---

       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

          Wednesday, April 26, 2023, Vol. 24, No. 84

                           Headlines



A U S T R I A

BENTELER INTERNATIONAL: Moody's Assigns 'Ba3' CFR, Outlook Stable
BENTELER INTERNATIONAL: S&P Assigns Prelim 'BB-' Long-Term ICR


C Y P R U S

RONIN EUROPE: S&P Alters Outlook to Positive, Affirms 'B/B' ICR


F R A N C E

LOXAM SAS: S&P Assigns 'BB-' Rating on New Senior Secured Notes


G E R M A N Y

ADLER: Judge Denies Creditors' Bid to Appeal Debt Restructuring


I R E L A N D

MAN GLG III: Moody's Cuts Rating on EUR10.4MM Cl. F Notes to Caa2


I T A L Y

BORMIOLI PHARMA: Moody's Affirms 'B3' CFR, Alters Outlook to Stable
BORMIOLI PHARMA: S&P Affirms 'B-' LT ICR on Proposed Refinancing


L U X E M B O U R G

COSAN LUXEMBOURG: Moody's Affirms 'Ba2' Sr. Unsecured Rating


U K R A I N E

DNIPRO CITY: Fitch Affirms LongTerm Foreign Currency IDRs at 'CC'
DTEK ENERGY: Fitch Lowers LongTerm IDRs to 'RD' Then Hikes to 'CC'
KHARKOV CITY: Fitch Affirms LongTerm Foreign Currency IDRs at 'CC'
KRYVYI RIH CITY: Fitch Affirms LongTerm Foreign Currency IDR at CC
KYIV CITY: Fitch Affirms LongTerm Foreign Currency IDR at 'CC'

LVIV CITY: Fitch Affirms LongTerm Foreign Currency IDRs at 'CC'
MYKOLAIV CITY: Fitch Affirms 'CC' LongTerm Foreign Currency IDR
ODESA CITY: Fitch Affirms LongTerm Foreign Currency IDR at 'CC'
ZAPORIZHZHIA CITY: Fitch Affirms 'CC' LongTerm Foreign Currency IDR


U N I T E D   K I N G D O M

CAVENDISH SQUARE: S&P Lowers Class C Notes Rating to 'D (sf)'
JACK BRODIE: Bought Out of Administration Through Pre-pack Deal
LENDY: Administration Process Extended to 2025
LOMOND HILLS: Put Up for Sale Following Liquidation
UNION DISTILLERS: Goes Into Administration

WORCESTER WARRIORS: Buyers Must Complete Takeover by May 2

                           - - - - -


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

BENTELER INTERNATIONAL: Moody's Assigns 'Ba3' CFR, Outlook Stable
-----------------------------------------------------------------
Moody's Investors Service has assigned a Ba3 long term corporate
family rating to the Austria-based metal processing specialist and
automotive parts supplier BENTELER International AG. Concurrently,
it assigned a Ba3 rating to the company's proposed new backed
senior secured notes and a probability of default rating of Ba3-PD.
The outlook on the ratings is stable.

RATINGS RATIONALE

Benteler's Ba3 long-term corporate family rating (CFR) is supported
by (i) the company's global scale and strong market position, with
expertise in metal processing of steel and aluminum for automotive
and industrial customers, (ii) the company's strong and
differentiated product portfolio, and well established
relationships with OEM customers, (iii) a good level of
diversification due to the steel tube business, and (iv) a
relatively conservative financial policy, as indicated by limited
shareholder distributions in the past, and a leverage ratio of 3.6x
per end of 2022, and good liquidity. Benteler is committed to
reduce gross debt and targets a company-defined net leverage of
1.5x through the cycle.

The rating is constrained by (i) the company's exposure to the
automotive industry, which is highly cyclical and highly
competitive, and its highly concentrated customer portfolio in the
automotive business, (ii) the high sensitivity to the Shreveport
steel plant whose performance is highly reliant on the Oil and Gas
industry in the US, (iii) the relatively low group profitability,
and (iv) a history of low and volatile operating profits.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook on the rating reflects the expectation that
Benteler's margins will be in a range of 5-6% (Moody's adjusted
EBITA margins) over the next 12-18 months, considering an ongoing
challenging macroeconomic environment but also some moderate
recovery in global light vehicle production. Following the proposed
refinancing, Moody's expect that Benteler's leverage (Moody's
adjusted debt/EBITDA) will be in a range of 3.0-3.5x, which is
appropriate for the Ba3 rating. The stable outlook also assumes
that Benteler will continue generating positive free cash flows and
maintains a good liquidity profile.

ESG CONSIDERATIONS

Benteler's rating is moderately negatively impacted by ESG
considerations. Moderate risks exist in all three categories, E, S
and G. The company is moderately negatively exposed to carbon
transition risks, considering the high steel and aluminum content
of Benteler's products. The vast majority of Benteler's revenues
is, however, powertrain agnostic. Carbon transition risks in the
steel tube business are somewhat mitigated by the company's
electric arc furnace steel mill in Lingen/Germany, which has 75%
lower CO2 emissions compared to a conventional blast furnace steel
mill. Benteler is moderately negatively exposed to social risks,
like its European automotive parts supplier peers. Benteler is also
moderately negatively exposed to governance risks, driven by the
company's relatively conservative financial policy.

LIQUIDITY

Benteler's liquidity is expected to be good. Main sources of
liquidity are cash on hand of EUR217 million (as of December 2022,
adjusted for planned outflows related to the transaction), which
comes, however, at a significant extent from receivables factoring
(EUR309 million, as of December 2022). Benteler's liquidity
therefore also relies on continued availability of factoring. The
company will also have access to a EUR250 million revolving credit
facility (RCF) expected to be signed upon closing of the
transaction. The RCF will be due in 2027 and have sufficient
headroom to net leverage covenant level of 3.75x, which is tested
quarterly. Moody's expect funds from operations (FFO) of
approximately EUR500 million for the next 12 months, adding to
total liquidity sources of nearly EUR1.0 billion.

Main uses of liquidity are working cash needs of around EUR280
million (3% of sales), maintenance capex estimated at approximately
EUR350 million, and debt amortization of the proposed term loan A
(approximately EUR113 million). With this, liquidity sources should
comfortably cover cash uses throughout the year, including working
capital swings of up to EUR150 million.

STRUCTURAL CONSIDERATIONS

The rating of the new EUR975 billion equivalent backed senior
secured notes, issued by the parent company BENTELER International
AG, is aligned with the Ba3 CFR. The new backed senior secured
notes and the EUR810 million senior secured term loan A as well as
the EUR250 million senior secured RCF are ranking pari passu with
each other. They benefit from the same security package, comprising
collaterals and guarantees of subsidiaries, which together with the
parent company account for more than 80% of the group's
consolidated EBITDA and total assets (as of December 2022). Moody's
consider the company's trade payables to rank pari pasu with the
debt instruments following Moody's EMEA approach within the loss
given default analysis.

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

A rating upgrade to Ba2 would require the company to demonstrate
more operational track record following the restructuring measures
taken over the past few years. More specifically, an upgrade would
require EBITA margins (Moody's adjusted) exceeding 6% sustainably,
Debt / EBITDA (Moody's adjusted) sustained below 3.0x, and
maintenance of positive free cash flows and good liquidity.

The rating could be downgraded in case of EBITA margins (Moody's
adjusted) falling below 4.5%, Debt / EBITDA (Moody's adjusted)
exceeding 3.5x, interest coverage (EBITA / interest, Moody's
adjusted) of less than 2.5x, negative free cash flows (Moody's
adjusted), or a deterioration of liquidity.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Automotive
Suppliers published in May 2021.

COMPANY PROFILE

Based in Salzburg (Austria), BENTELER International AG ("Benteler"
or "the group" or "the company") is a metal processing specialist,
which manufactures aluminum and steel applications for the
automotive industry as well as for industrial customers. The
company operates in 73 plants in 26 countries globally and
generated revenues of EUR9.0 billion in 2022, of which 80% relate
to the automotive division (BAT) and 20% to the steel tube division
(BST). The company was founded in 1876 and is equally owned by two
holding companies that are ultimately controlled by members of the
founder's family.

BENTELER INTERNATIONAL: S&P Assigns Prelim 'BB-' Long-Term ICR
--------------------------------------------------------------
S&P Global Ratings assigned its preliminary 'BB-' long-term issuer
credit rating to Austria-headquartered global auto supplier
Benteler International AG and its preliminary 'BB-' issue rating to
the company's proposed senior secured notes.

The stable outlook incorporates S&P's expectation that Benteler
will maintain adjusted debt to EBITDA of about 3x and FOCF to debt
of 8%-10% in the next few years.

Benteler has constantly overachieved its cost cutting targets in
the past three years, boosting profitability and financial
resilience. As part of the debt restructuring and turnaround plan
implemented in early 2021, the company committed to a comprehensive
set of multiyear cost-saving measures spanning its auto components
and modules division (BAT) and its steel and tube division (BST).
In BAT, from 2020-2022, the company achieved approximately EUR900
million of gross savings from measures to increase profitability of
existing contracts with auto original equipment manufacturers
(OEMs), and optimize procurement, overheads, and industrial
efficiency. Overall, it overachieved its targets by 30%-40% each
year. This has been supplemented by the closure, sale, and
rightsizing of 21 plants, which will be completed by 2024. In BST,
footprint adjustments and plant improvements, overhead reduction,
and procurement efficiencies have enabled Benteler to reap
cumulative gross savings of about EUR115 million in the past three
years. Cost actions across BAT and BST have been accompanied by a
downsizing of the group's workforce by about 19% (to about 23,600
full-time-equivalent [FTE] employees, including 2,600 contract
workers). The company is targeting further savings of about EUR200
million annually in BAT over 2023-2024, and is well on track to
achieve estimated total run-rate savings of about EUR150 million in
BST over the five-year period to 2024. In S&P's view, the measures
have lowered the group's break-even point, increasing the ability
to absorb any downturns in its auto, industrial, and onshore oil
and gas drilling end-markets.

S&P said, "We project material improvement in credit metrics,
helped by the booming BST business. Benteler's adjusted debt to
EBITDA spiked at about 15x in 2020, along with negative FOCF of
EUR100 million over 2020-2021, when the company grappled with the
combined crisis of extended shutdowns of auto production and
then-plummeting steel/tube markets. Since then, the phasing in of
cost savings, a recovery in auto production--albeit volatile,
especially over 2021 and parts of 2022--and a surge in demand for
BST products for the U.S. onshore drilling market from 2022 allowed
Benteler to reduce adjusted leverage to 3.2x and generate EUR75
million FOCF last year. This is despite cash effects related to
restructuring of EUR130 million and a working capital-related cash
drain of EUR120 million. BST's U.S. operations benefit strongly
from elevated energy prices in the wake of the Russia-Ukraine war
and a related increase in the number of active onshore oil and gas
rigs in North America. Although we forecast a normalization of
pricing and demand in BST from 2024, we expect Benteler will
maintain leverage of about 3x from 2023-2025. This is mainly thanks
to EBITDA growth in BAT linked to higher light vehicle (LV)
production and improved margins, as well as higher FOCF that
benefits from lower restructuring cash-outs and more moderate
working capital needs. This counters our expectation that BST's
EBITDA will recede by about 30% in 2025 compared with 2023.
Benteler fully offset cost inflation on raw materials, energy,
logistics, and other cost items through agreements with auto OEMs
in BAT and price increases in BST in 2022. Most agreements in BAT
foresee cost compensation through unit price increases as opposed
to one-time payments, which leads us to expect that the company
will also recover the majority of potential increases on items such
as labor cost in 2023."

Benteler is a key component supplier to large global auto OEMs.
BAT's components business is composed mainly of the manufacturing
of auto chassis parts (14% of 2022 sales), structure components and
crash management systems (26%), the assembly of thermal and tubular
components such as exhaust systems (18%), and the assembly of
chassis modules (front-end, suspension, and powertrain) (40%). Most
of these parts are subject to strict quality and safety
requirements, and need to undergo a certification process before
OEMs start production of a given model. This creates certain
barriers to entry in S&P's view, and many of Benteler's parts are
single-sourced, which implies a low probability of the company
being easily replaced during the lifetime of model programs.
Benteler is among the top 3 players for many of its component
segments and is engaged in nine of the 10 largest global platforms
in production, including VW's MQB A/B, Toyota's GA-K and GA-C, GM's
T1XX, and BMW's LK, underscoring the company's entrenched market
position, in S&P's view. In addition, due to the platforms'
lifetime (typically above seven years), well above 90% of revenue
in the next two years relates to booked business.

Benteler's product portfolio is largely unaffected by the
transition to alternative powertrains. Unlike some other auto
suppliers, only 9% of BAT's revenue comes from products for
conventional powertrains. Moreover, the business' profitability is
well below the division average, implying a low risk to Benteler's
earnings from the transition of the auto industry to electric
vehicles (EVs) and other alternative propulsion types. The company
is seeking to capitalize on the shift to EVs with new products such
as battery trays, but this business is still nascent.

Despite a leaner cost structure, it will take time for BAT's
profitability to catch up with that of auto supplier peers. S&P
forecasts BAT's reported EBITDA margin to slowly climb to 6%-7% by
2025 from about 5% in 2022, fueled by higher auto production, a
declining sales share of its lower-margin modules business, and
cost savings. However, BAT's margins are set to trail peers such as
Gestamp (10%-12% adjusted EBITDA margin since 2013, except 2020) or
American Axle (above 13%) by a sizable margin for the foreseeable
future. In its order intake, Benteler is increasingly prioritizing
profitability of new projects over volume. However, given the time
lag of 2.0-2.5 years between order intake and start of production,
and because peak profitability is usually only reached a few years
into each program, S&P believes it will take time for the impact of
these initiatives to be felt in BAT's overall margin.

The cyclicality of BST's end markets introduces volatility into the
group's credit metrics. The business has a positive impact on the
group's credit metrics and accounted for about half of 2022 group
EBITDA. However, demand, pricing, and profitability in this segment
are prone to wide short-term fluctuations, as is underlined by
BST's negative EBITDA just two years earlier during the COVID-19
pandemic. Despite Benteler's efforts to flex BST's cost structure,
S&P thinks earnings and cash flow will remain more volatile than in
BAT. Also, unlike other auto supplier peers such as Schaeffler or
ZF, BAT lacks a meaningful aftermarket business, which typically
exhibits higher and more stable margins than OEM sales. BAT also
displays somewhat higher customer concentration than the sector
average, with VW, BMW, and Mercedes contributing 60% of 2022
sales.

Benteler's financial policy supports the rating. In the next couple
of years, the company intends to maintain net leverage at below
1.5x through the business cycle, down from 2.3x at end-2022 pro
forma the proposed refinancing and adjusted for restructuring
costs. S&P said, "Absent material restructuring costs, which we
expect to remain modest from 2023, the main difference to our
adjusted leverage stems from our debt adjustments for factoring,
pensions, and surplus cash, which equal about 1.0x of difference in
our forecast for 2023. Moreover, we expect moderate dividend
payouts of 20%-30% of net income, and we understand the company is
not contemplating any material acquisitions. Overall, we think this
provides protection against a material deviation of leverage from
our base-case forecast, although Benteler lacks a track record for
this newly adopted post-restructuring financial policy."

The final rating will depend on the completion of Benteler's
refinancing. S&P said, "We expect the company to issue EUR2.0
billion-EUR2.1 billion of long-term senior secured financing,
indicatively consisting of EUR975 million senior secured notes, a
EUR810 million term loan, and a revolving credit facility (RCF) of
EUR250 million (expected to be undrawn at closing) to refinance its
existing EUR1.9 billion debt maturing Dec. 31, 2024. The final
rating will depend on our receipt and satisfactory review of all
final transaction documentation." If S&P Global Ratings does not
receive final documentation within a reasonable time frame, or if
final documentation departs from materials reviewed, it reserves
the right to withdraw or revise the ratings. Potential changes
include use of new debt proceeds, maturity, size and conditions of
the notes and loans, financial and other covenants, security, and
ranking.

