/raid1/www/Hosts/bankrupt/TCREUR

/raid1/www/Hosts/bankrupt/TCREUR_Public/250328.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 Friday, March 28, 2025, Vol. 26, No. 63 Headlines A R M E N I A CUBE INVEST: Fitch Publishes 'B-' Long-Term IDR, Outlook Stable F R A N C E GETLINK S.E.: Fitch Rates EUR600M Green Bond Issuance 'BB+(EXP)' GETLINK: S&P Upgrades ICR to 'BB+' on Lower Indebtedness NOVA ORSAY: S&P Places 'B' Long-Term ICR on CreditWatch Positive I R E L A N D ARES EUROPEAN XII: Fitch Affirms 'B-sf' Rating on Class F Notes CVC CORDATUS XXV-A: Fitch Assigns B-(EXP)sf Rating to Cl. F-R Notes CVC CORDATUS XXV-A: S&P Assigns Prelim B- (sf) Rating to F-R Notes I T A L Y GOLDEN GOOSE SPA: S&P Ups ICR to 'BB-' on Sustained Low Leverage L U X E M B O U R G LOARRE INVESTMENTS: Fitch Affirms 'BB' Rating on EUR825MM Sr. Notes MONITCHEM HOLDCO 2: S&P Affirms 'B' Rating, Alters Outlook to Neg. R U S S I A ASAKABANK JSC: Fitch Affirms 'BB-' Long-Term IDR, Outlook Stable T U R K E Y ARCELIK: S&P Downgrades Long-Term ICR to 'BB-', Outlook Stable YAPI KREDI: Fitch Affirms 'BB-' Long-Term IDR, Outlook Stable U K R A I N E INTERPIPE HOLDINGS: S&P Reinstates 'CCC' ICR, Outlook Negative U N I T E D K I N G D O M BEACONSOFT LIMITED: FRP Advisory Named as Joint Administrators LEDWELL PLASTICS: FRP Advisory Named as Joint Administrators METRO BANK: Fitch Assigns 'CCC+' Final Rating to GBP250MM AT1 Notes NEW CHAPTER: FTS Recovery Named as Joint Administrators POLARIS 2024-1: S&P Affirms 'BB+ (sf)' Rating on F-Dfrd Notes WINTERSHALL DEA 2: Fitch Affirms 'BB' Rating on Hybrid Notes X X X X X X X X [] BOOK REVIEW: Taking Charge - - - - - ============= A R M E N I A ============= CUBE INVEST: Fitch Publishes 'B-' Long-Term IDR, Outlook Stable --------------------------------------------------------------- Fitch Ratings has published Cube Invest CJSC's Long-Term Issuer Default Rating (IDR) of 'B-' with a Stable Outlook and its Short-Term IDR of 'B'. Key Rating Drivers Cube's ratings are based on its standalone credit profile and are constrained by its still limited franchise, only basic corporate governance, high exposure to market risk, and business concentrations. The ratings also reflect recently strong profitability and the ongoing diversification of its revenue, as well as adequate leverage and a liquid balance sheet. Diminishing Economic Boost: Cube, along with the broader Armenian financial sector, continues to benefit from the positive spillover effects of the Russian-Ukrainian conflict, with extraordinary inflows of financial and human capital into Armenia since 2022. These favourable economic conditions have been strongly supportive of the sector but are gradually diminishing, and Fitch anticipates the positive momentum to largely fade by end-2026. As a result, brokers' recent sizable trading and foreign-exchange (FX) gains are unlikely to be sustainable. In the longer term, some effects are likely to persist, but in a much less pronounced manner. Small but Fast-Growing Franchise: Business growth has been rapid since 2022. Cube focuses on securities and FX brokerage for around 300 domestic institutional clients. Despite rapidly growing volumes, which saw revenue reach ADM9.3 billion in 1Q24 - equivalent to USD24 million - the company remains small relative to Armenian banks and the domestic financial system overall. To strengthen its competitive position, Cube aims to widen its client base and product offering. Weak Corporate Governance: As a small company, Cube lacks a formalised corporate governance framework. Its two shareholders, who each own 50% of the company's share capital, hold key decision-making roles. This exposes Cube to key person risk, particularly in view of its weak oversight functions. Risk policies, although formalised, could be overridden opportunistically, reflecting Cube's very high risk appetite. Significant Market Risk: Through its proprietary securities book, Cube is exposed to significant valuation risk with many fairly illiquid proprietary positions. The company also carries considerable interest rate risk via its long duration securities book, with an average remaining tenor of 8.7 years at end-2024. It also had a sizable net open FX position equivalent to 0.8x capital at end-2024, (being short in Armenian drams), which management deems strategic. Concentrated Balance Sheet: Due to several large transactions, Cube's balance sheet is concentrated, both in asset exposure and funding. Positively, Cube's core assets are liquid, largely relating to Armenian government bonds. However, the company opportunistically takes sizable positions in instruments with limited liquidity, indicating its high tolerance to risk. So far, the company has been able to quickly and profitably close these positions. Volatile Performance: Having been loss-making in 2021 and 2022, Cube's management decided to reshape the business model by expanding intermediary services, including FX products. Armenia's favourable operating environment, with significantly increased capital flows into and through the country, has boosted Cube's revenue in 2023 and 2024, leading to exceptionally strong profitability. However, Fitch expects the positive effect to gradually reduce in 2025 and 2026. Cube's ability to preserve an operationally profitable business model, while replacing very lucrative bulky transactions of a one-off nature with sustainable and more diversified revenue streams, will be key to its assessment of the company's creditworthiness. Adequate Capitalisation: Cube has retained part of the extraordinary profitability generated since late 2022, which led to a sharp increase in its capital base. Despite sizable dividend payouts and increasing senior management compensation, Cube maintains a comfortable cushion above its 12% regulatory requirement for equity-to-risk weighted assets. This ratio was 15.6% at end-2024 and Fitch expects the company to maintain it above 14%, in line with the internal limit indicated by management. Loans to related parties, which amounted to 11% of capital at end-1Q24, were all repaid in 2Q24 and have not been renewed since. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Indications of impairment in Cube's business model viability, such as a significant increase in regulatory risk, revenue concentration, substantial illiquid or impaired assets, or the realisation of market risks, particularly interest rate risk - Increase of tangible leverage to above 10x or approaching the statutory capital requirement of 12%, or any indirect deterioration of solvency, for example as a result of a surge in receivables from related parties or asset impairment Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - A rating upgrade would require material changes in the business profile and oversight structure, which Fitch does not expect in the near term. These would include significant growth and diversification of Cube's franchise, coupled with a meaningful improvement in corporate governance and a pronounced decrease in risk appetite. ADJUSTMENTS The sector risk operating environment score of 'b+' has been assigned below the implied score of 'bb' due to the following adjustment reason: regulatory and legal framework (negative). The asset quality score of 'b-' has been assigned below the implied score of 'bb' due to the following adjustment reason: risk profile and business model (negative). The earnings & profitability score of 'b' has been assigned below the implied score of 'bb' due to the following adjustment reason: earnings stability (negative). The capitalisation & leverage score of 'b' has been assigned below the implied score of 'bb' due to the following adjustment reason: risk profile and business model (negative). The funding, liquidity & coverage score of 'b-' has been assigned below the implied score of 'bb' due to the following adjustment reason: business model/funding market convention (negative). Date of Relevant Committee 06 March 2025 ESG Considerations Cube has an ESG Relevance Score of '4' for management strategy. This reflects its opportunistic and reactive strategy, which is partly driven by a very volatile operating environment, contributing to fluctuations in its performance. This has a moderately negative impact on Cube's credit profile and is relevant to the ratings in conjunction with other factors. Cube has an ESG Relevance Score of '4' for governance structure. This reflects high key-person risk due to significant dependence on the two shareholders for decision-making. This has a moderately negative impact on Cube's credit profile and is relevant to the rating in conjunction with other factors. Apart from listed above, the highest level of ESG credit relevance is a score of '3'. 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 ----------- ------ Cube Invest CJSC LT IDR B- Publish ST IDR B Publish =========== F R A N C E =========== GETLINK S.E.: Fitch Rates EUR600M Green Bond Issuance 'BB+(EXP)' ---------------------------------------------------------------- Fitch Ratings has assigned Getlink S.E. (GET) proposed EUR600 million green bond issuance a 'BB+(EXP)' expected rating with a Stable Outlook. The proceeds from the new issuance, together with the use of available cash, will refinance the existing EUR850 million green bond (BB/Positive) due in October 2025. The final rating is contingent upon the receipt of final documentation materially conforming to the information already received. RATING RATIONALE GET is the ultimate HoldCo of Channel Link Enterprises Finance Plc (CLEF), which is a ring-fenced vehicle secured by Fixed Link's (FL or Eurotunnel) activities. The group includes ElecLink and Europorte, but its consolidated credit profile of 'BBB' is largely driven by CLEF, which accounts for the majority of group's stable cash flow generation. The BB+(EXP)' rating on GET's proposed notes reflects the 'BBB' consolidated credit assessment, which is then notched down by two notches to reflect the restricted access it has to cash flows generated by CLEF. The reduction in GET's debt size to EUR600 million from EUR850 million reduces the refinancing risk at HoldCo, leading to a reduction in the downward notching from GET's consolidated credit profile to two notches from three. KEY RATING DRIVERS Revenue Risk - Volume - High Midrange Mixed Traffic Performance Traffic volume have proved resilient through economic recessions for Eurostar passengers and car shuttle volumes, while truck shuttle volumes showed significant volatility (-46% in 2007-2009), partly because of the 2008 tunnel fire. Eurotunnel differentiates itself from competing ferry operators in the Dover Strait and commands a premium on ferry fares, due to the speed, ease and reliability of its shuttle service. Nonetheless, competition and exposure to discretionary demand constrain the volume assessment. Revenue Risk - Price - Midrange Some Price Flexibility Shuttle service fares are flexible and can be adapted to market conditions. Historically, this has helped Eurotunnel to quickly recover volume loss on the truck, and to a lesser extent, car businesses. The railway usage contract regulates railway network fares, preventing a full pass-through of inflation into tariffs. ElecLink started commercial operations in May 2022, adding revenue diversity to GET's consolidated credit profile. However, in its view, ElecLink's cash flows could be volatile due to its exposure to electricity price risk in the French and UK markets and the possible impact from the profit-sharing mechanism embedded in ElecLink's concession framework. Infrastructure Dev. & Renewal - Midrange Largely Maintenance Capex The lack of formal provisioning for capex under the financing documentation is mitigated by strong UK/French regulatory oversight, Eurotunnel's prudent management policy as tunnel operator and the inclusion of minimum capex in the dividend distribution lock-up covenant calculation. Capex is generally funded with projected cash flows and investments are planned in advance and considering market conditions. In its view, this provides some flexibility in delivering the capex programme. Debt Structure - Weaker Single Bullet Debt with Refinancing Risk - Debt Structure: Weaker (Getlink) The proposed EUR600 million five-year fixed rate bullet bond will be used to refinance the existing EUR850 million bond due in October 2025. Fitch views refinancing risk as reasonably high, due to the deep subordination and use of a single-bullet maturity, mitigated by the long concession tenor of the stable and strategically important Eurotunnel asset linking France and the UK. The removal of the 12-month debt service reserve account (DSRA) is credit negative, although somewhat mitigated by the unrestricted access GET has to ElecLink cash flows. The protective features of the consolidated-based lock-up and incurrence covenants are diluted by the possibility of raising prior-ranking non-recourse debt at subsidiaries and the presence of sizeable baskets for additional debt and dividends. Structural Subordination - Issuer Structure GET is not a single-purpose vehicle as it is invested in multiple businesses (Fixed Link, Europorte, ElecLink) and its debt is structurally subordinated to the project finance-type debt at CLEF. There is strong structural protection under CLEF's issuer-borrower structure, including lock-up provisions potentially triggering a cash sweep and additional indebtedness clauses subject to rating tests, which limits debt being pushed down from the holding company. These factors drive its rating approach and together with the 'Weaker' debt structure assessment explain the two-notch difference between GET's ratings and the consolidated profile, the latter largely driven by Eurotunnel's core activities. The key rating drivers of the consolidated profile are in line with CLEF, as it dominates the consolidated group's EBITDA generation. Financial Profile The Fitch rating case (FRC) incorporates