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

                          E U R O P E

          Wednesday, March 6, 2024, Vol. 25, No. 48

                           Headlines



A Z E R B A I J A N

AZERBAIJAN: Fitch Affirms 'BB+' Foreign Currency IDR, Outlook Pos.


D E N M A R K

NUUDAY A/S: Fitch Affirms 'B' LongTerm IDR, Outlook Stable


F R A N C E

CERELIA PARTICIPATION: S&P Upgrades ICR to 'B', Outlook Stable
FNAC DARTY: Moody's Cuts CFR to Ba3 & Senior Unsecured Notes to B1
PICARD BONDCO: Moody's Affirms 'B3' CFR, Outlook Remains Stable


I R E L A N D

AQUEDUCT EUROPEAN 2-2017: Moody's Affirms B1 Rating on Cl. F Notes


I T A L Y

DEDALUS SPA: Moody's Affirms 'B3' CFR, Outlook Remains Negative


L U X E M B O U R G

SANI/IKOS GROUP: Moody's Alters Outlook on 'B3' CFR to Stable


N O R W A Y

HURTIGRUTEN NEWCO: Moody's Assigns 'Caa2' CFR, Outlook Stable


U N I T E D   K I N G D O M

DEEP BEAT: Bought Out of Administration by LCR Operations
GREENSHIRES GROUP: Goes Into Administration, Owes GBP1.3 Million
HEIGHTVALE LIMITED: Collapses Into Administration
JANKEL ARMOURING: Falls Into Administration
LIBERTY GLOBAL: Moody's Alters Outlook on 'Ba3' CFR to Negative

THAMES WATER: Seeks to Avoid Potential Taxpayer Bailout
VOLUME GROUP: Enters Administration, Owes GBP1.3 Million
VUE ENTERTAINMENT: Moody's Rates New EUR63MM Sec. Term Loan 'B3'

                           - - - - -


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A Z E R B A I J A N
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AZERBAIJAN: Fitch Affirms 'BB+' Foreign Currency IDR, Outlook Pos.
------------------------------------------------------------------
Fitch Ratings has affirmed Azerbaijan's Long-Term Foreign-Currency
Issuer Default Rating (IDR) at 'BB+' with a Positive Outlook.

KEY RATING DRIVERS

Positive Outlook: The rating is supported by a very strong external
balance sheet, the lowest public debt in the peer group, and
financing flexibility from large sovereign wealth fund assets. Set
against these factors are weak governance indicators, a weak
economic policy framework, high albeit declining financial
dollarisation, heavy dependence on hydrocarbons, and geopolitical
risks. The Positive Outlook reflects continued strengthening of
external and fiscal buffers due to higher-than-budgeted energy
prices, and prospects of greater expenditure restraint than in
previous energy-sector windfalls.

Strengthening External Position: The current account surplus halved
to 14.8% of GDP in 2023, but remains the highest in the 'BB'
category. Fitch expects surpluses to remain robust in 2024-2025
despite lower oil prices (oil and gas revenues account for 90% of
total exports). Sovereign foreign-currency assets rose to USD69.8
billion in 2023, 80% of which are held by the Sovereign Wealth Fund
of the Republic of Azerbaijan (SOFAZ), reflecting still-high energy
revenues and record high returns on SOFAZ's investment portfolio.
Azerbaijan's net sovereign asset position, estimated at 67% of GDP
in 2023, will remain stable in 2024-2025, the highest in the peer
group.

Fiscal Surpluses, Developing Fiscal Rule: Fitch expects
higher-than-budgeted oil prices and non-oil revenue growth to
underpin continued surpluses, despite increased reconstruction
spending in Karabakh. Fitch estimates the consolidated budget
surplus rose to 7.8% of GDP in 2023. Azerbaijan has delayed by one
year (to 2027) the targeted reduction in the non-energy primary
deficit to 17.5% of non-oil GDP (from 25% in 2023) under its fiscal
rule, to accommodate expenditure commitments related to Karabakh
and defence.

The government also increased its public debt ceiling to 30% of GDP
(previously 20%). Fitch considers that the rule has a limited
record, and a weak institutional framework in terms of oversight
and establishment of fiscal targets.

Government Debt Increase: Government debt rose to 21.8% of GDP in
2023 following the government taking over 8% of GDP domestic
guaranteed debt from Agrarkredit. Fitch forecasts debt to average
21.6% of GDP in 2024-2025, the lowest in the 'BB' category.
External government guarantees and on-lending declined to USD6
billion (8.2% of GDP) in 2023, with most of this related to the
Southern Gas Corridor project, which is profitable and not likely
to require sovereign support.

Weak Policy Framework: The Central Bank of the Republic of
Azerbaijan (CBRA) uses the exchange rate as the intermediate
operational target and has introduced instruments to improve
transmission into the money market and banking rates. Monetary
policy is constrained by underdeveloped capital markets, excess
liquidity, low financial intermediation and still relatively high
financial dollarisation. Moreover, lack of institutional
independence and clarity of mandates for the CBRA and SOFAZ within
the broader exchange-rate framework persist.

Fitch considers there is still strong political prioritisation to
maintain the de facto exchange rate peg to the US dollar, despite
the authorities' stated aim of allowing greater flexibility in the
medium term.

Inflation Declining: Average inflation declined to 9% in 2023
supported by a strong manat relative to Azerbaijan's main trading
partners and lower international food prices. Fitch projects it
will ease further to 4.5% in 2024, slightly above the 4% projected
'BB' median. As annual inflation entered the CBRA's target band
(4%±2pp), the central bank has cut its main policy rate by 125bp
to 7.75% since November. In Fitch's view, the pace and magnitude of
further easing will depend on risks related to higher commodity
prices and demand side pressures, for example, due to strong growth
in wages and government spending execution.

Weak Trend Growth: Growth markedly decelerated to an estimated 1.1%
in 2023, reflecting a contraction in the oil and gas sector, and
easing of the post-pandemic boost in certain key non-oil sectors,
most notably transport. Fitch expects growth to recover to 2.8% in
2024 and 2.5% in 2025, supported by public investment, while the
energy sector drag could ease due to new oil production coming
onstream. Progress towards economic diversification is constrained
by the large presence of the state, limited access to financing,
governance challenges and low non-energy foreign investment.

Banking Fundamentals Steadily Improving: The banking sector has
improved, but is still fairly weak, reflected by Fitch's Banking
System Indicator score of 'b'. The overdue loans ratio decreased to
a record low 1.8% at end-2023 (end-2022: 2.9%), underpinned by
strong loan growth, loan recovery and write-offs. Capitalisation
declined, but remains adequate, with the sector Tier 1 capital
ratio at 13.5% at end-2023 (15.2% at end-2022). Profitability
remained robust, supported by high asset yields and moderate
funding costs due to the prevalence of current accounts in the
deposit base.

Deposit dollarisation fell below 40% in 2023, approaching the
historical peer median of 35%; foreign-currency loans fell to 19%
of the sector loans at end-2023 (20% end-2022).

Reduced Conflict Risks: Azerbaijan re-took full control of Karabakh
in September through a brief and decisive military operation.
Armenia and Azerbaijan are currently seeking to directly negotiate
a peace agreement, but contentious issues such as border
delimitation and demarcation and the construction of a land
corridor to Nakhichevan (through Southern Armenia) remain.
Relations with countries in the region and the West are complex,
multifaceted, and influenced by global geopolitical developments.
President Ilham Aliyev won a new term in office in the February
early presidential elections.

ESG - Governance: Azerbaijan has an ESG Relevance Score (RS) of '5'
for both Political Stability and Rights and for the Rule of Law,
Institutional and Regulatory Quality and Control of Corruption.
Theses scores reflect the high weight that the World Bank
Governance Indicators (WBGI) have in its proprietary Sovereign
Rating Model. Azerbaijan has a low WBGI ranking at the 28
percentile reflecting very poor voice and accountability,
relatively weak rights for participation in the political process,
uneven application of the rule of law and a high level of
corruption.

RATING SENSITIVITIES

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

- Macro: Reduced confidence in the capacity of Azerbaijan's policy
framework to preserve macroeconomic and financial stability in the
event of external shocks, for example, oil price volatility.

- Public Finances: Significant deterioration in the strength of the
public finances, for example, due to significant fiscal loosening.

- External Finances: Lower energy prices sufficient to have a
material negative impact on external buffers.

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

- Public Finances: Greater confidence that the strong public
balance sheet will be preserved, for example, due to continued
expenditure restraint or prolonged high energy prices.

- Macro: Greater confidence that improvements in the effectiveness
and predictability of Azerbaijan's policy framework will help the
economy manage external shocks and reduce macro volatility.

- External Finances: Further strengthening of the external balance
sheet, for example, due to sustained high energy revenues.

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

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

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

- Macro: -1 notch, to reflect weaknesses in Azerbaijan's
macro-framework, including lack of institutional independence and
clarity of mandates for the CBRA and SOFAZ in terms of FX policy,
significant constraints to monetary policy and a weak record of
preserving the fiscal and external balance-sheet gains from
previous energy windfalls.

- Public Finances: +1 notch added to reflect the sovereign's
enhanced financing flexibility and public debt sustainability
relative to 'BB' peers, derived from large SOFAZ assets, as well as
the reduction of contingent liability risks derived from sovereign
guarantees following the migration of a large portion of these into
the sovereign balance sheet and SRM score.