S&P said, "The stable outlook incorporates our expectation that
trimming of costs in both divisions, the pass-through of input cost
inflation, and the ongoing strong demand in the BST division will
support solid profitability and cash flow in 2023. In subsequent
years, we expect EBITDA growth in BAT will sufficiently offset the
normalization of demand in BST. We believe this will allow the
company to maintain adjusted debt to EBITDA of about 3.0x and FOCF
to debt in the 8%-10% range over the next few years.

"We could lower the rating if losses of important customers or
platforms and deteriorating profitability in BAT, or a severe
market downturn in BST, cause Benteler's adjusted EBITDA margin to
sustainably drop below 7% and its three-year average adjusted debt
to EBITDA to exceed 3.5x or three-year average FOCF to debt to
decline toward 5%.

"We could raise our rating on the company if profitable order
intake and further trimming of costs in BAT, combined with
resilience of margin and cash flows in BST to market downturns,
results in the adjusted EBITDA margin increasing sustainably toward
10%, supporting three-year average adjusted debt to EBITDA
approaching 2x and three-year average FOCF to debt converging
toward 15%."

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

S&P said, "Environmental factors are a moderately negative
consideration in our credit rating analysis for Benteler. This is
mainly because two-thirds of EBITDA in the company's BST division
comes from business with customers in the oil and gas drilling
sector, which faces material environmental transition risks. The
latter exposes Benteler indirectly to potentially tighter
regulation of its oil and gas customers. At the same time, we
expect that energy supply security considerations will support
strong demand for the company's related products in the next year.
Conversely, we see limited risk from the transition to alternative
powertrains for Benteler's key auto product lines such as vehicle
structures, chassis, or front-end and suspension modules. There is
some exposure to internal combustion engine-related products in its
engine and exhaust systems segment, but the earnings contribution
of these activities is small."




===========
C Y P R U S
===========

RONIN EUROPE: S&P Alters Outlook to Positive, Affirms 'B/B' ICR
---------------------------------------------------------------
S&P Global Ratings revised its outlook on Cyprus-based Ronin Europe
Ltd. to positive from stable. At the same time, S&P affirmed its
'B/B' long- and short-term issuer credit ratings on the company.

Ronin Europe's revenue has recovered after a weak first half of
2022. Specifically, net brokerage fee income increased to about
US$3.3 million in second-half 2022 compared with only US$1.9
million over first-half 2022, driven by an increase in both
customer numbers and their assets. Customer assets (cash and
securities) increased by about 2% over 2022 to reach US$2.2 billion
despite a general decline in valuations across asset classes. S&P
expects that Ronin's brokerage revenue will remain stronger than in
2021-2022.

S&P said, "We also believe that Ronin has reduced its exposure to
Russian risks, amid a continued background of sanction pressures.
Specifically, we note that over 2022 Ronin terminated its
relationships with Russian citizens. It also divested Russian
bonds, which constituted about 15% of its portfolio, while its
parent, Ronin Partners B.V. sold the group's Russian subsidiaries
and otherwise ceased its operations in Russia. We consider this to
be considerable progress on the back of recent designations of
wealth management companies and private bankers in Russia by the
U.S. Office of Foreign Assets Control.

"We currently see the broader Ronin group as having immaterial
influence on the credit standing of Ronin Europe.

"We expect Ronin will continue to manage its bond portfolio in a
conservative manner. As interest rates increased over 2022, Ronin
successfully reallocated its portfolio toward less risky segments.
At end-March 2023, its weighted-average credit quality stood at
about 'BBB+', while the weighted-average duration stood at about
3.5 years, a modest level compared with many rated peers. We do not
expect Ronin to change its allocations abruptly and believe it will
retain this changed risk appetite."

Outlook

The positive outlook on Ronin Europe indicates that over the next
12-18 months S&P expects the firm will continue to gradually build
its client base, achieve improved operating performance, and adhere
to its revised risk appetite.

Upside scenario

S&P may raise the rating if it sees:

-- Ronin Europe continuing to adhere to its risk appetite, both
with respect to portfolio allocations and onboarding of new
customers, and

-- If S&P was to see compliance risks reducing.

Downside scenario

S&P may revise the outlook on Ronin Europe back to stable if it
sees it building up its risk appetite and venturing into
lower-rated segments of the bond market.

Additionally, S&P may take a negative rating action if:

-- Operating conditions materially deteriorate and Ronin Europe's
profitability comes under pressure, for example because it loses
key clients; or

-- S&P sees negative influence from Ronin Partners on Ronin
Europe's operations, for example through reputational risk or
unexpected outflows of capital and liquidity to affiliates.




===========
F R A N C E
===========

LOXAM SAS: S&P Assigns 'BB-' Rating on New Senior Secured Notes
---------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' long-term issue rating to the
proposed senior secured notes to be issued by France-based rental
equipment company, Loxam SAS (BB-/Stable/--). The recovery rating
is '3' (50%-70%; rounded estimate: 65%). Loxam plans to issue
EUR300 million of senior secured notes and use all the proceeds to
repay its existing EUR300 million 4.25% senior secured notes due
2024. Loxam also plans to issue exchange notes to partially repay
its EUR300 million 6.00% senior unsecured notes due 2025 and EUR300
million 3.25% senior secured notes due 2025. S&P views the
transaction as leverage neutral and overall positive for Loxam's
debt maturity profile. The issuance will not affect its issue and
recovery ratings on the company. S&P's 'BB-' long-term issuer
credit rating and stable outlook on Loxam is unchanged.

S&P said, "We expect Loxam to maintain credit metrics comfortably
commensurate with its current 'BB-' rating. Its S&P Global
Ratings-adjusted margin should continue to rise gradually to 36% in
2023 and 37% in 2024, with adjusted debt to EBITDA comfortably less
than 5x over the next two years. After a period of heavy fleet
investment, we expect its capital expenditure (capex) will reduce
through 2023 and its free operating cash flows will turn positive.
Noting the expected capex of more than EUR600 million this year and
the mandatory amortization schedule for its bilateral lines and
state guaranteed loans, we expect the company will likely issue
more bilateral loans instead of drawing on its revolving credit
facility (RCF). We continue to expect bolt-on M&A activity that is
EBITDA and cash flow accretive, as well as moderate shareholder
distributions. We think the long-term demand for Loxam's core
equipment rental markets remains positive overall, and that Loxam
is in a good position to benefit from this thanks to its size and
relatively young fleet age. We estimate funds from operations cash
interest coverage to remain robust, at more 5x for 2023 and 2024.
Its liquidity remains adequate.

"Our adjusted debt figure at Dec. 31, 2022, included the existing
EUR2.1 billion senior secured debt, about EUR518 million of senior
subordinated notes, about EUR189 million government loans, about
EUR805 million of bilateral loans and financial leases, EUR75
million of commercial paper, and EUR30 million of pensions net of
about EUR214 million of cash."

Issue Ratings--Recovery Analysis

Key analytical factors

-- S&P assigned a 'BB-' issue rating to the proposed senior
secured debt. The recovery rating is '3' based on recovery
prospects of 50%-70% (rounded estimate: 65%).

-- The issue rating on the existing senior unsecured facilities
remains unchanged at 'B'. The '6' recovery rating is unchanged and
based on recovery prospects of 0%-10% (rounded estimate: 0%).

-- The recovery rating on the facilities is supported by the
company's strong asset base. The rating is constrained by the large
quantum of senior secured debt and the presence of priority
obligations.

-- S&P has value the business using a discrete asset valuation
method because we believe that its enterprise value would be
closely correlated with the value of its assets.

-- In S&P's hypothetical scenario, a default is triggered by
revenue deflation due to worsening trading conditions and margin
pressure from competition through consolidation of other
similar-size players.

-- S&P considers that Loxam would be reorganized rather than
liquidated in an event of default.

Simulated default assumptions

-- Year of default: 2026
-- Jurisdiction: France

Simplified waterfall

-- Net enterprise value after 5% administrative expenses: EUR2.095
billion

-- Priority claims: EUR620 million

-- Value available to senior secured claims: EUR1.456 billion

-- Total secured claims: EUR2.166 billion

    --Recovery range: 50%-70% (rounded estimate: 65%)

-- Value available to unsecured claims: 0

-- Total senior unsecured claims: EUR756 million

    --Recovery range: 0%-10% (rounded estimate: 0%)

Note: All debt amounts include six months of prepetition interest
accrued and assumed 85% draw on RCFs.




=============
G E R M A N Y
=============

ADLER: Judge Denies Creditors' Bid to Appeal Debt Restructuring
---------------------------------------------------------------
Upmanyu Trivedi at Bloomberg News reports that creditors contesting
Adler Group SA's EUR6 billion (US$6.6 billion) debt restructuring
were denied permission to appeal, helping the embattled real estate
firm move ahead with the plan.

A judge at the High Court in London said on April 25 the tribunal
wasn't convinced by any of the reasons for permission to appeal,
Bloomberg relates.

The decision follows a ruling at the same court last week allowing
Adler to extend maturities of bonds due next year and borrow around
EUR900 million, despite opposition from some of its creditors
including DWS Group and Strategic Value Partners, Bloomberg states.
That decision came just as Adler was set to default on debt
payments due later this month, which it said would have led to an
insolvency filing, Bloomberg notes.

Stuck with notes maturing in 2029, lawyers for opposing creditors,
including Carval Investors and Attestor Capital, said the plan
benefits shareholders and investors in shorter-dated bonds,
Bloomberg discloses.  Seeking permission to appeal, their lawyer
said the court should have considered possibilities of a fairer
alternative plan, according to Bloomberg.




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

MAN GLG III: Moody's Cuts Rating on EUR10.4MM Cl. F Notes to Caa2
-----------------------------------------------------------------
Moody's Investors Service has downgraded the rating on the
following notes issued by Man GLG Euro CLO III Designated Activity
Company:

EUR10,400,000 Class F Deferrable Junior Floating Rate Notes due
2030, Downgraded to Caa2 (sf); previously on Dec 6, 2021 Affirmed
B3 (sf)

Moody's has also affirmed the ratings on the following notes:

EUR212,000,000 Class A-R Senior Secured Floating Rate Notes due
2030, Affirmed Aaa (sf); previously on Dec 6, 2021 Affirmed Aaa
(sf)

EUR23,300,000 Class B-1 Senior Secured Floating Rate Notes due
2030, Affirmed Aaa (sf); previously on Dec 6, 2021 Upgraded to Aaa
(sf)

EUR10,000,000 Class B-2-R Senior Secured Fixed Rate Notes due
2030, Affirmed Aaa (sf); previously on Dec 6, 2021 Upgraded to Aaa
(sf)

EUR32,000,000 Class C Deferrable Mezzanine Floating Rate Notes due
2030, Affirmed A1 (sf); previously on Dec 6, 2021 Upgraded to A1
(sf)

EUR18,000,000 Class D Deferrable Mezzanine Floating Rate Notes due
2030, Affirmed Baa2 (sf); previously on Dec 6, 2021 Affirmed Baa2
(sf)

EUR19,800,000 Class E Deferrable Junior Floating Rate Notes due
2030, Affirmed Ba2 (sf); previously on Dec 6, 2021 Affirmed Ba2
(sf)

Man GLG Euro CLO III Designated Activity Company, issued in July
2017 and partially refinanced in March 2021, is a collateralised
loan obligation (CLO) backed by a portfolio of mostly high-yield
senior secured European loans. The portfolio is managed by GLG
Partners LP. The transaction's reinvestment period ended in October
2021.

RATINGS RATIONALE

The rating downgrade on the Class F Notes is primarily a result of
the deterioration of the key credit metrics of the underlying pool
since March 2022.

The affirmations on the ratings on the Class A-R, B-1, B-2-R, C, D
and E notes are primarily a result of the expected losses on the
notes remaining consistent with their current rating levels, after
taking into account the CLO's latest portfolio, its relevant
structural features and its actual over-collateralisation ratios.

The credit quality of the collateral pool has deteriorated and OC
ratios of the junior classes have weakened. The weighted average
rating factor, or WARF, was 3037 as reported in March 2023 [1],
compared with 2858 in March 2022 [2]. Securities with ratings of
Caa1 or lower currently make up approximately 8.4% of the
underlying portfolio, versus 5.2% in March 2022. Class F OC has
reduced to 104.1% in March 2023 from 105.3% in March 2022[2].
Furthermore, the short remaining weighted average life of the
portfolio leads to reduced time for excess spread to cover
shortfalls caused by defaults.

In light of reinvestment restrictions during the amortisation
period, and therefore the limited ability to effect significant
changes to the current collateral pool, Moody's analysed the deal
assuming a higher likelihood that some of the collateral pool
characteristics would maintain an adequate buffer relative to
certain covenant requirements.

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: EUR280.7m

Defaulted Securities: EUR5.0m

Diversity Score: 60

Weighted Average Rating Factor (WARF): 3093

Weighted Average Life (WAL): 3.5 years

Weighted Average Spread (WAS) (before accounting for Euribor
floors): 3.6%

Weighted Average Coupon (WAC): 4.9%

Weighted Average Recovery Rate (WARR): 43.5%

Par haircut in OC tests and interest diversion test: 0.3%

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.

Moody's notes that the April 2023 trustee report was published at
the time it was completing its analysis of the March 2023 data.
Moody's has reviewed the key portfolio metrics such as WARF,
diversity score, weighted average spread and life, and OC ratios.

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, 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. The collateral manager's investment decisions and
management of the transaction will also affect the notes'
performance.

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 liquidation agent/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. 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
=========

BORMIOLI PHARMA: Moody's Affirms 'B3' CFR, Alters Outlook to Stable
-------------------------------------------------------------------
Moody's Investors Service has affirmed Bormioli Pharma S.p.A.'s B3
corporate family rating and its B3-PD probability of default
rating. Bormioli Pharma is an Italian manufacturer of glass and
plastic packaging mainly serving the pharmaceutical industry.

Concurrently, Moody's has assigned a B3 instrument rating to the
proposed EUR350 million senior secured floating rate notes (FRNs)
due 2028 to be issued by Bormioli Pharma. The outlook on the
ratings has changed to stable from negative. The B3 instrument
rating on the existing EUR280 million backed senior secured notes
due 2024 will be withdrawn upon their repayment.

Proceeds from the new FRNs will be used to repay the existing notes
due 2024 and other indebtedness and to pay for the transaction
fees. The capital structure will also include a new super senior
revolving credit facility (RCF) of EUR65 million due 2028 which
will replace the existing super senior RCF of EUR55 million.

"The action reflects Bormioli Pharma's improved debt maturity
profile pro forma for the transaction with no meaningful debt due
before 2028 and positive demand dynamics underpinning the resilient
pharma packaging industry combined with the full effect of price
increases implemented in 2022 which will support earnings growth
over the coming years and allow for gradual deleveraging," says
Donatella Maso, a Moody's Vice President–Senior Credit Officer
and lead analyst for Bormioli Pharma.

"Although the outlook is stable, the B3 rating is weakly positioned
within the rating category given the high leverage and Moody's
expectation of weak free cash flow (FCF) for the next 18 months
leaving the company relatively limited headroom for
underperformance", adds Ms Maso.

RATINGS RATIONALE

Bormioli Pharma has recently announced that it intends to refinance
its debt maturing in 2023-2024. While the proposed refinancing
removes the immediate liquidity risk and simplifies the company's
capital structure, it will increase its gross leverage to 7.2x from
6.7x based on Moody's adjusted EBITDA of EUR59 million as of
December 2022, as well as its cost of debt, resulting in
incremental interest expenses.

While the company's 2022 core revenue increased by 22.5%, its
EBITDA remained broadly in line with prior year because it was
negatively impacted by inflationary strains, higher fixed costs
linked to the refurbishment of one of its Bergantino furnaces and
the malfunction at its San Vito plant, that hampered its
profitability margin.

The rating agency however expects that Bormioli Pharma's EBITDA
will grow above EUR70 million by 2024-2025 from the current level.
Despite the evolution of macroeconomic conditions remains
uncertain, the company will benefit from the full effect of the
last wave of price increases in the current year, as well as from
the positive dynamics underpinning a resilient pharma industry,
including the near-shoring trends among large pharma companies,
demographic changes, and self-medication. The company is also well
positioned to leverage the sustainability trends in plastic
packaging owing to its investments in new product development. At
the same time, Bormioli Pharma will take several years to reach its
high historical profitability margins. This is partly because the
company has entered in costly energy hedging agreements  and
remains vulnerable to wage increases, both of which will burden its
cost base. Moody's expects, however, that the increased operating
efficiency and no major planned refurbishment will partially offset
these inflationary pressures.

