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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

          Friday, May 7, 2021, Vol. 22, No. 86

                           Headlines



C Y P R U S

AVIA SOLUTIONS: Fitch Affirms 'BB' LT IDR, Alters Outlook to Stable


F I N L A N D

MEHILAINEN YHTYMA: Fitch Affirms 'B' LT IDR, Outlook Stable
MEHILAINEN YHTYMA: Moody's Upgrades CFR to B2, Outlook Stable


F R A N C E

CHROME HOLDCO: Moody's Assigns B2 CFR, Outlook Stable
CHROME HOLDCO: S&P Assigns 'B' Long-Term ICR, Outlook Stable
VERALLIA SA: S&P Rates EUR500MM Sustainability-Linked Notes 'BB+'


G E R M A N Y

RENK GMBH: Moody's Puts B1 CFR Under Review for Downgrade
TUI CRUISES: Fitch Assigns FirstTime 'B-(EXP)' IDR, Outlook Pos.
TUI CRUISES: Moody's Assigns First Time B3 Corp Family Rating
WIRECARD AG: EY Anti-Fraud Specialist Says Red Flags Ignored


I R E L A N D

BARINGS EURO 2021-1: Moody's Assigns (P)B3 Rating to EUR8M F Notes
OAK HILL VII: Moody's Affirms B3 Rating on EUR10MM Class F Notes
SOUND POINT V: Moody's Assigns B3 Rating to EUR10.75M Cl. F Notes


I T A L Y

GOLDEN GOOSE: Fitch Assigns 'B' LT IDR, Outlook Stable
GOLDEN GOOSE: Moody's Assigns First Time B2 Corp Family Rating
GOLDEN GOOSE: S&P Assigns Preliminary 'B-' Ratings, Outlook Stable


R O M A N I A

MAS REAL ESTATE: Fitch Assigns FirstTime 'BB' LT IDR, Outlook Pos.
MAS REAL: Moody's Assigns Ba1 CFR on Strong Market Position


R U S S I A

RESO-LEASING: S&P Withdraws 'BB+' Long-Term Issuer Credit Rating


S L O V E N I A

HOLDING SLOVENSKE: S&P Withdraws 'BB' LT Issuer Credit Rating


S P A I N

BBVA RMBS 14: Moody's Ups EUR63M Class B Notes Rating from Ba2 (sf)
TDA 29: Moody's Upgrades EUR9.3MM Class C Notes Rating to Ba3 (sf)


T U R K E Y

AKBANK TAS: Fitch Affirms 'B+' LT IDR, Outlook Neg.
LIMAK ISKENDERUN: Fitch Assigns BB-(EXP) Rating to USD360MM Notes
LIMAK ISKENDERUN: Moody's Rates New USD360M Sr. Secured Notes 'B3'
TURKIYE CUMHURIYETI ZIRAAT: Fitch Affirms 'B+' LT IDR, Outlook Neg.
TURKIYE GARANTI: Fitch Affirms 'B+' LT IDR, Outlook Stable

TURKIYE HALK: Fitch Maintains 'B' LT IDR on Watch Neg.
TURKIYE IS BANKASI: Fitch Affirms 'B+' LT IDR, Outlook Neg
TURKIYE VAKIFBANK: Fitch Affirms 'B+' LT IDR, Outlook Neg.
YAPI VE KREDI: Fitch Affirms 'B+' LT IDR, Outlook Neg.


U N I T E D   K I N G D O M

DEBENHAMS PLC: Confirms Final Closure Dates for Remaining Stores
FOOTBALL INDEX: Issues Statement on Distribution of Monies Owed
LIBERTY STEEL: Metals Group Misses Tata Acquisition Payments
VIRGIN ACTIVE: Awaits Court Ruling on Restructuring Plan
WIGAN ATHLETIC: Administrators File Last Report in Court



X X X X X X X X

[*] BOOK REVIEW: Hospitals, Health and People

                           - - - - -


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C Y P R U S
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AVIA SOLUTIONS: Fitch Affirms 'BB' LT IDR, Alters Outlook to Stable
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Fitch Ratings has revised the Outlook on Avia Solutions Group Plc's
(Avia) Long-Term Issuer Default Rating (IDR) to Stable from
Negative and affirmed the IDR at 'BB'. Fitch has also affirmed the
'BB' senior unsecured rating of the USD300 million bonds issued by
ASG Finance Designated Activity Company, which is 100% owned by
Avia. The bonds are guaranteed by Avia and its key divisional
subsidiaries accounting for over 90% of Avia's consolidated
revenues.

The Outlook revision reflects Fitch's updated assumptions for the
aviation industry as well as Avia's updated business plan,
reflecting the impact of the coronavirus pandemic and the market
conditions. Avia's credit metrics were weak for the rating in 2020
due to the impact of the pandemic on profitability, but Fitch
forecasts they will return to within Fitch's rating sensitivities
by end-2021.

Avia's liquidity position was strong at end-2020, due to the bond
proceeds received in 2019, which were to be used for investments
but got delayed due to the pandemic. If Avia's recovery is
significantly slower than Fitch's assumptions, Fitch expects the
company to adjust its capital structure to the business size or
reduce non-contracted capex to preserve liquidity to support the
ratings.

The IDR is supported by the diversity of Avia's operations in
various segments of the commercial aviation value chain,
diversification by geography with a focus on Europe and currently
low asset intensity. Key person risk stemming from majority
ownership by one individual is a limiting factor despite
historically limited dividends. Fitch's forecasts assume no
dividend payments over 2021-2025.

KEY RATING DRIVERS

Manageable Impact from Economic Crisis: Avia's operations in
different commercial aviation segments resulted in a varied impact
from the coronavirus pandemic-driven aviation and economic shock.
Avia Support Services, which provides maintenance, repair and
overhaul (MRO), fuel and ground handling and training services, is
more closely linked to commercial aviation demand and recorded a
significant decline in 2020 EBITDA. Fitch expects this division to
remain weak in 2021 and recover from 2022.

The cargo brokers business, which has had increased demand due to
the pandemic-driven need for humanitarian relief and specialised
cargo, recorded very strong EBITDA performance, with the EBITDA
margin more than doubling to above 25% in 2020. Fitch expects the
EBITDA margin to start normalising, driven by lower air freight
rates compared with 2020.

Leasing Segments Weakened: The aircraft wet leasing (ACMI) business
was the most affected business in 2020 as the majority of leased
out aircrafts were grounded given the commercial passenger aviation
shutdown. This resulted in a sharp fall in leasing-out revenues
from Avia's customers, which Avia has been able to offset by
negotiating with its own lessors of those aircrafts. Fitch expects
continued weakness in this business, given Fitch's outlook for only
a gradual recovery in air travel demand and excess capacity at
commercial airlines.

Aircraft trading and leasing business (AAML) was able to continue
its operations, albeit at a lower level than Fitch's
pre-coronavirus expectations. The majority of proceeds from the
USD300 million bond issued in 2019 were going to be used to fund
investments in this business, but these were put on hold. With some
of the recent trading as well as leasing deals undertaken by Avia
in this business, Fitch expects AAML's EBITDA to be stable in 2021
compared with 2020 and comparable with 2019 levels in 2022.

Well Diversified Business Model: Avia's operations span most of the
B2B segments in the commercial aviation sector ranging from MRO,
passenger and cargo charter, leasing, training to aircraft trading.
Avia is one of the leading independent aviation players in central
and eastern Europe (CEE) with its customers including some of the
major European airlines. Avia continues to generate the majority of
its revenues from the developed markets of Germany, UK, Ireland and
the US, with CEE countries the other key markets. It also plans to
increase its exposure to East Asia through the AAML business.

Established Market Positions: Avia has strong market positions in
the CEE MRO and ground handling segments, which benefit from
competitive advantages such as limited infrastructure availability
for new entrants, licensing and certification requirements. In the
aircraft leasing and trading businesses, Avia has been a large
player with aircraft leased out to some of the largest airlines in
Europe. The short-term nature of wet-leasing enabled the company to
manage customer risk, as evidenced by its ability to reduce leasing
costs in line with the decline in revenues.

Avia is increasing its exposure to the cargo and logistics business
following the acquisitions of Chapman Freeborn and Bluebird Nordic
and the resilient performance of the segment in 2020.

Better-then-expected Metrics: As a result of the operational
decline in 2020, funds from operations (FFO) adjusted leverage
increased to 5.4x in 2020 but Fitch expects it to decline to within
the rating sensitivities by end-2021. This leverage trajectory is
slightly better than Fitch's earlier expectation due to the
continued demand and performance at some of Avia's businesses, such
as aircraft trading and cargo.

DERIVATION SUMMARY

Avia's business model is a combination of mostly service-oriented
businesses and to a lesser extent, more asset-intensive business of
aircraft trading. In contrast to passenger airlines, Avia operates
in the B2B commercial aviation market. Given its operations in MRO,
ground handling and leasing businesses, Fitch views its business
profile as more stable than passenger airlines but on par with or
marginally weaker than large pure ground handling companies. The
company operates on a smaller scale and different portfolio mix
than larger well-established lessors such as AerCap Holdings N.V.
(BBB-/Rating Watch Negative) or Air Lease Corporation
(BBB/Negative).

KEY ASSUMPTIONS

-- Aviation support services (MRO, fuelling, logistics, charter
    and training): to remain weak in 2021 with recovery from 2022
    riven by expansion of the business.

-- ACMI: Fitch expects this business to remain weak at least till
    2022 due to the exposure to passenger travel demand in the
    market.

-- AAML: Fitch expects EBITDA in 2021 to be similar to 2020
    levels (about -50% from 2019) and improve in 2022 based on
    contracted pipeline.

-- Cargo brokers: significant decline in EBITDA in 2021 from the
    highs of 2020 due to assumed normalisation of air freight
    rates.

-- Capex in line with management forecasts.

-- No dividend payments during the forecast period of 2021-2025.

RATING SENSITIVITIES

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

-- FFO-adjusted gross leverage sustainably below 3.0x, driven by
    recovery from 2021 onwards;

-- Successful implementation of organic growth strategy leading
    to consolidated EBITDA margin exceeding 10%;

-- Usage of available debt issuance proceeds in line with
    management plan, leading to balanced growth of asset-intensive
    aircraft leasing and trading business as well as the services
    oriented businesses.

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

-- FFO-adjusted gross leverage sustainably above 4.0x due to a
    prolonged impact from global economic crisis or implementation
    of an ambitious investment or dividend policy.

-- Decline in consolidated profitability (EBITDA margin) below
    5%, including significant decline at AAML due to the inability
    to execute new business opportunities, while maintaining
    current debt structure, which was put in place to support
    investment-driven growth.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: Avia's liquidity at end-2020 consisted of
EUR204 million of cash and equivalents, benefiting from the unused
proceeds from the unsecured bond issued in 2019, which were meant
to be used to fund planned investments to support growth. This
liquidity compares with EUR10 million of short-term bank debt, and
EUR50 million of short-term finance leases. Fitch forecasts 2021
free cash flow to be negative EUR120 million due to an increase in
the company's planned capex to EUR148 million, the majority of
which is discretionary in nature.

ESG CONSIDERATIONS

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



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F I N L A N D
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MEHILAINEN YHTYMA: Fitch Affirms 'B' LT IDR, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has affirmed Mehilainen Yhtyma Oy's (Mehilainen)
Long-Term Issuer Default Rating (IDR) at 'B' with a Stable Outlook
ahead of its proposed refinancing. Fitch has also affirmed
Mehilainen's senior secured debt at 'B+'/'RR3' and its second lien
debt at 'CCC+'/'RR6'. Fitch expects to affirm the senior secured
debt rating on completion of the term loan B (TLB) add-on of EUR300
million at 'B+'/'RR3' and withdraw the second-lien debt rating,
which will be prepaid from the TLB add-on proceeds.

Mehilainen's IDR of 'B' continues to reflect a delicate balance
between an aggressive financial risk profile with defensive
diversified operations and sustainably positive free cash flow
(FCF). The Stable Outlook reflects Fitch's expectations that the
company will be able to demonstrate a stable operating performance
through an organic and acquisitive growth strategy embedded in a
steady and well-funded regulatory framework.

KEY RATING DRIVERS

Transaction Rating Neutral: Fitch views the increase in the
announced TLB increase as rating neutral as the new debt proceeds
will be used to repay a portion of the existing first-lien TLB and
fully repay the more expensive second lien tranche, with the
remainder staying as cash overfunding. Consequently, the total debt
quantum remains largely unchanged, leading to a steady leverage
profile of 8.0x based on FFO adjusted level post-refinancing.

Defensive Diversified Operations: As a social infrastructure asset,
Mehilainen benefits from stable and steadily growing demand across
its diversified service lines. Its strong position in the Finnish
private healthcare and social care markets with reasonable scale
supports the company's ability to maintain operating and cash flow
profitability amidst evolving regulatory changes.

No Headroom Under Credit Metrics: An extensive debt-funded growth
strategy results in funds from operations (FFO) adjusted gross
leverage of around 8.0x and FFO fixed charge cover of 1.6x, leaving
no headroom under the 'B' IDR. Fitch sees no meaningful scope for
structural improvement in credit metrics as Fitch expects operating
efficiency gains to be reinvested to absorb rising costs,
particularly with personnel-intensive social care operations.
Maintenance of positive FCF generation remains key in supporting
the 'B' rating.

Deleveraging Unlikely: Since the buyout in 2018, Mehilainen has
stabilised its FFO adjusted leverage at around 8.0x from high
starting levels of 8.8x. At the same time, its strong trading
performance with steadily growing FFO freeing up some leverage
capacity has been used by the sponsor to issue additional TLB fully
exhausting the leverage headroom available under the assigned 'B'
IDR. The current TLB add-on follows the strategy of permanently
high leverage making de-leveraging unlikely in the medium term.

Robust Cash Flow Generation: Mehilainen has maintained permanently
positive FCF, and Fitch expects this pattern will remain with FCF
margins estimated at around 4% and annual FCF projected at EUR50-60
million, after investments in greenfield units. Positive cash flows
are supported by adequate operating profitability, structurally
negative trade working capital and comparatively low for the sector
capital intensity of 2%-3%. The transaction will lead to lower
interest expenses of EUR5 million each year, further boosting FCF
generation. Fitch projects much of the FCF will be reinvested into
M&A.

High Risk of M&A: Fitch sees event risks from the company's recent
public announcement to intensify opportunistic M&A, including
larger targets in Finland as well as international expansion. Fitch
estimates cumulative acquisitions of up to EUR200 million until
2024 that can be financed with a combination of internal cash flow
and the RCF. Larger or additional acquisitions will require
issuance of new debt and may put the ratings under pressure,
subject to Fitch's assessment of their impact on Mehilainen's
operating profile, execution risk, acquisition economics and
funding mix.

Temporary Benefits from Pandemic: COVID-19 testing contributed to
higher EBITDA and profitability in 2020. Based on still high
testing volumes expected this year, Fitch projects a broadly
similar effect from COVID-related business volumes on Mehilainen's
profitability in 2021. As COVID-19 testing activity starts
declining towards end of 2021, Fitch forecasts operating
performance will return to low- to mid-single-digit organic growth
and EBITDA margins to below 11% from 2022 and, therefore, do not
factor in a continuous material revenue and earnings contribution
from pandemic-related services in the medium term.

SOTE Reform Neutral to Negative: The latest draft of the Finnish
Healthcare and Social Care Reform (SOTE reform) favours the public
sector as the primary service provider, supplemented in some areas
by private contributions. As a result, Mehilainen's largest
outsourcing contract Lansi-Pohja involving provision of primary
healthcare and large parts of central hospital functions would be
at risk of early termination, which would impact an estimated 3% of
EBITDA. In the longer term the reform will likely limit
Mehilainen's organic growth prospects in the public healthcare
market. Fitch expects the company's social care service lines will
be unaffected

DERIVATION SUMMARY

Unlike most Fitch-rated private healthcare service providers with a
narrow focus on either healthcare or social care services,
Mehilainen differentiates itself as an integrated service provider
with diversified operations across both markets. It has a
meaningful national presence in each type of service, making its
business model more resilient against weaknesses in individual
service lines. Mehilainen also benefits from a stable regulatory
framework, which contrasts especially with the UK, where private
operators such have been exposed to margin pressures due to a
reduction in local authorities' fees.

Mehilainen's weak financial metrics are balanced by adequate
operating profitability and sustainably positive cash flow
generation given its asset-light business model with low capital
intensity and structurally negative trade working capital.

Mehilainen's credit risk as a whole, and operating and financial
risk profiles, are similar to other social infrastructure credits
such as the provider of laboratory-testing services Laboratoire
Eimer Selas (Biogroup, B/Stable), which is also pursuing a
consolidation strategy in fragmented markets backed by private
equity. As a result, leverage for both issuers is comparatively
aggressive, more commensurate with a high 'CCC' category at
8.0x-9.0x. Similar to Mehilainen, Biogroup's high leverage is
equally counterbalanced by its defensive operations, intact organic
growth and satisfactory FCF generation, supporting the company's
'B' ratings.

Fitch also compares Mehilainen with the French private hospital
operator Almaviva Development (B/Stable), with both companies'
ratings reflecting strong national market position, reliance on
stable regulation limiting the scope for profitability improvement,
low to mid-single digit FCF generation, elevated leverage profile
of 7.0x-8.0x and M&A driven growth strategy.

KEY ASSUMPTIONS

Fitch's key assumptions within its rating case for the issuer
include:

-- Revenue CAGR of c.5.8% during 2021-2024, driven by a
    combination of internal and external growth; slightly higher
    sales growth of about 8% for 2021 due to COVID-19 testing
    activity and some rebound in the social care segment with
    recovering occupancy rates;

-- Steady EBITDA margin (Fitch-defined, excluding IFRS 16
    adjustments) at around 11% until 2024;

-- Capex averaging around 2.5% of revenue each year until 2024;

-- Trade working capital largely neutral;

-- Ongoing business restructuring and optimization changes
    included in Funds of Operations as recurring business cost;

-- Bolt-on acquisition spending of around EUR30 million - EUR85
    million until 2024;

-- No dividends for the next four years.

Recovery Assumptions:

The recovery analysis assumes that Mehilainen would be reorganised
as a going-concern in bankruptcy rather than liquidated.

Fitch has revised Fitch's estimate post-restructuring EBITDA to
EUR105 million from EUR95-98 million previously to reflect the
growing asset base given the acquisitions completed since 2020,
including the most recent add-on M&A in Estonia and Sweden. Fitch
views this GC EBITDA as appropriate for the company to remain a
going-concern reflecting possible restructuring benefits
post-distress.

Fitch continues to apply a distressed enterprise value (EV)/EBITDA
multiple of 6.5x, implying a premium of 0.5x over the sector median
reflecting Mehilainen's broadly stable and balanced regulatory
regime for private service providers in Finland, well-funded
national healthcare systems and the company's strong market
position across diversified business lines.

The allocation of value in the liability waterfall results in a
Recovery Rating of 'RR3' for the existing first lien senior secured
TLB of EUR810 million and RCF of EUR125 million, which Fitch
assumes will be fully drawn prior to distress, indicating a 'B+'
instrument rating with a waterfall-generated recovery computation
(WGRC) of 66% (prev.59%) based on current assumptions, and a
Recovery Rating of 'RR6' for the second lien debt of EUR200
million, leading to a 'CCC+' instrument rating with a WGRC of 0%
(prev. 0%) based on current assumptions.

On completion of the TLB add-on of EUR300 million Fitch expects to
affirm the first-lien senior secured debt at 'B+'/'RR3', albeit
with a lower WGRC of 52% given the enlarged first-lien secured debt
size, and withdraw the second lien debt rating of 'CCC+'/'RR6'
following its prepayment with the new TLB proceeds.

RATING SENSITIVITIES

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

-- Successful execution of medium-term strategy leading to a
    further increase in scale with EBITDA margins at or above 15%
    on a sustained basis (2020: 11.3%, Fitch-defined excluding
    IFRS 16);

-- Continued supportive regulatory environment and Finnish macro
    economic factors;

-- FCF margins remaining at mid-single-digit levels (2020: 3.1%);

-- FFO-adjusted gross leverage improving towards 6.5x (2020:
    8.3x) and FFO fixed-charge cover trending towards 2.0x (2020:
    1.5x).

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

-- Pressure on profitability with EBITDA margin declining towards

    10% on a sustained basis as a result of weakening organic
    performance, productivity losses with fewer customer visits,
    lower occupancy rates, pressure on costs, or weak integration
    of acquisitions;

-- Weakening credit profile as a result of opportunistic and
    aggressively funded M&A;

-- Risk to the business model resulting from adverse regulatory
    changes to public and private funding in the Finnish
    healthcare system, including from the SOTE reform;

-- As a result of the above adverse trends, declining FCF margins
    to low single-digits;

-- FFO-adjusted gross leverage remaining above 8.0x and cash from
    operations-capex/total debt falling to low single digits due
    to operating under-performance or aggressively funded M&A and
    FFO fixed-charge cover persistently below 1.5x.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.

LIQUIDITY AND DEBT STRUCTURE

Comfortable Liquidity: Fitch views Mehilainen's liquidity as
comfortable given EUR85 million of on-balance-sheet cash as of
March 2021, projected sustained positive FCF generation of EUR
50-60 million and fully undrawn committed RCF of EUR125 million.

Refinancing risk remains manageable given the company's long-dated
TLB and second-lien maturities are in 2025 and 2026, respectively.

ESG CONSIDERATIONS

Mehilainen has an ESG Relevance Score of '4' for Exposure to Social
Impact due to the company's high dependence on healthcare and
social care reimbursements schemes and access to the publicly
funded healthcare and social care markets, which has a negative
impact on the credit profile and is relevant to the rating in
conjunction with other factors.

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.

MEHILAINEN YHTYMA: Moody's Upgrades CFR to B2, Outlook Stable
-------------------------------------------------------------
Moody's Investors Service has upgraded the corporate family rating
to B2 from B3 and the probability of default rating to B2-PD from
B3-PD of Mehilainen Yhtyma Oy. Concurrently, Moody's has affirmed
the B2 instrument rating of the first lien senior secured term
loan, the B2 instrument rating of the senior secured revolving
credit facility, all issued by Mehilainen Yhtiot Oy, a subsidiary
of Mehilainen Yhtyma Oy. Moody's has also assigned a B2 instrument
rating to the proposed EUR300 million add-on to the senior secured
first lien term loan by Mehilainen Yhtiot Oy. The outlook of both
entities is stable.

The proceeds from the proposed EUR300 million senior secured first
lien term loan add-on will be used to repay EUR50 million of the
existing senior secured first lien term loan and EUR200 million
senior secured second lien term loan in full.

RATINGS RATIONALE

The rating action is driven by the following interrelated drivers:

Broadly neutral impact of the transaction on the total leverage
with potential to lower interest burden.

Overall limited impact from COVID-19 outbreak. EBITDA in the first
half of 2020 was lower than budget due to the reduced customer
visits, which was largely offset by testing activities and
acceleration of digital offering in the second half.

Good track record since the 2018 LBO with revenue growth, stable
Moody's adjusted EBITA margin, positive free cash flow (before
bolt-on) and deleveraging.

Good liquidity.

Mehilainen has been acquiring bolt-on targets largely using its
cash generated over the past years, leading to deleveraging since
its LBO in 2018. At the end of 2020, Moody's adjusted Debt / EBITDA
stood at 6.9x, and is expected to further improve towards 6.0x in
the next 12-18 months.

Mehilainen's ratings are supported by: (1) its leadership position
in Finland's privately provided healthcare and social care market,
(2) the company's diversification in terms of services offered,
customers and funding sources and (3) the defensive nature and
favourable trends of the Finnish healthcare and social care market.
The company benefits from barriers to entry including its size, its
network of facilities across Finland, its strong brand built thanks
to its long track record in the market and its experience
navigating the local complex regulatory environment.

Conversely, the ratings are constrained by (1) its high leverage
for the rating category, (2) the company's concentration to Finland
and exposure to its regulatory risks and (3) the execution risks
linked to the projected EBITDA increase namely integration and
synergy realization of acquisitions, ramp up of greenfield, new
outsourcing contracts win, and increase in utilization rate of its
social care units.

OUTLOOK

The stable outlook reflects Moody's expectations that market
conditions will remain stable and that Moody's-adjusted debt/EBITDA
will gradually improve towards 6.0x in the next 12-18 months. The
stable outlook also assumes that while the company will likely
continue its M&A activity, reasonable size, funding mix,
acquisition multiples and successful integration will not result in
the Moody's adjusted debt / EBITDA remaining above 6.5x. The stable
outlook further includes the expectation that in case of a large
acquisition, the financing would include an equity contribution.

LIQUIDITY

Liquidity is good supported by (1) around EUR25 million at the end
of March 2021, pro forma for recent acquisitions, (2) an additional
EUR48 million overfunded as a result of the contemplated
transaction, (3) an RCF of EUR125 million fully undrawn, out of
which EUR7.5 million are carved out for bank guarantees, with
sufficient headroom under financial covenants, (4) limited working
capital swings of up to EUR15 million, (5) long-dated maturities
with the with both the RCF and the term loan maturing in August
2025.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS

Moody's considers that Mehilainen has an inherent exposure to
social risks given the highly regulated nature of the healthcare
industry and the sensitivity to social pressure related to
affordability of and access to health services.

Moody's considers that governance risks for Mehilainen would be any
potential failure in internal control which would result in a loss
of accreditation of reputational damage and as a result could harm
its credit profile. Because of Mehilainen's good operating track
record, there is no evidence of weak internal control. Given its
private equity ownership, Mehilainen has a relatively aggressive
financial strategy characterized by high financial leverage,
shareholder friendly policies such as the pursuit of debt-financed
acquisitions.

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

Given the high leverage level, an upgrade is unlikely in the
short-term. However, positive pressure could develop if the company
improves its Moody's-adjusted leverage to below 5.0x on a
sustainable basis while maintaining good liquidity including
meaningful positive free cash flow generation.

The ratings could be downgraded if (1) the company's operating
performance deteriorates, (2) Moody's-adjusted leverage remains
above 6.5x on a sustainable basis, (3) free cash flow (before
bolt-on) turns negative, (4) liquidity concerns arise, (5) any
large-size debt-funded acquisitions or shareholder distributions
leads to increased leverage.

STRUCTURAL CONSIDERATIONS

The B2 ratings of the senior secured first lien term loan and of
the senior secured RCF are pari passu and rated in line with the
CFR in absence of any significant liabilities ranking ahead or
behind.

PRINCIPAL METHODOLOGY

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

COMPANY PROFILE

Mehilainen, headquartered in Helsinki Finland, is a provider of a
wide range of services in the private healthcare, public
outsourcing and social care sectors, with a market share of around
15% in Finland. Mehilainen covers the entire spectrum of healthcare
and social care services including occupational healthcare, primary
and secondary healthcare, dental, elderly, mental and disabled, and
child welfare.

Since August 2018, the Mehilainen Group is owned by CVC Capital
Partners (57%), the life insurance company LocalTapiola (20%), two
pension insurance companies Varma (8%) and Ilmarinen (4%), the
State Pension Fund of Finland (5%), the Pharmacy Pension fund
(0.6%), the Valion Elakekassa Pension Fund (0.4%) and management
(5%).



===========
F R A N C E
===========

CHROME HOLDCO: Moody's Assigns B2 CFR, Outlook Stable
-----------------------------------------------------
Moody's Investors Service has assigned a new B2 corporate family
rating and a new B2-PD probability of default rating to Chrome
HoldCo (Cerba), the new top entity of Cerba's restricted group.
Concurrently, Moody's has assigned a B1 instrument rating to the
proposed senior secured term loan B and a B1 instrument rating to
the proposed senior secured revolving credit facility, issued by
Chrome BidCo, a subsidiary of Chrome HoldCo. The outlook on Chrome
HoldCo and Chrome BidCo is stable.