- External Finances: +1 notch, to reflect large SOFAZ assets, which
underpin Azerbaijan's exceptionally strong foreign-currency
liquidity position and the country's very large net external
creditor position.

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

COUNTRY CEILING

The Country Ceiling for Azerbaijan is 'BB+' in line with the LT FC
IDR. This reflects no material constraints and incentives, relative
to the IDR, against capital or exchange controls being imposed that
would prevent or significantly impede the private sector from
converting local currency into foreign currency and transferring
the proceeds to non-resident creditors to service debt payments.

Fitch's Country Ceiling Model produced a starting point uplift of 1
notch above the IDR. Fitch's rating committee applied an offsetting
- 1 notch qualitative adjustment to this, under the Near-Term
Macro-Financial Stability Risks and Exchange-Rate Risks to reflect
limited policy predictability, institutional independence and
clarity of mandates for CBA and SOFAZ within the broader exchange
rate framework, which increases the risk of a disruptive adjustment
to a very severe shock. In 2016, authorities closed FX bureaus and
attempted to introduce a FX transaction tax. There is still a
strong political prioritisation to maintaining the 1.7 AZN/USD de
facto exchange rate peg.

ESG CONSIDERATIONS

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

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

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

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

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

RATINGS

   Entity/Debt                      Rating            Prior
   -----------                      ------            -----
Azerbaijan         LT IDR            BB+   Affirmed    BB+

                   ST IDR            B     Affirmed    B

                   LC LT IDR         BB+   Affirmed    BB+

                   LC ST IDR         B     Affirmed    B

                   Country Ceiling   BB+   Affirmed    BB+

senior unsecured  LT                BB+   Affirmed    BB+




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D E N M A R K
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NUUDAY A/S: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
----------------------------------------------------------
Fitch Ratings has affirmed Nuuday A/S's (Nuuday) Long-Term Issued
Default Rating (IDR) at 'B'. The Outlook is Stable. Fitch has also
affirmed the company's EUR500 million term-loan B (TLB) at 'BB-'
with a Recovery Rating of 'RR2'.

Nuuday's 'B' IDR is constrained at one notch above the 'b-'
consolidated credit profile of parent DK Telekommunikation Aps (DK
Tele) combined with Nuuday.

The Stable Outlook reflects improving free cash flow (FCF)
generation and declining cash flow leverage in Nuuday over the next
18-24 months, and high, but currently contained, refinancing risk
in DKT Tele.

KEY RATING DRIVERS

'b' Standalone Credit Profile: Nuuday's 'b' SCP reflects high cash
flow leverage for an asset-light telecoms service company, negative
FCF owing to high capex and transformation operating expenses, and
intense competition in the Danish market. This is balanced by
Nuuday's strong domestic position in mobile, broadband and TV.

The 'b' SCP also reflects its view that Nuuday will be able to
address competitive pressures on revenue with an improved focus on
customer services and efficient cost-optimisation measures. Fitch
also assumes reduced capex intensity by 2025/2026, concurrently
with the completion of the IT transformation programme in 2026 and
FCF turning positive.

PSL Linkage: Fitch has applied its Parent and Subsidiary Linkage
(PSL) Rating Criteria and taken the stronger subsidiary and weaker
parent approach. Nuuday's debt financing is separate from that of
its intermediate parent DK Tele, with no cross-guarantees or
cross-default provisions and separate security packages. However,
overall control by the parent and the private TLB lead to its
assessment of 'open' access and control and 'porous' legal
ring-fencing, resulting in a consolidated profile +1 notch rating
approach.

High Cash Flow Leverage: Fitch forecasts Fitch-defined EBITDA
leverage at around 3.0x in 2024-2025, which is below the negative
sensitivity for the 'B' rating. However, Fitch expects cash flow
from operations (CFO) less capex/total debt to remain negative in
2024-2025, which is a key rating constraint. Fitch believes that
asset-light operators bear higher operational risks than integrated
telecom companies, resulting in typically tighter leverage
thresholds.

High Investments Drive Negative FCF: Fitch expects Nuuday's FCF to
remain negative in 2024-2025, primarily due to investments in
streamlining its product portfolio and organisational structure and
a newly launched IT transformation programme. The IT programme
(capex and operating spending) is spread across 2022-2026, and is
part funded by excess cash left on its balance sheet in connection
with the TLB financing of Nuuday. Fitch also expects its revolving
credit facility (RCF) to be 50% utilised in 2025 to fund cash
outflows.

Cost Savings Offset Margin Pressure: Fitch forecasts falling gross
profit margins as customers transition to fibre from copper, and a
declining subscriber base for fixed-TV and landline voice. Higher
infrastructure cost is only partly offset by more profitable
mobility services and price increases. Fitch expects pressures on
gross profit to be compensated by cost savings and forecast reduced
operating expenses in relation to sales, such that adjusted EBITDA
(as defined by the company) remains broadly stable at around DKK1.6
billion-DKK1.7 billion in its forecast.

Fitch incorporates DKK300 million-DKK70 million of annual operating
spending from the IT transformation programme into Fitch-defined
EBITDA. The project should come to an end by 2026, allowing
operating EBITDA margin to return towards 10%.

Leading Market Positions: Nuuday holds the leading position in the
end-user market for mobile, broadband and pay-TV services in
Denmark with a strong portfolio of brands in both B2C and B2B. It
is underpinned by the leadership in infrastructure quality and
coverage of TDC NET A/S - the resulting network company from the
split of the TDC Group (while Nuuday is the resulting service
company from the split).

Fitch believes the structural separation of TDC NET will not affect
Nuuday's market position and expect it to continue benefiting from
its long-term partnership with TDC NET. Nuuday's partnerships with
utility companies that offer wholesale fibre provides additional
flexibility for its broadband expansion as underlined by an
increased subscriber base across utilities' regional networks.

Access to Best Infrastructure: Its long-term contracts and
established relationships with TDC NET allow Nuuday to maintain its
competitive advantage in infrastructure despite its split from TDC
Group. Fitch expects TDC NET's quality leadership to persist, which
is a major strength for Nuuday over its competitors. This is
particularly true in the mobile segment, where Nuuday benefits from
being well ahead of the competition in 5G. In broadband,
competition is stiff due to the ability of all service providers to
gain non-discriminatory access to TDC NET's and the utilities'
fibre networks.

Commercial Risks Increase: The separation of network infrastructure
from Nuuday effectively passes on the risk of increasing
competition to service companies. Intense competition may put
pressure on prices and increase churn, which, combined with a high
share of fixed costs for wholesale network services, may squeeze
margins.

However, the separation of networks can help operators increase
focus on customer satisfaction and operational efficiency. It also
removes the risks associated with investing in new technologies,
passing them on to wholesale network providers.

DERIVATION SUMMARY

The operating profiles of asset-light operators are weaker than
those of integrated telecoms operators due to the former's
dependence on third-party infrastructure, higher exposure to the
risk of stiff competition and operational under-performance, and
lower margins.

Nuuday's peer group includes small and medium-sized domestically
focused telecom operators Lorca Holdco Limited (B+/Stable), PLT VII
Finance S.a r.l. (Bite; B/Stable) and eircom Holdings (Ireland)
Limited (B+/Stable). Different leverage thresholds among this peer
group reflect differences in domestic market competitive intensity,
strength of market positions, margins and cash flow generation.
Fitch sees lower margins and negative FCF as constraining factors
for Nuuday's ratings.

KEY ASSUMPTIONS

- Neutral to positive revenue growth in 2024-2026

- Fitch-defined EBITDA margin decreasing towards 8% in 2024 on
large IT transformation costs, from 10% in 2023, before increasing
towards 10% in 2026 as the programme comes to an end

- Capex at around DKK1.5 billion in 2024 (including IT capex),
gradually reducing to DKK900 million in 2026

- Working-capital outflows at around 2.7% of revenues in 2024,
falling towards 0.5% in 2026 (including impact from IT
transformation programme)

- Negative FCF in 2024-2025, funded by cash overfunding and RCF
drawings

RECOVERY ANALYSIS

Fitch assumes Nuuday would be reorganised as a going concern in
distress or bankruptcy rather than liquidated.

Post-restructuring EBITDA is estimated at DKK1.1 billion,
reflecting stress assumptions of intensifying market competition,
and failure to deliver planned cost savings. A distressed
enterprise value multiple of 4.0x is used to calculate a
post-restructuring valuation.

Fitch deducts 10% for administrative claims and allocate the
residual value according to a structured debt waterfall analysis.
Fitch expects the EUR135 million RCF to be fully drawn in a
default, ranking equally with its EUR500 million TLB. Based on
current metrics and assumptions, the waterfall analysis generates a
ranked recovery at 84% in the 'RR2' band, indicating a 'BB-'
instrument rating for the senior secured TLB.

RATING SENSITIVITIES

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

- Cash flow from operations less capex at more than 3% of total
debt, reflecting a stable competitive market position and a
normalising capex profile

- EBITDA leverage sustained at below 4.5x

- An improved consolidated credit profile of DK Tele combined with
Nuuday

- Weakening of access and control, or legal ties between DK Tele
and Nuuday

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

- Weakening of the consolidated credit profile of DK Tele combined
with Nuuday

- EBITDA leverage sustained at above 5.5x

- Increased competitive intensity in the Danish telecoms market,
resulting in declining EBITDA and sustained negative FCF

- Weak liquidity, including continued reliance on the RCF to fund
negative FCF

LIQUIDITY AND DEBT STRUCTURE

Satisfactory Liquidity: Fitch forecasts negative FCF of DKK1.4
billion in 2024-2025 owing to high capex and the IT transformation
programme. Fitch expects the outflows to be funded by cash on its
balance sheet, and drawings under the committed EUR135 million
(DKK1 billion) RCF. Fitch expects around 50% of the RCF to be used
in 2025.

