---

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

                          E U R O P E

          Thursday, September 30, 2021, Vol. 22, No. 190

                           Headlines



C R O A T I A

DALEKOVOD: Competition Authority Allows Intended Concentration


D E N M A R K

WELLTEC A/S: Moody's Hikes CFR to B2 & Rates New $325MM Notes B2
WELLTEC INT'L: S&P Alters Outlook on 'B' ICR to Stable


F R A N C E

ALTICE FRANCE: Moody's Rates New $3BB Senior Secured Notes 'B2'
UNIFIN (UNITHER): S&P Alters Outlook to Negative & Affirms 'B' ICR


G R E E C E

INTRALOT INC: Moody's Rates New $242MM Notes Due 2025 'B2'


I C E L A N D

ISLANDSBANKI HF: S&P Rates New Perpetual Capital Notes 'BB-'


I R E L A N D

BLACK DIAMOND 2017-2: Moody's Affirms B3 Rating on Class F Notes
CARLYLE EURO 2021-2: Fitch Gives 'B-(EXP)' Rating to Class E Debt
SOVCOMBANK PJSC: Fitch Gives BB+(EXP) on Upcoming USD Eurobonds


I T A L Y

ALI HOLDING: S&P Assigns Preliminary 'BB+' ICR, Outlook Stable
ALITALIA: Interested Entities Invited to Submit Bids for Brand
RED & BLACK AUTO: Moody's Assigns (P)Ba2 Rating to Class D Notes


K A Z A K H S T A N

EURASIAN BANK: Moody's Affirms 'B2' LongTerm Deposit Ratings


L U X E M B O U R G

CONSOLIDATED ENERGY: S&P Rates New Senior Unsecured Notes 'B+'
MODULAIRE INVESTMENTS 2: S&P Assigns Preliminary 'B' ICR
PARTICLE INVESTMENTS: Moody's Alters Outlook on B3 CFR to Positive


M A C E D O N I A

TOPLIFIKACIJA: Adora Engineering Offers to Buy Assets


N E T H E R L A N D S

DOMI BV 2019-1: Moody's Affirms Caa3 Rating on Class X Notes


P O R T U G A L

ULISSES FINANCE 2: Moody's Assigns Ba3 Rating to EUR3.7MM E Notes


S P A I N

GRIFOLS ESCROW: Moody's Rates New EUR2BB Sr. Unsecured Notes 'B3'
GRIFOLS SA: Fitch Assigns First Time 'BB-' LT IDR, Outlook Stable
LORCA HOLDCO: Moody's Lowers CFR to B2 on Euskaltel Transaction
LORCA TELECOM: S&P Lowers ICR to 'B', Outlook Stable
TDA 29 FTA: Fitch Affirms CCC Rating on Class D Debt



S W E D E N

HEIMSTADEN AB: Fitch Publishes First Time 'BB+' LongTerm IDR
TELEFONAKTIEBOLAGET LM: Moody's Withdraws (P)Ba1 EMTN Rating


T U R K E Y

ANADOLU ANONIM: Fitch Affirms BB Insurer Financial Strength Rating
KUVEYT TURK: Fitch Affirms 'B+' Foreign Currency IDR
TURKIYE FINANS: Fitch Affirms 'B+' Foreign Currency IDR
VAKIF KATILIM: Fitch Affirms 'B' Foreign Currency IDR


U N I T E D   K I N G D O M

BCP V MODULAR III: Fitch Assigns 'B(EXP)' LT IDR, Outlook Stable
BELLIS ACQUISITION: Fitch Raises Sr. Secured Ratings to 'BB+'
EUROSAIL PLC 2006-1: Moody's Hikes Rating on 2 Tranches to Ba1
GEMGARTO PLC 2018-1: Moody's Ups Rating on Class F Notes to B2
IGLOO: Halts Trading Amid Surging Global Gas Prices

JABERO CONSULTING: Bought Out of Administration by WorksiteCloud
LONDON CAPITAL: FCA Not Approached by Whistleblowers
LORCA HOLDCO: Fitch Affirms BB Rating on Term Loan B
NEWGATE FUNDING 2007-2: Fitch Lowers Rating on Class F Debt to CCC
OCADO GROUP: Fitch Gives 'BB-(EXP)' Rating to New GBP400MM Notes

OCADO GROUP: Moody's Affirms B2 CFR & Rates New GBP400MM Notes B2
OSB GROUP: Fitch Gives 'B+(EXP)' Rating to Perpetual AT1 Notes
TOGETHER ASSET 2020-1: Moody's Ups Rating on Cl. E Notes From Ba2
[*] Fitch Puts 20 UK RMBS Ratings on Watch Negative

                           - - - - -


=============
C R O A T I A
=============

DALEKOVOD: Competition Authority Allows Intended Concentration
--------------------------------------------------------------
Annie Tsoneva at SeeNews reports that Croatian electrical equipment
manufacturer Koncar Elektroindustrija said on Sept. 29 that the
country's competition authority AZTN has allowed an intended
concentration resulting from indirect control of local power
transmission equipment manufacturer Dalekovod being jointly
acquired by Koncar and Maltese company Construction Line Limited.

Koncar said in a filing to the Zagreb bourse on Sept. 28, AZTN
assessed it was reasonable to conclude that the relevant
concentration is not prohibited under the Competition Act and
consequently, the notified concentration is considered permissible,
SeeNews relates.

On June 30, the shareholders of Dalekovod approved a proposal for
the company's financial restructuring made by Koncar and
Construction Line Ltd., SeeNews recounts.

According to SeeNews, the proposal envisaged cutting Dalekovod's
share capital to HRK2.5 million (US$388,000/EUR333,000) from
HRK247.2 million to cover earlier losses, only to further increase
it to up to HRK412.5 million in order to raise funding to cover the
company's debt to creditors under a pre-bankruptcy settlement
agreement concluded in January 2014.

As a result of the initial capital cut approved by the Dalekovod's
shareholders on June 30, the company made a reverse stock split in
July by consolidating every 100 shares into 1, and later the same
month offered to potential investors new ordinary shares at their
face value of 10 kuna each, SeeNews states.

In late July, Koncar said its unit Napredna Energetska Rjesenja
will contribute HRK310 million in cash to Dalekovod's capital
increase, SeeNews relays.  Founders of Zagreb-based Napredna
Energetska Rjesenja are Construction Line and Koncar's fully-owned
subsidiary Koncar Ulaganja.

Back then, Dalekovod said separately that demand for shares from
the new issue exceeded the maximum amount planned in the first and
second round of subscription, SeeNews notes.

However, according to some market participants, as a result, the
reverse stock split and the following capital hike, some current
investors' stakes in the company would be reduced to a low single
digit percentage, which does not resonate well with these
investors, SeeNews states.




=============
D E N M A R K
=============

WELLTEC A/S: Moody's Hikes CFR to B2 & Rates New $325MM Notes B2
----------------------------------------------------------------
Moody's Investors Service upgraded Welltec A/S's corporate family
rating to B2 from B3 and its probability of default rating to B2-PD
from B3-PD. Moody's also assigned a B2 instrument rating to the
proposed guaranteed $325 million senior secured notes due 2026
issued by Welltec International APS. Upon completion of the
refinancing, Moody's expects to withdraw the B3 instrument rating
on the $340 million Backed senior secured notes due 2022.

The outlook on all ratings is stable.

RATINGS RATIONALE

The rating action, subject to execution of the proposed
transaction, reflects evidence of shareholder commitment and
Welltec's strong track record of successfully managing volatile oil
and gas end markets, which will lead to an improved capital
structure. Moody's anticipates debt reduction facilitated by the
$50 million equity contribution and continued improvement in
operating performance over the next 12-18 months will result in a
decline in leverage towards 4x debt-to-EBITDA from 6.3x as of June
30, 2021. Moody's also expects interest coverage to improve to over
3x EBITDA-to-interest in the next 12-18 months from 2.2x as of June
2021. Welltec's strong relationship with its lenders, evidenced by
the covenant reset in 2020 / 2021, further supports the upgrade.

Demand for Welltec's services rose materially in the past 6 months,
supported by the recovery in oil & gas prices in 2021. The company
demonstrated resilience during the Covid crisis and swiftly adapted
its cost base, maintaining a stable EBITDA margin at 33% in 2020
despite a 14% decline in revenue.

Welltec's B2 CFR primarily reflects: (1) its leading technological
advantage in robotics for well intervention resulting in a leading
market share in that segment; (2) strong geographical
diversification with revenues from both onshore and offshore
markets; (3) long lasting relationship with its customers well
diversified among international oil companies, national oil
companies and independent E&Ps; (4) high EBIT margin of around 20%,
comparing favorably to most of its peers; and (5) highly supportive
shareholder.

The CFR is constrained by Welltec's: (1) limited scale and product
range (expected sales of around $216 million in the last 12 months
ended June 30, 2021), particularly when compared to the competition
from larger oilfield services specialists; (2) limited visibility
into a sustainable recovery in volumes and pricing; (3) short lead
times ranging from several weeks to maximum three months leading to
potential revenue volatility, and (4) a very high interest bill due
to the reduced but still relatively high interest coupon expected
for the refinancing.

LIQUIDITY

Welltec's liquidity pro forma for the refinancing is adequate with
$29 million of cash on balance and a fully available $40 million
RCF maturing in September 2026. For 2022 the rating agency expects
Welltec to generate funds from operations of around $50-$55
million, which will comfortably cover all cash outflows related to
an expected moderate increase in working capital and capital
spending of around $35-$40 million. Absent dividend payments in
2022, the company is likely to generate moderately positive free
cash flow (FCF) at around $10 million.

Upon the completion of the announced refinancing, the company will
have no material debt maturities prior to 2026 when both the
proposed $325 million guaranteed senior secured bond and $40
million RCF come due. Under Moody's base case scenario, the company
will maintain comfortable headroom under its 2.0x EBITDA / interest
expense maintenance covenant set on its RCF.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook reflects Moody's expectations that Welltec's
operating performance will continue to recover back to pre-crisis
levels over the next 12-18 months such that EBITDA growth results
in leverage reduction and the company generates positive free cash
flow. Furthermore, it takes into account Welltec's strong operating
track record particular in 2020 and the downturn in oil & gas
prices in 2015-2017.

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

An upgrade of Welltec's rating could be considered if (1) revenue
and operating performance continue to recover meaningfully on the
back of improving E&P spending in the oil & gas industry; (2) debt
to EBITDA falls well below 4.0x on a sustained basis; (3)
EBITDA/interest expense ratio improves to above 4.0x; and (4) the
company builds a comfortable liquidity cushion supported by
sustained positive free cash flow generation resulting in FCF/ debt
improving to high single digits.

A downgrade could be considered if (1) Moody's adjusted debt to
EBITDA remains above 5.0x on a sustained basis; (2) adjusted EBIT
margins fall below 15% evidencing a deterioration in its
competitive positioning; (3) adj EBITDA/interest expense ratio
declines to below 3.0x; and (4) the company's liquidity position
weakens, notably with the company not being able to return to a
positive free cash flow generation or tightening covenant headroom
under the company's RCF.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS

Governance considerations for Welltec were a driver of the rating
action. They include the recent change in the shareholder structure
as the company's founder Jorgen Hallundbaek retired from the CEO
position and the board of directors and sold his stake to 7
Industries Holding BV and Exor NV. The transaction and the capital
increase of $50 million underlines the commitment of 7 Industries
Holding BV and Exor NV to Welltec. Both have been invested in the
company for several years and in Moody's understanding have
material financial resources available. Generally, Welltec has a
strong track record of sound management and has demonstrated
effective cost & liquidity management through extraordinarily
difficult periods for the industry in 2020 and 2015-2018.

Environmental considerations for Welltec include the risk that
environmental concerns and regulation result in declining oil & gas
exploration and production investments over the longer term, when
global hydrocarbon demand is forecasted to decline. Moody's
monitors this closely, noting that Welltec's well intervention and
completion products are more environmentally friendly than
conventional methods, including the usage of chemicals to clean
wells or cement to complete drill holes.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Oilfield
Services published in August 2021.

COMPANY PROFILE

Headquartered in Allerod, Denmark, Welltec A/S (Welltec) is an oil
and gas services company specialising in well interventions and
completion products. Welltec operates globally and is a leading
provider of well intervention services using robotic technology.
The company recently expanded into well completion products and
solutions.

Welltec is a privately held company, whose main shareholders are 7
Industries Holding BV and Exor NV (53% owned by Giovanni Agnelli
BV). Both increased their ownership in Welltec in June 2021 to
47.6% each, by buying the company's founder Jorgen Hallundbaek
stake. The remaining shares are held by employees of the company.
In the last 12 months ended June 30, 2021, the company reported
$216 million of revenue and $63 million of Moody's-adjusted EBITDA.

WELLTEC INT'L: S&P Alters Outlook on 'B' ICR to Stable
------------------------------------------------------
S&P Global Ratings revised the outlook on Welltec International ApS
(Welltec) to stable from negative and affirmed its 'B-' long-term
issuer credit rating on Welltec and assigned its 'B-' rating to the
proposed bond.

The stable outlook reflects the gradual recovery in Welltec's
operating environment, which, together with a comfortable liquidity
profile, will allow it to focus on growth in the next 12 months.

The refinancing eliminates previous liquidity concerns, which,
together with improved market conditions, will allow the company to
focus on growth The looming November 2022 maturity of the $340
million senior secured notes previously posed a tangible risk to
the maintenance of the 'B-' rating. S&P said, "Now with a new
capital structure in place, $325 million of senior secured notes
and $40 million of financial leases, as well as debt reduction
through the shareholders' $50 million equity injection, we see the
company on a stronger footing. Based on our EBITDA projection of
EUR90 million-EUR100 million in 2021 and 2022, we see leverage of
3.5x-4.0x, which is in line with our threshold for the current
rating. At the same time, the company's cash flow generation
remains subdued with sizeable capital expenditure (capex) of about
EUR35 million-EUR40 million a year. Although the equity injection
from majority shareholders Exon (48%) and 7Industries (48%) was
relatively modest, we view their continued support as having
positively contributed to the success of the refinancing. This
action follows the purchase of the founder's shares (50%) earlier
this year. Although we don't factor explicit support from the
shareholders, they are a supporting factor, potentially mitigating
a downside scenario for the rating."

Momentum from a strong second quarter should carry to year end,
while 2022 could potentially see further upside based on price
increases. After a weak 2020, Welltec is now seeing gradual
recovery from the COVID-19 induced economic slowdown. Based on
first-half EBITDA of $48 million (close to first-half 2020), we
expect full-year 2021 EBITDA of just below $100 million, similar to
that seen in 2019. Beyond 2021, growth will be driven by the
reinvestment needs of oil majors, after a prolonged period of
spending cuts, and production optimization at existing fields.
Moreover, the company's investment in new applications (such as
Well Stroker SRO 2.0), as well as the absence of similar products
from peers, are also supportive of growth in the coming years. S&P
notes the Completion Solutions division, which grew at a compound
annual rate of 25% between 2016 and 2021 (projected) is now
expanding its portfolio to meet demand for carbon capture storage
(CCS) systems, as demonstrated by Welltec's involvement in project
Greensand (a Danish government-led initiative). S&P expects
environmental, social, and governance (ESG)-related considerations
to drive further demand for this division's products and services.

Further upside to the rating could come from reaching and
maintaining EBITDA above $100 million.Should market conditions
remain supportive, with EBITDA of $90 million-$120 million, S&P
would expect Welltec to generate about $15 million-$30 million in
free operating cash flow (FOCF). This would allow for debt
repayments, since we do not expect the company to deviate from its
overall prudent financial policy (no dividends, no major
acquisitions, and flexible capex).

The stable outlook reflects the gradual recovery in Welltec's
operating environment, which, together with a comfortable liquidity
profile, will allow the company to focus on growth in the next 12
months.

S&P said, "Under our base-case scenario, assuming a Brent oil price
of $65 per barrel for the rest of the year, we expect adjusted
EBITDA of $90 million-$95 million in 2021, positive FOCF of up to
$15 million, and adjusted debt to EBITDA of about 4.0x. Unless
there is a U-turn in the oil industry, these results will further
improve in 2022.

"With the current EBITDA level (just below EUR100 million), we view
adjusted debt to EBITDA of 4.0x-6.0x through the cycle as rating
commensurate. This should support positive but still-subdued cash
flows, due to the company's plans to increase capex. Once Welltec
reports sustainable EBITDA above EUR100 million, we could relax our
target ratios for the current rating, subject to the company's cash
flow generation and cash on the balance sheet."

S&P could downgrade Welltec if it views its capital structure as
unsustainable. This could be the case if:

-- Bulky maturities, or covenant breaches translate into weak
liquidity.

-- Several years of a negative FOCF lead to a spike in debt from
current operations or from large debt-funded acquisitions,
excessive capex, or dividend payments.

S&P believes that the current shareholder structure somewhat
reduces the chance of a potential downside scenario.

Over the medium term, a reassessment of the company's business risk
profile could cap or even pressure the rating. This could happen if
the company does not increase its market share and its competitors
make progress in narrowing the technological gap.

Although an upgrade is unlikely in the coming 12 months, S&P may
consider it if the company achieves:

-- Minimum sustainable EBITDA of $100 million or more.

-- Adjusted debt to EBITDA of 3.0x-5.0x through the cycle.

-- A track record of meaningful FOCF that would support a
reduction in absolute debt.

-- Adequate liquidity on a consistent basis.




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

ALTICE FRANCE: Moody's Rates New $3BB Senior Secured Notes 'B2'
---------------------------------------------------------------
Moody's Investors Service has assigned a B2 rating to the proposed
$3 billion equivalent backed senior secured notes (split into $ and
EUR) due 2029 to be issued by Altice France S.A. ("Altice France"
or "the company"), a subsidiary of Altice France Holding S.A.
("Altice France Holding"). The outlook is negative.

Proceeds from this debt issuance will be mainly used to repay
Altice France's $2.3 billion outstanding guaranteed senior secured
notes maturing in 2026, while the remaining part will be used to
fund M&A.

"The refinancing will marginally increase Altice France's weighted
average debt maturity to 5.9 years from 5.5 years, and provide
additional interest savings of around EUR30 million," says Ernesto
Bisagno, a Moody's VP-Senior Credit Officer and lead analyst for
Altice.

"However, Altice France Holding remains weakly positioned in the
rating category due its high Moody's adjusted leverage and weak
free cash flow generation," added Mr Bisagno.

RATINGS RATIONALE

The B2 rating recognizes the company's (1) position as one of the
leading convergent companies in the competitive French market; (2)
scale and ranking as the second-largest telecom operator in France;
(3) integrated business profile; (4) improved operating performance
after years of revenue decline; and (5) improved liquidity, with no
significant debt maturities until 2025.

The rating is constrained by (1) the company's highly leveraged
capital structure, with Moody's adjusted debt/EBITDA for Altice
France Holding at 5.8x in 2020 (6.3x pro forma for the Hivory
disposal); (2) its weak free cash flow generation; (3) the
complexity of the group structure; (4) the competitive, although
easing, nature of the French telecom market; and (5) stretched
management resources, given the scale of the group.

Moody's expects Altice France Holdings' EBITDA to continue to grow
in the mid-single-digit percentage range in 2021-22 driven by ARPU
improvements in mobile, a positive product mix with stronger
contributions from residential fixed-line subscribers and
additional business services revenue on the back of construction
and maintenance fees paid by SFR FTTH (the recently acquired Covage
will provide 12 months contribution from the construction activity
by 2022). Profits will also benefit from additional cost savings
and a recovery in economic conditions after the coronavirus
crisis.

Despite expectations of increased earnings, the rating agency
expects FCF to be broadly neutral in 2021 because of the spectrum
payments (or marginally negative including funding outside the
restricted group mainly related to Altice TV); while there is
potential for improvement in FCF in 2022, driven by higher earnings
and lower spectrum outflows.

Moody's expects Altice France Holding's Moody's-adjusted
debt/EBITDA to remain at around 6.2x in 2021 and marginally decline
towards 6.0x in 2022, leaving the company weakly positioned in its
rating category.

LIQUIDITY

The company's liquidity is adequate, with no major debt maturities
until 2025, and Moody's expectation that FCF will improve over
2021-22.

Altice France Holding had cash of EUR365 million at June 2021, and
EUR964 million of committed undrawn revolving credit facilities
(RCFs) maturing in 2026. However, the net senior leverage at June
2021 (based on annualized last two quarters "L2QA") was very close
to 4.5x, the springing covenant for drawings above 40%, leaving
very limited headroom for additional drawings.

STRUCTURAL CONSIDERATIONS

The B2 rating of Altice France's proposed backed senior secured
notes is at the same level as Altice France Holding's B2 corporate
family rating (CFR). This reflects the pari-passu ranking with
Altice France's pre-existing guaranteed senior secured notes and
the senior secured bank credit facilities (including the RCF).

RATIONALE FOR NEGATIVE OUTLOOK

The negative outlook reflects (1) the company's high leverage; (2)
the highly competitive market conditions, with only a short track
record of stabilisation in operating performance; (3) the complex
financial structure of the group; and (4) its weak FCF generation.

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

Upward pressure on the ratings is unlikely in the short term, but
may develop over time if Altice France Holding maintains strong
liquidity with no refinancing risk and demonstrates a sustained
improvement in its underlying revenue and key performance
indicators (KPIs, for example, churn and ARPU), with growing EBITDA
in main markets, leading to an improvement in credit metrics, such
as: (1) Moody's-adjusted leverage sustained below 5.0x; and a (2)
significant improvement in FCF on a consistent basis.

The ratings could be downgraded if the company's underlying
operating performance weakens, or debt increases further, leading
to a deterioration in the group's credit fundamentals, such as: (1)
Moody's-adjusted leverage not returning below 5.5x; and (2) FCF
generation remaining negative. In addition, any deviation from
management's commitment to deleverage or signs of deterioration in
liquidity will lead to pressure on the ratings.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was
Telecommunications Service Providers published in January 2017.

LIST OF AFFECTED RATINGS

Issuer: Altice France S.A.

Assignments:

BACKED Senior Secured Regular Bond/Debenture, Assigned B2

COMPANY PROFILE

Altice France Holding is a leading telecom operator in France. The
company reports its results under three segments: business to
consumer (B2C; 63% of revenue), business to business (B2B; 33%) and
media (4%). In 2020, Altice France reported revenue and adjusted
EBITDA (as defined by the company and pro forma for the group
reorganisation) of EUR10.9 billion and EUR4.3 billion,
respectively.


UNIFIN (UNITHER): S&P Alters Outlook to Negative & Affirms 'B' ICR
------------------------------------------------------------------
S&P Global Ratings revised the outlook on pharmaceutical company
UniFin (Unither Laboratory Amiens) to negative from stable, and
affirmed its 'B' rating on the company.

The negative outlook indicates that S&P could downgrade Unither
over the next 12-18 months if its sales fail to bounce back and its
adjusted debt-to-EBITDA ratio remains close to 5x and FOCF remained
negative for an extended period of time, notably in 2023.

Unither's operating performance in the first half of 2021 was
weaker than S&P expected, due to a significant drop in its order
book. Demand fell in part due to overstocking by its main customers
in 2020 as a response to the COVID-19 pandemic, but also due to a
reduced need for treatments, since COVID-19-containment measures,
such as face masks, lockdowns, and physical distancing, brought
down contagion among patients. The blow-fill-seal (BFS) respiratory
and liquids over-the-counter segments were particularly hard hit by
the drop in demand. Patients postponing hospital visits due to fear
of contracting COVID-19, or officials asking people to stay home
due to the high number of COVID-19 patients in hospitals also
contributed to fewer inhalation treatments and a fall in demand. In
China, where 95% of asthma treatments are done in hospitals,
Unither's operations suffered immensely. As a result, as of July
2021, year-to-date (YTD) sales were 21% lower than for the same
period last year. The lack of revenue growth ultimately translated
into lower-than-expected EBITDA, since the company has a largely
fixed cost base, with YTD reported EBITDA as of the same date 47%
below that for the same period last year.

S&P said, "We have revised downward our forecasts for Unither over
the next two years, as a result of weaker results and limited
visibility of recovery over the next year.Specifically, we revised
downward our sales growth forecast to negative 1% over the next two
years, from 6.9% previously. We also expect EBITDA margins will
remain flat at about 20%, compared with our previous expectation of
an improvement to 24%. As a result, over the next two years, we
expect the group's FOCF will remain close to zero, with adjusted
debt to EBITDA remaining above 5x.

"This reflects that the timing and materialization of a strong
recovery in sales are uncertain. That said, we consider that the
majority of the operational impact that Unither has experienced
over 2021 relates to the pandemic and is therefore temporary. We do
not believe that there is a major structural change in the
company's operating market or core business. Additionally, although
the group's order book seems to be recovering, we note that
operating risks have increased and consider its year-end cash
balance limited, given the highly uncertain environment."

Continuous capex investments will weigh on liquidity. Despite
COVID-19 affecting the group's operating performance in the first
half of 2021, Unither plans to continue with its investments, since
the group aims to have sufficient manufacturing capabilities to
cater for future demand given the significant time lag between the
initial machinery investment and when the machinery is fully
operational. Furthermore, in 2021, the group will disburse about
EUR15 million-EUR20 million for an acquisition in China to expand
its operations there, which will lead to a year-end cash balance of
about EUR19 million. S&P said, "We consider this amount to be
limited, given the highly uncertain operating environment. That
said, the group has a fully undrawn EUR25 million revolving credit
facility (RCF) from which it can draw up to EUR8.0 million without
triggering any covenants. We consider that this provides Unither
with sufficient flexibility thus reducing liquidity risk."

Unither's business risk profile continues to be limited by its
modest scale, focus on a single BFS technology, and limited product
and geographic diversity. These headwinds are partly mitigated by
Unither's leading position in its addressable market, with a
favorable margin compared with that of industry peers, good track
record of service quality and regulatory compliance, and positive
underlying market dynamics.

S&P said, "The negative outlook indicates that we could downgrade
Unither over the next 12-18 months if market dynamics remained
challenging and the company fails to increase visibility over its
order book and improve profitability, translating into an adjusted
debt-to-EBITDA ratio of close to 5x. We could also lower the rating
if the group's FOCF remained negative for an extended period, due
to higher-than-expected working capital outflows or capex needs, or
if liquidity risks increase due to further acquisitions.

"We could revise the outlook to stable if Unither delivers a strong
operational performance, with a marked increase in its order books
and if the visibility of its future sales increases such that its
adjusted debt to EBITDA remained close to 5x, supported by positive
FOCF generation for a sustained period."




===========
G R E E C E
===========

INTRALOT INC: Moody's Rates New $242MM Notes Due 2025 'B2'
----------------------------------------------------------
Moody's Investors Service assigned a B2 instrument rating to the
new USD242 million guaranteed senior secured PIK toggle notes due
2025 and issued by Intralot, Inc. The notes have been issued as
part of the exchange offer of the outstanding EUR250 million backed
senior unsecured notes due 2021 and issued by Intralot Capital
Luxembourg S.A. The outlook is stable.

RATINGS RATIONALE

The new USD242 million guaranteed senior secured PIK toggle notes
due 2025 are at the Intralot, Inc. level, the US subsidiary of the
consolidated group, and part of a restricted group, which is
ring-fenced from the Rest of the World group.

Intralot, Inc. is the largest EBITDA contributor of the
consolidated group and will generate most of the group's
consolidated cash flow. The company's North American subsidiaries
reported EUR51 million of EBITDA in 2020 and EUR41 million in H1
21, representing around two thirds of consolidated EBITDA. At the
same time, Intralot, Inc. will only have issued the USD242 million
guaranteed senior secured PIK toggle notes, which roughly represent
a third of the group's consolidated debt.

The rating action therefore reflects the higher credit quality of
Intralot, Inc. on a standalone basis with a Moody's-adjusted
leverage forecast below 4.0x in December 2021 and a positive free
cash flow generation of EUR25-30 million in 2021.

The company's recent results evidence the positive trajectory in
the company's underlying business as it almost doubled EBITDA in
North America in the first half of 2021, compared to the same
period last year. Furthermore, there are no contracts up for
renewal until 2024, which gives a certain degree of revenue
visibility and will improve earnings stability.

Intralot S.A.'s rating remains constrained by the complexity of its
capital structure with a high reliance on the cash flows from the
company's US operations and reliance on the operating services that
the company's Rest of the World business provides.

LIQUIDITY

Moody's considers Intralot, Inc.'s liquidity to be adequate. The
company reported EUR19 million of cash and cash equivalents as of
June 2021 and Moody's expect EUR25-30 million of free cash flow
generation in 2021.

Intralot S.A.'s cash flow will be primarily generated by Intralot,
Inc. as Moody's projects that the company's Rest of the World
restricted group will continue to burn cash in 2021 and 2022.
Therefore, Moody's estimates that the servicing of the 2024 backed
senior unsecured notes will be heavily reliant on cash being
upstreamed from Intralot, Inc. to Intralot Global Holdings B.V..
This is allowed by the 2025 PIKs documentation and is subject to a
3.75x net leverage test and a USD20 million minimum liquidity
test.

Moody's notes that there is no revolving credit facility nor
financial covenants.

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

Positive rating pressure on the corporate family rating (CFR) could
arise if:

The company successfully refinances or repays its 2024 SUNs debt
maturity, while keeping adequate liquidity;

Moody's-adjusted gross leverage remains sustainably below 6.0x and
leverage on a proportionate basis declines below 8.0x;

Moody's-adjusted FCF returns to being sustainably positive across
the two restricted groups.

Negative rating pressure on the CFR could arise if:

Operating performance is weaker than Moody's expectations such
that free cash flow remains negative and liquidity becomes weak.

The company looks unlikely to be able to refinance or repay the
2024 SUNs and there are concerns about the sustainability of the
capital structure or a further restructuring;

PRINCIPAL METHODOLOGY

The principal methodology used in this rating was Gaming published
in June 2021.

COMPANY PROFILE

Headquartered in Athens, Intralot S.A. is a global supplier of
integrated gaming systems and services. The company designs,
develops, operates and supports customized software and hardware
for the gaming industry and provides technology and services and
state licensed lottery and gaming organizations worldwide. It
operates a diversified portfolio across 41 jurisdictions and is
listed on the Athens stock exchange.




=============
I C E L A N D
=============

ISLANDSBANKI HF: S&P Rates New Perpetual Capital Notes 'BB-'
------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue rating to the proposed
issuance of non-cumulative, subordinated, low-trigger, Additional
Tier 1 (AT1) perpetual capital notes by Iceland-based bank
Islandsbanki hf (BBB/Stable/A-2). The issue rating is subject to
S&P's review of the notes' final documentation. This is the bank's
first issuance of AT1 notes.

In accordance with S&P's criteria for hybrid capital instruments,
"General Criteria: Hybrid Capital: Methodology And Assumptions,"
published July 1, 2019, on RatingsDirect, the 'BB-' issue rating
reflects its analysis of the proposed notes and Islandsbanki's
'bbb' stand-alone credit profile (SACP).

