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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

          Thursday, June 9, 2022, Vol. 23, No. 109

                           Headlines



C Y P R U S

MHP SE: Fitch Raises LongTerm IDR to 'C' on Grace Period Extension


G E R M A N Y

BIRKENSTOCK GROUP: Fitch Affirms B+ LongTerm IDR, Outlook Stable


K A Z A K H S T A N

MFO ARNUR: Fitch Assigns 'B' LongTerm Currency IDRs


M A L T A

MELITA BIDCO: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable


N E T H E R L A N D S

KAWASAN INDUSTRI: Fitch Alters Outlook on 'B-' IDR to Negative


R U S S I A

[*] RUSSIA: Bondholders May Start Legal Action in Case of Default


U N I T E D   K I N G D O M

BUSINESS MORTGAGE 4: Fitch Lowers Rating on Class C Debt to CCsf
DERBY COUNTY FOOTBALL: Takeover by Kirchner At Risk of Collapsing
MAKING IT EASY: Director Banned for Six Years After Liquidation
MITCHELLS & BUTLERS: Fitch Affirms 'B+' Rating on Class D Notes
NORTHERN POWERHOUSE: Huddersfield Hotel Abandoned After Collapse

QUINTO CRANE: Asset Auction Scheduled for June 23
SNOW TOPCO: Fitch Assigns First Time 'B' LongTerm IDR
WOODFORD EQUITY: Rutherford Health Bankruptcy to Hit Investors

                           - - - - -


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C Y P R U S
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MHP SE: Fitch Raises LongTerm IDR to 'C' on Grace Period Extension
------------------------------------------------------------------
Fitch Ratings has downgraded MHP SE's (MHP) Long-Term Foreign- and
Local-Currency Issuer Default Ratings (IDR) to 'RD' (Restricted
Default) from 'C' following an uncured expiry of its 30-day grace
period, which the company entered into after non-payment of its
USD11 million interest on March 19 2022 for its USD350 million
6.25% bonds. Subsequently, Fitch has upgraded MHP's Long-Term IDRs
to 'C', reflecting the ongoing standstill during the 270-day
extension to the original 30-day grace period.

Fitch has also affirmed MHP's senior unsecured rating at 'C'.

KEY RATING DRIVERS

Uncured Expiry of Grace Period: MHP has not paid the missed USD11
million interest on its 6.25% bonds due March 19 2022 by the end of
its 30-day grace period, as permitted by the original debt
documentation, in light of the disruptions resulting from Russia's
invasion of Ukraine. Fitch treats a non-payment after the expiry of
the original grace period as restricted default.

Extended Standstill: Following the non-payment event, bondholders
of all of MHP's USD1.4 billion bonds, including the EUR350 million
bonds, have granted the company an extension of the grace period to
270 days (from 30 days). The unusually long period represents a
reduction in terms compared with the original contractual terms.
Fitch also views the intent of the arrangement was to avoid a
payment default. MHP had also not paid two other coupons due in
April and May for USD38 million, following similar standstill
agreements on each of the two bonds. The next coupon payments are
due in September-November 2022 to the amount of USD49.4 million,
which Fitch does not expect to be made during the extended grace
period.

Tight Sowing Campaign Funding: MHP requires around USD160 million
funding for its sowing campaign that usually starts in spring. The
bank lines that usually finance the sowing campaign are currently
not available due to liquidity constraints on Ukraine's banking
system. The missed interest payments, along with the 270-day
extension of the 30-day grace period of its USD1.4 billion bonds
and requested extensions on upcoming maturities of working-capital
financing facilities, reflect MHP's decision to protect all
available liquidity to fund the sowing campaign. Securing funds for
the sowing campaign is currently one of MHP's top priorities, as
the company needs grains to remain operational and be ready to
export again when possible.

Disrupted Export Operations: Exports are at a minimal level as MHP
has been facing many logistical disruptions in Ukraine. Its ports
are closed and using trucks to transport products can be very
challenging, as some roads and bridges have been destroyed and
borders are difficult to pass.

Ukrainian Food Security in Focus: MHP's main priority is to provide
food for people in Ukraine. MHP historically supplied around half
of all chicken produced commercially for Ukraine. Due to the
disruptions, all other poultry producers have ceased operations as
they were in locations closer to the war zone. MHP's poultry
production is currently operating at 80%-85% capacity, solely for
Ukraine. The company is providing a portion of produce free of
charge.

Severe Operational Disruptions: Russia has launched missile, ground
and sea operations across multiple fronts, including Kyiv. There is
high uncertainty about the extent of Russia's ultimate objectives,
the length, breadth and intensity of the conflict, and its
aftermath. However, multiple infrastructure and industrial
facilities have been damaged and risks to employee wellbeing and of
severe disruption to operations or plant and equipment are high.

Moratorium on Foreign-Currency Payments: The National Bank of
Ukraine has introduced a moratorium on cross-border
foreign-currency payments, potentially limiting companies' ability
to service their foreign-currency obligations. Exceptions can be
made to this moratorium but it is unclear how these will be applied
in practice, in particular with disruption caused by the ongoing
conflict and martial law in the country.

KEY ASSUMPTIONS

KEY RECOVERY RATING ASSUMPTIONS

The recovery analysis assumes that MHP would be considered a going
concern (GC) in bankruptcy and that it would be reorganised rather
than liquidated; however, this assumption may be revisited based on
how the conflict evolves.

Fitch has assumed a 10% administrative claim.

MHP's GC EBITDA is based on 2020 EBITDA discounted by 41% to
reflect disruptions in exports and local operations resulting from
Russia's invasion, as well as vulnerability to foreign-exchange
(FX) risks and to the volatility of poultry, grain, sunflower seeds
prices, and some raw-material costs. The USD175 million GC EBITDA
estimate reflects Fitch's view of a sustainable,
post-reorganisation EBITDA level upon which Fitch bases the
valuation of MHP.

Fitch uses an enterprise value (EV)/EBITDA multiple of 4x to
calculate a post-reorganisation valuation and to reflect a
mid-cycle multiple. The multiple is the same as that for Kernel
Holding S.A., a Ukrainian agricultural commodity trader and
processor, and remains unchanged.

Fitch does not assume MHP's pre-export financing (PXF) facility as
fully drawn in Fitch's analysis. Unlike a revolving credit facility
(RCF), a PXF facility has several drawdown restrictions and the
availability window is limited to only part of the year. Operating
company bank debt and PXF facilities are treated as prior-ranking
debt in Fitch's waterfall analysis.

The principal waterfall analysis generates a ranked recovery for
the senior secured debt, in the 'RR4' category, leading to a 'C'
rating for senior unsecured bonds. The waterfall analysis output
percentage based on current metrics and assumptions is 39%.

RATING SENSITIVITIES

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

-- Payment of the overdue coupon by the end of the extended 240-
    day grace period and the timely payment of upcoming coupons
    and maturities under working-capital facilities;

-- Improved liquidity position.

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

-- Execution of a distressed debt exchange;

-- Non-payment of the overdue or upcoming coupons by the end of
    the extended grace period;

-- The IDR will be further downgraded to 'D' (Default) if MHP
    enters into bankruptcy filings, administration, receivership,
    liquidation or other formal winding-up procedures, or
    otherwise ceases business.

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

Tight Liquidity: As of end-September 2021, MHP had a USD286 million
Fitch-adjusted cash balance (USD200 million as of March 2022 as per
management guidance) and USD304 million of undrawn committed
facilities. However, bank lines are currently not available due to
liquidity constraints on Ukraine's banking system. MHP requires
around USD180 million to fund the sowing campaign, and has
therefore decided to adopt all protective measures to ensure
sufficient funding for operational needs in the current
circumstances.

ISSUER PROFILE

MHP is the largest poultry producer and exporter in Ukraine.

ESG CONSIDERATIONS

MHP has an ESG Relevance Score of '4' for group structure,
reflecting the emergence of related-party loans at the time of some
operational underperformance. This has a negative impact on its
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.

   DEBT              RATING                     RECOVERY   PRIOR
   ----              ------                     --------   -----
MHP SE              LT IDR      RD       Downgrade          C
                    LT IDR      C        Upgrade            RD
                    LC LT IDR   RD       Downgrade          C
                    LC LT IDR   C        Upgrade            RD

senior unsecured   LT          C        Affirmed     RR4   C

MHP Lux S.A.

senior unsecured   LT          C        Affirmed     RR4   C

PJSC Myronivsky     LT IDR      RD       Downgrade          C
Hliboproduct
                    LT IDR      C        Upgrade            RD
                    LC LT IDR   RD       Downgrade          C
                    LC LT IDR   C        Upgrade            RD
                    Natl LT     RD(ukr)  Downgrade          C(ukr)

                    Natl LT     C(ukr)   Upgrade            RD(ukr)





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G E R M A N Y
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BIRKENSTOCK GROUP: Fitch Affirms B+ LongTerm IDR, Outlook Stable
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Fitch Ratings has affirmed BK LC Lux Finco 1 S.a.r.l. (Birkenstock)
Long-Term Issuer Default Rating (IDR) at 'B+' with a Stable Rating
Outlook.  Fitch has also affirmed the senior secured rating at
'BB-' with a Recovery Rating of 'RR3' for the EUR375 million term
loan B (TLB) issued by Birkenstock Group B.V. & Co. KG and the
USD850 million TLB issued by BK LC US Bidco Inc.  Fitch has
affirmed the senior unsecured rating at 'B-' with a Recovery Rating
of 'RR6' for Birkenstock's EUR430 million notes issue.

The ratings balance Birkenstock's concentration on one product
category, mainly sandals, with the company's premium positioning
with a strong brand, as well as its unique product proposition
characterised by healthy attributes. These aspects mitigate the
increasing fashion characterisation of the company's brand. Despite
the initiation of a large capital expenditure plan to address
growing demand, Fitch continues to expect good cash flow generation
and FFO growth supporting deleveraging from FY21's high levels to a
level commensurate with the 'B+' IDR in FY22 (year-end to September
2022).

