/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/211019.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Tuesday, October 19, 2021, Vol. 22, No. 203 Headlines G E R M A N Y SC GERMANY 2021-1: Fitch Assigns BB+(EXP) Rating on Class F Notes I R E L A N D BLUEMOUNTAIN EUR 2021-2: Fitch Gives Final 'B-(EXP)' to F Debt CIFC EUROPEAN V: Moody's Assigns (P)B3 Rating to EUR11.9MM F Notes SOUND POINT VI: Fitch Assigns Final B- Rating on Class F Debt TIKEHAU CLO II: Moody's Assigns (P)B3 Rating to EUR11.6MM F Notes I T A L Y MONTE DEI PASCHI: Italian Gov't. Seeks Extension of Sale Deadline R U S S I A ATON FINANCIAL: Fitch Assigns 'B+' LT IDRs, Outlook Positive SME BANK: Moody's Withdraws B3 LongTerm Deposit Rating TINKOFF BANK: Fitch Alters Support Rating Floor to 'B+' [*] RUSSIA: DIA to Oversee Temporary Administration of Banks S P A I N ENCE ENERGIA: Moody's Affirms Ba3 CFR & Alters Outlook to Negative U K R A I N E METINVEST: S&P Raises LongTerm ICR to 'B+', Outlook Stable U N I T E D K I N G D O M AMIGO LOANS: Moody's Extends Review on Caa1 CFR for Downgrade CONSUMER WEALTH: FCA Fines Ex-Director, Senior Financial Adviser GOTO ENERGY: Ceases Trading Amid Soaring Wholesale Gas Prices INTU METROCENTRE: Fitch Affirms and Withdraws CC Rating RANGERS FOOTBALL: Prosecution Service Paid Out GBP35 Million - - - - - ============= G E R M A N Y ============= SC GERMANY 2021-1: Fitch Assigns BB+(EXP) Rating on Class F Notes ----------------------------------------------------------------- Fitch Ratings has assigned SC Germany S.A., Compartment Consumer 2021-1's (SCGC 2021-1) notes expected ratings. The final ratings are contingent upon receipt of the final documents and legal opinions conforming to the information already received. DEBT RATING ---- ------ SC Germany S.A., Compartment Consumer 2021-1 Class A LT AAA(EXP)sf Expected Rating Class B LT AA(EXP)sf Expected Rating Class C LT A(EXP)sf Expected Rating Class D LT BBB(EXP)sf Expected Rating Class E LT BBB-(EXP)sf Expected Rating Class F LT BB+(EXP)sf Expected Rating Class G LT NR(EXP)sf Expected Rating TRANSACTION SUMMARY In SCGC 2021-1, Santander Consumer Bank AG (SCB, A-/Stable/F2) will securitise an unsecured consumer loan portfolio with a 12-month revolving period. After the end of the revolving period, the class A to E notes will pay down pro rata until a performance or other trigger is breached. The class F notes are paid sequentially to the class A to E notes in the principal priority of payments. They also benefit from a target amortisation through excess spread via the interest priority of payments. This is SCB's seventh public unsecured consumer loan transaction and the second that Fitch will rate. KEY RATING DRIVERS Pro Rata Length Key: In Fitch's cash-flow modelling, the full repayment of senior notes is heavily dependent on the length of the pro-rata attribution of principal funds. The dynamic loss trigger is the most effective of the performance triggers that stop the pro-rata period. Its effectiveness and that of the other performance triggers is sensitive to Fitch's input parameters such as the default timing and the prepayment speed. For example, late defaults and high prepayments are credit negative. This is because excess spread flows out of the transaction that would otherwise be applied to repay principal. Performance Expectations Less Affected by Coronavirus: Fitch set its base cases at 5.0% for the default rate and 17.5% for the recovery rate. This is lower than determined for the predecessor transaction in November 2020. Fitch believes the uncertainty caused by the pandemic has largely been lifted compared with when Fitch sets base cases. Counterparty Risks Addressed: The transaction has a fully funded liquidity reserve for payment interruption and reserves for commingling and set-off risk, which will be funded if the seller or Santander Consumer Finance, S.A. (A-/Stable/F2) is downgraded below 'BBB' or 'F2'. All reserves are adequate to cover their respective exposures in line with Fitch's Structured Finance and Covered Bonds Counterparty Rating Criteria. Replacement criteria for the servicer, account bank and swap counterparty are adequately defined and relevant ratings are above Fitch's criteria thresholds. The Key Rating Drivers listed in the applicable sector criteria, but not mentioned above, are not material to this rating action. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: Unanticipated increases in the frequency of defaults or decreases in recovery rates could produce larger losses than the base case and could result in negative rating action on the notes. -- Class A: 'AAA(EXP)sf'; -- Class B: 'AA(EXP)sf'; -- Class C: 'A(EXP)sf'; -- Class D: 'BBB(EXP)sf'; -- Class E: 'BBB-(EXP)sf'; -- Class F: 'BB+(EXP)sf'. 10% increase in default rate: -- Class A: 'AA+(EXP)sf'; -- Class B: 'AA-(EXP)sf'; -- Class C: 'A-(EXP)sf'; -- Class D: 'BBB-(EXP)sf'; -- Class E: 'BB+(EXP)sf'; -- Class F: 'BB(EXP)sf'. 10% decrease in recovery rate: -- Class A: 'AA+(EXP)sf'; -- Class B: 'AA(EXP)sf'; -- Class C: 'A(EXP)sf'; -- Class D: 'BBB-(EXP)sf'; -- Class E: 'BBB-(EXP)sf'; -- Class F: 'BB+(EXP)sf'. 10% increase in default rate and 10% decrease in recovery rate: -- Class A: 'AA+(EXP)sf'; -- Class B: 'AA-(EXP)sf'; -- Class C: 'A-(EXP)sf'; -- Class D: 'BBB-(EXP)sf'; -- Class E: 'BB+(EXP)sf'; -- Class F: 'BB(EXP)sf' Longer than expected periods for default recognition would lead to excess spread not being trapped in the meantime. The sequential payment triggers may also be hit later. This could result in negative rating action on the notes. The sensitivities below are given when applying a longer default definition of five months instead of the four months assumed. All other inputs are unchanged. -- Class A: 'AA+(EXP)sf'; -- Class B: 'AA-(EXP)sf'; -- Class C: 'A(EXP)sf'; -- Class D: 'BBB-(EXP)sf'; -- Class E: 'BB+(EXP)sf'; -- Class F: 'BB+(EXP)sf'. With a faster repayment of the assets, excess spread is lost that would otherwise be applied to repay principal. The sensitivities below are given by applying a base case prepayment rate of 28% instead of the 22% assumed. Prepayment rates are then scaled upwards and downwards in line with Fitch's Consumer ABS Rating Criteria Report. All other inputs are unchanged. -- Class A: 'AA+(EXP)sf'; -- Class B: 'AA-(EXP)sf'; -- Class C: 'A-(EXP)sf'; -- Class D: 'BBB-(EXP)sf'; -- Class E: 'BB+(EXP)sf'; -- Class F: 'BB(EXP)sf'. Factors that could, individually or collectively, lead to positive rating action/upgrade: Unanticipated decreases in the frequency of defaults or increases in recovery rates could produce lower losses than the base case and could result in positive rating action on the notes. Original ratings: -- Class A: 'AAA(EXP)sf'; -- Class B: 'AA(EXP)sf'; -- Class C: 'A(EXP)sf'; -- Class D: 'BBB(EXP)sf'; -- Class E: 'BBB-(EXP)sf'; -- Class F: 'BB+(EXP)sf'. 10% decrease in default rate: -- Class A: 'AAA(EXP)sf'; -- Class B: 'AA+(EXP)sf'; -- Class C: 'A+(EXP)sf'; -- Class D: 'BBB(EXP)sf'; -- Class E: 'BBB-(EXP)sf'; -- Class F: 'BBB-(EXP)sf'. 10% increase in recovery rate: -- Class A: 'AAA(EXP)sf'; -- Class B: 'AA(EXP)sf'; -- Class C: 'A(EXP)sf'; -- Class D: 'BBB(EXP)sf'; -- Class E: 'BBB-(EXP)sf'; -- Class F: 'BB+(EXP)sf'. 10% decrease in default rate and 10% increase in recovery rate: -- Class A: 'AAA(EXP)sf'; -- Class B: 'AA+(EXP)sf'; -- Class C: 'A+(EXP)sf'; -- Class D: 'BBB+(EXP)sf'; -- Class E: 'BBB(EXP)sf'; -- Class F: 'BBB-(EXP)sf'. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch reviewed the results of a third party assessment conducted on the asset portfolio information, and concluded that there were no findings that affected the rating analysis. Overall, 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 Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. ============= I R E L A N D ============= BLUEMOUNTAIN EUR 2021-2: Fitch Gives Final 'B-(EXP)' to F Debt -------------------------------------------------------------- Fitch Ratings has assigned BlueMountain EUR 2021-2 CLO DAC expected ratings. The assignment of final ratings is contingent on the receipt of final documents conforming to information already reviewed. DEBT RATING ---- ------ BlueMountain EUR 2021-2 CLO DAC A LT AAA(EXP)sf Expected Rating B-1 LT AA(EXP)sf Expected Rating B-2 LT AA(EXP)sf Expected Rating C LT A(EXP)sf Expected Rating D LT BBB-(EXP)sf Expected Rating E LT BB-(EXP)sf Expected Rating F LT B-(EXP)sf Expected Rating Sub Notes LT NR(EXP)sf Expected Rating TRANSACTION SUMMARY BlueMountain EUR 2021-2 CLO DAC is a securitisation of mainly senior secured obligations (at least 90%) with a component of senior unsecured, mezzanine, second-lien loans and high-yield bonds. Note proceeds will be used to fund a portfolio with a target par of EUR350 million. The portfolio will be actively managed by Assured Investment Management LLC. The collateralised loan obligation (CLO) has a 4.5-year reinvestment period and an 8.5-year weighted average life (WAL). KEY RATING DRIVERS Average Portfolio Credit Quality: Fitch places the average credit quality of obligors in the 'B'/'B-' category. The Fitch weighted average rating factor (WARF) of the identified portfolio is 25.65. High Recovery Expectations: 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 64.35%. Diversified Asset Portfolio: The transaction has a matrix based on its top 10 obligor limit and fixed-rate obligation limit. The transaction will also have 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: 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. Reduced Risk Horizon: Fitch's analysis of the matrices is based on a stressed-case portfolio with a 7.5-year WAL. Under the agency's CLOs and Corporate CDOs Rating Criteria, the WAL used for the transaction stress portfolio was 12 months less than the WAL covenant to account for structural and reinvestment conditions after the reinvestment period, including the OC tests and Fitch 'CCC' limitation passing after reinvestment. This ultimately reduces the maximum possible risk horizon of the portfolio when combined with loan pre-payment expectations. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- An increase of the rating default rate (RDR) at all rating levels by 25% of the mean RDR and a 25% decrease of the recovery rate at all rating levels would lead to a downgrade of up to four notches for the rated 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 a 25% increase of the recovery rate at all rating levels, would lead to an upgrade of up to five notches for the rated notes, except the class A notes, which are already the highest rating on Fitch's scale and cannot be upgraded. -- At closing, Fitch will use a standardised stressed portfolio (Fitch's stressed portfolio) that is customised to the portfolio limits as specified in the transaction documents. Even if the actual portfolio shows lower defaults and losses (at all rating levels) than Fitch's stressed portfolio assumed at closing, an upgrade of the notes during the reinvestment period is unlikely, given the portfolio credit quality may still deteriorate, not only by natural credit migration, but also by reinvestments and the manager can update the Fitch collateral quality test. -- After the end of the reinvestment period, upgrades may occur in case of a better-than-initially expected portfolio credit quality and deal performance, leading to higher credit enhancement and excess spread available to cover for losses in the remaining portfolio. 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 BlueMountain EUR 2021-2 CLO 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. CIFC EUROPEAN V: Moody's Assigns (P)B3 Rating to EUR11.9MM F Notes ------------------------------------------------------------------ Moody's Investors Service announced that it has assigned the following provisional ratings to the notes to be issued by CIFC European Funding CLO V DAC (the "Issuer"): EUR248,000,000 Class A Senior Secured Floating Rate Notes due 2034, Assigned (P)Aaa (sf) EUR30,400,000 Class B-1 Senior Secured Floating Rate Notes due 2034, Assigned (P)Aa2 (sf) EUR10,000,000 Class B-2 Senior Secured Fixed Rate Notes due 2034, Assigned (P)Aa2 (sf) EUR24,000,000 Class C Senior Secured Deferrable Floating Rate Notes due 2034, Assigned (P)A2 (sf) EUR28,600,000 Class D Senior Secured Deferrable Floating Rate Notes due 2034, Assigned (P)Baa3 (sf) EUR19,500,000 Class E Senior Secured Deferrable Floating Rate Notes due 2034, Assigned (P)Ba3 (sf) EUR11,900,000 Class F Senior Secured Deferrable Floating Rate Notes due 2034, Assigned (P)B3 (sf) RATINGS RATIONALE The rationale for the ratings is based on a consideration of the risks associated with the CLO's portfolio and structure as described in Moody's methodology. The Issuer is a managed cash flow CLO. At least 90% of the portfolio must consist of senior secured obligations and up to 10% of the portfolio may consist of senior unsecured obligations, second-lien loans, mezzanine obligations and high yield bonds. The portfolio is expected to be 80% ramped up as of the closing date and to comprise of predominantly corporate loans to obligors domiciled in Western Europe. The remainder of the portfolio will be acquired during the six month ramp-up period in compliance with the portfolio guidelines. CIFC Asset Management Europe Ltd ("CIFC") will manage the CLO. It will direct the selection, acquisition and disposition of collateral on behalf of the Issuer and may engage in trading activity, including discretionary trading, during the transaction's 4.75 year reinvestment period. Thereafter, subject to certain restrictions, purchases are permitted using principal proceeds from unscheduled principal payments and proceeds from sales of credit risk obligations or credit improved obligations. In addition to the seven classes of notes rated by Moody's, the Issuer will issue EUR35,300,000 Subordinated Notes due 2034 and EUR35,300,000 Class Y Notes due 2034 which are not rated. The Class Y Notes accrue interest in an amount equivalent to a certain proportion of the subordinated management fees and its notes' payment is pari passu with the payment of the subordinated management fee. The transaction incorporates interest and par coverage tests which, if triggered, divert interest and principal proceeds to pay down the notes in order of seniority. Methodology underlying the rating action: The principal methodology used in these ratings was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in December 2020. Factors that would lead to an upgrade or downgrade of the ratings: The rated notes' performance is subject to uncertainty. The notes' performance is sensitive to the performance of the underlying portfolio, which in turn depends on economic and credit conditions that may change. The collateral manager's investment decisions and management of the transaction will also affect the notes' performance. Moody's modeled the transaction using a cash flow model based on the Binomial Expansion Technique, as described in Section 2.3 of the "Moody's Global Approach to Rating Collateralized Loan Obligations" rating methodology published in December 2020. Moody's used the following base-case modeling assumptions: Par Amount: EUR400,000,000 Diversity Score: 50 Weighted Average Rating Factor (WARF): 3125 Weighted Average Spread (WAS): 3.75% Weighted Average Coupon (WAC): 4.00% Weighted Average Recovery Rate (WARR): 45.00% Weighted Average Life (WAL): 9.17 years SOUND POINT VI: Fitch Assigns Final B- Rating on Class F Debt ------------------------------------------------------------- Fitch Ratings has assigned Sound Point Euro CLO VI Funding DAC final ratings. DEBT RATING PRIOR ---- ------ ----- Sound Point Euro CLO VI Funding DAC Class A XS2381149694 LT AAAsf New Rating AAA(EXP)sf Class B1 