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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, December 24, 2020, Vol. 21, No. 257

                           Headlines



F R A N C E

BABAR BIDCO: S&P Assigns 'B-' Ratings, Outlook Stable
MOBILUX 2 SAS: Moody's Affirms B2 Corp. Family Rating


I R E L A N D

HELIOS (NO. 37): S&P Lowers Class E Notes Rating to 'B- (sf)'
LUX ESTATE: High Court Appoints Provisional Liquidator


R U S S I A

BANK ONEGO: Bank of Russia Revokes Banking License
FINTECH LLC: Bank of Russia Revokes Banking License


U N I T E D   K I N G D O M

CD&R FIREFLY: S&P Alters Outlook to Stable, Affirms 'B' ICR
HNVR MIDCO: S&P Affirms 'CCC+' ICR on Proposed Cash Injection
LK BENNETT: Creditors Back Company Voluntary Arrangement


X X X X X X X X

[*] EUROPE: COVID Mutation May Raise Debt Defaults in High-Yield

                           - - - - -


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BABAR BIDCO: S&P Assigns 'B-' Ratings, Outlook Stable
-----------------------------------------------------
S&P Global Ratings assigned its 'B-' ratings to Babar BidCo and the
group's senior secured debt.

The stable outlook reflects S&P's expectation that Babilou will
continue to report strong EBITDA growth in 2020 and 2021, although
S&P notes its FOCF will remain negative to neutral in both years.

Babar BidCo's appetite for expansion and equity-sponsor ownership
limit the the case for pronounced deleveraging.   In November Antin
Infrastructure Partners (Antin IP) acquired a 52.6% stake in
Babilou from the founders and some minority shareholders. To
support the transaction and refinance existing debt, Babar BidCo,
Babilou's new intermediate holding company, issued a new EUR487
million term-loan B and a EUR90 million revolving credit facility
(RCF). S&P said, "We project these issuances will lead to S&P
Global Ratings-adjusted debt to EBITDA of about 6.5x in 2020, and
estimate adjusted debt will amount to about EUR700 million,
including EUR154 million of lease liabilities and EUR17 million of
put/call options on minority stakes. We exclude the shareholder
loans from our debt metrics since we view them as nondebt like. We
typically believe that the private equity-owned sponsors' interest
in deleveraging is low."

S&P said, "Although we anticipate sizable EBITDA growth in the next
few years, we expect it will translate into meaningfully positive
cash flow generation only in 2022.   Under our base case, we
forecast reported EBITDA growth for Babilou of about 25% in 2020
and 5%-10% in 2021 and 2022. This growth is mainly thanks to the
ramp-up of newly opened centers and recent acquisitions, and
despite the impact of the COVID-19 pandemic and its economic
consequences, which we anticipate will be limited. However, we
expect FOCF after lease payments will remain negative to neutral in
2020 and 2021, turning meaningfully positive only in 2022. The
company's FOCF is constrained by working capital outflows coming
from the timing of payment of French subsidies (30% are paid the
following year), our conservative assumption of EUR5 million
refunds to small and medium enterprise (SME) customers in 2021 due
to COVID-19-related nursery closures, and significant digital
development capital expenditure (capex). We note, however, that
this capex is discretionary. In addition, we cannot exclude further
merger and acquisition transactions, which would also hamper cash
flow generation.

"Babilou's modest scale of operations in very fragmented markets
constrains the group's creditworthiness, in our view.  Despite
being the leader in France, Germany, and Luxembourg (which
altogether represent more than 75% of the group's revenue),
Babilou's market share in its core French market is only about 4%
(about 22% of the private bursary market by number of seats),
reflecting fragmented nature of the sector. The group reported
total revenue of about EUR415 million in 2019, four times lower
than that of its U.S. peers Bright Horizons Family Solutions and
KUEHG Corp. We believe scale supports profitability and is
beneficial in fragmented markets with relatively low barriers to
entry, particularly outside of France. In particular, having a
nationwide footprint is a key competitive advantage for large
corporate clients who book seats for their employees. To that
extent, Babilou's brokerage platform in France ("1001 crèches") is
a capex-efficient way to expand coverage.

