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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 11, 2023, Vol. 24, No. 204

                           Headlines



F R A N C E

ACCOR SA: Fitch Assigns 'BB' Rating on EUR500MM Subordinated Notes


G E R M A N Y

OQ CHEMICALS: Moody's Puts 'B3' CFR on Review for Downgrade


H U N G A R Y

MBH BANK: Moody's Gives (P)Ba2 Rating on Unsecured EMTN Programme


I R E L A N D

HARVEST CLO XVI: Moody's Affirms B2 Rating on EUR12.5MM F-R Notes
[*] IRELAND: Business Insolvencies Up 54% in Third Quarter 2023


L U X E M B O U R G

4FINANCE HOLDING: S&P Affirms 'B-' LongTerm ICR, Outlook Stable
SUBCALIDORA 1: Fitch Affirms LongTerm IDR at 'B', Outlook Stable


M A C E D O N I A

NORTH MACEDONIA: Fitch Affirms 'BB+' LongTerm Foreign Currency IDR


N E T H E R L A N D S

SPRINT HOLDCO: S&P Lowers ICR to 'B-' on Liquidity Constraints


P O L A N D

BANK OCHRONY: Fitch Affirms LongTerm IDR at 'BB-', Outlook Stable


S E R B I A

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


S P A I N

AERNNOVA AEROSPACE: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
KRONOSNET TOPCO: S&P Affirms 'B+' ICR on Term Loan B Liquidity


T U R K E Y

KEW SODA: S&P Affirms Prelim. 'B+' ICR & Alters Outlook to Stable
PEGASUS AIRLINES: S&P  Affirms 'B+' ICR & Alters Outlook to Stable
TURK HAVA: S&P Affirms 'B' ICR & Alters Outlook to Stable


U N I T E D   K I N G D O M

ANGELS EVENT: Taylors of Edinburgh Steps in to Pay Creditors
FOODMEK: Goes Into Liquidation, 32 Jobs Affected
GEMGARTO PLC 2021-1: Fitch Affirms 'CCCsf' Rating on Class E Notes
PATISSERIE VALERIE: Former CFO Denies Fraud Allegations
PHARMACEUTICAL PACKAGING: Put Up for Sale by Administrators

RECAST SPORTS: Founder Rescues Business Out of Administration
ROLLS-ROYCE & PARTNERS: Fitch Ups LongTerm IDR to BB, Outlook Pos.
SALUS NO. 33: S&P Affirms 'BB(sf)' Rating on Class D Notes
ZEPHYR MIDCO 2: Moody's Upgrades CFR to B2, Outlook Remains Stable
ZEPHYR MIDCO: S&P Affirms 'B-' ICR & Alters Outlook to Positive


                           - - - - -


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F R A N C E
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ACCOR SA: Fitch Assigns 'BB' Rating on EUR500MM Subordinated Notes
------------------------------------------------------------------
Fitch Ratings has assigned Accor SA's (BBB-/Stable) EUR500 million
undated deeply subordinated bond a final rating of 'BB', following
the bond placement and receipt of final documents. The securities
qualify for 50% equity credit.

The 'BB' rating is two notches below Accor's Issuer Default Rating
(IDR) of 'BBB-', reflecting the bond' higher loss severity and risk
of non-performance relative to senior obligations. The bond will be
used to finance the tender offer for Accor's existing EUR500
million hybrids as the company intends to maintain around EUR1
billion of hybrid debt in its capital structure. The new hybrid
issue ranks equally with existing hybrid instruments.

KEY RATING DRIVERS

50% Equity Credit: The securities qualify for 50% equity credit as
they meet Fitch's criteria for subordination, remaining effective
maturity of more than five years, full discretion to defer coupons
and no events of default. Deferrals of coupon payments are
cumulative and there are no look-back provisions.

Effective Maturity Date of Hybrid: The deeply subordinated bonds
are perpetual notes with no legal maturity date. They are callable
between 11 January and 11 April 2029 (first step-up date) and every
year subsequently on any interest payment date. Fitch deems 11
April 2049 (second coupon step-up date) as an effective maturity
date. This is because the cumulative coupon step-up would exceed
100bp, the threshold defined by its criteria.

Change-of-Control Clause: The terms of the hybrids include call
rights in the event of a change of control. If this event triggers
a downgrade of the Accor's IDR to a non-investment grade, the
company has the option to redeem all of the securities. If Accor
elects not to redeem the hybrid securities, the then prevailing
Interest rate, and each subsequent interest rate on the securities
will increase by 5%. Change-of-control clauses with call options
that result in a coupon step-up of up to 500bp, if the hybrid is
not called, do not negate equity credit, as per its criteria.

'BBB-' IDR: Accor's IDR of 'BBB-' reflects its strong post-pandemic
business recovery and is also based on its assumption that future
shareholder remuneration and investments will be aligned with the
company's commitment to investment-grade rating. The rating also
incorporates Accor's leading position in the global hospitality
market, strong geographic and price-segment diversification and
financial flexibility, as well as improved cost-structure
flexibility.

DERIVATION SUMMARY

Accor is an asset-light hotel operator, which Fitch views as more
stable than an asset-heavy business model that is fully reliant on
hotel ownership or leasing. However, in contrast to other
asset-light peers, such as Wyndham Hotels & Resorts Inc. (BB+/
Stable) and Hilton Worldwide Holdings Inc, Accor is more reliant on
management fees than franchising fees and is therefore more exposed
to volatility in revenue per available room (RevPAR) during
economic cycles.

Accor compares well with Hyatt Hotels Corporation (BBB-/Stable) as
they have both recently transitioned to asset-light business models
with most of their revenue driven by management fees from hotel
owners. Accor has a larger room-system size than Hyatt but is
smaller in EBITDAR as Hyatt has stronger profit margins, benefiting
from its focus on the luxury and upscale segments that generate
higher management and franchising fees per room.

At the same time, Accor's greater diversification by price segments
and substantial presence in the economy segment make it more
resilient to economic cycles than Hyatt. Accor is also more
geographically diversified than Hyatt as it has a lower
concentration on a single region (Europe for Accor and north
America for Hyatt) and has a wider footprint in Asia-Pacific.
Accor's stronger business profile is offset by its higher leverage
than Hyatt's and Fitch therefore rates both companies at 'BBB-'.

Accor is rated one notch below Whitbread PLC (BBB/ Stable), an
asset-heavy hotel operator. Whitbread's room system size is 10x
smaller than Accor's and its hotel portfolio is concentrated in the
UK market, with some growing presence in Germany. Accor is also
more diversified by price segment as Whitbread is focused on the
economy segment. However, their one-notch rating difference stems
from Whitbread's lower leverage and resilient performance during
economic cycles. Fitch may considers allowing a greater debt
capacity for Accor's rating once stability of its EBITDA improves.

Accor is rated higher than other European peers in the lodging
sector, such as NH Hotel Group S.A. (B/ Positive), Sani/Ikos Group
S.C.A. (B-/Negative) and Alpha Group SARL (B-/Stable). This is
because of its substantially stronger business profile and
financial flexibility, as well as its lower leverage metrics.

KEY ASSUMPTIONS

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

- RevPAR growth of 15%-20% in 2023, moderating to low-single
  digits from 2024

- Room-system growth in low- to mid-single digits over 2023-2026

- Strong growth in Fitch-adjusted EBITDA in 2023, in line with
  Accor's guidance

- Capex of about EUR500 million in 2023, reducing to EUR250
  million a year for 2024-2026

- Working-capital net inflow in 2023, driven mostly by the
  termination of supplier credit to AccorInvest

- Dividends of EUR288 million (ordinary and special) in 2023
  and at 50% of free cash flow (FCF) calculated in accordance
  with Accor's approach for 2024-2026

- Equity credit of 50% for EUR1 billion hybrids

- Bolt-on M&A (including acquisition of subsidiaries and
  minority stakes) of EUR250 million a year over 2024-2026

- No divestment of Accor's 30% stake in AccorInvest

- Share buyback spending to be aligned with commitment
  to investment-grade rating

RATING SENSITIVITIES

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

- Room system expansion, accompanied by system-wide RevPAR
  growth and improving EBITDA margin

- Successful cost optimisation and full transition towards
  an asset-light business model, leading to a more stable
  EBITDA margin

- EBITDAR net leverage (adjusted for variable leases)
  below 3.5x on a sustained basis, supported by a
  consistent financial policy

- EBITDAR fixed-charge coverage above 3x on a sustained basis

- Mid-single-digit FCF margin (after dividends)

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

- Weakening operating performance reflected in slower revenue
  growth to low single digits and EBITDA margin below 18% on
  a sustained basis

- EBITDAR net leverage (adjusted for variable leases) above 4x
  on a sustained basis due to operating underperformance or
  higher-than-expected shareholder remuneration

- EBITDAR fixed-charge coverage below 2.5x on a sustained basis

- Neutral or volatile FCF margin (after dividends)

LIQUIDITY AND DEBT STRUCTURE

Strong Liquidity: At end-June 2023, Accor's EUR1.6 billion of
readily available cash and undrawn revolving credit facility of
EUR1.2 billion (maturing in June 2025) were sufficient to cover
short-term debt of EUR0.5 billion. Accor's refinancing over
2019-2021 extended its debt maturity profile, with no material
maturities before 2026.

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.

   Entity/Debt           Rating           Prior
   -----------           ------           -----
Accor SA

   Subordinated       LT BB  New Rating   BB(EXP)




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G E R M A N Y
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OQ CHEMICALS: Moody's Puts 'B3' CFR on Review for Downgrade
-----------------------------------------------------------
Moody's Investors Service placed OQ Chemicals International
Holdings GmbH's ("OQC", "OQ Chemicals" or "the company") B3 long
term corporate family rating and B3-PD probability of default
rating on review for downgrade.

Concurrently, Moody's placed on review for downgrade the B3 backed
senior secured instrument ratings of the term loan Bs issued by OQ
Chemicals Holding Drei GmbH and OQ Chemicals Corporation,
subsidiaries of OQC. Previously, the outlooks were stable.

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

The placement of OQC's CFR, PDR and its subsidiaries' instrument
ratings on review for downgrade reflects the company's significant
debt maturities in October 2024, when its EUR475 million and $500
million term loans B mature. Furthermore, the company's existing
revolving credit facility (RCF) will mature in July 2024, reducing
its available liquidity. Moody's believes that the company is
working on a refinancing plan, which OQC expects to launch and
complete in the coming months. However, Moody's expects current
capital market conditions and the cyclical downturn in the broader
chemical industry, which leaves OQC with cyclically weak credit
metrics, to make the refinancing more challenging and more costly,
given the increase in interest rates. Rising interest rates for any
new financing will reduce the ability of the group to generate free
cash flow and keep its interest coverage metrics under pressure.

The review will focus on OQC's progress executing a refinancing in
the coming months and the prospective credit metrics and liquidity
if and when a transaction occurs.

As of June 30, 2023, OQC reported Moody's adjusted debt/EBITDA of
around 7.5x and EBITDA/Interest expense of around 2.0x. During the
last twelve months, severe destocking throughout the chemical
supply chain and volatile energy costs hurt OQC's EBITDA and cash
generation. Moody's however expects end markets to slowly recover,
facilitating a gradual improvement in EBITDA and cash flow
generation.

Factors that could lead to a rating downgrade include: (i) in
ability of the company to execute on a refinancing in the coming
months or (ii) gross debt/EBITDA consistently or well above 7.0x;
EBITDA/Interest cover consistently below 1.5x; RCF/Debt in the low
single digits in percentage terms; (iii) materially negative free
cash flow which contributes to a deterioration of the company's
liquidity profile; or (iv) enactment of more aggressive financial
policies which would favor shareholder returns over creditors.

Factors that could lead to a rating upgrade include: (i) successful
refinancing of the company's capital structure combined with; (ii)
gross debt/EBITDA consistently below 6.0x; (iii) EBITDA/Interest
cover consistently exceeding 2.0x; (iv) RCF/Debt in the high-single
digits in percentage terms; and (v) positive free cash flow with
the maintenance of adequate or better liquidity.

ESG CONSIDERATIONS

Governance considerations for OQC were a driver of the rating
action. This primarily reflects the company's lack of timely
progress to address upcoming debt maturities.

OQ Chemicals is owned by OQ SAOC (OQ), which is ultimately wholly
owned by the Government of Oman (Ba2 positive). The concentrated
ownership allows OQ to drive decision-making, which creates the
potential for event risk and decisions that favor shareholders over
creditors. On the other hand, OQ is also a much larger company
which may benefit from the Oxo technology of OQ Chemicals, and OQ
rebranded the company, previously called Oxea, with the OQ name,
which indicates the potential for support from OQ to OQC. Moody's
would view tangible financial support from OQC's shareholders
favorably.

LIQUIDITY

Moody's considers OQC's liquidity weak. As of June 30, 2023, the
company had EUR139 million of cash on hand. The company also has an
undrawn and fully available EUR137.5 million senior secured first
lien revolving credit facility (unrated), which will decline to
EUR102.5 million in October 2023. As the RCF is due in July 2024
Moody's do not consider this facility as a committed source of long
term liquidity given the near term maturity date. Absent a
refinancing or equity injection, OQC does not have sufficient
liquidity to repay its first lien term loans of approximately
EUR884 million equivalent maturing in October 2024.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Chemicals
published in June 2022.

COMPANY PROFILE

OQ Chemicals International Holding GmbH (OQC) is a leading global
producer of oxo chemicals on a global scale. OQ Chemicals was
formed in 2007 through the merger of the two business units of
Celanese AG and Evonik Industries AG (Baa2 stable). The company has
been owned by OQ SAOC (formerly known as Oman Oil Company) since
December 2013. OQ SAOC is a closed joint stock company domiciled in
the Sultanate of Oman. OQ SAOC is owned by the Oman Investment
Authority and is ultimately owned by the Government of Oman (Ba2
positive). In 2022 the OQ Chemicals reported revenue and company
adjusted EBITDA of EUR1.9 billion and EUR256 million (a 13%
margin), respectively.




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H U N G A R Y
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MBH BANK: Moody's Gives (P)Ba2 Rating on Unsecured EMTN Programme
-----------------------------------------------------------------
Moody's Investors Service has assigned (P)Ba2 local and foreign
currency long-term senior unsecured Euro Medium Term Note (EMTN)
programme ratings to MBH Bank Nyrt. (MBH). Concurrently the rating
agency assigned a Ba2 foreign currency senior unsecured bond rating
to MBH's expected EUR300 million senior unsecured issuance
announced on October 2, 2023[1]. The outlook on the senior
unsecured bond rating is stable.

All other ratings and assessments of the bank remain unaffected by
the rating action.

RATINGS RATIONALE

The rating assignments follow MBH's EUR1.5 billion EMTN program
dated October 2, 2023 and the bank's planned issuance announced on
the same day. Under the EMTN programme the bank can issue various
debt classes including senior unsecured debt designated as "Senior
Preferred Notes" in the documentation. Hungary has adopted full
deposit preference meaning MBH's senior unsecured debt securities
rank junior to deposits, pari passu among themselves and senior to
Senior Non-Preferred debt, capital and capital instruments and
other subordinated obligations, in case of bank liquidation.

The (P)Ba2 senior unsecured programme and Ba2 senior unsecured debt
ratings reflect the bank's ba3 Baseline Credit Assessment (BCA) and
Adjusted BCA; no uplift from MBH's Adjusted BCA following the
application of Moody's Advanced Loss Given Failure (LGF) analysis,
indicating a moderate loss-given-failure for these instruments in
the event of the bank's failure as well as the agency's assumption
of a moderate probability of support from the Government of Hungary
(Baa2 stable) for MBH's senior creditors, which results in one
notch of uplift.

The ratings assignment incorporates the rating agency's expectation
that the bank will be able to successfully execute its funding plan
announced on October 2, 2023 which will allow the bank to maintain
a buffer above its minimum requirement for own funds and eligible
liabilities (MREL), particularly relative to its subordination
requirement of 13.5% of total risk exposure (TREA) which becomes
binding from 15 December 2024. MBH has an extended deadline and its
target to meet its final binding MREL of 22.56% of TREA is January
1, 2026.

In addition to the amounts of debt issued and announced in 2023,
the issuer plans to issue around HUF120 billion in 2024 and HUF300
billion over 2025-2026.

OUTLOOK

The stable outlook on MBH's senior unsecured bond rating reflect
Moody's expectation that MBH's standalone credit profile will
remain stable over the next 12-18 months and the agency's view that
MBH will be able to successfully place its loss-absorbing debt
instrument volumes in line with its public funding plan. Programme
ratings do not carry an outlook.

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

MBH's senior unsecured EMTN programme and bond ratings could be
upgraded following an upgrade of its BCA and Adjusted BCA. Also
issuance of additional volumes of debt, exceeding the bank's
current funding plans to meet its MREL, could lead to an upgrade of
the senior unsecured EMTN programme and bond ratings.

MBH's BCA could be upgraded following a trend of sustainable
profitability at current levels combined with an improvement in
asset quality and capitalization. An established track record in
terms of the bank's financial performance at current levels,
demonstrating its risk appetite, could also result in an upgrade of
its BCA.