The proceeds from the proposed senior secured term loan B, along
with other senior secured and senior unsecured debts as well as
equity will be used to finance the acquisition of a majority stake
in Cerba by EQT, with PSP reinvesting alongside management.

RATINGS RATIONALE

The rating action balances the significant re-leveraging effect
from the contemplated transaction, which will increase the gross
debt by around EUR700 million with the strengths of Cerba's
business profile namely, the defensive demand drivers, the good
track record of the company as a rated entity as illustrated by an
organic growth above the peer group, high EBITDA margin and
positive free cash flow generation.

Pro forma for the proposed refinancing, Moody's adjusted debt /
EBITDA would reach 6.6x, based on FY 2020 EBITDA including COVID-19
impact.

The rating action also takes into account the current strong
tailwind from COVID-19 testing activities. Cerba recorded a 35%
revenue growth in 2020 driven by a strong acceleration of COVID-19
testing activities, mainly PCR testing, during Q3 and Q4. For 2020,
the company estimates that its positive revenue impact from
COVID-19 testing is EUR236 million, which is net of revenue lost on
its core business due to the impact of lockdown and social
distancing measures especially during the 1st wave of the pandemic.
Thanks to scale effects, the boost from COVID-19 testing translated
into margin expansion from 23.3% in 2019 to 29.6% in 2020 (Moody's
adjusted EBITDA). In the context of the 3rd infection wave and the
slow start of the vaccination roll-out, Moody's forecasts Q1 2021
to be a strong quarter in terms of PCR testing revenues in
continental Europe. However, the rating agency expects that the
volume of PCR tests will likely phase down over the course of 2021,
since the need to detect the virus will likely diminish as vaccines
become widely available. In the US and the UK, two countries ahead
of continental Europe in terms of vaccines distribution, the
monthly volume of PCR tests have already started to decline by
around 30% and 20%, respectively, over the December 2020 to March
2021 period. The slope of the decline is highly uncertain and will
depend on different factors including (i) the pace and efficiency
of the current vaccines distribution, (ii) the emergence of new
variants, (iii) the potential cannibalization from antigen and home
tests, (iv) the risk of further reimbursement declines, (v) the
future testing policies from the public authorities as lockdown
measures are gradually lifted, and (vi) the need for serology
testing. Beyond 2021, Moody's anticipates that the need for testing
COVID-19 or other infectious diseases will likely remain but at
levels which will probably be significantly lower than what the
sector currently experiences. Testing will likely remain a central
tool within the public authorities' ongoing surveillance, track and
trace strategy especially during the winter season.

The rating agency recognizes the short term benefit of the strong
COVID-19 testing activity expected for 2021 because it will support
free cash flow generation which, once reinvested within the company
e.g. through M&A or other initiatives, will translate into
sustainable EBITDA improvement. The pandemic has highlighted the
vital importance of testing for public health, certainly a positive
for the sector in the medium term.

Moody's forecasts Cerba's revenue to grow further in 2021 driven by
a strong contribution from COVID-19 testing as explained above.
Beyond 2021, Moody's currently forecasts the exceptional boost from
COVID-19 testing to gradually normalize. Moody's forecasts Cerba's
underlying core organic growth to accelerate over the next 12-18
months driven by the conversion of a strong backlog in its central
labs business and its international activities notably in Africa.
The current rating is based on the expectation that underlying core
organic growth coupled with bolt-on M&A mainly financed by
internally generated cash flow will drive underlying EBITDA
increase and a Moody's adjusted leverage of around 6.7x by 2023
when COVID-19 revenue will have normalized.

Financial policy is a key rating driver for the ratings. M&A has
been a key pillar of Cerba's growth strategy historically
especially in France. In a sector continuously subject to tariff
cuts, inorganic growth allowed large networks to achieve economies
of scale and efficiency gains. Business rationale, acquisition
multiples and funding will be key drivers of the ratings of Cerba
going forward. In order to maintain its B2 CFR, Cerba should
demonstrate a willingness, in the context of its M&A strategy, to
maintain its Moody's adjusted debt/EBITDA below 7.0x and its
Moody's adjusted FCF/debt towards 5%.

Price pressure has been a credit constraint for the sector in the
past. European public authorities have put tariff cuts on hold last
year as the sector was seen as instrumental in the day to day fight
against the coronavirus. In France, a 2.5% tariff cut has been
agreed in April 2021 as part of the 2020-22 triennial agreement. In
the other geographies where Cerba is present and similar tariff
dynamics exist such as Belgium, Luxembourg or Italy, there is no
planned tariff cuts at this stage. However, there is a risk that
pricing pressure could increase over time as European governments
grapple with the cost of supporting their economies during the
pandemic.

OUTLOOK RATIONALE

The stable outlook reflects Moody's expectation that the operating
environment will remain favorable for the next quarters as the
additional volume from COVID tests will more than offset potential
disruptions on core volume as long as the pandemic persists. The
stable outlook also assumes that the company's M&A strategy will
remain measured in terms of size, pace and acquisition multiple and
that funding will not result in a Moody's adjusted debt / EBITDA
higher than 7.0x.

LIQUIDITY

Cerba's liquidity is good supported by (1) EUR50 million cash on
balance sheet after closing of the proposed transaction, (2) a new
EUR325 million senior secured revolving credit facility undrawn at
closing, (3) positive free cash flow expected for the next 12-18
months and (4) long dated maturities post contemplated
refinancing.

ESG CONSIDERATIONS

Cerba has an inherent exposure to social risks, given the highly
regulated nature of the healthcare industry and its sensitivity to
social pressure related to the affordability of and access to
healthcare services. Governance risks for Cerba include any
potential failure in internal control that could result in a loss
of accreditation or reputational damage and, as a result, could
harm its credit profile. Given its private equity ownership,
Moody's considers that Cerba has a relative aggressive financial
strategy characterised by a tolerance for high financial leverage
and shareholder-friendly policies such as the pursuit of
debt-financed acquisitions.

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

Positive pressure could arise over time if (1) the Moody's-adjusted
debt/EBITDA falls below 5.5x on a sustained basis and (2) the
Moody's-adjusted FCF/debt improves towards 10% on a sustained
basis.

Downward rating pressure could develop if (1) the leverage, as
measured by Moody's-adjusted debt/EBITDA, does not remain below
7.0x on a sustained basis, (2) the Moody's adjusted FCF/debt does
not remain close to 5% on a sustained basis and /or (3) the
company's liquidity deteriorates.

PRINCIPAL METHODOLOGY

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

LIST OF AFFECTED RATINGS

Assignments:

Issuer: Chrome BidCo

Senior Secured Bank Credit Facility, Assigned B1

Issuer: Chrome HoldCo

Probability of Default Rating, Assigned B2-PD

LT Corporate Family Rating, Assigned B2

Withdrawals:

Issuer: Constantin Investissement 3 S.A.S.

Probability of Default Rating, Withdrawn , previously rated B2-PD

LT Corporate Family Rating, Withdrawn , previously rated B2

Outlook Actions:

Issuer: Chrome BidCo

Outlook, Assigned Stable

Issuer: Chrome HoldCo

Outlook, Assigned Stable

PROFILE

Cerba Healthcare S.A.S., headquartered in Paris, France, is a
provider of clinical laboratory testing services in France,
Belgium, Luxembourg, Italy and Africa and generated revenue of
EUR1.3 billion for full year 2020.

CHROME HOLDCO: S&P Assigns 'B' Long-Term ICR, Outlook Stable
------------------------------------------------------------
S&P Global Ratings assigned its 'B' long-term issuer credit and
issue ratings to Chrome HoldCo SAS, Cerba's holding company and the
proposed senior secured TLB, which has a '3' (50%) recovery
rating.

The stable outlook reflects its view that Cerba's resilient
operating model should enable it to sustain profitable growth and
solid cash flow despite a deflating polymerase chain reaction (PCR)
test earnings contribution beyond 2021, allowing S&P Global
Ratings-adjusted leverage to remain below 7.0x.

In March 2021, private-equity firm EQT announced it would acquire a
majority stake in France-based biological diagnostics operator
Cerba Healthcare (Cerba), with current owner PSP Investments
reinvesting in the group.

The acquisition is being financed via EUR2.3 billion of new debt
including a EUR1,525 million senior secured term loan B (TLB) and
an unrated EUR325 million revolving credit facility (RCF), expected
to be undrawn at closing.

The proposed issuances will lead to an increase in S&P Global
Ratings-adjusted debt to EBITDA to about 5.5x-6.0x at year-end
2021, from 4.7x in 2020, before peaking at 6.5x-7.0x in 2022 as
COVID-19 testing contribution dissipates, and funds from operations
(FFO) cash interest of about 3.0x-4.0x over the same period.

S&P said, "We assume that, despite the contribution from PCR
testing dissipating in 2022, the company's leverage will remain
below 7x, under the proposed leveraged buyout capital structure.
EQT announced its acquisition of a majority stake in Cerba on March
30, 2021. The remaining shares will be split between PSP
Investments (reinvesting in the company), Cerba's biologists, and
management. To support the transaction, Cerba is issuing new debt
of EUR2.3 billion, including a senior secured EUR1.5 billion TLB,
and a EUR325 million RCF expected to be undrawn at closing. This
represents an increase of about EUR700 million compared with our
adjusted debt figure for year-end 2020. We project these issuances
will lead to S&P Global Ratings-adjusted debt to EBITDA of about
5.5x-6.0x (from 4.7x at year-end 2020) and FFO cash interest
coverage of about 4.0x in 2021 (from 4.4x at year-end 2020). We
project our adjusted EBITDA metric at EUR440 million-EUR460 million
over the next 12 months, from EUR400 million in 2020, mainly
supported by substantial demand for COVID-19 testing throughout
2021 and, to a lesser extent mergers and acquisitions (M&A). We
forecast a decline to EUR370 million-EUR390 million in 2022,
reflecting our assumption of a lower contribution from PCR testing.
That said, Cerba's earnings should continue to benefit from strong
organic growth in its core business as well as efficiency gains and
increased operating leverage from strong volume growth in its
research lab business, which conducts pharmaceutical research drug
trials. As a result, we forecast leverage will increase in 2022 but
remain near 6.5x-7.0x once testing tapers off. We estimate adjusted
debt of EUR2.6 billion following the proposed transaction including
EUR2.3 billion of new debt, about EUR193 million of lease
liabilities, EUR89 million of rolled local lines, and EUR26 million
of pension-related liabilities.

"We view the diversity of Cerba's service offering as a key
strength, with exposure to specialized testing and clinical
research trials supporting organic growth of about 4%-6% in the
next 12-18 months, despite a price-constrained market
environment.Cerba operates across all clinical pathology segments
including routine testing, specialty testing, as well as contracts
with pharmaceutical companies for early research drug trials. The
group has notably a co-leading position in the French specialized
testing market and is among the top 10 worldwide in research.
Organic growth of the research lab business was consistently above
30% between 2017 and 2020 and we believe it will remain around
those levels over the forecast horizon, supported by the current
strong backlog. We view positively that Cerba's current backlog is
highly diversified across contracts and therapeutic areas and
mainly relates to classical trials. We understand that it also
partly benefitted from demand related to COVID-19 trials for
vaccines and drugs over past quarters. For instance, Cerba
developed a whole genome sequencing tool to read the genetic code
of COVID-19 and identify potential variants, aiming to facilitate
development of effective treatments. Specialized testing also
benefits from higher growth prospects compared to routine testing,
which we assume will be about 3%-5% over the forecast horizon and
broadly in line with historical trends, supported by longstanding
partnerships with hospitals, nursing homes, and private labs." This
will help mitigate subdued organic growth for the medical lab
business in France (Cerba's largest contributor) because of
regulation-linked structural pricing pressure to contain volume
growth. The current three-year agreement allows for increases
capped at 0.4% in 2020, 0.5% in 2021, and 0.6% in 2022.

Cerba will continue to benefit from material COVID-19 testing
demand in 2021, but earnings volatility will arise beyond this year
as the rate of volume decline and magnitude of price cuts remain
uncertain. Cerba has rapidly increased its production capacity to
support the need to diagnose and identify COVID-19 patients in its
markets. This provided about EUR236 million of revenue in 2020,
along with a substantial EBITDA contribution. S&P said, "We assume
demand for PCR testing will remain strong in 2021 and until
population immunity becomes more established, reflecting the uneven
roll out of vaccination campaigns, persistent testing requirements
for easing restrictions, back-to-work policies, as well as travel
needs. As a result, we factor a material EBITDA contribution
related to PCR testing in 2021, especially as we understand margins
on those tests recently improved due to better purchasing
conditions on reagents. In Cerba's main market, France, PCR tests
are fully reimbursed by statutory health insurance and do not
require a medical subscription, with the three-year agreement
excluding reimbursement for COVID-19 testing. We view this as
positive, but we believe the price of PCR tests could reduce beyond
2021 in line with government measures to contain health care
budgets and due to competition from COVID-19 autotests in
pharmacies. Moreover, volumes will markedly decrease once a large
share of the population has been vaccinated. This could create
volatility in earnings and credit metrics in the medium term. As a
result, we conservatively assume a limited earnings contribution
from PCR testing as early as 2022. In the longer term, we believe
that some positive trends could last, related to travel
requirements and infectious diseases prevention, albeit at a
substantially lower level."

S&P said, "We assume Cerba will maintain sound organic margins from
continuous efficiency measures and synergies.Cerba generates a
relatively high S&P Global Ratings-adjusted EBITDA margin of nearly
23%-24% annually (excluding COVID-19 testing) despite its exposure
to traditionally lower-margin business-to-business (B2B) contracts.
This compares favorably to close peers such as Synlab at about
20%-21% and Unilabs at about 21%-22% (both excluding COVID-19
testing). In our view, this gap is partly due to Cerba's exposure
to profitable research lab volumes, as well as its positive track
record of integrating new laboratories into its network with
controlled execution of efficiency gains. We assume the group will
continue to generate sound organic margins, reflecting synergies
from business integration, ongoing cost-saving initiatives from the
redesign of its back office functions, as well as increased
operating leverage in the research lab business, which will offset
restructuring costs and pricing pressures.

"We forecast Cerba will generate EUR60 million-EUR70 million of
free operating cash flow (FOCF; after lease payments) in the next
12-18 months.This is thanks to its high profit margins and
increased focus on working capital management mitigating upcoming
investments in growth capital expenditure (capex). We assume cash
flow will be supported by continued working capital discipline,
with inflows of EUR15 million-EUR20 million in 2021 due to high
invoicing in second-half 2020 for COVID-19 testing. We expect
limited working capital outflows of EUR10 million thereafter,
reflecting strong control over B2B customer payment terms, which
will mitigate the need to integrate stocks and align receivables
collection related to M&A. We assume capex of about EUR65
million–EUR70 million in the next 12-18 months, mostly related to
project capex to support market share gains through relocation of
labs to more attractive areas and modernization of collection
centers. Maintenance capex requirements are low, at an estimated
2.0%-2.5% of revenue.

"Successful deleveraging is conditional upon disciplined financial
policy, with control on multiples paid and delivery of promised
synergies. Acquisitions remain an integral part of the group's
strategy and we assume about EUR120 million-130 million of M&A
spending per year over the forecast horizon. We understand that
about one-third of the French routine market is still
unconsolidated, which represents an important opportunity for
Cerba, owing to pricing pressure and slowly rising volumes in this
segment. As a result, we believe that Cerba's ability to maintain
leverage comfortably below 7x by 2022 will depend on it
consistently generating FOCF in line with our base case to
self-fund bolt-on M&A, as well as smooth M&A integration for cost
synergies. We take comfort from management's track record in
achieving S&P Global Ratings-adjusted margin improvement. For
instance, margin improved to 21.3% in 2018 from 17.0% in 2017
despite numerous bolt-on acquisitions including Bio7 in April
2018.

"The stable outlook reflects our view that Cerba will sustain the
recent recovery in routine and specialized tests and maintain
profitable organic growth of 4.0%-6.0%, despite tariff pressure in
its main French market, while benefiting from PCR testing
contributions and overcoming M&A-related integration risks. This
should translate into S&P Global Ratings-adjusted EBITDA margin of
about 29%-31% and S&P Global Ratings-adjusted debt to EBITDA below
6x in the following 12 months.

"We also expect that, despite the contribution from PCR testing
dissipating in 2022, the company's leverage will remain below 7x,
assuming the proposed capital structure.

"The stable outlook reflects our belief that management's focus on
cash collection will continue to translate into comfortable FOCF of
more than EUR60 million and FFO cash interest coverage of close to
3x-4x. This considers normalized pre-COVID-19 working capital
outflows and higher capex as operating activity resumes."

S&P could lower the ratings if the group's credit metrics weaken,
including one or more of the following factors:

-- Financial policy becomes more aggressive, causing adjusted debt
to EBITDA to rise persistently above 7x;

-- The group's earnings deteriorate once the PCR testing
contribution dissipates, in turn leading to materially lower FOCF;
or

-- FFO cash interest coverage weakens toward 2.0x.

S&P could take a positive rating action if Cerba accelerates
returns on the ongoing investment program, ensuring profitability
and FOCF that materially exceed its base-case forecasts. This
strong operational performance would need to be combined with debt
reduction from a slowdown of external growth, with leverage falling
sustainably close to 5x, thereby decreasing long-term refinancing
risk.


VERALLIA SA: S&P Rates EUR500MM Sustainability-Linked Notes 'BB+'
-----------------------------------------------------------------
S&P Global Ratings has assigned its 'BB+' issue rating and '3'
recovery rating to Verallia S.A.'s proposed sustainability-linked
senior unsecured notes. S&P understands that the proposed notes
will be up to EUR500 million and have a tenor of five-to-seven
years.

The rating on the notes is in line with S&P's 'BB+' issuer credit
rating on France-based glass packaging producer Verallia. The
recovery rating of '3' reflects its expectation of meaningful
recovery (50%-70%; rounded estimate: 65%) in the event of a
default. The limited amount of prior ranking claims (primarily
comprised of drawdowns under factoring and local debt facilities)
supports the rating. It is constrained by the unsecured nature of
the notes.

The proposed issuance will partly refinance Verallia's term loan A
due 2024. The notes, the remaining term loan A, and the EUR500
million revolving credit facility due 2024 are all senior
unsecured. The proposed notes will be issued by Verallia S.A. and
will benefit from an upstream guarantee from Verallia Packaging.

S&P said, "Our hypothetical default scenario assumes rising raw
material costs that the company is not able to pass on to
customers, as well as a sustained economic slowdown. We value
Verallia as a going concern due to its leading market positions,
the industry's high barriers to entry, and limited substitution
risk. The company's longstanding relationships with a diverse and
global customer base also support this view."

Simulated default assumptions

-- Year of default: 2026

-- Emergence EBITDA after recovery adjustments: About EUR347
million

-- Implied enterprise value multiple: 5.5x
-- Jurisdiction: France

-- A cap on the recovery rating of unsecured debt at '3' (recovery
expectations: 65%).

Simplified waterfall

-- Gross enterprise value at default: About EUR1,910 million

-- Administrative costs: 5%

-- Net value available to debtors: EUR1,815 million

-- Priority claims: About EUR363 million

-- Senior unsecured debt claims: About EUR1,974 million [1]

-- Recovery expectations: 50%-70% (rounded estimate: 65%)

-- Recovery rating: 3

[1] All debt amounts include six months' prepetition interest. The
RCF is assumed to be 85% drawn at default.




=============
G E R M A N Y
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RENK GMBH: Moody's Puts B1 CFR Under Review for Downgrade
---------------------------------------------------------
Moody's Investors Service has placed on review for downgrade the B1
corporate family rating and the B1-PD probability of default rating
of RENK GmbH. Moody's has also placed on review for downgrade the
B1 rating of its existing EUR320 million guaranteed senior secured
notes issued by RENK GmbH (formerly Rebecca Bidco GmbH).
Concurrently, the outlook has been changed to ratings under review
from stable.

The review follows the announcement that RENK has signed an
agreement to acquire the Combat Propulsion Systems business and
Magnet-Motors GmbH from L3Harris Technologies, Inc. (Baa2, stable)
for around $400 million cash consideration. The completion of the
transaction is subject to clearance from relevant regulatory
authorities and is expected to close during the second half of
2021.

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

The rating action reflects the uncertainties around the details of
the transaction, its financing and the acquisition target itself.
The acquisition of the Combat Propulsion Systems business and
Magnet-Motors GmbH is sizable for RENK, and may lead to an increase
in leverage beyond levels commensurate with the B1. Moody's
nevertheless recognizes that company will benefit from an increase
in scale and diversification into the US market, which may offset
the weaker credit metrics.

The review will focus on (1) the financing structure of the
acquisition, (2) the likely trajectory of credit metrics in the
next 12-18 months, in particular the impact of the incremental
on-balance and off-balance sheet debt relative to the current and
expected profit and cash flow contribution of the acquisition
target, including the potential for synergies, (3) liquidity needs
as a consequence of the enlarged business, and (4) business risk
implications, balancing scale and diversification benefits and
potential integration challenges linked to the acquisition. A
downgrade, if any, would likely be limited to one notch.

LIQUIDITY

RENK's current liquidity is adequate, supported by a cash balance
of EUR187 million as of December 2020 (EUR135 million pro-forma
shareholder loan repayment in February 2021). In addition, the
company has access to EUR50 million super senior revolving credit
facility (RCF), which was fully undrawn as of December 2020. The
RCF has a springing net financial covenant, tested if more than 40%
drawn. Moody's expects RENK to ensure covenant compliance at all
times.

Prior to the review process Moody's indicated the following
upgrade/downgrade triggers.

A ratings upgrade requires a continued growth of backlog and
improvement in scale and business diversification through a higher
share of maintenance activities. It would also require that
Moody's-adjusted gross leverage reduces below 4.0x, EBITA margins
increase above 12% and free cash flow/ Debt improves to the high
single digit percentages.

The ratings could be downgraded if Moody's-adjusted gross leverage
rises sustainably above 5.0x, if EBITA margins reduce below 8%,
free cash flow turns negative and liquidity profile deteriorates.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Aerospace and
Defense Methodology published in July 2020.

COMPANY PROFILE

Headquartered in Augsburg, Germany, RENK is a manufacturer of
high-quality gear units, automatic transmissions, slide bearings,
suspension systems, couplings, and test systems. Operating through
four business units: Vehicle Transmissions, Special Gear Units,
Standard Gear Units, and Slide Bearings, the company serves a
diverse set of end markets, with around half of its revenues in the
defense sector. In 2020 the company reported EUR550 million of
revenues.

TUI CRUISES: Fitch Assigns FirstTime 'B-(EXP)' IDR, Outlook Pos.
----------------------------------------------------------------
Fitch Ratings has assigned TUI Cruises GmbH a first-time expected
Issuer Default Rating (IDR) of 'B-(EXP)' with a Positive Outlook.

Fitch has also assigned TUI Cruises' proposed EUR300 million senior
unsecured notes an expected long-term rating of 'CCC(EXP)' with a
Recovery Rating of 'RR6', reflecting significant higher- ranking
debt ahead of the planned bonds resulting in no recoveries of the
bonds under Fitch's waterfall analysis.

The assignment of final ratings is contingent on completion of the
debt issue and receipt of information conforming to bond
documentation already reviewed.

The rating is constrained by high leverage due to the impact of the
disruption to the cruise industry caused by pandemic-related
restrictions and also because of the Hapag Lloyd Cruises (HLC)
acquisition in 2020. TUI Cruises' business profile benefits from a
strong market position in the European cruise market with a focus
on Germany as well as the company's premium product offering and
high repeat customer base. Successful execution of the currently
ramp-up phase is expected to result in an improved financial
profile in 2022, which is reflected in the Positive Outlook.

KEY RATING DRIVERS

Strong Business Profile: TUI Cruises is a mid-sized cruise ship
business with two well-recognised brands, Mein Schiff and HLC,
operating in the premium and luxury segments of the market,
respectively. Its customer base is primarily Germany, which is the
largest and one of the fastest growing markets in Europe. In
addition to its strong market position with an estimated 35% market
share, a concentrated customer base enables the company to better
customise its product offering to customer tastes, resulting in
high repeat bookings at 60%-70% of total customers in 2020. This
firmly positions TUI Cruises to sustain its current market position
while growing the business through the planned addition of new
ships from 2024 onwards.

High Profitability: TUI Cruises' premium product offering results
in industry-leading profitability, with an EBITDA margin of close
to 40% in 2019. The company also benefits from the marketing
platform of TUI AG (its 50% owner) as well as the technical
expertise of Royal Caribbean (the other 50% owner) for ship
operations and new-build activity. The company's fleet is among the
youngest in the industry with an average age of less than 10 years
resulting in both lower maintenance capex and fuel consumption.

Well-Managed Covid-19 Impact: TUI Cruises was able to reduce
operating costs by 60% through minimised labour costs, furloughs
and layoffs. It was the first mass-market cruise to return to
service in July 2020 after receiving approvals from German and
Greek port authorities under the EU Healthy GateWays policy. The
company was able to operate about 30% of its ships for most of
2H20, albeit at lower occupancies. Its ramp-up is expected to
accelerate in May 2021 with all ships back in operation by August
2021. Ship occupancy levels are expected to continue to ramp up
until spring 2022.

Successful Restart of Operations Important: Fitch estimates TUI
Cruises' current level of operations resulted in on average about
EUR30 million per month of cash burn during most of 2H20 and 1Q21,
after including interest, capex and debt amortisation. Fitch
expects this to break-even in July 2021 with management's planned
ramp-up of operations. TUI Cruises has over 75% bookings for its
3Q21 operations and is pending approval from port authorities in
Germany and Greece, expected in the next month. A delay in
resumption of operations will reduce the company's available
liquidity buffer as well as somewhat delay the expected improvement
in the financial profile.

Financial Profile to Improve: TUI Cruises' acquisition of HLC in
2020 for an enterprise value of about EUR1.1 billion, including
about EUR400 million of debt and debt like items, and the impact
from severely reduced operations in 2020 led to negative cash flow
from operations of EUR324 million, of which half was related to
working-capital outflow, which has stabilised since August 2020.
Fitch expects FFO to remain negative in 2021, leading to
unsustainable leverage metrics. However, with the ramp-up of
operations in 2021 and 2022, Fitch expects FFO adjusted gross
leverage to improve to close to 6.5x by end-2022 (2019: 3.6x).
Fitch expects this metric to further improve by about 1x in 2023,
but to increase to about 6.0x in 2024 due to planned new build
capex. Fitch forecasts FFO fixed charge coverage to remain strong
for the rating from 2022 at over 4.0x.

Standalone Issuer Rating: TUI Cruises is rated on a standalone
basis despite its ownership by TUI AG and Royal Caribbean. Both
shareholders account TUI Cruises as a joint venture in their
balance sheet and there are no relevant contingent liabilities or
cross guarantees between the owners and TUI Cruises. TUI Cruises
manages its funding and liquidity independently. It has operational
related-party transactions with the owners, primarily in marketing
and technical operations, but these are conducted on an arms-length
basis.

Senior Unsecured Bonds Rating: TUI Cruises' planned bond offering
of EUR300 million senior unsecured bonds maturing in 2026 will help
shore up liquidity during the ramp-up. The 'CCC(EXP)' rating on the
bonds is based on Fitch's recovery analysis on a going-concern (GC)
basis. Under the waterfall scenario, the presence of significant
prior-ranking debt, ahead of the planned bonds, results in 0%
recovery for the bonds and consequently the 'RR6' Recovery Rating.

