/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/221108.mbx T R O U B L E D C O M P A N Y R E P O R T E R E U R O P E Tuesday, November 8, 2022, Vol. 23, No. 217 Headlines D E N M A R K KALLE GMBH: EUR145M Bank Debt Trades at 16% Discount F R A N C E ASSYSTEM TECHNOLOGIES: EUR494M Bank Debt Trades at 16% Discount CASINO GUICHARD: EUR1425M Bank Debt Trades at 18% Discount CASSINI SAS: EUR141M Bank Debt Trades at 17% Discount I C E L A N D LBI EHF: EUR240M Bank Debt Trades at 83% Discount LBI EHF: EUR450M Bank Debt Trades at 83% Discount I R E L A N D CAIRN CLO VI: Moody's Affirms B2 Rating on EUR8.7MM Cl. F-R Notes I T A L Y AZZURRA AEROPORTI: Moody's Alters Outlook on 'Ba1' CFR to Stable L U X E M B O U R G LSF10 XL BIDCO: EUR1.9B Bank Debt Trades at 20% Discount MALLINCKRODT INTERNATIONAL: $1.39B Debt Trades at 18% Discount MALLINCKRODT INTERNATIONAL: $369M Bank Debt Trades at 19% Discount NEPTUNE BIDCO SARL: EUR710M Bank Debt Trades at 17% Discount N E T H E R L A N D S CASPER DEBTCO BV: EUR196M Bank Debt Trades at 22% Discount KETER GROUP: Moody's Cuts CFR to Caa1 & Alters Outlook to Negative KIRK BEAUTY: EUR75M Bank Debt Trades at 17% Discount LEALAND FINANCE: $500M Bank Debt Trades at 47% Discount U N I T E D K I N G D O M AI MISTRAL: Moody's Upgrades CFR to Caa1, Outlook Remains Stable JEHU GROUP: Formally Goes Into Administration L1R HB FINANCE: EUR415M Bank Debt Trades at 25% Discount L1R HB FINANCE: GBP450M Bank Debt Trades at 24% Discount LBI EHF: EUR150M Bank Debt Trades at 83% Discount NOMAD FOODS: S&P Assigns 'BB-' Rating on $825MM Senior Term Loan B NORTHEY TECHNOLOGIES: Goes Into Administration ONE LIFE: Enters Administration Following New FCA Regulation ST GEORGES GARDENS: Owed Almost GBP50MM at Time of Administration WOLF TIMBER: Director Gets 9-Year Disqualification Order [*] UK: Winding-up Petitions Up in September 2022 to 398 - - - - - ============= D E N M A R K ============= KALLE GMBH: EUR145M Bank Debt Trades at 16% Discount ---------------------------------------------------- Participations in a syndicated loan under which Kalle GmbH is a borrower were trading in the secondary market around 84 cents-on-the-dollar during the week ended Fri., November 4, 2022, according to Bloomberg's Evaluated Pricing service data. The EUR145 million facility is a term loan. The loan is scheduled to mature on December 29, 2023. The loan is fully drawn and outstanding. Kalle GmbH provides food machinery equipment. The Company's country of domicile is Denmark. =========== F R A N C E =========== ASSYSTEM TECHNOLOGIES: EUR494M Bank Debt Trades at 16% Discount --------------------------------------------------------------- Participations in a syndicated loan under which Assystem Technologies Services SASU is a borrower were trading in the secondary market around 83.593 cents-on-the-dollar during the week ended Fri., November 4, 2022, according to Bloomberg's Evaluated Pricing service data. The EUR494 million facility is a term loan. The loan is scheduled to mature on September 28, 2024. The amount is fully drawn and outstanding. Assystem Technologies Services provides engineering services. The Company offers industrial processes development, embedded systems, software, aero structures, risk management, and supply chain solutions, as well as project management support, commissioning of production units, and consultancy services. The company's country of domicile is France. CASINO GUICHARD: EUR1425M Bank Debt Trades at 18% Discount ---------------------------------------------------------- Participations in a syndicated loan under which Casino Guichard Perrachon SA is a borrower were trading in the secondary market around 82.313 cents-on-the-dollar during the week ended Fri., November 4, 2022, according to Bloomberg's Evaluated Pricing service data. The EUR1425 million facility is a term loan. The loan is scheduled to mature August 31, 2025. The amount is fully drawn and outstanding. Casino Guichard-Perrachon SA operates a wide range of hypermarkets, supermarkets, and convenience stores. The Company's country of domicile is France. CASSINI SAS: EUR141M Bank Debt Trades at 17% Discount ----------------------------------------------------- Participations in a syndicated loan under which Cassini SAS is a borrower were trading in the secondary market around 83.285 cents-on-the-dollar during the week ended Fri., November 4, 2022, according to Bloomberg's Evaluated Pricing service data. The EUR141 million facility is a term loan. The loan is scheduled to mature on April 28, 2026. The amount is fully drawn and outstanding. Cassini SAS operates as a new holding company to acquire the entire equity capital from current parent Comete Holding SAS. The Company's country of domicile is France. ============= I C E L A N D ============= LBI EHF: EUR240M Bank Debt Trades at 83% Discount ------------------------------------------------- Participations in a syndicated loan under which LBI ehf is a borrower were trading in the secondary market around 17 cents-on-the-dollar during the week ended Fri., November 4, 2022, according to Bloomberg's Evaluated Pricing service data. The EUR240 million facility is a revolving loan that matured in 2010. LBI ehf. is a private limited liability company incorporated and domiciled in Iceland. LBI EHF: EUR450M Bank Debt Trades at 83% Discount ------------------------------------------------- Participations in a syndicated loan under which LBI ehf is a borrower were trading in the secondary market around 17 cents-on-the-dollar during the week ended Fri., November 4, 2022, according to Bloomberg's Evaluated Pricing service data. The EUR450 million facility is a term loan that matured in 2009. The loan was fully drawn and outstanding. LBI ehf is a private limited liability company incorporated and domiciled in Iceland. ============= I R E L A N D ============= CAIRN CLO VI: Moody's Affirms B2 Rating on EUR8.7MM Cl. F-R Notes ----------------------------------------------------------------- Moody's Investors Service has upgraded the ratings on the following notes issued by Cairn CLO VI DAC: EUR19,600,000 Class C-R Senior Secured Deferrable Floating Rate Notes due 2029, Upgraded to Aa1 (sf); previously on March 11, 2022 Upgraded to Aa2 (sf) EUR17,150,000 Class D-R Senior Secured Deferrable Floating Rate Notes due 2029, Upgraded to A2 (sf); previously on March 11, 2022 Upgraded to A3 (sf) Moody's has also affirmed the ratings on the following notes: EUR212,000,000 Class A-R (Current outstanding balance EUR70,772,600) Senior Secured Floating Rate Notes due 2029, Affirmed Aaa (sf); previously on March 11, 2022 Affirmed Aaa (sf) EUR42,100,000 Class B-R Senior Secured Floating Rate Notes due 2029, Affirmed Aaa (sf); previously on March 11, 2022 Affirmed Aaa (sf) EUR24,000,000 Class E-R Senior Secured Deferrable Floating Rate Notes due 2029, Affirmed Ba2 (sf); previously on March 11, 2022 Affirmed Ba2 (sf) EUR8,700,000 Class F-R Senior Secured Deferrable Floating Rate Notes due 2029, Affirmed B2 (sf); previously on March 11, 2022 Affirmed B2 (sf) Cairn CLO VI DAC, issued in July 2016 and refinanced in July 2018, is a collateralised