XS2381150437 LT AAsf New Rating AA(EXP)sf Class B2 XS2381151161 LT AAsf New Rating AA(EXP)sf Class C XS2381151831 LT Asf New Rating A(EXP)sf Class D XS2381152565 LT BBB-sf New Rating BBB-(EXP)sf Class E XS2381152649 LT BB-sf New Rating BB-(EXP)sf Class F XS2381152722 LT B-sf New Rating B-(EXP)sf Subordinate Notes LT NRsf New Rating NR(EXP)sf XS2381153290 TRANSACTION SUMMARY Sound Point Euro Funding VI CLO DAC is a securitisation of mainly senior secured obligations (at least 90%) with a component of senior unsecured, mezzanine, second-lien loans and high-yield bonds. Note proceeds have been used to fund a portfolio with a target par of EUR425 million. The portfolio is actively managed by Sound Point CLO C-MOA, LLC (SPCM). The transaction has a five-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 in the 'B' category. The Fitch weighted average rating factor (WARF) of the identified portfolio is 25.48. High Recovery Expectations (Positive): At least 90% of the portfolio comprises senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch weighted average recovery rate (WARR) of the identified portfolio is 64.99%. Diversified Portfolio (Positive): The transaction includes two Fitch matrices corresponding to two top-10 obligor concentration limits at 16% and 25% with fixed-rate assets limited to 10%. The transaction also includes various concentration limits, including a 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 five-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's stressed-case portfolio and matrices analysis is 12 months less than the WAL covenant, to account for structural and reinvestment conditions after the reinvestment period, including over-collateralisation (OC) test and Fitch 'CCC' limitation and WARF tests being passed after reinvestment, among others. This ultimately reduces the maximum possible risk horizon of the portfolio when combined with loan prepayment expectations. RATING SENSITIVITIES Factor 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 will result in downgrades of no more than five notches, depending on the notes. 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 an upgrade of up to four 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-case portfolio that is customised to the portfolio limits as specified in the transaction documents. Even if the actual portfolio shows lower defaults and smaller losses at all rating levels than Fitch's stressed-case portfolio assumed at closing, an upgrade of the notes during the reinvestment period is unlikely, as the portfolio's credit quality may still deteriorate, not only by natural credit migration, but also through reinvestments. -- After the end of the reinvestment period, upgrades may occur 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 The majority of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and/or other nationally recognised statistical rating organisations and/or European securities and markets authority-registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk-presenting entities. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. TIKEHAU CLO II: Moody's Assigns (P)B3 Rating to EUR11.6MM F Notes ----------------------------------------------------------------- Moody's Investors Service announced that it has assigned the following provisional ratings to refinancing notes to be issued by Tikehau CLO II DAC (the "Issuer"): EUR248,000,000 Class A Senior Secured Floating Rate Notes due 2035, Assigned (P)Aaa (sf) EUR23,900,000 Class B-1 Senior Secured Floating Rate Notes due 2035, Assigned (P)Aa2 (sf) EUR12,500,000 Class B-2 Senior Secured Fixed Rate Notes due 2035, Assigned (P)Aa2 (sf) EUR24,600,000 Class C Senior Secured Deferrable Floating Rate Notes due 2035, Assigned (P)A2 (sf) EUR29,400,000 Class D Senior Secured Deferrable Floating Rate Notes due 2035, Assigned (P)Baa3 (sf) EUR22,400,000 Class E Senior Secured Deferrable Floating Rate Notes due 2035, Assigned (P)Ba3 (sf) EUR11,600,000 Class F Senior Secured Deferrable Floating Rate Notes due 2035, Assigned (P)B3 (sf) RATINGS RATIONALE The rationale for the ratings is based on a consideration of the risks associated with the CLO's portfolio and structure as described in Moody's methodology. As part of this refinancing, the Issuer will extend the reinvestment period by 4.6 years and the weighted average life by 4.5 years to 8.5 years. It will also amend certain concentration limits, definitions including the definition of "Adjusted Weighted Average Rating Factor" and minor features. The issuer will include the ability to hold workout obligations. In addition, the Issuer will amend the base matrix and modifiers that Moody's will take into account for the assignment of the definitive ratings. The Issuer is a managed cash flow CLO. At least 90% of the portfolio must consist of secured senior loans or senior secured bonds and up to 10% of the portfolio may consist of unsecured senior loans, second-lien loans, high yield bonds and mezzanine loans. The underlying portfolio is expected to be approximately 81.92% ramped as of the closing date. Tikehau Capital Europe Limited ("Tikehau") will continue to manage the CLO. It will direct the selection, acquisition and disposition of collateral on behalf of the Issuer and may engage in trading activity, including discretionary trading, during the transaction's 4.6-year reinvestment period. Thereafter, subject to certain restrictions, purchases are permitted using principal proceeds from unscheduled principal payments and proceeds from sales of credit risk obligations and credit improved obligations. The transaction incorporates interest and par coverage tests which, if triggered, divert interest and principal proceeds to pay down the notes in order of seniority. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in December 2020. Factors that would lead to an upgrade or downgrade of the ratings: The rated notes' performance is subject to uncertainty. The notes' performance is sensitive to the performance of the underlying portfolio, which in turn depends on economic and credit conditions that may change. The collateral manager's investment decisions and management of the transaction will also affect the notes' performance. Moody's modeled the transaction using a cash flow model based on the Binomial Expansion Technique, as described in Section 2.3 of the "Moody's Global Approach to Rating Collateralized Loan Obligations" rating methodology published in December 2020. Moody's used the following base-case modeling assumptions: Target Par Amount: EUR400,000,000 Defaulted Par: EUR0 as of August 24, 2021 Diversity Score: 48 Weighted Average Rating Factor (WARF): 3100 Weighted Average Spread (WAS): 3.55% Weighted Average Coupon (WAC): 4.5% Weighted Average Recovery Rate (WARR): 44% Weighted Average Life (WAL): 8.63 years ========= I T A L Y ========= MONTE DEI PASCHI: Italian Gov't. Seeks Extension of Sale Deadline ----------------------------------------------------------------- Owen Walker and Davide Ghiglione at The Financial Times report that the Italian government is attempting to push back pressing deadlines over its sale of Monte dei Paschi di Siena as negotiations with would-be acquirer UniCredit hit a major stumbling block. The Italian Treasury, which bailed out MPS in 2017, is required to sell off its stake in the world's oldest bank by Dec. 31 under conditions set by the European Commission, the FT notes. But negotiators for the Treasury and UniCredit are "significantly apart" over how much capital the government would be required to inject into MPS, the FT relays, citing people involved in the talks. "There is a material distance between what UniCredit is now presenting as a deal that could work for them and what is acceptable for the Treasury," the FT quotes a person close to the negotiations as saying. The fate of MPS has become a fierce battleground in