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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

          Wednesday, July 21, 2021, Vol. 22, No. 139

                           Headlines



F R A N C E

MARNIX FRENCH: S&P Affirms B Rating on Sr. Sec. Debt, Outlook Pos.


G E O R G I A

JSC MFO CRYSTAL: Fitch Affirms 'B-' LT IDR, Outlook Stable


G E R M A N Y

[*] GERMANY: Business Insolvency Requests Down 9% in April 2021


I R E L A N D

ARBOUR CLO III: Moody's Assigns (P)B3 Rating to EUR12MM F-R Notes
LAST MILE: Moody's Assigns B1 Rating to EUR13.37MM Class F Notes


I T A L Y

ALITALIA SPA: Successor to Face Challenges from Low-Cost Rivals
DIREKTA SRL: Ex-PM's Mother Acquitted of Fraudulent Bankruptcy


L U X E M B O U R G

ALLNEX (LUXEMBOURG): Moody's Puts B2 CFR Under Review for Upgrade
SITEL GROUP: Moody's Assigns 'B1' CFR, Outlook Stable


M A C E D O N I A

BARGALA: Stip Court Appoints Interim Bankruptcy Administrator


N E T H E R L A N D S

E-MAC DE 2006-II: Moody's Ups EUR24.5MM Class C Notes Rating to B1


R U S S I A

CENTROCREDIT BANK: S&P Alters Outlook to Stable, Affirms 'B/B' ICRs
MTS BANK: Fitch Affirms 'BB-' LT IDR, Alters Outlook to Positive


S P A I N

GESTAMP AUTOMOCION: Moody's Ups CFR to Ba3 on Improved Performance


T U R K E Y

AYDEM RENEWABLES: S&P Assigns Preliminary 'B' Long-Term ICRs
AYDEM YENILENEBILIR: Fitch Assigns First-Time LT IDR at 'B+(EXP)'


U N I T E D   K I N G D O M

ATLAS MARA: Executes Binding Debt Restructuring Deal with Creditors
MCLAREN GROUP: S&P Upgrades ICR to 'CCC+' on Improved Liquidity
MCLAREN HOLDINGS: Fitch Assigns First-Time 'B-(EXP)' LT IDR
S4 CAPITAL: Fitch Assigns First-Time 'BB' LT IDR, Outlook Stable
S4 CAPITAL: S&P Assigns Preliminary 'BB-' ICR, Outlook Stable

[*] UK: Corp. Insolvencies in England, Wales Up 19% in June 2021

                           - - - - -


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F R A N C E
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MARNIX FRENCH: S&P Affirms B Rating on Sr. Sec. Debt, Outlook Pos.
------------------------------------------------------------------
S&P Global Ratings affirmed its 'B' ratings on Webhelp group's
parent, Marnix French ParentCo, its core financing subsidiary
Marnix SAS, and the group's senior secured facilities, including
the proposed tap of about EUR285 million to its existing term
loan.

S&P is also assigning a 'B' issuer credit rating to Webhelp US LLC
and its proposed $350 million senior secured term loan, with a
recovery rating of '3' indicating its expectation of 55% recovery
in the event of a default.

The positive outlook indicates that S&P could raise the ratings in
the next 12 months if it anticipated Webhelp's adjusted leverage
would decrease sustainably to around 5.0x and funds from operations
(FFO) to debt would improve beyond 12%.

Webhelp intends to acquire OneLink from One Equity Partner and
finance the acquisition, meet transaction costs, and repay drawings
under its revolving credit facility (RCF) by issuing about EUR580
million of senior secured debt through core subsidiaries Marnix SAS
and newly incorporated Webhelp US LLC.

S&P expects the group's leverage to increase to about 5.8x as a
result of the proposed fully debt-funded acquisition. Under the
proposed transaction terms, Webhelp will raise a total of EUR580
million of new senior secured facilities to finance the acquisition
of OneLink, including an increase of about EUR285 million to its
existing EUR1.02 billion senior secured term loan (euro tranche).
It will also obtain a new $350 million senior secured term loan to
be raised by Webhelp US LLC, a newly incorporated company, 100%
indirectly owned by Marnix French ParentCo. The transaction will
result in leverage rising to about 5.8x from 4.8x in 2020.

With solid EBITDA growth and strong cash flow, Webhelp has
deleveraged faster than we projected in 2020, to just below 5.0x,
and S&P expects credit metrics to continue improving after
temporary releveraging in 2021. Strong growth from e-commerce and
high-technology clients, combined with cost mitigating actions
implemented since the first pandemic-related lockdown in March
2020, have supported Webhelp's operating results, which
outperformed our forecast in 2020. The group's revenue increased by
12% and it generated adjusted EBITDA margins of 17%, combined with
strong free operating cash flows (FOCF) of about EUR150 million
(close to EUR100 million after lease payments). This enabled
leverage improvement to 4.8x versus our forecast of 5.4x at
year-end 2020.

The proposed acquisition of OneLink is consistent with Webhelp's
strategy to extend its global presence and increase its share of
digitally enabled services. By acquiring OneLink, the group expects
to gain scale in Latin America and increase its nearshore and
offshore capabilities for U.S.-based clients. OneLink has
experienced high double-digit growth in the past three years (a 20%
compound annual growth rate from 2018 to 2020) and delivers higher
margins than Webhelp (18% pre-IFRS 16, compared with 15% in 2020
for Webhelp). Nevertheless, with revenue of about EUR150 million
and EBITDA of EUR33 million for the 12 months to April 30, 2021,
the acquisition is sizeable but not transformational for the
group's business risk profile. The OneLink acquisition, which
follows that of Dynamicall, completed in first-quarter, enables
Webhelp to increase its global presence and better serve customers
with cross-border operations. However, the group will still
generate 85% of its revenue in Europe and lack the global scale of
market leader Teleperformance. In addition, Webhelp has gradually
improved its S&P Global Ratings-adjusted EBITDA margins over the
past few years to 17% in 2020 from about 12.2% in 2016, supported
by an improved mix of nearshore and offshore operations, and by
integrating higher-margin acquisitions. OneLink will further
contribute to the group's margin improvement, but we expect
Webhelp's profitability will remain below that of Teleperformance,
which has constantly delivered S&P Global Ratings-adjusted margins
averaging 20% over the past few years.

S&P said, "The global outsourced customer relationship management
(CRM) market is very fragmented and in a consolidation phase, and
we expect the group to consistently pursue external growth.
Increased scale and a global presence enhance the value proposition
to customers. Consequently, we expect Webhelp will continue to seek
additional acquisition opportunities to further expand its global
footprint and product offering, targeting high-growth markets such
as the U.S. and Asia. Still, in our view, the group's financial
policy under Groupe Bruxelles Lambert (GBL)'s ownership is likely
to support deleveraging, considering GBL's long-term investment
strategy. We expect GBL will prioritize deleveraging and organic
growth over dividend distributions, and would financially support
Webhelp in case of large acquisitions.

"The positive outlook indicates that we could raise the ratings in
the next 12 months if we anticipated Webhelp's adjusted leverage
would decrease sustainably to around 5.0x and FFO to debt would
improve beyond 12%.

"We could raise the ratings if we believed that Webhelp's resilient
operating performance would support a sustainable improvement in
credit metrics, including adjusted debt to EBITDA around 5.0x and
adjusted FFO to debt above 12%. This would be contingent on
continued EBITDA improvement through organic and external growth,
underpinned by the group's market-leading positions in the European
CRM business process outsourcing (BPO) industry and recent
acquisitions of Dynamicall and OneLink.

"To achieve a higher rating, the group would also need solid FOCF,
translating into adjusted FOCF to debt comfortably above 5%.
Finally, we would need to be convinced that the group would not
embark on additional large debt-funded acquisitions that would
result in leverage remaining materially above 5.0x on a sustained
basis.

"We would revise the outlook to stable if we expected adjusted
leverage to remain above 5x and FFO to debt below 12%, due to
unexpected deterioration of profitability and weaker cash flow."
This could happen due to escalating competition from other CRM BPO
players, increased pricing pressure, deterioration of service
quality, or a cybersecurity breach that could disrupt operations
and damage the group's reputation. S&P could also revise the
outlook to stable if the group's acquisitive growth strategy
resulted in leverage remaining materially above 5.0x on a sustained
basis.




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G E O R G I A
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JSC MFO CRYSTAL: Fitch Affirms 'B-' LT IDR, Outlook Stable
----------------------------------------------------------
Fitch Ratings has affirmed JSC MFO Crystal's ratings, including the
institution's Long-Term Issuer Default Rating (IDR) at 'B-', and
removed them from Rating Watch Negative (RWN). The Outlook on the
Long-Term IDR is Stable.

The rating affirmation reflects Crystal's regaining access to
borrowings from foreign lenders in 2Q21, thereby successfully
reducing refinancing risk.

KEY RATING DRIVERS

The ratings of Crystal reflect its leading position in the Georgian
microfinance sector. Crystal focuses on higher-risk marginalised
borrowers, often in rural areas with informal incomes. Among pure
microfinance organisations (both banks and non-bank lenders),
Crystal has a notable franchise (13% by loan volume at end-1Q21 and
a gross loan portfolio of GEL366 million), but this is a niche
within a larger financial sector (microfinance is under 10% of the
total loan volume). Crystal plans to apply for a banking license in
4Q21, but this should not materially alter its business model.

Proactive management of credit risk helped limit deterioration of
Crystal's loan book after the three-month payment holiday offered
by Crystal to clients in 2Q20 as part of pandemic support measures.
Loans overdue by 30 days or more plus restructured and written-off
loans made up 7.6% of the gross portfolio at end-May 2021. Fitch
expects asset-quality risks to persist in 2021, leading to a modest
uptick in impaired loans generation in 2H21, but this should not
prevent a run-down of Crystal's problematic portfolio to about 6%
by end-2021.

Profitability remains under pressure, as Crystal's modest
operational margin provides limited capacity to absorb credit
losses or higher funding and hedging costs. Crystal's GEL6.8
million profit in 5M21 was supported by a reduction in loan loss
reserve coverage and by a switch to smaller, but higher-yielding
loans. However, Fitch expects this pressure on profits to continue
in the medium term, given stiff competition among lenders in
Georgia.

Crystal has modest capital adequacy (18.89% at end-May 2021), which
Fitch views as commensurate with its business model, and a recent
reduction in the minimum capital requirement by the National Bank
of Georgia (NBG) mitigates the risk of regulatory breaches. Crystal
would migrate to Basel III standards for capitalisation and
leverage upon acquisition of its banking license (including Pillar
2 requirements), but Fitch expects minimal changes from the current
guidance by the NBG for Crystal. Crystal plans to raise USD3
million subordinated debt during 3Q21 to strengthen its
capitalisation.

Pressure on Crystal's funding profile has abated after the company
regained access to credit from international financial institutions
(IFIs). During the pandemic Crystal's liquidity benefitted from a
credit line from the NBG (GEL68 million, of which GEL12 million was
still unused at end-May 2021). Fitch expects a gradual reduction in
its usage in 2H21. The addition of a banking license in early 2022
would provide Crystal direct access to NBG funding and the
possibility to raise deposits, but Fitch expects funding to remain
reliant on wholesale borrowings from IFIs and impact investors at
least in the medium term.

Crystal has an ESG Relevance Score of '4' for Governance Structure,
due to the high key-person risk in relation to Mr Archil Bakuradze,
its founder, chairperson and largest individual shareholder. This
score is in line with that of other rated peers where the founder
plays a material role in strategy or operations.

Fitch has also revised its ESG score for Management Strategy to '4'
from '3', to highlight the rating sensitivity to operational
implementation of the company's strategy, including its acquisition
of a banking license and reliance on borrowings from foreign
lenders. These concerns and the key-person risk have a negative
impact on the credit profile, and are relevant to the rating in
conjunction with other factors.

RATING SENSITIVITIES

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

-- Reduction in problem loans, improved profitability and more
    clarity on the company's medium-term strategy would be
    positive for the credit profile;

-- An upgrade of Crystal's Long-Term IDR would require a
    strengthening of its funding franchise, which would include
    both diversification of funding sources and lowering of
    funding costs;

-- Further upgrade would be conditional on a materially larger
    scale and a more stable/diversified business model.

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

-- Renewed constraints on access to external funding;

-- Crystallisation of asset-quality risks, leading to significant
    losses that threaten solvency;

-- Weakening structural profitability and a reduction of
    regulatory capital buffer.

BEST/WORST CASE RATING SCENARIO

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

ESG CONSIDERATIONS

Crystal has an ESG Relevance Score of 4 for governance structure
and management strategy, due to key-person risk and execution risk,
respectively. This has a negative impact on its credit profile and
is relevant to the rating in conjunction with other factors.

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



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G E R M A N Y
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[*] GERMANY: Business Insolvency Requests Down 9% in April 2021
---------------------------------------------------------------
Statistisches Bundesamt on July 13 disclosed that German local
courts reported 1,333 business insolvency requests in April 2021.
The Federal Statistical Office (Destatis) reports that this was a
decline of 9.0% compared with April 2020.  This means that the
economic problems of many businesses due to the coronavirus crisis
have still not been reflected by an increase in reported business
insolvencies.

The local courts reported that, in relation to the business
insolvency requests, the prospective debts owed to creditors
amounted to approximately EUR2.5 billion in April 2021. In April
2020, they totalled roughly EUR3.2 billion.



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I R E L A N D
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ARBOUR CLO III: Moody's Assigns (P)B3 Rating to EUR12MM F-R Notes
-----------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to refinancing debt to be issued by
Arbour CLO III Designated Activity Company (the "Issuer"):

EUR196,000,000 Class A-R Senior Secured Floating Rate Notes due
2034, Assigned (P)Aaa (sf)

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

EUR22,000,000 Class B-1-R Senior Secured Floating Rate Notes due
2034, Assigned (P)Aa2 (sf)

EUR20,000,000 Class B-2-R Senior Secured Fixed Rate Notes due
2034, Assigned (P)Aa2 (sf)

EUR23,750,000 Class C-R Senior Secured Deferrable Floating Rate
Notes due 2034, Assigned (P)A2 (sf)

EUR28,250,000 Class D-R Senior Secured Deferrable Floating Rate
Notes due 2034, Assigned (P)Baa3 (sf)

EUR20,000,000 Class E-R Senior Secured Deferrable Floating Rate
Notes due 2034, Assigned (P)Ba3 (sf)

EUR12,000,000 Class F-R Senior Secured Deferrable Floating Rate
Notes due 2034, Assigned (P)B3 (sf)

RATINGS RATIONALE

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

The Issuer is a managed cash flow CLO. At least 90% of the
portfolio must consist of 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 portfolio is expected to be 80% ramped as of the closing
date and to comprise of predominantly corporate loans to obligors
domiciled in Western Europe. The remainder of the portfolio will be
acquired prior to the effective date on January 30, 2021, in
compliance with the portfolio guidelines.

