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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

          Thursday, October 29, 2020, Vol. 21, No. 217

                           Headlines



A R M E N I A

AMERIABANK CJSC: S&P Alters Outlook to Negative, Affirms B+/B ICRs


A Z E R B A I J A N

AZERENERJI JSC: S&P Alters Outlook to Stable, Affirms 'BB/B' ICRs
PASHA INSURANCE: S&P Lowers LongTerm ICR to 'BB', Outlook Stable


I R E L A N D

PALMER SQUARE 2020-2: Fitch Assigns 'B+(EXP)' Rating on Cl. F Notes


R O M A N I A

BLUE AIR: Plans to Launch 20 New International Routes
BLUE AIR: Receives First Half of RON300.8MM State-Guaranteed Loan


R U S S I A

ROSSETI MOSCOW: Fitch Affirms BB+ LongTerm IDR, Outlook Stable
RUSSIAN STANDARD BANK: S&P Affirms 'B-/B' ICRs, Outlook Stable


S P A I N

LECTA LTD: S&P Assigns 'CCC+' Issuer Credit Rating, Outlook Stable
ROOT BIDCO: Fitch Assigns 'B' LongTerm IDR, Outlook Stable


T U R K E Y

TURKIYE PETROL: Fitch Cuts LongTerm IDR to B+, Outlook Negative


U N I T E D   K I N G D O M

MEDICAL HEALTHCARE: String of Companies Go Into Administration
PETRA DIAMONDS: Strong Recovery Won't Avert Debt Restructuring
STONEGATE PUB: Fitch Alters Outlook on 'B-' LT IDR to Negative


X X X X X X X X

[*] EUROPE: Nearly 200 Airports to Face Insolvency, ACI Says

                           - - - - -


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AMERIABANK CJSC: S&P Alters Outlook to Negative, Affirms B+/B ICRs
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S&P Global Ratings revised its outlook on Ameriabank CJSC to
negative from stable. At the same time, S&P affirmed its long- and
short-term issuer credit ratings on the bank at 'B+/B'.

In late September, wide-scale fighting broke out over the disputed
region of Nagorno-Karabakh, a previously frozen conflict that has
existed for many years. Both Azerbaijan and Armenia declared
martial law and implemented military mobilization. The current
escalation appears the most significant since the war ended in 1994
with hundreds of casualties reported on both sides. Although
military attacks remain largely limited to Nagorno-Karabakh and
surrounding areas, rising tensions might expand to territories
beyond the disputed region.

S&P said, "At this stage, we note numerous uncertainties regarding
the development of the ongoing conflict and the extent to which it
could affect Armenia's economy, fiscal position, and banking
sector. It is not clear to us whether a peaceful political solution
could be brokered in the near term. This could pose a number of
economic and financial risks to Armenia at a time when the economy
has already been weakened by the pandemic. We expect GDP will
contract by 6.8% in 2020.

"In our view, protracted military conflict could lead to deposit
outflows at Ameriabank as well as in the whole Armenian banking
system. We anticipate that the majority of nonresident deposits
(such as deposits of Armenian diaspora) will be confidence
sensitive. Ameriabank's nonresident deposits historically accounted
for about one-quarter of total deposits."

In addition, increased geopolitical risks could further delay
capital injections from new prospective equity investors, which
were originally planned for 2020 but were delayed to 2021 due to
the pandemic. This will limit Ameriabank's future growth prospects
in view of expected markedly lower profitability in 2020-2021 and
tight capitalization.

S&P said, "We anticipate that the pandemic will weaken the bank's
asset quality. The bank forecasts that Stage 3 loans could increase
to 5% in 2020-2021 from 4.2% as of mid-2020, and the cost of risk
could rise to about 2.5% in 2020 from 1.3% in 2019. In the first
half of 2020, the bank's return on assets had already decreased to
1.0% from an average of 1.4% in 2018-2019. The bank forecasts net
income of about AMD10.0 billion in 2020 compared with AMD12.1
billion in 2019. Lower profitability together with continued growth
of the loan portfolio also weighed on the total capital adequacy
ratio: it dropped to 13.4% (versus 12% regulatory minimum) from
14.7% as of end-2019. In September 2020, the bank issued $15
million in subordinated debt, which supported its capitalization.

"The 'B+' long-term rating on Ameriabank is one notch lower than
its 'bb-' stand-alone credit profile, because we view the
sovereign's lower creditworthiness as a main rating constraint.

"The negative outlook reflects rising risks to Ameriabank's growth
prospects and asset quality over the next 12 months from the
pandemic and the significant recent military escalation of the
Nagorno-Karabakh conflict, which may take quite some time to
resolve."

Downside scenario

S&P could lower the ratings on Ameriabank over the next 12 months
if protracted military confrontation put material pressure on the
Armenian economy, fiscal position, and banking sector. This in turn
could lead to deterioration of Ameriabank's liquidity,
capitalization, or asset quality.

Upside scenario

S&P could revise the outlook to stable if the conflict and
lingering uncertainty subsided, averting negative repercussions for
the Armenian economy, fiscal position, and banking sector, and
Ameriabank's credit profile, because it considers the bank's
creditworthiness to be closely linked with that of the sovereign.




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AZERENERJI JSC: S&P Alters Outlook to Stable, Affirms 'BB/B' ICRs
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S&P Global revised its outlook on of Azerbaijan-based electricity
producer Azerenerji JSC to negative from stable, and affirmed the
ratings at 'BB/B'.

The negative outlook reflects that on Azerbaijan, indicating that a
downgrade of Azerenerji would follow a sovereign downgrade.

Mounting downside risk to the sovereign ratings also weighs on
Azerenerji's credit quality because of an extremely high likelihood
of extraordinary state support for Azerenerji, if needed.  The
negative outlook on Azerbaijan reflects rising risks to
Azerbaijan's fiscal performance, external balance sheet, and
macro-financial stability amid the significant recent military
escalation of the Nagorno-Karabakh conflict, which may take quite
some time to resolve. S&P said, "We believe there is an extremely
high likelihood that Azerbaijan would provide timely and sufficient
extraordinary state support to Azerenerji in the event of financial
distress. We reflect this support by including a four-notch uplift
in our 'BB' rating on the company. That is why a sovereign
downgrade will likely result in a similar rating action on
Azerenerji, leading to the outlook on the company mirroring that on
Azerbaijan."

S&P said, "That said, we expect the state will continue to ease
pressure on Azerenerji's liquidity and leverage.  At this time,
about 85% of Azerenerji's debt is to the government, and the rest
is guaranteed by the government. The Ministry of Finance has a
strong track record of providing financial support to Azerenerji
(including paying debt interest for the company, equity injections,
direct low-rate state borrowings, and tax benefits). We assume this
will continue in 2020-2021. For instance, we understand that the
government has budgeted sufficient funds to cover the company's
debt and interest payments due in 2020 and 2021, if needed.

"Our base-case scenario does not envision any material costs or
capital expenditure (capex) for Azerenerji due to the
Nagorno-Karabakh conflict.  We currently do not anticipate material
damage to the company's assets due to the Nagorno-Karabakh military
conflict; it's difficult to predict, however, so we can't rule it
out at this time. We believe the company might invest in developing
the infrastructure on the Nagorno-Karabakh territory, and that they
would not be material or require any significant borrowing at the
company level that wouldn't be supported by the government. We also
assume that if there is substantial damage to any of Azerenerji's
assets that jeopardize the country's energy system, the government
will intervene with the necessary financial aid.

"We believe that Azerenerji will refrain from raising third-party
debt despite sizable capex.  Azerenerji's investment program, which
we think might amount to Azerbaijan manat (AZN) 1.2 billion-AZN1.4
billion in 2020-2021, targets rehabilitation of the country's
energy system. We expect the state will continue to co-finance
Azerenerji's capex via equity or direct state loans, and the
company will avoid any third-party debt not guaranteed by the
government. That said, we forecast the company's leverage will
remain nearly flat, with debt to EBITDA of about 4.5x in 2020-2021
(versus 4.4x in 2018). We believe that Azerenerji, like other
government-relate entities in the country, won't undertake any new
borrowings without the government's approval. Conversely, we do not
anticipate that the government will increase Azerenerji's tariffs,
given its previous reluctance to do so due to social concerns. We
assume Azerenerji will generate stable funds from operations (FFO)
and partly finance its investment program with internal cash
sources.

"The negative outlook on Azerenerji reflects that on the sovereign.
If we lower our long-term rating on Azerbaijan by one notch, we
would likely take a similar rating action on Azerenerji, all else
remaining equal.