The expected improvement in EBITDA will drive the leverage towards
6.5x, the maximum leverage tolerance for the B3 rating category,
already in 2023. Conversely, higher interest expenses will weaken
the company's EBITDA/interest expense ratio and put pressure on its
free cash flow (FCF), which has been persistently negative or weak
historically because of the capital-intensive nature of the
business, coupled with working capital requirements, particularly
during years when major maintenance works are carried out.

Moody's forecasts that Bormioli Pharma's FCF will continue to
remain weak in 2023-24 but will improve thereafter in the absence
of any major refurbishments before 2028. However, to ensure the
sustainability of its capital structure, the company will have to
deliver material EBITDA gains and delever ahead of the next capex
cycle and refinancing needs with limited room to deviate from its
business plan.

Bormioli Pharma's B3 rating also reflects the competitive
pharmaceutical packaging industry, with ongoing pricing pressures;
a degree of geographical concentration in mature markets, such as
Italy and Western Europe, which accounted for 79% of its 2022
revenue; the company's exposure to fluctuating input prices,
particularly for energy and plastic resins, although part of those
price increases are passed on to customers with a lag, and to the
risk of energy supply shortages in Europe for the upcoming winter;
and the capital-intensive nature of its operations because of
furnace maintenance and working capital needs, which continue to
absorb most of the cash flow.

More positively, Bormioli Pharma's B3 rating is supported by its
established leading market positions in the niche segments of
borosilicate and soda glass, as well as in products such as
childproof closures and eye drops, in Italy and Western Europe; a
moderately diversified base of 1,000 customers, with the 10 largest
customers accounting for 23% of sales in 2022, and long-standing
customer relationships; some switching costs and barriers to entry
from products that require validation processes and regulatory
approval; and a growing and non-cyclical pharmaceutical packaging
industry.

LIQUIDITY

Bormioli Pharma's liquidity is underpinned by a cash balance of
approximately EUR15 million pro forma for the transaction; full
availability under the EUR65 million super senior RCF due 2028; and
lack of significant debt maturing before 2028. These sources will
be sufficient to fund the increased interest expenses, capital
spending requirements and other operational needs over the next 18
months. The company also relies on short-term bank credit lines and
factoring arrangements, which Moody's does not consider in its
liquidity analysis because of their uncommitted nature.

The super senior RCF will have one springing financial maintenance
covenant (net leverage ratio), set with a large headroom at 7.9x to
be tested on a quarterly basis when the RCF is drawn by more than
40%, under which Moody's expects the company to maintain sufficient
capacity.

STRUCTURAL CONSIDERATIONS

The B3-PD PDR is in line with the CFR. This is based on a 50%
family recovery rate, as is typical for transactions with both bank
debt and bonds.

The proposed notes will be issued by Bormioli Pharma (the main
operating company), accounting for 83%, 97% and 91% of the group's
consolidated revenue, adjusted EBITDA and total assets as of
December 31, 2022, respectively. The notes will share the same
security package as the super senior RCF, consisting of pledges
over the capital stock, certain operating bank accounts and certain
material receivables of the issuer, which Moody's considers as
weak. However, the notes will rank junior to the super senior RCF
upon enforcement under the provisions of the intercreditor
agreement.

The B3 rating on the EUR350 million senior secured floating-rate
notes due 2028 is also in line with the CFR, because of the
relatively small size of the super senior RCF ranking ahead.

RATIONALE FOR THE STABLE OUTLOOK

Although Bormioli Pharma is weakly positioned in the B3 rating
category, the stable rating outlook reflects its improved capital
structure and liquidity, and Moody's expectation that the company
will reduce leverage below 6.5x and gradually improve its cash
generation through EBITDA growth and control on its capital
spending. The outlook also factors in Moody's assumption that the
company will not embark on significant debt-funded acquisitions or
dividend distributions.

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

A rating upgrade is unlikely in the near term as the company is
currently weakly positioned in the B3 rating category. However,
positive rating pressure could develop over time if the company
demonstrates a positive EBITDA growth trajectory, with its
Moody's-adjusted debt/EBITDA falling below 5.5x; its
Moody's-adjusted EBITDA/interest expense ratio increases above
2.5x; and its FCF turns positive on a sustained basis while its
liquidity remains adequate.

Negative rating pressure could arise if the company fails to reduce
leverage below 6.5x by 2023; its Moody's-adjusted EBITDA/interest
expense falls below 2.0x; its FCF remains negative beyond 2024; or
its liquidity deteriorates.

LIST OF AFFECTED RATINGS:

Assignments:

Issuer: Bormioli Pharma S.p.A.

Senior Secured Regular Bond/Debenture, Assigned B3

Affirmations:

Issuer: Bormioli Pharma S.p.A.

Probability of Default Rating, Affirmed B3-PD

LT Corporate Family Rating, Affirmed B3

Outlook Action:

Issuer: Bormioli Pharma S.p.A.

Outlook, Changed To Stable From Negative

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Packaging
Manufacturers: Metal, Glass and Plastic Containers published in
December 2021.

COMPANY PROFILE

Headquartered in Italy, Bormioli Pharma is a European producer of
plastic and glass pharmaceutical packaging serving approximately a
thousand customers in 120 countries. Bormioli Pharma has nine
manufacturing facilities, five in Italy, three in Germany and one
in France and around 1,400 employees.

For 2022, Bormioli Pharma generated EUR315 million of revenue and
EUR68 million of company adjusted EBITDA (or EUR59 million as
adjusted by Moody's). The company is majority owned by private
equity firm Triton Investment Management Limited since November
2017.

BORMIOLI PHARMA: S&P Affirms 'B-' LT ICR on Proposed Refinancing
----------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' long-term issuer credit rating
on Bormioli Pharma SpA and the 'B+' issue rating on its super
senior revolving credit facility (SSRCF). S&P also assigned its
'B-' issue rating to the proposed senior secured floating-rate
notes with a '4' recovery rating. S&P will discontinue its ratings
on the EUR280 million senior secured notes upon completion of the
transaction.

S&P said, "The stable outlook indicates that we expect Bormioli
Pharma will complete the transaction and that its credit metrics
will remain commensurate with the rating for the next 12 months. We
anticipate debt to EBITDA of 6.5x-7.0x and funds from operations
(FFO) to debt of 7%-8% by year-end 2023. We also anticipate
marginally positive FOCF generation for 2023."

Transaction completion would alleviate Bormioli Pharma's
refinancing concerns and support liquidity. The proposed EUR350
million senior secured floating-rate notes will repay the EUR280
million notes due November 2024, about EUR32 million of other bank
loans, and EUR10 million drawn under the EUR55 million SSRCF due
May 2024. Proceeds from the transaction would also cover about
EUR20 million of transaction costs and leave EUR8 million of cash
on the group's balance sheet.

The SSRCF would be upsized to EUR65 million and its maturity
extended to 2027. Given that this transaction will lengthen
Bormioli Pharma's debt maturity profile, we no longer consider its
capital structure a negative factor in our rating assessment.

S&P said, "Although we forecast marginally positive FOCF for 2023
and 2024, our rating remains constrained by Bormioli Pharma's track
record of negative FOCF generation. In 2023, we estimate FOCF of
EUR4.0 million–EUR8.0 million compared with negative EUR7.0
million in 2022. This reflects a recovery in EBITDA, as
extraordinary costs reduce and volumes increase, and lower capital
expenditure (capex) on scheduled furnace refurbishments. However,
adjusted FOCF will be hampered by significantly higher annual
interest costs (about EUR30 million in 2023 versus EUR13 million in
2022) under the new debt structure. In our opinion, the company's
ability to generate cash also depends on successful working capital
management; we forecast adjusted working capital outflows of about
EUR5.0 million for 2023 (excluding inflows from additional
drawdowns under factoring facilities). In 2024, we expect similar
levels of adjusted FOCF (EUR4.0 million–EUR8.0 million) as higher
EBITDA will be offset by additional capex and tax payments.

"Our rating continues to reflect Bormioli Pharma's negative FOCF
over the past four years. We believe that the company's modest size
makes it vulnerable to unforeseen events depleting cash flows. We
reflect its track record of negative FOCF compared to other
'B'-rated peers in a one-notch negative comparative rating
assessment (CRA) modifier.

"We expect the pharmaceutical market to remain resilient over
2023-2024, despite weaker economic growth.We forecast revenue
growth of about 10% per year in 2023 and 2024. In 2023, we expect
75% of the growth to stem from price increases and the remainder
from volumes; in 2024, half of this growth will relate to prices
and half to volumes. In 2022, 95% of Bormioli Pharma's sales were
generated in the pharma industry, with cosmetic products accounting
for the remaining 5%. We believe that demand for pharmaceuticals
will continue to increase with the development of new drugs, higher
rates of disease detection, and population aging. We view the
company as well placed to capture market growth, given that its
production capacity will increase in 2023 due to fewer furnace
refurbishments scheduled. We understand the next major furnace
rebuilds are only due after 2027.

"The stable outlook indicates that we expect Bormioli Pharma will
complete the proposed transaction and that its credit metrics will
remain commensurate with the rating for the next 12 months. We
anticipate debt to EBITDA of 6.5x-7.0x and FFO to debt of about
7%-8% by year-end 2023. We anticipate marginally positive FOCF
generation for 2023."

Downside scenario

S&P could take a negative rating action if Bormioli Pharma failed
to refinance its upcoming debt maturities. In this case, it would
likely consider the capital structure unsustainable. S&P could also
take a negative rating action if liquidity deteriorates.

Upside scenario

S&P could take a positive rating action in 2023 if:

-- Bormioli Pharma generates positive and material FOCF in the
first quarters of 2023 and we believe the trend is sustainable for
full year and 2024;

-- It maintains adequate liquidity headroom; and

-- Leverage remains below 7x.

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

S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis of Bormioli Pharma. Our
assessment of the company's financial risk profile as highly
leveraged reflects corporate decision-making that prioritizes the
interests of the controlling owners, in line with our view of the
majority of rated 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
believe that the company's diversification into glass packaging and
its exposure to the pharma market offsets the substitution risk and
severe restrictions that plastic packaging companies face."




===================
L U X E M B O U R G
===================

COSAN LUXEMBOURG: Moody's Affirms 'Ba2' Sr. Unsecured Rating
------------------------------------------------------------
Moody's Investors Service has affirmed Cosan S.A. ("Cosan") Ba2
Corporate Family Rating and the senior unsecured Ba2 ratings of
Cosan Luxembourg S.A. and Cosan Overseas Limited. Outlook changed
to negative from stable.

Affirmations:

Issuer: Cosan S.A.

Corporate Family Rating, Affirmed Ba2

Issuer: Cosan Luxembourg S.A.

Backed Senior Unsecured Regular Bond/Debenture, Affirmed Ba2

Issuer: Cosan Overseas Limited

Backed Senior Unsecured Regular Bond/Debenture, Affirmed Ba2

Outlook Actions:

Issuer: Cosan Luxembourg S.A.

Outlook, Changed To Negative From Stable

Issuer: Cosan Overseas Limited

Outlook, Changed To Negative From Stable

Issuer: Cosan S.A.

Outlook, Changed To Negative From Stable

RATINGS RATIONALE

The negative outlook reflects the execution risk of Cosan as it
manages to continue reinforcing its liquidity and capital structure
to service considerable debt and interests incurred from the collar
loan financing structure over the next 4 years. Moody's believes
there has been an increase execution risk since the acquisition of
Vale shares was first announced stemming from increasing interest
rates, tightening credit conditions and a weaker macro-economic
outlook. Rating pressure would increase if Cosan is unable to
maintain a comfortable liquidity ahead of such amortizations and
possible derivatives settlements under the BRL8.5 billion collar
loan financing used to fund the acquisition of Vale shares. Moody's
viewed the transaction as credit negative because of the cash
payments to service and amortize the collar loan financing and the
carve out of dividends from Raizen S.A. (Baa3) and Compass Gas e
Energia S.A. to cover redeemable preferred shares agreement also
linked to the transaction. To avoid an increase in refinancing risk
Moody's also expects Cosan to divest from certain assets and its
participation in certain subsidiaries.  

Although Moody's believes Cosan's main subsidiaries Raizen S.A. and
Compass Gas e Energia S.A. will generate consistent dividend
upstream in the coming years, the expenses relating to the
preferred shareholders and collar loan financing will maintain
coverage of Net Dividends Received/Interest in a range of 0.7x to
1.3x between 2023 and 2027, compared to 2.0x in 2022. Once the loan
used to finance the share acquisition is reduced in the coming
years, the diversification offered by the dividend upstream from
Vale will benefit Cosan's coverage metric and credit profile.

On October 7, Cosan announced the acquisition of a 4.9% stake of
Vale's voting rights. Vale is an investment-grade asset that offers
exposure to foreign-currency revenue, and will benefit from
decarbonization and carbon transition trends with sustained demand
for high-quality iron ore, copper, nickel and other metals. Vale is
one of the world's largest mining companies with substantive
positions in iron ore and nickel, relevant operations in copper,
and supplemental positions in energy and steel production. The
company's principal mining operations are in Brazil, Canada and
Indonesia. In 2022, ferrous minerals (primarily iron ore and
pellets) accounted for around 80% of the company's net revenue. In
2022, Vale reported net operating revenue of $54.5 billion and Net
Income of $16.8 billion.

Cosan S.A.'s Ba2 corporate family rating (CFR) reflects its
diversified portfolio of businesses, including the entire
sugar-ethanol chain; fuel distribution, including convenience
stores, natural gas, lubricants, logistics operations and metals &
mining; and its adequate liquidity profile. The holding company's
diversified sources of dividends, especially from stable
businesses, such as the fuel and gas distribution, translates into
a stable cash source over the long-term. Diversification mitigates
volatility in the upstream business Cosan benefits from a
diversification of cash flow streams from the agricultural
sugar-ethanol activities, fuel distribution and piped natural gas
distribution. The stake in Vale shares will improve diversification
of dividends specially as the collar financing structures are
amortized and the flow of dividends is up streamed to Cosan. Also,
Rumo S.A. (Ba2 Negative) and other investments can improve
diversification to Cosan as they grow more robust in their ability
to provide consistent and reliable dividends.

Cosan's ratings are constrained by the acquisitive growth history
of the company and its subsidiaries, and the high gross leverage of
the pro forma consolidated figures of the group.

The negative outlook reflects the execution risk of Cosan as it
manages to continue reinforcing its liquidity and capital structure
to service considerable debt and interests incurred from the collar
loan financing structure in the next 4 years. Rating pressure would
increase if Cosan is unable to maintain a comfortable liquidity
ahead of such debt amortizations and possible derivatives
settlements.

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

An upgrade of Cosan's ratings could result from the upgrade of
rated subsidiaries (Raízen S.A or Rumo S.A.). Upward pressure
could develop if the parent company maintains a strong standalone
financial position with adequate liquidity, increases cash flow and
diversifies companies and segments.

A downgrade of Cosan could result from a weakening of credit
quality or operating performance of any of its key subsidiaries,
such that Moody's expects dividends to be lower than the rating
agency's current expectations. A weakening of liquidity, including
broad declines in equity valuations or tightening credit conditions
such that asset sales or capital market access becomes unattractive
or inaccessible could also lead to a downgrade of the ratings.

The principal methodology used in these ratings was Investment
Holding Companies and Conglomerates published in April 2023.



=============
U K R A I N E
=============

DNIPRO CITY: Fitch Affirms LongTerm Foreign Currency IDRs at 'CC'
-----------------------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Dnipro's Long-Term
Foreign-Currency Issuer Default Ratings (IDR) at 'CC' and Long-Term
Local-Currency IDR at 'CCC-'. Ratings at this level typically do
not carry Outlooks due to their high volatility.

