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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, April 5, 2022, Vol. 23, No. 62

                           Headlines



C R O A T I A

AGROKOR: Fortenova Becomes Sole Owner of Mercator


F R A N C E

ALMAVIVA DEVELOPPEMENT: Fitch Affirms 'B' LT IDR, Outlook Stable
COMPACT BIDCO: Moody's Affirms 'B2' CFR, Alters Outlook to Negative
DERICHEBOURG SA: Fitch Raises LT IDR to 'BB+', Outlook Stable


G R E E C E

EUROBANK SA: Moody's Ups LT Deposit Rating to Ba3, Outlook Positive


I R E L A N D

DRYDEN 91 2021: Moody's Assigns (P)B3 Rating to EUR14.25MM F Notes
OTRANTO PARK: Moody's Assigns B3 Rating to EUR12.1MM Cl. F Notes
SOUND POINT VIII: Moody's Assigns B3 Rating to EUR14.5MM F Notes
TRINITAS EURO II: Fitch Gives B-(EXP) Rating to F-R Notes


I T A L Y

4MORI SARDEGNA: DBRS Lowers Class B Notes Rating to B(low)
BELVEDERE SPV: Moody's Cuts Rating on EUR320MM Cl. A Notes to Ba3
MAIOR SPV: DBRS Lowers Class A Notes Rating to BB, Trend Stable
SAIPEM SPA: S&P Raises ICR to 'BB' on Planned Capital Increase


R U S S I A

TATTELECOM PJSC: Fitch Affirms Then Withdraws 'CC' LT IDR
[*] RUSSIA: U.S. Set to Announce New Sanctions This Week
[*] S&P Lowers LT ICR on 42 Russian Corporate Entities to 'CC'


S P A I N

CAIXABANK RMBS 2: DBRS Confirms BB(high) Rating on Class B Notes


S W E D E N

UNIQUE BIDCO: Fitch Gives Final 'B' LT IDR, Outlook Stable


T U R K E Y

TURKEY: S&P Cuts LT LC Sovereign Credit Rating to 'B+', Outlook Neg
TURKIYE CUMHURIYETI: Fitch Affirms 'B' LT Foreign Currency IDR
TURKIYE HALK: Fitch Cuts Foreign Curr. IDR to 'B-', On Watch Neg.
TURKIYE VAKIFLAR: Fitch Affirms 'B' Foreign Curr. IDR, Outlook Neg.


U N I T E D   K I N G D O M

CALEDONIAN MODULAR: JRL Group Buys Business, 200 Jobs Saved
DERBY COUNTY FOOTBALL: Council Tries to Help Find Buyer for Stadium
DURHAM MORTGAGES: DBRS Confirms B(low) Rating on Class F Notes
GEMGARTO 2018-1: DBRS Confirms BB(high) Rating on Class E Notes
GREENSILL CAPITAL: Accused of Fraud by Tokio Marine

LERNEN BIDCO: Fitch Gives 'B-' FirstTime LT IDR, Outlook Positive
SAN LORENZO: Owed GBP1.5 MM to Creditors at Time of Collapse

                           - - - - -


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C R O A T I A
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AGROKOR: Fortenova Becomes Sole Owner of Mercator
-------------------------------------------------
Annie Tsoneva at SeeNews reports that Croatia's Fortenova, the
successor to the collapsed food-to-retail concern Agrokor, said on
April 4 it has become the sole owner of Slovenian retailer Mercator
after squeezing out minority shareholders in a EUR22.4 million deal
(US$25 million) deal.

Fortenova, Croatia's largest privately-owned company, acquired the
remaining 621,251 shares of Mercator it did not own in a
transaction held on April 1, it said in a statement, SeeNews
relates.

"With this last transaction we have completed the acquisition
process that started back in 2014," SeeNews quotes Fabris Perusko,
Fortenova Group's chief executive officer as saying in a statement.
"It was a long-lasting and challenging process, with lots of
intermediate legal and financial steps that were all leading to one
and the same goal -- forming the leading regional grocery retail
chain."

Mercator is the leading grocery retailer in Slovenia, with
significant market shares in Serbia and Montenegro.  Fortenova's
supermarket chain Konzum is the leading grocery retail chain in
Croatia, whilst Konzum and Mercator have a significant combined
market share in Bosnia and Herzegovina.

Mercator was part of the Agrokor group from 2014 until April 2019,
when all Agrokor assets except Mercator were transferred to
Fortenova under a settlement agreement with Agrokor's creditors,
SeeNews discloses.  

Agrokor, which used to employ some 60,000 people in the region, has
been undergoing restructuring led by a court-appointed crisis
manager under Croatia's special law on companies of systemic
importance passed in April 2017 with the aim of shielding the
country's economy from big corporate bankruptcies, SeeNews
recounts.




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F R A N C E
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ALMAVIVA DEVELOPPEMENT: Fitch Affirms 'B' LT IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed Almaviva Developpement's (Almaviva)
Long-Term Issuer Default Rating (IDR) at 'B'. The Outlook is
Stable. Fitch has also affirmed Almaviva's senior secured debt at
'B+' with a Recovery Rating of 'RR3'.

Almaviva's 'B' IDR reflects its regionally focused medium-sized
operations and a high leverage profile, with total debt/EBITDA
projected to remain at around 5.0x. This is counterbalanced by a
supportive regulatory framework with high barriers to entry,
reflected in solid profitability for a hospital operator.

The Stable Outlook reflects Fitch's expectations that Almaviva will
maintain its leading local market positions with steady operating
performance and sustained positive free cash flow (FCF) mitigating
its high financial leverage.

Almaviva directly owns the hospital operator Almaviva Sante, while
Almaviva's real estate is owned and managed by Almaviva Patrimoine
(the PropCo). Almaviva and the PropCo are sister companies directly
owned by the acquisition vehicle, Almaviva Holding.

KEY RATING DRIVERS

Well-Positioned Regional Operations: Almaviva's medium-sized
operations are well-positioned in demographically and economically
attractive regions of France, although with a smaller nationwide
presence. It has high barriers to entry due to the regulated sector
and high levels of technical and investment expertise.

Almaviva's focused regional approach, dense hospital network,
integrated service offering and extended end-to-end patient
hospital care ensure attraction of patients and recruitment of
medical practitioners. These factors also help realise scale-driven
efficiencies and build stronger relationships with local health
authorities.

Supportive Regulation: Almaviva operates in a supportive and stable
regulatory environment in France, with private providers critical
for meeting national hospital demand and service quality. The
French government is committed to adequate sector funding,
including the availability of additional funding also to the
private sector, and to a positive tariff outlook based on a
three-year agreement signed in February 2020 with growing
importance of quality-based KPIs. This increases business
visibility and benefits market constituents including private
operators.

Stable Local Market Position: Almaviva is exposed to open local
competition with private- and public-sector constituents, where
competitive strengths are based on quality of care, treatment
specialties, and the ability to recruit and retain best-in-class
medical practitioners and to make investments in technical
equipment and hospital facilities. Almaviva's local market position
has been stable since 2016, indicating its ability to maintain a
competitive edge, although market share changes are also partly
attributable to recent sector consolidation by private hospital
groups.

Limited Scope for Profitability Improvement: Fitch views Almaviva's
EBITDA margins of 13%-14% as high for the sector, particularly
compared with that of private French operators or larger European
private hospital chains such as Fresenius SE & Co. KGaA's hospital
group Helios in Germany and Quironsalud in Spain. Given
personnel-intensive operations and a high share of outsourced or
externally acquired products and services tied to business volumes,
Fitch sees limited headroom for further structural profitability
improvements. Fitch views effective cost management without
compromising service standards as an essential competitive
differentiation and as critical as a stable regulatory framework.

Sustained Positive FCF: Fitch's rating case assumes sustained
moderate but positive FCF generation from 2022 at about 4% of
sales, which supports the 'B' IDR. Persistently negative FCF would
signal higher operating risks and could put the ratings under
pressure. Almaviva's FCF generation has been volatile, disrupted by
various acquisition-related charges, pandemic-related cash
movements and bouts of capital intensity for equipment, services
roll-out or real-estate development.

High but Sustainable Leverage: Fitch projects total debt/EBITDA
will remain high at 5.0x until 2025 due to tight organic EBITDA
expansion. Leverage is higher on a funds from operations (FFO)
basis with FFO adjusted gross leverage remaining above 6.5x by
2025. The high indebtedness is mitigated by Almaviva's defensive
operating risk profile. Fitch estimates that as the business
continues to make smaller bolt-on acquisitions, any organic
deleveraging achieved on the back of economies of scale will be
used to fund additional M&A.

M&A to Continue: Fitch's rating assessment assumes that the French
private hospital market will continue to offer attractive
acquisition opportunities, although the pace of acquisitions has
slowed as the bulk of small and medium-sized acquisitions in the
regions have already been made by leading groups, with four
operators controlling over 60% of French private hospital capacity.
Fitch factors in smaller individual clinic additions in Almaviva's
core or adjacent regions, to the extent these can accommodated by
Almaviva's internal cash flows and its sponsor's equity
co-founding, with little headroom for debt-funded M&A.

DERIVATION SUMMARY

Fitch rates Almaviva under the framework of the ratings navigator
for healthcare providers. The sector peers tend to cluster in
'B'/'BB' range, driven by the traits of their respective regulatory
frameworks influencing the quality of funding and government
healthcare policies, as well as by companies' operating profiles
including scale, degree of service and geographic diversification,
and patient and payor mix. Many sector constituents pursue
debt-funded M&A strategies, given the importance of scale and
limited room for organic return maximisation.

In this context, Almaviva's 'B' IDR reflects its medium-sized
regional operations with lower business scale and narrow geographic
diversification against that of much larger Fitch-rated US-based
hospital operators such as HCA Healthcare, Inc. (BB+/Stable), Tenet
Healthcare Corp. (B+/Stable) and Community Health Systems, Inc.
(CHS; B-/Stable). The quality of US regulation with a complex,
politicised and unpredictable environment, varying patient/payor
mix and Medicare/Medicaid payment policies for individual service
lines weigh heavily on their ratings.

Among its European peers, Fitch views the French regulatory regime
as more beneficial for private hospital operators given the
freedom-of-choice principle, mitigating Almaviva's narrow
geographic focus. The Finnish provider of healthcare and social
services, Mehilainen Yhtyma Oy (B/Stable), is exposed to more
restrictions, particularly based on the recently amended healthcare
reform limiting the participation of private healthcare operators
in certain public-pay services.

All 'B' healthcare service providers show weak credit metrics
expressed in highly leveraged balance sheets following a history of
debt-funded acquisitions, with FFO adjusted gross leverage of
7.0x-8.0x and tight FFO fixed-charge coverage of 1.5x-2.0x.

Given the proximity of hospital services to lab-testing service
companies, which Fitch also regards as social infrastructure
assets, and which are subject to a similar triennial tariff
agreement in France, Fitch has compared Almaviva's 'B' rating with
Laboratoire Eimer Selas (Biogroup; B/Stable) and Inovie Group
(B/Stable). Both lab-testing companies have higher leverage of
8.0x, given their stronger operating and cash flow margins and
their non-cyclical revenue pattern with high visibility due to
sector regulation. Such features justify a 0.5x higher leverage
tolerance for their 'B' IDRs compared with Almaviva's.

KEY ASSUMPTIONS

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

-- Organic sales growth of 1%-1.2% from 2022;

-- EBITDA margin around 13.1%-13.3%, reflecting inflation and
    high personnel costs;

-- 2021 and 2022 sales reflect the Maymard, Groupe Floreal and La
    Casamance acquisitions, and 2022 and 2023 sales growth reflect
    the transfer of CIPM's, Turin's and Les Charmilles' operating
    assets to Almaviva from PropCo;

-- Capex at 8% of sales in 2022, followed by 4.5% for the next
    three years;

-- EUR20 million of M&A per year from 2023;

-- No dividends.

KEY RECOVERY RATING ASSUMPTIONS

The recovery analysis assumes that Almaviva would be reorganised as
a going-concern (GC) in bankruptcy rather than liquidated, given
the company's main asset is embedded in its brand and its
established position as one of the leading private hospital
operators.

Fitch has assumed a 10% administrative claim.

Fitch estimates Almaviva's GC EBITDA at around EUR50 million, which
includes pro-forma adjustments for cash flows added via acquisition
and expected asset transfers between Almaviva and the PropCo
between now and 2023. The GC EBITDA is based on a stressed scenario
reflecting adverse regulatory changes, or the company's inability
to manage costs or retain medical practitioners leading to
deteriorating quality of care.

An enterprise value (EV)/EBITDA multiple of 6.0x is applied to the
GC EBITDA to calculate a post-reorganisation EV. The choice of this
multiple is based on precedent M&A EV/EBITDA for peers of 10x-15x,
with recent activity at the upper end, and is in line with European
sector peers' multiples

The multiple is lower than Mehilainen Yhtyma Oy's 6.5x, given the
latter's national leadership in Finland with increasing
diversification abroad, broader diversification across healthcare
and social care service lines and larger scale, whereas its
regulatory regime is less supportive for private sector operators
in Finland.

After deducting 10% for administrative claims, Fitch's waterfall
analysis generates a ranked recovery for Almaviva's senior secured
term loan B (TLB) in the 'RR3' category, leading to a 'B+'
instrument rating, which includes the pari-passu ranking revolving
credit facility RCF of EUR80 million that Fitch assumes will be
fully drawn prior to distress. The senior secured TLB and RCF rank
after Almaviva's structurally super senior bank loans of about
EUR25 million. Fitch also assumes the financial leases of EUR34
million at Almaviva level will remain available during and
post-distress and will not crystallise as a debt obligation.

The above results in a waterfall generated recovery computation
output percentage of 63% based on current metrics and assumptions
(previously 59%).

RATING SENSITIVITIES

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

-- Successful implementation of Almaviva's business plan,
    including effective cost management, leading to sustained
    EBITDAR margin growth and positive FCF after capex;

-- A more conservative financial policy reflected in total
    debt/EBITDA trending below 4.0x and total adjusted
    debt/EBITDAR below 5.0x on a sustained basis;

-- EBITDA/interest cover above 6.0x and EBITDAR/gross interest +
    rents above 2.0x.

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

-- Adverse regulatory changes or challenges in the strategy
    implementation with EBITDAR margins declining to below 20%;

-- FCF mostly break-even;

-- Total debt/EBITDA above 6.0x and total adjusted debt/EBITDAR
    above 7.0x on a sustained basis;

-- Diminishing financial flexibility reflected in EBITDA/interest
    cover weakening below 5.0x and EBITDAR/gross interest + rents
    below 1.5x.

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

Satisfactory Liquidity: Fitch regards Almaviva's liquidity as
satisfactory. After negative FCF generation in 2021 due to
refinancing and pandemic-related cash outflows, Fitch forecasts the
company will generate around EUR20 million to EUR30 million of FCF
from 2022 and be able to self-fund its medium-term capex plan
through 2025. In Fitch's liquidity analysis, Fitch has excluded
EUR20 million from cash, which Fitch deems restricted for daily
operations and therefore not available for debt service. Almaviva
has drawn EUR30 million out of the EUR80 million RCF.

The debt structure is concentrated. However, the company has
long-dated maturities with the RCF/term TLB coming due in 2027and
2028, respectively.

ESG CONSIDERATIONS

Almaviva has an ESG Relevance Score of '4' for Exposure to Social
Impact, due to its operating environment being subject to sector
regulation, as well as budgetary and pricing policies adopted by
the French government. Rising healthcare costs expose private
hospital operators to the risk of adverse regulatory changes, which
could constrain companies' ability to maintain operating
profitability and cash flows. This has a negative impact on the
credit profile and is relevant to the rating in conjunction with
other factors.

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

ISSUER PROFILE

Almaviva is the fourth-largest French private hospital group
operating 42 clinics in two French regions, Île-de-France (greater
Paris area) and PACA (Provence-Alpes-Côte d'Azur) in the
south-east.

COMPACT BIDCO: Moody's Affirms 'B2' CFR, Alters Outlook to Negative
-------------------------------------------------------------------
Moody's Investors Service has affirmed Compact Bidco BV's corporate
family rating at B2, its probability of default rating at B2-PD and
the instrument rating on its EUR300 million guaranteed senior
secured notes due 2026 at B3. Compact Bidco BV is a holding company
of the European producer of precast concrete building solutions
Consolis Group SAS (Consolis). The outlook on all ratings has been
changed to negative from stable.

"The outlook change to negative reflects on the one side weaker
than expected earnings development in 2021 as cost inflation
started to bite and on the other side a further intensification of
cost inflation paired with a weaker economic outlook and greater
uncertainty across Europe as a result of a military conflict in
Ukraine," says Vitali Morgovski, a Moody's AVP –Analyst and lead
analyst for Consolis.

RATINGS RATIONALE

Consolis demonstrated a favorable topline development in 2021
thanks to post pandemic recovery. Its revenue grew by 7% while its
order book rose by 42%. However, the increase in raw materials led
to a 14% decline in EBITDA, as adjusted by Consolis, with
especially weak margin development in the last fiscal quarter.
Moody's expects that the gross leverage (Moody's adjusted, based on
preliminary financials) at the year-end 2021 was around 6.3x,
exceeding the quantitative downgrade trigger for the existing
rating category.

Moody's assumes that the company will continue to increase its
revenues in 2022, predominantly through price increases. Though,
persistently high raw materials inflation may prevent a meaningful
recovery in its profitability margin and leverage ratio. Since
Russia's invasion of Ukraine energy prices in Europe reached new
levels and will likely remain volatile. Whereas the direct energy
costs of Consolis are insignificant, the company is exposed through
its own purchase of steel and cement, which production is highly
energy-intensive and which prices will likely continue to increase.
Though, steel prices are still well below peak levels observed in
2021 and steel is a bigger cost item compared to cement for
Consolis. Should the company not being able to manage the cost
inflation efficiently, so that its profitability and leverage
ratios improve over the coming 12-18 months, the rating will likely
be downgraded.

Furthermore, Consolis is more vulnerable to cyclical downturns as
it is mainly exposed to new-build construction. Moody's has reduced
its macroeconomic growth expectations in Europe as a result of the
military conflict in Ukraine, but still foresees it to be positive
at 2.8% and 2.2% in 2022 and 2023, respectively. At the same time,
a wide range of growth effects from the conflict are possible
depending on its duration and scope.

The company's rating is additionally constrained by its
track-record of weak free cash flow generation (as defined by
Moody's). In 2021, based on preliminary financials, Moody's
adjusted FCF was negative EUR28 million and the rating agency
expects it to remain negative in 2022. A return to positive FCF
generation is an important prerequisite for the rating outlook
stabilisation.

The rating is mainly supported by (1) its market position as a
leading provider of precast concrete solutions in Europe; (2) its
good geographic diversification with manufacturing footprint across
a number of Western and Eastern European countries, especially
focused on the Nordic Region, with some additional exposure to
Utilities in Emerging Markets; (3) flexible cost structure with a
large proportion of variable costs; (4) growing penetration of
precast concrete at cost of traditional in-situ concrete; and (5)
the low capital intensity of the business.

However, the rating is constrained by (1) the company's
vulnerability to cyclical and volatile new-build construction
activity with a substantial share of non-residential construction;
(2) high cost inflation making it difficult for the company to
improve profitability, which is at a low level; (3) limited product
diversification as a non-integrated concrete producer; (4)
relatively high industry fragmentation and competitive nature of
concrete production in Europe; and (5) limited track record of
generating positive free cash flow.

RATINGS FOR NEGATIVE OUTLOOK

The negative rating outlook reflects the risk that persistently
high cost inflation will prevent profitability recovery and
ultimately deleveraging towards 5.5x (Moody's adjusted gross debt/
EBITDA) over the coming 12-18 months.

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

Positive rating pressure could arise if:

Moody's adjusted gross leverage were to sustain below 4x;

Moody's adjusted EBIT/ Interest above 2.5x;

Sustainably positive FCF generation;

Conversely, negative rating pressure could arise if:

Moody's adjusted gross leverage above 5.5x;

Moody's adjusted EBIT/ Interest below 1.5x;

The company's liquidity profile were to weaken as a results of
negative FCF, shareholder distributions or M&A;

LIQUIDITY

The liquidity profile of Compact Bidco BV has weakened since the
LBO, but is still adequate. This is reflected in around
EUR52million of cash as of December 2021 complemented by EUR75
million undrawn super senior revolving credit facility (RCF). The
RCF with 4.5 years to maturity contains a springing covenant set at
1.4x super senior leverage ratio tested quarterly only when the
facility is more than 40% drawn. Moody's expects Consolis' free
cash flow generation in 2022 to be negative in the range of
EUR10-30 million and that its liquidity will be additionally
consumed by a cash outflow to complete the CWF disposal. The
company has agreed to contribute EUR17.3 million at the deal
closing in January 2022 and additional EUR20 million in Q4 22/ Q1
23 that will be partly funded with real estate divestments.

For the rating outlook stabilisation Moody's would expect Consolis
to maintain at least an adequate liquidity profile.

STRUCTURAL CONSIDERATION

In the loss given default (LGD) assessment for Compact Bidco BV,
Moody's ranks the EUR300 million guaranteed senior secured notes
maturing in 2026 behind the super senior EUR75 million RCF (not
rated) and trade payables. This structural subordination of senior
secured notes results in one notch lower rating of B3 compared to
the B2 CFR. Moody's assumes a standard recovery rate of 50% due to
the covenant lite package consisting of bonds and loans.

The capital structure also includes EUR50 million of PIK notes,
issued outside of the restricted group. These notes will mature
after the senior secured notes and are not guaranteed by the
restricted group. Therefore, Moody's does not include it in debt
and leverage calculations. However, PIK notes existence implies an
additional risk of potential cash leakage over time.

ESG CONSIDERATIONS

Moody's takes into account the impact of environmental, social and
governance (ESG) factors when assessing companies' credit quality.
The main environmental and social risks are not material in case of
Consolis. The company is less exposed than cement peers to
environmental risks as its production process is significantly less
energy intensive and carbon emitting. Only 5-10% of CO2-emission
comes from Consolis own manufacturing and energy consumption while
80-90% is linked to raw materials (cement) reported under indirect
emission (Scope 3).

The company is owned by the private equity firm Bain Capital. As a
result, Moody's expects its financial policy to favour shareholders
over creditors as evidenced by its higher leverage tolerance.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Building
Materials published in Septemeber 2021.

COMPANY PROFILE

Headquartered in Paris, France, Consolis is a leading European
producer of precast concrete building solutions and elements. The
company holds #1 and #2 positions across a number of European
markets including the Netherlands, Sweden, Denmark, Finland, CEE
and the Baltics region with some diversification into Emerging
Markets. In 2021, Consolis generated approximately EUR1.1 billion
of revenue from continued operations and employed around 10,500
people. The Consolis Group was created in 2007 and since 2017 is
ultimately owned by Bain Capital.

DERICHEBOURG SA: Fitch Raises LT IDR to 'BB+', Outlook Stable
-------------------------------------------------------------
Fitch Ratings has upgraded Derichebourg S.A.'s Long-Term Issuer
Default Rating (IDR) and senior unsecured ratings to 'BB+' from
'BB'. The Outlook is Stable.

The upgrade of Derichebourg reflects Fitch's downwardly revised
forecast of funds from operations (FFO) net leverage to below 2.0x
over the forecast horizon to 2025. It also factors in its leading
market position in the French metals recycling business, with
additional geographic diversification into Spain, Germany, Belgium,
Mexico, North America, its disciplined approach to maintaining
sustainable margins, strong cash flow generation and a conservative
target net debt/EBITDA of under 1x (reported).

Strong demand for ferrous scrap and base metals in the financial
year to September 2021 (FY21) and FY22 have facilitated above-trend
margins and cash flow generation. Part of these funds will be
retained for deleveraging and Fitch's forecast now indicates
Fitch-adjusted net debt of EUR540 million by FYE23, EUR100 million
less than expected last year.

KEY RATING DRIVERS

Metals Markets Remain Bullish: The lack of steel supply from Russia
and Ukraine has created opportunities for Turkish steelmakers to
deliver more volumes to Europe, which drove scrap demand and prices
to an all-time high of USD646/tonne (HMS 1/2 80:20) in March. Many
non-ferrous markets remain tight with materially higher prices for
metals such as copper or aluminium. As a result, Fitch expects
Derichebourg's gross margins this year to remain significantly
above historical averages, after an exceptional FY21 with margins
above USD100/tonne.

Conservative Financial Policies: Derichebourg is now focussed on
integrating Ecore and Lyrsa and will pursue capex to maintain
high-performing processing facilities. Management objective is to
achieve leverage over the medium- to long-term that is consistent
with its historical trend of net debt/EBITDA of under 1x (reported)
or around net debt / EBITDA of under 1.5x (Fitch-adjusted). The
group will continue to pay dividends at 30% of normalised net
income.

De-Leveraging Progressing Swiftly: Fitch now forecasts FFO net
leverage of around 2.0x at FYE22, and below this level for the
following three years, aided by mid-to-high double-digit euro
million free cash flow (FCF) per annum.

