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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

          Friday, December 15, 2023, Vol. 24, No. 251

                           Headlines



A U S T R I A

SIGNA HOLDING: Court Urged to Install Creditor Committee
SIGNA HOLDING: Insolvency Filing Reveals List of Creditors


F R A N C E

AIR FRANCE-KLM: S&P Assigns 'BB+' Long-Term ICR, Outlook Stable
BABILOU FAMILY: S&P Alters Outlook to Stable, Affirms 'B-' LT ICR


G E R M A N Y

IHO VERWALTUNGS: Moody's Affirms 'Ba2' CFR, Outlook Remains Stable
SC GERMANY 2023-1: Moody's Assigns Ba3 Rating to EUR7MM F Notes
TELE COLUMBUS: Fitch Ups LT IDR to 'C' on DDE Offer to Creditors


I R E L A N D

BLACKROCK EUROPEAN IV: S&P Affirms 'B-(sf)' Rating on Cl. F Notes
HARVEST CLO XXXI: S&P Assigns B- (sf) Rating to Class F Notes


I T A L Y

FABBRICA ITALIANA: S&P Affirms 'B' Long-Term ICR, Outlook Stable


K A Z A K H S T A N

NOMAD INSURANCE: S&P Upgrades LT ICR to 'BB+', Outlook Stable


P O L A N D

CANPACK SA: Fitch Affirms 'BB-' LT IDR, Alters Outlook to Stable


R U S S I A

SPB EXCHANGE: Central Bank Investigates Bankruptcy Petition


S P A I N

CELSA GROUP: Kirkland Advises Financial Creditors Committee


T U R K E Y

TURK TELEKOM: S&P Affirms 'B' LT ICR, Outlook Positive
TURKCELL: S&P Upgrades Long-Term ICR to 'B+', Outlook Positive


U N I T E D   K I N G D O M

DIGNITY FINANCE: S&P Lowers Class B Notes Rating to 'CC (sf)'
GEMGARTO PLC 2023-1: Moody's Assigns B1 Rating to GBP2.7MM F Notes
NOVELTEA: Feature Spirit Buys Brand, IP Assets After Liquidation
ROLLS-ROYCE PLC: S&P Upgrades ICR to 'BB+', Outlook Positive
THAMES WATER: Appoints Christ Weston as New Chief Executive

VEDANTA RESOURCES: S&P Lowers ICR to 'CC', Keeps CreditWatch Neg.


X X X X X X X X

[*] BOOK REVIEW: The Heroic Enterprise

                           - - - - -


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A U S T R I A
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SIGNA HOLDING: Court Urged to Install Creditor Committee
--------------------------------------------------------
Marton Eder at Bloomberg News reports that creditor associations in
Austria have asked the insolvency court to install a committee of
creditors to improve transparency, according to public radio ORF.

ORF said the committees typically have 2-7 members, notes Bloomberg
News.

"With a creditor committee we can ask the insolvency administrator
the most burning questions," KSV1870 creditor association's
Karl-Heinz Goetze told ORF. "We don't know at all how they compiled
the liabilities, what the restructuring plan looks like, what the
next steps need to be and what the financing will look like."

SIGNA HOLDING: Insolvency Filing Reveals List of Creditors
----------------------------------------------------------
Libby Cherry at Bloomberg News reports that Signa Holding's
insolvency filing reveals a preliminary list of creditors that
ranges from banks and Saudi Arabia's Public Investment Fund to
private jet and helicopter charters.

Signa Holding gave a detailed explanation of its financial
difficulties in the court application, pointing to headwinds
including the ECB's scrutiny of its creditor banks to higher
construction costs, Bloomberg relates.

According to Bloomberg, in a liquidation scenario presented in the
filing, the company would face about EUR5.3 billion of
liabilities.

The biggest contribution -- EUR1.8 billion -- comes from a line
mysteriously dubbed as "liabilities which are not (yet) counted in
the balance sheet", Bloomberg notes.

Signa Holding has to repay creditors at least 30% of their claims
within two years of an agreement with creditors as part of the
self-administered restructuring, Bloomberg states.

In the meantime, Signa Holding is trying to secure more funds,
Bloomberg relays, citing the filing.



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F R A N C E
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AIR FRANCE-KLM: S&P Assigns 'BB+' Long-Term ICR, Outlook Stable
---------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' long-term issuer credit
rating to Air France-KLM (AFKLM). S&P also assigned the 'BB+' issue
and '3' recovery ratings to the company's senior unsecured debt.

The stable outlook reflects that S&P expects AFKLM's earnings will
continue increasing, led by higher passenger traffic and robust
fares that mitigate cost pressures, while its large capex
requirements will be partly absorbed by solid operating cash flows,
translating into sustained adjusted FFO to debt of at least 30%.

S&P's rating on AFKLM reflects the group's large size and the
extensive scope of its air passenger operations, underpinned by
leading positions in major hubs. AFKLM is the second-largest
airline in Europe after Deutsche Lufthansa (BBB-/Stable/A-3) and
fifth largest in the world, as measured by revenue over the past 12
months. It offers one of the world's largest route networks, with
the focus on medium- and long-haul destinations, as reflected by
the highest revenue-passenger-kilometers (RPKs) among the European
peers, and serves all major regions (such as Europe, North America,
Asia Pacific, Africa and Middle East, Latin America, and the
Caribbean) with no single market accounting for more than one-third
of network revenue. Broad geographic diversity reduces AFKLM's
dependency on local economies and forms a buffer against localized
event risks. AFKLM also has some exposure to a low-cost
point-to-point business, with about 20% of its operational fleet
operated by the Transavia brand to and from the Netherlands and
France. That said, this is a small segment generating under 10% of
the group's revenue. AFKLM addresses both business and leisure
travel, while, like other major European peers, it has been
expanding its premium economy leisure offering. This travel segment
has enjoyed strong post-pandemic demand, in contrast to the slower
recovery in corporate travel, which has been partly substituted by
an increased use of video conferencing and other digital solutions.
Notwithstanding fierce competition, AFKLM holds 60%-65% of the
takeoff and landing slots at its major hubs in Paris (Charles de
Gaulle [CDG]) and Amsterdam (Schiphol), which are the Europe's two
largest airports after Istanbul and London (Heathrow) by number of
passengers. It therefore benefits from wealthy catchment areas in
France and the Netherlands, which normally generates solid demand
for travel.

AFKLM's presence in non-passenger business enhances its scale and
scope of operations. The company is active in air freight and
maintenance repair and overhaul (MRO) business. The group recently
facilitated the development of these segments by concluding various
partnerships. For example, within air freight, AFKLM partnered with
one of the global leading container liners CMA CGM (BB+/Stable/B),
which has its own cargo freight division and is subscribed to a
minority stake in the group. That said, S&P estimates the
contribution of AFKLM's non-passenger operations to the group's
EBIT--and hence to the diversity of its income streams beyond the
core air passenger business--as lower than that of its closest peer
Deutsche Lufthansa, which generates 20%-25% of EBIT from air
freight and MRO activities under normal operating conditions.

AFKLM's EBIT margins, although significantly improving, are still
below these of some of its closest rated peers, which weighs on our
business risk profile assessment. During the pandemic, AFKLM
initiated a major transformation program aimed at, for example,
restructuring its short-haul operations, which it largely completed
on target. It has allowed the group to lower its unit cost (mainly
related to labor and fuel). In addition, in 2022, AFKLM accelerated
a large fleet renewal and simplification program, which it launched
in 2019. The group aims to rejuvenate its fleet with new-generation
aircraft emitting 15%-25% less carbon dioxide (CO2), also in the
view of the stiffening environmental regulations. A younger and
less heterogenous fleet should contribute to a further unit cost
reduction. Notwithstanding ongoing efficiency improvements, we
think that it might take some time to close the gap between AFKLM's
EBIT margins and those of some of its closest airline peers. We
expect International Consolidated Airlines Group (BBB-/Stable/--)
and Delta Air Lines (BB+/Positive/--) to recover their EBIT margins
back to the pre-pandemic level of at least 10% by 2024. This
contrasts with AFKLM's own target of 7%-8%, which is more
comparable with Lufthansa's 2024 target of at least 8%.

Like other airline peers, AFKLM's business risk profile is also
tempered by the risky characteristics of the underlying industry.
We believe that the airline sector is susceptible to economic
cycles; oil price fluctuations; high capital intensity; challenges
and rising costs from tightening environmental regulations;
unforeseen event risk, such as terrorism attack and disease
outbreak; and overproportionate exposure to the industrial actions
across the entire aviation sector, including air-traffic
controllers, pilots and flight attendants, and ground personnel.

New aircraft deliveries will reduce the fleet's running cost and
the environmental impact over time but weigh on AFKLM's cash flows
and balance sheet. The group's goal is to renew 40% of its fleet by
2025 with a new generation aircraft and more than two-thirds by
2028. However, the new orders translate into significant capital
spending. S&P said, "We expect AFKLM's gross capex (before sale and
leaseback) to increase to up to EUR4 billion per year in 2023-2024
(assuming no delivery delays) from about EUR3 billion in 2022 and
almost double compared with the low 2021 level induced by the
pandemic. Our base-case scenario indicates that the group's
operating cash flows will only partly cover the mounting capex
requirements, translating into a moderate buildup of adjusted debt
during 2023-2024 from about EUR10 billion as of Dec. 31, 2022 (and
about EUR9 billion before the pandemic)."

S&P said, "That said, we believe that AFKLM will maintain its
credit metrics commensurate with the 'BB+' rating due to expected
EBITDA growth. Our forecast hinges on steady air travel strength,
lingering supply side constraints, and rational industrywide
capacity deployment underpinning the sector's ability and
willingness to pass cost inflation to passengers through air fares
consistently above pre-pandemic levels. We expect demand (based on
RPKs) for AFKLM's flights--so far largely inelastic to
cost-of-living inflation and increased interest rates--in 2023 to
increase to as much as 95% of pre-pandemic levels (taking into
consideration the group's capacity guidance of 95% of pre-pandemic
base) from 81% in 2022. This supports air passenger yields, which
increased by about 7% year-on-year in the first nine months 2023,
after 8.5% in full-year 2022 or about 16%, compared with full-year
2019. In 2024, we expect RPK of up to 105% of 2019 levels,
underpinned by the increased focus on the medium- to long-haul
destinations and full-year contribution from the recovery of
China-linked destinations. We also think that air passenger fares
will remain high and largely offset potentially elevated fuel
prices and rising operating costs, which we forecast in 2024.

"We forecast a steady EBITDA improvement. In tandem with revenue
growth, we expect S&P Global Ratings-adjusted EBITDA to increase to
EUR4.2 billion-EUR4.4 billion in 2023, from EUR3.9 billion in 2022,
and expand further to up to EUR5 billion in 2024. This should help
preserve adjusted FFO to debt of at least 30%, our 'BB+' rating
threshold, compared with about 31% in 2022. That said, the likely
increasing adjusted debt (including hybrid capital, which we view
akin to debt) is a potential headwind to credit measures if not
accompanied by prospective growth in earnings and cash flow. We
note the uncertainty about the interplay between resilience of
consumer demand and ticket prices (yields) amid a difficult
macroeconomic and geopolitical backdrop over the next few quarters,
which may exert additional pressure on EBITDA. Currently, ticket
prices across the industry are particularly high, supported by
capacity expansion lagging strong demand growth following years of
challenging travel conditions due to the COVID-19 pandemic.
Consumers are prioritizing spending on holidays despite
cost-of-living pressure. However, if real disposable incomes fall
further and unemployment rises, we think this could stress ticket
prices. We also acknowledge that visibility beyond the next few
months is low, given the persistent short-term booking trends.

"We consider AFKLM a government-related entity. Our view is
underpinned by the significant minority stake (28.6%) the French
government holds in the group, which doubled from 14.3% in April
2021. During the pandemic, France provided AFKLM with state aid
under the Temporary Framework Scheme, because the airline faced an
acute risk of operational disruption and liquidity shortfall. Under
the same regulatory framework, AFKLM also received financial
support from the Dutch government, which holds a 9.3% share in the
group. The scheme was introduced during the pandemic as a systemic
stress event and was also available to non-government-related
entities and closed in June 2022. Since then, AFKLM's credit
quality has significantly improved. The group repaid the last
element of the state aid in April 2023, thus ceasing to be liable
to the scheme. In our opinion, the provision of government support
to an airline is subject to strict EU competition regulations under
normal trading conditions. Therefore, we view the likelihood of
extraordinary government support in the foreseeable future as low
and as such we do not apply any additional notches for support to
AFKLM's SACP.

"The stable outlook reflects our expectation that AFKLM's EBITDA
will continue increasing, led by resilient passenger traffic and
robust fares that mitigate cost pressures, while its large capex
requirements will be largely absorbed by solid operating cash
flows, translating into a sustained adjusted FFO to debt of at
least 30%.

"We could lower the rating if AFKLM's EBITDA growth is unexpectedly
interrupted and its adjusted FFO to debt falls short of 30%, with
limited prospects of improvement. This could be due to, for
example, lower growth in passenger volumes and weaker air passenger
yields than we anticipate, or a surge in fuel prices that AFKLM is
unable to pass on to customers via higher fares.

"We could also downgrade AFKLM if it made a significant debt-funded
acquisition leading to a sustainable deterioration in the group's
credit ratios below the rating commensurate level, or if it adopted
an aggressive shareholder remuneration policy.

"We could raise our rating if AFKLM strengthens its adjusted FFO to
debt to at least 45% on a sustainable basis, underpinned by
resilient improvement in operating efficiency (unit cost) and
profit margins.

