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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

          Friday, October 14, 2022, Vol. 23, No. 200

                           Headlines



A R M E N I A

ARMENIA: S&P Affirms B+/B Sovereign Credit Ratings, Outlook Stable


F R A N C E

CASINO GUICHARD: S&P Lowers ICR to 'CCC+', Outlook Developing


G E R M A N Y

TUI CRUISES: Fitch Alters Outlook on 'B-' LongTerm IDR to Stable


I R E L A N D

CONTEGO CLO X: S&P Assigns Prelim. B-(sf) Rating on Class F Notes


I T A L Y

FIBER BIDCO: S&P Assigns Prelim 'B' LongTerm ICR, Outlook Stable
INTESA SANPAOLO: Fitch Affirms 'BB' Rating on Subordinated Debt


K A Z A K H S T A N

TENGIZCHEVROIL: S&P Lowers ICR to 'BB+', Outlook Negative
TRANSTELECOM CO: S&P Affirms 'B' ICR & Alters Outlook to Neg.


S W I T Z E R L A N D

TRANSOCEAN LTD: S&P Lowers ICR to 'SD' on Distressed Exchanges


U N I T E D   K I N G D O M

BT GROUP: Fitch Affirms 'BB+' Rating on Subordinated Debt
CENTRE FOR THE MOVING: Charity Warned UK Gov't of Closure Risk
CINEWORLD GROUP: S&P Gives B Rating to $1.9-Bil. DIP Term Loan
CLEMENTS RETAIL: Financial Losses Prompt Administration
DIGNITY FINANCE: S&P Places 'B+' Rating on Cl. B Notes on Watch Neg

ENQUEST PLC: S&P Puts 'B-' ICR on Watch Positive on Refinancing
PETKIM PETROKIMYA: S&P Assigns Prelim. 'B+' LT Issuer Credit Rating
SIGNATURE LIVING: Three Hotels, Gym Owed Over GBP56 Million
SWAN HOUSING: S&P Lowers LT ICR to 'BB-', On Watch Developing
[*] UK: Administrations Across Midlands Up 64% in 3rd Qtr. 2022

[*] UK: Administrations Across Yorkshire Rises to 45 in 3Q 2022
[*] UK: Number of Administrations Up 50% in Third Quarter 2022


X X X X X X X X

[*] BOOK REVIEW: Hospitals, Health and People

                           - - - - -


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A R M E N I A
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ARMENIA: S&P Affirms B+/B Sovereign Credit Ratings, Outlook Stable
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S&P Global Ratings, on Oct. 7, 2022, affirmed its 'B+/B' long- and
short-term sovereign credit ratings on Armenia. The outlook is
stable.

Outlook

The stable outlook balances S&P's expectation of continued
relatively robust economic growth against risk of a more pronounced
downturn in the Russian economy or an acceleration in the conflict
with Azerbaijan.

Downside scenario

S&P could lower the ratings on Armenia over the next 12 months if a
sharp increase in geopolitical risks resulted in a significant
economic slowdown requiring larger fiscal support than it currently
anticipates. Negative rating pressure could also emerge if a less
favorable external environment jeopardized Armenia's access to
external financing."

Upside scenario

S&P could raise the ratings if the potential for geopolitical risks
to undermine Armenia's strong economic growth prospects were to
abate. An upgrade could also follow should Armenia's external
performance significantly improve, perhaps due to much higher
current account receipts or a slower accumulation of external debt
than we currently expect.

Rationale

Armenia's economy outperformed expectations in the first half of
2022. Second-round effects of financial stress in Russia did not
have as severe an impact on Armenia as we had expected. On the
contrary, an influx of mostly Russian citizens and capital
significantly spurred domestic demand, boosting economic growth.
That said, negative spillovers from a potentially more severe
Russian recession continue to present a risk, given the countries'
political, economic, and trade ties.

Military tensions between Armenia and Azerbaijan recently
increased, with intense fighting for several days in September.
While a renewed ceasefire has been agreed, the risk of further
escalations persists, with associated risks to Armenia's economy
and domestic political landscape. Positively, energy prices
remained contained in Armenia's highly gasified economy because of
long-term supply contracts from Russia on fixed prices below
current spot prices.

S&P expects 2022 fiscal outcomes will be better than previously
forecast because of Armenia's booming economy in the first half of
2022 and underspending on current and capital budgets. However,
over time, fiscal deficits will modestly widen again because of
higher public sector investments and social spending, including a
pension increase that was pulled forward to Sept. 1, 2022.
Armenia's current account deficit will remain at about 4% of GDP on
average, with funding supported by strong access to international
financial institutions (IFIs), including a potential successor
arrangement to the recently completed IMF program which is
currently being negotiated.

Institutional and economic profile: Despite an economic boom in
2022, medium-term risks persist, related to recessions in key
trading countries and external security

-- S&P expects real GDP growth will accelerate to 8.6% in 2022
because of strong domestic demand driven by the arrival of Russian
citizens and capital.

-- Medium-term economic growth will remain robust, anchored by
ongoing structural reforms.

-- Persistent external security risks along the border with
Azerbaijan could risk spillover into domestic politics and the
economy.

S&P said, "Given Armenia's reliance on Russia as its most important
trading partner, we expected the anticipated slowdown in Russia's
economy in 2022 to have significant spillover into Armenia's
economic growth. Russia accounts for approximately 28% of exports,
37% of imports, and 41% of remittances. However, Russia's recession
now appears to be shallower than anticipated, given high energy
prices and the limited visible impact of sanctions so far. An
influx of people--mostly Russians but also Ukrainians--has boosted
Armenia's economic growth through higher domestic demand so far in
2022. The service sector in particular has grown strongly,
supported by external and domestic demand for tourism, IT, and
financial services. Consequently, we have revised up our growth
forecast for 2022 to 8.6% from 1.3% at the time of our previous
review."

The authorities estimate that 1,700 companies from Russia, Belarus,
and Ukraine have registered in Armenia since the beginning of the
war in Ukraine, roughly half of them in the IT sector. In addition,
another 3,100 individual entrepreneurs settled in Armenia, while
the number of registered nonresident employees more than doubled to
over 12,000. Over the medium term, assuming they become permanent
residents, the influx of highly skilled workers could boost
Armenia's growth potential. In the near term, however, it further
fuels house price increases, which could lead to a reorientation of
resources to less productive sectors, such as construction.

S&P said, "Over our forecast horizon, we expect a mixture of
ongoing structural reforms and robust domestic demand, including
investment, will support strong economic growth. In our forecast,
real GDP growth decelerates from 2022 highs but remains robust at
4.3% on average over 2023–2025. The growth of the service sector,
especially IT services and tourism, should continue to support
economic activity. That said, several risks persist. A sharp
slowdown of growth or a deep recession in Russia and the EU, two of
Armenia's most important trading partners, could weigh on economic
growth. Moreover, an escalation in the conflict along the border
with Azerbaijan, or outright war, could also jeopardize Armenia's
growth prospects. Fighting most recently took place in
mid-September, close to a popular tourism destination and the site
of a potential large-scale gold mining project. Armenia remains in
talks with Azerbaijan, supported by the EU and Russia, though the
external security situation remains fragile.

"In addition, war with Azerbaijan could increase domestic political
uncertainty, not least because Prime Minister Nikol Pashinyan's
government faces occasional protests against ongoing peace talks
with Azerbaijan. We will monitor the impact this could have on the
government's ability to carry out its structural reform agenda or
other policy choices, including fiscal policy. Government policy is
anchored by a five-year plan that centers on ongoing public and
private investment, especially in infrastructure development, plans
to improve Armenia's human capital, reforms of the public
administration and the judicial sector, and efforts to reduce
corruption. Sustained progress under the plan is an important
factor underpinning our growth forecast."

Flexibility and performance profile: A stronger fiscal performance
and positive exchange rate effects have reduced the government's
debt burden

-- Strong nominal GDP growth, a narrower fiscal deficit in 2022,
and the strong appreciation of the national currency--the Armenian
dram-–have helped reduce the government's net debt-to-GDP ratio.

-- Unfavorable terms of trade and robust domestic demand will keep
the current account deficit, which will largely be funded by
foreign direct investment (FDI), at about 4% of GDP, while IFI
financing and a potential IMF program should underpin access to
external financing.

-- S&P expects the Armenian central bank's repeated interest rate
hikes in 2022 to help bring inflation back toward its target by
2025.

S&P said, "In the first half of 2022, the government's budget
remained in surplus, thanks to stronger revenue collection and
under-execution of current and capital spending. However, we
forecast a deficit of 2.4% of GDP for 2022 as a whole as spending
ramps up in the second half of the year. In part, this is also
driven by higher social spending with the government having pulled
forward to Sept. 1 a pension increase that was planned for 2023, at
a cost of approximately 0.1% of GDP for the current year. Over our
2023–2025 forecast horizon, we expect the general government
deficit will average just under 3% of GDP, somewhat higher than
under the government's medium-term expenditure framework, largely
due to our lower growth projections.

"We forecast the net government debt-to-GDP ratio will drop
significantly in 2022 for three main reasons. First, a
lower-than-budgeted fiscal deficit, given better revenue
performance. Second, the impact of a significant dram appreciation
against the U.S. dollar, approximately 17% year-to-date, given that
65% of debt is foreign-currency-denominated. Third, very strong
nominal GDP growth, which we estimate at about 17%, given strong
growth and elevated inflation. As a result, general government debt
could fall to approximately 43% of GDP in 2022. Going forward, we
forecast a modest increase in the debt ratio to 46% of GDP in 2025,
as the dram weakens and government deficits increase again
slightly."

The impact of higher global energy prices on Armenia is largely
contained. Armenia's economy primarily depends on natural gas as an
energy source (61%), followed by oil (12%). Natural gas is
primarily supplied by Russia (85%) based on long-term contracts at
prices well below current spot prices. That said, higher food
prices and overall higher inflation may also put more pressure on
the government to support the domestic economy.

Unfavorable terms of trade, primarily a result of higher import
prices for food and oil, and the drop in copper prices, a key
export good, will lead to a slight widening of Armenia's current
account deficit to approximately 4.7% of GDP in 2022. S&P said,
"These unfavorable terms of trade developments are somewhat
mitigated by the sharp appreciation of the dram, stronger tourism
receipts, and an increase of goods exports to Russia. Over the
medium term, we forecast Armenia's current account deficit will
remain around its five-year average. The current account deficit
could increase further if the dram's strength vis-à-vis the U.S.
dollar and euro were to become entrenched, but this is not our base
case. We expect most of the appreciation of the dram in 2022 to be
reversed in 2023 because we do not expect further significant
inflows of capital, while external demand could weaken. A very
strong increase in exports to Commonwealth of Independent States
(CIS) countries, including Russia, of almost 47% in the first half
of 2022 was noteworthy." The sustainability of this trend is
uncertain, given Armenia's commitment to comply with international
sanctions.

Remittances usually more than cover the current account deficit,
while FDI inflows are also a source of current account financing.
S&P said, "As such, Armenia has relatively limited commercial
external debt but uses concessional lending from IFIs (73% of
government external debt), for investment purposes. A three-year
IMF stand-by arrangement under which Armenia received $415 million
concluded in April and we expect Armenia could agree on a successor
arrangement in the coming months. We expect international reserves
to cover about 3.6 months of current account payments in 2022. A
new IMF program could provide an anchor for ongoing reform efforts
and lend support to Armenia's other efforts to access external debt
markets, though Armenia's next Eurobond maturity is not until 2025.
Armenia's gross external financing needs, which we forecast will
average about 118% of current account receipts and usable reserves
over 2022–2025 are somewhat elevated, but most of its debt is
concessional."

S&P expects FDI will increase this year as a result of Russian
companies relocating to Armenia. Remittances have reportedly held
up in the first half of 2022. However, a deeper recession in Russia
and weak growth in other countries that are home to a sizable
Armenian diaspora, such as the U.S., could reduce remittance flows
to Armenia.

Given external macroeconomic conditions, inflation will likely
overshoot the central bank's 4% target for a second consecutive
year with inflation reaching 10.3% in June 2022, the highest figure
in 10 years, although it had slowed to 9.9% in September 2022. The
central bank has raised the refinancing rate by 225 basis points in
four steps over the course of 2022. S&P expects inflation will only
gradually move toward the central bank's target over its forecast
horizon.

Armenia's banking sector is well capitalized, profitable, and
liquid. Its direct exposure to Russia and Ukraine is relatively
small, with only one midsize subsidiary of the sanctioned Russian
VTB Bank being active in Armenia. VTB Bank Armenia has been
downscaling operations since the beginning of the war in Ukraine
and has sold part of its retail portfolio. S&P said, "We expect
loan growth in dram and currency-adjusted terms will remain muted
over 2022. We then forecast a small acceleration in 2023, in part
because exchange rate effects are likely to reverse. Nonperforming
loans remain low at 2.9% as of June 2022 according to the central
bank's financial soundness indicators, down from a COVID-19 peak of
5% in February 2021, mainly due to write-offs of legacy problem
loans. We continue to monitor the growth in mortgage lending, which
has increased by 78% over the past two years alongside rising
housing prices. Macroprudential policies, including a draft law
restricting U.S.-dollar lending, rules for higher loan-to-value
ratios, and a reduction in the tax break for mortgage interest
payments, could help contain risks from rapid mortgage lending. We
expect to see continued inflow of nonresident deposits in 2022 as
Russian citizens leave the country and the Armenian diaspora seeks
alternative settlement routes. Deposit and loan dollarization for
residents remained relatively steady in 2022 at about 42% and 37%,
respectively, in August 2022."

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

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

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

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

  Ratings List

  RATINGS AFFIRMED

  ARMENIA

  Sovereign Credit Rating             B+/Stable/B

  Transfer & Convertibility Assessment     BB-




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F R A N C E
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CASINO GUICHARD: S&P Lowers ICR to 'CCC+', Outlook Developing
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S&P Global Ratings lowered its ratings on Casino Guichard –
Perrachon S.A. (Casino) to 'CCC+' from 'B'. S&P also lowered its
ratings on its senior secured debt to 'B-' from 'B+'; its senior
unsecured debt to 'CCC+' from 'B'; and its hybrids instruments to
'CC' from 'CCC'.

The developing outlook reflects that S&P could raise or lower its
issuer credit rating over the next 12 months, depending upon the
company's ability and willingness to address its debt maturities
due in early 2024. To address these, Casino would likely need to
execute asset disposals in a timely manner and fix the current cash
burn and excessive leverage of its French operations.