MBH's senior unsecured EMTN programme and bond ratings could be
downgraded following a downgrade of its BCA and Adjusted BCA or as
a result of reduced assumption of government support.

MBH's BCA could be downgraded if the bank's financial performance
worsens, owing to a significant weakening in capitalisation or
asset quality or due to a deterioration in its funding or liquidity
position.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Banks
Methodology published in July 2021.




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I R E L A N D
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HARVEST CLO XVI: Moody's Affirms B2 Rating on EUR12.5MM F-R Notes
-----------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on the following
notes issued by Harvest CLO XVI DAC:

EUR22,000,000 Class B-1-R Senior Secured Floating Rate Notes due
2031, Upgraded to Aaa (sf); previously on Mar 13, 2023 Upgraded to
Aa1 (sf)

EUR20,000,000 Class B-2-R Senior Secured Fixed Rate Notes due
2031, Upgraded to Aaa (sf); previously on Mar 13, 2023 Upgraded to
Aa1 (sf)

EUR31,000,000 Class C-R Senior Secured Deferrable Floating Rate
Notes due 2031, Upgraded to Aa3 (sf); previously on Mar 13, 2023
Upgraded to A1 (sf)

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

EUR273,000,000 (Current outstanding amount EUR272,444,907) Class
A-R Senior Secured Floating Rate Notes due 2031, Affirmed Aaa (sf);
previously on Mar 13, 2023 Affirmed Aaa (sf)

EUR27,000,000 Class D-R Senior Secured Deferrable Floating Rate
Notes due 2031, Affirmed Baa2 (sf); previously on Mar 13, 2023
Upgraded to Baa2 (sf)

EUR24,000,000 Class E-R Senior Secured Deferrable Floating Rate
Notes due 2031, Affirmed Ba2 (sf); previously on Mar 13, 2023
Affirmed Ba2 (sf)

EUR12,500,000 Class F-R Senior Secured Deferrable Floating Rate
Notes due 2031, Affirmed B2 (sf); previously on Mar 13, 2023
Affirmed B2 (sf)

Harvest CLO XVI DAC, issued in September 2016 and refinanced in
March 2021, is a collateralised loan obligation (CLO) backed by a
portfolio of mostly high-yield senior secured European loans. The
portfolio is managed by Investcorp Credit Management EU Limited.
The transaction's reinvestment period ended in April 2023.

RATINGS RATIONALE

The rating upgrades on the Class B-1-R, Class B-2-R, Class C-R
notes are primarily a result of the benefit of the end of the
reinvestment period in April 2023 and the improvement of the key
credit metrics of the underlying pool, specifically the average
credit quality and the weighted average spread, since the last
rating action in March 2023.

The credit quality has improved as reflected in the improvement in
the average credit rating of the portfolio (measured by the
weighted average rating factor, or WARF) and an increase in the
proportion of securities from issuers with ratings of Caa1 or
lower. According to the trustee report dated August 2023 [1], the
WARF was 2917, compared with 2981 in January 2023 [2]. Trustee
reported securities with ratings of Caa1 or lower currently make up
approximately 1.74% [1] of the underlying portfolio, versus 3.61%
in January 2023 [2]. In addition, trustee reported weighted average
spread has also improved, it now stands at 3.98% [1] versus 3.78%
observed in January 2023 [2].

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

Key model inputs:

The key model inputs Moody's uses in its analysis, such as par,
weighted average rating factor, diversity score and the weighted
average recovery rate, are based on its published methodology and
could differ from the trustee's reported numbers.

In its base case, Moody's used the following assumptions:

Performing par and principal proceeds balance: EUR431.6m

Defaulted Securities: EUR4.1m

Diversity Score: 64

Weighted Average Rating Factor (WARF): 2920

Weighted Average Life (WAL): 4.3 years

Weighted Average Spread (WAS) (before accounting for Euribor
floors): 3.98%

Weighted Average Coupon (WAC): 4.38%

Weighted Average Recovery Rate (WARR): 44.47%

Par haircut in OC tests and interest diversion test:  none

The default probability derives from the credit quality of the
collateral pool and Moody's expectation of the remaining life of
the collateral pool. The estimated average recovery rate on future
defaults is based primarily on the seniority of the assets in the
collateral pool. In each case, historical and market performance
and a collateral manager's latitude to trade collateral are also
relevant factors. Moody's incorporates these default and recovery
characteristics of the collateral pool into its cash flow model
analysis, subjecting them to stresses as a function of the target
rating of each CLO liability it is analysing.

Methodology Underlying the Rating Action:

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

Counterparty Exposure:

The rating action took into consideration the notes' exposure to
relevant counterparties, such as account bank and swap provider,
using the methodology "Moody's Approach to Assessing Counterparty
Risks in Structured Finance" published in June 2022. Moody's
concluded the ratings of the notes are not constrained by these
risks.

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

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

Additional uncertainty about performance is due to the following:

-- Portfolio amortisation: The main source of uncertainty in this
transaction is the pace of amortisation of the underlying
portfolio, which can vary significantly depending on market
conditions and have a significant impact on the notes' ratings.
Amortisation could accelerate as a consequence of high loan
prepayment levels or collateral sales the collateral manager or be
delayed by an increase in loan amend-and-extend restructurings.
Fast amortisation would usually benefit the ratings of the notes
beginning with the notes having the highest prepayment priority.

-- Recovery of defaulted assets: Market value fluctuations in
trustee-reported defaulted assets and those Moody's assumes have
defaulted can result in volatility in the deal's
over-collateralisation levels. Further, the timing of recoveries
and the manager's decision whether to work out or sell defaulted
assets can also result in additional uncertainty. Moody's analysed
defaulted recoveries assuming the lower of the market price or the
recovery rate to account for potential volatility in market prices.
Recoveries higher than Moody's expectations would have a positive
impact on the notes' ratings.

In addition to the quantitative factors that Moody's explicitly
modelled, qualitative factors are part of the rating committee's
considerations. These qualitative factors include the structural
protections in the transaction, its recent performance given the
market environment, the legal environment, specific documentation
features, the collateral manager's track record and the potential
for selection bias in the portfolio. All information available to
rating committees, including macroeconomic forecasts, input from
other Moody's analytical groups, market factors, and judgments
regarding the nature and severity of credit stress on the
transactions, can influence the final rating decision.


[*] IRELAND: Business Insolvencies Up 54% in Third Quarter 2023
---------------------------------------------------------------
Alan Healy at Irish Examiner reports that a sharp rise in business
insolvencies in Ireland is being linked to ongoing inflation
pressures faced by businesses in all sectors.

According to Irish Examiner, data from CRIFVision-Net for the third
quarter shows the number of companies becoming insolvent in Ireland
rose by 54% compared to the same period last year.

A total of 185 insolvencies were recorded in July, August, and
September, versus 120 in the third quarter of 2022, Irish Examiner
discloses.

The year-on-year data suggests that inflationary pressures have
driven an uptick in the rate of insolvencies, said CRIF-Vision-Net,
Irish Examiner notes.

Over the period of analysis, a slight increase in insolvencies was
seen in education, leasing, and retail, all of which had relatively
low initial numbers, Irish Examiner states.

On a county level, Cork experienced the highest number of new
insolvency cases for the quarter, totalling 21, according to Irish
Examiner.

The rise in insolvencies was counterbalanced by a 12% jump in new
business startups, Irish Examiner discloses.  In the third quarter,
5,154 startups were recorded, versus 4,593 for the same period last
year, and 19 counties recorded company startup growth with just
seven seeing a year-on-year decrease versus the same period in
2022, Irish Examiner relates.




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L U X E M B O U R G
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4FINANCE HOLDING: S&P Affirms 'B-' LongTerm ICR, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' long-term issuer credit rating
on 4finance Holding S.A.

The stable outlook indicates that 4finance will generate sufficient
cash flow to pay coupons on its two bonds, while adjusting its
sustainable business footprint.

4finance is looking to address the 2025 refinancing need by
extending the bond maturity. 4finance's business model depends on
regular and timely access to the speculative-grade funding markets
and, absent sound bank lending relationships, it has limited
alternatives for its bond maturities in 2025 and 2026. It has asked
the investors in its bonds due February 2025 to extend the maturity
to May 2028. While the coupon will remain unchanged, investors will
be compensated by a participation fee of 1.25%, the addition of the
Philippine activities to the guarantor group, and a partial put
option at the original maturity of up to EUR15 million. While
4finance's credit profile remains vulnerable to unfavorable
regulatory developments and an increase in impairments, in S&P's
base-case scenario, it expects its existing cash position and
earnings to comfortably cover its coupon payments in the next 12
months. If investors do not agree to the maturity extension,
4finance would still have time to consider other refinancing
options, although these may be more costly. Should debt markets
become unavailable for 4finance, it may ultimately need to reduce
new loan disbursements and amortize its existing loan book to
accumulate cash or consider a partial divestment of TBI Bank.

S&P said, "We expect 4finance's leverage to remain high and
dependent on regulatory developments and impairment changes. In our
view, the company will achieve only marginal revenue growth
(excluding TBI Bank) over 2023 and 2024, but will face higher
impairment charges from the higher-risk business in the
Philippines. Additionally, despite focusing on efficiency, 4finance
will bear rising operating expenses from inflation across Europe.
Absent TBI Bank dividend flows, we expect the company's S&P Global
Ratings-adjusted debt to EBITDA ratio to remain above 5x over 2023
and 2024. We also expect the company's operating performance and
leverage to remain very sensitive to actual risk performance,
notably in its key new market Philippines, where it has limited
track record. In addition, we anticipate the S&P Global
Ratings-adjusted EBITDA interest coverage ratio to remain at about
1.5x over 2023 and 2024."

Regulatory risks remain high and will likely require further
product adjustments in some markets over the next few years.
Progress on the consumer credit regulation at the EU level could
make 4finance's core markets, especially Spain, less attractive.
The Spanish consumer finance market is largely unregulated, but
this will change with the implementation of the EU Consumer Credit
Directive. Some regulation around marketing behavior and interest
rate caps could actually benefit the competitive environment in
Spain, but it also poses a risk to this market and increases
4finance's vulnerability to regulatory changes. S&P expects further
refinements to the company's products and geographical footprint
will remain a common feature of its operations. S&P understands
that 4finance is considering potential acquisitions of consumer
finance business in additional countries. This could increase
diversification and reduce vulnerability to regulatory developments
in single markets over time.

S&P said, "We expect the weak governance structure to persist.
Since the shareholder changes in 2022, 4finance operates without a
supervisory board and we have no visibility whether, and when, this
will be reestablished. We think this missing oversight, especially
by independent board members, creates additional risks for bond
investors. This is also reflected in the still outstanding
shareholder loan to 4finance Group S.A., which sits outside of the
bond guarantor group. We also note that a chief risk officer was
not reappointed since the departure of Mr Kujawa in February 2023.
Finally, we highlight the lack of 4finance's online business
stand-alone financials, which limits transparency given the
regulatory barrier to cash flows from TBI Bank. Overall, we
consider 4finance's management and governance as weak.

"We expect TBI Bank to moderately support 4finance's future cash
flows. We continue to treat TBI Bank as an equity affiliate of
4finance, so we deconsolidate its financials as far as possible. We
consider potential dividend payments and funding benefits for
bondholders in our analysis of 4finance, but we see limited benefit
beyond this. However, currently we do not factor any dividend
payments from TBI Bank into our analysis of 4finance, given the
strong growth momentum at TBI that requires earnings retention to
offset growth in risk-weighted assets.

"TBI Bank's regulated status prevents 4finance from extracting
capital and liquidity on a discretionary basis, such that we assess
TBI Bank as insulated from 4finance. We exclude TBI Bank from our
recovery analysis because the potential realization value is highly
uncertain. Although TBI Bank is not part of the bond guarantor
group, 4finance's bondholders would likely have access to TBI Bank
shares in the event of default. That said, 4finance could sell TBI
Bank before a default. Furthermore, in a hypothetical default of
4finance, the value of TBI Bank could be impaired; as a result, we
do not reflect it quantitatively in our recovery analysis."

The stable outlook reflects our base-case expectation that 4finance
will be able to maintain its cash flow generation and interest
coverage over the coming 12 months, although risks from economic
uncertainty and regulation will persist.

S&P could lower the rating if the company's interest coverage
ratios are depressed by a material increase in impairment costs or
weaker business prospects in Spain from tightening regulation.

If the 2025 bond maturity extension were to fail, S&P would
downgrade 4finance if it sees no credible plan to refinance well
ahead of the maturity in February 2025.

S&P is unlikely to upgrade 4finance given its vulnerable business,
weak governance, and high leverage.


SUBCALIDORA 1: Fitch Affirms LongTerm IDR at 'B', Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed Subcalidora 1 S.a.r.l.'s (Mediapro)
Long-Term Issuer Default Rating (IDR) at 'B' with a Stable Outlook.
Fitch has also affirmed Subcalidora 2 S.a.r.l.'s EUR500 million
term loan A (TLA) senior secured rating at 'BB-' with a Recovery
Rating of 'RR2'.

The rating reflects Mediapro's comfortable leverage headroom,
strong liquidity and the renewal of its largest contract, the
international La Liga contract. This improves visibility in one of
the company's main revenue streams, albeit Fitch expects the agency
commission rate will fall from 2027.

Longer-term prospects for the business model are challenged by the
potential threat of accelerated migration of large over-the-top
(OTT) content providers into sports rights and broadcasting
services. However, Mediapro's revenue diversification is gradually
improving, with reduced dependence on the international La Liga
agency contract as business areas such as broadcast media services
(BMS) and Mediapro Studios showed continued strong yoy growth in
2022 and 1H23.

KEY RATING DRIVERS

Business Model and Execution Risks: Mediapro's strong market
position in Spanish football with a leading position within
audiovisual services and Spanish video content production shows a
sustainable business model. Following the renewal of the
international La Liga agency contract, visibility and execution
risk has improved, but with the next contract renewal in 2029,
Fitch still considers execution risk as meaningful.

Fitch expects the La Liga international contract to account for
around 40% of company EBITDA in 2023 and generate around EUR50
million-EUR60 million per year. As Fitch assumes the commission
rate will fall, this will put pressure on the company to increase
league sales to keep EBITDA growth beyond 2027. In the medium to
long term Fitch sees potential pressure on the business model as
major OTT content providers, like Amazon, have entered the sports
rights market, which could potentially result in them taking over
large parts of the value chain, as in cinematic and series
production.

Improved Leverage Headroom: Mediapro's Fitch-defined EBITDA
leverage declined to 3.2x in 2022 and Fitch expects it to continue
to decline to around 2.5x in 2025. Fitch expects a slight revenue
contraction in 2023, stemming from a decline in sports rights
revenues from the loss of rights to the Champions League and La
Liga domestic bars and restaurants from 2021. Fitch forecasts
Fitch-defined EBITDA margins will return to pre-pandemic levels of
around 13%-14% in 2023, driven by developments in the innovation
segment and a strong 2H23 from sports rights and BMS. Leverage will
remain around 3x, so Fitch expects sufficient headroom under its
leverage sensitivities.

Ample Liquidity: Following the last debt refinancing, Mediapro has
maintained ample liquidity with EUR127 million of available cash as
of 30 June 2023. Fitch expects available liquidity to gradually
decrease in 2023 and 2024 due to its expectation of some negative
free cash flow (FCF), high interest costs and increasing
amortisations on the TLA. From 2025 Fitch estimates that FCF will
turn positive. Overall, Fitch expects Mediapro to maintain a
liquidity position of more than EUR100 million to 2026.

Interest Coverage Headroom Expected: The TLA is floating rate with
a 7.5% margin over EURIBOR. Fitch expects interest payments to
amount to EUR45 million-EUR60 million per year, with no interest
rate hedges in place. Fitch expects EBITDA/interest cover to be at
its negative sensitivity in 2023 and gradually improve thereafter
towards 3.5x in 2025, leaving modest headroom in interest coverage
compared with its 2.5x negative rating sensitivity.

Strong Position in Audiovisual Services: Mediapro is well
positioned in audiovisual services with one of the largest
international platforms covering production, outside broadcasting
and signal transmission. It has one of the leading mobile
transmission unit fleets and is at the forefront of signal
transmission offerings. Mediapro's long-term agreements with sports
rights holders and long-lasting relations with sports federations
will continue help it secure premium sport events. Mediapro is
especially strong within football and has a solid record of
producing events like Spanish La Liga, UEFA Champions League,
Football World Cups and Olympic Games.

Stable Content Demand: Global content spend has doubled over the
last decade and content consumption habits have evolved, driven by
increased penetration of online streaming platforms. The demand for
local produced content has increased in the past years, giving
Mediapro good opportunities to gain further international reach
with its Spanish content. Fitch expects content spend to continue
to grow but more slowly, reflecting the need to refresh core
libraries to remain competitive while achieving financial
objectives.

Fitch believes Mediapro is well-positioned to benefit from general
market growth and the focus on locally produced content as the main
producer of TV content in Spain and its established position in
LATAM as a Spanish content producer.

