigated by structural features of the transaction. These include, among others, the issuer administrator acting as a back-up servicer facilitator who will assist the issuer in appointing a back-up servicer on a best effort basis upon termination of the servicing agreement. Moody's determined the portfolio lifetime expected loss of 2.5% and Aaa MILAN credit enhancement ("MILAN CE") of 17.0% related to borrower receivables. The expected loss captures the expectations of performance considering the current economic outlook, while the MILAN CE captures the loss the portfolio would be expected to suffer in the event of a severe recession scenario. Expected defaults and MILAN CE are parameters used by Moody's to calibrate its lognormal portfolio loss distribution curve and to associate a probability with each potential future loss scenario in the ABSROM cash flow model. Portfolio expected loss of 2.5%: This is higher than the average in the Dutch RMBS sector and is based on Moody's assessment of the lifetime loss expectation for the pool taking into account: (i) that no historical performance data for the originator's portfolio is available; (ii) benchmarking with comparable transactions in the Dutch owner-occupied market and the UK BTL market; (iii) peculiarities of the Dutch BTL market, such as the relatively high likelihood that the lender will not benefit from its pledge on the rents paid by the tenants in case of borrower insolvency; and (iv) the current economic conditions and forecasts in The Netherlands. The MILAN CE for this pool is 17.0%: This is higher than that of other RMBS transactions in The Netherlands mainly because of: (i) the fact that no meaningful historical performance data is available for the originator's portfolio and the Dutch BTL market; (ii) the weighted average current loan-to-market value (LTMV) of approximately 70.0%; and (iii) the high interest only (IO) loan exposure (all loans are IO loans after being repaid to 60.0% LTV). Moody's also considered the high maturity concentration of the loans as more than 80% repay within the same year. Borrowers could be unable to refinance IO loans at maturity because of the lack of alternative lenders. Furthermore, while Domivest B.V. is using the market value in tenanted status in assessing the LTV upon origination, Moody's applied additional stress to the property values to account for the higher illiquidity of rented-out properties when being foreclosed and sold in rented state in a severe stress scenario. Due to the small and niche nature of the Dutch BTL market and the high tenant protection laws in The Netherlands Moody's considers likelihood that properties will have to be sold with tenants occupying the property higher than in other BTL markets, such as the UK. 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 consumer assets from the current weak economic activity in the Netherlands 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 Approach to Rating RMBS Using the MILAN Framework" published in May 2020. The analysis undertaken by Moody's at the initial assignment of ratings for RMBS securities may focus on aspects that become less relevant or typically remain unchanged during the surveillance stage. Factors that would lead to an upgrade or downgrade of the ratings: Factors that may cause an upgrade of the ratings of the Notes include significantly better than expected performance of the pool together with an increase in credit enhancement of Notes. Factors that would lead to a downgrade of the ratings include: (i) increased counterparty risk leading to potential operational risk of: (a) servicing or cash management interruptions; and (b) the risk of increased swap linkage due to a downgrade of the swap counterparty ratings; and (ii) economic conditions being worse than forecast resulting in higher arrears and losses. ========= S P A I N ========= PROMOTORA DE INFORMACIONES: S&P Cuts ICR to 'CC', Outlook Negative ------------------------------------------------------------------ S&P Global Ratings lowered its issuer credit rating on Promotora De Informaciones S.A. (Prisa) to 'CC' from 'CCC+'. S&P said, "The negative outlook indicates that we will lower the ratings on Prisa to 'SD' if and when the proposed debt restructuring is formalized. Subsequently, we will review the company's rating in the context of its resulting capital structure under its new scope of operations, its financial plans, and its liquidity situation. "In our view, Prisa's proposed transaction is distressed and, upon implementation, would prompt us to lower the rating on the company to 'SD' (selective default). Prisa announced on Oct. 19, 2020, that it had reached an agreement with about 80% of its lenders to modify and extend its proposed term loan. We believe the transaction will result in investors receiving less than originally promised in the original loans contract." In particular, S&P takes into consideration the following: -- S&P said, "The previous 'CCC+' rating on Prisa reflected our view that the company's current