KEY RATING DRIVERS

Strong Brand Recognition: Birkenstock has demonstrated continued
fast revenue growth since 2012 with the brand gaining wide appeal
and a loyal customer base in many global markets. Increasing demand
and growing brand awareness have been driven by the company's
strong innovation capabilities, a well-managed expansion of its
distribution network and growing its direct-to-consumer (D2C)
online sales channel. The brand's growth has been supported by
collaborations with external designers. Birkenstock also benefits
from being a footwear of choice for widely followed celebrities on
social media. Marketing costs are not a drag on Birkenstock's
profits.

One-Product Concentration: Key rating weaknesses include narrow
product diversification. Around 75% of sales are generated from
five core models, modestly complemented by other shoe models and an
accessory offering. Also there is concentration of products sold at
the premium end of the company's offering. This is partly balanced
by a high variety of styles under each model, adapted to meet
regional appetite and evolving consumer trends and preferences.
Fitch believes the company's growth record across a wide
geographical footprint partly reduces risks related to a narrow
product portfolio. Additionally, the company has somewhat
diversified its offering by expanding to both lower and higher
priced items and increased the relevance of closed-toe products to
17% of sales.

Pandemic Resilience; Strong Recovery: Following broadly stable
performance in FY20, Birkenstock enjoyed a very strong volume
growth in FY21 (up 13% against the pre-pandemic FY19 levels),
accompanied by price increases and product mix benefits, which led
to 32% overall revenue growth. Higher emphasis of the commercial
strategy on the online channel supported revenue growth and
contributed to a jump of the Fitch-calculated EBITDA margin to 31%
(FY19: 26.1%; FY20: 23.7%). Fitch expects revenue growth to
continue in FY22 based on good performance to date and healthy
consumer spending in BK's core markets of Western Europe and North
America. However, consumer spending power in Europe may become more
vulnerable in FY23.

Strong Profitability; Operating Cashflow: The company enjoys high
EBITDA and funds from operations (FFO) margins of almost 30% and
20%, respectively, that are commensurate with the top end of the
investment-grade category for the sector. Strong profitability is
predicated on the company's high operating efficiency, premium
product portfolio, and increasing ownership of distribution
channels, including the increasing contribution to sales of the
online and direct wholesale distribution channels. Fitch projects a
Cash Flow from Operations (before capex and dividends) of around
EUR200 million from FY23 onwards.

Increasing Capex, Slower FCF Growth: In order to keep up with
sustained demand growth, in 2022 the company launched a EUR200
million three-year investment plan to increase capacity.
Additionally, documentation allows the initiation of dividend
distributions if it does not cause net debt / EBITDA to increase
above 6.25x. While net debt / EBITDA was already at 4.4x at YE21,
there will be a step-up in capex in FY22, so Fitch has
conservatively assumed dividends will start in FY23. Fitch has
revised downwards Fitch's projections for free cash flow (FCF) over
FY22-FY24, with FCF assumed broadly neutral in FY22 (due also to
adverse working capital movements), but still expect Birkenstock to
be able to deliver a good FCF margin, growing from around 4% in
FY23, to close to 10% in FY25.

Reducing Leverage, Deleveraging Capacity: After the starting FFO
gross leverage of 7.5x at FYE21, which was outside the 'B+' IDR
medians, Fitch projects deleveraging toward 6.0x in FY22 with a
prospect of further improvement toward 5.0x by FY25 supported by a
strong FFO expansion. Fitch regards this medium-term indebtedness
level as consistent with the rating.

Focus on Organic Growth: Thanks to continued momentum of demand for
the company's products, Fitch expects the company to grow mainly
organically with limited M&A risks. Management sees large potential
for further sales expansion of its product portfolio within current
and new regions of presence but also in the growing online channel
in key markets. Fitch believes that growth will also be supported
by the ongoing trend towards casualisation of clothing, including
work dress codes post-COVID-19, as well as increasing consumer
health consciousness, which could be beneficial for Birkenstock's
orthopaedic offering.

DERIVATION SUMMARY

Birkenstock's rating is one notch above its closest peer, Golden
Goose S.p.A. (B/Stable), which also has a concentrated portfolio of
product offering and similar profitability. Unlike Golden Goose,
Birkenstock is not developing its own retail store network, and we,
therefore, do not adjust its leverage for leases. The one-notch
rating difference reflects Birkenstock's 3x largest scale and a
product positioning less subject to fashion risk.

Birkenstock is smaller, has a less diversified product portfolio
and higher leverage than producer of home improvement and personal
care products, Spectrum Brands, Inc. (BB/Stable). This justifies a
two-notch gap between the companies despite Birkenstock's
significantly higher profitability.

Fitch also views Birkenstock's credit profile as weaker than that
of Levi Strauss & Co (BB+/Stable), which also has a high
concentration on one brand but is much greater in scale and more
diversified by product. This, together with substantially lower
leverage, results in a higher rating for Levi Strauss.

Fitch views Birkenstock's credit profile as stronger compared with
Italian furniture producer International Design Group S.p.A.'s
(IDG; B/ Stable), which has engaged in several acquisitions that
restrain its de-leveraging trajectory. Birkenstock also benefits
from a moderately larger scale and more resilient consumer demand,
which combined with high profitability, suggests greater visibility
for Birkenstock's deleveraging versus IDG's.

KEY ASSUMPTIONS

Fitch's Key Assumptions Within Its Rating Case for the Issuer:

-- Organic growth of 10% in FY22 followed by a decline of 200bps
    in FY23 before a gradual recovery in the mid- teens in the
    following years;

-- Strong EBITDA margin of about 30% until FY26;

-- Working capital outflow peaks at around EUR100 million in
    FY2022 before normalizing at about EUR10-20 million outflow
    over the rating horizon;

-- Capex of around EUR250 million spread over the next three
    fiscal years reducing to around EUR35 million a year from
    FY25;

-- Dividends permitted by the financing documentation from FY23,
    gradually growing from EUR70 million to EUR90 million by FY24
    based on the projected net income growth;

-- No M&A factored in.

RECOVERY ASSUMPTIONS

Fitch assumes that Birkenstock would be considered a going-concern
(GC) in bankruptcy and that it would be reorganised rather than
liquidated.

In Fitch's bespoke GC recovery analysis Fitch considered an
estimated post-restructuring EBITDA available to creditors of
around EUR165 million. Bankruptcy could result from a prolonged
economic downturn, combined with additional difficulties incurred
in balancing the acceleration of the D2C strategy with serving its
wholesale audience.

Fitch has used a distressed enterprise value (EV)/EBITDA multiple
of 6.0x. This is higher than the 5.0x mid-point used for the
corporates universe outside the US, due to the company's high brand
awareness across developed and emerging economies resulting in a
highly cash-generative business model, driving a
higher-than-average EV multiple.

Fitch has assumed EUR180 million out of a EUR200 million-equivalent
asset-based lending facility (ABL) could still be drawn even if the
company is experiencing distress. Fitch assumes that the ABL will
be recovered ahead of the claims of the TLB and the senior
unsecured notes due to the specific collateral assigned as part of
the facility. Total senior secured claims of EUR1,080 million are
split between the euro and US dollar TLB tranches of EUR375 million
and USD850 million contracted by Birkenstock Group B.V. & Co. KG
and BK LC US Bidco Inc, respectively. The EUR430 million senior
unsecured debt issued by BK LC Lux Finco 1 S.a.r.l. is subordinated
to the TLBs.

After deducting 10% for administrative claims, Fitch's principal
waterfall analysis generated a ranked recovery for the senior
secured debt in the 'RR3' category with a waterfall generated
recovery computation (WGRC) of 66%, leading to an instrument rating
one notch above the IDR. The ranked recovery for the senior
unsecured debt is in the 'RR6' category with a WGRC of 0%,
reflecting its subordination to a large portion of secured debt,
resulting in an instrument rating two notches below the IDR.

RATING SENSITIVITIES

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

-- Successful implementation of business plan with annual EBITDA
    growth toward EUR500 million;

-- Maintenance of EBITDA margin above 25% translating into FCF
    margin above 5%;

-- Articulation of a financial policy that would be conducive to
    sustaining FFO gross leverage below 5.0x and Gross Debt /
    EBITDA moving below 4.5x.

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

-- A material slowdown in revenue growth relative to the business

    plan, leading to EBITDA returning below EUR250 million;

-- Business underperformance that reduces prospects for FFO gross

    leverage moving below 6.5x and Gross Debt / EBITDA moving
    below 6.0x by FY23;

-- FCF margin below 3%.

BEST/WORST CASE RATING SCENARIO

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

LIQUIDITY AND DEBT STRUCTURE

Comfortable Liquidity: Over Fitch's four-year rating horizon and
assuming current financial policies, Fitch expects Birkenstock to
maintain a comfortable liquidity position, stating with EUR232
million cash on balance sheet as of September 2021, positive
post-dividend FCF generation from FY23 and EUR200
million-equivalent ABL funding inventory build-up during low
seasons.

Birkenstock's dividend policy is unclear, but the financing
documentation permits distribution up to 50% of consolidated net
income under levels of leverage that Fitch expects the company to
achieve in FY23 at the latest. Nevertheless, Fitch would expect
dividends to be tapered in the event of declining profitability,
and the sponsor will likely prioritise small, supply chain-focused
M&As over distributions.

No maturities are due before FY28 and FY29 other than the ABL
facility which is due in April 2026. The mandatory 1% amortisation
of the US dollar senior secured TLB is the only scheduled debt
repayment over the rating horizon.

ISSUER PROFILE

Birkenstock is a Germany based manufacturer of branded casual
footwear.

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.

   DEBT               RATING                 RECOVERY   PRIOR
   ----               ------                 --------   -----
Birkenstock US BidCo Inc.

  senior secured      LT      BB-   Affirmed    RR3     BB-

BK LC Lux Finco 1     LT IDR  B+    Affirmed            B+
S.a.r.l.

  senior unsecured    LT B-         Affirmed    RR6     B-

Birkenstock Group B.V. & Co. KG

  senior secured      LT     BB-    Affirmed    RR3     BB-




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

MFO ARNUR: Fitch Assigns 'B' LongTerm Currency IDRs
---------------------------------------------------
Fitch Ratings has assigned MFO Arnur Credit LLP (AC) Foreign- and
Local-Currency Long-Term Issuer Default Ratings (IDRs) of 'B'. The
Outlook on the Long-Term IDRs is Stable. Fitch has also assigned a
National Rating of 'BB+(kaz)'.