Procurement Strategy Defines Margin: Derichebourg is a price taker
in the sale of secondary raw materials. The group uses quotes from
customers or market indices to establish the maximum rates it can
pay for procurement of metal waste, defining a margin for volumes
to be processed. The sale and procurement streams are closely
coordinated within the organisation, so that commodity-price
exposure can be minimised and earnings visibility achieved.

Earnings Through the Cycle: High metals prices in FY21 and FY22
have allowed Derichebourg to expand its margins as suppliers of
metal scrap are less price-sensitive in those market conditions. In
contrast volumes dry up when metals prices fall too low, as some
suppliers opt to defer the sale of available volumes (such as
demolition waste from clearing of construction sites). Cyclical
market conditions and fixed costs of the business are key
influences over EBITDA, as evident by reported results over the
last four years.

Services Aid Diversification and Stability: The last downturn in
2020 and subsequent recovery have highlighted the cyclicality of
the metals recycling business. In turn, the services business
(cleaning and waste collection for municipal customers,
multi-service outsourcing solutions for a wide range of customers
and services linked to various waste streams) reported broadly
stable earnings during the pandemic. This reflects services
contracts' conservative risk profile, with little volume risk and
inflation pass-through for important operating cost items.

Supportive Market Fundamentals: EU regulation is promoting the
circular economy with an increasing emphasis on recycling. As a
result, Fitch views Derichebourg's business model as robust. With
recycling rates increasing over time, higher capacity utilisation
of its assets will support some earnings growth over the longer
term.

DERIVATION SUMMARY

SPIE S.A. (BB/Stable) is a business services company with
operations in (i) installing and upgrading mechanical, electrical
and heating systems, ventilation and air conditioning; (ii)
installing, upgrading, helping to operate and maintaining voice,
data and image communication systems; and (iii) technical facility
management. The fairly technical nature of services and a focus on
smaller, low-risk contracts provide some barriers to entry and cash
flow visibility. The business does not have a long order backlog,
but tends to generate a high proportion of sales from recurring
customers with high retention rates.

SPIE has an acquisitive growth strategy like many of its peers that
operate in fragmented industries. The group's leverage profile was
high for the rating in 2020 with FFO gross leverage at 7.0x, but
Fitch expects SPIE to deleverage to 5.2x in 2022 and 3.5x in 2023,
commensurate with a 'BB' rating category.

Derichebourg's municipal services, multi-services and services
linked to waste streams showed less earnings variability than SPIE
through the pandemic, but the bulk of earnings from the metals
recycling business exhibits higher cyclicality. Given
Derichebourg's conservative financial policies and more
concentrated nature of the metal recycling market with reducing
scope for major acquisitions, Fitch focuses on net leverage for
upgrade and downgrade guidelines. With forecast FFO net leverage at
or below 2.0x over the forecast horizon Derichebourg is a stronger
credit than SPIE.

KEY ASSUMPTIONS

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

-- Processed volumes in the metals-recycling business to increase
    incrementally to around 6.9mt in ferrous and 1mt in nonferrous
    by FY25 (combined for Derichebourg, Lyrsa and Ecore);

-- Gross margin per tonne to reduce towards EUR65 for ferrous and
    EUR235 for non-ferrous by FY24. This represents a
    normalisation from a peak in FY21 linked to economic recovery
    and in FY22 linked to heightened uncertainties from the
    Ukraine war together with associated supply-chain disruptions;

-- Earnings contributions from i) municipal services, ii) multi
    services and iii) services linked to waste streams to be
    broadly flat for the next four years;

-- Effective tax rate of 27% in FY22, reducing to 25% for
    subsequent years;

-- Capex in line with management guidance;

-- Dividend at around 30% of normalised net income;

-- No further debt-funded acquisitions over the next four years.

RATING SENSITIVITIES

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

-- Meaningful earnings growth from more stable income streams,
    such as public sector services, multi-services or services
    linked to waste streams.

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

-- FFO net leverage higher than 3.0x on a sustained basis;

-- FFO interest coverage below 9x;

-- Cash flow from operations less capex/total net debt under 20%
    in times of market weakness;

-- Large debt-funded acquisitions.

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

Strong Liquidity: After closing of its Ecore acquisition in
December 2021, Derichebourg had in excess of EUR400 million of cash
and cash equivalents as well as a EUR100 million undrawn, committed
revolving credit facility with maturity in March 2025 (with two
one-year extension options at lenders' discretion). The forecast
indicates that FCF will mostly cover maturities over the forecast
horizon (all existing term debt has manageable and smooth
amortisation), so that Derichebourg is funded beyond FY24.

In weaker economic conditions the group will benefit from
working-capital inflows and has the ability to preserve cash
through lower (absolute) capex and dividends (30% of normalised net
income).

ISSUER PROFILE

Derichebourg operates a dense network of 268 collection and 38
processing sites that are strategically located in industrial areas
with high scrap-disposal volumes and which are close to major
customers with demand for secondary metal resources.

The group covers the whole value chain in metals recycling from
collection to sorting to processing to refining and marketing of
scrap and non-ferrous metals.

The group also pursues business services including services linked
to waste streams, such as the waste electric and electronic
equipment and end-of-life vehicle schemes, cleaning and waste
collection for municipalities or multi-services outsourcing
solutions for a wide range of customers.

SUMMARY OF FINANCIAL ADJUSTMENTS

As per FY21:

-- EUR218.8 million of lease liabilities excluded from total debt
    for FY21;

-- EUR57.6 million of right-of-use depreciation and EUR2.4
    million interest for leasing contracts treated as operating
    expenditure, reducing EBITDA in FY21;

-- EUR268.1 million of factoring added to Fitch-adjusted debt for
    FY21; movement in factoring balance from the previous year
    reversed in working capital;

-- The EUR300 million bond issued in 2021 is included in the debt
    quantum at the notional, disregarding the issue premium.

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.



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G R E E C E
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EUROBANK SA: Moody's Ups LT Deposit Rating to Ba3, Outlook Positive
-------------------------------------------------------------------
Moody's Investors Service has upgraded the long-term deposit
ratings of National Bank of Greece S.A. and Eurobank S.A. to Ba3
from B2, Alpha Bank S.A. to B1 from B2 and Piraeus Bank S.A. to B2
from B3. The outlook on the deposit ratings for all four banks
remains positive. The rating agency has also upgraded the long-term
deposit ratings of Attica Bank S.A. ("Attica Bank") to Caa2 from
Caa3, and changed the outlook to positive from stable. In addition,
Pancreta Bank S.A.'s deposit ratings of Caa2 were affirmed, and its
outlook was also changed to positive from stable.

The rating action on Greek banks was driven by:

1) The strengthened institutional and governance conditions in the
country that have prompted Moody's to raise its Macro Profile for
Greece to Weak+ from Weak. The higher Macro Profile has exerted
upward pressure on all banks' Baseline Credit Assessments (BCA);

2) The improved asset quality and recurring profitability as of
December 2021 reported by the four largest Greek banks, on the back
of better operating and credit conditions, and continued
implementation of their transformation plans; and

3) Attica Bank's rating upgrade was mainly driven by its recent
capital increase that resulted in a higher notching based on
Moody's loss given failure (LGF) analysis.

The positive outlooks reflect the rating agency's expectation that
Greek banks will continue to improve their credit profiles over the
next 12-18 months, and be in a good position to manage any new
problem loans which may emerge as a consequence of the coronavirus
pandemic and recent inflationary pressures.

RATINGS RATIONALE

BETTER INSTITUTIONAL AND GOVERNANCE CONDITIONS REFLECTED IN
IMPROVED MACRO PROFILE FOR GREECE, EXERTING UPWARD PRESSURE ON
BANKS' BCAs

Moody's said that the country's improved institutions and
governance strength, as well as its better operating and credit
conditions have prompted it to change Greece's Macro Profile to
Weak+ from Weak.

The improved institutions and governance strength incorporates the
rating agency's assessment of fiscal as well as monetary and
macroeconomic policy effectiveness. Greece's public finances have
been put on a much more solid footing during the past several
years, with consistent and rising budget surpluses between 2016 and
2019 and primary surpluses exceeding targets set by the euro area
creditors.

The rating agency also notes the improving credit conditions in the
country, as reflected by the significant reduction of problem loans
in the banking system. According to the Bank of Greece, NPEs to
gross loans have reduced to around 13% in December 2021, from 30%
in December 2020 and a peak of almost 60% in 2015. The progressive
reduction in unemployment in recent years, which was at 12.8% in
January 2022 from a peak of 28% in July 2013, has also helped
reduce household and corporate indebtness. Domestic private-sector
debt to GDP reduced to around 60% at the end of 2021, from 117% in
2014, reflecting banks' continued deleveraging of NPEs and GDP
growth as economic conditions gradually normalise.

Accordingly, Moody's has revised its Macro Profile for Greece to
Weak+ from Weak, which forms an integral part of the rating
agency's banking scorecard and analysis, benefiting domestic banks'
overall credit profiles. The improved Macro Profile has exerted
upward pressure on all banks' Baseline Credit Assessment (BCA),
reflecting a more conducive operating environment that would likely
help banks improve their prospects for stronger financial
fundamentals going forward, Moody's said.

IMPROVED ASSET QUALITY AND RECURRING PROFITABILITY IN 2021 ENHANCE
BANKS' CREDIT PROFILES

The rating rationale for this driver is discussed for each bank
individually in the sections:

NATIONAL BANK OF GREECE S.A.

National Bank of Greece S.A.'s (NBG) long-term deposit,
counterparty risk assessment (CRA upgraded to Ba2(cr) from Ba3(cr))
and counterparty risk rating (CRR upgraded to Ba1 from Ba3)
upgrades are mainly driven by the upgrade in its BCA to b1 from b3.
The BCA upgrade by two notches was triggered by the improved macro
profile for Greece, and also by the continued improvements in the
bank's asset quality and profitability, combined with relatively
stable capitalisation and funding conditions.

The bank's BCA upgrade takes into consideration the fulfilment of
its target to achieve a single digit nonperforming exposures (NPE)
ratio, through the drastic reduction of its problem loans.
Following the completion on December 20, 2021 of its large NPE
securitisation of EUR5.7 billion under the name Frontier through
the government's asset protection scheme (HAPS), NBG was able to
achieve an NPE ratio of 7% as of December 2021 compared to 31.3% in
December 2019. This is the second lowest ratio among its local
peers, and positions the bank well to face any potential downside
risks from any new inflows of impaired loans, especially from
borrowers affected by the pandemic that received state support or
forbearance measures. The bank's rating upgrade also considers its
NPE provisioning coverage of 77.2% in December 2021, which is the
highest among all Greek banks.

NBG's lower level of NPEs has also help it enhance its recurring
profitability in recent quarters, as it reported a significant
increase in profit after tax from continued operations in 2021 at
EUR833 million from EUR590 million in 2020. This relatively strong
performance was mainly driven by lower credit impairments, stronger
core income, trading gains and reduced operating expenses. Moody's
believes that NBG has the potential to further enhance its core
earnings, through sustained new lending in 2022, higher fee income
and more containment of its loan loss provisions and operating
expenses, with the bank aiming to achieve a profit after tax over
tangible equity ratio of around 10% in the coming years from the
8.1% achieved in 2021.

Moody's said that the ratings upgrade also considers the bank's
comfortable capital position, with a reported common equity Tier 1
(CET1) ratio of 16.9% and a capital adequacy ratio (CAR) of 17.5%
in December 2021, with the fully-loaded ratios standing at 14.9%
and 15.5% respectively. The bank's CAR improves further to 19%
incorporating the sale of its subsidiary Ethniki Insurance and its
card acquiring business. The rating agency expects the bank's fully
loaded CET1 to remain at around 15% by the end of 2022, which is
comfortably above its regulatory requirements, benefiting from its
improved internal capital generation on the back of earnings
growth. Nonetheless, similar to its local peers, NBG has sizeable
deferred tax credits (DTCs) in its capital structure, which remains
a credit weakness as it will take many years for their full
amortisation.

The positive deposit rating outlook reflects the potential for
further improvements in NBG's underlying financial fundamentals,
especially in its core earnings, in the next 12-18 months, which
will exert upward pressure on its BCA. The positive outlook also
considers Moody's view that the impact of the coronavirus pandemic
on the Greek economy is unlikely to leave lasting damage, while any
negative effects on tourism from the sanctions imposed on Russia
will be limited and any inflationary pressures will be manageable
with more supportive measures recently announced by the
government.

EUROBANK S.A.

Eurobank S.A.'s ("Eurobank") deposit rating and CRA/CRR upgrade is
primarily driven by its BCA upgrade by two notches to b1 from b3
taking into account its strong financial performance and
profitability in 2021, but also the significant improvement in its
asset quality, with a NPE ratio of 6.8% in December 2021 (29% in
December 2019) and prospects to reduce this further by year-end
2022. The strong progress in reducing the stock of impaired loans
in the last two year was driven by the completion on December 20,
2021 of its EUR5.2 billion NPE securitisation (project Mexico)
through HAPS. Moody's said that the bank's negative NPE formation
in 2021 combined with its reduced annualised cost of risk and the
NPE provisioning coverage of 69.2% are also positive credit
drivers. Eurobank has almost fully cleaned up its balance sheet and
continues extending new loans (loan disbursements in Greece at
EUR7.8 billion in 2021), supporting its earnings. Any new impaired
loan inflows, especially from borrowers that benefited from
state-support programmes due to the pandemic that will come to an
end, will likely be moderated by continued efforts of the bank to
do more NPE sales and loan workouts.

Eurobank S.A.'s BCA upgrade also considers Eurobank Ergasias
Services and Holdings S.A.'s ( the holding company of Eurobank
S.A.) satisfactory financial results in 2021 with net profits at
EUR329 million, which provides a very good proxy for the operating
bank's performance. This was supported by a favourable 18.7%
increase in its net commission income in 2021 and despite a 2.1%
decrease in its net interest income on the back of the NPE sales
and some net interest margin pressure (margin decreased to 1.84% in
2021 from 2% in 2020). The group was able to achieve a satisfactory
8.2% return on tangible book value as of December 2021, from a loss
of EUR1.2 billion reported in 2020, supported also by the positive
contributions of its international operations that provide some
level of geographical diversification.

The group's reported CET1 ratio was a satisfactory 14.5% in
December 2021 and its CAR at 16.8%, while its fully loaded CET1
increased to 13.6% in December 2021 from 12% in December 2020,
suggesting that the bank has started to accumulate capital after
many years of capital consumption. Moody's also notes, similar to
other Greek banks, Eurobank's large proportion of DTCs in its
capital, which somewhat weaken its loss absorbing capacity due to
the long time it will take for their full amortisation.

The positive outlook reflects the potential for further
improvements in the bank's earnings and credit profile, and also
the upside potential for its overall financial performance stemming
from the economic and credit growth potential in Greece over the
next few years. As a result, Moody's expects these factors to exert
upward pressure on the bank's BCA and accordingly on its deposit
and debt ratings, over the next 12-18 months.

ALPHA BANK S.A.

Alpha Bank S.A.'s ("Alpha Bank") deposit rating upgrade is driven
by its BCA upgrade to b2 from b3, which reflects its substantial
progress in tackling its problem loans, with its group NPE ratio at
13% in December 2021, down from 42.5% in December 2020 mainly due
to its Galaxy securitisation (NPEs of EUR10.8 billion) which was
completed on June 22, 2021 in addition to other NPE securitisations
and sales of almost EUR7 billion. Although Alpha Bank has plans to
improve significantly its asset quality by decreasing its NPE
balance to EUR1.1 billion by the end of 2024, it has yet to achieve
its single digit NPE target and thus slightly lags behind some of
its local peers. Moody's expects Alpha Bank to report a high single
digit NPE ratio by the end of 2022, as it continues to implement
its NPE reduction plan. The bank's NPE provisioning coverage was at
47% in December 2021, which is also lower than some of its local
peers. Nonetheless, Alpha Bank was also able to reduce its
underlying/normalised (excluding the one-off impairments against
the NPE transactions) cost of risk over net loans to around 85
basis points in 2021 from 180 basis points in 2020.

Concurrently, the bank's BCA upgrade also captures its satisfactory
capital position, following its share capital increase of EUR800
million in July 2021. The operating bank's (Alpha Bank S.A.) CET1
and CAR ratios were at 13% and 15.9% respectively as of December
2021, while the holding company's (Alpha Services and Holdings
S.A.) corresponding ratios were at 13.2% and 16.1% (fully loaded
ratios of 10.9% and 13.8%). The bank plans to progressively
increase its fully-loaded CET1 ratio to around 15.1% by the end of
2024 mainly through internal capital generation. Moody's also notes
Alpha Bank's large proportion (albeit lower than the sector) of
DTCs, which represented around 62% of the bank's regulatory CET1
capital at end-December 2021 and will take a long time for their
full amortisation.

The bank's gradually improving earnings profile is also a driving
factor of the rating action, with a normalised profit after tax at
the holding company of around EUR330 million in 2021 (EUR87 million
in 2020), benefiting from new loan disbursements of EUR5.4 billion
and a 21% growth in net fee and commission income. Nonetheless,
incorporating one-off items into the holding company's income
statement, its reported loss after tax was EUR2.9 billion, mainly
due to the loss incurred from the sizeable Galaxy securitisation.
The bank aims to achieve a return on tangible equity of around 10%
by the end of 2024, compared to around 5% achieved in 2021 on a
normalised basis and by eliminating any losses incurred from
transactions and other one-off items.

The positive outlook for the bank's deposit ratings, is mainly
driven by the prospects of more upward pressure on its BCA as the
bank implements its business plan with a single digit NPE ratio and
stronger recurring profitability.

PIRAEUS BANK S.A.

Piraeus Bank S.A.'s ("Piraeus Bank" or "Piraeus") deposit and
CRA/CRR upgrades are mainly underpinned by the bank's BCA upgrade
to b3 from caa1, which takes into consideration the NPE derisking
of its balance sheet combined with its operating efficiency and new
lending that will support its core profitability. With the on-going
execution of its Sunrise plan, the bank has brought down its
absolute NPEs to EUR4.9 billion in December 2021 from EUR22.5
billion in December 2020, which translates into an NPE ratio
reduction to 13% from 45%. The bank's provisioning coverage was 41%
as of December 2021, which is lower than the average for the
sector. The BCA upgrade also considers the potential for further
asset quality improvements during 2022, through a number of
transactions targeting an NPE balance of around EUR3.4 billion and
an NPE ratio of less than 8%. According to Moody's, the bank's
track record so far provides confidence that these plans should be
successfully executed, exerting additional upward pressure on its
BCA.

The bank's BCA upgrade also considers its capital enhancing actions
in 2021 amounting in total to around EUR3 billion, including EUR1.4
billion of share capital increase in April 2021 and EUR600 million
of Additional Tier 1 (AT1) capital notes in June 2021. Moody's said
that although a big part of these new common equity capital funds
have been consumed to absorb losses from the NPE securitisations,
Piraeus Bank's capital metrics were above its regulatory
requirements but lower than its local peers. The bank's reported
CET1 was at 11.1% and its CAR at 15.8% as of December 2021,
compared to the 2021 regulatory requirements of 6.2% and 11%
respectively that are likely to increase to 9.4% and 14.3% from
2023 onwards. The intention of the bank is to maintain a CAR of
around 16% going forward through its organic capital generation,
which will be challenging in view of the bank's fully loaded CAR of
13.5% as of December 2021 (completion of the IFRS 9 phasing is in
January 2023). Similar to other Greek banks, Piraeus's
capitalisation remains vulnerable to a large proportion DTCs, which
represent a large proportion of the bank's CET1 capital and will
take a long time to be fully amortised.

Another factor driving Piraeus Bank's rating upgrade is the
favourable prospects for its underlying core profitability. The
holding company (Piraeus Financial Holdings S.A.) has shown small
decrease in net interest income (5% in 2021) on the back of the
income attrition from the NPE clean-up partially offset by
increasingly higher new loans (EUR6.5 billion in 2021),
contribution from its bond portfolio and improved funding cost. In
addition, Moody's notes the recurring operating cost containment
(-4% excluding one-off items in 2021), the significant net fee
income increase of 25% and a normalised cost of risk of 0.74%
(excluding the fees paid to the NPE servicer) that set the
foundation for Piraeus Bank to achieve a return on tangible equity
of more than 10% by the end of 2024, from a normalised 7.1% in
2021.

The bank's positive rating outlook captures potential further
improvements in its underlying financial fundamentals, especially
on its asset quality and earnings profile, benefiting from the
country's favourable economic prospects and lending opportunities
stemming from its RRF. Moody's positive rating outlook is mainly
underpinned by the upward pressure on Piraeus Bank's BCA, which
nevertheless is still positioned lower that its three local peers.

ATTICA BANK S.A.

The upgrade of Attica Bank's deposit ratings and CRR reflects the
bank's recent capital issuance of EUR240 million in December 2021,
as part of its transformation plan, which enhanced its CET1 and CAR
to pro-forma 12.2% and 15.6% respectively as of September 2021. The
higher capital metrics allow the rating agency to use the 3%
tangible common equity (TCE) over tangible banking assets (TBAs) in
its LGF analysis, which reflects the increased protection that the
rating agency expects will be afforded to depositors in a
resolution scenario. Accordingly, the bank's deposit ratings are
now positioned one notch higher than its BCA of caa3, from zero
notches above the BCA previously, while its CRR is positioned three
notches above its BCA from two notches before.

Moody's said that Attica Bank's BCA was affirmed at caa3,
underpinned by the additional capital needed in order to reduce
significantly its NPEs stock and implement its transformation plan,
but also by its weak core profitability that will take some time to
be restored through new lending. The bank's ambitious NPE reduction
plan envisions the decrease of its NPEs to less than EUR10 million
(subject to IFRS provisions) over the next 12-18 months, from
EUR702 million and 43.4% as of September 2021. The bank is
currently undergoing a due diligence process to quantify any
provisioning gap, while it also reported a net loss of EUR27
million for the first nine months of 2021. Accordingly, additional
provisions to be booked for year-end 2021 will likely lead to
another loss-making year, which would trigger the DTC law for the
second year in a row and create additional capital needs for the
bank.

Concurrently, the bank's positive rating outlook reflects the
potential clean-up of its balance sheet and improvements in its
earnings profile, benefiting from the country's favourable economic
prospects. Moody's positive rating outlook is mainly underpinned by
the upward pressure on Attica Bank's BCA, which will be driven by
the successful completion of its transformation plan, including
additional capital to be raised, which still carries some
implementation risks.

PANCRETA BANK S.A.

The affirmation of Pancreta Bank S.A.'s ("Pancreta Bank") BCA at
caa3 takes into consideration its relatively low Common Equity Tier
1 (CET1) ratio of 7.3% in September 2021, the lowest among domestic
rated banks. In addition, the bank's regulatory capital ratio is
undermined by its high Deferred Tax Assets (DTAs) of around EUR66
million, of which EUR41 million are eligible for conversion to
deferred tax credits (DTCs) under certain conditions and comprised
approximately 40% of its CET1 as of September 2021. The BCA
affirmation also considers Pancreta Bank's very-high NPE to gross
loans ratio (including performing restructured loans) of 63.5% in
September 2021. The cash provisioning coverage for these problem
loans is relatively low at 35% in September 2021, which will make
it more challenging for the bank to reduce/manage this high volume
of NPEs through securitisations or sale. Concurrently, the bank's
BCA also takes into account the need to expand and diversify its
earnings, which are highly dependent on net interest income and on
the local tourism sector, with relatively low fee income
contribution.

The affirmation of Pancreta Bank's deposit ratings, CRR and CRAs is
driven from the treatment of the bank's TLTRO funding in the rating
agency's LGF analysis. In Moody's opinion, Pancreta's extensive
usage of the TLTRO funding continues in order to take advantage of
the favorable terms offered by the ECB, and is not used for funding
its day-to-day operations. The bank has invested its TLTRO funding
in Greek Government Bonds (GGBs) in order to boost its core income,
which has inflated its balance sheet temporarily. Based on this
assumption, Moody's in its forward-looking analysis of the credit
profile of the bank has taken into account a more normalized
funding structure for the purpose of assessing its financial
metrics, as well as in applying its LGF analysis that considers
risks faced by the different debt and deposit classes across the
bank's liability waterfall.

The bank's positive rating outlook reflects the bank's plans to
raise additional capital over the next 12-18 months which will
facilitate the clean-up of its balance sheet and improvements in
its earnings profile, which is likely to be enhanced by its recent
announcement for the take-over of the HSBC operations in Greece.
Moody's positive rating outlook is mainly underpinned by the upward
pressure on Pancreta Bank's BCA, which will be driven by the
successful completion of its share capital increase and the
significant decrease of its NPE balance, a plan which continues to
carry some implementation risks. Regarding the take-over of the
HSBC operations in Greece, which has yet to obtain regulatory
approval and is likely to be completed in the second half of 2023,
the rating agency said that the details of the transaction are yet
to be announced in order to be in a position to assess the exact
impact on Pancreta Bank's credit profile.

RATING OUTLOOK

The positive outlooks reflect the rating agency's expectation that
Greek banks will continue to improve their credit profiles, and be
in a good position to manage any new problem loans as a consequence
of the coronavirus pandemic. Moody's also expects that Greek banks
will be relatively well placed to face any challenges in the
economy due to inflationary pressures caused by Russian invasion of
Ukraine, including a potential negative impact on the tourism
industry.