The affirmation reflects Fitch's view that the risk of
deterioration in liquidity and in Dnipro's ability to service its
new debt and to support its indebted municipal companies remains
elevated.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

The Risk Profile remains 'Vulnerable' and the city has the six Key
Risk Factors (KRFs) assessed at 'Weaker'. The 'Weaker' assessment
of the KRFs is the lowest possible under Fitch's International
Local and Regional Governments (LRG) Rating Criteria and reflects
the interference from and strong interdependence of the local
governments (LGs) on the Ukrainian sovereign.

The assessment reflects Fitch's view of a very high risk that the
city's ability to cover debt service with the operating balance may
weaken unexpectedly over the scenario horizon, notably due to lower
revenue and higher expenditure.

Revenue Robustness: 'Weaker'

The Ukraine government and its institutions (central government,
tax collection, banking system) are still largely intact. However,
the damage to critical municipal and social infrastructure -
housing, schools and kindergartens, hospitals, roads, municipal
building and work establishments - and the displacement of a large
number of citizens to other places in Ukraine or abroad, restrict
LGs' revenues robustness and adjustability.

Revenue Adjustability: 'Weaker'

Nationally-collected income taxes, the LG's main revenue source,
increased by 29% on average (Fitch rated cities) in 2022, whereas
transfers from the state budget (another major revenue) source
decreased by 14% on average. The scope of changes in the revenue
composition and 2022/2021 change, was dependent on the impact of
the war on the individual city.

Expenditure Sustainability: 'Weaker'

Fitch assumes spending pressure will strongly increase with rising
inflation, broken supply chains driving prices for goods and
services high and large reconstruction efforts. Additionally,
municipal companies performing municipal services (transportation,
heating, solid waste, water and sewage) are largely not
self-supporting, and will increasingly rely on subsidies, capital
injections and direct debt repayments made by Dnipro, which will
only add to its own difficulties.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs, current transfers made and spending on goods and services.

Liabilities & Liquidity Robustness: 'Weaker'

In its view, Dnipro is facing increasing material risk for its
current and future debt due to greater uncertainty about market
access, cost of debt and FX exchange rates. This is despite the
supportive policy of the National Bank of Ukraine and positive
attitude of existing domestic and international lenders towards
LGs. Funding for Ukrainian cities and their companies comes from
capital markets, local commercial banks, and institutional lenders,
is of short to medium term and often in FX (US dollars or euros).
Fitch focuses on Fitch-adjusted debt, as it reclassifies contingent
debt of not self-supporting companies.

Liabilities & Liquidity Flexibility: 'Weaker'

Fitch assumes that the cities may start to take on new debt to
finance crucial investments into infrastructure and public
transport, which could not be performed due to the war. New
indebtedness may start to be incurred in 2023, or 2024 at the
latest, depending on the overall situation, as there is a large
need to resume investments. Funding could be provided by domestic
banks and IFIs, who have already declared readiness to support the
reconstruction of Ukrainian cities.

Debt Sustainability: 'b category'

Fitch has maintained Dnipro's debt sustainability assessment at 'b'
to reflect that the city's overall performance has been negatively
affected by the war-related large negative shock to the national
economy and the damage to critical infrastructure. The risk of
deterioration in liquidity and in Dnipro's ability to service its
current or new debt and to support its indebted municipal companies
is elevated. In addition, there is uncertainty about the pace of a
future economic recovery, capital market access and the cost of
debt after the war ends.

Dnipro's financial situation did not deteriorate in 2022. The
operating balance was positive and Fitch assumes the same for 2023.
The city's direct debt decreased in 2022 in line with repayments.
It plans no debt in 2023, but Fitch assumes it might start to incur
debt should the war end this year. The municipal companies' debt
increased in 2022.

ESG - Political Stability and Rights: The invasion by Russia and
ongoing full-scale war has severely compromised the city's
political stability and the security outlook. The war is resulting
in the death of city's inhabitants and extensive property damage,
with the aim of changing the city's government and/or occupying its
territory.

ESG - Creditor Rights: The protracted war has weakened the city's
ability and willingness to service and repay debt. The city's
liquidity is deteriorating and the Ukrainian sovereign's
willingness to allow the use of foreign-currency reserves for debt
service in foreign currency is diminishing, while costs of
preserving urban and communal functions for the city are rising.

DERIVATION SUMMARY

Dnipro remains institutionally strongly linked to the credit
quality of the Ukrainian sovereign (CC/CCC-), which is severely
affected by the Russian-Ukrainian war. Fitch based its rating
derivation on the agency's rating definition for Dnipro and the
'ccc' Standalone Credit Profile reflects Fitch's view that a
default on current and new debt that might be taken in the short
term is a real possibility. Consequently, Dnipro could have
significant refinancing needs and high liquidity risk accompanied
by weak debt coverage metrics. The 'CC'/'CCC'- IDRs are capped by
the sovereign rating.

KEY ASSUMPTIONS

Qualitative and quantitative assumptions:

Risk Profile: 'Vulnerable'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Weaker'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'b'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Sovereign Cap (LT IDR): 'CC'

Sovereign Cap (LT LC IDR) 'CCC-'

Sovereign Floor: 'N/A'

Quantitative assumptions - Issuer Specific

Fitch's rating case scenario is irrelevant for ratings that are
based on rating definitions, instead it is an assumption of the
issuer's capability (liquidity) and willingness to service it. The
assumption applies to all rated Ukrainian cities irrespective of
whether direct debt exist currently as Fitch assumes that a need
for debt may arise in the short term or debt servicing resulting
from the guarantees issued as collateral for the debt of municipal
companies may materialise in the short term.

Liquidity and Debt Structure

Based on the information provided by Dnipro, the city is current on
all financial commitments. Liquidity improved significantly in 2022
and the city's direct debt decreased in line with scheduled and
unscheduled repayments. Dnipro's overall debt - i.e. direct debt
including municipal companies' debt and the interest-free treasury
loans contracted prior to 2014 and to be written off by the state -
had decreased to UAH5,192.6 million at end-2022 (2021: UAH5,901.6
million).

Issuer Profile

Dnipro is one of the largest cities in Ukraine with a population of
about one million in 2021 (last available public data). The city's
economy was industrialised and was dominated by metallurgy and
heavy manufacturing sectors before the war started.

RATING SENSITIVITIES

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

Downgrade of Ukraine's sovereign ratings.

Weakened liquidity that could pressure the city's ability to
service debt.

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

An upgrade of Ukraine's IDRs would lead to an upgrade of the city's
IDRs provided that the city's Debt Sustainability remains in the
'b' category.

ESG Considerations

Dnipro has an ESG Relevance Score of '5' for Political Stability
and Rights to reflect the invasion by Russia and ongoing full-scale
war, which has severely compromised the city's political stability
and the security outlook. This has a negative impact on the credit
profile and is highly relevant to the ratings. The war is resulting
in the death of city inhabitants and extensive property damage,
with the aim of changing the city's government and/or occupying its
territory.

Dnipro has an ESG Relevance Score of '5' for Creditor Rights to
reflect the weakened ability and willingness of the city to service
and repay debt. This has a negative impact on the credit profile
and is highly relevant to the ratings. The protracted war is
resulting in depletion of liquidity and diminishing Ukrainian
sovereign's willingness to allow the use of foreign currency
reserves for debt service in foreign currency, while costs of
preserving the urban and communal functions for the city are
rising.

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.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Dnipro's ratings are linked to the sovereign ratings.

   Entity/Debt            Rating                 Prior
   -----------            ------                 -----
Dnipro City      LT IDR    CC      Affirmed        CC
                 ST IDR    C       Affirmed         C
                 LC LT IDR CCC-    Affirmed       CCC-
                 Natl LT   AA-(ukr)Affirmed   AA-(ukr)

DTEK ENERGY: Fitch Lowers LongTerm IDRs to 'RD' Then Hikes to 'CC'
------------------------------------------------------------------
Fitch Ratings has downgraded DTEK Energy B.V.'s Long-Term Foreign-
and Local-Currency Issuer Default Ratings (IDRs) to 'Restricted
Default' (RD) from 'C' following the execution of the tender offer
to the holders of its 7.0%/7.5% senior secured payment-in-kind
(PIK) toggle notes due 2027.

Fitch views the tender offer as a distressed debt exchange (DDE).
Fitch has simultaneously upgraded the IDR to 'CC' from 'RD',
reflecting DTEK Energy's post-restructuring profile with high
default risk.

DTEK Energy's 'CC' IDR reflects its tight liquidity, which follows
the severe operational disruptions resulting from Russia's invasion
of Ukraine.

KEY RATING DRIVERS

DDE: Fitch regards DTEK Energy's tender offer for part of its bonds
as a DDE, as the tender offer was executed well below par and is
part of a series of measures the company is adopting to restructure
its financial liabilities. However, Fitch deems default as still
very likely, as the company is experiencing severe distress,
including harsh operational disruptions and limited liquidity.

Repurchase Below Par: Following the execution of the tender offer,
DTEK Energy used USD80 million to repurchase USD193.5 million of
its outstanding USD1.5 billion 7.0%-7.5% senior secured PIK toggle
notes due 2027. The buyback consisted of a material reduction in
terms as it was executed well below par with an average price of
41% of the nominal.

Low Residual Liquidity: Following the USD26 million coupon payment
of the toggle notes due in March 2023 and the bond repurchase
within the tender offer in April 2023, DTEK Energy has sufficient
cash, held partly in Ukraine and partly abroad, for the upcoming
coupon and debt payment in June 2023. However, it may prove
insufficient for debt service payments this year. DTEK Energy's
upcoming debt maturities are low, with USD10 million notes
repayment in June 2023 and USD10 million in December 2023. The
interest payments will average USD26 million every quarter.

DTEK Energy so far has not been granted an exception to Ukraine's
foreign-exchange transfer moratorium, without which it cannot
transfer abroad any cash available in Ukraine to service the
foreign-currency notes.

Operating Activity Distorted: DTEK Energy's post-DDE rating
reflects its tight liquidity, which follows the severe operational
disruptions resulting from Russia's invasion of Ukraine. Fitch
views the risk of further material disruptions in the company's
operations as high, which may prevent DTEK Energy from generating
sufficient cash flow to pay its interest and debt obligations
scheduled for 2023.

The war has resulted in low electricity demand and production,
reduced payment collections, increased critical repairs, and
mandatory fixed costs. DTEK Energy's main priority is to ensure
supplies of electricity and heat to industrial and residential
consumers, thereby supporting Ukraine's energy security.

DERIVATION SUMMARY

In Fitch's view, the company's liquidity metrics are in line with
the 'CC' category, which indicates very high credit risk.

KEY ASSUMPTIONS

KEY RECOVERY RATING ASSUMPTIONS

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

- A 10% administrative claim

GC Approach

- Its GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganisation EBITDA level, upon which Fitch has based the
valuation of the company

- The Fitch-calculated GC EBITDA of UAH2 billion reflects potential
pressure resulting from the sustained invasion of Ukraine

- Debt is based on its estimate of post-restructuring debt

- An enterprise value multiple of 3.0x

- Eurobonds, bank loans and other debt rank equally among
themselves

Its waterfall analysis generated a waterfall generated recovery
computation for the notes in the 'RR5' band (11%-30%), indicating a
'C' instrument rating.

RATING SENSITIVITIES

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

- Cessation of military operations, and resumption of normal
business operations with the stabilisation of cash flow and an
improved liquidity position

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

- The rating would be downgraded on signs that a renewed
default-like process has begun, for example, a formal launch of
another debt exchange proposal involving a material reduction in
terms to avoid a traditional payment default

- Non-payment of the coupon or debt obligations, or steps towards
further debt restructuring

- The IDR will be downgraded to 'D' if DTEK Energy enters into
bankruptcy filings, administration, receivership, liquidation or
other formal winding-up procedures, or ceases business

LIQUIDITY AND DEBT STRUCTURE

See above.

ISSUER PROFILE

DTEK Energy is the largest private power-generating company in
Ukraine, with a market share of electricity production of about
18%-19% in 2019-2020.

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.

   Entity/Debt              Rating              Recovery  Prior
   -----------              ------              --------  -----
DTEK Energy B.V.   LT IDR    RD       Downgrade              C
                   LT IDR    CC       Upgrade               RD
                   ST IDR    RD       Downgrade              C
                   ST IDR    C        Upgrade               RD
                   LC LT IDR CC       Upgrade                C
                   LC LT IDR RD       Downgrade             CC
                   LC ST IDR RD       Downgrade              C
                   LC ST IDR C        Upgrade               RD
                   Natl LT   RD(ukr)  Downgrade          C(ukr)
                   Natl LT   CCC(ukr) Upgrade           RD(ukr)

   senior
   unsecured       LT        C        Affirmed    RR5        C

KHARKOV CITY: Fitch Affirms LongTerm Foreign Currency IDRs at 'CC'
------------------------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Kharkov's
Long-Term Foreign-Currency Issuer Default Ratings (IDR) at 'CC' and
Long-Term Local-Currency IDR at 'CCC-'. Ratings at this level
typically do not carry Outlooks due to their high volatility.

The affirmation reflects Fitch's view that the risk of
deterioration in liquidity and in Kharkov's ability to service its
new debt and to support its indebted municipal companies remains
elevated.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

The Risk Profile remains 'Vulnerable' and the city has the six Key
Risk Factors (KRFs) assessed at 'Weaker'. The 'Weaker' assessment
of the KRFs is the lowest possible under Fitch's International
Local and Regional Governments (LRG) Rating Criteria and reflects
the interference from and strong interdependence of the local
governments (LGs) on the Ukrainian sovereign.

The assessment reflects Fitch's view of a very high risk that the
city's ability to cover debt service with the operating balance may
weaken unexpectedly over the scenario horizon notably due to lower
revenue and higher expenditure.

Revenue Robustness: 'Weaker'

The Ukraine government and its institutions (central government,
tax collection, banking system) are still largely intact. However,
the damage to critical municipal and social infrastructure -
housing, schools and kindergartens, hospitals, roads, municipal
building and work establishments - and the displacement of a large
number of citizens to other places in Ukraine or abroad, restrict
the LGs' revenues robustness and adjustability.

Revenue Adjustability: 'Weaker'

Nationally collected income taxes, the LG's main revenue source,
increased by 29% on average (Fitch rated cities) in 2022, whereas
transfers from the state budget (another major revenue) source
decreased by 14% on average. The scope of changes in the revenue
composition and 2022/2021 change, was dependent on the impact of
the war on the individual city.

Expenditure Sustainability: 'Weaker'

Fitch assumes spending pressure will increase strongly with rising
inflation, broken supply chains driving prices for goods and
services up and large reconstruction efforts. Additionally,
municipal companies performing municipal services (transportation,
heating, solid waste, water and sewage) are largely not
self-supporting, and will increasingly rely on subsidies, capital
injections and direct debt repayments made by Kharkov, which will
only add to its own difficulties.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs, current transfers made and spending on goods and services.

Liabilities & Liquidity Robustness: 'Weaker'

In its view, Kharkov is facing increasing material risk for its
current and future debt due to greater uncertainty about market
access, cost of debt and FX exchange rates. This is despite the
supportive policy of the National Bank of Ukraine and positive
attitude of existing domestic and international lenders towards
LGs. Funding for Ukrainian cities and their companies comes from
capital markets, local commercial banks, and institutional lenders,
is of short to medium term and often in FX (US dollars or euros).
Fitch focuses on Fitch-adjusted debt, as it reclassifies contingent
debt of not self-supporting companies.

Liabilities & Liquidity Flexibility: 'Weaker'

Fitch assumes that the cities may start to intake new debt to
finance crucial investments into infrastructure and public
transport, which could not be performed due to the war. New
indebtedness may start to be incurred in 2023, or 2024 at the
latest, depending on the overall situation, as there is a large
need to resume investments. Funding could be provided by domestic
banks and IFIs, who already declared readiness to support the
reconstruction of Ukrainian cities.

Debt Sustainability: 'b category'

Fitch has maintained Kharkov's debt sustainability assessment at
'b' to reflect that the city's overall performance has been
negatively affected by the war-related large negative shock to the
national economy and the damage to critical infrastructure. The
risk of deterioration in liquidity and in Kharkov's ability to
service its current or new debt and to support its indebted
municipal companies is elevated. In addition, there is uncertainty
about the pace of a future economic recovery, capital market access
and the cost of debt after the war ends.