Refinancing Risk: Refinancing risk is mitigated by the forecast
normalisation of capex, with Fitch-defined EBITDA leverage of
around 3.0x in 2026 and neutral-to-positive FCF. Weaker debt
service metrics and approaching maturities (February 2027) in DK
Tele are likely to affect its assessment of Nuuday's refinancing
risk, as enforced share pledges under DK Tele's debt could lead to
a mandatory prepayment under Nuuday's debt structure.

ISSUER PROFILE

Nuuday is the service company resulting from the split of the
Danish incumbent telecoms operator TDC Group. The company offers
bundled and unbundled products covering mobile, broadband, TV and
telephony using the fixed and mobile network from TDC NET and
third-party regional fibre networks.

PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS

Nuuday's IDR is constrained to one notch above DK Tele's
consolidated profile, the latter of which takes into account
Nuuday's and DK Tele's debt.

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
   -----------               ------         --------   -----
Nuuday A/S           LT IDR    B    Affirmed            B

   senior secured    LT        BB-  Affirmed   RR2      BB-




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F R A N C E
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CERELIA PARTICIPATION: S&P Upgrades ICR to 'B', Outlook Stable
--------------------------------------------------------------
S&P Global Ratings raised its ratings on Cerelia Participation
Holding SAS and its senior debt to 'B' from 'B-'. The '3' recovery
rating (50% prospects) on the senior debt is unchanged.

The stable outlook reflects S&P's view that Cerelia's profitable
growth and limited discretionary spending, teamed with positive
FOCF, should support deleveraging to 6.0x-6.5x in the next 12
months.

S&P said, "Our upgrade reflects Cerelia's rapid deleveraging this
fiscal year thanks to a larger-than-expected rebound in EBITDA.
Cerelia reported revenue of EUR347 million for the first five
months of fiscal 2024 (+12% versus last fiscal year). The revenue
growth trajectory is above our previous base case, mostly stemming
from high volume growth in North America and most of European
operations. Also for the first five months of fiscal 2024, reported
EBITDA reached EUR46 million, representing an 87% increase over
fiscal 2023. This is thanks to the strong revenue growth across its
geographies and absorption of raw materials cost increases, and we
note the benefits from the ramp-up of the U.S. operations, which
were bolstered by the operating leverage effect on profitability.
This, alongside the good volume visibility from contracted revenue
and stable categories, leads us to think Cerelia will generate
revenue of EUR850 million-EUR870 million in fiscal 2024 with S&P
Global Ratings-adjusted EBITDA of EUR100 million-EUR110 million
(versus our previous expectation of EUR90 million-EUR95 million).
For fiscal 2025, we project revenue of EUR940 million-EUR960
million and S&P Global Ratings-adjusted EBITDA of EUR120
million-EUR130 million (versus our previous expectation of EUR100
million-EUR110 million). This means we anticipate Cerelia's FOCF to
improve to about EUR30 million by fiscal 2025 from EUR18
million-EUR20 million in fiscal 2024. We now project adjusted debt
to EBITDA to decrease to about 6.7x in fiscal 2024, from 7.9x in
fiscal 2023, and a further deleveraging in fiscal 2025 to roughly
5.5x. The debt deleveraging comes from a combination of EBITDA
growth and debt reduction through drawn RCF repayments.

"Cerelia's solid operating performance is supported by anticipated
volume growth and the group's ability to pass-on price increases to
offset inflation. We revised our estimate of fiscal 2024's total
revenue to about EUR860 million, from our previous forecast of
EUR830 million. We now project a 10.3% increase from fiscal 2023
based on significant volume demand, despite inflationary pressures.
This supports our assumption that Cerelia operates in favorable
categories, underpinned by high convenience value, low price point,
and exposure to private labels, which has seen a considerable
consumption uplift. We think this trend will endure, supported by
consumers' change of perception towards private label products and
accommodating price points. We therefore anticipate further growth
close to EUR960 million in fiscal 2025, bolstered by additional
volumes and rollover impact of contracts signed in fiscal 2024,
mostly in North America (i.e., cookies, crescents, and pancakes)
and in Europe for rolled dough. Moreover, we project margins to
remain stable, especially in North America as the product mix would
include more premium price products and as cross Atlantic
operations will contribute further to the group's topline.

"We see Cerelia's profitability improving to 12.0%-12.5% in fiscal
2024, from 9.4% in fiscal 2023.Cerelia's profitability improvements
are mainly attributed to higher demand across its geographies and
the ramp-up of its U.S. chilled dough operations becoming
significantly profitable since breaking even in July 2023. Support
also stems from better absorption of cost inflation on raw
materials and personnel. The group also holds some hedging
contracts in relation to its raw materials main exposure, which
provides some additional cushion against towards any raw materials
price volatility. We think Cerelia's adjusted profitability will
increase further in fiscal 2025 toward 13.0%-13.5%, thanks to
continuous high volumes demand and new contracts signed in fiscal
2024 materializing, in which its U.S. operations will contribute
mostly and enhance its product mix thanks to premium products in
North America. We also account for lower non-recurring costs of
EUR3 million-EUR5 million in fiscals 2024 and 2025. We believe
Cerelia's profitability gains derive from its large capital
expenditure (capex) investments since 2020, to modernize its
manufacturing sites and optimize its production lines, which are
materializing on its operational efficiencies and margins.

"We expect FOCF to be positive in fiscal 2024 and to grow further
to EUR30 million in fiscal 2025, despite higher capex and financing
costs. Cerelia's improving EBITDA base enables the group to post
FOCF of EUR18 million-EUR20 million in fiscal 2024, underlying
better working capital management, despite higher capex investments
about EUR42 million to support some production lines transfers,
conversion of production lines for pancakes to meet demand and an
SAP upgrade for its European dough division. We project that capex
will remain high at about EUR45 million in fiscal 2025, as the
group supports its organic growth and new contracts to be gained,
which could include additional production lines in the U.S. and
stronger productivity. Cerelia's maintenance capex has averaged 25%
of its total capex over the past few years. The group also holds
partial hedging on its term loan B, which covers both fiscals 2024
and 2025. This should mitigate the impact from higher cash interest
costs and the constraints on FOCF.

"The stable outlook reflects our view that, over the next 12
months, Cerelia's credit metrics and FOCF will continue to improve
thanks to ongoing profitable growth."

The group's operating performance should be supported by sales
growth, especially from higher volumes in North America, and S&P
Global Ratings-adjusted EBITDA margin strengthening to about 13% by
fiscal 2025 thanks to improved operating leverage and the ability
to pass on price increases in stable food categories.

S&P anticipates adjusted debt leverage to remain between 6.0x-6.5x,
adjusted funds from operations (FFO) cash interest of around 3.0x,
and positive FOCF for the next 12 months.

S&P could lower the ratings over the next 12 months if Cerelia's
debt leverage, as adjusted by S&P Global Ratings, surpasses 7x and
FOCF turns negative with no short-term prospects of a quick
turnaround. This could occur if the group's operating performance
deteriorates below S&P's base-case projections, potentially due to
a significant decrease in demand, loss of market share, or
inability to sign new contracts and fill the manufacturing
capacity. Ratings pressure could also stem from FOCF turning
negative because of an inability to control working capital
movements or due to large capex investments.

A positive rating action would require Cerelia to improve credit
metrics such that the adjusted debt-to-EBITDA ratio remains
comfortably below 5x, alongside a clear financial policy commitment
to maintain the leverage at this level. A positive rating action
would also depend on the group's ability to continuously sustain
robust FOCF.

S&P said, "Furthermore, we think rating upside could arise from
better-than-expected overall operating performance, notably thanks
to high-volume expansion in North America combined with strong
pricing power and cost control. We would also view positively a
substantial increase in the group's FOCF base with a good control
on working capital and total capex."


FNAC DARTY: Moody's Cuts CFR to Ba3 & Senior Unsecured Notes to B1
------------------------------------------------------------------
Moody's Investors Service has downgraded FNAC DARTY SA's corporate
family rating to Ba3 from Ba2 and its probability of default rating
to Ba3-PD from Ba2-PD. Concurrently, Moody's downgraded Fnac
Darty's senior unsecured ratings on the EUR300 million notes due in
May 2024 and EUR350 million notes due in May 2026 to B1 from Ba3.
The outlook on all the ratings remains stable.

RATINGS RATIONALE

The rating action reflects Fnac Darty's weak trading performance in
2023 and Moody's expectations that, given the overall weak consumer
demand, persistent inflation and soft macroeconomic outlook for
Europe, the company's earnings and margins are unlikely to improve
materially from the low point reached in 2023 over the next couple
of years. Fnac Darty faced very difficult trading conditions in
2023, with weak customer demand, notably for discretionary and
big-ticket items. While the company's sales were resilient (down
1.1% on a like-for-like basis) against the overall French consumer
electronic market (down 4% in 2023), the volume decline led to a
steep fall in earnings.