The ratings would be under further upward pressure in the next
12-18 months, if the banks maintain their sound capital and
liquidity, while fully implementing their transformation plans by
further reducing their problem loans and leveraging the economic
and credit growth potential of the Greek economy in the next 2-3
years. The EU's recovery and resilience facility (RRF) will likely
benefit significantly Greece's real GDP growth, which could grow by
around 3-4% on average during 2022-25, providing banks with good
lending opportunities that will support their revenues.

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

Over time, upward deposit and senior debt rating pressure could
arise for these banks following further improvements of the
country's macro-economic environment, which will underpin better
asset quality and profitability combined with stable capital
metrics comfortably above requirements.

Although unlikely over the short-to-medium term, in view of their
positive rating outlook, Greek banks' ratings could be downgraded
in the event that their transformation and NPE reduction plans
stall, resulting in no meaningful improvements in their recurring
profitability. Any potential deterioration in the operating
environment and in funding conditions from inflationary pressures
or from any escalation of geopolitical developments could also have
a negative effect on the banks' ratings.

PRINCIPAL METHODOLOGY

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

LIST OF AFFECTED RATINGS

Issuer: Alpha Services and Holdings S.A.

Upgrades:

Long-term Issuer Ratings, Upgraded to B3 from Caa1, Outlook
Remains Positive

Subordinate Regular Bond/Debenture, Upgraded to B3 from Caa1

Outlook Action:

Outlook, Remains Positive

Issuer: Alpha Bank S.A.

Upgrades:

Adjusted Baseline Credit Assessment, Upgraded to b2 from b3

Baseline Credit Assessment, Upgraded to b2 from b3

Long-term Counterparty Risk Assessment, Upgraded to Ba2(cr) from
Ba3(cr)

Long-term Counterparty Risk Ratings, Upgraded to Ba2 from Ba3

Long-term Bank Deposit Ratings, Upgraded to B1 from B2, Outlook
Remains Positive

Senior Unsecured Regular Bond/Debenture, Upgraded to B2 from B3,
Outlook Remains Positive

Affirmations:

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

Short-term Counterparty Risk Ratings, Affirmed NP

Short-term Bank Deposit Ratings, Affirmed NP

Outlook Action:

Outlook, Remains Positive

Issuer: Eurobank S.A.

Upgrades:

Adjusted Baseline Credit Assessment, Upgraded to b1 from b3

Baseline Credit Assessment, Upgraded to b1 from b3

Long-term Counterparty Risk Assessment, Upgraded to Ba2(cr) from
Ba3(cr)

Long-term Counterparty Risk Ratings, Upgraded to Ba1 from Ba3

Long-term Bank Deposit Ratings, Upgraded to Ba3 from B2, Outlook
Remains Positive

Senior Unsecured Medium-Term Note Program, Upgraded to (P)B1 from
(P)B3

Junior Senior Unsecured Medium-Term Note Program, Upgraded to
(P)B2 from (P)Caa1

Senior Unsecured Regular Bond/Debenture, Upgraded to B1 from B3,
Outlook Remains Positive

Affirmations:

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

Short-term Counterparty Risk Ratings, Affirmed NP

Short-term Bank Deposit Ratings, Affirmed NP

Outlook Action:

Outlook, Remains Positive

Issuer: National Bank of Greece S.A.

Upgrades:

Adjusted Baseline Credit Assessment, Upgraded to b1 from b3

Baseline Credit Assessment, Upgraded to b1 from b3

Long-term Counterparty Risk Assessment, Upgraded to Ba2(cr) from
Ba3(cr)

Long-term Counterparty Risk Ratings, Upgraded to Ba1 from Ba3

Long-term Bank Deposit Ratings, Upgraded to Ba3 from B2, Outlook
Remains Positive

Senior Unsecured Medium-Term Note Program, Upgraded to (P)B1 from
(P)B3

Subordinate Medium-Term Note Program, Upgraded to (P)B2 from
(P)Caa1

Subordinate Regular Bond/Debenture, Upgraded to B2 from Caa1

Senior Unsecured Regular Bond/Debenture, Upgraded to B1 from B3,
Outlook Remains Positive

Affirmations:

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

Short-term Counterparty Risk Ratings, Affirmed NP

Short-term Bank Deposit Ratings, Affirmed NP

Outlook Action:

Outlook, Remains Positive

Issuer: NBG Finance plc

Upgrades:

BACKED Senior Unsecured Medium-Term Note Program, Upgraded to
(P)B1 from (P)B3

BACKED Subordinate Medium-Term Note Program, Upgraded to (P)B2
from (P)Caa1

No Outlook Assigned

Issuer: Piraeus Financial Holdings S.A.

Upgrades:

Long-term Issuer Ratings, Upgraded to Caa1 from Caa2, Outlook
Remains Positive

Senior Unsecured Medium-Term Note Program, Upgraded to (P)Caa1
from (P)Caa2

Subordinate Medium-Term Note Program, Upgraded to (P)Caa1 from
(P)Caa2

Pref. Stock Non-cumulative, Upgraded to Caa3 (hyb) from Ca (hyb)

Subordinate Regular Bond/Debenture, Upgraded to Caa1 from Caa2

Affirmations:

Short-term Issuer Ratings, Affirmed NP

Outlook Action:

Outlook, Remains Positive

Issuer: Piraeus Bank S.A.

Upgrades:

Adjusted Baseline Credit Assessment, Upgraded to b3 from caa1

Baseline Credit Assessment, Upgraded to b3 from caa1

Long-term Counterparty Risk Assessment, Upgraded to Ba3(cr) from
B1(cr)

Long-term Counterparty Risk Ratings, Upgraded to Ba3 from B1

Long-term Bank Deposit Ratings, Upgraded to B2 from B3, Outlook
Remains Positive

Senior Unsecured Medium-Term Note Program, Upgraded to (P)B3 from
(P)Caa1

Subordinate Medium-Term Note Program, Upgraded to (P)Caa1 from
(P)Caa2

Senior Unsecured Regular Bond/Debenture, Upgraded to B3 from Caa1,
Outlook Remains Positive

Affirmations:

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

Short-term Counterparty Risk Ratings, Affirmed NP

Short-term Bank Deposit Ratings, Affirmed NP

Outlook Action:

Outlook, Remains Positive

Issuer: Pancreta Bank S.A.

Affirmations:

Adjusted Baseline Credit Assessment, Affirmed caa3

Baseline Credit Assessment, Affirmed caa3

Long-term Counterparty Risk Assessment, Affirmed B3(cr)

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

Long-term Counterparty Risk Ratings, Affirmed B3

Short-term Counterparty Risk Ratings, Affirmed NP

Long-term Bank Deposit Ratings, Affirmed Caa2, Outlook Changed To
Positive From Stable

Short-term Bank Deposit Ratings, Affirmed NP

Outlook Action:

Outlook, Changed To Positive From Stable

Issuer: Attica Bank S.A.

Upgrades:

Long-term Counterparty Risk Ratings, Upgraded to B3 from Caa1

Long-term Bank Deposit Ratings, Upgraded to Caa2 from Caa3,
Outlook Changed To Positive From Stable

Affirmations:

Adjusted Baseline Credit Assessment, Affirmed caa3

Baseline Credit Assessment, Affirmed caa3

Long-term Counterparty Risk Assessment, Affirmed B3(cr)

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

Short-term Counterparty Risk Ratings, Affirmed NP

Short-term Bank Deposit Ratings, Affirmed NP

Outlook Action:

Outlook, Changed To Positive From Stable



=============
I R E L A N D
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DRYDEN 91 2021: Moody's Assigns (P)B3 Rating to EUR14.25MM F Notes
------------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following provisional ratings to notes to be issued by Dryden 91
Euro CLO 2021 DAC (the "Issuer"):

EUR307,500,000 Class A Senior Secured Floating Rate Notes due
2035, Assigned (P)Aaa (sf)

EUR14,500,000 Class B-1 Senior Secured Floating Rate Notes due
2035, Assigned (P)Aa2 (sf)

EUR28,000,000 Class B-2 Senior Secured Fixed Rate Notes due 2035,
Assigned (P)Aa2 (sf)

EUR30,000,000 Class C Mezzanine Secured Deferrable Floating Rate
Notes due 2035, Assigned (P)A2 (sf)

EUR35,000,000 Class D Mezzanine Secured Deferrable Floating Rate
Notes due 2035, Assigned (P)Baa3 (sf)

EUR32,000,000 Class E Mezzanine Secured Deferrable Floating Rate
Notes due 2035, Assigned (P)Ba3 (sf)

EUR14,250,000 Class F Mezzanine Secured Deferrable Floating Rate
Notes due 2035, Assigned (P)B3 (sf)

RATINGS RATIONALE

The rationale for the rating is based on a consideration of the
risks associated with the CLO's portfolio and structure as
described in Moody's methodology.

The Issuer is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured obligations and up to 10%
of the portfolio may consist of senior unsecured obligations,
second-lien loans, mezzanine obligations and high yield bonds. The
portfolio is expected to be 80% ramped up as of the closing date
and to comprise of predominantly corporate loans to obligors
domiciled in Western Europe. The remainder of the portfolio will be
acquired during the five month ramp-up period in compliance with
the portfolio guidelines.

PGIM Loan Originator Manager Limited ("PGIM") will manage the CLO.
It will direct the selection, acquisition and disposition of
collateral on behalf of the Issuer and may engage in trading
activity, including discretionary trading, during the transaction's
three-year reinvestment period. Thereafter, subject to certain
restrictions, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
risk obligations or credit improved obligations.

In addition to the seven classes of notes rated by Moody's, the
Issuer will issue EUR45,900,000 of Subordinated Notes which are not
rated.

The transaction incorporates interest and par coverage tests which,
if triggered, divert interest and principal proceeds to pay down
the notes in order of seniority.

Methodology underlying the rating action:

The principal methodology used in these ratings was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
December 2021.

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

The rated notes' performance is subject to uncertainty. The notes'
performance is sensitive to the performance of the underlying
portfolio, which in turn depends on economic and credit conditions
that may change. The collateral manager's investment decisions and
management of the transaction will also affect the notes'
performance.

Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3 of
the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in December 2021.

Moody's used the following base-case modeling assumptions:

Par Amount: EUR500,000,000

Diversity Score: 49

Weighted Average Rating Factor (WARF): 3050

Weighted Average Spread (WAS): 4.05%

Weighted Average Coupon (WAC): 4.75%

Weighted Average Recovery Rate (WARR): 40.50%

Weighted Average Life (WAL): 7.20 years

OTRANTO PARK: Moody's Assigns B3 Rating to EUR12.1MM Cl. F Notes
----------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to notes issued by Otranto Park CLO
DAC (the "Issuer"):

EUR272,800,000 Class A Senior Secured Floating Rate Notes due
2035, Definitive Rating Assigned Aaa (sf)

EUR44,000,000 Class B Senior Secured Floating Rate Notes due 2035,
Definitive Rating Assigned Aa2 (sf)

EUR26,400,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2035, Definitive Rating Assigned A2 (sf)

EUR29,700,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2035, Definitive Rating Assigned Baa3 (sf)

EUR22,000,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2035, Definitive Rating Assigned Ba3 (sf)

EUR12,100,000 Class F Senior Secured Deferrable Floating Rate
Notes due 2035, Definitive Rating Assigned B3 (sf)

RATINGS RATIONALE

The rationale for the ratings is based on a consideration of the
risks associated with the CLO's portfolio and structure as
described in Moody's methodology.

The Issuer is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured obligations and up to 10%
of the portfolio may consist of senior unsecured obligations,
second-lien loans, mezzanine obligations and high yield bonds. The
portfolio is expected to be 85% ramped up as of the closing date
and comprises of predominantly corporate loans to obligors
domiciled in Western Europe. The remainder of the portfolio will be
acquired during the 6 month ramp-up period in compliance with the
portfolio guidelines.

Blackstone Ireland Limited ("Blackstone") will manage the CLO. It
will direct the selection, acquisition and disposition of
collateral on behalf of the Issuer and may engage in trading
activity, including discretionary trading, during the transaction's
4.6 year reinvestment period. Thereafter, subject to certain
restrictions, purchases are permitted using principal proceeds from
unscheduled principal payments and proceeds from sales of credit
risk obligations or credit improved obligations.

In addition to the six classes of notes rated by Moody's, the
Issuer will issue EUR35,900,000 of Subordinated Notes which are not
rated.

The transaction incorporates interest and par coverage tests which,
if triggered, divert interest and principal proceeds to pay down
the notes in order of seniority.

Methodology underlying the rating action:

The principal methodology used in these ratings was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
December 2021.

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

The rated notes' performance is subject to uncertainty. The notes'
performance is sensitive to the performance of the underlying
portfolio, which in turn depends on economic and credit conditions
that may change. The collateral manager's investment decisions and
management of the transaction will also affect the notes'
performance.

Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3 of
the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in December 2021.

Moody's used the following base-case modeling assumptions:

Par Amount: EUR440,000,000

Diversity Score: 52

Weighted Average Rating Factor (WARF): 2925

Weighted Average Spread (WAS): 3.65%

Weighted Average Coupon (WAC): 4.00%

Weighted Average Recovery Rate (WARR): 43%

Weighted Average Life (WAL): 7.5 years

SOUND POINT VIII: Moody's Assigns B3 Rating to EUR14.5MM F Notes
----------------------------------------------------------------
Moody's Investors Service announced that it has assigned the
following definitive ratings to the notes issued by Sound Point
Euro CLO VIII Funding DAC (the "Issuer"):

EUR307,500,000 Class A Senior Secured Floating Rate Notes due
2035, Definitive Rating Assigned Aaa (sf)

EUR42,500,000 Class B-1 Senior Secured Floating Rate Notes due
2035, Definitive Rating Assigned Aa2 (sf)

EUR10,000,000 Class B-2 Senior Secured Fixed Rate Notes due 2035,
Definitive Rating Assigned Aa2 (sf)

EUR32,500,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2035, Definitive Rating Assigned A2 (sf)

EUR35,000,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2035, Definitive Rating Assigned Baa3 (sf)

EUR24,000,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2035, Definitive Rating Assigned Ba3 (sf)

EUR14,500,000 Class F Senior Secured Deferrable Floating Rate
Notes due 2035, Definitive Rating Assigned B3 (sf)

RATINGS RATIONALE

The rationale for the ratings is based on a consideration of the
risks associated with the CLO's portfolio and structure as
described in Moody's methodology.

The Issuer is a managed cash flow CLO. At least 90% of the
portfolio must consist of senior secured obligations and up to 10%
of the portfolio may consist of senior unsecured loans, second-lien
loans, mezzanine obligations and high yield bonds. The portfolio is
expected to be approximately 93% ramped as of the closing date and
to comprise predominantly of corporate loans to obligors domiciled
in Western Europe. The remainder of the portfolio will be acquired
during the approximate six month ramp-up period in compliance with
the portfolio guidelines.

Sound Point CLO C-MOA, LLC, acting through its Second Management
Series ("Sound Point") will manage the CLO. It will direct the
selection, acquisition and disposition of collateral on behalf of
the Issuer and may engage in trading activity, including
discretionary trading, during the transaction's five year
reinvestment period. Thereafter, subject to certain restrictions,
purchases are permitted using principal proceeds from unscheduled
principal payments and proceeds from sales of credit risk
obligations.

In addition to the seven classes of notes rated by Moody's, the
Issuer will issue EUR1,000,000 Class Z Notes due 2035 and
EUR46,000,000 Subordinated Notes due 2035 which are not rated.

The transaction incorporates interest and par coverage tests which,
if triggered, divert interest and principal proceeds to pay down
the notes in order of seniority.

Methodology underlying the rating action:

The principal methodology used in these ratings was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
December 2021.

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

The rated notes' performance is subject to uncertainty. The notes'
performance is sensitive to the performance of the underlying
portfolio, which in turn depends on economic and credit conditions
that may change. The collateral manager's investment decisions and
management of the transaction will also affect the notes'
performance.

Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3 of
the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in December 2021.

Moody's used the following base-case modeling assumptions:

Par Amount: EUR500,000,000

Diversity Score (*): 52

Weighted Average Rating Factor (WARF): 3010

Weighted Average Spread (WAS): 3.88%

Weighted Average Coupon (WAC): 4.50%

Weighted Average Recovery Rate (WARR): 44.5%

Weighted Average Life (WAL): 8 years

TRINITAS EURO II: Fitch Gives B-(EXP) Rating to F-R Notes
---------------------------------------------------------
Fitch Ratings has assigned Trinitas Euro CLO II DAC's refinancing
notes expected ratings. The assignment of final ratings is
contingent on the receipt of final documents conforming to
information already received.

DEBT                               RATING
----                               ------
Trinitas Euro CLO II DAC

X-R                    LT AAA(EXP)sf   Expected Rating
A-R                    LT AAA(EXP)sf   Expected Rating
B-R                    LT AA(EXP)sf    Expected Rating
C-R                    LT A(EXP)sf     Expected Rating
D-R                    LT BBB-(EXP)sf  Expected Rating
E-R                    LT BB-(EXP)sf   Expected Rating
F-R                    LT B-(EXP)sf    Expected Rating
Additional Sub Notes   LT NR(EXP)sf    Expected Rating

TRANSACTION SUMMARY

Trinitas Euro CLO II DAC is a securitisation of mainly senior
secured obligations (at least 90%) with a component of senior
unsecured, mezzanine, second-lien loans and high-yield bonds. The
refinancing note proceeds will be used to redeem the outstanding
rated notes and fund a portfolio with a target par of EUR400
million.

The portfolio is actively managed by Trinitas Capital Management
Limited, LLC. The collateralised loan obligation (CLO) has a
three-year reinvestment period and a 7.5-year weighted average life
(WAL).

KEY RATING DRIVERS

Average Portfolio Credit Quality (Neutral): Fitch assesses the
average credit quality of obligors in the 'B' category. The Fitch
weighted average rating factor (WARF) of the identified portfolio
is 23.78.

High Recovery Expectations (Positive): At least 90% of the
portfolio will comprise senior secured obligations. Fitch views the
recovery prospects for these assets as more favourable than for
second-lien, unsecured and mezzanine assets. The Fitch weighted
average recovery rate (WARR) of the identified portfolio is
63.31%.

Diversified Portfolio (Positive): The indicative maximum exposure
of the 10-largest obligors for assigning the expected ratings is
25% of the portfolio balance, and fixed-rate obligations are
limited to 10%. The transaction also includes various concentration
limits, including a maximum exposure to the three-largest
Fitch-defined industries in the portfolio to 43%. These covenants
ensure that the asset portfolio will not be exposed to excessive
concentration.

Portfolio Management (Neutral): The transaction has a three-year
reinvestment period and includes reinvestment criteria similar to
those of other European transactions. Fitch's analysis is based on
a stressed-case portfolio with the aim of testing the robustness of
the transaction structure against its covenants and portfolio
guidelines.

Cash Flow Modelling (Positive): The WAL used for the transaction's
stressed-case portfolio and matrices analysis is 12 months less
than the WAL covenant, to account for structural and reinvestment
conditions post-reinvestment period, including passing the
over-collateralisation and Fitch 'CCC' limitation tests , together
with a linearly decreasing WAL covenant. In Fitch's opinion, these
conditions reduce the effective risk horizon of the portfolio
during stress periods.

RATING SENSITIVITIES

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

-- A 25% increase of the mean default rate (RDR) across all
    ratings and a 25% decrease of the recovery rate (RRR) across
    all ratings would result in downgrades of up to four notches
    across the structure.

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

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

-- A 25% reduction of the mean RDR across all ratings and a 25%
    increase in the RRR across all ratings would result in
    upgrades of no more than three notches across the structure,
    apart from the class X-R and A-R notes, which are already at
    the highest rating on Fitch's scale and cannot be upgraded.

-- After the end of the reinvestment period, upgrades may occur
    on better-than-expected portfolio credit quality and deal
    performance, leading to higher credit enhancement and excess
    spread available to cover losses in the remaining portfolio.

BEST/WORST CASE RATING SCENARIO

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

DATA ADEQUACY

Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset pool
and the transaction. Fitch has not reviewed the results of any
third-party assessment of the asset portfolio information or
conducted a review of origination files as part of its ongoing
monitoring.

The majority of the underlying assets or risk-presenting entities
have ratings or credit opinions from Fitch and/or other nationally
recognised statistical rating organisations and/or European
securities and markets authority-registered rating agencies. Fitch
has relied on the practices of the relevant groups within Fitch
and/or other rating agencies to assess the asset portfolio
information or information on the risk-presenting entities.

Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis according to its applicable rating methodologies
indicates that it is adequately reliable.



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

4MORI SARDEGNA: DBRS Lowers Class B Notes Rating to B(low)
----------------------------------------------------------
DBRS Ratings GmbH downgraded its ratings on the notes issued by
4Mori Sardegna S.r.l. (the Issuer) as follows:

-- Class A to BB (high) (sf) from BBB (low) (sf)
-- Class B to B (low) (sf) from B (sf)

DBRS Morningstar also changed the trends on both classes to Stable
from Negative.

The transaction represents the issuance of Class A, Class B, and
Class J notes (collectively, the Notes). The rating on the Class A
notes addresses the timely payment of interest and the ultimate
payment of principal. The rating on the Class B notes addresses the
ultimate payment of interest and principal on or before the legal
final maturity date. DBRS Morningstar does not rate the Class J
notes.

At issuance, the Notes were backed by a EUR 1.04 billion portfolio
by gross book value (GBV) consisting of secured and unsecured
Italian nonperforming loans (NPLs) originated by Banco di Sardegna
S.p.A.

The majority of loans in the portfolio defaulted between 2008 and
2017 and are in various stages of resolution. As of the cut-off
date, approximately 53% of the pool by GBV was secured. According
to the latest information provided by the servicer in September
2021, 50% of the pool by GBV was secured. At closing, the loan pool
mainly comprised corporate borrowers (approximately 77% by GBV)
which continues to account for approximately 76% of the GBV as of
September 2021.

The receivables are serviced by Prelios Credit Servicing S.p.A.
(Prelios or the Servicer) while Securitization Services S.p.A.
operates as backup servicer.

RATING RATIONALE

The downgrades follow a review of the transaction and are based on
the following analytical considerations:

-- Transaction performance: assessment of portfolio recoveries as
of December 31, 2021, focusing on: (1) a comparison between actual
collections and the Servicer's initial business plan forecast; (2)
the collection performance observed over recent months, including
the period following the outbreak of the Coronavirus Disease
(COVID-19); and (3) a comparison between the current performance
and DBRS Morningstar's expectations.

-- The Servicer's updated business plan as of June 2021, received
in December 2021, and the comparison with the initial collection
expectations.

-- Portfolio characteristics: loan pool composition as of
September 2021 and the evolution of its core features since
issuance.

-- Transaction liquidating structure: the order of priority
entails a fully sequential amortization of the Notes (i.e., the
Class B notes will begin to amortize following the full repayment
of the Class A notes and the Class J notes will amortize following
the repayment of the Class B notes. Additionally, interest payments
on the Class B notes become subordinated to principal payments on
the Class A notes if the cumulative collection ratio or present
value cumulative profitability ratio is lower than 90%. These
triggers have been breached since the January 2021 interest payment
date, with the actual figures at 64.95% and 110.18% as of the
January 2022 interest payment date, respectively, according to the
Servicer.

-- Liquidity support: the transaction benefits from an amortizing
cash reserve providing liquidity to the structure covering
potential interest shortfall on the Class A notes and senior fees.
The cash reserve target amount is equal to 4.9% of the sum of Class
A and Class B notes principal outstanding and is currently fully
funded.

TRANSACTION AND PERFORMANCE

According to the latest investor report from January 2022, the
outstanding principal amounts of the Class A, Class B, and Class J
notes were EUR 147.3 million, EUR 13.0 million, and EUR 8.0
million, respectively. As of the January 2022 payment date, the
balance of the Class A notes had amortized by approximately 36.5%
since issuance and the current aggregated transaction balance is
EUR 168.3 million.

As of December 2021, the transaction was performing below the
Servicer's business plan expectations. The actual cumulative gross
collections equaled EUR 118.4 million whereas the Servicer's
initial business plan estimated cumulative gross collections of EUR
194.1 million for the same period. Therefore, as of December 2021,
the transaction was underperforming by EUR 75.7 million (-39.0%)
compared with the initial business plan expectations.

At issuance, DBRS Morningstar estimated cumulative gross
collections for the same period of EUR 139.4 million at the BBB
(low) (sf) stressed scenario and EUR 155.2 million at the B (sf)
stressed scenario. Therefore, as of December 2021, the transaction
was performing below DBRS Morningstar's initial stressed
expectations.

Pursuant to the requirements set out in the receivable servicing
agreement, in December 2021, the Servicer delivered an updated
portfolio business plan.

