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

                          E U R O P E

          Tuesday, January 25, 2022, Vol. 23, No. 12

                           Headlines



A Z E R B A I J A N

AZERBAIJAN: S&P Affirms 'BB+/B' Sovereign Credit Ratings


B U L G A R I A

[*] BULGARIA: BDB to Provide Financing to Hospitality Sector SMEs


C R O A T I A

ULJANIK: 3.Maj Gets OK to Complete Construction of Cargo Vessel


F R A N C E

INOVIE GROUP: Fitch Affirms 'B+' Rating on Term Loan B
TSG SOLUTIONS: Moody's Assigns First Time 'B2' Corp. Family Rating


G E R M A N Y

SUMMIT PROPERTIES: Moody's Affirms Ba1 CFR, Outlook Remains Stable


N O R W A Y

ADEVINTA ASA: Moody's Alters Outlook on 'Ba3' CFR to Stable


P O R T U G A L

BANCO COMERCIAL PORTUGUES: S&P Affirms 'BB' ICR, Outlook Stable


R U S S I A

KS BANK: Declared Bankrupt by Mordovia Arbitration Court


S E R B I A

JUGOBANKA: Office Building to be Auctioned on Feb. 17
[*] Metito Buys Bankrupt Water Treatment Plan for RSD417MM


S P A I N

IM ANDBANK 1: Moody's Assigns Ba2 Rating to EUR5.2MM Class C Notes


U N I T E D   K I N G D O M

AMIGO PLC: Reveals More Details of New Business Scheme
EUROSAIL PLC 2006-1: Fitch Affirms BB- Rating on Class E Notes
MILLER HOMES: Fitch Puts 'BB-' LT IDR on Watch Negative
TALKTALK TELECOM: Fitch Lowers LT IDR to 'B+', Outlook Negative

                           - - - - -


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A Z E R B A I J A N
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AZERBAIJAN: S&P Affirms 'BB+/B' Sovereign Credit Ratings
--------------------------------------------------------
S&P Global Ratings affirmed its long- and short-term foreign and
local currency sovereign credit ratings on Azerbaijan at 'BB+/B'.
The outlook is stable.

Outlook

The stable outlook indicates that S&P expects the ceasefire
agreement between Azerbaijan, Armenia, and Russia will continue to
broadly hold, while favorable hydrocarbon prices and rising gas
exports will support Azerbaijan's fiscal and balance of payments
positions over the next 12 months.

Downside scenario

S&P said, "We could lower the ratings if Azerbaijan's fiscal
balances weakened more than we project over the medium term. This
could happen, for example, because of higher-than-expected
government capital expenditure (capex) or a substantial decline in
hydrocarbon revenue; for instance, because ageing oil fields result
in oil production declining faster than expected. Reduced
hydrocarbon revenue could additionally weigh on Azerbaijan's
broader economic prospects, with real per capita GDP growth falling
further below that of peers at a similar level of economic
development. Pressure on the ratings could also build if military
confrontation with Armenia escalated sharply again, but this is not
our baseline scenario."

Upside scenario

Conversely, S&P could consider an upgrade if external surpluses
were significantly higher than we expect, resulting in sustained
external asset accumulation. Ratings upside could also build if the
government implements reforms addressing some of Azerbaijan's
structural impediments, including constraints to monetary policy
effectiveness stemming from elevated resident deposit dollarization
and a still-weak domestic banking system.

Rationale

S&P said, "Of the sovereigns we rate in the 'BB' category, we
consider Azerbaijan's fiscal and external stock positions to be
among the strongest. The government has accumulated substantial
liquid assets, mainly within the sovereign wealth fund SOFAZ. We
forecast that the government will have access to liquid assets of
close to 70% of GDP through 2025, and that general government debt
will remain below 30% of GDP. Currently favorable oil prices also
support Azerbaijan's fiscal and balance of payments profiles.

"Our ratings on Azerbaijan remain constrained by weak institutional
effectiveness, the country's narrow and concentrated economic base,
and limited monetary policy flexibility."

Institutional and economic profile: Stronger short-term growth
performance but the economy is facing a long-term structural
decline in oil production

-- S&P forecasts Azerbaijan's economy to grow by 2.7% in 2022
following a strong 5.6% recovery in 2021.

-- However, medium-term growth prospects are weaker as oil
production is declining due to ageing oil fields, while rising gas
exports will likely only partially offset this trend. S&P forecasts
average annual growth at a modest 1.3% over 2023-2025.

-- Azerbaijan's institutional environment remains relatively weak
and political power is centralized around the presidential
administration.

Azerbaijan's economy depends significantly on the hydrocarbon
sector, which is currently benefiting from favorable global oil
prices. Oil and gas constitute almost 90% of exports and amount to
50% of Azerbaijan's GDP. The Brent oil price averaged $71 per
barrel (/bbl) in 2021 (up from $43/bbl in 2020) and we project that
it will average $75/bbl in 2022, $65 in 2023, and $55 in 2024-2025.
In parallel, the OPEC+ group of countries (of which Azerbaijan is a
member) agreed in July 2021 to add 400,000 barrels per day (bpd) of
additional oil production to the market every month, of which
Azerbaijan can produce around 7,000 bpd.

In S&P's view, the present environment will benefit Azerbaijan's
economic, fiscal, and balance-of-payments performance. The
longer-term outlook, however, appears less favorable. Azerbaijan is
one of the oldest oil producers in the world, and where industrial
oil production started in the 19th century. Existing oilfields are
ageing and exhibit a continued decline in production. Between 2010
and 2021, for instance, oil production dropped by close to 30% from
over 1 million bpd (mbpd) to an estimated 0.74 mbpd.

Azerbaijan has been producing at about 10% below its OPEC+ quotas
for the past few months, highlighting the production constraints at
its oil fields as well as maintenance taking place at the main ACG
oilfield. Nevertheless, as OPEC+ oil production cuts continue to
moderate, we project oil production in Azerbaijan to moderately
rebound to 0.77 mbpd in 2022, although over the medium term S&P
forecasts oil production declining toward 0.75 mpbd by 2025.
Sustaining or increasing it will require additional investments at
the existing oil fields, and it is unclear whether those will take
place.

In contrast to oil, the outlook is stronger for Azerbaijan's gas
sector. Production at the new Shah Deniz II gas field commenced in
2018 and the two related pipelines, TANAP and TAP, carrying the gas
to Turkey and Europe respectively, became operational in 2019-2020.
Consequently, between 2017 and 2021, Azerbaijan's gas production
rose by an estimated 73% and is set to rise by a further 20%
through 2025, according to official plans.

Nevertheless, even considering this recent production ramp-up, gas
exports will play a relatively modest role in Azerbaijan's economy,
accounting for about 20% of hydrocarbon exports compared with oil's
contribution of close to 80% over the medium term. Additionally,
although spot European gas prices have hit record highs, Azerbaijan
will benefit from this only partially because most of its contracts
are long term, with prices linked to oil.

S&P said, "Beyond the oil sector, we consider that the omicron
COVID-19 wave could pose risks for Azerbaijan. Azerbaijan is a
frontrunner within the post-Soviet Union space in terms of
vaccination efforts, but the rate is still comparatively low in a
global context, with only 50% of the population having received at
least one dose of the vaccine. That said, we do not expect a return
to restrictive lockdowns and containment measures, and we
anticipate that the non-oil economy will continue recovering in
2022.

"Overall, we project economic growth at 2.7% for 2022 following a
5.6% rebound in 2021, which mostly reflects an increase in gas
production, discontinuation of OPEC+ cuts, and a recovery of the
non-oil sector which grew by 7.2% in 2021. Beyond that, we expect
growth will average just over 1% over 2023-2025 as new gas capacity
compensates only partially for the gradual oil sector decline.

"In our opinion, Azerbaijan's institutions remain relatively weak.
They are characterized by highly centralized decision making and
lack transparency, which can make policy responses difficult to
predict. Political power remains concentrated with the president
and his administration, and there are limited checks and balances.
In our view, structural reform and economic diversification efforts
in recent years have yielded only limited results."

Following a six-week-long war in Nagorno-Karabakh that broke out in
late September 2020, Azerbaijan and Armenia agreed to a ceasefire,
brokered by Russia, that took effect on Nov. 10, 2020. S&P's
baseline expectation is that the ceasefire will hold, supported by
Russia's peacekeeping operations. That said, several ceasefire
violations and skirmishes took place at the border over the past
few months.

Flexibility and performance profile: Sizable assets accumulated
within the sovereign wealth fund are a key support to the sovereign
ratings

-- S&P project Azerbaijan will post 3% of GDP general government
and 10.8% of GDP current account surpluses in 2022, after estimated
twin surpluses in 2021.

-- S&P expects Azerbaijan will retain an average general
government net asset position of close to 48% of GDP through 2025.

-- Monetary policy effectiveness remains limited, constrained by
the central bank's limited operational independence, elevated
dollarization, and underdeveloped local currency capital markets.

S&P said, "Based on our 2022 Brent oil price forecast of $75/bbl
and projected 4% increase in oil production to an average of 0.77
mbpd as OPEC+ cuts moderate, we expect the current account will
post a surplus of 10.8% of GDP in 2022, following an estimated 10%
of GDP surplus in 2021. The launch of the SDII gas project back in
2018 and its further expansion over the next three-to-four years
should support Azerbaijan's external performance. However, this is
offset over the medium term in our projections by declining oil
production, while imports rebound as domestic consumption recovers
and the authorities deliver on planned reconstruction activities in
Nagorno-Karabakh. Combined with our assumption that oil prices will
decline to $55 in 2024, remaining at the same level in the
subsequent years, Azerbaijan's current account surpluses will turn
into deficits toward the end of the four-year forecast horizon.

"Nevertheless, Azerbaijan's strong external stock position will
remain a core rating strength, reinforced by the large amount of
foreign assets accumulated in SOFAZ. We estimate that external
liquid assets will surpass external debt through 2025. Although
Azerbaijan remains vulnerable to potential terms-of-trade
volatility, we consider that its large net external asset position
will serve as a buffer that could mitigate the potential adverse
effects of economic cycles on domestic economic development.

"Azerbaijan's fiscal asset position remains strong, mirroring its
external position and supporting the sovereign rating. Despite the
budgeted 2021 deficit, we estimate that Azerbaijan posted a
full-year general government surplus of 4% of GDP. In 2021, the
general government balance improved as terms of trade proved more
favorable than in 2020, while expenditure was under-executed--a
frequent occurrence in Azerbaijan. We forecast a 3% of GDP surplus
for 2022 followed by modest deficits from 2024, with fiscal
performance supported by returns on the existing SOFAZ asset
portfolio.

"Consequently, the net general government asset position will
remain about 50% of GDP through 2025. In calculating net general
government debt, we take into account our estimate of SOFAZ's
external liquid assets. We exclude about 20% of 2021 GDP equivalent
of exposures that we consider harder to liquidate quickly if
needed, such as the fund's domestic investments and certain equity
exposures abroad. Azerbaijan is far more transparent than many of
its peers (such as those in the Gulf Cooperation Council) with
regards to the composition of the assets and size of the sovereign
wealth fund. For example, SOFAZ publishes detailed audited annual
reports with granular information on the categories of investments
held by the fund.

"The government owns a majority of the International Bank of
Azerbaijan (IBA) and in 2017 restructured the bank and directly
assumed some of its debt. The government has also transferred the
bank's nonperforming loans, at a book value of about Azerbaijani
manat (AZN) 10 billion, to AqrarKredit, a state-owned nonbanking
credit organization funded by the Central Bank of Azerbaijan (CBA),
with a sovereign guarantee. We include AqrarKredit's sovereign
guaranteed loans of AZN9.5 billion in general government debt. IBA
still has an open currency position of about $0.3 billion, but this
has substantially reduced from $1.9 billion in 2017. In our view,
most of the risks to the sovereign from the weak banking system
have already materialized; therefore, we see additional contingent
liabilities from this source as limited.

"We assume Azerbaijan will retain the manat's de facto peg to the
U.S. dollar at AZN1.7 to $1, supported by the authorities' regular
interventions in the foreign currency market. Nevertheless, in our
view, should hydrocarbon prices drop sharply and remain low for a
prolonged period, the authorities could consider allowing the
exchange rate to adjust. This would help avoid a substantial loss
of foreign currency buffers similar to that experienced by the
central bank in 2015.

