/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/220922.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Thursday, September 22, 2022, Vol. 23, No. 184 Headlines B E L A R U S BELARUS: Fitch Downgrades Rating on 4 Sovereign Eurobonds to 'D' F R A N C E PARTS HOLDING: Moody's Upgrades CFR to B2, Outlook Remains Stable I R E L A N D TIKEHAU CLO VII: Fitch Assigns 'B-sf' Rating on Class F Debt K A Z A K H S T A N FORTEBANK JSC: Fitch Hikes LongTerm IDRs to BB-, Outlook Stable L U X E M B O U R G ARMORICA LUX: S&P Affirms 'B-' ICR & Alters Outlook to Negative R U S S I A IPOTEKA BANK: S&P Affirms 'BB-/B' ICRs on Privatization Delay U N I T E D K I N G D O M EUROMAX V: S&P Raises Rating on Class A2 Notes to 'BB-(sf)' M&M: Crane Sale Raises GBP4.6MM Following Voluntary Liquidation PREFERRED RESIDENTIAL 06-1: Fitch Affirms B- Rating on E1c Notes SPECIALIST EDUCATION: Goes Into Voluntary Liquidation WASPS: Files Notice of Intention to Appoint Administrator WIGNALLS ESTATE: Goes Into Liquidation, Halts Trading WORCESTER WARRIORS: Creditor Balks at Sport England Loan YORKSHIRE LAVENDER: Owed GBP1MM to Creditors at Time of Collapse - - - - - ============= B E L A R U S ============= BELARUS: Fitch Downgrades Rating on 4 Sovereign Eurobonds to 'D' ---------------------------------------------------------------- Fitch Ratings has downgraded four Belarussian sovereign Eurobonds to 'D' from 'C' and affirmed Belarus's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'RD'. Fitch typically does not assign Outlooks to sovereigns with a rating of 'CCC+' or below. The Belarussian sovereign Eurobonds are: Rated Entity/Debt Rating Type Rating Rating Action ----------------- ----------- ------ ------ ISSUER: Belarus DEBT LEVEL: senior unsecured ISSUE: USD 500 mln 5.875% bond/note 24-Feb-2026 Long Term Rating D Downgrade ISSUER: Belarus DEBT LEVEL: senior unsecured ISSUE: USD 600 mln 6.2% bond/ note 28-Feb-2030 Long Term Rating D Downgrade ISSUER: Belarus DEBT LEVEL: senior unsecured ISSUE: USD 600 mln 7.625% bond/note 29-Jun-2027 Long Term Rating D Affirmed 14-Sep-2022 ISSUER: Belarus DEBT LEVEL: senior unsecured ISSUE: USD 750 mln 6.378% bond/note 24-Feb-2031 Long Term Rating D Downgrade ISSUER: Belarus DEBT LEVEL: senior unsecured ISSUE: USD 800 mln 6.875% bond/note 28-Feb-2023 Long Term Rating D Downgrade EU CALENDAR DEVIATION DISCLOSURE Under EU credit rating agency (CRA) regulation, the publication of sovereign reviews is subject to restrictions and must take place according to a published schedule, except where it is necessary for CRAs to deviate from this in order to comply with their legal obligations. Fitch interprets this provision as allowing us to publish a rating review in situations where there is a material change in the creditworthiness of the issuer that we believe makes it inappropriate for us to wait until the next scheduled review date to update the rating or Outlook/Watch status. The next scheduled review date for Fitch's sovereign rating on Belarus will be October 28, 2022 but Fitch believes that developments in the country warrant such a deviation from the calendar and our rationale for this is set out in the first part (High weight factors) of the Key Rating Drivers section below. KEY RATING DRIVERS The downgrade of the ratings on four Belarusian Eurobonds reflects the following key rating drivers and their relative weights: High Grace Period Ends: Following the expire of the 14-day grace periods Fitch has downgraded four long-term foreign currency securities to 'D' from 'C'. The grace periods for the 2023 and 2030 Eurobonds expired on September 12and for the 2026 and 2031 Eurobonds on September 7. All of Belarus's outstanding Eurobonds are now rated 'D'. Original Terms Not Fulfilled: On June 29, the Ministry of Finance, Council of Ministers and the National Bank of Belarus jointly announced that payments due in US dollars on Eurobonds will instead be transferred in Belarussian rubles into an account at ASB Belarusbank that could be accessed by the paying agent. This contravenes bond documentation, which does not allow for settlement in alternative currencies. The Ministry of Finance has announced that interest payments for the four Eurobonds were made under this approach. The payments were therefore not fulfilled under the original terms by the end of the grace period. Other Ratings Affirmed: The downgrade applies only to the four affected Eurobonds. Belarus's Long-Term Foreign-Currency IDR has been affirmed after it was downgraded to 'RD' on July 18 following the expiry of the grace period on the first Eurobond that was not fulfilled under the original terms. Fitch has affirmed Belarus's Long-Term Local-Currency IDR at 'CCC', as the government has continued to service local-currency debt and Fitch does not view the default risk on this debt as having materially changed since our previous review on July 18, 2022. Fitch has also affirmed Belarus's Short-Term IDRs at 'C' and the Country Ceiling at 'B-'. ESG - Governance: Belarus has an ESG Relevance Score of '5' for both political stability and rights and for the rule of law, institutional and regulatory quality and control of corruption, as is the case for all sovereigns. These scores reflect the high weight that the World Bank Governance Indicators (WBGI) have in our proprietary Sovereign Rating Model (SRM). Belarus has a low WBGI ranking at the 24th percentile, reflecting the high concentration of power in the hands of President Lukashenko who has been in office since 1994, a low level of rights for participation in the political process and moderate institutional capacity. ESG - Creditor Rights: Belarus has an ESG Relevance Score of '5' for creditor rights as willingness to service and repay debt is highly relevant to the rating and is a key rating driver with a high weight. ESG - International Relations and Trade: Belarus has an ESG Relevance Score of '5' for international relations and trade, reflecting the detrimental impact of sanctions and close economic linkages, dependence on bilateral financial support and complex relationship with Russia, which are highly relevant to the rating and a key rating driver with a high weight. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: -- The Long-Term Local-Currency IDR would be downgraded if Fitch assesses there has been a deterioration in Belarus's capacity and/or willingness to service its local-currency-denominated debt. Factors that could, individually or collectively, lead to positive rating action/upgrade: -- The Long-Term Foreign-Currency IDR could be upgraded if Fitch judges there has been a normalisation of relations with international creditors through a commercial debt restructuring or a resumption of payments on the affected Eurobonds in line with the original terms and clear signs that the government is willing and able to continue to make payments. SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO) In accordance with its rating criteria, Fitch's sovereign rating committee has not utilised the SRM and QO to explain the ratings in this instance. Ratings of 'CCC+' and below are instead guided by the rating definitions. Fitch's SRM is the agency's proprietary multiple regression rating model that employs 18 variables based on three-year centred averages, including one year of forecasts, to produce a score equivalent to a LT FC IDR. Fitch's QO is a forward-looking qualitative framework designed to allow for adjustment to the SRM output to assign the final rating, reflecting factors within Fitch's criteria that are not fully quantifiable and/or not fully reflected in the SRM. ESG CONSIDERATIONS Belarus has an ESG Relevance Score of '5' for Political Stability and Rights as World Bank Governance Indicators have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and a key rating driver with a high weight. As Belarus has a percentile rank below 50 for the respective Governance Indicator, this has a negative impact on the credit profile. Belarus has an ESG Relevance Score of '5' for Rule of Law, Institutional & Regulatory Quality and Control of Corruption as World Bank Governance Indicators have the highest weight in Fitch's SRM and are therefore highly relevant to the rating and are a key rating driver with a high weight. As Belarus has a percentile rank below 50 for the respective Governance Indicators, this has a negative impact on the credit profile. Belarus has an ESG Relevance Score of '5' for Creditor Rights as willingness to service and repay debt is highly relevant to the rating and a key rating driver with a high weight. On September 12, 2022, grace periods had expired on foreign-currency-denominated payments for all Eurobonds; none of which were fulfilled in line with the original terms, which has a negative impact on the ratings. Belarus has an ESG Relevance Score of '5' for international relations and trade, reflecting the detrimental impact of sanctions and close economic linkages, dependence on bilateral financial support and complex relationship with Russia, which are highly relevant to the rating and a key rating driver with a high weight. This has a negative impact on the credit profile. Belarus has an ESG Relevance Score of '4' for human rights and political freedoms as the voice and accountability pillar of the WBGI is relevant to the rating and a rating driver. As Belarus has a percentile rank below 50 for the respective governance indicator, this has a negative impact on the credit profile. Except for the matters discussed above, the highest level of ESG credit relevance, if present, 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 to the way in which they are being managed by the entity. Debt Rating Prior ---- ------ ----- Belarus LT IDR RD Affirmed RD ST IDR C Affirmed C LC LT IDR CCC Affirmed CCC LC ST IDR C Affirmed C Country Ceiling B- Affirmed B- senior unsecured LT D Downgrade C senior unsecured LT D Affirmed D =========== F R A N C E =========== PARTS HOLDING: Moody's Upgrades CFR to B2, Outlook Remains Stable ----------------------------------------------------------------- Moody's Investors Service has upgraded the corporate family rating to B2 from B3 and probability of default rating to B2-PD from B3-PD of car parts distributor Parts Holding Europe S.A.S (PHE or the company). Concurrently, Moody's has also upgraded the ratings on the existing guaranteed senior secured notes issued by Parts Europe S.A. to B2 from B3. The outlooks remains stable. RATINGS RATIONALE PHE's upgrade to B2 reflects the company's strong operating performance and track record after the pandemic, and leverage (Moody's adjusted debt/EBITDA), which reduced to 5.7x for LTM June 2022 from 6.4x in 2020. Moody's expects this strong operating performance and improvement in earnings to continue. Even during the pandemic, performance was resilient with revenue falling by only 2% and EBITDA increasing by 1% in 2020 compared to 2019. Moody's also expects that the company will generate positive free cash flow (FCF)/debt of around 2% from 2022 onwards and maintain adequate liquidity, which is important given volatile working capital movements that have occurred in the past. The rating action also takes into account PHE's improved liquidity following the upsizing of the revolving credit facility (RCF) to EUR180 million and no refinancing needs until July 2025. The company's continued strong performance is forecast to be driven by favourable market conditions such as ageing car parc, increasing maintenance costs driven by complexity of the vehicles and price increases of spare parts by OEMs. Moody's expects PHE will continue growing its top line in low-single-digit percentage in the next two years. As a result, Moody's expects adjusted EBITDA of around EUR260-263 million resulting in leverage of around 5.7x over the next 12-18 months. Governance was a key rating driver of the rating action in line with Moody's ESG framework following the closing of sale of PHE to D'Ieteren Group from Bain Capital. Moody's expects D'Ieteren Group to remain a more supportive shareholder who is committed to deleveraging the company while maintaining a conservative financial policy with no plans of dividend distributions or major debt funded acquisitions in the near term. RATING OUTLOOK The stable outlook reflects Moody's expectation that Moody's-adjusted leverage will remain around 5.7x in the next 12-18 months and positive FCF/debt of around 2%. Moody's considers that the company will not execute any major debt-funded acquisitions or shareholder distributions in the short-term as per the company's stated financial policy. LIQUIDITY PROFILE Moody's considers PHE's liquidity to be good and supported by a cash balance of EUR113 million and an undrawn super senior RCF of EUR132.5 million as of August 2022. Moody's expects PHE to increase the RCF by another EUR20 million by the end of September 2022. From 2022 onwards, Moody's expects the company to generate FCF/debt of around 2% even under Moody's assumption of higher interest rates. As part of the documentation, the super senior RCF contains a maintenance springing covenant of super senior secured net leverage to EBITDA of less than 0.7x when the RCF is drawn more than 35%. Moody's expects PHE to maintain ample headroom under this covenant. STRUCTURAL CONSIDERATIONS The B2 ratings on the guaranteed senior secured notes is at the same level as the CFR reflecting the relatively small quantum of super senior debt ranking ahead, namely the RCF. While the RCF and the guaranteed senior secured notes benefit from the same security package as the notes (i.e. shares, bank accounts and intercompany receivables), they will rank ahead of the guaranteed senior secured notes in an enforcement scenario under the provisions of the intercreditor agreement. Also, the obligations of the notes' subsidiary guarantor are capped at EUR330 million. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Moody's will consider upgrading the ratings if a continued improvement in operating performance leads to Moody's-adjusted debt/EBITDA reducing to below 5.0x, Moody's-adjusted EBITA/interest increasing above 3x, and the company maintains a solid liquidity profile including positive Moody's-adjusted free cash flow / debt of around 5%. Negative rating action could materialise if the company fails to improve its operating performance and cash flow generation, or liquidity materially weakens. This would be evidenced by Moody's-adjusted debt/EBITDA remaining sustainably above 6.0x, weak Moody's-adjusted EBITA/ interest cover of below 2.0x, or sustained negative free cash flow. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Distribution & Supply Chain Services Industry published in June 2018. COMPANY PROFILE Headquartered in France, Parts Holding Europe S.A.S is a leading aftermarket light vehicle (LV) spare parts distributor and truck spare parts distributor and repairer in France, Benelux, Italy, and Spain. It also owns Oscaro, the leading online car parts retailer in France, since November 2018. The company generated revenue of around EUR2.1 billion in and Moody's adjusted EBITDA of EUR264 for LTM June 2022. ============= I R E L A N D ============= TIKEHAU CLO VII: Fitch Assigns 'B-sf' Rating on Class F Debt ------------------------------------------------------------ Fitch Ratings has assigned Tikehau CLO VII DAC final ratings. Debt Rating Prior ---- ------ ----- Tikehau CLO VII DAC A – Loan LT AAAsf New Rating A - Note XS2513943345 LT AAAsf New Rating AAA(EXP)sf B-1 XS2513943428 LT AAsf New Rating AA(EXP)sf B-2 XS2513943857 LT AAsf New Rating AA(EXP)sf C XS2513944079 LT Asf New Rating A(EXP)sf D XS2513944236 LT BBB-sfNew Rating BBB-(EXP)sf E XS2513944400 LT BB-sf New Rating BB-(EXP)sf F XS2513944665 LT B-sf New Rating B-(EXP)sf Subordinated Notes XS2513944749 LT NRsf New Rating NR(EXP)sf TRANSACTION SUMMARY Tikehau CLO VII DAC is a securitisation of mainly senior secured obligations (at least 92.5%) with a component of senior unsecured, mezzanine, second-lien loans and high-yield bonds. Note proceeds were used to fund a portfolio with a target par of EUR400 million. The portfolio is actively managed by Tikehau Capital Europe Limited. The collateralised loan obligation (CLO) has a 4.6-year reinvestment period and an 8.5-year weighted average life (WAL) test. KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors at 'B'/'B-'. The Fitch-calculated weighted average rating factor (WARF) of the identified portfolio is 25.08. High Recovery Expectations (Positive): At least 92.5% of the portfolio will comprise senior secured obligations. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-calculated weighted average recovery rate (WARR) of the identified portfolio is 62.7%. Diversified Asset Portfolio (Positive): The transaction has two matrices effective at closing corresponding to the 10-largest obligors at 25% of the portfolio balance and two fixed-rate assets limits at 5% and 12.5% of the portfolio. It also has two forward matrices corresponding to the same top-10 obligor and fixed-rate asset limits that will be effective one year post closing, provided that the aggregate collateral balance (defaults at Fitch-calculated collateral value) will at least be at the target par. The transaction also includes various other concentration limits, including the maximum exposure to the three-largest Fitch-defined industries in the portfolio at 43%. These covenants ensure that the asset portfolio will not be exposed to excessive concentration. Portfolio Management (Neutral): The transaction has a 4.6-year reinvestment period and includes reinvestment criteria similar to those of other European transactions. Fitch's analysis is based on a stressed-case portfolio with the aim of testing the robustness of the transaction structure against its covenants and portfolio guidelines. Cash-flow Modelling (Positive): The WAL used for the transaction's stressed portfolio analysis is 12 months less than the WAL covenant at the issue date to account for the strict reinvestment conditions envisaged by the transaction after its reinvestment period. These include, among others, passing both the coverage tests and the Fitch 'CCC' bucket limitation test as well as a WAL covenant that progressively steps down over time, both before and after the end of the reinvestment period. Fitch believes these conditions will reduce the effective risk horizon of the portfolio during the stress period. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: A 25% increase of the mean default rate (RDR) across all ratings and a 25% decrease of the recovery rate (RRR) across all ratings of the current portfolio would have no impact on the class A notes and would lead to downgrades of no more than two notches for the class B to F notes. Downgrades, which are based on the current portfolio, may occur if the loss expectation is larger than initially assumed, due to unexpectedly high levels of defaults and portfolio deterioration. Due to the better metrics and shorter life of the current portfolio than the Fitch-stressed portfolio, the class E notes display a rating cushion of three notches, the class B, D and F notes a rating cushion of two notches and the class C notes a rating cushion of one notch. Should the cushion between the current portfolio and the Fitch-stressed portfolio be eroded either due to manager trading or negative portfolio credit migration, a 25% increase of the mean RDR across all ratings and a 25% decrease of the RRR across all ratings of the stressed portfolio would lead to downgrades of up to four notches for the rated notes. Factors that could, individually or collectively, lead to positive rating action/upgrade: A 25% reduction of the mean RDR across all ratings and a 25% increase in the RRR across all ratings of the Fitch-stressed portfolio would lead to upgrades of up to four notches for the rated notes, except for the 'AAAsf' notes. During the reinvestment period, upgrades, which are based on the Fitch-stressed portfolio, may occur on better-than-expected portfolio credit quality and a shorter remaining WAL test, leading to the ability of the notes to withstand larger-than-expected losses for the remaining life of the transaction. After the end of the reinvestment period, upgrades may occur on stable portfolio credit quality and deleveraging, leading to higher credit enhancement and excess spread available to cover losses in the remaining portfolio. DATA ADEQUACY The majority of the underlying assets or risk-presenting entities have ratings or credit opinions from Fitch and/or other nationally recognised statistical rating organisations and/or European securities and markets authority-registered rating agencies. Fitch has relied on the practices of the relevant groups within Fitch and/or other rating agencies to assess the asset portfolio information or information on the risk-presenting entities. Overall, and together with any assumptions referred to above, Fitch's assessment of the information relied upon for the agency's rating analysis according to its applicable rating methodologies indicates that it is adequately reliable. =================== K A Z A K H S T A N =================== FORTEBANK JSC: Fitch Hikes LongTerm IDRs to BB-, Outlook Stable --------------------------------------------------------------- Fitch Ratings has upgraded ForteBank Joint Stock Company's (Forte) Long-Term Issuer Default Ratings (IDRs) to 'BB-' from 'B+'. The Outlooks are Stable. Fitch has also upgraded the bank's Viability Rating (VR) to 'bb-' from 'b+'. Fitch has withdrawn Forte's Support Rating of '5' and Support Rating Floor of 'B-' as they are no longer relevant to the agency's coverage following the publication of its updated Bank Rating Criteria on November 12, 2021. In line with the updated