Oaktree Capital Management (UK) LLP will manage the CLO. It will
direct the selection, acquisition and disposition of collateral on
behalf of the Issuer and may engage in trading activity, including
discretionary trading, during the transaction's 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 impaired
obligations or credit improved obligations.

On February 12, 2016 (the "Original Issue Date"), the Issuer issued
EUR44,600,000 of unrated Subordinated Notes due 2029 (the "Existing
Subordinated Notes"). In addition, the Issuer will issue
EUR4,766,000 of Additional Subordinated Note which are not rated
and which shall form a single class of Subordinated Notes with an
aggregate principal amount outstanding of EUR49,366,000 and a
maturity extended to 2034.

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.

Methodology Underlying the Rating Action:

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

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

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

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

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

Par Amount: EUR400,000,000.00

Diversity Score: 50

Weighted Average Rating Factor (WARF): 3035

Weighted Average Spread (WAS): 3.45%

Weighted Average Coupon (WAC): 4.25%

Weighted Average Recovery Rate (WARR): 44.0%

Weighted Average Life (WAL): 8.5 years

LAST MILE: Moody's Assigns B1 Rating to EUR13.37MM Class F Notes
----------------------------------------------------------------
Moody's Investors Service has assigned the following definitive
ratings to the debt issuance of Last Mile Logistics Pan Euro
Finance DAC (the "Issuer"):

EUR240.40M Class A Commercial Mortgage Backed Floating Rate Notes
due August 2033, Definitive Rating Assigned Aaa (sf)

EUR44.83M Class B Commercial Mortgage Backed Floating Rate Notes
due August 2033, Definitive Rating Assigned Aa3 (sf)

EUR46.04M Class C Commercial Mortgage Backed Floating Rate Notes
due August 2033, Definitive Rating Assigned A3 (sf)

EUR67.85M Class D Commercial Mortgage Backed Floating Rate Notes
due August 2033, Definitive Rating Assigned Baa3 (sf)

EUR83.61M Class E Commercial Mortgage Backed Floating Rate Notes
due August 2033, Definitive Rating Assigned Ba2 (sf)

EUR13.37M Class F Commercial Mortgage Backed Floating Rate Notes
due August 2033, Definitive Rating Assigned B1 (sf)

Last Mile Logistics Pan Euro Finance DAC is a true sale transaction
backed by a EUR510.21 million loan.

RATINGS RATIONALE

The rating action is based on: (i) Moody's assessment of the real
estate quality and characteristics of the collateral; (ii) analysis
of the loan terms; and (iii) the expected legal and structural
features of the transaction.

The key parameters in Moody's analysis are the default probability
of the securitised loan (both during the term and at maturity) as
well as Moody's value assessment of the collateral. Moody's derives
from these parameters a loss expectation for the securitised loans.
Moody's total default risk assumption is medium for the loan. The
Moody's LTV of the securitised loan at origination is 78.5%.
Moody's has applied a property grade of 2.0 for the portfolio (on a
scale of 1 to 5, 1 being the best).

The key strengths of the transaction include: (i) the good quality
collateral comprising a portfolio of logistics/urban logistics and
light industrial properties; (ii) the strong tenant diversity;
(iii) the medium total default risk; (iv) the experienced sponsor
and asset manager; and (v) the positive impact of e-commerce trends
on logistics assets.

Challenges in the transaction include: (i) the weak release price
mechanism and covenants; (ii) the additional mezzanine debt that
increased the overall leverage; (iii) the lack of scheduled
amortisation; and (iv) the exposure to a country with a local
currency country risk ceiling (LCC) below Aaa.

The principal methodology used in these ratings was "Moody's
Approach to Rating EMEA CMBS Transactions" published in May 2021.

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

Main factors or circumstances that could lead to an upgrade of the
ratings are generally: (i) an increase in the property values
backing the underlying loans; (ii) a decrease in the default
probability driven by improving loan performance or decrease in
refinancing risk.

Main factors or circumstances that would lead to a downgrade of the
ratings are generally: (i) a decline in the property values backing
the underlying loans; (ii) an increase in the default probability
of the combined loans; and (iii) a significant change to the
portfolio's exposure to Spain with a LCC at Aa1.



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I T A L Y
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ALITALIA SPA: Successor to Face Challenges from Low-Cost Rivals
---------------------------------------------------------------
Alberto Brambilla at Bloomberg News reports that the successor to
bankrupt Italian flag-carrier Alitalia SpA faces an uphill battle
to establish itself after low-cost rivals took advantage of the
pandemic and a long restructuring process to grab chunks of its
home market.

Italia Trasporto Aereo SpA, known as ITA, plans to start services
on Oct. 15, after months of talks with European Commission
officials over terms of the overhaul and aid previously granted to
Alitalia finally produced a deal on July 15, Bloomberg relates.

According to Bloomberg, with those issues resolved, the company is
set to kick off with mainly European flights and a handful of
long-haul routes from Rome and Milan to New York, Boston, Tokyo and
Miami.  The goal is to build a leaner carrier that can focus mainly
on international markets, without getting bogged down by the costs
and commitments that made Alitalia a ward of the government since
2017, Bloomberg notes.

But ITA, at half the size of the old Alitalia, may be too small to
compete against established airlines with only seven wide-body
planes, and is lacking a partner after years of talks with major
carriers including Deutsche Lufthansa AG and Delta Air Lines Inc.,
Bloomberg states.

Long-haul travel also remains hobbled by widespread border curbs,
and the corporate demand that's usually a key driver for
inter-continental journeys is expected to take years to fully
revive after the 16-month global pandemic, Bloomberg says.

In the short-haul markets that are rushing back, lower-cost rivals
led by Ryanair Holdings Plc and fast-expanding Wizz Air Holdings
Plc have moved into Italy during the pandemic while the government
haggled with Brussels over what Alitalia assets could be handed
over to state-owned ITA, Bloomberg discloses.

"Uncertainties are very high in long-haul markets," Bloomberg
quotes Andrea Giuricin, transportation economist at the University
of Milano-Bicocca, as saying.  And ITA "will hardly will have costs
as low as Wizz or Ryanair."

EasyJet Plc may represent a further threat once travel curbs in its
home U.K. market are eased, while ITA will be launching just as
tourism enters the typically slow winter season when even the
healthiest European airlines generally lose money, according to
Bloomberg.

State-owned Alitalia was the dominant local presence in Italy for
decades. A bloated workforce, an aging fleet and inefficient
operating model saddled it with high costs -- but allowing it to
fail was a political nonstarter.

Successive governments plowed more than EUR5 billion (US$5.9
billion) into the firm after former shareholder Etihad Airways of
Abu Dhabi cut ties in 2017, Bloomberg recounts.  The EU, while
allowing further funding during the pandemic, has demanded
arms-length terms for the transfer of assets like the Alitalia name
to ITA in order to avoid violating state-aid rules, Bloomberg
notes.

According to Bloomberg, under terms of the deal with the EU,
there’ll also be competitive tenders for non-airline activities,
with ITA required to partner with other companies interested in
bidding for ground handling and maintenance services.

ITA, owned by the Italian Finance Ministry, will start out
debt-free but will be half the size of Alitalia, with just 52
aircraft -- increasing to 78 in 2022 -- and about 2,800 staff.  It
will receive 700 million euros from the Treasury to begin flights,
according to a statement issued after the EU agreement was reached,
Bloomberg relays.

The new airline plans to hire up to 5,700 people, but Alitalia
workers will lose salary levels and seniority, likely exacerbating
labor strains that have dogged the company throughout the
bankruptcy process, according to Bloomberg.

Chief Executive Officer Fabio Lazzerini has said an alliance with
an international airline could be both commercial and industrial,
meaning the partner could buy a stake, Bloomberg states.

Yet Lufthansa and other potential suitors that have accepted state
aid from their own governments are either barred from investing or
risk a political backlash if they make such a move before paying
back their rescue funding, Bloomberg notes.

Mr. Giuricin, the transportation economist, said a partnership is
necessary for ITA but it won’t be enough without an investment,
Bloomberg relays.

DIREKTA SRL: Ex-PM's Mother Acquitted of Fraudulent Bankruptcy
--------------------------------------------------------------
ANSA reports that ex-premier Matteo Renzi's mother Laura Bovoli was
acquitted of fraudulent bankruptcy in the collapse of a Cuneo-based
firm, Direkta SrL.

Direkta, which produced and distributed fliers and ads for
supermarkets, failed in 2012, ANSA relates.

At the time Ms. Bovoli was head of a supermarket contract firm in
the family hometown of Rignano sull'Arno near Florence, ANSA notes.


Renzi's parents have been at the centre of several probes, and the
ex-PM, currently head of the centrist Italia Viva (IV) party, is
himself facing two probes for alleged fake invoicing, adds the
report.



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L U X E M B O U R G
===================

ALLNEX (LUXEMBOURG): Moody's Puts B2 CFR Under Review for Upgrade
-----------------------------------------------------------------
Moody's Investors Service placed the B2 corporate family rating and
the B2-PD probability of default rating of Allnex (Luxembourg) & Cy
S.C.A. on review for upgrade. Concurrently, Moody's has placed on
review for upgrade all of the senior secured debt instruments
issued by Allnex S.a.r.l. and Allnex USA Inc. This action follows
the announcement that PTTGC International (Netherlands) BV (the
acquirer), a subsidiary of Thai petrochemical company PTT Global
Chemical Public Company Limited (PTTGC, "the group", Baa2 stable),
will acquire all shares of Allnex[1].

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

PTTGC International (Netherlands) BV will pay the total
consideration of EUR4 billion from cash on hand and loans provided
by PTT Public Company Limited (Baa1 stable), the ultimate parent of
PTTGC and financial institutions. The total consideration will
consist of EUR3.6 billion to be paid for the 100% of Allnex Holding
GmbH's shares and EUR0.4 billion to acquire a shareholder loan
provided by Allnex S.a.r.l to the acquired company. Moody's
anticipates that upon the closure of the deal all the outstanding
debt of Allnex will be repaid. The transaction is expected to be
closed by year end the latest.

The rating action reflects Moody's expectation that Allnex's credit
profile will substantially benefit from the acquisition of PTTGC.
In response to the announcement, Moody's has placed PTTGC's ratings
on review for upgrade. In case of a successful closing of the
transaction and repayment of Allnex's outstanding debt, Moody's
expects to withdraw Allnex's rating. Moody's expects to conclude
the review upon close of the company's sale or upon termination of
the merger agreement.

The review will focus on the impact of the transaction on Allnex's
credit profile and the level of consolidation within the larger
group. Moody's will also take into consideration any changes to
Allnex's credit profile upon the closure of the transaction and the
details on the capital structure of the enlarged entity with
respect to Allnex's current debt instruments and any plans to
refinance its debt.

As Moody's has previously stated, Allnex's rating could be upgraded
if it (1) maintains EBITDA margins in the mid to high teens (%);
(2) generates a sustained positive FCF/debt ratio in the mid to
high single digit range (%); and (3) reduces its adjusted gross
debt/EBITDA ratio sustainably below 5.0x.

The ratings could be downgraded if debt/EBITDA would consistently
increase above 6.0x and FCF were to turn negative. Any further
significant distribution to shareholders and/or debt funded
acquisition delaying the deleveraging prospects of the company
could also contribute to a rating downgrade.

LIST OF AFFECTED RATINGS:

Issuer: Allnex (Luxembourg) & Cy S.C.A.

Placed On Review for Upgrade:

LT Corporate Family Rating, currently B2

Probability of Default Rating, currently B2-PD

Outlook Actions:

Outlook, Changed To Ratings Under Review From Stable

Issuer: Allnex S.a.r.l.

Placed On Review for Upgrade:

Senior Secured Bank Credit Facility, currently B2

Outlook Actions:

Outlook, Changed To Ratings Under Review From Stable

Issuer: Allnex USA Inc.

Placed On Review for Upgrade:

Senior Secured Bank Credit Facility, currently B2

Outlook Actions:

Outlook, Changed To Ratings Under Review From Stable

PRINCIPAL METHODOLOGY

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

SITEL GROUP: Moody's Assigns 'B1' CFR, Outlook Stable
-----------------------------------------------------
Moody's Investors Service assigned to Sitel Group S.A. a B1
corporate family rating and a B1-PD probability of default rating.
Concurrently, Moody's assigned B1 ratings to Sitel's proposed $250
million senior secured multicurrency revolving credit facility and
EUR1 billion senior secured term loan B. Moody's also assigned a B1
rating to Sitel Worldwide Corporation's proposed $1.4 billion
senior secured term loan. The outlook is stable.

Proceeds from the proposed term loans and cash will be used to buy
Sykes Enterprises, Incorporated ("Sykes") for approximately $2.2
billion, repay existing Sitel and Sykes debt and pay
transaction-related fees and expenses. The proposed $250 million
revolver is expected to be undrawn and fully available at closing.
The transaction is expected to close in August 2021.

The Mulliez family has been a shareholder of Sitel since 2009. The
Creadev Investment Fund ("Creadev"), controlled by the Mulliez
family, acquired Sitel in 2015. Governance considerations include
the increase in leverage resulting from the debt-funded acquisition
of Sykes. However, Moody's does not anticipate debt-funded
dividends over at least the next 12 to 18 months given Creadev's
established track record to date of not raising debt at its
portfolio companies to fund dividends.

Assignments:

Issuer: Sitel Group S.A.

Corporate Family Rating, Assigned B1

Probability of Default Rating, Assigned B1-PD

Senior Secured Multicurrency Revolving Credit Facility, Assigned
B1 (LGD3)

Senior Secured Term Loan B, Assigned B1 (LGD3)

Issuer: Sitel Worldwide Corporation

Senior Secured Term Loan B, Assigned B1 (LGD3)

Outlook Actions:

Issuer: Sitel Group S.A.

Outlook, Assigned Stable

Issuer: Sitel Worldwide Corporation

Outlook, Stable

The assigned ratings are subject to review of final documentation
and no material change to the size, terms and conditions of the
transaction as advised to Moody's.