"We understand that there are discussions between the central banks
of Azerbaijan and Turkey with a plan for the CBA to provide a swap
line to the Central Bank of Turkey (CBRT) to help bolster the
CBRT's foreign exchange reserves. Although there are no specific
details available so far, we view the possible transaction as
largely politically motivated and do not expect it to prove a
material drain on CBA's international reserves.

"Azerbaijan's inflation exceeded our previous forecasts, reaching
an annual average of 6.7% in 2021; this was the highest level since
2016-2017, when prices rose significantly following the 2015 manat
devaluation. The current upward price pressures, similar to those
of other countries, are driven by the effects of post-pandemic
reopening, food price inflation, and some administrative price
increases, including for domestic energy. We forecast inflation
will average 6.5% in 2022 before gradually subsiding to 3% through
2025."

In accordance with S&P's relevant policies and procedures, the
Rating Committee was composed of analysts that are qualified to
vote in the committee, with sufficient experience to convey the
appropriate level of knowledge and understanding of the methodology
applicable. At the onset of the committee, the chair confirmed that
the information provided to the Rating Committee by the primary
analyst had been distributed in a timely manner and was sufficient
for Committee members to make an informed decision.

After the primary analyst gave opening remarks and explained the
recommendation, the Committee discussed key rating factors and
critical issues in accordance with the relevant criteria.
Qualitative and quantitative risk factors were considered and
discussed, looking at track-record and forecasts.

The committee's assessment of the key rating factors is reflected
in the Ratings Score Snapshot above.

The chair ensured every voting member was given the opportunity to
articulate his/her opinion. The chair or designee reviewed the
draft report to ensure consistency with the Committee decision. The
views and the decision of the rating committee are summarized in
the above rationale and outlook. The weighting of all rating
factors is described in the methodology used in this rating
action.

  Ratings List

  RATINGS AFFIRMED

  AZERBAIJAN

   Sovereign Credit Rating        BB+/Stable/B

   Transfer & Convertibility Assessment

    Local Currency                BB+




===============
B U L G A R I A
===============

[*] BULGARIA: BDB to Provide Financing to Hospitality Sector SMEs
-----------------------------------------------------------------
Aleksia Petrova at SeeNews reports that state-owned Bulgarian
Development Bank (BDB) said on Jan. 4 that it will provide direct
financing of BGN60 million (US$34.6 million/EUR30.7 million) to
small and medium-sized enterprises (SMEs) operating in the
hospitality sector in order to help them tackle liquidity issues
stemming from the coronavirus crisis.

According to SeeNews, the BDB said in a statement the new support
programme aims to support hotel operators and restaurant owners,
including start-ups, to meet their operating needs and deal with
overdue debts and current payments to financial institutions.

The state-owned lender noted many of the businesses operating in
the sector are experiencing serious financial difficulties and risk
of bankruptcy during the crisis and do not have access to relaxed
lending conditions due to high sectoral risk, SeeNews relates.

The advantage of the BDB programme is that it provides access to
financing for companies that are overdue for up to 90 days
according to the Central Credit Register (up to 5% of the total
portfolio) and up to 60 days (up to 45% of the total portfolio),
through refinancing of their liabilities, SeeNews states.  The
bank, as cited by SeeNews, said refinanced loans can be deferred
within a period of up to two years, relieving the burden of their
repayment installments.

Under the programme, BDB will provide credit lines, credit
overdraft, and standard working capital loans to hotels and
restaurants that ceased operations in 2020 and 2021, SeeNews
discloses.  The maximum amount of funding is set according to the
size of the company and the type of product, SeeNews says.
Companies with a staff of up to 49 people will receive financing of
BGN500,000, while companies with a headcount of between 50 and 249
people will get BGN750,000, according to SeeNews.  The maximum
amount of credit overdraft is BGN250,000, SeeNews states.

The new financing programme also offers an extended term of 48
months for standard working capital loans, SeeNews discloses.  The
statement said the grace period is 18 months for hotel operators
and 12 months for restaurant owners, SeeNews notes.




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

ULJANIK: 3.Maj Gets OK to Complete Construction of Cargo Vessel
---------------------------------------------------------------
Annie Tsoneva at SeeNews reports that Croatian shipyard 3.Maj said
on Jan. 11 it received the green light to complete the construction
of a bulk cargo vessel for Canadian marine shipping company Algoma
Central Corporation.

On Jan. 11, the supervisory board of 3.Maj gave its consent to the
shipyard's director to sign a contract with the Canadian company
for completion of the construction of Vessel 527, the shipyard said
in a filing to the Zagreb bourse, SeeNews relates.

According to SeeNews, in September, the 3.Maj shipyard said it was
buying Vessel 527 for a token price of one kuna.  The vessel under
construction was part of the assets of bankrupt Croatian shipyard
Uljanik, SeeNews relays, citing earlier media reports.

                       About Uljanik Group

Uljanik Group is a shipbuilding company and shipyard in Pula,
Croatia.  It comprises of Uljanik Shipyard and 3.Maj.  It employed
about 1,000 people at May 2019.

On May 13, 2019, the commercial court in Pazin launched bankruptcy
proceedings against the Uljanik Group.  Marija Ruzic is named as
bankruptcy trustee.

The Company's accounts have been frozen for more than 200 days by
the time it filed for bankruptcy. Uljanik encountered financial
troubles in the past years due to a global crisis in the
shipbuilding sector.  The Croatian government also declined to
support a restructuring of the Company in early 2019.




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F R A N C E
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INOVIE GROUP: Fitch Affirms 'B+' Rating on Term Loan B
------------------------------------------------------
Fitch Ratings has affirmed Inovie Group's (Inovie) enlarged senior
secured term loan B's (TLB) rating at 'B+' with a Recovery Rating
of 'RR3', in line with Fitch's expectations when the EUR775 million
fungible TLB add-on was launched in November 2021. Fitch also
affirmed Inovie's Long-Term Issuer Default Rating (IDR) at 'B' with
a Stable Outlook.

The affirmation follows the pricing of the add-on TLB and the
receipt of final documentation that was substantively in line with
the draft documentation provided by the company.

The 'B' IDR of Inovie reflects its smaller scale than rated peers'
and its high financial leverage, pro-forma for its announced M&A
and contemplated changes in its capital structure. This is
compensated by its strong position in the highly regulated and
non-cyclical French lab-testing market and strong profitability.
Fitch's expectation of robust free cash flow (FCF) generation
implies sound deleveraging capabilities, albeit subject to the
group's future financial policy, including the profile and funding
of future acquisitions.

The Stable Outlook reflects Fitch's expectation that Inovie will
maintain some deleveraging capacity, with manageable execution and
adequate financial flexibility to implement its future growth
strategy.

KEY RATING DRIVERS

Sustainable Business Model: The rating continues to reflect Fitch's
view of Inovie's sustainable business model in a defensive sector.
The group is the third-largest network of private medical-testing
laboratories in France, with a historical focus on south and
central France. Fitch expects Inovie to benefit from stable
non-Covid-19 revenue, high and resilient operating margins and
superior cash generation, due to a supportive
regulation-and-reimbursement regime, combined with strong barriers
to entry.

M&A to Drive Growth: In 2021 Inovie announced bolt-on acquisitions
worth close to EUR600 million. Fitch expects Inovie to continue to
build its market share in France and to capitalise on a sound and
focused M&A strategy, targeting smaller laboratories in its
existing and adjacent regions, where it can extract cost savings
from an enlarged business scale.

Subdued French Market Growth: Fitch assumes the non-cyclical and
highly regulated French private lab-testing market to show muted
growth (0%-2%) over the next three years, with volume increases
offset by lower prices. The market is rapidly consolidating but
still has multiple independent laboratories and small laboratory
chains.

Positive Near-Term Covid-19 Impact: While the initial lockdown
temporarily reduced the sales and profit margins of Inovie's
routine-testing business, this was more than offset in 2020 by
Covid-19 tests of around EUR200 million. Fitch estimates Covid-19
test sales to have increased above EUR400 million in 2021, due to
the French government's supportive policy, which targeted a high
number of tests and fully reimbursed Covid-19 PCR test without the
need of a prescription or symptoms to get tested, unlike the
approach taken by other countries. France had also one of the most
generous reimbursement prices for the test, at around EUR73
including sampling cost, but in 3Q21 reimbursement price was cut to
EUR35-EUR45 and tests are now reimbursed only to the vaccinated.

Covid-19 Contribution to Decline Post-2021: Fitch forecasts a
drastic reduction in Covid-19 testing activity and profitability by
2023, driven by lower reimbursement prices and an expected decrease
in volumes, due to the successful rollout of a vaccination
programme across a large share of the population. Nonetheless Fitch
assumes that Covid-19 testing will remain an additional revenue
stream in the medium term, with margins broadly in line with the
group's EBITDA margin.

Some Diversification Benefits: Fitch views Inovie's diversification
in the specialty test (around 15% of non-Covid-19 revenue) as
beneficial, as these tests are less regulated (not included in the
budgetary scope governed by the triennial act) and offer long-term
growth opportunities. Fitch views Inovie as firmly placed to
withstand potential tariff pressure relative to smaller peers,
given its critical size and operational efficiencies.

Strong Cash Flow: Fitch expects Inovie's non-Covid-19 EBITDA margin
to have expanded towards 30% in 2021 and to rise to 32% by 2023.
The higher margin will mostly be driven by the agreed re-alignment
of the salary of partner biologists to market standards,
optimisation of the ratio of biologists per lab and a reduction of
reagent costs. Fitch expects this to increase FCF margin to the low
teens, higher than the levels achieved by Synlab and broadly
similar to other French peers'.

Financial Policy Drives Rating Trajectory: Fitch expects Inovie's
buy-and-build M&A strategy to allow for satisfactory deleveraging,
subject to multiples paid for lab targets, and the financing mix
(including equity reinvested by biologists of acquired labs). Fitch
deems its EUR332 million special dividend used to repay quasi
equity as exceptional and justified by its very strong performance
since 3Q20, due to Covid-19 tests.

Exceptionally high Covid-19 test activity in 2021 will result in
moderate leverage. Fitch expects funds from operations (FFO)
adjusted gross leverage to stabilise at 6.5x-7.0x, and total
adjusted debt/ operating EBITDAR below 5.5x over 2023-2025 once
Covid-19 activity normalises, which is adequate for the rating.
Fitch expects Inovie to finance bolt-on acquisitions with FCF.

DERIVATION SUMMARY

Inovie's 'B' IDR is in line with that of Laboratoire Eimer Selas
(Biogroup; B/Stable) and below that of Synlab AG (BB/Stable), which
are direct routine medical lab-testing peers. Inovie's
profitability, cash generation and leverage, as well as those of
direct peers, benefited from Covid-19 related activity in 2020 and
2021, which Fitch expects to decrease in 2022 and to normalise at
much lower levels from 2023.

Inovie is smaller in scale and less diversified geographically than
its rated peers, making it highly exposed to the French market and
to potential reimbursement changes in the medium term. Synlab is
well-diversified across Europe, while Biogroup has expanded to
Belgium. Inovie's lack of geographical diversification is somewhat
compensated by a more diversified product offering, with around 15%
of its non-Covid-19 revenue derived from specialty testing.

Inovie's leverage is lower than Biogroup's but much higher than
Synlab's. Synlab materially decreased its FFO adjusted gross
leverage to 3.5x, following its recent IPO. Fitch expects Inovie's
FFO adjusted gross leverage to be in line with a 'B' IDR, at
slightly below 7x in the medium term once Covid-19 activity
normalises. This compares with Fitch's expectation of Biogroup's 8x
FFO adjusted gross leverage in the medium term. In addition, Inovie
has witnessed less aggressive external growth over recent years,
which is characterised by more prudent financing, equity
partnerships with biologists and smaller targeted acquisitions.

Compared with investment-grade global medical diagnostic peers such
as Eurofins Scientific S.E. (BBB-/Stable) and Quest Diagnostics Inc
(BBB/Stable), Inovie is smaller and geographically concentrated,
more exposed to the routine lab-testing market and has much higher
leverage.

Inovie's rating is supported by Fitch's expectation of strong
profitability and cash flow generation. Inovie's expected
profitability is higher than Synlab's and similar to that of French
peers.