Criteria, Fitch has assigned Forte a Government Support Rating (GSR) of 'b-'. KEY RATING DRIVERS IDRs and VR Upgraded: Forte's IDRs are driven by the bank's intrinsic credit strength, as reflected by the VR of 'bb-'. The upgrade of the ratings reflects a material reduction in legacy asset-quality risks in 2021-1H22, which has eased pressure on the bank's capital. It also reflects Forte's extended record of robust profitability through the cycle, which has boosted its capitalisation, as well as the bank's strong funding and liquidity profile. External Shocks Manageable: Given Kazakhstan's strong trade and financial links with Russia, the ongoing Russia-Ukraine conflict and sanctions imposed on Russia by the US and EU have negatively affected Kazakhstan's economy and financial sector. Potential disruption in Kazakhstan's energy exports, a moderate 10% devaluation of its local currency, higher inflation and steeper interest rates pose downside risks to the banking sector's prospects. We have revised down Kazakhstan's GDP growth forecast to 3.6% for 2022 from 4%. However, the banking sector is resilient to external shocks, in our view, due to robust profitability and high capital/liquidity buffers. Legacy Problems Materially Reduced: Impaired loans (Stage 3 and purchased or originated credit-impaired (POCI) loans under IFRS9) halved over the last year to 13% of gross loans at end-2021. This reduction was mainly driven by substantial write-offs and sales of legacy impaired mortgage and home equity loans as well as migration of some corporate exposures to Stage 2 from Stage 3. Rapid loan growth in 1H22 helped to further decrease the impaired loans ratio to 10% and Fitch expects it to remain around the same level in the medium term. Forte's overall asset quality is supported by a limited share of net loans in total assets (just 39% of total assets at end-1H22). Non-loan assets mainly comprised the security book (37% of total assets, predominantly of investment-grade quality) and cash and balances with the National Bank of Kazakhstan (NBK) and other banks (another 17%). Growth Resumed: After four years of low growth (4% on average), Forte's loan book expanded 26% in 1H22 (not annualised). This growth was mainly driven by refinancing of loans from Kazakh subsidiaries of sanctioned Russian banks. Fitch said, "We expect this spike in lending to be temporary and to moderate to 10%-15% within the next year. Forte's loan book is balanced between corporate and retail lending, with an increased focus on higher-margin unsecured cash loans, which should support the bank's profitability in the medium term, in our view." Robust Performance: Forte has demonstrated strong performance over the cycle, with operating profit averaging 5% of risk-weighted assets (RWAs) in the last four years. The bank has maintained stable net interest margin of around 5% in recent years which, coupled with high operating efficiency (the cost-to-income ratio was 36% in 1H22), resulted in robust pre-impairment profit equal to 13% of average gross loans in 1H22 (annualised), up from 9% in 2021. This was comfortably above the loan impairment charges (2% of average loans in 1H22) providing the bank with strong loss absorption capacity through profit and a high return on average equity (33% in 1H22, annualised). High Capital Ratios, Reduced Encumbrance: Due to strong profit generation, Forte's Fitch Core Capital (FCC) stood at a high 24% of RWAs at end-2021. It reduced to 18% by end-1H22 as high loan growth inflated the bank's RWAs. Fitch forecasts the FCC ratio to return to above 20% in 2023 on high profitability and the bank's decision not to pay out dividends in 2022 as well as expected moderation of loan growth in 2H22. Given recent write-offs of impaired loans, pressure on capital from legacy asset-quality problems has materially subsided, with net high-risk assets reducing to 0.3x of FCC at end-1H22 from 0.7x at end-2020. Customer Funding; Ample Liquidity: Customer accounts are by far the main source of funding, accounting for a high 78% of total liabilities at end-1H22, complemented by state-related funding (another 11%). Wholesale debt is low (6% of total liabilities) and mainly comprises short-term repo obligations. Forte benefits from a large cushion of highly-liquid assets (mainly balances with the NBK and investment-grade securities), which made up a high 50% of total assets and, net of planned repayments in the next 12 months, covered almost 70% of customer deposits at end-1H22. Top-5 Bank, Privately-Owned: Forte is currently the fifth-largest bank in Kazakhstan, accounting for 7% of sector assets and deposits at end-1H22. The bank's franchise in lending is narrower (5% of the system at end-1H22) than peers' although it services a number of large export-oriented Kazakh corporates. It is owned by Bulat Utemuratov, one of the richest businessmen in Kazakhstan, who also has assets in natural resources, real estate, telecom, and media. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: Forte's VR and IDRs could be downgraded on material weakening asset quality or capitalisation. In particular, renewed asset-quality pressure, leading the net high-risk assets to exceed 0.5x of FCC could result in a downgrade. In addition, downside rating pressure may result from a combination of weaker profitability, faster loan growth and large dividend distributions reducing the FCC ratio to 12%, which is a threshold for the 'b' implied category capital score under our criteria. Factors that could, individually or collectively, lead to positive rating action/upgrade: An upgrade of Forte's ratings would require further material reduction in net problem assets relative to capital, coupled with some moderation of loan growth, and an extended record of strong profitability, and large capital/liquidity buffers. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS Forte's senior unsecured debt ratings are in line with the bank's Long-Term IDRs, reflecting average recovery prospects in case of default. OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES Changes to Forte's IDRs will be reflected in its debt ratings. VR ADJUSTMENTS No adjustments are needed to the implied VR scores. 