DERIVATION SUMMARY

Fitch assesses Mediapro using its Ratings Navigator for Diversified
Media Companies and by benchmarking it against selected Fitch-rated
rights-management and content-producing peers, none of which Fitch
views as a complete comparator given Mediapro's fully integrated
business model. Sportradar Management Ltd (BB-/Stable) is also
exposed to sports right renewal, inflation risk and has limited
scale. Sportsradar is the leader in a fast-growing market and
following its debt repayment in 2022, its financial profile is more
consistent with investment grade-rated data analytics and media
companies. Mediapro's 'B' rating reflects its limited scale, low
FCF margins and modest interest coverage relative to higher rated
media peers.

Mediapro has a strong competitive position, and stronger regional,
rather than global, sector presence but this is offset by high
dependence on key accounts (in particular the International La Liga
contract) and a lower FCF base than peers. Fitch believes Mediapro
has a weaker business profile than Banijay Group SAS (B+/Stable),
driven by the former's high contract renewal risk. Mediapro has
lower leverage than Banijay for the same Standalone Credit Profile
(b+).

KEY ASSUMPTIONS

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

- Revenue to decline 4.5% in 2023, mainly reflecting the loss of
  domestic sports rights in Spain. From 2024, Fitch expects
  revenues to grow between 2%-3% per year.

- Fitch-defined EBITDA margin to improve in 2023 to pre-pandemic
  levels of around 13.5%. Subsequently, continued modestly
  improving EBITDA margins to 14.8% in 2026.

- Capex at around 5% of revenue to 2026

- Working-capital outflows of around 1.5% -2.5% of revenues for
  2023-2026

- No shareholder payments in 2023 to 2026.

KEY RECOVERY RATING ASSUMPTIONS

- The recovery analysis assumes that Mediapro would be considered
  a going concern in bankruptcy and that the company would be
  reorganised rather than liquidated

- A 10% administrative claim

- Post-restructuring going-concern EBITDA estimated at EUR93
  million, reflecting a loss of key contracts or material
  under-performance in EBITDA

- An enterprise value multiple of 4.5x is used to calculate a
  post-reorganisation valuation

- These assumptions result in a recovery rate of 75% for the
  senior secured instrument rating within the 'RR2' range,
  based on the current metrics and assumptions, resulting in a
  two-notch uplift from the IDR to 'BB-'.

RATING SENSITIVITIES

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

- Successful strategy implementation combined with increased
  diversification of the business model and a significantly
  lower proportion of EBITDA from the La Liga International
  contract

- Growth in EBITDA to above EUR150 million with consistently
  positive FCF generation and mid-single digit FCF margins,
  contributing to a reduction in Fitch-defined total debt/EBITDA
  to below 4.0x on a sustained basis

- Fitch-defined EBITDA /interest coverage above 4x

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

- Non-renewal of the La Liga international contract or
  under-performance in other business areas, leading to
  negative FCF or Fitch-defined total debt/EBITDA increasing
  to above 5.0x on a sustained basis

- Fitch-defined EBITDA /interest coverage remaining below
  2.5x on a sustained basis

- Readily available liquidity falling below EUR100 million
  during the year

LIQUIDITY AND DEBT STRUCTURE

Sufficient Liquidity: Fitch expects EBITDA growth to be somewhat
offset by higher interest costs, resulting in negative FCF in 2023
and 2024 before turning positive in 2025 and 2026. There is no
committed RCF available under the current agreement. Fitch views
Mediapro as having sufficient available liquidity to service its
upcoming amortisation and interest payments over the next four
years while maintaining an available cash balance of at least
EUR100 million.

No Short-Term Maturities: Mediapro does not face any meaningful
short-term debt maturities following its debt refinancing in 2022.
Its TLA is amortising with EUR5 million payable in year 1 (2023),
EUR15 million in year 2, EUR25 million in years 3 and 4 and the
outstanding EUR430 million in year 5.

ISSUER PROFILE

Mediapro is a Spain-based vertically integrated global sports and
media entertainment group operating across the entire value chain
from rights management through content production using own
audio-visual capabilities in production, broadcasting and
transmission.

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.

   Entity/Debt                  Rating          Recovery    Prior
   -----------                  ------          --------    -----
Subcalidora 1 S.a.r.l.    LT IDR  B    Affirmed               B

Subcalidora 2 S.a.r.l.

   senior secured         LT      BB-  Affirmed      RR2      BB-




=================
M A C E D O N I A
=================

NORTH MACEDONIA: Fitch Affirms 'BB+' LongTerm Foreign Currency IDR
------------------------------------------------------------------
Fitch Ratings has affirmed North Macedonia's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB+' with a Stable
Outlook.

KEY RATING DRIVERS

Rating Fundamentals: North Macedonia's 'BB+' rating is supported by
a record of credible and consistent macroeconomic policy that
underpins the longstanding exchange rate peg to the euro, more
favourable governance indicators than peer medians, and an EU
accession process that acts as a reform anchor over the medium
term. Set against these factors are the greater exposure of public
debt to exchange rate risk, banking sector euroisation, and
still-high structural unemployment, partly reflecting a large
informal economy and skills mismatches, together with weak
productivity growth.

Spending Reallocation; Tax Adjustments: Fitch projects the general
government deficit to be unchanged from last year at 4.5% of GDP in
2023. Lower costs from energy support measures are being offset by
higher capital spending (primarily on the 8/10d highway project)
and the delayed implementation of a reduction in tax exemptions.

A budget reallocation in September saw 2% of GDP of savings,
roughly equally split between lower than budgeted spending on
energy measures and under-executed capital projects, reallocated
primarily to finance a 10% pay hike and new holiday allowance for
public sector workers and a 5.3% increase in pensions. Delayed tax
reforms that reduce exemptions for corporate income tax and VAT
were also passed in September together with a solidarity tax.

Deficits to Narrow: Reaching the official deficit target of 3.4% of
GDP in 2024 has been complicated by the recent adjustments to
current spending and would require new measures. The scope for
additional election related spending in 2024 is constrained by
rules in the organic budget law and Fitch sees greater fiscal risks
from potential overspending on the 8/10d highway project (expected
to cost around 2% of GDP per year over the five years of
construction). Fitch forecasts deficits of 3.8% in 2024 and 3.5% in
2025 as revenues rise in line with recent tax reforms, enhanced
collection and stronger economic growth.

Debt Stabilisation: Fitch's deficit projections are consistent with
a stabilisation of the general government debt ratio at around 51%
of GDP throughout its forecast period to end-2025 ('BB' median
52%). Government guarantees were 7.5% of GDP at end-June 2023.
Government debt is significantly exposed to FX risk, as at end-2Q
only 26% was local-currency-denominated, although with a further
68% of government debt euro-denominated, these risks are mitigated
by the credible exchange-rate peg.

Current Account Rebound: A pronounced improvement of the trade
balance narrowed the current account deficit to just 0.1% of
projected full-year GDP in 1H23 compared with 4.6% in 1H22. This
largely reflects higher domestic energy production, lower prices of
energy imports and the reversal of the building of raw material
inventories in 2022. Imports for the 8/10d highway will widen the
deficit. A recovery of external demand and continued inflow of
export-orientated FDI will partially offset this increase.

Fitch projects the deficit at 1.9% of GDP in 2023, widening to 3.5%
in 2024 and 3.9% in 2025, which will be almost entirely covered by
net FDI inflows. FX reserves are expected to remain around 3.7
months of CXP coverage, which is slightly below the peer median
(4.4 months), but sufficient to support the exchange rate peg.

Growth to Recover: Economic activity was relatively subdued in
1H23, at 1.6% yoy, but looks set to recover as real wage growth has
returned to positive territory and higher pensions boost
consumption. Private consumption and investment will continue to
drive growth over the forecast period, with the latter driven by
the scaling up of work on 8/10d and private investment in the
energy sector. Net FDI inflows will translate into improved export
capacity and the revival of growth in key trading partners will
also support a pickup in real growth to 3.3% in 2024 and 3.8% in
2025.

Inflation Easing: Inflation has returned to single digits, at 8.3%
in August from 19.8% in October 2022, owing to base effects and
tighter monetary policy. Core inflation is also easing, although
more slowly and food inflation remains high and relatively sticky,
in response to which the government froze some prices in September.
Fitch expects inflation to continue to ease given base effects, the
food price freeze and tighter monetary policy, although the
adjustments to public sector wages and pensions in the budget
reallocation will feed into prices.

Wages appear the key domestic risk to the disinflation process, but
Fitch assumes that headline inflation will return to low single
digits over 2024. Fitch assumes the monetary policy tightening
cycle (including cumulative rate hikes of 505 bp) is close to an
end.

No Progress in EU Accession: There has been no progress towards
passing the constitutional amendments necessary as part of North
Macedonia's EU accession process. The government is exploring
options, but Fitch believes it will be difficult for it to secure
the necessary parliamentary support before the next elections (due
by September 2024), although Fitch believes it will remain a
medium-term objective regardless of the election outcome.
Governance, as measured by the World Bank, is comfortably above the
'BB' median.

Resilient Banking Sector: Banking sector indicators remain heathy.
Higher net interest margins have lifted profits, which along with
central bank macro-prudential measures, have enabled a
strengthening of capital buffers, with the capital adequacy ratio
rising to 18.2% at end-2Q23 from 17.7% at end-2022. Non-performing
loans (2.8% of total loans) have not been affected by the weaker
economic environment and the uptick in stage two loans last year
has been partially reversed. Real estate prices are slowing after a
period of rapid growth (by 38% since end-2020) reflecting higher
interest rates, hikes in the counter-cyclical buffer and
borrower-based prudential measures.

ESG - Governance: North Macedonia has an ESG Relevance Score (RS)
of '5[+]' for both Political Stability and Rights and for the Rule
of Law, Institutional and Regulatory Quality and Control of
Corruption. Theses scores reflect the high weight that the World
Bank Governance Indicators (WBGI) have in its proprietary Sovereign
Rating Model. North Macedonia has a medium WBGI ranking at 53
reflecting a recent record of peaceful political transitions, a
moderate level of rights for participation in the political
process, moderate institutional capacity, established rule of law
and a moderate level of corruption.

RATING SENSITIVITIES

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

- Public Finances: Materially higher-than-forecast general
government debt/GDP over the medium term, for example, due to
weaker growth prospects or expectations of a looser fiscal policy.

- Macro/External Finances: Persistently high inflation, low growth
and a deterioration in the external position that exerts pressure
on foreign-currency reserves and/or the currency peg against the
euro.

- Structural: Adverse political developments that negatively affect
governance standards, the economy and EU accession progress.

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

- Structural/Macro: Improvement in medium-term growth prospects
and/or governance standards, for example, due to progress towards
EU accession and reduction in political and policy risk.

- Public Finances: A sharp and sustained decline in general
government debt/GDP, reflecting implementation of fiscal reforms

SOVEREIGN RATING MODEL (SRM) AND QUALITATIVE OVERLAY (QO)

Fitch's proprietary SRM assigns North Macedonia a score equivalent
to a rating of 'BB' on the Long-Term Foreign-Currency (LT FC) IDR
scale.

Fitch's sovereign rating committee adjusted the output from the SRM
to arrive at the final LT FC IDR by applying its QO, relative to
SRM data and output, as follows:

- Macro: +1 notch, to reflect the deterioration in the SRM output
driven by the pandemic shock and the high inflation stemming from
the war in Ukraine. The deterioration of the GDP volatility
variable and the jump in inflation reflects a very substantial and
unprecedented exogenous shocks that have hit the vast majority of
sovereigns, and Fitch currently believes that North Macedonia has
the capacity to absorb them without lasting effects on its
long-term macroeconomic stability.

Fitch's SRM is the agency's proprietary multiple regression rating
model that employs 18 variables based on three-year centred
averages, including one year of forecasts, to produce a score
equivalent to a LT FC IDR. Fitch's QO is a forward-looking
qualitative framework designed to allow for adjustment to the SRM
output to assign the final rating, reflecting factors within its
criteria that are not fully quantifiable and/or not fully reflected
in the SRM.

COUNTRY CEILING

The Country Ceiling for North Macedonia is 'BBB-', 1 notch above
the LT FC IDR. This reflects moderate constraints and incentives,
relative to the IDR, against capital or exchange controls being
imposed that would prevent or significantly impede the private
sector from converting local currency into foreign currency and
transferring the proceeds to non-resident creditors to service debt
payments.

Fitch's Country Ceiling Model produced a starting point uplift of 0
notches above the IDR. Fitch's rating committee applied a +1 notch
qualitative adjustment to this, under the Long-Term Institutional
Characteristics pillar reflecting its view that trade and financial
integration as stronger than the model outputs given the EU
accession process.

ESG CONSIDERATIONS

North Macedonia has an ESG Relevance Score of '5[+]' for Political
Stability and Rights as World Bank Governance Indicators have the
highest weight in Fitch's SRM and are therefore highly relevant to
the rating and a key rating driver with a high weight. As North
Macedonia has a percentile rank above 50 for the respective
Governance Indicator, this has a positive impact on the credit
profile.

North Macedonia has an ESG Relevance Score of '5[+]' for Rule of
Law, Institutional & Regulatory Quality and Control of Corruption
as World Bank Governance Indicators have the highest weight in
Fitch's SRM and are therefore highly relevant to the rating and are
a key rating driver with a high weight. As North Macedonia has a
percentile rank above 50 for the respective Governance Indicators,
this has a positive impact on the credit profile.

North Macedonia has an ESG Relevance Score of '4[+]'for Human
Rights and Political Freedoms as the Voice and Accountability
pillar of the World Bank Governance Indicators is relevant to the
rating and a rating driver. As North Macedonia has a percentile
rank above 50 for the respective Governance Indicator, this has a
positive impact on the credit profile.

North Macedonia has an ESG Relevance Score of '4[+]' for Creditor
Rights as willingness to service and repay debt is relevant to the
rating and is a rating driver for North Macedonia, as for all
sovereigns. As North Macedonia has track record of 20+ years
without a restructuring of public debt and captured in its SRM
variable, this has a positive impact on the credit profile.

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.

   Entity/Debt                         Rating            Prior
   -----------                         ------            -----
North Macedonia,
Republic of       
                       LT IDR           BB+    Affirmed    BB+

                       ST IDR           B      Affirmed    B

                       LC LT IDR        BB+    Affirmed    BB+

                       LC ST IDR        B      Affirmed    B

                       Country Ceiling  BBB-   Affirmed    BBB-

senior unsecured      LT               BB+    Affirmed    BB+

senior unsecured      ST               B      Affirmed    B




=====================
N E T H E R L A N D S
=====================

SPRINT HOLDCO: S&P Lowers ICR to 'B-' on Liquidity Constraints
--------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Dutch e-bikes manufacturer Accell Group's parent company Sprint
Holdco B.V. and its senior secured term loan B issue rating to 'B-'
from 'B' and placed them on CreditWatch with negative
implications.

The CreditWatch placement reflects the risk of a downgrade if
Accell Group's liquidity position is not addressed in the next few
months, either through the reception of external funding support
(new bank lines or shareholder support) or a material unwinding of
its working capital that would translate into at least neutral FOCF
after lease payments.

The sustainability of the capital structure relies significantly on
an improvement in the company's liquidity position in the coming
months. As of June 30, 2023, the company reported EUR10 million of
cash on balance sheet, but exhausted the availability under the
EUR180 million RCF and EUR75 million ABL lines it previously
secured. Private equity owner KKR provided EUR70 million of
additional liquidity during May 2023 in the form of an intercompany
RCF and remains committed to an additional EUR30 million under the
same agreement. S&P said, "Based on the group's first-half 2023
results, we forecast S&P Global Ratings-adjusted EBITDA cash
interest coverage of about 0.5x and S&P Global Ratings-adjusted
leverage well above 10x for fiscal year 2023 (ending Dec. 31),
compared to our previous expectation of 2.1x and 6.7x,
respectively. The CreditWatch with negative implications reflects
our view that the company is dependent upon favorable business
conditions to meet its financial commitments--unless its liquidity
position improves materially through securing additional credit
lines or via substantial equity injections from shareholders, and
the excessive inventory position is unwound swiftly in the coming
quarters. We therefore plan to monitor the group's performance very
closely in the next couple of quarters to observe if there will be
a significant improvement in restoring the liquidity position in
line with an adequate assessment under our criteria, alongside
positive signs of inventory reduction and working capital
normalization."

Although component availability and lead times have improved,
finished bike inventory remains persistently higher than
pre-pandemic levels, hampering Accell Group's FOCF. While
bottlenecks at the key component supplier level--created by excess
demand boosted by pandemic-induced habits--have now eased compared
to 2022, the European bicycle market is challenged by the increased
inventory of finished bikes at the dealer level. This is alongside
facing a deteriorated macroeconomic environment, in which inflation
and higher interest rates are squeezing consumers' discretionary
spending. In order to support demand and reduce inventory, many
bike manufacturers, including Accell Group, began offering
significant discounts to dealers and end consumers during June
2023. Contrary to competitors that are offering discounts on all
models, Accell's discounts are skewed toward older models. S&P
said, "Although we think this approach will help limit the amount
of impairment on older bikes, the level of inventory in 2023 will
remain significantly above pre-pandemic, at about 70% of total
revenues compared to 35% in 2019. Consequently, we forecast
negative reported FOCF after leases of about EUR140 million for
fiscal 2023, after reporting negative EUR256 million in fiscal
2022."