KEY RATING DRIVERS

Small Franchise; High-Risk Sector: AC's ratings reflect its small
franchise with a 3.2% market share by loan portfolio at end-2021 in
the micro-finance sector in Kazakhstan, its focus on higher-risk
customers (including the seasonal agricultural segment and small
SMEs), only basic underwriting standards and risk controls, small
absolute size of capital as well as confidence-sensitive funding.

The ratings also reflect modest and well-controlled credit losses
(including in its chosen agricultural sector), sound capital
ratios, a good record of profitability despite pandemic challenges
and increased regulatory pressure.

Stable Performance: The Stable Outlook on the Long-Term IDRs
reflects Fitch's view that AC has a sufficient margin of safety
against macroeconomic challenges, including those stemming from the
Russia-Ukraine war. A record of stable profitability and portfolio
quality amid the pandemic supports Fitch's view. The company was
able to secure new funding from its foreign creditors and returned
to its historical lending growth in 2021.

Niche Operator: AC was established in 2004 and is currently the
fifth-largest micro finance organisation (MFO) in Kazakhstan with a
focus on the financial needs of its rural population. It operates
through 43 sale points, predominantly in the south of Kazakhstan.
Over the last three years, the company has been actively
diversifying its business model into SMEs loans. The total loan
portfolio amounted to KZT24 billion at end-2021 (USD55 million),
split into 52% agricultural loans, 41% SME loans and 7% other
consumer loans.

Limited Credit Losses: AC has well-tested but basic underwriting
standards and adequate risk controls. AC's Stage 3 loans ratio
stood at 4.5% at end-2021 (2020: 3.8%; four-year average of 3.6%)
with loan loss coverage of 150% (2020: 210%). In addition, AC has
to comply with multiple asset-quality covenants from its foreign
creditors. In 2020, Stage 2 loans and impairment charges markedly
increased due to the pandemic challenges and payment holidays.
However, both metrics stabilised by end-2021.

Solid Profitability: AC's pre-tax income/average assets ratio of
9.6% in 2021 and 6.5% in 2020 (four-year average of 8.7%) and an
annualised net interest margin at 21% (19.7% in 2020). Although
AC's business model is labour-intensive (staff costs accounted for
62% of total expenses in 2021), its cost/income ratio was sound at
37% in 2021.

Adequate Leverage: AC's gross debt/tangible equity stood at 2.0x at
end-2021 (2020: 2.1x) and it maintains substantial buffers against
covenanted capital levels (equity/assets 32.6% at end-2021, 31.6%
at end-2021 versus a 20% requirement per covenant). Fitch expects
profit retention will underpin AC's leverage in the medium term
amid asset growth.

Wholesale-Funded: The company relies on international financial
institutions (IFIs) - 85% of total non-equity funding. This exposes
AC to covenant risk due to a large number of fairly strict
covenants, which might expose it to accelerated debt repayments if
waivers are not granted. AC's management aims to diversify funding
by issuing inaugural local bonds in 2H22. AC targets an issuance
size of KZT1.5 billion (12% of projected total funding), with a
view to later increasing the share of bonds to around 25% of total
non-equity funding.

ESG Positive Impact: AC's focus on the underbanked population in
rural areas and its positive social impact facilitates its access
to funding from IFIs. This underpins Fitch's assessment of AC's
funding profile and is reflected in Fitch's ESG score of '4' [+]
for Exposure to Social Impacts.

NATIONAL RATING

AC's National Rating of 'BB+(kaz)' reflects Fitch's view on the
credit strength of AC relative to its Kazakh peers'.

RATING SENSITIVITIES

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

-- Material deterioration of asset quality (eg due to a material
    increase in risk appetite or inability to control the credit
    quality of planned online lending), coupled with weaker
    revenue generation, affecting profitability and pressuring
    capital buffers. Significant deterioration of the company's
    capital position or materially higher leverage with gross
    debt/tangible equity exceeding 4x.

-- Signs of funding and refinancing problems (including covenant
    breaches), compromising funding access or ability to grow;

-- A regulatory event or loss event potentially affecting
    business-model stability and, ultimately, viability.

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

-- Upside is limited in the medium- to-long term by AC's modest
    franchise and monoline business model. However, sustained
    growth of AC's franchise and business scale, while maintaining

    solid financial metrics could lead to positive rating action
    in the long term

BEST/WORST CASE RATING SCENARIO

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

ESG CONSIDERATIONS

AC has an ESG Relevance Score of '4' [+] for exposure to social
impacts due to its business model being focussed on the
under-banked population in rural areas. Its positive social impact
facilitates AC's access to funding from IFIs. This has a positive
impact on its 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.

   DEBT               RATING
   ----               ------
Arnur Credit LLP    LT IDR       B           New Rating
                    ST IDR       B           New Rating
                    LC LT IDR    B           New Rating
                    LC ST IDR    B           New Rating
                    Natl LT      BB+(kaz)    New Rating




=========
M A L T A
=========

MELITA BIDCO: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed Melita BidCo Limited's Long-Term Issuer
Default Rating (IDR) at 'B+' with a Stable Outlook. Fitch has also
affirmed Melita's senior secured debt instrument at 'BB-' with a
Recovery Rating of 'RR3'.

The ratings reflect Melita's small absolute scale and limited
geographic diversification. Rating strengths are its leading
position in Malta, consistently growing customer base in all four
segments (fixed broadband, mobile, fixed telephony and pay-tv), a
fairly high EBITDA margin and increasing free cash flow (FCF)
generation.

KEY RATING DRIVERS

Leading Market Position: Melita owns its mobile and fixed networks,
and is a leader in the fixed network segment with a 48.4% of market
share at end-2021, according to the company. Melia is also number
one, two and three in pay-tv, fixed telephony and mobile,
respectively. It was the first operator to offer nationwide 5G
coverage, and provides 1Gbps fixed internet connections across the
country. Melita has also established fibre connectivity to mainland
Europe.

Stable Three-Company Market: The Maltese telecoms market is mainly
served by GO (a former government-owned operator with converged
fixed-mobile offering), Melita (cable operator with converged
fixed-mobile offering) and Vodafone (mainly mobile-focused). Fitch
does not expect consolidation between these three operators. Fixed
broadband and mobile subscribers are growing. Average revenue per
user (ARPU) is expected to increase as customers shift to
higher-value fixed-mobile bundles with faster internet speeds.
Fitch expects mobile ARPU to grow with subscriber numbers and data
volumes.

Small Market, Limited Diversification: Malta's population is about
half a million and therefore offers limited opportunity for Melita
to expand in the domestic market. This makes scale a rating
constraint for Melita. The company is expanding in the fast growing
IoT communication services business, mainly outside Malta to
improve geographic diversification. However, significant EBITDA
contribution from the IoT business will take time to materialise.

Favourable Operating Environment: Malta is one of the EU
fastest-growing economies, with more rapid increases in population,
GDP and the formation of new businesses, as well as low
unemployment. The influx of companies and foreign skilled labour to
the island should also add to Melita's subscriber base. This
presents an opportunity to increase ARPU, as foreigners tend to
have fairly high disposable income, which is positive for post-paid
plans and bundling. While many foreigners left Malta during the
pandemic, Fitch expects this to reverse as pre-pandemic conditions
return.

Italian Business to Be Sold: Melita made a push in 2019 into Italy
with a broadband-only offering using the Open Fiber network. The
Italian venture, which was affected by Covid-19 in 2020, has been
reassessed and is now classified as asset held for sale as it
failed to reach critical mass or profitability. Fitch has assumed
this business will be liquidated later in 2022, rather than sold,
resulting in a few million euros of loss in addition to monthly
cash outflow from the Italian business. A sale of the business
would represent a small upside to Fitch's base-case assumptions.

Good Performance in 2021: Both revenue and Fitch-defined EBITDA
grew 3.2% and 9% respectively, leading to an EBITDA margin of 57.8%
in 2021. The revenue growth is driven by the Maltese telecoms
market growth, as well as Melita's increased market share in mobile
and pay-TV. Melita's leading fixed broadband's market share remains
stable.

Further Deleveraging after 2022: Since its 2019 leveraged buyout
(LBO), Melita deleveraged to net debt at 5.1x funds from operations
(FFO) in 2021. Fitch expects further deleveraging to 4.9x by
end-2023, after a spike in 2022 leverage from an unusually high
cash tax payment. Any proceeds from the sale of Melita Italy
combined with a faster-than-expected economic recovery, higher
roaming revenue and IoT business picking up, may lead to faster
deleveraging. However, Melita's FCF is expected to be low in
absolute terms, which limits further upside to the rating at
present.

No Dividends Assumed: Fitch sees some medium-term risk that sponsor
EQT could introduce a more aggressive financial policy as leverage
falls over the next four years, although the infrastructure focus
of the fund lessens the risk of significant shareholder-friendly
actions in the near term.

DERIVATION SUMMARY

Melita has significantly smaller operational scale than other
similarly rated cable peers, such as Telenet Group Holding N.V.
(BB-/Stable) and VodafoneZiggo Group B.V.(B+/Stable). Irish
incumbent eircom Holdings (Ireland) Limited (B+/Positive) operates
in a single market like Melita, but has larger scale while facing
intense competition from large multi-national operators.

Melita has a state-of-the-art owned network and benefits from
above-sector-average revenue growth and EBITDA, driven by Malta's
higher-than-European average economic growth. This allows the
company further deleveraging capacity in the next four years, as
its FCF margin (lower than peers') improves. However, the limited
size of the Maltese market is a constraint on long-term expansion.

KEY ASSUMPTIONS

-- Mid-single-digit revenue growth in 2022-2025 as the country
    returns to pre-pandemic conditions and with Malta being one of

    the fastest-growing EU economies, combined with IoT business
    expansion;

-- Fitch-defined EBITDA margin at around 57% in 2022-2025,
    slightly below 2021's level due to direct costs associated
    with IoT projects;

-- Working-capital outflow at around EUR5 million each year to
    2025;

-- Capex of EUR25 million-EUR27 million a year in 2022-2025,
    excluding capitalised content costs;

-- No M&A activity to 2025;

-- No dividend payments;

-- Melita Italy S.R.L to be shut down at loss in addition to
    monthly cash outflows.

