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       T R O U B L E D   C O M P A N Y   R E P O R T E R

                          E U R O P E

          Thursday, May 27, 2021, Vol. 22, No. 100

                           Headlines



A L B A N I A

ALBANIA: Moody's Affirms 'B1' LongTerm Issuer Ratings


G E R M A N Y

NIDDA BONDCO: Fitch Affirms 'B' LongTerm IDR, Outlook Stable


I R E L A N D

AURIUM CLO VI: Moody's Assigns B3 Rating to EUR14.6M Class F Notes
BLACKROCK EURO IX: Fitch Affirms B- Rating on Class F Notes
CARLYLE GLOBAL 2014-2: Fitch Assigns Final B- Rating on E-R Notes
CARLYLE GLOBAL 2014-2: Moody's Affirms B2 Rating on Cl. E-R Notes
TORO EUROPEAN 2: Fitch Affirms B- Rating on Class F-R Notes



I T A L Y

GOLDEN GOOSE: Fitch Assigns Final 'B+' Rating on Sr. Secured Notes


N O R W A Y

NORWEGIAN AIR: Emerges From Bankruptcy Protection


R U S S I A

FAR-EASTERN SHIPPING: Fitch Raises LT IDRs to 'B+', Outlook Stable


S W I T Z E R L A N D

SYNGENTA AG: Moody's Affirms Ba2 CFR, Outlook Stable


U K R A I N E

DNIPRO CITY: Fitch Assigns 'B' LongTerm IDRs, Outlook Stable
KHARKOV CITY: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable
KRYVYI RIH CITY: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable
KYIV CITY: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable
LVIV CITY: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable

MARIUPOL CITY: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable
MYKOLAIV CITY: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable
ODESA CITY: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable
ZAPORIZHZHIA CITY: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable


U N I T E D   K I N G D O M

FOOTBALL INDEX: Decision on Player Protection Fund Postponed
HOTTER SHOES: To Float on AIM Market in 2021 Fourth Quarter
LENDY: Administration Enters Into Third Year
LOCH FYNE: Greene King Secures Approval for Business to Enter CVA
N-SEA: On Brink of Administration, 25 Jobs at Risk

RALPH & RUSSO: Future Uncertain After Potential Bidder Drops Out
SEGOVIAN EURO CLO 2-2016: Fitch Affirms B- Rating on Class F Notes
SPIRIT ISSUER: Fitch Alters Outlook on A5 Notes Rating to Stable

                           - - - - -


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A L B A N I A
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ALBANIA: Moody's Affirms 'B1' LongTerm Issuer Ratings
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Moody's Investors Service has affirmed the Government of Albania's
B1 long-term foreign and local currency issuer ratings and the B1
foreign currency senior unsecured debt ratings. The outlook remains
stable.

The decision to affirm the ratings balances the following key
rating factors:

(1) Albania's resilience to the coronavirus shock despite narrow
economic base and persisting structural challenges;

(2) High public debt burden balanced against Moody's expectations
that fiscal consolidation will resume post-pandemic and that fiscal
risks will remain contained;

(3) Albania's susceptibility to event risk remains moderate, mainly
driven by banking sector risk.

The stable outlook reflects Moody's view that the B1 rating
appropriately balances the risks to Albania's credit profile.
Moody's anticipates that economic growth will return to its
pre-pandemic rate in the medium term, while the government's debt
burden, after having increased significantly in 2020, will resume
its downward trajectory. Moody's also expects Albania's banking
sector and government liquidity risks to remain contained. The
stable outlook is also supported by Moody's anticipation of policy
continuity, in particular in the context of the reforms under the
EU accession process, and moderate external imbalances.

The local currency country ceiling remains unchanged at Baa3. The
four-notch gap with the sovereign rating reflects predictable
institutions, a contained government footprint in the economy and
financial system, manageable political risk and moderate external
imbalances. The foreign currency country ceiling remains unchanged
at Ba2. The two-notch gap to the local currency ceiling reflects
relatively weak, albeit improving, policy effectiveness and
moderate external indebtedness.

RATINGS RATIONALE

FIRST DRIVER: ALBANIA'S ECONOMIC RESILIENCE TO THE CORONAVIRUS
SHOCK DESPITE NARROW ECONOMIC BASE AND PERSISTING STRUCTURAL
CHALLENGES

The first driver of the rating action relates to Albania's relative
economic resilience to the coronavirus shock despite its narrow
economic base and persisting structural challenges. Albania has
been significantly affected by the coronavirus pandemic, as the
shock came at the time in which the economic momentum was already
weakening after the earthquake in late 2019 and was exacerbated by
the significant dependence on the tourism sector (accounting for
about 9% of GDP pre-pandemic).

Nevertheless, macroeconomic stability was preserved and the
contraction was milder than expected, with real GDP declining by
3.3% in 2020, also compared with regional peers, as the decline in
manufacturing and services was mitigated by the solid performance
of agriculture (which accounts for slightly less than 20% of GDP),
electricity generation and construction sectors while the decline
in tourism was in part mitigated by domestic tourism and tourists
coming from neighboring countries.

Moody's expects that economic growth will resume in 2021, with real
GDP expanding by 4.8%, driven by the recovery in domestic demand
supported by accommodative monetary and fiscal policy, and large
public investment, in part reflecting continuing post-earthquake
reconstruction efforts. Albania's medium-term growth outlook
remains favorable, with potential growth of around 3-3.5%,
supported by the enhancement of institutions and closer economic
integration with the EU under the accession process.

Nevertheless, while progress in the areas of rule of law has
improved the business environment, Albania's economic strength
remains constrained by structural challenges that include weak
property rights and infrastructure, skill shortages and large
informality, while the narrowly diversified export base and
exposure to environmental risk continue to expose Albania to
domestic and external shocks.

SECOND DRIVER: HIGH PUBLIC DEBT BURDEN BALANCED AGAINST MOODY'S
EXPECTATIONS THAT FISCAL CONSOLIDATION WILL RESUME POST-PANDEMIC
AND THAT FISCAL RISKS WILL REMAIN CONTAINED

The second driver is underpinned by Moody's expectations that
Albania's debt metrics, despite having deteriorated significantly
due to the coronavirus shock, will improve in the medium term as
gradual fiscal consolidation resumes post-pandemic after the
reconstruction efforts approach completion. The economic
contraction, the decline in revenue and the response measures due
to the effect of the pandemic led to a widening of the fiscal
deficit to 6.9% of GDP in 2020 from 1.9% of GDP in 2019.
Concurrently, the general government debt to GDP increased to 77.6%
of GDP in 2020 from 67.3% in 2019, which exceeds the median of
B-rated peers of 59.3% of GDP as of 2020. Debt affordability has
deteriorated slightly in 2020, with interest payments absorbing
about 8% of revenue in 2020 compared with 7.6% in 2019, still in
line with a median of 8.3% for B-rated peers.

The 2020 fiscal deficit was financed with a mix of higher domestic
issuances and concessional and non-concessional external borrowing,
including the IMF emergency support and the successful issuance of
a Eurobond. Moody's projects that the fiscal deficit will remain
above 6% also in 2021, mainly driven by significant capital
expenditure, in part due to the post-earthquake reconstruction.

Albania entered the coronavirus crisis with a stronger fiscal
framework thanks to the improvements implemented in recent years.
Albania's fiscal deficit had been contained pre-pandemic, averaging
1.8% of GDP over the period 2016-2019 which contributed to put the
debt on a declining trajectory and provided some fiscal room to
respond to the shock. While the policy response to the pandemic was
relatively small compared to some regional peers, it was timely and
well-targeted. The authorities activated the escape clause to the
fiscal rules in 2020 due to the earthquake and the pandemic, but in
2021 intend to comply with the provision of the Organic Budget Law
(OBL) according to which the debt should decrease every year until
reaching 45% of GDP. The authorities have also signaled their
commitment to fiscal consolidation in July 2020 by approving
further amendments to the OBL that introduce a requirement for a
primary balance of at least zero from 2023 onward.

Moody's expects fiscal consolidation to resume in 2022, as the
effect of the pandemic fades and the reconstruction ends, with the
deficit narrowing to 2.9% of GDP and the public debt to GDP ratio
returning to a gradual downward trend. While the implementation of
the medium-term revenue strategy was postponed due to the pandemic
and the electoral cycle, improving revenue mobilization remains key
in order to accommodate the large capital expenditure foreseen over
the medium term. Nevertheless, contingent liabilities from
public-private-partnerships (PPPs) and SOEs continue to pose a risk
to the fiscal consolidation path.

THIRD DRIVER: SUSCEPTIBILITY TO EVENT RISK REMAINS MODERATE, MAINLY
DRIVEN BY BANKING SECTOR RISK

The third driver is the country's susceptibility to banking system
risk and, to a lesser extent, risks stemming from the government's
large financing needs and reliance on domestic banks. The banking
system, which is mostly foreign-owned, is liquid and mainly funded
by domestic deposits. Capitalization levels are high overall,
although asset quality remains weak compared to peers. Financial
euroization is significant driving elevated asset quality and
funding risks, with about half of loans and deposits denominated in
foreign currency, predominantly in euro, although this proportion
has gradually declined since the adoption of the "de-euroization"
package in 2018. The non-performing loans ratio has remained
broadly stable at around 8% up to February 2021, after having more
than halved in recent years because of credit restructurings and
mandatory write-offs. However, the effects of the pandemic on the
banking sector have not yet fully crystalized and asset quality is
expected to deteriorate, although not to the extent of fully
reversing the improvement achieved in the past few years.

Moody's expects gross borrowing requirements to remain large in
2021, exceeding 25% of GDP, well above the B-rated median of 14% of
GDP and the level of regional peers. Over recent years the
structure of the government domestic debt, which accounts for about
half of the total, has improved due to the lengthening of maturity,
but short-term debt continues to account for more than 30% of the
total as of end-2020. Furthermore, domestic debt remains
predominantly held by commercial banks. Nevertheless, Moody's
expects that continuing support from the international
institutions, including the EU macro-financial assistance this
year, will mitigate liquidity risk.

External vulnerability risk has also remained contained despite the
impact of the pandemic. After having widened to about 8.9% of GDP
in 2020, due to the significant decrease in tourism exports and the
fall in remittances, Moody's projects the current account deficit
to narrow to 7.7% of GDP in 2021, in line with the pre-pandemic
level, remaining mostly covered by foreign direct investment
inflows. Foreign exchange reserves are adequate, covering around
eight months of imports of goods and services.

Finally, while Albania's susceptibility to political risk will
continue to reflect the country's polarized domestic landscape,
Moody's expects policymaking continuity to support the
implementation of reforms under the EU accession process.

RATIONALE FOR THE STABLE OUTLOOK

The decision to maintain the stable outlook reflects the risks to
Albania's credit profile being broadly balanced. The stable outlook
balances Moody's expectations that Albania's credit metrics will
remain commensurate to B1 rating as the damage of the pandemic on
economic and fiscal strength will be repaired in the medium term.
The stable outlook also reflects Moody's expectation that
susceptibility to event risks will remain moderate due to contained
risks to financial stability as the banking system remains broadly
resilient to the expected erosion of asset quality, provided the
economy recovers this year. The stable outlook also reflects
Moody's expectations of policy continuity, enduring support of
international organizations that mitigates government liquidity
risk, and resilient external position thanks to adequate foreign
exchange reserves and a current account deficit covered mostly by
FDIs.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS

Albania's ESG Credit Impact Score is highly negative (CIS-4),
reflecting moderate exposure to environmental risks, high exposure
to social risks and moderately weak governance profile, the latter
also explaining - along with weak fiscal metrics - the relatively
low resilience.

Albania's credit profile is moderately exposed to environmental
risks, reflected in its E-3 issuer profile score. Exposure to
environmental risk is low or moderately negative across all
categories, apart from physical climate risk which is highly
negative. Albania is also exposed to environmental risks because of
the agriculture sector's importance to the economy, its dependence
on tourism and its almost exclusive reliance on hydropower for
electricity generation. Power shortages as a result of drought can
weaken economic growth and increase electricity imports.

Exposure to social risks is high (S-4 issuer profile score), and it
is mainly related to the subpar quality of basic service and
unfavourable demographics, given high emigration and an ageing
population, which will weigh on growth over the long term. Health
outcomes, housing, education and labour and income are also a
source of credit risk, although to a moderate extent.

Albania has a moderately negative governance profile score (G-3
issuer profile), reflecting significant improvements in
strengthening its institutions, though its performance in respect
of rule of law and control of corruption remains relatively weak.
The EU's recent decision to launch accession talks with Albania is
likely to support progress in these areas.

GDP per capita (PPP basis, US$): 14,534 (2019 Actual) (also known
as Per Capita Income)

Real GDP growth (% change): 2.2% (2019 Actual) (also known as GDP
Growth)

Inflation Rate (CPI, % change Dec/Dec): 1.2% (2019 Actual)

Gen. Gov. Financial Balance/GDP: -1.9% (2019 Actual) (also known as
Fiscal Balance)

Current Account Balance/GDP: -7.9% (2019 Actual) (also known as
External Balance)

External debt/GDP: [not available]

Economic resiliency: ba2

Default history: At least one default event (on bonds and/or loans)
has been recorded since 1983.

On May 18, 2021, a rating committee was called to discuss the
rating of the Albania, Government of. The main points raised during
the discussion were: The issuer's economic fundamentals, including
its economic strength, have materially increased. The issuer's
fiscal or financial strength, including its debt profile, has not
materially changed. The issuer's susceptibility to event risks has
not materially changed. Other views raised included: The issuer's
institutions and governance strength, have not materially changed.

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

FACTORS THAT COULD LEAD TO AN UPGRADE

Upward pressure on the rating would arise from an improvement in
fiscal strength deriving from a material decline in public sector
debt, and a reduction of the fiscal risks posed by contingent
liabilities. An improvement of the country's institutions due to
stronger fiscal policy effectiveness, thanks for example to
effective revenue-enhancing measures, or additional reforms that
result in progress in the area of rule of law and in an improved
business environment and competitiveness would also be credit
positive.

FACTORS THAT COULD LEAD TO A DOWNGRADE

Conversely, downward pressure on the rating would arise from a less
prudent fiscal policy, significantly weaker growth prospects
compared to Moody's expectations, and/or the materialization of
contingent liabilities leading to a permanent reversal of the
public debt-to-GDP ratio's downward trajectory. Furthermore, the
emergence of challenges in funding the current-account deficit due
to a significant decline of FDI would be credit negative. Reduced
political commitment to the institutional and economic reform
agenda would also exert negative credit pressure.

The principal methodology used in these ratings was Sovereign
Ratings Methodology published in November 2019.




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G E R M A N Y
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NIDDA BONDCO: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
------------------------------------------------------------
Fitch Ratings has affirmed Nidda BondCo GmbH's (Nidda) Long-Term
Issuer Default Rating (IDR) at 'B' with Stable Outlook. Fitch also
affirmed Nidda Healthcare Holding GmbH's senior secured debt at
'B+'/'RR3'. Nidda is the parent of Nidda Healthcare Holding GmbH,
an acquisition vehicle that acquired Stada Arzneimittel AG, the
Germany-based manufacturer of generic pharmaceutical and branded
consumer healthcare products.

Nidda's rating reflects Stada's robust business profile with strong
'BB' characteristics, which is balanced against Nidda's highly
aggressively leveraged capital structure following a sponsor-backed
acquisition of Stada. Fitch expects a recovery in margins and free
cash flows (FCF), driven by stable trading across key geographies
(EU and UK) and strengthening performance in CEE and CIS, which
will continue to mitigate high leverage, which Fitch estimates will
remain at around 8.0x in the medium term.

The Stable Outlook is predicated on the continuation of a
disciplined approach in acquiring good-quality targets to
complement Stada's strong portfolio of products, together with
rigorous integration of acquisitions and management of the existing
product portfolio. It also reflects Fitch's assumptions of
improving near-term business performance as global coronavirus
pandemic restrictions ease.

KEY RATING DRIVERS

Stable Underlying Performance: The 'B' IDR reflects Stada's stable
underlying performance with a diverse, well positioned and strong
portfolio of generics and branded products. Fitch projects EBITDA
margins to stabilise at 23% in the medium term (Fitch defined,
excluding IFRS 16) following temporary profitability weakness in
2020 from the combination of pandemic-related demand volatility and
shift in product mix, record M&A activity with first-time
consolidation of new assets, and FX impact.

Diminished Rating Headroom in 2021: Stada's performance during the
2020 pandemic year was weaker than for most Fitch-rated
pharmaceutical peers. Fitch estimates that some of this operating
underperformance will continue in 2021, due to continued pandemic
pressures in 1H21 and ongoing integration of large and complex
assets.

However, given Stada's fundamentally strong business model and
product portfolio, Fitch anticipates a near-term restoration of
operating parameters through rigorous portfolio management and
disciplined integration execution allowing EBITDA margins to return
to 23% (Fitch defined, excluding IFRS 16) and FCF to mid single
digits, and mitigate its permanently high financial risk. In
Fitch's view, persisting operating softness after 2021 could signal
structural business issues, which combined with higher leverage
could put the ratings under pressure given the low rating
headroom.

Higher Leverage in 2021: Fitch expects FFO gross leverage to remain
high at around 9.0x in 2021. The sponsors' aggressive financial
policy means any deleveraging could only come from improving EBITDA
and EBITDA margins rather than a debt reduction. The Stable Outlook
is supported by the prospect of a near-term strengthening of EBITDA
and FCF margins, acting as a counterweight to chronically high
financial risk.

Healthy Medium-Term FCF: Fitch regards Stada's record of healthy
FCF generation and the prospect of FCF returning to mid single
digits from 2022 as a strong mitigant of the overleveraged balance
sheet. Fitch expects large and sustainably positive free cash flow
(FCF) at around EUR200 million and robust FCF margins to return to
above 5% in 2022 despite growing trade working-capital and capex
requirements. Stagnant or weakening FCF in combination with
persisting higher leverage will point to a credit deterioration and
may lead to a negative rating action in the next 12 months.

Latent M&A Risk: Fitch expects more opportunistic M&A activity,
including larger transactions, which historically have been
entirely debt funded. Fitch's view is supported by the availability
of suitable pharmaceutical assets as large pharma players
streamline their product portfolios and by access to risk capital
for stronger sector credits such as Stada. The threats in this
strategy are in the risk profile of the target assets, acquisition
economics and execution risk, as well as financial discipline.

Positive Market Fundamentals: Fitch continues to factor into the
ratings that the positive fundamentals for the European generics
market will continue as governments and healthcare providers seek
to optimise healthcare cost structures, which are under pressure
from growing and ageing populations, increasing prevalence of
chronic diseases, and expensive new innovative treatments coming to
market and affecting budgets. Fitch sees continued structural
growth opportunities, given limited overall generic penetration in
Europe versus the US and the increasing introduction of
biosimilars.

DERIVATION SUMMARY

Fitch rates Nidda according to its global rating navigator
framework for pharmaceutical companies. Under this framework, the
company's generic and consumer business benefits from satisfactory
diversification by product and geography, with a balanced exposure
to mature, developed and emerging markets.

Nidda's business risk profile is affected by its relatively smaller
global footprint than more global industry participants, such as
Teva Pharmaceutical Industries Limited (BB-/Negative) and Mylan
N.V. (BBB/Stable), and diversified companies, such as Novartis AG
(AA-/Stable) and Pfizer Inc. (A/Negative). High financial leverage
is a key rating constraint, compared with international peers, and
is reflected in the 'B' rating.

Nidda ranks ahead of other highly speculative sector peers such as
Care Bidco (B(EXP)/Stable), IWH UK Finco Limited (B/Stable) in
terms of size and product diversity. Nidda's business mainly
concentrated in Europe, but it is also has a growing presence in
developed and emerging markets. This gives the company a business
risk profile consistent with a higher rating. However, its high
financial risk, with FFO gross leverage projected to remain
7.0x-8.0x in 2022-2024, is more in line with a weak 'B-' rating
except for being offset by strong FCF generation.

The distinction between Nidda and higher rated peers CHEPLAPHARM
Arzneimittel GmbH (B+/Stable) and Pharmanovia Bidco Limited
(B+/Negative) reflects the less aggressive levels of leverage,
despite smaller business models and higher exposure product
concentration.

KEY ASSUMPTIONS

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

-- Sales CAGR of 8.2% for 2020-2024, due to volume-driven growth
    of legacy product portfolio, new product launches, the
    acquisition of intellectual property (IP) rights and business
    additions;

-- Fitch-adjusted EBITDA margin recovering towards 23% by 2022,
    underpinned by a normalization in the trading operations
    combined with further cost improvements and synergies realized
    from the latest acquisitions;

-- Capex at 4%-5% of sales a year given recent capacity expansion
    and an expected increase in production volumes;

-- M&A estimated at EUR400 million a year, to be primarily funded
    from internally generated funds and supported by taps on the
    existing senior secured facilities;

-- M&A purchased at 10x enterprise value (EV)/EBITDA multiples
    with a 20% EBITDA contribution;

-- Stada's legacy debt (mainly an outstanding EUR267 million
    1.75% bond due in 2022) repaid via an incremental senior
    secured issuance;

-- No dividends.

RECOVERY ASSUMPTIONS

Nidda would be considered a going concern in bankruptcy and be
reorganised rather than liquidated.

Fitch estimates a post-restructuring EBITDA of around EUR550
million, which would allow Nidda to remain a going concern after
distress and assuming implementation of some corrective actions.

Fitch applies a distressed EV/EBITDA multiple at 7.0x, which
reflects Stada's size, product breadth and cash-generative
operations.

Fitch assumes Stada's senior unsecured legacy debt (at the
operating company level), which is structurally the most senior,
ranks on enforcement pari passu with the senior secured acquisition
debt, including term loans and senior secured notes. This view is
based on the principal waterfall analysis and assuming the RCF of
EUR400 million is fully drawn in the event of default. Senior notes
at Nidda rank below senior secured acquisition debt.

