/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/210804.mbx 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, August 4, 2021, Vol. 22, No. 149 Headlines E S T O N I A TALLINNA MOEKOMBINAAT: Property, Mall Auction Starts on Aug. 30 I R E L A N D ADAGIO CLO VIII: Fitch Affirms 'B-' F Notes Rating, Outlook Stable HENLEY CLO V: Fitch Assigns 'B-(EXP)' Expected Rating on F Tranche MALLINCKRODT: Shareholders Urged to Vote Against Some Directors PALMER SQUARE 2021-1: Fitch to Rate Class F Tranche 'B+(EXP)' I T A L Y GRANDI LAVORI: Sept. 10 Bid Submission Deadline Set for GLF Stake K A Z A K H S T A N FREEDOM FINANCE: S&P Assigns 'B' Long-Term ICR, Outlook Stable S P A I N AYT COLATERALES I: Moody's Affirms Ba2 Rating on EUR8.2MM C Notes IM SABADELL 11: Moody's Ups EUR332.5M Class B Notes Rating to Ba2 S W I T Z E R L A N D BREITLING HOLDING: S&P Upgrades ICR to 'B', Outlook Stable U K R A I N E PRAVEX-BANK JSC: Fitch Affirms Then Withdraws 'B/B+' IDRs U N I T E D K I N G D O M ELECORE ELECTRICAL: Goes Into Liquidation, 28 Jobs Affected FOOTBALL INDEX: GC Chief Clarifies Role in Administration JAIN IRRIGATION: Dutch Unit's English Scheme Gets Court Approval NEW LOOK: First Quarter Revenues More Than Doubled Following CVA SGS FINANCE: S&P Lowers ICR to 'D(sf)' on Missed Interest Payment X X X X X X X X HESS MIDSTREAM: S&P Rates New $750MM Sr. Unsecured Issuance 'BB+' - - - - - ============= E S T O N I A ============= TALLINNA MOEKOMBINAAT: Property, Mall Auction Starts on Aug. 30 --------------------------------------------------------------- ERR News reports that trustees in bankruptcy Kristo Teder and Indrek Lepsoo are selling the property belonging to bankrupt AS Tallinna Moekombinaat together with the T1 Mall of Tallinn shopping center on Peterburi tee 2. According to ERR News, the starting price for the auction of the property and the mall is EUR85 million. The company will be sold together with the things, rights and obligations belonging to the company as well as related to and serving its management, including contracts related to the company, ERR News relays, citing the auction notice. The company to be sold does not include the debtor's trademarks and other movable property encumbered with a commercial pledge, ERR News notes. Registration for the auction began on June 28 and ends at noon on Aug. 27, ERR News discloses. The auction starts on Aug. 30 and ends on Sept. 20, ERR News states. The increment of the bids to be made at the auction is EUR500,000, according to ERR News. A deposit of EUR500,000 is also required to register for the auction, ERR News relates. The Tallinn-based Harju County Court in early June declared the bankruptcy of AS Tallinna Moekombinaat, a subsidiary of listed Estonian real estate developer Pro Kapital Grupp, and appointed Kristo Teder and Indrek Lepsoo as bankruptcy trustees, ERR News recounts. Claims by 20 creditors in the total sum of over EUR119.5 million have been lodged against AS Tallinna Moekombinaat for the first creditors' meeting held on June 17, according to ERR News. ============= I R E L A N D ============= ADAGIO CLO VIII: Fitch Affirms 'B-' F Notes Rating, Outlook Stable ------------------------------------------------------------------ Fitch Ratings has revised Adagio CLO VIII DAC's junior notes' Outlook to Stable from Negative. All ratings have been affirmed. DEBT RATING PRIOR ---- ------ ----- Adagio CLO VIII DAC A XS2054619734 LT AAAsf Affirmed AAAsf B-1 XS2054620310 LT AAsf Affirmed AAsf B-2 XS2054621045 LT AAsf Affirmed AAsf C XS2054621474 LT Asf Affirmed Asf D XS2054621987 LT BBB-sf Affirmed BBB-sf E XS2054622522 LT BB-sf Affirmed BB-sf F XS2054622951 LT B-sf Affirmed B-sf TRANSACTION SUMMARY Adagio CLO VIII DAC is a cash flow CLOs mostly comprising senior secured obligations. The transaction is still within its reinvestment period and is actively managed by AXA Investment Managers, Inc. KEY RATING DRIVERS Outlooks Revised to Stable: Fitch has revised the Outlooks on the class E and F notes to Stable from Negative following the removal of the coronavirus baseline stress from its analysis. The Stable Outlook reflects for the class E notes a limited default shortfall, and for the class F notes a limited margin of safety to default given their current credit enhancement of 6.1%. The class F notes do not present a "real possibility of default", which is the definition of 'CCC' in Fitch's Rating Definitions. Broadly Stable Asset Performance: The transaction's metrics are broadly similar to those at the last review as of 30 April 2021. The transaction is passing all portfolio-profile, collateral-quality and coverage tests. The transaction was below par by 38bp as of the investor report on 2 July 2021, which is slightly better than the last review when it was 46bp below par. Exposure to assets with a Fitch-derived rating (FDR) of 'CCC+' and below was 3.55%. The transaction had no defaulted assets as per the investor report. 'B'/'B-' Portfolio: Fitch assesses the average credit quality of the obligors in the 'B'/'B-' category. The weighted average rating factor (WARF) calculated by the trustee was 33.08, below the maximum covenant of 33.5. High Recovery Expectations: Senior secured obligations comprise 96.7% of the portfolio. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. Diversified Portfolio: The portfolio is well-diversified across obligors, countries and industries. The top- 10 obligor concentration is 15.04%, and no obligor represents more than 2.01% of the portfolio balance. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- At closing, Fitch used a standardised stressed portfolio (Fitch stressed portfolio) that is customised to the portfolio limits as specified in the transaction documents. Even if the actual portfolio shows lower defaults and smaller losses (at all rating levels) than Fitch's stressed portfolio assumed at closing, an upgrade of the notes during the reinvestment period is unlikely, given the portfolio credit quality may still deteriorate, not only by natural credit migration, but also by reinvestments and also because the manager has the possibility to update the Fitch collateral quality tests. -- After the end of the reinvestment period, upgrades may occur on better-than-initially expected portfolio credit quality and deal performance, leading to higher credit enhancement and excess spread available to cover for losses in the remaining portfolio. Factor that could, individually or collectively, lead to negative rating action/downgrade: -- Downgrades may occur if the build-up of credit enhancement following amortisation does not compensate for a larger loss expectation than initially assumed due to unexpectedly high levels of defaults and portfolio deterioration. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. The majority of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and/or other nationally recognised statistical rating organisations and/or European securities and markets authority-registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk-presenting entities. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. HENLEY CLO V: Fitch Assigns 'B-(EXP)' Expected Rating on F Tranche ------------------------------------------------------------------ Fitch Ratings has assigned Henley CLO V DAC expected ratings. The assignment of final ratings is contingent on the final documents conforming to information already received. DEBT RATING ---- ------ Henley CLO V DAC A LT AAA(EXP)sf Expected Rating B-1 LT AA(EXP)sf Expected Rating B-2 LT AA(EXP)sf Expected Rating C LT A(EXP)sf Expected Rating D LT BBB-(EXP)sf Expected Rating E LT BB-(EXP)sf Expected Rating F LT B-(EXP)sf Expected Rating Subordinated Notes LT NR(EXP)sf Expected Rating TRANSACTION SUMMARY Henley CLO V DAC is a securitisation of mainly senior secured obligations (at least 90%) with a component of senior unsecured, mezzanine, second-lien loans, first-lien, last-out loans and high-yield bonds. Net proceeds from the issuance of the notes will be used to fund a portfolio with a target par of EUR400 million. The portfolio is actively managed by Napier Park Global Capital Ltd. The transaction has a 4.6-year reinvestment period and an 8.5-year weighted average life (WAL). KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors to be in the 'B'/'B-' category. The Fitch weighted average rating factor (WARF) of the identified portfolio is 34.93, below the maximum WARF covenant for assigning expected ratings of 36.00. High Recovery Expectations (Positive): At least 90% of the portfolio will comprise senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch weighted average recovery rate (WARR) of the identified portfolio is 61.97%, above the maximum WARR covenant for assigning expected ratings of 61.30%. Diversified Portfolio (Positive): The indicative maximum exposure of the 10 largest obligors for assigning the expected ratings is 18% of the portfolio balance and maximum fixed rated obligations are limited at 15% of the portfolio. The transaction also includes various concentration limits, including the maximum exposure to the three largest (Fitch-defined) industries in the portfolio at 40%. These covenants ensure that the asset portfolio will not be exposed to excessive concentration. Portfolio Management (Positive): The transaction has a 4.6-year reinvestment period and includes reinvestment criteria similar to those of other European transactions. Fitch's analysis is based on a stressed-case portfolio with the aim of testing the robustness of the transaction structure against its covenants and portfolio guidelines. Deviation from Model-Implied Rating (Negative): The model-implied ratings (MIR) for the class C, D, E and F notes are one notch below the assigned ratings. The notes show a maximum breakeven default rate shortfall ranging from -0.4% to -2.8% at the assigned ratings. The ratings are supported by the significant default cushion on the identified portfolio at the assigned ratings due to the notable cushion between the transaction's covenants and the portfolio's parameters. All notes pass the assigned ratings based on the identified portfolio. Moreover, the class F notes' deviation from the MIR reflects Fitch's view that the tranche has a significant margin of safety given the credit enhancement level at closing. The notes do not present a "real possibility of default", which is the definition of 'CCC' in Fitch's Rating Definitions. RATING SENSITIVITIES This section provides insight into the model-implied sensitivities the transaction faces when one assumption is modified, while holding others equal. The modelling process uses the modification of these variables to reflect asset performance in upside- and downside environments. The results below should only be considered as one potential outcome, as the transaction is exposed to multiple dynamic risk factors. It should not be used as an indicator of possible future performance. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- A reduction of the default rate (RDR) at all rating levels by 25% of the mean RDR and an increase in the recovery rate (RRR) by 25% at all rating levels would result in an upgrade of up to five notches depending on the notes, except for the class A notes, which are already at the highest rating on Fitch's scale and cannot be upgraded. -- At closing, Fitch used a standardised stressed portfolio (Fitch's stressed portfolio) that is customised to the portfolio limits as specified in the transaction documents. Even if the actual portfolio shows lower defaults and smaller losses (at all rating levels) than the Fitch's stressed portfolio assumed at closing, an upgrade of the notes during the reinvestment period is unlikely, given the portfolio credit quality may still deteriorate, not only by natural credit migration, but also by reinvestments, and also because the manager has the possibility to update the Fitch collateral quality tests. -- After the end of the reinvestment period, upgrades may occur on better-than-initially expected portfolio credit quality and deal performance, leading to higher credit enhancement and excess spread available to cover for losses in the remaining portfolio. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- An increase of the RDR at all rating levels by 25% of the mean RDR and a decrease of the RRR by 25% at all rating levels will result in downgrades of no more than five notches, depending on the notes. -- Downgrades may occur if the build-up of credit enhancement following amortisation does not compensate for a larger loss expectation than initially assumed due to unexpectedly high levels of defaults and portfolio deterioration. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY The majority of the underlying assets or risk presenting entities have ratings or credit opinions from Fitch and/or other Nationally Recognized Statistical Rating Organizations and/or European Securities and Markets Authority registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk presenting entities. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. MALLINCKRODT: Shareholders Urged to Vote Against Some Directors --------------------------------------------------------------- Joe Brennan at The Irish Times reports that shareholders in Mallinckrodt, the Dublin-based but US-run drugmaker in the middle of a bankruptcy reorganization, are being urged by a leading corporate advisory firm to vote against some directors as a parting rebuke over its handling of the US opioid crisis and executive pay. Mallinckrodt filed for bankruptcy in Delaware last October as the company was overwhelmed by lawsuits accusing it of deceptively marketing opioids, The Irish Times recounts. According to The Irish Times, the company is pursuing a US court-supervised Chapter 11 reorganization that would set up a US$1.6 billion trust to resolve opioid-related claims with states, local governments and private individuals. The plan, supported by certain creditors and subject to broader votes by early September, would see unsecured bondholders take control of the company, some US$1.3 billion of debt being eliminated and general unsecured creditors split US$150 million in cash, The Irish Times discloses. Existing shareholders are set to be wiped out by the debt restructuring, The Irish Times states. Glass Lewis, an influential shareholder advisory firm on corporate governance, said it recognizes Mallinckrodt's actions in recent years to respond to the opioid epidemic, with its website providing information about its role in addressing opioid abuse and misuse, The Irish Times relates. "However, question whether the board has properly exercised its regulatory oversight role in the years preceding the US government's crackdown vis-a-vis the deceptive marketing schemes of opiate manufactures," The Irish Times quotes Glass Lewis as saying. "This concern is amplified by the relatively limited refreshment that the board has effected since such issues became a matter of global interest in 2017." As such, Glass Lewis is calling on investors to vote against the re-election of board members Martin Carroll and Kneeland Youngblood at the group's annual general meeting in Dublin next month. Both have been members of Mallinckrodt committees covering governance and compliance since the company floated in New York in 2013, The Irish Times notes. Almost 500,000 people died from overdoses involving opioids, including prescription and illicit drugs, in the US in the 20 years to 2019, The Irish Times relays, citing figures from the US Centres for Disease Control and Prevention. "The company's legal issues, bankruptcy and loss of exchange-trading status have had a significant negative impact on shareholder value and the company's reputation," Glass Lewis, as cited by The Irish Times, said. "While it is likely that the board will be reconstituted upon the company's emergence from bankruptcy, we believe that there is sufficient grounds for shareholders to signal their discontent this year by voting against the aforementioned directors at the annual meeting." Glass Lewis has also urged shareholders to vote against the re-election of directors David Carlucci, Mr. Carroll, David Norton and Anne Whitaker, all members of Mallinckrodt's human resources and compensation committee, over concerns around executive pay practices, The Irish Times discloses. PALMER SQUARE 2021-1: Fitch to Rate Class F Tranche 'B+(EXP)' ------------------------------------------------------------- Fitch has assigned expected ratings to Palmer Square European Loan Funding 2021-1 DAC. The assignment of final ratings is contingent on the receipt of final documents conforming to information already reviewed. DEBT RATING ---- ------ Palmer Square European Loan Funding 2021-1 DAC Class A LT AAA(EXP)sf Expected Rating Class B LT AA+(EXP)sf Expected Rating Class C LT A+(EXP)sf Expected Rating Class D LT BBB-(EXP)sf Expected Rating Class E LT BB+(EXP)sf Expected Rating Class F LT B+(EXP)sf Expected Rating Sub Notes LT NR(EXP)sf Expected Rating TRANSACTION SUMMARY Palmer Square European Loan Funding 2021-1 DAC is an arbitrage cash flow collateralised loan obligation that will be serviced by Palmer Square Europe Capital Management LLC. The transaction will be Palmer Square's third European CLO. Net proceeds from the notes issue will be used to purchase a static pool of primarily secured senior loans and bonds, totalling about EUR450 million. KEY RATING DRIVERS 'B' Portfolio Credit Quality (Neutral): Fitch places the average credit quality of obligors in the 'B' category. The Fitch weighted average rating factor (WARF) of the target portfolio is 31.8. High Recovery Expectations (Positive): Senior secured obligations make up 100% of the portfolio. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch weighted average recovery rate (WARR) of the target portfolio is 66%. Diversified Portfolio Composition (Positive): The three-largest industries comprise 37.4% of the portfolio balance, the top 10 obligors 9.2% and no single obligor is at more than 1%. Portfolio Management (Positive): The transaction does not have a reinvestment period and discretionary sales are not permitted. Fitch's analysis is based on the target portfolio. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- A 25% reduction of the mean default rate (RDR) across all ratings and a 25% increase in the recovery rate (RRR) across all ratings would lead to an upgrade of up to four notches for the rated notes, except for the class A notes where the rating is already at the highest rating scale at 'AAA' and cannot be upgraded further. -- Upgrades could occur in case of a continuing better-than initially expected portfolio credit quality and deal performance, and continued amortisation that leads to higher credit enhancement (CE) for the notes and excess spread available to cover for losses in the remaining portfolio. Upgrades to sub-investment grade tranches could be more limited and may occur after a significant amortisation of the senior tranches and sustained stable portfolio performance. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A 25% increase of the mean RDR across all ratings and a 25% decrease of the RRR across all ratings would lead to a downgrade of up to six notches for the rated notes. -- Downgrades may occur if the build-up of the notes' CE following amortisation does not compensate for a larger loss than initially assumed due to unexpectedly high levels of defaults and portfolio deterioration. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY The majority of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and/or other nationally recognised statistical rating organisations and/or European securities and markets authority-registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk-presenting entities. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. ========= I T A L Y ========= GRANDI LAVORI: Sept. 10 Bid Submission Deadline Set for GLF Stake ----------------------------------------------------------------- The judicial liquidator of Grandi Lavori Fincosit S.p.A. for the agreement with creditors no. 48/2018, Prof. Riccardo Tiscini, transfers the 100% stake held in GLF Construction Corporation. The transfer of the stake will be carried by means of a competitive procedure by inviting bids at the base price of EUR14,960,000. The sale will be concluded through the awarding of the contract to the highest bidder. The balance of the price will be due at the signing of the deed. The deed of sale will be formalized through a notary indicated by the judicial liquidator. The deadline for the submission of bids will be September 10, 2021, at 1:00 p.m. Bids must be sent in a sealed envelope to the Judicial Liquidator Prof. Riccardo Tiscini, with offices in Rome (Italy), at Via Giovanni Paisiello, 24, postcode 00198, and must be guaranteed by non-transferable bank drafts made payable to "Concordato Preventivo Grandi Lavori Fincosit 48/2018" for an amount corresponding to 10% of the price offered. The opening of the envelopes is scheduled for September 10, 2021, at 3:00 p.m. at the offices of the Judicial Liquidator in the presence of the bidders. Should several bids be submitted for the lot in question, the Judicial Liquidator shall ask all the bidders to bid against the highest bid received, with this second competitive procedure to be held at a later date that will be revealed by the Judicial Liquidator. The call for the bids may be viewed on the website https://pvp.giustizia.it/pvp/ Data concerning GLF Construction Corporation, along with the associated documents and conditions of the offer may be consulted, subject to the expression of an interest and in so doing and the signature of a suitable confidentiality agreement, by accessing the electronic data room established for the purpose. To do so, applicants should contact the Judicial Liquidator: Prof. Riccardo Tiscini, Via Giovanni Paisiello, 24, Roma, Tel 06 8084557, certified e-mail lgcp48.2018roma@pecconcordati.it =================== K A Z A K H S T A N =================== FREEDOM FINANCE: S&P Assigns 'B' Long-Term ICR, Outlook Stable -------------------------------------------------------------- S&P Global Ratings assigned its 'B' long-term issuer credit ratings to Freedom Finance Europe Ltd. and Freedom Finance Global Plc. The outlooks on both entities are stable. At the same time, S&P assigned its 'B' short-term issuer credit ratings to both entities. S&P considers Freedom Finance Europe and Freedom Finance Global to be integral to the strategy of Freedom Holding Corp. As such, S&P expects the group will support them in any foreseeable circumstances. Both entities are deeply integrated in operational processes within the group. Freedom Finance Global will gradually become the group's main retail brokerage subsidiary in Kazakhstan. Given the regulatory restrictions for trading foreign financial instruments from domestic accounts, the group expects that Freedom Finance Global, licensed in AIFC, will gradually onboard Kazakhstani clientele currently serviced through a Belizean company, FFIN Brokerage Services, and possibly even some of its non-Kazakhs clients. S&P also expects that it could absorb some of the existing retail business of Freedom Finance JSC, its Kazakh-licensed affiliate. S&P said, "We believe Freedom Finance Europe is likely to remain a crucial part of the group in the long run. Freedom Finance Europe heads the subgroup that serves the group's emerging business in the EU, the U.K., and some CIS countries such as Ukraine. It also acts as the primary counterparty for Belize-based affiliate FFIN Brokerage Services. As result, it is one of the group's main profit centers, making up about 65% of group revenue. We believe Freedom Finance Europe is likely to remain a crucial to group, despite the ongoing transfer of clients from Belize to other jurisdictions (predominantly Freedom Finance Global) and a resulting decline in profits booked to this entity. "The stable outlooks on both subsidiaries reflect that our expectation that their ratings will move in line with our view of the creditworthiness of the broader Freedom group. Notably, we expect that over the next 12-18 months the group will retain its strong earnings capacity and at least moderate capitalization, while continuing to onboard clients from onshore jurisdictions. "We may lower the ratings if we believe the group might not maintain at least moderate capitalization. This may be due to further acquisitions, the build-up of sizeable proprietary positions in bonds or equities, or faster-than-expected expansion of clients' operations on the group's balance sheet. A negative rating action may also follow if the process of transferring customers to domestic jurisdictions stops or reverses, or if we see rising compliance risks from related-party transactions. "We could also lower the ratings on either of the subsidiaries if we see them as becoming materially less important to group strategy, or if we were less confident that they would receive group support. "A positive rating action would arise only from us taking a more positive view of the group's creditworthiness, and it is unlikely in the near term. Over time, tighter regulation of brokerage activities in Russia, the complete transfer of clients under the umbrella of Freedom Holding Corp., and at least adequate capitalization would be prerequisites for an upgrade. The group's performance and financial standing would also need to be assessed relative to peers'." ========= S P A I N ========= AYT COLATERALES I: Moody's Affirms Ba2 Rating on EUR8.2MM C Notes ----------------------------------------------------------------- Moody's Investors Service has upgraded and affirmed the ratings of Notes in AyT Colaterales Global Hipotecario Vital I, FTA and TDA TARRAGONA 1, FTA, RMBS transactions. The upgrades reflect the better than expected collateral performances and increased levels of credit enhancement for the affected Notes. Issuer: AyT Colaterales Global Hipotecario Vital I, FTA EUR175.3M Class A Notes, Affirmed Aa1 (sf); previously on Jun 29, 2018 Affirmed Aa1 (sf) EUR12.6M Class B Notes, Upgraded to Aa3 (sf); previously on Jun 29, 2018 Upgraded to A2 (sf) EUR8.2M Class C Notes, Affirmed Ba2 (sf); previously on Jun 29, 2018 Upgraded to Ba2 (sf) Issuer: TDA TARRAGONA 1, FTA EUR359.7M Class A Notes, Affirmed Aa1 (sf); previously on Jun 29, 2018 Affirmed Aa1 (sf) EUR11.1M Class B Notes, Upgraded to Aa1 (sf); previously on Jun 29, 2018 Upgraded to Aa2 (sf) EUR11.9M Class C Notes, Upgraded to A2 (sf); previously on Jun 29, 2018 Confirmed at Baa1 (sf) The maximum achievable rating is Aa1 (sf) for structured finance transactions in Spain, driven by the corresponding local currency country ceiling of the country. RATINGS RATIONALE The upgrades of the ratings of the Notes are prompted by the better than expected collateral performances and increase in credit enhancements for the affected tranches. For instance, cumulative defaults have remained largely unchanged in the past year, below are the exact figures for each transaction: (i) AyT Colaterales Global Hipotecario Vital I, FTA, to 2.93% from 2.86%. (ii) TDA