/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/210917.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 Friday, September 17, 2021, Vol. 22, No. 181 Headlines G E R M A N Y FORTUNA CONSUMER: Fitch Assigns BB(EXP) Rating on 2 Note Classes NIDDA BONDCO: Fitch Affirms 'B' LongTerm IDR, Outlook Stable I R E L A N D CVC CORDATUS XV: Fitch Affirms B- Rating on Class F Notes L U X E M B O U R G CRC BREEZE: Fitch Affirms CC Rating on Class B Notes U N I T E D K I N G D O M ARTISAN H1: Kroll Advisory Set to Start Selling Off Assets BARROW AND DISTRICT: Goes Into Administration BUPA FINANCE: Fitch Publishes 'BB+' Rating on New Tier 1 Notes CLEVELAND BRIDGE: Report Unveils Details of Financial Problems ELEMENT MATERIALS: S&P Cuts ICR to B- on Capital Structure Stress MVH HAULAGE: Dep't for Economy Accepts Director Disqualification QUADRATE CATERING: Covid Pandemic Lockdowns Prompt Administration THE COLLECTIVE: Enters Administration After Failing to Find Buyer X X X X X X X X [*] BOOK REVIEW: Transnational Mergers and Acquisitions - - - - - ============= G E R M A N Y ============= FORTUNA CONSUMER: Fitch Assigns BB(EXP) Rating on 2 Note Classes ---------------------------------------------------------------- Fitch Ratings has assigned Fortuna Consumer Loan ABS 2021 DAC's (Fortuna 2021) notes expected ratings. The assignment of final ratings is contingent on the receipt of final documentation conforming to information already reviewed. DEBT RATING ---- ------ Fortuna Consumer Loan ABS 2021 DAC A LT AAA(EXP)sf Expected Rating B 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 NR(EXP)sf Expected Rating X LT BB(EXP)sf Expected Rating TRANSACTION SUMMARY Fortuna 2021 is a true-sale securitisation of a static pool of unsecured consumer loans sold by auxmoney Investments Limited. The securitised consumer loan receivables are derived from loan agreements entered into between Süd-West-Kreditbank Finanzierung GmbH (SWK) and individuals located in Germany and brokered by auxmoney GmbH (auxmoney) via its online lending platform. KEY RATING DRIVERS Operational Risks auxmoney operates a data- and tech-driven lending platform that connects borrowers and investors on a fully-digitalised basis. Fitch conducted an operational review during which auxmoney showed a robust corporate governance and risk approach. There is a warehouse facility with BNP Paribas in place, of which auxmoney holds the junior tranche. Assets for the transaction will be selected from this warehouse facility according to the transaction's eligibility criteria, ensuring that auxmoney retains sufficient risk on their own books. Large Loss Expectations auxmoney also targets higher-risk borrowers compared with traditional lenders of German unsecured consumer loans. Fitch determined the borrower credit score calculated by auxmoney as the key asset performance driver. Fitch assumes a weighted average (WA) default base case of 12.8% based on the score distribution in the pool and a recovery base case of 35%. Fitch applied a low WA default multiple of 3.8x and a high recovery haircut of 60% at 'AAAsf'. The resulting loss rates are the highest among the Fitch-rated German unsecured loans transactions. Adequate Historical Performance Data Availability Our asset assumptions are based on historical performance data since 2016, which just covers Fitch's minimum requirement of five years' worth of data history and also covers the usual lifetime of the loans. The data includes some visibility on performance during economic stress (ie during the coronavirus pandemic in 2020). Rapid Volume Growth; Stable Portfolio Borrower characteristics have remained largely stable, despite rapid origination volume growth until 2020; Fitch has not seen any evidence suggesting an increase in risk appetite. The transaction is static, which further limits the risk horizon in this regard. Servicing Continuity Risk Addressed CreditConnect GmbH, a subsidiary of auxmoney, is the servicer. Loancos GmbH will act as back-up servicer from closing, reducing the risk of servicing discontinuity. The back-up servicing agreement covers two scenarios, (i) where CreditConnect is replaced; and (ii) both CreditConnect and SWK no longer perform their contractual duties. The risk of payment interruption is also reduced by a liquidity reserve, which covers more than three months of senior expenses, swap payments and interest on the class A and B notes. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Long-term asset performance deterioration such as increased delinquencies or reduced portfolio yield, which could be driven by changes in portfolio characteristics, macro-economic conditions, business practices or legislation. Expected impact on the notes' ratings of increased defaults (class A/B/C/D/E/X): -- Increase default rate by 10%: 'AAAsf'/'AA-sf'/'A-sf'/'BBB- sf'/'B+sf'/'B+sf' -- Increase default rate by 25%: 'AA+sf'/'A+sf'/'BBB+sf'/'BB+sf'/'CCCsf'/'CCCsf' -- Increase default rate by 50%: 'AAsf'/'Asf'/'BBB- sf'/'BBsf'/'NRsf'/'NRsf' Expected impact on the notes' ratings of decreased recoveries (class A/B/C/D/E/X): -- Reduce recovery rates by 10%: 'AAAsf'/'AAsf'/'Asf'/'BBBsf'/'BBsf'/'BBsf' -- Reduce recovery rates by 25%: 'AAAsf'/'AAsf'/'A-sf'/'BBB- sf'/'BBsf'/'BBsf' -- Reduce recovery rates by 50%: 'AAAsf'/'AA-sf'/'A-sf'/'BBB- sf'/'B-sf'/'B-sf' Expected impact on the notes' ratings of increased defaults and decreased recoveries (class A/B/C/D/E/X): -- Increase default rates by 10% and decrease recovery rates by 10%: 'AAAsf'/'AA-sf'/'A-sf'/'BBB-sf'/'Bsf'/'Bsf' -- Increase default rates by 25% and decrease recovery rates by 25%: 'AA+sf'/'A+sf'/'BBBsf'/'BB+sf'/'NRsf'/'NRsf' -- Increase default rates by 50% and decrease recovery rates by 50%: 'AA-sf'/'BBB+sf'/'BB+sf'/'B+sf'/'NRsf'/'NRsf' Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Increase in credit enhancement ratios as the transaction deleverages and/or; -- Losses are smaller than assumed. Expected impact on the notes' ratings of decreased defaults (class A/B/C/D/E/X): -- Decrease default rate by 10%: 'AAAsf'/'AA+sf'/'A+sf'/'BBB+sf'/'BBsf'/'BBsf' -- Decrease default rate by 25%: 'AAAsf'/'AAAsf'/'AA- sf'/'Asf'/'BB+sf'/'BB+sf' -- Decrease default rate by 50%: 'AAAsf'/'AAAsf'/'AAAsf'/'AAsf'/'A-sf'/'BB+sf' Expected impact on the notes' ratings of increased recoveries (class A/B/C/D/E/X): -- Increase recovery rate by 10%: 'AAAsf'/'AAsf'/'Asf'/'BBBsf'/'BBsf'/'BBsf' -- Increase recovery rate by 25%: 'AAAsf'/'AA+sf'/'Asf'/'BBB+sf'/'BBsf'/'BBsf' -- Increase recovery rate by 50%: 'AAAsf'/'AA+sf'/'A+sf'/'BBB+sf'/'BB+sf'/'BB+sf' Expected impact on the notes' ratings of decreased defaults and increased recoveries (class A/B/C/D/E/X): -- Decrease default rates by 10% and increase recovery rates by 10%: 'AAAsf'/'AA+sf'/'A+sf'/'BBB+sf'/'BB+sf'/'BB+sf' -- Decrease default rates by 25% and increase recovery rates by 25%: 'AAAsf'/'AAAsf'/'AA-sf'/'Asf'/'BBB-sf'/'BB+sf' -- Decrease default rates by 50% and increase recovery rates by 50%: 'AAAsf'/'AAAsf'/'AAAsf'/'AAsf'/'Asf'/'BB+sf' 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 reviewed the results of a third-party assessment conducted on the asset portfolio information, and concluded that there were no findings that affected the rating analysis. Overall, Fitch's assessment of the asset pool information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. 