Our principal waterfall analysis, after deducting 10% for
administrative claims, generates a ranked recovery for the senior
secured debt of 63% in the 'RR3' category, leading to a 'B+' rating
one notch above the IDR. Recoveries envisaged for Nidda's senior
unsecured notes remains at 0%, in the 'RR6' band, providing a
'CCC+' instrument rating, two notches below the IDR.

RATING SENSITIVITIES

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

-- Commitment to a financial policy that would be conducive to
    maintaining FFO gross leverage below 7.0x;

-- Sustained strong profitability (Fitch-defined EBITDA margin
    above 25%) and FCF margin consistently above 5%;

-- Maintenance of FFO interest coverage close to 3.0x

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

-- Diminished prospects for FFO gross leverage moving below 8.5x
    by 2023;

-- M&A shifting towards higher-risk or lower-quality assets or
    weak integration resulting in pressure on profitability and
    challenging positive FCF margins;

-- FFO interest coverage weakening to below 2.0x

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 projects a comfortable year-end cash
position of EUR200 million-250 million until 2022, supported by
improving FCF generation towards a 5% margin. To calculate freely
available liquidity, Fitch had deducted EUR4 million of cash held
in China and a further EUR100 million as the minimum operating cash
requirement, indicating the group's expanding scale and
geographical footprint.

Organic cash flows largely fund Fitch's assumption of EUR400
million of M&A annually from 2022. Nevertheless, Fitch projects a
one-off incremental tap on the existing senior secured facilities
of EUR400 million in 2022 to partially fund M&A, although primarily
the tap would allow Nidda to redeem its EUR267 million bond due in
2022 while maintaining appropriate levels of cash for operations.

ESG Considerations

The highest level of ESG credit relevance, if present, is a score
of '3'. This means ESG issues are credit-neutral or have only a
minimal credit impact on the entity(ies), either due to their
nature or to the way in which they are being managed by the
entity(ies).




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I R E L A N D
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AURIUM CLO VI: Moody's Assigns B3 Rating to EUR14.6M Class F Notes
------------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to refinancing debt issued by Aurium
CLO VI Designated Activity Company (the "Issuer"):

EUR150,000,000 Class A Senior Secured Floating Rate Loan due 2034,
Definitive Rating Assigned Aaa (sf)

EUR129,000,000 Class A Senior Secured Floating Rate Notes due
2034, Definitive Rating Assigned Aaa (sf)

EUR35,000,000 Class B-1 Senior Secured Floating Rate Notes due
2034, Definitive Rating Assigned Aa2 (sf)

EUR10,000,000 Class B-2 Senior Secured Fixed Rate Notes due 2034,
Definitive Rating Assigned Aa2 (sf)

EUR31,500,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2034, Definitive Rating Assigned A2 (sf)

EUR28,100,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2034, Definitive Rating Assigned Baa3 (sf)

EUR22,500,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2034, Definitive Rating Assigned Ba3 (sf)

EUR14,600,000 Class F Senior Secured Deferrable Floating Rate
Notes due 2034, 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.

As part of this reset, the Issuer has increased the target par
amount by EUR225 million to EUR 450 million. 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.

As part of this refinancing, the Issuer has extended the
reinvestment period by 1.6 year to 4.5 years and the weighted
average life by 2 years to 8.5 years. It has also amended certain
concentration limits, definitions including the definition of
"Adjusted Weighted Average Rating Factor" and minor features. The
issuer has included the ability to hold workout obligations. 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 or senior secured
bonds and up to 10% of the portfolio may consist of unsecured
senior loans, second-lien loans, high yield bonds and mezzanine
loans. The underlying portfolio is expected to be approximately 75%
ramped as of the closing date.

On the Original Closing Date, the Issuer also issued EUR27,000,000
of Subordinated Notes, which will remain outstanding. The terms and
conditions of the subordinated notes will be amended in accordance
with the refinancing debt's conditions.

Spire Management Limited ("Spire") 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
4.5-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, credit improved obligation and unscheduled
principal proceeds.

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 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:

Target Par Amount: EUR450,000,000

Defaulted Asset: EUR0 as of Feb 12, 2021 [1]

Diversity Score: 43 (*)

Weighted Average Rating Factor (WARF): 2780

Weighted Average Spread (WAS): 3.40%

Weighted Average Coupon (WAC): 4.50%

Weighted Average Recovery Rate (WARR): 42.50%

Weighted Average Life (WAL): 8.5 years


BLACKROCK EURO IX: Fitch Affirms B- Rating on Class F Notes
-----------------------------------------------------------
Fitch Ratings has revised BlackRock European CLO IX DAC class D, E
and F notes' Outlooks to Stable from Negative, and affirmed all
ratings.

     DEBT              RATING           PRIOR
     ----              ------           -----
BlackRock European CLO IX DAC

A XS2062957910   LT  AAAsf   Affirmed   AAAsf
B XS2062958215   LT  AAsf    Affirmed   AAsf
C XS2062958561   LT  Asf     Affirmed   Asf
D XS2062958991   LT  BBB-sf  Affirmed   BBB-sf
E XS2062959379   LT  BB-sf   Affirmed   BB-sf
F XS2062959452   LT  B-sf    Affirmed   B-sf

TRANSACTION SUMMARY

BlackRock European CLO IX DAC is a cash-flow CLO mostly comprising
senior secured obligations. The transaction is within its
reinvestment period and is actively managed by the collateral
manager.

KEY RATING DRIVERS

Coronavirus Stress Sensitivity: The affirmation of all tranches
reflects a broadly stable portfolio credit quality since the
previous review in September 2020. Tranches A to D show a healthy
default-rate cushion in the sensitivity analysis Fitch ran in light
of the coronavirus pandemic. While classes E and F show some
shortfall in the coronavirus stress scenario, they are small and
driven by a back-loaded default scenario, which is not an immediate
expectation, which led to the Outlook revision.

This rating action follows the recent update of Fitch's CLO
coronavirus stress scenario to assume that only half of the
corporate exposure on Negative Outlook is downgraded by one notch,
instead of 100% previously.

Deviation from Model-Implied Ratings: The model-implied ratings
(MIRs) for the class F notes is one notch below the current rating.
The deviation from the MIRs reflects Fitch's view of a significant
margin of safety provided by available credit enhancement. The
notes do not present a "real possibility of default", which is the
definition of 'CCC' in Fitch's Rating Definitions

Stable Asset Performance: The portfolio is above target par. As per
the latest investor report dated 12 April 2021, the transaction was
passing all portfolio profile tests, coverage tests and collateral
quality tests were passing except for the Fitch 'CCC' obligation
test, which was slightly failing. As of 15 May 2021, exposure to
assets with a Fitch-derived rating of 'CCC+' and below was 7.74%
(excluding unrated assets) and 9% (including unrated assets), above
the transaction's limit of 7.5%.

'B'/'B-' Portfolio: Fitch assesses the average credit quality of
the obligors to be in the 'B'/'B-' category. As at 15 May 2021, the
Fitch-calculated weighted average rating factor (WARF) of the
portfolio was 33.54, slightly higher than the trustee-reported WARF
of 12 April 2021 of 33.15, owing to rating migration.

High Recovery Expectations: The portfolio comprises 98.9% of senior
secured obligations. Fitch views the recovery prospects for these
assets as more favourable than for second-lien, unsecured and
mezzanine assets. The Fitch weighted average recovery rate of the
current portfolio is 65.8% as per the report.

Diversified Portfolio: The portfolio is well diversified across
obligors, countries and industries. The top 10 obligors'
concentration is 13.7% and no obligor represents more than 2% of
the portfolio balance. As per Fitch calculation the largest
industry is business services at 10.65% of the portfolio balance,
against limits of 17.5%.

RATING SENSITIVITIES

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

-- At closing, Fitch used a standardised stress portfolio
    (Fitch's stressed portfolio) customised to the limits as
    specified in the transaction documents. Even if the actual
    portfolio shows lower defaults and smaller losses (at all
    rating levels) than Fitch's stressed portfolio assumed at
    closing, an upgrade of the notes during the reinvestment
    period is unlikely. This is because the portfolio credit
    quality may still deteriorate, not only by natural credit
    migration, but also because of reinvestment.

-- After the end of the reinvestment period, upgrades may occur
    in the event of better-than-expected portfolio credit quality
    and deal performance, leading to higher credit enhancement and
    excess spread available to cover for losses in the remaining
    portfolio.

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

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

Coronavirus Severe Downside Stress

Fitch has added a sensitivity analysis that contemplates a more
severe and prolonged economic stress caused by a re-emergence of
infections in the major economies. The severe downside stress
incorporates a single-notch downgrade to all the corporate exposure
on Negative Outlook. This scenario results in a single-notch
downgrade of the model-implied ratings for the class D, E and F
notes.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Structured Finance
transactions have a best-case rating upgrade scenario (defined as
the 99th percentile of rating transitions, measured in a positive
direction) of seven 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 seven notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings
are based on historical performance.

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

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

DATA ADEQUACY

Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset pool
and the transaction. Fitch has not reviewed the results of any
third-party assessment of the asset portfolio information or
reviewed the origination files as part of its monitoring.

Most of the underlying assets or risk presenting entities have
ratings or credit opinions from Fitch and/or other nationally
recognised statistical rating organisations and/or European
Securities and Markets Authority-registered rating agencies. Fitch
has relied on the practices of the relevant groups within Fitch
and/or other rating agencies to assess the asset portfolio
information or information on the risk-presenting entities.

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

Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis according to its applicable rating methodologies
indicates that it is adequately reliable.


CARLYLE GLOBAL 2014-2: Fitch Assigns Final B- Rating on E-R Notes
-----------------------------------------------------------------
Fitch Ratings has assigned Carlyle Global Market Strategies Euro
CLO 2014-2 DAC's refinancing notes final ratings and affirmed the
others.

      DEBT                    RATING               PRIOR
      ----                    ------               -----
Carlyle Global Market Strategies Euro CLO 2014-2 DAC

A-1-R XS1898114381      LT  PIFsf  Paid In Full    AAAsf
A-1-RRR XS2339017688    LT  AAAsf  New Rating      AAA(EXP)sf
A-2A-R XS1898114621     LT  PIFsf  Paid In Full    AAsf
A-2A-RRR XS2339019031   LT  AAsf   New Rating      AA(EXP)sf
A-2B-R XS1898115198     LT  PIFsf  Paid In Full    AAsf
A-2B-RRR XS2339019890   LT  AAsf   New Rating      AA(EXP)sf
B-1-R XS1898115438      LT  Asf    Affirmed        Asf
B-2-R XS1898115784      LT  Asf    Affirmed        Asf
C-R XS1898116089        LT  BBBsf  Affirmed        BBBsf
D-R XS1898116162        LT  BBsf   Affirmed        BBsf
E-R XS1898116246        LT  B-sf   Affirmed        B-sf

TRANSACTION SUMMARY

Carlyle Global Market Strategies Euro CLO 2014-2 DAC is a cash flow
collateralised loan obligation (CLO). On the refinance closing
date, the class A-1-R, A-2A-R and A-2B-R notes have been redeemed
and re-issued at lower spreads. The portfolio is managed by CELF
Advisors LLP. The refinanced CLO envisages a further two-year
reinvestment period and a 6.7-year weighted average life (WAL).

KEY RATING DRIVERS

'B/B-' Portfolio Credit Quality: Fitch places the average credit
quality of obligors in the 'B/B-' range. The Fitch weighted average
rating factor (WARF) of the current portfolio is 35.68.

High Recovery Expectations: Senior secured obligations comprise
98.6% of the portfolio. Fitch views the recovery prospects for
these assets as more favourable than for second-lien, unsecured and
mezzanine assets. The Fitch weighted average recovery rate (WARR)
of the current portfolio is 63.6%. The WARR calculation has been
updated as per Fitch's criteria at the refinancing closing.

Diversified Asset Portfolio: The transaction has two Fitch test
matrices corresponding to maximum exposure to the top 10 obligors
at 18% and 20% and maximum fixed assets limited at 10% of the
portfolio. The transaction also includes limits on the
Fitch-defined largest industry at a covenanted maximum 17.5% and
the three largest industries at 40.0%. These covenants ensure that
the asset portfolio will not be exposed to excessive
concentration.

WAL Extended to 6.7 years: On the refinancing date, the issuer
extended the WAL covenant by nine months to 6.7 years and the Fitch
matrices have been updated. The transaction features a two-year
reinvestment period. The reinvestment criterion is similar to other
European transactions. Fitch's analysis is based on a stressed-case
portfolio with the aim of testing the robustness of the transaction
structure against its covenants and portfolio guidelines.

Model-implied Ratings Deviation: The ratings of the class D and E
notes are one notch higher than the model-implied ratings (MIR)
derived under the stressed portfolio analysis. These notes show a
maximum shortfall of 0.62% and 0.44%. These shortfalls are the
maximum observed where a note drives a specific matrix point. The
current ratings are supported by their credit enhancement, as well
as the default cushion on the current portfolio due to the notable
cushion between the covenants of the transaction and the
portfolio's parameters. The notes pass the current ratings with a
cushion based on the current portfolio and the coronavirus
sensitivity analysis that is used for surveillance.

Affirmation of Existing Notes: The notes that were not refinanced
have been affirmed with Stable Outlooks, reflecting the
transaction's stable performance. The transaction was below par by
1.5% as of the latest investor report dated 12 April 2021. All
portfolio profile tests, collateral quality tests and coverage
tests were passing except for the Fitch and another agency's 'CCC'
test (8.7% versus a limit of 7.5%). The manager classifies one
asset for EUR6 million as defaulted.

RATING SENSITIVITIES

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

-- A 25% decrease in the portfolio's mean default rate and a 25%
    increase in the recovery rate at all rating levels, would lead
    to an upgrade of up to five notches for the rated notes,
    except the class A notes, which are already at the highest
    rating on Fitch's scale and cannot be upgraded.

-- The transaction has a reinvestment period and the portfolio
    will be actively managed. At closing, Fitch uses a
    standardised stress portfolio (Fitch's Stress Portfolio) that
    is customised to the specific portfolio limits for the
    transaction as specified in the transaction documents. Even if
    the actual portfolio shows lower defaults and losses at all
    rating levels than Fitch's Stress Portfolio assumed at
    closing, an upgrade of the notes during the reinvestment
    period is unlikely, as the portfolio credit quality may still
    deteriorate, not only by natural credit migration, but also
    through reinvestments.

-- After the end of the reinvestment period, upgrades may occur
    if there is better-than-expected portfolio credit quality and
    deal performance, leading to higher note credit enhancement
    and excess spread available to cover for losses on the
    remaining portfolio.

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

-- A 25% increase in the portfolio's mean default rate and a 25%
    decrease in the recovery rate at all rating levels, would lead
    to a downgrade of up to six notches for the rated notes.

-- Downgrades may occur if the build-up of the notes' credit
    enhancement following amortisation does not compensate for a
    higher loss expectation than initially assumed due to
    unexpected high levels of default and portfolio deterioration.

Coronavirus Baseline Scenario

Fitch recently updated its CLO coronavirus baseline scenario to
assume that half of the corporate exposure on Negative Outlook will
be downgraded by one notch instead of all of them. In this
scenario, none of the rated notes are affected.

Coronavirus Downside Scenario

Fitch also considers a sensitivity analysis that contemplates a
more severe and prolonged economic stress. The downside sensitivity
incorporates a single-notch downgrade to all corporate issuers on
Negative Outlook regardless of sector. Under this downside
scenario, none of the rated notes are affected.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Structured Finance
transactions have a best-case rating upgrade scenario (defined as
the 99th percentile of rating transitions, measured in a positive
direction) of seven 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 seven notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings
are based on historical performance.

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

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

DATA ADEQUACY

Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset pool
and the transaction. Fitch has not reviewed the results of any
third party assessment of the asset portfolio information or
conducted a review of origination files as part of its ongoing
monitoring.

The majority of the underlying assets or risk presenting entities
have ratings or credit opinions from Fitch and/or other Nationally
Recognized Statistical Rating Organizations and/or European
Securities and Markets Authority registered rating agencies. Fitch
has relied on the practices of the relevant groups within Fitch
and/or other rating agencies to assess the asset portfolio
information or information on the risk presenting entities.

Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis according to its applicable rating methodologies
indicates that it is adequately reliable.


CARLYLE GLOBAL 2014-2: Moody's Affirms B2 Rating on Cl. E-R Notes
-----------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to refinancing notes issued by Carlyle
Global Market Strategies Euro CLO 2014-2 Designated Activity
Company (the "Issuer"):

EUR239,400,000 Class A-1-R Senior Secured Floating Rate Notes due
2031, Definitive Rating Assigned Aaa (sf)

EUR10,400,000 Class A-2A-R Senior Secured Floating Rate Notes due
2031, Definitive Rating Assigned Aa2 (sf)

EUR26,400,000 Class A-2B-R Senior Secured Fixed Rate Notes due
2031, Definitive Rating Assigned Aa2 (sf)

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

EUR13,800,000 Class B-1-R Senior Secured Deferrable Floating Rate
Notes due 2031, Affirmed A2 (sf); previously on Sep 9, 2020
Affirmed A2 (sf)

EUR10,000,000 Class B-2-R Senior Secured Deferrable Floating Rate
Notes due 2031, Affirmed A2 (sf); previously on Sep 9, 2020
Affirmed A2 (sf)

EUR19,500,000 Class C-R Senior Secured Deferrable Floating Rate
Notes due 2031, Affirmed Baa2 (sf); previously on Sep 9, 2020
Confirmed at Baa2 (sf)

EUR29,000,000 Class D-R Senior Secured Deferrable Floating Rate
Notes due 2031, Affirmed Ba2 (sf); previously on Sep 9, 2020
Confirmed at Ba2 (sf)

EUR11,700,000 Class E-R Senior Secured Deferrable Floating Rate
Notes due 2031, Affirmed B2 (sf); previously on Sep 9, 2020
Confirmed at B2 (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 affirmation of the Class B-1-R Notes, Class B-2-R
Notes, Class C-R Notes, Class D-R Notes, and Class E-R 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 by 9 months to February 16, 2028. It has also amended
certain concentration limits, definitions including the definition
of "Adjusted Weighted Average Rating Factor" 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 or senior secured
bonds and up to 10% of the portfolio may consist of unsecured
senior loans, second-lien loans, high yield bonds and mezzanine
loans. The underlying portfolio is fully ramped as of the closing
date.

CELF Advisors LLP ("CELF") 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-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.

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 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 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: EUR376.86m

Defaulted Par: EUR9.90m as of April 12, 2021

Diversity Score: 62

Weighted Average Rating Factor (WARF): 3300

Weighted Average Spread (WAS): 3.85%

Weighted Average Coupon (WAC): 4.52%

Weighted Average Recovery Rate (WARR): 43.0%

Weighted Average Life Test Date: February 16, 2028

TORO EUROPEAN 2: Fitch Affirms B- Rating on Class F-R Notes
-----------------------------------------------------------
Fitch Ratings has upgraded Toro European CLO 2 DAC's B-1-R, B-2-R
and C-R notes, affirmed all other notes and revised the Outlooks on
the class D-R, E-R and F-R notes to Stable from Negative.

       DEBT                 RATING          PRIOR
       ----                 ------          -----
Toro European CLO 2 DAC

A-R XS1884797827     LT  AAAsf   Affirmed   AAAsf
B-1-R XS1884798551   LT  AA+sf   Upgrade    AAsf
B-2-R XS1884799104   LT  AA+sf   Upgrade    AAsf
C-R XS1884799799     LT  A+sf    Upgrade    Asf
D-R XS1884800472     LT  BBB-sf  Affirmed   BBB-sf
E-R XS1884800985     LT  BB-sf   Affirmed   BB-sf
F-R XS1884801280     LT  B-sf    Affirmed   B-sf

TRANSACTION SUMMARY

Toro European CLO 2 DAC is a cash flow CLO mostly comprising senior
secured obligations. The transaction is out of its reinvestment
period and is actively managed by Chenavari Credit Partners LLP.

KEY RATING DRIVERS

Transaction Deleveraging: The upgrade of the B-1-R, B-2-R and C-R
notes reflects the deleveraging of the transaction since Fitch's
last review in July 2020 and the shorter weighted-average life
(WAL) of the portfolio. The class A-R notes have paid down around
EUR5.2 million since the last review. The manager continues to
reinvest according to the transaction's reinvestment criteria.

Resilient to Coronavirus Stress: The affirmations reflect the
broadly stable portfolio credit quality of the transaction since
January. Fitch recently updated its CLO coronavirus stress scenario
to assume that half of the corporate exposure on Negative Outlook
is downgraded by one notch, instead of 100%. The revision of the
Outlooks on the class D-R, E-R and F-R notes to Stable from
Negative and Stable Outlooks on the other notes reflect the
resilience of the notes to the sensitivity analysis Fitch ran in
light of the coronavirus pandemic. The classes A-R, B-1-R, B-2-R,
C-R, and D-R notes show cushions while the E-R and F-R notes showed
small shortfalls under the back-loaded default scenario only.

Stable Asset Performance: The transaction's metrics are similar to
those at the last review in July 2020. The transaction was below
par by 1.93% as of the investor report in April 2021. All
collateral quality tests, portfolio profile tests and coverage
tests were passing. Exposure to assets with a Fitch-derived rating
(FDR) of 'CCC+' and below was 6.36 % (excluding non-rated assets).

'B'/'B-' Portfolio: Fitch assesses the average credit quality of
the obligors in the 'B'/'B-' category for the transaction. The WARF
as calculated by Fitch was 35.21 (assuming unrated assets are CCC)
below the maximum covenant of 36.00. The Fitch WARF would increase
by 1.21 after applying the coronavirus baseline stress.

High Recovery Expectations: Senior secured obligations plus cash
comprise 97.60% of the portfolio. Fitch views the recovery
prospects for these assets as more favourable than for second-lien,
unsecured and mezzanine assets.

Diversified Portfolio: The portfolio is well-diversified across
obligors, countries and industries. The top 10 obligor
concentration is 14.52%, and no obligor represents more than 1.68%
of the portfolio balance.

