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       T R O U B L E D   C O M P A N Y   R E P O R T E R

                          E U R O P E

          Wednesday, October 4, 2023, Vol. 24, No. 199

                           Headlines



B E L G I U M

IDEAL STANDARD: S&P Raises ICR to 'CCC', Outlook Developing


F R A N C E

ACCOR SA: S&P Assigns 'BB' LT Rating on New Sub. Hybrid Notes
UNIFIN SAS: S&P Withdraws 'B' ICR Following Debt Repayment


G E R M A N Y

REVOCAR 2023-2: DBRS Assigns Prov. BB Rating on Class D Notes


I R E L A N D

BOSPHORUS CLO VII: Moody's Gives (P)B3 Rating to EUR12MM F-R Notes


I T A L Y

CEDACRI SPA: S&P Affirms 'B' ICR, Outlook Negative
CERVED GROUP: S&P Affirms 'B-' ICR, Outlook Stable
EMERALD ITALY 2019: DBRS Cuts Class D Notes Rating to CC
GUALA CLOSURES: S&P Affirms 'B+' ICR on EUR350MM Debt Issuance
NAPLES: Fitch Hikes LongTerm IDRs to 'BB+', Outlook Positive

PRO-GEST SPA: Moody's Cuts CFR to Caa2 & Alters Outlook to Negative


K A Z A K H S T A N

SAMRUK-KAZYNA CONSTRUCTION: Fitch Affirms 'BB' LongTerm IDRs


L U X E M B O U R G

COLOUROZ MIDCO: Moody's Withdraws 'Ca' CFR on Debt Restructuring


N O R W A Y

AXACTOR ASA: Moody's Affirms 'B1' CFR, Outlook Remains Positive
B2 IMPACT: Moody's Ups CFR to Ba2 & Senior Unsecured Notes to Ba3


S P A I N

SANTANDER CONSUMER 2023-1: DBRS Gives (P) B(high) Rating on E Notes


S W I T Z E R L A N D

LONZA GROUP: BlackRock DSF Marks $939,000 Loan at 16% Off


T U R K E Y

IZMIR METROPOLITAN: Fitch Alters Outlook on 'B' IDRs to Stable
KONYA METROPOLITAN: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
MANISA METROPOLITAN: Fitch Alters Outlook on 'B' IDRs to Stable
MERSIN METROPOLITAN: Fitch Alters Outlook on 'B' IDRs to Stable
MUGLA METROPOLITAN: Fitch Alters Outlook on 'B' IDRs to Stable

[*] Fitch Revises Outlooks on 10 Turkish NBFI's Outlook to Stable


U N I T E D   K I N G D O M

AINSCOW HOTEL: Bought Out of Administration
HOUNSLOW PROPERTY: Goes Into Administration
MICHAEL J LONSDALE: Goes Into Administration
MJL MIDLANDS: Enters Administration, Ceases Trading
REAL CONTRACTING: South West Unit Set to Go Into Administration

ROYALELIFE GROUP: Administrators Seek to Sell 29 Holiday Parks
VEDANTA RESOURCES: S&P Lowers ICR to 'CCC' on Bond Extensions

                           - - - - -


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B E L G I U M
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IDEAL STANDARD: S&P Raises ICR to 'CCC', Outlook Developing
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S&P Global Ratings raised its issuer credit and issue ratings on
Ideal Standard International S.A. to 'CCC' from 'D'.

S&P said, "The developing outlook reflects that we could raise the
rating by one or more notches upon sale completion if we believe
that being part of the Villeroy & Boch group will strengthen Ideal
Standard's creditworthiness. Conversely, we could lower the rating
if Ideal Standard defaults in the conventional manner if the sale
does not complete, and absent the rollover of local credit lines
and shareholder support over the next 12 months."

The 'CCC' rating reflects that, absent external financing or debt
rollover, Ideal Standard's liquidity sources may not be sufficient
to sustain its operations over the next 12 months. S&P said, "On
Sept. 19, 2023, Ideal Standard completed the notes exchange offer
announced in July, which we viewed as a distressed exchange and
tantamount to default. Our rating reflects our expectation that
liquidity could deteriorate further, and that the company will need
to rely on external financing to bridge operating cash shortfalls."
As of June 30, 2023, Ideal Standard reported about EUR60 million of
cash on balance sheet, which already includes the EUR25 million
shareholder loan, the fully drawn revolving credit facility (RCF),
and the proceeds from asset disposals. Still, the liquidity buffer
may not be sufficient to cover operating cash outflows and the
short-term maturities of about EUR84 million, largely comprised of
local overdraft credit lines in Bulgaria and Egypt.

S&P said, "We could raise the rating after the sale closes if we
believe that the combined group's creditworthiness is stronger than
Ideal Standard's on a stand-alone basis. On Sept. 18, 2023, German
ceramics manufacturer Villeroy & Boch (not rated) announced that it
has signed a binding agreement to buy the operating subsidiaries of
Ideal Standard from Anchorage and CVC Credit for an acquisition
price of about EUR600 million, based on the enterprise value.
Villeroy & Boch is a leading international ceramic manufacturer,
with two operating business divisions: bathroom and wellness, and
dining and lifestyle. As of end-December 2022, the company reported
revenues of EUR994.5 million and EBITDA of EUR137.9 million. If the
sale is completed, Ideal Standard's creditworthiness could improve,
depending on the capital structure following the merger, the
creditworthiness of the parent group, and the strategy implemented
by Villeroy & Boch.

"We anticipate that Ideal Standard will continue to post negative
free operating cash flow (FOCF) and high leverage in 2023. While
our base case is that the acquisition by Villeory & Boch completes
as planned, we still view Ideal Standard's current capital
structure as unsustainable, with expected S&P Global
Ratings-adjusted debt to EBITDA at about 10.5x-11.0x in 2023 and
2024, compared with 9.7x in 2022. Ideal Standard reported weak
operating performance during the first six months of 2023, with
sales declining by 8.6% and gross profit falling by 10.6%, compared
with the same period in 2022. Cash flow generated from operating
activities in the first half of 2023 continued to be negative, at
about EUR0.7 million, and we anticipate adjusted FOCF will be
negative EUR25 million-EUR35 million in 2023 and negative EUR10
million-EUR15 million in 2024.

"In our view, if the short-term lines are not rolled over and
shareholders do not provide further financial support, further debt
restructuring could materialize if the sale to Villeroy & Boch does
not proceed as expected. That said, we view positively that the
company has successfully rolled over the local overdrafts in the
past few years, reflecting its good relationship with local banks
in Bulgaria and Egypt. Moreover, in our opinion, Ideal Standard's
existing shareholders may have an incentive to provide cash support
should those lines not be extended to facilitate the completion of
the sale to Villeroy & Boch in a timely manner.

"The developing outlook reflects that we could raise the rating on
Ideal Standard by one or more notches upon close of the sale to
Villeroy & Boch, to factor in the creditworthiness of the parent
group, or that Ideal Standard could default in the conventional
manner over the next 12 months if this transaction does not
complete, which would lead us to lower the rating.

"We could downgrade Ideal Standard if either the sale to Villeroy &
Boch is not completed, the company is not able to roll over its
short-term debt maturing over the next 12 months, or if it does not
receive financial support from its shareholders to cover its
liquidity needs or provide covenant cure, leading to a further debt
restructuring.

"We could upgrade Ideal Standard--potentially by one or more
notches--if the sale is completed in a timely manner and we believe
that being part of the Villeroy & Boch group will improve its
creditworthiness. We note that post-takeover by Villeroy & Boch, a
substantial part of the Ideal Standard debt, namely the senior
secured notes due 2026, would be repaid."




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F R A N C E
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ACCOR SA: S&P Assigns 'BB' LT Rating on New Sub. Hybrid Notes
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S&P Global Ratings assigned its 'BB' long-term issue rating to the
proposed undated, non-call 5.5 years, optionally deferrable, and
deeply subordinated hybrid notes to be issued by Accor S.A.
(BBB-/Stable/A-3). The size of the hybrid issuance remains subject
to market conditions but is expected to be up to EUR500 million.

Accor plans to use the proceeds to refinance an equivalent amount
of the hybrids it issued in January 2019 whose first call period is
Jan. 31, 2024, to April 30, 2024. The company has said it might
also repurchase some of these instruments via a tender offer, and
we understand it does not intend to permanently increase its stock
of hybrids. After this replacement and liability-management
transaction, Accor expects its hybrid portfolio to be similar in
size to the current total of about EUR1 billion. S&P expects to
assess the new issuance as having intermediate equity content and
an equivalent amount of the outstanding hybrids as having minimal
equity content.

The proposed hybrid will be classified as having intermediate
equity content until the first reset date, which is expected to be
five years and three months after issuance. During this period, it
will meet S&P's criteria for subordination, permanence, and
optional deferability. The terms of the proposed hybrid are
generally in line with those for the subordinated notes issued in
October 2019.

S&P said, "We cap at 15% the proportion of capital comprising
hybrids classified as having equity content, under our criteria.
Consequently, when we calculate our adjusted credit ratios, we will
treat one-half of Accor's hybrid capacity (of up to 15% of its
adjusted capitalization) as equity rather than debt. Similarly, we
would treat 50% of the related payments on these securities as
equivalent to a common dividend."

The two-notch difference between S&P's 'BB' issue rating on the
securities and its 'BBB-' issuer credit rating (ICR) on Accor
reflects the following adjustments, whereby we deduct from the
ICR:

-- One notch for the proposed securities' subordination, because
our long-term ICR on Accor is investment-grade (higher than 'BB+');
and

-- An additional notch for payment flexibility due to the optional
deferability of interest.

S&P said, "The notching indicates our view that there is a
relatively low likelihood that Accor will defer interest payments.
Should our view change, we may significantly increase the number of
notches we deduct from the ICR to derive the issue rating. We may
lower the issue rating before we lower the ICR.

"Any hybrid debt from the January 2019 issuance that has not been
refinanced would be classified as having no equity content (that
is, 100% debt). We would no longer regard this tranche as permanent
capital, since the issuer has expressed its intention for an early
call option."

Key factors in S&P's assessment of the securities' permanence

Although the proposed securities have no maturity date, Accor can
redeem them following an initial noncall period of 5.25 years
(including a three-month par call) and on every interest payment
date thereafter. In addition, Accor can call the instrument at any
time, at a premium, through a "make-whole" redemption option. S&P
said, "Accor has stated that it has no intention of redeeming the
instrument before the first reset date, and we do not consider that
this type of make-whole clause creates an expectation that the
proposed securities will be redeemed before then. Accordingly, we
do not view it as a call feature in our hybrid analysis, even
though the documentation for the hybrid instrument refers to it as
a make-whole option clause."

S&P said, "More generally, we understand the group intends to
replace the proposed hybrid securities, although it is not obliged
to do so. In our view, this statement of intent, combined with the
group's record of replacing hybrid securities, mitigates the
likelihood that it will repurchase the securities without
replacement.

"Accor will pay a fixed coupon on the proposed securities. The
margin will increase by 25 basis points (bps) no earlier than 5.5
years from issuance, and by a further 275 bps after the second
step-up date, 25.5 years after the issue date. We view the
cumulative 300 bps increase as a significant step-up that provides
Accor with an incentive to redeem the instruments on the first
step-up date.

"After the first reset date, we will no longer recognize the
proposed securities as having intermediate equity content because
the remaining period until their economic maturity (second step-up
date) would, by then, be less than 20 years."

Key factors in S&P's assessment of the securities' subordination

The proposed securities will be deeply subordinated obligations of
Accor and will have the same seniority as the hybrids the company
issued in October 2019. As such, they will be subordinated to the
senior debt instruments and are only senior to common shares.

Key factors in S&P's assessment of the securities' deferability

S&P said, "In our view, Accor's option to defer payment of interest
on the proposed securities is discretionary. It may, therefore,
choose not to pay accrued interest on an interest payment date. The
notching to derive the rating on the proposed perpetual securities
reflects our view that there is a relatively low likelihood that
the issuer will defer interest. Should our view change, we may
increase the number of notches we deduct to derive our issue
rating."

However, according to the documentation, if an equity dividend or
interest on any equal-ranking or junior securities is paid, or if
there is a redemption or repurchase of the hybrid or any
equal-ranking or junior securities, Accor would have to settle any
deferred interest payment in cash.

S&P sees this as a negative factor. That said, this condition
remains acceptable under our rating methodology because, once the
issuer has settled the deferred amount, it can choose to defer
payment on the next interest payment date.

The issuer retains the option to defer coupons throughout the life
of the securities. The deferred interest on the proposed securities
is cash cumulative and compounding.


UNIFIN SAS: S&P Withdraws 'B' ICR Following Debt Repayment
----------------------------------------------------------
S&P Global Ratings said that it withdrew, at the company's request,
its 'B' issuer credit rating on France-based Unifin SAS (Unither)
and its 'B' issue rating on Unifin's EUR305 million first-lien
senior secured term loan B. This follows the full repayment of the
debt in March 2023. The outlook on the long-term rating was stable
at the time of the withdrawal.




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G E R M A N Y
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REVOCAR 2023-2: DBRS Assigns Prov. BB Rating on Class D Notes
-------------------------------------------------------------
DBRS Ratings GmbH assigned provisional credit ratings to the
following classes of notes to be issued by RevoCar 2023-2 UG
(haftungsbeschränkt) (the Issuer):

-- Class A Notes at AAA (sf)
-- Class B Notes at A (sf)
-- Class C Notes at BBB (sf)
-- Class D Notes at BB (sf)

DBRS Morningstar did not assign a provisional credit rating to the
Class E Notes (together with the Class A, Class B, Class C, and
Class D Notes, the Notes) also to be issued in this transaction.

The provisional credit ratings are based on information provided to
DBRS Morningstar by the Issuer and its agents as of the date of
this press release. These credit ratings will be finalized upon
review of the final version of the transaction documents and of the
relevant opinions. If the information therein were substantially
different, DBRS Morningstar may assign different final credit
ratings to the notes.

The provisional credit rating on the Class A Notes addresses the
timely payment of interest and the ultimate repayment of principal
by the legal final maturity date. The provisional credit ratings on
the Class B Notes, Class C Notes, and Class D Notes address the
timely payment of interest once most senior and the ultimate
repayment of principal by the legal final maturity date.

The transaction represents the issuance of notes backed by a
provisional portfolio of approximately EUR 400 million in
receivables related to amortizing loans and amortizing loans with a
final, mandatory balloon payment granted by the seller and the
servicer, Bank11 für Privatkunden und Handel GmbH (Bank11).

CREDIT RATING RATIONALE

The provisional credit ratings are based on DBRS Morningstar's
review of the following analytical considerations:

-- The transaction capital structure, including form and
sufficiency of available credit enhancement;

-- Relevant credit enhancement in the form of subordination, the
liquidity reserve, and excess spread;

-- Credit enhancement levels that are sufficient to support DBRS
Morningstar's projected cumulative net loss assumptions under
various stressed cash flow assumptions;

-- The ability of the transaction to withstand stressed cash flow
assumptions and repay investors according to the terms under which
they have invested;

-- Bank11's capabilities with regard to originations,
underwriting, and servicing;

-- The transaction parties' financial strength with regard to
their respective roles;

-- The credit quality of the collateral, and the historical and
projected performance of the originator's portfolio;

-- DBRS Morningstar's sovereign rating on the Federal Republic of
Germany, currently at AAA with a Stable trend; and

-- The expected consistency of the transaction's legal structure
with DBRS Morningstar's "Legal Criteria for European Structured
Finance Transactions methodology" and the presence of legal
opinions that are expected to address the true sale of the assets
to the Issuer.

TRANSACTION STRUCTURE

The transaction is static and begins to amortize from the first
interest payment date.

The transaction incorporates a mixed pro rata/potentially
sequential amortization mechanism during the normal redemption
period. Upon the breach of a predefined triggers, the repayment of
the Class A to Class D Notes will switch to sequential from pro
rata amortization. The Class E Notes will always amortize
sequentially.

The transaction allocates payments on a combined interest and
principal priority of payments basis and benefits from an
amortizing EUR 4.8 million liquidity reserve that Bank11 will fund
at closing. The liquidity reserve can be applied to cover senior
costs, payments under the interest rate swap agreement, and
interest on the Class A Notes only.

All underlying contracts are fixed-rate loans whereas the Class A
to Class E Notes represent floating-rate obligations. The interest
rate risk is mitigated by an interest rate swap entered into with
DZ BANK AG Deutsche Zentral-Genossenschaftsbank (DZ Bank) that
considers a notional amount equal to the aggregate outstanding note
principal amount of all classes of Notes.

COUNTERPARTIES

Citibank Europe plc, Germany branch is the Issuer's account bank
for the transaction. DBRS Morningstar does not rate the German
branch but publicly rates its ultimate parent, Citibank Europe plc,
with a Long-Term Issuer Rating at AA (low) with a Stable trend. The
transaction documents contain downgrade provisions relating to
Citibank Europe plc are consistent with DBRS Morningstar's legal
criteria where a replacement must be sought if the long-term rating
on the account bank falls below a specific threshold ("A" by DBRS
Morningstar). DBRS Morningstar considered this threshold and the
current rating on Citibank Europe plc in its analysis. The Issuer's
accounts include the operating, the liquidity reserve, the
commingling reserve, the servicing fee reserve, and the swap
collateral accounts.

DZ Bank AG is the swap counterparty for the transaction. DBRS
Morningstar publicly rates DZ Bank AG with a Long-Term Issuer
Rating at AA (low) with a Stable trend and a Long Term Critical
Obligations Rating at AA with a Stable trend and concluded that it
meets the minimum criteria to act in this capacity. The hedging
documents contain downgrade provisions consistent with DBRS
Morningstar's criteria.

DBRS Morningstar's credit ratings on the Class A, Class B, Class C,
and Class D Notes address the credit risk associated with the
identified financial obligations in accordance with the relevant
transaction documents. The associated financial obligations for
each of the rated class of notes are their respective interest due
and their principal amount.

DBRS Morningstar's credit rating does not address non-payment risk
associated with contractual payment obligations contemplated in the
applicable transaction document(s) that are not financial
obligations.

DBRS Morningstar's long-term credit ratings provide opinions on
risk of default. DBRS Morningstar considers risk of default to be
the risk that an issuer will fail to satisfy the financial
obligations in accordance with the terms under which a long-term
obligation has been issued. The DBRS Morningstar short-term debt
rating scale provides an opinion on the risk that an issuer will
not meet its short-term financial obligations in a timely manner.

Notes: All figures are in euros unless otherwise noted.




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BOSPHORUS CLO VII: Moody's Gives (P)B3 Rating to EUR12MM F-R Notes
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Moody's Investors Service announced that it has assigned the
following provisional ratings to refinancing notes to be issued by
Bosphorus CLO VII Designated Activity Company (the "Issuer"):

EUR248,000,000 Class A-R Secured Floating Rate Notes due 2036,
Assigned (P)Aaa (sf)

EUR40,000,000 Class B-R Secured Floating Rate Notes due 2036,
Assigned (P)Aa2 (sf)

EUR22,000,000 Class C-R Secured Deferrable Floating Rate Notes due
2036, Assigned (P)A2 (sf)

EUR26,000,000 Class D-R Secured Deferrable Floating Rate Notes due
2036, Assigned (P)Baa3 (sf)

EUR20,000,000 Class E-R Secured Deferrable Floating Rate Notes due
2036, Assigned (P)Ba3 (sf)

EUR12,000,000 Class F-R Secured Deferrable Floating Rate Notes due
2036, Assigned (P)B3 (sf)

RATINGS RATIONALE

The rationale for the ratings is based on a consideration of the
risks associated with the CLO's portfolio and structure as
described in Moody's methodology.

As part of this reset, the Issuer will extend the reinvestment
period by 4.5 years and the weighted average life by 3.5 years to
8.5 years. It will also amend certain concentration limits,
definitions and minor features. In addition, the Issuer will amend
the base matrix and modifiers that Moody's will take into account
for the assignment of the definitive ratings.