"Social factors are a moderately negative consideration in our
credit rating analysis. This reflects the correlation of air
passenger traffic and AFKLM's operating performance with health and
safety risk. In general, AFKLM was hit hard by the pandemic, a
health and safety risk, and had to apply for a state aid under the
Temporary Framework Scheme. Following the lift of pandemic-related
travel restrictions, AFKLM has seen significant recovery in
domestic and European short-haul leisure, in particular, while
corporate and some international flying is taking longer to return.
In 2022, demand for AFKLM's flights (as measured in RPKs) recovered
to about 80% of 2019 levels from just about 40% in 2021. In 2023,
we expect the recovery to continue, but still forecast RPK reaching
the pre-pandemic level or slightly above only in 2024."

Environmental factors are a moderately negative consideration, like
the broader airline industry, reflecting pressure to reduce
greenhouse gas emissions. Therefore, AFKLM will continue upgrading
its fleet, which is about 12.1 years old, with more fuel-efficient
aircraft. This will significantly increase capex above the deflated
pandemic levels.


BABILOU FAMILY: S&P Alters Outlook to Stable, Affirms 'B-' LT ICR
-----------------------------------------------------------------
S&P Global Ratings revised its outlook on Babilou Family SAS to
stable from positive and affirmed its 'B-' long-term issuer credit
and issue ratings on the company and its EUR797 million term loan B
(TLB).

The stable outlook reflects S&P's expectation that Babilou will
continue to report sound operating performance focusing on its
greenfield strategy for growth, such that leverage should continue
to reduce and FOCF remain about neutral in 2024.

S&P said, "Babilou demonstrated sound operating performance in
2023, although slightly below our base-case expectations on lower
occupancy trend. We expect consolidated revenue will reach EUR860
million in 2023 reflecting year-on-year growth of around 10%
compared with 2022, driven by positive pricing dynamics in all
geographies and expansion of the network through greenfield and
tuck-in mergers and acquisitions (M&A). That said revenue was
slightly below our previous expectations because of lower occupancy
due to staff shortages in Germany and the Netherlands, slower
ramp-up of centers acquired in Luxembourg, and slower start of the
academic year (September) in France. We expect Babilou will focus
on its greenfield strategy for growth in the current environment.
This should lead to a revenue increase of about 5% to about EUR900
million in 2024.

"We expect our adjusted EBITDA to reach close to EUR205 million,
from EUR170 million in 2022, with margin improving to about 24%
from 22% in 2022. Cost inflation, notably on energy and wages, was
compensated by pricing increases and strong profitability in
business to consumer non-subsidized countries. We also expect the
group to report lower restructuring expenses in 2023 on lower M&A
activity this year. We forecast adjusted EBITDA margin will remain
roughly stable in 2024 with adjusted EBITDA reaching about EUR215
million.

"FOCF after leases is, however, expected to remain minimal in 2023
and 2024. We now think that Babilou's ability to generate
structurally positive FOCF after leases will be delayed. The group
generated about EUR5 million in 2022 and we previously expected
that FOCF after leases should reach about EUR20 million in 2023.
However, we now anticipate FOCF after leases will be slightly
negative this year due to a higher cash interest burden in the
context of rising interest rates and negative working capital
outflow, based on the timing of payment of French subsidies and
change in invoicing seasonality in Luxembourg and Netherlands. We
expect next year an increased focus on greenfield projects and
sustainable initiatives will increase capital expenditure (capex),
such that FOCF should remain about neutral in 2024. That said we
expect the group will continue to successfully roll out its growth
strategy and investments, resulting in FOCF turning structurally
positive in the medium term as it gains efficiency through scale
and increased occupancy.

"Leverage should reduce in the next two years, in the absence of
significant debt-funded acquisitions. We expect Babilou's leverage
will improve to 6.0x-5.5x in 2023 from 6.5x in 2022, on earnings
growth. We believe that it should further reduce to below 5.5x in
2024 as the group continues to successfully roll out its growth
strategy, improving earnings. Our projections do not include large
debt-funded M&A that could increase leverage materially and hamper
FOCF.

"The stable outlook reflects our expectation that Babilou will
continue to report sound operating performance, despite
macroeconomic and industry pressure, focusing on its greenfield
strategy for growth. We anticipate the group will report about
neutral FOCF after leases in 2023 and 2024 while maintaining
leverage of 6.0x-5.5x in 2023 reducing below 5.5x in 2024, assuming
no significant M&A."

S&P could lower its rating on Babilou if, in the next 12 months:

-- Further economic or industry disruption weaken the group's
operating performance and render the capital structure's
sustainability uncertain.

-- FOCF after leases remains negative for a prolonged period,
weakening Babilou's liquidity position; or

-- The group pursues a more aggressive financial policy including,
for example, debt-funded acquisitions, resulting in persistently
very high and unsustainable leverage.

S&P could consider an upgrade if Babilou improves profitability,
such that FOCF after leases becomes structurally positive and
reaches at least EUR10 million-EUR15 million per year. Any upgrade
would also be predicated on a financial policy commitment to
leverage being sustainably below 6.0x-5.5x, supported by a track
record of deleveraging.




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G E R M A N Y
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IHO VERWALTUNGS: Moody's Affirms 'Ba2' CFR, Outlook Remains Stable
------------------------------------------------------------------
Moody's Investors Service has affirmed the Ba2 long term corporate
family rating and Ba2-PD probability of default rating of IHO
Verwaltungs GmbH ("IHO-V" or "group"). Concurrently, Moody's
affirmed the Ba2 instrument ratings on the group's senior secured
notes due 2026, 2027, 2028 and 2029. The outlook remains stable.

RATINGS RATIONALE

The affirmation of IHO-V's ratings reflects Moody's continued solid
liquidity assessment for the group, and expectation of most of its
credit metrics to improve and reach or stay within the rating
agency's defined ranges for the Ba2 rating category over the next
two years.

That said, at this point some of IHO-V's financial ratios are at
weak levels when compared with Moody's guidance for a Ba2 rating.
Specifically, the group's standalone interest coverage of about
1.7x funds from operations (FFO, defined as dividends received
minus operating costs) to interest expense as of September 30, 2023
remains below Moody's 2x minimum expectation. Also, the group's
market value based net leverage (MVL) of around 40% currently just
falls within the 30%-40% guidance for a Ba2 rating, after hovering
between 40%-45% since the beginning of this year.

Anticipating IHO-V's aggregate dividend collections from its
subsidiaries Continental AG (Continental, Baa2 stable), Schaeffler
AG (SAG, Baa3 stable) and Vitesco Technologies Group AG (VT) to
modestly increase next year, its improving FFO should largely
balance rising interest costs (interest on the new 8.75% EUR800
million senior secured notes issued in March 2023 being paid
semi-annually since November 2023) in terms of interest coverage,
which Moody's expects to reach 2.0x in 2025. Moody's recognizes
that credit metrics of IHO-V's parent company, INA-Holding
Schaeffler GmbH & Co. KG (INA-Holding), that fully consolidates
Continental, SAG and VT, strengthened during 2023, broadly in line
with expectation. While INA-Holding's Moody's-adjusted EBITA margin
of 5.3% for the 12 months through June 2023 continues to miss the
rating agency's 8% minimum expectation for a Ba2 rating, its
Moody's-adjusted leverage of 2.9x debt/EBITDA for the same period,
reduced from 3.4x in 2022, currently meets the guided range of
2.5x-3x. Expecting IHO-V's subsidiaries' performance to further
improve in 2024 on an ongoing recovery of global vehicle production
and easing supply challenges, INA-Holding's combined financial
ratios should continue to strengthen next year. That said, any
deviation from Moody's current market and performance expectations,
or signs of IHO-V being unable to progressively restore its
financial ratios towards more solid levels for its Ba2 rating would
exert negative rating pressure over the next few quarters.

IHO-V's rating remains supported the group's large size; ownership
of sizeable stakes in high-quality assets SAG and Continental, both
of which are publicly listed and highly rated, as well as Vitesco.

Beyond the currently weak interest coverage, factors constraining
the rating include some concentration risk from IHO-V's dependence
on the dividends received from its subsidiaries, that are mostly
active in the cyclical automotive industry; a lack of clearly
defined financial policies aimed at preserving a conservative
capital structure to offset the concentration risk; somewhat
limited reporting at IHO-V's standalone level; and Moody's
expectation of higher cash requirements from its ultimate parent
company and rising interest costs over the next two years.

LIQUIDITY

Moody's continues to regard IHO-V's liquidity as strong. Supporting
this assessment are the group's available internal cash sources,
including cash and cash equivalents of around EUR170 million and
its undrawn EUR800 million revolving credit facility (maturity
extended to June 2026 with effective date December 4, 2023) as of
September 30, 2023.

These funds together with expected dividend collections in 2024
significantly exceed the group's short-term cash needs, including
regular holding costs and taxes, estimated at around EUR55 million
annually, and expected interest payments of more than EUR180
million next year. IHO-V's cash needs further comprise expected
payments on an intercompany loan to its direct parent IHO
Beteiligungs GmbH (IHO-B) of up to EUR290 million over the next 12
months for tax obligations at the ultimate parent level and for the
funding of IHO-B's announced acquisition of preference shares of
SAG, closed on December 13, 2023.

In terms of covenant compliance, there is currently significant
capacity under the group's leverage covenant, and Moody's expects
the capacity to remain adequate over the next 12-18 months.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlook incorporates Moody's expectation that IHO
Group's consolidated credit metrics will further strengthen on a
continued recovery in the operating performance of its operating
subsidiaries over 2023-2024, and maintenance of consistent good
liquidity at the IHO-V level. While some of IHO-V's standalone
credit metrics, such as interest coverage and MVL are currently
weak for the Ba2 rating category, failure by the group to steadily
improve these metrics over the next quarters could lead to negative
pressure on its rating or the stable outlook during 2024.

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

An upgrade of IHO-V's ratings would require (1) a market
value-based net leverage of 30% or less, and (2) FFO interest cover
above 2.5x on a sustainable basis. An upgrade would also require
(3) Moody's adjusted debt/EBITDA to be sustained below 2.5x and
Moody's adjusted EBITA margin to be improved to around 10%, both
based on INA-Holding Schaeffler GmbH & Co. KG's financial
statements that fully consolidate Schaeffler AG and Continental AG.
An upgrade would also require (4) improved reporting at IHO-V
level.

Moody's could downgrade IHO-V's ratings if its (1) market
value-based net leverage sustainably exceeds 40%; (2) FFO interest
cover deteriorates below 2.0x on a sustainable basis; (3) Moody's
adjusted debt/EBITDA remains above 3.0x and Moody's adjusted EBITA
margin fails to recover to above 8% for a prolonged period of time,
both based on INA-Holding Schaeffler GmbH & Co. KG statements that
fully consolidate Schaeffler AG and Continental AG; or (4)
liquidity deteriorates.

PRINCIPAL METHODOLOGY

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

COMPANY PROFILE

Headquartered in Herzogenaurach, Germany, IHO Verwaltungs GmbH
(IHO-V) is a holding company that owns 75% of the share capital
(and 100% of voting rights) in SAG, and 36% and 39.9% of the share
capital in Continental and Vitesco, respectively. These assets are
all leading automotive suppliers in Europe. IHO-V is ultimately
owned through a holding structure by two members of the Schaeffler
family.

SC GERMANY 2023-1: Moody's Assigns Ba3 Rating to EUR7MM F Notes
---------------------------------------------------------------
Moody's Investors Service has assigned the following definitive
ratings to Notes issued by SC Germany S.A., Compartment Leasing
2023-1:

EUR624.7M Class A Floating Rate Notes due December 2032,
Definitive Rating Assigned Aaa (sf)

EUR29.8M Class B Floating Rate Notes due December 2032, Definitive
Rating Assigned Aa2 (sf)

EUR14M Class C Floating Rate Notes due December 2032, Definitive
Rating Assigned A2 (sf)

EUR14M Class D Floating Rate Notes due December 2032, Definitive
Rating Assigned Baa2 (sf)

EUR10.5M Class E Floating Rate Notes due December 2032, Definitive
Rating Assigned Ba1 (sf)

EUR7M Class F Floating Rate Notes due December 2032, Definitive
Rating Assigned Ba3 (sf)

RATINGS RATIONALE

The Notes are backed by a 12-month revolving pool of German auto
leases originated by Santander Consumer Leasing GmbH ("SCL", NR), a
wholly-owned subsidiary of Santander Consumer Bank AG ("SCB",
A2/P-1 deposit ratings and A1(cr)/P-1(cr)). This is the first
transaction out of the leasing business segment of Santander
Consumer Bank AG in Germany.

The closing portfolio of assets amount to approximately EUR700.0
million as of November 30, 2023 pool cut-off date. The Reserve Fund
will be funded to 1.25% of the total Notes balance at closing and
the total credit enhancement for the Class A Notes will be 12.01%.

The ratings are primarily based on the credit quality of the
portfolio, the structural features of the transaction and its legal
integrity.

According to Moody's, the transaction benefits from various credit
strengths such as a granular portfolio and an amortising liquidity
reserve sized at 1.25% of Class A to F Notes balance.

However, Moody's notes that the transaction features some credit
weaknesses such as an unrated servicer and a structure which allows
for periods of pro-rata payments under certain scenarios. Various
mitigants have been included in the transaction structure such as a
back-up servicer facilitator which is obliged to appoint a back-up
servicer if certain triggers are breached, as well as a performance
trigger which will switch back the principal payment waterfall to
sequential if the cumulative net loss ratio surpasses a certain
percentage.