Deviation from the Model-implied Rating: The class F-R notes'
rating is one notch higher than the model-implied ratings (MIR) as
calculated based on the surveillance approach. The class F notes'
deviation from the MIR reflects Fitch's view that the tranche has a
significant margin of safety given the credit enhancement level.
The notes do not present a "real possibility of default", which is
the definition of 'CCC' in Fitch's Rating Definitions.

RATING SENSITIVITIES

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

-- A reduction of the default rate (RDR) at all rating levels by
    25% of the mean RDR and an increase in the recovery rate (RRR)
    by 25% at all rating levels would result in an upgrade of one
    to four notches across the structure.

-- Except for the class A-R notes, which are already at the
    highest rating on Fitch's scale and cannot be upgraded,
    upgrades may occur in case of better-than-expected portfolio
    credit quality and deal performance, leading to higher credit
    enhancement and excess spread available to cover for losses in
    the remaining portfolio. Further tranches may be upgraded as
    the notes start to amortise, leading to higher credit
    enhancement across the structure and if the portfolio's credit
    quality remains stable.

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

-- An increase of the RDR at all rating levels by 25% of the mean
    RDR and a decrease of the RRR by 25% at all rating levels will
    result in downgrades of up to five notches, depending on the
    notes.

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

Fitch has added a sensitivity analysis that contemplates a more
severe and prolonged economic stress. The downside sensitivity
incorporates a single-notch downgrade to all FDRs on Negative
Outlook. The class E-R and F-R notes show shortfalls under this
scenario.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Structured Finance
transactions have a best-case rating upgrade scenario (defined as
the 99th percentile of rating transitions, measured in a positive
direction) of seven 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 seven notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings
are based on historical performance.

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

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

DATA ADEQUACY

Toro European CLO 2 DAC

Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset pool
and the transaction. Fitch has not reviewed the results of any
third party assessment of the asset portfolio information or
conducted a review of origination files as part of its ongoing
monitoring.

The majority of the underlying assets or risk presenting entities
have ratings or credit opinions from Fitch and/or other Nationally
Recognized Statistical Rating Organizations and/or European
Securities and Markets Authority registered rating agencies. Fitch
has relied on the practices of the relevant groups within Fitch
and/or other rating agencies to assess the asset portfolio
information or information on the risk presenting entities.

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

Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis according to its applicable rating methodologies
indicates that it is adequately reliable.




=========
I T A L Y
=========

GOLDEN GOOSE: Fitch Assigns Final 'B+' Rating on Sr. Secured Notes
------------------------------------------------------------------
Fitch Ratings has assigned Golden Goose S.p.A.'s senior secured
notes a final 'B+' rating with a Recovery Rating of 'RR3'. This
follows the placement of EUR480 million senior secured notes due
2027 and receipt of final documentation with terms and conditions
aligned with Fitch's expectations.

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 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 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, which is reliant on
the concepts 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 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, which account 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 and 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. In addition, store
formats are small and new openings will be mostly in countries
where the company is already present. Its online growth is
supported by 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 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
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 with 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. Fitch
therefore considers lease-adjusted credit metrics for Golden Goose.
However, Fitch also compares Golden Goose with companies in the
consumer goods sector.

Golden Goose is rated one notch below its closest peer BK LC Lux
Finco 1 S.a.r.l. (Birkenstock, B+/ Stable), which also operates in
the shoe sector. It has similar profitability and is also
concentrated on one product. Unlike Golden Goose, Birkenstock is
not developing its own retail store network and Fitch therefore
does not adjust its leverage for leases. The one-notch rating
differential reflects Birkenstock's larger scale and a product
positioning not subject to fashion risk.

Golden Goose's credit profile is weaker than 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.

Golden Goose is smaller and has greater concentration risks than
Italian furniture producer International Design Group S.p.A.
(B/Stable) 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 than Golden Goose and is not exposed to fashion
risks and product concentration. Unlike Golden Goose, THG bases its
strategy on bolt-on M&A. However, Fitch expects THG to deleverage
towards more conservative levels than Golden Goose due to THG's
commitment to achieving a conservative financial policy after its
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;

-- 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 (EV). 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 behind 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.

Fitch applied an EV multiple of 5.5x EBITDA 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.

Fitch assumes its EUR75 million revolving credit facility (RCF) 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
EUR480 million senior secured notes in the 'RR3' band, indicating a
'B+' rating. The waterfall analysis output percentage on current
metrics and assumptions is 51%. 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-140
    million by end-2024;

-- Maintenance of a 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 placed senior secured notes.

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'. This means ESG issues are
credit neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.




===========
N O R W A Y
===========

NORWEGIAN AIR: Emerges From Bankruptcy Protection
-------------------------------------------------
Victoria Klesty at Reuters reports that Norwegian Air emerged from
six months of bankruptcy protection on May 26 with a smaller fleet
and its debt almost wiped out but also facing stronger competition
and lingering uncertainty wrought by the pandemic.

The airline said on May 21 it had raised NOK6 billion (US$721
million) in fresh capital, as planned, more than enough to meet the
minimum requirement set by bankruptcy courts in Dublin and Oslo.

The COVID-19 pandemic threw already heavily indebted Norwegian into
a crisis in early 2020, eventually forcing it to terminate large
parts of its operations, including its transatlantic network.

The company said it now has 51 aircraft, down from a pre-pandemic
156, while its debt amounts to between NOK16 billion and NOK18
billion, down from more than NOK80 billion.

Norwegian will in the next 10 months only pay leasing costs for the
aircraft it actually uses at any given time, so-called "Power by
the Hour" agreements, which provide financial flexibility amid
uncertain demand.




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

FAR-EASTERN SHIPPING: Fitch Raises LT IDRs to 'B+', Outlook Stable
------------------------------------------------------------------
Fitch Ratings has upgraded Russia-based Far-Eastern Shipping
Company Plc's (FESCO) Long-Term Foreign- and Local-Currency Issuer
Default Ratings (IDR) to 'B+' from 'CCC'. The Outlooks are Stable.

The upgrade reflects improved liquidity, a smooth repayment
schedule and significantly lower foreign-exchange (FX) exposure
following the refinancing of a loan from VTB bank representing the
bulk of its debt, as well as continued deleveraging following a
robust operating performance across various business segments.

Fitch expects FESCO to maintain FFO adjusted net leverage below
3.5x and financial profile that is comfortable for the rating.
However, corporate governance limitations, with ongoing litigation
over FESCO's key shareholder and token independent directors, as
well as smaller scale than peers constrain the rating and any
further upside.

KEY RATING DRIVERS

Debt Refinancing Boosted Rating: In April 2021 FESCO refinanced its
VTB secured loan. This resulted in more favourable debt terms with
decreased interest rates, better currency composition with a
significantly decreased US dollar-denominated portion, extension of
the maturity until 2027 (from 2022) and a smooth repayment schedule
with equal annual installments, which is comfortably covered by
company's operating cash flow.

Lowered FX Risks: FESCO has significantly decreased its
foreign-currency-denominated debt, which fell to 21% of total debt
at end-April 2021 from 84% at end-2015. Moreover, around 30% of
FESCO's EBITDA, mostly from the port and liner and logistics (LLD)
divisions was dollar-denominated during the same period. FESCO's FX
risk remains higher than Fitch-rated peers, even though the
currency mismatch has materially narrowed.

Capex and Dividends Drive Negative FCF: Fitch estimates free cash
flow (FCF) was positive in 2020 (RUB2.9 billion, USD41 million).
However, Fitch assumes it will turn negative from 2021 due to
increased capex on further fleet acquisition and terminals
development, and Fitch-expected potential dividend payments of RUB2
billion (USD30 million) on average from 2022.

Fitch forecasts average capex of RUB6 billion over 2021-2024
compared with RUB3.5 billion on average over 2019-2020. This will
be driven by the company's strategy to strengthen its market
position in the multimodal transportation industry, with Rosatom
State Corporation among one of its strategic partners. However,
Fitch expects management to continue to adapt capex and dividends
to market conditions.

Solid Credit Metrics Expected: FESCO has successfully deleveraged,
achieving funds from operations (FFO)-adjusted net leverage of 3.5x
in 2020 from 11.0x in 2015. The company reported 14% yoy growth in
Fitch-calculated EBITDA in 2020 after a 15% contraction in 2019, on
the back of robust performance in ports and LLD segments. Fitch
conservatively assumes that FESCO's containers, general cargo
handling volumes and rail cargo turnover will start to gradually
normalise, with the EBITDA margin averaging 15%.

Fitch expects FESCO's FFO adjusted net leverage to be on average
below 3.5x (3.5x in 2020), assuming higher capex and Fitch-expected
dividends pay-out ratio of 50% of net income over 2022-2024. Fitch
also forecasts FFO fixed charge cover will rise to an average of
around 2.8x (1.5x over 2017-2020) over 2021-2024.

Port Division Strengthens Business Profile: FESCO's business model
benefits from diversified exposure to ports, rail, integrated
logistics and shipping segments. The port division reached record
cargo turnover in 2019-2020, with container cargoes raised by 8%
yoy in 2020 following strong performance with 18% and 13% yoy
growth in 2018-2019. FESCO's VMTP port is a leading port in the
Russian Far Eastern Basin with 45% market share at end-2020.

Strong LLD Performance: FESCO posted strong volume growth of 14% in
2020, supported by imports, exports and transit operations. Fitch
expects volume growth to continue in 2021 but at a slower pace.
This is driven by the continued containerisation of freight in
Russia, optimised containers handling and loading time, as well as
general lack of capacity on international lines and high rates on
the Deep Sea (Suez Canal) routes, which led to alternative ways of
delivering goods through Russia.

Weak Corporate Governance: FESCO has weak corporate governance,
mostly due to ongoing investigations over one of the shareholders
(Mr Z. Magomedov, Summa Group owns 32.5% of FESCO) and token
independent directors on the board. In November 2020, FESCO fully
changed its nine-member board of directors following a partial
change in the ownership structure. There are no representatives
from SUMMA Group on the current board.

DERIVATION SUMMARY

FESCO has a somewhat weaker business profile than freight rail
transportation companies Globaltrans Investment Plc (BBB-/Stable)
and PJSC Freight One (BBB-/Stable), and a shipping company PAO
Sovcomflot (BBB-/Stable, Standalone Credit Profile of 'bb+') as the
peers have larger scale of operations and benefit from long-term
contracts, with better cash-flow visibility. This is partially
offset by FESCO's higher operational diversification in ports,
rail, integrated logistics and shipping. Despite an improvement in
recent years, FESCO has a weaker financial profile than peers due
to higher leverage and a higher FX mismatch between debt and
revenue. FESCO also has higher corporate governance risks.

KEY ASSUMPTIONS

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

-- Russian GDP growth to average 3.0%, CPI to grow at 4.2% over
    2021-2024;

-- USD/RUB exchange rate in the range of 72-74 over 2021-2024;

-- EBITDA margin to decline to average 15% in 2022-2024 from
    currently cyclically elevated levels;

-- Capex averaging RUB6 billion annually over 2021-2024;

-- Dividends pay-out ratio of 50% of net income over 2022-2024,
    which is above management zero dividends assumption.

RATING SENSITIVITIES

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

-- Record of a conservative financial policy and established
    sound corporate governance practices with FFO adjusted net
    leverage comfortably below 3.5x and FFO fixed charge coverage
    above 3.0x on a sustained basis;

-- Larger scale without impairing profitability, supporting
    resilience to economic slowdown.

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

-- Weaker than expected operational performance, aggressive capex
    or dividend policy leading to projected FFO adjusted net
    leverage above 4.5x and FFO fixed charge cover below 2.5x on a
    sustained basis;

-- Significantly weakened liquidity with the liquidity score
    dropping towards 1.0x.

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

Sufficient Liquidity, Smooth Maturity Profile: FESCO's short-term
maturities as at end-April 2021 of RUB2.8 billion (USD37.7
million), were sufficiently covered by cash and cash equivalents of
RUB6.2 billion (USD83 million). FESCO also has undrawn committed
credit facilities of approximately RUB21 billion (USD140 million)
for finance lease, but these expire in less than 12 months, i.e.
before March 2022, and therefore Fitch does not include this in
Fitch's liquidity score calculation.

FESCO's debt profile mostly reflects the VTB loan with equal annual
amortisation payments during 2021-2027. The company expects to fund
forthcoming maturities with internally generated cash flows. Fitch
also expects the company to generate neutral to positive FCF before
Fitch-assumed dividend payments.

ESG CONSIDERATIONS

Far-Eastern Shipping Company Plc has an ESG Relevance Score of '4'
for Governance Structure due to ongoing investigations over FESCO's
key shareholder and token independent directors, which has a
negative impact on the credit profile, and is relevant to the
rating[s] 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.




=====================
S W I T Z E R L A N D
=====================

SYNGENTA AG: Moody's Affirms Ba2 CFR, Outlook Stable
----------------------------------------------------
Moody's Investors Service affirmed Syngenta AG's Ba2 corporate
family rating and its Ba2-PD probability of default rating.
Concurrently, Moody's affirmed the Ba2 senior unsecured notes
ratings of its guaranteed subsidiaries Syngenta Finance N.V. and
Syngenta Finance AG and their senior unsecured (P)Ba2 MTN programme
ratings. Finally, Moody's also affirmed the Not Prime short-term
rating of Syngenta. The outlook on all ratings is stable.

RATINGS RATIONALE

Syngenta's Ba2 ratings continue to reflect its significantly higher
standalone financial leverage following its takeover by China
National Chemical Corporation Limited (ChemChina, Baa2 stable) in
2017 as Syngenta had directly taken on $4.75 billion of additional
debt related to the acquisition. As a consequence, Syngenta's
adjusted total debt/EBITDA stood at 4.9x as of year-end 2020, from
2.0x before the acquisition in 2016. The contractual arrangements
between ChemChina and Syngenta do not provide a fully sufficient
ring-fencing mechanism to insulate Syngenta's creditors from any
potential detrimental action taken by ChemChina on Syngenta's
credit quality. Therefore, ChemChina's highly leveraged capital
structure, with Moody's adjusted total debt/EBITDA of 13.8x as of
2020, heightens the risk that Syngenta's owner could make calls on
its subsidiary's cash flow and debt capacity.

Historically, Syngenta has been able to generate significant cash
flow and Moody's expects regular dividend upstreaming to be a
primary liquidity source to service the acquisition debt of around
$35.5 billion raised by ChemChina and its guaranteed subsidiaries.
As a result, Moody's views ChemChina's Baseline Credit Assessment
(BCA) of ba3 as a significant constraint to Syngenta's rating,
although the rating agency continues to position Syngenta's rating
one notch above it, given the latter's strong business profile and
adequate standalone financial profile.

Nevertheless, the proposed joint restructuring of ChemChina and
Sinochem Group (Sinochem) through a merger as well as the planned
IPO of Syngenta Group Co., Ltd (Syngenta Group), an interim holding
company of Syngenta AG, are credit positive for ChemChina and by
extension also for Syngenta. Should these transaction result in an
upgrade of ChemChina's BCA then this could also lead to an upgrade
of Syngenta's ratings. However, at this point, details about both
transactions are not yet clear such as the capital structure of the
combined ChemChina and Sinochem Group and the magnitude of cash
proceeds and the use of the proceeds from the planned IPO of
Syngenta Group. Accordingly, Moody's does not see an immediate
rating impact from either of the planned transactions.

Syngenta's stand-alone credit profile remained relatively stable
since the acquisition by ChemChina. After a difficult 2019 with
muted overall sales growth mainly because of severe flooding in the
US, delayed planting and reduced acres, and record drought in
Australia, Syngenta achieved 5% sales growth in 2020 (13% growth
based on a constant exchange rate), compared with 2019. Both
segments, Crop Protection and Seeds, contributed largely equally to
the sales growth in 2020. Syngenta's Moody's adjusted EBITDA
improved slightly by 3% to $2,337 million compared with $2,267
million in 2019 as adverse foreign exchange movements prevented a
more pronounced EBITDA increase. Syngenta's deleveraging was held
back in recent years by the $1.4 billion acquisition of Nidera
Seeds in 2018, a total of $1.5 billion of settlement payments for
the MIR 162 Corn Litigation in 2018 and 2019 and dividend payments
of $900 million in 2019 and $700 million in 2020.

Despite Moody's projection of sales and EBITDA growth in 2021-22,
the rating agency only expects a moderate improvement of Syngenta's
key credit metrics as free cash flow generation should remain low
due to dividend payments and potential cash outflow for bolt-on
acquisitions.

Syngenta's credit profile continues to benefit from its strong
product offerings, which underpin the group's solid positions in
the global crop protection and seeds markets, characterised by
robust long-term demand fundamentals and high barriers for generic
competitors. Also, the acquisition was highly strategic for
ChemChina and the Government of China (A1 stable); therefore,
Moody's expects the owner to not endanger Syngenta's growth
prospects by putting undue pressure on its financial position.

LIQUIDITY

Moody's views Syngenta's liquidity as adequate. Notably, the
company's exposure to the inherent seasonality of agricultural
activities leads to significant fluctuations in its working capital
requirements (and debt levels) throughout the year. A significant
buildup of working capital generally takes place during the winter
and spring seasons of the Northern Hemisphere, resulting in peak
commercial paper (CP) issuance in the first and second quarters of
the year before unwinding during the summer, as the group collects
receivables from growers.

As of the end of 2020, Syngenta had cash balances of $2.5 billion,
as well as a $3.0 billion committed revolving credit facility (RCF)
maturing in 2024. The RCF was undrawn and fully available at the
end of 2020. The company also has access to a $2.5 billion Global
Commercial Paper program which was undrawn at the end of 2020 but
the average outstanding balance under the program was $996 million
in 2020.

In January 2021, Syngenta commenced a cash tender offer for its
outstanding 2042 and 2048 notes and received tenders of $278
million. At the end of 2020, Syngenta had short term debt of around
$1.9 billion (including a $750 million bond which matured in April
2021) and additional debt maturities of around $0.7 billion in
2022. Together with Moody's forecast of slightly positive FCF
(after dividends) in 2021-22, Syngenta should have sufficient
liquidity to meet its debt maturities in 2021-22.

RATIONALE FOR STABLE OUTLOOK

The stable rating outlook reflects the recovery in Syngenta's
operating profitability from the weak performance in 2019; and
Moody's expectation that it will continue to record earnings growth
in 2021-22, supported by its strong product pipeline and further
efficiency gains. The stable outlook also reflects Moody's
expectation that ChemChina will refrain from upstreaming dividends
in excess of 60%-65% of Syngenta's net income.

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

Considering the constraints resulting from ChemChina's highly
leveraged capital structure, an upgrade of Syngenta's Ba2 rating is
likely to be subject to an upgrade of ChemChina's BCA. A
significant debt reduction at ChemChina, for example, as a result
of the monetisation of a minority stake in the new interim holding
company Syngenta Group, could result in positive rating pressure.
Positive rating pressure could also develop as a result of upcoming
joint restructuring of ChemChina and Sinochem Group (Sinochem)
through a merger.

Any prolonged increase in Syngenta's financial leverage that may
result from higher-than-expected dividend payouts (that is, in
excess of 60%-65% of net income) to its parent or a sizeable
debt-funded acquisition, or both, would strain the Ba2 rating.
Additionally, any negative pressure on ChemChina's rating or BCA
could exert downward pressure on Syngenta's rating.

LIST OF AFFECTED RATINGS

Affirmations:

Issuer: Syngenta AG

LT Corporate Family Rating, Affirmed Ba2

Probability of Default Rating, Affirmed Ba2-PD

Other Short-Term Rating, Affirmed NP

Issuer: Syngenta Finance AG

BACKED Senior Unsecured Medium-Term Note Program, Affirmed (P)Ba2

BACKED Senior Unsecured Regular Bond/Debenture, Affirmed Ba2

Issuer: Syngenta Finance N.V.

BACKED Senior Unsecured Commercial Paper, Affirmed NP

BACKED Senior Unsecured Medium-Term Note Program, Affirmed (P)Ba2

BACKED Senior Unsecured Regular Bond/Debenture, Affirmed Ba2

Issuer: Syngenta Wilmington Inc.

BACKED Senior Unsecured Commercial Paper, Affirmed NP

Outlook Actions:

Issuer: Syngenta AG

Outlook, Remains Stable

Issuer: Syngenta Finance AG

Outlook, Remains Stable

Issuer: Syngenta Finance N.V.

Outlook, Remains Stable

Issuer: Syngenta Wilmington Inc.

Outlook, Remains Stable

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Chemical
Industry published in March 2019.

Headquartered in Basel, Switzerland, Syngenta AG (Syngenta) is one
of the world's leading agriculture companies, with reported sales
of $14.3 billion and Moody's-adjusted EBITDA of $2.3 billion in
2020.




=============
U K R A I N E
=============

DNIPRO CITY: Fitch Assigns 'B' LongTerm IDRs, Outlook Stable
------------------------------------------------------------
Fitch Ratings has assigned the Ukrainian City of Dnipro Long-Term
Foreign- and Local-Currency Issuer Default Ratings (IDRs) of 'B'
with Stable Outlooks and a Short-Term Foreign-Currency IDR of 'B'.

The ratings reflect Fitch's view that Dnipro's operating
performance and debt ratios will remain in line with 'B' rated
peers over the medium term, despite an economic downturn triggered
by the coronavirus pandemic. The city's Standalone Credit Profile
(SCP) is assessed at 'b+' and the city's ratings are capped by the
Ukrainian sovereign IDRs (B/Stable).

Dnipro is one of the largest cities in Ukraine with a population of
about a million. The city's economy is industrialised and is
dominated by metallurgy and heavy manufacturing sectors. Dnipro's
wealth metrics are well above the national average, but materially
lag international peers.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

Fitch assesses the city's Risk Profile as Vulnerable, in line with
other Fitch-rated Ukrainian cities. The city's risk profile
combines six factors assessed at Weaker (revenue framework,
expenditure framework, debt and liquidity framework) and considers
the sovereign IDR.