KEY RECOVERY RATING ASSUMPTIONS

-- The recovery analysis assumes that Melita would be a going-
    concern (GC) in bankruptcy and that the company would be
    reorganised rather than liquidated;

-- A 10% administrative claim;

-- Post-restructuring GC EBITDA at EUR35 million, reflecting
    profitability growth since the LBO coming under competitive
    pressure;

-- An enterprise value (EV) multiple of 6.0x is used to calculate

    a post-reorganisation valuation (for cable companies);

-- Fitch calculates the recovery prospects for the senior secured

    instruments at 64%, which implies a one-notch uplift of the
    rating relative to the company's IDR to arrive at 'BB-' with a

    Recovery Rating of 'RR3'. This is in line with the Malta
    Country Ceiling limiting the instrument rating at one notch
    higher than the IDR and the Recovery Rating at 'RR3'/70%.

RATING SENSITIVITIES

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

-- FFO net leverage below 4.5x (net debt / EBITDA below 4x) on a
    sustained basis, with a clear policy on use of cash;

-- Continued benign regulatory and competitive environment,
    supporting positive operational trends;

-- Significant increase in absolute FCF, with FCF margin in the
    high single-digit percentage range;

-- (Cash from operations-capex) above 6.5% of total debt on a
    sustained basis.

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

-- FFO net leverage above 5.5x (net debt / EBITDA above 5x) on a
    sustained basis;

-- Deterioration in the regulatory or competitive environment
    leading to a material reversal in positive operational trends;

-- Weaker cash flow generation with FCF margin expected to remain

    in the low single-digit percentages, driven by lower EBITDA or

    higher capex.

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. For more information about the
methodology used to determine sector-specific best- and worst-case
scenario credit ratings, visit
https://www.fitchratings.com/site/re/10111579.


LIQUIDITY AND DEBT STRUCTURE

Comfortable Liquidity: Melita's only funded maturity (an EUR275
million seven-year term loan B) is in 2026. Reported cash at
end-1Q21 was EUR28 million and the company has access to a EUR20
million revolving credit facility (6.5-year facility due in 2026),
which Fitch expects to remain undrawn.

   DEBT                  RATING               RECOVERY   PRIOR
   ----                  ------               --------   -----
Melita BidCo Limited    LT IDR B+   Affirmed             B+
senior secured          LT     BB-  Affirmed     RR3     BB-




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

KAWASAN INDUSTRI: Fitch Alters Outlook on 'B-' IDR to Negative
--------------------------------------------------------------
Fitch Ratings has revised the Outlook on Indonesia-based
industrial-estate developer PT Kawasan Industri Jababeka Tbk's
(KIJA) Long-Term Issuer Default Rating (IDR) to Negative from
Stable and affirmed the IDR at 'B-'. The agency has also affirmed
the rating on KIJA's USD300 million unsecured notes due 2023 at
'B-', with a Recovery Rating of 'RR4'. The notes are issued by
KIJA's subsidiary, Jababeka International B.V., and guaranteed by
KIJA and certain operating subsidiaries.

Fitch Ratings Indonesia has simultaneously downgraded KIJA's
National Long-Term Rating to 'BB+(idn)' from 'BBB-(idn)'. The
Outlook on the National Long-Term Rating is Negative.

The Negative Outlook reflects the increased uncertainty around
KIJA's ability to refinance its USD300 million unsecured notes due
on 5 October 2023. Capital-market conditions have deteriorated
significantly over the last few months as high inflation and rising
interest rates dim global growth prospects. While easing Covid-19
curbs in Indonesia should keep KIJA's operating cash flows steady,
its liquidity may come under pressure if capital markets remain
unfavourable.

The affirmation of KIJA's 'B-' IDR reflects Fitch's belief that the
company is working on a number of options to overcome the
refinancing hurdle, and Fitch's belief that KIJA's operating cash
flows should remain adequate.

'BB' National Ratings denote an elevated default risk relative to
other issuers or obligations in the same country or monetary
union.

KEY RATING DRIVERS

Higher Refinancing Risk: The refinancing risk on KIJA's USD300
million unsecured notes has increased significantly, in Fitch's
view. KIJA is considering a number of options, including bank loans
and new bond issuance to repay the notes. However, execution risks
have increased materially as slowing global growth, rising
inflation and higher interest rates are weakening investor
sentiment for emerging-market debt. Execution risk is heightened by
KIJA's limited record of obtaining large bank loans in the last few
years.

Steady Non-Development Cashflows: Fitch expects KIJA to maintain
steady cashflows from its non-development sources, which
counterbalance its cyclical industrial-property sales.
Non-development cash flows stem from management services in its
main industrial estate, rising throughput at its dry port, as well
as power sold under an agreement with PT Perusahaan Listrik Negara
(Persero) (PLN, BBB/Stable) valid until 2032. These cashflows will
continue to cover KIJA's interest expense by around 0.8x-0.9x by
Fitch's estimates, even after factoring in higher interest rates.

Power Plant Payments to be Collected: Fitch forecasts KIJA's power
plant EBITDA to improve to IDR256 billion in 2022 from IDR135
billion in 2021, before normalising to around IDR200 billion in
2023. Revenue was not recognised in 4Q21 and in January 2022 due to
an invoicing disagreement, but the company says it has received
half of the IDR60 billion that was overdue in 2Q22, and is
expecting the balance in 2H22, which Fitch has factored into
Fitch's forecasts. Fitch believes PLN will continue to honour the
agreement given independent power producers play a strategic role
in Indonesia's electricity sector.

Improving Industrial Presales: Fitch expects presales to rise by
14% in 2022 from 46% in 2021, supported by growth in industrial
land sales as Indonesia reopens its borders, which will aid new
foreign investments. Presales, excluding those generated by KIJA's
joint venture, Kawasan Industri Kendal, should reach IDR1.1
trillion in 2022, from around IDR1 trillion in 2021. Industrial
land sales will continue to account for a majority of KIJA's
presales in the next two years (FY21: 63% of total presales).

Rising Interest Expense Manageable: Fitch expects KIJA's interest
payments to increase significantly if the company is able to
refinance the USD300 million note as interest rates are rising.
Fitch forecasts KIJA's interest payments, which include hedging
costs, to rise to about IDR450 billion in 2022, from IDR410 billion
in 2021, assuming the US dollar notes are refinanced in 2H22.
KIJA's steady non-development EBITDA and rising presales support
its ability to meet its interest costs.

Higher Residential and Commercial Presales: Fitch forecasts
residential and commercial presales to improve to IDR383 billion in
2022, from IDR276 billion for 2021. KIJA recorded strong
residential and commercial presales of IDR110 billion in 1Q22,
supported by healthy demand for affordable landed homes under IDR1
billion. Fitch expects demand for these homes to remain steady in
the next 12-18 months. However rising interest rates could weigh on
presales growth as about 75% of residential presales are
mortgage-funded.

Higher Capex, Land Banking: Fitch forecasts marginally negative
free cash flow in 2022-2023 despite rising presales, due to higher
interest costs, land acquisitions and maintenance capex.
Maintenance capex will spike to IDR125 billion in 2022, boosted by
spending deferred during the Covid-19 pandemic, before normalising
to about IDR100 billion. Fitch expects land acquisitions of around
IDR175 billion in 2022, excluding investments in the Kendal
township, as KIJA may gradually ramp-up purchases after a slowdown
in the past three years.

KIJA has a large land bank of over 1,200 hectares in Cikarang,
which is sufficient for more than 20 years of presales. However,
the company may need to acquire plots within and around the
township to form contiguous parcels to support medium-term
presales. Fitch believes KIJA has flexibility to prioritise its
liquidity requirements over land banking in the near term.

Kendal Joint Venture Deconsolidated: Fitch has deconsolidated
KIJA's 51% joint venture (JV) in PT Kawasan Industri Kendal in
assessing KIJA's rating. Kendal is not a guarantor to the US dollar
notes, and Fitch does not expect the JV to pay meaningful dividends
to KIJA in the medium term due to its development plans. KIJA has
not received a dividend from Kendal since the JV's inception, and
requires the consent of its 49% partner, PT Sembcorp Development
Indonesia, to extract dividends.

Kendal is self-sufficient, with steady operating cash flow and
IDR424 billion of presales in 2021, and a cash balance
significantly exceeding its limited gross debt. Therefore, Fitch
does not expect KIJA will need to support the JV. Neither KIJA nor
Sembcorp guarantee Kendal's debt.

DERIVATION SUMMARY

KIJA's ratings are comparable with those of PT Alam Sutera Realty
Tbk (ASRI, B-/Stable), PT Lippo Karawaci TBK (LPKR, B-/Stable and
BBB-(idn)/Stable) and PT Ciputra Development Tbk (CTRA,
B+/Positive).

KIJA's smaller presales scale that are mostly from cyclical
industrial land sales is compensated by the steady cash flows from
its non-development sources. Meanwhile, ASRI's residential products
exhibit more stable demand, given its established residential
townships and product diversity, and support its higher presales
scale of around IDR3 trillion. As such, KIJA and ASRI are rated at
the same level. KIJA's Negative Outlook reflects higher refinancing
risk on its US dollar notes due in 2023, whereas ASRI's Stable
Outlook is underpinned by Fitch's belief that it is significantly
less reliant on capital market conditions to repay its next tranche
of US dollar notes due in mid-2024.

KIJA's and LPKR's IDRs are also rated at the same level. Fitch
expects KIJA to generate neutral-to-negative FCF in the next two
years, supported by its non-development EBITDA and rising presales.
Lippo's FCF are significantly negative despite not factoring in any
new land purchases, weighed down by its large interest cost and
rent outflow relative to presales. However, this is mitigated by
Lippo's significantly stronger liquidity from a high cash balance
and low refinancing risks as its earliest significant debt maturity
is in 2025. These relative strengths also drive Lippo's higher
National Long-Term Rating of 'BBB-(idn)' compared with KIJA's
'BB+(idn)'.