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 Prior ---- ------ ----- ForteBank Joint Stock Company LT IDR BB- Upgrade B+ ST IDR B Affirmed B LC LT IDR B+ Affirmed B+ Natl LT A-(kaz) Upgrade BBB(kaz) Viability bb- Upgrade b+ Support WD Withdrawn 5 Support Floor WD Withdrawn B- Government Support b- New Rating senior unsecured LT B+ Affirmed B+ senior unsecured Natl LT BBB(kaz)Affirmed BBB(kaz) =================== L U X E M B O U R G =================== ARMORICA LUX: S&P Affirms 'B-' ICR & Alters Outlook to Negative --------------------------------------------------------------- S&P Global Ratings revised the outlook on Luxembourg-based landscaping services provider Armorica Lux S.a.r.l. to negative from stable, and affirmed its 'B-' ratings on the company and its senior secured term loan B. The negative outlook reflects the increased likelihood of a downgrade if continued high exceptional costs and a slower-than-expected recovery at underperforming divisions kept leverage above 10x and further eroded liquidity. S&P said, "The outlook revision on idverde reflects our anticipation of slower-than-expected deleveraging and negative free operating cash flow (FOCF) over the coming two years, as well as its deteriorating liquidity position. idverde's constraints stem from cost inflation, tight labor markets, and delayed improvement in the underperforming U.K. business, despite solid sales growth in most of the group's geographies during first half of 2022. Although the group reported about 8% year-on-year revenue growth in the U.K. in the first half of 2022, largely driven by maintenance activity, volumes in the creation and housebuilder segments remained lower than anticipated. Consequently, EBITDA margins stayed weak at 6.1% in the U.K. and 6.7% at group level), and high one-off costs reached about EUR13 million, partly associated with the turnaround plan. We expect that economic headwinds will increase costs and strain the group's profitability and cash flow in 2022, with only gradual improvement in 2023 as exceptional costs reduce. Although the group plans to mitigate cost inflation with price increases, cost control, and productivity initiatives, we believe there could be delays in passing on higher costs to customers. Therefore, we forecast S&P Global Ratings-adjusted debt to EBITDA will be about 12x in 2022--from about 17x in 2021--and that leverage will remain elevated at 8.0x-9.0x in 2023. "We view the group's liquidity as less than adequate. The company reported negative FOCF in 2021 and in the first half of 2022. We expect this will spill into the second half of 2022 and into 2023, given our forecast of high cost inflation on personnel expenses that represent about 45% of the cost base. Inflation will also affect the group's expenses on materials (20% of cost base) and machinery and equipment (16%). Cash flow will continue to be constrained by exceptional cash outflows of about EUR26 million in 2022 and EUR16 million in 2023, in our base case. As of June 30, 2022, idverde had drawn EUR45 million under its EUR50 million revolving credit facility (RCF), with about half drawn during the first half of 2022 to finance exceptional costs and working capital needs related to strong sales momentum. Therefore, we estimate that the group's liquidity sources for the coming 12 months--including the cash balance of EUR33.1 million as of June 30, 2022, EUR5 million available under the RCF, and our forecast of negligible funds from operations--will not cover its capital expenditure (capex) and working capital requirements. We note the group also has about EUR16 million of additional liquidity sources available under overdraft facilities. However, we exclude these facilities from our expected sources of liquidity because we view them as uncommitted over the next 365 days. Further liquidity strain could stem from volume growth and associated working capital needs, even though we forecast solid organic sales growth on the back of still-strong demand for outsourced landscaping services. "In our view, the company benefits from enduring demand trends and relative resilience to economic downturns. Maintenance services are non-discretionary, as public green spaces have to be maintained, irrespective of economic conditions. Growing concerns around climate change, sustainability, and urbanization trends also support demand for more discretionary creation services. In fact, in all idverde's markets, except the U.K. creation and housebuilder segments, the group recorded strong revenue growth of about 13% year-on-year in the first half of 2022. Nevertheless, broader economic concerns for inflation and interest rates, as well as the group's budget constraints due to a slowing economy, could further roil operating performance, in our view." The group, with support from its main shareholder, continues to look for external growth opportunities. idverde aims at strengthening its market share locally and adding complementary services to its product range. It has acquired three new companies since the beginning of the year, in transactions to be funded through subordinated shareholders' contributions of EUR13.5 million. S&P has considered this financing as debt, given our understanding that it could be partially refinanced with debt in the future. The negative outlook reflects the increased likelihood of a downgrade if continued high exceptional costs and a slower-than-expected recovery at underperforming divisions kept leverage above 10x and further deteriorated liquidity. Downside scenario S&P could lower the ratings on idverde if, due to continued weak profitability, increased exceptional costs, delays in the U.K. business recovery, higher-than-expected working capital outflows or lower demand. This would materialize as: -- Leverage remaining above 10x for a prolonged period, causing us to consider the group's capital structure as unsustainable; and -- Further erosion of the liquidity position, potentially leading to a liquidity shortfall. Upside scenario S&P could revise its outlook to stable or raise its ratings if idverde demonstrates healthy EBITDA growth that yields improvements in leverage, cash flow, and liquidity. Environmental, Social, And Governance ESG credit indicators: E-2, S-2, G-4 S&P said, "Governance factors are a negative consideration in our credit rating analysis of idverde. Our assessment of the company's financial risk profile as highly leveraged reflects corporate decision-making that prioritizes the interests of the controlling owners, in line with our view of most rated entities owned by private-equity sponsors. Our assessment also reflects their generally finite holding periods and a focus on maximizing shareholder returns. We note that a cyber attack and operational underperformance, particularly in the U.K., negatively affected the group's financial results in 2021, with S&P Global Ratings-adjusted EBITDA margin falling to 3.7% from 6.9% in 2020. The governance risk associated with a lack of control on strategy execution also feeds into our negative assessment for governance factors." The issue rating on the EUR335 million senior secured term loan B is 'B-', in line with the long-term issuer credit rating. The recovery rating of '3' is unchanged and indicates S&P's expectations of meaningful recovery prospects (50%-70%; rounded estimate: 55%) in the event of a payment default. Recovery prospects for senior secured debt are constrained by the large amount of senior secured claims, the asset-light nature of the business, and the existence of prior-ranking debt claims such as the sizable factoring facility. The facilities' agreement includes only one senior secured net leverage covenant, which applies to the EUR50 million RCF. It is tested only if RCF drawings exceed 40%, in which case the senior secured net leverage ratio must not exceed 7.40x. Under the documentation, the issuer can raise incremental senior secured facilities, subject to a maximum senior secured net leverage ratio of 3.75x. It can also incur other indebtedness that is not senior secured, subject to a maximum total net leverage ratio of 4.75x. S&P said, "In our hypothetical default scenario, we assume that adverse economic conditions and increased cost inflation, resulting in weaker earnings and cash flows, would result in an