"We see a strong correlation in the credit quality of the company
and that of the sovereign, given our view of an extremely high
likelihood of extraordinary state support for Azerenerji. This is
underpinned by our expectation that the government will continue to
co-finance Azerenerji's large investment program and cover any
liquidity shortages. In our base case, we expect the company will
not issue new debt with third parties without government
guarantees, and that its structure and current asset composition
will remain unchanged in the medium to long term.

"Apart from a sovereign rating action, we could also downgrade
Azerenerji if the company's stand-alone credit profile deteriorates
or government support weakens. This could occur, for example, due
to weak liquidity, a material depreciation of the local currency
leading to higher leverage, new debt issuance without state
guarantees (for example, to fund the company's large capex needs),
diminishing government commitment to support the company, changes
in the government's mechanisms to monitor the company's finances,
or privatization or unfavorable government intervention affecting
the company's profitability or leverage. None of these scenarios,
however, is our current base case.

"We could also downgrade Azerenerji if the government discontinues
supportive measures, indicating diminishing likelihood of
extraordinary government support. Currently we see it as less
likely given the importance of Azerenerji for the state and the
existing state guarantees on the company's debt.

"We would revise the outlook to stable if we revised the outlook on
the sovereign to stable."


PASHA INSURANCE: S&P Lowers LongTerm ICR to 'BB', Outlook Stable
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S&P Global Ratings lowered its long-term insurer financial strength
and issuer credit ratings on Azerbaijan-based PASHA Insurance OJSC
to 'BB' from 'BB+'. The outlook is stable.

PASHA Insurance dividend payments for 2020 and the next two years
are higher than S&P previously expected, which puts pressure on its
assessment of the insurer's capital adequacy.

S&P said, "On Oct. 23, 2020, we also revised the outlook on our
Azerbaijan sovereign credit rating to negative from stable,
reflecting our view that the military confrontation with Armenia
could exacerbate Azerbaijan's economic, external, and fiscal
vulnerabilities."

This puts additional pressure on the credit quality of PASHA
Insurance's investment portfolio.

S&P said, "We lowered the ratings because we expect that higher
dividend payments than we expected previously will constrain the
insurer's capitalization and financial risk profile in the next two
years. In addition, we consider that the challenging macroeconomic
environment may put additional pressure on the insurer's asset
quality.

"We expect that PASHA Insurance's capitalization, based on our
capital model, will be less solid in the next two years than we
expected previously. Although we assumed that the insurer's
dividend payout would be about 50% of net income in 2020-2022, it
paid 100% in 2020 and plans to do the same in 2021, before reducing
payments to 80% of net income in 2022. The new dividend policy will
weigh on our forecast capital adequacy, which will likely not
strengthen in the next two years, contrary to our previous
expectations.

"In addition, we have revised our GDP forecast for Azerbaijan and
now expect the country's real GDP will shrink by 6.9% in 2020
before rebounding to about 3.0% growth in 2021. Increased military
tensions could compound pandemic- and oil-price-related downside
risks to growth, weighing on business confidence and household
consumption. However, we expect that PASHA Insurance's gross
premiums written (GPW) will remain flat in 2020 because the
insurer's corporate clientele mainly consist of the largest
Azerbaijani enterprises, including State Oil Company of the
Azerbaijan Republic, which we believe will continue to roll over
their insurance contracts. We forecast that PASHA Insurance's GPW
will increase by about 5% in 2021-2022 as the economic situation
stabilizes and the company proceeds with its strategy of increasing
penetration into the retail segment. We forecast that its operating
performance will remain favorable in the next two years, with a
combined ratio of 75%-80% (77% over the first eight months of
2020). PASHA Insurance's market share by GPW in Azerbaijan's
property/casualty (P/C) insurance sector reached 41% in first-half
2020.

"We expect that the challenging economic environment may weigh on
PASHA Insurance's asset quality because the majority of its
investment portfolio is held with Azerbaijani issuers. We forecast
that the weighted average credit quality of PASHA Insurance's
investments will be in the 'BB' range and consequently assess its
risk exposure as high.

"We expect that the insurer's funding profile will remain neutral.
In our forecast, debt leverage will moderately rise in the next two
years, with financial leverage not exceeding 10%.

"The stable outlook reflects our expectation that PASHA Insurance
will maintain strong operating performance in the next 12 months,
supported by both underwriting and investment results, despite the
challenging economic environment in Azerbaijan. We expect the
company to keep its leading positions in the P/C insurance segment
in Azerbaijan and maintain its current capitalization level."

S&P could consider a negative rating action in the next 12 months
if:

-- The company's capitalization came under additional pressure as
a result of higher-than-expected dividend plans for 2022-2023,
higher-than-expected insurance portfolio growth, or underwriting
and investment losses that S&P does not anticipate in our base-case
scenario;

-- PASHA Insurance's investment strategy became more aggressive.

S&P views a positive rating action as remote in the next 12 months,
taking into account the planned high dividend payouts in the next
two years, concentration of the company's insurance and investment
activities in Azerbaijan, and the challenging economic environment
in the country.




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PALMER SQUARE 2020-2: Fitch Assigns 'B+(EXP)' Rating on Cl. F Notes
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Fitch Ratings has assigned Palmer Square European CLO 2020-2 DAC
expected ratings.

The assignment of the final ratings is contingent on the receipt of
final documents conforming to information already reviewed.

RATING ACTIONS

Palmer Square European CLO 2020-2 DAC

Class A; LT AAA(EXP)sf  Expected Rating   

Class B; LT AA+(EXP)sf  Expected Rating   

Class C; LT A(EXP)sf  Expected Rating   

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

Class E; LT BB(EXP)sf  Expected Rating   

Class F; LT B+(EXP)sf  Expected Rating   

Sub. Notes; LT NR(EXP)sf  Expected Rating   

TRANSACTION SUMMARY

Palmer Square European Loan Funding 2020-2 DAC is an arbitrage cash
flow collateralised loan obligation (CLO) that is serviced by
Palmer Square Europe Capital Management LLC (Palmer Square). Net
proceeds from the issuance of the notes will be used to purchase a
static pool of primarily secured senior loans and bonds with a
component of mezzanine obligations and high-yield bonds, totalling
about EUR300 million.

KEY RATING DRIVERS

'B+'/'B' Portfolio Credit Quality

Fitch places the average credit quality of obligors in the 'B+'/'B'
category. The Fitch weighted average rating factor (WARF) of the
identified portfolio is 30.84.

High Recovery Expectations

Senior secured obligations make up 98.3% of the portfolio. Fitch
views the recovery prospects for these assets as more favourable
than for second-lien, unsecured and mezzanine assets. The Fitch
weighted average recovery rate (WARR) of the ramped-up portfolio is
68.3%.

Diversified Portfolio Composition

The three-largest industries represent 30% of the portfolio
balance, the top-10 obligors at 12.8% and no single obligor is at
more than 1.3%.

Portfolio Management

The transaction does not have a reinvestment period and
discretionary sales are not permitted. Fitch's analysis is based on
the ramped-up portfolio with a base-case scenario stress described
under 'Coronavirus Baseline Scenario Impact' below.

Cash Flow Analysis

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

Coronavirus Baseline Scenario Impact

Fitch carried out a sensitivity analysis on the ramped-up 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. Assets with a Fitch-derived rating
(FDR) on Negative Outlook represent 26.1%. This scenario shows
resilience of the assigned ratings, with substantial cushion across
rating scenarios.

Deviation from Model-implied Ratings

The expected ratings for the class C and E notes are one notch
lower than their model-implied ratings. This is because as a static
transaction, the servicer has limited ability to address potential
adverse selection as the portfolio amortises or refinances and to
manage the portfolio in a potentially recessionary environment
caused by the coronavirus pandemic.

RATING SENSITIVITIES

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

  - A reduction of the mean rating default rate (RDR) by 25% at all
rating levels and an increase in the recovery rate (RRR) by 25% at
all rating levels would result in an upgrade of at least one notch
but no more than five notches across the structure.

  - Except for the class A notes, which are already at the highest
'AAAsf' rating, upgrades may occur in case of better-than-expected
portfolio credit quality and deal performance, leading to higher
credit enhancement and excess spread available to cover for losses
on the remaining portfolio. If the asset prepayment speed is faster
than expected and outweigh the negative pressure of the portfolio
migration, this may increase credit enhancement and potentially add
upgrade pressure on the rated notes.

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

  - An increase of the RDR at all rating levels by 25% of the mean
RDR and a decrease of the RRR by 25% at all rating levels will
result in downgrades of at least one notch but no more than five
notches across the structure.

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

Most 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 on
for its 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.