To derive the issue rating on the proposed notes, S&P notch down
from its SACP on Islandsbanki. The resulting issue rating is four
notches below the SACP, consisting of:

-- One notch because the notes are contractually subordinated;

-- Two notches to reflect the notes' discretionary coupon payments
and regulatory Tier 1 capital status; and

-- One notch because the notes contain a contingent capital clause
leading to a temporary write-down.

Although the principal is subject to conversion if the bank's
Common Equity Tier 1 ratio falls below 5.125%, S&P sees this as a
gone-concern trigger that does not pose additional default risk.
Islandsbanki's AT1 notes are also at risk of coupon nonpayment if
the bank has insufficient available distributable items or breaches
its capital requirements.

Once Islandsbanki has confirmed that the notes are part of its
regulatory Tier 1 capital base, S&P would expect them to qualify as
having intermediate equity content under its criteria. This
reflects our understanding that the notes:

-- Are perpetual regulatory Tier 1 capital instruments with a call
date that it expects to be approximately five years from issuance;

-- Have no step-up clause; and

-- Can absorb losses on a going-concern basis through the
nonpayment of coupons, which is fully discretionary.

S&P said, "We already envisaged this hybrid issuance and the bank's
current capital optimization in our medium-term forecasts, and the
notes do not materially alter our projections for Islandsbanki's
capital. Specifically, we expect the bank's risk-adjusted capital
ratio to remain between 16.5% and 17.5% in the next two years."




=============
I R E L A N D
=============

BLACK DIAMOND 2017-2: Moody's Affirms B3 Rating on Class F Notes
----------------------------------------------------------------
Moody's Investors Service has upgraded the rating on the following
notes issued by Black Diamond CLO 2017-2 Designated Activity
Company:

EUR56,000,000 Class B Senior Secured Floating Rate Notes due 2032,
Upgraded to Aa1 (sf); previously on Jun 23, 2020 Affirmed Aa2 (sf)

Moody's has also affirmed the ratings on the following notes:

EUR142,000,000 Class A-1 Senior Secured Floating Rate Notes due
2032, Affirmed Aaa (sf); previously on Jun 23, 2020 Affirmed Aaa
(sf)

USD55,800,000 Class A-2 Senior Secured Floating Rate Notes due
2032, Affirmed Aaa (sf); previously on Jun 23, 2020 Affirmed Aaa
(sf)

EUR30,000,000 Class A-3 Senior Secured Fixed Rate Notes due 2032,
Affirmed Aaa (sf); previously on Jun 23, 2020 Affirmed Aaa (sf)

USD15,000,000 Class A-4 Senior Secured Fixed Rate Notes due 2032,
Affirmed Aaa (sf); previously on Jun 23, 2020 Affirmed Aaa (sf)

EUR30,900,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2032, Affirmed A2 (sf); previously on Dec 8, 2020
Upgraded to A2 (sf)

EUR23,000,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2032, Affirmed Baa3 (sf); previously on Jun 23, 2020
Downgraded to Baa3 (sf)

EUR18,000,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2032, Affirmed Ba3 (sf); previously on Jun 23, 2020
Downgraded to Ba3 (sf)

EUR12,100,000 Class F Senior Secured Deferrable Floating Rate
Notes due 2032, Affirmed B3 (sf); previously on Jun 23, 2020
Downgraded to B3 (sf)

Black Diamond CLO 2017-2 Designated Activity Company, issued in
December 2017, is a collateralised loan obligation (CLO) backed by
a portfolio of mostly high-yield senior secured European and US
loans. The portfolio is managed by Black Diamond CLO 2017-2
Adviser, L.L.C.. The transaction's reinvestment period will end in
January 2022.

RATINGS RATIONALE

The rating upgrade on the Class B notes is primarily a result of
the benefit of the shorter period of time remaining before the end
of the reinvestment period in January 2022.

In light of reinvestment restrictions during the amortisation
period, and therefore the limited ability to effect significant
changes to the current collateral pool, Moody's analysed the deal
assuming a higher likelihood that the collateral pool
characteristics would maintain an adequate buffer relative to
certain covenant requirements. In particular, Moody's assumed that
the deal will benefit from a shorter amortisation profile than it
had assumed at the last rating action in December 2020.

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers.

In its base case, Moody's used the following assumptions:

Performing par and principal proceeds balance: EUR318.5m and
USD88.4 m after adjusting for negative cash

Defaulted Securities: 0

Diversity Score: 59

Weighted Average Rating Factor (WARF): 3080 for EUR denominated
assets and 3554 for the USD denominated assets

Weighted Average Life (WAL): 4.8 years

Weighted Average Spread (WAS) (before accounting for Euribor
floors): 3.6% for EUR denominated assets and 4.9% for USD
denominated assets

Weighted Average Coupon (WAC): 4.4% for EUR denominated assets and
10.1% for USD denominated assets

Weighted Average Recovery Rate (WARR): 45.8%

Par haircut in OC tests and interest diversion test: none

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate on future
defaults is based primarily on the seniority of the assets in the
collateral pool. In each case, historical and market performance
and a collateral manager's latitude to trade collateral are also
relevant factors. Moody's incorporates these default and recovery
characteristics of the collateral pool into its cash flow model
analysis, subjecting them to stresses as a function of the target
rating of each CLO liability it is analysing.

Methodology Underlying the Rating Action:

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

Counterparty Exposure:

The rating action took into consideration the notes' exposure to
relevant counterparties, such as account bank provider, using the
methodology "Moody's Approach to Assessing Counterparty Risks in
Structured Finance" published in May 2021. Moody's concluded the
ratings of the notes are not constrained by these risks.

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

This transaction is subject to a high level of macroeconomic
uncertainty, which could negatively affect the ratings on the
notes, in light of uncertainty about credit conditions in the
general economy. In particular, the length and severity of the
economic and credit shock precipitated by the global coronavirus
pandemic will have a significant impact on the performance of the
securities. CLO notes' performance may also be impacted either
positively or negatively by: (1) the manager's investment strategy
and behaviour; and (2) divergence in the legal interpretation of
CDO documentation by different transactional parties because of
embedded ambiguities.

Additional uncertainty about performance is due to the following:

Weighted average life: The notes' ratings are sensitive to the
weighted average life assumption of the portfolio, which could
lengthen as a result of the manager's decision to reinvest in new
issue loans or other loans with longer maturities, or participate
in amend-to-extend offerings.

Around 0.34% of the collateral pool consists of debt obligations
whose credit quality Moody's has assessed by using credit
estimates.

Foreign currency exposure: The deal has a significant exposures to
non-EUR denominated assets. Volatility in foreign exchange rates
will have a direct impact on interest and principal proceeds
available to the transaction, which can affect the expected loss of
rated tranches.


CARLYLE EURO 2021-2: Fitch Gives 'B-(EXP)' Rating to Class E Debt
-----------------------------------------------------------------
Fitch has assigned Carlyle Euro CLO 2021-2 DAC expected ratings.

DEBT                       RATING
----                       ------
Carlyle Euro CLO 2021-2 DAC

A-1             LT  AAA(EXP)sf   Expected Rating
A-2A            LT  AA(EXP)sf    Expected Rating
A-2B            LT  AA(EXP)sf    Expected Rating
B               LT  A(EXP)sf     Expected Rating
C               LT  BBB-(EXP)sf  Expected Rating
D               LT  BB-(EXP)sf   Expected Rating
E               LT  B-(EXP)sf    Expected Rating
Subordinated    LT  NR(EXP)sf    Expected Rating
X               LT  AAA(EXP)sf   Expected Rating

TRANSACTION SUMMARY

Carlyle Euro CLO 2021-2 DAC is a securitisation of mainly senior
secured loans with a component of senior unsecured, mezzanine, and
second-lien loans. The note proceeds will be used to fund the
identified portfolio with a target par of EUR460 million. The
portfolio is managed by CELF Advisors LLP, which is part of the
Carlyle Group. The CLO envisages a 4.5-year reinvestment period and
a nine-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 25.2, below the indicative maximum Fitch WARF covenant
of 27.5.

Strong Recovery Expectation (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 62.9%,
above the indicative minimum Fitch WARR covenant of 61%.

Diversified Portfolio (Positive): The indicative top 10 obligors
limit and maximum fixed rate asset limit for the expected rating
analysis is 23% and 12.5%, respectively. 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 4.5-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 Modelling (Neutral): The WAL used for the transaction
stress portfolio is 12 months less than the WAL covenant, to
account for strict reinvestment conditions after the reinvestment
period, including the overcollateralisation tests and Fitch 'CCC'
limit passing together with a linearly decreasing WAL covenant.
When combined with loan pre-payment expectations this ultimately
reduces the maximum possible risk horizon of the portfolio.

RATING SENSITIVITIES

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

-- An increase of the default rate (RDR) at all rating levels by
    25% of the mean RDR and a decrease of the recovery rate (RRR)
    by 25% at all rating levels would result in downgrades of no
    more than four notches, depending on the notes.

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

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

-- A reduction of the RDR at all rating levels by 25% of the mean
    RDR and an increase in the RRR by 25% at all rating levels
    would result in upgrades 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 was customised to the
    portfolio limits as specified in the transaction documents.
    Even if the actual portfolio shows lower defaults and smaller
    losses at all rating levels than Fitch's stressed portfolio
    assumed at closing, an upgrade of the notes during the
    reinvestment period is unlikely. This is because the portfolio
    credit quality may still deteriorate, not only by natural
    credit migration, but also by reinvestments, and also because
    the manager can update the Fitch collateral quality test.

-- After the end of the reinvestment period, upgrades may occur
    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

Carlyle Euro CLO 2021-2 DAC

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.


SOVCOMBANK PJSC: Fitch Gives BB+(EXP) on Upcoming USD Eurobonds
----------------------------------------------------------------
Fitch Ratings has assigned PJSC Sovcombank's (SCB) upcoming issue
of US dollar-denominated senior unsecured Eurobonds an expected
'BB+(EXP)' rating.

The bonds will be issued by SCB's Ireland-based SPV, SovCom Capital
DAC, which will on-lend the proceeds to the bank. The issue size
and coupon rate are not yet determined.

The final rating is contingent upon the receipt of final documents
conforming to information already received.

KEY RATING DRIVERS

The expected rating is in line with SCB's Long-Term Issuer Default
Rating (IDR) of 'BB+', as the notes will represent unconditional,
senior unsecured obligations of the bank.

SCB's 'BB+' IDRs are driven by the bank's standalone strength, as
reflected in its 'bb+' Viability Rating (VR). SCB's VR captures the
bank's strong financial profile, as expressed by its sound
profitability, consistently low impaired loan ratios, and a
reasonable funding and liquidity profile. These strengths are
balanced with occasional shifts in SCB's business model in the
past, only moderate capital ratios, and somewhat higher risk
appetite than domestic peers.

RATING SENSITIVITIES

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

-- The senior debt rating could be downgraded if SCB's IDRs were
    downgraded. This could be driven by a sharp increase in loan
    impairment charges at SCB, resulting in negative or close to
    negative net income for several consecutive quarterly
    reporting periods.

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

-- The senior debt rating could be upgraded if SCB's IDRs were
    upgraded. This would require (i) higher capital ratios, with
    the common equity Tier 1 ratio being sustainably above 13%,
    which is a threshold for a 'bbb' category capital score under
    Fitch's Bank Rating Criteria; (ii) further franchise
    expansion; and (iii) a record of lower risk appetite. The
    latter could be manifested by lower asset growth, moderation
    of risks in SCB's treasury business and a more limited
    appetite for bank acquisitions.

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.




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

ALI HOLDING: S&P Assigns Preliminary 'BB+' ICR, Outlook Stable
--------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'BB+' long-term ratings
to Italy-based food service equipment provider Ali Holding S.r.l.
and the company's proposed term loan B (TLB).

The stable outlook reflects S&P's expectation that Ali will quickly
deleverage post-transaction, with debt to EBITDA reducing to about
4x at end-2022 and to about 3x at end-2023.

Ali is acquiring Welbilt Inc., a U.S.-based food service
manufacturer, for a total consideration of $5.4 billion, including
excess cash, transaction costs, and fees.

To finance the transaction, the group plans to issue a $1,250
million-equivalent term loan A (TLA), $2,250 million term loan B
(TLB), $250 million revolving credit facility, and $750 million
asset sale bridge loan, via its subsidiaries.

With the acquisition of Welbilt, Ali becomes the clear leader in
the global food service equipment market and further strengthens
its product offering. Ali will increase its market share in the
global food service equipment market to about 10%. The acquisition
provides the group with increased exposure to North American end
markets. S&P views this favorably for Ali's revenue
diversification, particularly because profit margins are generally
higher in the U.S. than in Europe. In addition, Welbilt has sizable
exposure to the Quick Service Restaurant (QSR) industry, which
shows resilient growth prospects. Furthermore, incorporating
Welbilt's extensive product base enhances the Ali Group's
market-leading product portfolio, strengthening Ali's ability to
cross-sell and act as a one-stop shop for customers. Within the
food service industry, Ali's premium-status brands support the
group's business profile.

Ali's strong profitability is a key credit strength for the
company. Over 2016-2020, Ali's EBITDA margin, as adjusted by S&P
Global Ratings, averaged 19% and reached 20% before the onset of
the COVID-19 pandemic. Over the same five-year period, Welbilt's
adjusted EBITDA margin averaged a slightly lower 17.4%.
Furthermore, Welbilt's margin has shown a higher degree of
volatility than Ali's, with S&P Global Ratings' adjusted EBITDA
margins steadily decreasing from a high of 20% in 2017 to 13.8% in
2020. In recent years, elevated restructuring costs related to
Welbilt's ongoing Business Transformation Program (BTP) have
constrained profitability. That said, Welbilt had incurred most of
the related costs at the end of second-quarter 2021, and target
savings are expected to be achieved by late 2022. S&P believes
Welbilt's efforts will allow margins to recover to a level on par
with the Ali Group's.

Ali has a solid track record of executing acquisitions, but the
relatively large Welbilt transaction carries some risk. Successful
mergers and acquisitions have been key to Ali's growth strategy.
Following the closing of the Welbilt transaction, the group will
boast a portfolio of nearly 100 brands and a broad product range
that is unmatched by competitors. Recent acquisitions, such as
Scotsman Industries ($585 million) in 2012 and Inter Metro ($418
million) in 2015, have highlighted Ali's successful acquisition
execution track record. Furthermore, Ali has demonstrated the
capability to quickly deleverage post-transaction, consistently
returning to net cash positions within years of material
acquisitions. The Welbilt transaction is significantly larger than
Ali's past transactions, bringing increased execution risk and much
higher leverage. Contrary to Ali, Welbilt currently has a more
integrated corporate business model for its 15 brands, while Ali's
80 brands operate independently from each other.

Ali's concentration in the food service equipment market is a
credit quality constraint, in S&P's view. Ali's product portfolio
covers a range of sub-segments such as cooking, meal delivery, ice
makers and refrigeration. However, the group's operations are
ultimately concentrated on the food service equipment market. This
market is highly competitive and fragmented, with the top 10
players holding less than 50% of the market. Moreover, many local,
niche competitors make up the remainder of the market. Furthermore,
compared with other rated global capital goods peers', Ali's
products are more commoditized in nature, without the high
technological content that serves as a barrier to entry.

S&P said, "Our preliminary rating is based on our expectation that
Ali's $5.4 billion acquisition of Welbilt will close on Jan. 1,
2022. Ali is raising $4.3 billion of debt to help fund the
transaction. This will be combined with $1.1 billion of cash on
hand at Ali and Welbilt to fund the $5.4 billion acquisition and to
refinance Welbilt's outstanding financial debt. Furthermore, we
understand that the company intends to dispose of certain assets in
order to receive regulatory approval. Ali currently has a fiscal
year-end in August, and the company reports in euros under Italian
GAAP. In our base case, the projected credit metrics capture our
assumption that the company will report in U.S. dollars with
year-end December.

"Ali will continue to generate high amounts of free operating cash
flow (FOCF), and we assume this will be used to deleverage swiftly.
On a stand-alone basis, Ali continuously generated annual adjusted
FOCF in excess of $250 million over the past five years. This
yielded an adjusted FOCF-to-sales ratio of 10%-13% over the same
period. Ali's strong cash flow is a key credit strength, supported
by relatively low capital expenditure requirements, which have
averaged about 1.8% of sales over the past five years. Welbilt's
cash flow profile is somewhat weaker, with adjusted FOCF to sales
fluctuating between 0%-10% over the same five years. Nonetheless,
we expect the consolidated group to generate adjusted FOCF of $330
million–$360 million in 2022 and about $0.5 billion in 2023. We
adjust FOCF in 2022 to include transaction-related costs of about
$140 million. We anticipate that Ali will direct this cash to debt
repayment and facilitate swift deleveraging."

The final rating will depend on the company's successful debt
issuance. Ali intends to issue a $1,250 million TLA, $2,250 million
TLB, $750 million asset sale bridge loan and $250 million revolving
credit facility (RCF). The final rating will depend on S&P's
receipt and satisfactory review of all final transaction
documentation and continued operating performance in line with its
base case. Accordingly, the preliminary rating should not be
construed as evidence of the final rating. If S&P Global Ratings
does not receive final documentation within a reasonable time
frame, or if final documentation departs from materials reviewed,
or if there are unexpected material deviations from the
expectations for the company's financial performance, it reserves
the right to withdraw or revise the ratings. Potential changes
include, but are not limited to, utilization of the new loan
proceeds; maturity, size, and conditions of the instruments,
financial and other covenants, security and ranking.

S&P said, "The stable outlook reflects our expectation that Ali
will allocate excess cash to make significant debt repayments
post-Welbilt transaction in 2022 and 2023, with debt to EBITDA
moving toward 3.0x by 2023 and FOCF to debt of more than 10%.

"We could downgrade Ali if it experiences prolonged weak demand
resulting in muted FOCF and lower-than-anticipated debt repayment,
such that debt to EBITDA remained above 4.0x by 2023.

"We could upgrade Ali if the company accelerated its deleveraging
efforts post-transaction. This could occur if profitability were to
improve stronger than expected alongside the proceeds from asset
disposals being materially above our base-case expectations. We
would view debt to EBITDA sustainably near 2.0x and FOCF to debt
above 25% as commensurate with a higher rating. This however, would
need to be supported by company's commitment to sustain credit
ratios commensurate with an investment-grade rating."


ALITALIA: Interested Entities Invited to Submit Bids for Brand
--------------------------------------------------------------
In accordance with the extraordinary administration procedure
applying to Alitalia Societa Aerea Italiana S.p.A. (hereafter the
"Company under EA"), Avv. Gabriele Fava, Avv. Giussepe Leogrande
and Prof. Avv. Daniele Umberto Santosuosso, the Extraordinary
Commissioners, intend to transfer the "Alitalia" brand, as better
described and identified in the full version of the call for
submission of offer for the acquisition of the trademarks and
domains owned by the Company under EA (hereafter the "Call")
published on website
https://www.amministrazionestraordinariaalitaliasai.com

Therefore, by way of this notice (hereafter, the "Notice"), the
Extraordinary Commissioners of the Company under EA invite the
interested entities to submit their offer for the acquisition of
the "Alitalia" brand according to the terms, conditions and
procedures set out in the full version of the Call.

This Notice that does not constitute a public offer, within the
meaning of article 1336 of the Italian Civil Code, nor a request
for collecting public savings, pursuant to article 94 et seq. of
Legislative Decree February 24, 1998, no. 58.


RED & BLACK AUTO: Moody's Assigns (P)Ba2 Rating to Class D Notes
----------------------------------------------------------------
Moody's Investors Service has assigned the following provisional
ratings to Notes to be issued by Red & Black Auto Italy S.r.l.

EUR []M Class A Floating Rate Asset Backed Notes due December
2031, Assigned (P)Aa3 (sf)

EUR []M Class B Floating Rate Asset Backed Notes due December
2031, Assigned (P)Baa1 (sf)

EUR []M Class C Floating Rate Asset Backed Notes due December
2031, Assigned (P)Baa3 (sf)

EUR []M Class D Floating Rate Asset Backed Notes due December
2031, Assigned (P)Ba2 (sf)

Moody's has not assigned a rating to the subordinated EUR []M Class
J Fixed Rate Asset Backed Notes due December 2031.

RATINGS RATIONALE

The Notes are backed by a pool of Italian prime auto loans
originated by Fiditalia S.p.A. This represents the first issuance
out of the Red & Black Auto Italy issuer.

The provisional portfolio of assets amounts to approximately Eur
1,000 million as of August 31, 2021 provisional pool cut-off date.


The Reserve Fund will be funded to 0.5% of the rated Notes balance
at closing and the total credit enhancement from subordination for
the Class A Notes will be 5.5%, and could increase up to 12.0% on
an ongoing basis given the initial sequential repayment period .

The ratings are primarily based on the credit quality of the
portfolio, the structural features of the transaction and its legal
integrity.

According to Moody's, the transaction benefits from various credit
strengths such as a granular portfolio and an amortising liquidity
reserve sized at 0.5% of the rated Notes balance. However, Moody's
notes that the transaction features some credit weaknesses such as
an unrated sub-servicer (Fiditalia) and a structure which allows
for periods of pro rata payments under certain scenarios. Various
mitigants have been included in the transactions structure as a
backup sub-servicer, appointed at closing, which will substitute
the sub-servicer upon termination of the sub-servicer's mandate.

The portfolio of underlying assets was distributed through dealers
to private individuals (84.9%) and self-employed borrowers (15.1%)
to finance the purchase of new (55.0%) and used (45.0%) for private
consumption purposes. As of August 31, 2021, the portfolio consists
of 109,958 auto finance contracts to 109.654 borrowers with a
weighted average seasoning of around 1.75 years. The contracts have
equal instalments during the life of the contract without any
larger balloon payment at maturity.

Moody's determined the portfolio lifetime expected defaults of 2%,
expected recoveries of 15% and Aa3 portfolio credit enhancement
("PCE") of 10% related to borrower receivables. The expected
defaults and recoveries capture Moody's expectations of performance
considering the current economic outlook, while the PCE captures
the loss Moody's expect the portfolio to suffer in the event of a
severe recession scenario. Expected defaults and PCE are parameters
used by Moody's to calibrate its lognormal portfolio loss
distribution curve and to associate a probability with each
potential future loss scenario in the cash flow model to rate Auto
ABS.

Portfolio expected defaults of 2% is in line with the EMEA Auto ABS
average and is based on Moody's assessment of the lifetime
expectation for the pool taking into account (i) historic
performance of the book of the originator, (ii) benchmark
transactions, and (iii) other qualitative considerations.

Portfolio expected recoveries of 15% is lower than the EMEA Auto
ABS average and is based on Moody's assessment of the lifetime
expectation for the pool taking into account (i) historic
performance of the originator's book, (ii) benchmark transactions,
and (iii) other qualitative considerations.

PCE of 10% is in line with the EMEA Auto ABS average and is based
on Moody's assessment of the pool which is mainly driven by: (i)
the strength of the originator, (ii) the relative ranking to
originator peers in the EMEA market, and (iii) the weighted average
original loan-to-value of 83.2% which is in line with the sector
average. The PCE level of 10% results in an implied coefficient of
variation ("CoV") of 79%.

The principal methodology used in these ratings was 'Moody's Global
Approach to Rating Auto Loan- and Lease-Backed ABS' published in
September 2021.

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

Factors that would lead to a downgrade of the ratings include: (i)
increased counterparty risk leading to potential operational risk
of (a) servicing or cash management interruptions and (b) the risk
of increased swap linkage due to a downgrade of the swap
counterparty ratings, and (ii) economic conditions being worse than
forecast resulting in higher arrears and losses.

Factors that may cause an upgrade of the ratings of the notes
include significantly better than expected performance of the pool
together with an increase in credit enhancement of Notes.




===================
K A Z A K H S T A N
===================

EURASIAN BANK: Moody's Affirms 'B2' LongTerm Deposit Ratings
------------------------------------------------------------
Moody's Investors Service has affirmed Eurasian Bank's b3 Baseline
Credit Assessment and Adjusted BCA, the B2 long-term local and
foreign currency deposit ratings and changed the outlooks on the
bank's long-term local and foreign currency deposit ratings to
stable from negative. Moody's has also affirmed the bank's B1/Not
Prime long-term and short-term local and foreign currency
Counterparty Risk Ratings and the bank's B1(cr)/ Not Prime(cr)
long-term and short-term Counterparty Risk Assessments.
Concurrently, Moody's has also affirmed the bank's Ba3.kz national
scale long-term deposit rating and the Ba1.kz national scale
long-term Counterparty Risk Rating.

RATINGS RATIONALE

The rating action captures stabilization in Eurasian Bank's
solvency profile that was achieved thanks to the relatively
resilient and strong performance of the bank's consumer lending
business. Despite unfavorable economic environment and challenging
business landscape after the coronavirus' outbreak, the bank was
able to stabilize its quarterly pre-provision earnings at above
KZT10 billion. This enables the bank to considerably augment loan
loss reserves, thus reducing solvency risks which stems from its
historically high level of legacy problem loans and their
historically modest coverage by loan loss reserves.

According to the most recent data provided by the bank's
management, the share of problem loans (defined as Stage 3 and POCI
loans, according to IFRS 9 accounting standard) in the bank gross
loan book decreased to 25.4% as of June 30, 2021 from 28.8% as of
December 31, 2020, while the coverage of problem loans by loan loss
reserves improved to 81.1% from 64.7% for the same six-month
period. Moody's expects that Eurasian Bank would be able to
maintain its currently good pre-provision earnings, thereby
materially reducing risks for the bank's solvency profile. In
addition, regulatory risks for the bank also substantially reduced
as it has fully met provisioning criteria on certain corporate
loans, that were subject to additional impairment test, following
the regulator's asset quality review performed in the previous
years.

Moody's rating action also takes into account Eurasian bank's
strong liquidity with the bank's almost full reliance on customer
funds and its large buffer of liquid assets. The latter reached
almost half of the bank's assets as of June 30, 2021 (an
improvement compared to 34% as of year-end 2019).

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

Eurasian Bank's long-term ratings could be upgraded if the bank to
continue further enhancing its solvency by eliminating asset risks,
stemming from its historically weakly performing corporate loan
book, while profitability of its operations remains strong.

The bank's deposit ratings could be downgraded in case of a sudden
impairment of its assets and\or deterioration in profitability
metrics, leading to capital erosion.

LIST OF AFFECTED RATINGS

Issuer: Eurasian Bank

Affirmations:

Adjusted Baseline Credit Assessment, Affirmed b3

Baseline Credit Assessment, Affirmed b3

Long-term Counterparty Risk Assessment, Affirmed B1(cr)

Short-term Counterparty Risk Assessment, Affirmed NP(cr)

Long-term Counterparty Risk Ratings, Affirmed B1

Short-term Counterparty Risk Ratings, Affirmed NP

NSR Long-term Counterparty Risk Rating, Affirmed Ba1.kz

Short-term Bank Deposit Ratings, Affirmed NP

Long-term Bank Deposit Ratings, Affirmed B2, Outlook Changed To
Stable From Negative

NSR Long-term Bank Deposit Rating, Affirmed Ba3.kz

Outlook Action:

Outlook, Changed To Stable From Negative

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks
Methodology published in July 2021.




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

CONSOLIDATED ENERGY: S&P Rates New Senior Unsecured Notes 'B+'
--------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating to
Consolidated Energy Finance S.A.'s (CEF) proposed senior unsecured
notes for up to $750 million due 2028. The proposed notes will have
a eight-year bullet tenor and fixed coupon rate, and the issuance
could consist of dollar- and euro-denominated amounts. CEF is a
financing subsidiary of Consolidated Energy Ltd. (CEL;
B+/Stable/--).

S&P said, "We consider the transaction as debt neutral given that
it won't increase debt to CEL's capital structure. The company
plans to use the net proceeds to refinance existing debt, including
its outstanding $214 million floating rate notes due 2022 through a
cash tender offer, and its $493 million senior unsecured notes due
2025. The remaining proceeds (about $43 million) will be used for
fees, expenses and the call premium for the 2025 notes. The notes
will benefit from guarantees on a senior unsecured basis from CEL
and some of its main subsidiaries, and will rank pari passu in
right of payment with the company's existing and future senior
unsecured debt. The rating on the proposed notes is at the same
level as our issuer credit rating on CEL, reflecting our view that
there's no significant subordination risk present in its capital
structure, as seen in a priority debt ratio at 30%, below our 50%
threshold.

"Following the issuance, CEL's debt structure will consist of the
proposed $750 million senior unsecured notes due 2028, $398 million
senior unsecured notes due 2026, and $666 million of CEL's term
loan B due 2025 issued through CEF. Additionally, around $1 billion
in debt is at subsidiaries' level. In our view, the proposed
issuance will enhance CEL's debt maturity profile to an average
term of about 6.0 years from about 3.9 as of June 2021.

"We still expect the company to maintain a prudent risk management
towards liquidity, and continue improving its credit metrics
through expected higher revenue and EBTIDA in the next 12 months,
thanks to the recovery of methanol prices and consistent volume
production across its facilities. Given that we expect stable debt
levels, solid methanol demand, and favorable prices that should
lift CEL's EBITDA, we continue expecting debt to EBITDA in the mid-
to high-4.0x range by the end of 2021."

  Ratings List

  NEW RATING

  CONSOLIDATED ENERGY FINANCE S.A.

  Senior Unsecured          B+


MODULAIRE INVESTMENTS 2: S&P Assigns Preliminary 'B' ICR
--------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B' long-term issuer
credit rating to Modulaire Investments 2 S.a.r.l. S&P also assigned
its preliminary 'B' issue rating with a recovery rating of '3' to
the new senior secured debt, and its preliminary 'CCC+' issue
rating with a recovery rating of '6' to the new senior unsecured
debt.

The stable outlook reflects S&P's view that Modulaire will continue
increasing revenue and improving EBITDA margins thanks to the
consolidation of its completed acquisitions, good cost control
measures, increasing utilization rates, and a focus on high
value-added product services (VAPS) to expand the business.

Brookfield has acquired Modulaire Investments 2 S.a.r.l. from TDR
Capital for a cash purchase price of around EUR4.3 billion.
Modulaire will repay the existing debt with new issuances and an
equity injection.

Brookfield's acquisition of Modulaire and the associated
refinancing causes Modulaire's leverage to rise slightly from
previous forecasts, but its metrics should start to gradually
improve as profitability and cash flows increase. As part of the
acquisition from TDR Capital, Modulaire will issue EUR2,302.5
million of senior secured debt. This will be split across a
EUR1,120 million term loan B and EUR1,182.5 million-equivalent in
senior secured debt, GBP250 million of which will comprise pound
sterling senior secured debt. Modulaire will also issue EUR435
million in senior unsecured debt and a EUR350 million senior
secured revolving credit facility (RCF), which is expected to be
undrawn when the transaction closes. As part of the transaction,
the existing senior secured and unsecured notes and the existing
RCF will be redeemed. The cash purchase price of the company is
about EUR4.3 billion. At the same time, Brookfield will use about
EUR1.5 billion of equity (including the vendor loan notes) to fund
this transaction. S&P does not expect there to be any cash on
balance sheet on the transaction's closing, at the end of 2021.

