/raid1/www/Hosts/bankrupt/TCREUR_Public/250227.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
E U R O P E
Thursday, February 27, 2025, Vol. 26, No. 42
Headlines
F R A N C E
SEQUANS COMMUNICATIONS: Divisar, 2 Others Hold 4.4% Equity Stake
G E R M A N Y
ENVALIOR FINANCE: Fitch Affirms 'B' LongTerm IDR, Outlook Negative
I R E L A N D
DRYDEN 111 EURO 2022: Fitch Assigns B-(EXP) Rating on Class F Notes
DRYDEN 111 EURO 2022: S&P Assigns Prelim. B-(sf) Rating on F Notes
ROUNDSTONE SECURITIES 2: Fitch Affirms B+ Rating on F Notes
L U X E M B O U R G
FAGE INTERNATIONAL: S&P Discontinues 'BB' ICR Amid Debt Repayment
KLEOPATRA HOLDINGS: Moody's Cuts PDR to Caa3-PD, Outlook Negative
N E T H E R L A N D S
JUBILEE PLACE 2020-1: Moody's Ups Rating on EUR3MM E Notes to Ba1
S P A I N
GREEN BIDCO: Fitch Lowers Rating on Sr. Secured Notes to 'CCC+'
OBRASCON HUARTE: Moody's Puts 'Caa2' CFR on Review for Upgrade
U N I T E D K I N G D O M
ANTS DRILLING: SFP Restructuring Named as Administrators
ARTEZZAN RESTAURANTS: KBL Advisory Named as Administrators
BEN JOHNSON: Clough Corporate Named as Administrators
BLANCHFORD & CO: BDO LLP Named as Administrators
CONDER GREEN: FRP Advisory Named as Administrators
CONSTANT HIGHWAYS: MHA Named as Administrators
CUTTING ROOM: SFP Restructuring Named as Administrators
EAST 45: Leonard Curtis Named as Administrators
ENINCO TRADING: Alvarez & Marsal Named as Administrators
MAIZECOR FOODS: Interpath Advisory Named as Administrators
MELSIDE PROPERTIES: FRP Advisory Named as Administrators
MERLIN ENTERTAINMENTS: S&P Withdraws 'B-' ICR on Notes Redemption
SHARD RIVERSIDE: FRP Advisory Named as Administrators
STILED HOLDINGS: Azets Holdings Named as Administrators
VICTORIA PLC: Moody's Lowers CFR to Caa1, Outlook Negative
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F R A N C E
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SEQUANS COMMUNICATIONS: Divisar, 2 Others Hold 4.4% Equity Stake
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Divisar Capital Management LLC, Divisar Partners QP, L.P., and
Steven Baughman disclosed in a Schedule 13G/A filed with the U.S.
Securities and Exchange Commission that as of December 31, 2024,
they beneficially own 1,107,270 American Depository Shares (ADS),
each representing 10 Ordinary Shares, nominal value Euro 0.01, of
Sequans Communications, representing 4.4% of the outstanding ADS.
Divisar Capital may be reached through:
Steven Baughman, CEO
Divisar Capital Management, LLC
275 Sacramento Street, 8th Floor
San Francisco, CA 94111
Tel: 415-418-2201
A full-text copy of Divisar Capital's SEC Report is available at:
https://tinyurl.com/mse7a3rc
About Sequans Communications
Colombes, France-based Sequans Communications S.A. is a fabless
semiconductor company that designs, develops, and markets
integrated circuits and modules for 4G and 5G cellular IoT
devices.
Paris-La Defense, France-based Ernst & Young Audit, the Company's
auditor since 2008, issued a "going concern" qualification in its
report dated May 15, 2024, citing that the Company has suffered
recurring losses from operations, has a working capital deficiency,
and has stated that substantial doubt exists about the Company's
ability to continue as a going concern.
Sequans Communications incurred net losses of $9 million and $41
million in 2022 and 2023, respectively. As of December 31, 2023,
the Company had $109.2 million in total assets, $115.2 million in
total liabilities, and $6.1 million in total deficit.
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G E R M A N Y
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ENVALIOR FINANCE: Fitch Affirms 'B' LongTerm IDR, Outlook Negative
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Fitch Ratings has affirmed Envalior Finance GmbH's (Envalior)
Long-Term Issuer Default Rating (IDR) and senior secured rating at
'B'. The IDR remains on Negative Outlook. It has also affirmed AI
Montelena Bidco LLC (US)'s and AI Montelena (Netherlands) BV's
senior secured debt at 'B'. The Recovery Ratings are 'RR4'.
The Negative Outlook reflects Envalior's high EBITDA gross leverage
that continues to exceed its negative rating sensitivity of 6.5x in
2025. It also reflects risks that a lack of market recovery or
renewed input cost volatility may delay deleveraging.
Envalior's targeted synergies of EUR200 million, mainly in costs,
will lift the group's through-the-cycle EBITDA. This, along with
its strong position in polyamide, scale, international
diversification, and robust liquidity, supports the affirmation of
the ratings.
Key Rating Drivers
Slow Recovery, High Leverage: Envalior, like most chemical
companies, faces prolonged weak demand and fierce competition in
its markets. Fitch has revised down its EBITDA estimate for 2024 by
7% to EUR320 million, due to a feeble market recovery. However,
this still marks a sharp year-on-year improvement due to cost
savings, increasing volumes from a low level, and softening input
costs.
Fitch forecasts EBITDA to grow to EUR411 million in 2025 and EUR495
million in 2026, due mostly to further cost savings and a modest
improvement in volumes. Fitch therefore expects EBITDA gross
leverage to fall to 6.4x by end-2026, suggesting limited headroom
for the rating.
Synergies Key for Deleveraging: Fitch assumes Envalior will achieve
about EUR160 million of cost synergies by end-2027, out of the
EUR200 million identified by management. Fitch views the execution
risk of this plan as moderate, as the majority is composed of cost
synergies, and based on management's successful record with such
initiatives. Fitch views achieving the targeted synergies as
crucial to supporting profitability through the cycle, given
energy-cost volatility in Europe, prolonged chemical oversupply,
and uncertain growth prospects in major economies.
Improved Electronics Offsets Auto Weakness: Recovery of demand in
the electronics sector, after the severe destocking of 2023, has
offset weakening conditions in the European automotive market.
Envalior's exposure to automotive, which represent about 45% of
sales volume, generates earnings cyclicality. This is mitigated by
its geographical diversification, as highlighted by the better
performance of the auto sector in China and the US.
Caprolactam Supply Constrains Plant Utilisation: Envalior is almost
self-sufficient in the production of caprolactam, a key input for
polyamide 6 (PA6), through its Antwerp plant, which is the most
competitive in Europe. However, plant utilisation has been
constrained by low demand and a caprolactam supply contract that
runs until 2030. Despite this, Envalior has increased utilisation
rates, turning a gross profit at its intermediates segment since
3Q24. Increasing internally sourced caprolactam volumes would
reduce Envalior's operating leverage.
EU Gas, Ammonia Exposure: Envalior remains exposed to the
volatility of European gas prices as ammonia is a key feedstock in
the production of caprolactam. High gas and ammonia prices in
Europe have severely affected Envalior's margins in 2023, before
softening in 2024. Although Envalior has diversified its ammonia
sourcing, its European assets remained exposed to cost volatility,
which can affect their global competitiveness.
Electrification and Substitution Support: Fitch believes that
mobility electrification will drive Envalior's growth in the medium
term, as more PA6 per vehicle is used in hybrid and electric cars
compared with internal combustion vehicles. Moreover, PA6 is
progressively replacing polyamide 66 in automotive producers'
specifications, supporting the market's growth.
Global Polyamide Specialist: Envalior has critical mass as the
world's third-largest polyamide producer behind Celanese Corp.
(BBB-/Negative) and BASF SE (A/Stable). It has 18 plants worldwide
and a particularly strong presence in Europe and Asia. It benefits
from well-invested assets, a record of reliable supply, and
long-lasting customer relationships, especially given its product
specifications. Envalior's scale will enable investments in
innovation to address long-term trends such as light-weight
materials, electric mobility, sustainability and digitalisation.
Debt Layers: Fitch excludes the payment-in-kind (PIK) notes issued
by its indirect parent outside the senior secured restricted group
from the calculation of financial debt as they are structurally
subordinated and cannot trigger a default of Envalior. While
finance documents restrict cash outflows to the parent, some
payments may be allowed and could be used to distribute dividends
or repay PIK notes outside the senior secured restricted group.
Derivation Summary
Compared with Nouryon Holding B.V. (B+/Stable), Envalior is
smaller, has weaker market positions and less stable cash flows,
due to its exposure to more volatile sectors. Fitch expects
Nouryon's leverage to be lower than Envalior's.
Envalior is larger than Nobian Holding 2 B.V. (B/Stable), more
geographically diversified, and present in sectors with greater
growth potential. However, Fitch anticipates Nobian's leverage to
be lower, and it benefits from stronger barriers to entry and cost
pass-through ability.
Compared with Italmatch Chemicals S.p.A. (B/Stable), Envalior is
significantly larger and has stronger vertical integration.
However, Italmatch is more focused on specialty chemicals and has
lower leverage.
Envalior has similar scale, end-market diversification and vertical
integration to Roehm Holding GmbH (B-/Stable). However, Roehm faces
greater execution risk through the construction of its new plant,
has more exposure to commodity price volatility, and weaker
liquidity.