DERIVATION SUMMARY

All major cruise operators such as Royal Caribbean, Carnival or NCL
Corporation (Norwegian) faced severe operating and liquidity
pressures during 2020. In the case of TUI Cruises, revenue declined
by a lower extent than main operators (75% vs 80%) and costs were
more flexible with a higher absorption capability (70%). Capex was
also significantly lower for TUI Cruises and while cash burn was
material, liquidity is less of a risk now compared with peers,
assuming a successful bond issue.

TUI Cruises exhibits a weaker market position than industry leaders
with a significantly larger fleet capacity and EBITDAR. On the
contrary, TUI Cruises benefits from recognised brand awareness and
diversification into the luxury segment, where competition is less
intense. Pre-pandemic, TUI Cruises operated with higher margins
(pro-forma for HLC acquisition 2019: 36%) than those of Royal
Caribbean or Carnival as a result of a younger and more efficient
fleet. Margins are also stronger than that of asset-heavy operators
such as NH Hotel Group SA (B-/Negative) or Whitbread PLC
(BBB-/Stable). TUI Cruises is well-positioned to resume activity
and reach break-even EBITDA in 2021 based on planned ramp-up, as it
has been pioneering test-bubble cruises contrary to peers still in
drydock, supporting the Positive Outlook.

The whole cruise sector has undergone a capital-structure
optimisation during the pandemic, with TUI Cruises displaying a
clear deleveraging trajectory to below 6.0x (FFO adjusted gross
leverage) by end-2023.

KEY ASSUMPTIONS

Fitch's key assumptions within its rating case for the issuer
include:

-- Ticket prices based on realised bookings, with slightly lower
    than management's expectations for 2021 and taking into
    account management's strategy of not increasing prices going
    forward;

-- 2021 sailing timelines in line with management's guidance but
    with slightly lower occupancy levels;

-- Cost of sales and sales general & administration as a share of
    sales 0%-1% higher than management's guidance;

-- Other operating expenses as a share of sales 1.5-2% higher
    than management's guidance to reflect ramp-up, integration
    with HLC or absence of fuel hedges, among other operational
    risks;

-- Restricted cash of EUR45 million, broadly in line with EUR41.8
    million in 2020;

-- Capex in line with management's guidance for the next four
    years;

-- Cash sweep as applicable based on the definition;

-- Successful EUR300 million unsecured bond issue;

-- No dividend payment during 2021-2024.

KEY RECOVERY RATING ASSUMPTIONS

-- The recovery analysis assumes that TUI Cruises would be
    reorganised as a GC in bankruptcy rather than liquidated.
    Ships can be sold for scrap but this typically does not occur
    until the tail end of its useful life (30-40 years) and at a
    much greater discount relative to initial construction cost.
    This is due to the inherent cash flow-generating ability of
    ships, even older ones, which can be moved into cheaper/less
    favorable locations as they age.

-- A 10% administrative claim.

GC Approach

-- TUI Cruises' GC EBITDA is based on Fitch's forecast for 2022
    EBITDA, which is about 28% lower than 2019 EBITDA, pro-forma
    for the HLC acquisition;

-- The GC EBITDA estimate reflects Fitch's view of a stressed but
    sustainable, post-reorganisation EBITDA upon which Fitch bases
    the enterprise valuation (EV);

-- An EV multiple of 6.0x EBITDA is applied to the GC EBITDA to
    calculate a post-reorganisation enterprise value;

-- The company's revolving credit facility (RCF), term loan I and
    KfW loan are all assumed to be fully drawn upon default;

-- The allocation of value in the liability waterfall results in
    recovery corresponding to 'RR6' for the proposed senior
    unsecured notes with waterfall generated recovery computation
    at 0%.

RATING SENSITIVITIES

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

-- Visibility on lifting of Covid-19 restrictions with no
    mobility constraints leading to EBITDA margin above 30%;

-- Successful resumption of operations leading to positive FCF
    generation sustaining liquidity buffer;

-- FFO adjusted gross leverage sustainably below 6.5x;

-- Improvement in recovery assumptions due to EBITDA or reduction
    in prior-ranking debt could lead to upgrade of the senior
    unsecured bond rating.

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

-- FFO adjusted gross leverage consistently above 7.5x;

-- Additional external liquidity requirement in the next year,
    potentially due to delay in the planned ramp-up of operations;

-- Deeper and longer Covid-19 disruption than currently modelled.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.

LIQUIDITY AND DEBT STRUCTURE

TUI Cruises' liquidity is adequate. Total liquidity at end-2020 was
EU239 million (after adjusting for EUR42 million of restricted cash
as defined by Fitch), including EUR175 million undrawn under term
loan I and EUR60 million undrawn under the KfW loan. TUI Cruises
also received EUR80 million in equity injection from shareholders
in March 2021.

Fitch forecasts negative FCF of EUR284 million in 2021 in addition
to scheduled debt repayment of EUR48 million, against planned
EUR269 million drawdowns of available debt facilities, in addition
to the EUR80 million equity injection and the proposed EUR300
million bond issue.

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.

TUI CRUISES: Moody's Assigns First Time B3 Corp Family Rating
-------------------------------------------------------------
Moody's Investors Service has assigned a B3 corporate family rating
and a B3-PD probability of default rating to TUI Cruises GmbH.
Concurrently, Moody's has assigned a Caa2 instrument rating to
EUR300 million of senior unsecured notes to be issued by TUI
Cruises. Moody's has assigned a stable outlook to TUI Cruises.

This is the first time Moody's has assigned ratings to TUI
Cruises.

"The inaugural B3 CFR assigned to TUI Cruises balances the group's
very profitable business model prior to the coronavirus outbreak,
its strong deleveraging prospects once the virus will start
subsiding on the one hand and the company's very weak point in time
credit metrics as a result of the demand shock from the coronavirus
outbreak on the other hand", says Stanislas Duquesnoy, a Senior
Vice President at Moody's.

RATINGS RATIONALE

TUI Cruises' B3 CFR is supported by (i) the group's strong market
position and brand recognition in the German speaking cruise
market, (ii) good long term growth prospects of the German cruise
market once the negative impact of the coronavirus pandemic will
have faded supported by positive demographic factors, a still low
penetration of cruise holidays in comparison to other more mature
markets and the exposure to an affluent customer base, (iii) TUI
Cruises' very profitable business model and best in class
profitability pre-pandemic coupled with a good operating cash flow
conversion, (iv) a young and attractive fleet with lower
maintenance costs and a higher energy efficiency than other rated
peers, (v) an adequate liquidity profile, which should ensure a
sufficient buffer to bridge to a period of stronger cruise activity
even assuming a very weak 2021 summer season, (vi) an experienced
management team that has navigated the company successfully through
the pandemic so far, and (vii) the support offered by the two joint
venture partners Royal Caribbean Cruises Ltd. (B1 negative) and TUI
AG (Caa1 stable) as well as Moody's expectation that the two
partners will remain supportive going forward.

Conversely, TUI Cruises CFR is constrained by (i) the issuer's very
weak point-in time credit metrics as a result of high cash burn
rates and very depressed EBITDA generation since the onset of the
pandemic in 2020, (ii) the resurgence of the virus in all TUI
Cruises' source markets and a very slow start to the vaccination
campaign, which increases the risk that the summer season 2021
might prove to be challenging, (iii) the remaining uncertainties
regarding the timing and pace of a recovery in cruise activities
over the next few years, and (iv) the smaller size and
diversification (both in terms of offered routes and sources of
customers) of TUI Cruises compared to larger US rated peers.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects Moody's expectation that TUI Cruises
will be able to gradually ramp up cruise activities starting in
late Q2 2021 leading to a gradual improvement in earnings and
operating cash flows. The stable outlook is also underpinned by the
issuer's adequate liquidity profile and the expectation that the
group's liquidity profile will not deteriorate materially for
current levels. This implies the need to reduce the group's cash
burn starting at least in Q3 2021 and the timely refinancing of the
EUR181 million debt maturity in Q2 2022. TUI Cruises is seen as
strongly positioned in the B3 rating category and a recovery of
operating performance, e.g. driven by rising vaccination rates and
returning appetite for travel activity could result in material
leverage improvements and positive rating pressure in the short- to
medium-term.

LIQUIDITY

TUI Cruises' liquidity position is adequate. Pro forma of the bond
issuance, the company would have approximately 300 days of
liquidity at hand assuming virtually no cruising activity going
forward (monthly cash burn of approximately EUR30 million).
Assuming the refinancing of a EUR181 million debt maturity of
EUR181 million in Q2 2022 the liquidity buffer would increase to
around 500 days. This should be sufficient to bridge to a period of
more sustained cruising activity and break-even free cash flow. The
group's strong profitability pre pandemic and low break-even levels
should lead to a swift improvement in the group's free cash flow
generation when cruise activity resumes.

TUI Cruises has largely refunded passengers for the cruises that
have been canceled during 2020. Customer deposits have been broadly
stable since Q4 2020 and Moody's do not expect a material cash
outflow from refunds over the next 6 to 12 months. Moody's also
note that around 40% of passengers have elected to receive their
refund from a canceled cruise in vouchers or have rebooked to
another date rather than requesting a cash refund.

STRUCTURAL CONSIDERATIONS

The Caa2 instrument rating to be assigned to the proposed EUR300
million senior unsecured notes reflects the deeply subordinated
nature of the instrument with EUR3.3 billion of debt ranking
contractually ahead of the proposed EUR300 million senior unsecured
notes. The unsecured notes rank junior to (i) EUR2.3 billion of ECA
financing that have 1st lien security over a large portion of the
fleet, (ii) EUR800 million of bank debt that have 2nd lien security
over certain vessels, and (iii) EUR300 million of KfW loan that
have security over the Mein Schiff trademark.

Moody's has used a family recovery rate of 50% due to the mix of
bank and bond debt in the capital structure and the presence of a
comprehensive financial covenant package.

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

Positive pressure would build on the rating if leverage as measured
by Moody's adjusted Debt/EBITDA would drop sustainably below 6.0x,
RCF/net debt would increase to the high single digits and TUI
Cruises would maintain an adequate liquidity profile.

Conversely negative pressure would arise on the rating if the
company's liquidity profile would deteriorate and weak recovery
prospects for both the upcoming summer season and for 2022 would
derail TUI Cruises from a visible path to a Moody's adjusted
Debt/EBITDA below 7.0x by year-end 2023.

PRINCIPAL METHODOLOGY

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

CORPORATE PROFILE

TUI Cruises GmbH is a cruising company that operates a fleet of 11
cruise vessels across two brands: Mein Schiff, a contemporary brand
and Hapag Lloyd Cruises, a luxury and expedition brand. TUI Cruises
sources its passengers from Germany (around 80% to 90% across its
two brands), Austria and Switzerland and offers German-speaking
crew on board.

TUI Cruises generated revenue of EUR1.8 billion and an EBITDA of
EUR0.7 billion (36% EBITDA margin) in 2019. TUI Cruises is a joint
venture between TUI AG (Caa1 stable) and Royal Caribbean Cruises
Ltd. (B1 negative).

WIRECARD AG: EY Anti-Fraud Specialist Says Red Flags Ignored
------------------------------------------------------------
Olaf Storbeck at The Financial Times reports that a senior EY
anti-fraud specialist who investigated whistleblower allegations of
fraud at Wirecard said it was "incomprehensible" that audit
partners at the Big Four firm had dismissed "red flags" pointing to
accounting manipulations at the disgraced payments group.

According to the FT, in a day of explosive testimony before German
MPs in Berlin, Christian Muth, a 45-year-old former German army
officer who led an EY probe into the allegations between 2016 and
2018, said that his "professional honour" had been hurt after its
findings were discounted.

He pointed out that the investigation, which was first reported by
the Financial Times last year and codenamed "Project Ring", had
made six distinct observations that supported the allegations from
a whistleblower in India, the FT relates.

The probe had been commissioned by Wirecard's management board and
conducted by EY Forensic & Integrity Services, an arm of the Big
Four firm that specialises in white-collar crime, the FT notes.

However, Wirecard ultimately blocked EY's anti-fraud team from
investigating the issues further and eventually aborted the probe
in early 2018, the FT relays.  Just over two years later, the
payments group collapsed in one of Europe's largest postwar
accounting frauds, the FT discloses.

According to the FT, Mr. Muth said the EY partners in charge of
Wirecard's audit were aware of the issues raised by the probe, but
still issued unqualified audits having concluded the allegations
were of "no substance".

The damning assessment from Mr. Muth was in sharp contrast to how
the hearing began, with the EY partner initially refusing to answer
even basic questions. He argued that many of the documents that he
would need to reference were classified as secret.

Mr. Muth's testimony is a further blow for EY, which has been under
intense scrutiny after giving Wirecard unqualified audits for a
decade.

Munich prosecutors have launched a criminal investigation against
the EY partners who oversaw the Wirecard audits, while the firm has
lost several high-profile clients in Germany, the FT relates.




=============
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BARINGS EURO 2021-1: Moody's Assigns (P)B3 Rating to EUR8M F Notes
------------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to debt to be issued by Barings Euro
CLO 2021-1 Designated Activity Company (the "Issuer"):

EUR198,000,000 Class A Senior Secured Floating Rate Notes due
2034, Assigned (P)Aaa (sf)

EUR50,000,000 Class A Senior Secured Floating Rate Loan due 2034,
Assigned (P)Aaa (sf)

EUR40,000,000 Class B Senior Secured Floating Rate Notes due 2034,
Assigned (P)Aa2 (sf)

EUR28,000,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2034, Assigned (P)A2 (sf)

EUR25,000,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2034, Assigned (P)Baa3 (sf)

EUR23,000,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2034, Assigned (P)Ba3 (sf)

EUR8,000,000 Class F Senior Secured Deferrable Floating Rate Notes
due 2034, Assigned (P)B3 (sf)

RATINGS RATIONALE

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

The Issuer is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured obligations and up to 10%
of the portfolio may consist of senior unsecured obligations,
second-lien loans, mezzanine obligations and high yield bonds. The
portfolio is expected to be 95% ramped as of the closing date and
to comprise of predominantly corporate loans to obligors domiciled
in Western Europe. The remainder of the portfolio will be acquired
during the 4.5 months ramp-up period in compliance with the
portfolio guidelines.

Barings (U.K.) Limited ("Barings Ltd.") will manage the CLO. It
will direct the selection, acquisition and disposition of
collateral on behalf of the Issuer and may engage in trading
activity, including discretionary trading, during the transaction's
reinvestment period. Thereafter, subject to certain restrictions,
purchases are permitted using principal proceeds from unscheduled
principal payments and proceeds from sales of credit risk
obligations or credit improved obligations.

In addition to the seven classes of debt rated by Moody's, the
Issuer will issue EUR36,400,000 Subordinated Notes due 2034 which
are not rated.

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

The coronavirus pandemic has had a significant impact on economic
activity. Although global economies have shown a remarkable degree
of resilience to date and are returning to growth, the uneven
effects on individual businesses, sectors and regions will continue
throughout 2021 and will endure as a challenge to the world's
economies well beyond the end of the year. While persistent virus
fears remain the main risk for a recovery in demand, the economy
will recover faster if vaccines and further fiscal and monetary
policy responses bring forward a normalization of activity. As a
result, there is a heightened degree of uncertainty around Moody's
forecasts. Moody's analysis has considered the effect on the
performance of European corporate assets from a gradual and
unbalanced recovery in European economic activity.

Moody's regard the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety.

Methodology underlying the rating action:

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

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

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

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

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

Par Amount: EUR400,000,000

Diversity Score: 45

Weighted Average Rating Factor (WARF): 3124

Weighted Average Spread (WAS): 3.80%

Weighted Average Coupon (WAC): 4.25%

Weighted Average Recovery Rate (WARR): 44.50%

Weighted Average Life (WAL): 8.5 years

OAK HILL VII: Moody's Affirms B3 Rating on EUR10MM Class F Notes
----------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to refinancing notes issued by Oak
Hill European Credit Partners VII Designated Activity Company (the
"Issuer"):

EUR240,000,000 Class A Senior Secured Floating Rate Notes due
2031, Assigned Aaa (sf)

EUR43,600,000 Class B Senior Secured Floating Rate Notes due 2031,
Assigned Aa2 (sf)

At the same time, Moody's affirmed the outstanding notes which have
not been refinanced:

EUR25,200,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2031, Affirmed A2 (sf); previously on Jun 15, 2020
Affirmed A2 (sf)

EUR27,200,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2031, Affirmed Baa3 (sf); previously on Jun 15, 2020
Confirmed at Baa3 (sf)

EUR24,300,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2031, Affirmed Ba3 (sf); previously on Jun 15, 2020
Confirmed at Ba3 (sf)

EUR10,000,000 Class F Senior Secured Deferrable Floating Rate
Notes due 2031, Affirmed B3 (sf); previously on Jun 15, 2020
Confirmed at B3 (sf)

RATINGS RATIONALE

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

Moody's rating affirmations of the Class C, D, E and F Notes are a
result of the refinancing, which has no impact on the ratings of
the notes.

As part of this refinancing, the Issuer has extended the weighted
average life test date by 9 months to March 2028 and has amended
certain definitions and minor features. In addition, the Issuer has
amended the base matrix and modifiers that Moody's has taken into
account for the assignment of the definitive ratings.

The Issuer is a managed cash flow CLO. At least 90% of the
portfolio must consist of secured senior loans and up to 10% of the
portfolio may consist of unsecured senior loans, second-lien loans
and mezzanine loans.

Oak Hill Advisors (Europe), LLP (Oak Hill) will continue to manage
the CLO. It will direct the selection, acquisition and disposition
of collateral on behalf of the Issuer and may engage in trading
activity, including discretionary trading, during the transaction's
2 years remaining reinvestment period which will end in April 2023.
Thereafter, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
risk obligations, and are subject to certain restrictions.

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

The coronavirus pandemic has had a significant impact on economic
activity. Although global economies have shown a remarkable degree
of resilience to date and are returning to growth, the uneven
effects on individual businesses, sectors and regions will continue
throughout 2021 and will endure as a challenge to the world's
economies well beyond the end of the year. While persistent virus
fears remain the main risk for a recovery in demand, the economy
will recover faster if vaccines and further fiscal and monetary
policy responses bring forward a normalization of activity. As a
result, there is a heightened degree of uncertainty around Moody's
forecasts. Moody's analysis has considered the effect on the
performance of global corporate assets from a gradual and
unbalanced recovery in global economic activity.

Moody's regard the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety.

Methodology Underlying the Rating Action:

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

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

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

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

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

Performing par and principal proceeds balance: EUR394.3 million

Defaulted Par: EUR2.9 million

Diversity Score: 52

Weighted Average Rating Factor (WARF): 3153

Weighted Average Spread (WAS): 3.60%

Weighted Average Recovery Rate (WARR): 42.5%

Weighted Average Life end test date: March 7, 2028

SOUND POINT V: Moody's Assigns B3 Rating to EUR10.75M Cl. F Notes
-----------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to debt issued by Sound Point Euro CLO
V Funding Designated Activity Company (the "Issuer"):

EUR2,000,000 Class X Senior Secured Floating Rate Notes due 2035,
Definitive Rating Assigned Aaa (sf)

EUR198,000,000 Class A Senior Secured Floating Rate Notes due
2035, Definitive Rating Assigned Aaa (sf)

EUR50,000,000 Class A Senior Secured Floating Rate Loan due 2035,
Definitive Rating Assigned Aaa (sf)

EUR17,300,000 Class B-1 Senior Secured Floating Rate Notes due
2035, Definitive Rating Assigned Aa2 (sf)

EUR21,500,000 Class B-2 Senior Secured Fixed/Floating Rate Notes
due 2035, Definitive Rating Assigned Aa2 (sf)

EUR10,600,000 Class C-1 Senior Secured Deferrable Floating Rate
Notes due 2035, Definitive Rating Assigned A2 (sf)

EUR15,000,000 Class C-2 Senior Secured Deferrable Floating Rate
Notes due 2035, Definitive Rating Assigned A2 (sf)

EUR28,600,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2035, Definitive Rating Assigned Baa3 (sf)

EUR20,250,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2035, Definitive Rating Assigned Ba3 (sf)

EUR10,750,000 Class F Senior Secured Deferrable Floating Rate
Notes due 2035, Definitive Rating Assigned B3 (sf)

RATINGS RATIONALE

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

The Issuer is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured obligations and up to 10%
of the portfolio may consist of senior unsecured obligations,
second-lien loans, mezzanine obligations and high yield bonds. The
portfolio is expected to be 80% ramped as of the closing date and
to comprise of predominantly corporate loans to obligors domiciled
in Western Europe. The remainder of the portfolio will be acquired
during the six months ramp-up period in compliance with the
portfolio guidelines.

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

Interest and principal amortisation amounts due to the Class X
Notes are paid pro rata with payments to the Class A Notes and
Class A Loan. The Class X Notes amortise by 12.5% or EUR250,000
over the eight payment dates starting on the second payment date.

In addition to the ten classes of debt rated by Moody's, the Issuer
has issued EUR 35,400,000 Subordinated Notes due 2035 which are not
rated.

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

The coronavirus pandemic has had a significant impact on economic
activity. Although global economies have shown a remarkable degree
of resilience to date and are returning to growth, the uneven
effects on individual businesses, sectors and regions will continue
throughout 2021 and will endure as a challenge to the world's
economies well beyond the end of the year. While persistent virus
fears remain the main risk for a recovery in demand, the economy
will recover faster if vaccines and further fiscal and monetary
policy responses bring forward a normalization of activity. As a
result, there is a heightened degree of uncertainty around Moody's
forecasts. Moody's analysis has considered the effect on the
performance of corporate assets from a gradual and unbalanced
recovery in European economic activity.

Moody's regard the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety.

Methodology underlying the rating action:

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

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

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

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

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

Par Amount: EUR400,000,000

Diversity Score(1): 45

Weighted Average Rating Factor (WARF): 3011

Weighted Average Spread (WAS): 3.60%

Weighted Average Coupon (WAC): 4.75%

Weighted Average Recovery Rate (WARR): 44.0%

Weighted Average Life (WAL): 9.2 years



=========
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GOLDEN GOOSE: Fitch Assigns 'B' LT IDR, Outlook Stable
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Fitch Ratings has assigned Golden Goose S.p.A. a Long-Term Issuer
Default Rating (IDR) of 'B' with a Stable Outlook and its planned
notes an expected senior secured rating of 'B+(EXP)'/ with a
Recovery Rating 'RR3'.

Proceeds from the notes will be used to refinance a EUR470 million
bridge facility, which was obtained to finance the company's
acquisition by Permira equity fund in 2020.

The assignment of the final senior secured rating is contingent on
the receipt of final documents conforming to information already
received.

The 'B' IDR of Golden Goose reflects its niche position in the
personal luxury goods market and its product-and-supplier
concentration. The rating is supported by Fitch's expectation that
the company will be able to successfully implement its growth
strategy on its retail and digital channels and reduce funds from
operations (FFO) adjusted gross leverage over the next three years
towards 5.5x, a level that is consistent with the 'B' category
median for non-food retail companies.

The Stable Outlook reflects Golden Goose's greater resilience to
the pandemic than peers', as demonstrated in 2020. Fitch assumes a
recovery in the retail channel through 2021 after it was hit by
lockdowns and social-distancing measures.

KEY RATING DRIVERS

Resilience to the Pandemic: Golden Goose weathered the pandemic
better than its peers operating in the apparel retail and luxury
consumer goods markets. Its revenue grew 1% in 2020 as new store
rollouts offset a 10% like-for-like (LFL) sales decline. The
company also managed to contain pressures on EBITDA from fixed
costs, including rents for its retail stores, and as a result
reported only a 4% EBITDA reduction in 2020.

Fitch also believes that Golden Goose benefited from an
acceleration in casualisation and digitalisation trends as
consumers prioritised comfort in their clothing choices and shopped
more online during lockdowns. Fitch expects these trends to persist
over the medium term and support growth in Golden Goose's sales.

Niche Market Position: Golden Goose is a small company with a
Fitch-adjusted EBITDA of EUR75 million in 2020 and a niche market
position in the luxury sneakers category. Its share in the personal
luxury goods market is negligible but the company ranks third in
the growing luxury sneakers market with a 7% share in 2019 (2010:
2%). Fitch believes it is well-positioned to continue to grow
faster than the market but unlikely to substantially scale up as
this would compromise its brand positioning reliant on the concept
of scarcity, craftmanship and a limited number of models.

One-Product Focus: Golden Goose's diversification is limited by a
heavy reliance on the core luxury sneaker category and one sneaker
model that accounts for more than half of the company's total
sneaker sales. High one-product and price-point concentration is
unlikely to reduce at the company, given its growth strategy, but
is somewhat mitigated by its sneakers not being overly reliant on a
particular fashion trend, season, generation or gender.

Supplier Concentration: The company fully outsources its production
and is dependent mostly on five key suppliers accounting for around
80% of production volumes. The rating assumes that this will not
cause any disruption and Golden Goose will be able to order greater
volumes from its suppliers, which have already invested in capacity
expansion. This is supported by a history of smooth and flexible
supplies, despite the company's sneaker volumes having grown 6x
over 2012-2018.

Retail & Digital Channels Expansion: Fitch projects Golden Goose's
revenues to almost double over the next four years, driven mostly
by expansion of the retail and digital channels. Fitch expects the
company to open more than 100 stores by end-2024, growing its
presence in Asia, Americas and Europe. Execution risks are
manageable, in Fitch's view, as Golden Goose opened 118 stores over
2017-2020, while maintaining adequate sales and profitability of
its existing stores. Further, store formats are small and new
openings will be mostly in countries where the company is already
present. Its online growth is supported by an adequate existing
infrastructure, tempering execution risks stemming from rapid
growth.

Strong Profitability to Drive FCF: Golden Goose's EBITDA margin
corresponds to the upper bound of the luxury industry benchmark and
Fitch assumes the company will be able to maintain an EBITDA margin
of around 26%-27% in 2021-2024, supported by the attractiveness of
its brand. This would allow Golden Goose to generate positive free
cash flow (FCF), despite large investments in new stores.

Deleveraging Capacity: Fitch calculates leverage for Golden Goose
by adjusting for leases as the company's growth strategy is based
on opening new leasehold stores. Fitch projects that Golden Goose's
increasing EBITDA will drive deleveraging towards levels that are
commensurate with the 'B' rating. Fitch's rating case shows that
FFO adjusted gross leverage will reduce to below 6x in 2023, from
8.7x at end-2020, which is high for the rating.

DERIVATION SUMMARY

Golden Goose shares traits of consumer goods and non-food retail
companies as it sells products under its own brand through directly
operated retail stores, wholesalers, department stores and online.
Fitch has chosen to apply its Non-Food Retail Navigator to assess
Golden Goose's rating as the company's strategy is predominantly
based on the expansion of the leasehold store network. As a result,
Fitch considers lease-adjusted credit metrics for Golden Goose. At
the same time, Fitch also compares Golden Goose with companies in
the consumer goods sector.

Golden Goose's credit profile is weaker compared with that of Levi
Strauss & Co (BB/Negative), which also has a high concentration on
one brand, but is much larger in scale and more diversified by
product and geography. This, together with expected lower leverage
in 2021, after an increase in 2020 due to the pandemic, results in
a higher rating for Levi Strauss than Golden Goose.

Compared with Italian furniture producer International Design Group
S.p.A. (B/ Stable), Golden Goose is smaller and has greater
concentration risks but benefits from expected lower leverage.

Golden Goose is rated lower than THG Holdings plc (B+/Positive),
which operates in the beauty and well-being consumer market. THG is
slightly bigger in scale than Golden Goose and is not exposed to
fashion risks and product concentration. Unlike Golden Goose, THG's
strategy is based on bolt-on M&A. However, Fitch expects THG's
deleveraging towards more conservative levels than Golden Goose due
to THG's commitment to achieving a conservative financial policy
post-IPO. This is reflected in the Positive Outlook on THG's
rating.