CTRA has a significantly stronger business and financial profile
than KIJA, and therefore it is rated two notches higher. CTRA's has
a much larger operating scale, with attributable presales of around
IDR5 trillion, and is more diverse by geography, product type and
price points. CTRA's presales are almost entirely driven by
residential property, which is less cyclical than KIJA's mainstay
of industrial land sales. CTRA also has a more conservative balance
sheets, with net debt/ net property assets of 15%-20% versus around
45% for KIJA. Both companies have comparable non-development cash
flow coverage of interest expenses.

KEY ASSUMPTIONS

Fitch's Key Assumptions Within Its Rating Case for the Issuer:

-- Presales excluding Kendal of IDR1,134 billion in 2022 and
    IDR1,191 billion in 2023;

-- Non-development EBITDA of IDR448 billion in 2022 and IDR395
    billion in 2023;

-- Land banking and capex, excluding Kendal, of around IDR295
    billion in 2022 and IDR200 billion in 2023;

-- Considering Kendal's on-going development plans, Fitch does
    not assume any dividends in 2022 and 2023.

KEY RECOVERY RATING ASSUMPTIONS

Fitch assumes KIJA will be liquidated in a bankruptcy than continue
as a going concern as it is an asset-trading company.

Fitch uses KIJA's financials, excluding Kendal's assets and
liabilities, to compute liquidation value under a distressed
scenario of IDR4.8 trillion as of 31 December 2021. However, Fitch
has factored in the book value of KIJA's 51% stake in Kendal's
equity as part of the liquidation value.

The estimate reflects Fitch's assessment of the value of trade
receivables at 75% advance rate, inventory at 50% advance rate,
property, plant and equipment (PPE) at 50% advance rate and KIJA's
51% share of the Kendal JV at 50% advance rate.

Fitch assigns a 50% advance rate to inventory, which incorporates a
substantial discount to market value as KIJA reports inventory at
its historical acquisition cost. Fitch also assigns a 50% rate to
KIJA's 51% share in the Kendal JV as Kendal's net worth mainly
reflects the book value of its land bank and inventory.

KIJA's PPE primarily comprises a power plant, a dry port and a
waste-water treatment plant. The 50% discount considers the power
plant's relatively young age at less than 10 years with more than
10 years remaining under its power purchase agreement with PLN, and
the dry port's strategic location.

These assumptions result in recovery corresponding to a Recovery
rating of 'RR1' for the outstanding USD300 million senior unsecured
notes. Nevertheless, Fitch rates the senior unsecured bonds at 'B-'
with a Recovery Rating of 'RR4' because Indonesia falls into Group
D of creditor-friendliness under Fitch's Country-Specific Treatment
of Recovery Ratings Criteria and the instrument ratings of issuers
with assets in this group are subject to a soft cap at the
company's IDR and Recovery Rating of 'RR4'.

RATING SENSITIVITIES

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

-- If KIJA successfully refinances its USD notes due October
    2023, the Outlook on the Long-Term IDR could be revised to
    Stable, while the National Long-Term Rating could be upgraded
    to 'BBB-(idn)' with Stable Outlook

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

-- Weakening liquidity, evident from an inability to make
    meaningful progress in refinancing the October 2023 notes in a

    timely manner, could result in KIJA's ratings being downgraded

    by more than one notch;

-- Non-development EBITDA/gross interest cover below 0.8x for a
    sustained period.

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

Refinancing Subject to Market Conditions: KIJA had about IDR575
billion of cash and cash equivalents excluding the Kendal JV at 31
Mach 2022. This, combined with Fitch's expectations of marginally
negative FCF in the next 12-18 months, is not sufficient to cover
its USD300 million unsecured notes (around IDR4.3 trillion) due on
5 October 2023. Therefore, Fitch believes KIJA will depend on
refinancing to repay the notes, the execution of which will hinge
on market conditions.

At end-2021 KIJA did not meet the debt-incurrence test on the US
dollar unsecured notes of fixed-charge coverage above 2.25x, which
limits its ability to draw new borrowing except for refinancing and
certain permitted indebtedness. Currently, KIJA has around IDR400
billion available under its permitted debt basket, which Fitch does
not expect the company will need to draw down on in the next 12-18
months given Fitch's expectations of marginally negative FCF.

ISSUER PROFILE

KIJA is an Indonesia-based industrial township developer. The
company generates presales from its two flagship projects, Kota
Jababeka in Cikarang, West Java, and Kawasan Industri Kendal in
Central Java. It had over 1,650 hectares of land across the two
estates at end-December 2021, which was sufficient for more than 20
years of development.

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.

   DEBT                     RATING            RECOVERY  PRIOR
   ----                     ------            --------  -----
PT Kawasan
Industri
Jababeka Tbk
                    LT IDR    B-        Affirmed         B-

                    Natl LT   BB+(idn)  Downgrade        BBB-(idn)


  senior unsecured  LT        B-        Affirmed    RR4  B-

Jababeka
International
B.V.

  senior unsecured LT        B-         Affirmed    RR4  B-




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

[*] RUSSIA: Bondholders May Start Legal Action in Case of Default
-----------------------------------------------------------------
Giulia Morpurgo, Abhinav Ramnarayan and Irene Garcia Perez at
Bloomberg News report that bondholders are in for a tangled mess of
financial, political and legal wrangling if sanctions push Russia
to a historic default.

So far, Moscow has been able to navigate the restrictions to
service its international debt, but that's likely to change after
the US closed another avenue to creditors, affecting about US$100
million in payments due on May 27, Bloomberg discloses.  The
European Union has also sanctioned Russia's central depository,
which said it would suspend euro-denominated transactions,
Bloomberg relates.

The sanctions, as well as Russia's capital controls, mean that what
happens next is unlikely to follow the traditional playbook of
negotiations with creditors, debt restructuring and currency
devaluation. It's not even clear if and how any default will be
declared, Bloomberg states.

Here are some of the possible next steps, according to lawyers
following the developments.

The country has a 30-day grace period to find a solution to the
payments due late last month on the 2026 and 2036 dollar and
euro-denominated bonds, Bloomberg says.  Even if it runs out of
time, whether or not it's a default depends on who you ask,
Bloomberg notes.

According to Bloomberg, Russia said its accounts at the National
Settlement Depository have already been debited.  Moscow rgues that
it's done its part, and bondholders are likely to claim that unless
they get the cash, it doesn't count, Bloomberg discloses.

"Russia is able and willing to make payments," Bloomberg quotes
Darshak Dholakia, a partner at Dechert LLP, as saying.  "This could
strengthen Russia's arguments to investors -- and potentially in
court if default is declared -- that the bonds are not in default
as the lack of payments are due to the actions of the US
government."

Russia has said that if it can't pay in foreign currency, it will
resort to rubles, Bloomberg relays.  That's listed as an
"alternative payment currency" in the prospectus for the 2036 bond,
but it needs to notify bondholders 15 business days before the
payment is made.  It can't do the same for the 2026 bonds; euros,
British pounds or Swiss francs are options, but again, Russia needs
to notify investors at least five days before making the payment.

As Russia tries yet again to dodge default, it's also working on
another bond-payment mechanism to sidestep US sanctions, Bloomberg
discloses.  In interviews with the Russian press, Finance Minister
Anton Siluanov said this process would allow investors to access
funds without restriction, according to Bloomberg.  It's uncertain
when it will be ready and whether it will work, Bloomberg notes.

If the grace period is up and bondholders are still out of pocket,
a declaration of default would usually come from ratings firms, but
the European Union has banned them from covering Russia, Bloomberg
says.  According to the prospectus, bondholders can call one
themselves if holders of 25% of the outstanding bonds agree that an
"Event of Default" has occurred, Bloomberg notes.

Still, creditors don't need to act immediately, and instead can
wait to monitor the war in Ukraine and the level of sanctions.
They'd have time, as the claims don't become void until three years
from the payment date, according to the bond documents.

According to Bloomberg, Yannis Manuelides, a partner at Allen &
Overy, said Russia might be better off waiting for bondholders to
start proceedings by choosing a jurisdiction, and accept or reject
it.  Russia would still have the chance to make its arguments, even
if the creditors are the ones commencing the proceedings, Bloomberg
states.  In fact, it could be harder for the sovereign to find a
jurisdiction willing to hear its case, given the current sanctions,
Bloomberg notes.

Still, Russia's Siluanov has said a number of times that the
government is ready to take legal action, Bloomberg relates.  If it
does, it would be submitting to a judicial process and providing a
forum to discuss the circumstances that led up to the sanctions,
according to Mr. Manuelides.

A legal procedure could even be started by one of the banks in the
payment chain, according to Christopher F. Graham, a bankruptcy and
restructuring partner at White and Williams in
New York, Bloomberg notes.

Under English law, Russia could argue that it fulfilled its end of
the bargain, according to two London-based lawyers, speaking on
condition of anonymity as they are in talks with the parties
involved, Bloomberg discloses.  The bonds are governed by English
law, but there's no jurisdiction clause in the documentation,
Bloomberg states.

One angle is force majeure, and although sanctions historically
haven't fallen under this category, the sovereign and its legal
counsel might still give it a go. A counter argument could be that
Russia itself created the circumstances that frustrated the
contract by attacking the sovereignty of another country, according
to Bloomberg.

Investors will look at where it would make sense strategically to
commence proceedings, where Russia's assets are and to what extent
there will be a recognition of any judgement, said Deborah North, a
partner at Allen & Overy, Bloomberg relates.  England may prove the
most likely choice. But then there's the matter of enforcement,
Bloomberg says.

Assets of the central bank have a higher level of protection, and
so do diplomatic assets, which are protected under the Vienna
Convention. Investors would need to look for things like airplanes,
shareholdings, real property assets, bank accounts of the Ministry
of Finance, and to find them in jurisdictions that would enforce a
ruling by, for example, an English or US court.

One of the issues, though, is that the documents don't have a
waiver of sovereign immunity. That'll make enforcing any ruling
difficult.

Bondholders could kick start an arbitration claim based on
investment treaties (bilateral or multilateral agreements) between
Russia and the countries where the investors are based, according
to Bloomberg.