The Issuer is a managed cash flow CLO. At least 92.5% of the
portfolio must consist of secured senior loans or senior secured
bonds and up to 7.5% of the portfolio may consist of unsecured
senior loans, second-lien loans, high yield bonds and mezzanine
loans. The underlying portfolio is expected to be fully ramped as
of the closing date and to comprise of predominantly corporate
loans to obligors domiciled in Western Europe.

Cross Ocean Adviser LLP ("Cross Ocean") will continue to manage the
CLO. It will direct the selection, acquisition and disposition of
collateral on behalf of the Issuer and may engage in trading
activity, including discretionary trading, during the transaction's
four and a half year reinvestment period. Thereafter, subject to
certain restrictions, purchases are permitted using principal
proceeds from unscheduled principal payments and proceeds from
sales of credit risk obligations and credit improved obligations.

The transaction incorporates interest and par coverage tests which,
if triggered, divert interest and principal proceeds to pay down
the notes in order of seniority.

In addition to the six classes of notes rated by Moody's, the
Issuer has originally issued EUR37,500,000 of Subordinated Notes
which remain outstanding and are not rated.

Methodology Underlying the Rating Action:

The principal methodology used in these ratings was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
December 2021.

Factors that would lead to an upgrade or downgrade of the ratings:

The rated notes' performance is subject to uncertainty. The notes'
performance is sensitive to the performance of the underlying
portfolio, which in turn depends on economic and credit conditions
that may change. The collateral manager's investment decisions and
management of the transaction will also affect the notes'
performance.

Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3 of
the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in December 2021.

Moody's used the following base-case modeling assumptions:

Target Par Amount: EUR400,000,000

Diversity Score: 45

Weighted Average Rating Factor (WARF): 2925

Weighted Average Spread (WAS): 4.40%

Weighted Average Coupon (WAC): 5.00%

Weighted Average Recovery Rate (WARR): 44.50%

Weighted Average Life (WAL): 7.5 years

Moody's has addressed the potential exposure to obligors domiciled
in countries with local currency ceiling (LCC) of A1 or below. As
per the portfolio constraints and eligibility criteria, exposures
to countries with LCC of A1 to A3 cannot exceed 10% and obligors
cannot be domiciled in countries with LCC below A3.




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CEDACRI SPA: S&P Affirms 'B' ICR, Outlook Negative
--------------------------------------------------
S&P Global Ratings affirmed its 'B' issuer and issue credit ratings
on Italian core banking software provider Cedacri S.p.A..

The negative outlook reflects the risk that Cedacri's S&P Global
Ratings-adjusted debt to EBITDA could significantly exceed 7x in
2023 and 2024 if the company's topline growth or synergy
realization fails to meet the targets or if the company increases
its debt further in 2023 and 2024.

S&P said, "We reassessed our view of the company's ownership
structure as non-financial-sponsor-controlled. ION Group is the
parent entity of Cedacri and also owns sister entities, such as ION
Corporates, ION Markets, ION Analytics, and Cerved. We no longer
treat ION Group as a financial sponsor company, given the group's
concentrated founder/CEO ownership, industry-focused operating
capabilities, and differentiated investment horizon. In addition,
ION Group has an infinite investment horizon and has never sold any
of the entities under management. This supports our view that ION
Group is not a financial sponsor that buys companies and tries to
unlock value through efficiencies and cost cuts with the purpose of
selling them at a higher multiple. That said, we believe that ION
Group will continue to operate the entities under management with
high leverage, while engaging in dividend recapitalizations. None
of our ratings on the entities owned by ION Group are higher than
'B', reflecting the aggressive complexion of the entire group.
Nonetheless, we note that ION Group has never had a default in its
over 20-year history.

"The relationship between Cedacri and the other ION Group companies
influences our view of Cedacri's overall creditworthiness. While
all the businesses owned by ION Group cater to financial markets,
each company either serves a different part of the industry or
offers a distinct solution. However, co-mingling of representation
across the board of directors at the portfolio companies the
long-term buy-and-hold philosophy, and the concentrated founder
ownership at the parent level mean that Cedacri's creditworthiness
depends on the creditworthiness of the entire group, in our view.
We believe the parent entity would likely provide extraordinary
support in most circumstances if Cedacri encountered financial
distress. The close relationships between ION Group companies,
shared branding, and cash pooling mechanism influence our view of
ION Group's overall creditworthiness. A deterioration or
improvement of any individual company could have implications on
our rating on Cedacri."

The negative outlook reflects the risk that Cedacri's adjusted debt
to EBITDA could significantly exceed 7x in 2023 and 2024 if the
company's topline growth or synergy realization fails to meet the
targets or if the company increases its debt further in 2023 and
2024.

S&P could lower the ratings if Cedacri materially underperforms,
compared with our base case, leading to:

-- Adjusted debt to EBITDA significantly above 7x; or

-- Free operating cash flow (FOCF) to debt materially and
persistently below 5%.

S&P could also downgrade the company if ION Group exhibits overly
aggressive behavior such that its leverage remains above 8.5x on a
sustained basis, with no clear path to deleveraging, and FOCF to
debt remains below 5% on a sustained basis.

S&P could revise the outlook to stable if Cedacri's:

-- Adjusted leverage sustainably returns to below 7x; and

-- FOCF to debt increases to more than 5% on a sustained basis.


CERVED GROUP: S&P Affirms 'B-' ICR, Outlook Stable
--------------------------------------------------
S&P Global Ratings affirmed its 'B-' ratings on Italy-based
financial services company Cerved Group S.p.A. and the group's
senior secured notes. The recovery rating on the notes remains at
'3', indicating meaningful recovery prospects (50%-70%; rounded
estimate: 55%).

S&P said, "The stable outlook reflects our view that Cerved will
generate FOCF of EUR5 million-EUR10 million per year and report a
S&P Global Ratings-adjusted EBITDA margin gradually increasing
toward 42% over the next 12-18 months, while leverage will remain
at 7.5x-8.0x with funds from operations cash interest coverage of
about 1.5x.

"The affirmation reflects our view of Cerved's sustained ability to
generate positive cash flows, despite macroeconomic headwinds and
softer-than-expected operating performance. We lowered our revenue
forecast for 2023 to negative 2.3% from positive 2.5% led by a
softer than expected operating performance at year to date (YTD)
June. The YTD revenue decline of 6.6% is driven by macroeconomic
headwinds and higher interest rates that affect activity levels
within the real estate appraisal business. In addition, about 27%
of total corporate revenues within the risk intelligence segment
face contract renewals this year. Therefore, the company has seen a
reduction in volumes from those clients ahead of the renewal dates
due to the ongoing discussions, which also cover a change in
contract structure towards a subscription-based model. However, we
expect some improvement in volumes during the second half of 2023
since we anticipate successful renewals for those contracts given
its mission critical nature of services provided."

The company-reported EBITDA margin saw a year-on-year expansion of
60 basis points (bps) during the second-quarter of 2023, while YTD
still lags behind last year by about 130 bps due to a negative
service mix and some personnel-related investments to support the
new product development. S&P said, "Considering the about EUR25
million of actioned cost synergies since inception of the cost
optimization program in 2022, of which about EUR15 million have
started to flow through the operating performance, we forecast
EBITDA margin expansion in the second half of the year leading to
an EBITDA margin of 41.4% by end-2023, despite certain personnel
investments undertaken for new product developments. Driven by the
negative revenue growth assumption and lower EBITDA margin
expectation against our previous forecast, leverage will likely
reach 8.2x by end-2023, compared with our previous estimate of 7.6x
and 7.4x at end-2022. We anticipate a deleveraging towards 7.5x by
end 2024 thanks to revenue growth of 1.5%-2.5% and further cost
optimization-led EBITDA margin expansion to above 42%. Over the
same period, FOCF will likely be between EUR5 million-EUR10
million, coming in lower than our previous forecast because of
higher interest expenses and a slower growth of the EBITDA base.
FFO cash interest coverage will likely near 1.5x, while liquidity
remains solid with about EUR75 million of cash on balance sheet and
an undrawn revolving credit facility (RCF) of EUR80 million."

S&P said, "Although the group owner has operated its entities at
high leverage levels, we no longer view Cerved as financial
sponsor-controlled after reassessing its ownership structure. ION
Group is the parent company of Cerved as well as ION Markets, ION
Corporates, ION Analytics, and Cedacri. Our assessment is based on
the group's concentrated founder/CEO ownership, industry-focused
operating capabilities, and differentiated investment horizon (ION
has never sold any of the entities under management). This
long-term value creation leads us to think that ION Group is not a
financial sponsor that seeks rapid returns for shareholders.
However, considering the group's track record, including
debt-funded mergers and acquisitions and dividend
recapitalizations, we assume the entities under management will
continue to operate under high leverage. None of the rated entities
owned by the ION Group has an issuer credit rating higher than 'B',
reflecting the group's aggressive financial policy stance.
Nonetheless, we note that ION Group has never had a default in its
over 20-year history.

"Cerved's debt-funded dividend in February 2023 was taken at a time
where the company had a limited track record of achieving its
operational goals. The company was also underperforming our base
case, causing us to revise our leverage expectation by 1x (and by
2.5x compared with our initial expectation at the time of the
original transaction). We note the transaction was in line with the
capital structure initially planned by ION. However, we believe
this points to the owner's high risk tolerance, and it prompted a
downgrade on March 10, 2023.

"The relationship between Cerved and the other ION Group entities
influences our view of Cerved's overall creditworthiness. ION Group
is the parent entity of Cerved, which also owns sister entities
such as ION Markets, ION Corporates, ION Analytics, and Cedacri.
While all the businesses cater to the financial markets, each
company either serves a different part of the industry or offers a
distinct solution. However, co-mingling of representation across
the board of directors at the portfolio companies, long-term
buy-and-hold philosophy with a concentrated founder ownership at
the parent level, and the use of intercompany loans to redistribute
cash for liquidity purposes across the different entities lead us
to believe Cerved's creditworthiness would be influenced by the
entire group. We believe ION Group would likely provide
extraordinary support in most foreseeable circumstances if Cerved
encountered financial distress.

"The stable outlook reflects our view that Cerved will generate
FOCF of EUR5 million-EUR10 million per year and report S&P Global
Ratings-adjusted EBITDA margin gradually increasing toward 42% over
the next 12-18 months, while leverage will remain elevated at
7.5x-8.0x with FFO cash interest coverage around 1.5x.

"We see the risk of a downgrade as remote, given the company's
sound liquidity and cash flow. However, we could lower the ratings
if Cerved's FOCF is persistently negative, such that we view the
capital structure as unsustainable.

"We could raise the ratings if Cerved's business plan yields
increased sales and EBITDA growth, as well as margin improvement
from synergies. We would also consider an established track record
of deleveraging.

"Governance is a moderately negative consideration in our analysis
of Cerved. We believe the company's highly leveraged financial risk
profile points to corporate decision-making that prioritizes the
interests of its controlling owners, and reflects the parent
entity's aggressive financial policy. We also view the lack of
independent directors on its board unfavorably."


EMERALD ITALY 2019: DBRS Cuts Class D Notes Rating to CC
--------------------------------------------------------
DBRS Ratings GmbH downgraded its ratings on the commercial
mortgage-backed floating-rate notes due September 2030 issued by
Emerald Italy 2019 Srl (the Issuer) as follows:

-- Class A notes to BBB (low) (sf) from A (low) (sf)
-- Class B notes to BB (low) (sf) from BBB (low) (sf)
-- Class C notes to CCC (sf) from B (high) (sf)
-- Class D notes to CC (sf) from B (low) (sf)

The trends on all ratings are Negative. DBRS Morningstar also
removed the Under Review with Negative Implications (UR-Neg.) of
the ratings, where they were placed on July 5, 2023.

CREDIT RATING RATIONALE

The downgrades reflect deterioration in the market value of the
underlying collateral, with the loan-to-value (LTV) increasing to
120.2% following the 2023 portfolio revaluation. The assets are
experiencing downward pressure on their rental values due to their
secondary location, and local competition. At the same time, higher
interest rates and uncertainty in the investment market continue to
push property yields outwards. The Negative trends reflect
uncertainty around the outcome of the property disposal process
after the loan defaulted in 2022.

The transaction is a securitization of a EUR 105.8 million Italian
commercial real estate loan, comprising a EUR 100.4 million term
loan and a EUR 5.4 million capital expenditure loan, advanced by
JPMorgan Chase Bank, N.A., Milan Branch and arranged by J.P. Morgan
Securities PLC. The loan is secured against a portfolio of two
retail malls and one shopping center located in the Lombardy region
of northern Italy. The borrower is Investire Societa Di Gestione
Del Risparmio S.P.A., acting on behalf of an Italian real estate
alternative closed-end fund (fondo comune di investimento
immobiliare alternative di tipo chiuso riservato) named Everest,
which is ultimately owned by Kildare Partners.

The loan's cash flow deteriorated as a result of the Coronavirus
Disease (COVID-19) pandemic-related store closures and it was
transferred into special servicing in June 2020 following an
uncured payment default. The loan was not extended and not repaid
at the initial maturity in September 2022, after the extension
conditions, including appropriate in-place hedging, were not
satisfied. Subsequently, the special servicer agreed to a
standstill period with the borrower until 15 September 2023, during
which the key terms of the loan will continue to apply, with
default interest of 2.0% accruing on all overdue amounts (EUR 94.8
million). The floating-rate loan is now unhedged. DBRS Morningstar
understands that following the marketing process the borrower is in
receipt of offers for purchase of the properties, which are
currently under considerations. The special servicer is in dialogue
with the borrower to extend the standstill agreement to allow more
time to pursue a sales process.

The loan balance has not changed since the last review and remains
at EUR 94.8 million as of June 2023. In the absence of hedging, the
increase in reference rate continues to negatively affect the
transaction's cash flow. As of June 2023, available funds after
Issuer expenses were sufficient to cover interest and a partial
payment of default interest at note level. DBRS Morningstar
understands that the calculation agent is currently in discussions
with the arranger on whether default interest that has been paid
out to noteholders should have been used for sequential principal
redemption of the notes.

The transaction suffered a substantial deterioration in the
collateral value, when Savills Advisory Services Limited (Savills)
conducted a revaluation of the portfolio with a valuation date of
April 27, 2023, and estimated the current market value of the
properties at EUR 78,910,000. This is a decrease of 41.1% on Jones
Lang LaSalle's June 30, 2022 valuation, and a 51.1% decrease from
the valuation at issuance. As a result of the updated valuation,
the loan-to-value increased to 120.2% from 70.8% previously.

DBRS Morningstar revised its underwriting assumptions, which led to
DBRS Morningstar net cash flow decreasing to EUR 7.5 million from
EUR 8.6 million at last review. In addition, DBRS Morningstar
revised its capitalization rate assumption to 11.0% from 9.5%,
largely reflecting the lack of liquidity in the Italian retail
investment market and that the properties will likely be sold in
the near term. These changes translate to a DBRS Morningstar value
of EUR 67.7 million, representing a 14.2% haircut to Savills' most
recent valuation. The decline in the DBRS Morningstar value has
resulted in DBRS Morningstar downgrading its credit ratings on all
classes of notes. The trends on all tranches remain Negative, as
the outcome of the sales process remains uncertain.

The loan matured on September 15, 2022. The legal final maturity of
the notes is in September 2030. The sequential payment trigger has
occurred and is continuing, with all principal in respect of the
loan applied to the notes on a sequential basis. The Class X
diversion trigger event has also occurred and is continuing.

The transaction benefits from a EUR 4.5 million liquidity facility
(EUR 5.3 million at closing) available to cover interest payments
on the Class A and Class B notes. The facility amortizes in line
with the amortization of the Class A and Class B notes.

DBRS Morningstar's credit ratings on the Class A to Class D of the
commercial mortgage-backed floating-rate notes issued by Emerald
Italy 2019 SRL address the credit risk associated with the
identified financial obligations in accordance with the relevant
transaction documents.

DBRS Morningstar's credit rating does not address non-payment risk
associated with contractual payment obligations contemplated in the
applicable transaction documents that are not financial
obligations. For example, pro-rata default interest, euribor excess
amount, and prepayment fees.

DBRS Morningstar's long-term credit ratings provide opinions on
risk of default. DBRS Morningstar considers risk of default to be
the risk that an issuer will fail to satisfy the financial
obligations in accordance with the terms under which a long-term
obligation has been issued.

Notes: All figures are in euros unless otherwise noted.


GUALA CLOSURES: S&P Affirms 'B+' ICR on EUR350MM Debt Issuance
--------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' issuer credit rating on Guala
Closures SpA and its 'B+' issue rating on the outstanding EUR500
million senior secured notes due 2028. S&P also assigned its 'B+'
issue rating to the proposed EUR350 million senior secured notes
due 2029.

S&P said, "The stable outlook reflects that we expect Guala
Closures to maintain credit metrics that are commensurate with the
rating for the next 12 months. We anticipate that EBITDA growth
will underpin adjusted debt to EBITDA of 5.4x-5.5x by year-end 2023
and 5.0x-5.2x by year-end 2024.

"Guala Closures' credit metrics will remain in line with our
current rating level, despite the material increase in debt. We
expect the proposed transaction to raise S&P Global
Ratings-adjusted debt to EBITDA to 5.4x-5.5x by year-end 2023
followed by 5.0x-5.2x by year-end 2024 (from 3.8x at year-end
2022). In our view, the higher interest burden will reduce adjusted
funds from operations (FFO) to debt to 12%-13% by 2023 (versus 18%
in 2022) and to 10%-11% in 2024. Our rating assumes that Guala
Closures will not add any further debt to its balance sheet and
expects S&P Global Ratings-adjusted debt to EBITDA to remain around
5.0x-5.5x in medium term. Any further increase in leverage, for
example due to debt-funded dividend payments or acquisitions, would
put imminent pressure on our rating.

"We expect sales and EBITDA growth will enable the group to
deleverage in the next two years. We forecast stable revenues in
2023 and growth of 6% in 2024. In 2023, we anticipate price
increases to be offset by volume declines throughout the year (due
to destocking from customers in Europe). We anticipate that demand
will recover in 2024, particularly in alcoholic beverages and
premium brands, and assume revenues growth will be volume-driven.
We anticipate S&P Global Ratings-adjusted EBITDA margins to
increase to 19.5%-20.0% in 2023 and 2024 (versus 18.4% in 2022),
supported by a higher share of luxury products, broadly stable
selling prices (amid lower input costs), and somewhat better
fixed-cost absorption (due to volume growth in 2024).

"We expect positive S&P Global Ratings-adjusted FOCF generation in
2023 and 2024. In our view, our adjusted FOCF will reach EUR30
million in 2023, up from EUR25 million in 2022, and reduce to EUR14
million in 2024. S&P Global Ratings-adjusted FOCF will be supported
by EBITDA generation and low working capital needs, but remain
constrained by high capex (close to EUR75 million per year in
2023-2024, of which EUR40 million is related to expansion and
sustainability projects) and high interest expenses (particularly
in 2024, when the interest burden of the new debt issuance kicks in
on an annual basis). In 2023 and 2024, capital expenditure (capex)
will be higher than usual due to EUR40 million of investments in
capacity expansions and sustainability projects.

"The stable outlook reflects our expectation that stronger EBITDA
generation will enable Guala Closures to maintain credit metrics
that are commensurate with the current rating, with adjusted debt
to EBITDA at about 5.4x-5.5x by end-2023 and 5.0x-5.2x in 2024.

"We could downgrade Guala Closures if its credit metrics
deteriorated, with adjusted debt to EBITDA increasing above 5.5x or
FOCF becoming negative on a sustained basis. This could stem from a
more aggressive financial policy (such as significant debt-funded
acquisitions or dividend payments), a slowdown in the group's
end-markets, or a deterioration in operating performance.

"A positive rating action is unlikely, in our view. We would only
consider this action if Guala Closures' adjusted debt to EBITDA
dropped below 4.5x and FOCF to debt improved to above 5% on a
sustained basis, with the company's financial policy supporting
these credit metrics.