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. NIDDA BONDCO: Fitch Affirms 'B' LongTerm IDR, Outlook Stable ------------------------------------------------------------ Fitch Ratings has affirmed Nidda BondCo GmbH's (Nidda) Long-Term Issuer Default Rating (IDR) at 'B' with Stable Outlook, following an EUR350 million tap to the healthcare group's senior secured loans. The proceeds will be used to repay operating pharmaceutical company Stada Arzneimittel AG's (Stada) legacy bond of EUR267 million at maturity in 2022, with the balance to be invested in M&A. Nidda's rating reflects a highly aggressively leveraged capital structure following a sponsor-backed acquisition of Stada, which is balanced against Stada's robust business profile with strong 'BB' characteristics. Fitch expects a post-pandemic recovery in EBITDA margins and free cash flows (FCF), based on Stada's large product and geographic footprint, which will continue to mitigate high leverage estimated to remain at around 8.0x-8.5x in the medium term. The Stable Outlook is supported by healthy debt service coverage ratios, sustainable high levels of organic cash generation in combination with large available liquidity headroom, which offsets temporary operating underperformance and excessive leverage projected for 2021-2022. KEY RATING DRIVERS 2021 Performance to Remain Weak: Fitch projects Stada to see temporarily weaker sales and profitability in 2021, due to continued pandemic pressures with product and country-mix shifts, integration of large and complex assets acquired in 2020, and foreign-exchange (FX) impact. Fitch sees EBITDA margins remaining at 21% in 2021, below the pre-pandemic levels of 22%-25% (Fitch- defined, excluding IFRS 16), given a growing share of sales and marketing-intensive consumer healthcare products. Recovery Expected in 2022: Fitch expects a performance recovery in 2022, through rigorous portfolio management and disciplined integration, given its fundamentally strong business model and product portfolio. Persisting operating softness after 2021 could signal structural business issues, which combined with higher leverage could put the ratings under pressure given the low rating headroom. Higher Leverage Through 2022: Fitch expects funds from operations (FFO) gross leverage to remain high at around 9.0x-10.0x until end-2022. The sponsors' aggressive financial policy means any deleveraging would most likely come from EBITDA rather than debt reduction. The Stable Outlook is supported by the prospect of a near-term strengthening of free cash flow (FCF) margins, counterbalancing Stada's sustained high financial risk. Healthy Medium-Term FCF: A record of healthy FCF generation and the prospect of FCF margins returning to mid-single digits from 2022 are a strong mitigating factor of Stada's over-leveraged balance sheet. Fitch expects large and sustainable FCF at around EUR150million and robust FCF margins to trend towards 5% in 2022, despite growing trade working capital and capex. Stagnant or weakening FCF in combination with persisting higher leverage will point to credit deterioration and may lead to a negative rating action in the next 12 months. Strongly Acquisitive Strategy Continues: The planned tap confirms Fitch's expectations of more opportunistic M&A activity, which historically has been solely debt-funded. Fitch sees a wide range of available suitable pharmaceutical asset targets to credits such as Stada, as large pharma companies streamline their product portfolios. The risk profile of the target assets, acquisition economics and execution, as well as financial discipline pose potential challenges. Acquisition of margin-dilutive or complex assets could weigh on near-term operating margin recovery. Positive Market Fundamentals: Fitch expects the positive fundamentals for the European generics market will continue as governments and healthcare providers seek to optimise healthcare cost structures, which are under pressure from growing and ageing populations, increasing prevalence of chronic diseases, and expensive new innovative treatments coming to market and affecting budgets. Fitch sees continued structural growth opportunities, given limited overall generic penetration in Europe versus the US and the increasing introduction of biosimilars. DERIVATION SUMMARY Fitch rates Nidda according to its Global Rating Navigator Framework for Pharmaceutical Companies. Under this framework, Nidda's generic and consumer business benefits from diversification by product and geography, with a balanced exposure to mature, developed and emerging markets. Nidda's business risk profile is affected by a smaller global footprint than more global industry participants, such as Teva Pharmaceutical Industries Limited (BB-/Negative) and Mylan N.V. (BBB/Stable), and diversified companies, such as Novartis AG (AA-/Stable) and Pfizer Inc. (A/Negative). High financial leverage is a key rating constraint, compared with international peers', and is reflected in the 'B' rating. Nidda ranks ahead of other highly speculative sector peers such as Care Bidco (B(EXP)/Stable), and IWH UK Finco Limited (B/Stable), in size and product diversity. Nidda's business is mainly concentrated in Europe, but it also has a growing presence in developed and emerging markets. This gives Nidda a business risk profile that is consistent with a higher rating. However, its high financial risk, with FFO gross leverage projected to remain at or above 8.0x in 2021-2024, is more in line with a weak 'B-' rating, after being offset by strong FCF generation. The distinction between Nidda and higher-rated peers CHEPLAPHARM Arzneimittel GmbH (B+/Stable) and Pharmanovia Bidco Limited (B+/Negative) reflects their less aggressive leverage, despite smaller business models and higher exposure product concentration. KEY ASSUMPTIONS Fitch's key assumptions within its rating case for the issuer include: -- Sales CAGR of 9.8% for 2020-2024, due to volume-driven growth of legacy product portfolio, new product launches, the acquisition of intellectual property rights and business additions; -- Fitch-defined EBITDA margin recovering towards 21% by 2022, underpinned by a normalisation in trading operations combined with further cost improvements and synergies realised from the latest acquisitions; -- Capex at 2.5% of sales a year to 2024, given recent capacity expansion and an expected increase in production volumes; -- M&A estimated at EUR200 million-EUR500 million a year to 2024, to be primarily funded from internally generated funds and supported by tap on the existing senior secured facilities or a EUR400 million revolving credit facility (RCF); -- M&A at 10x enterprise value (EV)/EBITDA multiples with a 20% EBITDA contribution; and -- Stada's legacy debt (mainly an outstanding EUR267 million 1.75% bond due in 2022) repaid via the contemplated tap issue. Recovery Assumptions: Nidda would be considered a going-concern (GC) in bankruptcy and be reorganised rather than liquidated. Fitch estimates a post-restructuring EBITDA of around EUR585 million, which would allow Nidda to remain a GC after distress and assuming implementation of some corrective actions. Fitch's estimate of the GC EBITDA also includes the M&A contribution to be funded from the new EUR350 million senior secured loan tap. Fitch applies a distressed EV/EBITDA multiple of 7.0x, which reflects Stada's size, product breadth and cash-generative operations. Fitch assumes Stada's senior unsecured legacy debt (at the operating company level), which is structurally the most senior, ranks on enforcement pari passu with the senior secured acquisition debt, including term loans and senior secured notes. This view is based on Fitch's principal waterfall analysis and assuming the EUR400 million RCF is fully drawn in the event of default. Senior notes at Nidda rank below senior secured acquisition debt. Our principal waterfall analysis, after deducting 10% for administrative claims, generates a ranked recovery for the senior secured debt of 63% in the 'RR3' category, leading to a 'B+' rating, which is one notch above the IDR. Recoveries envisaged for Nidda's senior unsecured notes remain at 0%, in the 'RR6' band, providing a 'CCC+' instrument rating, two notches below the IDR. RATING SENSITIVITIES Factors that could, individually or collectively, lead to positive rating action/upgrade: -- Sustained Fitch-defined EBITDA margin in excess of 25% and FCF margin consistently above 5%; -- Reduction in FFO gross leverage to below 7.0x, or FFO net leverage declining toward 6.0x on a sustained basis; -- Maintenance of FFO interest coverage close to 3.0x. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Persisting operating weakness, with EBITDA margins declining to below 18%; -- Diminished prospects for FFO gross leverage declining to below 8.5x by 2023; -- M&A shifting towards higher-risk or lower-quality assets or weak integration resulting in pressure on profitability and weak FCF margins; -- FFO interest coverage weakening to below 2.0x. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Non-Financial Corporate issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. LIQUIDITY AND DEBT STRUCTURE Comfortable Liquidity: Fitch projects a comfortable year-end cash position of EUR100 million to 2024, underpinned by an improving FCF margin towards 5%. To calculate freely available liquidity, Fitch has deducted EUR4 million of cash held in China and a further EUR100 million as the minimum operating cash requirement, reflecting Stada's expanding scale and geographical footprint. The envisaged tap issue of EUR350 million will be used to redeem Stada's EUR267 million bond at maturity in 2022, therefore extending debt maturities until 2024, and increasing Stada's financial flexibility to 2024. ISSUER PROFILE Nidda is an SPV indirectly owning the Germany-based pharmaceutical company Stada, a manufacturer and distributor of generic and branded consumer healthcare products. 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. ============= I R E L A N D ============= CVC CORDATUS XV: Fitch Affirms B- Rating on Class F Notes --------------------------------------------------------- Fitch Ratings has assigned CVC Cordatus Loan Fund XV DAC's refinancing notes final ratings, based on its Exposure Draft for CLOs and Corporate CDOs Rating Criteria published on 9 August 2021. Fitch has also affirmed the non-refinanced class E, F and X notes based on its existing CLOs and Corporate CDOs Rating Criteria. DEBT RATING PRIOR ---- ------ ----- CVC Cordatus Loan Fund XV DAC A XS2025844114 LT PIFsf Paid In Full AAAsf A-R XS2382262793 LT AAAsf New Rating AAA(EXP)sf B-1 XS2025844544 LT PIFsf Paid In Full AAsf B-1-R XS2382262959 LT AAsf New Rating AA(EXP)sf B-2 XS2025845350 LT PIFsf Paid In Full AAsf B-2-R XS2382263171 LT AAsf New Rating AA(EXP)sf C XS2025845947 LT PIFsf Paid In Full A+sf C-R XS2382263338 LT Asf New Rating A(EXP)sf D XS2025846754 LT PIFsf Paid In Full BBB-sf D-R XS2382263502 LT BBB-sf New Rating BBB-(EXP)sf E XS2025846671 LT BB-sf Affirmed BB-sf F XS2025847216 LT B-sf Affirmed B-sf X XS2025843496 LT AAAsf Affirmed AAAsf TRANSACTION SUMMARY This transaction is a cash flow collateralised loan obligation (CLO) actively managed by the manager, CVC Credit Partners European CLO Management LLP. The reinvestment period is scheduled to end in February 2024. At closing of the refinance, the class A-R, B-1-R, B-2-R, C-R & D-R notes have been issued to refinance the existing notes. The class X, E, F and the subordinated notes have not been refinanced. The weighted average life (WAL) covenant has been extended by nine months to 7.2 years and the matrix has been updated concurrently based on the Exposure Draft. 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 current portfolio is 24.74 based on the Exposure Draft criteria and 33.52 based on the existing criteria. High Recovery Expectations (Positive): Over 90% of the portfolio comprises 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 portfolio is 63.65% based on both the Exposure Draft and existing criteria. Diversified Portfolio (Positive): The transaction has four matrices corresponding to two top 10 limits at 18% and 23%, and two maximum fixed rate asset limits at 0% and 12.5%. The portfolio is diversified with 136 issuers and the top ten obligors' exposure is 16.70%, while the largest obligor represents 2.12% 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 (Neutral): The transaction has a 2.4-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. Cash Flow Analysis (Neutral): In Fitch's analysis, the stressed-case portfolio is modelled with a WAL of 6.2 years, which is one year shorter than the 7.2 years expected at closing of the refinance due to the tight reinvestment conditions after the reinvestment period. Fitch considers the reinvestment conditions such as the satisfaction of 'CCC' limit and coverage tests post reinvestment and a linear step down of the WAL test. This justifies a one-year WAL reduction in Fitch's analysis. Affirmation of Existing Notes: The class X, E and F notes have been affirmed based on Fitch's existing criteria. For the class F note, the notes show a marginal shortfall based on the current portfolio analysis in the back-default timing scenario, which is not the agency's base case expectation. The tranche displays a safety margin due to its credit enhancement of 6.9% and therefore do not show a real default possibility, which is Fitch's 'CCC' definition. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A 25% increase of the mean default rate (RDR) across all ratings and a 25% decrease of the recovery rate (RRR) across all ratings would result in downgrades of up to five notches cross the structure. -- 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. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- A 25% reduction of the mean RDR across all ratings and a 25% increase in the RRR across all ratings will result in an upgrade of no more than five notches across the structure, apart from the class X and A-R 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 was customised to the portfolio limits as specified in the transaction documents. Even if the actual portfolio shows lower defaults and smaller losses (at all rating levels) than Fitch's stressed portfolio assumed at closing, an upgrade of the notes during the reinvestment period is unlikely as the portfolio credit quality may still deteriorate, not only through natural credit migration, but also through reinvestments as the manager can update the collateral quality tests. -- Upgrades may occur after the end of the reinvestment period on better-than-expected portfolio credit quality and deal performance, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. 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 CVC Cordatus Loan Fund XV DAC Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. The majority of the underlying assets or risk presenting entities have ratings or credit opinions from Fitch and/or other Nationally Recognized Statistical Rating Organizations and/or European Securities and Markets Authority registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk presenting entities. Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. =================== L U X E M B O U R G =================== CRC BREEZE: Fitch Affirms CC Rating on Class B Notes ---------------------------------------------------- Fitch Ratings has affirmed CRC Breeze Finance S.A., (Breeze II)'s class A notes at 'CCC' and class B notes at 'CC'. The notes were issued to purchase a portfolio of wind farms in France and Germany. RATING RATIONALE The ratings reflect that there may be insufficient cash in the debt service reserve account (DSRA) to service the bonds until maturity, indicating that default has become a real possibility. Revenue under-performance has continued as a result of wind yield being consistently below expectations, despite benefiting from fixed feed-in tariffs. Fitch expects continued cash flow pressure due to a rise in operating and maintenance costs and a decrease in turbine availability as the assets age. The bonds' equally sized semi-annual principal repayments in any given year do not consider summer and winter wind seasonality, which results in less cash being available for the autumn debt service. The class B bonds' DSRA has no funds and the class A bonds' DSRA is partially depleted. Fitch's forecasts indicate that neither DSRA will be replenished as flows into them are subordinated to the repayment of the class B bond deferrals, currently approximately EUR18 million (around 36% of the original class B notional). Fitch perceives a default as probable for the class B notes. From a probability of default perspective, a material reduction in the terms of the bonds, agreed in the context of a potential restructuring, could lead to an acceleration of the timing of a default. KEY RATING DRIVERS Aging Turbines Trigger More Maintenance - Operation Risk: Weaker Turbine availability has historically been high, at or even slightly exceeding Fitch's expectation of 96.5%. CRC Breeze Finance has also demonstrated better cost control in recent years after initially underestimating the budget prior to entering into the transaction. However, Fitch considers that a decrease in availability in the coming years is likely, given that the turbines are aging and will need more maintenance, and this has been reflected in Fitch's Rating Case. At the same time, operating costs are expected to increase. Initial Wind Estimates Largely Overestimated - Volume Risk: Weaker The initial wind study grossly overestimated CRC Breeze Finance's wind resources. A new study displaying lower wind forecasts was prepared in 2010, which revised the wind forecast down by 17%. However, the actual wind yield is also lower than the revised wind estimates. Fitch now considers historical data as a more reliable basis for Fitch's volume projections, because of the actual wind yield repeatedly falling short of expectations. Limited Exposure to Merchant Pricing - Price Risk: Midrange The wind farms are remunerated through fixed feed-in-tariffs embedded in German and French energy regulation. German tariffs are set for 20 years and French tariffs for 15 years. This leaves the project with a degree of exposure to merchant pricing, at approximately 10% of the portfolio's generation capacity during the last three to four years, increasing to more than 20% at the last payment date. Partially Depleted DSRA on Class A - Debt Structure: Midrange Large Amounts of Deferrals on Class B - Debt Structure: Weaker The class A bonds rank senior, are fully amortising and have a fixed interest rate. However, the structure is weakened by equally sized semi-annual principal repayments together with the potential leakage of cash to pay semi-annual class B payments ignoring wind seasonality. The low volumes have affected the project's cash generation, and liquidity remains tight. Fitch does not expect it to materially improve. There have been several drawdowns on the DSRA, meaning that debt service can still be maintained to an extent during weak wind seasons but the reserve is significantly eroded, at EUR 6.5 million versus the initial balance of EUR13.3 million. A replenishment of this reserve is very unlikely, as it is subordinated to the repayment of the entire balance of deferrals on the class B bonds. Additional drawings on the class A DSRA would further affect the debt structure. The class B DSRA is depleted and large amounts of scheduled payments on the class B bonds have been repeatedly deferred over the years. In May 2021, the total accumulated amount of class B principal deferrals was approximately EUR18 million, which may be repaid until the class A bonds reach their maturity, but the subordination to the class A makes this scenario unlikely. Financial Profile Fitch's rating case results in average and minimum DSCRs of 0.87x and 0.72x, respectively, for the class A bonds and highlight that there is no financial cushion. The equally sized semi-annual principal repayments ignoring summer and winter wind seasonality mean that there is less cash available for autumn debt service. This increases the likelihood of further drawdowns on the class A DSRA, already partially depleted. Fitch concludes that there may not be sufficient cash in the reserve to service the class A until maturity. This positions the rating at 'CCC'. The balance of principal deferrals on the class B bonds currently stands at around 36% of the notional, which indicates a clearly probable default. However, CRC Breeze Finance SA can defer the payments of the class B bonds until 2026, when the class A matures, and the credit risk profile of the class B bonds corresponds to a 'CC' rating. PEER GROUP Like Breeze Finance SA, CRC Breeze Finance SA consists of a portfolio of onshore wind farms located in Germany and to a lesser extent, in France. As a result, they share the same regulatory framework, with fixed feed-in-tariffs. They have equally suffered from considerable over-estimation of their wind resources. Additionally, the seasonality of wind yield, combined with equal semi-annual principal repayments, has led to shortfalls at the autumn payment dates. This has resulted in deferrals on the class B notes and drawings on the class A notes' DSRA for both transactions. Compared with Breeze Finance SA, whose class B bonds mature in 2027, CRC Breeze Finance SA class B's scheduled maturity was 2016 but payments can be deferred until the class A bonds reach their maturity in 2026. However, Fitch does not see this as a significant benefit for CRC Breeze Finance SA as the high amount of deferrals, their subordination to the class A notes and the fully depleted class B notes' DSRA mean a full repayment of the class B bonds remains unlikely. Fitch believes that the ratings of the two transactions should be aligned as a result, at 'CCC' for the class A notes and 'CC' for the class B notes. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- Class A: weak wind conditions, a material decline in availability or a lasting increase in operating costs triggering further significant drawdowns on the class A DSRA. -- Class B: default becoming imminent or inevitable. Restructuring proposal put to the bondholders to materially reduce the terms of class B bonds. Factor that could, individually or collectively, lead to positive rating action/upgrade: -- An upgrade of either class at this point appears unlikely. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. CREDIT UPDATE Performance Update There were no drawdowns under the DSRA during the last year given the good levels of production during last year and strong cost control, however production at the end of 2020 and in 1Q21 was low due to weak wind levels. The current class A reserve balance is below 50% of the target balance. Covid-19 Not Affecting Operations The portfolio has not suffered any major impact from the Covid-19 pandemic. In some locations, adjustments were made to adapt to the lockdown in terms of logistic and worker availability, although there were no events that affected the portfolio operations. FINANCIAL ANALYSIS Fitch Cases Fitch's base and rating cases are based on historical average revenues. This assumption changes over time in Fitch's reviews, as the project yields more historical data. Fitch's rating case also includes an additional 15% stress on costs. ESG CONSIDERATIONS The highest level of ESG credit relevance, if present, is a score of '3'. This means ESG issues are credit- neutral or have only a minimal credit impact on the entity, either due to their nature or to the way in which they are being managed by the entity. =========================== U N I T E D K I N G D O M =========================== ARTISAN H1: Kroll Advisory Set to Start Selling Off Assets ---------------------------------------------------------- Business Sale reports that Kroll Advisory Ltd is set to start selling off assets after being appointed administrator to four companies in the Artisan group. Jimmy Saunders and Andrew Knowles of Kroll have been named joint administrators of Artisan H1 Ltd, the Ainscow Hotel Ltd, Greyday LLP and Artisan Group Facilities Management Ltd., Business Sale relates. The four companies operate numerous properties in Manchester, including Salford's The Ainscow Hotel, several apartment buildings and a former mill, which is described as having significant potential for redevelopment. According to Business Sale, the companies' struggles were partly attributed to the fallout of the Grenfell Tower disaster. Several of its residential properties have cladding facades, severely impacting the ability of the group and third-party leaseholders within the buildings to sell apartments, Business Sale discloses. The Ainscow Hotel, which employs 30 staff, is continuing to trade as a going concern, with trade not suffering any disruption, Business Sale notes. Bookings at the hotel are being honoured and are forecast to significantly improve as COVID-19 restrictions ease and the business' key Christmas trading period starts, Business Sale states. The joint administrators are now set to proceed with a divestment by selling assets relating to the residential developments, according to Business Sale. Kroll has said this will take place in a staged process, initially focusing on buildings not affected by cladding, with administrators working with managing agents and professional consultants in an attempt to resolve the cladding situation at other buildings, Business Sale notes. The appointment of Kroll to the companies follows the firm's appointment as administrator to Artisan H (Kings Waterfront) Ltd in June 2021, Business Sale recounts. Artisan H owns The Block residential development on the Liverpool Waterfront. BARROW AND DISTRICT: Goes Into Administration --------------------------------------------- Dan Taylor at The Mail reports that members of Barrow and District Credit Union will have their balances paid out after the group went in administration. According to The Mail, administrators have been called in at the credit union, a community savings and loans provider. The credit unions' 1,200 members are due to receive their money under the Financial Services Compensation Scheme, The Mail discloses. The total payout is expected to be around GBP500,000, The Mail states. Members are due to receive a cheque for their balance, The Mail notes. Queries about Barrow and District Credit Union Ltd can be directed to James Sleight and Peter Hart of PKF Geoffrey Martin & Co Ltd, which has been appointed as administrator, The Mail says. The administrator can be contacted by telephone on 01229 520130 or 01229 870110 or email bdcu@pkfgm.co.uk, The Mail notes. BUPA FINANCE: Fitch Publishes 'BB+' Rating on New Tier 1 Notes -------------------------------------------------------------- Fitch Ratings has published Bupa Finance plc's (Bupa Finance); Issuer Default Rating (IDR) 'A-'/Stable proposed issue of perpetual subordinated Restricted Tier 1 (RT1) convertible notes' 'BB+' rating. The proposed notes are rated four notches below Bupa Finance's IDR, made up of two notches for poor recovery and two notches for moderate non-performance risk. The proceeds of the notes will be used for general corporate purposes including without limitation the redemption of some of Bupa Finance's 2023 subordinated notes by way of tender offer. KEY RATING DRIVERS The proposed notes will have a fixed coupon, which will be reset every five years after the first 10.5 years non-call period. The notes will rank ahead of ordinary shares in the event of a winding-up, but behind senior creditors, which are defined as including Solvency II Tier 2 subordinated debt. The level of subordination results in Fitch's baseline recovery assumption of 'poor'. Fitch therefore notches down twice from the IDR. The notes will include a mandatory interest cancellation feature, which will be triggered if any solvency capital requirement (SCR) applicable to the issuer or the group is not met, or if the regulator has notified the issuer that payments under the notes have to be cancelled. The issuer will also have full discretion to cancel interest payments at any time at its option. Fitch