S&P said, "We have revised downward our base case for Casino's
French operations, given the recent sharp deterioration of economic
conditions as per S&P Global Ratings' view and evidence of tougher
operating conditions in the retail industry. In our March 2022
forecasts, we anticipated that S&P Global Ratings-adjusted EBITDA
for the company's French operations would recover to EUR1.3 billion
in 2022 from EUR1.1 billion in 2021. However, Casino's first-half
2022 performance was weaker than expected (see "Casino Guichard’s
First-Half Performance Is Weaker Than Expected But Disposals Could
Cushion The Impact," published July 29, 2022, on RatingsDirect)
given limited touristic flows in first-quarter 2022 and customers'
weakening purchasing power in the second quarter. Since then, we
have revised downward our macroeconomic expectations for France in
2022 and 2023 (see "Economic research, Economic Outlook Eurozone Q4
2022: Crunch Time," published Sept. 26, 2022), which has triggered
a revision of our operational and financial expectations for
Casino. As a result, we have revised downward our base case for
Casino and now expect the adjusted EBITDA for its French operations
to remain at about EUR1.1 billion, corresponding to S&P Global
Ratings-adjusted leverage of above 8.0x. While Casino's premium and
convenience formats are somewhat less exposed to inflationary
pressures than the industry average, we expect weakening consumer
sentiment will weigh materially on volumes over the next 18 months,
as consumers will likely move toward cheaper product categories. At
the same time, the group's material nonfood operations, including
C-Discount, will likely be more impacted by decreasing
discretionary spending trends.

"The FOCF generation of the company's French perimeter will remain
negative, while reduced covenant headroom adds liquidity pressure.
As of June 30, 2022, the group's headroom under its secured gross
debt-to-EBITDA covenant had reduced to 9.0%, a level that we do not
consider adequate. With such limited headroom, the group could
access only a small portion (about EUR210 million) of its EUR2.2
billion revolving credit facility (RCF). This gives the group very
limited room to maneuver, especially given its track record of
negative FOCF generation (under the French retail perimeter). That
said, we note the group usually benefits from a positive working
capital cycle in the second half of the year and that proceeds from
asset disposals should strengthen the buffer in the coming months.
These include EUR600 million from the sale of its stake in
renewable energy business GreenYellow, of which EUR350 million was
already cashed in in September through a receivable-factoring
transaction with Farallon Capital.

"Refinancing of 2024-2025 maturities is dependent on favorable
conditions, while current debt prices could incentivize Casino to
buy back debt materially below par, which we could see as a
distressed transaction. While the group has already reimbursed or
secured the reimbursement of the debt instruments coming due in
2022 and 2023, its French perimeter will face significant debt
maturities in the first quarter of 2024. These include about EUR731
million outstanding senior secured Quatrim bonds and about EUR529
million outstanding senior unsecured bonds. An additional EUR1.8
billion in debt is coming due in 2025. In the absence of material
improvements in the group's cash flow generation in France and
asset disposals beyond the EUR4.0 billion implemented to date, we
believe the refinancing of these maturities may prove difficult and
costly. As such, we believe Casino's ability to meet its future
debt maturities is dependent upon favorable business, financial and
economic conditions, as well as its ability to dispose assets in
the current context. This, combined with the recent sharp
deterioration of the prices of the company's senior unsecured
bonds, could pave the way for material debt buybacks. We would
likely consider a material debt buyback at significantly below-par
prices as a distressed debt exchange and tantamount to default
under our criteria."

Casino still has valuable assets to dispose of to lower its debt
burden in France, but the economic environment is not supportive.
While Casino has completed EUR4.0 billion of disposals under its
EUR4.5 billion disposal plan started in 2018, we believe the group
will rapidly need to execute additional asset sales to strengthen
its liquidity and deleverage its French operations to a more
sustainable level. The group still has some valuable assets to
sell. These include the publicly listed shares in its Latin
American subsidiaries, worth about EUR2.1 billion, the publicly
listed shares in CNova, worth about EUR1.1 billion, and its
remaining real estate assets, worth about EUR1.2 billion. However,
the uncertain geopolitical context and volatile valuations are not
conducive to the execution of the additional disposals. Moreover,
we note that the EUR4.0 billion worth disposals executed so far did
not translate in any deleveraging at the French restricted group.
Conversely, French leverage has been increasing, as proceeds from
disposals were absorbed by ongoing restructuring, other spending,
and negative cash flow generation.

Casino's French operations have suffered due to COVID-19, and a
lack of financial flexibility leaves little room to invest in price
competitiveness. Casino's reported profitability in France is
somewhat stronger than that of local peers, with an EBITDA margin
consistently above 6.5% on grocery operations. S&P said, "We also
note its capital expenditure (capex) is within the industry norms,
at 2.5%-2.7% of sales for France (or above 3% on a consolidated
basis). However, due to elevated interest payments and one-offs,
FOCF generation has been deeply negative in the past years,
translating into continuing high leverage. Cash conversion is a key
consideration of our business risk profile assessment. Moreover, in
the past three years, the EBITDA at Casino's French operations has
decreased consistently, while the group has been losing market
shares to competitors. This combination of market share losses and
continuing negative free cash flow generation, in spite of
relatively robust margins and good format diversification, led us
to revise our assessment of the group's business risk profile to
fair from satisfactory. In our view, this contrast between the
group's apparently solid business model and its poor track record
in terms of cash flow generation could be related to Casino's
operating strategy being somewhat influenced by the group's needs
to manage its financial position, rather than investing in business
competitiveness."

The good performance of Casino's Latin American businesses helps to
strengthen consolidated results. The recently listed cash and carry
business Assai (listed under Sendas Distribuidora) has reported a
very consistent growth trajectory over the past five years, fueled
by strong like-for-like growth and swift store expansion,
translating into a rapid EBITDA buildup. This, combined with a
favorable foreign exchange context in 2022 and strong performance
of Colombian subsidiary Exito, should support a robust financial
year for the Latin American businesses, which will partly mitigate
that of the main French retail operations. However, given the
material leakages to minorities (Casino holds 41.2% of Assai and
Grupo Pao de Açucar [GPA]), dividends are very modest and don't
contribute to the debt servicing of its French operations, which
account for over 70% of the group's total debt. S&P also believes
it is likely that Casino will resort to sell at least partially its
participation in Latin America in view of its 2024-2025 debt
maturities.

S&P said, "We believe Rallye will face difficulties in reimbursing
its debt when it comes due from 2025. Rallye is the parent company
of Casino, with 51.7% of its shares, and Mr. Naouri is the main
indirect shareholder, Chairman and CEO of both Rallye and Casino.
On Oct. 21, 2021, the Paris Commercial Court agreed to a two-year
deferral of Rallye's debt amortization schedule established under
the original safeguard plan approved in March 2020. The initial
safeguard plan of Casino's holding companies mentions that Rallye's
plan to redeem its debt relies on the distribution capacity of
Casino. While Rallye's debt repayment schedule has been amended to
adapt to market conditions characterized by high volatility in the
past two years, we believe Rallye will face difficulties in
managing either an orderly refinancing of these instruments or a
redemption (EUR1.9 billion of debt and accrued debt are due in
February 2025 at Rallye only). Given that Rallye owns only 51.7% of
Casino, any future dividend payments from Casino would see
significant leakage to minority shareholders. Moreover, Casino's
debt documentation limits the group's ability to pay any dividend
as long as gross leverage at the French perimeter exceeds 3.5x. We
also note that Casino's current equity valuation is much smaller
than the value of Rallye's outstanding debt.

"The developing outlook reflects our view that we could raise or
lower our issuer credit rating over the next 12 months, depending
upon the company's ability and willingness to address its debt
maturities due in early 2024. To address these maturities, Casino
would likely need to execute additional asset disposals in a timely
manner, and fix the current cash burn and excessive leverage of its
French operations."

S&P could lower its ratings on Casino if:

-- S&P saw the risk of a liquidity shortfall in France, if the
    group's FOCF generation remained deeply negative and the
    group was unable to execute additional asset disposals on
    a timely manner; or

-- S&P believed the group will be unable to redeem or refinance
    at par its 2024 debt maturities; or

-- S&P saw heightened risk of a specific default event under its
    criteria, such as a material debt purchase below par value
    that S&P could qualify as a distressed exchange.

S&P could raise the rating if:

-- The group successfully executes additional disposals, such
    that it secures the repayment or refinancing at par of its
    outstanding 2024-2025 debt maturities; and

-- The group's FOCF generation in France turns sustainably
    positive and its leverages decreases to sustainable levels;
    and

-- S&P believed that Rallye could not take any action
    potentially harmful for Casino's creditworthiness.

ESG credit indicators: E-2, S-2, G-5




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G E R M A N Y
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TUI CRUISES: Fitch Alters Outlook on 'B-' LongTerm IDR to Stable
----------------------------------------------------------------
Fitch Ratings has revised TUI Cruises GmbH's Outlook to Stable from
Positive, while affirming its Long-Term Issuer Default Rating (IDR)
at 'B-'. Fitch has also affirmed TUI Cruises' senior unsecured
notes at 'CCC' with a Recovery Rating of 'RR6'.

The change in Outlook reflects its expectations of a temporary
demand reduction due to a weaker economic outlook, following a
solid post-pandemic trading recovery in 2022. Fitch also forecasts
increasing inflationary pressure from rising fuel costs that will
only be partially passed onto consumers. As a result, TUI Cruises'
de-leveraging will take longer than expected to fall below its
negative rating sensitivity of total debt/EBITDA of 7.5x.

The 'B-' IDR takes into account the company's high leverage since
its Hapag Lloyd Cruises (HCL) acquisition in 2020, but solid
business fundamentals should contribute to deleveraging capacity
with a successful ramp-up of operating activity. TUI Cruises'
ability to maintain occupancy levels at or above Fitch's forecasts
remains important for its future rating trajectory.

KEY RATING DRIVERS

Economic Slowdown to Hit Demand: TUI Cruises relies on Germany as
its core market. Fitch expects a 0.5% contraction in German GDP in
2023, and only a modest 20bp growth in consumer spending, mainly
driven by inflation. This, together with forecast inflation of
10.7% in 2022 and 4.1% in 2023, is likely to squeeze real wages and
discretionary consumer spending. As a result, Fitch has assumed
occupancies to average 75% for Mein Schiff (MS) and 65% for HCL. MS
occupancy in 3Q22 was close to 100% pre-pandemic. The temporary
decline may be followed by recovery to historical levels in
2024-2025.

Deleveraging to Slow: Fitch expects weaker consumer spending to
slow TUI Cruises' deleveraging, with total adjusted debt/operating
EBITDAR reaching 7.5x, the maximum level that is consistent with
the 'B-' IDR, no earlier than 2024, versus 2023 under its previous
expectations. Occupancies trending below Fitch's assumptions could
however affect the company, leading to material deterioration of
its credit profile.

Solid Revenue Recovery in 2022: TUI Cruises demonstrated good
progress of recovery post-pandemic, with ramp-up of occupancies
already ahead of Fitch's previous forecasts for 2022. Occupancies
reached around 90% of pre-pandemic levels in 3Q22 and as a result,
Fitch expects 2022 revenue excluding HCL to reach 73% of their
pre-pandemic levels. Healthy occupancy recovery is supported by
strong comparative attractiveness of cruises for customers at a
time when hotel room rates are at record levels and air travel is
more expensive.

Mitigated Energy Inflation Pressure: Fitch expects energy cost
inflation to shave around 300bp off gross margin in 2023. This will
mostly be offset by continued ramp-up of operations on a
year-on-year basis, albeit slower than Fitch initially forecasts.
Fitch therefore does not see energy cost inflation as a driver of
EBITDA margin contraction in 2023. TUI Cruises' fleet also provides
some mitigation to fuel price inflation, as it is among the
youngest in the industry with an average age of less than 10 years.
This results in lower fuel consumption than peers' and provides
additional benefits such as reducing the need for maintenance
capex.

Strong Business Profile: The rating reflects TUI Cruises' strong
market position with around a 35% market share (40% when including
its faster operational ramp-up than peers'). Its concentrated
customer base enables the company to better adapt its product
offering to customer preferences, resulting in a high level of
repeat bookings at 60%-70% of total customers. This allows TUI
Cruises to maintain its current market position while growing the
business through planned addition of new ships from 2024 onwards.
TUI Cruises' premium product offering enabled it to generate
industry- leading EBITDA margin of close to 40% in 2019. However,
due to current higher inflation, Fitch conservatively assumes
EBITDA margins to improve beyond 30% no earlier than 2024.

Well-Managed Covid-19 Impact: TUI Cruises, in line with the broader
cruise shipping industry, had suffered from pandemic-driven
restrictions during 2020 and for part of 2021. Cruise operations
were halted in 2Q20, resulting in minimum crew levels and
maintenance costs. TUI Cruises was able to reduce operating costs
by 60% through minimised labour costs, staff furloughs and layoffs.
It was the first mass-market cruise brand to return to service in
July 2020 after receiving approvals from the German and Greek port
authorities under the EU Healthy GateWays policy.

Volatile Free Cash Flow: Fitch said, "We expect TUI Cruises to
return to mildly positive free cash flow (FCF) generation (low
single-digit percentage of sales) in 2022, but increased interest
costs and weaker profitability are likely to lead to neutral FCF in
2023. Fleet expansion in 2024 is likely to send FCF into negative
territory. We also acknowledge limited flexibility in maintenance
capex. Therefore, we do not expect debt reduction to be a major
driver of deleveraging for TUI Cruises until at least 2025."

Standalone Rating: TUI Cruises is rated on a standalone basis
despite its 50% ownership each by TUI AG and Royal Caribbean. Both
the shareholders reflect TUI Cruises as a joint venture in their
financial accounts with no relevant contingent liabilities or cross
guarantees between the owners and TUI Cruises. TUI Cruises manages
its funding and liquidity independently. Operational related-party
transactions with the owners, primarily in marketing and technical
operations, are conducted on an arms-length basis.

DERIVATION SUMMARY

All major cruise operators such as Royal Caribbean, Carnival or NCL
Corporation (Norwegian Cruises) have faced severe operating
pressures and liquidity tensions during the pandemic, which drove
multi-notch downgrades across Fitch-rated portfolio.

TUI Cruises exhibits a weaker market position than industry
leaders, whose fleet capacity and EBITDAR are significantly higher.
However, TUI Cruises benefits from recognised brand awareness and
diversification into the luxury segment, where competition is less
intense.

During 2022, TUI Cruises has successfully managed to return to
close to pre-pandemic occupancy levels, although this will now be
affected by economic slowdown in eurozone due to its significant
exposure to the German market.