No Country Ceiling, parent-subsidiary linkage or
operating-environment aspects affect Golden Goose's rating.

KEY ASSUMPTIONS

Fitch's key assumptions within its rating case for the issuer
include:

-- Retail revenue CAGR of 17% over 2021-2024, driven by new store
    openings, recovery in store sales from the pandemic and
    positive LFL sales growth;

-- Wholesale and other revenue CAGR of 4% over 2021-2024;

-- Working-capital outflows of around EUR15 million a year until
    2024;

-- Capex at around EUR30 million a year until 2024;

-- No dividends for the next four years, and

-- No M&A for the next four years.

KEY RECOVERY RATING ASSUMPTIONS

The recovery analysis assumes that Golden Goose would be
reorganised as a going-concern (GC) in bankruptcy rather than
liquidated. Fitch has assumed a 10% administrative claim.

Golden Goose's GC EBITDA assumption is EUR65 million. The GC EBITDA
estimate reflects Fitch's view of a sustainable,
post-reorganisation EBITDA upon which Fitch bases the company's
enterprise valuation. It is based on the average EBITDA for
2020-2023 under Fitch's stress assumption of the company's main
product losing consumer appeal and performance of new stores
substantially lagging existing stores'. The difference between 2020
EBITDA of EUR75 million and the GC EBITDA assumption is an output
of the analysis, not a starting point or input that drives the GC
assumption.

An EV multiple of 5.5x EBITDA is applied to the GC EBITDA to
calculate a post-reorganisation EV. This reflects the company's
stronger growth prospects relative to peers' and corresponds to
around 41% of the acquisition EV/EBITDA multiple.

Its revolving credit facility (RCF) is assumed to be fully drawn
upon default. Reverse factoring (EUR13 million outstanding at
end-2020) is not considered in the debt waterfall as Fitch assumes
it will not be available in a distress and RCF will be drawn
instead.

The RCF is super senior to senior secured notes in the waterfall.
Fitch's waterfall analysis generates a ranked recovery for the
senior secured notes in the 'RR3' band, indicating a 'B+(EXP)'
rating. The waterfall analysis output percentage on current metrics
and assumptions is 53%. The senior secured debt is therefore rated
one notch above Golden Goose's IDR of 'B'.

RATING SENSITIVITIES

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

-- Successful implementation of business plan with a more
    balanced composition of sales by channels (between retail,
    wholesale and online) and annual EBITDA of EUR120 million
    EUR140 million by end-2024;

-- Maintenance of strong EBITDA margin translating into FCF
    margin in high single digits;

-- FFO adjusted gross leverage below 5.5x on a sustained basis.

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

-- Material slowdown in revenue growth driven by reducing
    consumer appeal, reflected in weak LFL performance of existing
    stores or an inability of new stores to reach targeted sales;

-- FCF margin below 5% due to weakening EBITDA margin and/or
    higher-than-expected working capital outflows and capex;

-- No evidence of FFO adjusted gross leverage falling below 6.5x

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.

LIQUIDITY AND DEBT STRUCTURE

Comfortable Liquidity: At end-2020, Golden Goose had comfortable
liquidity as EUR78 million of cash and EUR50 million available
under its EUR75 million committed RCF were sufficient to cover
short-term debt of EUR39 million, including EUR13 million under a
reverse factoring facility. The liquidity position will not change
after the refinancing of its EUR470 million bridge facility with
the planned senior secured notes.

After the notes' placement, Fitch assesses refinancing risk as
manageable as timely refinancing will remain dependent on the
capital-market conditions prevailing then, despite comfortable debt
maturity headroom and Fitch-projected steady deleveraging that will
support cash build-up.

ESG CONSIDERATIONS

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

GOLDEN GOOSE: Moody's Assigns First Time B2 Corp Family Rating
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Moody's Investors Service has assigned a first-time B2 corporate
family rating and B2-PD probability of default rating to Golden
Goose S.p.A., an Italian luxury sneaker company. Concurrently,
Moody's has assigned a B2 rating to the proposed EUR470 million
senior secured notes due 2027, to be issued by Golden Goose.
Moody's has assigned a stable outlook to Golden Goose.

The proceeds from the proposed issuance will be used to (1) repay
the existing bridge loans; and (2) pay transaction fees and related
costs.

"Golden Goose's B2 rating reflects the company's good brand
positioning in the growing luxury sneaker market, diversified
distribution channels, and its good trading performance compared to
peers during the pandemic", says Guillaume Leglise, a Moody's Vice
President and lead analyst for Golden Goose. "However, the rating
is constrained by high initial leverage and high capital spending
owing to the company's fast-paced expansion in direct retail" adds
Mr Leglise.

RATINGS RATIONALE

The B2 CFR reflects (1) Golden Goose's recognised brand in the
growing luxury sneaker market, with diversified channel mix and
global geographic footprint; (2) its good trading performance
during the pandemic owing to its strict merchandising strategy and
low inventory risk; (3) good growth prospects owing to the growing
casualisation trend and the company's retail expansion strategy;
and (4) its relatively high margins and good interest coverage
ratios compared to rated apparel peers.

Conversely, the B2 CFR incorporates (1) the company's narrow
business focus and small scale in the niche luxury footwear
segment; (2) some fashion risk as a single-brand company in the
highly competitive luxury sneaker market; (3) its high
Moody's-adjusted leverage pro forma the proposed transaction, which
exceeds 6.5x based on 2020 earnings and that is only expected to
reduce below 5.0x by 2022; and (4) execution risks associated with
the company's fast-paced retail expansion strategy, which will
constrain free cash flow (FCF) generation in the next 18 months.

Pro forma the proposed transaction, Golden Goose's liquidity is
adequate. Moody's expects the company's FCF generation will be
limited in the next 18 months because of investments related to
direct retail expansion and store openings. However, the company
will have an initial cash cushion of around EUR70 million and
access to a EUR75 million revolving credit facility (RCF), which
will be drawn for EUR25 million at closing of the transaction.
Moody's expects the RCF to be fully repaid by the end of 2021. The
RCF is subject to a springing senior net leverage covenant, with
currently ample capacity, tested quarterly if more than 40% of the
facility is drawn.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS

Overall, Moody's considers environmental and social risk to be
moderate for the apparel retail industry. Changes in customer
behavior, notably the shift to online, creates challenges for
incumbent retailers. However, this risk is mitigated by Golden
Goose's strong omni-channel capabilities. As a footwear retailer,
Golden Goose is also subject to social factors such as responsible
sourcing, product and supply sustainability, privacy and data
protection.

Golden Goose is controlled by sponsor company Permira which, as
often is the case in private-equity sponsored deals, can mean there
is a high tolerance for leverage, and governance can be
comparatively less transparent than listed companies.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects Moody's expectation that Golden Goose
will grow turnover and earnings in the next 12-18 months as it
continues to expand, in a controlled manner, its own retail
network, while benefiting from more normalized trading conditions
as store lockdown restrictions gradually ease. To maintain a stable
outlook, Golden Goose would need to (1) reduce its adjusted
leverage ratio towards 5.0x in the next 18 months, and (2) maintain
an appropriate liquidity profile, including access to the committed
EUR75 million RCF.

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

Positive pressure on the rating could occur overtime if the company
successfully executes its retail expansion strategy with a track
record of profitable growth. Quantitatively, upward pressure could
occur if the company's Moody's adjusted debt/EBITDA ratio remains
below 4.0x on a sustainable basis and its EBITA/interest expense
ratio remains sustainably above 2.5x. An upgrade would also require
Golden Goose to generate positive FCF and to maintain an adequate
liquidity profile while it demonstrates balanced financial
policies.

Conversely, negative pressure on the rating could materialize if
the company's sales growth and margins begin to face some pressure
indicating that its products are losing their appeal.
Quantitatively, downward pressure could occur if the company's
debt/EBITDA ratio does not fall sustainably below 5.5x, its
EBITA/interest expense ratio falls sustainably below 1.5x, FCF
weakens significantly or adequate liquidity is not maintained at
all times.

STRUCTURAL CONSIDERATIONS

The B2 rating assigned to the proposed EUR470 million senior
secured notes due 2027 reflects their presence as the largest debt
instrument in the capital structure, ranking behind the EUR75
million super-senior RCF. The notes will not be guaranteed.
However, Golden Goose S.p.A., the issuer of the notes, is the main
operating entity of the group, representing 71% of the company's
consolidated EBITDA, which means that there is limited structural
subordination within the group. Both instruments are secured, on a
first-priority basis, by pledges in the issuer's share capital.
However, the notes are contractually subordinated to the RCF with
respect to the collateral enforcement proceeds.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Apparel
Methodology published in October 2019.

COMPANY PROFILE

Headquartered in Milan, Golden Goose is an Italian apparel company
designing and distributing casual footwear, ready-to-wear products,
and accessories. Golden Goose's main products are luxury sneakers
such as the Superstar model. Founded in 2000, the company
distributes its products through (1) wholesale customers such as
well-known department stores and e-tailers; (2) its own website and
other online marketplaces; and (3) its own retail channel with a
network of 126 directly operated stores (DOS). In 2020 the company
reported EUR266 million of revenue and EUR88 million of EBITDA (as
adjusted by the company, post-IFRS 16).

GOLDEN GOOSE: S&P Assigns Preliminary 'B-' Ratings, Outlook Stable
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S&P Global Ratings assigned its preliminary 'B-' ratings to Golden
Goose S.p.A. and its proposed EUR470 million senior secured notes,
with a preliminary recovery rating of '3' indicating its
expectation of recovery in the 50%-70% range (rounded estimate:
50%) in the event of default.

The outlook is stable because S&P thinks the group should be able
to adequately fund its operating needs and manage its liquidity
position, despite low visibility and potential disruptions to the
expansion plan in the retail channel.

S&P said, "Our rating is constrained by the expected full
absorption of free operating cash flows into business development
in 2021 and 2022, as well as forecast adjusted debt leverage of 6x
in 2021. We also consider the company's high revenue and earnings
concentration in one product category (luxury sneakers). Golden
Goose is highly reliant on marketing its footware as a highly
differentiated luxury brand to a relevant consumer audience." It
has so far been successful in delivering growth through skilled use
of social media, as well as its targeted physical and online retail
presence. Nevertheless, restrictions on social activities and
travel, as well as uncertainties around the functioning of
non-essential retail shops throughout 2021, might dampen consumer
appetite for luxury footware, slowing the pace of new consumer
recruitment into the brand.

The company's business position is supported by its focus on an
omnichannel startegy. This includes targeted investments in
direct-to-customer capabilities to support the brands' equity
product and double-digit revenue prospects in the digital channel.
S&P said, "We also consider the good order book and visibility of
revenue from the large wholesale channel in 2021. We assume most of
the volume growth will come from a higher number of stores opened
through the year 2021 compared with 2020, new retail stores, and
greater penetration of online sales. We forecast an S&P Global
Ratings-adjusted EBITDA margin close to 30% thanks to Golden
Goose's ability to maintain strong pricing power with its luxury
products supported by the current strong brand appeal to female
millennials. That said, we also assume higher operating expenses
due to the larger scale of operations."

S&P said, "The final ratings will depend on our receipt and
satisfactory review of all final transaction documentation.
Accordingly, the preliminary ratings should not be construed as
evidence of the final ratings. If the terms and conditions of the
final transaction depart from the material we have already
reviewed, of if the transaction does not close within what we
consider to be a reasonable time frame, we reserve the right to
withdraw or revise our ratings.

"Golden Goose's dependence on a single brand and product category
in luxury footwear can result in revenue and profit volatility in
our view. Golden Goose operates in the personal luxury industry,
which has growth prospects in our view, supported by a younger
audience willing to follow fashion trends, and accelerated
e-commerce and social media fueling sales of luxury goods. However,
this industry is dominated by fast-changing trends, and barriers to
entry are relatively low thanks to outsourced manufacturing and
effectiveness of digital and social media-linked marketing
channels. Products still need to be strongly differentiated in the
eyes of customers, however, and growth is linked to continued
engagement from customers that have sufficient purchasing power and
embrace the brand's aesthetic. Golden Goose is relatively small and
has a very narrow product range, for which it offers minor
modifications in color and embellishment for a more personalized
consumer feel. We view as positive the company's price positioning,
which is lower than that of most luxury sneaker producers." But it
has so far managed to use a luxury element that allows it to charge
higher prices than for functional sportswear. Golden Goose's brand
values, which comprise the craftmanship of its products, uniqueness
of items, and engagement with customers, have made the white
Superstar sneakers model an iconic item in the mind of customers.
Moreover, the company currently benefits from engagement from a
young generation of customers and from celebrities that
spontaneously endorse the brand.

The expansion of the retail network entails execution risks in
2021, while providing opportunities for revenue growth and control
over the brand's perception. Golden Goose's strategy primarily
relies on opening retail stores in new cities and increasing its
digital presence. The company's plan is to almost double the size
of its retail network from 126 in 2020 to 237 in 2024; Golden Goose
lacks a track record of operating a significantly larger network.
Moreover, S&P estimates that this strategy increases the risk of
sales cannibalization to other channels and the risk that newly
opened stores take longer to reach their full potential than
anticipated. The company mitigates those risks by opening retail
stores in new locations where the risk of sales cannibalization is
limited; it also uses online data to estimate local demand before
opening a new store. The company has a successful track record of
designing its collections and stock order sizes in a way that
permits growth, but has kept the volume of returns and seasonal
swings in the inventory under control. Golden Goose presents each
new collection during the wholesale campaign, during which
wholesale partners place orders. The wholesale campaign occurs
about four to six months ahead of their billing and delivery, which
generally provides the company with good visibility from this
channel.

Expansion in new markets requires investment and might secure
future growth. Golden Goose is looking to expand internationally
and further penetrate the Asia-Pacific and Americas regions. S&P
said, "We think this strategy has execution risks because of the
need to build a local customer base that has sufficient disposable
income and embraces the brands' aesthetic and values. The company
might have to increase its investments in marketing to succeed in
its internal expansion, which could pressure its EBITDA margin in
the next 12 months. We note positively that the company has a good
track record of opening new stores, which are performing better
than expected in new cities in the U.S. like Atlanta or Houston."
This strategy also has the potential to drive future growth,
because it provides the company with access to a large untapped
audience in the U.S. and China.

Golden Goose's ambition to expand its direct-to-consumer channels
will likely depress free cash flow in the next 12 months. The
company's retail and online strategies require annual investments
in capex to open new stores and strengthen its IT infrastructure,
and in working capital to provide inventories to the new stores.
S&P said, "Moreover, we estimate that the company will require
additional personnel dedicated to online sales, personnel for
retail stores, and might have to increase spending in digital
marketing, all of which will put pressure on its EBITDA margin.
Consequently, we forecast the company to generate neutral to
slightly positive free operating cash flow (FOCF) of less than
EUR10 million in the next 12 months."

S&P said, "The high debt leverage, financial sponsor ownership, and
ambitious expansion plans will likely limit the extent of future
debt deleveraging in our view. Following the planned debt issuance
and refinancing, we estimate Golden Goose's adjusted debt-leverage
ratio will be about 6.0x in 2021, with funds from operations (FFO)
cash interest coverage at around 3.0x. We forecast that the group
will need to continuously invest its internally generated cash flow
in operating expenses, working capital, and capex, notably to
expand its retail network, resulting in low annual FOCF generation.
Although we see large debt-financed acquisitions as unlikely, given
the focus on the Golden Goose brand, we also note that the
private-equity ownership means that strong debt deleveraging with
S&P Global Ratings-adjusted debt to EBITDA below 5.0x is unlikely
over the next two years.

"The stable outlook reflects our view that Golden Goose will likely
generate double-digit revenue growth in 2021 thanks to increased
demand and S&P Global Ratings-adjusted EBITDA margins around 30%
thanks to strong pricing power. We forecast the group can sustain
an adjusted debt-to-EBITDA ratio at about 6.0x and FFO cash
interest of about 3.0x over the next 12 months. Given the large
funding needs in working capital and capex for the retail channel
expansion, FOCF should be positive but limited.

"We could lower the rating if Golden Goose generates negative FOCF
on a sustained basis, such that its ability to adequately fund its
operations comes under pressure. In this scenario, FFO cash
interest coverage will likely fall below 2.0x, which is not
commensurate with the current rating. This will most likely
materialize if the company's high capex on store openings and in
digital capabilities do not translate into revenue growth, due for
example to material setbacks in the opening of new stores or
decline in the brand's appeal, which we believe will result in an
unsustainable capital structure.

"We could consider an upgrade if Golden Goose's FOCF generation is
much larger than anticipated for 2021 while adjusted debt metrics
continue to improve from the current base case. This could occur if
the EBITDA base increases well beyond our base-case expectation for
2021 with strong visibility on 2022 and control over working
capital needs. This would most likely result from seamless
execution of the retail growth strategy and successful
international expansion translating into uninterrupted revenue
growth and geographic diversification. In this scenario, we will
expect the company's adjusted debt-to-EBITDA ratio to sustainably
improve to below 5.0x."




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MAS REAL ESTATE: Fitch Assigns FirstTime 'BB' LT IDR, Outlook Pos.
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Fitch Ratings has assigned Romania-focused retail property company
MAS Real Estate Inc. (MAS) a first-time Long-Term Issuer Default
Rating (IDR) of 'BB' with a Positive Outlook. At the same time,
Fitch has assigned a 'BB(EXP)' senior unsecured rating to MAS
Securities B.V., which plans to issue a EUR300 million bond,
guaranteed by MAS.

The ratings reflect MAS's small Central and Eastern European (CEE)
EUR443 million wholly-owned portfolio (December 2020) of commercial
properties, which should significantly increase through planned
acquisitions during FY22 to FY24. An ambitious development
programme is housed in its 40%-owned development joint venture
(DJV), which is funded through external, non-recourse debt and
MAS-injected preference shares.

The Positive Outlook reflects MAS's profile after executing planned
disposals and acquisitions, thus increasing MAS's portfolio and
reducing asset concentration.

The assignment of the planned bond's final rating is contingent on
final documentation conforming to information already received.

KEY RATING DRIVERS

Small CEE Retail Portfolio: After divesting of most of its Western
European (WE) portfolio, MAS's wholly-owned CEE portfolio comprises
14 enclosed, open-air and strip malls with a total GLA of 243,100
sqm, mainly in Romania (62% of net rental income), Bulgaria (20%)
and Poland (18%). The portfolio has a regional or community focus
with many convenience-led stores with affordable rents. Proceeds
from WE assets disposals will be mainly used to paydown existing
secured debt, acquire more CEE income-producing assets for MAS's
balance sheet and invest in further DJV preference shares.

Planned Expansion Reduces Concentrations: The limited number of MAS
properties means asset concentration is high (top ten assets: more
than 90% of rent). This will diminish as MAS intends to make
additional comparable acquisitions in CEE. Tenant concentration is
high (top ten tenants: 37% of rent) with the largest being anchors
Carrefour, Kingfisher and Auchan. The portfolio is likely to remain
Romania-concentrated. The average net rental yield for the CEE
portfolio is 7.7% compared with 4.7% for the yet to be sold WE
portfolio.

Effects of the Pandemic: The coronavirus significantly affected
MAS's CEE properties, but with the positive effects from many
convenience-led stores and open-air malls, and a low exposure to
vulnerable retail sectors such as restaurant and entertainment, MAS
had comparatively good operational stats. CEE footfall from
July-December 2020 averaged 77% compared with the same period in
2019. Shoppers preferred open-air malls, where footfall was down
only 13% compared with 35% for enclosed malls. The company's July
to December 2020 CEE rent collection rate (based on invoiced
income) was 94%. December 2020 occupancy for CEE was 93% (December
2019: 95%). Recovery of operational metrics will largely depend on
the extent that coronavirus restrictions are reintroduced.

Property Development Model: MAS does not directly develop
properties. Property development is carried out exclusively through
its 40%-owned DJV called PKM Developments. Prime Kapital (PK), a
privately-owned real estate company with investment and development
experience in CEE, owns the remaining 60%. The DJV's projects are
primarily funded by preference shares injected by MAS, which has
committed to subscribe up to EUR420 million through to March 2025
(December 2020: MAS EUR186.7 million already funded).

Properties developed in the DJV are held in it, which MAS manages
at cost. MAS gains post-interest expense profits through a 7.5%
coupon on the preference shares, as well as its share of potential
common stock dividends. Fitch has only included cash-paid
preference share coupons derived from DJV's recurring rental income
when calculating MAS's EBITDA (averaging 20% of the Fitch rating
case FY21-24 EBITDA).

Material Capex Mainly in the DJV: The DJV holds a portfolio of four
malls, all in Romania, with a value of EUR181 million as at
December 2020. December 2020 occupancy was 94%. With further
preference share investments by MAS, alongside bank debt for
completed properties (averaging 45% LTV), the DJV will fund
additional retail developments, a six-year phased office project
and residential properties for sale in phases.

Potential for Conflicts of Interest: There is currently potential
for conflicts of interest in the corporate structure as the CEO
(Martin Slabbert) and Executive Director (Victor Semionov) of MAS
are also the founders and partners of PK, which owns 60% of the
DJV. PK and its management, including the DJV, own around 20% of
MAS. As part of restructuring, MAS is taking steps to avoid
conflicts of interest with dealings and transactions scrutinised by
MAS's majority-independent board members. For example, Mr. Slabbert
and Mr. Semionov cannot be directors of the DJV until they have
stepped away from being executive directors of MAS (which is
expected to happen in November 2022).

MAS's Financial Profile: The proposed EUR300 million bond will
significantly improve the debt profile. The proceeds will repay
existing CEE debt and fund further eligible green assets, either in
its wholly-owned portfolio or through the DJV. With significant
cash on MAS's balance sheet from the bond, as well as proceeds from
WE divestments, Fitch forecasts YE21 net debt/EBITDA to be only
2.4x, increasing to around 6.1x in FY22 as MAS acquires assets and
preference shares. As developed assets remain in the DJV, but are
mainly funded through MAS acquiring preference shares, MAS's
loan-to-value ratios (including MAS income-generating property
only) will be high -- averaging more than 50% during FY22-24.

The DJV has four assets, but developments funded by preference
shares and bank debt. DJV's LTV will exceed 70% in FY21 and 100% in
FY22 (applying 50% equity credit to the preference shares, and
assuming that capital gains are crystallised on assets' completion
valuations) before slowly reducing.

DERIVATION SUMMARY

MAS's closest peers are NEPI Rockcastle (BBB/Stable) and Atrium
European Real Estate (BBB/Stable), both retail real estate
companies focused on Central and Eastern Europe. The current CEO
and an Executive Director of MAS originally founded New Europe
Property Investments (the future NEPI Rockcastle) in 2007.

NEPI Rockcastle, with a portfolio of EUR5.9 billion (including
developments) and Atrium European Real Estate Limited's
(BBB/Stable), with a EUR2.5 billion portfolio, are much larger than
MAS, whose wholly-owned portfolio (excluding the WE portfolio,
which is being divested) was valued at EUR443 million (December
2020), although forecast to materially grow through acquisitions.
This small asset size means MAS has high asset concentration, with
the top ten assets generating more than 90% of revenue, compared
with NEPI (43%) and Atrium (75%).

Unlike NEPI and Atrium, MAS develops and holds additional
properties through an exclusive DJV. MAS provides funding to the
DJV by subscribing for preference shares. MAS gains returns through
preference dividends and potential common dividends by virtue of
its 40% holding. MAS's directly-owned portfolio will grow primarily
through acquisitions, whereas both NEPI and Atrium will both
develop and acquire assets to increase the portfolio.

While MAS has operations in three countries, most of the portfolio
is in Romania (BBB-/Negative) with one asset in Poland (A-/Stable)
and two in Bulgaria (BBB-/Stable). Atrium has better country risk
exposure with assets located in CEE countries rated 'A-' and
higher: Poland, Czech Republic (20%; AA-/Stable) and Slovakia (5%;
A/Negative) with 11% of its assets (by value) in Russia
(BBB/Stable). NEPI's geographic diversification is wide with
presence in nine CEE countries, but the average country risk rating
is lower.

KEY ASSUMPTIONS

Fitch's key assumptions within its rating case for the issuer
include:

-- Reflecting the ongoing effects of the pandemic, Fitch has
    decreased the rents on lease renewals by 5% in FY21 only.

-- Preference share coupon which is covered by DJV's post
    interest expense, recurring rental-derived, profits (not
    planned residential development and sales) is included in
    MAS's Fitch EBITDA.

-- Phased MAS property acquisitions during the years to 2024 at
    7% rental income yield.

-- More than EUR350 million of identified WE property disposals
    in FY21, most of which has occurred or is contracted.

-- Over time, subscribing to additional preference shares in DJV
    up to the remaining committed subscription.

-- MAS listed investments: dividends are included in the cashflow
    (not EBITDA), as are their disposal proceeds.

-- No MAS dividends in FY21.

RATING SENSITIVITIES

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

-- MAS stand-alone property portfolio of at least EUR1 billion;

-- Material increase in geographic diversity, while maintaining
    portfolio quality;

-- Net Debt/EBITDA (including cash-paid preference share coupons)
    below 7.5x (FY22 pro forma: 6x);

-- MAS stand-alone unencumbered asset/unsecured debt cover above
    2.0x (YE20: 1.6x).

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

-- Material deterioration of operating metrics, such as occupancy
    below 90%;

-- Net debt/EBITDA (including cash-paid preference share coupons)
    exceeding 8.5x;

-- A liquidity score below 1.0x on a sustained basis.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.

LIQUIDITY AND DEBT STRUCTURE

At end-December 2020, the company has a comfortable liquidity
position with access to an undrawn EUR60 million RCF maturing in
June 2022, cash of EUR86 million and only EUR12 million debt due
for the following 12 months (including debt on WE, part of which
has been disposed to date). If necessary, the company could divest
its investment in listed securities, which had a net fair value of
EUR10 million, to gain additional liquidity.

Post-bond issuance, the company's liquidity position will continue
to be comfortable. With a combination of WE assets sales paying
secured debt associated with those assets, part of the bond
proceeds are expected to remain on balance sheet through FY21, then
fund acquisitions, minimal capex at MAS level and the purchase of
DJV preference shares to fund development.

MAS is not a REIT so there is no regulatory dividend requirement
and dividends are discretionary. The company has suspended
dividends to date for FY21.

ESG CONSIDERATIONS

Fitch has assigned an ESG credit relevance score of 4 for
Governance Structure, reflecting the potential conflicts of
interest in the corporate structure as MAS's CEO and one of its
Executive Directors are also the founders and current partners of
Prime Kapital, which owns 60% of DJV. Prime Kapital and its
management, including the DJV, own around 20% of MAS. As part of
the ongoing restructuring of MAS, MAS is taking steps to avoid
conflicts of interest, such as having various dealings and
transactions scrutinised by MAS's majority-independent board
members. This has a negative impact on the credit profile, and are
relevant to the ratings in conjunction with other factors.

The score of '4' for Group Structure reflects the group's
complexity including disclosed related-party transactions
(including preference shares, a previous property disposal
transaction to MAS) and cross-holdings (such as the unusual
circumstance of DJV owning shares in MAS). This has a negative
impact on the credit profile, and is relevant to the ratings in
conjunction with other factors.

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.

MAS REAL: Moody's Assigns Ba1 CFR on Strong Market Position
-----------------------------------------------------------
Moody's Investors Service has assigned a Ba1 corporate family
rating to MAS Real Estate Inc. Subsequently, it has assigned a Ba1
rating to its new senior unsecured notes, to be issued by MAS
Securities B.V. and to be guaranteed by MAS. The outlook on the
ratings is stable.