S&P said, "As a result of the new capital structure, we expect
Modulaire's adjusted gross debt levels to increase above EUR3.0
billion in 2022, up from EUR2.131 billion in 2020. We expect good
EBITDA growth in our base case that will result in debt to EBITDA
of about 6.3x-6.7x in 2022. We expect the company's funds from
operations (FFO) to debt to be about 7%-8% in 2021, rising to more
than 10% in 2022, with improving topline growth and higher FFO
generation partly offsetting the increasing gross debt. Despite
these improvements, the company remains highly leveraged, with key
metrics commensurate with similarly rated peers. We expect FFO cash
interest coverage of 2.4x-2.6x in 2021, and we forecast this will
rise to 3.1x-3.5x in 2022."

Modulaire has completed three acquisitions in 2021: Carter and
Procomm, whose operations are focused in the U.K., and Tecnifor,
whose services are predominantly based in Italy. Modulaire
purchased these businesses for a total of about EUR160 million.
This followed six acquisitions completed in 2020. The company does
not expect to complete any additional material acquisitions in the
short term. Although this results in no further revenue or EBITDA
growth through bolt-on acquisitions, it slightly benefits the
company's debt to EBITDA. The acquisitions completed in the past 18
months have increased the company's gross debt levels, with
Modulaire taking on some of the newly acquired companies' debt.
Modulaire will also repay this debt as part of the transaction.

Modulaire continues to benefit from good diversification, and it
has consolidated its market share across key regions. This has
supported resilient operating performance during the pandemic.
Modulaire has a strong market position as the No. 1 provider of
modular units in the U.K., France, Germany, Belgium, the
Netherlands, Poland, Norway, Spain, and Italy. This is partly the
result of reasonable organic growth in recent years but more
significantly due to acquisitions completed to grow the business
and increase its presence in these regions. The company's EBITDA
generation is fairly well diversified--aside from some reliance on
France, which contributed 25% of EBITDA in 2020--across the U.K.,
European markets and Asia-Pacific. There is also some
diversification in the end-markets that the company serves,
including industries and services, public administration, and
construction. S&P also notes the company's strong customer
retention rate, supported by an average contract length of 19-21
months, and average consumer relationships exceeding nine years in
all regions. The company has been steadily increasing its
proportion of revenue from reoccurring customers, but customer
concentration is low, given that the largest customer accounts for
only 4% of sales, with the top 20 customers accounting for 18% of
sales. The company faced some setbacks in operations in 2020 in the
form of site closures and delayed projects. Nonetheless, revenue
grew year-on-year by 24.5% to EUR1,214 million and EBITDA grew by
33%. The growth in 2020 was supported by the completed
acquisitions, allowing Modulaire to grow its fleet and subsequently
its units on rent. Growth also stemmed from increased
pandemic-related demand for temporary units such as testing sites
and administration centers. S&P expects revenue to grow strongly to
EUR1,535 million-EUR1,555 million in 2021 thanks to a mix of:

-- Organic growth;
-- Increasing utilization rates for its fleet;
-- Rising revenue per unit related to its VAPS; and
-- Inorganic growth from the three companies acquired this year.

S&P said, "We expect revenue will grow by 6%-8% through 2022. We
also expect EBITDA margins will continue rising steadily from
26%-28% at end-2021 as the company implements cost control measures
and fully integrates the latest margin-accretive acquisitions into
the business.

"The business remains capital intensive, which will result in
negative free operating cash flow (FOCF) in 2021, improving to
strongly positive in 2022. Despite improvements in revenue and
EBITDA generation forecasted for 2021, we expect the company's FOCF
will remain negative, as it was in 2020. This is largely due to the
significantly high levels of capital expenditure (capex) expected
this year, at about EUR245 million-EUR255 million, which accounts
for approximately 16% of revenue. We anticipate FOCF will be
negative by about EUR15 million-EUR25 million in 2021. We expect
capex to decrease to about EUR155 million-EUR165 million in 2022,
with a fairly even split between maintenance and growth capex and
some expenditure on sustaining the company's fleet." The increased
topline growth, combined with capex declining to about 9%-10% of
sales, should see the company start to generate positive FOCF of
about EUR140 million-EUR170 million in 2022.

VAPS remains a key competitive advantage for the company and is an
avenue of improving revenue and EBITDA generation, but fleet
utilization remains below target levels. Modulaire aims to further
develop its capabilities to be a 'one-stop-shop' for its customer,
aiming to offer VAPS in every unit leased. VAPS comprise a number
of services such as comfort and aesthetics, energy and technology,
risk and safety, and contract options. This offering includes the
provision of units fitted with furniture, electrical appliances,
water and electricity, fire protection, and flexibility on
contracts. In the 12 months to June 2021, VAPS generated EUR237
million of revenue for the company, but Modulaire considers this to
be a fast-growing and underpenetrated market in which it intends to
develop further. The company has successfully increased its VAPS
revenue and revenue per unit in recent years, but it will have to
capture market share from traditional suppliers of these products
and services to expand further. VAPS are also less margin accretive
than leasing, although they require lower levels of investment and
so could be a source of growth for Modulaire in the coming years.
Modulaire's unit leasing remains a key factor in maximizing
opportunities for VAPS growth, and fleet utilization remains
slightly below the targeted level of 87%. Utilization averaged
about 80% between 2018 and 2020, although this increased to 85% in
the 12 months to June 2021.

S&P said, "The stable outlook reflects our view that Modulaire will
continue increasing revenue and improving EBITDA margins thanks to
the consolidation of its completed acquisitions, good cost control
measures, increasing utilization rates, and a focus on VAPS to
expand the business.

"We could lower the rating if revenue and EBITDA growth trended
lower than we currently forecast, with debt to EBITDA trending
consistently above 7x. Furthermore, we could lower the rating if
FFO cash interest coverage reduced consistently to below 2.5x, the
company's FOCF generation reduced toward negative, or the company's
liquidity came under any strain.

"We could raise the rating if debt to EBITDA trended consistently
below 5x, with FFO to debt improving to above 12%. An upgrade would
also depend on FFO cash interest coverage remaining consistently
above 3x and EBITDA margins rising to above 30%. We would also
expect the company to generate positive and consistent FOCF, which
would likely require supportive macroeconomic and industry
conditions."


PARTICLE INVESTMENTS: Moody's Alters Outlook on B3 CFR to Positive
------------------------------------------------------------------
Moody's Investors Service has upgraded to B2 from B3 the instrument
rating on the backed senior secured first lien term loan and the
backed senior secured first lien revolving credit facility issued
by Particle Investments S.a.r.l. (WebPros or the company), the
holding company for automation software provider WebPros.
Concurrently, the rating agency has affirmed the B3 corporate
family rating and the B3-PD probability of default rating of
WebPros. The outlook on all ratings has been changed to positive
from stable.

"The change in outlook largely reflects the strengthening in
WebPros' operating performance since the LBO transaction last year
leading to Moody's-adjusted leverage falling to below 6x and
improved free cash flow levels" says Luigi Bucci, Moody's lead
analyst for WebPros.

"At the same time, the upgrade of the first lien credit facilities
reflects the reduction in first lien leverage supported by EBITDA
improvements and debt repayments. The ratings and outlook continue
to be supported by the solid operational prospects of the company
boosted by recurring price increases and organic revenue growth"
adds Mr Bucci.

RATINGS RATIONALE

WebPros' B3 CFR is mainly supported by (1) the company's strong
position in the niche market for web hosting control panels; (2)
its strong renewal rates and limited churn; (3) the risks and costs
for web hosting providers in changing control panels; and (4) the
company's strong revenue and EBITDA growth following recurring
product repricing in the 2019-2021 period.

However, the credit quality of the company is primarily constrained
by (1) its high Moody's-adjusted leverage of 5.8x for the 12 months
that ended June 2021; (2) the company's small addressable market;
(3) its limited portfolio offering, mainly concentrated on two
similar products; and (4) the reliance of its sales strategy on
large web hosting partners.

Since the company's LBO transaction closed in May 2020, WebPros has
focused its financial strategy on continued price increases of its
two main products because the company understands its product
offering has been historically underpriced. The change in pricing
strategy will have a sizeable impact on the company's 2021 and 2022
performance leading to a revenue growth in the low-twenties and
low-teens, respectively.

Moody's understands that WebPros intends to increase the investment
in R&D with new hires, with the intention of improving and updating
new features of its product line, as well as developing a new
platform. While the hiring of new staff has been slower than
previously targeted, Moody's anticipates it to gradually accelerate
in the latter part of 2021 and into 2022. As a consequence, the
rating agency forecasts company-adjusted EBITDA margin to return to
around 60% in 2022 from 62% in 2020 leading to a company-adjusted
EBITDA of around $130-135 million (2020: $102 million).

Moody's estimates WebPros' Moody's-adjusted leverage to decline to
below 5.5x in 2021 and to reduce further in 2022 (2020: 6.9x),
driven mainly by EBITDA improvements resulting from repricing
actionsand organic growth. Moody's does not factor in any
additional debt reductions besides the 1% first-lien mandatory debt
repayment. The rating agency notes that continued leverage
reductions will be dependent upon debt-funded M&A risk, because the
company continues to target inorganic growth, but also shareholder
distributions as the company has managed to create substantial
financial flexibility over the past 12 months.

Moody's expects free cash flow (FCF) to remain positive and improve
gradually, supported by (1) organic EBITDA growth; (2) the absence
of major working capital requirements because of monthly
subscription billings; and (3) limited capital spending, which will
average 1%-2% of revenue in 2021-22. Moody's-adjusted FCF/debt is
likely to be in the high-single-digit and low teens in percentage
terms in 2021 and 2022, respectively.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS

Moody's has considered in its analysis of WebPros the following
environmental, social and governance (ESG) considerations. In terms
of governance, CVC holds a stake of 40% and controls the board of
directors of the company. The remaining shareholders are
represented by Oakley Capital (22%) together with management,
founders and other investors (38%).

Post LBO transaction and the resulting very high opening leverage,
WebPros' financial policy has been more creditor-friendly with
strong deleveraging and excess cash flow used to voluntarily repay
debt. The rating agency currently does not expect large debt-funded
acquisitions, such as WebPros' acquisition of cPanel in 2018, but
small bolt-on transactions to support growth remain likely. At the
same time, Moody's considers WebPros' social risks to be relatively
low. WebPros does not own the data of individual end-users although
has access to the list of websites running on servers using their
solutions.

LIQUIDITY

Moody's views WebPros' liquidity as good. Cash balances at June
2021 stood at $31 million, further supported by the undrawn $60
million RCF due 2025. Moody's forecasts WebPros to generate
positive FCF in the range of $60 million - $80 million on an annual
basis over 2021-22, supporting the overall liquidity profile of the
business.

The RCF, due 2025, is subject to a springing senior net leverage
covenant set at 9.0x, tested if drawings under the RCF exceed 40%.
The rating agency expects the company to have sizeable headroom
under the covenant, which will increase over time.

STRUCTURAL CONSIDERATIONS

The B3-PD probability of default rating reflects Moody's assumption
of a 50% family recovery rate, given the covenant-lite structure of
the term loan. The B2 ratings on the backed senior secured
first-lien term loan and the pari passu RCF reflect their first
priority claim on the transaction security, ahead of the
second-lien term loan.

The security package includes a pledge of shares, bank accounts and
intercompany receivables. The instruments are guaranteed by the
borrower and material subsidiaries representing a minimum of 80% of
consolidated EBITDA. There is a floating charge granted by English
borrowers and obligors under the laws of the United States will
grant customary all-asset security.

RATIONALE FOR POSITIVE OUTLOOK

The positive outlook reflects Moody's view that WebPros' revenue
and EBITDA will continue to grow over the next 12-18 months
supported by recurring price increases and organic volume growth.
As a result, the rating agency expects Moody's-adjusted debt/EBITDA
to decline towards 5x by 2022 and Moody's-adjusted FCF/debt to
increase above 10% on a sustainable basis over the same time frame.
The positive outlook also incorporates Moody's expectation that
there will be no transformational acquisition nor dividend
distributions.

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

Positive pressure on WebPros' ratings could arise if: (1)
Moody's-adjusted FCF/debt increased towards 10% on a sustainable
basis; (2) Moody's-adjusted debt/EBITDA fell below 6.0x; (3) the
company were to successfully implement additional price increases,
without any deterioration in customer attrition; and (4) WebPros
were to demonstrate a proven track record as an integrated group.

Moody's could consider a rating downgrade if WebPros' operating
performance were to weaken significantly on the back of increased
customer attrition. The ratings would also come under negative
pressure if: (1) Moody's-adjusted leverage were to increase towards
8.0x; or (2) FCF turned negative; or (3) the liquidity profile of
the company were to weaken; or (4) WebPros engaged in material
debt-funded acquisitions or shareholder distributions.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Software
Industry published in August 2018.

LIST OF AFFECTED RATINGS

Issuer: Particle Investments S.a.r.l.

Upgrades:

BACKED Senior Secured Bank Credit Facility, Upgraded to B2 from
B3

Affirmations:

Probability of Default Rating, Affirmed B3-PD

LT Corporate Family Rating, Affirmed B3

Outlook Actions:

Outlook, Changed To Positive From Stable

COMPANY PROFILE

Headquartered in the Luxembourg, WebPros is a global web server
automation software provider, created through the combination of
the web control panels Plesk and cPanel in September 2018. The
company offers a portfolio of tools that automate and simplify the
development, management, and administration of web servers through
its channel of more than 2,800 hosting partners worldwide. For the
12 months ended June 2021, WebPros reported pro-forma revenues of
$184 million and adjusted EBITDA of $117 million.




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

TOPLIFIKACIJA: Adora Engineering Offers to Buy Assets
-----------------------------------------------------
Dragana Petrushevska at SeeNews reports that North Macedonia's
construction company Adora Engineering has offered to buy most of
the assets of local heating utility Toplifikacija, which is in
bankruptcy proceedings, for EUR9.3 million (US$10.9 million).

According to SeeNews, META news agency reported on Sept. 23 Adora
wants to buy Toplifikacija's East and West heating plants and most
of the remaining property of the bankrupt company at a public
auction.

Toplifikacija is in bankruptcy proceedings since 2018, SeeNews
discloses.




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

DOMI BV 2019-1: Moody's Affirms Caa3 Rating on Class X Notes
------------------------------------------------------------
Moody's Investors Service has upgraded and affirmed the ratings of
Notes in three Dutch buy-to-let RMBS transactions. The upgrades
reflect the increased levels of credit enhancement for the affected
Notes and better than expected collateral performance.

Issuer: Domi 2019-1 B.V.

EUR213.642M A Notes, Affirmed Aaa (sf); previously on May 29, 2019
Definitive Rating Assigned Aaa (sf)

EUR13.743M B Notes, Upgraded to Aaa (sf); previously on May 29,
2019 Definitive Rating Assigned Aa2 (sf)

EUR8.745M C Notes, Upgraded to Aa2 (sf); previously on May 29,
2019 Definitive Rating Assigned A1 (sf)

EUR4.998M D Notes, Upgraded to A2 (sf); previously on May 29, 2019
Definitive Rating Assigned Baa2 (sf)

EUR4.997M E Notes, Affirmed Ba2 (sf); previously on May 29, 2019
Definitive Rating Assigned Ba2 (sf)

EUR11.244M X Notes, Affirmed Caa3 (sf); previously on May 29, 2019
Definitive Rating Assigned Caa3 (sf)

Issuer: Domi 2020-1 B.V.

EUR281.683M A Notes, Affirmed Aaa (sf); previously on Jun 11, 2021
Affirmed Aaa (sf)

EUR15.914M B Notes, Upgraded to Aa1 (sf); previously on Jun 11,
2021 Affirmed Aa2 (sf)

EUR7.957M C Notes, Upgraded to Aa3 (sf); previously on Jun 11,
2021 Affirmed A2 (sf)

EUR4.775M D Notes, Upgraded to A3 (sf); previously on Jun 11, 2021
Affirmed Baa2 (sf)

EUR4.774M E Notes, Affirmed Ba1 (sf); previously on Jun 11, 2021
Affirmed Ba1 (sf)

EUR3.184M F Notes, Affirmed Caa3 (sf); previously on Jun 11, 2021
Affirmed Caa3 (sf)

EUR14.322M X1 Notes, Affirmed Caa2 (sf); previously on Jun 11,
2021 Affirmed Caa2 (sf)

Issuer: Domi 2020-2 B.V.

EUR227.624M A Notes, Affirmed Aaa (sf); previously on Jun 11, 2021
Affirmed Aaa (sf)

EUR13.58M B Notes, Upgraded to Aa1 (sf); previously on Jun 11,
2021 Affirmed Aa2 (sf)

EUR6.467M C Notes, Upgraded to Aa3 (sf); previously on Jun 11,
2021 Affirmed A1 (sf)

EUR3.88M D Notes, Upgraded to Baa1 (sf); previously on Jun 11,
2021 Affirmed Baa2 (sf)

EUR3.88M E Notes, Affirmed Ba1 (sf); previously on Jun 11, 2021
Affirmed Ba1 (sf)

EUR11.64M X1 Notes, Affirmed Caa2 (sf); previously on Jun 11, 2021
Affirmed Caa2 (sf)

The maximum achievable rating is Aaa (sf) for structured finance
transactions in the Netherlands, 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
increase in credit enhancements for the affected tranches
subsequent to significant pool amortization without any lose. The
pool factors of the transactions, Domi 2019-1 B.V. "Domi 2019-1",
Domi 2020-1 B.V. "Domi 2020-1" and Domi 2020-2 B.V. "Domi 2020-2",
are 53.5%, 73.8% and 79.4% respectively.

Moody's confirmed 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) Domi 2019-1, to 1.30% of original pool balance from 2.50%.

(ii) Domi 2020-1, to 1.62% of original pool balance from 2.50%.

(iii) Domi 2020-2, to 1.75% of original pool balance from 2.50%.

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) Domi 2019-1, to 16% from 18%.

(ii) Domi 2020-1, to 16% from 17%.

(iii) Domi 2020-2, to 16% from 17%.

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

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.




===============
P O R T U G A L
===============

ULISSES FINANCE 2: Moody's Assigns Ba3 Rating to EUR3.7MM E Notes
-----------------------------------------------------------------
Moody's investors Service has assigned definitive ratings to
Ulisses Finance No. 2 issued by TAGUS-Sociedade de Titularizacao de
Creditos, S.A. ("the issuer"):

EUR203.7M Class A Asset-Backed Floating Rate Notes due September
2038, Definitive Rating Assigned Aa2 (sf)

EUR10.0M Class B Asset-Backed Floating Rate Notes due September
2038, Definitive Rating Assigned Aa3 (sf)

EUR20.0M Class C Asset-Backed Floating Rate Notes due September
2038, Definitive Rating Assigned Baa1 (sf)

EUR11.3M Class D Asset-Backed Floating Rate Notes due September
2038, Definitive Rating Assigned Ba1 (sf)

EUR3.7M Class E Asset-Backed Floating Rate Notes due September
2038, Definitive Rating Assigned Ba3 (sf)

Moody's has not assigned a rating to the Class F Asset-Backed
Floating Rate Note, Class G Floating Rate Note and Class Z Note due
September 2038 amounting to EUR4.3M.

RATINGS RATIONALE

The transaction is a one year revolving cash securitisation of auto
loans originated by 321 Credito IFIC S.A ("321C", NR). 321C is a
Portuguese specialized lending company 100% owned by Banco CTT
(N.R.).

As of July 31, 2021, the pool consisted of 25,151 loans with a
weighted average seasoning of 1.7 years, and a total outstanding
balance of approximately EUR250 million. The weighted average
remaining maturity of the loans is 80 months. The securitised
portfolio is highly granular, with top 10 borrower concentration at
0.23% and the portfolio weighted average interest rate is 8.2%. The
portfolio is collateralised by 99.5% used cars.

Moody's have received a breakdown of vehicles by engine type. A
high percentage of the portfolio (88.6%) are Diesel car with a
weighted average car age of 7.8 years.

According to Moody's, the transaction benefits from credit
strengths such as (i) the granularity of the portfolio, (ii) the
strong excess spread-trapping mechanism through a 3 months
artificial write off mechanism, (iii) the high average interest
rate of 8.2%, (iv) very good performance track record of previous
transaction (Ulisses Finance No. 1), (v) Servdebt Capital Asset
Management, S.A. (NR) appointed as back up servicing at closing and
(vi) cap agreement to mitigate interest rate risk provided by
Deutsche Bank AG.

However, Moody's notes that the transaction features some credit
weaknesses such as (i) a one year revolving structure which could
increase performance volatility of the underlying portfolio,
partially mitigated by early amortisation triggers, revolving
criteria both on individual loan and portfolio level and the
eligibility criteria for the portfolio, (ii) a complex structure
including interest deferral triggers for junior notes, pro-rata
payments on all classes of notes after the end of the revolving
period, (iii) the high proportion of used cars 99.5% with a
relatively high 95.5% WA LTV.

Moody's analysis focused, amongst other factors, on (1) an
evaluation of the underlying portfolio of receivables and the
eligibility criteria; (2) the revolving structure of the
transaction; (3) historical performance on defaults and recoveries
from the Q1 2015 to Q1 2021 vintages provided on 321C total book;
(4) the credit enhancement provided by the excess spread and the
subordination; (5) the liquidity facility available for Classes A-C
and the liquidity support available in the transaction by way of
principal to pay interest for all classes and (6) the overall legal
and structural integrity of the transaction.

MAIN MODEL ASSUMPTIONS

Moody's determined the portfolio lifetime expected defaults of
5.5%, expected recoveries of 30.0% and portfolio credit enhancement
("PCE") of 18.0%. The expected defaults and recoveries capture
Moody's expectations of performance considering the current
economic outlook, while the PCE captures the loss Moody's expect
the portfolio to suffer in the event of a severe recession
scenario. Expected defaults and PCE are parameters used by Moody's
to calibrate its lognormal portfolio loss distribution curve and to
associate a probability with each potential future loss scenario in
Moody's cash flow model to rate Auto and Consumer ABS.

Portfolio expected defaults of 5.5% are in line with Iberian Auto
loan ABS average and are based on Moody's assessment of the
lifetime expectation for the pool taking into account (i) historic
performance of the book of the originator, (ii) previous
transactions used as a benchmark, and (iii) other qualitative
considerations.

Portfolio expected recoveries of 30.0% is in line with Iberian Auto
loan ABS average and are based on Moody's assessment of the
lifetime expectation for the pool taking into account (i) historic
performance of the book of the originator, (ii) benchmark
transactions, and (iii) other qualitative considerations.

PCE of 18.0% is in line with Iberian Auto loan ABS average and is
based on Moody's assessment of the pool taking into account the
relative ranking to the originators peers in the Iberian and EMEA
consumer ABS market. The PCE level of 18.0% results in an implied
coefficient of variation ("CoV") of approximately 60.6%.

ESG - Environmental considerations:

The public and political debate about the future of combustion
engines and in particular diesel engines given the shift towards
alternative fuel vehicles such as electric cars is being reflected
in declining new diesel car registrations in several EMEA markets.
This transaction has high exposure to diesel engines with Euro 5
emission standards and below. Vehicles with older or larger engines
with elevated carbon dioxide emissions have a higher likelihood of
obsolescence and their recovery values are more sensitive to
changes in carbon emissions regulations and shifts in consumer
demand. Additional scenario analysis has been factored into Moody's
rating assumptions for these segments.

METHODOLOGY

The principal methodology used in these ratings was "Moody's Global
Approach to Rating Auto Loan- and Lease-Backed ABS" published in
September 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 of the notes would be (1) better than expected performance
of the underlying collateral; (2) significant improvement in the
credit quality of 321C; or (3) a lowering of Portuguese's sovereign
risk leading to the removal of the local currency ceiling cap.

Factors or circumstances that could lead to a downgrade of the
ratings would be (1) worse than expected performance of the
underlying collateral; (2) deterioration in the credit quality of
321C; or (3) an increase in Portuguese's sovereign risk.




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

GRIFOLS ESCROW: Moody's Rates New EUR2BB Sr. Unsecured Notes 'B3'
-----------------------------------------------------------------
Moody's Investors Service has assigned a B3 rating to the new EUR2
billion-equivalent EUR and USD senior unsecured notes due 2028
issued by Grifols Escrow Issuer, S.A.U. (Escrow Issuer), a special
purpose vehicle established by Grifols S.A. (Grifols or the
company) for the notes issuance. The outlook is negative.

Grifols recently announced the acquisition of Biotest AG (Biotest),
a German company that specializes in innovative hematology and
clinical immunology solutions, for an enterprise value of about
EUR2.0 billion. Proceeds from the notes issuance will be primarily
used to (i) finance the acquisition by Grifols of Tiancheng
(Germany) Pharmaceutical Holdings, Biotest's largest shareholder,
for EUR1.1 billion, (ii) finance a tender offer for the remaining
ordinary shares and preferred equity shares of Biotest, and (iii)
pay interest, fees and expenses related to the transaction.

RATINGS RATIONALE

The assignment of a B3 rating to the new senior unsecured notes
issued by the Escrow Issuer considers that, once the acquisition of
Biotest is consummated, the notes will be unconditionally
guaranteed by Grifols S.A. and each of the subsidiaries that
guarantee Grifols' existing senior unsecured notes due 2025 and
2027 and will rank pari passu with these B3-rated notes.
Subsidiaries guaranteeing the new notes will represent about 70% of
Grifols' 2020 EBITDA. Proceeds from the notes' issuance will be
initially put in escrow accounts until the acquisition is
consummated. If the acquisition has not taken place by a certain
date, the funds will be returned to bondholders.

Grifols' B1 CFR reflects its good market position and vertical
integration in human blood plasma-derived products; favourable
fundamental drivers supported by growing healthcare spending in
emerging markets, better diagnostics and new products; high
barriers to entry because of regulation, customer loyalty and
capital intensity; as well as good safety track record.

However, the B1 CFR is constrained by the company's high leverage,
with Moody's-adjusted debt/EBITDA of 6.8x for the 12 months ended
June 30, 2021, pro forma the Biotest acquisition; its concentration
on human blood plasma-derived products, which creates procurement
risk with lower plasma collection volumes and higher donor fees
induced by the COVID pandemic; an aggressive financial policy, with
frequent debt-funded acquisitions and transactions with related
parties; and sanitary risk, although the company has set up
stringent control procedures.

Under its ESG framework Moody's regards the coronavirus outbreak
and the effects that this has had on plasma collections as a social
risk and the company's more aggressive financial policy as a
governance risk.

STRUCTURAL CONSIDERATIONS

Grifols reported EUR7.7 billion in financial debt as of June 30,
2021, to which EUR2.0 billion will be added to fund the Biotest
acquisition, bringing total debt to about EUR9.7 billion on a pro
forma basis. This comprises a mix of senior secured debt
instruments (term loans, RCF and notes) rated Ba3, one notch above
the CFR, and senior unsecured debt instruments (existing notes and
new EUR2.0 billion equivalent notes due 2028) that are ranked
behind the senior secured debt in the waterfall and are rated B3,
two notches below the CFR. All these instruments benefit from
guarantees of subsidiaries representing about 70% of Grifols'
EBITDA. The senior secured debt instruments benefit from collateral
which includes among others certain tangible and intangible assets
and plasma inventories.

RATIONALE FOR THE NEGATIVE OUTLOOK

The negative outlook reflects Moody's view that Grifols may not be
able to improve its leverage below 6.0x in the next 12 to 18
months, considering the ongoing effects from the pandemic, the need
to integrate various acquired companies and its active strategy to
expand its plasma collection network. A stabilization of the
outlook is, however, likely if there is evidence that the company
is committed to reducing leverage and strengthening its balance
sheet, cash flow generation and liquidity.

ESG CONSIDERATIONS

The COVID pandemic, which Moody's have considered as a social risk
under Moody's ESG framework, has increased plasma collection prices
and reduced supply with Grifols' plasma collection declining by
about 15% in 2020. Plasma collection levels remained low in H1
2021. Considering a gradual recovery in plasma collection and the 9
to 12-month time lag between collection and sale of plasma-derived
products, Grifols' revenue and profits will continue to be affected
in H2 2021 and 2022.

With regards to governance, Grifols has a high tolerance for
leverage, a history of debt-funded acquisitions and some material
related party transactions. This has been further illustrated by
the acquisitions announced by the company since the beginning of
2021, totaling about EUR2.5 billion, all debt or cash funded, at a
time of already elevated leverage.

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

A rating upgrade is unlikely over the next 12 months in light of
the negative outlook. Over time, the rating agency could upgrade
Grifols' rating if it achieves a Moody's-adjusted debt/EBITDA ratio
of less than 5.0x and cash flow from operations (CFO)/debt of more
than 10%. A positive rating action would also require that Grifols
commits to maintaining a financial policy commensurate with a
higher rating.

Conversely, Moody's could downgrade Grifols if it looks unlikely
that it will be able to bring its Moody's-adjusted debt/EBITDA down
to below 6.0x by the end of 2023; if its Moody's adjusted free cash
flow is forecast to stay negative beyond 2022; or if its liquidity
becomes weak. Further evidence that the company is adopting more
aggressive financial policies could also lead to negative rating
pressure.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Medical Product
and Device Industry published in June 2017.

COMPANY PROFILE

Grifols, headquartered in Barcelona, Spain, is a global healthcare
company that is primarily focused on human blood plasma-derived
products and transfusion medicine. Its Bioscience division involves
the extraction of proteins from human blood plasma and the use of
these proteins to produce and distribute therapeutic medical
products to treat a range of rare, chronic and acute conditions.
Grifols also supplies devices, instruments and assays for clinical
diagnostic laboratories. It generated EUR5.3 billion in revenue and
EUR1.3 billion in Moody's-adjusted EBITDA in 2020.


GRIFOLS SA: Fitch Assigns First Time 'BB-' LT IDR, Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has assigned a Long-Term Issuer Default Rating (IDR)
of 'BB-' to Grifols, S.A. (Grifols) and its subsidiaries Grifols
Worldwide Operations USA, Inc and Grifols Worldwide Operations
Limited. The Outlook is Stable. Fitch has also assigned Grifols'
senior secured debt ratings of 'BB+'/RR2, and ratings of 'B+'/'RR5'
to senior unsecured debt issued by Grifols' subsidiaries, as well
as a 'B+(EXP)'/'RR5' rating to the new EUR2 billion senior
unsecured note to be issued by Grifols.

The assignment of the final senior unsecured note rating to the new
notes is subject to transaction completion being materially in line
with the current terms.

Grifols' 'BB-' IDR reflects its strong business profile underpinned
by sizeable cost-efficient operations, leading global market
positions across its core plasma-derived medical products and
healthy operating and cash flow margins. However, the IDR is
strongly constrained by a high financial leverage given aggressive
financial policies and the debt-funded expansion strategy.