The updated portfolio business plan, combined with the actual
cumulative gross collections of EUR 104.2 million as of June 2021,
results in a total of EUR 371.0 million, which is 7.5% lower than
the total gross disposition proceeds of EUR 401.0 million estimated
in the initial business plan and expected to be realized over a
longer period of time. The Servicer has been underperforming its
updated business plan in the past semester. Excluding actual
collections, the Servicer's expected future collections from
January 2022 account for EUR 242.8 million. The updated DBRS
Morningstar BB (high) (sf) and B (low) (sf) rating stresses assume
a haircut of 17.4% and 10.1%, respectively, to the Servicer's
executed business plans, considering future expected collections.

The final maturity date of the transaction is in January 2037.

DBRS Morningstar analyzed the transaction structure using Intex
DealMaker.

The Coronavirus Disease (COVID-19) and the resulting isolation
measures have caused an immediate economic contraction, leading in
some cases to increases in unemployment rates and income reductions
for many borrowers. DBRS Morningstar anticipates that negative
effects may continue in the coming months for many NPL
transactions. In particular, the deterioration of macroeconomic
conditions could negatively affect recoveries from NPLs and the
related real estate collaterals. The rating is based on additional
analysis to expected performance as a result of the global efforts
to contain the spread of the coronavirus. For this transaction,
DBRS Morningstar incorporated its expectation of a moderate
medium-term decline in residential property prices, but gave
partial credit to house price increases from 2023 onwards in
non-investment-grade scenarios.

Notes: All figures are in euros unless otherwise noted.


BELVEDERE SPV: Moody's Cuts Rating on EUR320MM Cl. A Notes to Ba3
-----------------------------------------------------------------
Moody's Investors Service has downgraded the rating of one note in
BELVEDERE SPV S.R.L. The rating action reflects slower than
anticipated cash-flows generated from the recovery process on the
non-performing loans (NPLs).

EUR320M Class A Notes, Downgraded to Ba3 (sf); previously on Jul
22, 2020 Downgraded to Ba1 (sf)

RATINGS RATIONALE

The rating action is prompted by slower than anticipated cash-flows
generated from the recovery process on the NPLs.

Slower than anticipated cash-flows generated from the recovery
process on the NPLs:

The portfolio is serviced by Prelios Credit Servicing S.p.A.
("PRECS"; unrated) for 64% and by Bayview Italia S.r.l. ("BVI",
unrated) for the remaining portion.

As of the end of the latest collection period (November 2021)
Cumulative Gross Collection Ratio stood at 25.49% for PRECS
portfolio and at 49.15% for BVI portfolio. Collections have been
particularly poor on the unsecured portion of the portfolio,
representing around 57% of current Gross Book Value ("GBV") mostly
served by PRECS. On an aggregate level the ratio stood at 41.5%
down from 47.9% at the time of last rating action, meaning that
collections are coming slower than anticipated in the original
Business Plans projection. Indeed, through the collection period
ending on November 2021, six collection periods since closing,
aggregate cumulative gross collections were EUR125.8 million versus
original business plans expectations of EUR303.3 million.

Collections represented around 5% of the GBV at closing. 80% of
collections were coming from judicial proceeding, while proceeds
from ReoCo activities still represent a minor portion of
collections.

Belvedere has underperformed the servicers' original expectations
since closing with the gap between actual and servicers' and
Moody's expected collections increasing.

In terms of the underlying portfolio, the GBV stood at EUR2.32
billion as of November 2021 down from EUR2.54 billion at closing.
Out of the approximately EUR218 million reduction of GBV since
closing, principal payments to Class A have been around EUR65
million. The ratio between Class A notes balance and the
outstanding gross book value of the backing portfolio (the "advance
rate"), stood at 10.96% as of December 2021, down from 11.63% as of
the last rating action. This advance rate is low compared to other
Italian NPL transactions in the same rating category.

Differently from other rated Italian NPLs transactions, Belvedere
does not benefit from GACS guarantee and Class B interests are
always junior to Class A notes principal. Cumulative gross
collections are above the limit for a subordination of servicing
fees, but present value (PV) cumulative profitability ratio is high
at 129.75% from PRECS and 99.30% for BVI, allowing PRECS fees and
70% of BVI fees to be paid ahead of Class A interest. The principal
payment to Class A was EUR7.5 million in December 2021 payment date
compared to the outstanding amount of Class A at EUR254.6 million.

NPL transactions' cash flows depend on the timing and amount of
collections. Due to the effects of the pandemic on the NPL sector,
Moody's has considered additional stresses in its analysis,
including a 6 to 12-month delay in the recovery timing.

The action has considered how the coronavirus pandemic has reshaped
Italy's economic environment and the way its aftershocks will
continue to reverberate and influence the performance of NPLs.
Moody's expect the public health situation to improve as
vaccinations against COVID-19 increase and societies continue to
adapt to new protocols. But the virus will remain endemic, and
economic prospects will vary – starkly, in some cases – by
region and sector.
Moody's regard the coronavirus outbreak as a social risk under its
ESG framework, given the substantial implications for public health
and safety.

The principal methodology used in this rating was "Non-Performing
and Re-Performing Loan Securitizations Methodology" published in
April 2020.

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

Factors or circumstances that could lead to an upgrade of the
rating include: (i) the recovery process of the non-performing
loans producing significantly higher cash-flows in a shorter time
frame than expected; (ii) improvements in the credit quality of the
transaction counterparties; and (iii) a decrease in sovereign
risk.

Factors or circumstances that could lead to a downgrade of the
rating include: (i) significantly lower or slower cash-flows
generated from the recovery process on the non-performing loans due
to either a longer time for the courts to process the foreclosures
and bankruptcies, a change in economic conditions from Moody's
central scenario forecast or idiosyncratic performance factors. For
instance, should economic conditions be worse than forecasted and
the sale of the properties generate less cash-flows for the issuer
or take a longer time to sell the properties, all these factors
could result in a downgrade of the rating; (ii) deterioration in
the credit quality of the transaction counterparties; and (iii)
increase in sovereign risk.

MAIOR SPV: DBRS Lowers Class A Notes Rating to BB, Trend Stable
---------------------------------------------------------------
DBRS Ratings GmbH downgraded its rating on the Class A notes issued
by Maior SPV S.r.l. (the Issuer) to BB (sf) from BBB (low) (sf) and
changed the trend to Stable from Negative.

The transaction represents the issuance of Class A, Class B, and
Class J Notes (collectively, the Notes). The rating on the Class A
Notes addresses the timely payment of interest and the ultimate
payment of principal. DBRS Morningstar does not rate the Class B or
Class J Notes.

At issuance, the Notes were backed by a EUR 2.75 billion by gross
book value portfolio consisting of unsecured and secured Italian
nonperforming loans (NPLs) originated by Unione di Banche Italiane
S.p.A. and IWBank S.p.A. (together, the UBI Banca Group or the
Originator).

The receivables are serviced by Prelios Credit Servicing S.p.A.
(the Servicer) while Banca Finint S.p.A (former Securitization
Services S.p.A.) operates as backup servicer.

RATING RATIONALE

The rating downgrade follows a review of the transaction and is
based on the following analytical considerations:

-- Transaction performance: assessment of portfolio recoveries as
of December 31, 2021, focusing on: (1) a comparison between actual
collections and the Servicer's initial business plan forecast; (2)
the collection performance observed over recent months, including
the period following the outbreak of the Coronavirus Disease
(COVID-19); and (3) a comparison between the current performance
and DBRS Morningstar's expectations.

-- The Servicer's updated business plan as of June 2021, received
in January 2022, and the comparison with the initial collection
expectations.

-- Portfolio characteristics: loan pool composition as of December
2021 and the evolution of its core features since issuance.

-- Transaction liquidating structure: the order of priority
entails a fully sequential amortization of the Notes (i.e., the
Class B Notes will begin to amortize following the full repayment
of the Class A Notes and the Class J Notes will amortize following
the repayment of the Class B Notes). Additionally, interest
payments on the Class B Notes become subordinated to principal
payments on the Class A Notes if the cumulative net collection
ratio or net present value cumulative profitability ratio are lower
than 90%. These triggers were breached for the first time since
issuance on the January 2022 interest payment date, with the actual
figures at 81.3% and 100.4%, respectively, according to the
Servicer.

-- Liquidity support: the transaction benefits from an amortizing
cash reserve providing liquidity to the structure covering
potential interest shortfall on the Class A Notes and senior fees.
The cash reserve target amount is equal to 4% of the Class A Notes
principal outstanding and is currently fully funded.

TRANSACTION AND PERFORMANCE

According to the latest investor report from January 2022, the
outstanding principal amounts of the Class A, Class B, and Class J
notes were EUR 341.0 million, EUR 60.0 million, and EUR 26.9
million, respectively. As of the January 2022 payment date, the
balance of the Class A notes has amortized by approximately 45.7%
since issuance and the current aggregated transaction balance is
EUR 427.9 million.

As of December 2021, the transaction was performing below the
Servicer's business plan expectations. The actual cumulative gross
collections equaled EUR 384.2 million whereas the Servicer's
initial business plan estimated cumulative gross collections of EUR
469.4 million for the same period. Therefore, as of December 2021,
the transaction was underperforming by EUR 85.2 million (-18.1%)
compared with the initial business plan expectations.

At issuance, DBRS Morningstar estimated cumulative gross
collections for the same period of EUR 198.1 million at the BBB
(low) (sf) stressed scenario. Therefore, as of December 2021, the
transaction is performing above DBRS Morningstar's initial stressed
expectations.

Pursuant to the requirements set out in the receivable servicing
agreement, in January 2022, the Servicer delivered an updated
portfolio business plan.

The updated portfolio business plan, combined with the actual
cumulative gross collections of EUR 363.7 million as of June 2021,
results in a total of EUR 875.3 million, which is 13.1% lower than
the total gross disposition proceeds of EUR 1,007.2 million
estimated in the initial business plan, and expected to be realized
over a longer period of time. The servicer has been underperforming
its updated business plan in the past semester. Excluding actual
collections, the Servicer's expected future collections from
January 2022 account for EUR 481.2 million. The updated DBRS
Morningstar BB (sf) rating stress assumes a haircut of 11.6% to the
Servicer's executed business plans, considering future expected
collections.

The final maturity date of the transaction is in July 31, 2040.

DBRS Morningstar analyzed the transaction structure using Intex
DealMaker.

The Coronavirus Disease (COVID-19) and the resulting isolation
measures have caused an immediate economic contraction, leading in
some cases to increases in unemployment rates and income reductions
for many borrowers. DBRS Morningstar anticipates that negative
effects may continue in the coming months for many nonperforming
loan (NPL) transactions. In particular, the deterioration of
macroeconomic conditions could negatively affect recoveries from
NPLs and the related real estate collaterals. The rating is based
on additional analysis to expected performance as a result of the
global efforts to contain the spread of the coronavirus. For this
transaction, DBRS Morningstar incorporated its expectation of a
moderate medium-term decline in residential property prices, but
gave partial credit to house price increases from 2023 onwards in
non-investment-grade scenarios.

Notes: All figures are in euros unless otherwise noted.


SAIPEM SPA: S&P Raises ICR to 'BB' on Planned Capital Increase
--------------------------------------------------------------
S&P Global Ratings raised its long-term issuer credit rating on
Italy-based engineering and construction (E&C) company Saipem
S.p.A. to 'BB' from 'BB-' and remove the rating from CreditWatch
with negative implications where S&P placed it on Feb. 4, 2022.

The positive outlook reflects that S&P cold upgrades Saipem if the
company delivered on its business plan in the coming six-to-twelve
months and restored its historic track record of disciplined
execution and better profitability.

The owners of Saipem have decided to accelerate the company's
derisking, in light of cost overruns on several projects resulting
in losses of over EUR1.0 billion. On March 25, 2022, Saipem's
announced that it will receive a transformative finance package
from its shareholders Eni and CDP for derisking and funding a new
business plan. According to the plan, Eni and CDP will stream close
to EUR0.9 billion to Saipem that will be converted into equity
later this year. In addition, the company received an underwritten
commitment from its banks for another EUR1.1 billion, bringing the
entire equity injection to EUR2.0 billion. S&P considers that this
will materially strengthen Saipem's capital structure. For example,
it now assumes in its base case that the company's adjusted debt
will be about EUR2.4 billion by December 2022 (equivalent to
reported net debt of EUR1.6 billion) compared with about EUR3.3
billion as of Dec. 31, 2021.

Further initiatives in excess of EUR1.5 billion could support a
higher rating in the coming six-to-twelve months. In addition to
announcing the EUR2.0 billion financing package, which aims to
address both Saipem's short-term liquidity needs and the long-term
robustness of the balance sheet, the company also indicated that it
aims to reduce net debt to zero by 2025 (according to the company
definition, which takes into account Saipem's share of cash held at
joint ventures). Saipem also shared plans to take potential
supplementary measures to derisk, such as extracting value from its
onshore drilling unit, monetizing certain fixed assets, and
improving margins through contract renegotiations. Such measures
could lead to quicker deleveraging and support a credit profile in
line with a higher rating in the coming six-to-twelve months.

S&P said, "In the next two years, we expect profitability will
remain pressured due to the poor profitability of the company's
onshore portfolio and loss-making projects, which make up a
significant share of its operations. The company's sizeable backlog
includes on the one hand a variety of megaprojects (worth over
EUR1.0 billion) that stretch over several years, such as the
liquified natural gas (LNG) project in Mozambique, and on the other
very short drilling contracts. Despite the absolute level of
backlog, which is larger than peers', we see it as lower quality,
because of Saipem's low profitability, especially on E&C onshore."

The current backlog split is 59% E&C onshore, 33% E&C offshore, and
the remainder drilling. To maintain its current backlog, the
company would need to secure annual contracts for over EUR10
billion in 2022 and 2023. The combination of recovery in energy
prices and the delays in approving new projects should result in
much higher final investment decisions (FIDs) in the coming 18
months, compared with previous years. However, since the beginning
of the year, neither Saipem nor its peers have secured significant
contracts.

Based on the current backlog, which provides good revenue
visibility for 2022 and 2023, S&P expects the company to report
EBITDA margins of just above breakeven levels for its onshore
projects and about 5%-10% for its offshore projects, well below the
3%-5% for onshore and 9%-17% for offshore that it recorded over
2018-2020. Even if the new contracts were much more profitable, it
would take more than two years until it is visible in the
accounts.

S&P said, "After years of underperformance, drilling operations are
having a comeback. We expect Saipem will benefit from the
supportive market environment in its drilling business on the back
of currently elevated oil and gas prices. The company's onshore
subsegment benefits from a strong position in the Middle East (35%
of Saipem's drilling rigs are located in Saudi Arabia). In the
offshore segment, most of the fleet is already contracted in 2022.
In our view, the lack of contracts for 2023, which in normal times
could be seen as a weakness, could be positive for the company as
demand increases.

"As part of the company's new business strategy, it announced the
possibility to divest its onshore drilling activity to a strategic
partner in the coming months. In our view, an execution of such a
transaction will not have a material impact on the existing
business risk profile and should further improve credit metrics in
2022 and 2023. Under our base case, the contribution of the
division to Saipem's free operating cash flow (FOCF) in the coming
two years is very modest.

"The coming years' strategy includes a return to basics. We believe
that the recent security issues in Mozambique and operational
issues in offshore wind projects will force the company to execute
dramatic changes to address some of its competitive weaknesses,
including cost structure, and focus more on the attractive segments
of its E&C projects. The company already put in place a new
organization and appointed a new general manager from Eni. In the
next one-to-two years, we expect the company will take a step back
from offering a full range of services in offshore wind and gear
itself more heavily toward oil and gas offshore E&C. The company
expects that its ongoing cost-cutting program will yield EUR300
million of run-rate saving in 2024.

"Our rating on Saipem continues to include one notch of uplift for
group support, because we view the company as moderately strategic
to its main shareholders, Eni (30.5%) and CDP (12.6%).Eni and CDP
have a shareholders' agreement that aims to realize joint control
(in particular by appointing members of the board of directors),
under which Eni commits to hold at least 12.5% of Saipem's shares
at any time. We assume Eni will continue to own a significant stake
in Saipem in the next five years. At the same time, we cannot rule
out eventual divestment. That said, the support extended in the
financing package presented late March 2022 is a strong indication
that ownership considerations are credit enhancing for Saipem.

"The positive outlook reflects that we could raise our rating on
Saipem if the company delivered on its business plan in the coming
year and restored its historic track record of disciplined
execution and better profitability. We believe that current energy
prices should support a healthy pipeline for the E&C industry.

"Under our base-case scenario, we project EBITDA of about EUR450
million-EUR550 million in 2022 (slightly below the company's target
of EUR550 million or more). With the anticipated profitability
level, the company would be able to maintain its debt at the
current level and to post adjusted funds from operations (FFO) to
debt close to 20%, at the low end of the 20%-30% range that we view
as commensurate with the rating. We expect the ratio to improve
materially in 2023.

"The outlooks also reflects that we assume no changes in support
from owner Eni.

"In our view, an upgrade will be subject to the company's ability
to secure new orders in the coming quarters, which will provide
good visibility on results in 2023 and 2024, and to improve the
overall quality of the existing portfolio. This could be
complemented by the restart of the LNG project in Mozambique."

Other supportive elements to an upgrade could include:

-- Tangible progress on the cost-cutting program;

-- Improving its adjusted FFO to debt of 20%-30% and generate
positive FOCF; and

-- Clear path to the company's deleveraging journey (free reported
net debt by 2025).

While S&P doesn't tie potential rating upside to the divestment of
the onshore drilling operations or other initiatives, it believes
that the execution of some initiatives would accelerate its
deleveraging process (according to the company by more than EUR1.5
billion), and would build more headroom under the rating to address
potential deviation from our assumptions.

S&P could revise the outlook to stable if:

-- The current healthy market environment was short lived and the
industry saw material delays in FIDs, resulting in contracts in the
low-single-digit-billion euros in 2022 or in 2023.

-- No signs of improvement in the quality of Saipem's backlog. In
this case, Saipem's FFO to debt could remain below 20% beyond the
first half of 2023.

ESG credit indicators: E-4, S-2, G-3




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

TATTELECOM PJSC: Fitch Affirms Then Withdraws 'CC' LT IDR
---------------------------------------------------------
Fitch Ratings has affirmed Tattelecom PJSC's ratings, including its
Long-Term Foreign Currency Issuer Default Rating and senior
unsecured rating of 'CC'.

Tattelecom is a regional fixed-line incumbent operator in the
Russian Republic of Tatarstan (C) with leading or strong market
positions in wireline broadband, pay-TV and traditional voice
telephony services. The company had no debt at end-2021.

The ratings have been withdrawn for commercial reasons. The
decision to withdraw these ratings was made prior to Fitch's
announcement on 23 March 2022 that it intended to withdraw all
Russia-related ratings for sanctions-related reasons. Fitch will no
longer provide ratings or analytical coverage for these companies.

KEY RATING DRIVERS

Challenging Financial Environment: Fitch believes that the
Presidential Decree of 5 March 2022, against the backdrop of an
escalating sanctions regime, could impose insurmountable barriers
to many Russian corporates' ability to make timely payments on
foreign- and local-currency debt to certain international
creditors. While the practical implementation of this decree
remains unclear, Fitch believes that the severely heightened risk
from operating in this environment is best reflected in Fitch's
'CC' rating definition of 'default of some kind appears probable'.

Tightening Sanctions: Ongoing intensification of sanctions,
including restrictions in energy trade and imports, increase the
probability of a policy response from Russia, in turn further
weakening its economy and eroding the operating environment for its
corporates.

DERIVATION SUMMARY

Not relevant as ratings have been withdrawn.

KEY ASSUMPTIONS

Not relevant.

RATING SENSITIVITIES

Not relevant.

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

Pre-crisis liquidity assessment can be found in the Rating Action
Commentary (RAC) referenced above. The current rating reflects the
introduction of further limitations to the company's ability and
willingness to service debt as described in Key Rating Drivers.

ISSUER PROFILE

See relevant RAC referenced above.

Criteria Variation

A criteria variation has been applied with respect to Fitch's
bespoke recovery analysis. Given the high levels of uncertainty
inherent in the current conflict, Fitch has assigned Recovery
Rating at 'RR4', reflecting a combination of the company's fairly
low debt load and the Russian cap on Recovery Rating of 'RR4'.

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.

Following the withdrawal Fitch will no longer provide ESG Relevance
Scores for Tattelecom.

[*] RUSSIA: U.S. Set to Announce New Sanctions This Week
--------------------------------------------------------
Bloomberg News reports that Ukraine said that Moscow's attacks were
ongoing, including on the besieged port city of Mariupol, as the
world's attention focused on what Ukraine's President Volodymyr
Zelenskiy said was evidence of Russian-perpetrated genocide in
northern Ukrainian towns.

Mr. Zelenskiy has called for tougher sanctions against Russia when
the G-7 meets this week, Bloomberg discloses.

President Joe Biden said Russian President Vladimir Putin could
face a war crimes trial and additional U.S. sanctions, while the
European Union said it will hold Russian authorities responsible
for the alleged atrocities in Bucha and other towns, Bloomberg
relates.  Russia denied that its forces killed civilians, Bloomberg
notes.

According to Bloomberg, the U.S. plans to announce new sanctions
against Russia this week and is talking to European allies about
new ways to put economic pressure on Russia, including those
relating to energy.

[*] S&P Lowers LT ICR on 42 Russian Corporate Entities to 'CC'
--------------------------------------------------------------
S&P Global Ratings has lowered its foreign and local currency
long-term issuer credit ratings on 42 corporate entities
incorporated in Russia to 'CC' from 'CCC-'. S&P affirmed its 'C'
short-term issuer credit ratings on the companies, where
applicable. All ratings remained on CreditWatch with negative
implications. S&P subsequently withdrew all our ratings on the
entities and their debt issues.

S&P said, "The downgrades follow the lowering of our ratings on
Russia to 'CC/C' from 'CCC-/C' and downward revision of our
transfer and convertibility (T&C) assessment on Russia to 'CC' from
'CCC-'. A country T&C assessment reflects S&P Global Ratings' view
of the likelihood of a sovereign restricting nonsovereign access to
foreign exchange needed to satisfy the nonsovereign's debt service
obligations.

"We lowered our foreign currency ratings on various Russian
corporates in line with our T&C assessment, given the numerous
currency restrictions that were imposed by the Central Bank of
Russia. This reflects the increasing reported difficulties of
companies meeting debt-service payments to their bondholders in
foreign currency. The payment difficulties stem from international
sanctions that reduce Russia's available foreign exchange reserves
and restrict its access to the global financial system, markets,
and infrastructure. They also follow the series of measures rolled
out by the Russian authorities aimed at shielding the ruble while
preserving remaining usable reserve buffers. All these measures
have restricted the ability of nonresident domestic and foreign
currency bondholders to receive interest, principal payments, or
both, on time and in full.

"We also lowered our local currency issuer credit ratings on the
companies because we believe that their capacity to service
obligations in rubles may also be significantly disrupted in case
of a default on foreign currency obligations. We note as well that
ratings on domestic banks were 'CC', and on CreditWatch negative,
before their withdrawal on March 31, 2022. This indicates high
vulnerability to nonpayment from the local banking sector, on which
domestic corporates--even those with no market debt or foreign
currency liabilities outstanding--rely for day-to-day business
activities.

"Our 'CC/C' ratings reflect our expectation that a default is a
virtual certainty, regardless of the time to default. The
CreditWatch negative status on the long- and short-term ratings
indicates that we could lower the foreign currency issuer credit
ratings to 'SD' (selective default) if a company fails to make a
debt-service payment in accordance with the terms of an obligation,
and if we do not expect such payment to be made within an
applicable grace period. In addition, we would lower the local
currency ratings to 'SD' if we were to assess that some nonresident
bondholders are unable to access debt-service payments on local
bond/bank debts within an applicable grace period.

"The withdrawal of the ratings follows the EU's decision on March
15, 2022, to ban the provision of credit ratings to legal persons,
entities, or bodies established in Russia and our ensuing
announcement that we will withdraw all our outstanding ratings on
relevant issuers before April 15, 2022, the deadline imposed by the
EU."

  Ratings List

  DOWNGRADED; RATINGS WITHDRAWN   
                                 FINAL      TO          FROM
  ALROSA PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/C   CCC-/Watch Neg/C

  ATOMIC ENERGY POWER CORP. JSC

  Issuer Credit Rating    NR    CC/Watch Neg/C   CCC-/Watch Neg/C

  CORPORATION VSMPO-AVISMA PSC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  DELOPORTS LLC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  ETALON LENSPETSSMU JSC
  LEADER INVEST JSC

  Issuer Credit Rating    NR    CC/Watch Neg/C   CCC-/Watch Neg/C

  FEDERAL GRID CO. OF THE UNIFIED ENERGY SYSTEM

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  GAZPROM NEFT PJSC
  GAZPROM CAPITAL OOO

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  MOSENERGO PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  GAZPROM PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/C   CCC-/Watch Neg/C

  TGC-1 PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/C   CCC-/Watch Neg/C

  HOLDING CO. METALLOINVEST JSC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  KATREN JSC SPC

  Issuer Credit Rating    NR    CC/Watch Neg/C   CCC-/Watch Neg/C

  LUKOIL PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  MMC NORILSK NICKEL PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  MAGNIT PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  MAGNITOGORSK IRON AND STEEL WORKS PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/C   CCC-/Watch Neg/C

  MEGAFON PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  MOSVODOKANAL JSC

  Issuer Credit Rating    NR    CC/Watch Neg/C   CCC-/Watch Neg/C

  NLMK PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  NOVATEK PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  PHOSAGRO PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  POLYUS PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  ROSNEFT OIL CO. PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  ROSNEFT INTERNATIONAL HOLDINGS LTD.