KEY ASSUMPTIONS

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

-- Organic sales growth of non-Covid-19 business at 2.2% in 2021,
    1% in 2022 and 0.5% p.a. over 2023-2025;

-- Covid-19 revenue above EUR400 million in 2021, before
    normalising gradually in the following years (25% of 2021
    revenue in 2022, 15% in 2023 and 7% in 2024-2025);

-- Group EBITDA margin around 38% in 2021 and around 32% over
    2022-2025, with EBITDA margin of non-Covid-19 business at 30%
    in 2021, 31% in 2022 and 32% in 2023-2025. EBITDA margin of
    Covid-19 business at 50% in 2021, 40% in 2022 and 35% in 2023-
    2025;

-- Acquisitions for a total amount of EUR830 million over 2022-
    2025;

-- Annual bolt-on acquisitions assumed at a 10x EBITDA and 20%-
    financed with equity related to biologists reinvesting in the
    business;

-- Capex at 1.9% of revenue in 2021, followed by 2.5% to 2025;

-- Operating leases at 4% of revenue, excluding Covid-19 tests
    from 2021 onwards;

-- Taxes paid at 23% of EBITDA from 2022 to 2025;

-- EUR20 million working-capital outflow in 2021; no major swings
    in working capital in 2022-2025;

-- Dividend of EUR332 million in 2021 to repay convertible bond.
    No further dividend over the following four years;

-- EUR50 million earn-out paid to shareholders in 2022, purchase
    of put/call options of EUR10 million in 2021 and EUR20 million
    in 2023.

RECOVERY ANALYSIS ASSUMPTIONS

In Fitch's recovery analysis, Fitch follows a going-concern (GC)
approach as this leads to higher recoveries than a liquidation
approach in the event of bankruptcy.

-- GC EBITDA (post-announced acquisitions) estimated at EUR208
    million. Fitch's GC EBITDA includes the annualized
    contribution of acquisitions secured as of November 2021 and
    only includes a small long-term contribution from Covid-19
    tests. This level of EBITDA, which could be caused by lower
    reimbursement, would lead to materially lower FCF
    corresponding to a minimum level of earnings required to cover
    its cash debt service, tax, maintenance capex and trade
    working capital.

-- Distressed enterprise value (EV)/EBITDA multiple of 5.5x,
    which implies a discount of 0.5x against the 6.0x multiple
    used for more geographically diversified and larger peers
    Synlab and Biogroup.

-- Committed revolving credit facility (RCF) of EUR175 million
    assumed to be fully drawn upon default, in line with Fitch's
    Corporates Notching and Recovery Ratings Criteria.

-- EUR126 million of structurally higher-ranking senior debt at
    subsidiary level, ranking ahead of the RCF and TLB.

-- After deducting 10% for administrative claims from the
    estimated post-distress EV, Fitch's waterfall analysis
    generates a ranked recovery for the senior secured debt
    (including RCF and TLB) in the 'RR3' band, indicating a 'B+'
    instrument rating for the enlarged TLB, with a waterfall
    generated recovery computation of 52%.

RATING SENSITIVITIES

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

-- A larger scale and/or increased product/geographical
    diversification, while maintaining EBITDA margin;

-- Total adjusted debt/operating EBITDAR below 5.0x, or FFO
    adjusted gross leverage trending towards 6.0x on a sustained
    basis (pro-forma for acquisitions);

-- FFO fixed charge coverage above 3.0x on a sustained basis
    (pro-forma for acquisitions).

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

-- Loss of M&A target selection discipline leading to weak
    operating performance, continued dividend payment policy
    leading to increased leverage and/or adverse regulatory
    changes eroding profitability;

-- Total adjusted debt/operating EBITDAR above 6.5x, or FFO
    adjusted gross leverage above 8.0x on a sustained basis (pro
    forma for acquisitions);

-- FFO fixed charge coverage below 2.0x on a sustained basis
    (pro-forma for acquisitions);

-- FCF margin in low single digits on a sustained basis.

BEST/WORST CASE RATING SCENARIO

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

LIQUIDITY AND DEBT STRUCTURE

Comfortable Liquidity: Fitch estimates Inovie to have had around
EUR500 million in readily available cash at end-2021 following the
successful issuance of its EUR775 million add-on TLB and the
payment of EUR332 million in dividends to repay quasi equity
instruments. In addition, Inovie has EUR175 million in undrawn
committed bank facilities maturing in 2027 and no other debt
maturities until 2027.

Our expectation of consistently positive FCF generation also
enhances Inovie's liquidity profile and financial flexibility.

ISSUER PROFILE

Inovie operates the third-largest network of private
medical-testing laboratories in France. Established in 2009, Inovie
is a market leader in the French private medical laboratory testing
industry with a strong footprint in the south/centre of France. Its
activities include routine (85% of estimated 2021 revenues excl.
Covid-19) and specialty testing (15% of 2021 revenues excl.
Covid-19).

ESG CONSIDERATIONS

Inovie has an ESG Relevance Score of '4' for Social Impacts, due to
its exposure to the French regulated French medical lab-testing
market, which has a negative impact on the credit profile, and is
relevant to the rating in conjunction with other factors. The
French medical lab-testing market is subject to pricing and
reimbursement pressures as governments seek to control national
healthcare spending. Adverse regulatory changes in the lab-testing
services sector may, therefore, have a negative impact on Inovie's
ratings. This is, however, mitigated by the 2020-2022 triennial
plan agreement, providing some market growth and earnings
visibility until December 2022.

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.


TSG SOLUTIONS: Moody's Assigns First Time 'B2' Corp. Family Rating
------------------------------------------------------------------
Moody's Investors Service has assigned a first-time B2 corporate
family rating and B2-PD probability of default rating (PDR) to TSG
Solutions Holding (TSG or the company), a holding company owner of
TSG, a French technical services provider for mobility solutions.
Concurrently, Moody's has assigned B2 ratings to the proposed
EUR320 million senior secured term loan B (TLB) and EUR70 million
senior secured revolving credit facility (RCF), both to be borrowed
by TSG Solutions Holding. The outlook is stable.

The proceeds from the proposed transaction will be used to (1)
repay existing debt; and (2) pay related transaction costs.

"TSG's B2 rating reflects the company's leading position as
provider of energy distribution systems in Europe, notably in fuel
retail, and its good track record of profitable growth in recent
years", says Guillaume Leglise, a Moody's Vice-President -- Senior
Analyst and lead analyst for TSG. "At the same time, the rating
also incorporates the company's high leverage and the risks
associated with TSG's transition to new technologies for mobility,
where the company has a limited track record and faces intense
competition and which poses a risk for TSG's core fuel retail
business", adds Mr Leglise.

RATINGS RATIONALE

The B2 CFR primarily reflects TSG's leading market position in
Europe in traditional fuel retail activities with longstanding
relationships and multiple contracts per customer; its good
geographic mix and diversified service offerings, covering
distribution, installation and maintenance of mobility solutions,
which address multiple customer types across the value chain; its
good revenue visibility stemming from the recurring nature of
maintenance activities, which proved fairly stable during the
economic downturn of 2009 and during the pandemic; growth prospects
supported by increasing electric vehicle (EV) charging and gas
equipment needs; its good track record of profitable growth in
recent years led by an established management team, which continues
to hold a large stake in the company; and its good free cash flow
(FCF) generation and good liquidity pro forma the refinancing
transaction.

Conversely, the rating is constrained by TSG's relatively low
margins and high leverage pro forma the proposed refinancing
transaction, expected at around 6.0x in fiscal 2022 (year ending
April 30, 2022), although expected to trend towards 5.0x in the
next 18 months; some customer concentration with some reliance on
major oil & gas operators; the declining trend of traditional fuel
retail operations owing to the switch to green technologies, which
can affect the company's core operations in the long term; the
highly fragmented and competitive nature of the industry, notably
on EV charging activities, where the company has a limited track
record; and its reliance on Dover Corporation (Baa1 stable) for
sourcing dispensers, systems and spare parts for its fuel retail
activities, through a semi-exclusivity contract running until 2026,
although to date, this partnership has been mutually successful and
long-dated, and hence likely to be extended.

Environmental and governance factors are considered in TSG's credit
profile. In particular, the company is exposed to the transition to
new technologies for mobility such as EV charging and gas, which
will negatively affect TSG's core fuel retail business in the
long-term. In terms of governance, TSG is majority owned by HLD
Group (HLD), which, as is often the case in levered,
private-equity-sponsored deals, can have greater tolerance for
higher leverage. The company also tends to pursue an acquisitive
strategy, as seen in recent years, which could limit deleveraging
and create integration risks.

LIQUIDITY

Pro forma the proposed transaction, TSG's liquidity is considered
to be good. TSG will benefit from an initial cash balance of EUR63
million and full access under its EUR70 million senior secured RCF.
Moody's also expects TSG to benefit from good FCF generation, owing
to its asset-light business model and good top line growth
prospects.

The senior secured RCF will be subject to a springing financial
maintenance covenant, tested only when 40% or more of the facility
is drawn. This net debt/EBITDA covenant is fixed at 7.5x, giving
the company ample buffer compared with an initial net leverage of
4.2x pro forma the transaction (as reported by the company). TSG's
proposed senior secured TLB is due in March 2029, while its senior
secured RCF is due in September 2028.

STRUCTURAL CONSIDERATIONS

The B2 CFR is assigned to TSG Solutions Holding, which is the top
entity of the restricted group and the borrower of the senior
secured bank credit facilities. The capital structure consists of a
senior secured TLB for a total amount of EUR320 million and a EUR70
million senior secured RCF. The senior secured TLB and the senior
secured RCF benefit from the same maintenance guarantor package,
including upstream guarantees from guarantors, representing at
least 80% of the group's consolidated EBITDA. Both instruments are
secured, on a first-priority basis, by share pledges in each of the
guarantors; security assignments over intercompany receivables; and
security over material bank accounts. However, there are
significant limitations on the enforcement of guarantees and
collateral under the French law.

The senior secured RCF and senior secured TLB are rated B2, in line
with the CFR, reflecting the fact that these represent the only
financial debt in the company's capital structure. TSG's PDR is
B2-PD, reflecting the use of a 50% family recovery rate, consistent
with a debt structure composed of senior secured bank debt and only
with a relatively weak financial maintenance covenant.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects Moody's expectation that TSG will
continue to achieve revenue growth in the high-single digit range
in percentage terms in the next 18 months, reflecting positive
contributions from its core businesses, while achieving profitable
growth in its EV charging activities. The rating agency expects
that this will drive an improvement in Moody's adjusted leverage to
below 5.5x, and towards 5.0x in the next 12 to 18 months. The
stable outlook does not assume material debt-financed
acquisitions.

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

Positive rating pressure could occur over time if the company
continues to successfully execute its strategy, including customer
acquisitions and strong organic growth in new technology
activities. Quantitatively, upward pressure could arise if the
company displays sustained growth in revenues and earnings, its
Moody's-adjusted debt/EBITDA ratio improves to materially below
4.5x on a sustainable basis and its Moody's-adjusted FCF/debt ratio
trends sustainably above 5%. An upgrade would also require TSG to
maintain a good liquidity profile while demonstrating balanced
financial policies.

Conversely, negative pressure on the rating could materialise if
TSG's debt/EBITDA ratio does not improve sustainably below 5.5x in
the next 18 months, and towards 5.0x thereafter, or if the
company's traditional fuel retail activities begin to show a
decline, especially if this is not sufficiently offset by growth in
the company's EV charging business. A loss of customer base
contracts could lead to negative rating pressure as could
debt-funded acquisitions, shareholder distributions, or if its FCF
turns negative and the company does not maintain adequate liquidity
at all times.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.

COMPANY PROFILE

Headquartered in Le Plessis-Robinson, France, TSG is a European
provider of installation and maintenance services to fueling
stations and fleet depots. It is present across the entire services
value chain covering sale and distribution of equipment and
systems, installation and repair works as well as maintenance
activities. In 2020, French private-equity company HLD bought a 56%
ownership, while TSG's management team retained a 44% stake.




=============
G E R M A N Y
=============

SUMMIT PROPERTIES: Moody's Affirms Ba1 CFR, Outlook Remains Stable
------------------------------------------------------------------
Moody's Investors Service has affirmed the Ba1 corporate family
rating of Summit Properties Limited ("Summit") and its existing
EUR300 million senior unsecured notes maturing in 2025. At the same
time, Moody's assigned a Ba1 rating to the planned new EUR300
million guaranteed senior unsecured notes to be issued by Summit
Lux Finance S.a r.l., guaranteed by Summit. The outlook on Summit
ratings remains stable and the outlook for Summit Lux Finance S.a
r.l. is stable.