The portfolio of underlying assets was distributed through dealers
to private individuals (30.0%) and commercial borrowers (70.0%) to
finance the purchase of new (95.7%) and used (4.3%) cars. As of
November 30, 2023, the portfolio consists of 63,959 auto finance
contracts to 55,225 lessees with a weighted average seasoning of
7.7 months. The contracts have equal instalments during the life of
the contract and at the end of the term a contractually agreed
residual value. The lease instalments of the lease contracts are
securitized, but not the residual value cash flows.

Moody's determined the portfolio lifetime expected defaults of
1.5%, expected recoveries of 50.0% and Aaa portfolio credit
enhancement "PCE" of 7.0% related to borrower receivables. The
expected defaults and recoveries capture Moody's expectations of
performance considering the current economic outlook, while the PCE
captures the loss Moody's expect the portfolio to suffer in the
event of a severe recession scenario. Expected defaults and PCE are
parameters used by Moody's to calibrate its lognormal portfolio
loss distribution curve and to associate a probability with each
potential future loss scenario in the cash flow model to rate Auto
ABS.

Portfolio expected defaults of 1.5% is lower than the EMEA Auto ABS
average and is based on Moody's assessment of the lifetime
expectation for the pool taking into account (i) historic
performance of the book of the originator, (ii) benchmark
transactions, and (iii) other qualitative considerations.

Portfolio expected recoveries of 50.0% is higher than the EMEA Auto
ABS average and is based on Moody's assessment of the lifetime
expectation for the pool taking into account (i) historic
performance of the originator's book, (ii) benchmark transactions,
and (iii) other qualitative considerations.

PCE of 7.0% is lower than the EMEA Auto ABS average and is based on
Moody's assessment of the pool which is mainly driven by: (i)
historic performance of the loan book of the originator, (ii) the
concentration limits during the revolving period; (iii) benchmark
transactions, and (iv) other qualitative considerations. The PCE
level of 7.0% results in an implied coefficient of variation "CoV"
of 68.2%.

The principal methodology used in these ratings was "Moody's Global
Approach to Rating Auto Loan- and Lease-Backed ABS" published in
November 2023.

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

Factors that may cause an upgrade of the ratings of the notes
include significantly better than expected performance of the pool
together with an increase in credit enhancement of Notes.

Factors that would lead to a downgrade of the ratings include: (i)
increased counterparty risk leading to potential operational risk
of (a) servicing or cash management interruptions and (b) the risk
of increased swap linkage due to a downgrade of a currency swap
counterparty ratings; and (ii) economic conditions being worse than
forecast resulting in higher arrears and losses.

TELE COLUMBUS: Fitch Ups LT IDR to 'C' on DDE Offer to Creditors
----------------------------------------------------------------
Fitch Ratings has downgraded Tele Columbus AG's (TC) Long-Term
Issuer Default Rating (IDR) to 'RD' from 'C' on a failure to pay
coupon due 2 November 2023 following the expiration of the original
30-day grace period.

Fitch subsequently upgraded the Long-Term IDR to 'C' as the company
entered into a lock-up agreement with the majority of its creditors
and made a formal offer to all of its creditors on terms that would
be consistent with a distressed debt exchange (DDE) based on
Fitch's criteria.

The 'C' rating reflects the outstanding consent solicitation offer
to its creditors to extend the debt maturity on materially worse
than original terms that Fitch views as tantamount to a DDE. The
rating will be reviewed once the company reaches a restructuring
agreement with its creditors or if it enters a bankruptcy
procedure.

KEY RATING DRIVERS

Coupon Payment Missed: The company failed to pay the coupon on its
senior secured notes due 2 November 2023 after the expiration of an
original 30-day grace period. Instead, it secured an extension of
the grace period until the earlier of the completion of the
restructuring transaction or termination of a lock-up agreement
with the majority of its creditors.

Formal Restructuring Offer: TC made a formal restructuring offer to
all its creditors asking to extend the maturity of its entire debt
at par to October 2028 while agreeing to receive payment-in-kind
(PIK) interest. Fitch views this offer as a material reduction in
terms leading to a DDE. As an incentive to accept the deal,
shareholders committed to contribute EUR300 million fresh equity
(including already provided shareholder loans) if the restructuring
transaction goes through. The company expects the restructuring
transaction to be concluded by March 2024.

High Execution Risks: Fitch believes the company's revised business
plan entails high execution risks. TC aims to achieve
high-single-digit revenue growth in 2024-2028 while improving its
2028 EBITDA margin (company definition) to 64% from 41% in 2022.
Growth will be supported by higher investments into infrastructure
upgrades but challenged by TV revenue pressure, at least in
2023-2025, in its view.

Amendments to the German telecommunication law (in effect from
mid-2024) are likely to put pressure on bulk TV revenue for mass
provision of basic TV programming as housing associations will no
longer be able to pass on TV fees to end-users. Revenue from
analogue TV accounted for substantial 37% of TC's total revenue in
2022.

Negative FCF: Fitch expects TC's free cash flow (FCF) to remain
heavily negative as it continues to make investments into fibre
infrastructure upgrades well above its current EBITDA generation.
Under its revised business plan, the company is going to
significantly increase capex so that it projects to achieve
positive cash generation (EBITDA minus capex) from 2026.

PIK Interest: Cash flow may be helped by not paying any cash
interest under the restructuring proposal. However, PIK interest
will be accruing at no less than 10% a year increasing gross debt
and weighing on leverage, therefore raising longer-term refinancing
risks.

High Leverage: Fitch expects TC's leverage to remain high, at more
than 7x net debt/EBITDA in 2023-2026. Deleveraging is likely to be
slow, driven by a gradual EBITDA recovery but hampered by rising
debt on the back of PIK interest capitalisation (assuming
successful restructuring).

DERIVATION SUMMARY

Unlike many of its larger cable peers, TC is only present in a few
German regions, with access to around 9% of German households. As a
result, it has a significantly smaller operational scale than most
nationwide cable peers, which have larger footprints and sustained
strong FCF. However, its market shares in those territories compare
well with those of nationwide operators, and 92% of its customers
at end-2022 were tenants in apartments blocks with a typically
superior efficiency profile.

Unlike many of its cable peers (including those mentioned below),
TC does not have any mobile operations and cannot offer bundled
services. The ratings of cable companies VMED O2 UK Limited
(BB-/Stable), UPC Holding BV (BB-/Negative) and Telenet Group
Holding N.V (BB-/Stable) are due to lower leverage, solid financial
profiles, and stronger market positions and FCF generation.
VodafoneZiggo Group B.V. (B+/Stable) has a similar strong operating
profile and slightly higher leverage than these peers so it is
rated lower at 'B+'.

KEY ASSUMPTIONS

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

- On average, double-digit declines of analogue TV revenue in
2024-2026 due to the new telecom law.

- Low double-digit broadband revenue growth in 2024-2026.

- EBITDA margin (after leases) gradually recovering to more 40% by
2026 from an estimated 32% in 2023.

- Capex at close to 50% of revenue on average in 2023-2026.

- Low cash tax payments at EUR2 million-3 million a year in
2023-2026.

- Recurring one-off costs of EUR3 million-5 million, reducing
EBITDA.

- No acquisitions or divestments in 2023-2026.

- No dividend payments to 2026.

RECOVERY ANALYSIS

- The recovery analysis is performed for the existing debt
structure. Its analysis assumes that TC would be considered a going
concern (GC) in bankruptcy and that it would be reorganised rather
than liquidated.

- Fitch assumes a 10% administrative claim.

- Its GC EBITDA estimate of EUR120 million reflects its view of
sustainable, post-reorganisation EBITDA upon which Fitch bases the
valuation of the company. Fitch would expect a default to come from
a liquidity shortage, heavier-than-envisaged revenue pressure on
bulk TV customer migration, or capex overspend without a
commensurate increase in broadband customers and revenue.

- Fitch used an enterprise value multiple of 5.5x to calculate a
post-reorganisation valuation, which reflects a conservative
mid-cycle multiple underlining the company's strategic challenges.

- Loans at operating subsidiaries of EUR3 million will have
priority over senior secured instruments.

- Fitch estimates the total amount of secured debt for claims at
EUR1,112 million, comprising EUR462 million of senior secured term
loans and EUR650 million of secured notes.

- Fitch estimates expected recoveries for senior secured debt at
53% based on current metrics and assumptions. This results in a
senior secured debt of 'CC', one notch above the IDR, and a
Recovery Rating of 'RR3'.

RATING SENSITIVITIES

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

- Fitch does not envisage an upgrade before an overhaul of the
capital structure.

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

- Entering into an insolvency procedure or a formal debt
restructuring recognised as a DDE under Fitch's criteria.

LIQUIDITY AND DEBT STRUCTURE

High Refinancing Risk: TC is facing high bullet refinancing risk
with nearly all its debt maturing by May 2025. This is exacerbated
by its assumption of liquidity shortfall absent new funding related
to high capital expenditures needed to secure the long-term
viability of the business. Its EUR462 million term loan facility
matures in October 2024, followed by EUR650 million in May 2025.
Successful restructuring may extend these maturities to October
2028.

ISSUER PROFILE

TC is a cable operator in Germany with strong positions in the east
of the country. The company's network provides access to nearly 9%
of German households. It had 3.2 million connected households and
two million subscribers at end-2Q23.

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
   -----------             ------        --------   -----
Tele Columbus AG     LT IDR RD Downgrade            C
                     LT IDR C  Upgrade              RD

   senior secured    LT     CC Affirmed    RR3      CC



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

BLACKROCK EUROPEAN IV: S&P Affirms 'B-(sf)' Rating on Cl. F Notes
-----------------------------------------------------------------
S&P Global Ratings raised its credit ratings on BlackRock European
CLO IV DAC's class B-1 and B-2 notes to 'AA+ (sf)' from 'AA (sf)',
class C to 'AA- (sf)' from 'A (sf)', and class D to 'A- (sf)' from
'BBB (sf)'. S&P also affirmed its 'AAA (sf)' rating on the class A
notes, its 'BB (sf)' rating on the class E notes, and its 'B- (sf)'
rating on the class F notes.

BlackRock European CLO IV is a cash flow CLO transaction
securitizing a portfolio of primarily senior secured
euro-denominated leveraged loans and bonds issued by European
borrowers. The transaction is managed by BlackRock Investment
Management (UK) Ltd. Its reinvestment period ended in January
2022.

The rating actions follow the application of its relevant criteria
and its credit and cash flow analysis of the transaction based on
the October 2023 trustee report.

Since the end of the reinvestment period, the class A notes have
amortized to 90% of their initial size. The credit enhancement has
therefore increased for the class A, B-1, B-2, C, and D notes due
to deleveraging.

Since the effective date in July 2018, our scenario default rates
(SDRs) have benefited from a reduction of the portfolio's
weighted-average life to 3.46 years from 5.96 years and have
decreased at each rating level.

According to the October 2023 trustee report, all of the notes are
paying current interest and all the coverage tests are passing.

  Table 1

  Assets key metrics
                                                    AS OF JULY
2018
                                         CURRENT*   EFFECTIVE DATE
  
  Portfolio weighted-average rating           B          B

  'CCC' assets (%)                          6.2        0.5

  Weighted-average life (years)            3.46       5.96

  Obligor diversity measure               123.1      124.2

  Industry diversity measure               24.2       19.8

  Regional diversity measure                1.3        1.5

  Total collateral amount (mil. EUR)§    417.76     452.79

  Defaulted assets (mil. EUR)              4.66       0.00

  Number of performing obligors             154        146

  'AAA' SDR (%)                           54.14      66.15

  'AAA' WARR (%)                          37.60      34.90

*Based on the portfolio composition as reported by the trustee in
October 2023 and S&P Global Ratings' data as of November 2023.
§Performing assets plus cash and expected recoveries on defaulted
assets.
SDR--Scenario default rate.
WARR--Weighted-average recovery rate.

  Table 2

  Liabilities key metrics
                        CURRENT CREDIT ENHANCEMENT  CREDIT
         CURRENT AMOUNT (BASED ON THE OCTOBER       ENHANCEMENT
  CLASS   (MIL. EUR)    2023 TRUSTEE REPORT) (%)    AT CLOSING (%)

  A         241.78             42.1                   40.0

  B-1        38.50             28.1                   27.0

  B-2        20.00             28.1                   27.0

  C          27.00             21.7                   21.0

  D          22.50             16.3                   16.0

  E          25.40             10.2                   10.4

  F          13.90              6.9                    7.3

Credit enhancement = [Performing balance + cash balance + recovery
on defaulted obligations (if any) – tranche balance (including
tranche balance of all senior tranches)] / [Performing balance +
cash balance + recovery on defaulted obligations (if any)].

Following the application of S&P's relevant criteria, it believes
that the class B-1, B-2, C, and D notes can now withstand higher
rating scenarios.

S&P said, "Our standard cash flow analysis indicates that the
available credit enhancement levels for the class B-1 to F notes
are commensurate with higher ratings those assigned. Although the
transaction has amortized considerably since the end of the
reinvestment period in 2022, we have also considered the level of
cushion between our break-even default rate and SDR for these notes
at their passing rating levels, as well as the current
macroeconomic conditions and these classes' relative seniority. We
therefore limited our upgrades on the class B-1, B-2, C, and D
notes below our standard analysis passing levels, and affirmed our
ratings on the class E and F notes.