  Issuer Credit Rating    NR    CC/Watch Neg/C   CCC-/Watch Neg/C

  ROSSETI CENTRE, PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/C   CCC-/Watch Neg/C

  ROSSETI MOSCOW REGION PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  ROSSETI PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/C   CCC-/Watch Neg/C

  ROSTELECOM PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  RUSHYDRO PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/C   CCC-/Watch Neg/C

  RUSSIAN RAILWAYS JSC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  SETL GROUP LLC

  Issuer Credit Rating    NR    CC/Watch Neg/C   CCC-/Watch Neg/C

  SEVERSTAL PAO

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  SIBUR HOLDING PJSC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  MOBILE TELESYSTEMS PJSC
  SISTEMA (PJSFC)

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  SOVCOMFLOT PAO
  SCF CAPITAL DAC

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  VODOKANAL ST. PETERSBURG

  Issuer Credit Rating    NR    CC/Watch Neg/C   CCC-/Watch Neg/C

  TMK PAO

  Issuer Credit Rating    NR    CC/Watch Neg/--  CCC-/Watch Neg/--

  TRANSFIN-M PC

  Issuer Credit Rating    NR    CC/Watch Neg/C   CCC-/Watch Neg/C

  NR--Not rated.




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

CAIXABANK RMBS 2: DBRS Confirms BB(high) Rating on Class B Notes
----------------------------------------------------------------
DBRS Ratings GmbH confirmed its ratings on the notes issued by two
CaixaBank RMBS transactions as follows:

CaixaBank RMBS 1, FT (CX1)

-- Class A Notes confirmed at AA (sf)
-- Class B Notes confirmed at BBB (low) (sf)

CaixaBank RMBS 2, FT (CX2)

-- Class A Notes confirmed at AA (low) (sf)
-- Class B Notes confirmed at BB (high) (sf)

The ratings on the Class A Notes address the timely payment of
interest and the ultimate payment of principal on or before the
legal final maturity date of each transaction. The ratings on the
Class B Notes address the ultimate payment of interest and
principal on or before the legal final maturity date of each
transaction.

The confirmations follow an annual review of the transactions and
are based on the following analytical considerations:

-- Portfolio performance, in terms of delinquencies, defaults, and
losses, as of the December 2021 and January 2022 payment dates for
CX1 and CX2, respectively.

-- Portfolio default rate (PD), loss given default (LGD), and
expected loss assumptions on the outstanding collateral pools.

-- The current available credit enhancement to the notes to cover
the expected losses assumed at their respective rating levels.

-- The current economic environment and an assessment of
sustainable performance, as a result of the Coronavirus Disease
(COVID-19) pandemic.

CX1 and CX2 are securitizations of first-lien residential mortgage
loans and first-lien multicredito (drawn credit lines) mortgages on
properties in Spain originated and serviced by CaixaBank, S.A.
(CaixaBank), that closed in February 2016 and March 2017,
respectively.

PORTFOLIO PERFORMANCE

CX1: As of December 2021, loans more than 90 days in arrears
slightly increased to 1.6% from 1.5% of the outstanding performing
portfolio collateral balance versus 1.5% at the last annual review.
The cumulative default ratio was 1.3% of the original portfolio
balance versus 1.1% in December 2020.

CX2: As of January 2022, loans more than 90 days in arrears were
trending up to 1.7% of the outstanding performing portfolio
collateral balance versus 1.5% in January 2021. The cumulative
default ratio was 1.2% of the original portfolio balance versus
0.9% in January 2021.

PORTFOLIO ASSUMPTIONS AND KEY DRIVERS

DBRS Morningstar conducted a loan-by-loan analysis on the remaining
receivables, considering updated multicredito balances, and updated
its base case PD and LGD assumptions to 6.0% and 12.9% (from 5.0%
and 16.6%), respectively, for CX1 and to 6.2% and 11.4% (from 6.1%
and 14.1%), respectively, for CX2.

CREDIT ENHANCEMENT

CX1: As of the December 2021 payment date, credit enhancement to
the Class A Notes was 20.8%, up from 18.9% one year ago. The Class
A Notes benefit from a reserve fund, which provides liquidity
support and credit support to the Class A Notes. After two years
from closing, the reserve fund may amortize over the life of the
transaction subject to certain amortization triggers. The reserve
fund is currently at its target level of EUR 568.0 million, which
is a minimum of 8.0% of the outstanding balance of the notes and
4.0% of their initial balance, subject to a floor of 2.0% of that
initial balance.

CX2: As of the January 2022 payment date, credit enhancement to the
Class A Notes was 20.7%, up from 19.3% last year. The Class A Notes
benefit from a reserve fund, which provides liquidity support and
credit support to the Class A Notes. After two years from closing,
the reserve fund may amortize over the life of the transaction
subject to the certain amortization triggers. The reserve fund is
currently at its target level of EUR 115.4 million, which is a
minimum of 6.0% of the current outstanding balance of the notes and
4.75% of their initial balance.

The only available subordination for the Class B Notes is the
reserve fund, which currently covers principal and interest
payments on the Class A Notes only. However, upon full repayment of
the Class A Notes, it will also become available to the Class B
Notes in each transaction.

CaixaBank acts as the account bank for both transactions. Based on
the account bank reference rating of A (high) on CaixaBank (which
is one notch below its DBRS Morningstar public Long-Term Critical
Obligations Rating of AA (low)), the downgrade provisions outlined
in the transaction documents, and other mitigating factors inherent
in the transaction structures, DBRS Morningstar considers the risk
arising from the exposure to the account bank to be consistent with
the ratings assigned to the notes, as described in DBRS
Morningstar's "Legal Criteria for European Structured Finance
Transactions" methodology.

DBRS Morningstar analyzed the transaction structures in Intex
DealMaker.

The Coronavirus Disease (COVID-19) and the resulting isolation
measures have caused an immediate economic contraction, leading in
some cases to increases in unemployment rates and income reductions
for many borrowers. DBRS Morningstar anticipates that delinquencies
may continue to increase in the coming months for many RMBS
transactions. The ratings are based on additional analysis to
expected performance as a result of the global efforts to contain
the spread of the coronavirus.

For these transactions, DBRS Morningstar increased the expected
default rate for self-employed borrowers, assumed a moderate
decline in residential property prices, and conducted additional
sensitivity analysis to determine that the transaction benefits
from sufficient liquidity support to withstand high levels of
payment holidays or payment moratoriums in the portfolio. As of
December 2021, the loans that benefit from a moratorium due to the
coronavirus represented an immaterial portion of the portfolio for
CX1. There are no loans reported as currently benefitting from a
moratorium due to the coronavirus for CX2.

Notes: All figures are in euros unless otherwise noted.




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

UNIQUE BIDCO: Fitch Gives Final 'B' LT IDR, Outlook Stable
----------------------------------------------------------
Fitch Ratings has assigned Unique Bidco AB (Optigroup) a final
Long-Term Issuer Default Rating (IDR) of 'B' with Stable Outlook.
Fitch has also assigned Optigroup's new EUR515 million term loan B
(TLB) a long-term rating of 'B+' with a Recovery Rating of 'RR3'.

The rating of Optigroup balances its expected high leverage with a
solid business profile. It has leading market positions in the
fragmented business essentials distribution market, with limited
geographic, product, customer and supplier concentration. Its
exposure to the declining paper segment is mitigated by an
increased focus on growing packaging, cleaning and personal
protective equipment end markets.

Fitch expects the group to continue to pursue a bolt-on M&A-driven
growth strategy, with limited execution risk given the
decentralised organisation of Optigroup. Fitch views positively the
group's successful integration record and its prudent policy of
acquiring companies with a clear strategic fit at sensible
valuation.

KEY RATING DRIVERS

High Initial Leverage: Fitch forecasts funds from operations (FFO)
gross leverage at close to 7.0x (near 6.0x debt/EBITDA), albeit
with sound deleveraging capacity over the rating horizon to 2024.
The acquisitions of Netherlands-based Hygos, a distributor of
products within FSF (facility/safety & foodservice), medical and
packaging, and of two smaller add-ons will increase leverage
substantially. This acquisition is made simultaneously with a
transaction whereby a new sponsor, FSN Capital, has acquired
majority votes in Optigroup and the previous owners retaining the
remainder.

Acquisition of Dutch Hygos Positive: Fitch views the acquisition of
Hygos as positive for diversification and margins. Hygos, similar
to Optigroup, has grown rapidly through M&A to last 12-month (LTM)
sales of EUR218 million in October 2021 and will represent 16% of
the combined group sales. Targeting smaller customers and with a
highly profitable niche in the medical disposables and basic
instruments segment, Hygos has high EBITDA margins of near 14%
(versus below 5% for Optigroup, both Fitch-adjusted) that will
improve margins for the combined group.

Other Bolt-On Add Diversification: The other two smaller companies,
respectively operating in Benelux and Romania, also have high
margins. These acquisitions will, in addition to new exposure to
the medicals sectors, increase the group's geographic
diversification to the Benelux region to 24% of sales from 12%
previously.

Transition from Paper Positive: Since Optigroup was spun-out of
Stora Enso's paper distribution business in 2008, it has
diversified into the distribution of other products with better
growth prospects and away from non-core commodity paper by selling
off its businesses in France and Germany. Optigroup's core
operations within FSF, packaging and core paper and specialties now
account for 73% of sales, the remainder being non-core paper, which
has contracted further during the pandemic. Fitch expects a 2%-4%
annual decline in paper revenue, albeit remaining cash
flow-positive.

Sound Business Profile: The new larger Optigroup will generate
revenue of EUR1.3 billion from supply of products and solutions to
customers within the cleaning and facility management, hotel &
restaurant, healthcare, the manufacturing industry and graphical
sectors. These are all fairly stable sectors as many products
relate to daily essentials and therefore enjoy non-cyclical demand.
The FSF and medicals segments during the pandemic gained from
increased demand for cleaning and hygiene while the declining
non-core commodity paper saw rapidly shrinking demand. Optigroup
also has good diversification across the Nordics, the Benelux,
Switzerland and a growing number of other countries in Europe.

Continued Acquisitive Growth Expected: Fitch expects Optigroup to
continue its growth strategy of bolt-on acquisitions. Fitch's
rating case includes four to six acquisitions costing up to EUR60
million per year over the rating horizon. This will continue to be
financed by internally generated cash flows as well as an available
EUR75 million delayed draw acquisition facility.

DERIVATION SUMMARY

Optigroup has close peers in other Nordic distributors including
Winterfell Financing /Stark Group and Quimper AB/(Ahlsell), both
rated 'B'/Stable. These are larger in by revenue and mainly exposed
to the more cyclical construction and renovation sectors.
Optigroup's historical margins are broadly similar to those of
Stark but weaker than Ahlsell's, due to exposure to the declining
commodity paper segment. With an expected pick-up of Optigroup's
margins from the acquisition of Hygos, this gap is expected to
decrease.

Another Nordic peer is the technical installation provider,
Assemblin Financing (B/Stable), which has also grown with multiple
small add-ons but is less geographically diversified and with a
somewhat weaker market position in its core segments. Other
relevant peers are business services providers Irel Bidco/IFCO
(B+/Stable), Freshworld Holding (B+/Stable) and Polystorm
Bidco/Polygon (B/Stable). These companies are somewhat smaller,
highly niched but with strong positions in their niches and
generally better margins than Optigroup.

Optigroup has slightly lower initial leverage than many peers.
Winterfell /Stark's FFO gross leverage has historically been well
above 9x, and is estimated to have been 8.5x at end-2021. Polystorm
in 2021 re-leveraged to 9.3x versus Optigroup's initial leverage of
below 7x at end-2022 and below 6x by 2024. This is similar to Irel
Bidco/IFCO's estimated leverage of 6.0x end-2021.

KEY ASSUMPTIONS

-- Organic revenue CAGR of 0.8% as FSF and packaging growth
    offsets a 5% decline in commodity paper;

-- Gross profit margin increasing to 28.1% in 2025 from 26.4% in
    2021 as a result of an improved product mix and increased
    exposure to spot contracts with small customers;

-- Selling, general and administrative expenses decreasing to
    18.1% in 2025 from 19.2% in 2021;

-- Capex at 1% of revenue to 2025;

-- Working-capital cash outflows along with increased activity to
    2025;

-- Annual acquisitions of EUR40-EUR60 million funded by the
    delayed drawn TLB and then cash on balance sheet based on an
    8x multiple and an 8% EBITDA margin;

-- Revolving credit facility (RCF) undrawn;

-- No dividend distribution.

KEY RECOVERY RATING ASSUMPTIONS

-- Fitch assumes that Optigroup would be considered a going
    concern (GC) in bankruptcy and that it would be reorganized
    rather than liquidated. Fitch has assumed a 10% administrative
    claim in the recovery analysis;

-- Fitch assumes GC EBITDA of EUR85 million, which Fitch believes
    should be sustainable post-restructuring;

-- Fitch assumes a 5.0x distressed enterprise value (EV)/ EBITDA;

-- The abovementioned assumptions result in a distressed EV of
    about EUR425 million;

-- Based on the payment waterfall Fitch has assumed the EUR60
    million RCF to be fully drawn and ranking pari passu with the
    notes. Therefore, after deducting 10% for administrative
    claims, Fitch's waterfall analysis generates a ranked recovery
    for the newly issued senior secured debt in the 'RR3' band,
    indicating a 'B+' instrument rating, or one notch below the
    IDR. The waterfall analysis output percentage on current
    metrics and assumptions is 58% for the newly issued senior
    secured loan.

RATING SENSITIVITIES

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

-- Increase in EBITDA margin to sustainably above 8%;

-- FFO gross leverage sustainably below 6.0x;

-- Total debt/ EBITDA below 5.5x on a sustained basis;

-- Free cash flow (FCF) margin sustainably above 2%.

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

-- Failure to improve EBITDA margin above 6% as a result of
    unsuccessful integration of acquired companies;

-- FFO gross leverage sustainably above 8.0x;

-- Total debt/ EBITDA above 7.5x on a sustained basis;

-- FCF margin at breakeven.

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

The rating assumes EUR15 million of cash following the senior debt
issue as well as EUR60 million in revolver availability. In line
with Fitch's criteria, Fitch treats EUR15 million of this cash as
restricted. Optigroup's liquidity position remains satisfactory
given its long-term debt maturity profile but is limited upon
closing of the transaction. Nevertheless, positive FCF should help
the group rebuild its cash balance.

The announced issue is projected to extend its debt maturity
profile to 2028. The EUR60 million RCF is also expected to enhance
liquidity headroom and financial flexibility.

ISSUER PROFILE

Optigroup is a leading B2B distributor of business essentials to
facility management companies, the printing and creative sector,
the industrial packaging and safety sectors and the retail and
reseller and foodservice sectors. The company operates across three
business areas - FSF, packaging and paper& business supplies. It is
market leader in the Nordics and has also exposure to Netherlands
and Belgium.

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.



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

TURKEY: S&P Cuts LT LC Sovereign Credit Rating to 'B+', Outlook Neg
-------------------------------------------------------------------
On April 1, 2022, S&P Global Ratings lowered its unsolicited
long-term local currency sovereign credit rating on Turkey to 'B+'
from 'BB-'. At the same time, S&P affirmed the unsolicited
long-term foreign currency rating at 'B+' and the unsolicited
foreign and local currency short-term ratings at 'B'. The outlook
remains negative.

S&P also lowered Turkey's transfer and convertibility assessment to
'B+' from 'BB-' and the unsolicited national scale ratings to
'trAA-/trA-1+' from 'trAA+/trA-1+'.

Outlook

The negative outlook reflects what S&P views to be rising
balance-of-payments and financial stability risks over the next 12
months amid the economic fallout from Russia's military
intervention in Ukraine, global monetary tightening, and possible
policy missteps in the run-up to Turkey's parliamentary and
presidential elections in mid-2023.

Downside scenario

S&P said, "We could lower the ratings if the adverse economic
spillover from either the Russia-Ukraine conflict or global
monetary tightening became more significant for Turkey, weakening
its already vulnerable balance of payments and complicating the
task of controlling inflation. We could also lower the ratings if
policy missteps, for example, ahead of the elections next year,
further undermined exchange-rate stability and worsened the
inflation outlook. This would heighten the risk of banking system
distress and thereby imply potential contingent liabilities for the
government." Weakened asset quality following several rounds of
large-scale credit stimulus in recent years could also weigh on the
banking system in such a scenario, particularly state-owned banks
that have seen their balance sheets expand more rapidly in recent
years.

Upside scenario

S&P could revise the outlook to stable if it observed sustained and
enhanced predictability of public policy and effectiveness of
monetary policy while Turkey's balance-of-payments position
strengthened, particularly the central bank's net foreign-exchange
(FX) reserves.

Rationale

S&P said, "The lowering of the local currency rating reflects what
we now view as similar credit risks characterizing Turkey's
foreign- and local-currency debt. A differentiation between foreign
and local currency ratings is a comparatively rare phenomenon, with
only 12 sovereigns benefiting from uplift for the local currency
rating among all 137 sovereigns we rate. In our view, the
conditions for such uplift are no longer present in Turkey's case.

"We typically differentiate between the local and foreign currency
ratings for sovereigns that can set interest rates and manage their
local currency independently, that is, without reference to its
external value. In our view, this is not the case in Turkey at
present, as the multiple tools that it deployed previously
effectively aimed at influencing the exchange rate, including
foreign-currency interventions and the introduction of the
FX-protected deposit scheme late last year. We also note that
Turkey's interest expenditure on local-currency government debt
constitutes about 70% of total interest expenditure. We consider
that, in a downside case, this could reduce the government's
flexibility to accord a higher priority to servicing its
local-currency obligations, thus eroding the credit-risk
distinction between the two types of debt."

In parallel, Turkey's economy has been persistently dollarizing in
recent years. Resident deposits in foreign currency amounted to 55%
of the total at the end of 2021, up from 39% at end-2017. If
precious-metal deposits are included, this rises to about 60%.
Meanwhile, the currency composition of government debt has also
been shifting in favor of foreign currency, with foreign-currency
debt at 66% at the end of 2021, up from under 40% at end-2017.

S&P said, "Our affirmation of the foreign currency rating primarily
reflects our view that Turkey has some fiscal headroom in case of
need. At 36% of GDP at end-2021, net general government debt looks
favorable vis-a-vis other emerging markets such as Brazil or South
Africa. We expect Turkey's net general government debt to stabilize
at close to 32% of GDP over the medium term. Balance-of-payments
risks, however, remain elevated, and public debt could increase
further in the event of a more significant depreciation of the
Turkish lira, or if the government provided more extensive support
to the banking sector in a downside scenario. We consider that the
global economic effects of Russia's military intervention in
Ukraine in February 2022, as well as the tightening monetary policy
of central banks in developed markets, present additional
balance-of-payments risks.

"Overall, our ratings on Turkey remain supported by the country's
diversified economy and resilient and adaptive private sector,
which, in the past, has weathered external shocks, currency
volatility, and frequent changes in economic policy. Contained net
general government debt, which we forecast will amount to 34% of
GDP by the end of 2022, also supports the ratings."

The ratings on Turkey are constrained by its vulnerable
balance-of-payments position and the limited effectiveness of its
monetary policy. The ratings are also restricted by what we view as
weak institutional arrangements. S&P sees limited checks and
balances between government bodies, with power concentrated in the
hands of the executive branch, which renders policy responses
difficult to predict.

Institutional and economic profile: Turkey's growth prospects have
weakened in the aftermath of Russia's military intervention in
Ukraine

-- S&P projects economic growth in Turkey of 2.4% in 2022, less
than our 3.7% forecast at the end of 2021.

-- Turkey's institutional arrangements are weak, with limited
checks and balances in place.

-- S&P thinks that economic policy uncertainty will remain
elevated in the run-up to the 2023 general election, with possible
additional stimulus measures at the expense of longer-term economic
stability.

S&P said, "In our view, Russia's intervention in Ukraine in
February 2022 presents downside risks to global growth and we now
expect weaker economic performance for European emerging markets,
including Turkey. Last year, Turkey's growth outcome exceeded our
previous forecasts, reaching 11%. Around half of this growth is
attributable to a carryover effect due to a lower base stemming
from the impact of the COVID-19 pandemic and the quick recovery in
the latter part of 2020. However, quarterly growth was still very
strong, with consumption and exports performing particularly well.
In contrast, we expect a sharp slowdown to follow in 2022."

Turkey remains exposed to the fallout from the Russia-Ukraine
conflict across several dimensions. Specifically:

Turkey's important tourism sector, which generates earnings in
foreign currency, has in the past depended significantly on
arrivals from Russia and to a lesser degree Ukraine. In 2021,
arrivals from Russia constituted 19% of all foreign visitors to
Turkey (16% pre-pandemic in 2019), while Ukraine had a share of 8%
(3% in 2019). There is likely to be a significant reduction in
these tourism flows in 2022 due to the direct impact of the
military conflict in the case of Ukraine, and the large economic
impact of sanctions, as well as disruption to transport and payment
systems in Russia. In the case of tourists from Russia, this could
be partially mitigated by the fact that Turkey is currently one of
few destinations with direct flights from Russia still in place, as
well as visa-free travel. Stronger European tourism thanks to an
improved pandemic situation and a competitive lira could also
provide support, but S&P considers the overall risks to be on the
downside.

Russia and Ukraine's share of Turkish goods exports is more modest,
at a combined 4% in 2020. However, given the scale of recessions
(S&P expects a real GDP contraction of 8.5% in Russia and 22% in
Ukraine this year), logistical challenges, and supply chain
disruptions, this could still materially dampen Turkish exports,
particularly taking into account second-round effects on European
economies.

Turkey remains an energy importer and therefore significantly
higher global prices for oil and gas will complicate the task of
bringing inflation under control, with a likely adverse effect on
domestic demand dynamics. Inflation rose to 54% year on year in
February 2022, the highest level in 20 years.

S&P said, "Consequently, we now forecast real growth of 2.4% in
2022, compared with our previous forecast of 3.7%. We expect a
significant slowdown in exports and consumption growth, while we
project that real investment will contract by 3.5% owing to high
uncertainty and dwindling global growth momentum."

The future direction of government policy also remains highly
uncertain. The political pressure on the central bank continues
after it made a series of interest rate reductions in the latter
half of 2021 against a background of soaring inflation. S&P also
thinks that policy missteps could occur in the run-up to the 2023
general elections. Recent opinion polls suggest declining popular
support for the ruling Justice and Development Party (Adalet ve
Kalkinma Partisi; AKP), with the pandemic, high inflation in food
prices, and a hit to real incomes likely to be contributing
factors. In that context, additional policy-stimulus measures--for
example, to boost the availability or reduce the price of
credit--cannot be ruled out in 2022, even though Turkey still faces
lingering imbalances from previous such measures, including lower
useable FX reserves and higher inflation.

S&P said, "We consider that Turkey's broader institutional
arrangements remain weak and continue to constrain the sovereign
credit ratings. In the June 2018 presidential and parliamentary
elections, the president and the AKP-led alliance secured a victory
that marked the final chapter in Turkey's transition to an
executive presidential system. We see limited checks and balances
between government bodies."

Flexibility and performance profile: Economic imbalances persist,
with high inflation and weak balance of payments

-- S&P forecasts that Turkey's inflation will average 55% in 2022,
the highest level of all the sovereigns it rates.

-- Net general government debt should remain about 32% of GDP
through 2025, still leaving some fiscal policy space.

-- Turkey's balance-of-payments position is weak, while its
monetary policy flexibility is limited, underpinning the risk of a
disorderly external adjustment.

In S&P's view, over the past year, Turkey's economic policy has
become increasingly unpredictable and less conventional, presenting
economic and balance-of-payments risks. Over the second half of
2021, and under political pressure, the central bank persistently
lowered the policy rate (one-week repo rate) to 14% from 19%, even
with inflation hitting multi-year highs and reaching 54% in
February 2022, the highest rate of all the sovereigns we rate. In
turn, this contributed to a significant disorderly depreciation of
the exchange rate toward the end of 2021, similar in magnitude to
that during the August 2018 currency crisis in Turkey.

Although the authorities managed to arrest the slide in the lira
through sales of FX reserves and the introduction of the so-called
FX-protected deposit scheme, S&P considers that Turkey's
balance-of-payments position remains fundamentally weak and is a
key constraint for the sovereign ratings. The country has
consistently run a current account deficit in the past, except in
2019, when imports contracted following the impact of the currency
crisis in 2018. Following a reduction in the current account
deficit to 1.8% of GDP in 2021 from almost 5.0% of GDP in 2020, the
current account appears to be deteriorating again. In January 2022,
the current account deficit totaled $7 billion, which in nominal
U.S. dollar terms is almost half the entire deficit for 2021.