Continued discounts and transformational costs are deteriorating
profitability, although cost-saving initiatives could support some
restoration in 2024. To reduce operating expenses and enable cost
saving initiatives to support profitability, the company is
implementing significant transformational actions to its operations
and manufacturing footprint. S&P said, "Consequently, we expect the
adjusted EBITDA margin to be severely reduced in 2023, compared to
our previous expectations of 9%-10%. We believe that cost-saving
initiatives will support Accell's profitability in 2024, although
the benefit will be outweighed to some extent by continued
discounts, which we think will continue to hamper EBITDA generation
until the first half of 2024. Consequently, we forecast an S&P
Global Ratings-adjusted EBITDA margin of about 7% in 2024, in line
with historical levels. Although we believe that the bulk of these
initiatives will be completed by the end of the first half of 2024,
we believe execution risk could still arise from longer, more
challenging discussions with social bodies and an operational
slowdown in the implementation of these measures."

A favorable product mix and higher average selling price (ASP)
should support revenue growth in 2024, although short-term hurdles
cloud earnings visibility. During the first half of 2023, Accell
reported an increase in bike revenue by about 9.8%, supported by
its ability to increase ASP above inflation and its favorable
product mix, thanks to Accell's positioning in premium e-bikes and
high-end performance traditional bikes. S&P said, "We anticipate
revenue growth will decelerate in the second half of 2023, due to
intense promotional activity, fierce competition among
manufacturers, and reduced consumer demand for e-bikes from its
all-time high in 2022. We expect these trends to persist in 2024
and think the slowdown will be particularly pronounced in Germany,
the third-largest European e-bike market, accounting for 48% of the
entire European e-bike sale volumes in 2022. We expect Germany's
GDP to decrease by 20 basis points in 2023, before expanding mildly
by 0.6% in 2024. Inflationary pressure will also persist in the
second half of 2023, with Germany's consumer price index (CPI)
growing by 6.3% in 2023, before reducing to 2.8% in 2024. We also
project the parts and accessories (P&A) business segment will
decline by about 5% in 2023 and remain flat in 2024, due to
excessive inventory and consumers' reduced propensity to repairs
amid budget constraints. Consequently, we forecast Accell Group's
total revenue to stagnate at about EUR1.4 billion in 2023, before
growing by 3.3% in 2024 to about EUR1.5 billion."

The long-term market tailwinds, secular changes in customer
preferences, and price increases still remain supportive of the
long-term industry outlook. Despite difficult market conditions in
2023 and 2024, we think that long-term e-bikes market fundamentals
remain strong, fueled by committed governments' spending for
cycling infrastructure in various European countries. Governments
are subsidizing citizens' shift toward clean transportation means,
such as e-bikes. Therefore, the substitution trend between e-bikes
and traditional bikes will improve e-bikes' penetration and will
expand the bicycle market value, in particular in Central and
Southern Europe. S&P said, "We believe that Accell Group is well
positioned to profit from these trends, given about 80% of its 2022
bike sales were derived from e-bikes. We think this share will grow
to 90% by 2027. The group's strategy remains focused on clear
customer segmentation, premiumization, and increased brand
penetration through a higher number of point of sales, which should
support revenue growth and EBITDA expansion over the medium to long
term."

S&P said, "The CreditWatch negative reflects the increased chance
that we could downgrade Accell if it does not address its fragile
liquidity position in the next few months and demonstrate a clear
path to reduce its inventory levels and restore working capital to
a sustainable position.

"In our base-case forecast, Accell Group's adjusted leverage will
remain well above 10x over the next 15 months, accompanied by
negative-to-neutral free operating cash flow after leases. We
therefore see the headroom at the current rating level as limited
and Accell's current liquidity position makes the company at risk
of a further deterioration in the macroeconomic environment or
operational underperformance.

"We plan to monitor and review Accell Group's liquidity position,
its ability to dispose of its high level of inventory, and to
increase its revenue base in the coming quarters."

S&P could lower the rating on Sprint Holdco if:

-- The company's liquidity position does not significantly improve
over the next few months through a successful securing of
additional credit lines or through material shareholder support;
or

-- The group is not able to demonstrate material growth in
operating performance, successfully implementing its cost-saving
measures, and significantly reducing its inventory position,
showing a normalization of its working capital.

If neither of these scenarios materialize, S&P would see an
increased risk of a liquidity shortfall and an unsustainability of
its capital structure.

S&P said, "We could remove the ratings from CreditWatch negative
and affirm them if Accell Group received additional external
support to address its liquidity position, its operating
performance improved, and we could see a clear trend of its
inventory position reducing over time, returning to an adequate
liquidity position.

"Environmental factors are a neutral consideration in our credit
analysis of Accell Group. We acknowledge that the company's
positioning in the e-bikes segment addresses the increasing
consciousness around healthy lifestyles and sustainability of
mobility, which can be cash flow accretive for the company over the
longer term.

"During 2022, Accell Group had to recall some of its bikes under
the Koga brand, due to a quality defect in frames that could have
caused safety issues to end users. The company provisioned about
EUR3 million costs related to the recall and estimated about EUR10
million of sales losses from the temporary retirement of the
brand's bikes. While customers' health and safety is one of the
major social factors in our analysis, we acknowledge that the
company took preventive actions to solve the issue and we deem that
social factors remain a neutral consideration in our credit
analysis of Accell Group.

"Governance factors are a moderately negative consideration in our
analysis of Sprint HoldCo B.V., as is the case for most rated
entities owned by private-equity sponsors. We believe the company's
highly leveraged financial risk profile points to corporate
decision-making that prioritizes the interests of the controlling
owners. This also reflects the generally finite holding periods and
a focus on maximizing shareholder returns."




===========
P O L A N D
===========

BANK OCHRONY: Fitch Affirms LongTerm IDR at 'BB-', Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Bank Ochrony Srodowiska S.A.'s (BOS)
Long-Term Issuer Default Rating (IDR) at 'BB-' and Viability Rating
(VR) at 'bb-'. The Outlook on the IDR is Stable.

Fitch is withdrawing the national ratings for BOS's PLN2 billion
senior unsecured bond programme because BOS is no longer issuing
debt under that programme and there is no Fitch-rated debt
outstanding under that programme.

KEY RATING DRIVERS

Standalone Profile Drives IDRs: BOS's Long-Term IDR and VR reflect
the bank's weaker franchise and less stable business model than
larger peers', higher-than-average risk appetite and weak asset
quality. The ratings are underpinned by BOS's moderate capital
buffers, recently strengthened by increased internal capital
generation, generally stable funding and liquidity position.

The Short-Term IDR of 'B' is the only option corresponding to the
Long-Term IDR. BOS's National Ratings of 'BBB-(pol)'/'F3(pol)'
reflect its lower creditworthiness relative to Polish peers'.

Intervention Risk Drives Operating Environment: The 'bbb' operating
environment score for Polish banks reflects the willingness of the
authorities to intervene in the banking sector and impose large
additional costs on banks. Mortgage credit holidays, which may be
prolonged for another year, follow a sizeable bank tax and the
substantial provisions banks have made for legal risks relating to
Swiss franc-denominated mortgage loans.

Narrow Franchise, Volatile Performance: BOS has increasingly
focused on specialised 'green' lending, which strengthens its niche
franchise and underlines a more consistent and less opportunistic
strategy than historically. Fitch's assessment of the bank's
business profile also reflects BOS's small market shares in sector
loans and deposits, and weaker and more volatile through-the-cycle
performance than peers'.

Above-Average Risk Appetite: BOS's risk profile is higher than the
industry average due to risks inherent in its growing
specialisation in financing of green activities, high single-name
loan book concentrations and meaningful appetite for the financing
of the real estate and construction sectors. Additional legal
charges related to the legacy Swiss franc mortgage loans are likely
to be meaningful but absorbable in light of BOS's recently improved
revenue generation on higher rates.

High Impaired Loans: BOS's impaired loans ratio should mildly
improve over 2024 and 2025, from a weak level, as Fitch expects the
bank to make further progress on cleaning up its legacy loan book
and to moderately grow its loan book. High interest rates and
inflation could still weigh on borrowers' payment capacity.
Asset-quality metrics have moderately deteriorated in 2023 in light
of macroeconomic challenges and a contracting loan book. BOS's
impaired loans ratio (15.2% at end-1H23) remains among the weakest
across Fitch-rated Polish banks. The loan loss allowance coverage
of impaired loans is only moderate at over 60%.

Weak Profitability Benefits from Higher Rates: High interest rates
will continue to provide strong support for BOS's profitability in
2H23 and 2024, mitigating charges related to legacy Swiss franc
mortgage loans, although Fitch believes this is not sustainable in
the longer term. Its assessment captures BOS's more vulnerable and
cyclical business model, including its high reliance on net
interest income for profit generation. The bank's operating
profit/risk weighted assets (RWAs) is lower than peers and Fitch
forecasts it will only average about 1% over 2022-2025.

Moderate Capitalisation: BOS's common equity Tier 1 (CET1) ratio of
15.5% at end-1H23 has increased due to improved internal capital
generation and lower RWAs. However, Fitch views the bank's
capitalisation as only moderate for its risk profile given high
single-name loan book concentrations, significant (albeit
declining) unreserved impaired loans and volatile through-the-cycle
performance.

Generally Stable Deposit Funding: BOS's fairly granular deposit
base, modest loans/deposits ratio (63% at end-1H23) and substantial
liquidity buffers underpin its funding and liquidity profile.
However, BOS's weaker-than-peers' deposit franchise, which is
reflected in its significant reliance on price-sensitive term
deposits, and less reliable access to wholesale funding markets
weigh on its assessment of its funding profile.

RATING SENSITIVITIES

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

BOS's VR and IDRs have moderate headroom. The ratings could be
downgraded on substantial and prolonged deterioration of asset
quality (the impaired loans ratio sustainably above 18%) that would
put significant pressure on the bank's profitability or
capitalisation (CET1 ratio below 12% without credible plans to
restore it).

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

The VR and Long-Term IDR could be upgraded over the medium term if
the bank lowers its risk appetite and substantially improves its
asset quality through healthy new loan origination, legacy loan
book clean-up and reduced single-name concentrations. This would
have to be combined with a sustainable improvement in profitability
and maintenance of moderate capital buffers and stable funding and
liquidity. In particular, an upgrade would require the impaired
loans ratio to fall below 8% and the operating profit/RWAs ratio to
sustainably exceed 1%.

OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS

The National Long-Term Rating of BOS's subordinated debt is notched
down twice from its National Long-Term Rating for loss severity to
reflect poor recovery prospects. No notching is applied for
incremental non-performance risk because write-down of the notes
will only occur once the point of non-viability is reached, and
there is no coupon flexibility before non-viability.

Government Support Rating Reflects Limited Support Probability

BOS's Government Support Rating (GSR) of 'b' reflects Fitch's view
of a limited probability of extraordinary sovereign support for the
bank, given that the Polish resolution framework constrains
provision of public support for troubled banks, in line with EU
state-aid rules. Fitch believes the state would endeavour to act
pre-emptively to avoid BOS breaching regulatory capital adequacy
requirements, due to the state's indirect long-term ownership of
the bank and its niche role in financing environmental projects in
Poland.

The state-owned National Fund for Environment Protection and Water
Resource Management (the fund) remains BOS's majority shareholder
with a 58% stake, while state-related entities jointly hold an
estimated 72% share. Fitch believes that it would be difficult for
the fund to increase capital at BOS without triggering state-aid
and bail-in considerations if private investors are unwilling to
participate in the capital injection.

OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES

BOS's National Ratings are sensitive to adverse changes to its
Long-Term IDR and its credit profile relative to Polish peers'.

BOS's GSR could be downgraded if the state's indirect ownership in
the bank falls below 50% or if Fitch believes that the state's
propensity to support the bank has weakened.

An upgrade of the bank's GSR would be contingent on a positive
change in the sovereign's propensity to support the bank. While not
impossible, this is highly unlikely, in Fitch's view, due to the
Polish resolution framework and EU state-aid considerations.

VR ADJUSTMENTS

The capitalisation and leverage score of 'bb-' is below the 'bbb'
implied category score due to the following adjustment reason: risk
profile and business model (negative).

The funding and liquidity score of 'bb' is below the 'bbb' implied
category score due to the following adjustment reason: deposit
structure (negative).

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

BOS's GSR is based on Fitch's assessment of the support from the
Polish sovereign.

ESG CONSIDERATIONS

BOS has an ESG Relevance Score of '4' for Management Strategy,
which reflects its view of heightened government intervention risk
in the Polish banking sector. This intervention risks affects the
banks' operating environment and their ability to define and
execute their strategies, and has a negative implication for its
ratings in combination with other factors. The score also
incorporates its view of heightened execution risk of BOS's
business plan given high management turnover. These are not key
rating drivers but have a negative impact on the bank's credit
profile and are relevant to the ratings in conjunction with other
factors.

Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity. 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.

   Entity/Debt                    Rating                Prior
   -----------                    ------                -----
Bank Ochrony
Srodowiska S.A.  LT IDR             BB-      Affirmed   BB-

                 ST IDR             B        Affirmed   B

                 Natl LT            BBB-(pol)Affirmed   BBB-(pol)

                 Natl ST            F3(pol)  Affirmed   F3(pol)

                 Viability          bb-      Affirmed   bb-

                 Government Support b        Affirmed   b

   senior
   unsecured     Natl LT            WD(pol)  Withdrawn  BBB-(pol)

   subordinated  Natl LT            BB(pol)  Affirmed   BB(pol)

   senior
   unsecured     Natl ST            WD(pol)  Withdrawn  F3(pol)




===========
S E R B I A
===========

SERBIA: S&P Affirms BB+/B Sovereign Credit Ratings, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings, on Oct. 6, 2023, affirmed its 'BB+/B' long- and
short-term sovereign credit ratings on Serbia. The outlook is
stable.

Outlook

The stable outlook reflects the balance between challenges from
weaker external demand in Serbia's key trading partners in the EU,
like Germany and Italy, its heavy dependence on Russian gas
supplies, and, to a lesser degree, the economic uncertainties from
the Russia-Ukraine war, against the country's long-term growth
prospects and prudent fiscal management.

Downside scenario

S&P could consider lowering the ratings if an economic slowdown in
Serbia's key EU trading partners, notably Germany and Italy,
affects Serbia's growth prospects and the government's fiscal
position more than expected, leading to an increase in public debt.
Additionally, a significant drop in Serbia's foreign exchange
reserves, perhaps from a commodity price shock or consistently
weaker net FDI inflows, could serve as a downward trigger.

Upside scenario

S&P said, "If we determine that Serbia's growth outlook, external
balances, and public finances are improving, and that the effects
of the economic slowdown for Serbia's key trading partners
dissipate, we may raise our ratings on the country. Less
geopolitical uncertainty would also create ratings upside."

Rationale

S&P's ratings on Serbia are supported by moderate public debt
levels and a credible monetary policy framework. Nevertheless, they
are constrained by the country's relatively weak institutional
framework, comparatively low economic wealth levels per capita, a
sizable net external liability position, and high euroization in
the economy.

Institutional and economic profile: Economic growth should recover
in 2024 from this year's muted levels

-- S&P expects real GDP growth to slow to 2.1% this year on tight
financial conditions, high inflation, and lower external demand,
before accelerating to about 3.0% from 2024.

-- Serbia will remain heavily reliant on Russian gas supplies
until alternative sources become available.

-- The path to EU membership hinges on normalizing ties with
Kosovo and aligning with EU sanctions on Russia.

S&P anticipates that multiple factors will drive a deceleration in
Serbia's real GDP growth to roughly 2.1% in 2023 from 2.5% in 2022.
A combination of relatively tight monetary policy and rising
inflation will curtail consumption. Additionally, diminished
external demand from Serbia's main trading partners, Germany and
Italy, will likely keep growth supressed, particularly since the EU
accounts for roughly 64% of Serbia's exports. However, from 2024
on, growth will quicken to roughly 3% on average over 2024-2026,
driven by improvements in the global economic landscape and
stronger domestic investment and consumption.

Before the war in Ukraine, Serbia's trade ties with Russia were
predominantly limited to the energy sector, thereby reducing direct
negative spillovers. Historically, about a third of Serbia's energy
and nearly 90% of its natural gas imports came from Russia.
However, disruption risk is limited due to a favorable three-year
contract with Gazprom. Although Russia halted gas deliveries to
Bulgaria in 2022, the Balkan Stream pipeline, which supplies Serbia
through Bulgaria, remains operational and still accounts for a
significant portion of the country's gas consumption. Conversely,
Serbia's oil imports are diverse, with 70%-80% sourced from
countries other than Russia, such as Iraq and Kazakhstan, via the
Janaf pipeline. Serbia has sought oil from alternative countries
since the EU ban on Russian oil in December 2022.