"Our credit and cash flow analysis indicates that the class A notes
are still commensurate with a 'AAA (sf)' rating. We therefore
affirmed our rating on the class A notes.

"Counterparty, operational, and legal risks are adequately
mitigated in line with our criteria.

"Following the application of our structured finance sovereign risk
criteria, we consider the transaction's exposure to country risk to
be limited at the assigned ratings, as the exposure to individual
sovereigns does not exceed the diversification thresholds outlined
in our criteria."


HARVEST CLO XXXI: S&P Assigns B- (sf) Rating to Class F Notes
-------------------------------------------------------------
S&P Global Ratings assigned credit ratings to Harvest CLO XXXI
DAC's class A to F European cash flow CLO notes. At closing, the
issuer also issued unrated class Z and subordinated notes.

Under the transaction documents, the rated notes will pay quarterly
interest unless a frequency switch event occurs. Following this,
the notes will permanently switch to semiannual payments.

The portfolio's reinvestment period will end approximately 4.6
years after closing, while the non-call period will end 1.6 years
after closing.

The ratings reflect S&P's assessment of:

-- The diversified collateral pool, which primarily comprises
broadly syndicated speculative-grade senior secured term loans and
bonds that are governed by collateral quality tests.

-- The credit enhancement provided through the subordination of
cash flows, excess spread, and overcollateralization.

-- The collateral manager's experienced team, which can affect the
performance of the rated notes through collateral selection,
ongoing portfolio management, and trading.

-- The transaction's legal structure, which is bankruptcy remote.

-- The transaction's counterparty risks, which are in line with
S&P's counterparty rating framework.

  Portfolio benchmarks
                                                          CURRENT

  S&P Global Ratings' weighted-average rating factor     2,855.12

  Default rate dispersion                                  431.43

  Weighted-average life including reinvestment (years)       4.46

  Obligor diversity measure                                119.63

  Industry diversity measure                                20.50

  Regional diversity measure                                 1.29


  Transaction key metrics
                                                          CURRENT

  Portfolio weighted-average rating
  derived from S&P's CDO evaluator                             B

  'CCC' category rated assets (%)                           0.75

  'AAA' weighted-average recovery (%)                      36.46

  Floating-rate assets (%)                                 90.00

  Actual weighted-average spread (net of floors; %)         4.24


S&P said, "We consider that the target portfolio is
well-diversified, primarily comprising broadly syndicated
speculative-grade senior secured term loans and senior secured
bonds. Therefore, we have conducted our credit and cash flow
analysis by applying our criteria for corporate cash flow CDOs.

"In our cash flow analysis, we used the EUR400 million target par
amount, the actual targeted weighted-average spread (4.24%), and
the actual targeted weighted-average coupon (5.31%) as indicated by
the collateral manager. We have assumed the actual targeted
weighted-average recovery rates at all rating levels. We applied
various cash flow stress scenarios, using four different default
patterns, in conjunction with different interest rate stress
scenarios for each liability rating category.

"Our credit and cash flow analysis shows that the class B-1, B-2,
C, D, E, and F notes benefit from break-even default rate (BDR) and
scenario default rate cushions that we would typically consider to
be in line with higher ratings than those assigned. However, as the
CLO is still in its reinvestment phase, during which the
transaction's credit risk profile could deteriorate, we have capped
our ratings on the notes. The class A notes can withstand stresses
commensurate with the assigned rating."

Until the end of the reinvestment period in July 15, 2028, the
collateral manager may substitute assets in the portfolio for so
long as S&P's CDO Monitor test is maintained or improved in
relation to the initial ratings on the notes. This test looks at
the total amount of losses that the transaction can sustain as
established by the initial cash flows for each rating, and compares
that with the current portfolio's default potential plus par losses
to date. As a result, until the end of the reinvestment period, the
collateral manager may through trading deteriorate the
transaction's current risk profile, if the initial ratings are
maintained.

S&P said, "Under our structured finance sovereign risk criteria, we
consider that the transaction's exposure to country risk is
sufficiently mitigated at the assigned ratings.

"The transaction's documented counterparty replacement and remedy
mechanisms adequately mitigate its exposure to counterparty risk
under our current counterparty criteria.

"The transaction's legal structure is bankruptcy remote, in line
with our legal criteria.

"The CLO is managed by Investcorp Credit Management EU Ltd. Under
our "Global Framework For Assessing Operational Risk In Structured
Finance Transactions," published on Oct. 9, 2014, the maximum
potential rating on the notes is 'AAA'.

"Following our analysis of the credit, cash flow, counterparty,
operational, and legal risks, we believe our ratings are
commensurate with the available credit enhancement for the class A
to F notes.

"In addition to our standard analysis, to indicate how rising
pressures among speculative-grade corporates could affect our
ratings on European CLO transactions, we also included the
sensitivity of the ratings on the class A to E notes based on four
hypothetical scenarios.

"As our ratings analysis makes additional considerations before
assigning ratings in the 'CCC' category--and we would assign a 'B-'
rating if the criteria for assigning a 'CCC' category rating are
not met--we have not included the above scenario analysis results
for the class F notes."

Environmental, social, and governance

S&P said, "We regard the exposure to environmental, social, and
governance (ESG) credit factors in the transaction as being broadly
in line with our benchmark for the sector. Primarily due to the
diversity of the assets within CLOs, the exposure to environmental
credit factors is viewed as below average, social credit factors
are below average, and governance credit factors are average. For
this transaction, the documents prohibit assets from being related
to the following industries: controversial weapons; nuclear weapon
programs; illegal drugs or narcotics; thermal coal; tobacco
production; pornography; payday lending; prostitution; and gambling
and gaming companies.

"Accordingly, since the exclusion of assets from these industries
and areas does not result in material differences between the
transaction and our ESG benchmark for the sector, no specific
adjustments have been made in our rating analysis to account for
any ESG-related risks or opportunities."

  Ratings list
                   BALANCE
  CLASS  RATING*  (MIL. EUR)    SUB (%)   INTEREST RATE§

  A-1    AAA (sf)    236.00     41.00    Three/six-month EURIBOR
                                         plus 1.71%

  A-2    AAA (sf)     12.00     38.00    Three/six-month EURIBOR
                                         plus 2.10%

  B      AA (sf)      42.00     27.75    Three/six-month EURIBOR
                                         +2.85%

  C      A (sf)       23.00     21.50    Three/six-month EURIBOR
                                         plus 3.50%

  D      BBB- (sf)    26.75     15.06    Three/six-month EURIBOR
                                         plus 5.60%

  E      BB- (sf)     17.25     10.75    Three/six-month EURIBOR
                                         plus 7.90%

  F      B- (sf)      12.00      7.75    Three/six-month EURIBOR
                                         plus 8.84%

  Z      NR            0.25      N/A     N/A

  Sub. Notes    NR    29.175     N/A     N/A

*The ratings assigned to the class A and B notes address timely
interest and ultimate principal payments. The ratings assigned to
the class C, D, E, and F notes address ultimate interest and
principal payments.
§The payment frequency switches to semiannual and the index
switches to six-month EURIBOR when a frequency switch event occurs.

EURIBOR--Euro Interbank Offered Rate.
NR--Not rated.
N/A--Not applicable.




=========
I T A L Y
=========

FABBRICA ITALIANA: S&P Affirms 'B' Long-Term ICR, Outlook Stable
----------------------------------------------------------------
S&P Global Ratings affirmed its 'B' long-term issuer credit rating
on Fabbrica Italiana Sintetici (FIS) and its 'B' issue rating on
the debt, while its '3' recovery rating with 60% recovery prospects
on the EUR350 million senior secured notes remains unchanged by the
transaction.

S&P said, "The stable outlook reflects our view that the company
will continue to grow organically thanks to the patent protection
extension of Sitagliptin in the U.S. until 2027, the development of
the animal health segment, and a growing customer base, with new
contracts for the production of GLP-1 molecules. In our view this
will result in ongoing deleveraging and FOCF turning positive from
2024 after being negative over 2022-2023."

Private equity fund Bain Capital has acquired a majority stake in
FIS from Nine Trees Group (NTG), the holding of the Ferrari family.
The family has reinvested a portion of the proceeds and will own a
minority stake post transaction, the rest being held by the
financial sponsor, retaining control.

S&P said, "We expect FIS' credit metrics to remain in line with a
'B' rating, following the acquisition by private equity fund Bain
Capital. On Dec. 13, FIS announced that NTG (the holding company of
the founding shareholders, the Ferrari family) had sold its stake
in FIS to Bain Capital for an enterprise value of about EUR1.2
billion. Bain Capital is now the majority owner, with an 86% stake.
The Ferrari family has reinvested part of the proceeds from the
sale and retains a minority stake, along with key managers also
expected to re-invest in a dedicated long-term incentive program.
The transaction was financed with a EUR610 million equity
injection, EUR50 million newly issued floating rate notes due 2027
in the form of private placement (terms and conditions in line with
the existing sustainability-linked senior secured notes), and
EUR250 million vendor loan subscribed by NTG and with
payment-in-kind interests. The capital structure also includes the
existing EUR350 million sustainability-linked senior secured notes
as the company met the requirements for the portability clause,
embedded in the debt documentation, to be exercised. Also, the
EUR53 million convertible bond between FIS and the Ferrari family
is transferred in full to Bain Capital, and thus remains part of
the new capital structure, and we continue to consider it as
equity-like under S&P Global Ratings' criteria."

These proceeds will be used to fund the acquisition price, the
transaction costs of about EUR30 million, and repay the drawn
senior secured RCF and local lines totaling EUR73 million.
Post-transaction closing, the company will have fully available
EUR23 million of local lines and a fully undrawn EUR80 million RCF,
which was upsized from EUR50 million during the transaction. Due to
higher debt in the company's capital structure, headroom under the
current rating level is reduced. S&P said, "As such, we anticipate
S&P Global Ratings-adjusted debt to EBITDA will increase to 6.6x in
2023 (post-closing) from 4.8x in 2022, and will remain within
6.0x-6.5x in 2024. Also, the company will maintain some cushion
under the FFO cash interest coverage that we expect to stay above
4.0x despite the higher amount of interest to service the increased
debt."

A better product mix and clear cost savings plan will support
improvement in S&P Global Ratings-adjusted EBITDA margin toward 18%
by 2025. S&P said, "Under our base case, we anticipate an
improvement of 80 basis points (bps) in S&P Global Ratings-adjusted
EBITDA margin this year to 14.7%, from 13.9% in 2022. We expect it
to improve further to 15%-16% in 2024, reaching about 18% by 2025.
We believe the increased exposure to the highly profitable market
for diabetes GLP-1 drugs, from about 6% of total sales in 2023 to
about 17% in 2024, will be one of the drivers of the anticipated
margin improvement. These molecules have strong underlying growth
prospects, and retain higher profitability levels. In fact, FIS'
quality and reliability of production allowed the company to
further strengthen its relationships with two large pharmaceutical
companies and to become a strategic supplier for these GLP-1
molecules. The expected growth in EBITDA margin will also result
from the continuation of the generic portfolio rationalization
through the termination of low- or negative-margin contracts, and
the ramp-up of the animal health business unit. In addition, we
take into account the normalization of inflation impact on
utilities and raw material expenses as the company has already
negotiated price increases to fully cover the impact and will keep
this cushion despite the fading effect of inflation on these
costs."

At the same time, the company is putting in place a cost-saving
plan which will further drive margin improvement in S&P's view.
Identified areas of savings include procurement, yield management
through more efficient use of production lines and general and
administrative expenses, that total EUR25 million-EUR30 million,
with EUR25 million to be delivered in the first 18-24 months post
transaction.

FOCF will remain pressured this year due to the implementation of
strategic initiatives already started in 2022 but will strengthen
from 2024 thanks to better working capital management and the end
of the investment cycle. The company's investment plan will come to
an end this year. FIS heavily invested to improve profitability of
its Lonigo plant through energy-efficiency measures, by building an
incinerator to enhance waste management, and by internalizing the
production of some high value raw materials previously sourced from
China. Its ambitious capital expenditure (capex) plan also included
a project on water management (zero liquid discharge) allowing it
to fully recycle the used water. S&P said, "We therefore expect
FOCF to remain negative in 2023, at about EUR10 million-EUR15
million, also affected by higher recurring capex due to a backlog
of maintenance following COVID-19 disruptions. We expect FOCF to
turn positive to about EUR10 million-EUR15 million in 2024 and
above EUR40 million afterwards, supported by better inventory
management as the company intends to decrease the share of stock it
maintains for customers and improve payment terms with suppliers."
Although the company expects to maintain stable strategic and
recurring capex as a percentage of sales, respectively at 5% and
3%, additional expenses are needed to achieve the expected savings
under its cost saving plan of about EUR30 million in total over the
next four years.

S&P said, "The stable outlook reflects our view that the company
will be able to continue to grow organically thanks to the patent
protection extension of its key molecule (Sitagliptin) in the U.S.
until 2027, the development of the animal health segment, new
technological capabilities, and a growing customer base, with new
contracts for the production of GLP-1 molecules. This should result
in expansion of margins to 15%-16% in 2024, supported by a clear
cost saving plan and improved product mix. Under our base case, we
expect S&P Global Ratings-adjusted debt to EBITDA to improve to the
6.0x-6.5x range in 2024 and FOCF to recover and become positive in
2024."

