/raid1/www/Hosts/bankrupt/TCREUR_Public/230704.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Tuesday, July 4, 2023, Vol. 24, No. 133
Headlines
F R A N C E
AUTONORIA 2019: S&P Raises Class F-Dfrd Notes Rating to 'BB(sf)'
CASINO GUICHARD: EUR1.43B Bank Debt Trades at 36% Discount
EXPLEO GROUP:S&P Assigns 'B-' Issuer Credit Rating, Outlook Stable
IDEMIA GROUP: Fitch Affirms 'B' IDR & Alters Outlook to Positive
TECHNICOLOR CREATIVE: EUR382M Bank Debt Trades at 16% Discount
G E R M A N Y
ADAPA GMBH: EUR475M Bank Debt Trades at 60% Discount
I R E L A N D
ANCHORAGE CAPITAL 8: S&P Assigns B- Rating on Class F Notes
INVESCO EURO X: S&P Assigns B-(sf) Rating on EUR12MM Class F Notes
MADISON PARK XIX: S&P Assigns 'B-' Rating on Class F Notes
PRIMROSE RESIDENTIAL 2022-1: Fitch Puts 6 Tranches on Observation
SIGNAL HARMONIC I: Fitch Assigns B- Rating on Class F Debt
I T A L Y
AUTOFLORENCE 1: S&P Raises Class E-Dfrd Notes Rating to 'BB(sf)'
L U X E M B O U R G
APOLLO FINCO: EUR348M Bank Debt Trades at 36% Discount
ARVOS BIDCO: $100M Bank Debt Trades at 87% Discount
MALLINCKRODT FINANCE: $369M Bank Debt Trades at 24% Discount
MALLINCKRODT INTERNATIONAL: $1.39B Bank Debt Trades at 24% Off
N E T H E R L A N D S
BRIGHT BIDCO: $300M Bank Debt Trades at 48% Discount
S P A I N
DURO FELGUERA: EUR85M Bank Debt Trades at 43% Discount
MEIF 5 ARENA: S&P Upgrades ICR to 'BB-', Outlook Positive
MIRAVET SARL 2020-1: S&P Affirms 'B-' Rating on Class E Notes
S W I T Z E R L A N D
HERENS HOLDCO: EUR1.05B Bank Debt Trades at 17% Discount
T U R K E Y
DENIZBANK AS: Fitch Affirms 'B-/B' LongTerm IDRs, Outlook Neg.
ING BANK: Fitch Affirms B-/B LongTerm IDRs, Outlook Negative
QNB FINANSBANK: Fitch Affirms 'B-/B' LongTerm IDRs
TURK EKONOMI: Fitch Affirms B-/B LongTerm IDRs, Outlook Negative
U N I T E D K I N G D O M
AMPHORA FINANCE: GBP301M Bank Debt Trades at 50% Discount
BRANTS BRIDGE 2023-1: Fitch Gives BB+(EXP) Rating to Class E Debt
BRUNCHO UK: Enters Administration, Closes Almost All Sites
CARILLION: Ex-Finance Chief Banned From Boardroom for 11 Years
DBS: Bought Out of Administration in Pre-Pack Deal
EG GROUP: Amended Sr. Secured Debt No Impact on Moody's 'B3' CFR
HOLBROOK MORTGAGE 2023-1: S&P Assigns B-(sf) Rating on Cl. F Notes
PATAGONIA BIDCO: Moody's Cuts CFR to 'B3', Outlook Stable
QUAY STREET: Owed Nearly GBP1 Million at Time of Liquidation
ROMA LEATHER: Enters Administration Due to Falling Demand
SMALL BUSINESS 2023-1: Fitch Assigns BB+ Rating on Class D Notes
TENNOR: London Judge Finds Lars Windhorst in Contempt of Court
THAMES WATER: Crisis May Deter Overseas Investment Into UK
TOGETHER ASSET 2023-1: Fitch Gives BB+(EXP) Rating to Class F Debt
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F R A N C E
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AUTONORIA 2019: S&P Raises Class F-Dfrd Notes Rating to 'BB(sf)'
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S&P Global Ratings raised its credit ratings on Autonoria 2019
FCT's class B-Dfrd notes to 'AA+ (sf)' from 'AA (sf)', C-Dfrd notes
to 'AA- (sf)' from 'A+ (sf)', D-Dfrd notes to 'A (sf)' from 'A-
(sf)', E-Dfrd notes to 'BBB (sf)' from 'BBB- (sf)', and F-Dfrd
notes to 'BB (sf)' from 'B (sf)'. At the same time, S&P affirmed
its 'AAA (sf)' rating on the class A notes.
The rating actions follow its review of the transaction's
performance and the application of S&P's current criteria, and
reflect its assessment of the payment structure according to the
transaction documents.
The transaction closed in September 2019 and featured a 12-month
revolving period, after which the transaction began to amortize.
Credit enhancement has been stable since closing for all notes
because the transaction is currently amortizing on pro rata basis.
At this stage, none of the sequential triggers have been breached.
Since the end of the revolving period, the pool balance has
declined to EUR190.4 million as of the February 2023 payment date
from EUR950.1 million, bringing the current pool factor (the
outstanding performing collateral balance as a proportion of the
original collateral balance) to approximately 20%.
As of March 2023, arrears stood at 1.23 slightly increasing from
the 0.96% observed when amortization began in September 2020.
Arrears above 90 days stand at 0.16%. The cumulative recoveries are
99.1% of the principal gross loss cumulative amount, as of March
2023, which is higher than S&P's recovery rate base case.
S&P said, "We have analyzed credit risk under our global auto ABS
methodology, using the transaction's historical data. In our view,
asset performance has been very good since closing, with cumulative
losses lower than our assumptions at closing. Additionally,
considering the low pool factor, high seasoning, and short
remaining term, we have decreased our base-case gross loss
assumption to 3.15% of the closing collateral balance. Calibrating
this figure on the current outstanding performing pool and
subtracting defaults since closing results in late delinquencies
totaling 6.32%.
"At the same time, we maintained our gross default multiple of 4.4x
at 'AAA' as well as our recovery rate base-case assumption."
Table 1
Credit Assumptions
PARAMETER CURRENT
Gross loss base case (%) 3.15
Gross loss base case calibrated on
remaining performing pool (%) 6.32
Gross loss multiple ('AAA'; x) 4.4
Recovery rates base case (%) 30.00
Recovery rate haircut ('AAA') (%) 40.00
Stressed recovery rate ('AAA') (%) 18.00
S&P said, "Our operational and legal risk analysis is unchanged
since closing. We consider that the transaction documents
adequately mitigate the transaction's exposure to counterparty risk
up to a 'AAA' rating for class A and B-Dfrd notes, and up to 'AA'
for the class C-Dfrd to E-Dfrd notes. Under the class C-Dfrd,
D-Dfrd, E-Dfrd, and E-Dfrd notes' swap agreement, the collateral
assessment chosen at closing is moderate, which under our
counterparty criteria limits the maximum potential ratings on these
classes of notes to 'AA' during the transaction's life.
"We have performed our cash flow analysis to test the effect of the
amended credit assumptions. Our analysis incorporates a sensitivity
with back-loaded default curve, in which defaults are applied on
month one and increase over the recession period to test the pro
rata amortization feature. We have run our cash flows with updated
interest rate curves based on the Cox-Ingersoll-Ross framework.
Cash flow outputs in both our standard and sensitivity runs are
higher than in our previous review, because we lowered our gross
loss base case at each rating level. As a result, we raised our
ratings on the class B-Dfrd, C-Dfrd, D-Dfrd, E-Dfrd, and F-Dfrd
notes. The cash flow output for the class A notes remains at the
'AAA' level in both runs, therefore we affirmed our 'AAA (sf)'
rating on the class A notes."
Macroeconomic forecasts and forward-looking analysis
S&P said, "We considered the transaction's resilience in case of
additional stresses to some key variables, in particular defaults
and recoveries, to determine our forward-looking view. Our forecast
on unemployment rates for France is 7.6% over 2023 and 7.9% over
2024 and 2025, while our forecast for inflation is 5.4% over 2023
and then down to 2.3% and 2.0% in 2024 and 2025, respectively.
"In our view, the ability of the borrowers to repay their auto
leases will be highly correlated to macroeconomic conditions,
particularly the unemployment rate and, to a lesser extent,
consumer price inflation and interest rates. Furthermore, although
used car prices may decline moderately in France in the second half
of 2023, we do not expect them to fall significantly. A decline in
second-hand car values typically impacts the level of realized
recoveries the transaction is exposed to, which rises if the
liquidation proceeds from the sale of the vehicles are lower than
the securitized values.
"We therefore ran eight scenarios with increased gross defaults
and/or reduced expected recoveries. The results of the sensitivity
analysis indicate a deterioration of no more than one rating
category on the notes, which is in line with the credit stability
considerations in our rating definitions."
CASINO GUICHARD: EUR1.43B Bank Debt Trades at 36% Discount
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Participations in a syndicated loan under which Casino Guichard
Perrachon SA is a borrower were trading in the secondary market
around 64.4 cents-on-the-dollar during the week ended Friday, June
30, 2023, according to Bloomberg's Evaluated Pricing service data.
The EUR1.43 billion facility is a Term loan that is scheduled to
mature on August 31, 2025. The amount is fully drawn and
outstanding.
Casino Guichard-Perrachon SA operates a wide range of hypermarkets,
supermarkets, and convenience stores. The Company operates stores
in Europe and South America. The Company’s country of domicile is
France.
EXPLEO GROUP:S&P Assigns 'B-' Issuer Credit Rating, Outlook Stable
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S&P Global Ratings assigned its 'B-' long-term issuer credit rating
to France-based Expleo Group and its subsidiaries, Assystem
Technologies and Expleo Services SASU. S&P also assigned a 'B-'
issue rating to its term loan B and RCF, with a recovery rating of
'3'.
The stable outlook indicates that S&P expects Expleo to complete
the refinancing and maintain credit metrics commensurate with the
rating for the next 12 months. By year-end 2023, debt to EBITDA is
forecast to improve to 6.2x, funds from operations (FFO) to debt to
reach 8%, and FFO cash interest coverage to remain above 2x.
The proposed refinancing would support Expleo's liquidity, lengthen
its debt maturity profile and restore some capacity under the RCF.
The company plans to:
-- Extend the maturity of its term loan B to September 2027 from
September 2024;
-- Extend the maturity of its RCF to March 2027 from June 2024;
and
-- Issue a new GBP50 million term loan B tranche.
The proceeds would be used to repay the EUR47 million Expleo has
drawn under its EUR108 million RCF and would also cover about EUR24
million in transaction costs.
S&P said, "We expect solid operational performance in 2023 and
2024, as the pandemic discounts that Expleo offered clients in 2020
expire. The company implemented price increases in 2023 and high
inflation in Europe should support further price increases in 2024.
As a result, we forecast revenue growth of 15% in each of 2023 and
2024."
Revenue could also benefit from increased volumes with existing
clients. The green energy transition will present Expleo's
industrial clients with numerous technical challenges. Other
sector-specific trends--for example, the push to increase
automation in the automotive industry--could also boost volumes. We
forecast an increase in S&P Global Ratings-adjusted EBITDA margins
to 9.7% in 2023 and 10.3% in 2024, from 9.2% in 2022. A higher top
line will enable Expleo to improve its absorption of fixed costs
and resource utilization; increase average billable hours; and
reduce employee attrition by about 20%, which will reduce
expenditure (in terms of both time and money) on training new
consultants.
S&P said, "Expleo's FOCF generation has been largely negative for
the past two years; we expect this trend to continue in 2023 before
reversing in 2024. FOCF in 2023 is forecast to be negative by
EUR33.7 million. This is an improvement on the EUR82 million
negative FOCF reported in 2022, when invoicing delays caused by the
implementation of a new enterprise resource planning (ERP) system
resulted in EUR92.5 million of outflows. FOCF in 2023 will be
supported by higher EBITDA but hampered by the significant increase
in annual interest costs under the new debt structure. Interest
costs will rise to EUR59 million in 2023 from EUR33 million in
2022. In addition, Expleo faces EUR24 million in refinancing costs
in 2023 and also has EUR17 million left to repay of delayed
pandemic-related social charges, as well as EUR15 million related
to restructuring expenses incurred in previous years.
"In our opinion, the company's ability to generate cash also
depends on successful working capital management. We forecast that
adjusted working capital outflows will stabilize at about EUR20
million in 2023 (excluding inflows from additional drawdowns under
factoring facilities). 2024 should therefore see FOCF turning
positive at EUR35.5 million as EBITDA rises further and working
capital outflows remain stable at EUR20 million. We do not
anticipate any exceptional items that could hamper cash flow
generation in 2024.
"In our view, the company's relatively modest size and high client
concentration makes it vulnerable to unforeseen events, which could
deplete cash flows. Given its record of negative FOCF, compared
with other 'B' rated peers, we apply a one-notch negative
comparable rating analysis modifier to the rating.
"The stable outlook indicates that we expect Expleo to complete the
proposed transaction and that its credit metrics will remain
commensurate with the rating for the next 12 months. We anticipate
FOCF generation will remain negative at EUR33.7 million for 2023,
but turn positive in 2024 at EUR35.5 million. We forecast debt to
EBITDA of 6.2x and FFO to debt of 8.0% by year-end 2023, and that
FFO cash interest coverage will remain above 2.0x.
"We could lower the rating if Expleo fails to extend its upcoming
debt maturities and upsize its term loan B. We could also downgrade
Expleo if persistently negative FOCF generation causes liquidity to
deteriorate."
S&P could raise the rating in the next 12 months if:
-- Expleo establishes a track record of material positive FOCF and
we believe the trend is sustainable for the rest of 2023 and 2024;
-- Liquidity headroom remains adequate; and
-- Leverage remains below 7x.
ESG credit indicators: E-2, S-2, G-3
S&P said, "Social factors are a neutral consideration in our credit
rating analysis of Expleo. In 2022, revenue recovered to EUR1.27
billion, above pre-pandemic levels of EUR1.084 billion. Adjusted
EBITDA margins, at 9.2%, also exceeded the 2019 level of 8.9%,
thanks to strong demand from its clients, especially in the
automotive and aerospace sector. 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
their generally finite holding periods and a focus on maximizing
shareholder returns."
IDEMIA GROUP: Fitch Affirms 'B' IDR & Alters Outlook to Positive
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Fitch Ratings has revised IDEMIA Group S.A.S.'s Rating Outlook to
Positive from Stable, and has affirmed the group's Long-Term Issuer
Default Rating (IDR) at 'B'.
The revision of the Outlook reflects Fitch's expectation of
sustained profitability, albeit reduced from 2024 onwards, such
that IDEMIA's EBITDA gross leverage will remain below 4.5x in
2023-2024. If accompanied by sustained positive free cash flow
(FCF) and adequate interest cover, this is commensurate with a
higher rating.
The 'B' IDR reflects IDEMIA's underlying earnings volatility, high
leverage and thin FCF margins, owing to large capex to remain
technology-competitive, which is balanced by its strong market
position with global scale and diversification.
KEY RATING DRIVERS
Strong 2022 and 1Q23: IDEMIA had a record year in 2022 with
year-on-year revenue growth at constant currency of 13.8%, with
19.8% and 7.7%, respectively in its enterprise and government
businesses. Fitch-defined EBITDA margin increased to 18% in 2022
from around 14% in 2021, which is high versus historical levels.
Some of the growth is foreign-exchange (FX) driven (around EUR53
million of company-reported EBITDA in 2022), but geographic and
product mix (dual and metal cards) contributed to higher
profitability. Company-defined EBITDA in 2022 was up 29.8% yoy in
constant currency and company-defined EBITDA margin in 1Q23 was at
21.5% (with limited FX impact).
Continued Improvement in Credit Metrics: We expect sustained high
profitability, albeit slightly reduced in 2024 onwards, to reduce
IDEMIA's EBITDA gross leverage to below 4.5x in 2023 and to sustain
FCF margins at low-to-mid-single-digits throughout 2024-2025.
Enterprise to Slow: In enterprise we expect some normalisation of
revenues and profitability at end-2023 and into 2024. As supply
shortages ease, we expect increased competition may affect
volume/price and forecast a 2% revenue decline in enterprise in
2024, with a company-defined EBITDA margin below 22%, down from 25%
in 2023.We expect continued neutral to positive revenue growth
thereafter, where reduction in consumer SIM cards will be
compensated by a continued shift towards more advanced technologies
(M2M, IoT Auto and eSIM), and by a continued emphasis on key
customers and geographies and product mix (metal and biometric
cards).
Upside in Government Business: Government margins have remained
rather stable but we expect some price increases to feed into both
revenues and margins in 2023-2024 as contracts come up for renewal.
Fitch expects around 5% revenue growth in 2023, mainly derived from
public security solutions, such as biometric travel, law
enforcement and road safety.
Positive but Slim FCF: While reduced leverage and forecast FCF are
one of the key drivers of the Outlook revision, absolute FCF levels
are fairly low. This is due to high capex including R&D spend and
higher interest payments following the expiry of existing
interest-rate hedges. In addition, a new government contract
(automated boarder control system) in Singapore supports sales
growth, but also exacerbates working-capital outflows for 2023 via
inventory build-up, which we expect to ease into 2024.
Extended Loan Facilities, Higher Rates: The recently announced
extension of IDEMIA's term loan B (TLB) and revolving credit
facility (RCF) into 2028 is credit-positive for prudent liabilities
management. In spite of reduced leverage, higher interest payments
following the expiry of existing interest-rate hedges will weigh on
interest coverage. We forecast EBITDA interest cover at around 3.0x
in 2024 and 2025, predicated on neutral to positive sales growth
and sustained Fitch-defined EBITDA margin of around 18%.
Leverage Subject to Sustained Profitability: Based on
Fitch-calculated EBITDA of around EUR500 million-EUR550 million in
2023 and 2024, Fitch expects gross debt to remain structurally
below 4.5x EBITDA. Fitch still sees some uncertainty around the
extent of positive momentum and structural improvement in
profitability, which are key to IDEMIA's deleveraging. Fitch sees
some risk of price pressure within the more commoditised enterprise
division as competition increases and technology matures, where the
latter may be more of a medium-term risk.