Moody's expects that consumers will continue to be cautious with
discretionary spending, including on consumer electronics, because
of persistent inflation, although softening in recent months, which
have squeezed their disposable incomes. The ongoing shipping
disruptions in the Red Sea also pose growing risks of product
delivery timeliness and higher costs because of longer routes,
especially if tensions persist in the second half of the year, as
Fnac Darty will prepare for the key Black Friday and Christmas
periods.

The decline in volume combined with the company's high operating
leverage translated into a 25% fall in operating income (as
adjusted by the company) in 2023, reflecting cost inflation,
notably in energy, rents and payroll costs. Moody's estimates the
company's leverage (Moody's-adjusted gross debt to EBITDA) rose to
around 4.4x at year-end 2023, from 4.1x in 2022. Similarly, the
company's interest cover (Moody's-adjusted EBITDA-capex to Interest
expense) declined to 2.1x in 2023, from 3.2x in 2022, a very weak
level compared to other rated specialty retailers and much weaker
than for Ba-rated issuers, also in view of the elevated interest
rate environment.

Despite a difficult operating environment, Moody's expects Fnac
Darty's earnings to slightly recover in 2024, as the company's
strives to mitigate low volume and cost inflation through
performance plans, energy consumption reduction and the development
of services. However, Moody's believes the company will struggle to
regain its historical operating income margin levels of above 3% in
the next two years, given the soft macroeconomic prospects. The
continued development of services, marketplaces and retail media
will support profitability in the long-run, but they need scale
before they can meaningfully contribute to margin expansion.

More positively, the rating reflects the company's ability to
generate positive free cash flows (FCF), despite its low operating
margins, aided by working capital inflows, lower taxes paid and
contained capital investments. Moody's estimates that Fnac Darty's
FCF (as-adjusted by Moody's) amounted to around EUR115 million in
2023, compared to a cash burn of EUR116 million in 2022.

The Ba3 CFR reflects the company's (i) leading market positions in
the French consumer electronics, white goods and editorial products
retail markets, (ii) its historically good operational execution
and successful multichannel strategy, (iii) good liquidity and
track record of positive free cash flow (FCF), and (iv) its history
of balanced dividend policy.

The CFR is constrained by the company's (i) structurally low
profitability, reflecting increased online sales, the competitive
and discretionary nature of the consumer electronics market and
high cost inflation, (ii) its exposure to high inflation and
uncertain economic prospects in Europe, which is likely to
constrain sales and margin improvement in the next 12-18 months,
(iii) its limited geographical diversification, with most of its
revenue derived from France, and (iv) the high seasonality of its
operations, which requires the maintenance of a large liquidity
buffer.

LIQUIDITY

Moody's considers Fnac Darty' liquidity to be good, supported by
EUR1.1 million of cash on balance sheet as of December 31, 2023
(which Moody's expects to be partially used to fund working capital
swings throughout the year) and full availability under its EUR500
million revolving credit facility (RCF), which matures in March
2028. Moody's expects the company's will refinance its bonds due in
May 2024 and May 2026 in a timely manner. In the meantime, Fnac
Darty benefits from a EUR300 million delayed drawn term loan, which
can be used to refinance its EUR300 million bond due May 2024. The
facility can be drawn only once and solely to repay the bond
maturing in 2024. The credit line has a maturity of three years, in
case of a drawdown, which can be extended by two years.

Fnac Darty needs a large liquidity buffer because of the high
seasonality of its activities. The company's operations are
characterised by large working capital requirements ahead of the
peak periods of Christmas and New Year.

STRUCTURAL CONSIDERATIONS

Fnac Darty's senior unsecured notes rating of B1, one-notch below
the CFR, reflects their pari passu position in the capital
structure with the EUR500 million syndicated RCF, the EUR85 million
EIB loan and a EUR200 million convertible bond. Because there are
no upstream guarantees from Fnac Darty's operating subsidiaries,
Moody's ranks the company's non-financial liabilities at the top of
the debt waterfall, including sizeable trade payables (EUR2.1
billion at end-December 2023, although given the company's
seasonality trade payables can be lower during the rest of the
year), short-term lease commitments and pension liabilities.

The PDR of Ba3-PD reflects the assumption of a 50% family recovery
rate, reflecting a capital structure comprising senior secured
bonds and bank debt.

RATIONALE FOR STABLE OUTLOOK

The stable outlook reflects Moody's view that Fnac Darty's credit
metrics will not deteriorate further from the current low point and
will gradually improve in the next 12-18 months. While persistent
inflation and uncertain economic prospects will likely constrain
earnings and margins in the next 12-18 months, Moody's expect the
company to continue to generate positive FCF.

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

A positive pressure on the ratings could built up over time if Fnac
Darty demonstrates a sustainable improvement in Moody's-adjusted
EBIT margin to above 3.0%, to provide the company sufficient buffer
against external pressures and higher funding cost, its gross
debt/EBITDA ratio approaches 3.5x and its Moody's-adjusted
(EBITDA-Capex)/Interest Expense rises towards 3.5x. A positive
rating action would also require a material improvement to the
current FCF generation profile and the maintenance of a prudent
financial policy.

Conversely, Moody's could downgrade Fnac Darty if its (gross)
debt/EBITDA ratio remains sustainably at or above 4.5x or if its
Moody's-adjusted (EBITDA-Capex)/Interest Expense ratio remains
below 2.5x. Deteriorating liquidity, a more aggressive financial
policy or weaker FCF could also trigger a rating downgrade.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Retail and
Apparel published in November 2023.

PROFILE

Fnac Darty is a French retailer of cultural, leisure and
technological products. The company has a diversified product mix
across consumer electronics (TV, video, audio and camera devices,
and phones), domestic appliances, editorial products (books, audio,
video, gaming and toys), and other products and services
(after-sales, insurance, ticketing and gift cards). In 2023 the
company reported revenues of EUR7.8 billion and EBITDA of EUR33
million.

Fnac Darty is listed on the Paris Stock Exchange and had a market
capitalisation of around EUR765 million as of March 01, 2023. As at
December 31, 2023, the largest shareholders were Vesa Equity
Investment, an investment vehicle controlled by Daniel Kretinsky,
with 29.9% of the capital, followed by CECONOMY AG with 23.4% and
GLAS SAS with 10.9%.


PICARD BONDCO: Moody's Affirms 'B3' CFR, Outlook Remains Stable
---------------------------------------------------------------
Moody's Investors Service affirmed the B3 corporate family rating
and the B2-PD probability of default rating of Picard Bondco S.A.'s
(Picard). Concurrently, Moody's affirmed the Caa1 rating to Picard
Bondco S.A.'s EUR310 million backed senior unsecured notes due
2027, the B3 rating to Picard Groupe S.A.S.'s EUR750 million backed
senior secured fixed rate notes and the B3 rating to Lion / Polaris
Lux 4 S.A.'s EUR650 million backed senior secured floating rate
notes, both due 2026.The outlook remains stable for all entities.

RATINGS RATIONALE

The affirmation reflects that Picard's credit metrics remain
consistent with the thresholds for the B3 rating. For the year
ending March 2024 (fiscal 2024), Moody's-adjusted (gross) Debt /
EBITDA is expected to peak at 7.4x with Moody's-adjusted EBITDA at
around EUR290 million, slightly below fiscal 2023, reflecting 4%
sales growth and EUR20 million increase in electricity costs
compared to fiscal 2023. The higher electricity costs are due to
the higher electricity prices which were locked in a year ago and
have since come down significantly. Moody's expects leverage to
reduce towards 7.0x in the next 12 months mainly reflecting the
reduction in electricity costs as well as low to mid-single digit
sales growth.

The affirmation also reflects that the company continues to
generate positive free cash flow (FCF), expected to be EUR 50
million in fiscal 2023, and has accumulated a sizeable cash balance
of EUR219 million as of September 2023. Moody's expects Picard's
good liquidity and ongoing FCF generation to support the
refinancing of its debt within the next 12 months, well in advance
of its maturities.
The B3 CFR continues to reflects Picard's track record of stable
operating performance; its strong brand image and leading position
in the French frozen food market; its ability to constantly update
its product offering, with about 200 products launched every year;
and its good liquidity, supported by positive FCF.

However, Picard's CFR is constrained by its high leverage, with its
Moody's-adjusted (gross) Debt / EBITDA at 7.3x for the 12 months
that ended September 30, 2023; its shareholder-friendly financial
policy with a track record of raising debt to pay dividends; its
limited long-term growth prospects in the mature French frozen food
market; and the geographical concentration of the company's sales
in France, with limited contribution from international markets.

LIQUIDITY

Picard has good liquidity, with EUR219 million of cash as of
September 30, 2023 and access to an undrawn revolving credit
facility of EUR60 million expiring in 2026.

The company continues to generate positive FCF and Moody's
forecasts Moody's-adjusted FCF of about EUR 50 million in fiscal
2024. Because of the higher interest rate environment, Moody's
expects the company to adopt more conservative financial policies
than in recent years, possibly using some of its cash to repay
debt.

There are significant swings in working capital during the year,
with outflows in the first and second quarters of the fiscal year
(March-September), a large inflow of about EUR80 million to EUR90
million in the third quarter (September-December), followed by a
sizeable outflow in the fourth quarter (January-March). However,
Picard's cash position is sufficiently large to cover these
variations.