interest payment default. "We view the group as a going concern, given its leading positions in the French and U.K. outsourced landscaping services market, recurring revenue base, and well diversified customer base." Simulated default assumptions -- Year of default: 2024 -- Jurisdiction: France -- Emergence EBITDA: EUR49 million -- Minimum capex at 2% of sales -- Cyclicality adjustment of 5%, which is standard for the business services sector -- Operational adjustment of 0% -- Multiple: 5.5x -- Gross enterprise value at emergence: EUR269 million -- Net enterprise value after administrative expenses (5%) and priority claims (factoring and local debt facilities): EUR221 million -- Senior secured debt claims: EUR392 million* -- Recovery expectation: 50%-70% (rounded estimate: 55%) *All debt amounts include six months of prepetition interest and 85% drawn on the RCF =========== R U S S I A =========== IPOTEKA BANK: S&P Affirms 'BB-/B' ICRs on Privatization Delay ------------------------------------------------------------- S&P Global Ratings, on Sept. 19, 2022, affirmed its 'BB-/B' long- and short-term issuer credit ratings on Uzbekistan-based Ipoteka Bank JSCM. The outlook is stable. S&P also affirmed the issue credit rating on the bank's senior unsecured debt at 'BB-'. Rationale OTP Bank PLC signed a non-binding memorandum regarding the potential acquisition of a majority stake in Ipoteka Bank in September 2021. The privatization process will take longer than initially envisaged. On Sept. 29, 2021, OTP Bank PLC (BBB/Negative/A-2) signed a nonbinding memorandum of agreement regarding the potential acquisition of a majority stake in Ipoteka Bank. Later, in April 2022, OTP Bank asked to postpone the deal for two-to-three months due to increased macroeconomic challenges related to the Russia-Ukraine conflict. S&P understands that the deal remains on hold and it is unlikely the privatization will be completed until the end of 2022, contrary to our prior expectations. The ratings are unaffected by the acquisition's delay. This is because it doesn't affect Ipoteka Bank's strategy and risk profile. S&P notes substantial moderation of loan book growth due to a deliberate reduction in directed lending. The portfolio increased by only 8% for the first seven months of 2022 (annualized) compared with 20% in 2021 and 23% in 2020. Development of commercial lending will support Ipoteka Bank's margin. Ipoteka Bank continues to focus on developing its market-oriented business with retail clients and small and midsize enterprises (SMEs). This should support the bank's margins and internal capital generation capacity. Ipoteka Bank earned Uzbekistan sum (UZS) 650 billion (about US$59.4 million) of net income for the first seven months of 2022 in accordance with Uzbekistan GAAP, versus UZS694 billion in 2021. S&P consequently expects the risk-adjusted capital ratio to be about 9.5% in the next 12-18 months, up from 9.2% as of year-end 2021. A slower growth pace should help to stabilize nonperforming loans (NPLs). NPLs in accordance with International Financial Reporting Standards climbed to 7.4% of total loans over 2021 from 6% a year ago, primarily due to growth in SME lending. S&P expects gradual improvement in the NPL ratio to 6% over the next 12-18 months, in line with the moderation of the pace of loan book growth. Nevertheless, S&P notes potential risks coming from the increase in riskier retail and SME lending. The stable outlook on Ipoteka Bank reflects S&P's view that the bank will maintain adequate capital and follow its existing strategy in the next 12 months. Downside scenario S&P said, "We could take a negative rating action on Ipoteka Bank if we took a similar action on Uzbekistan. We could also downgrade the bank if we see that management is not coping with new risks related to the shift of focus in its business model, and it resulted in a substantial increase in NPLs and heightened provisioning charges." Upside scenario A positive rating action on Ipoteka Bank is unlikely in the next 12 months. It would hinge on a combination of a positive rating action on the sovereign and simultaneous improvement in the bank's own credit quality. ESG credit indicators: E-2; S-2; G-4 =========================== U N I T E D K I N G D O M =========================== EUROMAX V: S&P Raises Rating on Class A2 Notes to 'BB-(sf)' ----------------------------------------------------------- S&P Global Ratings raised its credit rating to 'BB- (sf)' from 'B+ (sf)' on EUROMAX V ABS PLC's class A2 notes. At the same time, S&P affirmed its ratings on the class A3, and A4 notes. The rating actions follow its assessment of the increased credit enhancement for the class A2 notes and the application of its relevant criteria. The class A2 notes have partially amortized and about 83% of their initial size remains outstanding, resulting in increased credit enhancement. Assets rated in the 'CCC' category ('CCC+', 'CCC', and 'CCC-') have remained at the same level and defaulted assets ('CC', 'SD', and 'D') have decreased in notional terms since its previous review. Some of the underlying investment-grade assets in the portfolio have been upgraded, and so the portfolio's average credit quality has slightly improved as well. The concentration risk in the portfolio is relatively high and has increased further since our previous review. S&P believes that the class A2 notes are vulnerable to event risk, mainly due to: -- Almost 11% of the portfolio is rated in the 'CCC' category; -- 52% of the total assets in the portfolio are defaulted; -- All of the assets in the portfolio are exposed to one single industry (RMBS); and -- More than 35% of the assets in the portfolio are domiciled in Italy, which is more than double the allowable limit under S&P's sovereign risk criteria. S&P said, "With increased credit enhancement on the class A2 notes (about 41%), the cash flow analysis suggests a higher rating than that currently assigned to the class A2 notes. However, the rating actions address the increased concentration risk in the portfolio. We therefore raised to 'BB- (SF)' from 'B+ (sf)' our rating on the class A2 notes. "In our opinion, the repayment of the class A3 notes largely depends on the amount that will be recovered on currently defaulted assets. Therefore, in applying our "Criteria For Assigning 'CCC+', 'CCC', 'CCC-', And 'CC' Ratings," we have affirmed our 'CCC- (sf)' rating on the class A3 notes. "The class A4 notes have continued to defer their interest payment and have capitalized EUR0.26 million of interest since our previous review. As a result, we believe that a default of the class A4 notes in the full repayment of their initial principal and capitalized interest by their legal maturity has become a virtual certainty. Therefore, in applying our criteria, we affirmed our 'CC (sf)' rating on the class A4 notes." The transaction's counterparty, operational and legal risks are adequately mitigated in line with S&P's criteria. EUROMAX V ABS is a cash flow CDO of structured finance securities, mostly RMBS. The transaction closed in November 2006 and is managed by Collineo Asset Management GmbH. S&P's ratings on the class A2, and A3 notes address timely interest and ultimate principal, and our rating on the