Improving Earnings Quality: Fitch said, "We expect restructuring
and transformation costs to decline in 2024-2025 towards EUR10
million per year (EUR25 million in 2023). We treat most
restructuring and transformation expenses as recurring and include
them in EBITDA and funds from operation (FFO) as they are
attributable to cost-cutting projects and are likely to persist. We
see them as part of IDEMIA's continuing efforts to improve
operational efficiency with a view to standardisation,
simplification and digitalisation of business processes."
Strong Market Positions: IDEMIA has strong market shares in all its
key segments, ranking second or first in both enterprise and
government businesses. The government segment benefits from
IDEMIA's established reputation, high reliability and strong
execution. While the operations are predominantly project-based,
IDEMIA has recurring revenue from services such as ID and passport
issuance.
The enterprise segment's products are more commoditised and the
markets more competitive, resulting in price and profitability
pressures. IDEMIA is tackling these challenges with new hi-tech
products, a more selective approach to the customer service mix and
by investing in technology at the early stages of adoption with
long-term growth potential.
DERIVATION SUMMARY
IDEMIA's ratings are supported by strong global market positions in
identification, authentication, payment and connectivity
solutions.
IDEMIA's broader technology peers, such as Nokia Corporation
(BBB-/Stable), Telefonaktiebolaget LM Ericsson (BBB-/Stable) and
STMicroelectronics N.V. (BBB/Stable), are rated in the
investment-grade category. Despite higher volatility in both
revenue and margins than IDEMIA's, they have greater scale and
stronger cash flows as well as no or very low net leverage.
Fitch recognises the strong business position and technology
leadership of IDEMIA within its chosen markets but its smaller
scale and high leverage place its rating in the 'B' category.
Higher-rated fintech companies such as Nexi S.p.A. (BB/Stable)
benefit from leadership in their markets, strong growth prospects
and healthy cash flow generation.
Similarly-rated European software companies such as Dedalus SpA
(B-/Stable) and TeamSystem S.p.A (B/Stable) have subscription-based
recurring revenue platforms and demonstrate better deleveraging
prospects than IDEMIA and therefore have higher leverage tolerance
for their rating category.
IDEMIA is broadly comparable with the peers that Fitch covers in
its technology and credit opinions portfolios. It has slightly
higher leverage but benefits from market leadership in its core
operating segments, healthy liquidity and global diversification.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Revenue growth of 6% in 2023, followed by low-to-mid single-
digit growth in 2024-2025
- Fitch-defined EBITDA margin around 19% in 2023 and 18% in 2024
- Capex around EUR165 million-EUR175 million per year in 2023-
2025
- All restructuring charges are reflected in EBITDA and FFO
- No M&A nor dividends to 2025
KEY RECOVERY RATING ASSUMPTIONS
In conducting its bespoke recovery analysis, Fitch estimates that
IDEMIA's intellectual property, patents and recurring contracts, in
the event of default, would generate more value from a
going-concern restructuring than a liquidation of the business.
Fitch has assumed a 10% administrative claim in the recovery
analysis.
Fitch said, "Our analysis assumes post-restructuring going-concern
EBITDA of around EUR285 million. This reflects stress assumptions
of a loss of major contracts following reputational damage, for
example as a result of compromised technology (leading to sustained
high leverage and negative cash flow) or from a major shift in
technology usage making IDEMIA's products obsolete.
"We have applied a 6x distressed multiple, reflecting IDEMIA's
scale, customer and geographical diversification as well as
exposure to secular growth in biometric-enabled identification
technology. We also assume a fully drawn EUR300 million revolving
credit facility (RCF).
"We deduct administrative claims, EUR85 million of factoring, and
EUR65 million of prior-ranking debt at operating subsidiaries as
prior-ranking claims ahead of the RCF and TLB in the liability
waterfall. Based on current metrics and assumptions, the waterfall
analysis generates a ranked recovery at 59% and hence in the
Recovery Rating 'RR3' band, indicating a 'B+' instrument rating for
the senior secured TLB."
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to an
Upgrade:
- Structurally improved profitability with sustained mid-single-
digit FCF margins
- EBITDA gross leverage below 4.5x on a sustained basis,
including visibility around leverage targets
- EBITDA interest coverage above 3.0x
Factors That Could, Individually or Collectively, Lead to the
Outlook Being Revised to Stable:
- Sustained slim to neutral FCF margins
- EBITDA interest cover sustained below 3.0x
- EBITDA gross leverage sustained above 4.5x
Factors That Could, Individually or Collectively, Lead to a
Downgrade:
- A material loss of market share or other evidence of a
significant erosion of business or technology leadership in
core operations
- EBITDA gross leverage above 6.0x on a sustained basis without a
clear path for deleveraging
- Sustained neutral to negative FCF
- EBITDA interest coverage below 2.5x
LIQUIDITY AND DEBT STRUCTURE
Satisfactory Liquidity: IDEMIA had a cash position of around EUR140
million as of April 2023 (pro- forma for a EUR100 million dividend
payment and transaction costs related to a recently announced amend
and extend (A&E) transaction). Fitch forecasts positive FCF in 2023
and 2024, further supported by an undrawn EUR300 million RCF,
yielding satisfactory liquidity.
Manageable Refinancing Risk: Refinancing risk is manageable, with
reduced leverage and forecast sustained positive FCF. Fitch said,
"We expect the RCF and TLB maturities in the recently announced A&E
transaction to extend maturities into 2028. We expect increased
interest costs post-expiry of interest hedging by end-2023 with
reduced, but still positive, FCF in 2024 and 2025. Reduced leverage
with higher absolute EBITDA compensate for higher interest costs in
our forecasts, with EBITDA interest coverage forecast at around
3.0x in 2024-2025 (4.1x in 2023)."
ISSUER PROFILE
IDEMIA, headquartered in France, develops, manufactures and markets
specialized security technology products and services worldwide,
mainly for the payments, telecommunications, public security and
identity markets.
Entity Rating Prior
------ ------ -----
IDEMIA Group S.A.S. LT IDR B Affirmed B
senior secured LT B+ Affirmed RR3 B+
IDEMIA America Corp.
senior secured LT B+ Affirmed RR3 B+
IDEMIA France S.A.S.
senior secured LT B+ Affirmed RR3 B+
TECHNICOLOR CREATIVE: EUR382M Bank Debt Trades at 16% Discount
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Participations in a syndicated loan under which Technicolor
Creative Studios SA is a borrower were trading in the secondary
market around 83.9 cents-on-the-dollar during the week ended
Friday, June 30, 2023, according to Bloomberg's Evaluated Pricing
service data.
The EUR382 million facility is a payment-in-kind Term loan that is
scheduled to mature on September 28, 2026. The amount is fully
drawn and outstanding.
Technicolor Creative Studios SA (TCS) is a leading provider of VFX,
and animation services for the entertainment industry, and creative
services and technologies for the advertising industry. The
Company's country of domicile is France.
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G E R M A N Y
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ADAPA GMBH: EUR475M Bank Debt Trades at 60% Discount
----------------------------------------------------
Participations in a syndicated loan under which adapa GmbH is a
borrower were trading in the secondary market around 40
cents-on-the-dollar during the week ended Friday, June 30, 2023,
according to Bloomberg's Evaluated Pricing service data.
The EUR475 million facility is a Term loan that is scheduled to
mature on September 24, 2028. The amount is fully drawn and
outstanding.
Adapa GmbH provides packaging products. The Company offers shrink
films, laminates, wicket bags, tobacco pouches, and bread bags. The
Company's country of domicile is Germany.
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I R E L A N D
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ANCHORAGE CAPITAL 8: S&P Assigns B- Rating on Class F Notes
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S&P Global Ratings assigned credit ratings to Anchorage Capital
Europe CLO 8 DAC's class A, B-1, B-2, C, D, E, and F notes. The
issuer also issued unrated subordinated notes.
The class F note is a delayed draw tranche with a maximum notional
amount of EUR17.60 million and a spread of three/six-month Euro
Interbank Offered Rate (EURIBOR) plus 9.00%. They can only be
issued during the reinvestment period. The issuer will use the full
proceeds received from the sale of these notes to redeem the
subordinated notes. Upon issuance, the class F notes' spread could
be subject to a variation and, if higher, is subject to rating
agency confirmation.
The ratings reflect S&P's assessment of:
-- The diversified collateral pool, which primarily comprises
broadly syndicated speculative-grade senior-secured term loans and
bonds that are governed by collateral quality tests.
-- The credit enhancement provided through the subordination of
cash flows, excess spread, and overcollateralization.
-- The collateral manager's experienced team, which can affect the
performance of the rated notes through collateral selection,
ongoing portfolio management, and trading.
-- The transaction's legal structure, which is bankruptcy remote.
-- The transaction's counterparty risks, which are in line with
S&P's counterparty rating framework.
Portfolio benchmarks
CURRENT
S&P weighted-average rating factor 2,859.38
Default rate dispersion 532.80
Weighted-average life (years) 4.55
Obligor diversity measure 106.09
Industry diversity measure 18.18
Regional diversity measure 1.18
Transaction key metrics
CURRENT
Portfolio weighted-average rating
derived from S&P's CDO evaluator B
'CCC' category rated assets (%) 3.26
Covenanted 'AAA' weighted-average recovery (%) 35.99
Actual weighted-average spread (%) 4.03
Covenanted weighted-average coupon (%) 5.24
Asset priming obligations and uptier priming debt
Under the transaction documents, the issuer can purchase asset
priming (drop down) obligations and/or uptier priming debt to
address the risk of a distressed obligor either moving collateral
outside the existing creditors' covenant group or incurring new
money debt senior to the existing creditors.
Rating rationale
Under the transaction documents, the rated notes pay quarterly
interest unless a frequency switch event occurs. Following this,
the notes will switch to semiannual payments. The portfolio's
reinvestment period will end approximately three years after
closing.
The portfolio is well-diversified, primarily comprising broadly
syndicated speculative-grade senior-secured term loans and
senior-secured bonds. Therefore, S&P has conducted our credit and
cash flow analysis by applying its criteria for corporate cash flow
CDOs.
S&P said, "In our cash flow analysis, we used the EUR400 million
target par amount, the actual weighted-average spread (4.03%), the
covenanted weighted-average coupon (5.24%), and the target
portfolio's weighted-average recovery rates at each rating level.
We applied various cash flow stress scenarios, using four different
default patterns, in conjunction with different interest rate
stress scenarios for each liability rating category.
"Under our structured finance sovereign risk criteria, we consider
that the transaction's exposure to country risk is sufficiently
mitigated at the assigned ratings."
Until the end of the reinvestment period on June 28, 2026, the
collateral manager may substitute assets in the portfolio for so
long as S&P's CDO Monitor test is maintained or improved in
relation to the initial ratings on the notes. This test looks at
the total amount of losses that the transaction can sustain as
established by the initial cash flows for each rating, and it
compares that with the current portfolio's default potential plus
par losses to date. As a result, until the end of the reinvestment
period, the collateral manager may through trading deteriorate the
transaction's current risk profile, as long as the initial ratings
are maintained.
The transaction's documented counterparty replacement and remedy
mechanisms adequately mitigate its exposure to counterparty risk
under S&P's current counterparty criteria.
The transaction's legal structure and framework is bankruptcy
remote, in line with S&P's legal criteria.
S&P said, "Following our analysis of the credit, cash flow,
counterparty, operational, and legal risks, we believe our ratings
are commensurate with the available credit enhancement for the
class A to F notes. Our credit and cash flow analysis indicates
that the available credit enhancement for the class B-1, B-2, C, D,
and E notes could withstand stresses commensurate with higher
ratings than those we have assigned. However, as the CLO will be in
its reinvestment phase starting from closing, during which the
transaction's credit risk profile could deteriorate, we have capped
our ratings assigned to the notes.
"For the class F notes, our credit and cash flow analysis indicates
that the available credit enhancement could withstand stresses that
are commensurate with a lower rating. However, we have applied our
'CCC' rating criteria resulting in a 'B- (sf)' rating on this class
of notes."
The ratings uplift (to 'B-') reflects several key factors,
including:
-- The available credit enhancement for this class of notes is in
the same range as other CLOs that S&P rates, and that has recently
been issued in Europe.
-- The portfolio's average credit quality is similar to other
recent CLOs.
-- S&P's model generated break-even default rate at the 'B-'
rating level of 18.82% (for a portfolio with a weighted-average
life of 4.55 years), versus if it was to consider a long-term
sustainable default rate of 3.1% for 4.55 years, which would result
in a target default rate of 14.11%.
-- For S&P to assign a rating in the 'CCC' category, it also
assessed (i) whether the tranche is vulnerable to non-payments in
the near future, (ii) if there is a one in two chance of this
tranche defaulting, and (iii) if we envision this tranche to
default in the next 12-18 months.
-- Following this analysis, S&P considers that the available
credit enhancement for the class F notes is commensurate with a 'B-
(sf)' rating.
S&P said, "Taking the above factors into account and following our
analysis of the credit, cash flow, counterparty, operational, and
legal risks, we believe that our ratings are commensurate with the
available credit enhancement for all the rated classes of notes.
"In addition to our standard analysis, to provide an indication of
how rising pressures among speculative-grade corporates could
affect our ratings on European CLO transactions, we also included
the sensitivity of the ratings on the class A to E notes based on
four hypothetical scenarios.
"As our ratings analysis makes additional considerations before
assigning ratings in the 'CCC' category, and we would assign a 'B-'
rating if the criteria for assigning a 'CCC' category rating are
not met, we have not included the above scenario analysis results
for the class F notes."
The transaction securitizes a portfolio of primarily senior-secured
leveraged loans and bonds, and it is managed by Anchorage CLO ECM
LLC.
Environmental, social, and governance (ESG) factors
S&P regards the exposure to ESG credit factors in the transaction
as being broadly in line with its benchmark for the sector.
Primarily due to the diversity of the assets within CLOs, the
exposure to environmental credit factors is viewed as below
average, social credit factors are below average, and governance
credit factors are average. For this transaction, the documents
prohibit assets from being related to certain activities,
including, but not limited to the following: An obligor that
derives more than 10% of revenue from payday lending or predatory
lending activities or activities adversely affecting animal
welfare, more than 20% of revenue from the extraction or production
of crude bitumen or extraction of shale oil/gas, more than 25% of
revenue from mining of coal, uranium, and minerals in zones of
military conflict, and/or more than 50% of revenue from
defense-related products or nuclear energy. Accordingly, since the
exclusion of assets from these industries does not result in
material differences between the transaction and our ESG benchmark
for the sector, no specific adjustments have been made in our
rating analysis to account for any ESG-related risks or
opportunities.
Environmental, social, and governance (ESG) corporate credit
indicators
The influence of ESG factors in our credit rating analysis of
European CLOs primarily depends on the influence of ESG factors in
our analysis of the underlying corporate obligors. To provide
additional disclosure and transparency of the influence of ESG
factors for the CLO asset portfolio in aggregate, we've calculated
the weighted-average and distributions of our ESG credit indicators
for the underlying obligors. S&P regards this transaction's
exposure as being broadly in line with S&P's benchmark for the
sector, with the environmental and social credit indicators
concentrated primarily in category 2 (neutral) and the governance
credit indicators concentrated in category 3 (moderately negative).
Corporate ESG credit indicators
ENVIRONMENTAL SOCIAL GOVERNANCE
Weighted-average credit indicator* 2.07 2.20 2.93
E-1/S-1/G-1 distribution (%) 0.00 1.35 0.00
E-2/S-2/G-2 distribution (%) 81.46 69.39 12.21
E-3/S-3/G-3 distribution (%) 3.88 12.97 70.70
E-4/S-4/G-4 distribution (%) 0.88 2.00 0.38
E-5/S-5/G-5 distribution (%) 0.00 0.50 2.93
Unmatched obligor (%) 9.94 9.94 9.94
Unidentified asset (%) 3.85 3.85 3.85
*Only includes matched obligor.
Ratings list
CLASS RATING AMOUNT INTEREST RATE CREDIT
(MIL. EUR) ENHANCEMENT (%)
A AAA (sf) 236.80 3mE + 1.95% 40.80
B-1 AA (sf) 38.60 3mE + 3.20% 29.90
B-2 AA (sf) 5.00 6.80% 29.90
C A (sf) 25.80 3mE + 4.15% 23.45
D BBB- (sf) 26.60 3mE + 6.10% 16.80
E BB- (sf) 19.40 3mE + 7.80% 11.95
F* B- (sf) 17.60 3mE + 9.00% 7.55
Sub NR 46.50 N/A N/A
*The class F notes is a delayed drawdown tranche not issued at
closing.
NR--Not rated.
N/A--Not applicable.
3mE--Three-month Euro Interbank Offered Rate.
INVESCO EURO X: S&P Assigns B-(sf) Rating on EUR12MM Class F Notes
------------------------------------------------------------------
S&P Global Ratings assigned its credit ratings to Invesco Euro CLO
Issuer X DAC's class A, B-1, B-2, C, D, E, and F notes. At closing,
the issuer also issued unrated subordinated notes.
Under the transaction documents, the rated notes pay quarterly
interest unless a frequency switch event occurs, upon which the
notes pay semiannually.
This transaction has a two-year non-call period, and the
portfolio's reinvestment period will end approximately four and a
half years after closing.
The ratings assigned to the notes reflect S&P's assessment of:
-- The diversified collateral pool, which primarily comprises
broadly syndicated speculative-grade senior secured term loans and
bonds governed by collateral quality tests.
-- The credit enhancement provided through the subordination of
cash flows, excess spread, and overcollateralization.
-- The collateral manager's experienced team, which can affect the
performance of the rated notes through collateral selection,
ongoing portfolio management, and trading.
Portfolio benchmarks
CURRENT
S&P Global Ratings weighted-average rating factor 2,842.68
Default rate dispersion 509.23
Weighted-average life (years) 4.54
Obligor diversity measure 100.62
Industry diversity measure 25.73
Regional diversity measure 1.20
Transaction key metrics
CURRENT
Total par amount (mil. EUR) 400.00
Defaulted assets (mil. EUR) 0
Number of performing obligors 119
Portfolio weighted-average rating
derived from S&P's CDO evaluator B
'CCC' category rated assets (%) 1.88
'AAA' target portfolio weighted-average recovery (%) 36.04
Covenanted weighted-average spread (%) 3.95
Covenanted weighted-average coupon (%) 4.90
Asset priming obligations and uptier priming debt
Under the transaction documents, the issuer can purchase asset
priming (drop down) obligations and uptier priming debt to address
the risk of a distressed obligor either moving collateral outside
the existing creditors' covenant group or incurring new money debt
senior to the existing creditors.