OUTLOOK

The stable rating outlook reflects Moody's expectation that the
company will continue to generate positive Moody's-adjusted FCF;
maintain a cautious approach towards cost control and store
expansion, both in France and internationally; and preserve good
liquidity. The stable outlook also reflects Moody's expectation
that Picard will refinance its debt well in advance of the
maturities, within the next 12 months.

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

Moody's could upgrade Picard's rating if it significantly increases
its EBITDA or reduces its gross debt, such that its
Moody's-adjusted (gross) Debt / EBITDA declines significantly below
6.5x. A positive rating action would also require the company to
maintain good liquidity, positive Moody's-adjusted FCF and
Moody's-adjusted (EBITDA - Capex) / Interest Expense above 1.5x. An
upgrade would also be contingent upon the successful refinancing of
the current capital structure.

Moody's could downgrade Picard's rating if its earnings decline,
resulting in Moody's-adjusted (gross) Debt / EBITDA exceeding 7.5x
or Moody's-adjusted (EBITDA - capex) / Interest Expense below 1.0x.
A weakening of Moody's-adjusted FCF or a deterioration in liquidity
could also trigger a negative rating action. Further, Moody's could
downgrade Picard's rating if it pays another significant dividend
to its shareholders or makes a large debt-financed acquisition,
reflecting a more aggressive financial policy than is currently
factored into the rating.

STRUCTURAL CONSIDERATION

Picard's EUR750 million senior secured fixed-rate notes and EUR650
million senior secured floating-rate notes are rated B3, at the
same level as its CFR, because of the limited amount of more senior
and subordinated debt in the overall debt structure. These
instruments are guaranteed by substantial subsidiaries and secured
by shares, significant intercompany receivables and substantial
bank accounts of these subsidiaries. However, there are limitations
on the amounts that the operating subsidiaries can guarantee.

The company's EUR310 million senior unsecured notes are rated Caa1,
one notch below the B3 CFR, reflecting their subordination to the
senior secured notes. These notes are not guaranteed by operating
companies with significant EBITDA.

Moody's Loss Given Default analysis is based on an expected family
recovery rate of 35%, reflecting Picard's covenant-lite bank debt
and the rather weak security package of the secured notes. As a
result, the probability of default rating is a notch higher than
the CFR at B2-PD.

PRINCIPAL METHODOLOGY

The principal methodology used in these ratings was Retail and
Apparel published in November 2023.

COMPANY PROFILE

Picard Bondco S.A. is a leading specialist retailer of
private-label frozen foods in France and it generated EUR1.8
billion revenue in the 12 months that ended September 30, 2023 LTM.
The company operates a network of 1,129 stores in France (including
73 franchised stores), 15 stores in Belgium, six franchised stores
in Scandinavia, one store in Luxembourg and 12 franchised stores in
Japan. Most of the company's stores are located in or near city
centres and metropolitan areas.

Picard has been owned since 2010 by funds managed or advised by
private equity firm Lion Capital LLP. In 2015 Lion Capital sold a
stake of 49% to Aryzta AG, a Switzerland-based group specialised in
frozen bakery products. In January 2020, Aryzta sold most of its
stake to Invest Group Zouari (IGZ), a French retail investment
firm, which now owns 45% of the company.




=============
I R E L A N D
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AQUEDUCT EUROPEAN 2-2017: Moody's Affirms B1 Rating on Cl. F Notes
------------------------------------------------------------------
Moody's Investors Service has upgraded the ratings on the following
notes issued by Aqueduct European CLO 2-2017 Designated Activity
Company:

EUR21,200,000 Class C Senior Secured Deferrable Floating Rate
Notes due 2030, Upgraded to Aaa (sf); previously on Aug 9, 2023
Upgraded to Aa1 (sf)

EUR22,000,000 Class D Senior Secured Deferrable Floating Rate
Notes due 2030, Upgraded to Aa3 (sf); previously on Aug 9, 2023
Upgraded to A2 (sf)

EUR24,000,000 Class E Senior Secured Deferrable Floating Rate
Notes due 2030, Upgraded to Baa3 (sf); previously on Aug 9, 2023
Upgraded to Ba1 (sf)

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

EUR234,000,000 (Current outstanding amount EUR60,102,150) Class A
Senior Secured Floating Rate Notes due 2030, Affirmed Aaa (sf);
previously on Aug 9, 2023 Affirmed Aaa (sf)

EUR37,800,000 Class B-1 Senior Secured Floating Rate Notes due
2030, Affirmed Aaa (sf); previously on Aug 9, 2023 Affirmed Aaa
(sf)

EUR20,000,000 Class B-2 Senior Secured Fixed Rate Notes due 2030,
Affirmed Aaa (sf); previously on Aug 9, 2023 Affirmed Aaa (sf)

EUR12,000,000 Class F Senior Secured Deferrable Floating Rate
Notes due 2030, Affirmed B1 (sf); previously on Aug 9, 2023
Affirmed B1 (sf)

Aqueduct European CLO 2-2017 Designated Activity Company, issued in
December 2017, is a collateralised loan obligation (CLO) backed by
a portfolio of mostly high-yield senior secured European loans. The
portfolio is managed by HPS Investment Partners CLO (UK) LLP. The
transaction's reinvestment period ended in January 2022.

RATINGS RATIONALE

The rating upgrades on the Class C, D and E notes are primarily a
result of the significant deleveraging of the Class A notes
following amortisation of the underlying portfolio since the last
rating action in August 2023.

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

The Class A notes have paid down by approximately EUR103.8 million
(44.4%) since the last rating action in August 2023 and EUR173.9
million 74.3% since closing. As a result of the deleveraging,
over-collateralisation (OC) has increased across the capital
structure. According to the trustee report dated January 2024 [1]
the Class A/B, Class C, Class D, Class E and Class F OC ratios are
reported at 162.53%, 143.15%, 127.40%, 113.74% and 107.95% compared
to July 2023 [2] levels of 147.60%, 134.21%, 122.67%, 112.15% and
107.53%, respectively. Moody's notes that the January 2024
principal payments are not reflected in the reported OC ratios.

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

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

Performing par and principal proceeds balance: EUR214,184,246.46

Defaulted Securities: EUR3,701,376.95

Diversity Score: 38

Weighted Average Rating Factor (WARF): 2887

Weighted Average Life (WAL): 3.04 years

Weighted Average Spread (WAS) (before accounting for Euribor
floors): 3.47%

Weighted Average Coupon (WAC): 5.88%

Weighted Average Recovery Rate (WARR): 45.29%

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

Methodology Underlying the Rating Action:

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

Counterparty Exposure:

The rating action took into consideration the notes' exposure to
relevant counterparties, such as account bank, using the
methodology "Moody's Approach to Assessing Counterparty Risks in
Structured Finance methodology" published in October 2023. Moody's
concluded the ratings of the notes are not constrained by these
risks.

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

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

Additional uncertainty about performance is due to the following

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

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

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




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

DEDALUS SPA: Moody's Affirms 'B3' CFR, Outlook Remains Negative
---------------------------------------------------------------
Moody's Investors Service affirmed Dedalus S.p.A.'s (Dedalus) B3
long term corporate family rating and B3-PD probability of default
rating. Concurrently, Moody's affirmed the B3 the instrument
ratings on the EUR1,225 million senior secured term loan B (term
loan) due 2027 and the EUR165 million senior secured revolving
credit facility (RCF) due 2026 both issued by Dedalus Finance GmbH.
The outlook on both entities remains negative.

RATINGS RATIONALE

The rating action reflects:

-- Dedalus' recently improved operational performance, evidenced
by a 10% year-on-year increase in revenue and an 8% year-on-year
rise in EBITDA (as adjusted by the company, preliminary) for the
full year of 2023. The company also demonstrated progress in
resolving operational issues stemming from the implementation of
its enterprise resource planning (ERP) software, as indicated by
improved cash collections in Q4 2023. This performance, together
with recent term loan add ons, utilized to repay drawings under the
RCF, bolstered Dedalus' liquidity. Moody's anticipates that Dedalus
will maintain adequate liquidity, further reinforced by the absence
of imminent refinancing requirements, given the RCF maturity date
in November 2026 and term loan due in May 2027.

-- Dedalus' still weak Free Cash Flow (FCF) generation (post
exceptional items and interest paid) and execution risks with
regard to return to positive FCF, given Dedalus highly levered
capital structure and exposure to negative impact of interest-rate
rises. Despite operational improvements in 2023, Dedalus' annual
FCF is forecast to be around EUR10 million negative in 2023. The
shift to positive FCF generation hinges on the company's success in
boosting profitability, speeding up cash collections, and
curtailing extraordinary items. The company expects these
initiatives will counterbalance the anticipated rise in interest
burden (with interest paid projected to increase to around EUR100
million in 2024 from around EUR70 million in 2023).

-- Moody's forecast that Dedalus' revenues will organically grow
in the mid-single-digit percentages over 2024 and 2025, a
reflection of the ongoing emphasis on annual recurring revenue
growth and a robust project order backlog. Nevertheless, the
anticipated profitability enhancements come with execution risks.
The new management team has recently initiated several key
strategic measures to restore the company's profitability and
improve cash flow generation. Yet, managing a restructuring
program, reorganizing the company's structure, and continuing to
stabilize the ERP system and enhance cash collections, all pose
execution risks.