therefore assesses the risk of non-performance as 'moderate' and Fitch notches down twice from the IDR to reflect this fully flexible interest cancellation feature. This assessment implies one extra notch compared with Fitch's treatment of standard Solvency II Tier 2 instruments to reflect the higher non-performance risk arising from the fully flexible interest cancellation. The principal amount outstanding of the proposed notes will be converted into ordinary shares if a trigger event occurs, which is defined as the amount of own funds eligible to cover the SCR being equal or less than 75% of the SCR; or the amount of own funds eligible to cover the minimum capital requirement (MCR) being equal or less than the MCR; or a breach of the SCR has occurred and compliance is not re-established within three months of the breach. The conversion feature does not affect Fitch's rating notching. Fitch expects the notes to receive 100% equity credit in Fitch's Prism Factor-Based Model. Given that the proposed notes are noncumulative perpetual instruments with no step-ups, Fitch will treat them as equity in Fitch's financial debt leverage calculation. However, the notes will be treated as 100% debt in Fitch's total financing and commitments ratio, in common with any other debt instrument. Fitch views the issuance of the RT1 instrument as positive for the Bupa group's financial leverage ratio (FLR). In addition, Fitch expects a further improvement in FLR if Bupa Finance partially buys back its Tier 2 notes due in 2023, given that this instrument is treated as 100% debt in the FLR calculation. Fitch views the issue of the proposed RT1 notes as negative for fixed-charge-coverage ratio (FCC). However, a part redemption of the 2023 notes could fully offset this increase. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- An improvement in Bupa's business profile through greater diversification of its business mix. However, Fitch views an upgrade as unlikely in the medium term, given the group's earnings concentration in Private Medical Insurance (PMI) and associated operations. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- An increase in Bupa's FLR over 35%; -- Sustained deterioration in operating performance, as evidenced, for example, by a combined operating ratio above 100%. 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. ISSUER PROFILE 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. CLEVELAND BRIDGE: Report Unveils Details of Financial Problems -------------------------------------------------------------- Dave Rogers at Building reports that Cleveland Bridge first approached a restructuring specialist about its worsening financial problems at the start of this year, months before the firm sank into administration owing creditors nearly GBP22 million. The steelwork contractor's finance director Phil Heathcock contacted FRP Advisory in January about getting hold of more working capital to allow it to keep trading in the latter part of this year, Building recounts. According to Building, FRP was told Cleveland Bridge bosses were "confident . . . any funding shortfall would be met by ARPIC" -- the Saudi Arabian oil and gas business which has owned the firm for close to 20 years. Turnaround specialist Kingsgate, which was brought in at the beginning of June, around which time Cleveland Bridge's managing director Chris Droogan handed in his resignation, estimated the firm was facing a funding shortfall of GBP12 million, Building relates. But Mr. Heathcock, who documents filed at Companies House show stepped down as a director at the beginning of the month, told FRP on July 16 that "ARPIC had declined to provide any further financial support. Heathcock advised that the company would therefore be unable to pay wages the following week and that he now considered insolvency inevitable", Building recounts. After a final approach was made to ARPIC to "request finding to avoid administration" FRP was formally appointed on July 22 as administrator after finance firm 4Syte, which provided the contractor with GBP4 million of emergency funding in June, called them in, Building discloses. According to Building, an administrator's report filed at Companies House this week, laid bare some of the issues Cleveland Bridge said it had run into which meant its finances deteriorated rapidly. These included a GBP1.7 million bill to cover the cost of the pandemic, the rise in steel prices, delays on jobs caused by the pandemic and an estimating blunder on a GBP11 million scheme which meant the job, which made up the majority of its production hours at its Darlington facility in the first three months of this year, was being done at zero gross profit, Building states. It said margins had been hit by paying for overtime working and agency staff after work on jobs restarted following the lifting of lockdown restrictions while "a significant high margin overseas contract" had been delayed by a political coup, Building notes. According to the FRP report, 4Syte is a secured creditor and is owed GBP2.24 million which FRP said it expected "will be repaid in full", Building relays. ARPIC is owed around GBP8 million but has been warned to not expect all of it back, Building states. Preferential creditors including the firm's 227 staff are owed GBP401,000 in missing wages, holiday pay and pension contributions while HMRC is owed a further GBP2.5 million, Building discloses. FRP, as cited by Building, said: "It is anticipated that there will be a distribution available to preferential creditors." But unsecured creditors, owed a total of around GBP8 million, have been told to forget about any hope of getting their money back, Building notes. Last week, FRP said that hopes of finding a buyer for the stricken firm, founded in 1877, have to come to nought with the business set to shut for good by the end of the month, Building recounts. ELEMENT MATERIALS: S&P Cuts ICR to B- on Capital Structure Stress ----------------------------------------------------------------- S&P Global Ratings downgraded its issuer credit rating to 'B-' from 'B' on U.K.