Key Assumptions
Fitch's Key Assumptions Within its Rating Case for the Issuer
- External sales volumes to grow 2.3% in 2025, 3.7% in 2026, 2.7%
in 2027, versus 6.5% in 2024
- EBITDA margin recovering to 14% in 2025 and 16% thereafter,
versus 12% in 2024
- Capex at 3%-3.5% of sales to 2027
- No dividends or M&As
Recovery Analysis
The recovery analysis assumes that Envalior would be reorganised as
a going-concern (GC) in bankruptcy rather than liquidated.
Its GC EBITDA estimate reflects Fitch's view of a sustainable
EBITDA level post-reorganisation, on which Fitch bases its
enterprise valuation (EV). Fitch uses a GC EBITDA of EUR350
million, after factoring in an adverse market environment of weak
demand and high production costs, and take into account the cost
savings that are being implemented.
Fitch uses a multiple of 5.0x to estimate a GC EV for Envalior
because of its leadership position and partial integration in the
value chain, which translates into moderate volume and margin
volatility. It also captures the company's diversified business
profile and modest scale.
Fitch assumes that Envalior's use of factoring would be substituted
by super senior debt in the event of financial distress, which is
deducted from the value available to calculate recoveries for the
first-lien senior secured instrument.
Fitch assumes its revolving credit facility (RCF) to be fully drawn
and to rank pari passu with its senior secured term loans.
After deducting 10% for administrative claims, its analysis
resulted in a waterfall-generated recovery computation (WGRC) for
the senior secured instruments in the 'RR4' band, indicating a 'B'
instrument rating. The WGRC output percentage on current metrics
and assumptions was 44%.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Slow performance recovery leading to EBITDA gross leverage above
6.5x for an extended period
- EBITDA interest coverage consistently below 1.5x
- Performance volatility due to uncompetitive feedstock sourcing or
sub-optimal plant utilisation rates
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- The Negative Outlook implies little scope for positive rating
action in the near future. However, outperformance leading to
EBITDA gross leverage returning to below 6.5x sooner than
anticipated could lead to a revision of the Outlook to Stable
- EBITDA gross leverage below 5.0x on a sustained basis would be
positive for the rating
- EBITDA interest coverage above 2.5x on a sustained basis
- Achievement of cost savings in line with management's
expectations and sustained positive free cash flow (FCF)
generation
Liquidity and Debt Structure
Envalior's liquidity is sufficient to fund working capital swings,
negative FCF in 2025 and moderate debt amortisation to 2030. As of
30 September 2024, Envalior had a cash balance of EUR280 million
and EUR298 million available funds under its EUR375 million RCF. It
also uses a sizeable off-balance sheet factoring facility that
Fitch treats as short-term debt. The RCF is subject to a senior
secured leverage maintenance covenant if its utilisation exceeds a
certain level, which remains untested so far.
Debt at the senior secured restricted group level is mainly
composed of about EUR3 billion term loans that mature in 2030, with
amortisation below EUR20 million annually. The RCF matures six
months before the term loans.
Issuer Profile
Envalior is a joint venture between private equity sponsor Advent
International (60%) and chemical group LANXESS (40%) in the
manufacture of high-performance engineering polymers.
Summary of Financial Adjustments
For 2023:
- Depreciation of rights-of-use assets of EUR8 million and lease
related interest expense of EUR1 million are reclassified as cash
operating expenses
- Off-balance sheet factoring use is added to short term debt.
Receivables increased by the same amount, and change of working
capital adjusted to reflect changes in usage
- Subordinated shareholder loans at Envalior are excluded from
financial debt
- Amortised transaction costs of EUR271 million are added back to
financial debt
- Inventory purchase price accounting adjustment of EUR120 million
and integration and restructuring costs of EUR20 million are added
back to EBITDA
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
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
----------- ------ -------- -----
AI Montelena
(Netherlands) BV
senior secured LT B Affirmed RR4 B
AI Montelena
Bidco LLC (USA)
senior secured LT B Affirmed RR4 B
Envalior Finance
GmbH LT IDR B Affirmed B
senior secured LT B Affirmed RR4 B
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I R E L A N D
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DRYDEN 111 EURO 2022: Fitch Assigns B-(EXP) Rating on Class F Notes
-------------------------------------------------------------------
Fitch Ratings has assigned Dryden 111 Euro CLO 2022 DAC notes
expected ratings. The assignment of final ratings is contingent on
the receipt of final documents conforming to information already
reviewed.
Entity/Debt Rating
----------- ------
Dryden 111 Euro
CLO 2022 DAC
A-1 LT AAA(EXP)sf Expected Rating
A-2 LT AAA(EXP)sf Expected Rating
B-1 LT AA(EXP)sf Expected Rating
B-2 LT AA(EXP)sf Expected Rating
C LT A(EXP)sf Expected Rating
D LT BBB-(EXP)sf Expected Rating
E LT BB-(EXP)sf Expected Rating
F LT B-(EXP)sf Expected Rating
Subordinated Notes LT NR(EXP)sf Expected Rating
Transaction Summary
Dryden 111 Euro CLO 2022 DAC is a securitisation of mainly senior
secured obligations (at least 96%) with a component of senior
unsecured, mezzanine, second-lien loans, first-lien last-out loans
and high-yield bonds. Note proceeds will be used to fund a
portfolio with a target par of EUR400 million. The portfolio is
managed by PGIM Loan Originator Manager Limited and PGIM Limited.
The collateralised loan obligation (CLO) will have a reinvestment
period of about 4.5 years and an 8.5-year weighted average life
(WAL) test.
KEY RATING DRIVERS
Average Portfolio Credit Quality (Neutral): Fitch Ratings assesses
the average credit quality of obligors to be in the 'B' category.
The Fitch weighted average rating factor (WARF) of the identified
portfolio is 23.7.
High Recovery Expectations (Positive): At least 96% of the
portfolio will comprise senior secured obligations. Fitch views the
recovery prospects for these assets as more favorable than for
second-lien, unsecured and mezzanine assets. The Fitch weighted
average recovery rate (WARR) of the identified portfolio is 62.4%.
Diversified Portfolio (Positive): The transaction will include
various concentration limits in the portfolio, including a top 10
obligor concentration limit of 20% and a maximum exposure to the
three-largest Fitch-defined industries in the portfolio of 40%.
These covenants ensure the asset portfolio will not be exposed to
excessive concentration.
The transaction is expected to have forward matrices, which will be
effective one-year after closing, subject to the aggregate
collateral balance (with defaulted obligations carried at Fitch
collateral value) being at least at the reinvestment target par
balance.
Portfolio Management (Neutral): The transaction will have a
reinvestment period of about 4.5 years and include reinvestment
criteria similar to those of other European transactions. Fitch's
analysis is based on a stressed portfolio with the aim of testing
the robustness of the transaction structure against its covenants
and portfolio guidelines.
Cash Flow Modelling (Positive): The WAL used for the transaction's
Fitch-stressed portfolio and matrices analysis is 12 months less
than the WAL covenant. This is to account for structural and
reinvestment conditions after the reinvestment period, including
passing the over-collateralisation tests and the Fitch 'CCC'
limitation test . Fitch believes these conditions will reduce the
effective risk horizon of the portfolio during stress periods.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
A 25% increase of the mean default rate (RDR) and a 25% decrease of
the recovery rate (RRR) across all ratings of the identified
portfolio would lead to downgrades of one notch each to the class B
to D notes, but would have no rating impact on the rest.
Based on the identified portfolio, downgrades may occur if the loss
expectation is larger than initially assumed, due to unexpectedly
high levels of default and portfolio deterioration. Due to the
better metrics and shorter life of the identified portfolio than
the Fitch-stressed portfolio, the class B, C, D and, E and F notes
each have a two-notch cushion, the class F notes have a three-notch
cushion, while the class A notes have no rating cushion.
Should the cushion between the identified portfolio and the
Fitch-stressed portfolio be eroded due to manager trading or
negative portfolio credit migration, a 25% increase of the mean RDR
and a 25% decrease of the RRR across all ratings of the
Fitch-stressed portfolio would lead to downgrades of up to four
notches each for the class A-1 to D notes and to below 'B-sf' for
the class E and F notes.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
A 25% reduction of the mean RDR and a 25% increase in the RRR
across all ratings of the Fitch-stressed portfolio would lead to
upgrades of up to four three notches each for the notes, except for
the 'AAAsf' rated notes.
During the reinvestment period, upgrades, based on the
Fitch-stressed portfolio, may occur on better-than-expected
portfolio credit quality and a shorter remaining WAL test, allowing
the notes to withstand larger-than-expected losses for the
transaction's remaining life. After the end of the reinvestment
period, upgrades may result from stable portfolio credit quality
and deleveraging, leading to higher credit enhancement and excess
spread available to cover losses in the remaining portfolio.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
DATA ADEQUACY
The majority of the underlying assets or risk-presenting entities
have ratings or credit opinions from Fitch and/or other nationally
recognised statistical rating organisations and/or European
securities and markets authority-registered rating agencies. Fitch
has relied on the practices of the relevant groups within Fitch
and/or other rating agencies to assess the asset portfolio
information or information on the risk-presenting entities.
Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis according to its applicable rating methodologies
indicates that it is adequately reliable.
ESG Considerations
Fitch does not provide ESG relevance scores for Dryden 111 Euro CLO
2022 DAC.
In cases where Fitch does not provide ESG relevance scores in
connection with the credit rating of a transaction, programme,
instrument or issuer, Fitch will disclose any ESG factor that is a
key rating driver in the key rating drivers section of the relevant
rating action commentary.
DRYDEN 111 EURO 2022: S&P Assigns Prelim. B-(sf) Rating on F Notes
------------------------------------------------------------------
S&P Global Ratings assigned preliminary ratings to Dryden 111 Euro
CLO 2022 DAC's class A-1, A-2, B-1,B-2, C, D, E, and F notes. At
closing, the issuer will also issue EUR36.00 million of
subordinated notes.
The preliminary ratings assigned to Dryden 111 Euro CLO 2022 DAC's
notes reflect S&P's assessment of:
-- The diversified collateral pool, which primarily comprises
broadly syndicated speculative-grade senior secured term loans and
bonds that are governed by collateral quality tests.
-- The credit enhancement provided through the subordination of
cash flows, excess spread, and overcollateralization.
-- The collateral manager's experienced team, which can affect the
performance of the rated notes through collateral selection,
ongoing portfolio management, and trading.
-- The transaction's legal structure, which S&P expects to be
bankruptcy remote.
-- The transaction's counterparty risks, which S&P expects to be
in line with its counterparty rating framework.
Portfolio benchmarks
S&P weighted-average rating factor 2,704.06
Default rate dispersion 630.01
Weighted-average life (years) 4.68
Weighted-average life (years) extended
to cover the length of the reinvestment period 4.68
Obligor diversity measure 104.73
Industry diversity measure 24.16
Regional diversity measure 1.15
Transaction key metrics
Portfolio weighted-average rating
derived from S&P's CDO evaluator B
'CCC' category rated assets (%) 0.00
Target 'AAA' weighted-average recovery (%) 38.00
Target weighted-average spread (net of floors; %) 3.91
Target weighted-average coupon (%) 3.81
Rationale
Under the transaction documents, the rated notes will pay quarterly
interest unless a frequency switch event occurs. Following this,
the notes will switch to semiannual payments. The portfolio's
reinvestment period will end approximately 4.5 years after
closing.
S&P said, "At closing, we expect the portfolio to be
well-diversified, primarily comprising broadly syndicated
speculative-grade senior-secured term loans and senior-secured
bonds. Therefore, we have conducted our credit and cash flow
analysis by applying our criteria for corporate cash flow CDOs.
"In our cash flow analysis, we used the EUR400 million target par
amount, the covenanted weighted-average spread (3.80%), the
covenanted weighted-average coupon (3.50%), and the target
weighted-average recovery rates calculated in line with our CLO
criteria for all classes of notes. We applied various cash flow
stress scenarios, using four different default patterns, in
conjunction with different interest rate stress scenarios for each
liability rating category."
Until the end of the reinvestment period on Oct. 21, 2029, the
collateral manager may substitute assets in the portfolio as long
as S&P's CDO Monitor test is maintained or improved in relation to
the initial ratings on the notes. This test looks at the total
amount of losses that the transaction can sustain--as established
by the initial cash flows for each rating--and compares that with
the current portfolio's default potential plus par losses to date.
As a result, until the end of the reinvestment period, the
collateral manager may through trading deteriorate the
transaction's current risk profile, if the initial ratings are
maintained.
S&P said, "Under our structured finance sovereign risk criteria, we
consider the transaction's exposure to country risk sufficiently
mitigated at the assigned preliminary ratings.
"At closing, we expect the transaction's documented counterparty
replacement and remedy mechanisms to adequately mitigate its
exposure to counterparty risk under our counterparty criteria.
"We expect the transaction's legal structure and framework to be
bankruptcy remote, in line with our legal criteria.
"The CLO will be managed by PGIM Loan Originator Ltd. and PGIM Ltd.
and the maximum potential rating on the liabilities is 'AAA' under
our operational risk criteria.
"Following our analysis of the credit, cash flow, counterparty,
operational, and legal risks, we believe the preliminary ratings
are commensurate with the available credit enhancement for the
class A-1 to F notes. Our credit and cash flow analysis indicates
that the available credit enhancement for the class B-1 to F notes
could withstand stresses commensurate with higher ratings than
those assigned. However, as the CLO will be in its reinvestment
phase starting from closing -- during which the transaction's
credit risk profile could deteriorate -- we have capped our
preliminary ratings on the notes.
"In addition to our standard analysis, to indicate how rising
pressures among speculative-grade corporates could affect our
ratings on European CLO transactions, we also included the
sensitivity of the ratings on the class A-1 to E notes based on
four hypothetical scenarios.
"As our ratings analysis makes additional considerations before
assigning ratings in the 'CCC' category, and we would assign a 'B-'
rating if the criteria for assigning a 'CCC' category rating are
not met, we have not included the above scenario analysis results
for the class F notes."
Environmental, social, and governance
S&P said, "We regard the transaction's exposure to environmental,
social, and governance (ESG) credit factors as broadly in line with
our benchmark for the sector. Primarily due to the diversity of the
assets within CLOs, the exposure to environmental and social credit
factors is viewed as below average, while governance credit factors
are average. For this transaction, the documents prohibit or limit
certain assets from being related to certain activities.
Accordingly, since the exclusion of assets from these activities
does not result in material differences between the transaction and
our ESG benchmark for the sector, no specific adjustments have been
made in our rating analysis to account for any ESG-related risks or
opportunities."
Dryden 111 Euro CLO 2022 DAC is a European cash flow CLO
securitization of a revolving pool, comprising mainly
euro-denominated leveraged loans and bonds. The transaction is a
broadly syndicated CLO that will be managed by PGIM Loan Originator
Manager Ltd. and PGIM Ltd.
Ratings list
Prelim. Prelim. Amount Credit
Class rating* (mil. EUR) Interest rate§ enhancement (%)
A-1 AAA (sf) 244.00 Three/six-month EURIBOR 39.00
plus 1.22%
A-2 AAA (sf) 12.00 Three/six-month EURIBOR 36.00
plus 1.50%
B-1 AA (sf) 16.00 Three/six-month EURIBOR 27.00
plus 1.85%
B-2 AA (sf) 20.00 4.75 % 27.00
C A (sf) 24.00 Three/six-month EURIBOR 21.00
plus 2.20%
D BBB- (sf) 28.00 Three/six-month EURIBOR 14.00
plus 3.20%
E BB- (sf) 18.00 Three/six-month EURIBOR 9.50
plus 5.00%
F B- (sf) 12.00 Three/six-month EURIBOR 6.50
plus 8.20%
Sub notes NR 36.00 N/A N/A
*The preliminary ratings assigned to the class A-1, A-2, B-1, and
B-2 notes address timely interest and ultimate principal payments.
The preliminary ratings assigned to the class C, D, E, and F notes
address ultimate interest and principal payments.
§Solely for modeling purposes--the actual spreads may vary at the
time of pricing. The payment frequency switches to semiannual and
the index switches to six-month EURIBOR when a frequency switch
event occurs. EURIBOR--Euro Interbank Offered Rate.
NR--Not rated.
N/A--Not applicable.
ROUNDSTONE SECURITIES 2: Fitch Affirms B+ Rating on F Notes
-----------------------------------------------------------
Fitch Ratings has affirmed Roundstone Securities No.2 DAC 's notes
and removed them from Under Criteria Observation (UCO).
Entity/Debt Rating Prior
----------- ------ -----
Roundstone Securities
No. 2 DAC
A XS2779836308 LT AAAsf Affirmed AAAsf
B XS2779836480 LT AAsf Affirmed AAsf
C XS2779836647 LT Asf Affirmed Asf
D XS2779836993 LT BBBsf Affirmed BBBsf
E XS2779837025 LT BBsf Affirmed BBsf
F XS2779837298 LT B+sf Affirmed B+sf
Transaction Summary
The transaction is a securitisation of first-lien Irish residential
owner occupied (OO; 78%) and buy-to-let (BTL; 22%) mortgage assets
originated prior to 2010 by Bank of Scotland Ireland. The pool was
previously securitised in Roundstone No.1 DAC, which was not rated
by Fitch.
KEY RATING DRIVERS
Updated Criteria Assumptions: Fitch analysed the transaction under
its updated European RMBS Rating Criteria, dated 30 October 2024.
For this analysis, Fitch applied a transaction adjustment of 2.0x
and a borrower-level recovery rate cap of 85.0%. In conjunction
with the revised assumptions led to a broadly unchanged 'AAA'
loss.
General Reserve Below Target: As at November 2024, there was an
uncleared principal deficiency ledger of EUR35.8 million, the
non-liquidity reserve was at 99% of its target amount and 90+
arrears were around 18%(from around 15% at closing). The build-up
of available credit enhancement (CE) supports the ratings, leading
to their affirmations and Stable Outlooks.
High Portion of Restructured Loans: The portfolio contains a large
proportion of loans subject to forbearance and restructuring
arrangements (around 20%) as well as loans in arrears (around 21%).
which led to 'Bsf' foreclosure frequency (FF) assumptions of
12.6%.
High IO Exposure: The pool contains around 60% (by current balance)
of interest-only (IO) loans, 40% of which are OO and 20% are BTL.