Dedalus' (1) leading market position with a highly stable customer
base in the healthcare segment and a high share of recurring
revenues, (2) the currently ongoing market push by regulation and
shift towards technology, (3) a growing but generally saturated and
competitive market environment with moderate organic growth
potential of around 4-5%, and (4) the recent strategy review,
including a pause in acquisitive strategy and focus on higher
governance and control structures, after the consortium led by
PE-sponsor Ardian increased its equity stake in the company by 19%
to 92% and appointed a new CEO in October 2023, all support the B3
CFR.

Nevertheless, the company's (1) high leverage, Moody's-adjusted
debt/EBITDA after capitalization of software development costs of
around 7x in 2023 (10x if capitalized R&D are expensed and 11x
including the PIK note outside of the restricted group), (2) its
profitability, as measured by cash EBITDA margin (after expensing
capitalized R&D and leases) of around 15% in 2023, which lags the
peer group in the software sector, reflective of limited ability to
increase prices with public customers and high R&D spending, driven
by complexity of software and regulation, (3) weak interest
coverage, as measured by Moody's adjusted (EBITDA-Capex) /Interest,
which despite expected operational improvements, is forecast to be
around 1.0x in 2024 and gradually improving towards 1.5x in 2025,
and (4) high extraordinary items (averaging EUR40 – 60 million in
2021-2023) that weighed on cash flow. From 2024 onwards, Moody's
will not add back exceptional items in Moody's adjusted EBITDA
calculation. However, a reduction to around EUR20 million is
anticipated from 2024 onwards as acquisition-related items
decrease.

OUTLOOK

The negative outlook reflects the weak positioning of the company
in the current rating category, with still negative FCF generation
and execution risks with regard to operational improvements
necessary to achieve sustainably positive FCF given the high
interest burden.

The stabilization of the outlook would require improvement in
operating performance, such that FCF turns sustainably positive,
(EBITDA-Capex)/ Interest improves to above 1.25x and liquidity
remains adequate, including expectations for the company to address
debt maturities of RCF and TLB well in advance (at least 12 months
in advance).

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

Dedalus' ratings could be upgraded with Moody's-adjusted
debt/EBITDA sustainably below 6.0x; Moody's-adjusted FCF/debt
sustainably above 5%; and the company maintains a prudent financial
policy without any shareholder distributions or debt-funded
acquisitions.

Downward pressure on Dedalus' ratings would build, if (1) the
company's liquidity weakens, or (2) Moody's adjusted debt/EBITDA is
above 7.5x or (3) FCF remains negative, or (4) Moody's expectation
for (EBITDA-capex) / Interest sustainably below 1.25x.

LIQUIDITY

Dedalus has adequate liquidity. Liquidity sources consist of EUR59
million cash on balance sheet as of the end of November 2023 and
EUR78 million of availability under its EUR165 million RCF, and
Moody's expectation of at least break-even FCF generation in the
next 12-18 months. The RCF matures in November 2026, and entails
one springing financial covenant at the defined net leverage level,
only tested when the facility is drawn by more than 40%. We expect
sufficient headroom under the covenant test level.

Dedalus uses factoring programmes to support its liquidity (around
EUR60 million drawn out of EUR80 million as of December 2023).
These factoring facilities have short maturities of up to 18 months
and can lead to liquidity needs for the company if not extended.

The company does not have near-term refinancing needs, with the RCF
maturing in November 2026 and the term loan maturing in May 2027.
Its PIK notes outside of restricted group mature in 2028, and would
add approximately 1x of leverage.

STRUCTURAL CONSIDERATIONS

The RCF ranks pari passu to the senior secured term loan B, hence
both instruments are rated B3 in line with the CFR.

PRINCIPAL METHODOLOGY

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

COMPANY PROFILE

Dedalus S.p.A. (Dedalus), which is based in Italy, provides
healthcare software solutions used in hospitals and laboratories,
and by general practitioners. In December 2019, Dedalus acquired
Aceso, a carve-out of the healthcare software business of
Agfa-Gevaert, to become a leading company in the main markets of
the DACH region, Italy and France. In July 2020, Dedalus acquired
the healthcare software solution business from DXC Technology,
expanding its operations into the UK, Finland, Australia, New
Zealand and several other markets.

The company's self-developed software suite includes an electronic
medical record and diagnostic information system for radiologists,
laboratories, anatomical pathologists and general practitioners.
The group is owned and controlled by a consortium led by Ardian
with ADIA as minority shareholder. In October 2023, a consortium
led by Ardian agreed to acquire an additional 19% stake in Dedalus
from the founder, increasing its stake to 92%. In 2023, Dedalus
expects to generate revenue of EUR887 million and company-adjusted
EBITDA of EUR208 million.




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

SANI/IKOS GROUP: Moody's Alters Outlook on 'B3' CFR to Stable
-------------------------------------------------------------
Moody's Investors Service has affirmed the B3 corporate family
rating and the Caa1-PD probability of default rating of Sani/Ikos
Group NewCo S.C.A. (Sani/Ikos or the company). Simultaneously,
Moody's affirmed the Caa2 instrument rating of the EUR300 million
backed senior secured bond guaranteed by the company and issued by
Sani/Ikos Financial Holdings 1 S.a r.l. The outlook on both
entities has been changed to stable from negative.

"The rating affirmation of Sani/Ikos's CFR reflects a
stronger-than-anticipated operating performance, resulting in
quicker than forecasted deleveraging, with a debt/EBITDA ratio
projected to be at around 10x by the end of 2023. The stable
outlook reflects Moody's expectation that Sani/Ikos will continue
to generate operational performance improvements, bolstered by new
openings and robust market fundamentals for luxury resorts in the
Mediterranean"  says Elise Savoye CFA, a Moody's Vice
President-Senior Analyst and lead analyst for Sani/Ikos. "As such,
Moody's anticipate leverage to be steady at around 10x over the
forthcoming 12 to 18 months with operating performance improvements
counterbalancing the impact of debt-funded growth on leverage and
coverage metrics. The stable outlook also reflects Moody's
expectation that refinancing needs will be addressed proactively
and the absence of large shareholder payouts, supporting the
preservation of an adequate liquidity " Mrs. Savoye continues.

RATINGS RATIONALE

The affirmation of Sani/Ikos ratings reflects Moody's expectation
of continued gradual operating performance improvements. Over 2023,
the company posted stronger than anticipated revenue and EBITDA,
mostly driven by strong pricing (with an average daily room rate
(ADR) of EUR652 up 15% from 2022) which more than compensated cost
inflation. Strong bookings year to date (+6.5% more than last year
at the same period) with stronger than last year ADR, suggests a
robust budget execution for 2024. We expect that leverage will
remain around 10x over the next 12 to 18 months but improve over
the medium term, once debt-funded expansion projects will result in
additional performance contributions.

Liquidity is adequate supported by positive and growing Moody's
adjusted cash-flow from operation (EUR94 million as of year-end
2023) while negative Moody's adjusted Free-Cash-Flow (EUR226
million in 2023) is mostly due to large capital expenditure.

RATIONALE FOR THE STABLE OUTLOOK

The stable outlooks reflects Moody's expectation that the leverage
will remain around 10x over the next 12 to 18 months. This high but
steady leverage is derived from the company's high tolerance for
debt and significant debt-funded growth which will be mitigated by
the expectation of a continued robust performance driven by
positive luxury resort fundamentals. The stable outlook also
assumes the absence of aggressive shareholder distributions and the
preservation of an adequate liquidity profile.

STRUCTURAL CONSIDERATIONS

The backed senior secured bond is structurally subordinated to
indebtedness of the subsidiaries, and subordinated to all debt
secured by property and partially corporate guarantees. We expect
further encumbrance of operating assets as Sani/Ikos progresses on
its growth plan; if the company were to retain assets unencumbered,
subordination would reduce, a positive.

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

Factors that could lead to an upgrade

-- Leverage reduction with operating cash flow and a supportive
financial policy to achieve Debt/EBITDA sustainably towards 7x

-- Interest cover improving towards 2x

-- Limited distribution to the shareholders supporting an adequate
liquidity

Factors that could lead to a downgrade

-- Failure to secure funding for its committed capital spending
and/or excessive development exposure

-- A significantly weaker liquidity profile with on-going cash
burn before capital expenditure and/or poor execution of company's
budget

-- Significant distribution to the shareholders

-- Debt/EBITDA sustainably above 11x

-- Sani/Ikos' operating margin falls below 20% on a sustained
basis

PRINCIPAL METHODOLOGY

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

COMPANY PROFILE

Sani/Ikos runs 3,460 rooms and suites in 12 luxury hotels in Greece
and Spain under the Sani and Ikos brands. Sani resort is a
fully-integrated resort in a single location while the Ikos concept
of the group consist of luxury all-inclusive hotels in different
locations. The company currently works towards opening one
additional hotel in Spain, one in Portugal and one in Greece. The
hotels typically operates through an extended 7-month season. In
2023, the group generated EUR412.5 million in revenues.




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

HURTIGRUTEN NEWCO: Moody's Assigns 'Caa2' CFR, Outlook Stable
-------------------------------------------------------------
Moody's Investors Service has assigned a Caa2 corporate family
rating and a Caa2-PD probability of default rating to Hurtigruten
NewCo AS (Hurtigruten or the company), along with a Ca rating to
EUR667.58 million of backed senior unsecured term loan (holdco
facility) due February 2029 borrowed by the company. The outlook
assigned is stable.