Another option is an out-of-court, consensual restructuring of
Russia's sovereign debt, although that's difficult given all of the
sanctions and the reputational issues that bondholders would face,
Bloomberg states.

While they haven't formally organized yet, bondholders have
discussed their options with different law firms, according to
people with knowledge of the matter, who spoke to Bloomberg on the
condition of anonymity.




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

BUSINESS MORTGAGE 4: Fitch Lowers Rating on Class C Debt to CCsf
----------------------------------------------------------------
Fitch Ratings has downgraded five tranches of the Business Mortgage
Finance (BMF) series and affirmed 16 tranches.

   DEBT                        RATING                PRIOR
   ----                        ------                -----
Business Mortgage Finance 4 Plc

Class B XS0249508754         LT B-sf     Downgrade   B+sf
Class C XS0249509133         LT CCsf     Downgrade   CCCsf
Class M XS0249508242         LT AAAsf    Affirmed    AAAsf

Business Mortgage Finance 6 PLC

Class A1 DAC XS0299535384    LT AAAsf    Affirmed    AAAsf
Class A1 XS0299445808        LT AAAsf    Affirmed    AAAsf
Class A2 DAC XS0299536515    LT AAAsf    Affirmed    AAAsf
Class A2 XS0299446103        LT AAAsf    Affirmed    AAAsf
Class B2 XS0299447507        LT Csf      Affirmed    Csf
Class C XS0299447846         LT Csf      Affirmed    Csf
Class M1 XS0299446442        LT CCCsf    Affirmed    CCsf
Class M2 XS0299446798        LT CCCsf    Affirmed    CCCsf

Business Mortgage Finance 7 Plc

Class A1 - Detachable        LT AA-sf    Downgrade   AAsf
Coupon XS0330212597
Class A1 XS0330211359        LT AA-sf    Downgrade   AAsf
Class B1 XS0330228320        LT Csf      Affirmed    Csf
Class C XS0330229138         LT Csf      Affirmed    Csf
Class M1 XS0330220855        LT CCCsf    Affirmed    CCCsf
Class M2 XS0330222638        LT CCCsf    Affirmed    CCCsf

Business Mortgage Finance 5 PLC

B1 XS0271325291              LT CCsf     Affirmed    CCsf
B2 XS0271325614              LT CCsf     Affirmed    CCsf
C XS0271326000               LT Csf      Affirmed    Csf
M1 XS0271324724              LT BBsf     Downgrade   BBBsf
M2 XS0271324997              LT BBsf     Downgrade   BBBsf

TRANSACTION SUMMARY

The BMF transactions are securitisations of mortgages to small and
medium-sized enterprises and to the owner-managed business
community, originated by Commercial First Mortgages Limited. Fitch
has analysed the performance of the transactions using its SME
Balance Sheet Securitisation Rating Criteria.

KEY RATING DRIVERS

Increasing Senior Fixed Fees: In the last couple of years, the
transactions' senior expenses have increased considerably, mainly
due to legal fees and Libor transition costs. The Libor transition
is expected to be completed by the end of 2022 and the other legal
fees are related to a litigation that is unlikely to expose the
issuer to substantial costs in the long term. However, there is no
certainty about when this exceptional level of legal expenses will
taper off. Given the recent trend, Fitch has assumed higher senior
fixed fees than the historical average in its cash flow modelling.
This has had a negative rating impact on the notes.

Portfolio Underperformance: Despite some reductions on the last
interest payment date (IPD) on February 2022, late-stage arrears
have been on an upward trend for the last couple of years, with 3m
plus arrears up by 4.9%, 6.1%, 2.1% and 4.6% from February 2020 to
February 2022 in BMF 4, 5, 6 and 7, respectively. Early stage
arrears have also picked up on the most recent IPDs. Properties
under repossessions currently represent around 10% of the
collateral balance across the four transactions and this could
increase in a more adverse macroeconomic scenario, such as the one
Fitch expects for the next couple of years.

The increase in late stage arrears directly affects Fitch's asset
modelling as they are a driver of the base PD assumption in its
Portfolio Credit Model.

Robust CE Levels: The deals have deleveraged substantially and the
current senior notes' credit enhancement (CE) is between 34.7% (BMF
5) and 93.6% (BMF 6). The increase in CE is the main driver of the
affirmation of the senior notes in BMF 4 and BMF 6. The buildup in
CE does not offset the increase in arrears, the spike in senior
costs and the increasing pool concentration for BMF 5 and BMF 7.

Secondary Quality Collateral: The pools comprise owner-occupied
commercial real estate, which is likely to be more affected by a
deterioration in the economic sentiment, especially due to the
secondary quality of the collateral properties. This leaves the
pool exposed to tail risks in case of an economic downturn.

Junior Notes Mostly Under-Collateralised: The combination of past
cumulative large losses and insufficient excess spread has led to
the depletion of reserve funds and increasing principal deficiency
ledgers (PDL). Specifically, the outstanding PDLs in BMF 5, 6 and 7
account for 18.0%, 31.6% and 26.8% of the current notes balance,
respectively. The debited PDLs, together with the presence of other
loans in litigation but still not provisioned for, leave the junior
notes in serious distress. These distressed notes are rated from
'CCCsf' to 'Csf' depending on each the level of subordination and
the transaction's recovery prospects.

RATING SENSITIVITIES

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

The transactions' performance may be affected by changes in market
conditions and economic environment. Weakening asset performance is
strongly correlated with increasing levels of delinquencies and
defaults that could reduce CE available to the notes. Fitch tested
a 25% increase in the weighted average foreclosure frequency and a
25% decrease in the weighted average recovery rate. The results
indicate downgrades of up to four notches for BMF 4, six notches
for BMF 5, and seven notches for BMF 7. There would be no impact on
BMF 6.

Further losses and increases in PDLs beyond Fitch's stresses could
lead to negative rating action, particularly on the mezzanine and
junior notes. Given the secondary quality of the collateral, a
downturn of the economic cycle is likely to affect performance more
than other UK structured finance transactions.

If legal fees remain at the current exceptionally high level for a
longer period than expected, further erosion on transaction excess
spread could lead to further downgrades.

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

Stable to improved asset performance driven by stable delinquencies
and defaults would lead to increasing CE levels and potential
upgrades. Fitch tested an additional rating sensitivity scenario by
applying a decrease in the foreclosure frequency of 30% and an
increase in the recovery rate of 25%. The ratings for the
subordinated notes could be upgraded by up to seven notches for BMF
5, two-notches for BMF 4, four notches for BMF 6 and three notches
for BMF 7.

BEST/WORST CASE RATING SCENARIO

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

USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.

DATA ADEQUACY

Business Mortgage Finance 4 Plc, Business Mortgage Finance 5 PLC,
Business Mortgage Finance 6 PLC, Business Mortgage Finance 7 Plc

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

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

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

ESG CONSIDERATIONS

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.


DERBY COUNTY FOOTBALL: Takeover by Kirchner At Risk of Collapsing
-----------------------------------------------------------------
Sam May at talkSport reports that the Derby County Football Club
takeover looks in danger of collapsing with reports that buyer,
Chris Kirchner, has been unable to deliver the necessary funds.

According to talkSport, the American entrepreneur was expected to
close the deal at several meetings last week, but told fans on
social media that Bank Holidays in the USA and UK had held back the
money transfer process.

However, it looks as though it may not go ahead as planned, with
Mr. Kirchner believed to have missed all of the completion times to
seal the swoop for the Rams, talkSport discloses.

The deal was expected to be completed by May 31, the EFL previously
stated, and supporters have endured a painful eight months, which
has seen the club suffer a 21-point deduction and relegation to
League One, talkSport notes.

Derby went into administration back in September 2021 after
previous owner Mel Morris overspent and incurred debts of over
GBP60 million, talkSport recounts.

Any takeover would not only see the club out of administration, but
would also see the ownership of their Pride Park Stadium swap
hands, as it's still in the name of Morris, talkSport relates.

After the EFL ensured Mr. Kirchner had "conditional approval" to
buy the club, they were satisfied at the proof of funds -- lawyers
were then expected to sign and exchange contracts, but no further
closure meeting has been confirmed as yet," talkSport states.


MAKING IT EASY: Director Banned for Six Years After Liquidation
---------------------------------------------------------------
Stuart MacDonald at GlasgowLive reports that the boss of a boiler
replacement company that bombarded people with almost one million
nuisance calls has been banned from running a company for six
years.

Ashley Dodwell ran Making it Easy, which broke rules on telephone
messages after spamming people with calls between May and December
2018 in a bid to sell services, GlasgowLive discloses.

According to GlasgowLive, the calls were made to those registered
with the Telephone Preference Service (TPS), which is supposed to
ensure their numbers are not targeted by unsolicited marketers.  It
is against the law to make marketing calls to numbers that have
been registered with the TPS for more than 28 days unless people
have given consent.

The company was fined GBP160,000 by the Information Commissioner's
Office (ICO) in July 2019 for the nuisance calls but ceased trading
three weeks later and was later placed into liquidation,
GlasgowLive relates.

Ms. Dodwell, 37, of Glasgow, has now been disqualified from acting
as a company director for six years following an investigation by
the Insolvency Service, GlasgowLive states.


MITCHELLS & BUTLERS: Fitch Affirms 'B+' Rating on Class D Notes
---------------------------------------------------------------
Fitch Ratings has revised the Outlook on Mitchells & Butlers
Finance Plc's (M&B) class A notes and interest rate swaps and cross
currency swaps to Stable from Negative and affirmed the ratings at
'A+'. Fitch has also affirmed the class AB, class B, C and D notes
at 'A', 'BB+', 'BB' and 'B+', respectively. The Outlooks are
Negative.

   DEBT                  RATING                PRIOR
   ----                  ------                -----
Mitchells & Butlers Finance Plc

Mitchells & Butlers     LT BB+     Affirmed    BB+
Finance Plc/Debt/3 LT

Mitchells & Butlers     LT A+      Affirmed    A+
Finance Plc/Debt/1 LT

Mitchells & Butlers     LT B+      Affirmed    B+
Finance Plc/Debt/5 LT

Mitchells & Butlers     LT BB      Affirmed    BB
Finance Plc/Debt/4 LT

Mitchells & Butlers     LT A       Affirmed    A
Finance Plc/Debt/2 LT

RATING RATIONALE

The revision of the Outlook on the class A notes and the swaps
reflects the cushion on class A's financial metrics, even in a
scenario of increasing inflation affecting issuer demand, cost base
and ultimately its cash flow generation.