Fitch believes there is a material risk of prolonged forbearance
being offered to OO borrowers where bullet payments are not met at
loan maturity. Fitch believes this is most likely to materialise
for older borrowers with higher loan-to-value (LTV) ratios, and
Fitch has therefore assumed OO IO loans with an indexed current-LTV
greater than 60% and borrowers aged 60 years or older at loan
maturity will produce no yield in the analysis, in line with
closing.
Unhedged Basis Risk: 98% of the loans are floating, of which 81%
are linked to the ECB rate and 17% are linked to standard variable
rate (SVR; which is tracking the ECB rate). The weighted average
margin is around 1.1%. There is no swap in place to hedge the
mismatch between the ECB and SVR-linked assets and the
Euribor-based notes, exposing the transaction to potential basis
risk. Fitch has therefore applied its basis risk assumptions for
this exposure in line with its European RMBS Rating Criteria.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
The transaction's performance may be affected by changes in market
conditions and the economic environment. Weakening economic
performance is strongly correlated to increasing levels of
delinquencies and defaults that could reduce CE available to the
notes.
In addition, unanticipated declines in recoveries could result in
lower net proceeds, which may make certain notes susceptible to
negative rating action depending on the extent of the decline in
recoveries. Fitch found that a 15% increase in the weighted average
(WA) FF and a 15% decrease in the WA recovery rate (RR) indicate
downgrades of up to three notches from the model-implied ratings.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
Stable to improved asset performance driven by stable delinquencies
and defaults would lead to increasing CE levels and upgrades. Fitch
found a decrease in the WAFF of 15% and an increase in the WARR of
15% indicate upgrades of up to four notches from the model-implied
ratings for the class B to F notes.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
DATA ADEQUACY
Prior to the transaction closing, Fitch reviewed the results of a
third party assessment conducted on the asset portfolio information
and concluded that there were no findings that affected the rating
analysis.
Overall, and together with any assumptions referred to above,
Fitch's assessment of the information relied upon for the agency's
rating analysis according to its applicable rating methodologies
indicates that it is adequately reliable.
ESG Considerations
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
===================
L U X E M B O U R G
===================
FAGE INTERNATIONAL: S&P Discontinues 'BB' ICR Amid Debt Repayment
-----------------------------------------------------------------
S&P Global Ratings has discontinued its 'BB' long-term issuer
credit rating on FAGE International S.A. The outlook was stable at
the time of the discontinuance.
S&P discontinued the rating after FAGE repaid all its outstanding
senior notes due 2026.
KLEOPATRA HOLDINGS: Moody's Cuts PDR to Caa3-PD, Outlook Negative
-----------------------------------------------------------------
Moody's Ratings downgraded the probability of default rating of
global plastic packaging manufacturer Kleopatra Holdings 2 S.C.A
(Klöckner Pentaplast, KP or the company) to Caa3-PD from Caa1-PD.
KP's long term corporate family rating remains unchanged at Caa1.
The Caa3 rating of KP's EUR300 million guaranteed senior notes due
2026, remains unchanged. In addition, the Caa1 instrument ratings
of Kleopatra Finco S.a r.l.'s EUR400 million guaranteed senior
secured global notes due 2026, EUR600 million senior secured first
lien term loan B due 2026 and EUR120 million senior secured first
lien revolving credit facility due 2026, and Klockner Pentaplast of
America, Inc.'s $725 million backed senior secured first lien term
loan B due 2026 all remain unchanged. The outlook for all entities
is unchanged and negative.
A comprehensive review of all credit ratings for the respective
issuer(s) has been conducted during a rating committee.
The action follows the company's announcement, made on February 07
that it had entered into an agreement with approximately 75% of its
existing noteholders to refinance its existing EUR300 million 6.5%
global senior notes due September 2026, rated Caa3, with new second
lien notes due 2029. Existing noteholders are being offered a price
of 100% for the new notes with a 6.5% cash interest plus 2.5% PIK
interest. If the refinancing successfully completes as proposed,
Moody's would likely classify the debt exchange offer as a
distressed exchange per Moody's definitions and reflects the
limited default (LD) at the time of completion. The downgrade of
the PDR reflects this increased risk of default as highlighted by
the company's announcement.
Moody's understands that this is the first step in the company
addressing its 2026 maturity wall, when the majority of its debt
comes due. The second stage will focus on the first lien debt.
RATINGS RATIONALE
KP's Caa1 CFR reflects its high leverage, at 11.2x, low interest
coverage with EBITDA/interest expenses of 1.0x, and negative free
cash flow for the twelve months (LTM) ending September 30, 2024.
This is coupled with the risks resulting from approaching debt
maturities in 2026. While the company is planning a refinancing,
the terms of such transaction and the resulting credit profile are
uncertain at present.
More positively, KP's rating incorporates the company's large size,
relative to its rated peers, geographic diversification and
long-standing relationships with a broad customer base. The
company's strategic focus on less cyclical sectors such as food and
pharmaceuticals also adds to its credit strength. Furthermore, KP
is currently implementing pricing and cost-cutting initiatives, the
results of which remain uncertain at this time, but are projected
to come to fruition in 2025.
ESG CONSIDERATIONS
Moody's assessed the governance of the group to be a key driver for
the rating action given the planned refinancing of the EUR300
million global senior notes due 2026 will likely be deemed a
distressed exchange and limited default.
LIQUIDITY
KP's near-term liquidity is viewed as inadequate given the majority
of the company's debt comes due in 2026. Liquidity is however,
supported by EUR46 million of cash on balance sheet and EUR120
million revolver, drawn by EUR48.3 million at September 30, 2024.
STRUCTURAL CONSIDERATIONS
KP's capital structure includes senior secured first lien term
loans and RCF, senior secured notes and senior notes. The RCF,
senior secured first lien term loans and secured notes rank pari
passu, while the senior notes are subordinated to them in terms of
ranking. The instrument ratings for the equivalent EUR1.2 billion
of senior secured term loans and EUR400 million of guaranteed
senior secured notes are rated Caa1, in line with CFR. The senior
notes rating at Caa3 reflects the notes' subordination to a
substantial amount of secured debt.
RATING OUTLOOK
The negative rating outlook reflects the uncertainty associated
with the timing and terms of KP's debt refinancing, as well as
potential sustainability of the post-transaction capital structure
and cost of debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Given the negative outlook, an upgrade is unlikely at this point.
Going forward, KP could be upgraded should it successfully
refinance its upcoming maturities such that its leverage reduces to
below 7.5x, its EBITDA/interest coverage increases to over 2.0x and
its free cash flow becomes positive on a sustained basis.
Any deterioration in liquidity or failure to refinance its upcoming
maturities could lead to a downgrade. Moody's expects the upcoming
refinancing to be accompanied by material deleveraging otherwise
Moody's would consider a downgrade in the short term. A downgrade
of the CFR could also occur if the expected recovery rates were to
decrease.
The principal methodology used in this rating was Packaging
Manufacturers: Metal, Glass and Plastic Containers published in
December 2021.
Kleopatra Holdings 2 S.C.A, a plastic packaging manufacturer,
produces both flexible and rigid plastic films and trays for
pharmaceutical, health and food sectors. In the 12 months ending
September 30, 2024, the firm reported revenues of EUR1.8 billion
and a Moody's adjusted EBITDA of EUR214 million. Since a
restructuring and recapitalisation in June 2012, Strategic Value
Partners (SVP) has been the principal investor.
=====================
N E T H E R L A N D S
=====================
JUBILEE PLACE 2020-1: Moody's Ups Rating on EUR3MM E Notes to Ba1
-----------------------------------------------------------------
Moody's Ratings has upgraded the ratings of two classes of notes
and affirmed the ratings of three classes notes in the Dutch
Buy-to-Let RMBS deal Jubilee Place 2020-1 B.V. The rating action
reflects the better than expected collateral performance and
increased levels of credit enhancement for the affected notes.
Moody's affirmed the ratings of the notes that had sufficient
credit enhancement to maintain their current ratings.
EUR173.2M Class A Notes, Affirmed Aaa (sf); previously on Aug 8,
2022 Affirmed Aaa (sf)
EUR10.9M Class B Notes, Affirmed Aa3 (sf); previously on Aug 8,
2022 Affirmed Aa3 (sf)
EUR6.9M Class C Notes, Affirmed Aa3 (sf); previously on Aug 8,
2022 Upgraded to Aa3 (sf)
EUR4.5M Class D Notes, Upgraded to A2 (sf); previously on Aug 8,
2022 Upgraded to Baa1 (sf)
EUR3.0M Class E Notes, Upgraded to Ba1 (sf); previously on Aug 8,
2022 Affirmed Ba2 (sf)
The transaction is a cash securitisation of Dutch buy-to-let
mortgage loans originated by three originators: Dutch Mortgage
Services B.V. (NR), DNL 1 B.V. (NR) and Community Hypotheken B.V.
(NR).
RATINGS RATIONALE
The rating action is prompted by decreased key collateral
assumptions, namely the portfolio Expected Loss (EL) assumption due
to better than expected collateral performance, as well as by an
increase in credit enhancement available for the affected notes.
Moody's affirmed the ratings of the notes that had sufficient
credit enhancement to maintain their current ratings.