Concurrently, Moody's has assigned a B1 rating to EUR205 million
guaranteed super senior secured term loan A due June 2027 and a
Caa1 rating to EUR345 million guaranteed senior secured term loan B
due September 2027 borrowed by Hurtigruten's immediate subsidiary
Hurtigruten Group AS. Finally, Moody's also upgraded to B3 from
Caa1 the rating of EUR300 million backed senior secured notes due
February 2025 issued by Hurtigruten's indirect subsidiary Explorer
II AS. The outlook of Hurtigruten Group AS and of Explorer II AS
has changed to stable from negative.

This follows Hurtigruten's completion of a nearly comprehensive
restructuring of its capital structure on February 23, 2024[1]. As
Hurtigruten is the entity at the top of the new restricted group,
Moody's has withdrawn the Caa2 CFR, the Ca-PD PDR and the Caa3
backed senior secured bank credit facilities of Hurtigruten Group
AS.

RATINGS RATIONALE

Hurtigruten's Caa2 CFR reflects (i) the uncertainty around the pace
of sustained recovery in the company's earnings and cash flow
generation, (ii) execution risks associated with ongoing strategic
initiatives, including the separation of the Norwegian cruise
business (HRN) from the expeditions cruise segment (HX), (iii)
substantial upcoming bond maturities in February 2025 still to be
addressed and (iv) high collateral value relative to the current
quantum of outstanding debt.

The recently-executed restructuring provides modest relief to the
company's liquidity via an overall extended debt maturity profile,
reduced cash interest payments and the injection of EUR70 million
of net incremental cash after the payment of all transaction
related fees. Moody's however expects Hurtigruten's earnings to
remain well below pre-pandemic levels through 2024, given the
weaker than expected booking backdrop and contribution from
loss-making HX operations, despite ongoing initiatives to turn
around profitability. As a result, Hurtigruten's credit metrics
will remain very weak in the next 12-18 months, starting from a
very high gross leverage (Moody's-adjusted) at year-end 2023,
interest cover (measured as Moody's-adjusted EBITA/interest
expense) of -0.4x and heavily negative free cash flow generation
(FCF, Moody's-adjusted) of - EUR170 million for 2023.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS

Hurtigruten's Credit Impact Score of 5 indicates that the rating is
lower than it would have been if ESG risk exposures did not exist
and that the negative impact is more pronounced than for issuers
scored CIS-4. The CIS primarily reflects governance considerations:
Hurtigruten has resorted to aggressive financial policies,
including tolerance for high leverage and tight liquidity
exacerbated by persisting underperformance. While providing some
relief to the company's liquidity, the recent nearly comprehensive
restructuring transaction led to a limited default under Moody's
definition. Exposure to both environmental and social risks is
relatively less material to Hurtigruten's credit quality and is
consistent with other cruise companies.

LIQUIDITY

Hurtigruten's liquidity remains weak despite the extended debt
maturity profile, the reduced cash interest payments and the
injection of EUR70 million of net new liquidity (after the payment
of all transaction related fees) as part of the recent debt
restructuring. Absent a significant improvement in the underlying
operating performance, Hurtigruten will continue to generate
negative FCF in the next 12-18 months whilst maintaining a modest
cash position. Moody's assessment also considers the company's lack
of sizeable sources of committed external liquidity, as well as the
need to address the refinancing of the senior secured notes
maturing in February 2025.

STRUCTURAL CONSIDERATIONS

Moody's rates Hurtigruten's:

-- EUR205 million super senior facility due June 30, 2027 borrowed
by Hurtigruten Group AS. The B1 rating assigned to this facility is
four notches above Hurtigruten's CFR of Caa2. This reflects the
facility's super senior position in the capital structure and
priority claim over significant collateral value, leading to a low
loan-to-value (LTV).

-- EUR300 million senior secured notes due 2025 issued by
Hurtigruten's indirect subsidiary Explorer II AS. The B3 instrument
rating is two notches above the CFR of Caa2. This reflects security
over vessels bearing a high collateral value relative to the amount
outstanding under the bond (EUR270 million). The senior secured
notes also benefit from a guarantee provided by Hurtigruten Group
AS. This supports Moody's expectation of recoveries to creditors
commensurate with a B3 rating.

-- EUR345 million senior secured facility due September 30, 2027
reinstated at Hurtigruten Group AS's level. The Caa1 rating
assigned to this facility reflects the second ranking over the same
collateral as provided to the super senior facility, leading to a
higher LTV than for the senior secured notes.

-- EUR667.58 million holdco facility due February 2029 reinstated
at Hurtigruten's level. The Ca rating assigned to this facility is
two notches below Hurtigruten's CFR. This reflect the subordinated
ranking of the facility and the limited collateral coverage.

OUTLOOK

The stable outlook reflects the modest improvement in Hurtigruten's
liquidity position and reduced risk of a default following the
execution of a nearly comprehensive restructuring transaction. The
stable outlook also incorporates Moody's expectation of a
successful refinancing of the senior secured notes due February
2025 in the course of 2024.

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

The ratings could be upgraded if Hurtigruten's operating
performance improves so as to:

-- support stronger profitability levels

-- reduce the company's negative FCF generation to help address
the sustainability of the capital structure, and

-- further strengthen the liquidity position

A rating upgrade also requires Hurtigruten to successfully address
the refinancing of its senior secured notes due February 2025.

Conversely, the ratings could be downgraded if:

-- Hurtigruten's liquidity position, operating performance or
ability to service its debt deteriorates, or

-- Moody's sees a rising risk of a default with losses to
debtholders.

PRINCIPAL METHODOLOGY

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

COMPANY PROFILE

Hurtigruten is a Norwegian cruise ship operator that offers cruises
along the Norwegian coast, expedition cruises and land-based Arctic
experience tourism in Svalbard. In the first nine months of 2023,
Hurtigruten reported revenue of EUR512 million (2022: EUR441
million) and company-defined adjusted EBITDA of EUR58 million
(2022: EUR46 million).




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

DEEP BEAT: Bought Out of Administration by LCR Operations
---------------------------------------------------------
Business Sale reports that Deep Beat Entertainment Limited, a
company that operates cafes at UK heritage sites and National
Parks, has been rescued from administration.

The company fell into administration in the face of mounting
headwinds, with Howard Smith and Will Wright of Interpath Advisory
appointed as joint administrators,
Business Sale relates.

According to Business Sale, the company had struggled after revenue
was severely impacted by COVID-19 lockdowns, with these financial
pressures more recently exacerbated by high-cost inflation, in
particular the rising costs of food, drink and labour, which
hampered its ability to service its debts.

In Deep Beat Entertainment Limited's financial accounts for the
year to October 31, 2022, its fixed assets were valued at GBP1.97
million and current assets at slightly over GBP1 million, Business
Sale discloses.  At the time, however, its net liabilities amounted
to just under GBP220,000, Business Sale notes.

The firm's management team sought to undertake a review of possible
sale or investment options, but a solvent solution could not be
found, leading to the decision to appoint administrators, Business
Sale states.

Upon their appointment, the joint administrators immediately
concluded a sale of the majority of the business and assets to LCR
Operations Limited, a connected party by way of the shareholder and
director, according to Business Sale.  The deal will see all venues
continuing to trade, with 121 staff members transferring to the
buyer, Business Sale states.

Following the sale, the joint administrators are now sole
shareholder of Park Life Resorts Limited, a Devon holiday resort
with several short and long-stay woodland lodges,
Business Sale notes.  The joint administrators are now seeking a
buyer for this shareholding, Business Sale relays.


GREENSHIRES GROUP: Goes Into Administration, Owes GBP1.3 Million
----------------------------------------------------------------
Business Sale reports that Greenshires Group Limited, a printing
and packaging firm based in Leicester, has fallen into
administration amid mounting distress in the printing sector.

The company, which can trace its roots back to 1963, has appointed
John Lowe and Nathan Jones of FRP Advisory as joint administrators,
Business Sale relates.

In its accounts for the year ending March 31, 2023, the company's
fixed assets were valued at slightly over GBP2 million and current
assets at around GBP1.9 million, Business Sale discloses.  At the
time, its net liabilities stood at GBP55,778, Business Sale notes.


HEIGHTVALE LIMITED: Collapses Into Administration
-------------------------------------------------
Business Sale reports that Heightvale Limited, a building
restorations firm based in Lancashire, fell into administration in
February, appointing Kroll Advisory's Steven Muncaster and Michael
Lennon as joint administrators.

In its accounts to June 30, 2022, the company's total assets were
valued at around GBP5 million, with total equity standing at GBP1.6
million, Business Sale discloses.


JANKEL ARMOURING: Falls Into Administration
-------------------------------------------
Business Sale reports that Jankel Armouring Limited, a specialist
in protection systems for armoured and tactical vehicles, fell into
administration in late February, with Michael Denny and Mark Firmin
of Alvarez & Marshal appointed as joint administrators.

In the company's accounts for the year ending September 30, 2022,
it reported that the impact of the war in Ukraine had hampered its
recovery from the COVID-19 pandemic, with the company also affected
by cost-of-living increases, high UK borrowing rates, inflation,
high material costs and labour shortages, Business Sale relates.  

Its revenue at the time stood at GBP19.7 million, down by more than
half from GBP43 million a year earlier, while it fell from a profit
of GBP1.6 million to a loss of close to GBP2.7 million, Business
Sale discloses.  At the time, its total equity stood at GBP13.7
million, Business Sale states.