"Governance is a moderately negative consideration in our credit
rating analysis of Guala Closures SpA. Our assessment of the
company's financial risk profile as highly leveraged reflects
corporate decision-making that prioritizes the interests of the
controlling owners, in line with our view of the majority of rated
entities owned by private-equity sponsors. Our assessment also
reflects generally finite holding periods and a focus on maximizing
shareholder returns. Environmental factors have an overall neutral
influence on our credit rating analysis. We believe that Guala
Closures' diversification into aluminum (which can be recycled
endlessly without degradation) compensates for its exposure to
plastics."


NAPLES: Fitch Hikes LongTerm IDRs to 'BB+', Outlook Positive
------------------------------------------------------------
Fitch Ratings has upgraded the City of Naples' Long-Term Foreign-
and Local-Currency Issuer Default Ratings (IDRs) to 'BB+' from
'BB'. The Outlooks are Positive.

Fitch has revised Naples' Standalone Credit Profile to 'b' from
'b-'. Relevant state transfers of EUR0.6 billion in 2021-2025 help
the city to meet its outstanding net payables and enhance debt
sustainability. The Positive Outlook considers that additional
transfers and fiscal revenue under the Pact for Naples could
further improve the city's overall performance in the medium term
and drive another increase of its IDR.

KEY RATING DRIVERS

Risk Profile: 'Low Midrange'

It reflects Fitch's view of a moderately high risk that Naples'
ability to cover debt service with its operating balance may weaken
unexpectedly over 2023-2027. This may be due to lower-than-expected
revenue, higher-than-expected expenditure, or an unexpected rise in
liabilities or debt-service requirements.

Revenue Robustness: 'Midrange'

Fitch-adjusted operating revenue increased about 13% in 2022 thanks
to increases in cash tax revenue (up 11%) and transfers from the
national government (up 8%) to meet outstanding net payables and
pandemic-related costs. Naples' medium-term revenue growth is
inflated by government transfers to address excessive budget
deficits and by the Pact for Naples for a total of EUR1.2 billion
over 20 years. The latter transfers are concentrated in the first
few years (EUR670 million in 2022-2025) before gradually reducing
to around EUR50 million per year from 2026.

The national equalisation fund helps stabilise the city's revenue
base as it accounts for about a quarter of Naples' operating
revenue, mitigating the city's weak but improving tax-and-fee
collection rate of about 75%. As Naples' tax base is mostly
non-cyclical, Fitch expects organic tax revenue growth of 0.5% in
2023-2027, backed by stable property and waste-disposal tax
revenue. Complementing the city's tax base, the Pact for Naples
increased the personal income tax (PIT) surcharge to 0.9% (0.1%
above the legal limit of 0.8%) and a fixed charge on airport
passengers from 2022-2023 that will collectively increase the
city's tax revenue by about 5%.

Revenue Adjustability: 'Weaker'

Naples has been under a recovery plan since 2014, which requires
raising taxes and fee charges up to their legal limits. Fitch
believes that Naples's revenue-raising flexibility relies on
widening its tax base by tackling the city's large shadow economy
and improving own-source revenue collection rates. Naples plans to
reinforce its tax and fee collection through the partial
outsourcing of collection services, with tangible results expected
after 2025. Naples's lower-than-national average socio-economic
standards, such as an unemployment rate consistently above 20% and
a GDP per capita around 70% of Italy's average, limit the city's
revenue adjustability.

Expenditure Sustainability: 'Midrange'

Fitch views Naples's expenditure structure as fairly predictable
and generally non-cyclical as the city's main responsibilities are
civil registry, urban maintenance, waste collection, transportation
and childcare. The city has kept operating expenditure at around
EUR1 billion with a staff reduction of over 30% across the last
five years. For 2023-2027, Fitch expects operating expenditure
trend to increase by 2%, mainly driven by planned new hires and to
a lesser extent by inflation on purchases of goods and services.
Fitch expects the city to continue to use the preferential payment
mechanism, which prioritises staff, debt service and essential
services expenditure, as part of its liability management.

Expenditure Adjustability: 'Weaker'

Fitch does not expect further curtailment of public spending, given
the city's low level of existing services following repeated cost
cuts to cope with decades of financial distress. Naples' historical
debt service coverage with recurring resources at below 1x
indicates substantial non-compliance with national prudential
budget rules, constraining Fitch's assessment of expenditure
adjustability. Fitch expects the city's capex plan to materially
increase towards EUR1.8 billion, funded mostly with state and EU
transfers, mainly for transportation and urban renovation, limiting
the scope for adjusting expenditure, if needed.

Liabilities & Liquidity Robustness: 'Stronger'

Under national prudential regulation, Naples can only borrow for
capex as long as interest expenses do not exceed 10% of operating
revenue, with an amortising debt structure, and only in local
currency. Naples's EUR2.9 billion direct debt at end-2022 carried
little risk as it was almost all at fixed interest rates with an
amortising repayment profile and fully euro-denominated, reflecting
a low risk appetite and a low risk of direct debt-servicing
increasing sharply. Cassa depositi e prestiti SpA (BBB/Stable), the
lender of last resort for Italian local and regional governments
(LRG), and the national government together account for about 75%
of Naples' long-term debt, while bonds represent a modest 8%.

Liabilities & Liquidity Flexibility: 'Weaker'

Naples' cash position significantly improved to EUR984 million at
end-2022 from less than EUR100 million in 2019. Fitch considers
Naples' liquidity as fully earmarked for payables settlement. For
the first time in a decade, the city's net outstanding payables are
covered with cash, and Fitch expects a normalisation of days
payable outstanding from historical levels of above 200 days. Fitch
expects a decrease of off-balance liabilities to about EUR20
million a year from past EUR50 million on average from litigation
stemming from the city's longstanding payables.

The city can rely on committed liquidity lines from its treasurer,
Intesa Sanpaolo S.p.A. (BBB/Stable), which can extend up to EUR280
million cash advances per year by Fitch's calculation, covering
debt service by more than 1x. The maintenance of adequate
own-source liquidity buffers (at least 1x outstanding payables) or
a material reduction of commercial debt could lead to a
reassessment of this factor to 'Midrange'.

Debt Sustainability: 'bb category'

Under Fitch's rating case for 2023-2027, Naples's net adjusted debt
is expected to slightly decline towards EUR2.6 billion (2022:
EUR2.7 billion) as the amount of government transfers envisaged for
2023-2025 reduces the scope for bank or inter-governmental
borrowings.

Once state transfers normalise from 2026, Naples's operating
balance should stabilise at around EUR120 million-EUR125 million
and the payback ratio remains below 25x. Fitch expects debt to
remain above 200% of operating revenue and debt service coverage at
below 1x, suggesting that timely debt service will continue to be
ensured by the use of the preferential payment mechanism.

DERIVATION SUMMARY

Naples' Low Midrange' risk profile, combined with 'bb' debt
sustainability, leads to an SCP falling in the middle of the 'b'
category. Debt service coverage at below 1x and a debt burden above
200% limit the SCP to 'b'.

The Pact for Naples represents a tangible form of support, as it
ensures cash revenue in the form of transfers and additional taxes
that carry little collection risk. Before the Pact, Naples received
EUR1.3 billion subsidised loans to pay down its commercial
liabilities, for which Fitch assumes the national government would
allow repayment to be subordinated to market debt, in case of
financial distress. Fitch reflects the overall state support to the
city, in terms of ad-hoc transfers, taxes and inter-governmental
loans, in an enhanced payback ratio of around 10x in 2026-2027,
which results in the 'BB+' IDR.

KEY ASSUMPTIONS

Risk Profile: 'Low Midrange, Unchanged with Low weight'

Revenue Robustness: 'Midrange, Unchanged with Low weight'

Revenue Adjustability: 'Weaker, Unchanged with Low weight'

Expenditure Sustainability: 'Midrange, Unchanged with Low weight'

Expenditure Adjustability: 'Weaker, Unchanged with Low weight'

Liabilities and Liquidity Robustness: 'Stronger, Unchanged with Low
weight'

Liabilities and Liquidity Flexibility: 'Weaker, Unchanged with
Medium weight'

Debt sustainability: 'bb, Raised with High weight'

Support (Budget Loans): 'N/A, Unchanged with Low weight'

Support (Ad Hoc): '4, Unchanged with Low weight'

Asymmetric Risk: 'N/A, Unchanged with Low weight'

Rating Cap (LT IDR): 'N/A, Unchanged with Low weight'

Rating Cap (LT LC IDR) 'N/A, Unchanged with Low weight'

Rating Floor: 'N/A, Unchanged with Low weight'

Quantitative assumptions - Issuer Specific

Fitch's rating case is a "through-the-cycle" scenario, which
incorporates a combination of revenue, cost and financial-risk
stresses. It is based on 2018-2022 figures and 2023-2027 projected
ratios. The key assumptions for the scenario include:

- Average 3 % decrease in operating revenue in 2023-2027, as a 5.3%
average decrease in state transfers offset average tax revenue
growth of 0.5%; high weight

- Average 2% increase in operating spending; high weight

- Net capital balance at EUR41 million; high weight

- Apparent cost of debt at 3.2%; high weight

- Net adjusted debt at EUR2.6 billion by 2027; high weight

- Inter-governmental lending of EUR1.2 billion by 2027; high
weight

- Preferential payment mechanism supporting timely debt service;
high weight

Quantitative assumptions - Sovereign Related

Figures as per Fitch's sovereign actual for 2022 and forecast for
2024, respectively (no weights and changes since the last review
are included as none of these assumptions was material to the
rating action):

- GDP per capita (US dollar, market exchange rate): 34,040; 38,434

- Real GDP growth (%): 3.7; 1.0

- Consumer prices (annual average % change): 8.7; 2.9

- General government balance (% of GDP): -7.9; 3.5

- General government debt (% of GDP): 144.4; 142.7

- Current account balance plus net FDI (% of GDP): -2.8; 0.9

- Net external debt (% of GDP): 45.5; 41.5

- IMF Development Classification: Developed Markets

- CDS Market-Implied Rating: 'BBB-'

Summary of Financial Adjustments

Adjustments to 2022 data

Reclassified EUR331 million equalisation fund to transfers from
taxes

Reclassified EUR5 million from capital to operating revenue

Removed from taxes EUR54 million difficult-to-collect revenue

Removed from fees EUR60 million difficult-to-collect revenue

Issuer Profile

Naples has one million inhabitants and is the largest city and main
economic hub in the south of Italy, with a fairly diversified
economy. Fitch classifies the city as a 'Type B' LRG, as it covers
debt service from cash flow on an annual basis.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

- The Outlook could be revised to Stable if the enhanced debt
payback remains at around 10x on a sustained basis

- The ratings could be downgraded if the if the enhanced debt
payback reaches 12x on a sustained basis or if the preferential
payment mechanism protecting financial lenders is removed or
undermined by regulatory changes

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

- The IDRs could be upgraded if the consolidation of the operating
performance drives the enhanced debt payback to below 9x on a
sustained basis. The IDR could also be upgraded if the risk profile
was revised to 'Midrange' if liquidity management further
improves.

ESG CONSIDERATIONS

Fitch has revised Naples's ESG Relevance Score for Creditor Rights
to '3' from '4' as the city has substantially closed its fund
balance deficit with cash reserves. The city's administration has
been steadily reducing its outstanding payables, which were almost
halved in 2022 compared with 2019, mitigating the risk of
litigation and resulting in creditor rights now having a minimal
impact on the rating.

The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.

DISCUSSION NOTE

Committee date: 27 September 2023

There was an appropriate quorum at the committee and the members
confirmed that they were free from recusal. It was agreed that the
data was sufficiently robust relative to its materiality. During
the committee no material issues were raised that were not in the
original committee package. The main rating factors under the
relevant criteria were discussed by the committee members. The
rating decision as discussed in this rating action commentary
reflects the committee discussion.

   Entity/Debt               Rating             Prior
   -----------               ------             -----
Naples, City of    LT IDR     BB+   Upgrade    BB

                   ST IDR     B     Affirmed   B

                   LC LT IDR  BB+   Upgrade    BB

   senior
   unsecured       LT         BB+   Upgrade    BB


PRO-GEST SPA: Moody's Cuts CFR to Caa2 & Alters Outlook to Negative
-------------------------------------------------------------------
Moody's Investors Service has downgraded the long term corporate
family rating of Pro-Gest S.p.A. to Caa2 from Caa1 and the
probability of default rating to Caa2-PD from Caa1-PD.
Concurrently, the instrument rating on the EUR250 million backed
senior unsecured notes due 2024 was downgraded to Caa3 from Caa2.
Pro-Gest is an Italian vertically integrated producer of recycled
paper, containerboard, corrugated cardboard and packaging
solutions. The outlook on all ratings has been changed to negative
from stable.

RATINGS RATIONALE

The rating action mainly reflects Moody's heightened concern
regarding liquidity, particularly in light of the upcoming maturity
of the EUR250 million backed senior unsecured bond due in December
2024. The company continued to consume cash – in the last 12
months ended June 2023 Moody's adjusted free cash flow was negative
EUR41 million, in 2022 negative EUR51 million. As of June 2023, the
company's cash balance has dwindled to a mere EUR49 million, a
significant drop from the154 million on the balance sheet at the
end of 2021. The decrease in available liquidity, which for
Pro-Gest is solely cash, is also attributed to a reduction in
short-term bank loans. However, with EUR94 million remaining at the
end of Q2 2023, short-term debt still outweighs the cash balance.

Despite a notable improvement in Moody's adjusted gross leverage in
2022, driven by an over 30% boost in EBITDA, the ratio rapidly
deteriorated in H1 2023 – reaching 7.8x in H1 2023, compared to
5.4x in 2022 and 7.1x in 2021. This deterioration is attributed to
a weakening macroeconomic environment, unusually high customer
destocking activity in recent quarters, and the company's reduced
competitiveness during last year's energy crisis. Moody's
anticipate the destocking will gradually conclude in the second
half of 2023 and that lower energy prices will enhance Pro-Gest's
competitiveness, potentially reducing leverage to 6-7x by year-end
2023.

However, the primary constraint on the rating is not leverage at
this stage, but rather a weak interest cover (EBIT/ Interest). A
recent squeeze on earnings, coupled with a significant increase in
interest expenses (Moody's adjusted) - EUR57 million LTM Jun 2023
compared to a mere EUR21 million in 2020 – has resulted in a
nearly zero interest coverage ratio in June 2023. Even with a
potential earnings recovery, Moody's do not foresee the ratio
improving over 1x in the near future, indicating an unsustainable
capital structure with potential for debt restructuring. During a
recent earnings call, management mentioned potential assets
disposals that would support the company's efforts to reduce the
debt burden and facilitate refinancing. However, the impact of
these measures on Pro-Gest's business and financial profiles as
well as the liquidity position remains to be seen.

Pro-Gest's rating is mainly constrained by its weak liquidity, with
reliable liquidity sources consisting of cash on balance sheet
insufficient to cover the short-term debt. The liquidity risks are
further amplified by the upcoming EUR250 million backed senior
unsecured bond maturity in December 2024. The rating is further
constrained by weak credit metrics, particularly in terms of
interest coverage; the company's limited scale and geographic
diversification and its exposure to volatile input costs and
periods of oversupply.

The rating is supported by the company's leading position as one of
the largest and vertically integrated producers of containerboard
and corrugated board in Italy; diversified customer base; and its
exposure to stable end markets, such as food and beverage and
healthcare.

LIQUIDITY

Moody's views Pro-Gest's liquidity profile as weak. As of June
2023, the company's cash balance stood at EUR49 million, while its
short-term debt due within a year amounted to EUR94 million.
Pro-Gest has a track record of weak free cash flow generation,
which in the last 12 months ending June 2023 was at negative EUR41
million (Moody's adjusted), even though its capital expenditure was
at the lowest level since 2014. Furthermore, the company is faced
with a repayment of EUR250 million backed senior unsecured bonds in
December 2024 and EUR220 million privately placed notes to Carlyle
in the subsequent year. The Pro-Gest group has entered into certain
receivables financings for an aggregate principal amount equal to
EUR25 million, committed up to June 2025.

STRUCTURAL CONSIDERATIONS

The Caa2-PD probability of default rating (PDR) is in line with
Pro-Gest's CFR. This is based on a 50% family recovery rate,
typical for transactions with both bonds and bank debt. The Caa3
rating of the senior unsecured notes due 2024 is one notch below
the CFR, reflecting the large amount of debt ranking senior or
sitting at operating subsidiaries that are not guaranteeing the
notes and considered senior to the notes.

RATIONALE FOR NEGATIVE OUTLOOK

The negative outlook reflects Moody's concerns that Pro-Gest might
be required to pursue a debt restructuring as refinancing of its
EUR250 million December 2024 backed senior unsecured bonds proved
to be complicated given the weak market environment, but also the
company's weak credit metrics and liquidity position.

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

Positive rating pressure could arise if:

-- Pro-Gest's operating performance improves and

-- The company refinances its upcoming debt maturities.

Conversely, negative rating pressure could arise if:

-- Increased likelihood of debt restructuring and default;

-- Further deterioration of liquidity profile with inability
    to timely address upcoming debt maturities.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Paper and
Forest Products published in December 2021.

COMPANY PROFILE

Headquartered in Treviso, Italy, Pro-Gest S.p.A. is a vertically
integrated producer of recycled paper, containerboard, corrugated
cardboard and packaging solutions. The company operates four
recycling plants, six paper mills plants, four corrugators plants,
eight packaging plants and two tissue converting plants or overall
24 production facilities in Italy. It employs about 1,200 people.
In the last 12 months that ended June 2023, Pro-Gest generated
EUR566 million of revenue and around EUR82 million of EBITDA
(Moody's-adjusted). The company is owned by the Zago family, who
founded Pro-Gest in 1973.




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

SAMRUK-KAZYNA CONSTRUCTION: Fitch Affirms 'BB' LongTerm IDRs
------------------------------------------------------------
Fitch Ratings has affirmed Samruk-Kazyna Construction JSC's (SKCN)
Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs)
at 'BB' with Stable Outlook.

The affirmation reflects Fitch's unchanged assessment of state
support for SKCN given its role and delegated policy mandate.
SKCN's operating environment remains prone to sudden abrupt changes
in operating revenue and expenditure. Its debt is on a declining
trajectory, resulting in an upward revision of its Standalone
Credit Profile (SCP) to 'b+' from 'b'.

KEY RATING DRIVERS

Status, Ownership and Control: 'Strong'

SKCN is a joint-stock company indirectly owned by the state via
Sovereign Wealth Fund Samruk-Kazyna JSC (Samruk-Kazyna,
BBB/Stable). Operating and financing activities are controlled by
the government and SKCN coordinates its operations with
Samruk-Kazyna, Ministry on Investment and Development and the
National Bank of Kazakhstan.

Support Track Record: 'Strong'

SKCN has historically received substantial state funding in the
form of subsidised loans to implement state-housing programmes.
State-originated funding represented most of SKCN's interim debt at
end-3Q23, after its repayment of a rouble-denominated bond in
August 2023.

SKCN was appointed in 2022 to oversee the building of up to 400 new
schools in Kazakhstan in 2023-2025 at estimated cost of about KZT2
trillion, all funded by the state.

Socio-Political Implications of Default: 'Strong'

A default by SKCN would undermine the government's and
Samruk-Kazyna's reputation, given SKCN's continued involvement in
development projects that carry both social and economic
importance. Since its inception, SKCN has been involved in various
state programmes on providing affordable housing, as well as
supporting infrastructure development and regional growth.

SKCN is also manager of a large rental-housing portfolio and lead
developer of state-supported social infrasturture, which Fitch
views would be difficult to substitute in the short term.

Financial Implications of Default: 'Moderate'

SKCN makes limited use of capital markets, as it is primarily
funded by the state via its parent. Fitch therefore views an SKCN
default as having only a modest impact on the availability and cost
of financing for the government and other government-related
entities (GREs).