Kharkov's financial situation deteriorated in 2022, but the
operating balance was positive and Fitch assumes the same for 2023.
The city's direct debt decreased in line with repayments. It plans
no debt in 2023, but Fitch assumes it might start to incur debt
should the war end this year. Municipal companies' debt increased
in 2022.

ESG - Political Stability and Rights: The invasion by Russia and
ongoing full-scale war has severely compromised the city's
political stability and the security outlook. The war is resulting
in the death of city's inhabitants and extensive property damage,
with the aim of changing the city's government and/or occupying its
territory.

ESG - Creditor Rights: The protracted war has weakened the city's
ability and willingness to service and repay debt. The city's
liquidity is deteriorating and the Ukrainian sovereign's
willingness to allow the use of foreign-currency reserves for debt
service in foreign currency is diminishing, while costs of
preserving the urban and communal functions for the city are on the
rise.

DERIVATION SUMMARY

Kharkov remains institutionally strongly linked to the credit
quality of the Ukrainian sovereign (CC/CCC-), which is severely
affected by the Russian-Ukrainian war. Fitch based its rating
derivation on the agency's rating definition for Kharkov and the
'ccc' Standalone Credit Profile reflects Fitch's view that a
default on current and new debt that might be taken in the short
term is a real possibility. Consequently, Kharkov could have
significant refinancing needs and high liquidity risk accompanied
by weak debt coverage metrics. The 'CC'/'CCC'- IDRs are capped by
the sovereign rating.

Debt Ratings

The ratings of Kharkov's domestic bonds are aligned with the city's
Long-Term IDRs. This is because Fitch views the domestic bonds as
direct, unconditional senior unsecured obligations of the city,
ranking pari passu with all of its other present and future
unsecured and unsubordinated obligations.

KEY ASSUMPTIONS

Risk Profile: 'Vulnerable'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Weaker'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'b'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Sovereign Cap (LT IDR): 'CC'

Sovereign Cap (LT LC IDR) 'CCC-'

Sovereign Floor: 'N/A'

Quantitative assumptions - Issuer Specific

Fitch's rating case scenario is irrelevant for ratings that are
based on rating definitions, instead it is an assumption of the
issuer's capability (liquidity) and willingness to service it. The
assumption applies to all rated Ukrainian cities irrespective of
whether direct debt currently exists as Fitch assumes that a need
for debt may arise in the short term or debt servicing resulting
from the guarantees issued as collateral for the debt of municipal
companies may materialise in the short term.

Liquidity and Debt Structure

Based on the information provided by Kharkov, the city is current
on all financial commitments. Liquidity improved significantly in
2022 and the city's direct debt decreased in line with scheduled
and unscheduled repayments. Kharkov's overall debt - i.e. direct
debt including municipal companies' debt and the interest-free
treasury loans contracted prior to 2014 and to be written off by
the state - had increased to UAH5,677.3 million at end-2022 (2021:
UAH5,007.1 million).

Issuer Profile

Kharkov is the capital of Kharkov region and had a population of
about 1.5 million in 2021 (last available public data). It had a
diversified urban economy supported by a large number of companies
in various sectors before the war started.

RATING SENSITIVITIES

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

- Downgrade of Ukraine's sovereign ratings.

- Weakened liquidity that could pressure the city's ability to
service debt.

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

- An upgrade of Ukraine's IDRs would lead to an upgrade of the
city's IDRs provided that the city's Debt Sustainability remains in
the 'b' category.

ESG Considerations

Kharkov has an ESG Relevance Score of '5' for Political Stability
and Rights to reflect the invasion by Russia and ongoing full-scale
war, which has severely compromised the city's political stability
and the security outlook. This has a negative impact on the credit
profile and is highly relevant to the ratings. The war is resulting
in the death of city inhabitants and extensive property damage,
with the aim of changing the city's government and/or occupying its
territory.

Kharkov has an ESG Relevance Score of '5' for Creditor Rights to
reflect the weakened ability and willingness of the city to service
and repay debt. This has a negative impact on the credit profile
and is highly relevant to the ratings. The protracted war is
resulting in depletion of liquidity and diminishing Ukrainian
sovereign's willingness to allow the use of foreign currency
reserves for debt service in foreign currency, while costs of
preserving the urban and communal functions for the city are on the
rise.

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.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Kharkov's ratings are linked to the sovereign ratings.

   Entity/Debt              Rating                 Prior
   -----------              ------                 -----
Kharkov, City of   LT IDR    CC      Affirmed        CC
                   ST IDR    C       Affirmed         C
                   LC LT IDR CCC-    Affirmed       CCC-
                   Natl LT   AA-(ukr)Affirmed   AA-(ukr)

   senior
   unsecured       LT        CCC-    Affirmed       CCC-

KRYVYI RIH CITY: Fitch Affirms LongTerm Foreign Currency IDR at CC
------------------------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Kryvyi Rih's
Long-Term Foreign-Currency Issuer Default Ratings (IDR) at 'CC' and
Long-Term Local-Currency IDR at 'CCC-'. Ratings at this level
typically do not carry Outlooks due to their high volatility.

The affirmation reflects Fitch's view that the risk of
deterioration in liquidity and in Kryvyi Rih's ability to service
its new debt and to support its indebted municipal companies
remains elevated.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

The Risk Profile remains 'Vulnerable' and the city has six Key Risk
Factors (KRFs) assessed at 'Weaker'. The 'Weaker' assessment of the
KRFs is the lowest possible under Fitch's International Local and
Regional Governments (LRG) Rating Criteria and reflects the
interference from and strong interdependence of the local
governments (LGs) on the Ukrainian sovereign.

The assessment reflects Fitch's view of a very high risk that the
city's ability to cover debt service with the operating balance may
weaken unexpectedly over the scenario horizon, notably due to lower
revenue and higher expenditure.

Revenue Robustness: 'Weaker'

The Ukraine government and its institutions (central government,
tax collection, banking system) are still largely intact. However,
the damage to critical municipal and social infrastructure -
housing, schools and kindergartens, hospitals, roads, municipal
building and work establishments - and the displacement of a large
number of citizens to other places in Ukraine or abroad, restrict
LGs' revenues robustness and adjustability.

Revenue Adjustability: 'Weaker'

Nationally-collected income taxes, LGs' main revenue source,
increased by 29% on average (Fitch-rated cities) in 2022, whereas
transfers from the state budget (another major revenue source)
decreased by 14% on average. The scope of changes in the revenue
composition and 2022/2021 change was dependent on the impact of the
war on the individual city.

Expenditure Sustainability: 'Weaker'

Fitch assumes spending pressure will increase strongly with rising
inflation, broken supply chains driving prices for goods and
services high and large reconstruction efforts. Additionally,
municipal companies performing municipal services (transportation,
heating, solid waste, water and sewage) are largely not
self-supporting, and will increasingly rely on subsidies, capital
injections and direct debt repayments made by Kryvyi Rih, which
will only add to its own difficulties.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs, current transfers made and spending on goods and services.

Liabilities & Liquidity Robustness: 'Weaker'

In its view, Kryvyi Rih may face increasing, material risk for its
future debt due to greater uncertainty for market access, cost of
debt and FX exchange rates. This is despite the supportive policy
of the National Bank of Ukraine and the positive attitude of
existing domestic and international lenders towards LGs. Funding
for Ukrainian cities and their companies comes from capital
markets, local commercial banks, and institutional lenders, is of
short to medium term and often in FX (US dollars or euros). Fitch
focuses on Fitch-adjusted debt, as it reclassifies contingent debt
of not self-supporting companies.

Liabilities & Liquidity Flexibility: 'Weaker'

Fitch assumes that the city may start to incur new debt to finance
crucial investments into infrastructure and public transport, which
could not be performed due to the war. New indebtedness may start
to be incurred in 2023, or 2024 at the latest, depending on the
overall situation, as there is a large need to resume investments.
Funding could be provided by domestic banks and IFIs, who have
already declared readiness to support the reconstruction of
Ukrainian cities.

Debt Sustainability: 'b category'

Fitch has maintained Kryvyi Rih's debt sustainability assessment at
'b' to reflect that the city's overall performance has been
negatively affected by the war-related large negative shock to the
national economy and the damage to critical infrastructure. The
risk of deterioration in liquidity and in Kryvyi Rih's ability to
service its new debt and to support its indebted municipal
companies is elevated. In addition, there is uncertainty about the
pace of a future economic recovery, capital market access and the
cost of debt after the war ends.

Kryvyi Rih's financial situation did not deteriorate in 2022. The
operating balance was positive and Fitch assumes the same for 2023.
The city was debt free in 2021-2022. It plans no debt in 2023, but
Fitch assumes it might start to incur debt, should the war end this
year. Municipal companies' debt did not increase in 2022 and plans
for debt-financed investments of the heating company
Kryvbasteploenergo and the high-speed tram are on hold.

ESG - Political Stability and Rights: The invasion by Russia and
ongoing full-scale war has severely compromised the city's
political stability and the security outlook. The war is resulting
in the death of city's inhabitants and extensive property damage,
with the aim of changing the city's government and/or occupying its
territory.

ESG - Creditor Rights: The protracted war has weakened the city's
ability and willingness to service and repay debt. The city's
liquidity is deteriorating and the Ukrainian sovereign's
willingness to allow the use of foreign-currency reserves for debt
service in foreign currency is diminishing, while costs of
preserving urban and communal functions for the city are rising.

DERIVATION SUMMARY

Kryvyi Rih remains institutionally strongly linked to the credit
quality of the Ukrainian sovereign (CC/CCC-), which is severely
affected by the Russian-Ukrainian war. Fitch based its rating
derivation on the agency's rating definition for Kryvyi Rih and the
'ccc' Standalone Credit Profile reflects Fitch's view that a
default on new debt that might be taken in the short term is a real
possibility. Consequently, Kryvyi Rih could have significant
refinancing needs and high liquidity risk accompanied by weak debt
coverage metrics. The 'CC'/'CCC-' IDRs are capped by the sovereign
rating.

KEY ASSUMPTIONS

Qualitative and quantitative assumptions:

Risk Profile: 'Vulnerable'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Weaker'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'b'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Sovereign Cap (LT IDR): 'CC'

Sovereign Cap (LT LC IDR) 'CCC-'

Sovereign Floor: 'N/A'

Quantitative assumptions - Issuer Specific

Fitch's rating case scenario is irrelevant for ratings that are
based on rating definitions, instead it is an assumption of the
issuer's capability (liquidity) and willingness to service it. The
assumption applies to all rated Ukrainian cities irrespective of
whether direct debt exist currently as Fitch assumes that a need
for debt may arise in the short term or debt servicing resulting
from the guarantees issued as collateral for the debt of municipal
companies may materialise in the short term.

Liquidity and Debt Structure

Based on the information provided by Kryvyi Rih, the city is
current on all financial commitments. Liquidity improved
significantly in 2022 and the city remained debt free in 2022.
Kryvyi Rih's overall debt - i.e. direct debt including municipal
companies' debt and the interest-free treasury loans contracted
prior to 2014 and to be written off by the state - had increased to
UAH427.3 million at end-2022 (2021: UAH400.5 million).

Issuer Profile

Kryvyi Rih is in the Dnipropetrovsk Region and had a population of
about 620,000 in 2021 (last available public data). Iron-ore mining
and processing industry dominated the city's economy before the war
start.

RATING SENSITIVITIES

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

- Downgrade of Ukraine sovereign ratings.

- Weakened liquidity that could pressurise the ability to service
debt.

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

- An upgrade of Ukraine's IDRs would lead to an upgrade of the
city's IDRs provided that the city's Debt Sustainability remains in
the 'b' category.

ESG Considerations

Kryvyi Rih of has an ESG Relevance Score of '5' for Political
Stability and Rights to reflect the invasion by Russia and ongoing
full-scale war, which has severely compromised the city's political
stability and the security outlook. This has a negative impact on
the credit profile and is highly relevant to the ratings. The war
is resulting in the death of city inhabitants and extensive
property damage, with the aim of changing the city's government
and/or occupying its territory.

Kryvyi Rih of has an ESG Relevance Score of '5' for Creditor Rights
to reflect the weakened ability and willingness of the city to
service and repay debt. This has a negative impact on the credit
profile and is highly relevant to the ratings. The protracted war
is resulting in depletion of liquidity and diminishing Ukrainian
sovereign's willingness to allow the use of foreign currency
reserves for debt service in foreign currency, while costs of
preserving urban and communal functions for the city are rising.

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.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Kryvyi Rih's ratings are linked to the sovereign ratings.

   Entity/Debt             Rating                Prior
   -----------             ------                -----
Kryvyi Rih City   LT IDR    CC      Affirmed       CC
                  ST IDR    C       Affirmed        C
                  LC LT IDR CCC-    Affirmed      CCC-
                  Natl LT   A+(ukr) Affirmed   A+(ukr)

KYIV CITY: Fitch Affirms LongTerm Foreign Currency IDR at 'CC'
--------------------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Kyiv's Long-Term
Foreign-Currency Issuer Default Ratings (IDR) at 'CC' and Long-Term
Local-Currency IDR at 'CCC-'. Ratings at this level typically do
not carry Outlooks due to their high volatility.

The affirmation reflects Fitch's view that the risk of
deterioration in liquidity and in Kyiv's ability to service its new
debt and to support its indebted municipal companies remains
elevated.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

The Risk Profile remains 'Vulnerable' and the city has the six Key
Risk Factors (KRFs) assessed at 'Weaker'. The 'Weaker' assessment
of the KRFs is the lowest possible under Fitch's International
Local and Regional Governments (LRG) Rating Criteria and reflects
the interference from and strong interdependence of the local
governments (LGs) on the Ukrainian sovereign.

The assessment reflects Fitch's view of a very high risk that the
city's ability to cover debt service with the operating balance may
weaken unexpectedly over the scenario horizon notably due to lower
revenue and higher expenditure.

Revenue Robustness: 'Weaker'

The Ukraine government and its institutions (central government,
tax collection, banking system) are still largely intact. However,
the damage to critical municipal and social infrastructure -
housing, schools and kindergartens, hospitals, roads, municipal
building and work establishments - and the displacement of a large
number of citizens to other places in Ukraine or abroad, restrict
LGs' revenues robustness and adjustability.

Revenue Adjustability: 'Weaker'

Nationally collected income taxes, LGs' main revenue source,
increased by 29% on average (Fitch rated cities) in 2022, whereas
transfers from the state budget (another major revenue source)
decreased by 14% on average. The scope of changes in the revenue
composition and 2022/2021 change, was dependent on the impact of
the war on the individual city.

Expenditure Sustainability: 'Weaker'

Fitch assumes spending pressure will increase strongly with rising
inflation, broken supply chains driving prices for goods and
services high and large reconstruction efforts. Additionally,
municipal companies performing municipal services (transportation,
heating, solid waste, water and sewage) are largely not
self-supporting, and will increasingly rely on subsidies, capital
injections and direct debt repayments made by Kyiv, which can only
add to its own difficulties.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs, current transfers made and spending on goods and services.

Liabilities & Liquidity Robustness: 'Weaker'

In its view, Kyiv is facing increasing, material risk for its
current and its future debt due to greater uncertainty for market
access, cost of debt and FX exchange rates. This is despite the
supportive policy of the National Bank of Ukraine and positive
attitude towards LGs of existing domestic and international
lenders. Ukrainian cities' and their companies' funding come from
capital markets, local commercial banks, and institutional lenders,
is of short to medium term and often in FX (US dollars or euros).
Fitch focuses on Fitch-adjusted debt, as it reclassifies contingent
debt of not self-supporting companies.

Liabilities & Liquidity Flexibility: 'Weaker'

Fitch assumes that the cities may start to intake new debt to
finance crucial investments into infrastructure and public
transport, which could not be performed due to the war. New
indebtedness may start to incur already in 2023, or in 2024 at the
latest, depending on the overall situation, as there is a large
necessity to resume investments. Funding could be provided by
domestic banks and IFIs, who already declared readiness to support
the reconstruction of Ukrainian cities.