Revision of Key Collateral Assumptions:
As part of the rating action, Moody's reassessed Moody's lifetime
loss expectation for the portfolio reflecting the collateral
performance to date.
The performance of the transaction has continued to be stable over
the past year. While total delinquencies have increased in the past
year, with 90 days plus arrears currently standing at 1.61% of
current pool balance, this increase is due to a single loan. There
have been no losses to date.
Moody's decreased the expected loss assumption to 0.84% as a
percentage of original pool balance from 1.17% due to the better
than expected collateral performance. The revised expected loss
assumption corresponds to 2.0% as a percentage of current pool
balance.
Moody's have also assessed loan-by-loan information as a part of
Moody's detailed transaction review to determine the credit support
consistent with target rating levels and the volatility of future
losses. As a result, Moody's have maintained the MILAN Stressed
Loss assumption at 8.2%.
Increase in Available Credit Enhancement
Sequential amortization led to the increase in the credit
enhancement available in the transaction. For instance, since its
last rating action the credit enhancement for the Class D notes
increased to 3.57% from 2.36%.
Counterparty Exposure
The rating actions took into consideration the notes' exposure to
relevant counterparties, such as the servicer.
Moody's considered how the liquidity available in the transaction
and other mitigants support continuity of note payments, in case of
servicer default, using the CR assessment as a reference point for
the servicer. The transaction has an amortising liquidity reserve
fund, which provides liquidity for the Class A notes only. The
notes ranking below the Class A notes do not benefit from any
reserve fund and rely on the principal to pay interest mechanism,
which is in itself limited in certain circumstances, to support
timely payments of interest. Therefore, the ratings of the Class B
and C notes are constrained by operational risk due to insufficient
liquidity.
The principal methodology used in these ratings was "Residential
Mortgage-Backed Securitizations" published in October 2024.
The analysis undertaken by Moody's at the initial assignment of
ratings for RMBS securities may focus on aspects that become less
relevant or typically remain unchanged during the surveillance
stage.
Factors that would lead to an upgrade or downgrade of the ratings:
Factors or circumstances that could lead to an upgrade of the
ratings include (1) performance of the underlying collateral that
is better than Moody's expected, (2) an increase in available
credit enhancement and (3) improvements in the credit quality of
the transaction counterparties.
Factors or circumstances that could lead to a downgrade of the
ratings include (1) an increase in sovereign risk, (2) performance
of the underlying collateral that is worse than Moody's expected,
(3) deterioration in the notes' available credit enhancement and
(4) deterioration in the credit quality of the transaction
counterparties.
=========
S P A I N
=========
GREEN BIDCO: Fitch Lowers Rating on Sr. Secured Notes to 'CCC+'
---------------------------------------------------------------
Fitch Ratings has downgraded Green Bidco, S.A.U.'s (Amara)
Long-Term Issuer Default Rating (IDR) and its senior secured notes
(SSNs) to 'CCC+' from 'B-'. The Recovery Rating on the SSNs is
'RR4'. The IDR has been removed from Rating Watch Negative (RWN).
The downgrade reflects its view of structurally weaker sector
trends and its expectation that Amara's key metrics will breach its
previous negative rating sensitivities over the rating horizon.
This includes negative free cash flow (FCF) generation, due to
lower-than-previously expected profitability, as well as ongoing
capex and working capital outflows.
While Amara maintains a good market position in its niche market,
long-term relationship with customers and some liquidity headroom
under its available revolving credit facility (RCF), the rating is
constrained by its small scale, geographical concentration, and
high leverage. Further, Amara faces a partial loss of revenues from
Iberdrola, S.A. (BBB+/Stable). Fitch expects its liquidity to be
vulnerable to a further business downturn.
Key Rating Drivers
Small Improvement of EBITDA Margin: In 9M24, Amara offset declining
solar panel margins with increased non-solar contributions but not
enough to prevent an estimated decrease in full-year profitability
for 2024. Fitch forecasts modest EBITDA growth for 2025-2027, aided
by an improved product mix and geographical diversification beyond
Europe. However, slow profitability improvement will keep leverage
above its previous 7.5x negative sensitivity.
Market Trend Reversal: Demand for solar panels in Europe slowed in
2023 and 2024 after the reversal of high energy prices in 2022,
while prices also fell due to a structural oversupply of products
and a more competitive environment. In response, the group is
increasing its product and geographic diversification, including
distribution to Latin America. In addition, inventory is currently
procured at lower prices. Fitch expects weak market conditions to
continue through 2025 for solar panel installations.
Lower Revenue from Iberdrola Contract: The group's contract with
Iberdrola to provide products for the expansion of the Spanish grid
was partially deferred, as a result of delayed investment by
Iberdrola, resulting in lower revenue of about EUR30 million,
compared with an expected EUR70 million. The contract remains valid
until 2027 and Fitch expect Amara to take actions to mitigate the
impact of the loss. Amara's management anticipates an agreement
with Iberdrola in the US in 2025.
Energy Transition Continues: Amara operates as an intermediary in
the value chain for energy-transition products, which supports its
long-term business outlook, provided it remains competitive.
Sixty-seven per cent of its revenue is derived from renewables
end-markets, primarily solar energy, and 28% from electrification.
The group benefits from the secular trend of rising demand for
green energy that has supported its rapid growth up to 2023.
Limited Customer/Supplier Diversification: Due to the nature of the
group's end-markets, the customer base is moderately concentrated,
with the top five customers contributing about 10% of Amara's 2024
revenue. Suppliers are also concentrated, with the top five
accounting for 40% of its costs, reflecting Amara's small size and
strategy to secure better terms and availability of key products.
Mitigating factors are long-term cooperation with customers and
suppliers who primarily operate in the non-cyclical energy industry
and benefit from the secular energy transition trend.
Concentration in Spain: Amara's geographical diversification is
moderate, with 56% of its 2023 revenue generated in Spain, followed
by 15% from Brazil, 11% from Italy and 7% from the US and Mexico.
However, the group aims to expand its scale and diversification
through M&As and increase its current distribution capacity.
Derivation Summary
The business profile of Amara is comparable with that of other B2B
distributors rated by Fitch, such as Quimper AB (B+/Stable) and
Winterfell Financing S.a.r.l. (B/Stable). Amara is much smaller
than these peers, but its end-market exposure tends to be less
cyclical as it operates in the value chain for the
energy-transition market rather than in the cyclical building
material-and-product market. Similar to Quimper, the group's
geographical diversification is concentrated, given its focus on
Spain. Due to the nature of its business, Amara has greater
concentrations in its customers and suppliers than peers.
Amara's expected EBITDA margin is slightly stronger than that of
Winterfell, but weaker than Quimper's. Historically Amara's FCF
generation has been negative and Fitch expects further negative FCF
for 2025- 2027. FCF is weaker than Winterfell's.
Due to the impact of lower EBITDA margins since 2023, Amara's
leverage is above its peers' at 9.0x. Fitch estimates EBITDA
leverage at above 8x in 2024 and 2025, which is weak for its
rating. Quimper's expected leverage is around 4x and Winterfell's
is projected at below 7x.
Key Assumptions
Fitch's Key Assumptions within Its Rating Case for the Issuer
- Revenue to grow in mid-single digits in 2025-2027, after
declining in 2024
- EBITDA generation gradually improving in 2025-2027, after
declining in 2024
- Working capital outflow in 2025-2027 due to investments in new
regions and end-markets
- Capex trending towards 1% of revenue by 2027, from 1.5% in 2024
- No dividend payments
- Bolt-on acquisitions in non-solar division in 2026-2027
Recovery Analysis
Key Recovery Rating Assumptions:
- Its recovery analysis assumes that Amara would be deemed a going
concern (GC) in bankruptcy and that it would be reorganised rather
than liquidated
- Its GC value available for creditor claims is estimated at EUR186
million, based on an assumed GC EBITDA of EUR45 million
- Its GC EBITDA assumes the loss of a major customer and a failure
to broadly pass on cost inflation to customers. The assumption also
reflects corrective measures taken in a reorganisation to offset
the adverse conditions that trigger its default
- A 10% administrative claim
- An enterprise value (EV) multiple of 5.0x is applied to GC EBITDA
to calculate a post-reorganisation EV. The multiple is based on the
group's leading market position in Spain and other markets, with
solid non-cyclical end-markets, an established logistics network,
moderate geographical diversification, and its long-term
relationship with customers. At the same time, the EV multiple
reflects the group's small scale in comparison with peers', its
customer and supplier concentration, and historically weak FCF
generation
- Fitch deducts about EUR20 million from the EV to account for the
group's factoring facility as of end-June 2024, in line with
Fitch's criteria
- Fitch estimates the total amount of senior debt claims at EUR378
million, which includes a EUR57 million super senior secured RCF,
EUR267.5 million senior secured notes (SSNs), and EUR53 million of
bank debt. Fitch views the RCF as super senior and the bank debt as
ranking equally with the SSNs
- These assumptions result in a Recovery Rating of 'RR4' for the
SSNs, resulting in equal instrument rating and IDR. The principal
and interest waterfall analysis output percentage on current
metrics and assumptions is 40%.