The assessment reflects Fitch's view of very high risk relative to
international peers that the issuer's ability to cover debt service
by the operating balance may weaken unexpectedly over the forecast
horizon either because of lower-than-expected revenue or
expenditure above expectations, or an unanticipated rise in
liabilities or debt-service requirements.

Revenue Robustness: 'Weaker'

The evolving nature of the national fiscal framework, dependence on
a weak counterparty for a material portion of the city's revenue
and weak revenue growth prospects drive the 'Weaker' assessment for
revenue robustness. The city's wealth metrics are well above the
national average, which lags international peers.

Operating revenue is mostly made up of taxes (2020: 79% of
operating revenue), such as personal income tax (PIT; 49% of
operating revenue) and local taxes (2020: 26%). Negative effects of
the coronavirus pandemic, including growing unemployment, lower
wage increases and tax exemptions granted by the state, constrained
tax revenue growth to 7% yoy in 2020 from average growth of 28% in
2017-2019.

Transfers from the state budget substantially declined by 43% in
2020 following amended responsibilities in the social and
healthcare sectors, but still accounted for 16% of total revenue
(mainly educational subsidy). Transfers are sourced from the
central government, which in Fitch's view, impairs revenue
sustainability, especially during periods of economic downturn.

Revenue Adjustability: 'Weaker'

Fitch assesses Dnipro's revenue adjustability at 'Weaker' like all
other Fitch rated Ukrainian cities, because the cities' ability to
generate additional revenue in response to possible economic
downturns is limited. The city has formal tax-setting authority
over local taxes that accounted for 25% of its total revenue in
2020 with land tax and a single tax on SMEs being the largest
contributors. However, affordability of additional taxation in
response to economic downturn is low, as it is constrained by
legally set ceilings and high social-political sensitivity to tax
increases.

Expenditure Sustainability: 'Weaker'

The city's expenditure framework is fragile, leading to Fitch's
'Weaker' assessment of its sustainability. The spending dynamic
during the last five years has been influenced by high inflation
and reallocation of responsibilities, with further reallocation of
responsibilities still likely due to the evolving budgetary system
in Ukraine.

In 2020, the city was largely responsible for education (26% of
total spending in 2020), which is of a non-cyclical nature. In
2020, the pandemic caused extra spending for medical equipment,
tests and disinfection, which the city compensated with opex
savings in some areas (eg. on public administration and schools due
to the pandemic lockdown). The city managed to safeguard its capex,
which rose by about UAH300 million to UAH3.96 billion in 2020 and
accounted for a high 28% of total expenditure. The city's spending
on healthcare may decrease in 2021 following the completion of
state reform and when the pandemic ceases.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs (36% of operating spending in 2020) and current transfers
(33%).

The city's high investment programme, with capex averaging 26% of
the total in 2016-2020, could offer some leeway in the short term
as worsened economic conditions could force the city to
re-distribute part of the funds aimed at development to
socially-oriented spending. Over the longer term, pressure on capex
will persist as the city's infrastructure needs remain high
following significant infrastructure underfinancing for a prolonged
period.

Liabilities & Liquidity Robustness: 'Weaker'

Like other Ukrainian cities, Dnipro operates under a weak national
debt and liquidity management framework due to Ukraine's
underdeveloped debt capital market and relatively short debt
maturities compared with international peers. Domestic funding is
characterised by short- to medium-term maturity of three to five
years and high fixed interest rates, which were lowered in 2020
following cuts to the reference rate (currently 7.5% from April
2021).

Dnipro's net adjusted debt was UAH2.5 billion at end-2020,
comprising five-year loans from local state-owned banks, which bear
11.5%-16.0% annual interest rates and have an amortising structure
with a one-year grace period. Net adjusted debt also includes the
guaranteed debt of municipal companies (end-2020: UAH799 million),
as Fitch assumes the city may support the repayment of debt through
its budget (capital injections and current grants to companies).

In Fitch's rating case, Fitch expects net adjusted debt to increase
towards UAH8.8 billion by end-2025, ie 48% of operating revenue
(20% in 2020). Dnipro aims to implement a project relating to road
infrastructure with EUR32.6 million loan from European Investment
Bank (AAA/Stable) and European Bank for Reconstruction and
Development (AAA/Negative) to be withdrawn from 2022 (with a
20-year repayment period). Additional debt financing will be driven
by a weaker operating balance due to prudent assumptions in tax
revenue growth and operating spending increases, while Fitch
expects the city's investment programme to be maintained.

The city's guaranteed debt is likely to peak at UAH1.8 billion in
2023 when the city's Dniprovska Energy Service Company incurs a
EUR25 million loan from EBRD, aimed at improving energy efficiency
and the city's Light enterprise "Miskvitlo" incurs a EUR18.6
million loan aimed at municipal outdoor lighting.

With its Dnipropetrovsk Metro company, Dnipro has been implementing
a subway construction project. The city is financing it from the
capital grants received from the state, which has incurred loans
from European Bank for Reconstruction and Development
(AAA/Negative) and European Investment Bank (AAA/Stable) (with 15-
and 25-year repayment periods, respectively). The city is not
liable for any capital repayments, but it covers the debt servicing
costs, which were UAH31.7 million in 2020. Completion of the subway
construction is likely in 2024.

Other obligations are UAH218.3 million of interest-free treasury
loans contracted prior to 2015. As these loans were granted to the
city to finance mandates delegated by the central government and
will be written off by the state, Fitch does not include these
treasury loans in its calculation of the city's adjusted debt,
treating it as contingent liabilities.

Liabilities & Liquidity Flexibility: 'Weaker'

Dnipro's available liquidity is limited to the city's own cash
reserves, which are low (end-2020: UAH314 million). The city has no
undrawn committed credit lines in place but has reasonable access
to loans from local banks ('B' rated counterparties) that justifies
Fitch's 'Weaker' assessment of the liquidity profile. There are no
emergency bail-out mechanisms from the national government due to
the sovereign's fragile fiscal capacity and weak public finances,
which are dependent on IMF funding for the smooth repayment of its
external debt.

Debt Sustainability: 'aa category'

Fitch classifies Dnipro as a type B local and regional government,
as it covers debt service from cash flow on an annual basis. Under
Fitch's rating case scenario, the debt payback ratio (net adjusted
debt-to-operating balance) will deteriorate towards 2.9x by 2025
(2020:1.0x), which corresponds to a 'aaa' assessment. However, the
actual debt service coverage ratio (operating balance-to-debt
service, ADSCR) will be weak at about 1.1x (2020:3.7x) in the
rating case, which leads us to override the debt sustainability
assessment to a 'aa' assessment, despite the low fiscal debt burden
of about 48% (2020:20%).

DERIVATION SUMMARY

Dnipro's 'b+' SCP reflects a combination of a 'Vulnerable' risk
profile and a 'aa' debt sustainability assessment. The SCP also
factors in national peer comparison. The city's IDRs are not
affected by any other rating factors, but are constrained by the
sovereign's IDRs.

KEY ASSUMPTIONS

Qualitative Assumptions and Assessments:

Risk Profile: 'Vulnerable'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Weaker'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'aa'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Sovereign Cap: 'B'

Sovereign Floor: 'N/A'

QUANTITATIVE ASSUMPTIONS - ISSUER SPECIFIC

Fitch's rating case scenario is a 'through-the-cycle' scenario,
which incorporates a combination of revenue, cost and financial
risk stresses. It is based on the 2016-2020 figures and 2021-2025
projected ratios. The key assumptions for the scenario include:

-- 7.9% yoy increase in operating revenue on average;

-- 9.0% yoy increase in operating spending on average;

-- Net capital deficit of UAH3.37 billion on average;

-- Apparent cost of debt (including domestic and foreign debt) of
    11.6% and 5-year maturity for new local debt;

-- Increase in guarantee debt of municipal companies due to
    rolling stock investments of the public transport companies.

RATING SENSITIVITIES

FACTORS THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO NEGATIVE
RATING ACTION/DOWNGRADE:

-- Negative rating action on Ukraine's sovereign ratings would
    lead to negative action on Dnipro's ratings;

-- A lowering of the SCP below 'b' driven by a material
    deterioration in the issuer's debt metrics, particularly
    payback sustainably above above 9x and weak actual coverage
    approaching 1x according to Fitch's rating case.

FACTOR THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO POSITIVE
RATING ACTION/UPGRADE:

-- Dnipro's IDRs are currently constrained by the sovereign
    ratings. Therefore, positive rating action on the sovereign
    could lead to positive rating action on Dnipro's IDR.

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.

DISCUSSION NOTE

Committee date: 18 May 2021There was an appropriate quorum at the
committee and the members confirmed that they were free from
recusal. It was agreed that the data was sufficiently robust
relative to its materiality. During the committee no material
issues were raised that were not in the original committee package.
The main rating factors under the relevant criteria were discussed
by the committee members. The rating decision as discussed in this
rating action commentary reflects the committee discussion.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

The city's ratings are capped by the sovereign.

ESG CONSIDERATIONS

The issuer has an ESG Relevance Score of '4' for 'Political
Stability and Rights' due to its exposure to impact of political
pressure or to instability of operations and tendency toward
unpredictable policy shifts which, in combination with other
factors, impacts the rating.

Except for the matters discussed above, the highest level of ESG
credit relevance, if present, is a score of 3. This means ESG
issues are credit-neutral or have only a minimal credit impact on
the issuer, either due to their nature or to the way in which they
are being managed by the issuer.


KHARKOV CITY: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Kharkov's
Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs)
of 'B' with Stable Outlook.

The affirmation reflects Fitch's unchanged view that Kharkov's
operating performance and debt ratios will remain in line with 'B'
rated peers' over the medium term, despite the economic downturn
triggered by the coronavirus pandemic. The city's Standalone Credit
Profile (SCP) has been assessed at 'b+' and the city's ratings
remain capped by the Ukrainian sovereign IDRs (B/Stable).

Kharkov is the second-largest city in Ukraine in terms of
population, which is close to 1.5 million. The city has a
diversified urban economy. The most important sectors are machine
building and food industry. Kharkov's wealth metrics are well above
the national average, but materially lag international peers.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

Fitch assesses the city's Risk Profile as Vulnerable in line with
other Fitch-rated Ukrainian cities. The city's risk profile
combines all six factors assessed at Weaker (revenue framework,
expenditure framework, debt and liquidity framework) and considers
the sovereign IDR.

The assessment reflects Fitch's view of very high risk relative to
international peers that the issuer's ability to cover debt service
by the operating balance may weaken unexpectedly over the forecast
horizon either because of lower-than-expected revenue or
expenditure above expectations, or because of an unanticipated rise
in liabilities or debt-service requirements.

Revenue Robustness: 'Weaker'

The evolving nature of the national fiscal framework, dependence on
a weak counterparty for a material portion of the city's revenue
and weak revenue growth prospects drive the 'Weaker' assessment for
the revenue robustness. Kharkov's wealth metrics are well above the
national average, which materially lags international peers.

Operating revenue is mostly made up of taxes, such as personal
income tax (PIT; 45% of operating revenue in 2020) and local taxes
(30%). The negative effects of the coronavirus pandemic, including
growing unemployment, lower wage increases and tax exemptions
granted by the state, constrained tax revenue growth to 7.4% yoy in
2020 from average growth of 24.3% in 2017-2019. Transfers from the
state budget substantially declined by 52% in 2020 following the
amended responsibilities in the social and healthcare sectors, but
still account for 16% of total revenue (mainly educational
subsidies). The transfers are sourced from the central government,
which in Fitch's view, impairs revenue sustainability, especially
during periods of economic downturn.

Revenue Adjustability: 'Weaker'

Kharkov's ability to generate additional revenue in response to
possible economic downturns is limited, like all Fitch-rated
Ukrainian cities. The city has formal tax-setting authority over
several local taxes and fees, revenue from which accounted for
about 30% of total revenue in 2020. However, the affordability of
additional taxation is low as it is constrained by the low income
of residents and high social-political sensitivity to tax
increases.

Expenditure Sustainability: 'Weaker'

The city's expenditure framework is fragile, leading to Fitch's
'Weaker' assessment of its sustainability. The spending dynamic
during the last five years has been influenced by high, albeit
slowing, inflation and reallocation of spending responsibilities,
with further reallocation of responsibilities still likely owing to
the evolving budgetary system in Ukraine. Currently, the city is
largely responsible for education (29% of total spending in 2020),
which is of a counter-cyclical nature.

In 2020, the pandemic caused extra spending on medical equipment,
tests, disinfection etc. that the city compensated by opex savings
in some areas (eg. public administration and schools due to the
lockdown). The city managed to safeguard its capex, which rose by
about UAH290 million to UAH4.9 billion in 2020 and accounted for a
high 33% of total expenditure, and is the most flexible budget
item.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs (38% of operating spending in 2020) and current transfers
made (21%). Fitch estimates the share of inflexible expenditure at
about 70% of total spending.

The city's high investment programme, with capex averaging 27% of
the total in 2016-2020, could offer some leeway in the short term
as worsened economic conditions could force the city to re-direct
part of the funds aimed at development of socially-oriented
spending. Over the longer term, pressure on capex will persist as
the city's infrastructure needs remain high due to significant
underfunding over a prolonged period.

Liabilities & Liquidity Robustness: 'Weaker'

Like other Ukrainian cities, Kharkov operates under a weak national
debt and liquidity management framework due to Ukraine's
underdeveloped debt capital market and relatively short debt
maturities compared with international peers. Domestic funding is
characterised by short- to medium-term maturity of three to five
years and high fixed interest rates, which were lowered in 2020
following cuts to the reference rate (currently 7.5% from April
2021).

Kharkov's net adjusted debt amounted to UAH1.4 billion at end-2020,
comprising five-year bonds bearing fixed and floating rates. Net
adjusted debt also includes the guaranteed debt of municipal
companies (end-2020: UAH607 million), as Fitch assumes the city may
support the repayment of debt through its budget (capital
injections and current grants to companies). In Fitch's rating
case, net adjusted debt is expected to increase towards UAH14
billion by end-2025, ie 70% of operating revenue (about 10% in
2020). This will be driven by a weakening operating balance due to
prudent assumptions for tax revenue growth and operating spending
increases, while the city's investment programme is expected to be
maintained.

Net adjusted debt growth will be also driven by guaranteed debt of
the municipal companies, which is likely to rise to UAH4.8 million
in 2025 when the city's transport companies successfully secures
the European Investment Bank (AAA/Stable) and European Bank for
Reconstruction and Development (AAA/Negative) loans on rolling
stock renewal.

Other obligations are UAH360.9 million of interest-free treasury
loans contracted prior to 2015. As these loans were granted to the
city to finance mandates delegated by the central government and
will be written off by the state, Fitch does not include these
treasury loans in its calculation of the city's adjusted debt,
treating them as contingent liabilities.

Liabilities & Liquidity Flexibility: 'Weaker'

Kharkov's available liquidity is limited to own cash reserves
(end-2020: UAH1.2 billion). The city has no undrawn committed
credit lines in place but has reasonable access to loans from local
banks ('b' rated counterparties) that justifies Fitch's 'Weaker'
assessment of the liquidity profile. There are no emergency
bail-out mechanisms from the national government due to the
sovereign's fragile capacity and therefore weak public finance
position, which is dependent on IMF funding for the smooth
repayment of its external debt.

Debt Sustainability: 'aa category'

Under Fitch's rating case scenario, the debt payback ratio (net
adjusted debt-to-operating balance) will weaken towards 3.4x by
2025 (2020: 0.3x), which corresponds to a 'aaa' assessment.
However, the short maturity of the debt will lead to a weak actual
debt service coverage ratio (operating balance-to-debt service), at
1.2x in Fitch's rating case (24x in 2020). This leads us to a 'aa'
debt sustainability, also justified by the projected fiscal debt
burden growing towards 70% of operating revenue.

Kharkov has an ESG Relevance Score of '4' for 'Political Stability
and Rights' due to its exposure to impact of political pressure or
to instability of operations and tendency toward unpredictable
policy shifts which, in combination with other factors, impacts the
rating.

DERIVATION SUMMARY

Kharkov's 'b+' SCP reflects a combination of a Vulnerable risk
profile and a 'aa' debt sustainability assessment. The SCP also
factors in national peer comparison. The city's IDRs are not
affected by any other rating factors, but are constrained by the
sovereign's IDRs.

KEY ASSUMPTIONS

Qualitative assumptions and assessments:

Risk Profile: 'Vulnerable'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Weaker'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'aa'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Sovereign Cap: 'B'

Sovereign Floor: 'N/A'

QUANTITATIVE ASSUMPTIONS - ISSUER SPECIFIC

Fitch's rating case scenario is a 'through-the-cycle' scenario,
which incorporates a combination of revenue, cost and financial
risk stresses. It is based on the 2016-2020 figures and 2021-2025
projected ratios. The key assumptions for the scenario include:

-- 7.6% yoy increase in operating revenue on average;

-- 10.3% yoy increase in operating spending on average;

-- Net capital deficit of UAH5,130 million on average;

-- Apparent cost of debt of 14.2% and 5-year maturity for new
    local debt;

-- Increase in the city's guaranteed debt following rolling stock
    investments of the city's public transport companies.

RATING SENSITIVITIES

FACTORS THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO NEGATIVE
RATING ACTION/DOWNGRADE:

-- Negative action on Ukraine's sovereign ratings would lead to
    negative action on Kharkov's ratings;

-- A lowering of the SCP below 'b', driven by a material
    deterioration in the city's debt metrics, particularly payback
    sustainably above 9x and weak actual coverage approaching 1x
    according to Fitch's rating case.

FACTOR THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO POSITIVE
RATING ACTION/UPGRADE:

-- Kharkov's IDRs are currently constrained by the sovereign
    ratings. Therefore, positive rating action on the sovereign
    could lead to positive rating action on Kharkov.

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.

ESG CONSIDERATIONS

The issuer has an ESG Relevance Score of '4' for 'Political
Stability and Rights' due to its exposure to impact of political
pressure or to instability of operations and tendency toward
unpredictable policy shifts which, in combination with other
factors, impacts the rating.

Except for the matters discussed above, the highest level of ESG
credit relevance, if present, is a score of 3. This means ESG
issues are credit-neutral or have only a minimal credit impact on
the issuer, either due to their nature or to the way in which they
are being managed by the issuer.

The 'Biodiversity and Natural Resource Management' score has been
revised to '3' from '2' to align with the LRG portfolio.


KRYVYI RIH CITY: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Kryvyi Rih's
Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs)
at 'B' with Stable Outlook.

The affirmation reflects Fitch's unchanged view that Kryvyi Rih's
operating performance and debt ratios will remain in line with 'B'
rated peers' over the medium term, despite the economic downturn
triggered by the coronavirus pandemic. The ratings reflect Kryvyi
Rih's Standalone Credit Profile (SCP) of 'b' resulting from a
combination of 'Vulnerable' risk profile and a 'a' debt
sustainability assessment.

Kryvyi Rih is the second-largest city in the Dnipropetrovsk Region.
The population of Kryvyi Rih is about 620,000 or 20% of the
region's. Kryvyi Rih is a large industrial city and its economy is
dominated by ferrous mining and processing industry. The city's
wealth metrics are above the national average, but materially lag
international peers.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

Fitch assesses the city's Risk Profile as Vulnerable in line with
other Fitch-rated Ukrainian cities. The city's risk profile
combines all six factors assessed at Weaker (revenue framework,
expenditure framework, debt and liquidity framework) and considers
the sovereign's IDR. The assessment reflects Fitch's view of very
high risk relative to international peers that the issuer's ability
to cover debt service by the operating balance may weaken
unexpectedly over the forecast horizon either because of
lower-than-expected revenue or expenditure above expectations, or
because of an unanticipated rise in liabilities or debt-service
requirements.

Revenue Robustness: 'Weaker'

The evolving nature of the national fiscal framework, dependence on
a weak counterparty for a material portion of the city's revenue
and weak revenue growth prospects drive the 'Weaker' assessment for
revenue robustness. Kryvyi Rih's wealth metrics are above the
national average, which materially lags international peers.

Operating revenue is mostly made up of taxes (80% of operating
revenue in 2020), such as personal income tax (PIT; 51% of
operating revenue) and local taxes, mainly property tax and single
tax (23%). Negative effects of the coronavirus pandemic, including
growing unemployment, lower wage increases and tax exemptions
granted by the state, led to stagnant tax revenue in 2020 versus
average growth of 27% in 2017-2019. Transfers from the state budget
substantially declined by 49% in 2020, following amended
responsibilities in the social and healthcare sectors, but still
accounted for 19% of total revenue (mainly educational subsidies).
The transfers are sourced from the central government, which in
Fitch's view, impairs revenue sustainability, especially during
periods of economic downturn.

Revenue Adjustability: 'Weaker'

Kryvyi Rih's ability to generate additional revenue in response to
possible economic downturns is limited, like all other Fitch-rated
Ukrainian cities. The city has formal tax-setting authority over
several local taxes and fees, revenue from which accounted for
about 22% of total revenue in 2020. However, the affordability of
additional taxation is low, as it is constrained by the low income
of residents and high socio-political sensitivity to tax
increases.

Expenditure Sustainability: 'Weaker'

The city's expenditure framework is fragile, leading to Fitch's
'Weaker' assessment of its sustainability. The spending dynamic
during the last five years has been influenced by high inflation
and reallocation of spending responsibilities, with further
reallocation of responsibilities still likely due to the evolving
budgetary system in Ukraine. Currently, the city is largely
responsible for education (39% of total spending in 2020), which is
of a counter-cyclical nature.

In 2020, the pandemic caused extra spending on medical equipment,
tests, disinfection etc. that the city compensated by opex savings
in some areas (eg. on public administration and schools due to the
lockdown), as well as received extra transfers from the state for
the purchase of medical equipment. The city managed to safeguard
its capex, which rose by UAH120 million to UAH909 million in 2020
and accounted for 13% of total expenditure.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs (43% of operating spending in 2020) and current transfers
made, including social benefits paid to the population (37%). Fitch
estimates the share of inflexible expenditure at about 70% of total
spending.