Italian politics, sparking infighting in the coalition government led by former European Central Bank president Mario Draghi, the FT notes. According to the FT, the Treasury has indicated it is unwilling to provide much more capital than its initial projection of EUR2 billion to EUR2.5 billion, which would be raised through a rights issue. But a person close to UniCredit said the Milan-based lender would require "much, much more capital" than even EUR5 billion, which would "only just help MPS to survive in the short term", the FT relates. People involved in the negotiations on both sides said the size of the capital injection was proving a major stumbling block and that each party would be prepared to walk away from a deal rather than conceding ground, the FT recounts. According to the FT, one negotiator said "the chances of a deal at this point are 50% or less", adding that there was just a 5% possibility of an agreement being announced by UniCredit's third-quarter results on Oct. 28, a deadline both parties had been striving to meet. UniCredit, the FT says, plans to present a new business strategy in the fourth quarter of the year and has told the Treasury that any deal over MPS will need to be agreed by the end of October as the protracted negotiations have held up its investor day. The impasse has led the Italian government to make inquiries to the EU over whether its deadline to sell the stake in MPS could be pushed back into next year, the FT states. While finding a single buyer for the 64% stake would prove tricky should the UniCredit deal collapse, Treasury officials are confident they can recapitalize the business and reduce the MPS holding over time in smaller sales, the FT notes. =========== R U S S I A =========== ATON FINANCIAL: Fitch Assigns 'B+' LT IDRs, Outlook Positive ------------------------------------------------------------ Fitch Ratings has assigned Aton Financial Holding (Aton) Foreign- and Local-Currency Long-Term Issuer Default Ratings (IDRs) of 'B+'. The Outlook on the Long-Term IDRs is Positive. Fitch rates Aton under the securities firm section of its Non-Bank Financial Institutions Rating Criteria. Given Aton's sizeable balance sheet and large proportion of balance sheet-linked revenue, Fitch primarily refers to balance-sheet-heavy securities firm metrics with balance-sheet-light (cash flow) metrics used as secondary metrics. KEY RATING DRIVERS The ratings of Aton are underpinned by its record of through-the-cycle performance, well-managed market and credit risks, adequate capitalisation and liquidity. The ratings also reflect its inherently cyclical business model and volatile profitability in a competitive market. The Positive Outlook reflects Fitch's expectation of Aton extending its improving trend of profitability metrics and earnings quality, supported by a growing franchise and favourable market developments. Its competitive advantage is driven by its long presence in the Russian/CIS investment market with a focus on the less competitive segment of high net worth individuals (HNWI), institutional clients and financial advisers served from its own platform, and leaner operations compared with larger domestic peers'. Aton's main business lines are reverse-repo transactions, brokerage services and proprietary trading, with volumes driven by client demand, and are sensitive to market volatility. Fitch sees low credit and market risks in Aton's reverse- repo transactions (about 40% of total assets at end-1H21), due to sufficient collateralisation and adequate haircuts. Aton's securities related to clients' portfolios (around 14% of total assets at end-1H21) have marginally higher risks than reverse-repo transactions'. Aton's proprietary securities position accounted for about 8% of total assets, almost an equivalent share to the company's capital at end-1H21, exposing Aton to market and credit risks. Positively, bonds rated below 'BB-' are limited to USD14 million or less than 10% of capital at end-1H21 (no exposure to bonds rated below B-) and equity portfolio risks are hedged with the use of derivative instruments. The company has been profitable even during crisis years, but profitability can be volatile with operating profit/average equity at low single digits prior to 2019, strengthening to 38% in 2020. A longer record of sound profitability and greater business scale across different business lines as the Russian market increases in depth would be a structurally positive development. Fitch deems Aton's capitalisation adequate with tangible assets less reverse repo-securities borrowed at 5.6x tangible equity at end-1H21, providing adequate loss-absorption capacity in addition to sound profitability. Aton's regulated entities had high buffers above regulatory minimums at end-2020. The short tenor of Aton's asset base and diversified cash holdings (both by currency and geography) largely mitigate liquidity risks. Cash and equivalents (20% of total assets at end-1H21) were held at highly rated clearing houses and major banks. Aton has limited funding needs but its Russian regulated entity must maintain a liquidity coverage ratio at 70% (liquid assets/expected outflows) from October 2021. Fitch expects the entity to meet the ratio with an adequate buffer and Fitch estimates that Aton's liquid assets/short-term funding ratio was 125% at end-2020. 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. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- A longer record of sound profitability supported by improved earning quality and diversification together with the maintenance of a conservative risk appetite, in particular, relating to market and credit risks. Factors that could, individually or collectively, lead to negative rating action/downgrade: -- A material weakening of profitability metrics with operating profit/average equity falling below 10%; -- Increased risk appetite or material risk events potentially causing significant losses or reputational damages; -- Tangible assets less reverse-repo securities borrowed at more than 12x tangible equity on a sustained basis without a clear path to deleveraging; -- Corporate governance or transparency issues such as increased complexity of company structure or material transactions with related parties. 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. SME BANK: Moody's Withdraws B3 LongTerm Deposit Rating ------------------------------------------------------ Moody's Investors Service has withdrawn all ratings and assessments of SME Bank. Before the withdrawal, the bank's long-term deposit and senior unsecured debt ratings carried a developing outlook. Withdrawals: Issuer: SME Bank Baseline Credit Assessment, Withdrawn, previously rated caa2 Adjusted Baseline Credit Assessment, Withdrawn, previously rated caa2 Long-term Bank Deposits (local and foreign currency), Withdrawn, previously rated B3, outlook changed to Rating Withdrawn from Developing Short-term Bank Deposits (foreign currency), Withdrawn, previously rated NP Senior Unsecured Rating (local currency), Withdrawn, previously rated B3, outlook changed to Rating Withdrawn from Developing Long-term Counterparty Risk Assessment, Withdrawn, previously rated B2(cr) Short-term Counterparty Risk Assessment, Withdrawn, previously rated NP(cr) Long-term Counterparty Risk Ratings (local and foreign currency), Withdrawn, previously rated B2 Short-term Counterparty Risk Ratings (local and foreign currency), Withdrawn, previously rated NP Outlook Action: Outlook, changed to Rating Withdrawn from Developing RATINGS RATIONALE Moody's has decided to withdraw the ratings for its own business reasons. SME Bank is headquartered in Moscow, Russia. As of June 30, 2021, the bank reported total IFRS assets of RUB119 billion and total equity of RUB20 billion. The bank's net IFRS loss for the first six months of 2021 amounted to RUB8.3 billion. TINKOFF