Standalone Credit Profile

SKCN's 'b+' SCP reflects deleveraging with forecast net debt/EBITDA
at close to 6.9x in 2027 (from its previously projected 9x at
end-2026). 'Midrange' revenue defensibility and 'Weaker' operating
risk.

Revenue Defensibility 'Midrange'

Rental payments from housing tenants provide SKCN with a fairly
stable source of revenue. Rental proceeds contributed more than
half of its operating revenue in 2022. SKCN also has higher-risk
revenue flows from real-estate sales, while rental rates are
largely subject to the government's discretion, with limited
autonomy from SKCN.

Operating Risk 'Weaker'

SKCN has material exposure to construction activity, with volatile
costs in an evolving Kazakh housing market and where its ability to
manage costs is limited. Its construction activity is exposed to
risks of cost overruns due to project delays, accelerating
inflation and local-currency fluctuations, given a large share of
imported main construction materials. Its year-to-year cost
structure is unstable.

Financial Profile 'Weaker'

SKCN's net debt/EBITDA continued to decline to 3.9x at end-2022
from 14x in 2019, but remained high due to capital-intensive
construction works. Fitch's rating case forecasts the ratio rise to
6.9x at end-2027.

Derivation Summary

Fitch classifies SKCN as an entity linked to Kazakhstan, despite
its indirect ownership by the state, as SKCN is a policy-driven GRE
integrated with the state. Under its GRE Criteria Fitch applies a
top-down approach based on its assessment of the strength of
linkage with, and incentive to support by, the sovereign.

SKCN's support score of 25 points (out of a maximum of 60) under
its GRE Criteria results in its IDR being notched down three times
from the sovereign IDR, as its 'b+' SCP, which at more than four
notches away from the sovereign's is not a rating driver.

Short-Term Ratings

SKCN's 'B' Short-Term IDR corresponds to its 'BB' Long-Term IDR.

National Ratings

According to Fitch's National Scale Rating Criteria, SKCN's
'A+(kaz)' National Long-Term Rating is mapped to its Long-Term IDR
and three notches lower than Kazakhstan's.

KEY ASSUMPTIONS

Fitch's rating case is a "through-the-cycle" scenario, which
incorporates a combination of revenue, cost and financial risk
stresses. It is based on 2018-2022 published figures and 2023-2027
projected ratios:

- Operating revenue growth on average at 2.8%

- Operating expenditure growth on average at 12.2%

- Capital expenditure on average at KTZ5.2 billion

Liquidity and Debt Structure

SKCN is predominantly funded by the state, via Samruk-Kazyna, with
debt of KZT72.3 billion at end-2022 (2021: KZT93.7 billion). SKCN's
debt maturity extends to 2034, due to long-term loans from
Samruk-Kazyna, with most scheduled payments for 2023 already
repaid. SKCN historically has sufficient cash to meet scheduled
debt payments (2022: KZT27.5 billion).

Summary of Financial Adjustments

Fitch classifies loans from Samruk-Kazyna as long-term debt, in
line with their contracted maturity even though the parent may
request early repayment of the loans.

Issuer Profile

SKCN is a GRE of Kazakhstan that provides public services in the
housing and construction sectors, such as affordable housing,
construction of social infrastructure, and support to private
developers.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

- Dilution of state support would lead to negative rating action

- Negative rating action on the Republic of Kazakhstan would also
be reflected in SKCN's ratings

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

- Positive rating action on the sovereign's IDRs would lead to a
similar action on SKCN's ratings, provided the company's links to
the government are unchanged

- Tighter integration with the state could also be positive for the
company

ESG Considerations

The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

SKCN's ratings are linked to the Kazakhstani sovereign's IDRs.

   Entity/Debt              Rating              Prior
   -----------              ------              -----
Samruk-Kazyna
Construction JSC   LT IDR     BB       Affirmed   BB
                   ST IDR     B        Affirmed   B
                   LC LT IDR  BB       Affirmed   BB
                   Natl LT    A+(kaz)  Affirmed   A+(kaz)




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

COLOUROZ MIDCO: Moody's Withdraws 'Ca' CFR on Debt Restructuring
----------------------------------------------------------------
Moody's Investors Service has withdrawn all outstanding ratings and
stable outlooks of ColourOz Midco (Flint), COLOUROZ INVESTMENT 1
GMBH, and FDS Holdings BV. Before the withdrawal, Flint's long term
corporate family rating was Ca and its probability of default
rating was Ca-PD/LD. The senior secured first lien term loans and
senior secured first lien revolving credit facility (RCF), issued
by COLOUROZ INVESTMENT 1 GMBH and the senior secured first lien
term loan B issued by FDS Holdings BV were rated Ca. The senior
secured second lien term loans issued by COLOUROZ INVESTMENT 1 GMBH
were rated at C.

RATINGS RATIONALE

The withdrawal of the ratings follows the restructuring of Flint's
capital structure completed on September 19, 2023 that terminated
the previously rated revolver and term loan instruments.

Since March 31, 2023, Flint's PDR has been appended with a limited
default (LD) indicator, indicating that the company had been in
default on a limited set of its obligations. The limited default
designation reflected the non-repayment of the company's revolving
credit facility at maturity, which constituted a default under
Moody's definition. Additionally, Moody's considers the
restructuring involving an exchange of debt into new loans to be a
distressed exchange.




===========
N O R W A Y
===========

AXACTOR ASA: Moody's Affirms 'B1' CFR, Outlook Remains Positive
---------------------------------------------------------------
Moody's Investors Service has affirmed Axactor ASA's B1 corporate
family rating and its B3 senior unsecured rating and has
simultaneously withdrawn Axactor's B3 issuer rating. The issuer
outlook remains positive.

RATINGS RATIONALE

RATIONALE FOR THE AFFIRMATION OF THE B1 CFR AND B3 SENIOR UNSECURED
RATING

The affirmation of Axactor's B1 CFR takes into account continuous
improvement of the company's financial profile as demonstrated by
significantly improved profitability and deleveraging progress in
2022 and into 2023. Furthermore, timely refinancing of the
Revolving Credit Facility (RCF) in Q2 2023 and the issuance of a
NOK 2.3 billion bond well ahead of the refinancing of Axactor's
EUR200 million bond maturing in January 2024 ensures adequate
liquidity for the next 18-24 months.

Moody's believes that potential risks stemming from Axactor's rapid
growth following its inception phase in 2015 and its shorter track
record as compared with other peers from the debt purchasing sector
have not materialized. Since 2020 Axactor has successfully changed
its approach to one of "controlled growth". This strategy
incorporates selective portfolio investments at adequate return
rates while simultaneously ensuring an ongoing reduction in
leverage resulting in a visible improvement in Axactor's financial
profile. As a result, Moody's decided to remove the negative notch
for Corporate Behavior and Risk Management for Axactor and to
reposition Axactor's B1 CFR at the lower end of the
scorecard-calculated standalone assessment range ba2-b1 from
previously at the midpoint of the ba3-b2 range.    

The negative notch for Corporate Behavior and Risk Management was
previously also reflected in a governance issuer profile score
(IPS) of G-4, indicating high governance risks under Moody's
framework for assessing environmental, social and governance (ESG)
risks. Consequently, the removal of the negative notch will be
reflected in a governance score of G-3 (from G-4) and in an
improvement of the Credit Impact Score to CIS-3 (from CIS-4), now
indicating mainly the potential for longer-term pressures on
Axactor's credit profile and ratings from high customer relations
risks, typical for debt purchasing companies and reflected in an
unchanged S-4 social IPS.

The B3 senior unsecured rating reflects the application of Moody's
Loss Given Default (LGD) analysis to the company's liability
structure, which reflects the priorities of claims and asset
coverage in the company's liability structure. The size of
Axactor's secured RCF indicates higher loss-given default for
senior unsecured creditors, leading to a senior unsecured rating
two notches below Axactor's B1 CFR.      

OUTLOOK

The positive outlook reflects the agency's expectation that over
the outlook period of 12-18 months, Axactor will continue to
confirm its positive track record and further improve Moody's
adjusted gross debt/EBITDA leverage metric, while safeguarding its
profitability amid the challenging operating environment,
characterized by increased refinancing costs, stiff competition in
the debt purchasing and servicing sector and a deteriorating
macro-economic environment in Europe.  

WITHDRAWAL OF ISSUER RATING

Moody's has decided to withdraw the ratings for its own business
reasons.

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

Axactor's CFR could be upgraded if it continues to demonstrate
solid financial performance over the next 12-18 months, including
further reduction in leverage to below 4.0x Moody's adjusted gross
debt/EBITDA, while maintaining healthy profitability and adequate
interest coverage.

An upgrade of Axactor's CFR would likely result in an upgrade of
the senior unsecured debt ratings by up to two notches because an
upgrade of the CFR to Ba3 would also likely reduce the differential
between the CFR and the senior unsecured debt rating.

Axactor's CFR could be downgraded if the company's financial
performance, particularly leverage and EBITDA coverage,
deteriorates to below Moody's forward-looking expectations over the
next 12-18 months.

A downgrade of Axactor's CFR would likely result in a downgrade of
the senior unsecured debt ratings. These ratings could also be
downgraded if the company were to significantly increase its
secured RCF, which ranks structurally above the senior unsecured
liabilities.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.


B2 IMPACT: Moody's Ups CFR to Ba2 & Senior Unsecured Notes to Ba3
-----------------------------------------------------------------
Moody's Investors Service has upgraded B2 Impact ASA's, formerly
B2Holding ASA, corporate family rating to Ba2 from Ba3 and the
senior unsecured rating to Ba3 from previously B1. The issuer
outlook remains stable.  

RATINGS RATIONALE

RATIONALE FOR THE UPGRADE

The upgrade of B2 Impact's CFR to Ba2 from Ba3 reflects the
company's more balanced and moderate growth strategy since 2019,
following a phase of rapid growth between 2014 and 2018. The
amended strategy has resulted in solid and continuous
profitability, leverage below the sector's average, strong equity
buffers and diminishing liquidity pressures. B2 Impact's financial
profile has been stable since 2019 in the upper Ba range, despite
COVID-19 related challenges and despite a highly competitive
operating environment in the debt purchasing segment. B2 Impact's
management has also ensured timely refinancings and adequate
back-up facilities in order to mitigate refinancing risks during
periods of potentially constrained capital market access. Moody's
also takes into consideration that given a low current leverage
level and headroom under its financial covenants, B2 Impact is well
positioned to continue its moderate but profitable growth path.

As a result, Moody's removed the negative notch for Corporate
Behavior and Risk Management for B2 Impact, which was previously
also reflected in a governance issuer profile score (IPS) of G-4,
indicating high governance risks under Moody's framework for
assessing environmental, social and governance (ESG) risks.
Consequently, the removal of the negative notch leads to a
governance score of G-2 (from G-4) and an improvement of the Credit
Impact Score to CIS-3 (from CIS-4), now indicating mainly the
potential for longer-term pressures on B2 Impact's credit profile
and ratings from high customer relations risks, typical for debt
purchasing companies and reflected in an unchanged S-4 social IPS.

The Ba3 senior unsecured debt rating reflects the company's Ba2
CFR, B2 Impact's capital structure, specifically the priorities of
claims and asset coverage in the company's current liability
structure. In particular, the total size of B2 Impact's secured
EUR610 million revolving credit facility (RCF) indicates higher
loss-given default for senior unsecured creditors, leading to
senior unsecured ratings one notch below the company's Ba2 CFR.

OUTLOOK

The stable outlook reflects the agency's view that B2 Impact will
be able to maintain its credit profile commensurate with that of a
Ba2 CFR, despite current macroeconomic challenges, during the
12-18-month outlook period, continuing to maintain sufficient
liquidity to seize purchasing opportunities, while safeguarding
sufficient covenant headroom.

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

B2 Impact's CFR could be upgraded if the company further improves
its profitability while maintaining low leverage and adequate
interest coverage, and demonstrates strong liquidity management,
proactively refinancing upcoming debt maturities.

An upgrade of B2 Impact's CFR would likely result in an upgrade of
the senior unsecured debt rating. B2 Impact's senior unsecured
rating could also be upgraded because of an improvement in its debt
capital structure that would increase the recovery rate for senior
unsecured debt classes.

Downward rating pressure could develop if the company's
capitalization weakens significantly, if profitability and leverage
metrics deteriorate substantially or if the improved liquidity
position significantly weakens.

A downgrade of B2 Impact's CFR would likely result in a downgrade
of the senior unsecured debt rating.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.




=========
S P A I N
=========

SANTANDER CONSUMER 2023-1: DBRS Gives (P) B(high) Rating on E Notes
-------------------------------------------------------------------
DBRS Ratings GmbH assigned provisional credit ratings to the
following classes of notes (the Rated Notes) to be issued by
Santander Consumer Spain Auto 2023-1 FT (the Issuer):

-- Class A Notes at AA (sf)
-- Class B Notes at A (high) (sf)
-- Class C Notes at A (sf)
-- Class D Notes at BBB (high) (sf)
-- Class E Notes at B (high) (sf)

DBRS Morningstar did not assign a provisional credit rating to the
Class F Notes (together with the Rated Notes, the Notes) also
expected to be issued.

The provisional credit rating on the Class A Notes addresses the
timely payment of scheduled interest and the ultimate repayment of
principal by the final maturity date. The provisional credit
ratings on the Class B Notes to Class E Notes address the ultimate
payment of scheduled interest and the ultimate repayment of
principal by the final maturity date.

The provisional credit ratings are based on information provided to
DBRS Morningstar by the Issuer and its agents as of the date of
this press release. These credit ratings will be finalized upon
review of the final version of the transaction documents and of the
relevant legal opinions.

CREDIT RATING RATIONALE

The Rated Notes are backed by a portfolio of approximately EUR 600
million of fixed-rate receivables related to auto loans granted by
Santander Consumer Finance (SCF; the Originator or the Seller) to
private individuals and corporates residing in Spain for the
acquisition of new or used vehicles. SCF will also service the
portfolio (the Servicer).

DBRS Morningstar based its provisional credit ratings on a review
of the following analytical considerations:

-- The transaction capital structure, including form and
sufficiency of available credit enhancement;

-- Relevant credit enhancement in the form of subordination,
reserve funds, and excess spread; credit enhancement levels are
sufficient to support DBRS Morningstar's projected cumulative net
loss assumptions under various stressed cash flow assumptions for
the Rated Notes;

-- The ability of the transaction to withstand stressed cash flow
assumptions and repay investors according to the terms under which
they invested.

-- SCF's capabilities with regard to originations, underwriting,
servicing, and its financial strength;

-- The transaction parties' financial strength with regard to
their respective roles;

-- The credit quality of the collateral and historical and
projected performance of the Seller's portfolio;

-- The sovereign rating on the Kingdom of Spain, currently at A
with a Stable trend;

-- The expected consistency of the transaction's legal structure
with DBRS Morningstar's "Legal Criteria for European Structured
Finance Transactions" methodology and the presence of legal
opinions that are expected to address the true sale of the assets
to the Issuer.

TRANSACTION STRUCTURE

The transaction allocates payments on separate interest and
principal priorities of payments and benefits from an amortizing
cash reserve funded at closing to an amount equal to 1.75% of the
Rated Notes outstanding balance and floored at 1.35% of the Rated
Notes' initial balance. The reserve will also not amortize if it is
not funded to the required level or if a subordination event
occurs. The cash reserve is part of the available funds and covers
senior costs, swap payments, and interests on the Rated Notes, as
long as there is no interest deferral.

The transaction includes a 14-months revolving period. The
repayment of the Rated Notes will start on the first amortization
payment date in March 2025 on a pro rata basis unless certain
events, such as breach of performance triggers or replacement of
the Servicer, occur. Under these circumstances, the principal
repayment of the Rated Notes will become fully sequential, and the
switch is not reversible. Interest and principal payments on the
Rated Notes will be made quarterly.

All underlying contracts are fixed rate while the Notes pay a
floating rate. The Notes are indexed to three-month Euribor.
Interest rate risk for the Rated Notes is mitigated through an
interest rate swap with an eligible counterparty.

COUNTERPARTIES

Societe Generale, Sucursal en España (SG) has been appointed as
the Issuer's account bank for the transaction. DBRS Morningstar
holds a private rating on SG and has concluded that it meets DBRS
Morningstar's minimum criteria to act in its capacity as account
bank. The transaction documents are expected to contain downgrade
provisions relating to the account bank consistent with DBRS
Morningstar's criteria.

Banco Santander SA (Banco Santander) has been appointed as the swap
counterparty for the transaction. DBRS Morningstar's public Long
Term Critical Obligations Rating on Banco Santander is AA (low)
with a Stable trend, which meets the criteria to act in such
capacity. The hedging documents are expected to contain downgrade
provisions consistent with DBRS Morningstar's criteria.

DBRS Morningstar's credit ratings on the Rated Notes address the
credit risk associated with the identified financial obligations in
accordance with the relevant transaction documents. The associated
financial obligations are the related interest payments amounts and
the related principal outstanding balances.

DBRS Morningstar's credit ratings do not address non-payment risk
associated with contractual payment obligations contemplated in the
applicable transaction document(s) that are not financial
obligations.

DBRS Morningstar's long-term credit ratings provide opinions on
risk of default. DBRS Morningstar considers risk of default to be
the risk that an issuer will fail to satisfy the financial
obligations in accordance with the terms under which a long-term
obligation has been issued.

Notes: All figures are in euros unless otherwise noted.




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

LONZA GROUP: BlackRock DSF Marks $939,000 Loan at 16% Off
---------------------------------------------------------
BlackRock Debt Strategies Fund, Inc has marked its $939,000 loan
extended to Lonza Group AG to market at $791,529 or 86% of the
outstanding amount, as of June 30, 2023, according to BlackRock
Debt's Form N-CSRS report for the first half of 2023, filed with
the Securities and Exchange Commission.

BlackRock DSFI is a participant in a USD Term Loan B to Lonza Group
AG. The loan accrues interest at a rate of 9.27% (3-mo. CME Term
SOFR + 3.93%) per annum. The loan matures on July 3, 2028.

BlackRock Debt Strategies Fund, Inc is registered under the
Investment Company Act of 1940, as amended, as closed-end
management investment companies and is referred to herein
collectively as the Fund.

Lonza is a Life Sciences driven company headquartered in
Switzerland.




===========
T U R K E Y
===========

IZMIR METROPOLITAN: Fitch Alters Outlook on 'B' IDRs to Stable
--------------------------------------------------------------
Fitch Ratings has revised the Outlook on Izmir Metropolitan
Municipality's Long-Term Foreign- and Local-Currency Issuer Default
Ratings (IDRs) to Stable from Negative and affirmed the IDRs at
'B'.  Fitch has also assigned Izmir Short-Term Foreign and Local
Currency IDRs of 'B'.

The ratings reflect Fitch's expectations that Izmir's operating
performance will remain resilient, despite the inflationary
operating environment, further lira depreciation and increased
capex investments in the run-up to local elections in March 2024.
Its debt metrics will remain commensurate with peers and with a
'bb-' Standalone Credit Profile (SCP) over the rating case. Izmir's
IDRs are capped by the Turkish sovereign's 'B' IDRs.

The revision of the Outlook follows the similar action on Turkiye's
sovereign ratings (see 'Fitch Revises Turkiye's Outlook to Stable,
Affirms at 'B' dated September 8, 2023).

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

The assessment reflects a very high risk that Izmir's ability to
cover debt service with its operating balance may weaken
unexpectedly over the scenario horizon (2023-2027) due to lower
revenue, higher expenditure or an unexpected rise in liabilities or
debt-service requirements.

Revenue Robustness: 'Midrange'

Izmir has a well-diversified and buoyant local economy, with GDP
per capita 16% above the national median, leading to a tax revenue
base with low volatility and robust tax revenue growth prospects.
This makes Izmir resilient to economic slowdown, which Fitch
expects to continue over the forecast horizon in 2023-2027. Fitch
expects Izmir's operating revenue to increase broadly in line with
national nominal GDP growth to about TRY62.7 billion by 2027 from
TRY14.7 billion in 2022, leading to robust operating margins of
about 34% on average for 2023-2027.