The city's investment programme (13% of total spending in 2020)
could offer some leeway in the short term as worsened economic
conditions could force the city to re-direct part of the funds
aimed at development of socially-oriented spending. Over the longer
term, pressure on capex will persist as the city's infrastructure
needs remain high due to significant underfinancing over a
prolonged period.

Liabilities & Liquidity Robustness: 'Weaker'

Like other Ukrainian cities, Kryvyi Rih operates under a weak
national debt and liquidity management framework due to Ukraine's
underdeveloped debt capital market and relatively short debt
maturities compared with international peers. Domestic funding is
characterised by short- to medium-term maturity of three to five
years and high fixed interest rates, which were lowered in 2020
following cuts to the reference rate (currently 7.5% from April
2021).

Kryvyi Rih's net adjusted debt was UAH255 million at end-2020,
comprising the guaranteed debt of the city's transport company. The
city had no direct debt outstanding.

In Fitch's rating case, net adjusted debt is expected to increase
towards UAH3.9 billion by end-2025, ie 41% of operating revenue (4%
in 2019). Kryvyi Rih plans to attract a EUR31.6 million loan from
European Investment Bank (AAA/Stable) to finance the modernisation
of its heating system. The loan will be channeled through the
Ukrainian Ministry of Finance. It has a tenor of 22 years and a
five-year grace period. Additional debt financing will be driven by
a weaker operating balance, due to prudent assumptions for tax
revenue growth and operating spending increases, while the city's
investment programme is expected to be maintained.

The rise in net adjusted debt will also be due to the city's
guaranteed debt, which is likely to rise to UAH1.9 billion in 2024
(to about EUR50 million) following the city issuing new guarantees
to its municipal companies to support their investments, especially
in public transport and heating. Fitch includes guaranteed debt
into net adjusted debt as Fitch assumes the city may support the
repayment of debt through its budget (capital injections and
current grants to companies).

Other obligations are UAH159 million of interest-free treasury
loans contracted prior to 2015. As these loans were granted to the
city to finance mandates delegated by the central government and
will be written off by the state, Fitch does not include these
treasury loans in its calculation of the city's adjusted debt.

Liabilities & Liquidity Flexibility: 'Weaker'

Kryvyi Rih's available liquidity is limited to own cash reserves,
which are low (end-2020: UAH100 million). The city has no undrawn
committed credit lines in place but has reasonable access to loans
from local banks ('B' rated counterparties) that justifies Fitch's
'Weaker' assessment of the liquidity profile. There are no
emergency bail-out mechanisms from the national government due to
the sovereign's fragile capacity and therefore weak public finance
position, which is dependent on IMF funding for the smooth
repayment of its external debt.

Debt Sustainability: 'a category'

Under Fitch's rating case scenario, the debt payback ratio (net
adjusted debt-to-operating balance) will deteriorate towards 9x by
2025, which corresponds to a 'aa' assessment. However, actual debt
service coverage ratio (operating balance-to-debt service, ADSCR)
will be weak at below 1x in Fitch's rating case which leads us to a
'a' debt sustainability, despite a low fiscal debt burden below 50%
of operating revenue.

Kryvyi Rih has an ESG Relevance Score of '4' for 'Political
Stability and Rights' due to its exposure to impact of political
pressure or to instability of operations and tendency toward
unpredictable policy shifts which, in combination with other
factors, impacts the rating.

Except for the matters discussed above, the highest level of ESG
credit relevance, if present, is a score of 3. This means ESG
issues are credit-neutral or have only a minimal credit impact on
the issuer, either due to their nature or to the way in which they
are being managed by the issuer.

DERIVATION SUMMARY

Kryvyi Rih's 'b' SCP reflects a combination of a 'Vulnerable' risk
profile and a 'a' debt sustainability assessment. The SCP also
factors in national peer comparison. The city's IDRs are not
affected by any other rating factors and are equal to the SCP.

KEY ASSUMPTIONS

Qualitative assumptions and assessments:

Risk Profile: 'Vulnerable'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Weaker'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'a'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Sovereign Cap: 'B'

Sovereign Floor: 'N/A'

QUANTITATIVE ASSUMPTIONS - ISSUER SPECIFIC

Fitch's rating case scenario is a 'through-the-cycle' scenario,
which incorporates a combination of revenue, cost and financial
risk stresses. It is based on the 2016-2020 figures and 2021-2025
projected ratios. The key assumptions for the scenario include:

-- 8.2% yoy increase in operating revenue on average;

-- 9% yoy increase in operating spending on average;

-- Net capital deficit of about UAH840 million on average;

-- Apparent cost of debt (including domestic and foreign debt) of
    6.6% and five-year maturity for new local debt;

-- Increase in the city's guaranteed debt due to investments of
    its municipal companies in public transport and heating
    infrastructure.

RATING SENSITIVITIES

FACTORS THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO NEGATIVE
RATING ACTION/DOWNGRADE:

-- Debt payback ratio exceeding 9x on a sustained basis and weak
    actual coverage below 1x according to Fitch's rating case;

-- Negative rating action on the sovereign would lead to negative
    action on the city's ratings.

FACTOR THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO POSITIVE
RATING ACTION/UPGRADE:

-- The debt payback ratio falling below 5x or ADSCR improving to
    above 2x on a sustained basis in Fitch's rating case, along
    with an upgrade of the sovereign.

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.

ESG CONSIDERATIONS

Kryvyi Rih City has an ESG Relevance Score of '4' for Political
Stability and Rights due its exposure to impact of political
pressure or to instability of operations and tendency toward
unpredictable policy shifts which, in combination with other
factors, impacts the rating.

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.


KYIV CITY: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable
----------------------------------------------------------
Fitch Ratings has affirmed the City of Kyiv's Long-Term
Foreign-Currency and Local-Currency Issuer Default Ratings (IDRs)
at 'B'. The Outlooks are Stable.

The affirmation reflects Fitch's unchanged view that Kyiv's
operating performance and debt ratios will remain in line with 'B'
rated peers' over the medium term, despite the economic downturn
triggered by the coronavirus pandemic. The city's Standalone Credit
Profile (SCP) has been assessed at 'b+' and the city's ratings
remain capped by the Ukrainian sovereign IDRs (B/Stable).

Kyiv is Ukraine's capital and the largest and wealthiest city in
the country, with a population approaching three million
inhabitants. The city's gross product accounted for about 23% of
the country's GDP in 2018 and per capita it was 336% of the
national. The city is an important administrative, industrial,
educational and cultural centre with services dominating local
economy (gross value added of 86.6% in 2018). The unemployment rate
(according to the International Labour Organization's methodology)
was 7.1% at end 3Q20 but below the national average of 9.6%.
According to budgetary regulation, Kyiv has the right to borrow on
the domestic market and externally, which is unique in Ukraine.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

Fitch assesses the city's Risk Profile as Vulnerable in line with
other Fitch-rated Ukrainian cities. The city's risk profile
combines all six factors assessed at Weaker (revenue framework,
expenditure framework, debt and liquidity framework) and considers
the sovereign IDR. The assessment reflects Fitch's view of very
high risk relative to international peers that the issuer's ability
to cover debt service by the operating balance may weaken
unexpectedly over the forecast horizon (2021-2025) either because
of lower-than-expected revenue or expenditure above expectations,
or because of an unanticipated rise in liabilities or debt-service
requirements.

Revenue Robustness: 'Weaker'

The evolving nature of the national fiscal framework, dependence on
a weak counterparty for a material portion of the city's revenue
and weak revenue growth prospects drive the 'Weaker' assessment for
revenue robustness. The city's wealth metrics are above the
national average, but lag international peers. Operating revenue is
mostly made up of taxes (80% in 2020), such as personal income tax
(PIT; 43% of operating revenue) and local taxes, mainly property
tax and single tax (25%). Negative effects of the coronavirus
pandemic such as growing unemployment, lower wage increases and tax
exemptions, caused tax revenue growth to slow to 5% yoy in 2020
compared with the average growth of 32% in 2016-2019.

Transfers from the state budget have substantially declined by 37%
in 2020 following the amended responsibilities in the social and
healthcare sectors, and now account for 15% of operating revenue
(mainly educational subsidies), compared with 22% in 2019. The
transfers are sourced from the central government, which in Fitch's
view, impairs revenue sustainability, especially during periods of
economic downturn.

Revenue Adjustability: 'Weaker'

Fitch assesses Kyiv's revenue adjustability, like all Fitch-rated
Ukrainian municipalities, at 'Weaker' because the cities' ability
to generate additional revenue in response to possible economic
downturns is limited. Cities have formal tax-setting authority over
several local taxes and fees that accounted for 24% of total
revenue in 2020. However, the affordability of additional taxation
in response to the economic downturn is low, as it is constrained
by legally set ceilings and high social-political sensitivity to
tax increases.

Expenditure Sustainability: 'Weaker'

The city's expenditure framework is fragile, leading to Fitch's
'Weaker' assessment of its sustainability. The spending dynamic
during the last five years has been influenced by high inflation
and reallocation of responsibilities. In 2020, the city was largely
responsible for education (34% of total spending in 2020),
transport (19%) and healthcare (14%), all of which are
non-cyclical. The pandemic caused extra spending on medical
equipment, tests, and disinfection that could be compensated by
savings due to the pandemic lockdown of schools and administration.
The share of current costs for healthcare may go down in 2021, with
state reform and when the pandemic ceases. Kyiv made also capex
cuts, which decreased by UAH1.8 billion to UAH16.8 billion in 2020
as capex is the most flexible budget item, accounting for almost
30% of total expenditure.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs (29% of total expenditure in 2020) and current transfers made
(25%). In 2020, the share of staff costs and transfers made
increased compared with previous years (from 23% each in 2019),
which was because of the legislative changes in responsibilities,
minimum wage and average salary increases, inflation and Covid-19
related expenses.

Kyiv had to support its municipal companies, eg public transport
companies that provided comparable transport service but with lower
passenger traffic due to the lockdown. Fitch estimates the share of
inflexible expenditure is about 70% of spending. The city's
investment programme can offer some leeway in the short term as
worsened economic conditions could force the city to re-direct part
of the funds aimed at the development of socially-oriented
spending. Over the longer term, pressure on capex will persist as
the city's infrastructure needs remain high due to significant
underfinancing over a prolonged period.

Liabilities & Liquidity Robustness: 'Weaker'

Fitch assesses Kyiv's liquidity and liabilities robustness at
'Weaker'. LRGs operate under a weak national debt and liquidity
management framework due to Ukraine's underdeveloped debt capital
market and relatively short debt maturities compared with
international peers. Domestic funding is characterised by short- to
medium-term maturity of three to five years and high fixed interest
rates, which were lowered in 2020 following cuts to the reference
rate (currently 7.5% from April 2021).

At end-2020, Kyiv's debt portfolio comprised a US
dollar-denominated bond of USD115.1 million, exposing the city to
unhedged FX risk and short-term domestic bonds of UAH770 million
that are already redeemed. Kyiv's outstanding bond (loan
participation notes; LPN; issued by PBR Kyiv Finance PLC in
September 2018) bear a 7.5% semi-annual coupon and is due in in
four equal bi-annual instalments in 2021 and 2022 (always June and
December).

During 2020, the city also had USD175.5 million obligations to
Ukraine's Ministry of Finance, which Fitch treated as an
inter-governmental loan. The obligation resulted in the exchange of
Kyiv's Eurobonds into Ukraine sovereign debt in December 2015, but
according to the terms of the debt exchange, it had to be fully
repaid in 2020.

Like other Ukrainian cities rated by Fitch, Kyiv also had
interest-free treasury loans contracted prior to 2014 (unchanged at
UAH3.7 billion). As these loans were granted to the city to finance
mandates delegated by the central government and will be written
off by the state, Fitch does not include these treasury loans in
its calculation of city's adjusted debt and treats them as
contingent risk.

Kyiv supports investments made through the municipal companies,
taking advantage of loans from international institutions such as
European Bank for Reconstruction and Development (AAA/Negative) or
Northern Ecological Finance Corporation (NEFCO). The city had
several outstanding guarantees totalling about EUR10.5 million at
end-2020 to support projects in public transportation,
infrastructure and energy-saving. The guaranteed loans are
euro-denominated and relate mainly to two city-owned companies,
Kyivpastrans and Kyivmetropoliten. The guarantees expire between
2021 and 2033. Fitch has decided to include the guaranteed debt of
the city's companies into "Other Fitch-classified debt" and thus in
net adjusted debt of the city as Kyiv supports the repayment of
debt (including FX risk) through its budget (capital injections and
current grants to companies).

Liabilities & Liquidity Flexibility: 'Weaker'

Like other Ukrainian cities, Kyiv's available liquidity is
restricted to the city's own cash reserves and the loans provided
by local banks ('B' rated counterparties), which justifies a
'Weaker' assessment for the liquidity profile. There are no
emergency bail-out mechanisms from the national government due to
the sovereign's fragile capacity and therefore weak public finance
position, which is dependent on IMF funding for the smooth
repayment of its external debt.

Kyiv's cash reserves increased to UAH3.6 billion as of 1 January
2021 compared with UAH2.77 billion the year before, which may have
been inflated by the revenues from the domestic bond issuance in
December 2020. The city has no undrawn committed credit lines in
place and uses predominantly short-term financing.

Debt Sustainability: 'aa category'

Under Fitch's rating case scenario the debt payback ratio (net
adjusted debt-to-operating balance) will remain strong and below 2x
in 2021-2025 (2020: zero), which corresponds to a strong 'aaa' debt
sustainability assessment. However, the short maturity of the bonds
and Fitch-projected debt will lead to a weaker actual debt service
coverage ratio (ADSCR), which may fall to 1.9x in the rating case
('a' category) from a very strong 70.2x in 2020. The corresponding
higher refinancing risk results in a debt sustainability assessment
in the 'aa' category, despite a low fiscal debt burden projected to
remain below 30% of operating revenue ('aaa' category).

In Fitch's rating case, net adjusted debt is expected to increase
towards UAH19 billion by end-2025, ie 25% of operating revenue (0%
in 2020). This will be driven by the city's rising direct debt
following implementation of projects in public transport and
infrastructure investments with annual capital expenditure of UAH19
billion on average in 2021-2025, compared with UAH18 billion on
average in 2018-2020. In addition, Fitch expects the operating
balance to weaken to UAH16 billion annually on average from UAH19
million in 2018-2020, due to prudent assumptions for tax revenue
growth and operating spending increases, while the city's
investment programme is expected to be maintained.

DERIVATION SUMMARY

Kyiv's 'b+' SCP reflects a combination of a 'Vulnerable' risk
profile and a 'aa' debt sustainability assessment. The SCP also
factors in national peer comparison. The city's IDRs are not
affected by any other rating factors, but are constrained by the
sovereign's IDRs.

DEBT RATINGS

Fitch rates Kyiv's US dollar-denominated bond of USD115.1 million
maturing in December 2022 at 'B' as it is treated as direct debt of
the city. The LPNs are issued by PBR Kyiv Finance PLC, the city's
financial SPV, but are issued on a limited recourse basis for the
sole purpose of financing a loan made to the city. They therefore
represent direct, unconditional, unsecured and unsubordinated
obligations of Kyiv and at all times rank pari passu with all the
city's unsecured and unsubordinated obligations.

KEY ASSUMPTIONS

Qualitative assumptions and assessments:

Risk Profile: 'Vulnerable'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Weaker'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'aa'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Sovereign Cap: 'B'

Sovereign Floor: 'N/A'

QUANTITATIVE ASSUMPTIONS - ISSUER SPECIFIC

Fitch's rating case scenario is a 'through-the-cycle' scenario,
which incorporates a combination of revenue, cost and financial
risk stresses. It is based on the 2016-2020 figures and 2021-2025
projected ratios. The key assumptions for the scenario include:

-- Yoy 6.0% increase in operating revenue on average;

-- Yoy 8.1% increase in operating spending on average;

-- Net capital deficit of UAH18.5 billion on average;

-- Apparent cost of debt (in domestic and foreign currency) of
    13.8% and three-year maturity for new debt;

-- Increase in indirect risk due to rolling stock investments of
    the public transport company.

RATING SENSITIVITIES

FACTORS THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO NEGATIVE
RATING ACTION/DOWNGRADE:

-- Negative rating action on the sovereign would lead to negative
    action on the city's ratings;

-- A lowering of the SCP below 'b', driven by a material
    deterioration in the city's debt metrics, particularly payback
    sustainably above 9x and weak actual coverage approaching 1x
    according to Fitch's rating case.

FACTOR THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO POSITIVE
RATING ACTION/UPGRADE:

-- The city's IDRs are currently constrained by the sovereign
    ratings. Therefore, positive rating action on the sovereign
    could lead to positive action on the city's IDR.

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.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

The city's ratings are capped by the sovereign ratings.

ESG CONSIDERATIONS

The issuer has an ESG Relevance Score of '4' for 'Political
Stability and Rights' due to its exposure to impact of political
pressure or to instability of operations and tendency toward
unpredictable policy shifts which, in combination with other
factors, impacts the rating.

Except for the matters discussed above, the highest level of ESG
credit relevance, if present, is a score of 3. This means ESG
issues are credit-neutral or have only a minimal credit impact on
the issuer, either due to their nature or to the way in which they
are being managed by the issuer.


LVIV CITY: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable
----------------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Lviv's Long-Term
Foreign- and Local-Currency Issuer Default Ratings (IDRs) of 'B'
with Stable Outlook.

The affirmation reflects Fitch's unchanged view that Lviv's
operating performance and debt ratios will remain in line with 'B'
rated peers' over the medium term, despite the economic downturn
triggered by the coronavirus pandemic. The city's Standalone Credit
Profile (SCP) has been assessed at 'b+' and the city's ratings
remain capped by the Ukrainian sovereign IDRs (B/Stable).

Lviv is the capital city of Lviv Region located in the west of
Ukraine. The population of the city is about 700,000 or 30% of the
region's population. The city's economy is diversified across
manufacturing and services. Lviv's wealth metrics are in line with
the national average, but materially lag international peers.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

Fitch assesses the city's Risk Profile as Vulnerable in line with
other Fitch-rated Ukrainian cities. The city's risk profile
combines all six factors assessed at Weaker (revenue framework,
expenditure framework, debt and liquidity framework) and considers
the sovereign IDR. The assessment reflects Fitch view of very high
risk relative to international peers that the issuer's ability to
cover debt service by the operating balance may weaken unexpectedly
over the forecast horizon either because of lower-than-expected
revenue or expenditure above expectations, or because of an
unanticipated rise in liabilities or debt-service requirements.

Revenue Robustness: 'Weaker'

The evolving nature of the national fiscal framework, dependence on
a weak counterparty for a material portion of the city's revenue
and weak revenue growth prospects drive the 'Weaker' assessment for
revenue robustness. Lviv's wealth metrics are in the line with the
national average, which materially lags international peers.

Operating revenue is mostly made up of taxes (2020: 78% of
operating revenue), such as personal income tax (PIT; 50% of
operating revenue in 2020) and local taxes, mainly property tax and
single tax (24%). Negative effects of the coronavirus pandemic,
including growing unemployment, lower wage increases and tax
exemptions granted by the state, constrained tax revenue growth to
6.1% yoy in 2020 from average growth of 25% in 2017-2019. Transfers
from the state budget substantially declined by 46% in 2020
following amended responsibilities in the social and healthcare
sectors, but still account for 17% of total revenue (mainly
educational subsidies). The transfers are sourced from the central
government, which in Fitch's view, impairs revenue sustainability,
especially during periods of economic downturn.

Revenue Adjustability: 'Weaker'

Lviv's ability to generate additional revenue in response to
possible economic downturns is limited, like all other Fitch-rated
Ukrainian cities. The city has formal tax-setting authority over
several local taxes and fees, revenue from which accounted for
about 23% of total revenue in 2020. However, the affordability of
additional taxation is low, as it is constrained by the low income
of residents and high socio-political sensitivity to tax
increases.

Expenditure Sustainability: 'Weaker'

The city's expenditure framework is fragile, leading to Fitch's
'Weaker' assessment of its sustainability. The spending dynamic
during the last five years has been influenced by high, albeit
slowing, inflation and reallocation of spending responsibilities,
with further reallocation of responsibilities still likely due to
the evolving budgetary system in Ukraine. Currently, the city is
largely responsible for education (32% of total spending in 2020),
which is of a counter-cyclical nature.

In 2020, the pandemic caused extra spending on medical equipment,
tests, disinfection etc. that the city compensated by opex savings
in some areas (eg. on public administration and schools due to the
lockdown). The city managed to safeguard its capex, which rose by
about UAH235 million to UAH3.2 billion in 2020 and accounted for a
high 33% of total expenditure, which is the most flexible budget
item.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs (52% of operating spending in 2020) and current transfers
made (33%).

The city's high investment programme, with capex averaging 28% of
the total in 2016-2020), could offer some leeway in the short term
as worsened economic conditions could force the city to re-direct
part of the funds aimed at development of socially-oriented
spending. Over the longer term, pressure on capex will persist as
the city's infrastructure needs remain high due to significant
underfinancing over a prolonged period.

Liabilities & Liquidity Robustness: 'Weaker'

Like other Ukrainian cities, Lviv operates under a weak national
debt and liquidity management framework due to Ukraine's
underdeveloped debt capital market and relatively short debt
maturities compared with international peers. Domestic funding is
characterised by short- to medium-term maturity of three to five
years and high fixed interest rates, which were lowered in 2020
following cuts to the reference rate (currently 7.5% from April
2021).

Lviv's net adjusted debt was UAH2.9 billion at end-2020, comprising
private placement bonds from local state-owned banks, which bear
12.5%-18.0% annual interest rates and have an amortising structure
with one-year grace period and two to five years repayment. Net
adjusted debt includes also guaranteed debt of municipal companies
(end-2020: UAH1.6 million) as Fitch assumes the city may support
the repayment of debt through its budget (capital injections and
current grants to companies). The guaranteed debt bears FX risk, as
it is mainly in euros and US dollars, but has long-term repayment
periods, mainly from 10 to 20 years.