BANK: Fitch Alters Support Rating Floor to 'B+' ------------------------------------------------------- Fitch Ratings has revised Tinkoff Bank's (Tinkoff's) Support Rating Floor (SRF) to 'B+' from 'No Floor', and upgraded Tinkoff's Support Rating to '4' from '5'. The other ratings of Tinkoff are unaffected by this rating action. KEY RATING DRIVERS The revision of Tinkoff's SRF follows the announcement of the Central Bank of Russia (CBR) on October 11 that Tinkoff is included in CBR's list of domestic systemically important banks (D-SIBs). Fitch believes that Tinkoff's designation as a D-SIB captures a significant increase of the number of Tinkoff's retail clients in recent years. In Fitch's view, Tinkoff's regulatory recognition as a D-SIB results in a limited probability of state support, in case of need, despite Tinkoff's private ownership. This view also reflects the record of bail-outs of senior unsecured creditors in large Russian privately-owned banks in 2017-2018, and the lack of plans to introduce comprehensive senior creditor bail-in provisions into Russian legislation. Accordingly, Fitch has revised up Tinkoff's SRF to 'B+' and upgraded its Support Rating to '4' from '5'. Tinkoff's 'B+' SRF is five notches below Russia's 'BBB' sovereign rating. This notching captures Tinkoff's private ownership and only moderate overall systemic importance as reflected by its low 0.9% share in sector assets at end-7M21. RATING SENSITIVITIES Factor that could, individually or collectively, lead to positive rating action/upgrade: -- The SRF may be revised upwards if Tinkoff's systemic importance increases materially. An upgrade of Russia's sovereign ratings would not result in an automatic upward revision of Tinkoff's SRF. Factor that could, individually or collectively, lead to negative rating action/downgrade: -- Tinkoff's SRF may be revised downwards on evidence that the propensity of Russian authorities to provide support to privately-owned banks has weakened, due to either (i) examples of imposing losses on senior unsecured creditors in the resolution of large privately-owned banks in Russia, or (ii) introduction of bail-in legislation in Russia. 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. [*] RUSSIA: DIA to Oversee Temporary Administration of Banks ------------------------------------------------------------ In cases where a license is revoked from a bank being a member of the deposit insurance system or from an insurance company, or a non-governmental pension fund dealing with mandatory pension insurance, the Bank of Russia will appoint the State Corporation Deposit Insurance Agency (DIA) as the provisional administration. The relevant amendments to the law became effective on October 18, 2021. Previously, the Bank of Russia performed these functions after the revocation of a bank's license (with the possibility to engage DIA specialists), whereas the DIA carried out the liquidation of a financial institution after the court issued the corresponding ruling. The DIA will exercise the provisional administration's powers via a representative assigned from among DIA employees. Furthermore, the Bank of Russia will control the DIA's work, including through inspections of the provisional administration's activity. By authorizing the DIA to perform these new functions, the Bank of Russia streamlines the procedures for liquidating a financial institution and speeds up the creation of the register of creditors' claims, the stock-taking and sale of the financial institution's assets, and the formation of bankruptcy estate to make settlements with creditors. ========= S P A I N ========= ENCE ENERGIA: Moody's Affirms Ba3 CFR & Alters Outlook to Negative ------------------------------------------------------------------ Moody's Investors Service has affirmed the Ba3 corporate family rating and its Ba3-PD probability of default rating of ENCE Energia y Celulosa, S.A. Concurrently, Moody's changed ENCE's outlook to negative from stable. "The change in outlook reflects the heightened risk from the potential annulment of the Pontevedra concession after the negative resolution of the Spanish National Court. This illustrates an increasing event risk for ENCE in case the Supreme Court rejects its appeal or rules negatively and would force ENCE to ultimately stop production at its Pontevedra pulp mill much earlier than we had factored into the rating. This increasing event risk is outweighing strengthening operating performance following the surge in pulp prices over the past three quarters", says Oliver Giani, Moody's lead analyst for ENCE. RATINGS RATIONALE The recent increase in pulp prices has supported ENCE's credit metrics improvement leading to improvement of its Moody's adjusted EBITDA Margin to 10.3% for the twelve months that ended in June 2021 from 7.3% in 2020 and Moody's adjusted debt/EBITDA at 9.7x for the twelve months that ended in June 2021 from 18.1x in 2020. While there is an indication that pulp prices are expected to slightly decline during 2022, due to the ramp up of new projects which are currently under development, the general price environment remains supportive to ENCE's operating performance that will likely lead to Moody's adjusted EBITDA margin of around 20% and Moody's adjusted debt/EBITDA of around 4.0x in 2021. Moody's expects that the importance of the energy business will continue to be essential as ENCE, over the last 3 years, has developed its regulated renewable energy business in Spain, which is generally more stable than the pulp business. After the commission of its 46 MW biomass power plants in Huelva and 50 MW biomass power plant in Ciudad Real, installed capacity has reached 266 MW, taking also into account the disposal of the 50 MW solar thermal power plant in Puertollano in H2 2020, and the company has already become the largest renewable energy generator with agroforestry biomass in Spain and has increased renewable energy generation capability by more than 50%. Furthermore, EBITDA contribution from the energy business has grown to EUR60 million in 2020 from less than EUR20 million in 2013, now already covering a good portion of the fixed costs of the pulp business and is expected to increase to more than EUR60 million by 2022. Despite the significant investments, the company is likely to remain below its net leverage target of 4.5x net debt / EBITDA in its renewable energy business (2.3x in 2020). In addition, ENCE has confirmed the postponement of the previously announced strategic plan investments until there is more visibility with regards to the future operations at its Pontevedra mill and the company has publicly stated its intention to focus on the cost optimization program launched in order to achieve its annual cash cost targets. ENCE's Ba3 CFR is primarily constrained by (1) the company's fairly small scale, indicated by group sales of EUR718 million for the twelve months that ended in June 2021; (2) the company's portfolio, which is still predominantly focused on the production of pulp, which can exhibit significant price volatility and lead to volatility in ENCE's credit metrics; (3) some operational concentration risk, with the entire pulp production coming from just two mills in northern Spain and amid the looming dispute regarding the extension of concessions of Pontevedra; (4) some execution risk related to its planned expansion in both businesses (pulp and bio energy) which has been currently postponed; and (5) risk of debt-funded growth. Conversely, the Ba3 CFR is primarily supported by the company's (1) leading position in pulp production from eucalyptus in Europe, with a focus on the stable and structurally growing tissue market; (2) already-leading and strengthening market position in regulated renewable energy in Spain, with more stable and predictable EBITDA (although subject to regulatory risk); (3) successful ongoing cash cost reduction; and (4) currently good liquidity, supported by a long -- dated debt maturity profile in both businesses and without maintenance covenants in the pulp business. ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS Moody's takes into account the impact of environmental, social and governance (ESG) factors when assessing companies' credit quality. Although the pulp and paper industry is a fairly large consumer of energy and water in production processes with occasional environmental incidents, Moody's assess that it has moderate exposure to environmental risk. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's could upgrade ENCE should the company be able to (1) maintain Moody's-adjusted EBITDA margins of above 20% through the cycle; (2) reduce consolidated adjusted debt/EBITDA to around 3.0x through the cycle; (3) RCF/debt around 20% through the cycle; and (4) consistently generate meaningful free cash flow through the cycle. Moody's could downgrade ENCE, if: (1) free cash flow generation remains negative for a prolonged period of time; (2) it fails to reduce Moody's-adjusted debt/EBITDA towards 4.0x ; (3) it fails to improve Moody's adjusted RCF/debt towards the mid teen percentages; or (4) liquidity sustainably deteriorates. If ENCE finally loses the concession of Pontevedra so that its pulp operations are limited to only one pulp mill, a downgrade by more than one notch may be considered depending on the future business profile and capital structure. LIQUIDITY ENCE's liquidity is good. In the pulp business, the company reported around EUR300 million in cash and cash equivalents as of the end of June 2021, which were further underpinned by an undrawn EUR70 million revolving credit facility due in 2023, without maintenance covenants. These sources, together with around EUR140 million of operating cash flow at the group level, should comfortably cover ENCE's working capital needs, capital spending and any dividends distributed. There are no major debt maturities in the pulp business until 2023, when the EUR160 million convertible bond comes due. However, the company also uses various supply-chain financing instruments, such as roughly EUR120 million in reverse factoring (confirming) and around EUR70 million in off-balance-sheet factoring (as of the end of June 2021), which could strain its liquidity if terminated. ENCE's energy business reported EUR74 million in cash and cash equivalents as of the end of June 2021, which were further supplemented by an undrawn EUR20 million revolving credit facility due in 2026. The repayment profile of the project finance debt in the business corresponds with the cash flow profiles of the financed projects. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Paper and Forest Products Industry published in October 2018. COMPANY PROFILE Headquartered in Madrid, ENCE Energia y Celulosa, S.A. (ENCE) is a leading European producer of bleached hardwood kraft pulp made from eucalyptus with growing renewable energy operations in Spain. In its pulp business, following the closure of its Huelva pulp mill in 2014, ENCE currently has an annual production capacity of about 1.2 million tonnes of eucalyptus pulp from its two remaining Spanish mills, Navia and Pontevedra, as well as biomass cogeneration (lignin) operations that allow the business to be broadly self-sufficient in terms of energy requirements. In its energy business, the group currently operates eight independent energy generation facilities, mostly in Southern Spain, with a total installed capacity of 266 megawatts (MW). ENCE reported sales of EUR718 million for the twelve months that ended in June 2021. The company is publicly listed on the Madrid Stock Exchange, with a free float of around 55% and a market capitalisation of around EUR591 million as of October 8, 2021. ============= U K R A I N E ============= METINVEST: S&P Raises LongTerm ICR to 'B+', Outlook Stable ---------------------------------------------------------- S&P Global Ratings raised its long-term issuer credit rating on Metinvest to 'B+' from 'B', as well as its issue rating on its senior unsecured notes to 'B+' from 'B'. The stable outlook reflects limited upside for the rating in the coming 12-18 months, despite the exceptionally good performance during that period. Metinvest will report exceptionally high EBITDA in 2021, boosted by iron ore and steel prices, but this should normalize by 2023. After reporting a record EBITDA of $3.2 billion (excluding joint ventures [JVs]) in the first half of 2021, S&P expects the company to reach EBITDA of $6.3 billion (excluding JVs) in 2021. The abnormal results reflect the recovering demand for steel and very strong iron ore prices. At this stage, S&P expects the healthy demand will continue also in 2022, but with more supply coming to the market and lower raw material prices, and that EBITDA will reduce to about $3.0 billion-$3.5 billion. S&P said, "In our view, the company will benefit in the coming years from recent mergers and acquisitions (M&A). In the first half of 2021 it purchased the remaining 75% stake in Pokrovske Coal, which will bring greater self-sufficiency in coking coal. In August 2021 it acquired the assets of defaulted Ukrainian steel company Dniprovskyi Iron and Steel Works (DMK), adding a crude steel production capacity of about 3.2 million metric tons (mt). We believe that the company's over-the-cycle EBITDA will approach $2.0 billion, with an upside as the company delivers its capital expenditure (capex) expansion program. "The ample cash flows should allow Metinvest to accelerate its expansion program, improve its liquidity position, and spread its good fortune around to shareholders. We expect Metinvest to generate cash flow from operations of about $5.8 billion in 2021 and another $2.2 billion-$2.6 billion in 2022, and a reported net debt of about $1.0 billion at the end of 2022. Since the beginning of the year, the company has already allocated some of the windfall cash to accelerate $1.2 billion of debt repayment and is expected to increase its capex for the year to $950 million, from about $650 million in 2020. In addition, the company paid a dividend of $423 million in the first half of 2021 in contrast to a dividend of $100 million in 2020. In our view, the company will write more sizable checks in the coming quarters as it increases its capex budget to about $1.3 billion in 2022 and distributes more dividends. We understand that the company won't be able to further reduce its gross debt without paying hefty premiums. "Metinvest's capex program comprises several initiatives, from efficiency improvements to increased production capacity and higher value-added products. If assuming a minimum return of 15% on the new investments, we can expect EBITDA contribution of about $85 million-$100 million for the additional capex starting 2022. "Although the company has no public financial policy or gearing objectives, its past performance and the restrictions under the existing financial documents provide a supportive anchor for our financial risk assessment. In this respect, we will continue to monitor the company's absolute reported net debt level (about $2.5 billion-$2.7 billion in 2017-2020), returns to shareholders, and proactive liquidity management." The stable outlook reflects limited upside for the rating in the coming 12-18, months despite the unusually good performance during that period. S&P said, "Under our base case, we project adjusted EBITDA of about $6.7 billion (equivalent to reported EBITDA excluding JVs of $6.3 billion) in 2021, implying adjusted funds from operations (FFO) to debt of well above 60%. We see adjusted FFO to debt of 40%-60% through the cycle as commensurate with the current 'B+' rating. "Our rating also factors no deterioration in the creditworthiness of Metinvest's main shareholder, SCM Ltd. "We could