"Babilou's employer-sponsored model in France supports revenue
stability, in our view.   The company derives about one quarter of
revenue from three-to-five-year contractual arrangements with
corporates that pay fixed annual fees. This comes on top of the
parents' contribution and state subsidies that are based on
occupancy levels. Corporate-client retention is high, with the
company having lost only one customer in the history of its
operations.

"Babilou operates in regulated and subsidized markets, further
supporting business resiliency.  Although operating in such markets
exposes the company to regulatory risks, we believe Babilou
operates in countries where governments are generally supportive.
During the COVID-19-related lockdowns, total financial support from
European governments remained consistent with pre-COVID levels, but
was distributed via partial unemployment schemes as well as
subsidies. This limited the impact of the lockdowns on the group's
EBITDA to almost zero in European countries. In Singapore, the
government also introduced measures to mitigate the economic impact
of COVID-19. Overall, Babilou's operations in the U.S. and United
Arab Emirates are the most exposed to economic risks, because they
are mainly retail-based childcare centers and receive less state
subsidies. However, these represent less than 15% of the group's
revenue.

Revenue stability is important given Babilou's high operating
leverage.   About 90% of Babilou's operating expenses are fixed,
providing limited flexibility to the company in a downturn. The
bulk of expenses are personnel expenses, especially in countries
where the labor market is relatively inflexible and it takes time
to lay people off in a downturn, and rent. The group's
profitability somewhat lags that of peers, although it should
improve in the coming years with the ramp-up of recently opened
childcare centers, with EBITDA margin reaching 22%-24% from 2020.
Furthermore, capex levels are also meaningful, including about EUR9
million of maintenance capex and EUR10 million of information
technology (IT) capex per year.

The childcare market's long-term growth trends are favorable.   The
market is supported by economic and demographic trends, such as an
increasing number of dual-earner households that require childcare
services. The increasing recognition of the importance of early
education is also driving demand for high-quality care.
Furthermore, there is a significant supply/demand imbalance in the
countries where Babilou operates.

S&P Global Ratings believes there remains a high degree of
uncertainty about the evolution of the coronavirus pandemic.  
Reports that at least one experimental vaccine is highly effective
and might gain initial approval by the end of the year are
promising, but this is merely the first step toward a return to
social and economic normality; equally critical is the widespread
availability of effective immunization, which could come by the
middle of next year. S&P said, "We use 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 ratings are line with the preliminary ratings we assigned on
Sept. 23, 2020.  

S&P said, "The stable outlook reflects our expectation that Babilou
will continue to report strong EBITDA growth of about 25% in 2020
and 10% in 2021, driven mostly by the ramp-up of newly opened
centers and recent acquisitions. We forecast that the company's S&P
Global Ratings-adjusted debt to EBITDA will remain at 6.5x-6.0x
over this period. We also anticipate that FOCF after lease payments
will remain negative to neutral in both years, hampered by center
openings and digital transformation capex, as well as structural
working capital outflows and likely refunds to SME corporate
clients due to COVID-19-related lockdowns.

"We could raise our ratings over the medium term if the company met
its operational targets and increased profitability, translating
into sustainably positive FOCF (after lease payments) close to
EUR20 million in 2021 and EUR50 million in 2022. We would also need
to see the company and its owners' financial policy supporting
deleveraging to below 5.5x.

"We could lower our ratings if Babilou proved to be less resilient
to adverse conditions than we currently expect, for instance if it
faced corporate contracts cancellations or refund requests, such
that its FOCF remained negative and its liquidity weakened, or its
leverage became unsustainably high."


MOBILUX 2 SAS: Moody's Affirms B2 Corp. Family Rating
-----------------------------------------------------
Moody's Investors Service has changed the outlook of Mobilux 2 SAS
("BUT"), a holding company owner of French furniture retailer BUT
SAS, to stable from negative. Concurrently, Moody's has affirmed
the company's B2 corporate family rating and its probability of
default rating at B2-PD. At the same time, Moody's has affirmed
Mobilux Finance SAS' B3 rating assigned to the EUR 380 million
guaranteed senior secured notes due 2024 and changed the entity's
outlook to stable from negative.