KEY ASSUMPTIONS

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

-- Low single-digit ticket price growth in 2023

-- Occupancies of 75% in 2023 for MS and 65% for HLC,
    reflecting weaker consumer confidence, recovering to
    historical averages by 2025

-- Inflation of fuel costs leading to material & supply
    costs at 28% of sales for MS and at 32% for HLC

-- Cost of floating-rate debt to increase 1% in 2022, 2%
    in 2023 and 1.75% in 2024, all versus 2021, in line
    with Fitch's assumption on eurozone base rates

-- Restricted cash of EUR45 million

-- Capex at 14%-15% of revenue in 2022-2023, followed by
    major one-off cash outlay for fleet expansion of
    EUR1.4 billion in 2024

KEY RECOVERY RATING ASSUMPTIONS

The recovery analysis assumes that TUI Cruises would be reorganised
as a going-concern (GC) in bankruptcy rather than liquidated. Ships
can be sold for scrap but this typically does not occur until the
tail end of its useful life (30-40 years) and at a much greater
discount than mid-life ships. This is due to the inherent cash flow
generating ability of the ships, even older ones, which can be
moved into cheaper/less favorable locations as they age.

Fitch has assumed a 10% administrative claim.

Tui Cruises' GC EBITDA of EUR529 million is based on Fitch
forecasts for 2023 EBITDA, which is about 10% lower than 2019
EBITDA (before HPL acquisition).

The GC EBITDA estimate reflects Fitch's view of a stressed but
sustainable, post-reorganisation EBITDA level upon which Fitch
bases the enterprise valuation (EV).

An EV multiple of 6.0x EBITDA is applied to the GC EBITDA to
calculate a post-reorganisation EV. This reflects market M&A
multiples for cruise operators of 9x-20x over the last 20 years
(though these assets typically do not change hands frequently)

TUI Cruises' EUR359 million revolving credit facility (RCF), term
loan B and KfW loan are secured and rank ahead of its EUR535
million senior unsecured notes in the waterfall generated recovery
computation. The RCF is assumed to be fully drawn upon default.

The allocation of value in the liability waterfall results in 0%
recovery for the senior unsecured notes corresponding to 'RR6'.

RATING SENSITIVITIES

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

− Visibility on sustained demand recovery, with occupancy
ramp-up  
and cost control leading to an EBITDA margin above 30%

− Successful resumption of operations leading to FCF generation

sustaining its liquidity buffer

− Total debt/EBITDA sustainably below 6.5x

− Improvement in recovery assumptions due to EBITDA growth or
reduction in prior-ranking debt could lead to an upgrade of the
senior unsecured bond rating

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

- Pricing power and occupancy weakness leading to high single-
digit revenue decline and EBITDA margin below 25%

- Additional external liquidity requirements due to weaker cash
flow generation leading to insufficient coverage of short-term
maturities

- EBITDA/interest below 2.0x

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: TUI Cruises' liquidity is adequate. Total cash
and equivalents at end-2021 was EUR281 million (excluding
Fitch-restricted cash of EUR40 million) alongside EUR359 million of
undrawn and available credit lines.

Available liquidity, including Fitch-expected positive FCF of
around EUR16 million in 2022 - after its EUR195 million capex for
2022 but excluding EUR126 million of planned drawdowns on
pre-arranged loans for vessel financing - is sufficient to cover
short-term debt of EUR438 million (excluding leases). Liquidity is
supported by Fitch's assumption that TUI Cruises will be able to
roll over or refinance its existing secured debt, which remains
critical given its annual EUR500 million debt maturities.

Liquidity Pressure in 2023-2024: Fitch forecasts pressure on
liquidity in 2023-2024 from potentially lower occupancies and their
related effect on operating cash flows, in particular ahead of its
planned EUR1.4 billion capex in 2024. Recovery of operations and
profitability to pre-pandemic levels remains crucial to ensure
sufficient FCF for deleveraging.

ISSUER PROFILE

TUI Cruises is a mid-sized cruise ship business with two brands,
Mein Schiff and HLC, operating in the premium and luxury segments
of the market, respectively. Its customer base is primarily in
Germany.

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
   ----                    ------        --------   -----
TUI Cruises GmbH     LT IDR  B-  Affirmed            B-

   senior unsecured   LT     CCC Affirmed  RR6       CCC




=============
I R E L A N D
=============

CONTEGO CLO X: S&P Assigns Prelim. B-(sf) Rating on Class F Notes
-----------------------------------------------------------------
S&P Global Ratings assigned its preliminary credit ratings to
Contego CLO X DAC's class A, B-1, B-2, C, D, E, and F notes. The
issuer also issued unrated subordinated notes.

The class F notes is a delayed draw tranche, which has a maximum
notional amount of EUR15 million and a spread of three/six-month
Euro Interbank Offered Rate (EURIBOR) plus 8.50%. The class F notes
can only be issued once and only during the reinvestment period
with an issuance amount totaling EUR15.00 million. The issuer will
use the full proceeds received from the sale of the class F notes
to redeem the subordinated notes. Upon issuance, the class F notes'
spread could be subject to a variation and, if higher, is subject
to rating agency confirmation.

This is a European cash flow CLO transaction, securitizing a pool
of primarily syndicated senior secured loans or bonds. The
portfolio's reinvestment period ends approximately four and half
years after closing, and the portfolio's maximum average maturity
date is eight and half years after closing. Under the transaction
documents, the rated notes pay quarterly interest unless there is a
frequency switch event. Following this, the notes will switch to
semiannual payment.

S&P said, "We consider that the portfolio on the effective date
will be well-diversified, primarily comprising broadly syndicated
speculative-grade senior secured term loans and senior secured
bonds. Therefore, we have conducted our credit and cash flow
analysis by applying our criteria for corporate cash flow
collateralized debt obligations."

  Portfolio Benchmarks
                                                         CURRENT
  S&P Global Ratings weighted-average rating factor     2,892.25
  
  Default rate dispersion                                 369.01

  Weighted-average life (years)                            5.001

  Obligor diversity measure                               128.10

  Industry diversity measure                               18.19

  Regional diversity measure                                1.32

  Transaction Key Metrics
                                                         CURRENT
  Total par amount (mil. EUR)                                300

  Defaulted assets (mil. EUR)                                  0

  Number of performing obligors                              142

  Portfolio weighted-average rating
   derived from S&P's CDO evaluator                            B

  'CCC' category rated assets (%)                           0.00

  Covenanted 'AAA' weighted-average recovery (%)           34.32

  Weighted-average spread net of floors (%)                 3.95

S&P said, "In our cash flow analysis, we modeled the EUR300 million
target par amount, the covenanted weighted-average spread of 3.85%,
the covenanted weighted-average coupon of 4.60%, and the covenanted
weighted-average recovery rates for all rated notes. We applied
various cash flow stress scenarios, using four different default
patterns, in conjunction with different interest rate stress
scenarios for each liability rating category.

"Following the application of our structured finance sovereign risk
criteria, we consider the transaction's exposure to country risk to
be limited at the assigned preliminary ratings, as the exposure to
individual sovereigns does not exceed the diversification
thresholds outlined in our criteria.

"At closing, we expect that the transaction's documented
counterparty replacement and remedy mechanisms will adequately
mitigate its exposure to counterparty risk under our current
counterparty criteria.

"We expect the transaction's legal structure to be bankruptcy
remote, in line with our legal criteria.

"Following our analysis of the credit, cash flow, counterparty,
operational, and legal risks, we believe that our preliminary
ratings are commensurate with the available credit enhancement for
the class A, B-1, B-2, C, D, E, and F notes. Our credit and cash
flow analysis indicates that the available credit enhancement for
the class B-1, B-2, C, and D notes is commensurate with higher
ratings than those we have assigned. However, as the CLO will have
a reinvestment period, during which the transaction's credit risk
profile could deteriorate, we have capped our assigned ratings on
these notes.

"The class F notes' current break-even default rate (BDR) cushion
is negative at the 'B-' rating level. Based on the portfolio's
actual characteristics and additional overlaying factors, including
our long-term corporate default rates and recent economic outlook,
we believe this class is able to sustain a steady-state scenario,
in accordance with our criteria." S&P's analysis reflects several
factors, including:

-- The class F notes' available credit enhancement is in the same
range as that of other CLOs S&P has rated and that has recently
been issued in Europe.

-- S&P's BDR at the 'B-' rating level is 21.12% versus a portfolio
default rate of 15.50% if it was to consider a long-term
sustainable default rate of 3.1% for a portfolio with a
weighted-average life of 5.00 years.

-- Whether the tranche is vulnerable to non-payment in the near
future.

-- If there is a one-in-two chance for this note to default.

-- If S&P envisions this tranche to default in the next 12-18
months.

-- Following this analysis, S&P considers that the available
credit enhancement for the class F notes is commensurate with a
preliminary 'B- (sf)' rating.

S&P said, "In addition to our standard analysis, to provide an
indication of how rising pressures among speculative-grade
corporates could affect our ratings on European CLO transactions,
we have also included the sensitivity of the ratings on the class A
to E notes to five of the 10 hypothetical scenarios we looked at in
our publication, "How Credit Distress Due To COVID-19 Could Affect
European CLO Ratings," published on April 2, 2020.

"As our ratings analysis makes additional considerations before
assigning ratings in the 'CCC' category, and we would assign a 'B-'
rating if the criteria for assigning a 'CCC' category rating are
not met, we have not included the above scenario analysis results
for the class F notes."

Environmental, social, and governance (ESG) factors

S&P said, "We regard the exposure to ESG credit factors in the
transaction as being broadly in line with our benchmark for the
sector. Primarily due to the diversity of the assets within CLOs,
the exposure to environmental credit factors is viewed as below
average, social credit factors are below average, and governance
credit factors are average. For this transaction, the documents
prohibit/limit the manager from investing in activities related to
extraction of thermal coil and fossil fuels, oil sands and
pipelines, restricted weapons, endangered species, pornography,
adult entertainment or prostitution, tobacco, payday lending,
opioids, food commodity derivatives, palm oil and palm fruit
products, any unlicensed and unregistered financing, hazardous
chemicals, ozone-depleting substances, and casinos or gambling.
Since the exclusion of assets related to these activities does not
result in material differences between the transaction and our ESG
benchmark for the sector, no specific adjustments have been made in
our rating analysis to account for any ESG-related risks or
opportunities."

Environmental, social, and governance (ESG) corporate credit
indicators

S&P said, "The influence of ESG factors in our credit rating
analysis of European CLOs primarily depends on the influence of ESG
factors in our analysis of the underlying corporate obligors. To
provide additional disclosure and transparency of the influence of
ESG factors for the CLO asset portfolio in aggregate, we've
calculated the weighted-average and distributions of our ESG credit
indicators for the underlying obligors (see "The Influence Of
Corporate ESG Factors In Our Credit Rating Analysis Of European
CLOs," published on April 20, 2022). We regard this transaction's
exposure as being broadly in line with our benchmark for the sector
(see "ESG Credit Indicator Report Card: Global CLOs," published on
July 12, 2022), with the environmental and social credit indicators
concentrated primarily in category 2 (neutral) and the governance
credit indicators concentrated in category 3 (moderately
negative)."

  Corporate ESG Credit Indicators

                               ENVIRONMENTAL   SOCIAL   GOVERNANCE

  Weighted-average
  credit indicator*                  2.05       2.07      2.95

  E-1/S-1/G-1 distribution (%)       1.33       0.67      0.00

  E-2/S-2/G-2 distribution (%)      73.34      75.15     10.98

  E-3/S-3/G-3 distribution (%)       5.47       2.67     64.17

  E-4/S-4/G-4 distribution (%)       0.00       1.67      2.67

  E-5/S-5/G-5 distribution (%)       0.00       0.00      2.34

  Unmatched obligor (%)             13.61      13.61     13.61

  Unidentified asset (%)             6.24       6.24      6.24

  *Only includes matched obligor

  Ratings List

  CLASS    PRELIM.    PRELIM.     SUB (%)    INTEREST RATE*
            RATING     AMOUNT   
                     (MIL. EUR)

  A        AAA (sf)    175.50     41.50    Three/six-month EURIBOR

                                              plus 2.00%

  B-1      AA (sf)      20.80     31.23    Three/six-month EURIBOR

                                              plus 3.40%

  B-2      AA (sf)      10.00     31.23    6.50%
   
  C        A (sf)       18.00     25.23    Three/six-month EURIBOR

                                              plus 4.50%

  D        BBB- (sf)    19.50     18.73    Three/six-month EURIBOR

                                              plus 5.83%

  E        BB- (sf)     15.00     13.73    Three/six-month EURIBOR

                                              plus 7.92%

  F§       B- (sf)      15.00      8.73    Three/six-month EURIBOR

                                              plus 8.50%

  Sub      NR           32.00       N/A    N/A

* The payment frequency switches to semiannual and the index
switches
to six-month EURIBOR when a frequency switch event occurs.
§ The class F notes is a delayed drawdown tranche, which is not
issued at closing.
EURIBOR -- Euro Interbank Offered Rate.
NR -- Not rated.
N/A -- Not applicable.




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

FIBER BIDCO: S&P Assigns Prelim 'B' LongTerm ICR, Outlook Stable
----------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'B' long-term issuer
credit rating to Fiber Bidco SpA (Fedrigoni). S&P also assigned a
preliminary 'B' issue rating and '3' recovery rating to the
proposed EUR875 million senior secured notes due 2027.

The stable outlook indicates S&P's expectation of S&P Global
Ratings-adjusted debt to EBITDA of about 6.5x-7.0x and negative
adjusted free operating cash flow (FOCF) of about EUR40 million in
2022. It also reflects its expectation of improved cash generation
from 2023, as working capital movements normalize.

Fedrigoni is an Italy-based premium and specialty paper and label
manufacturer. The group plans to raise EUR875 million senior
secured notes due 2027, a EUR150 million senior secured term loan
A, as well as a EUR150 million revolving credit facility (RCF),
which will be undrawn at closing.

The proceeds from the debt issuance (EUR1,025 million), the EUR584
million equity provided by BC Partners, and a EUR308 million vendor
loan by Bain and minority shareholders will fund the leveraged
buyout by Bain Capital and BC Partners, the repayment of existing
debt (EUR432 million), transaction fees (EUR130 million), and the
acquisition of Unifol (EUR21 million). Leases and other debt
totaling EUR106 million will be rolled over.


The preliminary rating on Fedrigoni primarily reflects the group's
leading niche market positions, strong reputation, and
long-standing relationships with its diversified customer base.

The business risk profile assessment reflects the group's strong
niche positions in self-adhesive labels (58% of sales in 2021) and
luxury packaging and creative solutions (42%). The latter comprises
specialty graphic paper, luxury packaging, as well as drawing and
art paper. In 2021, the group generated sales of about EUR1.6
billion and S&P Global Ratings-adjusted EBITDA of EUR181 million.
Fedrigoni's business risk profile is supported by its strong
reputation and long-standing relationships with leading luxury
brands. Its self-adhesive products are used in a wide range of
sectors, such as food, beverages (including wine and spirits),
home, personal care, retail, advertising, logistics, and
pharmaceuticals. Its specialty papers are mainly used for premium
printing and luxury packaging. In our opinion, demand in some of
the company's end markets is cyclical, particularly in some premium
segments. S&P views customer diversification as adequate. Fedrigoni
has a granular customer base with no customer contributing more
than 5% of annual sales.