lower the rating on Metinvest if its adjusted FFO to debt deteriorated below 40% without prospects of improvement the following year. "This could occur if the company geared its debt back up to historic levels (about $3 billion) and at the same time experienced a downturn in the market, resulting in adjusted FFO to debt below 40% for more than one year. Alternatively, we could see pressure on the rating if the company embarked on a sizable acquisition without any benefits to its geographic footprint or competitive position. "In addition, we would likely lower the rating if the company's operations were subject to operational issues in Ukraine; or if we lowered our long-term foreign currency sovereign rating on Ukraine (B/Stable/B). "We see limited upside for our rating on Metinvest in the next 12 months. This is because we cap the rating at one notch above the level of our assessment of the main shareholder's existing creditworthiness. We could revise our view on SCM Ltd.' creditworthiness if we assess its portfolio to be stronger, either by an improvement in DTEK B.V. or it further diversified without changing its financial profile significantly. "In our view, a reduction in SCM Ltd.'s stake (for example, Metinvest becoming a public company) could lead to further delinkage between the creditworthiness of the two entities." Metinvest is a Ukraine-based, vertically integrated steel producer. The company operates two segments: -- Mining (45%-100% of EBITDA over the past three years). Metinvest operates three iron ore pits in Ukraine. Iron ore concentrate production was about 30 mt in 2020, of which Metinvest sold about 63% to third parties. It also owns a coking coal producer in the U.S., United Coal, that has annual production capacity of three million mt. -- Metallurgical. Metinvest is a midsize steel producer and operates three integrated steel mills in Ukraine that have a combined crude steel capacity of about 11.0 mt. About 25% of the production is consumed domestically. In addition to one re-rolling facility in the Ukraine, the company also has the following re-rolling facilities: two in Italy, one in the U.K., and one in Bulgaria, with a total capacity of about 2 mt, and four domestic coke facilities. Metinvest's vertical integration gives it the flexibility to alter its product mix and redirect volumes to internal use or export, depending on market prices. This vertical integration sees the company sourcing from its own production the iron ore to meet all its needs and coking coal to meet about 75% of its needs, following the acquisition of ex-DMK assets. Metinvest also has two JVs, both in Ukraine, contributing an annual combined EBITDA of about $400 million as of December 2020. =========================== U N I T E D K I N G D O M =========================== AMIGO LOANS: Moody's Extends Review on Caa1 CFR for Downgrade ------------------------------------------------------------- Moody's Investors Service extended the review for downgrade on Amigo Loans Group Ltd's Caa1 corporate family rating and the B3 backed senior secured note rating issued by Amigo Luxembourg S.A. RATINGS RATIONALE Moody's initiated the review for downgrade on Amigo's ratings on February 5, 2021 to reflect the rating agency's view that Amigo is facing heightened solvency risks following a surge in customer complaints. Furthermore, the review captures the uncertainties regarding the balance sheet composition, and the magnitude of the company's economic value loss in the coming months. Moody's review for downgrade, which was initially extended on May 28, 2021, continues to reflect enhanced uncertainties around the future ownership structure, strategy and business model evolution of the company. The extension of the review follows Amigo's continuing work to progress a new Scheme of Arrangement, with ongoing engagement with both the Independent Customers' Committee (ICC) and the Financial Conduct Authority (FCA). On September 28, 2021, Amigo submitted a revised Scheme proposal, incorporating feedback from the ICC, along with its future business plan to the FCA and the ICC. The rating agency expects to conclude the ratings review upon Amigo's announcement of its next steps. The review primarily focuses on the strategic steps Amigo will decide to take and their related financial implications including the forecast balance sheet evolution and any relevant updates from the FCA's ongoing investigation of the company's affordability assessment processes. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Amigo's CFR could be confirmed at current levels if Moody's concludes that the company will be able to maintain its standalone financial profile, without any adverse development in its solvency and liquidity profile and franchise positioning. Amigo Luxembourg S.A.'s backed senior secured debt ratings could be confirmed at the current level if Moody's believes that there continues to be sufficient unencumbered assets to continue to meet the claims of the senior note holders. Amigo's CFR could be downgraded because of Amigo filing for insolvency or further weakening in its solvency or liquidity profile, and/or franchise positioning, governance and risk management. The senior secured notes may be downgraded if there is a material increase in the liabilities that will rank super senior to or pari passu with the senior secured notes that would increase their expected loss. Redemption of the senior notes at a material discount, were this to occur, could be viewed as a distressed exchange and result in a multi notch downgrade. PRINCIPAL METHODOLOGY The methodology used in these ratings was Finance Companies Methodology published in November 2019. CONSUMER WEALTH: FCA Fines Ex-Director, Senior Financial Adviser ---------------------------------------------------------------- Jack Gray at Pensions Age reports that the Financial Conduct Authority (FCA) has fined former Consumer Wealth director and senior financial adviser, Omar Hussein, GBP116,000 and banned him from working in financial services for providing reckless and unsuitable pension switching advice. According to Pensions Age, the FCA found that he advised customers when it was "often unnecessary and not in their best interest", and put an estimated GBP13.5 million of Consumer Wealth customers' retirement savings at risk. Consumer Wealth has ceased trading and is in liquidation, Pensions Age relates. The Financial Services Compensation Scheme is investigating claims by affected customers and has paid compensation to 437 of them so far, Pensions Age discloses. Several of Portfolio 6's underlying mini-bond investments failed and it was closed to new investment in 2016, with Greyfriars going into administration in 2018, Pensions Age states. According to the FCA, Hussein disregarded clear statements and risk warnings in Greyfriars' promotional material about Portfolio 6 and claimed that the customers investing in it were experienced, while also charging fees to customers for an ongoing advice service that was not provided by the firm, Pensions Age notes. Mr. Hussein's failings were "particularly serious" because of the FCA's findings that he acted recklessly and abused a position of trust when advising financially inexperienced clients, and because he was aware of the regulator's pension alerts, Pensions Age relates. Mr. Hussein was to be fined GBP165,797, but agreed to settle at an early stage of the investigation and therefore qualified for a 30% discount, according to Pensions Age. GOTO ENERGY: Ceases Trading Amid Soaring Wholesale Gas Prices ------------------------------------------------------------- BBC News reports that Goto Energy has become the latest UK energy firm to cease trading amid a sharp rise in wholesale gas prices. According to BBC, the firm supplied gas and electricity to around 22,000 domestic customers who will now be moved to a new