Rating rationale
S&P said, "Our ratings reflect our assessment of the collateral
portfolio's credit quality, which has a weighted-average rating of
'B'. We consider that the portfolio will primarily comprise broadly
syndicated speculative-grade senior secured term loans and senior
secured bonds on the effective date. Therefore, we conducted our
credit and cash flow analysis by applying our criteria for
corporate cash flow CDOs.
"In our cash flow analysis, we used the EUR400 million par amount,
the covenanted weighted-average spread of 3.95%, and the covenanted
portfolio weighted-average recovery rates for all rated notes. We
applied various cash flow stress scenarios, using four different
default patterns, in conjunction with different interest rate
stress scenarios for each liability rating category.
"The transaction's documented counterparty replacement and remedy
mechanisms adequately mitigate its exposure to counterparty risk
under our counterparty criteria.
"Following the application of our structured finance sovereign risk
criteria, we consider the transaction's exposure to country risk to
be limited at the assigned ratings, as the exposure to individual
sovereigns does not exceed the diversification thresholds outlined
in our criteria.
"The transaction's legal structure is bankruptcy remote, in line
with our legal criteria.
"Our credit and cash flow analysis indicate that the available
credit enhancement for the class B-1 to E notes could withstand
stresses commensurate with higher ratings than those assigned.
However, as the CLO is still in its reinvestment phase, during
which the transaction's credit risk profile could deteriorate, we
capped our assigned ratings on the notes. The class A notes can
withstand stresses commensurate with the assigned ratings.
"For the class F notes, our credit and cash flow analysis indicate
that the available credit enhancement could withstand stresses
commensurate with a lower rating. However, we have applied our
'CCC' rating criteria, resulting in a 'B- (sf)' rating on this
class of notes." The ratings uplift (to 'B-') reflects several key
factors, including:
-- The available credit enhancement for this class of notes is in
the same range as other recently issued European CLOs that S&P
rates.
-- The portfolio's average credit quality is similar to other
recent CLOs.
-- S&P's model generated break-even default rate at the 'B-'
rating level of 26.13% (for a portfolio with a weighted-average
life of 4.54 years), versus if it was to consider a long-term
sustainable default rate of 3.1% for 4.54 years, which would result
in a target default rate of 14.07%.
-- The actual portfolio is generating higher spreads versus the
covenanted thresholds modelled in our cash flow analysis.
S&P said, "For us to assign a rating in the 'CCC' category, we also
assess (i) whether the tranche is vulnerable to nonpayments in the
near future, (ii) if there is a one in two chance of this tranche
defaulting, and (iii) if we envision this tranche to default in the
next 12-18 months. Following this analysis, we consider the
available credit enhancement for the class F notes commensurate
with a 'B- (sf)' rating."
"Considering these factors and following our analysis of the
credit, cash flow, counterparty, operational, and legal risks, we
believe our ratings are commensurate with the available credit
enhancement for the class A, B-1, B-2, C, D, E, and F notes.
"In addition to our standard analysis, to indicate how rising
pressures among speculative-grade corporates could affect our
ratings on European CLO transactions, we also included the
sensitivity of the ratings on the class A to E notes based on four
hypothetical scenarios.
"As our ratings analysis makes additional considerations before
assigning ratings in the 'CCC' category, and we would assign a 'B-'
rating if the criteria for assigning a 'CCC' category rating are
not met, we have not included the above scenario analysis results
for the class F notes."
Environmental, social, and governance (ESG) factors
S&P said, "We regard the exposure to ESG credit factors in the
transaction as being broadly in line with our benchmark for the
sector. Primarily due to the diversity of the assets within CLOs,
the exposure to environmental credit factors is viewed as below
average, social credit factors are below average, and governance
credit factors are average." For this transaction, the documents
prohibit assets from being related to the following industries:
-- involvement in development, production, maintenance, trade, or
stock-piling of weapons of mass destruction, including biological
and chemical weapons, anti-personnel land mines, cluster munitions,
depleted uranium, nuclear weapons, radiological weapons and white
phosphorus;
-- generating more than 1% of revenues from the sale, mining, or
extraction of thermal coal or coal-based power generation; the sale
or extraction of oil sands; or the extraction of fossil fuels from
unconventional sources and shale gas;
-- deriving more than 5% of revenue from the trade of illegal
drugs or narcotics; or production or marketing of pornography;
-- deriving more than 5% of revenue from weapons or tailormade
components, and obligors involved in the manufacturing and sale of
civilian firearms;
-- involvement in tobacco production or deriving more than 5% of
revenue from products containing tobacco;
-- deriving more than 5% of revenue from oil sands extraction, or
from expansion plans for unconventional oil and gas extraction;
-- being an oil and gas producer deriving less than 40% of revenue
from natural gas or renewables, or with reserves of less than 20%
derived from natural gas;
-- performing oil exploration, or providing storage facilities or
services for oil, or providing pipelines or other infrastructure
intended for use in the oil life cycle;
-- being an electrical utility with carbon intensity greater than
100gCO2/kWh, or--if carbon intensity is undisclosed--generating
more than (i) 1% of electricity from thermal coal, (ii) 10% from
liquid fuels (oil), (iii) 50% from natural gas, or (iv) 0% from
nuclear generation;
-- primarily providing payday lending;
-- deriving more than 50% of revenue from the trade in, production
or marketing of (i) pornography or prostitution, (ii) opioid
manufacturing and distribution, (iii) hazardous chemicals,
pesticides and wastes, or (iv) the extraction of fossil fuels from
unconventional sources or other fracking activities, or coal mining
and/or coal-based power generation; or
-- trading in endangered or protected wildlife.
Since the exclusion of assets from these industries does not result
in material differences between the transaction and our ESG
benchmark for the sector, S&P has not adjusted its rating analysis
to account for any ESG-related risks or opportunities.
Environmental, social, and governance (ESG) corporate credit
indicators
S&P said, "The influence of ESG factors in our credit rating
analysis of European CLOs primarily depends on the influence of ESG
factors in our analysis of the underlying corporate obligors. To
provide additional disclosure and transparency of the influence of
ESG factors for the CLO asset portfolio in aggregate, we've
calculated the weighted-average and distributions of our ESG credit
indicators for the underlying obligors. We regard this
transaction's exposure as being broadly in line with our benchmark
for the sector, with the environmental and social credit indicators
concentrated primarily in category 2 (neutral) and the governance
credit indicators concentrated in category 3 (moderately
negative)."
Corporate ESG credit indicators
ENVIRONMENTAL SOCIAL GOVERNANCE
Weighted-average credit indicator* 2.06 2.23 3.00
E-1/S-1/G-1 distribution (%) 0.75 0.00 0.00
E-2/S-2/G-2 distribution (%) 77.84 69.71 7.35
E-3/S-3/G-3 distribution (%) 4.46 8.90 71.38
E-4/S-4/G-4 distribution (%) 0.50 4.69 2.62
E-5/S-5/G-5 distribution (%) 0.00 0.25 2.19
Unmatched obligor (%) 14.50 14.50 14.50
Unidentified asset (%) 1.95 1.95 1.95
*Only includes matched obligor.
Invesco Euro CLO Issuer X is a European cash flow CLO
securitization of a revolving pool, comprising euro-denominated
senior secured loans and bonds issued mainly by speculative-grade
borrowers. Invesco CLO Equity Fund IV LP manages the transaction.
Ratings list
CLASS RATING AMOUNT SUB (%) INTEREST RATE*
(MIL. EUR)
A AAA (sf) 240.00 40.00 Three/six-month EURIBOR
plus 1.88%
B-1 AA (sf) 36.00 28.50 Three/six-month EURIBOR
plus 3.25%
B-2 AA (sf) 10.00 28.50 6.90%
C A (sf) 22.00 23.00 Three/six-month EURIBOR
plus 4.50%
D BBB (sf) 26.00 16.50 Three/six-month EURIBOR
plus 6.40%
E BB- (sf) 18.00 12.00 Three/six-month EURIBOR
plus 7.81%
F B- (sf) 12.00 9.00 Three/six-month EURIBOR
plus 10.06%
Sub NR 26.70 N/A N/A
*The payment frequency switches to semiannual and the index
switches to six-month EURIBOR when a frequency switch event occurs.
EURIBOR--Euro Interbank Offered Rate.
NR--Not rated.
N/A--Not applicable.
MADISON PARK XIX: S&P Assigns 'B-' Rating on Class F Notes
----------------------------------------------------------
S&P Global Ratings assigned credit ratings to Madison Park Euro
Funding XIX DAC's class A-1, A-2, B-1, B-2, C, D, E, and F notes.
At closing, the issuer also issued unrated subordinated notes.
Under the transaction documents, the rated notes pay quarterly
interest unless a frequency switch event occurs. Following this,
the notes will permanently switch to semiannual payments.
The portfolio's reinvestment period will end approximately 4.6
years after closing, while the non-call period will end 1.5 years
after closing.
The ratings assigned to the notes reflect S&P's assessment of:
-- The diversified collateral pool, which primarily comprises
broadly syndicated speculative-grade senior secured term loans and
bonds that are governed by collateral quality tests.
-- The credit enhancement provided through the subordination of
cash flows, excess spread, and overcollateralization.
-- The collateral manager's experienced team, which can affect the
performance of the rated notes through collateral selection,
ongoing portfolio management, and trading.
-- The transaction's legal structure, which is bankruptcy remote.
-- The transaction's counterparty risks, which are in line with
S&P's counterparty rating framework.
Portfolio benchmarks
CURRENT
S&P Global Ratings weighted-average rating factor 2,782.10
Weighted-average life (years) 4.54
Obligor diversity measure 128.23
Industry diversity measure 26.47
Regional diversity measure 1.20
Weighted-average rating B
'CCC' category rated assets (%) 1.25
'AAA' weighted-average recovery rate 35.00
Weighted-average spread (net of floors; %) 4.25
S&P said, "We consider that the target portfolio is
well-diversified, primarily comprising broadly syndicated
speculative-grade senior secured term loans. Therefore, we have
conducted our credit and cash flow analysis by applying our
criteria for corporate cash flow CDOs.
"In our cash flow analysis, we modelled the EUR400 million target
par amount, the covenanted weighted-average spread of 4.25%, and
the covenanted weighted-average coupon of 4.80% as indicated by the
collateral manager. We have assumed weighted-average recovery rates
in line with the recovery rates of the actual portfolio presented
to us, except for the 'AAA' level, where we have modelled a 35.00%
covenanted weighted-average recovery rate as indicated by the
collateral manager. We applied various cash flow stress scenarios,
using four different default patterns, in conjunction with
different interest rate stress scenarios for each liability rating
category.
"Our credit and cash flow analysis shows that the class B-1, B-2,
C, D, and E notes benefit from break-even default rate (BDR) and
scenario default rate (SDR) cushions that we would typically
consider to be in line with higher ratings than those assigned.
However, as the CLO will have a reinvestment phase, during which
the transaction's credit risk profile could deteriorate, we have
capped our ratings on the notes. The class A-1 and A-2 notes can
withstand stresses commensurate with the assigned ratings.
"The class F notes' current BDR cushion is negative at the assigned
rating. Nevertheless, based on the portfolio's actual
characteristics and additional overlaying factors, including our
long-term corporate default rates and recent economic outlook, we
believe this class is able to sustain a steady-state scenario, in
accordance with our criteria." S&P's analysis further reflects
several factors, including:
-- The class F notes' available credit enhancement, which is in
the same range as that of other CLOs S&P has rated and that has
recently been issued in Europe.
-- S&P's model-generated portfolio default risk, which is at the
'B-' rating level at 25.52% (for a portfolio with a
weighted-average life of 4.54 years) versus 14.07% if it was to
consider a long-term sustainable default rate of 3.1% for 4.54
years.
-- Whether the tranche is vulnerable to nonpayment in the near
future.
-- If there is a one-in-two chance for this note to default.
-- If S&P envisions this tranche to default in the next 12-18
months.
Following this analysis, S&P considers that the available credit
enhancement for the class F notes is commensurate with the assigned
'B- (sf)' rating.
S&P said, "Until the end of the reinvestment period on Jan. 15,
2028, the collateral manager can substitute assets in the portfolio
for so long as our CDO Monitor test is maintained or improved in
relation to the initial ratings on the notes. This test looks at
the total amount of losses that the transaction can sustain as
established by the initial cash flows for each rating, and compares
that with the default potential of the current portfolio plus par
losses to date. As a result, until the end of the reinvestment
period, the collateral manager may, through trading, deteriorate
the transaction's current risk profile, as long as the initial
ratings are maintained.
"Under our structured finance sovereign risk criteria, we consider
that the transaction's exposure to country risk is sufficiently
mitigated at the assigned ratings.
"The transaction's documented counterparty replacement and remedy
mechanisms adequately mitigate its exposure to counterparty risk
under our current counterparty criteria.
"The transaction's legal structure is bankruptcy remote, in line
with our legal criteria.
"The CLO is managed by Credit Suisse Asset Management Ltd. Under
our "Global Framework For Assessing Operational Risk In Structured
Finance Transactions," published on Oct. 9, 2014, the maximum
potential rating on the liabilities is 'AAA'.
"Following our analysis of the credit, cash flow, counterparty,
operational, and legal risks, we believe our ratings are
commensurate with the available credit enhancement for each class
of notes.
"In addition to our standard analysis, to provide an indication of
how rising pressures among speculative-grade corporates could
affect our ratings on European CLO transactions, we have also
included the sensitivity of the ratings on the class A-1 to F notes
based on four hypothetical scenarios.
"As our ratings analysis makes additional considerations before
assigning ratings in the 'CCC' category, and we would assign a 'B-'
rating if the criteria for assigning a 'CCC' category rating are
not met, we have not included the above scenario analysis results
for the class F notes."
Environmental, social, and governance (ESG)
S&P said, "We regard the exposure to ESG credit factors in the
transaction as being broadly in line with our benchmark for the
sector. Primarily due to the diversity of the assets within CLOs,
the exposure to environmental credit factors is viewed as below
average, social credit factors are below average, and governance
credit factors are average. For this transaction, the documents
prohibit assets from being related to activities that are
identified as not compliant with international treaties on
controversial weapons; to activities that evidence severe
weaknesses in business conduct and governance in relation to the
United Nations Global Compact Principles; production or trade of
illegal drugs or narcotics; or trades in endangered or protected
wildlife." Assets that relate to the following are also
prohibited:
-- Draw more than 5% of revenue from tobacco;
-- Draw more than 5% of revenue from thermal coal;
-- Draw more than 10% of revenue from civilian firearms;
-- Draw more than 5% of revenue from oil sands extraction or
fossil fuels from unconventional sources;
-- Draw more than 5% of revenue from pornography and/or
prostitution or palm oil and palm fruit products;
-- Draw more than 30% of revenue from opioid manufacturing or
ozone-depleting substances; and
-- Draw more than 25% of revenue from the ownership or operation
of private prisons.
Since the exclusion of assets related to these activities does not
result in material differences between the transaction and our ESG
benchmark for the sector, no specific adjustments have been made in
our rating analysis to account for any ESG-related risks or
opportunities.
Environmental, social, and governance (ESG) corporate credit
indicators
S&P said, "The influence of ESG factors in our credit rating
analysis of European CLOs primarily depends on the influence of ESG
factors in our analysis of the underlying corporate obligors. To
provide additional disclosure and transparency of the influence of
ESG factors for the CLO asset portfolio in aggregate, we've
calculated the weighted-average and distributions of our ESG credit
indicators for the underlying obligors. We regard this
transaction's exposure as being broadly in line with our benchmark
for the sector, with the environmental and social credit indicators
concentrated primarily in category 2 (neutral) and the governance
credit indicators concentrated in category 3 (moderately
negative)."
Corporate ESG Credit Indicators
ENVIRONMENTAL SOCIAL GOVERNANCE
Weighted-average credit indicator* 2.08 2.09 2.96
E-1/S-1/G-1 distribution (%) 0.75 0.25 0.00
E-2/S-2/G-2 distribution (%) 71.75 73.26 11.30
E-3/S-3/G-3 distribution (%) 5.61 3.48 62.44
E-4/S-4/G-4 distribution (%) 0.75 1.88 2.50
E-5/S-5/G-5 distribution (%) 0.00 0.00 2.63
Unmatched obligor (%) 13.13 13.13 13.13
Unidentified asset (%) 8.00 8.00 8.00
*Only includes matched obligor.
Ratings list
CLASS RATING* AMOUNT INTEREST RATE§ CREDIT
(MIL. EUR) ENHANCEMENT (%)
A-1 AAA (sf) 228.00 3M EURIBOR + 1.90% 40.00
A-2 AAA (sf) 12.00 4.50% 40.00
B-1 AA (sf) 28.00 3M EURIBOR + 3.15% 29.25
B-2 AA (sf) 15.00 7.05% 29.25
C A (sf) 23.00 3M EURIBOR + 3.90% 23.50
D BBB- (sf) 25.00 3M EURIBOR + 6.20% 17.25
E BB- (sf) 18.00 3M EURIBOR + 7.83% 12.75
F B- (sf) 18.00 3M EURIBOR + 10.00% 8.25
Sub. Notes NR 28.60 N/A N/A
*The ratings assigned to the class A-1, A-2, B-1, and B-2 notes
address timely interest and ultimate principal payments. The
ratings assigned to the class C, D, E, and F notes address ultimate
interest and principal payments.
§The payment frequency switches to semiannual and the index
switches to six-month EURIBOR when a frequency switch event occurs.
3M--Three month.
EURIBOR--Euro Interbank Offered Rate.
NR--Not rated.
N/A--Not applicable.
PRIMROSE RESIDENTIAL 2022-1: Fitch Puts 6 Tranches on Observation
-----------------------------------------------------------------
Fitch Ratings has placed six tranches of Primrose Residential
2022-1 DAC Under Criteria Observation (UCO) following criteria
changes.