RATINGS RATIONALE

Sitel's B1 CFR is supported by its large revenue size, placing it
among the top three customer experience business process
outsourcing ("CX BPO") providers globally by pro forma revenue, its
geographic and product scope and its leading position in its
markets. The company also benefits from a portfolio of
long-standing blue chip customers and the positive organic growth
trajectory in revenue and EBITDA supported by the positive growth
aspects for the CX BPO industry. These strengths are mitigated by
the company's high pro forma financial leverage estimated at 5.3x
(Moody's adjusted and excluding acquisition synergies) as of
December 31, 2020, integration risk associated with the business
combination, meaningful customer concentration with top 10
customers representing 27% of pro forma 2020 revenue, and the
highly fragmented and competitive nature of the CX BPO industry
resulting in pressure on prices and margins.

All financial metrics cited reflect Moody's standard adjustments.

The business combination between Sitel and Sykes, two complementary
businesses, creates a top 3 company in the highly fragmented and
competitive CX BPO industry with $3.8 billion in combined pro forma
revenue for FYE2020. Sykes is a full lifecycle provider of global
customer experience management services, multichannel demand
generation, and digital transformation. Sykes had approximately
$1.7 billion revenue for FY2020 with 81% of revenues generated in
the Americas and the remainder generated in EMEA. The merger is
expected to provide Sitel with long-term strategic benefits
including an expanded geographic footprint that gives Sitel greater
flexibility in relocating services to lower cost regions, more
revenue stability by further diversifying across industry
end-markets and geographies, lower customer concentration, and
opportunities for acquisition synergies.

Sitel is expected to maintain a good liquidity profile over the
next 12-15 months. Sources of liquidity consist of cash balances of
at least $300 million as of March 31, 2021 (proforma for the
proposed transaction), an expectation of free cash flow to debt
between 3% to 5% and Moody's assumption of full access to the new
$250 million multicurrency revolving credit facility maturing 2026
upon transaction close. The revolver is expected to have a
springing net leverage covenant tested when borrowings exceed 40%
of availability. There is no financial maintenance covenant
applicable to the term loans. Moody's do not expect the covenant to
be triggered over the near term and believe there is enough cushion
within the covenant based on Moody's projected earnings levels for
the next 12-15 months. The company also utilizes accounts
receivable factoring arrangements with third-party financial
institutions to assist in managing working capital.

As proposed, the new credit facilities are expected to provide
covenant flexibility that could adversely affect creditors. Notable
terms include incremental debt capacity up to the greater of $600
million and 100% of Consolidated EBITDA, plus unlimited amounts
subject to 4.5x First Lien Net Leverage Ratio (if pari passu
secured). Amounts up to the greater of $300 million and 50% of
Consolidated EBITDA may be incurred with an earlier maturity date
than the initial term loans.

The credit agreement permits the transfer of assets to unrestricted
subsidiaries, up to the carve-out capacities, subject to "blocker"
provisions which prohibit the transfer of any material intellectual
property to an unrestricted subsidiary. Dividends or transfers
resulting in partial ownership of subsidiary guarantors could
jeopardize guarantees subject to protective provisions which only
permit guarantee releases if such transfer is with a third party
that is not an affiliate of the Parent or its subsidiaries and is
consummated for a bona fide business purpose.

The credit agreement provides some limitations on up-tiering
transactions, including the requirement that each affected senior
secured lender consents to any amendment or waiver providing for
the subordination of any lender's right to payment or for the
subordination of the liens securing any obligations owed to any
senior secured lender.

The proposed terms and the final terms of the credit agreement may
be materially different.

Debt capital is comprised of a $250 million multicurrency revolving
credit facility expiring in 2026, a $1.4 billion term loan B due
2028 and a EUR1.0 billion term loan B due 2028. The B1 credit
facility ratings, the same as the B1 CFR, reflects the
preponderance of debt represented by the term loans and revolver.
The term loans and revolver are guaranteed by substantially all
direct and indirect, existing and future material restricted
subsidiaries domiciled in the US, UK, and Luxembourg. The term
loans and revolver also have a first priority security interest in
substantially all assets of the borrowers and the guarantors.

The stable outlook reflects Moody's expectations that Sitel will
successfully integrate Sykes and achieve synergy benefits with
limited business disruptions. Moody's projects Sitel will generate
low-to-mid single digit revenue growth, reduce financial leverage
towards 4.5x over the next 12-18 months and maintain a good
liquidity profile.

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

Moody's could upgrade Sitel's ratings if profitable revenue growth
leads to a reduction in financial leverage sustained around 4x and
free cash flow to debt is above 5% on a sustained basis while the
company maintains balanced financial policies, including an
emphasis on debt reduction, and good liquidity.

Moody's could downgrade Sitel's ratings if the company cannot
translate planned synergy benefits into higher EBITDA, revenue
growth is weaker than anticipated, Sitel fails to generate
meaningful positive free cash flow or liquidity deteriorates. The
ratings could also be downgraded if Moody's expects leverage to
approach 5.5x as a result of deviations from operating forecasts,
further debt-funded acquisitions or shareholder distributions.

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

Sitel Group S.A, domiciled in Luxembourg but with a US-based
headquarters and management team based in Miami, Florida, is a
leading global provider of CX products and solutions. Pro-forma for
the Sykes acquisition, Sitel generated $3.8 billion revenue for
FY2020. The company is owned by the Mulliez Family through Creadev.



=================
M A C E D O N I A
=================

BARGALA: Stip Court Appoints Interim Bankruptcy Administrator
-------------------------------------------------------------
SeeNews reports that a court in Stip, in the eastern part of North
Macedonia, is looking into the grounds to open bankruptcy
proceedings against shoe maker Bargala, the Federation of Trade
Unions of Macedonia said on July 15.

According to SeeNews, the Federation of Trade Unions of Macedonia
said in a statement the court has appointed an interim bankruptcy
administrator and prohibited the company from using its properties
without the approval of the administrator.

The statement reads company employees, represented by the
Federation of Trade Unions, proposed opening a bankruptcy procedure
over unpaid wages and the fact that the bank accounts of the
company have been blocked for more than 45 days, SeeNews relates.

The employees of Bargala have not received their wages for
September 2020, April 2021 and
May 2021, SeeNews relays, citing an earlier statement by the
Federation of Trade Unions.

Bargala has a shoe factory in Stip and stores in Stip, Skopje,
Strumica, Prilep and Vinica.



=====================
N E T H E R L A N D S
=====================

E-MAC DE 2006-II: Moody's Ups EUR24.5MM Class C Notes Rating to B1
------------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of three Notes
in E-MAC DE 2006-I B.V., E-MAC DE 2006-II B.V. and E-MAC DE 2007-I
B.V. The rating action reflects better than expected collateral
performance as well as increased levels of credit enhancement for
the affected Notes.

Moody's affirmed the ratings of the Notes that had sufficient
credit enhancement to maintain the current ratings. Moody's also
affirmed the rating of the Class C Notes in E-MAC DE 2006-I B.V.
because the current rating is commensurate with the expected loss
on this Class of Notes. The Class C Notes in E-MAC DE 2006-I B.V.
are currently undercollateralized, due to outstanding Principal
Deficiency Ledger.

Issuer: E-MAC DE 2006-I B.V.

EUR27M Class B Notes, Upgraded to A3 (sf); previously on Jun 18,
2018 Upgraded to Baa3 (sf)

EUR17.5M Class C Notes, Affirmed Caa3 (sf); previously on Jun 18,
2018 Affirmed Caa3 (sf)

Issuer: E-MAC DE 2006-II B.V.

EUR35M Class B Notes, Affirmed A2 (sf); previously on Mar 9, 2020
Upgraded to A2 (sf)

EUR24.5M Class C Notes, Upgraded to B1 (sf); previously on Mar 9,
2020 Upgraded to B3 (sf)

Issuer: E-MAC DE 2007-I B.V.

EUR19.5M Class A1 Notes, Affirmed A2 (sf); previously on Mar 9,
2020 Affirmed A2 (sf)

EUR443.3M Class A2 Notes, Affirmed A2 (sf); previously on Mar 9,
2020 Affirmed A2 (sf)

EUR39.1M Class B Notes, Upgraded to A2 (sf); previously on Mar 9,
2020 Upgraded to Baa1 (sf)

RATINGS RATIONALE

The rating action is prompted by decreased key collateral
assumptions, namely the portfolio Expected Loss (EL) assumption,
due to better than expected collateral performance, as well as an
increase in credit enhancement for the affected tranches.

Revision of Key Collateral Assumptions

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

The performance of the transactions has continued to be stable
since the last rating action in June 2018 for E-MAC DE 2006-I, and
March 2020 for E-MAC DE 2006-II and E-MAC DE 2007-I. Total
delinquencies have remained stable at high levels in all three
transactions over the past year, at around 37% in E-MAC DE 2006-I,
31% in E-MAC DE 2006-II, and 23% in E-MAC DE 2007-I.

Cumulative losses in E-MAC DE 2006-I currently stand at 10.86% of
original pool balance, in E-MAC DE 2006-II at 9.07% of original
pool balance, and E-MAC DE 2007-I at 9.84% of original pool
balance.

Moody's decreased the expected loss assumption due to the stable
performance in E-MAC DE 2006-I to 11.9% as a percentage of original
pool balance from 12.3%, in E-MAC DE 2006-II to 10% as a percentage
of original pool balance from 10.7%, and in E-MAC DE 2007-I to
10.8% as a percentage of original pool balance from 11.5%.

Moody's has also assessed loan-by-loan information as a part of its
detailed transaction review to determine the credit support
consistent with target rating levels and the volatility of future
losses. As a result, Moody's has maintained the MILAN CE assumption
at 35% for E-MAC DE 2006-I and E-MAC DE 2006-II, and 33% for E-MAC
DE 2007-I.

Increase in Available Credit Enhancement

Sequential amortization and trapping of excess spread used to
reduce the unpaid PDL in these transactions led to the increase in
the credit enhancement supporting the Notes affected by the rating
action.

For instance, expressed as a percentage of the non-defaulted pool
balance, in E-MAC DE 2006-I the credit enhancement for Class B
increased to 50.2% from 27% since the last rating action in June
2018. In E-MAC DE 2006-II the credit enhancement for Class C
increased to 18.9% from 13.2% since the last rating action in March
2020. In E-MAC DE 2007-I the credit enhancement for Class B
increased to 39.1% from 30.9% since the last rating action in March
2020.

Counterparty Exposure

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

Moody's considered how the liquidity available in the transactions
and other mitigants support continuity of Note payments in case of
servicer default. Moody's considers that the current back-up
servicing arrangements are insufficient to support payments in the
event of servicer disruption. As a result, the ratings of the Class
B Notes in E-MAC DE 2006-I, Class B Notes E-MAC DE 2006-II, and
Class A1, A2, and B Notes in E-MAC DE 2007-I continue to be
constrained by operational risk.

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

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

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

Factors or circumstances that could lead to an upgrade of the
ratings include: (1) performance of the underlying collateral that
is better than Moody's expected; (2) an increase in available
credit enhancement; and (3) improvements in the credit quality of
the transaction counterparties.

Factors or circumstances that could lead to a downgrade of the
ratings include: (1) an increase in sovereign risk; (2) performance
of the underlying collateral that is worse than Moody's expected;
(3) deterioration in the Notes' available credit enhancement; and
(4) deterioration in the credit quality of the transaction
counterparties.



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

CENTROCREDIT BANK: S&P Alters Outlook to Stable, Affirms 'B/B' ICRs
-------------------------------------------------------------------
S&P Global Ratings revised its outlook on Russia-based CentroCredit
Bank JSC to stable from negative. At the same time, S&P affirmed
its 'B/B' long- and short-term issuer credit ratings on the bank.

S&P forecasts economic growth of about 3.7% for Russia in 2021 and
average growth of 2.2% for 2022-2024. Since second-half 2020,
capital markets in Russia have demonstrated a recovery trend after
the stress related to the pandemic: the RTS index of Russian
equities improved to early 2020 levels and the Russian government
bond index has remained largely stable over the past 12 months.

This, to a large extent, mitigates the risks related to the high
exposure to market risk associated with the banks' large security
portfolio and high single-name concentrations in the lending book.
The bank maintains a large share of its assets in securities,
mainly Russian government bonds and equities of Russian blue-chip
companies with high dividend yields. S&P said, "We expect that the
bank's RAC ratio will be in the 13.5%-14.5% range in 2021-2022
versus 15.7% at year-end 2020. Our forecast is based on the
assumption that the bank's security portfolio, which accounted for
68% of total assets as of March 31, 2021, will not increase by more
than 10% per year. We expect gross loans could increase by about
30% in 2021 while net loans will remain less than 25% of total
assets. We expect the bank will maintain a regulatory capital
adequacy ratio (N1) above 15% over the next 12 months compared with
the minimum of 8% (17.3% as of June 1, 2021)."

S&P said, "We expect CentroCredit will report high earnings
volatility, largely influenced by the revaluation of its securities
portfolio. This reflects the focus of its business model on
substantial investment in securities; thus, the bank's performance
is more volatile than the average Russian bank. In 2020, the bank
reported a return on assets of 2.7% under International Financial
Reporting Standards (IFRS). In the first half of 2021, CentroCredit
showed Russian ruble (RUB) 2.8 billion ($38 million) of losses
under Russian accounting standards due to the negative revaluation
of Russian government bonds, which exceeded positive revenue from
equities. In our forecast, we assume that the bank could show
losses under IFRS for full-year 2021, but expect that it will
become profitable in 2022 through reallocation of assets in its
securities portfolio in response to market conditions. We also
expect that such loss--while negatively impacting the bank's
overall capital--would not materially change our assessment of the
bank's capitalization."

The bank reported 9.4% Stage 3 loans at mid-2021, which were fully
provisioned. S&P expects that Stage 3 loans could increase up to
11% in 2021-2022 due to COVID-19-related stress, which is in line
with our expectations for the system. The bank's loan portfolio is
highly concentrated by single names, with top-20 loans accounting
for 88% of total loan book and 75% of capital as of March 31, 2021.
However, the bank provisioned its gross loan portfolio at about 47%
at year-end 2020. This high level of provisioning in addition to
strong capital buffers should help the bank withstand potential
stress in case some exposures in its highly concentrated portfolio
do not perform.