RATINGS RATIONALE

MAS' Ba1 rating is primarily supported by (1) its conservative
financial profile with Moody's expectation of effective leverage in
terms of debt/gross assets remaining below 40% and net debt/EBITDA
below 6x; (2) its strong position in its core market Romania (Baa3
negative) where it is a sizeable owner of retail assets; (3)
solid-quality and convenience-oriented shopping centres portfolio
within good catchment areas; (4) good rental income visibility from
a 5 years WALT to a good credit quality tenant base, including a
number of international retailers and (5) resilient operating
performance even in the context of Covid-19.

Counterbalancing these strengths are: (1) a complex corporate
structure including a 40% stake in a development JV to which MAS
has substantial funding commitment in the form of preferred capital
(EUR233.3 million until 2025, based on figures as at December 31,
2020) but no direct control of the investment properties, balanced
by conservative operational and financial risk management; (2)
geographic presence in less liquid investment markets in CEE; (3)
execution risks attached to growth plans through development and
acquisitions, balanced by good management track record and prudent
approach; (4) a retail real estate operating environment that
remains difficult in the immediate run and as long as the virus is
not brought under control, however the rebound of the sales and
footfall at MAS' shopping centres will be fuelled by solid
medium-long term economic fundamentals and (5) a sector-wide
structural currency mismatch that is embedded within the leases,
which is a potential long-term risk.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects Moody's expectation that the company
will continue to generate stable cash flow while retaining high
occupancy levels and a balanced growth strategy. It also reflects
Moody's view that the company's conservative capital structure and
good liquidity will allow MAS to successfully navigate through a
fragile economic environment with prevailing coronavirus-driven
business disruptions.

Over the next 2-4 years the company targets an ambitious growth
strategy via acquisitions as well as development activities within
its development JV. While there are inherent execution risks
attached to those activities, Moody's understand that MAS will
continue observing a prudent operational risk management while
funding its growth activities in line with its financial policy.

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

FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS

A rating upgrade is unlikely until the company achieves a
materially stronger business profile backed by a rising share of
directly controlled investment properties with a sustained track
record of solid operating performance. More specifically Moody's
could consider to upgrade MAS if:

The company continues growing the scale of its portfolio while
expanding the amount of directly controlled investment properties
comprised by high-quality and dominant retail schemes

MAS continues building track record of strong operational
performance as measured by like-for-like rental growth, footfall,
overall retail sales, retail sales per square meter and occupancy
cost ratio for retailers under a stable operating environment

Company continues with a further diversification of funding
sources while maintaining a ratio of unsecured properties to
unsecured debt on a MAS standalone basis at well above 2x

Company maintains a Moody's-adjusted gross debt/asset sustained
below 35% and net debt to EBITDA below 5x (on a proportional
consolidated basis)

If MAS achieves a Moody's-adjusted fixed charge coverage ratio
sustained above 4x (on a proportional consolidated basis)

Company maintains good liquidity and a long-dated, staggered debt
maturity profile maintained with financing needs being addressed
12-18 months in advance

FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS

If there is a deterioration in the company's scale and quality of
its portfolio leading to declining occupancy, rental growth,
footfall, overall retail sales, or if there is a structural
weakening of operating environment for MAS

Failure to diversify funding sources with the amount and quality
of unencumbered assets not improving further in the two years after
its inaugural issuance or the ratio of unsecured properties to
unsecured debt on a standalone basis deteriorating from 1.5x at
inaugural issuance

Breach of financial policy with Moody's-adjusted gross debt/assets
sustained above 40% and net debt to EBITDA rising above 6x (on a
proportional consolidated basis)

Fixed-charge coverage ratio falls below 3x (on a proportional
consolidated basis)

Rising development risk with a total committed pipeline cost
increasing substantially above 10% of its GAV (on a proportional
consolidated basis) and no meaningful pre-letting ratios

Failure to maintain adequate liquidity and a well staggered
maturity profile or a restricted funding environment resulting in
very high refinancing risk

STRUCTURAL CONSIDERATIONS

The assigned Ba1 CFR equals the senior unsecured rating considering
that after its inaugural issuance MAS will shift towards a
predominantly unsecured funding structure.

Therefore the Ba1 rating assigned to the senior unsecured bond is
in line with the long term corporate family rating. Moody's expects
the new notes to rank pari passu with all other unsecured
obligations of the issuer. They will benefit from financial
covenants including a maximum solvency ratio of 60%, unencumbered
consolidated total assets of minimum 180% of the aggregate
outstanding principal amount of unsecured consolidated total
indebtedness and a minimum consolidated coverage ratio of 2.5x.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS

Moody's regards the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety.

Governance risks that Moody's consider in MAS credit profile
includes the company's complex corporate structure including a 40%
stake at the development JV to which MAS has a substantial funding
commitment in the form of preferred capital (EUR233.3 million until
2025, based on figures as at 31 December 2020) but no direct
control of the investment properties, balanced by conservative
operational and financial risk management and adequate corporate
governance framework.

The company has a publicly communicated financial policy that
limits its loan to value (LTV) - computed as the nominal value of
debt less cash to investment property, listed security and
preference shares- to maximum 40% as well as its net debt to net
rental income ratio to a maximum of 7x (on a proportional
consolidated basis).

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in September 2018.

CORPORATE PROFILE

MAS owns a moderate scale property portfolio of EUR844.8 million
(EUR962.5 million on a proportional consolidated basis) as at
December 31, 2020. If excluding investment properties in Western
Europe held for sale, portfolio value is EUR444.6 million (EUR562.4
million on a proportional consolidated basis). The company is
focused on solid-quality and convenience-oriented shopping centres
portfolio within good catchment areas predominately in Romania.

MAS owns 40% of the ordinary share capital of PKM Development, the
development JV with Prime Kapital. Additional to MAS common equity
stake, the company has by December 31, 2020 invested EUR186.7
million in preferred equity, with an outstanding commitment of
EUR233.3 million until 2025.

MAS is listed on Johannesburg stock exchange, with a market
capitalization of around EUR704 million as of April 27, 2021.
Company's main shareholders on April 1, 2021 were Prime Kapital
Holdings and associates with a 20.08% stake, Attacq -- a JSE-listed
REIT with a 10.85% stake, the South African public employees'
pension fund with a 7.58% stake, Argosy with a 7.12% stake, among
others.



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

RESO-LEASING: S&P Withdraws 'BB+' Long-Term Issuer Credit Rating
----------------------------------------------------------------
S&P Global Ratings withdrew its 'BB+' long-term and 'B' short-term
issuer credit ratings on RESO-Leasing at the insurance company's
request. At the time of the withdrawal, the outlook was
developing.

Before the withdrawal, the ratings on RESO-Leasing reflected our
view of the company as a highly strategic subsidiary of
RESO-Garantia (BBB-/Positive/--), one of the leading
property/casualty insurers in Russia, focusing on motor insurance.
The long-term rating on RESO-Leasing was one notch below our 'bbb-'
group credit profile assessment for RESO group, as per our approach
to rating highly strategic subsidiaries within groups. The
developing outlook on RESO-Leasing indicated that the long-term
rating could move in line with the long-term rating on the parent.
S&P also considered, however, the potential that, if it reassessed
RESO-Leasing's role in the group, the ratings might not move in
tandem, but rather that the rating on RESO-Leasing could stay at
the same level or be lowered.




===============
S L O V E N I A
===============

HOLDING SLOVENSKE: S&P Withdraws 'BB' LT Issuer Credit Rating
-------------------------------------------------------------
S&P Global Ratings withdrew its 'BB' long-term issuer credit rating
on Slovenian power generator Holding Slovenske elektrarne d.o.o.
(HSE) at HSE's request.

The outlook was positive at the time of the withdrawal, indicating
the possibility of an upgrade if HSE's credit metrics continued to
improve as a result of debt reduction, stable cash flow, and
favorable hydrological conditions. S&P said, "At the time we
thought an upgrade was possible if HSE's growth investments
remained nonmaterial in the coming two-to-three years, and it paid
no dividend. We believe the company's hedging levels should support
stable earnings in 2021 and result in funds from operations to debt
well above 15%."

HSE plays a key role for Slovenia as the major energy producer. The
company is fully owned by the Slovenian government and is an
essential part of the national economy. However, S&P believes that
HSE's small scale of operations, asset concentration, and thermal
production constrain its business risk profile.




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

BBVA RMBS 14: Moody's Ups EUR63M Class B Notes Rating from Ba2 (sf)
-------------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of two classes
of notes, and affirmed the ratings of two classes of notes, in two
Spanish RMBS transactions. The rating action reflects better than
expected collateral performance and increased levels of credit
enhancement for the affected notes. Moody's affirmed the ratings of
the notes that had sufficient credit enhancement to maintain the
current ratings.

Issuer: AyT GENOVA HIPOTECARIO IV, FTH

EUR776M Class A Notes, Affirmed Aa1 (sf); previously on Dec 27,
2018 Affirmed Aa1 (sf)

EUR24M Class B Notes, Upgraded to Aa2 (sf); previously on Dec 27,
2018 Upgraded to A1 (sf)

Issuer: BBVA RMBS 14 Fondo de Titulizacion de Activos

EUR637M Class A Notes, Affirmed Aa1 (sf); previously on Apr 25,
2018 Upgraded to Aa1 (sf)

EUR63M Class B Notes, Upgraded to Baa1 (sf); previously on Jul 10,
2015 Affirmed Ba2 (sf)

The maximum achievable rating is Aa1 (sf) for structured finance
transactions in Spain, driven by the corresponding local currency
country ceiling of the country.

RATINGS RATIONALE

The rating action is prompted by decreased key collateral
assumptions, namely the portfolio Expected Loss (EL) assumptions,
due to better than expected collateral performance, as well as an
increase in credit enhancement for the affected tranches. In BBVA
RMBS 14 Fondo de Titulizacion de Activos the decrease of the
expected loss assumption reduces the probability of breaching the
Interest Deferral Trigger, which would defer the interest payments
on the Class B notes to a more junior position in the priority of
payments.

Revision of Key Collateral Assumptions

As part of the rating action, Moody's reassessed its lifetime loss
expectation for the portfolios reflecting the collateral
performance to date.

Collateral performance of both transactions has been strong over
the past year, with low and stable or decreasing arrears. In AyT
GENOVA HIPOTECARIO IV, FTH 90 days plus arrears currently stand at
0.18% of current pool balance, the same level as a year earlier. In
BBVA RMBS 14 Fondo de Titulizacion de Activos, 90 days plus arrears
currently stand at 0.06% of current pool balance, down from 0.09% a
year earlier.

Cumulative defaults are likewise low in both transactions, and have
only marginally increased over the past year. In AyT GENOVA
HIPOTECARIO IV, FTH cumulative defaults currently stand at 0.28% of
original pool balance, and have not increased over the past year.
In BBVA RMBS 14 Fondo de Titulizacion de Activos cumulative
defaults currently stand at 0.12% of original pool balance, up from
0.10% a year earlier.

In AyT GENOVA HIPOTECARIO IV, FTH Moody's decreased the expected
loss assumption to 0.17% as a percentage of original pool balance
from 0.35% due to the stable performance. In BBVA RMBS 14 Fondo de
Titulizacion de Activos, Moody's decreased the expected loss
assumption to 1.03% as a percentage of original pool balance from
1.60% due to the improving performance.

Moody's has also assessed loan-by-loan information as a part of its
detailed transaction review to determine the credit support
consistent with target rating levels and the volatility of future
losses. As a result, Moody's has maintained the MILAN CE
assumptions for both transactions.

Increase in Available Credit Enhancement

Sequential amortization and, for AyT GENOVA HIPOTECARIO IV, FTH a
non-amortizing reserve fund, led to the increase in the credit
enhancement available in these transactions.

In AyT GENOVA HIPOTECARIO IV, FTH the credit enhancement for the
Class B notes increased to 9.31% from 6.26% since the last rating
action. In BBVA RMBS 14 Fondo de Titulizacion de Activos the credit
enhancement for the Class B notes increased to 8.86% from 5.41%
since the last rating action.

Counterparty Exposure

The rating actions took into consideration the notes' exposure to
relevant counterparties, such as servicer, account banks or swap
providers.

The coronavirus pandemic has had a significant impact on economic
activity. Although global economies have shown a remarkable degree
of resilience to date and are returning to growth, the uneven
effects on individual businesses, sectors and regions will continue
throughout 2021 and will endure as a challenge to the world's
economies well beyond the end of the year. While persistent virus
fears remain the main risk for a recovery in demand, the economy
will recover faster if vaccines and further fiscal and monetary
policy responses bring forward a normalization of activity. As a
result, there is a heightened degree of uncertainty around Moody's
forecasts. Moody's analysis has considered the effect on the
performance of consumer assets from a gradual and unbalanced
recovery in the Spanish economic activity.

Moody's regard the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety.

The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
December 2020.

The analysis undertaken by Moody's at the initial assignment of
ratings for RMBS securities may focus on aspects that become less
relevant or typically remain unchanged during the surveillance
stage.

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

Factors or circumstances that could lead to an upgrade of the
ratings include: (i) performance of the underlying collateral that
is better than Moody's expected; (ii) an increase in available
credit enhancement; (iii) improvements in the credit quality of the
transaction counterparties; and (iv) a decrease in sovereign risk.

Factors or circumstances that could lead to a downgrade of the
ratings include: (i) an increase in sovereign risk; (ii)
performance of the underlying collateral that is worse than Moody's
expected; (iii) deterioration in the notes' available credit
enhancement; and (iv) deterioration in the credit quality of the
transaction counterparties.

TDA 29: Moody's Upgrades EUR9.3MM Class C Notes Rating to Ba3 (sf)
------------------------------------------------------------------
Moody's Investors Service has upgraded and affirmed the ratings of
Notes in TDA 26 MIXTO, FTA, BONOS GRUPO 1, FTA and TDA 29, FTA,
Spanish RMBS transactions. The upgrades reflect the better than
expected performance and increased levels of credit enhancement for
the affected Notes.

Issuer: TDA 26 MIXTO, FTA, BONOS GRUPO 1, FTA

EUR636.4M Class 1-A2 Notes, Affirmed Aa1 (sf); previously on Oct
10, 2019 Affirmed Aa1 (sf)

EUR18.2M Class 1-B Notes, Affirmed Aa1 (sf); previously on Oct 10,
2019 Upgraded to Aa1 (sf)

EUR5.4M Class 1-C Notes, Upgraded to A1 (sf); previously on Oct
10, 2019 Upgraded to A3 (sf)

Issuer: TDA 29, FTA

EUR435M Class A2 Notes, Affirmed Aa1 (sf); previously on Dec 27,
2018 Affirmed Aa1 (sf)

EUR9.3M Class C Notes, Upgraded to Ba3 (sf); previously on Dec 27,
2018 Upgraded to B3 (sf)

The maximum achievable rating is Aa1 (sf) for structured finance
transactions in Spain, driven by the corresponding local currency
country ceiling of the country.

RATINGS RATIONALE

The upgrades of the ratings of the Notes are prompted by the better
than expected collateral performance and increase in credit
enhancements for the affected tranches. For instance, cumulative
defaults have remained largely unchanged in the past year, below
are the exact figures for each transaction:

(i) TDA 26 MIXTO, FTA, BONOS GRUPO 1, FTA, to 3.42% from 3.36%.

(ii) TDA 29, FTA, to 4.97% from 4.90%.

Moody's affirmed the ratings of the classes of Notes that had
sufficient credit enhancements to maintain their current ratings.

Key Collateral Assumption Revised

As part of the rating actions, Moody's reassessed its lifetime loss
expectations and recovery rates for the portfolios reflecting their
collateral performances to date.

Moody's revised its expected loss assumptions as follows:

(i) TDA 26 MIXTO, FTA, BONOS GRUPO 1, FTA, to 1.38% from 2.08%.

(ii) TDA 29, FTA, to 2.12% from 3.48%.

All as a percentage of the original pool balance for each
transaction.

Moody's has also assessed loan-by-loan information as a part of its
detailed transaction review to determine the credit support
consistent with target ratings levels and the volatility of future
losses. As a result, Moody's has revised the MILAN CE assumptions
of each transaction as follows:

(i) TDA 26 MIXTO, FTA, BONOS GRUPO 1, FTA, 8.0% unchanged.

(ii) TDA 29, FTA, to 8.0% from 10.5%.

The coronavirus pandemic has had a significant impact on economic
activity. Although global economies have shown a remarkable degree
of resilience to date and are returning to growth, the uneven
effects on individual businesses, sectors and regions will continue
throughout 2021 and will endure as a challenge to the world's
economies well beyond the end of the year. While persistent virus
fears remain the main risk for a recovery in demand, the economy
will recover faster if vaccines and further fiscal and monetary
policy responses bring forward a normalization of activity. As a
result, there is a heightened degree of uncertainty around Moody's
forecasts. Moody's analysis has considered the effect on the
performance of consumer assets from a gradual and unbalanced
recovery in the Spanish economic activity.

Moody's regard the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was "Moody's
Approach to Rating RMBS Using the MILAN Framework" published in
December 2020.

The analysis undertaken by Moody's at the initial assignment of
ratings for RMBS securities may focus on aspects that become less
relevant or typically remain unchanged during the surveillance
stage.

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

Factors or circumstances that could lead to an upgrade of the
ratings include: (i) performance of the underlying collateral that
is better than Moody's expected; (ii) an increase in the Notes'
available credit enhancement; (iii) improvements in the credit
quality of the transaction counterparties; and (iv) a decrease in
sovereign risk.

Factors or circumstances that could lead to a downgrade of the
ratings include: (i) an increase in sovereign risk; (ii)
performance of the underlying collateral that is worse than Moody's
expected; (iii) deterioration in the Notes' available credit
enhancement; and (iv) deterioration in the credit quality of the
transaction counterparties.



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

AKBANK TAS: Fitch Affirms 'B+' LT IDR, Outlook Neg.
---------------------------------------------------
Fitch Ratings has affirmed Akbank T.A.S.'s (Akbank) Long-Term
Foreign-Currency Issuer Default Rating (LTFC IDR) at 'B+' with a
Negative Outlook and Viability Rating (VR) at 'b+'.

The support-driven LT IDR of Akbank AG has been affirmed, in line
with its parent, Akbank.

KEY RATING DRIVERS

LTFC IDR, VR, SENIOR DEBT RATING AND NATIONAL RATING

Akbank's 'B+' LTFC IDR and senior debt ratings are driven by its
VR. The affirmation of the VR, despite heightened operating
environment pressures, reflects the bank's generally reasonable
financial metrics, underpinned by its good franchise (end-2020: 7%
of sector assets), and significant capital and liquidity buffers.
However, the VR also reflects the bank's concentration in the
volatile and challenging Turkish operating environment

The recent replacement of the Turkish Central Bank (CBRT) governor
and ensuing damage to monetary policy credibility and investor
sentiment - as evidenced by renewed market volatility and lira
depreciation - increases funding and liquidity risks, as does high
increased deposit dollarisation. Furthermore, ongoing uncertainty
over the pandemic, particularly given the latest resurgence and
lockdown restrictions, create downside risks both to Fitch's GDP
forecast of 6.7% in 2021 and banks' asset quality. Operating
environment pressure, and the implications for the bank's financial
metrics, drives the Negative Outlook on Akbank's LTFC IDR and is a
high importance factor for the VR.

Akbank plans moderate loan growth (about 20%) mainly in LC while FC
lending is budgeted to be flat. This follows below sector-average,
albeit still high, growth of 28% (nominal basis; or 11%
FX-adjusted) in 2020. Lending in 1Q21 grew 3% in LC (mainly
unsecured consumer loans) and 2% in FC in USD terms.

Despite the bank's reasonable risk framework, asset quality risks
are significant for Akbank, given single-name risks, exposure to
unsecured retail borrowers (23%) - sensitive to weaker GDP growth
and higher unemployment, respectively - and the pressured real
estate (8%), energy (7%), construction (4%), logistics (4%) and
tourism (3%) sectors. Stage 2 loans are below peers but still high
(9.5% of gross loans, of which about three-quarters have been
restructured).

A high share of FC lending (38% at end-1Q21; consolidated basis)
also heightens risks, given that not all borrowers will be fully
hedged against lira depreciation. These risks are somewhat
mitigated by the fact that exposures are generally to large,
diversified corporates with FX revenues, or project finance loans
carrying a government feed-in tariff (energy loans) or revenue or
debt assumption guarantee.

Akbank's reported impaired loans (NPL) ratio fell to 6.2% at
end-2020 and further to 5.8% at end-1Q21 from 6.7% at end-2019,
despite operating environment pressures, primarily reflecting
forbearance on loan classification (40bp uplift), collections and
loan growth. Fitch expects NPLs to rise moderately in 2021, given
waning government stimulus and regulatory forbearance (due by
end-1H21) and maturing loan deferrals (end-1Q21: 7% of gross loans;
largely now repaying). However, loan restructurings could delay the
migration of loans to Stage 3.

Total reserve coverage of NPLs increased to 100% at end-1Q21
(end-2019: 82.4%) as Akbank front loaded provisions due to the
pandemic, partly reflecting higher reserve coverage of Stage 2
loans (16.8%).

Akbank has the highest operating profit/risk-weighted assets (RWAs)
ratio among peers (2.3% in 2020) and has consistently outperformed
the peer group average, reflecting better margins, and good
operating expense management. Fitch expects performance to decline
due to margin pressure following the lira interest rate hikes -
given the bank's short-term negative repricing gap - and loan
impairment charges (LICs; 1Q21: equal to 58% of pre-impairment
operating profit; end-2020: 50%). However, it should remain
reasonable given the bank's solid pre-impairment operating profit
buffer (equal to 6% of average loans in 2020).

Akbank has the strongest core capitalisation among peers and its
capitalisation is supported by solid pre-impairment operating
profitability and moderate reserves coverage. Its common equity
Tier 1 (CET1)/RWAs ratio was a solid 17.8% at end-2020 (16.9% net
of regulatory forbearance, end-1Q21:15.5%). This declined slightly
in 1Q21 but it provides a significant buffer to absorb unexpected
losses and potential lira depreciation. The total regulatory
capital ratio is higher (end-2020: 20.0%; 18.5% without
forbearance) reflecting FC subordinated Tier 2 debt, which provides
a partial hedge against lira depreciation. Akbank reports the
lowest leverage ratio of the peer group.

Akbank's loans/deposits ratio was reasonable at 104% at end-2020
(end-1Q21:100%), below the peer average. It has a good deposit base
(end-1Q21:72% of total funding), reflecting its domestic franchise.
A high share of demand deposits (31%) and retail deposits support
its cost of funding, which is below the sector average. However,
its share of FC deposits (62%) is above peer and sector averages,
creating potential liquidity risks in case of deposit instability.

High FC wholesale funding (end-1Q21: 22% of consolidated total
funding) increases refinancing risks, given exposure to investor
sentiment amid volatile market conditions. Akbank has retained
reasonable access to international funding markets and continued to
roll over a high share of FC debt despite its sufficient FC
liquidity and muted FC loan demand, including 107% rollover of its
loan syndication in April.

At end-1Q21, Akbank's available FC liquidity (USD12 billion), a
large portion of which will likely be placed with the CBRT, in
Fitch's view, was sufficient to cover maturing FC debt over 12
months (USD2.7 billion ; including a USD630 million syndication
that has already been rolled over). Nevertheless, FC liquidity
could come under pressure from a prolonged loss of market access or
FC deposit instability.

The affirmation of Akbank's National Rating with a Stable Outlook
reflects Fitch's view that the bank's creditworthiness in local
currency relative to other Turkish issuers is unchanged.

LTLC IDR, SUPPORT RATING FLOOR (SRF) AND SUPPORT RATING (SR)

Akbank's 'B-' SRF is at the level of the domestic systemically
important bank SRF for Turkish banks. It reflects the bank's
private ownership and Fitch's view that support from the Turkish
authorities in FC cannot be relied upon given the sovereign's weak
net international reserves.

Akbank's 'B+' LT Local-Currency (LC) IDR is driven by potential
state support, reflecting the sovereign's greater ability to
provide support in local currency. The Stable Outlook mirrors that
on the sovereign.

SUBORDINATED DEBT RATING

Akbank's 'B-' subordinated notes rating is notched twice from the
VR reflecting Fitch's expectation of poor recoveries in case of
default.

AKBANK AG

Akbank AG's ratings are equalised with those of its parent,
reflecting its important role in the group and integration with
Akbank group.

Akbank AG's Deposit Ratings are in line with its support-driven
IDRs. In Fitch's opinion, Akbank AG's debt buffers do not afford
any obvious incremental probability of default benefit over and
above the support benefit factored into the bank's IDRs.

RATING SENSITIVITIES

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

-- Upside for the VR is constrained by Turkish operating
    environment risks. However, a reduction in operating
    environment risks, including lower market or exchange rate
    volatility and an improvement in investor sentiment, would
    reduce downside risks to the VR and could support a revision
    of the Outlook to Stable.

-- A record of resilient financial metrics, notwithstanding
    heightened operating environment risks, could also support a
    revision of the Outlook to Stable.

-- A significant improvement in Turkey's external finances,
    including materially higher net FX reserves, could lead to an
    upwards revision of Akbank's SRF and upgrade of the SR,
    although this is unlikely in the near term.

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

-- The LTFC IDR and senior debt rating are primarily sensitive to
    a change in Akbank's VR, which could be downgraded due to
    further marked deterioration in the operating environment, if
    the fallout from the latest pandemic resurgence is more severe
    than expected, or if economic recovery is significantly weaker
    than expected.

-- In addition, a greater than expected deterioration of Akbank's
    underlying asset quality, including due to a rise in
    restructured loans could put pressure on the VR. A prolonged
    funding market closure or deposit instability that severely
    eroded the bank's FC liquidity buffer could also lead to a VR
    downgrade.

-- Negative action on the sovereign rating, particularly if
    triggered by further weakening in Turkey's external finances,
    that leads to increased intervention risk, would likely be
    mirrored on the bank's LT IDRs.

-- The SR and SRF could be downgraded and revised lower,
    respectively, if Fitch concludes further stress in Turkey's
    external finances materially reduces the reliability of
    support for the bank in FC from the Turkish authorities.

SUBORDINATED DEBT

The subordinated debt rating is sensitive to a change in Akbank's
VR anchor rating.

NATIONAL RATING

The National Rating is sensitive to changes in Akbank's LTLC IDR
and its creditworthiness relative to other Turkish issuers.

AKBANK AG

Akbank AG's ratings are sensitive to changes in its parent's
Long-Term IDR.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Financial Institutions and
Covered Bond issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of four notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.

SUMMARY OF FINANCIAL ADJUSTMENTS

An adjustment has been made in Fitch's financial spreadsheets for
Akbank that has affected Fitch's core and complimentary metrics.
Fitch has taken a loan classified as a financial asset measured at
fair value through profit and loss in the bank's financial
statements and reclassified it under gross loans as Fitch believes
this is the most appropriate line in Fitch spreadsheets to reflect
this exposure.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Akbank has ratings linked to the Turkish sovereign rating, given
the ratings either rely on or are sensitive to Fitch's assessment
of sovereign support or country risks.

Akbank AG's ratings are driven by support from Akbank T.A.S.

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.

LIMAK ISKENDERUN: Fitch Assigns BB-(EXP) Rating to USD360MM Notes
-----------------------------------------------------------------
Fitch Ratings has assigned Limak Iskenderun Uluslararasi Liman
Isletmeciligi AS's (LimakPort's) USD360 million notes a rating of
'BB-(EXP)' with a Stable Outlook.