RATING SENSITIVITIES
Factors That Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- Further deterioration of liquidity as underlined by the use of
RCF
- EBITDA interest coverage below 1x
- Inability to achieve profit margin recovery including through
enhanced product and geographical diversification
Factors That Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- EBITDA gross leverage below 7.5x on a sustained basis
- FCF margin trending towards break-even
- EBITDA interest coverage above 1.5x on a sustained basis
- Improving liquidity position
Liquidity and Debt Structure
Amara's liquidity is supported by a reported cash balance of EUR22
million as of September 2024 and an undrawn RCF of EUR57 million.
Fitch anticipates negative FCF over the next three years, which is
likely to lead to an increased reliance on existing cash reserves
and, potentially, new debt issuance.
With its EUR267.5 million SSNs maturing in 2028, refinancing risk
is currently limited. However, any weaker-than-expected cash
generation could heighten the risk in the near term.
Issuer Profile
Amara, which is headquartered in Madrid, is a B2B distributor of
products and services used in the energy transition market.
MACROECONOMIC ASSUMPTIONS AND SECTOR FORECASTS
Fitch's latest quarterly Global Corporates Macro and Sector
Forecasts data file which aggregates key data points used in its
credit analysis. Fitch's macroeconomic forecasts, commodity price
assumptions, default rate forecasts, sector key performance
indicators and sector-level forecasts are among the data items
included.
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
----------- ------ -------- -----
Green Bidco, S.A.U. LT IDR CCC+ Downgrade B-
senior secured LT CCC+ Downgrade RR4 B-
OBRASCON HUARTE: Moody's Puts 'Caa2' CFR on Review for Upgrade
--------------------------------------------------------------
Moody's Ratings has placed on review for upgrade the Caa2 corporate
family rating of Obrascon Huarte Lain S.A. ("OHLA"). OHLA's Caa2-PD
probability of default rating had been placed on review for upgrade
while the "/LD" indicator has been removed following repayment of
delayed coupon originally due on September 15, 2024. Concurrently,
the Caa2 instrument rating on existing backed senior secured notes
issued by subsidiary OHL Operaciones S.A.U. was also placed on
review for upgrade. Previously, the outlook on both entities was
negative.
The rating action follows OHLA's announcement on February 13, 2025
that all requisite conditions and transactions pertinent to the
completion of its recapitalisation plan have been fully executed.
It entailed a EUR150 million total increase in share capital
through two rounds of rights issues executed in December 2024 and
February 2025. It also involved the amendment of terms and
conditions of existing backed senior secured notes to (1) extend
the maturity date to December 31, 2029 from March 31, 2026; (2) set
the total interest cost at 5.1% cash interest with a
payment-in-kind (PIK) component of 4.65% until December 31, 2026,
6.15% until December 31, 2027, and 8.95% thereafter; (3) facilitate
the early redemption of EUR139 million in aggregate principal
amount; and (4) incorporate allowed indebtedness baskets to enhance
financial flexibility and mitigate working capital swings and
growth requirements.
In addition, as part of the recapitalisation plan, OHLA reached an
agreement with banks for (1) the full repayment and cancellation of
the EUR40 million bridge facility loan backed by Instituto de
Crédito Oficial (ICO) for which it had previously secured maturity
extension to March 31, 2025 from November 19, 2024; (2) the
amendment of terms and conditions of its EUR329 million syndicated
multi-product financing agreement (FSM Line) and EUR35 million
existing syndicated line backed by Compañía Española de Seguros
de Crédito a la Exportación (Existing CESCE Bonding Line) to (i)
immediately release EUR108 million cash collateral securing the FSM
Line with a commitment to further release an additional EUR30
million upon fulfillment of specific conditions, (ii) extend the
maturity of FSM Line and Existing CESCE Bonding Line to February
2026 with two subsequent one-year extension upon satisfaction of
certain conditions, and (iii) replace part of the FSM Line with
EUR260 million new bonding lines backed by CESCE (New CESCE Bonding
Line) on April 30, 2025 with the same maturity extension mechanism
as the remaining FSM Line and Existing CESCE Bonding Line.
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
The review for upgrade was prompted by the reduction in debt and
the extension of debt maturities following OHLA's recapitalisation,
alleviating the refinancing pressures that OHLA had faced prior to
the finalization of the recapitalisation. As a result of the debt
redemption Moody's-adjusted debt/EBITDA has declined to 3.3x as of
LTM September 2024, pro forma for the recapitalisation from 4.3x on
an actual basis. The review for upgrade also reflects an improved
liquidity due to the cash equity injection, cash collateral
release, and net disposal proceeds from the sale of CHUM, which
generate a net liquidity buffer of EUR75 million. This follows the
repayment of delayed coupon and applicable penalties, early
redemption of part of the backed senior secured notes principal and
the full ICO-backed loan, and payment of transaction costs linked
to the recapitalisation (including OID, early bird lock-up, and
consent solicitation voting fees).
During this review, Moody's will focus on (i) the centralized cash
level at holding level, excluding cash tied up in joint ventures,
and liquidity management in conjunction with financial policies to
manage working capital volatility and finance investments in
concession joint ventures; (ii) the operating performance in 2024
and the new management's operating strategy for 2025 and beyond to
evaluate the potential track record of stable and solid earnings
generation; and (iii) the sustainability of OHLA's new capital
structure in the medium to long term.
OHLA's credit profile remains supported by (1) its sizeable and
diversified short-term construction backlog focusing on relatively
resilient public infrastructure projects; (2) more disciplined
operating approach focused on smaller and less complex projects
(73% of the backlog consist of projects under EUR150 million) that
are more profitable; (3) controlled and centralized bidding process
in core geographies with proven business acumen; and (4) reduced
leverage and improved liquidity as a result of the restructuring.
Conversely, OHLA's ratings are constrained by (1) soft and
uncertain macroeconomic environment weighing on the generally
cyclical construction industry, (2) history of aggressive financial
policy and unsustainable capital structure despite improved
operational performance, (3) limited visibility on the centralised
cash position, and (4) limited visibility on the future operating
strategy and financial policy under new management.
STRUCTURAL CONSIDERATIONS
Following completion of the recapitalisation, OHLA's capital
structure now consists of EUR328 million outstanding backed senior
secured notes due in December 2029, issued by OHL Operaciones
S.A.U., an indirect wholly subsidiary of OHLA. The backed senior
secured notes are rated in line with the CFR. OHLA's PDR of Caa2-PD
remains in line with its CFR, reflecting Moody's standards
assumption of 50% family recovery rate.
The backed senior secured notes are guaranteed by operating
subsidiaries that generate at least 90% of the group's revenue.
However, the security package is limited to customary pledge over
shares in certain subsidiaries, certain bank accounts, and
intercompany receivables. Hence, in Moody's loss given default
(LGD) waterfall, they rank pari passu with unsecured trade
payables, short-term lease liabilities, and other bank debt at the
level of the operating entities.
LIQUIDITY
Moody's expects OHLA to maintain an adequate liquidity. As of
September 2024, the company had around EUR198 million in cash on
hand, excluding EUR264 million in cash held at joint ventures and
associates, which is not necessarily immediately available for
liquidity purposes. While the company has access to net cash
proceeds of EUR75 million, which partially alleviates reliance on
disposal proceeds from Canalejas and the service business disposal,
and faces no near-term maturities post restructuring, prudent
working capital management and investment in concession joint
ventures will be crucial to sustaining an adequate liquidity.
OHLA does not have access to committed revolving credit line, which
could pressure liquidity if operating performance deteriorates in
the medium to long term. However, the company is permitted to incur
up to EUR50 million in indebtedness for working capital purposes,
through revolving credit lines. In addition, OHLA's new
shareholders committed to up to EUR50 million in subordinated
convertible notes with a six-year maturity to support liquidity.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE CONSIDERATIONS
Governance considerations are material to the rating action, given
the completed recapitalisation plan that has resulted in a more
sustainable capital structure. However, the company's aggressive
financial policies, evidenced by two recent distressed exchanges in
2021 and 2024, and the shift in the board of directors' composition
to a majority proprietary directors following entry of new
shareholders introduce risks related to future operating strategy
and financial policies.
Given the review for upgrade, downward ratings pressure is
currently not expected, but Moody's could confirm OHLA's ratings
should the company's liquidity deteriorates or if there's little
visibility into the company's operating performance and financial
policies.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Construction
published in September 2021.
CORPORATE PROFILE
Headquartered in Madrid, Obrascon Huarte Lain S.A. (OHLA) is one of
Spain's leading construction groups. The group's activities include
its core engineering and construction business (including the
industrial division); and the development of concessions in
identified core markets in Europe, North America and Latin America.
In the last twelve months ending September 2024, OHLA generated
around EUR3.5 billion in sales and EUR129 million in
company-reported EBITDA (both excluding the Services division).
Following the completion of the recapitalisation plan in February
2025, OHLA's principal shareholders are the Mexican Amodio family
(21% stake) along with José Elias Navarro (10% stake) and Andrés
Holzer (8% stake). The remaining shares are in free float, traded
on the Spanish Stock Exchanges.
===========================
U N I T E D K I N G D O M
===========================
ANTS DRILLING: SFP Restructuring Named as Administrators
--------------------------------------------------------
Ants Drilling Services Limited was placed into administration
proceedings in the High Court of Justice Business & Property Courts
in Manchester, Insolvency and Companies List (ChD), Court Number:
CR-2025-MAN-000140, and David Kemp and Richard Hunt of SFP
Restructuring Limited were appointed as administrators on Feb. 18,
2025.