Taxes represent about 78% of operating revenue, with VAT, including
special consumption taxes, and international trade tax making up a
large part. Non-tax revenue, such as charges and fees, make up
around 9%. Transfers from central government make up about 12% of
operating revenue, a fairly low share compared with national peers
due to the city's high socioeconomic wealth indicators.

Revenue Adjustability: 'Weaker'

Izmir's ability to generate additional revenue is constrained by
nationally pre-defined tax rates. At end-2022, nationally set and
collected taxes comprised 78% of Izmir's operating revenue. Local
taxes over which Izmir has autonomy were a low 0.6% of total
revenue, implying negligible tax flexibility. However, this is
compensated to some extent by financial equalisation transfers
received by metropolitan municipalities, which accounted for 12% of
total revenue in 2022.

Non-tax revenue, such as charges, rental income and fees levied on
public services, make up around 9%. However, Izmir does not have
full discretion over non-tax revenue, as the rates are also limited
by the central government.

Expenditure Sustainability: 'Weaker'

Fitch expects that high inflation fueled by significant lira
depreciation will weaken control of operating expenditure, despite
Izmir's moderately cyclical to countercyclical spending
responsibilities.

Recent hikes to fuel prices are likely to exert pressure on Izmir's
operating expenditure, especially for its already loss-making
transportation company, ESHOT, as the increase in costs will not be
reflected in tariffs. Izmir's planned 19.3km metro line will also
reduce its cost-control capacity in the high inflationary operating
environment. Fitch expects capex to account on average 38% of total
expenditure over its rating case. Izmir's ongoing metro line
investment, the 7.2km Fahrettin Altay-Narlidere project and 11.0km
Cigli tram line investments are nearly completed and Fitch expects
them to have limited impact on Izmir's financial metrics.

Expenditure Adjustability: 'Midrange'

Compared with international peers, Izmir's spending has a low share
of inflexible costs, accounting for around 50% on average of its
total expenditure. Izmir's infrastructure investments, which
constitute around 50% of total spending in 2018-2022, could be cut
or postponed because of the moderate existing socioeconomic
infrastructure.

Spending flexibility is somewhat offset by Izmir's weak record of
balanced budgets due to large swings in capex in pre-election
periods, which narrowed to a 4.8% deficit-before financing in 2022
from nearly 19% in 2019. Fitch expects Izmir's spending flexibility
to be reduced in 2023-2024 in the run-up to local elections in
March 2024, and to be gradually restored thereafter, especially
following Izmir's progress with capital-intensive metro line
investments.

Liabilities & Liquidity Robustness: 'Weaker'

Izmir faces significant foreign-exchange risk, as nearly 87% of its
total debt is in euros. Fitch expects FX volatility to increase
debt by TRY4.2 billion, or roughly about 23% at end-2023. Izmir
faces around 18% of its debt stock coming due year on year. Annual
debt-servicing pressure is mitigated by the average life of its
debt at 3.7 years and the fully amortising nature of bank loans.

The majority of bank loans (76%) are fixed-rate, mitigating
interest-rate risk. Refinancing pressure is further mitigated by
Izmir's healthy operating balance covering 1.9x of its annual debt
service on average. Izmir is not exposed to material
off-balance-sheet risks.

Liabilities & Liquidity Flexibility: 'Weaker'

Izmir's year-end cash increased to TRY582 million in 2022 from
TRY524 million in 2021 and remained restricted as it is fully
earmarked for the settlement of payables. However, Izmir has good
access to international financial markets and the weak year-end
cash position is mitigated by Izmir's access to committed credit
facilities of TRY1.1 billion at end-2022 from national lenders
rated below 'BBB-' and with shorter tenors.

Turkish LRGs do not benefit from treasury lines or cash pooling,
making it challenging to fund unexpected increases in debt
liabilities or spending.

Debt Sustainability: 'aaa category'

Under Fitch's conservative rating case for 2023-2027, with the
operating margin declining to an average 34% in 2023-2027 from an
average 49% in 2018-2022, debt metrics remain resilient, with a
payback ratio below 5x corresponding to 'aaa' debt sustainability
(DS). The assessment is further supported by a robust debt service
coverage ratio at 1.5x in 2027 (or 1.9x on average in 2022-2026)
corresponding to a 'a' DS and a low fiscal debt burden below 100%
corresponding to a 'aa' DS.

DERIVATION SUMMARY

Izmir's 'bb-' SCP reflects a 'Vulnerable' risk profile and 'aaa'
DS. The latter is derived from a payback ratio in the 'aaa'
category, an ADSCR in the 'a' category and a fiscal debt burden in
the 'aa' category. The SCP also factors in Izmir's comparison with
its national and international peers in the same rating category.
Izmir's IDRs are not affected by any other rating factors but are
capped by the Turkish sovereign's IDRs.

Short-Term Ratings

The 'B' Short-Term IDR is the only option for a 'B' category
Long-Term IDR.

National Ratings

Izmir's National Ratings are driven by its 'B' Long-Term
Local-Currency IDR, which maps to 'AAA(tur)' on the Turkish
National Correspondence Table based on peer comparison.

Izmir's National Long-Term Rating reflects its budgetary
flexibility, benefiting from a valuable asset base that can be used
to generate additional liquidity in case of need and its very good
access to financial markets.

KEY ASSUMPTIONS

Qualitative Assumptions:

Risk Profile: 'Vulnerable, Unchanged with Low weight'

Revenue Robustness: 'Midrange, Unchanged with Low weight'

Revenue Adjustability: 'Weaker, Unchanged with Low weight'

Expenditure Sustainability: 'Weaker, Unchanged with Low weight'

Expenditure Adjustability: 'Midrange, Unchanged with Low weight'

Liabilities and Liquidity Robustness: 'Weaker, Unchanged with Low
weight'

Liabilities and Liquidity Flexibility: 'Weaker, Unchanged with Low
weight'

Debt sustainability: 'aaa, Unchanged with Low weight'

Support (Budget Loans): 'N/A, Unchanged with Low weight'

Support (Ad Hoc): 'N/A, Unchanged with Low weight'

Asymmetric Risk: 'N/A, Unchanged with Low weight'

Rating Cap (LT IDR): 'B, Raised with High weight'

Rating Cap (LT LC IDR) 'B, Raised with High weight'

Rating Floor: 'N/A, Unchanged with Low weight'

Quantitative assumptions - Issuer Specific

Fitch's rating case is a "through-the-cycle" scenario, which
incorporates a combination of revenue, cost and financial risk
stresses. It is based on 2018-2022 figures and 2023-2027 projected
ratios. The key assumptions for the scenario include:

Operating revenue CAGR of 33.7% in 2023-2027 (versus an annual
average of 31.7% for 2018-2022) due to expected inflation of about
35% on average; low weight

- Tax revenue CAGR of 33.9% in 2023-2027, versus 31.8% CAGR in
2018-2022; low weight

- Current transfer CAGR of 35.0% in 2023-2027, versus 31.4% CAGR in
2018-2022; low weight

- Operating expenses CAGR of 40.3% in 2023-2027 (versus an annual
average of 38.3% for 2018-2022) due to expected inflation of about
35% on average; low weight

- Negative net capital balance of TRY18.2 billion in 2023-2027; low
weight

- Apparent cost of debt on average at 8.3%, around 2% above the
level in 2022 due to higher borrowing rates; low weight

- Turkish lira at 28.8 to the euro at-end-2023, with 10% annual
depreciation over the previous year's rate for 2024-2027; low
weight

Quantitative assumptions - Sovereign Related

Figures as per Fitch's sovereign actual for 2022 and forecast for
2025, respectively (no weights and changes since the last review
are included as none of these assumptions were material to the
rating action)

GDP per capita (US dollar, market exchange rate): 10,521; 15,244

Real GDP growth (%): 5.5; 3.4

Consumer prices (annual average % change): 72.0; 34.6

General government balance (% of GDP): -1.1; -4.8

General government debt (% of GDP): 31.7; 30.4

Current account balance plus net FDI (% of GDP): -4.5; -1.2

Net external debt (% of GDP): 15.8; 15.1

IMF Development Classification: EM

CDS Market-Implied Rating: B

Liquidity and Debt Structure

Under Fitch's conservative rating case, Fitch expects Izmir's
operating revenue to increase to about TRY62.7 billion by 2027,
from TRY14.7 billion in 2022, due to expected inflation of about
35% and real GDP growth of around 3% on average. Fitch expects
total debt to reach TRY61.2 billion in 2027, up from TRY10.7
billion in 2022, based on lira depreciation and increased
debt-funded capex investments. The operating balance will weaken to
29% of operating revenue in 2027 but remain resilient and cover
1.5x of the debt-service requirements.

Fitch expects the municipality to spend on average TRY18.3 billion
annually on investments for the next five years, focused primarily
on ongoing 19.3km metro line construction as well as the nearly
completed 11km Cigli tram line extension and 7.2km Fahrettin
Altay-Narlidere metro line, followed by regular transportation
infrastructure, and construction and rehabilitation of social and
cultural facilities. Fitch expects capex to account on average for
38% of total expenditure in the rating case, which Fitch expects to
be funded via a mix of borrowing (mainly foreign-currency funding)
and operating cash flow.

Izmir's contingent liabilities are moderate and mainly comprise the
liabilities of its water affiliate, IZSU (TRY1.6 billion) followed
by its railway company, IZBAN (TRY1.3 billion), which it jointly
owns with Turkish State Railways.

IZSU is self-funding and has a well-structured balance sheet. In
2022, IZSU sustained its robust operating performance underpinned
by its robust debt service coverage of 2.1x in 2022.

Issuer Profile

Izmir is the third-largest city in Turkiye with a population of
nearly 4.5 million accounting for 5.2% of the national population.
Izmir has a well-diversified and buoyant local economy dominated by
the services sector (55%), followed by industry (41%) and
agriculture (4%). At end 2021, Izmir's GDP per capita was
TRY104,791, contributing on average 6.2% of the nation's economic
output.

Fitch classifies Izmir as a 'Type B' local and regional government,
meaning it is required to cover debt service from its own cash
flows on an annual basis.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

A downgrade of the Turkish sovereign's IDRs or a downward revision
of Izmir's SCP resulting from a weaker debt payback of more than
nine years on a sustained basis would lead to a downgrade of
Izmir's IDRs.

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

An upgrade of the Turkish sovereign IDRs would lead to an upgrade
of Izmir's IDRs, provided that Izmir maintains its debt payback
ratio below 5x under Fitch's rating case.

ESG CONSIDERATIONS

The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.

DISCUSSION NOTE

Committee date: 25 September 2023

There was an appropriate quorum at the committee and the members
confirmed that they were free from recusal. It was agreed that the
data was sufficiently robust relative to its materiality. During
the committee no material issues were raised that were not in the
original committee package. The main rating factors under the
relevant criteria were discussed by the committee members. The
rating decision as discussed in this rating action commentary
reflects the committee discussion.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Izmir's IDRs are capped by the Turkish sovereign IDRs.

   Entity/Debt         Rating                  Prior
   -----------         ------                  -----
Izmir Metropolitan Municipality

         LT IDR         B          Affirmed       B
         ST IDR         B          New Rating
         LC LT IDR      B          Affirmed       B
         LC ST IDR      B          New Rating
         Natl LT        AAA(tur)   Affirmed       AAA(tur)


KONYA METROPOLITAN: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has revised the Outlook on Konya Metropolitan
Municipality's Long-Term Foreign- and Local-Currency Issuer Default
Ratings to Stable from Negative and affirmed the IDRs at 'B'. Fitch
has also downgraded Konya's National Long-Term Rating to 'AA(tur)'
from 'AA+(tur)'. The Outlook is Stable.

The ratings reflect Fitch's view that Konya's operating performance
will remain resilient, despite the highly inflationary operating
environment. This is due to Konya's vibrant tax revenue base,
largely dominated by the industrial and services sector, leading to
debt metrics that despite weakening remain commensurate with a 'b+'
Standalone Credit Profile (SCP) and 'b' category peers over the
rating case. Konya's IDRs are capped by Turkiye's 'B' IDRs. The
revision of the Outlook follows the similar action on Turkiye's
sovereign ratings (see 'Fitch Revises Turkiye's Outlook to Stable,
Affirms at 'B' dated 8 September 2023).

The downgrade of Konya's National Long-Term Rating reflects weaker
debt metrics compared with its national peers as well as its
mid-size budget. Fitch expects a significant increase in
debt-funded capex under its conservative rating case to weaken
Konya's debt sustainability metrics, leading to a debt payback
ratio slightly below 5.0x and an actual debt service coverage
(ADSCR) below 1.0x. The National Long-Term rating also factors in
Konya's additional budgetary flexibility resulting from its capital
revenue generation capacity.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

The 'Vulnerable' risk profile reflects four 'Weaker' key risk
factors (revenue adjustability, expenditure sustainability and
liabilities and liquidity robustness and flexibility) and two
'Midrange' factors (revenue robustness and expenditure
adjustability). This reflects a very high risk that Konya's ability
to cover debt service with its operating balance may weaken
unexpectedly over the scenario horizon (2023-2027) due to lower
revenue, higher expenditure or an unexpected rise in liabilities or
debt-service requirements.

Revenue Robustness: 'Midrange'

The revision of the assessment to 'Midrange' from 'Weaker' is based
on comparison with national and international peers and reflects
Fitch's expectations that Konya's dynamic and well-diversified
local economy will lead to tax revenue growth prospects slightly
above the national nominal GDP growth. Taxes represent about
two-thirds of Konya's operating revenue. Under its conservative
rating case, Fitch expects operating revenue to grow above the
expected national nominal GDP CAGR of around 34% to TRY23.5 billion
in 2027.

Konya's efforts to develop new Organizational Industrial Zone will
further support economic growth prospects by attracting new
businesses and investments, especially from neighbouring regions.
This in turn will support the sector's employment, boosting
personal and corporate income tax and VAT, as evidenced by Konya's
higher-than-average growth of its tax revenues during 2023. This is
further underpinned by its relatively lower unemployment rate at
7.4% in 2022 versus national average of 10.4%.

Land sales within industrial zones will also help Konya generate
substantial capital revenues over the medium-term. Fitch expects
the capital revenues to account for 25% of its total revenues in
2023-2027 significantly higher than its national peers, creating
additional budgetary flexibility for Konya.

Revenue Adjustability: 'Weaker'

Turkish metropolitan municipalities' ability to generate additional
tax revenue is very limited, as tax rates are set by the central
government. This significantly limits the municipality's
flexibility in adjusting taxes. At end-2022, nationally collected
tax revenue over which Konya has no tax-setting power comprised 67%
of operating revenue or 47% of total revenues. Local taxes, for
which Konya has rate-setting power, represented a negligible 0.1%
of total revenue, underlining its near absence of tax revenue
generation ability.

The high inflexibility of tax-setting powers is compensated to some
extent by financial-equalisation transfers as part of the current
transfers received by the metropolitan municipalities, and
flexibility on asset sales. For Konya, this accounted for 16% and
30% of its total revenue, respectively, in 2022.

Expenditure Sustainability: 'Weaker'

Konya has mostly moderately cyclical and counter-cyclical
responsibilities, which normally allows Konya to control total
expenditure growth. Konya has a moderate record of keeping
operating expenditure growth at 2% below operating revenue growth
in 2018-2022, leading to operating margins of 38.5% on average.
However, the high inflationary operating environment fuelled by
further lira depreciation will push costs higher and weaken control
over total expenditure growth.

Fitch expects Konya's opex to remain high in 2023-2024, beyond
inflationary adjustments, mainly due to management's above
inflation increase of consolidated staff salaries. The metropolitan
municipality is expected to increase capital investments ahead of
the local elections in March 2024, focusing on regular
infrastructure projects such as road construction, restoration of
buildings, urban landscaping projects as well as land development
projects.

This will result in large deficits before financing on average at
close to 13% of total revenue for 2023-2027, up from 1.4% in
2018-2022 and will significantly increase its borrowings. This was
underlined in 2022's financial results as Konya's operating margin
weakened to 25.4% from 35.7% in 2021.

Expenditure Adjustability: 'Midrange'

Konya has a low share of inflexible costs compared with
international peers, on average at less than 60% of total
expenditure. Konya can cut or postpone infrastructure investments,
aided by its fairly well-developed socio-economic infrastructure.

Its spending flexibility is counterbalanced by a weak record of
balanced budgets, due to large swings in capex during pre-election
periods. Fitch expects Konya's spending flexibility to be reduced
in the run-up to local elections in March 2024 and to be restored
gradually thereafter. Konya's capex should remain at about 38% of
total spending in line with 2018-2022.

Liabilities & Liquidity Robustness: 'Weaker'

Konya is exposed to considerable FX risk with nearly 46% of its
total debt in euros and unhedged. By end-2023, Fitch expects FX
volatility to result in a roughly 11% increase in its debt stock.
It is also exposed to interest-rate risk as the majority of its
bank loans are at floating rates. Additionally, the weighted
average life of its total debt is 2.3 years, which results in
refinancing pressure as nearly 34% of its debt is due in 2023.
These risks are partly offset by the amortising nature of its bank
loans and additionally budgetary flexibility resulting from its
stronger capital revenue generation capacity expected over the
medium term.

Liabilities & Liquidity Flexibility: 'Weaker'

The 'Weaker' assessment reflects Konya's weak unrestricted cash
reserves at around TRY35 million in 2022 and the counterparty risk
of its domestic liquidity lines from lenders rated below 'BBB-',
with shorter tenors. Konya has good access to national lenders but
access to international lenders is nascent.

Turkish local and regional governments (LRG) do not benefit from
treasury lines or national cash-pooling, making it challenging to
fund unexpected increases in debt liabilities or spending peaks.

Debt Sustainability: 'aa category'

Under Fitch's rating case for 2023-2027, Konya's operating balance
will increase to around TRY4.1 billion, from nearly TRY1.2 billion
in 2022, with direct debt up at TRY18.7 billion from TRY4.2 billion
in 2022. This will result in a payback ratio (net Fitch-adjusted
debt/operating balance; the primary debt sustainability metric for
Type B LRGs) remaining slightly below 5x, in line with a 'aaa'
assessment.

For secondary metrics, Fitch's rating case projects that ADSCR to
weaken below 1.0x on a sustained basis in 2023-2027, from 1.4x in
2022, corresponding to a 'b' assessment, due to expected lira
depreciation and large debt-funded budgeted capex. The fiscal debt
burden will remain below 100%, corresponding to a 'aa' assessment.
The weaker secondary metrics offset the debt payback ratio to
result in an overall debt sustainability assessment of 'aa'.

DERIVATION SUMMARY

Fitch assesses Konya's SCP at 'b+', which reflects a 'Vulnerable'
risk profile and an 'aa' debt sustainability score. The 'b+' SCP
also factors in Konya's comparison with national and international
peers in the same rating category. Konya's IDRs are not affected by
any other rating factors but are capped by the Turkish sovereign
IDRs.

Short-Term Ratings

The 'B' Short- Term IDR is the only option mapping to a 'B'
Long-Term IDR.

National Ratings

Konya's National Ratings are driven by its Long-Term Local-Currency
IDR at 'B', which maps to 'AA(tur)' on the Turkish National Rating
Correspondence Table based on a peer comparison.

The downgrade of its National Long-Term rating reflects its weaker
debt metrics compared with its national peers and its mid-size
budget. The National Long-Term Rating at 'AA(tur)` also factors in
additional budgetary flexibility derived from its capital revenue
generation capacity positioning Konya above that of some other
local issuers in Turkiye.