S&P considers that Turkey's longstanding structural external
vulnerabilities are aggravated by what it views as an end to a
period of ultra-loose monetary policy by developed-market central
banks, including the U.S. Federal Reserve. Additionally, the likely
loss of tourist inflows from Russia and Ukraine and higher oil and
gas prices following the onset of conflict in Ukraine could weaken
Turkey's balance of payments as the country remains a net energy
importer.

In parallel, the amount of external debt maturing over the next 12
months remains significant as of January 2022, at $174 billion, or
25% of GDP, around half of which pertains to the banking sector. At
the same time, the central bank's FX reserves are weak. As of
mid-March 2022, they amounted to $109 billion (16% of GDP).
However, excluding the institution's foreign-currency obligations
to domestic residents, useable reserves--which represent the
central bank's effective capacity to intervene--remained much
lower, at $22 billion (3% of GDP) at the end of 2021.

S&P said, "We forecast that Turkey's current account deficit will
widen to 3.6% of GDP in 2022 as oil prices are significantly
higher, while tourism inflows will suffer from the impact of
Russia's intervention against Ukraine, and goods exports might take
a hit if there is a more pronounced slowdown of the global economy.
There are downside risks to our forecasts, but the key reason for
not projecting an even higher current account deficit is that we
expect the availability of and appetite for external funding for a
more sizable shortfall to be more limited in the future, including
because of global monetary tightening. Given the central bank's
limited capacity to intervene, we expect the lira to correct itself
further in such a scenario, in turn putting a lid on import growth,
rather than the current account deficit continuing to expand
unchecked."

Positively, available data so far suggest that confidence in
Turkey's externally leveraged banking sector endures, with
households choosing to keep their savings in the banks rather than
withdraw them. Additionally, Turkish banks managed to roll over
their sizable foreign debt coming due during previous episodes of
financial market stress.

Nevertheless, financial stability risks are elevated, in S&P's
view. These could, in turn, present a contingent liability risk to
the government if the government had to rescue a bank in a downside
case, either because of a loss of confidence among domestic
depositors, or if foreign creditors' appetite for rolling over
Turkish banks' foreign debt were to reduce. The government has
already contributed capital to public banks several times, with the
latest capitalization worth 0.5% of GDP taking place in March 2022.
We think that in a hypothetical scenario of a loss in banking
sector confidence, the government may be called upon to contribute
significantly higher amounts of equity and loans to the banks.

Banks' asset quality could also face further pressure, since about
38% of loans were denominated in foreign currency as of December
2021, effectively making this debt more expensive to service as the
lira depreciates. S&P said, "Risks to loan-book quality are
particularly pertinent for public banks, in our view, since they
have been heavily involved in episodes of rapid credit expansion at
low rates in the past, raising questions about the borrowers'
subsequent ability to repay these lines of credit. The other risk
to Turkey's banks stems from rising global interest rates and a
worsening of market conditions for the refinancing of external
debt. We estimate the financial sector's short-term external debt
by remaining maturity at about $83 billion or 12% of GDP as of
end-January 2022."

The rapid depreciation of the lira also contributes directly to a
rise in net general government debt. At the moment, about 66% of
government debt is denominated in foreign currency, a marked shift
from under 40% before 2018. An additional source of vulnerability
for the government's balance sheet stems from the FX-protected lira
deposits under a scheme that the authorities introduced at the end
of 2021 as a measure to stabilize the currency. Under this scheme,
the government has committed to compensate deposit holders for the
difference between the rate of exchange-rate depreciation and the
interest earned on the Turkish lira deposits. Essentially, on top
of its own FX risk stemming from the debt denominated in foreign
currency, the government has now assumed contingent liability risks
to compensate private-sector depositors. S&P expects the government
to account for the compensation directly in the budget. The total
amount of such deposits currently stands at about $38 billion (5.5%
of GDP), with around half of that amount being sponsored by the
Treasury (that is, the Treasury is liable for compensation payments
on that half) and the rest by the central bank.

That said, S&P considers that Turkey still has some fiscal
headroom. At 34% of GDP, net general government debt looks
favorable vis-a-vis some other emerging markets such as Brazil or
South Africa. In S&P's base case, it forecasts that the general
government deficit will widen to 4.2% of GDP in 2022 from an
estimated 3.1% in 2021, driven by additional expenditure to offset
the impact of higher energy and food prices, as well as potential
additional spending ahead of the elections in 2023.

Positively, Turkey maintains a liquidity buffer that could help
cover upcoming debt maturities. S&P estimates that liquidity buffer
at about 6% of GDP at the end of 2021. The authorities also aim to
reduce the foreign-currency portion of domestic borrowing, while
the average maturity of new domestic borrowing has increased from
37 months in 2020 to 55 months in 2021.

In S&P's view, inflation will accelerate in the coming months, and
it has revised its annual average inflation forecast for 2022 up to
55%. In monthly year-on-year terms, reported consumer price
inflation could peak at over 60% in the coming months. Producer
price inflation is even higher, reaching 105% year on year in
February 2022.

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

  DOWNGRADED; RATINGS AFFIRMED  
                                   TO                FROM
  TURKEY

  Sovereign Credit Rating

   Local Currency |U^         B+/Negative/B       BB-/Negative/B

   Turkey National Scale |U^  trAA-/--/trA-1+     trAA+/--/trA-1+

  DOWNGRADED  
                                   TO                FROM
  TURKEY

  Transfer & Convertibility Assessment

   Local Currency |U^         B+                  BB-

  RATINGS AFFIRMED  

  TURKEY

  Sovereign Credit Rating

   Foreign Currency |U^     B+/Negative/B

|U^ Unsolicited ratings with issuer participation, access to
internal documents and access to management.


TURKIYE CUMHURIYETI: Fitch Affirms 'B' LT Foreign Currency IDR
--------------------------------------------------------------
Fitch Ratings has affirmed Turkiye Cumhuriyeti Ziraat Bankasi
A.S.'s (Ziraat) Long-Term Foreign-Currency Issuer Default Rating
(LTFC IDR) at 'B' and Long-Term Local Currency (LTLC) IDR at 'B+'.
The Outlooks are Negative.

Fitch has also downgraded the bank's Viability Rating (VR) to 'b'
from 'b+' and removed it from Rating Watch Negative (RWN). Fitch
placed Ziraat's VR on RWN in February 2022 following the Turkish
sovereign downgrade.

The VR downgrade reflects heightened risks to the bank's credit
profile resulting from its concentration in the volatile and
challenging Turkish market. As the largest state-owned bank in
Turkey, Fitch considers the bank's credit profile and strength of
its capital and FC liquidity buffers to be commensurate with but
not above the risk of the Turkish operating environment,
notwithstanding its significant franchise.

Fitch has also affirmed the support-driven Long-Term IDRs of
Ziraat's Islamic bank subsidiary, Ziraat Katilim Bankasi A.S.
(ZKB), in line with Ziraat's.

KEY RATING DRIVERS

LTFC IDR, VR, SENIOR DEBT RATING AND NATIONAL RATING

Ziraat's LTFC IDR and senior debt rating are driven by its 'b' VR,
or standalone credit profile. At this rating level, its LTFC IDR is
constrained, but not capped, by Fitch's view of government
intervention risk in the banking sector.

The VR reflects the bank's market leading position, including the
highest deposit market share in the sector, which underpins its
business model and strong domestic franchise (end-2021: 15% of
sector assets). It also considers the bank's reasonable asset
quality, moderate capitalisation and profitability and reasonable
FC liquidity for its risk profile.

Risks to the VR remain significant, given Ziraat's concentration in
the volatile Turkish market, as reflected in Fitch's downgrade of
the operating environment score for Turkish banks to 'b'/negative,
which signals increased risks to macroeconomic and financial
stability at the lower sovereign rating level. Exposure to
operating environment risks are the main driver of the Negative
Outlook on the bank's LTFC IDR.

Furthermore, risks remain skewed to the downside, given policy
uncertainty in the run-up to the 2023 elections and Turkey's large
external financing need amid tighter global financing conditions.
Turkish banks are vulnerable to exchange-rate volatility due to
refinancing risks, given high exposure to external FC wholesale
funding amid exposure to investor sentiment, high sector FC
lending, given the impact on asset quality, and deposit
dollarisation, due to risks to FC liquidity.

Ziraat's reported common equity Tier 1 (CET1)/risk-weighted assets
(RWA) ratio was 12% at end-2021, or 9.6% net of forbearance,
representing only a moderate buffer over the regulatory minimum.
The total capital ratio - including FC additional Tier 1 capital,
which provides a partial hedge against lira depreciation - was
stronger at 15.7%. However, the bank has since received a TRY21.8
billion CET1 increase (about +200bp uplift to capital ratios
without forbearance) from the Turkish authorities in March 2022.
Fitch factors in ordinary capital support in Fitch's assessment of
Ziraat's capitalisation based on its record of support, including
TRY7 billion of CET1 in 2020 and EUR1.4 billion of additional Tier
1 in 2019.

Capitalisation is supported by reasonable pre-impairment operating
profitability (2021: equal to 3.7% of average gross loans), full
total reserves coverage of non-performing loans (NPLs) and fairly
limited free provisions (equal to about 40bp of RWAs).

Nevertheless, leverage is fairly high and has increased (end-2021:
equity/assets ratio of 6.8%), while downside risks remain
significant from lira depreciation (due to the inflation of FC
RWAs), although the risks are somewhat mitigated by regulatory
forbearance on RWA, and asset quality pressures. Consequently,
Fitch considers the bank's capital buffer to be only moderate.

Ziraat is exposed to refinancing risks, given its fairly high, but
falling, share of FC wholesale funding exposure (including FC bank
deposits; end-2021: 14% of total funding). Significant deposit
dollarisation also creates risks to FC liquidity in case of
outflows. Nevertheless, the bank has a record of external market
access despite challenging market conditions. At end-2021, its
available FC liquidity (USD12 billion, mainly comprising FC swaps
with the Central Bank of the Republic of Turkey; CBRT) covered
maturing FC debt due within 12 months (USD7 billion) plus about a
moderate share of FC customer deposits.

FC liquidity could come under pressure from a prolonged loss of
market access or FC deposit instability. FC liquidity also largely
comprises FX swaps with the CBRT, access to which could become
uncertain at times of systemic stress or material FC deposit
outflows.

Ziraat's asset quality metrics (end-2021: NPL ratio of 2.1%;
consolidated basis) have historically outperformed peer and sector
averages, underpinned by good-quality, largely subsidized agro
lending (end-2021: 15%), residential mortgages (11%), Credit
Guarantee Fund loans (5%), which carry a Turkish treasury guarantee
typically up to a 7% NPL cap and lending to payroll borrowers and
pensioners.

Fitch expects the NPL ratio to rise moderately in 2022 (although
restructured loans could also rise) amid risks to macro and
financial stability and high inflation. Stage 2 loans are also
fairly high (10%; two-thirds restructured) and concentrated. Risks
are heightened by the bank's exposure to SMEs (end-2021: 36%) and
the construction and real estate (20%), energy (8%) and tourism
(4%) sectors, and seasoning risks. High foreign-currency (FC)
lending (34%; sector: 41%) also increases risks, given that not all
borrowers are fully hedged against lira depreciation.

These risks are somewhat mitigated by the fact that exposures are
generally to large, diversified corporates or exporters with FX
revenues, or project finance loans carrying a government feed-in
tariff (energy loans) or revenue or debt assumption guarantee.
Total reserve coverage of NPLs increased to 163% at end-2021
(end-2020: 126%) partly reflecting higher average reserve coverage
of Stage 2 loans (18%).

Ziraat's operating profit/RWAs ratio decreased to 1.2% in 2021
(1.6% in 2020), reflecting margin pressure (due to the origination
of fixed-term low yielding loans, including CGF) and loan
impairment charges (equal to a high 61% of pre-impairment operating
profit).

Fitch expects its performance to improve in 2022, given lower
funding costs following the lira interest rate cuts (4Q21) and the
bank's short-term negative repricing gap, which should support a
widening of the net interest margin. The inflationary environment
should also support loan growth and revenues, including CPI linked
gains, offsetting pressure on costs. Impairments could also
moderate in 2022, although there are downside risks given macro
stability.

Ziraat has a sizeable, granular and stable (but contractually
short-term) deposit base (end-2021: 74% of total funding),
reflecting its leading franchise and fairly large public-sector
deposits (10% of customer deposits). It reports a solid
loans/deposits of 88% (consolidated basis), which decreased in 2021
due to rapid deposit growth, in part inflated by lira depreciation
(2021: 51%; 11% FX adjusted), given high FC deposits (61%, broadly
in line with the sector average). Fitch expects dollarisation to
remain high notwithstanding the recently introduced FX-protected
deposit scheme.

ENVIRONMENT, SOCIAL AND GOVERNANCE SCORES

Ziraat and ZKB have an ESG Relevance Score of '4' for Governance
Structure and Management Strategy (in contrast to typical Relevance
Scores of '3' for comparable banks), due to potential government
influence over the boards' effectiveness and management strategy in
the challenging Turkish operating environment. This has a negative
impact on the banks' credit profiles and is relevant to the ratings
in conjunction with other factors.

GOVERNMENT SUPPORT RATING (GSR), LTLC IDR

Ziraat's 'b-' GSR is two notches below Turkey's LTFC IDR, despite
the high propensity of the Turkish authorities to provide support
based on the bank's state ownership, policy role, systemic
importance, state-related funding and the record of capital
support, due to the sovereign's weak financial flexibility to
provide support in FC, in case of need, given its weak external
finances and weak sovereign FX reserves.

The bank's 'B+' LTLC IDR is equalised with the sovereign rating on
the basis of support, reflecting a stronger sovereign ability to
provide support in LC. The Negative Outlook reflects that on the
sovereign.

NATIONAL RATING

The affirmation of Ziraat's National Rating with a Stable Outlook
reflects Fitch's view that the bank's creditworthiness in LC
relative to other Turkish issuers' is unchanged.

RATING SENSITIVITIES

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

-- The bank's LT IDRs and senior debt ratings are primarily
    sensitive to the bank's standalone creditworthiness or VR. In
    addition, the ratings are sensitive to an increase in Fitch's
    view of government intervention risk, which currently caps
    most Turkish banks' LTFC IDRs one notch below the sovereign
    rating, and to a sovereign downgrade.

-- The VR could be downgraded due to further marked deterioration
    in the operating environment. It could also be downgraded in
    case of a material erosion in the bank's FC liquidity buffer,
    for example due to a prolonged funding market closure or
    deposit instability, or in the bank's capital buffer.

-- The bank's GSR could be downgraded if Fitch concludes stress
    in Turkey's external finances materially further reduces the
    reliability of sovereign support for Ziraat in FC.

NATIONAL RATING

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

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

-- Upgrades of the bank's LT IDRs and senior debt rating are
    unlikely in the near term given the Negative Outlooks, the
    Negative Outlook on Turkey's rating and Fitch's view of
    government intervention risk in the banking sector. Revision
    of the sovereign Outlook to Stable would reduce downward
    pressure on the bank's ratings, particularly if accompanied by
    a reduction in Fitch's view of government intervention risk,
    and could lead to similar actions on bank ratings.

-- Downside pressure on the bank's VR could ease in case of
    marked improvement in the operating environment, likely
    characterised by a reduction in macroeconomic and financial
    volatility, and potentially also a revision of the sovereign
    Outlook to Stable, particularly if this reduces risks to the
    bank's capital and FC liquidity.

An upgrade of the bank's GSR is unlikely given the Negative Outlook
on Turkey's sovereign rating and its weak ability to provide
support in FC, as reflected in its low net FX reserves.

SUBSIDIARIES & AFFILIATES: KEY RATING DRIVERS

ZKB's ratings are equalised with its parent's, reflecting its
strategic importance to, and integration with, the group and common
branding between the two entities. ZKB's Shareholder Support Rating
has also been affirmed at 'b'

SUBSIDIARIES AND AFFILIATES: RATING SENSITIVITIES

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

-- ZKB's ratings are sensitive to adverse changes in its parent's
    Long-Term IDRs.

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

-- ZKB's ratings are sensitive to positive changes in its
    parent's Long-Term IDRs.

VR ADJUSTMENTS

The operating environment score of 'b' for Turkish banks is lower
than the category implied score of 'bb', due to the following
adjustment reasons: Sovereign rating (negative) and macroeconomic
stability (negative). The latter adjustment reflects heightened
market volatility, high dollarisation and high risk of FX movements
in Turkey.

The business profile score of 'b+' has been assigned below the
implied 'bb' category implied score, due to the following
adjustment reason: business model (negative). This reflects the
bank's business model concentration on the high-risk Turkish
market.

BEST/WORST CASE RATING SCENARIO

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

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Ziraat's ratings are linked to the Turkish sovereign ratings and
ZKB's ratings are linked to those of its parent bank.

ESG CONSIDERATIONS

Ziraat and ZKB have an ESG Relevance Score of '4' for Governance
Structure and Management Strategy (in contrast to typical Relevance
Scores of '3' for comparable banks), due to potential government
influence over the boards' effectiveness and management strategy in
the challenging Turkish operating environment. This has a negative
impact on the banks' credit profiles and is relevant to the ratings
in conjunction with other factors.

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

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

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

TURKIYE HALK: Fitch Cuts Foreign Curr. IDR to 'B-', On Watch Neg.
-----------------------------------------------------------------
Fitch Ratings has downgraded Turkiye Halk Bankasi A.S.'s (Halk)
Long-Term Foreign-Currency Issuer Default Rating (LTFC IDR) to 'B-'
from 'B'. Fitch has also downgraded Halk's Viability Rating (VR) to
'b-' from 'b'. The bank's ratings remain on Rating Watch Negative
(RWN).

The downgrade reflects the bank's limited profitability and capital
buffers, given increased risks to its credit profile amid
heightened operating environment pressures.

The RWN on Halk's ratings continue to reflect Fitch's view of the
material risk of the bank becoming subject to a fine or other
punitive measure as a result of the ongoing US legal proceedings,
and uncertainty surrounding the sufficiency and timeliness of
support from the Turkish authorities in case of these measures.
Fitch expects to resolve the RWN once there is more clarity on the
outcome of the US investigations and the implications this may have
on the bank. Fitch may maintain the RWN longer than six months if
the US investigations are extended for a longer period.

KEY RATING DRIVERS

VR, LTFC IDR AND SENIOR DEBT RATING

The bank's 'B-' LTFC IDR is driven by its VR, or standalone credit
profile, but underpinned by government support at this rating
level.

The VR reflects Halk's weak capital position and profitability, and
weak loss absorption capacity in light of its exposure to Turkish
operating environment risks and sensitivity to lira depreciation.
It also considers the bank's solid franchise (end-2021: 10% of
sector assets), underpinned by its state-ownership and policy role,
and systemic importance, which underpin its business profile.

Fitch has downgraded the operating environment score for Turkish
banks to 'b'/negative, reflecting increased risks to macro and
financial stability at the lower sovereign rating level. Downside
risks for the VR remain high, given the concentration of the bank's
operations in the volatile Turkish operating environment, which
heightens risks to FC liquidity (due to high deposit
dollarisation), asset quality (due to high FC lending), and
capitalisation (although regulatory forbearance remains in place),
among others.

Halk's loss absorption capacity is weak and the bank has limited
buffers above the regulatory minimum, including net of forbearance.
Its Common Equity Tier 1 (CET1)/risk-weighted assets (RWA) and
total capital ratio declined to 8.8% and 13.9%, respectively, at
end-2021 (6.8% and 11.0%, net of forbearance), the lowest level
among large peers. Its leverage is also high and has increased
(end-2021: equity/assets ratio of 4.7%).

Capitalisation is sensitive to lira depreciation and growth and
internal capital generation is weak. However, loan growth has
slowed (2021: 4% FX-adjusted, mainly in lira; large private bank
peer average: 9%), partly reflecting capital constraints, and is
likely to remain below the sector average in 2022 following several
years of aggressive growth.

Pre-impairment operating profit (2021: equal to 2.8% of average
loans) provides a moderate buffer to absorb credit losses through
the bank's income statement, and non-performing loans are fully
covered by total reserves. In addition, Halk benefits from an
element of ordinary capital support from its shareholder. It
received TRY13.4 billion of CET1 capital from the Turkish
authorities in March 2022, which will result in about a 260bp
uplift to its capital ratios (2020: TRY7 billion of core capital;
2019: EUR900 million (additional Tier 1)). Forbearance on RWA will
continue to provide uplift to the bank's reported capital ratios,
while targeted growth in Credit Guarantee Fund (CGF) lending in
2022 also carries zero-risk weighting.

Asset quality pressures are high for the bank, given risks to
macroeconomic and financial stability, high inflation and seasoning
risks. The bank has exposure to troubled sectors, including
construction and real estate (7%), energy (7%) and tourism (6%). In
addition, FC lending - a high 30% at end-2021, albeit below the
sector average - heightens credit risks, given the lira
depreciation and the fact that not all borrowers will be fully
hedged. These risks are somewhat mitigated by the fact that
exposures are generally to large, diversified corporates or
exporters with FX revenues, or project finance loans carrying a
government feed-in tariff (energy loans) or revenue or debt
assumption guarantee. Stage 2 loans comprised 8.7% of loans, of
which 48% were restructured.

Halk's reported non-performing loan (NPL) ratio improved to 3.0% at
end-2021 (end-2020: 3.7%), versus 3.2% for the sector, despite
operating environment pressures, reflecting collections and loan
growth.

The bank's asset quality metrics have historically compared
reasonably with the sector average supported by good-quality
subsidised SME loans, housing loans and loans to payroll and
pensioners customers. At end-2021, these accounted for 15%, 10% and
3% of gross loans, respectively. CGF lending, which carries a
government guarantee typically up to a 7% NPL cap, comprised a
further 8% of end-2021 loans. The bank's below-sector and
below-peer average level of Stage 2 loans could partly also reflect
differences in loan classification approach, in Fitch's view.

Total reserve coverage of NPLs increased to 135% at end-2021 from
98% at end-2020, reflecting higher stage 2 coverage (14%).

Halk's profitability is very weak (2021: operating profit/RWAs
ratio of 0.3%; sector: 2.1%). Having reported very weak
profitability in 9M21, mainly reflecting margin pressure mainly
resulting from the origination of fixed-term low yielding loans
(including CGF loans), profitability recovered in 4Q21, mainly
reflecting CPI-linked securities gains and core spread expansion
following the lira rate cuts, given its negative repricing gap.
Nevertheless, its net interest margin (3.9%) remained among the
lowest of the large bank peers in 2021.

Impairments weigh on profitability (2021: equal to 89% of
pre-impairment operating profit, or 2.5% of average gross loans).
The bank is budgeting for the cost of risk to fall in 2022 but
there are downside risks given macro and financial stability
risks.

Fitch expects profitability to recover slightly in 2022 amid the
inflationary environment, which should support loan and revenue
growth, and given lower lira funding costs, despite pressure on the
cost base.

Halk relies on short-term but stable customer deposits (end-2021:
70%; 11% market share), including from state-related entities (5%),
and benefits from an above-sector-average share of lira deposits.
The loans/deposits ratio improved (end-2021: 97%), although this
partly reflected the inflation of FC deposits (a high 60%, although
below the sector average) due to lira depreciation. Fitch expects
dollarisation to remain high, notwithstanding the recently
introduced FX-protected deposit scheme.

Halk has low and declining FC wholesale funding exposure (9% of
total funding), mainly comprising bank deposits, reflecting its
limited external market access since 2017, which limits refinancing
risks. Nevertheless, significant deposit dollarisation creates
risks to FC liquidity in case of outflows. At end-2021 available FC
liquidity (USD4.8 billion) covered maturing FC wholesale debt over
12 months (USD3.1 billion, bank-only basis) and a moderate share of
FC deposits. FC liquidity could come under pressure from a
prolonged loss of market access or FC deposit instability. In
addition, FC liquidity largely comprises FX swaps with the Central
Bank of the Republic of Turkey, access to which could become
uncertain at times of systemic stress or material FC deposit
outflows.

Halk's VR is one notch below the 'b' implied rating due to the
weakest link adjustment, reflecting the capitalisation and leverage
key rating driver, assessed by Fitch at b-'.

LTLC IDR, GOVERNMENT SUPPORT RATING (GSR)

Halk's 'b-' GSR reflects the high propensity of the Turkish
authorities to provide support given the bank's state ownership,
systemic importance, policy mandate, role in supporting the economy
and the record of capital support. However, it is two notches below
Turkey's LTFC IDR, reflecting the sovereign's weak financial
flexibility to provide support in FC, in case of need, given its
weak external finances and weak sovereign FX reserves.

Halk's GSR remains on RWN, reflecting (i) uncertainty about the
severity and nature of punitive measures, if any, to be taken
against the bank as a result of the US case; and (ii) geopolitical
tensions which have eased over the past year, but remain unsolved
with US and EU on key issues. This could escalate and raise
uncertainty about the authorities' ability and propensity to
provide sufficient and timely support in case a material fine or
other punitive measures are imposed on Halk.

The bank's 'B+' LTLC IDR is equalised with the sovereign rating on
the basis of support, reflecting a stronger sovereign ability to
provide support in LC, and is also on RWN.

NATIONAL RATINGS

The RWN on Halk's National Rating reflects the RWN on its LTLC IDR.
The National Rating reflects Fitch's view that the bank's
creditworthiness in local currency relative to other Turkish
issuers has not changed.