RATING ACTIONS
ENTITY / DEBT RATING PRIOR
------------- ------ -----
Primrose Residential
2022-1 DAC
B XS2460260255 LT AA-sf Under Criteria Observation AA-sf
C XS2460260842 LT A-sf Under Criteria Observation A-sf
D XS2460260925 LT BBBsf Under Criteria Observation BBBsf
E XS2460261147 LT BBsf Under Criteria Observation BBsf
F XS2460267771 LT B-sf Under Criteria Observation B-sf
G XS2460267938 LT CCCsf Under Criteria Observation CCCsf
TRANSACTION SUMMARY
Primrose Residential 2022-1 DAC is a securitisation of first-lien
residential mortgage assets that were originated before the global
financial crisis by three Irish lenders. The seller is Ailm
Residential DAC and the provider of representations and warranties
is Morgan Stanley Principal Funding, Inc. Mars Capital Finance
Ireland DAC and Pepper Finance Corporation (Ireland) DAC service
the portfolio and remain the legal title holders.
KEY RATING DRIVERS
The UCO on the class B to G notes indicates the possibility of
rating changes as a result of the application of Fitch's updated
European RMBS Rating Criteria.
The criteria update reflects changes to key foreclosure frequency
and recovery rate assumptions in Ireland, following Fitch's updated
views on the Irish housing and mortgage market (see "Fitch Ratings
Updates European RMBS Rating Criteria Consolidating New Irish RMBS
Assumptions" dated June 21 2023 at www.fitchratings.com).
Fitch will resolve the UCO status within six months of the criteria
update.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
The application of the updated assumptions could result in positive
rating action of up to three notches. Among the different updated
assumptions, the lower representative weighted average foreclosure
frequency reduces portfolio default assumptions, while the
reduction in the house price decline increases the portfolio
recovery assumptions, all else being equal.
SIGNAL HARMONIC I: Fitch Assigns B- Rating on Class F Debt
----------------------------------------------------------
Fitch Ratings has assigned Signal Harmonic CLO I DAC final
ratings.
ENTITY / DEBT RATING PRIOR
------------- ------ -----
Signal Harmonic
CLO I DAC
A XS2623604316 LT AAAsf New Rating AAA(EXP)sf
B XS2623604407 LT AAsf New Rating AA(EXP)sf
C XS2623606105 LT Asf New Rating A(EXP)sf
D XS2623604746 LT BBBsf New Rating BBB(EXP)sf
E XS2623604829 LT BB-sf New Rating BB-(EXP)sf
F XS2623605800 LT B-sf New Rating B-(EXP)sf
Subordinated
XS2623672404 LT NRsf New Rating NR(EXP)sf
TRANSACTION SUMMARY
Signal Harmonic CLO I DAC is a securitisation of mainly senior
secured obligations (at least 90%) with a component of senior
unsecured, second-lien loans and high-yield bonds. Note proceeds
were used to fund a portfolio with a target par of EUR325 million.
The portfolio is actively managed by Signal Harmonic Limited and
Signal Capital Partners Limited.
This is the first collateralised loan obligation (CLO) managed by
collateral managers. The CLO has a 4.1-year reinvestment period and
an eight-year weighted average life (WAL) test.
KEY RATING DRIVERS
Average Portfolio Credit Quality (Neutral): Fitch assesses the
average credit quality of obligors at 'B'/ 'B-'. The Fitch weighted
average rating factor (WARF) of the identified portfolio is 24.65.
High Recovery Expectations (Positive): At least 90% of the
portfolio will comprise senior secured obligations. Fitch views the
recovery prospects for these assets as more favourable than for
second-lien, unsecured and mezzanine assets. The Fitch weighted
average recovery rate (WARR) of the identified portfolio is
62.77%.
Diversified Portfolio (Positive): The transaction includes two
Fitch matrices, one effective at closing corresponding to a top 10
obligor concentration limit at 20% of the portfolio balance, one
fixed-rate assets limit at 5% of the portfolio, and an eight-year
WAL test; and one that can be selected by the manager at any time
from one year after closing as long as the collateral principal
amount (defaults at Fitch-calculated collateral value) is at least
at the reinvestment target par balance and corresponding to the
same top 10 obligors and fixed-rate assets limits as the closing
matrix, but with a seven-year WAL test.
The transaction also includes various concentration limits,
including the maximum exposure to the three-largest Fitch-defined
industries in the portfolio at 40%. These covenants ensure that the
asset portfolio will not be exposed to excessive concentration.
Portfolio Management (Neutral): The transaction has an
approximately 4.1-year reinvestment period and includes
reinvestment criteria similar to those of other European
transactions. Fitch's analysis is based on a stressed-case
portfolio with the aim of testing the robustness of the transaction
structure against its covenants and portfolio guidelines.
Cash Flow Modelling (Positive): The WAL used for the the
stressed-case portfolio and matrices analysis is 12 months less
than the WAL covenant, to account for structural and reinvestment
conditions post-reinvestment period, including the
over-collateralisation and Fitch 'CCC' limitation passing post
reinvestment, and a consistently decreasing WAL test. Fitch
believes these conditions would reduce the effective risk horizon
of the portfolio during the stress period.
Class F Delayed Issuance (Neutral): In Fitch's view, the sale of
the F tranche would reduce available excess spread by the class F
interest amount to cure the reinvestment over-collateralisation
test. Consequently, Fitch has modelled the deal assuming the
tranche is issued on the issue date at the maximum spread to
reflect the maximum stress the transaction could withstand if that
occurs.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
A 25% increase of the mean default rate (RDR) across all ratings
and a 25% decrease of the recovery rate (RRR) across all ratings of
the identified portfolio would lead to downgrades of no more than
one notch for the class D and E notes, and have no impact on the
class A, B, C and F notes.
Based on the identified portfolio, downgrades may occur if the loss
expectation is larger than initially assumed, due to unexpectedly
high levels of default and portfolio deterioration. Due to the
better metrics and shorter life of the identified portfolio than
the stressed-case portfolio, the class B and E notes have a cushion
of two notches, the class C one notch, the class D notes three
notches and the class F notes five notches.
Should the cushion between the identified portfolio and the
stressed-case portfolio be eroded due to manager trading or
negative portfolio credit migration, a 25% increase of the mean RDR
across all ratings and a 25% decrease of the RRR across all ratings
of the stressed-case portfolio would lead to downgrades of up to
three notches for the notes.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
A 25% reduction of the mean RDR across all ratings and a 25%
increase in the RRR across all ratings of the stressed-case
portfolio would lead to upgrades of up to five notches, except for
the 'AAAsf' rated notes.
During the reinvestment period, based on the stressed-case
portfolio, upgrades may occur on better-than-expected portfolio
credit quality and a shorter remaining WAL test, meaning the notes
are able to withstand larger-than-expected losses for the
transaction's remaining life. After the end of the reinvestment
period, upgrades may occur on stable portfolio credit quality and
deleveraging, leading to higher credit enhancement and excess
spread available to cover losses in the remaining portfolio.
=========
I T A L Y
=========
AUTOFLORENCE 1: S&P Raises Class E-Dfrd Notes Rating to 'BB(sf)'
----------------------------------------------------------------
S&P Global Ratings raised to 'A+ (sf)' from 'A (sf)' and to 'BB
(sf)' from 'BB- (sf)' its credit ratings on AutoFlorence 1 S.r.l.'s
class C and E-Dfrd notes. At the same time, S&P affirmed its 'AA
(sf)', 'AA (sf)', and 'BBB (sf)' ratings on the class A, B, and
D-Dfrd notes, respectively.
The rating actions follow S&P's review of the transaction's
performance and the application of its relevant criteria, and
consider the transaction's current structural features.
As of the April 2023 payment date, the pool factor has fallen to
21%. As no triggers have been breached, the transaction continues
to amortize pro rata, with the credit enhancement percentage
available to each class of notes remaining constant since closing.
S&P said, "Given the low pool factor and strong collateral
performance, we have lowered our base-case gross loss assumptions,
but kept the gross loss multiples unchanged. We also considered the
current portfolio mix rather than the worst-case mix at closing."
At closing, S&P applied a stressed recovery rate of 12% at all
rating levels. In line with our global auto ABS criteria, it has
assumed a recovery rate base case of 16% and applied
rating-specific recovery haircuts.
Under S&P's criteria, it applied the following credit assumptions
in its analysis.
Table 1
Credit assumptions
PARAMETER AT CLOSING CURRENT
Gross loss base case (%) 4.16 1.90
MULTIPLES (X)
'AAA' 4.50 4.50
'AA' 3.50 3.50
'A+' 3.00 3.00
'BBB' 1.75 1.75
'BB' 1.50 1.50
RECOVERIES (%)
Base case N/A 16.0
'AA' haircut N/A 32.1
'A+' haircut N/A 28.2
'BBB' haircut N/A 20.0
'BB' haircut N/A 15.1
STRESSED NET LOSSES (%)
'AA' 12.8 12.0
'A+' 11.0 10.2
'BBB' 6.4 5.9
'BB' 5.5 5.0
N/A--Not available.
S&P said, "Although our credit assumptions have generally improved,
we have only raised our rating on two classes of notes, given that
credit enhancement remains unchanged for all classes of notes.
"Our cash flow analysis indicates that the available credit
enhancement for the class C notes is sufficient to withstand the
credit and cash flow stresses that we apply at the 'A+' rating. We
therefore raised to 'A+ (sf)' from 'A (sf)' our rating on the class
C notes.
"For the class D-Dfrd notes, the available credit enhancement is
sufficient to withstand the credit and cash flow stresses that we
apply at the 'BBB+' rating level. However, our structured finance
sovereign risk criteria constrain our rating on this class of notes
at the unsolicited long-term sovereign rating on Italy ('BBB') as
they are not able to withstand our 'A' stresses. We therefore
affirmed our 'BBB (sf)' rating on the class D-Dfrd notes.
"The class E-Dfrd notes can pass one notch higher than the assigned
rating. However, we have not given full benefit to the modeling
results due to the sensitivity of this class of notes to a
deterioration of the performance of the collateral. In addition,
this class doesn't benefit from any external source of liquidity.
When the pool factor reduces below 10%, the transaction will switch
to sequential payment and this class may be more exposed to
tail-end risks considering its junior position in the capital
structure. We therefore raised to 'BB (sf)' from 'BB- (sf)'our
rating on the class E-Dfrd notes.
"The available credit enhancement for the class A and B notes is
sufficient to withstand the credit and cash flow stresses that we
apply at the currently assigned ratings. Therefore, we affirmed our
'AA (sf)' ratings on the class A and B notes.
"Our ratings in this transaction are not constrained by the
application of our counterparty risk criteria. Furthermore, our
operational risk criteria do not cap the ratings in this
transaction."
AutoFlorence 1 is an Italian ABS transaction that securitizes a
portfolio of auto loan receivables to private borrowers in Italy
originated by Banca Findomestic SpA.
===================
L U X E M B O U R G
===================
APOLLO FINCO: EUR348M Bank Debt Trades at 36% Discount
------------------------------------------------------
Participations in a syndicated loan under which Apollo Finco BV is
a borrower were trading in the secondary market around 63.6
cents-on-the-dollar during the week ended Friday, June 30, 2023,
according to Bloomberg's Evaluated Pricing service data.
The EUR348 million facility is a Term loan that is scheduled to
mature on October 8, 2028.
Apollo Finco BV was established in June 2021. It is a unit of
Apollo Bidco.
ARVOS BIDCO: $100M Bank Debt Trades at 87% Discount
---------------------------------------------------
Participations in a syndicated loan under which Arvos BidCo Sarl is
a borrower were trading in the secondary market around 13.3
cents-on-the-dollar during the week ended Friday, June 30, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $100 million facility is a Term loan that is scheduled to
mature on August 29, 2023. The amount is fully drawn and
outstanding.
Arvos BidCo S.a.r.l., is the parent company of the Arvos Group.
Arvos is an auxiliary power equipment provider operating in new
equipment and offering aftermarket services through two business
divisions: Ljungström for Air Preheaters (APH), including air
preheaters and gas-gas heaters for thermal power generation
facilities; and Schmidt’sche Schack for Heat Transfer Solutions
(HTS) for a wide range of industrial processes mainly in the
petrochemical industry (Transfer Line Exchangers, Waste Heat Steam
Generators and High-Temperature Products). Arvos Group is a
carve-out from Alstom and is fully owned by Triton funds and by its
management. Arvos Midco S.a r.l. (formerly Alison Midco S.a.r.l.)
is the parent company of Arvos BidCo. The Company's country of
domicile is Luxembourg.
MALLINCKRODT FINANCE: $369M Bank Debt Trades at 24% Discount
------------------------------------------------------------
Participations in a syndicated loan under which Mallinckrodt
International Finance SA is a borrower were trading in the
secondary market around 75.7 cents-on-the-dollar during the week
ended Friday, June 30, 2023, according to Bloomberg's Evaluated
Pricing service data.
The $369.7 million facility is a Term loan that is scheduled to
mature on September 30, 2027. About $350.9 million of the loan is
withdrawn and outstanding.
Mallinckrodt International Finance SA manufactures and distributes
pharmaceutical products. The Company's country of domicile is
Luxembourg.
MALLINCKRODT INTERNATIONAL: $1.39B Bank Debt Trades at 24% Off
--------------------------------------------------------------
Participations in a syndicated loan under which Mallinckrodt
International Finance SA is a borrower were trading in the
secondary market around 75.6 cents-on-the-dollar during the week
ended Friday, June 30, 2023, according to Bloomberg's Evaluated
Pricing service data.
The $1.39 billion facility is a Term loan that is scheduled to
mature on September 30, 2027. About $1.32 billion of the loan is
withdrawn and outstanding.
Mallinckrodt International Finance SA manufactures and distributes
pharmaceutical products. The company’s country of domicile is
Luxembourg.
=====================
N E T H E R L A N D S
=====================
BRIGHT BIDCO: $300M Bank Debt Trades at 48% Discount
----------------------------------------------------
Participations in a syndicated loan under which Bright Bidco BV is
a borrower were trading in the secondary market around 51.7
cents-on-the-dollar during the week ended Friday, June 30, 2023,
according to Bloomberg's Evaluated Pricing service data.
The $300 million facility is a Payment in kind Term loan that is
scheduled to mature on October 31, 2027. The amount is fully drawn
and outstanding.
Amsterdam, The Netherlands-based Bright Bidco B.V. designs and
manufactures discrete semiconductor devices and circuits for light
emitting diodes (LEDs). The Company's country of domicile is the
Netherlands.
=========
S P A I N
=========
DURO FELGUERA: EUR85M Bank Debt Trades at 43% Discount
------------------------------------------------------
Participations in a syndicated loan under which Duro Felguera SA is
a borrower were trading in the secondary market around 56.8
cents-on-the-dollar during the week ended Friday, June 30, 2023,
according to Bloomberg's Evaluated Pricing service data.
The EUR85 million facility is a Term loan that is scheduled to
mature on July 27, 2023. The amount is fully drawn and
outstanding.
Duro Felguera, S.A., through its subsidiaries, manufactures
industrial equipment for the mining industry. The Company also
markets and sells control systems for producing steel for machinery
and railroad components. The Company's country of domicile is
Spain.
MEIF 5 ARENA: S&P Upgrades ICR to 'BB-', Outlook Positive
---------------------------------------------------------
S&P Global Ratings raised its issuer credit and issue-level ratings
to 'BB-' from 'B+' on MEIF 5 Arena Holdings SA. The '4' recovery
rating on the company's EUR575 million senior secured notes remains
unchanged.
The positive outlook reflects at least a one-in-three likelihood
that S&P may raise its ratings on MEIF 5 in the next 12 months.
This would materialize if, over its forecast horizon, its debt to
EBITDA improved to below 7.0x, alongside funds from operations
(FFO) to debt comfortably above 10% on the back of financial
discipline and solid operating performance.
Strong operational performance has continued during 2023. In the
first quarter, MEIF 5 delivered total like-for-like revenue growth
of 16% versus the first quarter of 2022. Mainly supporting the
increase in revenue was higher tariffs of close to 6% this year in
off-street parking and volume recovery (as the pandemic was still
affecting volumes in the first quarter of 2022). Nevertheless, part
of the recent volume growth is related to the company's
digitalization strategy. Digital users tend to use parking more
frequently and stay longer compared with analogue users. Growth
also came from other commercial efforts like the offering of
seasonal and flexible tickets. S&P said, "As such, we assume the
company's operating performance will remain resilient in 2023-2025,
supported by a combination of inflation-linked tariff increases and
sustained car parking volume growth, at least in line with the
Spanish and Portuguese GDP from 2024. We also expect the company to
maintain a vigilant approach to costs so it will achieve and
sustain EBITDA margins at about 45%, despite inflationary
pressures."
S&P said, "The upgrade to 'BB-' reflects the ongoing operational
and financial performance recovery and our view that MEIF 5 will be
able to deliver debt to EBITDA comfortably below 8.0x in 2023-2025.
This compares with debt to EBITDA of 8.39x in 2022 and 11.2x in
2021. In addition, the positive outlook reflects a one-in-three
likelihood that we may raise the rating to 'BB' in the next 12
months if we see further improvement in the company's credit
metrics.
"Deleveraging as per our base case hinges on a prudent shareholder
financial policy and calibration of distributions to accommodate
expansion. We expect shareholder distributions via shareholder loan
interest and principal repayment will remain flexible and dependent
on business conditions. This is because we understand that MEIF 5's
shareholders remain committed to maintaining prudent leverage, and
certain restrictions in the financial documentation prevent
distributions unless reported leverage is below 7.5x. We expect
that MEIF 5, before distributing dividends, would invest EUR40
million-EUR50 million per year in bilateral acquisition deals and
public concession tenders over 2023-2025, which it would finance
with operating cash flows.
"We expect the expansion strategy over the coming years will
further support revenue and EBITDA growth and will offset upcoming
contract maturities. The car park sector in the Iberian Peninsula
is still fragmented and, in our view, competition remains strong.
However, in principle, the capital investments that have already
taken place and the ones that will take place will offset the
contract maturities and will in fact generate EBITDA growth. We
understand the renewal of expiring contracts would only be pursued
if commercially favorable terms are agreed upon.
"The positive outlook reflects at least a one-in-three likelihood
that we may raise our ratings to 'BB' if further improvement in the
credit metrics materializes over our forecast horizon, with debt to
EBITDA below 7.0x, together with FFO to debt sustainably and
comfortably above 10%. Supporting these leverage levels are volume
and tariff increases, good cost controls, and prudent shareholder
distributions to accommodate the company's growth strategy, in line
with our base-case scenario."