TARRAGONA 1, FTA, to 14.08% from 14.04%. Moody's affirmed the ratings of the classes of Notes that had sufficient credit enhancements to maintain their current ratings. Key Collateral Assumption Revised As part of the rating actions, Moody's reassessed its lifetime loss expectations and recovery rates for the portfolios reflecting their collateral performances to date. Moody's revised its expected loss assumptions as follows: (i) AyT Colaterales Global Hipotecario Vital I, FTA, to 2.78% from 3.19%. (ii) TDA TARRAGONA 1, FTA, to 8.63% from 9.00%. All as a percentage of the original pool balance for each transaction. Moody's has also assessed loan-by-loan information as a part of its detailed transaction review to determine the credit support consistent with target ratings levels and the volatility of future losses. As a result, Moody's has revised the MILAN CE assumptions of each transaction as follows: (i) AyT Colaterales Global Hipotecario Vital I, FTA, to 10.0% from 11.50%. (ii) TDA TARRAGONA 1, FTA, remains 13.0% unchanged. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was "Moody's Approach to Rating RMBS Using the MILAN Framework" published in December 2020. The analysis undertaken by Moody's at the initial assignment of ratings for RMBS securities may focus on aspects that become less relevant or typically remain unchanged during the surveillance stage. Factors that would lead to an upgrade or downgrade of the ratings: Factors or circumstances that could lead to an upgrade of the ratings include: (i) performance of the underlying collateral that is better than Moody's expected; (ii) an increase in the Notes' available credit enhancement; (iii) improvements in the credit quality of the transaction counterparties; and (iv) a decrease in sovereign risk. Factors or circumstances that could lead to a downgrade of the ratings include: (i) an increase in sovereign risk; (ii) performance of the underlying collateral that is worse than Moody's expected; (iii) deterioration in the Notes' available credit enhancement; and (iv) deterioration in the credit quality of the transaction counterparties. IM SABADELL 11: Moody's Ups EUR332.5M Class B Notes Rating to Ba2 ----------------------------------------------------------------- Moody's Investors Service has upgraded the rating of one note in IM SABADELL PYME 11, FONDO DE TITULIZACION. The rating action reflects the increased level of credit enhancement for the affected Notes. EUR332.5M Class B Notes, Upgraded to Ba2 (sf); previously on Jan 20, 2020 Upgraded to B2 (sf) Moody's has also affirmed the rating of Class A Notes in IM SABADELL PYME 11, FONDO DE TITULIZACION as it has sufficient credit enhancement to maintain the current rating: EUR1567.5M (current outstanding amount EUR 93.7M) Class A Notes, Affirmed Aa3 (sf); previously on Jan 20, 2020 Affirmed Aa3 (sf) IM SABADELL PYME 11, FONDO DE TITULIZACION is an ABS backed by small to medium sized enterprises ("ABS SME") loans located in Spain. The deal was originated by Banco Sabadell, S.A. (Baa2/P-2). RATINGS RATIONALE The rating action is prompted by an increase in credit enhancement for the affected tranche. Revision of Key Collateral Assumptions As part of the rating action, Moody's reassessed its default probability and recovery rate assumptions for the portfolio reflecting the collateral performance to date. The performance of the transaction has continued to be stable since January 2020. Total delinquencies have decreased in the past year, with 90 days plus arrears currently standing at 0.42% of current pool balance. Cumulative defaults currently stand at 3.72% of original pool balance up from 2.79% a year earlier. Moody's increased the default probability assumption to 18.5% from 16.5% to reflect the portfolio composition based on updated loan by loan information taking into consideration the current industry concentration among other credit risk factors. For IM SABADELL PYME 11, FONDO DE TITULIZACION the current default probability is 18.5% of the current portfolio balance and the assumption for the fixed recovery rate is 35%. Moody's has decreased the CoV to 22.5% from 25.2%, which, combined with the revised key collateral assumptions, corresponds to a portfolio credit enhancement of 22.3%. Increase in Available Credit Enhancement Sequential amortization led to the increase in the credit enhancement available in this transaction. For instance, Class B Notes credit enhancement has increased to 21.9% from 11.3% since the last rating action in January 2020. Counterparty Exposure The rating actions took into consideration the notes' exposure to relevant counterparties, such as servicer or account bank. Principal Methodology The principal methodology used in these ratings was "Moody's Global Approach to Rating SME Balance Sheet Securitizations" published in July 2021. 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 and (4) a decrease in sovereign risk. 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. ===================== S W I T Z E R L A N D ===================== BREITLING HOLDING: S&P Upgrades ICR to 'B', Outlook Stable ---------------------------------------------------------- S&P Global Ratings raised its long-term issuer credit rating on Switzerland-based luxury watches manufacturer Breitling Holding S.a.r.l. and its issue rating on the company's Swiss franc (CHF) 567 million term loan B (TLB) due 2024 to 'B' from 'B-'. The stable outlook reflects S&P's view that the group will generate positive annual free operating cash flow (FOCF) exceeding CHF30 million and S&P Global Ratings-adjusted debt to EBITDA at about 5.0x in FY2022. S&P said, "We believe Breitling's performance should support a sustained deleveraging trajectory toward 5.0x by the end of FY2022, which is in line with the 'B' rating.Breitling reported a relatively resilient operating performance in FY2021 as sales stood at CHF 485 million, a 12.5% sales decline year on year, while S&P Global Ratings-adjusted EBITDA margin contracted only 120 basis points to 22.7% from 23.9% in FY2020 excluding the impact of fees for early termination of distribution agreements with acquired agents. Therefore, S&P Global Ratings-adjusted debt to EBITDA stood at 7.0x at year-end 2021, which is stronger than our previous forecasts of 9x-10x. We also observed a fast recovery of operating performance since the beginning of Breitling's FY2022, driven by the rebound of consumers' demand for luxury watches in the company's core countries. We estimate Breitling is well positioned to further reduce its leverage and we project S&P Global Ratings-adjusted debt to EBITDA will likely approach 5.0x at the end of FY2022. Our adjusted debt calculation includes the CHF567 million TLB, CHF18 million in mortgage debt, lease liabilities of CHF130 million-CHF140 