ESG

Halk has an ESG relevance score of '5' for Governance Structure in
contrast to a typical score of '3' for comparable banks. This
reflects the elevated legal risk of a large fine, which drives the
RWN. It also considers potential government influence over the
board's effectiveness in the volatile Turkish operating
environment.

Halk has an ESG Relevance Score of '4' for Management Strategy (in
contrast to a typical Relevance Score of '3' for comparable banks),
due to potential government influence over its management strategy
in the challenging Turkish operating environment, which has a
negative impact on the credit profile, and is relevant to the
ratings in conjunction with other factors.

RATING SENSITIVITIES

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

-- Halk's LTFC IDR is sensitive to a change in its VR and to our
    assessment of the sovereign's ability and willingness to
    provide support.

-- The VR could be downgraded due to further marked deterioration
    in the operating environment, particularly if it leads to
    further erosion of the bank's capital and FC liquidity
    buffers. The VR is also sensitive to further weakening in
    Halk's capitalisation, given its weak buffers relative to its
    risk profile and regulatory minimum, if not offset on a timely
    basis by state support, and to FC deposit instability if this
    leads to material erosion of its FC liquidity.

-- The VR could also be downgraded if, as a result of the US
    investigations, it becomes subject to a fine or other punitive
    measure that materially weaken its solvency or negatively
    affect its standalone credit profile. The case is ongoing and
    timing on the outcome is uncertain.

GSR AND LTLC IDR

The bank's GSR could be downgraded if Fitch concludes stress in
Turkey's external finances materially further reduces the
reliability of sovereign support for Halk in FC. It could also be
downgraded if the bank does not receive sufficient and timely
support to offset the impact of any fine or other punitive measures
imposed as a result of the US investigation.

A downgrade of Halk's 'b-' GSR would only result in a downgrade of
its LTFC IDR if the VR was simultaneously downgraded.

Halk's LTLC IDR could be downgraded if Turkey's LTLC IDR was
downgraded, Fitch believes the sovereign's propensity to provide
support in LC has reduced, or Fitch's view of the likelihood of
intervention risk in the banking sector increases

NATIONAL RATINGS

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

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

-- Upgrades of the bank's ratings are unlikely in the near term
    given the RWN, and weak capitalisation for its risk profile.
    The removal from RWN is dependent upon increased certainty
    that the outcome of the investigations will not materially
    weaken Halk's capital, or other aspects of its VR.

GSR AND LTLC IDR

Halk's GSR could be removed from RWN if Fitch believes there is a
clear commitment by the Turkish authorities to provide support to
the bank to offset potential punitive actions. The latter would be
assessed relative to the sovereign's ability to provide support in
FC.

An upgrade of the sovereign's LTLC IDR would likely lead to similar
action on the bank's LTLC IDR.

VR ADJUSTMENTS

Halk's VR is one notch below the 'b' implied rating due to the
weakest link adjustment, reflecting the capitalisation and leverage
key rating driver, assessed by Fitch at b-'.

The operating environment score of 'b' for Turkish banks is lower
than the category implied score of 'bb', due to the following
adjustment reasons: Sovereign rating (negative) and macroeconomic
stability (negative). The latter adjustment reflects heightened
market volatility, high dollarisation and high risk of FX movements
in Turkey.

BEST/WORST CASE RATING SCENARIO

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

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Halk has ratings linked to the Turkish sovereign rating, given the
ratings either rely on or are sensitive to Fitch's assessment of
sovereign support or country risks.

ESG CONSIDERATIONS

Halk has an ESG relevance score of '5' for Governance Structure in
contrast to a typical score of '3' for comparable banks. This
reflects the elevated legal risk of a large fine, which drives the
RWN. It also considers potential government influence over the
board's effectiveness in the volatile Turkish operating
environment.

Halk has an ESG Relevance Score of '4' for Management Strategy (in
contrast to a typical Relevance Score of '3' for comparable banks),
due to potential government influence over its management strategy
in the challenging Turkish operating environment, which has a
negative impact on the credit profile, and is relevant to the
ratings in conjunction with other factors.

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

TURKIYE VAKIFLAR: Fitch Affirms 'B' Foreign Curr. IDR, Outlook Neg.
-------------------------------------------------------------------
Fitch Ratings has affirmed Turkiye Vakiflar Bankasi T.A.O.'s
(Vakifbank) Long-Term Foreign-Currency Issuer Default Rating (LTFC
IDR) at 'B' and Long-Term Local-Currency (LTLC) IDR at 'B+'. The
Outlooks are Negative.

Fitch has also downgraded the Viability Rating (VR) to 'b' from
'b+' and removed it from Rating Watch Negative (RWN). Fitch placed
Vakifbank's VR on RWN in February 2022 following the Turkish
sovereign downgrade.

The VR downgrade reflects heightened risks to the bank's credit
profile resulting from its concentration in the volatile and
challenging Turkish market operating environment. As the
second-largest systemically important bank in Turkey, Fitch
considers the bank's credit profile and strength of its capital and
FC liquidity buffers as commensurate with, but not above the risks
of the Turkish operating environment. In addition, Vakifbank has a
high share of FC wholesale funding, exposing it to material
refinancing risks, although the risks are somewhat mitigated by the
diversification of funding by type and tenor.

KEY RATING DRIVERS

Vakifbank's LTFC IDR and senior debt rating are driven by its 'b'
VR, or standalone credit profile. At this rating, its LTFC IDR is
constrained but not capped by Fitch's view of government
intervention risk in the banking sector.

Vakifbank's VR reflects the bank's strong domestic franchise
(end-2021: 11% of sector assets), reasonable asset quality,
moderate capitalisation and profitability and a reasonable funding
and liquidity profile. However, it also reflects the bank's
concentration in the volatile and challenging Turkish operating
environment.

Risks to the VR remain significant, given Vakif's concentration in
the volatile Turkish market, as reflected in Fitch's downgrade of
the operating environment score for Turkish banks to 'B'/negative,
which signals increased risks to macroeconomic and financial
stability at the lower sovereign rating level. Exposure to
operating environment risks is the main driver of the Negative
Outlook on the bank's LTFC IDR.

Furthermore, risks remain skewed to the downside given policy
uncertainty in the run-up to the 2023 elections and Turkey's large
external financing need amid tighter global financing conditions.
Turkish banks are vulnerable to exchange-rate volatility due to
refinancing risks, given high exposure to external FC wholesale
funding amid exposure to investor sentiment, high sector FC
lending, given the impact on asset quality, and deposit
dollarisation, due to risks to FC liquidity.

Vakifbank's common equity Tier 1 (CET1)/risk-weighted assets (RWA)
ratio was 10.0% at end-2021 (8.1% net of forbearance) representing
a limited buffer over the regulatory minimum and to absorb
unexpected shocks. The total capital ratio (14.7%, including
forbearance) was higher and includes FC subordinated Tier 2 debt
and FC additional Tier 1 capital, which provide a partial hedge
against lira depreciation.

The bank has since received a TRY13.4 billion CET1 increase (about
+250bp uplift to capital ratios) from the Turkish authorities
(March 2022). Fitch factors in ordinary capital support in Fitch's
assessment of Vakifbank's capitalisation based on its record of
support, including TRY7 billion of CET1 in 2020 and EUR700 million
of additional Tier 1 in 2019.

Capitalisation is also supported by moderate pre-impairment
operating profitability (2021: equal to 2.3% of average gross
loans), full total reserves coverage of non-performing loans (NPLs)
and limited free provisions (equal to about 32bp of RWAs).

However, leverage is high (end-2021: equity/assets ratio of 5.6%),
and has increased, while downside risks to capitalisation remain
significant from lira depreciation (due to the inflation of FC
RWAs), although the risks are somewhat mitigated by regulatory
forbearance on RWAs, and asset-quality pressures given credit
concentrations. Consequently, Fitch considers capitalisation to be
only adequate.

Vakifbank is exposed to refinancing risks given its high, but
falling share of FC wholesale funding exposure (over 20% of total
funding), the highest among large bank peers. These risks are
somewhat mitigated by the diversification of funding by instrument
and tenor and the bank has a solid record of external market access
despite challenging market conditions. Significant deposit
dollarisation also creates risks to FC liquidity in case of
outflows. However, at end-2021 the bank's available FC liquidity
(USD6.4 billion) covered maturing FC wholesale debt over 12 months
(USD3.9 billion, bank-only basis; excluding interbank deposits)
plus about a tenth of FC customer deposits.

Nevertheless, FC liquidity could come under pressure from a
prolonged loss of market access or FC deposit instability. FC
liquidity also largely comprises of FX swaps with the Central Bank
of the Republic of Turkey, access to which could become uncertain
at times of systemic stress or material FC deposit outflows.

Vakifbank's reported NPL ratio improved to 3.1% at end-2021
(end-2020: 4.0%), despite operating-environment pressures,
reflecting loan growth and collections. Fitch expects the NPL ratio
to rise moderately in 2022 given risks to macro and financial
stability and high inflation.

Asset quality pressures are heightened by seasoning risks, exposure
to SMEs (end-2021: 25% of loans) and unsecured retail borrowers
(16%), which are sensitive to the growth environment and
unemployment, respectively, and the transportation (13%),
construction (11%), energy (7%), real-estate (4%) and tourism (4%)
sectors. Stage 2 loans are also fairly high (12% of loans, a third
restructured).

While FC lending (end-2021: 37% of loans) is slightly lower than at
private bank peers, it is significant and heightens risks given
that not all borrowers are fully hedged against lira depreciation,
albeit the risks are somewhat mitigated by exposures generally
being to large, diversified corporates or exporters with FX
revenues, or project-finance loans under government feed-in tariff
(energy loans) or with revenue- or debt-assumption guarantees.

Total reserve coverage of NPLs increased to 139% at end-2021, a
level that compares well with large bank peers, as Vakifbank
increased provisioning in response to heightened market
volatility.

Vakifbank's operating profit/RWAs ratio decreased to 1.0% in 2021
(1.8% in 2020; including some uplift from forbearance on RWAs),
significantly below the sector average, mainly reflecting margin
pressure (due to the origination of fixed-term low yielding loans,
including Credit Guarantee Fund) and loan impairment charges (equal
to a 51% of pre-impairment operating profit). The bank reports an
average cost of funding above large private bank peers due to its
higher share of lira deposits and lower share of demand deposits.

Fitch expects Vakifbank's performance to improve in 2022, given
lower funding costs following the lira interest rate cuts (4Q21)
and the bank's short-term negative repricing gap, which should
support a widening of its net interest margin. The inflationary
environment should also support loan growth and revenues, including
CPI linked gains, offsetting pressure on costs. Impairments could
moderate in 2022, although there are downside risks given risks to
macro stability.

Vakifbank has a large, contractually short term but stable,
granular deposit base (end-2021: 60% of total funding; 11% market
share), and an above peer-average (large banks) share of lira
deposits, reflecting its solid franchise and state-related deposits
(14%). FC deposits are nevertheless high (58%). Vakifbank's
loans/deposits ratio underperforms peers, due to its high share of
wholesale funding (40% of total funding; over half in FC).

ENVIRONMENT, SOCIAL AND GOVERNANCE SCORES

Vakifbank has an ESG Relevance Score of '4' for Governance
Structure and Management Strategy (in contrast to typical Relevance
Scores of '3' for comparable banks), due to potential government
influence over the board's effectiveness and management strategy in
the challenging Turkish operating environment. The latter has a
negative impact on the banks' credit profiles and is relevant to
the ratings in conjunction with other factors.

GOVERNMENT SUPPORT RATING (GSR)

Vakifbank's 'b-' GSR is two notches below Turkey's LTFC IDR,
despite the bank's state ownership, policy role, systemic
importance, state-related funding and the record of capital
support, due to the sovereign's weak financial flexibility to
provide support in FC, in case of need, given its weak external
finances and weak sovereign FX reserves.

The bank's 'B+' LTLC IDR is equalised with the sovereign rating on
the basis of support, reflecting a stronger sovereign ability to
provide support in LC. The Negative Outlook reflects that on the
sovereign.

SUBORDINATED DEBT RATING

The subordinated debt rating has been downgraded to 'CCC+'/RR6 from
'B-'/RR5 and removed from RWN. The notes are notched down twice
from Vakifbank's VR anchor rating, reflecting Fitch's expectation
of poor recoveries in case of default.

NATIONAL RATINGS

The affirmation of Vakifbank 's National Rating with a Stable
Outlook reflects Fitch's view that the bank's creditworthiness in
LC relative to other Turkish issuers is unchanged.

RATING SENSITIVITIES

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

-- The bank's LT IDRs and senior debt ratings are primarily
    sensitive to the bank's standalone creditworthiness or VR. In
    addition, the ratings are sensitive to an increase in Fitch's
    view of government intervention risk, which currently caps
    most Turkish banks' LTFC IDRs one notch below the sovereign
    rating, and to a sovereign downgrade.

-- The VR could be downgraded due to further marked deterioration
    in the operating environment. It could also be downgraded in
    case of a material erosion in the bank's FC liquidity buffer,
    for example due to a prolonged funding market closure or
    deposit instability, or in the bank's capital buffer.

-- The bank's GSR could be downgraded if Fitch concludes stress
    in Turkey's external finances materially further reduces the
    reliability of sovereign support for Vakifbank in FC.

SUBORDINATED DEBT

The subordinated debt rating is sensitive to a change in
Vakifbank's VR.

NATIONAL RATING

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

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

-- Upgrades of the bank's LT IDRs and senior debt rating are
    unlikely in the near term given the Negative Outlooks, the
    Negative Outlook on Turkey's rating and Fitch's view of
    government intervention risk in the banking sector. Revision
    of the sovereign Outlook to Stable would reduce downward
    pressure on the bank's ratings, particularly if accompanied by
    a reduction in Fitch's view of government intervention risk,
    and could lead to similar actions on bank ratings.

-- Downside pressure on the bank's VR could ease in case of
    marked improvement in the operating environment, likely
    characterised by a reduction in macroeconomic and financial
    volatility, and potentially also a revision of the sovereign
    Outlook to Stable, particularly if this reduces risks to the
    bank's capital and FC liquidity.

-- An upgrade of the bank's GSR is unlikely given the Negative
    Outlook on Turkey's sovereign rating and its weak ability to
    provide support in FC, as reflected in its low net FX
    reserves.

VR ADJUSTMENTS

`The operating environment score of 'b' for Turkish banks is lower
than the category implied score of 'bb', due to the following
adjustment reasons: Sovereign rating (negative) and macroeconomic
stability (negative). The latter adjustment reflects heightened
market volatility, high dollarisation and high risk of FX movements
in Turkey.

The business profile score of 'b+' has been assigned below the
implied 'bb' category implied score, due to the following
adjustment reason: business model (negative). This reflects the
bank's business model concentration on the high-risk Turkish
market.

BEST/WORST CASE RATING SCENARIO

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

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Vakifbank has ratings linked to the Turkish sovereign rating, given
the ratings either rely on or are sensitive to Fitch's assessment
of sovereign support or country risks.

ESG CONSIDERATIONS

Vakifbank has an ESG Relevance Score of '4' for Governance
Structure and Management Strategy (in contrast to typical Relevance
Scores of '3' for comparable banks), due to potential government
influence over the board's effectiveness and management strategy in
the challenging Turkish operating environment. The latter has a
negative impact on the banks' credit profiles and is relevant to
the ratings in conjunction with other factors.

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



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

CALEDONIAN MODULAR: JRL Group Buys Business, 200 Jobs Saved
-----------------------------------------------------------
Anna Cooper at TheBusinessDesk.com report that 200 jobs have been
saved after administrators agreed the sale of the UK's largest
modular construction company Caledonian Modular.

The Newark-based offsite building solution provider has been sold
to the JRL Group after falling into administration in March,
TheBusinessDesk.com relates.

JRL is a GBP280 million-turnover group with 14 divisions including
J Reddington, Midgard, and London Tower Cranes.

According to TheBusinessDesk.com, joint administrator Mike Denny,
managing director at Alvarez & Marsal, said: "The twin challenges
of the pandemic and rising inflation have placed strain on balance
sheets for businesses across the UK, including those in the
construction sector."


DERBY COUNTY FOOTBALL: Council Tries to Help Find Buyer for Stadium
-------------------------------------------------------------------
BBC News reports that Derby City Council's chief executive has
played down suggestions it could buy Derby County Football Club's
stadium.

Weekend reports saw the council linked with a bid to buy Pride Park
from former owner Mel Morris, who put the club into administration
last year, BBC relates.

However, in a statement Paul Simpson said it was the council's
"preference" at this stage for a buyer to purchase the club and
ground, BBC notes.

Last week, joint administrators Quantuma said they were not in
position to announce a preferred bidder for the club, with the sale
of the stadium believed to be a hindrance to any deal, BBC
recounts.

According to BBC, in a statement released to the Local Democracy
Reporting Service, Mr. Simpson said the council has been working
with "Team Derby" -- made up of business, civic and political
leaders in the city -- to try and help the Rams survive despite its
"extremely challenging financial position".

"We cannot underestimate the impact of a successful football club
in the city; not just in spreading the Derby brand across a wide
stage, but also in the value it adds to our local economy and to
our communities," BBC quotes Mr. Simpson as saying.

"Our preference is for a buyer to purchase the club and stadium
outright."

                About Derby County Football Club

Founded in 1884, Derby County Football Club is a professional
association football club based in Derby, Derbyshire, England.  The
club competes in the English Football League Championship  (EFL,
the 'Championship'), the second tier of English football.  The team
gets its nickname, The Rams, to show tribute to its links with the
First Regiment of Derby Militia, which took a ram as its mascot.
Mel Morris is the owner while Wayne Rooney is the manager of the
club.  

On Sept. 22, 2021, the club went into administration.  The EFL
sanctioned a 12-point deduction on the club, putting the team at
the bottom of the Championship.  Andrew Hosking, Carl Jackson and
Andrew Andronikou, managing directors at business advisory firm
Quantuma, had been appointed joint administrators to the club.


DURHAM MORTGAGES: DBRS Confirms B(low) Rating on Class F Notes
--------------------------------------------------------------
DBRS Ratings Limited took the following rating actions on the notes
issued by Durham Mortgages A plc (the Issuer):

-- Class A Notes confirmed at AAA (sf)
-- Class B Notes confirmed at AA (low) (sf)
-- Class C Notes confirmed at A (low) (sf)
-- Class D Notes confirmed at BBB (low) (sf)
-- Class E Notes confirmed at BB (sf)
-- Class F Notes confirmed at B (low) (sf)
-- Class X Notes upgraded to A (high) (sf) from BB (high) (sf)

The rating on the Class A Notes addresses the timely payment of
interest and the ultimate payment of principal by the legal final
maturity date in May 2054. The rating on the Class B Notes
addresses the ultimate payment of interest and principal, and the
timely payment of interest while the senior-most class outstanding.
The ratings on the Class C, Class D, Class E, and Class F Notes
address the ultimate payment of interest and principal.

The upgrade and confirmations follow an annual review of the
transaction and are based on the following analytical
considerations:

-- Portfolio performance, in terms of delinquencies, defaults, and
losses, as of the November 2021 payment date;

-- Portfolio default rate (PD), loss given default (LGD), and
expected loss assumptions on the remaining receivables;

-- Current available credit enhancement to the notes to cover the
expected losses at their respective rating levels; and

-- Current economic environment and an assessment of sustainable
performance, as a result of the Coronavirus Disease (COVID-19)
pandemic.

The Issuer is a securitization of owner-occupied residential
mortgages originated by Bradford & Bingley plc and Mortgage
Express, LCC; sold by Dorset Home Loans Limited; and serviced by
Topaz Finance Limited (Topaz).

PORTFOLIO PERFORMANCE

As of the November 2021 payment date, loans two to three months in
arrears represented 0.5% of the outstanding portfolio balance and
loans at least three months in arrears represented 2.1% of the
outstanding portfolio balance. Cumulative net losses were 0.0%.

PORTFOLIO ASSUMPTIONS AND KEY DRIVERS

DBRS Morningstar conducted a loan-by-loan analysis of the remaining
pool of receivables and updated its base case PD and LGD
assumptions to 8.1% and 10.5%, respectively.

CREDIT ENHANCEMENT

As of the November 2021 payment date, credit enhancement to the
Class A, Class B, Class C, Class D, Class E, and Class F Notes was
16.7%, 12.3%, 8.5%, 5.7%, 3.6%, and 2.4%, respectively, up from
15.0%, 11.0%, 7.7%, 5.1%, 3.2%, and 2.2%, respectively, at the time
of DBRS Morningstar's initial rating. Credit enhancement is
provided by subordination of the junior notes and the general
reserve fund.

The transaction benefits from a liquidity reserve fund, which
covers senior fees and interest on the Class A Notes. The liquidity
reserve fund is funded to its target level of GBP 8.6 million,
equal to 0.5% of the initial Class A Notes' balance.

The general reserve fund is Nona mortising and covers senior fees,
interest on the Class A to Class F Notes (where the Class B to
Class F Notes are subject to a principal deficiency ledger (PDL)
condition of 10%), and principal losses via the PDLs on the Class A
to Class F Notes. The general reserve fund is funded to its target
balance of GBP 25.0 million, equal to 1.25% of the initial
portfolio balance.

Citibank N.A./London Branch (Citibank London) acts as the account
bank for the transaction. Based on DBRS Morningstar's private
rating on Citibank London, the downgrade provisions outlined in the
transaction documents, and other mitigating factors inherent in the
transaction structure, DBRS Morningstar considers the risk arising
from the exposure to the account bank to be consistent with the
rating assigned to the Class A Notes, as described in DBRS
Morningstar's "Legal Criteria for European Structured Finance
Transactions" methodology.

The rating on the Class X Notes at A (high) (sf) materially
deviates from the higher rating implied by the quantitative model.
DBRS Morningstar considers a material deviation to be a rating
differential of three or more notches between the assigned rating
and the rating implied by a quantitative model that is a
substantial component of a rating methodology; in this case, the
rating addresses the ultimate payment of interest and principal on
or before the final maturity date as defined in the transaction
legal documents. DBRS Morningstar typically expects bonds rated in
the AA (sf) category in the respective rating scenario to be able
to pay interest timely at the time they are the most senior bond in
the transaction.

DBRS Morningstar analyzed the transaction structure in Intex
DealMaker.

The Coronavirus Disease (COVID-19) and the resulting isolation
measures have caused an immediate economic contraction, leading in
some cases to increases in unemployment rates and income reductions
for many borrowers. DBRS Morningstar anticipates that delinquencies
may continue to increase in the coming months for many RMBS
transactions. The ratings are based on additional analysis to
expected performance as a result of the global efforts to contain
the spread of the coronavirus.

Notes: All figures are in British pound sterling unless otherwise
noted.


GEMGARTO 2018-1: DBRS Confirms BB(high) Rating on Class E Notes
---------------------------------------------------------------
DBRS Ratings Limited confirmed its ratings on the bonds issued by
Gemgarto 2018-1 plc and Gemgarto 2021-1 plc (Gemgarto 2018-1 and
Gemgarto 2021-1, respectively) as follows:

Gemgarto 2018-1:

-- Class A Notes at AAA (sf)
-- Class B Notes at AA (sf)
-- Class C Notes at AA (low) (sf)
-- Class D Notes at A (sf)
-- Class E Notes at BB (high) (sf)

The ratings on the Class A, Class B, Class C, Class D, and Class E
notes address the timely payment of interest and the ultimate
payment of principal on or before the legal final maturity date.

Gemgarto 2021-1:

-- Class A Notes at AAA (sf)
-- Class B Notes at AA (sf)
-- Class C Notes at A (sf)
-- Class D Notes at A (low) (sf)
-- Class X Notes at BB (high) (sf)

The rating on the Class A Notes addresses the timely payment of
interest and the ultimate repayment of principal on or before the
legal final maturity date. The ratings on the Class B, Class C, and
Class D notes address the timely payment of interest once most
senior and the ultimate repayment of principal on or before the
legal final maturity date. The rating on the Class X Notes
addresses the ultimate payment of interest and repayment of
principal on or before the legal final maturity date.

The confirmations follow an annual review of the transactions and
are based on the following analytical considerations:

-- Portfolio performance, in terms of delinquencies, defaults, and
losses, as of the December 2021 payment date;

-- Portfolio default rate (PD), loss given default (LGD), and
expected loss assumptions on the remaining receivables and on
potential portfolio migration based on replenishment criteria;

-- Current available credit enhancement to the notes to cover the
expected losses at their respective rating levels;

-- Current economic environment and an assessment of sustainable
performance, as a result of the Coronavirus Disease (COVID-19)
pandemic; and

-- No revolving termination events have occurred.

The transactions are securitizations of first-ranking
owner-occupied residential mortgages originated and serviced by
Kensington Mortgage Company Limited (KMC) in England, Wales, and
Scotland. Notable features of the portfolio are Help-to-Buy (HTB),
Right-to-Buy mortgages, borrowers with adverse borrower features
including self-employed borrowers, and borrowers with prior county
court judgments (CCJs) and the presence of arrears at closing,
albeit in limited proportions.