S&P could revise its outlook on MEIF 5 to stable if it expects debt
to EBITDA in the 7.0x-8.0x range together with FFO to debt between
8% and 10% over our forecast horizon. In S&P's view this could
occur if:
-- Volumes decline or costs increase more than we anticipate due
to inflationary pressures, which are not mitigated by tariff
increases;
-- MEIF 5 fails to achieve EBITDA growth from the acquisitions
included in our base case;
-- Shareholder distributions lead to a slower leverage reduction,
not balancing growth;
-- Any transformational debt-funded acquisition takes place and is
not sufficiently compensated by EBITDA growth or mitigated by
shareholder support; or
-- The liquidity position deteriorates beyond our expectations.
S&P would also consider a downgrade if debt to EBITDA increases
above 8.0x, together with FFO to debt below 8% over our forecast
horizon.
ESG credit indicators: To E-2, S-2, G-2; From E-2, S-3, G-2
S&P said, "With car park occupancy recovery underway, we now see
social factors as a neutral consideration for our credit analysis,
compared with moderately negative previously. We understand that
like-for-like revenues in 2022 were 102% of 2019, indicating that
after accounting for the indexation of tariffs, volumes were just
slightly below 2019. This year, we believe further volume recovery
will support stronger earnings.'
Regarding environmental factors, there is a risk of potential
restrictions of certain cars to park in city centers, but on-street
parking with demand risk represents a very low share of the
company's EBITDA. Furthermore, no impact to date has been noticed
in off-street carparks located in the cities that are already
operating in low-emission zones. Also, MEIF 5 is committed to
electric mobility, with total charging points in its parking
facilities of 379 as of year-ended December 2022 versus 125 in
2019.
Environmental, social, and governance (ESG) credit factors for this
change in credit rating/outlook and/or CreditWatch status:
-- Health and safety
MIRAVET SARL 2020-1: S&P Affirms 'B-' Rating on Class E Notes
-------------------------------------------------------------
S&P Global Ratings raised to 'AA (sf)' from 'A+ (sf)' and to 'A-
(sf)' from 'BBB+ (sf)' its credit ratings on Miravet S.a r.l.,
Compartment 2020-1's class B-Dfrd and C-Dfrd notes, respectively.
At the same time, S&P affirmed its 'AAA (sf)', 'BB+ (sf)', and 'B-
(sf)' ratings on the class A, D-Dfrd, and E-Dfrd notes,
respectively.
The rating actions reflect its full analysis of the most recent
information that we have received and the transaction's current
structural features.
Almost 80% of the portfolio has been restructured at least once
since origination. S&P said, "Out of this share, 9.2% is considered
reperforming under our definition, as they have been 90 or more
days past due or restructured in the past five years, and are
current as of the cut-off date used in our analysis. In addition
and in line with our criteria, these loans only get seasoning
benefit from the restructuring date in our analysis."
S&P said, "The overall effect of applying our global RMBS criteria
is a decrease in our expected losses due to the decrease of our
weighted-average foreclosure frequency (WAFF) and stable
weighted-average loss severity (WALS) assumptions. Our WAFF
assumptions have decreased due to lower effective loan-to-value
(LTV) ratios and decreased share of reperforming loans, partially
offset by a slight increase in long-term arrears. In addition, our
WALS assumptions have remained stable. Overall credit enhancement
continues to increase."
Table 1
Credit analysis results
RATING WAFF (%) WALS (%) CREDIT COVERAGE (%)
AAA 46.97 21.25 9.98
AA 39.00 17.42 6.79
A 34.61 11.65 4.03
BBB 31.03 8.97 2.78
BB 27.06 7.29 1.97
B 24.20 5.91 1.43
WAFF--Weighted-average foreclosure frequency.
WALS--Weighted-average loss severity.
As of April 2023, Miravet 2020-1's class A, B-Dfrd, C-Dfrd, D-Dfrd,
and E-Dfrd notes' credit enhancement has slightly increased to
44.9%, 29.2%, 22.7%, 20.5%, and 18.2%, respectively, from 37.1%,
24.3%, 19.1%, 17.2%, and 15.4% as of January 2021. The reserve fund
is also at target and already at its floor, which is 3% of the
class A notes' initial balance.
Loan-level arrears above 90 days increased to 11.58%, compared with
10.42% as of previous review. However, total arrears have remained
stable as of the latest cutoff date at 15.2% as of April 2023,
compared with 15.8% as of January 2021.
S&P said, "Given the increased fixed fees observed in the latest
investor reports and their volatility, we have also increased our
fixed fees assumption in our cash flow analysis.
"Our operational, sovereign risk, counterparty, and legal risk
analyses remain unchanged since closing. Therefore, the ratings
assigned are not capped by any of these criteria.
"Following our review, we affirmed our 'AAA (sf)' rating on the
class A notes. We also raised to 'AA (sf)' from 'A+ (sf)' and to
'A- (sf)' from 'BBB+ (sf)' our ratings on the class B-Dfrd and
C-Dfrd notes, respectively. We also affirmed our 'BB+ (sf)' rating
on the class D-Dfrd notes.
"The class C-Dfrd, C-Dfrd, and D-Dfrd notes can withstand our cash
flow stresses at higher ratings than those assigned. However, our
revised ratings consider the uncertain macroeconomic environment,
the reperforming nature of the assets, the increased fixed fees
observed, and sensitivity to higher defaults.
"We have also affirmed at 'B- (sf)' our rating on the class E-Dfrd
notes. Considering the negative excess spread in the transaction,
the class E-Dfrd notes do not pass our 'B' cash-flow rating level
stresses in our low prepayment scenarios. However, as the available
credit enhancement is 18.2% for this class of notes (which compares
favorably to our expected loss of 1.43%), the reserve fund is fully
funded, and arrears levels remain relatively stable, we believe
that the payment of ultimate interest and principal on the class
E-Dfrd notes is not dependent upon favorable business, financial,
and economic conditions.
=====================
S W I T Z E R L A N D
=====================
HERENS HOLDCO: EUR1.05B Bank Debt Trades at 17% Discount
--------------------------------------------------------
Participations in a syndicated loan under which Herens Holdco Sarl
is a borrower were trading in the secondary market around 83.4
cents-on-the-dollar during the week ended Friday, June 30, 2023,
according to Bloomberg's Evaluated Pricing service data.
The EUR1.05 billion facility is a Term loan that is scheduled to
mature on July 3, 2028. The amount is fully drawn and
outstanding.
Herens Holdco, a firm duly incorporated in accordance with the laws
of Switzerland. Herens HoldCo is a special purpose vehicle
indirectly and jointly controlled by Bain Capital and Cinven
Capital.
===========
T U R K E Y
===========
DENIZBANK AS: Fitch Affirms 'B-/B' LongTerm IDRs, Outlook Neg.
--------------------------------------------------------------
Fitch Ratings has affirmed Denizbank A.S.'s (Denizbank) Long-Term
(LT) Foreign-Currency (FC) and Local Currency (LC) Issuer Default
Ratings (IDRs) at 'B-' and 'B', respectively. The Outlooks are
Negative. Fitch has also affirmed the Viability Rating (VR) at
'b-'.
KEY RATING DRIVERS
Intervention Risk Caps IDR: Denizbank's LTFC IDR is underpinned by
both its VR and its Shareholder Support Rating (SSR). The LTFC IDR
is capped at 'B-', one notch below Turkiye's, despite a high
support propensity of Emirates NBD Bank PJSC (ENBD, A+/Stable), due
to state intervention risk. The LTLC IDR is one notch above its
LTFC IDR as intervention risk is lower in LC. The Negative Outlooks
on the bank's LT IDRs mirror those on the sovereign, while that on
the LTFC IDR also reflects operating-environment risks. The 'B'
Short-Term (ST) IDRs are the only option mapping to LT IDRs in the
'B' category.
Concentration in Turkish Market: The VR reflects the concentration
of Denizbank's operations in the challenging Turkish market,
moderate asset quality and core capitalisation. It also reflects
the bank's adequate profitability, despite its modest franchise,
and reasonable FC liquidity.
Shareholder Support Capped: The SSR reflects Denizbank's strategic
importance as a material subsidiary of ENBD, role within the wider
group and reputational risks but government intervention risk caps
the SSR at one notch below the sovereign rating. The cap reflects
Fitch's view that the likelihood of government intervention that
would impede Denizbank's ability to service its FC obligations is
higher than that of a sovereign default.
Mid-Sized Turkish Bank: Denizbank has a moderate franchise
(end-1Q23: 4% of sector assets), which underpins it record of
adequate profitability, despite only limited competitive advantages
and pricing power.
Concentration Risk: The bank has been deleveraging high-risk
exposures to reduce concentration risk, while focusing on
shorter-term LC loan growth. FC lending remains above sector
average, despite having declined, partly reflecting FC lending by
its Austrian subsidiary.
Asset-Quality Risks: The bank's impaired loans/gross loans ratio
fell to 3.9% at end-1Q23 (end-2022: 4.7%), reflecting high nominal
loan growth and collections and limited impaired loan inflows,
albeit the ratio is higher than peers'. The bank has high, but
falling, exposure - mainly in FC - to the energy, tourism and
construction sectors (end-2022: combined 22% of loans), which make
up most of its Stage 2 loans (end-1Q23: 12.3% of loans; 23% of
average reserves). Asset-quality risks remain given Denizbank's
exposure to economic, market and loan seasoning risks and high FC
lending (42% of total lending) amid lira weakness.
Boosted Profitability: The bank's operating profit rose to 7.3% of
risk-weighted assets (RWAs) in 1Q23 (2022: 5.6%) as loan growth,
higher net fees and trading income offset a tightening in the net
interest margin due to slower CPI-linked securities gains and
higher funding costs amid heightened competition for LC deposits.
We expect profitability to weaken given regulatory macroprudential
measures and higher funding costs, while it remains sensitive to
asset-quality risks and economic developments.
Adequate Core Capitalisation: Denizbank's common equity Tier 1
(CET1) ratio fell to 11.3% at end-1Q23 (10.8% net of forbearance)
from 13% at end-2022 mainly due to a tightening of forbearance in
RWAs calculation. Capitalisation is supported by high
pre-impairment operating profit (1Q23: equal to 10% of average
loans, annualised), full reserves coverage of non-performing loans
(NPLs), free provisions and ordinary support from ENBD but remains
sensitive to the economic outlook, lira depreciation and
asset-quality risks.
FC Liquidity Risk: Denizbank is mainly funded by deposits
(end-1Q23: loans/deposits ratio of 86%), while FC wholesale funding
comprised 17% of total funding. At end-1Q23, available FC liquidity
mainly comprised FC placements in foreign banks, foreign-exchange
(FX) swaps with the Central Bank of the Republic of Turkiye, and
unencumbered FC government securities. Such liquidity covered FC
wholesale debt over the following 12 months, plus a moderate share
of FC deposits.
However, FC liquidity could come under pressure from sector-wide
deposit instability or prolonged market closure.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A downgrade of Denizbank's LTFC IDR would follow a downgrade of
both its SSR and the VR. A downgrade of the bank's LTLC IDR would
follow a downgrade of the SSR.
- A downgrade of Turkiye's sovereign rating or an increase in our
view of government intervention risk could lead to a downgrade of
Denizbank's SSR. Denizbank's SSR is also sensitive to Fitch's view
of ENBD's ability and propensity to provide support, in case of
need.
- The VR is sensitive to a sovereign downgrade. It could also be
downgraded due to further marked deterioration in the operating
environment, a material erosion in the bank's FC liquidity buffer -
for example, due to a prolonged funding-market closure or deposit
instability - or in its capital buffer, if not offset by
shareholder support.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Rating upgrades are unlikely in the near term given the Negative
Outlook on Turkiye's rating and Fitch's view of government
intervention risk in the banking sector.
- An upgrade of the VR is unlikely given heightened
operating-environment risks.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
Denizbank's senior debt ratings reflect their risk of default is
the same as that of the bank and average recovery prospects in a
default.
The bank's 'AA(tur)' National Rating is driven by shareholder
support and in line with foreign-owned peers'.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
Denizbank's senior unsecured debt ratings are primarily sensitive
to changes in its IDR.
The National Rating is sensitive to changes in Denizbank's LTLC IDR
and its creditworthiness relative to other Turkish issuers'.
VR ADJUSTMENTS
The operating environment score of 'b-' for Turkish banks is lower
than the category implied score of 'bb', due to the following
adjustment reasons: sovereign rating (negative) and macroeconomic
stability (negative). The latter adjustment reflects heightened
market volatility, high dollarisation and a high risk of FX
movements in Turkiye.
The business profile score of 'b' is below the implied 'bb'
category implied score, due to the following adjustment reason:
business model (negative). This reflects Denizbank's business model
concentration on the high-risk Turkish market.
ENTITY / DEBT RATING RECOVERY PRIOR
------------- ------ -------- -----
Denizbank A.S. LT IDR B- Affirmed B-
ST IDR B Affirmed B
LC LT IDR B Affirmed B
LC ST IDR B Affirmed B
Natl LT AA(tur) Affirmed AA(tur)
Viability b- Affirmed b-
Shareholder
Support b- Affirmed b-
senior unsecured LT B- Affirmed RR4 B-
senior unsecured ST B Affirmed B
ING BANK: Fitch Affirms B-/B LongTerm IDRs, Outlook Negative
------------------------------------------------------------
Fitch Ratings has affirmed ING Bank A.S.'s (INGBT) Long-Term (LT)
Foreign-Currency (FC) and Local Currency (LC) Issuer Default
Ratings (IDRs) at 'B-' and 'B', respectively. The Outlooks are
Negative. Fitch has also affirmed the Viability Rating (VR) at
'b'.
KEY RATING DRIVERS
Intervention Risk Caps IDR: INGBT's LTFC IDR is underpinned by both
its VR and Shareholder Support Rating (SSR). INGBT's LTFC IDR is
capped at 'B-', one notch below Turkiye's, due to government
intervention risk. INGBT's 'B' LTLC IDR reflects a lower risk of
intervention in LC. The Negative Outlook on the LT IDRs mirrors
that on the sovereign. The bank's 'B' Short-Term (ST) IDRs are the
only option mapping to the LT IDRs in the 'B' category.
VR Above LTFC IDR: INGBT's VR of 'b' is one notch above its LTFC
IDR and the 'b-' operating environment (OE) score for Turkish banks
despite its limited franchise, small market shares and exposure to
Turkish operating-environment risks. The VR reflects its solid FC
liquidity and capital buffers, fairly limited refinancing risks and
broadly stable performance record.
Shareholder Support: The SSR reflects INGBT's strategic importance
to its 100% parent, ING Bank N.V. (ING; AA-/Stable), its role
within the wider group, and its small size relative to ING's
ability to provide support. However, government intervention risk
caps the SSR at one notch below the sovereign rating, reflecting
Fitch's view that the likelihood of government intervention that
would impede INGBT's ability to service its FC obligations is
higher than that of a sovereign default.
Operating-Environment Risks: The concentration of INGBT's
operations in the challenging Turkish market exposes it to
heightened risks to economic and financial stability amid policy
uncertainty, high inflation and external vulnerabilities, with
further uncertainty stemming from the impact of the earthquakes in
February 2023. Multiple macroprudential regulations imposed on
banks to promote the government's policy agenda further add to the
challenges of operating in Turkiye.
FC Liquidity and Refinancing Risks: INGBT's FC wholesale funding
(end-1Q23: 19% of non-equity funding) creates refinancing risks
given its exposure to investor sentiment in volatile market
conditions. However, it includes fairly high group funding, and
risks are partly mitigated by adequate FC liquidity and potential
liquidity support from its parent.
FC liquidity was sufficient to fully cover INGBT's maturing FC debt
due within 12 months and 26% of FC deposits at end-1Q23, though a
high share comprises foreign-exchange (FX) swaps with the Central
Bank of Republic Turkiye, access to which could become uncertain at
times of market stress. INGBT's still high deposit dollarisation
(39% of deposits at end-1Q23; end-2022: 45%) creates FC liquidity
risks in case of sector-wide deposit instability.
Solid Capitalisation: INGBT's common equity Tier 1 (CET1) ratio of
16% at end-1Q23 (excluding forbearance: 15.3%) remained above the
sector (14.2%) and peer averages, while its leverage ratio is also
lower (equity/assets: 11.7%; sector: 10.1%).
Capitalisation is supported by pre-impairment operating profit
(2022: 6% of average gross loans, 1Q23: 0.9%) and full reserves
coverage of impaired loans (133%) but remains sensitive to the
macroeconomic outlook, lira depreciation (via the inflation of FC
risk-weighted assets (RWAs)) and asset -quality risks.
Asset-Quality Risks: INGBT's impaired (Stage 3) loans ratio
continued to improve to 1.8% at end-1Q23 (end-2022: 2%), broadly in
line with the sector's, reflecting collections and nominal loan
growth (1Q23: 5%).
Asset-quality risks remain notwithstanding the bank's generally
fairly cautious risk-management approach and below-sector-average
loan growth. This is due to its exposure to macroeconomic and
market volatility, fairly high Stage 2 loans (end-1Q23: 12% of
loans, average reserves coverage of 3.6%) and high FC lending
(end-1Q23: 40% of loans) targeting primarily borrowers generating
FC earnings, or those with robust financial positions and hedges in
place, although not all borrowers are likely to be fully hedged
against lira depreciation.
Pressure on Profitability: INGBT's operating profit fell to 0.7% of
RWAs in 1Q23 (2022: 4.8%), largely reflecting net interest margin
(NIM) contraction from the impact of macroprudential measures but
also a lack of CPI-linked securities that significantly boosted
profitability at many banks in the sector.
Fitch expects profitability to weaken in 2023 due to muted loan
growth amid weaker economic growth, pressure on NIMs (at least up
to 1H23), inflationary pressure on costs and the impact of
macroprudential measures, while it remains sensitive to
asset-quality risks and macroeconomic and regulatory developments.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
A downgrade of the bank's IDRs would follow a downgrade of both its
VR and the SSR.
The VR is primarily sensitive to a sovereign downgrade. Fitch would
also downgrade the bank's VR by one notch to the level of its LTFC
IDR on a material erosion in its capital and FC liquidity buffers.