LIBERTY GLOBAL: Moody's Alters Outlook on 'Ba3' CFR to Negative
---------------------------------------------------------------
Moody's Investors Service has affirmed Liberty Global plc's Ba3
corporate family rating and Ba3-PD probability of default rating.
The outlook has been changed to negative from stable.

RATINGS RATIONALE

The negative rating action is prompted by Moody's expectation of
softer than previously expected operating performance in some of
the company's geographies, namely UK and Belgium, as well as
sustainably high leverage and net leverage levels. Moody's also
notes the recent announcement around the potential spin-off of UPC
Holding B.V. (Sunrise, B1 stable) to Liberty Global's shareholders
and the payment of up to USD1.7 billion of Sunrise's debt ahead of
a potential listing. Funding for the proposed debt repayment will
come from corporate cash (

THAMES WATER: Seeks to Avoid Potential Taxpayer Bailout
-------------------------------------------------------
Gill Plimmer and Jim Pickard at The Financial Times report that
Thames Water is lobbying the government and industry regulator
Ofwat to let it increase bills, pay dividends and face lower fines
as it seeks to avoid a potential multibillion-pound taxpayer
bailout.

Britain's largest water monopoly is trying to avoid being taken
over under the government's special administration regime, which
could leave taxpayers on the hook and undermine confidence in the
privatised water industry, the FT notes.

The government recently updated water insolvency legislation, a
move seen by industry experts as an indication that a collapse
could be imminent, the FT relays.

Officials at the Department for the Environment, Food and Rural
Affairs have made contingency plans for Thames Water's failure and
dubbed them "Project Timber" because the collapse of the company,
which supplies water and sewage services to about 25% of England's
population, would have far-reaching consequences, the FT recounts.

Ministers hope that Ofwat will allow "regulatory easements", such
as reduced fines, that could reduce the financial pressure on the
company, the FT relates.  "The collapse of Thames is the last thing
we want," said one senior government figure.

According to the FT, a crucial first test of Ofwat's stance will
come within weeks when the regulator decides whether to fine Thames
for paying a GBP37.5 million dividend to Kemble last October.

Kemble, which was set up to raise finance for Thames Water, needs
the dividends to service its debt but new rules introduced last
year forbid water utilities with poor financial records from making
payouts, the FT states.

Although Thames Water insists that investors will not take any cash
out of the business until a turnaround is delivered, Ofwat makes no
distinction between external and internal dividends, according to
the FT.

Ruling out the dividends could ultimately trigger an administration
process by Kemble, which could have a domino effect on Thames Water
as there would be increased uncertainty over the group's ability to
repay its debts, making further finance unaffordable or even
unavailable, the FT discloses.  This could require government
intervention, experts said, the FT notes.

Ofwat insists that Thames Water is "ringfenced" and would not
necessarily follow Kemble into administration, the FT relays.

But Thames' nine shareholders, which include the Canadian pension
fund Omers, the UK's university pension fund scheme USS and the Abu
Dhabi and Chinese sovereign wealth funds, would face large losses,
which could trigger a host of legal claims, according to the FT.


VOLUME GROUP: Enters Administration, Owes GBP1.3 Million
--------------------------------------------------------
Business Sale reports that Volume Group Limited, a B2B marketing
firm specialising in digital content and immersive technologies,
fell into administration last month, with Chris Newell and Tim
Sloggett of Quantuma Advisory appointed as joint administrators.

In its accounts for the year to March 31, 2023, the Reading-based
company's fixed assets were valued at just shy of GBP2 million and
current assets at GBP1.4 million, Business Sale discloses.
However, its debts at the time stood at more than GBP4.1 million,
with net liabilities amounting to GBP1.3 million, Business Sale
notes.


VUE ENTERTAINMENT: Moody's Rates New EUR63MM Sec. Term Loan 'B3'
----------------------------------------------------------------
Moody's Investors Service has affirmed Vue Entertainment
International Limited's (VEIL) Caa2 corporate family rating.
Concurrently, Moody's assigned a B3 rating to the EUR63.7 million
senior secured term loan (new money facility) and a Caa2 rating to
the EUR127.4 million 1.5 lien senior secured term loan.
Concurrently, Moody's downgraded to B3 from B2 the EUR94.8 million
super senior secured term loan, and to Caa3 from Caa2 the EUR648.6
million (to be reinstated to EUR229.1 million) senior secured term
loan and EUR14 million senior secured bank credit facility. The
outlook remains negative.  

Concurrently, Moody's has affirmed the Caa2-PD probability of
default rating (PDR) and appended the limited default ("LD")
designation to the PDR changing it to Caa2-PD/LD from Caa2-PD. The
/LD designation follows the company's announcement on February 23,
2024 of the completion of its balance sheet restructuring, the
terms of which had originally been announced in January this year.
The transaction included (1) the equitisation of 50% of the
EUR648.6 million bank credit facility; (2) the issuance of EUR63.7
million of new money facility; and (3) the exchange of a portion of
the reinstated bank credit facility for a new EUR127.4 million 1.5
lien senior secured term loan ranking ahead of the reinstated bank
credit facility. The proceeds from the new money facility will be
used to alleviate immediate liquidity concerns. The EUR127.4
million senior secured term loan facility expires in 2027. Moody's
also acknowledges the sizable lease obligations remained unaffected
following the transaction.

Moody's considers the transaction as a distressed exchange under
its definition of default. The LD will be removed after three
business days.

RATINGS RATIONALE

VEIL's Caa2 CFR reflects the company's weak operating performance.
The agency expects admission levels in 2024 will be hurt by a
weaker-than-previously expected movie slate. The prolonged
SAG-AFTRA strike in the second half of 2023 caused significant
delays to the schedule for new releases and halted film production,
the latter of which only recommenced in January 2024. The company
expects a 10% decline in admissions for 2024 compared to 2023.

VEIL's rating also reflects structural challenges in the cinema
industry, including (1) high fixed costs associated with leased
premises; (2) lower demand from moviegoers as a result of
competition from more affordable subscription-based video-on-demand
(VOD) services; (3) unpredictability of success at the box office
depending on the quality and timing of studio releases, appeal to a
broad audience and marketing efforts; and (4) a shorter theatrical
window with a minimum of 45 days for big studio productions and 31
days for small productions, along with more flexible release
models.

More positively, Moody's expects VEIL to benefit from gradual
growth in new releases over the medium term as production ramps up
with big studios adhering to at least the 45-day theatrical window
for major movie releases. although in practice are typicallty
around 55 days and more.

The company's capital structure, pro forma the restructuring,
remains stretched. Moody's expects Moody's adjusted leverage
(Debt/EBITDA) to be around 9.5x in 2024. The company's ability to
sustain its existing capital structure is challenged by weak
earnings in 2024 and high interest costs and lease rentals.

LIQUIDITY

The company's liquidity position remains weak. Pro forma for the
debt restructuring, the company has indicated a cash balance of
GBP95 million end of January 2024. This excludes the GBP50 million
equivalent new money facility. All debt facilities are fully drawn
and include a GBP35 million minimum liquidity covenant, tested
monthly. Moody's expects VEIL to remain free cash flow negative by
around GBP85 million in 2024.

STRUCTURAL CONSIDERATIONS

The EUR648.6 million (to be reinstated to EUR229.1 million) senior
secured term loan is rated Caa3, one notch below VEIL's Caa2 CFR,
reflecting the increase in the size of the facilities which rank
ahead of the reinstated facility. The EUR94.8 million super senior
secured term loan and EUR63.7 million new money facility rank pari
passu and are rated B3, reflecting their seniority in the capital
structure. The EUR127.4 million 1.5 lien senior secured term loan
is rated Caa2 in line with VEIL's CFR, reflecting its seniority to
the reinstated EUR229.1 million senior secured term loan and its
subordination to the EUR94.8 million super senior secured term loan
and EUR63.7 million new money facility. All facilities are secured
mainly with share pledges and guaranteed by subsidiaries accounting
for 80% of the group's consolidated EBITDA.

ENVIRONMENTAL, SOCIAL & GOVERNANCE CONSIDERATIONS

Governance considerations were a key driver in the rating action.
VEIL entered the pandemic with high financial leverage and despite
the company's efforts to restructure its debt post-pandemic,
leverage remains pressured by the untenably high lease liabilities
and its liquidity position remains weak. The risks associated with
an untenable capital structure remain despite the completion of the
restructure in February, 2023.

OUTLOOK

The negative outlook reflects the volatility in the cinema industry
amid the reduced film slate for 2024. In addition, the outlook
reflects the uncertainty of film-goer demand for cinema attendance
within a weak economic environment and the likely rationalisation
of the number of cinema sites across the industry.

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

Upward pressure on the rating is unlikely before 2025 and will be
dependent upon an increase of studio content release and sustained
film-goers' demand such that VEIL's operating profitability
improves steadily.

Downward pressure on the rating will occur if the company's
liquidity deteriorates as a result of earnings not improving in the
next 12-18 months increasing the likelihood of further debt
restructuring.

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

COMPANY PROFILE

Vue Entertainment International Limited is a leading international
cinema operator, managing well-known brands in major European
markets, and is the second-largest European cinema operator by the
number of screens. In fiscal 2023, the company reported revenue of
GBP760.5 million and a company-adjusted EBITDA (after rental
expense) of GBP44.5 million.



                           *********


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 2024.  All rights reserved.  ISSN 1529-2754.

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