loan obligation (CLO) backed by a portfolio of mostly high-yield senior secured European and US loans. The portfolio is managed by Cairn Loan Investments LLP. The transaction's reinvestment period ended in July 2020. RATINGS RATIONALE The rating upgrades on the Class C-R and D-R Notes are primarily a result of the deleveraging of the senior notes following amortisation of the underlying portfolio since the last rating action in March 2022. The Class A-R Notes have paid down by approximately EUR24.22 million (25.5%) since the last rating action in March 2022 and EUR141.2 million (66.6%) since closing. As a result of the deleveraging, over-collateralisation (OC) has increased across the capital structure. According to the trustee report dated September 2022 [1] the Class A/B, Class C, Class D, Class E and Class F OC ratios are reported at 180.55%, 153.84%, 136.20%, 117.38% and 111.78% compared to January 2022 [2] levels of 158.78%, 141.12%, 128.60%, 114.40% and 109.99%, respectively. The key model inputs Moody's uses in its analysis, such as par, weighted average rating factor, diversity score and the weighted average recovery rate, are based on its published methodology and could differ from the trustee's reported numbers. In its base case, Moody's used the following assumptions: Performing par and principal proceeds balance: EUR199.57m Defaulted Securities: EUR2,945,635 Diversity Score: 31 Weighted Average Rating Factor (WARF): 3195 Weighted Average Life (WAL): 3.60 years Weighted Average Spread (WAS) (before accounting for Euribor floors): 3.66% Weighted Average Coupon (WAC): 3.64% Weighted Average Recovery Rate (WARR): 45.31% Par haircut in OC tests and interest diversion test: 1.26% The default probability derives from the credit quality of the collateral pool and Moody's expectation of the remaining life of the collateral pool. The estimated average recovery rate on future defaults is based primarily on the seniority of the assets in the collateral pool. In each case, historical and market performance and a collateral manager's latitude to trade collateral are also relevant factors. Moody's incorporates these default and recovery characteristics of the collateral pool into its cash flow model analysis, subjecting them to stresses as a function of the target rating of each CLO liability it is analysing. Methodology Underlying the Rating Action: The principal methodology used in these ratings was "Moody's Global Approach to Rating Collateralized Loan Obligations" published in December 2021. Counterparty Exposure: The rating action took into consideration the notes' exposure to relevant counterparties, such as account bank and swap provider, using the methodology "Moody's Approach to Assessing Counterparty Risks in Structured Finance" published in June 2022. Moody's concluded the ratings of the notes are not constrained by these risks. Factors that would lead to an upgrade or downgrade of the ratings: The rated notes' performance is subject to uncertainty. The notes' performance is sensitive to the performance of the underlying portfolio, which in turn depends on economic and credit conditions that may change. Additional uncertainty about performance is due to the following: Portfolio amortisation: The main source of uncertainty in this transaction is the pace of amortisation of the underlying portfolio, which can vary significantly depending on market conditions and have a significant impact on the notes' ratings. Amortisation could accelerate as a consequence of high loan prepayment levels or collateral sales by the collateral manager or be delayed by an increase in loan amend-and-extend restructurings. Fast amortisation would usually benefit the ratings of the notes beginning with the notes having the highest prepayment priority. Recovery of defaulted assets: Market value fluctuations in trustee-reported defaulted assets and those Moody's assumes have defaulted can result in volatility in the deal's over-collateralisation levels. Further, the timing of recoveries and the manager's decision whether to work out or sell defaulted assets can also result in additional uncertainty. Moody's analysed defaulted recoveries assuming the lower of the market price or the recovery rate to account for potential volatility in market prices. Recoveries higher than Moody's expectations would have a positive impact on the notes' ratings. In addition to the quantitative factors that Moody's explicitly modelled, qualitative factors are part of the rating committee's considerations. These qualitative factors include the structural protections in the transaction, its recent performance given the market environment, the legal environment, specific documentation features, the collateral manager's track record and the potential for selection bias in the portfolio. All information available to rating committees, including macroeconomic forecasts, input from other Moody's analytical groups, market factors, and judgments regarding the nature and severity of credit stress on the transactions, can influence the final rating decision. ========= I T A L Y ========= AZZURRA AEROPORTI: Moody's Alters Outlook on 'Ba1' CFR to Stable ---------------------------------------------------------------- Moody's Investors Service has changed the outlook on Azzurra Aeroporti S.p.A. (Azzurra) and Aeroports de la Cote d'Azur (ACA) to stable from negative. Concurrently, Azzurra's Ba1 long-term corporate family rating, Ba2-PD probability of default rating and Ba1 senior secured ratings have been affirmed, as has ACA's Baa2 long-term issuer rating and Baa2 senior unsecured ratings. RATINGS RATIONALE The rating action reflects Moody's expectation that the continued recovery in traffic will allow Azzurra group to improve operating and financial performance with metrics trending towards levels commensurate with the current Ba1 CFR, namely a funds from operations (FFO)/debt ratio above 8%. It also reflects the recent approval of a 4.4% average tariff increase for 2023 (effective from November 2022) by the Transport Regulatory Authority (ART), which will allow ACA to partially mitigate the expected increase in costs due to high inflation and rising energy prices. In addition, the stable outlook incorporates Moody's expectation that the group will continue to implement measures aimed at restoring its financial profile and maintaining a solid liquidity position. Following the severe reduction in passenger volumes during 2020-21, traffic at Nice airport continued to rebound in the first nine months of 2022, recovering to around 82% of the 2019 level, which is above the average traffic recovery registered for European airports. This is sustained by strong pent-up travel demand, the attractiveness of Nice as a prime tourist destination in Europe and the airport's traffic profile, which benefits from a high share of domestic and EU passengers (82% of total traffic in 2019). Moody's anticipates that ACA's passenger traffic will be around 18% below pre-pandemic levels in 2022 and volumes will fully recover by around 2024. Nevertheless, there remain uncertainties about the traffic recovery given deteriorating