RATING RATIONALE

The 'BB-(EXP)' rating reflects LimakPort's role as trade enabler of
a diversified product base in the fast-growing South-East Turkey
region, its modern assets and infrastructure with designed capacity
well above current volumes and fully amortizing nature of the debt.
The rating also captures LimakPort's small size, elevated exposure
to competition to the nearby bigger, but currently capacity
constrained, Mersin Uluslararasi Liman Isletmeciligi A.S. (Mersin
port, BB-/Stable) and a 1.4x debt service coverage ratio (DSCR)
metric over 2022-2032 under Fitch Rating Case (FRC). The rating is
currently constrained by Turkey's country ceiling.

LimakPort port is relatively small, compared with other rated
ports, with a clear focus on container volumes in south-east of
Turkey. This area has thrived in the past decade from competitive
nominal wages, strategic geographical location and softer
environmental regulation. This has resulted in the development of a
dynamic and flourishing manufacturing region, namely across the
locations of Gaziantep, Kahramanmaras and Adana. Nevertheless,
while regional manufacturing involves a diversified mix of goods,
these are mostly low value added in nature and therefore exposed to
competition from neighbouring facilities in and out of Turkey where
manufacturing could be quickly shifted.

KEY RATING DRIVERS

Industrial Hinterland, Exposed to Competition - Revenue Risk
(Volume): 'Midrange'

LimakPort has a focus on handling containers, covering 2/3 of
revenues, but also services cargo, Ro-Ro and dry bulk. The port
mainly serves the needs of its dynamic hinterland in terms of
importing raw materials and exporting finished/semi-finished goods
to the EU, Middle East and North Africa. This results in a
diversified and balanced mix between import and export across the
major ports in the basin. In the last 16 years, the Eastern
Mediterranean container market volumes have grown with a CAGR of
10%.

LimakPort has an elevated exposure to competition from two
alternative ports in the same area which target the same volumes:
Mersin Port and Assan Port. Both ports are generally used for
containers and are nearing capacity. LimakPort is the only port in
the area which is operating significantly below capacity, absorbing
a substantial portion of the growth in the area which has resulted
in volumes growing at a CAGR of 55% between 2013-2020 and 18%
between 2016-2020. Nevertheless, while steadily increasing from
2013, LimakPort's market share is still at 17% against 75% for
Mersin which remains the largest port in Turkey's south eastern
region.

LimakPort benefits from strong connections to the hinterland,
especially by road, where the port has competitive advantage over
its competitors in terms of transport cost per container. In
addition, its relatively small size and ample capacity result in
greater operational efficiency, although this is mitigated by lower
number of port calls at LimakPort compared with Mersin.

Mainly Unregulated US Dollar Tariffs - Revenue Risk (Price):
'Midrange'

LimakPort's revenues are predominantly unregulated as only tariffs
for marine services, circa 15% of revenues, are regulated by the
General Directorate of the Turkish State Railroad Administration.
This gives significant price flexibility in the unregulated
business as long as tariffs are not excessive or discriminatory,
for which there is no history of enforcement. LimakPort has been
able to increase tariff four times since 2013.

The typical contract length with the port's customers is relatively
short, at an average of two years, and includes volume-related
incentives. Although this optimises the upside potential, it also
exposes LimakPort to downside risk, since flexibility can become a
weakness if volumes drop. LimakPort has a competitive advantage vs
Mersin given tariffs are generally 15%-20% lower.

The depreciation of the Turkish lira does not have a direct impact
on LimakPort's tariffs, which are set in US dollars. The small
portion of the revenues collected in local currency are used to
make payments of operational expenses which are mainly denominated
in Turkish lira and LimakPort maintains the policy of converting
unused excess amounts of Turkish lira into US dollar on a weekly
basis. This mechanism effectively removes exchange rate imbalance
in the business and, despite the depreciation of Turkish lira
against US dollar, allows the company to continue maintaining a
healthy margin.

Ample capacity to grow - Infrastructure Development & Renewal:
'Midrange'

LimakPort underwent a significant renovation between 2012-14 to
increase capacity to 1 million TEU. This is significantly above
current utilisation, at 466k TEU, and allows for considerable
growth before major growth capital expenditure is required. Despite
the substantial capacity available, it is expected that significant
cyclical replacement capex will be required near the end of the
debt tenor, of which there is limited access under FRC to excess
cashflow to ensure this is met.

LimakPort has substantial expansion potential, should this be
needed to accommodate sustained growth in volumes in the long term
above port's current capacity. Growth capex linked to the port's
capacity expansion is highly flexible and will only be rolled out
if volumes exceed certain thresholds. This growth capex and
increased capacity is not required to service the debt.

Fully Amortizing, Small Reserves - Debt Structure: Midrange

The debt consists of a single tranche of USD360 million senior
secured notes due in 2036, which are fully amortizing and fixed
rate. The transaction features typical project finance protections.
These include strong limitation on additional pari passu debt,
distribution lock-up covenants of 1.25x and a 3-month O&M reserve
account.

However, this is mitigated by the lack of a cash sweep mechanism
upon lock-up, a limited 6-month debt service reserve account and a
1.5-year maintenance reserve account (MRA). In particular, the MRA
is relatively small given the size and volatility of the capex
plan, resulting in a correspondingly volatile account funding
requirement under FRC. Fitch notes positively the long tail to the
port's concession maturity in 2047 which provides long-term
financial flexibility embedded in the structure.

It has also been noted that under Turkish administrative law, the
concession agreement could be terminated unilaterally for public
benefit without the LimakPort being in breach of its obligations.
In this scenario compensation may be available but any amount and
timing is uncertain. Fitch deems this as a remote scenario given
the lack of economic rationale to terminate the concession while
the operator is meeting its obligations under the concession
agreement. In particular, it would likely cost the authorities in
compensation to terminate the concession while they do not make
regular payments to the operator unlike in some other
Public-Private concessions.

Financial Profile

The FRC is based upon a reasonable downside scenario and forecasts
a minimum DSCR of 1.3x in 2023 and average from 2022-2032 of 1.4x.
The debt is fully amortising to 2036 but Fitch has focused upon
metrics up to 2032, as after this point the project benefits from
release under the MRA, given that no reserving would be required in
the last two years of the debt. The DSCR profile is relatively
stable until 2030. From that date onwards, DSCR could become
volatile depending on how the realisation of the flexible
replacement capex given MRA reserving limitations.

The FRC average DSCR of 1.4x is robust but the rating is currently
constrained by Turkey's country ceiling of 'BB-'. Fitch views the
liquidity available in the offshore reserve accounts as
insufficient to warrant notching above the country ceiling.
However, Fitch notes the transaction benefits from certain
structural elements that somewhat reduce transfer and
convertibility risk, such as reserves in offshore accounts and the
possibility of directing payments from customers directly to
offshore accounts if capital restrictions were imposed.

Further to this, while debt maturity is in 2036 the concession
matures in 2047, creating an 11-year tail. Higher capex
requirements at the end of the debt amortization offset this,
leading to a robust minimum PLCR of 2.0x in Fitch's FRC.

PEER GROUP

LimakPort's closest peer is the nearby Mersin Port, which is rated
'BB-'/Stable, constrained by Turkey's country ceiling. Mersin is
the largest port in the region and Turkey's largest export-import
port. This exposes Mersin to the same diversified yet volatile mix
of volumes as LimakPort with a similarly well-connected
hinterland.

Despite the location and hinterland similarities, LimakPort is
considerably smaller than Mersin. Currently, it is able to compete
with Mersin due to considerable available capacity, significantly
lower tariff and land transportation cost advantage arising from
its proximity to the end customers in its hinterland. Both ports
are able to flexibly set tariffs as long as these are not excessive
or discriminatory. LimakPort benefits from a fully amortising and
protective project finance debt structure as opposed to Mersin's
corporate bullet structure. This leads to the key metric in Mersin
being leverage while Fitch evaluates Limak on a DSCR basis making
financial comparisons less straightforward. Both Mersin and
LimakPort's rating are constrained by the 'BB-'country ceiling of
Turkey.

RATING SENSITIVITIES

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

-- Positive rating action on Turkey's sovereign rating/country
    ceiling.

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

-- Negative rating action on Turkey's sovereign rating/country
    ceiling or;

-- Forecast DSCRs consistently below 1.2x.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Sovereigns, Public Finance
and Infrastructure issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of three notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.

TRANSACTION SUMMARY

LimakPort is seeking to issue up to USD360 million of long-term
144A/Reg S fully amortising project bonds. Proceeds will be mainly
used to completely repay its existing USD288 million debt, acquire
operational equipment, upstream cash to shareholders and fund
liquidity accounts.

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.

LIMAK ISKENDERUN: Moody's Rates New USD360M Sr. Secured Notes 'B3'
------------------------------------------------------------------
Moody's Investors Service has assigned a B3 rating to the proposed
USD360 million senior secured notes to be issued by Limak
Iskenderun Uluslararasi Liman Isletmeciligi A.S.(LimakPort), a
concessionaire for the port of Iskenderun located in the south-east
of Turkey. The outlook is stable. This is the first time Moody's
has assigned a rating to LimakPort.

The proceeds from the senior secured notes will be used to
refinance LimakPort's existing senior secured debt, pay down some
but not all of the shareholder loans, pay transaction fees and
pre-fund reserve accounts as required under the terms of the
proposed notes.

The assigned ratings are based on draft documentation received by
Moody's as of the rating assignment date. Moody's does not expect
significant changes to the documentation, including the terms and
conditions of the notes. However, should borrowing conditions
and/or the final documentation deviate materially from that
incorporated in to the rating, Moody's will assess the impact that
these differences may have on the ratings and act accordingly.

RATINGS RATIONALE

The B3 rating on the senior secured notes positively reflects (1)
Iskenderun port's role as a gateway for Turkish international
trade, with a balanced mix of imports and exports, and fairly good
product diversification; (2) the port's competitive position, given
its proximity to some of the main industrial centers in the
south-east of Turkey and consequent competitive costs of transport,
coupled with the port's competitive tariffs; (3) regular calls from
major shipping lines and the port's spare capacity to handle
growing volumes; (4) the long-term concession agreement for the
operation of Iskenderun port, with limited operating covenants, and
ability to set its own tariffs; and (5) the significant element of
LimakPort's revenue supported by demand in overseas markets, with
over 75% of the company's revenue received in US dollars. Moody's
expects the local economy to continue to grow, supporting
throughput volumes.

The rating is, however, constrained by (1) LimakPort's exposure to
Turkey's political, legal, fiscal and regulatory environment; (2) a
fairly high level of competition, including from Mersin port and
Assan port, with the potential for competitive dynamics to change
as Mersin port seeks to expand its capacity; (3) Iskenderun's
location close to the Syrian border, as the escalation of unrest in
Syria could impact volumes and reduce the overall attractiveness of
the port for shipping lines; (4) the port's fairly small size and
exposure to container volumes variations, albeit these have
exhibited strong growth since the completion of the port's major
investment programme; and (5) LimakPort's high financial leverage
at the outset as reflected in an estimated debt/EBITDA ratio of
around 9x.

The B3 rating further considers the project finance terms and
conditions of the proposed senior secured notes, which will be
fully amortising over the life of the notes, with the scheduled
principal repayment increasing over time. Under management
assumptions, the debt service coverage ratio will average 2.2x over
the life of debt, but will reach around 1.5x under Moody's case,
which assumes slower growth in container throughput. The security
package includes a pledge over all of the share capital of
LimakPort, a pledge of all movable assets of the company, excluding
assets required to satisfy the minimum port capacity under the
concession agreement and a security interest in offshore and
onshore accounts. The lenders will benefit from a six-month Debt
Service Reserve Account, a three-month Operation and Maintenance
and an 18-month capital expenditure reserve account. Distributions
will be subject to a minimum debt service coverage ratio, as
defined under the terms of the notes, of 1.25x.

Governance considerations are incorporated into the rating. The
company is majority-owned by a Turkish conglomerate, Limak Holding.
In accordance with project finance practice, cash flow not required
to meet debt service or fund required expenditure is intended to be
regularly distributed to shareholders. Nevertheless, LimakPort's
financial flexibility will be constrained by the terms of the
proposed senior secured notes, which include restrictions to
dividend distributions subject to a minimum debt service coverage
ratio test, together with other restricting provisions.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects Moody's expectation that LimakPort will
grow its volumes and earnings, improving its financial metrics and
building financial flexibility ahead of the increasing scheduled
debt repayments.

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

An upgrade of the rating is not anticipated in the near term.
However, the rating could be upgraded in the longer term if
expected volume growth is achieved and LimakPort builds greater
flexibility in the context of the increasing scheduled debt
repayments. Any upgrade will be also predicated on the improvement
in the operating environment in Turkey, as may be evidenced by an
uplift in Turkey's sovereign rating and foreign currency debt
ceiling.

A downgrade of Turkey's sovereign rating or a lowering of the
foreign currency bond ceiling could put downward pressure on
LimakPort's rating. In addition, downward rating pressure could
arise if container volume growth was to slow down materially from
the historical levels, and the company had not built enough
financial flexibility to accommodate this weaker performance in the
context of its scheduled debt amortization profile, or if
government-imposed measures were to have an adverse impact on the
company's operations.

The principal methodology used in this rating was Privately Managed
Port Companies published in September 2016.

Limak Iskenderun Uluslararasi Liman Isletmeciligi A.S. (LimakPort)
is the concessionaire for the port of Iskenderun located in
Iskenderun bay -- South East Med Turkey. The company was granted a
36-year concession for the operation, maintenance and development
of the port in 2011. In 2020, its revenue amounted to USD67 million
and EBITDA stood at USD40 million. LimakPort is 80% owned by Limak
Group, a Turkish conglomerate. The remaining 20% is held by
InfraMed.

TURKIYE CUMHURIYETI ZIRAAT: Fitch Affirms 'B+' LT IDR, Outlook Neg.
-------------------------------------------------------------------
Fitch Ratings has affirmed Turkiye Cumhuriyeti Ziraat Bankasi
A.S.'s (Ziraat) Long-Term Foreign-Currency Issuer Default Rating
(LTFC IDR) at 'B+' with a Negative Outlook, and Viability Rating
(VR) at 'b+'.

The support-driven Long-Term IDRs of its Islamic bank subsidiary,
Ziraat Katilim Bankasi (ZKB), have also been affirmed, in line with
Ziraat's.

KEY RATING DRIVERS

VR, LTFC IDR AND SENIOR DEBT RATING

Ziraat's 'B+' LTFC IDR and senior debt rating are driven by the
bank's standalone credit profile, as expressed in the VR. The
affirmation of the VR reflects the bank's still reasonable
financial metrics, underpinned by a solid franchise as Turkey's
largest bank (end-2020: 15% of sector assets), fairly diversified
operations and adequate capital and liquidity buffers. However, the
VR also reflects the bank's concentration in the volatile and
challenging Turkish operating environment.

The recent replacement of the Central Bank (CBRT) governor and
ensuing damage to Turkey's monetary policy credibility and investor
sentiment have driven renewed market volatility and lira
depreciation, creating downside risks to Turkey's economic recovery
(Fitch forecast of 6.7% GDP in 2021).

In addition, the VR considers the bank's high risk appetite and
growth record - both deemed as factors of high importance for the
VR and also driving the Negative Outlook on the bank - which are
indicative of Ziraat's state bank role in supporting Turkey's
economic policy.

Ziraat has consistently grown above the sector-average, creating
seasoning risks. Growth in 2020 (26% foreign exchange
(FX)-adjusted; private peer average: 11%) was partly under the
Treasury-backed Credit Guarantee Fund (CGF; largely to SMEs),
somewhat mitigating credit risks, although housing loans also rose
(40%). Ziraat expects loan growth to normalise at around 15% in
2021.

Ziraat's asset-quality metrics (end-2020: non-performing loan (NPL)
ratio of 2.5%; consolidated basis) have historically outperformed
peers', reflecting sound-quality residential mortgages (15% of
loans), largely subsidised agro lending (14%) and CGF loans (12%).
Metrics are flattered by high loan growth and regulatory
forbearance on loan classification (50bp uplift to the NPL ratio);
while restructurings and loan deferrals (end-2020: a combined 8% of
loans) will likely also have delayed problem loan recognition.

Stage 2 loans are moderate (end-2020: 6%; 42% restructured) and
below peers', which could partly reflect differences in
classification standards.

Total reserve coverage of impaired loans increased to 126% at
end-2020 (end-2019: 98%), due to the front-loading of provisions,
including Stage 2 reserves coverage rising to 15.6%. Additional
'free provisions' were equal to 0.5% of loans.

Nevertheless, asset-quality risks remain significant for Ziraat,
reflecting SME lending (end-2020: 37% of loans) and risky-sector
exposures including construction and real estate (17%), energy (5%)
and tourism (2%). High, albeit below-average, foreign-currency (FC)
lending (26%; sector: 34%) also heightens risks given that not all
borrowers are fully hedged against lira depreciation. Fitch's base
case is that the Stage 3 loans ratio will increase moderately in
the near term, but continue to outperform peers', while
restructured loans could rise.

Ziraat's performance has historically been underpinned by the
bank's broad franchise and strict cost control. However, its 2020
operating profit/risk-weighted assets (RWAs) underperformed the
sector (1.6% versus 1.9%) despite its above-average loan growth.

Performance in 2020 was weighed down by FX trading losses, credit
impairments (equal to 49% of pre-impairment operating profit;
including TRY2.6 billion of free provisions) and margin pressure,
with CPI-linked gains only partly offsetting the latter. Its net
interest margin (2020: 4.9%, or 4.2% swap adjusted; sector: 4.7%)
is likely to contract in 2021 given the lira-rate rises, the bank's
short-term negative repricing gap and high share of fixed-rate
loans.

Capitalisation is adequate (end-2020: 14.2% common equity Tier 1
(CET1)/RWAs; 13% net of forbearance, which is due to expire by
end-1H21) but remains sensitive to lira depreciation (which
inflates FC RWAs), loan-seasoning risks, as well as weaker internal
capital generation and loan growth. Fitch expects this ratio to
decrease to about 12.5% by end-2021, under Fitch's base case.

Capital ratios are supported by low CGF risk weights and a TRY7
billion capital increase in 2020 (110bp of RWAs). The total capital
ratio (17.2%) is supported by FC additional Tier 1 (AT1) debt,
which provides a partial hedge against lira depreciation.

Ziraat has a large, granular and stable (but short-term) deposit
base (end-2020: 74% of total funding), reflecting its leading
franchise and public-sector deposits (15% of total customer
deposits). The bank has an above-sector average share of lira
funding but FC deposits are nevertheless high (53%). It reports a
solid loans/deposits of 101% (consolidated basis), which decreased
in 2020 due to rapid deposit growth (2020: 46%; 29% FX adjusted).

FC wholesale funding (including FC bank deposits) is moderate
(end-2020: 12% of total funding), heightening refinancing risks
given exposure to investor sentiment amid volatile market
conditions. Ziraat has retained external market access, albeit at a
higher cost, rolling over a high share of FC debt (including
syndicated loans), despite muted FC loan demand.

At end-2020, available FC liquidity (mainly comprising FC swaps
with the CBRT) covered maturing FC debt over 12 months plus about
8% of FC customer deposits. Nevertheless, FC liquidity could come
under pressure from a prolonged loss of market access or FC deposit
instability.

ENVIRONMENT, SOCIAL AND GOVERNANCE SCORES

Ziraat and ZKB each has an ESG Relevance Score of '4' for
Governance Structure and Management Strategy (in contrast to
typical Relevance Scores of '3' for comparable banks), due to
potential government influence over their boards' effectiveness and
management strategy in the challenging Turkish operating
environment.

SUPPORT RATING (SR), SUPPORT RATING FLOOR (SRF), LONG-TERM
LOCAL-CURRENCY (LTLC) IDR

Ziraat's 'B' SRF is two notches below Turkey's LTFC IDR, despite
the bank's state ownership, policy role, systemic importance,
state-related funding and the record of capital support. However,
the notching reflects Fitch's view that support from the
authorities in FC is limited given the sovereign's weak net FC
reserves.

The LTLC IDR is equalised with the sovereign's, reflecting Turkey's
greater ability to provide support in LC. The Stable Outlook
mirrors that on the sovereign.

NATIONAL RATINGS

The affirmation of Ziraat's National Rating with a Stable Outlook
reflects Fitch's view that the bank's creditworthiness in LC
relative to other Turkish issuers' is unchanged.

SUBSIDIARY

The ratings of Ziraat Katilim Bankasi are equalised with its
parent's, reflecting its strategic importance to, and integration
with, the group and common branding between the two entities.

RATING SENSITIVITIES

VR, LTFC IDR AND SENIOR DEBT RATINGS

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

-- The LTFC IDR and senior debt rating are primarily sensitive to
    a change in Ziraat's VR, which could be downgraded due to
    marked deterioration in the operating environment, if the
    fallout from the latest pandemic resurgence is more severe
    than expected, or if economic recovery is significantly weaker
    than expected.

-- The VR could be downgraded in case of further increases in
    risk appetite, as reflected by rapid, above-sector average
    loan growth despite operating-environment weakness, or
    strategic decisions that increase pressure on underlying asset
    quality, profitability and capitalisation.

-- Greater-than-expected deterioration in asset quality,
    including due to a rise in restructured loans, could put
    pressure on the VR, as could a prolonged funding-market
    closure or deposit instability that severely erodes Ziraat's
    FC liquidity buffer.

-- A sovereign downgrade, particularly if triggered by further
    weakening in Turkey's external finances that leads to an
    increase in bank intervention risk, would likely be mirrored
    on Ziraat's LTFC IDRs.

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

-- Upside for the VR is constrained by operating-environment
    risks. A reduction in operating-environment risks, including
    lower market- or exchange-rate volatility, and an improvement
    in investor sentiment would reduce downside risks to the VR
    and could support a revision of the Outlook to Stable. A
    reduction in risk appetite would also reduce downside risks to
    Ziraat's VR.

-- A record of improved, resilient financial metrics
    notwithstanding heightened operating-environment risks, could
    also support a revision of the Outlook to Stable.

SUPPORT RATING, SRF AND LTLC IDR

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

-- Ziraat's SR and SRF could be downgraded and revised lower,
    respectively, if Fitch concludes further stress in Turkey's
    external finances materially reduces the reliability of
    support for the bank in FC from the Turkish authorities.

-- Ziraat's LTLC IDR could be downgraded if Turkey's LTLC IDR is
    downgraded, or if Fitch believes the sovereign's propensity to
    provide support has reduced or the likelihood of bank
    intervention risk increases.

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

-- A significant improvement in Turkey's external finances,
    including a material increase in net FX reserves, could lead
    to a upward revision and upgrade of Ziraat's SRF and SR,
    respectively. However, only a multi-notch upward revision of
    the SRF would lead to an upgrade of Ziraat's LTFC IDR given
    the bank's VR is one notch above the SRF.

-- An upgrade in the sovereign's LTLC IDR or a revision in the
    sovereign's Outlook to Stable would likely lead to similar
    actions on the bank.

NATIONAL RATINGS

The National Rating is sensitive to changes in Ziraat's LTLC IDR
and creditworthiness relative to other Turkish issuers'.

SUBSIDIARY

The ratings of ZKB are sensitive to changes in the Long-Term IDRs
of its parent.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Financial Institutions and
Covered Bond issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of four notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Ziraat's ratings are linked to the Turkish sovereign ratings and
ZKB's ratings are linked to those of its parent bank.

ESG CONSIDERATIONS

Ziraat and ZKB each has an ESG Relevance Score of '4' for
Governance Structure and Management Strategy (in contrast to a
typical Relevance Scores of '3' for comparable banks). It also
reflects potential government influence over their boards'
effectiveness and management strategy in the challenging Turkish
operating environment. This has a negative impact on the credit
profiles, and is relevant to the ratings in conjunction with other
factors.

ZKB's ESG Relevance Score of '4' for Governance Structure also
takes into account the bank's status as an Islamic bank. Its
operations and activities need to comply with sharia principles and
rules, which entails additional costs, processes, disclosures,
regulations, reporting and sharia audit. This has a negative impact
on the credit profile, and is relevant to the ratings in
conjunction with other factors.

In addition, Islamic banks have an exposure to social impacts
relevance score of '3' (in contrast to a typical ESG relevance
score of '2' for comparable conventional banks), which reflects
that Islamic banks have certain sharia limitations embedded in
their operations and obligations, although this only has a minimal
credit impact on Islamic banks.

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.

TURKIYE GARANTI: Fitch Affirms 'B+' LT IDR, Outlook Stable
----------------------------------------------------------
Fitch Ratings has affirmed Turkiye Garanti Bankasi A.S.'s (Garanti
BBVA) Long-Term Foreign-Currency Issuer Default Rating (LTFC IDR)
at 'B+' with a Stable Outlook and Viability Rating (VR) at 'b+'.

KEY RATING DRIVERS

IDRS, SUPPORT RATING AND SENIOR DEBT RATINGS

Garanti BBVA's LTFC IDR and senior debt rating are driven by
institutional support from the bank's 49.85% owner, Banco Bilbao
Vizcaya Argentaria S.A. (BBVA; BBB+/Stable). Fitch's view of
support is based on Garanti BBVA's strategic importance,
integration and role within the BBVA group.

However, Fitch's view of government intervention risk caps the LTFC
IDR at 'B+', one notch below the sovereign's. This reflects Fitch's
assessment that weaknesses in Turkey's external finances and net
foreign-exchange (FX) reserves would make intervention in the
banking system impeding the bank's ability to service its FC
obligations more likely than a sovereign default.

Garanti BBVA's Long-Term Local-Currency (LTLC) IDR is also driven
by support but rated one notch above the bank's LTFC IDR, at 'BB-'
reflecting Fitch's view of a lower likelihood of government
intervention in local currency (LC).

The Outlook on the bank's Long-Term IDRs is Stable, mirroring that
on the sovereign.

VR

The affirmation of Garanti BBVA's VR reflects the bank's generally
reasonable financial metrics, underpinned by a solid franchise
(end-2020: 8% of sector assets), and significant capital and
liquidity buffers. However, the VR also reflects the bank's
concentration in the volatile and challenging Turkish operating
environment.

The recent replacement of the Turkish Central Bank (CBRT) governor
and ensuing damage to monetary policy credibility and investor
sentiment - as evident in renewed market volatility and lira
depreciation - increases funding and liquidity risks, as has high,
increased, deposit dollarisation. Furthermore, uncertainty over the
pandemic, particularly given the latest infection resurgence and
lockdown restrictions, create downside risks both to Fitch's GDP
forecast of 6.7% in 2021 and banks' asset quality. The operating
environment is a factor of high importance for the VR.

Garanti BBVA has plans for loan growth in the mid-teens in 2021
(1Q21: 6% realised), driven by unsecured, lira retail and business
lending, while foreign-currency (FC) lending is set to shrink
further. Loan growth in 2020 was high (26% nominal; 12%
FX-adjusted), albeit below the sector average, and the
Treasury-guaranteed Credit Guarantee Fund was only a small
contributor.

Despite Garanti BBVA's reasonable risk framework, asset-quality
risks are significant given the bank's lira exposure to SMEs and
commercial borrowers (end-2020: 33% of loans), unsecured retail
borrowers (21%) and the pressured energy (14%) and construction and
real-estate sectors (8% combined). High FC lending (end-2020: 40%),
largely to corporates, also heightens risks given that not all
borrowers are fully hedged against lira depreciation. Stage 2 loans
(16%; about a third restructured) are also above the sector
average, although this likely partly reflects the bank's
conservative loan classification approach.

Garanti BBVA's reported impaired loans (NPL) ratio improved to 4.4%
at end-2020 (end-2019: 6.7%), primarily reflecting NPL sales and
write-offs (2020: equal to 130bp of gross loans) forbearance on
loan classification (35bp uplift) and loan growth. Fitch expects
the NPL ratio to increase to 7% by end-2022 (in the absence of NPL
sales and write-offs), reflecting waning government stimulus and
regulatory forbearance (expected by end-1H21) and maturing loan
deferrals (end-2020: 11%; largely now repaying). Further loan
restructurings could delay the migration of loans to Stage 3.