RATINGS RATIONALE

Summit's Ba1 corporate family rating (CFR) reflects the company's
solid cash flow generation, strong interest coverage and moderate
leverage supported by its financial policy of maintaining a net LTV
of around 40% as well as net debt to EBITDA at below 9.0x. At the
same time the rating also incorporates the relatively smaller scale
and greater portfolio concentration compared to higher rated
European and US peers, with a GAV of -EUR1.2bn as of January 2022,
of which currently nearly half is constituted by German commercial
properties located across major cities and secondary locations.

After a major German portfolio disposal in June 2021 of close to
EUR1 billion, Summit started diversifying its real estate
operations into the US, by acquiring a mixed portfolio of
affordable workforce housing apartment buildings in NYC, Class B/C
malls and hotels. More specifically, as of December 2021 the
residential segment comprised around 2,800 chiefly rent-stabilized
and fully occupied residential units located throughout New York
City ("NYC"), 14 income-generating retail properties spread across
US, that according to the company, have large outparcels for sale
or repurposing. Additionally, the company owns a majority stake in
2 NYC hotel properties, which Moody's understand the company will
dispose in the mid-term.

The recent acquisition activity reflects Summit's opportunistic
portfolio management, a credit challenge, that could imply
uncertainty around long-term business profile, targeted asset type
or location and expose the company to execution risks specially in
new estate segments or jurisdictions. However, Moody's understand
that Summit will remain focused on its current strong jurisdictions
and very liquid real estate markets of Germany and the US, with a
mid-term target of conforming a portfolio of -EUR2.0bn with nearly
equal weight in both countries and diversified across German
commercial properties (between 40% and 50% share), residential
units in NYC (40%) and US retail properties (between 10 and 20%).

Moody's expect the company's operational performance in Germany to
remain solid, characterized by a sustained like-for-like rental
growth; and appreciate that the company's new footprint in the NYC
residential market will offer a defensive and very granular rental
income stream, which is further supported by solid long-term demand
fundamentals. There are some downside risks given limited growth
potential, regulatory risk and vulnerability to tenants' credit
risk in the case of economic downturn, rising unemployment or from
low-income households. Additionally, Moody's remain cautious on the
future performance of the acquired US retail properties, which
remain under pressure from secular challenges and highly sensitive
to COVID-19 developments. Summit properties is also now exposed to
FX-risks stemming from its new operations in US, which could
introduce some volatility in earnings and property values.

The credit challenges stemming from the transition of the company's
business profile are balanced against management's solid
operational track record of creating value on investments and
delivering sustained rental growth, while observing balanced
financial policies, reflected in a strongly positioned Ba1 rating
ahead of company's expansion into the US.

The Ba1 rating assigned to the planned guaranteed senior unsecured
notes is in line with the long-term corporate family rating.
Moody's expects the new notes to rank pari passu with all other
unsecured obligations of the issuer. They will benefit from debt
incurrence covenants including a maximum LTV ratio of 60%, maximum
secured loan to value ratio of 45%, a minimum unencumbered asset
ratio of 1.25x and a minimum interest coverage ratio of 2x.

Proceeds from the planned new notes will be used to repay around
EUR150 million of existing indebtedness with the remainder
earmarked to enhance its liquidity buffer for additional
investments or other corporate purposes.

STRUCTURAL CONSIDERATIONS

The existing and planned new guaranteed senior unsecured notes are
structurally subordinated to currently USD346 million secured loans
in connection with the acquired NYC residential properties, with no
covenants and around EUR33 million secured loans in connection with
3 German commercial properties, that have maintenance covenants,
with generally significant headroom.

Moody's caution that in the case of the company's predominant class
of debt shifting sustainably towards secured debt as a consequence
of future acquisitions over the next six to 18 months, Moody's
could notch down the rating of the existing and planned new senior
notes, to reflect a weaker position of unsecured creditors post
investments into secured assets. A minimum of at least 1.5x
unencumbered property asset coverage ratio for unsecured creditors
and weighted towards stable or liquid asset classes will be
required for maintaining rating of the notes at the same level of
the long-term corporate family rating.
RATIONALE FOR STABLE OUTLOOK

The stable rating outlook reflects Moody's expectation for the next
12-18 months that the company will continue to deliver positive
operational results, supporting a stable cash flow generation at a
strong level, while maintaining a balanced growth strategy in line
with its financial policy of maintaining a LTV around 40% and net
debt to EBITDA below 9x.

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

The rating guidance is calibrated on the company's current business
profile, including a relevant footprint in Germany. Should the
company's portfolio mix materially change in the light of future
acquisition activity, guidance will need to be revisited.

FACTORS THAT COULD LEAD TO AN UPGRADE

The ratings could be upgraded if Summit is able to strengthen its
business profile with a solid track record of good operating
results in its expansion markets combined with strong credit
metrics. Specifically:

Track record of a predictable and long-term oriented business
strategy combined with positive operational results, such as
increasing occupancy, net operating income and values

Increase in scale to levels commensurate with investment-grade
peers and with focus on stable asset classes in its current
jurisdictions

Track record of operating at Moody's-adjusted debt/gross assets at
well below 40% and net debt to EBITDA at well below 7x, while
maintaining an FCC ratio well above 4.0x

Track record of accessing public capital markets, resulting in a
strong liquidity, combined with a long-dated and well-staggered
debt maturity profile as well as robust unencumbered assets ratio
of well above 50% and weighted towards stable and liquid asset
classes providing a good coverage to unsecured creditors

All factors need to be met for an upgrade.

FACTORS THAT COULD LEAD TO A DOWNGRADE

More opportunistic business strategy that elevates execution and
financial risks

Deterioration in the operating performance, including dropping
occupancy rate, declining net operating income, valuation
impairments, or if property market fundamentals weaken sharply

Moody's-adjusted debt/gross assets above 50% or net debt to EBITDA
rises above 9x

FCC declining below 3x

The company's liquidity profile deteriorates

The quality of the unencumbered asset pool deteriorates materially
or if unencumbered property asset coverage ratio for unsecured
creditors falls below 1.5x and is weighted towards relatively less
stable or liquid asset classes

LIQUIDITY

Summit will maintain an adequate liquidity with a cash balance of
around EUR450 million pro-forma for the refinancing and
acquisitions signed in H2 2021; after funding the remaining of the
acquisition pipeline and paying out a EUR80 million dividend during
2022 Moody's expect the company to have around EUR200 million in
available cash over the next 12 to 18 months.

Available liquidity together with Moody's funds from operations of
between EUR85 million and EUR90 million per year will adequately
cover all cash needs of Summit, over the next 12 to 18 months.

The company's solid liquidity is further supported by no debt
maturities before 2025 and a growing track record accessing the
public debt markets.

Company's unencumbered asset ratio will remain between 50% and 55%
over the next 12 to 18 months, mainly because of secured loans on
the acquired NYC residential properties that have a maturity of
around 7 years, and which Moody's understand the company can repay
after the end of the interest-only period within 3 years.

The German real estate portfolio is largely unencumbered, and
Moody's understand that the US retail assets will have no debt
attached to them, after a repayment of a bridge facility from the
bond proceeds and will be thus fully unencumbered. Moody's assess
the latter as a less-attractive asset class which weakens the
overall quality of Summit's unencumbered asset pool.

ESG CONSIDERATIONS

Summit Properties Limited is a private company, 99.1% stake owned
by Summit Real Estate Holdings (controlled by the Managing Director
of Summit, Zohar Levy). He established Summit in 2006 and was key
in the development of the company, with 25 years of professional
real estate experience and more than 15 years in Germany's real
estate market. His main asset is its 45% stake in Summit Real
Estate Holdings, listed on the Tel Aviv Stock Exchange with a
market capitalization of EUR1.7bn.

As a private company, Summit has limited access to public equity
and in terms of corporate governance, the company's ownership
structure could raise concerns around less checks and balances than
Moody's typically see in publicly traded and widely held companies.
The recent acquisition activity reflects Summit's opportunistic
portfolio management, which is a credit challenge. However, the
stability of the management team as well its long track record is
expected to support sustained adequate business practices in line
with company's financial policy of maintaining a net LTV of around
40% as well as net debt to EBITDA at below 9x.

Summit is also exposed to social risks arising from shortage of
affordable workforce housing in NYC, which elevates the stringency
of housing policies and limits rental growth. At its retail
properties, Summit is exposed to the secular shift from e-commerce
and changes in consumer spending preferences, exacerbated by the
pandemic. The operational-intensive nature of both asset classes
exposes Summit to counterparty risk, as the company's performance
in the US retail and residential segments will be also largely
connected to the performance of the respective property managers.
To align interest, the property managers have a minority stake in
the current investments, ranging between 5% to 15%.

The NYC's 2025 and 2030 environmental targets will prompt
residential landlords such as Summit to perform substantial
investments in order to improve energy efficiency and comply with
future requirements; and the company's commercial real estate
properties in Germany could see potential rising environmental
regulation and greater investment requirements driven by the goal
to decarbonise the economy.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms Methodology published in July 2021.

COMPANY PROFILE

Summit Properties Limited (Summit) is a private company with a
EUR1.2 billion real estate portfolio pro-forma for new acquisitions
signed until November 1, 2021. Company is diversified across German
commercial real estate properties (49% of company's portfolio) next
to US residential and retail assets (together accounting for 51%).




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N O R W A Y
===========

ADEVINTA ASA: Moody's Alters Outlook on 'Ba3' CFR to Stable
-----------------------------------------------------------
Moody's Investors Service has changed the outlook on Adevinta ASA's
ratings to stable from negative. At the same time, Moody's has
affirmed Adevinta's Ba3 long term corporate family rating, Ba3-PD
probability of default rating as well as the Ba3 ratings for its
EUR1.3 billion (equivalent) senior secured term loan B, EUR450
million senior secured revolving credit facility and the EUR1.06
billion (equivalent) senior secured notes.

Moody's decision to change the outlook on Adevinta's ratings to
stable reflects (1) the successful completion of the acquisition of
eBay Classifieds Group (eCG) as planned; (2) good operating
momentum for the combined business with an expected reduction in
Moody's adjusted gross leverage (Moody's adjusted) to below 5.0x by
the end of 2022 and (3) the solid future revenue and EBITDA growth
prospects for the business over the coming 3-5 years with an
initial focus on de-leveraging and organic growth investments.

Adevinta successfully completed the acquisition of eCG on June 25,
2021. Under the terms of the acquisition agreement, eBay received
$2.5 billion in cash and around 540 million shares of Adevinta,
accounting for a 44% stake in the new combined group. Adevinta
issued to eBay voting shares accounting for around 33.3% of the
total voting rights, and a new class of non-voting shares for the
remainder of its 44% stake. As a result of the transaction,
Schibsted's percentage ownership of Class A shares was reduced to
around 39%, equaling roughly 33% of Adevinta's total outstanding
share capital.

In December 2021, eBay completed the sale of a 10.2% stake in
Adevinta to funds advised by Permira. This transaction allowed eBay
to meet certain demands made by the Austrian Federal Competition
Authorities for the eCG transaction to proceed. As part of the of
eCG acquisition regulatory clearance process and in line with the
undertakings approved by the UK Competition and Markets Authority,
Adevinta also concluded the sale of Shpock, Gumtree UK and
Motors.co.uk in the second half of 2021.

RATINGS RATIONALE

In 2020, the combined group's revenue (on a pro-forma basis)
declined by -3.7% in the wake of the Coronavirus pandemic. While
France saw 10% growth in 2020 despite Covid disruptions, revenue in
Germany dipped by -2.1% while revenue in other European Markets
also declined by -3.6%. Revenue in international markets dropped
sharply by -22%. Revenue saw a solid recovery in 2021 with 12.4%
growth year-on-year growth in overall revenues in the first nine
months ending 30 the September 2021. Growth in Germany was however
muted at 3.9% in the first nine months of 2021 driven by the chip
shortage affecting the car transactions in Germany since the last
two years. The low volume of listings on Mobile.de have been
partially offset by the pricing growth and the uptake of value
added services. Adevinta expects its revenues in Germany to return
to pre-pandemic level from the second half of 2022 as listing
rebound to pre-covid level and continued pricing and value added
growth comes through.