A downgrade of Turkiye's sovereign rating or an increase in our
view of government intervention risk would lead to a downgrade of
the SSR. The SSR is also sensitive to Fitch's view of the
shareholder's ability and propensity to provide support.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Rating upgrades are unlikely given heightened operating-environment
risks and market volatility, the Negative Outlook on Turkiye's
sovereign rating, and our view of government intervention risk.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
INGBT's National Rating is underpinned by both its VR and SSR and
is in line with foreign-owned peers.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
The National Rating is sensitive to changes in INGBT's LTLC IDR and
its creditworthiness relative to other Turkish issuers'.
VR ADJUSTMENTS
The operating environment score of 'b-' for Turkish banks is lower
than the category implied score of 'bb', due to the following
adjustment reasons: sovereign rating (negative) and macroeconomic
stability (negative). The latter adjustment reflects heightened
market volatility, high dollarisation and a high risk of
foreign-exchange movements in Turkiye.
Rating Action
Entity Rating Prior
------ ------ -----
ING Bank A.S. LT IDR B- Affirmed B-
ST IDR B Affirmed B
LC LT IDR B Affirmed B
LC ST IDR B Affirmed B
Natl LT AA(tur) Affirmed AA(tur)
Viability b Affirmed b
Shareholder Support b- Affirmed b-
QNB FINANSBANK: Fitch Affirms 'B-/B' LongTerm IDRs
--------------------------------------------------
Fitch Ratings has affirmed QNB Finansbank A.S.'s (QNBF) Long-Term
Foreign-Currency (LTFC) Issuer Default Rating (IDR) at 'B-' and
Long-Term Local-Currency (LTLC) IDR at 'B'. The Outlooks on the
IDRs are Negative. Fitch has also affirmed the bank's Viability
Rating (VR) at 'b-'.
KEY RATING DRIVERS
Intervention Risk Caps IDR: QNBF's LTFC IDR is underpinned by its
Shareholder Support Rating (SSR) and VR. The LTFC IDR is capped at
'B-', one notch below Turkiye's, despite a high support propensity
of Qatar National Bank (Q.P.S.C.) (QNB; A/Positive), due to
government intervention risk. The LTLC IDR is one notch above its
LTFC IDR, reflecting lower intervention risk in LC. The Negative
Outlooks mirror those on the sovereign, while that on the LTFC IDR
also reflects operating environment pressures. The bank's 'B'
Short-Term (ST) IDRs are the only option mapping to LT IDRs in the
'B' category.
Operating Environment Constrains VR: The VR considers QNBF's
concentrated operations in the challenging Turkish market, moderate
franchise and track record of adequate profitability and
asset-quality, but also its weak core capitalisation and only
adequate FC liquidity. QNBF's VR is below the 'b' implied VR,
reflecting the operating environment constraint.
Shareholder Support Capped: QNBF's SSR considers potential support
from QNB, reflecting its role as a key subsidiary within the group,
potential reputational risks for its parent and legal commitments,
but government intervention risk caps the SSR at one notch below
the sovereign rating. The cap reflects Fitch's view that the
likelihood of government intervention that would impede QNBF's
ability to service its FC obligations is higher than that of a
sovereign default.
Moderate Franchise: QNBF has a reasonable business profile as a
mid-sized Turkish bank but its market shares are limited (4% of
sector assets at end-1Q23, unconsolidated basis), resulting in
limited competitive advantages. The bank services corporate and
commercial customers, small and medium-sized companies (SMEs) and
retail customers.
Weak Core Capitalisation: Core capitalisation (end-1Q23: common
equity Tier 1 ratio of 8.4%, 31bp uplift from regulatory
forbearance; 8% regulatory minimum) is weak for its risk profile,
exposure to macro risks, growth appetite and sensitivity to lira
depreciation. The total capital ratio (a moderate 12.8%, including
forbearance; 12% regulatory minimum) is supported by FC
subordinated debt from QNB, which provides a partial hedge against
lira depreciation, but has weakened following the tightening of
forbearance (effective at end-1Q23).
Non-performing loans (NPLs) are fully covered by total reserves,
free provisions were equal to 111bp of RWAs at end-1Q23, and
pre-impairment operating profit (1Q23: 10% of average loans;
annualised) provides a solid buffer to absorb unexpected credit
losses through the income statement. Our assessment of
capitalisation also considers ordinary support from QNB.
Deposit-Funded, Adequate FX Liquidity: QNBF is mainly
deposit-funded (end-1Q23: 76% of total funding). Wholesale funding
comprised 24% of total funding at end-1Q23 (21% net of parent
funding). FC liquidity, mainly made up of FX swaps with the Central
Bank of Turkiye (CBRT; access to which could become uncertain at
times of market stress), covered FC liabilities maturing within one
year and just 5% of FC deposits at end-1Q23. Including FC
unrestricted balances held at the CBRT, coverage of FC deposits
would be a higher 26%. Refinancing risks are somewhat mitigated by
potential liquidity support from QNB. Sector-wide deposit
instability could create risks to FC liquidity.
Asset Quality Risks: The NPL ratio improved to 2.3% at end-1Q23
(end-2022: 2.5%), reflecting nominal loan growth (1Q23: 10%) and
collections. Stage 2 loans are fairly high (9.3% of gross loans;
18% average reserves) and about 29% are restructured. Credit risks
are heightened by still high FC lending (29% of total lending,
albeit in line with the sector) as not all borrowers are fully
hedged against lira depreciation, and seasoning risks given
above-average growth in recent years. Total reserves coverage of
NPLs is solid (223%; sector: 238%).
Weakening Profitability, Margin Pressure: QNBF's operating
profit/risk-weighted assets ratio declined to 3.8% in 1Q23
(annualised; 2022: 5.5%) due to higher funding costs (amid
heightened competition for lira deposits) and pressure on loan
yields due to the macroprudential regulations, and lower CPI-linked
gains. Loan impairment charges consumed about 50% of pre-impairment
operating profit in 1Q23, reflecting the build-up of reserves,
including free provisions.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
A downgrade of QNBF's LTFC IDR would follow a downgrade of both the
VR and SSR. A downgrade of the bank's LTLC IDR would follow a
downgrade of the SSR.
A downgrade of Turkiye's sovereign rating or an increase in our
view of government intervention risk could lead to a downgrade of
QNBF's SSR. QNBF's SSR is also sensitive to Fitch's view of QNB's
ability and propensity to provide support, in case of need.
QNBF's VR could be downgraded due to further marked deterioration
in the operating environment, in case of a material erosion in the
bank's FC liquidity buffers, for example, due to a prolonged
funding market closure or deposit instability, or capital buffers,
if not offset by shareholder support. The VR is also potentially
sensitive to a sovereign downgrade.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Upgrades are unlikely in the near term, given heightened operating
environment risks and market volatility, the Negative Outlook on
Turkiye's rating and Fitch's view of government intervention risk
in the banking sector.
An upgrade of the VR is unlikely given heightened operating
environment risks, which exert further pressure on QNBF's thin
capital buffers and FX liquidity.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
QNBF's senior debt ratings are aligned with the bank's IDRs as the
likelihood of default on these obligations reflects that of the
bank. The Recovery Rating of these notes is 'RR4', reflecting
average recovery prospects in case of default.
The bank's 'AA(tur)' National Rating is driven by shareholder
support and is in line with foreign-owned peers.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
QNBF's senior unsecured debt ratings are sensitive to changes in
the bank's IDRs.
The National Rating is sensitive to changes in QNBF's LTLC IDR and
its creditworthiness relative to other Turkish issuers'.
VR ADJUSTMENTS
The operating environment score for Turkish banks is lower than the
category implied score of 'bb' due to the following adjustment
reasons: sovereign rating (negative) and macroeconomic stability
(negative). The latter adjustment reflects heightened market
volatility, high dollarisation and high risk of FX movements in
Turkiye.
The business profile score of 'b' is below the implied 'bb'
category implied score, due to the following adjustment reason:
business model (negative). This reflects the bank's business model
concentration in the high-risk Turkish market.
RATING ACTIONS
Entity Rating Prior
------ ------ -----
QNB Finansbank A.S. LT IDR B- Affirmed B-
ST IDR B Affirmed B
LC LT IDR B Affirmed B
LC ST IDR B Affirmed B
Natl LT AA(tur) Affirmed AA(tur)
Viability b- Affirmed b-
Shareholder
Support b- Affirmed b-
senior unsecured LT B- Affirmed RR4 B-
senior unsecured ST B Affirmed B
TURK EKONOMI: Fitch Affirms B-/B LongTerm IDRs, Outlook Negative
----------------------------------------------------------------
Fitch Ratings has affirmed Turk Ekonomi Bankasi A.S.'s (TEB)
Long-Term Foreign-Currency (LTFC) Issuer Default Rating (IDR) at
'B-' and Long-Term Local Currency (LTLC) IDR at 'B'. The Outlooks
on the IDRs are Negative. Fitch has affirmed the bank's Viability
Rating (VR) at 'b-'.
KEY RATING DRIVERS
Intervention Risk Caps IDR: TEB's LTFC IDR is underpinned by both
its VR and its Shareholder Support Rating (SSR). The LTFC IDR is
capped at 'B-', one notch below Turkiye's, despite a high
propensity of BNP Paribas S.A. (BNPP; A+/Stable) to provide
support, due to government intervention risk. The LTLC IDR is one
notch above its LTFC IDR as intervention risk is lower in LC. The
Negative Outlooks on the bank's IDRs mirror those on the sovereign
while that on LTFC IDR also reflects operating-environment
pressures. The bank's 'B' Short-Term (ST) IDRs are the only option
mapping to LT IDRs in the 'B' category.
Capital Constrains VR: The VR reflects the concentration of TEB's
operations in the challenging Turkish market and moderate asset
quality, but also adequate profitability through the cycle despite
its modest franchise (end-1Q23: 2% of banking sector assets) and
reasonable FC liquidity. TEB's VR of 'b-' is below the 'b' implied
VR due to adjustment for capital and leverage, reflecting only
adequate core capitalisation for TEB's risk profile.
Support: TEB's SSR reflects support from BNPP, reflecting TEB's
strategic importance to, integration and role within the wider BNPP
group and its small size relative to BNPP's ability to provide
support. However, government intervention risk caps the SSR at one
notch below the sovereign rating, reflecting Fitch's view that the
likelihood of government intervention that would impede TEB's
ability to service its FC obligations is higher than that of a
sovereign default.
TEB is 55%-owned, but fully controlled, by TEB Holding, in which
BNP Paribas Fortis SA / NV (BNPPF; A+/Stable) has a 50% stake. TEB
is fully consolidated by BNPPF, a core subsidiary of BNPP. BNPP
ultimately holds a 72.5% stake in TEB, including a 23.5% stake held
directly.
Only Adequate Capitalisation: TEB's common equity Tier 1 (CET1)
ratio declined to 11.2% at end-1Q23 (11% net of forbearance) from
12.4% at end-2022 due to a tightening of forbearance in
risk-weighted assets (RWAs) calculation. Capitalisation is
supported by high pre-impairment operating profit (1Q23: equal to
12% of average loans, annualised), full reserves coverage of
non-performing loans (NPLs), and ordinary support from BNPP but
remains sensitive to Turkiye's economic outlook, lira depreciation
and asset-quality risks.
Below Sector Growth: TEB has historically pursued a fairly
conservative growth strategy. The bank also has below sector
average FC lending (end-1Q23: 22%) although not all borrowers are
likely to be fully hedged against lira depreciation. SME exposure
(23% of performing loans; solo basis) increases asset -quality
risks given the segment's sensitivity to macro-economic
volatility.
Asset-Quality Risks: TEB's impaired loans ratio fell to 1.6% at
end-1Q23 (end-2022: 1.7%), outperforming the sector average and
supported by collections and write-offs, while total reserves
coverage increased. Asset-quality risks remain given its exposure
to economic and market volatility, loan seasoning, moderate Stage 2
loans (7% of loans, 21% of average reserves) and exposure to SME
and unsecured retail lending (about half of performing loans; solo
basis).
Boosted Profitability: TEB's annualised operating profit was 7.6%
of RWAs in 1Q23 (2022: 7.6%), as customer-driven trading income and
low impairment charges offset the impact of muted lending growth,
contracting net interest margin partly due to slower
inflation-driven gains, and the impact of macro-prudential
measures. Profitability remains sensitive to slower GDP growth,
asset-quality risks and economic and regulatory developments.
Significant FC Liquidity: Customer deposits comprised 83% of total
funding at end-1Q23; 45% were in FC and 19% were foreign-exchange
(FX)-protected lira deposits. Wholesale funding (79% in FC)
comprised 17% of total funding (9% net of parent funding).
Refinancing risks are manageable given the bank's reasonable FC
liquidity and potential liquidity support from BNPP. Nevertheless,
FC liquidity, mainly comprising FX swaps with the Central Bank of
Turkiye, could come under pressure from sector-wide FC deposit
instability or a prolonged loss of market access.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- A downgrade of the bank's IDRs would follow a downgrade of both
its VR and its SSR. A downgrade of the bank's LTLC IDR would follow
a downgrade of the SSR.
- A downgrade of Turkiye's sovereign rating or an increase in our
view of government intervention risk could lead to a downgrade of
TEB's SSR. TEB's SSR is also sensitive to Fitch's view of BNPP's
ability and propensity to provide support.
- TEB's VR could be downgraded on further marked deterioration in
the operating environment, a material erosion in the bank's FC
liquidity buffers, for example due to a prolonged funding market
closure or deposit instability, or in the capital buffers, if not
offset by shareholder support. The VR is also sensitive to a
sovereign downgrade.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- Rating upgrades are unlikely given heightened
operating-environment risks and market volatility, the Negative
Outlook on Turkey's sovereign rating, and our view of government
intervention risk.
- An upgrade of the VR is unlikely given heightened
operating-environment risks, which exert further pressure on TEB's
thin capital buffers and FX liquidity.
OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
TEB's senior unsecured debt ratings are rated in line with the
bank's FC IDRs, reflecting average recoveries for this type of
debt. The Recovery Rating of these notes is 'RR4', reflecting
average recovery prospects in a default
TEB's 'AA(tur)' National Rating is driven by shareholder support
and is in line with foreign-owned peers'.
OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
TEB's senior unsecured debt ratings are sensitive to changes in the
bank's IDRs.
The National Rating is sensitive to a change in TEB's LTLC IDR and
its creditworthiness relative to other Turkish issuers'.
VR ADJUSTMENTS
The operating environment score of 'b-' for Turkish banks is lower
than the category implied score of 'bb', due to the following
adjustment reasons: sovereign rating (negative) and macro-economic
stability (negative). The latter adjustment reflects heightened
market volatility, high dollarisation and a high risk of FX
movements in Turkey.
Entity Rating Prior
------ ------ -----
Turk Ekonomi Bankasi A.S.
LT IDR B- Affirmed B-
ST IDR B Affirmed B
LC LT IDR B Affirmed B
LC ST IDR B Affirmed B
Natl LT AA(tur) Affirmed AA(tur)
Viability b- Affirmed b-
Shareholder
Support b- Affirmed b-
senior unsecured LT B- Affirmed RR4 B-
senior unsecured ST B Affirmed B
===========================
U N I T E D K I N G D O M
===========================
AMPHORA FINANCE: GBP301M Bank Debt Trades at 50% Discount
---------------------------------------------------------
Participations in a syndicated loan under which Amphora Finance Ltd
is a borrower were trading in the secondary market around 49.6
cents-on-the-dollar during the week ended Friday, June 30, 2023,
according to Bloomberg's Evaluated Pricing service data.
The GBP301 million facility is a Term loan that is scheduled to
mature on June 1, 2025. The amount is fully drawn and
outstanding.
Amphora Finance Limited operates as a special purpose entity. The
Company was formed for the purpose of issuing debt securities to
repay existing credit facilities, refinance indebtedness, and for
acquisition purposes. The Company's country of domicile is the
United Kingdom.
BRANTS BRIDGE 2023-1: Fitch Gives BB+(EXP) Rating to Class E Debt
-----------------------------------------------------------------
Fitch Ratings has assigned Brants Bridge 2023-1 plc expected
ratings.
RATING ACTIONS
ENTITY/DEBT RATING
----------- ------
Brants Bridge 2023-1 plc
Class A LT AAA(EXP)sf Expected Rating
Class B LT AA+(EXP)sf Expected Rating
Class C LT A(EXP)sf Expected Rating
Class D LT BBB(EXP)sf Expected Rating
Class E LT BB+(EXP)sf Expected Rating
Class Z1 LT NR(EXP)sf Expected Rating
Class Z2 LT NR(EXP)sf Expected Rating
TRANSACTION SUMMARY
Brants Bridge 2023-1 is a securitization of owner-occupied (OO)
residential mortgage loans originated by Foundation Home Loans
(FHL), the lending arm of Paratus AMC, and secured against
properties in England, Scotland and Wales. This will be Paratus's
second transaction comprising solely OO mortgages and the first
rated by Fitch. Paratus has issued 11 buy-to-let transactions since
2017.
KEY RATING DRIVERS
Newly-originated Asset Pool: The mortgage pool comprises recently
originated OO loans, with over 94% originated in the year prior to
the pool cut-off date. The pool has a weighted average (WA)
original loan-to-value (LTV) of 70.7% and a WA current LTV of
69.8%, leading to a WA sustainable LTV of 87.2%. The pool also has
a Fitch calculated WA debt-to-income (DTI) of 39.3%. The WA LTVs
and DTI are in line with peer transactions rated by Fitch.
Prime Underwriting, Limited Performance: Paratus has a manual
approach to underwriting, focusing on borrowers that do not qualify
on the automated scorecard criteria of high street lenders. This
can include borrowers with complex or unusual incomes as well as
borrowers with some level of prior adverse credit. Paratus's target
market and its lending policies are in line with peers in the
specialist lending space.
Paratus began originating OO loans in 2017 with around GBP550
million originated and therefore has limited performance data for
this sub-sector. The OO mortgage book has low arrears and no
repossessions to date. However, Paratus is a well-established
buy-to-let lender with over GBP5 billion originated to date, with
book performance that is in line or better than specialist peers.
Fitch applied an originator adjustment of 1.1x in its rating
analysis.
Borrower Concentration: The pool has a loan count of 1,061, which
is low compared with other OO transactions rated by Fitch, leading
to a noticeable borrower concentration. The top 20 borrowers
account for 8.1% of the portfolio by current balance.