macroeconomic conditions in Europe. In addition, rising inflationary pressures may limit the improvement in ACA's operating profit over the coming years. Overall, at the Azzurra level there is limited flexibility to deal with downside scenarios given its highly leveraged profile and the requirement to reduce consolidated leverage to meet financial covenants, such that net debt/EBITDA should be below 7.5x by year-end 2023. Nevertheless, the credit profile of Azzurra is also underpinned by Moody's expectation that shareholders will provide adequate and timely support to the group to cure any potential covenant breach. The strengthening of Azzurra's credit metrics will be assisted by revenue and cash flow generation because debt levels are not expected to decrease over the coming years given ACA's investment programme. This improvement will also be supported by the 4.4% average annual tariff increase that ACA has recently obtained and will be effective from November this year. Although this increase was deemed in line with the principle of moderation embedded in the regulatory framework, ART noted in its decision that the return on invested capital on ACA's regulated perimeter is still negative for the year. Moody's expects that ACA will be able to increase tariffs in the range of 3%-5% per annum, in order to restore its profitability to pre-coronavirus levels over the next three to five years. Overall, the current Ba1 rating of Azzurra reflects (1) the strong business profile of Nice airport as an important gateway to Cote d'Azur, with limited competition for air travel; (2) the high proportion of origin and destination passengers and diversified carrier base; (3) a significant proportion of leisure traffic and short-haul flights, predominantly domestic and from other European countries; (4) an expectation of a reduction in the group's leverage to the levels commensurate with the current rating by year-end 2024; and (5) an absence of interest rate risk as most of the group's debt is fixed-rate. The senior secured rating of Azzurra further takes account of the features of the debt documentation, which limits Azzurra's ability to upstream cash to its shareholders subject to leverage tests, providing for some de-linkage from the credit quality of Atlantia S.p.A. (Ba1 stable), the majority shareholder of Azzurra. These strengths are partially offset by (1) the significant leverage at the Azzurra level and limited headroom to the Azzurra debt default covenants; and (2) a significant presence of minority shareholders at ACA, which creates cash leakage from the group. The current Baa2 issuer rating of ACA reflects its stronger underlying financial profile with a limited amount of debt at the ACA level, ACA's closer proximity to the group's cash flows compared to Azzurra, and Moody's expectation that ACA's shareholders will continue to allow a prudent financial policy and will target the strengthening of the business over the long term. However, ACA's rating is constrained by the overall credit quality of the Azzurra group, given absence of specific creditor protection features that would fully isolate ACA from the wider group. A CFR is an opinion on the expected loss associated with the debt obligations of a group of companies assuming that it had one single class of debt and is a single consolidated legal entity. The CFR assigned to Azzurra consolidates the legal and financial obligations of the group and reflects the structural features of Azzurra's debt structure. Azzurra's probability of default rating of Ba2-PD is one notch below the CFR, reflecting a low family-wide loss given default, in line with Moody's standard assumptions for infrastructure and utility companies. LIQUIDITY AND DEBT COVENANTS As of June 2022, the group's combined liquidity was around EUR133 million, composed of EUR61 million of cash and around EUR60 million of undrawn amortising bank loans expiring between 2036-2037 at the ACA level, and EUR13 million of cash at Azzurra. In addition, as required under the terms of Azzurra's bonds, the company maintains a letter of credit from an investment grade counterparty equal to the next six-month's worth of interest payments. Given that the group does not have any significant debt maturities until May 2024, when Azzurra's EUR360 million bond is due to expire, Moody's considers its liquidity position as adequate to cover all cash requirements until at least December 2023. Azzurra's debt documentation includes a step-down net debt/EBITDA financial covenant with an initial testing date of December 2023. Depending on the actual traffic recovery and EBITDA generation in the next year, there is a risk of the company breaching its covenant level in December 2023. The current rating assumes that the group will take actions in order to avoid any debt acceleration should this occur. ACA's debt documentation also includes a set of financial covenants, which were waived during the 2020-2021 period due to the impact of the coronavirus crisis. The waiver agreement has not been extended beyond June 2022 as financial ratios are expected to be within the required covenant levels. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Although not considered likely given weak macroeconomic prospects, ACA and Azzurra's ratings could be upgraded in the scenario of a stronger-than-expected traffic recovery and a favourable operating environment, such that the group's FFO/debt were to remain persistently above 10%, coupled with a solid liquidity profile. ACA and Azzurra's ratings could be downgraded if (1) the group consolidated financial profile weakens, so that Azzurra's FFO/debt remains materially below 8%; (2) ACA is not able to obtain yearly tariff increases in order to restore its profitability over the medium term; (3) there is a risk of covenant breaches within the group without adequate mitigating measures in place; or (4) the group's liquidity profile deteriorates. PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Privately Managed Airports and Related Issuers published in September 2017. COMPANY PROFILE Azzurra Aeroporti S.p.A. is the holding company of Aeroports de la Cote d'Azur, whose main assets are Nice and Cannes Mandelieu airports operated under a concession expiring on December 31, 2044, and Saint Tropez airport (held freehold). Azzurra is owned by a consortium comprising Atlantia S.p.A. (52.7%), Aeroporti di Roma S.p.A. (7.8%), EDF Invest (19.4%) and the Principality of Monaco (20.1%). =================== L U X E M B O U R G =================== LSF10 XL BIDCO: EUR1.9B Bank Debt Trades at 20% Discount -------------------------------------------------------- Participations in a syndicated loan under which LSF10 XL Bidco is a borrower were trading in the secondary market around 79.8 cents-on-the-dollar during the week ended Fri., November 4, 2022, according to Bloomberg's Evaluated Pricing service data. The EUR1.9 billion facility is a term loan. The loan is scheduled to mature on April 9, 2028. The loan is fully drawn and outstanding. LSF10 XL Bidco was formed by Lone Star Funds to facilitate its acquisition of the Xella group from PAI Partners