S&P's business risk assessment is constrained by Fedrigoni's
exposure to the competitive and fragmented paper industry and its
modest (albeit improving) scale and profitability. It also reflects
its strong reliance on Italy, where 10 of its paper mills are
located and where 25% of its sales are generated. The remaining
sales relate to the rest of Europe (47%) and the rest of the world
(28%). Fedrigoni has some (albeit limited) degree of vertical
integration, mainly because it has its own distribution network. It
is exposed to changes in energy and raw material prices, mainly
pulp, coatings, and chemicals. The company hedged the prices for
all its gas volumes for 2022 and for 70% of its gas volumes for
2023. Natural gas accounted for about 5% of total costs in 2021.

S&P said, "We view Fedrigoni's exposure to high energy prices and
potential restrictions in natural gas supplies in Italy as
moderate. We understand that a 20% reduction in gas supplies would
lead to a small (less than 5%) reduction in EBITDA. Contingency
measures include stock build-up, production outsourcing, and the
use of alternative energy sources such as diesel fuel. The group
has a strong track record of passing cost increases on to
customers, particularly in less commoditized product segments (that
is, self-adhesives and luxury packaging)." In the past 18 months,
Fedrigoni completed eight price increases. The group is decreasing
its exposure to the more commoditized products (9% of
last-12-months revenue), where changes in raw material prices are
more difficult to pass on.

S&P said, "We assess Fedrigoni's financial risk profile as highly
leveraged to reflect its credit metrics and financial-sponsor
ownership.In 2022, we expect FOCF to be negative at about EUR40
million (excluding the benefit of additional EUR90 million drawings
under factoring facilities) due to sizable working capital-related
outflows (on the back of rising input costs). We forecast FOCF to
improve to about EUR50 million–EUR60 million in 2023 as working
capital needs normalize. We also anticipate that leverage will
remain between 6.5x-7.0x in the near term. We view the financial
policy as aggressive and believe that credit metrics could
deteriorate if the company pursued large debt-funded acquisitions
or dividend payouts. Fedrigoni has been owned by Bain Capital since
2018. We understand that through this transaction Bain Capital will
fully recoup its original investment and reinvest some of the sale
proceeds. At transaction close, Bain Capital and BC Partners will
share control of the group with a 45.6% stake each; management will
retain a 8.8% participation."

The final ratings will depend on our receipt and satisfactory
review of all final transaction documentation. Accordingly, the
preliminary ratings should not be construed as evidence of final
ratings. If S&P Global Ratings does not receive final documentation
within a reasonable time frame, or if final documentation departs
from materials reviewed, S&P reserves the right to withdraw or
revise its ratings. Potential changes include, but are not limited
to, use of loan proceeds, maturity, size and conditions of the
loans, financial and other covenants, security, and ranking.

S&P said, "The stable outlook indicates our expectation of adjusted
debt to EBITDA of about 6.5x-7.0x and negative adjusted FOCF of
about EUR40 million in 2022. It also reflects our expectation of
improved cash generation from 2023, as working capital movements
normalize.

"We could lower the rating if debt to EBITDA exceeded 7.0x and FOCF
remained negative on a sustained basis. This could be the result of
a more aggressive financial policy (especially regarding
shareholder remuneration) or large debt-funded acquisitions. This
could also stem from key customer losses, a sustained deterioration
of the product mix, or unexpected cost increases that the group
could not pass on to customers in a timely manner.

"We view an upgrade as unlikely in the near term, given that the
company is owned by financial sponsors. Any upside would most
likely stem from a material improvement in the company's business
risk profile, such as a significant and sustained enhancement in
profitability, cash generation, and scale. A positive rating action
would also need to be supported by robust credit metrics, with
adjusted leverage declining sustainably below 5.0x and positive
FOCF on a sustained basis, with owners committing to maintaining a
conservative financial policy that would support such improved
ratios."

Environmental, Social, And Governance

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

S&P said, "Governance factors are a moderately negative
consideration in our credit analysis of Fedrigoni. Our assessment
of the company's financial risk as highly leveraged reflects
corporate decision-making that prioritizes the interests of those
controlling owners, in line with our view of the majority of
entities owned by private equity sponsors. Our assessment also
reflects generally finite holding periods and a focus on maximizing
shareholder returns.

"Environmental factors have an overall neutral influence on our
credit rating analysis. We view environmental risks in the paper
industry as sizable given high water, chemical, and energy usage.
We think that this could expose companies in the sector to tighter
environmental regulation. That said, unlike other peers in the
industry, Fedrigoni is not integrated into pulp production, which
we believe reduces the environmental risks originating from its
operations. Additionally, more than half of Fedrigoni's EBITDA
comes from converting activities in the self-adhesive/label
segment, which tend to have a lower environmental footprint than
the overall paper industry. Nevertheless, Fedrigoni aims to reduce
its carbon dioxide emissions by 30% by 2030. In our opinion,
Fedrigoni has a high control over its greenhouse gas emissions,
since most of the energy it uses is co-generated by its plants.
Fedrigoni also aims to increase water and waste recovery to 95% and
100%, respectively (from 90% and 75% in 2020)."


INTESA SANPAOLO: Fitch Affirms 'BB' Rating on Subordinated Debt
---------------------------------------------------------------
Fitch Ratings has affirmed Italian insurer Intesa Sanpaolo Vita
S.p.A.'s (ISV) Insurer Financial Strength (IFS) Rating at 'BBB+'
(Good) and Long-Term Issuer Default Rating (IDR) at 'BBB'. The
Outlooks are Stable.

The affirmation reflects ISV's concentrated exposure to Italian
sovereign debt, strong capitalisation and leverage and a 'Most
Favourable' business profile.

KEY RATING DRIVERS

Ownership Credit-Positive: Fitch expects ISV would receive support
from parent Intesa Sanpaolo S.p.A. (ISP, IDR: BBB/Stable), if
required. This leads to an alignment of ISV's IDR with that of ISP
via a one-notch uplift from the insurer's standalone credit quality
of 'bbb-'. ISV's IFS Rating is notched up once from its 'BBB' IDR
to result in 'BBB+'. ISV is a significant contributor to the
parent's profitability and an important pillar of the parent's
capital-light growth strategy.

High Exposure to Italy: ISV's standalone credit quality is
influenced by the company's concentrated exposure to Italian
sovereign debt, which is reflected in its view of the insurer's
capitalisation, as measured by Fitch's risk-adjusted Prism
Factor-Based Capital Model (Prism FBM), and of ISV's
investment-and-asset risk. To match its domestic insurance
liabilities, ISV at end-2021 held EUR58 billion of Italian
sovereign bonds (2020: EUR55 billion) corresponding to 7.4x
consolidated shareholders' funds (2020: 7.8x).

Strong Capitalisation and Leverage: ISV's Prism FBM score was
'Strong' based on its end-2021 financials, in line with 2020's. The
insurer's consolidated Solvency II ratio, calculated using the
standard formula, was very strong at 244% at end-1H22 (2021: 259%).
Its Fitch-calculated financial leverage ratio (FLR) decreased to
23% at end-2021 (end-2020: 26%), as a result of an increase in the
group's shareholders' equity. Fitch views this level of FLR as
supportive of ISV's ratings.

'Most Favourable' Business Profile: Fitch ranks ISV's business
profile as 'Most Favourable' compared with peers' and views it as
supportive of the insurer's ratings. ISV is the second-largest
Italian life insurance group by premiums with EUR19 billion of
gross premiums underwritten in 2021 and a market share of 15%. ISV
has a strong franchise in Italy and can exploit its pricing power.
It distributes its products mainly through ISP's bank branches and
provides single-premium products to ISP's network.

ISV continued its diversification into non-life in 2021. Non-life
premiums grew to EUR1.4 billion in 2021 (2020: EUR1.2 billion),
representing about 7% of total gross premiums, fuelled by its
recent acquisition of Cargeas Assicurazioni S.p.A., an Italian
non-life insurer, as part of the merger of UBI Banca S.p.A. into
ISP. ISV was the sixth largest non-life insurance group in Italy by
premiums in 2021, with a market share of 4%.

Strong Earnings: ISV's Fitch-calculated net income return-on-equity
was unchanged at a strong 10% in 2021, supported by strong
unit-linked inflows. ISV's end-2021 net income was EUR766 million,
slightly increasing from EUR697 at end-2020. At end-1H22, ISV's net
income increased to EUR476 million (1H21: EUR448 million), despite
a 11% decrease in life premiums. Fitch views ISV's earnings as
strong and supportive of ratings. Fitch expects ISV to maintain
this level of profitability in 2022.

RATING SENSITIVITIES

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

- A downgrade of ISP's IDR

- A weakening of ISP's propensity to support ISV

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

- An upgrade of ISP's IDR

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
   ----                      ------            -----
Intesa Sanpaolo
Vita S.p.A.       LT IDR      BBB   Affirmed   BBB

                  Ins Fin Str BBB+  Affirmed   BBB+

   subordinated   LT          BB+   Affirmed   BB+




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

TENGIZCHEVROIL: S&P Lowers ICR to 'BB+', Outlook Negative
---------------------------------------------------------
S&P Global Ratings lowered its ratings on Kazakh oil producer
Tengizchevroil (TCO) to 'BB+' from 'BBB-' and its national scale
ratings to 'kzAA' from 'kzAAA'. S&P removed all ratings from
CreditWatch negative, where it had placed them on July 13, 2022.

The negative outlook reflects that S&P could lower the ratings on
TCO if persisting operational issues at CPC over the next 12 months
impair TCO's capacity to export and, thus, produce oil. This could
result in weaker cash flow, block expansion plans, and gradually
erode liquidity.

The downgrade of TCO mainly reflects the potential damage to the
oil producer's operations and cash flow from lengthy disruptions to
its main export route. TCO exports more than 95% of its oil through
the CPC via Russian territory. S&P said, "Considering the
geopolitical tensions due to the Russia-Ukraine war and the related
economic sanctions from Russia's trading partners, we see
increasing risk of disruptions of oil exports from TCO via Russia.
Although Kazakhstan strictly adheres to all sanctions against
Russia while trying to maintain the long-lasting relationship with
its neighbor, striking the balance might prove to be difficult, in
our view. Furthermore, global oil markets will likely remain
volatile and highly unpredictable. We understand the G7 and EU want
to supplement previous bans and sanctions on Russian oil exports,
as well as on transportation and insurance of oil cargoes from
Russia, with a cap on the price of Russian oil, but Russia seems
unwilling to sell at capped prices. This might lead Russia to stop
exporting oil to the global markets and to block exports from other
countries so that it can gain leverage against its Western
opposition. We note that most Kazak oil producers, including TCO,
Kashagan, and CPC pipeline, are majority owned by Western oil
companies like Exxon, Chevron, Shell, and TotalEnergies,
potentially giving Russia additional reasons to block oil flow.
Although this is not our current base case, we believe the
probability of blocked or substantially reduced oil exports through
Russia has increased over the past months."

S&P said, "We anticipate further disruptions to exports via CPC and
Novorossiysk and incorporate our view of the increased risk in our
ratings on TCO. Since March 2022, there have been at least four
incidents affecting the CPC pipeline, through which Kazakhstan
exports about 80% of its oil production. The 1,510-kilometer
pipeline connects Kazakhstan's Tengiz, Kashagan, and Karachaganak
oil fields to the Black Sea port of Novorossiysk in Russia. First
there was storm-related damage in March that reduced exports for
almost a month and safety inspections for World War II-era deep-sea
mines in June. Then, in July, a Russian court ruled to stop loading
for 30 days due to alleged violations of the pipeline's oil spill
plan. The ruling was overturned a few days later and replaced with
a minor fine. Finally, in August, subsea cracks were discovered on
buoyancy tanks that could limit loading on two out of three CPC
single-point moorings for a few months. These incidents have led us
to revise down our estimate of Kazakh oil production in 2022 to
85.6 million tons per year (about 1.8 million barrels per day) from
87.5 million tons. Today's rating action resolves the CreditWatch
placement following the July court ruling (see "Tengizchevroil
'BBB-', 'kzAAA' Ratings On CreditWatch Negative On Increased
Geopolitical Risk," published July 13, 2022, on RatingsDirect). In
our review we also considered that the August event at CPC left the
pipeline with slightly more than 60% capacity for the ensuing few
months. TCO narrowly avoided impact on its exports because, shortly
after, maintenance and an accident limited capacity at the Kashagan
field. This eased the stress on TCO, since the remaining CPC
capacity has adequately covered TCO's export needs. We understand
that repairs at CPC should finish by late October, pending weather
conditions, but we cannot rule out further accidents as
geopolitical tensions persist. Prior to March, accidents at CPC
were not as frequent, and we reflect the increasing risk of further
accidents and additional scrutiny from Russian authorities in our
rating on TCO."

Kazakhstan's full autonomy from Russia's export channels is
impossible in the short term. On July 7, 2022, the president of
Kazakhstan, Kassym-Jomart Tokayev, instructed the national oil
company Kazmunaygas, as well as Western oil companies in
Kazakhstan, to develop options for diversifying export routes
through the Caspian Sea. S&P said, "We believe it would take years
for Kazakhstan to build such alternative routes, and exposure to
Russia will remain high in the next three to five years under any
scenario. In the longer term, the companies should achieve partial
diversification by developing routes across the Caspian Sea to
Azerbaijan, from where oil can be delivered via the
Baku-Tbilisi-Ceyhan pipeline to Turkey or to Georgian ports via
rail. Still, spare capacity of existing land infrastructure in
Azerbaijan and Georgia is limited, and infrastructure in the
Caspian basin would need to be significantly expanded. Hence, we
don't believe full diversification is possible over the next few
years."

The operational and financial impact of the long-lasting disruption
on TCO could be severe .With few alternatives to CPC's pipeline and
very limited storage capacity (three to five days) on site and at
CPC facilities, TCO would be forced to significantly curtail its
operations within days of suspended operations at CPC. S&P said,
"In a suspension scenario -- which is not our base case--we
estimate that, completely avoiding Russia -- and no more than 20%
of production including Atyrau-Samara pipeline that connects to
Russia's Transneft system -- TCO would not be able to transport
more than 10% of its current production. The company previously
used a more costly alternative route via Russian rail, but this
would not materially reduce the risk given the current geopolitical
circumstances." The potential reduction of TCO's oil output to
10%-20% of capacity would imply:

-- Increased cost per barrel produced since TCO would have to
maintain the mostly idle infrastructure. Using alternative export
routes would also markedly increase transportation costs, as CPC is
the most economical way to export oil. Rail is by far the most
expensive transportation means, and shipping oil across the Caspian
Sea would involve loading it on relatively small ships in
Kazakhstan and offloading it in Azerbaijan, which would further add
up to costs.