class A4 notes addresses ultimate payment of principal and interest. M&M: Crane Sale Raises GBP4.6MM Following Voluntary Liquidation --------------------------------------------------------------- Grant Prior at Construction Enquirer reports that a lot of 22 mobile cranes has raised GBP4.6 million at auction following the collapse of hirer M&M which went into voluntary liquidation last month. Euro Auctions staged the sale which attracted buyers from across the globe, Construction Enquirer relates. According to Construction Enquirer, David Betts from Euro Auctions said: "This was a 'sale within a sale' and it attracted a true international audience. "Normally Euro Auctions would have conducted a stand-alone 'off site' sale for an inventory such as this, but it was decided we would create more of a statement at our 85-acre Leeds auction site. "With all 22 cranes from 35 tons to 130 tons, in a line with boom-up, it was a very impressive sight. There was a great amount of interest in this sale, and prices were strong." PREFERRED RESIDENTIAL 06-1: Fitch Affirms B- Rating on E1c Notes ---------------------------------------------------------------- Fitch Ratings has upgraded Preferred Residential Securities 05-2 PLC's (PRS 05-2) class D1c notes and Preferred Residential Securities 06-1 PLC's (PRS 06-1) class D1a and D1c notes. All other notes have been affirmed with Stable Outlooks. The class D and E notes of both transactions, and the class F notes of PRS 06-1 have been removed from Under Criteria Observation (UCO). Debt Rating Prior ---- ------ ----- Preferred Residential Securities 06-1 PLC Class B1a XS0243655577 LT AAAsf Affirmed AAAsf Class B1c XS0243665022 LT AAAsf Affirmed AAAsf Class C1a XS0243658670 LT AAAsf Affirmed AAAsf Class C1c XS0243665964 LT AAAsf Affirmed AAAsf Class D1a XS0243659728 LT A+sf Upgrade Asf Class D1c XS0243666939 LT A+sf Upgrade Asf Class E1c XS0243669529 LT B-sf Affirmed B-sf Class FTc XS0243675336 LT BB+sf Affirmed BB+sf Preferred Residential Securities 05-2 PLC Class B1a XS0234207594 LT AAAsf Affirmed AAAsf Class B1c XS0234208485 LT AAAsf Affirmed AAAsf Class C1a XS0234209020 LT AAAsf Affirmed AAAsf Class C1c XS0234209459 LT AAAsf Affirmed AAAsf Class D1c XS0234212594 LT A+sf Upgrade Asf Class E1c XS0234213642 LT B-sf Affirmed B-sf TRANSACTION SUMMARY The transactions are securitisations of seasoned non-conforming residential mortgage loans originated by Preferred Mortgages Limited. The mortgage pools consist of owner-occupied (OO) and buy-to-let (BTL) loans. KEY RATING DRIVERS Removed from UCO: In the update of its UK RMBS Rating Criteria on 23 May 2022, Fitch updated its sustainable house prices for each of the 12 UK regions. The changes increased the multiple for all regions other than North East and Northern Ireland, updated house price indexation and updated gross disposable household income. Sustainable house prices are now higher in all regions except Northern Ireland. This has had a positive impact on recovery rates (RR) and, consequently, Fitch's expected loss in UK RMBS transactions. Fitch also reduced its foreclosure frequency (FF) assumptions for loans in arrears based on a review of historical data from its rated UK RMBS portfolio. The changes better align our expected-case assumptions with observed performance in the expected case and incorporate a margin of safety at the 'Bsf' level. The updated criteria contributed to today's rating actions and the removal of the ratings from UCO. Change in Arrears Reporting Methodology: The servicer has updated its arrears calculation methodology effective as of 1Q22. Rather than determining the number of months in arrears by dividing a borrower's arrears balance by the payment due, the servicer now refers to number of full monthly payments missed, which resulted in a reduction of the reported number of months in arrears for some borrowers. As at June 2022, total arrears reported for both transactions stood at 19.7% and 16.3% for PRS 05-2 and PRS 06-1, respectively. This represents a decline in total reported arrears from December 2021 of 6.2pp and 4.0pp, respectively. Performance Adjustment Factor (PAF): The combination of the UK RMBS Rating Criteria changes and the change in arrears reporting for the transactions, coupled with a stable constant default Rate, resulted in higher PAFs derived for each transaction. This led to volatility in the weighted average foreclosure frequency (WAFFs) derived for the OO and BTL sub- pools in both transactions. For this review the PAF for both transactions was capped at the previous review's levels so that the 'Bsf' WAFF more accurately reflected Fitch's default expectations for the pool at that rating level. For PRS 05-2 this resulted in applied PAFs of 100% and 200% for the OO and BTL sub-pools while for PRS 06-1 PAFs applied were 117% and 200% for the OO and BTL sub-pools, respectively. Uncertain Asset Performance: Fitch has constrained the ratings of PRS 06-1 class D notes two notches below their model-implied rating. This reflects Fitch's expectation that arrears are likely to increase in this pool as a result of high inflation and rising interest rates. Fitch tested a sensitivity to higher arrears and found such increase could result in lower model-implied ratings in future model updates. Credit Enhancement (CE) Accumulation: CE has increased in both transactions as they continue to amortise sequentially due to late-stage arrears trigger breaches. CE available for the senior notes has increased to 103% for PRS 05-2 and 95.5% for PRS 06-1, compared with 92.2% and 83.8% at the last review in October 2021. The build-up in CE across both transactions supports the upgrade of the class D notes even in light of potential performance deterioration resulting from high inflation and rising interest rates. RATING SENSITIVITIES Factors that could, individually or collectively, lead to negative rating action/downgrade: The transactions' performance may be affected by adverse changes in market conditions and economic environment. Weakening economic performance is strongly correlated to increasing levels of delinquencies and defaults and could reduce CE available to the notes. Fitch conducted sensitivity analyses by stressing each transaction's base case FF and recovery rate (RR) assumptions, and examining the rating implications on all classes of issued notes. A 15% increase in WAFF and a 15% decrease in WARR could lead to downgrades of up to two notches for the class D notes of both transactions. 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 and, potentially, upgrades. Fitch tested an additional rating sensitivity scenario by decreasing the WAFF by 15% and increasing the WARR by 15%. The results indicate upgrades of up to four notches for the class D notes and of up to 10 notches for the class E notes across both transactions. DATA ADEQUACY Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pools and the transactions. Fitch has not reviewed the results of any third- party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. Fitch did not undertake a review of the information provided about the underlying asset pools ahead of the 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 PRS 05-2 and PRS 06-1 have an ESG Relevance Score of '4' for customer welfare - fair messaging, privacy & data security due to a material concentration of interest-only loans, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. PRS05-2 and PRS06-1 have an ESG Relevance Score of '4' for human rights, community relations, access & affordability due to the pools containing OO loans advanced with limited affordability checks and self-certified income, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. 