Ants Drilling provides a full drilling service to the landfill and
waste management sector.
Its registered office is at 1 Warehouse W, 3 Western Gateway, Royal
Victoria Docks, London, E16 1BD.
The joint administrators can be reached at:
David Kemp
Richard Hunt
SFP Restructuring Limited
Warehouse W
3 Western Gateway
Royal Victoria Docks
London, E16 1BD
For further details, contact:
David Kemp
Tel: 0207-538-2222
ARTEZZAN RESTAURANTS: KBL Advisory Named as Administrators
----------------------------------------------------------
Artezzan Restaurants Limited was placed into administration
proceedings in the High Court of Justice Business and Property
Courts in Manchester, Insolvency & Companies List (ChD), Court
Number: CR-2025-MAN-000213, and Richard Cole and Steve Kenny of KBL
Advisory Limited, were appointed as administrators on Feb. 18,
2025.
Artezzan Restaurants, trading as Artezzan Restaurant & Bar,
Chester, is a licensed restaurant.
Its registered office and principal trading is at Unit 4, 33 Pepper
Street, Chester, Cheshire, CH1 1DF.
The joint administrators can be reached at:
Richard Cole
Steve Kenny
KBL Advisory Limited
Stamford House
Northenden Road Sale
Cheshire, M33 2DH
For further information, contact:
Tel: 0161 637 8100
Email: Jessica.higginson@kbl-advisory.com
Alternative contact: Julie Webster
BEN JOHNSON: Clough Corporate Named as Administrators
-----------------------------------------------------
Ben Johnson Limited was placed into administration proceedings in
the High Court of Justice Business and Property Courts in Leeds,
Insolvency & Companies List (ChD), Court Number:
CR-2025-LDS-000100, and Christopher Wood and Steven George Hodgson
of Clough Corporate Solutions Limited were appointed as
administrators on Feb 14, 2025.
Ben Johnson delivers commercial interior design and fit-out
projects for a huge range of businesses across the North East,
Yorkshire and London.
Its registered office and principal trading address is at 7
Middlethorpe Business Park, Sim Balk Lane, Bishopthorpe, North
Yorkshire, YO23 2BD.
The joint administrators can be reached at:
Christopher Wood
Steven George Hodgson
Clough Corporate Solutions Limited
Vicarage Chambers
9 Park Square East
Leeds, LS1 2LH
For further details, contact:
The Joint Administrators
Email: admin@cloughcs.co.uk
Tel No: 0333-456-0078
Alternative contact: David Paul Hodgson
BLANCHFORD & CO: BDO LLP Named as Administrators
------------------------------------------------
Blanchford & Co.Limited was placed into administration proceedings
in the High Court of Justice, Business and Property Court of
England and Wales, Insolvency and Companies List (ChD), Court
Number: CR-2025-000853, and Timothy Townley and Danny Dartnaill of
BDO LLP were appointed as administrators on Feb. 17, 2025.
Blanchford & Co.'s agents are involved in the sale of timber and
building material. Blanchford's trading name is Blanchford
Building Supplies.
Its registered office and principal trading address is at 59
Windmill Road, Headington, Oxford, OX3 7BS.
The joint administrators can be reached at:
Timothy Townley
Danny Dartnaill
BDO LLP
Thames Tower, Level 12
Station Road,
Reading RG1 1LX
For further details, contact:
Katalin Pongo
Email: BRCMTLondonandSouthEast@bdo.co.uk
CONDER GREEN: FRP Advisory Named as Administrators
--------------------------------------------------
Paul Hurst & Paul Evans Hurst, trading as The Mill Inn at Conder
Green, was placed into administration proceedings in the High Court
of Justice Business and Property Courts in Leeds, Court Number:
CR-2025-LDS-000159, and Anthony Collier and Steven Williams of FRP
Advisory Trading Limited were appointed as administrators on Feb.
18, 2025.
Paul Hurst & Paul Evans is into the hotel/restaurant business.
Its registered office is at Old Bridge Lane, Poulton-Le-Fylde, FY6
9BT to be changed to C/O FRP Advisory Trading Limited, 4th Floor
Abbey House, 32 Booth Street, Manchester, M2 4AB.
Its principal trading address is at Old Bridge Lane,
Poulton-Le-Fylde FY6 9BT.
The joint administrators can be reached at:
Anthony Collier
Steven Williams
FRP Advisory Trading Limited
4th Floor, Abbey House, Booth Street
Manchester, M2 4AB
For further details, contact:
The Joint Administrators
Tel: 0161 833 3344
Alternative contact:
Ben Smith
Email: MillAtConder@frpadvisory.com
CONSTANT HIGHWAYS: MHA Named as Administrators
----------------------------------------------
Constant Highways Limited was placed into administration
proceedings in the High Court of Justice, Court Number:
CR-2025-000923, and Steven Illes and James Alexander Snowdon of MHA
were appointed as administrators on Feb. 17, 2025.
Constant Highways is involved in the construction of roads and
motorways.
Its registered office is at Wembdon Business Centre Bower Road,
Smeeth, Ashford, TN25 6SZ.
The joint administrators can be reached at:
Steven Illes
James Alexander Snowdon
MHA
6th Floor, 2 London Wall Place
London, EC2Y 5AU
For further details, contact:
Kyra Harford
Tel No: 0207 429 4100
Email: Kyra.Harford@mha.co.uk
CUTTING ROOM: SFP Restructuring Named as Administrators
-------------------------------------------------------
Cutting Room Limited was placed into administration proceedings in
the Business and Property Courts in Manchester, Insolvency &
Companies List (ChD), Court Number: CR-2025-000214, and David Kemp
and Richard Hunt of SFP Restructuring Limited were appointed as
administrators on Feb. 18, 2025.
Cutting Room engaged in hairdressing and other beauty treatments.
Its registered office is at 9 Queen Anne Street, London, W1G 9HW
(in the process of being changed to 1st Floor, 21 Station Road,
Watford, Herts, WD17 1AP).
Its principal trading address is at 9 Queen Anne Street, London,
W1G 9HW.
The joint administrators can be reached at:
David Kemp
Richard Hunt
SFP Restructuring Limited
Warehouse W, 3 Western Gateway
Royal Victoria Docks
London, E16 1BD
For further details, contact:
David Kemp
Tel No: 0207-538-2222
EAST 45: Leonard Curtis Named as Administrators
-----------------------------------------------
East 45 Ltd was placed into administration proceedings in the High
Court of Justice Business and Property Courts in Manchester,
Insolvency & Companies List (ChD), Court Number:
CR-2025-MAN-000141, and Mike Dillon and Hilary Pascoe of Leonard
Curtis were appointed as administrators on Feb. 18, 2025.
East 45 is a licensed bar and restaurant. East 45's trading name
is The Pen and Pencil.
Its registered office and principal trading address is at Fourways
House, 57 Hilton St, Manchester, M1 2EJ.
The joint administrators can be reached at:
Mike Dillon
Hilary Pascoe
Leonard Curtis
Riverside House
Irwell Street
Manchester M3 5EN
For further details, contact:
The Joint Administrators
Tel: 0161 831 9999
Email: recovery@leonardcurtis.co.uk
Alternative contact: Nicola Carlton
ENINCO TRADING: Alvarez & Marsal Named as Administrators
--------------------------------------------------------
Eninco Trading Services Ltd was placed into administration
proceedings in the High Court of Justice, Business & Property
Courts of England & Wales, Insolvency & Companies List (ChD), No
CR-2025-001097, and Carl Bowles and Robert Croxen of Alvarez &
Marsal Europe LLP were appointed as administrators on Feb. 18,
2025.
Eninco Trading engaged in the wholesale of petroleum and petroleum
products.
Its registered office and principal trading is at Eninco Services
Ltd, at Room 312 The Linen Hall, 162/168 Regent Street, London, W1B
5TB.
The joint administrators can be reached at:
Carl Bowles
Robert Croxen
Alvarez & Marsal Europe LLP
Suite 3 Regency House
91 Western Road
Brighton BN1 2NW
Tel No: +44(0)20-7715-5200
For further information, contact:
Minhaj Miah
Alvarez & Marsal Europe LLP
Tel No: (+44)207-715-5223
Email: INS_ENITSL@alvarezandmarsal.com
MAIZECOR FOODS: Interpath Advisory Named as Administrators
----------------------------------------------------------
Maizecor Foods Limited was placed into administration proceedings
in the High Court of Justice Business and Property Court in Leeds
Insolvency and Companies List (ChD) No CR-2025-LDS-000158, and
Richard John Harrison of Interpath Ltd was appointed as
administrators on Feb. 17, 2025.
Maizecor Foods, fka Mawlaw 122 Limited, is into grain milling.
Its registered office and principal trading address is at 141
Wincolmlee, Hull, East Yorkshire, HU2 0HB.
The joint administrators can be reached at:
Howard Smith
Richard John Harrison
Interpath Advisory
Interpath Ltd
10th Floor, One Marsden Street
Manchester M2 1HW
For further details, contact:
Adam Bolton
Tel No: 0161 529 9004
MELSIDE PROPERTIES: FRP Advisory Named as Administrators
--------------------------------------------------------
Melside Properties Limited was placed into administration
proceedings in the High Court of Justice Business and Property
Courts in Newcastle upon Tyne, Court Number: CR-2025-NCL-000034,
and Andrew David Haslam and Antonya Allison of FRP Advisory Trading
Limited were appointed as administrators on Feb. 20, 2025.