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BLUE AIR: Plans to Launch 20 New International Routes
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Nicoleta Banila at SeeNews reports that Romanian low-cost carrier
Blue Air plans to launch seven new international routes from Bacau
starting December 2020 and 13 from Cluj-Napoca as from March 2021.

According to SeeNews, starting December 2020, Blue Air will fly
from Bacau to Athens, Barcelona, Cologne, Larnaca, Madrid, Munich
and Paris, it said in a press release on Oct. 21.

Startring March 2021, Blue Air will fly from the northerstern city
of Cluj to Amsterdam, Barcelona, Brussels, Dublin, Hamburg,
Cologne, Larnaca, London, Madrid, Milan, Paris, Rome and Stuttgart,
SeeNews discloses.

Blue Air, SeeNews says, expects the new routes will optimize travel
options in the Cluj region by offering efficient connections with
European destinations of major interest for both the business and
leisure segments.

In July, Blue Air announced that the Bucharest municipal court has
approved its request to enter a concordat procedure with its
creditors in order to avoid insolvency, SeeNews recounts.


BLUE AIR: Receives First Half of RON300.8MM State-Guaranteed Loan
-----------------------------------------------------------------
Nicoleta Banila at SeeNews reports that Romanian low-cost carrier
Blue Air said that it has received the first half of a RON300.8
million (US$73 million/EUR62 million) state-guaranteed loan from
the country's state-owned EximBank.

Blue Air said in a press release on Oct. 26 it used this first
tranche of the loan to fully repay its debt to the Romanian state,
SeeNews relates.

According to SeeNews, the six-year loan is guaranteed by Blue Air's
assets, including 75% of the shares of Blue Air Aviation S.A. and
of the main shareholder, Airline Invest S.A.

The state-backed funding is expected to compensate for the economic
losses suffered by the company as a result of the pandemic in the
March-June 2020 period, as well as partially cover liquidity needs
during September 2020 - February 2021, SeeNews states.

The loan was approved by the government through an emergency decree
in August, SeeNews recounts.  However, the decree was rejected on
Oct. 21 by the Romanian Senate, SeeNews relays.  The lower house of
parliament, the Chamber of Deputies, will have the final say on the
matter, SeeNews notes.  Under Romanian law, emergency decrees take
effect immediately but have to be approved by parliament, SeeNews
discloses.

The European Commission approved the loan under its state aid rules
in August, SeeNews relates.

Blue Air, the only air carrier in Romania with 100% domestic
capital, announced in July that the Bucharest municipal court has
approved its request to enter a concordat procedure with its
creditors in order to avoid insolvency, SeeNews recounts.




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ROSSETI MOSCOW: Fitch Affirms BB+ LongTerm IDR, Outlook Stable
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Fitch Ratings has affirmed Public Joint Stock Company Rosseti
Moscow Region's (Rosseti MR) Long-Term Foreign-Currency Issuer
Default Rating (IDR) at 'BB+' with a Stable Outlook.

The rating reflects Rosseti MR's near-monopoly position in
electricity distribution in Moscow and the Moscow region, a
higher-quality asset base than Russian peers' and a healthy
financial profile. However, lack of long-term tariff predictability
constrains the Standalone Credit Profile (SCP). Fitch continues to
incorporate a one notch uplift to its SCP of 'bb' under its
'Government-Related Entities Rating Criteria' following the
assessment of the company's links with its majority shareholder,
PJSC ROSSETI, and ultimately the Russian Federation (BBB/Stable),
as the source of possible support.

KEY RATING DRIVERS

Coronavirus Impact Manageable: Fitch forecasts Rosseti MR's (which
was renamed from PJSC Moscow United Electric Grid Company in July
2020) overall electricity distribution volumes to fall by about
2.5% in 2020, due to lockdown and restriction measures adoption to
contain the coronavirus spread as well as a likely sharp
contraction of Russian economy of 4.9% induced by infection,
although the dynamic will vary in Moscow and Moscow region. Fitch
forecasts EBITDA excluding connection fees to decline by about 10%
and funds from operations (FFO) net leverage adjusted for
connection fees to rise to about 3.5x in 2020, but to be still
within its guidelines for the current rating level.

Near Monopoly Supports Profile: The company's business profile is
supported by the its near-monopoly position in electricity
distribution in Moscow and the Moscow region, which benefit from a
higher income per capita than the Russian average. In 2019, Rosseti
MR was responsible for 82% and 70% of total electricity
distribution market (by volume) in Moscow and the Moscow region,
respectively. The company also has a higher-quality asset base than
its Russian peers and a healthy financial profile. However, a lack
of long-term tariff predictability constrains the SCP.

GRE Assessment: Rosseti MR is 50.9% owned by PJSC ROSSETI, an 85%
subsidiary of the Russian Federation. Fitch views government
ownership and support record as 'Strong'. Fitch believes tangible
state support for Rosseti MR, if needed, is likely, demonstrated by
the state's record of active support of other subsidiaries of PJSC
ROSSETI, mostly through state-provided equity injections to fund
capex as well as from PJSC ROSSETI's own funds. Fitch views
socio-political implications of a theoretical default as
'Moderate', considering its regional position and well-developed
asset base. Fitch assesses the financial implications of a
theoretical default as 'Weak' since it is unlikely to affect the
availability or cost of financing of other government-related
entities (GREs) or the government.

One Notch Uplift to SCP: Rosseti MR's Long-Term IDR includes a
one-notch uplift in line with its GRE criteria, as a result of its
assessment of links with its ultimate shareholder - the Russian
Federation - and its SCP of 'bb'.

Long-term Tariff Uncertainty Remains: Although the Federal
Antimonopoly Service approved in 2018 parameters under a long-term
distribution tariff indexation until 2022, effective tariffs are
approved on annual basis at the end of the preceding year, based on
inflation, the asset base, uncontrollable costs, expected
electricity supply volumes and the purchase price for electricity
losses. As a result, tariffs continue to lack long-term
predictability. Fitch views the uncertainty over tariff dynamics as
one of the key rating risks for Rosseti MR.

High Share of Non-controllable Costs: More than half of Rosseti
MR's costs are regulated, which results in the company's financials
being significantly influenced by the regulator's decisions. The
regulated costs include the electricity transmission services of
PJSC Federal Grid Company of Unified Energy System (FedGrid;
BBB/Stable), the distribution services of the local network
companies and purchases of electricity lost in the networks. The
pace of regulated costs growth is therefore as important as the
tariff increase itself.

Sound Credit Metrics: At end-2019, Rosseti MR reported FFO net
leverage adjusted for connection fees of 2.9x and FFO interest
coverage adjusted for connection fees of 4.2x. Fitch expects FFO
net leverage adjusted for connection fees to rise to 3.5x in 2020,
but then to improve to an average of about 3x over 2021-2024, which
is close to its upgrade guideline. Fitch forecasts FFO interest
coverage adjusted for connection fees to be within its guidelines.
Fitch sees comfortable headroom for Rosseti MR at the current
rating level.

Further improvements of credit metrics that result in breaching its
positive triggers on a sustained basis would be positive for the
SCP and the rating.

DERIVATION SUMMARY

As a distribution network operator, Rosseti MR's business profile
is somewhat weaker than that of Kazakhstan Electricity Grid
Operating Company (KEGOC, BBB-/Stable; SCP: bb+), the electricity
transmission operator in Kazakhstan, and especially than that of
FedGrid (SCP: bbb-), Russian electricity transmission operator.
FedGrid has a larger scale of operations and greater geographical
diversification than Rosseti MR. Rosseti MR and KEGOC have higher
exposure to volume risk than FedGrid. Rosseti MR is more likely to
suffer from political interference than FedGrid because it has a
higher share in end-user tariffs in Russia. Another peer, JSC
Energo-Pro Georgia (EPG, BB-/Stable), an electricity distribution
operator to all regions of Georgia except the capital Tbilisi, is
much smaller than Rosseti MR, but has a more robust regulatory
regime.

Rosseti MR's financial profile is weaker than that of FedGrid and
KEGOC. The investment programmes of all three companies are usually
large, although they have some flexibility. FedGrid, Rosseti MR and
KEGOC are rated under its GRE criteria. Rosseti MR is rated using a
bottom-up-plus-one notch approach. FedGrid's rating incorporates a
one-notch uplift to the company's SCP of 'bbb-' to the same level
as the government. KEGOC is rated one notch below the sovereign on
the back of debt guarantees among other factors. EPG has a stronger
financial profile than Rosseti MR, but its rating is aligned with
the parent, ENERGO-PRO a.s. (BB-/Stable), due to strong ties.