million, CHF15 million-CHF20 million in pension liabilities, and a roughly CHF37 million redemption liability to purchase the minority stakes in subsidiaries Breitling Japan Ltd. and Breitling Korea Inc. "We expect a solid rebound of the global luxury watch industry in 2021.Demand and growth in the global luxury watch market slowed in 2020 because of restrictions imposed worldwide to counter the COVID-19 pandemic. In 2020, the volume of Swiss watch exports declined 33.3% compared with 2019 according to the Federation of the Swiss Watch Industry. The luxury segment (products priced CHF3,000 or higher), Breitling's core business, was relatively more resilient, reporting a 19.6% contraction by volumes. In the six months to June 2021, Swiss watch exports improved to pre-COVID-19 levels, supported by higher local demand in China (up 62% versus first-half 2019) due to travel restrictions and very solid demand in the U.S. (up 22.5%). According to Euromonitor, the luxury timepieces market is expected to grow by about 10% a year on average over 2021-2025 by retail value, above the 6% average by retail volume. We believe this will be driven by growing consumer preferences for high quality and premium watches." Breitling's consumer base expansion underpinned resilience amid COVID-19 and should sustain growth in FY2022. S&P observed a material sales contraction in its first-quarter 2021 (April-June 2020) of about 55%. However, the company has posted sequential improvements of its top line since July 2020. The sales of Breitling's watches (sell-out) remained very solid throughout first-quarter 2022 (April-June 2021) in Europe, the Middle East, and Africa; the U.S.; and China, resulting into net sales growth of 8% in first-quarter 2022 compared with prepandemic levels (first-quarter 2020). This has followed Breitling's consumer base expansion, supported by new products mainly in women's products (Navitimer 35 and Chronomat 32 and 36) and the super luxury segment (the CHF9,000-CHF30,000 price range). S&P said, "We anticipate Breitling's sales to increase 25%-30% in FY2022 compared with a year earlier, supported by acceleration in the DtC channel. The pandemic has accelerated the global luxury market's shift to e-commerce. The company expanded its online presence through digital advertising campaigns supporting product launches and expanding its owned e-commerce platforms, which generated roughly 5% of total sales in FY2021 (compared with 1% in FY2020). At the same time, Breitling continued its selective openings of owned boutiques in core countries, which we expect will support the company's ambition to generate 50% of sales in the DtC channel by FY2024 (compared with 27% at FY-end 2021, including e-commerce, owned boutiques, and outlets). In our view, Breitling will report sales in the range of CHF610 million-CHF630 million in FY2022, a 25%-30% increase versus the previous year (and 10%-15% growth versus FY2020). Our assumptions include a marked boutique expansion in key countries like the U.S., the U.K., Germany, France, Italy, and China. Breitling has a relatively low presence in China (7% of sales at end-2021), which will support very solid growth in FY2022. The company has a relatively limited exposure to tourism flows of 20%-25%, which will continue to weigh on performance in FY2022, mainly in South America, the Caribbean, cruises and duty-free shops. "In our view, Breitling will generate healthy FOCF exceeding CHF30 million per year, supported by profitability expansion. We expect the company's profitability will improve in FY2022 reaching an S&P Global Ratings-adjusted EBITDA margin of 25.0%-26% compared with 22.7% in FY2021. This is thanks to Breitling's transition to the more cost effective digital marketing campaigns and ongoing introduction of products with higher average sales prices. Furthermore, profitability expansion will emerge from improved operating leverage and channel mix, as well as from integrating margins from the acquisition of agents in Austria, Russia, and Eastern Europe completed in August 2020; and in Malaysia, Belgium, and Luxembourg in April 2021. In our view, these initiatives will enable the company to fully offset the raw material price increases this year. Therefore, we project Breitling to generate solid FOCF of about CHF30 million from FY2022 (after lease payments) despite an expected increase in investment to support its digital and DtC expansion. "The fast deleveraging could increase Breitling's shareholder appetite for dividend payments. We estimate the company's leverage could approach 5.0x in FY2022 and further decrease afterward. However, Breitling's private equity sponsor, CVC Capital Partner, has not committed to maintain leverage at this level in the medium term. There is evidence of Breitling releveraging its capital structure to fund special dividend distributions as happened in November 2019 with roughly CHF140 million in dividend distributions. Our base-case scenario does not include any special dividend payment. "The stable outlook on Breitling reflects our view that the group will post profitable top-line expansion, taking advantage of consumers' positive reaction to new collections, increased focus on women's products, and growth in the e-commerce segment and selected retail expansion. "We expect S&P Global Ratings-adjusted debt to EBITDA to approach 5x at FY-end 2022. We also project the company will generate healthy FOCF above CHF30 million per year despite increasing investment required to support the DtC expansion. "We could consider a negative rating action if adjusted debt to EBITDA increases permanently above 7.0x. Under this scenario, we could observe a significant contraction of demand for luxury Swiss watches or erosion of Breitling's market share. This would translate into deteriorating EBITDA margins and FOCF turning negative. In addition, rating pressure could arise if Breitling's private equity owner exhibited a more aggressive financial policy. "We could upgrade Breitling if the group's credit metrics improved, including healthy and recurring positive FOCF and adjusted debt to EBITDA consistently below 5.0x. An upgrade would also hinge on a clear commitment from the financial sponsor to a long-term investment strategy that implies a low risk of releveraging beyond 5x." ============= U K R A I N E ============= PRAVEX-BANK JSC: Fitch Affirms Then Withdraws 'B/B+' IDRs --------------------------------------------------------- Fitch Ratings has affirmed PRAVEX-BANK's JSC (Pravex) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDR) at 'B' and 'B+', respectively. The Outlooks are Stable. Fitch has simultaneously withdrawn the ratings. Fitch has withdrawn the ratings for commercial reasons and will no longer provide ratings and analytical coverage for