The company's gross leverage (Moody's adjusted) is expected to
improve to below 5.0x by the end of 2022 (down from a pro-forma
leverage of 6.1x estimated for the full year 2020). Moody's expect
the company to achieve low double digit revenue growth in 2022 and
around 15% growth annually thereafter while targeting reported
EBITDA margins of 40%-45%, which should be supportive of its
de-leveraging ambition over the coming years.

In order to drive the aforesaid revenue and EBITDA growth, Adevinta
has announced its 'Growing at Scale' strategy in November 2021. The
strategy is underpinned by the following 3 priorities -- (1)
focusing the portfolio, by investing in and growing its five Core
markets of Germany, France, Spain, Benelux and Italy; (2)
concentrating on high-quality verticals: Motors and Real Estate;
(3) becoming fully transactional in consumer goods, expanding into
a growing and profitable online commerce market; and (4) leveraging
technology and transforming advertising to preserve revenue and
adapt to the evolving market. While Adevinta's growth strategy
sounds credible, Moody's cautiously factor in some risks related to
its successful and timely implementation.

Moody's positively recognizes that the management representatives
coming from Adevinta and eCG share a similar set of strategic
values, but it cautiously takes into consideration the execution
risks associated with successful and timely integration of the two
businesses of considerable scale and complexity. The breadth and
depth of eCG business is higher than Adevinta's and has required
rigorous integration planning.

The transaction offers good potential to achieve synergies, with a
target of around EUR130 million of run-rate EBITDA contribution
likely to be achieved by 2024. Cost synergies are likely to account
for two thirds of the total amount and will be primarily derived
from product, technology and IT efficiencies, and the
de-duplication of certain functions across the two organizations.
The synergy realization is likely to give rise to pretax one-time
integration costs of around EUR130 million, to be incurred over
2020-23.

Moody's considers Adevinta's liquidity as strong. Adevinta benefits
from its good liquidity, supported by the EUR450 million revolving
credit facility, which was drawn by EUR150 million at the closing
of the transaction. There is a springing covenant on the RCF,
tested quarterly only when drawings net of cash in the group exceed
40% of the total facility. The test is a senior secured net
leverage ratio set at 40% headroom above the net leverage at
transaction close. The combined entity benefits from a long-dated
maturity profile with no significant debt maturing before 2025.

Given the limited capital expenditure needs of the company and
despite the cash outflow towards acquisition integration costs,
cash generation is expected to be healthy with Moody's adjusted
Free Cash Flow (FCF) / Debt of 8%-10% expected in 2022 and higher
thereafter. Moody's recognizes that the company FCF generation
would be impacted as and when Adevinta decides to introduce regular
dividend payments.

Adevinta's PDR of Ba3-PD is at the same level as the company's CFR,
reflecting the expected recovery rate of 50%, which Moody's
typically assume for a capital structure that consists of a mix of
bank credit facilities and bond debt. The bank credit facilities
(B1, B2, and Revolving Credit Facilities) have been raised by
Adevinta ASA and Adevinta Finance AS and the B3 facility are raised
by Oak DutchCo, all ranking pari passu with the new senior secured
notes. The notes / loans are guaranteed by operating companies
accounting for at least 80% of consolidated EBITDA, and secured by
share pledges, bank accounts and intercompany receivables of the
group.

ESG CONSIDERATIONS

With the transaction closing, the size of the board has increased
to 10, allowing eBay and Schibsted to appoint two directors each.
Both eBay and Schibsted have certain information and cooperation
entitlements. After the closing of the transaction between eBay and
Permira in December 2021, a new board member has been appointed by
Permira to Adevinta's board of directors.

The company has also announced its medium term target reported net
leverage range of 2.0x-3.0x. Its reported net leverage stood at
4.0x for the last twelve months ended September 30, 2021. The
company intends to use its future internally generated cash towards
organic growth investments as well as de-leveraging. Any excess
cash will be used towards strategic M&A and/ or shareholder
returns.

STABLE RATING OUTLOOK

The stable rating outlook reflects Moody's expectation that the
company will continue to grow its revenue and EBITDA in line with
its medium term growth plan and achieve further de-leveraging in
the next 12-18 months.

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

Upward rating pressure could arise if (1) Adevinta maintains double
digit revenue growth, (2) the company's Moody's-adjusted gross
leverage declines below 4.0x, and (3) Free cash flow/ debt (as
adjusted by Moody's) is maintained at a healthy level of around
10%, both on a sustained basis.

Negative pressure on the rating could develop if (1) Adevinta's
operating performance slows down visibly (2) its Moody's-adjusted
gross leverage is maintained at above 5.0x on a sustained basis,
and (3) Free cash flow/ debt (as adjusted by Moody's) decreases
sustainably below 5%.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.

COMPANY PROFILE

Adevinta ASA (Adevinta) is a global online classifieds company that
operates generalist, real estate, car, job and other digital
marketplaces. Following the completion of the eCG acquisition in
June 2021, the company holds the leading market position across 15
countries . The company generated EUR1,437 million in revenue and
EUR470 million in reported EBITDA in 2020 on a pro-forma basis. For
the first nine months of 2021, the combined company reported
revenue of EUR1,176 million and an EBITDA of EUR395 million,
pro-forma for the eCG acquisition transaction.




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

BANCO COMERCIAL PORTUGUES: S&P Affirms 'BB' ICR, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings has affirmed its issuer and issue credit ratings
on the following four Portuguese banks and one Maltese bank. The
affirmations follow a revision to its criteria for rating banks and
nonbank financial institutions and for determining a Banking
Industry Country Risk Assessment (BICRA). The affirmations
include:

-- Banco Santander Totta S.A. (ICR BBB/Stable/A-2, RCR BBB/A-2)
-- Banco BPI S.A. (ICR BBB/Stable/A-2, RCR BBB/A-2)
-- Banco Comercial Portugues S.A. (ICR BB/Stable/B, RCR BBB-/A-3)
-- Haitong Bank S.A. (ICR BB/Stable/B)
-- Bank of Valletta PLC (ICR BBB-/Negative/A-3)

S&P outlooks on the four Portuguese banks remain stable, while the
outlook on Bank of Valletta remains negative.

S&P said, "Our assessments of economic risk and industry risk in
Portugal also remain unchanged at '6'. These scores determine the
BICRA and the anchor, or starting point, for our ratings on
financial institutions that operate primarily in that country. The
trends we see for economic risk and industry risk remain stable and
positive, respectively.

"Our assessments of economic risk and industry risk in Malta remain
unchanged at '4' and '6', respectively. The trends we see for
economic risk and industry risk remain negative and stable,
respectively.

"In addition, the group stand-alone credit profiles (SACPs) of the
abovementioned banks, and our assessment of the likelihood of
extraordinary external support, remain unchanged under our revised
criteria. Consequently, we have affirmed all our ratings on these
banks."

Banco Santander Totta S.A.

The long-term issuer credit rating on Totta, which benefits from
one notch of uplift for extraordinary parental support from Banco
Santander, is constrained by the 'BBB' sovereign credit rating on
Portugal. This reflects Totta's high concentration of operations in
its domestic market.

S&P said, "We consider Totta to be a strategically important
subsidiary of Banco Santander S.A. (A+/Negative/A-1). Given its
strategically important status, we could rate Totta 'A-', up to
three notches above its SACP. However, in practice, we only
incorporate one notch of parental support into our current ratings,
since we do not consider its parent, Banco Santander, willing to
support its subsidiary during stress associated with a sovereign
default.

"Our ratings continue to reflect Totta's leading franchise in
Portugal, strong track record of delivering sustained profits
though the cycle, and balanced funding profile. Although we expect
some deterioration over 2022, we think the bank will continue to
demonstrate better asset quality than peers', which supports our
view of its stronger-than-peers' risk profile. After strong
provisioning efforts in 2021, we expect Totta's credit losses will
gradually decrease over the next 12-18 months. In addition,
although the bank incurred significant costs related to its
transformation plan over Q1 2021, we consider them to be a one-off,
and we still forecast a gradual recovery of its earnings over the
next 12-18 months. Under our base-case scenario, we therefore
expect the bank to sustain its adequate level of capital."

Outlook

S&P's stable outlook on Totta mirrors that on Portugal.

Downside scenario: S&P said, "We could lower our ratings on Totta
in the next 12-24 months if we were to lower the ratings on
Portugal. Although we consider Totta to be a strategically
important subsidiary of Banco Santander, we do not consider its
parent willing and able to support its subsidiary during stress
associated with a sovereign default. Although remote, we could also
lower our ratings on Totta if we considered that the bank's
relevance to its parent had diminished."

Upside scenario: S&P could upgrade Totta following a similar action
on the sovereign in the next 12-24 months, assuming Totta remained
a strategically important subsidiary of its parent, Banco
Santander.

  Ratings Score Snapshot

  Issuer Credit Rating: BBB/Stable/A-2
  Stand-alone credit profile: bbb-
  Anchor: bb+
  Business Position: Adequate (0)
  Capital and Earnings: Adequate (0)
  Risk Position: Strong (+1)
  Funding and Liquidity: Adequate and adequate (0)
  Comparable Rating Analysis: 0
  Support: +1
  ALAC Support: 0
  GRE Support: 0
  Group Support: +1
  Sovereign Support: 0
  Additional Factors: 0

  ESG Credit Indicators: E-2, S-2, G-2

Banco BPI S.A.

S&P said, "Our ratings on BPI reflect our view that, given BPI's
importance for CaixaBank, it will likely receive support from its
parent if needed. That said, although we consider BPI a highly
strategic subsidiary of Spain-based CaixaBank, the rating benefits
from no more than two notches of uplift from BPI's 'bb+' SACP. This
is because the long-term sovereign credit rating on Portugal
continues to constrain the issuer credit ratings on Banco BPI,
given the bank's high business concentration in the domestic
market."

BPI's 'bb+' SACP benefits from its solid franchise and loyal
customer base in Portuguese retail banking, asset quality that is
better than domestic peers', low reliance on wholesale funding, and
adequate liquidity profile. At the same time, the ratings reflect
the bank's concentration of operations in Portugal, lack of scale
compared with large domestic competitors', and modest
capitalization. S&P said, "We assume BPI's dividend payout ratio
will remain above 50%, with credit losses remaining above
normalized levels at 35 bps on average and business volumes
decreasing. We therefore expect BPI's capitalization will remain
modest, with our risk-adjusted capital (RAC) ratio at 6.7%-7.0%
over the next 12-18 months."

Outlook

S&P's stable outlook on Banco BPI mirrors that on Portugal.

Downside scenario: S&P said, "We could lower our ratings on Banco
BPI in the next 12-24 months if we lowered the ratings on Portugal.
Although we consider Banco BPI to be a highly strategic subsidiary
of Caixabank, the long-term sovereign credit rating on Portugal
continues to constrain the issuer credit ratings on Banco BPI."

Upside scenario: S&P could upgrade Banco BPI following a similar
action on the sovereign in the next 12-24 months.

  Ratings Score Snapshot

  Issuer Credit Rating: BBB/Stable/A-2
  Stand-alone credit profile: bb+
  Anchor: bb+
  Business Position: Adequate (0)
  Capital and Earnings: Moderate (0)
  Risk Position: Adequate (0)
  Funding and Liquidity: Adequate and adequate (0)
  Comparable Rating Analysis: 0
  Support: +2
  ALAC Support: 0
  GRE Support: 0
  Group Support: +2
  Sovereign Support: 0
  Additional Factors: 0

  ESG Credit Indicators: E-2, S-2, G-2

Banco Comercial Portugues S.A.

The ratings on BCP balance its solid franchise and improved
profitability and efficiency in Portugal with its still
higher-than-peers' stock of nonperforming exposures (NPEs) and
moderate capitalization. In S&P's view, over the next 12 months,
the bank will continue posting strong pre-provision domestic
profitability and better-than-peers' efficiency levels, while
maintaining a balanced funding and liquidity profile. At the same
time, BCP will remain subject to headwinds from its 50.1%
owned-Polish subsidiary, Bank Millennium, because litigation risks
related to legacy foreign-currency (FX)-denominated mortgage loans
will continue to weigh on the bank's earnings. In S&P forecasts, it
assumes that Bank Millennium will continue reinforcing its
provisions for such risks over the next year, but it thinks the
impact for BCP will be manageable overall. This, combined with the
persistence of negative rates and declining but still high credit
losses, will continue to constrain BCP's bottom-line profitability,
with its return on equity at about 3% by end-2022.