CentroCredit holds a large position in liquid Russian government
bonds and can reduce its securities portfolio to provide relief for
its capital adequacy ratio. Collateralized funding from the central
counterparty accounted for 71% of the bank's funding base as of
March 31, 2021. However, S&P considers this neutral for its
assessment of the bank's funding and liquidity and does not
consider it emergency funding. This mainly reflects liquid
collateral of Russian government bonds and that the bank's assets
and liabilities mismatch is manageable. S&P notes that the bank has
solid funding and liquidity ratios, with a stable funding ratio of
155% and broad liquid assets to short-term wholesale funding
exceeding 1.4x at year-end 2020. This, in turn, reflects the bank's
predominantly liquid assets and high capital buffer as the most
stable funding source.

S&P said, "The stable outlook on CentroCredit reflects our view
that the bank will maintain strong capitalization and sufficient
regulatory capital adequacy ratio in the next 12 months, with the
RAC ratio and regulatory capital adequacy ratio (N1) sustainably
above 10%. We also expect that its funding and liquidity position
will remain stable, reflecting the recovery trend in debt and
equity in the Russian and global capital markets, which should be
favorable for the bank's collateralized funding.

"We could take a negative rating action if we observed weakening in
the bank's capitalization, with the forecast RAC ratio falling
below 10% due to a material increase in market risk from increasing
investments in equities or high revaluation losses from the bank's
securities portfolio, although this is not in our current base
case. Weakening funding and liquidity metrics could also lead to a
negative rating action.

"We consider a positive rating action unlikely at this stage,
because it would require a significant strengthening of the bank's
business position, or a material change in its risk profile and
risk appetite as well as stable macroeconomic conditions."


MTS BANK: Fitch Affirms 'BB-' LT IDR, Alters Outlook to Positive
----------------------------------------------------------------
Fitch Ratings has revised MTS Bank's (MTSB) Outlook to Positive
from Stable and affirmed the bank's Long-Term Issuer Default Rating
(IDR) at 'BB-'. Fitch has also affirmed the bank's Viability Rating
(VR) at 'b+'.

KEY RATING DRIVERS

The revision of the Outlook on MTSB's IDR follows a similar action
on the bank's majority shareholder, PJSC Mobile TeleSystems (MTS,
BB+/Positive). The bank's IDR of 'BB-' and Support Rating of '3'
are driven by potential support from its parent, in case of need.
In Fitch's view, MTS has a strong propensity to support its
subsidiary given its almost 100% ownership; increased integration
between the bank and the telecom company in recent years; and
shared brand and reputational risk for the parent from a
subsidiary's default.

The two-notch difference between MTS's and MTSB's ratings reflects
the subsidiary's small, although growing, franchise and therefore
currently modest strategic importance for the parent and a short
record of profitable performance.

MTSB's VR of 'b+' reflects a narrow franchise in the concentrated
Russian banking sector with a focus on high-risk/high-return
consumer lending (50% of total assets at end-1Q21). The VR also
factors in the bank's high loan growth in the unsecured retail
segment (by 14% in 1Q21, not annualised), which exposes asset
quality and profitability to potential downswings of the credit
cycle, and only modest capital buffers.

Impaired loans (Stage 3 under IFRS 9) were 8.6% of gross loans at
end-1Q21, slightly down from 9% at end-1H20, aided by resumed loan
growth and write-offs. Coverage of Stage 3 loans by specific loan
loss allowances (LLAs) was robust at 84%, while coverage by total
LLAs was 133% at end-1Q21. The impaired loans origination ratio
(increase in impaired loans plus write-offs divided by average
performing loans) in the unsecured retail portfolio increased to
10% in 2020 (from 7%-8% in 2018-2019) before moderating to 7% in
1Q21 (annualised) on the back of economic recovery and accelerated
loan growth.

The share of Stage 2 loans improved to 6.4% at end-1Q21 from 14.4%
at end-1H20, mainly driven by lower risks in the corporate book.
Loans restructured since the beginning of 2020 accounted for 3.6%
of gross loans at end-1Q21, with about 80% classified as Stage 2
and Stage 3.

Weaker economic activity and higher loan impairment charges (LICs)
put pressure on MTSB's profitability in 2020, which had been
gradually improving before the pandemic. In 2020, operating profit
declined to 0.3% of regulatory risk-weighted assets (RWAs) from 1%
in 2019. This was mainly driven by higher LICs (7% of gross loans
in 2020 compared with 4% in 2019).

Pre-impairment operating profit remained strong at 8% of average
loans in 2020, supported by healthy margins (9%), net fees and
commissions (5% of average loans) and improved operating efficiency
(cost/income was 50% in 2020). However, LICs consumed more than 90%
of pre-impairment operating profit in 2020. The bank's performance
improved notably in 2H20-1Q21 on the back of economic recovery but
Fitch expects the cost of risk to remain high in the short term due
to the bank's rapid expansion in consumer lending.

MTSB's capital buffers are modest but are likely to be supported by
the shareholder in case of need, as illustrated by past record.
Fitch core capital (FCC) stood at 8% of regulatory RWAs at
end-1Q21. The consolidated regulatory common equity Tier 1 (CET1)
ratio of 8.2% at end-1Q21 displayed only limited headroom above the
regulatory minimum requirement of 7% including buffers.
Capitalisation was supported by a RUB4 billion (about 1% of RWAs)
equity injection from the parent in June 2021.

MTSB is mainly customer-funded (86% of total liabilities at
end-1Q21). Funds from related-parties (36% of liabilities) have
been stable in recent years. Third-party deposits (50% of
liabilities) are mainly attracted from retail clients. MTSB's
liquidity buffer (cash, short-term placements with banks and
unpledged securities eligible for repo) was reasonable at 19% of
total assets and covered 26% of customer accounts at end-1Q21.

RATING SENSITIVITIES

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

-- MTSB's IDRs and Support Rating could be upgraded if MTS's
    ratings are upgraded. Significantly improved synergies and
    further integration with the parent could result in a narrower
    notching but this is likely to be a long-term development.

-- An upgrade of the VR would require a moderation in credit
    growth and some improvement in profitability, while
    maintaining reasonable capital buffers.

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

-- The bank's IDRs could be downgraded if MTS's ratings are
    downgraded or if Fitch views that MTS's propensity to support
    the bank deteriorates. A sale of a controlling stake in the
    bank's capital to a lower rated or non-rated investor would
    result in a downgrade of the IDRs.

-- The bank's VR could be downgraded if pre-impairment operating
    profit is insufficient to cover LICs and the bank is loss
    making for a few consecutive periods. Capital erosion as a
    result of losses or rapid loan growth, particularly if
    statutory capital ratios fall below the minimum requirements,
    can also be credit- negative, if not promptly addressed by
    shareholder support.

BEST/WORST CASE RATING SCENARIO

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

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

MTSB's ratings are driven by support from MTS.

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

GESTAMP AUTOMOCION: Moody's Ups CFR to Ba3 on Improved Performance
------------------------------------------------------------------
Moody's Investors Service has upgraded the corporate family rating
of Gestamp Automocion, S.A. to Ba3 from B1, its probability of
default rating to Ba3-PD from B1-PD and its guaranteed senior
secured instrument rating to Ba3 from B1. The outlook on the
ratings has been changed to stable from positive.

"The upgrade reflects continued improvements of Gestamp's operating
performance and further confirmation of its focus on capex
moderation, higher free cash flow generation and leverage
reduction. This increases visibility of the company's achieving
credit metrics in line with a Ba3 rating over the next 12-18
months", said Falk Frey a Moody's Senior Vice President and Lead
Analyst for Gestamp.

RATINGS RATIONALE

Gestamp's shift in financial policy with a focus on capex n
moderation, higher free cash flow generation and leverage reduction
has been confirmed by the Executive Chairman at the capital markets
day held on June 15, 2021.

In the crisis year 2020, Gestamp has already demonstrated proof of
this new strategy by generating a free cash flow (Moody's adjusted)
of EUR244 million (EUR-243 m in 2019) driven by a significantly
reduced capex of EUR558 million compared with EUR832 million in
2019 and a positive impact from working capital inflow of almost
EUR400 million. Moody's expects adjusted FCF to be positive again
in the current year and beyond.

Taking comfort in the change in financial policy, Moody's
anticipates a reduction in its adjusted gross leverage (debt/EBITDA
as adjusted by Moody's) to well below 5.0x for the current fiscal
year and a further decline to well below 4.0x in 2022 which Moody's
deem appropriate for the Ba3 level for Gestamp.

Gestamp's CFR Ba3 rating reflects the company's (1) size and scale
as a tier 1 automotive supplier, predominantly for body-in-white
(BIW) components, with market-leading positions in cold stamping
and hot forming steel technologies; (2) track record of revenue
growth well above volume growth in global light vehicle sales and a
strong pipeline of new business, reflected by its consistently high
capital spending; (3) long-term agreements with a diversified
automotive manufacturer customer base that provides a degree of
protection from certain risks; (4) positive exposure to the current
industry drivers of vehicle light-weighting and higher safety
standards, and (5) solid liquidity.

Negatively, the rating reflects Gestamp's (1) dependency on global
light vehicle production levels, which are highly cyclical e.g.
volumes in 2020 declined by 16.2% and have started to recover in
2021 (+29.7% in H1 2021) and should further grow in and 2022; (2)
history of negative free cash flow (FCF) generation (Moody's
adjusted) during 2015-2019, which resulted from high capital
spending; and (3) historic weak leverage metrics, driven by high
capital spending in greenfield operations, which has started to
come down in 2020 and further in Q1 2021.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects Moody's expectation that Gestamp's
debt/EBITDA (Moody's adjusted) will recover to a well below 5.0x
for the current fiscal year and decline further to well below 4.0x
in 2022, whilst Moody's adjusted EBITA margins should improve to
above 5% by 2021 and exceed 6% in 2022.The stable outlook also
reflects Moody's expectation that Gestamp will generate positive
free cash flows.

LIQUIDITY

Moody's consider Gestamp's liquidity position solid. Gestamp's main
sources of liquidity include (1) cash on the balance sheet of
EUR1.96 billion (as of March 2021), (2) a fully available EUR325
Revolving Credit Facility due 2025 and (3) annual funds from
operations of around EUR700 million in Moody's stress case. In
addition, the company has long-term bilateral bank facilities in
place, which had an undrawn volume of approximately EUR235 million
at the end of March.

These liquidity sources, totaling to more than EUR3 billion over
the next 12 months, comfortably exceed liquidity uses. Gestamp's
main use of liquidity will be capital spending, which Moody's
expects at around EUR550-600 million. Short-term debt maturities
for the next 12 months amount to EUR1322 million, excluding
financial leases and including the repurchase of the EUR500 million
bond in May 2021. Uses of liquidity also include Moody's assumption
of minimum working cash of around EUR260 million. Furthermore,
Moody's liquidity analysis considers risks related to Gestamp's
factoring programme (EUR633 million as of December 2020), which is
uncommitted, dependent on its top line activity levels and could
contract in times of a shrinking market environment.

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

A further upgrade of Gestamp's ratings within the next 12-18 months
is rather unlikely. Nonetheless, positive rating pressure could
build longer-term should Gestamp be able to achieve (1) EBITA
margins sustainable above 6%, (2) Debt/EBITDA below 3.0x and (3) a
track record of a sustained material positive FCF generation.

Negative pressure would build if Gestamp fails to (i) return to
EBITA margins above 5% by 2022, (ii) de-lever to debt/EBITDA
(Moody's adjusted) below 4.0x by 2022, or in case of (iii)
inability to generate sustainably positive FCF.

LIST OF AFFECTED RATINGS:

Issuer: Gestamp Automocion, S.A.

Upgrades:

LT Corporate Family Rating, Upgraded to Ba3 from B1

Probability of Default Rating, Upgraded to Ba3-PD from B1-PD

BACKED Senior Secured Regular Bond/Debenture, Upgraded to Ba3 from
B1

Outlook Actions:

Outlook, Changed To Stable From Positive

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Automotive
Suppliers published in May 2021.

COMPANY PROFILE

Gestamp Automocion, S.A. (Gestamp), headquartered in Madrid, Spain,
designs, develops and manufactures metal components for the
automotive industry. The company generated EUR7.5 billion of
revenue and reported an EBITDA of EUR757 million in fiscal year
2020.



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

AYDEM RENEWABLES: S&P Assigns Preliminary 'B' Long-Term ICRs
------------------------------------------------------------
S&P Global Ratings assigned its 'B' preliminary long-term issuer
credit ratings to Aydem Renewables (Aydem Yenilenebilir Enerji
A.S.), an independent Turkish-based electricity generator with
currently 1GW installed capacity, and its 'B' preliminary issue
rating to the company's proposed senior secured notes.

The stable outlook reflects the sound cash flow from the YEKDEM
tariffs, projected output increase from the growth capex,
normalization of water levels, and expectation of adequate
liquidity. It also reflects its expectations of debt to EBITDA of
5.5x in 2021 and below 4.0x in 2022 and funds from operations (FFO)
to debt ratios of 13% in 2021 and 20%-23% in 2022.

Aydem Renewables is a small-scale generator operating in a high
risk country.

It has 1GW installed power generation capacity (about 1.25% of
total Turkey's generating capacities) spread over 19 assets across
Turkey, out of which 84% is hydro and 16% wind. In 2020, the
company generated 2.6 terrawatt-hours (TWh) of electricity, which
is 0.9% of total power generation in Turkey. Similar to its main
rated peers-- Zorlu Renewables, DTEK Renewables, and GGU, Aydem
Renewables is a small player and therefore more sensitive to
changes in the operating environment. All its assets are located in
Turkey, which we view as a high-risk country, characterized by a
weak banking system and heightened volatility of local currency.

The existing feed-in tariff (FIT) YEKDEM upholds the company's cash
flow.

Aydem Renewables operates under a favorable renewable energy
support mechanism (YEKDEM) established in 2005. The key features of
YEKDEM for the existing stations are very supportive for the
company, as renewables output is acquired as a "must-run," the
tariffs are USD-linked (with monthly adjustments) and are set for
10 years after the plant is commissioned, and are about 1.6x higher
(for hydro and wind) than the free market electricity price,
helping Aydem Renewables maintain solid profitability (79% EBITDA
margins in 2020) until the expiration of YEKDEM. More than 70% of
the existing power stations operate under YEKDEM with an average
five-year expiration life. That translates into 82% of the
company's 2020 electricity output and 90% of the company's 2020
EBITDA being covered by YEKDEM. YEKDEM-2 was introduced for
stations to be constructed between July 2021 and December 2025. S&P
sees it as less supportive; it will be Turkish lira-denominated and
generally 1.5x lower than the existing FIT for already operating
plants. The impact is, however, modest for Aydem Renewables at this
stage, only affecting a portion of the expansion projects detailed
below.