KEY ASSUMPTIONS

Qualitative Assumptions:

Risk Profile: 'Vulnerable, Unchanged with Low weight'

Revenue Robustness: 'Midrange, Raised with Medium weight'

Revenue Adjustability: 'Weaker, Unchanged with Low weight'

Expenditure Sustainability: 'Weaker, Unchanged with Low weight'

Expenditure Adjustability: 'Midrange, Unchanged with Low weight'

Liabilities and Liquidity Robustness: 'Weaker, Unchanged with Low
weight'

Liabilities and Liquidity Flexibility: 'Weaker, Unchanged with Low
weight'

Debt sustainability: 'aa, Unchanged with Low weight'

Support (Budget Loans): 'N/A, Unchanged with Low weight'

Support (Ad Hoc): 'N/A, Unchanged with Low weight'

Asymmetric Risk: 'N/A, Unchanged with Low weight'

Rating Cap (LT IDR): 'B, Raised with High weight'

Rating Cap (LT LC IDR) 'B, Raised with High weight'

Rating Floor: 'N/A, Unchanged with Low weight'

Quantitative assumptions - Issuer Specific

Fitch's rating case is a "through-the-cycle" scenario, which
incorporates a combination of revenue, cost and financial risk
stresses. It is based on 2018-2022 figures and 2023-2027 projected
ratios. The key assumptions for the scenario include:

- Operating revenue CAGR of 36.8% (versus an average of 30.7% yoy
for 2018-2022) due to expected inflation of about 35% on average,
low weight

- Tax revenue CAGR of 37.7%, versus 34.9% CAGR in 2018-2022; low
weight

- Current transfer CAGR of 37.5%, versus 30.8% CAGR in 2018-2022;
low weight

- Operating expenses CAGR of 39.6% (versus an average of 29.0% yoy
for 2018-2022) due to expected inflation of about 35% on average;
low weight

- Negative net capital balance of TRY3.5 billion in 2023-2027; low
weight

- Apparent cost of debt on average at 14%, 5% above the level of
2022 due to higher borrowing rates; low weight

- Turkish lira at 28.8 to the euro at end-2023, with 10% annual
depreciation over the previous year's rate for 2024-2027; low
weight

Quantitative assumptions - Sovereign Related

Figures as per Fitch's sovereign actual for 2022 and forecast for
2025, respectively (no weights and changes since the last review
are included as none of these assumptions were material to the
rating action)

GDP per capita (US dollar, market exchange rate): 10,521; 15,244

Real GDP growth (%): 5.5; 3.4

Consumer prices (annual average % change): 72.0; 34.6

General government balance (% of GDP): -1.1; -4.8

General government debt (% of GDP): 31.7; 30.4

Current account balance plus net FDI (% of GDP): -4.5; -1.2

Net external debt (% of GDP): 15.8; 15.1

IMF Development Classification: EM

CDS Market-Implied Rating: B

Liquidity and Debt Structure

At end-2022, Konya's direct debt had increased to TRY4.2 billion
from TRY2.3 billion in 2021. Its unrestricted cash remained weak at
TRY35 million, down from TRY173 million in 2021, leading to net
adjusted debt of TRY4.1billion.

The operating balance, which was adjusted upwards by nearly TRY725
million post re-allocation of spending items between one-off
operating costs and spending for investments, was around TRY1.2
billion, representing 25% of operating revenue, leading to a robust
payback ratio of 3.3x in 2022.

Under Fitch's conservative rating case, the agency expects Konya's
operating revenue to increase to about TRY23.5 billion in 2027
underpinned by expected local nominal GDP CAGR of 37%. Fitch
expects Konya's debt to increase substantially to TRY 18.7 billion
by 2027, due to its large capital investment plans of around
TRY8.4billion annually.

The payback ratio will remain robust, averaging 4.9x in 2023-2027,
despite the operating balance declining to around 17% of operating
revenue in 2023-2027 versus 39% in 2018-2022. Fitch expects
capex-induced debt and higher borrowing rates associated with new
debt to weaken debt service coverage below 1.0x. This is partially
counterbalanced by Konya's proven access to national lenders and as
well as on average TRY4.9 billion capital revenues expected
annually in 2023-2027.

Konya is not exposed to material off-balance sheet risk. Contingent
liabilities are moderate and are largely stemming from its water
affiliate, KOSKI, which is self-financing. The company has a solid
payback ratio at a low 1.7x and ADSCR of 2.4x.

Issuer Profile

Konya has a population of around 2.3 million accounting for 2.7% of
the national population. Konya benefits from a diversified local
economy dominated by the services sector (35%) and industry (34%),
followed by agriculture (18%) and public administration, education,
human health and social work activities (13%). The city also has
the highest contribution to national agricultural production with
5.9% share. With GDP per capita of TRY65,928, Konya accounts for
77% of the national average and contributes to 2.1% of the national
GDP.

Fitch classifies Konya as a 'Type B' LRG, meaning it is required to
cover debt service from its own cash flows on an annual basis.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

A downgrade of the Turkish sovereign IDRs or a downward revision of
Konya's SCP, resulting from a debt payback of more than 9x on a
sustained basis, would lead to a downgrade of Konya's IDRs.

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

An upgrade of the Turkish sovereign IDRs would lead to an upgrade
of Konya's IDRs, provided that Konya maintains its debt payback
ratio below 5x under Fitch's rating case.

ESG CONSIDERATIONS

The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.

DISCUSSION NOTE

Committee date: 25 September 2023

There was an appropriate quorum at the committee and the members
confirmed that they were free from recusal. It was agreed that the
data was sufficiently robust relative to its materiality. During
the committee no material issues were raised that were not in the
original committee package. The main rating factors under the
relevant criteria were discussed by the committee members. The
rating decision as discussed in this rating action commentary
reflects the committee discussion.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Konya's IDRs are capped by the Turkish sovereign IDRs

   Entity/Debt               Rating               Prior
   -----------               ------               -----
Konya Metropolitan Municipality

         LT IDR             B         Affirmed     B
         ST IDR             B         Affirmed     B
         LC LT IDR          B         Affirmed     B
         Natl LT            AA(tur)   Downgrade    AA+(tur)


MANISA METROPOLITAN: Fitch Alters Outlook on 'B' IDRs to Stable
---------------------------------------------------------------
Fitch Ratings has revised the Outlook on Manisa Metropolitan
Municipality's Long-Term Foreign- and Local-Currency Issuer Default
Ratings (IDR) to Stable from Negative and affirmed the IDRs at
'B'.

Fitch has also revised Manisa's Standalone Credit Profile (SCP) to
'bb+' from 'bb-', and upgraded its National Long-Term Rating to
'AA+(tur)' from 'AA(tur)'. The Outlook is Stable. Fitch has
assigned Manisa Short-Term Foreign- and Local-Currency IDRs of 'B'.


The revision of the Outlook follows the similar action on Turkiye's
sovereign ratings (see 'Fitch Revises Turkiye's Outlook to Stable,
Affirms at 'B' dated 8 September 2023).

The ratings reflect Fitch's view that Manisa's operating
performance will remain resilient, despite the highly inflationary
operating environment. This is due to Manisa's buoyant and
diversified tax revenue base, built on a well-developed local
manufacturing industry with a particularly strong consumer
electronics and white goods sector generating the majority of the
city's exports. This will support robust coverage of Manisa's
moderate debt levels by its operating balance, leading to improved
debt metrics that are commensurate with the 'bb+' category SCP.
Manisa's IDRs are capped by Turkiye's 'B' IDRs.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

The assessment reflects Fitch's view of a very high risk that
Manisa's ability to cover debt service with its operating balance
may weaken unexpectedly over the rating case (2023-2027). This may
be due to lower-than-expected revenue, higher-than-expected
expenditure, or an unanticipated rise in liabilities or
debt-service requirements.

Revenue Robustness: 'Midrange'

The 'Midrange' assessment factors in Manisa's dynamic tax base and
its industrialised local economy. Its tax-revenue structure is less
volatile and robust tax revenue growth prospects are broadly in
line with the expected national nominal GDP CAGR of 34% in
2023-2027. The latter is also evidenced by a local nominal GDP CAGR
of 24.6% in 2018-2021, slightly above the CAGR of national nominal
GDP at 23.3%.

Taxes represent about 67% of operating revenue and their growth
should drive operating revenue towards TRY10.9 billion by 2027 from
TRY2.6 billion in 2022, even under Fitch's conservative rating
case.

Revenue Adjustability: 'Weaker'

Manisa's ability to generate additional revenue is constrained by
nationally pre-defined tax rates. At end-2022, nationally set and
collected taxes comprised 67% of Manisa's operating revenue. Local
taxes, over which Manisa has tax autonomy, were a low 0.4% of total
revenue, implying negligible tax flexibility. However, this is
compensated to some extent by financial equalisation transfers
received by metropolitan municipalities, which account for 25% of
Manisa's total revenue.

Non-tax revenue, such as charges and fees, make up around 8% of
total revenues. However, Manisa does not have full discretion on
non-tax revenue such as charges, rental income and fees levied on
public services, as these are limited by central government.

Expenditure Sustainability: 'Weaker'

Fitch expects high inflation will weaken control of total
expenditure, reversing Manisa's trend of spending growth lagging
revenue growth in 2018-2022 due to its moderately cyclical and
counter-cyclical spending responsibilities. Rising fuel prices are
also expected to pressure Manisa's operating spending as this will
increase transportation sector subsidies. Fitch expects that
operating expenditure growth will outpace operating revenue growth
by around 8%.

Expected investment spending of an average 41% of total spending in
the run-up to local elections in March 2024 will further constrain
Manisa's ability to curb spending.

Expenditure Adjustability: 'Midrange'

The assessment reflects Manisa's low share of inflexible costs
compared with international peers at around 55% of total spending.
The remainder of its spending is capex, which can be cut and
postponed due to the reasonable level of existing infrastructure.

Spending flexibility is counterbalanced by Manisa's weak record of
balanced budgets due to large swings in capex in pre-election
periods, although this improved to a surplus of 9% in 2022, from a
deficit before financing of 52% in 2018. Fitch expects Manisa's
spending flexibility to be reduced in the run-up to local
elections, and gradually restored thereafter.

Liabilities & Liquidity Robustness: 'Weaker'

Compared with national peers, Manisa has limited unhedged
foreign-exchange (FX) risk with a euro-denominated loan accounting
for only 7.7% of its total debt. All of its loans are at fixed
interest rates except its FX loan.

The assessment factors in the short weighted average life of debt
at two years and that around 40% of it is due within 2023. Partly
offsetting these risks are a robust actual debt service coverage
ratio (ADSCR) at 2.9x in 2022, the amortising nature of the bank
loans and relatively low indebtedness, underpinned by strong
payback at 0.6x in 2022.

Liabilities & Liquidity Flexibility: 'Weaker'

The 'Weaker' assessment reflects Manisa's weak unrestricted cash
reserves, calculated net of receivable minus payables, which cover
only 0.1x of its annual debt service. It also reflects the
counterparty risk of its domestic liquidity lines from lenders
rated below 'BBB-' and short loan tenors.

Turkish local and regional governments do not benefit from treasury
lines or national cash pooling, making it challenging to fund
unexpected increases in debt liabilities or spending peaks.

Debt Sustainability: 'aaa category'

Under Fitch's rating case for 2023-2027, Manisa's operating balance
will be about TRY3.3 billion with direct debt totaling TRY6.5
billion in 2027, leading to a debt payback ratio (net adjusted
debt/operating balance) of below 5x, in line with a 'aaa'
assessment. Fitch's rating case projects that Manisa's ADSCR will
deteriorate to 2.0x in 2027 from 2.9x in 2022 (or 3.1x on average
over the rating case), but still remain solid, corresponding to a
'aa' category. The assessment is further supported by a low fiscal
debt burden (net adjusted debt/operating revenue) at 59% in 2027
(albeit up from 29% in 2022) corresponding to the 'aa' category.

DERIVATION SUMMARY

Manisa's 'bb+' SCP reflects a 'Vulnerable' risk profile and 'aaa'
debt sustainability. The latter is derived from a payback ratio in
the 'aaa' category, a solid ADSCR and a low fiscal debt burden,
both in the 'aa' category. The SCP also factors in Manisa's
favourable comparison with its national and international peers in
the same rating category, underpinned by its relatively strong
payback ratio at the lower end of the 'aaa' band and strong debt
service coverage under Fitch's rating case.

Short-Term Ratings

The 'B' Short-Term IDR is the only option for a 'B' Long-Term IDR.

National Ratings

Manisa's National Ratings are driven by its Long-Term
Local-Currency IDR at 'B', which maps to 'AA+(tur)' on the Turkish
National Rating Correspondence Table based on a peer comparison.

The upgrade of the National Long-Term rating reflects Manisa's
resilient operating performance and improved budgetary flexibility
to service its long-term local currency obligations, compared with
that of some other local issuers in Turkiye.

KEY ASSUMPTIONS

Qualitative Assumptions:

Risk Profile: 'Vulnerable, Unchanged with Low weight'

Revenue Robustness: 'Midrange, Unchanged with Low weight'

Revenue Adjustability: 'Weaker, Unchanged with Low weight'

Expenditure Sustainability: 'Weaker, Unchanged with Low weight'

Expenditure Adjustability: 'Midrange, Unchanged with Low weight'

Liabilities and Liquidity Robustness: 'Weaker, Unchanged with Low
weight'

Liabilities and Liquidity Flexibility: 'Weaker, Unchanged with Low
weight'

Debt sustainability: 'aaa, Unchanged with Low weight'

Support (Budget Loans): 'N/A, Unchanged with Low weight'

Support (Ad Hoc): 'N/A, Unchanged with Low weight'

Asymmetric Risk: 'N/A, Unchanged with Low weight'

Rating Cap (LT IDR): 'B, Raised with High weight'

Rating Cap (LT LC IDR) 'B, Raised with High weight'

Rating Floor: 'N/A, Unchanged with Low weight'

Quantitative assumptions - Issuer Specific

Fitch's rating case is a "through-the-cycle" scenario, which
incorporates a combination of revenue, cost and financial risk
stresses. It is based on 2018-2022 figures and 2023-2027 projected
ratios. The key assumptions for the scenario include:

- Operating revenue CAGR of 33% (versus an average of 30% yoy for
2018-2022) due to expected inflation of about 35% on average, low
weight

- Tax revenue CAGR of 33.2%, versus 35.6% CAGR in 2018-2022; low
weight

- Current transfer CAGR of 34.1%, versus 30.8% CAGR in 2018-2022;
low weight

- Operating expenses CAGR of 40.7% (versus an average of 26.4% yoy
for 2018-2022) due to expected inflation of about 35% on average;
low weight

- Negative net capital balance of TRY3.2 billion; low weight

- Apparent cost of debt on average at 17%, around 5% above the
level in 2022 due to higher borrowing rates; low weight

- Turkish lira at 28.8 to the euro at end-2023, with 10% annual
depreciation over the previous year's rate for 2024-2027; low
weight

Quantitative assumptions - Sovereign Related

Figures as per Fitch's sovereign actual for 2022 and forecast for
2025, respectively (no weights and changes since the last review
are included as none of these assumptions were material to the
rating action)

GDP per capita (US dollar, market exchange rate): 10,521; 15,244

Real GDP growth (%): 5.5; 3.4

Consumer prices (annual average % change): 72.0; 34.6

General government balance (% of GDP): -1.1; -4.8

General government debt (% of GDP): 31.7; 30.4

Current account balance plus net FDI (% of GDP): -4.5; -1.2

Net external debt (% of GDP): 15.8; 15.1

IMF Development Classification: EM

CDS Market-Implied Rating: B

Liquidity and Debt Structure

Net adjusted debt (TRY752 million at-end 2022) includes Manisa's
short-term debt (TRY338 million) and long-term debt (TRY467
million). Net-adjusted debt corresponds to the difference between
adjusted debt and Manisa's year-end available cash viewed as
unrestricted by Fitch (TRY53 million at end-2022). Manisa's
unrestricted cash is adjusted by the amount that is earmarked to
offset payables, which Fitch deems as restricted.

Fitch expects Manisa to spend TRY3.3 billion on average annually on
investments for the next five years, focused on basic
infrastructure investments, mainly for road construction and
surface treatment. Fitch expects capex to average 38% of total
expenditure in the forecast period, with capex funded via mix of
new local-currency borrowing or Manisa's own funds. Under its
conservative rating case, Fitch expects Manisa's healthy operating
balance of around TRY2.5 billion in 2023-2027 (2022: TRY1.2
billion) to cover on average 3x of its annual debt service
obligations within the same period.

Manisa is not exposed to material off-balance sheet risk.
Contingent liabilities are moderate and are solely stemming from
its water affiliate, MASKI, which is self-financing. Although
MASKI's borrowing will continue to increase due to its new
investments, Fitch expects the company to service its debt via its
own cash flow.

Issuer Profile

Manisa has a population of nearly 1.5 million accounting for 1.7%
of Turkiye's total population. It is the second-largest industry
and trade hub in the Aegean region. Manisa's GDP per capita in 2021
was broadly in line with the national average, with the gap
narrowing to 2% in 2021 from 5% in 2019. Manisa's proximity to the
international port city, Izmir, further supports its local economic
development.

Fitch classifies Manisa as a Type B local and regional government,
meaning it is required to cover debt service from its own cash
flows annually.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

A downgrade of the Turkish sovereign IDRs or a downward revision of
Manisa's SCP resulting from a debt payback of more than nine years
on a sustained basis would lead to a downgrade of Manisa's IDRs.

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

An upgrade of the Turkish sovereign IDRs would lead to an upgrade
of Manisa's IDRs, provided that Manisa maintains its debt payback
ratio below 5x under Fitch's rating case.

ESG CONSIDERATIONS

The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.

DISCUSSION NOTE

Committee date: 25 September 2023

There was an appropriate quorum at the committee and the members
confirmed that they were free from recusal. It was agreed that the
data was sufficiently robust relative to its materiality. During
the committee no material issues were raised that were not in the
original committee package. The main rating factors under the
relevant criteria were discussed by the committee members. The
rating decision as discussed in this rating action commentary
reflects the committee discussion.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Manisa's ratings are capped by the Turkish sovereign IDRs.

   Entity/Debt                 Rating                  Prior
   -----------                 ------                  -----
Manisa Metropolitan
Municipality          LT IDR      B         Affirmed     B
                      ST IDR      B         New Rating
                      LC LT IDR   B         Affirmed     B
                      LC ST IDR   B         New Rating
                      Natl LT     AA+(tur)  Upgrade      AA(tur)


MERSIN METROPOLITAN: Fitch Alters Outlook on 'B' IDRs to Stable
---------------------------------------------------------------
Fitch Ratings has revised the Outlook on Mersin Metropolitan
Municipality's Long-Term Foreign- and Local-Currency Issuer Default
Ratings to Stable from Negative and affirmed the IDRs at 'B'.

The revision of the Outlook follows the similar action on Turkiye's
sovereign ratings (see 'Fitch Revises Turkiye's Outlook to Stable,
Affirms at 'B' dated September 8, 2023).

The ratings reflect Fitch's unchanged view that Mersin will
maintain a robust operating balance despite high inflation. The
debt metrics will remain commensurate the city's 'b+' Standalone
Credit Profile (SCP) and 'b' category SCP peers in the medium term,
although debt will rise due to expected investments and further
lira depreciation. Mersin's IDRs are capped by Turkiye's 'B' IDRs.

KEY RATING DRIVERS

Risk Profile: 'Vulnerable'

The risk profile reflects four 'Weaker' key risk factors (revenue
adjustability, expenditure sustainability and liabilities and
liquidity robustness and flexibility) and two 'Midrange' factors
(revenue robustness and expenditure adjustability). This reflects a
very high risk that Mersin's ability to cover debt service with its
operating balance may weaken unexpectedly over the scenario horizon
(2023-2027), due to lower revenue, higher expenditure or an
unexpected rise in liabilities or debt-service requirements.

Revenue Robustness: 'Midrange'

Mersin's tax revenue base is supported by its trade- and
manufacturing-driven local economy, which leads to sound tax
revenue, comprising 70 % of operating revenue on average in
2018-2022. Fitch expects tax revenues to rise to TRY18.6 billion in
2027 from TRY3.7 billion in 2021. Transfers from the central
government and charges and fees accounted for an average 20% and
10%, respectively, in 2018-2022.