SAS and investment funds managed by the merchant banking division of Goldman Sachs. The Company's country of domicile is Luxembourg. MALLINCKRODT INTERNATIONAL: $1.39B Debt Trades at 18% Discount -------------------------------------------------------------- Participations in a syndicated loan under which Mallinckrodt International is a borrower were trading in the secondary market around 81.8 cents-on-the-dollar during the week ended Fri., November 4, 2022, according to Bloomberg's Evaluated Pricing service data. The US$1.39 billion facility is a term loan. The loan is scheduled to mature on September 30, 2027. About US$1.38 billion of the loan is drawn and outstanding. Mallinckrodt International manufactures and distributes pharmaceutical products. The Company's country of domicile is Luxembourg. MALLINCKRODT INTERNATIONAL: $369M Bank Debt Trades at 19% Discount ------------------------------------------------------------------ Participations in a syndicated loan under which Mallinckrodt International is a borrower were trading in the secondary market around 81 cents-on-the-dollar during the week ended Fri., November 4, 2022, according to Bloomberg's Evaluated Pricing service data. The US$369 million facility is a term loan. The loan is scheduled to mature on September 30, 2027. About US$367 million of the loan is drawn and outstanding. Mallinckrodt International manufactures and distributes pharmaceutical products. The Company's country of domicile is Luxembourg. NEPTUNE BIDCO SARL: EUR710M Bank Debt Trades at 17% Discount ------------------------------------------------------------ Participations in a syndicated loan under which Neptune Bidco SARL is a borrower were trading in the secondary market around 82.9 cents-on-the-dollar during the week ended Fri., November 4, 2022, according to Bloomberg's Evaluated Pricing service data. The EUR710 million facility is a term loan. The loan is scheduled to mature on February 28, 2027. The loan is fully drawn and outstanding. The Company's country of domicile is Luxembourg. ===================== N E T H E R L A N D S ===================== CASPER DEBTCO BV: EUR196M Bank Debt Trades at 22% Discount ---------------------------------------------------------- Participations in a syndicated loan under which Casper Debtco BV is a borrower were trading in the secondary market around 78.4 cents-on-the-dollar during the week ended Fri., November 4, 2022, according to Bloomberg's Evaluated Pricing service data. The EUR196 million facility is a term loan. The loan is scheduled to mature on September 19, 2026. The Company's country of domicile is The Netherlands. It is engaged in the breeding, propagation, and commercialization of flowers. KETER GROUP: Moody's Cuts CFR to Caa1 & Alters Outlook to Negative ------------------------------------------------------------------ Moody's Investors Service has downgraded to Caa1 from B3 the corporate family rating of Keter Group B.V. ("Keter" or "the company") as well as its probability of default rating to Caa1-PD from B3-PD. Concurrently, Moody's has downgraded to Caa1 from B3 the ratings on the senior secured term loans B (TLB) due October 2023 and on the senior secured revolving credit facility (RCF) due July 2023 borrowed by the company. The outlook on the ratings has been revised to negative from stable. RATINGS RATIONALE Keter's CFR downgrade reflects heightened refinancing risks in view of the upcoming maturity of its EUR1.205 billion TLB due in October 2023. While Moody's understands that the company is working on a refinancing plan with the aim to complete it in the coming months, the current volatile capital market conditions and deterioration in the broader macroeconomic environment are making the refinancing more challenging and potentially more costly, given the company's very high leverage and the rising interest rates. Keter's delay in refinancing its existing bank loans within 12 months of these becoming due has resulted in a weak liquidity profile. The downgrade also reflects the weakening macroeconomic environment and Moody's expectations that the company's operating performance will remain weak over the next 12 to 18 months. Keter's YTD August 2022 sales increased by 13% on the back of price increases and strong demand in the first half of the year. However, the company's EBITDA declined by 15% in the same period as a result of inflationary pressures. Despite price increases and cost savings, Moody's expects that the improvement in margins in the second half of 2022 will be lower than initially anticipated, as persistent inflation challenges both topline and expense levels. Visibility on a potential recovery in 2023 remain modest although Moody's notes that lower resin prices could alleviate some margin pressure. Contraction on consumer discretionary spending in 2023 will challenge the company's ability to improve its credit metrics. Moody's now expects leverage to remain very high at around 8.0x in 2022 and only reducing below 7.0x by 2024. Keter's Caa1 rating continues to reflect (1) its leading market positions in the global resin-based products industry including consumer furniture, tool storage and home storage; (2) good geographic diversification of sales across a number of countries in Europe, North America and Israel; and (3) its strong product diversification and a broad distribution channel mix, underpinned by long-standing relationships with major retail chains. The rating is constrained by Keter's (1) exposure to discretionary spending that is likely to contract at times of macroeconomic recession; (2) the weak Moody's adjusted EBIT-to-interest cover ratio of below 1.0x; (3) the significant exposure to polypropylene prices, despite the progressively higher use of recycled resin, which creates earnings volatility; (4) Moody's expectation that FCF will be negative in 2022; (5) very high leverage of around 8.0x in 2022, which questions the sustainability of the capital structure in the current rising interest rate environment; and (6) weak liquidity profile in light of upcoming debt maturities within the next 12 months. ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS Governance risk considerations are material to the rating action. Keter's delay in refinancing its existing bank loans within 12 months of these becoming due results in a weak liquidity profile. Liquidity management has been one of the drivers of the rating action and results in the company's Financial Strategy and Risk Management score moving to 5 from 4, the governance issuer profile score (IPS) to G-5 from G-4 and Credit Impact Score moving to CIS-5 from CIS-4. LIQUIDITY Keter's liquidity is weak in light of its upcoming debt maturities, including the EUR1.205 billion TLB which is due in October 2023. In addition the company relies on uncommitted short-term loans from local banks, with an outstanding amount of EUR63 million as at August 2022. As of October 2022, the company had EUR131 million of cash and cash equivalents, a fully undrawn EUR102 million revolving credit facility due in July 2023, and access to a EUR31 million credit facility secured by trade receivables and inventory. The company's expected cash requirements include significant intra-year working capital swings due to business seasonality, and approximately EUR50-60 million of annual capex (excl. the portion related to the lease adjustment). STRUCTURAL CONSIDERATIONS The senior secured credit facilities, i.e. the EUR1,205 million TLB and the EUR102 million RCF, are rated in line with the Caa1 CFR, as these represent the vast majority of Keter's financial indebtedness. The Caa1-PD PDR reflects the use of a 50% family recovery rate as is customary for capital structures with bank debt only and limited covenant protection. While Moody's notes the presence of a PIK instrument outside of the restricted group (the immediate parent of the top company within the restricted group capitalises its ownership of Keter via common equity), Moody's does not include this instrument in its debt and leverage calculations. RATIONALE FOR NEGATIVE OUTLOOK Although Moody's understands that the company is working on a refinancing plan, the negative outlook reflects Moody's view that volatility in financial markets and ongoing deterioration in consumer spending will make the company's ability to refinance its debt maturities more challenging over the coming months, particularly given its high leverage in a rising interest rate environment. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Given the negative outlook, there is limited upward pressure on the rating. However, upward pressure could develop if the company addresses the refinancing of its upcoming maturities with a manageable cost of debt that makes its capital structure more sustainable, its Moody's adjusted gross debt-to-EBITDA ratio declines comfortably below 7.0x and it generates consistently positive free cash flow while maintaining an overall adequate liquidity. Keter's rating could be lowered if the company fails to refinance its 2023 debt maturities in the coming months, or if the company pursues a debt restructuring resulting in higher losses for creditors than those currently assumed in the current Caa1 rating. LIST OF AFFECTED RATINGS Downgrades: Issuer: Keter Group B.V. Probability of Default Rating, Downgraded to Caa1-PD from B3-PD LT Corporate Family Rating, Downgraded to Caa1 from B3 Senior Secured Bank Credit Facility, Downgraded to Caa1 from B3 Outlook Actions: Issuer: Keter Group B.V. Outlook, Changed To Negative From Stable PRINCIPAL METHODOLOGY The principal methodology used in these ratings was Consumer Durables published in September 2021. COMPANY PROFILE Keter Group B.V. (Keter) is the holding company, based in the Netherlands, for a group of entities involved in the manufacturing and distribution of a variety of resin-based consumer goods. Keter's key products include garden furniture and home storage solutions. Keter is majority owned by BC Partners since 2016, while minority shareholders include funds advised by Private Equity firm PSP and the original founders, the Sagol family. In 2021, Keter Group B.V. generated EUR1.6 billion of revenues and EUR228 million of (company-reported) EBITDA. KIRK BEAUTY: EUR75M Bank Debt Trades at 17% Discount ---------------------------------------------------- Participations in a syndicated loan under which Kirk Beauty is a borrower were trading in the secondary market around 83 cents-on-the-dollar during the week ended Fri., November 4, 2022, according to Bloomberg's Evaluated Pricing service data. The EUR75 million facility is a term loan. The loan is scheduled to mature on August 4, 2026. The loan is fully drawn and outstanding. Kirk Beauty Netherlands BV is a unit of Kirk Beauty One GmbH, which provides cosmetic and beauty products. The Company's country of domicile is The Netherlands. LEALAND FINANCE: $500M Bank Debt Trades at 47% Discount ------------------------------------------------------- Participations in a syndicated loan under which Lealand Finance Co is a borrower were trading in the secondary market around 53 cents-on-the-dollar during the week ended Fri., November 4, 2022, according to Bloomberg's Evaluated Pricing service data. The US$500 million facility is a term loan. The loan is scheduled to mature on June 30, 2025. The loan is fully drawn and outstanding. The Company's country of domicile is The Netherlands. It is an affiliate of Chicago Bridge & Iron Company N.V. =========================== U N I T E D K I N G D O M =========================== AI MISTRAL: Moody's Upgrades CFR to Caa1, Outlook Remains Stable ---------------------------------------------------------------- Moody's Investors Service has upgraded the corporate family rating of AI Mistral Holdco Ltd's (V.Group) to Caa1 from Caa2 and the probability of default rating to Caa1-PD from Caa2-PD. Moody's also upgraded V.Group's senior secured bank credit facilities issued by AI Mistral (Luxembourg) Subco S.ar.l. to Caa1 from Caa2. The rating outlook on both entities remains stable. RATINGS RATIONALE The rating action reflects V.Group's track record of improving operating results over recent quarters underpinned by early signs of success of the new strategy and leading to reducing leverage with expectations of further deleveraging going forward. These positives are counterbalanced by the upcoming maturities in December 2023 and March 2024, and the broadly anticipated macroeconomic slowdown globally. Still, Moody's expects that V.Group's offerings of ship management and related services will be largely resistant to the business cycle as they address ongoing needs of shipowners independent of economic variability. With the appointment of a new executive team in 2020, V.Group refocused its efforts on providing a wide range of services to existing customers rather than trying to increase the number of vessels under management which had been the previous strategy. Positively, the company has been able to prove that this strategy was working over recent quarters as demonstrated by EBITDA growth despite relatively flat number of vessels under management. Still, the digital and ESG components of the new service offering remain to be monetised. As a result of both the revised strategy which drove an increase in EBITDA/vessel and a series of cost savings initiatives implemented since 2020, V.Group's performance has improved materially through the third quarter of 2022 with revenue rising to $650 million for the twelve months ending September 2022 as compared to $600 million for 2021. The company also reported an EBITDA increase to $87 million from $66 million over the same period. Notably, the number of ships under management has remained largely stable at around 580. Corresponding to the operational improvements, V.Group's credit profile has strengthened with Moody's adjusted leveraged measured as total debt/EBITDA reducing to 9.2x for the twelve months ending June 2022 from 15.6x in 2021. The agency expects V.Group's leverage to decline further to below 7.0x for 2022 and continue reducing in 2023. The company's coverage measured by EBITA/interest expense also improved to 1.2x from 0.7x over the same period. Moody's notes that the company's debt is carrying floating interest rates