RATINGS RATIONALE

BUT is now more strongly positioned in the B2 rating. The rating
action is primarily driven by the agency's expectations that key
credit metrics will continue to improve over the next 12 to 18
months, following higher than anticipated demand for home furniture
in France since the first lockdown ended on May 11. The rating
agency now expects the company's Moody's adjusted gross leverage to
trend between 3.7x to 4.0x over the next 12 to 18 months, lower
than the agency initially anticipated of 5x at the beginning of the
coronavirus pandemic. Also, Moody's now expects BUT's Moody's
adjusted free cash flow generation to remain positive, despite the
agency's expectations of large working capital requirements over
the next 12 to 18 months.

The change in outlook to stable recognizes BUT's resilient business
profile before and through the pandemic that has allowed the
company to significantly outperform the French furniture market
over 2020. However, Moody's believes there are downside risks with
regards to the sustainability in demand because the agency does not
expect economic growth in France to return to 2019 levels before
2023, potential pull forward of sales in the financial year 2021
and some uncertainty regarding improvements in BUT's profitability
margins since the first lockdown ended in 11 May because of the
industry's high competition. Moody's base scenario anticipates
BUT's annual like for like growth to return to more normal levels
of around 2% from next calendar year.

In the short term, while there are still downside risks from the
coronavirus pandemic as highlighted by the second lockdown imposed
in France over the month of November, Moody's believes BUT's good
liquidity position mitigates these risks. Also, continued social
distancing rules should create benefits for the industry as more
people work from home and travel less, which combined with
increased disposable income, which has built up during lockdowns,
has increased spending for home furniture.

OUTLOOK RATIONALE

The stable outlook reflects Moody's expectation that BUT will
continue to operate with a Moody's adjusted EBITDA margin around
the low teens in percentage terms on a sustained basis, while
continuing to generate positive Moody's adjusted FCF. This should
support deleveraging, with Moody's adjusted gross leverage expected
to trend to around 4.0x over the next 12 to 18 months. The stable
outlook also reflects the credit agency's expectation that the
company will maintain a prudent financial policy, with
discretionary spending calibrated to the company's FCF generation.
Moody's forecasts do not incorporate dividend payments.

LIQUIDITY PROFILE

BUT's liquidity is good. The company had a cash and cash
equivalents of EUR505 million at September 30, 2020 and no debt
amortization until the notes of the restricted group mature in
November 2024. However, BUT's operations are seasonal and
characterized by large working capital requirements ahead of its
peak periods, typically ahead of the year-end holiday period.
Moody's expects large working capital outflows over the next few
quarters as demand normalizes.

The company also has full availability on its super senior
revolving credit facility of EUR100 million, due in November 2022.
Although the RCF has one maintenance covenant defined as net
leverage (maximum of 6.375x), the company has significant capacity
under it, and Moody's do not expect it to breach the threshold over
the next 12-18 months, if tested.

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

Positive pressure could emerge if BUT demonstrates an ability to
sustainably enhance its profitability, maintains its current market
shares, sustains its positive Moody's adjusted FCF generation, and
displays a balanced financial policy between creditors and
shareholders. Quantitatively, upward rating pressure would require
Moody's-adjusted (gross) debt/EBITDA to sustainably remain below
4.5x and for Moody's-adjusted EBIT/interest expense to be above
1.75x on a sustained basis.

Conversely, downward pressure could emerge if BUT's Moody's
adjusted FCF generation turns negative for a prolonged period as a
result of a weakened operating performance, the company adopts a
more shareholder-friendly financial policy, its Moody's-adjusted
(gross) debt/EBITDA is sustainably in excess of 5.5x or
Moody's-adjusted EBIT/interest expenses trends below 1.25x. A
weakening liquidity profile could also exert pressure on the
rating.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Retail Industry
published in May 2018.

COMPANY PROFILE

Mobilux 2 SAS is the holding company of BUT. Headquartered in
France (Emerainville) BUT is the second-largest home equipment
retailer in France, with revenue of EUR1.8 billion and company
adjusted EBITDA of EUR163 million for the last twelve months to
September 2020. Mobilux 2 SAS is owned by an investment consortium
comprising a private equity firm — Clayton, Dubilier & Rice - and
WM Holding, an investment company associated with the XXXLutz
group, an Austrian furniture retailer.