-based Element Materials Technology Ltd. (Element) and its financing subsidiaries, Greenrock Midco Ltd. and Greenrock Finance Inc. S&P also downgraded its issue rating on the first-lien facilities to 'B-' from 'B'. The outlook is stable. The recovery rating is unchanged at '3' (rounded recovery 50%), indicating meaningful recovery prospects in a default scenario. S&P said, "The stable outlook shows that we expect Element to generate positive free operating cash flow (FOCF) of $18 million-$30 million in 2022 and 2023, and that liquidity will remain adequate over the next 12 months, albeit with S&P Global Ratings-adjusted debt-to-EBITDA remaining elevated above 16x (above 8.5x on a cash-pay basis) until the end of 2023. "We base our downgrade on Element's more-aggressive financial policy. Element has chosen to undertake debt-funded acquisitions with limited equity contributions, even though the group had limited rating headroom and stretched credit metrics, as reflected in our negative outlook and previous base case. In the year-to-date, it has increased its acquisitions activity, although some of its end-markets have not fully recovered from the pandemic. For instance, in July 2021, it added $180 million in first-lien debt to its debt stock, under existing debt baskets. It used the money to refinance the capital expenditure (capex) facility it uses for acquisitions. Its acquisition pipeline will continue to focus on building the group's Life Sciences and Connected Technology segments, which are sectors that offer a competitive edge and uplift operating performance, in our view." Element has demonstrated a high pace of acquisitions, with total consideration for acquisitions estimated to exceed $250 million in 2021. As a result, reducing its leverage will take longer than we had previously anticipated. Its leverage is elevated compared with financial-sponsor owned peers rated 'B', which suggests that its financial sponsor's strategy for expanding Element is aggressive. S&P said, "Our base-case forecast is that adjusted leverage for 2021 will be 18.0x-18.3x (10.0x-10.3x on a cash-pay basis, excluding payment-in-kind [PIK] and preferred shares). S&P said, "Our adjusted debt figure for 2021 includes PIK and preferred shares with interest for the preferred shares accruing at 11% a year and at 8.75% for the PIK instrument. This amounts to about $1.6 billion by the end of the year. Although this interest does not weigh on cash pay interest, it is captured in our leverage metrics and weighs on the group's financial risk profile." It could also affect the group's ability to refinance the capital structure within the next couple of years. S&P said, "Although we expect Element's revenue to rebound further in 2021, the EBITDA base is recovering more slowly than previously anticipated. Indeed, we forecast resilient top-line growth in 2021 and 2022, with revenue growing 6.7%-7.0% per year. However, this is counterbalanced by high restructuring costs of $20 million-$30 million as part of the group's merger and acquisition (M&A) strategy. As a result, we predict that our FFO coverage ratio will be 1.8x-1.9x in 2021, below our 2.0x trigger, suggesting two years of sustained underperformance on this trigger. Although our base case forecasts that this ratio will rebound to 2.1x-2.2x in 2022-2023, we see increased downside risk because of the restructuring costs and the higher interest burden that could follow Element's increased appetite for M&A. "The group undertook cost-cutting measures and working capital initiatives during 2020 and we expect these to continue through 2021. They support FOCF generation and the group's liquidity profile. At the height of the pandemic, in April 2020, the group obtained its lenders' agreement to use the acquisition/capex facility to cover corporate general purposes for the 18 months to Oct. 14, 2021. We factored this significant liquidity buffer into our liquidity assessment, but assume that the agreement will not be extended, limiting use of the facility to capex and M&A financing. Nevertheless, liquidity remains adequate, in our view. We forecast that FOCF will be minimal and positive in 2021 and then rise to $18 million-$30 million in 2022 and 2023. "The stable outlook indicates that we expect Element to generate positive FOCF of $18 million-$30 million in 2022 and 2023, and that liquidity will remain adequate for the next 12 months. We anticipate that its capital structure will remain deeply leveraged, with adjusted debt-to-EBITDA above 18x (10x on a cash pay basis) in 2021. This will fall to around 16x (8.5x on a cash pay basis) in 2022 and 2023." S&P could consider lowering the rating on Element if: -- Liquidity weakening significantly; and -- Leverage shows any further deterioration, which could cause us to view the capital structure as unsustainable. S&P could consider raising the rating if: -- Element reduces leverage more quickly than anticipated over the next 12 months, so that cash-pay leverage is below 8.0x; and -- Its financial sponsor commits to limiting debt-funded acquisitions. Given the recent increase in debt, and the life cycle of the investment, S&P believes this scenario to be unlikely. In addition, it would expect the group to build a record of adjusted FOCF above $30 million per year. MVH HAULAGE: Dep't for Economy Accepts Director Disqualification ---------------------------------------------------------------- The Department for the Economy has accepted a disqualification undertaking from the director of a company providing freight transport by road. The undertaking was received for seven years from Kevin Patrick Donnelly (75) of Caman Park, Ballycastle in respect of his conduct as a director of MVH Haulage Services Limited ("the Company"). The Company acted as a freight transportation, trading from 3 Mill Street, Ballycastle and went into liquidation on July 24, 2018, with an estimated deficiency as regards creditors of GBP1,846,655.14. There was a total of GBP100,000 owing as Share Capital, resulting in an estimated deficiency as regards members of GBP1,946,655.14. The Department accepted the disqualification undertaking from Kevin Patrick Donnelly on August 20, 2021, based on the following unfit conduct which solely for the purposes of the disqualification procedure was not disputed: * Causing and permitting MVH Haulage Services Ltd to submit inaccurate PAYE/NIC returns totalling GBP764,724.35, inaccurate Corporation Tax Returns by inaccurately claiming Capital Allowances totalling GBP380,552.08 and failing to pay a further sum of GBP130,274.28 resulting in a loss of monies properly due to the Crown from 2010/11. Causing and permitting MVH Haulage Services Ltd to retain a total of GBP1,275,550.07 due to the Crown as at the date of liquidation. By failing to submit PAYE / NIC returns and failing to submit accurate Corporation Tax Returns, MVH Haulage Services Ltd ultimately discriminated against the Crown as the Company was not paying as much PAYE / NIC and Corporation Tax as it should have paid, and therefore had more money available to fund the continued trading of the Company. * Failing to maintain and / or preserve and / or deliver up the books and records of MVH Haulage Services Ltd. * Causing and permitting MVH Haulage Services Ltd to fail to comply with the relevant legislation in that the annual accounts for 11 years of trading were not filed within the prescribed periods i.e. the years ending March 31, 2017, March 31, 2016, March 31, 2015, March 31, 2014, March 31, 2013, March 31, 2012, March 31, 2010, March 31, 2009, March 31, 2007, March 31, 2006, and March 31, 2005. * Causing and permitting MVH Haulage Services Ltd to fail to comply with the relevant legislation in that the annual returns for 10 years of trading were not filed within the prescribed periods i.e. the periods ending March 3, 2015, March 25, 2013, March 25, 2012, March 25, 2011, March 25, 2010, March 25, 2009, March 25, 2008, March 25, 2007, March 25, 2006 and March 25, 2005. The Department has accepted 16 Disqualification Undertakings in the financial year commencing April 1, 2021. QUADRATE CATERING: Covid Pandemic Lockdowns