Downside scenario

S&P said, "We could take a negative rating action if we observe a
significant deviation from our base case such that S&P Global
Ratings-adjusted debt to EBITDA rises above 7.0x on a prolonged
basis and FOCF remains recurringly in negative territory. This
could happen if the company suffers from a deterioration of
operating performance due to a material reduction of volumes from
the loss of key agreements with main customers or it faces
challenges implementing its saving plan. An increase in leverage
could also materialize if we were to observe a more aggressive
financial policy from its shareholder."

Upside scenario

S&P said, "We could take a positive rating action if the company
accelerated its organic deleveraging plan, so S&P Global
Ratings-adjusted debt to EBITDA fell below 5.0x on a sustainable
basis with the financial sponsor commitment to maintaining a
conservative financing policy to keep the leverage ratio at this
level, while posting recurring positive FOCF. This would most
likely be triggered by strong revenue growth in the custom segment
and improvement in profitability beyond our expectations.

"ESG factors have an overall neutral influence on our credit rating
analysis of FIS. As a CDMO operator, FIS is subject to increasingly
stringent environmental requirements in its manufacturing
operations, including air emissions and water and waste management.
In addition, FIS is well positioned to adhere with increasing
environmental, social, and governance standards required by its
large pharmaceutical customers, which could further strengthen FIS'
relationship with its core customers. FIS' commitment on
sustainability translated into clear targets regarding emission
reduction, waste management, and water efficiency included in the
sustainability-linked bond framework which the company will capture
through its strategic plan expansion. Governance is a moderately
negative consideration, as is the case for most rated entities
owned by private-equity sponsors. We believe the group's highly
leveraged financial risk profile points to corporate
decision-making that prioritizes the interests of the controlling
shareholders. This also reflects the owners' generally finite
holding periods and focus on maximizing shareholder returns."




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

NOMAD INSURANCE: S&P Upgrades LT ICR to 'BB+', Outlook Stable
-------------------------------------------------------------
S&P Global Ratings raised its long-term issuer credit and financial
strength ratings on Kazakhstan-based Nomad Insurance Co. to 'BB+'
from 'BB'. The outlook is stable.

S&P also raised its long-term Kazakhstan national scale rating on
the company to 'kzAA' from 'kzAA-'.

The improvement in capital adequacy primarily reflects an increase
in total adjusted capital (TAC), since S&P no longer deduct from
TAC non-life deferred acquisition costs, which represent about 19%
of total equity.

S&P has also captured the benefits of risk diversification more
explicitly in our analysis, which supports its view of capital
adequacy.

Higher catastrophe-risk and asset-risk charges somewhat offset
these improvements.

The stable outlook reflects S&P's view that Nomad Insurance will
continue to generate robust earnings, with capital adequacy
exceeding the 99.95% (very strong) benchmark in our model, thanks
to retained earnings and moderate dividend policy over the next 12
months.

Downside scenario

S&P could lower the rating in the next 12 months if, contrary to
its expectations:

-- S&P sees a significant and sustained deterioration of the
capital base caused, for example, by more aggressive growth,
unexpected losses, or higher dividends than we expect, leading to
capital adequacy in our model deteriorating and staying below the
99.95% benchmark.

-- Asset quality weakens significantly, which could cause
volatility in capitalization, earnings capacity, and liquidity.

Upside scenario

S&P regards a positive action as unlikely in the next 12 months.
However, an upgrade would be possible in case of:

-- Further derisking of Nomad Insurance's investment portfolio
toward investment-grade assets;

-- Ongoing profitable business and capital growth, while capital
adequacy remains above our 99.95% benchmark; and

-- A material improvement in the company's liquidity buffer.

S&P said, "The upgrade mainly reflects that, under our revised
capital model, we assess Nomad Insurance's capital adequacy as
materially stronger. We no longer deduct deferred acquisition costs
for non-life business from capital. These costs represent almost
19% of Nomad Insurance's equity at year-end 2022. Capitalization
also improves from the benefits of risk diversification. As a
result, we project Nomad Insurance's capital adequacy to improve to
the 99.95% confidence level under our model over the forecast
horizon through 2025.

"We expect Nomad Insurance will maintain its solid position in
Kazakhstan's P/C market. It benefits from a well-known brand,
diversified business mix, and well-established distribution system.
Nomad insurance has reported strong premium growth so far this
year. We anticipate that its gross premiums written will increase
by 30%-33% in 2023, and by about 20% in 2024."

The company is expected to report a net P/C combined (loss and
expense) ratio no higher than 88% in 2023-2024. The company has
realized a better combined ratio than the market average of 96%-98%
by taking a conservative approach to underwriting and implementing
cost-optimization measures. These included a planned decrease in
the share of nonprofitable business such as obligatory motor
third-party liability insurance. In 2023-2024, S&P expects a return
on equity of 40%-43% or higher and annual net profit of about
Kazakhstani tenge (KZT) 7.8 billion-KZT10.3 billion ($16
million-$21 million).

S&P expects Nomad insurance will maintain its conservative
investment policy and continue to invest in investment-grade
instruments.




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

CANPACK SA: Fitch Affirms 'BB-' LT IDR, Alters Outlook to Stable
----------------------------------------------------------------
Fitch Ratings has revised CANPACK S.A.'s Outlook to Stable from
Negative and affirmed the Long-Term Issuer Default Rating (IDR) at
'BB-'. Fitch has also affirmed the senior unsecured instrument
rating at 'BB-'/'RR4'.

The Outlook revision reflects its expectations for EBITDA gross
leverage being within its rating sensitivity in 2024 and an
improvement in net leverage metrics on better cash generation.
Fitch also believes that cash proceeds from the sale of the glass
business will support deleveraging capacity.

CANPACK is expected to deliver weak free cash flow generation (FCF)
through the rating horizon, but this is largely due to capex, which
is mostly uncommitted and can be postponed or cut if needed. This
cash flow allocation follows management's strategy to prioritise
internal growth and deleveraging over excessive shareholder
distributions.

KEY RATING DRIVERS

Limited Gross Debt Deleveraging: EBITDA gross leverage was 4.9x in
2022, lower by 0.3pp than expected last year. Fitch expects steady
deleveraging with gross leverage within its sensitivity of 4.5x in
2024 (4.7x in 2023 and 4.4x in 2024). Fitch expects stronger net
deleveraging from 4.3x in 2022 to 3.6x in 2023 (3.2x in 2024)
arising from improved profitability generation, working capital
inflow (in 2023) and disposals delivering a stronger cash balance.

Its rating case factors in modest debt repayment supported by the
company's deleveraging commitment towards 2.5x (company's defined
net leverage) without compromising growth opportunities.

Margins Slightly Improved: Fitch forecasts CANPACK's EBITDA margin
to improve to 11.4% by 2025 compared with 10.4% achieved in 2022.
The company renegotiated better terms for its metal-related input
costs and has increased metal sourcing from its European suppliers
to be less reliant on sourcing from China. This allows its European
entities to significantly reduce the time lag between setting
supplier pricing and receipt of the raw materials which, together
with metal hedging, helps to limit margin volatility. Fitch also
expects the ramp-up of new production lines in the US to support
EBITDA margins.

FCF Trajectory and Cash Deployment: Expansionary capex and
working-capital consumption have been a function of the company's
high growth strategy and kept FCF largely negative in the past few
years. Fitch forecasts a positive FCF margin of 3.2% in 2023
benefiting from significant working capital inflow due to better
inventory management.

Despite improved profitability generation Fitch expects FCF to be
negative in 2024-2025 due to marginal working capital impact but
continuing high capex (although not as high as seen from
2020-2022). However much of the capex remains uncommitted
(specifically in 2025-2026) and this, together with flexibility in
dividend payments, provides a cash buffer if needed.

Polish Glass Facility Divestment: Fitch views the announced
divestment of the Polish glass business as neutral for the rating
given its limited contribution to EBITDA, although the proceeds
support deleveraging capacity. The glass business is more energy
and capex intensive compared to the metal can business and it has
never been the core packaging substrate for CANPACK. However, the
company will continue with its glass business in India (4%-5% of
CANPACK's revenue) as its customers require both metal and glass
packaging.

Expansion Strategy: CANPACK's growth has been almost exclusively
through new greenfield investments, having developed operations in
16 countries over the last 18 years. The strategy is to grow with
existing customers, mainly beverage producers, and with a large
share of volumes for new facilities being pre-contracted. This has
led to lower execution risk for new plant construction and projects
being implemented within set timeframes, typically around 18 months
from the start to project completion. The company has recently
completed its expansionary capex in Indiana and Olyphant (seven new
lines in total) with the expected ramp-up period over 2024-2025.

Rating Perimeter: Its rating case for CANPACK includes the
operations and financial results of CANPACK US LLC, although both
companies are affiliates. However, both are co-issuers of the
recent bonds and are jointly and severally liable for these senior
unsecured bonds, which now form the majority of the combined
group's debt.

Consolidated Approach: The management provides audited combined
accounts for the CANPACK group (a consolidated approach including
both CANPACK S.A. and CANPACK US and their subsidiaries). In
addition, both companies are owned by the same ultimate parent and
managed by the same senior executives.

DERIVATION SUMMARY

CANPACK has strong market positions, ranking third in Europe and
fourth globally behind global beverage can leaders Ball
Corporation, Crown Holdings Inc and Ardagh Group S.A. (B-/Negative;
third globally). However, these companies are significantly larger
than CANPACK (3x-5x the size), with Ardagh Metal Packaging S.A.
(B/Negative) of similar size to CANPACK.

CANPACK is larger than Titan Holdings II B.V. (B/Positive),
Europe's largest metal food can producer and is also better
geographically diversified, including the current US expansion.
However, Titan has significantly better EBITDA margins (around
15%-16%) than CANPACK (around 11.5%).

CANPACK's EBITDA and FCF margin volatility is typically higher than
those of other packaging companies due to CANPACK's strong
investment growth phase and exposure to a volatile aluminum price
with a less effective price pass- through mechanism. While lacking
the scale of its larger peers Berry Global Group, Inc (BB+/Stable),
Ball and Crown, CANPACK's margins also place the company behind
these peers.

CANPACK 's gross leverage profile is similar to that of higher
rated peer Berry Global (4.4x September end-2022 and 4.8x-4.5x for
September-end 2023F-2024F), better than lower rated Titan Holdings
(4.4x end-2022 and 5.6x-5.3x for 2023F-2024F), Fiber Bidco S.p.A.
(B+/Stable; 4.8x end-2022 and 5.4x-5.3x for 2023F-2024F) and Ardagh
Metal Packaging (7.4x end-2022 and 7.5x-6.0x for 2023F-2024F).

KEY ASSUMPTIONS

- Revenue growth of around 0.8% in 2023, 1.9% in 2024, 2.6% in 2025
due to added capacity and shipments of cans to North America are
offset by normalised aluminium prices compared to the 2022 peak.

- An EBITDA margin of about 11.3%-11.4% in 2023-2025.

- Start-up costs for the US plants and grants received are excluded
from EBITDA but included in funds from operations (FFO).

- Significant positive net working capital (NWC) in 2023 on an
optimised inventory and a lower aluminium price.

- Cash adjusted by 2% of sales to reflect seasonal NWC swings.

- Capex of 9% of revenue in 2023, 6.8% in 2024, 7.5% in 2025 in
line with management guidance.

- Dividends of USD10 million in 2023 and USD25 million a year to
2025.

- Repayment of the outstanding amount of asset-based revolving
facilities (ABL) in 2024.

- Partial refinancing and partial redemption of the USD400 million
senior unsecured notes in 2025.

RATING SENSITIVITIES

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

- An EBITDA margin above 14%.

- An EBITDA gross leverage below 4.0x on a sustained basis.

- A FCF margin above 1% on a sustained basis.

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

- Delays to, and cost-overruns of, investments leading to weaker
operating performance and EBITDA margins below 10% on a sustained
basis.

- A FCF margin failing to turn positive on a sustained basis.

- EBITDA gross leverage above 4.5x on a sustained basis.

- A change to the corporate or capital structure, indicating the
ineffective consolidation scope of CANPACK and CANPACK US
operations.

LIQUIDITY AND DEBT STRUCTURE

Satisfactory Liquidity: CANPACK had readily available cash of
around USD470 million at end-September 2023 (after Fitch's
adjustment for working capital seasonality) and access to ABL
totalling USD400 million (drawn by USD100 million with maturity in
March 2028), and another EUR100 million in ABL, undrawn with
maturity in June 2028. Fitch forecasts the ABL will be repaid in
the short-term given strong cash generation in 2023. FCF is
marginally negative in 2024-2025 due to high capex. Fitch believes
dividend payments of USD25 million and a portion of uncommitted
growth capex will serve as a buffer from 2024 onwards.

Manageable Refinancing Risk: CANPACK's debt is composed of EUR600
million and USD400 million unsecured notes issued in October 2020
maturing in 2027 and 2025, respectively, and USD800 million
unsecured notes issued in 2021 maturing in 2029. These notes are
jointly issued with CANPACK US and the two companies are jointly
and severally liable for the full amount of the notes as outlined
in the bond documentation. For covenant purposes, audited combined
accounts are also taken into consideration. Fitch believes the
upcoming 2025 debt maturity bears manageable risk mitigated through
improved pre-refinancing credit metrics, a good liquidity position
with a high cash position and possibly cash proceeds on the glass
business divestment.

ISSUER PROFILE

CANPACK is a global manufacturer of aluminium cans, glass
containers and metal closures for the beverage industry and of
steel cans for the food and chemical industries. Serving customers
more than 100 countries globally, it is the fourth-largest supplier
of beverage cans in the world and ranks number three in Europe by
revenue, according to data seen by Fitch.