conservative assumptions for traffic long term growth, resulting from management's strategy to keep high-yields in a muted UK economic environment. Fitch assumes car shuttles to touch 2019 levels by 2041 and truck shuttles by 2047. After recovery, Fitch assumes volumes will grow below the blended UK-France GDP growth rate. Eurostar volumes follow a fraction of expected European GDP growth. Fitch projects the shuttle yields to remain well above 2019, backed by management's premium price strategy, while the railway network will mechanically follow the fares set by its regulatory framework. Fitch has also stressed the costs of debt for Fixed Link's floating-rate notes and Getlink's green bond. Given these assumptions, CLEF's financial profile provides an average debt service coverage ratio of around 1.5x over the rating horizon. The FRC also assumes a haircut to management's projections on ElecLink revenue, considering the volatile nature of its reference market and the refinancing of GET's outstanding EUR850 million notes, through a new issuance of EUR600 million and the cash available at Getlink HoldCo. PEER GROUP Like High Speed Rail Finance (1) PLC (HS1; A-/Stable), CLEF has exposure to Eurostar. However, CLEF is exposed directly to Eurostar passenger volumes, while HS1 is exposed to the number of train paths, which are inherently less volatile, although ultimately exposed to the same performance drivers. HS1 also benefits from having around 60% of its revenues supported by the UK government via underpinned "availability" payments, ultimately leading to its higher rating. Fitch compares Getlink's notes structural subordination with that of Gatwick Airport Finance plc (GAF; BB/Stable) since their notes are similarly structurally subordinated to cash-flow generation. GAF has full ownership of the underlying asset while GET has a more diversified dividend stream than GAF in the context of higher debt exposure compared with incoming cash flows, justifying the same notching difference from the group consolidated profile. Scandlines ApS (SCL; BBB/Negative) operates sea ferry routes between Denmark and Germany. The rating is supported by high barriers to entry within a captive regional market and by SCL's strong ferry operations on two key point-to-point routes between Denmark and Germany. The average DSCR at 1.7x is higher than CLEF, but CLEF is a stronger and more strategic asset as it provides the shortest route to connect the UK and continental Europe. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade GET - A downgrade of the consolidated group's credit profile would lead to a downgrade of GET. - A material increase of debt at GET or GET's subsidiary levels could be rating negative. - Failure to maintain adequate liquidity at GET's level. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade GET - An upgrade of the consolidated group's credit profile could lead to an upgrade of GET. TRANSACTION SUMMARY GET is about to issue a five-year EUR600 million green bond to refinance its existing EUR850 million bond due in October 2025. 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 ----------- ------ Getlink S.E. Getlink S.E./Senior Secured Debt - Expected Ratings/1 LT EUR 600 mln bond/note LT BB+(EXP) Expected Rating GETLINK: S&P Upgrades ICR to 'BB+' on Lower Indebtedness -------------------------------------------------------- S&P Global Ratings raised its corporate credit and issue-level ratings on France-based Getlink and its EUR850 million green bonds due in October 2025 to 'BB+' from 'BB'. The '4' recovery rating on these bonds remain unchanged. S&P assigned a 'BB+' issue-level and a '3' recovery ratings to Getlink's proposed senior secured green notes of up to EUR600 million due in 2030. S&P also raised the debt ratings on Getlink's subsidiary Channel Link Enterprises Finance PLC (CLEF) to 'BBB+/Stable' from 'BBB/Positive' on solid financial metrics. The stable outlook on Getlink reflects S&P's expectation that Getlink will maintain a prudent and supportive financial policy, calibrating the dividends and managing investments to sustain a weighted-average FFO to debt of about 13% in the next three years. S&P said, "We expect Getlink will be able to sustain a weighted-average FFO to debt of about 13% between 2025 and 2027, thanks to the combination of robust profitability and a prudent financial policy. Getlink's solid profitability is supported by the gradual improvement in Eurotunnel's performance, underpinned by strong fundamentals and a steadily stabilizing market environment. This is notwithstanding short-term headwinds, including intense competition from ferries in the short straits, and volatile market and macroeconomic conditions. In the medium term, we think that Eurotunnel's performance could benefit from the expansion of rail services that we expect in the passenger and freight segments, as well as from Eurotunnel potentially regaining lost market share on the highly competitive short straits route after restrictive regulatory changes for ferries come into force. We expect Eurotunnel's operating cash generation to comfortably fund its planned investments. The improvement in Eurotunnel's performance is reflected in the upgrade of CLEF's unguaranteed debt ratings to 'BBB+/Stable' from 'BBB/Positive'. Although future profit contribution from ElecLink could be affected by the start of a profit-sharing mechanism, resulting in the temporary softening of Getlink's FFO to debt to 11%-12% in 2027, we expect FFO to debt to rebound as the group's EBITDA remains on the positive track supporting weighted average metric to remain close to 13%, which is commensurate with the rating. "The upgrade reflects that we expect Getlink to continue to follow a prudent and supportive financial policy, and that it will manage its investments and dividend payments in the coming years to maintain leverage commensurate with the ratings. Although Getlink's investment budget remains large, the group has been able to find efficiency reserves and flexibility within the management-guided range to balance the needs of its capital-intensive business with robust credit metrics. We understand that Getlink's financial policy will aim to balance an increasing dividend payment to shareholders in the medium term, from EUR298 million (EUR0.55 per share) in 2024, while maintaining credit metrics commensurate with its credit rating. Although the company intends to increase the dividend payments, we view that the intention does not constitute a formal dividend policy, nor a minimum dividend payout, allowing it to carefully calibrate the dividends to ensure an ample level of liquidity readily accessible at Getlink and at the ring-fenced Eurotunnel operations. In our view, dividend payments should remain flexible and dependent on business conditions. "We anticipate that growing profits from Eurotunnel will underpin the group's EBITDA, while ElecLink's contribution declines on natural volatility in electricity prices and the profit-sharing mechanism. We expect Eurotunnel's share in Getlink's EBITDA to be about 75%-80% in 2025 and 2026, and approximately 90% from 2027 onward, mainly because of the normalization of ElecLink's more volatile cash flows through the profit-sharing mechanism starting from 2026. We assume that ElecLink's cash flows will be between EUR130 million-EUR140 million in 2025, about EUR170 million-EUR180 million in 2026, and approximately EUR20 million-EUR25 million in 2027." ElecLink's more volatile cash flows could stabilize at about 5%-10% of Getlink's total EBITDA beyond 2027. This reflects ElecLink's obligation to pay 50% of its revenue to the French and the U.K. electricity networks from the moment it reaches a 13% internal rate of return (IRR), which could be possible in 2027 at the earliest based on our assumptions, subject to several factors that are naturally volatile, including future electricity flows, the spread of electricity prices between France and the U.K., and a spread capture factor that is ultimately influenced by market volatility. S&P said, "Long-term auctions have been beneficial to capture a high spread, but we assume that this could fall in the medium term. We assume that price spreads between France and the U.K. could flatten further after 2030 as new interconnectors are being built, resulting in competing routes to import and export electricity. However, we expect positive long-term business prospects for ElecLink as Europe accelerates its energy transition, with increasing penetration of intermittent renewable energy sources supporting interconnector demand. We do not yet include any potential investments in the new interconnector in our base case, which the group has been considering, because they remain highly uncertain at this stage." Solid cash reserves and the planned reduction of parent-level debt by 30% through the planned refinancing supports Getlink's prudent financial policy and liquidity management. Getlink plans to issue up to EUR600 million senior secured notes due in 2030 and use the proceeds, together with some cash reserves, to fully repay the EUR850 million bonds coming due in October 2025. The group's cash position is EUR1.7 billion as of Dec. 31, 2024, out of which about EUR800 million are readily available for Getlink according to our estimates. This should result in Getlink's gross debt reducing by about 30% at the holding company level. S&P said, "We expect that, even after ElecLink's cash flows normalize, Getlink will maintain ample liquidity reserves thanks to its prudent cash management policies. This includes holding at least one year's debt service at Eurotunnel, in addition to the investments' reserve amount kept within the project ringfence. At the Getlink level, we expect the company to conservatively maintain an additional liquidity buffer of EUR150 million-EUR200 million, considering upcoming payments from ElecLink as part of a profit-sharing mechanism. In our view, this provides Getlink with ample financial flexibility to withstand volatile market conditions and carry out the required investments for the next couple of years without damaging its credit profile." S&P said, "The stable outlook reflects our expectation that Getlink will be able to maintain a 2025-2027 weighted average FFO to debt close to 13%, despite of the reduction of cash flows from ElecLink once it starts to share the profits with the regulators from 2027. In our view, the company will maintain a prudent and supportive financial policy and solid liquidity, supported by increased dividend distributions from Eurotunnel's operations. "We would consider taking a negative rating action if Getlink cannot maintain FFO to debt solidly above 11%. This could happen if, for instance, the company's financial policy becomes more aggressive than we anticipate, or if Eurotunnel's performance is significantly weaker than we expect. The latter could occur if the ramp-up in rail traffic stalls, or if the company loses further market share in truck and car shuttles to ferries, and cost control and yield management does not sufficiently mitigate this. "In our view, an upgrade is unlikely. We expect Getlink will sustain weighted average FFO to debt of about 13% until 2028, therefore we do not envision an upward revision in the next 12-18 months." NOVA ORSAY: S&P Places 'B' Long-Term ICR on CreditWatch Positive ---------------------------------------------------------------- S&P Global Ratings placed the 'B' long-term issuer credit rating on Nova Orsay S.A.S. and the 'B' issue ratings on the senior secured notes on CreditWatch with positive implications. The CreditWatch placement reflects that S&P could upgrade Nova Orsay one or more notches if the transaction takes place as announced and once it has full visibility on the future capital structure and financial policy after the repayment of the notes. Nova Orsay has entered exclusive negotiations to sell its cryogenics business unit to Alfa Laval AB (BBB+/Stable/--) for a total fixed purchase price of EUR800 million on a cash and debt-free basis. Nova Orsay plans to repay the EUR430 million floating rate senior secured notes due 2029 in advance from the sale of its cryogenics business unit, which could result in a material decrease in S&P Global Ratings-adjusted leverage by up to 2.0x from 4.5x expected in 2024. On March 21, 2025, Nova Orsay has entered exclusive negotiations to sell its cryogenics business unit to Alfa Laval for a total fixed purchase price of EUR800 million on a cash and debt-free basis. S&P said, "We expect the transaction to close in the second semester of 2025, pending regulatory approvals. As per the documentation governing the EUR430 million floating rate senior secured notes due 2029, we expect a large portion of the proceeds to be allocated into debt reduction. In line with the company's intention, we expect Nova Orsay to repay the outstanding notes in advance which would result into a material deleverage, as the total S&P Global Ratings-adjust debt will decrease to about EUR300 million in 2025 from about EUR740 expected in 2024 absent any new debt raise." The debt repayment--coupled with a decrease in EBITDA, as per the new business perimeter--could lower S&P Global Ratings-adjusted debt to EBITDA pro forma the transaction by up to 2.0x in 2025 from 4.5x expected in 2024. S&P said, "Operating performance remains strong because we expect improvement in profitability to compensate some softening in demand in cyclical end markets, intensified by the geopolitical uncertainty. We expect Nova Orsay's profitability to improve and the EBITDA margin to reach about 7% in 2024 and to continue to remain at similar levels in 2025. The group benefits from a better absorption of fixed costs and an increasing share of after-market activities and other related services, which we understand come with a higher margin. The high level of backlog provides visibility of future earnings as