Prompt Administration ----------------------------------------------------------------- Sanjeeta Bains at BirminghamLive reports that the companies which own the franchise to Marco Pierre White Steakhouse and Hotel Indigo at The Cube has gone into administration. Advisory and restructuring firm Kroll has been appointed administrators of Quadrate Catering Ltd, which owns the franchise to the MPW Steakhouse at The Cube as well as Commercial Street Hotel Ltd, which owns the franchise to IHG's Hotel Indigo at The Cube, BirminghamLive relates. Both businesses remain open, BirminghamLive notes. The firm, as cited by BirminghamLive, said it had taken over control due to the financial impact to the businesses after the three lockdown and Tier Three restrictions over the usually busy Christmas period. No other Marco Pierre White branded restaurants have been impacted, BirminghamLive states. According to Companies House, Kroll was appointed as administrators on May 14, 2021, BirminghamLive discloses. A spokesman for Kroll told BirminghamLive: "Allan Graham and Matthew Ingram both of Kroll Advisory Ltd has been appointed Joint Administrators to Quadrade Catering Ltd and Commercial Street Hotel Ltd. "Both are managed by Black and White Hospitality Management Ltd, which is retaining control of the management. No other Marco Pierre White restaurants or Black and White Hospitality subsidiaries are impacted by the Administration of the leasehold companies at The Cube. "The decision to place the companies into administration was taken following the difficult trading conditions faced over the past year as a direct consequence of the Covid pandemic. For businesses in Birmingham, this was particularly difficult given the fact that the city itself remained in Tier 3 for an extended time period." THE COLLECTIVE: Enters Administration After Failing to Find Buyer ----------------------------------------------------------------- Olivia Konotey-Ahulu at Bloomberg News reports that The Collective, an operator of small apartments in London and New York that offer communal lifestyles for young urban professionals, has fallen into administration after failing to find a buyer. FTI Consulting has been appointed to assess potential options for the privately held firm following unsuccessful attempts to raise capital from investors and undertake a sale, Bloomberg relays, citing a statement from FTI on Sept. 16. Some of the firm's 62 employees will likely be dismissed in the coming weeks, Bloomberg discloses. The firm had appointed Credit Suisse Group AG to conduct a strategic review which could have led to a full or partial sale, Bloomberg reported in June. The nascent co-living market, with its small units and focus on shared amenities, has been hard hit by the pandemic as government restrictions forced operators to suspend some perks, limit mixing and stop all but essential travel, Bloomberg notes, The Collective's current portfolio includes properties in west London and the capital's Canary Wharf district, as well as the Paper Factory in Long Island City, New York, Bloomberg states. The statement said the pandemic has seen occupancy levels at The Collective slide, and the firm has faced delays in the development of non-operational assets, Bloomberg relays. London's popularity also continues to lag global cities such as New York in the wake of easing lockdown restrictions, with rents struggling to return to pre-Covid levels, according to Bloomberg. =============== X X X X X X X X =============== [*] BOOK REVIEW: Transnational Mergers and Acquisitions ------------------------------------------------------- Author: Sarkis J. Khoury Publisher: Beard Books Softcover: 292 pages List Price: $34.95 Order your personal copy today at http://is.gd/hl7cni Transnational Mergers and Acquisitions in the United States will appeal to a wide range of readers. Dr. Khoury's analysis is valuable for managers involved in transnational acquisitions, whether they are acquiring companies or being acquired themselves. At the same time, he provides a comprehensive and large-scale look at the industrial sector of the U.S. economy that proves very useful for policy makers even today. With its nearly 100 tables of data and numerous examples, Khoury provides a wealth of information for business historians and researchers as well. Until the late 1960s, we Americans were confident (some might say smug) in our belief that U.S. direct investment abroad would continue to grow as it had in the 1950s and 1960s, and that we would dominate the other large world economies in foreign investment for some time to come. And then came the 1970s, U.S. investment abroad stood at $78 billion, in contrast to only $13 billion in foreign investment in the U.S. In 1978, however, only eight years later, foreign investment in the U.S. had skyrocketed to nearly #41 billion, about half of it in acquisition of U.S. firms. Foreign acquisitions of U.S. companies grew from 20 in 1970 to 188 in 1978. The tables had turned an Americans were worried. Acquisitions in the banking and insurance sectors were increasing sharply, which in particular alarmed many analysts. Thus, when it was first published in 1980, this book met a growing need for analytical and empirical data on this rapidly increasing flow of foreign investment money into the U.S., much of it in acquisitions. Khoury answers many of the questions arising from the situation as it stood in 1980, many of which are applicable today: What are the motives for transnational acquisitions? How do foreign firms plans, evaluate, and negotiate mergers in the U.S.? What are the effects of these acquisitions on competition, money and capital markets; relative technological position; balance of payments and economic policy in the U.S.? To begin to answer these questions, Khoury researched foreign investment in the U.S. from 1790 to 1979. His historical review includes foreign firms' industry preferences, choice of location in the U.S., and methods for penetrating the U.S. market. He notes the importance of foreign investment to growth in the U.S., particularly until the early 20th century, and that prior to the 1970s, foreign investment had grown steadily throughout U.S. history, with lapses during and after the world wars. Khoury found that rates of return to foreign companies were not excessive. He determined that the effect on the U.S. economy was generally positive and concluded that restricting the inflow of direct and indirect foreign investment would hinder U.S. economic growth both in the short term and long term. Further, he found no compelling reason to restrict the activities of multinational corporations in the U.S. from a policy perspective. Khoury's research broke new ground and provided input for economic policy at just the right time. Sarkis J. Khoury holds a Ph.D. in International Finance from Wharton. He teaches finance and international finance at the University of California, Riverside, and serves as the Executive Director of International Programs at the Anderson Graduate School of Business. ********* 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 * * *