Total reserve coverage of impaired loans increased to 130% at
end-2020 (end-2019: 89%), as Garanti BBVA front-loaded
pandemic-related provisions and increased Stage 2 reserves coverage
(14.4%). The bank also has 'free provisions' equal to 1.3% of loans
to absorb possible losses.

The bank's operating profit/risk-weighted assets (RWAs) was a
reasonable 2.2% in 2020 (sector: 1.9%). Profitability is expected
to remain above the sector average and broadly resilient through
the cycle, given the bank's solid pre-impairment operating
profitability. This is despite short-term margin contraction from
the lira-rate hikes - due to the bank's negative repricing gap -
loan impairment charges (LICs; 2020: equal to 59% of pre-impairment
operating profit) and slower loan growth. However, the cost of risk
could fall in 2021 given the front-loading of provisions.

Capitalisation is reasonable, supported by solid pre-impairment
operating profit (2020: equal to 6.8% of average loans) and
moderate specific reserves coverage. The bank has a significant
buffer above regulatory minima to absorb unexpected losses and
potential lira depreciation. its common equity Tier 1 (CET1)/RWAs
ratio was 13.9% at end-1Q21 (excluding 60bp potential forbearance
uplift). Its total capital ratio was higher (16.6%), reflecting FC
subordinated Tier 2 debt that provides a partial hedge against lira
depreciation.

Garanti BBVA has a large deposit base (end-2020: 82% of total
funding). Deposits are short-term but stable and include a high
share of demand deposits supporting its below-peer cost of funding.
Its loans/deposits ratio (end-2020: 102%) outperforms most peers'.
However, FC deposits are significant (60%), creating liquidity
risks in case of deposit instability.

FC wholesale funding is fairly high (end-2020: 15% of total
funding), increasing refinancing risks given exposure to investor
sentiment in volatile market conditions. Garanti BBVA has retained
reasonable access to international funding markets, albeit at a
higher cost, but its strategy is to moderately deleverage FC debt
in the medium term.

At end-2020, available FC liquidity - mainly placed with the CBRT -
was sufficient to cover the bank's maturing external debt over 12
months plus over a quarter of FC deposits. Nevertheless, it could
come under pressure from a prolonged loss of market access or FC
deposit instability.

SUBORDINATED DEBT RATING

Garanti BBVA's subordinated notes rating is notched down once from
the LTFC IDR. The notching includes one notch for loss severity and
zero notches for non-performance risk.

NATIONAL RATINGS

The affirmation of Garanti BBVA's National Rating with a Stable
Outlook reflects Fitch's view that the bank's creditworthiness in
local currency relative to other Turkish issuers' is unchanged.

RATING SENSITIVITIES

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

-- Garanti BBVA's LTFC IDR could be downgraded or its Outlook
    revised to Negative if Fitch's view of government intervention
    risk in the banking sector has increased.

-- Negative action on the sovereign rating, particularly if
    triggered by further weakening in Turkey's external finances
    that leads to increased intervention risk, would likely be
    mirrored on the bank's Long-Term IDRs.

-- The bank's ratings are also sensitive to Fitch's view of
    BBVA's ability and propensity to provide support, in case of
    need. A reduced likelihood of institutional support would only
    lead to a downgrade of the bank's ratings if its VR is
    simultaneously downgraded.

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

-- An upgrade in Turkey's Long-Term IDRs or a revision in the
    sovereign's Outlook to Stable would likely lead to similar
    actions on the bank's Long-Term IDRs. A significant
    improvement in Turkey's external finances or a marked increase
    in its net FX reserves, resulting in a significant reduction,
    in Fitch's view, of government intervention risk in the
    banking sector, could lead to an upgrade of the bank's LTFC
    IDR to the level of Turkey's LTFC IDR.

VR

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

-- Garanti BBVA's VR could be downgraded due to further marked
    deterioration in the operating environment, if the fallout
    from the latest pandemic resurgence is more severe than
    expected, or if economic recovery is significantly weaker than
    expected.

-- A prolonged funding market closure or deposit instability that
    severely erodes the bank's FC liquidity buffer would be
    negative for the VR, if not offset by parental support.

-- Rating headroom for the VR would reduce if greater-than
    expected deterioration in asset quality materially weakens
    Garanti BBVA's operating profitability for a sustained period.

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

-- Upside for the VR is constrained by Turkey's operating
    environment risks. A reduction in operating- environment
    risks, including lower market- or exchange rate-volatility,
    and an improvement in investor sentiment would reduce downside

    risks to the VR.

NATIONAL RATINGS

The National Rating is sensitive to changes in the bank's LTLC IDR
and creditworthiness relative to other Turkish issuers'.

SUBORDINATED DEBT RATING

Garanti BBVA's subordinated debt rating is sensitive to changes in
the bank's LTFC IDR anchor rating but also to a change in notching
from the anchor rating due to a revision in Fitch's assessment of
the probability of the notes' non-performance risk, or of loss
severity in the case of non-performance.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Financial Institutions and
Covered Bond issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of four notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.

SUMMARY OF FINANCIAL ADJUSTMENTS

An adjustment has been made in Fitch's financial spreadsheets for
Garanti BBVA that has affected the agency's core and complimentary
metrics. Fitch has taken a loan classified as a financial asset
measured at fair value through profit and loss in the bank's
financial statements and reclassified it under gross loans as Fitch
believes this is the most appropriate line in Fitch spreadsheets to
reflect this exposure.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Garanti BBVA's ratings are linked to the Turkish sovereign ratings
and to those of the parent bank.

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.

TURKIYE HALK: Fitch Maintains 'B' LT IDR on Watch Neg.
------------------------------------------------------
Fitch Ratings has maintained Turkiye Halk Bankasi A.S.'s (Halk) 'B'
Long-Term Foreign-Currency Issuer Default Rating (LTFC IDR) and 'b'
Viability Rating (VR) on Rating Watch Negative (RWN).

The RWN continues to reflect Fitch's view of the material risk of
the bank becoming subject to a fine or other punitive measure as a
result of the ongoing US legal proceedings, and uncertainty
surrounding the sufficiency and timeliness of support from the
Turkish authorities in case of these measures. Fitch expects to
resolve the RWN once there is more clarity on the outcome of the US
investigations and the implications this may have for the bank.
Fitch may maintain the RWN for more than six months if the US
investigations are extended for a longer period.

KEY RATING DRIVERS

VR, LTFC IDR AND SENIOR DEBT RATING

The LTFC IDR is driven by the VR, reflecting the concentration of
the bank's operations in the high-risk Turkish operating
environment, underpinned by sovereign support at the 'B' level. The
VR reflects Halk's solid franchise (11% of sector assets) supported
by its ownership and policy role. However, the VR also reflects
Halk's concentration in the volatile and challenging Turkish
operating environment and the bank's weak capital position.

The recent replacement of the Turkish Central Bank (CBRT) governor
and ensuing damage to monetary policy credibility and investor
sentiment - as evidenced by renewed market volatility and lira
depreciation - increases funding and liquidity risks, as does high,
increased, deposit dollarisation. Furthermore, ongoing uncertainty
over the pandemic, particularly given the latest resurgence and
lockdown restrictions, create downside risks to Fitch's GDP
forecast of 6.7% in 2021 and banks' asset quality.

The VR also considers the bank's high-risk appetite and rapid
growth, indicative of its role as a state bank supporting Turkey's
economic policy, which put pressure on capitalisation, margins and
profitability.

Halk has a record of above-sector-average loan growth, creating
seasoning risks, particularly given challenging market conditions.
Growth in 2020 (34% FX-adjusted; private peer average: 11%) was
largely under the Treasury-guaranteed Credit Guarantee Fund (CGF),
mitigating the credit risks to some extent. Housing loans, where
default rates are low, also increased. Halk expects growth to
normalise in the mid-teens in 2021, focused on SME lira lending.

Credit risk is heightened by seasoning risks, high although below
sector average FC lending (23% of loans) given lira depreciation
and the fact that not all borrowers will be fully hedged, and
exposure to troubled sectors, including construction and real
estate (7%), energy (5%) and tourism (5%). Total reserve coverage
of non-performing loans (NPL) increased to 98% at end-2020.
Including loans overdue by 90-180 days (that would be classified as
NPLs absent regulatory forbearance) it was broadly unchanged
year-on-year at 70% (end-2019: 72%).

Halk's reported NPL ratio improved to 3.7% at end-2020 (end-2019:
5.2%), despite operating environment pressures, reflecting
forbearance on loan classification (150bp uplift), high nominal
loan growth (2020: 45%) and collections. Stage 2 loans (end-2020:
8.5% of loans, 37% restructured) were below peers, but this could
partly reflect differences in loan classification approach. Loan
restructurings and loan deferrals (end-2020: 9% of loans) will
likely have delayed problem loan recognition.

Historically, Halk's asset quality metrics have compared reasonably
well with peers and the sector, reflecting subsidised SME lending
(end-2020: 16% of loans), CGF lending (12%; government guarantee
typically up to a 7% NPL cap), housing loans (11%) and loans to
payroll and pensioner borrowers (3%).

Profitability is weak (2020: operating profit/risk-weighted assets
(RWA) ratio of 0.8%; sector: 1.9%) and has come under further
pressure, despite higher lending volumes due to tighter spreads.
This reflects Halk's above-sector-average lira funding and lending
at low, fixed interest rates (2020). The net interest margin was
3.6% in 2020 (sector: 4.7%) and will tighten further following the
lira rate rises given the bank's negative repricing gap.

Impairments weigh on profitability (2020: equal to 65% of
pre-impairment operating profit, or 1.4% of average gross loans),
although the cost of risk could fall in 2021. Halk also reported
trading losses equal to 30% of total operating income in 2020.

Capitalisation is weak, given Halk's risk profile, weak internal
capital generation and growth, resulting in a limited buffer to
absorb unexpected losses and potential lira depreciation. The
common equity Tier 1 (CET1)/RWAs and total capital ratio rose to
10.0% and 14.6%, respectively, at end-2020 (9.3% and 13.6%, net of
forbearance), which is the lowest among peers. Leverage is high
(end-2020: equity/assets ratio of 6.1%) and pre-impairment
operating profit (2020: equal to 2.2% of average loans) provides
only a moderate buffer to absorb credit losses through the income
statement.

Halk's capital position has been supported by injections from the
Turkish authorities - including TRY7 billion of core capital in
2020 and EUR900 million of additional Tier 1 in 2019 - and benefits
from low risk weightings on CGF loans, like peers. Further capital
support is likely to be needed to support the bank's growth or in
case of heightened as a buffer against market volatility, in
Fitch's view.

Halk has low and declining FC wholesale funding exposure (7% of
total funding; sector average 22%), reflecting its limited external
market access since 2017.

It relies on short-term but stable customer deposits (end-2020: 70%
of total funding; 12.5% market share), including from state-related
entities (5% of deposits). Deposit growth in 2020 (up 59%; sector:
35%) resulted in improvement in its loans/deposits ratio (end-2020:
107%). Halk has an above peer average share of lira funding,
although FC deposits are still high (44%).

FC liquidity comprises FC swaps with the Central Bank, FC reserves
held under the reserve option mechanism, unpledged government
securities, cash and foreign bank placements. It is sufficient to
service Halk's external debt due within a year in case of a market
shutdown. However, high FC deposits create additional liquidity
risks and material deposit outflows would test its FC liquidity.

Halk has an ESG relevance score of '5' for Governance Structure in
contrast to a typical score of '3' for comparable banks. This
reflects the elevated legal risk of a large fine, which drives the
RWN. It also considers potential government influence over the
board's effectiveness in the challenging Turkish operating
environment.

Halk has an ESG Relevance Score of '4' for Management Strategy (in
contrast to a typical Relevance Score of '3' for comparable banks),
due to potential government influence over its management strategy
in the challenging Turkish operating environment, which has a
negative impact on the credit profile, and is relevant to the
ratings in conjunction with other factors.

SUPPORT RATING (SR), SUPPORT RATING FLOOR (SRF), Long-Term
Local-Currency (LTLC) IDR

Halk's 'B' SRF reflects the high propensity of the Turkish
authorities to provide support given Halk's state ownership,
systemic importance, the record of capital support, policy role and
role in supporting the economy. However, the SRF is two notches
below Turkey's LTFC IDR, reflecting the sovereign's weak financial
flexibility to provide support in FC, in case of need, given its
weak external finances.

Halk's SR and SRF remain on RWN, reflecting (i) uncertainty about
the severity and nature of punitive measures, if any, to be taken
against the bank as a result of the US case; and (ii) geopolitical
tensions between Turkey and the US, which could escalate and raise
uncertainty about the authorities' ability and propensity to
provide sufficient and timely support in case a material fine or
other punitive measures are imposed on Halk.

The bank's LTLC IDR is equalised with the sovereign rating at 'BB-'
on the basis of support, reflecting a high sovereign propensity and
ability to provide support in LC.

NATIONAL RATINGS

The RWN on Halk's National Rating reflects the RWN on its LTLC IDR.
The affirmation of the National Rating reflects Fitch's view that
the bank's creditworthiness in local currency relative to other
Turkish issuers has not changed.

RATING SENSITIVITIES

VR, LTFC IDR AND SENIOR DEBT RATINGS

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

-- Halk's LTFC IDR and senior debt rating are primarily sensitive
    to a change in the VR, which could be downgraded due to
    further marked deterioration in the operating environment, if
    the fallout from the latest pandemic resurgence is more severe
    than expected, or if economic recovery is significantly weaker
    than expected.

-- Further weakening in capitalisation, if not offset by state
    support, would heighten pressure on the VR. A VR downgrade
    could occur if the common equity Tier 1 buffer falls below
    50bp over Halk's minimum requirement over a sustained period.

-- The VR could be downgraded in case of further increases in
    risk appetite, as evidenced by rapid, above-sector-average
    loan growth despite operating environment weakness, or
    strategic decisions that further increase pressure on
    underlying asset quality, profitability and capitalisation.

-- A greater than expected deterioration in asset quality,
    including due to a rise in restructured loans, could put
    pressure on the VR, as could a prolonged funding market
    closure or deposit instability that severely eroded Halk's FC
    liquidity buffer.

-- The VR could also be downgraded if as a result of the US
    investigations, it becomes subject to a fine or other punitive
    measure that materially weaken its solvency or negatively
    affect its Standalone Credit Profile. The case is ongoing and
    timing on the outcome is uncertain.

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

-- Upgrades of the bank's ratings are unlikely in the near-term
    given the RWN, the bank's high-risk appetite and weak
    capitalisation. The removal of the RWN is dependent upon
    increased certainty that the outcome of the investigations
    would not materially weaken Halk's capital, or other aspects
    of its VR.

SUPPORT RATING, SUPPORT RATING FLOOR, LTLC IDR

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

-- The bank's SR could be downgraded and the SRF revised down if
    Fitch concludes further stress in Turkey's external finances
    materially reduces the reliability of sovereign support for
    Halk in FC.

-- Halk's SR could be downgraded and its SRF revised down if the
    bank does not receive sufficient and timely support to offset
    the impact of any fine or other punitive measures imposed as a
    result of the US investigation.

-- A downward revision of the 'B' SRF would only result in a
    downgrade of its LTFC IDR and FC senior debt ratings if the
    bank's VR is also downgraded.

-- The LTLC IDR could be downgraded if Turkey's LTLC IDR is
    downgraded, Fitch believes the sovereign's propensity to
    provide support in LC has reduced or Fitch's view of the
    likelihood of intervention risk in the banking sector
    increases.

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

-- The RWN on Halk's SR and SRF could be removed if Fitch
    believes there is a clear commitment by the Turkish
    authorities to provide support to the bank to offset potential
    punitive actions. However, the latter would be assessed
    relative to the sovereign's ability to provide support in FC.

-- Positive rating action on the sovereign's LTLC IDR would
    likely lead to similar action on the bank's LTLC IDR.

NATIONAL RATINGS

The National Rating is sensitive to changes in the bank's LTLC IDR
and its creditworthiness relative to other Turkish issuers.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Financial Institutions and
Covered Bond issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of four notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Halk has ratings linked to the Turkish sovereign rating, given the
ratings either rely on or are sensitive to Fitch's assessment of
sovereign support or country risks.

ESG CONSIDERATIONS

Halk has an ESG Relevance Score of '5' for Governance Structure,
reflecting the elevated legal risk of a large fine, which drives
the RWN. It also considers potential government influence over the
board's effectiveness in the challenging Turkish operating
environment.

Halk has an ESG Relevance Score of '4' for Management Strategy (in
contrast to a typical Relevance Score of '3' for comparable banks),
due to potential government influence over its management strategy
in the challenging Turkish operating environment, which has a
negative impact on the credit profile, and is relevant to the
ratings in conjunction with other factors.

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

TURKIYE IS BANKASI: Fitch Affirms 'B+' LT IDR, Outlook Neg
----------------------------------------------------------
Fitch Ratings has affirmed Turkiye Is Bankasi A.S.'s (Isbank)
Long-Term Foreign-Currency Issuer Default Rating (LTFC IDR) at 'B+'
with a Negative Outlook and Viability Rating (VR) at 'b+'.

KEY RATING DRIVERS

LTFC IDR, VR, AND SENIOR DEBT RATING

Isbank's 'B+' LTFC IDR and senior debt ratings are driven by its
VR. The affirmation of the VR, despite heightened operating
environment pressures, reflects Isbank's generally reasonable
financial metrics, underpinned by its solid domestic franchise
(end-2020: 10% of sector assets), and significant capital and
liquidity buffers. However, the VR also reflects the bank's
concentration in the volatile and challenging Turkish operating
environment.

The recent replacement of the Turkish Central Bank (CBRT) governor
and ensuing damage to monetary policy credibility and investor
sentiment - as evidenced by renewed market volatility and lira
depreciation - increases funding and liquidity risks, as does high
and increased deposit dollarisation. Furthermore, ongoing
uncertainty over the pandemic, particularly given the latest
resurgence and lockdown restrictions, create downside risks both to
Fitch's GDP forecast of 6.7% in 2021 and banks' asset quality.
Operating environment pressure - a high importance factor for the
VR - and the implications for the bank's financial metrics, drives
the Negative Outlook on Isbank's LTFC IDR.

Isbank plans moderate loan growth of 11%-12% in 2021, primarily in
lira and to SME, commercial and retail customers. This follows
below sector-average, albeit still high, growth of 27% (nominal
basis; 12% FX-adjusted) in 2020, which only partly reflected the
Credit Guarantee Fund facility.

Asset quality risks are significant for Isbank, given exposure to
SMEs (end-2020: 20%) and unsecured retail borrowers (18%), which
are sensitive to GDP growth and unemployment, respectively, and the
pressured energy (16%) and construction (7%) sectors. Stage 2 loans
are also fairly high and lumpy (11% of loans; two-thirds
restructured).

A high share of FC lending (end-2020: 43%; consolidated basis) also
heightens risks, given that not all borrowers will be fully hedged
against lira depreciation. These risks are somewhat mitigated by
the fact that exposures are generally to large, diversified
corporates with FX revenues, or project finance loans carrying a
government feed-in tariff (energy loans) or revenue or debt
assumption guarantee.

Isbank's reported impaired loans (NPL) ratio improved to 5.4% at
end-2020, from 6.2% at end-2019, despite operating environment
pressures, and primarily reflecting forbearance on loan
classification (90bp uplift) and loan growth. Fitch expects NPLs to
rise moderately in 2021 given waning government stimulus and
regulatory forbearance (due by end-1H21) and maturing loan
deferrals (end-2020: 8% of loans; largely now repaying). However,
loan restructurings could delay the migration of loans to Stage 3.
Total reserve coverage of NPLs increased to 112% at end-2020
(end-2019: 81%), as Isbank frontloaded provisions due to the
pandemic, partly reflecting higher reserves coverage of Stage 2
(17.6%).

Fitch expects Isbank's performance to remain reasonable, despite
short-term margin pressure following the lira interest rate hikes
and loan impairment charges (LICs; 2020: equal to 53% of
pre-impairment operating profit). Performance will be underpinned
by Isbank's solid pre-impairment operating profit buffer (equal to
5.9% of average loans in 2020). Its operating profit/risk-weighted
assets (RWAs) ratio improved slightly to 2.0% despite the pandemic,
high LICs and additional free provisions (5% of operating income),
reflecting loan growth and low funding costs in 9M20.

Isbank's common equity Tier 1 (CET1)/RWAs ratio was 12.7% at
end-2020 (12.3% net of forbearance). The total capital ratio
(17.0%) was more comfortable and includes FC subordinated Tier 2
debt, providing a partial hedge against lira depreciation.
Capitalisation is supported by solid pre-impairment operating
profits and moderate reserves coverage, and represents a
significant buffer above regulatory minima to absorb unexpected
losses and potential lira depreciation.

Isbank's large deposit base (end-2020: 11% market share; 68% of
total funding) reflects its solid domestic franchise. Deposits are
short-term but stable and include a high share of demand deposits
(41%), supporting its below-peer cost of funding. However, the
share of FC deposits (65%) is above peers. Its consolidated
loans/deposits ratio (end-2020: 114%) slightly underperforms peers,
but this is due to Isbank's non-deposit-taking financial
subsidiaries.

High FC wholesale funding (end-2020: 25% of consolidated total
funding) increases refinancing risks given exposure to investor
sentiment amid market volatility. Isbank has retained reasonable
access to international funding markets, albeit at a higher cost
and has rolled over a high share of FC debt despite its sufficient
FC liquidity and muted FC loan demand.

At end-2020, Isbank's available FC liquidity - a large portion of
which placed with the CBRT - was sufficient to cover maturing FC
debt over 12 months (USD5.4 billion, bank-only basis; excluding
interbank deposits) plus about a quarter of FC deposits.
Nevertheless, FC liquidity could come under pressure from a
prolonged market closure or FC deposit instability.

LTLC IDR, NATIONAL RATING, SUPPORT RATING FLOOR (SRF), AND SUPPORT
RATING (SR)

Isbank's 'B-' SRF is at the level of the domestic systemically
important bank SRF for Turkish banks. It reflects its private
ownership and Fitch's view that support from the Turkish
authorities in FC cannot be relied upon given Turkey's weak net FX
reserves.

Isbank's 'B+' Long-term Local Currency (LTLC) IDR is driven by
state support, reflecting the sovereign's greater ability to
provide support in LC. The Stable Outlook mirrors that on the
sovereign.

The affirmation of Isbank's National Rating with a Stable Outlook
reflects Fitch's view that the bank's creditworthiness in LC
relative to other Turkish issuers is unchanged.

SUBORDINATED DEBT RATING

Isbank's 'B-' subordinated notes rating is notched twice from the
VR reflecting Fitch's expectation of poor recoveries in case of
default.

RATING SENSITIVITIES

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

-- The LTFC IDR and senior debt rating are primarily sensitive to
    a change in Isbank's VR, which could be downgraded due to
    further marked deterioration in the operating environment, if
    the fallout from the latest pandemic resurgence is more severe
    than expected, or if economic recovery is significantly weaker
    than expected.

-- In addition, a greater than expected deterioration in
    underlying asset quality, including due to a rise in
    restructured loans, could put pressure on the VR. A prolonged
    funding market closure or deposit instability that severely
    erodes Isbank's FC liquidity buffer could also lead to a VR
    downgrade.

-- Negative action on the sovereign rating, particularly if
    triggered by further weakening in Turkey's external finances,
    that leads to increased intervention risk, would likely be
    mirrored on the bank's LT IDRs.

-- The SR and SRF could be downgraded and revised lower,
    respectively, if Fitch concludes further stress in Turkey's
    external finances materially reduces the reliability of
    support for the bank in FC from the Turkish authorities.

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

-- Upside for the VR is constrained by Turkish operating
    environment risks. However, a reduction in operating
    environment risks, including lower market- or exchange rate-
    volatility and an improvement in investor sentiment, would
    reduce downside risks to the VR and could support a revision
    of the Outlook to Stable.

-- A record of resilient financial metrics, notwithstanding
    heightened operating environment risks, could also support a
    revision of the Outlook to Stable.

-- A significant improvement in Turkey's external finances,
    including a material strengthening in net FX reserves, could
    lead to an upward revision of Isbank's SRF and upgrade of the
    SR, although this is unlikely in the near-term.

SUBORDINATED DEBT

The subordinated debt rating is sensitive to a change in Isbank's
VR anchor rating.

NATIONAL RATING

The National Rating is sensitive to changes in Isbank's LTLC IDR
and its creditworthiness relative to other Turkish issuers.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Financial Institutions and
Covered Bond issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of four notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.

SUMMARY OF FINANCIAL ADJUSTMENTS

An adjustment has been made in Fitch's financial spreadsheets for
Isbank that has affected Fitch's core and complimentary metrics.
Fitch has taken a loan classified as a financial asset measured at
fair value through profit and loss in the bank's financial
statements and reclassified it under gross loans as Fitch believes
this is the most appropriate line in Fitch spreadsheets to reflect
this exposure.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

The bank's ratings are linked to the Turkish sovereign, given its
ratings are sensitive to Fitch's assessment of sovereign support
and country risks.

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.

TURKIYE VAKIFBANK: Fitch Affirms 'B+' LT IDR, Outlook Neg.
----------------------------------------------------------
Fitch Ratings has affirmed Turkiye Vakiflar Bankasi T.A.O.'s
(Vakifbank) Long-Term Foreign-Currency Issuer Default Rating (LTFC
IDR) at 'B+' with a Negative Outlook and Viability Rating (VR) at
'b+'.

KEY RATING DRIVERS

Vakifbank's LTFC IDR and senior debt ratings are driven by the
bank's standalone credit profile as expressed in the VR. The
affirmation of its ratings, despite operating-environment
pressures, reflects its solid franchise as Turkey's second largest
bank (end-2020: 11% of sector assets) and a reasonable funding and
liquidity profile. However, the VR also reflects the bank's
concentration in the volatile and challenging Turkish operating
environment.

The recent replacement of the Turkish Central Bank (CBRT) governor
and ensuing damage to monetary- policy credibility and investor
sentiment - as evidenced by renewed market volatility and lira
depreciation - increases funding and liquidity risks, as has high,
increased, deposit dollarisation. Furthermore, uncertainty over the
pandemic, particularly given the latest infection resurgence and
lockdown restrictions, create downside risks to Fitch's GDP
forecast of 6.7% in 2021 and banks' asset quality.

The VR also reflects Vakifbank's high risk appetite and rapid
growth in recent years, which is indicative of the bank's role in
supporting Turkey's economic policy. Both factors are of high
importance for the VR and the main drivers of the Negative Outlook
on the LTFC IDR.

Nominal loan growth (bank-only) was a rapid 54% (or 36% foreign
exchange (FX)-adjusted) in 2020 (sector: 35%), despite
operating-environment weakness, reflecting Vakifbank's state bank
mandate to support economic growth. Lending largely comprised
low-cost, fixed-rate local-currency loans in the form of
Treasury-backed Credit Guarantee Fund (CGF) loans, somewhat
mitigating credit risks, and, to a lesser extent, in housing loans
(rose 72%), Its FC lending (mainly to exporters) also rose (up 8%
in US dollars; sector: 4% contraction).

Vakifbank's reported impaired loans (NPLs) ratio improved to 4% at
end-2020 (end-2019: 5.9%), despite operating-environment pressures,
reflecting forbearance on loan classification (Fitch estimates 40bp
uplift), loan growth and collections. Fitch expects NPLs to rise
moderately in 2021 given waning government stimulus and forbearance
(expire at end-1H21), and maturing loan deferrals (end-2020: 5%
(solo basis); largely now repaying). However, loan restructurings
could delay the migration of problem loans to Stage 3.