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
   -----------              ------         --------   -----
CANPACK S.A.          LT IDR BB-  Affirmed            BB-

   senior unsecured   LT     BB-  Affirmed   RR4      BB-



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

SPB EXCHANGE: Central Bank Investigates Bankruptcy Petition
-----------------------------------------------------------
Itar-Tass reports that the Central Bank is holding an internal
investigation regarding the situation with the bankruptcy of the
SPB Exchange, First Deputy Governor of the Bank of Russia Vladimir
Chistyukhin told reporters.

"We are aware at the moment that the management of the SPB Exchange
did not file such application.  It appears for me that this is
within the competence of law enforcement authorities," Itar-Tass
quotes Mr. Chistyukhin as saying.

"We maintain regular communications with the SPB Exchange as with
the supervised organization," Mr. Chistyukhin said, adding that the
Bank of Russia is implementing its own investigation regarding the
situation with the bankruptcy of the stock exchange.  "No
preliminary outcomes.  It will be possible to obtain reliable
information after engaging law enforcement agencies," he added.

On November 27, information about filing a petition to recognize
the SPB Exchange as bankrupt appeared in the case file of the
Moscow Arbitration Court, Itar-Tass relates.  The stock exchange
stated later that its financial standing is sound and no bankruptcy
petition was filed by it, Itar-Tass notes.



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

CELSA GROUP: Kirkland Advises Financial Creditors Committee
-----------------------------------------------------------
Kirkland & Ellis on Dec. 6 disclosed that it advised the ad hoc
committee of financial creditors of Spanish steelmaker Celsa Group
on taking control of the Group via the first-ever Spanish
restructuring plan. The plan was filed at one minute after midnight
on the day the relevant legislation become effective.  The
transaction was fiercely contested by the Group and its existing
family shareholders on multiple grounds.

The Barcelona Court approved the plan on September 4,
comprehensively dismissing nearly all points of opposition.  The
decision demonstrates it is possible for creditors to propose and
execute a Spanish restructuring plan without the debtor's consent.
The transaction closed on December 1.  Ownership of Celsa Group has
now been transferred to its financial creditors pursuant to the
plan.

The team was led by restructuring partners Sean Lacey, Hannah
Crawford, Kon Asimacopoulos and Sarah Ullathorne; debt finance
partner Byron Nicol; antirust & competition partners Sally Evans
and Sion Davies; and tax partner James Seddon, with restructuring
associates Daniel Stathis, Krista Sirola and Jai Mudhar and debt
finance associate Will Knapp.




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

TURK TELEKOM: S&P Affirms 'B' LT ICR, Outlook Positive
------------------------------------------------------
S&P Global Ratings affirmed the long-term issuer credit rating on
Turk Telekom at 'B'. S&P also affirmed the issue rating on the
senior unsecured debt at 'B', in line with the issuer credit
rating.

The outlook on S&P's long-term issuer credit rating on Turk Telekom
is positive, in line with the outlook on Turkiye.

S&P said, "The outlook revision on our long-term issuer credit
rating on Turk Telekom reflects a similar action on Turkiye. On
Nov. 30, 2023, we revised to positive from stable the outlook on
our 'B' unsolicited long-term sovereign credit ratings on Turkiye
and affirmed all our foreign and local currency sovereign credit
ratings on Turkiye, including our 'trA/trA-1' unsolicited national
scale rating on the sovereign. We also raised our unsolicited
transfer and convertibility assessment to 'B+' from 'B'. This
follows Turkiye's new economic team, which has taken a series of
steps to restore confidence in Turkish lira (TRY) assets, rebalance
the economy, and ease the regulatory burden on the key financial
sector. In addition, the rate of inflation has peaked (we expect
inflation will fall to 53.7% in 2023 and 50.3% in 2024 from a peak
of 72.3% in 2022). We think the Turkish lira will continue to
gradually depreciate versus the U.S. dollar over the next two
years, albeit at a lower pace than in previous years, with the
exchange rate remaining below TRY30 to $1 until year-end 2023,
followed by a depreciation to TRY40 in 2024 and to TRY42 in 2025
(from TRY18.7 in 2022).

"Our rating on Turk Telekom is capped at the sovereign foreign
currency rating on Turkiye, because the company does not pass our
hypothetical sovereign default stress test, among other factors,
including a 50% devaluation of the lira against hard currencies and
a 20% decline in organic EBITDA. This is mainly because about 65%
of Turk Telekom's next-12-months' debt maturities are in hard
currencies, despite about 65% hard currencies cash and cash
equivalents (including currency protected time deposit).

"However, in the hypothetical case of further depreciation of the
lira, we think the appreciation of the cash balance would not fully
offset the increase in short-term foreign currencies debt
maturities and capital expenditure (capex), resulting in a
sources-to-uses ratio of slightly below 1.0x, which is the minimum
level required to pass the sovereign stress test. Therefore, we
currently align our rating on Turk Telekom with the sovereign
credit ratings on Turkiye.

"We anticipate gradual improvements in Turk Telekom's credit
metrics after a temporarily weaker performance in 2022-2023.
Although Turk Telekom continued to post a growing subscriber base
both in the mobile and fixed segments, the ongoing challenging
macroeconomic environment in Turkiye--including wage inflation and
lira depreciation--and the one-off effect of the February
earthquake heavily affected Turk Telekom's credit metrics. Turk
Telekom's profitability was hit by the high inflation rate because
of its significant exposure to fixed broadband and TV business
(which represented about 36% of the company's 2022 reported
revenue), which has long contract terms of 24 months (compared with
12 months in mobile). This implies a long delay before prices can
be raised, while inflationary pressure on costs is nearly
immediate. For example, personnel expenses, which represented about
30% of operating expenditure in 2022, doubled in the first nine
months of 2023, whereas revenue increased by about 70% during the
same period. As a result, Turk Telekom's S&P Global
Ratings-adjusted EBITDA margin declined by more than 7 percentage
points to 30% (versus 36% in the first nine months of 2022) and
adjusted free operating cash flow (FOCF) generation was negative
TRY2.3 billion in the first nine months of 2023.

"Because of its prominent position in the fixed market and the
shorter commitment structure for mobile, the profitability hit from
very high inflation was more significant for Turk Telekom than, for
instance, Turkcell, which is less exposed to fixed. In addition, we
assume $50 million-$60 million one-off earthquake-related capex
this year, which further depresses 2023's FOCF generation.

"We expect margins will gradually improve to 32%-35% in 2024-2025,
because we anticipate several operating tailwinds. These include
continued a positive trend in subscriber dynamics, easing wage
inflation, a further pricing impact linked to inflationary pressure
once the contract term expires, and general prudent cost
management. We also understand that management has recently
shortened its 24-month offer in fixed broadband to 18 months, which
should help pass inflation costs on to customers more quickly. A
less pronounced lira devaluation will also have a less negative
impact on capex and debt, and as a result, we forecast Turk
Telekom's FOCF and leverage to strengthen in 2024 and 2025.

"Turk Telekom's liquidity is sufficient until the end of 2024 but
could weaken significantly if the company does not refinance in the
next few months. At the end of September 2023, Turk Telekom
reported cash and cash equivalent of TRY18 billion and TRY32
billion in short-term debt. The bulk of these mature during the
first half of 2024 and are foreign-currency denominated. We
forecast FOCF (including maintenance capex only) of near TRY15
billion for the next 12 months. We understand some portion of the
next maturities is hedged, which helps alleviate near-term
refinancing risk. Therefore, we forecast the company will have
sufficient sources of funds to cover uses including near-term debt
maturities and our assessment on its liquidity remains adequate
over the next 12 months."

That said, the next significant maturity ($500 million maturing in
February 2025) will reduce liquidity headroom significantly if the
company does not successfully refinance in the first half of 2024.
Turk Telekom maintains well-established and solid bank
relationships and is in discussions with several creditors to
address its 2025 maturities. However, failure to refinance within
the next few months and to consistently maintain an adequate
liquidity position over a 12-month time horizon could put the
stand-alone credit profile (SACP) of 'bbb' at risk. S&P will
continue to monitor Turk Telekom's refinancing efforts over the
next few months.

S&P said, "The positive outlook on Turk Telekom reflects our
positive outlook on Turkiye and our expectation of the company's
continued solid operating performance. Our current assessment of
the SACP reflects our expectation that the S&P Global Ratings'
weighted average adjusted debt-to-EBITDA ratio will return at or
below 1.5x in 2024 and that FOCF to debt will gradually expand
toward 10%.

"We could revise the outlook to stable if we took the same rating
action on the sovereign.

"We could upgrade Turk Telekom if we took the same action on the
sovereign. We could also upgrade Turk Telekom, aligning the rating
with the T&C assessment of Turkiye at 'B+', if the company passes
our sovereign stress test, which we think could be achieved by
improving the liquidity in the event of refinancing."


TURKCELL: S&P Upgrades Long-Term ICR to 'B+', Outlook Positive
--------------------------------------------------------------
S&P Global Ratings raised the long-term issuer credit rating on
Turkcell to 'B+' from 'B'. S&P also raised the issue rating on the
senior unsecured debt to 'B+' from 'B', in line with the issuer
credit rating.

The outlook is positive, in line with the outlook on the long-term
rating on Turkiye.

S&P said, "The upgrade of Turkcell follows the rating action on
Turkiye. On Nov. 30, 2023, we revised to positive from stable the
outlook on our 'B' unsolicited long-term sovereign credit ratings
on Turkiye and affirmed all our foreign and local currency
sovereign credit ratings on Turkiye, including our 'trA/trA-1'
unsolicited national scale rating on the sovereign. We also raised
our unsolicited T&C assessment to 'B+' from 'B'. This follows
Turkiye's new economic team that has taken a series of steps to
restore confidence in Turkish lira (TRY) assets, rebalance the
economy, and ease the regulatory burden on the key financial
sector. The rate of inflation has peaked, and we expect it will
fall to 53.7% in 2023 and 50.3% in 2024, from a 72.3% peak in 2022.
We expect the lira will continue to depreciate gradually against
the U.S. dollar over the next two years. However, this will be at a
slower pace than in previous years, with the exchange rate
remaining below TRY30 to $1 until year-end 2023, followed by a
depreciation to TRY40 in 2024 and TRY42 in 2025 (from TRY18.7 in
2022).

"We rate Turkcell higher than the sovereign foreign currency rating
on Turkiye because Turkcell passes our hypothetical sovereign
default stress test that assumes, among other factors, a 50%
devaluation of the lira against hard currencies and a 20% decline
in organic EBITDA. This is mainly because the company keeps about
75% of its cash in hard currencies. Therefore, in the hypothetical
case of further lira depreciation, we think the appreciation of the
cash balance would offset the increase in short-term debt
maturities in foreign currencies and capital expenditure (capex).
However, we cap our rating on Turkcell at the level of our 'B+' T&C
assessment on Turkiye, which assumes a government restriction on
foreign currency conversion and repatriation, since Turkcell
generates an overwhelming majority of its cash flow in the country.
Therefore, we rate Turkcell 'B+'.

"A more balanced and differentiated strategy will support market
share and earnings resiliency. Turkcell's operating performance has
been strong in 2022-2023 despite rising inflation that increased
costs, the effects of a local earthquake, and the lira
depreciation, which inflates capex and weighs on free operating
cash flow (FOCF). The company's reported EBITDA margin improved by
two percentage points to 42.5% in the first nine months of 2023
(from 40.5% for the same period in 2022) supported by strong
average revenue per user (ARPU) growth (87% for mobile and 63% for
fixed in third quarter 2023) with no material churn rate. Despite
very high inflation, which rapidly increased the cost base (for
instance personal expenses), sequential price adjustments and the
company's successful upselling efforts to higher tariffs for both
mobile and fixed segments offset inflation pressure in 2022-2023.
The recent change towards 12-month contracts (from 24-month) for
fixed broadband, similar to mobile contracts, could support
profitability improvement in the future. We anticipate the company
will continue its strategy and maintain its leading position in the
Turkish mobile market (with 41.2% subscribers as of second quarter
2023). As a result, we expect Turkcell's revenue growth will be
roughly 70% in 2023 and 40%-50% in 2024, and its S&P Global
Ratings-adjusted margins will be 39%-40% in 2023-2024.

"We expect Turkcell to continue to record strong credit metrics on
the back of a solid operating performance. We expect the adjusted
EBITDA margin could expand further in the coming years supported by
inflation diminishing, ARPU growing, a high-value subscriber mix,
and upselling of services. Therefore, in our base-case forecast, we
expect FOCF to rebound meaningfully from 2023. We forecast adjusted
debt to EBITDA will recover to 1.3x in 2023 from 1.4x in 2022 and
decline further in 2024 to 0.8x-1.2x. Higher than expected lira
depreciation remains one of the key risks to our forecast. This is
primarily because about 70% of Turkcell's debt is denominated in
hard currencies (USD and EUR) as well as a significant portion of
capex. That said, we expect management's prudent foreign exchange
approach would partially offset any negative effects of additional
lira depreciation. At the end of third quarter 2023, the company
had roughly $1.4 billion liquid assets in hard currencies and
reported a net foreign exchange position of $145 million.

"The positive outlook on our long-term issuer credit rating on
Turkcell reflects that on the long-term rating on Turkiye. It also
reflects our expectation of the company's continued solid
operational performance. Our current assessment of Turkcell's
stand-alone credit profile (SACP) reflects our expectation that its
S&P Global Ratings' weighted average adjusted debt-to-EBITDA ratio
will be sustainably at or below 1.5x over the next two years and
FOCF to debt above 10%.