that could increase its interest costs upon hedge expiration; however, the agency expects new hedges to be put in place. Further, Moody's acknowledges that its term loans C-1 and C-2 are paying PIK interest reducing the current debt servicing burden. Still, over time, the PIK interest will increase the company's debt going forward. LIQUIDITY V.Group's liquidity is weak: the company is facing refinancing risk with the RCF and the $24.7 mm fully drawn acquisition facility maturing on the December 29, 2023 and the term loans (TLB and TLC-1) maturing in March 2024. Sources of liquidity include $52.1 mm of cash on balance sheet as of September 30, 2022 and an undrawn $57.5 mm RCF ($50 mm cash and $7.5 mm guarantee sub-facility). The company's capex is limited (primarily focused on digital development), and Moody's expects V.Group to generate positive free cash flows over the next 12 to 18 months. . RATIONALE FOR STABLE OUTLOOK The stable rating outlook reflects Moody's expectation that V.Group will be able, at a minimum, to maintain its recently strengthened credit metrics over the coming quarters. The stable outlook also reflects the expectation that the company will address its upcoming maturities over the next few months. FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS Positive rating momentum would require the company to address its upcoming maturities at the end of 2023 and in the first quarter of 2024 well in advance of their due dates, as well as to continue demonstrating robust performance observed in recent quarters. More quantitatively, Moody's would expect V.Group's leverage, as measured by Moody's-adjusted debt/EBITDA, declining sustainably below 7.0x while its EBIT/cash interest is sustained above 1.0x. Negative rating pressure could occur from failure to resolve the upcoming maturities and performance deterioration manifested in any leverage increases. STRUCTURAL CONSIDERATIONS V.Group's capital structure includes a $488 million (outstanding amount) first lien facility, a $57.5 million undrawn revolving credit facility (RCF) and a $24.7 million acquisition facility (ACF), as well as a $50 million term loan C-1 and a $25 million term loan C-2. Term loans C-1 and C-2 carry PIK interest. The principal methodology used in these ratings was Business and Consumer Services published in November 2021. AI Mistral Holdco Ltd (V.Group), headquartered in London, UK, is a provider of ship management services and supplementary marine services, including technical, staff management and commercial services across cargo shipping, cruise, energy and defence sectors, with reported revenue of around $600 million in 2021. JEHU GROUP: Formally Goes Into Administration --------------------------------------------- Sion Barry at BusinessLive reports that one of Wales' oldest construction and property development firms, Jehu, has formally gone into administration. Last month, the Bridgend-based business, run and owned by the Jehu family and which dates back four generations to the 1930s, announced its intention to enter administration in a move that resulted in 103 staff being made redundant with immediate effect, BusinessLive relates. Now formal administration procedures have commenced for Jehu Group, Jehu Project Services and Waterstone Homes. Huw Powell, Katrina Orum and Paul Wood of insolvency firm Begbies are joint administrators, BusinessLive discloses. It is not yet clear what creditors, if anything, will get back from the sale of assets, BusinessLive notes. The directors of Jehu Civils, Waterstone Estates and Abode Waterstone are currently collating information and seeking advice from Begbies Traynor, BusinessLive states. It is anticipated that these companies will take steps to proceed to creditors' voluntary liquidation. No other group companies are currently proposed to enter any form of insolvency, according to BusinessLive. Jehu, as cited by BusinessLive, said its financial position had been adversely impacted by entering into fixed-price construction contracts prior to the pandemic with profit margins subsequently wiped out by high construction sector inflationary pressure. Jehu was delivering construction and development projects for housing associations and local authorities in Wales and the south west of England. Jehu Project Services had 15 live contracts with a total remaining value in excess of GBP100 million, BusinessLive states. According to BusinessLive, while clients affected should be able to find other contractors to complete outstanding Jehu construction work, they are faced with having to pay more compared to agreements struck with the Bridgend-based firm. The directors of Jehu Civils, Waterstone Estates and Abode Waterstone are currently collating information and seeking advice from Begbies Traynor. It is anticipated that these companies will take steps to proceed to creditors' voluntary liquidation in the coming days, BusinessLive notes. L1R HB FINANCE: EUR415M Bank Debt Trades at 25% Discount -------------------------------------------------------- Participations in a syndicated loan under which L1R HB Finance is a borrower were trading in the secondary market around 75cents-on-the-dollar during the week ended Fri., November 4, 2022, according to Bloomberg's Evaluated Pricing service data. The EUR415 million facility is a term loan. The loan is scheduled to mature on August 31, 2024. The loan is fully drawn and outstanding. L1R HB Finance Limited retails food supplements. The Company's country of domicile is Jersey. L1R HB FINANCE: GBP450M Bank Debt Trades at 24% Discount -------------------------------------------------------- Participations in a syndicated loan under which L1R HB Finance is a borrower were trading in the secondary market around 76 cents-on-the-dollar during the week ended Fri., November 4, 2022, according to Bloomberg's Evaluated Pricing service data. The GBP450 million facility is a term loan. The loan is scheduled to mature on August 31, 2024. The loan is fully drawn and outstanding. L1R HB Finance Limited retails food supplements. The Company's country of domicile is Jersey. LBI EHF: EUR150M Bank Debt Trades at 83% Discount ------------------------------------------------- Participations in a syndicated loan under which LBI ehf is a borrower were trading in the secondary market around 17 cents-on-the-dollar during the week ended Fri., November 4, 2022, according to Bloomberg's Evaluated Pricing service data. The EUR150 million facility is a revolving loan that matured in 2009. LBI ehf. is a private limited liability company incorporated and domiciled in Iceland. NOMAD FOODS: S&P Assigns 'BB-' Rating on $825MM Senior Term Loan B ------------------------------------------------------------------ S&P Global Ratings assigned its 'BB-' issue rating to the proposed $825 million senior term loan B (USD TLB; due 2029) that will be issued by Nomad Foods Lux S.