Outlook

S&P said, "The stable outlook on BCP reflects our expectation that
over the next 12 months, amid a more supportive domestic economic
environment, the bank will be able to defend its solid retail
franchise in Portugal, gradually strengthening its domestic
profitability further, while maintaining better-than-peers'
efficiency. In particular, we anticipate that BCP's cost-to-income
will stand at about 47%, well below the average of more than 60%
that we envisage for its peer group. At the same time, we
anticipate that the bank's improving asset quality trend could
deteriorate somewhat over the next 12 months, particularly after
the expiry of moratoria in Portugal throughout 2021. That said, we
think such a deterioration will not be harsher than the average for
its peers, with BCP's NPE ratio likely to increase to close to 6%
by 2022.

"Furthermore, our stable outlook reflects our expectation that
BCP's Polish operations will remain under pressure over the next 12
months, although the effect on capital will be manageable. In
particular, we think Bank Millennium will remain exposed to
significant litigation risks on its foreign currency-denominated
mortgages in Poland. As such, it will need to reinforce further its
provisions for such risks, which could translate into additional
reported losses, as has been the case in the past few quarters.
Overall, we anticipate that BCP's capitalization will remain
moderate, with our RAC ratio standing at 6.25%-6.75% by end-2022.
This reflects our expectation that BCP will generate profit,
despite further provisioning needs for legal risks on its foreign
mortgage loans and further problem loans weighing on its
risk-weighted assets."

Downside scenario: S&P said, "We could lower the ratings if BCP's
litigation risks in Poland turned out to be worse than we currently
expect, significantly harming BCP's consolidated capital position.
We could also lower the ratings if the bank engaged in overly
aggressive growth, impairing its financial profile."

Upside scenario: S&P said, "We could raise the ratings if the bank
further strengthened its domestic profitability without increasing
its risk appetite, while maintaining its efficiency and earnings
generation capacity advantages. We could also raise the ratings if
BCP made more progress than expected in building up its bail-inable
debt buffer."

  Ratings Score Snapshot

  Issuer Credit Rating: BB/Stable/B
  Stand-alone credit profile: bb
  Anchor: bb+
  Business Position: Adequate (0)
  Capital and Earnings: Moderate (0)
  Risk Position: Moderate (-1)
  Funding and Liquidity: Adequate and adequate (0)
  Comparable Rating Analysis: 0
  Support: 0
  ALAC Support: 0
  GRE Support: 0
  Group Support: 0
  Sovereign Support: 0
  Additional Factors: 0

  ESG Credit Indicators: E-2, S-2, G-2

Haitong Bank S.A.

The long-term issuer credit rating on Haitong Bank (HB) continues
to factor in three notches of uplift for extraordinary parental
support. This is because S&P considers Haitong Bank a strategically
important subsidiary to its China-based parent, Haitong Securities
Ltd. Co. (BBB/Stable/A-2).

S&P said, "Our ratings on HB also continue to reflect its lack of
scale in the investment banking industry, and its lower efficiency
and profitability when compared to domestic and international
peers, which leaves it with a reduced loss-absorption capacity.
That said, we expect HB to continue reporting positive albeit weak
results and to sustain its RAC ratio comfortably above the 10%
threshold. Although we acknowledge that investment-led economic
recovery in Portugal could partly support HB's efforts to enhance
its business activity, we also think high single-name
concentration, persistent market volatility, and high exposure to
lower rated companies will continue weighing on its risk profile.
Furthermore, HB's funding profile remains weaker than its peers'
because of its higher reliance on wholesale funding. Its price
sensitive and concentrated deposit base also weigh on our
assessment."

Outlook

S&P said, "The stable outlook on HB reflects our expectation that
the bank will remain focused on strengthening its business model to
gradually achieve more sustainable profitability. We also expect
organic capital generation will be modest, but sufficient to
preserve the bank's enhanced capital position, with our RAC ratio
standing at about 11%-12% over the 12-18 months."

Upside scenario: S&P said, "We could raise our ratings on HB if it
improved its operating profitability sustainably, generating
recurring and stable revenue, while gradually aligning its
efficiency with peers'. Although not our base case, we could also
raise the ratings if we considered Haitong Bank to be a more
important subsidiary for its Chinese parent."

Downside scenario: S&P said, "We could lower our ratings if the
bank were to incur material losses or undertake aggressive
expansion that pushed the RAC ratio below 10%, especially if its
exposure to riskier asset classes increased substantially,
resulting in much higher impairment losses. We could also lower the
ratings if the bank faced a renewed need to restructure, or if the
parent's commitment to the bank faltered."

  Ratings Score Snapshot

  Issuer Credit Rating: BB/Stable/B
  Stand-alone credit profile: b
  Anchor: bb+
  Business Position: Constrained (-2)
  Capital and Earnings: Strong (+1)
  Risk Position: Constrained (-2)
  Funding and Liquidity: Moderate and adequate (-1)
  Comparable Rating Analysis: 0
  Support: +3
  ALAC Support: 0
  GRE Support: 0
  Group Support: +3
  Sovereign Support: 0
  Additional Factors: 0

ESG Credit Indicators: E-2, S-2, G-2

Bank of Valletta PLC

S&P said, "The ratings reflect our view that Bank of Valletta (BOV)
will continue to benefit from its dominant domestic market position
and sound retail franchise in Malta. Moreover, we think its strong
capitalization can withstand the COVID-19 pandemic's effect on
Malta's economy and private sector. We anticipate the bank's RAC
ratio to remain above 10% over the next 12-24 months, despite
relatively higher credit losses than in recent years and modest
operating profitability. Our ratings on BOV also incorporate some
additional risks to its capitalization from pending litigation."

Outlook

The negative outlook on BOV primarily reflects the risks S&P sees
to its base-case expectations.

Downside scenario: S&P said, "We would likely lower the ratings
over the next 12-24 months if we observed a material deterioration
in economic and operating conditions in Malta or a weaker recovery
than we currently anticipate. In particular, we could lower the
ratings if we observed that NPEs and credit losses were rising
faster and had a stronger effect on BOV's capitalization than we
currently expect.

"We could also lower the ratings if we concluded that the bank's
franchise had deteriorated as a result of heightened reputation
risk from litigation or sustained failure to address weaknesses in
internal risk control functions and procedures."

Upside scenario: S&P could revise the outlook to stable if it
considered that economic and operating conditions had stabilized
and it anticipated limited risks to its base-case expectations.

  Ratings Score Snapshot

  Issuer Credit Rating: BBB-/Negative/A-3
  Stand-alone credit profile: bbb-
  Anchor: bbb-
  Business Position: Adequate (0)
  Capital and Earnings: Strong (+1)
  Risk Position: Moderate (-1)
  Funding and Liquidity: Adequate and adequate (0)
  Comparable Rating Analysis: 0
  Support: 0
  ALAC Support: 0
  GRE Support: 0
  Group Support: 0
  Sovereign Support: 0
  Additional Factors: 0

ESG Credit Indicators: E-2, S-2, G-4




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

KS BANK: Declared Bankrupt by Mordovia Arbitration Court
--------------------------------------------------------
The provisional administration to manage the credit institution
Joint Stock Company KS BANK or JSC KS BANK (hereinafter, the Bank)
in the course of its inspection of the Bank established the
existence of signs suggestive of assets withdrawal through lending
to borrowers with dubious solvency or knowingly unable to fulfil
their obligations, as a result of which the incurred damage
exceeded RUR922.4 million.

According to the assessment by the provisional administration, the
value of the Bank's assets is insufficient to fulfil its
obligations to creditors.

On November 8, 2021, the Arbitration Court of the Republic of
Mordovia recognised the Bank as insolvent (bankrupt).

As the Bank of Russia reasonably presumes that the Bank's officials
and owners were engaged in financial operations suggestive of
criminal offence, the Bank of Russia submitted relevant information
to the Prosecutor General's Office of the Russian Federation and
the Investigative Committee of the Ministry of Internal Affairs of
the Russian Federation for consideration and procedural
decision-making.

The provisional administration to manage the credit institution was
appointed by virtue of Bank of Russia Order No. OD-1650, dated
August 6, 2021, from August 6, 2021.




===========
S E R B I A
===========

JUGOBANKA: Office Building to be Auctioned on Feb. 17
-----------------------------------------------------
Branislav Urosevic at SeeNews reports that Serbia's Deposit
Insurance Agency said it is offering for sale an office building of
insolvent bank Jugobanka in Cacak, in the central part of the
country, for EUR837,000 (US$950,000).

The agency said in a statement on Jan. 21 four-fifths, or 1,621
sqm, of the 2,027 sqm office space located in downtown Cacak
belongs to the bankrupt lender, SeeNews relates.

According to SeeNews, the tender documentation showed the remaining
part of the building belongs to Belgrade-based commercial bank Mobi
Banka, which has signed a contract with Jugobanka agreeing to the
joint sale.

The call for bids in the public auction will close on Feb. 17,
SeeNews discloses.

Jugobanka was declared bankrupt in 2002, along with Beobanka,
Investbanka and Beogradska Banka, as part of efforts to restructure
Serbia's banking sector after the fall of former president Slobodan
Milosevic, SeeNews recounts.


[*] Metito Buys Bankrupt Water Treatment Plan for RSD417MM
----------------------------------------------------------
Branislav Urosevic at SeeNews reports that United Arab
Emirates-based company Metito bought the bankrupt water treatment
plant in Serbia's northern city of Zrenjanin for RSD417 million
(EUR3.55 million), local media reported on Jan. 19.

According to SeeNews, the buyer of the bankrupt water facility was
Pannonian Water, local news portal Voice quoted the commercial
court enforcement officer in charge of the case, Dragan Nikolic, as
saying.

Trade Registry data showed for its part, Pannonian Water is fully
owned by Metito's Serbia-specific investment and operation
platform, EmSerb Water (ESW), SeeNews notes.

Two Israel-based firms -- Rimon Ltd and Avital Group -- hold a 65%
stake in it which they bought through a credit provided by
Serbia-based lender Erste Banka, SeeNews relays, citing the water
plant's website.

Mr. Nikolic has previously told Radio Free Europe that the
estimated value of the facility is RSD834.7 million, SeeNews
discloses.




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

IM ANDBANK 1: Moody's Assigns Ba2 Rating to EUR5.2MM Class C Notes
------------------------------------------------------------------
Moody's Investors Service has assigned the following definitive
ratings to Notes issued by IM AndBank RMBS 1, FT:

EUR138.8M Class A Notes due June 2056, Assigned Aa2 (sf)

EUR6.0M Class B Notes due June 2056, Assigned Baa3 (sf)

EUR5.2M Class C Notes due June 2056, Assigned Ba2 (sf)

Moody's has not rated the EUR 6.8M Class Z Notes due June 2056.

On Nov 4, 2021 Moody's withdrew the provisional ratings.

IM AndBank RMBS 1, FT is a one year revolving cash securitisation
with one year ramp-up period consisting of performing residential
mortgage loans extended to borrowers mainly located in Spain,
originated by AndBank Espana S.A.U. ("AndBank", NR).

RATINGS RATIONALE

The definitive ratings take into account the credit quality of the
underlying mortgage loan pool, from which Moody's determined the
Moody's Individual Loan Analysis Credit Enhancement ("MILAN CE")
assumption and the portfolio's expected loss.

The key drivers for the portfolio's expected loss of 1.3% are: (i)
analysis of the static and dynamic information on delinquencies and
recoveries received from originator; (ii) benchmarking with
comparable transactions in the Spanish RMBS market; and (iii)
current economic environment in Spain.

The key drivers for the 8.0% MILAN CE number, which is below the
average for Spanish RMBS, are: (i) the low current weighted-average
loan-to-value ("LTV") ratio of 52.7% calculated taking into account
the original full property valuations; (ii) the positive selection
of the pool with 100% of the loans having never been in arrears
(more than 31 days) since the loans were granted; (iii) no
restructured loans in the portfolio; (iv) no loans in payment
holiday due to COVID-19 moratorium; and (v) only 6.15% of the
borrowers in the pool, who are not Spanish nationals and 2.15%
non-Spanish residents.

Moody's considers that the deal has the following credit strength,
a reserve fund, which will be funded at closing and will be equal
to 4.5% of the original balance of the Notes A to C. The reserve
fund covers potential shortfalls in the Notes' interest during
transaction's life and principal at maturity of the Notes.