-- Meaningful costs to restore production after a long shutdown
since wells and other on-site equipment are not generally designed
to stay idle for a long time. S&P understands that, according to
the company, TCO can operate at meaningfully reduced capacity of
about 20% and that production restoration should be possible. It is
unlikely though that going back to 100% capacity after a long
shutdown would be possible and unclear what would the cost of such
restoration be.

-- S&P understand sthere should be no material contractual
consequences for TCO, because most of its sales are done on a spot
basis.

Still, TCO's ability to service its debt would not collapse, even
in the event of a lengthy CPC shutdown. TCO's earliest maturities
are in 2025, enabling the company to continue to service its debt
even with significantly reduced cash flows. The company also
maintains sizable cash balances that would help meet liquidity
needs for some time. S&P believes that, in an emergency, capital
expenditure (capex), as well as dividends, key sources of cash
outflows for TCO in recent years, could also be put on hold to
reduce cash outflows. This suggests that a lengthy shutdown of the
pipeline would gradually weaken credit metrics but is unlikely to
cause an immediate liquidity crisis. Nevertheless, the longer a
potential shutdown, the bigger the impact on TCO's financial
performance.

Support from shareholders could become a critical component of
TCO's credit quality, too.In our rating on TCO, S&P factors in
ongoing support from shareholders, which include large Western oil
companies, notably through a cash-call mechanism requiring them to
cover any shortfalls TCO might face. Historically, its base case
has not envisioned that cash calls would be triggered. However,
with the risk of an almost full shutdown of TCO, this feature could
become a critical instrument for TCO to maintain its credit
quality. Shareholders' willingness to provide financial aid in case
of a full shutdown is not a certainty, however.

S&P also notes that TCO's credit fundamentals remain strong and
that the absence of near-term maturities reduces liquidity risks.
Excluding any disruptions to oil transportation, we expect TCO to
benefit from high oil prices and its low costs, leading to strong
results in the next few years, including funds from operations to
debt exceeding 100%. CPC oil blend has not suffered from increased
discounts as Urals has, which allowed TCO to enjoy high oil prices
throughout 2022. The U.S. government has specified that CPC is
considered Kazakh oil despite being loaded in Russian port, which
eliminated sanction risks for potential customers and eased the
marketing of the blend. TCO's expansion program is going as
planned, without further delays related to geopolitical tensions in
the regions. All of the key components, in particular modules
pre-fabricated in South Korea, have been delivered on site and now
are being assembled. S&P continues to expect that Wellhead Pressure
Management Project (WPMP) will become operational toward end-2023
and will prevent a drop in production. Also, Future Growth Project
(FGP) will become operational in 2024, allowing TCO to increase
production that year. This should significantly increase TCO's cash
flow through much lower capex and higher operating cash flow.

The negative outlook reflects the increased likelihood that further
disruptions at CPC could gravely affect TCO's oil exports.

S&P said, "We could lower the ratings on TCO if CPC continues to
experience operational issues in the next 12 months that limit the
company's capacity to export, and thus produce, oil. This could
result in weaker cash flow, paused expansion projects, and gradual
deterioration of liquidity. We could also lower the rating if we
observe that the shareholders are unwilling to support TCO.

"We would revise outlook to stable if we observe a gradual
reduction in risks at CPC.

"We could upgrade TCO to 'BBB-' if we believe that the geopolitical
risks of Kazakh oil exports through Russia have diminished."

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

S&P said, "Environmental factors are a negative consideration in
our credit rating analysis of TCO. Energy transition and risk of
pollution are key environmental risks for the oil and gas
industry.

"Governance factors are also a negative consideration, since the
company primarily operates in Kazakhstan, where we deem governance
risks to be high. A track record of major expansion project delays
and sizable cost revisions also weighs on our view of TCO's
governance. We don't see other particular governance issues.

"Social factors are a moderately negative consideration because
many of Kazakhstan's government-owned companies (TCO is indirectly
partly owned by the Kazakh state through a 20% stake held by
KazMunayGas) have limited flexibility in managing their headcount,
especially at times of stress, because the government is keen to
maintain employment at high levels. This reduces TCO's flexibility
in managing its cost base. We also note TCO's high cost of employee
demobilization due to the COVID-19 pandemic in 2020 and track
record of social conflicts at its production sites."


TRANSTELECOM CO: S&P Affirms 'B' ICR & Alters Outlook to Neg.
-------------------------------------------------------------
S&P Global Ratings revised its outlook on Kazakhstan-based telecom
operator TransTeleCom Co. JSC to negative from stable and affirmed
its 'B' long-term issuer credit and 'kzBB+' national scale ratings
on the company.

The negative outlook reflects the tight liquidity with A/B of about
1x and the potential risk of debt acceleration associated with
covenants breaches.

S&P said, "We now assess liquidity as less than adequate due to
tight headroom in uses to sources and a covenant breach. We expect
liquidity sources to be roughly equal to liquidity uses over the
next 12 months due to high committed payments for data centers
acquired in 2020 and substantial debt maturities. However, debt
maturities are relatively even without the bulk repayments, and
committed payments for data centers acquired in 2020 could decrease
as the company negotiates a more comfortable schedule, so we don't
expect liquidity uses to exceed sources. Furthermore, as of June
30, 2022, TransTeleCom breached a 6x liabilities-to-equity
maintenance covenant on its KZT10 billion local bond. This is
because in first-half 2022, the company reported about KZT40
billion of FX losses on its ruble liability for the data centers
due to an unusually strong ruble, which affected equity in the
covenant calculation. We forecast TransTeleCom is unlikely to
comply with the covenant as of year-end 2022 if the ruble stays
strong, which could cause a cross-default on other debt, according
to documentation. However, we expect the company will waive the
breach or negotiate an alternative. According to the bond
documentation, the sole bondholder, state holding company Bayterek,
has a right to either accelerate repayment or request a pledge;
close monitoring of the company's metrics is another option. We
understand Bayterek has no intention to accelerate repayment and
the parties are discussing alternatives. According to management,
additional pledges under discussion are not material and will not
trigger existing negative pledge clauses in other debt
documentation. Therefore, we don't expect a default on this bond
and a respective cross-default on other debt, and don't view
liquidity as weak. We forecast the company could have tight
headroom under debt-to-equity covenants in other loan agreements at
year-end but won't breach them. TransTeleCom notified other
creditors about the existing covenant breach on the bond and we
understand it received confirmation that all committed long-term
credit lines were still available.

"S&P Global Ratings expects TransTeleCom's operating performance
will remain solid in 2022-2023, supported by cash flow from data
centers and stable revenue from railway monopoly Kazakhstan Temir
Zholy (KTZ). We forecast revenue growth of 8%-10% in 2022 and 7%-8%
in 2023, primarily due to increasing revenue from data centers and
cloud servicing, and IT projects. We expect the company to report
healthy metrics, with adjusted debt to EBITDA not exceeding 4.0x in
2022-2023 compared with 3.3x in 2021, despite inflationary pressure
on operating expenditure and the depreciating tenge.

"We consider the liability accrued in 2020 for acquired data
centers debt-like and adjust metrics accordingly. We treat the
resulting long-term accounts payables as debt, in line with our
criteria, because the benefits of ownership are already accruing to
TransTeleCom. Therefore, we treat the liability's repayment as a
debt repayment, as opposed to the company's presentation of this
cash outflow as capital expenditure (capex). Therefore, in our
base-case scenario, we forecast capex to be relatively low at up to
KZT2 billion, and only for annual maintenance (although adding data
centers debt repayment to capex, we estimate an annual cash outflow
of about KZT22 billion-KZT23 billion). Accordingly, we forecast S&P
Global Ratings-adjusted FOCF to be strong. However, we understand
it will cover repayments for data centers of KZT20 billion-KZT21
billion, resulting in negative cash flow after dividends in 2022,
improving to at least break-even in following years. Pressure on
cash flow could ease if the company extends the payment schedule
for data centers beyond 2026, which is not our base-case scenario
because negotiations with the vendor are ongoing."

TransTeleCom's top 10 customers represent more than two-thirds of
revenue, implying very high revenue concentration with KTZ and
other large customers.  The company has a relatively small 4%
market share in Kazakhstan's overall telecoms market and
concentrates in two segments--long-haul fiber backbone
infrastructure, and IT services. It also has a small market share
in broadband services (6%) and a limited presence in the large
mobile segment. The company relies heavily on KTZ, although KTZ's
share of total revenue decreased to about 40% from 50% previously,
with additional cash flow from data centers. Still, any
deterioration in KTZ's performance due to challenging economic and
geopolitical conditions will likely make it reconsider costs and
result in lower revenue for TransTeleCom. However, so far S&P
maintains its 'b+' stand-alone credit profile on KTZ
(BB/Negative/--), and its negative outlook on it reflects that on
the sovereign.

S&P said, "The negative outlook reflects tight liquidity, with A/B
of about 1x, and the risks of debt acceleration associated with
covenant breaches. However, we forecast TransTeleCom's operating
performance will remain sound, with revenue growth, and EBITDA
margins of 35%-40% in 2022-2023, resulting in relatively moderate
leverage with debt-to-EBITDA below 4x."

S&P could lower the rating if the company's liquidity position
deteriorates further because of:

-- A debt acceleration due a covenant breach, likely resulting
from strong ruble against the tenge, unlike historical trends.
Tightening of liquidity headroom with A/B below 1x due to
weaker-than-expected cash flow or an inability to reschedule capex
payments for data centers.

-- S&P could also lower the rating if TransTeleCom's leverage
exceeds 5x or adjusted FOCF after regular payments for data centers
and dividends is sustainably negative because of weaker operating
performance or higher-than-expected maintenance capex or
investments in other projects. Deterioration in governance or a
change in financial policy because of a change in ownership might
lead to a negative rating action as well.

S&P could revise the outlook to stable if the company waives the
existing covenant breach and demonstrates proper liquidity
management by avoiding any breaches or waiving them in advance. The
outlook revision would hinge on liquidity sources to uses of at
least 1x, and solid operating performance resulting in debt to
EBITDA below 4x and at least positive adjusted FOCF after regular
payments for data centers and dividends.

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




=====================
S W I T Z E R L A N D
=====================

TRANSOCEAN LTD: S&P Lowers ICR to 'SD' on Distressed Exchanges
--------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on
Switzerland-domiciled offshore contract driller Transocean Ltd. and
issuing subsidiary Transocean Inc to 'SD' from 'CC'. S&P also
lowered its rating on the rated notes involved in the exchange to
'D' from 'CC'.

Transocean Ltd. completed the exchanges of certain of its 0.5%
exchangeable senior bonds due 2023 and certain of its 7.25% senior
unsecured guaranteed notes due 2025.

The downgrade follows Transocean's completion of debt exchanges S&P
views as distressed.

Transocean completed the following previously announced debt
exchanges:

-- Exchanged about $73 million of its existing 0.5% exchangeable
bonds due 2023 (not rated, $140 million outstanding as of June 30,
2022) for $73 million of new 4.625% senior guaranteed exchangeable
bonds due 2029 and warrants to purchase up to 31.5% of the shares
underlying the new notes. The new exchangeable bonds are guaranteed
by Transocean and certain subsidiaries of Transocean Inc. and are
pari passu with the company's existing senior unsecured notes with
subsidiary guarantees from such holding company subsidiaries.

-- Exchanged approximately $43.3 million of its existing 7.25%
senior unsecured guaranteed notes due 2025 (issue rating 'CC', $411
million outstanding as of June 30, 2022) for $38.9 million of the
new 4.625% senior guaranteed exchangeable bonds due 2029.

-- The company repurchased about $13.8 million of its 7.25% senior
unsecured guaranteed notes due 2025 for approximately $11.7 million
cash (plus accrued and unpaid interest).

S&P views the transactions as tantamount to default.

S&P said, "In our view, the exchanges offer participating
bondholders less than the original promise of the securities, and
thus, combined with our assessment of the company's liquidity as
"less than adequate" (before the exchanges), we consider them
selective defaults. Although the first transaction is offering
nominal par value, a higher coupon, warrants to purchase Transocean
shares, and subsidiary guarantees, we view it as less than the
original promise given the six-year maturity extension and lower
coupon relative to the current yield on Transocean's existing
guaranteed exchangeable and non-exchangeable notes.

"We intend to review our ratings on Transocean, including the
issuer credit rating and issue-level ratings, over the next week.

"We intend to review our ratings on the company over the next week
to incorporate the debt exchanges, new debt issuance, recent
events, and our forward-looking opinion of its creditworthiness."




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

BT GROUP: Fitch Affirms 'BB+' Rating on Subordinated Debt
---------------------------------------------------------
Fitch Ratings has affirmed BT Group plc's (BT) Long-Term Issuer
Default Rating (IDR) and senior unsecured rating at 'BBB'. The
Outlook is Stable. Fitch has also affirmed BT's Short-Term IDR to
'F2'.

The rating affirmation considers BT's solid business profile,
stable to modestly improving operating cash flow, leverage headroom
and a competitive, but rational, market environment.

The UK market's consolidation given the merger of Virgin Media's
cable and O2 UK mobile networks in 2021, poses a stronger
competitive threat in the retail market and a potential for
heightened wholesale competition in the longer term.

Nonetheless, BT has maintained its market share, while
inflation-linked price increases in fixed and mobile markets
underpinning growth in its consumer operations, which accounted for
30% of group EBITDA in the financial year ending March 2022 (FY22).
Openreach's wholesale access operations (42% of FY22 EBITDA) is
performing well, despite increased wholesale fibre competition in
the UK, with reported EBITDA up by 8.2% in FY22.

BT closed FY22 with net debt-to-EBITDA of 1.7x compared with a
downgrade threshold of 2.5x. This metric will rise over the coming
years as the company enters a period of peak capex as it
accelerates its fibre roll-out, an investment that Fitch believes
is important in sustaining its competitive position as well as
managing its operating costs.

KEY RATING DRIVERS

Solid Operating Profile, Resilient Financials: BT has a reasonably
diverse cash flow profile as a single-market incumbent
telecommunications company. It has scale, solid margins and an
increasingly well-invested infrastructure, albeit its UK fibre
roll-out has lagged Spain and France, where the incumbent (and
competitors) chose to absorb the associated cash flow pressure of
fibre investment at an earlier stage. BT's cash flow, which is
dominated by its consumer and Openreach wholesale businesses
(together 70% plus of IFRS16 EBITDA), has visible and stable
margins.

BT's leading positions in the UK's fixed broadband (number one) and
mobile (number two) by revenue support its operating profile. The
company's financial profile sits comfortably in the 'BBB' category
with a visible operating cash flow providing leverage headroom
relative to a downgrade threshold of 2.5x (Fitch's forecast: 1.9x
for FY23). BT's medium-term free cash flow (FCF) constraints, due
to its fibre investment, limit the rating upside at 'BBB'.