à r.l., a fully owned subsidiary of Nomad Foods Ltd. (BB-/Stable/--). S&P said, "The recovery rating on the proposed USD TLB is '3', reflecting our expectation of meaningful recovery prospects (50%-70%; rounded estimate: 65%) in the event of payment default. The large amount of senior secured debt in the capital structure constrains the recovery rating. "The new senior loan will rank pari passu with all present and future senior secured debt. We understand Nomad Foods Ltd. will use most of the proceeds from the proposed transaction to refinance the existing EUR819 million equivalent TLB (due May 2024) and for other general corporate purposes. Furthermore, we understand the group will hedge its interest rate and currency exposure on the new debt. "We expect S&P Global Ratings-adjusted debt to EBITDA will gradually improve to 4.5x-5.0x in 2023 from the tight headroom currently, which supports our ratings on Nomad Foods. In 2023, we forecast revenue for the group to grow by about 1%-2%, with price increases just offsetting volume decline. We foresee an adjusted EBITDA margin of 16.0%-16.5%, with positive free operating cash flow generation rebounding to EUR180 million- EUR200 million." NORTHEY TECHNOLOGIES: Goes Into Administration ---------------------------------------------- Hannah Baker at BusinessLive reports that a historic pump manufacturer in Dorset has fallen into administration. Poole-based Northey Technologies specialises in the development, design and manufacture of dry and oil-free rotary compression and vacuum pumps, BusinessLive discloses. Business advisory firm Quantuma has been appointed as administrators of the business, BusinessLive relays, citing public records site The Gazette. Northey Technologies takes its name from founder and inventor AJ Northey who invented the Hook & Claw device as a rotary engine in the 1920s, adapting it as a dry vacuum pump and compressor in the 1930s. ONE LIFE: Enters Administration Following New FCA Regulation ------------------------------------------------------------ Lewis Catchpole at Funeral Service Times reports that One Life Funeral Planning Ltd (OLFP) has appointed Andrew Watling and Kelly Mitchell, insolvency practitioners of business advisory firm Quantuma, as joint administrators. Incorporated in December 2020, Sheffield-based OLFP offered around 14,000 customers a variety of funeral and cremation plans on both a prepaid and payment by instalment basis. Businesses operating in the pre-paid funeral plan sector became subject to FCA regulation on July 29, 2022, and OLFP were one of a number of providers who were unsuccessful in obtaining FCA approval, Funeral Service Times notes. The regulations allowed unsuccessful providers to continue to trade on a limited basis -- fulfilling existing plans, but unable to sell new plans -- until October 31, 2022, while efforts could be made to re-transfer plans to a new, authorised provider, Funeral Service Times states. According to Funeral Service Times, OLFP directors have been working with Quantuma advisers to enable them to comply with FCA requirements to wind down operations and seek to transfer their customers' plans to an alternative authorised plan provider in an orderly manner. Having been unsuccessful in transferring the plans before the October 31, deadline, OLFP has appointed administrators, which it said allows these efforts to continue for a limited time, Funeral Service Times relays. Despite the administration, the administrators will be able to continue to collect instalment payments and arrange funerals in the event that any customers die before a transfer can be completed, Funeral Service Times notes. OLFP operated a Trust fund, into which customer payments were invested. All instalments paid after the date of administration will be ring-fenced and will be refunded in full to customers in the event that a transfer to an authorised funeral plan provider does not proceed, Funeral Service Times disclsoes. OLFP is one of a number of providers in the sector to have entered a formal insolvency process as a result of their failure to obtain FCA regulation, and the second that Quantuma has been instructed over, following their appointment as liquidators of Not For Profit Funerals Limited, in September, Funeral Service Times states. ST GEORGES GARDENS: Owed Almost GBP50MM at Time of Administration ----------------------------------------------------------------- Jon Robinson at BusinessLive reports that almost GBP50 million was owed by the DeTrafford company behind an 11-storey apartment building in Manchester when it entered administration, it has been revealed. St George's Gardens was completed in Spinners Way towards the end of 2020 and features 138 apartments. A total of 127 of the one and two-bedroom flats have already been sold, BusinessLive notes. Administrator BDO is currently seeking buyers for the remaining 11, BusinessLive states. The company owns the remaining 11 apartments which are valued at around GBP2.8 million in total. It also owns a ground floor commercial unit at the development which is valued at GBP150,000. The wider DeTrafford Group is not impacted by the administration of St Georges Gardens Ltd, which it entered into on Sept. 5, according to BusinessLive. Now, a newly-filed document with Companies House has revealed how St Georges Gardens Ltd fell into administration and how much it owed to creditors, BusinessLive relates. St Georges Gardens Ltd was incorporated in April 2015 and is owned and controlled by DeTrafford CEO Gary Jackson. The company is a special purpose vehicle (SPV) which was created for the development of St Georges Gardens. The business does not have any employees. Maslow was owed around GBP11 million when St Georges Gardens Ltd entered administration while Daiwa Capital Markets Europe was owed GBP29.9 million, BusinessLive relays. The document also shows that unsecured creditors were owed more than GBP4.2 million, BusinessLive discloses. BDO, as cited by BusinessLive, said that, based on current information, it does not anticipate that there will be enough funds to distribute to unsecured creditors. The BDO document confirms that GBP2.4 million was owed to St Georges Gardens Ltd by DeTrafford Construction Limited, GBP93,000 by DeTrafford Great Jackson Street Limited and GBP150,000 by DeTrafford Wavelength Ltd, which is in administration, BusinessLive notes. According to BusinessLive, on the events leading up to the firm entering administration, BDO said: "During the Coronavirus pandemic, the company faced a number of delays, cost increases and supply change issues, which negatively impacted the business and the wider DeTrafford group. "In addition, the wider DeTrafford group had previously faced severe delays relating to a separate development following the failure of the main contractor, which resulted in Signiant resources and management time being incurred to resolve the position. "In addition, there were a number of errors with the design of the building which required correction, which led to construction delays and further increased costs. "The Coronavirus pandemic also resulted in an inability to show units to potential purchasers and as such resulted in a fall in demand for the completed units during the periods of national lockdowns." WOLF TIMBER: Director Gets 9-Year Disqualification Order -------------------------------------------------------- The