much of the contracts are already secured at more favorable gross margin, reflecting less inflationary pressure and favourable pricing for the business evolution. At the same time, we expect a softening in demand for some of the most cyclical end-markets where Nova Orsay has exposures, such as the automotive and logistics. As such, we expect revenue to slightly contract in 2024 and organic growth to remain subdued in 2025. Although demand is softening, we think that higher profitability will enable moderate earnings growth in 2025 compared to 2024. "The final terms and conditions of the deal, as well as visibility on the future capital structure and financial policy will be key factors for an upgrade. We understand that the negotiations between the two parties are concluded, and only regulatory approvals are pending before the transaction closes. We expect the deal to become effective in the second half of 2025, although we cannot exclude changes to the timeline and final terms of conditions. At the same time, after the repayment of the notes, we expect the company to set up a new capital structure for which there is limited visibility at this stage. We think that the use of the proceeds from the business unit sale exceeding the repayment of the notes remains another key factor that will influence the group's credit quality in the next months. Given the presence of financial sponsor entities in the share's capital, we cannot exclude upstreaming of dividend or a more aggressive stance toward mergers and acquisitions (M&A) that could lower the amount of debt reduction linked with the asset disposal or a subsequent releveraging event. "The CreditWatch placement reflects that we could upgrade Nova Orsay by one notch or more if the transaction takes place as announced and once, we have full visibility on the future capital structure and financial policy after the repayment of the notes. The CreditWatch placement with positive implications also reflects our expectations of a lower leverage going. "Conversely, we could affirm the rating if the deal does not take place and/or there is a meaningful deviation of terms and conditions. We could also revise the CreditWatch placement with positive implications if the operating performance deviates from our base case or if the company decides to aggressively releverage the business or take a financial policy more detrimental to creditors. "We aim to resolve the CreditWatch status in the next three to six months once we have more clarity on the use of the disposal proceeds, including beyond the repayments of the Notes and visibility about the future capital structure." ============= I R E L A N D ============= ARES EUROPEAN XII: Fitch Affirms 'B-sf' Rating on Class F Notes --------------------------------------------------------------- Fitch Ratings has upgraded Ares European CLO XII DAC's class B-1-R to C-R notes and affirmed the rest. The Outlooks for all notes are Stable. Entity/Debt Rating Prior ----------- ------ ----- Ares European CLO XII DAC A-R XS2391578155 LT AAAsf Affirmed AAAsf B-1-R XS2391578742 LT AA+sf Upgrade AAsf B-2-R XS2391579559 LT AA+sf Upgrade AAsf C-R XS2391580052 LT A+sf Upgrade Asf D-R XS2391580649 LT BBBsf Affirmed BBBsf E XS2034052865 LT BB-sf Affirmed BB-sf F XS2034054135 LT B-sf Affirmed B-sf Transaction Summary Ares European CLO XII DAC is a cash flow CLO comprising mostly senior secured obligations. The transaction closed in September 2019 and the class A, B (divided into B-1 and B-2), C and D notes were refinanced in October 2021. The transaction is actively managed by Ares European Loan Management LLP and exited its reinvestment period in April 2024. The transaction is currently passing all tests. KEY RATING DRIVERS Stable Asset Performance: Since Fitch's last rating action in May 2024, the portfolio's performance has been stable. According to the latest trustee report dated 6 February 2025, the transaction was passing all its collateral quality and portfolio profile tests. The transaction is currently 0.25% below target par (calculated as the current par difference over the original target par). Exposure to assets with a Fitch-derived rating of 'CCC+' and below is 5.9%, according to the trustee, versus a limit of 7.5%. The Fitch-calculated exposure to assets with a Fitch-derived rating of 'CCC+' and below is 5.5%, due to recent downgrades and changes in the portfolio. Partly Deleveraging Transaction: The transaction has started to repay some of its class A-R notes with EUR16.4 million paid down since the last review, and a further EUR41.5 million used for asset purchases. This repayment of the class A-R notes has increased credit enhancement for the remaining notes. This supports the upgrades of the class B-1-R, B-2-R and class C-R notes. Large Cushion Supports Stable Outlooks: All notes have large default-rate buffers to support their ratings and should be capable of absorbing further defaults in the portfolio. The notes have sufficient credit protection to withstand potential deterioration in the credit quality of the portfolio at their higher ratings. 'B'/'B-' Portfolio: Fitch assesses the average credit quality of the underlying obligors at 'B'/'B-'. The weighted average rating factor (WARF) of the current portfolio is 25.9 as calculated by Fitch under its latest criteria. About 14% of the portfolio is currently on Negative Outlook. High Recovery Expectations: Senior secured obligations comprise 99.3% of the portfolio. Fitch views the recovery prospects for these assets as more favourable than for second-lien, unsecured and mezzanine assets. The Fitch-calculated weighted average recovery rate (WARR) of the current portfolio is 61.5%. Diversified Portfolio: The portfolio is well-diversified across obligors, countries and industries. The top 10 obligor concentration, as calculated by Fitch, is 12.3%, and no obligor represents more than 1.5% of the portfolio balance. Exposure to the three-largest Fitch-defined industries is 31% as calculated by the trustee. Fixed-rate assets as reported by the trustee are at 6.1% versus a limit of 10%. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade Based on the current portfolio, downgrades may occur if the loss expectation is larger than initially assumed, due to unexpectedly high levels of default and portfolio deterioration. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade 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 Fitch has checked the consistency and plausibility of the information it has received about the performance of the asset pool and the transaction. Fitch has not reviewed the results of any third-party assessment of the asset portfolio information or conducted a review of origination files as part of its ongoing monitoring. 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 Ares European CLO XII 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. CVC CORDATUS XXV-A: Fitch Assigns B-(EXP)sf Rating to Cl. F-R Notes ------------------------------------------------------------------- Fitch Ratings has assigned CVC Cordatus Loan Fund XXV-A DAC reset notes expected ratings. The assignment of final ratings is contingent on the receipt of final documents conforming to information already reviewed. Entity/Debt Rating ----------- ------ CVC Cordatus Loan Fund XXV-A DAC A-1-R LT AAA(EXP)sf Expected Rating A-2-R LT AAA(EXP)sf Expected Rating B-R LT AA(EXP)sf Expected Rating C-R LT A(EXP)sf Expected Rating D-R LT BBB-(EXP)sf Expected Rating E-R LT BB-(EXP)sf Expected Rating F-R LT B-(EXP)sf Expected Rating Transaction Summary CVC Cordatus Loan Fund XXV-A DAC is a securitisation of mainly senior secured obligations (at least 96%) with a component of senior unsecured, mezzanine, second-lien loans and high-yield bonds. Note proceeds will be used to redeem the existing notes (except the subordinated notes) and to fund the existing portfolio with a target par of EUR500 million. The portfolio is actively managed by CVC Credit Partners Investment Management Limited. The CLO will have a 4.5-year reinvestment period and a 7.5-year weighted average life (WAL) test at closing, which can be extended one year after closing, subject to conditions. KEY RATING DRIVERS Average Portfolio Credit Quality (Neutral): Fitch assesses the average credit quality of obligors at 'B'/'B-'. The Fitch-weighted average rating factor of the identified portfolio is 25.6. 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 favourable than for second lien, unsecured and mezzanine assets. The Fitch-weighted average recovery rate of the identified portfolio is 60.0%. Diversified Portfolio (Positive): The transaction will include various concentration limits in the portfolio, including a fixed-rate obligation limit of 12.5%, a top 10 obligor concentration limit of 20% and maximum exposure to the three-largest Fitch-defined industries of 40%. These covenants ensure the asset portfolio will not be exposed to excessive concentration. WAL Step-Up Feature (Neutral): From one year after closing, the transaction can extend the WAL test by one year. The WAL extension is at the option of the manager, but subject to conditions including passing the Fitch collateral quality tests and the aggregate collateral balance with defaulted assets at their collateral value being equal to or greater than the reinvestment target par. Portfolio Management (Neutral): The transaction will have a 4.5-year reinvestment period and includes reinvestment criteria similar to those of other European transactions. Fitch's analysis is based on a stressed case portfolio with the aim of testing the robustness of the transaction structure against its covenants and portfolio guidelines. Cash Flow Modelling (Positive): The WAL for the transaction's Fitch-stressed portfolio analysis is 12 months less than the WAL covenant. This is to account for the strict reinvestment conditions envisaged by the transaction after its reinvestment period, which include passing the coverage tests and the Fitch 'CCC' bucket limitation test after reinvestment as well as a WAL covenant that gradually steps down, before and after the end of the reinvestment period. Fitch believes these conditions would 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) across all ratings and a 25% decrease of the recovery rate (RRR) across all ratings of the identified portfolio would have no impact on the class A-1-R, A-2-R and B-R notes and would lead to downgrades of one notch for the class B-R, C-R, D-R and E-R notes and to below 'B-sf' for the class F-R notes. 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-R, D-R, E-R and F-R notes display rating cushions of two notches and the class C-R notes of one notch. Should the cushion between the identified portfolio and the Fitch-stressed portfolio be eroded either due to manager trading or negative portfolio credit migration, a 25% increase of the mean RDR across all ratings and a 25% decrease of the RRR across all ratings of the Fitch-stressed portfolio would lead to downgrades of up to three notches for the class A-1-R, A-2-R, B-R, C-R and D-R notes and to below 'B-sf' for the class E-R and F-R notes. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade A 25% reduction of the mean RDR across all ratings and a 25% increase in the RRR across all ratings of the Fitch-stressed portfolio would lead to upgrades of up to three notches for the notes, except the 'AAAsf' notes, which are at the highest level on Fitch's scale and cannot be upgraded. During the reinvestment period, based on the Fitch-stressed portfolio, upgrades 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 remaining life of the transaction. 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 CVC Cordatus Loan Fund XXV-A 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. CVC CORDATUS XXV-A: S&P Assigns Prelim B- (sf) Rating to F-R Notes ------------------------------------------------------------------ S&P Global Ratings assigned its preliminary credit ratings to CVC Cordatus Loan Fund XXV-A DAC's class A-1-R, A-2-R, B-R, C-R, D-R, E-R, and F-R notes. The issuer has unrated subordinated notes outstanding from the existing transaction. The preliminary ratings assigned to the notes reflect our assessment of: -- The diversified collateral pool, which consists primarily of 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 Global Ratings' weighted-average rating factor 2,886.51 Default rate dispersion 480.66 Weighted-average life (years) 4.45 Weighted-average life extended to cover the length of the reinvestment period (years) 4.50 Obligor diversity measure 154.17 Industry diversity measure 21.75 Regional diversity measure 1.25 Transaction key metrics Portfolio weighted-average rating derived from S&P's CDO evaluator B 'CCC' category rated assets (%) 1.73 Target 'AAA' weighted-average recovery (%) 35.68 Covenanted weighted-average spread (%) 3.80 Covenanted weighted-average coupon (%) 4.00 Liquidity facility This transaction has a EUR1.0 million liquidity facility, provided by The Bank of New York Mellon, with a maximum commitment period of four years and an option to extend for a further 24 months. The margin on the facility is 2.50% and drawdowns are limited to the amount of accrued but unpaid interest on collateral debt obligations. The liquidity facility is repaid using interest proceeds in a senior position of the waterfall or repaid directly from the interest account on a business day earlier than the payment date. For S&P's cash flow analysis, it assumes that the liquidity facility is fully drawn throughout the six-year period and that the amount is repaid just before the coverage tests breach. Rating rationale Under the transaction documents, the rated notes 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 four and half 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 EUR500 million target par amount, the covenanted weighted-average spread (3.80%), the target weighted-average coupon (4.00%), and the target weighted-average recovery rates calculated in line with our CLO criteria for all rating levels except for 'AAA', where we have 1% cushion on the target weighted-average recovery rate. 