The Stable Outlook reflects Fitch's expectation of dynamic
deleveraging in 2023 and 2024 following very high leverage in 2021
and 2022 due to a temporary pandemic-driven hit to operating
underperformance and the acquisition of Biotest AG. Concretely,
Fitch models a restoration of leverage from a pandemic-disrupted
funds from operations (FFO) net leverage around 8.5x in 2021
towards 5.0x in 2024, supported by a conservative financial policy
in combination with a well-executed integration of Biotest leading
to new product launches and operating synergies, against the
backdrop of receding pandemic pressures.

KEY RATING DRIVERS

Leading Player in Attractive Niche: Fitch's rating assessment
reflects Grifols top-three position in the oligopolistic
plasma-derivatives market, a fast-growing market estimated to grow
at 8%-9% a year driven by positive structural trends such as the
increased use of plasma derivatives for the manufacturing of
biologic drugs for existing and new indications. The plasma
derivatives market benefits from barriers to entry due to the
complex and highly regulated collection, handling and processing of
plasma, the importance of scale given the sector's high
capital-intensity, as well as a reliable access to human blood
plasma - the key raw material.

At the same time, compared with innovative pharmaceuticals, this
niche is more exposed to cost and price pressure given the
chronically undersupplied plasma market and little product
differentiation between manufacturers of plasma-derived medicines,
with intellectual property protection being of less relevance. As
one of the larger sector constituents, Grifols is well placed to
defend its competitive market position through its vertical
integration securing plasma supply and running cost-efficient
operations.

No Rating headroom, Financial Policy Key for 'BB-' IDR: Fitch views
a lack of financial discipline and deviation from the current
commitment to deleveraging are key risks to the 'BB-' IDR as the
current financial leverage is not aligned with the rating leading
to very limited rating headroom. Fitch's Stable Outlook however
reflects its deleveraging assumptions, relying on the company's
public commitment to achieve a reported net debt/EBITDA target
leverage of 4.0x by 2023, which corresponds to Fitch's FFO net
leverage between 5.0x and 5.5x (appropriate for Grifols 'BB-'
rating). Fitch does not expect Grifols to make any large asset
disposals to repay debt, despite having the capacity to do so.

Instead, Fitch estimates deleveraging will come from a combination
of organic EBITDA growth, stemming particularly from new product
launches in 2023/2024, and the company's commitment to abstaining
from shareholder distributions and larger scale M&A.

Persistently Weak Leverage: Grifols has historically maintained
persistently weak leverage reflecting its aggressive financial
policy, with FFO net leverage fluctuating between 5.0x and 5.5x.
However, Fitch expects pandemic-related operating underperformance
in 2021-2022 and the debt-financed EUR2 billion acquisition of
Biotest to lead to FFO net leverage around 8.5x, which is excessive
for the rating. Fitch views this leverage level as temporary and
expect a recovery in performance in 2023 and 2024, as plasma
availability improves and Grifols can benefit from increased
capacity utilisation levels, further supported by new product
launches and Biotest integration synergies.

Deleveraging will have to be supported by corporate actions around
capital allocation and shareholder distribution in line with the
communicated policies by the company to investors. Fitch projects
that FFO net leverage will improve to around 5.5x by 2023, which is
high, but can be accommodated by Grifols' strengthened business
profile following the acquisition.

Plasma Shortage Affect Margins Through 2022: Fitch expects that
Grifols' EBITDA margins will materially decline to about 20% in
2021 and 2022 against the pre-pandemic levels of 26%-27%. Mobility
restrictions and reduced blood donation activity during the
pandemic have further exacerbated plasma shortage in an already
undersupplied market, and have led to increased input prices and
lower capacity utilisation levels. Fitch estimates this temporary
supply dislocation will affect Grifols' operating profitability
until end-2022, given the time lag between plasma procurement and
product sale of up to 18 months.

Timely Integration, Product Launches Critical: The timely
integration of Biotest with new product launches from 2023 and the
full achievement of operating synergies are critical to a
structural EBITDA margin improvement towards 30% (Fitch-defined,
excl. IFRS 16) from the pre-pandemic level of 27%, driving
deleveraging.

The transaction bears compelling industrial logic, particularly as
Grifols will gain access to Biotest's two late-stage plasma
proteins with complementary research competencies, in addition to
extending its plasma collection network and manufacturing capacity
in the attractive German market. Fitch regards the integration risk
as manageable, supported by the cultural fit and business model
commonalities between the two companies, and Grifols' record of
inorganic growth management.

Healthy FCF: Fitch's rating reflects Grifols' intrinsic
cash-generative profile, excluding the impact of the pandemic, with
mid-to-high single-digit free cash flow (FCF) margins (low teens
before dividends), serves as a counterweight to its levered balance
sheet and sets the company apart from the lower-rated sector
constituents, which Fitch has captured in the rating sensitivities.
The inability to maintain this FCF profile from 2023 would signal
weakening business quality and, together with Grifols' already
stretched financial leverage, could no longer support the 'BB-'
IDR.

GIC Transaction Leverage Neutral: Fitch treats the pending disposal
of a 23% minority stake in Grifols' US-based blood collection
subsidiary Biomat to the Government of Singapore Investment
Corporation (GIC) as neutral to the leverage, given the debt-like
features of its contractual terms and structural seniority to the
group debt issued at the parent and main operating subsidiaries
level.

Fitch estimates that recovering plasma collection volumes seen this
year in the US and Europe will ease the price situation and,
together with increasing processing volumes, will support
profitability normalisation from 2023, given the commodity nature
of plasma riven by supply/demand dynamics.

Volatile Plasma Sourcing: The pandemic has exemplified the
sensitivity of Grifols' operations to supply economics of plasma.
The main factor influencing plasma availability is the national
policy on donation and economic incentives for blood donors. The US
is the largest plasma market, with plasma exported globally. Europe
currently imports about 60% of its plasma (37% from the U.S.), with
four European countries (Austria, Czech Republic, Germany, and
Hungary) contributing more than 55% of the total amount of plasma
collected within Europe.

These countries allow the coexistence of public and privately owned
collection centres and compensate donors for expense and
inconvenience related to the donation. National policy changes
incentivising blood donation could resolve plasma shortages. Rising
plasma demand and lack of improvement on plasma collection policies
will remain a sensitive topic and may in the long run lead to
declining margins for manufacturers of plasma-derived medicines.

Concentrated Portfolio, M&A Improves Business Risk: In Fitch's
view, Grifols remains a medium-sized pharmaceutical firm with a
concentrated product portfolio (about 80% of revenue and EBITDA
generated from plasma derivatives) and a high exposure to the US
market (about 70% of revenue). The transformational acquisition of
Biotest will primarily strengthen Grifols' product pipeline and
innovation capabilities, in addition to broadening its scale and
geographic footprint boosting revenue and cost synergies.

At the same time, Grifols' business risk has improved following
numerous acquisitions of businesses and production assets,
evidenced in its high operating and cash flow margins for the
sector.

DERIVATION SUMMARY

Fitch rates Grifols using the framework laid out in
Pharmaceuticals: Ratings Navigator Companion.

Grifols stands out as one of the most sizeable sector issuers in
the non-investment-grade space, with a compelling business model in
terms of global market position in core products, strong operating
profitability and strong FCF generation, albeit with a heavy
reliance on the performance of four main plasma-derived medicinal
products responsible for well over 50% of its sales. Its financial
risk is the main rating constraint, with FFO net leverage sustained
around 5.5x.

Other 'BB' category pharma peers such as Teva Pharmaceuticals
Industries Limited (BB-/Negative) and Avantor Funding Inc.
(BB/Stable) have sizeable well diversified operations, whereas
Avantor's more conservative financial risk profile supports a
higher IDR, and Teva's substantial indebtedness and reduced
financial flexibility position it one-notch lower than Grifols
despite being the largest Fitch-rated non-investment-grade company
in the peer group.

The IDR of Grunenthal Pharma GmbH & Co. Kommanditgesellschaft
(BB/Stable) is driven by its very conservative financial risk
profile and financial policies, in combination with healthy cash
flow, offsetting organic portfolio volatility.

The IDR of Nidda Bodco GmbH (Stada; B/Stable) is of limited
comparability to Grifols from a business model point of view;
nevertheless, it shows some similarity in Fitch's rating approach
as it reflects Stada's sturdy 'BB' business quality as a regional,
well-diversified pharma manufacturer with aggressive low 'B'/'CCC'
level of the financial risk.

The lower ratings of pharma peers such as CHEPLAPHARM Arzneimittel
GmbH (B+/Stable), Pharmanovia Bidco Ltd (B+/Negative) and European
Medco Development 3 S.a.r.l. (B/Stable) reflect their much smaller
operations, with concentrated product portfolios, although in the
case of Cheplapharm and Pharmanovia, they also reflect highly
cash-generative asset-light portfolios with FFO leverage of below
6.0x.

KEY ASSUMPTIONS

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

-- Cash acquisition of Biotest for EUR2.0 billion in mid-FY22.
    Bolt-on acquisition of EUR600 million in FY21, EUR150 million
    in FY22, EUR500 million in FY23 and EUR1 billion in FY24.
    Disposal proceeds of EUR150 million in FY22;

-- Proceeds from the sale of a minority stake in Biomat to GIC of
    EUR840 million in FY21 treated as debt by Fitch;

-- High-single digit sales decline in FY21, driven by the
    bioscience division and negative currency effects;

-- Low teens sales growth in FY22 and FY23, driven by a recovery
    of the bioscience division and the acquisition of Biotest in
    mid-FY22. Mid-single digit organic sales growth in 2024;

-- Temporary decline in EBITDA margin (excluding the contribution
    of associate Shanghai RAAS) to about 20% in FY21 and FY22,
    caused by the Covid-19-related impact of increasing plasma
    collection costs;

-- Recovery in EBITDA margin towards 28% in 2023 and 29.5% in
    2024, as raw material costs normalise and Biotest's new
    products are launched and become accretive to margins;

-- Working capital outflows averaging EUR150 million over FY21
    FY24;

-- Capex moderating to EUR300 million in FY21 and EUR250 million
    in FY22, followed by an increase to EUR350 million in FY23 and
    EUR400 million in FY24;

-- Effective tax rate at 18% over the rating horizon;

-- No cash dividend paid in FY22 and FY23. Return of dividend in
    FY24 with a 40% dividend payout; and

-- Acquisition of treasury shares of EUR126 million in FY21. No
    acquisition of treasury shares beyond FY22.

KEY RECOVERY ASSUMPTIONS

Fitch uses a generic approach.

Based on the combination of US (about 70%) and non-US assets and
enterprise value in Grifols, Fitch treats the senior secured debt
as category 2 first-lien instruments, leading to a 'BB+'/ 'RR2'
senior secured rating. Fitch applies a minus one-notch to the IDR,
leading to the rating of 'B+'/'RR5', given a multi-tier debt
structure with a high amount of prior ranking debt, which is
guaranteed by the same entities as for senior unsecured debt, with
materially reduced recovery prospects for the senior unsecured debt
class.

RATING SENSITIVITIES

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

-- Disciplined financial policy with FFO gross leverage below
    5.0x (net 4.5x);

-- (CFO - Capex)/Total debt with equity credit sustainably above
    7.5%;

-- Increased product diversification, reducing reliance on plasma
    derivatives.

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

-- Diminished prospects for FFO gross leverage remaining below
    6.0x (net 5.5x) on a sustained basis;

-- (CFO - Capex)/Total debt with equity credit sustainably below
    5%;

-- Biotest integration challenges, delays in new product launches
    or weakened cost management leading to decelerating sales and
    EBITDA margins (Fitch-defined, excl. IFRS 16) declining
    towards 20%;

-- Low single-digits FCF margin on a sustained basis;

-- FFO interest coverage persistently below 3.0x.


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

Adequate Liquidity: The group has adequate liquidity thanks to the
lack of significant debt maturities until 2025. As of end
June-2021, the group had EUR398 million (EUR580 million at
end-2020) in cash and pro-forma for the GIC transaction to close by
year-end, with the proceeds to repay the current drawdown of about
USD600 million, restoring its fully availability under a committed
revolving credit facility to USD 1 billion maturing in 2025, which
cover debt maturities over 2021-2024 of under EUR1 billion.

Grifols has arranged a bridge facility for the USD2 billion
acquisition of Biotest and is in the process of replacing them
through an issuance of senior unsecured bond.

ISSUER PROFILE

Grifols, S.A. is a global company specialising in the
hemotherapy/plasma derivatives sector - the medical discipline that
treats disease using blood components/proteins derived from human
plasma.

ESG CONSIDERATIONS

Grifols has an ESG Relevance Score of '4' for Governance Structure
and Group Structure due to the company's concentrated ownership and
complex group structure with some material related party
transactions due to operational collaboration with other
family-owned businesses. The concentrated ownership leads, in
Fitch's view, to a dominant family-centric decision-making allowing
the company to pursue a very aggressive debt-funded growth strategy
resulting in high indebtedness levels for a listed company, while
complex intertwined business transactions with family entities -
albeit conducted at arm's length - raise transparency questions,
both of which have a negative impact on the credit profile and are
relevant to the rating in conjunction with other factors.

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


LORCA HOLDCO: Moody's Lowers CFR to B2 on Euskaltel Transaction
---------------------------------------------------------------
Moody's Investors Service has downgraded to B2 from B1 the
corporate family rating and to B2-PD from B1-PD the probability of
default rating of Lorca Holdco Limited, the ultimate parent of
MasMovil Ibercom, S.A. ("MasMovil" or the "company"), the
fourth-largest telecom operator in Spain.

Concurrently, Moody's has confirmed the B1 ratings of the existing
and new secured debt issued by Lorca Finco PLC and the B1 ratings
of existing and new senior secured notes issued by Lorca Telecom
Bondco, S.A.U.. Moody's has assigned B1 ratings to the new secured
debt issued by Lorca Finco and Lorca Telecom Bondco, S.A.U. Moody's
has also assigned a Caa1 rating to the new EUR500 million senior
unsecured notes to be issued by Kaixo Bondco Telecom, S.A.U.

The outlook on the ratings is stable.

This rating action concludes the review for downgrade initiated on
March 31, 2021.

The rating action follows the completion of MasMovil's acquisition
of Euskaltel, S.A. ("Euskaltel") for EUR3.5 billion, equivalent to
an EV/EBITDA multiple of around 10x, before synergies.

"We have downgraded MasMovil to B2 because the debt-financed
acquisition of Euskaltel will result in initial leverage peaking at
over 6x, with a gradual deleveraging towards 5x by 2023. These
leverage levels are above the expectations for the previous B1
rating," says Carlos Winzer, a Moody's Senior Vice President and
lead analyst for MasMovil.

"However, we have also factored in that following the acquisition
of Euskaltel, MasMovil will enhance its business profile, scale,
market position and resilience," adds Mr Winzer.

RATINGS RATIONALE

The downgrade of MasMovil's CFR to B2 from B1 reflects the
significant increase in leverage following the acquisition of
Euskaltel, which is no longer commensurate with the previous CFR
level. Moody's notes that prior to this transaction, MasMovil's
rating was already weakly positioned at the B1 level.

The rating action factors in the governance considerations
associated with the company's financial strategy and risk
management. This fully priced acquisition reflects a higher
tolerance for leverage than previously anticipated, as it has been
fully funded with EUR3.55 billion of incremental debt.

MasMovil's leverage will increase from Moody's previous expectation
of around 4x to above 6x in 2021. However, Moody's expects gradual
deleveraging towards 5x by 2023.

This deleveraging will be supported by mid-single digit revenue
growth in 2022 and 2023 driven by strong subscriber growth, growing
convergence and increased fiber coverage. With the synergies from
the integration with Euskaltel and an increasingly efficient
operating cost structure supported by the customer migration to
MasMovil's network, the company's Moody's adjusted EBITDA margin
will likely improve from 39.5% in 2021 to around 42% in 2023.

Moody's expects MasMovil to continue generating negative free cash
flow (FCF) in the next 12-18 months because of high capex to reach
over 28 million FTTH homes by 2022. Also, integration costs will
hit free cash flow in 2021. Investments will progressively come
down from 2022 onwards, driving positive FCF from 2023 and
supporting deleveraging.

From a business risk perspective, Moody's recognizes the benefits
of Euskaltel's acquisition for MasMovil, as it will improve its
scale and position in the Spanish market and provide cost savings
opportunities, factors which will partially offset the high initial
leverage and weak credit metrics.

However, MasMovil is creating an infrastructure NetCo and will sell
a majority stake for at least EUR500 million (cash proceeds), which
partially mitigates the increase in debt. MasMovil will own a
minority stake in the NetCo, which will be fully deconsolidated
with MasMovil not controlling the entity.

The company has grown rapidly through organic growth and M&A over
the past 5 years and has evolved from a challenger to a
well-positioned competitor in its relevant market segments. It has
built a track record of delivering operating performance targets,
including KPIs, revenue growth and margin improvements. It has also
reduced the uncertainties related to the renewal of some of the
previous infrastructure related contracts (with an average length
of 20 years) and contributed to MasMovil's focus in maximizing the
quality of service, in terms of coverage and customer experience.

Moody's also notes that the company has a financial policy focused
on (1) sustainably de-leveraging below 5.0x (on a reported basis);
and (2) not distributing dividends until 2023 and then subject to a
4.0x net leverage threshold.

The B2 rating reflects: (1) the quality of the company's management
and the successful execution of its challenger strategy in Spain
since its establishment in 2006; (2) its objective to grow its
fixed telecom business, while maintaining strong growth in mobile,
partially underpinned by its fibre-to-the-home (FTTH) co-investment
and wholesale agreements; (3) its smart non-disruptive price
strategy, which takes advantage of an increasingly polarised
market; (4) consistent revenue growth, with strong net adds and
increasing market share as the company operates a successful
multibrand strategy; and (5) cost-cutting because of operating
efficiencies, synergies and contractual agreements to achieve
owner-economics in the use of networks, which underpins EBITDA
margin approaching 39.5% in 2021.

The rating also reflects the group's (1) high initial leverage of
above 6x following the acquisition of Euskaltel; (2) significant
reliance on wholesale agreements resulting from the hybrid (owned,
co-shared and access to third-party infrastructure) network
business model, which also increases the complexity of the analysis
of MasMovil's operating and financial profile; (3) weak convergent
fixed-mobile strategy with rich TV content, which, in Moody's view,
exposes MasMovil to the need to eventually evolve its business
model to convergent offers with richer content; (4) exposure to a
challenging competitive environment in which the four large Spanish
operators strive to defend market shares; (5) negative free cash
flow (FCF) until at least year end 2022; and (6) acquisitive track
record, with a history of significant debt-financed M&A.

LIQUIDITY

MasMovil's liquidity is adequate, supported by an estimated cash
balance of around EUR224 million as of June 2021, improving cash
flow generation, good covenant headroom, an extended maturity
profile with no material debt maturities until 2027, and full
availability under the EUR750 million committed facilities.

However, MasMovil's liquidity profile is perceived to be somewhat
weaker relative to peers, given the use of commercial paper and the
reliance on its RCF needed to offset negative free cash flow and
high integration costs in 2021 and 2022.

STRUCTURAL CONSIDERATIONS

Lorca's Probability of Default Rating of B2-PD is in line with the
CFR, reflecting the use of a family recovery rate of 50%, which is
standard for capital structures that include both loans and bonds.

The B1 rating on the senior secured debt instruments is one notch
above the B2 CFR, reflecting these instruments' priority claim and
the amount of debt below the senior secured borrowings that would
absorb first losses in a default scenario. All senior secured debt
ranks pari passu and benefits from the same security package, which
mainly consists of share pledges.

The senior unsecured notes are rated Caa1, two notches below the B2
CFR because of their contractual subordination to the secured debt
instruments.

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

Upward rating pressure could be exerted over time if the company
delivers on its business plan with an improved operating
performance and revenue trends while it demonstrates a conservative
financial policy driving sustained deleveraging, such that its
Moody's-adjusted gross debt/EBITDA trends towards 5.0x, and its
free cash flow generation becomes positive on a sustained basis.

Downward rating pressure could emerge if: (1) MasMovil's operating
performance deteriorates leading to weaker credit metrics, such as
Moody's-adjusted gross debt/EBITDA sustainably above 6.0x; (2) the
company conducts large debt-funded M&A or shareholder distributions
that make the company deviate from the deleveraging path; or (3)
its liquidity deteriorates.

LIST OF AFFECTED RATINGS

Downgrades:

Issuer: Lorca Holdco Limited

LT Corporate Family Rating, Downgraded to B2 from B1

Probability of Default Rating, Downgraded to B2-PD from B1-PD

Confirmations:

Issuer: Lorca Finco PLC

BACKED Senior Secured Bank Credit Facility, Confirmed at B1

Issuer: Lorca Telecom Bondco, S.A.U.

BACKED Senior Secured Regular Bond/Debenture, Confirmed at B1

Assignments:

Issuer: Kaixo Bondco Telecom, S.A.U.

BACKED Senior Secured Regular Bond/Debenture, Assigned Caa1

Issuer: Lorca Finco PLC

BACKED Senior Secured Bank Credit Facility, Assigned B1

Issuer: Lorca Telecom Bondco, S.A.U.

BACKED Senior Secured Regular Bond/Debenture, Assigned B1

Outlook Actions:

Issuer: Kaixo Bondco Telecom, S.A.U.

Outlook, Assigned Stable

Issuer: Lorca Finco PLC

Outlook, Changed To Stable From Rating Under Review

Issuer: Lorca Telecom Bondco, S.A.U.

Outlook, Changed To Stable From Rating Under Review

Issuer: Lorca Holdco Limited

Outlook, Changed To Stable From Rating Under Review

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was
Telecommunications Service Providers published in January 2017.

COMPANY PROFILE

Lorca Holdco Limited, the parent company of Masmovil Ibercom, S.A.,
headquartered in Madrid (Spain), is the fourth-largest telecom
operator in Spain offering fixed line, mobile and broadband
services to residential and business customers. The company has
nine million customers and operates through its main brands Yoigo,
Masmovil, Pepephone, Llamaya, Lebara, and Lycamobile. In the last
twelve months ended June 2021, Masmovil reported service revenue of
EUR1.9 billion and EBITDA of EUR642 million.


LORCA TELECOM: S&P Lowers ICR to 'B', Outlook Stable
----------------------------------------------------
S&P Global Ratings downgraded Lorca Telecom Bidco SA (MasMovil) to
'B' from 'B+', and assigned a 'B' rating to its EUR800 million
senior secured term loan B (TLB) and EUR1.75 billion senior secured
notes. S&P also assigned a 'CCC+' rating to Kaixo Bondco Telecom's
EUR500 million senior unsecured notes.

The outlook on both entities is stable, reflecting its expectation
that MasMovil's leverage will remain above 5.5x through 2022, while
generating positive but minimal FOCF.

Lorca Telecom, the holding company of MasMovil group, is placing
EUR3.05 billion of underwritten debt related to the acquisition and
existing debt refinancing of Euskaltel S.A., including a EUR500
million subordinated facility via financing subsidiary Kaixo Bondco
Telecom SAU.

S&P said, "Lorca Telecom's leverage will remain elevated through
2022, along with minimal FOCF generation. Pro forma for the
acquisition of Euskaltel, we expect Lorca Telecom's adjusted
leverage will remain elevated at about 6.4x in 2021 pre-synergies,
before declining to 5.6x-5.8x in 2022 and about 5.0x in 2023. We
forecast that Lorca Telecom will generate negative reported FOCF
after leases in 2021, before turning moderately positive in 2022
and exceeding EUR200 million in 2023. Adjusted FOCF to debt will be
about 1.5%-2.0% in 2022, improving to 4.0%-5.0% in 2023. We believe
that the sale of HFC assets to the Netco and its deconsolidation
from Lorca Telecom will not impact MasMovil's business, since the
company will still have a 25-year exclusivity contract with the
Netco, and given that proceeds from the sale will be utilized to
repay its bridge facility.

"Our view of MasMovil's business profile has improved as it has
strengthened its market position over the past few years. We
believe that Lorca's market position and share has materially
improved in both fixed broadband and mobile since 2018 when it was
ranked No. 4 in the Spanish market. With a 24% mobile market share,
the company now ranks No. 2 along with Orange, and closely behind
Telefonica's 25% market share. MasMovil remains the No. 4 fixed
broadband player, but has significantly bridged the gap (from 8%
market share in 2018 to 18% in 2021), following Vodafone with a 19%
market share. MasMovil has also strengthened its network position,
reaching nearly the entire Spanish market with advanced FTTH and 5G
network offerings.

"We expect management will remain prudent, with a conservative
financial policy, and focus on deleveraging. We believe that Lorca
Telecom's management will remain focused on deleveraging by both
EBITDA expansion and debt repayment. We assume that any cash
balance above EUR100 million will be utilized to repay the
outstanding commercial paper (CP). This results in full CP
repayment by the end of 2023 in our forecast. Furthermore, we have
also not factored in any mergers and acquisitions, or distributions
to shareholders into our forecast. We also assume that the current
outstanding shareholder loan and loans from Key Wolf and Onchena
totaling EUR224.3 million will be equitized. Any deviations on the
financial policy might have an impact on our current assessment.

"The stable outlook reflects our expectation that MasMovil's
leverage will remain above 5.5x through 2022. We expect
deleveraging from an elevated starting point above 6x after the
Euskaltel acquisition prior to synergies, and that adjusted debt to
EBITDA will decline to about 5.0x in 2023. We also expect adjusted
FOCF to debt will turn positive in 2022. This is supported by our
forecast for continued organic revenue growth and adjusted EBITDA
margin improvement to sustainably above 40%. At the same time,
execution risk against the business plan and integration create
uncertainties around the achievement and timing of the forecast,
particularly given the potential for add-on spending in the highly
competitive Spanish as well as Portuguese markets.

"We could consider raising our rating if MasMovil is able to
execute its business plan to continue increasing its fixed
broadband and mobile market share at a high pace, and successfully
integrate Euskaltel and its network upgrade, such that its adjusted
EBITDA margin remains sustainably above 40%. An upgrade could occur
if these developments lead to positive adjusted free cash flow
generation over EUR300 million (above EUR200 million reported after
leases), combined with EBITDA growth resulting in adjusted leverage
declining sustainably below 5.5x, along with a track record of
financial policy commitment to maintain these levels.

"We could lower the ratings if reported FOCF after leases remains
negative, and adjusted debt to EBITDA rises above 7x for a
prolonged period. This could stem from lower-than-expected revenue
or EBITDA growth, higher capital expenditure (capex), additional
acquisitions, or financial policy decisions that increase
leverage."


TDA 29 FTA: Fitch Affirms CCC Rating on Class D Debt
----------------------------------------------------
Fitch Ratings has upgraded one tranche of TDA 30, FTA and three
tranches of TDA 29, FTA and affirmed one tranche. Fitch has also
removed two tranches from Rating Watch Positive (RWP).

       DEBT                  RATING             PRIOR
       ----                  ------             -----
TDA 30, FTA

Series A ES0377844008    LT  AAAsf  Upgrade     AAsf

TDA 29, FTA

Class A2 ES0377931011    LT  AAAsf  Upgrade     A+sf
Class B ES0377931029     LT  A+sf   Upgrade     BBB+sf
Class C ES0377931037     LT  BB+sf  Upgrade     BB-sf
Class D ES0377931045     LT  CCCsf  Affirmed    CCCsf

TRANSACTION SUMMARY

The transactions comprise fully amortising Spanish residential
mortgages originated and serviced by Banco de Sabadell, SA
(BBB-/Stable/F3) and Banca March (not rated) for TDA 29, and by
Banca March for TDA 30. Credit enhancement (CE) consists of
over-collateralisation and cash reserves.

KEY RATING DRIVERS

Performance Outlook, Removal of Additional Stresses: The rating
actions reflect the broadly stable asset performance outlook. This
is driven by the low share of loans in arrears over 90 days
(ranging between 0.4% and 0.6% of the collateral balance) and the
improved macro-economic outlook for Spain, as described in Fitch's
latest Global Economic Outlook dated September 2021.

The rating analysis reflects the removal of the additional stresses
in relation to the coronavirus outbreak and legal developments in
Catalonia as announced on 22 July 2021.

Payment Interruption Risk Cap in TDA 29 Removed: Fitch considers
payment interruption risk (PIR) in TDA 29 to be mitigated in the
event of a servicer disruption event. Fitch deems the available
cash reserve that can be depleted by losses sufficient to cover
stressed senior fees, net swap payments and senior note interest
due amounts while an alternative servicer arrangement was
implemented.

The reserve fund has remained fully funded since 2016,
demonstrating consistent coverage of PIR exposure. Fitch expects
the reserve to remain sufficiently funded in the medium term, based
on the transaction's current performance and expected economic
stability. As a result, Fitch has removed the 'A+sf' cap on the
notes' rating, in line with its Structured Finance & Covered Bonds
Counterparty Rating Criteria.

Increased Credit Enhancement: The affirmations and upgrades reflect
Fitch's view that the notes are sufficiently protected by credit
enhancement (CE) to absorb the projected losses commensurate with
prevailing and higher rating scenarios. Fitch expects CE ratios for
both transactions to remain broadly stable due to the prevailing
pro-rata amortisation of the notes, which Fitch expects to continue
as the current portfolio balances range between 22.4% and 30.9% of
their initial amounts. This means the mandatory switch to
sequential, applied when the portfolio reaches 10% of the initial
balance, is not imminent.

Fitch's analysis of TDA 30 is subject to a portfolio loss floor and
the TDA 29 analysis is subject to a performance adjustment factor
floor of 100%, which reflects the repurchase of some defaulted
loans in the past by the originator as per Fitch's European RMBS
Rating Criteria.

TDA 30 Swap Counterparty Triggers Breached: Fitch has not given
credit to the interest rate swap arrangement in TDA 30, as the
ratings of the hedge provider (Banco Santander S.A.;
A-/Negative/F2) are not in line with the contractually defined
applicable minimum eligibility triggers of 'A' and 'F1', and
transaction parties have confirmed no restructuring or remedial
actions will be implemented. The swap is a total return swap that
guarantees an excess margin of 55bp. Its exclusion leaves the
transaction exposed to excess spread reduction.

ESG Considerations - Governance:TDA 30 has an Environmental, Social
and Governance (ESG) Relevance Score of '5' for Transaction Parties
& Operational Risk as the hedge provider is not in line with the
contractually defined minimum eligibility triggers and transaction
parties have confirmed no restructuring or remedial actions will be
implemented, which has a negative impact on the credit profile and
is highly relevant to the rating.

RATING SENSITIVITIES

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

-- Long-term asset performance deterioration such as increased
    delinquencies or larger defaults, which could be driven by
    changes to macroeconomic conditions, interest rate increases
    or borrower behaviour.

-- Fitch conducts sensitivity analyses by stressing both a
    transaction's base-case foreclosure frequency (FF) and
    recovery rate (RR) assumptions, and examining the rating
    implications on all classes of issued notes. A 15% increase in
    the weighted average (WA) FF and a 15% decrease in the WARR
    could result in downgrades of up to five notches.

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

-- CE ratios increase as the transactions deleverage, able to
    fully compensate the credit losses and cash flow stresses
    commensurate with higher rating scenarios. A decrease in the
    WAFF of 15% and an increase in the WARR of 15% could imply
    upgrades of up to six notches.

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
pools and the transactions. 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.