Moody's notes that the transaction features some credit weaknesses
such as: (i) small originator with historical data that does not
cover a full economic cycle; (ii) limited spread in the
transaction; (iii) no interest rate swap in place to cover floating
interest rate risk; and (iv) the transaction has a 1-year revolving
period during which additional portfolios may be sold to the
special-purpose vehicle, during the first year of the revolving
period the portfolio and the outstanding Notes' balances of
existing Notes can increase up to EUR300 million, partially
mitigated by early amortisation triggers, substitution criteria
both on individual loan and portfolio level and the eligibility
criteria for the portfolio. Moody's has taken this into account in
its quantitative analysis.

The pool has a low seasoning of 1.5 years, with all loans in the
pool having been originated after 2018. WA current LTV of the pool
is 52.7% (based on the original valuation when the loan was
granted), around 47.2% of the loans are concentrated in the Madrid
region and 25.6% in Catalonia. The weighted average interest rate
is 0.76%.

AndBank will continue servicing the securitised loans. Even if
there is no back-up servicer in the transaction, the management
company acts as back-up servicer facilitator and independent cash
manager.

The reserve fund provides liquidity support and is sufficient to
cover 27 months of interest payments and senior expenses.

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 that may lead to an upgrade of the ratings include a
significantly better-than-expected performance of the pool combined
with an increase of the Spanish Local Currency Country Risk
Ceiling.

Factors that may cause a downgrade of the ratings include
significantly different loss assumptions compared with Moody's
expectations at closing due to either: (i) a change in economic
conditions from Moody's central forecast scenario; or (ii)
idiosyncratic performance factors that would lead to rating
actions. Finally, a change in Spain's sovereign risk may also
result in subsequent rating actions on the Notes.




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

AMIGO PLC: Reveals More Details of New Business Scheme
------------------------------------------------------
Darren Slade at Daily Echo reports that loan company Amigo has
revealed more details of a bid to save the business and its 200
Bournemouth jobs -- and warned the alternative is collapse.

According to Daily Echo, the guarantor lender is hoping to win
approval from creditors and the High Court for a scheme to limit
compensation to borrowers with mis-selling complaints.

Its new business scheme would see GBP97 million allocated from
Amigo's resources to compensate borrowers -- with the possibility
of an extra payment if the existing loan book generates a better
return than currently expected, Daily Echo discloses.

It intends to generate GBP15 million for the compensation scheme
and future lending by raising new capital within a year of its new
business scheme being approved, Daily Echo states.

A rights issue would give existing shareholders the chance to buy
the new shares, Daily Echo notes.  Existing shareholders would own
no more than five per cent of the business unless they bought more,
according to Daily Echo.

The company, as cited by Daily Echo, said: "If shareholders do not
approve the rights issue, the new business scheme will revert into
a wind down under which the shareholders will receive nothing in
respect of Amigo Loans Ltd."

Chief executive Gary Jennison, who leads a new management team
brought in after the firm ran into trouble, said: "The board is
fully committed to providing the maximum amount of redress possible
for qualifying creditors.

"Should creditors vote for the new business scheme and the court
subsequently approve it, these provisions provide additional
protection for creditors and address certain of the concerns raised
by the court above the previous scheme.  They are necessary for
Amigo to survive and avoid insolvency."

Amigo was built on lending money at 49.9% annual percentage rate to
people with a poor credit history who could find a friend or
relative to act as guarantor, Daily Echo discloses.

It ran into conflict with regulators and has not been offering new
loans since 2020, Daily Echo recounts.

If the company can be saved, Amigo says it would pursue a new
business model, with payment holidays and reduced rates for good
payers, Daily Echo states.


EUROSAIL PLC 2006-1: Fitch Affirms BB- Rating on Class E Notes
--------------------------------------------------------------
Fitch Ratings has affirmed Eurosail 2006-1 PLC's (ES06-1) notes and
removed the class E notes from Rating Watch Positive (RWP).

      DEBT                  RATING              PRIOR
      ----                  ------           -----
Eurosail 2006-1 Plc

Class B1a 29880BAG4    LT AAAsf  Affirmed    AAAsf
Class B1c 29880BAJ8    LT AAAsf  Affirmed    AAAsf
Class C1a 29880BAK5    LT AA+sf  Affirmed    AA+sf
Class C1c 29880BAM1    LT AA+sf  Affirmed    AA+sf
Class D1a 29880BAN9    LT BBBsf  Affirmed    BBBsf
Class D1c 29880BAQ2    LT BBBsf  Affirmed    BBBsf
Class E XS0253576630   LT BB-sf  Affirmed    BB-sf

TRANSACTION SUMMARY

The transaction comprises UK non-conforming owner-occupied and
buy-to-let (BTL) mortgage loans originated by Southern Pacific
Mortgages Limited and Southern Pacific Personal Loans Limited
(formerly wholly owned subsidiaries of Lehman Brothers).

KEY RATING DRIVERS

High Late-Stage Arrears

Total arrears in ES06-1 have stagnated since the last rating action
July 2021 at 25% of the pool, while late-stage arrears have also
stabilised at a material 16.3% of the total pool balance. The high
level of late-stage arrears is partially due to the moratorium on
possessions implemented during the pandemic. The moratorium
restricted servicers' ability to proceed with possession orders,
leading to increased late-stage arrears, which would otherwise be
foreclosed.

Increased Senior Fees

A detailed analysis of senior fees reported in the investor reports
indicates ES06-1 has been incurring an increased level of senior
fees for an extended period driven by professional services
expenses. If this trend continues Fitch may adjust its fixed-fee
assumptions used for analysing the transaction, which may adversely
affect the junior notes in the structure. As a result, Fitch has
decided to resolve the RWP on the class E notes by affirming the
rating and not taking any further action at this time.

Credit Enhancement Accumulation

Credit enhancement (CE) has increased in the transaction as it
continues to amortise sequentially due to a late-stage arrears
trigger breach. CE available for the senior notes has increased to
72.4%, from 67.8% in July 2021.

Foreclosure Frequency Macroeconomic Adjustments

Fitch applied foreclosure frequency (FF) macroeconomic adjustments
to the UK non-conforming sub-pool of the transaction because of
Fitch's expectation of temporary mortgage under-performance. With
the government's repossession ban ended, Fitch sees uncertainty
regarding borrowers' performance in the UK non-conforming mortgage
sector where many borrowers have already rolled into late-stage
arrears over recent months. Borrowers' payment ability may also be
challenged with the end of the coronavirus job retention and
self-employed income support schemes. The adjustment is 1.58x at
'Bsf' while no adjustment is applied at 'AAAsf' as assumptions are
deemed sufficiently remote at this level.

RATING SENSITIVITIES

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

-- A resurgence of the coronavirus and return to significant
    restrictions and lockdowns could result in further
    deterioration in the performance of the mortgage pool, due to
    declining economic activity.

-- Additionally, the current ratings may be sensitive to the
    transition of the notes from Libor to SONIA. For example, if
    material basis risk is introduced, the ratings may be
    negatively affected. A 15% increase in the weighted average
    foreclose frequency (WAFF) and a 15% decrease in the weighted
    average recovery rate (WARR) would result in downgrades of up
    to six notches for the junior notes in the structure.

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

-- Improving asset performance driven by declining delinquencies
    and defaults would lead to increasing CE and, potentially,
    upgrades. Fitch tested an additional rating sensitivity
    scenario by applying a decrease in the WAFF of 15% and an
    increase in the WARR of 15%, which would result in upgrades of
    the class C and D notes by 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 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.

Fitch did not undertake a review of the information provided about
the underlying asset pool ahead of the transaction's initial
closing. The subsequent performance of the transaction 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

ES 06-1 has an ESG Relevance Score of '4' for Customer Welfare -
Fair Messaging, Privacy & Data Security due to the pool exhibiting
an interest only maturity concentration of legacy non-conforming
owner occupied loans of greater than 20%, which has a negative
impact on the credit profile, and is relevant to the ratings in
conjunction with other factors.

ES06-1 has an ESG Relevance Score of '4' for Human Rights,
Community Relations, Access & Affordability due to a significant
proportion of the pool containing owner occupied loans advanced
with limited affordability checks which has a negative impact on
the credit profile, and is relevant to the rating[s] 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.


MILLER HOMES: Fitch Puts 'BB-' LT IDR on Watch Negative
-------------------------------------------------------
Fitch Ratings has placed Miller Homes Group Holdings plc's
Long-Term Issuer Default Rating (IDR) of 'BB-' and senior secured
rating of 'BB+'/'RR2' on Rating Watch Negative (RWN).

The RWN follows the agreement with funds managed by Apollo Global
Management (Apollo) to acquire the company from its existing owner
Bridgepoint Group Plc (Bridgepoint). It reflects Fitch's
expectations that the recapitalisation of the company under the new
ownership structure may increase leverage levels beyond the current
downgrade rating sensitivity of funds from operations (FFO) gross
leverage of above 3.5x.

Fitch will resolve the RWN after Fitch has assessed the
post-acquisition financing structure, which may result in an
affirmation if the financial profile remains within Fitch's rating
sensitivities, or a downgrade if credit metrics exceed the negative
rating sensitivities. Fitch would also assess the company's
post-acquisition business strategy. The transaction is expected to
complete in 1Q22.

KEY RATING DRIVERS

Limited Information on Financing Structure: Funds managed by Apollo
affiliates, together with existing management, have entered into a
definitive agreement to acquire Miller Homes from the current
owner, Bridgepoint. Apollo has committed financing to complete the
acquisition and expects to redeem the existing financing before the
close of the transaction, but has not yet disclosed the acquisition
amount or the new capital structure.

Regional Homebuilder: Miller Homes is a medium-sized UK
housebuilder focused on central Scotland, northern England, the
Midlands and to a lesser extent, southern England. The company
specialises in single-family homes with an average selling price
(ASP) in 2020 of GBP261,000. The products offered are highly
standardised, although the company recently launched a product
range that allows greater personalisation of interiors.

Solid Trading Performance: Miller Homes' activity quickly rebounded
in 2021 after a subdued 2020 due to the pandemic. In 1H21, the
company reported strong business performance, with 1,910 homes
completed. This output is more than double that in the same period
of 2020 and 13% ahead of pre-pandemic 1H19. Sales in 1H21 (GBP525
million) were higher than 1H20 (142%) and 1H19 (35%) supported by
the ASP, which increased by 15% to GBP280,000 in the period.

Sales Visibility: Sales visibility is good, with the order book
standing at GBP707 million at end-1H21 (2020: GBP560 million). This
equates to over eight months of sales coverage based on the current
trading figures or around 2,525 units based on the 1H21 ASP. The
GBP17 million acquisition of Wallace Land and Investments Limited -
a regional land promoter - in May 2021 added 17,500 plots to Miller
Homes' strategic landbank, which comprised 37,802 plots at
end-1H21. Combined with the consented landbank (14,382 plots,
equivalent to 4.1 years of supply), these represent 14.9 years of
supply based on the last 12 months' completion volumes.

UK Housing Market Undersupplied: The UK housing market continues to
be under-supplied as the amount of the newly-built homes keeps
falling significantly short of the annual 300,000 units the
government expects. In the 12 months to end-March 2020, there were
243,770 newly-completed homes. Fitch expects Miller Homes to
benefit from this inherent undersupply, particularly in regions
away from London where the structural housing need is conducive to
a less volatile market. In 1H21 Help to Buy-backed reservations
reduced to 19% of the total (1H20: 38%).

Active Capital Management: Miller Homes has reshaped its capital
structure over the last four years, aided by its consistent free
cash flow generation. In 2018, the company bought back and
cancelled GBP20 million of its senior secured notes and repaid
GBP43.5 million of its intercompany loan. In July 2020, Miller
Homes issued a GBP160 million private placement with the proceeds
partially used to redeem GBP110 million floating notes. This
allowed the company to extend its debt maturities, with the GBP404
million fixed notes maturing in 2024 and GBP51 million floating
notes maturing in 2023. In March 2021, the company repaid GBP100
million of its shareholders loan (1H21: GBP49 million
outstanding).

DERIVATION SUMMARY

Miller Homes' focus outside London and the south-east differs from
that of The Berkeley Group Holdings plc (BBB-/Stable). Miller
Homes' outputs are typically single-family homes with an ASP
similar to England's ASP (GBP267,000 in 2020). Berkeley's homes are
often part of large conurbations that accommodate neighbourhoods of
1,000 to 5,000 units, with a selling price averaging more than
GBP700,000 in the past four years, the highest among its UK peers.
In their last respective fiscal years, the two UK housebuilders had
similar volumes (Miller Homes: 2,620 units; Berkeley: 2,825), well
below the largest UK housebuilders, which deliver more than 15,000
units a year.