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. "Under our structured finance sovereign risk criteria, we consider that the transaction's exposure to country risk is sufficiently mitigated at the assigned preliminary ratings. "Until the end of the reinvestment period on Oct. 22, 2029, the collateral manager may substitute assets in the portfolio for so long as our 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 it 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. "At closing, we expect that the transaction's documented counterparty replacement and remedy mechanisms will adequately mitigate its exposure to counterparty risk under our current counterparty criteria. "We expect the transaction's legal structure and framework to be bankruptcy remote, in line with our legal criteria. "Our credit and cash flow analysis indicates that the available credit enhancement for the class B-R and C-R notes could withstand stresses commensurate with higher rating levels than those we have 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 assigned to the notes. "For the class F-R notes, our credit and cash flow analysis indicates that the available credit enhancement could withstand stresses commensurate with a lower rating. However, we have applied our 'CCC' rating criteria, resulting in a preliminary 'B- (sf)' rating on this class of notes." The ratings uplift for the class F-R notes reflects several key factors, including: -- The class F-R notes' available credit enhancement, which is in the same range as that of other CLOs S&P has rated and that hs recently been issued in Europe. -- The portfolio's average credit quality, which is similar to other recent CLOs. -- S&P's model generated break-even default rate at the 'B-' rating level of 22.40% (for a portfolio with a weighted-average life of 4.5 years), versus if it was to consider a long-term sustainable default rate of 3.1% for 4.5 years, which would result in a target default rate of 13.95%. -- S&P does not believe that there is a one-in-two chance of this note defaulting. -- S&P does not envision this tranche defaulting in the next 12-18 months. S&P said, "Following this analysis, we consider that the available credit enhancement for the class F-R notes is commensurate with the assigned preliminary 'B- (sf)' rating. "Taking the above factors into account and following our analysis of the credit, cash flow, counterparty, operational, and legal risks, we believe that the assigned preliminary ratings are commensurate with the available credit enhancement for all the rated classes of notes. "In addition to our standard analysis, to provide an indication of how rising pressures among speculative-grade corporates could affect our preliminary ratings on European CLO transactions, we have also included the sensitivity of the ratings on the class A-1-R to E-R 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-R notes." Environmental, social, and governance S&P said, "We regard the exposure to environmental, social, and governance (ESG) credit factors in the transaction as being broadly in line with our benchmark for the sector. Primarily due to the diversity of the assets within CLOs, the exposure to environmental credit factors is viewed as below average, social credit factors are below average, and governance credit factors are average. For this transaction, the documents prohibit or limit assets from being related to certain industries. Since the exclusion of assets from these industries 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." The transaction securitizes a portfolio of primarily senior secured leveraged loans and bonds and will be managed CVC Credit Partners Investment Management Ltd. Ratings list Prelim Prelim amount Indicative Credit Class rating* (mil. EUR) interest rate(%)§ enhancement(%) A-1-R AAA (sf) 305.00 3/6-month EURIBOR + 1.22 39.00 A-2-R AAA (sf) 5.00 3/6-month EURIBOR + 1.50 38.00 B-R AA (sf) 53.50 3/6-month EURIBOR + 1.90 27.30 C-R A (sf) 29.50 3/6-month EURIBOR + 2.50 21.40 D-R BBB- (sf) 38.00 3/6-month EURIBOR + 3.60 13.80 E-R BB- (sf) 21.50 3/6-month EURIBOR + 5.85 9.50 F-R B- (sf) 16.30 3/6-month EURIBOR + 8.50 6.24 Sub NR 36.40 N/A N/A *The preliminary ratings assigned to the class A-1-R, A-2-R, and B-R notes address timely interest and ultimate principal payments. The preliminary ratings assigned to the class C-R, D-R, E-R, and F-R notes address ultimate interest and principal payments. §Solely for modeling purposes as the actual spreads may vary at pricing. The payment frequency switches to semiannual and the index switches to six-month EURIBOR when a frequency switch event occurs. NR--Not rated. N/A--Not applicable. EURIBOR--Euro Interbank Offered Rate. ========= I T A L Y ========= GOLDEN GOOSE SPA: S&P Ups ICR to 'BB-' on Sustained Low Leverage ---------------------------------------------------------------- S&P Global Ratings raised its long-term issuer credit rating on Milan-based global luxury company Golden Goose SpA to 'BB-' from 'B+' and its issue-level rating on the company's floating rate senior secured notes to 'BB-' from 'B+'. The recovery rating on the floating rate senior secured notes remains unchanged at '3', reflecting its expectation of meaningful recovery prospects (50%-70%; rounded estimate: 60%) in the event of default. The stable outlook reflects S&P's expectation that Golden Goose will continue to generate solid revenue growth of 9 %-10% per year, outperforming its addressable market, with S&P Global Ratings-adjusted EBITDA margins at about 33.0%-33.5% over the next two years, adjusted debt-to-EBITDA ratios at about 3.0x, and free operating cash flow (FOCF) after leases of EUR50 million-EUR60 million over 2025 and 2026, enabling the company to self-fund its expansion strategy. The upgrade mainly reflects the company's continued track record of maintaining S&P Global Ratings-adjusted leverage below 4.0x with prudent financial policy, combined with healthy and recurring positive annual FOCF, which S&P expects to continue. In 2024 (ended Dec. 31), the company reported year-over-year sales growth of approximately 11% (about 13% on a constant currency basis). This strong performance was driven primarily by the DTC channel, which increased 18% year over year, supported by a higher customer conversion rate, contributions from new store openings, and continued momentum in the digital segment. The Americas (accounting for 40% of 2024 sales) and Europe, Middle East, and Africa (EMEA; 48%) were key growth contributors, while temporary market challenges in Asia-Pacific (12%) resulted from a decline in customer traffic. Over the same period, the company maintained stable S&P Global Ratings-adjusted leverage at 3.4x with an adjusted EBITDA margin of 31.7%, from 33.2% in 2023, primarily due to increase central and marketing costs, as well as costs related to IPO preparation. S&P Global Ratings-adjusted FOCF remained stable at EUR60 million, with capital expenditure (capex) rising slightly to EUR52.1 million in 2024 from EUR38.9 million in 2023, reflecting DTC development. S&P said, "We expect volume growth and Golden Goose's DTC channel will support its operating performance to remain robust over the next 12-18 months. We forecast margins to remain stable at 33% over the next two years, supported by the expansion of the DTC business, which now represents approximately 77% of sales up from 46% in 2020. We project S&P Global Ratings-adjusted debt to EBITDA to stay at about 3.0x on a gross basis, reaching 3.1x in 2025 with further deleveraging to below 3.0x in 2026. We expect adjusted capex to be in the EUR50 million-EUR55 million range in 2025 and 2026, reflecting the company's focus on capitalizing on strong retail momentum and digital platform growth. Additionally, we anticipate the company will maintain positive S&P Global Ratings-adjusted FOCF after leases of approximately EUR50 million-EUR60 million over the same period. "We consider Golden Goose's customer base to be resilient, even during periods of market uncertainty. We think that the company's unique selling proposition and innovative customer experience contribute to its resilience." A differentiated market approach with consistent pricing, a diversified presence, and an engaging in-store experience supports customer loyalty. With 65% of customers being local, the company is less reliant on tourism, and 37% have made repeat purchases, highlighting strong brand engagement. Since 2020, the company has more than doubled net revenues to EUR655 million in 2024, driven by steady growth and a 170 basis points margin uplift from a refined product mix. Diversification has improved, with their iconic Super-Star sneakers now representing 40% of sales, down from 60% in 2020, supported by category expansion. In-house production increased to 56% in 2024 following the acquisition of two suppliers, strengthening the supply chain. Overall, the company's positive momentum and strong track record reflect excellent management execution, supported by a prudent financial policy. As of December 2024, Golden Goose operated 215 directly operated stores and plans to expand its presence with around 20 new stores opening per year until 2029, while investing in the digital growth channel. In 2024, the retail was driving DTC performance growth of 23%, supported by 24 net new store openings and high like-for-like growth. Over the next five years, the company plans to expand into new markets, with the potential to open 46 new stores across the Middle East, Latin America, India, and Southeast Asia. The strategic direction includes extending store locations beyond just tier-1 cities in America, with 27 new stores planned. In the EMEA region, the company is focused on enhancing its presence in luxury destinations, aiming to establish 27 new store locations. S&P views Golden Goose's innovative retail approach positively, as it enhances customer engagement through experiential elements, including opportunities for product co-creation and repair services. S&P said, "We anticipate that Golden Goose management will uphold a prudent financial policy, as demonstrated by its history of maintaining a low leverage ratio and a conservative strategy. The group's deleveraging trend aligns with our 'BB-' rating, and we assess the risk of significant releveraging as low due to disciplined capital allocation and controlled discretionary spending. Golden Goose's cash reserves and committed credit facilities ensure adequate liquidity, supported by long-dated maturities on existing debt, with the nearest maturity in 2027." The recovery rating on the notes remains at '3', indicating meaningful recovery prospects (50%-70%; estimated at 60%) in the event of default, resulting in a 'BB-' issue rating for the rated senior facilities. S&P said, "The stable outlook reflects our expectation that Golden Goose will generate solid revenue growth, outperforming its addressable market, with S&P Global Ratings-adjusted EBITDA margins at about 33%-33.5% over next two years, adjusted debt-to-EBITDA ratios at about 3.0x, and FOCF after leases of EUR50 million-EUR60 million over 2025 and 2026, enabling the company to self-fund its expansion strategy. "We could take a negative rating action if we think that Golden Goose's S&P Global Ratings-adjusted leverage would increase and remain above 4.0x or if FOCF fell substantially short of our base-case scenario." This could occur if, for example, financial policy was to become more aggressive than anticipated, leading to higher discretionary spending and weaker credit metrics, or the company faced an unexpected and material adverse shift in demand. The potential for an upgrade is contingent on the evolution of shareholder structure and a commitment to a long-term financial policy. S&P may consider raising the ratings if: -- Revenue increases significantly and EBITDA margins increase while the company pursues a disciplined financial policy, including shareholder returns that commit to sustained leverage below 2.0x; or -- Greater scale reflecting the success of the company's DTC focus and product diversity leading to a stronger business profile with sustained growth and profitability. =================== L U X E M B O U R G =================== LOARRE INVESTMENTS: Fitch Affirms 'BB' Rating on EUR825MM Sr. Notes ------------------------------------------------------------------- Fitch Ratings has affirmed Loarre Investments S.a r.l.'s EUR825 million senior secured notes at 'BB'. The Outlook is Stable. RATING RATIONALE The rating reflects Loarre's stable revenue under its silent partnership agreement with LaLiga, the second most followed football league in the world, but is weighed down by loose debt-structure features and high leverage. Loarre's underlying cashflow is generated from LaLiga, the most popular sports league in Spain, underpinned by the long-term visibility of both domestic media TV contracts running until the financial year to June 2027, and international contracts that are well-diversified and with potential growth. LaLiga has some of the world's most renowned clubs and players, with a strong on-pitch performance, which has fostered a dedicated and stable fan base. KEY RATING DRIVERS Revenue Risk, League Business Model: 'Midrange' - Solid Fan Support; Soft Salary Cap LaLiga has a long history of strong fan support underpinned by its promotion/relegation structure. It is one of the most followed football leagues in the world, with some of the most successful and popular clubs. This strong fan base facilitates the sale of the broadcasting rights both domestically and internationally. Unlike other European football leagues, it has a soft salary cap, although this is related to each club's