In Fitch's rating case, net adjusted debt is expected to increase
towards UAH9 billion by end-2025, ie 75% of operating revenue (34%
in 2020), driven by rising guaranteed debt of the city's municipal
companies following implementation of projects in public transport,
solid waste, heating and water and wastewater (UAH4 billion in
2025). The increase will also reflect a weakening operating balance
due to prudent assumptions for tax revenue growth and operating
spending increases, while the city's investment programme is
expected to be maintained.

Other obligations are UAH240 million of interest-free treasury
loans contracted prior to 2015. As these loans were granted to the
city to finance mandates delegated by the central government and
will be written off by the state, Fitch does not include these
treasury loans in its calculation of the city's adjusted debt,
treating them as contingent liabilities.

Liabilities & Liquidity Flexibility: 'Weaker'

Lviv's available liquidity is limited to own cash reserves
(end-2020: UAH282 million). The city has no undrawn committed
credit lines in place but has reasonable access to loans from local
banks ('B' rated counterparties) that justifies Fitch's 'Weaker'
assessment of the liquidity profile. There are no emergency
bail-out mechanisms from the national government due to the
sovereign's fragile capacity and therefore weak public finance
position, which is dependent on IMF funding for the smooth
repayment of its external debt.

Debt Sustainability: 'aa category'

Under Fitch's rating-case scenario, the debt payback ratio (net
adjusted debt-to-operating balance) will weaken towards 3.2x by
2025 (2020: 1.3x), which corresponds to a 'aaa' assessment.
However, the short maturity and high cost of debt will lead to a
weak actual debt service coverage ratio (operating balance-to-debt
service, ADSCR), at 1.5x in Fitch's rating case (15x in 2020). The
corresponding higher refinancing risk results in a 'aa' debt
sustainability assessment, also justified by the fiscal debt burden
of about 75% of operating revenue.

DERIVATION SUMMARY

Lviv's 'b+' SCP reflects a combination of a Vulnerable risk profile
and a 'aa' debt sustainability assessment. The SCP also factors in
national peer comparison. The city's IDRs are not affected by any
other rating factors, but are constrained by the sovereign's IDRs.

KEY ASSUMPTIONS

Qualitative assumptions and assessments:

Risk Profile: 'Vulnerable'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Weaker'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'aa'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Sovereign Cap: 'B'

Sovereign Floor: 'N/A'

QUANTITATIVE ASSUMPTIONS - ISSUER SPECIFIC

Fitch's rating case scenario is a 'through-the-cycle' scenario,
which incorporates a combination of revenue, cost and financial
risk stresses. It is based on the 2016-2020 figures and 2021-2025
projected ratios. The key assumptions for the scenario include:

-- 7.0% yoy increase in operating revenue on average;

-- 7.6% yoy increase in operating spending on average;

-- Net capital deficit of UAH2,854 million on average;

-- Apparent cost of debt (including domestic and foreign debt) of
    10.2% and 5-year maturity for new local debt;

-- Increase in city's guaranteed debt in line with investment
    projects implementation.

RATING SENSITIVITIES

FACTORS THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO NEGATIVE
RATING ACTION/DOWNGRADE:

-- Negative action on Ukraine's sovereign ratings would lead to
    negative action on Lviv's ratings;

-- A lowering of the SCP below 'b' driven by a material
    deterioration in the issuer's debt metrics, particularly
    payback sustainably above 9x and weak actual coverage
    approaching 1x according to Fitch's rating case.

FACTOR THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO POSITIVE
RATING ACTION/UPGRADE:

-- Lviv's IDRs are currently constrained by the sovereign
    ratings. Therefore, positive rating action on the sovereign
    could lead to positive rating action on Lviv's IDR.

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.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

The city of Lviv's ratings are capped by the sovereign rating.

ESG CONSIDERATIONS

The issuer has an ESG Relevance Score of '4' for 'Political
Stability and Rights' due to its exposure to impact of political
pressure or to instability of operations and tendency toward
unpredictable policy shifts which, in combination with other
factors, impacts the rating.

Except for the matters discussed above, the highest level of ESG
credit relevance, if present, is a score of 3. This means ESG
issues are credit-neutral or have only a minimal credit impact on
the issuer, either due to their nature or to the way in which they
are being managed by the issuer.


MARIUPOL CITY: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Mariupol's
Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs)
at 'B' with Stable Outlook.

The affirmation reflects Fitch's unchanged view that Mariupol's
operating performance and debt ratios will remain in line with 'B'
rated peers' over the medium term, despite an economic downturn
triggered by the coronavirus pandemic. The city's Standalone Credit
Profile (SCP) remains at 'b+' and IDRs are capped by the Ukrainian
sovereign IDRs (B/Stable).

Mariupol has about 460 thousand inhabitants, and is located in
south-eastern Ukraine, on the north coast of the Sea of Azov, in
the Donetsk Region. Its economy is industrialised and dominated by
metallurgy and machine building. The city's wealth indicators
significantly lag international peers'.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

Mariupol's 'Vulnerable' risk profile is in line with other
Fitch-rated Ukrainian cities'. It reflects all six key factors
being assessed as 'Weaker' (revenue framework, expenditure
framework, debt and liquidity framework) while considering the
sovereign's IDRs. The assessment reflects Fitch view of a very high
risk relative to international peers' that the city may see its
ability to cover debt service by its operating balance weaken
unexpectedly over 2021-2025, either because of lower-than-expected
revenue or expenditure overshooting expectations, or because of an
unanticipated rise in liabilities or debt-service requirements.

Revenue Robustness: 'Weaker'

The 'Weaker' assessment is driven by the evolving nature of the
national fiscal framework, Mariupol's dependence on a weak
counterparty for a material portion of revenue and weak revenue
growth prospects. The city's wealth metrics are well above the
national average, but significantly lag international peers'.

Operating revenue is mostly made up of taxes (2020: 77% of
operating revenue), notably personal income tax (62%) as well as
property taxes (2020: 7%), and single tax on SMEs (4%). Negative
effects of the coronavirus pandemic, including growing
unemployment, lower wage increases and tax exemptions granted by
the state, shrank tax revenue growth to 4% in 2020 from an average
30% in 2017-2019.

Transfers from the state budget declined 47% in 2020 following
amended responsibilities in the social and healthcare sectors, but
still accounted for 18% of Mariupol's total revenue (mainly
educational subsidy). The transfers are from the central
government, which in Fitch's view, impairs revenue sustainability,
especially during periods of economic downturn.

Revenue Adjustability: 'Weaker'

Fitch assesses Mariupol's revenue adjustability, as for all other
Fitch rated Ukrainian cities, at 'Weaker' because the cities'
ability to generate additional revenue in response to possible
economic downturns is limited. Mariupol has formal tax-setting
authority over certain local taxes and fees, which accounted for
only 10% of total revenue in 2020, with property tax and single tax
on SMEs being the largest contributors. However, affordability of
additional taxation in response to economic downturn is low, as it
is constrained by both legally set ceilings and high
social-political sensitivity to tax increases.

Expenditure Sustainability: 'Weaker'

The city's expenditure framework is fragile, leading to Fitch's
'Weaker' assessment of its sustainability. Spending during the last
five years has been influenced by high, albeit slowing, inflation
and reallocation of spending responsibilities. Further reallocation
of responsibilities is likely owing to an evolving budgetary system
in Ukraine. Currently, the city is largely responsible for
education (25% of total spending in 2020), which is
counter-cyclical.

In 2020 the pandemic resulted in extra spending for medical
equipment, tests, and disinfection, which the city offset with
savings in some operating expenditure (eg. public administration
and schools due to lockdown). The city managed to safeguard its
capex, which rose by about UAH125 million to UAH1.6 billion in 2020
and accounted for a high 32% of total expenditure, and is the most
flexible budget item.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as 'Weaker' due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers'. Operating expenditure is dominated by staff
costs (42% of operating spending in 2020) and current transfers
made (47%).

The city's large investment programme, with capex averaging 24% of
total expenditure in 2016-2020, offers some flexibility in the
short term as worsened economic conditions could force the city to
re-channel part of the funds towards socially-oriented spending.
Over the longer term, pressure on capex will persist as the city's
infrastructure needs remain high due to significant infrastructure
under-financing in the past.

Liabilities & Liquidity Robustness: 'Weaker'

Mariupol, as with other Ukrainian cities, operates under a weak
national debt and liquidity management framework due to Ukraine's
under-developed debt capital market and short debt maturities
compared with international peers'. Domestic funding is
characterised by short- to medium-term maturity of three to five
years and high fixed interest rates, which however were lowered in
2020 following cuts to the reference rate (7.5% as of April 2021).

Mariupol's net adjusted debt amounted to UAH498 million at
end-2020, comprising a long-term loan from International Finance
Corporation (contracted EUR12.5 million with a 10-year repayment)
for bus-fleet renewal. Net adjusted debt includes also the
guaranteed debt of municipal companies (end-2020: UAH468 million),
which may take the form of capital injections and grants.

In Fitch's rating case, net adjusted debt is forecast to increase
to UAH5.7 billion by end-2025, ie 85% of operating revenue (11% in
2020) following investments by municipal companies. The projects
include renewal of the trolley bus with a EUR15 million loan from
EBRD and from FECT (with a maturity of 10 years); reconstruction of
municipal outdoor lighting with a EUR11.7 million loan from EIB
(with more than a 10-year maturity); and drinking water supply
project financed by a EUR64 million loan from the Ministry of
Finance (France) (with almost a 30-year maturity). Additional debt
financing will be also driven by a weaker operating balance due to
prudent assumptions of tax revenue growth and operating spending
increases, while the city's investment programme is expected to be
maintained.

Other obligations are UAH61 million of interest-free treasury loans
contracted prior to 2015. As these loans were granted to the city
to finance mandates delegated by the central government and will be
written off by the state in the future, Fitch does not include
these treasury loans in its calculation of the city's adjusted
debt, but treating them as contingent liabilities instead.

Liabilities & Liquidity Flexibility: 'Weaker'

Available liquidity is limited to Mariupol's own cash reserves
(end-2020: UAH276 million). The city has no undrawn committed
credit lines in place but has reasonable access to loans from local
banks ('b' rated counterparties) that justifies Fitch's 'Weaker'
assessment of the liquidity profile. There are no emergency
bail-out mechanisms from the national government due to the
sovereign's fragile fiscal capacity and weak public finances, which
are dependent on IMF funding for the smooth repayment of its
external debt.

Debt Sustainability: 'aa category'

Fitch classifies Mariupol as a type B local and regional government
(LRG), as it covers debt service from cash flow on an annual basis.
Under Fitch's rating case debt payback (net adjusted
debt-to-operating balance) will deteriorate towards 4.7x by 2025,
which corresponds to a 'aaa' assessment. However, actual debt
service coverage ratio (ADSCR; operating balance-to-debt service)
will be weaker at about 1.8x in the rating case, and a fiscal debt
burden approaching 85%, lead us to a final 'aa' debt sustainability
assessment.

DERIVATION SUMMARY

Mariupol's 'b+' SCP reflects a combination of a 'Vulnerable' risk
profile and an 'aa' debt sustainability assessment. The SCP also
factors in national peer comparison. The city's IDRs are not
affected by any other rating factors, but are constrained by the
sovereign's IDRs at 'B'.

KEY ASSUMPTIONS

Qualitative Assumptions and Assessments:

Risk Profile: 'Vulnerable'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Weaker'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'aa'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Sovereign Cap: 'B'

Sovereign Floor: 'N/A'

QUANTITATIVE ASSUMPTIONS - ISSUER SPECIFIC

Fitch's rating case is a 'through-the-cycle' scenario, which
incorporates a combination of revenue, cost and financial risk
stresses. It is based on 2016-2020 figures and 2021-2025 projected
ratios. The key assumptions for the scenario include:

-- Average 7.9% yoy increase in operating revenue;

-- Average 9.8% yoy increase in operating spending;

-- Net capital deficit on average at UAH1.62 billion;

-- Cost of debt (including domestic and foreign debt) of 11% and
    five-year maturity for new local debt; and

-- Increase in the guaranteed debt of the municipal companies
    following the implementation of the investment projects aimed
    at trolleybus renewal, outdoor lighting and drinking water
    supply modernisation.

RATING SENSITIVITIES

FACTORS THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO NEGATIVE
RATING ACTION/DOWNGRADE:

-- Mariupol's IDRs are currently constrained by the sovereign
    ratings. Therefore, negative rating action on the sovereign
    could lead to a similar action on Mariupol's IDRs.

-- A downward revision of the SCP below 'b' driven by a material
    deterioration in debt metrics, particularly a debt payback
    sustainably above 9x and weak actual coverage approaching 1x
    under Fitch's rating case.

FACTOR THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO POSITIVE
RATING ACTION/UPGRADE:

-- Positive action on Ukraine's sovereign ratings would lead to a
    similar action on Mariupol's ratings.

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.

ESG CONSIDERATIONS

The issuer has an ESG Relevance Score of '4' for 'Political
Stability and Rights' due to its exposure to political pressure,
instability of operations and unpredictable policy shifts. This has
a negative impact on its credit profile and is relevant to the
rating in combination with other factors.

Except for the matters discussed above, 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 issuer,
either due to their nature or to the way in which they are being
managed by the issuer.


MYKOLAIV CITY: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed the City of Mykolaiv's Long-Term
Foreign- and Local-Currency Issuer Default Ratings (IDRs) at 'B'.
The Outlooks are Stable.

The affirmation reflects Fitch's unchanged view that Mykolaiv's
operating performance and debt ratios will remain in line with 'B'
rated peers over the medium term, despite the economic downturn
triggered by the coronavirus pandemic. The city's Standalone Credit
Profile (SCP) has been assessed at 'b+' and the city's ratings are
capped by the Ukrainian sovereign IDRs (B/Stable).

Mykolaiv, in the south of Ukraine, is one of the 10 largest cities
in the country and is the capital of the Mykolaiv region. It has a
population of about 480,000, which is about 44% of the region's
population, or 1.1% of the national one. The city's economy is
related to manufacturing (shipbuilding, as well as processing
industries) and services. The unemployment rate (according to the
International Labour Organization's methodology and available only
for the Mykolaiv region) was 10.8% at end 3Q20 (2019: 9.6%) but
below the national average of 9.6% (2019: 8.6%). However, the
wealth indicators of Ukraine and Mykolaiv are weak by international
comparison, with national GDP per capita well below the EU
average.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

Fitch assesses the city's Risk Profile as Vulnerable in line with
other Fitch-rated Ukrainian cities. The city's risk profile
combines all six factors assessed at Weaker (revenue framework,
expenditure framework, debt and liquidity framework) and considers
the sovereign IDR. The assessment reflects Fitch view of a very
high risk relative to international peers that the issuer's ability
to cover debt service by the operating balance may weaken
unexpectedly over the forecast horizon (2021-2025) either because
of lower-than-expected revenue or expenditure above expectations,
or because of an unanticipated rise in liabilities or debt-service
requirements.

Revenue Robustness: 'Weaker'

The evolving nature of the national fiscal framework, dependence on
a weak counterparty for a material portion of the city's revenue
and weak revenue growth prospects drive the 'Weaker' assessment for
revenue robustness. Mykolaiv's operating revenue is mostly made up
of taxes (76% of operating revenue in 2020), such as personal
income tax (PIT; 51% of operating revenue) and local taxes, mainly
property tax and single tax (19%). The negative effects of the
coronavirus pandemic of growing unemployment, lower wage increases
and tax exemptions, caused tax revenue growth to slow to 10% yoy in
2020. However, this was not much less than the average growth of
13.5% in 2016-2019.

Transfers from the state budget substantially declined by 50% in
2020 following amended responsibilities in the social and
healthcare sectors, and now account for 21% of operating revenue
(mainly educational subsidy), compared with 37% in 2019. Transfers
are sourced from the central government, which in Fitch's view,
impairs revenue sustainability, especially during periods of
economic downturn.

Revenue Adjustability: 'Weaker'

Like all other Fitch-rated Ukrainian municipalities, Fitch assesses
Mykolaiv's revenue adjustability at 'Weaker' because the cities'
ability to generate additional revenue in response to possible
economic downturns is limited. Cities have formal tax-setting
authority over several local taxes and fees that accounted for 19%
of total revenue in 2020. However, the affordability of additional
taxation in response to the economic downturn is low as it is
constrained by legally set ceilings and high socio-political
sensitivity to tax increases.

Expenditure Sustainability: 'Weaker'

The city's expenditure framework is fragile, leading to Fitch's
'Weaker' assessment. The spending dynamic during the last five
years has been influenced by high inflation and reallocation of
responsibilities. In 2020, Mykolaiv was largely responsible for
education (40% of operating spending in 2020), housing and communal
services (14%), administration (8%) and healthcare (7%), all of
which are of a non-cyclical nature. The pandemic led to extra
spending on medical equipment, tests, disinfection, which could be
compensated by savings due to the lockdown of schools and
administration.

The share of current costs for healthcare may go down in 2021, with
state reform and when the pandemic ceases. Mykolaiv also cut capex,
which decreased by UAH132 million to UAH781 million in 2020 as it
is the most flexible budget item, accounting for almost 20% of
total expenditure.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs (45% of total expenditure in 2020), which have significantly
increased (2019: 32%) due to the legislative changes in
responsibilities, minimum wage and average salary increases and
inflation. However, current transfers decreased substantially to
13% of total expenditure in 2020 from 27% in 2019, reflecting lower
transfers. Mykolaiv had to support its municipal companies, e.g.
public transport companies that provided comparable transport
service but with lower passenger traffic due to the lockdown.

Mykolaiv's investment programme can offer some leeway in the short
term as worsened economic conditions could force the city to
re-channel part of the funds aimed at socially-oriented spending.
Over the longer term, pressure on capex will persist as the city's
infrastructure needs remain high due to significant underfinancing
over a prolonged period.

Liabilities & Liquidity Robustness: 'Weaker'

Fitch assesses Mykolaiv's liquidity and liabilities robustness at
'Weaker'. Local and regional governments operate under a weak
national debt and liquidity management framework due to Ukraine's
underdeveloped debt capital market and relatively short debt
maturities compared with international peers. Domestic funding is
characterised by short- to medium-term maturity of three to five
years and high fixed interest rates, which was lowered in 2020
following cuts to the reference rate (currently 7.5% from April
2021).

At end-2020, Mykolaiv was direct debt free as it did not draw the
credit facility of EUR4.5 million from European Investment Bank
(EIB; AAA/Stable), aimed at the renewal of the municipal bus
company Mykolaivpastrans fleet. If drawn, the loan would have
long-term maturities (about 10 years) and an amortising structure,
which Fitch has assumed in its projections.

The city supports investments made through the municipal companies,
taking advantage of the loans from the international institutions
such as European Bank for Reconstruction and Development (EBRD;
AAA/Stable), World Bank or Northern Ecological Finance Corporation
(NEFCO). Mykolaiv is currently negotiating a EUR20 million
long-term loan with EBRD for the renewal of the trolleybus fleet
and modernisation of the depot to be incurred by the city's
transportation company Mykolaivelectrotrans (trams and
trolleybuses) and guaranteed by the city.

Other municipal companies' debt is not significant as the majority
is guaranteed by the Ukrainian state. However, as Mykolaiv supports
the repayment of debt (including FX risk) through its budget
(capital injections and current grants to companies), Fitch has
decided to include all municipal companies' debt (2020: UAH979
million) into "Other Fitch-classified debt" and thus in net
adjusted debt of the city.

Like other Fitch-rated Ukrainian cities Mykolaiv also had
interest-free treasury loans contracted prior to 2014 (unchanged at
UAH82 million). As these loans were granted to the city to finance
mandates delegated by the central government and will be written
off by the state Fitch does not include these treasury loans in its
calculation of city's adjusted debt and treats them as contingent
risk.

Liabilities & Liquidity Flexibility: 'Weaker'

Like other Ukrainian cities, Mykolaiv's available liquidity is
restricted to the city's own cash reserves and the loans provided
by local banks ('B' rated counterparties), which justifies a
'Weaker' assessment for the liquidity profile. There are no
emergency bail-out mechanisms from the national government due to
the sovereign's fragile capacity and therefore weak public finance
position, which is dependent on IMF funding for the smooth
repayment of its external debt. Mykolaiv's cash reserves
deteriorated to UAH74 million at end-2020 compared with UAH129
million the year before, due to the pandemic. The city has no
undrawn committed credit lines in place.

Debt Sustainability: 'aa category'

Under Fitch's rating case scenario, the debt payback ratio (net
adjusted debt-to-operating balance) will remain strong and below 3x
in 2021-2025 (2020: 1.2x), which corresponds to a strong 'aaa' debt
sustainability assessment. However, the short maturity of the new
Fitch-projected debt will lead to a weaker actual debt service
coverage ratio (ADSCR) of 1.8x in the rating case ('a' category).
The corresponding refinancing risk results in a debt sustainability
assessment in the 'aa' category, despite a low fiscal debt burden
projected to remain below 50% of operating revenue ('aaa'
category).

In Fitch's rating case, net adjusted debt is expected to increase
towards UAH2.4 billion by end-2025, ie 43% of operating revenue
(22% in 2020). This will be driven by rising direct debt following
implementation of projects in public transport and infrastructure
investments with annual capital expenditure of UAH985 million on
average in 2021-2025, compared with an average UAH767 million in
2018-2020. Fitch assumes a stable level of municipal companies'
debt of UAH964 million at end-2025 compared with UAH979 million at
end-2020. The net adjusted debt growth should be slowed down by the
operating balance improving to UAH743 million annually on average
in the projection period, from UAH656 million in 2018-2020, despite
prudent assumptions in tax revenue growth and operating spending
increases and with the envisaged investment programme maintained.

DERIVATION SUMMARY

Mykolaiv's 'b+' SCP reflects a combination of a 'Vulnerable' risk
profile and a 'aa' debt sustainability assessment. The SCP also
factors in national peer comparison. The city's IDRs are not
affected by any other rating factors, but are constrained by the
sovereign's IDRs.