The wider peer group includes Romanian distribution operator
Electrica SA (BBB/Negative) and Polish integrated utility Energa
S.A. (BBB-/Stable; SCP: bbb) with a large electricity distribution
business of 75%-80% of EBITDA. Both companies benefit from a stable
regulatory framework and operating environment. Rosseti MR has a
comparable financial profile to Energa, but weaker than that of
Electrica.

KEY ASSUMPTIONS

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

  - Russian GDP to decline 4.9% in 2020, before growing 3.6% in
    2021, 2.7% in 2022 and 2% until 2024

  - Inflation of 3.2% in 2020 and 3.7%-4% annually in 2021-2024

  - Electricity consumption to decline by 2.5% in 2020, before
    growing by about 3% in 2021 and by 1% on average over
    2022-2024

  - Electricity losses to go down to about 7% by 2024 from 7.7%
    in 2019, which is more conservative than management
    assumptions

  - Tariff growth slightly below annual inflation in 2020-2024

  - Capex of about RUB25 billion (excluding VAT) on average
    over 2020-2024, which is slightly above management's
    expectations

  - Dividends of RUB3.3 billion in 2020 and 50% of net income
    a year under IFRS in 2021-2024

RATING SENSITIVITIES

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

  - Improvement of financial profile (i.e. FFO net leverage
    (excluding connection fees) well below 3x and FFO interest
    cover (excluding connection fees) above 4.5x on a sustained
    basis) or an improvement in the Russian regulatory framework
    for electricity distribution

  - Evidence of significantly stronger state support, although
    unlikely at this stage, in its view

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

  - Significant deterioration in the credit metrics on a sustained
    basis (FFO net leverage (excluding connection fees) above 4x
    and FFO interest cover (excluding connection fees) below 3.2x)
    due to, for example, insufficient tariff growth to cover
    inflationary cost increases and not compensated by capex cuts,
    or generous dividend payouts. All these would be negative for
    the SCP but not necessarily the rating (i.e. if the links with
    the state strengthen)

  - Weaker links with the parent, and ultimately the state

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: At end-1H20, Rosseti MR's unrestricted cash and
cash equivalents of RUB7 billion, together with unused credit
facilities of RUB124 billion, mainly from state-owned banks, were
sufficient to cover short-term debt of RUB11 billion and
Fitch-projected negative free cash flow (FCF) of about RUB2 billion
over 2H20-1H21. The company does not pay commitment fees for its
unused credit lines, as is common in Russia, but Fitch expects
these lines to be available to the group. Fitch expects FCF to be
negative in 2020 before turning neutral to slightly positive from
2021.

Rosseti MR manages its debt portfolio and often refinances its
bonds and loans ahead of maturity date to benefit from more
lucrative terms. In 2020, the company issued a RUB10 billion bond
at 6.15% and a RUB5 billion bond at 5.55%, both with a put option
in three years, to refinance current maturities.

SUMMARY OF FINANCIAL ADJUSTMENTS

Depreciation and interest related to right-of-use assets were
subtracted from EBITDA.

Revenue from compensation of losses due to liquidation of certain
networks, reserves and impairment of property, plant and equipment
were excluded from EBITDA.

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.


RUSSIAN STANDARD BANK: S&P Affirms 'B-/B' ICRs, Outlook Stable
--------------------------------------------------------------
S&P Global Ratings affirmed its 'B-/B' long- and short-term issuer
credit ratings on Russian Standard Bank JSC (RSB). The outlook
remains stable.

S&P said, "In our view, effects from the COVID-19 pandemic on RSB's
financial performance and asset quality have been contained, and
the dynamics of its problem loans and credit losses are broadly in
line with those of other Russian consumer finance banks. We expect
that the bank's problem loans (those in Stage 3 under International
Financial Reporting Standards) will increase to 10%-12% of total
loans by year-end 2020 from 6.7% at year-end 2019, which is broadly
in line with our forecast for other retail banks in Russia. The
bank's restructured loans peaked at about Russian ruble (RUB) 5.0
billion (5.5% of the gross retail portfolio) at mid-June 2020, with
most restructuring implemented under the bank-initiated program.
Since then, most clients have returned to normal servicing of their
debt, with the remaining volume of restructured loans about RUB1.0
billion as of Sept. 1, 2020. We also note that, starting from May,
newly provided loans demonstrate progressive improvement in all
products, while default rates have reduced to 2019 levels.
Nevertheless, we think that some of the bank's borrowers will
continue to have trouble servicing their debt due to the economic
slowdown this year.

"In our view, in the next 12-18 months, RSB's capitalization will
remain weak, but gradually improve. Over the past year, the bank's
capital adequacy has strengthened, with its risk-adjusted capital
(RAC) ratio increasing to 2.4% at mid-year 2020 from 0.9% at
mid-year 2019. This dynamic mainly reflects continuing capital
buffer increases and very slow asset growth. We expect that the
bank's RAC ratio will further increase to about 4.6% by mid-year
2022, mostly due to restoring earnings generation in 2021-2022.
Nevertheless, we think that the bank's ability to absorb losses
will remain weak over the next 12-18 months because of material
equity investments in the parent, Russian Standard Co., and in
associate companies controlled by Roustam Tariko, operating in the
alcohol business, Roust Corp., and Gancia. As of mid-year 2020,
these investments represented about 0.75x of the bank's capital
(about 0.9x a year ago). The bank is considering a further
reduction of investments in Roust Group associates, but the
realization of these plans remains uncertain.

"We expect that the bank's profitability will be under pressure in
2020, reflecting high provisioning needs, with cost of risk
increasing to about 7.0% versus 4.5% last year. Nevertheless, we
expect that the bank's profitability will gradually recover to
10%-12% in 2021-2022, thanks to increasing business volumes, lower
credit losses, and a relatively stable net interest margin,
supported by asset reallocation from a low-margin securities
portfolio into high-margin retail products."

Stable customer deposits will continue dominating the bank's
funding base, accounting for 70%-80% in the next two years. The
bank demonstrates prudent liquidity management, with a large
liquidity buffer. As of mid-year 2020, its broad liquid assets
covered about 62% of customer deposits.

S&P said, "The stable outlook reflects our view that RSB's asset
quality will not materially deteriorate due to the COVID-19
pandemic and associated economic slowdown, with credit losses and
the delinquency rate remaining at least on par with those of other
retail banks in Russia in the next 12-18 months.

"We could consider a positive rating action in the next 12-18
months if RSB improves its loss-absorbing capacity, maintaining its
RAC ratio sustainably over 5%. This may happen if the bank
continues to increase its capital buffer through earnings, utilizes
a major part of its deferred tax assets, and does not increase its
equity investments in its parent and associates.

"We could take a negative rating action in the next 12-18 months if
RSB's risk profile weighed substantially on its profits and
capitalization, and it increased its involvement in the Roust
Group's operations, including its financial exposure. A
higher-than-anticipated share in losses of associated companies
could also lead us to consider a negative rating action. In
addition, we could take a negative rating action if the bank's
liquidity buffer deteriorated significantly."




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

LECTA LTD: S&P Assigns 'CCC+' Issuer Credit Rating, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings assigned its 'CCC+' long-term issuer credit
rating to Lecta Ltd.

S&P said, "We are also assigning our 'B-' issue rating to Lecta's
super senior facilities, comprising a EUR40 million revolving
credit facility (RCF), due 2022, and a EUR75 million term loan, due
2022. In addition, we are assigning a 'CCC' issue rating to the
company's EUR255.5 million senior secured notes, due 2025. The
stable outlook reflects our expectation that Lecta will maintain
sufficient liquidity during the next 12 months."

In July 2020, Lecta completed its second restructuring of the year.
The COVID-19 pandemic and government measures to limit the spread
of the virus accelerated the decline in demand for coated wood-free
(CWF) paper. Lecta's CWF paper (46% of revenues in 2019) is mainly
used in commercial printing and for marketing materials such as
brochures, flyers, and catalogs. Due to lockdowns and weak economic
conditions, companies have cut their marketing expenditure,
including print advertisements. Lecta has also seen a negative
effect from tighter credit terms from suppliers. This led to a
EUR65 million working capital outflow in the first half of 2020 and
put pressure on Lecta's liquidity. The impact of the pandemic on
the specialty paper segment (35% of revenues in 2019) was
checkered, as demand remained resilient for certain grades, namely
self-adhesive and cast-coated and coated one-side paper. Finally,
the pandemic slowed down the implementation of Lecta's turnaround
plan.