Competitive, Rational Market: Fixed broadband pricing in the UK is
underpinned by an industry consensus that network investment
requires rational pricing. Fibre investment is taking place across
the incumbent and alternative networks (Altnets), with Openreach
targeting 25 million fibre-to-the-premise (FttP) coverage by 2026
and VMED O2 UK Limited (VMO2; BB-/Stable) reaching up to 21 million
homes by 2026 (including its fibre joint venture (JV)).

"Inflation plus" price increases have been implemented by principal
operators, which Fitch expects to support stable-to-rising revenue
for the market. However, VMO2's year-on-year pro forma fixed
revenue fell by 3% in 2Q22, on a 2.1% decline in fixed average
revenue per user (ARPU), albeit reportedly due to the base effects
of high wholesale revenue a year ago.

Wholesale Competition Risk: The recently announced fibre JV
targeting up to 7 million UK homes by 2027, involving VMO2's
owners, Telefonica SA (BBB/Stable), Liberty Global plc and
infrastructure fund Infravia has the potential to expand VMO2's
planned fibre coverage to 21 million homes and cover 80% of the
country. This alternative fibre project is by far the most
ambitious (when combined with VMO2's own planned fibre overbuilds)
in the UK and, theoretically, poses a longer-term risk to Openreach
- the largest and highest margin part of BT's EBITDA (2022A: 42% of
EBITDA; EBITDA margin 58%).

Wholesale Threat Limitations: The build will take time, and, in
Fitch's view, Openreach will likely retain first-mover advantage
with its wholesale customers (albeit it was late in rolling-out
full fibre). Fitch believes the physical practicalities of shifting
large-scale customer contracts from an established network provider
to an untested provider will mitigate the size and immediacy of the
risk. That being said, UK connectivity providers such as TalkTalk
Telecom Group PLC (B+/Negative) are pushing a business model that
includes the expansion of alternative wholesale access and the cost
benefit this may bring.

Accelerated Fibre Deployment: BT's plan to accelerate its FttP
target to 25 million homes and businesses by end-2026 from 20
million is supportive of its credit profile, reflecting an improved
competitive wholesale capability and greater potential for reducing
operating costs. Fitch views Openreach's ability to maintain its
market share of wholesale lines in the UK as an important driver of
BT's profitability. The plan raises BT's peak capex to GBP4.8
billion-4.9 billion in the next three-four years, from GBP4.1
billion in FY20, with associated "super" tax deductions helping to
partly fund it.

Reduced Pension Uncertainties: BT's current annual cash pension
contributions of about GBP900 million a year will change, with
slightly higher pre-tax cash contributions in the next couple of
years offset by lower payments in the following years when taking
into consideration the contributions to an asset-backed funding
(ABF) arrangement. BT will have medium-term cash pensions
contributions of GBP800 million in FY23, GB600 million in FY24,
GBP600 million in FY25 and GBP600 million in FY26. BT will also
make cash contributions of GBP180 million a year from FY22 through
the ABF arrangement.

Leverage Thresholds Revised: Fitch's corporate finance group is
transitioning core leverage thresholds from those based on funds
from operations (FFO) to an EBITDA formulation. Fitch has tightened
BT's thresholds to 2.5x on a net debt-to-EBITDA basis from 3.0x FFO
net leverage (for a downgrade) and to 2.0x from 2.5x (for an
upgrade), broadly reflecting the average gap between these metrics
across the EMEA investment-grade telecoms portfolio.

DERIVATION SUMMARY

BT has a strong market position across business and consumer
segments and both fixed and mobile product lines. Its regulated
local loop access division, Openreach, accounts for about 42% of
adjusted EBITDA and provides strong support to the company's credit
profile.

Weaker FCF, a more competitive UK market environment, regulatory
pressures and cash contributions for high pension plan recovery
payments mean that downgrade thresholds are set slightly more
stringent than its peer group of integrated European telecom
operators that are predominantly focused on their domestic markets,
such as Royal KPN N.V. (BBB/Stable) and Telecom Italia S.p.A.
(BB/Negative).

Higher and comparably rated peers such as Deutsche Telekom AG
(BBB+/Stable), Orange SA (BBB+/Stable) and Vodafone Group Plc
(BBB/Stable) have greater scale and geographic diversification that
can provide some mitigation to potential weakness in domestic
performance. This diversification also offers levers to defend
financial metrics in the event of leverage pressure (ie through
asset sales or minority listings), whereas levers are more limited
at BT.

KEY ASSUMPTIONS

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

- Revenue CAGR 0.5% in FY23-FY26 reflecting the benefit of
   inflation-linked price rises but also competitive pressure
   driven by a saturated market and a challenging macroeconomic
   outlook;

- Fitch-defined EBITDA margin of 33%-34% in FY23-FY26 driven by
   the top line and the cost transformation programme but with
   margin pressure arising from cost inflation and the on-going
   fibre roll out;

- Cash pension and asset-backed fund contributions, included
   within FFO, of GBP 980 million in FY23, declining to GBP790
   million in FY24;

- A negative specific-item cash flow impact of GBP475 million in
   FY23 and GBP400 million in FY24-FY26;

- Capex of 22%-23% as a percentage of revenue in FY23-FY26 driven

   by fibre investments; and

- Dividend payments of about GBP800 million in FY23 and growing
   by 2% per year, thereafter.

RATING SENSITIVITIES

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

- Fitch-defined net debt-to-EBITDA sustainably below 2.0x  
(equivalent to FFO net leverage below 2.5x) and cash flow from
operations minus capex-to-total debt trending sustainably towards

8%-10% in the medium term;

- Greater visibility and reduced execution risks on the
implementation of the company's restructuring and transformation
programme and FttP deployment, resulting in improved FCF
generation; and

- EBITDA growth reflecting a reduced impact from legacy products,

improved operating performance at core divisions and strengthened

competitive position following increased FttP and convergent
customer base penetration.

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

- A downgrade to 'BBB-' would be likely if Fitch-defined net
debt-to-EBITDA is expected to remain consistently above 2.5x
(equivalent to FFO net leverage above 3.0x); and

- Deterioration in the key operating and financial metrics at
BT's main operating subsidiaries and lower-than-expected FCF
generation.

LIQUIDITY AND DEBT STRUCTURE

Comfortable Liquidity: At FYE22, BT reported unrestricted cash and
equivalents of GBP2.9 billion (excluding collateral received on
swaps of GBP555 million) and access to an undrawn revolving credit
facility of GBP2.1 billion with maturity in March 2027. Fitch
forecasts a cash balance of about GBP2.4 billion in FYE23,
providing BT with sufficient liquidity cover. The expectations of
negative FCF for the next two to three years, driven by pension
deficit payments and capex, limit an otherwise robust liquidity
profile.

ISSUER PROFILE

BT is the UK's incumbent telecoms operator providing communications
solutions and services to consumers, SMEs, public sector and to
other communications providers. BT provides services across the
telecommunication services spectrum: fixed line, broadband, mobile
and pay TV, and owns and operates the largest fixed network in the
UK through its wholly owned subsidiary Openreach. It is the
market's number one and two provider in fixed and mobile product
lines, respectively, and number three in pay TV.

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
   ----                      ------           -----
British
Telecommunications
plc                  LT IDR   BBB    Affirmed   BBB

                     ST IDR   F2     Affirmed   F2

   senior unsecured  LT       BBB    Affirmed   BBB

   subordinated      LT       BB+    Affirmed   BB+

   senior unsecured  ST       F2     Affirmed   F2

BT Group plc         LT IDR   BBB    Affirmed   BBB

                     ST IDR   F2     Affirmed   F2


CENTRE FOR THE MOVING: Charity Warned UK Gov't of Closure Risk
--------------------------------------------------------------
Cameron Roy at The Press and Journal reports that the charity
behind Belmont Filmhouse warned the government about the risk of
its closure almost a month before it went into administration, it
has been claimed.

According to The Press and Journal, Screen Scotland on Oct. 11
claimed that Centre for the Moving Image (CMI) told the Scottish
Government and its quango Creative Scotland about its concerns of
insolvency on Sept. 15.

A public funding bail-out was ruled out last week after concerns
about the long-term sustainability of the charity were raised, The
Press and Journal notes.

The Belmont in Aberdeen and the Edinburgh Filmhouse stopped trading
after CMI was plunged into administration on Oct. 6, The Press and
Journal relates.

More than 100 staff across the organisation were made redundant --
including 20 in Aberdeen, The Press and Journal states.

Screen Scotland, which is part of arts agency Creative Scotland,
was in contact with CMI throughout their financial difficulties,
The Press and Journal notes.

According to The Press and Journal, a spokeswoman for the
government body told the Scotsman: "The CMI executive and board has
been responsible for the running of CMI, the business decisions it
took, and the organisation's responsibilities to CMI staff and
audiences.

"The CMI contacted Creative Scotland on Sept. 15 stating that they
were facing significant financial challenges threatening the
viability of the business.

"The CMI also informed Creative Scotland that they were taking
advice from insolvency experts.

"CMI provided a summary of the position and some financial
information to Creative Scotland on Sept. 19 and Creative Scotland
met with the organisation on Sept. 20, and again on Sept. 26 and
Sept. 27.

"Creative Scotland's board were briefed and met on Oct. 3 to
discuss the situation and confirmed funding remained available if
the CMI could demonstrate ongoing viability.

"The CMI and its professional advisors had continued to assess and
discuss the financial position but concluded that there were no
available options, or time, in the current financial climate to
change the underlying structural challenges of the business, or the
longer-term prognosis."

When the charity went into administration they said the biggest
problems were energy prices, payroll costs, lack of public funding,
inflation and cinema admissions running at 50% of
pre-pandemic levels, The Press and Journal relays.

According to The Press and Journal, Screen Scotland added: "CMI
informally tested the prospect of additional funding with Creative
Scotland when we were informed of the severity of their financial
challenges mid-September.

"We understand it was similarly tested with Aberdeen City Council
and City of Edinburgh Council. Creative Scotland indicated further
funding was unlikely.  No formal request was made."

The CMI board then met on Oct. 3 and began to formally appoint
administrators, The Press and Journal discloses.


CINEWORLD GROUP: S&P Gives B Rating to $1.9-Bil. DIP Term Loan
---------------------------------------------------------------
S&P Global Ratings assigned a 'B' rating to the $1.935 billion
debtor-in-possession (DIP) term loan provided to U.K.-based cinema
operator Cineworld Group PLC.

Cineworld is operating under the protection of Chapter 11 of the
U.S. Bankruptcy Code following a voluntary filing on Sept. 7, 2022.
S&P's 'D' issuer credit rating is unchanged.

S&P's 'B' issue rating on Cineworld's DIP term loan reflects its
view of the credit risk borne by facility debtholders. These risks
include:

-- The company's capacity and willingness to meet its financial
commitments during bankruptcy, which we evaluate in our debtor
credit profile (DCP) assessment, the starting point for our issue
ratings on DIP instruments.

-- Capacity to fully repay the DIP financing through
reorganization and emergence from bankruptcy, which we gauge in our
capacity for repayment at emergence (CRE) assessment.

-- Potential for full repayment in liquidation, reflected in our
assessment of additional protection in a liquidation scenario
(APLS).

S&P said, "Our 'b-' DCP assessment reflects our view of Cineworld's
business risk profile of fair, highly leveraged financial risk
profile, and negative one-notch comparable rating adjustment due to
expectations for negative cash flows and ongoing sector challenges.
It considers only the DIP debt in analyzing Cineworld's financial
risk profile. We exclude Cineworld's prepetition debt and other
unsecured liabilities in our calculation of key credit metrics
because the DIP facility ranks senior on a lien and priority basis.
The prepetition debt is also subject to a stay on collection and
enforcement actions and to loss as part of the reorganization
process. Cineworld's DCP reflects still-high group leverage due to
our assumption of about $3.7 billion of lease liabilities, even
after the planned site closures. Our leverage forecast of 5.3x-5.5x
during the bankruptcy period is also depressed by our assumption
that annualized EBITDA will remain well below levels before the
pandemic, as we do not expect revenue to fully recover to the level
achieved in 2019 in the next 12 months.

"Our view of Cineworld's DCP during bankruptcy also reflects our
expectation that its free operating cash flow (FOCF) after leases
will be a substantial $250 million deficit for the annualized
period. This is driven by Cineworld's substantial interest
payments, ongoing capital expenditure (capex) needs, and hefty
bankruptcy costs over the same period.

"We view the company's capacity to repay at emergence as favorable,
with expected coverage of about 155%. Our CRE assessment considers
a reorganization and addresses whether the company, in our view,
would likely attract sufficient third-party financing at emergence
to repay the DIP debt. Our CRE assessment of favorable coverage
provides an uplift of one notch over the DCP, resulting in a 'B'
issue-level rating for the $1.935 billion DIP facility. We assess
repayment prospects on the basis that all DIP facilities are
required to be repaid in cash at emergence, consistent with their
super-priority status under the U.S. Bankruptcy Code.

"Our assessment of the APLS suggests insufficient coverage if the
company cannot reorganize. Our DIP methodology also considers the
ability to repay DIP debt, even if the debtor cannot reorganize
through the Chapter 11 process. Our APLS assessment indicates
insufficient coverage (estimated at about 75% coverage) of the DIP
facility in a forced sale scenario, so we do not provide an
additional notch."

S&P attributes Cineworld's voluntary bankruptcy filing to the
prolonged effects of the COVID-19 pandemic on cinema admissions, a
highly leveraged capital structure, and substantial fixed operating
costs.Cineworld's voluntary bankruptcy filing reflected various
ongoing business challenges, including:

-- Prolonged restrictions on attendance, including site closures,
social distancing measures, protective equipment mandates, and
severely weakened revenue in 2020 and 2021.

-- Even as cinemas consistently reopened during 2022, admissions
have failed to recover to pre-pandemic levels; the number of
successful film releases was reduced by production delays and
increased competition from over-the-top (OTT) platforms such as
Netflix and Disney.

-- Substantial lease payments and a high interest burden weakened
profitability and led to significant cash outflows, requiring the
group to raise additional and expensive debt to protect its
liquidity position.

-- These factors led to significant declines in earnings and cash
flows, high leverage, and an unsustainable prepetition capital
structure.

S&P said, "We believe cinema admissions will bounce back in the
fourth quarter of 2022 and through 2023, supported by an expected
strong winter with the release of "Avatar: The Way of Water" in
December 2022. That said, we anticipate cinema film release slates
in the next 12-24 months will continue to face competition for
feature film content from OTT platforms, which will keep pursuing
direct launches of likely smaller films, as well as shortening
exclusivity windows for cinema releases. Cineworld's revenue growth
will also be constrained by our expectation of somewhat weaker
average ticket prices and a decline in concession spending per head
from record highs in 2021. In our view, this will be affected by
weaker consumer confidence and increased sensitivity to
discretionary spending in a macroeconomic downturn."