KEY ASSUMPTIONS

Qualitative assumptions and assessments:

Risk Profile: 'Vulnerable'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Weaker'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'aa'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Sovereign Cap: 'B'

Sovereign Floor: 'N/A'

QUANTITATIVE ASSUMPTIONS - ISSUER SPECIFIC

Fitch's rating case scenario is a 'through-the-cycle' scenario,
which incorporates a combination of revenue, cost and financial
risk stresses. It is based on the 2016-2020 figures and 2021-2025
projected ratios. The key assumptions for the scenario include:

-- Yoy 7.1% increase in operating revenue on average;

-- Yoy 7.8% increase in operating spending on average;

-- Net capital deficit of UAH978 million on average;

-- Apparent cost of debt (in domestic and foreign currency) of
    10.2% and five-year maturity for new debt.

RATING SENSITIVITIES

FACTORS THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO NEGATIVE
RATING ACTION/DOWNGRADE:

-- Negative rating action on the sovereign ratings would lead to
    negative action on the city's ratings;

-- A lowering of the SCP below 'b', driven by a material
    deterioration in the city's debt metrics, particularly payback
    sustainably above 9x and weak actual coverage approaching 1x
    according to Fitch's rating case.

FACTOR THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO POSITIVE
RATING ACTION/UPGRADE:

-- The city's IDRs are currently constrained by the sovereign
    ratings. Therefore, positive rating action on the sovereign
    ratings could lead to positive rating action on the city's
    IDRs.

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.

ESG CONSIDERATIONS

The issuer has an ESG Relevance Score of '4' for 'Political
Stability and Rights' due to its exposure to impact of political
pressure or to instability of operations and tendency toward
unpredictable policy shifts which, in combination with other
factors, impacts the rating.

Except for the matters discussed above, the highest level of ESG
credit relevance, if present, is a score of 3. This means ESG
issues are credit-neutral or have only a minimal credit impact on
the issuer, either due to their nature or to the way in which they
are being managed by the issuer.


ODESA CITY: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has affirmed the City of Odesa's Long-Term Foreign-
and Local-Currency Issuer Default Ratings (IDRs) at 'B'. The
Outlooks are Stable.

The affirmation reflects Fitch's unchanged view that Odesa's
operating performance and debt ratios will remain in line with 'B'
rated peers' over the medium term, despite the economic downturn
triggered by the coronavirus pandemic. The city's Standalone Credit
Profile (SCP) is assessed at 'b+' and the city's ratings remain
capped by the Ukrainian sovereign IDRs (B/Stable).

Odesa, in south-west Ukraine, is the third-largest city in the
country, and its 1 million inhabitants comprise about 42% of the
region's population, or 2.4% of the national one. Odesa is at the
crossroads between central Europe and the Middle East. The city is
an important administrative, industrial, educational and cultural
centre. The unemployment rate (according to the International
Labour Organization's methodology and available only for the Odesa
region) was 7.1% at end 3Q20 (2019: 6.1%) but below the national
average of 9.6% (2019: 8.6%). However, the wealth indicators of
Ukraine and Odesa are weak by international comparison, with
national GDP per capita well below the EU average.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

Fitch assesses the city's Risk Profile as Vulnerable in line with
other Fitch-rated Ukrainian cities. The city's risk profile
combines all six factors assessed at Weaker (revenue framework,
expenditure framework, debt and liquidity framework) and considers
the country's IDR rated B. The assessment reflects Fitch view of a
very high risk relative to international peers that the issuer's
ability to cover debt service by the operating balance may weaken
unexpectedly over the forecast horizon (2021-2025) either because
of lower-than-expected revenue or expenditure above expectations,
or because of an unanticipated rise in liabilities or debt-service
requirements.

Revenue Robustness: 'Weaker'

The evolving nature of the national fiscal framework, dependence on
a weak counterparty for a material portion of the city's revenue
and weak revenue growth prospects drive the 'Weaker' assessment for
revenue robustness. Operating revenue is mostly made up of taxes
(75% of operating revenue in 2020), such as personal income tax
(PIT; 47%) and local taxes, mainly property tax and single tax
(23%). The negative effects of the coronavirus pandemic of growing
unemployment, lower wage increases and tax exemptions, caused tax
revenue growth to slow to 6% yoy in 2020 compared with average
growth of 29% in 2016-2019.

Transfers from the state budget substantially declined by 45% in
2020 following amended responsibilities in the social and
healthcare sectors, but still account for 19% of operating revenue
(mainly educational subsidy). The transfers are sourced from the
central government, which in Fitch's view impairs revenue
sustainability, especially during periods of economic downturn.

Revenue Adjustability: 'Weaker'

Like all other Fitch-rated Ukrainian cities, Fitch assesses Odesa's
revenue adjustability at 'Weaker' because the cities' ability to
generate additional revenue in response to possible economic
downturns is limited. Cities have formal tax-setting authority over
several local taxes and fees that accounted for 22% of total
revenue in 2020, down from 24% in 2019. However, the affordability
of additional taxation in response to the economic downturn is low
as it is constrained by legally set ceilings and high
socio-political sensitivity to tax increases.

Expenditure Sustainability: 'Weaker'

The city's expenditure framework is fragile, leading to Fitch's
'Weaker' assessment of its sustainability. The spending dynamic
during the last five years has been influenced by high inflation
and reallocation of responsibilities. In 2020, the city was largely
responsible for education and healthcare (34% of total spending in
2020), both of which are of a non-cyclical nature. The pandemic
caused extra spending on medical equipment, tests and disinfection,
which could be compensated by savings from the lockdown of schools
and administration. The share of current cost for healthcare may go
down in 2021, with state reform and when the pandemic ceases. Odesa
made also capex cuts, which decreased by about UAH0.5 billion to
UAH2.8 billion in 2020. Capexis the most flexible budget item,
accounting for 26% of total expenditure.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs (33% of total expenditure in 2020) and current transfers made
(25%). In 2020, the share of staff costs and transfers made
increased compared with previous years (from 25% and 18% in 2019,
respectively). This was because of legislative changes in
responsibilities, minimal wage and average salary increases and
inflation as well as Covid-19. Odesa had to support its municipal
companies, eg public transport companies that provided comparable
transport service while passenger numbers decreased by 30%. Fitch
estimates the share of inflexible expenditure is about 70%-75% of
spending.

The city's investment programme (large portfolio of small
investments) can offer some leeway in the short term as worsened
economic conditions could force the city to re-direct part of the
funds aimed at socially-oriented spending. Odesa's biggest area of
investment in 2021 will be healthcare, where about UAH400 million
capex (about 20% of the total) will be directed to refurbish the
cities' healthcare entities and provide special oxygen generators
for Covid-19 patients. Over the longer term, pressure on capex will
persist as the city's infrastructure needs remain high due to
significant underfinancing over a prolonged period.

Liabilities & Liquidity Robustness: 'Weaker'

Fitch assesses Odesa's liquidity and liabilities robustness at
'Weaker'. Local and regional governments operate under a weak
national debt and liquidity management framework due to Ukraine's
underdeveloped debt capital market and relatively short debt
maturities compared with international peers. Domestic funding is
characterised by short- to medium-term maturity of three to five
years and high fixed interest rates, which was lowered in 2020
following cuts to the reference rate (currently 7.5% from April
2021).

Odesa has loans with local banks and a loan with the Nordic
Environment Finance Corporation. Odesa's debt portfolio (2020:
UAH2.5 billion) is solely in local currency and has fixed interest
rates. Debt repayments are smooth (quarterly or semi-annual),
reducing refinancing risk. Final debt maturity is in 2024.

Like other Fitch-rated Ukrainian cities Odesa had interest-free
treasury loans contracted prior to 2014 (unchanged UAH205.4
million). As these loans were granted to the city to finance
mandates delegated by the central government and will be written
off by the state, Fitch does not include these treasury loans in
its calculation of city's adjusted debt and treats them as
contingent risk.

Odesa supports investments made through the municipal companies,
taking advantage of loans from the international institutions such
as European Bank for Reconstruction and Development (AAA/Negative)
and World Bank. The loans, granted in euros and US dollars are
guaranteed by the city. In 2020, the value of these guarantees
totalled UAH918 million (up from UAH843 million at end-2019) and
may rise further if the city's transportation company starts to
construct the 'North-South' tram route and incurs the negotiated
EUR20 million loan from European Investment Bank (AAA/Stable).
Fitch has included the guaranteed debt of the city's companies into
"Other Fitch-classified debt" and thus in net adjusted debt of the
city as Odesa supports the repayment of debt (including FX risk)
through its budget (capital injections and current grants to
companies).

Liabilities & Liquidity Flexibility: 'Weaker'

Like other Ukrainian cities, Odesa's available liquidity is
restricted to the city's own cash reserves (UAH294.6 million at
end-2020) and the loans provided by local banks ('B' rated
counterparties), which justifies a 'Weaker' assessment for the
liquidity profile. There are no emergency bail-out mechanisms from
the national government due to the sovereign's fragile capacity and
therefore weak public finance position, which is dependent on IMF
funding for the smooth repayment of its external debt.

Debt Sustainability: 'aa category'

Under Fitch's rating case scenario, the debt payback ratio (net
adjusted debt-to-operating balance) will remain strong and below 2x
in 2021-2025 (2020: 1.4x), which corresponds to a strong 'aaa' debt
sustainability assessment. However, short maturity of the debt will
lead to weaker actual debt service coverage ratio (ADSCR), which
may fall to 1.9x in the rating case ('a' category) from 2.8x in
2020. The corresponding higher refinancing risk results in a final
debt sustainability assessment in the 'aa' category, despite a low
fiscal debt burden projected to remain below 50% of operating
revenue ('aaa' category).

In Fitch's rating case, Fitch expects net adjusted debt to increase
towards UAH4.5 billion by end-2025 but remain at 32% of operating
revenue as in 2020. The nominal debt increase will be driven by the
city's rising direct debt following implementation of projects in
infrastructure and healthcare. Fitch assumes a stable level of
municipal companies' debt of UAH866 million at end-2025 compared
with UAH918 million at end-2020.

Fitch projects annual capital expenditure growing to UAH3.3 billion
on average in 2021-2025 (UAH2.9 billion on average in 2018-2020).
Net adjusted debt growth should be slowed by the operating balance
improving to UAH3.1 billion annually in the projection period on
average, from UAH2.3 million in 2018-2020, which is due to the
city's wealth metrics and despite prudent assumptions in tax
revenue growth and operating spending increases.

DERIVATION SUMMARY

Odesa's 'b+' SCP reflects a combination of a 'Vulnerable' risk
profile and a 'aa' debt sustainability assessment. The SCP also
factors in national peer comparison. The city's IDRs are not
affected by any other rating factors, but are constrained by the
sovereign's IDRs.

KEY ASSUMPTIONS

Qualitative assumptions and assessments:

Risk Profile: 'Vulnerable'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Weaker'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'aa'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Sovereign Cap: 'B'

Sovereign Floor: 'N/A'

QUANTITATIVE ASSUMPTIONS - ISSUER SPECIFIC

Fitch's rating case scenario is a 'through-the-cycle' scenario,
which incorporates a combination of revenue, cost and financial
risk stresses. It is based on the 2016-2020 figures and 2021-2025
projected ratios. The key assumptions for the scenario include:

-- Yoy 7.2% increase in operating revenue on average;

-- Yoy 6.5% increase in operating spending on average;

-- Net capital deficit of UAH2,932 million on average;

-- Apparent cost of debt (in local and foreign currency) of 15.6%
    and five-year maturity for new debt;

-- Increase in indirect risk due to rolling stock investments of
    the public transport company.

RATING SENSITIVITIES

FACTORS THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO NEGATIVE
RATING ACTION/DOWNGRADE:

-- Negative rating action on the sovereign would lead to negative
    action on the city's ratings;

-- A lowering of the SCP below 'b', driven by a material
    deterioration in the city's debt metrics, particularly payback
    sustainably above 9x and weak actual coverage approaching 1x
    according to Fitch's rating case.

FACTOR THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO POSITIVE
RATING ACTION/UPGRADE:

-- The city's IDRs are currently constrained by the sovereign
    ratings. Therefore, positive rating action on the sovereign
    could lead to positive rating action on the city's IDRs.

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.

ESG CONSIDERATIONS

The issuer has an ESG Relevance Score of '4' for 'Political
Stability and Rights' due to its exposure to impact of political
pressure or to instability of operations and tendency toward
unpredictable policy shifts which, in combination with other
factors, impacts the rating.

Except for the matters discussed above, the highest level of ESG
credit relevance, if present, is a score of 3. This means ESG
issues are credit-neutral or have only a minimal credit impact on
the issuer, either due to their nature or to the way in which they
are being managed by the issuer.


ZAPORIZHZHIA CITY: Fitch Affirms 'B' LongTerm IDRs, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Zaporizhzhia's
Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs)
at 'B' with Stable Outlook.

The affirmation reflects Fitch's unchanged view that Zaporizhzhia's
operating performance and debt ratios will remain in line with 'B'
rated peers' over the medium term, despite the economic downturn
triggered by the coronavirus pandemic. The ratings reflect
Zaporizhzhia's Standalone Credit Profile (SCP) of 'b' resulting
from a combination of 'Vulnerable' risk profile and a 'a' debt
sustainability assessment.

Zaporizhzhia is the capital city of Zaporizhzhia region located in
the south of Ukraine. The city's population of about 730,000 makes
up 43% of the region's. The city's economy is industrialised and
dominated by metallurgy and machine building. Zaporizhzhia's wealth
metrics are moderately above the national average, but materially
lag international peers.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

Fitch assesses the city's Risk Profile as Vulnerable in line with
other Fitch-rated Ukrainian cities. The city's risk profile
combines all six factors assessed at Weaker (revenue framework,
expenditure framework, debt and liquidity framework) and considers
the sovereign IDR. The assessment reflects Fitch's view of very
high risk relative to international peers that the issuer's ability
to cover debt service by the operating balance may weaken
unexpectedly over the forecast horizon either because of
lower-than-expected revenue or expenditure above expectations, or
because of an unanticipated rise in liabilities or debt-service
requirements.

Revenue Robustness: 'Weaker'

The evolving nature of the national fiscal framework, dependence on
a weak counterparty for a material portion of the city's revenue
and weak revenue growth prospects drive the 'Weaker' assessment for
the revenue robustness. Zaporizhzhia's wealth metrics are
moderately above the national average, which materially lags
international peers.

Operating revenue is mostly made up of taxes, such as personal
income tax (PIT; 51% of operating revenue in 2020) and local taxes
(23%). Negative effects of the coronavirus pandemic, including
growing unemployment, lower wage increases and tax exemptions
granted by the state, constrained tax revenue growth to 5.5% yoy in
2020 from average growth of 19.3% in 2017-2019. Transfers from the
state budget substantially declined by 50.5% in 2020 following
amended responsibilities in the social and healthcare sectors, but
still accounted for 17% of total revenue (mainly educational
subsidy). Transfers are sourced from the central government, which
in Fitch's view, impairs revenue sustainability, especially during
periods of economic downturn.

Revenue Adjustability: 'Weaker'

Zaporizhzhia's ability to generate additional revenue in response
to possible economic downturns is limited, like all other
Fitch-rated Ukrainian cities. The city has formal tax-setting
authority over several local taxes and fees, revenue from which
accounted for about 20% of total revenue in 2020. However, the
affordability of additional taxation is low as it is constrained by
the low income of residents and high socio-political sensitivity to
tax increases.

Expenditure Sustainability: 'Weaker'

The city's expenditure framework is fragile, leading to Fitch's
'Weaker' assessment of its sustainability. The spending dynamic
during the last five years has been influenced by high, albeit
slowing, inflation and reallocation of spending responsibilities,
with further reallocation of responsibilities still likely due to
the evolving budgetary system in Ukraine. Currently, the city is
largely responsible for education (35% of total spending in 2020),
which is of a counter-cyclical nature.

In 2020, the pandemic caused extra spending on medical equipment,
tests, disinfection etc. that the city compensated by opex savings
in some areas (eg. on public administration and schools due to the
lockdown) and cuts in capex, which is the most flexible budget
item. The latter decreased by 26% to UAH1.09 billion in 2020 and
accounted for 14% of total expenditure.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs (44% of operating spending in 2020) and current transfers
made (42%). Fitch estimates the share of inflexible expenditure at
about 70% of total spending.

The city's investment programme (14% of total spending in 2020)
could offer some leeway in the short term as worsened economic
conditions could force the city to re-direct part of the funds
aimed at development of socially-oriented spending. Over the longer
term, pressure on capex will persist as the city's infrastructure
needs remain high due to significant underfinancing over a
prolonged period.

Liabilities & Liquidity Robustness: 'Weaker'

Like other Ukrainian cities, Zaporizhzhia operates under a weak
national debt and liquidity management framework due to Ukraine's
underdeveloped debt capital market and relatively short debt
maturities compared with international peers. Domestic funding is
characterised by short- to medium-term maturity of three to five
years and high fixed interest rates, which were lowered in 2020
following cuts to the reference rate (currently 7.5% from April
2021).

Zaporizhzhia's net adjusted debt was UAH1.3 billion at end-2020,
comprising five-year loans from local state-owned banks, which bear
16% annual interest rates and have an amortising structure with a
one-year grace period. Net adjusted debt includes also the
guaranteed debt of municipal companies (end-2020: UAH287 million),
as Fitch assumes the city may support the repayment of debt through
its budget (capital injections and current grants to companies).

In Fitch's rating case, net adjusted debt is expected to increase
towards UAH4.75 billion by end-2025, ie 45% of operating revenue
(21% in 2019), driven by a weakening operating balance due to
prudent assumptions for tax revenue growth and operating spending
increases, while the city's investment programme is expected to be
maintained. The city's guaranteed debt is likely to rise to UAH515
million in 2022 when the city's transport company incurs the
EUR10.4 million loan from European Investment Bank (AAA/Stable)
aimed at fleet and charging stations renewal.

Other obligations are UAH278 million of interest-free treasury
loans contracted prior to 2015. As these loans were granted to the
city to finance mandates delegated by the central government and
will be written off by the state, Fitch does not include these
treasury loans in its calculation of the city's adjusted debt,
treating them as contingent liabilities.

Liabilities & Liquidity Flexibility: 'Weaker'

Zaporizhzhia's available liquidity is limited to own cash reserves,
which are low (end-2020: UAH111 million). The city has no undrawn
committed credit lines in place but has reasonable access to loans
from local banks ('b' rated counterparties) that justifies Fitch's
'Weaker' assessment of the liquidity profile. There are no
emergency bail-out mechanisms from the national government due to
the sovereign's fragile capacity and therefore weak public finance
position, which is dependent on IMF funding for the smooth
repayment of its external debt.

Debt Sustainability: 'a category'

Under Fitch's rating case scenario, the debt payback ratio (net
adjusted debt-to-operating balance) will deteriorate towards 9x by
2024 (2020: 2x), which corresponds to a 'aa' assessment. However,
the short maturity and high cost of debt will lead to a weak actual
debt service coverage ratio (operating balance-to-debt service,
ADSCR), at below 1x in Fitch's rating case (2.8x in 2020). The
corresponding higher refinancing risk results in a 'a' debt
sustainability assessment, despite a low fiscal debt burden below
50% of operating revenue.

DERIVATION SUMMARY

Zaporizhzhia's 'b' SCP reflects a combination of a 'Vulnerable'
risk profile and a 'a' debt sustainability assessment. The SCP also
factors in national peer comparison. The city's IDRs are not
affected by any other rating factors and are equal to the SCP.

KEY ASSUMPTIONS

Qualitative assumptions and assessments:

Risk Profile: 'Vulnerable'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Weaker'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'a'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Sovereign Cap: 'N/A'

Sovereign Floor: 'N/A'

QUANTITATIVE ASSUMPTIONS - ISSUER SPECIFIC

Fitch's rating case scenario is a 'through-the-cycle' scenario,
which incorporates a combination of revenue, cost and financial
risk stresses. It is based on the 2016-2020 figures and 2021-2025
projected ratios. The key assumptions for the scenario include:

-- 7.8% yoy increase in operating revenue on average;

-- 9% yoy increase in operating spending on average;

-- Net capital deficit of UAH1,064 million on average;

-- Apparent cost of debt (including domestic and foreign debt) of
    10.2% and five-year maturity for new local debt;

-- Increase in the guaranteed debt of the municipal companies
    following the rolling stock investments of the public
    transport company.

RATING SENSITIVITIES

FACTORS THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO NEGATIVE
RATING ACTION/DOWNGRADE:

-- Debt payback ratio exceeding 9x on a sustained basis and weak
    actual coverage below 1x according to Fitch's rating case.

-- Negative rating action on the sovereign would lead to negative
    action on the city's ratings.

FACTOR THAT COULD, INDIVIDUALLY OR COLLECTIVELY, LEAD TO POSITIVE
RATING ACTION/UPGRADE:

-- The debt payback ratio falling below 5x or the ADSCR improving
    to above 2x on a sustained basis in Fitch's rating case, along
    with an upgrade of the sovereign.

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.

ESG CONSIDERATIONS

The issuer has an ESG Relevance Score of '4' for 'Political
Stability and Rights' due to its exposure to impact of political
pressure or to instability of operations and tendency toward
unpredictable policy shifts which, in combination with other
factors, impacts the rating.

Except for the matters discussed above, the highest level of ESG
credit relevance, if present, is a score of '3'. This means ESG
issues are credit-neutral or have only a minimal credit impact on
the issuer, either due to their nature or to the way in which they
are being managed by the issuer.




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

FOOTBALL INDEX: Decision on Player Protection Fund Postponed
------------------------------------------------------------
Nosa Omoigui at iGB reports that the judge presiding over the High
Court case to determine how money in Football Index's player
protection fund may be allocated has reserved his decision,
possibly until the week ending June 4.

According to iGB, due to pre-arranged trial commitments taking
place next week, a final ruling can't be administered until the
judge, Robin Vos, is free to do so.

The High Court hearing was initially called in order to determine
how to distribute the GBP4.5 million left in Football Index's
player protection account, iGB notes.  The money is intended for
player account funds, which totalled GBP3.2 million when the
operator entered administration, but administrators said further
clarity was required on dividends -- a form of winnings -- that
would be paid based on events after March 11, iGB states.