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HELIOS (NO. 37): S&P Lowers Class E Notes Rating to 'B- (sf)'
-------------------------------------------------------------
S&P Global Ratings lowered to 'B- (sf)' from 'B+ (sf)' and removed
from CreditWatch negative its credit rating on Helios (European
Loan Conduit No.37) DAC's class E notes.

On April 7, 2020, S&P placed on CreditWatch negative its rating on
Helios (European Loan No. 37)'s class E notes due to social
distancing measures and restrictions on travel constraining the
transaction's ability to pay interest in the absence of any
available liquidity or cash support.

Helios is backed by a single GBP350 million loan, which was
originated in December 2019 to facilitate the refinancing of 49
limited service hotels in the U.K. by London & Regional
Properties.

At closing, the issuer used the class RFN's proceeds to fund a
liquidity reserve for the transaction. The reserve is available to
pay, among other things, senior expenses and interest payments to
the class RFN, A, B, C, and D noteholders. However, the class E
notes do not benefit from any coverage.

Social distancing measures and restrictions on transportation have
significantly curtailed business travel and tourism since the first
wave of the COVID-19 outbreak spread across Europe in early 2020.
While S&P expects there to be a bounce-back in activity over the
long-term, it is likely that the hotel sector will continue to
experience severe liquidity stress over a short-term period. As
such, in the absence of any available liquidity or cash support,
the class E notes remain vulnerable to the risk of an interest
shortfall resulting from a decline in portfolio income.

S&P said, "In our view, the transaction's credit quality has
declined due to operational disruption resulting from the spread of
COVID-19. We believe this will negatively affect the cash flows
available to the issuer.

"Our ratings on this transaction address the payment of interest,
payable quarterly, and the payment of principal no later than the
legal final maturity dates, which is in May 2030. We have therefore
lowered to 'B- (sf)' from 'B+ (sf)' and removed from CreditWatch
negative our rating on the class E notes, as we believe that there
is less than a one-in-two likelihood for a further downgrade over
the next 90 days.

"Finally, we applied our 'CCC' criteria to assess if either a
rating in the 'B-' or 'CCC' category would be appropriate. While we
recognize that the hotel sector has faced extreme cash flow
declines due to COVID-19, we expect some degree of recovery in
revenues and net cash flow in 2021 and 2022."

S&P Global Ratings believes there remains a high degree of
uncertainty about the evolution of the coronavirus pandemic. While
the early approval of a number of vaccines is a positive
development, countries' approval of vaccines is merely the first
step toward a return to social and economic normality; equally
critical is the widespread availability of effective immunization,
which could come by mid-2021. S&P said, "We use 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 for this
credit rating change:

-- Health and safety.


LUX ESTATE: High Court Appoints Provisional Liquidator
------------------------------------------------------
Aodhan O'Faolain at The Irish Times reports that the High Court has
appointed a provisional liquidator to an Irish-registered luxury
property investment firm operated by an alleged fraudster.

According to The Irish Times, the order was made in respect of Lux
Estate Capital Limited, with a registered address at Townspark,
Trim Road, Athboy, Co Meath, which purports to be involved in real
estate investments in various countries, primarily in Spain.

The court heard that the company was run and owned by a Polish
national called Lukasz Salamander, aka Lukasz Salamandra, The Irish
Times discloses.

It is alleged that he used Lux "as a vehicle to procure monies by
way of bogus investments in property", The Irish Times notes.

The High Court heard that following representations from Mr.
Salamander fellow Polish national Katarzyna Kryzaznowska invested
EUR40,000 in the firm on false pretenses and claims to be a victim
of "a fraud", The Irish Times relays.

She sought the return of her investment, but when her monies were
not repaid, she petitioned the court to have Lux wound up, The
Irish Times states.

Insolvency practitioner Myles Kirby was appointed as provisional
liquidator to the company by Ms. Justice Leonie Reynolds this week,
after the court was told Lux was insolvent and could not pay its
debts as they fall due, The Irish Times recounts.

Arising out of the court's order, Mr. Kirby will take control of
the firm's assets, including its bank accounts, as well as its
books and records, The Irish Times discloses.

The judge made the matter returnable to a date in December,
according to The Irish Times.




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BANK ONEGO: Bank of Russia Revokes Banking License
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The Bank of Russia, by its Order No. OD-2051, dated December 11,
2020, revoked the banking license of Petrozavodsk-based Joint-stock
Company Bank Onego, or JSC Bank Onego (Registration No. 2484,
hereinafter, the Bank).  The credit institution ranked 308th by
assets in the Russian banking system.