capital structure is unsustainable given its weak cash flow generation prospects, which obliged the company to ask for covenant holidays to avoid a breach. These circumstances point, in our view, to a distressed transaction, rather than an opportunistic one." -- Under the proposed terms of the new transaction, existing debtholders will agree to extend the maturity of their debt by a further two years, until 2025. -- The timing of payments is slowed (i.e. the revised loan will go to bullet from amortizing, as payments due in 2020 and 2021 are waived). S&P notes the EUR400 million prepayment following Santillana's Spain sale was mandatory under current documentation. -- The additional super senior basket of EUR110 million, if funded, will nearly double the super-priority debt present in the capital structure. -- S&P said, "The compensation for such an extension of the maturity is, in our view, insufficient. As per current documentation, it includes no additional compensation in 2021, and an increase of only 0.5% paid-in-kind (PIK) interest in 2022, the date of the original maturity, while the proposed consent fee is of 1.0% PIK. We only see a marginal cash interest increase of 0.5% in 2023 to March 31, 2025 together with a 3.0% PIK." -- The prepayment of debt with the proceeds of the sale of Santillana, although favorable for creditors, is a condition included in the documentation of the original loans. Subject to requisite consents and approvals needed to complete the transaction, the proposed agreement will include the following terms: -- A more generous reset of covenants, whereby the company will be required to meet a total net leverage covenant below 4.25x by 2023. -- A maturity extension of slightly over two years, to March 31, 2025, of the syndicated tranche 2 and tranche 3 of its current loan. -- Revised interest rates of 4.5% cash +1.0% PIK in 2021, 4.5% cash + 1.5% PIK in 2022 and 5.0% cash +3.0% PIK from 2023 to March 31, 2025. -- The repayment of EUR400 million of the syndicated tranche 2 and tranche 3 loans from the gross proceeds of the disposal of Santillana Spain for EUR465 million (including EUR53 million of net debt). -- Provision of up to EUR110 million new super senior notes that will rank pari passu with existing super senior debt and senior to existing syndicated loan. We understand that an initial EUR35 million tranche will be issued upon successful consent of the lock-up agreement. The additional EUR75 million of new money would only be issued subject to delivery of certain conditions. The proposed transaction should alleviate pressure on the group's liquidity and covenants over the next 12 months. Following the transaction, Prisa will likely have about EUR275 million of cash balances and super senior revolving credit facilities for liquidity needs, leaving the company with more leeway to develop its business roadmap. S&P said, "We note, however, that after the sale of Santillana Spain, the company will be even more exposed to foreign currency exchange risks and heightened market volatility in Latin America given all its debt is denominated in euros, while most remaining operations remain in Latin America. We also believe that, should the proposed transaction not materialize, or the lenders not grant a waiver, Prisa will have limited ability to meet its debt service cover covenant by Sept. 30, 2021 test date." Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety. S&P said, "The negative outlook indicates that we will lower the ratings on Prisa to 'SD' if and when the proposed debt restructuring is formalized. Subsequently, we will review the ratings on the company in the context of its resulting capital structure under its new scope of operations, its financial plans, and its liquidity situation. "We will lower our long-term issuer credit rating on Prisa to 'SD' upon completion of the restructuring. "Although unlikely at this time, we could raise our rating on Prisa if the company proposed a refinancing transaction that offered, in our view, a more adequate compensation to its creditors for the extension of their debt. This would also hinge on, in our opinion, a default no longer being a virtual certainty, for example, due to liquidity support and a further waiver of covenants." =========================== U N I T E D K I N G D O M =========================== ARLINGTON AUTOMOTIVE: Ricor Global Acquires Assets of NE Division ----------------------------------------------------------------- Rachel Covill at The BusinessDesk.com reports that Warwickshire-based international automotive supplier Ricor Global has acquired the assets of Arlington Automotive North East division which was placed into administration earlier this year. According to The BusinessDesk.com, as a major supplier to leading automotive OEM's and major Tier one customers, the acquisition will enable the Ricor Group to continue to develop and diversify to meet the demands of customers across the industry and around the world. The new business will trade as Ricor North East Ltd from