Pravex. KEY RATING DRIVERS IDRS, SUPPORT RATING, NATIONAL RATING Pravex's Long-Term Foreign-Currency IDR of 'B' and Support Rating (SR) of '4' reflect the limited extent to which institutional support from the bank's foreign shareholder can be factored into the ratings due to transfer and convertibility risks, as captured by Ukraine's Country Ceiling of 'B'. Pravex is fully owned by Intesa SanPaolo S.P.A. (BBB-/Stable). Pravex's 'B+' Long-Term Local-Currency IDR is one notch above the bank's Long-Term Foreign-Currency IDR and the sovereign IDRs. This considers the potentially lower impact of Ukrainian country risks on the bank's ability to service senior unsecured obligations in local currency than in foreign currency. The Stable Outlooks on Pravex are in line with that on the Ukrainian sovereign. The 'AA+(ukr)' National Long-Term Rating reflects the bank's creditworthiness relative to that of peers in Ukraine. VIABILITY RATING The 'b-' Viability Rating (VR) of Pravex balances its very small size and weak business model, as reflected by its pre-impairment operating losses over the last eight years. It also reflects solid asset-quality and capitalisation metrics following its balance sheet clean-up in 2017 and equity injections from the parent. A return to sustainable profitability is likely to be protracted. Pravex's impaired loans (Stage 3 under IFRS 9) were equal to 0.4% of gross loans at end-1Q21, fully covered by loan loss allowances. Concentration of the loan book is high as the majority of loans were written off in 2015-2017, while growth in corporate lending since 2018 was volatile and driven by a few large exposures. In retail, Pravex focuses on mortgages, car loans and consumer loans to affluent customers, which were equal to 34% of gross loans at end-1Q21. The bank is adequately capitalised. Fitch estimates that the bank's Fitch core capital (FCC)/regulatory risk-weighted assets (RWAs) was a strong 49% at end-1Q21, benefiting from the zero risk-weighting of sovereign debt securities and National Bank of Ukraine (NBU) deposit certificates (37% of assets). If these were 100% risk-weighted, the FCC ratio would have still been robust at 27%. Pravex was fully funded by customer accounts at end-1Q21. The bank's balance-sheet liquidity is healthy with liquid assets (cash, short-term interbank placements and unpledged sovereign securities) covering 76% of customer funding at end-1Q21. RATING SENSITIVITIES Not applicable. 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 Pravex's Long-Term IDRs reflect potential support from Intesa Sanpaolo S.p.A.., in case of need. 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 =========================== ELECORE ELECTRICAL: Goes Into Liquidation, 28 Jobs Affected ----------------------------------------------------------- Emma Newlands at The Scotsman reports that Largs-based electrical contracting specialist Elecore Electrical has folded with the loss of 28 jobs, as pandemic-related issues took their toll. Derek Forsyth and Blair Milne, partners with accountancy and business advisory firm Azets, have been appointed joint provisional liquidators of the family-owned firm, which was founded in 2017, and provided electrical design, contracting, data, fibre and project-management services for large construction projects, The Scotsman relates. According to The Scotsman, the liquidation is attributed to unsustainable cashflow problems stemming from the Covid pandemic including halted construction activity and, more recently, delays to projects caused by widespread labour and materials shortages. The business has ceased trading with immediate effect and all 28 staff were made redundant by the company just before the appointment of the joint provisional liquidators, The Scotsman discloses. FOOTBALL INDEX: GC Chief Clarifies Role in Administration --------------------------------------------------------- Nosa Omoigui at iGB reports that Gambling Commission interim chief executive Andrew Rhodes has attempted to clarify the Commission's level of involvement in administration proceedings relating to Football Index. Mr. Rhodes, who was appointed to the position back in June following Neil McArthur's departure, said he had received a number of messages regarding the operator and took to Twitter to address people's concerns directly, iGB relates. It had been hoped that a Company Voluntary Arrangement (CVA) would be a feasible way to reimburse customers who lost their money, iGB notes. However, Mr. Rhodes, as cited by iGB, said that the Gambling Commission could not help determine if this option remained likely as it was strictly an administration matter rather than one related to the regulator. According to iGB, Mr. Rhodes said: "A CVA may or may not happen -- it is not something the GC is involved with and would not be. It's between the administrators and any potential investor/buyer to set up a CVA. If a CVA does happen, then they will likely make an 'offer' for the debts the company has which would be your bets as well as any other debts. Court documents had previously revealed that the operator's plans for a CVA involved relaunching the platform, with creditors -- including former customers who lost money -- receiving equity in the new business, iGB relays. "This does not mean you would get all your original stake back -- it depends on what they offered. Then the CVA would need to apply for a license to operate from us, which we would be obliged to consider," he said. Mr. Rhodes also refuted claims that he said he didn't know how much peoples' bets were worth, saying that this was for the administrators to decide: "They need to be valued by the administrators. There are several ways of valuing the debt and whilst many feel this should be the original stake, there are several ways of looking at it. "Realistically, this will be part of attempting a CVA and if there is no ultimate rescue for the company the debt would need to be valued as part of winding a company up." Mr. Rhodes declined to comment on the roles of individuals during the investigation, as proceedings are still ongoing, iGB notes. He said he was also unable to provide an answer for when findings from the Football Index inquiry would be published, as it is not being conducted by the Gambling Commission but by DCMS, according to iGB. Many disgruntled customers demanded that the Commission should be responsible for covering losses made as they were regulating the platform, iGB says. Mr. Rhodes responded saying: "Being regulated does not prevent a company going into administration and unlike some other sectors, there is no insurance or compensation scheme to cover gambling companies that go into administration and then liquidation. "Funds protection needs to be made clear by the operator but this will vary between