Hydro assets of Aydem Renewables generate more volatile output, but
benefit from low costs and zero emissions.

Although Aydem Renewables' hydro fleet is well diversified across
the country as located on four different basins with
better-than-the country's average rainfall levels, the company's
total generation was in the range of 2.2GWh-2.9GWh in the last
three years because Turkey has suffered an extreme drought
affecting the hydro reservoirs. Positively, the company has very
low operating costs and zero CO2 emissions. YEKDEM tariffs are
higher for geothermal assets than for hydro and wind ($105 per MWh
versus $73 per MWh). This currently brings Aydem Renewables'
profitability in line with that of its close peer, Zorlu, at about
80% EBITDA margins. With the gradual expiration of YEKDEM tariffs
in the next five years, Aydem Renewables assets will become exposed
to the merchant electricity prices. S&P said, "We note that the
company will benefit from the advantageous cost position of its
generation fleet. However, we believe business risk will then
increase and Aydem Renewables will gradually reduce its financial
leverage by then to mitigate this risk."

To mitigate the volatility of hydro generation, Aydem Renewables is
to invest about $400 million into expansion in 2021-2023.

In the next two years the company plans to add 396MW of solar and
196MW of wind generating capacities under a hybrid FIT, plus 103MW
of wind and 58MW of hydro under YEKDEM-2. The hybrid FIT regime is
beneficial for Aydem Renewables as it allows for complementing the
existing power station sites with other types of renewable
generation under the same license. The total generation output of a
hybrid site (hydro + wind, hydro + solar, or solar + wind) will
help to improve the load factor of a site to close to the maximum.
In addition, the related capex will not require spending on new
connections and infrastructure.

Generation output growth will improve the credit metrics from
2022.

The company has relatively high debt leverage, FFO to debt to be
about 12.6% and debt to EBITDA of 5.5x in 2021 due to muted
earnings and cash flow because of drought and low water reservoir
levels in Turkey. S&P said, "We think the planned capacity
additions and recovery of water levels to historical averages will
allow the company to boost its generation and cash flow, and lead
to FFO to debt slightly above 20% and FFO to debt below 4x from
2022. This will depend on the successful completion of the growth
projects and better hydrology conditions. We believe the company's
free operating cash flow will be negative in 2021-2022 due to
planned capex, turning positive from 2023. We expect the company
will finance existing capex plans with its operating cash flow and
with the proceeds from the projected bond placement, without
raising additional debt (which will also be limited by the bond
documentation)."

The wider group's relatively higher leverage constrains the
rating.

Approximately 82% of the company is owned by Aydem Enerji Group,
which reported about $3 billion in revenue and $600 million of
EBITDA last year. The group benefits from the relatively stable
cash flows of its regulated electricity distribution business (50%
of EBITDA). S&P said, "We view the related regulatory framework as
adequately designed to incorporate the entities' operating and
capital expenditures, with the fourth five-year period now in place
(2021-2025) with a weighted average cost of capital [right?] of
12.3%. In addition, the two distribution companies of Aydem Enerji
Group have outperformed versus the theft and losses targets set by
the independent regulator, EMRA. Conversely, we consider the second
part of Aydem Enerji Group's generation portfolio (1GW of thermal
capacities, 25% of the group's EBITDA) to be less advantageous than
that of Aydem Renewables (also 25% of the group's EBITDA). In
addition, Aydem Enerji Group is more leveraged if compared to
stand-alone Aydem Renewables: notably, we project Aydem Enerji
Group's gross debt to EBITDA to be 6.5x-7.0x in 2021 before
dropping to about 5.0x in 2022. We don't see any immediate
liquidity stresses on the group level in the next 12 months, and
note the management highlighted intention to reduce leverage at the
group level to below 4x in the medium term. The track record of
deleveraging is yet to be established, but should there be an
improvement of group's debt/EBITDA to below 5.0x, that might create
an upside potential for the group credit profile (GCP) and
therefore for the rating on Aydem Renewables. We don't expect this
to happen in the next 12 months, though. Overall, we assess the GCP
of Aydem Enerji Group at 'b' and as we see Aydem Renewables as
highly strategic for the group. This leads us to cap the ratings on
Aydem Renewable at the GCP level."

The final ratings will depend on the final transaction
documentation of the proposed notes.

S&P said, "For our preliminary rating analysis, we assume the
company will place up to $750 million 5.5 years bond and use the
proceeds to refinance all the existing debt. We assume the coupon
rate is close to the company's current cost of borrowing.
Accordingly, the preliminary ratings should not be construed as
evidence of a final rating. If we do not receive final
documentation within a reasonable timeframe, or if final
documentation departs from materials reviewed in our preliminary
rating analysis, we could withdraw or revise our ratings. Potential
changes include the utilization of bond proceeds; the maturity,
size, interest and other conditions of the bonds; financial and
other covenants; and the security and ranking of the bonds."

Outlook

S&P said, "The stable outlook reflects our view that the risks
associated with the higher leverage at Aydem Enerji Group,
USD-denominated debt, and the company's small scale of operations
are balanced by the USD-linked and favorable YEKDEM tariffs,
projected improvements in cash flow on 753MW capacities additions
and better hydrology, and adequate liquidity.

"In our base case, we expect the company's generation volumes to
remain largely flat in 2021 and rise to about 3,800 GWh in 2022
from 2,636 GWh in 2020 on the back of new capacity additions and
better hydrology conditions after the severe drought in Turkey in
2020-2021. Based on this, we project 2022 FFO to debt will improve
to slightly above 20% from 13% this year, and debt to EBITDA to
below 4.0x from 5.5x. These levels are commensurate with the 'b+'
SACP."

Downside scenario

Negative rating pressure would build if:

-- Operational performance of the company is weaker than we
currently assume because of prolonged adverse hydrology conditions
or delays in adding new capacities;

-- There is a stress on the company's or group's liquidity driven
by the reliance on short-term debt;

-- There are unexpected, unfavorable regulatory revisions of the
YEKDEM tariffs (for example, not protecting the company from
foreign exchange fluctuations); or

-- There are negative group interventions (such as cash
upstreaming, imposed assets acquisitions, or merger and acquisition
[M&A] transactions).

Upside scenario

S&P said, "Ratings upside is limited in the next 12 months, given
the ratings incorporate our 'b' assessment of the wider group
credit quality of Aydem Enerji Group, which is unlikely to
deleverage quickly from its high levels. We might consider an
upgrade of Aydem Renewables if the group show's a sustainable track
record of deleveraging with debt/EBITDA improving to below 5.0x
without any liquidity stresses, all else being equal.

"For us to revise the SACP to 'bb-', Aydem Renewables would have to
maintain FFO to debt comfortably above 20%, providing headroom for
potential volatilities in hydrology without negative interventions
from the parent or liquidity stresses. This, however, would not
automatically lead to an upgrade."


AYDEM YENILENEBILIR: Fitch Assigns First-Time LT IDR at 'B+(EXP)'
-----------------------------------------------------------------
Fitch Ratings has assigned Aydem Yenilenebilir Enerji Anonim
Sirketi (Aydem RES), a renewable energy producer in Turkey, an
expected first-time Long-Term Issuer Default Rating (IDR) of
'B+(EXP)' with Stable Outlook. Fitch has also assigned Aydem RES's
proposed notes of up to USD750 million, an expected senior secured
rating of 'B+(EXP)' with a Recovery Rating of 'RR4', in line with
the expected Long-Term IDR.

The final ratings are contingent upon the receipt of final
documentation conforming materially to information already received
and the implementation of a refinancing scheme as proposed in its
business plan.

The ratings of Aydem RES reflect its high initial leverage,
limited, although increasing, size and scale of operations, and
rising exposure to merchant price and foreign-exchange (FX) as
feed-in tariffs gradually expire. Rating strengths are its good
asset quality, low offtake risk, supportive regulation for
renewable energy producers in Turkey, high profitability and
mitigated FX exposure on debt by naturally hedged revenue.

KEY RATING DRIVERS

Small Renewable Energy Producer: Aydem RES is a small renewable
energy producer operating 20 hydro plants, three wind power plants,
and one geothermal plant and biogas plant each, located in four
regions of Turkey. The group has a market share of about 1% in
Turkey with an installed capacity of 1,020MW and annual generation
of about 2.6TWh.

Supportive Regulation: About 80% of Aydem RES's capacities
providing about 90% of consolidated revenue in 2020 benefitted from
the Renewable Energy Support Mechanism, known as YEKDEM, a law that
provides fixed feed-in tariffs (FiTs) denominated in US dollars for
10 years. Assets under YEKDEM framework benefit from a lack of
price risk and low offtake risk as all renewable generation is
purchased by Energy Market Regulatory Authority. After 10 years,
assets switch to merchant-market terms and start selling at
wholesale prices in Turkish liras, which are lower than FiTs.

Rising Merchant Exposure: Fitch forecasts the share of FiT-linked
revenue to fall to about 80% of consolidated revenue in 2023, 70%
in 2024 and below 60% in 2025 as FiTs for the company's hydro and
wind plants gradually expire. This will weaken its business and
financial profiles due to decreasing revenue visibility and rising
FX mismatch. However, rising merchant exposure will be gradual,
which should give the company sufficient time to adapt its business
strategy and capital structure with the proposed bond amortisation
in 2025 and 2026. By 2028, Aydem RES will operate on a fully
merchant basis and Fitch expects its debt capacity for the current
rating to reduce significantly.

High, although Decreasing, Leverage: Fitch forecasts funds from
operations (FFO) gross and net leverage to increase to slightly
above 7x and 6x, respectively, in 2021, on the back of weak
hydrology, before easing to an average of about 4.5x and 4x over
2022-2025, levels that are commensurate with the rating. This is
driven by cash flow from operations averaging TRY1,014 million
(USD105 million) over 2021-2025, average capex of TRY159 million
and dividend payments averaging 60% of pre-dividend free cash flow
(FCF) in 2023-2025. More rapid deleveraging, as anticipated by
management, may be positive for the ratings, but may be offset by
the reducing debt capacity.

Reliance on Hydro: About 80% of Aydem RES's electricity is produced
at hydro plants, but these are highly dependent on weather
conditions and contribute to cash flow volatility. Fitch forecasts
Aydem RES's generation to contract by 15% in 2021 on the back of a
dry year, but to grow by 30% in 2022 as water levels normalise and
newly constructed assets are commissioned. Geographical
diversification across Turkey partially reduces operational
volatility.

New Capex Projects: Aydem RES plans to add about 700MW of extra
capacity in 2022-2023. Most of the projects are hybrid power plants
(396MW solar and 196MW wind), which Fitch assumes means
constructing solar or wind farms to complement existing hydro
plants. Hybrid capacities benefit from FiT incentive of the
existing plant, have short construction cycle and require lower
capex than greenfield projects. Fitch views Aydem RES's investments
in new renewable projects as credit-positive and forecast them to
start contributing to EBITDA in 2022.

Positive Free Cash Flow: Fitch forecasts Aydem RES to generate
positive FCF from 2023 after several expansion projects are
completed. This is backed by strong profitability, a very low cost
base and small maintenance capex needs, supporting the credit
profile. In Fitch's view, the company has flexibility to adjust
dividends, maintaining its leverage commensurate with the rating
and complying with bond covenants.

Challenging Operating Environment: The ratings incorporate FX
volatility and operating environment risks in Turkey. A fall of
about 20% of the lira against the US dollar in 2021 and prospects
of an erosion in international reserves or severe stress in the
corporate or banking sectors create risks for the stability of
YEKDEM. A compromised YEKDEM could threaten the stable US
dollar-linked tariffs for renewable energy producers, for Aydem
RES's business processes and for smooth currency conversion.

Part of a Larger Group: Aydem RES is 82% controlled by a larger
Aydem Energy group. Aydem Energy is present across the utility
value chain in Turkey and, apart from renewables, has 1GW of
installed thermal capacity, large electricity distribution and
electricity retail businesses. Four out of eight board members
represent Aydem Energy, with the remaining four being independent.

Standalone Profile Drives Rating: Fitch expects Aydem RES's
bondholders to benefit from proposed covenants that will restrict
dividend payments, loans to the parent and other affiliate
transactions. Fitch therefore views the overall parent links as
weak and focus Fitch's analysis on a standalone Aydem RES.

DERIVATION SUMMARY

Aydem RES shares the same operating and regulatory environment as
Zorlu Yenilenebilir Enerji Anonim Sirketi (B-/Stable). Both have
similar scale of operations, high profitability and benefit from
YEKDEM, which will gradually expire, decreasing revenue visibility
and raising FX mismatches. Aydem RES's exposure to hydro leads to
more volatile generation volumes than at Zorlu's geothermal power
plants. This is balanced by Aydem RES's slightly higher
geographical diversification. The rating differential reflects
Aydem RES's lower forecast leverage.

Aydem RES has a weaker business profile than Turkish peers Enerjisa
Enerji A.S. and Baskent Elektrik Dagitim A.S. (both
AA+(tur)/Stable) due to higher cash-flow predictability of
regulated electricity distribution than Aydem RES's mix of
quasi-regulated FiT and merchant exposure. Aydem RES has a stronger
business profile than Ukraine-based renewable energy producer DTEK
Renewables B.V. (B-/Stable) due to lower counterparty risk of the
renewable energy off-taker in Turkey, higher cash-flow
predictability and a stronger operating environment.

Aydem RES's business profile also compares well with that of
Uzbekistan-based hydro power generator Uzbekhydroenergo JSC
(B+/Stable, SCP 'b') on the back of a stronger regulatory framework
with long-term tariffs and better asset quality.

Aydem RES has a stronger financial profile than Zorlu and DTEK
Renewables, but weaker than that of Enerjisa and Baskent. Aydem
RES's strong profitability and positive FCF expectations support
the company's deleveraging plans.