its existing facility in Newton Aycliffe, The BusinessDesk.com discloses. Ricor has plans to develop the site which should create additional job opportunities, The BusinessDesk.com notes. The deal was supported by an invoice finance facility from HSBCUK, The BusinessDesk.com states. CABOT FINANCIAL: S&P Withdraws BB- LongTerm Issuer Credit Rating ---------------------------------------------------------------- S&P Global Ratings said that it has withdrawn its 'BB-' long-term issuer credit rating on Cabot Financial Ltd. and its 'BB-' issue ratings on the outstanding senior secured notes (issued by Cabot Financial (Luxembourg)) at the company's request. The outlook was stable at the time of the withdrawal. CLARKS: To Discuss Restructuring Deal with Landlords This Week -------------------------------------------------------------- Mark Kleinman at Sky News reports that the footwear retailer Clarks is kicking off talks with landlords about store closures and rent cuts, reviving tensions between high street shop-owners and tenants which have been thrust into sharp focus during the COVID-19 crisis. Sky News understands that Clarks and its advisers are meeting with landlords this week to discuss a restructuring that would see the chain switch to a "turnover rent" model for future rent payments. According to Sky News, the proposed deal, which must be approved by creditors, would be in the form of a company voluntary arrangement (CVA), a form of insolvency mechanism which has been, at times, controversially deployed by retailers and casual dining operators. If the CVA is approved, it would pave the way for Clarks to receive a cash injection of more than GBP100 million from LionRock Capital, a Hong Kong-based private equity firm, Sky News states. That would entail the founding Clark family, who established the business in Somerset in 1825, relinquishing majority ownership of the company for the first time, Sky News notes. The restructuring would also involve the permanent closure of roughly 50 UK shops, triggering hundreds of job losses, Sky News says. Clarks' pension trustees are expected to play a significant role in the CVA vote, with the deliberations over the chain's future coming as the COVID-19 pandemic continues to wreak havoc on Britain's high streets, according to Sky News. LionRock's injection of funds into Clarks is understood to be contingent upon the CVA being approved, making the restructuring vote critical to securing the company's future, according to Sky News. Clarks trades from about 345 stores in the UK, employing thousands of people, many of whom were furloughed under the government's Coronavirus Job Retention Scheme, Sky News discloses. In the last year for which figures are available, Clarks reported a post-tax loss of more than GBP80 million, Sky News recounts. DONCASTERS GROUP: S&P Discontinues 'SD/D' Issuer Credit Rating -------------------------------------------------------------- S&P Global Ratings said that it has discontinued all ratings on precision alloy component manufacturer Doncasters Group Ltd. and related entities. This follows its downgrade of the company to 'SD/D' on Jan. 29, 2020 following its restructuring announcement. Originally founded in 1778, the Doncasters Group is a leading international manufacturer of high-precision alloy components. Focusing largely on precision casting and superalloy production, its customers are largely original equipment manufacturers in the aerospace, industrial gas turbine, and specialist automotive industries. EDINBURGH WOOLLEN: Gets More Time to Find Buyers, New Investors --------------------------------------------------------------- Jonathan Eley at The Financial Times reports that Edinburgh Woollen Mill has been given more time to find buyers or new investors for its struggling businesses as an alternative to putting them into administration. The group, controlled by Switzerland-based tycoon Philip Day, had already filed a notice of intent to appoint FRP as administrators, giving it protection from any legal action by its creditors, the FT relates. The notice was extended for two weeks on Oct. 23, the FT notes. Four chains are affected: discount fashion retailer Peacocks, knitwear specialist Edinburgh Woollen Mill, homewares group Ponden Mill and Jaeger, a stable of more upmarket brands, the FT discloses. According to the FT, people briefed on the process said US hedge fund Davidson Kempner was in talks with Mr. Day and his advisers regarding the acquisition of a 25% stake in Peacocks, while Torque Brands had expressed interest in Jaeger, which also owns the Austin Reed and Jacques Vert brands. The fate of Edinburgh Woollen Mill, many of whose 400 stores are found in tourist destinations where footfall has been sharply lower as a result of Covid-19, is less certain, the FT notes. Ponden Mill, a small chain that faces intense competition from bigger rivals such as The Range, B&M, Home Bargains and supermarkets, is also regarded as less attractive for bidders, the FT states. If buyers or investors cannot