Although Serbia's aspirations for EU membership anchor policymaking
and foreign investor confidence, S&P thinks the path to accession
will be complex and prolonged. Since obtaining EU candidate status
in 2012, Serbia has only closed two of the 35 chapters of the
Acquis Communautaire, the collective set of EU legislation and
legal acts. On top of the typical areas of concern for EU
candidates, such as weaknesses with respect to the rule of law,
Serbia faces hurdles in the accession process, particularly with
the normalization of relations with Kosovo and Serbia's lack of
alignment with EU sanctions against Russia.

Due to the Russia-Ukraine conflict, the Western Balkans has gained
strategic importance for the EU, particularly for regional
security. Rising tensions between Serbia and Kosovo, especially in
Northern Kosovo, have prompted the EU and U.S. to ask both parties
to normalize relations. A recent EU-backed draft agreement between
Serbia and Kosovo includes mutual recognition of documents,
establishment of permanent missions, restrictions on representing
each other internationally, and the establishment of an association
of Serb municipalities in Northern Kosovo.

In S&P's view, there is some uncertainty on whether the draft
agreement will be formally signed and executed. This agreement is
essential for Serbia's and Kosovo's EU membership aspirations, but
only about 33% of Serbians support EU membership. There have been
protests against the agreement, and tensions persist between Serbia
and Kosovo. However, Serbia's economic prospects are tightly linked
to those of the EU, the key destination of Serbia's exports and
emigration and the primary source of imports, net FDI and
remittances. The EU plans a donor conference for both nations but
has stipulated that funds depend on the agreement's execution.

The EU also highlights Serbia's noncompliance with its sanctions on
Russia as an obstacle to its membership bid. Despite Western
pressure to sanction Russia, according to polls, many Serbs oppose
it. Serbia's dependence on Russian gas, though diversification
efforts are underway, further complicates matters. Therefore,
Serbia's EU accession progress will likely depend on both the
outcome and implementation of the EU-backed agreement with Kosovo
as well as its alignment with EU sanctions against Russia. S&P does
not expect a breakthrough over the coming year.

In that time, policymaking will likely remain stable under
President Alexander Vucic's administration. The EUR2.4 billion
Stand-By Arrangement (SBA), established with the IMF in late-2022,
underpins our opinion. It is designed to tackle external and fiscal
challenges in a challenging global economy, and it mandates
structural reforms, especially in the energy sector where
significant state-owned firms like Elektroprivreda Srbije (EPS) and
Srbijagas are active.

Flexibility and performance profile: Fiscal and external pressures
have eased

-- S&P expects the government to meet its fiscal deficit target of
2.8% of GDP this year, versus the 3.3% it initially planned.

-- Lower commodity prices and dampened demand for imported
merchandise goods will more than halve the current account deficit
this year from the high 6.9% of GDP in 2022.

-- Net FDI inflows continue to overfinance the current account
deficit, enabling the central bank to increase its foreign exchange
reserves to historical highs.

The government has revised its fiscal deficit target for the year
to 2.8% of GDP, from the initially planned 3.3%. This revision is
primarily due to reduced expenditure and higher-than-anticipated
revenue. The decrease in expenditure stems from reduced energy
subsidies to state-owned enterprises (SOEs), on the back of lower
global energy prices, with only about 50% of the allocated budget
being used. The revised budget introduces spending measures that
amount to approximately 1% of GDP and include hikes in pensions,
public sector wages, and additional agricultural subsidies.
However, these measures will be covered by excess revenue and
savings from a reduction in energy subsidies.

The government's revised budget aligns with the IMF's latest SBA
program targets. Despite moderate gross financing requirements for
2023, funding risks are manageable, given that a significant
portion of the financing is already secured. By July 2023,
government cash reserves stood at a sizable 11.2% of GDP.
Furthermore, the authorities can adjust capital expenditure to
manage costs, if needed. The government aims to continue fiscal
consolidation, adhering to the new fiscal rule from 2025 that
targets a budget deficit of 1%-2% of GDP. S&P's projections imply
general government deficits of 1.5% from 2025 and hinge on our
assumption of reduced fiscal transfers to SOEs, particularly in the
energy sector, due to recent domestic utility price hikes and
sectoral reforms, both central to the IMF program.

Based on S&P's projected fiscal and economic outlook, general
government debt net of liquid assets will drop to roughly 44% of
GDP in 2024, stabilizing around this level thereafter. Compared
with that of its peers, Serbia's debt levels are moderate. However,
over 70% of the government debt is denominated in foreign currency,
subjecting it to exchange rate volatility.

S&P said, "With declining commodity prices, resilient goods
exports, and lower merchandise imports, we expect Serbia's current
account deficit to shrink notably to 2.9% of GDP in 2023, from 6.9%
in 2022. Although we expect the current account deficit will
subsequently return to nearly 5% of GDP on average over 2024-2026,
we expect net FDI inflows will continue to comfortably cover the
deficit." FDI inflows have significantly contributed to expanding
and diversifying Serbia's export base and reducing external debt.
They have also enabled the National Bank of Serbia (NBS) to
strengthen its foreign exchange reserve position. International
reserves surged 39% to EUR25.7 billion ($27.0 billion) in the 12
months ended August 2023, and we expect reserves to remain broadly
stable.

Due to higher energy and food prices, inflation peaked in March at
16.2%. However, prices pressure has eased since then, with
inflation dropping to 11.5% by August. Serbia's slower decline in
inflation than other countries' can be partly attributed to utility
price hikes as a part of the IMF program. To prevent the emergence
of second-round effects, the NBS has continued to moderately hike
the policy rate since the beginning of the year, raising it by a
cumulative 150 basis points to 6.5%. S&P said, "Even if we expect
headline inflation to continue decelerating for the remainder of
the year, in annual average terms, we project inflation to remain
high at 12.4% this year. However, we assume inflation will drop
from 2024, somewhat anchored by the NBS's credibility, a tight
monetary policy stance, and stable exchange rate against the euro.
Furthermore, with global food and energy price pressures subsiding,
we anticipate both headline and core inflation to converge to the
NBS' target tolerance band of 3.0% plus or minus 1.5% in the second
half of 2024."

Overall, the banking sector in Serbia is well capitalized,
profitable, and liquid. In June, the system's reported capital
adequacy ratio was at a strong 22.3%, while the nonperforming loans
ratio reached a historical low of 3.0%. However, given the present
economic downturn and rising interest rates, we anticipate a
short-term rise in the nonperforming loans ratio. Additionally, the
issue of high euroization persists, with euro-denominated deposits
and loans accounting for more than 50% of total stocks.

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

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

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

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

  Ratings List

  RATINGS AFFIRMED

  SERBIA

   Sovereign Credit Rating                BB+/Stable/B

   Transfer & Convertibility Assessment   BBB-

   Senior Unsecured                       BB+




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

AERNNOVA AEROSPACE: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed Spanish aerostructures and components
producer Aernnova Aerospace S.A.U.'s Long-Term Issuer Default
Rating (IDR) at 'B'. The Outlook is Stable. Fitch has also affirmed
the company's senior secured rating at 'B+' with a Recovery Rating
of 'RR3'.

The affirmation reflects ongoing improvement of Aernnova's
profitability, supported by the recovery of the demand from
original equipment manufacturers (OEMs). Aernnova has a solid
backlog of orders, which provides the group with revenue visibility
and cash-flow generation.

The rating is constrained by Aernnova's small scale, limited
product range and customer diversification and currently still
high, albeit improving, leverage. Rating strengths are a robust
business profile, characterised by a leading position in the niche
aero-structure market, high barriers to entry, moderate programme
diversification, as well as long-term and successful cooperation
with its key customer, Airbus SE (A-/Stable).

KEY RATING DRIVERS

Recovery of Profitability: Aernnova's profitability margins are on
an upward trend, supported by market recovery and the ongoing
increase of OEMs' production rates. Its performance in 2022 was
broadly in line with its expectations. Nevertheless, the agency
does not expect Fitch-defined EBITDA margins to return to the
pre-pandemic level of 19%-21% in the medium term, due to
inflationary pressure, and fading but still challenging supply
chain issues.

Margin dilution is also a factor following the acquisition of
assets in UK in 2020 and Portugal in 2022 with lower levels of
profitability generation than Aernnova's. Its current forecast
incorporates a modest improvement in the EBITDA margin to about 13%
by 2026 from 7.6% in 2022 and expected 8.5% in 2023.

FCF to Improve: Fitch expects Aernnova's free cash flow (FCF)
generation to improve, driven by EBITDA and FFO generation
enhancement, normalisation of working capital fluctuations and
absence of dividends. Fitch forecasts FCF margin at about 2.5%-3%
during 2023-2024 and expect it to be over 3% from 2025. However,
Fitch does not expect FCF margins to return to pre-pandemic
levels.

Ongoing Deleveraging: The group's debt service capacity is
improving and Fitch forecasts EBITDA leverage to smoothly recover
to about 5.0x in 2025, which compares well with the 'b' midpoint of
5.5x under Fitch's Navigator for aerospace and defence (A&D). The
leverage improvement is strongly linked to expected gradual EBITDA
margin development, which Fitch expects the group will be able to
achieve, taking into account order backlog and strong underlying
demand for its products.

Middling End-Market Diversification: Over 70% of Aernnova's revenue
was exposed to the commercial end-market in 2022, while the share
of the defence end-market slightly increased to about 15% from
historically up to 10%. With this end-markets structure, Aernnova
is exposed materially to the cyclicality, which substantially
affected the group during the pandemic. In addition, about 25%-30%
of revenue is driven by wide-body aircraft, primarily the A350,
demand for which sharply fell during the pandemic. The recovery in
long-haul air traffic will help Aernnova's profitability recovery
as it supports demand for wide-body aircrafts.

Concentrated Customer Diversification: Aernnova's key customer is
Airbus, from which the group has historically derived more than
half of its revenue. Following the acquisition of Embraer's
aerostructures production facilities in Portugal in 2022, the
exposure to Airbus decreased from about 51% in 2021 to about 43% in
2022, albeit remaining significant. Concentration on Airbus makes
the group's performance highly dependent on its deliveries, which
increased 8.2% yoy in 2022 and is expected to rise by 6% in 2023.

Nevertheless, key mitigating factors are the long-term relationship
with Airbus, participation of Aernnova in numerous successful
Airbus programmes, such as A350 and A320, and the difficulty in
replacing Aernnova in the short term on most programmes.

Strong Industry Demand: Solid air traffic recovery has continued in
2023, driving the strong demand for aircrafts and rise in
deliveries. While the single-aisle segment is recovering faster
than twin aisle, the recovery in both segments was supportive of
Aernnova's operating performance. Fitch expects deliveries of
single-aisle aircrafts will rebound to pre-pandemic level by
end-2024 and wide bodies by end-2025. This will underpin Aernnova's
EBITDA and FCF margins recovery over the medium term.

DERIVATION SUMMARY

Aernnova operates as a Tier1/Tier2 supplier in the A&D industry and
has a good long-term relationship with its key customer, Airbus.

Aernnova is much smaller than higher-rated peers such as MTU Aero
Engines AG (BBB/Stable) and Leonardo S.p.A. (BBB-/Stable). Having
been severely squeezed during the pandemic, Aernnova's EBITDA and
FCF margins have gradually recovered since 2021. Aernnova's
Fitch-defined EBITDA margin of about 7.6% in 2022 was comparable
with Leonardo, but weaker than MTU Aero Engines and AI Convoy
(Luxembourg) S.a.r.l. (B/Stable). Aernnova's FCF margin was weak
during 2020-2022 and is forecast to be positive, at above 2% over
the rating horizon, which is broadly comparable with other
Fitch-rated aerospace suppliers.

Aernnova's path of operating profitability recovery is more
constrained than peers due to its high exposure to the wide-body
end-market (about 30% of revenue). Fitch expects FCF to recover to
pre-pandemic levels no earlier than 2026.

Aernnova's rating is constrained by a historically weaker capital
structure than MTU Aero Engines and Leonardo. Fitch expects
Aernnova's total debt/EBITDA in 2023 and 2024 to remain above 5.5x,
the 'b' midpoint under Fitch Navigator for A&D. More solid recovery
in wide-body aircrafts segments should support a quicker
improvement in EBITDA generation, leading to total debt/EBITDA to
below 5.5x from 2025.

Aernnova's high leverage is not uncommon for companies in the 'B'
rating category and compares favourably with that of peers such as
Al Convoy with net debt/EBITDA of about 6.3x at end-2021.

KEY ASSUMPTIONS

Fitch's Key Assumptions Within its Rating case for the Issuer

- Ongoing rebound of revenue by 15.8% yoy in 2023; further rise of
revenue by about 7% on average during 2024-2026

- Gradual improvement of profitability; EBITDA margin to improve to
about 13% by 2026 from 8.5% in 2023

- Capex of EUR22 million in 2023, followed by EUR20 million in
2024-2025 and EUR18 million in 2026

- No dividend payments till 2026

- No M&A

Key Recovery Rating Assumptions:

- The recovery analysis assumes that Aernnova would be considered a
going-concern (GC) in bankruptcy and that it would be reorganised
rather than liquidated. This is driven by its long-term operating
performance record and sustainable business, long-term
relationships with customers, and historically healthy FCF
generation.

- Its GC value available for creditor claims is estimated at about
EUR369 million, assuming GC EBITDA of EUR90 million. The GC EBITDA
of EUR90 million incorporates a downsized group profile following
the pandemic and its constrained recovery following the
acquisitions, which diluted Aernnova's profitability margins. The
assumption also reflects corrective measures taken in the
reorganisation to offset the adverse conditions that trigger
default.

- Fitch assumes a 10% administrative claim.

- An enterprise value multiple of 5.5x EBITDA is used to calculate
a post-reorganisation valuation, and is comparable with multiples
applied to A&D peers. The multiple is based on Aernnova's leading
market position in a niche industry, long-term and successful
cooperation with its key customer Airbus, high barriers to entry
and historically solid pre-pandemic profitability. However, the
enterprise value multiple reflects the group's smaller scale than
some Fitch-rated peers, and concentration in geography and the
customer base.

- Fitch deducts about EUR76 million from the enterprise value
relating to the group's various factoring facilities.

- Fitch estimated\s the total amount of senior debt for creditor
claims at EUR631 million, which includes a secured term loan B of
EUR490 million, a secured revolving credit facility (RCF) of EUR100
million, unsecured bilateral loans of EUR10 million and other loans
of EUR31 million.

- These assumptions result in a recovery rate for the senior
secured term loan B and (RCF) within the 'RR3' range to generate a
one-notch uplift to the debt ratings from the IDR.

- The principal waterfall analysis output percentage on current
metrics and assumptions is 59%.

RATING SENSITIVITIES

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

- Total debt/EBITDA below 5.5x on a sustained basis

- FCF margin above 3% on sustained basis

- EBITDA margin above 11%

- Increased customer and end-market diversification

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

- Total debt/EBITDA above 7.0x on a sustained basis

- Increase in FCF volatility

- EBITDA/interest paid below 2.0x

- EBITDA margin below 8%

LIQUIDITY AND DEBT STRUCTURE

Adequate Liquidity: As at end-2023, Aernnova's readily available
cash (adjusted for about EUR8.4 million by Fitch) made up EUR19
million. Expected positive FCF generation of about EUR24 million in
the next 12 months will provide additional cash cushion for the
group. Together with an available undrawn RCF of EUR100 million due
2026, it was sufficient to cover short-term maturities of about
EUR135 million, including amortisation of public-institution debt
of about EUR31 million and drawn factoring facilities of about
EUR85 million.

With expected gradual recovery of profitability and cash-flow
generation Fitch believes that Aernnova's liquidity position will
return to strong levels in the medium term. In addition to the
available undrawn RCF facility, as at end-June 2023 the group had
undrawn uncommitted bilateral facilities of EUR57million with
variable maturities till 2023-2025.

ISSUER PROFILE

Aernnova is a leading manufacturer of aerostructures and components
such as wings, empennages and fuselage sections as well as
secondary structures (doors and nacelles). The group also provides
engineering solutions for aerospace OEMs with composite and
metallic capabilities.

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.

   Entity/Debt                   Rating           Recovery   Prior
   -----------                   ------           --------   -----
Aernnova Aerospace S.A.U.  LT IDR   B    Affirmed             B

   senior secured          LT       B+   Affirmed    RR3      B+


KRONOSNET TOPCO: S&P Affirms 'B+' ICR on Term Loan B Liquidity
--------------------------------------------------------------
S&P Global Ratings affirmed itsr 'B+' ratings on KronosNet Topco
S.L. (KronosNet) and its subsidiary, KronosNet CX Bidco 2022 S.L.,
as well as on the group's senior secured EUR870 million term loan B
(TLB) (including the add on); the recovery rating on the debt
remains '3', indicating its expectation of about 50% recovery in
the event of default.

The negative outlook indicates the likelihood of a downgrade if
KronosNet does not deleverage below 5x and improve its free
operating cash flow (FOCF) by year-end 2024.

The proposed refinancing does not affect leverage and supports
KronosNet's liquidity as it will restore some capacity under the
RCF. The EUR70 million proceeds of the TLB add on will be used to
repay roughly EUR50 million of drawings under the RCF, which was
recently upsized to EUR200 million from EUR175 million, restoring
the total capacity to EUR87.5 million. Additionally, about EUR20
million will be used to repay local bank lines in Colombia. S&P's
leverage assumption is unchanged by the transaction, and we
continue to expect S&P Global Ratings-adjusted leverage of 5.3x by
year-end 2023, declining to 4.4x by year-end 2024.