The limited visibility of the impact of higher inflation on the
issuer's free cash flow (FCF) drives the Negative Outlook on all
other notes, which unlike the class A notes have limited headroom
against the downgrade triggers.

KEY RATING DRIVERS

Sector Recovery Continues: Industry Profile - Midrange

The UK pub sector has been materially affected by the Covid-19
pandemic and its related containment measures. Restrictions have
gradually been lifted and trade volumes are recovering, although
some uncertainties remain. The recovery started in 2021 and Fitch
expects the sector to be fully recovered by the end of 2023.
However, the pub sector remains under pressure, particularly from
higher inflation impacting consumer spending, as well as wage,
utility and food and drinks costs, which is reflected through a
long-term contraction of FCF.

The pub sector has a long history and is deeply rooted in the UK's
culture. However, in recent years (pre-pandemic), pub assets have
shown significant weakness. The sector is highly exposed to
discretionary spending, strong competition (including from the
off-trade), and other macro factors such as minimum wages, rising
utility costs and some regulatory changes, such as the introduction
of the market rent only option in the tenanted/leased segment. For
bigger pub groups, Fitch considers price risk limited but volume
risk high.

In terms of barriers to entry, licensing laws and regulations are
moderately stringent, and managed pubs and tenanted pubs (i.e.
non-full repairing and insuring) are fairly capital-intensive.
However, switching costs are generally viewed as low, even though
there may be some positive brand and captive market effects. In
terms of sustainability, Fitch expects the strong pub culture in
the UK to persist, leading people back to pubs, despite the
potentially unfavourable economic situation caused by Brexit and
Covid-19.

Sub-KRDs - Operating Environment: Weaker, Barriers to Entry:
Midrange, Sustainability: Midrange

Managed Estate with Better Profitability Visibility - Company
Profile: Stronger

M&B is a large operator of restaurants, pubs and bars in the UK,
including a range of well-known brands aimed at both the more
expensive and value-end of the market. The company's trading
history (2006-2019 CAGR per pub of 2.9%) has shown resilience to
declining UK pub industry fundamentals. However, revenue growth was
severely affected by the Covid-19 pandemic.

Management has acted swiftly during the pandemic in terms of cost
control and liquidity enhancing, among others. It has successfully
raised GBP350.5 million equity at the M&B group level.

The securitised portfolio includes 1,337 outlets as of April 2022.
Almost all of M&B's estates are managed pubs, so it has better
visibility over underlying profitability. The pubs are
well-maintained and feature a high minimum maintenance covenant.
M&B has a long record of spending maintenance capex in excess of
the required level, even during the pandemic.

Sub-KRDs: Financial Performance: Midrange; Company Operations:
Stronger; Transparency: Stronger; Dependence on Operator: Midrange;
Asset Quality: Stronger

Fully Amortising, Moderate Leverage - Debt Structure: Class A,
Swaps - Stronger, Class AB, B, C and D - Midrange

The debt is fully amortising but there is some concurrent
amortisation with junior tranches. The notes are a combination of
fixed-rate and fully hedged floating-rate debt.

The security package is strong, with comprehensive first-ranking
fixed and floating charges over borrower assets. Class A is the
senior ranking controlling creditor, with the junior notes ranking
lower, resulting in a 'Midrange' assessment. The securitised estate
also benefits from a liquidity facility covering 18 months debt
service, tranched at the class C and D levels. Other structural
features include debt service covenants and restricted payment
conditions, which are tested quarterly.

Fitch views the creditworthiness of the issuer's obligations under
the interest rate and cross currency swaps as consistent with the
long-term ratings of the most senior class of notes, as the swaps
are expected to default with the notes under certain scenarios.

Sub-KRDs: Debt Profile: 'Stronger' for the class A notes and swaps
and 'Midrange' for the class AB, B, C and D notes, Security
Package: 'Stronger' for the class A notes and swaps and 'Midrange'
for the class AB, B, C and D notes. Structural Features: 'Stronger'
for all notes and swaps.

PEER GROUP

M&B's closest peers are hybrid pubco securitisations, such as
Greene King Finance Plc, Spirit Issuer Plc, and Marston's Issuer
Plc, although Fitch considers M&B has a more reactive and
transparent business model as a result of being the only
fully-managed estate among Fitch-rated peers.

M&B's class A and AB notes are rated at the pub sector rating cap
category and higher than other senior debt tranches in Fitch's
whole business securitisation pub portfolio due to its
comparatively strong financial metrics. However, Fitch views the
junior notes as well-aligned with its pub peers

RATING SENSITIVITIES

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

Projected FCF debt service coverage ratios (DSCR) below 2.2x, 1.9x,
1.2x, 1.0x and 1.0x for the class A, AB, B, C and D notes,
respectively, could lead to a downgrade.

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

The Outlook on the class AB, B, C and D notes could be revised to
Stable if Fitch observes a sustained improvement in credit metrics
for the next five years compared with Fitch's current expectations,
which reflect inflationary pressures on costs and consumer
disposable income.

BEST/WORST CASE RATING SCENARIO

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

TRANSACTION SUMMARY

M&B is a securitisation group and operating business of the managed
pub estate operator Mitchells & Butlers Retail. As of April 2022,
the securitised group contained 1,337 pubs/restaurants.

CREDIT UPDATE

Recovery Continuing, Cost Pressures Building: M&B's FY21 (ending
September 2021) like-for-like sales were down by 9.6% versus 2019 -
the last full year of trading due to extended trading restrictions
during the year to contain the spread of Covid-19. From 19 July
2021, restrictions were substantially removed and sales increased
strongly into autumn 2021. However, with the emergence of the
Omicron variant in December and limitations on gatherings over the
Christmas period, sales were 6% down on 2019 levels over the seven
weeks ending January 8 2022. However, 2Q22 sales picked up strongly
and turnover shows a clear recovery despite the reversion to full
VAT.

Government support measures have now expired including furlough
money and business rates holidays. At the same time, cost pressures
are mounting with inflationary pressures on food and drink and
utility costs.

Improved Liquidity Since Pandemic: As of end-April 2022, M&B had
GBP59 million (GBP33 million in April 2021) cash in hand at the
securitisation and the liquidity facility (LF) was fully available
(GBP295 million) compared with GBP236.3 million of a GBP295 million
LF undrawn in April 2021. Consequently, the liquidity position has
improved at the securitisation level.

The group's liquidity position was also strengthened through
raising GBP351 million through an open offer in March 2021. As at
25 September 2021, the group had cash and cash equivalents of over
GBP200 million and undrawn committed unsecured facilities of GBP150
million due February 2024.

LIBOR Switch to SONIA Complete: During the year, the group
transitioned its financing arrangements replacing LIBOR with a
SONIA based rate for sterling and a SOFR based rate for US dollars.
The amendments for the securitised bonds were agreed by bondholders
through a formal consent solicitation process and bilateral
agreements were reached with securitised swap and liquidity
facility providers.

FINANCIAL ANALYSIS

Fitch's 2022 rating case assumes a full recovery to pre-pandemic
trading by end-2023. From 2024 onwards, Fitch assumes constant
long-term growth rates of 1.5%.

We project FCF to slightly decline by a CAGR of 0.1% between 2026
and 2036, with a faster decline (1.7%) between 2023 and 2026. This
is largely driven by moderate expected sales growth combined with
the expected cost pressures.

The projected metrics FCF DSCR (minimum of average and median for
the specific debt term) under the current Fitch rating case for the
class A, AB, B, C and D are 2.3x, 1.9x,1.2x, 1.1x and 1.1x,
respectively.

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.


NORTHERN POWERHOUSE: Huddersfield Hotel Abandoned After Collapse
----------------------------------------------------------------
Lucy Marshall at YorkshireLive reports that a once-loved
Huddersfield hotel and wedding venue that was left abandoned after
an administration nightmare.

The Old Golf House Hotel in Outlane was popular for its events, and
Sunday lunches, but sadly closed in 2020, YorkshireLive recounts.
The hotel was put into administration and a probe was started into
the finances of its owners, Northern Powerhouse Developments,
YorkshireLive discloses.

According to YorkshireLive, at the time of closure, Joint
Administrators said: "Following the recent updated Government
guidelines and further advice from Assured Hotels regarding the
remaining hotels' trading outlook, the Joint Administrators have
taken the decision to close the trading operations of four hotels
including The Old Golf House Hotel.

"This would have a direct detrimental impact on the sales/revenue
of the hotels and the Hotels would incur further losses during this
period. The costs associated with social distancing measures are
anticipated to increase which would increase losses across the
hotels."

Surrounded by 3 acres of landscaped gardens, the once high-end
hotel was built in the 17th century.


QUINTO CRANE: Asset Auction Scheduled for June 23
-------------------------------------------------
The Construction Index reports that the administrators of Quinto
Crane & Plant have given up trying to sell the failed hire company
as a going concern and shipped all the kit off to auction.

Euro Auctions has been appointed to dispose of assets of Quinto
Crane & Plant, The Construction Index relates.  According to The
Construction Index, the sale will take place at the Anson Road
auction site near Norwich Airport on June 23, 2022.

Norwich-based Quinto went into administration last month, The
Construction Index recounts.  Local accountancy firm Price Bailey
was appointed administrator and initially sought a buyer for the
whole business, The Construction Index discloses.  It has now
appointed Euro Auctions to value and dispose of the assets of the
business, The Construction Index notes.

Cranes going to auction include Liebherr and Demag all-terrain
models, a 300-tonne Grove GMK6300L and six-year old Spierings
SK597-AT4 truck-mounted tower crane, The Construction Index
states.

The June 23 auction will be live streamed on the Euro Auctions
bidding platform and viewing days will be on June 21 and June 22,
The Construction Index says.