"We could revise the outlook to stable if we took the same action
on the sovereign.

"We could raise our rating on Turkcell if we revised upward our T&C
assessment on Turkiye to 'BB-' and if Turkcell passed our
hypothetical stress sovereign test.

"Governance factors are a moderately negative consideration in our
credit rating analysis of Turkcell. This reflects our view of the
high country risk in Turkiye, where the company's operations are
concentrated, along with smaller exposures to Ukraine and Belarus.
The risks of operating in Turkiye include high lira foreign
exchange rate volatility and exposure to its high inflation
environment."




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

DIGNITY FINANCE: S&P Lowers Class B Notes Rating to 'CC (sf)'
-------------------------------------------------------------
S&P Global Ratings lowered to 'CC (sf)' from 'CCC+ (sf)' its credit
rating on the class B notes issued by Dignity Finance PLC. At the
same time, S&P affirmed its 'B+ (sf)' rating on the class A notes.

The downgrade follows Dignity Finance's announced intention to
undertake a debt restructuring, which S&P views as distressed. The
restructure was approved by most of the class A and B noteholders
on Dec. 12, 2023.

Under the approved debt restructuring offer, the class B notes are
expected to be redeemed at a fixed price of 84.25% of the principal
amount outstanding on the class B notes and accrued but unpaid
interest within 30 days of receiving funds, with the December 2024
interest payment date as a backstop date. S&P said, "We view such
an offer as distressed since the noteholders will receive
materially less value than promised when the original debt was
issued, and absent the now approved proposal, we believe there is a
realistic possibility of a conventional default of the class B
notes over the near to medium term. The challenging operational,
regulatory, and macroeconomic environment has increased the
difficulty in quickly turning around the business. In line with our
previous review, we expect that equity injections from the parent
company will be minimal and only sufficient to fulfill covenant
requirements, and that the issuer may draw on the liquidity
facility for any shortfalls in debt service."

Based on the current proposal, S&P will lower the rating on the
class B notes to 'D (sf)' at the completion of the debt
restructuring.

S&P said, "We don't consider the offer put forward on the class A
notes to be distressed under our criteria. The offer involves the
redemption of the class A notes at 100% of the principal amount
outstanding at the redemption date, including any accrued but
unpaid interest up to that date. We therefore affirmed our 'B+
(sf)' rating on the class A notes.

"That said, we could lower the rating on the class A notes if our
minimum projected DSCRs fall below 1.00:1 in the majority of
periods for the class A notes in our downside scenario. This would
most likely happen if management fails to maintain the business as
a going concern, if the liquidity facility is fully used, or if the
parent does not provide equity cures. We could also lower the
rating on the class A notes should the issuer propose a below par
repayment offer for the class A notes or miss an interest
payment."

Dignity Finance is a corporate securitization of the U.K. operating
business of the funeral service provider Dignity (2002) Ltd. It
originally closed in April 2003 and was last tapped in October
2014.

The transaction will likely qualify for the appointment of an
administrative receiver under the U.K. insolvency regime. An
obligor default would allow the noteholders to gain substantial
control over the charged assets prior to an administrator's
appointment without necessarily accelerating the secured debt, both
at the issuer and at the borrower level.

Dignity Finance's primary sources of funds for principal and
interest payments on the notes are the loans' interest and
principal payments from the borrower and any amounts available
under the undrawn GBP55 million tranched liquidity facility.

S&P's ratings address the timely payment of interest and principal
due on the notes. They are based primarily on our ongoing
assessment of the borrowing group's underlying business risk
profile, the integrity of the transaction's legal and tax
structure, and the robustness of operating cash flows supported by
structural enhancements.


GEMGARTO PLC 2023-1: Moody's Assigns B1 Rating to GBP2.7MM F Notes
------------------------------------------------------------------
Moody's Investors Service has assigned definitive ratings to Notes
issued by Gemgarto 2023-1 PLC:

GBP476.5M Class A Mortgage Backed Floating Rate Notes due December
2073, Definitive Rating Assigned Aaa (sf)

GBP38.3M Class B Mortgage Backed Floating Rate Notes due December
2073, Definitive Rating Assigned Aa3 (sf)

GBP11.0M Class C Mortgage Backed Floating Rate Notes due December
2073, Definitive Rating Assigned A3 (sf)

GBP11.0M Class D Mortgage Backed Floating Rate Notes due December
2073, Definitive Rating Assigned Baa2 (sf)

GBP5.5M Class E Mortgage Backed Floating Rate Notes due December
2073, Definitive Rating Assigned Ba1 (sf)

GBP2.7M Class F Mortgage Backed Floating Rate Notes due December
2073, Definitive Rating Assigned B1 (sf)

Moody's has not assigned a rating to the GBP2.7M Class G Mortgage
Backed Floating Rate Notes due December 2073, GBP5.5M Class Z
Floating Rate Notes due December 2073, Class S1 Certificates due
December 2073 and Class S2 Certificates due December 2073.

RATINGS RATIONALE

The Notes are backed by a static pool of UK residential mortgage
loans originated by Kensington Mortgage Company Limited. This
represents the sixth issuance out of the Gemgarto program.

The portfolio of assets amount to approximately GBP547.7 million as
of October 31, 2023 pool cut off date. The Reserve Fund will be
funded to 1.0% of the Classes A-G Notes balance at closing and the
total credit enhancement for the Class A Notes will be 14.0%.

The ratings are primarily based on the credit quality of the
portfolio, the structural features of the transaction and its legal
integrity.

According to Moody's, the transaction benefits from various credit
strengths such as a granular portfolio and a non-amortising general
reserve sized at 1.0% of Classes A-G Notes balance. However,
Moody's notes that the transaction features some credit weaknesses
such as an unrated servicer; however Kensington Mortgage Company
Limited (KMC), is a wholly owned subsidiary of Barclays Bank UK PLC
(BBUK) (A1/ P-1, deposit rating; Aa3(cr)/P-1(cr)); the UK
ring-fenced bank of Barclays Group. Several mitigants have been
included in the transaction to partially mitigate this. Namely: (1)
a back-up servicer facilitator (CSC Capital Markets UK Limited
(CSC) (NR)); and (2) estimation language whereby the cash flows can
be estimated should the latest servicer report not be available.

Moody's determined the portfolio lifetime expected loss of 2.7% and
Aaa MILAN Stressed Loss of 11.9% related to borrower receivables.
The expected loss captures Moody's expectations of performance
considering the current economic outlook, while the MILAN Stressed
Loss captures the loss Moody's expect the portfolio to suffer in
the event of a severe recession scenario. Expected defaults and
MILAN Stressed Loss are parameters used by Moody's to calibrate its
lognormal portfolio loss distribution curve and to associate a
probability with each potential future loss scenario in the ABSROM
cash flow model to rate RMBS.

Portfolio expected loss of 2.7%: This is higher than the UK prime
sector and is based on Moody's assessment of the lifetime loss
expectation for the pool taking into account: (i) the WA LTV of
83.9%; (ii) the percentage of loans with an adverse credit history,
however, no borrower had CCJs within three years prior to
origination; (iii) the collateral performance of Kensington
Mortgage Company Limited originated loans to date, as provided by
the originator and observed in previously securitised portfolios;
(iv) the current macroeconomic environment in the UK; and (v)
benchmarking with similar UK prime RMBS.

MILAN Stressed Loss of 11.9%: This is higher than the UK prime
sector average and follows Moody's assessment of the loan-by-loan
information taking into account the following key drivers: (i) the
collateral performance of Kensington Mortgage Company Limited
originated loans to date as described above; (ii) the percentage of
loans with an adverse credit history; (iii) the arrears level; and
(iv) seasoning of 1.4 years.

The principal methodology used in these ratings was "Residential
Mortgage-Backed Securitizations Methodology" published in October
2023.

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

Factors that may cause an upgrade of the ratings of the notes
include significantly better than expected performance of the pool
together with an increase in credit enhancement of Notes.

Factors that would lead to a downgrade of the ratings include: (i)
increased counterparty risk leading to potential operational risk
of servicing or cash management interruptions and (ii) economic
conditions being worse than forecast resulting in higher arrears
and losses.

NOVELTEA: Feature Spirit Buys Brand, IP Assets After Liquidation
----------------------------------------------------------------
Coreena Ford at BusinessLive reports that an alcoholic tea brand
which went into liquidation after falling victim to the pandemic is
making a return under new ownership.

Boozy tea business Noveltea, which was launched in Newcastle in
2016, had stirred up the drinks sector with its unusual tea-infused
spirits and it also got financial boosts when its founders appeared
on BBC's Dragons' Den TV show and the German version of the
pitching programme, Cave of Lions.

However, despite proving popular with customers in the UK, Germany
and China, and securing investments from the North East Venture
Fund, the Government's Future Fund and private backers through
crowdfunding campaigns, the company struggled to bounce back from
the pandemic's impact on the hospitality market, BusinessLive
notes.

Liquidators at FRP Advisory were appointed to Tea Venture Limited
-- which traded as Noveltea -- in October 2022, and marketed the
company's assets for sale, including its stock, intellectual
property and brand, BusinessLive recounts.  Documents on Companies
House show FRP received claims totalling more than GBP768,000 from
unsecured creditors and its estimated deficiency was GBP2.66
million, BusinessLive discloses.

Now it has emerged that the IP and Noveltea name were bought by a
Cheltenham business, which has brought Noveltea's popular products
back to the market, through new company Feature Spirit Ltd.,
according to BusinessLive.

Feature Spirit's founder Dave Carson confirmed the company acquired
the brands as well as its IP, including the website and social
media accounts, and has also given the bottles a new look,
BusinessLive states.  The new firm has three different tea-based
liqueurs and a dry gin with tea distillates.


ROLLS-ROYCE PLC: S&P Upgrades ICR to 'BB+', Outlook Positive
------------------------------------------------------------
S&P Global Ratings raised its long-term issuer credit rating on
Rolls-Royce PLC to 'BB+' from 'BB' and affirmed the 'B' short-term
rating. Additionally, S&P raised the issue rating on Rolls-Royce's
senior unsecured debt to 'BB+' from 'BB'. The recovery rating
remains '3' (rounded estimate: 65%).

S&P said, "The positive outlook reflects that we could raise the
ratings if we see evidence of continued robust positive FOCF
generation, continuing to grow in 2024 above 2023 levels, supported
by a further improving operational performance, leading to
increasing profitability and EBITDA margins sustainably above 15%.
We would also expect leverage to remain below 1.5x and FFO to debt
to trend toward 60%, and a supportive financial policy that
demonstrates further deleveraging including gross debt reduction.
Given the inherent volatility of the business during the pandemic
and previously, we would expect to see adjusted profitability
illustrate more stability going forward, which could lead to an
improved assessment of the business risk profile.

"Rolls-Royce's affirmation of its 2023 guidance on FOCF generation
and our expectations for 2024 and 2025 are key factors for the
upgrade. Following Rolls-Royce's Capital Markets Day, where it
discussed the outcome of the strategic review, the group affirmed
its guidance for 2023 that it originally announced at the first
half 2023 results. As such, we expect FOCF generation this year to
exceed GBP900 million, and we forecast this to rise to about GBP1.4
billion-GBP1.6 billion in 2024 and toward GBP1.8 billion-GBP2
billion in 2025.

"We project this will predominantly be spurred by the continued
improvement in the civil aerospace sector, where rising engine
flying hours are resulting in growing long-term service agreement
(LTSA) receipts. After accounting for the portion payable to risk
and revenue sharing partners, Rolls-Royce recorded GBP500 million
of LTSA inflows in the first half of 2023. We expect this to reach,
or slightly exceed, GBP1 billion for the year.

"According to the International Air Transport Association, widebody
air travel was at around 90% of the corresponding 2019 level in
September 2023, and we expect this to roughly be the level for the
whole year. In 2024 and 2025, we expect this to grow further,
expanding Rolls-Royce's LTSA receipts and its FOCF generation. We
also expect that working capital inflows will support FOCF
generation over the next few years. Management has identified
around GBP2 billion of inflows that can be recognized in the period
to 2027, through inventory reductions and improved supplier payment
terms. We expect these to start to come to fruition in 2024, after
significant outflows of almost GBP500 million in the first half of
2023. We forecast significant cash outflows in 2023, namely GBP200
million for concession payments to Boeing, GBP389 million of
hedge-related costs, GBP150 million related to supplier fires,
GBP100 million for the recent legal judgement, and GBP100 million
related to Trent 1000 engine remediation. Despite these payments,
Rolls-Royce will post strong positive FOCF. We also forecast a
significant portion of these costs will reduce in 2024, when we
expect total outflows related to these issues to total around
GBP400 million. The improved performance also stems from improving
operating profit margins.

"Operating profit is rising through increasing revenues,
particularly in civil aerospace, and margins are benefitting from
multiple factors. These factors include, in our view, increasing
spare engines sales that are more profitable than original
equipment, and rising aftermarket services through more shop visits
as engine flying hours increase. The transformation and
restructuring projects undertaken by management through 2023 are
also of benefit to margins as they lower the cost base in civil
aerospace and across the business.