S&P said, "We anticipate a large negative impact from the pandemic
on Lecta's operations in 2020 and a gradual recovery in 2021.
Significantly lower demand for graphic paper has forced the group
to plan extraordinary downtime at its mills, affecting its overall
profitability. We expect S&P Global Ratings-adjusted EBITDA margins
of about 2.0% in 2020, versus 5.5% in 2019, and funds from
operations (FFO) to be negative. Our revenue growth expectation of
16% for 2021 relies on a recovery in demand for both specialty and
graphic paper. We expect 18% sales growth in specialty paper as
market conditions normalize. Simultaneously, we forecast a 10%
rebound in graphic paper revenues, supported by the easing of
social-distancing measures. That said, we expect the demand for
graphic paper to remain in structural decline as marketing
continues to shift to digital platforms. We forecast that graphic
paper revenues will remain 27% below 2019 levels.

"We expect that Lecta's liquidity in the next 12 months will be
underpinned by the recent cash injection. In July 2020, Lecta
received a EUR150 million cash injection split between EUR50
million of equity, EUR50 million from the issuance of senior
secured notes (with a face value of EUR55.5 million as they were
issued at a 10% discount) and a EUR50 million loan, which is 70%
guaranteed by the Spanish government. The transaction was broadly
neutral to Lecta's adjusted leverage because the group wrote off
its EUR100 million junior notes due 2028. We believe that this
liquidity injection will allow Lecta to meet its financial
commitments during the next 12 months. The group has also
negotiated a 24-month covenant holiday with its super senior
lenders. Nevertheless, in our view, Lecta is still vulnerable to
high unexpected cash outflows, for example, as a result of a
further increase in working capital needs amid the pandemic.

"We expect Lecta to generate negative free operating cash flow
(FOCF) of about EUR50 million in 2021. FOCF generation will be
undermined by low EBITDA, as we expect the recovery in sales and
profitability to only be gradual in 2021, and high capital
expenditure (capex) of about EUR90 million. We believe that Lecta's
ability to cut down its investments is limited as its turnaround
plan largely relies on the expansion of its specialty paper
operations."

S&P Global Ratings acknowledges a high degree of uncertainty about
the evolution of the coronavirus pandemic. The current consensus
among health experts is that COVID-19 will remain a threat until a
vaccine or effective treatment becomes widely available, which
could be around mid-2021. S&P said, "We are using this assumption
in assessing the economic and credit implications associated with
the pandemic. As the situation evolves, we will update our
assumptions and estimates accordingly."

The stable outlook reflects S&P's expectation that Lecta will
maintain sufficient liquidity during the next 12 months.

S&P would lower the ratings if:

-- Lecta's liquidity deteriorated, leading to a shortfall in the
short term; or

-- The EBITDA uplift we expect from Lecta's investments in
specialty paper failed to materialize.

S&P could raise its ratings if:

-- Liquidity remained adequate, with liquidity sources exceeding
uses by more than 1.2x on a sustainable basis;

-- Adjusted debt to EBITDA decreased below 7x on a sustained
basis, for example, as a result of the successful implementation of
Lecta's turnaround plan; and

-- The group generated positive FOCF in a sustainable way.


ROOT BIDCO: Fitch Assigns 'B' LongTerm IDR, Outlook Stable
----------------------------------------------------------
Fitch Ratings has assigned Root Bidco s.a.r.l. (Rovensa) a final
Long-Term Issuer Default Rating (IDR) of 'B' with a Stable Outlook
and a final senior secured term loan B (TLB) rating of 'B+'/'RR3'.
The acquisition of Rovensa by Partners Group and Bridgepoint was
completed on September 29, 2020, funded by a EUR440 million TLB
coming with a EUR115 million revolving credit facility (RCF)
undrawn at closing.

The ratings are constrained by a highly leveraged capital
structure, which is typical in private equity transactions, and the
small scale of Rovensa. They also reflect the stability of
Rovensa's business profile due to a focus on specialty crop
nutrition, crop protection and biocontrol products as well as the
company's positioning in higher-margin segments with favourable
growth prospects.

Fitch assumes that Rovensa will be able to capture opportunities
for accelerated organic growth within its biological businesses and
that its crop protection business will be able to replenish the
active ingredients (AI) at risk within its portfolio over the
coming years.

Fitch forecasts that Rovensa will balance organic growth with
margin-accretive bolt-on acquisitions, which along with its
expectations of positive free cash flow (FCF, before acquisitions)
generation should support gradual de-leveraging and underpins the
Stable Outlook.

KEY RATING DRIVERS

Highly Leveraged Structure: Fitch estimates FY20 pro forma funds
from operations (FFO) gross leverage at 7.5x and net debt/LTM
EBITDA at 6.1x, and assumes that Rovensa will continue to support
its growth via acquisitions. Fitch forecasts FFO gross leverage to
gradually decline to 6.0x by FYE23 (financial year-end in June) on
the back of positive FCF and accretive bolt-on acquisitions. More
ambitious debt-funded expansion could put pressure on credit
metrics and offset contribution of modest FCF generation.

Oro Agri Acquisition Credit-Neutral: As the pending acquisition of
Oro Agri by Rovensa, at an enterprise value (EV) of USD165 million,
will be 40% equity-funded, Fitch expects a broadly neutral impact
on FFO gross leverage given the accretive margins of the target.
While not transformational, the acquisition will increase the
geographical footprint of Rovensa, with entry into the US and South
Africa, as well as increasing the share of bio-control revenues to
22% from 10% pre-acquisition. The bolt-on is the largest single
acquisition by Rovensa in three years but execution risk is
mitigated by its experience in amalgamation of acquired entities.

Off-Patent Innovator Business Model: The ratings of Rovensa are
underpinned by its differentiation from mass fertilisers in crop
nutrition by focusing on bio-stimulants and on the development of
off-patent proprietary solutions for crop protection. It takes an
innovation-based approach, underlined by its strong niche, local
positioning, and diversification into specialty chemical
formulations sourced from off-patent active ingredients.

High-Margin Products: The niche products of Rovensa support its
competitive position, stable cash flow generation and pricing
power, which allow it to defend its high margins versus
macro-nutrient and commoditised fertiliser companies. As crop
protection and crop nutrition account for a significantly lower
share of costs for growers of fruit and vegetables (61% of
Rovensa's revenue) than row crops, the company has stronger
capabilities to pass on potential increases in raw material
prices.

Bio-nutrition Organic Growth Opportunity: During 2019-2020 Rovensa
has grown predominantly through six debt-funded acquisitions while
its organic growth in bio-nutrition averaged in low single digits.
Growth was distorted by a restructuring of the Brazilian business
in 2019 and the impact of a weaker Brazilian real in 2020, but
Rovensa remains well-positioned to take advantage of favourable
market fundamentals. Fitch forecasts bio-nutrition and bio-control
revenues to grow organically by respectively mid-single and
low-double digits over 2021-2023.

Phasing out of AIs: Rovensa is exposed to regulatory risks related
to AIs' ban or phase-outs, which require constant innovation and
new registrations. Fitch understands from management that a growing
number of AIs are expected to be phased out in the coming years
while fewer AIs are being developed. Rovensa therefore relies on
the timely introduction of new AIs and a strong pipeline of
substitute products. It has been successful in new product
registrations and has long established AI-sourcing relationships.
Forward planning, continued investments, and know-how (80% of
dossiers are developed in-house) also partly mitigate the risk of
an accelerated rate of de-registration of AIs.

Barriers to Entry; Limited Diversification, Scale: An evolving
regulatory environment, the knowledge-intensive nature of the
business as well as the diversified and evolving registration
process serve as barriers to entry. The agrochemical market,
though, remains seasonal and characterised by stiff competition
from sizeable players with strong R&D capabilities. Despite breadth
of products and a solid niche position Rovensa has limited
diversification, with its focus on agrochemicals within a limited
geography (about 66% of sales in southern Europe), exposing the
business to regional market disruption and unfavourable weather
patterns.

Established Position in Niche Markets: Rovensa benefits from its
solid niche position and a well-developed distribution system. In
bio-nutrition (51% of FY20 EBITDA) Rovensa is the second-largest
globally in a highly fragmented market, which remains rather small
but rapidly growing versus the wider crop nutrition industry. In
crop protection (37% of FY20 EBITDA), Rovensa has a strong position
in Iberia, being leader in Portugal ahead of the big four
producers, and the fourth-largest in Spain but the largest
off-patent company. In bio-control (12% of FY20 EBITDA), Rovensa
does not have a significant market share but is expanding in a
rapidly growing niche market.

Limited Impact from COVID-19: The global agricultural sector
remained resilient in 1H20 and Rovensa suffered only moderately
from the coronavirus outbreak. Procurement was secured ahead of the
pandemic and the three AIs for which Rovensa faced shortages could
be sourced with minimal additional expense. Flower growers were,
however, impacted by lockdowns. Management estimates a one-off
COVID-19 cost of EUR5 million on EBITDA (ie 6% of pro-forma FY20
EBITDA).