budget, creating a large disparity in the level of caps, especially given the domination of two high-profile clubs. Despite this, the measures have increased clubs' financial sustainability and the league's overall competitiveness. National Television /Other League Revenue: 'Strong' - High Visibility of Revenue LaLiga has contracted most of domestic TV rights until FY27, creating high visibility on the majority of its revenue. Overall, Fitch expects the share of contracted revenue to be above 90% for the next two seasons before falling to about 70% in the 2026-2027 season. LaLiga is a top-tier sport asset, particularly to the main broadcasters in Spain. Internationally, the strong on-pitch performance of its clubs and the historical attraction of star players have fostered a strong global fan base, second only to the English Premier League. League Initiatives and Growth Prospects: 'Midrange' - Moderate-to-Low Growth Prospects Football is the undisputable leading sport in Spain, but Fitch sees only moderate growth potential in the domestic market due to its already strong position. Nonetheless, Fitch sees broader growth opportunities internationally as a result of the widespread commercial presence of LaLiga. This should allow LaLiga to further develop its fan base and manage relationships with international broadcasters. Debt Structure: 'Weaker' - Concentrated Bullet, Loose Covenants The debt structure comprises senior fixed- and floating-rate notes with bullet maturity in 2029 and a super senior revolving credit facility (RCF). The concentrated bullet maturity leads to heightened refinancing risk near maturity, while a weak covenant package allows additional debt to be raised as long as leverage is below 6x. Debt service is supported by a six-month interest-funded debt service reserve account and a EUR40 million RCF, both of which provide good liquidity to support interest payment, but do not reduce the refinancing risk. Many covenants will be waived if the debt's rating is upgraded to investment-grade. Legal Risks Legal risks have diminished following the February 2024 ruling by the First Instance Court of Madrid, which confirmed the legal validity of LaLiga's internal approval of Loarre's transaction in the December 2021 assembly. However, some legal risks remain as the judgment has been appealed, a process that could extend over several years. Fitch may reassess debt capacity if courts continue to rule in favour of the transaction. Fitch views several layers of protection available to noteholders. Firstly, on review of legal opinions prepared by transaction counsel, it is its understanding that LaLiga has full capacity to enter into the transaction documents and that the litigation outlined above should be dismissed, either by the Courts of First Appeal or by the higher courts. After a series of favourable legal developments over the last two years, the most recent court ruling has confirmed this view. Secondly, in case of an adverse court outcome declaring any of the investment documents null and void or if there is a change in regulation affecting LaLiga, the nullity agreement entered into by Loarre and LaLiga structures an orderly wind down of the transaction. Thirdly, in the unlikely case that the nullity agreement is also declared null and void due to an adverse court ruling, Fitch understands from the legal counsel that the general provisions of the Spanish Civil Code will apply and that both sides will be required to immediately return to the other the balance resulting from offsetting the amounts paid by each of them, plus the legal interest applied. In the event of a delay to this repayment, Fitch sees sufficient liquidity to cover about 18 months of interest, and incentives for CVC, the sponsor of Loarre, to support debt obligations in the short term, given the share pledge to lenders and the significant equity CVC has in the investment. For more information see: "Loarre Investments' Legal Risks Ease After Court Ruling" published 12 March 2024. Financial Profile Under the Fitch rating case (FRC), Fitch expects net debt/EBITDA to average 5x for FY25-FY29, decreasing below 5x by FY28. PEER GROUP Loarre differs from all other league ratings through the involvement of a private equity-owned special-purpose vehicle, which is the ultimate issuer of its debt. This creates some structural weaknesses compared with peers'. Compared with the National Football League's (NFL) wide funding programme (Football Funding II LLC, A/Stable), Loarre has weaker KRD assessments due to the structural and governance strengths of the NFL, whose leverage is also significantly lower at below 2x, compared with 5x at Loarre. It can also be compared with club ratings, such as Inter Media and Communication S.p.A. (B+/Stable), which has significantly higher operational and sporting risk than Loarre given the former's franchise nature. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Failure to deleverage below 6x on a sustained basis under the Fitch rating case (FRC) - An adverse outcome of litigation against the transaction resulting in significant uncertainty over Loarre's ability to service debt obligations Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Reduction of net debt/EBITDA to below 4x on a sustained basis under the FRC, a level that could be reassessed in the event of diminished legal risk ESG Considerations The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Loarre Investments S.a r.l. Loarre Investments S.a r.l./Project Revenues - Senior Secured Debt/1 LT LT EUR 500 mln 6.5% bond/note 15-May-2029 XS2483510637 LT BB Affirmed BB EUR 325 mln Floating bond/note 15-May-2029 XS2483513144 LT BB Affirmed BB MONITCHEM HOLDCO 2: S&P Affirms 'B' Rating, Alters Outlook to Neg. ------------------------------------------------------------------ S&P Global Ratings revised its outlook on Monitchem Holdco 2 S.A. (doing business as CABB) to negative from stable, reflecting tight credit metrics and the absence of a near-term recovery in cash flow or leverage. At the same time, S&P affirmed its 'B' rating on Monitchem. S&P said, "The negative outlook indicates that we may lower the rating by one notch within the next 12 months if pressure on Monitchem's EBITDA margin, caused by a delayed market recovery, leads to debt-to-EBITDA exceeding 6.5x and FOCF turning significantly negative, with no clear path to recovery. "We anticipate Monitchem's credit metrics will remain weak in 2025, reflecting sustained profitability pressures, elevated leverage, and a delayed market recovery. The company's 2024 adjusted EBITDA declined by 32% to approximately EUR114 million, driven by prolonged destocking effects, weaker-than-expected demand recovery in the second half of the year, and lower pricing across base chemicals and intermediate segments. Volumes and prices for crop science products have also significantly fallen, as farmers are affected by high inflation and difficult market conditions. This deterioration pushed adjusted leverage to about 7.0x in 2024, up from 4.6x in 2023. A rebound in demand and pricing, originally expected in 2025, is now more likely in 2026, resulting in a sluggish EBITDA forecast for 2025, with only a modest improvement to EUR115 million. As such, we forecast leverage will remain at 6.9x-7.0x in 2025, above our downside trigger of 6.5x." Revenue growth will likely remain subdued in 2025 due to ongoing market challenges, particularly in crop science and advanced intermediates. In 2024, revenue declined by approximately 18% to EUR604 million, from EUR740 million in 2023, reflecting weak end-market demand, customer destocking, and cautious distributor purchasing. While destocking effects have eased, overall demand remains weak, with no signs of a rapid recovery, particularly in agrochemicals. However, life sciences, which tend to be more resilient in downturns, may offer some support. Given these trends, S&P forecasts only a slight revenue increase of 0.5% in 2025, with a more meaningful recovery expected in 2026. Tight profitability and pricing pressures will continue to weigh on margins, delaying the anticipated recovery. S&P said, "We expect S&P Global Ratings-adjusted EBITDA margin to remain depressed at around 19% in 2025, in line with 2024 and significantly lower than the 22.4% achieved in 2023. Weak caustic soda pricing and a delayed inventory restocking cycle among distributors have pushed our expectations for a margin rebound to 2026, when we anticipate EBITDA improving to EUR126 million with a margin of approximately 20%. While this should support deleveraging, we don't expect leverage to fall below the 6.5x downside trigger until at least 2026." S&P said, "We now expect free operating cash flow (FOCF) to remain negative in the medium term. FOCF is projected to remain negative at approximately -EUR19 million in 2025, reflecting continued EBITDA weakness, high interest costs, and ongoing maintenance and investment requirements. Although FOCF is not materially negative, the combination of persistent cash outflows and elevated leverage leaves the company with little room for underperformance at the current rating level. We do not anticipate FOCF turning positive until at least 2028, as management maintains its ambition to continue investing in capacity expansion for future growth despite challenging operating performance. "The negative outlook indicates minimal remaining headroom under the current rating. We may lower the rating by one notch within the next 12 to 18 months if pressure on Monitchem's EBITDA margin, caused by a delayed market recovery, leads to debt-to-EBITDA exceeding 6.5x and FOCF turning significantly negative, with no clear path to recovery. "We could lower the rating if leverage remains above 6.5x, while FOCF turns largely more negative than expected under normalized capital expenditure (capex). This could result from lower EBITDA, for example, stemming from factors such as sustained demand weakness, a significant deterioration in market conditions, pricing pressures, or higher-than-expected restructuring costs due to unforeseen operational risks. Additionally, weaker liquidity or a more aggressive financial policy related to capex, acquisitions, or dividends could further pressure the rating. "We could revise the outlook to stable if Monitchem demonstrates a recovery in operating performance, leading to a sustainable reduction in leverage below 6.5x, accompanied by a swift improvement in FOCF. This could be driven by stronger demand, favorable pricing conditions, successful cost-saving initiatives, margin recovery due to reduced cost inflation, and an improving market environment in the agrichemical sector." =========== R U S S I A =========== ASAKABANK JSC: Fitch Affirms 'BB-' Long-Term IDR, Outlook Stable ---------------------------------------------------------------- Fitch Ratings has affirmed Joint-Stock Company Asakabank's (Asaka) Long-Term Issuer Default Ratings (IDRs) at 'BB-' with Stable Outlooks and its Viability Rating (VR) at 'b'. Key Rating Drivers Support-Driven IDRs: Asaka's IDRs reflect Fitch's view of a moderate probability of support from the government of the Republic of Uzbekistan (BB-/Stable), as captured by its Government Support Rating (GSR) of 'bb-'. This view is based on its majority state ownership, moderate systemic importance, and the low cost of potential support relative to the sovereign's international reserves. Standalone Credit Profile: Asaka's 'b' VR reflects its exposure to the volatile local operating environment, asset-quality risks with a high share of loans in foreign currency, significant risk concentrations, weak profitability, and dependence on foreign funding. The VR also captures a moderate corporate franchise and a reasonable liquidity cushion. Gradual Market Improvements, Structural Risks: Uzbekistan's banks have benefitted from ongoing, but gradual, market reforms that have fostered economic growth, lifted restrictions on lending, and improved governance and risk-management practices. However, the local banking sector remains highly concentrated and state-dominated, despite privatisation plans. It is also exposed to heightened credit and currency risks and is reliant on state and external borrowings. Ongoing Business Model Transformation: Asaka is the fourth-largest bank in Uzbekistan (8% of sector assets at end-2024) with a core corporate franchise in extractive and manufacturing sectors. The bank is undergoing a pre-sale business transformation, which involves a shift to commercial lending with a focus on developing the SME and retail segments, away from directed lending. Lending Growth Halted: Capital constraints and ongoing business model changes have resulted in lending stagnation (4% contraction in 2024, foreign-exchange adjusted). Risks mainly stem from high borrower and industry concentrations as well as above-market loan dollarisation at 64% at end-2024, versus the sector average of 44%, but they are partially mitigated by state guarantees on some large exposures. Asset-Quality Metrics to Weaken: Impaired loans under IFRS9 equalled 8.3% of gross loans at end-2023, although these were 0.8x covered by total loan loss allowances. Fitch estimates the impaired loan ratio was around 10% at end-2024 and expects it to moderately increase to 12% by end-2026 on the back of continuing loan book quality deterioration. Modest Core Profitability: Low-yielding legacy loans and significant wholesale funding with floating rates weigh on net interest margin, which at 2% at end-2024 was lower than the sector average of 5%. Pre-impairment profit is modest, at 1.8% of average gross loans in 2024, and coupled with high impairment charges, resulted in a weak return on average equity of 0.6%. Moderate Capital Cushion: The Tier 1 ratio under local GAAP increased to 14.2% at end-2024 (end-2023: 13.2%), due mainly to conversion of subordinated state funding into equity. Fitch expects the Fitch core capital (FCC) ratio to decrease in the near term, closer to 13.5% in 2025-2026, from an estimated 14% at end-2024, providing only a narrow buffer against asset-quality risks. High External Liabilities: Asaka remains reliant on wholesale debt (55% of total liabilities at end-2024), which mainly comprises long-term borrowings from foreign banks and international financial institutions. State-related funding (government deposits and subordinated loans) represented another 15% of total liabilities. Liquid assets, which amounted to 12% of total assets at end-2024, covered around 57% of non-state deposits. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The support-driven IDRs could be downgraded if Uzbekistan's sovereign IDR is downgraded. The ratings could also be downgraded if Asaka's controlling stake is sold to a strategic investor with a lower rating than the sovereign rating, or one without a rating. However, even after privatisation, Fitch anticipates that the IDRs would factor in potential support at one notch below the sovereign's ratings, provided the bank maintains its systemic importance. The VR could be downgraded if the bank's capital buffer decreases below 100bp over regulatory minimum levels on a sustained basis, for example, due to a sharp deterioration in the bank's asset quality, resulting in loss-making performance, or higher lending growth. Deterioration in liquidity buffers, particularly in foreign currency, resulting from insufficient cash flows generated by the loan book could be credit-negative, as could a material increase in refinancing risk due to the bank's worsening liquidity position. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The support-driven ratings could be upgraded if the Uzbek sovereign IDR is upgraded. An upgrade of the VR is currently unlikely and would require improvements in the Uzbek operating environment, along with a material and sustained improvement in asset-quality and profitability. Additionally, it would necessitate a strengthening of the bank's risk profile and funding structure. OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS Asaka's ex-government support (xgs) ratings exclude assumptions of extraordinary government support from the underlying rating on the international scale (Long-Term IDR) and are at the level of the bank's VR. OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES Any actions on the ex-government support ratings will mirror changes to Asaka's VR. Public Ratings with Credit Linkage to other ratings Asaka's Long-Term IDRs are driven by potential support from the government of Uzbekistan. ESG Considerations Asaka has an ESG Relevance Score of '4' for Governance Structure as the state of Uzbekistan is highly involved in the banks at board level and in the business. Its ESG Relevance Score of '4' for Financial Transparency reflects delays in IFRS accounts publications, which are prepared only on annual basis. Both factors have a moderately negative impact on the bank's credit profile and are relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Joint-Stock Company Asakabank LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Viability b Affirmed b Government Support bb- Affirmed bb- LT IDR (xgs) B(xgs) Affirmed B(xgs) ST IDR (xgs) B(xgs) Affirmed B(xgs) LC LT IDR (xgs) B(xgs) Affirmed B(xgs) LC ST IDR (xgs) B(xgs) Affirmed B(xgs) =========== T U R K E Y =========== ARCELIK: S&P Downgrades Long-Term ICR to 'BB-', Outlook Stable -------------------------------------------------------------- S&P Global Ratings lowered its long-term issuer credit rating on Turkish appliances maker Arcelik to 'BB-' from 'BB' and on its senior unsecured debt to 'B+' from 'BB'. S&P said, "The stable outlook indicates our view that Arcelik will gradually improve its profitability in the next 12-18 months thanks to a successful integration of the acquisition of Whirlpool Europe and to dedicated cost-saving initiatives, also resulting in a gradual improvement in its ability to cover interest payments. "We forecast Arcelik's profitability will improve gradually in the next 12-18 months, thanks to dedicated cost-saving initiatives, yet it will likely remain below historical levels. The main driver to the lower profitability achieved last year comes from the dilutive impact from the acquisition in April 2024 of Whirlpool Europe, which generated an EBIT margin of 0.8% in 2023, according to Whirlpool's disclosures. The lower margin also reflects pricing pressure from intense competition in Europe, increased salaries, and negative impact from foreign exchange effects. Arcelik is taking steps to achieve about EUR100 million-EUR150 million of cost synergies with the recent acquisition of Whirlpool Europe, mostly coming from the elimination of office positions across Italy, Poland, and the U.K., and subsequent optimization of its manufacturing footprint. Arcelik is looking to achieve further cost savings through digitalization initiatives, supporting better productivity and a faster execution of cost synergies. We forecast Arcelik to improve its S&P Global Ratings-adjusted EBITDA margin to about 4.5%-5.0% in 2025 and further to 5.0%-5.5% in 2026, from the 3.9% achieved in 2024. Yet those metrics remain lower than the 6.7% achieved in 2023, before the acquisition of Whirlpool Europe. "We forecast Arcelik's EBITDA interest coverage ratio to remain at 1.0x-1.5x over the next 12-18 months due to Arcelik's reliance on expensive local-currency short-term debt. Arcelik's business model is to support its retail partners in Turkey with specific payment terms to support further revenue growth, meaning that it relies on local-currency short-term debt to fund working capital requirements. As a result, at year-end 2024, 44% of the debt in its capital structure had a remaining maturity of up to 12 months. The company issued three short-term local-currency bonds in 2024 with coupon rates of 44%, 46.5%, and 47%, which illustrates the currently high cost of short-term funding in Türkiye. We forecast Arcelik will be able to refinance its working capital-related short-term debt, thanks to its strong relationship with local banks and its positive track record of accessing bank and capital market financing. "We forecast Arcelik will achieve neutral to negative Turkish lira (TRY) 1 billion free operating cash flow (FOCF)in 2025 and 2026 because of high restructuring expenses. This is a material improvement from the negative TRY24.8 billion achieved in 2024. We forecast annual capital expenditure (capex) of TRY13 billion-TRY15 billion in the next two years, lower than the TRY23.8 billion spent in 2024, because the capacity expansion projects in Egypt and Bangladesh completed last year. Our forecast capex includes about TRY5 billion of development costs. We also forecast Arcelik will maintain good control over its working capital requirements, which we estimate at TRY1 billion-TRY2 billion per year in 2025 and 2026. Notably, we forecast the company will continue to optimize trade receivables, thanks to early payment discounts with its distributors and to its factoring program. We note that Arcelik recorded provisions of TRY11.8 billion for restructuring costs at year-end 2024 to achieve cost synergies with assets contributed by Whirlpool Europe, of which TRY655 million were expensed last year. Our forecast includes our estimate of TRY2 billion-TRY3 billion annual utilization of provisions in 2025 and 2026. We do not include the restructuring expenses in our computation of Arcelik's EBITDA for 2024, given the transformational nature of the business partnership with Whirlpool Europe, which caused material changes to its scale of revenue, profitability, and business diversification away from Türkiye. "The 'B+' issue rating on the senior unsecured notes issued by Arcelik reflects the increased subordination risk following large debt issued by subsidiaries. Following the issuance of a EUR500 million syndicated term loan by Arcelik's subsidiary Beko B.V., we estimate that priority debt (which includes secured debt and unsecured debt issued by operating subsidiaries) exceeds 50% of total consolidated debt issued by Arcelik. This is because we consider that priority debt instruments are closer to the group's income-generating assets, such that we consider them as ranking structurally ahead of the senior notes. That said, we estimate that Arcelik's ability to issue debt from outside of Türkiye enables the group to better match the currency of its debt with that of its cash flows, to access a diversified pool of investors and of debt instruments, and to optimize its cost of debt given the currently high cost of borrowing in Türkiye. Consequently, we forecast priority debt will remain greater than 50% of Arcelik's consolidated debt for the next 12-18 months. "The partnership with Whirlpool in Europe presents cost synergies and business diversification opportunities but entails execution risks, in our view. The partnership combines both companies' European manufacturing assets and brands under a newly established business, of which Arcelik owns a 75% stake. The transaction increases Arcelik's manufacturing capabilities because it adds factories across Continental Europe, which could drive cost synergies across procurement and footprint optimization and increase Arcelik's presence in Europe. However, Whirlpool's assets are less profitable than Arcelik's, as the 2023 0.8% EBIT margin shows. We believe this is partly due to its manufacturing assets being in countries where labor costs are higher and due to their lower capacity utilization rates. The transaction carries execution risks, in our view, given the large provision for restructuring costs, and because the targeted cost synergies could take longer and require greater costs and capex than anticipated. That said, we understand that Arcelik is progressing well toward its cost-synergy targets. It already achieved half of the planned elimination of 2,000 office positions as of Dec. 31, 2024. We also note management's experience and good track record of integrating and extracting cost synergies from acquisitions, as seen in the successful integration of Hitachi, acquired in 2021. "The stable outlook reflects our view that Arcelik will gradually improve its S&P Global Ratings-adjusted EBITDA margin toward 4.5%-5.0% in 2025 and further to 5.0%-5.5% in 2026, thanks to the successful realization of cost synergies, such that it can maintain its EBITDA interest coverage ratio within the 1.0x-1.5x range. We also forecast Arcelik will sustain debt to EBITDA within the 4.0x-5.0x range while the company generates neutral to negative TRY1 billion FOCF in the next 12-18 months. "We could lower the rating on Arcelik if the company fails to improve its profitability in the next 12-18 months, such that its EBITDA interest coverage ratio remains at 1.0x or below. This could happen in case of meaningful setbacks in achieving the targeted cost synergies with recent acquisitions, resulting in greater cost and capex than anticipated, while the cost of local-currency short-term debt remains elevated for Arcelik. Under this scenario, we would anticipate that Arcelik's debt-leverage ratio would deteriorate toward 5.0x or higher, combined with a negative FOCF generation. "We could raise our rating on Arcelik if it improves its profitability faster than anticipated, resulting in a debt-leverage ratio improving to below 4x and its EBITDA interest coverage ratio improving comfortably within the 2x-3x range, with positive FOCF. This could happen if Arcelik achieves the targeted cost-synergies faster than we currently forecast, while consumer demand improves in its main markets, enabling better manufacturing efficiencies. Tangible signs of lower costs of local-currency short-term debt for Arcelik would also support a higher rating." YAPI KREDI: Fitch Affirms 'BB-' Long-Term IDR, Outlook Stable ------------------------------------------------------------- Fitch Ratings has affirmed Yapi Kredi Yatirim Menkul Degerler A.S.'s (Yapi Kredi Yatirim) and Yapi Kredi Faktoring A.S.'s (Yapi Kredi Faktoring) Long-Term Foreign-and Local-Currency Issuer Default Ratings (IDRs) at 'BB-'. The two Turkish non-bank financial institutions' (NBFI) National Ratings have been affirmed at 'AA-(tur)'. The Outlooks are all Stable, mirroring those on the companies' parent, Yapi ve Kredi Bankasi A.S. (BB-/Stable). Key Rating Drivers Support-Driven Ratings: The NBFIs' Long-Term IDRs are equalised with those of the parent bank, reflecting Fitch's view that they are core and highly integrated subsidiaries. Fitch is not able to assess the subsidiaries' intrinsic strength as the two companies are highly integrated within their parent and their franchises rely heavily on their parent. The ratings are driven by potential shareholder support. Highly Integrated Subsidiaries: The ratings of the NBFI subsidiaries reflect their close integration within and ultimate full or majority ownership by their parent bank, as well as the reputational risk of default for their broader group. The subsidiaries offer factoring and investment services in the domestic Turkish market. High Support Propensity: The cost of support for the parent bank would be limited as the subsidiaries are small compared with their parent and their total assets usually do not exceed 1% of group assets. Together with the other support factors listed above, this underpins its view of the parent's very high propensity for support. However, the ability to support is limited by the parent's creditworthiness, as reflected in its ratings. National Ratings: The National Ratings and Outlooks are equalised with those of the parent. Their affirmation reflects its view that the NBFIs' creditworthiness in local currency relative to that of other Turkish issuers is unchanged. RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The NBFIs' Long-Term IDRs are sensitive to a downgrade of their parent's Long-Term IDRs. A downgrade of the parent's National Rating would also be mirrored in the subsidiaries' ratings. The ratings could be notched down from their parent's on a material deterioration in the parent's propensity or ability to provide support or if the subsidiaries become materially larger relative to the parent's ability to support. The ratings could also be notched down from their parent's if the subsidiaries' strategic importance is materially reduced through, for example, weaker operational and management integration, reduced ownership, or a prolonged period of under-performance. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade of the parent's ratings or a revision of the Outlooks to Positive would be reflected in the subsidiaries' ratings and Outlooks. Public Ratings with Credit Linkage to other ratings The NBFIs' ratings are linked to their parent bank's ratings. ESG Considerations The NBFI subsidiaries have ESG Relevance Scores of '4' for Management Strategy, in line with their parent's Management and Strategy ESG Relevance Score. This reflects the high regulatory burden on most Turkish banks. Management's ability to determine strategy is constrained by regulations and creates an additional operational burden for the respective parent banks. The alignment reflects Fitch's view of high integration. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Yapi Kredi Faktoring A.S. LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Natl LT AA-(tur) Affirmed AA-(tur) Shareholder Support bb- Affirmed bb- Yapi Kredi Yatirim Menkul Degerler A.S. LT IDR BB- Affirmed BB- ST IDR B Affirmed B LC LT IDR BB- Affirmed BB- LC ST IDR B Affirmed B Natl LT AA-(tur) Affirmed AA-(tur) Shareholder Support bb- Affirmed bb- ============= U K R A I N E ============= INTERPIPE HOLDINGS: S&P Reinstates 'CCC' ICR, Outlook Negative -------------------------------------------------------------- S&P Global Ratings reinstated its 'CCC' long-term issuer credit rating on Interpipe Holdings PLC. The negative outlook reflects the risk of a downgrade should Interpipe restructure its debt in a way S&P views as a distressed exchange and tantamount to a default. The heightened debt restructuring risk on Interpipe's outstanding $260 million bond, maturing in May 2026, constrains the rating on Interpipe at 'CCC'. S&P said, "On Feb. 4, 2025, Interpipe redeemed $25.4 million of its 2026 bond through a tender offer, reducing the outstanding principal balance from $300 million to $274 million, the company has since repurchased for a further $15 million reducing the principal outstanding to $260 million, we view these partial buybacks as opportunistic in nature. We estimate the company will have a sufficient liquidity buffer over the next 12 months--with over $280 million of cash on balance sheet, approximately $230 million of which is expected to be held outside of Ukraine given that the company maintains about 80% of its cash in offshore bank accounts, and we expect it to generate meaningful cash funds from operations in 2026. These sources should be sufficient to cover working capital and capital expenditure requirements, while also addressing the May 2026 maturity. While we expect Interpipe to continue to service the approximately $25 million annual coupon payments on its bond, it remains unclear whether the company will be able to use its offshore cash to redeem the bond on maturity. Therefore, we expect Interpipe could consider restructuring the debt in a way that we could view the transaction as a distressed exchange and tantamount to a default." S&P said, "Interpipe's performance in 2024 was affected by cost pressures and operational risks, which we expect to continue in 2025. Interpipe reported revenues of $803 million for the first nine months of 2024, rising 2.3% from nine months 2023. The railway products division revenue increased by 25% to $193 million, supported by increased sales volumes to the U.S and Europe. At the same time, revenues from the Pipes division declined by 3.8% to $578 million as lower average selling prices offset higher volumes. The company's EBITDA decreased by 30.5% to $200 million (compared with $288 million in the first nine months of 2023), with margins falling to 25.0% from 36.6% primarily owing to higher scrap, labor, and electricity prices. "The effect on Interpipe from the potential removal of the Section 232 exemption related to steel products remains uncertain. Any tariffs imposed by the U.S. authorities on steel products imported from abroad should, in our view, have a manageable effect for Interpipe at this stage. "The operating environment remains dynamic and risks to the company's future business integrity underpins our assessment. The ongoing conflict poses significant operational and security challenges, the company's pipes workshop in Nikopol, situated just six kilometers (km) from the frontline, experiences near-daily shelling, and a damaged transformer in October 2024 led to a six-week production downtime." While key assets are largely undamaged, and four of the production facilities are located at least 130 km from the nearest front-line, the security situation on the ground remains fluid. Russian attacks on Ukrainian energy infrastructure have caused nationwide electricity shortages, materially driving up costs as supplies need to be imported from Europe. The shortage of skilled labor constrains operations, pushing up wage expenses and increasing reliance on overtime pay. The logistical situation has improved following the reopening of key routes to market. The lifting of border restrictions at the Polish land border in April 2024 has eased transportation bottlenecks for exports to Europe. The reopening of the Odesa port in January 2024 has reduced transit times for shipments to other geographic markets by 20-30 days, although the port area is also subject to regular attacks. The negative outlook reflects the operational uncertainty faced by Interpipe due to the ongoing geopolitical situation and the risk that Interpipe could be downgraded if the company were to restructure its debt in a way S&P would view the terms of a transaction akin with a distressed exchange and tantamount to default ahead of their $260 million bond maturity in May 2026. S&P could lower the rating on Interpipe Holdings if: -- S&P saw a heightened likelihood of the company restructuring debt or if the company were to redeem the bond in a way it views akin with a distressed exchange. -- The geopolitical conflict accelerating such that the operating environment adversely changes. S&P said, "We could revise our rating on Interpipe if we gained visibility on the company's ability to successfully redeem or refinance their May 2026 maturity in the absence of a debt restructuring that we could view as a distressed exchange and there is no deterioration of the operating environment." =========================== U N I T E D K I N G D O M =========================== BEACONSOFT LIMITED: FRP Advisory Named as Joint Administrators -------------------------------------------------------------- Beaconsoft Limited was placed into administration proceedings in the High Court of Justice Court Number: CR-2025-001363, and Alexander Kinninmonth and James Prior of FRP Advisory Trading Limited, were appointed as administrators on March 13, 2025. Beaconsoft Limited operates in the information technology industry. Its registered office is at 71-75 Shelton Street, Covent Garden, London, WC2H 9JQ in the process of being changed to Mountbatten House, Grosvenor Square, Southampton, SO15 2RP Its principal trading address is at 71-75 Shelton Street, Covent Garden, London, WC2H 9JQ. The joint administrators can be reached at: Alexander Kinninmonth James Prior FRP Advisory Trading Limited Mountbatten House, Grosvenor Square Southampton, SO15 2JU For further details contact Joint Administrators Tel: 02381 448 200 Alternative contact: Nate Taylor Email: cp.southampton@frpadvisory.com LEDWELL PLASTICS: FRP Advisory Named as Joint Administrators ------------------------------------------------------------ Ledwell Plastics Limited was placed into administration proceedings in the Leicester County Court Court Number: CR-2025-M60LE021, and John Anthony Lowe and Nathan Jones of FRP Advisory Trading Limited, were appointed as joint administrators on March 17, 2025. Ledwell Plastics, trading as Ledwell Plastics Limited, Tank Track, and Reg the Sledge, specialized in plastic injection moulding and toolmaking. Its registered office is at c/o FRP Advisory, Ashcroft House, Ervington Court, Harcourt Way, Meridian Business Park, Leicester, LE19 1WL Its Principal trading address is at 33 Cannock Street, Leicester, LE4 9HR. The joint administrators can be reached at: John Anthony Lowe Nathan Jones FRP Advisory Trading Limited Ashcroft House, Ervington Court Meridian Business Park, Leicester LE19 1WL For further details, contact: The Joint Administrators Tel No: 0116 303 3333 Alternative contact: Samantha Wetwood Email: cp.leicester@frpadvisory.com METRO BANK: Fitch Assigns 'CCC+' Final Rating to GBP250MM AT1 Notes ------------------------------------------------------------------- Fitch Ratings has assigned Metro Bank Holdings Plc's (MBH; B+/Positive) GBP250 million additional Tier 1 (AT1) notes a final long-term rating of 'CCC+' with a Recovery Rating (RR) of 'RR6'. The final rating is the same as the expected rating assigned on 19 March 2025 and is based on the final documentation received by Fitch. Key Rating Drivers The rating on the AT1 notes is three notches below MBH's 'b+' Viability Rating (VR), in accordance with Fitch's Bank Rating Criteria. The notching comprises two notches for loss severity, given the notes' deep subordination, and one notch for incremental nonperformance risk, given their full discretionary, non-cumulative coupons. Fitch has applied three notches from MBH's VR, instead of the baseline four notches, due to the anchor rating being below the 'BB-' threshold under the agency's criteria. The 'RR6' Recovery Rating reflects poor recovery prospects in a default. MBH's reported common equity Tier 1 (CET1) ratio has increased to 13.4% on a pro-forma basis from 12.5%, following the recently announced sale of an unsecured personal loan portfolio and is moderately above its 9.2% minimum CET1 ratio requirement. MBH's maximum distributable amount (MDA) threshold will increase to 9.7% in April 2025. Using a 13.4% CET1 ratio, Fitch expects MBH's MDA buffer to be adequate at 3.8% on a pro-forma basis. The AT1 issue is intended for general corporate purposes. It will improve the bank's buffers above its minimum Tier 1 ratio and minimum requirement for own funds and eligible liabilities ratio, as well as supporting its loan growth plans. The notes will be subject to partial or full write-down if MBH's consolidated CET1 ratio falls below 7%. For more information about MBH's other ratings see 'Fitch Upgrades Metro Bank Holdings to 'B+'; Outlook Positive'. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade The AT1 notes' rating would be downgraded if MBH's VR is downgraded. The notes rating is also sensitive to an unfavourable revision in Fitch's assessment of the notes' incremental non-performance risk. This may result, for example, from a sharp decline in capital buffers relative to regulatory requirements. For the key sensitivities of MBH's VR, see the most recent rating action commentary referenced above. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade The AT1 notes' rating would be upgraded if MBH's VR is upgraded. Date of Relevant Committee 10 March 2025 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 ----------- ------ -------- ----- Metro Bank Holdings Plc Subordinated LT CCC+ New Rating RR6 CCC+(EXP) NEW CHAPTER: FTS Recovery Named as Joint Administrators ------------------------------------------------------- New Chapter Consulting 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-000308, and Alan Coleman and Marco Piacquadio of FTS Recovery Limited were appointed as joint administrators on March 17, 2025. New Chapter specialized in temporary employment agency activities. Its registered office is at 4:08 Clockwise Yorkshire House, Greek Street, Leeds, West Yorkshire, LS1 5SH. The Joint administrators can be reached at: Alan Coleman FTS Recovery Limited 3rd Floor, Tootal House 56 Oxford Street, Manchester M1 6EU -- and -- Marco Piacquadio RTS Recovery Limited Ground Floor, Baird House Seebeck Place, Knowlhill Milton Keynes, MK5 8FR For further details, contact: The Joint Administrators Tel No: 0161 938 0240 Alternative contact: Chris Jones Email: chris.jones@ftsrecovery.co.uk POLARIS 2024-1: S&P Affirms 'BB+ (sf)' Rating on F-Dfrd Notes ------------------------------------------------------------- S&P Global Ratings raised its credit rating on Polaris 2024-1 PLC's class X-Dfrd notes to 'BBB+ (sf)' from 'BB+ (sf)'. At the same time, S&P affirmed its 'AAA (sf)', 'AA (sf)', 'A+ (sf)', 'A (sf)', 'BBB+ (sf)', and 'BB+ (sf)' ratings on the class A, B-Dfrd, C-Dfrd, D-Dfrd, E-Dfrd, and F-Dfrd notes, respectively. The upgrade of the class X-Dfrd notes reflects their significant paydown and high excess spread since closing. Loan-level arrears have increased since closing and currently stand at 7.21%. Arrears exceeding 90 days stand at 2.78%. Both total arrears and arrears exceeding 90 days are currently below our U.K. nonconforming index for post-2014 originations. No losses have been recorded since closing. Since closing, S&P's weighted-average foreclosure frequency assumptions have increased at all rating levels, driven by increased loan-level arrears. The pool's weighted-average indexed current loan-to-value (LTV) ratio has declined by 0.98 percentage points over the same period. The lower weighted-average current LTV ratio has also led to a decline in our weighted-average loss severity assumptions. Credit analysis results Rating level WAFF (%) WALS (%) Credit