supplier. It joins a number of small firms that have gone bust following a global spike in gas prices, BBC notes. Energy regulator Ofgem will now find a new supplier for households, who are asked to do nothing until the transfer takes place in the coming weeks, BBC discloses. Goto Energy's collapse takes the number of customers affected by the current wave of UK energy company failures to more than two million, BBC states. Ofgem, as cited by BBC, said that the unprecedented increase in global gas prices - which have risen 250% since the start of the year - was putting financial pressure on suppliers. Justina Miltienyte, energy policy expert at Uswitch.com, said it was important that Goto Energy customers did not do anything until they were moved to a new supplier, as trying to switch providers could create administrative delays in getting their credit balance returned, BBC relates. INTU METROCENTRE: Fitch Affirms and Withdraws CC Rating ------------------------------------------------------- Fitch Ratings has affirmed Intu Metrocentre Finance plc's (IMCF) notes at 'CCsf'. Concurrently, the rating is withdrawn for commercial reasons following the issuer's request, publicly communicated to the market via a Regulatory Information Service notice on 5 October 2021. DEBT RATING PRIOR ---- ------ ----- Intu Metrocentre Finance plc Fixed Rated Notes XS0994934965 LT CCsf Affirmed CCsf Fixed Rated Notes XS0994934965 LT WDsf Withdrawn CCsf TRANSACTION SUMMARY IMCF is a securitisation of an interest-only fixed-rate commercial mortgage loan secured by the Metrocentre, a super-regional shopping centre located 30 minutes from central Newcastle, as well as an adjacent retail park. The CMBS comprises a single class of fixed-rate notes with expected maturity in 2023. Following a restructuring in 4Q20, the CMBS and underlying loan include a payment-in-kind (PIK) component, whereby interest accrued is capitalised. The current notes' balance is GBP498.6 million, up from GBP485 million at closing. A consent solicitation process has been launched and, if approved, also the December 2021 interest payment will be capitalised. The GBP20 million liquidity facility, provided by HSBC Bank plc, and available to the issuer to cover senior costs and notes' coupon, has been fully drawn. A recent June 2021 valuation indicated that the collateral value had fallen by a further 6.1% in the preceding six months, increasing the reported loan-to-value (LTV) to 121%, from 111%, a result of a further increase in rental yields. In contrast, estimated rental value had increased by 9%, possibly suggesting that the declining trend may have bottomed out. The limited fall in value contrasts markedly to the sharp value decline in the previous three years, when the collateral lost more than 50% of its value between 2017 and 2020. Reported collection rates have improved markedly since non-essential retail businesses were allowed to reopen in May 2021. Net operating income has improved, reducing the expected reliance on liquidity, at least as long as new restrictions are not imposed. The rating is withdrawn for commercial reasons. Fitch will no longer provide ratings or analytical coverage of IMCF. KEY RATING DRIVERS For details on key rating drivers reflecting the affirmation see "Fitch Downgrades Intu Metrocentre Finance Plc to 'CCsf'" dated 20 September 2021. No material developments relevant to the rating have occurred since. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: Not relevant as the rating has been withdrawn. Factors that could, individually or collectively, lead to positive rating action/upgrade: Not relevant as the rating has been withdrawn. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Structured Finance transactions have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of seven notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of seven notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAAsf' to 'Dsf'. Best- and worst-case scenario credit ratings are based on historical performance. USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10 Form ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. Prior to the transaction's closing, Fitch did not review the results of a third-party assessment conducted on the asset portfolio information. 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 IMCF has an ESG Relevance Score of '4' for Exposure to Social Impacts due to a sustained structural shift in secular preferences affecting consumer trends, which has a negative impact on the credit profile, and is 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. RANGERS FOOTBALL: Prosecution Service Paid Out GBP35 Million ------------------------------------------------------------ Tom Gordon at Herald Scotland reports that prosecution service has already paid out GBP35 million of taxpayers' money over its botched prosecutions related to Rangers Football Club (FC), and has set aside millions more. According to Herald Scotland, the figures, which show the situation as of last month, are revealed in the annual accounts from the Crown Office and Procurator Fiscal Service (Copfs). The 2020/21 accounts, which were laid at parliament but have yet to be published by the COPFS itself, show GBP40.5 million has so far been identified for Rangers related cases, Herald Scotland discloses. The bill ultimately falls on the public purse, with ministers allowing the COPFS to over-spend its budget in order to fund the so-called "losses and special payments", Herald Scotland states. The Crown Office has faced a series of compensation claims related to wrongful arrests and prosecutions over the Ibrox club, which went into administration in 2012, Herald Scotland relates. Last year David Whitehouse and Paul Clark, who were appointed as its administrators, agreed an out of court settlement after launching a GBP20.8 million compensation claim, Herald Scotland recounts. The pair, who worked for insolvency firm Duff and Phelps, were arrested in 2014. Lawyers acting for the Crown later admitted much of the prosecution against them was "malicious" and lacked "probable cause", Herald Scotland relays. In February, then Lord Advocate James Wolffe QC, gave a statement to parliament on the Rangers prosecutions, revealing Mr. Whitehouse and Mr. Clark had each been paid GBP10.5 million in damages, plus GBP3 million in legal expenses, making GBP24 million in total, Herald Scotland discloses. In August, it was announced that former Rangers chief executive Charles Green had also won GBP6.3 million plus costs after bringing a GBP20 million claim against the Lord Advocate, Herald Scotland recounts. He was one of several people arrested during a fraud probe relating to the sale of the club. The case was abandoned and the Crown admitted his prosecution was also "malicious", Herald Scotland notes. However the Crown Office accounts suggest at least GBP10 million more is expected to be paid out on top of the GBP30.3 million going to Whitehouse, Clark and Green, Herald Scotland discloses. According to Herald Scotland, the accounts show that in 2020/21, the Crown Office spent GBP170 million compared to GBP134.1 million the year before, with the difference largely being due to Rangers cases. The say substantial "unforeseen costs" arose late in the financial year, forcing COPFS to get "additional written budgetary authorization" from SNP ministers to overspend by GBP14.6 million, Herald Scotland states. The reason was Mr. Whitehouse and Mr. Clark winning an appeal judgment at the Court of Session, which decided the Lord Advocate, as head of the prosecution service, did not have absolute immunity from being sued for malicious prosecution, according to Herald Scotland. The decision upended an area of the law that was largely taken for granted for 60 years, Herald Scotland notes. ********* 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 * * *