Fitch did not undertake a review of the information provided about
the underlying asset pools ahead of the transaction's initial
closing. The subsequent performance of the transactions over the
years is consistent with the agency's expectations given the
operating environment and Fitch is therefore satisfied that the
asset pool information relied upon for its initial rating analysis
was adequately reliable.

Overall, 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.

ESG CONSIDERATIONS

TDA 30, FTA has an ESG Relevance Score of '5' for Transaction
Parties & Operational Risk due to Transaction Parties & Operational
Risk as the hedge provider is not in line with the contractually
defined minimum eligibility triggers and transaction parties have
confirmed no restructuring or remedial actions will be implemented,
which has a negative impact on the credit profile, and is highly
relevant to the rating.

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




===========
S W E D E N
===========

HEIMSTADEN AB: Fitch Publishes First Time 'BB+' LongTerm IDR
------------------------------------------------------------
Fitch Ratings publishes Sweden's Heimstaden AB's first-time
Long-Term Issuer Default Rating (IDR) of 'BB+' and assigns a senior
unsecured rating of 'BB+' and a subordinated rating of 'BB-'. The
Outlook on the IDR is Stable. These ratings include the effect of
Heimstaden Bostad AB (BBB/Stable) acquiring Akelius Residential
AB's Swedish, Danish and German residential portfolios for SEK92.5
billion consideration, announced September 26, 2021.

As a shareholder, Heimstaden AB has committed a minimum SEK8.5
billion as equity for Heimstaden Bostad's acquisition, financed
from its existing cash and partly from a SEK7 billion bridge
facility. Heimstaden AB will continue to manage, and be remunerated
for, Heimstaden Bostad's enlarged portfolio - thus increasing its
revenues.

KEY RATING DRIVERS

Holding Company Function: At end-1H21 Heimstaden AB owned 45.7% of
the shareholder capital in Heimstaden Bostad, a large
residential-for-rent property company, as well as 50.3% of the
voting rights (post-Akelius pro forma: 45.3% and 50.1%,
respectively). The other shareholders are long-term Nordic
institutional investors owning various percentages of stapled
preference shares and equity, and all bound by a shareholder
agreement, which defines operational, governance, financial and
strategic parameters. Heimstaden AB itself is 70% owned (96% of
votes) by Fredensborg AS, which is almost exclusively owned by Ivar
Tollefsen.

Asset Manager Function: As well as being a holding company for this
equity stake, Heimstaden AB also has a property management
agreement with Heimstaden Bostad, remunerating its costs for
managing the existing SEK186 billion residential-for-rent portfolio
(post-Akelius pro forma: SEK274.8 billion) alongside its own small
SEK4.5 billion real estate portfolio located primarily in Iceland.

Main Income Streams: Most of the income streams of Heimstaden AB
are directly from Heimstaden Bostad and include (i) rental income
from its small real estate portfolio (not from Heimstaden Bostad);
(ii) Heimstaden Bostad remuneration for property management, which
includes an above-cost profit component; and (iii) asset management
fee at 0.2% of gross asset value (GAV) in Heimstaden Bostad, and
(iv) dividends from Class A preferred share in Heimstaden Bostad.
The Class A shares are at the top of the equity capital
remuneration waterfall.

The total of these four forms of income, net of Heimstaden AB's
operational costs, is lower than the interest expense of its core
post-Akelius acquisition - SEK14 billion bank and bond debt, SEK7
billion bridge facility, existing SEK4.5 billion hybrids and SEK2
billion preferred shares. In forecast years this reduces to around
0.85-0.9x debt service coverage. Fitch includes 100% of hybrid bond
coupons in this ratio.

Plus Heimstaden Bostad Dividends: Heimstaden AB also receives its
share of preferred B share dividends, and any ordinary equity
dividends, from Heimstaden Bostad. Upon receiving the cash
dividend, Heimstaden AB management will first retain enough
liquidity to comfortably cover its interest expense and mandatory
debt repayments before discretionally agreeing to reinvest in
Heimstaden Bostad equity. To date, consistent with the action of
other shareholders, dividends have been largely re-invested in
Heimstaden Bostad's equity capital in order for Heimstaden AB to
maintain its equity stake in Heimstaden Bostad and to enable the
subsidiary to grow and to meet its financial policy metrics.

Heimstaden AB's dividends to Fredensborg have been small, with the
2021 SEK1 billion dividend being a one-off, making Fredensborg
debt-free.

Heimstaden AB's Incremental Leverage: Incremental leverage (above
Heimstaden Bostad's debt/EBITDA metrics) includes the subsidiary's
hybrid bonds, which lose their equity credit as they rank ahead of
Heimstaden AB's own bank and bond debt, and its hybrids. This
incremental leverage at end-2020 totalled SEK9.5 billion gross debt
relative to Heimstaden Bostad's equity credit-adjusted end-2020 net
debt of SEK69.3 billion. Fitch has applied 50% equity credit to
Heimstaden AB's own hybrid bonds and preferred shares.

Comparing Heimstaden Bostad's and Heimstaden AB's proportionally
consolidated net debt/EBITDAs in Fitch's post-Akelius forecasts,
the incremental debt and its own 50% equity credit hybrids result
in Heimstaden AB's leverage being less than 3.0x higher, with both
entities measured on a gross debt basis.

Positioning of the Rating: Various factors informed the 'BB+' IDR
for Heimstaden AB. Firstly, Heimstaden AB is a holding company
reliant upon recurring, largely unsubordinated, income streams (i)
to (iv), listed above. This supports its positive standalone
EBITDA, but Fitch forecasts this to cover core interest expense
(including hybrids and preferred shares, which Fitch treats as 100%
interest paid) by 0.85-0.9x.

Secondly, the subordinated dividends from Heimstaden Bostad,
retained after discretionary re-investment, are paid after
Heimstaden Bostad's subordinated debt (its hybrids), which Fitch
rates 'BB+'. From the Heimstaden AB creditors' perspective, income
above 1x interest expense only comes from Heimstaden Bostad's
post-hybrid cashflow. Priority-wise, after receiving the cash
dividend, the board will retain liquidity to cover debt service,
then will choose to re-invest funds in Heimstaden Bostad's equity.

Thirdly, the incremental debt's effect on proportional consolidated
gross debt/EBITDA is below 3.0x, pointing to a 'BB' rating category
rating (2022: 28.7x; 2024: 24.6x). However, the incremental
loan-to-value (LTV) is 17 percentage points higher at around 70%
LTV. Fourthly, the residential-for-rent asset class generates
stable income streams, particularly given the geographic
diversification of Heimstaden Bostad's sizeable portfolio.

Quality of Income Streams Place Rating: Of the interplay between
these various factors, the reliance upon income streams (i) to
(iii), which does not cover Heimstaden AB's core interest expense,
drives a non-investment grade rating, whereas the combination of
additional subordinated dividend income can help cover debt service
- but that larger amount of cashflow is paid after servicing junior
subordinated debt at Heimstaden Bostad rated 'BB+'. Incremental
leverage at Heimstaden AB does not warrant further notching.

Hybrid Notched-Off IDR: The existing SEK4.5 billion perpetual
hybrid bonds are rated two notches below Heimstaden AB's IDR. This
reflects the bonds' deeply subordinated status, ranking behind
senior creditors and senior only to ordinary and preferred equity,
with coupon payments deferrable at the discretion of the issuer and
no formal maturity date. The securities qualify for 50% equity
credit in accordance with Fitch's Corporate Hybrid and Notching
Criteria. The instruments are expected to lose equity credit five
years before its effective maturity at the second step-up date,
when the issuer will no longer be subject to replacement language.

DERIVATION SUMMARY

There are no relevant publicly rated real estate holding company
peers to compare Heimstaden AB with.

KEY ASSUMPTIONS

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

-- Core property management fee, which includes an above-cost
    profit component, and asset management agreement fee
    (percentage of its GAV), both paid by Heimstaden Bostad,
    covering Heimstaden AB's administration expenses;

-- Increased rental income after acquisition of the Iceland
    residential portfolio in 1H21;

-- Heimstaden AB's board choose to re-invest virtually all of
    Heimstaden Bostad's dividends in its equity.

RATING SENSITIVITIES

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

-- Upgrade of Heimstaden Bostad's IDR;

-- Heimstaden AB's standalone EBITDA/interest expense coverage
    ratio above 1.5x;

-- Liquidity score above 1.0x.

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

-- Downgrade of Heimstaden Bostad's IDR;

-- Heimstaden AB's standalone EBITDA/interest expense coverage
    ratio below 1.0x;

-- Heimstaden AB's proportional consolidated gross debt/EBITDA
    greater than 3x of Heimstaden Bostad's proportional
    consolidated gross debt/EBITDA;

-- Liquidity score below 1.0x.

BEST/WORST CASE RATING SCENARIO

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

LIQUIDITY AND DEBT STRUCTURE

Recent New RCF Capacity: At 3Q21 Heimstaden AB had SEK6.5 billion
of cash and, post-end-2020, has two undrawn revolving credit
facilities (RCFs) totalling SEK1 billion. Secured debt and
unsecured debt after acquiring the Iceland residential-for-rent
portfolio during 1H21 were SEK2.3 billion and SEK11.7 billion,
respectively.

Heimstaden AB's portion of Heimstaden Bostad's Akelius
acquisition-related equity increase is SEK8.5 billion, funded from
existing cash and a SEK7 billion bridge facility.

ISSUER PROFILE

Heimstaden AB will hold 45.3% of the capital and minimum 50% of the
votes in Heimstaden Bostad (taking into account the latter's
acquisition of the Akelius portfolio). Heimstaden AB manages its
subsidiary's residential-for-rent pan-European portfolio and owns a
small residential portfolio, mainly in Iceland.

ESG CONSIDERATIONS

Heimstaden AB has an ESG Relevance Score of '4' for Governance
Structure due to its 70.8% ownership (96% of votes) by Fredensborg
SA, itself owned by family interests, which has a negative impact
on the credit profile, and is relevant to the ratings in
conjunction with other factors.

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


TELEFONAKTIEBOLAGET LM: Moody's Withdraws (P)Ba1 EMTN Rating
------------------------------------------------------------
Moody's Investors Service has withdrawn the (P)Ba1 rating of
Telefonaktiebolaget LM Ericsson's (Ericsson) EMTN programme.

RATINGS RATIONALE

Moody's has decided to withdraw the rating for its own business
reasons.

Ericsson's Ba1 corporate family rating and the Ba1 senior unsecured
rating are unaffected by the rating action. The outlook remains
stable.

COMPANY PROFILE

Ericsson is a leading provider of telecommunications equipment and
related services to telecom operators globally. Its equipment is
used by in more than 180 countries, and around 40% of the global
mobile traffic passes through its systems. In 2020, Ericsson's
Networks division contributed 71% of the group's net sales,
followed by Digital Services (DS) at 16%, Managed Services at 10%
and its Emerging Business and Other segment at 3%. The company's
net sales are well diversified geographically across all major
regions.




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

ANADOLU ANONIM: Fitch Affirms BB Insurer Financial Strength Rating
------------------------------------------------------------------
Fitch Ratings has affirmed Anadolu Anonim Turk Sigorta Sirketi's
(Anadolu Sigorta) Insurer Financial Strength (IFS) Rating at 'BB'
and National IFS Rating at 'AA+(tur). The Outlooks are Stable.

KEY RATING DRIVERS

The affirmation reflects Anadolu Sigorta's favourable business
profile in Turkey, substantial exposure to Turkish assets, notably
government bonds and local-bank deposits, and adequate
capitalisation. The rating also reflects adequate profitability and
reinsurance protection. Fitch expects the company's credit profile
to be resilient to economic and competitive pressures in 2021.

Fitch views Anadolu Sigorta's overall business profile as
'favourable', as measured against other Turkish market players,
supported by the company's very strong position in the highly
competitive Turkish insurance market. Anadolu Sigorta was the
second-largest non-life insurer in Turkey by premium income, with a
market share of 12% at end-1H21.

Most of Anadolu Sigorta's investment portfolio comprised Turkish
government bonds and deposits in Turkish banks at end-1H21. The
company's credit quality is therefore highly correlated with that
of the sovereign (Long-Term Issuer Default Rating (IDR) BB-/Stable)
and of Turkish banks.

Anadolu Sigorta's capitalisation, as measured by Fitch's Prism
Factor-Based Model, was 'Adequate' at end-2020 (end-2019:
'Adequate'). The company's regulatory solvency ratio was
comfortably above 100% at end-2020 and end-1H21.

Anadolu Sigorta's financial performance remained strong in 1H21,
with net income increasing 12% compared with 1H20. As in prior
years, profitability was driven by investment income, while
underwriting remained loss-making. The company's reported combined
ratio increased to 116% in 1H21 (1H20: 104%) driven by worsening
performance of the motor third-party liability (MTPL) line as
mobility returned to pre-pandemic levels. While Fitch expects a
deterioration in technical results in 2021, driven by more normal
claims frequency in motor and health lines, Fitch expects overall
profitability to remain supportive of the rating.

Anadolu Sigorta's 'AA+(tur)' National IFS Rating largely reflects a
robust franchise in Turkey, with total premiums growing faster than
the market in 2020, and a regulatory solvency ratio consistently
over 100%.

RATING SENSITIVITIES

IFS RATING

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

-- Material improvements in the company's investment quality and
    business-profile prospects, which could occur if Turkey's
    Long-Term Local-Currency IDR or major Turkish banks' ratings
    were upgraded.

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

-- Material deterioration in the company's investment quality and
    business-profile prospects, which could occur if Turkey's
    Long-Term Local-Currency IDR or major Turkish banks' ratings
    were downgraded;

-- Deterioration in the company's capital position, as measured
    by a regulatory solvency ratio below 100%.

NATIONAL IFS RATING

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

-- Return on equity exceeding inflation levels for a sustained
    period, provided the company's market position remains very
    strong.

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

-- Substantial deterioration of the company's market position in
    Turkey;

-- A decline in the company's regulatory solvency ratio to below
    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.

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.


KUVEYT TURK: Fitch Affirms 'B+' Foreign Currency IDR
----------------------------------------------------
Fitch Ratings has affirmed Kuveyt Turk Katilim Bankasi A.S.'s
(Kuveyt Turk) Long-Term Foreign-Currency (LTFC) Issuer Default
Rating (IDR) at 'B+' with a Stable Outlook. The bank's Viability
Rating (VR) has been affirmed at 'b+'.

KEY RATING DRIVERS

IDRS, SUPPORT RATING AND SENIOR DEBT RATING

The LTFC IDR is underpinned by both the bank's standalone
creditworthiness as expressed by its VR and support from its 62%
shareholder, Kuwait-based Kuwait Finance House (K.S.P.C.) (KFH;
A+/Negative), as reflected in its '4' Support Rating.

Our view of support reflects Kuveyt Turk's strategic importance to
its owner, integration and role within the wider group. However,
Fitch's view of government intervention risk caps the LTFC IDR at
'B+', one notch below Turkey's rating. This reflects Fitch's
assessment that weaknesses in Turkey's external finances make some
form of intervention in the banking system that would impede banks'
ability to service their foreign currency obligations more likely
than a sovereign default.

The bank's Long-Term Local-Currency (LTLC) IDR is also driven by
institutional support but is one notch higher at 'BB-', reflecting
Fitch's view of a lower likelihood of government intervention that
would impede banks' ability to service obligations in LC versus
obligations in FC. The Stable Outlook on the LTLC IDR mirrors the
sovereign Outlook.

VR

Kuveyt Turk's VR reflects the bank's reasonable company profile
(notwithstanding its small domestic market share; 2.6% of sector
assets), underpinned by its leading market share in the niche
participation banking segment (ranked first), very low funding cost
base (due to a high share of current account deposits and gold
deposits) and solid profitability metrics. This is balanced by
exposure to the challenging Turkish operating environment, the
bank's fairly high-risk appetite, as evidenced by its consistent
record of above sector average financing growth, only moderate
capitalisation and above-sector-average deposit dollarisation.

The Turkish operating environment remains highly volatile amid weak
monetary policy credibility, banks' exposure to investor sentiment
(due to high foreign currency debt), high deposit dollarisation,
lira weakness and inflationary pressures (Fitch forecast: 17.2%
inflation at end-2021). The lira depreciated 11% against the US
dollar in 8M21, exacerbated by the abrupt replacement of the
central bank governor in March 2021, and has come under further
pressure following the latest 100bp cut in the policy rate.

Nevertheless, Fitch has revised the outlook on the 'B+' operating
environment score to stable, reflecting Fitch's view that the
inherent uncertainty and volatility in the Turkish operating
environment is captured at the 'b+' level, despite persistent
downside risk to banks' financial profiles. The stable outlook
considers Turkey's resilient growth prospects (Fitch's 2021 GDP
forecast: 9.2%; 2022: 3.5%) and the easing in short-term external
financing pressures supported by a narrowing current account
deficit and a recovery in gross sovereign FX reserves, among
others. It also reflects the Stable Outlook on the sovereign rating
(BB-/Stable) - given the high interlinkages between the banking
sector and the sovereign balance sheets.

The impact of the gradual removal (expected from 4Q21) of most
regulatory forbearance measures that have supported reported asset
quality, capital and performance metrics during the pandemic is
likely to be limited for the banking sector, including for Kuveyt
Turk.

Kuveyt Turk has grown consistently above the sector average in
recent years. In 1H21 gross financing grew by 12% (FX-adjusted),
mainly driven by FC loans, versus the sector average of 4%.
However, growth is set to slow in 2H21, while financings are
generally monthly amortising. Single-name concentration risk is
moderate, with the top 25 financings equal to 14% of gross
financing (1.5x CET-1) at end-1H21.

Asset quality risks remain significant, as for the sector, given
exposure to FC financing (above the sector average at 46%; sector:
37%), given the impact of the lira depreciation on borrowers'
ability to service their FC debt as not all exposures will be fully
hedged, SMEs (34% of total financing), which are highly sensitive
to the economic climate, and the high Turkish lira interest rate
environment.

In addition, Kuveyt Turk has exposure to the risky construction
(1H21: around 10% of total financings, bank calculation) and to a
lesser extent energy sectors, which account for a high share of its
Stage 2 book. These sectors have come under pressure from operating
environment volatility, market illiquidity (real estate), the lira
depreciation (as exposures are frequently in FC while revenues are
in lira) and weak energy prices.

Nevertheless, the bank's shares of non-performing financing (NPF)
and Stage 2 financings at end-1H21 outperform the sector at 3.3%
and 8.5% of gross financing, respectively, although its asset
quality metrics are flattered by its above-average growth. Total
NPF reserves coverage was a high 211%, boosted by fairly high
reserves (33%) against Stage 2 exposures, resulting from the
individual assessment of exposures due to single-name risk in its
book.

Kuveyt Turk reported an above-sector-average operating
profit/average total asset ratio in 1H21 (1.9%, versus 1.3% for the
sector). The bank is heavily reliant on net financing income, but
its net financing margin is wide, underpinned by material low-cost
demand and gold deposits (a high 64% of deposits), which support
its low cost of funding. The net financing margin will also benefit
from the latest lira rate cut, given its liabilities reprice more
quickly than its assets. Profitability in 1H21 was further
supported by high financing growth and a below-sector-average cost
of risk (1H21: 1.4%, versus 2.1% for the sector).

Core capitalisation is only moderate, given Kuveyt Turk's risk
profile and heightened operating environment risks. Leverage is
also high, as reflected in a tangible common equity/tangible assets
ratio of just 4.2% at end-1H21. Its common equity Tier 1 (CET1)
ratio was 11.4% (including 237bp uplift from regulatory
forbearance). As an Islamic bank, it benefits from a 50% reduction
in risk weighting on assets financed by profit share accounts
(193bp uplift to its CET1 ratio). The bank's end-1H21 total capital
ratio was higher at 15% (including forbearance). It also issued a
USD350 million Tier 2 sukuk (September 2021), which will give a
further estimated 390bp uplift to the total capital ratio, while
also providing a partial hedge against lira depreciation.

Capitalisation is supported by full reserves coverage of NPFs.
Pre-impairment operating profit provides an additional buffer to
absorb losses through the income statement (1H21: equal to 4.4% of
average financing; annualised basis). Fitch's assessment of the
bank's capitalisation also reflects ordinary support from KFH.

Funding is largely sourced from customer deposits (end-1H21: a high
88% of total funding), a significant share of which is in FC,
partly reflecting increased banking sector dollarisation in 2020.
The share of FC wholesale funding is fairly limited (8% of total
funding), and below sector average. Refinancing risks are mitigated
by potential FC liquidity support from the parent.

FC liquidity is generally adequate. Fitch calculates that at
end-1H21 FC liquidity (comprising mainly cash and interbank
placements, FC reserves held under the reserve option mechanism and
unpledged government Sukuk) sufficiently covered the bank's
short-term FC non-deposit liabilities due within a year in addition
to about 24% of FC customer deposits at end-1H21. FC liquidity is
also supported by the largely monthly amortising nature of the
bank's financing book. Nevertheless, it could come under pressure
in the event of prolonged market closure or deposit instability.

In assessing Kuveyt Turk 's ratings, Fitch considers the important
differences between Islamic and conventional banks. These include a
closer analysis of regulatory oversight, disclosure, accounting
standards and corporate governance. Islamic banks' ratings do not
express an opinion on the bank's compliance with sharia. Fitch will
assess non-compliance with sharia if it has credit implications.

NATIONAL RATING

The National Rating has been affirmed with a Stable Outlook
reflecting Fitch's view that the bank's creditworthiness in LC
relative to other Turkish issuers has not changed.

SUBORDINATED DEBT

Kuveyt Turk's subordinated notes' rating is one notch below its
'B+' LTFC IDR. Fitch includes zero notches for incremental
non-performance risk, reflecting the fact that the terms of the
certificates do not provide for loss absorption on a 'going
concern' basis, and only one notch for loss severity, reflecting
Fitch's view that institutional support (as reflected in the bank's
LTFC IDR) helps mitigate losses and incorporating the fact that the
bank's LTFC IDR is already capped at 'B+', one notch below the
sovereign, reflecting Fitch's view that government intervention
risk, which would impede the bank's ability to service its FC
obligations, is more likely than a sovereign default. Fitch
considers recoveries on the notes in the event of default to be
below average, as evidenced by a Recovery Rating (RR) of 'RR5'.

RATING SENSITIVITIES

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

IDRS, SUPPORT RATING AND SENIOR DEBT RATING

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

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

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

VR

The VR is sensitive to a marked deterioration in the operating
environment, given the concentration of its operations in the
domestic market.

The bank's VR could be downgraded due to a sharp weakening in
capitalisation, which could result from a sharp rise in NPFs or
aggressive growth, or a weakening of its FC liquidity position due
to deposit outflows or an inability to refinance maturing external
obligations, if not offset by shareholder support.

NATIONAL RATING

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

SUBORDINATED DEBT RATING

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

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

IDRS, SUPPORT RATING AND SENIOR DEBT RATING

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

VR

Upside for the VR could come from a reduction in operating
environment risks, a strengthening of the bank's franchise and core
capitalisation, an improvement in investor sentiment and reduced
dollarisation of the deposit base.

BEST/WORST CASE RATING SCENARIO

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

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

The bank's LTFC IDR is underpinned by both the bank's VR, or
standalone creditworthiness, and shareholder support (Kuwait
Finance House).

ESG CONSIDERATIONS

As an Islamic bank, Kuveyt Turk needs to ensure compliance of its
entire operations and activities with sharia principles and rules.
This entails additional costs, processes, disclosures, regulations,
reporting and sharia audit. This results in a Governance Structure
relevance score of '4' for the bank (in contrast to a typical ESG
relevance score of '3' for comparable conventional banks), which
has a negative impact on its credit profile in combination with
other factors.

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

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


TURKIYE FINANS: Fitch Affirms 'B+' Foreign Currency IDR
-------------------------------------------------------
Fitch Ratings has affirmed Turkiye Finans Katilim Bankasi A.S.'s
(Turkiye Finans) Long-Term Foreign-Currency (LTFC) Issuer Default
Rating (IDR) at 'B+' with a Stable Outlook. The bank's Viability
Rating (VR) has also been affirmed at 'b+'.

KEY RATING DRIVERS

VR AND LTFC IDR

Turkiye Finans's 'B+' LTFC IDR is underpinned both by its
standalone creditworthiness as expressed by its VR, and potential
institutional support from The Saudi National Bank (SNB;
A-/Stable).

The VR reflects the bank's reasonable company profile,
notwithstanding its small overall domestic market share (1.3% of
sector assets) and challenging operating conditions, underpinned by
its well-established franchise in the niche, fast growing Turkish
participation banking segment (end-1H21: 7.5% of banking sector
assets), ordinary support from its parent, a sufficient FC
liquidity buffer and limited refinancing risk, given low FC
wholesale funding. However, it also considers Turkiye Finans's only
moderate capitalisation, heightened credit risk profile and
profitability below the sector average.

The Turkish operating environment remains highly volatile amid weak
monetary policy credibility, banks' exposure to investor sentiment
(due to high foreign currency debt), high deposit dollarisation,
lira weakness and inflationary pressures (Fitch forecast: 17.2%
inflation at end-2021). The lira depreciated 11% against the US
dollar in 8M21, exacerbated by the abrupt replacement of the
central bank governor in March 2021, and has come under further
pressure following the latest 100bp cut in the policy rate.

Nevertheless, Fitch has revised the outlook on the 'B+' operating
environment score to stable, reflecting Fitch's view that the
inherent uncertainty and volatility in the Turkish operating
environment is captured at the 'b+ level, despite some persistent
downside risk to banks' financial profiles. The stable outlook
considers Turkey's resilient growth prospects (Fitch's 2021 GDP
forecast: 9.2%; 2022: 3.5%) and the easing in short-term external
financing pressures supported by a narrowing current account
deficit and a recovery in gross sovereign FX reserves position,
among others. It also reflects the Stable Outlook on the sovereign
rating (BB-/Stable) - given the high interlinkages between the
banking sector and sovereign balance sheets.

The impact of the gradual removal (expected from 4Q21) of most
regulatory forbearance measures that have supported reported asset
quality, capital and performance metrics during the pandemic is
likely to be limited for the banking sector, including for Turkiye
Finans.

The bank's financing was split 51%/35%/14% between the
corporate/SME/retail segments at end-1H21. In the medium term,
Turkiye Finans plans to gain market shares and increase retail
financing up to a third of total financing. Rapid growth in 2020
(28% FX-adjusted; sector: 21%), outside of the Treasury-backed
Credit Guarantee Fund and amid challenging market conditions, has
created seasoning risks, despite it being under a tighter risk
framework. The bank has more moderate medium-term financing growth
targets (2021: 14%; 1H21: 2% realised).

Credit risk is heightened by a high level of risky SME exposures
(end-1H21: 35% of gross financing; end-2020: 35%) and above sector
average FC financing (end-1H21: 41% of gross financing; end-2020:
32%), given that not all FC borrowers are likely to be fully hedged
against the lira depreciation. At end-1H21, FC financing was split
between export financing (31%), working capital (and other)
financing (51%) and project finance (19%).

Financing is concentrated in the fairly granular manufacturing
(end-1H21: 38%) and trade (21%) sectors. Riskier exposures to
construction and real estate (7%), tourism (7%), energy (6%),
transport and communication (4%) are also sources of risk. At
end-1H21, about a quarter of construction financing was classified
in Stage 2.

The non-performing financing (NPF) ratio deteriorated only slightly
to 5.7% at end-1H21 (end-2020: 5.6%), which underperforms peers but
was supported by sound collections performance and lower NPF
inflows. Stage 2 financing is moderate (7.7%) but largely
restructured (79% of total Stage 2 financing). Total reserves
coverage of NPFs (91%) is below the sector average (140%), partly
reflecting the bank's focus on largely collateralised SME
financing.

Fitch expects the bank's asset quality metrics to remain broadly
stable in 2021-2022, considering the limited impact of regulatory
forbearance (less than 5bp on the NPF ratio), low deferred
financing (2% of gross financing), the improving growth outlook and
sound NPF collections.

Turkiye Finans's operating profitability has historically been
below the sector average. It weakened in 1H21 to 0.5% of average
total assets (sector: 1.3%) from 1.2% in 2020, reflecting subdued
financing growth (1H21: 2%; -3% FX-adjusted), net financing margin
pressure (2.9%; 2020: 4.4%) due to higher lira interest rates,
higher swap costs as per the sector and still high - albeit
decreasing - financing impairment charges (46% of pre-impairment
operating profit; 2020: 51%).

The net financing margin is underpinned by its fairly low cost of
funding (1H21: 3.0%; sector: 6.2%) reflecting its high share of
low-cost demand, retail and precious metals deposits (25% of
customer deposits). Potentially lower lira interest rates should
support margin expansion in the short term, given the negative
repricing mismatch between assets and liabilities.

The bank's capitalisation is only moderate in light of the lira
depreciation (due to the inflation of FC risk-weighted assets) and
asset quality risks. The bank's common equity Tier 1 (CET1) ratio
was a moderate 11.7% at end-1H21, and included 140bp uplift from
regulatory forbearance. As an Islamic bank, risk weightings on
Turkiye Finans's assets directly financed by profit share accounts
are reduced by 50% (due to the implicit transfer of risk),
resulting in an additional 170bp uplift to its CET1 ratio. This
also contributes to the bank's low equity/total assets ratio
(end-1H21: 6.9%; sector: 9.4%).

The bank's total capital ratio (17.2%) is supported by USD250
million of FC Tier 2 debt from SNB (renewed in December 2020),
which acts as a partial hedge against lira depreciation.

The bank is primarily funded by fairly granular customer deposits
(end-1H21: 82% of total funding) and its gross financing/deposits
ratio was a sound 80% at end-1H21 (sector: 105%). However, deposits
are short term, although largely behaviourally stable, and an above
sector average share (a high 72%) were in FC at end-1H21 (end-2020:
73%; sector: 56%).

The bank's strategy has been to reduce external FC wholesale
funding in recent years, facilitated by increased FX liquidity in
the form of FC deposits. Turkiye Finans's FC wholesale funding fell
to a low 5% of total funding at end-1H21 (end-2019: 8%). Combined
with potential FC liquidity support from SNB, this mitigates
refinancing risk.

The bank's FC liquidity was sufficient to cover its more
market-sensitive FC non-deposit liabilities due within a year in
addition to about 23% of FC customer deposits at end-1H21. However,
FC liquidity could come under pressure, primarily from deposit
instability but also from prolonged market closure, if not offset
by expected shareholder support.

In assessing Turkiye Finans's ratings, Fitch considers the
important differences between Islamic and conventional banks. These
include a closer analysis of regulatory oversight, disclosure,
accounting standards and corporate governance. Islamic banks'
ratings do not express an opinion on the bank's compliance with
sharia. Fitch will assess non-compliance with sharia if it has
credit implications.

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

Turkiye Finans's Support Rating of '4' reflects its strategic
importance to its 67% parent, SNB, and its integration and role
within the wider group.