Debt Sustainability: 'b category'

Fitch has maintained Kyiv's debt sustainability assessment at 'b'
to reflect that the city's overall performance has been negatively
affected by the war-related large negative shock to the national
economy and the damage to critical infrastructure. The risk of
deterioration in liquidity and in Kyiv's ability to service its
current or new debt and to support its indebted municipal companies
is elevated. In addition, there is uncertainty about the pace of a
future economic recovery, capital market access and the cost of
debt after the war ends.

Kyiv's financial situation did not deteriorate in 2022, the
operating balance was positive and Fitch assumes the same for 2023.
The city's direct debt decreased in line with repayments. It plans
no debt in 2023, but Fitch assumes it might start to incur debt
should the war end this year. Municipal companies' debt did not
increase in 2022 and plans for debt-financed investments of the
heating company Kyivteploenergo are on hold.

ESG - Political Stability and Rights: The invasion by Russia and
ongoing full-scale war has severely compromised the city's
political stability and the security outlook. The war is resulting
in the death of city's inhabitants and extensive property damage,
with the aim of changing the city's government and/or occupying its
territory.

ESG - Creditor Rights: The protracted war has weakened the city's
ability and willingness to service and repay debt. The city's
liquidity is deteriorating and the Ukrainian sovereign's
willingness to allow the use of foreign-currency reserves for debt
service in foreign currency is diminishing, while costs of
preserving the urban and communal functions for the city are on the
rise.

DERIVATION SUMMARY

Kyiv remains institutionally strongly linked to the credit quality
of the Ukrainian sovereign (CC/CCC-), which is severely affected by
the Russian-Ukrainian war. Fitch based its rating derivation on the
agency's rating definition for Kyiv and the 'ccc' Standalone Credit
Profile reflects Fitch's view that a default on current and new
debt that might be taken in the short term is a real possibility.
Consequently, Kyiv could have significant refinancing needs and
high liquidity risk accompanied by weak debt coverage metrics. The
'CC'/'CCC-' IDRs are capped by the sovereign rating.

Debt Ratings

The ratings of Kyiv's domestic bonds are aligned with the city's
Long-Term IDRs. This is because Fitch views the domestic bonds as
direct, unconditional senior unsecured obligations of the city,
ranking pari passu with all of its other present and future
unsecured and unsubordinated obligations.

KEY ASSUMPTIONS

Qualitative and quantitative assumptions:


Risk Profile: 'Vulnerable'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Weaker'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'b'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Sovereign Cap (LT IDR): 'CC'

Sovereign Cap (LT LC IDR) 'CCC-'

Sovereign Floor: 'N/A'

Quantitative assumptions - Issuer Specific

Fitch's rating case scenario is irrelevant for ratings that are
based on rating definitions, instead it is an assumption of the
issuer's capability (liquidity) and willingness to service it. The
assumption applies to all rated Ukrainian cities irrespective of
whether direct debt exist currently as Fitch assumes that a need
for debt may arise in the short term or debt servicing resulting
from the guarantees issued as collateral for the debt of municipal
companies may materialise in the short term.

Liquidity and Debt Structure

Based on the information provided by Kyiv, the city is current on
all financial commitments. Liquidity improved significantly in 2022
and the city's direct debt decreased in line with scheduled
repayments. Kyiv's overall debt - i.e. direct debt including
municipal companies' debt and the interest-free treasury loans
contracted prior to 2014 and to be written off by the state - had
decreased to UAH6,166. 9 million at end-2022 (2021: UAH7,729.9
million).

Kyiv fully redeemed the senior unsecured debt of special financial
vehicle PRB Kyiv Finance Plc in 2022 and has no other outstanding
FX debt.

Issuer Profile

Kyiv is the capital of Ukraine and is the largest and wealthiest
city in the country. Its population was about three million in 2021
(last available public data) and gross city product accounts for
about 23% of national GDP.

RATING SENSITIVITIES

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

- Downgrade of Ukraine's sovereign ratings.

- Weakened liquidity that could pressure the city's ability to
service debt.

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

- An upgrade of Ukraine's IDRs would lead to an upgrade of the
city's IDRs, provided that the city's Debt Sustainability remains
in the 'b' category.

ESG Considerations

Kyiv, City of has an ESG Relevance Score of '5' for Political
Stability and Rights to reflect the invasion by Russia and ongoing
full-scale war, which has severely compromised the city's political
stability and the security outlook. This has a negative impact on
the credit profile and is highly relevant to the ratings. The war
is resulting in the death of city inhabitants and extensive
property damage, with the aim of changing the city's government
and/or occupying its territory.

Kyiv, City of has an ESG Relevance Score of '5' for Creditor Rights
to reflect the weakened ability and willingness of the city to
service and repay debt. This has a negative impact on the credit
profile and is highly relevant to the ratings. The protracted war
is resulting in depletion of liquidity and diminishing Ukrainian
sovereign's willingness to allow the use of foreign currency
reserves for debt service in foreign currency, while costs of
preserving the urban and communal functions for the city are on the
rise.

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.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Kyiv's ratings are linked to the sovereign ratings.

   Entity/Debt             Rating                Prior
   -----------             ------                -----
Kyiv, City of     LT IDR    CC      Affirmed       CC
                  ST IDR    C       Affirmed        C
                  LC LT IDR CCC-    Affirmed      CCC-
                  Natl LT   A+(ukr) Affirmed   A+(ukr)

   senior
   unsecured      LT        CCC-    Affirmed      CCC-

LVIV CITY: Fitch Affirms LongTerm Foreign Currency IDRs at 'CC'
---------------------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Lviv's Long-Term
Foreign-Currency Issuer Default Ratings (IDR) at 'CC' and Long-Term
Local-Currency IDR at 'CCC-'. Ratings at this level typically do
not carry Outlooks due to their high volatility.

The affirmation reflects Fitch's view that the risk of
deterioration in liquidity and in Lviv's ability to service its new
debt and to support its indebted municipal companies remains
elevated.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

The Risk Profile remains 'Vulnerable' and the city has six Key Risk
Factors (KRFs) assessed at 'Weaker'. The 'Weaker' assessment of the
KRFs is the lowest possible under Fitch's International Local and
Regional Governments (LRG) Rating Criteria and reflects the
interference from and strong interdependence of the local
governments (LGs) on the Ukrainian sovereign.

The assessment reflects Fitch's view of a very high risk that the
city's ability to cover debt service with the operating balance may
weaken unexpectedly over the scenario horizon, notably due to lower
revenue and higher expenditure.

Revenue Robustness: 'Weaker'

The Ukraine government and its institutions (central government,
tax collection, banking system) are still largely intact. However,
the damage to critical municipal and social infrastructure -
housing, schools and kindergartens, hospitals, roads, municipal
building and work establishments - and the displacement of a large
number of citizens to other places in Ukraine or abroad, restrict
LGs' revenues robustness and adjustability.

Revenue Adjustability: 'Weaker'

Nationally-collected income taxes, the LGs' main revenue source,
increased by 29% on average (Fitch rated cities) in 2022, whereas
transfers from the state budget (another major revenue) source
decreased by 14% on average. The scope of changes in the revenue
composition and 2022/2021 change, was dependent on the impact of
the war on the individual city.

Expenditure Sustainability: 'Weaker'

Fitch assumes spending pressure will increase strongly with rising
inflation, broken supply chains driving prices for goods and
services high and large reconstruction efforts. Additionally,
municipal companies performing municipal services (transportation,
heating, solid waste, water and sewage) are largely not
self-supporting, and will increasingly rely on subsidies, capital
injections and direct debt repayments made by Lviv, which will only
add to its own difficulties.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs, current transfers made and spending on goods and services.

Liabilities & Liquidity Robustness: 'Weaker'

In its view, Lviv is facing increasing material risk for its
current and its future debt due to greater uncertainty about market
access, cost of debt and FX exchange rates. This is despite the
supportive policy of the National Bank of Ukraine and positive
attitude of existing domestic and international lenders towards
LGs. Funding for Ukrainian cities and their companies comes from
capital markets, local commercial banks, and institutional lenders,
is of short to medium term and often in FX (US dollars or euros).
Fitch focuses on Fitch-adjusted debt, as it reclassifies contingent
debt of not self-supporting companies.

Liabilities & Liquidity Flexibility: 'Weaker'

Fitch assumes that the cities may start to incur new debt to
finance crucial investments into infrastructure and public
transport, which could not be performed due to the war. New
indebtedness may start to be incurred in 2023, or 2024 at the
latest, depending on the overall situation, as there is a large
need to resume investments. Funding could be provided by domestic
banks and IFIs, who have already declared readiness to support the
reconstruction of Ukrainian cities.

Debt Sustainability: 'b category'

Fitch has maintained Lviv's debt sustainability assessment at 'b'
to reflect that the city's overall performance has been negatively
affected by the war-related large negative shock to the national
economy and the damage to critical infrastructure. The risk of
deterioration in liquidity and in Lviv's ability to service its
current or new debt and to support its indebted municipal companies
is elevated. In addition, there is uncertainty about the pace of a
future economic recovery, capital market access and the cost of
debt after the war ends.

Lviv's financial situation did not deteriorate in 2022, the
operating balance was positive and Fitch assumes the same for 2023.
The city's direct debt decreased in 2022 in line with repayments.
It plans no debt in 2023, but Fitch assumes it might start to incur
debt should the war end this year. The municipal companies' debt
increased in 2022.

ESG - Political Stability and Rights: The invasion by Russia and
ongoing full-scale war has severely compromised the city's
political stability and the security outlook. The war is resulting
in the death of city's inhabitants and extensive property damage,
with the aim of changing the city's government and/or occupying its
territory.

ESG - Creditor Rights: The protracted war has weakened the city's
ability and willingness to service and repay debt. The city's
liquidity is deteriorating and the Ukrainian sovereign's
willingness to allow the use of foreign-currency reserves for debt
service in foreign currency is diminishing, while costs of
preserving urban and communal functions for the city are rising.

DERIVATION SUMMARY

Lviv remains institutionally strongly linked to the credit quality
of the Ukrainian sovereign (CC/CCC-), which is severely affected by
the Russian-Ukrainian war. Fitch based its rating derivation on the
agency's rating definition for Lviv and the 'ccc' Standalone Credit
Profile reflects Fitch's view that a default on current and new
debt that might be taken in the short term is a real possibility.
Consequently, Lviv's could have significant refinancing needs and
high liquidity risk accompanied by weak debt coverage metrics. The
'CC'/'CCC'- IDRs are capped by the sovereign rating.

KEY ASSUMPTIONS

Risk Profile: 'Vulnerable'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Weaker'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'b'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Sovereign Cap (LT IDR): 'CC'

Sovereign Cap (LT LC IDR) 'CCC-'

Sovereign Floor: 'N/A'

Quantitative assumptions - Issuer Specific

Fitch's rating case scenario is irrelevant for ratings that are
based on rating definitions, instead it is an assumption of the
issuer's capability (liquidity) and willingness to service it. The
assumption applies to all rated Ukrainian cities irrespective of
whether direct debt exist currently as Fitch assumes that a need
for debt may arise in the short term or debt servicing resulting
from the guarantees issued as collateral for the debt of municipal
companies may materialise in the short term.

Liquidity and Debt Structure

Based on the information provided by Lviv, the city is current on
all financial commitments. Liquidity improved significantly in 2022
and the city's direct debt decreased in line with scheduled and
unscheduled repayments. Lviv's overall debt - i.e. direct debt
including municipal companies' debt and the interest-free treasury
loans contracted prior to 2014 and to be written off by the state -
had increased to UAH7,160.6 million at end-2022 (2021: UAH6,969.8
million).

Issuer Profile

Lviv is the capital of the Lviv Region and had a population of
about 700,000 in 2021 (last available public data). The city's
economy is diversified across manufacturing and services.

RATING SENSITIVITIES

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

- Downgrade of Ukraine's sovereign ratings.

- Weakened liquidity that could pressure the city's ability to
service debt.

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

- An upgrade of Ukraine's IDRs would lead to an upgrade of the
city's IDRs provided that the city's Debt Sustainability remains in
the 'b' category.

ESG Considerations

Lviv of has an ESG Relevance Score of '5' for Political Stability
and Rights to reflect the invasion by Russia and ongoing full-scale
war, which has severely compromised the city's political stability
and the security outlook. This has a negative impact on the credit
profile and is highly relevant to the ratings. The war is resulting
in the death of city inhabitants and extensive property damage,
with the aim of changing the city's government and/or occupying its
territory.

Lviv of has an ESG Relevance Score of '5' for Creditor Rights to
reflect the weakened ability and willingness of the city to service
and repay debt. This has a negative impact on the credit profile
and is highly relevant to the ratings. The protracted war is
resulting in depletion of liquidity and diminishing Ukrainian
sovereign's willingness to allow the use of foreign currency
reserves for debt service in foreign currency, while costs of
preserving the urban and communal functions for the city are
rising.

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.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Lviv's ratings are linked to the sovereign ratings.

   Entity/Debt             Rating                 Prior
   -----------             ------                 -----
City of Lviv     LT IDR    CC       Affirmed       CC
                 LC LT IDR CCC-     Affirmed      CCC-
                 Natl LT   AA-(ukr) Affirmed   AA-(ukr)

MYKOLAIV CITY: Fitch Affirms 'CC' LongTerm Foreign Currency IDR
---------------------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Mykolaiv's
Long-Term Foreign-Currency Issuer Default Ratings (IDR) at 'CC' and
Long-Term Local-Currency IDR at 'CCC-'. Ratings at this level
typically do not carry Outlooks due to their high volatility.

The affirmation reflects Fitch's view that the risk of
deterioration in liquidity and in Mykolaiv ability to service its
new debt and to support its indebted municipal companies remains
elevated.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

The Risk Profile remains 'Vulnerable' and the city has six Key Risk
Factors (KRFs) assessed at 'Weaker'. The 'Weaker' assessment of the
KRFs is the lowest possible under Fitch's International Local and
Regional Governments (LRG) Rating Criteria and reflects the
interference from and strong interdependence of the local
governments (LGs) on the Ukrainian sovereign.

The assessment reflects Fitch's view of a very high risk that the
city's ability to cover debt service with the operating balance may
weaken unexpectedly over the scenario horizon, notably due to lower
revenue and higher expenditure.

Revenue Robustness: 'Weaker'

The Ukraine government and its institutions (central government,
tax collection, banking system) are still largely intact. However,
the damage to critical municipal and social infrastructure -
housing, schools and kindergartens, hospitals, roads, municipal
building and work establishments - and the displacement of a large
number of citizens to other places in Ukraine or abroad, restrict
LGs' revenues robustness and adjustability.

Revenue Adjustability: 'Weaker'

Nationally-collected income taxes, the LGs' main revenue source,
increased by 29% on average (Fitch rated cities) in 2022, whereas
transfers from the state budget (another major revenue) source
decreased by 14% on average. The scope of changes in the revenue
composition and 2022/2021 change was dependent on the impact of the
war on the individual city.

Expenditure Sustainability: 'Weaker'

Fitch assumes spending pressure will increase strongly with rising
inflation, broken supply chains driving prices for goods and
services high and large reconstruction efforts. Additionally,
municipal companies performing municipal services (transportation,
heating, solid waste, water and sewage) are largely not
self-supporting, and will increasingly rely on subsidies, capital
injections and direct debt repayments made by Mykolaiv, which will
only add to its own difficulties.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs, current transfers made and spending on goods and services.

Liabilities & Liquidity Robustness: 'Weaker'

In its view, Mykolaiv is facing increasing material risk for its
future debt due to greater uncertainty for market access, cost of
debt and FX exchange rates. This is despite the supportive policy
of the National Bank of Ukraine and positive attitude of existing
domestic and international lenders towards LGs. Funding for
Ukrainian cities and their companies come from capital markets,
local commercial banks, and institutional lenders, is of short to
medium term and often in FX (US dollars or euros). Fitch focuses on
Fitch-adjusted debt, as it reclassifies contingent debt of not
self-supporting companies.