CLEMENTS RETAIL: Financial Losses Prompt Administration
-------------------------------------------------------
Tom Pegden at Leicester Mercury reports that administrators have
been brought in at a Leicester business which makes interiors for
some of the world's top retailers.

Clements Retail, in Hamilton on the outskirts of Leicester, has
appointed Midlands-based business advisory and accountancy firm PKF
Smith Cooper to lead the administration process, Leicester Mercury
relates.  According to Leicester Mercury, its financial problems
have been blamed on debts caused by a big fall in business during
lockdown.

Over the years, the business has designed, built and installed
retail interiors for clients including Christian Louboutin, Lanvin,
Alexander McQueen and Michael Kors.

Joint administrators Dean Nelson and Nick Lee, from PKF Smith
Cooper, said as well as building shop interiors the business
provided marketing, brand and logistical support to global
manufacturers, Leicester Mercury notes.

According to Leicester Mercury, they said Clements experienced
significant financial losses in 2020 and 2021 as a result of
reduced demand, project delays and bad debt from customers caused
by the pandemic.

Accounts to the end of June 2021 showed the business brought in a
new chief executive to help execute a turnaround programme, which
included the closure and sale of a production facility and stopping
its manufacturing operations in favour of doing store fit-outs and
branding support, Leicester Mercury discloses.  The business also
cut staff numbers, taking the number that year down to 54 from 69
in 2020, Leicester Mercury states.

The accounts said the business turned over just over GBP17 million
in the 12 month period and made pre-tax losses of more than GBP2.5
million which it had hoped to overcome, according to Leicester
Mercury.


DIGNITY FINANCE: S&P Places 'B+' Rating on Cl. B Notes on Watch Neg
-------------------------------------------------------------------
S&P Global Ratings placed on CreditWatch negative its 'A- (sf)' and
'B+ (sf)' ratings on the class A and B notes issued by Dignity
Finance PLC.

Dignity Finance is a corporate securitization of the U.K. operating
business of the funeral service provider Dignity (2002) Ltd.
(Dignity or the borrower). It originally closed in April 2003 and
was last tapped in October 2014.

The transaction features two classes of fixed-rate notes (A and B),
the proceeds of which have been on-lent by the issuer to Dignity
via issuer-borrower loans. The operating cash flows generated by
Dignity are available to repay its borrowings from the issuer,
which in turn uses those proceeds to service the notes.

The CreditWatch negative placement reflects uncertainty about the
consumers' response to a more volatile environment, notably in
terms of higher cost of living and competitive pressures within the
funeral services sector. S&P's view is that the business has
limited differentiation potential in an industry where competition
has been increasing. These factors combined negatively affected our
assessment of the borrower's business risk profile (BRP), which S&P
has lowered to weak from fair. S&P's lowering of the BRP is further
supported by the following factors:

-- S&P believes that the higher cost of living in the U.K. will
likely accentuate the consumers' preference for more basic and thus
affordable funeral services, perpetuating a trend that started a
few years ago and will hurt the profitability prospects of the
industry.

-- Over the past years, the increasing prevalence of basic
funerals has led to a deterioration of the profitability of the
group. The S&P Global Ratings adjusted EBITDA margin stood at 26.3%
in 2021 compared with 34.2% in 2018 and above 40% the years before.


-- While S&P recognizes that Dignity Finance has played an
important role during the pandemic, responding to larger than
expected deaths and faced the various restrictions in terms of
personal gatherings, the transformation of the U.K. funerals
industry started well before the COVID-19 outbreak.

-- The Office for National Statistics (ONS) forecasts that deaths
will remain high. It only foresees a decline of about 2% in 2023,
with an increase of about 1.1% per year thereafter. There are a few
factors that could explain that deaths would not materially reduce
despite the spike that followed the pandemic. Excess deaths
compared with historical levels could be due to circulatory disease
and other comorbidities (e.g., diabetes), which could be more fatal
where COVID-19 is endemic, lower screening, and underinvestment in
the National Health Service (NHS). Nevertheless, S&P believes there
is uncertainty around the normalization of the deaths profile, and
it views the number of deaths to be less predictable.

-- Since Dignity revised its pricing strategy in 2018, to align
with competitors, it did not manage to gain market shares. S&P
believes this reflects the relatively limited differentiation
potential of the business. The market share of funeral services
remained slightly below 12.0% and it remained slightly above 11%
for cremations.

-- Dignity launched a cremation service called "Direct
Cremations". It is a low-cost, unattended cremation priced at
GBP995.0. In S&P's opinion, unexpected deaths could lead families
to take decisions on the spot in a practical manner and go for a
low-cost option. This service may help Dignity leverage the prime
location of its 44 crematoria. However, it believes that its
ability to up-sell services could be compromised because families
could consider another provider for any post-service events, do it
themselves, or simply not have one.

For the class A notes, a lower BRP may result in up to a
three-notch lowering of the anchor, which is currently at 'bbb-'.
For the class B notes, a lower BRP would also put pressure on the
anchor, currently 'b+', potentially resulting in a two-notch
lowering of the anchor. Any change in the anchor for either the
class A or B notes has direct implications for S&P's ratings
assigned to those notes.

S&P said, "Therefore, we placed our ratings on the class A and B
notes on CreditWatch negative while we await further information
from the company regarding its strategy and guidance on its
financial performance, which will inform our base-case forecast.
Any significant deterioration of our base-case forecast would put
further pressure on the anchor levels and ultimately the ratings.
We expect to resolve the CreditWatch placements within the next 90
days."


ENQUEST PLC: S&P Puts 'B-' ICR on Watch Positive on Refinancing
---------------------------------------------------------------
S&P Global Ratings placed its 'B-' issuer credit rating on EnQuest
PLC on CreditWatch with positive implications, reflecting the
likelihood that S&P will upgrade the company to 'B' after the
refinancing, provided it is completed as intended.

S&P assigned its preliminary 'B+' rating to the proposed senior
unsecured notes due 2027, reflecting its expectation of substantial
recovery in the hypothetical event of payment default.

S&P did not take a rating action on the existing senior unsecured
notes rated 'B' because it expects the company to redeem them as
part of the refinancing.

EnQuest has announced a refinancing that will extend the maturities
of most of its debt instruments, substantially improving its
liquidity position.

S&P's expectation of supportive oil prices translates into strong
free operating cash flow (FOCF) over 2022-2023, while management's
focus on leverage means gross debt may decline further.

S&P expects EnQuest's liquidity needs will be limited following the
refinancing.

The new capital structure will mainly comprise the debt instruments
that mature in 2027, well after the existing instruments that are
scheduled to mature in 2023. In addition, the amortization profile
of the amended reserve-based lending facility (RBL) will be less
demanding, further easing the pressure on the liquidity profile.
Successful refinancing is the key consideration for the higher 'B'
rating. S&P does not expect to raise the issuer rating if the
company did not refinance as proposed.

Following the refinancing, the new debt structure will comprise:

-- $500 million senior secured RBL ($400 million drawn), due
2027;

-- $300 million proposed senior unsecured notes, due 2027;

-- $163 million retail bond, due 2027;

-- $136 million retail bond, due 2023; and

-- About $8 million Sullom Voe Terminal working capital facility,
due 2023.

Supportive oil market conditions will result in lower leverage and
strong operating cash flow. Over the course of 2022, oil markets
have seen healthy demand amid supply restrictions caused by the
Russia-Ukraine conflict. S&P said, "As a base case, we expect Brent
oil prices will remain healthy thanks to a balanced supply and
demand picture, despite some concerns around potential demand
softening because of the global economic slowdown. Under our Brent
oil price assumptions, we expect EnQuest's S&P Global
Ratings-adjusted EBITDA will reach $900 million–$1,000 million in
2022, compared with $760 million in 2021, translating into funds
from operations (FFO) to debt comfortably above 20% and adjusted
debt to EBITDA (on a gross basis, since we typically do not net
cash for companies with a weak business risk profile) comfortably
below 3.5x, in line with our expectations for a 'B' rating."

The financial policy target of net debt to EBITDA of 0.5x means
that the company will continue to prioritize leverage reduction.

Strong cash flow from operations will give EnQuest optionality in
terms of capital allocation. S&P said, "Given the company's public
leverage target of 0.5x (as defined by EnQuest; 0.9x at the end of
first-half 2022, on a net basis), we anticipate that debt reduction
will remain a priority. Our adjusted debt (which is on a gross
basis) will continue to decline as the RBL amortizes, and
liabilities such as leases and contingent considerations for
acquisitions are repaid. We understand that the company will
continue to focus on cash generation and deleveraging before
considering dividends as part of its wider capital allocation
framework." This means it will direct any funds not used for debt
repayment toward business growth (either capital expenditure
[capex] or acquisitions).

EnQuest needs to ramp up production to build rating headroom.

The company cut its capex during 2020 and 2021 to protect
liquidity, which ultimately resulted in declining production. In
2021, average production was 44,415 barrels of oil equivalent per
day (boepd), down from 59,116 boepd in 2020 and 68,606 boepd in
2019. This production level is relatively low for a 'B'-rated oil
and gas exploration and production company. S&P said, "This
compares with our 2022 expectation of 59,000 boepd-65,000 boepd for
Tullow (B-/Negative), about 71,000 boepd for Northern Oil and Gas
(B/Stable), and about 67,000 boepd for NuVista Energy (B/Stable).
It is therefore crucial that EnQuest ramps up production to stay
more in line with its peers. We think the 141 million barrels of
oil equivalent (boe) of proved reserves (1P) should help EnQuest
arrest the decline, but the company will need to step up
investments to do so. In our base case, we anticipate production
will remain close to about 50,000 boepd (first-half 2022 average is
49, 726 boepd), given the higher capex in 2022-2023 to drill more
wells. EnQuest will also continue to pursue acquisitions, as it has
done historically.' This introduces some uncertainty regarding
future scale and leverage, although this does not affect the rating
at present.

The CreditWatch positive placement indicates that S&P will raise
its issuer rating on EnQuest to 'B' in the coming weeks after the
company completes the refinancing, provided it does so as proposed,
substantially extending its debt maturities.

Although less likely, in case the company did not refinance as
proposed, the rating will be under pressure over time. This is
because of weakening liquidity as October 2023 maturities
approach.

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


PETKIM PETROKIMYA: S&P Assigns Prelim. 'B+' LT Issuer Credit Rating
-------------------------------------------------------------------
S&P Global Ratings withdrew its preliminary 'B+' long-term issuer
credit rating on Petkim Petrokimya Holding. S&P assigned the
preliminary rating on the condition of a successful refinancing of
the $500 million 5.875% notes due 2023 by tender offer, which has
not occurred in the timeframe we anticipated. As such, the
preliminary rating does not apply. The outlook was negative at the
time of the withdrawal.

In view of the current market conditions, the company continues
reviewing different funding alternatives, including a possible new
bond financing on international debt capital markets.


SIGNATURE LIVING: Three Hotels, Gym Owed Over GBP56 Million
-----------------------------------------------------------
Jon Robinson at Liverpool Echo reports that the companies behind
three Signature Living hotels and a gym owed over GBP56 million
when they collapsed into administration, it has been revealed.

The businesses behind The Dixie Dean Hotel in Liverpool, Rainhill
Hall near Prescot, Shankly Hotel in Preston and a gym in
Liverpool's Shankly Hotel all separately appointed Kroll Advisory
in August, Liverpool Echo recounts.

How much each company owed to its creditors when it entered
administration has now been revealed for the first time in
newly-filed documents with Companies House.

They also detail the events leading up to Kroll being appointed and
whether each site has been put up for sale.

Each company operated separately from one another, but were all
part of the wider Signature Living family of companies.  Signature
Living Group itself went into administration in April 2020,
Liverpool Echo relates.

Signature Eden Limited is the company behind The Dixie Dean Hotel
in Liverpool, which has 100 bedrooms, can accommodate 160 diners
and employs 44 members of staff.

The hotel opened in 2019.  Since the administration, all staff have
been retained to run the hotel while a sale of the business and
assets of Signature Eden Limited is being sought by Kroll,
Liverpool Echo states.

The documents filed with Companies House by Kroll show the business
owed more than GBP15.5 million to its creditors when it entered
administration on Aug. 5, Liverpool Echo discloses.

Its largest creditor was Lyell Trading Limited, which was owed more
than GBP4.7 million, Liverpool Echo states.

The document also shows that unsecured creditors were owed more
than GBP6.4 million but Kroll said it is anticipated there will not
be enough funds to pay them back, according to Liverpool Echo.

Rainhill Hall is a grade II-listed country house that was completed
in 1824.  It was a retreat house run by the Society of Jesus and
known as Loyola Hall for almost 90 years to 2014 and has operated
as a hotel and wedding venue since 2017.

Loyola Hall Limited entered administration on Aug. 3 owing its
creditors more than GBP10.4 million, Liverpool Echo discloses.

Kroll, as cited by Liverpool Echo, said it is currently talking to
agents with a view to sell the business and its assets.  The hotel
has 49 members of staff who are expected to be transferred to a new
owner if the hotel is sold, Liverpool Echo states.

According to the Kroll document, secured creditor Lyell Trading
Limited was owed more than GBP4.6 million when the company entered
administration, Liverpool Echo says.  SW Construction (No2) Limited
was also owed around GBP3.7 million as a secured creditor,
according to Liverpool Echo.

The joint administrators said it is expected both companies will
receive some of their money back but a total amount is currently
unclear, Liverpool Echo states.

Unsecured creditors were owed more than GBP2.1 million but Kroll
said it is anticipated there will not be enough funds to pay them
back Liverpool Echo discloses.

Signature Living Preston Limited was the company behind the Shankly
Hotel in Preston, which has yet to open.

Signature Living Preston Limited entered administration on Aug. 5
and owed more than GBP22 million to its creditors, Liverpool Echo
according to Liverpool Echo.

According to the document, secured creditor Lyell Trading Limited
was owed c.GBP12 million when Kroll was appointed.  SW Construction
(No.2) Limited was also owed more than GBP4 million, Liverpool Echo
states.

Kroll said that it is anticipated that there will be sufficient
funds to repay the secured creditors but the total amount will
depend on how much the company's assets are sold for as well as the
associated costs, Liverpool Echo notes.

Kroll's document also shows that unsecured creditors were owed over
GBP6.8 million but that there will not be enough funds available to
repay them, Liverpool Echo discloses.

Signature Living Lifestyles holds the leasehold interest to a gym
in Liverpool's Shankly Hotel.

The company owed more than GBP8.2 million to its creditors when it
entered administration, Liverpool Echo states.

The gym, which was operated by Liverpool City Council, was closed
as a result of the Covid-19 lockdown measures.  Kroll said it
understands the council made a decision not to re-open it,
following a post-Covid review of the service by the authority,
Liverpool Echo relays.