The negative outlook indicates the likelihood of a downgrade if
KronosNet does not deleverage below 5x and improve its FOCF by
year-end 2024.

S&P could lower the rating if the group does not deleverage as it
expects, such that debt to EBITDA remains above 5x by year-end
2024. This could happen if:

-- The integration and realization of synergies with Comdata is
costlier and slower than we forecast; or

-- The company prioritizes acquisitions or shareholder returns
over deleveraging.

S&P said, "We could also lower the rating if growth challenges in
KronosNet's European and Latin American markets result in a
continued revenue decline, or if operation missteps compress EBITDA
margins to below 10%, resulting in prolonged weak FOCF.

"Although we understand it is highly unlikely, KronosNet's current
financial sponsor and an affiliate could take a material
participation in the company's TLB, which we believe would create
conflicting interests within the group. This would cause us to
reconsider whether the shareholder loan has sufficient equity-like
characteristics to be treated as equity when calculating credit
metrics and, potentially, to a negative rating action.

"We could consider revising the outlook to stable if KronosNet
focuses on reducing leverage while improving its operating
performance, such that, on a sustained basis, debt to EBITDA
improves below 5.0x. An outlook revision to stable would also hinge
on the company further improving its market share and customer and
geographic diversification, and raising EBITDA margins toward 15%,
which we consider average for the general support-services sector.

"Social factors are a moderately negative consideration in our
credit rating analysis of KronosNet, reflecting the potential for
personal data and security breaches. We see these as risks for CRM
service providers in general. Such risks could arise through
increased regulatory oversight and fines or reputation damage,
affecting a firm's competitive advantage. We do not assess
KronosNet as demonstrating company-specific weaknesses in the
processing of large volumes of client data relative to other CRM
providers, since we believe Konecta will help Comdata in resolving
its past weaknesses. Governance is also a moderately negative
consideration, as is for most rated entities owned by
private-equity sponsors. We believe the company's highly leveraged
financial risk profile points to corporate decision-making that
prioritizes the interests of the controlling owners. This also
reflects private-equity sponsors' generally finite holding periods
and focus on maximizing shareholder returns."




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

KEW SODA: S&P Affirms Prelim. 'B+' ICR & Alters Outlook to Stable
-----------------------------------------------------------------
S&P Global Ratings revised to stable from negative its outlook on
the preliminary 'B+' long-term rating on soda ash producer KEW Soda
Ltd. and affirmed the preliminary ratings, including that on the
senior secured notes due 2028 to be issued by WE Soda Investments
Holding plc.

The stable outlook mirrors that on the sovereign rating on Turkiye,
reflecting S&P's view of balanced risks to the sovereign
creditworthiness from the reimposition of orthodox monetary policy
settings.

S&P continues to cap the preliminary rating on KEW Soda at one
notch above the 'B' transfer and convertibility (T&C) assessment on
Turkiye because all the company's physical assets are in Turkiye,
exposing it to domestic risks that are beyond its control.

The outlook revision follows the similar action on the sovereign.
The stable outlook also reflects our expectation that the group's
debt to EBITDA, as adjusted by S&P Global Ratings, will remain
comfortably within the thresholds for the rating at 2.0x-2.2x in
2023. S&P expects adjusted debt to EBITDA to increase to about 2.4x
in 2024, based on its assumption that soda ash prices will decline
5%-10% annually over 2023-2024.

S&P said, "We continue to assess KEW Soda's stand-alone credit
profile (SACP) at 'bb', two notches higher than the long-term
rating on the company. nThis reflects the company's solid strong
market positions in its key regions and its advantageous cost
position. This supports very high profitability and resilient
earnings, with an EBITDA margin of 47% in 2022, despite the
increase in energy prices--a key cost in the production of soda
ash."

The preliminary rating on KEW Soda is constrained by its
geographical asset concentration. The company passes our sovereign
stress test, which includes both economic stress and a potential
currency devaluation and enables us to rate the company one notch
above the unsolicited 'B' long-term sovereign foreign currency
rating on Turkiye. Kew Soda passes our stress test because of its
export-oriented business (about 80% of total revenues in 2022),
corresponding to virtually all of its earnings being in hard
currency, and sizable cash holdings in offshore accounts. S&P's
rating on KEW Soda is capped at one notch above the foreign
currency sovereign credit rating on Turkiye, since virtually all
the group's physical assets are located in the country, and its
operations can be significantly affected by decisions beyond its
control, like government-imposed export restrictions.

The stable outlook mirrors that on the sovereign rating on Turkiye.
Although the group has passed S&P's stress test for a foreign
currency sovereign default, the preliminary long-term issuer credit
rating is capped at one notch above the foreign currency sovereign
credit rating on Turkiye (unsolicited B/Stable/B). This is because
virtually all the group's physical assets are in the country, and
its operations can be significantly affected by decisions beyond
its control.

S&P said, "We expect that, on a stand-alone basis, WE Soda will
maintain credit ratios that are strong for the rating. In our
base-case scenario, we anticipate S&P Global Ratings-adjusted debt
to EBITDA of 2.0x-2.2x in 2023, which we view as healthy given the
2.0x-3.0x adjusted leverage range we consider commensurate with the
'bb' SACP. We expect adjusted debt to EBITDA to increase to about
2.4x in 2024 due to lower soda ash prices. We also consider FOCF to
debt, which we expect to decrease to 27%-28% in 2023 and 22%-23% in
2024, from about 39% in 2022, due to increasing capital allocation
toward growth initiatives. However, we anticipate it will remain
within the 15%-25% we view as commensurate with the SACP. We expect
management will support credit metrics at these levels, given its
commitment to maintaining reported net debt to EBITDA (as
calculated by management) between 1.5x and 2.5x.

"We would lower the rating if we take the same action on the
foreign currency sovereign rating on Turkey and this translates
into a weaker T&C assessment, or if WE Soda's export revenue and
liquidity position in offshore accounts deteriorate, so that it no
longer passes our T&C stress test.

"We could also negatively reassess the SACP if we observe a marked
deterioration in its operating performance, such that adjusted debt
to EBITDA exceeds 3.0x and free operating cash flow ((FOCF) to debt
declines below 15% without clear prospects of recovery. This could
occur if we observe a sharp and prolonged deterioration in soda ash
prices due to a less-than-supportive market environment.

"Rating upside is constrained by KEW Soda's exposure to Turkiye;
this limits the rating to one notch above our sovereign T&C
assessment of 'B'. We could therefore raise the rating on KEW Soda,
all else being equal, following a positive rating action on
Turkiye."


PEGASUS AIRLINES: S&P  Affirms 'B+' ICR & Alters Outlook to Stable
------------------------------------------------------------------
S&P Global Ratings revised its outlook on the long-term issuer
credit rating on Pegasus Airlines to stable from negative and
affirmed the long-term issuer credit rating on Pegasus Airlines and
its issue rating on its senior unsecured debt at 'B+'.

The stable outlook on Pegasus Airlines mirrors that on Turkiye and
reflects the sovereign's creditworthiness and the Central Bank of
Turkiye's reimposition of orthodox monetary policy settings.

S&P said, "The rating action on Pegasus Airlines follows our rating
action on Turkiye.On Sept. 29, 2023, we revised our outlook on
Turkiye to stable from negative. At the same time, we affirmed our
unsolicited 'B/B' long- and short-term sovereign credit ratings and
unsolicited 'trA/trA-1' national scale ratings. The outlook
revision results in a similar action on Pegasus Airlines; this
rating action is triggered solely by our rating action on the
sovereign.

"We can rate Pegasus Airlines one notch above the long-term
sovereign credit rating on Turkiye (B/Stable/B). We maintain our
assessment on Pegasus Airlines' stand-alone credit profile at 'b+',
in line with the issuer credit rating. This reflects the airline's
prudent financial policy of maintaining a substantial cash balance
(EUR565 million as of June 30, 2023), mostly in readily accessible
hard currencies, and that most revenue is generated from
international passengers (83% as on June 30, 2023) and in hard
currencies. Therefore, we forecast that liquidity sources would
exceed uses even under our hypothetical sovereign default and T&C
stress tests. We would not rate Pegasus Airlines more than one
notch above the sovereign, given our assessment of Turkiye's high
country risk and the high exposure of the airline's operations to
the country.

"The stable outlook on our rating on Pegasus Airlines mirrors that
on the sovereign rating.

"We would lower the rating on Pegasus Airlines if we lower the
sovereign rating on Turkiye, for example, if pressure on Turkiye's
financial stability or wider public finances were to increase
further, potentially in connection with renewed currency
depreciation."

S&P could also lower its rating on the airline if:

-- It no longer passes our hypothetical sovereign default and T&C
stress tests; or

-- Adjusted funds from operations (FFO) to debt falls below 12% or
operating cash flow after lease payments turns negative. This could
potentially result from an unexpected significant decline in demand
for air travel to Turkiye.

S&P could raise the rating on Pegasus Airlines if it takes a
similar rating action on Turkiye, and the airline's stand-alone
credit profile improves, such as if its adjusted FFO to debt
reaches and remains above 30%.

This would also depend on the airline continuing to pass S&P's
hypothetical sovereign default and T&C stress tests.


TURK HAVA: S&P Affirms 'B' ICR & Alters Outlook to Stable
---------------------------------------------------------
S&P Global Ratings revised its outlook on government-related entity
Turk Hava Yollari (Turkish Airlines) to stable from negative. S&P
also affirmed its 'B' long-term issuer credit rating on Turkish
Airlines and its 'B' issue rating on its aircraft-backed
enhanced-equipment trust certificates.

The stable outlook on Turkish Airlines mirrors that on Turkiye and
reflects the sovereign's creditworthiness and the Central Bank of
Turkiye's reimposition of orthodox monetary policy settings.

The rating action on Turkish Airlines follows that on Turkiye.

S&P said, "On Sept. 29, 2023, we revised our outlook on Turkiye to
stable from negative. At the same time, we affirmed our unsolicited
'B/B' long- and short-term sovereign credit ratings and unsolicited
'trA/trA-1' national scale ratings. In accordance with S&P's
criteria for rating government-related entities (GREs), its outlook
revision on Turkiye results in the same action on Turkish Airlines.
The rating action on Turkish Airlines is triggered solely by its
rating action on the sovereign."

S&P said, "We maintain our assessment of Turkish Airlines'
stand-alone credit profile (SACP) at 'bb-'. We believe that the
airline's sound operating performance will continue during the last
quarter of 2023 and moving into 2024, given its impressive recovery
in air traffic. Higher load factors, supported by a weaker Turkish
lira--meaning that Turkiye remains an attractive travel destination
for international passengers--should continue to support strong
credit metrics. That said, there are risks to our base case,
considering that air travel passenger demand is subject to
lingering macroeconomic and geopolitical uncertainties, as well as
rising inflation in Turkiye, which is putting pressure on the
airline's cost base.

"Our sovereign rating on Turkiye caps our rating on Turkish
Airlines. This is because we view Turkish Airlines as a GRE, and as
such, it does not have sufficient protection from extraordinary
negative government intervention. Most importantly, the airline has
a strong link with the Turkish government. Turkish Airlines is the
country's top service exporter and generator of foreign-currency
earnings. It is 49.12%-owned by Turkiye Wealth Fund; one Class C
share is held by Turkiye's Ministry of Treasury and Finance
Privatization Administration; and the remaining 50.88% of shares
are publicly traded.

"The stable outlook on our rating on Turkish Airlines mirrors that
on the sovereign rating.

"We would lower the rating on Turkish Airlines if we lowered the
sovereign rating on Turkiye, for example if pressure on Turkiye's
financial stability or wider public finances were to increase
further, potentially in connection with renewed currency
depreciation.

"We could also lower the rating if Turkish Airlines' S&P Global
Ratings-adjusted funds from operations to debt falls below 6% on a
sustainable basis. We view this as unlikely, due to the airline's
ample headroom above this trigger." Nevertheless, it could result
from:

-- An unexpected and significant decline in passenger revenue if
mounting inflation curbs consumer confidence and travel
affordability, or if geopolitical tensions escalate;

-- A steeper decline than we expect in cargo revenue; or

-- Significantly higher fuel and labor costs than we expect, with
only a limited ability to pass through higher costs to customers.

S&P could raise the rating on Turkish Airlines if it took a similar
rating action on Turkiye. This would also depend on Turkish
Airlines' SACP not deteriorating unexpectedly in the meantime.




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

ANGELS EVENT: Taylors of Edinburgh Steps in to Pay Creditors
------------------------------------------------------------
Conor Matchett at The Scotsman reports that one of the businesses
behind the collapsed Edinburgh Christmas festival last year has
stepped in to pay creditors left in the lurch by their former
business partners.

According to The Scotsman, Taylors of Edinburgh, who run the
fairground rides which form part of the Christmas market in central
Edinburgh, stumped up the cash after their business partners
entered liquidation earlier this year.

The company had entered a joint enterprise with the original
contractors for the Christmas festival, Angels Event Experience,
called Visionar, The Scotsman relates.

Visionar was forced to take successful legal action against Angels
due to a breach of contract after the company unilaterally pulled
out of the contract with Edinburgh City Council to run the
festival, resulting in an unpaid bill of GBP800,000 in
compensation, The Scotsman discloses.

Taylors has announced unpaid bills resulting from lost work from
Edinburgh businesses have now been reimbursed by the company
despite the likelihood Visionar will see any of the money from
Angels is low due to the liquidation of the company, The Scotsman
states.

Statement of affairs papers linked to the liquidation of Angels
also states that HMRC is also owed more than GBP36,000, The
Scotsman notes.


FOODMEK: Goes Into Liquidation, 32 Jobs Affected
------------------------------------------------
Scott Reid at The Scotsman reports that a Fife food processing
equipment business established more than five decades ago has gone
bust with the loss of 32 jobs.

According to The Scotsman, the directors of Tayport-based Foodmek
have applied to the court to appoint insolvency specialist Shona
Campbell of Henderson Loggie as liquidator.

Foodmek was established in 1971 to supply processing equipment for
the food and drink industry and has been supplying some of the
biggest names in the UK and overseas for the past 52 years.

The business is said to have continued to operate profitably during
the pandemic thanks to fulfilling contracts for the pharmaceuticals
industry, The Scotsman relates.  However, since then, it has
experienced a "significant slowdown" in its order pipeline, The
Scotsman notes.


GEMGARTO PLC 2021-1: Fitch Affirms 'CCCsf' Rating on Class E Notes
------------------------------------------------------------------
Fitch Ratings has upgraded Gemgarto 2021-1 plc's class B notes and
affirmed the others.

   Entity/Debt             Rating            Prior
   -----------             ------            -----
Gemgarto 2021-1 PLC

   A XS2279559889      LT  AAAsf   Affirmed   AAAsf
   B XS2279560036      LT  AAAsf   Upgrade    AA+sf
   C XS2279560200      LT  A+sf    Affirmed   A+sf
   D XS2279560465      LT  A+sf    Affirmed   A+sf
   E XS2279560895      LT  CCCsf   Affirmed   CCCsf

TRANSACTION SUMMARY

Gemgarto 2021-1 is a securitisation of owner-occupied mortgages
originated by Kensington Mortgage Company Limited (KMC) and backed
by properties in the UK. The transaction features originations up
to December 2020 and the residual origination of the Finsbury
Square 2018-1 PLC (FSQ2018-1) transaction.

KEY RATING DRIVERS

Increasing CE: Credit enhancement (CE) has increased since the last
rating action in November 2022 due to amortisation of the senior
notes and the available non-amortising reserve fund. The increased
CE contributed to the upgrade and supports the affirmations.

Performance May Worsen: Since the last rating action, asset
performance has deteriorated with an increase in arrears. The
proportion of loans in arrears was 8.6% as of June 2023, a 4.2%
increase since the last review. However, this has also been driven
by the significant prepayments in the transaction between 2022 and
2023, reaching a maximum of 62% in January 2023. As a result, any
outstanding arrears have increased as a proportion of the total
(smaller) pool. Fitch expects asset performance to weaken as a
result of high interest rates and the cost of living crisis.

This is particularly relevant for specialist lending transactions
where arrears have historically been higher than UK prime average.
The ratings were able to withstand the additional stresses related
to hypothetical increases in the weighted average foreclosure
frequencies (WAFF).

Liquidity Access Constrains Ratings: The transaction benefits from
a dedicated liquidity reserve available to cover payment
interruption risk for the senior notes in the event of a servicer
disruption. However, the liquidity reserve only covers interest
shortfalls for the class A and B notes. The absence of a dedicated
liquidity for the class C and D notes prevents any upgrade above
the 'Asf' rating category.

RATING SENSITIVITIES

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

The transaction's performance may be affected by adverse changes in
market conditions and economic environment. Weakening economic
performance is strongly correlated with increasing levels of
delinquencies and defaults that could reduce CE available to the
notes.