Liabilities & Liquidity Flexibility: 'Weaker'

Fitch assumes that the cities may start to incur new debt to
finance crucial investments into infrastructure and public
transport, which could not be performed due to the war. New
indebtedness may start to be incurred in 2023, or 2024 at the
latest, depending on the overall situation, as there is a large
need to resume investments. Funding could be provided by domestic
banks and IFIs, who have already declared readiness to support the
reconstruction of Ukrainian cities.

Debt Sustainability: 'b category'

Fitch has maintained Mykolaiv's debt sustainability assessment at
'b' to reflect that the city's overall performance has been
negatively affected by the war-related large negative shock to the
national economy and the damage to critical infrastructure. The
risk of deterioration in liquidity and in Mykolaiv's ability to
service its current or new debt and to support its indebted
municipal companies is elevated. In addition, there is uncertainty
about the pace of a future economic recovery, capital market access
and the cost of debt after the war ends.

Mykolaiv's financial situation did not deteriorate in 2022. The
operating balance was positive and Fitch assumes the same for 2023.
The city was debt free in 2021-2022. It plans no debt in 2023, but
Fitch assumes it might start to incur debt should the war end this
year. Municipal companies' debt increased in 2022.

ESG - Political Stability and Rights: The invasion by Russia and
ongoing full-scale war has severely compromised the city's
political stability and the security outlook. The war is resulting
in the death of city's inhabitants and extensive property damage,
with the aim of changing the city's government and/or occupying its
territory.

ESG - Creditor Rights: The protracted war has weakened the city's
ability and willingness to service and repay debt. The city's
liquidity is deteriorating and the Ukrainian sovereign's
willingness to allow the use of foreign-currency reserves for debt
service in foreign currency is diminishing, while costs of
preserving urban and communal functions for the city are rising.

DERIVATION SUMMARY

Mykolaiv remains institutionally strongly linked to the credit
quality of the Ukrainian sovereign (CC/CCC-), which is severely
affected by the Russian-Ukrainian war. Fitch based its rating
derivation on the agency's rating definition for Mykolaiv and the
'ccc' Standalone Credit Profile reflects Fitch's view that a
default on current and new debt that might be taken in the short
term is a real possibility. Consequently, Mykolaiv could have
significant refinancing needs and high liquidity risk accompanied
by weak debt coverage metrics. The 'CC'/'CCC'-IDRs are capped by
the sovereign rating.

KEY ASSUMPTIONS

Risk Profile: 'Vulnerable'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Weaker'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'b'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Sovereign Cap (LT IDR): 'CC'

Sovereign Cap (LT LC IDR) 'CCC-'

Sovereign Floor: 'N/A'

Quantitative assumptions - Issuer Specific

Fitch's rating case scenario is irrelevant for ratings that are
based on rating definitions, instead it is an assumption of the
issuer's capability (liquidity) and willingness to service it. The
assumption applies to all rated Ukrainian cities irrespective of
whether direct debt exist currently as Fitch assumes that a need
for debt may arise in the short term or debt servicing resulting
from the guarantees issued as collateral for the debt of municipal
companies may materialise in the short term.

Liquidity and Debt Structure

Based on the information provided by Mykolaiv, the city is current
on all financial commitments. Liquidity improved significantly in
2022 and the city's direct debt decreased in line with scheduled
and unscheduled repayments. Mykolaiv's overall debt - i.e. direct
debt including municipal companies' debt and the interest-free
treasury loans contracted prior to 2014 and to be written off by
the state - had increased to UAH544.5million at end-2022 (2021:
UAH399.5 million).

Issuer Profile

Mykolaiv is the capital of the Mykolaiv region and had a population
of about 480,000 in (last available public data). The city operates
three sea ports and its economy is related to manufacturing and
services.

RATING SENSITIVITIES

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

- Downgrade of Ukraine's sovereign ratings.

- Weakened liquidity that could pressure the city's ability to
service debt.

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

- An upgrade of Ukraine's IDRs would lead to an upgrade of the
city's IDRs provided that the city's Debt Sustainability remains in
the 'b' category.

ESG Considerations

Mykolaiv has an ESG Relevance Score of '5' for Political Stability
and Rights to reflect the invasion by Russia and ongoing full-scale
war, which has severely compromised the city's political stability
and the security outlook. This has a negative impact on the credit
profile and is highly relevant to the ratings. The war is resulting
in the death of city inhabitants and extensive property damage,
with the aim of changing the city's government and/or occupying its
territory.

Mykolaiv of has an ESG Relevance Score of '5' for Creditor Rights
to reflect the weakened ability and willingness of the city to
service and repay debt. This has a negative impact on the credit
profile and is highly relevant to the ratings. The protracted war
is resulting in depletion of liquidity and diminishing Ukrainian
sovereign's willingness to allow the use of foreign currency
reserves for debt service in foreign currency, while costs of
preserving urban and communal functions for the city are rising.

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.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Mykolaiv's ratings are linked to the sovereign ratings.

   Entity/Debt               Rating            Prior
   -----------               ------            -----
Mykolaiv, City of   LT IDR    CC    Affirmed     CC
                    LC LT IDR CCC-  Affirmed    CCC-

ODESA CITY: Fitch Affirms LongTerm Foreign Currency IDR at 'CC'
---------------------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Odesa's Long-Term
Foreign-Currency Issuer Default Ratings (IDR) at 'CC' and Long-Term
Local-Currency IDR at 'CCC-'. Ratings at this level typically do
not carry Outlooks due to their high volatility.

The affirmation reflects Fitch's view that the risk of
deterioration in liquidity and in Odesa's ability to service its
new debt and to support its indebted municipal companies remains
elevated.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

The Risk Profile remains 'Vulnerable' and the city has the six Key
Risk Factors (KRFs) assessed at 'Weaker'. The 'Weaker' assessment
of the KRFs is the lowest possible under Fitch's International
Local and Regional Governments (LRG) Rating Criteria and reflects
the interference from and strong interdependence of the local
governments (LGs) on the Ukrainian sovereign.

The assessment reflects Fitch's view of a very high risk that the
city's ability to cover debt service with the operating balance may
weaken unexpectedly over the scenario horizon, notably due to lower
revenue and higher expenditure.

Revenue Robustness: 'Weaker'

The Ukraine government and its institutions (central government,
tax collection, banking system) are still largely intact. However,
the damage to critical municipal and social infrastructure -
housing, schools and kindergartens, hospitals, roads, municipal
building and work establishments - and the displacement of a large
number of citizens to other places in Ukraine or abroad, restrict
LGs' revenues robustness and adjustability.

Revenue Adjustability: 'Weaker'

Nationally-collected income taxes, LGs' main revenue source,
increased by 29% on average (Fitch rated cities) in 2022, whereas
transfers from the state budget (another major revenue source)
decreased by 14% on average. The scope of changes in the revenue
composition and 2022/2021 change, was dependent on the impact of
the war on the individual city.

Expenditure Sustainability: 'Weaker'

Fitch assumes spending pressure will increase strongly with rising
inflation, broken supply chains driving prices for goods and
services high and large reconstruction efforts. Additionally,
municipal companies performing municipal services (transportation,
heating, solid waste, water and sewage) are largely not
self-supporting, and will increasingly rely on subsidies, capital
injections and direct debt repayments made by Odesa, which will
only add to its own difficulties.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs, current transfers made and spending on goods and services.

Liabilities & Liquidity Robustness: 'Weaker'

In its view, Odesa is facing increasing, material risk for its
current and future debt due to greater uncertainty about market
access, cost of debt and FX exchange rates. This is despite the
supportive policy of the National Bank of Ukraine and positive
attitude towards LGs of existing domestic and international
lenders. Funding for Ukrainian cities and their companies comes
from capital markets, local commercial banks, and institutional
lenders, is of short to medium term and often in FX (US dollars or
euros). Fitch focuses on Fitch-adjusted debt, as it reclassifies
contingent debt of not self-supporting companies.

Liabilities & Liquidity Flexibility: 'Weaker'

Fitch assumes that the cities may start to incur new debt to
finance crucial investments into infrastructure and public
transport, which could not be performed due to the war. New
indebtedness may start to be incurred in 2023, or 2024 at the
latest, depending on the overall situation, as there is a large
need to resume investments. Funding could be provided by domestic
banks and IFIs, who have already declared readiness to support the
reconstruction of Ukrainian cities.

Debt Sustainability: 'b category'

Fitch has maintained Odesa's debt sustainability assessment at 'b'
to reflect that the city's overall performance has been negatively
affected by the war-related large negative shock to the national
economy and the damage to critical infrastructure. The risk of
deterioration in liquidity and in Odesa's ability to service its
current or new debt and to support its indebted municipal companies
is elevated. In addition, there is uncertainty about the pace of a
future economic recovery, capital market access and the cost of
debt after the war ends.

Odesa's financial situation did not deteriorate in 2022, the
operating balance was positive and Fitch assumes the same for 2023.
The city repaid a material portion of its direct debt in 2022. It
plans new debt in 2023 but this will depend on the war.

Municipal companies' debt was repaid in accordance to the repayment
schedule in 2022. However, the hryvnia-nominal amount rose due to
FX rate increases as the debt is euro- and US dollar-denominated.
For 2023, the city assumes that the transport company
Odesmiskelektrotrans will continue with the construction of the
North-South tram line and will start to incur debt with the
European Investment Bank (EIB; AAA/Stable). The investment, which
already had financing secured, was on hold because of the war.

ESG - Political Stability and Rights: The invasion by Russia and
ongoing full-scale war has severely compromised the city's
political stability and the security outlook. The war is resulting
in the death of city's inhabitants and extensive property damage,
with the aim of changing the city's government and/or occupying its
territory.

ESG - Creditor Rights: The protracted war has weakened the city's
ability and willingness to service and repay debt. The city's
liquidity is deteriorating and the Ukrainian sovereign's
willingness to allow the use of foreign-currency reserves for debt
service in foreign currency is diminishing, while costs of
preserving urban and communal functions for the city are on the
rise.

DERIVATION SUMMARY

Odesa remains institutionally strongly linked to the credit quality
of the Ukrainian sovereign (CC/CCC-), which is severely affected by
the Russian-Ukrainian war. Fitch based its rating derivation on the
agency's rating definition for Odesa and the 'ccc' Standalone
Credit Profile reflects Fitch's view that a default on current and
new debt that might be taken in the short term is a real
possibility. Consequently, Odesa could have significant refinancing
needs and high liquidity risk accompanied by weak debt coverage
metrics. The 'CC'/'CCC-' IDRs are capped by the sovereign rating.

KEY ASSUMPTIONS

Qualitative and quantitative assumptions:

Risk Profile: 'Vulnerable'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Weaker'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'b'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Sovereign Cap (LT IDR): 'CC'

Sovereign Cap (LT LC IDR) 'CCC-'

Sovereign Floor: 'N/A'

Quantitative assumptions - Issuer Specific

Fitch's rating case scenario is irrelevant for ratings that are
based on rating definitions, instead it is an assumption of the
issuer's capability (liquidity) and willingness to service it. The
assumption applies to all rated Ukrainian cities irrespective of
whether direct debt exist currently as Fitch assumes that a need
for debt may arise in the short term or debt servicing resulting
from the guarantees issued as collateral for the debt of municipal
companies may materialise in the short term.

Liquidity and Debt Structure

Based on the information provided by Odesa, the city is current on
all financial commitments. Liquidity improved significantly in 2022
and the city's direct debt decreased in line with scheduled and
unscheduled repayments. Odesa's overall debt - i.e. direct debt
including municipal companies' debt and the interest-free treasury
loans contracted prior to 2014 and to be written off by the state -
had decreased to UAH2,056.7 million at end-2022 (2021: UAH3,976.4
million).

Issuer Profile

Odesa city, a capital of the Odesa region, had a population of one
million in 2021 (last available public data). The city is a key
port on the Black Sea.

RATING SENSITIVITIES

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

- Downgrade of Ukraine's sovereign ratings.

- Weakened liquidity that could pressure the city's ability to
service debt.

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

- An upgrade of Ukraine's IDRs would lead to an upgrade of the
city's IDRs provided that the city's Debt Sustainability remains in
the 'b' category.

ESG Considerations

Odesa has an ESG Relevance Score of '5' for Political Stability and
Rights to reflect the invasion by Russia and ongoing full-scale
war, which has severely compromised the city's political stability
and the security outlook. This has a negative impact on the credit
profile and is highly relevant to the ratings. The war is resulting
in the death of city inhabitants and extensive property damage,
with the aim of changing the city's government and/or occupying its
territory.

Odesa has an ESG Relevance Score of '5' for Creditor Rights to
reflect the weakened ability and willingness of the city to service
and repay debt. This has a negative impact on the credit profile
and is highly relevant to the ratings. The protracted war is
resulting in depletion of liquidity and diminishing Ukrainian
sovereign's willingness to allow the use of foreign currency
reserves for debt service in foreign currency, while costs of
preserving the urban and communal functions for the city are
rising.

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.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Odesa's ratings are linked to the sovereign ratings.

   Entity/Debt             Rating           Prior
   -----------             ------           -----
Odesa, City of    LT IDR    CC    Affirmed    CC
                  LC LT IDR CCC-  Affirmed   CCC-

ZAPORIZHZHIA CITY: Fitch Affirms 'CC' LongTerm Foreign Currency IDR
-------------------------------------------------------------------
Fitch Ratings has affirmed the Ukrainian City of Zaporizhzhia's
Long-Term Foreign-Currency Issuer Default Ratings (IDR) at 'CC' and
Long-Term Local-Currency IDR at 'CCC-'. Ratings at this level
typically do not carry Outlooks due to their high volatility.

The affirmation reflects Fitch's view that the risk of
deterioration in liquidity and in Zaporizhzhia's ability to service
its new debt and to support its indebted municipal companies
remains elevated.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

The Risk Profile remains 'Vulnerable' and the city has six Key Risk
Factors (KRFs) assessed at 'Weaker'. The 'Weaker' assessment of the
KRFs is the lowest possible under Fitch's International Local and
Regional Governments (LRG) Rating Criteria and reflects the
interference from and strong interdependence of the local
governments (LGs) on the Ukrainian sovereign.

The assessment reflects Fitch's view of a very high risk that the
city's ability to cover debt service with the operating balance may
weaken unexpectedly over the scenario horizon, notably due to lower
revenue and higher expenditure.

Revenue Robustness: 'Weaker'

The Ukraine government and its institutions (central government,
tax collection, banking system) are still largely intact. However,
the damage to critical municipal and social infrastructure -
housing, schools and kindergartens, hospitals, roads, municipal
building and work establishments - and the displacement of a large
number of citizens to other places in Ukraine or abroad, restrict
LGs' revenues robustness and adjustability.

Revenue Adjustability: 'Weaker'

Nationally-collected income taxes, LGs' main revenue source,
increased by 29% on average (Fitch-rated cities) in 2022, whereas
transfers from the state budget (another major revenue source)
decreased by 14% on average. The scope of changes in the revenue
composition and 2022/2021 change was dependent on the impact on the
war on the individual city.

Expenditure Sustainability: 'Weaker'

Fitch assumes spending pressure will increase strongly with rising
inflation, broken supply chains driving prices for goods and
services high and large reconstruction efforts. Additionally,
municipal companies performing municipal services (transportation,
heating, solid waste, water and sewage) are largely not
self-supporting, and will increasingly rely on subsidies, capital
injections and direct debt repayments made by Zaporizhzhia, which
will only add to its own difficulties.

Expenditure Adjustability: 'Weaker'

Fitch assesses the city's ability to curb spending in response to
shrinking revenue as weak due to the high rigidity of operating
expenditure and overall low per capita spending compared with
international peers. Operating expenditure is dominated by staff
costs, current transfers made and spending on goods and services.

Liabilities & Liquidity Robustness: 'Weaker'

In its view, Zaporizhzhia is facing increasing material risk for
its current and its future debt due to greater uncertainty for
market access, cost of debt and FX exchange rates. This is despite
the supportive policy of the National Bank of Ukraine and positive
attitude of existing domestic and international lenders towards
LGs. Funding for Ukrainian cities and their companies comes from
capital markets, local commercial banks, and institutional lenders,
is of short to medium term and often in FX (US dollars or euros).
Fitch focuses on Fitch-adjusted debt, as it reclassifies contingent
debt of not self-supporting companies.