Its assessment reflects expected tax revenue growth, mainly driven
by international trade growing above the expected CAGR of national
nominal GDP at 34%. This follows a resilient operating performance
over the past five years. Between 2018 and 2022, Mersin's tax
revenue CAGR of 39% surpassed the national nominal GDP CAGR of
37%.

Revenue Adjustability: 'Weaker'

Mersin's ability to generate additional revenue is constrained by
nationally pre-defined tax rates. At end-2022, nationally set and
collected taxes comprised 73% of Mersin's total revenue; over which
Mersin has no tax rate-setting power. Local taxes, over which
Mersin has tax rate-setting power, were only 0.3% of total revenue,
implying negligible tax flexibility. This is compensated to an
extent by financial equalisation transfers received by metropolitan
municipalities, which accounted for around 17% of Mersin's total
revenue.

Expenditure Sustainability: 'Weaker'

Mersin's main responsibilities are urban infrastructure investment
and development, improvement of public transportation systems, and
road construction. These are moderately countercyclical expenditure
items, providing Mersin with control over expenditure growth.
Mersin has maintained its operating expenditure growth 6% below
operating revenue growth for the past five years, leading to
average operating margins of 44%.

However, Fitch expects the high inflationary environment to weaken
Mersin's control over expenditure. Fitch expects it to increase
capital investments ahead of the local elections in March, 2024,
with a particular focus on metro line investments.

Expenditure Adjustability: 'Midrange'

Mersin has a low share of inflexible costs compared with
international peers, at less than 70% on average of total
expenditure. Mersin can cut or postpone infrastructure investments,
aided by its fairly well-developed socioeconomic infrastructure.

Spending flexibility is counterbalanced by a weak record of
balanced budgets, due to large swings in capex during pre-election
periods. Fitch expects Mersin's spending flexibility to be reduced
in the run-up to local elections in March 2024 and to be gradually
restored thereafter. Mersin's capex should remain about 34% of
total spending during the rating case versus 28% in 2018-2022,
driven by its investment agenda primarily focusing on metro line
constructions.

Liabilities & Liquidity Robustness: 'Weaker'

Nearly 22% of Mersin's debt was foreign-currency denominated and
unhedged at end-2022, exposing it to moderate foreign exchange (FX)
risk. Fitch expects the share of FX debt to increase to around 65%
under its conservative rating case, driven by its ongoing metro
line investment to be funded by new FX borrowing.

Mersin's debt has a fairly short weighted average life at 2.7 years
and about 35% matures within one year, increasing refinancing risk.
This is mitigated by the actual debt service coverage ratio
(ADSCR), which will remain at least 1.1x under Fitch's rating case,
and the fully amortising nature of bank loans. Interest-rate risk
is mitigated as the majority of Mersin's bank loans were at fixed
rates as of end-2022. Fitch expects new FX loans to extend the
average maturities of its existing debt stock.

Liabilities & Liquidity Flexibility: 'Weaker'

Mersin's year-end cash was fully restricted for the settlement of
payables at end-2022. It has a moderately good record of accessing
international and national lenders. The former has a short history
and the latter is limited by the counterparty risk associated with
domestic liquidity lines below 'BBB-' with shorter tenors.

Turkish local and regional governments do not benefit from treasury
lines or national cash-pooling, making it challenging to fund
unexpected increases in debt liabilities or spending peaks.

Debt Sustainability: 'aa category'

Under its conservative rating case for 2023-2027, Fitch projects
that Mersin's debt will rise to TRY23.5 billion, mainly due to the
ongoing metro line investment to be implemented over the scenario
horizon, on top of basic infrastructure investments such as road
construction and urban landscaping projects. Fitch expects the
operating balance to reach TRY4.9 billion, leading to a payback
ratio (net adjusted debt to operating balance; the primary metric
of the debt sustainability assessment) to remain just below 5x, in
line with a 'aaa' assessment.

For the secondary metrics, Fitch's rating case projects the ADSCR
to weaken to 1.1x from 5.5x in 2022, corresponding to a 'bb'
assessment and the fiscal debt burden (net adjusted debt to
operating revenue) to increase but remain slightly above 100%,
corresponding to a 'a' assessment. Due to the primary metric being
at the lower end of a 'aaa' debt sustainability assessment and the
weaker actual DSCR, Fitch has adjusted Mersin's debt sustainability
assessment down to 'aa'.

DERIVATION SUMMARY

Fitch assesses Mersin's SCP at 'b+', which reflects a 'Vulnerable'
risk profile and a 'aa' debt sustainability score. The 'b+' SCP
also factors in Mersin's comparison with national and international
peers in the same rating category. Mersin's IDRs are not affected
by any other rating factors but are capped by the Turkish sovereign
IDRs.

Short-Term Ratings

The 'B' Short-Term IDR is the only option for a 'B' category
Long-Term IDR.

National Ratings

Mersin's National Long-Term Ratings are driven by its 'B' Long-Term
Local-Currency IDR, which maps to 'AA-' on the Turkish National
Correspondence Table based on a peer comparison. This reflects its
relative vulnerability to default on its long-term local-currency
obligations, which is fairly low compared with some local issuers
in Turkiye.

KEY ASSUMPTIONS

Qualitative Assumptions:

Risk Profile: 'Vulnerable, Unchanged with Low weight'

Revenue Robustness: 'Midrange, Unchanged with Low weight'

Revenue Adjustability: 'Weaker, Unchanged with Low weight'

Expenditure Sustainability: 'Weaker, Unchanged with Low weight'

Expenditure Adjustability: 'Midrange, Unchanged with Low weight'

Liabilities and Liquidity Robustness: 'Weaker, Unchanged with Low
weight'

Liabilities and Liquidity Flexibility: 'Weaker, Unchanged with Low
weight'

Debt sustainability: 'aa, Unchanged with Low weight'

Support (Budget Loans): 'N/A, Unchanged with Low weight'

Support (Ad Hoc): 'N/A, Unchanged with Low weight'

Asymmetric Risk: 'N/A, Unchanged with Low weight'

Rating Cap (LT IDR): 'B, Raised with High weight'

Rating Cap (LT LC IDR) 'B, Raised with High weight'

Rating Floor: 'N/A, Unchanged with Low weight'

Quantitative assumptions - Issuer Specific

Fitch's rating case is a "through-the-cycle" scenario, which
incorporates a combination of revenue, cost and financial risk
stresses. It is based on 2018-2022 figures and 2023-2027 projected
ratios. The key assumptions for the scenario include:

- Operating revenue CAGR of 36% (versus an average of 34.8% yoy for
2018-2022) due to expected inflation of about 35% on average, low
weight

- Tax revenue CAGR of 37.8%, versus 39.2% CAGR in 2018-2022; low
weight

- Current transfer CAGR of 34.3%, versus 28.7% CAGR in 2018-2022;
low weight

- Operating expenses CAGR of 40.4% (versus an average of 29.1% yoy
for 2018-2022) due to expected inflation of about 35% on average;
low weight

- Negative net capital balance of TRY6.4 billion; low weight

- Apparent cost of debt on average at 13%, unchanged on 2022 due to
expected increase in the FX loans' share in total debt stock, which
will have softer terms compared with local-currency funding
options; low weight

- Turkish lira at 28.8 to the euro at end-2023, with 10% annual
depreciation over the previous year's rate for 2024-2027; low
weight

Quantitative assumptions - Sovereign Related

Figures as per Fitch's sovereign actual for 2022 and forecast for
2025, respectively (no weights and changes since the last review
are included as none of these assumptions were material to the
rating action)

GDP per capita (US dollar, market exchange rate): 10,521; 15,244

Real GDP growth (%): 5.5; 3.4

Consumer prices (annual average % change): 72.0; 34.6

General government balance (% of GDP): -1.1; -4.8

General government debt (% of GDP): 31.7; 30.4

Current account balance plus net FDI (% of GDP): -4.5; -1.2

Net external debt (% of GDP): 15.8; 15.1

IMF Development Classification: EM

CDS Market-Implied Rating: B

Liquidity and Debt Structure

Fitch expects Mersin to spend TRY3.9 billion on average annually on
investments for the next five years, focused on the expected metro
line expansion. Mersin expects capex to account for an average 34%
of total expenditure during the forecast period. Mersin expects to
fund the capital-intensive metro investments via FX borrowing with
longer maturities.

Mersin is not exposed to material off-balance sheet risk.
Contingent liabilities are moderate and are solely stemming from
its water affiliate, MESKI, which is self-financing.

Issuer Profile

Mersin has a population of 1.9 million accounting for 2.2% of the
total population. Mersin is home to Turkiye's largest container
port Mersin is the 10th largest contributor to national GDP among
the 81 Turkish cities. Mersin's GDP per capita in 2021 was
TRY74,343, corresponding to 86% of Turkiye's TRY86,144 average. Its
local economy is dominated by trade driving the services sector
(62%), followed by industry (27%) and agriculture 12%).

Fitch classifies Mersin as a 'Type B' local and regional
government, meaning it is required to cover debt service from its
own cash flows on an annual basis.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

A downgrade of the Turkish sovereign's IDRs or a downward revision
of Mersin's SCP, resulting from debt payback of more than 9x on a
sustained basis would lead to a downgrade of Mersin's IDRs.

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

An upgrade of the Turkish sovereign IDRs would lead to an upgrade
of Mersin's IDRs, provided that Mersin maintains its debt payback
ratio below 5x according to Fitch's rating scenario.

ESG CONSIDERATIONS

The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.

DISCUSSION NOTE

Committee date: 25 September 2023

There was an appropriate quorum at the committee and the members
confirmed that they were free from recusal. It was agreed that the
data was sufficiently robust relative to its materiality. During
the committee no material issues were raised that were not in the
original committee package. The main rating factors under the
relevant criteria were discussed by the committee members. The
rating decision as discussed in this rating action commentary
reflects the committee discussion.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Mersin's IDRs are capped by the Turkish sovereign IDRs.

   Entity/Debt         Rating               Prior
   -----------         ------               -----
Mersin Metropolitan Municipality       

          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)


MUGLA METROPOLITAN: Fitch Alters Outlook on 'B' IDRs to Stable
--------------------------------------------------------------
Fitch Ratings has revised the Outlook on Mugla Metropolitan
Municipality's Long-Term Foreign- and Local-Currency Issuer Default
Ratings (IDRs) to Stable from Negative and affirmed the IDRs at
'B'. Fitch has also raised Mugla's Standalone Credit Profile (SCP)
to 'bbb' from 'bb+'.

The ratings reflect Fitch's view that Mugla will maintain a robust
operating balance despite high inflation and a substantial increase
in capex-induced debt under Fitch's conservative rating case.
Mugla's local economy will benefit from the strong recovery in
tourism, which will support strong coverage of its moderate debt by
its healthy operating balance, leading to debt metrics that are
commensurate with a 'bbb' category SCP, resulting from a 'Weaker'
risk profile and a 'aaa' debt sustainability score. Mugla's IDRs
are capped by the Turkish sovereign IDRs.

The revision of Outlook follows the similar action on Turkiye's
sovereign ratings (see 'Fitch Revises Turkiye's Outlook to Stable,
Affirms at 'B' dated 8 September 2023).

KEY RATING DRIVERS

Risk Profile: 'Weaker'

Fitch has reassessed Mugla's risk profile to 'Weaker' from
'Vulnerable', based on three 'Midrange' key rating factors (revenue
robustness, expenditure adjustability, liabilities and liquidity
robustness) and three 'Weaker' factors (revenue adjustability,
expenditure sustainability, and liabilities and liquidity
flexibility). Since its last review, Fitch has revised its revenue
robustness assessment to 'Midrange' from 'Weaker.

The assessment reflects Fitch's view that there is a high risk of
Mugla's ability to cover debt service with the operating balance
weakening unexpectedly over the scenario horizon (2023-2027), due
to lower-than-expected revenue, higher-than-expected expenditure,
or an unexpected rise in liabilities or debt-service requirements.

Revenue Robustness: 'Midrange'

The revision of the assessment to 'Midrange' from 'Weaker' is based
on comparison with national and international peers and reflects
Fitch's expectations that Mugla's local economy will benefit from
increased tourist arrivals, which have rebounded to pre-pandemic
levels of 2019. Post-pandemic growth trend is consistent with the
pre-pandemic period supporting low volatility for its tax revenue
base and operating revenue growth broadly in line with expected
national nominal GDP CAGR of around 34% over the medium term. Taxes
represent about two-thirds of Mugla's operating revenue.

This in turn will support the sector's employment, boosting
personal and corporate income tax and VAT. Fitch therefore
forecasts strong operating margins on average at 51% in 2023-2027.
This is further underpinned by the relatively low unemployment rate
at 8.6% in 2022 versus national average of 10.4% and stable tax
revenues with CAGR of 37.4% in 2018-2022, compared with CAGR of
national nominal GDP at 36.8%.

Revenue Adjustability: 'Weaker'

Mugla's ability to generate additional revenue is constrained by
nationally pre-defined tax rates. At end-2022, nationally collected
and set taxes comprised 70% of Mugla's operating revenue or 67% of
total revenue. Local taxes set by Mugla were a low 0.5% of total
revenue, implying negligible tax flexibility.

The inflexibility of tax-setting powers is compensated to some
extent by the financial equalisation transfers under the current
transfers received by the metropolitan municipalities and the
limited flexibility on charges and fees levied for public services.
For Mugla, this accounted for 22.0% and 7% of its total revenue,
respectively, in 2022. Due its strong cash position, Mugla's
interest revenues contribution was around 3% in 2022.

Expenditure Sustainability: 'Weaker'

The 'Weaker' assessment reflects Fitch's expectations that spending
growth will outpace revenue growth in its rating case, due to a
high inflationary environment fuelled by further lira depreciation.
This will reverse Mugla's trend of spending growth lagging revenue
growth in 2018-2022, driven by its moderately cyclical and
counter-cyclical spending responsibilities.

In its rating-case scenario, Fitch expects operating spending to
surpass revenue growth by around 10%. Rising fuel costs and further
lira depreciation are likely to exert additional pressure on
Mugla's operating expenditure and its investment spending, which
Fitch forecasts to rise to 54% of its total spending in the run-up
to local elections in March 2024. This will further constrain
Mugla's ability to curb spending in the inflationary environment
over the medium term.

Expenditure Adjustability: 'Midrange'

Compared with international peers, Mugla has a low share of
inflexible costs, at around 55% of its total expenditure on
average. Capex constitutes the remaining 45% of total expenditure,
and it can be reduced or postponed given the city's reasonable
level of existing infrastructure. Mugla also has a good record of
balanced budgets, as evidenced by the surpluses produced before net
financing in 2018-2022.

Fitch expects Mugla's spending flexibility to decline during
2023-2024 in the run-up to local elections in 2024, and to be
gradually restored thereafter. Mugla's capex should remain about
55% of total spending during the rating case versus 45% in
2018-2022, focusing on basic infrastructure investments, such as
road construction, electronic detection system installation as well
as solid waste management investments.

Liabilities & Liquidity Robustness: 'Midrange'

Mugla has the lowest leverage among Fitch-rated peers and has no
unhedged FX exposure. Total debt consists of Turkish
lira-denominated bank loans with floating interest rates. Mugla's
relatively short debt tenor profile, with a weighted-average life
of debt at 3.1 years at 2022 exposes it to refinancing risk, but
Fitch expects this to be offset by the strong actual debt service
coverage ratio of above 5.0x in 2023-2027, and its fully amortising
debt structure. In addition, its unrestricted cash reserves
remained sound at TRY1.2 billion at end-2022 covering around 60x of
its annual debt obligations.

As of end-2022, Mugla's contingent liabilities were mainly from
wholly-owned water affiliate, MUSKI. A large proportion of the debt
transferred from the newly-joined districts after the Local
Municipal Act in 2014 was repaid in 2022 using Mugla's operating
cash flow. Therefore, Fitch does not expect Mugla to be exposed to
material off-balance sheet risk, and the company should be able to
service remaining debt from its own budget with operating balance
covering at least 1x of its annual debt service.

Liabilities & Liquidity Flexibility: 'Weaker'

Mugla's counterparty risk associated with its domestic liquidity
providers rated below 'BBB-' and with the short tenor of its loans
limits this factor assessment to 'Weaker'. Mugla has well-developed
relationships with local banks.

Turkish local and regional governments do not benefit from treasury
lines or national cash-pooling, making it challenging to fund
unexpected increases in debt liabilities or spending peaks.

Debt Sustainability: 'aaa category'

Under Fitch's rating case for 2023-2027, Mugla's operating balance
will be about TRY4.3 billion with direct debt totalling TRY3.2
billion in 2027, leading to a debt payback ratio (net adjusted
debt/operating balance) of below 5x, corresponding to the higher
end of a 'aaa' debt sustainability (DS).

The assessment is further supported by its forecast of a sound
actual debt service coverage ratio of 5.4x in 2027 (2022: 73.5x),
corresponding to a 'aaa' DS. This is despite an expected fall in
the operating margin from an average 55% in 2018-2022 to 51% in
2023-2027. Mugla's leverage remains the lowest among its peers,
with a fiscal debt burden (net adjusted debt to operating revenue)
well below 50%, in line with a 'aaa' DS.

DERIVATION SUMMARY

Fitch has raised Mugla's SCP to 'bbb' from 'bb+', which reflects
the revised 'Weaker' risk profile assessment and an unchanged 'aaa'
DS score. The latter is derived from a payback ratio at the
stronger-end of the 'aaa' band and healthy secondary debt metrics
with coverage and low fiscal debt burden both corresponding to a
'aaa' assessment. Mugla's IDRs are not affected by any other rating
factors but are capped by the sovereign IDRs.

Short-Term Ratings

The 'B' Short-Term IDR is the only option for a 'B' category
Long-Term IDR.

National Ratings

Mugla's National Ratings are driven by its 'B' Long-Term
Local-Currency IDR, which maps to 'AAA(tur)' on the Turkish
National Correspondence Table based on national peer comparison,
which reflects lower likelihood of Mugla defaulting on its
Long-Term Local-Currency obligations.

KEY ASSUMPTIONS

Qualitative Assumptions:

Risk Profile: 'Weaker, Raised with Medium weight'

Revenue Robustness: 'Midrange, Raised with Medium weight'

Revenue Adjustability: 'Weaker, Unchanged with Low weight'

Expenditure Sustainability: 'Weaker, Unchanged with Low weight'

Expenditure Adjustability: 'Midrange, Unchanged with Low weight'

Liabilities and Liquidity Robustness: 'Midrange, Unchanged with Low
weight'

Liabilities and Liquidity Flexibility: 'Weaker, Unchanged with Low
weight'

Debt sustainability: 'aaa, Unchanged with Low weight'

Support (Budget Loans): 'N/A, Unchanged with Low weight'

Support (Ad Hoc): 'N/A, Unchanged with Low weight'

Asymmetric Risk: 'N/A, Unchanged with Low weight'

Rating Cap (LT IDR): 'B, Raised with High weight'

Rating Cap (LT LC IDR) 'B, Raised with High weight'

Rating Floor: 'N/A, Unchanged with Low weight'

Quantitative assumptions - Issuer Specific

Fitch's rating case is a "through-the-cycle" scenario, which
incorporates a combination of revenue, cost and financial risk
stresses. It is based on 2018-2022 figures and 2023-2027 projected
ratios. The key assumptions for the scenario include:

- Operating revenue CAGR of 33.1% (versus an average of 34.7% yoy
for 2018-2022) due to expected inflation of about 35% on average,
low weight

- Tax revenue CAGR of 33.7%, versus 37.4% CAGR in 2018-2022; low
weight

- Current transfer CAGR of 35.7%, versus 32.5% CAGR in 2018-2022;
low weight

- Operating expenses CAGR of 43.6% (versus an average of 23.5% yoy
for 2018-2022) due to expected inflation of about 35% on average;
low weight

- Negative net capital balance of TRY4.0 billion; low weight

- Apparent cost of debt on average at 23%, around 12% above the
level in 2022 due to higher borrowing rates and larger weight of
local currency loans expected in 2023-2027; low weight

- Turkish lira at 28.8 to the euro at end-2023, with 10% annual
depreciation over the previous year's rate for 2024-2027; low
weight

Quantitative assumptions - Sovereign Related

Figures as per Fitch's sovereign actual for 2022 and forecast for
2025, respectively (no weights and changes since the last review
are included as none of these assumptions were material to the
rating action)

GDP per capita (US dollar, market exchange rate): 10,521; 15,244

Real GDP growth (%): 5.5; 3.4

Consumer prices (annual average % change): 72.0; 34.6

General government balance (% of GDP): -1.1; -4.8

General government debt (% of GDP): 31.7; 30.4

Current account balance plus net FDI (% of GDP): -4.5; -1.2

Net external debt (% of GDP): 15.8; 15.1

IMF Development Classification: EM

CDS Market-Implied Rating: B

Liquidity and Debt Structure

Mugla's total debt remained very low at TRY18 million in 2022, down
from TRY34 million in 2021, and its unrestricted cash increased to
TRY1.2 billion from TRY533 million in 2021, leading to net adjusted
debt of negative TRY1.1 billion (or net cash positive).