Melside Properties is into property development.
Its registered office is c/o Azets, at Bulman House, Regent Centre,
Gosforth Newcastle Upon Tyne, NE3 3LS to be changed to Suite 5,
Bulman House, Regent Centre, Gosforth, Newcastle Upon Tyne, NE3
3LS.
Its principal trading address is at Bulman House, Regent Centre,
Gosforth, Newcastle Upon Tyne, NE3 3LS.
The joint administrators can be reached at:
Andrew David Haslam
Antonya Allison
FRP Advisory Trading Limited
Suite 5, 2nd Floor, Bulman House
Regent Centre, Gosforth
Newcastle upon Tyne, NE3 3LS
For further details, please contact:
The Joint Administrators
Tel No: 0191 605 3737
Alternative contact:
Sarah Dorkin
Email: cp.newcastle@frpadvisory.com
MERLIN ENTERTAINMENTS: S&P Withdraws 'B-' ICR on Notes Redemption
-----------------------------------------------------------------
S&P Global Ratings withdrew its long-term issuer credit rating on
Merlin Entertainments Ltd., a subsidiary of theme park operator
Motion Midco Ltd. S&P also withdrew its rating on its $400 million
senior secured notes, due 2026, which have been redeemed in full
following a refinancing through the issuance of $410 million senior
secured notes maturing in 2032.
S&P said, "Our ratings on Motion Midco Ltd., the parent company of
the group, and the group's outstanding debt are unaffected. The
issuer credit rating remains 'B-' and the outlook is stable; the
outstanding senior secured debt is rated 'B', with a recovery
rating of '2' and a recovery estimate of 70%; and the subordinated
notes maturing in 2027 are rated 'CCC', with a recovery rating of
'6' and a recovery estimate of 0%."
SHARD RIVERSIDE: FRP Advisory Named as Administrators
-----------------------------------------------------
Paul Hurst & Paul Evans Hurst was placed into administration
proceedings in the High Court of Justice Business and Property
Courts in Leeds, Court Number: CR-2025-LDS-000157, and Anthony
Collier and Steven Williams of FRP Advisory Trading Limited were
appointed as administrators on Feb. 18, 2025.
Paul Hurst & Paul Evans, trading as The Shard Riverside Inn,
operates a hotel/restaurant business.
Its registered office is at Old Bridge Lane, Poulton-Le-Fylde, FY6
9BT to be changed to C/O FRP Advisory Trading Limited, at 4th Floor
Abbey House, 32 Booth Street, Manchester, M2 4AB.
Its principal trading address is at Old Bridge Lane,
Poulton-Le-Fylde FY6 9BT.
The joint administrators can be reached at:
Anthony Collier
Steven Williams
FRP Advisory Trading Limited
4th Floor, Abbey House, Booth Street
Manchester, M2 4AB
For further details, contact:
The Joint Administrators
Tel: 0161 833 3344
Alternative contact:
Ben Smith
Email: MillAtConder@frpadvisory.com
STILED HOLDINGS: Azets Holdings Named as Administrators
-------------------------------------------------------
Stiled Holdings Ltd was placed into administration proceedings in
the High Court of Justice, Court Number: CR-2025-000099, and
Jonathan Mark Amor and Richard Oddy of Azets Holdings Limited were
appointed as administrators on Feb. 14, 2025.
Stiled Holdings is into the retail of furniture, lighting and
similar specialised stores.
Its registered office and principal trading address is at Unit 1
The Courtyards, Victoria Road, Leeds, West Yorkshire, LS14 2LB.
The joint administrators can be reached at:
Jonathan Mark Amor
Richard Oddy
Azets Holdings Limited
12 King Street
Leeds, LS1 2HL
For further details, contact:
The Joint Administrators
Tel No: 0161 245 1000
Alternative contact:
Anna MacLeod
Email: Anna.McLeod@Azets.co.uk
VICTORIA PLC: Moody's Lowers CFR to Caa1, Outlook Negative
----------------------------------------------------------
Moody's Ratings has downgraded the ratings of Victoria plc
(Victoria or the company), including its long term corporate family
rating to Caa1 from B3; its probability of default rating to
Caa1-PD from B3-PD; and to Caa1 from B3 the ratings of its EUR500
million and EUR250 million backed senior secured notes due 2026 and
2028 respectively. The outlook remains negative.
RATINGS RATIONALE
Moody's downgrades of the CFR to Caa1 from B3 is driven by
increased refinancing risk in respect of the approaching February
2026 and August 2026 maturity of the company's GBP150 million
revolving credit facility (RCF) and the EUR500 million backed
senior secured notes respectively.
Moody's expects the company's operating performance to improve in
the second half of the fiscal year ending in March 2025 and during
fiscal 2026 as a result of recovering demand and significant cost
saving initiatives. However, significant uncertainty remains around
the operating performance recovery trajectory, which could be
derailed by persistent weak consumer confidence and competitive
pressures. In Moody's base case, Moody's expects the company's
Moody's-adjusted debt/EBITDA leverage to improve to 7.3x by the end
of fiscal 2026 from 9.9x as of the last twelve-month period ending
in September 2024. However, this still high leverage - and Moody's
expectations of negative free cash generation - indicates that the
refinancing of the senior secured notes in a timely and
cost-effective manner is uncertain at this point in time.
In the context of borrowings of GBP984 million as of the end of
September 2024 (including IFRS16 lease liabilities of GBP172
million), the company's current market capitalisation of around
GBP140 million is very modest. This adds further uncertainty to the
sustainability of the current capital structure, in Moody's views.
Besides high refinancing risk, Victoria's Caa1 CFR is also
constrained by the company's (1) exposure to a degree of
integration risk following a significant number of acquisitions
completed over the last few years, which is mitigated by
management's proven track record to integrate in the past; (2)
activities in mature markets with competitive pressures; (3) sale
of consumer discretionary items correlated with the economic cycle;
and, (4) exposure to volatile raw material prices and foreign
currency movements.
The rating is supported by the company's (1) leading positions
within the fragmented European soft flooring and ceramic tiles
markets; (2) focus on independent retail channels with greater
customer diversity and pricing power; (3) low exposure to the new
construction segment; and (4) flexible cost structure.
ESG CONSIDERATIONS
Governance is a key driver for rating action reflecting the need to
address the 2026 debt maturities, with the RCF becoming current at
this moment in time, as well as the uncertainty around the timing
and magnitude of recovery of the company's operating performance.
LIQUIDITY
The company's liquidity is weak. Victoria had approximately GBP95
million of cash on the balance sheet as of the end of September
2024. Moody's expects Moody's-adjusted free cash flow to be weak
over the next 12 to 18 months even before factoring in potentially
higher borrowing costs if and when the EUR500 million backed senior
secured notes due in August 2026 are refinanced. The company's
GBP150 million revolving credit facility (RCF), which was drawn by
GBP15 million at the end of September, matures in February 2026.
Additionally, the super senior RCF has a springing net leverage
covenant that is tested when it is drawn by 40%, which Moody's do
not expect the company to currently satisfy if tested during the
period that the facility is still available.
STRUCTURAL CONSIDERATIONS
The company's backed senior secured notes are rated Caa1, in line
with the Caa1 CFR. The super senior RCF ranks ahead of the backed
senior secured notes. However, the notes are rated in line with the
CFR because the RCF is relatively small compared to the notes.
There is also other debt within the company's financial structure,
largely relating to unsecured local facilities and leases. Security
largely comprises share pledges and a debenture over certain
assets, and guarantees are provided from material companies
representing at least 80% of turnover, EBITDA and gross assets.
RATING OUTLOOK
The negative rating outlook reflects the uncertainty associated
with the recovery of operating performance, the timing and terms of
Victoria's debt refinancing, and the potential sustainability of
the post-transaction capital structure and cost of debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The negative outlook indicates that an upgrade is unlikely over the
next 12-18 months. However, the ratings could be upgraded if
Victoria successfully refinances its upcoming maturities such that
(i) Moody's-adjusted debt/EBITDA leverage is sustainably below
6.25x, (ii) Moody's-adjusted EBITA / interest is sustainably above
1.0x, (iii) its free cash flow becomes positive on a sustainable
basis, and (iv) the company's liquidity is adequate.
Any deterioration in liquidity or failure to refinance its upcoming
maturities could lead to a downgrade, as could a likelihood of
restructuring resulting in potentially higher losses. The ratings
are also likely to be downgraded if Moody's-adjusted free cash flow
generation and the company's liquidity profile deteriorate below
the levels in Moody's base case.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Consumer
Durables published in September 2021.
COMPANY PROFILE
Victoria plc was founded in 1895 in the United Kingdom, and is an
international designer, manufacturer and distributor of flooring
products across carpets, ceramic tiles, underlay, luxury vinyl
tile, artificial grass and flooring accessories. Victoria is listed
on AIM in London with a market capitalisation of approximately
GBP140 million as of time of this publication. The company benefits
from good geographic diversification, with more than 70% of its
revenue being generated from outside the UK. For the financial year
ending in March 2024, the company generated GBP1,257 million of
sales and GBP161 million of reported underlying EBITDA.
*********
S U B S C R I P T I O N I N F O R M A T I O N
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