coverage (%) AAA 29.49 39.98 11.79 AA 21.18 33.29 7.05 A 16.81 23.30 3.92 BBB 12.34 17.75 2.19 BB 7.77 13.95 1.08 B 6.62 10.66 0.71 WAFF--Weighted-average foreclosure frequency. WALS--Weighted-average loss severity. Counterparty risk does not constrain the ratings on the notes. The replacement language in the documentation is in line with S&P's counterparty criteria. S&P said, "As of the December 2024 investor report, the class X-Dfrd notes have paid down by GBP5.64 million since closing. As a result, our credit and cash flow results indicate that these notes can withstand our stresses at a higher level than that previously assigned. We therefore raised our rating to 'BBB+ (sf)' from 'BB+ (sf)'. We have also tested a sensitivity with 40% prepayments and the assigned rating remains robust to this sensitivity. "Our credit and cash flow results indicate that the available credit enhancement for the class A to F-Dfrd notes continues to be commensurate with the assigned ratings. This is because the assets' performance has slightly deteriorated despite credit enhancement increasing slightly since closing. We therefore affirmed our ratings. "The ratings on the class B-Dfrd and C-Dfrd notes are below those indicated by our standard cash flow analysis. The assigned ratings reflect sensitivities related to higher levels of defaults." Macroeconomic forecasts and forward-looking analysis S&P said, "We expect U.K. inflation to remain above the Bank of England's 2% target in 2025, even though inflation has been moving back toward the target quicker than expected. The year-on-year change in house prices in Q4 2024 in the U.K. was 3.5%. Although high inflation is overall credit negative for all borrowers, inevitably some borrowers will be more negatively affected than others, and to the extent inflationary pressures materialize more quickly or more severely than currently expected, risks may emerge. "Given our current macroeconomic forecasts and forward-looking view of the U.K. residential mortgage market, we have performed sensitivities related to higher levels of defaults due to increased arrears and extended recovery timing due to observed delays to repossession owning to court backlogs in the U.K. and the repossession grace period announced by the U.K. government under the Mortgage Charter. The notes remained robust to these sensitivities." Polaris 2024-1 PLC is a static RMBS transaction that securitizes a portfolio of owner-occupied and BTL mortgage loans secured on properties in the U.K. WINTERSHALL DEA 2: Fitch Affirms 'BB' Rating on Hybrid Notes ------------------------------------------------------------ Fitch Ratings has affirmed Harbour Energy PLC's (Harbour) Long-Term Issuer Default Rating (IDR) and senior unsecured rating at 'BBB-'. The Outlook on the IDR is Stable. Fitch has also affirmed the senior unsecured rating of the notes issued by Wintershall Dea Finance B.V. at 'BBB-' and the subordinated rating on the hybrid notes issued by Wintershall Dea Finance 2 B.V. at 'BB'. Harbour's 'BBB-' Long-Term IDR reflects its enlarged size, improved geographical and asset diversification and higher reserves. However, reserve life and production costs remain weaker than peers. This is balanced by moderate financial leverage and strong cash flows generation with stable production. Key Rating Drivers Mid-Sized Upstream Producer: Harbour's scale and diversification profile has significantly increased following the Wintershall Dea acquisition. Fitch expects its production profile to be stable with average annual production around 450 thousand barrels of oil equivalent per day (kboepd), around 60% of which will be natural gas, over 2025-2028. Production will primarily be focused on Norway and the UK, and to a lesser extent, Argentina, Germany and North Africa. Reserve Life Weaker Than Peers: Harbour's 2P reserves increased after the acquisition of substantially all of Wintershall Dea AG's upstream assets to 1.249 billion barrels of oil equivalent (boe). However, the group's 2P reserve life (eight years, based on production of 450kboepd) is weaker than that of peers like Aker BP ASA (BBB/Stable; 11 years on a 2P basis) or Energean plc (BB-/Stable; 24 years on a 2P basis). This is somewhat mitigated by Harbour's substantial pro-forma 2C resource base at 1.9 billion boe. High Tax Reduces Debt Capacity: Harbour's Fitch-projected EBITDA net leverage remains fairly conservative at less than 1.0x on average over 2025-2028. However, its funds from operations (FFO) net leverage is affected by substantial tax payments due to its presence in high tax jurisdictions such as Norway and the UK. Fitch forecasts FFO net leverage to range between 1.0-2.0x over 2025-2028, although temporary deviations are possible such as during periods of lower oil and natural gas prices, which could require corrective actions such as opex, capex and/or dividend cuts. Average Production Costs, Decommissioning Obligations: The acquisition of Wintershall Dea's assets helped Harbour reduce average production costs, given the former's focus on natural gas. Fitch expects Harbour's operating costs to be around USD14/boe, which Fitch views as average (UK-focused Ithaca Energy plc's (BB-/Stable) production costs are around USD20/boe, while Aker BP's are USD6.2/boe). Harbour's decommissioning provisions relative to 2P reserves should fall to around USD4/boe, compared with pre-acquisition USD10/boe, Ithaca's USD7.5/boe and Aker BP's USD2/boe. However, projected decommissioning pre-tax expenses of around USD350-400 million a year will affect cash flows. Positive M&A Record: Harbour has a record of successfully integrating its acquisitions, like its reverse merger with Premier Oil. Following acquisitions, Harbour's focus has been on debt reduction, and its pre-acquisition net financial debt is minimal. Fitch expects Harbour's financial policy to remain prudent after the Wintershall Dea acquisition. Energy Transition Underway: Harbour plans to be Net Zero by 2050 for its gross operated Scope 1 and 2 CO2e emissions, with an interim target of a 50% reduction versus a 2018 baseline by 2030. This will be aided by Wintershall Dea's assets due to the latter's focus on natural gas. Fitch assumes that at least in the medium term the impact of energy transition on oil and gas companies will be limited. However, over the longer term the oil and gas companies, and in particular pure upstream producers such as Harbour, may be subject to more rigorous regulation, and their margins could be affected by carbon taxes and other regulatory measures. They will also need to adjust to declining hydrocarbons demand. Peer Analysis Harbour's production (post-acquisition averaging 450kboe/d) is similar to that of peers like Aker BP (2024: 440kboe/d), Hess Corporation (BBB/Rating Watch Positive; pre-acquisition 494kboe/d) or APA Corporation (BBB-/Stable; 440kboe/d). Harbour's asset base is geographically more diversified than that of Aker BP (focused on Norway) or US peers. However, its reserve life is weaker (2P reserve life of eight years, compared with Aker BP's 11 years), predominantly in view of Harbour's mature assets in the UK Continental Shelf. Operating costs for combined assets at USD14/boe are higher than Aker BP's 6.2/boe. Its forecast for Aker BP indicates negative free cash flow (FCF) driven by large capex compared with Harbour's positive FCF over the medium term. Key Assumptions Key Assumptions - Oil and gas prices in line with Fitch's base case price deck - Production volumes averaging 450kboe/d over 2025-2028 - Capex at around USD2.1 billion in 2025, USD1.6 billion in 2026 and average USD1 billion a year over 2027-2028 (excluding expensed exploration expenses and decommissioning charges) - Decommissioning charges averaging USD300 million a year over 2025-2028 - Equity credit for the hybrid bonds at 50% RATING SENSITIVITIES Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade - Failure to replenish reserves and maintain a stable production profile - FFO net leverage consistently above 2x or EBITDA net leverage consistently above 1.5x - Aggressive M&A, dividend payments or other policies materially affecting the credit profile and leading to consistently negative FCF Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade - Material improvement in the business profile, including much higher reserve life - Adherence to a conservative financial policy with FFO net leverage below 1x or EBITDA net leverage below 0.5x on a sustained basis Liquidity and Debt Structure Harbour's liquidity remains comfortable with cash and cash equivalents at USD805 million as of end-2024. This is bolstered by a USD3 billion revolving credit facility (RCF), of which USD1.9 billion was undrawn as at end-2024. The RCF is set to mature in 2029. Fitch anticipates that FCF will remain largely positive in 2025-2028. Issuer Profile Harbour is an independent oil and gas exploration and production company. It is domiciled in the UK while its main assets are in Norway, UK, Germany, North Africa and Latin America. 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 Harbour has an ESG Relevance Score of '4' for Waste & Hazardous Materials Management; Ecological Impacts due to significant decommissioning obligations, which has a negative impact on the credit profile, and is relevant to the ratings in conjunction with other factors. The highest level of ESG credit relevance is a score of '3', unless otherwise disclosed in this section. A score of '3' means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. Fitch's ESG Relevance Scores are not inputs in the rating process; they are an observation on the relevance and materiality of ESG factors in the rating decision. Entity/Debt Rating Prior ----------- ------ ----- Wintershall Dea Finance 2 B.V. Subordinated LT BB Affirmed BB Wintershall Dea Finance B.V. senior unsecured LT BBB- Affirmed BBB- senior unsecured LT BBB- Affirmed BBB- Harbour Energy PLC LT IDR BBB- Affirmed BBB- senior unsecured LT BBB- Affirmed BBB- =============== X X X X X X X X =============== [] BOOK REVIEW: Taking Charge ----------------------------- Taking Charge: Management Guide to Troubled Companies and Turnarounds Author: John O. Whitney Publisher: Beard Books Softcover: 283 Pages List Price: $34.95 Order a copy today at: http://beardbooks.com/beardbooks/taking_charge.html Review by Susan Pannell Remember when Lee Iacocca was practically a national hero? He won celebrity status by taking charge at a company so universally known as troubled that humor columnists joked their kids grew up thinking the corporate name was "Ayling Chrysler." Whatever else Iacocca may have been, he was a leader, and leadership is crucial to a successful turnaround, maintains the author. Mediagenic names merit only passing references in Whitney's book, however. The author's own considerable experience as a turnaround pro has given him more than sufficient perspective and acumen to guide managers through successful turnarounds without resorting to name-dropping. While Whitney states that he "share[s] no personal war stories" in this book, it was, nonetheless, written from inside the "shoes, skin, and skull of a turnaround leader." That sense of immediacy, of urgency and intensity, makes Taking Charge compelling reading even for the executive who feels he or she has already mastered the literature of turnarounds. Whitney divides the work into two parts. Part I is succinctly entitled "Survival," and sets out the rules for taking charge within the crucial first 120 days. "The leader rarely succeeds who is not clearly in charge by the end of his fourth month," Whitney notes. Cash budgeting, the mainstay of a successful turnaround, is given attention in almost every chapter. Woe to the inexperienced manager who views accounts receivable management as "an arcane activity 'handled over in accounting.'" Whitney sets out 50 questions concerning AR that the leader must deal with – not academic exercises, but requirements for survival. Other internal sources for cash, including judiciously managed accounts payable and inventory, asset restructuring, and expense cuts, are discussed. External sources of cash, among them banks, asset lenders, and venture capital funds; factoring receivables; and the use of trust receipts and field warehousing, are handled in detail. Although cash, cash, and more cash is the drumbeat of Part I, Whitney does not slight other subjects requiring attention. Two chapters, for example, help the turnaround manager assess how the company got into the mess in the first place, and develop strategies for getting out of it. The critical subject of cash continues to resonate throughout Part II, "Profit and Growth," although here the turnaround leader consolidates his gains and looks ahead as the turnaround matures. New financial, new organizational, and new marketing arrangements are laid out in detail. Whitney also provides a checklist for the leader to use in brainstorming strategic options for the future. Whitney's underlying theme -- that a successful business requires personal leadership as well as bricks and mortar, money and machinery -- is summed up in a concluding chapter that analyzes the qualities that make a leader. His advice is as relevant in this 1999 reprint edition as it was in 1987 when first published. John O. Whitney had a long and distinguished career in academia and industry. He served as the Lead Director of Church and Dwight Co., Inc. and on the Advisory Board of Newsbank Corp. He was Professor of Management and Executive Director of the Deming Center for Quality Management at Columbia Business School, which he joined in 1986. He died in 2013. ********* 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 2025. All rights reserved. ISSN 1529-2754. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Europe subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter Chapman at 215-945-7000. * * * End of Transmission * * *