KEY ASSUMPTIONS

-- GDP growth in Turkey of 6.3% in 2021 and 3.7%-4.5% in 2022
    2025. Inflation of 15.5% in 2021, 12% in 2022 and 9%-9.5% in
    2023-2025;

-- Electricity generation volumes about 15% below management
    forecasts for hydro and 2% below for wind;

-- US dollar-denominated tariffs as approved by the regulator and
    merchant price increasing below CPI in lira for the next five
    years;

-- Operating expenses in lira to increase slightly below
    inflation rate until 2025;

-- Capex close to management forecasts for the next five years;

-- Dividend outflow of about 60% of pre-dividend FCF on average
    over 2023-2025.

KEY RECOVERY RATING ASSUMPTIONS

-- For issuers with IDRs of 'B+' and below, Fitch performs a
    recovery analysis for each class of obligations of the issuer.
    The issue rating is derived from the IDR and the relevant
    Recovery Rating (RR) and notching, based on the going-concern
    enterprise value of the company in a distressed scenario or
    its liquidation value.

-- The recovery analysis assumes that Aydem RES would be a going
    concern in bankruptcy and that the company would be
    reorganised rather than liquidated.

-- A 10% administrative claim is assumed.

Going-Concern Approach

-- The going-concern EBITDA estimate reflects Fitch's view of a
    sustainable, post-reorganisation EBITDA level upon which we
    base the valuation of the company.

-- The going-concern EBITDA is estimated at USD99 million.

-- Fitch assumes an enterprise value multiple of 5x.

With these assumptions, Fitch's waterfall generated recovery
computation (WGRG) for the senior secured notes is in the 'RR3'
band. However, according to Fitch's Country-Specific Treatment of
Recovery Ratings Criteria, the Recovery Rating for Turkish
corporate issuers is capped at 'RR4'. The Recovery Rating for
senior unsecured notes is therefore 'RR4' with the WGRC output
percentage at 50%.

RATING SENSITIVITIES

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

-- Improved financial profile with FFO leverage below 4x, FFO net
    leverage below 3.5x and FFO Interest cover above 3x on a
    sustained basis without significant weakening in revenue
    visibility.

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

-- Generation volumes well below current forecasts, a sustained
    reduction in profitability or a more aggressive financial
    policy leading to FFO leverage above 5x, FFO net leverage
   above 4.5x and FFO interest cover below 2.3x on a sustained
    basis. Deterioration of the business mix with FiT-linked
    revenue representing less than 60% on a structural basis could
    lead to a tightening of these sensitivities.

-- Disruption of payments from the Energy Market Regulatory
    Authority, reduction of FiTs or cancellation of FiTs' hard
    currency linkage or assets switching to merchant price faster
    than assumed by the existing business plan.

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

Fitch views Aydem RES's liquidity prior to refinancing as weak, but
manageable. At end-2020, available cash of TRY146 million was
insufficient to cover short-term debt of TRY742 million. Liquidity
risk is mitigated by the company's fairly stable quasi-regulated
business, which should ease access to bank funding.

At end-2020, Aydem RES's debt consisted of loans from Turkish banks
of TRY4,929 million maturing evenly until 2030. FX structures of
debt and revenue were well matched as almost all debt was in US
dollars against about 90% of US dollar-linked revenue in 2020.

Aydem RES plans to place Eurobonds this year to refinance all
existing debt and fund expansionary capex projects. In Fitch's
view, refinancing will significantly improve the company's
liquidity profile as there will be no debt maturities over the next
few years.

Aydem RES's FX exposure will gradually become less balanced as the
share of the company's USD-linked revenue falls to about 80% in
2023, 70% in 2024 and below 60% in 2025. This will limit financial
flexibility and make the company more exposed to volatile USD/TRY
exchange rate. This is mitigated by the proposed partially
amortising debt structure.

ISSUER PROFILE

Aydem RES is a small renewable energy producer operating mostly
hydro and wind power plants across Turkey. Aydem RES is controlled
by Aydem Energy by 81.56%, with the remaining being free float.

SUMMARY OF FINANCIAL ADJUSTMENTS

-- Lease as opex approach;

-- Other operating income and expenses are not part of EBITDA.

ESG CONSIDERATIONS

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



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

ATLAS MARA: Executes Binding Debt Restructuring Deal with Creditors
-------------------------------------------------------------------
Erin McClam at Bloomberg News reports that Atlas Mara says it has
executed a binding debt restructuring agreement with a significant
majority of its creditors.

According to Bloomberg, creditors representing 88% of the aggregate
debt outstanding under direct and contingent financial liabilities
agree to enter Support and Override Agreement.  The Support and
Override Agreement is focused only on holding company structure,
does not include operating subsidiaries, Bloomberg notes.

The company says it's making progress on completion of previously
announced divestitures, Bloomberg relates.

Among the terms, participating creditors with direct facilities
with the company agree to forbearances on maturities of their
facilities to Sept. 30, with possibility of further extension,
Bloomberg discloses.

Atlas Mara is a financial institution listed on the London Stock
Exchange.

MCLAREN GROUP: S&P Upgrades ICR to 'CCC+' on Improved Liquidity
---------------------------------------------------------------
S&P Global Ratings upgraded luxury sports car manufacturer McLaren
Group Ltd.'s (McLaren) long-term issuer credit rating to 'CCC+' and
assigned a 'CCC+' issue rating on the new senior secured notes. The
recovery rating is '3'.

The stable outlook reflects S&P's view that McLaren's liquidity
will be significantly improved post refinancing, and it expects end
market demand to recover through 2021 and 2022, driving top-line
and EBITDA improvement. The sustainability of the capital structure
remains dependent on management meeting its base case and market
conditions remaining supportive.

The refinancing of the existing debt, further issuances, and the
sale and leaseback of its U.K. headquarters will bolster McLaren's
liquidity. S&P now assesses the company's liquidity as adequate,
given the significant improvement of sources over uses following
the imminent changes in McLaren's capital structure. McLaren plans
to issue $620 million of notes (or GBP450 million equivalent),
alongside a super-senior 4.75-year RCF of GBP55 million (with a
further GBP40 million of guarantee lines). As part of this
transaction, McLaren will redeem its existing senior secured notes
and repay its RCF. At the same time, McLaren will issue GBP400
million of new preference shares and GBP150 million of new
convertible preference shares, both of which we treat as debt-like
instruments. McLaren also recently completed the sale and leaseback
of its U.K.-based headquarters and manufacturing plant, resulting
in proceeds of GBP170 million. As part of the transaction, the
company will repay its one-year GBP150 million loan to the National
Bank of Bahrain, which it secured at the height of the
pandemic-related global restrictions. A significant portion of the
proceeds will remain as cash on balance sheet, resulting in about
GBP310 million of cash on "day 1" following the refinancing and new
equity raise.

With the sale of a stake in McLaren Racing and the decision to
deconsolidate it from McLaren's financial statements, McLaren has
undergone a major transformation in its structure. In December
2020, McLaren completed the sale of a stake in its racing division
to a consortium of investors led by MSP Sports Capital for GBP185
million. MSP's shareholding of the division is expected to increase
to 33% by the end of 2022 (currently 15%), following the initial
investment, with McLaren holding the remaining 67%. U.S.-based
investment group MSP specializes in the ownership of professional
sports teams, leagues, and businesses, and invested alongside its
strategic partners: UBS O'Connor, LLC. and the Najafi Companies. As
a result of the transaction, McLaren Racing will be carved out of
the restricted group with the relationship governed at a commercial
arms-length agreement. The restricted group, McLaren Holdings Ltd.,
where the core automotive business sits alongside the applied
division, is not expected to cash fund the requirements of McLaren
Racing in the near term, because the company expects the division
to be self-funded. There is no committed exit plan for the racing
division. McLaren Holdings Ltd. will no longer report the
operations of the racing division within its consolidated accounts
because it will be accounted for as a joint venture. S&P has taken
the decision to henceforth exclude the impact of the racing
division in its forecast, because there is a contractual agreement
which states that the McLaren Automotive Group could not, and will
not, support the racing division, unless subject to limited
capacity under the restricted payment provisions and limitations on
investments in affiliates. However, there are strong ties between
McLaren and the Formula One racing team in terms of economic
ownership, brand image, and management. Therefore, should the
current contractual relationship or behavior of any of the parties
change, indicating financial, strategic, or other support between
the groups, S&P could revisit and potentially reverse its decision
to deconsolidate the Formula One racing division.

Contractual protections are strong and signal a fairly firm
intention to separate the fortunes of the two companies. In terms
of specific documented restrictions in place to stop leakage of
cash from automotive to Formula One in future, the restricted
payments permissible under the bond documentation are:

-- Build-up basket: 50% of consolidated net income;

-- General basket: GBP30 million (in total, not per year);

-- No restrictions on dividends if automotive leverage is less
than 2x;

-- The transaction with affiliates is capped at the higher of
GBP20 million or 20% of EBITDA (in total, over the life of the
deal); and

-- 2x ratio basket covers the three-year horizon.

S&P said, "We view the starter baskets as fairly minimal, and our
expectation is that these will not be utilized within the next
three years to support the Formula One racing division.
Furthermore, we view any likelihood of parties deciding to revisit
the deal (for example, if both companies exceed expected
performance in the coming years or if one were to come under
financial stress) as event risk and currently not part of our base
case. However, we could reverse our decision to deconsolidate the
racing business if we were to witness any indications of financial
support to the Formula One division--for example, by way of
amending existing agreements.

"In terms of the impact of the deconsolidation on our projections
for McLaren, the racing division has generated deeply negative
EBITDA in recent years, given the high costs involved in operating
a Formula One team. As such, our decision to deconsolidate means
that racing no longer weighs on McLaren's EBITDA in our forecasts.
However, due to high capitalized research and development (R&D)
costs (which we expense), McLaren still exhibits negative S&P
Global Ratings-adjusted EBITDA over our 12-month rating horizon.

"We expect automotive wholesale volumes to rise in 2021 and again
in 2022, but remain below 2019 levels. Wholesale volumes dropped
significantly in 2020 to 1,659 vehicles, down 64% from 2019, as the
group suffered from the pandemic-induced economic fallout. The U.K.
manufacturing site closed for several months--largely in the second
and fourth quarters of 2020--and the company's global dealership
network halted its operations frequently throughout the year. There
was also some effect on volumes following management's decision to
reduce dealership inventories slightly. We expect wholesale volumes
to rise to about 3,000-3,250 in 2021, and edge upward in 2022,
closer to pre-pandemic levels in the next couple of years." Key
markets across Asia and North America are operating at expected
levels and are making up some of the shortfall from closures in a
few European regions. McLaren's Artura model, launched in February
2021, is also supporting orders, with deliveries expected to begin
in third-quarter 2021.

There is reasonable visibility on the order book for most of 2021,
providing confidence in the company meeting its base case for 2021,
and the first-quarter results illustrate that McLaren is on track
for its sales volumes this year. S&P said, "As a result, we
forecast 2021 revenue for the automotive group to reach GBP900
million-GBP950 million, up about 38%-45% from 2020, and rising in
2022. We expect reported EBITDA to be about GBP90 million-GBP110
million in 2021 and GBP120 million-GBP140 million in 2022, but
after adjustments for capitalized R&D costs, which are expected to
be about GBP145 million-GBP155 million in both years, EBITDA is
likely to turn negative for 2021 and near neutral in 2022.
Furthermore, we anticipate that funds from operations (FFO) will be
negative for 2021 and 2022. The key metrics we use to assess
McLaren's financial position, such as debt to EBITDA and FFO to
debt, we expect will remain negative for at least 2021. The company
is forecast to continue generating negative free operating cash
flow (FOCF) for 2021."

Cash burn remains high despite reductions from previous years,
which could prove a drag on McLaren's slowly improving metrics. S&P
expects capital expenditure (capex) to decrease significantly in
2021 compared with 2020, to GBP150 million-GBP170 million from
about GBP237.8 million, because McLaren has completed most of the
investment required to develop the new vehicle architecture that
will underpin many of its future model releases, including the
Artura model.

S&P said, "We expect capex for the year to largely focus on
automotive product development costs, namely the final completion
of the Artura platform and development of the Ultimate Series.
Despite the reduction, we forecast capex at about 15%-20% of sales
in 2021 and 13%-17% in 2022. High capex is particularly common for
luxury sports car manufacturers, but this remains a factor that
limits improvement in key credit ratios. We forecast FOCF at about
negative GBP135 million-negative GBP155 million for 2021, and
trending toward neutral in 2022, although still slightly negative.
Any higher-than-anticipated levels of cash burn could also lead to
liquidity calculations coming under some strain, although the
sources are expected to exceed uses reasonably comfortably in 2021
and 2022.

"We still view McLaren as dependent on upon favorable business,
financial, and economic conditions to meet its financial
commitments.The issuer's financial commitments appear to be
unsustainable in the long term if it proves unable to start
generating positive adjusted EBITDA and turn its free cash flow
generation around. However, we do not envisage a near-term credit
or payment crisis.

"The stable outlook reflects our view that McLaren's liquidity will
be significantly improved post refinancing, and we expect end
market demand to recover through 2021 and 2022, driving top-line
and EBITDA improvement." The sustainability of the capital
structure remains dependent on management meeting its base case and
market conditions remaining supportive.

Downside scenario

S&P said, "We could revise the outlook to negative or lower the
ratings if the group's ability to manufacture and sell its vehicles
was hindered such that EBITDA generation were significantly lower
than forecast, leading to deteriorating credit metrics. We could
also take a negative rating action if McLaren's cash burn were
higher than expected, leading to a strain on the liquidity position
or reducing covenant headroom, such that a specific default
scenario was viewed over the next 12 months."

Upside scenario

S&P said, "We could revise the outlook to positive or raise the
ratings on McLaren if the group illustrated the sustainability of
its capital structure driven by consistent and substantial EBITDA
growth, with S&P Global Ratings-adjusted EBITDA margins of at least
mid-single digits. We would also require the group's liquidity to
remain adequate, as well as FFO cash interest coverage rising to at
least 1.5x. Any upside would likely require supportive
macroeconomic conditions."


MCLAREN HOLDINGS: Fitch Assigns First-Time 'B-(EXP)' LT IDR
-----------------------------------------------------------
Fitch Ratings has assigned McLaren Holdings Limited (MHL) an
expected first-time Long-Term Issuer Default Rating (IDR) of
'B-(EXP)' and McLaren Finance plc's proposed GBP450 million senior
secured notes (SSN) an expected 'B(EXP)' rating with a Recovery
Rating of 'RR3'. The Outlook on the IDR is Stable.