Both transactions are currently in their four-year replenishment
periods, which are scheduled to end on the payment date in
September 2022 for Gemgarto 2018-1 and in March 2025 for Gemgarto
2021-1. During the replenishment period, principal funds are first
allocated toward the partial amortization of the Class A Notes
according to a target notional schedule before being applied to
purchase additional loans. The end of the replenishment period also
coincides with a step-up in the margin of the rated notes.

The Gemgarto 2018-1 transaction closed in July 2018 and its legal
final maturity is on the September 2065 payment date, and its first
call date is on the September 2022 payment date.

The Gemgarto 2021-1 transaction closed in February 2021 and its
legal final maturity is on the December 2067 payment date, and its
first call date is on the March 2025 payment date.

PORTFOLIO PERFORMANCE

Both transactions saw an increasing trend in delinquencies over
2020 and 2021 in the context of the coronavirus pandemic.

In the case of the Gemgarto 2018-1 transaction, the 90+ delinquency
ratio represented 3.0% of the outstanding portfolio balance as of
the December 2021 payment date, up from 2.3% at the last annual
review, and total arrears were 4.8% of the outstanding portfolio
balance, up from 4.4% at the last annual review.

In the case of the Gemgarto 2021-1 transaction, the 90+-day
delinquency ratio represented 1.2% of the outstanding portfolio
balance as of the December 2021 payment date, up from 0.0% at
closing, and total arrears represented 5.1% of the outstanding
portfolio balance, up from 2.2% at closing.

Exposure to borrowers with prior CCJs decreased in both
transactions. As of the December 2021 payment date, it stood at
10.0% and 10.5% in Gemgarto 2018-1 and Gemgarto 2021-1,
respectively, down from 11.0% and 11.5% at last annual review and
at closing, respectively.

As of the December 2021 payment date, there were no realized losses
in either transaction.

PORTFOLIO ASSUMPTIONS AND KEY DRIVERS

DBRS Morningstar has analyzed stressed collateral portfolios to
assess potential deterioration in portfolio characteristics during
the revolving periods, subject to portfolio-wide covenants. DBRS
Morningstar also conducted a loan-by-loan analysis of the remaining
pool of receivables.

In the case of Gemgarto 2018-1, DBRS Morningstar updated its base
case PD and LGD assumptions to 8.0% and 13.1% from 7.6% and 16.2%,
respectively, at the last annual review.

In the case of Gemgarto 2021-1, DBRS Morningstar updated its base
case PD and LGD assumptions to 6.2% and 10.2% from 6.3% and 15.0%,
respectively, at closing.

For both transactions, DBRS Morningstar's analysis factors in the
presence of HTB mortgages (12.5% and 13.1%, for Gemgarto 2018-1 and
Gemgarto 2021-1, respectively).

CREDIT ENHANCEMENT

As of the December 2021 payment date, the credit enhancement (CE)
increased as follows since the last annual review and closing for
Gemgarto 2018-1 and Gemgarto 2021-1, respectively:

Gemgarto 2018-1

-- CE to the Class A Notes increased to 21.2% from 20.2%
-- CE to the Class B Notes increased to 15.3% from 14.6%
-- CE to the Class C Notes increased to 12.4% from 11.8%
-- CE to the Class D Notes increased to 10.0% from 9.5%, and
-- CE to the Class E Notes increased to 5.9% from 5.6%

Gemgarto 2021-1

-- CE to the Class A Notes increased to 13.3% from 12.6%,
-- CE to the Class B Notes increased to 8.6% from 8.1%,
-- CE to the Class C Notes increased to 5.9% from 5.6%,
-- CE to the Class D Notes increased to 5.4% from 5.1%, and
-- CE to the Class X Notes remained at 0.0%

The increase in CE is due to the repayment of the Class A Notes, as
per the target notional schedule during the replenishment period.
Moreover, the Class A Notes in Gemgarto 2018-1 benefited from a
further amortization beyond the target notional schedule at the
September 2021 payment as no additional loans were purchased and
the principal accumulation account reached its maximum. GBP 11.5
million of remaining proceeds went to repay the Class A Notes,
which is expected to remain at its current outstanding balance for
the next two payment dates, before the end of the revolving period.
DBRS Morningstar understands that there were no additional loans
purchased on the September 2021 payment date due to a breach of the
HTB concentration limit, which prevented further purchase until it
was cured.

In both transactions, the General Reserve Fund (GRF) is Nona
mortising and available to cover senior fees and senior swap
payments as well as interest and principal losses via the principal
deficiency ledgers (PDLs) on the Class A to Class F notes in
Gemgarto 2018-1 and on the Class A to Class E notes in Gemgarto
2021-1. Once the Class E Notes in Gemgarto 2018-1 or the Class D
Notes in Gemgarto 2021-1 are fully redeemed, the target balance of
the GRF becomes zero. As of the December 2021 payment date, both
GRFs were at their target level, equal to 2% of the initial balance
of the Class A to Class F notes in Gemgarto 2018-1 and the Class A
to Class E notes in Gemgarto 2021-1. As of the December 2021
payment date, all PDLs were clear in both transactions.

In both transactions, a Liquidity Reserve Fund (LRF) provides
additional liquidity support to cover senior fees, senior swap
payments, and interest on the Class A and Class B notes. The LRF
will be funded through available principal funds to 2% of the
outstanding Class A and Class B Notes balance, if the GRF balance
falls below 1.5% of the outstanding Class A to Class F notes in
Gemgarto 2018-1 or Class A to Class E notes in Gemgarto 2021-1.

Both transactions are exposed to interest rate risk as a portion of
the portfolio in each transaction pays a fixed rate of interest on
a short-term basis and a floating rate of interest indexed to the
Kensington Standard Rate or the three-month Term Sonia Reference
Rate or a synthetic Libor, while the rated notes are indexed to
Sonia.

In addition, loans can be subject to a variation in the length of
the fixed-rate period, the applicable interest rate, and maturity
date through a "Product Switch" up to 20% of the Class A to Class F
notes original balance in the case of Gemgarto 2018-1, Class A to
Class E notes original balance in the case of Gemgarto 2021-1. As
of the December 2021 payment date, Product Switch loans represented
5.9% and 0.0% for Gemgarto 2018-1 and Gemgarto 2021-1,
respectively.

Citibank N.A./London Branch (Citibank London) acts as the account
bank for both transactions. Based on DBRS Morningstar's private
rating of Citibank London, the downgrade provisions outlined in the
transaction documents, and other mitigating factors inherent in the
transaction structures, DBRS Morningstar considers the risk arising
from the exposure to the account bank to be consistent with the
ratings assigned to the Class A Notes in both transactions, as
described in DBRS Morningstar's "Legal Criteria for European
Structured Finance Transactions" methodology.

BNP Paribas, London Branch (BNP Paribas London) acts as the swap
counterparty for both transactions. DBRS Morningstar's private
rating on BNP Paribas London is above the First Rating Threshold as
described in DBRS Morningstar's "Derivative Criteria for European
Structured Finance Transactions" methodology.

The Coronavirus Disease (COVID-19) and the resulting isolation
measures have caused an immediate economic contraction, leading in
some cases to increases in unemployment rates and income reductions
for many borrowers. DBRS Morningstar anticipates that delinquencies
may continue to increase in the coming months for many structured
finance transactions. The ratings are based on additional analysis
to expected performance as a result of the global efforts to
contain the spread of the coronavirus.

Notes: All figures are in British pound sterling unless otherwise
noted.



GREENSILL CAPITAL: Accused of Fraud by Tokio Marine
---------------------------------------------------
Ian Smith, Owen Walker and Leo Lewis at The Financial Times report
that Japanese underwriter Tokio Marine has accused Greensill
Capital of using "fraudulently obtained" insurance policies, firing
the latest salvo in the battle over who pays for the collapse of
the UK-based supply chain finance company.

Greensill collapsed last year after its insurance cover was
cancelled. The company, led by Australian financier Lex Greensill
and backed by SoftBank, had used the insurance to guarantee that
its borrowers would repay their debts, the FT recounts.  This
allowed Greensill to sell on the debt, most of it to Credit Suisse,
where it was marketed to end investors as almost risk free, the FT
sates.

The implosion of Greensill has kicked off a global battle to recoup
losses that run into the billions, the FT notes.  Credit Suisse
warned on April 4 that legal action against insurers and companies
that borrowed from its Greensill-linked fund could take "around
five years", the FT relates.

Tokio Marine's statement on April 4 marked the first time since the
March 2021 insolvency of Greensill that the Japanese insurer had
formally accused its client of fraud, the FT dislsoes.

It also provided confirmation that Greensill's insurers would use
allegations of misrepresentation as a critical defence against
paying out on cover provided to the finance group, according to the
FT.

The Greensill policies were underwritten by an Australian
subsidiary of Tokio Marine named The Bond & Credit Co., the FT
states.  The Japanese parent group said it had found that "matters
material to the underwriting of the policies were fraudulently
misrepresented to BCC by Greensill", according to the FT.

It added there was a "fraudulent failure" to disclose "material
matters" before policies were agreed and extended and that the
misrepresentations continued after Tokio Marine bought the BCC
operation in 2019 from Insurance Australia Group, the FT relays.

"In light of those fraudulent misrepresentations and fraudulent
breaches of an [insured party's] duty of disclosure, Tokio Marine
has today advised counterparties that these policies and related
obligations are void from inception," the FT quotes the insurer as
saying.

The statement will come as a blow to Greensill investors, who see
insurance claims as a way of recovering their losses, the FT
notes.


LERNEN BIDCO: Fitch Gives 'B-' FirstTime LT IDR, Outlook Positive
-----------------------------------------------------------------
Fitch Ratings has assigned Lernen Bidco Limited (Cognita) a
first-time Long-Term Issuer Default Rating (IDR) of 'B-' with a
Positive Outlook. It has also assigned Cognita's senior secured
term loans, including the EUR493.6 million term loan, the GBP200
million term loan, and the newly-issued EUR180 million incremental
term loan B (TLB) a 'B' rating with a Recovery Rating of 'RR3'
(66%), and its second-lien facility an instrument rating of
'CCC'/RR6 (0%).

Cognita's IDR is constrained by high funds from operations (FFO)
lease-adjusted gross leverage at around 10.3x in FY22 (fiscal year
to end-August 2022), which Fitch forecasts to improve towards 7.9x
by FYE24. Capex-driven growth with a ramp-up phase filling
expansion schools also weighs on near-term free cash flow (FCF),
which does not turn positive until FY24. This profile is balanced
by the group's well-diversified global operations and revenue
predictability, with high student retention rates through the
cycle, as evidenced by resilient trading during the pandemic and
implemented fee increases above inflation both historically and in
FY22.

The Positive Outlook reflects Fitch's view that Cognita will
deliver strong student and tuition fee growth with structurally
higher EBITDA supported by a prudent M&A and investment policy,
which will improve FCF and leverage.

KEY RATING DRIVERS

IDR Constrained by Leverage: Fitch expects the company to have FFO
lease-adjusted gross leverage of around 10.3x and fixed-charge
coverage of around 1.4x by FY22, which is an outlier compared with
rated peers. Fitch forecasts strong deleveraging in the underlying
business, driven by student number growth and tuition fee increases
above inflation, with FFO lease-adjusted leverage of 8.7x in FY23
(FY24: 7.9x).

Investments in new capacity (greenfield or within existing schools)
weigh on FCF, but given likely student enrolment, profit growth
will occur after capex is already incurred.

Capex and M&A Driven Growth: Fitch expects the company to continue
to invest in growth through development capex and partly through
debt-funded acquisitions. Fitch's rating case includes development
capex of around GBP150 million spread across FY22-FY24 with
negative FCF in FY22 and FY23, turning positive in FY24. Fitch also
includes GBP50 million and GBP100 million of accretive EBITDA
debt-funded M&A in FY23 and FY24, delaying some of the underlying
deleveraging so that FFO lease-adjusted leverage will be around
7.9x by FY24.

Revenue Predictability with High Retention Rates: The private-pay
K-12 market is characterised by strong revenue visibility with long
average student stay, typically 8-10 years for local students and
4-6 years for expatriate students. Equivalent switching costs once
a child is settled are high, and the tuition fee is considered
non-discretionary by parents, as evidenced by Cognita's price
increases above inflation and resilient enrolment across the
economic cycle.

Cognita's student retention rate is around 80% including natural
graduation and is supported by more than 80% local students in
Europe (UK-weighted) and LatAm (together 51% of pre-central-cost
EBITDA in FY21).

Pandemic-Resilient Trading: Like many schools, Cognita shifted to
online education during different regions' classroom closures
throughout the pandemic. Some fee concessions were proactively
offered to parents, affecting profitability in FY20, but retention
rates remained around 80% (including graduation) and average
student enrolment increased by a CAGR of 11.5% in FY19-FY21.

Fitch's rating case includes organic revenue growth above 10% in
FY23 and FY24 (around 17% including acquired revenue) driven by
increased student enrolment, with significant fee increases also
reflecting LatAm inflation and various price mixes (maturing
schools can charge more, and higher-ticket fees top up the higher
student years). The average revenue/student portfolio mix,
including a recovered Active Learning Group, results in average
revenue/student increases of 9% in FY23, and 6% in FY24.

Some Execution Risk Persists: There are inherent execution risks
from recently established or newbuilt schools only gradually
filling to their capacity. For Cognita this risk is concentrated
within its Asia portfolio (Singapore, Hong Kong and Vietnam),
particularly if pandemic restrictions persist and constrain expat
movement. This is somewhat mitigated by high visibility of the
competitive landscape with long lead times (and hence a predictable
fill of completed investments), use of strong brands ("Stamford"
and "International School Ho Chi Minh City (ISHCMC)" premium
brands) and reputation, including academic record and parental
scoring.

Diversified, Global Portfolio: Cognita's portfolio is
geographically diverse (Europe 29% of FY22 pre-central-costs
EBITDA; Asia 44%, LatAm 23% and a fledgling UAE), teaching
kindergarten to year 6 (G05), and year 7 to 13 (GO6-GO12), across
nine different curricula (including British, International
Baccalaureate and local curricula).

Its exposure to expat, often premium (versus local, mid-market)
students is greater in its Asia portfolio (48:52), whereas the
higher volume, lower-fee (GBP3,000) LatAm portfolio focuses on
local students. The European portfolio (UK-weighted) includes
smaller-capacity schools, yielding average revenue per pupil of
around GBP12,000, whereas the APAC portfolio is characterised by
much larger schools, fewer students, and higher average revenue per
pupil (GBP15,000).

Portfolio Mix: The top 10 schools represented around 50% of revenue
and around 60% of EBITDAR in FY21. This includes the Stamford
American International School and the Australian International
School (Singapore; 5,000 pupils), ISHCMC (Vietnam; 1,250),
Northbridge House and Southbank (both London; totalling 2,200), and
the British School of Barcelona (1,600). The group has 11 bilingual
schools. In Asia, the company is developing the Stamford brand in
Singapore, Hong Kong, and Hanoi.

DERIVATION SUMMARY

Compared with Fitch's Credit Opinions on private, for-profit,
education providers at the lower end of the 'B' rating category
globally, Cognita benefits from a diverse portfolio in terms of
geography, expat versus local student intake, curricula and price
points. The private education sector continues to grow, and except
in fee-frozen Dubai, annual fee increases can increase at or above
inflation. Although GEMS Menasa (Cayman) Limited (B/Stable) is
Dubai-concentrated with a focus on the UAE, its K-12 portfolio also
covers different price entry points, premium to mid-market, and
curricula. In both entities, revenue is long-dated given the
average student stay.

Although for-profit Global University Systems Holding B.V (GUSH;
B/Stable) provides post-graduate university-intake courses, its
geographic reach and exposure to different disciplines (business,
accounting, law, medical, arts, languages and industrial) has wider
breadth than K-12 schools. However, it offers shorter typically
three- to four-year courses (longer for part-time). As the group
has grown it has increased its mix of reliance on international
students: recruiting for third-party US universities and its own
Canada operations versus predominantly local intake for its India,
UK and Asia locations. It has a better rationale for building up an
education group, anchored by its recruitment and retention unit (a
significant cost for other higher education groups seeking overseas
students) and greater content-sharing between some course modules.
GUSH was already using and developing online course platforms
(through Arden) before it was necessitated by the pandemic.

GEMS's lower leverage (FY22: 6.9x) and larger scale is balanced by
Cognita's global diversification and resilient pandemic trading,
with deleveraging capacity from student/tuition fee growth and
capacity ramp-up from expansion investments.

GEMS and Cognita have capacity to fill, partly due to the pandemic
but primarily because of new-builds taking time to establish and
fill. Cognita's management states that it primarily seeks to
acquire profitable schools. GUSH does not undertake greenfield
developments but has a history of buying some unprofitable
universities, which for various reasons, have taken time to
improve, often through increased enrolment and product
repositioning. Cognita and GEMS tend to pursue small to medium-size
bolt-on acquisitions, whereas some GUSH acquisitions have been
sizeable (recently in India, the Caribbean and Canada). All three
rated entities are individual (Cognita: Jacobs Foundation) and
part-owned by private equity.

KEY ASSUMPTIONS

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

-- Organic revenue growth above 10% in FY23 and FY24 (around 17%
    including acquired revenue);

-- Student growth of 22% in FY22 and around 4% per year
    thereafter;

-- Revenue/student portfolio mix increasing by 9% in FY23 and 6%
    in FY24;

-- Fitch-defined EBITDAR margin increasing to 25.4% in FY24 from
    around 23.4% in FY22 through higher utilisation rates and
    improved staff efficiency;

-- Cash-based lease rent of GBP29.7 million in FY21, increasing
    to around GBP38 million in FY24 (expansion and CPI-linked rent
    contracts);

-- Working capital outflow of GBP6.2 million in FY22, neutral
    thereafter;

-- Development capex of around GBP150 million across FY22-FY24;

-- Negative FCF in FY22 and FY23, turning positive (post
    expansion capex) in FY24;

-- GBP50 million and GBP100 million of debt-funded EBITDA-
    accretive M&A in FY23 and FY24, respectively.

Key Recovery Assumptions

Fitch's recovery analysis assumes that Cognita would be reorganised
as a going concern (GC) in bankruptcy rather than liquidated. Fitch
has assumed a 10% administrative claim. The GC EBITDA of GBP120
million reflects stress assumptions that could be driven by weaker
operating performance and an inability to increase students and
pricing according to plan with lower overall utilisation rates,
adverse regulatory changes or weaker economic development in key
markets with reduced pricing power.

The enterprise value (EV) multiple of 6.0x has been applied to the
GC EBITDA to calculate a post re-organisation EV. The choice of
this multiple is based on well-invested operations, strong growth
prospects with medium- to long-term revenue visibility and
diversified global operations. However, the multiple is constrained
by weaker-than-average profitability compared with peers. The
multiple is in line with Fitch-rated wider education sector peers.

Fitch assumes Cognita's GBP100 million revolving credit facility
(RCF) to be fully drawn upon default and to rank pari passu with
the GBP770 million equivalent senior secured TLBs. The EUR255
million second-lien debt ranks junior to the senior secured debt.
At the very top of the debt hierarchy waterfall, GBP71 million
equivalent of local, prior-ranking, debt is included in the
recoveries.

The allocation of value in the liability waterfall analysis results
in Recovery Ratings corresponding to 'RR3' for the TLB and 'RR6'
for the second-lien debt. This indicates a 'B' instrument rating
for the TLB notes and a 'CCC' instrument rating for the second-lien
debt, with waterfall-generated recovery computations of 66% and 0%,
respectively, based on current metrics and assumptions.

RATING SENSITIVITIES

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

-- Successful execution on growth strategy with improved
    profitability and FCF margin;

-- EBITDAR/lease-adjusted gross debt structurally below 7.0x, or
    FFO lease-adjusted gross leverage below 7.5x;

-- EBITDAR/interest plus rent sustained above 1.5x, or FFO fixed
    charge coverage sustainably above 1.5x;

-- Neutral to positive FCF (post expansion-capex);

-- Deleveraging profile conducive to addressing the refinance
    risk in 2025.

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

-- Inability to increase students and pricing according to plan
    with lower overall utilisation rates, adverse regulatory
    changes or a general economic decline with lower growth rates;

-- Failure to reduce EBITDAR/lease-adjusted gross debt
    structurally below 8.5x, or FFO lease-adjusted gross leverage
    below 9x;

-- EBITDAR/interest plus rent below 1.2x, or FFO fixed-charge
    coverage below 1.2x;

-- Sustained negative FCF;

-- Minimal liquidity headroom and/or difficulties in refinancing
    M&A drawings under the RCF.

Factors that could, individually or collectively, lead to the
Outlook being revised to Stable:

-- Lower-than-expected student and pricing growth and/or material
    debt-funded acquisitions leading to EBITDAR/lease-adjusted
    gross debt structurally above 7.5x, or FFO adjusted gross
    leverage above 8.0x;

-- EBITDAR/interest plus rent structurally below 1.5x, or FFO
    fixed-charge coverage below 1.5x.

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

Satisfactory Liquidity: Fitch estimates the company's
Fitch-adjusted cash position at around GBP70 million at FYE22, and
forecast negative FCF (including expansion capex) of GBP40 million
in FY23, funded by cash. Combined with the undrawn GBP100 million
RCF, liquidity is satisfactory.

Fitch restricts GBP50 million of cash, related to cash balances in
some overseas accounts. Although available for investments and
projects locally, Fitch believes they are not readily available to
repay debt at the Limited level.

High refinancing risk is partly mitigated by deleveraging capacity,
a resilient business profile and positive underlying cash flow
generation. The existing RCF and enlarged TLB mature in May 2025
and November 2025. The second-lien facility matures in January
2027.

The company will use the new EUR180 million incremental TLB
together with a GBP12 million acquisition financing to fund GBP148
million of add-on acquisitions, including repayment of amounts
outstanding under its RCF, and payment of related fees and
expenses.

ISSUER PROFILE

Cognita is a global private-pay, for-profit, K-12 (kindergarten to
year 12) educational services group that operates schools across
Asia, Europe, Latin America and the Middle East.

Criteria Variation

Fitch's Corporate Rating Criteria guide analysts to use the income
statement rent charge (depreciation of leased assets plus interest
on leased liabilities) as the basis of its rent-multiple adjustment
(capitalising to create a debt-equivalent) in Fitch's
lease-adjusted ratios. However, Cognita's accounting rent (GBP41.3
million) in its FY21 income statement is significantly higher than
the cash flow rent paid per year, so Fitch has applied an 8x debt
multiple to the annual cash rent (GBP29.7 million).

There may be various reasons for the difference in accounting rent
versus cash paid rent. Cognita has prepaid some rents, and its
long-dated real estate leases (some more than 20 years) result in
higher non-cash, straight-lined, "depreciation" within accounting
rent. In some other Fitch-rated leveraged finance portfolio
examples, the difference between accounting and cash rents is not
of the magnitude to justify this switch to cash rents.

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.

SAN LORENZO: Owed GBP1.5 MM to Creditors at Time of Collapse
------------------------------------------------------------
Tom Keighley at BusinessLive reports that the company behind
Gosforth Italian restaurant Casa San Lorenzo went into
administration owing GBP1.5 million to creditors, including
hundreds of thousands to one shareholder and investor.

According to BusinessLive, an administrators' report shows San
Lorenzo North East Ltd -- owned by Kevin Pattison and Susan Walker
-- owed more than GBP438,000 to HRMC and more than GBP241,000 to
unsecured trade creditors including local food suppliers.

Susan Walker, the minority co-owner and investor, was owed
GBP350,000, BusinessLive discloses.

Staff at both Lorenzo's Gosforth and Washington restaurants were
owed more than GBP19,000 in pay, pension contributions and holiday
pay and administrators said they were expected to receive a "very
modest" dividend, BusinessLive states.

Administrators at FRP said it was likely that secondary
preferential creditors -- including HMRC -- and unsecured creditors
would not receive anything, BusinessLive notes.

Earlier this month, part of the business -- including Casa San
Lorenzo Gosforth and its adjoining restaurant The Lounge -- were
sold out of administration, saving 15 jobs, BusinessLive recounts.

But documents show that even before the impact of the pandemic, the
business made a loss of GBP163,000 in the year to the end of March
2020, and directors had used short-term lenders such as IWOCA and
365 Finance to prop the business up. More than GBP9,000 and
GBP75,626 are owed to those lenders respectively, BusinessLive
states.

Following closures brought about by pandemic restrictions, and poor
trading between lockdowns, the business fell into significant
arrears with utility providers, who threatened legal action and cut
off energy to Lorenzo's Washington restaurant, which was closed
shortly before Christmas 2021 and 15 staff there made redundant,
BusinessLive relates.

At the beginning of February, the business -- including all three
restaurants in Gosforth and Washington -- was put up for sale and
seven offers were received, including two from connected parties
that were rejected by administrators and the landlord, BusinessLive
discloses.

Geoff Knowles, a barrister at Cathedral Chambers in Newcastle and a
long time customer of the Gosforth restaurant, bought the
leaseholds and fittings of both Gosforth restaurants for just under
GBP70,000, BusinessLive states.

Administrators said the offer had originally been GBP75,000 but a
reduction was requested as staff had threatened to walk out if they
were not paid, BusinessLive relays.



                           *********


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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Editors.

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