Additionally, unanticipated declines in recoveries could also
result in lower net proceeds, which may make certain notes
susceptible to negative rating action, depending on the extent of
the decline in recoveries. Fitch conducts sensitivity analyses by
stressing both a transaction's base-case FF and recovery rate (RR)
assumptions, and examining the rating implications on all classes
of issued notes. Fitch tested a 15% increase in the WAFF and a 15%
decrease in the WARR, and there was no impact on the model-implied
ratings (MIR).

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

Stable to improved asset performance driven by stable delinquencies
and defaults would lead to increasing CE levels and potentially
upgrades. Fitch tested an additional rating sensitivity by applying
a decrease in the WAFF of 15% and an increase in the WARR of 15%,
and there was no impact on the MIRs.

DATA ADEQUACY

Fitch has checked the consistency and plausibility of the
information it has received about the performance of the asset pool
and the transaction. Fitch has not reviewed the results of any
third party assessment of the asset portfolio information or
conducted a review of origination files as part of its ongoing
monitoring.

Prior to the transaction closing, Fitch reviewed the results of a
third party assessment conducted on the asset portfolio information
and concluded that there were no findings that affected the rating
analysis.

Prior to the transaction closing, Fitch conducted a review of a
small targeted sample of the originator's origination files and
found the information contained in the reviewed files to be
adequately consistent with the originator's policies and practices
and the other information provided to the agency about the asset
portfolio.

Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis according to its applicable rating methodologies
indicates that it is adequately reliable.

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.


PATISSERIE VALERIE: Former CFO Denies Fraud Allegations
-------------------------------------------------------
Tristan Kirk at Evening Standard reports that the former chief
financial officer at collapsed bakery chain Patisserie Valerie has
denied fraud as he appeared in court alongside his wife for the
first time.

According to Evening Standard, Christopher Marsh, 49, Louise Marsh,
55, Pritesh Mistry, 41, and Nileshkumar Lad, 50, are all accused of
defrauding the company's shareholders and creditors between October
2015 and October 2018.

It is said they put the business in peril by inflating profits,
hiding debts, and presenting bogus figures in the company's annual
accounts and public statements, Evening Standard notes.

The Serious Fraud Office, which brought the criminal charges, said
GBP28 million was represented in the company accounts, while around
GBP10 million in debts were concealed, Evening Standard relates.

Westminster magistrates court heard banks were lied to about
reserves in the accounts of Patisserie Holdings Plc as well as the
reasons for cheques not going through, Evening Standard discloses.

It is also alleged the company's auditor, Grant Thornton, was
handed bogus invoices for fake vehicle purchases, Evening Standard
states.

The court was told Mr. Marsh intends to fight the charges at trial,
while the other defendants did not indicate any pleas, Evening
Standard notes.  District Judge Daniel Sternberg sent the case to
Southwark crown court for trial, Evening Standard relays.

A fraud investigation was opened in 2018, shortly before the bakery
chain tumbled into administration with a GBP94 million hole in its
accounts, according to Evening Standard.

The company and many of its shops were later bought out of
administration by Causeway Capital Partners, an Irish private
equity business, for GBP5 million, Evening Standard recounts.


PHARMACEUTICAL PACKAGING: Put Up for Sale by Administrators
-----------------------------------------------------------
Business Sale reports that the assets of Leeds-based pharmaceutical
packaging firm Pharmaceutical Packaging (Leeds) Ltd have been put
up for sale by administrators, following the company's collapse
earlier this year.

According to Business Sale, the sale of the assets will be handled
by asset advisory Walker Singleton via online auctions.

Mark Hodgett and Phil Pierce of FRP Advisory were appointed as the
company's joint administrators in July 2023, after it was hit by
rising supply costs and supply chain inflation, leading to the
business being unable to fulfil its financial obligations, Business
Sale relates.

The joint administrators initially sought to sell the business, but
these efforts proved unsuccessful, meaning its assets will now be
brought to auction, Business Sale notes.  The company's premises
total around 30,000 sq ft, with a manufacturing facility featuring
machines from manufacturers including Webmaster, ABG, Edal and
Arsoma.

The company's processes utilised a full range of storage, handling
and support equipment. Walker Singleton has invited interested
parties to make bids on the firm's operational equipment and
stock.

In the firm's accounts for the year to October 31 2021, its fixed
assets were valued at GBP343,417 and current assets at slightly
over GBP2.5 million, Business Sale states.  At the time, it owed
around GBP2.5 million in total to creditors, with net assets
amounting to GBP314,763, Business Sale discloses.


RECAST SPORTS: Founder Rescues Business Out of Administration
-------------------------------------------------------------
Company Rescue reports that Recast Sports, the sports streaming
service that collapsed into administration just a few days ago, has
now been rescued by its founder, Andy Meikle.

Details of the transaction are unclear as of yet, apart from the
fact that Meikle secured the deal via a company called Content
Technology Partners, Company Rescue notes.

Most of its staff were made redundant, but a handful have been
transferred over, Company Rescue states.

Originally, Recast Sports was set up in 2018 and run as a
subscription-free live and on-demand platform. Sports fans were
charged for watching specific content.  Its customers include
Manchester City Football Club and Internazionale.

Interpath Advisory were appointed to handle the company's
insolvency last month, once funding talks failed and led it to
collapse, Company Rescue discloses.


ROLLS-ROYCE & PARTNERS: Fitch Ups LongTerm IDR to BB, Outlook Pos.
------------------------------------------------------------------
Fitch Ratings has upgraded Rolls-Royce & Partners Finance Limited's
(RRPF) Long-Term Issuer Default Rating (IDR) to 'BB' from 'BB-. The
Outlook is Positive. Fitch has also affirmed RRPF's Short-Term IDR
at 'B' and RRPF's and RRPF Engine Leasing Limited's senior secured
debt long-term ratings at 'BBB-'.

The rating actions follow the upgrade of RRPF's 50% owner,
Rolls-Royce plc (RR) to 'BB' from 'BB-'. The Positive Outlook
mirrors that on RR.

KEY RATING DRIVERS

SCP Correlated With RR: RRPF's IDRs are based on Fitch's assessment
of the company's standalone creditworthiness, but the ratings are
constrained by the strong correlation between RR and RRPF's risk
profiles. RRPF's Long-Term IDR and assigned Standalone Credit
Profile (SCP) are both one notch below its implied SCP as its
assessment of its funding, liquidity and coverage, which is closely
linked to RR's Long-Term IDR, has a strong impact on its overall
view of RRPF's credit profile.

Cross-acceleration Clause: RRPF's debt includes a clause resulting
in an event of default on all RRPF's debt in case of a default of
RR's debt. Specifically, should RR's borrowings (more than GBP150
million or 2% of RR's consolidated net worth) be subject to
acceleration (due to an event of default at RR being triggered), it
would trigger an event of default at RRPF and give noteholders the
provision to declare all outstanding notes immediately due and
payable. As this applies to all of RRPF's debt, it results in a
strong correlation between RR and RRPF's default probabilities and
constrains RRPF's Long-Term IDR.

Resilient Standalone Profile: RRPF's SCP reflects its contained
leverage, staggered funding profile and stable asset utilisation
rates, which should protect its profitability in the event of a
slower recovery of long-haul air traffic. The assessment also
reflects RRPF's monoline business model, the overall modest size
and cyclicality of the spare engine lease sector and the individual
significance within the lessee base of RR (29% by revenue),

SSR Upgraded: Fitch has upgraded RRPF's Shareholder Support Rating
(SSR) to 'bb-'from 'b+', one notch below RR's Long-Term IDR. Fitch
believes that RR's propensity to support RRPF is high, but that its
ability to do so is constrained by its own rating. RRPF's SSR
primarily reflects RR's ownership level of only 50% given its JV
nature, but also its role and relevance to RR.

RRPF is a joint-venture (JV) between UK-based RR and US-based
leasing group GATX Corporation. Established in 1989, RRPF
specialises in the leasing of spare aircraft engines (largely from
RR) to around 60 airlines globally. RRPF is the world's largest
lessor of RR engines.

RRPF Engine Leasing Limited is a fully owned UK-domiciled
subsidiary of RRPF. RRPF provides an unconditional and irrevocable
guarantee on the notes issued by RRPF Engine Leasing Limited.

RATING SENSITIVITIES

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

- A downgrade of RR would likely lead to a downgrade of RRPF's
Long-Term IDR, in view of the cross-acceleration clauses included
in RRPF's debt terms.

- Absent a downgrade of RR, a significant increase in leverage or
an unexpected material weakening of RRPF's franchise could also
lead to a downgrade.

- A downgrade of RR or a reduced propensity to provide support
would result in a downgrade of RRPF's SSR.

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

- An upgrade of RR's Long-Term IDR would likely lead to an upgrade
of RRPF's IDR.

- Removal of the cross-acceleration clause in RRPF's debt terms
could also lead to an upgrade of RRPF's Long-Term IDR.

- An upgrade of RR would result in an upgrade of RRPF's SSR.

DEBT AND OTHER INSTRUMENT RATINGS: KEY RATING DRIVERS

The affirmation of RRPF Engine Leasing Limited's senior secured US
private placement notes, which are guaranteed by RRPF, and RRPF's
senior secured revolving credit facility (RCF) reflects Fitch's
expectation of outstanding recovery prospects for the RCF and the
notes, even under a stress scenario where engine values materially
drop. Under Fitch's criteria, secured debt of issuers with a
sub-investment-grade Long-Term IDR can be rated up to three notches
above the Long-Term IDR in case of outstanding recovery
expectations, subject to a cap at 'BBB-' for issuers with a
sub-investment-grade Long-Term IDR.

Noteholders and RCF counterparties benefit from an identical
security package (i.e. direct security interests over spare
engines) and financial covenants include a requirement for
outstanding debt not to exceed the lower of either the net book
value of pledged spare engines or 80% of their externally appraised
market value. The asset pool backing the liabilities is also
subject to concentration limits regarding engine types, lessees and
the proportion of off-lease engines.

Fitch's expectations of outstanding recoveries are primarily
underpinned by consistently low loan-to-market-value ratios (LTV;
defined as current market values/outstanding gross debt; broadly
unchanged yoy at around 50% at end-2022 and remaining below 60%
following the 2008 global financial crisis) and the young average
age. This is supported by spare engines' typically better value
retention (compared with aircraft assets) and more favourable
depreciation profile (in particular during the first phase of their
useful economic life).

DEBT AND OTHER INSTRUMENT RATINGS: RATING SENSITIVITIES

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

- A downgrade of RRPF's Long-Term IDR.

- A material increase in RRPF's LTV ratio (and therefore its
covenant headroom), or changes to the underlying security package
indicating weaker recoveries could lead to narrower notching
between RRPF's Long-Term IDR and the senior secured debt rating and
a downgrade of the senior secured notes. In addition, any
indication that projected engine market value declines exceeded
Fitch's current expectations could lead to a downgrade of the
notes.

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

- Any upgrade of the notes would be contingent on RRPF achieving an
investment-grade Long-Term IDR, as the senior secured debt ratings
of issuers with a sub-investment-grade Long-Term IDR are capped at
'BBB-'. This would require a two-notch upgrade of RRPF's Long-Term
IDR

ADJUSTMENTS

The SCP has been assigned below the implied SCP due to the
following adjustment reason(s): weakest link - funding, liquidity &
coverage (negative).

The capitalisation & leverage score has been assigned below the
implied score due to the following adjustment reason(s): historical
and future metrics (negative)

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

RRPF's SSR and Long-Term IDR are linked to RR's Long-Term IDR.

ESG CONSIDERATIONS

Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.

   Entity/Debt                           Rating            Prior
   -----------                           ------            -----
Rolls-Royce & Partners
Finance Limited     
                      LT IDR               BB    Upgrade    BB-

                      ST IDR               B     Affirmed   B

                      Shareholder Support  bb-   Upgrade    b+

   senior secured     LT                   BBB-  Affirmed   BBB-

RRPF Engine Leasing Limited

   senior secured     LT                   BBB-  Affirmed   BBB-


SALUS NO. 33: S&P Affirms 'BB(sf)' Rating on Class D Notes
----------------------------------------------------------
S&P Global Ratings lowered to 'A- (sf)' from 'A (sf)' its credit
rating on Salus (European Loan Conduit No. 33) DAC's class B notes.
At the same time, S&P affirmed its 'AA (sf)', 'BBB- (sf)', and 'BB
(sf)' ratings on the class A, C, and D notes, respectively.

Rating rationale

S&P said, "The rating actions follow our review of the
transaction's credit and cash flow characteristics. We believe that
the transaction's credit quality has remained stable over the last
year. Despite this, the class B notes are unable to withstand a 'A
(sf)' cash flow stress, due to higher interest rate stresses, but
pass at one notch lower at 'A- (sf)'."

Transaction overview

The transaction is backed by a senior loan originated in November
2018 by Morgan Stanley Bank N.A. (Morgan Stanley). The loan had an
initial term of three years with two one-year extension options
available, subject to the satisfaction of certain conditions. All
loan extension options have been exercised and the loan is due to
mature in January 2024.

The senior loan securing this transaction totals GBP367.5 million,
split into a GBP354.0 million term loan facility and a GBP13.5
million capital expenditures (capex) facility. There is also
GBP91.9 million in mezzanine debt, which is fully subordinated to
the senior loan. This remains unchanged since our previous review
in October 2022.

As of the July 2023 interest payment date (IPD), the property's
vacancy (by area) had decreased to 17.6% from 20.2% at our previous
review. Previously, the vacant space was on levels 5 to 8. Level 8
has now been let to Square Point Capital LLP. However, 107,551
square feet out of 124,195 square feet of space over three floors
(5, 6, and 7), remains vacant and has been available for lease
since its completion in April 2021.

As of the July 2023 IPD, total contractual rent is reported as
GBP32.1 million, up from GBP30.3 million at our previous review.
However, there is approximately GBP8 million worth of rent-free
incentives that expire in increments over the next three years
until March 2026. In addition, 2.9% of the total contractual rent
is up for renewal by the end of 2023 and another 1.2% by the end of
2024. The weighted-average lease term until break is 7.3 years,
which is longer than the 6.6 years at our previous review.

The tenant profile remains primarily professional firms, with the
two largest tenants being law firms contributing 43% of the total
contractual rent. The top five tenants contribute 75% of the total
rental income for the property. Retail tenants, including
restaurants, coffee shops, bars, and a gym, represent 4.4% of the
total rental income for the property.

S&P said, "Since our previous review, our S&P Global Ratings value
has increased by 4.2% to GBP457.0 million from GBP438.9 million.
Our overall view of the property remains unchanged and the increase
in value is driven by the year-on-year increase in contracted
rental income. We have assumed the same vacancy (15%) for the
property as in our last review. The London City submarket vacancy
is approximately 10%, while the current vacancy for the property is
17.6%. We have given some credit to some of the remaining space
being leased. In addition, our nonrecoverable expenses have
remained at 8% as nonrecoverable expenses have remained stable
since our previous review. We have increased the S&P Global Ratings
net cash flow (NCF) to GBP29.4 million from GBP27.9 million as a
result of the improved contracted rental income.

"We then applied a 6.0% capitalization (cap) rate against this S&P
Global Ratings NCF (which is consistent with our previous review)
and deducted approximately GBP8 million for rent-free periods and
5% of purchase costs to arrive at our S&P Global Ratings value. Our
S&P Global Ratings value represents a 32% haircut to the March 2023
market value of GBP670 million. We believe this market value is now
likely lower given the current higher interest rate environment."

  Table 1

  Loan And Collateral Summary

                         REVIEW AS OF  REVIEW AS OF  AT ISSUANCE
                         OCTOBER 2023  OCTOBER 2022  DECEMBER 2018

  Data as of             July 2023     July 2022     December 2018

  Senior loan balance
   (mil. GBP)              367.5         367.5         367.5

  Senior loan-to-value
   ratio (%)                54.9          49.7          61.3

  Contractual rental
   income per year
   (mil. GBP)               32.1          30.3          30.6

  Passing rent per year
   (mil. GBP)*              24.1          21.2          25.3

  Vacancy rate (%)          17.6          20.2           3.7

  Market value (mil. GBP)   670            740           600

  Date of market value    March 2023  September 2021  October 2018

*The difference in annual contractual rent and passing rent is due
to rent free periods.


  Table 2

S&P Global Ratings' Key Assumptions

                           REVIEW AS OF  REVIEW AS OF  AT ISSUANCE

                         OCTOBER 2023  OCTOBER 2022  DECEMBER 2018

  S&P Global Ratings vacancy (%) 15.0      15.0        5.0

  S&P Global Ratings expenses (%) 8.0       8.0        5.0

  S&P Global Ratings net cash
    flow (mil. GBP)              29.4      27.8       30.8

  S&P Global ratings value
    (mil. GBP)                  457.0     438.9      504.3

  S&P Global Ratings cap rate (%) 6.0       6.0        5.8

  Haircut-to-market value (%)    31.8      40.7       16.0

  S&P Global Ratings
    loan-to-value ratio
    before recovery rate
    adjustments; %)              80.3      83.7       72.9


Other analytical considerations

S&P also analyzed the transaction's payment structure and cash flow
mechanics. S&P assessed whether the cash flow from the securitized
asset would be sufficient, at the applicable rating, to make timely
payments of interest and ultimate repayment of principal by the
legal maturity date of the floating-rate notes, after considering
available credit enhancement and allowing for transaction expenses
and external liquidity support.