Total reserve coverage of impaired loans increased to 123.5% at
end-2020 (end-2019: 90.7%) and compared well with peers' as
Vakifbank front-loaded provisions due to the pandemic and increased
reserve coverage of Stage 2 loans (12.6%; below peers').

Asset-quality risks are high due to loan seasoning, exposure to
SMEs (end-2020: 25% of loans) and unsecured retail borrowers (18%)
- which are sensitive to the growth environment and unemployment,
respectively - and the struggling transportation (11%),
construction (9%), energy (6%) and real-estate (4%) sectors. Stage
2 loans were fairly high at 9.5% of gross loans, of which a third
have been restructured.

FC lending (29%) - while lower than at private bank peers -
heightens risks given that not all borrowers are fully hedged
against lira depreciation. This is partly mitigated by exposures
being generally to large, diversified corporates with FX revenues,
or project-finance loans under government feed-in tariff (energy
loans) with revenue- or debt-assumption guarantees.

Vakifbank's common equity Tier-1 (CET1)/risk-weighted assets (RWAs)
rose to 11.3% at end-2020 (end-2019: 10.3%) despite growth,
reflecting low risk-weights on CGF loans (40bp uplift), a TRY7
billion capital increase from the authorities and zero dividends.
Pre-impairment operating profit (2020: equal to 3.6% of average
loans) provides an additional moderate buffer to absorb losses
through the income statement. Nevertheless, capitalisation
represents only a moderate buffer above regulatory minima to absorb
unexpected losses and potential further lira depreciation.

Vakifbank's profitability metrics are in line with peer group
averages. They remain sensitive to margin pressure following
lira-rate hikes, due to the bank's short-term negative repricing
gap and high share of fixed-rate loans; loan impairment charges
(LICs; 2020: at 47% of pre-impairment operating profit); and slower
loan growth. Its operating profit/RWAs improved to 1.8% in 2020
(sector: 1.9%) despite the pandemic's economic fallout, high LICs
and TRY220 million of free provisions.

Vakifbank has a large, stable and granular deposit base (end-2020:
62% of total funding; 11% market share), and an above peer-average
share of lira deposits, reflecting its solid franchise and
state-related deposits (20%), but FC deposits are still high (48%).
The bank's above-peer-average cost of funding reflects only
moderate demand deposits (20%) and a higher share of more expensive
lira.

Vakifbank's loans/deposits (end-2020: 114%) underperforms peers',
reflecting significant wholesale funding (38% of total funding;
over half in FC). This heightens refinancing risks given exposure
to investor sentiment amid market volatility but is partly
mitigated by Vakifbank's healthy funding diversification by
instrument and tenor.

At end-2020 available FC liquidity (a large portion of which
comprises FC swaps with the CBRT) was sufficient to cover maturing
FC wholesale debt over 12 months (USD4.7 billion, bank-only basis;
excluding interbank deposits). Nevertheless, FC liquidity could
come under pressure from a prolonged loss of market access or FC
deposit instability.

LONG-TERM LOCAL-CURRECNY (LTLC) IDR, NATIONAL RATING, SUPPORT
RATING FLOOR (SRF) AND SUPPORT RATING (SR)

Vakifbank's 'B' SRF is two notches below Turkey's LTFC IDR, despite
the bank's state ownership, systemic importance, role in supporting
government policy, state-related funding and the record of capital
support from the government. This reflects Fitch's view that
support from the authorities in FC is limited given the sovereign's
weak net FC reserves.

Vakifbank's 'BB-' LTLC IDR is equalised with the sovereign rating,
reflecting Turkey's greater ability to provide support in LC. The
Stable Outlook mirrors that on the sovereign.

The affirmation of the National Rating with a Stable Outlook
reflects Fitch's view that Vakifbank's creditworthiness in LC
relative to other Turkish issuers' is unchanged.

SUBORDINATED DEBT RATING

The subordinated notes rating of 'B-' is notched down twice from
Vakifbank's VR, reflecting Fitch's expectation of poor recoveries
in case of default.

ESG Factor: Vakifbank has an ESG Relevance Score of '4' for
Governance Structure and Management Strategy (in contrast to a
typical Relevance Score of '3' for comparable banks), due to
potential government influence over its board's strategies and
effectiveness in the challenging Turkish operating environment.

RATING SENSITIVITIES

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

-- Upside for the VR is constrained by Turkish operating
    environment risks. A reduction in operating- environment
    risks, including lower market- or exchange-rate volatility and
    an improvement in investor sentiment, would reduce downside
    risks to the VR and could support a revision of the Outlook to
    Stable. A reduction in Vakifbank's risk appetite would also
    reduce downside risks to the VR.

-- A record of improved, resilient financial metrics
    notwithstanding heightened operating-environment risks, could
    also support a revision of the Outlook to Stable.

-- A significant improvement in Turkey's external finances and
    net FX reserves position, could lead to upward revision of
    Vakifbank's SRF and upgrade of the SR, although this is
    unlikely in the near term.

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

-- The LTFC IDR and senior debt rating are primarily sensitive to
    a change in Vakifbank's VR, which could be downgraded due to
    further marked deterioration in the operating environment, if
    the fallout from the latest pandemic resurgence is more severe
    than expected, or if economic recovery is significantly weaker
    than expected.

-- The VR could be downgraded in case of further increases in
    risk appetite, as reflected in rapid, above-sector-average
    loan growth despite operating-environment weakness, or
    strategic decisions that increase pressure on underlying asset
    quality, profitability and capitalisation.

-- Greater-than-expected deterioration in asset quality,
    including due to a rise in restructured loans, could put
    pressure on the VR, as could a prolonged funding market
    closure or deposit instability that severely erodes
    Vakifbank's FC liquidity buffer.

-- A sovereign downgrade, particularly if triggered by further
    weakening in Turkey's external finances that leads to an
    increase in intervention risk, would likely be mirrored on
    Vakifbank's LT IDRs.

-- Vakifbank's SR and SRF could be downgraded and revised lower,
    respectively, if Fitch concludes further stress in Turkey's
    external finances materially reduces the reliability of
    support for the bank in FC from the Turkish authorities.

SUBORDINATED DEBT

The subordinated debt rating is sensitive to a change in
Vakifbank's VR.

NATIONAL RATING

The National Rating is sensitive to changes in the LTLC IDR and in
the bank's relative creditworthiness to other Turkish issuers'.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Financial Institutions and
Covered Bond issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of four notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

The bank's ratings are linked to the Turkish sovereign's.

ESG CONSIDERATIONS

Vakifbank has an ESG Relevance Score of '4' for Governance
Structure and Management Strategy (in contrast to a typical
Relevance Score of '3' for comparable banks), due to potential
government influence over its board's strategies and effectiveness
in the challenging Turkish operating environment. This has a
negative impact on the credit profile, and is relevant to the
ratings in conjunction with other factors.

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

YAPI VE KREDI: Fitch Affirms 'B+' LT IDR, Outlook Neg.
------------------------------------------------------
Fitch Ratings has affirmed Yapi ve Kredi Bankasi A.S.'s (YKB)
Long-Term Foreign-Currency Issuer Default Rating (LTFC IDR) at 'B+'
with a Negative Outlook and Viability Rating (VR) at 'b+'.

KEY RATING DRIVERS

LTFC IDR, VR, SENIOR DEBT RATING AND NATIONAL RATING

YKB's 'B+' LTFC IDR and senior debt ratings are driven by its VR.
The affirmation of the VR, despite heightened operating environment
pressures, reflects the bank's generally reasonable financial
metrics, underpinned by its solid domestic franchise (end-2020: 8%
of sector assets), and significant capital and liquidity buffers.
However, the VR also reflects the bank's concentration in the
volatile and challenging Turkish operating environment.

The recent replacement of the Turkish Central Bank (CBRT) governor
and ensuing damage to monetary policy credibility and investor
sentiment - as evidenced by renewed market volatility and lira
depreciation - increases funding and liquidity risks, as does high
increased deposit dollarisation. Furthermore, ongoing uncertainty
over the pandemic, particularly given the latest resurgence and
lockdown restrictions, create downside risks both to Fitch's GDP
forecast of 6.7% in 2021 and banks' asset quality. Operating
environment pressure, and the implications for the bank's financial
metrics, drives the Negative Outlook on YKB's LTFC IDR and is a
high importance factor for the VR.

YKB's loan growth (end-2020: 21% nominal; 8% FX-adjusted) has
slowed in recent years and was below the sector and peer averages
in 2020, although it was still high. Growth was largely outside of
the framework of the Treasury guaranteed Credit Guarantee Fund
while the bank deleveraged FC lending (down 4% in US dollar terms).
YKB targets high-teens loan growth in 2021, driven by small-ticket
local currency lending.

Asset quality risks are significant for YKB, given exposure to
unsecured retail borrowers (19%), which are sensitive to rising
unemployment, and the pressured energy (14%), construction (10%)
and tourism (3%) sectors. Stage 2 loans are also fairly high and
lumpy (15% of loans, of which about half are restructured).

A high share of FC lending (37% at end-2020; consolidated basis)
also heightens risks, given that not all borrowers will be fully
hedged against lira depreciation. These risks are somewhat
mitigated by the fact that exposures are generally to large,
diversified corporates with FX revenues, or project finance loans
carrying a government feed-in tariff (energy loans) or revenue or
debt assumption guarantee.

YKB's reported impaired loans (NPL) ratio improved to 6.2% at
end-2020, from 7.4% at end-2019, despite operating environment
pressures, primarily reflecting forbearance on loan classification
(40bp uplift; Fitch estimate), collections, write-offs and loan
growth. Fitch expects NPLs to rise moderately in 2021, given waning
government stimulus and regulatory forbearance (due to expire by
end-1H21) and maturing loan deferrals (end-2020: equal to a
below-peer-average 3% of loans; largely now repaying), although
loan restructurings could delay the recognition of problematic
loans.

Total reserve coverage of NPLs increased to 126% at end-2020
(end-2019: 84%) as the bank frontloaded pandemic-related provisions
and increased Stage 2 reserve coverage (17.4%). YKB has the highest
total provisioning/average gross loans ratio of the peer group
(7.8% vs, 5.5% for peers).

Fitch expects YKB's performance to remain reasonable despite
short-term margin pressure - following the lira interest rate hikes
and given the bank's negative repricing gap - and high loan
impairment charges (LICs; 2020: equal to 57% of pre-impairment
operating profit). Its operating profit/risk-weighted assets (RWAs)
ratio improved to 1.9% in 2020 despite the pandemic, reflecting
better margins supported by low funding costs in 2020, growth and
good cost control.

Capitalisation is supported by solid pre-impairment operating
profit (2020: equal to 5.4% of gross loans) and moderate reserves
coverage. YKB's Common Equity Tier 1 (CET1)/RWAs ratio of 12.8% at
end-2020 (or 12.4% net of forbearance) represents a significant
buffer above the regulatory minimum to absorb unexpected losses and
lira depreciation. In addition, the bank plans to adopt the
Internal Ratings Based approach from June 2021. This will provide
an uplift of about 80bp to the CET1 ratio (Tier-1 about 90bp and
total CAR about 60bp). Its total capital ratio was higher at 17.2%
(16.7%) due to FC subordinated Tier 2 debt and additional Tier-1,
which provide a partial hedge against lira depreciation.

YKB has a large, granular and stable (but short-term) deposit base
(end-2020: 7% market share; 65% of total funding), and high demand
deposits (36%) support its below sector average cost of funding.
However, its loans/deposits ratio underperforms peers (122%). FC
deposits are significant (60%) and above peer and sector averages.

High FC wholesale funding (end-2020: 24% of total consolidated
funding) increases refinancing risks, given exposure to investor
sentiment amid volatile market conditions. YKB has retained
reasonable access to international funding markets, rolling over a
high share of FC debt.

At end-2020, YKB's available FC liquidity - much of which will
likely be placed with the CBRT - was sufficient to cover maturing
FC wholesale debt over 12 months (USD3.7 billion on a bank-only
basis; excluding interbank deposits). Nevertheless, FC liquidity
could come under pressure from a prolonged loss of market access or
FC deposit instability.

The affirmation of YKB's National Rating with a Stable Outlook
reflects Fitch's view that the bank's creditworthiness in local
currency relative to other Turkish issuers is unchanged.

LTLC IDR, SUPPORT RATING FLOOR (SRF) AND SUPPORT RATING (SR)

YKB's 'B-' SRF is at the level of the domestic systemically
important bank SRF for Turkish banks, reflecting it private
ownership and Fitch's view that support from the Turkish
authorities in FC cannot be relied upon given the sovereign's weak
net FX reserves.

YKB's 'B+' LT Local-Currency (LC) IDR is driven by potential state
support, reflecting the sovereign's greater ability to provide
support in local currency. The Stable Outlook mirrors that on the
sovereign.

SUBORDINATED DEBT RATING

YKB's 'B-' subordinated notes rating is notched twice from the VR,
reflecting Fitch's expectation of poor recoveries in case of
default.

RATING SENSITIVITIES

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

-- Upside for the VR is constrained by Turkish operating
    environment risks. However, a reduction in operating
    environment risks, including lower market- or exchange rate-
    volatility and an improvement in investor sentiment, would
    reduce downside risks to the VR and could support a revision
    of the Outlook to Stable.

-- A record of resilient financial metrics, notwithstanding
    heightened operating environment risks, could also support a
    revision of the Outlook to Stable.

-- A significant improvement in Turkey's external finances,
    including materially higher net FX reserves, could lead to an
    upward revision of YKB's SRF and upgrade of the SR, although
    this is unlikely in the near term.

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

-- The LTFC IDR and senior debt rating are primarily sensitive to
    a change in YKB's VR, which could be downgraded due to further
    marked deterioration in the operating environment, if the
    fallout from the latest pandemic resurgence is more severe
    than expected, or if economic recovery is significantly weaker
    than expected.

-- In addition, a greater than expected deterioration of YKB's
    underlying asset quality could put pressure on the VR,
    including due to a rise in restructured loans. A prolonged
    funding market closure or deposit instability that severely
    eroded the bank's FC liquidity buffer could also lead to a VR
    downgrade.

-- Negative action on the sovereign rating, particularly if
    triggered by further weakening in Turkey's external finances,
    that leads to increased intervention risk, would likely be
    mirrored on the bank's LT IDRs.

-- The SR and SRF could be downgraded and revised down,
    respectively, if Fitch concludes further stress in Turkey's
    external finances materially reduces the reliability of
    support for the bank in FC from the Turkish authorities.

SUBORDINATED DEBT

The subordinated debt rating is sensitive to a change in YKB's VR
anchor rating.

NATIONAL RATING

The National Rating is sensitive to changes in YKB's LTLC IDR and
its creditworthiness relative to other Turkish issuers.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Financial Institutions and
Covered Bond issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of four notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

YKB has ratings linked to the Turkish sovereign rating, given the
ratings either rely on or are sensitive to Fitch's assessment of
sovereign support or country risks.

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
===========================

DEBENHAMS PLC: Confirms Final Closure Dates for Remaining Stores
----------------------------------------------------------------
Elias Jahshan at Retail Gazette reports that Debenhams has
announced that all of its remaining stores will shut down for good
on either May 12 or May 15.

On April 12, Debenhams reopened 97 stores in England and Wales to
complete its final closing down sale as part of its liquidation
process, and said it would continue to trade for a limited number
of weeks until the stock in the stores is fully cleared, Retail
Gazette relates.

Having already announced 52 store closures up to Saturday, May 8,
the collapsed department store chain has confirmed its final 49
store closures, Retail Gazette notes.

As part of Debenhams' stock clearance, shoppers will be able find
discounts across all stores, with up to 80 per cent off all fashion
and home and up to 70% off beauty and fragrance while stocks last,
Retail Gazette states.

Debenhams went into liquidation in December, after an
administration process that started in April last year failed to
secure any buyers to save the department store chain, Retail
Gazette recounts.


FOOTBALL INDEX: Issues Statement on Distribution of Monies Owed
---------------------------------------------------------------
Peter Lynch at Gambling Insider reports that Football Index has
released a statement regarding the distribution of the money that
may still be owed to participants, two months after the operator
entered administration.

The company suspended business in March 2020 following a huge
exodus of customers and investors, as a result of its decision to
cut dividends on players from 14p to 3p, Gambling Insider recounts.
Many customers lost thousands of pounds overnight as a result,
Gambling Insider notes.

The group then went into administration and had its licence
suspended by the Gambling Commission, before the suspension of its
Betting and Gaming Council membership, Gambling Insider relates.

Richard Toone, Adrian Hyde and Adrian Rabet from Begbies Traynor
LLP were then appointed joint administrators of BetIndex Ltd --
which trades as Football Index -- to conduct insolvency
proceedings, Gambling Insider discloses.

"On April 30, 2021, the Administrators of BetIndex Limited issued
an application for the determination of the appropriate
distribution of the monies held in the Football Index Player
Protection Account, and the identification of the customer classes
who may be entitled to participate in those funds," Gambling
Insider quotes a statement from Football Index as saying.

"This is the first step towards the distribution of cash balances
to customers of the Football Index platform.  The hearing will take
place at 11:30 a.m. on Monday, May 10, 2021."


LIBERTY STEEL: Metals Group Misses Tata Acquisition Payments
------------------------------------------------------------
Kaye Wiggins and Sylvia Pfeifer at The Financial Times report that
Sanjeev Gupta's metals group has struggled for more than a year to
afford payments to Tata Steel tied to a GBP100 million acquisition
it made from Britain's largest steelmaker, according to court
documents.

According to the FT, Mr. Gupta's Liberty Speciality Steels, which
bought Tata's speciality steel business in 2017, has been asking
for "forbearance" to meet the cost of the deal, according to a
lawsuit filed by Tata in London's High Court.

Mr. Gupta's company only paid GBP6.2 million in cash upfront for
the Tata business, the 2018 accounts for Liberty Speciality Steels
showed, with further sums due in "deferred" cash payments and
additional financing via preference shares, an instrument
considered halfway between debt and traditional equity, the FT
discloses.

The court documents revealed Mr. Gupta's group defaulted on a
GBP12.5 million deferred payment due in May 2020 and instead
offered incremental GBP1 million and GBP1.5 million payments
towards the purchase, the FT notes.

The filings offer a glimpse into the frantic attempts by several
executives to reassure Tata that payments would be made during a
turbulent 12 months spanning the outbreak of the pandemic and the
collapse of Mr. Gupta's main lender, Greensill Capital, the FT
states.

According to the FT, V Ashok, the chief financial officer of GFG
Alliance, a loose collection of Gupta-family owned businesses,
emailed Kaushik De, finance director at Tata Steel Europe, twice in
August 2020 offering smaller payments and asking for "support and
understanding", according to the lawsuit.

The details of the correspondence emerged in the claim by Tata,
which is suing three of Gupta's companies -- Liberty Specialty
Steels, Liberty House Group and Speciality Steel UK -- over the
partial payment of the GBP12.5 million due as part of the purchase
of its UK speciality steel business four years ago, the FT relays.


Tata said in its court filing Liberty made three separate GBP1
million payments in July 2020, and two further payments of GBP1.5
million each in September and October that year towards the GBP12.5
million, the FT notes.  Tata, the FT says, is suing for GBP7.9
million, which includes the remainder plus interest and GBP1.3
million for insurance liabilities.

In the suit, dated April 19 but only made public on May 5, Tata
said a fourth instalment of GBP10 million was due by May this year
and would be added to the lawsuit, with interest, if it were not
paid, the FT recounts.

Tata acknowledged the particulars of its claim but said it would
"not be making any further comment on them", the FT relays.

The court case adds to the pressure on Gupta's empire which has
been rocked by the failure of Greensill, the FT notes.


VIRGIN ACTIVE: Awaits Court Ruling on Restructuring Plan
--------------------------------------------------------
Mark Kleinman at Sky News reports that thousands of health and
fitness jobs are hanging in the balance as Virgin Active awaits a
ruling that will determine whether it collapses into insolvency.

Sky News understands that the gym chain will discover as soon as
this week whether a restructuring plan that is facing opposition
from landlords will receive court approval.

According to Sky News, sources said that if the so-called Part 26A
proposal is blocked, Virgin Active could fall into administration
within days.

Such a move would potentially put more than 2,000 jobs at risk just
as the health and fitness sector tries to return to its feet after
a year of turmoil, Sky News notes.

Brait, Virgin Active's majority shareholder, has signalled that it
will not inject more capital into the business unless the
restructuring is approved, Sky News relates.

Virgin Active has seen its roughly 40 UK sites forced to close for
most of the last year, exacerbating the financial squeeze
confronting it, Sky News relays.

It wants to implement its refinancing under Part 26A of the
Companies Act, meaning that a creditor group such as its landlords
faces being "crammed down" -- or forced to accept the terms even if
they vote against the scheme, Sky News discloses.

Launched in Britain in 1999, the group now has 236 clubs in eight
countries, including Australia, Botswana, Italy and South Africa.

At the end of 2019, it had more than one million members
worldwide.

The pandemic's impact has been severe, however, resulting in
revenues halving last year and a loss before interest, tax,
depreciation and amortisation of GBP42 million, Sky News states.

Virgin Active also saw 100,000 members leave during the year, Sky
News recounts.

Under its proposals, its shareholders would inject GBP45 million of
cash, alongside roughly GBP17 million of royalty fee deferrals,
according to Sky News.

Deloitte, the accountancy firm, is overseeing the restructuring
plan, Sky News notes.


WIGAN ATHLETIC: Administrators File Last Report in Court
--------------------------------------------------------
Jon Robinson at BusinessLive reports that the firm which looked
after the administration and sale of Wigan Athletic has warned that
The Latics will not be the last football club to follow the same
path as it starts to make its final moves in the long drawn out
saga.

Begbies Traynor, the administrators of Wigan Athletic AFC Ltd, has
filed its last report in court and with Companies House, a process
which begins the move of the company into liquidation, BusinessLive
relates.

It comes after the League One club's deal to be taken over by a
consortium led by Bahraini businessman Abdulrahman Al-Jasmi was
completed at the end of March, BusinessLive notes.

The club, which have just retained their place in the league for
next season, first entered administration in July 2020,
BusinessLive recounts.

The sale to Phoenix 2021 Ltd, owned by Al-Jasmi, was completed
after a deal with a Spanish consortium collapsed at the start of
January, after it was initially blocked by the EFL, BusinessLive
states.

According to BusinessLive, in the newly published report, Begbies
Traynor has set out the key objectives it achieved since July 1
2020, confirmed that Wigan Athletic AFC Ltd will now enter
liquidation and the process of paying creditors will begin.

The firm, as cited by BusinessLive, said it had secured the
survival of the club, fulfilled the fixtures of the 2019/20 season
and avoided a 15-point deduction for not meeting specified
financial requirements of the EFL.




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

[*] BOOK REVIEW: Hospitals, Health and People
---------------------------------------------
Author: Albert W. Snoke, M.D.
Publisher: Beard Books
Softcover: 232 pages
List Price: $34.95
Order your personal copy today at
http://www.beardbooks.com/beardbooks/hospitals_health_and_people.html

Hospitals, Health and People is an interesting and very readable
account of the career of a hospital administrator and physician
from the 1930's through the 1980's, the formative years of today's
health care system. Although much has changed in hospital
administration and health care since the book was first published
in 1987, Dr. Snoke's discussion of the evolution of the modern
hospital provides a unique and very valuable perspective for
readers who wish to better understand the forces at work in our
current health care system.

The first half of Hospitals, Health and People is devoted to the
functional parts of the hospital system, as observed by Dr. Snoke
between the late 1930's through 1969, when he served first as
assistant director of the Strong Memorial Hospital in Rochester,
New York, and then as the director of the Grace-New Haven Hospital
in Connecticut. In these first chapters, Dr. Snoke examines the
evolution and institutionalization of a number of aspects of the
hospital system, including the financial and community
responsibilities of the hospital administrator, education and
training in hospital administration, the role of the governing
board of a hospital, the dynamics between the hospital
administrator and the medical staff, and the unique role of the
teaching hospital.

The importance of Hospitals, Health and People for today's readers
is due in large part to the author's pivotal role in creating the
modern-day hospital. Dr. Snoke and others in similar positions
played a large part in advocating or forcing change in our hospital
system, particularly in recognizing the importance of the nursing
profession and the contributions of non-physician professionals,
such as psychologists, hearing and speech specialists, and social
workers, to the overall care of the patient. Throughout the first
chapters, there are also many observations on the factors that are
contributing to today's cost of care. Malpractice is just one
example. According to Dr. Snoke, "malpractice premiums were
negligible in the 1950's and 1960's. In 1970, Yale-New Haven's
annual malpractice premiums had mounted to about $150,000." By the
time of the first publication of the book, the hospital's premiums
were costing about $10 million a year.

In the second half of Hospitals, Health and People, Dr. Snoke
addresses the national health care system as we've come to know it,
including insurance and cost containment; the role of the
government in health care; health care for the elderly; home health
care; and the changing role of ethics in health care. It is
particularly interesting to note the role that Senator Wilbur Mills
from Arkansas played in the allocation of costs of hospital-based
specialty components under Part B rather than Part A of the
Medicare bill. Dr. Snoke comments: "This was considered a great
victory by the hospital-based specialists. I was disappointed
because I knew it would cause confusion in working relationships
between hospitals and specialists and among patients covered by
Medicare. I was also concerned about potential cost increases. My
fears were realized. Not only have health costs increased in
certain areas more than anticipated, but confusion is rampant among
the elderly patients and their families, as well as in hospital
business offices and among physicians' secretaries." This aspect of
Medicare caused such confusion that Congress amended Medicare in
1967 to provide that the professional components of radiological
and pathological in-hospital services be reimbursed as if they were
hospital services under Part A rather than part of the co-payment
provisions of Part B.

At the start of his book, Dr. Snoke refers to a small statue,
Discharged Cured, which was given to him in the late 1940's by a
fellow physician, Dr. Jack Masur. Dr. Snoke explains the
significance the statue held for him throughout his professional
career by quoting from an article by Dr. Masur: "The whole question
of the responsibility of the physician, of the hospital, of the
health agency, brings vividly to mind a small statue which I saw a
great many years ago.it is a pathetic little figure of a man, coat
collar turned up and shoulders hunched against the chill winds,
clutching his belongings in a paper bag-shaking, tremulous,
discouraged. He's clearly unfit for work-no employer would dare to
take a chance on hiring him. You know that he will need much more
help before he can face the world with shoulders back and
confidence in himself. The statuette epitomizes the task of medical
rehabilitation: to bridge the gap between the sick and a job."

It is clear that Dr. Snoke devoted his life to exactly that
purpose. Although there is much to criticize in our current
healthcare system, the wellness concept that we expect and accept
today as part of our medical care was almost nonexistent when Dr.
Snoke began his career in the 1930's. Throughout his 50 years in
hospital administration, Dr. Snoke frequently had to focus on the
big picture and the bottom line. He never forgot the importance of
Discharged Cured, however, and his book provides us with a great
appreciation of how compassionate administrators such as Dr. Snoke
have contributed to the state of patient care today.

Albert Waldo Snoke was director of the Grace-New Haven Hospital in
New Haven, Connecticut from 1946 until 1969. In New Haven, Dr.
Snoke also taught hospital administration at Yale University and
oversaw the development of the Yale-New Haven Hospital, serving as
its executive director from 1965-1968. From 1969-1973, Dr. Snoke
worked in Illinois as coordinator of health services in the Office
of the Governor and later as acting executive director of the
Illinois Comprehensive State Health Planning Agency. Dr. Snoke died
in April 1988.



                           *********


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 2021.  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.


                * * * End of Transmission * * *