DERIVATION SUMMARY

The rating of Rovensa captures the balance between its stable
business profile (bio-nutrition, crop protection and bio-control)
and a highly leveraged capital structure and M&A-driven growth.

In terms of scale, Rovensa is like Nitrogenmuvek Zrt (B-/Positive)
but has more specialised, resilient and differentiated product
offerings and is more diversified globally. Rovensa's business
profile is also more focused and less exposed to cyclical
end-markets than that of Nouryon Holding B.V. (B+/Stable), which
focuses on specialty chemicals. Nouryon has lower exposure to the
agriculture sector (around 15% of sales) but benefits from a much
larger scale in reported EBITDA as well as wider operational and
geographical diversification. Nouryon has a similar financial
profile to Rovensa while Nitrogenmuvek's credit metrics are
stronger.

UPL Corporation Limited (BBB-/Negative) is one of the largest
companies in the post-patent crop-protection market with comparable
scale to Nouryon and its FFO net leverage is expected to decline to
around 4x in 2021 and around 3x by 2022.

KEY ASSUMPTIONS

  - Average organic revenue growth of 4.3% over 2020-2023

  - EBITDA margin at 22%-23% over 2020-2023

  - Capex on average at 5.4% of sales over 2020-2023

  - Acquisition of Oro Agri funded by EUR50 million equity
injection and EUR79 million RCF drawing

  - Bolt-on acquisition of EUR30 million in FY22 at a multiple of
9x and EBITDA margin of 25%

  - Earn-outs from acquisitions of EUR10 million over 2020-2024

Key Recovery Analysis Assumptions

  -- The recovery analysis assumes Rovensa is reorganised as a
going-concern rather than liquidated in bankruptcy.

  -- The going-concern EBITDA estimate reflects Fitch's view of a
sustainable, post-reorganisation EBITDA level upon which Fitch
bases the valuation of the company. Fitch applied a 15% discount to
the LTM pro-forma reported FY20 EBITDA to reflect a more stable
cash flow profile than other chemicals companies.

  -- An EV multiple of 5.0x reflects a mid-cycle multiple and
considers the company's position in a more stable sector than
peers' but also the company's small scale of operations.

  -- Rovensa's RCF is assumed to be fully drawn. Its TLB ranks pari
passu with the RCF.

  -- Fitch assumes that Rovensa's factoring programme will be
replaced by a super-senior facility.

  -- After deducting 10% for administrative claims, its waterfall
analysis generated a ranked recovery in the 'RR3' band, indicating
a 'B+' TLB rating. The waterfall analysis output percentage on
current metrics and assumptions is 52%.

RATING SENSITIVITIES

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

  - Increase in scale driven by organic and/or inorganic growth
while reducing FFO gross leverage to below 5.5x on a sustained
basis

  - FFO interest cover above 4x on a sustained basis

  - FCF margin consistently above 5%

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

  - Ambitious debt-funded acquisitions, dividend payments and/or
weaker-than-expected market dynamics leading to FFO gross leverage
sustainably above 7.5x

  - FFO interest cover below 2.5x on a sustained basis

  - Negative FCF generation

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: Rovensa has no major debt maturity until 2027,
and Fitch expects the company to generate positive FCF in
2020-2024. Rovensa benefits from a EUR115 million RCF as well as a
factoring facility to fund changes in working capital, which can be
significant throughout the crop season. Should the Oro Agri
acquisition be funded by RCF drawing rather than add-on TLB
issuance, liquidity would be less comfortable but still offer
adequate room for working capital fluctuations and further bolt on
acquisitions.

SUMMARY OF FINANCIAL ADJUSTMENTS

  - EUR5 million lease expensed in EBITDA

  - Factoring included in financial debt

  - Shareholder loan treated as non-debt

  - Non-recurring restructuring and acquisition costs
    added back to EBITDA and deducted from non-recurring
    cash flows

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.




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

TURKIYE PETROL: Fitch Cuts LongTerm IDR to B+, Outlook Negative
---------------------------------------------------------------
Fitch Ratings has downgraded Turkiye Petrol Rafinerileri A.S.'s
(Tupras) Long-Term Issuer Default Rating (IDR) to 'B+' from 'BB-'.
The Outlook is Negative. Fitch has also downgraded the senior
unsecured rating to 'B+' from 'BB-'.

The downgrade reflects cash flow generation that is weaker than
Fitch previously forecasts and high leverage, due to historically
low refining margins caused by demand loss for fuels amid the
coronavirus pandemic. The Negative Outlook reflects uncertainties
related to the rebalancing of the fuel market in the next 12-18
months, which may cause additional rating pressure for Tupras.

Despite the short-term challenges, Tupras has a leading position in
the Turkish market, with significant growth potential. Fitch
believes Tupras, with its complex refining assets, is firmly placed
to benefit from a recovery in refining margins once the pandemic
subsides. The adequate liquidity further supports the rating.

KEY RATING DRIVERS

Revised Down Expectations: Tupras recently revised its expectation
for its net refining margin down to USD1/bbl in 2020 from
USD3-USD4/bbl. New forecasts assume also fuel production of 22
million tonnes (mt), down by 8% from 24mt previously forecast and
capacity utilisation of 75%-80%, down from 80%-85%.

Low EBITDA: Tupras reported negative EBITDA of TRY0.8 billion in
1H20 (down from TRY2.3 billion in 1H19) on low demand and capacity
utilisation as it was forced to suspend production at its Izmir
refinery in May and June 2020. Fitch expects weak results in 3Q20
due to a still challenging macro environment as European refining
margins remained negative throughout the quarter. Fitch assumes
Tupras's 2020 EBITDA (pre-current cost of supply adjustment) to
decrease 80% yoy.

High Leverage: The difficult operating environment will push funds
from operations (FFO) net leverage to 17.3x in 2020, up from 4.0x
in 2019, according to its forecasts. Fitch also assumes leverage to
remain elevated in 2021 as EBITDA remains depressed, before swift
deleveraging from 2022, albeit subject to market conditions. High
leverage in 2020 increases the risk of Tupras breaching its
covenants on residuum upgrading project loans. Should this happen,
Fitch would expect banks to grant Tupras waivers due to the
temporary nature of the breach.

Weak Demand: Recovery in European oil demand is progressing slowly.
The US Energy Information Agency (EIA) expects oil consumption to
remain 11% lower yoy in 3Q20 despite a strong quarterly increase by
2mmb/d following a re-opening of economies. Overall, EIA forecasts
European oil demand to be 12% lower yoy in 2020 and 5% lower in
2021. While quarterly consumption is expected to grow in 2021,
Fitch does not see demand returning to pre-pandemic levels. The
coronavirus pandemic in Europe remains challenging, amplifying
downside risks.

Turkish Lira Depreciation: Refiners are usually able to manage
foreign-exchange risk as oil supplies are denominated in US dollars
while product prices, albeit sold in local currency, are driven by
international US dollar-denominated benchmarks. Nevertheless, due
to the exceptionally high volatility of the Turkish lira in 2020,
Tupras reported foreign-exchange losses in other operating and
financial items of TRY1.4 billion for 1H20. Although the majority
was unrealised (TRY1 billion), the volatility in exchange rate
provides a downside risk to its forecasts.

Foreign exchange denominated debt accounted for 60% of total debt
at end-June 2020, while 39% of cash balances was denominated in
foreign currencies.

Global Refining Capacity Additions: OPEC expects global
distillation capacity additions of between 1.2 million and 1.4
million barrels per day (mmb/d) annually in 2020-2022 from existing
projects, mainly in the Middle East and in Asia. The additional
barrels of oil products coming on stream will further complicate
fuel-market rebalancing.

Low Capex, No Dividends: Tupras has decided to reduce investments
to USD115 million in 2020, as well as not paying out its 2019
dividend. Fitch expects no dividend until 2023 and capex to stay
below USD200 million in the same period. Tupras has been strongly
cash-generative until 2019 and maintained gross debt in recent
years due to a generous dividend policy following completion of the
residuum upgrading project in 2015. Fitch believes Tupras is well
placed to benefit from improved market conditions, but the timing
of the latter is uncertain given the pandemic.

High Complexity, Low Integration: Tupras maintains a leading
position in the Turkish oil refining market and operates some of
the most complex set of refineries in EMEA. Tupras remains focused
on refining and has little integration across the value chain
compared with MOL Hungarian Oil and Gas Company (MOL) and Polski
Koncern Naftowy ORLEN S.A. (PKN), which are diversified into
upstream, petrochemicals and retail. Tupras's 40% stake in Opet,
Turkey's second-largest fuel retailer, only partly mitigates this
lack of integration, which increases Tupras's earnings volatility
through the cycle.