Potential parental support underpins the LTFC IDR at 'B+', one
notch below Turkey's rating, reflecting Fitch's view of government
intervention risk. This reflects Fitch's assessment that weaknesses
in Turkey's external finances make an intervention in the banking
system that could impede banks' ability to service their FC
obligations more likely than a sovereign default.

Turkiye Finans's 'BB-' LTLC IDR is driven by institutional support,
and is one notch above the LTFC IDR, reflecting Fitch's view of a
lower likelihood of government intervention in LC. The Stable
Outlook mirrors that on the sovereign rating.

NATIONAL RATING

The affirmation of the National Rating reflects Fitch's view that
Turkiye Finans's creditworthiness in local currency relative to
other Turkish issuers has not changed.

RATING SENSITIVITIES

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

VR, LT IDRs, SUPPORT RATING

-- The VR and LTFC IDR could be downgraded if the bank's
    competitive position materially weakens, or if higher-than
    expected growth and/or asset quality pressures erode its CET1
    ratio to below 10%. The ratings are also sensitive to a marked
    deterioration in the operating environment and a weakening of
    FC liquidity due to deposit outflows or an inability to
    refinance maturing external obligations, if not offset by
    shareholder support.

-- A downgrade of the sovereign rating or revision of the Outlook
    to Negative would probably lead to similar action on the bank.
    Increased government intervention risk would also lead to
    negative rating action on the bank's LT IDRs.

-- The LT LC IDR is sensitive to the ability and propensity of
    its parent to provide support. A reduced likelihood of
    institutional support would only lead to a downgrade of the
    bank's LTFC IDR if its VR was simultaneously downgraded.

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

VR, LT IDRs, SUPPORT RATING

-- Upside to the VR and LTFC IDR is currently limited but could
    come from a combination of a reduction in operating
    environment and government intervention risks, a strengthening
    of the bank's franchise and core capitalisation, and reduced
    dollarisation of the deposit base.

-- An upgrade of Turkey's LT IDRs or revision of the Outlook to
    Stable would likely lead to similar action on the banks' LT
    IDRs. A material improvement in Turkey's external finances or
    a marked increase in its net FX reserves position, resulting
    in a significant reduction in Fitch's view of government
    intervention risk in the banking sector, could lead to an
    upgrade of the bank's LTFC IDR to the level of Turkey's LTFC
    IDR. However, given Turkey's large external vulnerabilities
    and weak net FX reserves position, this would take time, in
    Fitch's view.

NATIONAL RATING

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

BEST/WORST CASE RATING SCENARIO

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

ESG CONSIDERATIONS

Turkiye Finans's has an ESG Relevance Score of '4' for Governance
Structure due to its Islamic banking nature (in contrast to a
typical Relevance Scores of '3' for comparable banks), which has a
negative impact on the credit profile, and is relevant to the
ratings in conjunction with other factors. The bank needs to ensure
compliance of its entire operations and activities with sharia
principles and rules. This entails additional costs, processes,
disclosures, regulations, reporting and sharia audit.

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

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


VAKIF KATILIM: Fitch Affirms 'B' Foreign Currency IDR
-----------------------------------------------------
Fitch Ratings has affirmed Vakif Katilim Bankasi AS's (Vakif
Katilim) Long-Term Foreign-Currency (LTFC) Issuer Default Rating
(IDR) at 'B' with a Stable Outlook. The bank's Viability Rating
(VR) has also been affirmed at 'b'.

KEY RATING DRIVERS

VR AND LTFC IDR

Vakif Katilim's 'B' LTFC IDR is underpinned by its standalone
creditworthiness as expressed by its VR, and potential state
support.

The VR reflects Vakif Katilim's growing participation banking
franchise and reasonable financial profile despite its still fairly
short record of operation and developing risk framework, rapid
growth in the volatile Turkish market and asset quality and
seasoning risks. This is balanced by large realised and additional
budgeted capital increases, which underpin its capital position, in
addition to its sufficient FC liquidity buffer and limited external
debt exposure.

The Turkish operating environment remains highly volatile amid weak
monetary policy credibility, banks' exposure to investor sentiment
(due to high foreign currency debt), high deposit dollarisation,
lira weakness and inflationary pressures (Fitch forecast: 17.2%
inflation at end-2021). The lira depreciated 11% against the US
dollar in 8M21, exacerbated by the abrupt replacement of the
central bank governor in March 2021, and has come under further
pressure following the latest 100bp cut in the policy rate.

Nevertheless, Fitch has revised the outlook on the 'B+' operating
environment to stable, reflecting Fitch's view that the inherent
uncertainty and volatility in the Turkish operating environment is
captured at the 'b+ level, despite some persistent downside risk to
banks' financial profiles. The stable outlook considers Turkey's
resilient growth prospects (Fitch's 2021 GDP forecast: 9.2%; 2022:
3.5%) and the easing in short-term external financing pressures
supported by a narrowing current account deficit and a recovery in
gross sovereign FX reserves position, among others. It also
reflects the Stable Outlook on the sovereign rating (BB-/Stable) -
given the high interlinkages between the banking sector and
sovereign balance sheets.

The impact of the gradual removal (expected from 4Q21) of most
regulatory forbearance measures that have supported reported asset
quality, capital and performance metrics during the pandemic is
likely to be limited for the banking sector, including for Vakif
Katilim.

Vakif Katilim operates in the niche participation-banking segment,
which has reasonable medium-term prospects, given its current low
base (end-1H21: 7.5% of banking sector assets) and strategic
importance to the Turkish authorities.

The bank is pursuing a rapid growth strategy (1H21: 15%
FX-adjusted; 2020: 39%) - from a low base - in pursuit of market
share (end-1H21: 0.9% and 1.2% of banking sector loans and
deposits, respectively). It aims to become a leading Islamic bank
in Turkey in the medium term, facilitated by capital injections
from the authorities, a growing product range and branch network,
and access to cost-effective state-related deposits (end-1H21: 16%
of total customer deposits). The bank targets financing growth of
25%-30% in 2022, primarily in local currency (LC).

Financing was split 77%/10%/13% between the corporate/SME/retail
segments at end-1H21. It is characterised by high FC exposure (46%;
sector: 36%), single-name (top 25 cash financing/gross financing
ratio of 33%) and sector concentration risks. Aside from the fairly
diversified trade and manufacturing sectors (end-1H21: 22% and 18%
of financing, respectively), financing is concentrated in high-risk
construction and real-estate (17%), transportation (13%; largely
related to aviation, which has been negatively affected by the
pandemic) and energy (6%). Tourism financing is immaterial.

In the medium term, Vakif Katilim plans to increase its share of
more granular, albeit higher risk, SME and retail (including
mortgage) financing (each to 20% of financing), for which it
continues to develop its risk management framework.

The bank's end-1H21 non-performing financing (NPF) ratio (end-1H21:
2.3%; sector: 3.7%) was flattered by rapid growth (50bp impact) and
regulatory forbearance (20bp uplift). Stage 2 financing is moderate
(end-1H21: 4.5% of gross financing; almost half restructured).
Deferred financing was a low TRY1 billion at end-1H21 (3% of gross
financing; largely classified under Stage 1). Total reserves
coverage of NPF is adequate (129%; sector: 139%).

Fitch expects Vakif Katilim's asset quality to remain reasonable in
the medium term, supported by the improving growth outlook, the
bank's strengthening underwriting and risk control framework, and
the denominator effect from high budgeted growth.

The bank's performance (1H21: annualised operating profit/total
assets of 2.1%; sector: 1.3%) has been underpinned by rapid
financing growth, controlled increases in operating expenses
(cost/assets ratio of 1.8%), manageable financing impairment
charges (16% of pre-impairment operating profit in 1H21; 2020: 34%)
and an adequate net financing margin (1H21: 3.4%; 2020: 4.6%)
despite the erosion of core spreads due to rising lira interest
rates. Large trading gains (1H21: 34% of total operating income),
resulting from sharia-compliant FC derivative transactions and the
intermediation of customers' FX and precious metals transactions,
could create earnings volatility.

Vakif Katilim's common equity Tier 1 (CET1) ratio (end-1H21: 18.7%
excluding potential regulatory forbearance uplift of about 440bp)
outperforms peers and is adequate for the bank's risk profile and
growth appetite. Its equity/total assets ratio (11.3%) is also
higher than peers. The bank received TRY2.2 billion and TRY2.5
billion in core capital injections (equal to a combined 60% of
total equity at end-1H21) from its state-related shareholder in
1Q20 and 1Q21, respectively. Additional capital increases are
budgeted until end-2023, which should mitigate risks to
capitalisation from further rapid growth, asset quality weakening,
potential lira depreciation (which inflates FC risk-weighted
assets) and market volatility, under Fitch's base case.

As an Islamic bank, risk weightings on Vakif Katilim's assets
directly financed by profit-share accounts are reduced by 50% on
the basis of a "profit-sharing" concept (due to the implicit
transfer of risk). This resulted in a high 240bp uplift to the
bank's CET1 ratio at end-1H21.

The bank's total capital adequacy ratio was a higher 21.1% at
end-1H21, due to the presence of EUR100 million of perpetual
Additional Tier 1 debt provided by the Turkish authorities in
2Q19.

The bank is largely deposit-funded (80% of total funding at
end-1H21) and its gross financing/ deposits ratio (75%)
significantly outperforms the sector average (105%). FC deposits
made up a high 71% of total customer deposits at end-1H21 (sector:
56%), partly due to the presence of precious metals deposits (a
quarter of total FC deposits). Vakif Katilim's strategy is to
increase granular retail deposits (end-1H21: 37% of total customer
deposits; 50% target).

The share of FC wholesale funding is low (end-1H21: 8% of total
funding), limiting refinancing risks. FC liquidity was sufficient
to cover external debt due within one year (largely made up of
deliverable FC swaps) at end-1H21, in addition to about 15% of FC
customer deposits. However, FC liquidity could come under pressure
from prolonged market closure or FC deposit instability.

In assessing Vakif Katilim's ratings, Fitch considers the important
differences between Islamic and conventional banks. These include a
closer analysis of regulatory oversight, disclosure, accounting
standards and corporate governance. Islamic banks' ratings do not
express an opinion on the bank's compliance with sharia. Fitch will
assess non-compliance with sharia if it has credit implications.

SUPPORT RATING, SUPPORT RATING FLOOR, LTLC IDR

Vakif Katilim's 'B' Support Rating Floor (SRF) is two notches below
Turkey's LTFC IDR, primarily, reflecting Turkey's weak financial
flexibility to provide support in FC, in case of need, given its
weak external finances. Potential sovereign support therefore
underpins the LTFC IDR at 'B'.

The SRF continues to reflect a high government propensity to
support the bank in case of need, given its ultimate government
ownership, the strategic importance of Islamic banking to the
Turkish authorities and the record of capital support. The
authorities have realised and budgeted significant core capital
injections to support Vakif Katilim's rapid growth strategy.

Vakif Katilim's LTLC IDR is equalised with the sovereign rating, on
the basis of support, reflecting a high sovereign propensity and
ability to provide support in LC. The Stable Outlook mirrors that
on the sovereign rating.

NATIONAL RATING

The affirmation of the National Rating reflects Fitch's view that
Vakif Katilim's creditworthiness in local currency relative to
other Turkish issuers has not changed.

RATING SENSITIVITIES

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

VR, LT IDRs, SUPPORT RATING, SUPPORT RATING FLOOR

-- The VR and LTFC IDR could be downgraded if expected capital
    support from the Turkish authorities is not sufficient or
    forthcoming on a timely basis to support the bank's growth and
    loss absorption capacity or if FC liquidity comes under
    pressure due to FC-deposit instability or prolonged market
    closure. The ratings are also sensitive to a marked
    deterioration in the operating environment, given the negative
    implications for the bank's financial profile.

-- Negative rating action on Turkey's ratings or Outlooks would
    likely lead to similar action on the bank's LT IDRs.

-- The SR could be downgraded and SRF revised down if further
    stress in Turkey's external finances materially reduces the
    reliability of support in FC for the bank from the Turkish
    authorities. However, this is not Fitch's base case given the
    Stable Outlook on the sovereign. A downward revision of Vakif
    Katilim's SRF would only lead to a downgrade of its LTFC IDR
    if the bank's VR was simultaneously downgraded.

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

VR, LT IDRs, SUPPORT RATING, SUPPORT RATING FLOOR

-- The VR and LTFC IDR could be upgraded if the bank grows and
    consolidates a leading Islamic domestic franchise, while
    maintaining adequate capitalisation and FC liquidity buffers.
    However, it should be accompanied by the development of a
    robust risk framework that is able to contain asset quality
    and seasoning risks resulting from the bank's rapid growth
    strategy.

-- An upgrade of Turkey's LT IDRs or revision of the Outlook to
    Positive would likely lead to similar action on the bank's LT
    IDRs.

-- A material improvement in Turkey's external finances or its
    net FX reserves position, resulting in a marked strengthening
    in the sovereign's ability to support the bank in FC, could
    also lead to positive rating action on the bank's SRF and LTFC
    IDR.

NATIONAL RATING

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

BEST/WORST CASE RATING SCENARIO

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

ESG CONSIDERATIONS

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

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

Vakif Katilim's ESG Relevance Score for Management Strategy has
been revised to '4' (in contrast to its previous Relevance Scores
of '3', also typical for comparable banks). It reflects potential
government influence over the management strategy in the
challenging Turkish operating environment. This has a negative
impact on the credit profiles, and is relevant to the ratings in
conjunction with other factors.

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

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



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

BCP V MODULAR III: Fitch Assigns 'B(EXP)' LT IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has assigned BCP V Modular Services Holdings III
Limited (BCP III) an expected Long-Term Issuer Default Rating (IDR)
of 'B(EXP)' with a Stable Outlook. Fitch has also assigned the
planned EUR1.2 billion equivalent senior secured debt to be issued
by BCP V Modular Services Finance II PLC (BCP Finance II) and the
planned EUR1.1 billion senior secured Term Loan B to be issued by
BCP V Modular Services Holdings IV Limited (BCP IV) expected
long-term ratings of 'B+(EXP)' with a Recovery Rating of 'RR3'.

At the same time, Fitch has assigned the planned EUR435 million
senior unsecured debt to be issued by BCP V Modular Services
Finance PLC (BCP Finance) an expected long-term rating of
'CCC+(EXP)' with a Recovery Rating of RR6'.

The assignment of final ratings is contingent on the receipt of
final documents conforming to information already reviewed.

KEY RATING DRIVERS

LONG-TERM IDR

Fitch has assigned the expected Long-Term IDR at the BCP III level
because it is the main consolidating entity within the restricted
group, set up as part of the acquisition of Modulaire Investments 2
S.a r.l. (Modulaire), a leading European modular space leasing
company. BCP III's ultimate shareholder is a private equity fund
(Brookfield Capital Partners Fund V) managed by Brookfield Capital
Partners. The acquisition remains subject to customary antitrust
approval (expected by 4Q21) and is part-funded by a considerable
contribution in common equity by the new shareholder.

As Modulaire is the sole cash flow generating entity of the newly
established group, earnings generation and ultimately debt
serviceability of the structure hinge on the operational
performance of this business. The various debt ratings assigned to
planned issuances that form part of the BCP III/Modulaire
transaction all have BCP III as their anchor rating.

BCP III's credit profile is supported by the company's established
position in the modular leasing sector (via Modulaire), benefiting
from good market entrenchment in key markets, notably across Europe
but also in the APAC region. While scale in absolute terms is
moderate compared with other specialised equipment lessors,
franchise value has been notably enhanced in recent years through a
number of accretive bolt-on acquisitions, including Wexus in
Norway, Advante and Carter in the UK and most recently Tecnifor in
Italy and Procomm in the UK, among others. Following recent
acquisitions, Fitch expects a period of consolidation.

Our business model assessment of BCP III recognises the monoline
nature of its offering, while the often-cyclical demand dynamics
associated with the industries the company services imply some
degree of business risk. This is somewhat mitigated by the broad
(and consistently) increasing scope of use for modular units, their
flexible build structure and good sustainability benefits. While
pricing power is typically limited in the homogenous modular
market, dedicated efforts by the company to focus on value-added
products and services (VAPS; such as furnishings and systems
installations) may support improved pricing power.

Utilisation rates have historically been sound (at around 80%) and
continue to be supported by the critical nature of the modular
offering (often serving as a critical infrastructure component) as
well as a high disincentive for temporary withdrawal, given the
associated costs and logistical relocation requirements. While the
core modular units benefit from an extended economic life, asset
risk for VAPS is somewhat higher (albeit well managed to date),
given their more specialised nature and shorter economic life.
Delinquencies have historically been well contained, driven by the
critical nature of the asset and aided by adequate risk controls.

BCP III benefits from good revenue visibility, supported by good
contract length (on average around 21 months including out of term
leasing), stable utilisation patterns and extended lead times for
delivery and installation (typically three to four months). The
company's EBITDA margin has been adequate historically (three-year
historical average: 29%) and Fitch forecasts it to improve
moderately post acquisition (five-year forward-looking average:
33.4%), supported in particular by improved VAPS penetration and
the realisation of procurement cost efficiencies. Bottom line
profitability will likely remain weighed down by high (albeit
somewhat reduced) interest expenses. Fitch views earnings
predictability as sound, supported by good contract visibility and
a high degree of capex discretion.

At closing of the anticipated transaction (and despite a
significant projected EBITDA improvement), cash flow leverage
(gross debt/EBITDA; excluding the impact of IFRS 16) is expected to
remain elevated at around 6.5x in 2021 (6.1x including the IFRS 16
impact). Leverage at closing under Fitch's rating case is notably
higher, at around 7.5x excluding the impact of IFRS 16. While Fitch
considers the company's deleveraging potential as sound, the
absence of a dedicated structural deleverage mechanism (i.e.
amortising debt profile or cash sweep) creates execution risk.
While Fitch views the proposed significant equity injection by the
new shareholders positively in terms of business commitment, Fitch
notes that tangible equity remains negative post acquisition.

Interest coverage has historically been weak and pending the
conclusion of the acquisition will still remain modest, albeit with
an improving trend (five-year forward-looking EBITDA/interest
expense ratio: 4.5x). Fitch notes positively that the transaction
will extend the debt maturity profile (with the nearest upcoming
maturity the Term Loan B and senior secured debt in 2028). Fitch
projects liquidity to be sound, supported by sound operating cash
flow generation and a EUR350 million multi-currency revolving
credit facility (not rated by Fitch), which is committed for 6.5
years.

SENIOR SECURED AND UNSECURED DEBT

Recoveries for senior secured noteholders stand at an estimated
60%, resulting in a long-term rating of 'B+(EXP)'/'RR3', one notch
above BCP III's expected Long-Term IDR. Estimated recoveries for
senior unsecured debt are zero (RR6), resulting in a rating two
notches below BCP III's expected Long-Term IDR, at 'CCC+(EXP)'.

RATING SENSITIVITIES

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

-- A sustained reduction in gross cash flow leverage (gross debt/
    EBITDA excluding IFRS 16) in line with the business plan
    approaching 5x; and/or a demonstrated improvement in the
    interest cover ratio approaching 4x;

-- Demonstrated company profile strength, manifested in
    particular by greater franchise entrenchment, larger business
    scale and enhanced business model diversification within the
    broader modular space sector.

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

-- Sustained elevated cash flow leverage (gross debt/ EBITDA
    excluding IFRS 16) in excess of 7x;

-- Sustained weak pre-tax profitability, thereby undermining debt
    serviceability and limiting capital accumulation;

-- Sustained weakening in franchise strength, in particular if
    accompanied by a sustained weakening in rental rates or a
    protracted weakening in asset-utilisation metrics;

-- Weakening of the corporate governance framework and /or a
    dilution in risk control protocols post acquisition, leading
    to a weakening of Fitch's risk appetite assessment.

The ratings of the senior secured and senior unsecured debt are
primarily sensitive to a change in BCP III's expected Long-Term
IDR. Changes leading to a material reassessment of potential
recovery prospects, for instance, changes in equipment valuation or
the competitive environment could trigger a change in the rating.
In the case of BCP III's senior secured debt, a material increase
in its revolving credit facility or the introduction of other more
senior debt instruments could lead to a downgrade of the debt
ratings.

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.


BELLIS ACQUISITION: Fitch Raises Sr. Secured Ratings to 'BB+'
-------------------------------------------------------------
Fitch Ratings has upgraded Bellis Acquisition Company Plc senior
secured instruments' ratings to 'BB+'/'RR2' from 'BB'/'RR2' and
removed the instruments from Under Criteria Observation (UCO),
where they were placed on April 9, 2021. Fitch has affirmed Bellis
Finco plc's (ASDA) Long-Term Issuer Default Rating (IDR) at 'BB-'
with Stable Outlook. Fitch has also affirmed ASDA's second lien
debt rating at 'B+'/'RR5'.

Following the Competition and Markets Authority's (CMA) final
approval in June 2021, new owners gained control over ASDA. Most
transaction funding elements have completed, except for the
disposal of forecourts to EG Group (B-/Stable) and repayment of the
forecourts bridge facility. Fitch currently assumes this is repaid
in 2H21.

The IDR reflects ASDA's market position and scale in a resilient,
but competitive UK food retail sector, and increased leverage under
the new capital structure. The ratings recognise its solid
profitability and strong free cash flow cash (FCF) generation,
which is comparable with Fitch-rated peers. Fitch recognises some
inherent execution risks in ASDA repositioning itself in the
market, especially considering the departures in the top management
team. Fitch continues to expect funds from operations (FFO) lease
adjusted gross leverage at around 5.4x, in line with the rating.

The Stable Outlook is driven by Fitch's expectation of steady
operating and financial performance, and is predicated on financial
policies being consistent with gradually declining leverage and
governance principles that adequately align the interests between
shareholders and creditors. This is relevant to the rating
trajectory, given the current absence of a public leverage target
and dividend policy.

KEY RATING DRIVERS

Upgrade of Senior Secured Instrument Ratings: The upgrade of the
senior secured ratings reflects Fitch's new Corporates Recovery
Ratings and Instrument Ratings Criteria, under which the agency
applies a generic approach to instrument notching for 'BB-' rated
issuers. Fitch considers these instruments as "category 2 first
lien" (i.e. first lien instruments issued by non-US-based
borrowers) under the new criteria.

Trading Normalising: Fitch has revised up its 2021 EBITDA forecast
to around GBP1 billion amid strong 1Q21 revenue and reported
margins ahead of Fitch's previous forecast. 2Q21 performance with
2.1% like-for-like food sales decline reflects a sector-wide
slowdown as the eating out market re-opened. Online volumes have
also eased across the sector. ASDA reports that online sales remain
over 80% above 2019 levels, but declined by 10% against 2Q20.

Increased Execution Risk on Cost-Savings: Departures of key members
of the management team may risk the delivery of cost-saving
initiatives. Quick appointments and actions taken by the new
management team are essential. In particular, cost-saving
initiatives are significant and critical to deliver the price
repositioning. Moreover, the strategy to narrow the price gap with
discounters and further expand the existing price gap with other
traditional grocers may not work if competitors react to this move.
Additional cost savings may not be fully achieved, which could
suppress margin improvement in Fitch's forecast horizon through to
2023.

Increased Leverage: Fitch continues to expect FFO adjusted gross
leverage of around 5.4x in 2021, which is commensurate with a 'BB-'
rating, following the GBP3.68 billion of new debt added to ASDA's
capital structure. Fitch's rating case reflects the potential to
deleverage by an average of 0.4x per year given strong cash
generation. Fitch sees inherent risk related to the repayment of
forecourts bridge loan in terms of asset sales. Fitch has assumed
that the forecourts bridge is fully repaid from disposal proceeds
in 2H21. If the forecourts are not disposed of in a timely manner
this could be negative for the rating.

Strong Cash Generation: Fitch's forecasts reflect continued
cost-saving initiatives that offset both the cost challenges and
some gross margin sacrifice to stay competitive. These lead to
healthy, steady profit margins (EBITDAR above 6% from 2022), which
are broadly aligned with Tesco's and strong cash generation. Fitch
projects FFO margin of around 3% and FCF margin of around 1%. Fitch
assumes that business rate relief is compensated by Walmart
(AA/Stable).

At the same time, the EG/ASDA partnership is progressing. ASDA
announced the extension of trial sites to 33 locations by end-2021
and to 200 sites by end-2022. Synergies via partnerships on
wholesale revenue into EG convenience stores and rents from food
services are not material at GBP14 million.

Financial Policies Define Deleveraging Path: In the absence of
material scheduled debt amortisation and publicly stated financial
policies, the use of accumulated cash balances will depend on
capital-allocation decisions that are not yet fully articulated.
Fitch does not expect the payment of Walmart's GBP500 million
instrument, which Fitch has treated as equity in line with Fitch's
criteria, at least over the next couple of years despite a step-up
coupon clause, due to Walmart's importance to ASDA in technology.
There is no intention to pay dividends currently, but this may be
revised, for example, when net debt/ EBITDA is under 2.6x according
to documentation.

Its structurally negative working-capital position, cash-generative
business and continuation of supply-chain finance facilities should
support liquidity. A strong freehold asset base, valued at around
GBP9 billion post forecourts disposal, provides further financial
flexibility.

Resilient Food Retail Operations: ASDA is one of the leading food
retailers in the UK with a good brand and scale. Food retail is
resilient through economic cycles, although grocers' like-for-like
sales suffer in low inflationary periods. ASDA has lost market
share since discounters started expanding in the UK, given its
higher exposure to lower-income customers and a store base skewed
towards the North/Midlands, where discounters were directing most
of their expansion. ASDA lacks a meaningful presence in the
convenience segment, but its online channel has grown significantly
with weekly slots at around 850,000 (December 2020), below market
leader Tesco Plc (1.5 million).

Governance Under Scrutiny: Although ASDA will remain a
privately-owned company, it has some weaknesses in the planned
governance and complexity of the group structure, with a number of
planned related-party transactions, resulting in a moderate impact
on the rating. At the same time, Fitch recognises the intention to
have a diverse board with three independent members and the
progress made on this so far.

It faces execution risks on its strategic repositioning and
separation from Walmart, which requires solid implementation by
management. Moreover, given the scale of the business, Fitch views
solid financial disclosure in financial reporting an important
safeguard for creditors, as well as clarity on consistent financial
policies that favour deleveraging.

DERIVATION SUMMARY

Fitch rates ASDA using its global Food Retail Navigator. ASDA's
rating is negatively influenced by the group's smaller scale and
weaker market position compared with main food retailers in Europe,
such as Tesco plc (BBB-/Stable) and Ahold Delhaize NV (WD). ASDA
has a similar market position to Sainsbury's with operations
restricted in the UK. ASDA lacks a convenience presence, but has a
strong online contribution. ASDA benefits from healthy
profitability and strong cash generation with historical and
expected FFO margins trending towards 4%, in line with most sector
peers, including Tesco.

Following completion of the transaction, Fitch expects ASDA's FFO
adjusted gross leverage (of around 5.4x in 2021) to be meaningfully
higher than Tesco's (around 4.0x excluding Tesco Bank), but below
Lannis Limited (Iceland Foods)'s (B/Stable) expected 7.0x over FY22
(year-end March) that will only gradually reduce thereafter.

KEY ASSUMPTIONS

-- Revenue to drop by 9% in 2021 to reflect the disposal of
    petrol division, growing at around 1% thereafter;

-- EBITDA margin at 4.9% in 2021, increasing to 5.3% in 2022 and
    stable thereafter;

-- Leases linked to the sale & leaseback of the distribution
    assets increased to GBP68 million (GBP57 million previously
    forecast);

-- Capex intensity between 1.9% and 2.4% of sales in 2021 to
    2024;

-- One-off costs at GBP150 million over 2021-2022 relating to
    separation from Walmart;

-- GBP60 million of contribution from the disposed fuel
    forecourts segment in 2021;

-- No dividends or major M&A activity over the next four years.

RATING SENSITIVITIES

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

Fitch does not anticipate an upgrade over the next two years, until
ASDA successfully executes its new strategy and delivers
cost-saving measures to maintain profitability despite cost
challenges. Positive rating momentum would also depend on
governance principles and financial disclosure being aligned with
listed peers and a commitment to conservative financial policies
favouring deleveraging leading to:

-- FFO adjusted gross leverage trending below 4.0x on a sustained
    basis;

-- FFO fixed charge cover above 2.5x.

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

-- Negative like-for-like growth exceeding other "Big Four"
    competitors especially if combined with a material drop in
    profitability;

-- Weakening liquidity buffer due to neutral or negative FCF
    margin;

-- FFO adjusted gross leverage above 5.5x on a sustained basis;

-- FFO fixed charge cover 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

Acceptable Liquidity Buffer: ASDA has acceptable expected initial
liquidity with around GBP350 million cash (cash relating to working
capital is restricted) post buyout, although Fitch views the
available GBP500 million revolving credit facility (RCF) as
somewhat limited for the large size of the business relative to
peers.

Fitch's readily available cash excludes an amount of GBP150 million
restricted for working capital purposes. In addition, the company
will have no material financial debt maturing before 4.5 years
(assuming the forecourt disposal bridge loan is repaid as planned).
Thanks to a healthy expected average FCF margin of around 1.8% over
2021-2024, Fitch assumes readily available cash to subsequently
accumulate to GBP1.2 billion by FY24 (excluding any dividends or
M&A activity).

ISSUER PROFILE

ASDA is the third largest supermarket chain in the UK.

ESG CONSIDERATIONS

ASDA has an ESG Relevance Score of '4' for Governance Structure due
to private equity ownership that may favour aggressive financial
policy decisions in the future, which has a negative impact on the
credit profile, and is relevant to the ratings in conjunction with
other factors.

ASDA has an ESG Relevance Score of '4' for Group Structure due to
complexity of the group structure with a number of related-party
transactions, which has a negative impact on the credit profile,
and is relevant to the ratings in conjunction with other factors.

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


EUROSAIL PLC 2006-1: Moody's Hikes Rating on 2 Tranches to Ba1
--------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of 19 notes in 5
Eurosail deals. The rating action reflects better than expected
collateral performance and the increased levels of credit
enhancement for the affected notes.

Moody's affirmed the ratings of the notes that had sufficient
credit enhancement to maintain the current rating on the affected
notes.