be found then the companies will go into administration, the FT says. According to the FT, restructuring experts said it was possible that Mr Day would reacquire Peacocks in a "prepack" administration, with the insolvency process allowing him to close unprofitable stores among its 500-strong estate. The group has said that between them, the companies employ more than 20,000 people although the last published accounts for EWM Group put the total at closer to 11,000, the FT relates. EWM said on Oct. 9 that the loss of trade credit insurance and Covid-19 had resulted in a sharp deterioration in trading, the FT recounts. IBERICA: Operations of Five Outlets to Continue, 135 Jobs Saved --------------------------------------------------------------- Jo Gilbert at Harpers.co.uk reports that Spanish tapas restaurant and bar group Iberica has successfully emerged from the threat of insolvency, saving around 135 jobs and five out of seven outlets. The tapas chain suffered as a result of its location in Central London this year, Harpers.co.uk discloses. Low footfall in the area severely impacted the business' ability to recover from lockdown, Harpers.co.uk states. A CVA (Company Voluntary Arrangement) was subsequently approved in late September to sort through the company's debts, Harpers.co.uk relates. Creditors have chosen to stick by the business, however, Harpers.co.uk notes. According to Harpers.co.uk, Iberica's four sites in London and one in Leeds will continue to operate, though the restructuring will see the closure of its Glasgow and Manchester restaurants. On Oct. 26, the business said a key factor in the CVA negotiations involved the introduction of a flexible rent period, Harpers.co.uk relays. Landlords will now offer a rental concession up until the end of July 2021, Harpers.co.uk states. During this period, sites will concede quarterly rent in arrears amounting to 10% of their ongoing revenue, Harpers.co.uk relays. INTU PROPERTIES: Sovereign Centros Acquires Intu Metrocentre ------------------------------------------------------------ Sahar Nazir at Retail Gazette reports that Intu Metrocentre has been acquired by London-based real estate developer Sovereign Centros, as the assets of former landlord Intu continue to be offloaded. According to Retail Gazette, Sovereign Centros, which also operates other retail schemes including the Telford Centre and St Enoch in Glasgow, said it would manage the centre, while property firm Savills will take responsibility for the onsite property management. The company said it will "inject new life" into the Metrocentre and would potentially make up to GBP25 million available for future investment in the site, Retail Gazette relates. The landlord also said it will invest in the adjacent retail park and bring in "new" and "exciting" occupiers, Retail Gazette notes. Intu Metrocentre owner Intu fell into administration in June, after failing to reach a standstill agreement with its creditors, Retail Gazette recounts. REVOLUTION BARS: Plans to Close Six Branches, 130 Jobs At Risk -------------------------------------------------------------- Fiona Thompson at The Shields Gazette reports that the bosses of Revolution Bars are looking to close six branches, putting 130 jobs at risk. According to The Shields Gazette, the chain has turned to its creditors for help after the Government's 10:00 p.m. curfew cut its sales by more than a third, having warned the move would put its business at risk, with a tough Christmas period ahead. Its bar in Low Row in Sunderland remains closed, while its venues in North Road in Durham and Collingwood Street in Newcastle are open, The Shields Gazette discloses. They are only able to take bookings of up to six people from the same household under the Tier 2 rules, The Shields Gazette states. The company has not said which six bars of the 50 it has across the UK will close, The Shields Gazette notes. The firm, which employs around 2,500 people in total, said its subsidiary, Revolution Bars Limited, is to set up a company voluntary arrangement (CVA) as it tries to slash costs, The Shields Gazette relates. According to The Shields Gazette, creditors will vote on Friday, Nov. 13, to accept the deal, which includes plans to reduce rents at seven bars in addition to the plan to close six of its branches. Revolution Bars' comparative sales had been bouncing back before the curfew was put into place, reaching nearly 78% of last year's levels in the three weeks before the restriction was introduced, The Shields Gazette relays. However, since then sales have fallen to less than half of last year's levels, at 49.4%, The Shields Gazette says. The company, as cited by The Shields Gazette, said it expects the important Christmas period to be "severely compromised" and that it will not be possible to return to "near normal levels" before spring at the earliest. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2020. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. 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