According to The Construction Index, Matt Howard, head of
insolvency and recovery at Price Bailey, said: "The directors of
the business made the difficult decision for Quinto Crane & Plant
Ltd to cease trading in late April 2022.  Price Bailey have been
instructed to assist with the administration, and we will be
seeking buyers for the individual assets of the business.  We are
delighted to be working with Euro Auctions on this disposal and
their experience in the crane and heavy lifting sector, with
previous sales like the disposal of the Hewden assets, made them a
natural fit for this auction.  We look forward to working closely
with the Euro Auctions team over the coming months and maximising
returns for creditors."


SNOW TOPCO: Fitch Assigns First Time 'B' LongTerm IDR
-----------------------------------------------------
Fitch Ratings has assigned first-time Long-Term Issuer Defaults
Ratings (IDRs) of 'B' to Snow Topco, Ltd. and its subsidiary, Snow
Borrower Inc., (collectively referred to as "Kofax").  Fitch has
also assigned Snow Borrower a 'BB-'/'RR2' first-lien term loan
rating, and 'CCC+'/'RR6' second-lien term loan rating.  The Rating
Outlook is Stable.

Kofax's 'B' rating is supported by recurring revenues which Fitch
expects to increase, a high retention rate, and strong cash
generative qualities. The IDR also reflects the company's highly
diverse customer base and importantly, the sticky nature of its
product offerings. As a private equity owned entity, financial
leverage is likely to remain elevated as shareholders prioritize
ROE optimization rather than debt reduction. Fitch expects Kofax to
delever modestly primarily through EBITDA growth and maintain a
level of leverage that is consistent with 'B' rated software
peers.

KEY RATING DRIVERS

High Leverage: Kofax's 'B' rating reflects its high leverage
profile despite its retention rate and recurring revenue
characteristics. Pro forma for the planned issuance of debt, Fitch
calculates leverage was 7.4x at the end of 2021. Leverage is
forecast to modestly improve with mandatory amortization payments
and EBITDA growth. Fitch forecasts leverage at approximately 7.0x
at the end of 2023. The large debt burden will also pressure
Kofax's interest coverage metrics, which Fitch forecasts to be at
or below 2.0x. Fitch assumes Kofax will prioritize spending for
growth over debt reduction.

Recurring Revenues/Retention: Recurring revenues have been modestly
increasing over time. As of July 1, 2021, Kofax implemented a
strategy to grow these recurring revenues. The company's sponsors
have successfully implemented a similar strategy with a different
portfolio company. These factors along with the company's strong
retention rate and the sticky nature of the product, should provide
the company with fairly stable cash flows over the forecast
horizon.

Strong EBITDA Margins/FCF: In 2021, Fitch calculates Kofax had 42%
EBITDA margins, which should expand over time as recurring revenues
increase. With low capex requirements, the company has consistently
generated significant FCF. Fitch forecasts Kofax will continue to
generate healthy cash flows; however, they will be much lower than
historical FCF due to the interest expense burden. FCF margins are
forecast to be strong and in the high single digits to low double
digits.

Transition to Increase Subscription Revenues: In July 2021, Kofax
began a strategic transition to increase its term and SaaS
contracts rather than perpetual licenses. These types of pivots can
temporarily disrupt the business, but provide more stable cash
flows for the longer term. During the transition, expenses may
increase causing temporary EBITDA margin compression and longer
term, higher recurring revenues should help expand EBITDA margins.

Diverse Customers and End Markets: The company offers its products
to a large number of customers globally, and its end markets are
diverse. Kofax has successfully secured several global banks as
clients, some Fortune 100 companies and as well as some of the
Forbes Global 2000.

Kofax has a leading Intelligent Automation (IA) platform that
allows its customers to automate high volume manual processes,
allowing companies to significantly improve efficiencies. In 2021,
IA accounted for 71% of revenues, while print automation accounted
for 29%. Growth in IA is forecast to more than offset print
automation, which is expected to experience very modest
contraction. Its largest end markets include financial
institutions, manufacturing, retail, healthcare and government
organizations.

DERIVATION SUMMARY

Kofax's 'B' rating reflects its strong position in intelligent
automation (IA) and print automation. It also reflects the
company's strong EBITDA margins and FCF generation along with its
high leverage. The company provides customers of varying scale the
means to improve the speed and efficiency of intense workflows.
Kofax does this with a product suite helping businesses manage and
automate processes. Kofax's operating profile is also strengthened
by its high retention rate and recurring revenues which is a focus
for the company and expected to expand. Limitations to Kofax's
rating include its financial leverage, which is expected to be
maintained at a moderate level.

Fitch expects Kofax to maintain some level of financial leverage as
a private equity owned company, as equity owners optimize capital
structure to maximize ROE. Kofax's market position, revenue scale
and visibility, as well as its leverage profile, are consistent
with the 'B' rating category.

Fitch rates Snow Topco, Ltd.'s and its subsidiary, Snow Borrower
Inc.'s IDRs on a consolidated basis, using the weak parent/strong
subsidiary approach, and open access and control factors, based on
the entities operating as a single enterprise with strong legal and
operational ties.

KEY ASSUMPTIONS

Fitch's Key Assumptions Within The Rating Case for the Issuer:

-- Revenues are fairly flat in 2022 and increase in the mid to
    low single digits over the forecast horizon;

-- Higher revenues are attributed to organic growth as well as
    potential acquisitions;

-- Fitch assumes Kofax directs cash toward acquisitions for
    growth rather than debt reduction;

-- EBITDA margins are in the low 40's and expand due to the
    increase in recurring revenues;

-- No dividends are assumed.

KEY RECOVERY RATING ASSUMPTIONS

The recovery analysis assumes that Kofax would be reorganized as a
going concern in bankruptcy rather than liquidated. Fitch assumes a
10% administrative claim.

Going-Concern (GC) Approach

-- Fitch assumes Kofax enters a distressed scenario as a result
    of greater customer churn and margin compression on a lower
    revenue scale. As a result, Fitch assumes Kofax's GC EBITDA to

    decline.

An EV multiple of 7x EBITDA is applied to the GC EBITDA to
calculate a post-reorganization enterprise value. The choice of
this multiple considered the following factors:

-- The historical bankruptcy case study exit multiples for
    technology peer companies ranged from 2.6x-10.8x;

-- Of these companies, only three were in the Software sector:
    Allen Systems Group, Inc.; Avaya, Inc.; and Aspect Software
    Parent, Inc., which received recovery multiples of 8.4x, 8.1x,

    and 5.5x, respectively;

-- Kofax's growing and resilient recurring sales profile, mission

    critical nature of the product, brand recognition, leadership
    position in the revenue operations management industry, and
    cash generative qualities supports the 7.0x recovery multiple.

RATING SENSITIVITIES

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

-- Total Debt with Equity Credit/Operating EBITDA below 5.5x on a

    sustained basis;

-- (CFO-Capex)/Total Debt with Equity Credit above 7.5% on a
    sustained basis;

-- Organic revenue growth in the high single digits.

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

-- Total Debt with Equity Credit/Operating EBITDA above 7.5x on a

    sustained basis;

-- (CFO-Capex)/Total Debt with Equity Credit below 2.5% on a
    sustained basis;

-- Operating EBITDA/Interest Paid below 1.5x on a sustained
    basis;

-- Organic revenue growth sustaining near or below 0%.

BEST/WORST CASE RATING SCENARIO

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

LIQUIDITY AND DEBT STRUCTURE

Sufficient Liquidity: Fitch forecasts Kofax should have adequate
liquidity. Once the refinancing for the transaction is done, there
should be $50 million of cash on the balance sheet and the $150
million secured revolver is to be undrawn. FCF generation and
margins of approximately 40% or better also support liquidity.

Debt Structure: Kofax intends to issue a $1,346 million first term
loan due 2029 and a $348 million secured second lien term loan due
2030. Given the recurring revenue nature of the business and
adequate liquidity, Fitch believes that Kofax will be able to make
its required debt payments.

ESG CONSIDERATIONS

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

ISSUER PROFILE

Kofax is a privately held company that offers its customer
Intelligent Automation (IA) solutions which allow its customers to
automate high volume manual processes, allowing companies to
significantly improve efficiencies. In addition, it also offers
print automation solutions. Its products are offered to more than
25,000 customers throughout the globe.

   DEBT                           RATING              RECOVERY
   ----                           ------              --------
Snow Topco, Ltd.           LT IDR    B     New Rating

Snow Borrower Inc.         LT IDR    B     New Rating

  senior secured           LT        BB-   New Rating     RR2

  Senior Secured 2nd Lien  LT        CCC+  New Rating     RR6


WOODFORD EQUITY: Rutherford Health Bankruptcy to Hit Investors
--------------------------------------------------------------
Sam Benstead at interactive investor reports that oncology clinic
chain Rutherford Health declared bankruptcy on June 6, dealing
another blow to investors still trapped in the collapsed Woodford
Equity Income fund.

According to interactive investor, Neil Woodford was among the
largest backers of Rutherford Health, one of the remaining nine
unquoted positions that fund administrator Link Fund Solutions was
struggling to sell as it wound up the strategy.

Link took the decision to close the fund, liquidate its holdings
and return the cash to investors in mid-2019, meaning that nearly
three years have passed with investors in limbo waiting for their
capital to be returned, interactive investor recounts.

Woodford Equity Income, which once had more than GBP10 billion
invested in it, now has just GBP125 million left, interactive
investor relays, citing its latest accounts published in September
2021.

Rutherford Health accounted for 30% of the remaining assets as of
this date, meaning investors could stand to lose GBP37 million if
that percentage weighting is still the same and the unquoted shares
are marked down to zero, interactive investor notes.

To date, Link has made four capital distributions to investors
totalling GBP2.54 billion from the sale of the Woodford Equity
Income's assets, interactive investor states.  It began the wind-up
process in January 2020 but has been unable to sell many illiquid
unquoted stocks, interactive investor, according to interactive
investor.

Link says that it will update investors again in July on the asset
sale process, interactive investor notes.



                           *********


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

Troubled Company Reporter-Europe is a daily newsletter co-
published by Bankruptcy Creditors' Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA.
Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante,
Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman,
Editors.

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

This material is copyrighted and any commercial use, resale or
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Information contained herein is obtained from sources believed to
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