DERIVATION SUMMARY

Tupras's closest EMEA peers are PKN (BBB-/Stable) and MOL
(BBB-/Stable). PKN's 689 kbbl/d downstream capacity exceeds
Tupras's 585 kbbl/d. Moreover, PKN benefits from an integrated
petrochemical segment, a large retail network and some exposure to
upstream. MOL's downstream capacity (417 kbbl/d) is smaller than
Tupras's, but the company's credit profile is stronger due to an
integrated business profile with a 100 kbbl/d of upstream
production that provides countercyclical cash flows.

Unlike MOL and PKN, Tupras operates in a deficit fuel market, while
the coastal location of its two principal refineries allows it to
actively manage crude feedstock supplies. Tupras's leverage is much
higher than that of MOL and PKN, but the company has lower capital
intensity than its peers, as well as a lack of diversification.

KEY ASSUMPTIONS

  - Base-case Brent at USD41/bbl in 2020, USD45/bbl in 2021,
USD50/bbl in 2022, and USD53/bbl thereafter

  - Weaker revenue for 2020-2021 following volume loss and lower
oil price

  - Weak refining margin continuing into 2021 due to COVID-19

  - Capex in line with management guidance

  - No dividend in 2020-2022

Key Recovery Rating Assumptions:

Its recovery analysis is based on a liquidation value approach,
which yields a higher value than a going concern approach. It
assumes Tupras will be liquidated in a bankruptcy rather than
reorganised.

The liquidation estimate reflects Fitch's view of the value of
balance-sheet assets that can be realised in a sale or liquidation
conducted during a bankruptcy or insolvency proceedings and
distributed to creditors.

  - Fitch has applied a 100% discount to cash held

  - Fitch has applied a 25% discount to account receivables

  - Fitch has applied a 25% discount to inventory, lower than the
usual 50% discount as Fitch considers commodities to be more
readily marketable

  - Fitch has applied a 50% discount to net property, plant, and
equipment

All loans and bonds are unsecured and rank pari passu.

After deduction of 10% for administrative claims, its waterfall
analysis generated a ranked recovery in the RR4 band, indicating a
'B+' instrument rating. The waterfall analysis output percentage on
current metrics and assumptions was 50%.

RATING SENSITIVITIES

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

  - The Outlook is Negative, therefore positive rating action is
unlikely in the short term. However, FFO net leverage below 5.0x
would lead to the Outlook being revised to Stable.

  - Improved refining margins coupled with re-balancing of the
supply and demand in the fuel market resulting in FFO net leverage
consistently below 4.0x could lead to an upgrade.

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

  - FFO net leverage consistently above 5.0x

  - Worsening liquidity

  - Consistently negative free cash flow (FCF)

  - Slower-than-expected recovery of refining margins and fuel
market due to the continued impact of the pandemic

LIQUIDITY AND DEBT STRUCTURE

As of end-June 2020 Tupras reported cash and cash equivalents of
TRY16.2 billion (net of restricted cash), which covered short-term
debt of TRY14.6 billion, adjusted for factoring of TRY3.9 billion.
Combined with Tupras's debt maturity profile over the next 24
months, the company's liquidity is therefore contingent on
continued access to domestic banks. This is not uncommon among
Turkish corporates but exposes Tupras to systemic liquidity risk,
which is further exacerbated by the weak financial standing of the
Turkish banking sector.

Tupras has a strong record of access to domestic and international
banks, which should ensure successful continued refinancing. It has
successfully tapped the market during the pandemic to boost
liquidity and has increased the share of Turkish lira debt. Fitch
considers this a positive development.

Tupras maintains large deposits with related-party bank Yapi ve
Kredi Bankasi (B+/Negative). These deposits amounted to TRY4.6
billion at end-June 2020, up from TRY2 billion in 2019 and TRY2.4
billion in 2018. Fitch understands from management that the
increase is in line with a higher reliance on bank funding to
improve liquidity and Tupras has full access to its deposits in
Yapi ve Kredi Bankasi as well as other Turkish banks.

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.




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

MEDICAL HEALTHCARE: String of Companies Go Into Administration
--------------------------------------------------------------
Hannah BakerBusiness and Emma Elgee at SomersetLive report that a
string of companies behind UK healthcare group The Medical have
gone into administration, one of which is based in Bath.

A total of 23 businesses that trade under the name, including The
Medical Healthcare Centres Ltd, which is registered with the Care
Quality Commission (CQC), have collapsed, SomersetLive relays,
citing information from public record site The Gazette.

According to SomersetLive, Business Live reported that two other
companies, which also trade as The Medical -- Total Health Bath Ltd
on Monmouth Street and Total Health Brighton Ltd -- have gone into
liquidation.

It is not clear yet if any of the clinics will close, SomersetLive
notes.

Neil Maddocks and Rob Coad of financial advisory firm Undebt, which
is based at Orchard St Business Centre in Bristol, have been
appointed as joint administrators, SomersetLive discloses.

The administrators are advising anyone affected by the collapse to
contact Matt McNaughton, of Undebt, on 01173763523 or email
matt.mcnaughton@undebt.co.uk, SomersetLive states.

The Medical has healthcare centres in Bristol, Bath, Bournemouth,
Cheltenham, Cowes, Didcot, Hemel Hempstead, Keynsham, Midsomer
Norton, Newport, Reading and Wimborne Minster.  It provides
treatments such as physiotherapy, podiatry, osteopathy and
acupuncture, according to its website.  It also offers a wellbeing
service, including heart checks, pilates and massages.


PETRA DIAMONDS: Strong Recovery Won't Avert Debt Restructuring
--------------------------------------------------------------
Allan Seccombe at BusinessDay reports that South Africa's
second-largest diamond producer has noted a one-fifth increase in
rough diamond prices as its three SA mines recovered from the
lockdown, but it's not enough to stave off a massively dilutive
debt restructuring plan.

According to BusinessDay, London-listed Petra Diamonds, which is
engaged in a plan to address a US$650 million bond that falls due
in 2022 and which would dilute existing shareholders to a mere 9%
stake in the miner, reported a decline in production in the quarter
to end-September, the first of its financial year.

Consolidated debt was US$688 million at the end of September,
BusinessDay relays.  Petra has reached an agreement in principle
with the bond holders -- who will take a 91% stake in the enlarged
equity of Petra in exchange for US$400 million of their bonds --
and a consortium of SA banks, BusinessDay discloses.  The debt
deal, which is subject to a shareholder vote, is expected to be
finalized early in 2021, BusinessDay states.

Petra has cash of US$49 million, down from US$54 million at the end
of June. All its debt facilities are fully drawn, BusinessDay
notes.

Petra has warned shareholders that if they don't back the
restructuring plan that will dilute their holdings to 9%, they
could lose their total holdings, BusinessDay relates.  

The restructuring would "provide us with a considerably more
manageable level of debt and marks a significant milestone in
putting the company on a viable footing," BusinessDay quotes CEO
Richard Duffy as saying.


STONEGATE PUB: Fitch Alters Outlook on 'B-' LT IDR to Negative
--------------------------------------------------------------
Fitch Ratings has revised the Outlook on Stonegate Pub Company
Limited's (Stonegate) Long-Term Issuer Default Rating (IDR) to
Negative from Stable and affirmed the IDR at 'B-'.

Fitch has also affirmed the senior secured rating on the senior
secured instruments issued by Stonegate Pub Company Financing 2019
PLC at 'B+'/'RR2', and the second-lien rating on the subordinated
debt issued by Stonegate Pub Company Bidco Limited at 'CCC'/'RR6'.

The Outlook revision reflects the heightened trading uncertainty
due to the evolving roll out of regional lockdowns under the UK
government's tiered approach. As a predominantly wet-led portfolio
of pubs, the vast majority of these would not be able to operate in
a Tier 3 regional lockdown. Additionally, the extent and duration
of regional lockdowns are unknown, which could place pressure on
Stonegate's already limited liquidity profile under its highly
leveraged capital structure.

Its previous forecasts factored in some local lockdowns. However,
restrictions are also being applied to much larger regions,
relative to cities or towns previously envisaged. Government
support for hospitality businesses facing restrictions such as
pubs, will be supportive of Stonegate's near-term liquidity
profile, as this is likely to enable publicans to maintain payment
of rent to Stonegate in the group's leased & tenanted (L&T)
portfolio albeit at slightly reduced levels.

The Negative Outlook also captures the potential for operational
challenges for Stonegate even when trading restrictions are lifted
and this could reduce the group's ability to deleverage.