Issuer: Eurosail 2006-1 PLC

EUR20.7M Class B1a Notes, Affirmed Aa1 (sf); previously on Feb 3,
2021 Affirmed Aa1 (sf)

GBP17.5M Class B1c Notes, Affirmed Aa1 (sf); previously on Feb 3,
2021 Affirmed Aa1 (sf)

EUR13.6M Class C1a Notes, Affirmed Aa1 (sf); previously on Feb 3,
2021 Upgraded to Aa1 (sf)

GBP16.5M Class C1c Notes, Affirmed Aa1 (sf); previously on Feb 3,
2021 Upgraded to Aa1 (sf)

EUR26.4M Class D1a Notes, Upgraded to Ba1 (sf); previously on Feb
3, 2021 Affirmed Caa1 (sf)

GBP3M Class D1c Notes, Upgraded to Ba1 (sf); previously on Feb 3,
2021 Affirmed Caa1 (sf)

Issuer: Eurosail 2006-2BL PLC

GBP269.06M Class A2c Notes, Affirmed Aa1 (sf); previously on Dec
21, 2018 Affirmed Aa1 (sf)

EUR27M Class B1a Notes, Affirmed Aa1 (sf); previously on Dec 21,
2018 Affirmed Aa1 (sf)

USD18M Class B1b Notes, Affirmed Aa1 (sf); previously on Dec 21,
2018 Affirmed Aa1 (sf)

EUR24.8M Class C1a Notes, Upgraded to Aa2 (sf); previously on Dec
21, 2018 Upgraded to A1 (sf)

GBP11M Class C1c Notes, Upgraded to Aa2 (sf); previously on Dec
21, 2018 Upgraded to A1 (sf)

EUR9M Class D1a Notes, Upgraded to Ba2 (sf); previously on Dec 21,
2018 Affirmed B2 (sf)

GBP17.3M Class D1c Notes, Upgraded to Ba2 (sf); previously on Dec
21, 2018 Affirmed B2 (sf)

GBP7.38M Class E1c Notes, Affirmed Caa3 (sf); previously on Dec
21, 2018 Affirmed Caa3 (sf)

Issuer: Eurosail 2006-3NC PLC

EUR48.8M Class B1a Notes, Affirmed Aa1 (sf); previously on Dec 21,
2018 Upgraded to Aa1 (sf)

EUR20M Class C1a Notes, Upgraded to Aa3 (sf); previously on Dec
21, 2018 Affirmed Ba3 (sf)

GBP9.85M Class C1c Notes, Upgraded to Aa3 (sf); previously on Dec
21, 2018 Affirmed Ba3 (sf)

EUR6.05M Class D1a Notes, Upgraded to B2 (sf); previously on Dec
21, 2018 Affirmed Caa3 (sf)

GBP11M Class D1c Notes, Upgraded to B2 (sf); previously on Dec 21,
2018 Affirmed Caa3 (sf)

Issuer: Eurosail-UK 2007-1NC PLC

EUR194.8M Class A3a Notes, Affirmed Aa1 (sf); previously on Feb 3,
2021 Affirmed Aa1 (sf)

GBP100M Class A3c Notes, Affirmed Aa1 (sf); previously on Feb 3,
2021 Affirmed Aa1 (sf)

EUR36.9M Class B1a Notes, Upgraded to Aa1 (sf); previously on Feb
3, 2021 Upgraded to Aa2 (sf)

GBP20M Class B1c Notes, Upgraded to Aa1 (sf); previously on Feb 3,
2021 Upgraded to Aa2 (sf)

EUR42.1M Class C1a Notes, Upgraded to A1 (sf); previously on Feb
3, 2021 Affirmed Ba3 (sf)

EUR23.25M Class D1a Notes, Upgraded to B3 (sf); previously on Feb
3, 2021 Affirmed Caa3 (sf)

GBP5M Class D1c Notes, Upgraded to B3 (sf); previously on Feb 3,
2021 Affirmed Caa3 (sf)

Issuer: Eurosail-UK 2007-3BL PLC

GBP145.123185M Class A3a Notes, Affirmed Aa1 (sf); previously on
Feb 3, 2021 Affirmed Aa1 (sf)

GBP64.5M Class A3c Notes, Affirmed Aa1 (sf); previously on Feb 3,
2021 Affirmed Aa1 (sf)

GBP10.150223M Class B1a Notes, Upgraded to Aa1 (sf); previously on
Feb 3, 2021 Upgraded to Aa3 (sf)

GBP23M Class B1c Notes, Upgraded to Aa1 (sf); previously on Feb 3,
2021 Upgraded to Aa3 (sf)

GBP16.97447M Class C1a Notes, Upgraded to Ba2 (sf); previously on
Feb 3, 2021 Affirmed B2 (sf)

GBP10M Class C1c Notes, Upgraded to Ba2 (sf); previously on Feb 3,
2021 Affirmed B2 (sf)

The transactions are static cash securitisations of legacy
non-conforming mortgage loans secured on residential properties
located in the UK.

RATINGS RATIONALE

The rating action is prompted by:

decreased key collateral assumptions, namely the portfolio
Expected Loss (EL) and MILAN CE assumptions due to better than
expected collateral performance

an increase in credit enhancement for the affected tranches

Revision of Key Collateral Assumptions:

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

Despite relatively high delinquencies, the cumulative losses have
remained stable since last year. 90+ delinquencies are currently
standing at:

(i) for Eurosail 2006-1 PLC, 41.82%, and cumulative losses at 4.23%
up fom 4.22% last year.

(ii) for Eurosail 2006-2BL PLC, 41.6%, and cumulative losses at
4.94% up from 4.93% last year.

(iii) for Eurosail 2006-3NC PLC, 52.07%, and cumulative losses at
4.37% unchanged since last year.

(iv) for Eurosail-UK 2007-1NC PLC, 50.00%, and cumulative losses at
5.63% up from 5.57% last year.

(v) for Eurosail-UK 2007-3BL PLC, 37.8%, and cumulative losses at
4.37% up from 4.36% last year.

Moody's assumed the expected loss as a percentage of current pool
balance as follows:

(i) for Eurosail 2006-1 PLC, 5.97%.

(ii) for Eurosail 2006-2BL PLC, 6.43%.

(iii) for Eurosail 2006-3NC PLC, 8.51%.

(iv) for Eurosail-UK 2007-1NC PLC, 8.00%.

(v) for Eurosail-UK 2007-3BL PLC, 6.22%.

This corresponds to expected loss assumptions as a percentage of
original pool balance of:

(i) for Eurosail 2006-1 PLC, 4.89% changed from 5.87%.

(ii) for Eurosail 2006-2BL PLC, 6.01% changed from 7.10%.

(iii) for Eurosail 2006-3NC PLC, 5.55% changed from 6.75%.

(iv) for Eurosail-UK 2007-1NC PLC, 7.18% changed from 8.64%.

(v) for Eurosail-UK 2007-3BL PLC, 5.85% changed from 7.25%.

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 decreased the MILAN CE assumption
of each transaction as follows:

(i) for Eurosail 2006-1 PLC, to 24% from 29%.

(ii) for Eurosail 2006-2BL PLC, to 24% from 27%.

(iii) for Eurosail 2006-3NC PLC, to 30% from 37%.

(iv) for Eurosail-UK 2007-1NC PLC, to 30% from 37%.

(v) for Eurosail-UK 2007-3BL PLC, to 24% from 25.5%.

The MILAN CE in these transactions is mainly driven by the Minimum
Expected Loss Multiple, a floor defined in Moody's methodology for
rating EMEA RMBS transactions.

The expected losses and MILAN CE assumptions are higher than
average for the sector due to higher delinquencies as well as
adverse pool characteristics. For example in Eurosail 2006-1 PLC,
36.5% of the pool are interest-only loans, 74.12% of the loans were
provided to self-certified borrowers, and 21.05% of the pool was
subject to one or more CCJs.

Increase in Available Credit Enhancement

Sequential amortization and non-amortizing reserve funds led to the
increase in the credit enhancement available in these
transactions.

For instance, the credit enhancement for the tranches affected by
the rating action increased:

(i) for tranches D1a and D1c of Eurosail 2006-1 PLC, to 10.39% from
9.8% last rating action.

(ii) for tranches C1a and C1c of Eurosail 2006-2BL PLC, to 32.12%
from 25.3% last rating action, and for tranches D1a and D1c, to
9.3% from 7.3%.

(iii) for tranches C1a and C1c of Eurosail 2006-3NC PLC, to 30.63%
from 22.4% last rating action, and for tranches D1a and D1c, to
9.4% from 6.8%.

(iv) for tranches B1a and B1c of Eurosail-UK 2007-1NC PLC, to
43.65% from 41.1% last rating action, for tranche C1a to 30.6% from
21.4%, and for tranches D1a and D1c to 9.4% from 7.1%.

(v) for tranches B1a and B1c of Eurosail-UK 2007-3BL PLC, to 29.28%
from 27.4% last rating acton, and for tranches C1a and C1c to 14.4%
from 13.5%.

Moody's notes that some of the performance triggers in Eurosail
2006-3NC PLC, Eurosail-UK 2007-1NC PLC and Eurosail-UK 2007-3BL PLC
are breached and uncurable, which means their waterfalls cannot
revert to pro-rata amortization.

Moody's also considered how the liquidity available in the
transactions supports the ratings of the notes. In particular:

(i) for Eurosail 2006-1 PLC, a reserve fund of GBP3.68M.

(ii) for Eurosail 2006-2BL PLC, a reserve fund of GBP0.62M and a
liquidity facility of GBP33.83M.

(iii) for Eurosail 2006-3NC PLC, a reserve fund of GBP2.55M and a
liquidity facility of GBP8.49M.

(iv) for Eurosail-UK 2007-1NC PLC, a reserve fund of GBP4.55M and a
liquidity facility of GBP16.26M.

(v) for Eurosail-UK 2007-3BL PLC, a reserve fund of GBP2.60M.

For Eurosail-UK 2007-3BL PLC, the ratings of tranches C1a and C1c
are constrained by the lack of liquidity available.

The servicer is an unrated entity and the transactions' mitigating
structural features are not sufficient to achieve the Aaa (sf)
rating. As a result, Financial Disruption Risk constrains the
ratings of Classes B1a and B1c of Eurosail-UK 2007-1NC PLC and of
Eurosail-UK 2007-3BL PLC.

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 a
rating for an RMBS security may focus on aspects that become less
relevant or typically remain unchanged during the surveillance
stage.

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

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


GEMGARTO PLC 2018-1: Moody's Ups Rating on Class F Notes to B2
--------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of five notes in
Gemgarto 2018-1 Plc, a UK prime RMBS transaction. The rating action
reflects better than expected collateral performance and the
increased levels of credit enhancement for the affected notes.

Moody's affirmed the ratings of the notes that had sufficient
credit enhancement to maintain their current ratings.

GBP210M Class A Notes, Affirmed Aaa (sf); previously on Jul 30,
2018 Definitive Rating Assigned Aaa (sf)

GBP12.5M Class B Notes, Upgraded to Aa1 (sf); previously on Jul
30, 2018 Definitive Rating Assigned Aa2 (sf)

GBP6.25M Class C Notes, Upgraded to Aa2 (sf); previously on Jul
30, 2018 Definitive Rating Assigned A1 (sf)

GBP5M Class D Notes, Upgraded to A1 (sf); previously on Jul 30,
2018 Definitive Rating Assigned Baa1 (sf)

GBP8.75M Class E Notes, Upgraded to Baa1 (sf); previously on Jul
30, 2018 Definitive Rating Assigned Ba1 (sf)

GBP7.5M Class F Notes, Upgraded to B2 (sf); previously on Jul 30,
2018 Definitive Rating Assigned Caa3 (sf)

The transaction is a revolving cash securitisation of first lien
residential mortgages extended by Kensington Mortgage Company
Limited ("KMC", NR) to obligors located in England and Wales. It
features a 4-year revolving period which will end in September
2022.

RATINGS RATIONALE

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

Key Collateral Assumptions:

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

The performance of the transaction has been better than expected.
90 days plus arrears as a percentage of current balance are
currently standing at 3.1%, with no losses occurred since closing.
The pool factor, measured as the current over the original pool
balance plus replenishments, has decreased to 51%.

Moody's assumed the expected loss of 1.5% as a percentage of
current pool balance, due to better than expected collateral
performance. This corresponds to an expected loss assumption of
0.8% as a percentage of the original pool balance plus
replenishments, down from the previous assumption of 2.1%.

Moody's has also assessed loan-by-loan information as a part of its
detailed transaction review to determine the credit support
consistent with target rating levels and the volatility of future
losses. As a result, Moody's has maintained the MILAN CE assumption
at 16%.

Increase in Available Credit Enhancement

Sequential amortization and non-amortizing reserve fund led to the
increase in the credit enhancement available in this transaction.

The credit enhancement for Classes B, C, D and E increased to
15.3%, 12.4%, 10.0%, and 5.9% from 13.0%, 10.5%, 8.5% and 5.0%
since closing.

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

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

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

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

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


IGLOO: Halts Trading Amid Surging Global Gas Prices
---------------------------------------------------
Stephen Mcilkenny at The Scotsman reports that Ofgem has announced
energy suppliers Igloo, Symbio and Enstroga have ceased trading.

Igloo Energy supplies gas and electricity to around 179,000
domestic customers, Symbio supplies around 48,000 domestic
customers and a small number of non-domestic customers and Enstroga
supplies around 6,000 domestic customers, The Scotsman discloses.

According to The Scotsman, under Ofgem's safety net, the energy
supply to all affected customers will continue and credit balances
will be protected.

Domestic customers will also be protected by the energy price cap
when being switched to a new supplier, The Scotsman notes.

Customers of Enstroga, Igloo Energy and Symbio Energy will be
contacted by their new supplier, which will be chosen by Ofgem, The
Scotsman states.

Ofgem advised customers of the three firms to wait until a new
supplier has been appointed and has made contact before looking to
switch and to take a meter reading, The Scotsman relates.

The three firms are the latest to collapse in recent weeks amid an
unprecedented increase in global gas prices, The Scotsman says.


JABERO CONSULTING: Bought Out of Administration by WorksiteCloud
----------------------------------------------------------------
Business Sale reports that Jabero Consulting, a software solutions
firm in the construction and rail sector, has been sold after
entering administration earlier this month.

Jabero, which was founded in 2012, ran into cashflow difficulty as
a result of the COVID-19 pandemic's impact on business in the rail
sector, Business Sale relates.

According to Business Sale, the pandemic meant that the firm
experienced longer sales and onboarding processes for new business
and, by July of this year, its workstream had declined by 70%.

Administrators David Kemp and Richard Hunt of SFP were appointed on
Sept. 16, 2021, Business Sale discloses.

On Sept. 22, the administrators secured a sale of the business and
full transfer of employees to WorksiteCloud Ltd., Business Sale
notes.


LONDON CAPITAL: FCA Not Approached by Whistleblowers
----------------------------------------------------
Amy Austin at FTAdviser reports that the Financial Conduct
Authority had not been approached by whistleblowers in either the
Blackmore Bond or the London Capital & Finance scandals, its head
of enforcement has claimed.

According to FTAdviser, Mark Steward told attendees at the
regulator's annual public meeting on Sept. 28 the regulator had not
received reports from anyone it would have classed as a
whistleblower under the Public Interest Disclosure Act.

Though the regulator did admit it should have treated other
intelligence it had received in a more effective way, FTAdviser
notes.

It comes as several groups and an independent report had accused
the FCA of failing to handle third party information efficiently,
FTAdviser states.

Mr. Steward, as cited by FTAdviser, said: "Neither in the case of
LCF nor Blackmore did we receive any whistleblowing intelligence
from anyone who would be classed as a whistleblower under the
Public Interest Disclosure Act, which is the legislation that
governs the way in which whistleblowers need to be protected, and
their identities kept confidential.

"All our staff are trained to identify with suppliers, including
our staff who man the call centre in the supervision hub, and we
take all whistleblowing intelligence very seriously."

He said the FCA’s formal whistleblowing processes were designed
to capture intelligence from whistleblowers who are required to be
protected under legislation and to ensure the FCA is able to offer
this protection, FTAdviser relates.

Mr. Steward said these processes did not apply to LCF and Blackmore
as no whistleblowers came forward, FTAdviser recounts.

At the same time chairman of the FCA Charles Randell apologized for
errors made in the regulator's response to LCF, saying the
regulator has "put in place action plans and the board of the FCA
is monitoring progress closely", FTAdviser discloses.

London Capital & Finance entered into administration in 2019 owing
more than GBP230 million and putting the funds of some 14,000
bondholders at risk, FTAdviser relates.

An independent investigation into the FCA’s handling of LCF by
Dame Elizabeth Gloster, published in December, rebuked the
regulator for "significant gaps and weaknesses" in its policies and
practices and said the watchdog had failed to properly regulate the
now collapsed company and that its handling of information from
third parties regarding the business was "wholly deficient",
according to FTAdviser.


LORCA HOLDCO: Fitch Affirms BB Rating on Term Loan B
----------------------------------------------------
Fitch Ratings has affirmed Lorca Holdco Limited's (Lorca) term loan
B (at Lorca Finco PLC) and senior secured notes (at Lorca Telecom
Bondco S.A.U.) instrument ratings of 'BB'/'RR2', based on its
proposed add-on/tap issuance of EUR800 million and EUR1.75 billion,
respectively. Fitch has also assigned Kaixo Bondco Telecom SA's
proposed senior notes a rating of 'B-'/'RR6'. Lorca's Issuer
Default Rating (IDR) is affirmed at 'B+' with a Stable Outlook.

The IDR of Lorca (the owner of network operator Mas Movil (MM))
reflects the company's well-established position in the Spanish
telecoms market, as well as an intelligent hybrid approach to
network deployment, which includes long-term partnership
agreements, and leverage, which will rise but is expected to
recover to within a downgrade threshold of 5.8x within a year of
closing the Euskaltel SA acquisition (closed August 2021).

Fitch's rating case assumes the management is successful in the
creation and sale of a majority stake in a netco encompassing up to
1.1 million building units (BUs) in Lorca's hybrid fibre-coaxial
(HFC) network. Failure to close a deal/establish terms with a high
degree of certainty, within the next six months, would cause us to
review Fitch's rating case and the underlying ratings. The
management has a record of effectively structuring this kind of
deal.

KEY RATING DRIVERS

Euskaltel Deal Strategically Sound: Fitch believes the Euskaltel
acquisition by MM is beneficial in terms of both business strategy
and synergies. In a mature and competitive market, the deal
combines two of the country's leading growth operators, creating
the market's second-largest residential mobile operator with a 24%
subscriber share, and consolidating MM's position as the
fourth-largest fixed broadband provider.

Euskaltel is a regional cable operator with roughly 0.7 million
broadband customers and 1.8 million virtual mobile network operator
mobile customers. It is a high margin (Fitch-defined EBITDA margin
of about 50%) and cash-generative business with ambitions to
compete nationally in fixed-mobile convergence.

Fitch believes the acquisition will help to consolidate a crowded
telecoms market by removing a sizeable player from the market. The
management has shown good integration execution in past deals, and
the enlarged business is expected to continue to grow strongly
while its larger competitors are likely to see flat-to-negative
revenue growth.

Deliverable Synergies: MM's enlarged scale/position combined with
its existing momentum should act as a driver to ongoing customer
growth/share gains from the market. However, key deal economics are
driven by cost synergies identified at close to EUR190 million per
annum, to be achieved over five years. Of this, more than 70% are
contractual cost savings reflecting the migration of Euskaltel's
customers onto MM's fibre/mobile networks and onto its more
efficient network roaming/access agreements.

Fitch typically applies a sizeable haircut to targeted cost
synergies in any acquisition to reflect a degree of execution risk.
In the Euskaltel deal, however, Fitch assumes 90% of cost synergies
are achieved, reflecting a recognition of the mechanistic nature
and deliverability of these savings. Synergy costs are mainly the
costs of exiting Euskaltel's existing network roaming/access
agreements. Fitch assumes 90% of targeted costs are in line with
Fitch's synergy assumption.

Spanish Market Pressures: Fitch considers that the Spanish market
is rational - although it remains mature, competitive and
relatively crowded. Fitch estimates mobile penetration was about
118% at end-December 2020. Operator share gains are, therefore,
mainly driven by acquiring customers from a competitor rather than
market growth. Data from the Spanish regulator, the National
Securities Market Commission (CNMV), indicates an overall 2020
market revenue of EUR32 billion, a yoy fall of 5%, which Fitch
believes to be largely driven by the pandemic.

In this environment, the incumbent Telefonica, retains a strong and
relatively stable lead (46% of total revenue), while Vodafone and
Orange have both ceded shares to MM/Euskaltel: MM has delivered
revenue growth at a CAGR of 20%, while Euskaltel's revenue growth
is at a lower but still strong 5% CAGR (based on CNMV's data, which
may differ from the companies' publicly reported numbers).

Further Market Consolidation Possible: Spain remains a four-player
mobile and fixed-mobile convergent market. The MM/Euskaltel deal is
positive, but Fitch still thinks a mobile consolidation would be
desirable for the overall market. Spain has a large telecoms market
in an advanced economy with a population of 47 million.
Four-to-three mobile consolidation has become accepted in other
large European countries, including Germany and the Netherlands,
while the UK, France and Italy remain or have become four-player
markets. The scale, market share and revenue trends of Vodafone and
Orange in Spain, in Fitch's view, suggest a deal including one or
both is possible.

Fitch considers MM to be financially constrained from further
inorganic activity in all, but relatively small bolt-on deals,
before some deleveraging has taken place following Euskaltel. This
is certainly the case if the management wants to maintain its
current rating.

Leverage Thresholds Loosened: MM's FFO net leverage thresholds have
been loosened to 5.8x from 5.3x for a downgrade, and to 5.0x from
4.3x for an upgrade. This brings them in line with VMED Ireland and
closer to VodafoneZiggo (6.0x/5.2x) - both of which are rated at
'B+' with Stable Outlooks. The relaxation reflects the
transformation of the business (including Euskaltel) in terms of
infrastructure scale, breadth of coverage and cash flow evolution
since these thresholds were set.

These thresholds were initially set conservatively, in part taking
account of the company's hybrid network strategy - an approach that
was less common across the peer group at the time. The pace at
which the broader market has sought to replicate these ideas, and
MM's efforts to futureproof partnership agreements remove this
caution.

Intelligent Infrastructure Strategy: MM has employed a range of
network strategies. These include a sizeable share of own-build,
partner co-investment, bitstream access and fibre leases and
national roaming agreements in mobile. Developing partnerships with
multiple partners as well as the long-term contractual maturity of
agreements (particularly in fibre) have allowed the company to
deploy flexible and efficient capacity provisioning on a nationwide
basis.

Questions over contract renewal risks with wholesale partners are,
in Fitch's view, addressed to a degree by the fact that Telefonica
derives a third of Spanish revenue from the wholesale market, while
Orange (MM's primary fibre partner) derives about a quarter
(source: CNMV). Fitch believes these revenue sources are high
margins for MM's wholesale partners, supporting a reciprocal
benefit.

DERIVATION SUMMARY

In operational terms, MM is comparable, albeit at an earlier stage
in its business life cycle, to a peer group that includes most of
Fitch-rated European cable operators, which are largely grouped
around the 'BB-'/'B+' level. MM has a similar revenue scale to most
entities in the peer group, but slightly lower EBITDA margins and
higher investment needs given the investment in connecting fibre
subscribers. It continues to have a higher growth potential than
most in the peer group for whom the operator share is established
and markets are largely saturated.

Fitch expects MM's rational challenger model in a stable market to
lead to healthy free cash flow generation and deleveraging
capacity, as fibre capex diminishes and the one-off synergy costs
related to Euskaltel are absorbed.

KEY ASSUMPTIONS

-- Revenue growth of 10% in 2021 and 9% in 2022 before
    normalising to mid-single digits in 2023-2025;

-- Fitch-defined EBITDA margin (including lease expenses) to
    improve to about 40% in 2025 from 35% in 2021 driven by high
    margin contribution from Euskaltel and the acquisition
    synergies;

-- Non-recurring cash flow includes transaction costs of EUR127
    million in 2021 and integration costs totalling EUR290 million
    in 2021-2024;

-- Negative working capital in 2021-2025 reflects various payment
    instalments with other operators;

-- Net capex/sales ratio decreases to about 15% in 2025 from
    high-teens in 2021-2022; and

-- Fitch's debt assumption excludes the EUR500 million netco
    bridge facility; Fitch intends to review this assumption if
    the netco disposal is not complete within the next 6 months.

Key Recovery Rating Assumptions

-- The recovery analysis assumes that Lorca would be considered a
    going-concern in distress in the event of a bankruptcy and
    that the company would be reorganised rather than liquidated;

-- A 10% administrative claim;

-- Post-restructuring EBITDA estimated at EUR950 million, 22%
    lower than Fitch's 2022 forecast EBITDA, reflecting
    intensifying market competition and a failure to deliver
    planned synergies and cost savings;

-- A distressed enterprise value multiple of 5.5x is applied to
    calculate a post-restructuring valuation;

-- In Fitch's debt claim waterfall, Fitch assumes a fully drawn
    revolving credit facility (RCF) of EUR750 million, ranking
    pari passu to senior secured debt;

-- Fitch's debt assumption excludes the EUR500 million netco
    bridge facility; Fitch intends to review this assumption if
    the netco disposal is not complete within the next 6 months;
    and

-- Recovery prospects for the group's senior secured debt are at
    75% and senior unsecured debt receives 0% recovery prospects.

RATING SENSITIVITIES

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

-- FFO net leverage below 5.0x on a consistent basis;

-- Cash from operations (CFO) less capex as a percentage of gross
    debt consistently at or above 5%.

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

-- FFO net leverage above 5.8x on a consistent basis;

-- CFO less capex as a percentage of gross debt consistently at
    or below 2%.

BEST/WORST CASE RATING SCENARIO

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

LIQUIDITY AND DEBT STRUCTURE

Comfortable Liquidity: At end-March 2021, Lorca had a cash balance
of EUR63 million. Along with the financing of the Euskaltel
acquisition, Lorca's liquidity will be supported by fully undrawn
RCF upsize to EUR750 million. Additionally, Fitch expects the
business to be cash generative from 2021 (excluding non-recurring
integration costs). Lorca's senior secured debt has a long-dated
maturity in 2027 and the unsecured junior debt has a maturity of
eight years.

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.


NEWGATE FUNDING 2007-2: Fitch Lowers Rating on Class F Debt to CCC
------------------------------------------------------------------
Fitch Ratings has downgraded three, upgraded one and affirmed 19
tranches of the Newgate Funding 2007 RMBS Series.

       DEBT                    RATING             PRIOR
       ----                    ------             -----
Newgate Funding Plc Series 2007-1

Class A3 XS0287753775    LT  AAAsf   Affirmed     AAAsf
Class Ba XS0287757255    LT  AAsf    Affirmed     AAsf
Class Bb XS0287757412    LT  AAsf    Affirmed     AAsf
Class Cb XS0287759624    LT  BBB+sf  Affirmed     BBB+sf
Class Db XS0287767304    LT  BB+sf   Affirmed     BB+sf
Class E XS0287776636     LT  BBsf    Affirmed     BBsf
Class F XS0287778095     LT  B+sf    Downgrade    BB-sf
Class Ma XS0287755713    LT  AAAsf   Affirmed     AAAsf
Class Mb XS0287756877    LT  AAAsf   Affirmed     AAAsf

Newgate Funding Plc Series 2007-3

Class A2b 651357AF2      LT  AAAsf   Affirmed     AAAsf
Class A3 651357AG0       LT  AAAsf   Upgrade      AA+sf
Class Ba 651357AH8       LT  AA-sf   Affirmed     AA-sf
Class Bb 651357AJ4       LT  AA-sf   Affirmed     AA-sf
Class Cb 651357AK1       LT  Asf     Affirmed     Asf
Class D XS0329654312     LT  BBB+sf  Affirmed     BBB+sf
Class E XS0329655129     LT  BBBsf   Affirmed     BBBsf

Newgate Funding Plc Series 2007-2

Class A3 XS0304280059    LT  AAAsf   Affirmed     AAAsf
Class Bb XS0304284630    LT  Asf     Affirmed     Asf
Class Cb XS0304285959    LT  BBB-sf  Affirmed     BBB-sf
Class Db XS0304286254    LT  BB-sf   Affirmed     BB-sf
Class E XS0304280489     LT  Bsf     Downgrade    B+sf
Class F XS0304281024     LT  CCCsf   Downgrade    Bsf
Class M XS0304280133     LT  AA+sf   Affirmed     AA+sf

TRANSACTION SUMMARY

The three transactions are seasoned true-sale securitisations of
mixed pools containing mainly residential non-conforming
owner-occupied (OO) mortgage loans with a few residential
buy-to-let (BTL) mortgage loans.

KEY RATING DRIVERS

Coronavirus-related Assumptions: Fitch has applied coronavirus
assumptions to the non-conforming portfolios. The combined
application of revised 'Bsf' representative pool weighted average
foreclosure frequency (WAFF) and revised rating multiples resulted
in a multiple to the current FF assumptions of about 1.2x at 'Bsf'
and 1.0x at 'AAAsf'. The coronavirus assumptions are more modest
for higher rating levels as the corresponding rating assumptions
are already meant to withstand more severe shocks.

Stabilised Asset Performance: Arrears for Newgate 2007-1, 2007-2
and 2007-3 have stabilised from the initial pandemic-induced spike
observed in mid-2020. For all three transactions, one-month+
arrears jumped considerably in May 2020 before quickly falling,
most likely as borrowers transitioned onto payment holidays.

Three-month+ arrears also saw a material increase in May 2020 and
have remained at elevated levels. This is likely due to the
moratoria on repossessions. Servicers have not been able to proceed
with possession orders, which has led to an increase in
longer-dated arrears as these would have typically been repossessed
once they are three or more months delinquent. The increase in
longer dated arrears contributed to the downgrades of the junior
notes in Newgate 2007-1 and 2007-2.

Payment holidays for all transaction have decreased significantly
to minimal levels, and are not expected to increase as the scheme
is now closed to new applications. Fitch expected that borrowers
who utilised payment holidays could roll into arrears as their
holiday ended. However, the majority of borrowers have resumed
making full scheduled payments, reducing the risk of significant
collateral under-performance. This is reflected in the revision of
the Outlooks to Stable on a number of notes.

Back-loaded Default Risks: All pools contain a high share of
interest-only loans and a significant share of borrowers with
self-certified income, resulting in elevated refinancing risks
later in the life of the transactions. This combination led Fitch
to apply a performance adjustment factor floor at 1, in line with
its UK RMBS Rating Criteria. The downgrades are driven by failures
in scenarios of back-loaded defaults, coupled with prepayment rates
in line with historical trends.

Pro-Rata Pay: All three transactions have been repaying notes on a
pro-rata basis, and will likely continue to do so until the
outstanding bonds balance is less than 10% of the initial issuance
amount. As a result, the non-amortising fully funded reserve funds
are the sole driver of an increase in credit enhancement (CE).

RATING SENSITIVITIES

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

-- Economic uncertainty remains despite the end of lockdown
    measures and a successful vaccine rollout programme. Public
    economic support measures have thus far been instrumental in
    containing unemployment levels and preventing repossessions.
    Fitch acknowledges the expiry of these support measures may
    negatively affect overall economic activity, including a
    potential rise in unemployment.

-- The transactions would be affected by weakening market
    conditions. Self-employed borrowers in the pools would be
    particularly vulnerable, as their incomes are highly
    susceptible to economic volatility. In the event of weak asset
    performance, a rise in delinquency levels and defaults is
    likely. This could reduce CE available to the notes.

-- Additionally, unanticipated declines in recoveries could also
    result in lower net proceeds, which may make certain notes'
    ratings susceptible to potential negative rating action
    depending on the extent of the decline in recoveries. Fitch
    conducts sensitivity analyses by stressing both a
    transaction's base-case FF and recovery rate (RR) assumptions,
    and examining the rating implications on all classes of issued
    notes. Fitch tested a 15% increase in the WAFF and a 15%
    decrease in the WARR. The results indicate downgrades of up to
    six notches in Newgate Funding 2007-1, 2007-2 and 2007-3.