"We anticipate operating profit margins in civil aerospace will
grow substantially, from 2.5% in 2022 to closer to 12% this year,
and marginally improve in 2024. In defense, we also expect growth
in margins, although at a slower pace, from 11.8% last year to
above 12% in 2023, and closer to 13% in 2024. Power systems margins
illustrate the expected decline for 2023, due to the product mix
and increased costs; we expect margins to be close to 7% in 2023
and 7.5% in 2024. All in all, we expect the group's operating
profit margin to be 9.1%-9.5% this year and 9.5%-10% in 2024. This
should translate into S&P Global Ratings-adjusted EBITDA margins of
nearly 16% in 2023 and 16.5% in 2024. We forecast revenues will
increase by nearly 6% to GBP14.2 billion-GBP14.5 billion this year,
with civil aerospace showing the highest growth.

"Rolls-Royce's information on financial policy supports our view of
steady deleveraging in 2023 onward, as credit metrics continue to
strengthen. Rolls-Royce intends to repay its notes maturing in 2024
and 2025, illustrating a desire to reduce its gross debt. Coupled
with stronger FOCF, we expect adjusted debt to be around GBP3.4
billion in 2023 and to reduce to GBP2.2 billion in 2024. This will
support our view of debt to EBITDA continually trending lower, to
about 1.5x this year and close to 1x in 2024. Rolls-Royce continues
to publicly state its commitment to deleveraging and its ambition
to eventually return to an investment-grade rating. We also note
Rolls-Royce will benefit from GBP1 billion-GBP1.5 billion of
proceeds from disposals over the next few years, also potentially
supporting its deleveraging.

"The positive outlook reflects that we could raise the ratings over
the next 12 months if we see continued signs of a supportive
financial policy leading to deleveraging through the reduction of
gross debt, with adjusted debt to EBITDA maintained below 1.5x and
FFO to debt trending toward 60%, given the inherent volatility seen
in the business in the previous few years. We would also require
sustained and increasing FOCF generation and EBITDA margins
maintained above 15%.

"We could revise the outlook to stable or lower the ratings if
revenues and EBITDA generation were significantly lowered by
potential reductions in engine flying hours, potential supply chain
bottlenecks, or cost inflation, meaning adjusted EBITDA margins did
not improve from 2022 levels, or much lower than anticipated FOCF
in 2023 or 2024. We could also consider a negative rating action if
leverage increased above 3x or FFO to debt approached 30%.

"We could raise the ratings if we see evidence of continued robust
positive FOCF generation, continuing to grow in 2024 above 2023
levels, supported by a further improving operational performance,
leading to increasing profitability and EBITDA margins sustainably
above 15%. We would also expect leverage to remain below 1.5x and
FFO to debt to trend toward 60%, and a supportive financial policy
that demonstrates further deleveraging including gross debt
reduction. Given the inherent volatility of the business during the
pandemic and previously, we would expect to see adjusted
profitability illustrate more stability going forward, which could
lead to an improved assessment of the business risk profile."


THAMES WATER: Appoints Christ Weston as New Chief Executive
-----------------------------------------------------------
John Aglionby and Gillian Plimmer at The Financial Times report
that Thames Water has appointed Chris Weston, former head of power
supplier Aggreko, as its chief executive, as the UK's biggest water
utility faces scrutiny over its financial health.

Thames launched a three-year turnaround plan this month as it
recorded a 54% fall in pre-tax profit to GBP246 million for the six
months to September 30, the FT relates.

Britain's largest water distributor is seeking to raise equity of
GBP2.5 billion from shareholders in the coming years, in addition
to GBP750 million already pledged, the FT discloses.  The equity is
subject to bill increases that need to be approved by the
regulator, Ofwat, the FT notes.

Thames, the FT says, is facing more than GBP1bn in debt repayments
by the end of 2024.  This includes a GBP190 million facility in its
parent company Kemble Water maturing in April, according to its
accounts published in November, the FT states.

Former chief executive Sarah Bentley left the company in June after
a boardroom row, prompting government ministers to discuss a
temporary nationalisation of the utility that provides water to
about 25% of the population of England, the FT relays.

Ms. Bentley had been struggling to improve a company with a long
legacy of under-investment and GBP14 billion in debt, the FT
discloses.

According to the FT, Thames chair Sir Adrian Montague said Mr.
Weston was taking over at "a crucial period of delivering our
refocused turnaround plan and providing the service that customers
rightly expect of us".


VEDANTA RESOURCES: S&P Lowers ICR to 'CC', Keeps CreditWatch Neg.
-----------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Vedanta Resources Ltd. and long-term issue ratings on the company's
bonds due January 2024, August 2024, and March 2025 to 'CC' from
'CCC'. The ratings remain on CreditWatch with negative
implications, where they were first placed on Sept. 29, 2023. The
CreditWatch status reflects the likelihood that we would downgrade
Vedanta Resources to 'SD' (selective default) if the company
completes the transaction. S&P could also lower the ratings on the
company's three bonds to 'D' in that event.

At the same time, S&P revised the CreditWatch implications on the
'CCC' issue rating on Vedanta Resources' bond due April 2026 (which
is not part of the proposed transaction) to developing from
negative. This reflects the likelihood that the rating on this bond
could move in either direction, depending on the outcome of the
transaction on the other bonds.

S&P views Vedanta Resources' proposed liability management exercise
involving three of its U.S. dollar-denominated bonds totaling
US$3.2 billion as a distressed transaction under its criteria. As
part of the exercise, the company intends to address the three bond
maturities using a mix of cash and new bonds. Accordingly, it will
exchange about half of the January 2024 bond with new bonds
maturing in January 2027, and most of the August 2024 and March
2025 bonds with new amortizing bonds maturing in December 2028.

S&P base its view on the following key reasons:

-- The likelihood of a conventional default in the absence of the
transaction is high. This is because of the company's large
upcoming debt maturities and weakened access to both internal cash
flow and external financing. The company has about US$4.5 billion
in debt maturities through March 2025.

-- S&P does not consider the new terms of the proposed transaction
as constituting adequate compensation to offset the lengthened
maturities and new terms that are different from the original
promise.

S&P does not regard attributes of the transaction--such as higher
coupons on the August 2024 bond and March 2025 bonds, and certain
additional structural enhancements on the bonds--as providing
adequate offsetting compensation for the extension of the
maturities. This is because the transaction also gives priority of
the sizable cash flow and proceeds from asset sales to a new
US$1.25 billion private credit facility over the other creditors.

As part of the transaction, the private credit facility will have
priority access to brand fee payments by subsidiary Vedanta Ltd. to
Vedanta Resources. While the group has securitized the brand fee
payments to other lending facilities since late 2021, S&P believes
the quantum of the brand fee and its proportion to the total cash
flow available to Vedanta Resources to service debt will represent
40%-50% of the total cash flow at Vedanta Resources, excluding
extraordinary dividends. This is up from less than 20% previously.

In addition, until US$750 million of the private credit facility is
repaid, it will have priority over extraordinary dividends that any
asset sales at Vedanta Ltd. could generate. The group will
thereafter distribute proceeds equally between the private credit
facility and bondholders until it fully repays the private credit
facility.

The additional structural enhancements for the bonds include:

-- An additional guarantee from Twin Star Holdings Ltd. on the
August 2024 bond that reduces the structural subordination of the
bond.

-- More contractual access to Vedanta Ltd.'s brand fees for
holders of the January 2024 and March 2025 bonds once the group
fully repays the private credit facility.

Furthermore, unlike numerous similar transactions globally, there
are no haircuts on the principal or coupon amounts of the three
bonds, indicating Vedanta Resources' willingness to pay. The new
notes will have a coupon of 13.875%. This results in a meaningful
step-up in coupons for the August 2024 and March 2025 bonds, and,
together with consent fee payments, represents an internal rate of
return of about 15%-16% for the three bonds. This return is largely
in line with that of other 'CCC' credits, rather than meaningfully
higher.

S&P placed the 'CCC' long-term issue rating on the April 2026 bond
on CreditWatch with developing implications. This is because this
bond is not subject to restructuring under the exercise. The
CreditWatch with developing implications indicates the likelihood
that the rating on this bond could move in either direction,
depending on the outcome of the transaction on the other bonds.

CreditWatch

S&P said, "The CreditWatch with negative implications on our issuer
credit rating and on the issue ratings of the January 2024, August
2024, and March 2025 bonds reflects the likelihood that Vedanta
Resources will complete its liability management exercise over the
next few weeks. Upon completion of the transaction, we could lower
the long-term issuer credit rating on Vedanta Resources to 'SD' and
the long-term issuer ratings on the company's three bonds to 'D'.

"Shortly after that, we expect to raise the ratings to a level we
believe will reflect the liquidity position and capital structure
of Vedanta Resources post-transaction. While the company's capital
structure will be much stronger post the transaction, we believe
the ratings could initially be in the 'CCC' category, pending
clarity on the repayment plans for about US$1 billion of debt due
in fiscal 2025 (year-end March 31). Ultimately, the rating could be
higher if Vedanta Resources' liquidity improves such that there is
no significant refinancing risk over the next 12-15 months.

"In the event Vedanta Resources fails to complete the liability
management exercise, the ratings will remain at the current level.
The focus will switch to the company's ability to meet its US$1
billion bond maturity due Jan. 21, 2024. The company has yet to
fully lock in funding options for this bond. Therefore, we believe
the risk of non-payment in full in this scenario has increased.

"We revised the CreditWatch implications on the April 2026 bond to
developing to reflect the likelihood that the rating on this bond
could move in either direction, depending on the outcome of the
transaction on the other bonds.

"If the group does not complete the transaction, we could lower the
issue rating on the April 2026 bond due to uncertainties
surrounding the payment of the January 2024 bond and the presence
of a cross-default in the bond indenture."

However, if the transaction is successful, the issue rating on the
April 2026 bond could be higher, depending on the post-transaction
liquidity position of Vedanta Resources and any corresponding
upward action on the issuer credit rating following the
restructuring.




===============
X X X X X X X X
===============

[*] BOOK REVIEW: The Heroic Enterprise
--------------------------------------
The Heroic Enterprise: Business and the Common Good

Author: John Hood
Publisher: Beard Books (reprint of book published by The Free
Press/Division of Simon and Schuster in 1996).
Paperback: 266 pages
List Price: $34.95
Order your copy at https://bit.ly/3awLUV3

Hood writes as a counterbalance to ideas that business should be
expected to contribute to the common good along the lines of
charities, say, or public health.  He writes too against the highly
partisan, pernicious perspective that business activity is
antisocial and disruptive which at times gains some degree of
credibility.

Critiques of business have been around as long as commerce and
business have been around.  These come usually from religious or
political zealots seeking dictatorial hold over all significant
kinds of human activity and enterprise.  In this work, Hood aims to
counterbalance latter-day versions of such critiques arising in
American society.  The counterculture, antiestablishment 1960s was
a time when such critiques were particularly strong.  They have
moderated since, yet remain a persistent chorus which influences
politics and imagery and public affairs of business.

Hood does not aim to stifle or eliminate debate about the effects
of business on society or how business should engage in business.
What he aims for is dismissing once and for all myopic and almost
utopian conceptions about business and related erroneous purposes
and values of it.  Such conceptions are worrisome to
businesspersons not because they believe they have any foundation,
but because they waste resources and energy in having to
continually correct them so business can function properly. And to
the extent such myopic conceptions are believed or entertained by
the public, they hamper the public and politicians in working out
policies by which the greatest benefits of business can be reaped
by society.

The author clarifies the place and role of business by contrasting
business with other parts of society.  A standard, self-evident
tenet of sociologists going back to the time of Plato is that
society is made up of different parts fulfilling different roles
for the varied needs of society and so that a society will function
smoothly and survive.  Business is distinguished from government
and philanthropy.  "Businesses exist to make and sell things,
whereas by contrast "governments exist to take and protect things
[and] charities exist to give things away."  The social
responsibility for each category of institution is inherent in its
purposes and activities.  For example, businesses alone cannot
solve environmental problems. Whatever problems which can be
attached to business are related to government policies and
business's operations to satisfy consumer interests.  Hence,
business alone cannot solve environmental problems, and should not
be expected to.  Critics requiring that business solve
environmental problems without similarly requiring changes in
government policies and consumer interests are shortsightedly and
unreasonably tarnishing business while not making any relevant or
productive arguments for dealing with environmental problems.

In elucidating business's proper place in and contributions to
society, Hood is not unmindful that some businesses fail to fulfill
their role in good faith and beneficially.  But instead of
criticizing business fundamentally, he proffers questions critics
can ask before targeting particular businesses.  Two of these are
"Are corporations obtaining their profits through force or fraud?"
and "Are corporations putting investments at their disposal to the
most economically productive use?"  Hood's perspective in support
of business against unfair and irrelevant criticisms is based on
the acknowledgment that business is operating productively, for the
common good, and is open to cooperative activities with other parts
of society in trying to resolve common problems.

"The Heroic Enterprise" is not an argument for business -- for as a
fundamental aspect of any society, business does not need an
argument to justify it.  The book mostly takes the approach of
reviewing why business is necessary and therefore must be
naturally, easily accepted -- namely, because of the manifold
benefits business provides for society and because it along with
good government and respectable morals has been a primary engine
for the betterment of human life.

John Hood has much experience in the media and communication as a
syndicated columnist, TV commentator, and radio host.  Author of
seven nonfiction books on subjects as business, advertising, public
policy, and political history, and many articles for national
publications such as the Wall Street Journal, Hood is President of
the John William Pope Foundation, a Raleigh, N.C.-based grantmaker
that supports public policy organizations, educational
institutions, arts and cultural programs, and humanitarian relief
in North Carolina and beyond. Hood also serves on the board of the
John Locke Foundation, the state policy think tank he helped found
in 1989 and led as its president for more than two decades.  He
teaches at Duke University's Sanford School of Public Policy.



                           *********


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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