KEY RATING DRIVERS

Operational Constraints: After positive operating data in
post-lockdown July to early September, operational constraints such
as 10pm closing and more instances of Tier 2 and Tier 3 regional
lockdowns have decreased Stonegate's drinks volumes to a low
60%-65% level (or lower in some formats). Fitch believes that
recently announced government support to the hospitality sector,
including cash grants of up to GBP3,000 per month for Tier 3 closed
pubs and other initiatives in the process of being announced, will
help publicans in the L&T portfolio to pay Stonegate its
contractual rent, even if wet income and profit temporarily ceases
under Tier 3.

The Stonegate managed portfolio continues to optimise cash profits
from a difficult trading environment, with operating formats like
Slug & Lettuce and Classic Inns reportedly doing well, but late
night and town centre formats (Be At One, Venues) continue to limit
their cash burn.

Previous UK Government Support: In addition to staff furlough and a
business rates holiday, for the national lockdown period March to
June, according to the rateable value of each pub, around 90% of
the group's L&T publicans were eligible for GBP10,000-GBP25,000
government grants. Stonegate has also provided trade credit to aid
initial re-stocking in July. These forms of support have provided
L&T publicans with liquidity to cover costs, including re-start-up
costs and to pay accrued rent. Stonegate management reports that
83% of its L&T tenants received these grants, which (as represented
to Fitch) amount to their expected annual net income.

Leveraged Capital Structure: Pro-forma, pre-coronavirus, the
combined group's annualised EBITDAR of GBP508 million relative to
drawn debt of GBP3.2 billion points to lease-adjusted/EBITDAR gross
leverage of 8.0x (or 6.9x including GBP80 million of synergies).
For FY22, post-pandemic, Fitch expects this metric to be around
6.5x.

Compared with other leveraged finance credits, the enlarged group
has positive free cash flow (FCF) post-maintenance capex. However,
with an around 8% average cost of debt after the summer 2020
refinancing, FY22 fixed charge coverage is low at 1.7x.
Management's focus is to run the business "for cash" until trading
conditions improve, before original plans for expansionary capex
can be re-activated.

Diversified Wet-led Pub Formats: The enlarged group, primarily
wet-led, is diversified across the UK, with a 48% weighting in the
south. The diversification aids the group's profile, with Stonegate
weighted towards town centre outlets while EI Group is towards
unbranded suburban pubs, many of which are with outdoor facilities
and closer to workers working from home.

The enlarged portfolio combines Stonegate's 761 managed formats,
which pre-coronavirus yielded an average EBITDAR of GBP270,000/pub
versus EI Group's larger 3,988 L&T portfolios averaging
GBP70,000/pub. Using pro-forma annualised EBITDA figures, the EI
Group/Stonegate profit split was approximately 60:40.

DERIVATION SUMMARY

As there is no Fitch navigator framework for UK pubs, Fitch rates
Stonegate under its global restaurants navigator framework,
acknowledging its predominantly wet-led operations and a
significantly higher proportion of freehold property ownership.

Compared with 'B' rating category peers in Fitch's EMEA credit
opinion portfolio, the acquisition of EI Group affords the group
size and the potential to maximise synergies, while constraining
the potential for further large M&A. Stonegate is not facing the
same severity of challenges seen at casual-dining peers.
Stonegate's higher leverage is partially mitigated by marginally
stronger fixed charge coverage and better financial and operational
flexibility given its freehold property, and greater FCF
flexibility than peers. The revision of the Outlook reflects
pressures on the UK pub sector considering new lockdown
restrictions.

KEY ASSUMPTIONS

  - Using 4Q20 operational data for the EI Group L&T and Stonegate
managed portfolios, which have since both seen reduced volumes
after 10pm closures and other operational constraints, Fitch's
updated rating case FY21 EBITDA is 59% of pro-forma group
pre-synergies EBITDA.

  - Fitch has reduced the EBITDA/pub contributions for lower
volumes and re-phased profitability to reflect evolving operating
conditions. The EI Group estate is a mixture of contractual rent
and (pre-coronavirus) proportionally higher net wet income related
to volumes. These outlets also have greater profit recovery given
their outdoor and non-city centre locations. Fitch's updated rating
case FY21 EBITDA is 71% of pro-forma E&I Group pre-synergies
EBITDA.

  - The Stonegate portfolio is more adversely affected given its
town centre locations, late-night formats, and an operating model
that requires high volumes. Fitch's updated rating case FY21 EBITDA
is 36% of pro-forma Stonegate portfolio pre-synergies EBITDA.

  - Capex is a minimal maintenance level of GBP60 million in FY21,
thereafter increasing above GBP130 million per year.

  - Site disposals resuming from FY21 at GBP35 million for year

  - Total working capital outflow of GBP85 million for FY21

  - Cash of GBP180 million on balance sheet at YE20 for the
restricted group (excluding Unique), with GBP50 million and GBP25
million available on the revolving credit facility (RCF) and
overdraft, respectively.

KEY RECOVERY RATING ASSUMPTIONS

Its recovery analysis assumes that Stonegate would be liquidated
rather than restructured as a going concern in a default.

  - Recoveries are based on the freehold value of the newly
consolidated group. Fitch's liquidation approach uses the September
2019 third-party valuations of the EI Group's freehold and long
leasehold assets, and the updated valuation of the Stonegate
portfolio. The former is based on the 'fair maintainable trade'
(FMT, or profitability) of the pubs, using relevant 8x to 12x
multiples. Fitch applied a 25% discount to the 2019 valuations
comparable with the stress experienced by industry peers during
2007 to 2011 on an EBITDA/pub basis, replicating the FMT component
of the valuation.

  - The 25% discount applicable to the whole portfolio, in the
event   of distress, also reflects the strong record of both groups
in disposing of freehold assets at close to or above book value.

  - After deducting a standard 10% for administrative claims, Fitch
has assumed that the GBP250 million super-senior RCF would be fully
drawn in the event of default.

  - Fitch's principal waterfall analysis generates a ranked
recovery for senior secured loans in the 'RR2' band, indicating a
'B+' instrument rating, two notches above the IDR. The waterfall
analysis output percentage on these metrics and assumptions is
90%.

  - Given the structural subordination in the debt structure, Fitch
assigned a ranked recovery for the second-lien in the 'RR6' band
with 0% expected recoveries. The 'RR6' band indicates a 'CCC'
instrument rating, two notches below the IDR.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to
affirmation (stable outlook):

  - Visibility around the removal of government restrictions on pub
operations

  - Sufficient cash generation to partially clean down drawn
liquidity facilities

  - Continued disciplined working capital management

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

  - Sustained erosion of liquidity headroom into 2H21

  - FFO gross lease-adjusted leverage above 7.0x beyond FY21

  - FFO fixed charge coverage trending towards 1.5x beyond FY21

LIQUIDITY AND DEBT STRUCTURE

Limited Liquidity: Fitch understands from management that as at
end-September 2020 (YE20), around GBP180 million of cash was
on-balance sheet for the restricted group (excluding ring-fenced
Unique) complemented by a total of GBP75 million undrawn liquidity
lines available. Fitch envisages this to be sufficient to steer the
restricted group's operations through FY21, even with EBITDA
depressed towards GBP160million, of which GBP100 million would be
largely derived from rental income from the L&T portfolio; payments
effectively aided by the current levels of government support. This
view also factors in GBP85 million of working capital outflows
during the year as well as GBP35 million of asset disposals.

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.




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

[*] EUROPE: Nearly 200 Airports to Face Insolvency, ACI Says
------------------------------------------------------------
Marine Strauss at Reuters reports that nearly 200 airports in
Europe will face insolvency in the coming months if passenger
traffic does not start recovering by the end of the year, airports
body ACI Europe said on Oct. 27.

An estimated 193 European hubs are considered "at-risk airports",
ACI, as cited by Reuters, said, adding that they contribute to
economic activity that creates 277,000 jobs and EUR12.4 billion
(US$14.66 billion) of European GDP.

Airports at risk are mainly smaller regional ones with fewer than 5
million travellers each year, where closure would have an outsized
impact on local jobs, an ACI spokeswoman told Reuters.

According to Reuters, ACI said larger European airports are also
burning through cash at an unsustainable rate, with the top 20
European airports having added EUR16 billion (US$18.91 billion) of
debt -- equivalent to nearly 60% of their revenues in a normal
year.

Data from ACI showed passenger traffic at European airports
decreased 73% year-on-year in September, with 172.5 million
passengers lost, Reuters discloses.  The total volume of lost
passengers since January 2020 is now 1.29 billion, Reuters notes.

ACI Europe represents over 500 airports out of a total of 740
airports in Europe which have paying passengers.



                           *********


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

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

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

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

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

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


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