Insolvency Service on Nov. 2 disclosed that Muhammad Rais, 42, from Leicester, has been disqualified for 9 years for exaggerating the turnover of his takeaway business to claim GBP31,000 of Bounce Back Loans to which the company was not entitled. And Lee Mankelow, 42, of Arnold, Nottinghamshire has been disqualified as a director for 6 years, after claiming GBP50,000 from the loan scheme to support his timber supply business through the pandemic, before paying it all to a former director of the company. The two directors received the money as part of a government scheme to support businesses that were facing hardship during the Covid outbreak. Companies were entitled to claim Bounce Back Loans of up to 25% of their 2019 turnover, to a maximum of GBP50,000, for the economic support of their business. Lee Mankelow was the director of Wolf Timber Ltd, which traded as a builders/providers of timber products. The company, however, entered into liquidation in December 2020 before Wolf Timber Ltd's insolvency triggered an investigation by the Insolvency Service. Investigators uncovered that Mr. Mankelow applied for a GBP50,000 Bounce Back Loan in June 2020, after the company had seen a rise in online business during Covid lockdowns. Mr. Mankelow, however, transferred the full GBP50,000 the day after he received the loan to a former director of the company, breaching the terms of the loan which stated that the money must be used to support the business. Investigators found no evidence to support Mr. Mankelow's claims that the money was used to pay the wages, bonuses, dividends and expenses of the former director who had stayed on as an employee of the company. And Muhammad Rais was the sole director of Lokma BBQ Ltd in Leicester until the company went into liquidation in January 2022. The company came to the attention of the Insolvency Service following its liquidation before investigators uncovered that Rais applied for a GBP50,000 Bounce Back Loan, stating that the takeaway's turnover the previous year had been GBP200,000. However, Lokma BBQ's actual turnover for 2019 had been around GBP74,000, resulting in the company receiving GBP31,000 of government-backed loans which it wasn't entitled to. Mr. Rais has agreed with the liquidator to re-pay GBP8,000 of the money owed through monthly installments. The disqualifications prevent Mr. Mankelow and Mr. Rais from directly, or indirectly, becoming involved in the promotion, formation or management of a company, without the permission of the court. Tom Phillips, Assistant Director of Investigation and Enforcement Services for the Insolvency Service, said: "Bounce Back Loans were put in place to provide vital support to help viable businesses through the pandemic. Both Mankelow and Rais completely abused the government-backed loans to further their own interests, which was totally unacceptable. "Mankelow and Rais' bans should serve as a stark warning to other directors who may have misused financial support during the pandemic that we have the ability to bring your actions to account and remove you from the corporate arena." [*] UK: Winding-up Petitions Up in September 2022 to 398 -------------------------------------------------------- Lucca de Paoli at Bloomberg News reports that out-of-pocket creditors have been in a forgiving mood since Covid-19 shuttered businesses in 2020, but that looks to be changing. A form of legal action in which creditors can apply to have companies shut down and their assets sold to pay debts has become increasingly common, Bloomberg notes. Firms were protected from some forms of creditor action by legislation brought in during the pandemic, but those restrictions ended earlier this year, Bloomberg states. There were 398 winding-up petitions filed in September, according to data compiled by PriceWaterhouseCoopers, more than five times the number filed in the same month a year earlier, Bloomberg relates. On Nov. 2, 103 petitions are being heard in a London court room -- more in one hearing than were filed in the entirety of October 2021, according to Bloomberg. "If you are a creditor, issuing a petition is a very serious step," Bloomberg quotes David Kelly, a London-based partner in the PwC's restructuring team, as saying in an interview, noting that the increase in such action reflected a tightening market. "Perhaps patience is wearing thin." After a bruising couple of years, the number of companies filing for insolvency in England and Wales in recent months has been nearing rates not seen since the financial crisis amid ballooning energy and borrowing costs, Bloomberg Bloomberg relays. His Majesty's Revenue and Customs, the government body tasked with collecting taxes in the U.K., has ramped up its efforts to get money out of non-paying borrowers, Bloomberg recounts. In September, the agency sent 149 winding up petitions -- demands sent to courts for businesses to be liquidated -- to firms around the U.K. By contrast, in January the authority sent just one, Bloomberg disclsoes. The petitions are part of a broader push from tax authorities to pressure businesses into paying what they owe, according to advisers. Firms are also being asked for security bonds, where they put up money upfront to ensure they will pay taxes, more often, Bloomberg notes. Some directors are being told that if their firms don't pay HMRC what it is owed, they may have to themselves, Bloomberg states. The uptick in winding-up petitions comes months after the ending of temporary rules restricting what kind of petitions could be filed by creditors against companies. The Corporate Insolvency and Governance Act 2020, which came into force in June of that year, stopped certain forms of winding-up petitions being brought against firms. The measures, designed to give pandemic-hit businesses time to return to normal, were phased out in March, Bloomberg recounts. "We apply for winding up petitions as a last resort and these are returning to more usual levels after the pandemic protection measures ended in March this year," a spokesman for HMRC, as cited by Bloomberg, said by email. "We take a supportive approach to dealing with customers who have tax debts and only file winding-up petitions once we've exhausted all other options, in order to protect taxpayers' money." Over the last few months, Barclays has applied to have nearly 100 companies wound up by the courts, all of them due to non-repayment of Bounce Back Loans, Bloomberg notes. Energy companies have also been ramping up their use of legal action to go after those who owe money for unpaid bills, Bloomberg relates. At least 20 firms have been forced to close in recent months after energy companies filed winding-up petitions, Bloomberg says, citing a study from accountancy firm Mazars. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Europe is a daily newsletter co- published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA. Marites O. Claro, Rousel Elaine T. Fernandez, Joy A. Agravante, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2022. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. 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