As of the July 2023 IPD, the available liquidity facility is GBP20
million. There have been no drawings.

S&P Said, "Our analysis also included a full review of the legal
and regulatory risks, operational and administrative risks, and
counterparty risks. Our assessment of these risks remains unchanged
since closing and is commensurate with the ratings."

Rating actions

S&P said, "Our ratings in this transaction address the timely
payment of interest, payable quarterly, and the payment of
principal no later than the legal final maturity date in January
2029.

"The transaction's credit quality has remained stable compared with
our last review. Although hybrid working has shifted demand
dynamics in the London office sector, there has been some
successful reletting of space over the last year. We do not expect
any significant increase in vacancy, and we have factored this into
our analysis when we calculated our revised S&P Global Ratings
recovery value."

The loan's initial maturity date was in January 2022, and it has
been extended twice (by one year each time) in line with the loan
agreement. Under the loan agreement, the loan cannot be extended
further. The collateral is a well-located, good-quality office
property in Central London and S&P believes the loan's refinancing
prospects are good.

S&P said, "We lowered to 'A- (sf)' from 'A (sf)' our rating on the
class B notes as they were unable to pass our cash flow stress at
'A' (sf). At the same time, we affirmed our 'AA (sf)', 'BBB- (sf)',
and 'BB (sf)' ratings on the class A, C, and D notes,
respectively."


ZEPHYR MIDCO 2: Moody's Upgrades CFR to B2, Outlook Remains Stable
------------------------------------------------------------------
Moody's Investors Service has upgraded Zephyr Midco 2 Limited's
("ZPG"), corporate family rating to B2 from B3 and its probability
of default rating to B2-PD from B3-PD.  At the same time, Moody's
has affirmed the B2 first lien backed instrument ratings to the
GBP535 million and EUR400 million Term Loan B and the GBP150
million equivalent senior secured revolving credit facility (RCF)
issued by Zephyr Bidco Limited. The outlook remains stable.

On October 5, 2023, ZPG announced that it is seeking consent from
its lenders to extend the maturities on its Term Loan B to 2028
from 2025. It will be reducing its GBP180 million of second lien to
GBP70 million (with its maturity extended to 2029 from 2026) using
the proceeds of GBP110 million of cash equity injection from its
supportive shareholders. While the refinancing will be carried out
at a higher interest margin, the company will be reducing its
outstanding reported debt to GBP952 million from GBP1.06 billion as
of October 2023.

"As a result of the equity injection and debt reduction, Moody's
expect Moody's adjusted gross leverage for ZPG (pro-forma for M&A
transactions) to trend to around 6.5x in 2023 versus 8.3x in 2022.
The company is likely to see meaningful de-leveraging over the next
12-18 months helped by the improved revenue growth prospects
although Moody's remain cautious of the difficult macro-economic
environment in the UK", says Maria Chiara Caviggioli, Assistant
Vice President and lead analyst on ZPG.

RATINGS RATIONALE

After being hit by Covid-19 in 2020, ZPG continued to face a
challenging operating environment until 2022, impacted mainly by
the energy market crisis. Overall revenues of the company declined
by 2% and 3% in 2021 and 2022 respectively (on a proforma basis)
driven by the revenue decline of 8% and 12% in its RVU segment
[comprising of websites including Confused.com and Tempcover
(insurance), Uswitch (energy & telecoms) & Money & Mortgages
(financial products)] despite the solid annual revenue growth of
over 15% in its Houseful segment (that comprises property
classifieds, software and data). In the year-to-date to August
2023, the company's overall revenue has grown robustly year-on-year
by 12% (on a proforma basis) supported by the recovery in the RVU
segment (15% year-on-year growth) but the growth in the Houseful
segment has dropped to 5% in the light of the difficult
macro-economic environment that has led to lower property
transaction volumes.

Moody's expects the company's overall revenue to grow by 10%-12% in
2023 on a proforma basis. Houseful segment (expected to be around
39% of total revenues) is likely to see around mid-single digit
revenue growth supported by (1) its subscription based software
model with 70% of customers on 2+ year contracts; (2) stable base
of agents in Classifieds with 85% on long-term contracts; (3)
stable lettings business despite reduced property transaction
volumes and (4) ability of the company to execute price increases.
RVU segment (61% of total revenues) remains on track to achieve
solid revenue growth in 2023 driven by (1) growth in insurance
revenues from using previously under utilised brands as well as
growth in new categories of insurance; (2) growing scale at
positive unit economics in online mortgage broking, despite higher
interest rate environment; (3) strong demand in banking and SME
products due to the higher interest rate environment; and (4)
favorable environment for Energy switching with the current
stabilization of wholesale energy prices at a lower level.

ZPG expects revenue growth to be considerably stronger in 2024
compared to 2023 as in particular it expects to benefit from the
roll-out of its multi brand, multi product strategy through which
it plans to leverage touchpoints with around 80% of UK households.
Over the course of 2020-2022, ZPG has strengthened its business
profile by making some strategic acquisitions including Yourkeys,
Penguin Portals, Mojo and Tempcover that have added to its growth
opportunities. Moody's nevertheless remains cautious of the current
difficult macro-economic environment and factors in some execution
risks associated with the delivery of the company's growth plan.

The company's reported (pro-forma) EBITDA in 2023 seems to be on
track to recover to pre-covid level of over GBP150 million. The
company has recently completed its cost efficiency programme (that
entailed a 20-25% headcount reduction in the Houseful segment) and
its profitability is also benefitting from the recovery in top-line
growth. For 2024, Moody's expect its reported EBITDA margin to
remain solid.

The company's gross leverage on a pro-forma basis (Moody's
adjusted) is likely to see a meaningful improvement and trend to
around 6.5x at the end of 2023 helped by EBITDA growth and debt
reduction. There is potential for rapid de-leveraging thereafter
subject to the company meeting its growth plan and a disciplined
approach towards funding M&A transactions. Free cash flow
generation of the company is likely to be positive but somewhat
weak in 2023 mainly due to the exceptional cash outflows towards
restructuring. ZPG currently has no plans to pay dividends in the
next 12-18 months and its debt documentation allows for dividends
once its reported net leverage falls below 4x (compared to 6.0x
pro-forma for last twelve months ended August 31, 2023).

ESG CONSIDERATIONS

Moody's assessed the group's governance to be a key driver for the
rating action. The agency positively recognizes the support from
ZPG's shareholders in the form of several equity injections to
support the company's M&A strategy (GBP330 million since the LBO)
and recent GBP110 million injection towards debt reduction.

LIQUIDITY

Moody's considers ZPG's liquidity to be adequate with a cash
position of over GBP40 million. In the first quarter of 2023 the
company disposed of its RVU International unit and used the
proceeds to repay the now fully undrawn GBP150 million RCF. The
next maturities are the first-lien term loans due 2028 following
the extension.

STRUCTURAL CONSIDERATIONS

The probability of default rating (PDR) of B2-PD is aligned with
the B2 CFR, reflecting a 50% recovery assumption. The B2 rating of
the first-lien term loans and RCF are now aligned to the CFR
reflecting the lower cushion provided by the second-lien term loan
that is being reduced to GBP70 million from GBP180 million through
equity injection.

RATIONALE FOR STABLE OUTLOOK

The stable outlook on the ratings reflects Moody's expectation that
the company will be able to grow its revenues and EBITDA largely in
line with its business plan over the next 12-18 months and maintain
its focus on continued de-leveraging and improved free cash flow
generation.

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

Upward pressure on ratings is likely to develop over time if (1)
the company establishes a track record of sustained strong revenue
and EBITDA growth; (2) achieves Moody's adjusted gross debt/ EBITDA
of sustainably below 4.5x and (3) its FCF/ Debt (Moody's adjusted)
improves towards 10%.

Downward rating pressure could develop if (1) company's revenue and
EBITDA falls materially behind its business plan; (2) its Moody's
adjusted gross debt/ EBITDA remains well above 6.0x in 2024 and
beyond due to underperformance and/ or debt-financed M&A or
material shareholder returns and (3) its FCF generation or
liquidity deteriorates meaningfully.

COMPANY PROFILE

Founded in 2007 and headquartered in London, Zephyr Midco 2 Limited
operates online property portals and websites and also provides
residential property software and data analytics. In 2022, the
company generated revenue and EBITDA of GBP433 million and GBP145
million respectively, on a pro-forma basis.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.


ZEPHYR MIDCO: S&P Affirms 'B-' ICR & Alters Outlook to Positive
---------------------------------------------------------------
S&P Global Ratings revised its outlook on the long-term issuer
credit rating on Zephyr Midco 2 Ltd. to positive from negative, and
affirmed the rating at 'B-'. S&P's issue ratings on the revolving
credit facility (RCF) and first-lien term loan facilities remain
unchanged at 'B-'.

The positive outlook indicates that S&P could raise its ratings on
ZPG in the next 12 months if the group performed in line with our
expectations and remained focused on deleveraging, leading to
stronger FOCF and interest cover.

S&P said, "The outlook revision reflects our expectation that ZPG's
operating performance and credit metrics will improve. We forecast
that the group will show strong deleveraging and post consistently
positive FOCF from 2023, after very high leverage and weak cash
flow in 2022. This view is supported by our expectation that
revenue and earnings will improve and second-lien debt will reduce
following the proposed refinancing. Higher interest costs will
partly offset the FOCF improvement.

"In our view, price increases across ZPG's businesses, increased
traffic across household service comparisons websites, and the
restart of consumer energy switching after years of disruption will
support organic revenue growth of about 15% in 2023 and about 20%
in 2024. We expect ZPG's S&P Global Ratings-adjusted EBITDA margin
will improve toward 30% through 2024, from 15% in 2022, reflecting
stronger revenue dynamics and the group's strong focus on cost
management, especially on central functions and discretionary
marketing spend. As a result, we forecast a decline in adjusted
leverage toward 6x by the end of 2024.

"That said, we also anticipate modest FOCF and relatively weak
interest coverage metrics because of higher interest costs. We do
not expect FOCF to debt will rise above 5% until 2025, and we think
EBITDA cash interest coverage will remain below that of 'B'-rated
peers at 1.2x-1.5x in 2023-2024. Under the proposed refinancing
terms, we forecast that the group will pay over GBP100 million in
cash interest in 2024, compared with GBP60 million in 2021, mostly
because of materially higher base rates."

The proposed extension of ZPG's capital structure will address
refinancing risks and reduce leverage. The group has launched a
process to extend the maturities on its existing RCF, first-lien,
and second-lien debt by three years. As part of the transaction,
its shareholders (including Silver Lake and Red Ventures) will
provide GBP110 million in new common equity, which will be used to
partially redeem the second-lien facility. Once completed, ZPG's
new capital structure will comprise:

-- An undrawn GBP150 million RCF due January 2028;

-- GBP882.5 million of first-lien term loans due July 2028 (split
across GBP and EUR tranches); and

-- GBP70 million of subordinated second-lien debt due July 2029.

The amended facilities will all be floating rate and will have
somewhat higher interest margins following the proposed
transaction. S&P understands the rest of the key terms under the
debt documentation will remain unchanged, including the springing
covenant on the RCF and the interest rate hedges the group entered
in January 2023, which expire in January 2025.

S&PS aid, "Recent trading confirms our view of ZPG's resilience to
macroeconomic headwinds. ZPG's business has expanded over the past
three years, following a series of acquisitions that increased the
depth and breadth of its operations in both the property and RVU
divisions. As a result, we think the group has stronger end-market
diversity now than it did after the take-private in the second half
of 2018, and this should bring increased resilience in a single or
vertical market.

"We anticipate that Houseful, ZPG's property division, will show
organic revenue growth of 5%-10% in 2023 and 2024, despite the
ongoing cooling off in the underlying property markets in the U.K.
and the Netherlands. This is largely because we expect ZPG will
continue to push price increases to its stable customer base. ZPG's
property division has a largely subscription-like business model,
with a sticky customer base and vertical integration across the
property value chain (market research, valuation, marketing,
financing, and refinancing). The increasing contribution from
multi-year, software-as-a-service (SaaS) products also enhances its
revenue stability and visibility.

"We forecast organic revenue growth of 15%-20% in 2023 and about
25% in 2024 at RVU, ZPG's online household services platform.
Persistent high inflation, higher interest rates, and tight
consumer budgets are leading to strong traffic in the division, and
we think that supply and demand dynamics are sound across its main
verticals." In particular:

-- Insurance (Confused.com, Tempcover) will benefit from increased
certainty after regulatory changes in 2022, as well as continued
inflationary pressures on home and car insurance premia. Last
year's acquisition of Tempcover will allow ZPG to tap the
fast-growing temporary insurance market, although its contribution
is still limited;

-- Personal finance (Money, Mojo) will continue to benefit from
the impact of higher interest rates on consumer budgets, and we
think that higher traffic will be sustained as mortgage holders
gradually enter their re-mortgaging windows (typically the first
two to five years are on a fixed-rate basis); and

-- Uswitch will benefit from the return of price-based consumer
energy switching activity, after wholesale energy price fell below
the government price guarantee in July 2023. S&P said, "Although we
consider that the extent of the recovery is uncertain at this
stage, we think that persistently high energy costs and tightening
consumer budgets will support a strong resurgence of switching
activity over the next two years. That said, we do not anticipate
meaningful volumes of consumer energy switching until 2024, as
short-term government measures to ensure energy providers focus on
profitability and building capital reserves remain in place until
the first quarter of 2024. We therefore do not expect this segment
will have returned to its historical revenue and earnings
contribution in 2024."

A greater degree of product integration should support organic
growth prospects in a fragmented and competitive sector. An
increasingly vertically integrated ecosystem for the property
sector, comprising the early stages in the property investment
process (market data and research through the Houseful division)
all the way through to the latter stages (comparing and securing a
mortgage, refinancing that mortgage through Mojo and other ZPG
consumer brands), could enhance ZPG's ability to retain customers
across the acquisition journey, thereby increasing the share of
fees captured by the group. S&P thinks ZPG's fast-growing Mojo
business will improve RVU's share of recurring customers, leading
to somewhat more stable revenue in a primarily transaction-driven
segment.

ZPG is also focusing on integrating its product offering across its
portfolio of brands. For instance, energy and telecoms services
comparisons business Uswitch includes the personal finance and
insurance offering of Money and Confused.com, and vice versa. This
level of product integration across platforms should allow ZPG to
capture a larger range of customer demographics and helps retain
customer traffic in a highly competitive industry.

S&P said, "We anticipate EBITDA margin expansion toward 30% over
the next 12-18 months. We think the group will operate on a much
leaner cost base compared with previous years, when it invested
heavily in personnel to drive product integration and innovation.
ZPG has increased its focus on controlling costs over the past two
years, spurred by the abrupt end to consumer energy switching and
worsening macroeconomic outlook. While the group will likely
re-hire to support the return of consumer energy switching volumes,
a tighter labor market and our expectation of lower inflation from
2024 should mitigate its impact on profitability margins.

"We consider that margin expansion materially beyond 30% is
unlikely in the near term, limited by RVU's lower margins and
increasing contribution to group revenue (64% by 2024), reflecting
its reliance on paid search marketing spend.

"In our view, ZPG's shareholders are supportive of a gradual
improvement in credit metrics. We think that the group's
shareholders--including private equity sponsor Silver Lake and
U.S.-based group Red Ventures--have been supportive of ZPG's
business and its capital structure, with GBP441 million in
subsequent equity contributions after the initial buyout, dedicated
to fund mergers and acquisitions and repay debt. We also consider
that the equity injection as part of the proposed refinancing
transaction reflects shareholders' ambition to improve ZPG's
balance sheet strength. Once completed, the group will have repaid
debt of GBP235 million in 12 months. If the group remains focused
on deleveraging following an expected improvement in earnings and
cash flow, a rating upgrade could be possible over the next 12
months.

"The positive outlook indicates that we could raise our ratings on
ZPG in the next 12 months if the group performed in line with our
expectations and remained focused on deleveraging, leading to
stronger FOCF and interest cover.

"We could revise our outlook to stable if ZPG saw slower revenue
growth and failed to improve EBITDA margins, or if it undertook
debt-funded acquisitions or shareholder distributions, leading to
sustained high leverage, FOCF to debt under 5%, and interest cover
below 1.5x.

"We could raise our ratings on ZPG if it delivered revenue and
earnings growth in line with our expectations, boosted by sound
operating performance across the property and RVU divisions, and a
strong recovery in consumer energy switching activity, leading to
FOCF to debt approaching 5% and improving EBITDA cash interest
coverage comfortably above 1.5x on a sustainable basis.

"Governance factors are a moderately negative consideration in our
credit rating analysis of Zephyr Midco 2 Ltd. Our assessment of the
group's financial risk profile as highly leveraged reflects
corporate decision-making that generally prioritizes the interests
of the controlling owners, in line with our view of the majority of
rated entities controlled by private-equity sponsors. This also
reflects their generally finite holding periods and focus on
maximizing shareholder returns."



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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.

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