The Bank of Russia made this decision in accordance with Clauses 6
and 6.1 of Part 1 of Article 20 of the Federal Law "On Banks and
Banking Activities", based on the facts that the Bank:

   -- violated federal banking laws and Bank of Russia regulations,
due to which the regulator repeatedly applied measures against it
over the past 12 months, which included restrictions on certain
banking operations;

   -- failed to comply with the anti-money laundering and
counter-terrorist financing laws.

The Bank's activities were largely focused on conducting
non-transparent funds transfer operations in favour of illegal
online casinos, bookmakers, and betting houses.

In addition, the credit institution was involved in conducting
dubious clients' operations to withdraw funds abroad.

The Bank of Russia appointed a provisional administration to JSC
Bank Onego for the period until the appointment of a receiver or a
liquidator.

In accordance with federal laws, the powers of the credit
institution's executive bodies were suspended.

Information for depositors: JSC Bank Onego is a participant in the
deposit insurance system, therefore depositors will be compensated
for their deposits in the amount of 100% of the balance of funds
but no more than a total of RUR1.4 million per depositor (including
interest accrued), excluding the cases stipulated in Chapter 2.1 of
the Federal Law "On the Insurance of Deposits with Russian Banks".

Deposits are to be repaid by the State Corporation Deposit
Insurance Agency (hereinafter, the Agency). Depositors may obtain
detailed information regarding the repayment procedure 24/7 at the
Agency's hotline (8 800 200-08-05) and on its website
(https://www.asv.org.ru/) in the Deposit Insurance/Insurance Events
section.


FINTECH LLC: Bank of Russia Revokes Banking License
---------------------------------------------------
The Bank of Russia, by virtue of its Order No. OD-2053, dated
December 11, 2020, revoked the banking license of Moscow-based
Commercial Bank FinTech (Limited liability company), or Commercial
Bank FinTech (LLC) (Registration No. 3499, hereinafter, the Bank).
The credit institution ranked 241st by assets in the Russian
banking system.

The Bank of Russia made this decision in accordance with Clauses 6
and 6.1 of Part 1 of Article 20 of the Federal Law 'On Banks and
Banking Activities', based on the facts that the Bank:

  -- violated federal banking laws and Bank of Russia regulations,
due to which the regulator repeatedly applied measures against it
over the past 12 months, which included two instances of imposing
restrictions on certain banking operations; and

  -- failed to comply with the anti-money laundering and
counter-terrorist financing laws.

The Bank specialized in conducting non-transparent operations aimed
at servicing the organizers of illegal online gambling activities.
In addition, the credit institution repeatedly violated the
restrictions imposed by the regulator on conducting certain types
of operations.

The Bank of Russia appointed a provisional administration to
Commercial Bank FinTech (LLC) for the period until the appointment
of a receiver or a liquidator.  In accordance with federal laws,
the powers of the credit institution's executive bodies were
suspended.




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CD&R FIREFLY: S&P Alters Outlook to Stable, Affirms 'B' ICR
-----------------------------------------------------------
S&P Global Ratings revised its outlook on orecourt operator CD&R
Firefly 4 Ltd. (Motor Fuel Group) to stable from negative, and
affirmed its 'B' issuer credit rating.

The stable outlook reflects the steady increase in headroom at the
current rating level and expectations that even though fuel margins
are expected to show a moderate decline in 2021, MFG will continue
to reduce leverage, so that debt-to-EBITDA gradually approaches
6.3x in 2021.

MFG's business model proved resilient during the pandemic-related
lockdowns.  The group uses a company-owned, franchise-operated
model, whereby it directly owns nearly all of the sites; supplies
and retains full ownership of fuel sales; and collects the
partially fixed franchise fees arising from nonfuel activities such
as food-to-go and convenience stores. Most of its costs comprise
fuel purchases--which can be periodically adjusted according to
demand--and running costs for its sites and headquarters. Because
of its freehold ownership of a high proportion of sites, lease
payments total only GBP8 million-GBP12 million per year. Operating
leverage is therefore relatively low, which reduces swings in
performance during market downturns and supports cash generation.