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. SPECIALIST EDUCATION: Goes Into Voluntary Liquidation ----------------------------------------------------- Adam Laver at LincolnshireLive reports that an independent specialist school which closed in February this year has gone into voluntary liquidation. Specialist Education Support Network (SESN) had run the George Johnson Education Centre (GJEC) in Lincoln until it closed its doors following an "inadequate" Ofsted report, LincolnshireLive discloses. It appointed a voluntary liquidator the same month to take control of the business, LincolnshireLive relates. Its address of 13 High Street, Lincoln, has now been changed to that of the liquidator -- 2 Lace Market Square, Nottingham. According to LincolnshireLive, former director of SESN and GJEC Richard Bell said the liquidation had been 'an extremely difficult and emotional process. "Whilst Specialist Education Support Network also provided outreach services and CPD training, its main revenue came through the referrals from schools and local authorities to our independent school," LincolnshireLive quotes Mr. Bell as saying. "When those referrals did not come through and/or were inconsistent it impacted on the overall financial stability of the business, which unfortunately amplified to a point the business eventually became insolvent. As any small businesses will identify the need for investment and/or sponsorship is beneficial in launching and developing a business. "Throughout the five years of running and managing SESN we had little to no investment or sponsorship. To ensure the young people received the provision and support during periods of few referrals and low numbers, as the sole director, I self-funded a great deal of the operational costs, which I will not reacquire." WASPS: Files Notice of Intention to Appoint Administrator --------------------------------------------------------- Bobby Bridge at CoventryLive reports that Wasps have filed a notice in the High Court stating its intention to appoint an administrator in a move that could lead to their relegation from the Gallagher Premiership. According to CoventryLive, Wasps Finance Plc failed to repay the GBP35 million that was due to be paid back to bondholders in May, as refinancing options were explored. The money was raised via the bond scheme to help the club relocate from London to Coventry in 2014, CoventryLive discloses. The most recent statement issued regarding the bond said an offer had been received and Wasps finance plc was in "advanced discussions" with a lender to refinance the bond, while attempts to re-list the bond on the London Stock Exchange remain ongoing, CoventryLive notes. WIGNALLS ESTATE: Goes Into Liquidation, Halts Trading ----------------------------------------------------- Jon Robinson at BusinessLive reports that a Lancashire estate agency has collapsed into liquidation owing more than GBP170,000. Wignalls Estate Agents' office in Leyland closed after David Acland and Lila Thomas of specialist business advisory firm FRP were appointed as joint liquidators, BusinessLive relates. The office had ceased trading ahead of the appointment of liquidators, BusinessLive discloses. BusinessLive understands that the liquidation process only relates to the company's operations in Leyland. Other franchises operate in the likes of Merseyside, London and Adlington in Lancashire and they are understood to be trading as normal. According to a document filed with Companies House, Wignalls Estate Agents Limited had an estimated total deficiency of GBP170,988 when it entered liquidation, BusinessLive notes. Its biggest creditor was Santander Bank which was owed more than GBP53,000, BusinessLive states. WORCESTER WARRIORS: Creditor Balks at Sport England Loan -------------------------------------------------------- Matt Hardy at City A.M. reports that Sport England have been dragged into the row over financially troubled Premiership rugby outfit Worcester Warriors with one creditor raising questions around a GBP15 million Covid-19 loan. In allegations set out in summarised correspondence to Sport England seen by City A.M., the creditor, who wishes to remain anonymous, alleges that the organisation -- which acted as a loan agent in a deal between Government Covid-19 funding and Premiership rugby clubs -- "created a large liability on the balance sheet of WRFC Trading Limited" due to the "acquisition of the freehold" of the stadium by another company, MQ Property Co. Furthermore, the correspondence alleges that "Sport England approved the separation of the physical stadium [Sixways]" and its pitches and player car park from MQ Property Co to another company, Sixways Stadium Limited. The allegations add that Sport England allowed this to happen "without confirming that the club, or its lawyers, had receipt of the monies", and that the organisation explicitly asked the club's stadium and associated income to be separated from the rugby club during a period of financial uncertainty, City A.M. relates. The apparent dispute between a creditor and Sport England is the latest twist in the saga surrounding Worcester Warriors, who began the season this month on the brink of going under or entering administration, City A.M. notes. YORKSHIRE LAVENDER: Owed GBP1MM to Creditors at Time of Collapse ---------------------------------------------------------------- Karen Darley at Gazette & Herald reports that a well-known Ryedale firm has gone into liquidation owing thousands of pounds to other local businesses. Yorkshire Lavender, based near Terrington, appointed a liquidator last month owing more than GBP1 million, Gazette & Herald recounts. However, the attraction, which includes a tea room and shop, is now trading under Lavender World, Gazette & Herald notes. A letter sent to creditors says that in July, Yorkshire Lavender Ltd sold its assets to Barnby Holdings Ltd., Gazette & Herald relates. Samuel Goodwill and Emma Waddington are named as directors of both companies. Local business owners who are among 60 trade and expense creditors collectively owed more than GBP1 million by Yorkshire Lavender said they felt angry and let down. According to Gazette & Herald, a spokesperson for liquidators William Duncan said: "Prior to the liquidation the company agreed a sale of the business and assets of the company to a connected company in a deal that meant all employees retained their jobs. The liquidator will scrutinise this transaction in the course of the liquidation." The spokesperson added: "We are unable to make any predictions on the likely return to ordinary creditors at the moment as investigations have just commenced." ********* 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 publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. * * * End of Transmission * * *