The Spanish housebuilders AEDAS Homes, S.A. and Via Celere
Desarrollos Inmobiliarios, S.A. (both BB-/Stable) focus on the most
affluent areas within their domestic market and the products
offered (apartments of large condominiums) share similarities with
Berkeley. Irrespective of the geographic focus and the product
range, Spanish and UK-based housebuilders' funding requirements are
comparable, with both relying only on a small purchaser deposit
(5%-10% for the UK and up to 20% for Spain) to fund land and
development costs in the period up to completion.

Miller Homes' financial profile well compares with that of Aedas
and Via Celere. The two Spanish housebuilders launched their
inaugural notes issue in 2021, while Miller Homes issued its
inaugural senior notes in 2017 (GBP425 million in October, recently
tapped for an additional GBP50 million). The deleveraging paths of
the three companies were slightly hampered by the pandemic, and for
some entities recent M&A activity, but Fitch expects FFO gross
leverage to be restored within its guidance in the next 12-18
months for all three entities.

KEY ASSUMPTIONS

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

-- Top-line growth mainly driven by volumes, increasing to over
    4,000 units by 2023, with a selling price averaging GBP273,000
    over the next four years;

-- Net land and development spend included in working capital
    totalling GBP400 million in 2021-2024;

-- Existing debt (GBP455 million) refinanced at maturity;

-- Fitch assumes that the remaining GBP49 million shareholder
    loan is repaid in 2022;

-- No dividends distribution in the next four years.

RATING SENSITIVITIES

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

-- FFO gross leverage above 3.5x on a sustained basis;

-- Order book/development work in progress materially below 100%
    on a sustained basis, indicating speculative development;

-- Distributions to shareholders that would lead to a material
    reduction in cash flow generation and slower deleveraging;

-- Land bank/gross debt ratio below 1.0x.

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

-- The ratings are on RWN due to the planned acquisition. We
    therefore do not expect an upgrade.

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

Good Liquidity: At 1H21, Miller Homes' liquidity was ample. It
comprised GBP227 million cash and a GBP151.5 million undrawn
revolving credit facility, whose size was increased by GBP21.5
million in 2020. At end-June 2021, gross debt comprised two senior
secured notes totalling GBP455 million, maturing in October 2023
(GBP51 million) and October 2024 (GBP404 million).

ISSUER PROFILE

Miller Homes is one of the largest privately-owned housebuilders in
the UK with a strong regional focus through three divisions:
midlands & south, north, and Scotland.

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.


TALKTALK TELECOM: Fitch Lowers LT IDR to 'B+', Outlook Negative
---------------------------------------------------------------
Fitch Ratings has downgraded TalkTalk Telecom Group Plc's Long-Term
Issuer Default Rating (IDR) to 'B+' from 'BB-', downgraded the
instrument rating to 'B+'/'RR4' from 'BB-'/'RR4' and reclassified
the instrument from senior unsecured to senior secured. The Outlook
is Negative.

The downgrade reflects the attrition in TalkTalk's customer base,
weak revenue trends and Fitch's expectations that financial
leverage will remain higher than the 'BB-' downgrade threshold for
several years. The rating case envisages funds from operations
(FFO) net financial leverage peaking at 5.0x in the financial year
ending February 2022 and only falling below 4.5x (the downgrade
threshold at 'B+'/'B') by FY24.

The Negative Outlook captures ongoing rating pressure. Fitch allows
up to two years following a major corporate event (in this case,
the company's 2021 take-private) for financial metrics to settle at
normalised levels. However, Fitch forecasts TalkTalk's leverage
will remain higher than the 'B+' threshold for an extended period.
Delivery of all or some of management's growth ambition, which is
considerably higher than Fitch's base case, would allow the
financial profile to align with the rating more quickly.

KEY RATING DRIVERS

Downgrade Threshold Breached: The downgrade reflects Fitch's
revised rating case, which envisages FFO net leverage of 5.0x in
2022, falling to 4.4x by 2024. This represents a material breach of
the 3.5x 'BB-' downgrade threshold and only meets the 4.5x 'B+'
threshold by 2024. The Negative Outlook reflects execution risk in
reversing the declining subscriber base and maintaining financial
discipline.

Fixed-line Only Reseller: TalkTalk is a fixed-line only
value-oriented telecom reseller. It relies on wholesale access to
BT Group's Openreach network as well as to fibre networks such as
City Fibre. Its (Fitch-defined) EBITDA margins are in the low
double-digit range, materially less than half those typically
reported by network operators. This provides a lower tolerance for
off-plan performance before rating pressure is likely. Nonetheless,
increasing competition in the UK wholesale market provides scope
for more competitive wholesale tariffs and greater access to full
fibre to the home (FTTH) network access.

Limited Growth Market: Like most European telecom markets, the UK
is a mature and flat-low growth market depending on the market
segment an operator/reseller is participating in. Ofcom, the UK
market regulator, reported overall market revenues of GBP31.5
billion in 2020 (its most recent full year data), which was a
decline of 1.6%. However, retail fixed line revenues of GBP14
billion were ahead 4.5% in that year, suggesting that TalkTalk is
positioned in a growth part of the market. Ofcom data confirms UK
broadband subscribers continue to grow, with the market recording
year-on-year subscriber growth of 1.6% in 2Q21.

Competitive Market, Contracting Share: The UK is a competitive
market, with the fixed line segment dominated by incumbent BT and
Virgin Media O2. Both offer fixed and mobile and drive convergence.
Vodafone and Sky both have broadband offers and provide fully
convergent services. Fitch recognises the opportunity for
TalkTalk's fixed-only value offer, but its retail customer share
has consistently fallen, to around 10% in 2020 from close to 16% in
2013.

Fixed-Mobile Convergence: At the network level, market
consolidation continues, most recently with the combination of
Virgin Media and O2 UK in 1H21, a transaction that underlined a
drive for a more fixed-mobile convergent (FMC) market. Combined BT
and Virgin Media control 53% of the retail broadband market (June
2021), making their FMC and pricing strategies important for the
wider market. Over the longer term, Fitch views FMC as a potential
risk to TalkTalk's growth ambitions.

UK Broadband Pricing: Service providers have routinely pushed
through "inflation plus" price rises with minimal impact on
customer churn. This mechanism has effectively ensured a relatively
benign growth trend for fixed line communications. UK inflation at
close to 5% could change this behaviour, but there are currently no
signs of this. So long as the market model remains intact, the key
to segment and individual service provider growth is a mature and
stable customer base. Fitch believes it is important for TalkTalk
to stabilise and then reverse the customer base declines (its
customer base was down 1.8% in 1H22).

Ambitious Business Plan: As a private company, TalkTalk does not
provide public guidance, nor is there available market consensus.
Its business plan is characterised by high growth expectations.
Fitch views some growth as achievable, but this will require a
reversal of subscriber trends and rigid pricing and cost
discipline. Fitch is modelling annual revenue growth in the range
of 2.5% - 3.5% over the next three years, which requires a degree
of optimism. In comparison, BT and Virgin Media's consumer fixed
businesses are currently growing at zero and 0.6%, respectively.

Leverage and FCF: Fitch assumes the business to more comfortably
exhibit a 'B+' capital structure by FY24. In the meantime, it has
limited or no leverage headroom. A forecast pre-dividend free cash
flow (FCF) margin of around 1% by 2024; compared with a downgrade
threshold of neutral to negative further limits headroom.

Holdco PIK Outside Restricted Group: Part funding for the
take-private was provided by a PIK toggle note raised at the holdco
level, treated by Fitch as outside the restricted group and
therefore neutral to the rating (not included in Fitch's metrics).
Coupons are being paid on a cash basis providing consistent
pressure on FCF. The PIK note's existence could also exert
structural leverage pressure. The market has seen examples of
holdco PIKs being refinanced at the restricted group level. Fitch
does not assume this, but it can present re-leveraging risk as
borrowers consider optimal capital structure and refinancing
plans.

DERIVATION SUMMARY

TalkTalk is weakly positioned at the 'B+' level until it can reduce
leverage and improve discretionary capacity to manage its balance
sheet. The rating reflects a sizeable broadband customer base and
the company's positioning in the value-for-money segment within a
competitive market structure. TalkTalk's operating and FCF margins
are tangibly below the telecoms sector average, largely reflecting
its limited scale, unbundled local exchange network architecture
and dependence on regulated wholesale products for 'last-mile'
connectivity.

The company is less exposed to trends in cord 'cutting' where
consumers trade down or cancel pay-TV subscriptions in favour of
alternative internet or wireless-based services, although it
continues to incur attrition in its customer base. TalkTalk's
business model faces uncertainties in its long-term cost structure
as a result of increasing fibre-based products, evolving regulation
and a continued need to improve its structure.

Peers such as BT Group Plc (BBB/Stable) and VMED O2 UK Limited
(BB-/Stable) benefit from fully owned access infrastructure,
revenue diversification as a result of scale in multiple products
segments, such as mobile and pay-TV, and materially higher
operating and cash flow margins. Fitch considers cash flow
visibility at these peers stronger and therefore supportive of
higher relative leverage (i.e. supportive of higher leverage if
ratings were aligned).

KEY ASSUMPTIONS

-- Revenue increase of 8% in FY22 compared with audited 2021
    figure; growth of 2.5% to 3.5% in FY23-FY25;

-- Fitch defined EBITDA margin about 11% in FY22 gradually
    increasing to about 13% in FY25;

-- Capex-to-sales ratio of around 6%-7% FY22-FY25;

-- Increase in working capital of around GBP38 million per year
    in FY22-FY25; and

-- Stable dividends of GBP34 million per year FY22-FY25.

Key Recovery Rating Assumptions:

-- The recovery analysis assumes that TalkTalk would be
    reorganised as a going-concern in bankruptcy rather than
    liquidated.

-- Fitch has assumed a 10% administrative claim.

-- The GC EBITDA estimate reflects Fitch's view of a sustainable,
    post-reorganization EBITDA level upon which Fitch bases the
    enterprise valuation.

-- TalkTalk's GC EBITDA assumption of GBP136 million reflects
    assumption of significantly deteriorated market share and non-
    realised cost-cutting plan.

-- Multiple: An EV multiple of 3.5x EBITDA is applied to the GC
    EBITDA to calculate a post-reorganisation enterprise value.
    This considered the multiple implied in the taken private
    transaction (EV of GBP1.1 billion and pre-IFRS company last 12
    months September 2020 EBITDA of GBP246 million) and
    deterioration of the business profile that would have led to
    financial distress.

-- Fitch estimates expected recoveries for senior secured debt at
    42%. This results in the senior secured debt rating of
    'B+/RR4'.

RATING SENSITIVITIES

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

-- FFO net leverage below 3.5x on a sustained basis;

-- Stabilisation of the market share and improved operational
    performance;

-- Positive FCF margin in the low single digits on a sustained
    basis.

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

-- FFO net leverage below 4.5x on a sustained basis;

-- FCF margin being consistently below 0%;

-- Further deterioration in the market share or an increase in
    competitive intensity in the UK broadband market.

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

Sufficient Liquidity: As of end February 2021, TalkTalk had GBP38
million of cash and cash equivalents (GBP11 million as of end of
August 2021) and an undrawn revolving credit facility (RCF) of
GBP309 million (of a total GBP330 million) at the end of FY21.
Fitch expects TalkTalk to generate negative FCF that could be
funded by drawing down on the RCF as it matures in November 2024
while the senior secured notes are due in 2025.

ISSUER PROFILE

TalkTalk was created in 2004 as the telecommunications division of
The Carphone Warehouse Group (CPW), a retailer of mobile phones and
related products. Through a combination of acquisitions (AOL UK and
Tiscali UK in FY07 and FY09 respectively) and organic growth,
TalkTalk established itself as an alternative 'value-for-money'
fixed line telecom operator in the UK, offering quad-play services
to consumers and business customers. In March 2021, TalkTalk was
taken private in a GBP1.1 billion deal by Toscafund Asset
Management LLP and Penta Capital LLP.

ESG CONSIDERATIONS

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



                           *********


S U B S C R I P T I O N   I N F O R M A T I O N

Troubled Company Reporter-Europe is a daily newsletter co-
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Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante,
Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman,
Editors.

Copyright 2022.  All rights reserved.  ISSN 1529-2754.

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