High fuel margins and effective cost-cutting has allowed MFG to
gradually expand its earnings in 2020, despite the volatility
caused by the pandemic.  MFG's petrol stations and convenience
stores were classified as essential retailers and were able to
trade throughout the lockdowns implemented to curb the spread of
COVID-19, although footfall and demand for fuel were both
diminished. S&P said, "The collapse in vehicle traffic caused by
lockdowns and travel restrictions will cause fuel volumes to
contract sharply in 2020, by 20%-25%, in our view. However, the low
oil prices which persisted throughout the year underpinned a
substantial increase in fuel margins per liter, more than
offsetting the decline in volumes. As a result, we expect fuel
gross profits in 2020 to be comparable with the previous year,
reaching GBP220 million-GBP240 million. At the same time, we expect
the company will control site expenses, which are expected to
decline by 20%-25% in 2020, compared with 2019. After adding the
franchise fees from the nonfuel activities and the other operating
costs, we forecast that reported EBITDA will be GBP280
million-GBP290 million in 2020."

Gross profits from fuel are expected to show a modest expansion in
2021 and 2022, toward GBP240 million-GBP260 million. This will stem
from a moderate decline in margins, caused by rising oil prices and
competitive pressures, offset by a robust 13%-18% recovery in fuel
volumes. Food-to-go penetration across MFG's estate currently
stands at 14%. As the number of food-to-go sites gradually
increases and the convenience store offering expands, S&P expects
to see further upside for MFG. The progressive relaxation of social
distancing measures will also increase capacity and footfall at the
food-to-go sites.

S&P said, "We forecast MFG's reduction in leverage will be slightly
ahead of our previous expectations, with debt-to-EBITDA approaching
6.3x-6.5x in 2020.  This will be underpinned by a gradual expansion
in earnings and moderate revolving credit facility (RCF)
repayments. Given that the company hedged the balance of its
euro-denominated term loan, we did not include the impact of the
pound sterling depreciation in 2020 in calculating adjusted debt.
Compared with other retailers, MFG's lease liabilities are
relatively low, estimated at GBP80 million-GBP100 million in 2020,
due to the large share of freehold assets. We expect the reduction
in leverage will stabilize in 2021, as an expected increase in site
costs and a moderate decline in fuel margins will offset the
recovery in fuel volumes.

"At the same time, we anticipate that reported free operating cash
flow (FOCF) after leases will remain robust in 2020, despite a
moderate working capital outflow, at about GBP90 million-GBP100
million. Our forecast suggests that reported FOCF after leases will
fall back to GBP60 million-GBP90 million in 2021 and 2022, as the
gradual increase in cash flow from operations will fund more
capital expenditure (capex) to expand and improve the network.

"After recovering in 2021 and 2022, we expect fuel volumes to trend
down over the long term.  MFG's concentration in the U.K. poses
elevated regulatory risk because of the government's policy
measures to reduce carbon emissions and could curb further earnings
upside. Although this is unlikely to have a material impact over
our forecast horizon of 2021-2022, we expect petrol sales to face a
major disruption over the next decade. The transition toward
e-mobility is accelerating, underpinned by the U.K. government's
ban on new petrol and diesel cars from 2030, and subsidies for
electric vehicles (EV). Moreover, if the areas of restricted access
for diesel and petrol vehicles were to broaden, demand for
traditional fuel-powered vehicles could decline well before 2030.

"As EVs can be charged at home, footfall at the forecourts could
decline. This would have a domino effect on the cross-selling of
nonfuel products. We forecast that fuel volumes will organically
decline after the postpandemic rebound. Therefore, we consider that
it will be crucial for MFG to adapt its offering to meet the demand
for electric chargers, and to attract customers to its stations.

"The stable outlook indicates that MFG has increased financial
headroom at the current rating level. We also expect it to reduce
leverage gradually in 2020 and 2021, resulting in debt-to EBITDA
approaching 6.3x-6.5x. FOCF generation is predicted to be stable as
fuel volumes and non-fuel activities recover in 2020, but
profitability sees a moderate decline due to a reduction in fuel
margins. We also anticipate that Brexit will not have a prolonged
disruptive effect on MFG's operations because most of its suppliers
are based in the U.K."