The IDR of MHL reflects its wholly-owned subsidiary McLaren
Automotive's (McLaren) limited geographic and product
diversification, expected negative free cash flow (FCF) and high
leverage. Rating strengths are McLaren's technical knowledge and
leading positions as a global niche manufacturer of luxury super
cars and growth prospects following a sharp sales decline in 2020
due to the pandemic. It also reflects the group's stronger balance
sheet following measures taken to bolster its capital structure.

The expected ratings are contingent on MHL's successful SSN issue.
Failure to proceed with this issue as expected could result in a
lower final rating.

The SSN's expected rating of 'B(EXP)' reflects the notes' senior
ranking to obligations down-streamed by parent McLaren Group
Limited (MGL) from the issuance of preference shares and
convertible preference shares.

KEY RATING DRIVERS

Not a Typical Carmaker: The McLaren brand's fame and appeal spread
beyond car racing and extend McLaren's peer group to luxury
companies for which brand management, limited scale and
exclusivity, and strict pricing power are essential. Nonetheless,
McLaren remains a car manufacturer, subject to stringent sector
regulations, such as safety and fuel emissions, as well as high
investment requirements and fixed costs to amortise.

Niche Luxury Manufacturer: With only a limited product portfolio
and annual production capacity of about 5,000-6,000 units, McLaren
is small and not diversified. Despite the luxury segment's lower
volatility than mass-market cars', external shocks can
significantly affect sales. Wholesale volume fell by about a half
in 2020 as a result of the pandemic, to less than 2,000 units,
although retail volumes were less affected, because of destocking
at dealers. In addition, as its whole product portfolio is
developed on a common platform, a problem affecting one model could
affect the entire range.

Clear and Solid Positioning: McLaren has resilient pricing power at
the high-end of the market and a clear positioning in luxury super
cars with top-3 positions in the relevant sub-segments. The
internal development of platform and powertrains is a significant
drag on earnings and cash flows as they are not shared with, or
supplied by, a partner, but they provide McLaren with a distinctive
selling point, compared with other brands that are part of larger
automotive groups.

Limited Geographic Diversification: Sales are focused on Europe and
North America, with only a modest presence in China. Chinese
customers are less attracted to sport cars and prefer ultra-luxury
limousines and SUVs. Furthermore, McLaren has a significant
mismatch between sales and production, and material currency
exposure, given its production and R&D made exclusively in the UK,
but with about 70% of total revenue denominated in non-sterling
currencies.

Challenged by Shifting Industry Trends: While not directly and
immediately affected by all of the industry's structural trends,
including connectivity, autonomous driving and electrification,
McLaren is gradually transitioning toward electric powertrains. The
group has launched a hybrid model in 2021 with satisfactory initial
success, and is considering electric models in the next few years.
Its credit profile could be challenged by the electrification
trend, which could create opportunities for new entrants and prompt
increased investment for incumbent manufacturers, but the overall
impact on sales and earnings is yet unclear.

Racing's Needs Largely Covered: The racing division has been carved
out from MGL and is effectively ring-fenced from the automotive
group. Fitch believes that MGL will continue to support the racing
division in case of financial stress, potentially with cash flows
from MHL, which Fitch would treat as event risk. Immediate risks of
cash leakage are mitigated by a recent capital increase, which
Fitch expects should largely cover the racing business's financial
needs for the next two to three years in the absence of major
changes to the business plan.

Restructured Financial Profile: The overall McLaren group has taken
a series of measures to bolster its financial structure, including
MGL's issuance of GBP400 million of preference shares to new
investors and GBP150 million of convertible preference shares, of
which approximately GBP370 million will be down-streamed to MHL
through cash and equity following the repayment of a GBP150 million
loan. Other measures include the planned issue by MHL of GBP450
million-equivalent of new five-year senior secured notes to repay
its existing senior notes and loans; the sale & leaseback of
McLaren's headquarters for GBP170 million; and the ongoing sale of
McLaren Applied.

High Leverage to Decline: Fitch calculates funds from operations
(FFO) gross leverage (pro-forma for the above measures) of just
below 6x at end-2021, declining rapidly to 3x-4x through to
end-2023 and further to around 2x at end-2024. While not included
in Fitch's liquidity and leverage calculations, less than 50% of
the McLaren heritage car collection, valued at more than GBP200
million, will be allocated to the automotive group.

Improving Medium-term Profitability: Earnings took a major hit from
the pandemic with the automotive EBITDA margin falling to around
break-even in 2020, from about 20% in 2018-2019. Fitch expects the
operating margin to recover gradually in 2021-2023 with an
acceleration from 2024 due to stronger profitability of new
products, contained costs and the effect of lower depreciation &
amortisation. Fitch believes that new model launches and a
recovering environment will support prices while the increasing
share of Ultimate series sales and customisation options will
bolster profitability. In parallel, McLaren is increasing component
carry-over between models and streamlining its purchasing and
production process.

Negative FCF: FCF has been negative for several years and
deteriorated further during the pandemic because of falling
underlying earnings, leading to more than GBP400 million negative
FCF in 2020. Fitch expects FCF to remain negative between 2021 and
2023, before gradually recovering as FFO improves and investments
slow, due to a new architecture and model-range streamlining.

DERIVATION SUMMARY

McLaren is a niche manufacturer, much smaller than other carmakers
in Fitch's public portfolio rated in the 'BB' and above rating
categories. Its product range and overall diversification is weaker
than larger peers'. Its brand value is strong, supported by its
history and heritage, but not above that of leading and established
car groups with a long history such as Toyota Motor Corporation
(A+/Stable), Daimler AG (BBB+/Positive) and BMW AG.

MHL's financial profile is at the low end of Fitch's portfolio of
rated car manufacturers, with sustained FCF absorption and high
leverage. Higher-rated carmakers typically report net cash
positions through the cycle, contrary to MHL, which has high
leverage even after the recent refinancing and restructuring
measures.

KEY ASSUMPTIONS

-- Revenue growth of more than 20% in 2021 and 2022, declining to
    low single digits in 2023, before accelerating again towards
    double digits in 2024 in line with the product pipeline.

-- EBIT margin to improve gradually and become positive in 2024,
    at around 3.5%.

-- Annual working capital outflow on average at around GBP20
    million through to 2025.

-- Capex at 17%-20% of revenue to 2025.

-- No acquisitions and no dividend payment to 2025.

-- Revolving credit facility (RCF) undrawn to 2025.

RATING SENSITIVITIES

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

-- Positive EBIT margin;

-- Positive FCF on a sustained basis;

-- FFO gross leverage below 3.5x.

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

-- EBIT and FCF remaining negative by 2024;

-- FFO gross leverage above 5.5x;

-- Rapidly deteriorating liquidity;

-- Inability to respond to industry trends, notably the
    transition to electric powertrains.

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

Transaction Improving Liquidity: MHL reported GBP67 million of cash
and cash-equivalent at end-2020 and GBP60 million available under
its previous RCF.

Fitch expects the ongoing refinancing measures, including the
issuance of preference shares and convertible preference shares by
MGL, with proceeds down-streamed to MHL through the purchase of the
racing division stake (GBP150 million) and of a portion of heritage
cars (GBP85 million), and equity contribution; a sale and leaseback
transaction (GBP170 million); and new SSNs (GBP450 million) will
bolster MHL's liquidity. Fitch expects pro-forma liquidity to
increase to just below GBP200 million at end-2021.

A new super senior RCF of GBP110 million, including a GBP15 million
accordion option, will also be available. The accordion option
enables MHL to increase the RCF size without the need for consent,
and Fitch views it as available in Fitch's liquidity calculation.
Total available cash should cover Fitch's expectations of cash
absorption until 2023.

New Debt Structure: Post-financial restructuring Fitch expects debt
to include sterling- and US dollar-denominated notes for a total of
GBP450 million-equivalent, and an RCF of GBP110 million, which
includes GBP40 million as letters of credit. MHL has also a
trade-finance facility of USD220 million that provides support to
the group's independent retailers. This facility was GBP64
million-utilised at end-2020, and Fitch assumes a modest increase
in usage by around GBP50 million by end-2024.

ISSUER PROFILE

MHL is the intermediate holding of MGL. It owns 100% of McLaren
Automotive and 100% of McLaren Applied. McLaren Automotive is a
manufacturer of luxury, high-performance sport cars and supercars.

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.

S4 CAPITAL: Fitch Assigns First-Time 'BB' LT IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has assigned digital advertising (ad) and marketing
services group S4 Capital plc (S4C) a first-time Long-Term Issuer
Default Rating (IDR) of 'BB' with a Stable Outlook. It has assigned
an expected rating of 'BB+(EXP)'/RR2 to the group's proposed term
loan B.

S4C's rating incorporates the company's well-defined digital
strategy, which positions it as an industry disruptor with strong
like-for-like growth, a record of expanding client relationships
and a focus on the technology (tech) sector and other growth
advertising categories.

A strategy founded on both organic and inorganic growth has been
developed with financial discipline, including 50% equity funding
in acquisitions (which the company defines as mergers) and a target
leverage of no more than 1.5x-2.0x. The company shows solid cash
generation with excess cash flow likely to be re-invested in
further merger activity, in Fitch's view.

S4C has completed 23 merger deals since its inception in 2018; the
rating is slightly constrained by the management's ambition and
potential execution risk in future transactions. Public targets
include a desire to double its size organically by 2023. Metrics
are strong for the rating; rating upside is possible over the
medium term as the company delivers scale, provided this is done
with sound execution and financial discipline, although an upgrade
is unlikely before performance history is more established.

KEY RATING DRIVERS

Digital, Disruptive Business Model: S4C is a purely digitally based
advertising practice, which, in Fitch's view, has a very different
business model from the global agency holding companies (GHCs) who
dominate a traditional ad industry worth about USD650 billion in
2021 (source: Statistica). The GHCs also face secular shifts,
including the established threat from search engines, social media,
ad tech and other digital platforms, as well as competition from
the consultancies and nimbler competitors such as S4C.

Industry research suggests that where medium-term industry growth
should recover to mid-single digits following the pandemic, digital
advertising (ie online), which already accounts for about 60% of
the ad market, has been growing at above 20% and is expected to
remain in low-double digits. Fitch believes S4C has aligned itself
well both in terms of its digital-only strategy and the
high-profile accounts (particularly within the tech sector) it has
developed so far.

No Legacy Business to Defend: S4C is focused on multiple
disciplines across creative, web design & app development, media
buying, digital and data measurement (including strategic
consulting, in-housing). As such, it has been growing fast (2020
pro-forma growth of 24%, despite the pandemic), with the absence of
a traditional legacy business (eg TV, newspaper, outdoor) key to
its ability to target growth advertising needs. A unitary group
structure with one unified profit and loss, provides further
advantages relative to the holding company structure - also a
legacy for the GHCs.

Tech, High Growth Client Focus: S4C's clients are closely aligned
to the tech sector, in particular the so-called FAANG companies -
Facebook, Amazon, Apple, Netflix and Google (Alphabet); along with
other high-growth advertising sectors such as fast-moving consumer
goods. In 2020, 53% of S4C's sales came from tech accounts. FAANG
companies accounted for 36% and 74% of global and digital
advertising, respectively, in 2019. S4C's strategy (land and
expand) is to win an account and up- and cross-sell a suite of
services across its practice disciplines; a strategy that
underpinned an average revenue retention of 130% in 2020 from its
top 100 2019 clients.

Growth Ambitions: S4C's public targets include a three-year plan to
double organic revenue implying a scale approaching GBP900 million
by 2023; a target that will require accelerating growth driven by
new client wins and deeper client penetration. Fitch believes that
M&A activity will continue to feature meaningfully. Acquired
businesses are merged into the wider group; with 50% equity funding
structured to incentivise cross-selling of the integrated group
skill-sets.

This growth ambition, especially in mergers, leads to some
execution risk and the rating incorporates a degree of caution to
reflect the potential to misstep. Nonetheless, execution has so far
been good.

Evolving Industry Model: Fitch expects the evolving nature of the
ad industry to benefit S4C. Advertisers remain highly focused on
ROI, expecting cheaper content costs and shorter delivery times,
highly sophisticated data gathering and analytics, an ability to
manage content across multiple digital platforms as well as a shift
towards advertisers in-housing marketing capabilities.

Revenue Model: S4C's revenue model is largely fee-based and, in
many cases, project-based. However, challenges and competition
remain. Therefore, it is important that with each project the group
embeds itself further with the quality and efficiency of work
delivered. Multiple year revenues are not substantively contracted
in the way they are for professional publishers for instance.

However, relationships are well-established; 2020 client retention
was 89%, and the company shows a record of expanding per client
revenue. The loss of a scaled account (so-called 'whopper', eg
generating client revenue of at least USD20 million) would have a
meaningful top-line impact and potentially some ripple-across
effect given the optics of account losses in creative industries.
However, whopper accounts are typically spread across multiple
engagements eg Google) or are on a longer-term contract basis
(BMW/Mondelez).

Prudent Financial Policy: Fitch views S4C's financial policy to be
conservative, despite its growth ambition. Fitch believes the 50%
equity consideration embedded in mergers will limit the risk of
excessive deal-driven financial leverage as well as incentivise
founders to buy-in to the future success of the group. An adherence
to an enterprise value/EBITDA valuation range of 5x-10x in mergers
should protect against the risk of over-paying, while a maximum net
leverage policy not exceeding 1.5x-2x is prudent and, in Fitch's
view, important, given the company's growth ambition.

Key Person Risk: S4C was founded in 2018 by Sir Martin Sorrell,
formerly the founder and chief executive of WPP plc, one of the
largest marketing services and advertising companies in the world.
Fitch views Sir Martin's involvement as key to attracting other
founding investors, and as influential in making the company
attractive to merger targets and industry talents as well as
providing access to key client accounts. At YE20, Sir Martin owned
10% of the company as well as the only "B" share (providing veto
rights and the right to appoint either himself or another to the
board).

Fitch views Sir Martin as instrumental to the success of the
company as well as benefitting from a certain degree of control. He
has assembled a strong leadership team, a number of whom Fitch
views also as key personnel.

DERIVATION SUMMARY

S4C has few comparable rated peers, given that it is a newly
founded digitally based advertising and marketing agency. Fitch
does not believe it is relevant to benchmark S4C to the large GHCs,
given the maturity and scale of the latter's business model and the
fact that they face secular risks, including competition from
disruptive challengers such as S4C.