Self-employed FF Adjustment: The portfolio has a high concentration
of self-employed borrowers at 60.2% by current balance. Prime
lenders assessing affordability typically require a minimum of two
years of income information and apply a two-year average, or if
income is declining, the lower figure. FHL's lending criteria
allows for only one year's income to be provided (subject to
additional checks) while the underwriting procedures allow
underwriters' discretion when assessing the sustainability of
income; in line with specialist lenders.
Fitch therefore applied an increase of 30% to the foreclosure
frequency (FF) for self-employed borrowers with verified income
instead of the 20% increase typically applied under its UK RMBS
Rating Criteria for OO borrowers.
High-yielding Assets: The assets in the portfolio earn higher
interest rates than is typical for prime mortgage loans and can
generate substantial excess spread to cover losses. The WA yield at
closing will be 5.2%. On and after the step-up date, available
excess spread will be diverted to the principal waterfall and can
be used to amortize the rated notes
Unrated Seller: Paratus is not a rated entity and so may have
limited resources available to repurchase any mortgage receivables
if there is a breach of the representations and warranties given to
the issuer. Fitch therefore placed more emphasis on other factors:
no repurchases due to breaches of the loan warranties on past
Paratus securitizations, a clean agreed-upon-procedures report and
file review carried out by Fitch with no material issues
identified.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The transaction's performance may be affected by changes in market
conditions and economic environment. Weakening economic performance
is strongly correlated to increasing levels of delinquencies and
defaults that could reduce credit enhancement (CE) available to the
notes.
Additionally, unanticipated declines in recoveries could result in
lower net proceeds, which may make certain notes susceptible to
potential negative rating action depending on the extent of the
decline in recoveries. Fitch conducts sensitivity analyses by
stressing both a transaction's base-case FF and recovery rate (RR)
assumptions, and examining the rating implications for all classes
of issued notes.
Fitch tested an additional rating sensitivity scenario by applying
an increase in the FF of 15% and a decrease in the RR of 15%. This
would lead to downgrades of the notes by up to two notches.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Stable to improved asset performance driven by stable delinquencies
and defaults would lead to increasing CE levels and potential
upgrades. Fitch tested an additional rating sensitivity scenario by
applying a decrease in the FF of 15% and an increase in the RR of
15%. This would lead to an upgrade of the junior notes by up to
four notches.
BRUNCHO UK: Enters Administration, Closes Almost All Sites
----------------------------------------------------------
Laura McGuire at City A.M. reports that a City hotspot for morning
coffee, Le Pain Quotidien, has closed all but one of its sites
across London, in another fatal blow for the city's hospitality
sector.
The Belgian coffee chain, which operates from eight sites across
the capital, including a cafe on Fish Street Hill in Monument, has
closed all of its sites except one in St Pancras, City A.M.
relates.
According to City A.M., a note posted outside one of its sites
read: "The affairs business and property of the Bruncho UK Limited
(trading as Le Pain Quotidien) are being managed by the Joint
Administrators, Sarah Rayment and Philip Dakin of Kroll Advisory."
As the St Pancras site is owned by its sister company SPQ Holdings
Limited it will not be impacted, City A.M. notes.
"Pressures on parts of the hospitality and casual dining sector
have been well highlighted. Brunchco UK Limited which is
predominantly located in London has suffered from reduced revenues
as a result of decreased footfall in the Capital, high rents and
increased wage costs," Sarah Rayment," global co-head restructuring
at Kroll, told City A.M.
"As part of the next steps of the insolvency, we will be looking to
realise value from the company's leasehold interests and other
assets."
Le Pain Quotidien, French for the daily bread, has struggled in
recent years and filed for a Chapter 11 bankruptcy in its US
division in 2020 -- closing all 98 of its US stores, City A.M.
discloses.
CARILLION: Ex-Finance Chief Banned From Boardroom for 11 Years
--------------------------------------------------------------
Michael O'Dwyer and Gill Plimmer at The Financial Times report that
the former finance chief of Carillion has been barred from holding
company directorships for more than a decade, marking the first
boardroom ban on an executive of the collapsed construction
company.
Zafar Khan, who served as Carillion's finance director before its
implosion in early 2018, has been disqualified from working as a
director of a British company for 11 years by the government's
Insolvency Service, the FT relates. Mr. Khan had provided "false
and misleading financial information" in 2016 including reporting a
pre-tax profit of GBP146.7 million, said the government agency on
July 3, the FT discloses. Instead Carillion should have reported
an adjusted year-end loss of at least GBP61.7 million, the FT
notes.
The ban comes more than five years after the construction and
outsourcing company collapsed with just GBP29 million in cash and
GBP7 billion in liabilities in January 2018, leaving the UK
government to step in to ensure delivery of key services such as
school meals, hospital and prison cleaning, the FT states.
Proceedings against a number of other former Carillion directors,
including former chief executive Richard Howson, remain ongoing,
the FT discloses. A trial is due to start in October, the FT says.
Mr. Khan was also found to have caused the company to make market
announcements in March and May of 2017, which were misleading as to
the reality of Carillion's financial performance, said the
Insolvency Service, the FT relates. This was found to be a breach
of London listing rules and the EU market abuse regulation,
according to the FT.
He was also responsible for paying GBP54.4 million in dividends in
June 2017, which could not be justified because the company's
financial statement in 2016 did not represent a "true and fair
view" of the company's financial position, the agency added, the FT
notes.
Carillion's auditor KPMG is also under investigation by the FRC,
the FT discloses. This year, it settled a separate GBP1.3 billion
civil lawsuit brought against it by Carillion's liquidators for an
undisclosed sum, the FT relays.
DBS: Bought Out of Administration in Pre-Pack Deal
--------------------------------------------------
Business Sale reports that Yorkshire-based online fashion retailer
DBS -- which trades as SikSilk -- has been sold out of
administration to Axel 123 Ltd in a pre-pack sale.
According to Business Sale, the company had faced an array of
challenges over recent years, including reduced customer spending.
The company, which was founded in 2013, is based in Scarborough.
The firm sells clothing inspired by sports and streetwear to
customers throughout Europe via its own online store and through
third-party retailers such as Zalando.
In accounts for the year ending May 31 2021, the firm reported
turnover of GBP21.9 million, down from GBP40.8 million a year
earlier, while it fell from a GBP5.6 million pre-tax profit to a
loss of GBP1.8 million, Business Sale discloses.
As a result of its financial struggles, FRP Advisory's Anthony
Collier and Simon Farr were appointed as joint administrators for
DBS Clothing Ltd, DVS Europe Ltd and DBS Online Ltd on June 22,
2023, Business Sale relates. Upon their appointment, the joint
administrators immediately closed a sale of the businesses and
their assets to Axel 123 Ltd -- which includes figures from DBS'
previous leadership, Business Sale notes.
"The retail sector has faced significant challenges since the start
of the pandemic coupled with cost inflation and reduced customer
spending in light of the cost-of-living crisis. Like many
businesses, DBS was unable to navigate through these challenges.
This deal has helped save more than 50 jobs, and will allow the
brand to move forward," Business Sale quotes FRP partner and joint
administrator Anthony Collier as saying.
EG GROUP: Amended Sr. Secured Debt No Impact on Moody's 'B3' CFR
----------------------------------------------------------------
Moody's Investors Service has said that UK-based global independent
fuel forecourt retailer EG Group Limited's (EG, EG Group or the
company) B3 corporate family rating and its B3-PD probability of
default rating are unaffected by the company's amend-and-extend
(A&E) on its existing credit facilities maturing in August 2024 and
February 2025. Moody's has assigned B3 ratings to the amended
backed senior secured term loan facilities maturing in February
2028 and the amended backed senior secured revolving credit
facilities and letters of credit facilities maturing August 2027,
all issued by its subsidiaries EG Finco Limited, EG America LLC, EG
Dutch Finco B.V. and EG Group Australia Pty Ltd. The outlook is
stable.
RATINGS RATIONALE
The conclusion of EG's A&E allocation on June 29, 2023, is in line
with the rating agency's expectation that the company would begin
addressing its 2025 maturities in short succession of the
transaction announced on May 30, 2023 between ASDA (Bellis Finco
PLC, B2 stable) and EG. The $2.8 billion proceeds from the UK &
Ireland (UK&I) sale, together with the $1.4 billion net proceeds
from the recently completed sale and leaseback agreement and small
non-core asset sale in the US, will be used to repay first lien
debt. The remaining $3,443 million equivalent EUR, USD, GBP and AUD
term loan Bs maturing in February 2025, will be extended by three
years to February 2028. Moody's expects management to announce
plans on how it will address remaining maturities by quarter (Q) 3
2023. Following the company's planned partial repayment of its
senior secured notes, with the proceeds from the UK&I transaction
and the recent sale and lease back and small asset sale in the US,
it will have approximately $2 billion backed senior secured notes
split across February 2025 and October 2025.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONSIDERATIONS
EG's ESG Credit Impact Score of CIS-5 indicates that the rating is
lower than it would have been if ESG risk did not exist. EG's CIS-5
is driven by Moody's assessment of very high governance risk
exposures including an aggressive financial strategy, weak credit
metrics, and a majority private equity ownership. Governance risks
are somewhat mitigated by the positive progress made over the past
two years during which EG has appointed independent directors to
its board, improved internal controls and published its
consolidated accounts with an unqualified opinion by its new
auditors since 2020. EG's high environment risk exposure is largely
driven by the company's exposure to carbon transition risk through
the longer-term trend away from fuel consumption towards
alternative fuel, for which EG is building out its ultra-fast
electric vehicle charging infrastructure. EG's high exposure to
social risk relates to exposure to demographic and societal trends,
in line with Moody's sector heatmap for retailers and reflects EG's
exposure to structural shifts in consumer demand.
RATING OUTLOOK
The stable outlook reflects Moody's expectation that the company
will address its remaining 2025 debt maturities in a timely manner
following the sale of its UK&I operations. The outlook also
reflects the expectation that the transaction with ASDA will close
without major regulatory headwinds and will conclude in line with
the original plans.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Positive rating pressure could develop if the company is able to
address its debt maturities while at the same time reducing
leverage, as evidenced by Moody's adjusted gross debt to EBITDA,
sustained below 6.5x, with no meaningful gap between reported and
pro forma leverage, improving interest coverage, as measured by
adjusted EBIT / interest expense, sustainably above 1.5x, and
significant positive free cash flow generation. An upgrade would
also require the company to maintain at least adequate liquidity.
Negative rating pressure could develop if the company fails to
address its remaining debt maturities by Q3 2023 and sustainably
improve its debt metrics.
LIST OF AFFECTED RATINGS
Assignments:
Issuer: EG America LLC
BACKED Senior Secured Bank Credit Facility, Assigned B3
Issuer: EG Dutch Finco B.V.
BACKED Senior Secured Bank Credit Facility, Assigned B3
Issuer: EG Finco Limited
BACKED Senior Secured Bank Credit Facility, Assigned B3
Issuer: EG Group Australia Pty Ltd
BACKED Senior Secured Bank Credit Facility, Assigned B3
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Retail
published in November 2021.
COMPANY PROFILE
EG Group is a global retailer operating petrol stations,
convenience stores and foodservice outlets in the UK & Ireland,
Europe, the United States and Australia. The group was created
through the merger of Euro Garages and European Forecourt Retail
(EFR) Group in 2016. EG has evolved through a series of
acquisitions to become one of the leading independent motor-fuel
forecourt operators in Europe, the US and Australia. The company
announced in May 2023 it had agreed to sell its UK & Ireland
operations to ASDA. Proforma for this transaction the company
reported EBITDA was around $1.1 billion (excluding IFRS 16).
The group is headquartered in Blackburn, England and is owned
equally by funds managed by TDR Capital LLP and the two brothers
who founded Euro Garages, Mohsin and Zuber Issa.
HOLBROOK MORTGAGE 2023-1: S&P Assigns B-(sf) Rating on Cl. F Notes
------------------------------------------------------------------
S&P Global Ratings assigned ratings to Holbrook Mortgage
Transaction 2023-1 PLC's class A notes and class B-Dfrd to F-Dfrd
interest deferrable notes. This is a static RMBS transaction that
securitizes a portfolio of owner-occupied mortgage loans secured on
properties located in the U.K. The loans in the pool were
originated by The Mortgage Lender Ltd. (TML).
At closing, the issuer used the issuance proceeds to purchase the
full beneficial interest in the mortgage loans from the seller. The
issuer granted security over all of its assets in the security
trustee's favor.
S&P's ratings are based on the credit quality of the GBP677 million
pool at the cut-off date of June 7, 2023. Loans were originated
between 2021 and 2023.
The pool includes complex income borrowers and there is a high
exposure to self-employed borrowers (44.6% of the outstanding
balance) and first-time buyers (38.2%; based on the first
borrower's information). In addition, borrowers with prior county
court judgments (CCJs) account for 16.7% (based on the first
borrower's information) of the outstanding balance. Under TML's
underwriting policy, loans can be granted to borrowers with CCJs
older than three years, with some exceptions made for more recent
CCJs.
At closing, credit enhancement for the rated notes consisted of
subordination.
Proceeds from the class A to F-Dfrd notes were used to fund the
liquidity reserve at closing.
S&P said, "There are no rating constraints in the transaction under
our counterparty, operational risk, or structured finance sovereign
risk criteria. We consider the issuer to be bankruptcy remote in
accordance with our "Legal Criteria: Structured Finance: Asset
Isolation And Special-Purpose Entity Methodology"."
Ratings
CLASS RATING* CLASS SIZE (%)
A AAA (sf) 88.00
B-Dfrd AA (sf) 6.00
C-Dfrd A (sf) 2.50
D-Dfrd BBB (sf) 1.50
E-Dfrd BB (sf) 1.00
F-Dfrd B- (sf) 1.00
X1-Dfrd NR 0.01
X2-Dfrd NR 0.01
RC1 certs NR N/A
RC2 certs NR N/A
*S&P's ratings address timely receipt of interest and ultimate
repayment of principal on the class A notes, and the ultimate
payment of interest and principal on the other rated notes.
NR--Not rated.
N/A--Not applicable.
PATAGONIA BIDCO: Moody's Cuts CFR to 'B3', Outlook Stable
---------------------------------------------------------
Moody's Investors Service has downgraded the long-term corporate
family rating of Patagonia Bidco Limited (Huws Gray or the company)
to B3 from B2 and probability of default rating to B3-PD from
B2-PD. Concurrently, Moody's has downgraded to B3 from B2 the
instrument rating of the company's guaranteed senior secured bank
credit facilities, comprising term loan B (TLB) tranches totalling
equivalent GBP950 million and a GBP125 million revolving credit
facility (RCF), borrowed by Patagonia Bidco Limited. The outlook on
all ratings remains stable.
RATINGS RATIONALE
The downgrade reflects Moody's expectations that Huws Gray's key
ratios will remain weaker than expected for the B2 rating category.
This reflects a more challenging operating environment with a
slowdown of the UK Repair Maintenance and Improvement RMI and
homebuilding market with higher mortgage rates, lower consumer
disposable income and significant cost inflation. The company has
been implementing inflationary price increases and cost saving
efficiencies although these have not been sufficient to fully
offset declining volumes. As a result in Q1 2023 revenue and
company adjusted EBITDA declined by 9% and 40% respectively versus
the comparable quarter in 2022. While the company has managed to
protect its gross margin at around 29-30%, cost inflation,
including notably in respect of wages, property and energy pushed
the company's overheads higher, bringing its Q1 EBITDA margins to
6% compared with 9% in Q1 2022. Moody's also anticipates the Q2
EBITDA and EBITDA margins to remain weak.
After an expected further weakness in profits and margins in Q2,
Moody's base case assumes stabilisation from Q3 followed by gradual
recovery, helped by low single digits percentage growth in volumes
in 2024. The rating agency expects Huws Gray's Moody's adjusted
debt / EBITDA to increase to around 8x in 2023 compared with 6.4x
in 2022 before gradually improving to 7x in the following year. The
recovery will be supported by gradually improving market conditions
and demand as well as phasing of the planned synergies, which the
company estimates at around GBP20 million by the end of 2023 and
total of GBP30-35 million by the end of 2024– largely from staff
cost reduction and better procurement.
Moody's expect the company's EBITA interest cover to deteriorate to
around 1.1x in 2023 (from 1.4x in 2022) due to a combination of
lower earnings and higher interest on the floating rate portion of
the term loan. As earnings recover, so should interest cover,
increasing to around 1.3x in 2024.
Huws Gray's B3 CFR is also supported by (1) the solid scale and
nationwide coverage in the UK; (2) scope for both cost synergies
and a gradual improvement in revenues and margins within Fleming as
Huws Gray best practices are applied; and (3) adequate liquidity
buffer and potential for positive free cash flow generation.
Less positively, the CFR also factors in (1) the company's still
relatively small size compared with some other peers and high
geographical concentration, linked to the economic health of a
single country; (2) some execution risks on the integration of
Fleming and in the longer run with its strategy, which is based on
debt-funded M&A; and (3) a highly leveraged capital structure.
ESG CONSIDERATIONS
Moody's takes into account the impact of environmental, social and
governance (ESG) factors when assessing companies' credit quality.
Huws Gray benefits from the ongoing focus of politicians on energy
efficiency of buildings and sustainability which supports demand
for renovation and improvement of building stock.
Moody's governance assessment for Huws Gray factors in its control
by one major shareholder. Moody's nevertheless acknowledges the
sizeable minority stake still in the hands of Huws Gray founders
and management as a credit positive. The company has, however,
demonstrated a tolerance for high leverage and debt funded
acquisitions.
LIQUIDITY
Huws Gray's liquidity is adequate, supported by approximately GBP83
million of cash and the fully available GBP125 million RCF maturing
in 2028. Moody's expects Huws Gray to generate slightly positive
FCF in 2023 supported by working capital inflow in light of lower
volumes as well as lower capex spend and approximately GBP5-10
million negative FCF in 2024 as the stocks and demand will likely
start to gradually recover.
The RCF is subject to a consolidated senior secured debt springing
covenant when the RCF is drawn above 40%. Moody's expects that Huws
Gray will maintain a comfortable headroom under this covenant.
STRUCTURAL CONSIDERATIONS
The B3 rating of the TLB and RCF, both due in 2028, is in line with
the CFR, reflecting the fact that these facilities rank pari passu
among themselves. In line with current market practice the
facilities have only modest security, comprising primarily share
pledges and a floating charge over the assets of the borrower,
which is a holding company. Guarantees are provided by all material
subsidiaries with a guarantor coverage of at least 80% of the
group's EBITDA.