S&P could downgrade MFG if its adjusted debt to EBITDA exceeds 6.5x
over the next 12-18 months, or if reported FOCF and liquidity
weaken. This could happen if:

-- Oil prices increase beyond our current expectations, leading to
a compression in fuel margins per liter;

-- The company cannot control its site cost base or capex as its
site network gradually expands, or as a result of a Brexit
disruption; or

-- MFG undertakes further debt-funded opportunistic acquisitions
or shareholder remuneration.

S&P could raise the rating over the next 12-18 months if the
company reduces adjusted debt to EBITDA sustainably below 5.0x,
with strong and growing FOCF. This could occur if the company:

-- Expands its sites network without a major capital outflow
beyond its forecast;

-- Demonstrates ability to preserve its revenue base and
profitability despite the changes affecting the passenger vehicle
parc in the U.K.;

-- Allocates some of its internally generated cash to debt
repayment; and

-- Commits to a financial policy commensurate with stronger credit
metrics.


HNVR MIDCO: S&P Affirms 'CCC+' ICR on Proposed Cash Injection
-------------------------------------------------------------
S&P Global Ratings affirmed its 'CCC+' issuer credit rating on
Hotelbeds' parent, HNVR Midco Ltd., as well as its 'CCC+' issue
ratings on the senior secured debt. The recovery rating remains
'4', reflecting its expectations of average recovery (rounded
estimate: 40%) in the event of a default.

Continued support from the financial sponsors in the form of a
EUR175 million cash injection strengthens the group's liquidity
position.

Subject to approval of the amendment and extension, or to the
completion of a potential scheme of arrangement, the additional
liquidity will be provided by the group's financial sponsors,
Cinven, CPPIB, and EQT, in the form of a EUR175 million
payment-in-kind (PIK) shareholder loan to the Hotelbeds' ultimate
parent entity, HNVR Topco Ltd. S&P understands that the funds would
then flow to HNVR Midco Ltd. as common equity. This will mark their
second investment in the group in 2020, after they put in place a
EUR400 million term loan D facility in April to support the group's
liquidity position through the pandemic.

S&P said, "While the EUR175 million investment from the group's
financial sponsors meets many conditions for equity treatment, we
are treating it as debt, in line with our criteria, because
following the term loan D issuance earlier this year the financial
sponsors now hold about 20% of the cash-pay debt outstanding in the
capital structure. Nevertheless, our ratings will continue to
reflect the group's credit metrics excluding such instruments."

The proposed amendment and extension aims to delay a refinancing
event further, by two years, while reducing availability under the
debt basket to non-obligors.

If successfully completed, Hotelbeds' debt maturity profile will
comprise:

-- EUR248 million due September 2024 under the RCF;

-- EUR1.0 billion due September 2025 under the term loan B; and

-- EUR800 million due September 2027 under the term loan C and D
facilities.

S&P considers that the additional investment provided by the
financial sponsors and the commitment fee of 25 bps offered to the
lenders constitute adequate compensation for the extension of the
debt maturities. The proposal also includes a reduction in the debt
basket available for intra-group loans to non-obligors to EUR75
million from EUR300 million.

The maturity extension would give Hotelbeds more time to turn
around its credit metrics before any refinancing transaction.

As well as providing additional liquidity ahead of a likely
challenging first-half 2021, if approved the proposed transaction
will enable the group to gradually improve its operating
performance and credit metrics ahead of the revised RCF maturity in
September 2024. S&P views this as positive for the current ratings,
given we do not anticipate a full recovery in leisure travel until
2023.

Hotelbeds has recently reported a sharp decline in topline and
earnings as a result of the pandemic.

Although domestic travel has proved resilient in several of the
group's jurisdictions, Hotelbeds' total transaction value (TTV) in
the year ended Sept. 30, 2020 (FY2020) was far from that in FY2019.
At EUR451 million, the group's revenue over the second half of
FY2020 was only a fraction of the EUR3.4 billion reported in
second-half FY2019, leading to negative earnings and significant
operating cash burn for FY2020. The halt in operations in March
2020 also significantly affected the group's working capital
position, historically materially negative, which led the group's
financial sponsors (Cinven, CPPIB, and EQT) to inject cash in the
form of a EUR400 million senior term loan D, initially set to
mature in 2025, in line with the EUR400 million term loan C.