companies and aside from funds held separately, often the cash balances, this does not protect against a company going into administration. Administration for operators is not common -- there have been four in recent years, though orderly wind-up is a bit more common." The "football stock market" platform collapsed in March following its operator BetIndex going into administration, iGB recounts. The case was subsequently handed to administrators before being raised to the High Court, where it would be decided how GBP4.5 million of customer money -- including only funds held in accounts and not money spent on active bets -- would be repaid, iGB discloses. Ultimately, the court determined a cut-off date for account balances, allowing for the repayment of up to GBP3.5 million, iGB notes. However, a CVA or liquidation of the business is likely to be required in order for customers to see any of the funds spent on bets that were active when Football Index collapsed, iGB relates. JAIN IRRIGATION: Dutch Unit's English Scheme Gets Court Approval ---------------------------------------------------------------- Dominic Lawson at Global Restructuring Review reports that a Dutch subsidiary of India's Jain Irrigation Systems has won court approval for an English scheme it chose over a WHOA process, after providing evidence that Brexit would not prevent its recognition in the Netherlands. NEW LOOK: First Quarter Revenues More Than Doubled Following CVA ---------------------------------------------------------------- Henry Saker-Clark at Evening Standard reports that New Look has said that larger shopping sprees have offset lower footfall as the fashion retailer seeks to recover from a difficult year amid the pandemic. The high street brand revealed that total revenues have more than doubled for the first quarter of the current year, Evening Standard discloses. However, it came as the company also announced that sales plunged by 40% to GBP542.2 million for the year to March in its latest full year of trading, Evening Standard relates. The company confirmed in its accounts that it closed 39 stores to take its portfolio to 472 sites at the end of the year, according to Evening Standard. It came after New Look pushed through a Company's Voluntary Arrangement (CVA) restructuring deal which also heavily reduced its rent bill, Evening Standard notes. The firm's accounts also showed that it had reduced its employee numbers by almost 2,000 to 10,912 at the end of March this year, Evening Standard relays. According to Evening Standard, New Look said on Aug. 3 that it has been boosted by the reopening of stores in April but has also seen e-commerce sales rise over the period, with a 3.8% increase for the quarter to the end of June Total revenues for the period soared by 181.7% to GBP194.4 million compared with the same period last year, which had seen the firm hammered by pandemic closures, Evening Standard discloses. The group also said it has seen a positive reaction from shoppers to its latest summer ranges with "strong" sales of dresses and sandals since UK weather warmed up, Evening Standard notes. SGS FINANCE: S&P Lowers ICR to 'D(sf)' on Missed Interest Payment ----------------------------------------------------------------- S&P Global Ratings lowered to 'D (sf)' from 'CCC- (sf)' its credit ratings on SGS Finance PLC's series 1, 2, and 3 notes. On Aug. 26, 2020, SGS Finance received consent from the noteholders in relation to some amendments to the notes. In particular, on the payment date falling in September 2020, all amounts of interest that would otherwise be payable on each series of notes will be compounded with the outstanding principal amount of the series of notes and, from that date, will form part of the outstanding principal amount of that series of notes. Such amount of interest will constitute a payment-in-kind (PIK) amount. As part of the terms agreed on Aug. 26, 2020, each PIK amount bears interest at the notes' original interest rate plus 1%. Each PIK amount will be due at maturity. S&P said, "We understand that a fourth consent solicitation agreed by the noteholders in February 2021, permitted that the interest due and payable on the March 2021 interest payment date (IPD) could be treated as a PIK, which is different from the terms the noteholders agreed in August 2020. We have now been informed that interest was not paid on that IPD. "Our rating on the notes addresses the timely payment of interest. Following the breach of the rateable promise, and in application of our "S&P Global Ratings Definitions," published on Jan. 5, 2021, we have lowered our ratings on the notes to 'D (sf)'." In July 2021, noteholders agreed that on all subsequent IPDs, interest could be compounded again, if there are insufficient funds. SGS Finance is a debt platform with the flexibility to raise various debt types secured on ring-fenced collateral. Intu (SGS) Finco Ltd. (the borrower in the transaction) uses the proceeds of its financing activities (whether through borrowing from the issuer or through other forms of third-party debt) to make loans to asset-owning companies within the security group (consisting of the obligors and the borrower). The notes are secured by four shopping centers located throughout the U.K.: intu Lakeside, intu Braehead, intu Watford, and intu Victoria Centre. Our ratings on this transaction address the timely payment of interest, payable semiannually, and the payment of principal no later than the legal final maturity dates, which are between March 2028 (series 1) and September 2035 (series 3). Environmental, social, and governance (ESG) credit factors for this credit rating change: -- Health and safety. =============== X X X X X X X X =============== HESS MIDSTREAM: S&P Rates New $750MM Sr. Unsecured Issuance 'BB+' ----------------------------------------------------------------- S&P Global Ratings assigned its 'BB+' issue-level rating and '3' recovery rating to Hess Midstream Operations L.P.'s (HESM) proposed $750 million senior unsecured issuance. The partnership plans to use the net proceeds from this offering to repurchase approximately $750 million of Class B units from its two sponsors, Hess Corp. and Global Infrastructure Partners. The purchase price per Class B unit is $24.00, which represents an approximately 4% discount to the 30-day volume-weighted average trading price of Hess Midstream LP's Class A shares through July 27, 2021. The '3' recovery rating indicates S&P's expectation that lenders would receive meaningful (50%-70%; rounded estimate: 65%) recovery in the event of a payment default. Its 'BB+' issuer credit rating on HESM is unchanged. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2021. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. * * * End of Transmission * * *