The PDR of B3-PD reflects Moody's assumption of a 50% family
recovery rate, consistent with a debt structure of bank debt with
loose financial covenants.
RATIONALE FOR THE STABLE OUTLOOK
The stable outlook reflects Moody's expectation that Huws Gray will
be able to recover its revenue with a low single digit organic
revenue and improve EBITDA margins from the lows of Q1 2023
resulting in Moody's adjusted leverage of around 7x over the next
12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Positive rating pressure will require a sustained improvement in
credit metrics, with (1) debt / EBITDA ratio falling sustainably
below 6x; (2) Moody's-adjusted operating margin in the mid single
digits in percentage terms on a sustained basis; and (3) meaningly
positive FCF on a sustained basis.
Conversely, negative rating pressure could arise if (1) the company
fails to achieve a sustained reduction in leverage; (2)
Moody's-adjusted operating margin does not improve from Q1 2023
level; (3) Moody's adjusted EBITA / interest drops below 1x for a
prolonged period; (4) FCF turned sustainably negative; or (5)
liquidity profile deteriorates.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Restaurants
published in August 2021.
CORPORATE PROFILE
Following the GBP520 million acquisition of the merchanting
businesses of Grafton plc ("Fleming"), which was completed at the
end of 2021, Huws Gray became one of the UK's leading independent
GBM. With 2022 revenues of around GBP1.6 billion and over 300
branches (60% owned freehold), the group has fairly wide national
coverage, providing a broad range of building materials to both
trade and retail customers. Blackstone acquired a 75% stake in Huws
Gray in June 2021 with its managers and founders holding the
remaining 25%.
QUAY STREET: Owed Nearly GBP1 Million at Time of Liquidation
------------------------------------------------------------
News OnTheWight digs into the voluntary liquidation of the company
operating The George Hotel, discovering thousands of pounds owed to
Isle of Wight businesses. The hotel is still running.
News OnTheWight has learnt that the company which has been
operating The George Hotel, Quay Street Ltd, has gone into
voluntary liquidation, leaving thousands of pounds owed to Isle of
Wight companies.
Contacting The George, they tell News OnTheWight that they remain
open and trading.
Quay Street Ltd -- trading as The George Hotel and Beach Club --
owned by Howard Spooner, appointed a liquidator in May 2023 with
nearly GBP1 million owing, News OnTheWight recounts.
A total of GBP665,276.40 of that is owing to HM Revenue & Customs
(for VAT and PAYE/NI), News OnTheWight notes.
More than GBP30,000 is owed to organisations on the Isle of Wight,
as well as GBP10,717.81 Isle of Wight council for unpaid rates,
according to News OnTheWight.
Following the appointment of a voluntary liquidator in May, the
hotel continued to operate, with their social media posts showing
it busier than ever -- helped no doubt by the TV appearances, News
OnTheWight discloses.
Phoning The George and finding it open and trading, it was natural
to wonder how it was still running when the company that had been
operating it had gone into liquidation.
News OnTheWight has discovered that the hotel in Yarmouth is now
being operated by a new company, Solent View Hotels Ltd.
ROMA LEATHER: Enters Administration Due to Falling Demand
---------------------------------------------------------
Business Sale reports that Roma Leather, a leather goods
manufacturer based in Naseby, Northampton, has fallen into
administration as a result of falling demand.
The company was founded in 1981 and had turnover of around GBP1.7
million in 2022.
The firm, which had a team of 33 staff, manufactured leather belts
and other small leather goods from its Northamptonshire factory.
It worked with Italian and other European leathers, claiming to
produce between 5,000 and 10,000 products every year.
According to Business Sale, the company was severely affected by
falling high street and online sales, resulting in customers
reducing or delaying demand for the firm's products. Management
explored options to secure Roma Leather's future, including
attempts to sell its business and assets as a going concern,
however a solvent solution could not be found, Business Sale
discloses.
Roma Leather posted two notices of intention to appoint
administrators in June, ultimately appointing RSM's Tom Straw and
Christopher Lewis as joint administrators, Business Sale recounts.
The business has ceased trading, with all employees made redundant
prior to the appointment of the joint administrators, Business Sale
relates.
In its accounts for 2022, Roma Leather had fixed assets valued at
GBP177,874 and current assets worth GBP567,514, Business Sale
notes. Its net assets were valued at GBP63,811, according to
Business Sale.
SMALL BUSINESS 2023-1: Fitch Assigns BB+ Rating on Class D Notes
----------------------------------------------------------------
Fitch Ratings has assigned Small Business Origination Loan Trust
2023-1 DAC (SBOLT 2023-1) notes final ratings.
ENTITY / DEBT RATING PRIOR
------------- ------ -----
Small Business Origination
Loan Trust 2023-1 DAC
Class A XS2629043428 LT AAsf New Rating AA(EXP)sf
Class B XS2629043931 LT Asf New Rating A(EXP)sf
Class C XS2629045043 LT BBB+sf New Rating BBB+(EXP)sf
Class D XS2629045555 LT BB+sf New Rating BB+(EXP)sf
Class E XS2629046017 LT NRsf New Rating NR(EXP)sf
Class R XS2629046876 LT NRsf New Rating NR(EXP)sf
Class Z XS2629046447 LT NRsf New Rating NR(EXP)sf
TRANSACTION SUMMARY
SBOLT 23-1 is a true-sale securitisation of a static pool of UK
unsecured SME loans, originated through the marketplace lending
(MPL) platform of Funding Circle Ltd (FC, servicer) and sold by
Glencar Investments 40 DAC (Glencar). This transaction is the first
issue from this platform to be rated by Fitch, and the seventh
overall.
KEY RATING DRIVERS
SME Borrower Default Probability: Fitch analysed the default risk
of the underlying SME portfolio based on FC static default vintage
data separately disclosed by their internal risk band. For the
securitised portfolio including 'A+' to 'D' risk bands Fitch
determined an average one-year probability of default (PD) at close
to 5%.
Unsecured SME Loans: The securitised loans are unsecured except for
personal guarantees granted by the owners or directors of the SME
borrowers. Fitch analysed the static recovery vintage data and
determined an average recovery rate at close to 35%, expected to be
uniformly distributed over a five- year period following borrower
default. Waterfall Eden Master Fund, Ltd may also purchase
defaulted loans at a price no less than 36.5% of their par amount.
Granular Portfolio: The collateral portfolio features low single
obligor concentration levels, with the top 10 obligors accounting
for 2% of the portfolio balance. Industry concentration, on the
other hand, is more in line with other SME portfolios', with the
largest three industries accounting for 44.4% of the portfolio
balance, of which property and construction is the largest (18.8%)
followed by retail (13.2%) and business services (12.3%).
Sensitivity to Pro-Rata Period: The transaction features pro-rata
amortisation of the notes at closing until the breach of a
sequential-pay trigger. The pro-rata amortisation is based on the
note balance net of the corresponding principal deficiency ledger
but also includes the subordinated notes. Pro-rata structures
generally leak proceeds to subordinated notes and therefore are
higher-risk to sequentially amortising structures.
Under pro-rata structures ratings are more sensitive to the
back-loaded default timing assumption as it determines the timing
of the continued leakage of principal to subordinated notes.
Consistent with the historical performance default data provided by
FC for its loan book and their previous securitisations, Fitch
applied some defaults also during the first year of the
transaction's life under its back-loaded default timing assumption.
This approach is also in line with the Fitch criteria for
portfolios of consumer loans with similar granularity and tenor.
Rating Cap May Constrain Ratings: Fitch decided to cap the highest
achievable rating of the notes at 'AA+sf' on account of limited
availability of historical performance data following changes in
FC's underwriting process as a result of the Covid-19-related
stress period. While the ratings being assigned are not constrained
by this cap at present, with the highest rating being one notch
below, it may constrain the rating once the pro-rata period expires
(barring future revisions of the cap itself) and as the transaction
deleverages.
Deviation from MIRs: The class A and D notes ratings are one notch
lower than their model-implied ratings (MIRs). The deviation
reflects limited cushion between our break-even default rate and
the hurdle default rate at the MIR, while also considering that
pro-rata amortisation of the notes makes them more sensitive to
asset performance assumptions than in comparable sequential-pay
structures.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
Weakening asset performance is strongly correlated to increasing
levels of delinquencies and defaults that could reduce credit
enhancement available to the notes. Additionally, unanticipated
declines in recoveries could also result in lower net proceeds,
which may make certain notes' ratings susceptible to negative
rating action, depending on the extent of the decline in those
recoveries.
An increase of the rating default rate (RDR) by 25% of the mean
default rate and a 25% decrease of the rating recovery rate (RRR)
at all rating levels would lead to downgrades of up to three
notches for the notes.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
After the end of the pro-rata amortisation period, upgrades may
occur on better-than-initially expected asset performance, leading
to higher credit enhancement and excess spread available to cover
losses in the remaining portfolio, albeit subject to the 'AA+sf'
rating cap.
A reduction of the RDR by 25% of the mean default rate and a 25%
increase of the RRR at all rating levels would lead to upgrades of
up to three notches for the notes.
TENNOR: London Judge Finds Lars Windhorst in Contempt of Court
--------------------------------------------------------------
Cynthia O'Murchu and Robert Smith at The Financial Times report
that a London high court judge has found German financier Lars
Windhorst in contempt of court for failing to appear at an
enforcement hearing for a case brought by an investment firm linked
to a Monaco billionaire.
Mr. Windhorst, who in recent years has been at the centre of a
high-profile investment scandal at France's H2O Asset Management,
appeared in court on June 30 in a hearing relating to a claim from
Bahamian investment firm Heritage Travel and Tourism.
The court heard that Mr. Windhorst had deliberately not attended a
previous December hearing in the case, and had instructed his staff
not to produce documents for Heritage, because he was "focusing on
settlement discussions and raising funds" to pay creditors.
Heritage, which is linked to Monaco cruise magnate Manfredi
Lefebvre d'Ovidio, in 2021 won a EUR172 million judgment against
Mr. Windhorst and several of his companies, for failing to honour a
complicated series of trades involving the shares of companies the
financier owns.
Mr Justice David Foxton found that Windhorst had known about the
December hearing and was aware that not attending would amount to a
breach, with the court hearing that the financier's legal advisers
had warned that failing to appear would be "dangerous".
At the time of the December hearing, Mr. Windhorst was in the
United Arab Emirates attending a "significant meeting" with an
undisclosed potential investor as part of an extensive travel
schedule to raise money, the court heard.
Justice Foxton said Mr. Windhorst's failure to attend did not stem
from disrespect of the court and that correspondence between the
opposing parties showed that he had been upfront about his
intention not to appear ahead of time.
Justice Foxton did not impose a sanction, pending a further hearing
this month. Mr. Windhorst earlier provided documents outlining
his assets which will be examined at the next hearing. Mr.
Windhorst can appeal against the June 30 ruling.
Mr. Windhorst has so far made payments of EUR50 million to Heritage
towards the 2021 judgment, the court heard.
A representative for Heritage told the FT in August last year that
it was then in "very positive discussions" with Mr. Windhorst about
settling the claim. However, relations between the two sides
deteriorated, resulting in Heritage filing a bankruptcy petition
against Mr. Windhorst's investment company Tennor in the
Netherlands later that year. The bankruptcy petition was withdrawn
after Mr. Windhorst paid EUR10 million to the claimants.
Mr. Windhorst's largest known creditor -- H2O Asset Management --
has not taken legal action against the financier, instead
negotiating a series of repayment plans over debts in excess of
EUR1 billion.
THAMES WATER: Crisis May Deter Overseas Investment Into UK
----------------------------------------------------------
Gill Plimmer, George Parker, Will Louch and Josephine Cumbo at The
Financial Times report that the crisis at Thames Water could deter
overseas investment into the UK, ministers and industry figures
have warned, as the utility seeks to raise at least GBP1 billion to
shore up its finances.
According to the FT, Conservative ministers maintain that concerns
about the financial resilience of water companies -- and
"intemperate" talk of possible temporary nationalisation -- could
create a "risk premium" for investing in UK infrastructure.
Criticism of Ofwat, the industry watchdog, has also been mounting
as Thames Water prepares for talks this week with investors and
regulators to secure the GBP1 billion equity injection, the FT
discloses.
One minister told the FT: "The people who have questions to answer
are Ofwat. There are serious questions about the regulation of the
sector.
"When politicians start to talk about nationalisation or a windfall
tax or a sudden jerk on the wheel of regulation, that pushes up the
risk premium for the UK."
Thames Water, England's largest privatised water utility, is
wrestling with GBP14 billion of debt and has yet to receive a full
commitment from investors that they will invest more equity to
stave off a cash crisis, the FT states.
The group insists there is no immediate cash crunch and had GBP4.4
billion liquidity at the end of March, the FT notes. But ministers
were forced last week to dust down plans to place failing water
companies into a "special administration regime", the FT recounts.
John Reynolds, chief executive of Castle Water, which provides
water and sewage services to business customers in London and the
south-east, warned that Thames Water’s troubles were likely to
deter overseas investors, the FT relates.
"The impact of a special administration would impact the
availability of financing and the cost of financing for all UK
infrastructure," the FT quotes Mr. Reynolds as saying.
Mr. Reynolds highlighted the billions of dollars in subsidies for
infrastructure investors provided by US president Joe Biden’s
Inflation Reduction Act. "Making a decision to invest in Thames is
getting harder anyway because returns on infra in the US are
significantly higher than in the UK," he added.
Thames had asked shareholders for GBP1.5 billion in June last year
but received just GBP500 million in March, the FT recounts. The
timing of the second GBP1 billion has still to be agreed but
sources close to the company said as much as GBP2.5 billion to GBP3
billion could be needed over the next few years to plug holes in
the balance sheet and improve sewage and leakage performance,
according to the FT.
Investors are understood to be divided over putting money into the
company in a tougher regulatory environment, the FT states.
TOGETHER ASSET 2023-1: Fitch Gives BB+(EXP) Rating to Class F Debt
------------------------------------------------------------------
Fitch Ratings has assigned Together Asset Backed Securitisation
2023-1ST1 PLC (TABS2023-1) expected ratings.
The assignment of final ratings is conditional on receipt of final
documents conforming to the information already reviewed.
RATING ACTIONS
ENTITY RATING
------ ------
Together Asset Backed
Securitisation
2023-1ST1 PLC
A LT AAA(EXP)sf Expected Rating
B LT AA-(EXP)sf Expected Rating
C LT A-(EXP)sf Expected Rating
D LT BBB-(EXP)sf Expected Rating
E LT BB(EXP)sf Expected Rating
F LT B-(EXP)sf Expected Rating
X LT BB+(EXP)sf Expected Rating
Z LT NR(EXP)sf Expected Rating
TRANSACTION SUMMARY
TABS2023-1 is a securitisation of buy-to-let (BTL) and
owner-occupied (OO) mortgages backed by properties in the UK,
originated by Together Personal Finance and Together Commercial
Finance, two fully-owned subsidiaries of Together Financial
Services Limited (Together; BB-/Stable/B). The transaction includes
recent originations up to January 2023.
KEY RATING DRIVERS
Specialised Lending: Together takes a manual approach to
underwriting, focusing on borrowers who do not necessarily qualify
on the automated scorecard models of high-street lenders. It
attracts a higher proportion of borrowers with complex income,
notably self-employed and borrowers with adverse credit histories
than is typical for prime UK lenders. It allows more underwriting
flexibility than at other specialist lenders by permitting
interest-only (IO) OO lending flexible exit strategies (such as
downsizing if plausible), and using BTL borrowers' personal income
for affordability calculation without minimum rental income
coverage.
The performance of Together's books had been volatile since 2004
before stabilising recently. It is worse than that of prime
lenders, but generally in line with specialist lenders'. Fitch has
applied an originator adjustment of 1.5x to its prime and 1.4x to
its BTL assumptions, resulting in foreclosure frequency (FF)
assumptions comparable with other specialist lenders'. The BTL
originator adjustment has been lowered from 1.5x compared with
Together's previous RMBS transaction.
Low LTV Driving Recoveries: The pool is 100% composed of first-lien
mortgage loans, 33.9% of which are FCA-regulated. It includes less
than 5% of OO right-to-buy loans, OO shared ownership loans and
consumer BTL (CBTL). The remaining portfolio comprises BTL loans
(66.1%). Seasoning is low as the majority of the loans were
originated in 2021 and 2023.
The weighted average (WA) original loan-to-value (OLTV) of the
portfolio is 68.3%, lower than that of comparable specialist
lenders, for which we usually see values in the 70%-75% range, but
higher than the predecessor deal (62.2%). This is the main driver
of Fitch's recovery rates, which are solidly higher than those of
peers.
High-Yield Assets: The assets in this portfolio earn higher
interest rates than is typical for prime mortgage loans and can
generate substantial excess spread to cover losses. The WA yield at
closing is 6.6%. Prior to the step-up date, excess spread is used
to pay down the class X notes. On and after the step-up date, the
available excess spread is diverted to the principal waterfall and
can be used to amortise the rated notes.
Fixed Interest-Rate Hedging Schedule: Fixed-rate loans make up
51.5% of the pool (reverting to a variable rate, on a WA of 9.6%),
hedged through an interest rate swap. The swap features a scheduled
notional balance that could lead to over-hedging in the structure
due to defaults or prepayments. Over-hedging results in additional
available revenue funds in rising interest-rate scenarios but
reduced available revenue funds in decreasing interest-rate
scenarios.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The transaction performance may be affected by adverse changes in
market conditions and the economic environment. Weakening economic
performance is strongly correlated to increasing levels of
delinquencies and defaults that could reduce credit enhancement
(CE) available to the notes.
Additionally, unanticipated declines in recoveries could result in
lower net proceeds, which may make certain note ratings susceptible
to negative rating action depending on the extent of the decline in
recoveries. Fitch found that a 15% WAFF increase and 15% WA
recovery rate decrease would result in downgrades of up to three
notches.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Stable to improved asset performance driven by stable delinquencies
and defaults would lead to increasing CE levels and, potentially,
upgrades. A decrease in the WAFF of 15% and an increase in the WARR
of 15% would result in upgrades of up to two notches.
*********
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 * * *