-- The transactions' ratings may be sensitive to the resolution
    of the Libor rate exposure on notes as Libor is due to be
    discontinued from January 2022.

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

-- Stable to improved asset performance driven by stable
    delinquencies and defaults would lead to increasing CE levels
    and potential upgrades. This could result if the removal of
    lockdown restrictions leads to a strong economic recovery and
    the Covid-19 impact remains low. Fitch tested an additional
    rating sensitivity scenario by applying a decrease in the FF
    of 15% and an increase in the RR of 15%. The ratings on the
    subordinated notes could be upgraded by up to four notches in
    Newgate Funding 2007-1, 2007-2 and 2007-3.

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

Newgate Funding Plc Series 2007-1, Newgate Funding Plc Series
2007-2, Newgate Funding Plc Series 2007-3

Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset
pools and the transactions. 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.

Fitch did not undertake a review of the information provided about
the underlying asset pools ahead of the transactions' initial
closing. The subsequent performance of the transactions over the
years is consistent with the agency's expectations given the
operating environment and Fitch is therefore satisfied that the
asset pool information relied upon for its initial rating analysis
was adequately reliable.

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.

ESG CONSIDERATIONS

Newgate 2007-1, 2007-2, 2007-3 have ESG Relevance Score of '4' for
Human Rights, Community Relations, Access & Affordability due to
the underlying asset pools with limited affordability checks and
self-certified income, which has a negative impact on the credit
profile, and is relevant to the ratings in conjunction with other
factors.

Newgate 2007-1, Newgate 2007-2, Newgate 2007-3 have ESG Relevance
Score of '4' for Customer Welfare - Fair Messaging, Privacy & Data
Security due to a material concentration of interest-only loans,
which has a negative impact on the credit profile, and is relevant
to the ratings in conjunction with other factors.

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


OCADO GROUP: Fitch Gives 'BB-(EXP)' Rating to New GBP400MM Notes
-----------------------------------------------------------------
Fitch Ratings has assigned Ocado Group PLC's (Ocado) prospective
GBP400 million notes an expected senior unsecured instrument rating
of 'BB-(EXP)'/'RR3'. Fitch has also affirmed its Long-Term Issuer
Default Rating (IDR) at 'B+' with a Stable Outlook.

The GBP400 million notes will rank pari passu and share guarantors
with Ocado's GBP950 million convertible bonds. The assignment of
the final rating is conditional upon the completion of the new
notes, use of proceeds to include prepayment of GBP225 million
existing senior secured notes, and final terms and conditions being
in line with information received.

The IDR reflects Fitch's view of largely unchanged execution risks
for Ocado's International Solutions segment, including risks
associated with the timely delivery of technology requiring
significant up-front capex. The rating is premised on the
assumption that Ocado will be able to demonstrate by financial year
to November 2023 (FY23) that it can replicate internationally the
operational and economic success of its UK retail operations. This
expansion will add scale and diversification in support of the
rating, yet Fitch's expectations are unchanged for positive EBITDA
for its Solutions business only by FY23.

The Stable Outlook reflects the group's solid financial
flexibility, which Fitch believes should enable management to
execute Ocado's strategy over the next few years. However, Fitch
expects the company to require funding by FY23 and assess
refinancing risk as being contingent on Ocado successfully
executing its growth strategy.

KEY RATING DRIVERS

Transformation Accelerates: Ocado continues to accelerate its rapid
transformation from a UK online food retailer to an international
technology and business service provider with a significant portion
of long-term contracted earnings. Fitch's rating references Ocado's
standalone solutions business, whereas Fitch deconsolidates Ocado
Retail Ltd (its joint venture (JV) with Marks and Spencer Group plc
(M&S); BB+/Stable).

Our rating reflects the growing scale and upfront investments and
execution risks associated with progress of its 40 customer
fulfilment centres (CFCs) over the next four years. Fitch expects a
further 16 CFCs to go live by end-FY23, most of which are under
construction already. Ocado delivered two more international CFCs
in 2021 on time and on budget for its US partner Kroger. Ocado
reports that all four open CFCs, two of which launched in 2020, are
ramping up according to plan and contributed GBP19 million to fee
revenue in 1H21.

Capacity Growth in UK: The addition of 40% capacity in 2021 will
drive an increase in fees for UK Solutions & Logistics. The unit
added 175,000 orders a week (OPW) to its peak capacity by opening
CFCs in Bristol, Purfleet and Andover, the latter following fire
damage, taking the overall maximum for the JV to about 600,000 OPW.
Two more announced CFCs at Bicester and Luton will take the peak
capacity to 700,000 OPW by end-FY23. These capacity figures compare
with average OPW of 334,000 in FY20 and 356,000 in 1H21.

Fitch expects 2021 UK Solutions revenue from supermarket chain
Morrisons to beat 2019 levels, as it continues rebuilding its
capacity at the Erith CFC since February 2021. Store-picking fees
have also increased, having temporarily halved, with participating
store numbers having increased to 197 in 2020 from 33 in 2019.

Negative FFO and EBITDA: Fitch continues to forecast negative
consolidated funds from operations (FFO) and EBITDA until FY23
given the 'start-up' phase of Ocado's International Solutions
division. Ocado will incur operating costs not covered by any
revenue until the international CFCs start operating, in line with
IFRS15. Fitch's current rating is underpinned by Ocado's financial
flexibility to fund those planned investments.

Funding Requirement in FY23: The proceeds of the new notes will be
used to refinance existing GBP225 million notes (due 2024), pay
various fees and to fund capex for growth. However, Fitch still
expects Ocado to have a funding requirement in FY23. Available
liquidity (including cash deposits) at end-FY20 was strong at
GBP1.9 billion, but this will be consumed by significant planned
capex. Higher development costs or a commitment to deliver more
CFCs over the next four years may bring forward funding
requirement. This is mitigated by Ocado's strong business valuation
and business proposition, which support sound access to equity and
debt markets to address funding needs.

Positive EBITDA by FY23: Fitch anticipates Ocado to become
profitable and to generate positive EBITDA of about GBP120 million
in FY23 (Fitch forecast for the Solutions business). This assumes
continued progress with CFCs under existing contracts and three
additional CFCs a year. Positive cash flow contributions from early
projects coming on stream in 2020 and 2021 are outweighed by
further investment needs in projects under development. Adding more
than the three CFCs a year modelled under Fitch's rating case would
delay the path to profitability. Fitch's updated rating case
includes deferred revenue from international CFCs as they become
operational, which adds GBP40 million in FY23.

JV Deconsolidated: Fitch deconsolidates the JV as it sits outside
the restricted group, but include the fees paid by the joint
venture when assessing Ocado's rating profile. The JV also allows
UK Solutions to continue testing its new technologies and drive
efficiencies in the UK. The creation of the joint venture freed up
capital, with M&S having initially paid about GBP563 million to
support UK Solutions, which ring-fenced Ocado's UK retail
operations. Fitch expects the JV's contribution to consolidated
Ocado's financial performance to structurally decline based on
Fitch's projected growth for the Solutions business.

JV Trading to Normalise: Fitch expects UK Solutions to benefit from
about GBP140 million fees received from the JV for providing the IT
platform, CFCs and logistics in FY23. Trading in 3Q21 was affected
by a contained fire at the Erith CFC, which management expects to
have net (post insurance) GBP10 million impact on EBITDA along with
sector-wide pressures stemming from driver shortages and increasing
labour costs. Management expects a GBP5 million impact via measures
to address the sector wide pressures.

The pandemic had a positive impact on the JV with people
increasingly shopping online. Revenue and reported EBITDA rose
materially in FY20 despite a limited increase in orders amid
capacity constraints. However, consumer behaviour started to
normalise in 2Q21 with average basket size in value and unit terms
reducing towards pre-pandemic levels.

Accelerated Online Growth: Fitch expects the accelerated growth and
continued shift to online grocery shopping to have a positive
impact on Ocado Solutions as demand for automated warehouses and
online platforms grows and the profitability of online channels
becomes more critical to retailers. Testifying the soundness of
Ocado's business proposition and its competitive advantage as
supplier of online grocery management services, Ocado Retail, the
company's main operation, which is currently live and has an
established record, reported a 1H21 EBITDA margin of 8.5%, ahead of
other grocers, although this could have been boosted by pandemic.

DERIVATION SUMMARY

Fitch applies its Business Service Navigator framework to Ocado.
This reflects that the UK retail operations are ring-fenced with no
direct recourse to Ocado's group lenders and Fitch's view that the
business risk profile of the solutions business will drive Ocado's
credit quality in the long term, given the accelerating growth of
and investment into these operations.

Fitch assumes that Ocado Solutions, which includes UK Solutions &
Logistics and International Solutions, once it reaches maturity,
should exhibit an FFO margin above 15%, which would be solid for
the rating. However, even by FY23, the ability to deleverage
organically from positive free cash flow, and hence the rating,
could come under pressure from continuing capex requirements.

Not only would Ocado's credit profile benefit from a contracted
revenue base, the business risk profile would also benefit from low
customer churn and high switching costs (a function of its bespoke
technology) and a diversified geographic presence. This helps
counterbalance some reliance on Kroger as its key customer and
partner.

KEY ASSUMPTIONS

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

-- Revenues under Ocado's international solutions business
    ramping up towards GBP300 million by FY23;

-- Ocado Solutions EBITDA (UK Solutions and International
    Solutions) to remain negative until FY22, before turning
    positive at about GBP120 million in FY23;

-- UK retail sales (the JV) rising towards GBP2.8 billion by
    FY23;

-- Gross capex ranging between GBP750 million and GBP900 million
    a year in FY21 to FY23;

-- No upstream dividends from the JV, nor investment by Ocado
    into the JV over the next four years.

Fitch's Key Recovery Rating Assumptions:

The recovery analysis assumes that Ocado would be reorganised as a
going concern (GC) in bankruptcy rather than liquidated. Fitch has
assumed a 10% administrative claim and the value available to
creditors consisting of the sum of the Ocado restricted group's EV
and 50% of the JV.

Ocado's GC EBITDA is based on the first year of projected positive
EBITDA for the solutions division (FY23) at GBP118 million. This is
at the point when first few international CFCs are assumed to have
ramped up, and Ocado continues its expansion. Fitch considers that
about GBP70 million of this would be available to creditors in a
post-restructuring scenario, given the execution risk on
International Solutions while also recognising a more established
UK Solutions business. The increase against GC EBITDA of GBP40
million previously is due to slightly higher planned capacity for
UK Solutions, recognition of deferred revenue from international
CFCs that is partially offset by higher costs.

Fitch has used a 6.0x enterprise value/EBITDA multiple, which is in
line with business services companies' distressed multiple, but
reflects the strong growth of the business and its market
position.

Following more material EBITDA generation by the JV, Fitch now
attributes half of its estimated ca. GBP1 billion value for this
business in Fitch's GC valuation for Ocado. Fitch views that
default would not be simultaneous and base the JV valuation on
estimated sustainable GBP110 million EBITDA and a 9x multiple. The
multiple is conservatively in the low end of trading multiples for
grocers such as Tesco PLC (BBB-/Stable), Sainsbury's, Morrisons,
Kroger and M&S. Any increase in debt at the JV (Fitch deducts GBP30
million revolving credit facility) will affect the value attributed
to it.

New prospective senior unsecured notes rank pari passu with
convertible bonds, and debt quantum also includes GBP42.6 million
guarantee facilities, which are assumed to be used.

The outcome of the recovery analysis is in line with a 'BB-'/'RR3',
one notch above its Long-Term IDR. The waterfall analysis output
percentage on the current assumptions is 59% for a capital
structure with a new GBP400 million unsecured notes replacing
GBP225 million secured bond.

RATING SENSITIVITIES

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

Fitch does not envisage a positive rating action in the near term,
reflecting the inherent execution risks associated with the rapid
transformation into a solution and business service provider.
However, over the longer term, evidence of greater maturity in the
solutions business, with increasing scale and diversification, and
positive EBITDA contributions and lower up-front capex would
indicate successful execution of Ocado's growth strategy and be
positive for the rating:

-- FFO margin at low- to mid-single digits;

-- Breakeven performance of the business leading to some
    visibility towards an FFO adjusted leverage ratio sustainably
    below 5.0x.

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

-- Execution risks associated with Ocado's business
    transformation, such as a material underperformance in the
    Ocado/M&S JV due to disruption of supply arrangements, product
    offerings, customer loyalty, or a delay to or cost overruns in
    the roll-out of the investment plan, leading to a
    significantly faster cash burn than anticipated in Fitch's
    rating case.

-- Evidence of an increase in the number of new CFCs or new
    capex-intensive initiatives without sufficient funding in
    place.

-- Higher cash burn in relation to higher costs and capex than
    Fitch's rating case, leading to further funding needs over
    Fitch's our-year rating horizon, with evidence of readily
    available cash below GBP1 billion in FY21 or at a level
    insufficient to fund operation and investments until at least
    December 2022.

-- UK Solutions not moving towards break-even EBITDA by FY22 and
    unable to achieve positive EBITDA by FY23.

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

High Cash Reserves Supporting Investments: Ocado's available
liquidity (including cash deposits) for FYE20 at GBP1.9 billion was
strong and sufficient to cover incremental capex to support
building and putting into operation the planned number of
international and UK CFCs until FY23. Fitch expects Ocado to retain
about GBP1.3 billion of cash on its balance sheet at end-FY21.

Although its cash balance is not enough to cover the next three
years of capex and Fitch expects the company to require funding in
FY23, Fitch expects FFO to turn positive by FY23, due to the
maturing profile of the international CFCs. Successful execution of
its strategy will determine Ocado's ability to refinance. Closest
maturity after refinancing of existing senior secured notes (due in
2024) is in 2025 for GBP600 million convertible bonds if they were
redeemed. In the past, Ocado has demonstrated a strong access to
financial markets, including in June 2020 when it launched the
GBP350 million convertible bond in conjunction with GBP657 million
raised by placing new shares.

ESG Commentary

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

ISSUER PROFILE

Ocado is a technology company that develops end-to-end operating
solutions for online grocery retail. It also has its own grocery
retail operations, which are ring-fenced in a joint venture with
M&S.


OCADO GROUP: Moody's Affirms B2 CFR & Rates New GBP400MM Notes B2
-----------------------------------------------------------------
Moody's Investors Service has affirmed the B2 corporate family
rating of UK online grocery retailer and technology-driven software
and robotics platform business Ocado Group plc (Ocado or the
company) and upgraded the probability of default rating to B1-PD
from B2-PD. At the same time, Moody's assigned B2 ratings to the
company's new planned GBP400 million backed senior unsecured notes.
The outlook on the ratings is stable.

Proceeds from the planned new issuance will fully refinance the
company's currently outstanding GBP225 million backed senior
secured notes, fund roughly GBP168 million of cash on balance sheet
for general corporate purposes with the remainder of proceeds used
to pay for transaction costs and fees. Moody's will withdraw the
current Ba2 ratings on the outstanding GBP225 million backed senior
secured notes once they are repaid.

The change in PDR reflects the change in debt structure of the
company following the envisaged new issuance and Moody's assumption
of a 35% recovery rate as is typical for capital structures
including only unsecured bonds without strong covenants.

RATINGS RATIONALE

The B2 CFR affirmation reflects Ocado's (1) contractual agreements
to develop online delivery solutions for multiple international
grocers, which include an increasing number of fulfillment centres
which are live; (2) a material increase in the company's equity
market capitalisation and continuing access to the equity and debt
capital markets; and (3) the establishment in 2019 of a retail
joint venture with Marks & Spencer p.l.c. (M&S, Ba1 negative) which
resulted in a significant cash receipt for Ocado and also secured a
new branded grocery supplier ahead of the expiry of the contract
with Waitrose in 2020. These factors in combination mean that
Ocado's liquidity will remain good during this year and next
notwithstanding its major capital spending plans.

The company's B2 CFR is constrained by (1) weak credit metrics
arising from the combination of high debt with low profitability;
(2) ongoing execution risks with respect to the various commitments
to develop online delivery solutions for international partners and
to meet continued growth in demand in the UK; and (3) very
significant capital spending in respect of those commitments, which
will result in the company's high cash balances being depleted in
the next two to three years absent a return to the capital
markets.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONSIDERATIONS

Environmental and social considerations do not have a meaningful
impact on Moody's assessment of Ocado's current credit quality.
However, like all consumer facing businesses the company is exposed
to reputational damage in the event its actions harmed customers or
were perceived to harm them.

Moody's takes Ocado's governance practices into account in Moody's
assessment of the company's credit quality, including financial
policies. Ocado has primarily used equity to fund its heavy capital
spending commitments and has to date demonstrated a prudent
approach to liquidity management.

LIQUIDITY

Ocado's liquidity is supported by cash (and treasury deposits) on
its balance sheet, which as at May 30, 2021 and proforma for this
transaction will be around GBP1.8 billion.

Moody's expects significantly negative free cash flows of around
GBP600 million in fiscal 2021 and around GBP800-900 million a year
in fiscal 2022 and 2023 (on a Moody's adjusted basis). Despite the
heavily negative free cash flows expected over the next 12-18
months Moody's anticipates that the company's cash balances will
remain more than the outstanding senior unsecured balance over the
same period without further equity or debt issuance. Clearly though
at some stage continued heavy capital spending will necessitate
further equity or debt issuance.

STRUCTURAL CONSIDERATIONS

The planned GBP400 million backed senior unsecured notes are rated
B2, in line with Ocado's B2 CFR, and rank pari passu with the
company's all other outstanding debt consisting of the GBP600
million and GBP350 million unsecured convertible bonds due 2025 and
2027 respectively.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects Moody's expectation that the company
will over the next 12-18 months maintain an at least adequate
liquidity profile. In addition, Moody's expects the company to
retain full access to the capital markets to support its ongoing
heavy capital spending. As such, an inability to access additional
funds at an appropriate time would have negative rating
implications.

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

Considering the expected continuing weak credit metrics and need
for ongoing access to additional funds to support the company's
future growth ambitions an upgrade is unlikely in the next two
years at least. Beyond that time, strong profit growth, sustained
positive free cash flow and a material deleveraging from current
levels would be prerequisites for positive rating pressure.

Conversely, a downgrade would be appropriate in the event of a
deterioration in the company's liquidity profile, most likely due
to an inability to access the capital markets at an appropriate
time. Moreover, a downgrade would be considered in the event of
material execution issues either with respect to Ocado's own retail
operations or in the development and deployment of online retail
solutions for third-party grocers or if EBITDA growth falls short
of Moody's expectations.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Retail Industry
published in May 2018.

LIST OF AFFECTED RATINGS

Issuer: Ocado Group plc

Upgrades:

Probability of Default Rating, Upgraded to B1-PD from B2-PD

Assignments:

BACKED Senior Unsecured Regular Bond/Debenture, Assigned B2

Affirmations:

LT Corporate Family Rating, Affirmed B2

Outlook Actions:

Outlook, Remains Stable

COMPANY PROFILE

Ocado was established in 2000 as a pure-play grocery e-tailer, now
Ocado Retail, a 50:50 joint venture with M&S, and the UK's only
scale pure-play grocery e-tailer and, with total revenues of GBP2.6
billion in the last twelve months ending May 2021. In addition to
maintaining a 50% share in this online grocery business, the
company now provides the end-to-end technology it built to serve
this business, as a managed service to retailers via its UK
Solutions & Logistics and International Solutions divisions.
Morrisons is the longest-standing Solutions customer, with Ocado
operating the morrisons.com website and fulfilling the orders
placed on it. Since 2017, Ocado has announced deals to provide
solutions to eight international retailers, including France's
Casino Guichard-Perrachon SA (B3 stable), Sobeys Inc. of Canada and
The Kroger Co. (Baa1 stable), the largest traditional supermarket
chain in the US.


OSB GROUP: Fitch Gives 'B+(EXP)' Rating to Perpetual AT1 Notes
---------------------------------------------------------------
Fitch Ratings has assigned OSB GROUP PLC's (OSBG) planned issue of
perpetual Additional Tier 1 (AT1) notes an expected long-term
rating of 'B+(EXP)'.

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

KEY RATING DRIVERS

The notes will be perpetual, deeply subordinated, fixed-rate
resettable AT1 debt securities, with fully discretionary,
non-cumulative coupons. They will be subject to partial or full
write-down if OSBG's consolidated common equity Tier 1 (CET1) ratio
falls below 7.0%.

The expected rating is four notches below OSBG's 'bbb-' Viability
Rating (VR), reflecting poor recoveries due to the notes' deep
subordination (two notches) as well as incremental non-performance
risk relative to the VR (two notches), given fully discretionary
coupon payments and mandatory coupon restriction features,
including where prohibited by the regulator or where a coupon would
exceed distributable items.

OSBG maintains sound buffers above its regulatory capital
requirements. At end-1H21, OSBG's 18.7% consolidated CET1 ratio,
which is also its total capital ratio was 1090bp above its 7.8%
CET1 regulatory requirement, and 680bp above its 11.9% total
capital regulatory requirement including capital conservation
buffer.

RATING SENSITIVITIES

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

-- The AT1 notes' rating would be upgraded if OSBG's VR was
    upgraded.

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

-- The AT1 notes' rating would be downgraded if OSBG's VR was
    downgraded.

-- The notes could also be downgraded if Fitch changes its
    assessment of the probability of the notes' non-performance
    relative to the risk captured in the VR. This could result in
    a widening of the notching between the notes and the VR. Fitch
    would consider that the probability of the notes non-
    performance compared with the bank's VR to increase if, for
    example, the group's CET1 ratio falls below management's 13%
    target over a sustained period or if the bank's regulatory
    requirement increases unexpectedly.

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.

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.

TOGETHER ASSET 2020-1: Moody's Ups Rating on Cl. E Notes From Ba2
-----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings of three notes
in Together Asset Backed Securitisation 2018-1 plc ("TABS 2018-1"),
four notes in Together Asset Backed Securitisation 2019-1 plc
("TABS 2019-1") and four notes in Together Asset Backed
Securitisation 2020-1 PLC ("TABS 2020-1"). The rating action
reflects the increased levels of credit enhancement for the
affected notes, and better than expected collateral performance.

Moody's affirmed the ratings of the notes that had sufficient
credit enhancement to maintain their current ratings.

Issuer: Together Asset Backed Securitisation 2018-1 plc

GBP225.2M Class A Notes, Affirmed Aaa (sf); previously on Jul 27,
2020 Affirmed Aaa (sf)

GBP12.2M Class B Notes, Upgraded to Aaa (sf); previously on Jul
27, 2020 Affirmed Aa1 (sf)

GBP12.2M Class C Notes, Upgraded to Aaa (sf); previously on Jul
27, 2020 Affirmed Aa3 (sf)

GBP23M Class D Notes, Upgraded to A1 (sf); previously on Jul 27,
2020 Confirmed at Baa2 (sf)

Issuer: Together Asset Backed Securitisation 2019-1 plc

GBP262.3M Class A Notes, Affirmed Aaa (sf); previously on Jul 27,
2020 Affirmed Aaa (sf)

GBP14.9M Class B Notes, Upgraded to Aaa (sf); previously on Jul
27, 2020 Affirmed Aa1 (sf)

GBP13.3M Class C Notes, Upgraded to Aa1 (sf); previously on Jul
27, 2020 Affirmed A1 (sf)

GBP19.9M Class D Notes, Upgraded to A3 (sf); previously on Jul 27,
2020 Confirmed at Baa3 (sf)

GBP5M Class E Notes, Upgraded to Baa2 (sf); previously on Jul 27,
2020 Confirmed at Ba2 (sf)

Issuer: Together Asset Backed Securitisation 2020-1 PLC

GBP290.97M Class A Notes, Affirmed Aaa (sf); previously on Jul 23,
2020 Definitive Rating Assigned Aaa (sf)

GBP23.79M Class B Notes, Upgraded to Aaa (sf); previously on Jul
23, 2020 Definitive Rating Assigned Aa2 (sf)

GBP14.64M Class C Notes, Upgraded to Aa2 (sf); previously on Jul
23, 2020 Definitive Rating Assigned A3 (sf)

GBP9.15M Class D Notes, Upgraded to A1 (sf); previously on Jul 23,
2020 Definitive Rating Assigned Baa3 (sf)

GBP9.15M Class E Notes, Upgraded to Baa1 (sf); previously on Jul
23, 2020 Definitive Rating Assigned Ba2 (sf)

The three transactions are static cash securitisations of
non-conforming residential and commercial mortgages extended to
obligors located in the UK with some exposure to buy-to-let
mortgages and to loans with adverse credit.

RATINGS RATIONALE

The rating action is prompted by an increase in credit enhancement
for the affected tranches, as well as decreased key collateral
assumptions, namely the portfolio Expected Loss (EL) in all three
transactions and the MILAN CE assumption in TABS 2019-1 and TABS
2020-1 due to better than expected collateral performance.

Increase in Available Credit Enhancement

Sequential amortisation and fully funded non-amortising reserve
funds led to the increase in the credit enhancement available in
TABS 2018-1, TABS 2019-1 and TABS 2020-1. All three transactions
benefit from a dual ledger reserve structure, where the first
ledger is dedicated to provide liquidity solely for the Class A
Notes, whereas the second ledger is available for all the Notes
including Class A Notes. The dual reserve fund amounts are non
amortising in all three securitisations. In TABS 2018-1 and TABS
2019-1 the allocation between the two ledgers is now fixed until
the legal maturity date, whereas in TABS 2020-1 the first ledger is
still reducing, to the benefit of the second ledger. The second
ledger is available to cover shortfalls in interest payments on all
the Notes, as well as to cure a principal deficiency ledger
recorded on the Notes.

The credit enhancement for Classes B, C, and D in TABS 2018-1
increased from 29.5%, 23.1% and 11.1% to 37.3%, 29.2% and 14.0%
respectively since the last rating action in July 2020.

The credit enhancement for Classes B, C, D and E in TABS 2019-1
increased from 20.6%, 16.2%, 9.7% and 8.1% to 26.7%, 21.3%, 12.7%
and 10.5% since the last rating action in July 2020.

The credit enhancement for Classes B, C, D and E in TABS 2020-1
increased from 17.0%, 13.0%, 10.5% and 8.0% to 20.5%, 15.7%, 12.6%
and 9.6% since the ratings were assigned in July 2020.

Key Collateral Assumptions:

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

The collateral performance of TABS 2018-1, TABS 2019-1 and TABS
2020-1 has been better than expected at closing. Arrears greater
than 90 days as a percentage of current balance are currently
standing at 6.39%, 2.15%, and 1.28% respectively, with a pool
factor at 52.6%, 70.0% and 83.1%. All three transactions'
collateral pools did not incur any losses since closing.

Moody's assumed an expected loss as a percentage of the current
pool balance of 6.43%, 6.06% and 6.30% respectively for TABS
2018-1, TABS 2019-1 and TABS 2020-1, due to the better than
expected collateral performance. This corresponds to an expected
loss assumption as a percentage of the original pool balance of
3.38%, 4.24% and 5.33% for TABS 2018-1, TABS 2019-1 and TABS 2020-1
respectively, down from the previous assumptions of 5.5%, 7.5% and
7.0%.

Moody's has also assessed loan-by-loan information as a part of its
detailed transaction review to determine the credit support
consistent with target rating levels and the volatility of future
losses. Based on the assessment of the current composition of the
pool Moody's has decreased the MILAN CE assumption for TABS 2019-1
and TABS 2020-1 to 22.0% from 24.0%. The MILAN CE assumption for
TABS 2018-1 was left unchanged at 22.0%.

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

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

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

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

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

[*] Fitch Puts 20 UK RMBS Ratings on Watch Negative
---------------------------------------------------
Fitch Ratings, on September 28, 2021, placed 20 UK RMBS ratings on
Rating Watch Negative (RWN) following the publication of its UK
RMBS Rating Criteria on 23 September 2021.

        DEBT                    RATING                PRIOR
        ----                    ------                -----
Preferred Residential Securities 06-1 PLC

Class E1c XS0243669529    LT Bsf   Rating Watch On    Bsf

Clavis Securities plc Series 2006-01

Class A3a XS0255457706    LT Bsf   Rating Watch On    Bsf
Class A3b XS0255438748    LT Bsf   Rating Watch On    Bsf
Class B1a XS0255425927    LT Bsf   Rating Watch On    Bsf
Class B1b XS0255440728    LT Bsf   Rating Watch On    Bsf
Class B2a XS0255426818    LT Bsf   Rating Watch On    Bsf
Class M1a XS0255424441    LT Bsf   Rating Watch On    Bsf
Class M1b XS0255439043    LT Bsf   Rating Watch On    Bsf
Class M2a XS0255425414    LT Bsf   Rating Watch On    Bsf

Towd Point Mortgage Funding - Auburn 13

E XS2053913393            LT Bsf   Rating Watch On    Bsf

Eurosail-UK 2007-6 NC Plc

Class B1a XS0332286862    LT B+sf  Rating Watch On    B+sf
Class C1a XS0332287084    LT Bsf   Rating Watch On    Bsf

Preferred Residential Securities 05-2 PLC

Class E1c XS0234213642    LT Bsf   Rating Watch On    Bsf

Eurosail Prime-UK 2007-A PLC

Class B (restructured)    LT Bsf   Rating Watch On    Bsf
XS1074654481  

Eurosail-UK 2007-5 NP Plc

Class A1a XS0328024608    LT B+sf  Rating Watch On    B+sf
Class A1c XS0328025241    LT B+sf  Rating Watch On    B+sf
Class B1c XS0328025324    LT Bsf   Rating Watch On    Bsf

Southern Pacific Securities 06-1 plc

Class E1c 84359LAS3       LT Bsf   Rating Watch On    Bsf

Eurosail 2006-3 NC Plc

E1c XS0271947375          LT Bsf   Rating Watch On    Bsf

Eurosail-UK 07-4 BL Plc

Class C1a XS0311708696    LT Bsf   Rating Watch On    Bsf

KEY RATING DRIVERS

UK RMBS Criteria Publication: The affected tranches have
model-implied ratings (MIR) lower than 'B-sf' and a current rating
of 'Bsf' or 'B+sf'. The updated UK RMBS Rating Criteria provides
that rating committees will now determine a rating in the range of
'Csf' to 'B-sf' instead of up to 'B+sf' for notes with a MIR lower
than 'B-sf'.

Ratings being placed on RWN indicate the possibility of a downgrade
as a result of the application of the new criteria. The RWN will be
resolved on a transaction-specific basis by applying the new
criteria within six months of the new criteria publication. Fitch
will resolve the RWN on all ratings by 22 March 2022.

RATING SENSITIVITIES

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

-- Rating sensitivities as disclosed in the latest rating action
    commentaries on each transaction continue to apply.

VARIATIONS

Where relevant, criteria variations as disclosed in the latest
rating action commentaries on each transaction continue to apply.

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 not conducted any checks on the consistency and
plausibility of the information it has received about the
performance of the asset pools and the transactions. 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.



                           *********


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 * * *