S&P continues to see a high risk that the current capital structure
could be unsustainable in the long term, characterized by extremely
high leverage and an uncertain path to recovery in underlying
credit metrics.

Hotelbeds' financial debt totals just over EUR2 billion, and
following the proposed amendment and extension process the capital
structure comprises:

-- A fully drawn EUR248 million RCF due September 2024;
-- EUR1.0 billion term loan B facility due September 2025;
-- EUR400 million term loan C facility due September 2027; and
-- EUR400 million term loan D facility due September 2027.

S&P said, "With severely depressed earnings over the near term and
our expectation that the international travel industry will take at
least until 2023 to recover to 2019 levels, we anticipate extremely
high leverage for the foreseeable future, with S&P Global
Ratings-adjusted leverage of above 25x (15x excluding shareholder
instruments) until at least FY2022.

"Our negative outlook reflects significantly subdued group
operations until at least the second half of next year. While,
under our current base case, we don't anticipate a shortfall in
liquidity over the next 12 months, our expectations are underpinned
by a swift recovery in trading over second-half 2021, fueled by the
prospects of one or multiple vaccines becoming widely available and
preventing further spikes in COVID-19 cases in Hotelbeds' main
regions. That said, the negative outlook also reflects our view
that the path and timing to a full recovery in the global travel
industry remains uncertain. At this stage, we do not expect a full
recovery in trading volumes until at least 2023.

"We could lower our long-term issuer credit rating on HNVR Midco
Ltd. if the recovery in trading conditions for global travel does
not advance in line with our current expectations, leading to a
high risk of liquidity shortfalls in the foreseeable future. A
negative rating action could also arise if we believed a distressed
exchange or conventional default event would likely take place over
the next 12 months.

"We could revise the outlook to stable if the group managed to turn
around its trading performance, fueled by a swift recovery in the
travel industry and consumer confidence. To consider an upgrade we
would need to see the company's trading returns to levels
commensurate with its capital structure, resulting in adjusted
leverage below 8.0x excluding PIK shareholder loans."

LK BENNETT: Creditors Back Company Voluntary Arrangement
--------------------------------------------------------
Huw Hughes at FashionUnited reports that LK Bennett has been given
the green light by creditors to move ahead with its company
voluntary arrangement (CVA) that will see five of its stores
permanently close and the rest move to turnover-based rents.

The British womenswear retailer employs 400 staff and has 18
standalone stores, FashionUnited discloses.

The retailer said last month that the CVA would result in a small
number of job losses as the business attempts to "mitigate the
ongoing financial impact of the Covid-19 pandemic", FashionUnited
relays, citing Drapers.

According to FashionUnited, it said at the time that its eventwear
and workwear categories, which are usually among its best
performing, have both been impacted by Covid-19, while a drop in
tourism in London has also hit sales.

It also said it doesn't expect sales to fully recover until
mid-2021, FashionUnited notes.

The retailer fell into administration in March 2019 after calling
in advisers in February to examine its options, FashionUnited
recounts.  A month later, Chinese franchise partner Byland UK
bought the UK, Irish and wholesale division of the company,
FashionUnited relays.

In April this year, accountancy firm EY, which is overseeing the
administration, extended the process by another year, FashionUnited
states.





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

[*] EUROPE: COVID Mutation May Raise Debt Defaults in High-Yield
----------------------------------------------------------------
Yoruk Bahceli at Reuters reports that the new mutation of COVID-19
risks increasing debt defaults among junk-rated companies next year
above what was previously anticipated, Russell Investments's global
head of fixed income said on Dec. 22.

Gerard Fitzpatrick told Reuters a highly infectious new strain of
the virus that has led much of the world to cut off travel ties to
Britain could increase the U.S. high-yield bond default rate to
6%-8% in the next 12 months, compared to earlier expectations of
5%-8%.

Mr. Fitzpatrick said in European high-yield, where credit quality
is perceived as higher, default rates could rise above the 4% the
asset manager initially expected, Reuters relates.

Mr. Fitzpatrick also said the new COVID variant increases the
possibility of the Bank of England adopting negative rates, Reuters
notes.



                           *********


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

Troubled Company Reporter-Europe is a daily newsletter co-
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Editors.

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