The operating balance was nearly TRY1.4 billion, representing 64%
of operating revenue leading to a sound payback ratio of -0.8x in
2022. This means that Mugla's very low level of debt can be covered
by its operating cash flow generated in less than a year.

Fitch expects the municipality to spend TRY4.0 billion on average
annually on investments in the next five years. The investments
will be mainly for basic transportation infrastructure, road
construction, urban landscaping projects involving construction of
parks, and construction and environmental infrastructure, such as
solid waste management projects. Under Fitch's rating case, capex
is expected to account for 56% of total expenditure on average.

Under its conservative rating case, Fitch expects Mugla's operating
balance to increase to about TRY4.2 billion with direct debt
totalling TRY3.2 billion in 2027, due to large debt-funded capex
estimated over the scenario horizon. The operating balance, which
will decline to 48% of operating revenue in 2027, will remain
resilient and cover at least 5.4x of its annual debt service by
2027, down from 73.5x in 2022 due to the estimated rise in cost of
funding associated with local debt along with the projected
increase in debt.

Mugla is not exposed to material off-balance sheet risk. Contingent
liabilities (TRY950 million) are moderate and largely stemming from
its water affiliate MUSKI, which no longer requires substantial
subsidies from the metropolitan municipality. The company has a
solid payback ratio at 3.1x in 2022. The company is expected to
continue fund its planned water and waste water investments via
foreign-currency loans with favourable terms over the scenario
horizon. Fitch expects the long maturities associated with the new
FX loans will help the company cover debt service via its own cash
flow.

Issuer Profile

Mugla is located in south-western Turkiye with a population of 1.0
million or 1.2% of nation's population, with an increased
population during summer seasons.

Mugla is an important tourism hub, capturing on average 6% of
tourist arrivals nationwide. Domestic tourism's weight in total
tourism activity is higher. Mugla's local economy is dominated by
the services sector (64%) driven largely by tourism, followed by
industry (22%) and agriculture (14%). The city also has large
mineral and mining resources and is an important marble centre,
making it one of the largest employers in the region. With GDP per
capita of TRY83,892, Mugla accounts for 97% of the national
average.

Fitch classifies Mugla as a 'Type B' local and regional government,
meaning it is required to cover debt service from its own cash
flows on an annual basis.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

A downgrade of the Turkish sovereign IDRs or a downward revision of
Mugla's SCP resulting from a debt payback ratio of above 13x would
lead to a downgrade of Mugla's IDRs.

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

An upgrade of the Turkish sovereign IDRs would lead to an upgrade
of Mugla's IDRs, provided that Mugla maintains its debt payback
ratio below 5x under Fitch's rating case.

ESG CONSIDERATIONS

The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.

DISCUSSION NOTE

Committee date: 25 September 2023

There was an appropriate quorum at the committee and the members
confirmed that they were free from recusal. It was agreed that the
data was sufficiently robust relative to its materiality. During
the committee no material issues were raised that were not in the
original committee package. The main rating factors under the
relevant criteria were discussed by the committee members. The
rating decision as discussed in this rating action commentary
reflects the committee discussion.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Mugla's IDRs are capped by the Turkish sovereign IDRs.

   Entity/Debt         Rating                  Prior
   -----------         ------                  -----
Mugla Metropolitan Municipality    

         LT IDR         B           Affirmed     B
         ST IDR         B           Affirmed     B
         LC LT IDR      B           Affirmed     B
         Natl LT        AAA(tur)    Affirmed     AAA(tur)


[*] Fitch Revises Outlooks on 10 Turkish NBFI's Outlook to Stable
-----------------------------------------------------------------
Fitch Ratings has revised the Outlooks on 10 non-bank financial
institution (NBFI) subsidiaries of Turkish banks to Stable from
Negative. The agency also revised the Outlooks on the National
Ratings of five subsidiaries to Stable from Negative.

The rating actions follow the revision of the Outlooks on the
parent Turkish banks' (see "Fitch Revises Outlook on 16 Turkish
Banks to Stable on Sovereign Change" dated  September 22, 2023 at
www.fitchratings.com).

The subsidiaries are:

- Deniz Finansal Kiralama A.S.(Deniz Leasing),
- QNB Finans Faktoring A.S.(QNB Faktoring),
- QNB Finans Finansal Kiralama A.S. (QNB Leasing),
- Ak Finansal Kiralama A.S. (Ak Lease),
- Garanti Faktoring A.S,
- Garanti Finansal Kiralama A.S. (Garanti Leasing),
- Is Finansal Kiralama Anonim Sirketi (Is Leasing),
- Yapi Kredi Faktoring A.S. (Yapi Faktoring),
- Yapi Kredi Finansal Kiralama A.O. (Yapi Kredi Leasing) and
- Yapi Kredi Yatirim Menkul Degerler A.S. (Yapi Kredi Yatrim).

KEY RATING DRIVERS

Support-Driven Ratings: The NBFIs' Long-Term Issuer Default Ratings
(IDRs) are equalised with those of their respective parents,
reflecting Fitch's view that they are core and highly integrated
subsidiaries. The revision of the Outlook to Stable from Negative
on the IDRs mirror those on the respective parents, which in turn
reflect easing operating-environment pressures on the credit
profiles of their banking groups.

Fitch is not able to assess the subsidiaries' intrinsic strength as
all companies are highly integrated into their respective parents
and their franchise relies heavily on their parents'. The ratings
are underpinned by potential shareholder support, but capped at
'B-' by their respective parents' Long-Term Foreign-Currency (LTFC)
IDRs, underlining intervention risk from the Turkish government.

Highly Integrated Subsidiaries: The ratings of the NBFI
subsidiaries reflect their close integration with their parents,
reputational risks of their defaults for the broader groups, and
ultimate full or majority ownership by their respective parents.
The subsidiaries offer core products and services (leasing,
factoring and investment services) in the domestic Turkish market.

High Support Propensity: Cost of support would be limited as the
subsidiaries are small compared with their parents and total assets
usually do not exceed 3% of group assets. This, together with other
support factors listed above, means Fitch believes the parents'
propensity to support remains very high. However, the ability to
support is limited by the respective parents' creditworthiness as
reflected in their ratings.

National Ratings Stable: National Ratings and their Outlooks are
equalised with their respective parents'. The Stable Outlook on the
foreign-owned NBFIs' National Ratings reflects its view that their
creditworthiness in local currency relative to other Turkish
issuers' remains unchanged. The revision of the Outlook to Stable
from Negative on the domestically owned issuers' National Ratings
reflects the revision on the Long-Term Local-Currency (LTLC) IDRs.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade

The subsidiaries' Long-Term IDRs are sensitive to a downgrade of
their parents' Long-Term IDRs or a deterioration in the operating
environment, which for example could be triggered by a sovereign
downgrade.

A downgrade in the parents' National Ratings would also be likely
to be mirrored in the subsidiaries' ratings.

The ratings could be notched down from their respective parents' on
material deterioration in the parents' propensity or ability to
support or if the subsidiaries become materially larger relative to
the respective banks' ability to provide support.

The ratings could be notched down from their respective parents' if
the subsidiaries' strategic importance is materially reduced
through, for example, a substantial reduction in business
referrals, reduced operational and management integration or
ownership, or a prolonged period of under-performance.

Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade

An upgrade of the respective parent's ratings and a revision in
Outlooks to Positive would be reflected in the subsidiary's
ratings.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

The entities' ratings are linked to their respective parent banks'
ratings.

ESG CONSIDERATIONS

The ESG Relevance Score for Management Strategy has been revised to
'4' from '3' for Deniz Leasing, QNB Factoring, and QNB Leasing, in
line with the parents' score. The score reflects increased
regulatory intervention in the Turkish banking sector, which
hinders the operational execution of the parent' s management
strategy, constrains management's ability to determine strategy and
price risk, and creates an additional operational burden for the
respective parent banks. The alignment reflects Fitch's view of
high integration.

Ak Lease, Garanti Factoring, Garanti Leasing, Is Leasing, Yapi
Kredi Factoring, Yapi Kredi Leasing and Yapi Kredi Yatirim have an
ESG Relevance Score of '4' for Management Strategy in line with
their respective parents' Management and Strategy ESG Relevance
Score.

Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. Fitch's ESG Relevance
Scores are not inputs in the rating process; they are an
observation of the materiality and relevance of ESG factors in the
rating decision. This means ESG issues are credit neutral or have
only a minimal credit impact on the entity, either due to their
nature or the way in which they are being managed by the entity.

   Entity/Debt                     Rating                Prior
   -----------                     ------                -----
Is Finansal
Kiralama
Anonim Sirketi   LT IDR              B-     Affirmed        B-
                 ST IDR              B      Affirmed        B
                 LC LT IDR           B      Affirmed        B
                 LC ST IDR           B      Affirmed        B
                 Natl LT             A+(tur)Affirmed   A+(tur)
                 Shareholder Support b-     Affirmed        b-

QNB Finans
Finansal
Kiralama 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)
                 Shareholder Support b-     Affirmed        b-

Ak Finansal
Kiralama 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             A+(tur)Affirmed   A+(tur)
                 Shareholder Support b-     Affirmed        b-

Yapi Kredi
Finansal
Kiralama A.O.    LT IDR              B-     Affirmed        B-
                 ST IDR              B      Affirmed        B
                 LC LT IDR           B      Affirmed        B
                 LC ST IDR           B      Affirmed        B
                 Natl LT             A+(tur)Affirmed   A+(tur)
                 Shareholder Support b-     Affirmed        b-

Garanti
Finansal
Kiralama 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)
                 Shareholder Support b-     Affirmed        b-

Yapi Kredi
Faktoring 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             A+(tur)Affirmed   A+(tur)
                 Shareholder Support b-     Affirmed        b-

QNB Finans
Faktoring 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)
                 Shareholder Support b-     Affirmed        b-

Yapi Kredi
Yatirim Menkul
Degerler 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             A+(tur)Affirmed   A+(tur)
                 Shareholder Support b-     Affirmed        b-

Deniz Finansal
Kiralama 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)
                 Shareholder Support b-     Affirmed        b-

Garanti
Faktoring 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)
                 Shareholder Support b-     Affirmed        b-




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

AINSCOW HOTEL: Bought Out of Administration
-------------------------------------------
Jungmin Seo at The Caterer reports that The Ainscow hotel in
Manchester has been sold out of administration to an undisclosed
buyer.

According to The Caterer, Knight Frank completed the sale to a UK
property and leisure investment company off a guide price of GBP7.5
million on behalf of joint administrators Andrew Knowles and James
Saunders of Kroll Advisory Ltd.

The 87-bedroom hotel, which features a car park for 36 vehicles,
had fallen into administration in 2021.  Its parent company the
Artisan Property Group was impacted by the industry ramifications
from the Grenfell Tower disaster, as several residential buildings
owned by the group had cladded facades, The Caterer discloses.

The Ainscow hotel was put on the market for GBP8.5 million in March
2022, The Caterer relates.


HOUNSLOW PROPERTY: Goes Into Administration
-------------------------------------------
The Construction Index reports that Hounslow Property Development
Limited went into administration on September 28, 2023.

The Hounslow Property Development Company (HPDC) was set up in 2019
by Inland Homes as a vehicle to develop an old Ministry of Defence
site, Cavalry Barracks, near Heathrow.

Inland Homes sold HPDC to Croydon-based Topaz Developments on
August 2020, owned by Hasmukh and Tej Shah.

Cavalry Barracks remained an Inland Homes scheme, however, with
plans to build 1,600 homes and 2,673 sqm of non-residential
floorspace for community and commercial use.

On Sept. 28, Inland Homes announced its intention to appoint
administrators, The Construction Index relates.  On the same day,
administrators from Kroll's real estate advisory group were
appointed to HPDC, putting Cavalry Barracks back up for grabs, The
Construction Index discloses.

At nearly 37 acres, the former MoD site is one of the largest
undeveloped brownfield sites in London.  The original development
plan was to refurbish 14 Grade II listed buildings and nine locally
listed buildings.

According to The Construction Index, joint administrator Rob
Armstrong said "It is clearly a challenging time for companies
operating in the real estate sector.  We are assessing all the
possible options related to this site and the company as a whole."


MICHAEL J LONSDALE: Goes Into Administration
--------------------------------------------
Aaron Morby at Construction Enquirer reports that London M&E
specialist Michael J Lonsdale has collapsed into administration
after nearly 40 years in business.

According to Construction Enquirer, administrators from Begbies
Traynor were formally appointed on Oct. 2 to the GBP250 million
revenue firm, which employed over 300 staff and many self-employed
workers.

It is understood staff are already being laid off, Construction
Enquirer states.

A letter sent to staff blamed inflation, shortage of workers,
project delays and supply chain disruptions for the firm's
problems, Construction Enquirer relates.

It also set out that Michael Hoodless and Gary Herbert would be the
biggest creditors, still being owed over GBP50 million for the
business, Construction Enquirer notes.


MJL MIDLANDS: Enters Administration, Ceases Trading
---------------------------------------------------
Sam Metcalf at TheBusinessDesk.com reports that engineering
contractor MJL Midlands is no more after its parent company ceased
trading.

MJL Midlands, formerly E7 Building Services, was based in
Wellingborough, but has been dragged into the troubles faced by its
owner, Michael J Lonsdale, which operates predominantly in the
London area, TheBusinessDesk.com notes.

Administrators from Begbies Traynor were appointed to Michael J
Lonsdale on Oct. 3, TheBusinessDesk.com relates.  The MJL Midlands
website is now currently unavailable and reports suggest that staff
are already being made redundant.

According to Construction Enquirer, in a letter to staff obtained
by Construction Enquirer, directors Gary Herbert, Michael Hoodless,
Kevin Feerick, Panny Hadjioannou, Mark Heath, Andy Shearlaw and
Kerry Noblett blamed supply chain disruption, Covid, Brexit and
"surging inflation" for bringing in administrators.

In the year to the end of September 2022, MJL Midlands made a loss
of just over GBP1 million, Construction Enquirer discloses.  The
firm employed an average of 28 people over the previous 12 months.


REAL CONTRACTING: South West Unit Set to Go Into Administration
---------------------------------------------------------------
Grant Prior at Construction Enquirer reports that the South West
division of the Real Contracting Group has filed a notice of
intention to appoint administrators.

Real SW staff were told on Oct. 2 in an internal email seen by the
Enquirer.

The move follows a similar application by the London and South East
division Real LSE last week, the Enquirer notes.

Real specialises in the construction of new homes, student
accommodation and later living schemes for housing associations,
local authorities and selected private clients.

The Real Contracting Group was created in 2021 by former Wates
Residential managing director Paul Nicholls.

The group was formed following the acquisition of Rydon
Construction's south east and south west businesses which consisted
of eight ongoing projects.

Latest accounts for Real SW show the firm had a turnover of GBP28
million for the year to February 28, 2022, generating a pre-tax
loss of GBP1.3 million, the Enquirer discloses.


ROYALELIFE GROUP: Administrators Seek to Sell 29 Holiday Parks
--------------------------------------------------------------
Business Sale reports that administrators are seeking to sell a
group of 29 residential caravan parks and properties, following the
collapse of RoyaleLife Group earlier this year.

RoyaleLife, owned by billionaire Robert Bull, fell into
administration this summer, Business Sale relates.

Paul Davies, Sandra Mundy and Tom Russell of James Cowper Kreston
have been appointed as administrators of various companies
associated with the group, Business Sale discloses.  

According to Business Sale, the administrators have engaged
specialist retail and leisure property adviser Christie & Co to
market the properties for sale.

The freehold sites are located across the UK, with four sites in
the North West, two in the Midlands, four in the South West, three
in the South East and the remainder largely in Hampshire and
Dorset, Business Sale states.  The properties are available as a
single portfolio, in subgroups or individually, Business Sale
notes.


VEDANTA RESOURCES: S&P Lowers ICR to 'CCC' on Bond Extensions
-------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Vedanta Resources and the issue rating on the company's outstanding
debt to 'CCC' from 'B-'. S&P also placed the ratings on CreditWatch
with negative implications. Vedanta Resources is a
U.K.-incorporated producer of commodities, with assets primarily in
India.

The CreditWatch placement reflects the likelihood of further rating
downside over the next three months, especially if S&P considered
the liability management exercise to be distressed.

The proximity of Vedanta Resources' large bond maturity in January
2024 has increased the likelihood of the company undertaking a
liability management exercise. Vedanta Resources has initiated
talks with bondholders to help address the company's bond
maturities of about US$3 billion, including US$1 billion in January
2024. S&P believes Vedanta Resources remains committed to avoiding
a payment default. We could assess such a liability management
transaction to be distressed.

Vedanta Resources' limited alternate sources of funding add to
downside risks, even though payment of the January bond is highly
likely. In the absence of an immediate liability management
exercise, we believe the company will be able to meet payment of
the US$1 billion bond in January 2024. Vedanta Resources has partly
addressed the maturity of the bond through the sale of about 4%
stake in subsidiary Vedanta Ltd. in August.

However, the sources for the remaining funding gap, which S&P
estimates to be about US$600 million, are not yet in place. Further
funds to redeem the bond could depend on events such as the
transfer of general reserves to retained earnings at subsidiary
Hindustan Zinc Ltd., or further asset sales.

Moreover, the presence of further large maturities following the
January bond maturity could make liability management a preferred
option, rather than paying down the January bond.

Vedanta's potential bond extension would have to provide an
adequate offsetting compensation for us to consider it as
opportunistic and not distressed. The terms of a liability
management proposal have not been finalized. S&P is therefore
unable to determine if it would be regarded as distressed under its
criteria.

S&P said, "We would consider various factors while assessing if a
transaction, if it eventuates, offers adequate compensation. These
include the coupon on the new notes, and whether the coupon
adequately captures the company's credit risk relative to its
recent cost of funding. We would also consider factors such as any
cash flow or structural subordination to new debt facilities,
differences in tenor, security package, or covenants. Such an
assessment is inherently qualitative and would require full
transaction details to be assessed.

"Our rating action reflects the high likelihood that the liability
management exercise will be classified as distressed. Such
transactions at the lower end of the 'B' rating category are often
classified as distressed. This is because of the potential for a
conventional default, absent the exchange, and the terms of the
transaction.

"The CreditWatch with negative implications reflects the increased
likelihood that Vedanta Resources will undertake a liability
management transaction that we may consider to be distressed under
our criteria. This is given the company's large upcoming debt
maturities.

"If we assess the transaction to be distressed, we will lower the
rating to 'SD' once the transaction is complete. The rating would
subsequently be raised to a level that reflects the company's
resultant capital structure and liquidity.

"If we assess the transaction to be opportunistic rather than
distressed or, in a less likely scenario where Vedanta Resources
does not conduct a liability management exercise, the company's
liquidity and refinancing risk will be the focus of the CreditWatch
resolution.

"We expect clarity on the company's liability management progress
well within the next three months."



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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
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