Fitch does see similarities with digital advertising platforms such
as Adevinta ASA (BB/Stable), Axel Springer (which underpins
Traviata B.V.'s 'B'/Stable) and Speedster Bidco GmbH (B/Negative).
Each of these peers have been affected by Covid-19-related business
disruptions and are arguably more cyclically exposed than S4C; they
are, nonetheless, expected to recover well and exhibit solid growth
driven by embedded contracts and, to some extent, natural price
inflation post-pandemic. They typically have higher margins and a
higher component of contracted revenue than S4C, leading to
relatively high rating thresholds: Adevinta has FFO net leverage
thresholds of 4x-5x, and Speedster has an FFO gross leverage band
of 6x-8x.

More broadly, GfK SE (BB-/Stable) is a leading market intelligence
group, which is advanced in its digital transformation, but which
has been through major restructuring. With revenue of EUR900
million and EBITDA of EUR153 million in 2020, it has greater scale
than S4C, comparable EBITDA margins, and weaker cash conversion.
Fitch considers there is some execution risk in GfK's rating given
it is yet to fully deliver the benefits of restructuring, and,
therefore, a degree of caution in FFO gross leverage thresholds of
4x-5x.

A more esoteric peer is Stan Holdings SAS (Voodoo; BB/Stable), the
largest publisher of mobile hyper-casual games. Voodoo's business
is very different from S4C's; games monetisation however is driven
by in-app advertising. Its rating is constrained by its small
absolute scale, high targeted growth, execution and some key person
risk. These factors lead to a FFO gross leverage band of 2x-3x,
with the similarities to S4C helping to explain the caution in the
latter's rating thresholds.

KEY ASSUMPTIONS

-- High double-digit revenue growth in 2021 driven by organic
    growth and acquisitions;

-- Stable Fitch-defined EBITDA margin of about 17.4%;

-- Change in working capital slowly declining to 1.5% of total
    revenue by FY24 from 3% in FY21;

-- Capex of about 2%;

-- No dividends; and

-- M&A - Fitch has assumed about GBP138 million of cumulative
    contingent payments over three years, related to past mergers.

The above reflects Fitch's base case and a continuation of growth
currently seen in the business; Fitch has also stressed the
forecast to reflect growth in the 10%-15% range in 2022-2023, which
continues to show the company performing within the rating leverage
thresholds.

RATING SENSITIVITIES

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

-- FFO gross leverage that is expected to remain consistently
    below 2.5x;

-- Free cash flow (FCF) margin that is expected to remain
    consistently above 9%; and

-- Operational performance consistent with the management's
    growth ambitions, including a continued record of execution
    and financial discipline in targeted merger activity. This
    will be measured, among other things, in terms of sustained
    performance in key profitability and cash flow margins;

-- An upgrade is unlikely before the company has a more
    established performance history, including visibility of 2022
    performance in line with the revenue expansion and client
    diversification anticipated in Fitch's forecasts.

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

-- FFO gross leverage that is expected to remain consistently
    above 3.5x;

-- FCF margin that is expected to remain consistently below 3%;
    and

-- Operational performance that materially underperforms
    management's ambitions in terms of organic growth and forecast
    margins. Performance that suggests a failure to integrate
    merger companies, as evidenced by a meaningful margin dilution
    and/or a tangible divergence from stated financial policies
    (ie valuation discipline and peak leverage), is a key
    downgrade parameter.

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

Strong Liquidity: S4C had about GBP132 million of unrestricted cash
on its balance sheet at end-2020. Following the refinancing
transaction, Fitch expects that the group will benefit from a
GBP100 million undrawn revolving credit facility, and that
refinancing risk will be limited as the new term loan B will mature
in seven years. S4C's liquidity profile is also supported by an
expected mid-to-high single-digit FCF margin over the rating
horizon.

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.

ISSUER PROFILE

Founded by Sir Martin Sorrell in 2018, S4C is a purely digital
global advertising and marketing services business. The company is
listed on the London Stock Exchange and was initially created
following a combination of MediaMonks (content practice) and
MightyHive (data and digital media practice).

Most of S4C's revenue is generated in the Americas, and more
specifically in North America at end-2020, even though it is a
global company.

S4 CAPITAL: S&P Assigns Preliminary 'BB-' ICR, Outlook Stable
-------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'BB-' long-term issuer
credit rating to S4 Capital PLC, and its preliminary 'BB-' issue
rating with a '3' recovery rating (rounded recovery estimate of
65%) to the proposed term loan and revolving credit facility
(RCF).

The stable outlook reflects S&P's expectation that S4 Capital will
continue to grow organically and through acquisitions while
maintaining S&P Global Ratings-adjusted debt to EBITDA at
3.0x-4.0x.

S&P said, "Our preliminary rating considers S4 Capital's limited
scale and track record in a fragmented and competitive market. S4
Capital PLC is a U.K.-based digital advertising and marketing
company that operates in the highly fragmented and competitive
advertising market. It competes with traditional advertising
holding companies (WPP, IPG, Publicis, and Omnicom) and larger
integrated consulting and technology companies such as Accenture,
Capgemini, and smaller players in the creative and tech space. S4
Capital was created in May 2018 by Sir Martin Sorrell, the founder
and former CEO of WPP, as a combination of content production
company MediaMonks and data and digital provider Mighty Hive. We
therefore consider there to be a limited track record of it
operating as an integrated company at this stage. S4 Capital has
since been growing at a rapid pace and maintained high organic
revenue growth rates and strong cash conversion during COVID-19.
This compared well with traditional advertising companies that
experienced revenue declines. However, it is still a small player
in a very fragmented and competitive industry, with S&P Global
Ratings-adjusted EBITDA that we forecast to increase to about
GBP100 million in 2021 (from GBP56 million in 2020).

"Favorable growth prospects in digital advertising and S4 Capital's
experienced management support its business profile. S4 Capital
operates in the digital advertising industry, which we expect will
remain the most rapidly growing area in advertising overall. The
pandemic further accelerated this growth. We forecast that in the
U.S. it will increase by 14% in 2021 and 12% in 2022. In our view,
S4 Capital is well positioned to capture this growth as it operates
an integrated business, with opportunities to cross-sell its
service offerings. In addition, it serves clients in growing
industries such as technology (which accounts for more than half of
its client portfolio). We view its simpler and more efficient
operating structure more favorably compared with that of
advertising holding companies that are less integrated. We also
think that Sir Martin Sorrell's vast experience in the industry and
relationships with clients will help S4 Capital to win and retain
business.

"We think that S4 Capital may find it difficult to maintain rapid
organic and inorganic growth over the long term. Owing to its
still-limited track record of operating as an integrated company
and small size and scale compared with more established
competitors, we believe S4 Capital might face challenges to win
larger new contracts that encompass a broader range of services
required by large corporations. It also remains to be seen whether
S4 Capital will be able to establish and maintain long-lasting
relationships with its key clients and grow the volume of business
that it does with them.

"We also factor in the risk of losing clients or contracts, which
is common in the advertising industry. Currently, the company's top
5 clients represent 36% of its revenue. As the company grows its
"Whopper" clients (those that generate more than $20 million of
revenue), we expect that concentration of revenue by client might
increase. These risks are partly mitigated by the fact that S4
Capital works on a variety of mandates with each client and is less
exposed to single large contracts. Its client base is also well
diversified across industries. Still, we view S4 Capital's earnings
as less stable and predictable compared with subscription-based
businesses in the media industry."

Lastly, it might become increasingly difficult for S4 Capital to
maintain its rapid growth through acquisitions, as it might face
challenges in finding attractive targets at appropriate valuations
and successfully integrating them.

S&P said, "We expect acquisition-related expenses will continue to
weigh on S4 Capital's profitability. As a digital advertising and
marketing company, S4 Capital is asset light and has low fixed
costs. About 70% of costs relate to personnel and could be adjusted
during periods of downturn. We also think S4 Capital has lower
administrative and operating costs compared with advertising
holding groups due to its simpler operating structure and
digital-only focus. As the group's business continues to grow, this
could translate into stronger profitability compared with peers in
the media industry. However, we expect that over the forecast
period its S&P Global Ratings-adjusted EBITDA margin will remain
broadly in line with peers at about 16%. This is because we assume
it will continue doing bolt-on acquisitions and include integration
and other acquisition-related expenses in our calculation of
adjusted EBITDA.

"We expect S4 Capital will maintain S&P Global Ratings-adjusted
leverage in the 3x-4x range. We understand the group's financial
policy assumes growth through acquisitions that it will fund with
debt and equity, while maintaining relatively modest financial debt
on balance sheet. S4 Capital is looking to raise a EUR375 million
term loan B and GBP100 multicurrency RCF. As a result, we expect in
2021 the group's net debt to EBITDA (by the company's definition)
will be about 0.2x, translating into S&P Global Ratings-adjusted
leverage of around 4x. In our calculation of adjusted debt, we do
not net off cash because we expect the company will use it to fund
new acquisitions. We also include contingent considerations for
past acquisitions and financial leases in adjusted debt. We expect
S4 Capital's adjusted leverage could reduce as it will grow revenue
and EBITDA and will continue generating positive free cash flow. We
understand S4 Capital's financial policy assumes that leverage
might temporarily increase to a maximum of 1.5x-2.0x net debt to
EBITDA to accommodate acquisitions, which would translate into S&P
Global Ratings-adjusted leverage of 4.5x-5x. However, we understand
such increase would be only temporarily, and leverage would
progressively reduce thereafter.

"We expect S4 Capital will generate positive and improving free
cash flow in 2021-2022. This will be on the back of increasing
EBITDA, modest working capital outflows, and moderate capex.
Compared with traditional advertising holding groups, we estimate
that S4 Capital has lower working capital needs and a smaller
intra-year working capital swing as it focuses on digital
advertising. We forecast that in 2021-2022 there will be modest
working capital outflows as the company grows its business and
assuming that some clients, for example BMW and Mondelez, might
have longer payment terms relative to technology companies. We
estimate reported FOCF (after lease payments) of around GBP40
million in 2021 (similar to 2020 levels), and GBP50 million-GBP60
million in 2022. In our base-case, we assume the company will fund
half of new acquisitions with cash on balance sheet and the rest
with equity. We do not expect S4 Capital to pay dividends over the
forecast period.

"We observe key man and governance risks. We believe that Sir
Martin Sorrell's experience of, and relationships in, the media
industry will help the group to win and retain new business. At the
same time, his departure from the company could pose risks to the
rapid growth trajectory."

Sir Martin Sorrell is the executive chairman and owns 10% of the
group's listed shares and a special class B share that provides him
with enhanced rights. In S&P's view, this gives him a significant
degree of control over decision-making in the company that is not
offset by an independent board. The B share gives him powers to:

-- Ensure no shareholder resolutions are proposed (save as
required by law) or passed without his consent;

-- No executives within the group are appointed or removed without
his consent;

-- Appoint one director or remove or replace such director from
time to time; and

-- Ensure no acquisition or disposal with market value greater
thank GBP100,000 occurs without his consent.

These powers are mitigated by the board of directors, which
includes 15 members, eight of which are independent non-executives,
and covers a breadth of experience. In addition, the company has an
incentive share scheme in place, allowing the holders of incentive
shares to earn up to 15% of the five-year growth in the company's
value, if certain hurdles are met. At the moment, the holders of
these shares are Sir Martin Sorrell and Scott Spirit, chief growth
officer. S&P understands that upon certain conditions being met,
these incentive shares could be exchanged for S4 Capital's common
stock.

S&P said, "The final ratings will depend on our receipt and
satisfactory review of all final documentation and final terms of
the transaction. The preliminary ratings should therefore not be
construed as evidence of final ratings. If S&P Global Ratings does
not receive final documentation within a reasonable time frame, or
if the final documentation and final terms of the transaction
depart from the materials and terms reviewed, we reserve the right
to withdraw or revise the ratings. Potential changes include, but
are not limited to, the finalization of the documentation, use of
the proceeds, maturity, size and conditions of the facilities,
financial and other covenants, security and ranking.

"The stable outlook reflects our expectation that S4 Capital will
continue to rapidly grow organically and through bolt-on
acquisitions over the next 12 months, and will successfully
integrate acquisitions such that it will maintain S&P Global
Ratings-adjusted EBITDA margin at around 16%. The outlook assumes
it will maintain debt to EBITDA at 3.0x-4.0x and FFO/Debt around
20%. We note that there is limited headroom under the stable
outlook."

S&P could lower the rating over the next 12 months if:

-- S4 Capital's financial policy becomes more aggressive than S&P
currently expects, with sizable debt-funded acquisitions or
shareholder remuneration leading to S&P Global Ratings-adjusted
leverage increasing to and remaining above 4x for a prolonged
period and FFO/Debt below 20%.

-- The company is unable to deliver revenue and EBITDA growth in
line with S&P's base case due to increased competition, loss of
contracts, or it faces challenges while integrating acquisitions,
which would translate into weaker credit metrics.

Although unlikely in the near term, S&P could raise the rating if:

-- S4 Capital gains scale, business diversity, and track record
within the digital advertising space, and wins additional large
contracts, whilst growing organically and smoothly integrating
acquisitions; and

-- S&P Global Ratings-adjusted debt to EBITDA declines sustainably
below 3x, FFO/Debt is above 30%, and the company generates
substantially positive FOCF.

An upgrade would also hinge on S&P's view of S4 Capital's financial
policy being supportive of the improved credit metrics, with
limited prospects of releveraging through debt-funded acquisitions
or material shareholder distributions.


[*] UK: Corp. Insolvencies in England, Wales Up 19% in June 2021
----------------------------------------------------------------
Harriet Habergham at Bloomberg News reports that June's increase in
corporate insolvencies in England and Wales was the third-highest
monthly figure since the pandemic started, according to insolvency
and restructuring trade body R3.

Corporate insolvencies rose 19% from a month earlier in June to
1,207, Bloomberg relays, citing data from The Insolvency Service.

According to Bloomberg, increase in corporate insolvencies been
driven by a rise in Creditor's Voluntary Liquidations.

R3 believe the increase may be due to the Government's decision to
delay lifting final Covid restrictions for another month, Bloomberg
notes.

"It may be that this impact has been reflected in the July 16
statistics as the rise in CVLs, used by directors to voluntarily
close a company, suggests that for many directors the delay to the
removal of the resurrections may have simply made it uneconomic to
continue trading," Bloomberg quotes Christina Fitzgerald, vice
president of R3, as saying.


                           *********


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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