As a secured creditor, Henslow Trading Limited was owed more than
GBP7.4 million when Signature Living Lifestyles entered
administration, Liverpool Echo discloses.  Kroll said there will be
funds to repay the company but the exact total is not yet known,
Liverpool Echo notes.

Unsecured creditors, who were owed GBP868,811, are not expected to
receive their money back, Liverpool Echo states.


SWAN HOUSING: S&P Lowers LT ICR to 'BB-', On Watch Developing
-------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Swan Housing Association Ltd. to 'BB-' and placed the rating on
CreditWatch with developing implications.

At the same time, S&P lowered its rating on the GBP250 million bond
issued by Swan Housing Capital PLC to 'BB-' and placed this rating
on CreditWatch developing. Swan Housing Capital was set up for the
sole purpose of issuing bonds and lending the proceeds to Swan, and
S&P views it as a core subsidiary of Swan.

On Sept. 29, 2022, Orbit Group announced that it has ceased its
partnership discussions with Swan Housing Association Ltd. (Swan).
S&P thinks Orbit is likely to stop providing Swan with additional
temporary support. Shortly after, Swan announced that it had
started discussions with Sanctuary Housing Group about forming a
business combination.

The CreditWatch placement indicates that Swan's credit quality
could deteriorate further over the next three months. However, if
Swan manages to secure external credit support, its credit quality
may improve by more than one notch.

S&P said, "We would consider further lowering the rating on Swan if
the group failed to secure the external support required to
continue its operations and fulfil its financial obligations, or if
the proposed partnership with Sanctuary does not progress as
planned. Without timely external support, our ratings on Swan could
be lowered by more than one notch.

"We may consider raising the ratings on Swan if it becomes part of
the Sanctuary Housing Group through the proposed partnership.
Depending on Swan's status within the group, the ratings could be
raised by more than one notch.

"We downgraded Swan because the group's financial standing has
deteriorated rapidly over the past 10 months. We estimate that, in
line with the sector, its cost base has risen on the back of
already-weak cash flows and a significant portion of its existing
properties need substantial investments. In our view, Swan now has
limited access to external funding. We also note that Swan has not
published its latest financial accounts, which we understand are a
requirement under the existing bond agreements. Our rating on Swan
is based on its high sales exposure, our view of serious
deficiencies in its management, very weak financial performance,
and very high debt burden, amid rising spending pressure.

"Moreover, Orbit Group has been providing Swan with additional
temporary support while discussions about a proposed partnership
continued. The partnership discussions with Orbit have been going
on since Dec. 10, 2021, but on Sept. 29, 2022, Orbit announced that
they had ceased; we assume the support it was offering will also
end. Later on that same day, Sanctuary Housing Group announced that
it had entered discussions with Swan regarding a business
combination."

Swan is seeking a partner following the December 2021 publication
of a judgement by the Regulator for Social Housing (RSH), in which
it lowered its assessment of Swan's governance and financial
viability to a noncompliance level. In the same judgement, the RSH
stated that Swan is reliant on the continued co-operation and
agreement of third parties to maintain covenant compliance.

On May 22, 2022, RSH issued a regulatory notice to Swan regarding
its breach of home standards, in areas such as fire safety,
asbestos management and water safety. S&P believes that the
investments required to bring its existing properties up to
regulatory standards will weigh heavily on Swan's financial
metrics.

In S&P's view, these factors could complicate the partnership
discussion with Sanctuary. Without external support, it does not
believe Swan will remain a viable business.

The business and financial weaknesses that constrain Swan's
creditworthiness are somewhat balanced by RSH's oversight and
statutory powers to intervene. The RSH's main approach to rescuing
distressed housing associations in the past has been to encourage
the formation of business partnerships with stronger
organizations.

S&P said, "We assess the regulatory framework under which
registered providers of social housing in England operate as strong
(see "Global Regulatory Framework Report Card For Public And
Nonprofit Social Housing Providers," published June 8, 2021).

"We think there is a moderately high likelihood that Swan would
receive extraordinary support from the government via the RSH and
as a result we apply a two-notch uplift from our stand-alone credit
profile (SACP) on Swan. One of the RSH's key goals is to maintain
lender confidence and low funding costs across the sector.
Therefore, we believe the RSH is likely to step in to try and
prevent a default in the sector. The RSH has a record of mediating
mergers or arranging liquidity support from other registered
providers in cases of financial distress, and we think this would
apply to Swan.

"In our view, the uncertainty around its business is likely to have
constrained Swan's access to external liquidity. That said, we
estimate that it has sufficient liquidity to cover operations for
the next 12 months. We estimate that sources of liquidity could
cover uses by more than 1x, considering its latest cash position
and the revolving credit facility (RCF) availability as of October
2022. We are mindful that pressure on the group's cash flow
generation could cause Swan to breach the covenants embedded in its
loan facilities. Without a resolution, this could mean that the
facilities it has drawn on could require repayment and existing
undrawn facilities could be withdrawn. This could quickly damage
the group's liquidity."

Environmental, social, and governance (ESG) credit factors for this
change in credit rating/outlook:

-- Governance factors: Risk management, culture, and oversight
-- Social: Health and safety


[*] UK: Administrations Across Midlands Up 64% in 3rd Qtr. 2022
---------------------------------------------------------------
Rachel Covill at TheBusinessDesk.com reports that the number of
companies filing for administration across the Midlands jumped 64%
in the third quarter of 2022, as economic headwinds continued to
hit businesses.

These findings were identified by Interpath Advisory in its latest
analysis of notices in The Gazette, TheBusinessDesk.com notes.  A
total of 36 companies based in the Midlands fell into
administration from July to September 2022 -- up from 22 during the
same period in 2021, TheBusinessDesk.com discloses.

This represents the highest number of insolvencies in a quarter in
the Midlands since before the start of COVID-19 pandemic,
TheBusinessDesk.com states.  August, which is traditionally the
quietest month for insolvency appointments, saw the highest monthly
number of administrations in the region since March 2020, with 16
appointments, TheBusinessDesk.com notes.

The picture in the Midlands aligns with what is experienced
nationally.  Across the UK, there was a total of 265 companies
which fell into administration from July to September 2022 -- up
from 176 during the same period in 2021, and up from 243 in Q3
2020, TheBusinessDesk.com  relays.

Notwithstanding the uptick in insolvency appointments in the last
quarter, administrations both in the Midlands and nationally are
still yet to hit the pre-pandemic levels, TheBusinessDesk.com
states.  In Q3 2019, there were 51 and 401 administration
appointments in the Midlands and nationally respectively,
TheBusinessDesk.com notes.

The rising number of insolvencies can be seen across a wide range
of sectors, with building and construction, industrial
manufacturing, leisure and hospitality, retail, and the food and
drink industry all witnessing increased activity, according to
TheBusinessDesk.com.

"We know that companies across the Midlands have been wrestling
with a myriad of issues for some time, from rampant inflation, to
supply chain challenges, to labour shortages, so this is perhaps
the first real evidence that a significant shift in activity is now
underway," TheBusinessDesk.com quotes Chris Pole, managing director
in Interpath's Midlands team, as saying.

"And let's remember: the bulk of administrations seen in the past
quarter landed well before the economic and political storm that
we've witnessed in the past few weeks.

"The impact of rising interest rates, currency and gilt yield
movements, and the increase in energy prices from Oct. 1 are yet to
feed through, but undoubtedly will only serve to compound the
extraordinary pressure that local businesses were already under."


[*] UK: Administrations Across Yorkshire Rises to 45 in 3Q 2022
---------------------------------------------------------------
Lizzie Murphy at The Yorkshire Post reports that the number of
companies filing for administration across Yorkshire and the North
East jumped by third in the third quarter of 2022, as economic
headwinds continued to buffet businesses across Britain.

According to The Yorkshire Post, a total of 45 companies based in
Yorkshire and the North East fell into administration from July to
September 2022 -- up from 34 during the same period in 2021,
according to Interpath Advisory in its latest analysis of notices
in The Gazette.

This mirrors the UK picture which saw a total of 265 companies fall
into administration from July to September 2022 -- up from 176
during the same period in 2021, and up from 243 in Q3 2020, The
Yorkshire Post discloses.  However, administrations are yet to hit
the pre-pandemic levels of 401 in Q3 2019, The Yorkshire Post
notes.

August -- traditionally the quietest month for insolvency
appointments -- saw the highest monthly number of administrations
across the UK since March 2020, with 105 appointments, The
Yorkshire Post states.

The rising number of insolvencies can be seen across a wide range
of sectors, with building and construction, industrial
manufacturing, leisure and hospitality, retail, and the food and
drink industry all witnessing increased activity, The Yorkshire
Post discloses.


[*] UK: Number of Administrations Up 50% in Third Quarter 2022
--------------------------------------------------------------
Business Sale reports that the number of companies falling into
administration increased 50% in Q3 2022, as UK businesses were
impacted by issues including rising inflation and supply chain
disruption.

According to Business Sale, Interpath Advisory, which revealed the
findings from its analysis of notices in The Gazette, also warned
that the pressure facing businesses has only increased since the
end of Q3.

From July to September 2022, 265 UK companies filed for
administration, compared to 176 during Q3 2021 and 243 in Q3 2020,
Business Sale discloses.  While administrations are yet to reach
pre-pandemic levels (with 401 administrations in Q3 2019), August
saw the highest monthly total of administrations (105) since March
2020, Business Sale notes.

A wide array of industries have been impacted by rising
insolvencies, with an increase in administrations seen in sectors
including construction, manufacturing, hospitality and retail,
Business Sale relates.

Many of these sectors are also especially vulnerable to the rising
cost of energy, with Blair Nimmo warning that insolvencies could
rise further as companies come under increasing pressure during Q4
and into 2023, Business Sale says.




===============
X X X X X X X X
===============

[*] BOOK REVIEW: Hospitals, Health and People
---------------------------------------------
Author: Albert W. Snoke, M.D.
Publisher: Beard Books
Softcover: 232 pages
List Price: $34.95
Order your personal copy today at
http://www.beardbooks.com/beardbooks/hospitals_health_and_people.html

Hospitals, Health and People is an interesting and very readable
account of the career of a hospital administrator and physician
from the 1930's through the 1980's, the formative years of today's
health care system. Although much has changed in hospital
administration and health care since the book was first published
in 1987, Dr. Snoke's discussion of the evolution of the modern
hospital provides a unique and very valuable perspective for
readers who wish to better understand the forces at work in our
current health care system.

The first half of Hospitals, Health and People is devoted to the
functional parts of the hospital system, as observed by Dr. Snoke
between the late 1930's through 1969, when he served first as
assistant director of the Strong Memorial Hospital in Rochester,
New York, and then as the director of the Grace-New Haven Hospital
in Connecticut. In these first chapters, Dr. Snoke examines the
evolution and institutionalization of a number of aspects of the
hospital system, including the financial and community
responsibilities of the hospital administrator, education and
training in hospital administration, the role of the governing
board of a hospital, the dynamics between the hospital
administrator and the medical staff, and the unique role of the
teaching hospital.

The importance of Hospitals, Health and People for today's readers
is due in large part to the author's pivotal role in creating the
modern-day hospital. Dr. Snoke and others in similar positions
played a large part in advocating or forcing change in our hospital
system, particularly in recognizing the importance of the nursing
profession and the contributions of non-physician professionals,
such as psychologists, hearing and speech specialists, and social
workers, to the overall care of the patient. Throughout the first
chapters, there are also many observations on the factors that are
contributing to today's cost of care. Malpractice is just one
example. According to Dr. Snoke, "malpractice premiums were
negligible in the 1950's and 1960's. In 1970, Yale-New Haven's
annual malpractice premiums had mounted to about $150,000." By the
time of the first publication of the book, the hospital's premiums
were costing about $10 million a year.

In the second half of Hospitals, Health and People, Dr. Snoke
addresses the national health care system as we've come to know it,
including insurance and cost containment; the role of the
government in health care; health care for the elderly; home health
care; and the changing role of ethics in health care. It is
particularly interesting to note the role that Senator Wilbur Mills
from Arkansas played in the allocation of costs of hospital-based
specialty components under Part B rather than Part A of the
Medicare bill. Dr. Snoke comments: "This was considered a great
victory by the hospital-based specialists. I was disappointed
because I knew it would cause confusion in working relationships
between hospitals and specialists and among patients covered by
Medicare. I was also concerned about potential cost increases. My
fears were realized. Not only have health costs increased in
certain areas more than anticipated, but confusion is rampant among
the elderly patients and their families, as well as in hospital
business offices and among physicians' secretaries." This aspect of
Medicare caused such confusion that Congress amended Medicare in
1967 to provide that the professional components of radiological
and pathological in-hospital services be reimbursed as if they were
hospital services under Part A rather than part of the co-payment
provisions of Part B.

At the start of his book, Dr. Snoke refers to a small statue,
Discharged Cured, which was given to him in the late 1940's by a
fellow physician, Dr. Jack Masur. Dr. Snoke explains the
significance the statue held for him throughout his professional
career by quoting from an article by Dr. Masur: "The whole question
of the responsibility of the physician, of the hospital, of the
health agency, brings vividly to mind a small statue which I saw a
great many years ago.it is a pathetic little figure of a man, coat
collar turned up and shoulders hunched against the chill winds,
clutching his belongings in a paper bag-shaking, tremulous,
discouraged. He's clearly unfit for work-no employer would dare to
take a chance on hiring him. You know that he will need much more
help before he can face the world with shoulders back and
confidence in himself. The statuette epitomizes the task of medical
rehabilitation: to bridge the gap between the sick and a job."

It is clear that Dr. Snoke devoted his life to exactly that
purpose. Although there is much to criticize in our current
healthcare system, the wellness concept that we expect and accept
today as part of our medical care was almost nonexistent when Dr.
Snoke began his career in the 1930's. Throughout his 50 years in
hospital administration, Dr. Snoke frequently had to focus on the
big picture and the bottom line. He never forgot the importance of
Discharged Cured, however, and his book provides us with a great
appreciation of how compassionate administrators such as Dr. Snoke
have contributed to the state of patient care today. Albert Waldo
Snoke was director of the Grace-New Haven Hospital in New Haven,
Connecticut from 1946 until 1969. In New Haven, Dr. Snoke also
taught hospital administration at Yale University and oversaw the
development of the Yale-New Haven Hospital, serving as its
executive director from 1965-1968. From 1969-1973, Dr. Snoke worked
in Illinois as coordinator of health services in the Office of the
Governor and later as acting executive director of the Illinois
Comprehensive State Health Planning Agency. Dr. Snoke died in April
1988.



                           *********


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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re-mailing and photocopying) is strictly prohibited without prior
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Information contained herein is obtained from sources believed to
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members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
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