Administrators said the operator may be liable to pay these as
well, but this would put the player protection account into
default, iGB relays.

Administrators thus called on the court determine whether March 11
(the day operator BetIndex entered administration), March 26 or a
date after March 26 should be chosen as the cut-off date from when
player's bets should be considered active, iGB discloses.

Mr. Vos also acknowledged that his decision was likely to be
received negatively by some customers, no matter which way he
ruled.

Anthony De Garr Robinson presented the case for a later date, iGB
states.

Meanwhile, proposals for a re-launch of the platform have been
drawn up by BetIndex, iGB discloses.  Under the relaunch plans,
creditors including customers would hold a stake in the new
business, according to iGB.


HOTTER SHOES: To Float on AIM Market in 2021 Fourth Quarter
-----------------------------------------------------------
Caroline Wadham at Drapers reports that the owner of Hotter Shoes,
Electra Private Equity, has confirmed the British footwear retailer
is to float on the AIM market in the fourth quarter of 2021.

Neil Johnson, chairman of Electra Private Equity, said the decision
comes after the UK brand and manufacturer "performed admirably
through the pandemic", Drapers relates.

Hotter Shoes' company voluntary arrangement (CVA) was given the
green light by creditors in July 2020, allowing the business to
cull its store portfolio from 61 shops to 15 and change the terms
of rental payments, Drapers discloses.


LENDY: Administration Enters Into Third Year
--------------------------------------------
Michael Lloyd at Peer2Peer Finance News reports that Lendy's
administration has entered its third year, with many investors
still waiting to recoup their funds amid scandals and
inconsistencies with the loanbook.

The peer-to-peer property lending platform entered into
administration in May 2019, leaving more than GBP160 million
outstanding on the loanbook, with at least GBP90 million of those
funds in default, Peer2Peer Finance News relates.

According to Peer2Peer Finance News, the Financial Conduct
Authority (FCA) said at the time that there was "an ongoing FCA
investigation into the circumstances that have led to this
action."

The administration process has been mired with difficulties and
last year, administrators RSM received court approval to extend the
administration process by three years to May 23, 2023, Peer2Peer
Finance News recounts.

Then, last December, RSM warned that the process could even
overshoot the 2023 deadline, Peer2Peer Finance News relays.  Its
latest progress report said that the administrators "continue to
spend significant time overseeing the collection of the loanbook"
after there was found to be huge issues in the platform's
underwriting and administration processes, Peer2Peer Finance News
discloses.

A recent review of anti-money laundering checks has put further
repayments on hold and the recovery of assets is now taking longer
due to the coronavirus outbreak, Peer2Peer Finance News notes.

There is also a legal debate over the distribution structure used
to repay investors, Peer2Peer Finance News states.  On June 28, a
10-day trial will commence to clarify the legal position of the
"distribution waterfall" employed by RSM, according to Peer2Peer
Finance News.

The proposed "distribution waterfall" sees former Lendy investors
split into two groups: model 1 and model 2, which impacts how they
receive funds, Peer2Peer Finance News discloses.

Scandals surrounding Lendy's directors have also beset the process,
Peer2Peer Finance News says.

In June last year, Lendy's directors Liam Brooke and Tim Gordon had
their assets frozen while administrators investigated suspicious
payments to an offshore account, Peer2Peer Finance News relates.

According to Peer2Peer Finance News, a report from RSM showed that
GBP6.8 million was paid to entities registered in the Marshall
Islands, with RSM stating that "that these payments were ultimately
for the benefit of Liam Brooke and Tim Gordon."


LOCH FYNE: Greene King Secures Approval for Business to Enter CVA
-----------------------------------------------------------------
Sophie Witts at The Caterer reports that Greene King has secured
approval for its Loch Fyne restaurant business to enter a Company
Voluntary Arrangement (CVA).

The restructuring will see the 11 Loch Fyne sites that permanently
closed last year returned to landlords, The Caterer relays, citing
Propel.

It will leave the seafood brand with 10 restaurants in locations
including Edinburgh, Cambridge, York and the City of London, The
Caterer notes.

According to The Caterer, a Greene King spokesperson said: "Loch
Fyne has been severely impacted by the Covid-19 pandemic and the
resulting social restrictions.

"Following advice from an insolvency practitioner, a CVA was
proposed to creditors, which has now been approved and will enable
us to hand back to landlords a number of sites that are already
closed and no longer needed within the Greene King estate.

"There are no job losses as a result of this and we are looking
forward to reopening a smaller number of profitable and well-run
Loch Fyne restaurants, which will continue trade once restrictions
ease."

Nine of Loch Fyne's remaining restaurants have reopened for indoor
dining, though its London site is closed until further notice, The
Caterer states.


N-SEA: On Brink of Administration, 25 Jobs at Risk
--------------------------------------------------
Allister Thomas at Energy Voice reports that dozens of jobs are at
risk as subsea services firm N-Sea wraps up its Aberdeen
operation.

FRP Advisory, which deals with administration and restructuring,
confirmed it was on the site of N-Sea on May 24 advising
management, but has not been appointed formally as administrator,
EV relates.

Both the workshop facilities and office site in Aberdeen are
affected, workers told EV.

One worker described a "very brutal zoom call" on May 24 which saw
25 employees told that redundancy was imminent, EV recounts.

It's understood the Dutch offices of N-Sea are being kept open, as
well as its operations in Dubai, however the status of its Norwich
base is unclear, EV discloses.

Workers were told that N-Sea had decided to close the Aberdeen
operation after exploring "every avenue" to secure more finances,
EV states.


RALPH & RUSSO: Future Uncertain After Potential Bidder Drops Out
----------------------------------------------------------------
Huw Hughes at FashionUnited reports that the future of British
couture brand Ralph & Russo has been cast in doubt after a takeover
deal for the business fell through and co-founder Tamara Ralph left
the business.

According to filings at Companies House, the collapsed company's
administrators were working on a rescue deal and had received five
takeover bids, FashionUnited discloses.  But the leading bidder
dropped out just two days before signing the deal, leaving the
future of the company uncertain, FashionUnited discloses.

It is thought the administrators will continue to try to sell the
business as a whole but could sell its assets separately if that's
not possible, FashionUnited notes.

The filing also revealed co-founder and creative director Tamara
Ralph has left the business following a dispute with fellow
co-founder and CEO Michael Russo, FashionUnited relates.

It comes after the fashion label fell into administration in March
with debts of nearly GBP28 million, FashionUnited states.

The London-based label was hit hard by the pandemic, with the mass
cancellation of weddings and other formal events cutting into its
sales, FashionUnited relays.


SEGOVIAN EURO CLO 2-2016: Fitch Affirms B- Rating on Class F Notes
------------------------------------------------------------------
Fitch Ratings has revised the Outlooks on Segovia European CLO
2-2016 Designated Activity Company's class C and D notes to Stable
from Negative, and affirmed the ratings of all notes.

      DEBT                RATING          PRIOR
      ----                ------          -----
Segovia European CLO 2-2016 Designated Activity Company

A-1 XS1886369856   LT  AAAsf   Affirmed   AAAsf
A-2 XS1886370516   LT  AAAsf   Affirmed   AAAsf
B-1 XS1886370946   LT  AAsf    Affirmed   AAsf
B-2 XS1886371670   LT  AAsf    Affirmed   AAsf
C XS1886372215     LT  Asf     Affirmed   Asf
D XS1886372991     LT  BBB-sf  Affirmed   BBB-sf
E XS1886373619     LT  BB-sf   Affirmed   BB-sf
F XS1886373452     LT  B-sf    Affirmed   B-sf

TRANSACTION SUMMARY

The transaction is a cash-flow CLO, mostly comprising senior
secured obligations. The transaction is still within its
reinvestment period and is actively managed by Bardin Hill Loan
Advisers (UK) LLP, which was acquired by the HPS Group on 7 May
2021 and is being rebranded as "Segovia Loan Advisers (UK) LLP".

KEY RATING DRIVERS

Stable Asset Performance: Segovia European CLO 2-2016 DAC was below
par by 1.5% as of the latest investor report dated 8 April 2021.
All portfolio profile tests, collateral quality tests and coverage
tests were passing except for the Fitch and another agency's 'CCC'
test (12.34% versus a limit of 7.5%) and the Fitch's weighted
average rating factor (WARF) test (35.92 versus a limit of 34). As
per the trustee report, there are two defaulted assets in the
portfolio, with a total principal balance of EUR2.7 million.

Investment-Grade Notes Resilient to Coronavirus Stress

The affirmations reflect a broadly stable portfolio credit quality
since September 2020. The Stable Outlooks on all investment-grade
notes reflect the default rate cushion in the sensitivity analysis
ran in light of the coronavirus pandemic. The Negative Outlooks on
the class E and F notes reflect the tranches' lack of resilience
under Fitch's baseline scenario sensitivity. Fitch has recently
updated its CLO coronavirus stress scenario to assume half of the
corporate exposure on Negative Outlook is downgraded by one notch
instead of 100%.

'B'/'B-' Portfolio

Fitch assesses the average credit quality of the obligors in the
'B'/'B-' category. The Fitch WARF, as calculated by Fitch (assuming
unrated assets are 'CCC') and as calculated by the trustee for the
current portfolio, was 35.96 and 35.92, respectively - both above
the maximum covenant of 34. The Fitch WARF would increase by 1.2
after applying the coronavirus stress.

High Recovery Expectations

Senior secured obligations comprise at least 98.5% of the
portfolio. Fitch views the recovery prospects for these assets as
more favourable than for second-lien, unsecured and mezzanine
assets. The Fitch weighted average recovery rate (WARR) of the
current portfolio under Fitch's calculation is 62.9%.

Diversified Portfolio

The portfolio is well-diversified across obligors, countries and
industries. The top 10 obligor concentration is no more than 15.2%,
and no obligor represents more than 2.2% of the portfolio balance.

Model-Implied Ratings Deviation

The ratings of the class E and F are one notch higher than the
model-implied ratings (MIR). The current ratings are supported by
the stable asset performance since the last review and available
credit enhancement. The class F notes' deviation from the MIR
reflects Fitch's view that the tranche has a significant margin of
safety given the credit enhancement level. The notes do not present
a "real possibility of default", which is the definition of 'CCC'
in Fitch's Rating Definitions.

RATING SENSITIVITIES

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

-- At closing, Fitch used a standardised stress portfolio
    (Fitch's stressed portfolio) that was customised to the
    portfolio limits as specified in the transaction documents.
    Even if the actual portfolio shows lower defaults and smaller
    losses (at all rating levels) than Fitch's stressed portfolio
    assumed at closing, an upgrade of the notes during the
    reinvestment period is unlikely. This is because the portfolio
    credit quality may still deteriorate, not only by natural
    credit migration, but also because of reinvestment.

-- After the end of the reinvestment period, upgrades may occur
    in the event of better-than-expected portfolio credit quality
    and deal performance, leading to higher credit enhancement and
    excess spread available to cover for losses in the remaining
    portfolio.

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

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

Coronavirus Potential Severe Downside Stress Scenario: Fitch has
added a sensitivity analysis that contemplates a more severe and
prolonged economic stress caused by a re-emergence of infections in
the major economies. The potential severe downside stress
incorporates the following stresses: applying a notch downgrade to
all the corporate exposure on Negative Outlook. This scenario would
result in a maximum one-notch downgrade across the capital
structure.

BEST/WORST CASE RATING SCENARIO

International scale credit ratings of Structured Finance
transactions have a best-case rating upgrade scenario (defined as
the 99th percentile of rating transitions, measured in a positive
direction) of seven 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 seven notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings
are based on historical performance.

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

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

DATA ADEQUACY

Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset pool
and the transaction. Fitch has not reviewed the results of any
third-party assessment of the asset portfolio information or
conducted a review of origination files as part of its ongoing
monitoring.

The majority of the underlying assets or risk-presenting entities
have ratings or credit opinions from Fitch and/or other Nationally
Recognized Statistical Rating Organizations and/or European
Securities and Markets Authority-registered rating agencies. Fitch
has relied on the practices of the relevant groups within Fitch
and/or other rating agencies to assess the asset portfolio
information or information on the risk presenting entities.

Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis according to its applicable rating methodologies
indicates that it is adequately reliable.


SPIRIT ISSUER: Fitch Alters Outlook on A5 Notes Rating to Stable
----------------------------------------------------------------
Fitch Ratings has revised the Outlook on Spirit Issuer plc's class
A5 notes to Stable from Positive and affirmed the rating at 'BB'.

The rating actions reflect reduced projected free cash flow
compared with last year's review, which in Fitch's view, has
removed upward rating pressure amid ongoing uncertainties
surrounding the UK pub sector stemming from Covid-19.

   DEBT                           RATING       PRIOR
   ----                           ------       -----
Spirit Issuer plc

Spirit Issuer plc/Debt/1 LT   LT BB  Affirmed   BB

RATING RATIONALE

The 'BB' rating reflects the quality of the estate, the robust debt
structure benefiting from the standard whole business
securitisation (WBS) legal and structural features and a
comprehensive covenant package. The Fitch rating case (FRC)
lease-adjusted projected free cash flow debt service coverage (FCF
DSCRs) to final maturity averages 2.6x, although Fitch notes a
sustained period of 1.4x coverage from 2029 when amortisation
starts. This is broadly in line with Spirit's closest peers Greene
King Finance Plc, Marston's Issuer Plc and Mitchells & Butlers
Finance Plc. The liquidity position remains comfortable throughout
2021, with the combination of cash and a liquidity facility
covering around 36 months of debt service.

Throughout the Covid-19 pandemic, Spirit has shown financial
flexibility to partially offset short-term revenue shortfall. Fitch
currently assumes the 2020 shock will be progressively recovered by
the end of 2023, following the UK government's guidance on the
easing of lockdown restrictions.

KEY RATING DRIVERS

Structural Decline, Strong Pub Culture: Industry Profile -
Midrange

The pub sector has a long history and is deeply rooted in the UK's
culture. However, in recent years (pre-pandemic), pub assets have
shown significant weakness. The sector is highly exposed to
discretionary spending, strong competition (including from the
off-trade), and other macro factors such as minimum wages, rising
utility costs and some regulatory changes, such as the introduction
of the market rent only option in the tenanted/leased segment. For
larger pub groups, Fitch considers price risk limited but volume
risk high.

In terms of barriers to entry, licensing laws and regulations are
moderately stringent, and managed pubs and tenanted pubs (i.e.
non-full repairing and insuring) are fairly capital-intensive.
However, switching costs are generally viewed as low, even though
there may be some positive brand and captive market effects. In
terms of sustainability, despite the potential unfavourable
economic situation caused by Brexit and Covid-19, Fitch views the
eating- and drinking-out market as sustainable in the long term,
supported by the strong pub culture in the UK.

Sub KRDs: operating environment - weaker, barriers to entry -
midrange, sustainability - midrange.

Hybrid Managed/Tenanted Model: Company Profile - Midrange

Branded pubs represent a significant portion of total securitised
pubs. Spirit has limited pricing influence but it is a fairly large
operator within the pub sector. Its acquisition by Greene King in
2015 supports further economies of scale. Operating leverage has
been increasing over the last few years as a result of a growing
food offer. However, Fitch views the change in strategy positively,
given that the food-led approach has generally led to revenue
growth, although increased competition in the eating-out sector
could put pressure on sales performance.

The more transparent managed business (self-operated) represents
around 77% of the securitised group by EBITDA. Historically,
management has demonstrated some ability to adapt to industry
changes with the extensive rollout of branding and food-led offers
to mitigate the declining performance of the tenanted model.
Operator replacement is not straightforward but would be possible
within a reasonable period of time (several alternative operators
are available). Centralised management of the managed and tenanted
estates and common supply contracts result in close operational
ties between both estates.

Fitch views the pubs as well-maintained following the completion of
a conversion programme of the managed estate in 2017. Assets are
also well-located (with a significant portion in London and the
south-east).

The secondary market is fairly liquid. However, following the
parent's strategy of pub assets optimisation, Fitch does not expect
significant pub disposals in the near future.

Sub-KRDs: financial performance - midrange, company operations -
midrange, transparency - midrange, dependence on operator -
midrange, asset quality - midrange

Uneven Debt Profile, Ongoing Technical Default: Debt Structure -
Midrange

Following the prepayment of class A4 and A2 notes in June 2019 and
March 2020, the debt profile is uneven, meaning it is not very well
aligned with the industry risk profile given the back-ended
principal repayment. The class A5 notes are the only remaining
outstanding notes. They are currently interest only with fixed rate
until December 2028, when they switch to floating rate and start to
pay principal.

Fitch views the security package as 'stronger' with comprehensive
first ranking fixed and floating charges over the issuer's assets
and ultimately over all of the operating assets. All standard WBS
legal and structural features are present, and the covenant package
is comprehensive. The financial covenant level is fairly high (with
the DSCR at 1.3x) and the restricted payment condition, calculated
using synthetic debt service, is set at 1.45x DSCR. The structure
also includes step-up amounts, which are subordinated to the
payments on the notes and the ratings do not address the payment of
these amounts.

The liquidity facility reduces in line with principal, covering
more than 36 months of debt service given the current interest-only
stage.

Sub-KRDs: Debt Profile - midrange, security package - stronger,
structural features - stronger

PEER GROUP

Spirit's closest peers are hybrid or managed pubco securitisations
of Greene King Finance Plc, Marston's Issuer Plc and Mitchells &
Butlers Finance Plc. The transaction's EBITDA generated by managed
pubs is around 76%, which is close to Greene King and higher than
Marston's, but below M&B, because it is 100% managed pubs. In terms
of the quality of the managed estate, the five-year average EBITDA
contribution per managed pub of Spirit is roughly in line with
Marston's securitisation but below Greene King. Spirit's projected
coverage ratios are stronger than closest peers mainly driven by
debt prepayments.

RATING SENSITIVITIES

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

-- Positive action is unlikely until Spirit is able to resolve
    the covenant breach status and the industry environment within
    the UK pub sector stabilises.

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

-- A slower than assumed recovery from the coronavirus shock
    resulting in a weakening of the projected FCF DSCRs.

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

The transaction is a securitisation of both managed and tenanted
pubs operated by Greene King, comprising 304 managed pubs and 226
tenanted pubs as at January 2021.

CREDIT UPDATE

The UK pub sector has been materially affected by the Covid-19
pandemic and its related containment measures. In 2020, the average
revenues of pubs dropped between 50% to 60%. Although the
restrictions are gradually lifting, uncertainties remain with
respect to if and when the level of trading will fully recover to
pre-pandemic level. However, the positive news about vaccination
rollout and more mutually accepted travel green list may boost the
UK pub sector this summer.

Spirit changed its reporting period to be in line with that of its
parent, to year-end in December instead of April. Therefore, this
financial year is shortened to only 36 weeks between July 2020 and
January 2021.

The 12 month rolling (TMR) total revenue between April 2020 and
January 2021 was GBP156.8 million, a reduction of 66% compared with
the previous TMR (April 2019-January 2020), in which tenanted pubs'
revenue declined slightly more than managed pub'. Gross profit
reduced proportionally to GBP115 million from GBP341 million,
supporting the stable gross margin. However, the TMR EBITDA dropped
to negative GBP8.2 million, mainly driven by reduced but still high
costs during the Covid-19 pandemic. Liquidity is solid. As of early
April, Spirit had GBP18.3 million cash and undrawn liquidity
facilities of GBP15million, covering 36 months of debt service
(interest only).

Currently in Technical Default, Enforcement Perceived Unlikely

Spirit first breached the covenant in the quarter ending July 2020
(and subsequently in October 2020, January 2021 and April 2021),
which was directly affected by the Covid-19 related lockdowns and
restriction measures. The company immediately sought but failed to
obtain waivers from bondholders, which put it into technical
default status. As of May 2021, Spirit's debt remains in technical
default status. Therefore, Spirit's trustee has the ability to
accelerate the outstanding debt at the ultimate direction of
bondholders. So far, no acceleration has taken place.

Fitch believes that bondholders' enforcement action will generally
be dependent on a number of factors: the perceived sector
sustainability; the duration of the pandemic's impact and
anticipated cash flow recovery period; the headroom to covenant
pre-coronavirus; and creditors' willingness to get involved in
complex enforcement processes.

The pub assets within the Spirit securitisation are considered
sustainable in the long term, and Fitch assumes that pubs will
recover to 2019 levels by the end of 2023. Consequently, Fitch
believes that there is currently no economic incentive for the
bondholders to enforce the debt. However, Fitch is constantly
monitoring the situation.

FINANCIAL ANALYSIS

The FRC assumes a gradual recovery from 2Q21, with a full recovery
to 2019 level reached by the end of 2023. The average FCF DSCRs
under Fitch's current FRC for class A5 is 2.6x, although the
profile is uneven and tends to focus on the period of low coverage
when amortisation starts from 2029.

Fitch expects Spirit's cash flows position to progressively
strengthen as restrictions are lifted. This reflects Fitch's view
that demand levels within the pub sector will return to normal in
the medium to long term. Fitch will nevertheless continue to
monitor the developments in the sector, and if Greene King's
operating environment has substantially worsened in relation to
coronavirus, Fitch will revise the FRC.

Fitch believes Spirit will continue to have flexibility to help
offset the impact of potential revenue shortfall. Under Fitch's
FRC, for the managed pubs Fitch assumed a significant cost
reduction to reflect the ongoing lockdown for the 1Q21. For 2Q21,
which covers of the gradual easing of restrictions, Fitch assumes a
proportional reduction in costs, to reflect the period of
restricted opening. Fitch expects tenanted pubs to have some cost
flexibility at the pub level, and to continue receiving financial
support from the UK government, although the amount is gradually
reducing. Fitch also assumes some reduction in maintenance capex
during the recovery period.

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.



                           *********


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

Troubled Company Reporter-Europe is a daily newsletter co-
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Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante,
Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman,
Editors.

Copyright 2021.  All rights reserved.  ISSN 1529-2754.

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