Liabilities & Liquidity Flexibility: 'Weaker'

Fitch assumes that the city may start to incur new debt to finance
crucial investments into infrastructure and public transport, which
could not be performed due to the war. New indebtedness may start
to be incurred in 2023, or 2024 at the latest, depending on the
overall situation, as there is a large need to resume investments.
Funding could be provided by domestic banks and IFIs, who already
declared readiness to support the reconstruction of Ukrainian
cities.

Debt Sustainability: 'b category'

Fitch has maintained Zaporizhzhia's debt sustainability assessment
at 'b' to reflect that the city's overall performance has been
negatively affected by the war-related large negative shock to the
national economy and the damage to critical infrastructure. The
risk of deterioration in liquidity and in Zaporizhzhia's ability to
service its current or new debt and to support its indebted
municipal companies is elevated. In addition, there is uncertainty
about the pace of a future economic recovery, capital market access
and the cost of debt after the war ends.

Zaporizhzhia's financial situation did not deteriorate in 2022. The
operating balance was positive and Fitch assumes the same for 2023.
The city's direct debt decreased in 2022 in line with scheduled
repayments. It plans to incur debt for infrastructure
reconstruction from the European Investment Bank (EIB; AAA/Stable)
facility for Ukraine, but this will depend on the war.

The debt of the city's airport was unchanged in 2022. However, the
hryvnia nominal amount rose, due to FX rate increases as the debt
is denominated in US dollars. Fitch anticipates that due to the
airport's difficult situation (flights stopped due to war) the city
will step in and repay the loan in full (USD10 million) in 2023.
The plans for debt-financed investments at the transportation
company Zaporizhzhia Electrotrans are on hold at least to 2024.

ESG - Political Stability and Rights: The invasion by Russia and
ongoing full-scale war has severely compromised the city's
political stability and the security outlook. The war is resulting
in the death of city's inhabitants and extensive property damage,
with the aim of changing the city's government and/or occupying its
territory.

ESG - Creditor Rights: The protracted war has weakened the city's
ability and willingness to service and repay debt. The city's
liquidity is deteriorating and the Ukrainian sovereign's
willingness to allow the use of foreign-currency reserves for debt
service in foreign currency is diminishing, while costs of
preserving urban and communal functions for the city are rising.

DERIVATION SUMMARY

Zaporizhzhia remains institutionally strongly linked to the credit
quality of the Ukrainian sovereign (CC/CCC-), which is severely
affected by the Russian-Ukrainian war. Fitch based its rating
derivation on the agency's rating definition for Zaporizhzhia and
the 'ccc' Standalone Credit Profile reflects Fitch's view that a
default on current and new debt that might be taken in the short
term is a real possibility. Consequently, Zaporizhzhia could have
significant refinancing needs and high liquidity risk accompanied
by weak debt coverage metrics. The 'CC'/'CCC-' IDRs are capped by
the sovereign rating.

KEY ASSUMPTIONS

Qualitative and quantitative assumptions:

Risk Profile: 'Vulnerable'

Revenue Robustness: 'Weaker'

Revenue Adjustability: 'Weaker'

Expenditure Sustainability: 'Weaker'

Expenditure Adjustability: 'Weaker'

Liabilities and Liquidity Robustness: 'Weaker'

Liabilities and Liquidity Flexibility: 'Weaker'

Debt sustainability: 'b'

Support (Budget Loans): 'N/A'

Support (Ad Hoc): 'N/A'

Asymmetric Risk: 'N/A'

Sovereign Cap (LT IDR): 'CC'

Sovereign Cap (LT LC IDR) 'CCC-'

Sovereign Floor: 'N/A'

Quantitative assumptions - Issuer Specific

Fitch's rating case scenario is irrelevant for ratings that are
based on rating definitions, instead it is an assumption of the
issuer's capability (liquidity) and willingness to service it. The
assumption applies to all rated Ukrainian cities irrespective of
whether direct debt exist currently as Fitch assumes that a need
for debt may arise in the short term or debt servicing resulting
from the guarantees issued as collateral for the debt of municipal
companies may materialise in the short term.

Liquidity and Debt Structure

Based on the information provided by Zaporizhzhia, the city is
current on all financial commitments. Liquidity improved
significantly in 2022 and the city's direct debt decreased in line
with scheduled repayments. Zaporizhzhia's overall debt - i.e.
direct debt including municipal companies' debt and the
interest-free treasury loans contracted prior to 2014 and to be
written off by the state - had decreased to UAH1,771.1 million at
end-2022 (2021: UAH1,936.5 million).

Issuer Profile

Zaporizhzhia, the capital of the Zaporizhzhia Region, had a
population of about 730,000 in 2021 (last available public data).
The city's economy was industrialised with developed machine
building and metallurgy before the war started.

RATING SENSITIVITIES

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

- Downgrade of Ukraine sovereign ratings.

- Weakened liquidity that could pressurize the ability to service
debt.

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

- An upgrade of Ukraine's IDRs would lead to an upgrade of the
city's IDRs provided that the city's Debt Sustainability remains in
the 'b' category.

ESG Considerations

Zaporizhzhia has an ESG Relevance Score of '5' for Political
Stability and Rights to reflect the invasion by Russia and ongoing
full-scale war, which has severely compromised the city's political
stability and the security outlook. This has a negative impact on
the credit profile and is highly relevant to the ratings. The war
is resulting in the death of city inhabitants and extensive
property damage, with the aim of changing the city's government
and/or occupying its territory.

Zaporizhzhia has an ESG Relevance Score of '5' for Creditor Rights
to reflect the weakened ability and willingness of the city to
service and repay debt. This has a negative impact on the credit
profile and is highly relevant to the ratings. The protracted war
is resulting in depletion of liquidity and diminishing Ukrainian
sovereign's willingness to allow the use of foreign currency
reserves for debt service in foreign currency, while costs of
preserving urban and communal functions for the city are rising.

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.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Zaporizhzhia's ratings are linked to the sovereign ratings.

   Entity/Debt            Rating           Prior
   -----------            ------           -----
Zaporizhzhia
City             LT IDR    CC    Affirmed    CC
                 ST IDR    C     Affirmed     C
                 LC LT IDR CCC-  Affirmed   CCC-



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

CAVENDISH SQUARE: S&P Lowers Class C Notes Rating to 'D (sf)'
-------------------------------------------------------------
S&P Global Ratings lowered to 'D (sf)' from 'A+ (sf)' and removed
from CreditWatch negative its credit rating on Cavendish Square
Funding PLC's class C notes. S&P will withdraw the rating after 30
days if the issuer does not provide updates or further
information.

S&P placed its rating on the class C notes on CreditWatch Negative
on Jan. 24, 2023, following the issuer's notification on Dec. 29,
2022, of an event of default occurring, in accordance with the
terms and conditions of the notes. The notice included the
following:

-- The collateral administrator provided the draft monthly report
for the October 2022 payment period to the collateral manager for
approval;

-- The collateral administrator received no response from the
collateral manager regarding the October monthly report and,
consequently, it was unable to finalize and provide this report to
the required parties in accordance with clause 17.4 of the
collateral administration agreement;

-- As the October monthly report has not been finalized, the
collateral administrator has been unable to finalize and provide
the note valuation report to the required parties in accordance
with the collateral administration agreement; and

-- In accordance with the notice, the issuer had notified the
occurrence of an event of default, in accordance with condition
10(a)(i) (nonpayment of interest) of the terms and conditions of
the notes.

As a result of these events, payments due on the class C notes and
the subordinated notes on the Nov. 11, 2022, interest payment date
were not made.

To the best of S&P's knowledge, these amounts still remain due and
outstanding. The latest trustee report available to S&P is as of
Sept. 30, 2022.

According to the most recently available trustee report, with an
original balance of GBP9.00 million, the current outstanding
balance of the class C notes is GBP1.67 million. Notably, the
trustee reported that there is almost GBP2.00 million in the
issuer's principal account. Though the transaction has sufficient
funds available to meet its interest and principal obligation on
class C notes, these amounts have not been paid in a timely manner.
The class C notes are now the controlling class of notes and
therefore are expected to receive timely payment of interest and
the ultimate payment of principal by maturity. Therefore, S&P have
lowered its rating to 'D (sf)' from 'A+ (sf)' due to the missed
timely interest payment on the class C notes.

S&P said, "Our rating on the notes reflects our assessment of the
underlying asset pool's credit and cash flow characteristics, as
well as our analysis of the transaction's exposure to counterparty,
legal, and operational risks. S&P Global Ratings' assessment of
operational and administrative risks is a core part of its process
in rating structured finance transactions. These risk assessments
focus on key transaction parties, or parties whose failure to
perform as contracted poses a risk to a securitization's expected
performance, such as to adversely affect the ratings on the
securitization."

S&P will subsequently withdraw the rating on the notes after 30
days, in the absence of any further material information.

Cavendish Square Funding is a cash flow mezzanine structured
finance CDO of a portfolio that comprises predominantly
mortgage-backed securities. The transaction closed in February
2006.


JACK BRODIE: Bought Out of Administration Through Pre-pack Deal
---------------------------------------------------------------
Business Sale reports that Jack Brodie, a cashmere clothing
wholesaler based in Leeds, has been acquired out of administration
in a pre-pack deal by fellow West Yorkshire firm Jamm Logistics.

The company fell into administration earlier this month after
reportedly experiencing significant working capital pressure,
Business Sale recounts.

The deal also sees Jamm acquire pima cotton and cashmere products
firm The Edinburgh Knitwear Company, Business Sale notes.
Following the acquisition, a Companies House filing revealed that
Jamm will be renamed to Jack Brodie's trading name, Brodie
Cashmere, Business Sale discloses.

Jack Brodie and its related companies fell into administration on
April 19, 2023, with Interpath Advisory managing directors Rick
Harrison and Howard Smith appointed as the firm's joint
administrators, Business Sale states.  Reports have suggested that
several of the company's suppliers were left "heavily" out of
pocket following its collapse, Business Sale relates.

According to Business Sale, a statement from the company's joint
administrators said it had "seen significant revenue growth in
recent years, prompting management to invest in stock to meet
demand."  Despite this, the joint administrators added that "more
recently, the companies began to experience significant pressure on
working capital and, after assessing all their options [. . .]
administrators were appointed."

Following their appointment, the joint administrators concluded a
sale of the business to Jamm Logistics, a Leeds-based private
limited company incorporated in August 2021 and now trading as
Brodie Cashmere Ltd., Business Sale notes.


LENDY: Administration Process Extended to 2025
----------------------------------------------
Kathryn Gaw at Peer2Peer Finance News reports that Lendy
administrators RSM have successfully applied to extend the
administration process for at least another two years.

According to documents filed with Birmingham's High Court of
Justice, business and property courts, the court has agreed to
extend Lendy's administration process until May 23, 2025, Peer2Peer
Finance News relates.

The administration process was previously extended by 36 months, to
midnight on May 23, 2023, Peer2Peer Finance News notes.

The property lending platform entered into administration in 2019
with more than GBP160 million outstanding in its development
finance and bridging loan book, Peer2Peer Finance News recounts.
At least GBP90 million of those funds were in default at the time
of its collapse, Peer2Peer Finance News discloses.

The administration process has been slowed by the complex nature of
the Lendy business model, as well as a number of court cases
regarding the way in which money should be distributed, Peer2Peer
Finance News states.

Following the resolution of a "cost protocol" court case in
January, distributions were recommenced, Peer2Peer Finance News
relays.

In January, RSM revealed that the administration process has
incurred GBP5.2 million of costs so far, according to Peer2Peer
Finance News.


LOMOND HILLS: Put Up for Sale Following Liquidation
---------------------------------------------------
Fiona Dobie at Fife Today reports that the former Lomond Hills
Hotel in Fife has been put on the market.

The 18th century converted coaching inn was a popular venue for
weddings and events, but last month the hotel at the foot of the
Lomond Hills in Freuchie was placed into liquidation, Fife Today
recounts.

It ceased trading with all 17 staff made redundant on March 6, Fife
Today discloses.  The reasons cited for it being placed into
liquidation included the challenges faced by the business as a
result of the Covid-19 pandemic and the cost of living crisis, Fife
Today states.

Joint liquidators, Ken Pattullo and Kenny Craig of Begbies Traynor,
have now instructed specialist hotel property adviser Christie & Co
to sell the property, Fife Today relates.

According to Fife Today, the property is listed on the company's
website with a GBP600,000 price tag.


UNION DISTILLERS: Goes Into Administration
------------------------------------------
Ian Evans at TheBusinessDesk.com reports that a Leicestershire
distillery which has been teetering on the verge of administration
for around a month has finally succumbed and appointed FRP Advisory
to handle its affairs.

Union Distillers produces a range of gins, vodkas and rums, as well
as an absinthe and an espresso vodka liqueur, under the "Two Birds"
brand.

The Market Harborough firm was acquired by Oxfordshire producer
British Honey Company in 2021.

In March, British Honey revealed it had failed to secure the funds
it needed to remain afloat after becoming increasingly financially
unstable, TheBusinessDesk.com recounts.  The British Honey board
expects the company to follow its subsidiary by calling in
administrators this week, TheBusinessDesk.com discloses.

In a further blow to both businesses, British Honey's AQSE
corporate adviser and joint broker, finnCap ltd, has announced its
intention to resign "with immediate effect" -- meaning the
company's shares will be withdrawn and cancelled from trading on
AQSE unless a replacement is appointed, TheBusinessDesk.com states.
Joint broker Stanford Capital Partners is also set to part ways
with the stricken firm, TheBusinessDesk.com notes.

According to TheBusinessDesk.com, British Honey says it has "no
current intention" of appointing a replacement corporate adviser,
casting further doubt over the future of its Harborough-based
subsidiary.

Geoff Rowley and Simon Stibbons, partners at FRP, were appointed
joint administrators of Union Distillers Limited on Friday, April
21, TheBusinessDesk.com relates.


WORCESTER WARRIORS: Buyers Must Complete Takeover by May 2
----------------------------------------------------------
PA News Agency reports that Worcester Warriors' buyers must
complete a takeover of the club by May 2, according to a report
issued by administrators Begbies Traynor.

According to PA News, the deadline was activated when Atlas, headed
by Jim O'Toole and James Sandford, was chosen on Feb. 1 as the new
owners over a rival bid from former director of rugby Steve
Diamond.

Worcester were placed into administration in September for unpaid
debts, with the Department for Digital, Culture, Media and Sport
their biggest creditor having loaned the club GBP14 million,
PA News recounts.

As a result they were relegated from the Gallagher Premiership, but
rather than compete in the Championship next season -- due to a
dispute over terms with the Rugby Football Union -- Atlas announced
its plan to merge with semi-professional fourth-tier club
Stourbridge, PA News discloses.

If Atlas is unable to make the deadline of next Tuesday then
Begbies Traynor must find a new party to purchase the club's
assets, which includes Sixways Stadium, PA News notes.

In the 27-page progress report published by the administrators, it
is revealed that Atlas would not be able to sell Sixways within
five years of purchase if its takeover does proceed, PA News
states.

If the sale fails to go ahead, Atlas will lose a GBP500,000
non-refundable deposit that was paid on February 1 as an
exclusivity fee, according to PA News.

Atlas' plan to rename Worcester Warriors as Sixways Rugby was
abandoned due to opposition from fans.

The RFU announced in February that it was blocking Worcester's
entry into the Championship on account of Atlas' failure to prove
it met its criteria for inclusion, which includes a fit and proper
persons test, PA News relays.



                           *********


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

Troubled Company Reporter-Europe is a daily newsletter co-
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 2023.  All rights reserved.  ISSN 1529-2754.

This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers.

Information contained herein is obtained from sources believed to
be reliable, but is not guaranteed.

The TCR Europe subscription rate is US$775 per half-year,
delivered via e-mail.  Additional e-mail subscriptions for
members of the same firm for the term of the initial subscription
or balance thereof are US$25 each.  For subscription information,
contact Peter Chapman at 215-945-7000.


                * * * End of Transmission * * *